Todd Jacobson
NS&D Monitor
10/24/2014

AMELIA ISLAND, Fla.—As the Department of Energy wrestles with revamping its contracting approaches, increasing an emphasis on nuclear safety while cutting back on fee, it doesn’t appear likely to continue the approach pursued in Bechtel’s contract for the Hanford Waste Treatment Plant. The WTP contract sought to incentivize safety culture on the project by tying it to fee-earning ability, but Bruce Held, a senior advisor to Energy Secretary Ernest Moniz, said here this week at the Weapons Complex Monitor Decisionmakers’ Forum that he was “dubious” about incentivizing nuclear safety. “Relegating nuclear safety to the status of one of several performance metrics risks incentivizing in a costly and counterproductive fashion exactly the kind of tradeoffs between nuclear safety and nuclear mission that [Navy] Adm. [Hyman] Rickover recognized long ago was so unwise,” Held said. “I believe our governing contracts must recognize nuclear safety as a ‘sine qua non,’ a core value without which DOE’s nuclear mission cannot succeed.”

While he was serving as the acting NNSA administrator earlier this year, Held outlined Moniz’s interest in moving away from larger fees for the contractors that run DOE’s laboratories and sites and toward more of a “public interest” model, and that strategy is already taking root with a decision to lower the fee of Battelle Energy Alliance at Idaho National Laboratory when that contract was extended. The Department has also opened talks with other M&O contractors, including the managers of Los Alamos and Lawrence Livermore national laboratories, Bechtel and the University of California, about lowering the fees at those sites.

‘This is Kind of Like Moving the Titanic’

The strategy, Held said, is designed to more closely align the Department—and the NNSA—with its contractors, but he said no decisions had been made about how the new model would look. He noted that Moniz had asked the Secretary of Energy Advisory Board to examine the issue, and he said he hoped the Congressionally mandated NNSA governance advisory panel would also weigh in. Moniz’s recently created internal DOE Nuclear Policy Council will also address the issue, Held said. “What is clear is the fee balancing with risk ownership,” he said. “There is clearly a tradeoff between fee and risk aversion. So we’re not there yet but we’re moving in the right direction. I’m pretty happy we’re moving in the right direction.” He added: “This is kind of moving the Titanic.”

He said the aim was to construct the contracts so that cultural behaviors that are priorities for the Department are encouraged. “Personally I am dubious that relegating nuclear safety to the status of one amongst several performance metrics all subject to sliding scales of graduated financial incentives is strategically the best way to do it,” he said. “I think we need a better structure particularly between the government and the private sector that properly rewards the private sector but recognizes since DOE owns these facilities eventually we own the risk.”

Held: Nuclear Safety a Ticket to Entry

A focus on nuclear safety, however, must remain as an integral part of any contract, Held said. “My instinct is that nuclear safety becomes a ticket-to-entry-type of thing,” he said. “We really have to have absolute confidence in that and that underlies everything. We need to enable the people out in the line who are going to see issues. We need to empower those people to speak. We need to create the expectation when those people start speaking people take that concern—mid-level management, the contractors, the oversight groups, that rings a bell and we seriously address those.”

He said the recent shutdown at the Waste Isolation Pilot Plant and the pause of plutonium operations at Los Alamos National Laboratory were two examples where safety issues had a major impact on the mission of the sites. “Excellence in nuclear safety enables and drives excellence in other nuclear mission areas,” Held said. “And the absence of nuclear safety spells the end of the nuclear mission.”

Held Pushes for More S&T Research on Nuclear Safety

Held also suggested that DOE should invest more of its research money and “science and technology brainpower” on nuclear safety issues. Specifically, he said developing modern tools and simulation capabilities for analyzing seismic safety in nuclear facilities has lagged behind other advancements. “The tools available to us today are decades old and leave us with unnecessarily large margins of uncertainty,” he said. “The return on such an R&D investment on seismic safety as it applies to DOE’s defense nuclear facilities alone would be more than sufficient to justify every single dollar of that investment. … An even bigger payoff would come when the benefits of that R&D are applied to the broader civil sector, including physical infrastructure, commercial buildings, and civilian nuclear energy.”