DEPARTMENT OF 

ENERGY

Continued Actions Needed 

to Modernize Nuclear 

Infrastructure and Address 

Management Challenges

Statement of David C. Trimble, Director 

Natural Resources and Environment

Testimony before the Subcommittee on 

Energy, Committee on Energy and 

Commerce, House of Representatives

For Release on Delivery 

Expected at 10:00 a.m. ET

Tuesday, February 6, 2018

GAO-18-374T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-18-374T, a testimony 

before the Subcommittee on Energy, 

Committee on Energy and Commerce,

House of Representatives 

February 6, 2018

DEPARTMENT OF ENERGY

Continued Actions Needed to Modernize Nuclear 

Infrastructure and Address Management Challenges

What GAO Found

The Department of Energy’s (DOE) National Nuclear Security Administration 

(NNSA) faces challenges related to the affordability of its nuclear modernization 

programs. In April 2017, GAO found a misalignment between NNSA’s 

modernization plans and the estimated budgetary resources needed to carry out 

those plans. Specifically, GAO found that NNSA’s estimates of funding needed

for its modernization plans sometimes exceeded the budgetary projections 

included in the President’s planned near-term and long-term modernization 

budgets by billions of dollars. GAO also found that the costs of some major 

modernization programs—such as for nuclear weapon refurbishments—may 

also increase and further strain future modernization budgets. GAO 

recommended in April 2017 that NNSA include an assessment of the affordability 

of its modernization programs in future versions of its annual plan on stockpile 

stewardship; NNSA neither agreed nor disagreed with that recommendation.

DOE also faces challenges with addressing its environmental liabilities—the total 

cost of its cleanup responsibilities. In February 2017, GAO found that DOE was 

responsible for over 80 percent ($372 billion) of the U.S. government’s estimated 

$450 billion environmental liability. However, this estimate does not reflect all of 

DOE’s cleanup responsibilities. Notably, this estimate does not reflect all of the 

future cleanup responsibilities that DOE may face. For example, in January 

2017, GAO found that the cost estimate for DOE’s proposal for separate defense 

and commercial nuclear waste repositories excluded the costs and time frames 

for site selection and site characterization, and therefore full costs are likely to be 

billions of dollars more than DOE’s reported environmental liabilities. To 

effectively address cleanup, GAO has made at least 28 recommendations to 

DOE and other federal agencies, which could reduce long-term costs as well as

environmental risks more quickly. Of these, 13 remain not implemented.

DOE has taken several important steps that demonstrate its commitment to 

improving contract and project management, but challenges persist. Specifically, 

DOE’s revised project management order, issued in May 2016, made several 

changes in response to recommendations GAO made in prior years, such as 

requiring that projects develop cost estimates and analyses of alternatives

according to our best practices. However, DOE’s recent efforts do not address 

several areas, such as acquisition planning for major contracts and aspects of 

program and project management, where the department continues to struggle.

GAO has made several recommendations related to these areas, and DOE has

generally agreed with and begun to take action on most of them.

Finally, NNSA faces challenges in implementing its nonproliferation programs. 

For example, in September 2017, GAO found that selected programs in NNSA’s 

Office of Defense Nuclear Nonproliferation (DNN) did not measure performance 

against schedule and cost baselines, as recommended by program management 

leading practices because DNN’s program management policy did not require 

programs to measure performance in this way. GAO recommended that DNN 

revise its policy to require programs to measure performance against cost and 

schedule baselines. NNSA indicated it plans to take action to revise its policy. View GAO-18-374T. For more information, 

contact David Trimble at (202) 512-3841 or 

trimbled@gao.gov.

Why GAO Did This Study

DOE’s NNSA is responsible for 

managing the nuclear weapons 

stockpile and supporting nuclear 

nonproliferation efforts. DOE’s Office of 

Environmental Management’s mission 

includes decontaminating and 

decommissioning facilities that are 

contaminated from decades of nuclear 

weapons production. 

Over the last few years, GAO has

reported on a wide range of challenges 

facing DOE and NNSA. These 

challenges contribute to GAO’s 

continuing inclusion of DOE’s and 

NNSA’s management of major 

contracts and projects on the list of

agencies and program areas that are 

at high risk of fraud, waste, abuse, and 

mismanagement, or are in need of 

transformation. GAO also recently 

added the U.S. government’s 

environmental liabilities to this list.

This statement is based on 25 GAO 

reports issued from April 2011 through 

January 2018 and discusses (1)

challenges related to the affordability of 

NNSA's nuclear modernization plans;

(2) challenges related to DOE’s 

environmental liability; (3) the status of 

DOE’s efforts to improve its 

management of contracts, projects,

and programs; and (4) challenges 

facing NNSA’s nonproliferation 

programs.

What GAO Recommends

GAO has previously suggested that 

Congress consider changes to the 

laws governing environmental cleanup 

activities. In addition to these 

suggestions, GAO has made 

numerous recommendations to DOE to 

address its management challenges. 
Letter

Page 1 GAO-18-374T 

Chairman Upton, Ranking Member Rush, and Members of the 

Subcommittee:

Thank you for the opportunity to discuss our recent work on some of the 

pressing management challenges facing the Department of Energy’s 

(DOE) National Nuclear Security Administration (NNSA) and Office of 

Environmental Management (EM).1 NNSA is responsible for managing 

the nation’s three nuclear security missions: ensuring a safe, secure, and 

reliable nuclear deterrent; achieving designated reductions in the nuclear 

weapons stockpile; and supporting the nation’s nuclear nonproliferation 

efforts. In support of these missions, NNSA’s February 2016 budget 

justification for the Weapons Activities appropriations account included 

about $49.4 billion for fiscal years 2017 through 2021 to implement its 

weapons modernization plans. More recently, in November 2017, NNSA 

issued its Stockpile Stewardship and Management Plan, which included 

about $10.2 billion for weapons activities for fiscal year 2018.

In support of its missions, NNSA implements a range of nonproliferation 

programs under its Office of Defense Nuclear Nonproliferation.2 These 

programs include efforts to secure, consolidate, and dispose of weaponsusable nuclear materials and radiological sources;3 reduce the risks of 

nuclear smuggling; enhance international export controls and 

International Atomic Energy Agency nuclear safeguards;4 and support 

research and development of new nonproliferation technologies.

 

1

NNSA is a separately organized agency within the Department of Energy. It was created 

under Title 32 of the National Defense Authorization Act for Fiscal Year 2000, Pub. L. No. 

106-65, §§ 3201-3299, 113 Stat. 512, 953-971 (1999) (codified as amended at 50 U.S.C. 

§§ 2401-2484 (2017)).

2

DOE defines a program as an organized set of activities directed toward a common 

purpose or goal in support of an assigned mission area.

3

Weapons-usable nuclear materials are highly enriched uranium, uranium-233, and any 

plutonium containing less than 80 percent of the isotope plutonium-238. Such materials 

are also often referred to as fissile materials or strategic special nuclear materials.

4

The International Atomic Energy Agency is an independent international organization 

based in Vienna, Austria, that is affiliated with the United Nations and has the dual mission 

of promoting the peaceful uses of nuclear energy and verifying that nuclear material 

subject to safeguards is not diverted to weapons development efforts or other proscribed 

purposes. Safeguards allow the agency to independently verify that nuclear material and 

other specified items are not diverted by, among other things, inspecting all facilities and 

locations containing nuclear material declared by countries to verify its peaceful use.

Letter
Page 2 GAO-18-374T 

EM is responsible for decontaminating and decommissioning nuclear 

facilities and sites that are contaminated from decades of nuclear 

weapons production and nuclear energy research. In February 2017, we 

reported that, since its inception in 1989, EM has spent over $164 billion 

on cleanup efforts, which include retrieving, treating, and disposing of 

nuclear waste.5

Both NNSA and EM face critical challenges in fulfilling their missions. 

Since the end of the Cold War, key portions of the nuclear security 

enterprise’s weapons production infrastructure have become outdated, 

prompting congressional and executive branch decision makers to call on 

DOE to develop plans to modernize this infrastructure.6 The Department 

of Defense’s (DOD) 2010 Nuclear Posture Review identified long-term 

modernization goals and requirements, including sustaining a safe, 

secure, and effective nuclear arsenal through increasing investments to 

rebuild and modernize the nation’s nuclear infrastructure, some of which 

dates back to the 1940s.7 In January 2017, the President directed the 

Secretary of Defense to initiate a new Nuclear Posture Review to ensure 

that the U.S. nuclear deterrent is modern, robust, flexible, resilient, ready, 

and appropriately tailored to deter 21st-century threats and reassure our 

allies. This review was released in February 2018.

