facilities that contain specified quantities of plutonium and highly enriched uranium, which require the Category I level of protection--the highest protection requirement. As agreed with your office, we examined two issues. First, we reviewed how NNSA manages its safeguards and security program. Second, we examined DOE's response to the terrorist attacks of September 11, 2001. In this regard, we examined (1) DOE's and NNSA's immediate response to the attacks; (2) DOE's efforts to develop the design basis threat (DBT), a classified document that identifies the potential size and capabilities of the terrorist forces that DOE and NNSA sites must be prepared to defend against; and (3) the challenges DOE and NNSA face in meeting the requirements of the new DBT.

To carry out our objectives, we reviewed DOE policy and planning documents, including orders, implementation guidance, and reports. We met with officials from DOE and NNSA headquarters and NNSA site offices. We obtained information primarily from DOE's Office of Security, Office of Independent Oversight and Performance Assurance, and Office of Environmental Management; and NNSA's Office of Defense Nuclear Security and NNSA's Nuclear Safeguards and Security Program. We visited NNSA's four production plants and the three design laboratories as well as NNSA's Office of Transportation Safeguards. We also visited four Office of Environmental Management sites that contain Category I special nuclear materials. At each location we met with both federal and contractor officials, observed their physical security operations and obtained and reviewed pertinent supporting documentation, including corrective action plans.

We performed our review from December 2001 through May 2003 in accordance with generally accepted government auditing standards.

'Category I special nuclear material that requires Category I level of protection includes plutonium and highly enriched uranium in the form of (1) assembled nuclear weapons and test devices; (2) specified quantities of products containing higher concentrations of plutonium or uranium, such as major nuclear components, and recastable metal; and (3) specified quantities of high-grade matenals, such as carbides, oxides, solutions, and nitrates.

*We did not include naval reactors in our review because that office is a semiautonomous entity within NNSA with a unique security structure and program.

• To compound the problems in conducting security assessments, NNSA contractors do not consistently conduct required analyses in preparing corrective action plans. As a result, potential opportunities to improve physical security at the sites are not maximized because corrective actions are developed without fully considering the problems' root causes, risks posed, or the cost versus benefit of taking corrective action.

· NNSA has shortfalls at its site offices in the total number of staff and in expertise, which could make it more difficult for site offices to effectively oversee security activities.

We made four recommendations designed to improve NNSA's security management and oversight. NNSA concurred with two of our four recommendations and has made progress in addressing the issues we identified, including publishing a Safeguards and Security Functions, Responsibilities, and Authorities Manual and developing and issuing guidance for corrective action plans. Beyond these changes, sustained attention and commitment to sound safeguards and security management will be needed as DOE and NNSA adjust to the post-September 11 security environment.

With respect to DOE's and NNSA's response to the September 11 terrorist attacks, we found that the department has taken a number of important steps to respond to the terrorist threat; however, DOE's response has been slow in some vital respects, and DOE and NNSA will need at least several years and an as yet undetermined amount of resources before their sites

Background

are fully prepared to meet the projected threat. Specifically, we found the following:

DOE and NNSA took immediate steps to improve security in the aftermath of the September 11 terrorist attacks. For example, DOE and NNSA moved to a higher level of security that required, among other things, more vehicle inspections and security patrols. While these steps are believed to have improved DOE and NNSA's security posture, they have been expensive and, until fully evaluated, their effectiveness is uncertain.

• The number and capabilities of the terrorists involved in September 11
attacks rendered obsolete DOE's DBT, last issued in 1999. However,
DOE's effort to develop and issue a new DBT took almost 2 years; it issued
the new DBT in May 2003. The effort to develop a new DBT was slowed
by, among other things, disagreements over the size of the potential
terrorist group that might attack a DOE or NNSA facility.

• Successfully addressing the increased threats contained in the new DBT will take time and resources, as well as new ways of doing business, sound management, and leadership. Currently, DOE does not have a reliable estimate of the cost to fully protect DOE and NNSA facilities against the new DBT. DOE and NNSA are developing preliminary cost estimates that could be included in the fiscal year 2005 budget, which is now being formulated. However, the fiscal year 2006 budget will probably be the first to show the full budgetary impact of the new DBT. Once funds become available, most sites estimate that it will take from 2 to 5 years to fully implement, test, validate, and refine strategies for meeting the new DBT requirements. Finally, DOE and NNSA will have to change how they perform physical security through such actions as employing new technologies, consolidating special nuclear materials, and closing unneeded facilities.

