Index

Restructuring the Department of Energy:

Protecting National Security

while Promoting DOE’s Mission

 

 

Testimony before the

Committee on Commerce, Subcommittee on Energy and Power

Committee on Science, Subcommittee on Energy and the Environment

U.S. House of Representatives

July 13, 1999

 

 

Donald F. Kettl

Professor of Public Affairs and Political Science

University of Wisconsin-Madison

Nonresident Senior Fellow

The Brookings Institution

Summary

As Senator Warren Rudman’s report, Science at Its Best, Security at Its Worst elegantly makes clear, the Department of Energy’s vast laboratory and weapons-production complex suffers from serious problems. These problems gravely threaten national security. As we reform the department, however, we ought to ensure that we actually solve the problem. The proposals for a quasi-independent new agency could well cripple DOE’s capacity to achieve its mission.

DOE’s problems clearly result in part from a dysfunctional organizational structure that is the legacy of previous reorganizations, from the Manhattan Project to the present. The Department would benefit from an organizational housecleaning. Any restructuring must meet six criteria:

· The restructuring must enhance DOE’s capacity to perform its mission.

· The restructuring must improve coordination within DOE—both between headquarters and the field, and among the diverse elements of DOE’s mission.

· The restructuring must create clear lines of accountability for this mission.

· The restructuring must promote national security.

· The restructuring must help redefine DOE’s culture.

· The restructuring must create a high-performing organization.

The instinct to reorganize the Department of Energy to attack the national-security problem is surely understandable. DOE, in fact, needs restructuring. There is grave risk, however, that a restructuring that simply re-shuffles boxes at headquarters will fail to solve the real problems in the field.

Reformers ought to look carefully at the experiences of NASA for clues about how to reshape a high-risk, high-tech, contractor-driven government agency.

Introduction

As Senator Warren Rudman’s report, Science at Its Best, Security at Its Worst elegantly makes clear, the Department of Energy’s vast laboratory and weapons-production complex suffers from serious problems. These problems threaten national security. As we reform the department, however, we ought to ensure that we actually solve the problem—and we must not cripple DOE’s capacity to achieve its mission.

We are now debating the creation of a semi-autonomous Agency for Nuclear Stewardship. The Agency would be located inside the Department of Energy and under the direction of a new Under Secretary. There are also proposals to take DOE’s nuclear functions completely out of the Department and put them into a new, independent agency or to transfer the functions to the Department of Defense.

How should we think through these options? DOE’s problems clearly result in part from a dysfunctional organizational structure that is the legacy of previous reorganizations dating from the Manhattan Project. The Department would benefit from an organizational housecleaning. But any restructuring needs to meet six criteria:

· The restructuring must enhance DOE’s capacity to perform its mission. DOE has a complex job to do. The structure must support the job to be done.

· The restructuring must improve coordination within DOE—both between headquarters and the field, and among the diverse elements of DOE’s mission. We can design failure into the restructuring from the beginning: If we focus single-mindedly on restructuring headquarters without improving links with the field; or if we look only at DOE’s nuclear weapons programs without coordinating them with the Department’s other activities. The structure must support the much-needed coordination.

· The restructuring must create clear lines of accountability for this mission. DOE now has too many organizational layers between top officials and its field operations. The structure must be clear on who is in charge.

· The restructuring must promote national security. But national security is not what DOE does; it is how it does it. Real reform requires weaving a clear concern for national security into the very fabric of DOE’s operations, not trying to make national security itself the mission.

· The restructuring must help redefine DOE’s culture. The national security problem flows from a culture rooted deeply in the Department’s structure. The new structure must help define and support a new culture that pursues effective results and ensures national security.

· The restructuring must create a high-performing organization. The structure must require DOE to set clear, high standards for performance. It should reward the Department’s managers for a good job and impose tough penalties for failure.

The instinct to reorganize the Department of Energy to attack the national-security problem is surely understandable. DOE, in fact, needs restructuring. There is grave risk, however, that a restructuring that simply re-shuffles boxes at headquarters will fail to solve the real problems in the field. In the process we could well stir up so much dust that we would lose valuable time in pursuing more fundamental, more effective reforms.

We Ought to Make Sure We Solve the Right Problem

The national-security problems within the DOE complex have their roots in the Department’s field operations. For decades, the national laboratories have produced cutting-edge research. The production facilities produced ever-more-effective weapons. Over time, however, these operations have bred an organizational culture that, in turn, has fed the national security problems we now seek to cure. Indeed, Senator Rudman’s panel identified culture as "a factor that complicates, perhaps even undermines, the ability of the Department to consistently implement its security procedures" (p. 11).

DOE has a long history of reorganizing to improve its operations. Unless we aggressively reshape the underlying organizational culture, the reorganization proposal would simply fall into the same old trap. This is precisely the lesson of reengineering and reinvention in the nation’s most successful public organizations and private corporations.