8

As NNSA works to modernize the nuclear security enterprise, EM must 

address the legacy of 70 years of nuclear weapons production and 

energy research by DOE and its predecessor agencies. These activities 

generated large amounts of radioactive waste, spent nuclear fuel, excess 

plutonium and uranium, and contaminated soil and groundwater. They 

also contaminated thousands of sites and facilities, including land, 

buildings, and other structures and their systems and equipment. Various 

federal laws, agreements with states, and court decisions require the 

federal government to clean up environmental hazards at federal sites 

 5

GAO, High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts 

Needed on Others, GAO-17-317 (Washington, D.C.: Feb. 15, 2017).

6

The end of the Cold War caused a dramatic shift in how the United States approaches

nuclear weapons. Instead of designing, testing, and producing new nuclear weapons, U.S.

strategy shifted to maintaining the existing nuclear weapons stockpile indefinitely.

7

Department of Defense, Nuclear Posture Review Report (Washington, D.C.: Apr. 6, 

2010). The Nuclear Posture Review establishes the nation’s nuclear weapons 

requirements and policy.

8

Department of Defense, Nuclear Posture Review (Washington, D.C.: Feb. 2018).
Page 3 GAO-18-374T 

and facilities, such as nuclear weapons production facilities. DOE’s 

approach to addressing these environmental liabilities is often influenced 

by numerous site-specific factors, stakeholder agreements, and legal 

provisions. For years, we and others have reported on shortcomings in 

DOE’s approach to addressing its environmental liabilities, including 

incomplete data on the extent of cleanup needed.

DOE relies primarily on contractors to carry out its programs, and it is the 

largest civilian contracting agency in the federal government. In fiscal 

year 2017, it spent approximately 90 percent of its $32 billion in annual 

funding on contracts and major capital asset projects.9 We designated 

DOE’s contract management—which has included both contract 

administration and project management—as a high-risk area in 1990 

because DOE’s record of inadequate management and oversight of 

contractors had left it vulnerable to fraud, waste, abuse, and 

mismanagement. In our 2017 high-risk update, we reported that NNSA

and EM continued to demonstrate a strong commitment and top 

leadership support to improve contract and project management—a key 

criterion for removing agencies and program areas from our High-Risk 

List.10 However, we also found that DOE still needs to make more 

progress on the other four criteria for removal: organizational capacity, 

corrective action planning, monitoring effectiveness, and demonstrating 

progress.

Further, in our 2017 high-risk update, we added the federal government’s 

environmental liabilities to our High-Risk List. More than 80 percent of 

these liabilities are DOE’s responsibility.11 In our 2017 high-risk update, 

we reported that because of incomplete information and often 

inconsistent approaches to making cleanup decisions, DOE does not 

always approach environmental cleanup using a risk-informed approach 

to reduce health and safety risks in a cost-effective manner.

 9

Those are projects estimated to cost of $750 million or more. DOE defines a capital asset 

project as a project with defined start and end points required in the acquisition of capital 

assets.

10GAO-17-317. GAO’s high-risk program identifies government operations with greater 

vulnerabilities to fraud, waste, abuse, and mismanagement or the need for transformation 

to address economy, efficiency, or effectiveness challenges.

11GAO-17-317. 
Page 4 GAO-18-374T 

My testimony today discusses (1) challenges related to the affordability of 

NNSA’s nuclear weapons modernization plans; (2) challenges in 

addressing DOE’s environmental liabilities; (3) the status of DOE’s efforts 

to improve its management of contracts, projects, and programs; and (4) 

challenges facing NNSA’s nonproliferation program. My statement is 

based primarily on our work from 25 GAO reports issued from April 2011

to January 2018—including 5 reports issued since I last testified on this 

issue in May 2017 (see the end of this testimony for a list of related 

reports).12 Detailed information about the scope and methodology we 

used to conduct our prior work can be found in each of our issued reports. 

The work upon which this testimony is based was conducted in 

accordance with generally accepted government auditing standards. 

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.

In April 2017, we issued our latest report on NNSA’s 25-year plans to 

modernize the nation’s nuclear weapons stockpile and its supporting 

infrastructure.13 In that report, we identified two areas of misalignment 

between NNSA’s modernization plans and the estimated budgetary 

resources needed to carry out those plans, which could result in 

challenges to NNSA in affording its planned portfolio of modernization 

programs. First, we found that NNSA’s estimates of funding needed for its 

modernization plans sometimes exceeded the budgetary projections 

included in the President’s planned near- and long-term modernization 

budgets. In the near-term (fiscal years 2018 through 2021), we found that 

NNSA may have to defer certain modernization work beyond that time 

period to execute its program within the planned budget, which could 

increase modernization costs and schedule risks. This is a pattern we 

have previously identified as a “bow wave”—an increase in future years’

estimated budget needs that occurs when agencies are undertaking more 

programs than their resources can support. In the long-term (fiscal years 

2022 through 2026), we found that NNSA’s modernization program 

 12GAO, Department of Energy: Continued Actions Needed to Address Management 

Challenges, GAO-17-651T (Washington, D.C.: May 24, 2017).

13GAO, National Nuclear Security Administration: Action Needed to Address Affordability 

of Nuclear Modernization Programs, GAO-17-341 (Washington, D.C.: Apr. 26, 2017).

Misalignment 

between NNSA’s 

Modernization Budget 

Estimates and Plans 

Raises Affordability 

Concerns
Page 5 GAO-18-374T 

budget estimates sometimes exceeded the projected budgetary 

resources planned for inclusion in the President’s budget, raising 

additional questions about whether NNSA will be able to afford the scope 

of its modernization program. Second, the costs of some major 

modernization programs—such as for nuclear weapon refurbishments—

may also increase and further strain future modernization budgets. We 

are currently reviewing NNSA’s Fiscal Year 2018 Stockpile Stewardship 

and Management Plan.

14

As we reported in April 2017, NNSA estimates of funding needed for its 

modernization plans sometimes exceeded the budgetary projections 

included in the President’s planned near- and long-term modernization 

budgets.15

We found that NNSA may have to defer certain modernization work 

planned for fiscal years 2018 through 2021 beyond its current 5-year 

planning period, called the Future-Years Nuclear Security Program 

(FYNSP). As we reported in April 2017, this is caused by a misalignment 

between NNSA’s budget estimates for certain nuclear modernization 

programs and the President’s budgets for that period.16 We concluded 

that this deferral could exacerbate a significant bow wave of 

modernization funding needs that NNSA projects for the out-years 

 14The National Defense Authorization Act for Fiscal Year 2013 includes a provision that 

we annually review a joint DOE-DOD report which addresses, among other things, the 

plan for the nuclear weapons stockpile and its delivery systems.

15GAO-17-341. 

16GAO-17-341. Two key documents, updated annually, describe NNSA’s operations, 

modernization plans, and budget estimates for implementing these plans; these 

documents comprise NNSA’s nuclear security budget materials. First, the Stockpile 

Stewardship and Management Plan is NNSA’s formal means of communicating to 

Congress information on modernization and operations plans and budget estimates over 

the next 25 years. Second, NNSA’s annual justification of the President’s budget provides 

program information and budget estimates for the next 5 years. This 5-year plan is called 

the Future-Years Nuclear Security Program (FYNSP), and the budget estimates in this 

plan reflect funding levels approved by the Office of Management and Budget. The budget 

estimates for years included in the FYNSP must align with the 5-year overall federal 

budget estimates in the President’s budget. The budget estimates for years beyond the 

FYNSP are not subject to this requirement.

Misalignment between 

Estimates and Plans May 

Result in Increased Cost 

and Schedule Risks and 

Raises Affordability 

Concerns

Near-term Misalignment 

between Modernization Plans 

and Estimated Budgetary 

Resources
Page 6 GAO-18-374T 

beyond the FYNSP and could potentially increase modernization costs 

and schedule risks.

As we have previously reported, such bow waves occur when agencies 

defer costs of their programs to the future, beyond their programming 

periods, and they often occur when agencies are undertaking more 

programs than their resources can support.17 As NNSA’s fiscal year 2017 

budget materials show, its modernization budget estimates for fiscal 

years 2022 through 2026—the first 5 years beyond the FYNSP—may 

require significant funding increases. For example, in fiscal year 2022, 

NNSA’s estimates of its modernization budget needs are projected to rise 

about 7 percent compared with the budget estimates for fiscal year 2021, 

the last year of the FYNSP, as shown in figure 1.

