5

Other Governance and Management Issues Examined in the Past Year

THE ROLE PLAYED BY CONTRACTING OFFICERS AND CONTRACTING OFFICER REPRESENTATIVES

Chapter 4 of the Augustine-Mies report discusses how to maximize the contributions of the management and operating (M&O) organizations to execution of the mission. It points out that “The government needs access to and a healthy working relationship with first-class scientific, engineering, manufacturing and management expertise that in some cases is not resident within the government,” but that “There is concern across the NNSA complex that these needed relationships have eroded over the years, and have become more of an arm’s length, even adversarial contracting relationship, rather than the needed collaborative one.”¹ In the years leading up to that report, “changes in mission, increased regulatory oversight, reduced budget flexibility, and ascendancy of contracting officers in the management structure overturned accepted relationships within the nuclear weapons program. DOE/NNSA has increasingly moved toward detailed direction and regulation of the M&Os.”²

One aspect of this concern—which deals overall with the health of federally funded research and development center (FFRDC) relationships within the nuclear security enterprise—is the role of Contracting Officers (COs) and Contracting Officer’s Representatives (CORs). During 2018 and over the first half of 2019, the panel solicited information on the role of COs and CORs today. In particular, the panel explored whether people in those roles hinder the ability to achieve mission results by unduly delaying or withholding necessary approvals at the field office level. The panel examined the role of COs and CORs at National Nuclear Security Administration (NNSA) field offices through several sessions at the panel’s 2019 site visit to Los Alamos National Laboratory (LANL) and the panel’s Albuquerque meeting held at Sandia National Laboratories (SNL) in May, focusing largely on the impact of COs and CORs on NNSA and laboratory operations. The panel also engaged in conversation with selected NNSA officials located in Washington, D.C.

The NNSA and M&O personnel with whom the panel spoke did not report the kind of pervasive and severe dysfunction that concerned the Augustine-Mies Commission. LANL field office and laboratory personnel did describe instances when COs’ subpar performance caused delays or confusion, but the prevalence and severity were relatively modest and seemed to arise from particular situations of understaffing and inexperience during the contract transition rather than from systemic or pervasive problems in the role of COs.

The panel’s overall impression is that the CO and COR problems identified by Augustine-Mies have dissipated.

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¹ Augustine-Mies report, p. 65.

² Ibid., p. 67.

MANAGEMENT OF MAJOR PROGRAMS

A key finding in the Augustine-Mies report is that “NNSA was not provided [by the NNSA Act] the line-management authority necessary to integrate safety, security, and environmental concerns into the decision making for executing NNSA’s mission.”³ More generally, that report expresses concern in other places about the quality of program management:

• “Additional skilled personnel will be needed in several management disciplines, including cost and resource analysis and program management … NNSA’s inability to estimate costs and execute projects according to plan has been a major source of dissatisfaction among the national leadership and customers and has significantly undermined NNSA’s credibility.”⁴
• “The Secretary should develop a Memorandum of Understanding (MOU) with DOD to … encompass sending program management interns to the Defense Acquisition University to acquire formal, professional program manager training and certification.”⁵

As an indication of the program management that the report admired, it notes that “the B61 LEP program manager has been provided control over a significant share of the resources necessary to execute the program and has been granted a 5 percent management reserve by Congress.”⁶

In order to learn about the caliber of program management today at NNSA and gain insight about management structures, while also illustrating how roles and responsibilities are apportioned within the enterprise, the panel recently began examining (at an unclassified level) the management structure and processes to build up the enterprise’s pit-production capacity. As a first step, a small working group of the panel has met with leaders from the Office of Production Modernization (NA-19) and the Plutonium Program Office (NA-191) to learn about the nature of its authority within defense programs, field offices, and M&O sites, and with other NNSA and Department of Energy (DOE) headquarters offices. A site visit to LANL is planned for the coming months to gain further insight.

RESOLUTION OF A PROBLEM IDENTIFIED IN THE CRENEL REPORT

The CRENEL report recommended “Congress should repeal Section 301(d) of the FY 2015 Consolidated Appropriations Act as soon as feasible to remedy the transactional burden it creates for OMB, DOE Headquarters, and the laboratories when operating under a continuing resolution.”⁷ Section 301(d) codifies the annual appropriations “base table” into statute, which enforces relatively granular instructions about how much appropriated money may be spent for each of various purposes during the relevant fiscal year. Each statutory appropriation category contains a number of smaller “base table” categories of spending. During Continuing Resolutions, which have been frequent in recent years, this clause could unduly constrain financial decision making.

Over the course of 2018-2019, the panel met on several occasions with officials from the Office of Management and Budget (OMB), DOE, NNSA, and M&Os to examine the effort under way to reduce the burden 301(d) places on the nuclear security enterprise. Based on information from these interviews, the

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³ Ibid., p. xii.

⁴ Ibid., 41.

⁵ Ibid., p. 54.

⁶ Ibid., p. 57.

⁷ Commission to Review the Effectiveness of the National Energy Laboratories (CRENEL), 2015, Securing America’s Future: Realizing the Potential of the Department of Energy’s National Laboratories: Final Report of the Commission to Review the Effectiveness of the National Energy Laboratories, https://energy.gov/labcommission/downloads/final-report-commission-review-effectiveness-national-energylaboratories, p. 34.

panel is pleased to relay that OMB’s most recent revision to Circular No. A-11 effectively eliminates the burdensome impact of the 301(d) provision.

ROLES AND RESPONSIBILITIES OF CHIEF FINANCIAL OFFICERS

The panel had heard past reports of some confusion in roles and responsibilities between DOE and NNSA Chief Financial Officers (CFOs). It examined this topic in 2019 and was told that working relationships in the area of financial management have improved substantially over the past few years.

The fact that DOE’s Acting CFO used to work at NNSA has been an important contributor to today’s state, but discussions with career personnel suggest that the improvement reflects more than just personalities. Interviewees within NNSA report that the DOE CFO respects NNSA’s independence, while being part of the Department gives NNSA valuable influence and access in cabinet-level decisions.

The panel was also told that quarterly meetings among financial management personnel from all of the DOE labs and plants, including financial management leaders from both DOE CFO and NNSA NA-MB, are very helpful in ensuring access and problem-solving among DOE, NNSA, and NNSA’s labs and plants.

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