NNSA
Nuclear Weapon Reports Need to Be More Detailed and Comprehensive Gao ID: GAO-02-889R July 3, 2002The National Nuclear Security Administration (NNSA) spends $5.5 billion a year to maintain the safety and reliability of the nation's nuclear weapons stockpile through the Stockpile Stewardship Program. Because the United States is no longer designing and building new nuclear weapons, extending the life of each of the nine weapon types in the current stockpile is a key component of this program. However, the criteria used by NNSA for determining when its reporting should begin may prevent Congress from receiving complete information on life extension costs. The current Nuclear Weapon Acquisition Reports (NWAR) are less detailed and comprehensive than the Department of Defense's Selected Acquisition Reports. Finally, the cost data in the NWARs exclude significant costs that are necessary to successfully complete the life-extension efforts.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-02-889R, NNSA: Nuclear Weapon Reports Need to Be More Detailed and Comprehensive
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United States General Accounting Office:
Washington, DC 20548:
July 3, 2002:
Congressional Requesters:
Subject: NNSA: Nuclear Weapon Reports Need to Be More Detailed and
Comprehensive:
The National Nuclear Security Administration (NNSA), a separately
organized agency within the Department of Energy (DOE), spends more
than $5.5 billion a year to maintain the safety and reliability of the
nation‘s nuclear weapon stockpile through an effort known as the
Stockpile Stewardship Program. Because the United States is no longer
designing and building new nuclear weapons, extending the life of each
of the nine weapon types in the current stockpile is a key component of
this program. To accomplish this task, NNSA will have to (1) determine
which components will need refurbishing to extend each weapon‘s life;
(2) design and produce the necessary refurbished components; (3)
install the components in the weapons; and (4) certify that the changes
do not adversely affect the safety and reliability of the stockpile.
Life extension efforts for each weapon type can cost hundreds of
millions of dollars and take many years to complete. Life extensions
are carried out by three laboratories that perform research and
development (R&D), design, and certification tasks and four production
plants that disassemble weapons to be refurbished, manufacture and
install the weapon components to be replaced, and reassemble the
weapons. NNSA manages life extension efforts using a multi-part nuclear
weapon refurbishment process, referred to as the 6.X Process, that
separates the life extension process into phases. The first three
phases”6.1 Concept Assessment; 6.2 Feasibility Study and Option Down-
Select; and 6.2A Design Definition and Cost Study”are primarily R&D
activities and studies that determine what changes are needed to ensure
that a weapon system remains a safe and reliable part of the nation‘s
nuclear stockpile. The next three phases”6.3 Development Engineering;
6.4 Production Engineering; and 6.5 First Production”convert the R&D
designs into final designs and manufacturing processes in order to
produce refurbished weapons that meet the military requirements set by
the Department of Defense (DOD). The last phase”6.6 Full-Scale
Production”manufactures and installs the components needed to refurbish
the weapons undergoing life extension and returns refurbished weapons
to the stockpile. The joint DOE-DOD Nuclear Weapons Council [Footnote
1] approves life extensions at three points in this process”before the
6.2 Feasibility Study and Option Down-Select R&D phase begins, before
the 6.3 Development Engineering phase begins, and before 6.6 Full-Scale
Production begins.
The Congress has stated that the information available for overseeing
these important activities is not adequate for its needs. As a result,
the conference report on the Energy and Water Development
Appropriations Act of Fiscal Year 2002 (P.L. 107-66, H.R. 2311) directs
NNSA to begin submitting annual reports on its major defense
acquisition programs to extend the life of nuclear weapons in the
nation‘s stockpile. Specifically, the Congress directed NNSA to (1)
identify criteria to designate which programs qualify as major defense
acquisitions, (2) determine when reporting on major defense acquisition
programs should begin and end, (3) address ’each and all“ blocks of
weapon systems being refurbished using a ’block“ approach, [Footnote 2]
(4) submit reports similar in content and format to DOD‘s Selected
Acquisition Reports (SAR), and (5) submit the reports on an annual
basis to accompany the President‘s budget. DOD‘s SARs, which are
required by 10 U.S.C. 2432, provide the Congress with information on
DOD‘s major defense acquisition programs”those that meet certain
thresholds for R&D, acquisition, or procurement costs. SARs include
information on the current cost, schedule, and performance of weapon
acquisition programs and compare current information to approved
baseline estimates. SARs are intended to provide a comprehensive look
at program progress by providing information on past performance,
anticipated changes, and variances from planned cost, schedule, and
performance estimates from program inception to completion, regardless
of the program‘s stage of development. Prior to 1991, DOE issued
reports on new weapon programs that were similar to the SARs, although
those reports were not as detailed.