 17GAO, Orion Multi-Purpose Crew Vehicle: Action Needed to Improve Visibility into Cost, 

Schedule, and Capacity to Resolve Technical Challenges, GAO-16-620 (Washington, 

D.C.: Jul. 27, 2016) and Weapon System Acquisitions: Opportunities Exist to Improve the 

Department of Defense’s Portfolio Management, GAO-15-466 (Washington, D.C.: Aug. 

27, 2015). 
Page 7 GAO-18-374T 

Figure 1: Comparison of the National Nuclear Security Administration’s Fiscal Year 

2017 Budget Estimates for the Future-Years Nuclear Security Program and 5 Years 

Beyond

Note: Amounts are presented in nominal dollars, which are not adjusted for the effects of inflation.

The analysis in our April 2017 report showed that NNSA has shifted this 

modernization bow wave to the period beyond the FYNSP time frame in 

each of the past four versions of the annual Stockpile Stewardship and 

Management Plan. For example, in the Fiscal Year 2014 Stockpile 

Stewardship and Management Plan, NNSA’s budget estimates for its 

modernization programs increased from a total of about $9.3 billion in 

fiscal year 2018, the last year of the FYNSP, to about $10.5 billion in 

fiscal year 2019, the first year after the FYNSP—an increase of about 13 

percent. Similar patterns showing a jump in funding needs immediately 

after the last year of the FYNSP are repeated in the funding profiles 

contained in the fiscal year 2015, 2016, and 2017 plans. As we have 

previously reported, deferring more work to future years can increase cost 

and schedule risks and can put programs in the position of potentially 

facing a backlog of deferred work that grows beyond what can be 

accommodated in future years.
Page 8 GAO-18-374T 

The Fiscal Year 2017 Stockpile Stewardship and Management Plan

shows that NNSA’s overall modernization budget estimates for fiscal 

years 2022 through 2026—the out-years beyond the FYNSP—may 

exceed the projected funding levels in the President’s budgets for that 

period, raising further questions about the affordability of NNSA’s nuclear 

modernization plans. According to NNSA’s data, the agency’s estimated 

budget needed to support modernization totals about $58.4 billion for 

fiscal years 2022 through 2026, and the out-year funding projections 

contained in the President’s fiscal year 2017 budget for the same period 

total about $55.5 billion. The President’s out-year funding projections, 

therefore, are approximately $2.9 billion, or about 5.2 percent, less than 

NNSA estimates it will need over the same period.

Despite this potential shortfall, NNSA’s Fiscal Year 2017 Stockpile 

Stewardship and Management Plan concludes that the modernization 

program is generally affordable in the years beyond the FYNSP for two 

reasons. First, the President’s out-year funding projections are sufficient 

to support NNSA’s low-range cost estimates for its modernization 

programs for fiscal years 2022 through 2026. Based on NNSA data, the 

low-range cost estimates for fiscal years 2022 through 2026 total 

approximately $54.4 billion and the President’s out-year funding 

projections total about $55.5 billion. Figure 2 illustrates data from the 

2017 plan showing NNSA’s budget estimates in nominal dollars, including 

high- and low-range cost estimates for its modernization program, along 

with the out-year funding projections from the President’s fiscal year 2017 

budget, for fiscal years 2022 to 2026. Second, NNSA concludes that its 

modernization programs are generally affordable beyond the FYNSP 

because the agency’s estimated modernization budget needs will begin to 

decrease in fiscal year 2027.

Long-term Misalignment 

between Modernization Plans 

and Estimated Budgetary

Resources
Page 9 GAO-18-374T 

Figure 2: Comparison of the Fiscal Year 2017 Stockpile Stewardship and 

Management Plan’s Budget Estimates and High- and Low-Range Cost Estimates 

with the President’s Fiscal Year 2017 Out-Year Budget Projections, Fiscal Years 

2022 through 2026

Note: Amounts are presented in nominal dollars, which are not adjusted for the effects of inflation.

In our April 2017 report, we noted that NNSA’s conclusion—that its 

modernization program is affordable because the President’s out-year 

funding projections fall within NNSA’s modernization cost ranges—is 

overly optimistic. This is because the conclusion is predicated on 

optimistic assumptions regarding the cost of the modernization program 

beyond the FYNSP, particularly for fiscal years 2022 through 2026. For 

the program to be affordable, NNSA’s modernization programs would 

need to be collectively executed at the low end of their estimated cost 

ranges. The plan does not discuss any options NNSA would pursue to 

support or modify its modernization program if costs exceeded its lowrange cost estimates. In addition, the Fiscal Year 2017 Stockpile 

Stewardship and Management Plan states that the nominal cost of 

NNSA’s modernization program is expected to decrease by 

approximately $1 billion in fiscal year 2027. In that year, according to the 

2017 plan, it is anticipated that NNSA’s estimated budgets for its 
Page 10 GAO-18-374T 

modernization program will begin to fall in line with projections of future 

presidential budgets. However, as we noted in our April 2017 report, the 

decrease that NNSA anticipates in its modernization funding needs 

beginning in fiscal year 2027 may not be achievable if the projected 

mismatch between NNSA’s estimates of its modernization budget needs 

and the projections of the President’s modernization budget for fiscal 

years 2022 through 2026 is not resolved. This mismatch creates 

concerns that NNSA will not be able to afford planned modernization 

costs during fiscal years 2022 through 2026 and will be forced to defer 

them to fiscal year 2027 and beyond, continuing the bow wave patterns 

discussed above.

Our April 2017 report identified misalignment between NNSA’s estimate 

of its budget needs and NNSA’s internal cost range estimates for several 

of its major modernization programs. Further, we found that the costs of 

some major life extension programs (LEP) may increase in the future, 

which may further strain NNSA’s planned modernization budgets.

With respect to the alignment of NNSA’s estimate of its budget needs and 

NNSA’s internal cost range estimates, in April 2017 we found that 

NNSA’s budget estimates were generally consistent with NNSA’s highand low-range cost estimates.18 However, for some years, NNSA’s lowrange cost estimates exceeded the budget estimates for some of the 

programs, suggesting the potential for a funding shortfall for those 

programs in those years. Specifically, we found that the low-range cost 

estimates for the W88 Alteration 370 program and all LEPs discussed in 

our April 2017 report exceeded their budget estimates for some fiscal 

 18According to NNSA officials, two approaches are used to estimate the costs of the 

LEPs, except for the W76-1. Under the first approach, according to officials, NNSA 

develops specific budget estimates by year through a “bottom-up” process. NNSA officials 

described this as a detailed approach to developing the LEP budget estimates that, 

among other things, integrates resource and schedule information from site participants. 

Under the second approach, which NNSA refers to as a “top-down” process, NNSA uses 

historical LEP cost data and complexity factors to project high- and low-range cost 

estimates for each LEP distributed over the life of the program using an accepted cost 

distribution method. According to NNSA, the W76-1 LEP, which is the only weapon 

program that has been through the development phase and the majority of the production 

phase, is used as the primary basis for modeling cost ranges for all future LEPs. NNSA 

does not prepare high- and low-range cost estimates for it. Officials noted that the values 

in these cost ranges reflect idealized funding profiles and do not account for the actual 

detailed schedule of program activities, planning for risk in the project, or the results of 

execution to date.

Potential Rising Costs of 

Some Modernization 

Programs May Further 

Strain NNSA’s 

Modernization Budgets
Page 11 GAO-18-374T 

years within the 10-year time period from fiscal year 2017 to 2026.19 As 

we reported in 2013 and 2016, this misalignment indicates that NNSA’s 

estimated budgets may not be sufficient to fully execute program plans 

and that NNSA may need to increase funding for these programs in the 

future.20

Additionally, in April 2017 we found that the costs of two ongoing nuclear 

weapon LEPs and the W88 Alteration 370 program may increase in the 

future, based on NNSA information that was produced after the release of 

the fiscal year 2017 budget materials.21 These potential cost increases 

could further challenge the extent to which NNSA’s budget estimates 

support the scope of modernization efforts. The LEPs facing potential 

cost increases include:

• B61-12 LEP. An independent cost estimate for the program 

completed in October 2016 exceeded the program’s self-conducted 

cost estimate from June 2016 by $2.6 billion.22

• W80-4 LEP. Officials from NNSA’s Office of Cost Policy and Analysis 

told us that this program may be underfunded by at least $1 billion to 

meet the program’s existing schedule.

