Weapons of Mass Destruction (WMD)


Basis Date:
J. Johnston
Senate Appropriations
Docfile Number:
Hearing Date:
DOE Lead Office:
Energy and Water Development
Hearing Subject:
Witness Name:
R. Claytor
Hearing Text:

 Statement of Richard Claytor
 Assistant Secretary for Defense Programs
 U.S. Department of Energy
 FY 1993 Appropriations Hearings
 May 14, 1992
 Mr. Chairman, members of the committee, I am pleased to appear before you
 today to testify in support of the Defense Programs (DP) portion of the
 Department of Energy's (DOE) FY 1993 Budget Request for Atomic Energy
 Defense Activities.
                               STRATEGIC OVERVIEW
 Over the past 3 years, the world has undergone breathtaking changes.  The
 changes include the end of the cold war and the collapse of the Soviet
 Union; the potential spread of weapons of mass destruction to
 conflict-prone "Third World" regions; the significant reduction in the
 number and types of nuclear weapons, accelerated by the President's
 initiatives in his speech of September 27, 1991, and his State of the
 Union Address on January 28, 1992; the emphasis on full compliance with
 laws, regulations, and accepted standards in the nuclear weapons complex;
 the expectation by the U.S. public of a "peace dividend;" and significant
 budgetary constraints. These changes have opened up opportunities and
 created challenges rivaling the greatest in our history  with the result
 that, for the first time since 1945, the United States is not building any
 nuclear weapons.
 These changes have had a profound effect on the missions and priorities of
 Defense Programs. The diminishing strategic military threat to the United
 States has allowed the President to make significant reductions in the
 size and structure of our nuclear deterrent. This, in turn, has allowed us
 to commence a significant reduction and restructuring of the nuclear
 weapons complex, while focusing on environmental cleanup. At the same
 time, the reduced strategic threat requires us to pay greater attention to
 other aspects of national security, such as the growing threat of
 proliferation of weapons  of mass destruction. The overriding challenge to
 the Office of Defense Programs at this historical turning point is
 effective execution of our mission in the face of no current or planned
 new weapons production workloads and increasingly constrained defense
                            MISSION AND PRIORITIES
 The Defense Programs mission is to provide and maintain safe, secure,
 reliable, and survivable nuclear weapons, as required by the Department of
 Defense and approved by the President, in a safe, secure, environmentally
 sound, and cost-effective manner. Within the framework of this mission,
 emphasis, at least in the near-term, will shift to activities related to
 warhead retirement and dismantlement; reconfiguration of the nuclear
 weapons complex; continuing improvements to the safety and security of the
 enduring weapons stockpile; nonproliferation of nuclear weapons;
 preparation for ultimate decontamination and decommissioning (D&D) of
 excess facilities; and the transfer of technology between our weapons
 complex and the commercial sector to enhance U.S. competitiveness. At the
 same time, in an uncertain  world, we must maintain nuclear competence in
 our production complex, in our nuclear weapons laboratories, and continue
 a modest number of underground nuclear tests to assure the integrity of
 the Nation's nuclear deterrent.
 Even with the President's bold initiatives in September and in the State
 of the Union address, the United States retains a credible nuclear
 deterrent.  However, the smaller stockpile projected for the Nation's
 future will depend even more heavily on adequate surveillance to assure
 its reliability since there will be fewer weapons as well as fewer weapon
 types in the stockpile.
 As we downsize the weapons production complex through consolidation,
 stockpile maintenance and evaluation will be a principal means by.which we
 define and maintain nuclear production competence through the transition
 period to the smaller, less diverse complex of the future.  The
 President's initiatives have also accelerated the retirement,
 dismantlement, and disposal of a large number of weapons in the nuclear
 arsenal. This will present a challenging workload involving both the
 weapons production complex and the laboratories. The numbers and many
 different types of weapons being dismantled will result in one of our key
 facilities working to capacity through most of the 1990's. The plants and
 the laboratories have both readjusted their priorities to emphasize  work
 in support of accelerated warhead dismantlement, storage and disposal, and
 in related areas of verification and nonproliferation, in support of the
 President's initiatives.
 The weapons-laboratories' defense Research and Development (R&D)
 activities historically have provided the primary scientific and
 technological underpinning for the U.S. policy of nuclear deterrence.  The
 laboratories were originally created to design, develop, and test nuclear
 weapons in support of the U.S. defense strategy. As the nuclear weapons
 complex matured, the roles of these laboratories broadened into all facets
 of weapons design, development, production support, stockpile maintenance,
 and stockpile improvement. The laboratories have also evolved into
 multi-programmatic and multi-disciplinary facilities that have a broad
 range of national research and development priorities consistent with the
 broad range of DOE missions.
 Now, their missions are shifting rapidly. Yet even with this changing
 situation, an important near-term mission must be to maintain nuclear
 competence.  We need a viable Weapons Research, Development and Testing
 program to assure the ability to deal effectively with major reductions in
 nuclear weapons, support the enduring stockpile, and insure against
 technological surprise by a potential adversary. This is nuclear technical
 competence -- a core of competencies in nuclear weapons technologies and
 disciplines -- that is at the heart of the laboratories. Nuclear
 competence allows us to provide for the stockpile, and it is also the
 foundation for technological leadership for reconfiguration activities.
 Competence will assure us the ability to design and test new weapons
 systems if they are needed; provide the rigorous technological base needed
 for enhanced nonproliferation and arms control activities; and provide the
 well-spring from which new technological initiatives for commercialization
 may arise.
 We have already shifted substantial resources -- about $120 million for FY
 1993 -- from weapons development to other activities.  The funds will be
 used to enhance the laboratories' R&D activities to emphasize intrinsic
 safety and security of nuclear warheads, build-down and survivability of
 the nuclear arsenal, accelerated warhead retirements and dismantlements,
 and support to the enduring stockpile.
 In addition to the Core missions, the laboratories will assist in
 developing cost-effective designs for Complex 21 and provide technological
 leadership of Reconfiguration activities. They will provide laboratory
 support for Environmental Restoration and Waste Management programs, with
 special attention to waste minimization. In conjunction with DOE's Office
 of Arms Control and Nonproliferation, the laboratories will carry out
 enhanced nonproliferation and arms control initiatives integrating DOE
 functions in policy, intelligence, and nuclear technologies.
 Finally, we will continue to consolidate functions among laboratories to
 support a single integrated nuclear weapons program achieving maximum cost
 effectiveness while preserving competition where necessary.
 Recently a nuclear testing moratorium bill (H.R. 3636) was introduced in
 Congress. It has been asserted that the massive cutback in strategic and
 tactical nuclear forces, as outlined in the President's September 27,
 1991, speech and State of the Union message, calls into question the need
 for further nuclear testing. It has also been asserted that a nuclear
 testing moratorium would cause Third World nations with intentions to
 develop nuclear weapons to forego their efforts. The President's
 initiatives will greatly reduce the overall size of the U.S. stockpile,
 but will not obviate the need to conduct a modest number of nuclear tests.
 The United States has already significantly reduced its level of nuclear
 testing to the lowest point since the early 1950s, with the exception
 of the 1958-61 test moratorium.
 The credibility of our deterrent is dependent upon underground nuclear
 testing to underwrite the safety, reliability, and effectiveness of our
 nuclear weapons stockpile and demonstrate the survivability of our
 weapons systems. There have been occurrences in modern U.S. nuclear
 weapons designs that have required nuclear tests of stockpile warheads
 to resolve problems. Furthermore, nuclear-tests have uncovered a number
 of weapon system vulnerabilities and deficiencies which could not be
 predicted analytically. A dramatic example of this involved a low
 temperature extreme test of the warhead for the air-launched cruise
 missile. The test results were a complete surprise in that the warhead
 exploded with only a fraction of its design yield. The weapon had been
 tested extensively in nonnuclear hydrodynamic tests, even at the low
 temperature extreme, with no indication of trouble. A design change was
 made to the warhead and it was tested successfully a year later.
 Testing is also essential to ensure the safety of the enduring stockpile.
 The Drell Panel on Nuclear Weapons Safety recommended that the United
 States strike a new balance between "the desired military characteristics
 of nuclear weapons and requirements for enhanced safety." To do so, the
 United States should give greater emphasis to designs that would make
 nuclear weapons "as safe as practically achievable." There are ho current
 plans to build new designs. However, we are planning to develop pit re-use
 technology and weapons designs with enhanced safety as the means to ensure
 the viability of the enduring stockpile. Our efforts will ensure that this
 enduring capability is maintained with minimal consequences to the
 environment and with even greater assurance of safety for the U.S. public.
 We know how to develop such enhanced safety designs, but to do so will
 require nuclear testing.
 As additional examples, the development of InsensitiVe High Explosives
 (IHE) for use in our nuclear weapons required a substantial number of
 tests throughout the 1970s. Likewise, development of Fire Resistant Pits
 (FRP), a warhead capable of withstanding the heat of a fire without
 dispersing plutonium, has been going on for the past several years.
 Several nuclear tests have been required to get us to the point where
 specially designed nuclear weapons now are fire resistant against certain
 types of accident scenarios. More tests are required to examine further
 applications of fire resistant pits to other types of nuclear weapons.
 Nuclear weapons are among the most complex engineering and physics
 challenges and among the most serious responsibilities mankind has
 created. While advances in three-dimensional computer modeling have
 markedly increased our ability to understand and predict nuclear
 weapons and systems performance, underground nuclear testing experience
 has shown that computer modeling, by itself, is not sufficient to
 provide full assurance of weapons reliability and safety. Underground
 nuclear testing is essential to provide the requisite assurance that these
 weapons can fulfill their purpose of deterrence safely and reliably.
 The United States must continue to test. We test only as much as
 required for our security. A halt to nuclear testing would not eliminate
 nuclear weapons nor would it increase international security. Saddam
 Hussein would have proceeded with his nuclear weapons development
 irrespective of any U.S. decision to stop testing. A halt in testing would
 erode U.S. confidence in our remaining nuclear deterrent and would
 severely restrict our ability to make improvements in nuclear weapon
                              K-REACTOR VIABILITY
 Since August 1988, the Production Reactor at the Savannah River Site has
 been in extended outage while we have addressed safety concerns. Our
 objective was, and is, to ensure we can provide reliable tritium
 production capability in a manner that protects the safety and health of
 the workers, the public, and the environment. As Defense Secretary Cheney
 outlined in a recent letter to the Chairman of the House Armed Services
 Committee and members of this Committee, in the interest of national
 security, we Must have in place a viable production source of tritium
 until we are assured of a new and reliable long-term tritium production
 source in the first decade of the next century.
 On December 13, 1991, I authorized restart of the K-Reactor following
 an extensive 3-year effort to significantly upgrade hardware, procedures,
 and personnel training. The Department responded to recommendations from
 the Defense Nuclear Facilities Safety Board, which carried out extensive
 reviews and meetings, including public hearings on restart preparation
 activities. On December 14, safety equipment testing began for the
 K-Reactor. We discovered a problem with the safety rods on December 16 and
 had completed repairing those anomalies by December 24.
