NATIONAL NUCLEAR 

SECURITY 

ADMINISTRATION

Action Needed to 

Address Affordability 

of Nuclear 

Modernization 

Programs

Report to Congressional Committees

April 2017

GAO-17-341

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-341, a report to 

congressional committees

April 2017

NATIONAL NUCLEAR SECURITY 

ADMINISTRATION

Action Needed to Address Affordability of Nuclear 

Modernization Programs

What GAO Found

The National Nuclear Security Administration’s (NNSA) overall nuclear 

modernization budget materials and plans for the next 25 years, as presented in 

the Fiscal Year 2017 Stockpile Stewardship and Management Plan, differ little 

from those in the fiscal year 2016 plan. Specifically, 

• Budget estimates in the fiscal year 2017 plan increased about 1 percent over 

the 2016 plan in nominal terms, which is similar to the overall budget 

increases in the fiscal year 2016 plan compared to the fiscal year 2015 plan. 

• Specific budget estimates changed to a greater degree for certain program 

areas and individual programs. For example, changes in NNSA’s 

modernization estimates varied across the four program areas that make up 

the Weapons Activities appropriations account: stockpile; infrastructure; 

research, development, testing, and evaluation; and other weapons activities. 

• Changes were made in the 25-year budget estimates for the Weapons 

Activities account as well as at the program level. Reasons for changes 

include movement of program funding to other areas. For example, the 

infrastructure area funding decreased 2.7 percent from fiscal year 2016 to 

fiscal year 2017, in part because about $6.5 billion in strategic materials

sustainment funding was moved from the infrastructure area to the stockpile 

area.

In some cases, NNSA’s fiscal year 2017 nuclear security budget materials do not 

align with the agency’s modernization plans, both within the 5-year Future-Years 

Nuclear Security Program (FYNSP)—fiscal years 2017 through 2021—and 

beyond, raising concerns about the affordability of NNSA’s planned portfolio of 

modernization programs. In particular, for some weapons refurbishments, the 

low end of NNSA’s cost range estimates exceeds the estimates in the budget 

materials. For example, the W80-4 program’s low-range cost estimate for fiscal 

year 2017 exceeds the budget estimate by about $26.9 million. In addition, the 

budget estimates for some modernization programs for fiscal years 2018 through 

2021 are more than $5 billion below the funding levels NNSA has identified 

needing. If these needs are not met, NNSA may have to defer certain 

modernization work. Further, NNSA’s budget estimates for fiscal years 2022 

through 2026 may exceed out-year funding projections in the President’s budget 

for those same years. GAO identified a similar funding gap in the prior year’s 

budget materials. NNSA’s fiscal year 2017 plan concludes that the modernization 

program is generally affordable in the years beyond the FYNSP, but this 

conclusion is optimistic, and the NNSA plan does not assess options to align 

future modernization plans and budgets with or without out-year funding 

increases. Portfolio management best practices developed by the Project 

Management Institute state that organizations can optimize their portfolios of 

programs and projects by assessing their capability and capacity to finance 

specific portfolio components; determining which portfolio components should 

receive the highest priority; and identifying components to be suspended, 

reprioritized, or terminated. By including an assessment of the affordability of its 

portfolio of modernization programs in future Stockpile Stewardship and 

Management Plans, NNSA could develop a plan that could bring its estimates of 

modernization funding needs into alignment with potential future budgets.

View GAO-17-341. For more information, 

contact David C. Trimble, (202) 512-3841, 

trimbled@gao.gov

Why GAO Did This Study

To ensure that the nation’s existing 

nuclear weapons remain safe and 

reliable, the 2010 Nuclear Posture 

Review identified a set of long-term 

modernization goals for the nation’s 

nuclear weapons stockpile that include 

sustaining a safe, secure, and effective 

nuclear arsenal and investing in a 

modern infrastructure. NNSA, which is

responsible for the stockpile, is 

charged with carrying out these goals.

The National Defense Authorization 

Act for Fiscal Year 2011 includes a 

provision for GAO to report annually on 

NNSA’s nuclear security budget 

materials. This is the sixth year that 

GAO has undertaken work in response 

to this provision. This report assesses 

the extent to which NNSA's fiscal year 

2017 nuclear security budget materials 

(1) differ, if at all, from its budget 

estimates and plans for modernization 

activities as presented in its fiscal year 

2016 budget materials and (2) align 

with NNSA’s modernization plans.

GAO analyzed NNSA’s fiscal year 

2016 and 2017 nuclear security budget 

materials associated with those years’

Stockpile Stewardship and 

Management Plans, and interviewed 

officials from NNSA and the Office of 

Management and Budget.

What GAO Recommends

GAO recommends that NNSA include 

an assessment of the affordability of its

portfolio of modernization programs in 

future versions of the Stockpile 

Stewardship and Management Plan.

NNSA did not explicitly agree or 

disagree with the recommendation. 

GAO continues to believe that the 

recommendation is valid, as discussed 

in this report.
Page i GAO-17-341 National Nuclear Security Administration

Letter 1

Background 7

NNSA’s Overall 2017 Budget Materials and Plans for 

Modernization Differ Little from 2016 Budget Materials and 

Plans, but Estimates for Certain Programs Changed to a 

Greater Degree 11

Misalignment between Estimates in NNSA’s Budget Materials and 

Modernization Plans Raises Affordability Concerns 20

Conclusions 40

Recommendation for Executive Action 41

Agency Comments and Our Evaluation 41

Appendix I Objectives, Scope, and Methodology 47

Appendix II Information on Life Extension Program and Alteration Budget 

Estimates and Cost Ranges as of Fiscal Year 2017 51

Appendix III Schedule Changes for Major Modernization Efforts for 

Fiscal Years 2010 through 2017 60

Appendix IV Comments from the National Nuclear Security Administration 62

Appendix V GAO Contact and Staff Acknowledgments 64

Tables

Table 1: Description of the National Nuclear Security 

Administration’s (NNSA) Weapons Activities Areas 9

Table 2: Types of Nuclear Weapons Currently in the U.S. 

Stockpile and Refurbishment Activities Planned from 2017 

through 2041 10

Table 3: Changes in the National Nuclear Security 

Administration’s (NNSA) 25-Year Estimates for Nuclear 

Weapons Modernization for Fiscal Years 2016 and 2017 14

Contents
Page ii GAO-17-341 National Nuclear Security Administration

Table 4: Changes in Life Extension Program (LEP) and Alteration 

Activities’ 25-Year Estimates for Nuclear Weapons 

Modernization for Fiscal Years 2016 and 2017 16

Table 5: Comparison of NNSA’s Cost Range Estimates, the Fiscal 

Year 2017 Stockpile Stewardship and Management 

Plan’s Weapons Activities Account Budget Estimates, and 

Out-Year Funding Projections from the President’s Fiscal 

Year 2017 Budget for Fiscal Years 2022 through 2026 35

Table 6: Changes in Schedules for the National Nuclear Security 

Administration’s (NNSA) Major Modernization Efforts, 

According to Agency Planning Documents, Fiscal Years 

2010 through 2017 60

Figures

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 32

Figure 2: Comparison of the National Nuclear Security 

Administration’s Fiscal Year 2014 through 2017 Stockpile 

Stewardship and Management Plans for Fiscal Years 

2014 through 2026 33

Figure 3: 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 37

Figure 4: B61-12 Life Extension Program Budget Estimates from 

2016 to Completion 52

Figure 5: W76-1 Life Extension Program Budget Estimates from 

2016 to Completion 53

Figure 6: W80-4 Life Extension Program Budget Estimates from 

2016 to Completion 54

Figure 7: W88 Alteration 370 (with Conventional High Explosive 

Refresh) Budget Estimates from 2016 to Completion 55

Figure 8: IW-1 Life Extension Program Budget Estimates from 

2019 through 2041 56

Figure 9: IW-2 Life Extension Program Budget Estimates from 

2023 through 2041 57

Figure 10: IW-3 Life Extension Program Budget Estimates from 

2030 through 2041 58
Page iii GAO-17-341 National Nuclear Security Administration

Figure 11: B61-12 Follow-On Life Extension Program Budget 

Estimates from 2038 through 2041 59

Abbreviations

CMRR Chemistry and Metallurgy Research Replacement

DOD Department of Defense

DOE Department of Energy

FYNSP Future-Years Nuclear Security Program

IW interoperable warhead

LEP life extension program

NNSA National Nuclear Security Administration

OMB Office of Management and Budget

UPF Uranium Processing Facility

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Page 1 GAO-17-341 National Nuclear Security Administration

441 G St. N.W.

Washington, DC 20548

April 26, 2017

Congressional Committees

The United States is in the midst of a long-term effort to modernize its 

nuclear security enterprise, including the nuclear weapons stockpile, 

which continues to be an integral part of the nation’s defense strategy. 

Following the Cold War, the United States shifted from a strategy that 

focused on designing, testing, and producing new nuclear weapons to 

focusing on extending the operational lives of these weapons indefinitely 

through refurbishment. The Department of Energy (DOE), through the 

National Nuclear Security Administration (NNSA), seeks to carry out this 

strategy and ensure that the existing weapons remain safe and reliable.1

In addition to NNSA, two other organizations are responsible for the 

nation’s nuclear weapons program. First, the Department of Defense 

(DOD) implements the U.S. nuclear deterrent strategy, which includes 

establishing the military requirements that are associated with planning 

for the stockpile. DOD also undertakes efforts to sustain and modernize 

the nation’s nuclear delivery systems and the nuclear command, control, 

and communications system.2 Second, the Nuclear Weapons Council, 

which is composed of representatives from DOD and DOE, facilitates 

high-level coordination to secure, maintain, and sustain the nuclear 

weapons stockpile. In response to the nuclear weapons requirements 

developed through the Nuclear Weapons Council, which are ultimately

approved by the President, NNSA conducts an annual planning and 

budgeting process to identify funding needs for its portfolio of nuclear 

modernization programs.

Stockpile stewardship activities are largely executed at eight governmentowned, contractor-operated sites that comprise NNSA’s nuclear security 

 1

NNSA is a separately organized agency within DOE that is responsible for DOE’s nuclear 

weapons, nuclear nonproliferation, and naval reactor programs. 

2

Nuclear delivery systems consist of a variety of platforms, including heavy bombers, airlaunched cruise missiles, dual-capable fighter aircraft, and land-based intercontinental 

ballistic missiles operated by the Air Force, as well as submarines and submarinelaunched ballistic missiles operated by the Navy. The nuclear command, control, and 

communications system consists of satellites, early warning radars, aircraft, 

communications networks, and other systems that are managed by the Air Force, Navy, 

Defense Information Systems Agency, and other organizations. 

Letter
Page 2 GAO-17-341 National Nuclear Security Administration

enterprise.3 These activities are not without their challenges. In particular, 

as the weapons age, certain nuclear weapons components must be 

replaced or they will begin to undermine the reliability and performance of 

the weapon. Further, many of the facilities within the nuclear security 

enterprise that support the nuclear weapons program date to the 1940s 

and 1950s and have become difficult and costly to maintain.

To respond to these challenges, the United States identified a set of goals 

and requirements intended to support and modernize the nation’s nuclear 

weapons capabilities and physical infrastructure over the coming decades 

based on policy set forth in the 2010 Nuclear Posture Review, which 

outlined the United States’ approach to maintaining its nuclear deterrent 

capability while pursuing further reductions in nuclear weapons.4 Among 

its long-term modernization goals and requirements, the 2010 Nuclear 

Posture Review called for sustaining a secure and effective nuclear 

arsenal through the life extension of existing nuclear weapons; increasing 

investments to rebuild and modernize the nation’s nuclear infrastructure; 

and strengthening the science, technology, and engineering base within 

the nuclear security enterprise, in part to ensure existing nuclear weapons 

remain reliable without conducting underground nuclear tests. To meet 

these modernization goals, NNSA is refurbishing weapons in the stockpile 

to extend their operational lives, replacing or renovating aging and 

outdated weapons-related facilities, performing simulations and laboratory 

experiments to seek to ensure that existing nuclear weapons remain safe 

and reliable, and recruiting and training personnel with the specialized 

skills to sustain the nation’s nuclear weapons program and maintain the 

stockpile.

Two key documents, updated annually, describe NNSA’s operations, 

modernization plans, and budget estimates for implementing these plans; 

 3

NNSA oversees three national nuclear weapons design laboratories—Lawrence 

Livermore National Laboratory in California, Los Alamos National Laboratory in New 

Mexico, and Sandia National Laboratories in New Mexico and California. It also oversees 

four nuclear weapons production plants—the Pantex Plant in Texas, the Y-12 National 

Security Complex in Tennessee, the National Security Campus in Missouri (formerly 

known as the Kansas City Plant), and tritium operations at DOE’s Savannah River Site in 

South Carolina. NNSA also oversees the Nevada National Security Site, formerly known 

as the Nevada Test Site.

4

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

2010).
Page 3 GAO-17-341 National Nuclear Security Administration

these documents comprise NNSA’s nuclear security budget materials.5

First, the Stockpile Stewardship and Management Plan (the 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 (OMB).6 These 

estimates are identical to those presented in the first 5 years of the 

Stockpile Stewardship and Management Plan.

7 Congress funds NNSA’s 

modernization efforts through various programs and activities within the 

Weapons Activities appropriations account. To implement NNSA’s 

modernization plans, the agency’s February 2016 justification of the 

President’s budget for the Weapons Activities appropriations account

included about $49.4 billion for fiscal years 2017 through 2021, of which 

about $9.2 billion was for fiscal year 2017.8 In addition, DOE and DOD 

are required to submit jointly each year a third document to the relevant 

Senate and House committees and subcommittees that also includes 

information on modernization budget estimates; we refer to this document 

as the DOD-DOE joint report.9 The DOD-DOE joint report addresses, 

among other things, the plan for the nuclear weapons stockpile and its 

 5

NNSA refers to the cost figures included in its budget materials during the 5-year FutureYears Nuclear Security Program (FYNSP) period as “budget requirements” and those 

after that period as “budget requirements estimates.” We refer to these figures as “budget 

estimates” throughout this report.

6

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.

7

The Fiscal Year 2017 Stockpile Stewardship and Management Plan includes estimates 

that are identical to those presented in the FYNSP as well as estimated nominal program 

costs for fiscal years 2022 through 2041. According to the fiscal year 2017 plan, this

information shows the potential evolution in program makeup and does not represent 

precise costs in the out-years.

8

NNSA does not have a definition of “modernization,” but NNSA officials consider all of the 

programs in the Weapons Activities appropriations account to directly or indirectly support 

modernization, and these are the monies we include.

9

Department of Defense and Department of Energy, Fiscal Year 2017 Report on the Plan 

for the Nuclear Weapons Stockpile, Nuclear Weapons Complex, Nuclear Weapons 

Delivery Systems, and Nuclear Weapons Command and Control System Specified in 

Section 1043 of the National Defense Authorization Act for Fiscal Year 2012 (Washington, 

D.C.: Aug. 5, 2016). 
Page 4 GAO-17-341 National Nuclear Security Administration

delivery systems and includes a 10-year range of budget estimates for 

both DOE’s and DOD’s modernization efforts.10

Concerns about future sequestration have affected the manner in which 

NNSA has carried out its budget planning processes. Sequestration is a 

budgetary enforcement mechanism that was revived by the Budget 

Control Act of 2011 to encourage agreement on deficit reduction 

legislation or, in the event that such an agreement cannot be reached, to 

automatically reduce spending so that an equivalent budgetary goal is 

achieved. Reductions to discretionary spending were triggered under 

sequestration in fiscal year 2013 and have not been required since, but 

under current law, reductions to discretionary spending limits could be 

required in fiscal years 2018 through 2021. Additionally, under the act, if 

in any year through fiscal year 2021 Congress and the President enact 

appropriations that exceed discretionary spending limits, there will be an 

after-session sequestration to eliminate the breach. Any reductions to 

discretionary spending through fiscal year 2021 could, therefore, create 

additional budgetary pressures for NNSA as it seeks to carry out an 

ambitious scope of work that includes simultaneously executing multiple 

weapons refurbishment efforts and major construction projects over the 

next decade.

