Detailed Information on the
National Nuclear Security Administration: Naval Reactors Assessment

Reducing the Annual Naval Reactors complex-wide aggregate Facility Condition Index to 4%, as measured by deferred maintenance per replacement plant value for all program facilities and infrastructure.

Implementing efficiencies made possible by the consolidation of the Program's laboratory operation under a single Management and Operations contract.

Establishing new performance goals to assess the condition of Naval Reactor facilities.

Formalizing the process of obtaining certification of performance results by senior management

Measure: Cumulative miles steamed, in millions, of safe, reliable, militarily effective nuclear propulsion plant operation supporting National security requirements.

Explanation:

Measure: Annual Naval Reactors complex-wide aggregate Facility Condition Index, as measured by deferred maintenance per replacement plant value for all program facilities and infrastructure.

Explanation:

Measure: Cumulative percentage of completion on the next-generation aircraft carrier reactor plant design.

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Measure: Annual percentage of Program operations that have no adverse impact on human health or the quality of the environment.

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Measure: Cumulative percentage of completion on the Transformational Technology Core (TTC) reactor plant core fuel design.

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Measure: Annual utilization factor for operation of test reactor plants.

Explanation:

Is the program purpose clear?

Explanation: The program has a clear purpose which is to provide the U. S. Navy with safe, militarily effective nuclear propulsion plants and ensure their continued safe and reliable operation. The Program ensures the safe operation of reactor plants in operating nuclear-powered submarines and aircraft carriers (constituting 40 percent of the Navy's combatants), and fulfills the Navy's requirements for new nuclear propulsion plants that meet current and future national defense requirements for new nuclear propulsion plants.

Evidence: NNSA Strategic Plan, FY 2006 Budget, Presidential Executive Order 12344, Public Law 98-525, and Public Law 106-65

Does the program address a specific and existing problem, interest, or need?

Explanation: The program addresses a specific need for the United States Navy. Presidential Executive Order 12344 and Public Law 106-65 set forth the total responsibility of Naval Reactors for all aspects of the Navy's nuclear propulsion, including research, design, construction, testing, operation, maintenance, and the ultimate disposal of Naval nuclear propulsion plants.

Evidence: Presidential Executive Order 12344, Public Law 98-525, and Public Law 106-65

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The program is not redundant or duplicative of any other efforts. Naval Reactors has sole responsibility for all aspects of the Navy's nuclear propulsion. The responsibility begins with reactor technology development, continues through reactor operation, and ends with reactor plant disposal. The Program ensures the safe operation of reactor plants in operating nuclear-powered submarines and aircraft carriers (constituting 40 percent of the Navy's combatants), and fulfills the Navy's requirements for new nuclear propulsion plants that meet current and future national defense requirements.

Evidence: Presidential Executive Order 12344, Public Law 98-525, and Public Law 106-65

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The Naval Reactors program design is free of flaws that would limit effectiveness or efficiency. The Naval Reactors program has been the hallmark of excellence for over 50 years. Naval Reactors Headquarters provides oversight and direction for all elements of Program work. Due to the critical nature of nuclear technology, a dedicated Government headquarters professional staff expert in nuclear technology makes all major technical decisions regarding design, procurement, operations, maintenance, training, and logistics. Headquarters engineers set standards and specifications for all Naval Nuclear Propulsion Program work, while on-site headquarters representatives monitor the work at the laboratories, prototypes, shipyards, and prime contractors.

Evidence: Presidential Executive Order 12344, Public Law 98-525, and Public Law 106-65

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: Naval Reactors has a focused multi-year planning process, reviewed semiannually by the leading experts in naval nuclear propulsion. Naval Reactors' comprehensive multi-year planning process requires all Program activities to clearly identify performance indicators to ensure the Program continually meets or exceeds performance goals and to ensure that resources are effectively targeted to meet or exceed beneficiaries and customer requirements.