• W88 Alteration 370. According to officials from NNSA’s Office of Cost 

Policy and Analysis, this program’s expanded scope of work may 

result in about $1 billion in additional costs.

To help NNSA put forth more credible modernization plans, we 

recommended in our April 2017 report that the NNSA Administrator 

include an assessment of the affordability of NNSA’s portfolio of 

modernization programs in future versions of the Stockpile Stewardship 

and Management Plan, such as by presenting options (e.g., potentially 

 19See GAO-17-341 for greater detail on these and other examples.

20GAO, Modernizing the Nuclear Security Enterprise: NNSA’s Budget Estimates 

Increased but May Not Align with All Anticipated Costs, GAO-16-290 (Washington, D.C.: 

Mar. 4, 2016) and Modernizing the Nuclear Security Enterprise: NNSA’s Budget Estimates

Do Not Fully Align with Plans, GAO-14-45 (Washington, D.C.: Dec. 11, 2013).

21NNSA’s fiscal year 2017 budget materials include two key documents: the Fiscal Year 

2017 Stockpile Stewardship and Management Plan, which was issued in March 2016, and 

the agency’s annual justification of the President’s budget, which was issued in February 

2016.

22We are conducting ongoing work to determine how NNSA has, if at all, reconciled this 

difference. 
Page 12 GAO-18-374T 

deferring the start of or canceling specific modernization programs) that 

NNSA could consider taking to bring its estimates of modernization 

funding needs into alignment with potential future budgets. In commenting 

on our report, NNSA neither agreed nor disagreed with our 

recommendation.

DOE also faces challenges with addressing its environmental liabilities 

and its cleanup mission. In February 2017, we added the federal 

government’s environmental liabilities to our High-Risk List.23 Specifically, 

we found that the federal government’s environmental liability has been 

growing for the past 20 years—and is likely to continue to increase—and 

that DOE is responsible for over 80 percent ($372 billion) of the nearly 

$450 billion reported environmental liability. Notably, this estimate does 

not reflect all of the future cleanup responsibilities that DOE may face.24

In addition, DOE has not consistently taken a risk-informed approach to 

decision-making for environmental cleanup, and DOE may therefore be 

missing opportunities to reduce costs while also reducing environmental 

risks more quickly. Our recent work in this area has also identified 

opportunities where DOE may be able to save tens of billions of dollars.

As we have previously reported, DOE’s total reported environmental 

liability has generally increased over time. Since 1989, EM has spent over 

$164 billion to retrieve, treat, and dispose of nuclear and hazardous 

waste and, as of 2017, it had completed cleanup at 91 of 107 sites across 

the country (the 91 sites were generally viewed by DOE as the smallest 

and least contaminated sites to address). Despite billions spent on 

environmental cleanup, DOE’s environmental liability has roughly doubled 

from $176 billion in fiscal year 1997 to the fiscal year 2016 estimate of 

$372 billion.25 Between 2011 and 2016, EM spent $35 billion, primarily to 

treat and dispose of nuclear and hazardous waste and construct capital 

asset projects to treat the waste (see fig. 3 for EM’s annual spending and 

growing environmental liability). According to documents related to DOE’s 

 23GAO-17-317.

24Federal accounting standards require agencies responsible for cleaning up 

contamination to estimate future cleanup and waste disposal costs and to report such 

costs in their annual financial statements as environmental liabilities. Per federal 

accounting standards, federal agencies’ environmental liability estimates are to include 

probable and reasonably estimable costs of cleanup work. 

25We did not adjust environmental liability estimates for inflation because information 

about the amount of the liability applicable to each future fiscal year was not available.

DOE Annually 

Spends Billions on 

Cleanup, but the Cost 

of Its Environmental 

Liabilities Continues 

to Increase
Page 13 GAO-18-374T 

fiscal year 2016 financial statements, half of DOE’s environmental liability 

resides at two cleanup sites: the Hanford Site in Washington State and 

the Savannah River Site in South Carolina.

Figure 3: Department of Energy’s Office of Environmental Management’s Annual 

Spending and Growing Environmental Liability

Note: EM is the organization within the Department of Energy responsible for managing 

environmental cleanup and is responsible for cleaning up 107 sites across the country. To date, EM 

has completed cleanup at 91 of these sites. EM spending includes money to treat and dispose of 

nuclear and hazardous waste and to construct capital asset projects to treat the waste. We did not 

adjust environmental liability estimates for inflation because information about the amount of the 

liability applicable to each future fiscal year was not available.

In its fiscal year 2016 financial statement, DOE attributed recent 

environmental liability increases to (1) inflation adjustments for the current 

year; (2) improved and updated estimates for the same scope of work, 

including changes resulting from deferral or acceleration of work; (3) 

revisions in technical approach or scope for cleanup activities; and (4) 

regulatory and legal changes. Notably, in recent annual financial reports, 

DOE has cited other significant causes for increases in its liability. Other 
Page 14 GAO-18-374T 

causes have included the lack of a disposal path for high-level radioactive 

waste—because of the termination of the Yucca Mountain repository 

program—and delays and scope changes for major construction projects 

at the Hanford and Savannah River sites.

We also reported in February 2017 that DOE’s estimated liability does not 

include billions in expected costs.26 According to federal accounting 

standards, environmental liability estimates should include costs that are 

probable and reasonably estimable, meaning that costs that cannot yet 

be reasonably estimated should not be included in total environmental 

liability.27 Examples of costs that DOE cannot yet estimate include the 

following:

• DOE has not yet developed a cleanup plan or cost estimate for the 

Nevada National Security Site and, as a result, the cost of future 

cleanup of this site was not included in DOE’s fiscal year 2015 

reported environmental liability. The nearly 1,400-square-mile site has 

been used for hundreds of nuclear weapons tests since 1951. These 

activities have resulted in more than 45 million cubic feet of 

radioactive waste at the site. According to DOE’s financial statement, 

since DOE is not yet required to establish a plan to clean up the site, 

the costs for this work are excluded from DOE’s annually reported 

environmental liability.

• DOE’s reported environmental liability includes an estimate for the 

cost of a permanent nuclear waste repository, but these estimates are 

highly uncertain and likely to increase. In March 2015, in response to 

the termination of the Yucca Mountain repository program, DOE 

proposed separate repositories for defense high-level and commercial 

waste. In January 2017, we reported that the cost estimate for DOE’s 

new approach excluded the costs and time frames for site selection 

and site characterization.28 As a result, the full cost of these activities 

is likely billions of dollars more than what is reflected in DOE’s 

environmental liability. In our annual report on Fragmentation, 

Overlap, and Duplication in the federal government that we issued in 

 26GAO-17-317.

27Federal Accounting Standards Advisory Board, FASAB Handbook of Federal 

Accounting Standards and Other Pronouncements, as Amended (Washington, D.C.: June 

30, 2016).

28GAO, Nuclear Waste: Benefits and Costs Should Be Better Understood Before DOE 

Commits to a Separate Repository for Defense Waste, GAO-17-174 (Washington, D.C.: 

Jan. 31, 2017).
Page 15 GAO-18-374T 

May 2017, we reported that DOE may be able to save billions of 

dollars by reassessing the rationale for its March 2015 proposal.29 In 

June 2017, a bill that could result in renewed efforts to open the 

Yucca Mountain repository was introduced in the House of 

Representatives.30

In addition, according to the DOE Inspector General, DOE may have 

insufficient controls in place to accurately account for its environmental 

liabilities. In November 2016, the DOE Inspector General reported a 

significant deficiency in internal controls related to the reconciliation of 

environmental liabilities.31

Moreover, DOE does not consistently take a risk-informed decisionmaking approach to its environmental cleanup mission to more efficiently 

use resources. As our reports and those by other organizations issued 

over the last 2 decades have found, DOE’s environmental cleanup 

decisions have not been risk-based, and there have been inconsistencies 

in the regulatory approaches followed at different sites. We and others 

have pointed out that DOE needs to take a nation-wide, risk-based 

approach to cleaning up these sites, which could reduce costs while also 

reducing environmental risks more quickly.

