GAO

United States General Accounting Office

The Subcommittee on Energy and Water

Development, Committee on

Appropriations, House of

Representatives

December 2000 NUCLEARWEAPONS

Improved

Management Needed

to Implement

Stockpile Stewardship

Program Effectively

GAO-01-48

Page 1 GAO-01-48 Nuclear Weapons

Contents

Letter 5

Executive Summary 6

Chapter 1

Background on DOE’s

Office of Defense

Programs Mission and

Structure

16

DOE’s Historical Mission in Designing and Maintaining the

Nuclear Weapons Stockpile 16

The Mission and Structure of DOE’s Nuclear Weapons Complex

Has Changed 21

The Reconfigured Weapons Complex Faces Challenges and

Constraints 29

Chapter 2

Further Improvements

Are Needed in the

Office of Defense

Programs’ Planning

Process

34

The Office of Defense Programs Has Developed a New Planning

Process to Fit Its Changing Mission 34

The Stockpile Stewardship Program’s Plans Are Incomplete and

Are Not Linked With Management Controls 37

Conclusions 43

Recommendations for Executive Action 43

Agency Comments and Our Evaluation 44

Chapter 3

Revised Budget

Information Needed to

Improve Management

of the Stockpile

Stewardship Program

46

The Office of Defense Programs Has Developed a New Budget

Structure for the Weapons Activities Account That Is Intended

to Improve Program Management 46

The New Structure Was Not Implemented Consistently 48

DOE Amended the Fiscal Year 2001 Budget Submission to Improve

Consistency, but the Revisions Miss the Opportunity to Improve

Program Management 52

Conclusions 52

Recommendation for Executive Action 53

Agency Comments and Our Evaluation 53
Contents

Page 2 GAO-01-48 Nuclear Weapons

Chapter 4

Fundamental

Organizational and

Leadership Changes

Needed for Successful

Implementation of the

Program’s New Mission

55

DOE Has Reorganized the Office of Defense Programs to Meet Its

Changing Mission 55

DOE’s Attempts to Reorganize Have Not Addressed All of the

Organizational and Leadership Issues 63

Conclusions 72

Recommendations for Executive Action 73

Agency Comments and Our Evaluation 73

Chapter 5

Management

Improvements Needed

for the Office of

Defense Programs to

Conduct Successful

Stockpile Life

Extensions

75

The Office of Defense Programs Has Begun a Major Program to

Extend the Life of Nuclear Weapons in the Stockpile 75

The Only Life Extension Conducted to Date Experienced Significant

Design and Production Problems Due to Management Weaknesses 77

Improved Management Processes Have Been Developed for Future Life

Extensions, but More Needs to Be Done 83

Conclusions 84

Recommendations for Executive Action 85

Agency Comments and Our Evaluation 85

Appendixes Appendix I: Explanation of How Modern Nuclear Weapons

Work 86

Appendix II: Scope and Methodology 88

Appendix III: Comments From the Department of Energy’s National

Nuclear Security Administration 91

Tables Table 1: Roles of the Production Sites in the Nuclear Weapons

Complex, 1988 20

Table 2: Weapons in the Enduring Stockpile 22

Table 3: Management and Operating Contractor Employment in the

Nuclear Weapons Complex, 1988 Through 2000 28

Table 4: Federal Staffing in the Office of Defense Programs, 1991

Through 2000 29

Table 5: Office of Defense Programs Three-Tiered Planning Structure 36
Contents

Page 3 GAO-01-48 Nuclear Weapons

Table 6: Major Studies of DOE’s Stockpile Stewardship Program 56

Table 7: Major Responsibilities of Office of Defense Programs’

Headquarters and Field Offices Reporting to the Office of

Defense Programs 59

Table 8: Nuclear Weapons Complex Facilities That Participated in

the W87 LEP 76

Table 9: W87 LEP Cost Estimate Comparison 77

Figures Figure 1: Traditional Weapons Development and Production

Cycle 18

Figure 2: Nuclear Weapons Complex, 1988 19

Figure 3: The New “6.X” Weapons Refurbishment Cycle 24

Figure 4: DOE’s Reconfigured Nuclear Weapons Complex—

Sites’ Roles in 2000 and Employment Changes, 1988

Through 2000 26

Figure 5: Organization of the National Nuclear Security

Administration and the Office of Defense Programs, as of

October 1, 2000 62

Figure 6: Simplified Drawing of a Modern Nuclear Weapon 86
Page 4 GAO-01-48 Nuclear Weapons
United States General Accounting Office

Washington, D.C. 20548

Page 5 GAO-01-48 Nuclear Weapons

Letr

December 14, 2000

The Honorable Ron Packard

Chairman

The Honorable Peter J. Visclosky

Ranking Minority Member

Subcommittee on Energy and Water Development

Committee on Appropriations

House of Representatives

As requested, this report addresses the Department of Energy’s (DOE) management of its National

Nuclear Security Administration’s Stockpile Stewardship Program. Specifically, it discusses the

Administration’s approach to the program’s (1) planning, (2) new budget structure, and (3)

organizational and leadership structure. In addition, we were asked to assess the program’s

experience with extending the life of nuclear weapons in the stockpile and the management

processes used for overseeing life extensions.

As arranged, unless you publicly announce its contents earlier, we plan no further distribution of this

report until 15 days after the date of this letter. At that time, we will send copies of the report to the

Honorable Bill Richardson, Secretary of Energy; John A. Gordon, Administrator, National Nuclear

Security Administration; Madelyn R. Creedon, Deputy Administrator for Defense Programs, National

Nuclear Security Administration; the Honorable Jacob J. Lew, Director, Office of Management and

Budget; and other interested parties. We will make copies available to others upon request.

Please call me at (202) 512-3841 if you or your staff have any questions about this report. Major

contributors to this report include James Noël, Chris Pacheco, Delores Parrett, and Mark Gaffigan.

(Ms.) Gary L. Jones

Director, Natural Resources

and Environment
Page 6 GAO-01-48 Nuclear Weapons

Executive Summary

Purpose Within the Department of Energy (DOE), the National Nuclear Security

Administration’s Office of Defense Programs is responsible for the nation’s

nuclear weapons stockpile. In response to changes in the international

climate in the late 1980s, the Office of Defense Programs downsized and

restructured the nuclear weapons complex to focus on a new mission—

known as the Stockpile Stewardship Program—to maintain the safety and

reliability of the nation’s nuclear weapons stockpile indefinitely without

nuclear testing. However, the Stockpile Stewardship Program faces a

difficult set of challenges and constraints. For example, the program seeks

to extend the life of nuclear weapons well beyond the minimum for which

they were originally designed and to replace testing with scientific study,

simulation, and refurbishment. In addition, the existing infrastructure in

the nuclear weapons complex is very old—much of it dating from the 1940s

and 1950s—making it difficult and expensive to maintain. Downsizing the

complex over the last decade has also created imbalances in the federal

and contractor workforce, such as an inability to hire the necessary

number of skilled technicians and scientists. Finally, there is uncertainty

about the level of program activities that the Stockpile Stewardship

Program’s annual funding of about $4.5 billion can support. To successfully

address these issues, the Office of Defense Programs has attempted to

develop new management approaches.

In this context, the Chairman and Ranking Minority Member of the

Subcommittee on Energy and Water Development, House Committee on

Appropriations, asked GAO to evaluate three aspects of the Stockpile

Stewardship Program’s management. Specifically, GAO was asked to assess

the program’s (1) planning process, (2) new budget structure, and (3)

organizational framework. In addition, GAO was asked to assess the

program’s experience with extending the life of nuclear weapons in the

stockpile and the management processes used for overseeing life

extensions.

Background From the beginning of the Manhattan Project in the 1940s, a primary

mission of DOE and its predecessor agencies has been to design, test, and

build the nation’s nuclear weapons. To accomplish this, the Office of

Defense Programs oversaw a nuclear weapons complex operated by a

variety of contractor organizations and composed of three national nuclear

weapons design labs, a nuclear weapons test site, and 10 production plants

that produced the materials and parts and manufactured the nation’s

nuclear weapons. Weapon designs were continually being replaced by new
Executive Summary

Page 7 GAO-01-48 Nuclear Weapons

designs; accordingly, the old weapons were being removed from the

stockpile, thus keeping the average age of the stockpile low. At its peak,

prior to the end of the Cold War, this weapons complex employed about

60,000 people and had a budget of about $8 billion annually.

With the end of the Cold War, the Office of Defense Programs’ mission

changed as tensions with the former Soviet Union were eased, the first

Strategic Arms Reduction Treaty reducing the size of the nation’s nuclear

stockpile was negotiated, and a moratorium on nuclear testing was

declared. In response, DOE significantly restructured the nuclear weapons

complex to meet its new mission of ensuring the safety and reliability of the

stockpile under the Stockpile Stewardship Program. While the three

nuclear weapons design labs were retained, the test site and the production

infrastructure were significantly reduced in size, resulting in a reduction in

employment for fiscal year 2000 to about 26,000 and an annual budget of

about $4.5 billion. A key task for the reconfigured nuclear weapons

complex is extending the life of the nuclear weapons in the stockpile well

beyond that for which they were originally designed. Most recently, in

March 2000, the Office of Defense Programs and its federal headquarters

and field personnel became part of the new National Nuclear Security

Administration.

Results in Brief Over the last few years, the Office of Defense Programs has taken steps to

address the principal challenges facing the Stockpile Stewardship Program.

However, additional improvements are needed in order to (1) remedy

weaknesses in the program’s planning processes, (2) ensure that required

budget information for effective cost management is available, (3) correct

organizational and leadership deficiencies, and (4) develop an effective

management process for overseeing the life extension process for nuclear

weapons.

With respect to planning, the Office of Defense Programs has developed an

extensive planning process to improve the management of its Stockpile

Stewardship Program; however, the plans generated by this process are

incomplete in two important respects. First, the Office of Defense

Programs is still trying to determine some key requirements for the

Stockpile Stewardship Program, such as validating the quantities of

weapons to be refurbished. Until this process is complete, important

aspects of the program—and, thus, the plans associated with them—are

subject to change. Second, a congressionally mandated, cross-cutting plan

to manage the life extension of nuclear weapons—known as the Stockpile
Executive Summary

Page 8 GAO-01-48 Nuclear Weapons

Life Extension Program Plan—does not contain complete information on

important issues, such as firm commitments to modify facilities or hire and

train additional staff to ensure that the production plants can meet the

current schedule for weapons life extensions, and does not contain budget

information. More fundamentally, while the Office of Defense Programs

has developed over 70 plans, it has not integrated them into its system of

management controls for the program, including the program’s budget and

the mechanisms used to oversee its contractors. The lack of effective

integration essentially prevents the separate components of the program

from functioning as a cohesive entity. Officials in the Office of Defense

Programs have acknowledged these weaknesses in the planning processes

and identified ongoing efforts to address them. However, those activities

cannot be completed until firm program requirements are in place.

Concerning budgeting, the Office of Defense Programs has developed a

new structure for its fiscal year 2001 budget, organized around three major

program activities, that can improve the overall management of the

Stockpile Stewardship Program. The new structure allows the program to

potentially identify the variable costs of the program—those that change as

the workload changes—and the fixed costs—those that represent the cost

of keeping the nuclear weapons complex open and ready to do work.

Program managers and outside technical experts believe that this new

structure holds significant promise because identifying the program’s fixed

and variable costs can be a useful tool for improving the program’s cost

management. However, two problems arose during the budget’s

development. First, the labs and production plants did not apply the

program’s new budget formulation definitions consistently. Second, the

Department’s Office of the Chief Financial Officer was concerned that the

program’s application of the new structure was not consistent with various

accounting standards and certain laws and regulations that contain

accounting requirements. In response, an amendment to the program’s

budget submission for fiscal year 2001 was developed. However, the

amendment makes determining the program’s fixed and variable costs

difficult, in turn, making the amount of funding that could be saved if an

activity is cut difficult to ascertain.

