[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

[H.A.S.C. No. 112-156]
Y-12 INTRUSION: INVESTIGATION,
RESPONSE, AND ACCOUNTABILITY

__________

HEARING

BEFORE THE

SUBCOMMITTEE ON STRATEGIC FORCES

OF THE

COMMITTEE ON ARMED SERVICES

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

__________

HEARING HELD

SEPTEMBER 13, 2012

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SUBCOMMITTEE ON STRATEGIC FORCES

MICHAEL TURNER, Ohio, Chairman
TRENT FRANKS, Arizona LORETTA SANCHEZ, California
DOUG LAMBORN, Colorado JAMES R. LANGEVIN, Rhode Island
MO BROOKS, Alabama RICK LARSEN, Washington
MAC THORNBERRY, Texas MARTIN HEINRICH, New Mexico
MIKE ROGERS, Alabama JOHN R. GARAMENDI, California
JOHN C. FLEMING, M.D., Louisiana BETTY SUTTON, Ohio
SCOTT RIGELL, Virginia RON BARBER, Arizona
AUSTIN SCOTT, Georgia
Tim Morrison, Professional Staff Member
Drew Walter, Professional Staff Member
Leonor Tomero, Professional Staff Member
Eric Smith, Staff Assistant

C O N T E N T S

----------

CHRONOLOGICAL LIST OF HEARINGS
2012

Page

Hearing:

Thursday, September 13, 2012, Y-12 Intrusion: Investigation,
Response, and Accountability................................... 1

Appendix:

Thursday, September 13, 2012..................................... 9
----------

THURSDAY, SEPTEMBER 13, 2012
Y-12 INTRUSION: INVESTIGATION, RESPONSE, AND ACCOUNTABILITY
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Sanchez, Hon. Loretta, a Representative from California, Ranking
Member, Subcommittee on Strategic Forces....................... 4
Turner, Hon. Michael, a Representative from Ohio, Chairman,
Subcommittee on Strategic Forces............................... 1

WITNESSES

Miller, Hon. Neile L., Principal Deputy Administrator, National
Nuclear Security Administration (Ms. Miller did not provide an
opening statement during the unclassified portion of the
hearing.)......................................................
Poneman, Hon. Daniel B., Deputy Secretary of Energy, U.S.
Department of Energy........................................... 6

APPENDIX

Prepared Statements:

Poneman, Hon. Daniel B....................................... 20
Sanchez, Hon. Loretta........................................ 17
Turner, Hon. Michael......................................... 13

Documents Submitted for the Record:

[There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

[There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

Ms. Sanchez.................................................. 33

Y-12 INTRUSION: INVESTIGATION, RESPONSE, AND ACCOUNTABILITY

----------

House of Representatives,
Committee on Armed Services,
Subcommittee on Strategic Forces,
Washington, DC, Thursday, September 13, 2012.
The subcommittee met, pursuant to call, at 2:07 p.m., in
room 2118, Rayburn House Office Building, Hon. Michael R.
Turner (chairman of the subcommittee) presiding.

OPENING STATEMENT OF HON. MICHAEL TURNER, A REPRESENTATIVE FROM
OHIO, CHAIRMAN, SUBCOMMITTEE ON STRATEGIC FORCES

Mr. Turner. I think you are all aware that votes are going
to be called soon on the House floor.
I think everyone is aware that the structure of today's
hearing is we are going to have opening statements from myself
and my ranking member, Loretta Sanchez, and then we will be
going into closed session for the questions and answers. And so
we will both then commence to offer our opening statements.
I would like to welcome everyone to today's hearing on the
recent security breach at the Y-12 National Security Complex.
As we all know from the press accounts, in the predawn
hours of Saturday, July 28, three nuclear disarmament activists
trespassed onto the grounds of the Y-12 complex in Oak Ridge,
Tennessee. The activists, including an 82-year-old Catholic
nun, who is present with us today, cut through several fences
and entered the high-security ``Protected Area'' surrounding
the Highly Enriched Uranium Materials Facility, HEUMF. The
activists defaced an exterior building with spray paint, human
blood, posters, crime scene tape, and other items before
eventually being stopped and detained by members of the
protective force. Reportedly, even once on the scene, the
initial protective force member apparently did not respond with
appropriate urgency.
This level of intrusion in the perimeter of a supposedly
highly secure nuclear weapons facility is unprecedented, and it
is absolutely unacceptable. It is outrageous to think that the
greatest threat to the American public from weapons of mass
destruction may be the incompetence of DOE [Department of
Energy] security.
I want to say that again.
Because I have had hearing after hearing--I have
participated both on this committee and with the Oversight and
Government Reform Committee where we have raised the issue
repeatedly of the security at these facilities. There is no
margin for error for security at these facilities, and it is
outrageous to think that the greatest threat to the American
public from weapons of mass destruction may actually be the
incompetence of DOE security to be unable to keep these
facilities secure.
Now I have just recently thanked one of the protesters for
bringing this to light, to thank God that we did not have the
security threat that could have been. If the facility had
actually been under attack and all of these systems had failed,
we would have had an absolute catastrophe. Instead, we have an
embarrassment, but, thank God, an exposure of the issues and
the problems of DOE that I know Members of Congress have been
complaining about for a decade, because I have been one of
them.
Let me be clear: I rank this failure alongside the Air
Force's unauthorized shipments of nuclear weapons to Barksdale
Air Force Base in 2007 and nuclear weapons components to
Taiwan, which was reported in 2008.
From our oversight of these incidents, the subcommittee is
intimately familiar with how systemic failures--coupled with a
lack of leadership attention--can lead to massive failures in a
business with room for none.
The 2007 Air Force incident revealed deep and systemic
flaws throughout the Air Force enterprise that allowed that
incident to occur. It also revealed that both on-the-ground
personnel and senior leaders in the Air Force had taken their
eyes off the ball when it came to nuclear weapons. Tellingly,
we saw Secretary of Defense Gates take strong action to hold
these people accountable and fix the system.
As the Y-12 investigations proceed, I expect to see
similarly strong actions with regard to the July 28 incident
and the leadership, management, and oversight failures that
enabled it to occur.
I have deep reservations regarding NNSA's [National Nuclear
Security Administration] nuclear weapons security posture going
back many years. Some of my first direct encounters with
nuclear weapons occurred in the early 2000s. A visit to Y-12's
old nuclear facilities and a ride-along with NNSA's Office of
Secure Transportation left me deeply concerned that we were not
paying sufficient attention to the security of our nuclear
weapons, and my concerns have been borne out by what we saw in
this incident.
And let's remember, it was because of massive security
problems and mismanagement at DOE that led this committee to
create NNSA in 1999. This Y-12 incident is just one more
indicator that the creation of NNSA has not fixed the problem.
Twelve years later and the entire nuclear weapons enterprise,
from the budget process to facilities construction and now even
basic security, is fundamentally broken.
Ranking Member Sanchez and I spoke earlier, and we agreed
that the system is broken. The ranking member and I have
pledged to conduct a subcommittee investigation and ensure we
get to the root causes of this failure.
We both want strong and effective Federal oversight of the
nuclear enterprise, and we want the responsible Federal and
contractor officials to be held accountable. This must never
happen again. We must make it clear that these failures cannot
be repeated and those responsible are held accountable. Ms.
Sanchez and I will demand it.
Perhaps most troubling to me is that we have heard that
there were many indicators of problems with Y-12 security prior
to July 28 that include sky-high false- and nuisance-alarm
rates, cameras that were broken for 6 months, and huge
maintenance backlogs of security critical equipment.
Some of these indicators go back several years, and many of
them were reported to NNSA's Y-12 site office on a daily or
weekly basis. But no one reacted. No one at the contractors,
NNSA, or DOE followed up on these indicators and forced
corrective action. I am simply shocked by the failure to
recognize a near meltdown of critical security lapses that were
known well before this incident occurred. And, again, thank God
that it wasn't an actual attack on the facility.
It appears that the Federal overseers were focused on the
wrong things. There was plenty of paperwork but no recognition
of or action on these problems. This is mind-boggling and may
be the new textbook definition of ``missing the forest for the
trees.''
Here are some basic questions:
Who knew that these cameras were out for so long?
Who knew that the false alarm rates were so high?
Who knew about the huge backlog of security maintenance and
the overreliance on compensatory measures?
Who should have known these things who did not?
And did anyone do anything to fix them?
And, if they haven't, have they been fired and why not?
As far as I can tell, the only individual who has been
fired is the Y-12 protective force officer who initially, if
belatedly and incompetently, responded to the alarms. And he
may get rehired as part of a union protest.
Others at both contractors and NNSA have been reassigned or
allowed to retire. This does not fit my definition of
accountability and certainly does not follow the example set 4
years ago by Secretary Gates.
Some more complex but equally important problems involve
the bifurcation of responsibility and accountability for
security at Y-12. Shortly after the July 28th incident, NNSA
decided the dual prime contracts at Y-12--one for the
protective force and one for the broader management of Y-12--
resulted in less effective security. Two contractors were
responsible for security, and they didn't communicate or
coordinate like they needed to. NNSA fixed this problem
immediately after the incident by making one a subcontract to
the other.
However, this bifurcation of responsibility and
accountability for security also exists on the Federal side.
Both DOE and NNSA have security offices responsible for setting
security policies, conducting oversight, and ensuring effective
security is in place. So far, we have yet to see NNSA and DOE
recognize the problems in their own house, even though they
immediately recognized it in their contractors.
Instead, I am seeing a lot of bureaucratic finger pointing
between NNSA, DOE, and the two contractors at Y-12. This
bureaucratic backstabbing is also now playing out in the
Washington Post, with details of supposedly classified reports
being leaked to the press. That leaking alone is deeply
troubling, and I expect our witnesses to tell us what they are
doing to track down where this was leaked from and end it. All
of this is just another indication that the system is broken.
There is something deeply and fundamentally wrong with the
culture in the Forrestal building. If this type of bureaucratic
warfare had erupted at DOD after the Minot and Taiwan
incidents, Secretary Gates would have had those people
terminated immediately.
I am going to place the remaining portion of my opening
statement in the record so that I can make certain my ranking
member has sufficient time to enter hers.
I just want to conclude with this.
This is outrageous, unacceptable, and absolutely has to be
fixed. The American public expects that we would have the
highest level of security. There is a staff member on this
committee who opined that the day-care center on Capitol Hill
may be more protected than our nuclear weapons were on that
night at Y-12. It is unacceptable. There are people who had
responsibility for it, and they should be held accountable.
And, the system needs to be fixed.
[The prepared statement of Mr. Turner can be found in the
Appendix on page 13.]
Mr. Turner. I turn to my ranking member, Loretta Sanchez.

