STATEMENT OF

WILLIAM A. WEINREICH
SENIOR VICE PRESIDENT,
MASON & HANGER CORPORATION
AND
GENERAL MANAGER, PANTEX PLANT, U.S. DEPARTMENT OF ENERGY

Mr. Chairman, Members of the Committee, my name is Bill Weinreich. I am a Senior Vice-President with Mason & Hanger Corporation and the General Manager of the Department of Energy's Pantex Plant near Amarillo, Texas. Thank you for inviting me to testify today. I am pleased to have this opportunity to comment on some of the strategic and policy-related issues facing the Department of Energy's weapons complex. Because it is no longer designing, testing, or building new nuclear weapons, the Department of Energy (DOE) is embarking on a major new Stockpile Stewardship and Management Program to extend the life of existing weapons beyond their original design, while preserving the safety and reliability of the nuclear weapons stockpile. This "science-based" approach is designed to respond to the issues associated with an aging stockpile without using previous methods such as new designs and underground nuclear testing.

This new program will require significant changes and improvements to DOE's Weapons Complex as a whole-not only in terms of facilities and capabilities, but also in the areas of overall management and internal and external oversight. Not only must we ensure that we extend the life of the Department's aging R&D and manufacturing facilities, but also, we must update our capabilities to allow us to successfully and safely meet this critical, new obligation.

I have a unique perspective on the challenges facing the weapons complex which I would like to share with you today that is based on my role as Manager of the Pantex Plant and my experience with the Nuclear Navy Program.

Pantex is one of four production facilities in the complex. It is responsible for assembling and dismantling nuclear weapons, evaluation and maintenance of nuclear weapons, fabricating chemical high explosive components, and storing plutonium components removed from dismantled weapons.

Pantex has an outstanding safety record and has been an exceptionally good custodian of the Texas High-Plains environment. The safety of people and protection of the environment are always first at Pantex. We have demonstrated that these priorities are completely compatible with meeting our critical defense mission at the highest levels of performance.

Prior to the end of the Cold War, Pantex employees repeatedly answered the readiness requirements of U.S. Nuclear Policy. Through five decades of demanding change, Pantex workers demonstrated dedication, competence and flexibility in responding to surges in production demands and growth in the number of concurrent new weapons systems that required assembly. Now, I'm proud to say, they are exhibiting the same kind of commitment with the safe dismantlement, downsizing and long range stewardship and management of the aging stockpile.

At the same time, we have significant challenges facing Pantex and the weapons complex as a whole. These challenges threaten to undercut our ability to continue our mission in a safe and effective manner and to support the changing needs of the stockpile in the future.

As a result of my experience with the Nuclear Navy Program, I've learned about managing intricate nuclear operations such as those at Pantex. The Nuclear Navy's system is proven and effective. It involves a clearly defined and stable mission; clear lines of accountability and responsibility; required technology; rigorous training and qualified employees; appropriate standards and the effective application of those standards; careful attention to maintaining the needed formality in operations; performance validation based on line self-assessment, germane measurement, independent oversight; and a practical effective management system that integrates these components into a seamless results-oriented system.

Without this system, complex nuclear, nuclear explosive and high explosive operations can degrade quickly and easily, raising questions of safety and long-term reliability. It is extraordinarily difficult to return operations to the highest performance levels and ensure continued safety and reliability after operations have degraded.

These principles were cultivated and well-understood by the Navy. The civilian nuclear power industry learned these lessons only after a series of accidents and a number of high level safety reviews forced them to focus on the problem. This experience is instructive as we discuss ways to extend the life of the weapons complex and move into the future.

The Pantex Plant is one of two production sites, along with the Kansas City Facility, that, regardless of stockpile levels, will have a vigorous ongoing production function. Our production activities will not decline significantly in the near term, even if the stockpile continues to decline. In fact, our workloads are likely to increase in the event that we continue to dismantle weapons while we also perform life extension programs on the systems which will remain in the stockpile. Our operations are critical to the safety and reliability of the stockpile. We are a key component in the overall weapons complex team.