The National Defense Authorization Act for Fiscal Year 2011 contains a

provision that we study and report annually on whether NNSA’s nuclear 

security budget materials provide for funding that is sufficient to 

modernize and refurbish the nuclear security enterprise as well as to 

recapitalize its infrastructure.11 This is the sixth year that we have 

undertaken work in response to this provision.12 This report assesses the 

extent to which NNSA’s fiscal year 2017 nuclear security budget materials 

(1) differ, if at all, from its budget estimates and plans for modernization 

activities as presented in its fiscal year 2016 budget materials and (2) 

align with NNSA’s modernization plans.

 10The National Defense Authorization Act for Fiscal Year 2013 includes a provision that 

we review each joint report for accuracy and completeness with respect to the budget 

estimates. We are reviewing the August 2016 DOD-DOE joint report—which includes 

budget estimates for fiscal years 2017 through 2026—in another audit.

11Ike Skelton National Defense Authorization Act for Fiscal Year 2011, Pub. L. No. 111-

383, § 3113, 124 Stat. 4137, 4509 (codified as amended at 50 U.S.C. § 2455).

12The results of last year’s review are found in GAO, 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).
Page 5 GAO-17-341 National Nuclear Security Administration

To address these objectives, we reviewed NNSA’s fiscal year 2017 

nuclear security budget materials. Specifically, we reviewed the agency’s 

budget justification, which contains estimates for the 5-year FYNSP, and 

the Stockpile Stewardship and Management Plan, which provides budget 

estimates over the next 25 years.13 To determine the extent to which 

NNSA’s budget estimates and plans for modernization activities differed 

from those in the fiscal year 2016 budget materials, we compared the 

information in the fiscal year 2017 budget materials with the information in 

the fiscal year 2016 materials. Specifically, for the purposes of this report, 

we compared the fiscal years 2017 through 2041 period from the 2017 

plan with the fiscal years 2016 through 2040 period from the 2016 plan. 

Comparing the activities and budget estimates intended to support these 

activities across the 25-year periods in the different plans provides 

insights for budgeting and planning purposes as to how NNSA’s nuclear 

security budget materials have changed from one plan to the next. To 

determine the extent to which NNSA’s budget materials align with its 

modernization plans, we compared information on the budget estimates

in the fiscal year 2017 budget materials with the information on 

modernization plans in the same documents. We also reviewed budget 

estimates from the DOD-DOE joint report and compared information from 

this report with that in the Fiscal Year 2017 Stockpile Stewardship and 

Management Plan. We compared the plan with portfolio management 

best practices and portfolio management standards developed by the 

Project Management Institute.14 In addition, we interviewed officials from 

NNSA and OMB to obtain further information on the budget estimates and 

planning process, as well as on changes to modernization plans, and 

discussed any perceived misalignments with them. We focused our 

review for this report on those activities that NNSA officials consider 

major modernization efforts—for example, life extension programs 

 13The Stockpile Stewardship and Management Plan is intended as a budgetary planning 

guide—a strategic program of record—for the next 25 years.

14Project Management Institute, Inc., The Standard for Portfolio Management, 3rd ed. 

(Newtown Square, PA: 2013). The Project Management Institute, Inc., is a not-for-profit 

association that provides global standards for, among other things, project and program 

management. These standards are utilized worldwide and provide guidance on how to 

manage various aspects of projects, programs, and portfolios.
Page 6 GAO-17-341 National Nuclear Security Administration

(LEP);15 major alterations of nuclear weapons; and major construction 

efforts, including both the Chemistry and Metallurgy Research 

Replacement (CMRR) and Uranium Processing Facility (UPF) 

construction projects.

The budget projections in the fiscal year 2016 and 2017 Stockpile 

Stewardship and Management Plans each contain budget estimates for 

25 years, broken down by the component programs, with all dollar figures 

presented in nominal dollar values. As mentioned above, the estimates 

for the first 5 years of the 25-year plans are identical to the FYNSP. For 

the remaining 20 years, a range of estimates is given for each of the 

budget components to reflect the significant uncertainties underlying the 

estimates, and a point estimate is also provided.16 For the purposes of 

this report, we refer to the point estimates as budget estimates, which 

represent the potential estimated costs of NNSA’s nuclear modernization 

program. Our report focuses on NNSA’s point estimates and presents all 

figures as originally provided by NNSA, in nominal dollars, unless

otherwise noted.17 To assess the reliability of the data underlying NNSA’s 

budget estimates, we reviewed the data to identify missing items, outliers, 

or obvious errors; interviewed NNSA officials knowledgeable about the 

data; and compared the figures in the budget justification with those in the 

fiscal year 2016 and 2017 Stockpile Stewardship and Management Plans

to assess the extent to which they were consistent. We determined that 

the data were sufficiently reliable for our purposes, which were to report 

 15LEPs extend, through refurbishment of components, the operational lives of weapons in 

the nuclear stockpile by 20 to 30 years and certify these weapons’ military performance 

requirements without underground nuclear testing. Much like a nuclear weapon LEP, a 

weapon alteration replaces or refurbishes components to ensure the weapon can continue 

to meet military requirements. However, an alteration generally refurbishes fewer 

components than an LEP and does not specifically extend a weapon’s operational lifetime.

16NNSA estimates a range of possible costs for each component program, with the point 

estimate being between the high and low extremes. The basis for the cost estimates 

beyond the FYNSP—including the point estimates—varies depending on the individual 

programs or subprograms. Some portions of the programs and activities funded from the 

Weapons Activities appropriations account are assumed to continue beyond the FYNSP 

at the same level of effort as in the FYNSP. For these cost projections, NNSA used 

inflation escalation factors based on numbers provided by OMB. For other programs and 

activities—the LEPs and major construction projects—NNSA uses either the mid-point 

between the range of estimates or a more robust bottom-up estimate used as the 

program’s or project’s baseline cost estimate.

17Nominal dollars, which can also be referred to as current dollars, are valued in the prices 

of the current year—that is, in terms of the prices that prevail at the time (with no 

adjustments to remove the effects of inflation).
Page 7 GAO-17-341 National Nuclear Security Administration

the total amount of budget estimates and those estimates dedicated to 

certain programs and budgets and compare them with last year’s 

estimates. All years are fiscal years, unless otherwise noted. A detailed 

description of our scope and methodology can be found in appendix I.

We conducted this performance audit from April 2016 to April 2017 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.

NNSA’s major modernization efforts consist of the LEPs and major 

alterations as well as the large construction projects that support NNSA’s 

strategies to sustain strategic material commodity investments.18 As 

discussed in the Fiscal Year 2017 Stockpile Stewardship and 

Management Plan, ongoing and planned LEPs and major alterations 

include the W88 Alteration 370 as well as the following LEPs: W76-1; 

B61-12; B61-12 follow-on; W80-4; and the three interoperable warhead 

(IW) options, IW-1, IW-2, and IW-3. (See app. II for additional information 

on the W88 Alteration 370 and these LEPs.) Examples of large 

construction projects that support modernization include the CMRR 

project at Los Alamos National Laboratory, which supports NNSA’s longterm plutonium strategy,19 and the UPF project at the Y-12 National 

Security Complex, which seeks to ensure the ability to produce uranium 

 18According to the Fiscal Year 2017 Stockpile Stewardship and Management Plan, 

strategic materials, such as plutonium, uranium, and tritium, are key to ensuring the 

safety, security, and effectiveness of the nation’s nuclear deterrent, as well as to 

addressing national security concerns such as nuclear proliferation and terrorism.

19NNSA initially approved the CMRR project to replace the aging Chemistry and 

Metallurgy Research facility that had supported plutonium work at the Los Alamos 

National Laboratory since the 1950s. In August 2014, DOE formally cancelled its original 

plan to construct a large nuclear facility as part of the CMRR project and approved a 

revised CMRR project. The revised project involved maximizing the use of existing space 

in two facilities at Los Alamos—a radiological lab and Plutonium Facility 4—by purchasing 

and installing plutonium analysis equipment in them. In August 2016, we completed a 

review of NNSA’s revised CMRR project. See GAO, DOE Project Management: NNSA 

Needs to Clarify Requirements for Its Plutonium Analysis Project at Los Alamos, 

GAO-16-585 (Washington, D.C.: Aug. 9, 2016). 

Background
Page 8 GAO-17-341 National Nuclear Security Administration

components for the stockpile and support nuclear propulsion for the Navy 

as part of NNSA’s long-term uranium sustainment strategy.20

Congress funds NNSA’s modernization efforts through various programs 

and activities within the Weapons Activities appropriations account that 

generally address the following areas: (1) stockpile, which includes 

activities that provide for, support, and maintain the nation’s stockpile of 

nuclear warheads and bombs, such as the LEPs; (2) infrastructure, which 

includes government-owned, -leased, and -permitted physical 

infrastructure and facilities supporting weapons activities, such as CMRR 

and UPF; (3) research, development, testing, and evaluation, which 

encompasses programs that are technically challenging, multiyear, 

multifunctional efforts to develop and maintain critical science and 

engineering capabilities, such as capabilities that enable the annual 

assessment of the safety and reliability of the stockpile; and (4) other 

weapons activities, which includes budget estimates associated with 

nuclear weapon security, secure transportation, and information 

technology and cyber security as well as legacy contractor pensions.21

Table 1 provides additional details on these four areas within the 

Weapons Activities appropriations account.

 20The UPF project is designed to replace enriched uranium capabilities currently located in 

the aging Building 9212 at the Y-12 National Security Complex and is part of a larger 

strategy to maintain NNSA’s enriched uranium capability by relocating enriched uranium 

operations performed in Building 9212 to other existing buildings by 2025 and by 

constructing a series of smaller buildings. 

21NNSA is responsible for contributing to the pensions of certain employees and 

annuitants of the University of California who worked as contractors for NNSA until the 

mid-2000s. 
Page 9 GAO-17-341 National Nuclear Security Administration

Table 1: Description of the National Nuclear Security Administration’s (NNSA) Weapons Activities Areas

Weapons Activities area Description

Stockpile This area includes weapons refurbishments through life extension programs and other 

major weapons alterations and modifications; surveillance efforts to evaluate the 

condition, safety, and reliability of stockpiled weapons; maintenance efforts to perform 

certain minor weapons alterations or to replace components that have limited 

lifetimes; and core activities that support these efforts, such as maintaining base 

capabilities to produce uranium and plutonium components.

Infrastructure This area maintains, operates, and modernizes NNSA infrastructure, including two 

major construction projects: (1) the Uranium Processing Facility, which is part of a 

larger strategy to maintain NNSA’s enriched uranium capability and is intended to 

replace most enriched uranium capabilities currently located in the aging Building 

9212 at the Y-12 National Security Complex, and (2) the Chemistry and Metallurgy 

Research Replacement project at Los Alamos National Laboratory, which is part of 

NNSA’s larger plutonium infrastructure strategy and is composed of several 

subprojects that are expected to move analytical chemistry and materials 

characterization activities into two existing facilities.

Research, development, testing, and 

evaluation

This area is composed of programs that are technically challenging, multiyear, 

multifunctional efforts to develop and maintain critical science and engineering 

capabilities. These capabilities enable the annual assessment of the safety and 

reliability of the stockpile, support the development of code-based models that replace

underground testing, and improve understanding of the physics and materials science 

associated with nuclear weapons.

Other weapons activities This area encompasses activities associated with nuclear weapon security, such as 

providing for safeguards and security requirements, including protective forces and 

systems at NNSA sites; secure transportation, which supports the safe, secure 

movement of nuclear weapons, special nuclear material, and weapons components; 

information technology and cyber security, which includes efforts to research and 

develop information technology and cyber security solutions to help meet increased 

proliferation-resistance and security; and legacy contractor pensions.

Sources: GAO analysis of NNSA documents. | GAO-17-341

The four areas are interconnected. For example, experiments funded 

under the research, development, testing, and evaluation area can 

contribute to the design and production of refurbished weapons, which is 

funded under the stockpile area. The infrastructure area offers critical 

support to the stockpile area as well as the research, development, 

testing, and evaluation area by providing a suitable environment for their 

various activities, such as producing weapons components and 

performing research and experimentation activities.

NNSA’s current modernization efforts address six of the seven different 

weapons types that make up the U.S. nuclear weapons stockpile and 

associated delivery systems, including air-delivered bombs, ballistic 

missile warheads, and cruise missile warheads. Most of these nuclear 

weapons were produced more than 20 years ago and are being sustained 

beyond their original design lifetime (see table 2).
Page 10 GAO-17-341 National Nuclear Security Administration

Table 2: Types of Nuclear Weapons Currently in the U.S. Stockpile and Refurbishment Activities Planned from 2017 through 

2041

Warhead or 

bomb type

Delivery 

system

Life extension program 

(LEP) or major alteration 

planned from 2017 

through 2041

Description of LEP 

or major alteration

B61-3/4/10

B61-7/11a

Tactical bomb

Strategic bomb √

The National Nuclear Security Administration 

(NNSA) is consolidating the 3, 4, 7, and 10 

modifications of the B61 bomb into a single 

B61-12 modification during an ongoing LEP.b

W76-0/1 Submarine-launched ballistic 

missile warhead

√

NNSA is replacing a portion of W76-0 

warheads with W76-1 warheads, which are 

currently being produced as part of an LEP. 

The remainder of the W76-0 warheads will not 

be refurbished and are being permanently 

dismantled.

W78 Intercontinental ballistic missile 

warhead

√

This warhead, together with the W88 

warhead, will constitute the first interoperable 

warhead option, the IW-1. An interoperable 

warhead is designed to have a nuclear 

explosive package that can be used on 

multiple delivery systems.

W80-4 Air-launched cruise missile 

warhead √

This LEP is intended to provide a warhead for 

a future long-range standoff missile that will 

replace the Air Force’s current air-launched 

cruise missile warhead.

B83-1 Strategic bomb Not applicablec Not applicablec

W87 Intercontinental ballistic missile 

warhead √ NNSA’s second interoperable warhead, the IW-2, will involve this warhead.

W88 Submarine-launched ballistic 

missile warhead √ This warhead, together with the W78 warhead, will constitute the first interoperable 

warhead option, the IW-1.

Legend: √ = Yes

Source: GAO analysis of NNSA data. | GAO-17-341

a

The B61-11 is not yet scheduled for an LEP.

b

The Fiscal Year 2017 Stockpile Stewardship and Management Plan also includes budget estimates 

for studies related to a B61-12 follow-on LEP, beginning in 2038, to replace the B61-12.

c

Following completion of the B61-12 LEP, NNSA will retire the B83-1, the last megaton-class weapon 

in the nation’s nuclear arsenal.
Page 11 GAO-17-341 National Nuclear Security Administration

NNSA’s overall nuclear modernization budget materials and plans for the 

next 25 years, as presented in the Fiscal Year 2017 Stockpile 

Stewardship and Management Plan, differ little from those in the fiscal 

year 2016 plan, although specific budget estimates changed to a greater 

degree in some individual programs. Specifically, budget estimates in 

NNSA’s Fiscal Year 2017 Stockpile Stewardship and Management Plan

for modernization of the nuclear weapons stockpile total $300.7 billion for 

the period covering fiscal years 2017 through 2041, which is a slight 

increase from the 2016 plan’s estimates of $297.6 billion for the period 

covering fiscal years 2016 through 2040.22 We also found that changes in 

the estimates varied across both the four areas that make up the 

Weapons Activities appropriations account and the individual programs in 

each of the four areas. In addition, we found that the 25-year budget 

estimates for some major modernization programs generally decreased. 

Further, we found that NNSA has taken steps to address our prior 

recommendations regarding deferred maintenance budgets.

