Nuclear Weapons
NNSA and DOD Need to More Effectively Manage the Stockpile Life Extension Program Gao ID: GAO-09-385 March 2, 2009As a separately organized agency within the Department of Energy, the National Nuclear Security Administration (NNSA) administers the Stockpile Life Extension Program, whose purpose is to extend, through refurbishment, the operational lives of the weapons in the nuclear stockpile. NNSA encountered significant management problems with its first refurbishment for the W87 warhead. GAO was asked to assess the extent to which NNSA and the Department of Defense (DOD) have effectively managed the refurbishment of two other weapons--the B61 bomb and the W76 warhead. This report summarizes the findings of GAO's classified report on the refurbishment of the B61 bomb and W76 warhead.
NNSA and DOD have not effectively managed cost, schedule, and technical risks for either the B61 or W76 life extension program. Regarding the B61 program, although NNSA completed the refurbishment of the strategic variants of the B61 bomb--the Mods 7 and 11--on schedule in November 2008, the refurbished weapons do not meet all refurbishment objectives. According to NNSA and DOD officials, NNSA established an unrealistic schedule and failed to fully implement its refurbishment guidance, known as the Phase 6.X process. NNSA was able to meet its refurbishment schedule and avoid significant cost overruns for the B61 program only because (1) some of the refurbishment objectives were changed, (2) NNSA was able to reuse, rather than manufacture, a critical component when B61 bombs were decommissioned, and (3) the Nuclear Weapons Council significantly reduced the number of B61 bombs in the stockpile. Despite DOD concerns about the adequacy of NNSA testing of the B61 bombs under certain conditions, NNSA continued refurbishing the weapons. Some of the B61 refurbishment problems could have been avoided if DOD had fulfilled its roles and responsibilities in overseeing NNSA's life extension program activities. For example, the Air Force did not adequately review NNSA's design, engineering, and testing activities--a review that would have alerted DOD that NNSA was missing some of its refurbishment objectives. Regarding the W76 program, NNSA did not effectively manage a high risk associated with manufacturing an essential material, known as Fogbank, needed to refurbish the W76 warhead. NNSA had developed a risk mitigation strategy to avoid potential cost overruns and schedule delays related to the manufacture of this key material but failed to effectively implement this strategy. As a result, NNSA's original plans to produce the first refurbished W76 weapon in September 2007 slipped to September 2008; NNSA spent $69 million to address Fogbank production problems; and the Navy faced logistical challenges owing to the delay. Furthermore, NNSA did not have a consistent approach to developing a cost baseline for the W76 program, which makes it difficult to track refurbishment costs over time and to know the actual cost of the program.
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-09-385, Nuclear Weapons: NNSA and DOD Need to More Effectively Manage the Stockpile Life Extension Program
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Report to the Subcommittee on Strategic Forces, Committee on Armed
Services, House of Representatives:
United States Government Accountability Office:
GAO:
March 2009:
Nuclear Weapons:
NNSA and DOD Need to More Effectively Manage the Stockpile Life
Extension Program:
GAO-09-385:
GAO Highlights:
Highlights of GAO-09-385, a report to the Subcommittee on Strategic
Forces, Committee on Armed Services, House of Representatives.
Why GAO Did This Study:
As a separately organized agency within the Department of Energy, the
National Nuclear Security Administration (NNSA) administers the
Stockpile Life Extension Program, whose purpose is to extend, through
refurbishment, the operational lives of the weapons in the nuclear
stockpile. NNSA encountered significant management problems with its
first refurbishment for the W87 warhead. GAO was asked to assess the
extent to which NNSA and the Department of Defense (DOD) have
effectively managed the refurbishment of two other weapons”the B61 bomb
and the W76 warhead.
This report summarizes the findings of GAO‘s classified report on the
refurbishment of the B61 bomb and W76 warhead (GAO-09-152C).
What GAO Found:
NNSA and DOD have not effectively managed cost, schedule, and technical
risks for either the B61 or W76 life extension program. Regarding the
B61 program, although NNSA completed the refurbishment of the strategic
variants of the B61 bomb”the Mods 7 and 11”on schedule in November
2008, the refurbished weapons do not meet all refurbishment objectives.
According to NNSA and DOD officials, NNSA established an unrealistic
schedule and failed to fully implement its refurbishment guidance,
known as the Phase 6.X process. NNSA was able to meet its refurbishment
schedule and avoid significant cost overruns for the B61 program only
because (1) some of the refurbishment objectives were changed, (2) NNSA
was able to reuse, rather than manufacture, a critical component when
B61 bombs were decommissioned, and (3) the Nuclear Weapons Council
significantly reduced the number of B61 bombs in the stockpile. Despite
DOD concerns about the adequacy of NNSA testing of the B61 bombs under
certain conditions, NNSA continued refurbishing the weapons. Some of
the B61 refurbishment problems could have been avoided if DOD had
fulfilled its roles and responsibilities in overseeing NNSA‘s life
extension program activities. For example, the Air Force did not
adequately review NNSA‘s design, engineering, and testing activities”a
review that would have alerted DOD that NNSA was missing some of its
refurbishment objectives.
Regarding the W76 program, NNSA did not effectively manage a high risk
associated with manufacturing an essential material, known as Fogbank,
needed to refurbish the W76 warhead. NNSA had developed a risk
mitigation strategy to avoid potential cost overruns and schedule
delays related to the manufacture of this key material but failed to
effectively implement this strategy. As a result, NNSA‘s original plans
to produce the first refurbished W76 weapon in September 2007 slipped
to September 2008; NNSA spent $69 million to address Fogbank production
problems; and the Navy faced logistical challenges owing to the delay.
Furthermore, NNSA did not have a consistent approach to developing a
cost baseline for the W76 program, which makes it difficult to track
refurbishment costs over time and to know the actual cost of the
program.
What GAO Recommends:
GAO recommends that NNSA and DOD take several actions to improve the
management of the life extension program, including, among other
things, (1) developing and using consistent budget assumptions and
criteria for the baseline to track costs over time, (2) comprehensively
reviewing military requirements for a weapons system before beginning a
life extension program, and (3) assessing the cost and schedule
implications for meeting each military requirement. NNSA and DOD
generally agreed with GAO‘s recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-385]. For more
information, contact Gene Aloise at (202) 512-6870 or aloisee@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
NNSA Met the B61 Program Schedule, but Did Not Meet All Refurbishment
Objectives:
NNSA Did Not Adequately Address One of the Highest Risks to the W76
Program, Which Led to Cost Increases, Schedule Delays, and an
Unrealistic Production Schedule:
Conclusions:
Recommendations:
Agency Comments and Our Evaluation:
Appendix I: Comments from the National Nuclear Security Administration:
Appendix II: Comments from the Department of Defense:
Appendix III: GAO Contact and Staff Acknowledgments:
Figures:
Figure 1: Life Extension Program Refurbishment Process for B61 Bombs
and W76 Warheads:
Figure 2: W76 Cost Baseline:
Abbreviations:
DOD: Department of Defense:
DOE: Department of Energy:
LANL: Los Alamos National Laboratory:
LLNL: Lawrence Livermore National Laboratory:
NNSA: National Nuclear Security Administration:
NWC: Nuclear Weapons Council:
NWCSSC: Nuclear Weapons Council Standing and Safety Committee:
STRATCOM: U.S. Strategic Command:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
March 2, 2009:
The Honorable Ellen Tauscher:
Chairman:
The Honorable Michael Turner:
Ranking Member:
Subcommittee on Strategic Forces:
Committee on Armed Services:
House of Representatives:
Nuclear weapons are an essential part of the nation's defense strategy.
However, the end of the Cold War caused a dramatic shift in how the
nation maintains these weapons. Instead of designing, testing, and
producing new nuclear weapons, the strategy has shifted to maintaining
the existing nuclear weapons stockpile indefinitely. To implement this
strategy, in January 1996, the Department of Energy (DOE) initiated the
Stockpile Life Extension Program (life extension program). Now
administered by the National Nuclear Security Administration (NNSA),
which is a separately organized agency within DOE, this program is
designed to extend the weapons' operational life for an additional 20
to 30 years and to certify the weapons' military performance
requirements without underground nuclear testing. As the weapons age,
however, certain nuclear weapons components must be replaced or they
will begin to undermine the reliability and performance of the weapon.