STATEMENT OF HON. LORETTA SANCHEZ, A REPRESENTATIVE FROM
CALIFORNIA, RANKING MEMBER, SUBCOMMITTEE ON STRATEGIC FORCES

Ms. Sanchez. Thank you, Mr. Chairman, and thank you before
us.
Since our last hearing to examine NNSA management and the
risks for nuclear safety and security, we had this intrusion of
Y-12 and the inadvertent spread of technetium at one of our
nuclear weapons laboratories. These are but two recent
occurrences that highlight the continued need and the
importance of closely examining safety and security reforms,
and we need to address what risks are there.
I'd like to thank Chairman Turner for consistently, over
this past year in particular, focusing this committee on the
oversight issues as they relate to what we are going to discuss
today. Because, I do believe that we have clearly an
unacceptable problem with respect to management of security and
safety. And, we need to fix these problems.
I join the chairman in welcoming Deputy Secretary Dan
Poneman and Deputy Administrator Neile Miller to help us take a
closer look at the recent security breach at Y-12. I thank DOE
Inspector General Gregory Friedman; DOE's Chief Health, Safety
and Security Officer Glenn Podonsky; and Acting Chief and
Associate Administrator for the Office of Defense Nuclear
Security at NNSA Jeff Harrell, who are here and available for
questioning but not necessarily sitting right in front of us.
So I think it is pretty historical, this issue that
happened on July 28. Thank God it was peace activists, and
thank God it was Sister Rice who was coming through these
fences--four perimeter fences--at what most of us would expect
to be one of the most secure sites in the world.
This is a problem. Not only did they penetrate the
security, but once they were able to reach the central storage
facilities for nuclear weapons grade uranium, the security
response didn't know what to do and wasn't very good at taking
a look at what was going on and following procedures, most
importantly, that weren't as laid out as all of us thought they
would be and, of course, nonfunctioning equipment,
communication deficiencies, all sorts of problems that we now
are going to take a look at.
It is clear that taxpayers in particular and even just from
a safety standpoint Americans need much more than what we saw
on that night. So, as Chairman Turner emphasized, we are
extremely concerned about the deficiencies that came to light.
First, the contractor's poor performance is inexcusable.
From the Department of Energy Inspector General Report, we know
that one of the cameras had been left out of service for
approximately 6 months. And what we learned yesterday, in the
testimony given yesterday, that some of the cameras actually
worked, but they were simply turned off and that people who
were coming to be the safety net didn't know which cameras were
on or that even cameras were off. That's a major problem.
On top of these glaring deficiencies, reports last week
revealed possible cheating by the contractor on the security
inspection tests that had been ordered as part of the DOE
response to the Y-12
intrusion.
Secondly, the abysmal failure by the contractors, I am
concerned about a weakening of the Federal oversight process
that appears to have promoted a ``hands-off'' approach.
At the NNSA level, it appears that site officials knew
about several of these deficiencies and yet did not force the
contractors to take the much-needed corrective actions. The
DOE-IG [Department of Defense Inspector General] report notes
with reference to over-reliance at Y-12 on the use of
compensatory measures to address equipment failures that
directly impacted security readiness.
Moreover, as baffling as the deficiencies brought to light
by this intrusion are, last year's performance evaluation of
B&W [The Babcock & Wilcox Company] Y-12--the draft of which is
written by the contractor and merely reviewed by the NNSA
officials--gave B&W Y-12 a stellar review. More specifically,
B&W Y-12, responsible for delaying the repair cameras for
months and failing to do the required maintenance that would
have reduced the rate of false alarms, received as a rating of
excellent for its safeguards and security work, contributing to
B&W Y-12 receiving $51 million in incentive fee for fiscal year
2011.
Last year, in an initiative to address concerns of
excessive and overly burdensome oversight, the Department of
Energy streamlined and eliminated many DOE safety and security
directives despite questions about the impact that would have.
Questioning this initiative, the GAO [Government Accountability
Office] noted in April of 2012 ``that the benefits of this
reform are unclear because the DOE did not determine if the
original directives were in fact burdensome and the reform did
not fully address the safety
concerns.''
Mr. Chairman, we have votes on the floor. You and I both
know that. I would like to put forward the rest of my statement
for the record.
But, truly, we have to take a look at what happened here. I
think there is a lot of blame to go around, and we need to
correct these issues. And if somebody is not doing their job,
we need to figure out how to get it right.
So I thank you for having this hearing. We have the
responsibility, and now we have the chance to get this right.
We cannot fail the American people.
Thank you.
[The prepared statement of Ms. Sanchez can be found in the
Appendix on page 17.]
Mr. Turner. I thank my ranking member, Ms. Sanchez.
She has reiterated that Members of Congress for a long time
have had no confidence in DOE and NNSA in providing security
for these facilities, but we had only a feeling, no proof. We
now have proof. So this is an issue that has to be addressed.
Secretary Poneman, I am going to give you 3 minutes to
summarize an opening statement. We will then return after votes
with the remainder of the subcommittee with us and go into a
classified briefing to receive additional details.
Secretary Poneman, 3 minutes.