 On December 24 we discovered that one of the reactors' heat exchangers was
 leaking primary coolant water into the Savannah River. Approximately 150
 gallons (containing 6,000 curies) of tritiated water escaped from the
 K-Reactor plant. The leak started on December 22. The release resulted
 from mechanical failure of one of the tubes in one of the plant's twelve
 heat exchangers. Subsequent investigation determined that the leak was
 caused by a small hole in the side of one of the 9,000 stainless steel
 tubes in the failed heat exchanger. Other tubes showed no special wear
 The leak, while not posing any health hazard, nonetheless led to several
 corrective actions to prevent a recurrence of such a release. We have
 replaced three heat exchangers, improved procedures and training, and
 installed in-line tritium monitoring equipment, the development of which
 was underway prior to the leak. We now sample water leaving the plant
 every two hours at the reactor site, whereas we had been testing water
 samples twice a day at a laboratory distant from the reactor site. We also
 have completed an investigation into the event, an environmental analysis,
 a metallurgical evaluation of the heat exchanger tube failure, and a
 technical evaluation of heat exchanger integrity. The Department has
 briefed the Defense Nuclear Facilities Safety Board (DNFSB) on the causes
 and corrective actions related to the heat exchanger incident.
 As the Secretary has previously acknowledged, we made a mistake in
 handling this incident. We did not detect the leak soon enough, did not
 effectively handle the public information exchange with the area
 communities, and we allowed too long a period to elapse before local
 officials were fully apprised of all aspects of this event. Fortunately,
 the release had no adverse effects on the environment or the health of the
 citizens of the area. In fact, the individual exposure was estimated to be
 less than 2 percent of the environmental protection agency drinking water
 standard of 4 millirems per year. To help preclude recurrence, we have put
 in place a much more rapid response program to ensure real-time
 communication with all concerned parties.
 On May 5, the Secretary authorized resumption of restart activities at
 the Savannah River Site. The Department will now proceed with the power
 ascension test program, which is expected to take 2-3 months.  Completing
 the power ascension test now is vital to ensure that all modification,
 training, and procedure upgrades have been correctly implemented. This
 also allows us to identify any additional modifications so that we can
 make them during the outage for tying in the cooling tower. Following
 completion of the power ascension test program, the reactor will be shut
 down to replace the safety rods, replace heat exchangers, and tie-in the
 cooling tower.
 The decision to move forward with the cooling tower tie-in immediately
 after the relatively short test phase demonstrates the Department's
 commitment to minimize environmental impacts from facility operation.
 This plan also helps ensure that all safety and operational issues are
 satisfactorily identified and resolved prior to commencing sustained
 reactor demonstration. The outage is expected to take 7-8 months, after
 which we plan to run the reactor (at a 30-percent power level) to
 demonstrate its capability to produce tritium. Subsequently, we plan to
 place K-Reactor in a low-cost standby mode until we are assured of having
 in place a new and reliable long-term tritium production source.
                      FUTURE OF ROCKY FLATS PLANT
 Following the suspension of plutonium operations at the Rocky Flats Plant
 (RFP) in November 1989, and concurrent with the change of the management
 and operating contractor, significant efforts were undertaken to improve
 maintenance, testing, and operation of the plutonium facilities at the
 plant. The Department had planned sequential resumption of plutonium
 operations in six buildings, leading to plutonium pit production for new
 weapons builds, as soon as required safety improvements were made and
 demonstrated to the Secretary's satisfaction and to that of the
 appropriate internal and external oversight authorities.
 In light of the President's recent decision to cancel new production of
 the W88 Trident II Warhead, there are now no Department of Defense
 requirements that would require DOE to produce plutonium pits.
 Accordingly, DOE is beginning the transition of the Rocky Flats Plant
 (RFP) from nuclear production activities toward cleanup of the plant,
 leading to its ultimate Decontamination and Decommissioning (D&D).
 Although plutonium production operations have been suspended since
 November 1989, a substantial amount of activity has been ongoing at the
 RFP. Production of required nonnuclear components has continued and
 accounted for about 25 percent of the total operating expenditures of $1.6
 billion for FY 1990-1992. Of the remaining $1.2 billion, over 90 percent
 of the expenditures have been for environmental compliance and cleanup
 activities, security of materials, and safety improvements.  Most of these
 funds would have been required even if no plutonium production work had
 ever been planned.
 Improvements have been completed in Building 559, an analytical laboratory
 that is needed for both production support and waste management functions.
 Following confirmation of these improvements by an Operational Readiness
 Review (ORR), and after detailed assessments and public hearings by the
 DNFSB, The Secretary authorized resumption of operations in this building
 on February 4, 1992. On April 16 we achieved a significant milestone at
 Rocky Flats operations in Building 559. Operator and equipment
 qualification exercises without plutonium have been completed and actual
 plutonium chemistry is now being performed for final qualifications under
 closely supervised conditions.  The plutonium start-up test plan schedules
 7 weeks of plutonium qualification and proficiency operations, including
 drills. These test operations are being reviewed by members of the Defense
 Programs Operational  Readiness review team, with oversight from the
 offices of Nuclear Safety and Environment, Safety and Health. Also
 observing the operations are Defense Nuclear Facilities Safety Board
 Representatives. This building is required to support the various cleanup
 operations at the RFP into the foreseeable future.
 Similar improvements are well underway in Building 707, formerly the main
 fabrication facility. Upon completion of these improvements, this facility
 will be placed in an appropriate contingency status pending final
 resolution of the complex reconfiguration plan and schedule. We will begin
 to transition the remaining plutonium facilities to a condition suitable
 for turnover to Environmental Restoration and Waste Management. We are
 also about to begin operational improvements in Building 371. This
 building will then play a central role in the Department's plans for
 complying with the State of Colorado's regulations on residues and for the
 D&D of RFP.
 The many improvements that were made during the more than two years that
 plutonium production operations were curtailed have resulted in
 significant improvements in the operational and safety culture at the
 plant. Moreover, the improvements are an investment in the ultimate
 cleanup effort and have set the stage for a more efficient transition of
 the facility to D&D. In addition, the process has been a model for DOE's
 renewed commitment to constructive involvement with outside oversight
 groups, state and local governments, and the public.
 In January 1989, prior to Secretary Watkins' appointment as Secretary
 of Energy, the Department reported to Congress its intent to modernize
 and expand the nuclear weapons complex to support the Nation's nuclear
 deterrent. At that time the Department was planning to reactivate three
 reactors at Savannah River, which were shut down for safety concerns in
 1988; maintain a backup reactor at Hanford; and site two new production
 reactors (NPR), each of a different design.
 After assuming office in early 1989, the Secretary directed that the
 plans for modernization be reevaluated in light of the changing world
 situation. Further direction was provided in August 1990 that resulted
 in publication of the Weapons Complex Reconfiguration Study in February
 1991. This study called for a reconfigured weapons complex that would
 be smaller, less diverse, and more economical but would safely and
 reliably support the nuclear deterrent stockpile objectives consistent
 with the realities of the emerging international security environment.
 In February 1991, work began on a Programmatic Environmental Impact
 Statement (PEIS) to analyze a range of reasonable alternative
 configurations for Complex 21. The Department will use the PEIS process
 to help develop a comprehensive reconfiguration plan. The draft PEIS is
 now scheduled for release in December 1992, followed by a final PEIS
 and a Record of Decision (ROD) in August 1993.
 On November 1, 1991, Admiral Watkins announced that the Department would
 defer a decision on the NPR site and technology and include the
 environmental analysis for the NPR in the PEIS for reconfiguration of the
 nuclear weapons complex. Combining these efforts will permit maintaining
 both reactor design teams at minimum levels while allowing time to
 adequately consider the impact of the changes in requirements resulting
 from the President's September 27, 1991, and State of the Union
 initiatives. The added time will allow the Department to demonstrate the
 technical viability of K-Reactor, the only current production source for
 tritium, and examine other alternatives for tritium production, such as
 linear accelerators, that simply were not possible on the previous
 schedule. As a result of this deferment, the FY 1992 and FY 1993 funding
 for the NPR program has been reduced and a significant portion of the
 savings will be applied to needed environmental restoration and cleanup
 We are now presented with a unique opportunity to begin the transition
 that we all desire to a smaller, less diverse, and more economical
 weapons complex without the concurrent pressure to sustain a large new
 weapons production workload. We plan to begin this process with the
 consolidation of our nonnuclear weapons production activities. The
 Kansas City Plant is the preferred alternative site for consolidation
 of most nonnuclear component production activities. The Department is
 performing an Environmental Assessment of the nonnuclear consolidation
 alternatives in accordance with NEPA. If the Department determines that
 there is no significant environmental impact, we will begin a 3-year
 program to phase out our nonnuclear production operations at the Rocky
 Flats Plant by the end of FY 1994, and at the Mound and Pinellas
 facilities by the end of FY 1995, and transfer most of these activities to
 Kansas City or other existing facilities. The consolidation of these
 activities is expected to save the taxpayers between $150 and $200 million
 annually when fully implemented. Let me emphasize, at this time no final
 decisions have been made.
                            WORKER RETRAINING
 The Department is developing a comprehensive retraining and relocation
 program to help retrain workers as appropriate for now missions, such as
 environmental cleanup; help relocate workers to other DOE and contractor
 activities if available; and work with State and local officials to
 incorporate workers into local economies whenever possible.
 As the Weapons production mission diminishes at sites like Rocky Flats,
 Mound, and Pinellas, the Environmental Restoration and Waste Management
 mission at these sites is expected to steadily in.crease to reflect the
 transition of facilities from an operating configuration to one where the
 facility is ready for decontamination and decommissioning. Over the next
 6 months, each site will be conducting a task analysis including an
 identification of the skill base necessary for an orderly transition to an
 Environmental Restoration and  Waste Management mission.
 The Department's intention is, to the greatest extent practical, to
 retrain and utilize the workforce to carry out this new mission. For
 example, at the Fernald Plant in Ohio, all bargaining unit employees
 will be offered employment with the new contractor being acquired to
 manage the clean-up contractor at comparable salary and employee
 benefit levels. The new contractor will also be directed to hire as
 many salaried personnel as it can effectively employ. Administrative and
 support personnel not presently trained to perform clean-up work and who
 will not be retained by the new contractor must be afforded the
 opportunity for retraining. This will make these workers more
 knowledgeable in remediation techniques and environmental requirements so
 that they can not only be reconsidered as vacancies occur but also become
 qualified for employment with other specialized remediation companies
 working on government or commercial sites.
 However, in some instances, a portion of the workforce may not be needed.
 In those cases, the Department will work with State and local
 organizations to identify job skills which may be needed within the
 surrounding area, including other DOE facilities. In parallel with this
 effort the Department intends to develop a DOE contractor-wide vacancy
 system to match job skills with job opportunities within the entire DOE
 complex. Furthermore, we will work with our contractor management to
 provide incentives for early retirement and for voluntary separations. We
 will also provide outplacement assistance such as resume preparation,
 counseling, assistance for job search and tuition payment for retraining.