With respect to the program’s organization, several external and internal

studies have found that the Office of Defense Programs has a dysfunctional

organization with unclear lines of authority that lead to a lack of

accountability. Although DOE has made repeated attempts to reorganize

the nuclear weapons program, the Office of Defense Programs still does

not have a clear organizational structure or, until recently, formal control
Executive Summary

Page 9 GAO-01-48 Nuclear Weapons

over all of the sites performing substantial amounts of work for the

Stockpile Stewardship Program. Specifically, the program remains

fragmented at the headquarters level, and the division of roles and

responsibilities between headquarters and the field is unclear. In addition,

until October 2000, three of the eight contractors performing substantial

amounts of work for the weapons program reported to other program

offices at DOE rather than directly to the Office of Defense Programs,

including one of the weapons design laboratories and two of the

production facilities. This situation reduced program integration and made

it harder for managers to balance competing resource priorities. A recent

reorganization is being implemented to correct this problem. Finally, the

program has experienced considerable leadership instability. Specifically,

the Office of Defense Programs has seen its proportion of offices vacant or

with acting managers increase from 17 percent in 1996 to almost 65 percent

in 2000. This instability has led to a lack of consistent management

direction. In some cases, key management decisions on organization and

leadership issues, such as setting priorities for the program, have been

deferred for years.

Finally, one of the nine types of nuclear weapons in the current stockpile

has begun the life extension process—a step that will be necessary to keep

the nation’s nuclear weapons safe and reliable without explosive testing.

The ongoing life extension of the W87 warhead, which is carried on the

Peacekeeper missile, experienced significant design and production

problems that have raised its costs by over $300 million (about 70 percent)

and caused a key milestone in the schedule to be delayed about 2 years.

Numerous factors contributed to this outcome. The original design to

enhance the structural integrity and extend the stockpile life of the W87 did

not work as planned. In addition, all of the major production facilities in the

nuclear weapons complex experienced significant problems from such

factors as restarting production capabilities that had been moved during

the downsizing of the complex and addressing safety and technician

training issues. However, at the heart of many of the problems was an

inadequate Office of Defense Programs management process and unclear

leadership, which prevented the Office from adequately anticipating and

mitigating the problems that arose. As a result of the program’s experience

with the W87 life extension, management improvements have been

adopted, such as the development of a formal process for managing future

life extensions that parallels the proven process that DOE has used for

decades to design, test, and build new nuclear weapons. However,

additional management improvements, such as establishing a program

manager for each life extension, are needed before the Office of Defense
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Page 10 GAO-01-48 Nuclear Weapons

Programs begins extending the life of two additional warheads—the W76

and W80—that form a significant portion of the stockpile.

Principal Findings

Further Improvements Are

Needed in the Office of

Defense Programs’ Planning

Process

The Office of Defense Programs has made progress in developing a new

planning process for the Stockpile Stewardship Program and is planning

further improvements, such as a comprehensive database to help integrate

the multitude of individual plans currently being developed. The program’s

planning process is underpinned by guidance that provides an overall

strategy for the Stockpile Stewardship Program. A new, detailed planning

structure has been developed to implement the science and production

components that compose the Stockpile Stewardship Program. Finally, the

Congress directed that a plan for a major part of the program’s work—

stockpile life extensions—be developed. The Office of Defense Programs

has issued an interim Stockpile Life Extension Program Plan, which is

intended to ensure that life extension activities for weapons are planned in

detail, coordinated fully, and executed within fiscal resources.

While the Office of Defense Programs has developed over 70 Stockpile

Stewardship Program plans, they are not complete enough to fully support

the Stockpile Stewardship Program’s successful implementation. The plans

are incomplete in two ways. First, the program still does not have all of its

work requirements finalized, such as decisions on upgrades to major

weapons systems, that will drive the program’s scope, schedule, and costs.

Second, the Stockpile Life Extension Program Plan is not yet complete

because planners do not have important information on plant capacity. For

example, one production plant is unable to estimate its capacity for

producing certain weapons components because it does not have a current,

validated model for doing so. Without this information, managers cannot

effectively plan for meeting future life extension work requirements.

The Office of Defense Programs’ plans are not effectively linked to the

program’s management controls. For example, milestones in the plans are

not effectively linked to budgets at the site level, resulting in conflicts

between work requirements and available funding to adequately perform

the work. Milestones and other performance management information

contained in the plans are also not systematically and regularly

incorporated into contracts governing the operation of laboratory and
Executive Summary

Page 11 GAO-01-48 Nuclear Weapons

production sites. Finally, although the Office of Defense Programs’

management recognizes that it is critical for the science work of weapons

design and development to be integrated with the production plants’

processes and capabilities, two separate program plans have been

prepared for the science and production parts of the program that cover

the activities directly supporting specific weapons in the stockpile, such as

the day-to-day care of the weapons, as well as planned life extensions.

However, having two separate program plans makes the integration of the

science and production parts of the program more difficult to achieve, and

important crosscutting issues can be overlooked.

Revised Budget Information

Needed to Improve the

Management of the

Stockpile Stewardship

Program

Prior to its budget submission for fiscal year 2001, the Office of Defense

Programs divided its operating budget submission into two broad program

activity categories, which made determining with precision where funds

were being spent difficult. To address this problem, the Office of Defense

Programs began to develop a new structure around three different

activities, known as Campaigns, Directed Stockpile Work, and Readiness in

Technical Base and Facilities. Outside technical experts and Office of

Defense Programs officials believe that developing and implementing this

new program activity structure can improve the Stockpile Stewardship

Program’s cost management. For example, a comprehensive internal

review of the Stockpile Stewardship Program (called the “30-Day Review”)

concluded that the three new activity categories would allow program

managers to more clearly understand the fixed and variable costs of the

nuclear weapons complex. The study saw the Campaigns and Directed

Stockpile Work activities as encompassing the variable costs of the actual

work performed by the nuclear weapons complex, while the Readiness in

Technical Base and Facilities activity encompasses the fixed costs

associated with the program—the costs of “keeping the doors open.” The

implementation of this approach would, according to the review, provide

Office of Defense Programs, lab, and production plant managers with “an

improved and coordinated tool for determining the costs associated with

managing the nuclear weapons complex.” Managers within the Office of

Defense Programs held similar views.

While program officials have supported this new structure, its

implementation has experienced two consistency problems. First, when

the structure was used to develop the program’s budget submission for

fiscal year 2001, the labs and production plants did not apply the new

budget definitions consistently. While the production plants included all of

their fixed costs in Readiness in Technical Base and Facilities, the labs did
Executive Summary

Page 12 GAO-01-48 Nuclear Weapons

not. Second, the Office of the Chief Financial Officer believed that the way

the program activity structure was being applied was not consistent with

various accounting standards and certain laws and regulations that contain

accounting requirements and could impair the Department’s ability to get a

satisfactory opinion on its financial statement.

Since the original budget submission, DOE and program budget officials

have developed an amendment. One of the effects of this amendment has

been to shift fixed costs for the plants from the Readiness in Technical

Base and Facilities activity to the Campaigns and Directed Stockpile Work

activities. While this was done to ensure that the labs and plants treat

overhead in a consistent way, it means that the fixed and variable costs are

no longer clearly delineated in the program’s budget, making it more

difficult to identify the amount that could be saved if an activity is cut and,

thus, weakening the program’s ability to improve cost management.

Fundamental Organizational

and Leadership Changes

Needed for the Successful

Implementation of the

Office of Defense Programs’

New Mission

Over the past few years, internal and external studies of DOE’s Stockpile

Stewardship Program have pointed out numerous management problems.

In particular, the studies all noted the confusing, overlapping, and, at times,

conflicting lines of authority within DOE and within the Office of Defense

Programs. In response to these findings, the Secretary of Energy

reorganized reporting relationships between DOE’s field and headquarters

offices in April 1999, and the Office of Defense Programs consolidated two

of its headquarters offices in August 1999. Finally, additional organizational

changes are expected as the National Nuclear Security Administration’s

new leadership begins to address problems in implementing the new

agency.

However, DOE’s attempts to reorganize the Office of Defense Programs

have not addressed all of the organizational issues. Problems remain in the

structure of the Office of Defense Programs at three levels—within the

headquarters programmatic offices, between headquarters and the field

offices, and between the contractors overseeing weapons complex sites

and their federal overseers in the field and headquarters. With respect to

the headquarters offices, while the August 1999 consolidation reduced

headquarters’ programmatic offices from three to two, it left the split

between the science offices and the production offices in place. This

bifurcated structure has resulted in widespread dissatisfaction with the

way the program is being managed among DOE and contractor officials at

all levels and has led to duplication of effort and difficulties in getting the

work done. Regarding the relationships between headquarters and the field
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Page 13 GAO-01-48 Nuclear Weapons

offices, one of the key problems noted in a major management study 3

years ago was the existence of “two headquarters”—one in the Office of

Defense Programs’ headquarters and one in the Albuquerque Operations

Office. This situation still exists because clearly defined roles and

responsibilities are lacking, and officials in both Offices, including the

program’s Principal Deputy for Operations, noted problems with

uncertainty about what managers in headquarters and in the field are

authorized to do. Finally, organizational issues between the Office of

Defense Programs, DOE’s field offices, and DOE contractors remain

unresolved. Even after repeated reorganization and realignment attempts,

until October 2000, the Office of Defense Programs did not have control of

the contracts for all of the sites performing substantial amounts of work for

the Stockpile Stewardship Program, such as the Lawrence Livermore

National Laboratory and two of the program’s key production facilities—

the Y-12 Plant at Oak Ridge, Tennessee, and Tritium Operations at

Savannah River, South Carolina. This organizational structure made the

integration and coordination of the Stockpile Stewardship Program

difficult and diffused accountability for the overall performance and

management of key weapons complex activities. A recent reorganization

was designed to correct this problem; however, implementation of the

reorganization has just begun, and important issues, such as the specific

reporting chain for the new area offices, are still being addressed.

Finally, the Office of Defense Programs has suffered from instability in its

leadership and management team. An analysis of senior management

positions in headquarters shows that the proportion of offices vacant or

with acting managers has increased from 17 percent in 1996 to almost 65

percent in 2000. The President’s Foreign Intelligence Advisory Board noted

in its 1999 report that consistent leadership is a hallmark of effective

programs and that longevity is a key to leadership. The lack of consistent

management direction was cited by officials in the field and in

headquarters as an area of concern. The high level of turnover in the Office

of Defense Programs may be contributing to the substantial number of

useful management improvements identified to respond to the various

study recommendations that have not been fully implemented. The

turnover may also contribute to the fact that the same problems are

enumerated year after year without effective and decisive action being

taken to resolve them. Finally, the high rate of turnover impairs the Office

of Defense Programs’ ability to provide consistent and effective leadership,

to take decisive action on difficult problems, and to identify those who

should be held accountable for results.
Executive Summary

Page 14 GAO-01-48 Nuclear Weapons

Management Improvements

Needed for the Office of

Defense Programs to

Conduct Successful

Stockpile Life Extensions

While the life extension program for the W87 warhead is the first, and only,

life extension program conducted to date under the Stockpile Stewardship

Program, DOE expects that all of the weapons in the stockpile will have to

undergo life extensions in the future if they are to remain safe and reliable.

During the early 1990s, DOE recognized the need to make structural

enhancements to, and extend the life of, the W87. Since accomplishing this

required disassembly and refurbishment, DOE and the Department of

Defense decided to initiate a program to extend the life of the W87 for an

additional 30 years.

The life extension program for the W87 has experienced both design and

production problems that contributed significantly to a 2-year schedule

delay in a key milestone for the program and a cost increase of $300 million

(about 70 percent). The original design to enhance the structural integrity

and extend the stockpile life of the W87 did not work as planned, and a

major redesign was required. All of the major production facilities in the

nuclear weapons complex—the Kansas City, Y-12, and Pantex Plants—

experienced significant production problems that resulted from such

factors as restarting production capabilities that had been moved during

the downsizing of the complex and addressing safety and technician

training issues.