STATEMENT OF HON. DANIEL B. PONEMAN, DEPUTY SECRETARY OF
ENERGY, U.S. DEPARTMENT OF ENERGY

Secretary Poneman. Chairman Turner, Ranking Member Sanchez,
with your permission, I will summarize and submit my full
statement for the record.
Thank you for the invitation to appear before you here
today to discuss this very, very important issue. We appreciate
the interest and engagement of this committee, and we recognize
the important oversight role that you fulfill. We share your
commitment to ensure that all of our offices and operations are
delivering on our mission safely, securely, and in a fiscally
responsible manner.
As the recent incident at Y-12 demonstrates, the Department
has fallen short of our own expectations and faces continuing
challenges in our goals of continuous improvement. The recent
incident, as Secretary Chu has made clear, is unacceptable; and
we have taken swift and decisive action to identify and address
the problems it revealed across the DOE complex.
Regarding physical protection, we have taken the following
immediate steps to improve security: Cameras have been repaired
and tested, guard patrols increased, security policies have
been strengthened, the number of false and nuisance alarms have
been greatly reduced to provide more confidence in the
intrusion detection system.
We have addressed leadership issues. The top six leaders at
the management and operating contractor and protective force
contractor were either allowed to retire or relieved of their
duties at Y-12. Five members of the protective force were
fired, demoted, or suspended without pay.
On the Federal side, the Chief of Defense Nuclear Security
for the NNSA at headquarters has been reassigned pending the
outcome of a review. We have also reassigned the most senior
Federal security official who was at the site at the time, also
pending the outcome of our internal reviews.
We have taken steps to deal with the problems that were
revealed in our contracts at Y-12. Security functions at the Y-
12 site have been brought under one contract, as you noted, Mr.
Chairman, to ensure continuity of operations and line of
command.
A formal show cause letter was issued to the contractor
that covers the entire scope of operations at Y-12, including
security. This is a first step toward potentially terminating
the contracts for both the management and operations site
contractor and the security subcontractor. Past performance,
including these deficiencies and terminations, will be
considered in the awarding of future contracts.
When it comes to the protective forces, we immediately
acted to improve the security culture at Y-12. The entire site
workforce was required to undergo additional security training.
Nuclear operations at the site were suspended until retraining
was complete. The former head of security from Pantex moved to
Y-12 to lead the effort to reform the security culture at the
site.
Site managers at all DOE facilities with nuclear material
were directed to provide their written assurance that all
nuclear facilities are in full compliance of the Department's
security policies and directives, as well as internal policies
established at the site level.
We will continue to investigate. We will leave no stone
unturned, Mr. Chairman and Ranking Member Sanchez, as we
investigate what led to this unacceptable incident at Y-12; and
we will aggressively review security across all our sites. We
can go into the details of those reviews when you come back. I
know you have to vote.
In conclusion, the series of personnel and management
changes that I have just described were made to assure the
highest level of security at the site and across the DOE
complex. To manage this transition, we have brought some of the
best security experts from our enterprise to Y-12 to act
quickly to address the security shortcomings at the site. We
are also working to make the structural and cultural changes
required, appropriately, to secure the facility.
The Secretary and I intend to send a clear message: Lapses
in security will not be tolerated. We will leave no stone
unturned to find out what went wrong, and we will take the
steps necessary to provide effective security at this site and
across our enterprise.
And I thank you for your time.
[The prepared statement of Secretary Poneman can be found
in the Appendix on page 20.]
Mr. Turner. We will be adjourned for our classified
briefing.
[Whereupon, at 2:25 p.m., the subcommittee adjourned and
entered a closed briefing.]
?

