VII - Organization and Administration

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Engineer District of the Kar Department for the organization and administ ration of the,atomic enera program on January 1, 1947. During the past year a large amount of Commission and staff time has been devoted tothe establishment of the basic structure of the organization, t o the recruitment and selection of principal members of the stsff, and tothe necessary assignments of responsibility and essential procedures' for effective administration. This work was accomplished without inter - ference with full scale operhtions. The military authorities have been The five-man Commission established under the Atomic Energy Act of 1946 acts as a po:licy formulation and review body. Most of the policy questions are initially proposed by the Staff and brought' to the at ten - tion of the Commission by the General Manager who is the chief executive officer. The fivls Commissioners regularly meet with the advisory bodies established by thss iitomic Energy Act o f 1946 -- namely, the Joint Committe e on atomic 'Energy, the General 1-dvisory Committee, and the Military

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Lihison Committee. In addition,the Commission and the General b nager have sought the cdvice of several other groups on specific policy and During t h & past year the General iidvisory Committee has met eight times although obliged under the law to meet but four times annually. The Commission meets regularly with the Military Liaison Committee on ol ternate Vkdnesdnys and oftener when required, And the staffs o f both work closely together. Twenty-two joint conferences have ' been held during the yenr, fourteen o f these s i n c e July 1, 1947. ii close working relationship hr,s been maintained with the Joint Committee. Numerous conferences betwe2n Committee members and Commissioners end between members o f the staffs have been held during the past six months, i n Gddition t o several formal meetings o f the Commission and Inte ma 1 Organ i z ati onThe atomic Ene rw Commission i s organized internally in the manner of most corporate structures, who is responsible to the Commission for the effective f'unctioning of the whole organizctior,. The small Washington office is essentially a staff organization concarned lc rg ely with the development m devaluation of programs end policies. The operations ofthc Commission are carried out by private 2nd governmentol reser:rch, const ruz tion nnd production cont roc tors under the direction of five decent rc liz ed offices of Directed Operntions hecded by AEC Mcnagers. %e chief executive isthe General Mnnager,

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statutory program Divisions : Engineering, Military Application, Production, and Research. To round out the organization necessa'ry t o cover the extensive spread o f program responsibility and to assure the Commission of highly ski.lled specialized talents, two Divisions have been added and partially staffed during the past six months: the Division o f Biology and Medicine and the Division of Raw Materials. Directors of the six Divisions function as the technical program staff and are empowered t o ad- < vise Managers and contractors on the technical phases of their operations directly on behalf of the General Manager and the Commission. A Program Council, made u p of the General Manager, the Directors of the six Divisions, and the k is is tant General Manager, assures .fill consideration of all aspects of the highly complex technical problems which require joint judgment ofthe Commission and staff. Responsibility for the development o f managerial policies,standards and services rests with the seven Offices established by the Commission: Administrative Ope rations, Budgets, Comptroller, General Counsel , Public end Technical Information Service, Organization and Personnel, and Operating responsibility is decentralized to the five Offices of Directed Operations established at Chicago, Hanford, New York, Oak Ridge, and Santa Fe (Los lilamos), Three of these Offices of Directed Operations were established, 2nd Managers nppointed , during the past six months. The positions: of Directors of the Divisions and Offices and the km gers of the five operating establish n ents, as well GS most other

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principal positions,are currently filled with experienced personnel. ;in orgcnizaticin chart of the Commission i s included as Appendix The increased scope of governmental direction of the rtomic energy program and the new problems associe.ted with its administration in times o f peace demcnd creation of sound base-line policies in a number o f comsix months, the Coinmission rmd the General Manager have established a variety of temporc,ry o r permanent advisory bodies o f unusually competent experts to examice opercitions and needs of the program. bodies hnve mride reports of their findings and recommendations, allof which c re currently under consideration or have been acted upon by the During the past year, and more parti oulu rly during the past The purview o f each of these advisory bodies i s described below, Advisory Bocrd on Relationships of the ritomic Energy Commission,- This temporary five-man bo:ird WP.S established in February 1947. It conducted a thorough investigation of AEC-contractor relationships, partic uk rly in the field of research, and mado numerous valuable suggestions