The existing culture within DOE’s field operations grows from fifty years of experience rooted in the Manhattan Project. To protect the nation’s first nuclear bombs from enemy attack, strategists scattered research and production facilities throughout the nation. To ensure that no one had critical information about the overall plan, the Project’s managers focused workers independently on narrow projects. And to gear up the process quickly, the Project relied almost exclusively on government-owned, contractor-operated (GOCO) facilities.

With the end of the Cold War came two dramatic changes in DOE’s operations: a desire for more-open scientific exchange in the national labs; and the need to clean up the by-products of a half-century’s nuclear weapons production. DOE found itself with these new missions but also with an old, even dysfunctional structure. The result was double trouble: organizational structures that did not support new missions, and disparate organizations cobbled together from existing components. The result? Precisely the patterns we have already observed:

· National security problems born out of the self-governing autonomy of field (usually non-governmental) employees;

· Management problems in the waste storage and environmental remediation programs;

· Difficulty of top managers in gaining control of field operations.

The cause: Headquarters officials had great difficulty in transforming the half-century-old culture that once made the American nuclear-weapons program the keystone of the nation’s defense but which now fits new missions poorly. The current spy scandal is the product of 50 years of decisions about DOE’s structure and operations. Separating nuclear-related activities into a quasi-independent agency would further worsen the fit between the department’s missions, its culture, and its structure.

This is the key problem. We ought to focus our efforts on solving it. The experience of the best public and private organizations teaches an important lesson: Reorganization, in itself, never does the job. Reengineering large organizations begins with top officials who redefine what they want the organization to look like; who then walk the talk; and who use the tools at their disposal to transform the organization. Restructuring can sometimes be an important tool. But it can never be the only—or even the principal—tool. To focus on reorganization as the first step is to court failure.

The core DOE problem is changing the culture of field operations. If we seek to solve problems simply by restructuring headquarters, we will fail to solve the problem and will only encourage the dysfunctional culture to continue.

We Need to Understand that DOE Does Have a Coordination Problem—But It’s Vertical, Not Horizontal

The proposal for an agency for nuclear stewardship operates under an implicit assumption: There are problems with the nuclear weapons/national laboratories programs that can best be solved through horizontal coordination—pulling all related national-security functions together into one headquarters office and giving a single person responsibility for managing them.

DOE’s fundamental problems, however, are vertical: ensuring that the department’s vast network of private contractors and relatively autonomous research laboratories (acting from below) consistently follow national policy (set from above). In fact, according to GAO estimates, contractors are responsible for about 90 percent of DOE’s work. The evidence suggests that the national-security problems grew out of the locally defined, professionally dominated culture of the research labs. This culture put emphasis on research-driven free exchange of information, at the cost of national security.

Concentrating all DOE activities in a new semi-autonomous agency has a double risk. It risks recreating DOE’s problems and burying them at a lower level of the bureaucracy. And it risks focusing attention on national security to the exclusion of the Department’s mission. DOE must guarantee the nation’s nuclear secrets. But to do so effectively, top officials must weave high concern for national security into everything that DOE does, not simply restructure headquarters to make national security a higher priority.

Indeed, this is precisely the lesson that the Challenger disaster teaches. Following that tragedy, NASA did not make safety the central organizational scheme at headquarters. Rather, NASA officials made safety the #1 priority for everything that NASA did. It became the way that NASA conducted its business; it was not the business NASA was in.

DOE needs to solve the right problem. It needs to make national security the #1 priority for everything it does. The recent problems with the national laboratories reflect broad, recurring, and deeply rooted problems in the department’s operations. DOE officials have struggled for years to encourage the contractors and the labs to act consistently with national policy, as reports over the years by the General Accounting Office have shown.

Restructuring national security operations at headquarters can be an important first step in making national security the Department’s top priority. However, the missing link in the restructuring proposals is connection link between headquarters and the Department’s field operations, and especially the link between DOE and its contractor network. The national security problem simply cannot be solved without building that link.

The protection of national security needs to be job #1 at DOE. But the only way to make that happen is to work at headquarters to change behavior in the field. The restructuring will fail if this does not happen—and none of the restructuring proposals have yet tackled that problem.

We Need to Understand that a Single-Minded Focus on National Security Could Weaken the Department’s Environmental, Safety, and Health Protection Missions

Fifty years of nuclear weapons production has left behind an environmental legacy that will take decades to clean up. DOE has already had difficulty coordinating its environmental, safety, and health protection units with its production and research operations. National security is of unquestioned importance. But it is not the only goal that DOE must seek. That is especially true for those who live near contaminated and dangerous facilities in the DOE weapons complex.

