No. S-97-22
"Enhancing Performance in a Time of Change"
by
Dr. Shirley Ann Jackson, Chairman
U.S. Nuclear Regulatory Commission
at the
All Employees Meeting
White Flint Complex, on The Green
Rockville, Maryland
Thursday, October 30, 1997, 10:30 a.m.
Introduction
Thank you, Mrs. Norry. Good morning, ladies and gentlemen. With me today are NRC
Commissioners Greta Joy Dicus, Nils J. Diaz, and Edward McGaffigan, Jr. On behalf of my
Commission colleagues, I would like to welcome all of you to this special meeting of the
Commission with the NRC staff. I extend that welcome both to those of you assembled here in
the tent at Headquarters, and also to the groups of employees connected by telephone from the
regions.
These "All Employee" meetings have become an annual tradition since 1991. They are intended
to stimulate and to facilitate direct communication between the Commission and individual
members of the staff; to clarify the Commission's agenda; to engender a shared vision; and to
motivate the staff in pursuit of that vision. I should mention that, in keeping with these same
purposes, I also have begun holding a series of small-group sessions with the staff, which have
been referred to as "Chairman/Staff dialogues." Those sessions, which I began in August of this
year, are proving to be extremely beneficial and positive for all involved, and I eventually hope to
meet each of you in this context.
After my introductory presentation, our agenda today will be determined by your questions. I
increasingly have become aware of how important it is that the Commission understand the
perspectives and concerns of the staff, if we are to be effective in setting and directing agency
policy. Conversely, it is equally important that the staff understands the perspectives of the
Commission, the priorities and concerns that undergird Commission policy, decisions, and
directives. We will respond to your questions today based on our understanding of your concerns
and our individual perspectives on those concerns.
Our format today will be similar to that used for previous sessions. Following this introduction,
the Commission will entertain questions from any of the employees present here, on "The
Green," as well as from any of the regional and field offices connected by telephone. As in
previous years, we will hold a second session this afternoon, at 1:30 p.m., since we have
insufficient space to accommodate all employees in a single session.
Before we address questions, let me take a few moments to review with you what we have
accomplished, as an agency, since our last All Employees Meeting in October of 1996--as well as
to discuss a few of the internal and external forces of change that will continue to shape our
regulatory environment.
Review of Accomplishments and Areas of Current Focus
First of all, on behalf of the entire Commission, let me extend my hearty congratulations to all of
you for reaffirming, in an era of rapid and challenging change, that the NRC is a highly
competent technical agency that employs extraordinarily gifted and dedicated individuals.
Let me give you a few examples of some of the more significant NRC accomplishments of the
past 12 months. On March 3 of this year, we officially assumed regulatory jurisdiction over the
U.S. Enrichment Corporation (USEC) gaseous diffusion plants in Piketon, Ohio, and Paducah,
Kentucky. In May, we witnessed the culmination of nearly a decade of effort, when the
Commission issued the final rules certifying the Advanced Boiling Water Reactor design, by GE
Nuclear, and the System 80+ design, by ABB Combustion Engineering. On July 21, the
Commission issued the final License Termination Rule, establishing radiological criteria for
decommissioning and release of a facility for unrestricted use, and conditions and requirements
for restricted release.
The NRC also has made significant progress on other fronts, in areas that continue to receive
Commission focus. Allow me to mention just a few of these areas, both in terms of the progress
we have made and in terms of what our agenda should be for the near future. The first such area
is a grouping we often refer to as "design basis issues." Over the past year, we have made
significant progress in this area, but our efforts also have made it clear that we need a "big
picture" solution, rather than one more strip in a series of "band-aids." Currently, we have
multiple methods of dealing with inoperable and/or degraded equipment, each with its own
formula for classifying equipment--structures, systems, and components (SSCs). We have 10
CFR 50.59; Generic Letter 91-18; Appendix B, Criterion XVI; the Technical Specifications, the
FSARs, and other guidance--each created at a different point in the evolution of this agency, each
with a specific purpose and scope. The resultant ambiguity and overlap of these methods,
guidance documents, and requirements have created inconsistent application, or gaps in their
application, that can create confusion and inefficiency both for us and for our various
stakeholders. The agenda for the near future, therefore, is to find a unified, consistent approach
that is also understandable, fair, and risk-informed.
