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Department of Energy

DOE06: Redirect Energy Laboratories to Post-Cold War Priorities

Background

For the first time in 50 years, the United States is not engaged in producing or testing nuclear weapons. Significant reductions in funding ($1.25 billion in fiscal year 1994) for nuclear weapons-related activities have already occurred.(1) Further reductions have recently been made possible by the President's decision not to resume testing of nuclear weapons.

Department of Energy (DOE) officials must shift their facilities to the post-Cold War environment. This means that it will be necessary to take a hard look at the DOE weapons complex, including production facilities, testing sites, and laboratories, to determine what is needed in the post-Cold War era and to plan for closure or consolidation of excess facilities. They must also take care that a lower level of nuclear weapons research, production, and testing activities is used effectively to meet our defense requirements.

At the same time, DOE's weapons laboratories and production plants represent an investment in world- class intellectual, research and development (R&D), and computing capability that was cultivated for five decades and would be difficult to redevelop. With adequate planning, the laboratories can redirect some of their worldclass talents and equipment to partnerships with industry and to meeting non-defense government requirements.

New post-Cold War era projects of national scope and importance that combine public benefits with the potential to advance technology, further the growth of knowledge, promote industrial develop-ment, and stimulate the creation of productive, high-quality jobs are being discussed. DOE laboratories may be able to contribute to these projects because they have special capabilities that are not available elsewhere. These include basic and applied research involving large-scale and multidisciplinary problems that would be difficult for others to tackle because of their size, complexity, and long-term nature.

These same capabilities could be put to use to meet the needs of government agencies other than DOE. In some cases, DOE laboratories may be able to meet those needs better than the other agencies' own R&D institutions-- perhaps better than any government or private R&D institution. There might be room for DOE laboratories to do more work for other government agencies on a competitive basis, in which the lab best suited would be awarded the work based on merit. Similarly, within DOE there could be more flexibility in the competition among DOE laboratories for DOE research programs.

Activities to transfer technological knowledge and promote closer partnerships among government agencies and between government and industry have received new interest and attention in recent months. The national laboratories can help industry use science and technology to become more competitive, and technology transfer has been established as a mission at all of them. A number of initiatives totaling more than $250 million have been proposed in DOE's fiscal year 1994 budget.(2) Most of these funds are for cooperative research and development agreements, which require matching funds from private industry and universities.

To promote a user-friendly, customer-oriented environment in the laboratories, and to achieve successful government-industry partnerships, a distinct cultural change will be necessary in headquarters program offices and at field facilities by both government officials and the contractors who operate the laboratories. Institutional barriers will need to be removed, and some legislative and regulatory actions may be necessary.

Altogether, the redirection of DOE laboratories and other facilities will be an extensive undertaking that requires both the establishment of a uniform review of all facilities and actions tailored specifically to each site.

Actions

1. DOE should continue to support the reduction of funding for nuclear weapons production, research, testing programs, and infrastructure that are not needed to meet current defense requirements.

2. The Secretary should develop a vision and mission for the total DOE laboratory complex. The Secretary should then review the mission and facilities of DOE laboratories, weapons production facilities, and testing sites and recommend the phased consolidation or closure of obsolete or redundant facilities.

The recommendations should be developed in consultation with the Office of Science and Technology Policy, the National Science Technology Council (proposed by NPR), the Secretary of Defense, and other appropriate federal offices. Facilities to be retained should be targeted for refurbishment as may be necessary. Functional facilities and equipment no longer needed by DOE or other federal agencies should be sold or leased, with the proceeds used to offset capital improvements within the DOE complex.

3. The Secretary should convene a group to design and implement mechanisms for identifying intellectual assets, test facilities, and research capabilities at national labs that can be useful to other government agencies.

These mechanisms would promote development of joint R&D projects within government and improve efficiency, consistency, and responsiveness.

4. Once DOE has established a fair "pricing" process, it should encourage laboratory managers to bid on federal contracts and to apply for government grants that could utilize their unique technical capabilities without competing directly with the existing capabilities of private industry.

They should be encouraged to seek appropriate projects from program offices throughout government to optimize the use of local people and facilities.

5. Laboratory managers should also be encouraged to work more closely with the private sector on high- priority R&D needs and to bid for contract or cooperative work on such projects.

The laboratories should be able to work on the projects either alone or in consortia with other laboratories, the private sector, and universities where such cooperative arrangements foster unique blends of talent and resources. In bids for contract work for others, overhead costs of these laboratory activities must be fully recovered to ensure that DOE laboratories do not have an unfair competitive advantage. However, managers should have discretion concerning cost allocation and pricing comparable to that available to managers in private businesses in transition. Unnecessary legislative and regulatory impediments that inhibit collabora-tion between the national labs and industry and universities should be identified and removed.

6. DOE, the contractors who manage the laboratories, and laboratory managers should work to make access to the laboratories' resources more accessible to the private sector, removing unnecessary layers of approval for cooperative R&D agreements and contract work-for-others, and taking other steps to simplify and speed up the process.

Implications

Cost savings would result from program reductions as well as the closure of obsolete or redundant facilities and the sale or lease of excess functional equipment and facilities. DOE is not currently allowed to use the proceeds from the sale or lease of excess facilities and equipment to offset its continuing capital improvement needs. Authorizing legislation is required.

Taxpayer return on investment in DOE's scientific and technical facilities would be improved by making effective, efficient use of national laboratory facilities to meet evolving national needs in areas such as fundamental science, industrial technology, and environmental protection, as well as the changing requirements for national security.

The nation's ability to address its most critical technological challenges would benefit substantially. Increased use of cooperative partnerships and transactions with industry and universities would improve the connections between laboratory research, education, and the marketplace. Disruption to DOE laboratory work forces and local communities due to defense program cutbacks would be minimized.

Fiscal Impact

Significant reductions in funding for research, development, testing, and production of nuclear weapons are already included in current baseline budgets. Additional reductions should be considered for the years after fiscal 1994 based on these recommendations.

The sale or lease of excess facilities and equipment could average $20 million per year from 1995 through 1998.

Budget Authority (BA) and Outlays (Dollars in Millions) 
*******************************************************
Fiscal Year
           1994     1995     1996     1997     1998     1999     Total
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
BA         n/a     -445.0   -445.0   -420.0   -420.0   -420.0   -2,150.0     
Outlays    n/a     -311.5   -431.7   -427.5   -420.7   -420.0   -2,011.4     
Change
in FTEs    n/a        0        0        0        0        0         0

Endnotes

1. U.S. Department of Energy, Budget Highlights FY 1994 (Washington, D.C., April, 1993), p. 3.

2. Ibid., p. 54.

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