MODERNIZING THE 

NUCLEAR 

SECURITY 

ENTERPRISE

NNSA’s Budget 

Estimates Do Not 

Fully Align with Plans

Report to Congressional Committees

December 2013

GAO-14-45

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-45, a report to 

congressional committees

December 2013

MODERNIZING THE NUCLEAR SECURITY 

ENTERPRISE 

NNSA’s Budget Estimates Do Not Fully Align with 

Plans

Why GAO Did This Study

Nuclear weapons have been and 

continue to be an essential part of the 

nation’s defense strategy. The end of 

the cold war resulted in a shift from

designing, testing, and producing new 

nuclear weapons to maintaining the 

existing stockpile indefinitely and 

extending the operational lives of these 

weapons through refurbishment, 

without nuclear testing. At the same 

time, the production infrastructure for 

nuclear weapons has become 

outdated.

The National Defense Authorization 

Act for Fiscal Year 2011 mandated 

GAO to report annually on whether

NNSA’s nuclear security budget 

materials provide for sufficient funding 

to modernize and refurbish the nuclear 

security enterprise. This report 

addresses (1) changes to NNSA’s

budget estimates for modernizing the 

nuclear security enterprise since fiscal 

year 2012 and (2) the extent to which

these budget estimates align with

NNSA’s modernization plans. 

To answer these objectives, GAO 

reviewed NNSA’s fiscal year 2012 and 

2014 nuclear security budget 

materials, which are composed of 

NNSA’s budget request justification

and its Stockpile Stewardship and 

Management Plan, which describes 

modernization plans and budget 

estimates for the next 20 years or 

longer. GAO also interviewed NNSA 

and DOD program officials.

What GAO Recommends

GAO recommends that NNSA include 

a range of budget estimates for 

preliminary projects and programs in 

future modernization plans. NNSA 

generally concurred with the 

recommendation.

What GAO Found

The National Nuclear Security Administration’s (NNSA) total budget estimates for 

modernizing the nuclear security enterprise for fiscal years 2014 through 2031 

have increased by about $19 billion overall when compared with the estimates in 

the agency’s fiscal year 2012 budget materials, with most of the increase 

occurring in fiscal year 2019 and beyond (see fig.). Factors such as 

sequestration, the achievability of planned cost savings, and pension liabilities 

could affect the accuracy of future budget estimates as presented. 

Comparison of Budget Estimates for Nuclear Modernization Activities in the National Nuclear 

Security Administration’s 2012 and 2014 Budget Materials

Budget estimates for two of three areas discussed in NNSA’s modernization 

plans may not represent total funding needed and therefore do not fully align with 

aspects of these plans. In the area of stockpile maintenance and refurbishment, 

budget estimates increased by $27 billion—accounting for more than the total 

increase of $19 billion to overall budget estimates for modernization—primarily 

due to changes in the way that NNSA calculated budget estimates for nuclear 

weapons refurbishment programs. However, NNSA’s plans for two weapons 

refurbishment programs also indicate that additional funding may be needed 

before fiscal year 2019 to meet scheduled milestones. In the infrastructure and 

science, technology, and engineering capabilities areas, NNSA’s budget 

estimates decreased slightly. However, in the infrastructure area, NNSA did not 

include in its budget estimates billions of dollars in planned major construction 

projects because officials said these infrastructure plans were too preliminary. 

Providing Congress with budget estimates that reflect long-term plans and the 

expected funding needed to execute these plans, even if preliminary, helps in 

prioritizing projects and funding and aids in congressional decision making.

View GAO-14-45. For more information, 

contact David C. Trimble at (202) 512-3841 or 

trimbled@gao.gov.
Page i GAO-14-45 Modernizing the Nuclear Security Enterprise

Letter 1 

Background 7

Total Budget Estimates for Modernization Have Increased, but the 

Estimates May Not Be Fully Accurate 12

Budget Estimates for Two of Three Areas May Not Represent 

Total Funding Needed and Do Not Fully Align with Aspects of 

Modernization Plans 18

Conclusions 34

Recommendation for Executive Action 35

Agency Comments and Our Evaluation 35

Appendix I Scope and Methodology 38

Appendix II Comparison of Planned Construction Projects in the 2012 and 2014 

Stockpile Stewardship and Management Plans 42

Appendix III Comments from the Department of Energy 48

Appendix IV GAO Contact and Staff Acknowledgments 50

Related GAO Products 51

Tables

Table 1: Types of Nuclear Weapons 9

Table 2: Changes in the National Nuclear Security 

Administration’s Budget Estimates for Modernization for 

2014 to 2031 13

Contents
Page ii GAO-14-45 Modernizing the Nuclear Security Enterprise

Figures

Figure 1: Time Frames Covered by the 2012 and 2014 National 

Nuclear Security Administration’s Nuclear Security 

Budget Materials 6

Figure 2: Comparison of Budget Estimates for Nuclear 

Modernization Activities in the National Nuclear Security 

Administration’s 2012 and 2014 Budget Materials 14

Figure 3: Amount of the Reductions That the National Nuclear 

Security Administration Incorporated into its Budget 

Estimates for Management Efficiencies and Workforce 

Prioritization Savings 16

Figure 4: Comparison of Budget Estimates for the Stockpile Area 

in the National Nuclear Security Administration’s 2012 

and 2014 Budget Materials 19

Figure 5: Comparison of Planned Schedules for Life Extension 

Programs and Major Alterations from the 2012 and 2014 

Budget Materials 22

Figure 6: Budget Estimates for the Cruise Missile Warhead Life 

Extension Program and the W78/88-1 Life Extension 

Program 24

Figure 7: Comparison of Budget Estimates for Infrastructure in the 

2012 and 2014 Budget Materials 26

Figure 8: Estimated Funding Needed to Complete Construction 

Projects Compared with Budget Estimates in the 2014 

Budget Materials 30

Figure 9: Comparison of Budget Estimates for the Science, 

Technology, and Engineering Capabilities Area in the 

2012 and 2014 Budget Materials 32

Figure 10: Comparison of Schedule and Cost Ranges for 

Approved Construction Projects in the 2012 and 2014 

Plans 43

Figure 11: Comparison of Schedule and Cost Ranges for 

Proposed Construction Projects in the 2012 and 2014 

Plans 45
Page iii GAO-14-45 Modernizing the Nuclear Security Enterprise

Abbreviations

CMRR-NF Chemistry and Metallurgy Research Replacement 

Nuclear Facility

DOD Department of Defense

DOE Department of Energy

FYNSP Future-Years Nuclear Security Program

LANL Los Alamos National Laboratory

LEP life extension program

LLNL Lawrence Livermore National Laboratory

NNSA National Nuclear Security Administration

SNL Sandia National Laboratories 

SSMP Stockpile Stewardship and Management Plan

ST&E science, technology, and engineering

UPF Uranium Processing Facility

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-14-45 Modernizing the Nuclear Security Enterprise

441 G St. N.W.

Washington, DC 20548

December 11, 2013

Congressional Committees

Nuclear weapons have been and continue to be an essential part of the 

nation’s defense strategy. Since 1992, the United States has observed a 

moratorium on underground testing of nuclear weapons. During the cold 

war, the nation designed, tested, and produced new nuclear weapons. 

Since then, the strategy has shifted to maintaining the existing nuclear 

weapons stockpile indefinitely by extending the operational lives of these 

weapons through refurbishment, without nuclear testing. The Department 

of Energy’s (DOE) National Nuclear Security Administration (NNSA)1 is 

responsible for activities in pursuit of this mission, which is largely 

executed at eight government-owned, contractor-operated sites that 

comprise its nuclear security enterprise.2 This science-based approach to 

stockpile stewardship has ensured a credible U.S. nuclear deterrent 

without full-scale nuclear testing.

After the cold war, the production infrastructure of the nuclear security 

enterprise had aged and became outdated. The 2001 Nuclear Posture 

Review found that the nuclear weapons manufacturing infrastructure had 

atrophied and needed to be repaired.3 The review also called for the 

development of a “responsive infrastructure” that would support a smaller 

nuclear deterrent. NNSA’s Complex Transformation effort in the mid-

 

1

NNSA is a separately organized agency within DOE that is responsible for the 

management and security of DOE’s nuclear weapons, nuclear nonproliferation, and naval 

reactor programs.

2

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 Kansas City Plant in Missouri, 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. 

3

Section 1041 of the Floyd D. Spence Defense Authorization Act for Fiscal Year 2001 

(Pub. L. No. 106-398) required the Secretary of Defense, in consultation with the 

Secretary of Energy, to “conduct a comprehensive review of the nuclear posture of the 

United States for the next 5 to 10 years.” The 2001 Nuclear Posture Review was the 

second post-cold war review of U.S. strategic nuclear forces. The first one was conducted 

in 1994. 
 

Page 2 GAO-14-45 Modernizing the Nuclear Security Enterprise

2000s sought to transform the nuclear security enterprise into a smaller, 

more efficient enterprise that could respond to changing national security 

challenges.4 The 2010 Nuclear Posture Review built on these efforts by 

identifying long-term modernization goals and requirements, including 

sustaining a safe, 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 (ST&E) base.5 To meet these 

modernization goals, NNSA is refurbishing weapons in the stockpile to 

extend their operational lives; replacing or renovating research, 

development, and production facilities that date back to the 1940s and 

1950s; performing simulations and laboratory experiments to ensure 

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 into the future.6 In 

addition to NNSA, two other organizations are responsible for the nation’s 

nuclear weapons program. First, the Department of Defense (DOD) is 

responsible for implementing the U.S. nuclear deterrent strategy, which 

includes establishing the military requirements associated with planning 

for the stockpile.7 Second, the Nuclear Weapons Council is a joint activity 

composed of representatives from DOD and DOE that facilitates highlevel coordination to secure, maintain, and sustain the nuclear weapons 

stockpile.

 

4

73 Fed. Reg. 77,644 (Dec. 19, 2008), 73 Fed. Reg. 77,656 (Dec. 19, 2008), and National 

Nuclear Security Administration, Final Complex Transformation Supplemental 

Programmatic Environmental Impact Statement, DOE/EIS-0236-S4 (Washington, D.C.: 

October 2008).

5

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

2010). 

6

NNSA’s efforts to improve its operations and business practices predate the 2010 

Nuclear Posture Review but are now considered part of NNSA’s modernization efforts.

7

Additional information on DOD’s roles and responsibilities for nuclear weapons is 

discussed in GAO, ICBM Modernization: Approaches to Basing Options and Interoperable 

Warhead Designs Need Better Planning and Synchronization, GAO-13-831 (Washington, 

D.C.: Sept. 20, 2013).
 

Page 3 GAO-14-45 Modernizing the Nuclear Security Enterprise

NNSA’s modernization plans and budget estimates8 are described in two 

key policy documents, updated annually, that together comprise NNSA’s 

nuclear security budget materials.9 First, NNSA’s Stockpile Stewardship 

and Management Plan (SSMP) provides information on modernization 

and operations plans and budget estimates over the next 25 years.10 The 

SSMP is NNSA’s formal means for communicating to Congress the status 

of certain activities and its long-range plans and budget estimates for 

sustaining the stockpile and modernizing the nuclear security enterprise. 