 Coordination with the Department of Labor to draw upon funding set aside
 for defense-related facilities to provide for retraining, education,
 recruitment and placement, relocation and counseling assistance is
 planned. We will also coordinate with the Economic Development
 Administration to help State and local governments obtain Economic
 Adjustment Program grants (with 25 percent match) for community impact
 assistance, drawing upon funding earmarked for defense-related facilities.
 These funds may be used for a wide range of development activities
 including modification and alternative uses of facilities, expansion of
 community businesses and creation of other new jobs.
 As these types of reductions in the weapons complex are made in the
 future, the Department will need to undertake a significant effort to
 retain the nuclear competency skills necessary for a reduced nuclear
 weapons stockpile and to minimize the local economic impact of
 programmatic reductions and closure of facilities. During this interim
 period of transition, the requirements placed on the existing complex
 will still be significant. We must still continue to achieve and maintain
 compliance with all applicable laws, regulations, and DOE Orders. We will
 continue to make improvements in the conduct of all of our operations. As
 demonstrated at the Fernald site, the Department is committed to a safe
 and orderly transition of these sites to an Environmental Restoration ind
 Waste Management mission.
 Since issuance of the Secretary's 10 Point Plan in June 1989 to create
 a new culture of accountability, great strides have been made. Defense
 Programs, its laboratories, and its contractors have educated a
 significant portion of their staffs in ihe principles and concepts of the
 conduct of operations and the need for compliance with DOE Orders. We have
 demonstrated and will continue to demonstrate that environment, safety,
 and health often takes priority over production and that the two are
 compatible. The capability for the line managers to perform
 self-assessment has greatly improved. Given the great changes occurring in
 our mission, we now have the opportunity to incorporate the new culture
 into the reconfigured complex and long-term maintenance of the DP complex.
 A substantial level of funding will still be needed to continue
 implementation of the new culture. A strong conduct of operations and
 thrust for excellence introduced at the inception of reconfiguration will
 assure a cost-effective, quality operation in which environment, safety,
 and health priorities will become the expected way of doing business.
 Defense Programs will launch a series of broad new initiatives in FY 1993
 which is expected to have a positive economic impact in the United States.
 Advanced computer technologies will be generated by work conducted under
 a model Cooperative Research and Development Agreement (CRADA) between DOE
 and the Computer Systems Policy Project (CSPP), an affiliation of chief
 executive officers of 12 of the largest American computer companies.
 Subject to the availability of adequate funding, additional breakthroughs
 are possible through collaborative R&D to be conducted by DP laboratories
 in tandem with major automobile manufacturers, machine tool firms,
 flat-panel display consortia, integrated circuit manufacturers, and
 advanced materials producers.
 The strategic direction of our Technology Commercialization programs will
 be dictated by industry. Several measures have been and will be taken to
 ensure this "industry pull" exists. For example, industry advisory
 committees are planned to support our Technology Commercialization
 process, keeping us focused on industrial needs and economic realities.
 In support of this vision, we will continue to forge new relationships
 with private industry. The CSPP model CRADA, signed on March 20, 1992,
 is an important example. Also, we have been actively working with the
 Specialty Metals Processing Consortium (SMPC) and the National Center for
 Manufacturing Sciences (NCMS).
 On April 23, the Department signed with the NCMS an umbrella CRADA to
 allow NCMS member companies to access the unclassified technologies and
 capabilities of the DOE defense complex under faster, more streamlined
 procedures aimed at Joint programs with mutual benefit to DOE and the
 individual companies.
 International competitiveness in high-technology industries requires rapid
 development of new ideas. Therefore, DOE is working to streamline the
 negotiation of CRADA's and the funding of corresponding projects. One
 important step is now being taken: initiating strategic teamwork among the
 weapons laboratories. This teamwork will allow private-sector firms to
 identify the most appropriate laboratory - or combination of laboratories
 - for a specific technology or capability. Moreover, laboratory teamwork
 will enhance our response to "industry pull" by providing a more broad,
 yet unified, set of capabilities.
 We will continue to improve the effectiveness of our Technology
 Commercialization programs. Funding for these programs has grown to $50
 million in FY 1992. We have received more than 100 proposals for FY
 1992 collaborative projects; 43 have been selected for funding.  Industry
 interest continues to grow. In addition, in the FY 1993 budget amendment
 which you should be receiving shortly we hope to increase significantly
 the $91 million already requested for technology commercialization in the
 FY 1993 AEDA budget.
 Although the Technology Commercialization budget is small in comparison to
 commercial R&D funding, we believe that by investing in the
 commercialization of weapons laboratory technologies and capabilities the
 American taxpayer can realize returns on investment significantly higher
 than those earned today on independent research in the private sector.
                     FISCAL YEAR 1993 BUDGET REQUEST
                               DEFENSE PROGRAMS
                               ($ IN MILLIONS)
                                                             FY 1993
                                  FY 1991      FY 1992       REQUEST
 PRODUCTION AND SURVEILLANCE      $2,894       $2,515 a/     $2,511 b/
 RESEARCH, DEVELOPMENT & TESTING   1,742        1,944 c/      1.862 c/
   (Includes Technology Comm.)
 WEAPONS PROGRAM DIRECTION           106          164           356
   (Includes Reconfiguration)
 MATERIALS PRODUCTION              2,236        1,877         1,777
   TOTAL DEFENSE PROGRAMS         $6,978       $6,500        $6,506
 AS SPENT (WITH CARRYOVER)        $6,851       $6,627        $6,506
 a/ Does not reflect $127 million spending carryover from FY 1991.
 b/ Does not include full impact of potential workload funding adjustments
    currently under review as a result of the President's State of the
    Union Address.
 c/ RD&T numbers do not reflect planned carryover of $26 million.
 The FY 1993 budget request for DP is reduced by 1.8 percent from FY 1992
 spending levels. Overall, this is a reduction in real growth of about 6
 percent. The most significant reductions are in the Production and
 Surveillance and Materials Production program which decline 9 percent in
 real terms from FY 1992, which I will cover in detail later in my
 statement. The Research, Development and Testing (RD&T) account will
 decline 8 percent in real terms. Our budget request reflects reduced
 expenditures for capital equipment and construction in all programs, with
 new starts related primarily to safety and health issues.
 Although most accounts trend downward in FY 1993, there are two growth
 areas: Technology Commercialization and Weapons Complex Reconfiguration.
 Increased emphasis is planned for technology transfer to industry in
 several high technology areas, including microelectronics, high speed
 computing, and advanced ceramics. This budget request for Technology
 Commercialization activities is contained within the RD&T line, and
 increases to $91 million, $41 million over the FY 1992 level.
 Weapons Complex Reconfiguration funding is currently contained in the
 Weapons Program Direction line. The request for FY 1993 is $173 million,
 which is substantially higher than the FY 1992 level. This includes
 funding for a reconfiguration line item for nonnuclear manufacturing
 consolidation and to begin Title I engineering for the nuclear facilities
 consolidation following the Record of Decision scheduled for August 1993.
 The outyear funding projections for Defense Programs include no growth
 at the bottom line for our programs. We will accommodate growth areas,
 such as reconfiguration, at the expense of other ongoing efforts.
 Finally, it is important to note that the budget request for FY 1993
 remains in the structure appropriated in FY 1992. This structure does not
 take into account the new Defense Programs organization, nor does it allow
 us to identify explicitly funding in "functional" areas such as
 environment, safety, and health in all of our program activities. We are
 working with the Department's Chief Financial Officer to examine these
 issues and propose changes to the Department's current budget structure
 targeted for the FY 1994-1995 budget submittal. The Department will keep
 the Congress fully informed about these proposed changes as we work to
 make the budget and reporting structure as responsive as possible to both
 the Department's priorities and management needs, and the need for
 comprehensive and current congressional oversight of our operations.
 The next major section covers the DP budget request in detail, by
 appropriation. It includes a discussion of program accomplishments during
 the past year and a detailed discussion of the budget justification.
                          WEAPONS ACTIVITIES
 The nuclear weapons RD&T complex consists of several key elements,
 including highly competent scientists, engineers and technicians,
 specialized equipment, and facilities. The Los Alamos National Laboratory
 (LANL), Lawrence Livermore National Laboratory (LLNL), Sandia National
 Laboratories (SNL), and the Nevada Test Site (NTS) constitute the RD&T
 complex. These elements form the core of the RD&T program. The program is
 maintained to assure the ability to support evolving stockpile
 requirements, develop improved nuclear weapons surety features, and
 provide technical support for Complex 21 reconfiguration activities.
 The RD&T program, and the weapons laboratories specifically, are being
 reoriented to comply with recent Presidential initiatives. The
 laboratories are also currently undergoing a detailed review to examine
 what can be done to streamline and consolidate laboratory activities to
 reduce costs, without sacrificing technological effectiveness.
 There are specific mission changes in the FY 1993 budget related to
 the weapons laboratories. Reduced funding requirements for weapons
 development -- about $12O million -- have been reallocated within RD&T
 to enhance efforts in support of the President's initiatives. The
 redirection of R&D work will emphasize efforts related to warhead
 dismantlement, storage and disposal technology, nuclear non-proliferation,
 waste minimization and treatment, transportation and storage, technology
 commercialization and planning and management support of improved
 procedures and risk assessment. Underlying these changing missions and
 priorities is an effort to stabilize R&D employment at the laboratories-at
 about the FY 1991 level, although the Weapons workforce supporting the
 laboratories Testing programs will continue to decline. Laboratory
 full-time equivalents levels have declined by almost 24 percent between FY
 1987 and FY 1993.
 In a changing world, it is difficult to predict which technological
 options will be needed in the future. The technological superiority we
 have traditionally had can only be maintained if we support a Weapons
 Research, Development and Testing program appropriately sized and
 oriented to accommodate change. Research, Development and Testing
 capabilities that are perceived to be strong and viable are required to
 maintain strategy options, foster nuclear competence, and enhance the
 safety and security of the enduring stockpile.
 As long as there is a stockpile, the emphasis on improving nuclear weapons
 surety will remain paramount. We must continue to upgrade the stockpile as
 safety-related technologies become available. Weapons surety starts in the
 design, testing, and production cycles with measures to prevent accidents
 and extends to the control and handling of nuclear weapons and other
 procedures designed to avoid loss or diversion to unauthorized persons.
 We will also continue to conduct underground nuclear tests at the NTS.
 These tests are a crucial component of weapons research and development
 and while they are essential to demonstrate weapons system performance,
 they are equally important in retaining a competent RD&T workforce since
 scientists and engineers must exercise their skills in order to retain
 them. The weapons  program will maintain a level of testing consistent
 with programmatic needs, including the need to-maintain nuclear design
 competence. While the overall number of nuclear tests will likely not
 increase significantly over the level planned for FY 1993, a finite
 number of nuclear tests must be conducted annually so that we will have
 confidence in our stockpiled weapons and can improve the level of
 safety and reliability of the stockpile.