Underpinning the problems experienced during the life extension program

for the W87 was the Office of Defense Programs’ lack of an effective

management structure and leadership. While the Office of Defense

Programs has historically used a very detailed program management

process to design and build new nuclear weapons, the life extension

program for the W87 was conducted with little management structure. For

example, the Office did not develop an overall program plan or cost

baseline to manage the entire life extension process for the W87. With

respect to leadership, no one person within the Office of Defense Programs

was expressly in charge of the life extension program for the W87. During

the design phase, Lawrence Livermore National Laboratory’s program

managers led the effort, while during the production phase, DOE’s

Albuquerque Operations Office officials were in charge. During the

transition between these phases, many participants felt that who was in

charge was not clear. Without an effective management structure and

leadership, the potential impact of many of the problems encountered were

neither anticipated nor effectively mitigated.

As a direct result of its experience with the W87, the Office of Defense

Programs has developed a specific management structure for future life
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Page 15 GAO-01-48 Nuclear Weapons

extension programs; however, the development of this process is not

complete. For example, the revised process does not solve the lack of clear

program management leadership throughout the life extension process.

Rather, it continues the current practice of multiple program managers at

multiple locations. In addition, GAO found that, to date, there has been no

formal attempt to catalogue the lessons learned from the W87 life

extension and directly communicate them to managers of upcoming life

extension programs.

Recommendations In order to assist DOE in its mission of effectively maintaining the safety

and reliability of the nuclear weapons stockpile, this report contains

recommendations to the Administrator of the National Nuclear Security

Administration designed to improve program planning, the budget

information available to decision makers, the organization of the program,

and the management process for future stockpile life extensions. (See chs.

2, 3, 4, and 5 for GAO’s specific recommendations.)

Agency Comments and

GAO’s Evaluation

GAO provided DOE’s National Nuclear Security Administration with a draft

of this report for review and comment. In general, the Administration’s

Office of Defense Programs agreed with the findings and recommendations

of the report. In particular, the Office stated that the report presented a

balanced perspective and accurately portrayed areas needing further

improvement and management attention. The Office also cited instances

where it had recently taken management action, such as reorganizing its

field office structure, to correct some of the problems GAO identified. GAO

believes that these actions are positive steps and has recognized them

throughout the report.

The Office did express concern that GAO’s recommendations to address

program planning weaknesses and improve management data possibly

were premised on misinterpretations of the fundamental underpinnings of

weapons activities. However, in both cases, the Office promised to take

action to comply with the intent of GAO’s recommendations. While the

actions the Office has promised are a useful beginning, the full extent of

action GAO recommended is needed to address the problems GAO

identified. Therefore, GAO has retained both recommendations. More

detailed discussions of the National Nuclear Security Administration’s

comments are included in chapters 2, 3, 4, and 5. The Administration’s

comments appear in full in appendix III.
Page 16 GAO-01-48 Nuclear Weapons

Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure Chapte1r

Within the Department of Energy (DOE), the National Nuclear Security

Administration’s Office of Defense Programs is responsible for designing

and maintaining the nation’s nuclear weapons stockpile. In the past, this

mission has included the design, testing, and manufacture of new weapons

systems, as well as the maintenance of existing systems. In the late 1980s,

the Office of Defense Programs’ mission changed as a result of the easing

of Cold War tensions with the former Soviet Union and the negotiation of

arms reduction and weapons test limitation treaties. In response, the Office

of Defense Programs downsized and restructured the nuclear weapons

complex to focus on a new mission of extending the life of existing nuclear

weapons through scientific study, simulation, and refurbishment. However,

the reconfigured weapons complex faces a difficult set of challenges and

constraints.

DOE’s Historical

Mission in Designing

and Maintaining the

Nuclear Weapons

Stockpile

Since the beginning of the Manhattan Project, DOE and its predecessor

agencies have been responsible for designing and maintaining the nation’s

nuclear weapons. DOE’s weapons program was structured to work with

the Department of Defense (DOD) to define the nation’s nuclear weapons

needs and to manage the design and production of the weapons selected

for the stockpile. To fulfill this mission, DOE managed a complex of

research and production facilities, employing thousands of workers.

The Historical Mission of

the Office of Defense

Programs Was to Design,

Test, and Build Nuclear

Weapons

From the beginning of the Manhattan Project in the 1940s, DOE and its

predecessor agencies have been responsible for designing, testing, and

building the nation’s nuclear weapons—weapons that would be deployed

by the military. While the first nuclear weapons were relatively simple

devices, modern nuclear weapons are complex. Most modern nuclear

weapons consist of three sets of assemblies inside a case—a primary, a

secondary, and a set of nonnuclear components. The primary is the fission

stage of a nuclear weapon. Detonated first, the primary produces the

extremely high temperatures and pressures required to produce fusion in

the weapon’s secondary. The secondary, or thermonuclear stage, of a

nuclear weapon produces its energy through the fusion of deuterium and

tritium nuclei. The nonnuclear components control the use, arming, and

firing of the weapon. (See app. I for a simplified explanation of the

mechanics of a generalized modern nuclear weapon.) Explosive testing of

the devices was used to validate designs and to ensure that changes to fix

potential or existing problems or address changing military requirements

worked as expected.
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 17 GAO-01-48 Nuclear Weapons

DOE’s Weapons Program

Was Structured to Meet

Military Requirements for

Continuous Production

DOE and DOD work together to produce the Nuclear Weapons Stockpile

Memorandum, which is forwarded to the President for approval annually.

The memorandum contains a detailed listing of the nuclear weapons to be

included in the stockpile, along with weapons retirements and other

information concerning adjustments to the stockpile. Once the

memorandum is approved, it forms the basis for DOE’s weapons program

planning, embodied in the Production and Planning Directive. This

directive lays out the requirements for the nuclear weapons complex for

the current year plus 5 years and directs planning for the succeeding 5-year

period. The directive is converted into specific direction for the complex by

DOE’s Albuquerque Operations Office and serves as the primary basis for

budget development.

The production of new weapons for the stockpile has traditionally been

managed through a seven-phase process. (See fig. 1.) Old weapons designs

were continually being replaced by new designs; the removal of old

weapons from the stockpile kept the average age of the stockpile low.

Production plant capability was maintained by the constant flow of new

weapons programs that paid for the repair, replacement, and upgrading of

facilities and capital equipment. Because of the continuing pipeline of new

weapons programs, the production plants were also able to maintain

adequate capacity to provide the labs’ designers with weapons components

for testing without derailing production schedules.
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 18 GAO-01-48 Nuclear Weapons

Figure 1: Traditional Weapons Development and Production Cycle

Legend

DRAAG = Design Review and Acceptance Group

FPU = First Production Unit

NWC = Nuclear Weapons Council

POG = Project Officers Group

Source: GAO’s analysis of DOE’s data.

Nuclear Weapons Were

Produced by a Nationwide

Complex of Facilities

By 1988, the nuclear weapons complex employed about 60,000 people and

had a total budget of about $8 billion per year. DOE oversaw 3 national

weapons laboratories, a nuclear weapons test site, and 10 production sites.

Phase 2:

Program

feasibility

study

Phase 3:

Development

engineering

Phase 4:

Production

engineering

Phase 5:

First

production

Phase 6: 

Quantity

production

and stockpile

deployment

Phase 7:

Dismantlement

Phase 1:

Weapon

conception

 Retirement

 from stockpile

 Weapons

 returned from

 DOD

 Temporary

 storage

 Disassembly

 and disposal

 engineering

 Disassembly

 and disposal

Completion 

of design

definition

Cost study

Phase 2A:

Design

definition

and cost 

study

Exploratory

studies

Military 

characteristics 

and stockpileto-target 

sequence 

drafted

Phase 1 

report

Joint DOEDOD feasibility

study

DOE-DOD

agreement 

on division of 

development 

and 

procurement 

responsibilites

Final military 

characteristics 

prepared

POG formed 

for new 

weapon

Development

design

definition

Develop 

production 

processes

Design testing

Pilot 

production 

program 

defined

Training and

acceptance

equipment

production

Adaptation of

development

design

Pilot 

production

Product

engineering

Process

engineering

Tooling

Prototype

procurement

and inspection

Test and

handling

procedures

Quality 

Evaluation 

Release and 

Complete 

Engineering 

Release 

issued

Designers 

certify weapon

Initiate

production 

(FPU) 

 

Implement

quality control

procedures

 

Implement

inspection

procedures

Issue Final 

Weapon 

Design Report 

and Major 

Assembly 

Release

DRAAG 

recommends 

acceptance

DOD/NWC 

accept design

Decision to 

proceed to 

Phase 6

Full-scale

production

Production 

inspection 

and quality 

assurance 

programs 

implemented

Deployment 

in stockpile

Routine 

surveillance, 

maintenance, 

and repair of 

deployed 

weapons
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 19 GAO-01-48 Nuclear Weapons

(See fig. 2.) These sites were operated for the government by management

and operating contractors, who employed most of the people working in

the nuclear weapons complex.

Figure 2: Nuclear Weapons Complex, 1988

Note: Sandia National Laboratories has two facilities, one in California to support the Lawrence

Livermore National Laboratory and one in New Mexico to support the Los Alamos National Laboratory.

This map shows both locations.

Source: GAO’s analysis of DOE’s data.

Each of the sites identified in figure 2 had a defined role in the nuclear

weapons complex. The three national laboratories—Los Alamos (N. Mex.),

Lawrence Livermore (Calif.), and Sandia (N. Mex. and Calif.)—designed

weapons to meet military requirements. Los Alamos and Livermore

designed the nuclear portions of the weapons; Sandia designed the

WA

Oak Ridge Reservation

 Lithium metal targets

 Highly enriched uranium

 Special nuclear materials

Sandia National Laboratories

 Nonnuclear research and development

 Weapons system integration

Sandia National Laboratories

 Nonnuclear research and development

 Weapons system integration

Rocky Flats Plant

 Pit production

 Plutonium casting and machining

Pantex Plant

 Assembly and disassembly

 High explosives

 Surveillance 

Savannah River Site

 Plutonium and tritium production

 Nuclear materials processing

 Tritium separation, purification,

 and packaging

Idaho Chemical Processing Plant

 Uranium recovery from spent

 nuclear fuel

Mound Plant

 Detonators

 Small explosive components

Feed Materials Production Center

 Uranium feed material for

 production reactors

Los Alamos National Laboratory

 Nuclear weapons design

 Nuclear research and development

Lawrence Livermore

National Laboratory

 Nuclear weapons design

 Nuclear research and development

Nevada Test Site

 Nuclear testing

 Nonnuclear experiments

Hanford Reservation

 Plutonium production 

 Nuclear materials processing

Pinellas Plant

 Neutron generators

 Detectors and testing devices

Kansas City Plant

 Nonnuclear component production
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 20 GAO-01-48 Nuclear Weapons

nonnuclear components and ensured that all components of the systems

worked in an integrated manner. Confidence in the stockpile was

maintained by testing, mostly performed at the Nevada Test Site, which

hosted over 900 nuclear weapons tests. The various production sites

produced weapons-grade materials or components, assembled weapons,

performed quality assurance and maintenance functions on the weapons in

the active stockpile, and dismantled weapons retired from the stockpile.

(See table 1.)

Table 1: Roles of the Production Sites in the Nuclear Weapons Complex, 1988

Source: GAO’s analysis of DOE’s data.