=======================================================================

A P P E N D I X

September 13, 2012

=======================================================================

PREPARED STATEMENTS SUBMITTED FOR THE RECORD

September 13, 2012

=======================================================================

Statement of Hon. Michael Turner

Chairman, House Subcommittee on Strategic Forces

Hearing on

Y-12 Intrusion: Investigation, Response, and Accountability

September 13, 2012

Good afternoon and welcome to today's hearing on the recent
security breach at the Y-12 National Security Complex.
As we all know from the press accounts, in the predawn
hours of Saturday, July 28, three nuclear disarmament activists
trespassed onto the grounds of the Y-12 complex in Oak Ridge,
Tennessee. The activists, including an 82-year-old Catholic
nun, cut through several fences and entered the high-security
``Protected Area'' surrounding the Highly Enriched Uranium
Materials Facility (HEUMF). The activists defaced an exterior
side of the building with spray paint, human blood, posters,
crime scene tape, and other items before eventually being
stopped and detained by members of the protective force.
Reportedly, even once on the scene the initial protective force
member apparently did not respond with appropriate urgency.
This level of intrusion into the perimeter of a highly
secure nuclear weapons facility is unprecedented--and it is
completely unacceptable. It is outrageous to think that the
greatest threat to the American public from weapons of mass
destruction may be the incompetence of DOE security.
Let me be clear: I rank this failure alongside the Air
Force's unauthorized shipments of nuclear weapons to Barksdale
Air Force Base in 2007 and nuclear weapons components to
Taiwan, which was reported in 2008.
From our oversight of those incidents, this subcommittee is
intimately familiar with how systemic failures--coupled with a
lack of leadership attention--can lead to massive failures in a
business with room for none.
The 2007 Air Force incident revealed deep and systemic
flaws throughout the Air Force enterprise that allowed that
incident to occur. It also revealed that both on-the-ground
personnel and senior leaders in the Air Force had taken their
eyes off the ball when it came to nuclear weapons. Tellingly,
we saw Secretary of Defense Gates take strong action to hold
these people accountable and fix the system.
As the Y-12 investigations proceed, I expect to see
similarly strong action with regard to the July 28 incident and
the leadership, management, and oversight failures that enabled
it to occur.
I have had deep reservations regarding NNSA's nuclear
weapons security posture going back many years. Some of my
first direct encounters with nuclear weapons security in the
early 2000s--a visit to Y-12's old nuclear facilities and a
ride-along with NNSA's Office of Secure Transportation--left me
deeply concerned that we were not paying sufficient attention
to the security of our nuclear weapons.
And let's remember: it was because of massive security
problems and mismanagement at DOE that led this committee to
create NNSA in 1999. This Y-12 incident is just one more
indicator that creation of NNSA hasn't fixed the problems--12
years later and the entire nuclear weapons enterprise, from the
budget process to facilities construction and now basic
security, is fundamentally broken.
Ranking Member Sanchez and I spoke earlier, and we agreed
that the system is broken. The Ranking Member and I have
pledged to conduct a subcommittee investigation and ensure we
get to the root causes of these failures.
We both want strong and effective Federal oversight of the
nuclear enterprise, and we both want the responsible Federal
and contractor officials to be held accountable. This must
never happen again. We must make it clear that these failures
cannot be repeated and those responsible are held accountable.
Ms. Sanchez and I will demand it.
Perhaps most troubling to me is that we have heard that
there were many indicators of problems with Y-12's security
prior to July 28. These include:
LSky-high false- and nuisance-alarm rates;
LCameras that were broken for 6 months; and
LHuge maintenance backlogs of security
critical equipment.
Some of those indicators go back several years, and many of
them were reported to NNSA's Y-12 site office on a daily or
weekly basis. But no one reacted. No one at the contractors,
NNSA, or DOE followed up on these indicators and forced
corrective action. I am simply shocked by the failure to
recognize a near meltdown of critical security lapses that were
known well before this incident occurred.
It appears that the Federal overseers were focused on the
wrong things. There was plenty of paperwork but no recognition
of--or action on--these problems. This is mind-boggling, and
may be the new textbook definition of ``missing the forest for
the trees.''
Here are some basic questions:
LWho knew that these cameras were out for so
long?
LWho knew that the false alarm rates were so
high?
LWho knew about the huge backlog of security
maintenance and the overreliance on compensatory
measures?
LWho should have known these things?
LDid they do anything to get it fixed?
LHave they been fired?
As far as I can tell, the only individual that has been
fired is the Y-12 protective force officer who initially--if
belatedly and incompetently--responded to the alarms. And he
may get rehired thanks to his union's protest.
Others at both contractors and NNSA have been
``reassigned'' or allowed to retire. This does not fit my
definition of accountability, and certainly does not follow the
example set 4 years ago by Secretary Gates.
Some more complex but equally important problems involve
the bifurcation of responsibility and accountability for
security at Y-12. Shortly after the July 28 incident, NNSA
decided the dual prime contracts at Y-12--one for the
protective force and one for the broader management of Y-12--
resulted in less effective security. Two contractors were
responsible for security, and they didn't communicate or
coordinate like they needed to. NNSA fixed this problem
immediately after the incident by making one a subcontract to
the other.
However, this bifurcation of responsibility and
accountability for security also exists on the Federal side:
both DOE and NNSA have security offices responsible for setting
security policies, conducting oversight, and ensuring effective
security is in place. So far, we have yet to see NNSA or DOE
recognize this problem in their own house--even though they
immediately recognized it in their contractors.
Instead, I'm seeing a lot of bureaucratic finger-pointing
between NNSA, DOE, and the two contractors at Y-12. This
bureaucratic backstabbing is also now playing out in the
Washington Post, with details of supposedly classified reports
leaked to the press. That leaking alone is deeply troubling and
I expect our witnesses will tell us what they are doing to
track that down and put an end to it. All of this is just
another indication that the system itself is broken.
There is something deeply and fundamentally wrong with the
culture in the Forrestal building. If this type of bureaucratic
warfare had erupted at DOD after the Minot and Taiwan
incidents, Secretary Gates would have had those involved
terminated immediately.
Continuing with the status quo--doing more of the same--
isn't going to resolve the root causes of NNSA and DOE's long
history of security failures. Dozens of reports and other
indicators show the system itself is broken, in addition to
leadership, management, and personnel failures.
As one example, an independent study of NNSA security
conducted by Admiral Rich Mies back in 2005 found that many of
the problems their study identified, ``are not new; many
continue to exist because of a lack of clear accountability,
excessive bureaucracy, organizational stovepipes, lack of
collaboration, and unwieldy, cumbersome processes.''
As the sole authorizing committee with jurisdiction for the
nation's nuclear security activities, we take this incident
very seriously. We must understand the details of what actually
happened during this incident and the failures that allowed it
to happen. We must also understand what corrective actions are
being taken, who is being held accountable, and the ongoing
investigations. And, as I mentioned, the Ranking Member and I
are in lock-step about this. There are no politics here.
To enable this in-depth discussion, we must get beyond the
press accounts and discuss sensitive details. Therefore, with
agreement of the Ranking Member, after opening statements from
the witnesses we are going to immediately transition into a
classified session. We want a full and vigorous discussion--and
this can only take place in a closed session. The subcommittee
will continue to conduct rigorous oversight of this matter in
the months ahead, and we anticipate further subcommittee
oversight activities in the future.
Today, we have two of the senior officials responsible for
ensuring nuclear security at DOE facilities. They are:
LThe Honorable Daniel B. Poneman, Deputy
Secretary of Energy, U.S. Department of Energy; and
LThe Honorable Neile L. Miller, Principal
Deputy Administrator, National Nuclear Security
Administration.
Thank you to our witnesses for appearing today--we look
forward to your testimony and the detailed discussion during
the subsequent briefing. I know we all want to make sure this
doesn't happen again--because next time it may not be an 82-
year-old nun.
I'd like to note that during a recent office visit with
Deputy Secretary Poneman, he agreed that DOE, NNSA, and its
contractors would fully cooperate with the subcommittee's
investigation. I thank him for that commitment and look forward
to our continuing discussion.