In response to congressional direction, NNSA has defined a major
defense acquisition as a program costing $300 million or more over its
lifetime. NNSA decided to begin reporting for each life extension
effort after approval by the Nuclear Weapons Council to enter Phase 6.3
Development Engineering, and to end reporting with the completion of
Phase 6.6 Full-Scale Production. Three of the four ongoing life
extension programs meet these criteria”the W87 life extension, which is
in full-scale production, and the W76 and W80 life extensions, which
are in development engineering. Both the W76 and W80 are being
refurbished using a block approach, with the life extension effort for
the first block of each weapon system underway at this time. The fourth
system, the B61, is still in the R&D stages of the process and does not
meet NNSA‘s criteria for reporting. The Nuclear Weapon Acquisition
Reports (NWAR) issued in April 2002 are based on similar weapon
acquisition reports that DOE issued prior to 1991, rather than being
based on DOD‘s current SARs.
The conference report directed that GAO review NNSA‘s NWARs within 90
days of their issuance. Our objectives were to (1) assess the criteria
NNSA developed for NWAR reporting, (2) compare the NWARs with DOD‘s
SARs, and (3) analyze the cost data presented in the NWARs. In response
to these objectives, we analyzed the April 2002 NWARs for the W76, W80,
and W87 life extension programs; reviewed DOD‘s criteria and guidance
for the SARs; and compared NNSA‘s NWARs with DOD‘s SARs, including SARs
covering acquisition programs at various stages of development.
Finally, we compared the NWARs with the various plans being used to
manage life extension efforts, NNSA‘s Fiscal Year 2003 budget
submission, and NNSA‘s long-range Future Years Nuclear Security Program
plan. We conducted our review from April 2002 through July 2002 in
accordance with generally accepted government auditing standards. We
briefed your offices on the results of our review on Monday, June 24,
2002 (see enclosure 1).
In summary:
The criteria that NNSA developed for determining when its reporting
should begin may prevent the Congress from receiving complete
information on the cost of life extension efforts. Specifically, since
NNSA begins reporting with the Development Engineering phase (6.3),
significant amounts of time and money spent in earlier phases of the
life extension process (6.1, 6.2, and 6.2A), which include R&D
activities, are unaccounted for in the NWARs. For example, NNSA expects
these early phases of life extension programs to constitute more than
one-third of the total expected time to complete the 6.X process for
each weapon system. While NNSA could not provide data on the costs of
Phases 6.1, 6.2, and 6.2A, the agency conceded, in commenting on our
report, that Phases 6.1 through 6.2A invariably include R&D. In
contrast, DOD reports significant R&D costs in SARs specifically
designated for that purpose. NNSA officials relied on their pre-1991
reports to determine the format and content of the current NWARs, such
as excluding R&D costs from the reports. In addition, despite
congressional direction to report data on ’each and all“ blocks of
weapons being refurbished using a block approach, the criteria NNSA has
chosen mean that the NWARs cover the costs only for the first block of
those life extensions. However, during Phases 6.2 and 6.2A, NNSA
develops planning data on the cost of refurbishing all weapons of a
specific type, which could be reported in the NWARs.