Site Location Purpose

Feed Materials Production Center Fernald, Ohio Production of feed materials for complex reactor sites

Hanford Reservation Richland, Wash. Production reactor producing plutonium; materials

processing

Idaho Chemical Processing Plant Idaho Falls, Idaho Recover uranium from spent test reactor and naval

propulsion reactor fuels

Kansas City Plant Kansas City, Mo. Produce and procure nonnuclear metal, plastic, and

electronic components

Mound Facility Miamisburg, Ohio Research, development, and production of detonators

and other small explosive components

Paducah Gaseous Diffusion Plant Paducah, Ky. Enrichment of uranium

Pantex Plant Amarillo, Tex. Weapons assembly, fabrication of chemical explosives,

quality control, repair, retirement, disposal, and

disassembly of retired weapons

Pinellas Plant Largo, Fla. Produce neutron-generators, detectors, and testing

devices

Portsmouth Gaseous Diffusion Plant Piketon, Ohio Enrichment of uranium

Rocky Flats Golden, Colo. Cast and machine plutonium components

Savannah River Plant Aiken, S.C. Production reactors to produce plutonium and tritium;

materials processing; and tritium separation,

purification, and packaging

Y-12 Plant Oak Ridge, Tenn. Production of lithium metal target material for tritium

production; processing and fabrication of highly

enriched uranium, lithium, and other special materials
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 21 GAO-01-48 Nuclear Weapons

The Mission and

Structure of DOE’s

Nuclear Weapons

Complex Has Changed

Since the end of the Cold War, the United States has made several key

decisions that have directly affected the mission of DOE’s nuclear weapons

complex. As a result of these decisions, the composition of the stockpile

and, consequently, the mission of the nuclear weapons complex has

changed from “design, build, and test” to extending the life of existing

nuclear weapons through “scientific study, simulation, and refurbishment.”

To address this new mission, DOE created the Stockpile Stewardship

Program in 1992, introduced new planning processes, and reconfigured the

nuclear weapons complex and its workforce.

DOE’s Mission Has Been

Changed in Response to

International Events

Since 1945, the nuclear weapons labs have designed more than 95 different

nuclear weapons. Of these weapons, about 25 types were in the active

stockpile during the Cold War era. In 1990, the United States had about

21,000 nuclear weapons. However, in 1991, two major events changed the

country’s nuclear posture—the first Strategic Arms Reduction Treaty

(START I) between the United States and Russia was signed, and the

United States announced a new arms control initiative that resulted in the

withdrawal of the Army’s nuclear weapons from overseas bases and the

retirement of several thousand nuclear warheads. START I will reduce the

number of strategic nuclear weapons in the U. S. stockpile to 6,000 when

fully implemented in 2001.1 A second treaty (START II) ratified by the

United States and Russia will further reduce the U.S. strategic stockpile to

about 3,500 weapons. In 1995, the administration announced that it would

pursue a Comprehensive Test Ban Treaty that would limit nuclear testing

by participating countries to extremely low levels, referred to as zero yield.

While the Comprehensive Test Ban Treaty was rejected by the U.S. Senate

in October 1999, a unilateral U.S. moratorium on testing that began in 1992

continues. At the present time, the U.S. stockpile consists of nine weapons

types. (See table 2.) The lifetimes of the weapons currently in the stockpile

will be extended well beyond the minimum life for which they were

originally designed—generally about 20 years—increasing the average age

of the stockpile and, for the first time, leaving DOE with large numbers of

weapons 30 to 40 years old.

1

These treaties limit only the number of strategic nuclear weapons that can be loaded on

treaty-specified and treaty-verified strategic missiles and bombers. The total U.S. stockpile

is larger than the number of weapons allowed under START because the stockpile contains

weapons that are not covered by the treaties.
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 22 GAO-01-48 Nuclear Weapons

Table 2: Weapons in the Enduring Stockpile

Legend

ALCM/ACM/TLAM-N = designations for cruise missiles.

ICBM = intercontinental ballistic missile.

SLBM = submarine launched ballistic missile.

Source: FY 2000 Stockpile Stewardship Plan, DOE (Mar. 15, 1999) p. 1-3.

DOE’s Weapons Program

Has Been Restructured to

Address the Changing

Mission

As a result of changes in arms control, arms reduction, and

nonproliferation policies, DOE was directed by a 1993 Presidential

Decision Directive and by the National Defense Authorization Act for

Fiscal Year 1994 to “establish a stewardship program to ensure the

preservation of the core intellectual and technical competencies of the U.S.

in nuclear weapons.” The Stockpile Stewardship Program2 was “. . .

developed to increase understanding of the basic phenomena associated

with nuclear weapons, to provide better predictive understanding of the

safety and reliability of weapons, and to ensure a strong scientific and

technical basis for future United States nuclear weapons policy

objectives.”3 The Stockpile Stewardship Program is organized around three

major program segments—Campaigns, Directed Stockpile Work, and

Readiness in Technical Base and Facilities. Starting in fiscal year 2001,

these categories will be used for budgeting as well as program planning.

Warhead or bomb mark Description Laboratories Primary use Military service

B61 3/4/10 Tactical bomb Los Alamos, Sandia Air to surface Air Force

B61 7/11 Strategic bomb Los Alamos, Sandia Air to surface Air Force

W62 ICBM warhead Lawrence Livermore, Sandia Surface to surface Air Force

W76 SLBM warhead Los Alamos, Sandia Underwater to surface Navy

W78 ICBM warhead Los Alamos, Sandia Surface to surface Air Force

W80 0/1 ALCM/ACM/TLAM-N

warhead

Los Alamos, Sandia Air to surface,

underwater to surface

Air Force, Navy

B83 0/1 Strategic bomb Lawrence Livermore, Sandia Air to surface Air Force

W87 ICBM warhead Lawrence Livermore, Sandia Surface to surface Air Force

W88 SLBM warhead Los Alamos, Sandia Underwater to surface Navy

2

Formerly, called the Stockpile Stewardship and Management Program.

3

See Record of Decision Programmatic Environmental Impact Statement for Stockpile

Stewardship and Management, Department of Energy (61 Fed. Reg., 68014, Dec. 26, 1996).
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 23 GAO-01-48 Nuclear Weapons

• Campaigns are technically challenging, multiyear, multifunctional

efforts conducted across the Office of Defense Program’s laboratories,

production plants, and the Nevada Test Site. They are designed to

develop and maintain the critical capabilities needed to enable

continued certification of the stockpile into the foreseeable future,

without underground testing. Campaigns have milestones and specific

end-dates or goals, effectively focusing research and development

activities on clearly defined deliverables.

• Directed Stockpile Work includes the activities that directly support

specific weapons in the stockpile. These activities include the current

maintenance and day-to-day care of the stockpile, as well as planned life

extensions.

• Readiness in Technical Base and Facilities includes the physical

infrastructure and operational readiness required to conduct Campaign

and Directed Stockpile Work activities at the production plants,

laboratories, and the Nevada Test Site. This includes ensuring that the

infrastructure and facilities are operational, safe, secure, compliant, and

ready to operate.4

In addition, a major part of DOE’s new Stockpile Stewardship Program is

the Stockpile Life Extension Program, which establishes a planning

process by which life extension activities for weapons are managed,

enabling the weapons laboratories to develop viable options for

maintaining the safety and reliability of the U.S. nuclear stockpile. To

implement the Stockpile Life Extension Program, DOE has developed a

revised weapons acquisition process, called the “6.X process” for the

Stockpile Life Extension Program. The 6.X process replaces Phase 6 in the

traditional weapons development and production cycle (shown in fig. 1)

with a new series of steps designed to assess the weapons, determine

options for changes, and direct the performance of the chosen option. (See

fig. 3.)

4

Under the current budget system, construction projects to provide new facilities are

budgeted for separately. Once the facilities are built, they will come under the jurisdiction of

the Readiness in Technical Base and Facilities category.
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 24 GAO-01-48 Nuclear Weapons

Figure 3: The New “6.X” Weapons Refurbishment Cycle

Legend

LEP = Life Extension Program

POG = Project Officers Group

REST = Retrofit Evaluation System Test

Source: GAO’s analysis of DOE’s information.

Phase 6.2:

Feasibility study 

and option 

downselect

Phase 6.3:

Development

engineering

Phase 6.4:

Production

readiness

engineering

Phase 6.5:

First

refurbishment

Phase 6.6: 

Full-scale 

production

Phase 6.1:

Concept

assessment

 Review of

 stockpile

evaluation, 

baselining, 

and experience

 Risk

 assessment

 (must, should,

 etc.)

 Life extension

 option

 formulation

 Initiate 

 POG interface

 Workload 

 analysis

 Full-scale

 refurbishment

 Continue

 retrofit

 evaluation

 First

 refurbishment

 unit delivery

 First weapon

 refurbishment

 REST

 evaluation

 Process

 prove-in

 Product

 qualification

 Certification

 models and tests

 Type and trainer

 support

Concurrent engineering

 Engineering

 and production

 development

 Development

 test support

 Process

 characterization

 Design 

 definition

 Program 

 planning

 Baseline cost 

 analysis

 Impact

 assessment

 (design and

 production)

LEP approval

 Joint DOE/DOD

 in-depth analysis

 Extended

 service life

 considerations

 System 

 trade-offs

 (design and cost)

 LEP proposal 

Phase 6.2A:

Design 

definition

and cost study

Nuclear Weapons Council's approval

DOE decision
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 25 GAO-01-48 Nuclear Weapons

To support the Stockpile Stewardship Program, DOE has also proposed

building several large experimental facilities, including the National

Ignition Facility at Lawrence Livermore National Laboratory, the Dual Axis

Radiographic Hydrodynamic Test Facility at Los Alamos National

Laboratory, and the Processing and Environmental Technology Laboratory

at Sandia National Laboratory. These facilities, along with greatly enhanced

computational capabilities, are meant to enable weapons designers to

develop sophisticated, three-dimensional models of nuclear weapons

explosions to supplement existing data collected during tests.5 The

ultimate goal is to enable DOE and DOD to jointly certify the safety and

reliability of the enduring stockpile without the use of nuclear testing.

In addition, the Congress established the National Nuclear Security

Administration in October 1999 as a semiautonomous agency within DOE

with responsibility for the national nuclear weapons, nonproliferation, and

naval reactors programs. The agency was established to correct longstanding management problems at DOE, which were most recently

highlighted by major security problems at its national laboratories.

The Weapons Complex Has

Been Restructured to Meet

New Mission Requirements

DOE significantly restructured the nuclear weapons complex to meet its

new mission of ensuring the safety and reliability of the stockpile under the

Stockpile Stewardship Program. While the three weapons design labs were

retained, the Nevada Test Site and the production plant’s infrastructure

were significantly reduced in size. (See fig. 4.) Some or all weapons

program work was discontinued at eight production sites, leaving only four

in the reconfigured nuclear weapons complex. In addition, some

production work was transferred to two of the weapons design labs.

5

See Nuclear Weapons: DOE Needs to Improve Oversight of the $5 Billion Strategic

Computing Initiative (GAO/RCED-99-195, June 28, 1999) and National Ignition Facility:

Management and Oversight Failures Caused Major Cost Overruns and Schedule Delays

(GAO/RCED-00-141, Aug. 8, 2000).
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 26 GAO-01-48 Nuclear Weapons

Figure 4: DOE’s Reconfigured Nuclear Weapons Complex—Sites’ Roles in 2000 and Employment Changes, 1988 Through 2000

Notes:

Sandia National Laboratories has two facilities, one in California to support the Lawrence Livermore

National Laboratory and one in New Mexico to support the Los Alamos National Laboratory. This map

shows both locations.

Numbers shown in parenthesis indicate the percent decrease in employment from 1988 to 2000.

Source: GAO’s analysis of DOE’s data.

WA

Y-12 Plant

 Uranium components

 Salt components

 Secondary assembly

 Employment change: (36%)

Sandia National Laboratories

 Nonnuclear research and development

 Employment change (both sites): (15%)

Sandia National Laboratories

 Nonnuclear research and development

 Weapons system integration

 Neutron generators

 Nonnuclear components

 Employment change (both sites): (15%)

Pantex Plant

 Assembly and disassembly

 High explosives

 Surveillance

 Employment change: 10% 

Savannah River Site

 Tritium recycling

 Tritium production

 Employment change: (90%)

Los Alamos National Laboratory

 Nuclear weapons design

 Nuclear research and development

 Plutonium components

 Detonators

 Employment change: 50%

Lawrence Livermore

National Laboratory

 Nuclear weapons design

 Nuclear research and development

 Employment change: 2%

Nevada Test Site

 Nonnuclear experiments

 Employment change: (64%)

Kansas City Plant

 Nonnuclear components

 Employment change: (57%)
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 27 GAO-01-48 Nuclear Weapons

In addition, the specific missions of some sites have also changed. For

example, because sites where weapons material production reactors were

located, such as Savannah River, no longer operate those reactors, the

production of new weapons-grade plutonium has been discontinued. Some

functions of closed sites were transferred to other portions of the complex,

whereby the weapons labs took on limited production functions in addition

to their research, development, and design functions. For example, a

limited capacity to produce plutonium pits6 is being developed at Los

Alamos National Laboratory to replace the production capability lost when

the Rocky Flats Plant closed, and the production of neutron generators was

transferred from the Pinellas Plant to Sandia National Laboratories.7 The

role of the Pantex Plant was expanded to include temporary storage of

strategic reserve pits, and all uranium purification and reprocessing was

consolidated at the Y-12 Plant.