While NNSA does not have complete cost data on the life extension
program, it estimates that it spent approximately $2.1 billion on
program activities from fiscal years 2003 to 2008.
Within NNSA, the Office of Defense Programs is responsible for
administering the life extension program. For those nuclear weapons
that are refurbished, this office oversees the activities of the design
laboratories and production facilities that (1) determine which
components, such as the nuclear explosives package, will need
refurbishment to extend each weapon's life; (2) design and produce the
necessary components; (3) install the components in the weapons; and
(4) certify that the changes do not adversely affect the yield, safety,
and reliability of the weapons. Because research and development is
needed to refurbish the nuclear weapons, the life extension program
requires a coordinated effort among NNSA's three design laboratories
and four production facilities--collectively known as the nation's
nuclear weapons complex. NNSA also coordinates its life extension
activities with the Department of Defense (DOD) to ensure that
refurbished weapons meet all military performance requirements.
NNSA manages the refurbishment of nuclear warheads and bombs according
to a process called Phase 6.X, which was jointly developed with DOD in
2000. NNSA's process consists of seven steps, which involve, among
other things, establishing a cost and schedule baseline; conducting
experiments, tests, and analyses to validate design options and assess
production capabilities; preparing production facilities for
manufacturing parts and components; and entering full-scale production
of refurbished weapons. In addition, under the Phase 6.X process, DOD,
including the U.S. Strategic Command (STRATCOM), is responsible for
developing, reviewing, and updating the military requirements that
specify the performance characteristics for each warhead type and the
environments in which the warhead must perform or remain safe. As NNSA
designs the warhead or bomb and conducts tests to ensure that they meet
these requirements, DOD reviews NNSA's actions in each phase of the
refurbishment. NNSA plans to use this same management process for the
design of a new warhead, known as the reliable replacement warhead,
which NNSA states is a way to replace the nation's aging stockpile with
warheads that are safer, provide longer-term reliability, and are less
expensive to maintain than those currently in the stockpile.
In December 2000, we reported that the W87 warhead, which was designed
to be carried on the land-based Peacekeeper missile,[Footnote 1] had
experienced significant design and production problems that increased
its refurbishment costs by over $300 million and caused schedule delays
of about 2 years.[Footnote 2] As we reported, at the heart of many of
the problems that contributed to this outcome were an inadequate Office
of Defense Programs management process and unclear leadership, which
prevented the Office from adequately anticipating and mitigating the
problems that arose. In 2005, NNSA completed the refurbishment of the
W87. This was the first weapon to be refurbished under the life
extension program.
In a follow-up study in July 2003,[Footnote 3] we reported that NNSA
had not adequately addressed the budgetary, cost accounting, and other
management issues that contributed to problems with the W87 as it began
research and development activities for refurbishing the B61 bomb and
W76 warhead. As of December 15, 2008, two nuclear weapons were being
refurbished--the B61 bomb and the W76 warhead. The B61 bomb is designed
to be carried on the B-52 or B-2 bomber by the Air Force. There are two
different types of strategic B61 bombs--the Mod 7 and the Mod 11. The
Mod 11 is used exclusively as an earth penetrator in free-fall mode to
destroy deeply buried targets. NNSA began refurbishment production in
June 2006 for the Mod 7 and January 2007 for the Mod 11 and completed
production for both weapons in November 2008. In addition to the
strategic variants of the B61, the Air Force maintains tactical B61
bombs--the Mods 3, 4, and 10. Unless otherwise specified, all
subsequent references to the B61 bomb in this report refer to the
strategic variants--the Mods 7 and 11. The W76 is a submarine-launched
warhead and the refurbished W76 will be carried on the Trident II
missile by the Navy. The first refurbished W76 warhead was completed in
September 2008. The W76 warhead is a significant part of the U.S.
nuclear weapons stockpile.
NNSA has continued to face management challenges during the
refurbishment of the B61 bomb and W76 warhead. Specifically, while the
refurbished B61 entered full-scale production in 2006, NNSA still had
not met all its refurbishment objectives. In addition, the W76 warhead
faced a schedule delay and cost overruns related to manufacturing
problems with a critical material used in the W76.
In this context, you asked us to determine the extent to which NNSA and
DOD have effectively managed the B61 and W76 life extension programs.
While NNSA has faced numerous technical challenges in refurbishing the
B61 bomb and W76 warhead, this report focuses on two of the most
significant technical challenges that have had an impact on cost,
schedule, and meeting refurbishment objectives--the decision to reuse
or manufacture a new material for a critical component in the B61 bomb
and the manufacture of Fogbank for the W76. In January 2009, we
reported to you on the results of our work in a classified report.
[Footnote 4] Subsequently, we worked with NNSA and DOD to produce an
unclassified version of our report. This report summarizes the results
of our classified report.
To assess the extent to which NNSA and DOD have effectively managed the
B61 and W76 life extension programs, we first analyzed NNSA's
congressional budget requests, project plans, and acquisition reports
to determine whether the life extension activities for the B61 bomb and
W76 warhead were within budget or facing cost overruns. We then
reviewed NNSA's project plans for the B61 bomb and W76 warhead, life
extension guidance documents, risk management practices, briefing
slides, and strategic weapons directives to determine whether NNSA
reached critical milestones on time. To assess the technical challenges
NNSA was facing in refurbishing the B61 bomb and W76 warhead and the
steps it was taking to minimize technical risk, we interviewed
officials from the Office of Defense Programs at DOE in Washington,
D.C.; the nuclear weapons design laboratories, including Lawrence
Livermore (LLNL) in California and Los Alamos (LANL) and Sandia in New
Mexico; and the weapons production plants, including Y-12 in Tennessee,
Pantex in Texas, and Kansas City in Missouri. We also interviewed
officials from the Departments of the Air Force and the Navy, STRATCOM,
and the Nuclear Weapons Council to determine NNSA's ability to meet
military performance requirements for the B61 bomb and W76 warhead and
the impact of any schedule delays on DOD's mission requirements.
Finally, we toured the Y-12, Pantex, and Kansas City plants to observe
the manufacturing processes for nuclear and non-nuclear components for
the B61 bomb and W76 warhead. To assess the extent to which DOD
fulfilled its roles and responsibilities in overseeing NNSA's life
extension activities, we reviewed guidance documents and project plans
to determine DOD's roles and responsibilities. We also interviewed
officials from NNSA, the Departments of the Air Force and the Navy,
STRATCOM, and the Nuclear Weapons Council to determine how effective
communication has been between DOD and NNSA and who has authority to
make decisions, such as proceeding with full-scale production.
We conducted the work for the classified report between December 2007
and January 2009 in accordance with generally accepted government
auditing standards, and we conducted our work for the unclassified
report between January 2009 and February 2009. Those standards require
that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions
based on our audit objectives. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on
our audit objectives.
Results in Brief:
NNSA and DOD have not effectively managed cost, schedule, and technical
risks for either the B61 or W76 life extension program. Regarding the
B61 program, although NNSA completed the refurbishment of the B61 bombs
on schedule in November 2008, the refurbished weapons do not meet all
refurbishment objectives. According to DOD and NNSA laboratory and
production plant officials, NNSA established an unrealistic schedule
and failed to fully implement its Phase 6.X process. To meet an
aggressive production schedule, NNSA adopted a modified Phase 6.X
process that compressed and overlapped the development and production
engineering phases, leaving little time to develop and manufacture
critical materials and evaluate test results before full-scale
production. In addition, NNSA did not include any cost or schedule
contingencies in its baseline to address unforeseen technical
challenges. NNSA assumed that it would not need time for development
and production engineering because it would reuse, rather than
manufacture, critical materials. Before fully determining whether a
critical material could be reused for the B61 bomb, NNSA developed a
production schedule with fixed delivery dates. However, after
additional tests showed that NNSA could not reuse this material, NNSA
decided to develop an alternative material, which led to an $11 million
cost overrun. When NNSA was unable to produce this substitute, it faced
significant schedule delays and additional cost overruns.