The SSMP also discusses the current and projected composition and 

condition of the nuclear weapons stockpile. NNSA has submitted annual 

reports to meet current or similar previous statutory requirements since 

 

8

NNSA refers to the cost figures included in its budget materials during the FYNSP period 

as “budget requirements” and those after the FYNSP as “estimated budget requirements.” 

We refer to these figures as “budget estimates” throughout this report.

9

A third document that includes information on modernization budget estimates is the 

annual report DOD and DOE are required to submit jointly to the relevant Senate and 

House committees and subcommittees, referred to as the “section 1043” report. DOD and 

DOE are required to submit a detailed report that addresses, among other things, the plan 

for the nuclear weapons stockpile and its delivery systems and a 10-year estimate of 

modernization budget estimates. (Pub. L. No. 112-81, § 1043 (2011).) The 2014 report 

contains information through 2023 that appears consistent with NNSA’s other budget 

materials. As required by law, GAO is reviewing the accuracy and completeness of the 

budget estimates published in the 2014 report in another engagement. The law requires 

GAO to summarize its review 180 days after the issuance of the section 1043 report, 

which was issued in July 2013. 

10NNSA expanded the time span included in the SSMP from 20 years in the 2012 SSMP 

to 25 years in the 2014 SSMP.
 

Page 4 GAO-14-45 Modernizing the Nuclear Security Enterprise

1998, with the exception of 2013.11 NNSA’s 2014 SSMP contains 

information, including budget estimates, on modernization plans through 

2038. These data reflect the budget estimates for the 2014 to 2018 

Future-Years Nuclear Security Program (FYNSP), as well as long-range 

budget estimates through 2038. Second, NNSA’s annual justification of 

the President’s budget request, which typically includes the FYNSP, 

provides program information and budget estimates for the next 5 years 

and is approved by the Office of Management and Budget.12 The 

President’s budget is a statement of the President’s policy priorities. The 

President’s budget, though not legally binding, provides Congress with 

recommended spending levels for programs, projects, and activities, 

based on these priorities. Once the President has submitted the budget, 

agency officials explain and justify the request to Congress, including 

through their written budget request justifications. NNSA’s fiscal year 

2014 budget request justification and FYNSP provide information and 

estimates through fiscal year 2018.13 The GAO Cost Estimating and 

Assessment Guide states that a competent estimate is the foundation of a 

budget because a reasonable and supportable budget is essential to a 

program’s efficient and timely execution.

14 Additionally, credible cost 

 

11Department of Energy, Fiscal Year 2014 Stockpile Stewardship and Management Plan 

Report to Congress, (Washington, D.C.: June 2013). The National Defense Authorization 

Act for Fiscal Year 1998 required DOE to develop and annually update a plan for the 

stewardship, management, and certification of the nuclear weapons stockpile and submit 

it to Congress. Starting in 1998, NNSA submitted an annual Stockpile Stewardship Plan

(also known as the “Green Book”). In 2011, a presidential memorandum directed DOD 

and DOE to jointly submit annual updates to the plan. The National Defense Authorization 

Act for Fiscal Year 2013 requires NNSA, in consultation with DOD, to develop and 

annually update the nuclear weapons stockpile stewardship, management, and 

infrastructure plan but to submit to congressional defense committees a detailed report on 

the plan in odd-numbered years and summaries of the plan in even-numbered years. See 

50 U.S.C. § 2523. The 2014 SSMP states that NNSA did not submit the 2013 SSMP to 

Congress because analytic work conducted by DOD and NNSA to evaluate the out-year 

needs for nuclear modernization activities across the nuclear security enterprise was 

ongoing and, as such, predecisional. According to the 2013 budget request justification, 

out-year data for Weapons Activities it contains do not reflect programmatic requirements. 

Instead, they are an extrapolation of the 2013 request based on rates of inflation in the 

Budget Control Act of 2011 (Pub. L. No. 112-25 (2011)). 

12Pub. L. No. 106-65, § 3253 (1999), as amended, requires NNSA to submit a FYNSP “at 

or about the time the President’s budget is submitted to Congress.”

13All years in this report refer to fiscal years, unless otherwise noted.

14GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs (Supersedes GAO-07-1134SP), GAO-09-3SP

(Washington, D.C.: Mar. 2, 2009).
 

Page 5 GAO-14-45 Modernizing the Nuclear Security Enterprise

estimates help program offices justify budgets to Congress, the Office of 

Management and Budget, department secretaries, and others.

The National Defense Authorization Act for Fiscal Year 2011 mandated 

that GAO 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.15 This is the third year that we 

have undertaken work in response to this mandate. In June 2011, we 

briefed you on our findings based on NNSA’s 2012 nuclear security 

budget materials. We found, among other things, that NNSA’s 2012 

budget justification and associated FYNSP generally supported the 

agency’s long-range plans, but that a number of issues could affect these 

plans. These issues included the management of major construction 

projects without firm cost and schedule baselines, which could lead to 

project cost growth and schedule slippages that might adversely affect 

NNSA’s modernization plans, as well as challenges in refurbishing 

weapons using aging infrastructure. In June 2012, we sent a letter to the 

Senate and House Armed Services Committees that explained that we 

could not complete our review of the 2013 budget materials because 

NNSA did not issue the documents required for our review. This report 

assesses (1) changes to NNSA’s budget estimates for modernizing the 

nuclear security enterprise from the 2012 budget materials to the 2014 

materials and (2) the extent to which the 2014 budget estimates align with 

its long-range modernization plans.

To address these objectives, we reviewed NNSA’s 2014 nuclear security 

budget materials. Specifically, to determine the changes to NNSA’s plans 

and budget estimates, we compared the information in the 2014 budget 

materials to the information in the 2012 versions of these materials. 

Those budget materials include information for different time frames (see 

fig. 1). Because the budget materials for 2012 and 2014 each include 

information for 2014 through 2031, we focused on these years in our 

comparative analysis. To determine the extent to which NNSA’s budget 

estimates align with its long-range plans, we compared the data on 

budget estimates in the 2014 budget materials with the information on 

long-range plans in the same documents. We discussed perceived 

 

15Pub. L. No. 111-383, § 3113 (2011), as amended by Pub. L. No. 112-239, § 3132(a)(2) 

(2013).
 

Page 6 GAO-14-45 Modernizing the Nuclear Security Enterprise

misalignments with NNSA officials, as well as officials from a DOD office 

with knowledge of NNSA’s modernization plans and budget estimates.

Figure 1: Time Frames Covered by the 2012 and 2014 National Nuclear Security Administration’s Nuclear Security Budget 

Materials

Additionally, we reviewed prior GAO reports on modernization and the 

specific programs or projects included in NNSA’s modernization plans, as 

well as the GAO Cost Estimating and Assessment Guide.

16 A list of 

related GAO products is included at the end of this report. We limited the 

scope of our review to NNSA’s Weapons Activities appropriation.17 NNSA 

does not have a definition of modernization, but an NNSA official 

 

16GAO-09-3SP. 

17NNSA’s budget consists of four appropriations: (1) Defense Nuclear Nonproliferation, (2) 

Naval Reactors, (3) Office of the Administrator, and (4) Weapons Activities. The 2014 

budget request for all four appropriations totaled $11.7 billion, with $7.9 billion—or 68 

percent—requested for Weapons Activities. 
 

Page 7 GAO-14-45 Modernizing the Nuclear Security Enterprise

responsible for the SSMP told us the agency considers all of the 

programs in the Weapons Activities appropriation to directly or indirectly 

support modernization, and NNSA structures its budget materials in that 

way. This approach is consistent with our June 2011 review of NNSA’s 

2012 budget materials. Additionally, we focused our review for this report 

on those programs or projects with the potential to have a significant 

impact on NNSA’s modernization plans or budgets due to the amount of 

the budget estimates or the importance of the program to NNSA’s 

mission. All data are presented in current dollars unless otherwise noted. 

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 knowledgeable NNSA officials about the data and their 

methodologies for using the data to construct their estimates; and 

compared the figures in the budget request justification with those in the 

2014 SSMP to ensure that they were consistent. We determined that the 

data were sufficiently reliable for our purposes. See appendix I for 

additional information on the scope and methodology of our review.

We conducted this performance audit from April 2013 to December 2013 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

In recent years, U.S. nuclear weapons policy has been focused on arms 

reduction to address current security challenges posed by the threats of 

nuclear terrorism and nuclear proliferation. According to the 2010 Nuclear 

Posture Review, changes in the international nuclear security 

environment, including an easing of cold war rivalries and a growth in 

U.S. conventional military capabilities, enable the United States to 

address these security challenges at lower nuclear force levels and with 

reduced reliance on nuclear weapons.18 The 2010 Nuclear Posture 

Review focused on five objectives for U.S. nuclear weapons policy, 

including reducing the role of nuclear weapons in national security 

strategy and maintaining strategic deterrence and stability at reduced 

 

18Department of Defense, Nuclear Posture Review Report (Washington, D.C.: April 2010).

Background
 

Page 8 GAO-14-45 Modernizing the Nuclear Security Enterprise

nuclear force levels. In the New Strategic Arms Reduction Treaty 

between the United States and Russia, which was ratified by the United 

States Senate in December 2010, the United States agreed to reduce the 

number of deployed strategic nuclear warheads to 1,550 by 2018. In June 

2013, the President announced new guidance on the use of nuclear 

weapons. According to the announcement, the guidance includes, among 

other things, a narrowing of the nuclear strategy to focus only on those 

objectives and missions that are necessary for deterrence, which further 

reduces the role of nuclear weapons in the U.S. security strategy.

As the United States reduces its nuclear stockpile, the administration has 

pledged additional funds to modernize and operate the nuclear security 

enterprise, including the refurbishment of weapons currently in the 

stockpile and construction of replacement research and production 

facilities to support these refurbishments. This increased investment in 

the nuclear security enterprise is intended to ensure that scientific, 

technical, and engineering capabilities are sufficiently supported such that 

a smaller nuclear deterrent continues to be safe, secure, and reliable.19

Ensuring that the nuclear weapons stockpile remains safe and reliable in 

the absence of underground nuclear testing is extraordinarily complicated 

and requires state-of-the-art experimental and computing facilities, as well 

as the skills of top scientists and engineers in the field.

Congress funds NNSA’s modernization efforts through various activities 

and programs within the Weapons Activities appropriation that generally 

address three areas: (1) stockpile, (2) infrastructure, and (3) ST&E 

capabilities. Our review of NNSA’s nuclear security budget materials also 

focuses on these three areas as follows:

• Stockpile. The stockpile area includes weapons refurbishment through 

life extension programs (LEP) and other major weapons alterations 

 

19DOD and DOE have established an annual assessment process that reaches 

conclusions and makes judgments about the U.S. nuclear stockpile and, in particular, 

whether it is necessary to conduct an underground nuclear test to resolve any questions 

about a particular weapon type. The annual assessment process takes about 14 months 

to complete, during which time the nuclear weapons community collaborates on technical 

issues affecting the safety, reliability, performance, and military effectiveness of the 

stockpile. The process culminates in the “Report on Stockpile Assessments” provided to 

the President by the Secretaries of Defense and Energy. See GAO, Nuclear Weapons: 

Annual Assessment of the Safety, Performance, and Reliability of the Nation’s Stockpile, 

GAO-07-243R (Washington, D.C.: Feb. 2, 2007).
 