According to the Fiscal Year 2017 Stockpile Stewardship and 

Management Plan, NNSA’s estimates for the period covering fiscal years 

2017 through 2041 totaled $300.7 billion for modernization activities—an 

increase of $3.1 billion, or about 1 percent (in nominal dollars), from the 

$297.6 billion total NNSA reported in the 2016 plan, which covers fiscal 

years 2016 through 2040.23 Part of the reason for the difference is due to 

the effect of inflation on budgets over the 25-year periods in the two 

plans, which cover slightly different time frames, with the fiscal year 2017 

plan including estimates for fiscal year 2041 and excluding those for fiscal 

year 2016. Moreover, the changes in the estimates varied across the four 

 22By comparison, the $297.6 billion budget estimate over 25 years in NNSA’s Fiscal Year 

2016 Stockpile Stewardship and Management Plan reflects an increase of approximately 

1.4 percent (about $4.2 billion) from NNSA’s $293.4 billion budget estimate in the 2015 

plan covering fiscal years 2015 through 2039. 

23As mentioned above, the estimates for the first 5 years of the 25-year plans are identical 

to the FYNSP, and cost range estimates and point estimates are given for the remaining 

20 years. For the fiscal year 2016 plan, the point estimate totaled $297.6 billion and the 

cost estimates ranged from a low of $283.6 billion to a high of $309.4 billion. For the fiscal 

year 2017 plan, the cost range around the point estimate of $300.7 billion was $285.6 

billion to $320.5 billion. According to NNSA officials, the agency gives greater preference 

to the cost ranges over the point estimates when referring to the potential future cost of 

the nuclear modernization program. However, for the purposes of our report, we refer to 

the point estimates to discuss year-to-year changes in our comparisons of the fiscal year 

2016 and 2017 plans.

NNSA’s Overall 2017 

Budget Materials and 

Plans for 

Modernization Differ 

Little from 2016 

Budget Materials and 

Plans, but Estimates 

for Certain Programs 

Changed to a Greater 

Degree

Overall Fiscal Year 2017 

25-Year Budget Estimates 

Increased Slightly from 

Those in the Fiscal Year 

2016 Plan
Page 12 GAO-17-341 National Nuclear Security Administration

areas that make up the Weapons Activities appropriations account: 

stockpile; infrastructure; research, development, testing, and evaluation; 

and other weapons activities. The change in 25-year budget estimates 

ranged from an overall increase of 4.2 percent for the other weapons 

activities area, which includes programs for information technology, 

cybersecurity, and the secure transportation of nuclear materials and 

components, to a decrease of 2.7 percent in the infrastructure area, which 

includes major construction projects moving toward completion, such as 

UPF and CMRR.

• Stockpile. The stockpile area budget estimates in the Fiscal Year 

2017 Stockpile Stewardship and Management Plan rose about 2.7 

percent, or $3.1 billion, to $120.3 billion from the fiscal year 2016 plan. 

Increases in budget estimates for some programs to some extent 

offset decreases in other estimated stockpile area program budgets 

over the period covering fiscal years 2017 through 2041. For example, 

strategic materials increased by about 49.6 percent after the addition 

of strategic material sustainment, a new line that consolidated storage 

and material recycle and recovery, two programs that had previously 

been in the infrastructure area. In addition, weapons dismantlement 

and disposition increased by about 43.6 percent, in part because of 

an acceleration of program requirements in the fiscal year 2017 plan. 

On the other hand, stockpile systems decreased by about 9.8 percent. 

LEP funding, which is discussed later in this report, also decreased.

• Infrastructure. The budget estimate in the Fiscal Year 2017 Stockpile 

Stewardship and Management Plan for the infrastructure area 

decreased about $2.2 billion to $79.6 billion from nearly $81.9 billion, 

a reduction of about 2.7 percent. This reduction is due in part to the 

movement of about $6.5 billion in strategic materials sustainment 

funding out of the infrastructure area to the stockpile area. In addition, 

two major construction projects—UPF at Y-12 and CMRR at Los 

Alamos—are moving toward completion in the mid-2020s and thus 

have 1 less year of requested funding in the 25-year Fiscal Year 2017

Stockpile Stewardship and Management Plan than in the fiscal year 

2016 plan. As a result of having 1 less year of requested funding in 

the fiscal year 2017 plan, the total amount of funding to be requested 

for UPF decreased by 7.1 percent, from about $4.9 billion to $4.5
Page 13 GAO-17-341 National Nuclear Security Administration

billion, and the amount for CMRR decreased by 8.2 percent, from 

about $1.9 billion to about $1.7 billion.24

• Research, development, testing, and evaluation. The budget 

estimate for the research, development, testing, and evaluation area 

slightly increased from $60 billion to $60.6 billion, or about 1.1 

percent. There were no significant changes in three of the five 

programs within the research, development, testing, and evaluation 

area from the 2016 plan. In two programs, however, there was a shift 

in focus. According to the fiscal year 2017 plan, in the Engineering 

program, emphasis shifted to the immediate needs of Directed 

Stockpile Work, and in the Advanced Manufacturing Development 

program, priorities were realigned from technology development 

efforts to address higher NNSA priorities. In addition, budget 

estimates for advanced simulation and computing increased about 4.9 

percent.

• Other weapons activities. The other weapons activities budget 

estimates increased by 4.2 percent, from $38.5 billion to $40.1 billion. 

This overall increase reflects, in part, expected budget increases for 

the costs of two programs—Information Technology and Cyber 

Security and Secure Transportation Asset—which are estimated to 

increase 14.3 percent and 15.8 percent, respectively.25

 24Budget estimates are not the same as program cost estimates, which are documented 

statements of costs to be incurred to complete a project or a defined portion of a project. 

Budget estimates in the Fiscal Year 2017 Stockpile Stewardship and Management Plan

for a program are what NNSA estimates to be the cost to complete a project. For example, 

the total estimated cost for UPF through 2025 is no more than $6.5 billion, $4.5 billion of 

which is budgeted to complete the project in fiscal years 2017 through 2025.

25NNSA’s Cyber Security program is responsible for fostering a culture to ensure that 

information technology systems and projects are coordinated across NNSA, have the 

necessary cyber security protection, and are aligned with DOE requirements and 

objectives. The Secure Transportation Asset program provides for the secure transport of 

nuclear weapons, weapons components, and special nuclear material in support of LEPs, 

limited life component exchanges, surveillance, dismantlement, nonproliferation initiatives, 

and experimental programs.
Page 14 GAO-17-341 National Nuclear Security Administration

Table 3 summarizes these changes in the 25-year budget estimates by 

area between the fiscal year 2016 and fiscal year 2017 plans.

Table 3: Changes in the National Nuclear Security Administration’s (NNSA) 25-Year Estimates for Nuclear Weapons 

Modernization for Fiscal Years 2016 and 2017

Dollars in billions

Area

Fiscal year 2016

25-year budget 

(2016-2040)

Fiscal year 2017 

25-year budget 

(2017-2041) Difference Percentage change

Stockpile 117.2 120.3 3.1 2.7

Infrastructure 81.9 79.6 -2.2 -2.7

Research, development, 

testing, and evaluation 60.0 60.6 0.6 1.1

Other weapons activitiesa 38.5 40.1 1.6 4.2

Total 297.6b 300.7 3.1 1.0 

Source: GAO analysis of NNSA data. | GAO-17-341

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

Because of rounding, numbers may not total exactly.

a

Other weapons activities include budget estimates associated with nuclear weapon security and 

transportation as well as legacy contractor pensions, among other things, that are also included in the 

Department of Energy’s Weapons Activities.

b

In reviewing the Fiscal Year 2016 Stockpile Stewardship and Management Plan, we found that 

NNSA had omitted $214 million in budget estimates for the Chemistry and Metallurgy Research 

Replacement line item construction project in the years beyond the Future-Years Nuclear Security 

Program. An NNSA official confirmed that this amount—which was reported in the 2016 

congressional budget justification—should have been included and that its omission was the result of 

a data entry error. The budget estimates above reflect the revised data, which differ from the 

estimates contained in the Fiscal Year 2016 Stockpile Stewardship and Management Plan.

As stated above, part of the difference between the fiscal year 2016 and 

2017 plans is due to the effect of inflation. The budget estimates in the 

fiscal year 2016 plan cover fiscal years 2016 through 2040, and budget 

estimates in the fiscal year 2017 plan cover fiscal years 2017 through 

2041. We compared the two sets of estimates by summing the nominal 

dollar values for each, which is how NNSA reports the estimates. The 

total from the fiscal year 2017 plan is different from the fiscal year 2016 

plan’s total in that the former includes fiscal year 2041 and excludes fiscal 

year 2016. Inflation makes the difference between the 2017 projection 

and the 2016 projection appear higher than it would be in the case of a 
Page 15 GAO-17-341 National Nuclear Security Administration

comparison of the two series in real dollar values or in a comparison that 

looks strictly at the years that overlap from each plan.26

Our review of NNSA’s fiscal year 2016 and 2017 nuclear security budget 

materials found that, overall, budget estimates for the LEPs and major 

construction programs generally decreased. For example, the fiscal year 

2017 budget estimate for LEPs and other weapons alteration activities—

which are captured within the stockpile area in the budget—decreased 

$1.1 billion, or 2.3 percent, from the fiscal year 2016 estimate of $49.8 

billion. However, changes in program scope in some LEPs also 

contributed to increases in the budget estimates of other programs.

Several reasons account for the changes in budget estimates. For 

example, the overall decrease in 25-year budget estimates in the fiscal 

year 2017 plan ending in 2041 is caused in part by the winding down of 

certain weapons refurbishment efforts, such as the W76-1 and B61-12 

LEPs and the W88 Alteration 370. These efforts are scheduled to be 

completed by the early to mid-2020s and are thus estimated to have no 

funding for most of the 25 years in the Fiscal Year 2017 Stockpile 

Stewardship and Management Plan. The schedules for these 

modernization efforts have not changed since the 2016 plan (see app. III 

for the schedule changes for NNSA’s major modernization programs 

during fiscal years 2010 through 2017). As a result, the 2017 plan 

contains 1 less year of budget estimates for each of these refurbishment 

efforts than the fiscal year 2016 plan. For example, funding for the W76-1, 

which is expected to be completed in fiscal year 2020, was $847.1 million 

in the fiscal year 2016 plan, which included annual budget estimates from 

fiscal year 2016 through expected program completion in fiscal year 

2020. But that figure decreased by $253.5 million to $593.5 million in the 

fiscal year 2017 plan, which includes annual budget estimates from fiscal 

years 2017 through 2020. Budget estimates did increase for three of the 

 26In a comparison that looks strictly at the 23 years that overlap from each plan—that is, 

from fiscal years 2017 through 2040—the change in estimates is a decrease of about 1.2 

percent from the 2016 plan to the 2017 plan. If all 25 years for each of the fiscal year 2016 

and 2017 budgets are compared, but adjusted for inflation, the 2017 budget is lower by 

about 0.9 percent. As noted, the Stockpile Stewardship and Management Plan is intended 

as a budgetary planning guide—a strategic program of record—for the next 25 years. 

Consequently, comparing the activities and budget estimates intended to support these 

activities across the 25-year periods in the different plans provides insights for budgeting 

and planning purposes as to how NNSA’s nuclear security budget materials have changed 

from one plan to the next.

Budget Estimates for 

Some Major 

Modernization Programs 

Have Generally 

Decreased
Page 16 GAO-17-341 National Nuclear Security Administration

LEPs in the 25 years covered in the fiscal year 2017 plan: the W80-4, the 

third interoperable warhead option or IW-3, and the B61-12 follow-on. For 

example, the estimates for both the IW-3 and B61-12 follow-on LEPs 

increased because the 2017 plan includes fiscal year 2041, which is not 

included in the 2016 plan. Table 4 shows the changes in budget 

estimates for the weapons refurbishment activities under way during the 

25-year period covered by the fiscal year 2016 and fiscal year Stockpile 

Stewardship and Management Plans.

Table 4: Changes in Life Extension Program (LEP) and Alteration Activities’ 25-Year Estimates for Nuclear Weapons 

Modernization for Fiscal Years 2016 and 2017

Dollars in billions

LEP or alteration Fiscal year 2016 estimates Fiscal year 2017 estimates

Change in estimates from 

2016 to 2017

W76-1 0.8 0.6 -0.3

B61-12 5.7 5.1 -0.6

W88 Alteration 370 2.0 1.9 -0.1

W80-4 8.2 8.4 0.2

Interoperable Warhead-1 

(IW-1) 13.4 12.4 -1.0

IW-2 12.1 11.4 -0.7

IW-3 6.3 6.8 0.4

B61-12 follow-on 1.2 2.1 0.9

Total 49.8 48.7 -1.1

Source: GAO analysis of National Nuclear Security Administration data. | GAO-17-341

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

Because of rounding, numbers may not total exactly.

In addition, the budget estimates for some of the weapons refurbishment 

efforts decreased as a result of changes in the cost-estimating models 

NNSA uses to develop LEP cost-range estimates and budget estimates, 

which led to differences between the fiscal year 2016 and 2017 LEP 

budget estimates.27 According to the Fiscal Year 2017 Stockpile 

Stewardship and Management Plan, the effect of the cost-estimating 

model changes was very small on the estimates for the B61-12 and W80-

4 LEPs and the W88 Alteration 370; however, the changes in the models 

had a more significant effect on the IW-1, IW-2, and IW-3 estimates. 

Specifically, as stated in the Fiscal Year 2017 Stockpile Stewardship and 

 27We did not assess NNSA’s cost-estimating models for the LEPs as part of our review. 
Page 17 GAO-17-341 National Nuclear Security Administration

Management Plan, the changes in the cost-estimating models for the IW 

LEPs lowered the upper range of the cost estimate by an average of 

about 8 percent because a shared component was re-evaluated to be 

much simpler and less expensive than in last year’s plan. The changes to 

the models affected all three systems to a similar and significant extent 

and led to lower budget estimates for these LEPs in the fiscal year 2017 

budget materials. For example, the IW-2 LEP budget estimate from the 

fiscal year 2016 plan totaled approximately $12.1 billion over the 2023 to 

2040 period, whereas the estimate in the fiscal year 2017 plan for this 

LEP over the same period totaled about $10.8 billion—a 12-percent 

decrease.

Changes in scope in some programs, however, contributed to increases 

in the budget estimates. For example, the budget estimate for the W88 

Alteration 370 continued to experience changes as a result of a decision 

made in November 2014 to expand the program’s scope of work to 

include a conventional high explosive replacement, or “refresh.” 

According to the Fiscal Year 2016 Stockpile Stewardship and 

Management Plan, the fiscal year 2016 budget reflected adjustments to 

partially fund these activities. That plan further noted that NNSA would 

annually evaluate its budget submissions to look for ways to fund the 

remaining conventional high explosive refresh activities. NNSA’s fiscal 

year 2017 nuclear security budget materials reflect additional increases to 

the budget estimates for the W88 Alteration 370, particularly over the 5-

year FYNSP period, as a result of further reassessment of the costs of 

the expanded scope of work. Specifically, the fiscal year 2017 FYNSP 

estimates increased by about $128 million, or 11.5 percent, over the fiscal 

year 2016 FYSNP estimates. Further, when comparing the fiscal year 

2016 plan’s total estimated program costs for fiscal years 2016 through 

2026 with the fiscal year 2017 plan’s total estimated program costs, which 

cover fiscal years 2017 through 2025, the 2017 estimate increased by 

about $111.3 million, or 5.8 percent. Nonetheless, the Fiscal Year 2017 

Stockpile Stewardship and Management Plan notes that NNSA is still in 

the process of completing a baseline cost report for the W88 Alteration 

370 that will serve as the cost and schedule baseline for the program and 

be reflected in future budget materials.

The remaining total estimated costs for the two major construction 

projects we reviewed—UPF and CMRR—have 1 less year of requested 

funding in the fiscal year 2017 plan; therefore, the total amount of funding 
Page 18 GAO-17-341 National Nuclear Security Administration

to be requested decreased as compared with the fiscal year 2016 plan.

28

Specifically, the remaining budget estimates for UPF in the Fiscal Year 

2017 Stockpile Stewardship and Management Plan total approximately 

$4.5 billion from fiscal year 2017 through the project’s planned completion 

in fiscal year 2025, down from about $4.9 billion in the fiscal year 2016 

plan.29 The Fiscal Year 2017 Stockpile Stewardship and Management 

Plan’s remaining budget estimates for the CMRR construction project 

decreased about 8.2 percent to a total of about $1.7 billion compared with 

a total of about $1.9 billion in the fiscal year 2016 plan. These projects, 

included in the infrastructure area in NNSA’s budget materials, support 

NNSA’s uranium and plutonium strategies, respectively.

