Itemization of Joint Committee Criticisms of the Atomic Energy Commission

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ITWIZATION OF JOINT COMMITTEE CXITICISMS OF THE ATOMIC ENERGY 00MMISSION Last fall, Commissioner Dean suggested that a review of the entire record and an itemization of the criticism of the Joint Committee on Atomic Energy made as a result of the recent investigation of the Atomic Energy Commission might be ef value to the Cm n is sion. A detailed review was made of the hearings and the resorts of the Joint Committee, witha view to identifying these items of criti - cism. In the course of this review, it becaTe evident that the majority report had identified substantially every charge of substance which Senator Hickenlooper and others had made in the course of the h cz rings together with a consideration of the answers o f the Commission to these charges. The major items of criticism which are summarized below, therefore,constitute the judgment of the majority of the Joint Comqittee, based on a consideration of the merits of the charges, and of the Commission's dc fens e to In presenting these criticisms, something more than a simple itemization was found t o be necessary since in many cases,the nature and ex tei it of the criticisms depended to a considerable extent upon the framework i n which they were presented. Hanford Overrun - Government Contractor h elation ships in Program Operation s.- - _.- 1. The Cornmission failed to grasp the situation of tht Hanford overrun until far more than a reasonable time had elapsed. " The majority report considered that the " extenuating testimony " stated that the failure appears in perspective only if considered along with three basic and interwoven phases of atomic management : Commission relations with operating contractors,the g ation of the authority to the ikianagers in the Field, and Commission fiscal administration. In connection with the relations with opera ti fig contractors, the report noted the modus vivendi established with the General Electric Company a t Hanf ord as ill u stra tic g " the hybrid'' of Dilution of Responsibility and Liaison Breakdown

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public and private enterprise. It recognized that this relation ship prc sent ed problems of avoiding overlapping effort and duplicate personnel,also problems of balancing the danger of over supervision of the managerial talent being put to use and, atthe same time,the requlrcinents of the nt < t ional defense which demand consultation before the contractor bcts. All the so factors highlight the "danger of diluted rcs pon sibi lit y and a liu is on breakdown such as occurred in thc cost aspects of the plutonium fabric atom facility. " 3. Lack of Li bison hiiachinerv in Dc centralized Opc rations The majority report noted that decentralization of the Com is - sion ' s organization originc1:y went sofar as t o evoke criti - cisms of the General k,dvisory Committee; but that as o. result was struck between " the need for over - all direction and the nced for on the site management." The report added, howsvbr: "h defect lies in the Hanford Manager's failure to notify Washingtor.. , He possessed ample authority, howevcr, t o establish liaison machinery with General L lect ric that would havt procured nim this knowledge; and Mr. Kinne assured the joint committee that steps have be tn taken to prevent ara cur rence, 'I C. Lack of Cost Accounting System In discussing the third in tcm ov cn phase of atolnic m nag ment, fiscal adc li riis t ration,the report S!!A~GC¶ that "ari icd us trial - type cost accounting system rnight have flagged the HaEford Noting th Lt such a systcin vUasadopted by two contractors and was in process of installation elsewhere,the report stcited that the changeover has "proven tobt slow and laborious because it requires a de pr tii ref rox tirno hm or cd Goteriznent procedures illid also because the historic old at a on costs s re 2. hp pli cation of These Factors to Other n rens of Opbration The report concluded this discuss i cn by stating " the contract u & l , managerial a.cd fiscal backgroucd circumstances surrounding this facility & re applicable in greater or lesser degree not only to weapon operations but also to production of fission able s,reactor development research and community affairs. ' t