NNSA was able to meet its refurbishment schedule and avoid significant
cost overruns for the B61 bomb only because (1) some of the
refurbishment objectives changed, thereby allowing NNSA to use the
original material in the weapon design, (2) tactical B61 bombs that
were decommissioned had material that NNSA could use, and (3) the
Nuclear Weapons Council significantly reduced the number of B61 bombs
in the stockpile and thus the number that NNSA had to refurbish. Even
though these events allowed NNSA to meet its schedule, it refurbished
less than one-third of the weapons in the original baseline for almost
twice the unit cost. The cost of manufacturing each B61 bomb almost
doubled. Furthermore, the refurbished B61 bombs still do not meet all
of the refurbishment objectives.
Many of the B61 refurbishment problems might have been avoided if DOD
had fulfilled its roles and responsibilities in overseeing NNSA's life
extension program activities. First, STRATCOM did not comprehensively
review military requirements for the B61 bomb before NNSA started
refurbishment activities, which might have avoided unnecessary testing
and manufacturing of the alternative material. Second, the Air Force
did not adequately review NNSA's design, engineering, and testing
activities--a review that would have alerted DOD that NNSA was not
meeting all refurbishment objectives. According to Air Force officials,
the Lead Project Officer failed to provide the necessary oversight and
alert the Air Force to changes in testing that NNSA conducted of
refurbished B61 bombs.
Regarding the W76 warhead, NNSA did not effectively manage one of the
highest risks of the program--the manufacture of a key material known
as Fogbank--resulting in $69 million in cost overruns and a schedule
delay of at least 1 year that presented significant logistical
challenges for the Navy. Recognizing that the manufacture of Fogbank
was one of the highest risks to the program and that it lacked the
knowledge, expertise, and facilities to manufacture Fogbank, NNSA
developed a risk mitigation strategy. This strategy included three
primary components: (1) build a new Fogbank production facility early
enough to allow time to resolve any manufacturing problems before
starting full production; (2) use the existing pilot plant to test the
Fogbank manufacturing process while the new facility was under
construction; and (3) consider the development of an alternate material
for Fogbank. However, NNSA started operations of the new facility about
1 year late because the schedule for constructing the new facility was
unrealistic, disagreements on the implementation of safety guidelines
emerged, and the W76 program manager lacked authority to manage the
construction schedule. In addition, NNSA did not use the pilot plant as
planned, missing opportunities to improve the manufacturing process
before full-scale production began. Finally, NNSA did not develop an
alternate material that was less costly and easier to produce than
Fogbank until a late stage. If NNSA had effectively implemented its
risk management strategy, schedule delays and cost increases might have
been avoided. Compounding these problems, NNSA did not have a
consistent approach for developing a cost baseline for the W76 life
extension program. The lack of a consistent baseline approach with
similar cost assumptions and criteria makes it difficult to know the
actual cost of refurbishing nuclear bombs and warheads and to track the
costs of the program over time.
To improve the management of the stockpile life extension program, in
our classified January 2009 report, we recommended, among other things,
that the Administrator of NNSA direct the Deputy Administrator for
Defense Programs to develop a realistic schedule for the W76 and future
life extension programs. This schedule should allow NNSA to (1) address
technical challenges while meeting all military requirements; (2) build
in time for unexpected technical challenges that may delay the program;
(3) assess the cost and include funding in the baseline for risk
mitigation activities that address the highest risks to the W76 and
future life extension programs; and (4) before beginning a life
extension program, assess the risks, costs, and scheduling needs for
each military requirement established by DOD.
To improve DOD's oversight over NNSA's life extension activities and
ensure that refurbished weapons meet all military requirements, we
recommended that the Secretary of Defense direct (1) STRATCOM and the
Secretary of the responsible service to comprehensively review military
requirements for a weapons system before beginning a life extension
program and work with NNSA to assess the cost and schedule implications
for meeting each military requirement, and (2) the Secretaries of the
Air Force and the Navy to ensure that the respective Lead Project
Officers have the technical and managerial expertise and resources to
review NNSA's progress and technical challenges throughout the life
extension program.
We provided a draft of our classified report to NNSA and DOD for their
review and comment. As discussed in our classified report, NNSA agreed
with our recommendations and plans to take a number of steps to
implement them. DOD partially agreed with our recommendations. DOD
agreed with our two recommendations directed at the department, but
asked us to make modifications to the language of the recommendations
to better target the responsible service or agency that has authority
to implement them. We made the requested changes. NNSA and DOD also
provided technical comments, which we incorporated as appropriate.
Background:
The nation's nuclear weapons stockpile remains a cornerstone of U.S.
national security policy. As a result of changes in arms control, arms
reduction, and nonproliferation policies, the National Defense
Authorization Act for fiscal year 1994 required that DOE develop a
science-based Stockpile Stewardship Program to maintain the stockpile
without nuclear testing.[Footnote 5] After this program was
established, DOE, in January 1996, initiated the Stockpile Life
Extension Program. The purpose of this program is to develop a standard
approach for planning nuclear weapons refurbishment activities so that
the nuclear weapons complex can extend the operational lives of the
weapons in the stockpile by another 20 to 30 years.
Within NNSA, the Office of Defense Programs is responsible for the
warheads and bombs in the stockpile. This responsibility encompasses
many different tasks, including the manufacture, maintenance,
refurbishment, surveillance, and dismantlement of weapons in the
stockpile; activities associated with the research, design,
development, simulation, modeling, and nonnuclear testing of nuclear
weapons; and the planning, assessment, and certification of the
weapons' safety and reliability. A national complex of nuclear weapons
design laboratories and production facilities carries out the Office of
Defense Programs' mission. Three national laboratories in this complex
design nuclear weapons: Lawrence Livermore National Laboratory in
California, Los Alamos National Laboratory in New Mexico, and Sandia
National Laboratories in New Mexico and California.
For the B61 and W76 life extension programs, Los Alamos National
Laboratory is responsible for designing and developing these weapons'
nuclear explosives package. Sandia National Laboratories design non-
nuclear components, such as arming, fuzing, and firing systems, foams,
and electrical cables, and test the weapons' non-nuclear components to
certify safety and reliability. Lawrence Livermore National Laboratory
peer reviews design and production activities. Los Alamos and Sandia
National Laboratories work closely with the production plants to ensure
that components meet design specifications. The complex's four
production sites include the Y-12 National Security Complex plant in
Tennessee, the Kansas City Plant in Missouri, the Savannah River Site
plant in South Carolina, and the Pantex Plant in Texas. The Y-12 plant
manufactures critical nuclear components, such as parts made from
enriched uranium, for the nuclear explosives package. The Kansas City
plant produces and procures nonnuclear parts and electronic components
and manufactures the new arming, fuzing, and firing system for the W76
warhead. The Savannah River Site plant fills gas bottles it receives
from Kansas City with tritium and deuterium, which are used to
facilitate the nuclear explosion. Last, the Pantex plant assembles all
components supplied by other production plants to produce a weapon for
the stockpile. See figure 1 for a summary of this process.
Figure 1: Life Extension Program Refurbishment Process for B61 Bombs
and W76 Warheads:
[Refer to PDF for image: illustration]
Design laboratories:
Lawrence Livermore National Laboratory:
Independent peer reviews of Los Alamos‘ weapons design and its ability
to meet military requirements.
Los Alamos National Laboratory:
Designs nuclear components for the B61 and W76.
Sandia National Laboratories:
Designs non-nuclear components for the B61 and W76.
Production plants:
Y-12 Plant:
Manufactures nuclear components and materials essential for the
functioning of the weapon.
Kansas City Plant:
Manufactures non-nuclear components, such as foams, pads, electrical
wires, and gas canisters.
Savannah River Plant:
Fills canisters with a gas that aids in the nuclear explosion.
Pantex Plant:
Assembles all parts to build a refurbished weapon.
Nuclear weapons stockpile:
Air Force:
Receives refurbished B61 bombs ready for deployment.
Navy:
Receives refurbished W76 warheads ready for deployment.
Source: GAO and Clip Art.
