Sandia has always done interesting work, but, as Paul Robinson made clear in his Oct. 13 employee dialogue sessions in New Mexico — repeated in California the next day — the Labs these days is certainly living in interesting times, as well.

In a wide-ranging review of events and issues that have affected the Labs over the past several months, Paul described — with intentional understatement — the "fairly turbulent period" that has characterized Department of Energy-related issues. He spoke to audiences of several hundred Sandians in the Steve Schiff Auditorium during two sessions on Oct. 13, and then to several hundred Oct. 14 at Sandia/California.

"It’s a pleasure not to be in Washington," said Paul, who has spent considerable time in the nation’s capital in recent weeks addressing budget issues and testifying before the Senate on the Comprehensive Test Ban Treaty.

In prepared remarks before taking questions, Paul addressed a number of topics suggested from employees via e-mail.

The FY00 budget shows a "slight downturn," Paul said as he projected a view-graph slide of budget trends on the auditorium’s large screen. The graph showed a dip in constant dollars for FY00, with a gradual but full recovery to the current status quo over the next few years. For FY99, the total Labs budget was $1.440 billion; the FY00 budget total — which includes operating costs, capital equipment, and construction funding — dips to $1.411 billion.

"The overall trend we still believe will keep us level or show a small increase in real buying power over the next I’ve years," Paul said.

Paul said the number of FTE (full time equivalent) employees at the Labs will decline in FY00 to 7,117, down from the FY99 FTE count of 7,572.

"We expect to handle anything we need to do with attrition," he said. "We don’t expect a VSIP [Voluntary Separation Incentive Program]."

Paul noted that between 1994 and FY00, the Labs FTE count declined from 8,494 to 7,117. Part of the decision to go to fewer FTEs has been to offer larger raises each year to the employees who remain.

"We put a premium on paying our employees what they deserve," Paul said.

Paul said the Labs’ cost situation "is one that is manageable, and we do intend to manage it." But he noted that the Senate Energy and Water appropriation bill — from which Sandia receives a substantial portion of its funding — "should be sobering to everyone." He said that to some extent Sandia has been "tarred with the same brush" as other DOE laboratories for their budgetary lapses. As a result, Sandia’s Laboratory Directed Research and Development (LDRD) funding will decline from 6 percent of the operating budget to 4 percent. Even though this represents a significant decline, Paul said, it also represents a political victory, given that there was a serious push in some quarters to "zero-out" LDRD altogether. The funding was saved from oblivion, he said, thanks in no small part to "help from key senators. . . our own Pete Domenici and well as a new and very special friend in John Warner [Republican senator from Virginia]." For historical perspective, LDRD funding in FY91 was 2.5 percent of the operating budget.

Paul also noted that the FY00 budget mandates a 30 percent reduction in travel and places strict new limits on the number of staff who can be stationed in Washington, D.C.

Paul updated employees on the ongoing political struggle over the implementation of the legislatively mandated reorganization that would create a new National Nuclear Security Administration as a semiautonomous agency within DOE. The new agency, was created by Congress in legislation in reaction to concerns over alleged lax security at the weapons labs. The political flap, Paul explained, is that President Clinton then appointed Energy Secretary Bill Richardson to serve as head of the new agency, and Richardson in turn appointed existing DOE personnel to simultaneously staff administrative positions in the new agency.

"I have a feeling that’s not going to be the final look [of the agency]," Paul said, noting that he has "never seen more anger from senators toward the White House" than over the President’s actions on the implementation of the new agency. "I would predict this is an unstable situation," Paul said. He thanked former Vermont Senator Warren Rudman, who led the commission that looked at labs security issues, for trying to bring all the parties together.

How the issue will be resolved? "I’ll have to say ‘stay tuned,’ " Paul said. "I’ve told you all I know, but you can be sure there are extraordinary maneuverings going on."

Paul predicted that because of the unusually high level of political animosities in the air, a replacement for Vic Reis, the former Assistant Secretary for Defense Programs who resigned will not be approved during this administration.

