Written Testimony of Dr. Charles V. Shank
Lawrence Berkeley National Laboratory

before the

House Science Committee
Subcommittees on Basic Research and
Energy and Environment
Wednesday, September 23, 1998

Mr. Chairman and members of the Subcommittee, it is a pleasure to testify today about the improvements in the efficient operation of the Lawrence Berkeley National Laboratory since the Galvin Report was issued in 1995. Just to reacquaint you, Berkeley Lab is the oldest of the DOE national laboratories, founded in 1931 and located next door to the University of California, Berkeley campus. Today we operate on a budget of approximately $340 million performing research for the Department of Energy (DOE), other Federal agencies and the private sector.

The Galvin Report found DOE and its laboratory system locked in an unproductive bureaucratic logjam. I am here today to report that significant progress has been achieved which has had an important impact on our productivity. I would like to credit DOE for real and meaningful progress in managing its laboratories more effectively. In addition, I am very appreciative of the contributions of the Laboratory Operations Board, particularly the external members of the Board.

New Operating Principles

We began making key steps toward improving productivity even while the Galvin Report was being finalized. Our first action was to work with our DOE Oakland Operations Office (DOE-OAK) to establish an atmosphere of trust based upon a set of mutually agreed upon operating principles. Working together we developed seven principles which have allowed us to improve the way we conduct business and to eliminate costly administrative systems, unnecessary prescriptive oversight, and the diffusion of responsibility characteristic of bureaucracies. We launched a new era based on mutual trust in order to take unnecessary work out of the system, while making sure that we are good stewards of the taxpayers’ dollars. The principles were adopted in March 1995 with the signatures of DOE-OAK Manager James Turner and myself, and they have guided what has developed into a very positive working relationship since that time. We published the principles in our Lab newspaper and made cards and posters that were distributed to employees at both the Lab and at DOE.

The growing level of trust and mutual respect between our two institutions has resulted in very positive results that have saved the nation’s taxpayers many millions of dollars. One example was the help we received from DOE’s Oakland office to gain access to low-cost Federal power from the Western Area Power Administration, saving $2.85 million since 1995.  DOE-OAK supported our development of an efficient risk-based procurement system to cut red tape, reduce cost and expedite purchases. The system is used in over half of our low-value procurements, resulting in more than $500,000 in administrative savings in FY 1998 alone. In FY 1997, DOE-OAK helped us overcome many administrative obstacles to accelerate the leasing process for new space for the rapidly growing human genome program, an activity that would have been difficult or impossible in the pre-Galvin era.

Our new working relationship has also improved our operating activities, and has lead to the implementation of the Integrated Safety Management Program and Work Smart Standards Program, the Nuclear Regulatory Commission Pilot program, and more effective contract management. We have implemented better and smarter safety management and environment health and safety programs that have retained the lab’s high standards in this area while reducing unnecessary ES&H expenditures. We have reduced the traditional, costly, large staffing scheme at DOE sites that entails "Checkers-checking-Checkers-checking-Checkers." We worked with DOE to achieve cost efficiencies in their program for implementing the National Environmental Policy Act, significantly reducing the number of steps and the amount of paperwork passed from office to office, while maintaining high standards of review. We also improved our quality and cost effectiveness through competitively procuring services to improve environment, health and safety performance, including waste disposal, analytical services, personnel protective equipment, and new safety training programs.

Significant Progress in Cost Effectiveness

One element of our cost savings has been the outsourcing of selected support functions to produce overhead savings. Berkeley Lab has completely or partially outsourced more than 25 functions, including security, travel, and mail services, training, equipment maintenance, telephone installation and vegetation management. We eliminated our printing plant and central photographic processing facility and closed those shop fabrication activities that could be conducted by local companies. These latter steps also reduced sources of waste, with attendant cost savings in waste management. The combined effort in streamlining, outsourcing, and administrative systems updating resulted in a reduction in our composite overhead rate of 17 percent.

The collective effects of these dramatic changes have significantly reduced our operating costs, and allowed us to deliver more research for every dollar invested in our lab. Our streamlined support services allowed an 18 percent reduction in personnel supported by our overhead budget. This means an increase in the ratio of scientific staff to research support staff from 2.0 scientists per support staff in FY 1995 to 2.3 scientists per support staff in FY 1998.

