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TITLE XXXI--DEPARTMENT OF ENERGY NATIONAL SECURITY PROGRAMS

Subtitle B--Program Authorizations, Restrictions, and Limitations

P. L. 111-

Joint Explanatory Statement of the Committees on Armed Services of the U. S. Senate and House of Representatives on H. R. 6523

From H. R. 6523

SEC. 3114. NOTIFICATION OF COST OVERRUNS FOR CERTAIN DEPARTMENT OF ENERGY PROJECTS.

(a) In General- Subtitle A of title XLVII of the Atomic Energy Defense Act (50 U.S.C. 2741 et seq.) is amended by adding at the end the following new section:

`SEC. 4713. NOTIFICATION OF COST OVERRUNS FOR CERTAIN DEPARTMENT OF ENERGY PROJECTS.

`(a) Establishment of Cost and Schedule Baselines-

`(1) STOCKPILE LIFE EXTENSION PROJECTS-

`(A) IN GENERAL- The Administrator for Nuclear Security shall establish a cost and schedule baseline for each nuclear stockpile life extension project of the National Nuclear Security Administration.

`(B) PER UNIT COST- The cost baseline developed under subparagraph (A) shall include, with respect to each life extension project, an estimated cost for each warhead in the project.

`(C) NOTIFICATION TO CONGRESSIONAL DEFENSE COMMITTEES- Not later than 30 days after establishing a cost and schedule baseline under subparagraph (A), the Administrator shall submit the cost and schedule baseline to the congressional defense committees.

`(2) DEFENSE-FUNDED CONSTRUCTION PROJECTS-

`(A) IN GENERAL- The Secretary of Energy shall establish a cost and schedule baseline under the project management protocols of the Department of Energy for each construction project that is--

`(i) in excess of $50,000,000; and

`(ii) carried out by the Department using funds authorized to be appropriated for a fiscal year pursuant to a DOE national security authorization.

`(B) NOTIFICATION TO CONGRESSIONAL DEFENSE COMMITTEES- Not later than 30 days after establishing a cost and schedule baseline under subparagraph (A), the Secretary shall submit the cost and schedule baseline to the congressional defense committees.

`(3) DEFENSE ENVIRONMENTAL MANAGEMENT PROJECTS-

`(A) IN GENERAL- The Secretary shall establish a cost and schedule baseline under the project management protocols of the Department of Energy for each defense environmental management project that is--

`(i) in excess of $50,000,000; and

`(ii) carried out by the Department pursuant to such protocols.

`(B) NOTIFICATION TO CONGRESSIONAL DEFENSE COMMITTEES- Not later than 30 days after establishing a cost and schedule baseline under subparagraph (A), the Secretary shall submit the cost and schedule baseline to the congressional defense committees.

`(b) Notification of Costs Exceeding Baseline- The Administrator or the Secretary, as applicable, shall notify the congressional defense committees not later than 30 days after determining that--

`(1) the total cost for a project referred to in paragraph (1), (2), or (3) of subsection (a) will exceed an amount that is equal to 125 percent of the cost baseline established under subsection (a) for that project; and

`(2) in the case of a stockpile life extension project referred to in subsection (a)(1), the cost for any warhead in the project will exceed an amount that is equal to 200 percent of the cost baseline established under subsection (a)(1)(B) for each warhead in that project.

`(c) Notification of Determination With Respect to Termination or Continuation of Projects- Not later than 90 days after submitting a notification under subsection (b) with respect to a project, the Administrator or the Secretary, as applicable, shall--

`(1) notify the congressional defense committees with respect to whether the project will be terminated or continued; and

`(2) if the project will be continued, certify to the congressional defense committees that--

`(A) a revised cost and schedule baseline has been established for the project and, in the case of a stockpile life extension project referred to in subparagraph (A) or (B) of subsection (a)(1), a revised estimate of the cost for each warhead in the project has been made;

`(B) the continuation of the project is necessary to the mission of the Department of Energy and there is no alternative to the project that would meet the requirements of that mission; and

`(C) a management structure is in place adequate to manage and control the cost and schedule of the project.

