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SECY-98-076

April 9, 1998

PURPOSE:

To provide the Commission with the results of the expertise driven part of the core capability assessments performed by the Office of Nuclear Regulatory Research (RES), to obtain the Commission's approval of these assessments and to seek Commission endorsement of staff's plans for related follow-on activities.

BACKGROUND:

On April 2, 1997, SECY-97-075 (Attachment 1) was sent to the Commission requesting approval of a proposed methodology and criteria for evaluating core capabilities in RES. Attachment 2 is the June 6, 1997, Staff Requirements Memorandum (SRM) which approved the proposal in SECY-97-075 and asked the staff to:

1. ensure that the areas of research identified for assessment include those areas that are essential for the support of current and foreseeable future regulatory activities.

2. in addition to the inputs provided from other NRC user offices, also consider areas of research suggested by the industry;

3. make it much more clear as to how the recommended resource levels for each core research area were determined when documenting the core capabilities assessments;

4. analyze the core technical capabilities residing in the Office of Nuclear Reactor Regulation (NRR), Analysis and Evaluation of Operational Data (AEOD), and Nuclear Materials Safety and Safeguards (NMSS) and incorporate the results into the overall scope of activities and integrate the results with the core research capabilities analysis;

5. review the level of resources being applied to research activities that are in a "sunset" state; and,

6. review the weighting of criteria for Support Areas 5 and 6. [RES identified 6 regulatory functions in SECY-97-075 where support from a core capability might be needed. Area 5 addressed cooperative research and Area 6 addressed responses to oversight groups.]

DISCUSSION:

The staff's response to these SRM items is as follows:

Following is a discussion of the material forwarded by this paper:

Summary of the Expertise Driven Part of the RES Core Capability Assessment:

SECY-97-075 identified 39 areas of research where core capabilities might be needed and stated that the number of areas could be adjusted during the process of conducting the assessments. This paper forwards core capability evaluations for 29 areas of research, Attachment 5. The original 39 areas of research were reduced to 27 as logical combinations were made during the assessment process. None of the original 39 areas was deleted. Additionally, as a result of reviewing the 27 areas, two new areas were added -- Fire Protection and Safety and Materials Criticality Safety. These 29 areas represent the current collective views of RES and NRC user offices. Earlier reviews by outside organizations did not identify any areas beyond these 29. Several areas of possible research were deemed to not need a core capability. These are: material control and accounting, physical security, and environmental sciences (e.g., biology, ecology). The staff believes that if the expertise driven level of resources is maintained in the 29 identified areas, RES will have access to a full range of research expertise that can help respond to any unanticipated technical issues that may arise. This expertise is often shared between RES and contractor organizations. In these instances, there may be opportunities to substitute in-house staff for contractor funding which may prove useful during the budget process. This level of resources is a minimum capability that in most cases would need to be augmented to accomplish certain workloads. Without these minimum capabilities, significant time could be required to respond to issues or overly conservative regulatory decisions may have to be made. The results of the RES core capability assessments are contained in Attachment 5.

The Commission should note that core expertise in the disciplines required for research to support licensing of the Department of Energy's high-level radioactive waste repository at Yucca Mountain, Nevada, are resident within the NRC's Center for Nuclear Waste Regulatory Analyses and NMSS. The need for this expertise is not addressed in this paper.

During the development of the core capabilities, it became apparent that there is an inextricable relationship between the availability of expertise/facilities and the pursuit of meaningful research. Researchers must be actively engaged in their field of expertise to keep their skills sharp, maintain their qualifications, and stay in contact with their peers. If NRC and its contractors are not pursuing relatively stable programs involving challenging work, talented personnel are likely to leave. Another result is the loss of access to facilities and potential elimination of facilities due to lack of support. RES has built what it believes to be a minimum analytical and experimental effort into each core capability to provide reasonable assurance that both expertise and facilities can be retained. However, it should be recognized that, at the expertise level, there will be instances where only a single expert in a specific technical discipline will be available. In these situations, should the individual leave the NRC or one of its contractors, there could be a significant period of time before the necessary expertise could be reestablished.

Expertise Driven Core Capability Resources Versus FY 1998 Budget:

Attachment 6 is a summary showing expertise driven resources for each of the 29 core capability areas. This resource summary compares these resources with the FY 1998 budget. To help relate the core capabilities to areas of the budget, a crosswalk between each core capability and the budget sub-activities they support is provided in Attachment 7. At the end

of the resource summary, other budget activities are listed. The total resources in the FY 1998 budget column equals the current FY 1998 budget for RES. In order to provide a complete financial picture, Attachment 8 contains details on projects for which RES has recently requested more than $3.5M from prior year carryover funds.

One can see from the resource tables that three conditions exist. When the budget and core resources are equal or approximately equal, it indicates that the current budget is sufficient to sustain the core level of expertise and experimental facilities in that capability. When the budget is less than the core, it means that RES is now positioned to respond in a timely fashion to some, but not all, issues that might arise in that capability. In these instances, the effect of the budget shortfall (if greater than $100K) is described in the last section of the narrative behind the resource tables. These shortfalls will be examined during the upcoming budget cycle relative to other priorities. When the budget exceeds the core level, it means that today's workloads, driven by user needs and/or anticipatory research, dictate the application of resources above the core level. Because the FY 1998 budget was selected as a basis of comparison, resource differences identified in the resource tables may or may not reflect the long term situation.