 The threat assessment capability of the RD&T complex remains an important
 part of the program. Not only must we strive to never be surprised
 technologically, but we must also be prepared to respond to new threats as
 they arise. The threat assessment program attempts to address and
 understand the multitude of potential threats to our national security
 The FY 1993 budget includes an aggressive program related to technology
 commercialization. Major FY 1993 laboratory/industry collaborations have
 been planned with the U.S. computer and semiconductor industries. A major
 program is also planned with the U.S. companies in the development of new
                     AID TO THE FORMER SOVIET UNION
 The Weapons program has the lead technical support role in providing
 nuclear weapons surety assistance to the former Soviet Union. We will
 provide, through the State Department, technical assistance on matters of
 weapons transportation, disablement, use control, security, and the safe
 storage of fissionable materials. Concrete measures are under active
 bilateral discussion to determine the most effective means to provide
                     FY 1991 ACCOMPLISHMENTS AND ISSUES
 Recent accomplishments in Weapons Research, Development and Testing are
 presented below.
                           LABORATORY FACILITIES
 Meeting the tough technical challenges and producing world class research
 has been the hallmark of DOE's three weapons laboratories over the years.
 During the past 3 years, our RD&T complex has been responding to a new set
 of challenges, the need to improve the quality of facility and site
 operations. Confronting these challenges is necessary regardless of the
 scope and direction of any possible programmatic mission change within the
 RD&T complex.
 Tiger Team assessments were conducted at Sandia National Laboratories,
 Albuquerque (SNL); and at Los Alamos National Laboratory (LANL). These
 assessments were preceded by extensive and critical self-assessments. The
 Laboratories' self-assessments were frank discussions of root cause
 failings and management weaknesses.
 The SNL assessment took place in the April/May 1991 timeframe, and has
 been followed up by the development of a Corrective Action Plan that is
 in the final stages of Departmental review. Sandia's Corrective Action
 Plan was approved by the Secretary on March 27, 1992. The plan reflects
 an estimated cost of about $223 million and a schedule that will cover
 6 years FY 1992 through FY 1997. The FY 1993 portion of the Corrective
 Action Plan is estimated to be about $40 million and is included in the
 Department's budget request.
 The LANL Tiger Team assessment started in late September 1991, and was
 concluded in early November 1991. The development of a Corrective Action
 Plan is currently in its initial stages and is slated for completion in
 late summer or early fall 1992.
 Execution of approved Tiger Team Corrective Action Plans continues at
 the DOE Nevada Field Office (NV), LLNL, and Sandia National Laboratories,
 Livermore (SNLL). At NV about 37 percent of actions have been completed.
 LLNL has completed about 55 percent of its Corrective Action Plan and at
 SNLL, about 42 percent of the corrective actions have been completed.
 To give a much needed focus and perspective to our efforts to strengthen
 the operations and line management oversight activities of our facilities,
 DP initiated a disciplined and structured approach to identify specific
 DOE Order requirements, assess their applicability, determine the degree
 of compliance with the requirement, and identify and schedule the
 necessary measures to come into compliance. Within the RD&T Complex this
 DOE Order compliance self-assessment is being undertaken using a "graded
 approach" starting with selected facilities at the laboratories and the
 NTS. The "back end" of this process, the establishment and approval of
 Schedule Compliance Agreements, will, to a large measure, influence and
 frame resource requirements over the next several years.
 Positive measures are continuing to strengthen line management oversight
 in our RD&T facilities. On site presence at LANL and LLNL has been
 solidified and enhanced by the establishment of DOE Facility
 Representative Programs. Coverage of these programs will be expanded over
 the next few years.
 Another fundamental step toward improving the conduct and quality of our
 RD&T facilities and site operations was taken during the past year. Formal
 conduct of operations programs and implementation plans were developed by
 the three weapons laboratories. These programs are based on DOE's
 adaptation of Institute of Nuclear Power Operations guidelines for the
 conduct of operations. These plans were presented to and approved by DP.
 As the nuclear weapons program is reoriented, our RD&T facilities and our
 ability to operate them in a safe, secure, and environmentally sound
 manner will be tested. New operations, or changes to existing operations
 may be required to support changing RD&T missions and programs. In most
 cases, these types of changes require redefinition of operational safety
 envelopes and development of new procedures.
 The changing scene in the weapons program also points out the need to
 proceed with closure, deactivation, and consolidation of some of our
 facilities and operations, for example: the closure of tritium operations
 in Technical Area 33 at LANL; the eventual closure and deactivation of
 tritium facilities at LLNL and SNLL; the downsizing of plutonium
 operations at LLNL and their eventual consolidation into plutonium
 operations at LANL; and the consolidation of nuclear materials storage at
 LANL, a key action in the completion of the Chemistry and.Metallurgy
 Research Building upgrade program.
 Of course, overlaying all of this is the continuing challenge to enhance
 our line management oversight so that ES&H, as well as other operational
 expectations, are met.
                          EMERGENCY PREPAREDNESS
 In the area of emergency preparedness and response, activities were
 conducted to maintain and enhance the Department's capability for
 responding to a nuclear weapons accident, malevolent nuclear incident,
 or other significant accident or incident involving radioactive material
 worldwide. During the past year, the Department's Atmospheric Release
 Advisory Capability (ARAC) -provided direct support of activities
 addressing the Mt. Pinatubo volcano eruption, Kuwait oil fires, and other
 DOD efforts in the Persian Gulf.
 The President's initiatives to decrease the nuclear stockpile will result
 in increased movement of weapons throughout the U.S. and abroad.  These
 activities will increase the risk of an incident for which our emergency
 response capabilities must be prepared to deal. For this very important
 reason, we are focusing management attention and resources in this area so
 that we are prepared to respond quickly and effectively to any nuclear
                      TEST BAN READINESS PROGRAM
 The DOE is required by Section 1436 of the National Defense Authorization
 Act for FY 1989 to provide an annual report on the status of the Nuclear
 Test Ban Readiness Program. The Third Annual Test Ban Readiness Report
 (1991) is currently being prepared.
 Section 1436 requires three areas to be addressed in the report: stockpile
 inspection and nonexplosive testing; remanufacturing of existing nuclear
 weapons; and research in areas related to nuclear weapons science and
 engineering. Even though progress was made during the past year in all the
 specified areas, current understanding is inadequate to support devising
 a program that can assure continued stockpile reliability, or a credible
 deterrent, in the event of significant further limitations on nuclear
 testing. Moreover, a review of FY 1991's activities does not reveal any
 specific technical achievement that would permit early attainment of the
 program objectives.
                               TOTAL FUNDING
                              ($ IN MILLIONS)
                                                      FY 1993   FY 1993
                       FY 1991  FY 1992  W/CARRYOVER  REQUEST   W/CARRYOVER
 OPERATING EXPENSES   $1,032.2 $1,182.6   $1,156.6   $1,142.9    $1,168.9
 CAPITAL EQUIPMENT       109.7    127.5      127.5      103.8       103.8
 CONSTRUCTION            100.3    122.5      122.5      141.5       141.5
 TOTAL R&D BUDGET     $1,242.2 $1,432.6   $1,406.6   $1,388.2    $1,414.2
                                  LABORATORY  MANPOWER
                          WEAPONS RESEARCH AND DEVELOPMENT
                               (FULL-TIME EQUIVALENTS)
                            FY 1991                 FY 1993    FY 1993
                            APPROP.     FY 1992     REQUEST    W/CARRYOVER
 LLNL                       2,613       2,684       2,768       2,831
 LANL                       1,983       2,074       1,903       1,960
 SNL                        2,766       2,862       2,486       2,571
     TOTAL R&D BUDGET       7,362       7,620       7,157       7,362
 ACTUAL/PROJECTION          7,529       7,415        ---        7,362
 A principal objective in DOE's management of the  laboratories is to
 stabilize the employment level supported by DP funding. To that end, the
 FY 1993 budget  request incorporates a carryover of $26.0 million from FY
 1992 to level R&D laboratory employment at about 7,362 full-time
 equivalents, which is comparable to FY 1991 for R&D. Overall, however, the
 level of RD&T employment continues downward, attributable to the declining
 level of effort in the underground testing program.
 Fiscal Year 1991 end-of-year employment was higher than projected, in
 anticipation of increased FY 1992 appropriations. Because we do not expect
 to sustain that higher level in FY 1993, a decision was made to
 carryover $26 million into FY 1993. The FTE's now projected for FY 1092
 are 7,415; this provides an orderly ramp down to FY 1993.
                               TOTAL CORE OPERATING
                                  ($ IN MILLIONS)
                                                                FY 1993
                                       FY 1991      FY 1992     REQUEST
   TECHNOLOGY BASE                     $ 414.8      $ 519.5      $ 536.2
     AND CERTIFICATION                   346.3        339.0        219.4
   SPECIAL PROJECTS                       69.2         87.5         89.1
   TECHNOLOGY COMMERCIALIZATION           20.0         38.6         91.0
   EMERGENCY PREPAREDNESS                 24.0         32.7         32.9
 TOTAL OPERATING EXPENSES              $ 874.3     $1,017.3      $ 968.6
 The general thrust of the FY 1993 budget proposal for Core R&D is
 to maintain support for the major nuclear weapons related missions and
 to apply those resources freed by diminished near-term weapon system
 design and engineering requirements to areas of new or enhanced activities
 as mentioned previously.  Stabilizing the level of laboratory employment
 funded by weapons Research and Development at least until such time as
 future mission needs are more definitely understood, continues to be a
 prime objective. The challenge is to define the future, and then
 restructure the laboratories to meet that future while maintaining the
 unique expertise essential to viable nuclear competence.
 The overall operating expense level for R&D declines about 3 percent from
 the FY 1992 level; however, we will seek to achieve about the FY 1991
 level of R&D funded laboratory employment overall by utilizing $26.0
 million of FY 1992 funding as discussed earlier.
 Technology Base funding is requested at $536.2 million. This represents
 a 3 percent increase over the FY 1992 level and a 29 percent increase over
 FY 1991. The technology base effort is the foundation of the program. Most
 importantly, it consists of a unique team of scientific and engineering
 experts in nuclear weapons design and technology. Maintaining the nuclear
 competence of this team and a stable employment level are crucial
 elements. The second component of the technology base is the unique array
 of highly specialized research facilities. These facilities are crucial in
 maintaining our nuclear technological edge and must be maintained to keep
 up with major advances in underlying science and technology. The
 technology base consists of fundamental research in specific areas of
 science and engineering where new understanding is required to resolve
 unknowns or problem areas.
 Weapons Development, Engineering, and Certification funding is requested
 at $219.4 million, about a 35 percent reduction from the FY 1992 level.
 This activity is responsible for improving safety and security of all
 nuclear weapons in the stockpile, maintaining weapons reliability, and for
 providing new weapons options. Within available resources in FY 1993,
 efforts will support stockpile maintenance and emphasis will be on
 developing a smaller, safer, more secure, and effective stockpile;
 accelerated warhead dismantlement; long-term staging and storage and
 disposal. There will also be support to the former Soviet Union in
 dismantlement process technology.
 Special projects funding is requested at $89.1 million, about a 2 percent
 increase over the FY 1992 level. This activity supports the Research and
 Development program including efforts related to improved hardware systems
 and procedures for the protection of nuclear weapons and strategic
 quantities of special nuclear material during shipment and storage. The
 increase in this area is for support of laboratory ES&H activities
 directly related to the program and maintenance of critical laboratory
 capabilities and facilities.