Like the Fiscal Year 2016 Stockpile Stewardship and Management Plan, 

the fiscal year 2017 plan includes a goal to stop the growth of the 

agency’s deferred maintenance backlog.30 In August 2015, we found that 

NNSA’s infrastructure budget estimates were not adequate to address its 

deferred maintenance backlog and that the backlog would continue to 

grow.31 We recommended that, when budget estimates do not achieve 

DOE benchmarks for maintenance and recapitalization investment over 

the 5-year budget estimates, NNSA identify in the budget materials the 

amount of the shortfall and the effects, if any, on the deferred 

maintenance backlog. We also recommended that, until improved data 

about the importance of facilities and infrastructure to mission are 

available, NNSA clarify in the budget materials for the 5-year FYNSP the 

amount of deferred maintenance associated with facilities that have little 

 28According to NNSA officials, both of these projects have total estimated costs for the 

beginning-to-end cost of the projects. Further, the officials said that it is not the total 

estimated costs that have changed, but rather the amount of funding that remains to be 

requested as detailed in the construction project data sheets presented in the President’s 

fiscal year 2017 budget.

29According to the Fiscal Year 2017 Stockpile Stewardship and Management Plan, NNSA 

is committed to ending enriched uranium programmatic operations in Y-12’s Building 9212 

and delivering UPF by 2025 for no more than $6.5 billion. 

30In general, deferred maintenance consists of maintenance activities that were not 

performed when they should have been or were scheduled to be and therefore are put off 

or delayed.

31GAO, Modernizing the Nuclear Security Enterprise: NNSA Increased Its Budget 

Estimates, but Estimates for Key Stockpile and Infrastructure Programs Need 

Improvement, GAO-15-499 (Washington, D.C.: Aug. 6, 2015). In this report, we also 

assessed the extent to which NNSA’s 2015 budget estimates addressed the agency’s 

goal of stopping the growth of its deferred maintenance backlog.

NNSA Has Taken Steps to 

Address Our Prior 

Recommendations 

Regarding Deferred 

Maintenance Budgets
Page 19 GAO-17-341 National Nuclear Security Administration

to no effect on program operations and are therefore low priority. NNSA 

concurred with our recommendations. Specifically, NNSA agreed to 

include more information on maintenance, recapitalization, and deferred 

maintenance on excess facilities and stated that it will address them in 

the 2017 budget request or budget support materials, as appropriate. 

Similarly, NNSA officials agreed that, until improved data about the 

importance of facilities and infrastructure to the mission are available, 

NNSA will clarify in the budget materials for the FYNSP the amount of the 

deferred maintenance backlog that is associated with these facilities.

According to the Fiscal Year 2017 Stockpile Stewardship and 

Management Plan, NNSA is deploying management tools and processes 

to help it make data-driven and risk-informed investment decisions to 

address its infrastructure needs.32 In addition, in the 2017 budget 

materials, NNSA included data explicitly in response to our 

recommendations that provide dollar amounts for deferred maintenance 

in total, on excess facilities, and on facilities that will be in excess in 10 

years; the budget materials further note that NNSA will deliberately not 

perform some maintenance and repair on facilities that are or soon will be 

in excess. NNSA also identified in the budget materials the top 10 

facilities posing the highest risk to the mission, the workers, the public, 

and the environment and stated that these facilities will be addressed 

using fiscal year 2017 funding.

 32According to the fiscal year 2017 plan, NNSA’s strategy for reducing deferred 

maintenance has two main elements. The first entails revising NNSA’s approach to 

managing its infrastructure to ensure that senior decision makers understand the funding 

required for current maintenance needs while also reducing deferred maintenance to an 

acceptable level of risk. The second element involves making deferred maintenance 

estimates auditable and comparable across all sites and improving how required 

maintenance is identified. More specifically, according to the 2017 plan, with steady 

commitment over several years, the reduction in deferred maintenance will be 

accomplished by prioritizing NNSA’s routine investments in general purpose infrastructure, 

which will allow NNSA to make risk-informed strategic choices that address the deferred 

maintenance backlog, dispose of unneeded facilities, and revitalize the general purpose 

infrastructure.
Page 20 GAO-17-341 National Nuclear Security Administration

The budget estimates in some of NNSA’s fiscal year 2017 nuclear 

security budget materials do not align with the agency’s plans for its 

modernization efforts at several levels, raising concerns about the overall 

affordability of NNSA’s planned portfolio of nuclear modernization 

programs. In particular, for some nuclear weapon refurbishment 

programs, the low end of NNSA’s internally developed cost range 

estimates exceeds the estimates in the fiscal year 2017 budget materials. 

Moreover, the costs of some refurbishments and the plutonium 

sustainment program may increase. In addition, budget estimates for 

some modernization programs during 4 years of the FYNSP—fiscal years 

2018 through 2021—are below the funding levels NNSA has identified as 

needed for those efforts. Moreover, NNSA’s fiscal year 2017 budget 

materials, as well as NNSA officials, have acknowledged that the deferral 

of modernization work has contributed to impending and significant 

funding needs for fiscal years 2022 through 2026—the first 5 years 

beyond the FYNSP. Finally, NNSA’s fiscal year 2017 plan concludes that 

its modernization program is generally affordable in the years beyond the 

FYNSP but does not thoroughly explain the basis for this conclusion or 

provide options for how potential affordability concerns—that is, the 

period during which NNSA’s estimated funding needs may exceed 

projections of available resources—may be addressed if future funding is 

not increased.

Our analysis found misalignment between NNSA’s budget estimates and 

NNSA’s internal cost range estimates for several major modernization 

programs.33 Specifically, we analyzed the NNSA-developed high- and 

low-range cost estimates for the nuclear weapon refurbishments that are 

included in the fiscal year 2017 plan and found that, in some years, 

NNSA’s budget estimates for five refurbishment efforts do not align with 

the fiscal year 2017 modernization plan because the low end of the cost 

 33We analyzed NNSA’s annual budget estimates for nuclear weapon refurbishments in the 

FYNSP included in the President’s fiscal year 2017 budget as well as for the 25 years 

covered by the Fiscal Year 2017 Stockpile Stewardship and Management Plan. 

Specifically, the nuclear weapon refurbishment estimates we analyzed included those for 

the W76-1, the B61-12, the B61-12 follow-on, the W80-4, and the IW-1, -2, and -3 LEPs, 

as well as for the W88 Alteration 370.

Misalignment 

between Estimates in 

NNSA’s Budget 

Materials and 

Modernization Plans 

Raises Affordability 

Concerns

Budget Estimates for 

Several Nuclear Weapon 

Refurbishments Are below 

NNSA’s Internal Cost 

Range Estimates
Page 21 GAO-17-341 National Nuclear Security Administration

range estimates that NNSA developed for these refurbishments exceeds 

the budget estimates.34

In particular, we assessed the extent to which the budget estimates 

aligned with each program’s high- and low-range cost estimates and 

examined those instances in which the low end of NNSA’s cost range 

estimates was greater than the budget estimates.35 We found the annual 

budget estimates are generally consistent with NNSA’s internal cost 

range estimates; that is, in most years, the annual budget estimates for 

each weapon refurbishment effort fall within the high- and low-range cost 

estimates that NNSA developed for each program. However, in some 

years, NNSA’s budget estimates for some refurbishment efforts do not 

align with modernization plans. Specifically, for some years, the low end 

of the cost ranges that NNSA developed for some weapon refurbishments 

exceeds the budget estimates. As we have reported in the past, this 

misalignment indicates that estimated budgets may not be sufficient to 

fully execute program plans and that NNSA may need to increase budget 

estimates for those programs in the future.36 Specific modernization 

programs in which we identified such misalignments are as follows

• W76-1 LEP. The program’s cost model estimates exceed its budget 

estimates for fiscal years 2017, 2019, and 2020. Specifically, the cost 

model estimates exceed the budget estimates by about $5.9 million 

 34According 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 cost ranges 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.

35Because NNSA does not prepare high and low cost estimates for the W76-1, we 

compared the budget estimates for each fiscal year with the internal cost estimates NNSA 

developed for the LEP. 

36GAO-16-290 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).
Page 22 GAO-17-341 National Nuclear Security Administration

for fiscal year 2017, about $57 million for fiscal year 2019, and about 

$80.5 million for fiscal year 2020. According to NNSA officials, the 

program’s budget estimates are in accordance with the approved 

baseline estimate reflected in the program’s selected acquisition 

report.37 Nonetheless, additional adjustments to the budget estimates 

could be required in the future. For example, according to W76-1 

program officials and the W76-1 LEP’s March 2016 selected 

acquisition report, which was issued following the release of the fiscal 

year 2017 budget materials, cost increases associated with the 

management and operating contract currently in place at the Y-12 

National Security Complex have led the program to use reserve funds 

to cover changes in cost that were not built into the W76-1 LEP cost 

model. According to these officials, if the program exhausts its reserve 

funds, the W76-1 LEP could need additional funding to ensure that it 

is completed on schedule, meaning its overall costs could exceed its 

total cost estimate as of fiscal year 2017. However, NNSA officials 

said that they believed the W76-1 program could be completed for the 

cost reflected in the March 2016 selected acquisition report, which 

was released at about the same time as the fiscal year 2017 plan.

• B61-12 LEP. The program’s budget estimates for the 5-year period 

covered by the FYNSP align with the cost range estimates for the 

LEP. However, as presented in the Fiscal Year 2017 Stockpile 

Stewardship and Management Plan, the low-range cost estimate of 

$199.6 million for the final year of production in fiscal year 2025 

exceeds the program’s budget estimate of $64.4 million by about 

$135.2 million. NNSA officials told us that this difference between the 

budget estimate and the low-range cost estimate in the final year of 

the program is not a concern because the program expects to have 

prior year carryover funding available for fiscal year 2025. As 

described further below, we found additional concerns related to the 

B61-12 that could impact the potential availability of such carryover 

funding and how the program’s budget estimates align with the 

internal cost estimates NNSA developed for the LEP.

• W80-4 LEP. The program’s low-range cost estimate of $247.2 million 

for fiscal year 2017 exceeds its budget estimate of $220.3 million by 

about $26.9 million. According to the Fiscal Year 2017 Stockpile 

Stewardship and Management Plan and NNSA officials, NNSA 

 37A selected acquisition report is to document weapon program cost and schedule, among 

other information. Selected acquisition reports on each nuclear weapon system 

undergoing life extension or a major alteration project are required to be submitted to the 

congressional defense committees on a quarterly basis. 50 U.S.C. § 2537(a) (2017).
Page 23 GAO-17-341 National Nuclear Security Administration

reduced its planned funding for the W80-4 LEP in fiscal year 2017. 

NNSA expected that some funding would carry over from fiscal year 

2016 for certain activities in fiscal year 2017 as a result of the late 

receipt of full funding resulting from three continuing resolutions at the 

start of fiscal year 2016. However, one NNSA official disagreed that 

the fiscal year 2016 carryover would be used for certain activities in 

fiscal year 2017 because the carryover funds were still tied to 

activities that needed to be completed in fiscal year 2016. Moreover, 

this official noted that the lower funding request for fiscal year 2017, 

which is about $90 million below what was requested for the program 

in the President’s fiscal year 2016 budget, could add risk to the W80-4 

LEP and possibly slow or delay certain planned activities meant to 

address the program’s ambitious design goal of completing the first 

production unit by fiscal year 2025. NNSA officials also noted that the 

program is already operating at lower funding levels because of 

constraints put on the program by the fiscal year 2017 continuing 

resolution in place as of March 29, 2017.

• IW-1 LEP. The program’s low-range cost estimates as presented in 

the Fiscal Year 2017 Stockpile Stewardship and Management Plan

exceed its budget estimates for fiscal years 2019 and 2020. The low 

end of the cost estimate for fiscal year 2019 is $48.8 million, but the 

President’s fiscal year 2017 budget does not include any funding for 

that year. Moreover, the fiscal year 2020 low-range cost estimate of 

$146.3 million exceeds the program’s budget estimate of $112.4 

million by about $33.9 million. According to IW-1 program officials, the 

IW-1 has no funding for fiscal year 2019 because the Nuclear 

Weapons Council made a decision in May 2014 to defer this program 

until fiscal year 2020. In addition, these officials said that the budget 

estimate for fiscal year 2020 is below the low-range cost estimate 

because the IW-1 program needs to conduct a gradual restart, and it 

may not be practical for the program to respond to the large funding 

increase currently reflected in the low-range cost estimate. The IW-1 

program officials added that they would prefer the LEP to receive less 

funding in fiscal year 2020 and have some funding provided in fiscal 

year 2019 to allow the program to conduct a gradual restart and avoid 

potential challenges associated with the larger ramp-up or a 

continuing resolution in fiscal year 2020.38 The officials told us that 

 38According to NNSA officials, having some funding in fiscal year 2019 would allow the 

program to mitigate the potential risk of a continuing resolution heading into fiscal year 

2020. That is, under a continuing resolution, the program would revert to the previous 

year’s budget, which at present would be $0. 
Page 24 GAO-17-341 National Nuclear Security Administration

they have had discussions with the Nuclear Weapons Council about 

pursuing the gradual restart in fiscal year 2019 and will continue such 

discussions in the future. They further noted that if a decision is made 

to pursue the gradual restart, funding can be added as part of the 

fiscal year 2019 budget year programming process.

• W88 Alteration 370. The program’s low-range cost estimates exceed 

its budget estimates for fiscal years 2020 and 2021. The low end of 

the cost estimate for fiscal year 2020 is $260.2 million, whereas the 

President’s fiscal year 2017 budget estimate is $245.8 million, a 

difference of about $14.4 million. Moreover, the low-range cost 

estimate for fiscal year 2021 of $258.7 million exceeds the program’s 

budget estimate of $213.8 million by about $44.9 million. According to 

NNSA officials, this misalignment occurred, in part, because more 

funding was moved into fiscal years 2017 through 2020 to keep 

NNSA’s acceleration of the new conventional high explosive refresh 

scope of work on track with its original schedule. As a result of the 

increased funding for fiscal years 2017 through 2019, the total budget 

estimate for the W88 Alteration 370 over the current 5-year FYNSP 

period is about $1.2 billion. This exceeds the total low-range cost 

estimate of $953 million over that same period. NNSA officials pointed 

out that the increased funding levels for fiscal years 2017 through 

2019 will offset the potential funding shortfalls in fiscal years 2020 and 

2021. However, as described below, the program’s total cost estimate

in the fiscal year 2017 budget materials may increase in the future.

We also found that the costs of some major modernization programs may 

increase in the future based on NNSA information produced after the 

release of the fiscal year 2017 budget materials.39

• B61-12 LEP. According to two NNSA cost estimates issued following 

the release of the Fiscal Year 2017 Stockpile Stewardship and 

Management Plan and other fiscal year 2017 budget materials, the 

B61-12 LEP may cost about $200 million to about $2.6 billion more 

than the cost estimate presented in the fiscal year 2017 plan (an 

increase of about 3 percent to 35 percent). According to the plan, the 

budget estimates for the B61-12 LEP total approximately $7.4 billion. 

 39NNSA’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. The DOD-DOE joint report, which also includes information on modernization 

budget estimates, was issued in August 2016.

Costs of Some Major 

Modernization Programs 

May Increase
Page 25 GAO-17-341 National Nuclear Security Administration

This total estimate falls within the plan’s low- and high-range cost 

estimates, which total $7.3 billion and $9.6 billion, respectively. 

However, according to NNSA officials, the program’s baseline cost 

report—which was completed by the B61-12 program office in June 

2016—estimates that the LEP may cost approximately $7.6 billion, or 

about $200 million more than the budget estimate provided in the 

fiscal year 2017 plan.40 Officials from NNSA’s Office of Planning and 

Programming we spoke with confirmed that the estimated total cost of 

the B61-12 LEP will increase by about $200 million. Specifically, they 

told us that the B61-12 LEP’s baseline cost report is the official NNSA 

cost estimate for the program and will be used to inform both the fiscal 

year 2018 budget and Stockpile Stewardship and Management 

Plan.