The current NWARs are not comparable to DOD‘s SARs. In particular, the
NWARs are less detailed and comprehensive. For example, SARs are based
on a program‘s controlled cost, schedule, and performance baseline and
are linked to DOD‘s budget and long-range Future Years Defense Plan. In
contrast, while the NWARs are linked to the Fiscal Year 2003 budget,
NNSA does not currently have a disciplined process to ensure that the
NWARs are consistent with its long-range plan. NNSA is developing a
planning, programming, budgeting, and evaluation system that it
anticipates will provide the linkage between its budget and planning
documents. We also found that the NWARs omit significant cost and
performance information. For example, DOD‘s SARs present extensive
information on cost and schedule baselines and variances at both the
program and major contractor levels. In contrast, while the NWARs have a
format for reporting on program cost variances, no such analysis is
included because NNSA views the 2002 NWARs as the baseline for future
reports. In addition, the NWARs contain no information on program
schedule baselines or variances. However, as we reported in December
2000, [Footnote 3] the W87 life extension effort, which
started in September 1994, has already exceeded its cost estimate by
more than $300 million and fallen two years behind schedule”information
that could have been included in the NWARs. Moreover, the NWARs do not
present any information on cost and schedule baselines for any of the
individual contractors who manage the laboratories and production
plants working on each life extension effort.
Finally, the cost data in the NWARs exclude significant costs that are
necessary to successfully complete the life extension efforts. For
example, the W76 life extension managers have identified more than 130
items (deliverables) critical to the program‘s success that must be
supplied by other NNSA Defense Programs components. These deliverables
include things such as modifying production capabilities at the Y-12
Plant in Tennessee and construction projects such as expanding a
production processing line at the Kansas City Plant in Missouri.
However, NNSA includes only the direct costs shown in the Directed
Stockpile Work portion of its budget in the NWARs. Other costs, such as
those identified above, are included in the R&D (Campaigns) and
infrastructure (Readiness in Technical Base and Facilities) portions of
NNSA‘s budget and, under NNSA‘s rationale, are excluded from the NWARs.
DOD, on the other hand, reports all costs specifically related to a
weapon system covered by a SAR, including R&D, testing, and
construction costs that are needed to support the delivery of the
weapon system.
Conclusions:
Overall, we believe that the current, initial set of NWARs represents a
good beginning. However, rather than following congressional direction
to submit reports similar in format and content to DOD‘s SARs, NNSA
modeled its current NWARs on similar reports DOE had done prior to 1991
that were less detailed than SARs. NNSA could improve the quality and
usefulness of its reports if the NWARs contained information comparable
with what DOD includes in its SARs. For example, if NNSA started
reporting at the 6.2 Feasibility Study and Option Down-Select phase and
included all relevant costs from all portions of its budget structure,
the Congress would have more complete information on the costs of each
life extension. Such improvements would make NNSA‘s NWARs more
comparable to the DOD SARs that the Congress directed NNSA to use as a
model for weapon acquisition reporting.
Recommendations for Executive Action:
To improve the quality and usefulness of the NWARs, we recommend that
the Secretary direct the Administrator of the National Nuclear Security
Administration to make the following improvements:
* begin reporting life extension costs at Phase 6.2 Feasibility Study
and Option Down-Select;
* include available information on the estimated cost of additional
blocks for those weapons refurbished using a block approach,
recognizing that such information may be preliminary and subject to
change;
* revise the analysis presented in the NWARs to conform more closely to
that presented in DOD‘s SARs by including items such as baseline and
variance information for each contractor working on a life extension;
and;
* include all weapon-specific R&D, testing, and construction costs,
regardless of where the costs appear in NNSA‘s budget structure.
We provided NNSA with a draft of our report and received oral comments
from NNSA‘s Director of Policy and Internal Controls Management. NNSA
agreed with one of our recommendations and disagreed with the three
other recommendations. In addition, NNSA provided clarifying comments
that we incorporated as appropriate. Specifically, with regard to our
recommendation that NNSA revise the analysis presented in the NWARs to
conform more closely to that presented in DOD‘s SARs, NNSA agreed with
our recommendation and promised to make improvements. NNSA‘s specific
comments and our responses regarding the remaining three
recommendations follow.