• In 2006, the National Research Council reported that the nation’s 

approach to cleaning up nuclear waste—primarily carried out by 

DOE—was complex, inconsistent, and not systematically riskbased.32 For example, the National Research Council noted that the 

current regulatory structure for low-activity waste is based primarily on 

the waste’s origins rather than on its actual radiological risks. The 

National Research Council concluded that by working with regulators, 

public authorities, and local citizens to implement risk-informed 

 29GAO, 2017 Annual Report: Additional Opportunities to Reduce Fragmentation, Overlap, 

and Duplication and Achieve Other Financial Benefits, GAO-17-491SP (Washington, D.C.: 

Apr. 26, 2017).

30Nuclear Waste Policy Amendments Act of 2017, H.R. 3053, 115th Cong. (2017).

31The U.S. Department of Energy Office of the Inspector General, The Department of 

Energy’s Fiscal Year 2016 Consolidated Financial Statements, OAI-FS-17-02 

(Washington, D.C.: November 15, 2016). 

32National Research Council of the National Academies, Improving the Regulation and 

Management of Low-Activity Radioactive Wastes (Washington, D.C.: National Academies 

Press, 2006).
Page 16 GAO-18-374T 

practices, waste cleanup efforts can be done more cost-effectively. 

The report also suggested that statutory changes were likely needed.

• In 2015, a review organized by the Consortium for Risk Evaluation 

with Stakeholder Participation reported that DOE was not optimally 

using available resources to reduce risk.33 According to the report, 

factors such as inconsistent regulatory approaches and certain 

requirements in federal facility agreements caused disproportionate 

resources to be directed at lower-priority risks. The report called for a 

more systematic effort to assess and rank risks within and among 

sites, including through headquarters guidance to sites, and to 

allocate federal taxpayer monies to remedy the highest priority risks 

through the most efficient means.

• In May 2017, we reported on DOE’s efforts to treat a significant 

portion of the waste in underground tanks at the Hanford Site.34 We 

found that DOE chose different approaches to treat the less 

radioactive portion of its tank waste—which DOE refers to as “lowactivity waste” (LAW)—at the Hanford and Savannah River Sites. At 

the Savannah River Site, DOE has grouted about 4 million gallons of 

LAW since 2007. DOE plans to treat a portion of the Hanford Site’s 

LAW with vitrification, but it has not yet treated any of Hanford’s LAW 

and faces significant unresolved technical challenges in doing so.35 In 

addition, we found that the best available information indicates that 

DOE’s estimated costs to grout LAW at the Savannah River Site are 

substantially lower than its estimated costs to vitrify LAW at Hanford, 

and DOE may be able to save tens of billions of dollars by 

reconsidering its waste treatment approach for a portion of the LAW at 

Hanford. Moreover, according to experts that attended a meeting we 

convened with the National Academies of Sciences, Engineering, and 

Medicine, both vitrification and grout could effectively treat Hanford’s 

LAW. Experts at our meeting also stated that developing updated 

information on the effectiveness of treating a portion of Hanford’s 

 33The Consortium for Risk Evaluation with Stakeholder Participation is a multi-university 

consortium organized in 1995 that provides several types of independent, multidisciplinary reviews of DOE documents, projects, and reports. See: Omnibus Risk Review 

Committee, A Review of the Use of Risk-Informed Management in the Cleanup Program 

for Former Defense Nuclear Sites (August 2015).

34About 90 percent of the waste at Hanford is considered to be low-activity, meaning that 

it is much less radioactive than high-level waste. See GAO, Nuclear Waste: Opportunities 

Exist to Reduce Risks and Costs by Evaluating Different Waste Treatment Approaches at 

Hanford, GAO-17-306 (Washington, D.C.: May 3, 2017).

35Grout immobilizes waste in a concrete-like mixture. Vitrification immobilizes waste in 

glass.
Page 17 GAO-18-374T 

waste, called supplemental LAW, with other methods, such as grout, 

may enable DOE to consider waste treatment approaches that would 

accelerate DOE’s tank waste treatment mission, thereby potentially 

reducing certain risks and lifecycle treatment costs. We recommended 

that DOE (1) develop updated information on the performance of 

treating supplemental LAW with alternate methods, such as grout, 

before it selects an approach for treating supplemental LAW; and (2) 

have an independent entity develop updated information on the 

lifecycle costs of treating Hanford’s supplemental LAW with alternate 

methods. DOE agreed with both recommendations.

Since 1994, we have made at least 28 recommendations related to 

addressing the federal government’s environmental liability to DOE and 

others and 4 suggestions to Congress to consider changes to the laws 

governing cleanup activities. Of these, 13 recommendations remain 

unimplemented. If implemented, these steps would improve the 

completeness and reliability of the estimated costs of future federal 

cleanup responsibilities and lead to more risk-based management of the 

cleanup work.36 We believe these recommendations are as relevant, if not 

more so, today.

The Secretary of Energy has taken several important steps that 

demonstrate DOE’s commitment to improving management of contracts 

and projects. However, our recent work indicates that, even with these 

efforts, NNSA and EM continue to face long-standing challenges in 

several areas.

As we noted in our 2017 high-risk report, DOE has made progress in its 

contract and project management. DOE continued to meet the criterion 

for demonstrating a strong commitment and top leadership support for 

improving project management.37 The Secretary of Energy issued two 

 36We have ongoing work examining the consistency of DOE’s compliance agreements,

looking specifically at the extent to which milestones within select compliance agreements 

are tailored to the environmental and human health risks that DOE is faced with 

addressing and the extent to which DOE’s cleanup remedies are based on up-to-date 

assessments of conditions at sites and of DOE’s technical capabilities.

37GAO-17-317. 

DOE Has Taken 

Steps to Improve 

Management of 

Contracts, Projects, 

and Programs, but 

Challenges Remain

DOE Has Made Progress 

in Managing Contracts 

and Projects
Page 18 GAO-18-374T 

memorandums, in December 2014 and June 2015, that lay out a series of 

changes to policies and procedures to improve project management. 

These changes were included in DOE’s revised project management 

order, DOE Order 413.3B, issued in May 2016. As noted in the 

memorandums, some of these changes are in response to 

recommendations we made in prior years, such as requiring that projects 

develop cost estimates and analyses of alternatives according to our best 

practices.

DOE also made significant efforts to improve its performance in 

monitoring and independently validating the effectiveness and 

sustainability of corrective measures and now partially meets our 

monitoring criterion for removing agencies and program areas from our 

High-Risk List. For example, the Secretary improved the department’s 

senior-level monitoring capability. The Secretary strengthened the Energy 

Systems Acquisition Advisory Board by changing it from an ad hoc body 

to an institutionalized board responsible for reviewing all capital asset 

projects with a total project cost of $100 million or more. The Secretary 

also created the Project Management Risk Committee, which includes 

senior DOE officials and is chaired by a new departmental position—the 

Chief Risk Officer. The committee is chartered to assess the risks of 

projects across DOE and advise DOE senior leaders on cost, schedule, 

and technical issues for projects.38

DOE’s recent efforts do not address several areas where it continues to 

have challenges including (1) acquisition planning for its major contracts, 

(2) the quality of enterprise-wide cost information available to DOE 

managers and key stakeholders, (3) program and project management, 

and (4) major legacy projects.

As we have previously reported, during the acquisition-planning phase for 

contracts, DOE makes critical decisions that have significant implications 

 38As we stated in our 2017 High-Risk List update, additional time is needed for us to 

assess how effectively these recent monitoring improvements will validate the 

sustainability of corrective measures. We have not yet evaluated the operations of the 

newly created Project Management Risk Committee. In addition, DOE’s new oversight 

and monitoring efforts are not comprehensive, as certain activities within EM are not 

subject to review by the committee, even though together they cost billions of dollars and 

last for numerous years. Finally, the effectiveness of DOE’s monitoring of its contracts, 

projects, and programs depends upon the availability of reliable enterprise-wide cost 

information on which to base oversight activities. See GAO-17-317.

Challenges Persist in 

Several Areas

Acquisition Planning for Major 

Contracts
Page 19 GAO-18-374T 

for the cost and overall success of an acquisition. The size and duration 

of DOE’s management and operating (M&O) contracts39—22 M&O 

contracts with an average potential duration of 17 years, representing 

almost three-quarters of DOE’s spending in fiscal year 2015—underscore 

the importance of planning for every M&O acquisition. In August 2016, we 

examined DOE’s use of M&O contracts.40 According to DOE officials we 

interviewed at that time, one of the primary reasons DOE uses M&O 

contracts is because they are easier to manage with fewer DOE 

personnel because they are less frequently competed and have broadly 

written scopes of work, among other attributes. We found that DOE did 

not consider acquisition alternatives beyond continuing its long-standing 

M&O contract approach for 16 of its 22 M&O contracts. We concluded 

that without considering broader alternatives in the acquisition planning 

phase, DOE cannot ensure that it is selecting the most effective scope 

and form of contract, raising risks for both contract cost and performance. 