Page 9 GAO-14-45 Modernizing the Nuclear Security Enterprise

and modifications;20 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 to support these efforts, 

such as maintaining base capabilities to produce uranium and 

plutonium weapons components.21 The U.S. nuclear weapons 

stockpile is composed of seven different weapon types, including airdelivered bombs, ballistic missile warheads, and cruise missile 

warheads (see table 1). Most types of nuclear weapons currently in 

the stockpile were produced more than 20 years ago and are being 

sustained beyond their original design lifetimes. Consequently, it is 

critical to ensure that the weapons in the nuclear stockpile are safe, 

secure, and reliable. Based on our analysis of NNSA’s data, an 

average of about 55 percent of the budget estimates for the stockpile 

area from 2014 to 2038 is budgeted directly for the LEPs.

Table 1: Types of Nuclear Weapons

Warhead or 

bomb type Description

Life extension 

program or major 

alteration planned 

from 2014 to 2038 

B61-3/4/10

B61-7/11

Tactical bomb

Strategic bomb

Xa

W76-0/1 Submarine-launched ballistic missile 

warhead

X 

W78 Intercontinental ballistic missile warhead Xb

W80-1 Air Launched Cruise Missile, Advanced 

Cruise Missile

X 

B83-0/1 Strategic bomb

W87 Intercontinental ballistic missile warhead Xc

W88 Submarine-launched ballistic missile 

warhead

Xb

Source: Nuclear Weapons Council.

a

NNSA is consolidating the 3, 4, 7, and 10 modifications of the B61 bomb into a single B61-12 

modification during an ongoing life extension program.

 

20LEPs extend, through refurbishment, 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.

21NNSA funds activities that directly support the stockpile area through the Directed 

Stockpile Work program within the Weapons Activities appropriation.
 

Page 10 GAO-14-45 Modernizing the Nuclear Security Enterprise

b

NNSA plans to perform a major alteration of the W88, as well as a subsequent life extension 

program for the W78/88-1, which is planned to become the first interoperable warhead.

c

NNSA plans to refurbish the W87 as part of a future interoperable warhead LEP.

• Infrastructure. The infrastructure area involves NNSA-owned, leased, 

and permitted physical infrastructure and facilities required to support 

weapons activities.22 NNSA’s 2014 nuclear security budget materials 

include information on budget estimates for two types of infrastructure 

activities: funding to operate and maintain the existing infrastructure, 

and funding to construct new facilities or modernize existing ones. 

Based on our analysis of NNSA’s budget materials, an average of 

about 60 percent of the budget estimates for infrastructure from 2014 

to 2038 is for the operation and maintenance of existing facilities and 

about 25 percent is for facilities construction.23

• ST&E capabilities. The ST&E capabilities area is composed of five 

“campaigns,” which are technically challenging, multiyear, 

multifunctional efforts to develop and maintain critical science and 

engineering capabilities, including capabilities that enable the annual 

assessment of the safety and reliability of the stockpile, improve 

understanding of the physics and materials science associated with 

nuclear weapons, extend nuclear weapon lifetimes, and support the 

development of code-based models that replace underground testing. 

The five campaigns through which Congress funds ST&E capabilities 

are the following:

 

22In the 2014 budget request justification, the administration has requested that Congress 

fund activities that support the infrastructure area through the Nuclear Programs and Site 

Stewardship programs within the Weapons Activities appropriation. Congress has 

traditionally directed funding for infrastructure activities primarily through NNSA’s 

Readiness in Technical Base and Facilities program within the Weapons Activities 

Appropriation. The committee report accompanying the House of Representatives’ 2014 

Energy and Water Development appropriations bill retains the Readiness in Technical 

Base and Facilities program rather than using the new structure identified in NNSA’s 

budget request justification for 2014. The committee report accompanying the Senate bill, 

on the other hand, supported NNSA’s efforts to restructure the former Readiness in 

Technical Base and Facilities program. Because we reviewed NNSA’s plans in its budget 

materials, and these documents use the revised account structure, we refer to the 

accounts described in NNSA’s nuclear security budget materials.

23The remaining portion is for activities funded through program accounts that are not 

directly related to infrastructure, such as the Minority Serving Institutions Partnership 

Program—one of NNSA’s outreach programs with universities—and the Material 

Recycling and Recovery subprogram, which provides recycling and recovery of plutonium, 

enriched uranium, lithium, and tritium from fabrication and assembly operations, limited life 

components, and dismantlement of weapons and components.
 

Page 11 GAO-14-45 Modernizing the Nuclear Security Enterprise

• The Advanced Simulation and Computing Campaign procures 

supercomputers, develops the computer code to simulate nuclear 

weapons, and develops the simulations to analyze and predict 

these weapons’ performance, safety, and reliability and to certify 

their functionality.

• The Engineering Campaign develops capabilities to assess and 

improve the safety, security, effectiveness, and performance of a 

nuclear weapon throughout its lifetime without further underground 

nuclear testing. The campaign matures technologies for 

maintaining the current stockpile and adapts technologies for 

future use. It also provides a fundamental research, development, 

and engineering basis for stockpile certification and assessment 

throughout the entire life cycle of each weapon.

• The Inertial Confinement Fusion Ignition and High Yield Campaign 

utilizes laser- and pulsed power-based high energy density 

physics to enhance scientific understanding and advanced 

experimental capabilities to study materials under extreme 

conditions similar to those of a nuclear explosion.

• The Readiness Campaign develops and deploys capabilities to 

meet current and future nuclear weapon design and production 

needs of the stockpile, including tritium, a key isotope of hydrogen 

used in nuclear weapons.

• The Science Campaign conducts scientific experiments to 

improve the reliability of physics models for weapons 

performance. The campaign supports, among other things, annual 

stockpile assessments, the development of predictive capability in 

weapons simulations, and experiments to understand the 

complexities associated with the extreme temperatures, stresses, 

strains, and strain rates experienced during a nuclear explosion.

The three areas involved in NNSA’s modernization efforts are 

interconnected. For example, performance of research and experiments 

funded in the ST&E area contribute to the design and production of 

refurbished weapons, funded in the stockpile area. The infrastructure 

area offers critical support to both the stockpile and ST&E capabilities 

areas by providing a suitable environment for their various activities, such 
 

Page 12 GAO-14-45 Modernizing the Nuclear Security Enterprise

as producing weapons components and performing research and 

experimentation activities.24

NNSA uses a system of planning, programming, budgeting, and 

evaluation to develop its annual budget requests and to plan for future 

budget requests.25 The future requests evolve each year based on 

changes to the programs and policy decisions. NNSA worked with DOD’s 

Office of Cost Assessment and Program Evaluation starting in 2012 to 

determine the resources needed to accomplish NNSA’s nuclear weapons 

program and recapitalize its infrastructure due to concerns raised by 

senior DOD and NNSA officials about the sufficiency of NNSA’s 2012 

budget request to execute its program objectives. This analysis informed 

NNSA’s planning and programming decisions for 2014 through 2018 and 

will serve as the foundation for future budget requests. In May 2013, 

NNSA announced the creation of its Office of Program Review and 

Analysis to improve the agency’s ability to budget and plan, as well as to 

increase accountability for programmatic goals. Going forward, this office 

is expected to perform some of the same roles as DOD’s Office of Cost 

Assessment and Program Evaluation performed in developing the 2014 

budget materials.

NNSA’s total budget estimates for modernization for 2014 through 2031 

have increased by about $19 billion overall when compared with the 

estimate in the 2012 budget materials for the same time period. However, 

three factors may affect whether the estimates accurately reflect the 

amount NNSA may request in the future: (1) the estimates do not 

incorporate reductions for sequestration, (2) NNSA incorporated cost 

savings into its budget estimates before assessing how to achieve the 

savings, and (3) NNSA may continue to face pressure to pay the 

increasing costs of legacy contractor pensions.

 

24Other programmatic efforts that NNSA does not consider as part of its modernization 

efforts also depend on nuclear weapons infrastructure and ST&E capabilities. These 

include, for example, NNSA’s Nuclear Counterterrorism Incident Response program, 

which responds to and mitigates nuclear and radiological incidents worldwide.

25GAO, Modernizing the Nuclear Security Enterprise: NNSA’s Reviews of Budget 

Estimates and Decisions on Resource Trade-offs Need Strengthening, GAO-12-806

(Washington, D.C.: July 31, 2012).

Total Budget 

Estimates for 

Modernization Have 

Increased, but the 

Estimates May Not 

Be Fully Accurate
 

Page 13 GAO-14-45 Modernizing the Nuclear Security Enterprise

NNSA’s total budget estimates for modernization from 2014 through 2031 

have increased from about $169 billion in the 2012 budget materials to 

about $188 billion in the 2014 budget materials—a net increase of about 

$19 billion (see table 2).26 Budget estimates for the stockpile area 

increased significantly, while budget estimates for the infrastructure and 

ST&E capabilities areas decreased slightly. Reasons for these 

differences are discussed below.

Table 2: Changes in the National Nuclear Security Administration’s Budget 

Estimates for Modernization for 2014 to 2031

Dollars in billions

Area

2012 nuclear security 

budget materials

2014 nuclear security 

budget materials Difference

Stockpile $46.0 $73.1 $27.1

Infrastructure 54.6 52.4 -2.2

Science, technology, and 

engineering capabilities

40.1 36.2 -3.9

All other weapons 

activities

28.0 26.2 -1.7

Total $168.7 $187.9 $19.2

Source: GAO analysis of National Nuclear Security Administration data.

Note: Totals may not sum due to rounding.

Further, the increase in budget estimates through 2031 does not appear 

until 2019 (see fig. 2). For the 5 years of the FYNSP (2014 to 2018), 

NNSA’s annual budget estimates for modernization are similar in the 

2012 budget materials and the 2014 budget materials. However, starting 

in 2019, NNSA’s budget estimates increase more significantly than was 

anticipated in its 2012 budget materials. The 2014 SSMP states that the 

long-range estimates are snapshots in time based on expected inflation 

and other anticipated programmatic factors. In the budget estimates 

beyond 2018, NNSA incorporated an automatic increase of 2 percent per 

year to account for inflation for those activities that were expected to 

continue to operate at the same level of effort as during the FYNSP 

period. For programs, such as the LEPs, or other discrete projects that 

 

26The 2012 nuclear security budget materials stated that NNSA’s budget estimates for 

2012 through 2031 totaled $184 billion. The 2014 SSMP includes budget estimates 

through 2038. NNSA’s total budget estimates for 2014 through 2038 total $276 billion.
 

Page 14 GAO-14-45 Modernizing the Nuclear Security Enterprise

are not expected to continue to operate at the same level, NNSA 

estimated the funding needed using available planning data.

Figure 2: Comparison of Budget Estimates for Nuclear Modernization Activities in the National Nuclear Security 

Administration’s 2012 and 2014 Budget Materials

Notes: Data are presented in current dollars.