[End of figure]
An end to underground nuclear testing in 1992 in the United States
suspended the development of weapons with new, untested designs. This
suspension created a shift away from the strategy of replacing older
warheads with newer designs to a new strategy of retaining and
refurbishing previously produced warheads indefinitely, without nuclear
testing, and with no plans to replace the weapons. To manage this new
strategy of refurbishing nuclear weapons, NNSA uses a process called
Phase 6.X, which it jointly developed with DOD. This process consists
of the following elements:
* Phase 6.1, concept assessment--conducting studies to provide planning
guidance and to develop information so that a decision can be made on
whether or not to proceed to phase 6.2.
* Phase 6.2, feasibility study--developing design options and studying
their feasibility.
* Phase 6.2A, design definition and cost study--completing definition
of selected design option(s) from phase 6.2 and determining the cost of
pursuing the design option(s).
* Phase 6.3, development engineering--conducting experiments, tests,
and analyses to validate the design option and assess its potential for
production.
* Phase 6.4, production engineering--making a strong commitment of
resources to the production facilities to prepare for stockpile
production.
* Phase 6.5, first production--producing a limited number of
refurbished weapons and then disassembling and examining some of them
for final qualification of the production process.
* Phase 6.6, full-scale production--ramping up to full production rates
at required levels.
DOD oversees NNSA's refurbishment activities through the military
services' Lead Project Officer and the Nuclear Weapons Council's
Standing and Safety Committee. The Air Force or the Navy appoint a Lead
Project Officer to provide day-to-day oversight over NNSA's activities.
The Lead Project Officer meets regularly with officials from NNSA, the
national laboratories, and production facilities to monitor progress
and understand the technical challenges. The Nuclear Weapons Council
Standing and Safety Committee (NWCSSC) advises and assists the Nuclear
Weapons Council, which provides policy guidance and oversight of
nuclear weapons stockpile activities and is required to report
regularly to the President on the safety and reliability of the U.S.
stockpile. Representatives from the following organizations make up the
NWCSSC: NNSA; the Office of the Under Secretary of Defense for Policy;
the Office of the Assistant Secretary of Defense for Networks and
Information Integration; the Assistant to the Secretary of Defense for
Nuclear, Chemical and Biological Programs; the Joint Staff; STRATCOM;
the Army; the Navy; the Air Force; and the Defense Threat Reduction
Agency. According to DOD officials, the Lead Project Officer regularly
updates the NWCSSC on the status of refurbishment activities and
proposes recommendations to the NWCSSC on whether NNSA should proceed
to the next phase. NNSA needs approval from the NWC to proceed to
Phases 6.2, 6.3, and 6.6.
As of December 15, 2008, two nuclear weapons were undergoing phase 6.X
refurbishment activities. The W76 warhead was in phase 6.5, first
production unit, and the B61 bomb was in phase 6.6, full-scale
production.[Footnote 6] NNSA originally planned to refurbish the W80
warhead and began phase 6.3, development engineering, but in 2007, NNSA
canceled refurbishment activities for the W80 warhead because DOD
planned to reduce the number of W80 warheads in the nuclear stockpile.
While complete cost data on the W80 warhead do not exist, NNSA spent
about $480 million from fiscal years 2003 to 2007 on refurbishment
activities for it.
NNSA Met the B61 Program Schedule, but Did Not Meet All Refurbishment
Objectives:
NNSA completed the refurbishment of the B61 bomb on schedule in
November 2008. However, according to NNSA and DOD officials, NNSA was
not able to meet all the refurbishment objectives because it
established an unrealistic schedule and failed to fully implement its
Phase 6.X process. NNSA was able to meet its refurbishment schedule and
avoid significant cost overruns for the B61 only because (1) DOD
changed some of the refurbishment objectives, (2) NNSA was able to
reuse, rather than manufacture, a critical component for the B61, and
(3) the Nuclear Weapons Council significantly reduced the number of B61
bombs in the stockpile. However, the refurbished B61 bombs still do not
meet all refurbishment objectives. Some of the B61 refurbishment
problems could have been avoided if DOD had fulfilled its roles and
responsibilities in overseeing NNSA's life extension program
activities.
NNSA's Aggressive Schedule Did Not Leave Time to Address Significant
Technical Challenges and Increased Costs:
Since parts of the B61 bomb were beginning to age, NNSA proposed, in
1999, to refurbish the first B61 by September 2004, with full-scale
production ending in 2008. However, an NNSA study completed in 2001 by
the national laboratories and production facilities found that they
could not meet the September 2004 date given the requirements,
production capabilities, risk assessments, and Phase 6.X guidelines.
Instead, the national laboratories and production facilities concluded
that they would need until September 2008--4 years later than the
September 2004 date proposed by NNSA--to refurbish the first weapon.
This proposed schedule was considered low risk because it allowed NNSA
to follow the steps in the Phase 6.X process and included contingencies
to address technical challenges. NNSA did not approve this schedule,
however. It was concerned that the proposed production schedule for the
B61 bomb would conflict with the refurbishment of the W76 warhead,
which was originally scheduled for September 2007 and considered a DOD
priority. NNSA wanted to complete production of the refurbished B61
bomb before beginning full-scale production of the W76 warhead because
the production facilities, such as the Y-12 plant, had limited
capacity. To allow the national laboratories and production facilities
more time for design, engineering, and production activities while
avoiding conflicts with the W76 life extension program, NNSA set a June
2006 date for the first refurbished B61 bomb.
To meet this more aggressive and, as stated in NNSA's program plan,
"success-oriented" schedule, NNSA adopted a modified Phase 6.X process
that compressed and overlapped the development engineering and
production engineering phases, leaving little time to conduct the
experiments, tests, and analyses needed to validate design options and
to certify that production facilities that manufacture and assemble
parts could meet design requirements. NNSA assumed that it would not
need time for development and production engineering because it would
reuse rather than manufacture critical materials--one of the most
critical of which was a plastic. Before fully determining whether the
plastic could be reused, NNSA developed a production schedule with
fixed delivery dates. However, additional tests showed that NNSA could
not reuse this material because it did not function properly under
certain conditions. NNSA therefore decided to develop an alternative
material with superior properties that would work under all conditions.
Since NNSA did not include any cost or schedule contingencies in its
baseline to address unforeseen technical challenges, development work
on an alternative material posed a significant risk to meeting the
program's milestones and added $11 million to the program's cost. NNSA
was unable to produce a substitute that could retain the shape needed
for the B61 bomb and would perform under all delivery conditions.
NNSA's effort to manufacture this alternative material resulted in
significant schedule delays and cost overruns.
In addition to a lack of sufficient time for development and production
engineering work, NNSA's B61 life extension program schedule did not
include contingencies for testing failures. NNSA assumed that modeling
and computational analysis would be sufficient to properly design a
component and a physical test of the design would be successful,
avoiding the need for follow-up tests. If a test revealed a problem
with the design, NNSA would have had to conduct additional tests or
change the design, which would have potentially increased cost and
delayed the program.
As it turned out, NNSA's tests were not all successful, and the Air
Force and Lawrence Livermore National Laboratory peer reviewers
recommended delaying production and conducting additional tests to test
the refurbished weapon. Nevertheless, NNSA proceeded with full-scale
production to meet its schedule milestones. The Air Force's most
significant concern was that the testing of refurbished B61 bombs
deviated substantially from the original testing plan that NNSA
designed and DOD approved. NNSA subsequently conducted follow-on tests
to address Air Force concerns.
A Reduction in the Stockpile Allowed NNSA to Meet Its B61 Refurbishment
Schedule, but It Did Not Achieve All Refurbishment Objectives:
NNSA was able to meet its refurbishment schedule for the B61 only
because the following occurred:
* NNSA sought and received a change in refurbishment objectives. In
response to NNSA's request, STRATCOM, which is responsible for
developing and reviewing military mission requirements, reviewed the
military needs for the B61. After STRATCOM reviewed its needs, NNSA was
then able to abandon its attempt to develop an alternative material,
which it could not successfully manufacture to meet requirements, and
was able to reuse the original material in the B61 bomb.