We recommended in our August 2016 report that DOE establish a 

process to analyze and apply its experience with contracting alternatives. 

DOE generally concurred with our recommendation, and, in November 

2016, issued updated guidance requiring acquisition planning documents 

to contain a thorough discussion of alternatives beyond simply extending 

or competing M&O contracts.

41

We have previously reported that the effectiveness of DOE’s monitoring 

of its contracts, projects, and programs depends upon the availability of 

reliable enterprise-wide cost information on which to base oversight 

activities. For example, reliable enterprise-wide cost information is 

needed to identify the cost of activities, ensure the validity of cost 

estimates, and provide information to Congress to make budgetary 

decisions. However, we have found that meaningful cost analyses across 

programs, contractors, and sites are not usually possible because 

 39M&O contracts are agreements under which the government contracts for the operation, 

maintenance, or support, on its behalf, of a government-owned or government-controlled 

research, development, special production, or testing establishment wholly or principally 

devoted to one or more of the major programs of the contracting federal agency. Federal 

Acquisition Regulation § 17.601.

40GAO, Department of Energy: Actions Needed to Strengthen Acquisition Planning for 

Management and Operating Contracts, GAO-16-529 (Washington, D.C.: Aug. 9, 2016).

41We currently have four ongoing reviews related to contract management, including (1) 

performance management of DOE’s management and operating contracts, (2) DOE and 

NNSA’s subcontractor management, (3) NNSA’s contract document management, and (4) 

NNSA’s support service contracts.

Quality of Enterprise-Wide 

Cost Information
Page 20 GAO-18-374T 

NNSA’s contractors use different methods of accounting for and tracking 

costs. NNSA developed a plan to improve and integrate its cost reporting 

structures; however, we found in January 2017 that this plan did not 

provide a useful road map for guiding NNSA’s effort.42 For example, we 

found that NNSA did not define strategies and identify resources needed 

to achieve its goals, which is a leading practice for strategic planning. 

NNSA’s plan contained few details on the elements it must include, such 

as its feasibility assessment, estimated costs, expected results, and an 

implementation timeline. We concluded that, until a plan is in place that 

incorporates leading strategic planning practices, NNSA cannot be 

assured that its efforts will result in a cost collection tool that produces 

reliable enterprise-wide cost information that satisfies the information 

needs of Congress and program managers. We recommended that 

NNSA develop a plan for producing cost information that fully 

incorporates leading planning practices. NNSA agreed with our 

recommendation.

In addition, as we have previously noted, quality data are needed for DOE 

to manage its risk of fraud. The Fraud Reduction and Data Analytics Act 

of 2015 establishes requirements aimed at improving federal agencies’

controls and procedures for assessing and mitigating fraud risks through 

the use of data analytics.43 In a March 2017 report, however, we found 

that because DOE does not require its contractors to maintain sufficiently 

detailed transaction-level cost data that are reconcilable with amounts 

charged to DOE, it is not well positioned to employ data analytics as a 

fraud detection tool.44 We found that the data were not suitable either 

because they were not for a complete universe of transactions that was 

reconcilable with amounts billed to DOE or because they were not 

sufficiently detailed to determine the nature of costs charged to DOE. We 

concluded that, without requiring contractors to maintain such data, DOE 

will not be well positioned to meet the requirements of the Fraud 

Reduction and Data Analytics Act of 2015 and manage its risk of fraud 

and other improper payments. We recommended that DOE require 

 42GAO, National Nuclear Security Administration: A Plan Incorporating Leading Practices 

Is Needed to Guide Cost Reporting Improvement Effort, GAO-17-141 (Washington, D.C.: 

Jan. 19, 2017).

43Data analytics enable an organization to analyze transactional data to obtain insights 

into the operating effectiveness of internal controls and to identify improper cost charges, 

potential indicators of fraud, or actual fraudulent payments or activities.

44GAO, Department of Energy: Use of Leading Practices Could Help Manage the Risk of 

Fraud and Other Improper Payments, GAO-17-235 (Washington, D.C.: Mar. 30, 2017).
Page 21 GAO-18-374T 

contractors to maintain sufficiently detailed transaction-level cost data that 

are reconcilable with amounts charged to the government.

DOE did not concur with our recommendation. This is because, according 

to DOE, the recommendation establishes agency-specific requirements 

for DOE contractors that are more prescriptive than current federal 

requirements and that its M&O contractors, not DOE, are responsible for 

performing data analytics and determining what data are needed to do so. 

DOE’s response to our recommendation is concerning because it 

demonstrates that DOE does not fully appreciate its responsibility for 

overseeing contractor costs. We believe that the use of data-analytic 

techniques by DOE employees could help mitigate some of the 

challenges that limit the effectiveness of DOE’s approach for overseeing 

M&O contractor costs. However, effectively applying data-analytics 

depends on the availability of complete and sufficiently detailed contractor 

data. Therefore, by implementing our recommendation DOE could take 

the important steps necessary to require contractors maintain sufficiently 

detailed transaction-level cost data that are reconcilable with amounts 

charged to the government.

Although, as mentioned previously, DOE has taken some steps to 

improve program and project management, our recent work has shown 

that DOE continues to face several challenges in these areas. Specifically 

on program management:

• In November 2017, we found that NNSA had established program 

management requirements, such as developing cost and schedule 

estimates for its uranium, plutonium, tritium, and lithium programs and 

had established managers’ roles and responsibilities for these 

programs.45 However, officials told us that the programs had not fully 

met these requirements primarily because of staff shortages. We 

recommended that NNSA determine the critical staff skills it will need 

for these programs and use that information to address staffing 

shortages. NNSA agreed with our recommendation.46

 45GAO, Nuclear Weapons: NNSA Needs to Determine Critical Skills and Competencies 

for Its Strategic Materials Programs, GAO-18-99 (Washington, D.C.: Nov. 14, 2017). 

46We have ongoing work on NNSA’s enriched uranium program and its efforts to extend 

the supply of enriched uranium for tritium production, including reviewing NNSA’s plans 

and cost estimates of potential options.

Program and Project 

Management
Page 22 GAO-18-374T 

• In a September 2017 report on the NNSA’s uranium program, we 

found that NNSA had not developed a complete scope of work, a lifecycle cost estimate, or an integrated master schedule for the overall 

uranium program—all of which are considered leading practices—and 

it had no time frame for doing so.47 We reported that NNSA plans to 

do so for the specific Uranium Processing Facility project,48 as 

required by DOE’s project management order. However, NNSA had 

not developed a complete scope of work for key program 

requirements, including important and potentially costly repairs and 

upgrades to existing buildings in which NNSA intends to house some 

uranium processing capabilities. We concluded that because NNSA 

had not developed a complete scope of work for the overall uranium 

program, it did not have the basis to develop a life-cycle cost estimate 

or an integrated master schedule for the entire uranium program, 

which runs counter to best practices identified in GAO’s cost 

estimating and scheduling guides. We recommended that NNSA set a 

time frame for completing the scope of work, life-cycle cost estimate, 

and integrated master schedule for the overall uranium program. 

NNSA generally agreed with this recommendation and has ongoing 

efforts to complete these actions.

• In September 2017, we found that DOE’s program to re-establish the 

production of a plutonium isotope used to provide electrical power for 

the National Aeronautics and Space Administration missions had 

made progress but that it faced a number of technical and 

organizational challenges to meeting production goals.49 Specifically, 

 47GAO, Modernizing the Nuclear Security Enterprise: A Complete Scope of Work Is 

Needed to Develop Timely Cost and Schedule Information for the Uranium Program, 

GAO-17-577 (Washington, D.C.: Sept. 8, 2017). The scope of work reflects all activities as 

defined in the program’s work breakdown structure, which defines in detail the work 

necessary to accomplish a project’s objectives. A life-cycle cost estimate provides an 

exhaustive and structured accounting of all resources and associated cost elements 

required to develop, produce, deploy, and sustain a particular program. An integrated 

master schedule is a document that integrates the planned work, the resources necessary 

to accomplish that work, and the associated budget for a program, as called for in best 

practices. 