Statement of Hon. Loretta Sanchez

Ranking Member, House Subcommittee on Strategic Forces

Hearing on

Y-12 Intrusion: Investigation, Response, and Accountability

September 13, 2012

Since our last hearing to examine NNSA management and the
risks for nuclear safety and security, we have had the
intrusion at Y-12 and the inadvertent spread of technetium at
one of the nuclear weapons laboratories. These are but two
recent occurrences that highlight the continued importance of
closely examining what safety and security reforms are
warranted and what risks must be addressed. I would like to
thank Chairman Turner for focusing our Subcommittee on these
important oversight issues this year and for the opportunity to
delve into what have become clearly unacceptable management
problems that have plagued a broken system.
I join the Chairman in welcoming Deputy Secretary Dan
Poneman and Deputy Administrator Neile Miller to help us take a
closer look at the recent security breach at Y-12. I thank
Department of Energy Inspector General Gregory Friedman; DOE's
Chief Health, Safety and Security Officer Glenn Podonsky; and
Acting Chief and Associate Administrator for the Office of
Defense Nuclear Security at the NNSA Jeff Harrell, for being
available to answer our questions in the closed briefing that
will follow this open hearing.
On July 28, a historically unprecedented intrusion whereby
three peace activists, including an 82-year-old nun, were able
to penetrate, without being intercepted, four perimeter fences,
at what is expected to be one of the most secure sites in the
world. Not only did they penetrate the security zone but were
able to reach the country central storage facility for nuclear
weapons-grade uranium, as the security response was
inexplicably hampered by nonfunctioning equipment,
communication deficiencies, and numerous failures to follow
prescribed procedures for responding to alarms and security
breaches.
It is clear that we owe the taxpayers and the security of
our country stronger oversight and stricter accountability on
nuclear safety and security.
As Chairman Turner emphazised, we are extremely concerned
about the deficiencies that came to light and about whether
security readiness is ready for prime-time given the serious
gaps in contractor implementation and Federal oversight.
First, the contractor's poor performance is inexcusable.
From the Department of Energy Inspector General Report, we know
one of the broken cameras had been left out of service for
approximately 6 months. Some cameras as was revealed in
yesterday's congressional hearing were inoperable simply
because the switch was turned off. Security guards were not
aware of which cameras were nonoperational at the time they
assumed their post. The false alarm rate was on the order of
hundreds of false alarms a day.
On top of these glaring deficiencies, reports last week
revealed possible cheating by the contractor on a security
inspection test that had been ordered as part of the DOE
response to the Y-12 intrusion.
Second, beyond the abysmal failure by the contractors, I am
concerned about a weakening of the Federal oversight process
that appears to have promoted a ``hands-off'' approach:
At the NNSA level: It appears NNSA site officials knew
about several of these deficiencies and yet did not force the
contractors to take much-needed corrective actions. The DOE IG
report notes with reference to overreliance at Y-12 on the use
of compensatory measures to address equipment failures that
directly impacted security readiness, ``federal officials
[stated] that with the advent of NNSA's contractor governance
system (Contractor Assurance System), they could no longer
intervene . . . to address growing maintenance backlogs.'' This
raises serious questions about competency, and about whether
there has been a growing trend of relegating much
decisionmaking authority to the contractor despite glaring
performance failures that underlay a lack of security
readiness.
Moreover, as baffling as the deficiencies brought to light
by this intrusion are, last year's performance evaluation of
B&W Y-12--the draft of which is written by the contractor and
merely reviewed by NNSA officials--gave B&W Y-12 a stellar
review. More specifically, B&W Y-12, responsible for delaying
the repair of cameras for months and failing to do the required
maintenance that would have reduced the rate of false alarms,
received an a rating of ``excellent'' for its Safeguards and
Security work, contributing to B&W Y-12 receiving $51 million
in incentive fee for FY 2011.
With regard to DOE: Last year in an initiative to address
concerns of excessive and overly burdensome oversight, the
Department of Energy streamlined and eliminated many DOE safety
and security directives despite questions about the impact.
Questioning this initiative, the Governmental Accountability
Office (GAO) noted in April 2012 ``that the benefits of this
reform are unclear because the DOE did not determine if the
original directives were in fact burdensome and the reform did
not fully address safety concerns.''
As another example, in a revised executive order (DOE Order
227.1) last year loosening contractor accountability, DOE
reduced the requirements on the contractors for implementing
corrective actions to address deficiencies identified by the
independent Health Safety and Security Office.
Furthermore, GAO has noted that the DOE directives reform
effort gave ``the NNSA site offices, rather than DOE's Office
of Independent Oversight staff, responsibility for correcting
problems identified in independent assessments.''
Third, and a final point: Independent oversight remains
crucial to ensuring security readiness that is up to the task
of protecting weapons-usable material.
We have heard the refrain in previous hearings this year
that Federal oversight was overly burdensome. And the authors
of the NAS report testified before our Subcommittee that ``A
great deal of work that has been accomplished over the years in
safety and security has required extensive effort by the NNSA
and the laboratories. We believe these efforts have been
strengthened to the point where they no longer need the current
level special attention to assure high quality results in
laboratory operations.''
However, as brought to light in the Washington Post
yesterday, it was independent oversight by the Department of
Energy 2 years ago that sounded the alarm on lax security at Y-
12, and found that ``security cameras were inoperable,
equipment maintenance was sloppy and guards were poorly
trained.''
I remain deeply concerned about efforts that could weaken
Federal safety and security oversight, including controversial
provisions on nuclear safety and security in the FY 2013 House
National Defense Authorization bill. The recent IG report noted
that an NNSA official stated that ``they had been instructed
not to evaluate and report on `how' the contractors were
conducting business, but to focus instead on ensuring that the
mission was accomplished.''
This incident should inject urgency in the need to ensure
that Federal officials have direct access to the contractors in
charge of security. It is also the latest indicator that
overseeing how security is provided remains crucial to avoid
another potentially more serious accident.
This will require strong leadership, access to the
contractor and independent expertise.
The silver lining in this appalling event at Y-12 is that
these were not terrorists bent on attacking the facilities,
that the new HEUMF facility is extremely robust, as opposed to
the nearby 60-year-old 9212 facility, and finally that we did
not have a trigger-happy guard mistakenly kill an 82-year-old
nun.
But this is a wake-up call about the serious deficiencies
in safety culture and woeful gaps in oversight that allowed
this situation to occur.
We have the responsibility--and now the chance--to get this
right. We cannot afford to fail again.

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=======================================================================