 Technology Commercialization funding for FY 1993 is requested at $91
 million,  a significant increase over the FY 1992 level of $50
 million. This increase will allow us to engage in more large
 cooperative projects in critical technology areas while continuing
 programs started in previous years.
 Emergency Preparedness funding is requested at $32.9 million, which is
 basically the same funding as for FY 1992. This program includes
 maintenance, operations, and enhancement of the Nuclear Emergency Search
 Team capability; Federal Radiological Monitoring and Assessment Center
 activities; the Aerial Measurements System; and the Atmospheric Release
 Advisory Capability.
                             ($ IN MILLIONS)
                                                           FY 1993
                                FY 1991      FY 1992       REQUEST
 R&D Core Program
   R&D Basic Equipment           $ 46.9       $ 69.8       $ 53.6
   R&D Computers                   45.7         28.1         29.5
 Total R&D Core Program            92.6         97.9         83.1
 The total R&D capital equipment request is for $103.8 million. This
 includes $83.1 million for the R&D Core program, and $20.7 million for the
 Inertial Fusion (IF) program.
 For the R&D program, the basic equipment request of $53.6 million supports
 the highest priority needs. At the three weapons laboratories, LANL, LLNL,
 and SNL, there are nine major items of equipment requested.  For R&D
 computers, the $29.5 million request supports seven major items of
 computer equipment at the three weapons laboratories.
                               CONSTRUCTION SUMMARY
                                  ($ IN MILLION)
                                                             FY 1993
                                  FY 1991      FY 1992       REQUEST
 Programmatic Construction
    Revitalization                 $ 78.2       $ 94.3       $119.5
    R&D - GPP                        20.0         21.4         21.0
 Subtotal Programmatic               98.2        115.7        140.5
 Safeguards and Security              2.1          6.8          1.0
 Total R&D Construction            $100.3       $122.5       $141.5
 The construction request for R&D is $141.5 million. General plant projects
 (GPP) construction remains at about the same level as FY 1992. The
 revitalization program, initiated in FY 1984 to provide for the
 construction -of new facilities and modifications, relocations, and
 additions to existing RD&T facilities, request for FY 1993 is $119.5
 million. Under Revitalization $18.8 million is for construction subproject
 starts proposed for R&D, primarily to redress safety related issues.
                       CONSTRUCTION NEW STARTS
                            ($ IN MILLIONS)
                                                      FY 1993        FUTURE
                                          TEC         REQUEST        YEARS
   - GAS LINE REPLACEMENT, PHASE B,      $ 5.8        $ 5.8        $  0
   - STATIC VAR COMPENSATOR, LANL          9.2          2.9          6.3
   - WATER DISTRIBUTION SYSTEMS, NV       13.2          3.3          9.9
      FACILITY, LLNL                      11.3          4.0          7.3
   - DORMITORIES, NV                       4.7          2.8          1.9
 TOTAL R&D NEW STARTS                    $44.2        $18.8       $ 25.4
 The Gas Line Replacement, LANL, is required to replace the last section
 of 130 miles of natural gas pipeline that serves LANL. The FY 1993 request
 is for $5.8 million.
 The Static Var Compensator, LANL, provides for installation of a
 thyristor- controlled static volt ampere reactive (VAR) compensator
 required by LANL electric power transmission and distribution system. The
 FY 1993 request is for $2.9 million.
 The Water Distribution Systems, NV, provides for expansion and upgrades
 to permanent water distribution systems supporting major weapons testing
 and support areas of the NTS. The FY 1993 request is for $3.3 million.
 The Atmospheric Emergency Response Facility, LLNL, is an office and
 research building which will provide operations support space for the
 Atmospheric Release Advisory Capability (ARAC). The FY 1993 request is for
 $4.0 million.
 The dormitories subproject at NV, provides for two 16,500 square-feet
 dormitories containing 53 single occupancy accommodations. The FY 1993
 request is for $2.8 million.
                                ($ IN MILLIONS)
                                                 FY 1993     FUTURE
                                      TEC        REQUEST     YEARS
 R&D S&S CONSTRUCTION              $ 15.3       $ 1.0       $  0
 The FY 1993 request includes $1.0 million to continue our efforts to
 improve the overall safeguards and security posture. The FY 1993 request
 is for project 88-D-104 Safeguards and Security Upgrade, Phase II, LANL.
 This project provides for four major categories of safeguards and security
 upgrades: emergency perimeter fencing; physical security; special nuclear
 materials (SNM) monitoring; and substantial computing network equipment
 upgrades. Phase II is for continuation of improvements to the security of
 SNM and classified information at LANL.
                        INERTIAL FUSION
                        ($ IN MILLIONS)
                                                           FY 1993
                                    FY 1991    FY 1992     REQUEST
   GAS LASER                         $ 10.9     $ 11.8     $ 11.0
   GLASS LASER                        102.3      106.4      117.7
   PULSED POWER                        29.3       31.5       30.0
 SUPPORTING ACTIVITIES                 15.4       15.6       15.6
 SUBTOTAL OPERATING EXPENSES        $ 157.9    $ 165.3    $ 174.3
 CAPITAL EQUIPMENT                     17.1       29.5       20.7
 SUBTOTAL, INERTIAL FUSION          $ 175.0    $ 194.8    $ 195.0
 The FY 1993 budget request for Inertial Fusion (IF) is $174.3
 million for operating expenses and $20.7 million for capital equipment,
 for a total request of $195 million. This program conducts experiments and
 develops high-power drivers to explore certain physics processes related
 to nuclear weapons.  This is a multi-laboratory, experimental and
 theoretical effort with a near-term goal of achieving ignition and modest
 gain in a laboratory ignition facility. The long-term goal is to advance
 certain weapons physics simulation and effects capabilities and provide
 information on high-gain target behavior useful in civilian electric power
 applications. The Inertial Fusion program is planned to maintain about the
 FY 1992 level of effort in FY 1993. Operating funding is allocated to
 continue efforts directed toward expeditious demonstration of ignition and
 gain, in accordance with the National Academy of Sciences'
 recommendations. A major review of the Pulsed Power program is scheduled
 for summer 1992 and will provide additional direction for this program's
 efforts in FY 1993. The Department continues to work through the San
 Francisco Field Office to closeout contract obligations with KMS Fusion,
 Inc., the former ta?get fabrication contractor. The IF capital equipment
 request of $20.7 million includes $13.1 million to continue the OMEGA
 laser upgrade at the University of Rochester. This supports a project
 completion date of 1995.
                                WEAPONS TESTING
                                 TOTAL FUNDING
                                ($ IN MILLIONS)
                                                               FY 1993
                                     FY 1991      FY 1992      REQUEST
 OPERATING EXPENSES                  $ 457.3      $ 457.5      $ 429.5
 CAPITAL EQUIPMENT                      31.5         34.5         31.1
 CONSTRUCTION                           10.7         19.4         13.3
 TOTAL WEAPONS TESTING               $ 499.5      $ 511.4      $ 473.9
                             LABORATORY MANPOWER
                               WEAPONS TESTING
                           (FULL-TIME EQUIVALENTS)
                                                           FY 1993
 TESTING                             FY 1991    FY 1992    REQUEST
 LLNL                                    543        517        447
 LANL                                    438        420        407
 SNL                                     368        343        306
 TOTAL TESTING                         1,349      1,280      1,160
 Underground nuclear testing is a critical component in our overall
 weapons R&D. As a result of the President's nuclear weapons initiative,
 testing to ensure confidence in a smaller, less diverse stockpile and
 in computational modeling is of increased importance since any problem
 could affect a greater portion of the stockpile. Weapons testing
 represents the highest priority experimental program of the R&D effort.
 Principal program objectives are to: evaluate and maintain confidence
 in the performance and safety of stockpile weapons; understand and
 predict the behavior of nuclear weapons systems; investigate new
 designs;-develop safer, more secure, and effective weapons; develop
 nuclear designs with components that can be manufactured with less
 waste and environmental impact; and ensure the survivability of weapons
 and other military assets.
                             WEAPONS TESTING
                            OPERATING EXPENSES
                             ($ IN MILLIONS)
                                                             FY 1993
                                   FY 1991      FY 1992      REQUEST
    TECHNOLOGY BASE                $ 140.1      $ 147.7      $ 102.8
     AND CERTIFICATION               129.0        127.7        133.0
 TESTING CAPABILITIES                183.2        177.1        188.4
 MARSHALL ISLANDS                      5.0          5.0          5.3
 TOTAL OPERATING EXPENSES         $  457.3     $  457.5     $  429.5
 The FY 1993 budget request for Weapons Testing supports fewer tests than
 in FY 1992. Stabilizing the program and maximizing the data returned from
 each experiment are near-term goals.
 The technology base component of the Testing program supports R&D efforts
 to explore new weapons concepts and improve our understanding of the
 physical processes relevant to the nuclear weapons design. If additional
 restrictions are placed on nuclear testing, There will be a greater
 reliance on our current understanding of the performance of nuclear
 The weapons development,.engineering, and certification effort supports
 work in the current stockpile and near-term improvements to the stockpile.
 After an experimental device is chosen for a weapons system,-nuclear tests
 assure device performance reliability and ensure that the weapons are
 militarily useful, survivable, and includes the most effective safety
 features. Testing capabilities include activities necessary to maintain
 and enhance our capability to conduct underground nuclear tests at NTS and
 to conduct nonnuclear tests and field experiments elsewhere in support of
 NTS activities.
 The Marshall Islands Program is carried out by the Assistant Secretary for
 ES&H through the Office of Health Physics and Industrial Hygiene Programs.
 This program provides continued medical surveillance of people and the
 environment, restoration, and resettlement of the Marshall Islands. This
 category does not provide for underground nuclear tests.
                                  WEAPONS TESTING
                                 CAPITAL EQUIPMENT
                                  ($ IN MILLIONS)
                                                                  FY 1993
                                        FY 1991      FY 1992      REQUEST
 BASIC EQUIPMENT                         $ 31.6       $ 34.5       $ 30.6
 MARSHALL ISLANDS                           0            0             .5
 TOTAL CAPITAL EQUIPMENT                 $ 31.6       $ 34.5       $ 31.1
 The request for basic equipment includes two helicopters with a TEC of
 $7.6 million. There is also a major item of automated data processing
 equipment requested at $0.6 million. There is also $0.5 million capital
 equipment requested to support Marshall Island activity.
                              WEAPONS TESTING
                              ($ IN MILLION)
                                                                FY  1993
                                     FY 1991      FY 1992       REQUEST
      FACILITY, NV                  $     0      $     0      $    2.0
  GPD-101,.GPP, VL                      6.4          7.4           7.7
      FACILITY, NV                      4.2         12.0          3.6
 TOTAL TESTING CONSTRUCTION          $ 10.7      $  19.4      $  13.3
 The construction request includes one new start, Project 93-D-102;
 Nevada Support Facility with a $36.6 million TEC. The FY 1993 request
 is for $2 million. This project will provide a new support facility of
 approximately 164,000 square feet and its related utilities to consolidate
 NV staff in a cost effective alternative to leased space.  Work will also
 continue in the Combined Device Assembly Facility at NV. The FY 1993
 funding is requested to continue and allow completion of construction,
 inspection, and procurement of special and standard equipment. There is
 also a $7.7 million FY 1993 request for GPP at various locations.