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3 . Lack of Contractor In csn ti veto Economy The report also noted that the Gencral d lect ric Cornpiny derives n o monetary adv;r,tage regardless of how well it practices economy: offering nsxiLnum opportunities for profit, crcctes highest incentive to keep down costs, successfully in the case of certain feed nia tsr iii l processes ; but whether it might work in the op v ratio i is at Oak Ridge, Hanford, ana Los klnmos is c difficult question which the Commission must face at sometime in the future. " This system has bcen up plied It was the coriclusion of the Joint Comnittee that " Re lzt ion ships between the Commission and contractors still contLiin many kinks not the least of which is insufficient machinery i n making contract opportunities ov nil able to a mGximum number of in t crests d firms." Lilnitcd Contract Opp rt unit its for In tert s%d !ir:s Natural Gas Pipe line The substance of the Joint Conunittee's criticism of the Commission action in connection with the Natural Gs s Pipeline cm be suimarizcd 1. The advantrige tothe nc;tionul security was mcrginal. Coinmission Wa:; that th cnut ic nal security rea_uired the pipeline and a certificate was issued " largely on the basis of tiicse that from the point of view of the national security,tht added Tcstirrtony given the joint committee docs ill urn in ate th cfL c t11 that,logic cl ly, two sources of fuel art bound to furnish c better guar m ty of continuity in powbr-plant opc rct ion than on6 source alone. But considering the unlimited coal stock - piling op port mi tie sGt Oak Ridge; considering truck - burge transportation as alternates torn il cars in the delivery of production that accompanies t ne existence of tn ly th re6boilers in the powtr plant, two of which nust always operate to service K-25; and considering that the Conmission has not dee-rted it necessary either to build a fourth boiler or to increase the coal stockpile as an interim precaution pending con ple tion of the pipeline - - considering all these factors, whatever added protection may be gained through two basic fuel sources, instead of one, is to the last degr6e marginal. I1

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Tha CoiT3is;ion argued one thing bef Gre the Fedt.rb.1 Po'i,sr Before the Com?;it&ee, the Commission placed principal stress upon the conte rit ion that nL tura1 gas would save the Govtrnment afid the tax pay ep substantial sums of money over a period of yews,This wzs not the basis upon which the FsC.;ral Power Conn is sion is s ucd a cert if icc te,In other words, the Co:mission had not prc sent sd to the Federal Power Conn is sion $jhct it subst que ntl y considered the princip nl consideration in on the bhsis n it rely of economy to the G over ment, critical rt port or: the Pipeline. This fact \*ius point cd out and the Commission's reasons for doing Cornnittee v;as critical of the Commission for going ahead. would appear that the Cornnittee was critical only in the sense that they wert : not pt;rsunded by the Cor mission ' s arguments; and th,tthey recognized substantial comit n ents had bee11 ndde by the tine the report was issued : It is not clear the extent to which the "About 4 weeks before the in vc sti guti on comsnenced, a subconmittee of the jo ir,t consnittee (under t ne chairmanship of Congressnlen Durhm) hhd in quir cd into the pipe - line matter and had submitted al x sni nous rc port, The subconrnitteo did not recoinmend th Lt the Commission abandon plans for the pipeline. aut it did conclude th kt sufficient facilities for coal stock tion of the power plant ; that a trnc s fer to i in t ural gas OS the main fuel source is not dictated by co c side rations of consulted with the Natior-a1 Security Resources Poard nor taken into ciccouiit recent i a proven ent in the nt it ional fuel pic tura. The joint oonmittee ASu whole unanirnously adopted the subcorn it tee ' s report1day after the in vt sti get ion began m d 3 weeks afk er theFt der al Powsr Cr.is sion finally issued a cert if ict t2 of public convenience hnd necessity authorizing the Tennessee Natural Ges Co. (the Coinnission's contractor) t o proceed with actual building of the pipeline. It The Joint Cormittee believes that reactor develop nen t should1: proceed with all possible speed, and disappoint m nt,therefore,