QUESTIONS SUBMITTED BY MEMBERS POST HEARING

September 13, 2012

=======================================================================

QUESTIONS SUBMITTED BY MS. SANCHEZ

Ms. Sanchez. In the past few years, NNSA issued security directives
(NAPs) that replace DOE directives. The NAPs were intended to allow
more flexibility in implementing security requirements and reduce the
costs of security; they provided less rigorous requirements in certain
areas such as maintenance of alarm systems and gave more authority to
lower level managers to accept risks. Meanwhile, NNSA has favored a
system with less independent oversight and instead relied more on the
contractor self-assessments and the contractors ability to establish
effective safety and security programs and manage risk.
Our House NDAA bill also gives more authority to NNSA, blocking
independent on safety and security. We heard from several laboratory
directors about burdensome regulations and excessive oversight were
hindering productivity at the laboratories.
Is it your view that NNSA sites conduct effective
oversight?
Do contractors have too little independent oversight, or
too much?
Do you believe that the incident is the result of overly
burdensome security requirements, as some have claimed?
Do you think that NNSA has gone too far in delegating
responsibility for making security decisions to its contractors?
In light of the Y-12 incident, are you concerned that new
NAPs may be inconsistent or have fewer requirements than DOE
regulations? Will you direct NNSA to rescind these NAPs or allow them
to go forward?
Should independent oversight be strengthened?
Secretary Poneman. The Y-12 incident and subsequent Office of
Health, Safety and Security (HSS) Independent Oversight inspection
identified numerous examples of inadequate Federal oversight by line
management and ineffective contractor assurance systems. For example,
we learned that NNSA Federal oversight and assessment activities did
not effectively evaluate all safeguards and security areas, and the
ensuing analyses did not provide an adequate basis to conclude that
Departmental assets were being protected at the required levels. We
also learned that NNSA performance measures (used to help influence
decisions regarding contractor award fees) did not accurately depict
actual contractor performance. Self-assessments conducted by both site
contractors generally provided more information about the status of
processes than of the actual effectiveness of security measures that
were in place ``on the ground.'' Contractor self-assessment reports
often contained insufficient information regarding security program
implementation, failed to identify deficiencies, or lacked the analyses
to support conclusions. Consequently, reports did not accurately inform
NNSA and contractor line management of the effectiveness of existing
security programs to support decisions regarding future security
activities. Weaknesses in contractor, site office, and NNSA
Headquarters Defense Nuclear Security oversight and assurance systems
essentially presented NNSA senior management with an inaccurate picture
of the overall health of the protection program at Y-12, thereby
missing the opportunity to identify early indicators of problems that
might have mitigated the security breach. While these deficiencies were
especially pronounced at Y-12, HSS Independent Oversight reviews at
other sites have also concluded that contractor assurance systems have
not sufficiently matured and that weaknesses persist in NNSA Federal
line management oversight.
We believe that rigorous, performance-based, independent oversight
is a critical element of DOE's approach to self-regulation,
particularly for high consequence facilities and activities such as
nuclear operations and nuclear security. The Government remains
responsible for these facilities and for the potentially dramatic
adverse consequences of failures in nuclear safety and nuclear
security, and the Government provides our contractors billions of
dollars of indemnification for nuclear accidents. Consequently, we have
an obligation to ensure that those contractors are operating these
facilities safely and securely. While DOE (including NNSA) line
management has the primary responsibility for managing and overseeing
contractor performance, our HSS Independent Oversight office has no
responsibility for the mission and activities being reviewed.
Consequently, HSS is able to provide the Secretary and me, along with
line management, objective and unbiased feedback on performance. We
believe that our contractors currently receive an appropriate level of
independent oversight.
No, the Y-12 incident was not at all the result of overly
burdensome security requirements. Over the period of 2009-2010, the
Department went through a systematic review to reform all of its safety
and security directives. The outcome of that effort was the development
of a more concise set of non-duplicative requirements and directives
that produce effective protection and efficient operations. Our safety
and security regulations and directives identify the necessary
requirements to protect workers, the public, the environment, and
national security assets. They also provide contractors the flexibility
to meet the requirements in the most efficient manner, and are
streamlined through consolidation or elimination of duplicative or
unnecessary provisions.
The Y-12 incident was partly the result of overly broad delegation
of inherently governmental risk acceptance authority to the contractor,
which was made without effective Federal review. This inappropriate
delegation of responsibility to the contractor was enabled by
inappropriate and/or ambiguous provisions in NNSA Policy documents
(NAPs). At Y-12, the contractor ``cognizant security authority''
appeared to be unconstrained, with Federal officials deferring to the
contractor for most decisions impacting the site security mission.
A number of concerns were identified with security NAPs. In some
cases, they provided a less rigorous standard of protection than
Departmental directives or were not consistent with Governmentwide
security requirements. In other cases, they provide for an
inappropriate degree of delegation of risk acceptance authority to
contractors. The Secretary and I believe, and the NNSA Administrator
agrees, that there should be a single set of DOE security directives
governing all Departmental operations, including those of the NNSA. The
Administrator will rescind the security NAPs so that they will no
longer be applied as a substitute for Departmental requirements. A
revised version of NAPs may be utilized to provide additional
implementing instructions, consistent with Departmental directives, to
NNSA sites.
Yes. The Secretary has re-emphasized the importance of HSS
Independent Oversight as a critical element of the Department's
governance approach, and past GAO reviews have pointed to the
importance of and need to strengthen independent oversight. The
Secretary has also directed HSS Independent Oversight to undertake more
rigorous inspections, to include force-on-force performance testing of
the protection of special nuclear material at all Category I sites over
a 12 month period. For many years, HSS Independent Oversight has
implemented a rigorous force-on-force performance testing program that
has been regarded by the U.S. Nuclear Command and Control System staff
as a model for Federal agencies with nuclear security missions. The
Secretary has also directed HSS Independent Oversight to further
enhance that program by expanding the scope and variety of performance
testing methods utilized to assess the readiness of DOE/NNSA site
protection systems against a broader spectrum of threats and adversary
capabilities. Performance testing methodologies will include no-notice
and limited notice testing to obtain a more realistic assessment of
site response capabilities.
Ms. Sanchez. As GAO asked, why does HSS not have the power to
enforce its own recommendations?
Secretary Poneman. The role of the HSS Independent Oversight office
is to conduct appraisals to evaluate the performance of DOE line
organizations and contractors, and to identify deficiencies where they
are detected. HSS Independent Oversight may also provide
recommendations to DOE line management on approaches to addressing the
deficiencies. DOE line management and its contractors are required by
Departmental directive to evaluate deficiencies identified by HSS
Independent Oversight, including identifying the reasons for the
deficiencies, and to develop and implement corrective actions plans for
problems identified as ``significant deficiencies''. Our DOE field
offices and contractors are accountable to the head of their respective
program offices, such as the NNSA Administrator, and ultimately to the
Secretary and me for ensuring that problems are adequately and promptly
addressed. HSS Independent Oversight has the authority to monitor
implementation of those corrective measures and to report back to
senior program office officials and to me if there are any concerns as
to responsiveness or effectiveness of actions. This arrangement
appropriately places the responsibility and accountability for
corrective actions with DOE line management, with HSS Independent
Oversight serving to monitor the effectiveness of actions on behalf of
the Secretary and Deputy Secretary.
Ms. Sanchez. Please provide any report or analysis that Department
of Energy/NNSA may produce on whether security should be transferred to
the Department of Defense, including costs, legal issues, and whether
the deficiencies that led to the failures would/could be avoided if
security was shifted to the military?
Secretary Poneman. The Department of Energy (including the NNSA)
has not produced any report or analysis on the subject of transferring
responsibility for security to the Department of Defense.
Ms. Sanchez. How would the House National Defense Authorization
provisions impact Federal oversight of security operations? What are
the benefits and risks of these provisions? Please provide your views
on these provisions.
Secretary Poneman. The Department of Energy, including the National
Nuclear Security Administration (NNSA), strongly oppose certain
sections of the bill because they would unduly restrict the authority
of the Secretary of Energy, weaken safety standards, and/or
fundamentally alter the nature of the relationship between the
Department and its contractors.
Sections 3113 and 3133 would excessively restrict the authority of
the Secretary of Energy to oversee the management and operations of the
NNSA. They would restrict the Secretary's ability to select the most
appropriate oversight mechanism for its contractors. While we recognize
that performance-based standards are an effective tool and may be
sufficient for some low hazard/consequence activities, we believe that
the Department must retain the ability to select the oversight
mechanism that best protects national security interests for a given
project, particularly for high hazard/consequence activities, such as
operation of nuclear facilities or protection of special nuclear
materials. The bill hampers our ability to tailor our approach to the
needs of the Government. Limiting the Department's ability to oversee
contracts as appropriate may lead to more inefficiency and waste, not
less. The fact that the Department's mandate is to provide adequate
protection for its workers and the public while managing unique hazards
as it conducts high-consequence activities, such as nuclear safety and
security, makes it particularly important that the Department retain
the ability to use all necessary tools to fulfill its mission. We
believe that independent oversight of safety and security standards, by
an organization outside the line management chain that does not have
conflicting priorities, is an important protection for the health and
safety of our workers and the public. Given the nature and complexity
of its mission, and, in particular, its obligation to preserve and
protect America's national nuclear safety and security, the Department
must address a number of unique, complex safety and security issues. We
believe that it is essential for the Department to retain flexibility
to safeguard against those unique risks, using all of the tools that
science and our experience in this area afford. The proposed bill
limits our ability to determine how best to execute the Department's
mission safely, securely, and effectively.
Section 3115 would mandate that the NNSA alone establish and
oversee health, safety and security at its facilities. Independent
oversight of safety and security is an important protection for the
health and safety of our workers and the public. The provision would
also exempt the NNSA from the Department's existing process to enforce
and ensure accountability for meeting safety and security requirements.
Similarly, the bill would restrict the Department's ability to
prescribe health and safety regulations regarding non nuclear
activities that are more stringent than Occupational Safety and Health
Administration standards, by requiring waivers to permit use of more
stringent standards. While we believe in the importance of streamlining
regulatory burdens, we believe that the Department must be able to
prescribe a safety regime that meets its unique needs without having to
use waivers to do so.