In its 2014 budget materials, the National Nuclear Security Administration (NNSA) proposed moving 

funding for the Nuclear Counterterrorism Incident Response and National Security Applications 

programs to the Defense Nuclear Nonproliferation appropriation. NNSA included budget estimates for 

these activities as part of modernization funding in the 2012 budget materials but not in the 2014 

budget materials. We were not able to remove this funding from the data above in the 2012 line. 

NNSA spent a total of about $230 million for these programs in 2012, the most recent year for which 

data are available.

Three factors may affect whether the estimates accurately reflect the 

amounts NNSA may request in the future, particularly with respect to the 

budgetary resources that may be needed for specific years: (1) the 

estimates do not incorporate reductions for sequestration, (2) NNSA 

incorporated cost savings into its budget estimates before assessing how 

to achieve the savings, and (3) NNSA may continue to face pressure to 

pay the increasing costs of certain contractor pensions. Additional 

information on issues related to the accuracy of budget estimates for the 

stockpile area and infrastructure areas are discussed in those sections.
 

Page 15 GAO-14-45 Modernizing the Nuclear Security Enterprise

First, NNSA’s budget estimates do not incorporate reductions for 

sequestration because, according to an NNSA official, the 2014 budget 

request and future budget estimates reflect the total amount of funding 

needed for the programs to meet their current plans and schedules. As 

indicated in the 2014 SSMP, the plan represents the requirements for the 

modernization of the nuclear security enterprise. According to the SSMP, 

incorporating reductions for sequestration would lead to adjustments to 

future plans. This could include changes to current plans and schedules.

Additionally, according to NNSA officials, sequestration occurred at about 

the same time as the agency submitted its 2014 budget request to 

Congress. While NNSA did not submit the 2014 SSMP to Congress until 

June, NNSA did not update its budget estimates because the officials 

said the SSMP was supposed to be consistent with the 2014 budget 

request.

Second, NNSA incorporated cost savings into its budget estimates before 

fully assessing how to achieve the savings. An NNSA official said that the 

Office of Management and Budget directed NNSA to incorporate these 

cost savings into its budget estimates to reduce the total top-line 

estimates. NNSA’s budget estimates incorporate about $24 billion in cost 

savings to be achieved through management efficiencies and workforce 

prioritization savings through 2038, including $320 million in 2014. 

According to NNSA officials, management efficiencies reflect changes in 

business processes that are not expected to affect the scope of work that 

can be completed. However, work scope is expected to be affected as a 

result of workforce prioritization savings because these savings result 

from reducing the size of the workforce and shifting personnel from lower 

priority work to higher priority work. Figure 3 shows the reductions that 

NNSA incorporated into its budget estimates for management efficiencies 

and workforce prioritization for 2014 through 2038.
 

Page 16 GAO-14-45 Modernizing the Nuclear Security Enterprise

Figure 3: Amount of the Reductions That the National Nuclear Security Administration Incorporated into its Budget Estimates 

for Management Efficiencies and Workforce Prioritization Savings

Note: Data are presented in current dollars.

Shortly after issuing its budget materials, NNSA began studies to identify 

how to achieve these cost savings and whether they could be achieved. 

According to NNSA officials, they completed the workforce prioritization 

study in November 2013 and had not completed the management 

efficiencies study as of December 2013.27 Because NNSA’s 2014 budget 

materials were released before the agency completed its studies, an 

NNSA official said that the anticipated cost savings for management 

efficiencies and workforce prioritization reductions were evenly distributed 

across the programs that support modernization efforts. According to 

NNSA’s 2014 budget request justification and information from NNSA 

officials, NNSA plans to work with Congress to make any necessary 

 

27We did not review NNSA’s workforce prioritization report because it was issued so close 

to the completion of our audit work. We plan to review the report as part of our future 

reviews of the SSMP.
 

Page 17 GAO-14-45 Modernizing the Nuclear Security Enterprise

changes to programs and funding levels after these studies are 

complete.28

NNSA officials said that incorporating the workforce prioritization savings 

will require a reduction in some planned activities, as implementing these 

savings will lead to fewer employees available to perform the work. 

According to the 2014 SSMP, NNSA’s workforce includes about 30,000 

contractor employees across the nuclear security enterprise and about 

2,300 federal employees directly employed by NNSA. About 88 percent of 

the contractor workforce supports programs NNSA considers 

modernization activities. Based on preliminary results of the workforce 

prioritization study, NNSA officials said that they expect that the highest 

priority work will be the LEPs and that surveillance29 and engineering 

activities that are not directly related to ongoing LEPs would most likely 

be cut to achieve $240 million in workforce prioritization savings for 2014 

and additional savings in future years.30 According to an NNSA official, 

this trade-off is necessary because the people who perform surveillance 

and engineering activities have the skills to support LEPs, while other 

 

28Section 3116 of the House version of the National Defense Authorization Act for Fiscal 

Year 2014, if enacted, would limit NNSA’s ability to obligate $139.5 million of the funds 

authorized to be appropriated in the act or otherwise made available for the fiscal year 

until NNSA submits to the relevant Senate and House committees a detailed plan to 

realize the planned efficiencies described in the President’s 2014 budget request and a 

written certification that the planned efficiencies will be achieved during 2014. In addition, 

if NNSA does not submit the plan and certification within 60 days of the enactment of the 

act, NNSA must submit to congressional defense committees the amount of planned 

efficiencies that will not be realized during 2014 and any effects caused by the unrealized 

planned efficiencies to the Nuclear Programs and Directed Stockpile Work programs.

29NNSA’s surveillance program provides data to evaluate the condition of the active and 

inactive stockpile to support decisions regarding weapon alterations or modifications; life 

extensions; and assessments of reliability, safety, security, and performance of the 

stockpile.

30To put this figure in context, based on an average annual total compensation of about 

$150,000 for a full-time employee, saving $240 million from workforce prioritization 

reductions could mean a reduction of about 1,600 positions. For this calculation, we 

obtained data on average salary and benefits for DOE employees. Although positions 

eliminated due to workforce prioritization reductions are more likely to be contractors than 

government employees, information on average salaries for the management and 

operations contractors was not readily available. If contractor salaries are higher than the 

data used in our calculation, then fewer positions would need to be eliminated. If 

contractor salaries are lower than the data used in our calculation, then more positions 

would need to be eliminated. See appendix I for more information on the methodology 

used for our calculation.
 

Page 18 GAO-14-45 Modernizing the Nuclear Security Enterprise

knowledge, skills, and abilities dedicated to other efforts within the 

nuclear security enterprise cannot be readily redirected to support LEPs.

However, according to NNSA officials, NNSA could choose to allocate the 

savings differently to avoid impacts to other programs.

A third factor affecting the overall accuracy of NNSA’s budget estimates is 

that NNSA 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. NNSA’s budget estimates for 

legacy contractor pensions increase across the FYNSP and post-FYNSP 

periods to nearly $360 million in 2038 and a total cost from 2014 to 2038 

of more than $7 billion. The 2014 budget request states that the increase 

in budget estimates for legacy contractor pensions is due to changes in 

demographic and mortality assumptions. In April 2011, we found that 

further growth in contractor pension costs could put pressure on the 

funding available for mission-related activities across DOE and NNSA’s 

operations, and modernization efforts may be eroded by future increased 

pension costs.31 Conversely, if budget estimates for legacy pension costs 

are too high, NNSA could provide additional funding for programs or 

reduce future budget estimates. 

NNSA’s total budget estimates may not represent the total funding 

needed to execute modernization plans as described in the 2014 nuclear 

security budget materials, and the budget estimates do not align with 

modernization plans in some areas. Changes in budget estimates for the 

stockpile area, largely due to changes in the methodology for calculating 

them, drove the overall increase in budget estimates for modernization; 

however, near-term estimates may understate the amount NNSA will 

need to execute stockpile plans. Budget estimates for infrastructure 

decreased slightly, although NNSA’s long-term estimates for this area are 

incomplete because they do not include billions of dollars associated with 

early estimates for planned construction projects. Budget estimates for 

ST&E capabilities decreased slightly.

 

31GAO, Department of Energy: Progress Made Overseeing the Costs of Contractor 

Postretirement Benefits, but Additional Actions Could Help Address Challenges, 

GAO-11-378 (Washington, D.C.: Apr. 29, 2011).

Budget Estimates for 

Two of Three Areas 

May Not Represent 

Total Funding Needed 

and Do Not Fully 

Align with Aspects of 

Modernization Plans
 

Page 19 GAO-14-45 Modernizing the Nuclear Security Enterprise

NNSA’s budget estimates for the stockpile area from 2014 through 2031 

have increased by about $27 billion compared with the 2012 budget 

materials, accounting for more than the total increase of $19 billion to 

NNSA’s overall budget estimates for modernization. Figure 4 shows 

NNSA’s budget estimates for the stockpile area from its 2012 and 2014 

budget materials.

Figure 4: Comparison of Budget Estimates for the Stockpile Area in the National Nuclear Security Administration’s 2012 and 

2014 Budget Materials

Notes: Data are presented in current dollars.

The budget estimates for the stockpile area do not represent the total cost for maintaining the 

stockpile. Because of the interconnected nature of the National Nuclear Security Administration’s 

activities, some budget estimates to support the stockpile are included in the infrastructure and 

science, technology, and engineering capabilities areas.

Stockpile Budget 

Estimates Drove the 

Overall Increase Due to 

Changes to the 

Calculation Methodology, 

and Near-Term Estimates 

May Understate the 

Funding Needed
 

Page 20 GAO-14-45 Modernizing the Nuclear Security Enterprise

According to NNSA officials, this increase in budget estimates for the 

stockpile area is primarily due to changes in the way that NNSA 

calculated the budget estimates for LEPs.32 NNSA officials said that the 

budget estimates in 2012 for the LEPs were based on data generated to 

execute the Reliable Replacement Warhead, a program that sought to 

develop a modern replacement warhead that was cancelled in 2009. 

NNSA officials told us that they used data from the Reliable Replacement 

Warhead because there was not enough data at that time from ongoing 

LEPs to develop cost models, and this was the best data available at that 

time. Starting with the 2014 budget materials, NNSA used either data 

from the ongoing W76 LEP to develop a cost model to generate the 

budget estimates for LEPs that do not yet have firm cost estimates, or 

actual cost estimates for those LEPs where such estimates have been 

developed.33 According to the officials, this change in the estimating 

approach led to significant increases in the budget estimates for the 

LEPs, but the officials could not provide a specific amount of the increase. 

According to the officials, the estimates included in the 2014 budget 

materials are likely to be more accurate than estimates generated using 

the previous approach because they are based on the costs of an LEP 

that is in progress, rather than a program that was never executed. We 

did not assess the changes to the methodology for calculating the 

estimates or the quality of the resulting estimates because GAO has 

ongoing work to assess NNSA’s cost-estimating practices.34

In addition to cost increases associated with the change in budget 

estimating methodology for LEPs, an NNSA official said that changes to 

the planned schedule for the cruise missile warhead LEP contributed to 

 

32We could not compare the budget estimates in the 2012 and 2014 budget materials for 

subprograms in the stockpile area because NNSA could not provide 2012 data at the 

subprogram level beyond 2016, when much of the change in budget estimates in the 

stockpile area occurs.