 The nuclear weapons Production and Surveillance (P&S) complex is made
 up of seven government-owned, contractor-operated production facilities.
 These facilities are the Pantex Plant, the Rocky Flats Plant, the Y-12
 Plant, the Savannah River Tritium Facility, the Kansas City Plant, the
 Mound Plant, and the Pinellas Plant. The components and products are moved
 between plant sites in a safe, secure transportation system.
 The President's initiatives to reduce the nuclear weapons stockpile have
 had significant near-term and long-term effects on the weapons P&S
 complex. First, there has been a substantial and permanent reduction in
 new weapons builds throughout the planning period. Second, the rate of
 weapons retirements has accelerated with a corresponding near-term
 increase in warhead disposal activities. Finally, consolidation of
 nonnuclear manufacturing operations has been initiated.
 The schedule for future weapons deliveries was impacted by the President's
 recent initiatives on nuclear weapons. Key elements include: (1)
 elimination of the ground-launched, short-range weapons inventory (systems
 affected include artillery shells and the Lance Missile); (2) withdrawal
 of all tactical nuclear weapons from surface ships and attack submarines
 as well as those weapons associated with land based naval aircraft
 (systems affected include: Sea Launched Cruise Missile, strike bombs, and
 depth bombs); (3) removal of Intercontinental Ballistic Missiles (ICBM)
 scheduled for deactivation under Strategic Arms Reduction Talks (START)
 and all bombers from alert status. Elimination of ICBM's will be
 accelerated once the START Treaty  is ratified (systems affected:
 strategic bombs, Air Launched Cruise Missiles and Minuteman II); (4)
 cancellation of the replacement for the nuclear Short Range Attack Missile
 (SRAM) on the strategic bomber and the tactical variant (systems affected:
 SRAM II and SRAM-T); (5) halt in production of the W88 Trident II warhead;
 (6) no new weapons systems were added to those scheduled for disposal
 (except the W79-1 artillery shell); and (7) acceleration of the rate of
 scheduled retirements.
 The Nuclear Weapons Stockpile Plan (NWSP), signed by the President,
 directs requirements for retirements. All warheads that are retired are
 scheduled for eventual dismantlement. The FY 1991-96 NWSP, issued in July
 1991, required a significant increase in weapons disassemblies. To meet
 this demand, the Department of Energy (DOE) increased capacity at Pantex
 to dispose of 1,800 weapons in FY 1992 and 2,000 weapons in FY 1993. The
 President's initiative to decrease the stockpile will cause the
 dismantlement backlog to increase further. This will require DOE to work
 at the 2,000 per year disassembly rate longer than originally planned.
 Where possible, these actions have been reflected in the FY 1993 budget
 request. Following the reductions announced in the President's State of
 the Union Address, Secretary Watkins announced the Department would be
 submitting a budget amendment to reduce P&S spending by about $200
 million. That amendment is not yet reflected in the budget figures. The
 proposed funding reductions will require closing facilities and reducing
 the workforce throughout the production plants.  Reduced P&S funding will
 also mean a slower rate of DOE Order compliance at a time of increasing
 pressures to achieve improvements in the conduct of all operations. Most
 significantly, reduced funding will result in some decline in nuclear
 competence at a time when there is great uncertainty about what will be
 expected of the nuclear weapons production complex in the future. What
 constitutes minimum competency is of critical importance in bringing us
 through this transition period, and we must work to minimize any adverse
 impacts for the production complex.
 Production and Surveillance accomplishments during FY 1991, included
 continued production activities for the W88 warhead for the Trident II
 Submarine-Launched Ballistic Missile System and delivery of the B61-10
 tactical bomb. While the Department completed delivery of the B61-10,
 this was not a new build, but a conversion from the W85/Pershing II
 warhead. In terms of programs completed in FY 1991 (disposal) these
 included the following systems, B43, W44, W50, and the W85.
 In FY 1991, the P&S program emphasized implementing the Secretary's new
 culture. The program operated under the philosophy that there is no higher
 priority than safety, environment, and the health of DOE employees and the
 public. Compliance with laws, regulations, and DOE guidance that safeguard
 the public and provide security for nuclear materials and weapons
 components was equally supported. The weapons production complex took
 significant strides in meeting the challenges of the new culture by
 performing critical self-assessments, responding to Tiger Team
 assessments, and developing and initiating corrective action plans that
 have resulted in a new discipline and conduct of operation at all sites.
 There was a collective commitment to bringing environment, safety and
 health into the forefront of plant operations throughout the complex.
 Tiger Team corrective action plans and follow-on  self-assessment programs
 provided a strong foundation for ES&H improvements.
 The FY 1992 Defense Authorization House Report 102-311 requires a report
 to Congress on nuclear weapons matters to both the House and Senate Armed
 Services Committees. The report is currently in preparation and will cover
 the nuclear weapons stockpile; tritium supply, production, and demand;
 warhead reuse; and operation of the Rocky Flats Plant.
                                   TOTAL FUNDING
                                  ($ IN MILLIONS)
                            FY 1991           FY 1992          FY 1993
                            Enacted      Enacted   As Spent    Request
 OPERATING EXPENSES        $2,492.7      $2,273.9  $2,401.4    $2,323.2
 CAPITAL EQUIPMENT            114.1          87.9      87.9        80.7
 CONSTRUCTION                 307.1         153.6     153.6       162.4
 TOTAL                     $2,913.9      $2,515.4  $2,642.9    $2,566.3
                              PRODUCTION AND SURVEILLANCE
                                TOTAL OPERATING EXPENSES
                                    ($ IN MILLIONS)
                                                               FY 1993
                                     FY 1991       FY 1992     REQUEST
 WEAPONS PRODUCTION AND-SUPPORT      $ 852.7     $   768.4     $ 713.6
 ENVIRONMENT, SAFETY AND HEALTH        292.3         313.5       351.1
 SAFEGUARDS AND SECURITY               182.1         193.1       195.0
   AND MAINTENANCE                     396.0         451.6       424.7
 MANAGEMENT AND ADMINISTRATION         368.0         401.5       372.3
 OTHER COSTS                           274.2         273.2       266.5
 SUPPLEMENTAL ADJUSTMENT               127.4        (127.4)          0
 SUBTOTAL, P&S OPERATING EXPENSES   $2,492.7      $2,273.9    $2,323.2
 The functional programs within the P&S operating expense category are
 summarized below.
 The weapons production support request for FY 1993 is $713.6 million
 which represents a 7 percent decrease from FY 1992 level. This category
 includes activities such as processing, fabrication, assembly, evaluation,
 maintenance, dismantlement and disposal of nuclear weapons, and supporting
 activities including quality supervision and control, quality assurance,
 facility startup and standby, process development and other mission
 support. The FY 1993 request reflects substantial savings from workload
 eliminated by the President's nuclear weapon reduction initiatives as
 announced on September 27, 1991. Further reductions announced January 28,
 1992, are not reflected in the budget figures. The emphasis of this
 program will correspondingly shift from fabrication and assembly of
 warheads to dismantlement and disposal activities.  Stockpile maintenance
 and surveillance activities will continue with emphasis on safety,
 security, reliability, environmental soundness, and cost effectiveness.
 The ES&H request for FY 1993 is $351.1 million. This represents about
 a 12 percent increase over FY 1992 and is the only area that reflects
 real growth. Program requirements in these areas are driven by Federal,
 State and local laws and regulations and DOE directives. Environmental
 activities .include auditing and evaluation, effluent and environmental
 monitoring and surveillance, air release activities, water discharge
 activities, solid waste activities, and permitting. A large portion of
 the growth in this program is at Y-12 and results from implementation
 of the Tennessee Department of Health and Environment Agreement in
 Principle. Waste Management activities include refuse collection,
 handling, removal, disposal, and plant sanitation. The Health program
 supports those activities required for industrial hygiene, radiological
 protection, and occupational medicine. Safety activities are concerned
 with fire protection, industrial safety, nuclear facility safety,
 packaging certification, facility safety design, and risk management.
 The Safeguards and Security request for FY 1993 is $195 million. This is
 essentially flat when compared to FY 1992 as this program has experienced
 significant growth in FY 1991 and FY 1992, and progress has been made in
 remediating,deficiencies identified by Security Inspection and Evaluation
 reviews and operating in accordance with Master Safeguards and Security
 Agreements. This program provides for nuclear material control and
 accountability activities, physical security, technical security, and
 personnel activities.
 The Utilities, Plant Engineering, and Maintenance request is $424.7
 million. This is approximately a 6 percent decrease compared to FY 1992 as
 engineering activities in support of construction efforts within the
 production complex have been stabilized pending a complex reconfiguration
 decision in August 1993. The plant engineering program supports activities
 such as: preliminary cost estimate, preliminary design proposals,
 conceptual designs, cost/schedule control, value engineering, and
 computer-aided design/computer- aided engineering. The utilities program
 support activities are required to provide electricity, fuels, water,
 sewer, and utility support services. Normal escalation increases within
 this program in FY 1993 are offset by energy conservation and
 implementation of competitively bid contracts.  The maintenance program
 includes manufacturing related maintenance, equipment maintenance,
 facilities maintenance, and plant maintenance.
 The Management and Administration request is $372.3 million, which. is
 a 7 percent reduction from FY 1992 resulting from efforts to downsize
 the production complex. This program includes general management and
 administrative functions such as financial management, personnel,
 industrial relations, public relations, contractor award fees, mail
 services, payment of State and local taxes as well as management and
 administration of operational surety and nonweapons quality assurance
 The request for other costs totals $266.5 million, a 2 percent reduction
 from FY 1992. Included in this category is the Emergency Operations
 program, which experiences an 11 percent growth over FY 1992 driven by a
 Secretarial initiative to enhance the capability of the Accident Response
 Group that responds to emergencies involving weapons or radioactive
 material. Also included in this category is the safe, secure
 transportation program which provides for transporting weapons, weapons
 components, and materials from DOE production plants and storage sites or
 other final destinations. A 3-year  expansion of fleet, couriers, and
 vehicles was completed in FY 1992 to implement changes in air shipment
 policies. The FY 1993 request adds additional couriers and fleet
 maintenance costs resulting from expanded use of ground transportation,
 for safety reasons, first, but also to accommodate the large workload due
 to the increased numbers of weapons being retired. Lastly, this category
 includes the Federal support program which provides for management and
 oversight of the production complex. The reduced request is based on lower
 requirements for contractual support.