With regard to our recommendation that NNSA begin reporting with Phase
6.2, NNSA disagreed because it views 6.2 and 6.2A as study phases
designed to determine the activities that will be included in a life
extension effort. However, it recognized that these phases include R&D
activities that extend into later phases of a life extension and
suggested submitting a separate report to cover these phases. While we
recognize that such supplemental reporting would be useful if it
includes cost data, as well as schedule and performance data, we
continue to believe that the costs incurred in the early 6.X phases are
relevant to presenting a complete picture of life extension program
costs to the Congress.
With regard to our recommendation that NNSA include information on the
estimated cost of additional blocks for those weapons being refurbished
using a block approach, NNSA disagreed because, in its view, the reason
for using a block approach is to allow for changes in scope as program
requirements change. In addition, under NNSA‘s reporting criteria, only
those life extensions that have been approved by the Nuclear Weapons
Council to enter Phase 6.3 are subject to reporting in NWARs. We
recognize that cost estimates for refurbishing all of the weapons of a
specific type represent planning information and are not final or of
the same quality as the baseline data developed for Phase 6.3. However,
we believe that this data can be presented in a way that clearly
differentiates between planning data and an approved block‘s baseline.
By presenting this data in the NWARs, NNSA would provide the Congress
with some information on what the potential total cost of refurbishing
all of the weapons of a specific type might be and would assist the
Congress in performing its oversight function.
Finally, with regard to our recommendation that NNSA include all weapon-
specific costs in the NWARs, NNSA disagreed because it funds many R&D,
testing, and construction activities in the Campaign and Readiness in
Technical Base and Facilities categories of the budget. Those two
budget categories fund activities that NNSA views as necessary to
provide the ’capability“ to maintain the nuclear deterrent, whereas the
Directed Stockpile Work budget category is used to fund direct costs of
weapon refurbishment. In addition, NNSA noted that these capability
costs would probably be incurred even if a specific life extension
effort were to be canceled. We recognize that not all of the costs
presented in the Campaign and Readiness in Technical Base and
Facilities budget categories are related to a specific life extension
effort. However, NNSA‘s Future Years Nuclear Security Program plan,
budget justification, implementation plans, and other planning documents
justify many expenditures based on the requirements of specific life
extension efforts. For example, the Future Years Nuclear Security
Program plan lists numerous activities under the Campaign category that
are specifically related to individual life extensions, such as
developing advanced firing system technology for the W80, developing
instrumentation and hardware for W76 flight tests, and completing work
on circuits for component miniaturization for the W76. In addition, the
Readiness in Technical Base and Facilities budget justification
includes several projects directly related to the W76, such as
upgrading production bays and cells at the Pantex Plant and modifying
the tritium loading and cleaning facilities at the Savannah River site.
We believe these examples amply demonstrate that the information in the
NWARs cannot be considered complete without incorporating cost
information from the other components of the Defense Programs‘ budget
that support individual life extension efforts.
As agreed with your offices, we will make copies of this report
available to others upon request. This report will also be available at
no charge on GAO‘s web site at [Hyperlink, http://www.gao.gov].
If you have any questions about this report or need additional
information, please contact me at (202) 512-3841 or James Noël,
Assistant Director, at (202) 512-3591. Major contributors to this
report include Delores Parrett, Mary Quinlan, Josey Ballenger, Angela
Gjertson, and Nancy Crothers.
Signed by:
(Ms.) Gary L. Jones:
Director, Natural Resources and Environment:
Enclosure:
[End of section]
List of Requesters:
The Honorable Harry Reid:
Chairman:
Subcommittee on Energy and Water Development:
Committee on Appropriations:
United States Senate:
The Honorable Pete V. Domenici:
Ranking Member:
Subcommittee on Energy and Water Development:
Committee on Appropriations:
United States Senate:
The Honorable Sonny Callahan:
Chairman:
Subcommittee on Energy and Water Development:
Committee on Appropriations:
House of Representatives:
The Honorable Peter J. Visclosky:
Ranking Member:
Subcommittee on Energy and Water Development:
Committee on Appropriations:
House of Representatives:
[End of section]
Enclosure I: Briefing Presented on June 24, 2002:
Assessment of National Nuclear Security Administration Nuclear Weapon
Acquisition Reporting:
Prepared for the Subcommittee on Energy and Water Development, Senate
Committee on Appropriations and the Subcommittee on Energy and Water
Development, House Committee on Appropriations:
June 24, 2002:
Background:
* Description of the congressional direction to National Nuclear
Security Administration (NNSA) to begin issuing Nuclear Weapon
Acquisition Reports (NWAR) on qualifying life extension programs.
