A day after the National Nuclear Security Administration announced it would not pick up the remaining options on the existing management deal for its Y-12 and Pantex sites, the Government Accountability Office on Wednesday urged the agency to study whether the outgoing contractor’s cost-saving methods could work at other nuclear-weapon sites.
Consolidated Nuclear Security (CNS) in 2014 scored the combined contract for the Y-12 National Security Complex in Tennessee and Pantex Plant in Texas. It will be off the job after Sept. 30, 2021, leaving three years of options on the table. That was after, according to CNS parent Bechtel National, the semiautonomous Department of Energy nuclear weapons agency confirmed that combining the previously separate site-management contracts has saved the government some $740 million.
The Government Accountability Office did not confirm that figure in its report, but did say the National Nuclear Security Administration (NNSA) verified some $515 million in savings through fiscal 2018. That was about four-fifths of the amount proposed to that point, according to the GAO report.
“CNS achieved most of the savings through labor savings—for example, by reducing positions,” Congress’ investigative arm stated. However, “NNSA officials and contractor representatives were uncertain about whether the [CNS] Cost Savings Program could be exported to other existing or future contracts because NNSA has not gathered information on nor documented its analysis of the Cost Savings Program.”
To that end, the Government Accountability Office said NNSA headquarters should “gather data on and document an analysis” of the CNS cost savings plan “to determine whether it is exportable to existing or future contracts.”
Pantex has about 3,500 workers on-site, and Y-12 normally has about 6,000 personnel, including the construction workers building the Uranium Processing Facility. In its report, the Government Accountability Office said CNS eliminated some 270 positions, and had 182 workers take voluntary buyouts in 2014, when it took over the two operations. In total, labor cuts made up about two thirds of all the savings the contractor achieved through 2018, according to the office.
In her response to the Government Accountability Office’s recommendation, NNSA Administrator Lisa Gordon-Hagerty poured a little cold water on the idea that the CNS cost-savings model provides a ready-fit template for other nuclear-weapon sites.
“NNSA agrees the potential benefits of a cost savings program, such as the one implemented at CNS, should be considered for future contracts as applicable,” Gordon-Hagerty wrote in a letter appended to the report published this week. “The cost savings program at CNS, however, is unique as it is intertwined with a site consolidation initiative.”
Even so, Gordon-Hagerty said the NNSA would study whether it could apply its experience with Consolidated Nuclear Security to any other sites, when it comes time to transition those to new management.
The NNSA has not announced plans to combine the management contracts of any other of its eight nuclear-weapon sites, or consolidate any of the other locations. The agency’ two nuclear weapons design laboratories, Los Alamos in New Mexico and Lawrence Livermore in California, particularly pride themselves on being independent and competitive by design.
On the other hand, Y-12 and Pantex — respectively the hub for manufacturing uranium-fueled secondary nuclear-weapon stages and the central service-center for the entire U.S. nuclear arsenal — had enough in common operationally that the NNSA in 2014 decided to put them under a single manager. Both sites have a great deal of organized hourly labor, for example.
The savings the agency has confirmed at the production sites — without showing its work in public — have not quite measured up to CNS’ ambitions. The contractor targeted roughly $3 billion in savings over the 10-year life of its contract. On a simple annualized basis, the savings reported by the Government Accountability Office, and by Bechtel, pace behind that goal.
In the 2018 National Defense Authorization Act, Congress ordered the Government Accountability Office to prepare the report published Wednesday. The office wrote the report before NNSA finalized its decision not to pick up CNS’ remaining options.