`(d) Applicability of Requirements to Revised Cost and Schedule Baselines- A revised cost and schedule baseline established under subsection (c) shall--

`(1) be submitted to the congressional defense committees with the certification submitted under subsection (c)(2); and

`(2) be subject to the notification requirements of subsections (b) and (c) in the same manner and to the same extent as a cost and schedule baseline established under subsection (a).'.

(b) Clerical Amendment- The table of contents for the Atomic Energy Defense Act is amended by inserting after the item relating to section 4712 the following new item:

`Sec. 4713. Notification of cost overruns for certain Department of Energy projects.'.

From S. 3454, National Defense Authorization Act for Fiscal Year 2011

SEC. 3114. NOTIFICATION OF COST OVERRUNS FOR CERTAIN DEPARTMENT OF ENERGY PROJECTS.

(a) In General- Subtitle A of title XLVII of the Atomic Energy Defense Act (50 U.S.C. 2741 et seq.) is amended by adding at the end the following new section:

`SEC. 4713. NOTIFICATION OF COST OVERRUNS FOR CERTAIN DEPARTMENT OF ENERGY PROJECTS.

`(a) Establishment of Cost and Schedule Baselines-

`(1) STOCKPILE LIFE EXTENSION PROJECTS-

`(A) IN GENERAL- The Administrator for Nuclear Security shall establish a cost and schedule baseline for each nuclear stockpile life extension project of the National Nuclear Security Administration.

`(B) PER UNIT COST- The cost baseline developed under subparagraph (A) shall include, with respect to each life extension project, an estimated cost for each warhead in the project.

`(C) NOTIFICATION TO CONGRESSIONAL DEFENSE COMMITTEES- Not later than 30 days after establishing a cost and schedule baseline under subparagraph (A), the Administrator shall submit the cost and schedule baseline to the congressional defense committees.

`(2) DEFENSE-FUNDED CONSTRUCTION PROJECTS-

`(A) IN GENERAL- The Secretary of Energy shall establish a cost and schedule baseline under the project management protocols of the Department of Energy for each construction project carried out by the Department using funds authorized to be appropriated for a fiscal year pursuant to a DOE national security authorization.

`(B) NOTIFICATION TO CONGRESSIONAL DEFENSE COMMITTEES- Not later than 30 days after establishing a cost and schedule baseline under subparagraph (A), the Secretary shall submit the cost and schedule baseline to the congressional defense committees.

`(3) DEFENSE ENVIRONMENTAL MANAGEMENT PROJECTS-

`(A) IN GENERAL- The Secretary shall establish a cost and schedule baseline under the project management protocols of the Department of Energy for each defense environmental management project carried out by the Department pursuant to such protocols.

`(B) NOTIFICATION TO CONGRESSIONAL DEFENSE COMMITTEES- Not later than 30 days after establishing a cost and schedule baseline under subparagraph (A) for a project with a total cost in excess of $100,000,000, the Secretary shall submit the cost and schedule baseline to the congressional defense committees.

`(b) Notification of Costs or Schedule Exceeding Baseline- The Administrator or the Secretary, as applicable, shall notify the congressional defense committees not later than 30 days after determining that--

`(1) the total cost for a project referred to in paragraph (1), (2), or (3) of subsection (a) will exceed an amount that is equal to 125 percent of the cost baseline established under subsection (a) for that project;

`(2) the total time required to complete such a project will be longer than 125 percent of the time specified in the schedule baseline established under subsection (a) for that project; and

`(3) in the case of a stockpile life extension project referred to in subsection (a)(1), the cost for any warhead in the project will exceed an amount that is equal to 125 percent of the cost baseline established under subsection (a)(1)(B) for each warhead in that project.

