Office of Science Issues and Priorities

1. U.S. Department of Energy’sOffice of Science Office of ScienceIssues and Priorities Briefing for EFCOG Don Erbschloe Chief Operating Officer Office of Science June 9, 2005

2. Contents • Chief Operating Officer • Role • Background • Budget Priorities for FY06 • Major Issues • Laboratory Business Plans • M&O Contract Competition • HSPD-12

3. Office of Science OneSC Organization Fusion Energy Sciences Advanced Scientific Computing Research Basic Energy Sciences High Energy Physics Ames Site Office Brookhaven Site Office Princeton Site Office Biological & Environmental Research Nuclear Physics Stanford Site Office Argonne Site Office Fermi Site Office Workforce Development for Teachers & Scientists Pacific Northwest Site Office Berkeley Site Office Thomas Jefferson Site Office Director Principal Deputy Chief of Staff Budget and Planning Major Systems Assessment Deputy for Programs Chief Operating Officer Line Oak Ridge Office Staff Laboratory Policy & Infrastructure Virtual SC Integrated Support Center Program Direction & Corporate Analysis Chicago Office Information Management

4. A Brief Personal Background Academia Operations (Flying) Research Management

5. What you can expect of me • My philosophy/approach: • Take care of your people • Help them take care of the mission • I will visit each site at least twice a year • Alternate between programs and ops • I will take the “big picture” perspective • Decisions based on needs of entire SC • complex

6. Personal Goals & Plans for CY 2005 Jan May Sep Feb Jun Oct Mar Nov Jul Apr Aug Dec Lab Dirs’ Mtg & Business Plan Mtgs Site Mgrs’ Mtg (Forrestal)l Focus on SC & DOE offices Start Human Cap Adv Group Focus on SC sites & programs Business Plan Mtgs Site Mgrs’ Mtg (Chicago Area) Focus on SC & DOE offices And HCAG Revisit SC sites—focus on ops (Couple w/ Dr. Orbach’s visits, if possible) Site Mgrs’ Mtg (Germantown) Site Mgrs’ Mtg (TJ, OR, or Bay Area) Site visits (cont.) Focus on External Offices

7. What I learned during my site visits • Diverse and unique challenges at sites • Scientific thrusts • Geography • Community involvement/attention • Skill mix of staff • Condition of facilities • Relations with contractors • Commonalities at sites • High quality of staff • Enthusiasm of researchers • Good focus on SC mission

8. What I’ve learned about the Labs • Lab ops & upkeep consume major portion of SC budget • Labs are truly “national treasures” • We are unique in Fed system by providing these • large-scale scientific tools for nat’l and int’l research • Labs serve 20,000 users per year • The public trusts us to keep these labs running

9. US Competitiveness “Given the rising bar for competitiveness, the United States needs to be in the lead or among the leaders in every major field of research to sustain its innovation capabilities.” U.S. Competitiveness 2001: Strengths, Vulnerabilities and Long Term Priorities, Council on Competitiveness

10. FY 2006 funding 1.6% below FY 2005 appropriations (excluding Congressionally directed projects), 0.9% above the FY 2005 request • A difficult budget year – however, the Office of Science continues to provide world leadership in science, and for energy security. • The budget forces us to make tough choices. SC’s prioritization provides for a strong and healthy future for U.S. science consistent with the 20-year facilities outlook. • The House Appropriations FY 2006 Energy and Water Bill has passed the House – it contains $3.67 billion in funding, $66.184 million over FY 2005 appropriated levels • The Energy Authorization Bill, H.R. 6 has passed the House. The Senate is moving a companion bill through committee.

11. Office of Science Budget History • The area of each pie chart is proportional to the funding total for the year. • When pending FY 2005 Congressionally-directed university grants are awarded (currently in “all other” in FY 2005), FY 2004 and FY 2005 university funding will be approximately equal. • ** Includes funding for SBIR/STTR, non-profits, other federal agencies, private institutions, and Congressionally-directed projects other than university grants. • *** Includes funding for, non-profits, other federal agencies, private institutions, and all Congressionally-directed projects. • **** Includes funding for non-profits, other federal agencies, and private institutions.