Employment throughout the complex peaked in 1990 and began to decline

after that date as production ceased at many sites and those sites were

transferred to DOE’s Office of Environmental Management for

environmental cleanup. (See table 3 for management and operating

contractor employment data.) However, that decrease has not been spread

uniformly throughout the complex. From 1988 through 2000, employment

at Los Alamos has increased about 50 percent, while the Savannah River

Site has seen Defense Programs’ employment fall about 90 percent.8

Overall, the remaining production plants have had to manage a 66-percent

decrease in employment, while the labs have increased employment about

9 percent.

6

A pit is the initial, subcritical assembly of fissile material in a nuclear weapon. In such an

assembly, a fission chain reaction can be sustained only by the addition of neutrons from an

independent source.

7

A neutron generator is a device that produces neutrons that are injected into the pit of a

nuclear weapon to initiate the chain reaction that changes the reaction to a self-sustaining,

or critical, reaction within the weapon.

8

While these workers have left the nuclear weapons complex, not all of them have left DOE,

since many former nuclear weapons complex workers were transferred, along with

facilities, to the Environmental Management Program.
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 28 GAO-01-48 Nuclear Weapons

Table 3: Management and Operating Contractor Employment in the Nuclear

Weapons Complex, 1988 Through 2000

Source: GAO’s analysis of DOE’s data.

Total federal employment in the complex has also declined about 34

percent over the last decade from a high of 3,241 in fiscal year 1993 to 1,749

in fiscal year 2000. Employment in the Office of Defense Programs

headquarters office has fallen by about 20 percent from 1991 through 2000.

(See table 4.) The majority of federal staff is located in the Albuquerque

Operations Office.9 In fiscal year 2000, the Albuquerque Operations Office

had more than 2-1/2 times as many federal staff as headquarters did (744 to

276, respectively), making the former the largest federal office in the

complex. As of March 1, 2000, headquarters and field personnel working in

Employment by fiscal year

Weapons complex site 1988 1992 1995 2000

Percent

change,

1988

through

2000

Rocky Flats Plant 4,990 5,332 935 0 (100)

Pinellas 1,565 1,386 511 0 (100)

Mound 1,754 1,305 679 0 (100)

Oak Ridge/Y-12 Plant 5,615 5,384 4,767 3,612 (36)

Savannah River 16,616 14,796 7,618 1,714 (90)

Pantex Plant 2,462 2,529 3,007 2,706 10

Kansas City Plant 5,760 3,941 2,984 2,499 (57)

Nevada Test Site 4,609 4,216 2,406 1,670 (64)

Lawrence Livermore National

Laboratory

3,841 3,609 3,251 3,934 2

Los Alamos National Laboratory 3,173 3,194 3,143 4,746 50

Sandia National Laboratories 4,278 4,548 4,168 3,620 (15)

Other 167 1,598 359 2 (99)

Total 54,830 51,838 33,828 24,503 (55)

9

The staff of the Transportation Safeguards Division are not included in the total staffing for

the Albuquerque Operations Office because DOE now reports this unit separately. The

Transportation Safeguards Division staffs DOE’s program to ship materials that require

special security measures, such as nuclear weapons and materials, to and from military

locations and between facilities in the weapons complex within the continental United

States.
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 29 GAO-01-48 Nuclear Weapons

the weapons program became employees of the new National Nuclear

Security Administration.

Table 4: Federal Staffing in the Office of Defense Programs, 1991 Through 2000

a

Until 1995, the staff level for the Albuquerque Operations Office included staffing for the Secure

Transportation function. Beginning in 2000, DOE began tracking Secure Transportation as a separate

decision unit. DOE’s figures account for that change retroactively for the period from fiscal year 1995

through fiscal 2000. Thus, the percent change in staffing for the Secure Transportation unit from fiscal

year 1991 to fiscal 2000 cannot be calculated from the available data. However, the unit has an

average staffing level of 330 for the period from fiscal year 1995 through fiscal 2000.

b

In fiscal year 1991, the staffing level for Savannah River included staffing for the reactor restart

program that was discontinued after fiscal 1992.

Source: GAO’s analysis of DOE’s data.

The Reconfigured

Weapons Complex

Faces Challenges and

Constraints

DOE’s Stockpile Stewardship Program faces difficult challenges and

constraints. The directors of DOE’s nuclear weapons laboratories

acknowledge that the ability to continue to certify the nation’s nuclear

weapons without testing is problematic. In addition, the existing

infrastructure in the nuclear weapons complex is very old—much of it

having been built in the 1940s and 1950s—making it difficult and expensive

to maintain. Downsizing has also created imbalances in the federal and

contractor workforce. Finally, DOE must determine what program its

funding of about $4.5 billion annually can support. Meeting these

challenges requires long-term planning and budget support to ensure that

all parts of the weapons complex can perform their missions.

Employment by fiscal year

Location 1991 1993 1995 2000

Percent change

1991 through

2000

Headquarters 343 515 366 276 (19.5)

Albuquerquea 1,340 1,495 964 744 (44.5)

Idaho 21 27 0 0 (100.0)

Nevada 305 362 307 235 (23.0)

Oakland 63 91 87 83 31.7

Oak Ridge 81 97 77 59 (27.2)

Rocky Flats 130 185 0 0 (100.0)

Savannah Riverb 384 469 18 29 (92.4)

Secure Transportation a a 366 323 a

Total 2,667 3,241 2,185 1,749 (34.4)
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 30 GAO-01-48 Nuclear Weapons

Stockpile Stewardship

Seeks to Replace Testing

With Simulation Based on

the Results of Experiments

Among the questions that remain to be answered about Stockpile

Stewardship are several that bear on whether the enduring stockpile can be

maintained without testing. As time passes, the weapons themselves will

change as the materials used in them age in “dynamic and not necessarily

predictable ways,” according to the Director of the Lawrence Livermore

National Laboratory. In addition, according to the Director of the Sandia

National Laboratories, exhaustive nonnuclear tests of components and

systems are needed. Finally, new computer models are being developed to

predict the performance of various aspects of nuclear weapons. The most

advanced supercomputers available today do not provide “sufficient

accuracy and . . . sufficient detail to provide maximum confidence in the

stockpile,” according to the Director of the Los Alamos National

Laboratory.

Another issue is deciding what changes can and should be made to

weapons in the enduring stockpile—defining the requirements for each

weapon in the enduring stockpile. Some changes are inevitable, since some

of the processes and materials used for particular components are no

longer available. However, weapons are most likely to have defects

requiring action early in their life cycle, that is, shortly after changes have

been introduced into a design. Thus, even changes that would generally be

viewed as beneficial, such as those designed to improve safety, could

introduce new defects. Evaluating whether changes will be made to a

weapon will hinge on having a good understanding of the requirements and

trade-offs involved.

Recapitalization of the

Nuclear Weapons Complex’s

Infrastructure to Efficiently

Perform Its Mission Will Be

Expensive

Although DOE has met production goals over the last decade, DOE officials

acknowledge that they have done so by neglecting the infrastructure and

allowing some key production capabilities to become unusable. In order to

continue to maintain the existing cadre of weapons, DOE must maintain all

of the processes and capabilities required to rebuild or refurbish any

component of any weapon in the enduring stockpile. The basic capabilities

needed to maintain the stockpile do not vary significantly in relation to the

number of weapons or the number of weapons types in the stockpile,

leading to high fixed costs to maintain production capability. Senior DOE

officials acknowledge that the condition of the infrastructure, especially at

the production facilities, has deteriorated to the point that it threatens

DOE’s ability to meet its stockpile stewardship mission.

Much of the infrastructure of the nuclear weapons complex was originally

built in the 1950s. Buildings of that age are expensive to maintain and
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 31 GAO-01-48 Nuclear Weapons

operate under the best of conditions and often cannot meet current safety

and environmental standards without expensive renovations. Preventive

and corrective maintenance spending has been reduced and, at the

production plants, is a fraction of what comparable private industry

facilities spend. For example, contractor officials at the Pantex Plant

reported that they have been able to reinvest only 1 to 2 percent of the

value of capital equipment each year to fund the repair and replacement of

capital equipment and productivity improvements. In contrast, they

estimate the average reinvestment in private industry for capital equipment

at about 9 to 11 percent per year. Overall, program officials believe that 3 to

5 percent should be the reinvestment goal for the entire facility.

In addition, officials at both Y-12 and Pantex reported that there are

infrastructure projects that should be started now if they are to meet the

current Stockpile Life Extension Program schedule, but these projects are

not funded. While projects to correct problems with the infrastructure,

such as making major repairs, take 5 to 7 years to plan, budget, and

implement, some existing infrastructure conditions reported by the

production plants have the potential to shut down work and represent

potential safety hazards. For example, the Y-12 Plant has been unable to

fund the maintenance or demolition of an obsolete wooden cooling tower

that represents a fire hazard. Because the operating cooling tower is

situated immediately adjacent to the obsolete cooling tower, a fire in the

old tower could destroy both, leading to a shut down of operations. At the

Pantex Plant, specially designed blast-mitigating roofs that cover the cells

and bays used for working with high explosives in nuclear weapons

assembly and disassembly operations need constant repair to prevent

native plants from rooting in cracks, causing leaks that can restrict or stop

production activities. At the Y-12 Plant, some facility walls and roofs are in

such poor condition that workers are no longer able to work in portions of

some production buildings.

Rebuilding the Weapons

Complex Workforce

Presents Additional

Challenges

In addition, with the reconfiguring of the complex and decrease in program

budgets, many of the sites have been unable to do the hiring necessary to

supply the complex with skilled technicians, machinists, engineers, and

scientists. Weapons design and production require unique skills and

process knowledge, as well as a national security clearance. As workers

have left the nuclear weapons complex, those skills have been lost to the

complex, even when the workers were still employed by contractors

operating other DOE programs, such as workers transferred along with

sites to the Environmental Management Program. For example, technicians
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 32 GAO-01-48 Nuclear Weapons

dismantling weapons must be certified before they are allowed to work on

a specific weapon type. Gaining certification requires rigorous training,

including hands-on work on the weapon under the supervision of a

certified technician, while maintaining certification requires that the

technicians continue working on the process for which they are certified.

In some cases, only one or two people with knowledge of key processes

remain at a site. This situation has resulted in an aging workforce and lost

opportunities to pass knowledge and skills from one generation of workers

to the next. Each site’s situation is unique in terms of the challenges that

the site must meet to recruit new workers in key skill areas. But, while the

sites have plans for renewing their workforce, a senior DOE official

acknowledges that these plans have not been fully funded.

Fitting the Stockpile

Stewardship Program Into

the Reduced Budget

DOE’s weapons budget fell from about $8 billion a year in the late 1980s to

about $4.5 billion in the late 1990s. In October 1997, an agreement was

struck between DOE, the Office of Management and Budget, and the

National Security Council on a 10-year budget of $45 billion for the

emerging Stockpile Stewardship Program. That agreement helped to

stabilize the weapons program during the early part of the transition to its

new mission. However, DOE officials believe that it has since become clear

that $4.5 billion a year in funding may not pay for the program that was

envisioned at that time—building new experimental facilities,

recapitalizing the nuclear weapons complex’s infrastructure, rebuilding

atrophied production capabilities, and extending the life of all of the

weapons in the stockpile by an additional 30 years. Thus, according to

senior Office of Defense Programs managers, DOE recognizes that it must

more clearly articulate the choices inherent in level funding of the program

so that policymakers can decide whether to rescope the objectives of the

program or change the funding constraint.

