Consolidated Nuclear Security, the managing contractor at the Y-12 and Pantex nuclear weapons plant, is scrambling to get its funding accounts back in order after a series of events created what has been described as an “imbalance.”
Even though CNS is reportedly within its budget and meeting production goals for the National Nuclear Security Administration, the federal contractor’s ratio between its “direct-funded” activities – such as security and work on nuclear weapons – and its “indirect-funded” or overhead operations is not what it’s supposed to be.
The overhead spending is about where planned or even exceeding projected levels, while the direct-funded work is well below cost projections, and that has commanded a high priority on the CNS to-do list for the rest of fiscal 2016.
The NNSA would not say whether the situation could have been avoided or if it intends to punish the contractor for the funding imbalance.
“NNSA is working with CNS to address this imbalance,” Steven Wyatt, a spokesman at the NNSA Production Office, said in an email response to questions. “We are confident this will be resolved over the course of this fiscal year.”
The overhead-funded work includes areas such as as procurement; human resources; finance; and environment, safety, and health.
CNS is reportedly doing a number of things to try to draw down overhead or indirect spending, including putting limits on travel between the Oak Ridge, Tenn., and Amarillo, Texas, sites. In a message to employees last week, CNS President and CEO Morgan Smith said it did not appear that layoffs would be necessary to meet the challenges. But he indicated a number of actions would be taken to bring spending back in balance with government plans and projections.