48In 2004, NNSA initiated plans for the construction of a new Uranium Processing Facility, 

a more modern facility that would consolidate some of its uranium processing facilities—

located at the Y-12 National Security Complex in Oak Ridge, Tennessee, and built in the 

1940s and 1950s—which are outdated and deteriorating, into a single, more modern 

facility that would consolidate Y-12’s uranium processing capabilities into a single facility.

49GAO, Space Exploration: DOE Could Improve Planning and Communication Related to 

Plutonium-238 and Radioisotope Power Systems Production Challenges, GAO-17-673 

(Washington, D.C.: Sept. 8, 2017). 
Page 23 GAO-18-374T 

we found that NNSA had not developed an implementation plan that 

identifies milestones and interim steps that can be used to 

demonstrate progress in meeting production goals. Our prior work has 

shown that plans that include milestones and interim steps help an 

agency to set priorities, use resources efficiently, and monitor 

progress in achieving agency goals. In our September 2017 report, 

we made three recommendations, including that DOE develop such a 

plan for its plutonium isotope production approach and that DOE 

assess the long-term effects of known production challenges and 

communicate these effects to the National Aeronautics and Space 

Administration. DOE concurred with our recommendations.

Our prior work also demonstrates that DOE continues to face project 

management challenges in terms of having reliable performance data or 

conducting reliable analyses of alternatives. Specifically,

• In a January 2018 report, we found management challenges 

associated with NNSA’s life extension programs (LEP).50 For 

example, we found that NNSA had begun implementing requirements 

for using earned value management (EVM) 51—a tool used across 

industry and government for conducting cost and schedule 

performance analysis—in three LEPs, but it had not adopted a key 

best practice that could help the agency better manage risk for LEPs. 

Specifically, we found that NNSA does not require an independent 

team to validate the EVM systems used by NNSA’s contractors for 

LEPs against the national EVM standard. We concluded that without 

requiring validation of EVM systems, NNSA may not have assurance 

that its LEPs are obtaining reliable EVM data for managing their 

programs and reporting their status. We recommended that NNSA 

require an independent team to validate contractor EVM systems 

used for LEPs. NNSA agreed with our recommendation but stated 

that it already relies on a DOE project management office to 

independently validate contractor EVM systems. However, as we 

reported, DOE has not independently validated contractor EVM 

systems at six of the seven contractor sites that are responsible for 

conducting LEP activities.

 50GAO, Nuclear Weapons: NNSA Should Adopt Additional Best Practices to Better 

Manage Risk for Life Extension Programs, GAO-18-129 (Washington, D.C.: Jan. 30, 

2018).

51EVM measures the value of work accomplished in a given period and compares it with 

the planned value of work scheduled for that period and the actual cost of work 

accomplished. 
Page 24 GAO-18-374T 

• In May 2015, we reported that DOE initiated a new project, the Low 

Activity Waste Pretreatment System project,52 to accelerate waste 

treatment at Hanford.53 We found that this project was selected on the 

basis of similar past proposals without consideration of other 

potentially viable alternatives, contrary to requirements in DOE’s 

project management order. We also reported that DOE’s cost and 

schedule estimates for completion of the project were not conducted 

according to best practices and were therefore not reliable. We 

recommended that DOE re-evaluate alternatives and that it revise the 

cost and schedule estimates in line with best practices. DOE generally 

agreed with our recommendations but not some of the conclusions. In 

September 2017, amid concerns about project cost growth and 

schedule delays, DOE directed the contractor to conduct a new 

analysis of alternatives to identify options that will allow the project to 

be completed within current cost and schedule estimates. The 

department has suspended work on the project pending a decision on 

its design.

We will continue to monitor EM’s management and oversight of its 

operations activities and DOE’s risk-informed cleanup decisions to 

address environmental liabilities, as part of our ongoing work for this 

subcommittee.

As previously mentioned, in response to a 2015 memorandum on project 

management policies from the Secretary of Energy, DOE instituted 

project management reforms that—if fully implemented—will help ensure 

that future projects are not affected by the challenges that have persisted 

for DOE’s major legacy projects. Although DOE has taken action on 

certain major projects, we found that it has not consistently applied these 

reforms, and in particular, DOE has not applied such reforms to its largest 

legacy cleanup project at its Hanford Site in Washington state. As we 

found in a May 2015 report, DOE continues to allow construction of 

certain Waste Treatment and Immobilization Plant (WTP) facilities at 

DOE’s Hanford Site before designs are 90 percent complete.54 This 

 52The Low Activity Waste Pretreatment System will receive and treat radioactive liquid 

waste from the radioactive waste tanks in preparation for direct-feed to the Waste 

Treatment Plant’s Low Activity Waste facility. 

53GAO, Hanford Waste Treatment: DOE Needs to Evaluate Alternatives to Recently 

Proposed Projects and Address Technical and Management Challenges, GAO-15-354 

(Washington, D.C.: May 7, 2015). 

54GAO-15-354. The WTP is DOE’s current planned approach to treating some of 

Hanford’s radioactive tank waste.

Major Legacy Projects
Page 25 GAO-18-374T 

contrasts with DOE’s revised project management order that now 

requires a facility’s design to be at least 90 percent complete before 

establishing cost and schedule baselines and cost and schedule 

estimates that meet industry best practices. The WTP is DOE’s largest 

project, and it has faced numerous technical and management challenges 

that have added decades to its schedule and billions of dollars to its cost. 

We recommended in May 2015 that DOE (1) consider whether to limit 

construction on the WTP until risk mitigation strategies are developed to 

address known technical challenges, and (2) determine the extent to 

which the quality problems exist, in accordance with its quality assurance 

policy, for the facilities’ systems that have not been reviewed to determine 

if additional vulnerabilities exist. However, as of September 2016, DOE 

had not yet implemented our recommendations. In December 2016, DOE 

announced that the cost estimate for one portion of the WTP—the part 

needed to treat a fraction of the low-activity waste—had increased to 

nearly $17 billion.55 We are currently in the process of completing a report 

on DOE’s WTP quality assurance program.

Our previous work has found that NNSA also faces challenges 

implementing its nonproliferation programs under its Office of Defense 

Nuclear Nonproliferation (DNN), which implements nuclear 

nonproliferation programs worldwide. In recently completed reviews of 

DNN programs, we have identified several challenges NNSA faces in how 

it measures performance and conducts program management of these 

efforts. Specifically,

• In September 2017, we found that four DNN programs did not have 

schedule and cost estimates covering their planned life cycles and did 

not measure performance against schedule and cost baselines as is 

recommended by program management leading practices.56 NNSA 

 55This cost estimate does not include the costs for a majority of the WTP’s waste 

treatment scope, including high-level waste treatment. In light of longstanding challenges 

with major projects, such as with the WTP, we believe DOE must begin to apply project 

management reforms to the projects that need them the most. We also have ongoing work 

examining the Mixed Oxide Fuel Fabrication Facility, the Uranium Processing Facility, and 

the Waste Treatment and Immobilization Plant.

56GAO, Nuclear Nonproliferation: NNSA Needs to Improve Its Program Management 

Policy and Practices, GAO-17-773 (Washington, D.C.: Sept. 28, 2017). We reviewed the 

following four selected DNN programs: Nuclear Material Removal, Highly Enriched 

Uranium Reactor Conversion, Radiological Security, and the International Nuclear 

Security.

NNSA’s 

Nonproliferation 

Program Faces 

Performance 

Measurement and 

Program 

Management 

Challenges
Page 26 GAO-18-374T 

officials explained that in general this is due in part to high levels of 

uncertainty in planning the selected programs’ work scope or 

schedules, particularly in working with partner countries; however, we 

noted that uncertainty should not prevent these programs from 

establishing more complete or longer-term estimates to account for 

the time and resources they need to achieve their goals and track 

their performance. In addition, we observed that DOE’s cost 

estimating guide, which applies to NNSA programs, describes 

approaches for programs to incorporate risk and uncertainty in 

estimates. But we found that DNN’s program management policy, 

which was updated in February 2017, did not outline requirements for 

programs to establish life-cycle estimates or measure performance 

against schedule and cost baselines. We recommended that DNN 

revise its program management policy to require DNN programs to 

follow life-cycle program management, such as requiring life-cycle 

estimates and measuring against baselines. Updating the DNN policy 

to include requirements and guidance on cost estimating and tracking 

performance against schedule and cost baselines could help ensure 

that NNSA managers and Congress have better information on (1) 

how much DNN programs may cost, (2) the time they may need to 

achieve their goals, and (3) how effectively they are being executed 

compared to plans. Although NNSA neither agreed nor disagreed with 

the recommendation, it indicated that it plans to take action to revise 

its policy to address the recommendation.