* Description of the Phase 6.X Process for weapon life extension
activities.
* Description of what NNSA has done in response to the congressional
direction.
Congressional Direction to NNSA:
* Submit selected acquisition reports on weapon system refurbishments
and life extensions.
* Identify criteria for:
– Major defense acquisition programs;
– When to start reporting for a weapon system;
– When to cease reporting for a weapon program.
* Address ’each and all“ blocks of a weapon program.
* Reports should be:
– Similar in content and format to Department of Defense‘s (DOD)
Selected Acquisition Reports (SAR);
– Submitted annually to accompany the President‘s budget.
Phase 6.X Process:
NNSA manages life extensions using a multi-part weapon acquisition
process, known as the 6.X Process.
* Phase 6.1 Concept Assessment:
– Review surveillance findings and military requirements and develop
life extension options.
* Phase 6.2 Feasibility Study and Option-Down Select:
– Analyze in depth each option from 6.1, identify major impacts on
nuclear weapons complex, start project planning, select specific
options.
* Phase 6.2A Design Definition and Cost Study:
– Further define and validate selected design options, initiate process
development, develop milestones, develop Weapon Design and Cost Report
with cost estimates.
* Phase 6.3 Development Engineering:
– Validate design options, produce test hardware, assess produciblity
of designs, and initiate process development.
* Phase 6.4 Production Engineering:
– Adapt developmental design into a producible design and prepare
production facilities, complete acquisition of capital equipment,
update production cost estimates.
* Phase 6.5 First Production:
– Produce first refurbished weapons and verify that units produced meet
design requirements.
* Phase 6.6 Full-Scale Production.
What NNSA Has Done:
* Determined criteria for reporting:
– Define major defense acquisition as costing $300 million or more;
– Begin reporting after Nuclear Weapons Council (NWC) approval to enter
Phase 6.3 (Development Engineering);
– End reporting with completion of Phase 6.6 (Full-Scale Production).
* Reported in NWARs on three of the four ongoing life extension
programs:
– W76, W80, and W87 are covered;
– B61 is not covered because it is still in Phase 6.2/6.2A.
* For weapons being refurbished in blocks (W76 and W80), reported on
only the first block.
* In April, issued first NWARs since 1991.
Objectives and Scope:
Our objectives were to:
* Assess key NNSA criteria for NWAR reporting;
* Compare NWARs with DOD‘s SARs;
* Analyze the cost data presented in the NWARs.
To achieve our objectives, we:
* Analyzed the NWARs for the W76, W80, and W87 life extension programs;
* Interviewed NNSA headquarters and field officials;
* Compared NNSA‘s NWARs with several DOD SARs, reviewed the criteria
and guidance DOD used to compile the SARs, and interviewed DOD
officials;
* Compared the NWARs with the various plans being used to manage life
extension activities, NNSA‘s FY 2003 budget submission, and NNSA‘s
Future Years Nuclear Security Program (FYNSP) Plan.
Assessment of NNSA‘s Criteria:
NNSA does not report the research and development costs from Phases
6.1, 6.2, and 6.2A.
* Significant amounts of time and money can be spent in research and
development phases (6.1, 6.2, 6.2A) of the weapon acquisition process;
* In contrast, DOD reports significant research and development costs
in special SARs;
* Reporting could begin after initial NWC approval:
– NWC approves the start of Phase 6.2, as well as start of Phase 6.3;
– NNSA chose Phase 6.3 as beginning of NWAR reporting.