Evidence: Seven year technical work plans, Naval Reactors Technical/Budget Plan, and Naval Reactors Program Planning Guidance

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: Naval Reactors has a limited number of specific long-term performance measures that meaningfully assess progress in achieving program purpose. They are to safely steam approximately 2 million miles annually, totaling 150 million miles in nuclear-powered ships in program history by 2015; to provide the reactor plant for the next generation aircraft carrier by 2015; and to deliver the first Transformational Technology Core by 2015

Evidence: FY2004 Program Planning Guidance (PPG), semiannual Naval Reactors Technical/Budget Plans, FY 2004 U.S. DOE Performance and Accountability Report, FY2006 Congressional Budget, NNSA Strategic Plan

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: Naval Reactors long-term measures are ambitious yet achievable. The amount of miles steamed per year by nuclear powered ships is affected by many factors. The most important factor that is managed by the Naval Reactors program is the operability of the power plants on each of our vessels. Additionally, the program utilizes state of the art technology in the development of new reactor plants. The design of leading edge technology, including the new VIRGINIA Class submarine as well as the new aircraft carrier and TTC cores, requires keen foresight and the ability to manage the unpredictable.

Evidence: FY2004 Program Planning Guidance (PPG), semiannual Naval Reactors Technical/Budget Plans, FY 2004 U.S. DOE Performance and Accountability Report, Individual project plans, Prototype schedules, ship schedules

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: Naval Reactors has a limited number of annual performance measures that have been identified to ensure progress is made for achieving the long-term goals outlined above. For FY 2007 these measures include: safely steam approximately 2 million miles annually totaling 136 million miles in nuclear-powered ships in program history; achieve a utilization factor of at least 90% for operation of test reactor plants; complete 80% of the next-generation aircraft carrier reactor plant design; complete 46% of the Transformational Technology Core reactor plant design; and ensure 100% of operations have no adverse impact on human health or the quality of the environment.

Evidence: FY2004 Program Planning Guidance (PPG); FY 2006 DOE Congressional Budget, FY 2004 U.S. DOE Performance and Accountability Report.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: Naval Reactors annual performance measures are ambitious yet achievable. Detailed technical milestones and deliverable schedules/baselines are used to manage day-to-day work that builds up to each annual target including 90% utilization of test reactor plants, and ensuring that Program operations have no adverse impact on human health or the quality of the environment.

Evidence: FY2004 Program Planning Guidance (PPG), semiannual Naval Reactors Technical/Budget Plans, FY 2004 U.S. DOE Performance and Accountability Report, FY2006 Congressional Budget, Propulsion Plant Planning Estimates

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: Naval Reactors ensures that contractors support program planning efforts by committing to annual and long-term goals. Naval Reactors provides annual guidance to the laboratories via our Program Planning Guidance (PPG). The PPG provides the Naval Reactors Program with strategic planning, budgeting, and work management direction by identifying objectives, priorities, and plans. In addition, Program contractors provide quarterly progress reports that update Naval Reactors Headquarters on the status of annual and long-term performance measures. Goals of the Naval Reactors Program are supported by both the Department of Energy as well as the Department of the Navy. The Program ensures that the needs of the fleet are supported by both departments on a daily basis.

Evidence: FY2004 Program Planning Guidance (PPG), semiannual Naval Reactors Technical/Budget Plan, Technical Work Programs, Technical Letters

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Executive Order No. 12344, statutorily prescribed by Public Law 98-525 (42 U.S.C. 7158, note) and Public Law 106-65 (50 U.S.C. 2406), governs the Naval Nuclear Propulsion Program and provides NR sole oversight authority to include security, nuclear safeguards and transportation, public information, procurement, logistics and financial management. NR performs numerous internal independent evaluations in accordance with Program policy and DOE guidelines to ensure effectiveness and efficiency in our work, and in addressing deficiencies. These evaluations include NR Field Office Audits and several annual Program-wide policy reviews. The timing of input often coincides with yearly budget submittals to ensure up-to-date and accurate information is submitted. Additionally, the Naval Reactors laboratories perform audits on each other per IG direction.

Evidence: Management Controls Systems Review; NR Field Office Audits; DOE IG Audits; Internal Laboratory Audits; IG field Audits

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: Naval Reactors budget requests are explicitly tied to accomplishment of performance measures and needs are presented in a complete and transparent manner. Twice annually, NR conducts internal budget assessments that ensure technical work programs are operating efficiently and within tolerances. Lower priority technical efforts are excised and their funding is redirected towards critical operations. The biannual review of Program budget requirements and funding allocations ensures the budget process remains a responsive and effective tool for achieving Program goals. Between these reviews Naval Reactors is constantly monitoring execution to ensure the effectiveness of the plans provided. Additionally, specific audits conducted in recent years by DOE OIG to GAO standards fully affirmed the NR budgeting process and internal controls. Finally, NR Field Offices provide an on-site perspective as the eyes and ears of Naval Reactors Headquarters at the laboratories.