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1. Congress in enacting the FBI rider rejected th e--p os it ion follows from raf lcc tion that in2 1/2 years,the Commission has not broken ground on a single nkw-type high power reactor. " The Committee report recognized that progress was stated to have been made in ironing out the mass of technological obstacles at the core of the development of a technical problem of this msgnitude, and that " the failure to bre hk ground isnot necessarily a mecsure of the results attained. " The report concluded, howtvcr: " Results are what count ; nnd by that standard the rate of progress in reactor developed for military purposes has been overslow, notwithstanding the many good ren sons which account for it. 11 "The Congress of the Unit td States has now reso lv ad the afull FBI investigation of students in the non secret field End in corp or6tedan amendment to this eff tc tinto the Indcpendent Offices Appropriation Bill of 1949." It subscribed to the arguments fn vo ring Thost arguments subscribed to by Congress in opposition to the Commission's position were outlined by the Conunittee and included the following main points : the allocation of public money t o ar,yone conspiring against The hx rican pso pl twill not and should not to ler atf the people ':; rep res cnt at iv s s cre justified in z tt aching cond it i cns to these fellowship & wards, "Iio man nas a vested right to Govsrnmcnt %id" and thus C.Inthe field of atomic energy unus ul safeguards are necessary " ; "a subversive might use his skill to profit a and ''must be determinedly curbed for the welfare of all lun eric m institutions, " 11 Communist infiltration also begins on u small sccle "

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Community Opc ratio m-- 1. Commission Lack of A oz rss sive ness in ivithdrLwinK from the Field The basic criticism of the majority report of the Comnission's handling of community operations,is that the ComTission has not shown sufficient aggressiveness in "withdrawing from the anomalous and distracting business of ru u in gt n ree American communities" which threatens so to distract the Commission ''as to divert it seriously from other responsibilities. " The report states that "A detailed plan for disengaging these towns should be drawn up and a definite timetable established for executing it." In addition,there are the following detailed comments 011 theso A. Failure to Encourage Free Enterprise The reports mari zed the charges and the Commission's responses to the qu cst ion of encouraging free cnt cr pri so, cnd referring to the unfilled space at IIanford not taken by private enter - feeling on the part of businessmen that Commission regulations arc: too restrictive to afford them op port unit ics for et tent ion to the clailse inthe Mciuiahon Act which requires the enccurcgernsnt of free enterprises of ar as national security E. i'ileahesses i n Commission Policy or Practice Evidenced by To assist the Jo ip t Committee, the firm of Kump & Falk were engaged t o make a survey arid submit independent findings on the quo sti on of the construction of the Carmichael High School a t iianford. The Committee listed the conclusions of that report. imong the conclusions critic hl of the Cox n is sion w ~ r et he following : the work resulted in inordinate el location of costs for man q pie nt and overhead for8project of this type. " 'The policy adopts d for the gen bra lad mi iii st rh tion of

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of the project was inadequate, and mm if s s ted a lack of coopcra- "The planning and programming, as a basis for the design (3) " In gent ral,the excessive cost of thc work was primarily the result of' the policies and conditions under which the project W ~ Sp hrmed and constructed. The complexities in the building dk sign are unquestionabl?r i result of the sc policies and the bz s icc s use of the high cost of the work.'' In considering the question of contract crs in the field of community opc rations,the following points were cov t red : 1. Degree of Separation of Construction ar;d Town Idanagement The degree of separate ness between ikKe:c and. Zia may beI t subject t,o varying interpretations ; but whether or not such separate res s or identity giv cs chuse for criticism is an0thc.r are cojnbiiisd outright in cne cor2oration ; and i f tis practice oii this is suu - isthe rtrnotc-nzss of Los Xlamos and,toa lesser e xter it,i hn ford wid the attends atp rz ct ical diff i xl ty i n porsuo.ding qualified ccmpaniss t o coinpett for loc - 1jobs. A t Yanf ord cc n struct ion md tcwn-nanagemnt functions 2. The Pcyxr,t of Fecs tothe Town h.ns gci w nt Contractors Though They Undcrgc no Fin mci21hisk The lurge number of employees of Zia and Rome m der s or, and no fin m ciel risk was the sub jc ct of SOTIC discussion. Thc cx teat to which the Con q it t be mas critic cl of the Comnissicn in this corm ect i cn is not c lex. which "would ex put at ef rce enterprises l together " , when corienterprise, on which scox ti16 Co zn is sic n "has becn charged vbith def ici enc it st1. Possibly,thc Com i it tee ' s positions h cul d be