Another area in which we are seeking a "big-picture" solution concerns the various NRC
processes for assessing power reactor licensees--such as the use of the plant issues matrix (PIM),
the plant performance review (PPR), the Systematic Assessment of Licensee Performance
(SALP), and the Senior Management Meeting (SMM). NRR currently is working to devise an
overall integrated approach to plant assessment that will clarify the objectives of each assessment
method, eliminate redundancies, define roles and responsibilities, ensure consistency, reduce the
administrative burden, and match the processes to staff resources.
A third area that has received a great deal of attention, both from the NRC staff and from outside
observers, is the potential external regulation by the NRC of Department of Energy (DOE)
nuclear facilities. Both the NRC and the DOE have created high-level task forces to identify the
policy and regulatory issues needing analysis and resolution. In a June 1997 meeting, Secretary
Peña and I (on behalf of the Commission) agreed on a pilot program to explore NRC regulation
of DOE facilities. This pilot program would "simulate NRC regulation" of a selected set of DOE
nuclear facilities, over a 2-year period, in order to help both agencies gain experience in this area.
"Simulated regulation," as defined for the purposes of this pilot program, means that the NRC
will test regulatory concepts and evaluate a facility and its standards, requirements, procedures,
practices, and activities against standards that the NRC believes would be appropriate to ensure
safety, in view of the nature of the work and the hazards at that pilot facility. "Simulated
regulation" will involve NRC interactions with both the DOE and DOE contractors, and will
involve inspections of each pilot facility to identify implementation issues, but will not result in
enforcement actions to compel compliance with particular standards or requirements. Any
significant inspection findings with a health and safety impact will be transmitted promptly to the
appropriate DOE organization for review and corrective actions, as appropriate, by the pilot
facility.
In the recently approved NRC Budget for FY98, the Congress designated $1 million for this pilot
program. The NRC and the DOE have worked together to prepare a Memorandum of
Understanding (MOU) to establish the pilot program framework. This MOU already has been
signed by Secretary Peña. I expect to sign the MOU on behalf of the NRC in the near future,
once the Commission has completed its formal action on it. Two pilot facilities have been
chosen to date--the Lawrence Berkeley Laboratory and the Radiochemistry Facility at Argonne
National Laboratory. We currently are finalizing the NRC teams for the pilot activities at each of
these facilities--in fact, just yesterday an NRC group conducted a site visit to the Lawrence
Berkeley facility. The third facility has not yet been chosen, but we are considering the
possibility of a fuel storage facility. As we proceed in this area, we must ensure that our
commitments do not overcome our resources--that is, that any new responsibilities we take on do
not compromise our ability to regulate effectively within the scope of our current mission.
In an area that is somewhat related, we have continued to make progress in our activities with
respect to our potential regulatory oversight of the Hanford Tank Waste Remediation Project. In
January of this year, we signed an MOU with DOE regarding this project, and in May we
established a full-time, permanent on-site NRC representative to handle our issues. At present
we are continuing to establish review criteria relative to regulatory and licensing issues, and to
review submittals of the DOE contractors.
In January of this year, DOE also issued its Record of Decision for the Storage and Disposition
of Weapons-Usable Fissile Materials. The dual-track approach that DOE announced involves (1)
immobilizing surplus plutonium with high-level radioactive waste in a glass or ceramic material,
for direct geologic disposal; and (2) burning some of the surplus plutonium as mixed-oxide
(MOX) fuel in existing commercial nuclear reactors. The NRC interest in this approach stems
from three areas of potential impact: high-level waste, fuel cycle facilities, and commercial
nuclear power reactors. The Commission received a briefing from DOE shortly after the Record
of Decision was issued, and in February and March, the NRC sponsored two technical seminars--both open to the public, in which nuclear industry representatives made presentations on the
fabrication of MOX fuel and its use in commercial reactors. More recently, the Commission
received a second DOE briefing and update, in which the DOE acquisition strategy for MOX fuel
fabrication and irradiation services was described. As this area continues to unfold, we must
ensure that the NRC is prepared to perform its emerging regulatory role in a manner that ensures
the protection of public health and safety, and that avoids unnecessary delays or costs.