Restructuring the DOE nuclear weapons complex at headquarters not only raises problems of linkage with the field. It also raises questions about how DOE will link the national-security-oriented missions with the environment, safety, and health protection missions. The restructuring proposals would create high walls—figuratively and symbolically—around the nuclear operations; the latter requires substantial communication among the components. That is especially true if DOE is to build the requisite trust and confidence in citizens and its partners in state and local governments.

DOE’s most difficult problem is tackling new missions with old systems. Its new missions are fundamentally different from the old: conducting nuclear research in the post-cold-war world, at a time when exchange of scientific ideas has become much more important; and the shift from nuclear weapons production.

National security is absolutely central to DOE’s mission. However, national security is not what DOE does—it is how it must do it.

For any organization, public or private, to be successful, its structure needs to support its mission. DOE’s structure needs to be constructed to promote its core missions. The proposed restructuring does not define sharply or reckon with DOE’s reinvented missions. It does not enhance DOE’s capacity to achieve these missions. In fact, it simply recreates much of DOE’s existing operations in a subunit, buries the units responsible for the success of the new missions, and fails to connect headquarters more effectively with the field. The proposals lower, not raise, the role of the units responsible for the department’s 21st-century mission.

In fact, DOE’s emerging role is the integration of national security with its enduring missions:

· environmental cleanup

· safe storage of nuclear materials

· maintenance of the nuclear arsenal

· scientific research

DOE needs to do so in a way that enhances the trust and confidence of citizens and its partners in state and local governments.

DOE’s success requires breaking down the vertical silos built over 50 years of history. It requires replacing them with new, horizontal coordination. And it requires action in Washington to ensure that this coordination happens. The proposed independent agency, by reinventing vertical silos in Washington, would make it harder to ensure coordination between Washington and the field. Restructuring headquarters in the pursuit of one aim—no matter how important, like national security—would make it far more difficult to ensure that other mission-critical goals were accomplished as well.

Citizen groups around the country have already voiced grave concern about vesting the agency that created the radioactive waste with the responsibility for cleaning it up. For more than a decade, these groups have complained bitterly that the department has not treated the remediation issues seriously. The department faces daunting challenges for cleaning up the nuclear legacy—and for devising a plan for the safe long-term storage of radioactive wastes. DOE has already been criticized for paying insufficient attention to these critical cross-cutting issues.

These problems would be significant in a new quasi-independent agency within DOE. The problems would be greatly magnified if an agency were created outside DOE, for that would vastly multiply the problems of coordinating the nuclear functions with the closely related research, environment, health, and safety missions.

The various restructuring plans could bury responsibility for solving them even more deeply in the DOE bureaucracy—or push responsibility outside DOE and far away from closely related missions. This could weaken the coordination among the various components and make it far more difficult for DOE to manage its core functions—especially environmental, safety, and health protection, which require strong partnerships with communities around the nation.

We Need to Ensure that Restructuring Increases Accountability

The most fundamental principle of management is to define an organization’s job clearly and then hold the organization’s manager accountable for getting the job done. The restructuring plans are unclear about who will be responsible for what, and that could seriously confuse accountability for results.

The plan to create a new Under Secretary within DOE to manage nuclear operations is unclear about the division of responsibility for basic policy, security, counterintelligence, and other key functions. Some restructuring plans would place virtually all responsibility in the hands of the Under Secretary, without clear accountability to the Secretary.

The firmly established tradition in American public management, supported by a score of blue-ribbon commissions throughout the 20th century, vests clear responsibility in the cabinet Secretary. Putting an Under Secretary in a position of side-stepping the Secretary could only create uncertainty about accountability. Framing responsibilities in a way that makes it hard to tell who is responsible for what would surely make things even worse. Paul Light’s thorough research shows quite clearly that increasing the layers within the bureaucracy multiplies the problems of management and accountability. The goal of any restructuring ought to be to streamline the DOE bureaucracy and dramatically reduce the number of layers from top to bottom.

GAO has found that DOE already suffers from serious accountability problems. As its January 1999 report on the department’s performance and accountability concludes, "DOE’s ineffective organizational structure blurs accountability, allowing problems to go undetected and remain uncorrected"(p. 7). The last thing DOE needs is a "reform" that makes this problem worse.

The proposal to create a separate, independent Agency would solve the accountability problem: the Agency’s administrator would have clear responsibility for the nuclear complex. It would, however, vastly increase the problems of coordinating the nuclear operations with the research, health, safety, and environmental missions. It would thus gain added accountability at an unacceptable cost in effectiveness.

The proposals for a separate office are unclear about who is responsible for what. That risks muddying accountability for the very problems they seek to solve.

We Need to Find the Right Model to Guide DOE’s Restructuring

Reformers have pointed to other federal agencies as models for DOE’s restructuring. The models have ranged from the Bureau of Land Management and the National Weather Service. The idea is to create a quasi-independent unit with clear responsibilities yet with operating independence from their home departments.