33At the end of the second phase in the design of an LEP, NNSA publishes a Weapon 

Design and Cost Report that identifies baseline design and resource requirements, 

establishes tentative development and production schedules, and estimates warhead 

costs. NNSA used the cost estimates from the Weapon Design and Cost Report in its 

budget estimates for the three refurbishment efforts that have reached this milestone—the 

W76-1, the B61-12, and the W88 alteration.

34For preliminary observations on this topic, see GAO, Department of Energy: 

Observations on Project and Program Cost Estimating in NNSA and the Office of 

Environmental Management, GAO-13-510T (Washington, D.C.: May 8, 2013). GAO plans 

to report its final results in the spring of 2014.
 

Page 21 GAO-14-45 Modernizing the Nuclear Security Enterprise

increases in the budget estimates for the stockpile area. According to the 

2014 SSMP, the Nuclear Weapons Council directed changes to the 

planned schedules for some of the LEPs to better accommodate the 

number and scope of all of the LEPs. In the 2012 budget materials, NNSA

planned to complete the first production unit for the cruise missile 

warhead LEP in 2031, the last year of the period covered in the 2012 

budget materials.35 As such, NNSA included limited funding for this LEP 

in its budget estimates in the 2012 budget materials. However, based on 

its plans in the 2014 budget materials, NNSA plans to complete the first 

production unit for the cruise missile warhead LEP in 2024—7 years 

earlier than previously planned—and, therefore, an NNSA official said 

that the agency increased the budget estimates for the LEP in the 2014 

budget materials. NNSA officials could not provide a specific amount for 

the increase. See figure 5 for a summary of changes to the schedules of 

the planned LEPs from the 2012 to the 2014 budget materials.

 

35The “first production unit” is the first complete warhead from a production line certified 

for deployment. 
 

Page 22 GAO-14-45 Modernizing the Nuclear Security Enterprise

Figure 5: Comparison of Planned Schedules for Life Extension Programs and Major Alterations from the National Nuclear 

Security Administration’s 2012 and 2014 Budget Materials

a

The 2012 SSMP discussed the W78 and W88 LEPs as separate programs, with an initiative to study 

the possibility of interoperability between the two systems. The 2012 SSMP did not provide schedule 

information for an interoperable warhead similar to that provided for other systems. In contrast, the 

2014 SSMP did not provide a schedule for separate W78 and W88 LEPs. This graphic shows the 

2012 plans for the separate W78 and W88 LEPs in comparison to the 2014 plans for an interoperable 

warhead. Based on information in the 2012 SSMP, NNSA planned to continue production of 

additional hedge warheads for the W78 warhead through 2035.

b

The 2012 SSMP discussed the development of an alteration to the W88 from 2011 through 2021, but 

it did not provide schedule information similar to that provided for the other systems.

c

The planned schedule for the cruise missile warhead LEP in the 2012 SSMP only extends to 2035, 

the end of the planning period for the 2012 SSMP. Based on the data provided, it is not clear whether 

NNSA planned to complete the LEP by 2035 or if production would continue beyond the schedule 

provided.

d

The “first production unit” is the first complete warhead from a production line certified for 

deployment.
 

Page 23 GAO-14-45 Modernizing the Nuclear Security Enterprise

Although NNSA has increased its budget estimates for the stockpile area, 

we identified two areas where budget estimates do not fully align with 

plans and may underestimate the amount of funding NNSA needs to 

accomplish its modernization plans. First, separate from changes to the 

planned schedule for completing two of the LEPs shown above, NNSA 

shifted funding to 2019 and beyond for the cruise missile warhead LEP 

and the W78/88-1 LEP. However, NNSA officials and plans in the 2014 

budget materials suggest that additional funding will be needed before 

2019 to complete the first production units for the LEPs as scheduled in 

2024 and 2025, respectively. NNSA included about $11.6 billion in budget 

estimates for the cruise missile warhead LEP and about $14.1 billion for 

the W78/88-1 LEP in its 2014 budget materials, but only about 2 and 3 

percent of this funding, respectively, is included prior to 2019. According 

to an NNSA official, the total budget estimates included in the 2014 

budget materials for these LEPs are accurate, but the amounts planned 

to be requested during the FYNSP may not be sufficient for NNSA to 

achieve planned program milestones. Figure 6 shows the budget 

estimates for the two LEPs that were included in the 2014 budget 

materials. According to the NNSA official, the agency shifted some of the 

budget estimates for the two LEPs beyond 2019 because the Office of 

Management and Budget approves NNSA’s budget estimates through the 

FYNSP period, but it does not review the budget estimates beyond this 

period. As such, the estimates beyond 2019 are not subject to funding 

targets to the same extent as the estimates for 2014 to 2018.
 

Page 24 GAO-14-45 Modernizing the Nuclear Security Enterprise

Figure 6: Budget Estimates for the Cruise Missile Warhead Life Extension Program and the W78/88-1 Life Extension Program

Note: Data are presented in current dollars.

Second, the budget estimates may underestimate costs because NNSA 

did not incorporate contingency time to meet scheduled milestones and 

provide flexibility to address challenges that might arise. Our previous 

work on LEPs has identified that technical challenges have led to cost 

increases and schedule delays.36 NNSA officials told us that there is 

limited contingency time in the current schedules established by the 

Nuclear Weapons Council for completing the five planned refurbishments 

to ensure that NNSA can meet the project milestones if technical 

challenges arise or infrastructure becomes unavailable. According to 

 

36GAO, Nuclear Weapons: DOD and NNSA Need to Better Manage Scope of Future 

Refurbishments and Risks to Maintaining U.S. Commitments to NATO, GAO-11-387

(Washington, D.C.: May 2, 2011); GAO, Nuclear Weapons: NNSA and DOD Need to More 

Effectively Manage the Stockpile Life Extension Program, GAO-09-385 (Washington, 

D.C.: Mar. 2, 2009); and GAO, Nuclear Weapons: Improved Management Needed to 

Implement Stockpile Stewardship Program Effectively, GAO-01-48 (Washington, D.C.: 

Dec. 14, 2000).
 

Page 25 GAO-14-45 Modernizing the Nuclear Security Enterprise

NNSA’s 2014 budget materials, five of the seven weapon types in the 

stockpile are currently in various stages of life extension activities with 

work on LEPs or major alterations planned through 2038.37 To date, 

NNSA has completed LEPs on two nuclear weapons: the B61 bomb and 

the W87 warhead. We have previously reported on these refurbishment 

efforts, as well as progress on the W76-1 LEP, and found that NNSA has 

experienced a variety of problems executing the LEPs, including schedule 

delays, cost overruns, technical challenges, and a reduction in the 

number of weapons refurbished.38 In our 2009 report on the previous 

refurbishment of the B61 bomb, we found that NNSA did not leave 

sufficient time in its schedule to address significant technical challenges, 

which led to increased costs.39 Similarly, the LEP for the W87 

experienced both design and production problems that, at that time, 

contributed to a 2-year schedule delay and a cost increase of about $300 

million.40

NNSA’s total budget estimates for its infrastructure area for 2014 through 

2031 have decreased by about $2.2 billion compared with the 2012 

budget materials. According to NNSA officials, they determined the 

budget estimates for line item construction projects to be about $300 

million per year in 2019 and beyond—escalated by about 2 percent per 

year for inflation—based on the amount that NNSA has typically spent on 

 

37The W76-1 LEP is in full-scale production. Engineering development for an alteration to 

the W88—the W88 Alt 370—and the B61-12 LEP are under way. The Nuclear Weapons 

Council authorized a feasibility study for the W78/88-1 interoperable warhead LEP with 

study completion expected in 2016. NNSA commissioned a conceptual design study for 

the cruise missile warhead LEP in October 2012.

38A third LEP on the W80-1 was cancelled in May 2006 after DOD reevaluated its cruise 

missile force structure requirements.

39GAO-09-385. To improve future weapons refurbishment efforts, we recommended that 

NNSA develop a realistic schedule for future LEPs that allows the agency to address 

technical challenges while meeting all military requirements and build in time for 

unexpected technical challenges that may delay the program. In our follow-up on the 

status of this recommendation, we found that while NNSA has acknowledged issues and 

identified some steps to improve the LEP process, this recommendation will remain open 

and unimplemented until NNSA demonstrates successful LEP and refurbishment 

execution.

40GAO-01-48. 

Infrastructure Budget

Estimates Decreased 

Slightly, Although 

Estimates Are Incomplete
 

Page 26 GAO-14-45 Modernizing the Nuclear Security Enterprise

line item construction projects in the past.41 To determine the specific 

construction projects included in modernization plans and budget 

estimates, NNSA requests input from the management and operations 

contractors each year on the specific projects that are needed at each 

site and uses a process to prioritize those projects within the funding 

available. Those projects included in the FYNSP are considered 

approved for project start by NNSA while projects planned for beyond 

2018 are more preliminary. Figure 7 shows a comparison between 

NNSA’s budget estimates for the infrastructure area in its 2012 and 2014 

budget materials. Appendix II compares the cost estimates and schedule 

information provided in the 2012 SSMP to those in the 2014 SSMP.

Figure 7: Comparison of Budget Estimates for Infrastructure in the National Nuclear Security Administration’s 2012 and 2014 

Budget Materials

Notes: Data are presented in current dollars.

The budget estimates for the infrastructure area do not represent the total cost for operating and 

maintaining weapons infrastructure. Because of the interconnected nature of the National Nuclear 

 

41Line item construction projects are construction projects for which Congress specifically 

appropriates funds.
 

Page 27 GAO-14-45 Modernizing the Nuclear Security Enterprise

Security Administration’s activities, some budget estimates to support the infrastructure area are 

included in the stockpile and science, technology, and engineering capabilities areas.

Although NNSA’s budget estimates through 2031 decline only slightly 

when compared with those in the 2012 budget materials, NNSA excluded 

most of the budget estimates for two major construction projects—the 

Uranium Processing Facility (UPF) and Chemistry and the Metallurgy 

Research Replacement-Nuclear Facility (CMRR-NF)—from its 2014 

budget materials. This led to a decrease in the total budget estimates for 

the infrastructure area of about $4 billion for 2014 through 2031 when 

compared to NNSA’s 2012 budget materials. However, NNSA plans to 

construct these facilities or alternatives to the facilities and, as a result, 

NNSA’s budget estimates for the infrastructure area are not fully aligned 

with its modernization plans and likely underestimate the amount of 

funding that will be needed in future years. First, NNSA did not include in 

the 2014 budget materials any budget estimates for the latter two phases 

of the ongoing project to construct UPF.42 NNSA included about $5.4 

billion in its budget estimates for the first of three phases of UPF.43

According to NNSA officials, they did not include budget estimates for the 

latter phases of the UPF project in the 2014 budget materials because 

planning for these phases of the project is still in the early stages. 

Additionally, NNSA did not include funding for CMRR-NF in the 2014 

 

42UPF, which will be located at the Y-12 National Security Complex in Oak Ridge, 

Tennessee, is designed to replace all of the site’s highly enriched uranium production 

capability currently performed in four aging facilities. The facility has yet to be built, and 

the first phase of the project is currently nearing a project milestone where a firm cost, 

schedule, and scope baseline will be established. NNSA refers to the whole facility as 

UPF and the three individual phases of the project as the Uranium Capabilities 

Replacement Project.