* If NNSA started reporting at Phase 6.2, NWARs could report
significant research and development costs.
* NNSA was directed to report on ’each and all“ blocks of weapons to be
refurbished in blocks.
* NNSA is reporting on only the first blocks of the W76 and W80 life
extension programs (those blocks that have been approved by the NWC to
begin Phase 6.3).
* NNSA could report more cost information, such as existing cost
estimates for subsequent blocks of the W76, which are included in the
Weapon Design and Cost Report developed at the end of Phase 6.2A.
6.X Process Chart:
6.X Process Time Assessment in Months:
[See PDF for image]
This figure is a pie-chart, depicting the following data:
6.1, 6.2, 6.2A: Research and Development: 36%;
6.3: Development Engineering: 27%;
6.4: Production Engineering: 27%;
6.5: First Refurbishment: 11%.
Source: Stockpile Life Extension Interim Program Plan, February 10,
2000, p. 27-28.
Note: Percentages may not equal 100% due to rounding.
[End of figure]
Comparison of NWARs and SARs:
* Current NWARs are not comparable to DOD SARs:
– Less detailed;
– Less comprehensive;
– Omit significant phases of weapon system acquisition;
– Omit significant cost components.
* Pre-1991 NWARs were also not comparable to DOD SARs for many of the
same reasons.
SARs:
* Approved baseline with cost, schedule, and quantity control.
* Comprehensive guidance ensures consistent preparation and compliance
with acquisition management standards.
* Link to budget and Future Years Defense Plan, which ensures
consistency.
* Cover all system-related costs.
* Identify major program milestones.
* Explain cost and schedule changes.
* Can begin with the development stage.
* Report on major contracts and contractor performance against
baselines.
* Portion-marked for classification purposes, which aids review and
reporting in unclassified contexts.
NWARs:
* Varying baselines:
– Formal change control process still being developed.
* No written guidance:
– Rewriting old guidance used for pre-1991 NWARs.
* Link to budget; however, link to FYNSP cannot be established:
– No current process to cross-walk NWARs, budget, and FYNSP to ensure
consistency.
* Exclude known system-related costs, for example:
– ADAPT support for modifying Y-12 capabilities;
– Acorn Production Line expansion project at the Kansas City Plant.
* Identify major program milestones.
* No cost and schedule data in initial NWARs.
* Do not include development stages:
– Accurate data by weapon system has not been collected from the labs.
* Do not report on contractor performance against baselines.
* Entirely classified; no portion-marking, which hampers review and
reporting in unclassified contexts.
Assessment of NWAR Cost Data:
* NNSA excludes non-Directed Stockpile Work (DSW) costs, such as:
– System-specific construction;
– Campaign work directly related to a refurbishment or life extension
program;
– Readiness in Technical Base & Facilities (RTBF) work directly related
to a life extension program.
* NNSA‘s rationale is that the budget structure separates ’capacity“
from ’capability:“
– DSW represents capacity and is reported (direct costs of life
extension programs);
– Campaigns and RTBF represent capability and are excluded (research
and infrastructure that may support multiple life extension programs);
– Congress has ’agreed“ to this budget structure by using it in
appropriations.
* Pre-1991 NWARs reported more cost data than the current NWARs.
[End of enclosure]
Footnotes:
[1] The Nuclear Weapons Council oversees technical and operational
nuclear weapon issues from an interagency perspective and prepares the
annual letter to the President for signature by the Secretaries
of Defense and Energy that certifies that the stockpile is safe and
reliable without underground testing.
[2] When a weapon system is refurbished using a block approach, the
Nuclear Weapons Council has approved refurbishment for only a portion
of the total number of weapons of that type in the stockpile. That
segment is referred to as a block. The remaining weapons may be
refurbished in additional blocks at a later date.
[3] U.S. General Accounting Office, Nuclear Weapons: Improved
Management Needed to Implement the Stockpile Stewardship Program
Effectively, GAO-01-48 (Washington, D.C.: Dec. 14, 2000).
[End of section]
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