Terry began by outlining three key points he planned to address during the first half of the hour:
- How did we get here?
- What is Work Force Restructuring (WFR)?
- What is LANL’s strategic response?
A process implemented by NNSA across the weapons complex triggered the WFR process, not just the proposed budget for FY08.
- LANL has seen declining funding from FY02 to FY07
- The proposed LANL Defense Program budgets for FY08 show a steep decline (the trigger event). In the sub-bullets below the reductions indicate budget cuts that affect the work force (construction projects are not included, for example).
- The President’s budget shows a reduction of $80M
- The House budget shows a reduction of $188M
- Work Force attrition in FY06 and FY07 was at an all-time low
Terry then showed data for Budget Authority (BA) versus costs for FY89 through FY07. From FY89-FY99 the laboratory generally spent (cost) what it was authorized (BA) for a balanced condition. For FY00-FY03 our costs were less than the BA, resulting in an accumulation of carryover funds (or budget surplus, in any given year). For FY04-FY07 our costs have exceeded our BA, and we have used up the carryover funds accumulated from FY00-FY03, and we are now in a “balanced” scenario where we have little flexibility to respond to budget reductions. We are therefore ill equipped to respond to a budget “crisis.”
Terry then discussed staffing levels at the end of FY06 and FY07 respectively. The data are given in the following table.
Terry emphasized that postdocs represent the future of science at the Laboratory, and since our strategy is to become the premier Science Laboratory for National Security it is important to maintain our science capability through this pathway. He also expressed concern about the reduction in the number of students, and hypothesized that this might be due to additional requirements for mentors in the post-2004 era.
Terry then summarized the termination and hiring activities in PADSTE for FY2007.
217 individuals have terminated, including 61 retirements, 73 postdocs (as part of the normal “churn”), and 76 voluntary terminations. There have been 187 hiring actions, including 26 conversions of postdocs and 32 conversions of students to regular or limited term positions, and 129 external hires. This represents a net reduction in the PADSTE work force of 30 for the past fiscal year. In the laboratory there were approximately 200 external hires last year.
Only 107 individuals chose to retire in FY2007, the lowest annual total since 1969 while about 500 retired in FY05 and about 350 retired in FY06.
Terry then described the FY06 Operations Costs per FTE – a metric of budget flexibility– for LANL as compared to other national laboratories. A higher number represents greater flexibility. The data are as follows.
Terry concluded the discussion of the first topic by emphasizing that the proposed WFR is not a response to a single budget or appropriation issue.
2. What is Work Force Restructuring?
Work Force Restructuring is a process that is driven by Section 3161 of the National Defense Authorization Act of 1993, an act passed by Congress during the time of the “Peace Dividend” after the end of the Cold War. The DOE had to reduce the size of the weapons complex at that time, and this act provided the consistent mechanism to do that. The DOE Office of Legacy Management is the federal agency that administers implementation of the provisions of this act. Funding was provided when the act was passed to support implementation of the act, but such funds are not available today. Sites must now provide their own funding to implement the provisions of this law.
WFR consists of two pieces.
- Self Selected Voluntary Separation Program (SSVSP)
- Involuntary Separation Program (ISP)
- Medical Coverage
The Laboratory is in the process of submitting the specific detailed plan to DOE for review and approval. The Laboratory plan includes an incentive for the SSVSP, but details cannot be shared until the plan is approved.
Terry described the three basic elements of the ISP.
- Inventory of skills (to match the future mission)
- Defined by DOE (COCS or Common Occupation Classification System codes, one assigned to each individual)
- Refined by function (each individual is assigned a functional job title that represents their job today, and does not take into account degrees or prior jobs)
- Targets and caps
- The targets are driven by how many people the Laboratory can support, are dependent on funding sources, and vary by organization, and are assigned at the AD level.
- The caps are driven by the budget shortfall areas and have been assigned at the AD level – both direct and indirect funded organizations are affected.
- A very small number of individuals, identified by mission critical functionality, may be excluded from both the voluntary and involuntary processes.
3. What is LANL’s strategic response?
Terry outlined the following strategy to support the future vision of the Laboratory.
- We must strive to keep the best and the brightest
- Continue limited term hiring in accordance with the provisions of Section 3161
- Address salary compression (through the compensation program design) to allow for non-management salary growth in the technical arena
- Continue our strategic initiatives – we are committed to the success of institutional initiative such as MaRIE.
- Lead NNSA in transforming the Laboratory governance models
Terry also discussed the balance of Defense Programs and Work For Others (WFO) at the Laboratory, and the constraints presently imposed by NNSA on our Laboratory’s ability to grow WFO programs. He also discussed infrastructure investment necessary to effectively support WFO, and some political aspects of such investment.
Terry then took questions and provided answers, but these are not summarized here.