43At the request of the Senate Appropriations Committee, Subcommittee on Energy and 

Water Development, and in accordance with the requirements contained in the National 

Defense Authorization Act for Fiscal Year 2013, GAO is to report quarterly on the UPF. 

See GAO, Nuclear Weapons: Factors Leading to Cost Increases with the Uranium 

Processing Facility, GAO-13-686R (Washington, D.C.: July 12, 2013). In our July 2013 

report on the UPF project, we found that it was unclear whether NNSA’s project cost 

estimate of between $4.2 billion and $6.5 billion will remain valid. The National Defense 

Authorization Act for Fiscal Year 2013 placed a cap of $4.2 billion on the cost of the first 

phase of the project.
 

Page 28 GAO-14-45 Modernizing the Nuclear Security Enterprise

budget materials.44 NNSA has stated the need to construct these 

facilities—or alternatives to these facilities—to complete its mission. 

According to the 2014 budget materials and NNSA officials, NNSA did not 

include budget estimates for CMRR-NF or its alternative because they 

are currently evaluating potential options for CMRR-NF or an alternative, 

and the plans were not yet developed enough to include budget estimates 

in the 2014 budget materials.45 OMB Circular A-11 indicates that budget 

estimates should include the full cost of the program. Although NNSA’s 

estimates beyond the FYNSP period may be less precise then the nearterm estimates, we believe that including as much information as is 

known about the full cost of a program has merit with regard to future 

planning. In cases where complete information is not yet known, this 

could include a range of potential budget estimates for the projects, 

based on available information. Because NNSA excluded budget 

estimates for these two projects or their alternatives, NNSA may 

underestimate the total anticipated cost for infrastructure, potentially 

limiting the utility of the budget materials.

In addition to funding for CMRR-NF and the two remaining phases of 

UPF, NNSA’s budget estimates for other line item construction projects 

planned to begin in 2019 and later may not be sufficient to complete all of 

the proposed projects based on current cost estimates. In the 2014 

SSMP, NNSA identified 36 construction projects that sites would like to 

construct from 2019 through 2038 and included a preliminary cost 

estimate for each project in one of three ranges: (1) less than $100 

million, (2) from $100 million to $500 million, or (3) more than $500 

million. NNSA estimated that it would need $300 million per year, in 

 

44CMRR-NF was expected to replace an existing facility used for plutonium-related 

research at Los Alamos National Laboratory in New Mexico to modernize the laboratory’s 

capabilities to analyze plutonium and store it more securely. Originally estimated to begin 

construction in 2008, the project has experienced several delays and significant increases 

in preliminary cost estimates. In February 2012, NNSA announced that it had decided to 

defer construction for at least 5 years because budget constraints prevented constructing 

CMRR-NF and UPF simultaneously, and NNSA determined UPF to be a higher priority 

project. According to the 2014 SSMP, NNSA plans to phase in capabilities sooner than 

planned for CMRR‐NF by adding equipment in existing infrastructure and is also 

evaluating the feasibility of constructing small laboratory modules connected to existing 

nuclear facilities that could accommodate higher risk plutonium operations in more 

modern space.

45We recently reported on NNSA’s plans for meeting its plutonium research needs. See 

GAO, Modernizing the Nuclear Security Enterprise: Observations on NNSA’s Options for 

Meeting Its Plutonium Research Needs, GAO-13-533 (Washington, D.C.: Sept. 11, 2013).
 

Page 29 GAO-14-45 Modernizing the Nuclear Security Enterprise

constant dollars, during this period for line item construction projects.46

Using the cost ranges for the proposed projects, NNSA’s plans to 

construct all of the proposed projects from 2019 through 2038 within the 

planned budget of $300 million per year are contingent on all of the 

projects being completed at the low end of their cost ranges (see fig. 8).47

We found that in its planned budget NNSA can only construct its 

proposed projects in 9 of the 20 years of the overall construction schedule 

if all of the project costs are at the midpoints of their ranges and in only 3 

years if all of the project costs are at the high ends of their cost ranges. 

Our analysis of the sufficiency of NNSA’s budget estimates for line item 

construction projects is based on NNSA’s current cost estimates. If the 

cost estimates for the largest construction projects increase as other 

projects’ estimates have in the past, the amount that NNSA needs to 

complete all of the planned construction projects could increase 

significantly. For example, in our July 2013 report on the UPF project, we 

found that the upper bound of NNSA’s cost estimate for the project has 

increased from about $1.1 billion in 2004 to $6.5 billion in 2012.48 DOE 

remains on GAO’s High-Risk List for management of major contracts and 

projects (those of at least $750 million) at NNSA and the Office of 

Environmental Management.49 We recognize that changing the 

assumptions we used could produce different results and NNSA could 

make decisions—such as revising the budget estimates, changing the 

scopes or schedules of projects, or removing projects from the list—that 

 

46Although NNSA identified CMRR-NF and the second two phases of UPF as planned 

projects for 2019 or later, NNSA officials told us that plans for these projects were 

uncertain and, therefore, no budget estimates were included. As such, we did not include 

these projects in our evaluation of the sufficiency of budget estimates to execute out-year 

planned projects, but note that additional budgetary resources will be needed to execute 

them.

47Because the proposed projects do not have a schedule for funding required in each year 

of execution, we assumed that 10 percent of the total cost range was needed in the first 

and last years of each project, and the remaining 80 percent of the funding would be 

needed equally across the remaining years of each project’s schedule. Additionally, we 

used $500 million as the low estimate, midpoint estimate, and high estimate for projects in 

the highest cost range to provide a conservative estimate of the potential costs of the 

construction projects since the projects included in this category do not yet have precise 

cost estimates and we did not have a reasonable figure to use instead. See appendix I for 

more detail on the methodology we used for our analysis.

48GAO-13-686R. 

49GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C.: Feb. 14, 2013). 
 

Page 30 GAO-14-45 Modernizing the Nuclear Security Enterprise

would change the budget estimates for a given year. Details on our 

methodology for this analysis are in appendix I.

Figure 8: Estimated Funding Needed to Complete Construction Projects Compared with Budget Estimates in the National 

Nuclear Security Administration’s 2014 Budget Materials

While line item construction projects are a visible and important part of 

NNSA’s infrastructure modernization plans, NNSA anticipates spending 

about three times as much annually to operate and maintain its existing 

facilities and infrastructure as it plans to spend on construction. NNSA’s 

budget estimates to operate and maintain its existing facilities and 

infrastructure remain relatively flat through 2038 at about $1.5 billion per 

year (in constant dollars); however, these budget estimates may not align 

with infrastructure modernization plans. Much of NNSA’s existing facilities 

and infrastructure were constructed more than 50 years ago and are 

reaching the end of their useful lives. As a result, the agency is 

undertaking a number of capital improvement projects to modernize and 

maintain these facilities beyond high-profile replacement projects such as 

UPF. It may not be realistic for NNSA to assume that its annual budget 
 

Page 31 GAO-14-45 Modernizing the Nuclear Security Enterprise

estimates for operations and maintenance of facilities from 2014 to 2038 

can remain flat or increase slightly (in constant dollars) when compared 

with what it has spent annually on maintenance activities for the past 

decade as this infrastructure continues to age.50 Based on information in 

the 2013 updates to the Twenty-Five Year Site Plans for several sites, as 

the enduring facilities and infrastructure that support the nuclear security 

enterprise continue to age, maintenance costs are likely to grow. NNSA 

proposed a revision to its 2014 budget structure where sites would 

receive some funding for maintenance through the Site Stewardship 

program, but NNSA officials said that deferred maintenance projects will 

have to compete against programmatic priorities for funding within the 

overall pool of maintenance funds available.51 These officials raised a 

concern that this competition for funding could lead to an increase in the 

amount of deferred maintenance in the future and questioned whether the 

overall level of budget estimates to support facilities and infrastructure 

maintenance is sufficient.

NNSA’s budget estimates for the ST&E area for 2014 through 2031 have 

decreased by about $3.9 billion since the 2012 budget materials. Figure 9 

shows NNSA’s budget estimates for ST&E capabilities from its 2012 and 

2014 budget materials.

 

50NNSA changed the way it presents its infrastructure data in the budget request 

justification starting in 2014. Thus, for 2002 to 2013, we included funding for operations of 

facilities within the Readiness in Technical Base and Facilities program and operations 

and maintenance through the Facilities and Infrastructure Recapitalization Program in our 

calculation of funding for operations and maintenance of facilities. For 2014 to 2038, we 

included funding for the capabilities-based investments subprogram within Nuclear 

Programs and the site operations, sustainment, and facility disposition subprograms within 

Site Stewardship in our calculation.

51Deferred maintenance and repairs are maintenance and repairs that were not performed 

when they should have been or were scheduled to be and that are put off or delayed for a 

future period. Maintenance and repairs are activities, including preventive maintenance; 

replacement of parts, systems, or components; and other activities needed to preserve or 

maintain the asset directed toward keeping fixed assets in an acceptable condition. 

Maintenance and repairs, as distinguished from capital improvements, exclude activities 

directed towards expanding the capacity of an asset or otherwise upgrading it to serve 

needs different from, or significantly greater than, its current use.

ST&E Capabilities Budget 

Estimates Decreased 

Slightly
 

Page 32 GAO-14-45 Modernizing the Nuclear Security Enterprise

Figure 9: Comparison of Budget Estimates for the Science, Technology, and Engineering Capabilities Area in the National 

Nuclear Security Administration’s 2012 and 2014 Budget Materials

Note: Data are presented in current dollars.

Although the overall budget estimates for ST&E capabilities have 

decreased compared with the 2012 budget materials, this overall 

decrease masks differences among plans for specific ST&E efforts.

• The Inertial Confinement Fusion Ignition and High Yield Campaign 

shows the greatest decrease in estimates from the 2012 to the 2014 

budget materials. Specifically, the estimates in the 2014 budget 

materials are $3.7 billion below those in the 2012 budget materials.

• The Advanced Simulation and Computing Campaign also saw a 

decrease in its budget estimates in the 2014 budget materials of $1.5 

billion below the estimates in the 2012 budget materials. 

In contrast, other campaigns saw an increase in their budget estimates 

compared with the 2012 budget materials.

• Combined budget estimates for the Engineering and Readiness 

Campaigns represent an increase each year of over $1.1 billion 
 

Page 33 GAO-14-45 Modernizing the Nuclear Security Enterprise

through 2031 when compared with plans in the 2012 budget 

materials.52

• Compared with the 2012 budget materials, budget estimates for the 

Science Campaign increase in some years and decrease in others, 

although the total budget estimates for the campaign increase by 

$171 million.