Reinvestment and Maintaining Assets

As I mentioned earlier, we are the oldest of the DOE labs, so we have the oldest site with many maintenance needs. One of the more exciting results of our efficiency initiatives is that even while we have been reducing overhead, we have also increased our investment in infrastructure improvements at Berkeley Lab. We improved our physical plant, focusing on critical maintenance issues. One key result of this effort has been a 50 percent reduction in the annual backlog of plant maintenance work, and a corresponding reduction in demands for future infrastructure projects, as is shown below.

We are now improving the life-cycle costs and lifetimes of all of our buildings, through replacement of roofing systems, air handling, heating and ventilation systems as required, and installation of automated energy monitoring and management systems. We are also outsourcing vehicle fleet maintenance, renting rather than acquiring heavy equipment, and reducing inventories. Thus, Berkeley Lab has been able to put more maintenance resources into our facilities infrastructure and also accomplish more with each dollar.

Sustained Management Reform

An important reform in the way the Department manages its national laboratories has been realized through the Laboratory Operations Board. I was privileged to serve as an ex-officio member of that panel. I found it valuable to have all the DOE senior management considering important Departmental issues around one table, with the participation of external members from industry, universities and government laboratories. The Board began to undertake a series of reviews directed at improved management and served as a very critical sounding board for policies or activities that would impact the Laboratories. During its first several years, the Board was co-chaired by Under Secretary Charles Curtis and John McTague. It successfully supported the reduction in burdensome DOE Orders and stopped misguided attempts to saddle the Laboratories with unnecessary centralized directives. One of the burdensome efforts stopped by the Board was a bureaucratic attempt to combine the management of administrative and scientific computing resources in DOE -- this would have crippled DOE’s leadership in scientific computing through controls that had no value for a scientific program.

This year, issues reviewed by the Board have included: DOE’s scientific merit review processes, performance benchmarking and deployment of productivity metrics, streamlining reporting requirements, a mission review of the smaller laboratories, an assessment of technical manager positions, and discussions on contracting policies and practices. The Board’s concern over management issues has maintained an environment that encourages the cost and programmatic efficiencies that I have discussed. It has led to better, more comprehensive decision making in the Department, and has helped move DOE away from so-called stovepipe management and towards programmatic and institutional management. The Board is now co-chaired by Under Secretary Ernest Moniz and Dr. McTague, who continue the efforts at reform and the development of a more systemic framework for the national laboratories.

By embracing the concept of a system of laboratories and conducting research competitively through performers that have the primary competency, DOE is making more effective use of its national laboratories. A good example is DOE’s Joint Genome Institute, a partnership between us, Livermore and Los Alamos National Laboratories. The partnership is on track for exceeding its FY 1998 DOE sequencing target, established last year, of 20 million base-pairs. We are also responsible for building the front-end accelerator for the new Spallation Neutron Source to be built at Oak Ridge National Laboratory. Berkeley Lab’s role in this project stems from its expertise in ion sources and rf (radiofrequency) power supplies and other accelerator systems. In partnership with the Stanford Linear Accelerator Center and the Lawrence Livermore National Laboratory we are working towards completion of the B-Factory project and the commencement of an experimental program next year. With our expertise in synchrotron accelerators, we have completed the design and fabrication of the B-Factory’s Low Energy Ring, which is now undergoing commissioning. Similarly, we are building an accelerator for a stockpile stewardship project at the Los Alamos National Laboratory. This accelerator for the Dual Axis Radiographic Hydrodynamic Test Facility is based on the induction-linac concept developed at Berkeley Lab over the past 15 years funded by DOE’s inertial fusion energy science program. The advancement in accelerator design from this challenging project will demonstrate how Energy Research expertise can benefit Defense Programs. Also, a very important consequence will be the benefit of increasing DOE expertise in induction accelerators that can serve as drivers for a future civilian fusion energy research program.

In each of these projects, DOE is taking advantage of the unique strengths and capabilities of each institution. This is a far more efficient process than building up new teams at each site for each new project. It does require trust between the participating institutions that they will devote the necessary resources to successfully complete their portion of the project.

The reforms at DOE have been addressing findings that Bob Galvin reported in 1995. We are working in greater partnership among the Laboratories and with DOE to insure that our laboratories remain focused on their missions, maintain their core competencies and infrastructure, and conduct their business in a cost effective manner. We are basing our relationships on new and sound operating principles, and we are achieving continuous improvements as I have related in this testimony.

Finally, I want to make a request of the members of this Committee. You have been very supportive over the years of the science performed by the Department at its national laboratories, and of efforts we have jointly made to improve the way we do business. We have been successful in both endeavors, and I urge your continued support.

Thank you.