41 However, officials from NNSA’s Office of Cost Estimating and 

Program Evaluation told us that the baseline cost report estimate may 

be understated, based on an independent cost estimate completed by 

that office in October 2016. According to these officials, the 

independent cost estimate assesses a 2-year slip to the program 

office’s estimated March 2020 first production unit date and indicates

a projected cost for the B61-12 program of approximately $10 billion, 

which would be $2.6 billion more than the $7.4 billion program 

estimate and $400 million more than the high-range cost estimate for 

the program as indicated in the fiscal year 2017 plan.

• W80-4 LEP. NNSA officials told us that the W80-4 LEP’s budget 

estimates in the fiscal year 2017 budget materials may increase in the 

future. An NNSA official said that a reevaluation of the LEP’s 

estimated costs conducted in March 2016 found that budget estimates 

for the program for the current FYNSP may not be adequate to 

support program needs. Specifically, the official stated that the 

program’s budget estimates for fiscal years 2019 through 2021

exceeded those identified in the FYNSP and Fiscal Year 2017 

Stockpile Stewardship and Management Plan. Similarly, officials from 

NNSA’s Office of Cost Policy and Analysis said they believe the total 

budget estimates for the W80-4 LEP are understated. According to 

these officials, the W80-4 program, which is operating under an 

 40A baseline cost report is a more mature program cost estimate, developed in this case 

by the B61-12 program office, which is used to formalize the program’s cost baseline. The 

development of the baseline cost report is one of the key steps preceding the transition to 

production engineering.

41According to NNSA officials, the independent cost estimate developed by the Office of 

Cost Estimating and Program Evaluation was useful in providing a separate assessment 

of cost and schedule risk to leadership but did not change NNSA’s position that the B61-

12 LEP’s baseline cost report is the definitive estimate for the program.
Page 26 GAO-17-341 National Nuclear Security Administration

accelerated, compressed schedule to complete its first production unit 

by fiscal year 2025, may be underfunded by at least $1 billion. The 

Office of Cost Policy and Analysis officials explained that the program 

may need additional funding not only to counter the more compressed 

schedule but also to address what they described as prior year 

underfunding. Further, there may be additional cost increases not yet 

factored into the program’s total cost estimate because the W80-4 

LEP is still in the early stages of NNSA’s Phase 6.X process and the 

scope of work has not yet been fully defined.42 For example, officials 

from the Office of Cost Policy and Analysis said that an option to 

conduct a refurbishment of the weapon’s secondary is being 

evaluated. They said a refurbishment could add approximately $250 

million to $300 million to the total cost of the program, which, as of the 

fiscal year 2017 plan, could range from $7.4 billion to $9.9 billion. In 

addition, an NNSA official with the W80-4 program said that the LEP 

may face additional cost increases as a result of ongoing timing and 

synchronization issues associated with the Air Force’s long-range 

standoff missile program, which is developing a new nuclear cruise 

missile that will carry the W80-4 warhead. NNSA officials told us that 

the program will have a better idea of its estimated cost as it 

advances toward Phase 6.2A, which focuses on investigating 

preferred design options and expected refurbishment costs.

• W88 Alteration 370. According to officials from the Office of Cost 

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

result in about $1 billion in additional costs. The additional scope, 

which, as described above, entails undertaking work to refresh the 

weapon’s conventional high explosive, has not resulted in any 

changes to the program’s current fiscal year 2020 schedule for 

delivery of the first production unit. However, funding levels for this 

program have increased compared with those presented in the fiscal 

year 2016 budget as a result of an NNSA reassessment of the cost of 

this effort. Officials from NNSA’s Office of Cost Estimating and 

Program Evaluation told us that they conducted an independent cost 

estimate of the program’s baseline cost report estimate, which was 

completed in September 2016, and found that it may be understated. 

According to these officials, the independent cost estimate, which was 

 42NNSA’s Phase 6.X process is a seven-step process under which NNSA and DOD jointly 

manage an LEP. NNSA and DOD implement the Phase 6.X process under a guidance 

document, Procedural Guideline for the Phase 6.X Process, which describes key highlevel joint tasks and deliverables for each phase and lists key milestones, such as tests 

and cost estimates, that a nuclear refurbishment activity, such as an LEP, is directed to 

take before proceeding to subsequent steps of the Phase 6.X process.
Page 27 GAO-17-341 National Nuclear Security Administration

expected to be published by the end of February or early March 2017, 

will provide further details on cost and schedule impacts to the W88 

Alteration 370 program. The Fiscal Year 2017 Stockpile Stewardship 

and Management Plan further states that the program’s baseline cost 

report will establish the cost and schedule baseline for the W88 

Alteration 370 and will be reflected in future budget materials.

• Plutonium Sustainment. According to preliminary observations from 

a July 2016 cost analysis report prepared by NNSA’s Office of Cost 

Policy and Analysis, the funding profiles for some activities within 

NNSA’s Plutonium Sustainment program may be underfunded.

43 The 

report, which NNSA officials said will be used internally to inform the 

fiscal year 2018 budgeting process, examined activities related to 

reconfiguring and upgrading plutonium pit manufacturing equipment at 

Los Alamos National Laboratory’s Plutonium Facility 4. The report 

indicated that, based on preliminary schedule analysis of these pit 

manufacturing equipment activities, a 2 to 3 year slip in schedule is 

likely. In light of the potential slip in schedule, costs for these activities 

could collectively exceed their original cost estimates by more than 

$100 million. Therefore, according to the report’s preliminary 

observations, NNSA may need to increase its estimated budget 

request for the Plutonium Sustainment program by approximately 

$100 million over the fiscal year 2018 to 2022 period. According to 

additional preliminary observations from the report, funding 

requirements for Plutonium Sustainment program activities other than 

the pit manufacturing equipment upgrades, such as those related to 

Los Alamos’ plutonium experimental device fabrication, could also 

need increased levels of funding over the fiscal year 2018 to 2022 

period. These activities, all of which fall under the auspices of the 

Plutonium Sustainment program, are being undertaken to assist Los 

Alamos’s plutonium production activities, particularly the ability to 

support a 30-pits-per-year manufacturing capacity by 2026. According 

to officials from the Office of Cost Policy and Analysis, producing an 

increased number of pits per year is critical because the IW-1 LEP, 

among other LEPs, will need access to the newly produced pits to 

meet its scheduled first production unit date of fiscal year 2030. NNSA 

officials further told us that some of the potential funding increases 

identified in the report’s preliminary observations reflect a ramp up in 

 43NNSA’s Plutonium Sustainment program supports the requirements for pit production 

outlined in the National Defense Authorization Act for Fiscal Year 2015 that requires

NNSA to produce 10 war reserve pits in 2024, 20 war reserve pits in 2025, and 30 war

reserve pits in 2026. A pit is the central core of a nuclear weapon that is commonly 

produced using plutonium.
Page 28 GAO-17-341 National Nuclear Security Administration

work to meet these mandated pit production levels and that NNSA 

continues to evaluate these additional requirements for fiscal years 

2018 through 2022 through its budgeting process.

Funding needs NNSA has identified for certain modernization programs 

during fiscal years 2018 through 2021 may not be met by the President’s 

budget for that period. For example, the Energy Secretary identified $5.2 

billion in additional funding needs for NNSA beyond OMB-approved 

funding levels for fiscal years 2018 through 2021. In addition, NNSA’s 

fiscal year 2017 budget materials, as well as NNSA officials, have 

acknowledged that the deferral of modernization work has contributed to 

impending and significant funding needs for fiscal years 2022 through 

2026—the first 5 years beyond the FYNSP.

In a December 2015 letter to the OMB Director, the Energy Secretary 

stated that an additional $5.2 billion above OMB-approved funding levels 

would be needed for fiscal years 2018 through 2021 to establish a viable 

and sustainable modernization program portfolio. The Energy Secretary 

stated that the funding level for NNSA facility infrastructure activities for 

fiscal years 2018 through 2021 was approximately one-half of the $2.8 

billion needed to address infrastructure issues in the future. In addition, 

the Energy Secretary noted that the $120 million in funds designated for 

the exascale high-performance computing initiative for fiscal years 2018 

through 2021 was $550 million below NNSA’s request.44 Other examples 

of programs with known shortfalls between the approved funding levels 

and NNSA’s estimated budget needs identified in the letter included the 

Domestic Uranium Enrichment program; the NNSA Center for 

Heterogeneous Integration Packaging and Processes; and a number of 

other technology development, surveillance, security, and infrastructure 

programs. According to the Energy Secretary’s letter, if these shortfalls 

were not addressed, they would fuel uncertainty in program execution, 

creating the potential for cost and schedule growth across the nuclear 

security enterprise, with the result that NNSA might not be able to sustain 

a viable portfolio of modernization programs.

 44NNSA’s exascale high-performance computing initiative is a joint program between 

NNSA and DOE’s Office of Science focused on advanced simulation through a capable 

exascale computing program that emphasizes sustained performance on mission relevant 

applications, such as integrated design codes and supporting modeling and simulation 

capabilities. These capabilities enable NNSA to evaluate and address the performance, 

safety, effectiveness, and security of the nuclear weapons stockpile and to quantify 

margins and uncertainties, among other things. 

Repeated Deferral of 

NNSA Funding Needs 

Contributes to Impending 

and Significant Funding 

Needs beyond the FYNSP

Energy Secretary Identified 

$5.2 Billion in Additional 

Funding Needs for NNSA 

beyond OMB-Approved 

Funding Levels for Fiscal 

Years 2018 through 2021
Page 29 GAO-17-341 National Nuclear Security Administration

NNSA officials did not dispute the Energy Secretary’s statement 

indicating that NNSA had identified a significant gap between the level of 

funding believed to be necessary to address modernization requirements 

and the funding profile in the FYNSP for fiscal years 2018 through 2021. 

NNSA officials attributed this gap to budgetary caps imposed by 

Congress and said that if Congress does not lift or change these caps for 

fiscal years 2018 through 2021—the remaining fiscal years for which 

reductions to discretionary spending limits could be required—the scope 

of planned modernization work during that time could not be sustained. 

NNSA officials stated that they believed that the administration and 

Congress need to establish a long-term plan that will address the existing 

budget caps, including consideration of appropriate adjustments to the 

out-year budget spending caps, to provide a firm foundation to continue 

the current plan of work.

An OMB official we interviewed told us that the budget caps require OMB 

to prioritize NNSA’s modernization programs in its evaluation of budget 

estimates and that lower priority modernization programs are often not 

approved at funding levels NNSA proposes to OMB. The official stated 

that OMB considers several criteria in prioritizing NNSA programs and 

assessing proposed funding. These criteria include whether there is a 

well-defined need for a particular program; the program provides a unique 

and useful capability; the timing of a particular program or capability that 

needs to be replaced or recreated is a pressing priority in need of funding 

within the 5-year period covered by the FYNSP, or if it can be deferred to 

beyond the FYNSP; and any independent cost estimates or analysis of 

alternatives have been conducted to justify the program need or the 

proposed funding level. The OMB official stated that, in applying these 

criteria, more analysis and justification were needed to support the 

funding levels requested for most of the programs identified in the Energy 

Secretary’s December 2015 letter.
Page 30 GAO-17-341 National Nuclear Security Administration

NNSA’s fiscal year 2017 budget materials, as well as NNSA officials, 

have acknowledged that work deferred by the agency has contributed to 

a significant bow wave of funding needs in the out-years—that is, there is 

an impending and significant increase in the requirements for additional 

funds. In particular, NNSA officials stated that the deferral of funding is 

one of the necessary strategies the agency uses to manage risk in order 

to address funding needs of programs deemed to be higher priorities 

within the FYNSP. For example, NNSA officials said that they reduced 

budget estimates for technology maturation activities during the FYNSP 

associated with the fiscal year 2017 nuclear security budget materials, in 

part, to provide additional funding in the fiscal years 2017 through 2021 

FYNSP for deferred maintenance-related activities, which are currently a 

higher priority for NNSA.45 Moreover, according to the Fiscal Year 2017

Stockpile Stewardship and Management Plan, several construction 

projects scheduled to start sometime during fiscal year 2016 through 

fiscal year 2020 have been deferred to outside the current FYNSP period 

to address higher NNSA priorities. These deferred projects include the 

Energetic Materials Characterization Facility at Los Alamos; the Weapons 

Engineering Facility at Sandia; the High Explosive Component 

Fabrication and Qualification Facility at Pantex; and the High Explosive 

Science and Engineering Facility, also at Pantex. According to the 

President’s fiscal year 2016 budget, the amount of funding requested for

these four projects totaled approximately $193.8 million for fiscal years 

2017 through 2020.46

According to NNSA officials, there is a propensity for program managers 

who believe program funding is insufficient within the FYNSP to seek 

funding beyond the FYNSP period. As a result of such actions, additional 

funding needs are pushed into the out-years under the assumption that 

NNSA will receive higher funding levels in the future to complete its 

programs. For example, the fiscal year 2017 budget materials show that 

NNSA’s budget estimates for fiscal years 2022 through 2026—the first 5 

 45Technology maturation enables development and delivery of design-to-manufacturing 

capabilities to meet current and future nuclear weapons needs for the nation’s stockpile. In 

addition, many early-stage technologies developed at the national laboratories require 

“maturation” in the form of additional development, testing, or prototyping before 

companies are willing to invest in them for commercials purposes.

46NNSA planned to start construction of the High Explosive Science and Engineering 

Facility at Pantex in fiscal year 2017, design of the High Explosive Component Fabrication 

and Qualification Facility at Pantex and the Energetic Materials Characterization Facility at 

Los Alamos in fiscal year 2018, and design of the Weapons Engineering Facility at Sandia 

in fiscal year 2019.

NNSA Plans Have Repeatedly 

Deferred Costs and Assumed 

Funding Increases beyond the 

FYNSP
Page 31 GAO-17-341 National Nuclear Security Administration

years beyond the FYNSP—may require significant funding increases over 

this period. For example, in fiscal year 2022, the first year beyond the 

FYNSP, NNSA’s modernization budget estimates are projected to rise 

significantly compared with the budget estimates for fiscal year 2021, the 

last year of the FYNSP. Specifically, NNSA estimates that its 

modernization funding needs for fiscal year 2022 may be about $11.3 

billion, or about 7 percent greater than the fiscal year 2021 estimate of 

$10.5 billion. By fiscal year 2026, NNSA estimates that its funding needs 

may total approximately $12.1 billion, which is about 15.3 percent greater 

than the fiscal year 2021 estimate. This increasing need for additional 

funding is commonly referred to as a bow wave. As we have previously 

reported, such bow waves occur when agencies defer costs of their 

programs to the future, beyond their programming periods, and often 

occur when agencies are undertaking more programs than their 

resources can support.47

As figure 1 shows, NNSA’s budget estimates increase each year within 

the FYNSP and then increase more significantly in fiscal year 2022, the 

start of NNSA’s bow wave of out-year funding needs.

 47GAO, 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) 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 32 GAO-17-341 National Nuclear Security Administration

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.