Ms. Sanchez. NNSA knew about the alarm rate, the broken cameras,
and the overreliance on compensatory measures.
Why did site officials not intervene to fix these
failures in a timely manner?
Why were compensatory measures allowed to become in
effect an indefinite solution?
Ms. Miller. NNSA did not know all the details of the situation.
Please see answers below.
Site officials did not intervene because they lacked perspective on
the impact that broken PIDAS cameras and an excessive number of
compensatory measures would have on overall system effectiveness. They
were involved in neither setting maintenance priority for the PIDAS
cameras nor the approval of compensatory measures because local
implementation of the NNSA directives in effect at the time placed
those decisions with the contractor.
From the contractor's perspective, compensatory measures were often
less expensive and the incentive to repair was not sufficiently high to
require immediate action. From a site office perspective, the
contractor was viewed as following a process in line with NNSA policy
and expectation. At the same time, the site vulnerability analysis team
was used to assign case specific compensatory measures and did not look
at the broader implications of individual decisions.
Ms. Sanchez. In the past few years, NNSA issued security directives
(NAPs) that replace DOE directives. The NAPs were intended to allow
more flexibility in implementing security requirements and reduce the
costs of security; they provided less rigorous requirements in certain
areas such as maintenance of alarm systems and gave more authority to
lower level managers to accept risks. Meanwhile, NNSA has favored a
system with less independent oversight and instead relied more on the
contractor self-assessments and the contractors ability to establish
effective safety and security programs and manage risk.
Our House NDAA bill also gives more authority to NNSA, blocking
independent on safety and security. We heard from several laboratory
directors about burdensome regulations and excessive oversight were
hindering productivity at the laboratories.
Is it your view that NNSA sites conduct effective
oversight?
Do contractors have too little independent oversight, or
too much?
Do you believe that the incident is the result of overly
burdensome security requirements, as some have claimed?
Do you think that NNSA has gone too far in delegating
responsibility for making security decisions to its contractors?
In light of the Y-12 incident, are you concerned that new
NAPs may be inconsistent or have fewer requirements than DOE
regulations? Will you direct NNSA to rescind these NAPs or allow them
to go forward?
Should independent oversight be strengthened?
Ms. Miller. The Y-12 incident and subsequent Office of Health,
Safety and Security (HSS) Independent Oversight inspection identified
numerous examples of inadequate Federal oversight by line management
and ineffective contractor assurance systems. For example, we learned
that NNSA Federal oversight and assessment activities did not
effectively evaluate all safeguards and security areas, and the ensuing
analyses did not provide an adequate basis to conclude that
Departmental assets were being protected at the required levels. We
also learned that NNSA performance measures (used to help influence
decisions regarding contractor award fees) did not accurately depict
actual contractor performance. Self-assessments conducted by both site
contractors generally provided more information about the status of
processes than of the actual effectiveness of security measures that
were in place ``on the ground.'' Contractor self-assessment reports
often contained insufficient information regarding security program
implementation, failed to identify deficiencies, or lacked the analyses
to support conclusions. Consequently, reports did not accurately inform
NNSA and contractor line management of the effectiveness of existing
security programs to support decisions regarding future security
activities. Weaknesses in contractor, site office, and NNSA
Headquarters Defense Nuclear Security oversight and assurance systems
essentially presented NNSA senior management with an inaccurate picture
of the overall health of the protection program at Y-12, thereby
missing the opportunity to identify early indicators of problems that
might have mitigated the security breach. While these deficiencies were
especially pronounced at Y-12, HSS Independent Oversight reviews at
other sites have also concluded that contractor assurance systems have
not sufficiently matured and that weaknesses persist in NNSA Federal
line management oversight.
We believe that rigorous, performance-based, independent oversight
is a critical element of DOE's approach to self-regulation,
particularly for high consequence facilities and activities such as
nuclear operations and nuclear security. The Government remains
responsible for these facilities and for the potentially dramatic
adverse consequences of failures in nuclear safety and nuclear
security, and the Government provides our contractors billions of
dollars of indemnification for nuclear accidents. Consequently, we have
an obligation to ensure that those contractors are operating these
facilities safely and securely. While DOE (including NNSA) line
management has the primary responsibility for managing and overseeing
contractor performance, our HSS Independent Oversight office has no
responsibility for the mission and activities being reviewed.
Consequently, HSS is able to provide the Secretary and me, along with
line management, objective and unbiased feedback on performance. We
believe that our contractors currently receive an appropriate level of
independent oversight.
No, the Y-12 incident was not at all the result of overly
burdensome security requirements. Over the period of 2009-2010, the
Department went through a systematic review to reform all of its safety
and security directives. The outcome of that effort was the development
of a more concise set of non-duplicative requirements and directives
that produce effective protection and efficient operations. Our safety
and security regulations and directives identify the necessary
requirements to protect workers, the public, the environment, and
national security assets. They also provide contractors the flexibility
to meet the requirements in the most efficient manner, and are
streamlined through consolidation or elimination of duplicative or
unnecessary provisions.
The Y-12 incident was partly the result of overly broad delegation
of inherently governmental risk acceptance authority to the contractor,
which was made without effective Federal review. This inappropriate
delegation of responsibility to the contractor was enabled by
inappropriate and/or ambiguous provisions in NNSA Policy documents
(NAPs). At Y-12, the contractor ``cognizant security authority''
appeared to be unconstrained, with Federal officials deferring to the
contractor for most decisions impacting the site security mission.
A number of concerns were identified with security NAPs. In some
cases, they provided a less rigorous standard of protection than
Departmental directives or were not consistent with Governmentwide
security requirements. In other cases, they provide for an
inappropriate degree of delegation of risk acceptance authority to
contractors. The Secretary and I believe, and the NNSA Administrator
agrees, that there should be a single set of DOE security directives
governing all Departmental operations, including those of the NNSA. The
Administrator will rescind the security NAPs so that they will no
longer be applied as a substitute for Departmental requirements. A
revised version of NAPs may be utilized to provide additional
implementing instructions, consistent with Departmental directives, to
NNSA sites.
Yes. The Secretary has re-emphasized the importance of HSS
Independent Oversight as a critical element of the Department's
governance approach, and past GAO reviews have pointed to the
importance of and need to strengthen independent oversight. The
Secretary has also directed HSS Independent Oversight to undertake more
rigorous inspections, to include force-on-force performance testing of
the protection of special nuclear material at all Category I sites over