It should be noted that there is significant ongoing work that would have to be terminated if RES was only funded at the expertise driven level. Some of the areas that are impacted are thermal hydraulic code development, PRA guidance development, fuel behavior experiments, digital instrumentation and control guidance and steam generator tube inspection and analysis. Each core capability assessment answers 5 key questions. The answer to question #4 in each assessment describes the specific work that could not be done in each area.

Differences Between the Assessments Provided in this Paper and those Described in SECY-97-075:

The material provided in this paper and future plans to deal with core capabilities differ in three ways from those described in SECY-97-075. The first difference is related to "workload driven" core capabilities. SECY-97-075 described two types of core capabilities--"expertise driven" and "workload driven."

Expertise Driven: This is a resource that would: stay current with the state of art (new and evolving nuclear related technologies, new research and other related developments) and understand the safety and regulatory significance of this work; provide a level of expertise and interaction such that there is ready access to experts worldwide; understand and maintain NRC's technical knowledge base and analytical tools; provide a nucleus around which a larger capability could be built, if needed; provide an "on-call" resource to help respond to unanticipated technical issues; and, conduct or cooperate in joint research efforts of a limited nature needed to retain expertise or to have access to facilities. This minimum capability is not based on workload. However, meaningful, challenging work is necessary to attract and retain high caliber expertise, both at the NRC and at contractor organizations. Core funding would also be needed to support work at critical or unique facilities, so those facilities are available when needed.

Workload Driven: This is a resource to conduct research in response to recurring demands from the regulatory process, largely from user needs, but it could also include anticipatory research. The resource level is determined based on past experience and the staff's expectation of what would be continuing, relatively steady state workload demands for the foreseeable future. It is not based on temporary or peak workloads that currently exist nor does it anticipate any in the foreseeable future. Peak or temporary work would be accomplished with above core resources provided as part of the RES budget. The functions described above under expertise driven, will also be performed within a workload driven core capability.

The core capabilities assessments in Attachment 5 are expertise driven. As RES started to assess workload driven core capabilities, it was recognized that resources to accomplish workload driven requirements are ultimately determined by the annual budget process. This process starts with RES, in conjunction with other NRC program offices, developing its annual budget request based on an assessment of work that needs to be accomplished. This request is then reviewed by the Program Review Committee, the Executive Council, and the Commission within the context of agency wide priorities and fiscal constraints. The Office of Management and Budget and Congress subsequently influence the size and makeup of the agency's budget, which historically has altered the makeup of the RES budget. The staff does not believe that a separate workload based assessment, performed outside the budget process, would be meaningful and concludes that the annual budget for RES best portrays the agency's position on a resource level to support workload driven core capabilities. Notwithstanding this conclusion, there are currently new user needs and some anticipatory research projects that the FY 1998/1999 budget levels cannot support. These shortfalls will be evaluated and prioritized along with existing research programs for both FY 1999 and FY 2000 during the upcoming internal budget review. It is likely that some work will either continue to be deferred or not be done at all due to existing fiscal constraints. In this regard, RES recently requested more than $3.5M from prior year carryover funds to initiate work in several areas (Attachment 8).

The second difference is that SECY-97-075 stated that after the Commission gave its preliminary approval to the core research capabilities, reviews by internal oversight groups and external stakeholders would "closely follow." Although these reviews will still be performed, RES plans to first complete three related follow-on activities. These are: 1) the internal budget review for FY 2000, 2) prioritization of research program components, and 3) the exploration of potential future research programs. Because these activities could result in changes to the RES core capabilities or the resource levels for core capabilities, staff recommends they should be completed, and core capabilities updated as needed, before any further core capability reviews by stakeholders are solicited. Given the above, external stakeholder reviews would likely take place next fiscal year.

The third difference involves prioritization of international cooperative research. SECY-97-075 stated that international cooperative research efforts would be prioritized during the core capability assessments. RES now proposes to perform this prioritization as it prioritizes its activities during the development and review of the FY 2000 budget. In doing so, senior management in RES, NRR, NMSS and AEOD will do a qualitative prioritization, which will be followed by a more systematic prioritization effort at some future date. The international cooperative research prioritization will be provided to the Commission after the CFO budget recommendations are forwarded to the Commission.

RECOMMENDATION:

That the Commission note the expertise driven core research capabilities provided in Attachment 5 will be considered as part of the Agency-wide effort to perform core capability assessments as outlined in SECY-98-037.

COORDINATION:

This paper has been coordinated with the Office of the General Counsel which has no legal objection. The Chief Information Officer has no objections to this paper. The Office of Chief Financial Officer has reviewed this Commission Paper and has no objections.

ATTACHMENT 4

LIST OF RESEARCH AREAS WHERE CORE CAPABILITIES ARE NEEDED

* Areas which are considered to be sunset, i.e., the level of resources in these areas are driven by the need to maintain expertise, not the need to satisfy regulatory requirements. Note: in most cases, resources at the expertise level can and do satisfy regulatory requirements, but the level of resources is not driven by these requirements.

ATTACHMENT 6

** RES obligated funds which are a part of the rulemaking resources transferred out of RES. RES will continue to include these obligated funds as part of the RES budget until expended by NRR/NMSS.

ATTACHMENT 7

ATTACHMENT 8