In addition, our analysis shows 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

(see fig. 2).
Page 33 GAO-17-341 National Nuclear Security Administration

Figure 2: Comparison of the National Nuclear Security Administration’s Fiscal Year 2014 through 2017 Stockpile Stewardship 

and Management Plans for Fiscal Years 2014 through 2026

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

addition, the first 5 years of each Stockpile Stewardship and Management Plan represent the FutureYears Nuclear Security Program (FYNSP), which is included in the President’s budget. The FYNSP

covered 2014 through 2018 in the 2014 plan, 2015 through 2019 in the 2015 plan, 2016 through 2020 

in the 2016 plan, and 2017 through 2021 in the 2017 plan. The deferral of major increases in NNSA’s 

overall modernization budget estimates can be observed in the increase in budget estimates from the 

last year of the FYNSP (year 5) to the first year beyond the FYNSP (year 6). As illustrated by the 

bolded line segments presented in this figure, this increase from year 5 to year 6 continues to be 

deferred in each subsequent Stockpile Stewardship and Management Plan—from the expected 

increase from 2018 to 2019 detailed in the 2014 plan to the currently scheduled increase from 2021 

to 2022 as detailed in the 2017 plan.
Page 34 GAO-17-341 National Nuclear Security Administration

Each of the plans for fiscal years 2014 through 2017 shows a pattern of 

significant increases in NNSA’s modernization budget estimates 

immediately after the relevant 5-year FYNSP, representing a deferral of 

modernization costs to the years beyond the FYNSP. 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 FYSNP, 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 

raise cost and schedule risks and also put programs in the position of 

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

be accommodated in future years.48

NNSA’s modernization budget estimates for fiscal years 2022 through 

2026—as presented in the Fiscal Year 2017 Stockpile Stewardship and 

Management Plan—may exceed the out-year projections for funding 

levels in the President’s budget for nuclear modernization efforts during 

that time, raising concerns about the affordability of NNSA’s 

modernization programs beyond the FYNSP. However, the Fiscal Year 

2017 Stockpile Stewardship and Management Plan concludes that 

NNSA’s modernization program is generally affordable in the years 

beyond the FYNSP—an optimistic assessment that is not well 

supported—in spite of the mismatch between its budget estimates and 

likely available funding for fiscal years 2022 through 2026.

The Fiscal Year 2017 Stockpile Stewardship and Management Plan

shows that NNSA’s overall modernization budget estimates for fiscal 

years 2022 through 2026 may exceed the out-year projections for funding 

levels in the President’s fiscal year 2017 budget. According to NNSA’s 

data, the agency’s overall modernization budget estimates total about 

$58.4 billion for fiscal years 2022 through 2026, and the out-year funding 

projections from the President’s fiscal year 2017 budget for the same 

period total about $55.5 billion.49 The President’s out-year funding 

 48GAO-16-620. 

49The out-year projections for funding levels in the President’s budget for fiscal years 2022 

through 2026 are reported on in the 2017 DOD-DOE joint report.

NNSA’s Modernization 

Budget Estimates in the 

Years beyond the FYNSP 

May Exceed Projections of 

the President’s Budget, 

but NNSA Maintains the 

Plan Is Affordable

NNSA’s Modernization Budget 

Estimates for Fiscal Years 

2022 through 2026 May 

Exceed Projections of 

Modernization Funding Levels 

in the President’s Budget for 

That Period
Page 35 GAO-17-341 National Nuclear Security Administration

projections, therefore, are approximately $2.9 billion, or about 5.2 

percent, less than NNSA estimates needing over the same time period. 

We identified a similar mismatch between NNSA’s budget estimates for 

the first 5 years beyond the FYSNP and the President’s out-year funding 

projections for the same period as part of our review of the fiscal year 

2016 nuclear security budget materials.50 Table 5 provides more 

information on the differences by year between NNSA’s modernization 

budget estimates and the out-year funding projections of the President’s 

budget for fiscal years 2022 through 2026.

Table 5: Comparison of NNSA’s Cost Range Estimates, the Fiscal Year 2017 Stockpile Stewardship and Management Plan’s

Weapons Activities Account Budget Estimates, and Out-Year Funding Projections from the President’s Fiscal Year 2017 

Budget for Fiscal Years 2022 through 2026

Dollars in billions

Fiscal Year

2022 2023 2024 2025 2026

Total for 

2022-2026

NNSA’s cost range estimates for the 

Weapons Activities account

High range 12.4 12.6 12.9 13.0 13.2 64.1

Low range 10.5 10.6 10.8 11.2 11.2 54.4

Fiscal year 2017 budget materials

Fiscal Year 2017 Stockpile Stewardship and 

Management Plan’s Weapons Activities 

account budget estimates

11.3 11.5 11.7 11.9 12.1 58.4

Out-year funding projections from the 

President’s fiscal year 2017 budget 

10.7 10.9 11.1 11.3 11.5 55.5

Differences

Amount the plan’s estimates may exceed outyear funding projections in the President’s 

budget

0.6 0.6 0.6 0.6 0.6 2.9

Amount the out-year funding projections in the 

President’s budget may exceed NNSA’s lowrange cost estimates

0.2 0.2 0.3 0.1 0.3 1.2

Sources: GAO analysis of National Nuclear Security Administration (NNSA) data. | GAO-17-341

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

Because of rounding, numbers may not total exactly.

 50GAO-16-290. 
Page 36 GAO-17-341 National Nuclear Security Administration

The 2017 plan acknowledges that NNSA’s estimates may exceed the 

President’s out-year funding projections but notes that those projections

are subject to annual adjustments in the future. Nevertheless, the 

misalignment between these estimates raises questions about the 

affordability of NNSA’s modernization plans in the 5 years beyond the 

FYNSP absent either significant increases in the President’s out-year 

funding projections or reductions in NNSA’s estimated modernization 

funding needs.

The Fiscal Year 2017 Stockpile Stewardship and Management Plan

concludes that NNSA’s nuclear modernization plans for the years beyond 

the FYNSP are generally affordable, and more executable than the 

modernization program presented in the fiscal year 2016 plan, for two 

reasons.

First, when evaluating whether or not its modernization plans are 

affordable, NNSA considers its cost range estimates and whether or not 

the President’s out-year funding projections fall within or outside the 

ranges. Regarding the fiscal year 2017 plan, the President’s out-year 

funding projections exceed NNSA’s low-range cost estimates for its 

modernization programs over 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. Consequently, the 

President’s out-year funding projections may be sufficient to support 

NNSA’s modernization programs assuming program costs approximate 

the low-range cost estimate. Figure 3 illustrates data from the 2017 plan 

showing NNSA’s nominal budget estimates, including high- and lowrange cost estimates for its modernization program, along with the outyear funding projections from the President’s fiscal year 2017 budget, for 

fiscal years 2022 to 2026.

NNSA Concludes Out-Year 

Modernization Programs Are 

Affordable Based on an 

Optimistic Assessment That Is 

Not Well Supported
Page 37 GAO-17-341 National Nuclear Security Administration

Figure 3: 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.

Second, NNSA concludes that its modernization programs are generally 

affordable in the years beyond the FYNSP because, as stated in the 

Fiscal Year 2017 Stockpile Stewardship and Management Plan, 

estimated budget needs will begin to decrease in fiscal year 2027. 

Specifically, the 2017 plan states that the nominal cost of NNSA’s 

modernization program is expected to decrease by approximately $1 

billion in fiscal year 2027.51 At that time, according to the 2017 plan, it is 

anticipated that NNSA’s estimated budgets for its modernization program 

will begin to fall in line with projections of future presidential budgets. The 

 51According to the Fiscal Year 2017 Stockpile Stewardship and Management Plan, the 

approximate billion-dollar reduction that will occur in fiscal year 2027 will be the result of 

the winding down of a number of construction projects slated for the fiscal years 2022 

through 2026 period.
Page 38 GAO-17-341 National Nuclear Security Administration

2017 plan also notes that by fiscal year 2027, NNSA’s projections of the 

President’s out-year modernization budget fall around NNSA’s total highrange cost estimate for its modernization program.52

Nonetheless, NNSA’s conclusion in its 2017 plan that its modernization 

costs are generally affordable in the years beyond the FYNSP is 

optimistic, given the following affordability concerns.

• Potential rising costs of some modernization programs. NNSA’s 

conclusion that its modernization plan is generally affordable is 

predicated on optimistic assumptions regarding the cost of the 

modernization program beyond the FYNSP, particularly for fiscal 

years 2022 through 2026. Specifically, for the overall modernization 

program to be considered affordable during the fiscal years 2022 

through 2026 period, NNSA’s modernization programs would need to 

be collectively executed at the low end of their estimated cost ranges. 

The plan does not discuss, however, options NNSA could pursue to 

ensure an affordable modernization program if costs were to exceed 

its low-range cost estimates. As we noted above, there may be 

potential future cost growth in several modernization programs. For 

example, the B61-12 LEP may cost $200 million to $2.6 billion more 

than the cost estimate presented in the fiscal year 2017 plan, the 

W80-4 LEP may be underfunded by at least $1 billion, and the 

additional scope of work added to the W88 Alteration 370 may 

amount to about $1 billion in added costs. Other cost increases could 

occur if other modernization programs encounter schedule delays or 

unexpected challenges.

• Impending bow wave of funding requirements. As discussed 

above, NNSA is facing a significant bow wave of increased funding 

needs in the 5 years beyond the FYNSP (fiscal years 2022 through 

2026) and a misalignment between its modernization budget 

estimates and projections of the President’s modernization budgets 

during that period. Besides noting the approximate $1 billion reduction 

in modernization budgets beginning in fiscal year 2027, the fiscal year 

2017 plan does not explain how the modernization bow wave and 

misalignment will be addressed by NNSA should the President’s 

budget not increase to close the fiscal years 2022 through 2026 

 52The Fiscal Year 2017 Stockpile Stewardship and Management Plan states that the 

escalation rates for fiscal years 2022 through 2026 match those in the President’s fiscal 

year 2017 budget for those years, and rates for fiscal year 2027 and beyond were 2.25 

percent, consistent with OMB projections of the Consumer Price Index.
Page 39 GAO-17-341 National Nuclear Security Administration

funding gap. The decrease in NNSA’s modernization budget 

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

projected mismatch between NNSA’s budget estimates and the 

President’s out-year funding projections 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.

NNSA’s plan does not specify how the agency intends to address these 

affordability concerns. Specifically, the Fiscal Year 2017 Stockpile 

Stewardship and Management Plan does not assess all options to align 

plans for NNSA’s portfolio of nuclear modernization programs with 

potential future budget estimates, such as increases above projected 

future presidential out-year budgets or cancellation or deferral of 

programs that NNSA could consider undertaking in consultation with DOD 

and the military services. Portfolio management best practices and 

portfolio management standards developed by the Project Management 

Institute state that organizations can optimize their portfolios of programs 

and projects by assessing the organization’s capability and capacity to 

finance specific portfolio components.53 As part of this assessment, 

organizations should determine which portfolio components should 

receive the highest priority and identify portfolio components to be 

suspended, reprioritized, or terminated based on the balancing or 

rebalancing activities. Our March 2009 cost guide also states that an 

assessment of affordability should address requirements at least through 

the programming period and, preferably, several years beyond.54 

Moreover, portfolio management entails operating within the constraint of 

resources expected to be available in the future.55 However, NNSA does 

not include such an assessment in the plan and it does not utilize the 

projected out-year funding availability as a constraining factor when 

evaluating the affordability of its modernization plans.

We have previously found that portfolio reviews can help increase return 

on taxpayers’ investments in weapon systems in a number of ways, such 

as: helping to ensure investments align with national security and military 

 53The Standard for Portfolio Management.

54GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: March 2009).

55The Standard for Portfolio Management.
Page 40 GAO-17-341 National Nuclear Security Administration

strategies, prioritizing the most important investments, selecting the 

optimum mix of investments, identifying and eliminating unwarranted 

duplication, monitoring programs’ health to determine whether changes to 

the portfolio are warranted, and determining whether investments are 

affordable.56 By including an assessment of the affordability of NNSA’s 

portfolio of modernization programs in future versions of the Stockpile 

Stewardship and Management Plan, NNSA could develop a plan that is 

consistent with portfolio management best practices. Such an 

assessment could present options (e.g., potentially deferring the start of 

or canceling specific modernization programs) that NNSA could consider 

to bring its estimates of modernization funding needs into alignment with 

potential future budgets, which could help congressional and NNSA 

decision makers better understand the potential rebalancing of priorities 

and trade-offs that may need to be undertaken to address affordability 

concerns.

NNSA is carrying out an ambitious, costly, decades-long effort to 

modernize the nation’s nuclear security enterprise, which includes 

ensuring that existing nuclear weapons remain safe and reliable and that 

aging and outdated weapons-related facilities are replaced or renovated. 

The next decade represents a particularly challenging period for NNSA’s 

modernization efforts, as the agency plans to simultaneously execute at 

least four LEPs along with major construction projects, such as efforts to 

modernize NNSA’s uranium and plutonium capabilities. However, NNSA’s 

modernization budget estimates for the first 5 years beyond the FYNSP—

fiscal years 2022 through 2026—may exceed the funding levels available 

for modernization in future budgets, raising affordability concerns. NNSA 

acknowledges these differences but provides an optimistic conclusion 

regarding the affordability of its modernization programs. Moreover, 

NNSA has not addressed the projected bow wave of future funding needs 

and mismatch between potential funding needs and potential funding 

available in the years beyond the FYNSP. By not including an 

assessment of the affordability of NNSA’s portfolio of modernization 

programs in the Stockpile Stewardship and Management Plan—such as 

an assessment of the potential implications of funding level increases 

above projected future presidential out-year budgets or of the cancellation 

or deferral of specific modernization programs that NNSA could consider 

taking to bring its estimates of modernization funding needs into 

 56GAO-15-466.

Conclusions
Page 41 GAO-17-341 National Nuclear Security Administration

alignment with potential future budgets—the agency has not developed a 

plan that is consistent with portfolio management best practices.

To help NNSA put forth more credible modernization plans, we 

recommend 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—for 

example, by presenting options NNSA could consider to bring its 

estimates of modernization funding needs into alignment with potential 

future budgets, such as potentially deferring the start of or canceling 

specific modernization programs.

We provided a draft of this report to NNSA for review and comment. We 

also provided an informational copy of our draft report to OMB. NNSA 

provided written comments, which are summarized below and reproduced 

in appendix IV. NNSA also provided technical comments, which we 

incorporated as appropriate.

In its written comments, NNSA did not explicitly agree or disagree with 

our recommendation. Specifically, with respect to our recommendation for 

NNSA to include an assessment of the affordability of its modernization 

program in future Stockpile Stewardship and Management Plans, NNSA 

stated that it compares its financial requirements and budget requests in 

the Stockpile Stewardship and Management Plan and highlights the 

potential risks associated with insufficient resources. In reviewing whether 

NNSA compares its financial requirements and budget requests in the

Fiscal Year 2017 Stockpile Stewardship and Management Plan and 

highlights the potential risks associated with insufficient resources, we 

found that NNSA does not, as stated, highlight the potential risks 

associated with insufficient resources. For example, while the fiscal year 

2017 plan highlights the instances in which NNSA’s estimated funding 

needs exceed projected available resources for fiscal years 2022 through 

2026, the plan does not discuss or highlight risks associated with this 

potential funding shortfall. Moreover, in the 2017 plan NNSA does not 

raise concerns with this potential funding shortfall because it believes 

estimated funding needs fall within its estimates of the high- and lowrange modernization cost estimates for fiscal years 2022 through 2026.

By not articulating the risks and potential program impacts associated 

with this potential funding shortfall, NNSA raises questions about its 

ability to achieve its modernization program goals at cost and on 

Recommendation for 

Executive Action

Agency Comments 

and Our Evaluation
Page 42 GAO-17-341 National Nuclear Security Administration

schedule. NNSA’s budget materials are a key source of information used 

by Congress to make appropriation decisions. Including in future versions

of the Stockpile Stewardship and Management Plan information such as 

an assessment of the potential implications of funding level increases 

above projected future presidential out-year budgets or a discussion of 

broadly construed trade-offs that NNSA could make to align its estimated 

modernization funding needs with potential future budgets would improve 

the transparency and quality of information available to congressional and 

NNSA decision makers. For these reasons, we continue to believe that 

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

portfolio of modernization programs in future versions of the Stockpile 

Stewardship and Management Plan.

NNSA also provided four general comments that summarize key points 

from its technical comments.

First, NNSA stated that clarification was necessary for comparisons made 

in our draft report between the budget estimates in the Fiscal Year 2017 

Stockpile Stewardship and Management Plan and the President’s fiscal 

year 2017 budget, and the assessment of affordability in the fiscal year 

2017 plan. For example, NNSA noted that program-by-program level 

variations in near-term budget justifications, external out-year budget 

estimates, and future years’ planning documents are normal and 

expected for any federal agency. NNSA stated that these differences 

exist primarily in the out-years where the uncertainty is higher and 

estimates are typically not constrained (i.e., by the more rigorous 

programming requirements used during the budgeting process to develop 

the 5-year FYNSP estimates). 