a 12 month period. For many years, HSS Independent Oversight has
implemented a rigorous force-on-force performance testing program that
has been regarded by the U.S. Nuclear Command and Control System staff
as a model for Federal agencies with nuclear security missions. The
Secretary has also directed HSS Independent Oversight to further
enhance that program by expanding the scope and variety of performance
testing methods utilized to assess the readiness of DOE/NNSA site
protection systems against a broader spectrum of threats and adversary
capabilities. Performance testing methodologies will include no-notice
and limited notice testing to obtain a more realistic assessment of
site response capabilities.
Ms. Sanchez. NNSA announced a return to incorporating security
operations within one prime contract that would also cover operations.
Please provide a copy of the analysis that preceded this
decision.
How will the change to the contracting structure fix
these problems? What risks, challenges or uncertainties does it create?
Will the prime be allowed to sub-contract security
operations? Why not?
How will the new contracting structure allow for
strengthened Federal oversight over security operations?
Will NNSA/DOE be able to have access to the security
contractor?
Are there any expected cost savings? How much?
Ms. Miller. The decision to assign the WSI contract under B&W at Y-
12 until the new contract is awarded was made to promptly address
issues at the site.
The change in contract structure will ensure full integration of
all aspects of the safeguards and security program under a single
management structure. The July 28, 2012, security breach at Y-12
exposed weaknesses in integrating critical security functions where the
separate incumbent contractors shared responsibilities for the overall
safeguards and security program.
The prime contractor will not be allowed to sub-contract security
operations in the combined Y-12/Pantex contract. This restriction was
made to ensure that NNSA has direct oversight of the entire breadth of
Security operations.
Consolidating security work with plant operations will facilitate
more streamlined and focused Federal oversight by eliminating the need
for the Government to manage multiple contracts that require integrated
activities at one site.
Yes, the decision to preclude subcontracting Security operations
was done to ensure that NNSA has direct access to the entire breadth of
Security operations.
Previous NNSA analysis has indicated that enveloping security
services within the M&O contract will likely result in increased costs
to the Government; however, the potential risks associated with a
diversified contractual approach in the current Y-12 environment
required an immediate remedy.
Ms. Sanchez. Please provide any report or analysis that Department
of Energy/NNSA may produce on whether security should be transferred to
the Department of Defense, including costs, legal issues, and whether
the deficiencies that led to the failures would/could be avoided if
security was shifted to the military?
Ms. Miller. NNSA has not produced any report or analysis regarding
the subject of transferring responsibility for security to the
Department of Defense. This effort would require collaboration between
both organizations to properly address and respond appropriately to the
question.
Ms. Sanchez. How would the House National Defense Authorization
provisions impact Federal oversight of security operations? What are
the benefits and risks of these provisions? Please provide your views
on these provisions.
Ms. Miller. The Administration strongly opposes sections 3202,
3115, 3113, and 3151. These provisions severely hamper external,
independent oversight by the Defense Nuclear Facilities Safety Board;
move regulatory authority from independent offices and agencies to the
NNSA Administrator; require a weaker standard of contractor governance,
management, and oversight; and eliminate DOE's flexibility to determine
the appropriate means of assessing the unique risks that it confronts
in its facilities. By lowering safety standards for the nuclear weapons
complex and reducing requested funding for health, safety, and
security, these provisions would weaken protections for workers and the
general public.
Sections 3113 would excessively restrict the authority of the
Secretary of Energy to oversee the management and operations of the
NNSA. This section would restrict the Secretary's ability to select the
most appropriate oversight mechanism for its contractors.
The term ``performance-based standards'' is referenced under
section 3113, states with respect to a covered contract, means that
contract includes the use of performance work statements that set forth
contact requirements in clear, specific, and objective terms with
measurable outcomes. The definition listed in section 3113, does not
accurately reflect the NNSA performance-based approach, which is being
implemented to include a comprehensive and detailed method with
performance testing evaluation of specific security operations and
activities to determine security program effectiveness. Additionally,
NNSA must retain the ability to select the best oversight mechanism
given its high security hazard/consequence activities, such as
operation of nuclear facilities and protection of special nuclear
materials. The fact that the NNSA's mandate is to provide adequate
protection for its workers and assets while managing unique hazards as
it conducts high-consequence activities (e.g., nuclear security) makes
it particularly important that the NNSA retain the ability to use all
necessary tools to fulfill its mission. The proposed bill limits our
ability to determine how best to execute the NNSA's mission securely
and effectively.
Within the NNSA, we recognize a need for a Headquarters security
assessment element between the site level and the independent oversight
provided by the Office of Health, Safety, and Security. NNSA is
establishing a Performance Assessment Division within the Office of
Defense Nuclear Security for security assessment of contractors and
Federal field organization performance, including no-notice and/or
short notice evaluations. The division will also assess training
effectiveness, policy implementation, and the proper execution of
vulnerability assessments. This entity will be used to verify that
security programs are properly implemented and provide a nuclear
security enterprise viewpoint to NNSA senior leadership.
Section 3115 would mandate that the NNSA alone establish and
oversee health, safety, and security at its facilities, which would
deprive NNSA of an essential function provided by the HSS Office of
Independent Oversight. The Office of Independent Oversight is an
important independent element, which assists in the inspection process
of our facilities and assets. The provision would hamper existing
function to enforce and ensure accountability for meeting security
requirements. Similarly, the bill would restrict the NNSA's ability to
prescribe health and security regulations regarding non-nuclear
activities that are more stringent than Occupational Safety and Health
Administration standards by requiring waivers to permit use of more
stringent standards. We believe that the NNSA must be able to prescribe
a regime that meets its unique needs without having to use waivers.
Ms. Sanchez. What was the cost of shutting down Y-12 site following
the incident, and was there any impact on schedule for programs?
Ms. Miller. The actual cost accounted for by Y-12 was approximately
$2.9M primarily for the fully burdened labor rates of those people who
could not perform their primary/alternative duties during the shutdown.
B&W Y-12 made up any schedule challenges created during the security
shutdown and completed all primary deliverables scheduled for the year.
While they made up the schedule using overtime as needed, the overtime
costs for the year were considerably less than programmed for the year
in the rates. This was accomplished by the contractor reducing overtime
throughout the year in an effort to create savings. When the security
event happened, they were executing at less than 50% overtime compared
to planned rates based on prior years. The overtime needed to get back
on schedule did not exceed planned annual overtime rates.