Evidence: Budget submittals, NR Plan Review, NR Confirmation Response letter

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The Program evaluates any strategic planning deficiencies through a semiannual review process and the Program Planning Guidance that reviews performance goals for the current year and the next five years. Naval Reactors has a quarterly report on performance measures, as well as an annual review of performance goals and semiannual review of technical and funding plans. By having the technical work plan review process, Naval Reactors is able to judge the performance of the long-term goals. Annually, NR conducts a management controls audit as required by the Federal Managers' Financial Integrity Act (FMFIA) to review the Program for financial, contractual or programmatic vulnerabilities. A determination is made as to the adequacy of administrative and accounting procedures at Headquarters, shipyards, and field offices and the report is submitted to NNSA and DOE. Additionally, the program is elevating a facility condition index (FCI) performance measure to the PART/budget level to provide a better assessment of overall NR facility planning, maintenance, and modernization.

Evidence: FY2004 Program Planning Guidance (PPG), semiannual Naval Reactors Technical/Budget Plan, Federal Managers Financial Integrity Audit

If applicable, does the program assess and compare the potential benefits of efforts within the program and (if relevant) to other efforts in other programs that have similar goals?

Explanation: NA, Naval Reactors is a unique program with unique goals because of our sole responsibility for all aspects of naval nuclear propulsion. However, we pay close attention to what other nuclear oriented organizations do, and share our work appropriately, within the bounds of classification: we have a classified review of each new core design with NRC before its operation; we stay abreast on reactor design efforts in the rest of the country, including those related to next-generation reactors, we note that these are paper efforts. Neither NRC nor NE is responsible for, designs, or builds reactor cores. NR is the only U. S. Government agency that designs and builds reactor cores and plants. Further, no commercial company has built a reactor plant in the last 25 years. Additionally, the functional requirements to which we must design differ significantly from those of commercial reactors. Our functional requirements differ significantly in the following areas: shock, size, maneuverability, closed environment, reliability, maintainability, and noise.

Evidence: Presidential Executive Order 12344, Public Law 98-525, Public Law 106-65

Does the program use a prioritization process to guide budget requests and funding decisions?

Explanation: Naval Reactors annually publishes Program Planning Guidance (PPG), which describes efforts that will support our annual performance goals. The PPG is executed using Naval Reactors technical/budget planning (NRTBP) system, which facilitates planning, financial coordination, and near term work control among Naval Reactors' prime contractors. The Naval Reactors planning cycle consists of semi-annual NRTBP budget confirmations and annual Naval Reactors' response to the Laboratory Technical Work Plans. During the biannual NRTBP process, Naval Reactors reviews all program work and ensures that the highest priority work is funded and executed within a given year. Priorities follow guidance outlined in the PPG. Budget requests are formulated using the most up to date Program requirements, as agreed upon by the financial and technical communities during the NRTBP process. These various processes prioritize Naval Reactors work which guides budget requests and funding decisions.

Evidence: FY2004 Program Planning Guidance (PPG) and semiannual Naval Reactors Technical/Budget Plan

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Naval Reactors collects timely and credible performance information and uses it to manage our program and improve performance. Both technical and financial managers review monthly execution reports. Areas showing the potential to lag in either technical performance are quickly identified via these monthly reports and actions are taken to correct them. In addition, videoconferences are held between Naval Reactors Headquarters, Program Field Offices, and the Program's Prime Contractors every other month to discuss financial and technical performance, discuss execution, highlight potential issues, and make corrective actions to ensure the Program maximizes performance.

Evidence: Naval Reactors Technical/Budget Plan, Naval Reactors Monthly Financial Family of Reports, Family of Reports Videoconferences, Field Office Quarterly Reports

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Naval Reactors Federal managers and program partners in the field are held accountable for cost, schedule, and performance results. Naval Reactors Headquarters is divided into 26 technical sections whose responsibilities cover all aspects of nuclear propulsion. Each section annually reviews the work deliverables they are accountable for and receives the approval of the Program Director for these deliverables. Headquarters' section managers are held personally responsible for cost, schedule, and performance results of these deliverables. In addition to the Federal managers located at Naval Reactors Headquarters, technical managers at the Program's Prime Contractors report directly to Federal managers and ensure that the deliverables are delivered on time and on schedule. Additional federal oversight is provided at the Program's field offices. The federal managers at the laboratories have direct contact with the Program's contractors and are able to visually oversee daily program operations and monitor progress.