                      CAPITAL EQUIPMENT SUMMARY
                           ($ IN MILLIONS)
                                                         FY 1993
                               FY 1991      FY 1992      REQUEST
 BASIC EQUIPMENT                $ 98.2       $ 75.2       $ 65.2
 P&S COMPUTERS                    15.9        12.7          15.5
 TOTAL                         $ 114.1     $  87.9      $   80.7
 Capital Equipment for weapons P&S is reduced about 8 percent compared to
 FY 1992. The request provides for basic equipment and major automated data
 equipment. This request provides the minimum level of support to prevent
 further increases in obsolete and worn-out equipment. There are four major
 items of equipment requested: (1) Electron Beam Welder, Kansas City Plant,
 TEC $1.2 million; (2) Arc Sawing System, Y-12 Plant, TEC $1.5 million; (3)
 Automated Measurement Instrument, Los Alamos National Laboratory (LANL),
 TEC $1.2 million; and (4) Negative Pressure Chilled Water, LANL, TEC $1.5
                             CONSTRUCTION SUMMARY
                               ($ IN MILLIONS)
                                                              FY 1993
                                    FY 1991      FY 1992      REQUEST
     WEAPONS SYSTEMS                $ 13.4       $      0     $     0
       PROGRAM                       106.8           47.5        87.1
 PRODUCTION SUPPORT FACILITIES        72.7           12.9         4.8
 GENERAL PLANT PROJECTS               26.1           34.7        27.4
 TOTAL PROGRAMMATIC CONSTRUCTION     219.0           95.1       119.3
 ENVIRONMENT, SAFETY AND HEALTH       19.2           25.0        43.1
 SAFEGUARDS AND SECURITY              68.9           33.5           0
 TOTAL P&S CONSTRUCTION            $ 307.1       $  153.6     $ 162.4
 The request for P&S construction totals $162.4 million. During the FY 1993
 budget cycle, the Department completed a review of all construction
 activities within the production complex. Those included in this request
 are considered necessary despite the reduced workload and a pending
 reconfiguration decision. There are four new project starts. The first is
 Life Safety Upgrades at the Y-12 Plant which will provide upgrading and
 modernization of fire protection systems, electrical equipment, mechanical
 systems, and emergency electrical generators, which provide power for
 critical life safety systems. This project is part of a program which is
 intended to upgrade the Y-12 Plant's compliance with the National Fire
 Protection Association codes relating to life safety. The scope of this
 project extends to over 50 buildings at Y-12.
 The three other new starts are under the Facilities Capability Assurance
 Program (FCAP). At Rocky Flats, there is the Plutonium Facilities Heating
 Ventilation and Air Conditioning (HVAC) Restoration Project which will
 restore aging heating, ventilation, and air conditioning systems in 23
 buildings. The revitalization of the HVAC and utility systems was critical
 to continued plutonium operations and is still necessary to support waste
 management and decontamination and decommissioning activities. At Y-12,
 there is a project to replace deteriorated facilities, which will design
 and construct production support facilities. The scope of this project
 covers the demolition of three existing buildings and the decommissioning
 of parts of three other buildings. The decommissioned space will be placed
 in standby mode. The functions proposed for this are presently located in
 six different buildings which will be over 50-years old when replaced.
 Once completed, savings in operating costs can be realized as a result of
 this consolidation and reduced maintenance. At the Kansas City Plant,
 there is the Upgrade of Materials Engineering Laboratory, which will
 upgrade 23,000 square feet of existing laboratory space and construct a
 6,500 square foot addition. This laboratory is needed to evaluate
 material properties and to develop material fabrication processes. The
 existing laboratories suffer from severe overcrowding as the result of
 continued expansion and addition of evaluation processes without
 additional space. This situation will only worsen as the nonnuclear
 consolidation plan matures.
                    FY 1993 CONSTRUCTION - NEW STARTS
                            ($ IN MILLIONS)
                                                    FY 1993        FUTURE
                                         TEC        REQUEST        YEARS
     Y-12 PLANT (ES&H)                 $ 34.3       $   2.7      $   31.6
  88-D-122, SUBPROJECTS   (FCAP)
       RESTORATION, RF PLANT               20.7          3.3       17.4
       FACILITIES, Y-12 PLANT              26.1          2.7       23.4
       LABORATORY, KC PLANT                13.2           .5       12.7
          NEW STARTS                    $  94.3      $   9.2    $   85.1
                          MATERIALS  PRODUCTION
 Historically, funding for the Materials Production program provided for
 the production of new or virgin plutonium and tritium in N-Reactor at
 Richland, Washington, and the Savannah River Site (SRS) reactors at
 Aiken, South Carolina. Additionally, spent fuels from the Navy's
 nuclear propulsion reactors and from research reactors were reprocessed,
 and the recovered uranium was recycled into DOE production reactors.
 Currently, since there are no requirements for new weapons production,
 no reactor production of new plutonium will be needed. Furthermore, the
 return of large numbers of weapons for dismantlement will result in
 large quantities of plutonium reserves in the form of retired pits.
 Tritium requirements will be met primarily from recycle and from the
 operation of one reactor, K-Reactor, if necessary. The FY 1993 budget
 request reflects this strategy, and has been reduced to reflect the
 decision to place the L-Reactor in a minimum maintenance condition and not
 operate the New Special Recovery processing facility.
                            REACTOR STRATEGY
 To briefly recap this strategy, the Secretary of Energy has determined
 that at most only one of the three reactors, the K-Reactor, will be
 needed to meet stockpile requirements. The L-Reactor will be maintained
 in a long-term minimum maintenance condition. P-Reactor operation has
 been terminated, and in August 1991 the Hanford N-Reactor was terminated
 as a backup production source for tritium.
 Since August 1988, the production reactors at SRS have been in an extended
 outage while safety concerns are being addressed. Four principal areas for
 improvement have been identified: design bases and system performance,
 human performance, management systems and practices, and DOE on-site
 technical vigilance and oversight. The DOE's objective is to assure that
 its reactors can provide reliable nuclear materials production capability
 in a manner that protects the safety and health of its workers and the
 public, as well as the environment.
 A Record of Decision (ROD) on Reactor Operations was issued on February
 4, 1991. The ROD stated that DOE would continue to operate K- and
 L-Reactors at SRS, and terminate operation of P-Reactor in the immediate
 future. On December 9, 1991, the Secretary of Energy authorized the change
 in L-Reactor status from a 1-year restart capability to a minimum
 maintenance condition, which preserves the reactor so that it can be
 safely restarted 3 or more years after a restart decision is made. On
 December 13, 1991, the Secretary of Energy authorized the restart of
 K-Reactor, P-Reactor has been defueled and placed in cold standby.
 K-Reactor will be restarted to demonstrate, over an approximate 1-year
 period devoted to significant testing, that it is a viable contingency
 production source of tritium. The Department then plans to shut it down
 and place it in a low-cost standby mode until we are assured of long-term
 tritium availability from a new production reactor or other source.
 During K-Reactor startup testing, problems were identified. with the
 safety rod latch mechanisms and several of the 12 main heat exchangers
 in the plant, one of which caused the leak of tritiated water. Defective
 safety rod latches have been repaired and three heat exchangers have been
 replaced. Resumption of the startup test program was authorized on May 5.
 The Department is taking a deliberate and cautious approach to the startup
 testing program to assure safe operation of the plant.
 Per the Consent Order between the State of South Carolina and DOE, the
 Department is authorized to operate K-Reactor until December 31, 1992,
 pending completion and tie-in of the cooling tower, which is scheduled
 for completion in the 4th quarter of FY 1992.
 A lawsuit was filed by the Natural Resources Defense Council, under the
 Clean Water Act, alleging that K-Reactor operation could not be resumed
 until thermal discharge standards, requiring the completion of the
 cooling tower, were met. On August 15, 1991, the South Carolina District
 Court ruled that the plaintiffs had no standing in the court and also
 denied the plaintiff's request for preliminary injunction. On December 13,
 1991, the Fourth Circuit Court of Appeals reversed the lower court's
 ruling on standing, but upheld the denial of preliminary injunction and
 remanded the case back to the District Court for hearing.
                        PROCESSING STRATEGY
 The plutonium facilities at SRS are now in a period of transition from
 supporting reactor plutonium production to plutonium processing functions.
 The New Special Recovery (NSR) Facility was scheduled for startup in FY
 1992. The NSR Facility which would permit the recycle of plutonium from
 retired weapons will not be started up until firm requirements clearly
 mandate its need. Spent fuel containing plutonium and plutonium scrap will
 not necessarily be disposed of as waste. Some of the plutonium may be
 recovered to improve the ES&H aspects of the residual material in terms of
 storage or disposal.
                        MATERIALS PRODUCTION
                           TOTAL FUNDING
                          ($ IN MILLIONS)
                                   FY 1991    FY 1992      FY 1993
                                   ACTUAL     APPROP.      REQUEST
   REACTOR OPERATIONS             $ 782.5    $ 584.4     $ 553.2
   PROCESSING                       629.0      530.2       522.5
   SUPPORTING SERVICES              293.8      304.5       308.8
   PROGRAM DIRECTION                 42.5       43.2        66.5
   ENRICHED MATERIAL                117.8          0           0
     SUBTOTAL, OPERATING         $1,865.6   $1,462.3    $1,451.0
   CAPITAL EQUIPMENT                105.6       91.2        83.9
   CONSTRUCTION                     276.9      323.4       241.8
          TOTAL REQUEST          $2,248.1   $1,876.9    $1,776.7
 For FY 1993, the budget request for Materials Production is $1.77
 billion. This is a decrease of $100 million from the FY 1992 appropriation
 of $1.87 billion and reflects the continuing downward trend due to
 declining demand for nuclear materials.
 Some of the major program decisions embodied in the FY 1993 budget
 submission are the decision to place L-Reactor in a minimum maintenance
 condition; the decision to not operate the New Special Recovery Facility
 within the F-Canyon processing facility at SRS; and the construction
 ramp-down of the Fuel Processing Restoration Project at the DOE Idaho
 Field Office (ID).
 The budget submission also reflects the commitment to the Department
 of Energy's operating philosophy, which requires that all facilities
 operate in a manner protective of the safety and health of the workers and
 the public, as well as the environment.
 The budget request for Materials Production is organized by program
 activities, and discussed below by site. The Savannah River Site funding
 constitutes the major portion -- 80 percent -- of the budget request. The
 Secretary's decision to phase out reprocessing operations at the Idaho
 Chemical Processing Plant and the Savannah River H-Canyon will result in
 an immediate budget savings and is contained in the FY 1993 budget
 amendment. The remaining 8 percent of the budget submission includes
 production support at our DOE Oak Ridge Field Office, Y-12 Facility,
 materials disposition activities, complex-wide support to SRS and ID, and
 program administration costs.
                             MATERIALS PRODUCTION
                             SAVANNAH RIVER SITE
                             ($ IN MILLIONS)
                                       FY 1991     FY 1992      FY 1993
                                       ACTUAL      APPROP.      REQUEST
 OPERATING EXPENSES                    $1,224.6    $1,155.8    $1,160.6
 CAPITAL EQUIPMENT                         76.0        59.5        61.7
     FY 1993 PROJECT STARTS                   0           0         3.8
     FY 1992 PROJECT NEW STARTS               0        45.8        50.5
     90-D-149 PLANT FIRE PROTECTION        13.1        39.0        44.2
     86-D-149 PRODUCTIVITY RETENTION       42.4        33.5        18.4
     ALL OTHER                             94.6        90.8        66.1
          TOTAL CONSTRUCTION              150.0       209.1       183.0
           TOTAL REQUEST               $1,450.6    $1,424.4    $1,405.3
 Funding for the SRS remains essentially the same as last year.  However,
 operating expenses increase slightly to fund additional DOE Federal staff
 at the site. This increase is more than offset by the reduction in new
 project starts. The $3.8 million in new starts will fund three essential
 ES&H projects on site.