12. The President's FY 2006 budget propels the United States into leadership in the following areas: • Fusion -- ITER (fabrication begins) – will demonstrate the scientific and technological feasibility of creating and controlling a sustained burning plasma to generate energy. • Leadership Class Computing – 40 combined TeraFlops (TF) system performance at the end of CY 2005 (20 TF “Red Storm” and 20 TF X1-E) – the most powerful computer for open science in the world. • Spallation Neutron Source – SNS — world leading neutron source (by an order of magnitude) begins operation at ORNL • Nanotechnology – four of five Nanoscale Science Research Centers begin operations in FY 06. • X-Ray Free Electron Laser -- start construction of Linac Coherent Light Source at SLAC – ushers in the field of ultra-fast science • High Energy Physics – initial operations of the Neutrinos at the Main Injector (NuMI) project at Fermilab -- fundamental physics of neutrino masses and mixings. Large Hadron Collider at CERN (pre-operations, operation and maintenance of detectors, and computing and software infrastructure) • Nuclear Physics – continue to use the unique capabilities of the Continuous Electron Beam Accelerator Facility (CEBAF) at Jefferson Laboratory and the Relativistic Heavy Ion Collider (RHIC) at Brookhaven National Laboratory for studies of the internal quark-gluon structure of nucleons and the properties of hot, dense nuclear matter. • Climate Change – research to address the role of clouds. Invest in scientific infrastructure to develop, test, and run the climate change prediction models used in the international assessments of climate change. Continue study of the global carbon cycle and basic research for biological sequestration of carbon in the biosphere. • Genomics -- GTL will accelerate research underpinning the Department’s ability to develop microbe-based biotechnology solutions for clean energy, carbon sequestration, and environmental remediation.

13. Proposed Energy Security Plan Based on the BESAC report Basic Research Needs to Assure a Secure Energy Future and follow-on workshops, two of which have already taken place, BES proposes 8-12 aggressive basic research programs for potential solutions to the world’s growing energy needs, including, for example: • Hydrogen production, storage, and use. • Solar energy conversion – solar electricity, solar fuels, solar thermal. • Materials for extreme energy environments, e.g., materials robust enough to withstand high temperatures, high radiation, and corrosive environments. • Nanostructured materials for improved efficiency (e.g., strong light-weight materials) and functionality (e.g., white-light, solid-state lighting or energy conversion and storage). • The development and conversion of alternative domestic energy supplies through the control of chemical pathways. • Complex systems science for topics as widely varied as designer materials with new functionalities and the modeling of complex energy systems.

14. Creating the Hydrogen Economy: Major Challenges • Enormous gap between present state-of-the-art capabilities and requirements that will allow hydrogen to be competitive with today’s energy technologies • production: 9M tons  40M tons (vehicles) • storage: 4.4 MJ/L (10K psi gas) 9.72 MJ/L • fuel cells: $3000/kW  $35/kW (gasoline engine) • Enormous R&D efforts will be required • Simple improvements of today’s technologies will not meet requirements • Technical barriers can be overcome only with high risk/high payoff basic research • Research is highly interdisciplinary, requiring chemistry, materials science, physics, biology, engineering, nanoscience, computational science “Of particular importance is the need to understand the atomic and molecular processes that occur at the interface of hydrogen with materials in order to develop new materials suitable for use in a hydrogen economy. New materials are needed for membranes, catalysts, and fuel cell assemblies that perform at much higher levels, at much lower cost, and with much longer lifetimes. Such breakthroughs will require revolutionary, not evolutionary, advances.”