Paul said the recently announced restructuring of Lockheed Martin, including the elimination of the Energy and Environment Sector, will probably not have a significant impact on Sandia. However, he said the corporation’s problems can offer some lessons for Sandia. He noted that an internal study, headed by former Martin Marietta CEO Tom Young, found several specific causes for the corporation’s well-publicized problems. Key points of the Young report: cost cutting was taken too far; oversight was misdirected or absent on many programs; large sector staffs were a bottleneck; and the workforce is demoralized and frustrated by sharply declining stock values. Lockheed Martin management, Paul said in summary, "has its work cut out for it" in rebuilding shareholder value.

Other issues Paul addressed:

• Polygraphs — Sandia is in "somewhat of a pickle" on the issue of polygraph implementation, Paul said, because for more than a decade the Labs has had a polygraph program for special key compartmented programs related to intelligence or defense work. Over the years, Sandia has had 188 people polygraphed for these special programs. "We’ve always made it voluntary — and we’ve never had anyone not volunteer," he said. When the recent concerns about security issues began to move toward polygraphs, it was initially thought that only a few individuals with access to very sensitive information would be involved, Paul said. However, the proposed polygraph implementation rule issued by DOE security czar Eugene Habiger seemed to vastly expand the scope of the polygraph requirement, Paul said. Conceivably, he said, under the proposal, every Sandia employee with a Q clearance could be required to undergo a polygraph exam — and that could mean every employee, because Paul said he thinks the "L" clearance will probably go away. Paul said he thinks the entire issue of the polygraphs needs to go through a "big cooling off period." He said he was proud to "see our folks step forward and say what they believe" in an open forum about polygraph testing (Lab News, Sept. 24).
  
• Disparity in the number of direct reports among managers — "One size does not fit all," Paul said, adding that there isn’t a "magic number" that represents the correct manager/direct-report ratio. However, he noted that Sandia soon will reintroduce "selectively" an additional management level to help relieve some managers and directors of undue burdens, but taking great care that the total number of managers will not increase. (See story on page 9.)
  
• Benefits update — Paul noted that the Benefits Department is rolling out a number of significant changes. He noted that details would be available in the Lab News (see special four-page section in the center of this issue), on the Internal Web, via town meetings and through direct distribution of informational brochures. He said an announcement regarding changes in the pension plan and in other benefits for retirees will be made soon, pending approval from DOE.
  
• Sandia Science and Technology Park — To avoid any apparent conflicts of interest or the appearance of misuse of federal dollars for a strictly local initiative, Paul said management of the industrial park outside the Eubank gate has been assumed by Technology Ventures Corporation. He noted that several new companies are slated to join the existing four tenants in the park, adding that an additional 16 companies have expressed interest in the location.
  
• Matrixing — Matrixing is invaluable in the way Sandia does business; indeed, Paul said, "We have to be the world’s best at matrixing." At the same time, he said more emphasis is needed on making sure that matrixed employees get a fully fair shake in the performance review process.
  
• Performance review — Paul reiterated the Labs’ intent that employees are rated compared to other staff members at their own level. Thus, SMTSs should not compete directly with DMTSs for the quota-based award of H and E+ ratings. "You should compete within your peer group; the quotas should be applied there." In the same area, he noted that Sandia does tie pay to performance (Lab News , July 16), showing charts depicting the clear trend toward paying higher raises to employees with higher "value of contribution" ratings.
  
• Salaries and Integrated Job Structure (IJS) — "Why do some classifications get smaller raises than others? That’s easy," said Paul. "We pay to market." The move to the IJS, he said, has greatly facilitated annual salary negotiations with DOE. To the written comment that the IJS approach generates morale problems, Paul said "If you like the raise packages we’ve been able to offer, you cannot dislike IJS. Without IJS [and the empirical connection of pay to the external market] we wouldn’t have been able to get those kinds of raises. Have we got to do a better job of execution [of IJS]? Absolutely. I don’t know how we’ll ever make it perfect," he said, "but we’re always pushing for better implementation."
  

As has become customary during dialogue sessions since he became Labs Director, Paul began his presentation with a video (produced for the occasion by Video Services Dept. 12610) of Labs highlights over the past four months. Following the video, Paul singled out for special commendation the Sandians who worked on the Labs’ three most recent R&D 100 Award technologies. (Lab News, July 16).