DOE Has Begun to Make

Management Improvements

to Address These

Challenges and Implement

Its New Mission

In response to its new mission, DOE has made changes to the management

structure of the Office of Defense Programs to implement the Stockpile

Stewardship Program and to implement the new National Nuclear Security

Administration. The Office of Defense Programs has also begun to take

steps to meet the challenges and constraints that face the Stockpile

Stewardship Program. For example, the Office of Defense Programs has

developed new planning processes to fit its changing mission. (See ch. 2.)

The Office has also developed a new budget structure to provide additional

management information. (See ch. 3.) DOE and the Office of Defense

Programs have made numerous changes in the Stockpile Stewardship
Chapter 1

Background on DOE’s Office of Defense

Programs Mission and Structure

Page 33 GAO-01-48 Nuclear Weapons

Program’s organizational structure to address the changing demands of the

program’s new mission. (See ch. 4.) Finally, the Office of Defense Programs

has begun to develop management processes to oversee the weapon life

extension process. (See ch. 5.)
Page 34 GAO-01-48 Nuclear Weapons

Chapter 2

Further Improvements Are Needed in the

Office of Defense Programs’ Planning

Process Chapte2r

The Office of Defense Programs has developed an extensive, multitiered

planning process to manage its Stockpile Stewardship Program; however,

the plans generated by this process are incomplete in two important

respects. First, the Office of Defense Programs is still trying to determine

some key requirements for the Stockpile Stewardship Program, such as

validating the quantities of weapons to be refurbished. Until this process is

complete, important aspects of the program, and thus the plans associated

with them, are subject to change. Second, a congressionally mandated,

cross-cutting plan to support the life extension of the nuclear stockpile—

known as the Stockpile Life Extension Plan—does not contain complete

information on such important issues as production plant capacity and

budget issues. More fundamentally, while the Office of Defense Programs

has developed over 70 plans, it has not integrated them into its system of

management controls for the Stockpile Stewardship Program, including the

program’s budget and the mechanisms used to oversee its contractors.

The Office of Defense

Programs Has

Developed a New

Planning Process to Fit

Its Changing Mission

The Office of Defense Programs’ planning process is evolving from a

process intended to support a design, test, and build mission to a process

designed to better fit the Office’s revised Stockpile Stewardship mission of

refurbishing the existing stockpile under a nuclear test moratorium. As

such, many elements of the planning process are being adjusted to better fit

current mission needs, including the structuring of an entirely new set of

plans for carrying out the Stockpile Stewardship Program.

DOE’s Strategic Plan and

the Stockpile Stewardship

Plan Describe the Overall

Strategy for the Stockpile

Stewardship Program

Two documents are intended to provide the overall plans for DOE’s nuclear

weapons program—DOE’s Strategic Plan and the Office of Defense

Programs’ Stockpile Stewardship Plan. DOE’s Strategic Plan represents the

fundamental basis for all planning within the Department. It sets the longterm directions and policies to be carried out by the Department’s

programs and field organization. The Strategic Plan contains four business

lines—Energy Resources, Environmental Quality, National Nuclear

Security, and Science. The National Nuclear Security business line includes

a set of performance goals and strategies for addressing how DOE will

effectively support and maintain a safe and reliable stockpile without

nuclear testing.

The Stockpile Stewardship Plan (or so-called “Green Book”) was first

developed in 1995 to describe to customers, such as DOD, the Office of

Defense Programs’ efforts to support and maintain a safe and reliable

stockpile. This plan consists of a “corporate-level, multiyear program plan
Chapter 2

Further Improvements Are Needed in the

Office of Defense Programs’ Planning Process

Page 35 GAO-01-48 Nuclear Weapons

that describes the Stockpile Stewardship strategy.” Annual preparation of

the plan was required by the National Defense Authorization Act for Fiscal

Year 1998. However, according to planning officials in the Office of Defense

Programs, past Stockpile Stewardship Plans simply listed program

activities and did not serve as a comprehensive planning document that set

priorities and allocated resources. As a result, some users found the plan’s

usefulness limited.

A New, Detailed Planning

Structure Has Been

Developed to Implement the

Stockpile Stewardship

Program

To improve planning for the Stockpile Stewardship Program, the Office of

Defense Programs has recently developed a new planning structure. This

structure is built around two high-level efforts: (1) Research, Development,

and Simulation and (2) Military Application and Stockpile Operations. The

Research, Development, and Simulation effort is intended to encompass

the research capability necessary to support a safe and reliable stockpile,

while the Military Application and Stockpile Operations effort is intended

to include the regular maintenance of weapons in the stockpile. For each

effort, the Office of Defense Programs has defined a three-tiered planning

structure situated below the top-level Strategic Plan and the Stockpile

Stewardship Plan. This three-tiered structure is intended to bring together

high-level requirements—strategic performance goals—with lower-level

objectives, strategies, and performance measures, such that each lowerlevel plan provides an additional level of detail. Table 5 provides more

detail on this structure. Finally, to accommodate the variety and differing

nature of work within the Stockpile Stewardship Program, the Office of

Defense Programs organized work within its new planning structure into

three areas—Campaigns, Directed Stockpile Work, and Readiness in

Technical Base and Facilities. (See ch. 1 for a definition of these areas.)
Chapter 2

Further Improvements Are Needed in the

Office of Defense Programs’ Planning Process

Page 36 GAO-01-48 Nuclear Weapons

Table 5: Office of Defense Programs Three-Tiered Planning Structure

Source: GAO’s analysis of DOE’s data.

In addition to this new planning structure, the Office of Defense Programs

has retained other planning processes from its prior mission. Some of these

processes provide work direction for the production plants, while others

serve as site-level strategic plans. For example, the annual Production and

Planning Directive provides detailed guidance regarding monthly schedules

of production for the production plants. At the strategic level, each site

performing Office of Defense Programs activities is required to prepare

annually a 10-Year Site Plan for the long-range management of its facilities

and infrastructure.

A Stockpile Life Extension

Program Plan Has Also

Been Developed

Because the nation is no longer performing nuclear tests and producing

new weapons, the life of the current stockpile must be extended. The

complexity of the task and the extent and size of the current nuclear

weapons complex make this a major challenge. As a result, in fiscal year

1996, the Office of Defense Programs established the Stockpile Life

Extension Program, managed by the Office of Military Application and

Stockpile Operations.

To plan for the work of stockpile life extension, the Congress, in Section

3133 of the National Defense Authorization Act for Fiscal Year 2000,

required DOE to prepare an annual Stockpile Life Extension Program Plan

that was due in January 2000 and thereafter with each subsequent annual

budget submission. The plan’s goal is to ensure that stockpile life extension

activities are planned in detail, coordinated fully, and executed within fiscal

resources. In the act, the Congress also required the Secretary of Energy to

incorporate mechanisms into the plan to (1) expedite the collection of

information necessary for the Stockpile Life Extension Program; (2) ensure

Tier Plan Description

1 Research, Development and

Simulation Plan; and Military

Application and Stockpile

Operations Plan

These plans define responsibilities for activities described in the Stockpile Stewardship

Plan and “higher-level planning documents,” such as the DOE Strategic Plan.

2 Program Plans These plans exist for each major area of work, such as for Campaigns, Directed

Stockpile Work, and Readiness in Technical Base and Facilities. They describe “what”

will be done to fulfill each program’s responsibilities for the Stockpile Stewardship Plan.

3 Implementation Plans These plans describe “how” the various programs and campaigns will accomplish their

objectives and milestones for doing so. Some of these plans are weapon-specific.
Chapter 2

Further Improvements Are Needed in the

Office of Defense Programs’ Planning Process

Page 37 GAO-01-48 Nuclear Weapons

the assignment of roles and missions for each laboratory and plant,

including allocating workload, modernizing facilities, and retaining worker

skills; and (3) identify the funds needed in current and future fiscal years

and allocate funds by weapon type and facility.

The Stockpile

Stewardship Program’s

Plans Are Incomplete

and Are Not Linked

With Management

Controls

While the Office of Defense Programs has developed over 70 Stockpile

Stewardship plans with varying levels of detail, these plans are not

complete enough to fully support the successful implementation of the

program and are not linked to program management controls. First, the

Office of Defense Programs is in the process of reassessing and prioritizing

important program requirements for maintaining a safe and reliable

stockpile. Until this process is complete, important aspects of the program,

and the plans associated with them, are subject to change. Second, the

Stockpile Life Extension Program’s plan does not have the current and

complete information necessary to detect and correct plant capacity

shortfalls and lacks information necessary to address site workload and

budget issues. Third, planning efforts are not fully linked to management

controls such as program budgets, contracts, and other associated plans.

Stockpile Stewardship Plans

Are Not Based on Firm

Work Requirements

Following the defeat of the Comprehensive Test Ban Treaty in October

1999, the Secretary of Energy directed the Under Secretary to conduct a

review of the Stockpile Stewardship Program, called the “30-Day Review.”

One key finding of this review was that the Stockpile Stewardship Program

did not have a formal process for (1) assessing the program’s requirements,

that is, what actually needs to be done; (2) developing implementation

plans, with corresponding scopes, schedules, and budgets; and (3)

prioritizing the work. The 30-Day Review concluded that this situation had

put significant stress on the program as it tried to accept additional

requirements without additional budget resources.

In response, the Office of Defense Programs established a Requirements

Assessment and Implementation Team in May 2000 to review, prioritize,

and approve program activities for maintaining a safe, secure, and reliable

stockpile. The team’s mission includes assessing and prioritizing DOE’s

activities and validating program requirements (i.e., determining what

work requirements are valid and necessary). The team will review the

developed options for extending the life of weapons in order to balance

military needs with the limited resources available. According to planning

officials in the Office of Defense Programs, requirements for the Stockpile

Stewardship Program will be “validated” through a series of negotiations to
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Further Improvements Are Needed in the

Office of Defense Programs’ Planning Process

Page 38 GAO-01-48 Nuclear Weapons

take place with DOD and others between now and the end of fiscal year

2001.

Although most of the Stockpile Stewardship Program’s plans were

considered to be “final” in May 2000, planning officials in the Office of

Defense Programs have stated that the plans will require significant change

as a result of the effort to redefine work requirements. For example, the

Requirements Assessment and Implementation Team is awaiting

information from DOD for validating warhead quantities relative to that

Department’s delivery systems—missiles, airplanes, or submarines. While

information is not due until December 2000, it is needed to accurately plan

for production plant capacity needs.

According to the Office of Defense Programs, the Stockpile Stewardship

Program is working to develop valid requirements between DOE and DOD,

and update plans to reflect requirement changes, which is an ongoing

process. In addition to the Requirements Assessment and Implementation

Team process, DOE is currently defining the pace, scope, and schedule for

the W80, W76, and B61 stockpile life extensions with DOD. Initial

agreement was reached on the W80 in a Nuclear Weapons Council meeting

held in October 2000, and the W76 and B61, respectively, will be addressed

at the November and December 2000 meetings. On the basis of its

activities, DOE has developed a draft letter describing the concerted efforts

of the team to enhance the communications of weapons requirements

between DOD and DOE. The Office of Defense Programs also stated that

DOD recently transmitted to DOE prioritized weapons requirements. DOD

has agreed upon a single list, and DOE and DOD will work together to

refine this list into one that is more accurate, consistent, and complete for

both Departments. This list will be refined and presented to the Nuclear

Weapons Council, in a future meeting, as a path forward for the Stockpile

Stewardship Program.