NNSA officials attributed the decreases in the budget estimates for the 

Inertial Confinement Fusion Ignition and High Yield Campaign and for the 

Advanced Simulation and Computing Campaign to changes made, in 

part, to reduce program costs. One change in the ST&E capabilities area 

is the shift in focus from ignition experiments to nonignition experiments 

at the National Ignition Facility.53 NNSA did not achieve ignition—a 

milestone planned for achievement in 2012—through experiments 

performed at the National Ignition Facility and, as a result, NNSA officials 

said that the facility is shifting its focus to nonignition experiments and the 

science behind ignition in order to better understand the models which 

predicted that ignition would be achieved.54 NNSA officials said that this 

change in focus to understanding the science behind ignition is one of the 

reasons for a decrease in the budget estimates. This estimated decrease 

in budget estimates for the campaign is also partly the result of a 

reduction in the level of facility operations at the National Ignition Facility 

and a shift of facility maintenance costs to the Infrastructure area. An 

NNSA official also said that the results of the joint NNSA and DOD review 

of resources needed for NNSA’s programs anticipated that additional cuts 

could be made in the budget estimates for the National Ignition Facility 

with the expectation that, by 2018, a third of its budget could be replaced 

by fees paid by outside users of the facility that would be identified at a 

later date. This option is expected to be revisited during the preparation of

the fiscal year 2015 budget materials.

 

52NNSA presented data for the Engineering and Readiness Campaigns together in the 

2012 SSMP, but separately in the 2014 SSMP. Because NNSA could not provide data for 

the two campaigns separately, we combined them in our analysis.

53The National Ignition Facility is designed to produce extremely intense pressures and 

temperatures in order to try to simulate fusion conditions created in nuclear explosions, 

known as “ignition.” Funding to operate the National Ignition Facility and conduct ignition 

experiments has been included in NNSA’s requests for the Inertial Confinement Fusion 

Ignition and High Yield campaign.

54For more information, see U.S. Department of Energy, National Nuclear Security 

Administration’s Path Forward to Achieving Ignition in the Inertial Confinement Fusion 

Program: Report to Congress (Washington, D.C.: December 2012).
 

Page 34 GAO-14-45 Modernizing the Nuclear Security Enterprise

A second change from the 2012 budget materials is the decision to slow 

down the replacement rate for NNSA’s supercomputers. The Advanced 

Simulation and Computing Campaign—which supports the analysis and 

prediction of performance, safety, and reliability of nuclear weapons—has 

extended by about 1 year the amount of time the campaign plans to retain 

current hardware used for supercomputing, as well as slow down by 1 

year the rate at which it replaces future hardware. With this change, 

NNSA plans to replace its supercomputers every 2.5 to 3 years instead of 

every 2 years. NNSA officials told us that they cannot slow down the 

replacement rate any further because it becomes difficult to find 

equipment and parts to replace or repair the equipment after more than 3

years in service. 

NNSA faces a complex, decades-long task in planning, budgeting, and 

ensuring the execution of interconnected activities to modernize the 

nuclear security enterprise. In the current fiscal climate, providing 

Congress with budget estimates that reflect long-term plans and the 

expected funding needed to execute these plans—even if preliminary—

helps in prioritizing projects and funding and aids in congressional 

decision making. Budget estimates reflect the administration’s choices 

based on policy decisions. We identified several areas of misalignment or 

potential misalignment between NNSA’s budget estimates and its 

modernization plans as described in its 2014 nuclear security budget 

materials. For example, because NNSA omitted or underestimated the 

costs for some areas, such as the costs of CMRR-NF and UPF or their 

alternatives, NNSA’s future budget requests may increase compared with 

the estimates in the 2014 budget materials. Future iterations of the SSMP 

could be improved by including at least a range of potential budget 

estimates for projects and programs that the agency knows are needed, 

based on available information about these projects and programs’ future 

costs. In addition, the budget estimates that NNSA included in some

areas, such as for future construction projects, represent best case 

assumptions in that the agency can complete all of the planned projects 

only if they are completed at the low-end of the cost ranges. Moreover, 

because NNSA may not have incorporated sufficient contingency time in 

its schedules and milestones for the LEPs to address technical or other 

challenges, those budget estimates could further increase as well. 

Because NNSA is required to submit an annual budget justification and 

FYNSP, as well as update its SSMP, NNSA has an opportunity to 

continuously improve its nuclear security budget materials and bring 

modernization plans into full alignment with budget estimates by including 

Conclusions
 

Page 35 GAO-14-45 Modernizing the Nuclear Security Enterprise

a range of estimates for projects and programs the agency knows it 

needs in its modernization plans.

To improve the utility of future budget estimates and address the 

misalignment between modernization plans and budget estimates, we 

recommend that the Administrator of NNSA should include in future 

modernization plans at least a range of potential budget estimates for 

projects and programs that the agency knows are needed, based on 

available information about these projects and programs’ future costs.

We provided DOE and DOD with a draft of this report for their review and 

comment. In written comments, reproduced in appendix III, NNSA’s 

Associate Administrator for Management and Budget generally concurred 

with the recommendation in this report and provided information on 

planned actions to address the recommendation. Specifically, NNSA 

plans to reflect uncertainties in program and project estimates in a budget 

estimates chart. NNSA believes that this action, along with other cost 

estimating activities that support budget estimates beyond 2019, currently 

provide a sufficient range of estimates consistent with the 

recommendation, and NNSA considers this recommendation closed. We

agree that NNSA provided a range of estimated costs for most line item 

construction projects in the budget materials. We also recognize that 

similar ranges may be calculated for other programs such as LEPs, but 

this information is not provided in the budget materials. We continue to 

believe that providing ranges of potential budget estimates in the budget 

materials for projects and programs that the agency knows are needed

could be useful in improving the utility of the budget estimates.

NNSA and DOD also provided technical comments, which we 

incorporated as appropriate.

We are sending copies of this report to the Secretary of Energy, 

Secretary of Defense, Administrator of NNSA, and the appropriate 

congressional committees. In addition, this 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 

Recommendation for 

Executive Action

Agency Comments 

and Our Evaluation
 

Page 36 GAO-14-45 Modernizing the Nuclear Security Enterprise

on the last page of this report. GAO staff who made key contributions to 

this report are listed in appendix IV.

David C. Trimble

Director, Natural Resources and Environment
 

Page 37 GAO-14-45 Modernizing the Nuclear Security Enterprise

List of Committees

The Honorable Carl Levin

Chairman

The Honorable James M. Inhofe

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Dianne Feinstein

Chairwoman

The Honorable Lamar Alexander

Ranking Member

Subcommittee on Energy and Water Development

Committee on Appropriations

United States Senate

The Honorable Howard P. McKeon

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: Scope and Methodology

Page 38 GAO-14-45 Modernizing the Nuclear Security Enterprise

To determine the changes to the National Nuclear Security 

Administration’s (NNSA) plans and budget estimates, we compared the 

information in the 2014 budget materials to the information in the 2012 

version of those materials. NNSA’s plans and budget estimates are 

contained in two key policy documents: the agency’s annual budget 

request justification, which contains the Future-Years Nuclear Security 

Program (FYNSP), which provides information and budget estimates for 

the next 5 years, and the Stockpile Stewardship and Management Plan

(SSMP), which provides information on modernization and operations 

plans over the next 25 years.1 The FYNSP and SSMP include information 

for different time frames. Specifically, the 2012 FYNSP includes 

information for 2012 through 2016, and the 2014 FYNSP includes 

information for 2014 through 2018. The 2012 SSMP includes information 

for 2012 to 2031, while the 2014 SSMP includes information for 2014 

through 2038. Because the budget materials for 2012 and 2014 each 

include information for 2014 through 2031, we focused on these years in 

our analysis. We could not compare the budget estimates below the 

program level from the 2012 budget materials to the 2014 budget 

materials because NNSA could not provide data at that level beyond 

2016. We reviewed prior GAO reports on modernization and specific 

programs or projects included in the plans to provide context for NNSA’s 

plans and changes in the plans. A list of related GAO products is included 

at the end of this report. We also reviewed the GAO Cost Estimating and 

Assessment Guide, which highlights best practices for developing, 

managing, and evaluating cost estimates for capital programs.2 We 

discussed NNSA’s modernization plans, including areas where we 

identified changes in plans or budget estimates, with knowledgeable 

officials from NNSA and the Department of Defense’s (DOD) Office of 

Cost Assessment and Program Evaluation.

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

long-range modernization plans, we compared the budget estimates 

included in NNSA’s 2014 budget materials with its long-range plans 

included in those documents. In addition to new issues that we identified 

as part of our review of these documents, we also followed up on the 

issues identified in our June 2011 review. Additionally, we reviewed prior 

 

1

NNSA expanded the time span included in the SSMP from 20 years in the 2012 SSMP to 

25 years in the 2014 SSMP.

2

GAO-09-3SP. 

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 39 GAO-14-45 Modernizing the Nuclear Security Enterprise

GAO reports to provide context for the concerns we identified and 

discussed areas where budget estimates did not appear to align with its 

modernization plans with knowledgeable officials from NNSA and DOD’s 

Office of Cost Assessment and Program Evaluation.

We performed additional analyses to explore the extent to which NNSA 

could conduct projects within the proposed budget estimates. For 

example, to determine whether NNSA could complete the line item 

construction projects planned for the post-FYNSP period within the 

budget estimates, we used NNSA’s estimated cost ranges and planned 

schedules for each project and calculated the amount of funding the 

agency would need each year to complete the projects under three 

scenarios: (1) all projects are completed at the low end of their 

preliminary cost range, (2) all projects are completed at the midpoint of 

their preliminary cost range, and (3) all projects are completed at the high 

end of their preliminary cost range. The proposed projects are not far 

enough into the planning process to have estimates for the amount of 

funding that each project will need in each year it is under way, so we 

assumed that 10 percent of the total cost for each project would be 

needed in the first and last years of the project, and the remaining 80 

percent of the funding would divide evenly across the number of years in 

the planned schedule for each project. To help ensure that this 

assumption did not significantly affect the outcome of our analysis, we 

also performed the analysis assuming that the funding for each project 

was divided evenly across the number of years in the planned project 

schedule and found that the results did not differ significantly. For projects 

in the lowest estimated cost range—projects estimated to cost less than 

$100 million—we used $10 million for the low end of the estimate 

because the Department of Energy (DOE) is authorized, under some 

circumstances, to use certain funds to carry out construction projects 

estimated to cost less than $10 million. We used $500 million as the low 

estimate, midpoint estimate, and high estimate for projects in the highest 

cost range to provide a conservative estimate of the potential costs of the 

construction projects since the projects included in this category do not 

yet have precise cost estimates, and we did not have a reasonable figure 

to use instead. We performed a sensitivity analysis on this assumption 

and found that using a higher figure, such as $1 billion, for the high 

estimate increased the annual costs, but it did not change our 

conclusions, so we retained the more conservative assumptions in our 

analysis.

In addition, to determine the potential number of reductions of positions 

based on saving $240 million from workforce prioritization reductions, we 
Appendix I: Scope and Methodology

Page 40 GAO-14-45 Modernizing the Nuclear Security Enterprise

obtained the average yearly salary of a DOE employee from a 

Congressional Research Service report on the federal workforce.3

Additionally, we obtained data on the amount of yearly benefits that a 

typical federal government employee receives from a Congressional 

Budget Office report.4 We inflation-adjusted the figures to 2013 dollars 

and added the figures together to provide an estimate of the average 

salary and benefits, which totaled about $150,000. We then divided the 

amount of cost savings that NNSA plans to attain from workforce 

prioritization reductions in 2014—$240 million—by the total salary and 

benefits. Although positions eliminated due to workforce prioritization 

reductions are more likely to be contractors than government employees, 

information on average salaries for contractors was not readily available. 

