PERs Highlight Very Different Years for Los Alamos, Livermore in FY 2014

Todd Jacobson
NS&D Monitor
1/23/2015

National Nuclear Security Administration officials were highly critical of Los Alamos National Laboratory management in the lab’s recently released Fiscal Year 2014 Performance Evaluation Review, but had plenty of praise for the managers of the agency’s other physics laboratory, lauding Lawrence Livermore management for turning things around during the year. The two reviews stand in stark contrast to each other. The NNSA said the shortcomings by LANL manager Los Alamos National Security during the year “reflect a negative trend in leadership performance,” and in an unprecedented move, the agency docked the contractor more than 90 percent of its available fee during the year, paying just $6.25 million, in large part due to the lab’s role in the radiological release at the Waste Isolation Pilot Plant. The lab also did not earn an award-term extension, and the NNSA revoked a previously earned one-year extension because of the “significant performance failure.”

By contrast, Livermore manager Lawrence Livermore National Security’s performance was rated as “very good.” The contractor earned an award term extension and was praised for “significant improvement in leadership” a year after being heavily criticized for leadership problems.

While Livermore earned 87 percent of its at-risk fee ($23.9 million out of $27.6 million available), Los Alamos’ $17.1 million in fixed fee and $18.2 million in incentive fee was zeroed out due to its performance problems. The only money earned by the lab was $6.25 million in Work For Others fee, which is work for other government agencies. Before the lab’s incentive fee was zeroed out, it had earned 87 percent of its fee ($7 million out of $8 million available) for nuclear weapons mission work and 80 percent ($6.4 million out of $8 million) for broader national security mission work. It earned no fee for operations and infrastructure, and only 30 percent ($2.4 million out of $8 million) in two separate categories: science, technology and engineering and leadership.

FY 2014 fee data was released in late December, but the full Performance Evaluation Reviews for each NNSA site weren’t publicized until late last week. For Los Alamos, the document lauds the lab for meeting much of its nuclear weapons mission work, but highlights many of its shortcomings, including the continuing shutdown of the lab’s Plutonium Facility, “ethical lapses” by senior lab staff—a reference to former Deputy Director Beth Sellers, who is facing a three-year debarment from government contracting for not promptly disclosing her husband’s consulting agreement with the lab—and issues with the lab’s Earned Value Management System. “While there were significant accomplishments during the reporting period, the impact and gravity of documented shortcomings overwhelm those accomplishments and reflect a negative trend in leadership performance; constituting performance that is below expectations,” the NNSA said.

The impacts of the WIPP-related problems “include the diversion of key staff from mission work, huge financial costs to the Department of Energy that are still accumulating, failure to meet environmental commitments made to the state of New Mexico, damage to an important relationship with a key state regulatory body, broad adverse economic impacts associated with the suspension of normal operations at the Waste Isolation Pilot Plant, and a degradation of public confidence in the conduct of nuclear and high hazard operations at the Laboratory,” the NNSA said.

The NNSA called the lab’s transuranic waste processes and a laboratory waste stream “contributing or causal” factors to the radiological release at WIPP, which was believed to be caused when a Los Alamos-processed waste drum was breached by a reaction within the drum. WIPP’s shutdown led the lab to miss a key commitment to ship 3,706 cubic meters of transuranic waste from the lab to permanent storage. “Although self-disclosed, the Laboratory’s Resource Conservation and Recovery Act violations with respect to transuranic waste management compounded the severity of the transuranic waste incident,” the NNSA said. “This incident highlighted a significant failure in the Laboratory’s formality and conduct of operations, driving the overall rating of this Performance Objective to Unsatisfactory.”

Things were hardly better at the lab’s Plutonium Facility, where operations have been largely shut down since June of 2013 because of criticality safety concerns. Because of the shutdown, the NNSA noted that despite pouring significant resources into the Plutonium Facility, it had a “performance year in which the workforce and facilities did not significantly contribute to productive programmatic use.”

Capital Project Execution ‘Below Expectations’

The NNSA also noted that the lab has performed “below expectations” in capital project execution. Its Earned Value Management System is on the verge of being decertified by the NNSA. Several projects struggled, the NNSA said. The TA-55 Reinvestment Project II Phase C experienced delays in achieving Critical Decision 2/3 due to “poor performance in the preparation of critical project documents and in closing corrective actions from project reviews” and it remains below expectations, the NNS said, due to post CD 2/3 material procurement and resource issues. The NNSA said the Radiological Liquid Waste Treatment Facility project is also “below expectations” because the design/Preliminary Documented Safety Analysis was not awarded on schedule, and the Transuranic Waste Facility missed several key milestones, and the Los Alamos Neutron Science Center Linac Risk Mitigation project was heavily criticized by the Department of Energy Inspector General for not adhering to DOE project management requirements.

The NNSA said the Nuclear Materials Safeguards and Security Upgrade Project—which was shut down in 2012 and had to be rebaselined—was completed in May of 2014 under its $244.2 million revised estimate, but only after $750,000 in scope was deferred. “The project exceeded both the original $221.2M Contractor’s Budget Base and exceeding the Over-Target Baseline date established early in the performance year,” the NNSA said.

Livermore Credited for Changes

By contrast, Livermore was lauded by the NNSA for improving operations at the site a year after it missed out on an award term and was highly criticized for leadership issues that led to the departure of laboratory Director Parney Albright. He was replaced by Bill Goldstein. “LLNS made several key leadership changes and permanently filled several critical vacancies with highly qualified individuals in close coordination with senior DOE/NNSA leadership,” the NNSA said. “These changes resulted in a much greater level of transparency, customer focus, and better alignment of Laboratory and enterprise priorities.”

Notably, the NNSA singled out the change of laboratory director and a new principal associate director for praise. The changes “led to better alignment of Laboratory goals and objectives with those of the National Security Enterprise,” the NNSA said. “LLNS defined and implemented a realistic strategic vision for the laboratory by effectively aligning its Multi-Year Performance Strategy with the NNSA Strategic Plan.”

Livermore was also credited with making improvements on the National Ignition Facility, where it implemented a new governance model that has balanced experiments on the laser facility between those designed for Stockpile Stewardship and achieving fusion ignition. “LLNS achieved significant operational efficiencies in NIF, improving the shot rate, and executed challenging experiments in support of the Stockpile Stewardship Program (SSP) and other national priorities, improving the scientific value of the data,” the NNSA said.