* Dismantlement of decommissioned B61 bombs allowed NNSA to obtain the
necessary material for the refurbished B61 bombs. Even though NNSA
abandoned its attempt to develop an alternative material after
refurbishment objectives changed, it still did not have the material it
needed because NNSA no longer manufactured it. However, NNSA found
material it could use in refurbished B61 bombs when it began
dismantling tactical B61 bombs.[Footnote 7] As a result, NNSA was able
to extract the material, which is used in both strategic and tactical
B61 bombs.
* The Nuclear Weapons Council significantly reduced the number of B61s
in the stockpile. Between 2003 and 2007, the Nuclear Weapons Council,
which reviews the size of the nation's stockpile, directed NNSA to
reduce the total stockpile of nuclear weapons. Following the council's
stockpile plan, NNSA reduced the number of B61s that needed
refurbishment by about two-thirds. According to officials from
production facilities, NNSA would not have been able to meet its
November 2008 completion date if it still had to refurbish the
originally planned number of weapons. Moreover, NNSA would not have
been able to meet its cost baseline because the cost of manufacturing
each B61 had almost doubled.
Even though these events allowed NNSA to meet its schedule, the
refurbished B61 bombs do not meet all refurbishment objectives. To
address DOD concerns, in December 2007, NNSA agreed to conduct
additional tests. According to DOD officials, the additional tests NNSA
planned should resolve these concerns if successful in meeting the test
objectives.
DOD Failed to Adequately Oversee Critical NNSA Life Extension
Activities for the B61:
Some of the B61 refurbishment problems could have been avoided if DOD
had fulfilled its roles and responsibilities in overseeing NNSA's life
extension program activities. First, DOD did not comprehensively review
military requirements for the B61 bomb before starting refurbishment
activities, which would have avoided unnecessary testing and
manufacturing of the alternative material. Specifically, NNSA tested
the B61 in conditions that it later learned were no longer used by DOD.
In conducting its tests, NNSA was following DOD's specifications to
meet all of the weapon's original requirements established in the
1960s. According to the Phase 6.X process, a critical military
requirement, which NNSA relied on for its tests, should have been
reviewed during the Phase 6.2/2A study during 2001 and 2002. Instead, 2
years elapsed before STRATCOM notified NNSA that the requirement was no
longer necessary, and it took another 2 years--until March 2006--to
finally change the requirement. As a result, NNSA dedicated time and
resources to develop an alternative material and conducted tests
following the requirement, which STRATCOM later criticized as being
operationally unrealistic testing.
Second, the Air Force did not adequately review NNSA's design,
engineering, and testing activities--a review that would have alerted
it to the fact that NNSA was unable to meet all refurbishment
objectives. According to Air Force officials, the Lead Project Officer
failed to provide the necessary oversight because he lacked the
technical and managerial expertise to do so. He did not alert the Air
Force to significant concerns with the testing of the refurbished B61.
In particular, the Air Force did not raise concerns about NNSA's
failure to complete all agreed-upon tests until NNSA had completed a
majority of its tests and was preparing for full-scale production.
After NNSA entered production, the Air Force required NNSA to conduct
additional tests to provide a greater level of assurance that the
refurbished B61 would perform as intended and last in the stockpile for
at least another 20 years. As we noted, NNSA agreed to conduct
additional tests and plans to complete them by the end of 2009.
Importantly, these tests will be completed after all the B61 bombs now
being refurbished are back in the stockpile.
NNSA Did Not Adequately Address One of the Highest Risks to the W76
Program, Which Led to Cost Increases, Schedule Delays, and an
Unrealistic Production Schedule:
NNSA developed a risk mitigation strategy to avoid potential cost
overruns and schedule delays related to the manufacture of Fogbank but
failed to effectively implement it. As a result, NNSA's original plans
to produce the first refurbished W76 weapon in September 2007 slipped
to September 2008. In addition, NNSA spent $69 million to address
Fogbank production problems, and the Navy faced logistical challenges
in replacing old W76 warheads with refurbished ones on submarines owing
to the delay. Furthermore, NNSA did not use the same criteria and
accounting practices each fiscal year to develop a cost baseline for
the W76 program, which makes it difficult to track refurbishment costs
over time.
NNSA Failed to Address One of Its Highest Risks to the Program:
At the beginning of the W76 life extension program in 2000, NNSA
identified key technical challenges that would potentially cause
schedule delays or cost overruns. One of the highest risks was
manufacturing Fogbank because it is difficult to manufacture. In
addition, NNSA had lost knowledge of how to manufacture the material
because it had kept few records of the process when the material was
made in the 1980s and almost all staff with expertise on production had
retired or left the agency. Finally, NNSA had to build a new facility
at the Y-12 plant because the facilities that produced Fogbank ceased
operation in the 1990s and had since been dismantled, except for a
pilot plant used to produce small quantities of Fogbank for test
purposes.
To address these concerns, NNSA developed a risk management strategy
for Fogbank with three key components: (1) building a new Fogbank
production facility early enough to allow time to re-learn the
manufacturing process and resolve any problems before starting full
production; (2) using the existing pilot plant to test the Fogbank
manufacturing process while the new facility was under construction;
and (3) developing an alternate material that was easier to produce
than Fogbank. However, NNSA failed to effectively implement these three
key components. As a result, it had little time to address unexpected
technical challenges and no guaranteed source of funding to support
risk mitigation activities.
NNSA Started the New Facility Late:
After determining that 2 years was sufficient time to test and perfect
the Fogbank manufacturing process, NNSA set March 2005 as the target
date to begin operations of the new facility at the Y-12 plant and
worked backward from that date to establish a design, build, and test
schedule for the new facility, according to the official in charge of
the project. Working from lessons learned from the W87 life extension
program, NNSA strove to achieve an early operations start date to allow
sufficient time to address any potential problems in manufacturing
Fogbank. In 2000, we reported that production problems resulting from
such factors as restarting an atrophied production complex and
addressing safety and technician training issues led directly to
slippage in the W87 life extension program schedule and contributed to
increased costs.[Footnote 8] In addition, NNSA's own lessons learned
report on the W87 program identified the need to demonstrate processes
early and often and stated that, with limited resources, assumptions
such as "we did it before so we can do it again" are often wrong.
NNSA started the new facility's operations about 1 year late because
the schedule for building the facility was unrealistic, disagreements
on the implementation of safety guidelines emerged, and the W76 program
manager lacked authority to control the schedule. Focused on meeting an
operations start date of March 2005, NNSA developed an aggressive
construction and operation start schedule with no contingency for cost
overruns or schedule delays. This schedule increased risk to meeting
the program schedule because any delay would leave less than 2 years to
conduct test production runs, which NNSA determined were necessary for
perfecting the process. In addition, the Fogank facility was the first
new manufacturing facility to be built at Y-12 in 30 years; therefore,
a lack of recent experience with construction project management and
implementing safety guidelines heightened the potential for problems.
In fact, the contractor building the facility underestimated the time
needed to complete preparations for start-up, including training and
certifying staff to use the equipment and calibrating instruments.
In addition, NNSA and the contractor disagreed on the interpretation
and implementation of safety guidelines. A lack of clarity about which
guidelines would apply and the proper interpretation of the guidelines
caused confusion over the course of the project. At a late stage, NNSA
directed the contractor to apply more conservative nuclear facility
safety requirements. As a result, the contractor needed additional time
to address safety concerns by, for example, installing weather-and
earthquake-proof equipment.
When these issues emerged, the W76 NNSA program manager did not have
the authority to manage the construction of the project or resolve the
dispute over safety guidelines even though a key risk mitigation
strategy was the timely start of facility operations. Construction and
start-up of the facility was managed by Y-12, which reported to the Y-
12 Site Office, a separate organization not under the authority of the
program manager. As soon as the March 2005 new facility start date was
missed, the program manager raised concerns and elevated them to the
Deputy Administrator for Defense Programs, the cognizant management
organization at NNSA headquarters, but the issues remained unresolved.
Ultimately, start-up of the new facility was postponed by approximately
1 year, leaving NNSA with half the time originally planned to re-learn
the Fogbank production process.
