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Interim Report of the Commission to Review the Effectiveness of the National Energy Laboratories

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Interim Report of the Commission to Review the Effectiveness of the National Energy Laboratories Interim Report of the Commission to Review the Effectiveness of the National Energy Laboratories Jared L. Cohon, co-chair TJ Glauthier, co-chair Norman R. Augustine Wanda M. Austin Charles Elachi Paul A. Fleury Susan J. Hockfield Richard A. Meserve Cherry A. Murray February 27, 2015 Acknowledgements The Commission appreciates the contributions of the IDA Science and Technology Policy Institute team led by Susannah V. Howieson and Mark S. Taylor, including Susan L. Clark- Sestak, Christopher T. Clavin, Martha V. Merrill, Vanessa Peña, Elizabeth A. Turpen, Ryan M. Whelan, Julian L. Zhu, and Brian L. Zuckerman. The Commission would also like to thank all the individuals from the laboratory community and beyond who provided their valuable input. Executive Summary The Commission to Review the Effectiveness of the National Energy Laboratories was charged by Congress in January 2014 to evaluate the mission, capabilities, size, performance, governance, and agency oversight of the 17 Department of Energy (DOE) laboratories. Given the incredibly broad scope and aggressive timeline (the original deadline was February 2015), the Secretary of Energy and Congress agreed to split the task into two phases. This interim report contains the preliminary observations and recommendations gleaned from Phase 1 of the study, which consisted of a literature review; visits to five of the National Laboratories; semi-structured interviews with staff from across the National Laboratories, DOE, other Federal agencies, companies, other non-governmental organizations, and additional interested parties; and presentations at monthly public Commission meetings. The Commission notes that the purpose of the National Laboratories is to provide critical capabilities and facilities in service of DOE’s mission and the needs of the broader national and international science and technology (S&T) community, including other Federal agencies, academia, and private industry. The National Laboratories are successfully fulfilling that mission today. While the Commission believes significant improvements can be made to many aspects of DOE management and governance of the laboratories, those issues do not detract from the National Laboratories’ remarkable contributions to the American public. In Phase 2 the Commission will focus on ways to make the process of carrying out their missions more efficient and effective. The sections below highlight the major observations that the Commission has made during its Phase 1 work, which should be viewed as preliminary. Purpose and Importance of the National Laboratories The National Laboratories are intended to provide critical capabilities and facilities in service of DOE’s missions and the needs of the broader national and international S&T communities. The National Laboratories do this both as individual centers of excellence and as a network of laboratories around the country that often work in concert. All of the National Laboratories, save one, are run by non-governmental organizations as Federally Funded Research and Development Centers (FFRDCs). This relationship allows expert organizations to manage the laboratories and to be accountable for laboratory performance under the overall direction of DOE. When the FFRDC model functions properly, it provides significant technical and management benefits to both the iii DOE and the laboratories. The approach, as originally developed, is designed to enable the National Laboratories to retain an exceptionally skilled workforce, be agile in shifting resources to new areas as needs change over time, and utilize the best management practices from the contractor organizations. Major Recurrent Themes from Past Reports (and the lack of meaningful change) There have been an abundance of reports over the past 40 years detailing shortcomings in the relationship between the DOE and its laboratories. The reports provide a strikingly consistent pattern of criticism and similar set of recommendations for improvement. Yet, for the most part, these recommendations have not been implemented effectively, as demonstrated by the fact that the same problems continue to be cited in report after report. Many of the problems cited in earlier reports stem from a “broken trust” in the relationship between DOE and the National Laboratories. This shows up as an excessive level of transactional oversight and control by DOE over the activities of the laboratories, in conflict with the ideal relationship that is envisioned in the FFRDC model. The situation stems from what appears to be a high level of risk aversion exacerbated by disparate attitudes on risk management at DOE headquarters and the field/site offices. The Commission is working to identify root causes that have prevented significant improvements in these areas over the years. Importantly, the Commission notes the absence of a standing body or internal DOE mechanism to advocate for implementation of recommended changes, perform systematic assessments, and evaluate progress over time. The Commission will explore options for addressing the implementation gap in Phase 2 as well. Performance in Support of DOE Based on its preliminary observations, the Commission believes that the National Laboratories’ research programs and capabilities are well-aligned with DOE’s missions and strategic priorities. There are robust processes in some program offices to provide strategic oversight, evaluation and direction to the laboratories. However, those processes are not consistently utilized throughout the Department. The most effective processes are those in the Office of Science, which occur regularly and include experts from other laboratories, universities and the private sector. These are used both for annual review of each of the laboratories, and for in-depth reviews of key program areas across the enterprise. The Commission strongly believes that strategic planning for both the Department and the laboratories is best accomplished jointly, with DOE and its laboratories working iv together. The level of laboratory involvement in DOE strategic planning varies by office. Secretary Moniz and his management team are making great improvements by involving laboratory directors and their staff in the Department’s own strategic planning process. It is important to institutionalize this so that future Secretaries will continue this practice. The Commission recommends, as a preliminary measure, that all DOE program offices adopt, to the extent possible, the procedures and processes that DOE’s Office of Science has in place for guiding and assessing the quality and alignment of the 10 laboratories under its stewardship. There is some level of duplication among the laboratories in both user facilities and R&D programs, most of which is intentional, managed, and beneficial to the nation. For example, the Commission is aware of examples in which duplication and competition among the weapons laboratories of NNSA have resulted in significant reductions in cost and schedule and, in some cases, reductions in size and weight of the weapons. At early stages of new research, it is appropriate to encourage multiple researchers to carry out small-scale projects and explore many different potential avenues. In mature program areas, the Department has processes to provide strategic oversight and guidance, as noted above. However, in the intermediate stages, DOE often waits too long to provide strategic guidance to the laboratories. As a result, there is some period of time during which the labs are competing with one another to lay claim to new research areas. Engagement with and Support to the Broader S&T Community The laboratories are national assets, performing important work that goes beyond DOE’s own programs and supports other Federal agencies, other public institutions, universities, and the private sector. The laboratories provide unique capabilities in terms of expert personnel capable of providing both large-scale, long-term support and meeting rapid response needs. They also build and operate state-of-the-art research facilities that are used extensively by the broader science and technology community in support of many diverse public and private needs. The Commission has observed that DOE has policies in place to ensure that work supporting other agencies meets necessary criteria and, in appropriate areas, aligns with the Department’s missions. The Commission will be examining in more detail the processes and practices to meet those policies, at both DOE and the National Laboratories. On the whole, other Federal agency customers are very satisfied with the quality and value of the work performed by the laboratories. However, many feel laboratory costs are high relative to other institutions, and they are less satisfied with their interactions with DOE headquarters. Just as there is a lack of strategic planning across the entire National Laboratory complex, so too is there a lack of strategic planning involving other Federal v agencies with respect to S&T requirements for the DOE laboratories. In this regard, the Mission Executive Council, consisting of the DOE, Department of Defense, Department of Homeland Security, and the Intelligence Community, is not as effective a coordination resource as it was intended to be. DOE should establish techniques to make the Work for Others (WFO) process more efficient, such as institutionalizing ongoing efforts to streamline the contracting process through more consistent use of umbrella agreements and oversight mechanisms dedicated to
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