15. Purpose of the Business Plans …The five year plans prepared by the major program offices and the comprehensive five-year plan for the Department, should include business plans for each of these laboratories. These business plans should include a clear statement of the primary mission of each laboratory as it relates to each labs lead program office(s), a clear statement of secondary missions to support other DOE program offices and other Federal agencies, and a five–year plan identifying research, facilities, and resource requirements necessary to fulfill these primary and secondary missions. …Beginning with submission of the fiscal year 2007 budget request and every fiscal year thereafter, the Department should submit to Congress detailed five-year budget plans for all major program offices and a consolidated five-year budget plan for the entire Department. -- House Energy and Water Development Committee Report on FY05 Appropriations Bill; agreed to in subsequent Conference Committee Report The business plans will clarify the 5-year scientific future of each SC laboratory, identify some of the big challenges these “jewels” face, and commit ourselves to delivering the science and scientific infrastructure that the Nation needs.

16. Path Forward • Outline questions designed to also provide answers to Five Year Budget Plan and Ten-Year Facility, Infrastructure and Site Plans. • Four-hour briefing sessions with each laboratory for them to present their views on planning for their future are complete. • SC to discuss and draft plans; finalize by Fall 2005.

17. M&O Contract Competition

18. Homeland Security Presidential Directive (HSPD)-12 Agencies must issue personal identity & validation (PIV) credentials to their employees and contractors who require long-term access to Federally controlled facilities or information systems. • Action • develop implementation plan and submit to the Office of Management and Budget by June 27, 2005. • implement new credential system by October 27, 2005, for new employees • develop a plan to move existing employees to the new system

19. BACKGROUND

20. Office of ScienceFY 2006 Congressional Budget Request

21. Concerns and Criticisms about the Current Appraisal Process • Perception that the process is not sufficiently objective and transparent—specifically that the Site Offices’ performance is too closely tied to the laboratory to be credible. • Perception that the scores are consistently too high, and sometimes are inconsistent with our sense of the laboratory’s performance in a given year. • Existing incentives are insufficient and poorly targeted to motivate the contractor toward desired patterns of behavior.

22. Goals for a Revised Appraisal Process • Increase comparability, consistency and transparency in the appraisal process. • Tailor incentives to motivate different types of contractors (i.e., for-profit and not-for-profit.) • Generate better information for extend/compete decisions.

23. Draft Recommendations:Laboratory Appraisals Changes to Measures • Reassess and revise the existing S&T measures; change the Operational measures to include more specific measures targeted to the value that the M&O contractor brings to the laboratory; adopt common set of measures and scoring system across the SC laboratories to enhance clarity and comparison across laboratories. Changes to Process • Conduct evaluations at one annual meeting chaired by the Director to encourage comparability and fairness across all laboratories, and ensure the engagement of the Director. • Use resources from across SC to staff an operational systems review function, modeled on the process SC uses to evaluate construction projects (the Lehman reviews) or its scientific portfolios (Committee of Visitors reviews) to test laboratory systems and build cross-SC consistency in evaluation practices.

24. Draft Recommendations, cont. Changes to Reporting • Dispense with the adjectival scores in their entirety and rely on a numerical four-point rating system; adopt a report card approach, measuring the laboratory against a handful of criteria rather than a two-part and overall scoring system. • Make public an annual laboratory appraisal report that provides the scores of all SC laboratories in one place, for example the SC website. Changes to Performance Incentives and Overall Score Calculation • Use a variety of incentives tailored to each type of contractor, specifically including increased use of award term and executive bonus pools. • Change the method for calculating the overall performance score and fee from an “additive model” in which operational performance is a minority percentage of the overall score, to a “gateway model” in which the S&T score sets the maximum winnable fee within the total available fee defined by the contract, and the Operational score determines how much fee is actually awarded.

25. Current Status of Appraisal Process • A new set of high-level measures (a binning structure) has been developed by the team for implementation in FY06. • A new appraisal process and schedule has been drafted by the team, and is being implemented this year. • Additional/alternative incentives include the use of 1) a published report card, 2) award-term, 3) changes to fee calculation methodologies, and 4) various executive reward systems.

26. Level One (Report Card) Measures • Mission Accomplishment (Quality and Productivity of R&D) • Construction and Operation of Research Facilities • S&T Project/Program Management • Contractor Leadership/Stewardship • Environment Safety and Health • Business Systems • Facilities and Infrastructure • Security and Emergency Management S&T Scores Operations Scores

27. Business Plan Outline

28. Business Plan Outline, cont.