The operations at Pantex are highly complex. When you go out on the floor at Pantex and see the operations there, you quickly understand the importance of the training, skills and experience of our workers. We conduct these complex operations with technicians who are highly trained and experienced in very specialized areas. There is no margin for error in their performance. We do not surround our technicians with scientists or engineers to conduct these activities. It would not be cost effective or appropriate to conduct operations in such an environment.

We use a system of detailed, written procedures with the necessary specifications and standards that our workers follow closely. But, there is still a great deal of information and knowledge needed to design and perform the job. This comes from experience, training, practice and rigorous performance. That body of knowledge is one of the keys to our safe, successful performance over the years.

Under the Stockpile Stewardship and Management Programmatic Environmental Impact Statement (SSMPEIS), DOE considered moving the Pantex functions to the National Laboratories in an effort to consolidate the functions of the weapons complex at fewer sites. The SSMPEIS has now confirmed and validated that the mission at Pantex should be downsized, but continue because it would be cost prohibitive to transfer our activities to another site.

I believe that was the right decision from an operations standpoint as well. The Pantex function cannot be moved without DOE losing the years of training, experience and a culture that have made its Pantex operations safe and reliable for the past 40 years. That loss would be irreversible.

The same concerns apply to maintaining the capabilities, infrastructure and workforce at the Pantex Plant as it is downsized for the future. We simply cannot allow the capabilities or performance at Pantex Plant to degrade. My fear is that we are quickly approaching a point where problems that are now manageable with relatively minor investments will require major investments later to avoid potentially serious adjustments to schedules or impacts on safety and reliability. If we allow Pantex Plant - and the other production components of the weapons complex as a whole, to languish - we may reach a point where truly safe operations and support for the stockpile are impossible.

The people, facilities, equipment and technologies at Pantex are a critical part of a carefully balanced system. We need to keep those facilities and capabilities current with emerging technologies from the laboratories and the other production plants to ensure that the entire system continues to perform at the highest levels.

We have funding issues for infrastructure requirements that we are working with the Department to resolve. I urge you to continue your support for funding in this area. We also have funding concerns in the operations arena. We are discussing with the Department avenues to resolve those issues and to build in greater efficiencies at Pantex in the future.

For example, our mission workload has not decreased over the past 5 years. In fact, it has increased and may increase further in the near term before decreasing. Stockpile life extension programs were not part of the financial considerations in the SSMPEIS; the impact of these programs were to be considered at a later date. However, these programs are being accelerated and we are having to expend funds now for enhanced surveillance activities and advanced manufacturing technologies.

By closely studying our processes to eliminate unnecessary steps and by evaluating overhead functions to eliminate non-value adding activities, Mason & Hanger has been able to achieve cost reductions of $31 million in FY95 and $23 million in FY96. This has enabled us to absorb increased requirements related to the weapons mission as well as enhance safety. These efforts to become more streamlined as we proceed with downsizing will continue. However, these new mission activities must be factored into the planning soon or downsizing efforts and funding will not be properly correlated with actual needs.

Also, we are approaching the point where further economies in operating costs will be dependent upon the investment in new technology strategies for manufacturing, tooling production, integrated safety, product quality and safety, environmental monitoring, and safeguards and security. We are identifying requirements and opportunities in each of those areas as well as the potential to eliminate unnecessary requirements that result in higher costs.

At the same time that cost reduction pressures have been applied, the compliance and management practice requirements for ES&H have been increasing. As measurement technology improves, the regulatory expectations for environmental care become more stringent. As concerns for health and safety of workers and the public increase, the level of expected standards also rises.

Advanced technology must be applied to offset the need for additional manpower to meet these increasing levels of compliance and public acceptability. The application of ES&H technology also will make it easier to integrate safety and environmental protection into the line operations, thus reducing the high cost of manpower for staff oversight.

Mr. Chairman, I want to stress that these are all manageable issues. At Pantex, we have identified an average of approximately $5 million in infrastructure requirements per year to ensure that the Pantex system can continue to meet its critical weapons complex role in the future. But in the long run, based on the lessons of the Nuclear Navy Program and the Civilian Nuclear Power Industry, these are expenditures that must be made. They must be made now to avoid more serious problems in the future-the potential impact on stockpile safety and reliability and on operational safety.

Thank you again for the opportunity to appear before you today, Mr. Chairman. I would be pleased to respond to any questions you may have.