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fores hb li shing more effective working relationships between the AEC Advisory Committee f o r Biology and MedicineThe Commission established a permanent Advisory Committee for Biology rmd 1vledic.ine on September 12, 1947, nf ter its program and needs hcd been exnmined by c temporcry Medical Board of Review. The permanent Cornittee i s chcrged with the continuing study o f the basic policies of ‘the Commission inthe medical, biological,md health physics aspects ofthe atomic energy progrcm. The members of the Committee Eire among the lending medical ::nd bio logic cl scientists of the country. Pntent Advisory Pnnel This Panel, r.ppointed er rly in the year cnd alrectdy reported tothe Congress, sub n it ted t comprehensive report to the Commission on September 17, 1947. The report concluded th rAt the imprct ofthe patent provisions o f the rl tomic Er,crgy i.ct o f 1946 isns small as possible consistent with the needs o f common defense r<nd security,that the normcl incentives of the patent systcin crc left open except for cert:.in patents specifically a policy o f avoiding unnccessr.ry irt cr fer crt ce with tho iiormcl fm c tion ing of the p-tent systen.

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Industrial Advisory Group While more thnn 3000 contrrictors, sub-contractors, and suppliers are alrendy taking p nrt in the atomic energy progrom, many more must be manfigcrial ability of iimerican business are brought t o bear with maximum effect on the prohlems of atomic energy development the people of the United StF<tes will.notre nl ize the full bone fit of this new field of pressed intention of Congress, t o move away fron the present government monopoly provided by law as fast as it cm with due regard for national security. The IndustI'inl rid visor y Group will explore opportunities for increased individunl participation for profit md methods of developing incentives for industry to get into the field. The objectives are t o : 1. Utilize filly the Nation's industrial resec'rch m d devclopment ca peci t y ; 2. Keep the industries directly concerned fhlly informed as t o the developments in their fields ; 3. Insure the opportunity for technical training in atomic energy of cs large 2. pert of American industry as possible i n order t o preppre the indus tr in l community for the ,job it must doif America isto continue t o be strong in ntomic energy development. The 1n dust ri : l lidvisory Group be gm its tLsk of getting the necessary

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end recommendations, hcve visited nll major Commission install ct ions involving potential industrial ripplicn tions, h:ve consulted with present and potential 2SC cont rc ctor s, End are now prepcring theil ' first report Committee on Scientific Personnel The fill support and active p ~ - rti c ip ~ itio nof scientists cnd workers in scientific lp b oratories now engnged, or potentially equipped t o engBge, i n ctomic energy work isof vit:il importmce tothe Commission. Recognizing certciin hnndic?.ps which derive from the necessity for security practices, which fire new to the pursuit of scientific inquiry i n peacetime, the Commission felt thc need for afresh considoration of the special problems of this very importnnt group. A Committee on Scientific Personnel WDS therefore established in NL?y, 1947, t o examine the problem. The establishment, o f t h e Committee and its composition have already been reported tothe Congress. The Committee after a cravass of prc ct ices, standards ond at5tudes of scientists and administrators of scientific lc b oratories completed its work by reporting to the Commission i n October 1947. Vnluable recommendations for guide-line policies were made with Classification of employees Promotim rdsal ~ r yc on tro l 1nterch:xgu o f employees between institutions

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Vccntioris and sick leave Hrrznrd pay and insurance These reoommendations, combined with staff appraisal nnd recomendat ions for putting them into practice, are now before the Commission. In rr letter nddressed tothe Commission on the occasion of the first anniversary of its te king office,the Federation of American Scientists expressed set is faction with the progress made i n reorganizing the atomic energy program on G peacetime basis c.nd confidence that future problems would be denlt with inn constructive mannerr Safety and Industrial Health iidvisory Board- - The safety and health protection record ofthe Manhattan Engineer District and the Commission has been excellent, as mezsured by the stcndard indices in this field. the frequency of cccidents among Commission and contractor personnel was 4.91 persons injured for each million man-hours worked, ci rate more than 50 percent below the 1946 national zver2,ge for a11 industries. Tho fire loss record was even better by compnrison, In all of the plc nts operating in the refinement and processing of source materiels f o r the Commission, the accident frequency rrtc was only hcl f that of the non-ferrous metals During the first ten months o f 1947,

