Todd Jacobson
NS&D Monitor
4/24/2015
Consolidated Nuclear Security, the Bechtel-led team that took over management of the Y-12 and Pantex nuclear weapons plants last year, is saving approximately $2 million a week under its cost-savings plan, according to Richard Goffi, the Booz Allen Hamilton vice president helping to head up transformation activities for the CNS team. Goffi addressed the Congressional Commission to Review the Effectiveness of the National Energy Laboratories April 22 as part of the panel’s examination of potential efficiencies across DOE’s national laboratories, providing a glimpse into the first 10 months of CNS’ tenure managing Y-12 and Pantex. As part of its proposal, CNS proposed $3.27 billion in cost savings over 10 years, and Goffi said about 30 of 70 cost savings initiatives have so far been implemented. “There was a lot of concern about it but it it’s working,” Goffi said. “There are some challenges there. We have to figure out how to do this dynamic scope with the expectations of an M&O.”
Former acting NNSA Administrator Neile Miller, who helped shepherd the Y-12/Pantex procurement through its completion, said after addressing the commission that there could be room for consolidation at the labs, mostly in functional areas. “On the mission support side, there is no magic in the laboratories,” said Miller, who has worked as a consultant since leaving the NNSA in 2013. “It’s mission support; it’s the same kind of functions. … There is a lot of fertile ground at the laboratories.” Miller said a function like payroll could be consolidated across the labs. “If you ask the average person they would say you can’t combine them because they’re different companies, but you could easily do it,” she said.
Goffi noted that more than $10 million had already been saved at Y-12 and Pantex through supply chain management solutions and smart buying techniques. “You don’t need to consolidate the labs but you can consolidate functions across the labs and there are substantial efficiencies you can gain if you use the common buying,” he said. “We save a ridiculous amount of money simply by consolidating travel. Because of the buying power of scale and how much of what’s done at the different labs you can consolidate buying power and save a lot.”
Panel on Fact-Finding Mission
Former Deputy Energy Secretary T.J. Glauthier, the co-chair of the lab panel, said the commission is trying to understand how the NNSA consolidation of Y-12/Pantex is working. “What that contract is doing is trying to find ways to make efficiencies out of the existing plants and their operations,” Glauthier said. “We’re interested in two aspects of that: one is the back office functions and the other one is changing business practices. There are ways the operations can be more efficient. But beyond that we don’t have any predisposed ideas yet.”
Miller emphasized that it was important to have a plan for how the consolidation would fit into the laboratory complex out into the future. “You have to do it with a vision for the whole thing 5, 10, 15 years out. You can’t go, ‘What’s the next thing we can consolidate?’ That’s a mistake. You can do that once. They did it,” she said, referring to the Y-12/Pantex consolidation. “Now you have to make the jigsaw pieces fit together in whatever the new puzzle is. You won’t get the efficiencies if you don’t do that. You will hit buzzsaws and people can’t sustain that.”
