Todd Jacobson
NS&D Monitor
4/04/2014
Echoing preliminary findings by the Congressionally appointed advisory panel on National Nuclear Security Administration governance, acting NNSA Administrator Bruce Held this week told a House subcommittee that the agency’s approach to governance had failed. Held’s comments followed testimony last week from the co-chairmen of the advisory panel, Norm Augustine and Rich Mies, that the semi-autonomous experiment for NNSA had failed. “Do I think that the governance model that we have been trying to overlay across the complex has failed? Yes, I do,” Held told the House Energy and Water Appropriations Subcommittee. “I believe we have had a governance model that we have been trying to use private sector incentives to motivate a culture that is deeply—a culture both in the government and at the laboratories—that is deeply, deeply committed to scientific excellence and exceptional service in the national interest.”
Held has previously mentioned the Energy Secretary Ernest Moniz’s interest in moving away from larger fees for the contractors that run the Department of Energy’s laboratories and sites and toward more of a “public interest” model, and that strategy is already taking root with a decision to lower the fee of Battelle Energy Alliance at Idaho National Laboratory. The Department has also opened talks with other M&O contractors, including the managers of Los Alamos and Lawrence Livermore national laboratories, Bechtel and the University of California, about lowering the fees at those sites (NS&D Monitor, Vol. 18 No. 13).
The strategy, Held said, is designed to more closely align the Department—and the NNSA—with its contractors. “The secretary and I are in strong agreement with the panel that that model has not succeeded, that model has driven a wedge between the government and the government- owned facilities,” Held said. “We need to move that into a much tighter partnership, and that is in fact what we are doing.”
KC Plant Highlighted as Model Contracting Approach
Held pointed to the Kansas City Plant as an example of a contracting structure that is working well. The streamlined contract there has allowed officials to reduce the number of federal overseers at the local level from 70 to 30, he said. “People are happier, we’re getting better product, I think,” Held said. “I think we need to be more agile and incentivize—understand what motivates the people and then provide incentives for that. And I don’t think our contract structure does that now. And I have broached these conversations with the various large M&Os and you know what, they by and large agree.”
Rep. Mike Simpson (R-Idaho), the chairman of the House Energy and Water Appropriations Subcommittee, said it was important to figure out an appropriate governance structure. “We need to figure out what motivates them to do the best job and also that gives us the best oversight possible,” he said.
‘Reputation Motivates Them Much More Than Fee’
Held suggested that high fees weren’t what motivates workers at the labs, likening the favored approach to civil service. “I think it is a strategic mistake to make that compensation really financially interesting to the M&O contractors. I think it needs to be worthy, the same as a federal salary, right?” Held said. “People in the federal government—they have families, they need a salary to support their kids and you can incentivize them at the margins by giving them a raise or a bonus, but that’s not what they work there for. They work there for a commitment to the country.” He later added: “I think reputation motivates them much more than fee. And I think we need to reward them by supporting their good reputation. And when things go wrong, I think we need to hold them accountable. And I think you’ll find, by and large, that when you talk to people about reputation, you don’t have to tell them the right thing to do, they’ll do it themselves.”
Held also reiterated comments made on the sidelines of the Nuclear Deterrence Summit in February, suggesting that he’d go back to the days when AT&T was paid $1 a year to manage the lab. He acknowledged that’s not possible these days, but said, “I think we do need to think about the incentives that we’re providing. And I think if we do that, we will get better performance … and the oversight requirements will be easier. The performance will be better.”