From the beginning of the Manhattan Project in the 1940s, a primary mission of DOE and its predecessor organizations has been to design, test, and build the nation's nuclear weapons. To accomplish this mission, DOE constructed a vast nuclear weapons complex throughout the United States. Much of this complex was devoted to the production and fabrication of weapons components made from two special nuclear materials-plutonium and highly enriched uranium.

The end of the Cold War changed the department's focus from building new weapons to extending the lives of existing weapons, disposing of surplus nuclear material, and cleaning up no longer needed weapons sites.

NNSA is responsible for extending the lives of existing weapons in the stockpile and for ultimately disposing of surplus nuclear material, while the Office of Environmental Management is responsible for cleaning up former nuclear weapons sites. Contractors, who are responsible for protecting classified information, nuclear materials, nuclear weapons, and nuclear weapons components, operate both NNSA and Office of Environmental Management sites.

Besides NNSA and the Office of Environmental Management, DOE has two other important security organizations. DOE's Office of Security develops and promulgates orders and policies, such as the DBT, to guide DOE and NNSA's safeguards and security programs. DOE's Office of Independent Oversight and Performance Assurance supports DOE and NNSA by, among other things, independently evaluating the effectiveness of contractors' performance in safeguards and security. It also performs follow-up reviews to ensure that contractors have taken effective corrective actions and appropriately addressed weaknesses in safeguards and security.

A key component of DOE's protective strategy is the DBT, a classified document that identifies the characteristics of the potential threats to DOE assets. The DBT considers a variety of threats in addition to terrorists: criminals, psychotics, disgruntled employees, violent activists, insiders, and spies. The terrorist threat is generally the most demanding threat contained in the DBT. The DBT has traditionally been informed and shaped by classified multiagency intelligence assessments of potential terrorists threats. The basis for DOE's 2003 DBT is an intelligence community assessment entitled the Postulated Threat to U.S. Nuclear Weapons Facilities and other Selected Strategic Facilities (henceforth referred to as the Postulated Threat).

DOE counters the terrorist threat specified in the DBT with a multifaceted protective system. While specific measures vary from site to site, all protective systems at DOE's and NNSA's most sensitive sites employ a defense-in-depth concept that includes

'Responsibility for the Idaho National Environmental Engineering Laboratory has been transferred to DOE's Nuclear Energy Program.

*An exception is the Office of Transportation Safeguards, whose protective forces are Special Federal Agents.

⚫ operational security procedures, such as a "two person" rule that prevents only one person from having access to special nuclear material;

⚫ hardened facilities and/or vaults; and

⚫ a heavily armed paramilitary protective force equipped with such items as automatic weapons, night vision equipment, body armor, and chemical protective gear.

Depending on the material, protective systems at DOE and NNSA Category I sites are designed to accomplish the following objectives in response to the terrorist threat.

Denial of access. For some potential terrorist scenarios, DOE employs a protection strategy that requires the engagement and neutralization of an adversary before the adversary can acquire hands-on access to the assets.

Denial of task. For assets that might present terrorists with opportunities to steal a nuclear weapon or nuclear test device, DOE requires the prevention and/or neutralization of the adversary before the adversary can complete a specific task.

• Containment with recapture. In scenarios where the theft of nuclear material (instead of a nuclear weapon) is the likely terrorist objective, DOE requires that adversaries not be allowed to escape the facility and that DOE protective forces recapture the material as soon as possible. This objective requires the use of specially trained and well-equipped special response teams.

The effectiveness of the protective system is formally and regularly examined through a vulnerability assessment. A vulnerability assessment is a systematic evaluation process in which qualitative and quantitative techniques are applied to detect vulnerabilities and arrive at effective protection of specific targets, such as special nuclear material. To conduct this assessment, DOE uses, among other things, subject matter experts, such as U.S. Special Forces, computer modeling to simulate attacks; and