These are poor models, however, for several reasons. First, their missions are fundamentally different. DOE deals with nuclear materials, which inherently carry higher risk than either land management or weather forecasting. Second, DOE relies almost completely on contractors to perform its work. The lessons of BLM or NWS do not apply to DOE.

A far better model is NASA. Its high-risk, technology-intensive, contractor-dependent operations are similar to DOE. To attack these problems, its managers have led one of the most aggressive reinventions throughout the federal government. In the wake of the Challenger disaster, NASA officials put safety at the core of everything that NASA does—it was not what NASA did; it was how NASA did it.

NASA, for example, now requires its field offices ensure that contractors meet ISO 9000 quality standards. NASA headquarters assesses the management processes of its field offices through ISO 9000-drive internal audits. It is now developing financial management and performance assessment systems to ensure accountability. Although the new systems are not yet all in place, they provide a guide about how a contractor-dependent, high-tech government agency can transform its operations.

In short, top NASA officials redefined the agency’s culture and insisted that its workers—both government employees and contractors—make safety the watchword. In the process, NASA fundamentally redefined the relationship between its headquarters and its field operations, including the Jet Propulsion Laboratory (a government-owned/contractor-operated facility, like many of DOE’s facilities).

NASA has shown that a performance-driven system can transform the culture of a contractor-dependent agency. Reformers should look there for counsel in restructuring DOE. They should be very careful about choosing the wrong models, which could lead to dangerous prescriptions.

Conclusion

The proposal for a quasi-independent Agency for nuclear stewardship focuses on precisely the right issue: improving national security in the nation’s nuclear complex. However, it misdiagnoses the problem. It could well make the real problem worse. It fails to strengthen DOE’s links to its field operations and misses the critical imperative to redefine DOE’s culture. It fails to focus on improving DOE’s capacity to pursue its 21st century missions.

DOE needs to work aggressively to improve its operations. DOE’s restructuring ought to be comprehensive, but it ought to focus on improving the Department’s capacity to accomplish its mission and to streamline its accountability.

We need to begin by ensuring that we identify the right problem—and devising a workable strategy to solve it.

Donald F. Kettl

Donald F. Kettl is Professor of Public Affairs and Political Science at the Robert M. La Follette Institute of Public Affairs at the University of Wisconsin-Madison. He is also Nonresident Senior Fellow in Washington’s Brookings Institution. Kettl recently chaired the Wisconsin Governor’s Blue Ribbon Commission on Campaign Finance Reform.

Professor Kettl is a student of public policy and public management, specializing in the design and performance of public organizations. He has appeared on national television on shows ranging from Good Morning America and the CBS Evening News to The MacNeil-Lehrer News Hour, and on talk radio shows around the country. He has testified frequently at congressional hearings in Washington and contributed to op-ed pages in major newspapers, including The New York Times, The Chicago Tribune, and The Los Angeles Times. He also contributes a regular column to Governing magazine, "Potomac Chronicles," which is read by leading state and local government officials around the country.

Professor Kettl is the author or editor of a dozen books and monographs, including:

Reinventing Government: A Fifth-Year Report Card (Brookings, 1998)

Civil Service Reform: Building a Government that Works (with Patricia Ingraham, Ronald Sanders, and Constance Horner; Brookings, 1996)

The Politics of the Administrative Process, 2nd ed. with James W. Fesler (Chatham House, 1996).

Inside the Reinvention Machine: Appraising the National Performance Review, edited with John J. DiIulio, Jr. (Brookings, 1995)

Improving Government Performance: An Owner's Manual, with John J. DiIulio, Jr., and Gerald Garvey (Brookings, 1993)

Sharing Power: Public Governance and Private Markets (Brookings, 1993)

Deficit Politics (Macmillan, 1992)

Government by Proxy (Congressional Quarterly Press, 1988)

He is the author of the widely cited Brookings Center for Public Management report, Reinventing Government? Appraising the National Performance Review (1994). He is the co-author of the Brookings reports, Cutting Government and Fine Print: The Contract with America, Devolution, and the Administrative Realities of American Federalism (1995). He has also published widely in professional journals.

He has consulted for a broad array of public organizations, including the U.S. Departments of Defense, Energy, Labor, Health and Human Services, and Treasury; the Forest Service, the U.S. House of Representatives Committee on the Budget, the Food and Drug Administration, the Federal National Mortgage Association, the Securities and Exchange Commission, the National Commission on the Public Service (Volcker Commission), and the National Commission the State and Local Public Service (Winter Commission).

Prior to his appointment at the University of Wisconsin, Professor Kettl taught at Vanderbilt University, the University of Virginia, and Columbia University. Professor Kettl has earned his bachelor's and doctorate degrees from Yale University. He is a fellow of Phi Beta Kappa and the National Academy of Public Administration.