We acknowledge that NNSA’s modernization budget estimates for years 

beyond the FYNSP do not have to align with the 5-year overall federal 

budget estimates in the President’s budget. We clarified this in our report. 

Nevertheless, our March 2009 cost guide states that an assessment of 

affordability should address requirements at least through the 

programming period and, preferably, several years beyond. For these 

reasons, we believe it would be useful for NNSA to take into 

consideration program funding requirements for several years beyond the 

5-year FYNSP period. By including such an assessment in future 

versions of the Stockpile Stewardship and Management Plan, NNSA 

could broadly discuss options (e.g., potentially deferring the start of or 

canceling specific modernization programs) that it might need to consider 

in future programming cycles to bring its estimates of modernization 

funding needs into alignment with potential future budgets.
Page 43 GAO-17-341 National Nuclear Security Administration

In its second general comment, NNSA stated that the draft report also 

compares range estimates in the Fiscal Year 2017 Stockpile Stewardship

and Management Plan data for fiscal years 2022 through 2026 with outyear funding projections in the President’s fiscal year 2017 budget for 

those same years. NNSA stated that it assumes we are referencing the 

out-year budget projections OMB included in an appendix to the 

President’s fiscal year 2017 budget. As we explain in the report, we are 

comparing NNSA’s nuclear modernization budget estimates—its 

estimated funding needs—for fiscal years 2022 through 2026 included in 

the Fiscal Year 2017 Stockpile Stewardship and Management Plan

against the projections of modernization funding levels in the President’s 

fiscal year 2017 budget for the same time period, which are also included 

in the plan. NNSA describes its projections of the President’s future 

budgets as the level of funding NNSA’s modernization programs might 

expect to receive for the out-years. Nevertheless, NNSA stated that 

caution should be used in benchmarking these numbers as decisions in 

the current budget have an amplifying effect on NNSA’s future budgets. 

We are not benchmarking these numbers; instead, we use these out-year 

projections to illustrate that NNSA’s current estimated funding needs 

exceed the projections of available resources by nearly $3 billion over 

fiscal years 2022 through 2026. Therefore, we continue to believe that 

NNSA should address potential funding shortfalls identified in its own 

illustration of budget projections, including the causes of the potential 

shortfalls and options for addressing them in future versions of the 

agency’s plan. 

In its third general comment, NNSA stated that its ability to execute its 

modernization plan under the current projections of future presidential 

budgets is manageable. NNSA stated that the plan provides wide, 

unconstrained range estimates of potential costs in out-years for which

there is uncertainty and that it gauges affordability by evaluating whether 

its modernization budget estimates fall within (or outside) the range 

estimates. NNSA stated that for fiscal years 2022 through 2026, the 

Fiscal Year 2017 Stockpile Stewardship and Management Plan high-end 

cost is approximately 15 percent greater than the total of estimated 

available resources, while the low-end estimate is approximately 2 

percent less. NNSA therefore concluded that its modernization program 

would be manageable under the estimates of future available resources. 

As we state in the report, NNSA’s conclusion that the modernization 

program is generally affordable in the years beyond the FYNSP is 

optimistic and not well supported, particularly given the nearly $3 billion 

mismatch between its budget estimates and likely available funding for 
Page 44 GAO-17-341 National Nuclear Security Administration

fiscal years 2022 through 2026. NNSA’s method of evaluating 

affordability—gauging where the budget projections fall within (or outside)

its cost range estimates—is a broad and generous approach for 

evaluating affordability. We assessed affordability under a narrower, more 

conservative approach—which we further clarified in the report—by 

comparing NNSA’s estimated out-year funding needs against its 

estimates of modernization funding levels that may be available under 

future President budgets. In our view, NNSA risks overstating the 

affordability of its modernization programs for fiscal years 2022 through 

2026 because the funding projections of the President’s out-year 

modernization budgets fall within a very wide range of high and low cost 

estimates. In doing so, NNSA implies that its modernization program 

could still be considered affordable at the high end of the cost range, 

which totals approximately $8.6 billion more than the projections of the 

President’s modernization budgets for fiscal years 2022 through 2026. 

Furthermore, as stated in our report, for the overall modernization 

program to be considered affordable during the fiscal years 2022 through 

2026 period, NNSA’s modernization programs would need to be 

collectively executed at the low end of their estimated cost ranges, which 

may be optimistic because of the potential for increased costs in several 

specific modernization programs.

In its final general comment, NNSA stated that its method for evaluating 

affordability is part of a portfolio management approach in line with the 

level of uncertainty affecting the out-years. NNSA further stated that while 

it is reasonable to evaluate whether potential “trade-space” may be 

sufficient to manage out-year variances, trying to define specific potential 

decisions so far in advance requires a level of precision that would be 

unreliable. NNSA also stated that as the out-years move into the FYNSP 

window, greater scrutiny and prioritization are applied in the programming 

and budgeting processes. We did not recommend that NNSA undertake a 

formal budget programming process to define specific funding decisions 

that would span the 25-year period addressed in the Stockpile 

Stewardship and Management Plan. Instead, we noted that NNSA could 

optimize the management of its portfolio of nuclear modernization 

programs by taking additional steps to assess and discuss the 

affordability of these programs when a gap is apparent between 

projections of potential future funding needs and available resources. This 

is especially true for instances in which NNSA’s estimated costs exceed 

projections of funding to be available in the future. As we state in our 

report, taking these additional steps—which are in line with portfolio 

management best practices—could allow for a more fulsome discussion 

in future Stockpile Stewardship and Management Plans of funding 
Page 45 GAO-17-341 National Nuclear Security Administration

shortfalls, the potential near- and long-term impacts of such shortfalls, 

and options to be considered so as to bring estimated costs into 

alignment with potential future budgets. Therefore, we continue to believe 

that such a discussion could help congressional and NNSA decision 

makers better understand the potential trade-offs and rebalancing of 

priorities that may need to be undertaken in the future to align budgets 

and plans.

We are sending copies of this report to the appropriate congressional 

committees, the NNSA Administrator, the Director of OMB, and other 

interested parties. In addition, the report is available at no charge on the 

GAO website at http://www.gao.gov.

If you or your staff members have any questions about this report, 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 report. GAO staff who made major contributions to 

this report are listed in appendix V.

David C. Trimble

Director, Natural Resources and Environment
Page 46 GAO-17-341 National Nuclear Security Administration

List of Committees

The Honorable John McCain

Chairman

The Honorable Jack Reed

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Lamar Alexander

Chairman

The Honorable Dianne Feinstein

Ranking Member

Subcommittee on Energy and Water Development

Committee on Appropriations

United States Senate

The Honorable Mac Thornberry

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable Mike Simpson

Chairman

The Honorable Marcy Kaptur

Ranking Member

Subcommittee on Energy and Water Development, 

and Related Agencies

Committee on Appropriations

House of Representatives
Appendix I: Objectives, Scope, and 

Methodology

Page 47 GAO-17-341 National Nuclear Security Administration

Our objectives were to assess the extent to which the National Nuclear 

Security Administration’s (NNSA) fiscal year 2017 nuclear security budget 

materials (1) differ, if at all, from its budget estimates and plans for 

modernization activities as presented in its fiscal year 2016 budget 

materials and (2) align with NNSA’s modernization plans.

We limited the scope of our review to NNSA’s Weapons Activities 

appropriations account because NNSA’s activities in the Stockpile 

Stewardship and Management Plan are funded by this account. This 

scope is consistent with that of our March 2016 review.1 We focused our 

review on major modernization efforts—that is, the refurbishment of 

nuclear weapons through life extension programs (LEP) and alterations 

and major construction efforts to replace existing, aging facilities for 

plutonium and uranium.2 The budget projections in the fiscal year 2016 

and 2017 Stockpile Stewardship and Management Plans each contain 

budget dollar figures for 25 years, presented in nominal dollar values, 

including high- and low-range cost estimates, that also reflect potential 

future costs and which attempt to take into account the significant 

uncertainties that make up the estimates.3 Our report presents all figures 

in nominal dollars unless otherwise noted. Further, all years noted in our 

report refer to fiscal years, unless otherwise noted.

To determine the extent to which NNSA’s budget estimates and plans for 

modernization activities differed from those in the fiscal year 2016 nuclear 

security budget materials, we compared the information in the fiscal year 

 1

GAO, 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).

2

LEPs extend, through refurbishment of components, the operational lives of weapons in 

the nuclear stockpile by 20 to 30 years and certify these weapons’ military performance 

requirements without underground nuclear testing. Much like an LEP, a weapon alteration 

replaces or refurbishes components to ensure that a weapon can continue to meet military 

requirements. However, an alteration generally refurbishes fewer components than an 

LEP and does not specifically extend a weapon’s operational lifetime.

3

Nominal dollars, which are also referred to as current dollars, are valued in the prices of 

the current year—that is, in terms of the prices that prevail at the time (with no 

adjustments to remove the effects of inflation). 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 48 GAO-17-341 National Nuclear Security Administration

2017 materials with the information in the fiscal year 2016 materials.4

NNSA’s nuclear security budget materials comprise two key documents 

that are issued annually: the agency’s budget justification, which contains 

estimates for the 5-year Future-Years Nuclear Security Program 

(FYNSP), and the Stockpile Stewardship and Management Plan, which 

provides budget estimates over the next 25 years.5 In particular, for the 

purposes of this report, we compared the fiscal years 2017 through 2041 

period from the 2017 plan with the fiscal years 2016 through 2040 period 

from the 2016 plan. Comparing the activities and budget estimates 

intended to support these activities across the 25-year periods in the 

different plans provides insights for budgeting planning purposes as to 

how NNSA’s nuclear security budget materials have changed from one 

plan to the next. Specifically, we compared the 2017 and 2016 budget 

materials (1) for the four broad modernization areas—stockpile; 

infrastructure; research, development, testing, and evaluation; and other 

weapons activities—and (2) for specific weapons refurbishment activities 

and major construction projects. We interviewed knowledgeable officials 

from NNSA about changes we identified between the 2017 and 2016 

budget materials. We also reviewed a third document on plans for the 

nuclear deterrent that includes information on the Department of 

Defense’s (DOD) and Department of Energy’s (DOE) modernization 

budget estimates. We refer to this annual report that DOD and DOE are 

required to submit jointly to the relevant Senate and House committees 

and subcommittees as the DOD-DOE joint report. We compared the 

information in the 2017 DOD-DOE joint report with that in the Fiscal Year 

2017 Stockpile Stewardship and Management Plan.

To determine the extent to which NNSA’s budget materials align with its 

modernization plans, we compared information on the budget estimates 

in the fiscal year 2017 budget materials with the information on 

modernization plans in the budget materials, as well as with the DODDOE joint report, and reviewed our prior reports to provide context for the 

 4

The basis for the cost estimates beyond the FYNSP varies depending on the individual 

programs or subprograms. Some portions of the programs and activities funded from the 

Weapons Activities appropriations account are assumed to continue beyond the FYNSP 

at the same level of effort as in the FYNSP. For these cost projections, NNSA used 

inflation escalation factors based on numbers provided by OMB. For other programs and 

activities—the LEPs and major construction projects—NNSA uses either the mid-point 

between the range of estimates or a more robust bottom-up estimate used as the 

program’s or project’s baseline cost estimate.

5

The Stockpile Stewardship and Management Plan is intended as a budgetary planning 

guide—a strategic program of record—for the next 25 years.
Appendix I: Objectives, Scope, and 

Methodology

Page 49 GAO-17-341 National Nuclear Security Administration

concerns we identified. We reviewed portfolio management best practices 

identified in our prior reports and the portfolio management standards 

developed by the Project Management Institute and determined that 

these practices were applicable to our review of NNSA’s portfolio of 

nuclear modernization programs.6 We also interviewed NNSA officials to 

obtain further information on changes to modernization plans and 

discussed any perceived misalignments with them. In addition, we 

interviewed officials from the Office of Management and Budget (OMB) to 

discuss the Secretary of Energy’s December 2015 letter to the Director of 

OMB and the steps taken by OMB in response to the letter.

For weapons refurbishment efforts under way during the 25 years 

covered by the Fiscal Year 2017 Stockpile Stewardship and Management 

Plan, we analyzed NNSA’s budget estimates for these activities over the 

25-year period by comparing them with NNSA’s internally developed cost 

ranges for each LEP. According to NNSA officials, NNSA uses two 

different approaches to estimate the costs of all LEPs except the W76-1. 

Under the first approach, according to officials, NNSA develops specific 

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

describe this as a detailed approach to developing the LEP budget 

estimates, which, among other things, integrates resource and schedule 

information from site participants. Under the second approach that NNSA 

refers to as a “top-down” process, NNSA uses historical LEP cost data 

and complexity factors to project high and low cost ranges for each LEP 

distributed over the life of the program using an accepted cost distribution 

method. Officials noted that the values in these cost ranges reflect 

idealized funding profiles and do not account for the practical constraints 

of the programming and budgeting cycle.

For the W76-1 LEP, NNSA has developed specific budget estimates by 

year. Because the W76-1 LEP is the basis for NNSA’s top-down model, 

NNSA does not develop high and low cost ranges for it. Instead, NNSA 

published the W76-1 LEP estimates in the Fiscal Year 2017 Stockpile 

Stewardship and Management Plan as a comparison between the 

FYNSP request and a single LEP model line. For the W76-1 LEP, we 

compared the budget estimates with the LEP model line.

 6

GAO, Weapon System Acquisitions: Opportunities Exist to Improve the Department of 

Defense’s Portfolio Management, GAO-15-466 (Washington, D.C: Aug. 27, 2015) and 

Project Management Institute, Inc., The Standard for Portfolio Management, 3rd ed. 

(Newtown Square, PA: 2013).
Appendix I: Objectives, Scope, and 

Methodology

Page 50 GAO-17-341 National Nuclear Security Administration

For all LEPs except the W76-1, we assessed the extent to which the 

specific bottom-up budget estimates were aligned with the high and low 

cost ranges developed through the top-down model. Specifically, we 

examined where the specific budget estimates were under the low end of 

the cost range predicted by the top-down model. We did this by reviewing 

charts in the Fiscal Year 2017 Stockpile Stewardship and Management 

Plan and the underlying data for those charts. When the low cost range 

exceeded the budget estimates, we followed up with NNSA officials for 

additional information.

To assess the reliability of the data underlying NNSA’s budget estimates, 

we reviewed the data to identify missing items, outliers, or obvious errors; 

interviewed NNSA officials knowledgeable about the data; and compared 

the figures in the President’s fiscal year 2017 budget with those in the

fiscal year 2016 and fiscal year 2017 Stockpile Stewardship and 

Management Plans to assess the extent to which they were consistent. 

We determined that the data were sufficiently reliable for our purposes, 

which were to report the total amount of budget estimates and those 

estimates dedicated to certain programs and budgets and to compare 

them with last year’s estimates.

We conducted this performance audit from April 2016 to April 2017 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.
Appendix II: Information on Life Extension 

Program and Alteration Budget Estimates and 

Cost Ranges as of Fiscal Year 2017

Page 51 GAO-17-341 National Nuclear Security Administration

The National Nuclear Security Administration (NNSA) has developed 

budget estimates for its nuclear weapons life extension programs (LEP)—

the B61-12, W76-1, W80-4, interoperable warhead (IW)-1, IW-2, IW-3, 

and B61-12 follow-on—and the W88 Alteration 370. The estimates 

include NNSA’s internally developed high and low cost ranges for each 

program except for the W76-1.1 The following figures present budget 

estimates for each LEP and alteration. The budget estimates appear as 

bars for each year, while the high and low cost ranges are represented by 

lines across the figures (in the case of the W76-1, the line represents the 

LEP model). Similar figures appear in the Fiscal Year 2017 Stockpile 

Stewardship and Management Plan.