NNSA Did Not Make Full Use of the Pilot Plant:
NNSA planned to use the Y-12 pilot plant to gain a better understanding
of Fogbank properties and to test the production process on a small
scale while the new facility was under construction. The pilot facility
could only produce a small amount of Fogbank for the W76 program
because it had only a few machines. Although NNSA used the pilot plant
from 2000 to 2003, it did not have funds to continue the effort because
it shifted money from the W76 program to support higher priority
programs at the time, such as the W87 and B61 life extension programs.
However, in 2004, anticipating delays in starting operations at the new
facility and recognizing the importance of continuing work at the pilot
plant, NNSA provided funding to pay for additional work at the pilot
plant. By completing this work, NNSA learned that certain techniques
significantly affected the quality of the end product and made
adjustments to meet requirements. However, NNSA did not conduct as much
work as originally planned and missed opportunities to learn more about
the manufacturing process before starting operations.
NNSA Delayed the Development of an Alternate Material until Fogbank
Manufacturing Problems Arose:
In 2000, NNSA considered replacing Fogbank with an alternate material
that was less costly and easier to produce but abandoned the idea
because NNSA was confident that it could produce Fogbank since it had
done so before. In addition, LANL's computer models and simulations
were not sophisticated enough to provide conclusive evidence that the
alternate material would function exactly the same as Fogbank. Still
further, the Navy, the ultimate customer, had expressed a strong
preference for Fogbank because of its proven nuclear test record. In
response to the Navy's preference and the lack of sufficient test data
on the alternate material, NNSA did not pursue the development of an
alternate material until 2007.
In March 2007, however, NNSA again considered producing an alternative
material when it was unable to produce usable Fogbank and was facing
the prospect of significant schedule delays. Computer models and
simulations had improved since 2001, enabling greater confidence in the
analysis of alternate materials. Thus, NNSA began a $23 million
initiative to develop an alternate material. LANL officials told us
that NNSA plans to certify the use of the alternative material by the
end of 2009 for the W76 warhead and if NNSA faced additional Fogbank
manufacturing problems during full-scale production, the alternate
material could then be used instead of Fogbank. Had NNSA continued
research and development of an alternate material during the program,
it would have had more information on the viability of using the
alternate material in the weapon before March 2007. This additional
information also might have provided the Navy greater assurance that an
alternate material performed as well as Fogbank.
Ineffective Risk Management Led to Schedule Delays and Cost Increases:
A failure to implement the three components of NNSA's risk management
strategy for Fogbank led to a 1-year schedule delay and a $69 million
cost overrun. This cost overrun included $22 million to resolve Fogbank
production problems, $23 million to develop the alternate material, and
$24 million to maintain Pantex's production capabilities. Regarding
Fogbank production problems, in March 2007, NNSA discovered that final
batches of the material had problems. To address the problems and try
to meet its September 2007 date for producing the first refurbished
weapon, NNSA launched a major effort--"Code Blue"--that made the
manufacture of Fogbank a priority for the design laboratories and
production facilities. However, this effort failed, and, as a result,
NNSA delayed producing the first refurbished weapon from September 2007
to September 2008, and it began its efforts to develop an alternate
material to Fogbank. Finally, while Pantex was unable to begin
assembling refurbished units in September 2007 as planned, it still
spent $24 million in fiscal year 2008 to remain in "stand-by" mode,
which includes maintaining the skills of the technicians who will
assemble refurbished W76 weapons.
The 1-year delay led to logistical challenges for the Navy and an
aggressive production schedule of refurbished W76 warheads to make up
time. The Navy originally planned to start replacing old W76 warheads
with refurbished ones on submarines in April 2008. However, owing to
W76 production delays, the Navy had to replace aging parts of W76
warheads in its current arsenal and has had to delay replacing old
warheads with newly refurbished weapons until April 2009. Furthermore,
to make up for initial schedule setbacks caused by Fogbank production
problems, NNSA has increased the rate at which it plans to produce
refurbished W76 weapons. NNSA will produce more weapons per year than
originally planned, an annual increment that over time will enable it
to still finish production at the originally planned end date. However,
a higher rate of production requires more resources and leaves less
room for error because any slowdown will have a greater impact on the
larger number needed to be produced. NNSA production officials have
indicated that they may not be able to meet this more compressed
schedule if they do not receive extra resources or if they encounter
any production problems, both considered realistic possibilities.
NNSA Lacks a Consistent Approach to Developing the W76 Cost Baseline:
NNSA does not have a consistent approach for developing a cost baseline
for the W76 program. NNSA has changed its baseline almost every year
since 2001 to reflect changes in the number of warheads needed in the
stockpile and changes in NNSA reporting guidelines. For example, in
fiscal year 2004, the cost estimate for the W76 program was $2.1
billion;[Footnote 9] in fiscal year 2005, it was $6.2 billion; and in
fiscal year 2006, it was $2.7 billion (see figure 2).
Figure 2: W76 Cost Baseline:
[Refer to PDF for image: vertical bar graph]
Fiscal year: 2003;
Dollars in millions for W76 baseline: $2094.
Fiscal year: 2004;
Dollars in millions for W76 baseline: $2089.
Fiscal year: 2005;
Dollars in millions for W76 baseline: $6151.
Fiscal year: 2006;
Dollars in millions for W76 baseline: $2671.
Fiscal year: 2007;
Dollars in millions for W76 baseline: $2646.
Fiscal year: 2008;
Dollars in millions for W76 baseline: $2927.
Fiscal year: 2009;
Dollars in millions for W76 baseline: $3137.
Source: GAO analysis of NNSA data.
[End of figure]
Changes in the baseline were the result of changes in the percent of
the stockpile to be refurbished, which ranged from 25 percent to 86
percent. As the number of weapons to be refurbished changed, the
baseline moved correspondingly because it costs more to refurbish more
weapons. For example, NNSA planned to refurbish significantly more
weapons in 2005 than 2004, based on official guidance, accounting for
part of the $4.1 billion differential between those years.
Significant changes in the baseline were also driven by inconsistent
NNSA accounting practices. For example, in fiscal year 2005, NNSA
required program managers to include all indirect costs, such as the
overhead costs of operating facilities, as well as direct costs in the
baseline. The next year it dropped this requirement. Prior to fiscal
year 2005, NNSA did not tie overhead costs to specific weapon systems.
However, in an attempt to provide a more accurate estimate of total
costs by weapon, NNSA created accounts for the W76 warhead that
captured a pro-rated portion of general costs, such as research and
production support at the laboratories and production facilities. For
example, NNSA included the pro-rated cost of forklift operators, who
load and unload trucks for all weapon systems. Thus, a portion of these
overhead costs was added to the 2005 baseline to better account for the
full the costs of the program. However, NNSA discovered that this
approach constrained flexibility. If priorities shifted and changes
needed to be made to overhead activities, resources could not be easily
redirected to different weapon systems. Any change would require
congressional approval because such overhead costs were tied to a
specific weapon system as a budget line item. Consequently, in fiscal
year 2006, NNSA reported the production and research support accounts
separately. While this change restored some flexibility for overall
NNSA complex management, the transition reduced clarity about the total
cost of a weapon system. Accounting changes have persisted, with, for
example, some baseline years including large expense items, such as
employee benefits, and other baseline years excluding such costs. A
lack of a consistent baseline approach with similar cost assumptions
and criteria makes it difficult to track the costs of the program over
time and determine how well NNSA develops cost estimates.
Conclusions:
Refurbishing the nuclear weapons stockpile is a difficult task. NNSA
must draw on the scientific expertise of the nuclear weapons
laboratories and the manufacturing and engineering expertise of the
nuclear weapons production facilities. Recognizing this challenge, NNSA
and DOD have developed multiple tools for managing the refurbishment
effort: Phase 6.X, risk management strategies, test and evaluation
plans, and a lessons learned document from the W87 life extension
program.
By selectively using these guidance documents, however, NNSA has
incurred significant cost increases and schedule delays that it could
have avoided. In addition, NNSA did not include any cost or schedule
contingencies in its baseline to address the unforeseen technical
challenges that arose. If NNSA had more carefully followed the Phase
6.X process, it might have had sufficient time in its schedule to
develop and test key materials that it had not manufactured in decades
and address unforeseen technical issues.