The Stockpile Life

Extension Program Plan Is

Incomplete

The Stockpile Life Extension Program Plan is also incomplete. This plan,

which focuses on extending the life of various nuclear weapons in the

nation’s stockpile, was not expected to be finalized until after September

2000, but now, the information has been delayed until the submission of the

budget request for fiscal year 2002 in early 2001. In the meantime, the

Office of Defense Programs produced an “interim plan;” however, this plan

is incomplete. While the interim plan thoroughly describes the planning

process, it does not meet all of the requirements stated in the National

Defense Authorization Act for Fiscal Year 2000. In particular, it does not yet
Chapter 2

Further Improvements Are Needed in the

Office of Defense Programs’ Planning Process

Page 39 GAO-01-48 Nuclear Weapons

effectively collect complete and current information necessary to

implement the program, does not address potential plant capacity issues,

and does not include budget information.

We found that information used in the interim plan regarding plant capacity

was not complete. For example, Y-12 Plant capacity estimates for

producing certain weapons components at that site are not available

because the Y-12 Plant does not have a current, validated model for

estimating plant capacity. The contractor at the Y-12 Plant agrees that such

information is needed and expects to develop a complete and validated

model in fiscal year 2003.

The interim plan also does not address how to remedy potential plant

capacity shortfalls. For example, by 2016, Pantex officials expect the

beginning of a 6-year period where workload may significantly exceed

plant capacity for performing a variety of weapons operations and tests.

Although the draft 10-Year Site Plan for Pantex describes these potential

shortfalls, the Stockpile Life Extension Program plan does not specifically

address how to deal with them. In particular, it does not establish activities

and make firm commitments to modify facilities or hire and train additional

staff to prevent impacts to the schedule. Although separate and more

detailed Implementation Plans are intended to describe “how” the work

will be accomplished, they do not address these capacity issues either.

Finally, the interim plan does not include budget information necessary for

managing the Stockpile Life Extension Program’s funds. Specifically, the

plan neither projects budget needs for the program nor allocates funds

either by weapon type or by facility. Without such basic budgeting

information, managers in the Office of Defense Programs cannot use the

plan for budget decisions. As noted above, weapons-specific

Implementation Plans intended to address how the work will be completed

also do not include this budget information. As of June 2000, according to a

key planning official in the Office of Defense Programs, although the Office

had attempted to include budget information for one weapon system, the

information was not yet valid and useable. The Office of Defense Programs

subsequently stated in November 2000 that budget information is available

for two weapons systems—the W76 and W80.
Chapter 2

Further Improvements Are Needed in the

Office of Defense Programs’ Planning Process

Page 40 GAO-01-48 Nuclear Weapons

Planning Efforts Are Not

Linked to Management

Controls

The standards we have developed require federal agencies to establish and

maintain an effective system of internal controls over their operations.1

Internal controls include such things as the plans used to meet missions,

goals, and objectives. In an August 1999 memo, the acting Assistant

Secretary for Defense Programs stated that the implementation of the

Office of Defense Programs’ management controls “is envisioned to have

annual program execution controlled through written implementation

plans linked to budgets, contracts, and other performance management

documents.” The memo set a goal of completing the implementation of

these controls by October 1, 2000. Although the Office of Defense Programs

has developed over 70 plans, it has yet to fully integrate them into the

program’s management controls as envisioned by the acting Assistant

Secretary.

Stockpile Stewardship Plans

Have Not Been Integrated With

Program Budgets

The various Stockpile Stewardship Program plans are not adequately

linked to the program’s budget, rendering them less useful to decision

makers and setting up the potential for conflicts between work

requirements contained in the plans and the budget resources available to

adequately perform the work. For example, the program’s overall Stockpile

Stewardship Plan—the “Green Book”—historically has not contained

detailed budget information. Although program officials told us that the

primary customer of the Green Book is the military, the Director of the Air

Force’s Nuclear Weapons and Counter Proliferation Agency told us that the

Green Book has had limited usefulness for him because he cannot tell how

much emphasis the Office of Defense Programs is placing on various

activities without knowing how much they are spending on the activities.

However, officials from the Office of Defense Programs believe that

although earlier drafts of the plans did not contain budget data, DOD and

others were provided with budget details in briefings and follow-on

discussions. Our review of the Stockpile Stewardship Plan for fiscal year

2001, recently approved by the Secretary of Energy on June 12, 2000, shows

that it now contains detailed budget information.

With respect to conflicts between work requirements and funding, we

found several examples during our fieldwork. For example, when the

laboratories specify new requirements for weapons test assemblies (units

with mock components used for testing purposes), the plants must perform

1

See Standards for Internal Control in the Federal Government (GAO/AIMD-00-21.31, Nov.

1999).
Chapter 2

Further Improvements Are Needed in the

Office of Defense Programs’ Planning Process

Page 41 GAO-01-48 Nuclear Weapons

many activities to fully understand the design and build a new production

line for the assemblies that will meet the new specifications—not a quick

and simple task, according to plant officials. However, the plants often

receive these and other types of testing requirements outside of the

planning and budgeting processes. Plant officials told us that when they

receive such additional requirements, they are expected to simply “do it

all.” To compensate, officials reported that they have met such additional

requirements by cutting back on facility maintenance. For example,

according to Pantex officials, the plant’s deferred maintenance backlog

increased from about $130 million in fiscal year 1998 to about $195 million

in fiscal 1999. To correct this problem, yet another Program Plan, this one

for managing infrastructure issues across the nuclear weapons complex, is

being developed, according to planning officials in the Office of Defense

Programs.

This is not a new problem. A March 1997 study by the Institute for Defense

Analyses also found a weak link between the program’s work requirements

and its budget.2 Specifically, the study found that there was no single,

disciplined process for ensuring that all decisions with resource

implications are weighed against one another in a complete and consistent

fashion. The study found no formal means to evaluate and resolve

disagreements.

Plans Are Not Linked to

Contracts

The work of the Stockpile Stewardship Program is carried out by

contractors that operate the design laboratories and production plants for

the Office of Defense Programs. To date, milestones and other performance

measurement information contained in the Program and Implementation

Plans have not been systematically incorporated into contracts used to

manage the operation of the laboratories and production plants. According

to key planning officials in the Office of Defense Programs, the Office of

Planning and Integration has only been recently asked to generate a list of

items that should be addressed in assessing the contracts presently up for

award and in developing contractor performance assessment plans for

fiscal year 2001. This would be the first time that Program and

Implementation Plans were used to assess contracts and performance

assessment plans. However, the completion of this effort will depend on

the success of the effort to reassess program requirements; therefore, the

time frame for completion remains uncertain.

2

The Organization and Management of the Nuclear Weapons Program, Institute for Defense

Analyses (IDA Paper P-3306, Mar. 1997).
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Further Improvements Are Needed in the

Office of Defense Programs’ Planning Process

Page 42 GAO-01-48 Nuclear Weapons

More fundamentally, while the Program and Implementation Plans for the

various Campaigns contain numerous milestones and deliverables, the

Office of Defense Programs has not established a method for tracking and

holding contractors accountable for the milestones and deliverables.

According to a key planning official in the Office of Defense Programs, the

Office will soon establish a team to develop a detailed process to provide

for periodic updates of Campaign milestones and deliverables and to

evaluate progress.

Plans Are Not Fully

Integrated With Other Plans

In order to be effective, the various Program Plans need to be integrated

with each other. For example, in order to conduct work in the Directed

Stockpile Work area, weapons research and development activities need to

be integrated with the efforts of the production plants. However, all of the

Directed Stockpile Work is not integrated into a single Program Plan.

Rather, the Office of Research, Development, and Simulation, which

oversees the research and development activities, has its own Program

Plan, while the Office of Military Application and Stockpile Operations,

which oversees production activities, has a separate program plan.

Because of these two separate Directed Stockpile Work Program Plans,

important cross-cutting issues can be overlooked. For example, significant

and unexpected design changes to weapons’ Life Extension Options can

create problems for the production plants that must produce components

from designs provided by the weapons laboratories. While the Directed

Stockpile Work Program Plans acknowledge the need to annually update

the Life Extension Options, they do not address how changes will be

minimized or the impacts on the plants mitigated. Planning officials in the

Office of Defense Programs agree that these two plans could be better

integrated; however, they are awaiting key decisions on program

requirements and a potential reorganization that they believe could help

remedy this situation.

More broadly, the Office of Defense Programs does not have an effective

approach for integrating all of the plans in the Stockpile Stewardship

Program. As noted earlier, the Office has over 70 Program and

Implementation Plans. Currently, if a change occurs in one plan that affects

another, such as a change in a deliverable or milestone, the coordination of

this change with the other plan must be done on an ad hoc basis. Program

officials may need to gather and search through an extensive list of plans or

contact an extensive list of individuals before they are assured that they

have reliable and current information. This can be difficult and time
Chapter 2

Further Improvements Are Needed in the

Office of Defense Programs’ Planning Process

Page 43 GAO-01-48 Nuclear Weapons

consuming, given the number of plans that exist. Planning officials in the

Office of Defense Programs agree that a single focal point document to

provide a common linkage between the plans would be a useful tool for

achieving and sustaining the program’s integration. They said they expect

to develop a large-scale database for this purpose.

Conclusions The Office of Defense Programs’ comprehensive planning process

represents an important step in improving how the Stockpile Stewardship

Program is managed. However, until the Office determines the

requirements that will drive the program, its planning process cannot be

considered complete. Moreover, a significant portion of the Stockpile

Stewardship Program will be the effort to extend the lifetime of the nation’s

nuclear stockpile. As the Congress recognized in the National Defense

Authorization Act for Fiscal Year 2000, a comprehensive Stockpile Life

Extension Program plan that includes information on capacity, workload,

and budget is vital to successfully managing the integrated activities of the

design labs and production plants and to making well-informed decisions

on issues such as recapitalizing production infrastructure in a resourceconstrained environment. Finally, in order not to become hollow

documents sitting on a shelf, the Office of Defense Programs’ plans need to

be integrated with key management controls, such as budgets and

contracts, and must be linked with each other. Program officials have told

us of many initiatives that they have under way to deal with these issues.

While we commend these efforts, we believe that the program must act on

all of these initiatives, especially the establishment of requirements, as

quickly as possible.

Recommendations for

Executive Action

To ensure that the Stockpile Stewardship Program has a planning process

that is complete and supports the management of the nuclear weapons

complex and the extension of the life of the nation’s nuclear weapons

stockpile, we recommend that the Administrator of the National Nuclear

Security Administration direct that the Deputy Administrator for Defense

Programs do the following:

• Complete, as expeditiously as possible, the process of establishing valid

program requirements and update the program’s plans to reflect

requirement changes.

• Ensure that the completed Stockpile Life Extension Program plan

contains all of the information required by the National Defense
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Further Improvements Are Needed in the

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Page 44 GAO-01-48 Nuclear Weapons

Authorization Act for Fiscal Year 2000, especially information on plant

capacity and budget.

• Ensure that the planning process is fully integrated with management

controls, and that

• the plans’ milestones are reflected in contractors’ performance

criteria and evaluations,

• the process is coordinated with the budget planning and formulation

process, and

• an overall planning mechanism is developed that links individual

plans with other plans across both the science and production

segments of the Stockpile Stewardship Program.

Agency Comments and

Our Evaluation

The National Nuclear Security Administration’s Office of Defense Programs

agreed with our recommendations that it needs to validate the Stockpile

Stewardship Program’s requirements and to integrate its planning process

with its management controls. As evidence of this, it cited a variety of what

it called “incremental steps” that it is taking or planning to take. For

example, it stated that various efforts are under way to resolve the pace,

scope, and schedule for the W80, W76, and B61 stockpile life extensions. In

addition, it noted that on October 12, 2000, the Administrator of the

National Nuclear Security Administration directed the development of a

corporate-level strategic plan, to cover the time frame for fiscal years 2003-

17. Finally, to help ensure that the program plans’ milestones are reflected

in contractors’ performance criteria and evaluations, the Office of Defense

Programs stated that it has directed field offices to negotiate contracts that

add specific self-assessments addressing planning and execution

processes. We agree that these initiatives have the potential to improve the

management of the Stockpile Stewardship Program. However, we believe

that it is too soon to determine how effectively they will be implemented

and, hence, whether they will lead to substantial improvements. We are

encouraged by the actions that the new leadership of the National Nuclear

Security Administration and the Office of Defense Programs has taken to

improve planning for the program, as delineated in the comments on a draft

of this report. (See app. III.)