B61-12: The B61 bomb is one of the oldest nuclear weapons in the 

stockpile. The B61-12 LEP will consolidate and replace the B61-3, -4, -7, 

and -10 bombs. According to the Fiscal Year 2017 Stockpile Stewardship 

and Management Plan, this consolidation will enable a reduction in the 

number of gravity bombs, which is consistent with the objectives of the 

2010 Nuclear Posture Review. The first production unit of the B61-12 is 

planned for fiscal year 2020; the program is scheduled to end in 2025. In 

the Fiscal Year 2017 Stockpile Stewardship and Management Plan, 

NNSA estimates that the B61-12 LEP will require a total of $5.1 billion 

from 2017 through 2025. As seen in figure 4, which illustrates NNSA’s 

budget estimates against projected cost ranges, the low-range cost 

estimate of $199.6 million for fiscal year 2025 is not aligned with the 

program’s budget estimate, as it exceeds the budget estimate of $64.4 

million by about $135.2 million.

 1

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 cost estimates for it. 

Appendix II: Information on Life Extension 

Program and Alteration Budget Estimates 

and Cost Ranges as of Fiscal Year 2017
Appendix II: Information on Life Extension 

Program and Alteration Budget Estimates and 

Cost Ranges as of Fiscal Year 2017

Page 52 GAO-17-341 National Nuclear Security Administration

Figure 4: B61-12 Life Extension Program Budget Estimates from 2016 to 

Completion

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

W76-1: The W76 warhead was first introduced into the stockpile in 1978 

and is deployed with the Trident II D5 missile on the Ohio-class nuclear 

ballistic missile submarines. The W76-1 LEP is intended to extend the 

original warhead service life and address aging issues, among other 

things. The first production unit was completed in September 2008, and 

the program will end in calendar year 2020. In the Fiscal Year 2017 

Stockpile Stewardship and Management Plan, NNSA estimates that 

approximately $593.5 million will be required for this program from 2017 

through 2020. As seen in figure 5, which illustrates NNSA’s budget 

estimates against the program’s cost model estimates, the cost model 

estimates are not aligned with the program’s budget estimates for fiscal 

years 2017, 2019, and 2020. Specifically, the cost model estimate of 

$228.8 million for 2017 exceeds the program’s budget estimate of $222.9 

million by about $5.9 million, the cost model estimate of $175.4 million for 

2019 exceeds the program’s budget estimate of $118.4 million by about 

$57 million, and the cost model estimate of $108.6 million for 2020 
Appendix II: Information on Life Extension 

Program and Alteration Budget Estimates and 

Cost Ranges as of Fiscal Year 2017

Page 53 GAO-17-341 National Nuclear Security Administration

exceeds the program’s budget estimate of $28.1 million by about $80.5 

million.

Figure 5: W76-1 Life Extension Program Budget Estimates from 2016 to Completion

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

W80-4: The W80-4 LEP is intended to provide a warhead for a future 

long-range standoff missile that will replace the Air Force’s current airlaunched cruise missile. The first production unit is planned for fiscal year 

2025, and the program is scheduled to end in fiscal year 2032. In the 

Fiscal Year 2017 Stockpile Stewardship and Management Plan, NNSA 

estimates that the W80-4 LEP will require approximately $8.4 billion from 

2017 through 2032. As seen in figure 6, which illustrates NNSA’s budget 

estimates against projected cost ranges, the low-range cost estimate of 

$247.2 million for fiscal year 2017 is not aligned with the program’s 

budget estimate, as it exceeds the budget estimate of $220.3 million by 

about $26.9 million.
Appendix II: Information on Life Extension 

Program and Alteration Budget Estimates and 

Cost Ranges as of Fiscal Year 2017

Page 54 GAO-17-341 National Nuclear Security Administration

Figure 6: W80-4 Life Extension Program Budget Estimates from 2016 to Completion

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

W88 Alteration 370: Among other things, the W88 Alteration 370 will 

replace the arming, fuzing, and firing subsystem for the W88 warhead, 

which is deployed on the Navy’s Trident II D5 submarine-launched 

ballistic missile system. In November 2014, the Nuclear Weapons Council 

decided to replace the conventional high explosive main charge, which 

led to an increase in costs for the alteration. The first production unit is 

scheduled for December 2019, and the program is scheduled to end in 

fiscal year 2025. In the Fiscal Year 2017 Stockpile Stewardship and 

Management Plan, NNSA estimates that the program will require a total 

of $1.9 billion from 2017 through 2025. As seen in figure 7, which 

illustrates NNSA’s budget estimates against projected cost ranges, the 

low-range cost estimates are not aligned with the program’s budget 

estimates for fiscal years 2020 and 2021. Specifically, the low-range cost 

estimate of $260.2 million for fiscal year 2020 exceeds the program’s 

budget estimate of $245.8 million by about $14.4 million. Further, the low-
Appendix II: Information on Life Extension 

Program and Alteration Budget Estimates and 

Cost Ranges as of Fiscal Year 2017

Page 55 GAO-17-341 National Nuclear Security Administration

range cost estimate of $258.7 million for fiscal year 2021 exceeds the 

program’s budget estimate of $213.8 million by about $44.9 million.

Figure 7: W88 Alteration 370 (with Conventional High Explosive Refresh) Budget 

Estimates from 2016 to Completion

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

IW-1: The IW-1, also known as the W78/88, is the first ballistic missile 

warhead LEP being produced under NNSA’s interoperable strategy to 

transition the stockpile to three interoperable ballistic missile warheads 

and two air-delivered warheads. The first production unit is planned for 

fiscal year 2030, and the LEP is scheduled to end in fiscal year 2043. In 

the Fiscal Year 2017 Stockpile Stewardship and Management Plan, 

NNSA estimates that the program will require a total of $12.4 billion from 

2020 to 2041. As seen in figure 8, which illustrates NNSA’s budget 

estimates against projected cost ranges, the low-range cost estimates are 

not aligned with the program’s budget estimates for fiscal years 2019 and 

2020. Specifically, the low-range cost estimate for fiscal year 2019 is 

$48.8 million, but the program’s budget estimate does not include any 

funding for that year. Further, the low-range cost estimate of $146.3 
Appendix II: Information on Life Extension 

Program and Alteration Budget Estimates and 

Cost Ranges as of Fiscal Year 2017

Page 56 GAO-17-341 National Nuclear Security Administration

million for fiscal year 2020 exceeds the program’s budget estimate of 

$112.4 million by about $33.9 million.

Figure 8: IW-1 Life Extension Program Budget Estimates from 2019 through 2041

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

a

The internal cost estimate developed for the interoperable warhead (IW)-1 life extension program 

(LEP) includes a low-range cost estimate of $48.8 million and a high-range cost estimate of $76.0 

million for fiscal year 2019. However, the IW-1 LEP has no funding for fiscal year 2019 because of a 

decision made by the Nuclear Weapons Council in May 2014 to defer this program until fiscal year 

2020.

IW-2: The IW-2 is an interoperable warhead intended to replace the 

W87/88 warhead. The Nuclear Weapons Council has not yet developed a 

more detailed implementation plan for this LEP. The first production unit 

is planned for fiscal year 2034, and the LEP is scheduled to end in fiscal 

year 2049. In the Fiscal Year 2017 Stockpile Stewardship and 

Management Plan, NNSA estimates that the program will require a total 

of $11.4 billion from 2023 through 2041. See figure 9 for an illustration of 

budget estimates against projected cost ranges.
Appendix II: Information on Life Extension 

Program and Alteration Budget Estimates and 

Cost Ranges as of Fiscal Year 2017

Page 57 GAO-17-341 National Nuclear Security Administration

Figure 9: IW-2 Life Extension Program Budget Estimates from 2023 through 2041

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

IW-3: The IW-3 is intended to provide the third interoperable warhead for 

NNSA’s future strategy for the stockpile. According to the Fiscal Year 

2017 Stockpile Stewardship and Management Plan, the IW-3 will involve 

the W76-1. The first production unit is planned for fiscal year 2041, and 

the LEP is scheduled to end in fiscal year 2057. In the Fiscal Year 2017

Stockpile Stewardship and Management Plan, NNSA estimates that a 

total of $6.8 billion will be required for this program from 2030 through 

2041. See figure 10 for an illustration of budget estimates against 

projected cost ranges.
Appendix II: Information on Life Extension 

Program and Alteration Budget Estimates and 

Cost Ranges as of Fiscal Year 2017

Page 58 GAO-17-341 National Nuclear Security Administration

Figure 10: IW-3 Life Extension Program Budget Estimates from 2030 through 2041

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

B61-12 follow-on: According to NNSA officials, the B61-12 follow-on 

LEP is intended to replace the B61-12 bomb. The Fiscal Year 2017

Stockpile Stewardship and Management Plan provides total estimated 

cost data for this LEP for fiscal years 2038 through 2057; however, a 

planned first production unit is not yet specified. In the Fiscal Year 2017 

Stockpile Stewardship and Management Plan, NNSA estimates that a 

total of $2.1 billion will be required for this program from 2038 through 

2041. See figure 11 for an illustration of budget estimates against 

projected cost ranges.
Appendix II: Information on Life Extension 

Program and Alteration Budget Estimates and 

Cost Ranges as of Fiscal Year 2017

Page 59 GAO-17-341 National Nuclear Security Administration

Figure 11: B61-12 Follow-On Life Extension Program Budget Estimates from 2038 

through 2041

Note: Amounts are presented in nominal dollars, which are not adjusted for the effects of inflation.
Appendix III: Schedule Changes for Major 

Modernization Efforts for Fiscal Years 2010 

through 2017

Page 60 GAO-17-341 National Nuclear Security Administration

The milestone dates for major modernization programs remained the 

same in the Fiscal Year 2017 Stockpile Stewardship and Management 

Plan as in the previous year. The 2010 Nuclear Posture Review included 

discussion of a number of planned major modernization programs for the 

National Nuclear Security Administration (NNSA), while other programs 

were identified in the 2011 update to the Department of DefenseDepartment of Energy joint report and subsequent Stockpile Stewardship 

and Management Plans. Table 6 shows key milestone dates for life 

extension programs and major construction projects as they have 

changed since 2010, according to agency planning documents.

Table 6: Changes in Schedules for the National Nuclear Security Administration’s (NNSA) Major Modernization Efforts, 

According to Agency Planning Documents, Fiscal Years 2010 through 2017

2010 

Nuclear 

Posture

Review

2011 

Update to 

the DODDOE joint 

reporta

2012 Stockpile 

Stewardship &

Management 

Plan

2014 Stockpile 

Stewardship &

Management 

Plan

2015 Stockpile 

Stewardship &

Management 

Plan

2016 Stockpile 

Stewardship &

Management 

Plan

2017 Stockpile 

Stewardship &

Management 

Plan

W76-1 life 

extension 

program (LEP) 

end of 

production 

dateb

2017 2018 2018 2019 2019 2019 2019

B61-12 LEP 

first production 

unit datec

2017 2017 2017 2019 2020 2020 2020

W88 Alteration 

370 first 

production unit 

datec

Not 

discussed

Not 

provided

2018d 2019 2020 2020 2020

Cruise missile 

(W80-4) LEP 

first production 

unit datec

Not 

discussed

Not 

discussed

2031 2024 2027 2025 2025

W78/88-1 / 

Interoperable 

Warhead (IW1) LEP first 

production unit 

datec

Initiate 

study

Study 

options

Study 

optionse 2025 2030 2030 2030

IW-2 LEP first 

production unit 

datec

Not 

discussed

Not 

discussed

Not 

discussed

2031 2034 2034 2034

IW-3 LEP first 

production unit 

datec

Not 

discussed

Not 

discussed

Not 

discussed

2037 2041 Not 

specified

2041f

Appendix III: Schedule Changes for Major 

Modernization Efforts for Fiscal Years 2010 

through 2017
Appendix III: Schedule Changes for Major 

Modernization Efforts for Fiscal Years 2010 

through 2017

Page 61 GAO-17-341 National Nuclear Security Administration

2010 

Nuclear 

Posture

Review

2011 

Update to 

the DODDOE joint 

reporta

2012 Stockpile 

Stewardship &

Management 

Plan

2014 Stockpile 

Stewardship &

Management 

Plan

2015 Stockpile 

Stewardship &

Management 

Plan

2016 Stockpile 

Stewardship &

Management 

Plan

2017 Stockpile 

Stewardship &

Management 

Plan

Uranium 

Processing 

Facility 

operational 

dateg

2021 2024 2024 Phase 1: 2025

Begin phases 

2 and 3 in 

2030

Phase 1: 2025

Begin phases 

2 and 3 in 

2030

Completion 

of most

activities by 

2025

Completion 

of most activities 

by 2025 

Chemistry and 

Metallurgy 

Research 

Replacement / 

plutonium 

sustainment 

strategy 

operational 

dateh

2021 2023 2023 Deferred. 

Alternative 

strategy in 

development

Deferred. 

Alternative 

strategy in 

development

Construct at 

least two 

modular 

structures that 

will achieve full 

operating 

capacity by 

2027h

Begin 

demonstrating 

higher levels of 

pit 

manufacturing 

capacity by 

2027h

Sources: GAO analysis of NNSA planning documents and the joint report by the Departments of Defense (DOD) and Energy (DOE). | GAO-17-341

Note: NNSA did not publish a Stockpile Stewardship and Management Plan for 2013.

a

This document is the update to the fiscal year 2011 DOD-DOE joint report, which contained the first 

set of long-term budget estimates made available after the release of the 2010 Nuclear Posture 

Review.

b

For the W76-1 LEP, we report the date from the end of production rather than for the first production 

unit because the first production unit was completed in 2008.

c

The first production unit is the first complete warhead from a production line certified for deployment.

d

The first production unit schedule discussed is for a W88 program of smaller scope than the W88 

Alteration 370.

e

The Fiscal Year 2012 Stockpile Stewardship and Management Plan included separate schedules for 

first production units of LEPs for the W88 and W78 warheads if a single, interoperable warhead was 

not to be pursued. In June 2012, the Nuclear Weapons Council authorized a study for a W78/88-1 

interoperable warhead, now known as the IW-1.

f

According to the Fiscal Year 2017 Stockpile Stewardship and Management Plan, the first production 

unit date for the IW-3 LEP is planned for 2041, which has not changed since the 2015 plan. The 

Fiscal Year 2016 Stockpile Stewardship and Management Plan did not include this planned first 

production date for the IW-3 LEP.

g

The Uranium Processing Facility construction project began as a single large project but was later 

broken up into seven separately phased projects. The current Uranium Processing Facility line item 

construction project is intended to replace activities in an aging building at Y-12.

h

In 2014, NNSA adopted a new three-step plutonium sustainment strategy. Two steps pertain to the 

Chemistry and Metallurgy Research Replacement (CMRR) project, which NNSA has estimated will 

be completed by 2024. The third step relates to the construction of two separate laboratory modules 

by the end of 2027 in support of the goal of achieving a capability of 50 to 80 pits per year by 2030. 

The CMRR project and the plutonium modular approach are separate projects with separate budget 

lines; however, both support NNSA’s overall long-term plutonium sustainment strategy and efforts to 

meet pit production requirements. Therefore, for the purposes of this table, we include information 

related to the CMRR project, the plutonium modular approach, and the overall plutonium sustainment 

strategy.
Appendix IV: Comments from the National 

Nuclear Security Administration

Page 62 GAO-17-341 National Nuclear Security Administration

Appendix IV: Comments from the National 

Nuclear Security Administration
Appendix IV: Comments from the National 

Nuclear Security Administration

Page 63 GAO-17-341 National Nuclear Security Administration
Appendix V: GAO Contact and Staff 

Acknowledgments

Page 64 GAO-17-341 National Nuclear Security Administration

David C. Trimble, (202) 512-3841 or trimbled@gao.gov

In addition to the contact named above, William Hoehn (Assistant 

Director), Greg Campbell, Antoinette Capaccio, Pamela Davidson, Philip 

Farah, Bridget Grimes, Kevin Remondini, Dan C. Royer, and Kevin 

Tarmann made key contributions to this report.

Appendix V: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(100720)
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