Moreover, NNSA did not fully implement its risk management strategy to
address one of the highest risks to the W76 life extension program--the
manufacturing of Fogbank. If NNSA had effectively implemented its risk
management strategies, schedule delays and cost increases might have
been avoided or mitigated. Most importantly, if NNSA had started
operations of the new facility on schedule, it would have had more time
to address manufacturing challenges. In fact, the 1-year delay in the
startup of the new Fogbank facility corresponded almost exactly to the
1-year program delay. In addition, without the authority to control the
construction and start of operations of the new facility, the W76
program manager could not help resolve the disagreement over the safety
regulations needed at the facility. Potentially compounding these
problems, NNSA committed to an ambitious production schedule to make up
for delays related to Fogbank--a schedule that does not leave time to
address any future production problems. Furthermore, NNSA cannot be
held accountable to meeting its cost targets without a consistent
approach in developing a cost baseline for the W76 program. The ability
to track cost over time and assess how well an agency holds to a cost
baseline is fundamental for proper management and oversight.
Finally, because DOD failed to adequately oversee the B61 refurbishment
program, as Phase 6.X requires, NNSA spent unnecessary time and money
trying to find an alternative material. In addition, because the Lead
Project Officer for the B61 bomb did not adequately monitor NNSA's
activities during critical phases or have the technical expertise to do
so, the Air Force did not have sufficient time to ask NNSA to conduct
additional tests before NNSA entered full-scale production.
All of these management issues raise significant questions about NNSA's
ability not only to complete life extension programs on time and on
budget that meet all refurbishment objectives, but also its ability to
manage the design and production of new weapons, such as the proposed
reliable replacement warhead. NNSA and DOD state that the reliable
replacement warhead is a way to replace the nation's aging stockpile
with a safer, more reliable, and more secure warhead than those
currently in our stockpile, and plan to use the Phase 6.X process to
design and manufacture this warhead. Because NNSA did not properly
follow the Phase 6.X process, meet all refurbishment objectives for the
B61 bomb, and conduct all planned tests, it raises questions about
NNSA's ability to design a new weapon that meets DOD's needs and also
provides sufficient confidence to DOD that a new weapon will perform as
expected without conducting underground nuclear tests. In addition,
NNSA's failure to implement its risk mitigation strategy for the
highest risk to the program and implement lessons learned from prior
life extensions, like the W87 warhead, does not inspire confidence in
its ability to achieve the program's goals on time and on budget.
Recommendations:
To improve the management of the stockpile life extension program, we
recommend that the Administrator of NNSA direct the Deputy
Administrator for Defense Programs to take the following six actions:
* Develop a realistic schedule for the W76 warhead and future life
extension programs that allows NNSA to (1) address technical challenges
while meeting all military requirements and (2) build in time for
unexpected technical challenges that may delay the program.
* Assess the cost and include funding in the baseline for risk
mitigation activities that address the highest risks to the W76 and
future life extension programs.
* Before beginning a life extension program, assess the risks, costs,
and scheduling needs for each military requirement established by DOD.
* Ensure that the program managers responsible for overseeing the
construction of new facilities directly related to future life
extension programs coordinate with the program managers of such future
programs to avoid the types of delays and problems faced with the
construction and operation of the Fogbank manufacturing facility for
the W76 program.
* Ensure that program managers for the construction of new facilities
for future life extensions base their schedule for the construction and
start-up of a facility on the life extension program managers' needs
identified in their risk mitigation strategies.
* Develop and use consistent budget assumptions and criteria for the
baseline to track costs over time.
To improve DOD's oversight over NNSA's life extension activities and
ensure that refurbished weapons meet all military requirements, we
recommend that the Secretary of Defense take the following three
actions:
* Direct STRATCOM and the Secretary of the responsible Service to
comprehensively review military requirements for a weapons system prior
to entering Phase 6.2A of a life extension program.
* Direct STRATCOM and the Secretary of the responsible Service to work
with NNSA to assess the cost and schedule implications for meeting each
military requirement prior to entering Phase 6.3.
* Direct the Secretaries of the Air Force and the Navy to ensure that
their respective Lead Project Officers have the technical and
managerial expertise and resources to review NNSA's progress and
technical challenges throughout the life extension program.
Agency Comments and Our Evaluation:
We provided NNSA and DOD with draft copies of our classified report for
their review and comment. In addition to their official comments, which
are reprinted in appendixes I and II, NNSA and DOD provided technical
comments, which we incorporated as appropriate. As discussed in our
classified report, NNSA agreed with our recommendations and plans to
take a number of steps to implement them. First, NNSA plans to assess
the risks, costs, and scheduling needs for each military requirement
DOD establishes during the early phases of a life extension program.
NNSA will consult officials from the production facilities to better
understand the potential impact on cost and schedule of manufacturing
critical nuclear and non-nuclear materials. In addition, NNSA plans to
adopt an Integrated Phase Gate process that establishes well-defined
milestones, or gates, throughout the Phase 6.X process. Before
proceeding to the next gate, NNSA and DOD officials must identify any
risks to cost and schedule and can opt to delay the life extension
program if the risks are too high and additional actions, such as
testing, should be taken. Second, NNSA will include funding needs for
risk mitigation activities that address the highest risks to future
life extension programs in budget reports to Congress. Third, NNSA
plans to better coordinate construction activities at the production
facilities with the needs of life extension program activities. Last,
according to NNSA, it developed a methodology to establish a baseline
with consistent budget assumptions and criteria to track costs over
time. We believe that these actions could significantly improve the
management of the life extension program.
DOD partially agreed with our recommendations. DOD agreed with our two
recommendations directed at the department, but asked us to make
modifications to the language of the recommendations to better target
the responsible service or agency that has authority to implement them.
We modified our recommendations by (1) including the Department of the
Navy because it is responsible for reviewing NNSA's refurbishment
activities for certain nuclear weapons, such as the W76, and (2)
specifying during which phase of the phase 6.X process DOD should
comprehensively review its military requirements and assess the cost
and schedule implications for meeting each military requirement. DOD
also expressed concern that the report placed an undue burden of
responsibility for program delays for the B61 life extension program on
DOD and that there were other technical issues NNSA faced that were not
discussed in this report that led to program delays. We believe that
our report fairly attributes management problems with the B61 life
extension program to both NNSA and DOD. As we state in the report, NNSA
did not include any cost or schedule contingencies in its baseline to
address unforeseen technical challenges in refurbishing the B61 bomb,
and its aggressive schedule posed a significant risk to meeting the
program's milestones. This report did not address all of the technical
challenges that NNSA faced in refurbishing the B61 bomb because some
did not have an impact on cost and schedule and others were additional
examples of problems NNSA faced by compressing the development and
engineering schedule. As we noted on page 3 of this report, the scope
of our discussion of the B61 was limited to the most significant
technical challenge that had an impact on cost, schedule, and weapon
performance and reliability--the decision to reuse or manufacture a new
material for a critical component. NNSA had the burden of completing
the refurbishment on time and on schedule, but DOD failed to provide
the necessary oversight. Last, we recognize that the Air Force has
taken steps to strengthen the management and oversight of nuclear
activities, such as consolidating nuclear activities under a newly
established Air Force Nuclear Weapons Center. However, it is too early
to assess the impact these actions have had on the Air Force's
oversight of the life extension program.
We are sending copies of this report to the Secretary of Energy, the
Administrator of NNSA, the Secretary of Defense, and interested
congressional committees. In addition, the report will be available at
no charge on the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact me at (202) 512-3841 or aloisee@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made major contributions to
this report are listed in appendix III.
Signed by:
Gene Aloise:
Director, Natural Resources and Environment:
[End of section]
Appendix I: Comments from the National Nuclear Security Administration:
Department of Energy:
National Nuclear Security Administration:
Office Of The Administrator:
Washington, DC 20585:
December 9, 2008:
Mr. Gene Aloise:
Director, Natural Resources and Environment:
Government Accountability Office:
Washington, DC 20548-0001:
Dear Mr. Aloise:
The National Nuclear Security Administration (NNSA) appreciates the
opportunity to review the Government Accountability Office's (GAO)
report, GAO-09-152C, "Nuclear Weapons: NNSA and DOD Need To More
Effectively Manage the Stockpile Life Extension Program." We understand
that this report is the result of audit work conducted at the request
of the House's Subcommittee on Strategic Forces, Committee on Armed
Services.
