Championing Responsible National Security Policy

Energy Lab Commission Appeals for More Trust, Less Oversight

A special commission on Department of Energy (DOE) Laboratories has found that the main problem facing the labs is excessive government oversight.

Uh, we don't think so.

DOE operates a network of 17 labs that research and build everything from fracking technology to nuclear weapons. The Commission to Review the Effectiveness of the National Energy Laboratories, or CRENEL, was created in 2014 to determine if the labs meet the nation’s needs, and how they might be made to work more efficiently.

Red tape may be hurting productivity at some labs, but recent history suggests robust oversight is still needed at others. DOE operates three nuclear weapons laboratories, managed by the semi-autonomous National Nuclear Security Administration (NNSA). These three labs have accounted for two-thirds of the financial penalties levied against the entire laboratory system over the past twenty years, according to data in POGO’s Federal Contractor Misconduct Database.

Reviewers estimate that CRENEL is the 55th commission of its type during that time span.

After nearly two years of study, the Commission concluded that much of the waste, fraud, and abuse within the national lab system can be attributed to breakdowns in trust between DOE and its contractors. The lack of trust may cause the contractors in charge of running operations at the labs to hide emerging problems from DOE, and in turn cause DOE to impose milestones and budgetary limitations that the labs find burdensome.

“DOE should be directing and overseeing its programs at a policy level, specifying ‘what’ its programs should achieve” testified T.J. Glauthier, commission co-chair, before the Senate Appropriations Subcommittee on Energy and Water Development. “The labs, for their part, should be responsible for determining ‘how’ to carry them out.”

The Commission provided 36 recommendations, many aimed at institutionalizing eyes-on, hands-off oversight.

Among the CRENEL recommendations that could weaken oversight of NNSA:

  • “DOE should give the laboratories and M&O [Management and Operations] contractors the authority to operate with more discretion wherever possible…DOE should review and minimize approval processes.”
  • “All stakeholders should make maximum use of local assessments (performed by site offices and laboratories), with appropriate verification, to reduce duplicative assessments and burden on the laboratories.”
  • “Congress should recognize that the capabilities currently housed within the NNSA laboratories are essential to the Nation. Maintaining these capabilities in separate and independent facilities should continue.”

In recent years, NNSA has struggled to manage its budget and effectively allocate resources. “You're asking for less oversight, and that’s a problem when you have billions [of dollars] in [cost] estimates that have been underestimated,” said Senator Dianne Feinstein (D-CA), the subcommittee’s Ranking Member.

As the Government Accountability Office (GAO) reported in August, NNSA has struggled to make accurate predictions about what new programs cost, their appropriate scale, and the level of funding needed for maintenance and upkeep.

Individual labs have also struggled with management. Senator James Lankford (R-OK) challenged Glauthier to square his calls for trust with reports that there have been 76 cases of theft at Los Alamos National Lab (LANL) this year alone. According to the Department of Energy Inspector General, LANL has also struggled with internal controls for procurement, classified information, and other basic functions.

Calls for trust also need to be reconciled with the fact that Sandia National Laboratory has repeatedly illegally used taxpayer dollars to lobby the federal government, and that Lawrence Livermore National Laboratory has racked up over $81 million in fines in the last twenty years.

Given this recent history, it’s curious that the Commission would recommend “maximum use of local assessments.” Far from being “duplicative” and burdensome, outside assessors such as the GAO and the Inspector General have repeatedly called NNSA to account for waste, fraud, and abuse that local site offices have not.

The third recommendation above also comes as a disappointment to watchdogs, including the Inspector General and the Project On Government Oversight, which have argued that consolidation would relieve some of the budgetary and management pressure on NNSA. This process has been proven to work in the case of excess military instillations. The Pentagon's latest round of BRAC, which stands for Base Closure and Realignment, will save an estimated $9.9 billion by the middle of the next decade.

There are positive suggestions for NNSA in the report, such as strengthening “red-team” reviews of new construction projects and abandoning incentive award fees, and many of the Commission’s recommendations will no doubt benefit DOE’s non-weapons labs and taxpayers. However, when it comes to NNSA, giving more power to irresponsible contractors, discouraging independent assessments, and ignoring the obvious benefits of consolidation is clearly bad advice.

When it comes to nuclear weapons, taxpayers should hope this report joins its 54 predecessors, gathering dust on the shelf.