Todd Jacobson
NS&D Monitor
8/29/2014
KANSAS CITY, Mo.—National Nuclear Security Administration chief Frank Klotz said here late last week that he plans to reinvigorate plans to employ the Kansas City governance model more broadly across the weapons complex after efforts to implement the model stalled out in recent years. During a visit to the new Kansas City National Security Campus, Klotz and Energy Secretary Ernest Moniz lauded the Kansas City model, which relies heavily on industrial standards and contractor assurance systems instead of DOE regulations. The model, along with a move to a new non-nuclear production facility, is credited with saving more than $100 million at the site. “This is a great governance example as well for us to propagate,” he said. Klotz told NS&D Monitor that the NNSA was working on a “plan to apply as many of those [principles of the model] as we possibly can,” and would soon be sending the plan to Congress.
Implemented at the Kansas City Plant, the biggest hit to the governance model came in July 2012 when peace activists broke into the Y-12 National Security Complex. The security breach was partially blamed on an overreliance on contractor assurance systems, and a Government Accountability Office report earlier this year suggested that the reforms that helped cut costs and streamline operations at Kansas City may not be widely applicable elsewhere across the weapons complex. Klotz said work with nuclear materials presents unique challenges, but said there was plenty of opportunity to implement the strategy more broadly. “What I have asked my folks to do and what they have done is gather a plan laid out in step-by-step fashion of how we can take some of the KC model and apply it to the rest of our enterprise,” he said. “One of the key issues we have to work through are the safety and security concerns associated with those facilities which handle and store special nuclear materials but there may be a lot of other areas in which we can do that.”
The House Armed Services Committee has been keen on making the NNSA more efficient, and directed the NNSA to study implementing the model across the complex in the Fiscal Year 2014 Defense Authorization Act. It also was influential in establishing the Congressional advisory panel on governance of the nuclear security enterprise, which is expected to address ways to streamline and improve operations across the complex.
Kansas City Officials: Opportunity Elsewhere for Model
Chris Gentile, President of Kansas City contractor Honeywell Federal Manufacturing and Technologies, said there is plenty of opportunity to implement the strategy across the complex. “I know there is a notion that this is for non-nuclear facilities, that it’s more commercial, and that’s why you can do it here at Kansas City,” Gentile told NS&D Monitor. “If you stripped out the [nuclear aspects] of the other contracts and just said let’s not deal with those, let’s assume you have standards, and you thought about the budget, the people, the business processes associated with that, the governance model is entirely applicable to those aspects of the business. When you think about the money that we’ve saved and the business processes we’ve changed, it’s about how you run the business; it’s not about the core competency of what you do.”
He said contractors were as responsible as their federal partners for changing business practices. “The contractor has to be willing to examine our own business processes to say we’re partly culpable for this and we’ve got to go strip that cost out of this business,” he said. “The cost that the contractor adds over time I would say is actually bigger than the cost of the order affecting your business.”
‘You Need Performance First and Foremost’
Kansas City Site Office Manager Mark Holecek emphasized that a unique set of circumstances helped the model succeed in Kansas City: a high-performing contractor that had gained the trust of the NNSA, a non-nuclear production workload, and a sole company running the plant. “You need performance first and foremost because if performance is not there it’s hard to have that relationship and trust,” he said. “But you also need transparency. The one thing we have with Honeywell is we know they don’t try to hide things from us. We in some cases know things before they do. And it’s because there is that level of transparency there.”
Without other partners managing the plant, Honeywell has also been able to provide more corporate support without complications from other team members. “They’re managing it directly, and that allows us some flexibility here,” Holecek said. “Corporate reach-in is a huge factor that we have here and partly that’s because we have a single corporate entity in the facility rather than a grouping of multiple different corporations.”