Another area in which we have made considerable strides relates to information technology and
information management. To ensure that the proper focus and emphasis is given to this area, the
Chief Information Officer (CIO) has reorganized both processes and structure to fully integrate
information management into program activities. A significant accomplishment in this area is
the establishment and beginning implementation of a requirement that all budget requests related
to information technology must be evaluated under the Capital Planning and Information Control
(CPIC) process before an information technology system is included in the budget. The CIO also
has developed a comprehensive plan to repair or replace systems to ensure that we are ready for
the year 2000.
This set of topics is only a snapshot--based on my promise to be brief--but other issues that could
be covered include the potential for tritium production in Commercial Light-Water Reactors, the
Business Process Reengineering ongoing in NMSS, and various initiatives that come under the
heading of Regulatory Excellence or Regulatory Effectiveness. In addition, this focus on change
and transition should not minimize the tremendous accomplishment represented by your day-to-day efforts on tasks that fall within the more traditional scope of NRC efforts. What is
significant to note is that, as an agency that is seeing changes on a variety of internal and external
fronts, we have continued to be successful in adapting to and positioning ourselves for those
changes,
A significant factor in this success, which in itself has been both a challenge and an
accomplishment, is that we have operated for much of this year with a new organizational
alignment--and, in many cases, with a new management team. Rarely, if ever, has the NRC gone
through a year with so many individuals taking on new positions of significant leadership and
management responsibility, concomitant with our organizational realignment at the beginning of
1997. In almost every case, these individuals have experienced challenges considerably greater
or different in character from anything they had faced before, and I believe it is to their credit that
the present management team--both in the Regions and in Headquarters, has made the transition
so smoothly.
Budget, Planning, and Strategic Assessment
Now let me get to my real area of focus. In making my rounds through various groups of
working-level NRC staff, I have become increasingly aware of how important it is that each
employee understands his or her roles and responsibilities--what we do, and why we do it. I also
have noticed that the eyes sometimes "glaze over" when people hear the term "Strategic
Assessment and Rebaselining"--primarily because it has been viewed by some as a theoretical
exercise with little or no practical value. Today I intend to mention Strategic Assessment and
Rebaselining repeatedly, and I am going to ask each of you to pay close attention, because I
intend to "personalize" the message--to emphasize how planning, budget, and strategic
assessment have directly impacted--and will continue to impact--you and your daily tasks.
The foundation of Strategic Assessment and Rebaselining rests on change--the new elements
being added to our mission; the changing world of those we regulate (i.e., new business
environments), which dictates that we must change; new opportunities to use new tools to
become more effective in our regulation; and changing expectations of our various stakeholders,
including the public, the Executive Branch (as evidenced by Vice President Gore's National
Performance Review), and the Congress.
Perhaps more than in any recent time, the U.S. Congress has taken a direct and intrusive interest
in holding Federal agencies accountable and demanding that they justify their resource needs,
their expenditures, and even their existence. None of you are unfamiliar with terms like
reinventing government, or with concepts like "do more with less," or with the actual impacts of
budget cuts. What is important to realize, however, is that the stakes are continuing to rise.
Let me give you an example. Most of you probably are aware of the information management
issue known as the "Year 2000" problem--referring to the fact that most computer systems that
manage dates and schedules are based on only the last two digits of the year, and therefore cannot
differentiate between, for example, the year 2000 and the year 1900. What you may not know is
that the member of the Congress who oversees information technology issues in the House
recently issued a "report card" in which Federal agencies were graded on their progress in
addressing this problem. This represents the high attention being given to this area by the
Congress. Now consider the potential impact at a practical level: four agencies were put on
notice by the Office of Management and Budget (OMB) that they will not receive any funding
for buying new computer and other information technology systems in FY99 until they have
plans in place to address the "Year 2000" problem in critical computer systems.
The point of this example is to illustrate the degree of detail and the level of interest that the
Congress has in how well agencies can justify (1) what they do, (2) why they do it, and (3) the
resources required. Looking backward from this perspective, the reason becomes obvious for the
level of effort and attention the Commission has focused on Strategic Assessment, the Strategic
Plan, and the Performance Plan.
