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POLICY ISSUE
(Notation Vote)

SECY-05-0146

August 12, 2005

• PURPOSE
• BACKGROUND
• DISCUSSION
• RESOURCES
• COMMITMENTS
• RECOMMENDNATIONS
• COORDINATION

PURPOSE:

Proposed, for Commission approval, is a reorganization of the Office of Nuclear Reactor Regulation (NRR). This reorganization is being proposed to: (1) prepare for and discharge the increase in the new reactor licensing workload, (2) better align the organization for risk-informed regulation, and (3) reduce a layer of executive management to allow an increase in the number of first-line supervisors. If approved, the transition to this new organization would begin in October 2005.

BACKGROUND:

The last major NRR reorganization occurred in March 1999¹ and was implemented to increase responsibility and accountability by aligning the office consistent with major program areas such as licensing, inspection, performance assessment, and license renewal. The existing organization evolved from the 1999 reorganization as shown in Attachment 1 . The proposed reorganization would restructure NRR’s current organization mainly to prepare for the anticipated increase in the new reactor licensing workload (Attachment 2 ). The staff believes the proposed reorganization will improve the effectiveness and efficiency of NRR’s programs and processes.

The staff performed a comprehensive review of the existing programmatic functions of the office to determine a more effective and efficient way to fulfill NRR’s mission, given the projected organizational needs. This review addressed several issues that would be factored into the restructured office, such as results from the 2002 Office of the Inspector General Culture Survey regarding management and supervision and areas for improvement identified in NRR’s Roles and Responsibilities Initiative. Based on this comprehensive review, the staff realized the need to better position the organization to address these issues and handle a significant increase in work in both new reactor licensing and risk-informed initiatives.

DISCUSSION:

NRR senior managers met to develop the proposed reorganization framework and transition strategy. They proposed a reorganization that would reduce the number of Senior Executive Service (SES) management positions to allow for an increase in the number of first-line supervisory positions and an elimination of a layer of management. Attachment 3 contains a table indicating the number of SES positions for the current and proposed organizations.

The proposed reorganization would realign major work functions within smaller divisions. The functional work units (sections and teams) of existing divisions would also be realigned. To better focus new reactor licensing and risk-informed regulatory initiatives, activities, and synergy, new divisions for each function would be created. Additionally, to group the divisions into areas of engineering systems, operating reactor oversight and licensing, and risk assessment and new projects, three Associate Directors (ADs) would be created to replace the one AD currently in place.

The staff concluded that some sections need to be reduced in size to provide better first-line supervision. This reduction in the size is particularly significant since the anticipated funding in fiscal year 2006 (FY-06) and likely budget increases in FY-07 for new reactor licensing could mean a growth of 150 staff for NRR. Most of this staff growth will be entry-level professionals, which will place additional demands on first-line supervisors.

Although the proposed reorganization should support growth for FY-06 and FY-07, resources for out years would be subject to change and additional modifications may be necessary. The proposed organization framework is flexible and would be able to support any necessary changes.

Organizational Structure

The current NRR organizational structure (Attachment 1 ) evolved from the 1999 reorganization. The proposed reorganization would expand from five large technical divisions to nine smaller divisions with a goal of less than 80 staff per division. The Program Management, Policy Development and Planning Staff (PMAS) would remain the same as in the current organization and report directly to the office director. Also, three ADs would be established to oversee the functions of the nine divisions (Attachment 2 ).

First-line supervisors would be redesignated as branch chiefs with additional branch chiefs being created to meet FY-06 staffing plan estimates.

Impact on SES Positions

The proposed reorganization would include a top-down realignment of SES positions, maintaining the current 30 positions with multiple deputy directors in some divisions. This is needed to facilitate change to management controls and ensure a smooth transition to the new organization. When completely implemented, the reorganization would reduce the number of SES positions by six (30 to 24). These six positions would be eliminated through attrition. The final organization would have one deputy director for each technical division. Essentially, the reorganization would increase the number of division directors and deputies, and eliminate branch-level SES positions. The elimination of branch-level positions is consistent with the agency’s efforts to reduce layers of management as discussed in SECY-03-0011, "Response to June 27, 2002 Staff Requirements Memorandum on Human Capital Management and Workforce Planning," dated January 27, 2003.

The proposed reorganization should facilitate projected growth for FY-06 and FY-07 to prepare for the expected FY-08 new reactor workload. However, the resources for out years are subject to change and may necessitate further reorganization, including creation of another division. Thus, the number of SES positions could change from this proposal. Further, the reorganization may result in staff-to-supervisor ratio of less than 8.5:1 during transition to the final organization.

If the Commission approves the proposed reorganization, the staff will base decisions regarding SES and other supervisory reassignments on performance history and demonstrated management, technical and administrative competencies. The staff would move to the new organizational structure at one time after approval, beginning in October 2005.