• In February 2017, we found that NNSA was unable to demonstrate 

the full results of its research and development technology for 

preventing nuclear proliferation.57 Specifically, we reported that DNN’s 

Research and Development program did not consistently track and 

document projects that result in technologies being transitioned or 

deployed. Furthermore, we found that DNN’s Research and 

Development project performance was difficult to interpret because 

the program’s performance measures did not define criteria or provide 

context justifying how the program determined that it met its targets.

We concluded that this, in turn, could hinder users’ ability to determine 

the program’s progress. NNSA officials said that final project reports 

did not document their assessment of performance against baseline 

 57GAO, Nuclear Nonproliferation: Better Information Needed on Results of National 

Nuclear Security Administration’s Research and Technology Development Projects, 

GAO-17-210 (Washington, D.C.: Feb. 3, 2017). A transitioned technology is provided to 

users outside of the project team for further development or deployment. A deployed 

technology is one that is being actively used in the field by a federal agency or foreign 

partner. 
Page 27 GAO-18-374T 

targets and that there was no common template for final project 

reports. We noted that documenting assessments that compare final 

project performance results against baseline targets for scope of work 

and completion date could enhance NNSA’s ability to manage its 

programs in accordance with these standards. We also concluded 

that more consistently tracking and documenting the transitioned and 

deployed technologies that result from DNN’s projects could also 

facilitate knowledge sharing within DNN. This would also provide a 

means by which to present valuable information to Congress and 

other decision makers about the programs’ results and overall value. 

We recommended that NNSA consistently track and document results 

of DNN Research and Development projects and document 

assessments of final project results against baseline performance 

targets. NNSA agreed to take actions in response to both 

recommendations.

• In June 2016, we found that the Nuclear Smuggling Detection and 

Deterrence (NSDD) program had developed a program plan but that 

the plan did not include measurable goals and performance measures 

aligned to the goals.58 As a result, we concluded that the NSDD 

program may not be able to determine when it has fully accomplished 

its mission and risked continuing to deploy equipment past the point of 

diminishing returns. We recommended that NSDD develop a more 

detailed pr ogram plan that articulates when and how it will achieve its 

goals, including completing key activities, such as the deployment of 

radiation detection equipment to partner countries. NNSA agreed with 

this recommendation.

Chairman Upton, Ranking Member Rush, and Members of the 

Subcommittee, this completes my prepared statement. I would be 

pleased to respond to any questions you may have at this time.

 58GAO, Combating Nuclear Smuggling: NNSA’s Detection and Deterrence Program is 

Addressing Challenges but Should Improve Its Program Plan, GAO-16-460 (Washington, 

D.C.: Jun. 17, 2016).
Page 28 GAO-18-374T 

If you or your staff members have any questions about this testimony, 

please contact me at (202) 512-3841 or trimbled@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this statement. GAO staff who made key 

contributions to this testimony are Nico Sloss, Assistant Director; Nathan 

Anderson; Allison Bawden; Natalie Block; Mark Braza; Antoinette 

Capaccio; Jenny Chow; Ricki Gaber; Jonathan Gill; William Hoehn; 

Cristian Ion; Amanda Kolling; and Diane LoFaro.

GAO Contact and 

Staff 

Acknowledgements
Related GAO Products

Page 29 GAO-18-374T 

The following is a selection of GAO’s recent work assessing the 

Department of Energy’s management efforts, including at the National 

Nuclear Security Administration and at the Office of Environmental 

Management:

Nuclear Weapons: NNSA Should Adopt Additional Best Practices to 

Better Manage Risk for Life Extension Programs. GAO-18-129. 

Washington, D.C.: January 30, 2018.

Nuclear Weapons: NNSA Needs to Determine Critical Skills and 

Competencies for Its Strategic Materials Programs. GAO-18-99. 

Washington, D.C.: November 14, 2017.

Nuclear Nonproliferation: NNSA Needs to Improve Its Program 

Management Policy and Practices. GAO-17-773. Washington, D.C.: 

September 28, 2017.

Modernizing the Nuclear Security Enterprise: A Complete Scope of Work 

Is Needed to Develop Timely Cost and Schedule Information for the 

Uranium Program. GAO-17-577. Washington, D.C.: September 8, 2017.

Space Exploration: DOE Could Improve Planning and Communication 

Related to Plutonium-238 and Radioisotope Power Systems Production 

Challenges. GAO-17-673. Washington, D.C.: September 8, 2017.

Nuclear Waste: Opportunities Exist to Reduce Risks and Costs by 

Evaluating Different Waste Treatment Approaches at Hanford. 

GAO-17-306. Washington, D.C.: May 3, 2017.

2017 Annual Report: Additional Opportunities to Reduce Fragmentation, 

Overlap, and Duplication and Achieve Other Financial Benefits. 

GAO-17-491SP. Washington, D.C.: April 26, 2017.

National Nuclear Security Administration: Action Needed to Address 

Affordability of Nuclear Modernization Programs. GAO-17-341. 

Washington, D.C.: April 26, 2017.

Department of Energy: Use of Leading Practices Could Help Manage the 

Risk of Fraud and Other Improper Payments. GAO-17-235. Washington, 

D.C.: March 30, 2017.

Related GAO Products
Related GAO Products

Page 30 GAO-18-374T 

High-Risk Series: Progress on Many High-Risk Areas, While Substantial 

Efforts Needed on Others. GAO-17-317. Washington, D.C.: February 15, 

2017.

Nuclear Nonproliferation: Better Information Needed on Results of 

National Nuclear Security Administration’s Research and Technology 

Development Projects. GAO-17-210. Washington, D.C.: February 3, 

2017.

Nuclear Waste: Benefits and Costs Should Be Better Understood Before 

DOE Commits to a Separate Repository for Defense Waste. 

GAO-17-174.Washington, D.C.: January 31, 2017.

National Nuclear Security Administration: A Plan Incorporating Leading 

Practices Is Needed to Guide Cost Reporting Improvement Effort. 

GAO-17-141. Washington, D.C.: January 19, 2017.

Program Management: DOE Needs to Develop a Comprehensive Policy 

and Training Program. GAO-17-51. Washington, D.C.: November 21, 

2016.

Department of Energy: Actions Needed to Strengthen Acquisition 

Planning for Management and Operating Contracts. GAO-16-529. 

Washington, D.C.: August 9, 2016.

DOE Project Management: NNSA Needs to Clarify Requirements for Its 

Plutonium Analysis Project at Los Alamos. GAO-16-585. Washington, 

D.C.: August 9, 2016.

Orion Multi-Purpose Crew Vehicle: Action Needed to Improve Visibility 

into Cost, Schedule, and Capacity to Resolve Technical Challenges. 

GAO-16-620. Washington, D.C.: July 27, 2016.

Department of Energy: Whistleblower Protections Need Strengthening. 

GAO-16-618. Washington, D.C.: July 11, 2016.

Combating Nuclear Smuggling: NNSA’s Detection and Deterrence 

Program Is Addressing Challenges but Should Improve Its Program Plan. 

GAO-16-460. Washington, D.C.: June 17, 2016.

Modernizing the Nuclear Security Enterprise: NNSA’s Budget Estimates 

Increased but May Not Align with All Anticipated Costs. GAO-16-290. 

Washington, D.C.: March 4, 2016.
Related GAO Products

Page 31 GAO-18-374T 

Weapons System Acquisitions: Opportunities Exist to Improve the 

Department of Defense’s Portfolio Management. GAO-15-466. 

Washington, D.C.: August 27, 2015.

Hanford Waste Treatment: DOE Needs to Evaluate Alternatives to 

Recently Proposed Projects and Address Technical and Management 

Challenges. GAO-15-354. Washington, D.C.: May 7, 2015.

DOE and NNSA Project Management: Analysis of Alternatives Could Be 

Improved by Incorporating Best Practices. GAO-15-37. Washington, D.C.: 

December 11, 2014.

Modernizing the Nuclear Security Enterprise: NNSA’s Budget Estimates 

Do Not Fully Align with Plans. GAO-14-45. Washington, D.C.: December 

11, 2013.

Commercial Nuclear Waste: Effects of a Termination of the Yucca 

Mountain Repository Program and Lessons Learned. GAO-11-229. 

Washington, D.C.: April 8, 2011.

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