 The Department remains committed to resuming, as soon as possible, the
 safe production of tritium at SRS in order to properly test systems
 modifications and demonstrate that these facilities can continue to
 provide material.
 The FY 1993 budget request for K-Reactor assumes the startup and test
 operation of the reactor as soon as the startup problems mentioned earlier
 are corrected. Activities funded in FY 1993 will include routine
 maintenance, fire protection, safety analysis upgrades, extended
 maintenance of all vital electric, electronic and mechanical systems, and
 ongoing initiatives to upgrade facilities to commercial nuclear standards.
 Development of procedures and upgrades to training programs will continue.
 Defense Nuclear Facility Safety Board issues and recommendations will be
 addressed. Funding for infrastructure and services such as electrical
 power, steam, and domestic water will be required. Finally, indirect
 charges for laboratory support, ES&H activities, and security services
 will be incurred.
 FY 1993 efforts at L-Reactor will involve the reactor's defueling;
 shutdown of reactor equipment and systems in a protected condition to
 prevent deterioration; and maintenance of the reactor in a defueled,
 protected status, which would permit any future decision to refuel and
 restart.  Currently committed and planned L-Reactor upgrade activities
 will be discontinued.
 The Department does not envision producing plutonium-239 in production
 reactors for the foreseeable future. In addition, sufficient Pu 238
 exists tb meet known and firm projected mission needs.
 Operation of the Uranium Solidification Facility (USF) was suspended
 in FY 1992 because of cost and schedule concerns. The USF project will
 provide a facility at the SRS to convert uranium solution to a powder.
 This conversion process is a key step in the recovery and recycle of
 enriched uranium from irradiated reactor fuel elements. The recovery of
 this material is highly beneficial from both a cost and a radioactive
 waste minimization standpoint. Without operation of the USF, either
 processing of reactor fuel would cease after all uranyl nitrate tanks
 are filled or new tanks would have to be constructed. An additional $18
 million for this project will be required in FY 19.92. The SRS budget
 submission for FY 1993 also includes an additional $17 million for this
 project, for a total estimated cost increase to the project of $36
                       MATERIALS PRODUCTION
                         ($ IN MILLIONS)
                                    FY 1991     FY 1992      FY 1993
                                    ACTUAL      APPROP.      REQUEST
 OPERATING EXPENSES                $ 103.3     $ 138.2     $   149.1
 CAPITAL EQUIPMENT                     8.0        12.5          13.0
     GENERAL PLANT PROJECTS            5.6         9.3          11.2
       UPGRADE                         6.0        12.0           1.6
     85-D-13g, FUEL PROCESSING
        RESTORATION                   87.5        82.7          40.5
       TOTAL CONSTRUCTION             99.1       104.0          53.3
         TOTAL REQUEST          $    210.4   $   254.7      $  215.4
 On April 29, the Secretary announced his decision to phase out the
 reprocessing of spent fuel by the Department. The Department submitted
 this item as part of the FY 1993 budget amendment request to the Office
 of Management and Budget. The decision to end reprocessing is based on
 the dramatic initiatives by the President to reduce the nuclear weapons
 stockpile and that enough HEU exists in the inventory and can be recycled
 from retired weapons to meet projected needs for decades.
 The termination of reprocessing of spent fuel will result in a change
 in employment levels at the Idaho and Savannah River facilities. The
 employment impacts at Idaho will mean the loss of approximately 500
 construction project jobs and 550 operating jobs at the ICPP.
 The reduction at the Savannah River Site's H-Canyon reprocessing plant
 will occur over a 5 to 6 year period of time. No immediate impact is
 expected. This will allow the plant to finish processing work required to
 support the fuel needs for a scheduled NASA mission and to stabilize
 liquid solutions currently stored in the H-Canyon.
                         MATERIALS PRODUCTION
                          ALL OTHER PROGRAMS
                           ($ IN MILLIONS)
                                     FY 1991      FY 1992       FY 1993
                                     ACTUAL       APPROP.       REQUEST
 ALBUQUERQUE                      $   31.9      $  9.4         $  11.7
 OAK RIDGE                           241.1        61.9            46.4
 RICHLAND                            228.4        42.6            51.7
 SAN FRANCISCO                        67.9         0.9             1.0
 ALL OTHER                            17.8        83.0            55.6
     PROGRAM DIRECTION                (7.2)       (7.4)          (14.5)
     REPROGRAMMING RESERVE              (0)      (40.1)             (0)
     SUPPORT                         (10.6)      (38.5)          (40.7)
      TOTAL                        $ 587.1     $ 197.8         $ 156.0
 The Materials Production budget requests $156 million for other DP sites.
 Approximately $40 million is currently being retained in a Headquarters
 reserve account in FY 1992 for reprogramming to the USF, to support the
 current level of Federal staffing within the Materials Production program,
 and to support increases to two essential security projects at SRS. After
 adjusting for this reprogramming, the level of funding for all other
 programs in FY 1993 is approximately the same level of funding as will be
 expended for similar activities in FY 1992. These activities are discussed
                             MATERIALS DISPOSITION
 In FY 1991, the Department transferred a number of DP facilities to the
 Office of Environmental Restoration and Waste Management (EM). A portion
 of the responsibility of the Materials Production program is to conduct
 materials identification and characterization activities, as well as
 provide for the safeguard and storage of nuclear materials remaining at
 DOE facilities as a result of past DP operations, regardless of whether or
 not DP has a continued presence at those sites. A total of $40.4 million
 is requested for materials disposition activities.
                                 OAK RIDGE
 The FY 1993 request for Oak Ridge is $41.4 million, and includes funding
 for the Y-12 Plant, Feed Materials Production Center at Fernald, and the
 Oak Ridge National Laboratory (ORNL). Funding at the Y-12 Plant continues
 to decrease as the support to the SRS reactor operations for tritium
 production decreases. Minor funding for materials disposition activities
 at Fernald will continue to be required. The budget request for ORNL will
 support a number of activities relating to the production, storage, and/or
 distribution of miscellaneous nuclear material isotopes.
                          OTHER FUNDING ISSUES
 I would like to bring to your attention two funding issues in which the
 Department currently is involved relating to the previous DOE contract at
 SRS with E.I. DuPont de Nemours (DuPont).
                          PENSION FUND CREDIT
 Before Westinghouse became the prime contractor for the SRS, replacing
 DuPont, the DOE and DuPont jointly managed a pension fund for DuPont
 employees. Under the previous contract with DuPont, a pension fund was
 established to cover all DuPont employees. The DOE has determined that
 the pension fund was overcompensated by DuPont. DuPont and DOE have
 completed negotiations to return $545 million plus interest from the
 pension fund to the DOE. The Department estimates it will receive $400
 million towards the repayment in FY 1993 and will apply those funds to
 meet spending needs. This enabled the Department to reduce its
 appropriation request for the Atomic Energy Defense Activities by $400
                         SEVERANCE PAY LAWSUIT
 In 1987, DuPont advised the Government that it would not seek renewal
 of its contract. When Westinghouse assumed operation of the SRS in 1989,
 they agreed to hire existing DuPont employees. DuPont submitted to the DOE
 a claim for reimbursement of $64 million in severance pay which DuPont had
 paid to its employees against the instructions of the DOE. The DOE denied
 DuPonts' claim and DuPont filed suit in the U.S. claims court. The
 conclusion of the claims court is that U.S. must comply with the terms
 of its former contract, and must pay DuPont $64.4 million plus interest.
 No money has been budgeted by DOE for payment of the severance pay claim.
 The DOE is appealing the claims court decision to the Federal Circuit
                             WEAPONS PROGRAM DIRECTION
                          WEAPONS PROGRAM DIRECTION BUDGET
                                   ($ IN MILLIONS)
                                                            FY 1993
                                   FY 1991     FY 1992      REQUEST
    OPERATING EXPENSES             $ 104.7     $ 161.8      $ 325.9
    CAPITAL EQUIPMENT                  1.7         2.2          3.9
    CONSTRUCTION                         0           0         26.0
 TOTAL PROGRAM DIRECTION           $ 106.4    $  164.0      $ 355.8
 Weapons Program Direction provides funds to support Federal staff
 and the Department's effort to reconfigure the nuclear weapons complex.
 Within the $355.8 million request, $182.7 million is necessary for
 expenses related to Federal staff that will fund direct,personnel related
 expenses, supporting services, and capital equipment at the following
 locations: Office of the Assistant Secretary for Defense Programs; Office
 of the Deputy Science and Technology Advisor (Defense); Deputy Assistant
 Secretary for Weapons Complex Reconfiguration; Rocky Flats Program Office;
 Deputy Assistant Secretary for  Planning and Resource Management;
 Self-Assessment and Emergency Management; Deputy Assistant Secretary for
 Military Application; DOE Albuquerque Field Office, DOE Nevada Field
 Office, DOE San Francisco Field Office, and the Community Assistance
 Program at Los Alamos, New Mexico. An increase of $44.7 million is
 required to cover full-year salary requirements for increased staff
 approved for FY 1992; increased Headquarters contractual support for
 administrative and management implementation of DOE Orders and
 instructions; and Defense Programs payments for a larger share of the
 Headquarters overhead costs for space, supplies, telecommunications, etc.
 The weapons complex reconfiguration activity within Program Direction is
 $173.1 million of the $355.8 million request, an increase of $147.1
 million over FY 1992. FY 1993 will see completion of the Programmatic
 Environmental Impact Statement for Reconfiguration, which will include the
 environmental analysis for the New Production Reactor. Included in the
 increase for Reconfiguration is $20 million for the development and
 demonstration of emerging technologies to improve the operating efficiency
 of the reconfigured complex and a planning estimate of $87.9 million ($20
 million in construction funds) to begin consolidation of the nonnuclear
 manufacturing facilities assuming a Finding of No Significant
 Environmental Impact.
 We must continue to support changing stockpile requirements and to
 maintain nuclear competence in our production complex and weapons
 laboratories so as to assure that we have a safe, secure, reliable, and
 survivable nuclear deterrent. At the same time, we must disassemble
 thousands of weapons being returned as a result of the President's
 initiatives and manage the reclaimed nuclear materials. With the dramatic
 world changes, the Department will have an increasingly important role to
 play in the control of weapons of mass destruction, in helping to prevent
 the spread of such weapons and in providing the technical support to an
 enhanced intelligence program. Finally, the Department must carry out
 these vital national security missions not only within a complex which is
 safe, secure, and environmentally sound, but also within one which is
 cost-effective, efficient and commensurate with a significantly reduced
 nuclear weapons stockpile.

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