Page 1 GAO-02-889R NNSA Nuclear Weapon Reports

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 multipart 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 DownSelect; 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
Page 2 GAO-02-889R NNSA Nuclear Weapon Reports

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 FullScale 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 Council1

 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,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

 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.
Page 3 GAO-02-889R NNSA Nuclear Weapon Reports

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 longrange Future Years Nuclear Security Program plan. We conducted our review from

April 2002 through July 2002 in accordance with generally accepted government
Page 4 GAO-02-889R NNSA Nuclear Weapon Reports

auditing standards. We briefed your offices on the results of our review on Monday,

June 24, 2002 (see enc. I).

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
Page 5 GAO-02-889R NNSA Nuclear Weapon Reports

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 2000,3

 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.

 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).
Page 6 GAO-02-889R NNSA Nuclear Weapon Reports

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.
Page 7 GAO-02-889R NNSA Nuclear Weapon Reports

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
Page 8 GAO-02-889R NNSA Nuclear Weapon Reports

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.
Page 9 GAO-02-889R NNSA Nuclear Weapon Reports

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

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.

(Ms.) Gary L. Jones

Director, Natural Resources

 and Environment

Enclosure
Page 10 GAO-02-889R NNSA Nuclear Weapon Reports

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
Enclosure I

Page 11 GAO-02-889R NNSA Nuclear Weapon

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

2

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
Enclosure I

Page 12 GAO-02-889R NNSA Nuclear Weapon Reports

3

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

4

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
Enclosure I

Page 13 GAO-02-889R NNSA Nuclear Weapon

5

Phase 6.X Process (cont’d)

• 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

6

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
Enclosure I

Page 14 GAO-02-889R NNSA Nuclear Weapon Reports

7

What NNSA Has Done (cont’d)

• For weapons being refurbished in blocks (W76 and W80), 

reported on only the first block

• In April, issued first NWARs since 1991

8

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
Enclosure I

Page 15 GAO-02-889R NNSA Nuclear Weapon

9

Objectives and Scope (cont’d)

• 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

10

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
Enclosure I

Page 16 GAO-02-889R NNSA Nuclear Weapon Reports

11

Assessment of NNSA’s Criteria (cont’d)

• 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

12

6.X Process Chart

6.X Process Time Assessment in Months

27%

27%

11%

36% 6.1, 6.2, 6.2A:

Research and

Development

6.5:

First

Refurbishment

6.4:

Production

Engineering

6.3:

Development

Engineering

Source: Stockpile Life Extension Interim Program Plan, February 10, 2000, p. 27-28.

Note: Percentages may not equal 100% due to rounding.
Enclosure I

Page 17 GAO-02-889R NNSA Nuclear Weapon

13

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

14

Comparison (cont’d)

SARs

• Approved baseline with 

cost, schedule, and quantity 

control

• Comprehensive guidance 

ensures consistent 

preparation and compliance 

with acquisition 

management standards

NWARs

• Varying baselines

– Formal change control 

process still being 

developed

• No written guidance

– Rewriting old guidance 

used for pre-1991 

NWARs
Enclosure I

Page 18 GAO-02-889R NNSA Nuclear Weapon Reports

15

Comparison (cont’d)

SARs

• Link to budget and Future 

Years Defense Plan, which 

ensures consistency

NWARs

• Link to budget; however, 

link to FYNSP cannot be 

established

– No current process to 

cross-walk NWARs, 

budget, and FYNSP 

to ensure consistency

16

Comparison (cont’d)

SARs

• Cover all system-related 

costs

NWARs

• Exclude known systemrelated costs, for example

– ADAPT support for 

modifying Y-12 

capabilities

– Acorn Production Line 

expansion project at the 

Kansas City Plant
Enclosure I

Page 19 GAO-02-889R NNSA Nuclear Weapon

17

Comparison (cont’d)

SARs

• Identify major program 

milestones

• Explain cost and schedule 

changes

• Can begin with the 

development stage

NWARs

• 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

18

Comparison (cont’d)

SARs

• Report on major contracts 

and contractor performance 

against baselines

• Portion-marked for 

classification purposes, 

which aids review and 

reporting in unclassified 

contexts

NWARs

• Do not report on contractor 

performance against 

baselines

• Entirely classified; no 

portion-marking, which 

hampers review and 

reporting in unclassified 

contexts
Enclosure I

Page 20 GAO-02-889R NNSA Nuclear Weapon Reports

19

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

20

Assessment of NWAR Cost Data (cont’d)

• 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

(360211)