Evidence: U.S. Department of Energy's Performance and Accountability Report FY2004, Naval Reactors Sections' Annual Technical Work Plans, Naval Reactors Monthly Financial Family of Reports, Technical Planning Estimates, NR2000 Database Special Schedules

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Naval Reactors funds are obligated in a timely manner and spent for the intended purpose. The Program's obligation rates consistently exceed DOE performance goals. Semiannual review of long-range budget plans and current-year funding ensures funds are obligated for their intended purpose and in a timely manner, where there is a minimal amount of unobligated funds remaining at the end of the fiscal year. Additionally, a robust audit plan ensures funds are expended for their intended purpose even after they have been obligated.

Evidence: Naval Reactors Technical/Budget Plan, Naval Reactors Procurement Memorandum, NR AFP Input, NR Family of Reports

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: Naval Reactors has procedures to measure and achieve efficiencies and cost effectiveness in program execution. In accordance with the Make-or-Buy-Plan clause contained in their contracts, the Program's management and operating prime contractors are required to annually review their "core competencies" to assure that they are maximizing outsourcing opportunities while minimizing cost to the Government. The Plan and all of its updates are then critically reviewed and approved by Program officials. These procedures help the program to measure and achieve efficiencies and cost effectiveness in execution. In addition several of our DOE performance measures monitor program efficiencies: Annual utilization factor for operation of test reactor plants, and the cumulative percentage of completion on the Transformational Technology Core (TTC) reactor plant design as well as the next generation aircrafter carrier reactor plant design. Efficiencies of the operating fleet are increased when new reactor designs are deployed.

Evidence: Make-or-Buy-Plan clause contained in prime contracts

Does the program collaborate and coordinate effectively with related programs?

Explanation: Although Naval Reactors is a unique program with unique goals because of our sole responsibility for all aspects of naval nuclear propulsion, Naval Reactors collaborates and coordinates effectively with related programs where applicable. We pay close attention to what other nuclear oriented organizations do, and share our work appropriately, within the bounds of classification: we have a classified review of each new core design with NRC before its operation; we stay abreast on reactor design efforts in the rest of the country, including those related to next-generation reactors, we note that these are paper efforts. Additionally, knowledge gained from research conducted at various U. S. universities is shared between both our organization and the respective university. Also, Naval Reactors and other organizational elements of the U. S. Navy are in close contact to identify projected needs and force levels for the U. S. nuclear fleet. The Navy's vision for the future directly affects the research and development work conducted today ensure this vision becomes a reality.

Evidence: Presidential Executive Order 12344, Public Law 98-525, and Public Law 106-65

Does the program use strong financial management practices?

Explanation: Naval Reactors uses strong financial management practices. We have a fully integrated technical planning, budgeting and control process. Hallmarks of this process include a biannual long range technical planning and budgeting process, approval and control of work at the detailed annual work plan level, periodic technical and administrative reports, well established approval and control systems, and a robust audit and appraisal program. Through this process, NR exercises central control over all program work. On-site NR representatives serve as the "eyes and ears" of NR headquarters and ensure the integrity of the process. The IG does a Tri-ennial review of statement of costs incurred at both NR field offices and both were approved without any findings

Evidence: Since 1996, the DOE IG has performed two full scope audits of NR year-end financial statements. The 2001 audit reviewed internal controls, uncosted obligations, procurement process, budget process, revenue process, environmental liabilities, and nuclear material inventories. In all cases, the IG noted no exceptions, no findings and no identifiable weaknesses.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: Naval Reactors takes meaningful steps to address its management deficiencies. The Naval Reactors Program is constantly assessing contractor operations through audits, appraisals, performance reviews, daily interaction between contractor and on-site NR representatives, and review of contractor proposals. This process provides assurance, although not absolute, that management control practices and procedures are in place and effective.

Evidence: Audit reports and appraisals

For R&D programs other than competitive grants programs, does the program allocate funds and use management processes that maintain program quality?

Explanation: Naval Reactors has a fully integrated long range planning, budgeting and execution system that allocates funds and uses management processes that maintain program quality. Through this system Naval Reactors determines general work direction and associated funding needs, balances competing work priorities against available funds and establishes, monitors and enforces performance measures and controls. Work and funding priorities are established in relation to core mission. This information is used to develop our budget requests.