Over two years ago, we undertook the Strategic Assessment and Rebaselining Initiative. Phase 1
was painstaking, but simple in nature. We attempted to answer two basic questions, across the
agency and in exhaustive detail: (1) What do we do? and (2) Why do we do it? This phase,
which was completed in April 1996, identified a series of topics on which the Commission
needed to deliberate and make decisions. We called these topics "Direction-Setting Issues"
(DSIs).
Phase 2 involved the development of options to address each of these issues. The Commission
shared its preliminary views with stakeholders through the Internet and public meetings. The
staff reviewed and summarized the comments from stakeholders on each issue paper, and the
Commission made its final decisions on the DSIs. This phase was essentially completed in
August 1996.
In Phase 3 we developed a new Strategic Plan, based on the results of Phases 1 and 2,
undergirded by the DSI decisions, in which we set forth the long-term direction and goals of the
NRC. In accordance with the Government Performance and Results Act, the Strategic Plan will
be reviewed annually and updated every 3 years. When, last month, we submitted to Congress
and OMB the NRC FY1997 - FY2002 Strategic Plan, Phase 3 of the Strategic Assessment and
Rebaselining had officially come to an end. I also should note that a copy of the Strategic Plan
was distributed to all employees this week, and I would encourage each of you to review it and
provide feedback.
This brings us to the current and final phase of Strategic Assessment and Rebaselining:
Implementation--or what has been referred to as the "Roll-out" of the Strategic Plan. Regardless
of what your involvement has been to date, at this point in the process every employee should sit
up and take notice. With the issuance of the Strategic Plan and the more dynamic Performance
Plan that flows from it, we are putting into place an agency planning process. This is not an
additional task to be added to your workload; it is the way to accomplish your work. In this
"Phase of Strategic Assessment and Rebaselining," we are no longer talking about a "special,
one-time effort," but rather a way of doing business. Each manager--and to a lesser extent, each
employee--must understand (1) how to develop an operating plan for your area of NRC
functionality; (2) how that plan fits into the overall Strategic Plan; (3) how to integrate that plan
with the budget process; and (4) how to conduct performance monitoring for that plan. In fact, I
would go so far as to pledge to the working-level staff that your managers, in the not-too distant
future, will be sitting down to explain to you the linkages of the Strategic Plan with your specific
area of work. I will be meeting with SES managers next month to emphasize precisely this need
and expectation.
The new agency planning process will provide an effective approach for planning, budgeting, and
assessing our performance against the goals of the Strategic Plan. The Chief Financial Officer
(CFO), in conjunction with the other members of the Executive Council, has developed a new
Planning and Performance Management System that will involve all employees in the planning
process--down to the branch and section level. The four main components of the system are as
follows: (1) setting the strategic direction and performance expectations for the specific
organization; (2) determining the resources and the planned accomplishments necessary to meet
those expectations; (3) measuring and monitoring performance against the established
expectations; and (4) assessing performance, developing lessons-learned, and applying the
results. This Planning and Performance System integrates many of the ongoing efforts associated
with the Operating Plan, program reviews, and program evaluations. In many ways, this
planning process represents a paradigm shift that relates not only to planning and resource
management, but in the way that the NRC conducts business in general. I encourage all of you to
become familiar with the goals of the Strategic Plan and to provide feedback on ways that we
more seamlessly can integrate planning into our day-to-day efforts.
Let me attempt to link all of this together: the more information and planning involvement that
the staff has at the first-line level, the more success we will have in meeting and adhering to the
Strategic Plan. The more success we have in adhering to the Strategic Plan, the more
"outcomes" oriented we will be, and the more likely we will be to have consistency and
acceptable performance in our programs and in our budget process, in a way clearly linked to
agency goals. And, given the current level of Congressional and stakeholder scrutiny, without
success and consistency in our budget process, we cannot expect to succeed in accomplishing our
mission as we understand it today.
Conclusion
In summary, I hope that I have re-emphasized the significant progress we have made in a number
of areas, the issues on which we must continue to remain focused, and in particular the need for
additional effort in planning and financial management. Most importantly, I hope that I also have
exhibited my pride at serving with you in this truly remarkable agency.
Now I would like to turn this meeting over to you. I would ask each of you who wishes to ask a
question to use one of the microphones available so that everyone can hear your question. Please
feel free to direct your question to any one of us. If your question is intended for all of us, I will
refer it to each of my Commission colleagues in turn. May we have the first question, please?