NNSA generally agrees with the report and corresponding recommendations
and is offering this unclassified response to the report. We will
provide, under separate cover, additional classified comments for your
consideration.
While GAO is offering recommendations to improve the management of the
Life Extension Programs, NNSA wants to assure you that, in the area of
improving our approach to requirements, risk, cost and schedule, NNSA
performs a comprehensive review of military requirements during the
study phase of the "6.X" process. The military requirements process is
managed by the Project Officers Group with which NNSA interacts in our
vetting of requirements. NNSA has taken steps to overlay additional
rigor, accountability, and integration through a formal "Integrated
Phase Gate" process. This stated process is an adaptation of an
industry process developed to improve the requirements, risk, and cost
management program elements. It also brings to bear the early
involvement of production agencies in order to better identify
potential production impacts beginning early in a Life Extension
Program. With the Integrated Phase Gate approach, senior managers and
leaders are accountable for risks identified early in the product
realization process, and must either accept/mitigate risk or delay at
well-defined milestones (gates) throughout the acquisition activity.
This methodology has been embraced and is being applied to the next
Life Extension Program.
As with many processes that implement increased rigor, there is a need
for identification of increased funding in order to increase the
fidelity in project risk assessment, cost estimation, and schedule
development. However, NNSA believes that this increased rigor will
correct deficiencies noted in the report to include the:
* development of more realistic schedules which address necessary
contingencies for technical challenges/risk management;
* assessment of risks, costs, and schedules that are associated with
Department of Defense requirements; and;
* assessment of, and inclusion of, contingency funds associated with
technical risks.
For those recommendations related to improvements in risk mitigation,
NNSA agrees that risk identification and risk mitigation need to occur
as early as possible. In the case of one of the weapon systems, a risk
mitigation plan was identified but the funding prioritization had an
adverse effect on the complete execution of the risk mitigation plan.
In a similar vein, NNSA has identified its risk mitigation strategies
and associated funding requirements leading into the next Life
Extension Program. NNSA is aware that prioritization of funding
execution remains an issue. NNSA currently reports to Congressional
Committees on the cost to acquire a weapon or to conduct a Life
Extension Program. This information is captured in Selected Acquisition
Reports. For future weapons acquisition work, NNSA will ensure that
Life Extension Program funding requirements that are portrayed in the
Selected Acquisition Reports include risk mitigation activities and
management reserve. Heretofore, the Selected Acquisition Reports have
only reflected that portion of Life Extension Programs that have been
funded. To include properly implemented risk mitigation activities will
provide a more accurate display of funding requirements.
Regarding the integration of related construction and other activities
related to Life Extension Programs, NNSA will improve the integration
of construction requirements as they impact a Life Extension Program.
With the next Life Extension Program, we are identifying not only the
production requirements but also the needs of the Nuclear Weapons
Complex. NNSA's next Life Extension Program is also the vehicle being
used to better integrate our technical maturation activities to focus
on our requirements-driven activities.
In response to the recommendation related to budget assumptions and
cost tracking, NNSA developed a process for the establishment of an
`Acquisition Program Baseline' approach which is linked to the
Integrated Phase Gate process-as previously discussed-and runs through
the end of a Life Extension Program production.
As I mentioned earlier, NNSA will provide more detailed, classified
technical comments under separate cover. Should you have any questions,
please contact Richard Speidel, Director, Policy and Internal Controls
Management.
Sincerely,
Signed by:
William C. Ostendorff:
Principal Deputy Administrator:
cc: Robert Smolen, Deputy Administrator for Defense Programs:
[End of section]
Appendix II: Comments from the Department of Defense:
[Secret/Formerly Restricted Data: Unclassified when separated from
classified attachments]:
Assistant To The Secretary Of Defense:
Nuclear And Chemical And Biological Defense Programs:
3050 Defense Pentagon:
Washington, DC 20301-3050:
November 21, 2008:
Mr. Gene Aloise:
Director, Natural Resources and Environment:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548:
Dear Mr. Aloise:
This is the Department of Defense (DoD) response to the Government
Accountability Office (GAO) Draft Report, GAO-09-152C, "Nuclear
Weapons: NNSA and DoD Need To More Effectively Manage the Stockpile
Life Extension Program, dated October 30, 2008 (GAO Code 360913)."
The DoD partially-concurs with the draft report's recommendation to
review military requirements. We strongly support the planned review of
military requirements through Phase 6.2 of the Life Extension Program
prior to the cost study of Phase 6.2a as currently required.
Recommended language is provided. We believe that this process was
followed in the B61 Life Extension Program (LEP) process, but recognize
the need to emphasize requirements early in the program.
The DoD also partially-concurs with the recommendation to assign a Lead
Project Officer (LPO) with adequate technical expertise. We recommend
that the recommendation be extended to include each responsible service
and request that U.S. Strategic Command (USSTRATCOM) be removed from
the recommendation, as USSTRATCOM does not control the selection of the
LPO. Air Force is currently engaged in significant activities designed
to revitalize its nuclear enterprise that will address this
recommendation. Revised recommendations are enclosed.
In general, we support the findings of the GAO on the current life
extension programs. We fear however, that by excluding National Nuclear
Security Administration (NNSA) programmatic and technical issues
associated with the development of the B61 LEP, an undue burden of
responsibility for program delays was targeted to the DoD and
specifically to the Air Force. Expansion of the report to include these
other factors would validate the recommendations to the NNSA.
A number of technical corrections were suggested to further enhance the
report and were forwarded under separate cover. The Department
appreciates this opportunity to comment on the draft report. If you
have any questions, my point of contact for this action is Dr Bert
Jorgensen, 703-693-4009; Bert.Jorgensen@osd.mil or
Bert.Jorgensen@osd.smil.mil.
Sincerely,
Signed by:
Steve Henry:
Deputy Assistant to the Secretary of Defense (Nuclear Matters):
Enclosure: As stated:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Gene Aloise (202) 512-3841 or aloisee@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Marc Castellano, Leland
Cogliani, Jonathan Gill, Marie Mak, James Noel, Omari Norman, Tim
Persons, Carol Herrnstadt Shulman, and John Smale made significant
contributions to this report.
[End of section]
Footnotes:
[1] With the decommissioning of the Peacekeeper missiles, a large
fraction of the W87 warheads are now mounted on Minuteman III missiles.
[2] GAO, Nuclear Weapons: Improved Management Needed to Implement
Stockpile Stewardship Program Effectively, [hyperlink,
http://www.gao.gov/products/GAO-01-48] (Washington, D.C.: Dec. 14,
2000).
[3] GAO, Nuclear Weapons: Opportunities Exist to Improve the Budgeting,
Cost Accounting, and Management Associated with the Stockpile Life
Extension Program, [hyperlink, http://www.gao.gov/products/GAO-03-583]
(Washington, D.C.: July 28, 2003).
[4] GAO, Nuclear Weapons: NNSA and DOD Need to More Effectively Manage
the Stockpile Life Extension Program, [hyperlink,
http://www.gao.gov/products/GAO-09-152C] (Washington, D.C.: Jan. 12,
2009).
[5] Pub. L. No. 103-160, section 3138, 107 Stat. 1547, 1946.
[6] Currently, the U.S. nuclear weapons stockpile consists of eight
types of bombs and missile warheads, numbering in the thousands, which
are either stored at strategic military locations or deployed on
military aircraft, missiles, or submarines.
[7] In addition to the strategic variants of the B61, the Air Force
also maintains tactical B61 bombs--the Mods 3, 4, and 10.
[8] GAO, Nuclear Weapons: Improved Management Needed to Implement
Stockpile Stewardship Program Effectively, [hyperlink,
http://www.gao.gov/products/GAO-01-48] (Washington, D.C.: Dec. 14,
2000).
[9] This estimate excludes construction costs.
[End of section]
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