Evidence: Semiannual Naval Reactors Technical/Budget Plan

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: Naval Reactors consistently demonstrates progress in achieving its long-term performance goals. The Program ensures the safe operation of 103 reactor plants and develops advanced nuclear propulsion plants to meet projected national security requirements. The next-generation submarine reactor development was 100% complete as scheduled in FY 2004. Design efforts for the next-generation aircraft carrier are over 60% complete as planned and on schedule to meet the planned ship construction start. The Transformational Technology Core reactor plant design was over 10% complete as scheduled in FY 2004. In addition, the annual utilization factor for operation of test reactor plants has met or exceeded its 90% goal the last 3 years. Outstanding environmental performance is maintained by ensuring that no personnel exceed Federal limits for radiation exposure and that operations have no adverse effect on human health or the quality of the environment. To date, Naval Reactors has consistently met and is on schedule to meet or exceed all long-term performance goals.

Evidence: FY2004 Program Planning Guidance (PPG) and the FY 2004 U.S. DOE Performance and Accountability Report, FY 2006 Congressional DOE Budget, Semi-annual Performance Reports (both Bettis and KAPL), NR Quarterly Performance Measure Report

Does the program (including program partners) achieve its annual performance goals?

Explanation: Naval Reactors consistently meets its performance goals and associated measures as reported in DOE's annual Performance and Accountability Report. All annual performance goals from FY 2002 -- FY 2004 were met or exceeded. Also, the Program is on schedule to meet or exceed all FY 2005 annual performance targets. In addition, Naval Reactors' planning leads to well documented, quantifiable, proven accomplishments. The Program consistently meets midterm and end-of-year goals. The prime contractors issue monthly and quarterly reports to NR providing updates on annual expenditures. The monthly reports allow NR to monitor performance and ensure that end of year expenditure goals are attained. Milestones and research outputs are clearly linked to the long-term Program goals of supporting operating naval nuclear propulsion reactor plants, providing new propulsion plants to meet national security requirements, and maintaining outstanding environmental performance.

Evidence: U.S. Department of Energy's Performance and Accountability Report FY2004, FY 2006 DOE Congressional Budget, Naval Reactors Quarterly Performance Measure Report, NR Family of Reports

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: NR has initiated programs designed to integrate our Prime Contractors in a manner that achieves the most efficient and effective performance with the minimum practical infrastructure and overhead. These programs seek to achieve a more fully integrated, effective and efficient Program while continually generating financial savings. The focus is a broad process improvement initiative across all areas of Program operations that can involve all Program activities, i.e., shipyards, vendors, and prototypes, as applicable. The Program's laboratories have among the lowest functional costs in DOE as a percentage of total budget. Costing of DOE funding is an area that NR is always striving to improve its efficiency. NR DOE operating uncosted balance increased from 8.7% in FY03 to 10.3% in FY04. Although these percentages are within the DOE threshold of 13%, NR is making every effort to ensure that our Program executes funding as effectively as possible. Additionally, efficiencies of the operating fleet are increased when new reactor designs are deployed.

Evidence: FY2003 Functional Support Cost Report of Major DOE Contract Sites, FY03 and FY04 DOE Uncosted Report, Process Improvement Initiatives

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: Naval Reactors has sole responsibility for all aspects of the Navy's nuclear propulsion and no other organization shares this responsibility. We are the only U. S. Government agency that designs and builds reactor cores and plants. The functional requirements to which we must design our reactors differs significantly from those of commercial reactors. Our functional requirements differ significantly in the following areas: shock, size, maneuverability, closed environment, reliability, maintainability, and noise.

Evidence: Presidential Executive Order 12344, Public Law 98-525, Public Law 106-65

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Independent evaluations of the NR program indicate that the program is effectively achieving results. The Nuclear Regulatory Commission and its Advisory Committee on Reactor Safety reviews and analyzes reactor plant safety reports provided by Naval Reactors. Comments and recommendations provided during peer reviews, NR expert reviews, and NRC reviews are formally documented and acted upon. NR also has established a long-standing practice of independent expert review of development efforts between the Nation's two naval nuclear propulsion laboratories. These include functional cost reviews, independent assessments of Major Construction Projects, and Peer Reviews of Internal Audit Functions.

Evidence: Functional Cost Reviews, Independent Assessment of MCPs, Peer Reviews of Internal Audit Functions, Naval Spent Canister System Storage Review, U. S. Nuclear Regulatory Commission Safety Evaluation Report for the VIRGINIA Class Submarine