If contractor salaries are higher than the data used in our calculation, then 

fewer positions could be eliminated. If contractor salaries are lower than 

the data used in our calculation, then more positions could be eliminated.

We limited the scope of our review to NNSA’s Weapons Activities 

appropriation. NNSA does not have a definition of “modernization,” but 

NNSA officials consider all of the programs in the Weapons Activities 

appropriation to directly or indirectly support modernization. This scope is 

consistent with our June 2011 review. Additionally, we focused our review 

on those programs or projects with the potential to have a significant 

impact on NNSA’s modernization plans or budgets.

All data are presented in current dollars, which include projected inflation, 

unless otherwise noted. NNSA’s budget estimates do not incorporate 

reductions for sequestration. As stated in NNSA’s 2014 SSMP, 

incorporating such reductions would lead to adjustments to future plans.

To assess the reliability of NNSA’s budget estimates, we conducted 

electronic tests of the data, looking for missing values, outliers, or other 

anomalies. Additionally, we interviewed knowledgeable NNSA officials 

about the data and their methodologies for using the data to construct 

their estimates, including discussing a potential anomaly that we identified 

in our tests of the data. We also compared the data in the budget request 

 

3

Congressional Research Service, The Federal Workforce: Characteristics and Trends

(Washington, D.C.: Apr. 19, 2011).

4

Congressional Budget Office, Comparing Benefits and Total Compensation in the 

Federal Government and the Private Sector (Washington, D.C.: January 2012). 
Appendix I: Scope and Methodology

Page 41 GAO-14-45 Modernizing the Nuclear Security Enterprise

justification to the data in the 2014 SSMP to ensure consistency of the 

data included for the 2014 to 2018 FYNSP period. We determined that 

the data underlying the budget estimates were sufficiently reliable for our 

purposes.

We conducted this performance audit from April 2013 to December 2013 

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: Comparison of Planned 

Construction Projects in the 2012 and 2014 

Stockpile Stewardship and Management Plans

Page 42 GAO-14-45 Modernizing the Nuclear Security Enterprise

The 2012 and 2014 Stockpile Stewardship and Management Plans

(SSMP) include information on planned schedules and preliminary cost 

ranges for line item construction projects. Figure 10 shows the schedule 

and cost information for approved projects, and figure 11 shows the 

information for proposed projects. Approved projects are those projects 

that are expected to begin during the Future-Years Nuclear Security 

Program (FYNSP) period and have specific funding included in the 

FYNSP. Five of the approved projects that were included in the National 

Nuclear Security Administration’s (NNSA) list of line item construction 

projects in the 2014 SSMP were not included in the 2012 SSMP. 

Proposed projects are those projects that are planned to begin outside of 

the FYNSP period. Twelve of the proposed projects that were included in 

NNSA’s list of line item construction projects in the 2014 SSMP were not 

included in the 2012 SSMP. Each project has two bars of data. The upper 

bar for each project shows NNSA’s schedule and preliminary cost ranges 

from the 2012 SSMP. The lower bar for each project shows NNSA’s 

schedule and preliminary cost ranges from the 2014 SSMP. The length of 

the bar for each project indicates the duration of the project’s schedule, 

and the numbers at the start and end of each bar reflect the project’s 

planned start and end dates. Projects without a date in the first box 

started before 2013, and projects without an end date are planned to 

finish after 2038.The shade of the bar indicates the project’s preliminary 

cost range. Projects with a light bar are expected to cost less than $100 

million to complete. Projects with a medium bar are expected to cost 

between $100 million and $500 million to complete. Projects with a dark 

bar are expected to cost more than $500 million to complete.

Appendix II: Comparison of Planned 

Construction Projects in the 2012 and 2014 

Stockpile Stewardship and Management Plans
Appendix II: Comparison of Planned 

Construction Projects in the 2012 and 2014 

Stockpile Stewardship and Management Plans

Page 43 GAO-14-45 Modernizing the Nuclear Security Enterprise

Figure 10: Comparison of Schedule and Cost Ranges for Approved Construction Projects in the National Nuclear Security 

Administration’s 2012 and 2014 Plans
Appendix II: Comparison of Planned 

Construction Projects in the 2012 and 2014 

Stockpile Stewardship and Management Plans

Page 44 GAO-14-45 Modernizing the Nuclear Security Enterprise

a

The National Nuclear Security Administration did not include information for this project in the 2012 

Stockpile Stewardship and Management Plan.
Appendix II: Comparison of Planned 

Construction Projects in the 2012 and 2014 

Stockpile Stewardship and Management Plans

Page 45 GAO-14-45 Modernizing the Nuclear Security Enterprise

Figure 11: Comparison of Schedule and Cost Ranges for Proposed Construction Projects in the 2012 and 2014 Plans
Appendix II: Comparison of Planned 

Construction Projects in the 2012 and 2014 

Stockpile Stewardship and Management Plans

Page 46 GAO-14-45 Modernizing the Nuclear Security Enterprise
Appendix II: Comparison of Planned 

Construction Projects in the 2012 and 2014 

Stockpile Stewardship and Management Plans

Page 47 GAO-14-45 Modernizing the Nuclear Security Enterprise

a

The 2012 Stockpile Stewardship and Management Plan (SSMP) only provides data through 2033. 

Projects with an end date of 2033 in the 2012 SSMP may have planned completion dates later than 

2033.

b

The National Nuclear Security Administration did not include information for this project in the 2012 

SSMP.
Appendix III: Comments from the Department 

of Energy

Page 48 GAO-14-45 Modernizing the Nuclear Security Enterprise

Appendix III: Comments from the 

Department of Energy
Appendix III: Comments from the Department 

of Energy

Page 49 GAO-14-45 Modernizing the Nuclear Security Enterprise
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 50 GAO-14-45 Modernizing the Nuclear Security Enterprise

David C. Trimble, (202) 512-3841 or trimbled@gao.gov. 

In addition to the contact named above, Allison B. Bawden, Assistant 

Director; Cheryl Arvidson; Hilary Benedict; Bridget Grimes; and Jeanette 

Soares made key contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments
Related GAO Products

Page 51 GAO-14-45 Modernizing the Nuclear Security Enterprise

ICBM Modernization: Approaches to Basing Options and Interoperable 

Warhead Designs Need Better Planning and Synchronization. 

GAO-13-831. Washington, D.C.: September 20, 2013.

Modernizing the Nuclear Security Enterprise: Observations on NNSA’s 

Options for Meeting Its Plutonium Research Needs. GAO-13-533. 

Washington, D.C.: September 11, 2013.

Nuclear Weapons: NNSA Needs to Improve Guidance on Weapon 

Limitations and Planning for Its Stockpile Surveillance Program. 

GAO-12-188. Washington, D.C.: February 8, 2012.

Nuclear Weapons: DOD and NNSA Need to Better Manage Scope of 

Future Refurbishments and Risks to Maintaining U.S. Commitments to 

NATO. GAO-11-387. Washington, D.C.: May 2, 2011.

Nuclear Weapons: NNSA and DOD Need to More Effectively Manage the 

Stockpile Life Extension Program. GAO-09-385. Washington, D.C.: March 

2, 2009.

Nuclear Weapons, Annual Assessment of the Safety, Performance, and 

Reliability of the Nation’s Stockpile. GAO-07-243R. Washington, D.C.: 

February 2, 2007.

Nuclear Weapons: Improved Management Needed to Implement 

Stockpile Stewardship Program Effectively. GAO-01-48. Washington, 

D.C.: December 14, 2000.

Nuclear Weapons: Factors Leading to Cost Increases with the Uranium 

Processing Facility. GAO-13-686R. Washington, D.C.: July 12, 2013.

Department of Energy: Observations on Project and Program Cost 

Estimating in NNSA and the Office of Environmental Management. 

GAO-13-510T. Washington, D.C.: May 8, 2013.

Department of Energy: Concerns with Major Construction Projects at the 

Office of Environmental Management and NNSA. GAO-13-484T. 

Washington, D.C.: March 20, 2013.

Modernizing the Nuclear Security Enterprise: Observations on DOE’s and 

NNSA’s Efforts to Enhance Oversight of Security, Safety, and Project and

Related GAO Products

Stockpile

Infrastructure
Related GAO Products

Page 52 GAO-14-45 Modernizing the Nuclear Security Enterprise

Contract Management. GAO-13-482T. Washington, D.C.: March 13, 

2013.

Modernizing the Nuclear Security Enterprise: Observations on the 

National Nuclear Security Administration’s Oversight of Safety, Security, 

and Project Management. GAO-12-912T. Washington, D.C.: September 

12, 2012.

Modernizing the Nuclear Security Enterprise: New Plutonium Research 

Facility at Los Alamos May Not Meet All Mission Needs. GAO-12-337. 

Washington, D.C.: March 26, 2012.

Nuclear Weapons: NNSA Needs More Comprehensive Infrastructure and 

Workforce Data to Improve Enterprise Decision-making. GAO-11-188. 

Washington, D.C.: February 14, 2011.

Nuclear Weapons: National Nuclear Security Administration’s Plans for Its 

Uranium Processing Facility Should Better Reflect Funding Estimates and 

Technology Readiness. GAO-11-103. Washington, D.C.: November 19, 

2010.

Nuclear Weapons: Actions Needed to Identify Total Costs of Weapons 

Complex Infrastructure and Research and Production Capabilities.

GAO-10-582. Washington, D.C.: June 21, 2010.

Nuclear Weapons: National Nuclear Security Administration Needs to 

Ensure Continued Availability of Tritium for the Weapons Stockpile.

GAO-11-100. Washington, D.C.: October 7, 2010.

Nuclear Weapons: Actions Needed to Address Scientific and Technical 

Challenges and Management Weaknesses at the National Ignition 

Facility. GAO-10-488. Washington, D.C.: April 8, 2010.

Modernizing the Nuclear Security Enterprise: Strategies and Challenges 

in Sustaining Critical Skills in Federal and Contractor Workforces.

GAO-12-468. Washington, D.C.: April 26, 2012.

Department of Energy: Progress Made Overseeing the Costs of 

Contractor Postretirement Benefits, but Additional Actions Could Help 

Address Challenges. GAO-11-378. Washington, D.C.: April 29, 2011.

Science, Technology, 

and Engineering 

Capabilities

Human Capital
Related GAO Products

Page 53 GAO-14-45 Modernizing the Nuclear Security Enterprise

Nuclear Weapons: NNSA Needs More Comprehensive Infrastructure and 

Workforce Data to Improve Enterprise Decision-making. GAO-11-188. 

Washington, D.C.: February 14, 2011.

Modernizing the Nuclear Security Enterprise: NNSA’s Reviews of Budget 

Estimates and Decisions on Resource Trade-offs Need Strengthening. 

GAO-12-806. Washington, D.C.: July 31, 2012. 

National Nuclear Security Administration: Observations on NNSA’s 

Management and Oversight of the Nuclear Security Enterprise. 

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Department of Energy: Additional Opportunities Exist to Streamline 

Support Functions at NNSA and Office of Science Sites. GAO-12-255. 

Washington, D.C.: January 31, 2012.

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