Increased Focus on New Reactor Licensing

As discussed in SECY-05-0013, "Semiannual Update of the Status of New Reactor Licensing Activities and Future Planning for New Reactors," dated January 12, 2005, recent developments within the United States and abroad have increased interest in licensing and construction of new reactors. Given this heightened interest, the staff’s recent completion of its technical review of the Westinghouse Advanced Plant (AP) 1000 design certification application, and the staff’s continued progress on the reviews of three early site permit applications, the staff proposes to reorganize NRR to be in the best organizational (programmatic and technical) position to review new reactor license applications. To this end, the Division of New Reactor Licensing would be created to place greater organizational emphasis in this area. Additionally, with the anticipated growth in the coming years in the Nuclear Regulatory Commission (NRC) and NRR’s budgets for new reactor licensing activities, this reorganization would ensure resources are allocated in the most effective, efficient way.

To prepare the agency in this area, a team reporting to the NRR deputy director has been formed to address the immediate and future staffing needs in the new reactor licensing area. This team is addressing resource needs, hiring and recruiting efforts, and knowledge management and training issues associated with new reactor licensing.

Organizational Realignment for Risk-Informed Regulation

As described in recent updates to the Commission on the staff’s risk-informed initiatives (e.g., SECY-05-0068, "Update of the Risk-Informed Regulation Implementation Plan," dated April 22, 2005), the staff continues to make significant progress in its efforts to support the agency’s Strategic Plan and Probabilistic Risk Assessment Policy Statement.

While the current NRR organization has furthered the NRC’s goal of maintaining a risk-informed, performance-based approach to regulation, the proposed organization would strengthen this approach by consolidating risk-informed programmatic functions into a new Division of Risk Assessment. The proposed reorganization would also add an AD to oversee the integration of the risk-based initiatives of various NRC divisions and programs.

Consistency With Agency Supervisory Ratio Target

The staff has evaluated the impact of the proposed reorganization on various management targets. In the proposed reorganization, the staff would continue to operate within established management targets for supervisory ratios and GG-14 and above positions. Based on current projections, the supervisory ratio in the proposed organization would be greater than or equal to 8.5:1. However, during the transitional period (i.e., until the final number of SES managers is reduced to 24), the supervisory ratio may be less than 8.5:1.

While the number of SES managers would be reduced, the number of supervisory GG-15 positions would be increased to achieve improved staff oversight at the first-line supervisory level. The supervisory GG-15 positions would be branch chiefs in the proposed organization.

The staff is currently evaluating the revised office targets for GG-14 and above positions and the grade restructuring goals provided in the June 24, 2005, Office of Human Resources (OHR) memorandum, "Position Management." The staff will ensure that the NRR staffing plan is consistent with OHR’s position management targets and goals.

The proposed reorganization would not reduce the existing number of Senior Level System employees.

Modified Functional Statements

Functional statements for each division in the current and proposed organizations are attached (Attachment 4 ). As discussed earlier, the programmatic functions of existing NRR divisions would be realigned to better position the office for the increase in new reactor licensing and risk-informed regulation activities. The proposed functional statements reflect the organizational realignment.

Implementation of the Proposed Organization

Upon Commission approval, the reorganization, or any future changes to the reorganization, would be implemented once appropriate union interactions have been completed. NRR management has held preliminary discussions with the NRR Labor/Management Partnership Committee on the basic framework, goals, and objectives of the proposed reorganization. It is believed that any further changes to the proposed organization will not impact the basic structure or concept of the reorganization as proposed herein. As the staff continues to refine the staffing plan, it may be necessary to establish additional branches in order to ensure appropriate staff-to-supervisor ratios. In addition, if branches are added to accommodate additional staff and workload, another division may also be created, resulting in a smaller reduction in the final number of SES positions.

The staff requests Commission approval to implement the proposed reorganization in October 2005.

RESOURCES:

The proposed reorganization would be implemented based on NRR’s current budget projection for FY-06.

COMMITMENTS:

The staff commits to implement the reorganization consistent with the recommendations discussed below and upon Commission approval.

RECOMMENDATIONS:

The staff recommends that the Commission approve the following:

1) The proposed NRR reorganization as discussed herein.

2) The proposed October 2005 implementation date of the reorganization, upon completion of appropriate union interactions.

3) A staff-to-supervisor ratio for the office of less than 8.5:1 during transition to the final organization.

COORDINATION:

The Office of the General Counsel has reviewed this paper and has no legal objection to the proposed reorganization. The Office of the Chief Financial Officer has reviewed this paper and has no objection to the proposed reorganization.

¹ Memorandum from S. Collins, NRR, to P. Bird, Office of Human Resources, "Proposed Reorganization of the Office of Nuclear Reactor Regulation," dated September 18, 1998

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