NNSA Eyeing Moving Y-12 Plant Operations In Downsizing Plan


By George Lobsenz

With a big nudge from the White House, the National Nuclear Security Administration (NNSA) is looking at moving operations from its Y-12 uranium processing site in Tennessee to another site as part of its effort to reduce the size of the Energy Department's nuclear weapons complex, the head of the semi-autonomous DoE weapons agency told Congress last week.

The disclosure April 16 by NNSA Administrator Thomas D'Agostino came in response to comments by Sen. Byron Dorgan (D-N.D.), the chairman of the Senate energy and water appropriations subcommittee, that Dorgan was "surprised" that NNSA did not propose closing at least one of its eight sites in its draft downsizing plan for the nuclear weapons complex.

Dorgan also revealed that the White House Office of Management and Budget had ordered independent studies of NNSA's downsizing plan, and that those studies had found there could be "economic benefits" to consolidating Y-12 operations at another NNSA site. D'Agostino disputed that finding, but said NNSA was conducting another round of studies on Y-12 and other consolidation options.

Dorgan also queried D'Agostino on his decision to build a replacement facility for NNSA's aging Kansas City Plant in Kansas City rather than consolidating those operations at the agency's Pantex plant in Texas or Sandia National Laboratories in New Mexico. The NNSA chief defended that decision to keep the separate site in Kansas City, citing the special skills of the Kansas City Plant's existing workforce in production of electrical components for warheads.

On other issues raised at a subcommittee hearing on NNSA's proposed $9.1 billion budget for fiscal year 2008, Dorgan said he would not provide $10 million requested by the agency to continue studies on its "reliable replacement warhead" (RRW) initiative.

While the agency says the RRW is needed to modernize the nation's aging nuclear arsenal, Dorgan said further development of the RRW needed to await the results of a review ordered by Congress last year on the strategic implications of building the new warhead. Sen. Pete Domenici (N.M.), ranking Republican on the subcommittee and a strong RRW supporter, said he might challenge Dorgan when the DoE fiscal 2009 spending bill comes to the Senate floor, though he had not decided to do so.

The hearing also featured testimony by the heads of the NNSA's three nuclear weapons laboratories in which they said they were being squeezed--and forced to lay off thousands of employees--by federal budget constraints and rising costs.

But in a revelation that clearly startled lawmakers, the head of Lawrence Livermore National Laboratory--which April 15 announced layoffs of up to 535 employees, including "core" scientists--said the job cuts were largely related to the changeover of the lab's management from the University of California to Lawrence Livermore National Security (LLNS), a consortium led by the university and Bechtel.

Livermore Lab Director George Miller said the shift from the university, a tax-exempt, nonprofit institution, to the private sector consortium sharply raised costs because LLNS as a private sector entity had to pay taxes and had higher medical benefit and pension costs than the university. He said those unexpected transition costs, along with inflation, had resulted in an additional $200 million in expenses, forcing the layoffs.

All told, Miller and Los Alamos National Laboratory Director Michael Anasastasio--whose lab also recently changed management from the University of California to a consortium led by the university and Bechtel--said they had been forced to lay off some 2,000 employees apiece over the last two years. Sandia National Laboratories Director Thomas Hunter said the job toll at his facility was only 500-600 because Sandia had managed to pick up other work to replace nuclear weapons missions that had been cut back.

Sen. Dianne Feinstein (D-Calif.) expressed concern that the layoffs at the labs were the result of "unintended consequences" from the Bush administration's decision to hire the consortiums at Livermore and Los Alamos, and she and other subcommittee members asked for the labs to submit detailed reports to Congress on the unexpected cost increases.

On the NNSA downsizing plan, Dorgan questioned why NNSA is not moving to close any facilities given the agency's acknowledgment that it had to cut costs and shrink the complex in light of sharp reductions in the nation's nuclear arsenal.

"Some, including myself, are surprised that there is not a recommended closure of at least one site," he said.

Dorgan went on to say that White House officials had ordered an independent review of the NNSA's downsizing plan, resulting in studies that suggested there could be savings from consolidating Y-12's operations at another NNSA site.

"One of the findings said there were potential economic benefits from the relocation of the uranium operations from Y-12 to another site," said Dorgan.

He said the study cited security problems at Y-12, which is located at Oak Ridge, Tenn., and its aging infrastructure, with the only exception being the High-Enriched Uranium Materials Facility (HEUMF), which is being built to provide safer and more secure storage for weapons-usable high-enriched uranium.

"The assessment highlighted the vulnerability of the Y-12 site, and the fact that other than the HEUMF, virtually all other Y-12 buildings will need replacement," Dorgan said.

But far from closing Y-12, Dorgan noted that NNSA had proposed designating Y-12 as its main uranium processing site for the future.

D'Agostino acknowledged the questions the study raised, but said they did not conclude that there would be savings from relocating Y-12's operations.

"In the case of Y-12, the evidence was clear that...there was no clear winner on whether to move those capabilities out or not," he said. "It was neck and neck, dead-even."

Further, D'Agostino questioned the evidence showing savings because "most of these studies typically do not take into account the value of the workforce that's needed to operate and deal with special [nuclear] materials." He added that due to Y-12's specialized uranium missions, "clearly, there is a set of material there that requires a special workforce."

Thus, he said NNSA had decided to conduct a second round of cost studies on Y-12 while it was taking comments on its draft downsizing plan--and to "err on the side of" keeping Y-12's workforce in place in its draft plan. D'Agostino emphasized that no final decision on Y-12 had been made.

Dorgan also questioned NNSA's decision to build a new facility for the Kansas City Plant in Kansas City, especially given NNSA's unusual implementation plan. NNSA is having the federal General Services Administration (GSA) build the facility and then will lease the plant from the GSA.

D'Agostino said NNSA had considered consolidating the Kansas City Plant operations at another site, but had concluded that it would be a mistake to abandon the experienced and highly efficient workforce at the Kansas City Plant, which is operated for NNSA by Honeywell [HON].

"From the standpoint of the location, I had the option to look around," D'Agostino said, but he added: "Given Honeywell's high level of performance and the quality of the workforce. I did not feel it...made much sense to move that many people to satisfy that same mission."





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