Energy scrutinizes Los Alamos bookkeeping problems

By Katherine McIntire Peters

March 3, 2009

A senior Energy Department official charged with overseeing operations at Los Alamos National Laboratory said on Monday the government had established specific performance criteria to address shortcomings in the lab's tracking of plutonium and would dock the contractor if it fails to fix the problems.

The New Mexico lab is managed for the government by Los Alamos National Security LLC, a company formed by Bechtel National Inc., the University of California, Babcock and Wilcox Co., and URS. The Energy Department's National Nuclear Security Administration is responsible for overseeing the work done by LANS.

Record-keeping problems at the lab came to light after a Feb. 23 memo from Energy's site office manager to the laboratory director criticizing material control and accountability in plutonium operations was leaked last week to Project on Government Oversight.

The memo described a "lack of qualified and experienced personnel in critical positions; inattention to performance indicators; lack of an approved and compliant [nuclear material control and accountability] plan; lack of procedures for key processes" and other problems at the lab first discovered last June.

The watchdog organization criticized Energy for giving LANS a $1.4 million performance award for security in 2008, based in part on material control and accountability at the lab. According to the government's performance report on the contractor's management and operation of the laboratory from Oct. 1, 2007, through Sept. 30, 2008, the lab met all expectations spelled out in the "safeguards and security" award criteria, which included material control and accountability.

In an interview with Government Executive on Monday evening, Roger Snyder, deputy director of the National Nuclear Security Administration's site office at Los Alamos, said the agency's award was proper because it was based on the specific criteria established in the contract with LANS.

The government did, however, dock the contractor $2 million in another category, "institutional management excellence," because of the failings identified last June. "There was $10 million riding on management excellence, and we only gave them 80 percent of it," because of the identified problems, Snyder said.

Energy annually revises the specific performance goals for the contract based on problems identified the year before. The problems identified in June and described in the leaked memo "looked like something the lab could get their arms around," Snyder said.

In the remaining four months of the fiscal year before the 2008 award was determined in October, LANS appeared to be addressing the problems, according to Snyder. "They had already performed well [in] a couple of external assessments so we didn't dock them very heavily in 2008, because they actually had efforts under way to improve," he said.

But in December, when the lab shuts down and records of materials are more broadly reconciled, lab officials and Energy overseers discovered that the record-keeping discrepancies were more significant, a situation that ultimately resulted in the highly critical memo last month.

Snyder attributed the problems to the complex nature of the work and to personnel changes at the lab on both the government and the contractor sides.

"This is a bookkeeping issue, but it's very complicated because [nuclear] material changes form," he said. The accounting problems at Los Alamos were specifically in plutonium processing, and not labwide. Records must reflect the amount of material in the lab at all times, even as that material is processed from an oxide to a pure metal, creating waste along the way. Purity levels change with each step of the process and must be accounted for.

"It's sort of like weighing ice cubes as you go through the freezing and thawing processes, pulling data out as you go along," Snyder said.

The work requires a mix of skills involving nuclear physics, scientific measurement and specialized bookkeeping. A combination of staff cuts at the lab, attrition among government oversight employees, and inexperienced new personnel working for both the contractor and the government contributed to the accountability issues, he said.

"We didn't have the best transition processes and training for new people, because it is a very complicated area that you don't find in the world at large or in industry," Snyder said.

To address the shortcomings, the contractor has eliminated some dual-hatted positions and asked a senior person with substantial experience in material control and accountability to fill a critical vacancy. In addition, the contractor will bring in more experienced personnel from other sites to help with training and augment oversight, Snyder said.

On the government side, Energy is beefing up oversight with experienced employees from other agency site offices and headquarters. "I would prefer to have a full-time permanent person," focused entirely on material control and accountability at the lab, but in the absence of a departmental budget, Energy doesn't want to over commit on staffing, Snyder said. Energy, like most other federal agencies, is operating under a continuing resolution because Congress failed to pass a 2009 operating budget for the department.

"At this point, I've got the benefit of some of the best-qualified folks across NNSA and headquarters that have been able to come in and help whenever we've called," Snyder said. When the agency eventually has a final budget, either this year or in 2010, he intends to fill the oversight role with at least one, preferably two, permanent full-time people.

Snyder said he is confident the personnel changes and the specific criteria added to the contractor's 2009 performance plan will address the recordkeeping shortcomings first identified at the lab last June.

"We take nuclear security and protection of nuclear material very seriously. It's not one of these things where there's an acceptable loss," he said.

By Katherine McIntire Peters

March 3, 2009