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But the deterioration of &artime structures, equipment, and facilities ; the problems arising from expanded operation ; and the diff i - culty of fitting t;he work of the Commission intoa normal peacetime economy have led %he Commission t o seek t h e independent judgment and recommendations o:f' competent and experienced analysts in these vitally important aspects of Commission operations. in consultation w:tth the National Safety Council, secured the services of such a group to constitute its Safety and Industrial Health Advisory Board. Members have made an extensive survey o f AEC and contractor practices and problems of safety md industrial health, and the Board made a final report of its findings and recommendations on koember 15, 1947, which is currently under staff study. Exploration and Mining The commission established a Division of k wIG te rials in October, 1947, t o provide for the exploration, development, and procurement of various types o f raw materials required inthe commission's program. importance of these requirements also led to the appointment o f an Advisory Committee to assist in this work. sibi lit y of studying the Commission's present program and advising on questions of exploration and development withE view toward integrating and coordinating prc s cnt programs and poli cio s, The Committee i s charged with the respon-

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Lccounting and Finance Three significant steps have been taken during the past six months t o provide the Commission with essential facts necessary for the creation of Mscc'l policy, and the development o f more effective accounting procedures, for its industrial and scientific - .rather than typical An analysis of obligations and expenditures for production, research, c ons t ruc ti on, t ovm management, and adminis tr uti ve functions for the fiscal year 15347 End through lqovcmber of 1547 has been completed and will provide 'the basis for the development ofa system of accounts on accepted industrial and cost nccounting principles. Five of the Nation's leading public accounting firms have been omployed to audit five prime contre ct s, covering a cross section of Commission operations. These audit reports which are now being submitted, will assist the commission in clarifying certain aspects of its relation - ships with industrial contrrtctors. Fincilly, a system i s being devcloped in close collaboration with the General la counting L)ff'ice which will bring the Commission into a relation - ship with its oontrcictors similar to that which parent business corporations have with their opercting companies.

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The Commission's dual policy of working through cont rc ctor s for construction, production, research, cnd other operations, and o f decentr aliz ingalls up cr vision of contract operations tothe five offices o f Directed Operations, is reflected in -the distribution of personnel cs soci c ted with the project. There are cpproximately 500 employees i n the 'Nashington off ioe,including the military personnel inthe Division of Military LLpplic::tions. iilmost 10 times this number, o r approximately 4800 ;iEC employees, uro located in the operational centers. 10 times the total number o f governmont employees--ebout 55,000 personsare employed by the Com.nission's contractors. During the Conmission's first year o f oporation, Government employees have been decreased by approximately 1,100 while contractor employees have increased by about 14,000. The increase in contractor employment reflects increased scope o f Operations cnd would have been greater if not offset by considerable sao in pin mmpower from increased efficiency in certain Continuing efforts arc being made t o evolve a labor relations policy which will provide an essential framework within which contractor - employee relations may operate. Atp rt sent thc wartime arrangement with the Net ional Lnbor Re12tions Board, whzreby the Bonrd will not

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certify labor organizations as represents t ives of employees o f processing and research contractors other than a t Oak Ridge, has been continued. Prelimin-nry conferences h ve recently been held with the Commission's pr in a i pcl contractors,the national leaders of organized labor, and cp prop ric te Federal officials for the purpose of obtaining expert advice inthe formulation of a policy which will give adequate assurance of removing the hazards of work stoppages and which will be consistent with both the security requirements imp lio it in the tLtomic Energy Act of 1946 %andt h e public policy of the United States as expressed inthe LaborRemlati.on of SDecial k te rials and Facilities The Atomic Energy Act o f 1946 directs the Commission to control by regulations and licensing the materials and facilities necessary tothe conduct of its operations. %ring the past six months, it has become essential to impose a regulation governing the export of facilities. and equipment for >he production of fission able materials. this action,the Commission solicited the advice ofthe manufacturers of the equipment t o be controlled in a series of industry meetings and invited are pre ser it at ive group to s it with the Commission's staff as an interim Equipment kidvisory Board, transmitting the industry ' s views on the regulation and related matters, The Commission made it clear that in the administration of the …