`(c) Notification of Determination With Respect to Termination or Continuation of Projects- Not later than 90 days after submitting a notification under subsection (b) with respect to a project, the Administrator or the Secretary, as applicable, shall--

`(1) notify the congressional defense committees with respect to whether the project will be terminated or continued; and

`(2) if the project will be continued, certify to the congressional defense committees that--

`(A) a revised cost and schedule baseline has been established for the project and, in the case of a stockpile life extension project referred to in subsection (a)(1), a revised estimate of the cost for each warhead in the project has been made;

`(B) the continuation of the project is necessary to the mission of the Department of Energy and there is no alternative to the project that would meet the requirements of that mission; and

`(C) a management structure is in place adequate to manage and control the cost and schedule of the project.

`(d) Applicability of Requirements to Revised Cost and Schedule Baselines- A revised cost and schedule baseline established under subsection (c) shall--

`(1) be submitted to the congressional defense committees with the certification submitted under subsection (c)(2); and

`(2) be subject to the notification requirements of subsections (b) and (c) in the same manner and to the same extent as a cost and schedule baseline established under subsection (a).'.

(b) Clerical Amendment- The table of contents for the Atomic Energy Defense Act is amended by inserting after the item relating to section 4712 the following new item:

`Sec. 4713. Notification of cost overruns for certain Department of Energy projects.'.

The Senate committee-reported bill contained a provision (sec. 3114) that would direct the Administrator of the National Nuclear Security Administration (NNSA) to establish a cost and schedule baseline for each nuclear weapon stockpile life extension program. The provision would also direct the Secretary of Energy to establish a cost and schedule baseline for each defense funded construction project and for each defense environmental management project managed under the Department of Energy project management protocols with a value in excess of $100.0 million. Each required cost and schedule baseline would be submitted to the congressional defensecommittees no later than 30 days after it is developed. If the cost of any project exceeds 125 percent of the cost baseline or if the time to complete the project will exceed 125 percent of the schedule baseline, the Administrator or the Secretary as the case may be shall notify the congressional defense committees within 30 days after any such determination is made.< Within 90 days of a cost or schedule breach, the Administrator or the Secretary as applicable shall notify the congressional defense committees if the project will be terminated or continued. If the project is continued the Administrator or the Secretary as applicable shall certify that a revised cost and schedule baseline is in place, that there is no alternative available other than to continue the project and still meet mission needs, and that a management structure is in place adequate to manage and control the cost and schedule of the project in the future.

The House bill contained no similar provision.

The agreement includes the Senate provision with an amendment that would reduce the threshold for cost breaches for construction line items and covered Environmental Management (EM) projects to $50.0 million. The amendment would eliminate the requirement to report schedule only breaches, and increase the threshold for the breach of the per unit cost of a life extension project to 200 percent. The life extension programs would thus be required to submit a notification if the total project cost exceeds 125 percent of the initial cost baseline or if the per unit cost exceeds 200 percent of the initial per unit cost baseline.

From S. Rpt. 111-201, to accompany S. 3454, NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2011

Notification of cost overruns for certain Department of Energy projects (sec. 3114)

The committee recommends a provision that would direct the Administrator of the National Nuclear Security Administration (NNSA) to establish a cost and schedule baseline for each nuclear weapon stockpile life extension program. The provision would also direct the Secretary of Energy to establish a cost and schedule baseline for each defense funded construction project and for each defense environmental management project managed under the Department of Energy project management protocols with a value in excess of $100.0 million. Each required cost and schedule baseline would be submitted to the congressional defense committee no later than 30 days after it is developed. If the cost of any project exceeds 125 percent of the cost baseline or if the time to complete the project will exceed 125 percent of the schedule baseline, the Administrator or the Secretary as the case may be shall notify the congressional defense committees within 30 days after any such determination is made.

Within 90 days of a cost or schedule breach the Administrator or the Secretary as applicable shall notify the congressional defense committees if the project will be terminated or continued. If the project is continued the Administrator or the Secretary as applicable shall certify that a revised cost and schedule baseline is in place, that there is no alternative available other than to continue the project and still meet mission needs, and that a management structure is in place adequate to manage and control the cost and schedule of the project in the future.