With respect to our recommendation that the Office of Defense Programs

ensure that the completed Stockpile Life Extension Program plan contains

all of the information required by the National Defense Authorization Act

for Fiscal Year 2000, the Office expressed the view that stockpile life

extension is a “process” —not a “program.” It stated that the stockpile life

extension process supports the Directed Stockpile Work Program, which is
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Page 45 GAO-01-48 Nuclear Weapons

part of the Stockpile Stewardship Program’s new budget structure. The

Office stated that it would comply with the intent of the recommendation

by providing the information requested by the National Defense

Authorization Act for Fiscal Year 2000 as part of the Directed Stockpile

Work plans to be submitted with its budget request for 2002. We are

encouraged that the Office intends to make the information available to the

Congress, albeit by an alternative reporting method. However, we believe

that regardless of whether the Office calls it a “process” or “program,” the

final result must include information on capacity, workload, and budget, so

that the Office can successfully manage the integrated activities of the

design labs and production plants and make well-informed decisions in a

resource-constrained environment.
Page 46 GAO-01-48 Nuclear Weapons

Chapter 3

Revised Budget Information Needed to

Improve Management of the Stockpile

Stewardship Program Chapte3r

The Office of Defense Programs has developed a new program activity

structure within the Weapons Activities budget presentation. The Office

developed this new structure to enhance its management of the program in

several ways that better reflect its current and future missions; focus

budget justification on major program thrusts; and improve the linkage

between planning, budgeting, and performance evaluation. In addition,

program managers and outside technical experts believe that this new

structure holds significant promise for identifying the fixed and variable

costs of the Stockpile Stewardship Program, thus improving cost

management. This new structure was first used in developing the program’s

budget request for fiscal year 2001. However, two problems arose. First, the

labs and production plants did not apply the program’s new budget

formulation definitions consistently. Second, DOE’s Office of the Chief

Financial Officer was concerned that the program’s budget structure was

not consistent with various accounting standards and certain laws and

regulations that contain accounting requirements. Consequently, an

amendment to the program’s budget submission for fiscal year 2001 was

developed. However, the amendment makes it difficult to determine the

program’s fixed and variable costs.

The Office of Defense

Programs Has

Developed a New

Budget Structure for

the Weapons Activities

Account That Is

Intended to Improve

Program Management

Prior to its budget submission for fiscal year 2001, the Office of Defense

Programs divided the operating portion of the Weapons Activities account

into two broad program activities—stockpile stewardship and stockpile

management. Stockpile stewardship was defined as the set of activities

needed to “provide the physical and intellectual infrastructure required to

meet the scientific and technical requirements of the (overall) Stockpile

Stewardship Program.” Stockpile management activities included DOE’s

historical responsibilities for surveillance, maintenance, refurbishment,

and dismantlement of the enduring stockpile. However, each category was

dominated by a single large activity known as core stewardship and core

management, which made it difficult to determine where funds were being

spent with precision. For example, in the Office of Defense Programs’

budget submission for fiscal year 2000, core stewardship accounted for 48

percent of the stockpile stewardship activity’s budget request, while core

management accounted for 73 percent of the stockpile management

activity’s budget request. The lack of clarity associated with this broad

structure caused concern both at DOE and in the Congress.

In February 1999, the Deputy Assistant Secretary for Research,

Development, and Simulation, who manages the stockpile stewardship

activity, began to develop a new program activity structure to improve the
Chapter 3

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Page 47 GAO-01-48 Nuclear Weapons

planning process for his program and more closely integrate the program

with the needs of the stockpile. The new structure was built around three

new program activities—Campaigns, Directed Stockpile Work, and

Readiness in Technical Base and Facilities. (See ch. 1 for a definition of

these activities.) Within each of these three activities is a set of more

detailed subactivities. For example, within the Campaigns activity are

individual campaigns to study, among other things, the primary in a nuclear

weapon or to develop a new capability to produce nuclear weapons pits.1,2

Similarly, the Directed Stockpile Work activity includes subactivities to

conduct surveillance or produce components that need regular

replacement within nuclear weapons. Finally, the Readiness in Technical

Base and Facilities activity includes subactivities to capture the costs for

the operation of its facilities. In submitting its new program activity

structure to the Office of the Chief Financial Officer for review and

approval for use in the budget submission for fiscal year 2001, the Office of

Defense Programs believed that the new structure would, among other

things, better reflect its current and future missions; focus budget

justification on major program thrusts; and improve the linkage between

planning, budgeting, and performance evaluation.

Outside experts and Office of Defense Programs officials both believe that

developing and implementing the program’s new program activity structure

are critical to effective management. Specifically, in October 1999, the

Secretary of Energy directed the Under Secretary of Energy to conduct a

comprehensive internal review of the Stockpile Stewardship Program

(called the “30-Day Review”). As part of this review, conducted by the

Under Secretary and a group of senior technical advisors, the program’s

new activity structure was examined. The 30-Day Review strongly

supported the new program activity structure and what it called the

program’s “new business model.”

In particular, the 30-Day Review stated that the three new activity

categories would allow program managers to more clearly understand the

fixed and variable costs of the nuclear weapons complex. The study saw

1

The primary is the fission stage of a nuclear weapon. Detonation of the primary produces

the extremely high temperatures and pressures required to produce fusion in the weapon’s

secondary.

2

A pit is the initial, subcritical assembly of fissile material in a nuclear weapon. In such an

assembly, a fission chain reaction can be sustained only by the addition of neutrons from an

independent source.
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Page 48 GAO-01-48 Nuclear Weapons

the Readiness in Technical Base and Facilities activity as encompassing the

fixed costs associated with the program. These costs included those

associated with maintaining the infrastructure, facilities, capital

equipment, construction, and other functions that are necessary to have a

viable nuclear weapons complex. The 30-Day Review saw the Campaigns

and Directed Stockpile Work activities as encompassing the variable costs

of the actual work performed by the nuclear weapons complex. The

implementation of this approach would, in the view of the 30-Day Review,

provide Office of Defense Programs, lab, and production plant managers

with “an improved and coordinated tool for determining the cost

associated with managing the nuclear weapons complex.” The 30-Day

Review saw the identification of the program’s fixed and variable costs,

along with improved program planning, as essential to improving the

management of the program.

Program officials have echoed the views of the 30-Day Review. For

example, the Deputy Assistant Secretary for Research, Development, and

Simulation told us it is vital that the Office of Defense Programs gets a

handle on the fixed costs associated with Readiness in Technical Base and

Facilities. He felt that these costs were “eating the program alive” and that

the Office had to find ways to reduce them. In a similar vein, the Director of

the Office of Planning, Analysis, and Nuclear Weapons Integration, under

the Deputy Assistant Secretary for Military Application and Stockpile

Operations, told us that the Office of Defense Programs needs to be able to

identify and trend the costs that make up Readiness in Technical Base and

Facilities, such as security and safety, so that it is able to exercise effective

cost management. Finally, the Associate Deputy Assistant Secretary for

Nuclear Weapons Stockpile believes that Readiness in Technical Base and

Facilities should represent the program’s fixed costs, including overhead,

while the Campaigns and Directed Stockpile Work should capture the

marginal cost of doing a specific activity. Representing the costs for

Campaigns and Directed Stockpile Work in this way makes it clear what is

actually saved if an activity is cut. Currently, he noted, if one were to cut a

campaign, the program would not save all of the funds associated with that

campaign, since a significant portion goes to overhead.

The New Structure Was

Not Implemented

Consistently

While the Office of Defense Programs has developed a new structure that

promises to be a useful tool for improving program management, including

cost management, the implementation of the structure has been hampered

by two problems. First, the labs and production plants did not apply the

program’s new budget formulation definitions consistently. Second, the
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Page 49 GAO-01-48 Nuclear Weapons

Department’s Office of the Chief Financial Officer was concerned that the

program’s application of the new structure was not consistent with various

accounting standards and certain laws and regulations that contain

accounting requirements.

The Program’s Labs and

Plants Did Not Consistently

Implement the New

Structure

The principal problem the Office of Defense Programs experienced in

executing its new program activity structure was in the Operation of

Facilities subactivity category in the Readiness in Technical Base and

Facilities activity. The Operations of Facilities category accounts for $1.3

billion (28 percent) of the Office of Defense Program’s $4.6 billion budget

request for Weapons Activities for fiscal year 2001. This category is defined

in the budget request as the Office of Defense Programs’ share of the “cost

of all structures, equipment, systems, materials, procedures and personnel

necessary to provide program sponsors with a facility that is safe, secure,

reliable and ‘ready for operations’”—or what many program officials

believed were the fixed costs of conducting the program. However, this

definition was applied inconsistently. For example, Lawrence Livermore

National Laboratory included in Operations of Facilities only the costs for

the National Ignition Facility’s operations and facility’s ramp-up; a facility

known as Superblock, where plutonium is handled; and other unspecified

facilities.3 The other two weapons labs—Los Alamos and Sandia—were

only slightly more expansive, including the costs for capital equipment,

general plant projects, and waste management with specific facilities.

In contrast, the three major production plants—Y-12, Kansas City, and

Pantex—included not only the cost of specific facilities but also the costs

for capital equipment; general plant projects; environment safety and

health programs; security; and, most significantly, overhead. The broader

application of the definition by the production plants meant that they

included all of the costs needed to operate a facility in the Operations of

Facilities subactivity. The Office of Defense Programs recognized in its

budget submission that, for the production plants, all site overhead was

included in the Readiness in Technical Base and Facilities activity. The

Office did not specify that lab overhead was not included. But, according to

program officials, the labs did not include all site overhead costs in the

Operations of Facilities subactivity. In its budget submission, DOE

recognized that there were problems and said that it might offer some

technical amendments to its budget request.

3

The National Ignition Facility is still under construction.
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Page 50 GAO-01-48 Nuclear Weapons

The inconsistent application of the definition makes the Office of Defense

Programs’ budget submission misleading. On the one hand, because the

labs did not include all of their facility and overhead costs in the Readiness

in Technical Base and Facilities activity, the cost of simply keeping the

weapons complex open—ready for operations—is understated. The

impression is created that operating the labs and production plants is

consuming only about one-third of the Office of Defense Programs’

resources. In contrast, DOE’s functional cost reports have shown that,

typically, the Office of Defense Programs’ costs for general and mission

support—a rough equivalent for operation of facilities—consumed over 40

percent of every operating dollar from fiscal year 1995 through fiscal 2000.

Conversely, the impression is also created that more budget resources are

going directly to supporting the stockpile. However, since each of the labs

must fully recover its costs, if the costs are not in the Readiness in

Technical Base and Facilities activity, then they must be contained in the

Campaigns or Directed Stockpile Work activity.

DOE’s Chief Financial

Officer Was Concerned

About the Budget

Submission’s Consistency

With Accounting Laws and

Regulations

While the Office of Defense Programs was completing its budget

submission for fiscal year 2001, DOE’s Office of the Chief Financial Officer

began raising concerns regarding the budget treatment of Readiness in

Technical Base and Facilities. According to the Deputy Controller, in

addition to the issue of the inconsistent application of the definition

discussed above, the Office of the Chief Financial Officer had the following

concerns:

• DOE’s management and operating contractors are required to comply

with cost accounting standards and to disclose their practices in formal

disclosure statements approved by departmental contracting officers.

Pursuant to Cost Accounting Standard (CAS) No. 418, contractors are

required to accumulate indirect costs in cost pools and to allocate these

costs consistently on the basis of the causal or beneficial relationship of

the indirect costs to final cost objectives. In the Deputy Controller’s

view, if the Office of Defense Programs’ share of overhead costs is

allocated only to the Readiness in Technical Base and Facilities activity

and not to all benefiting programs and projects, this would constitute a

CAS violation and would place the contractors in noncompliance with

the CAS provisions of their contracts with the Department.

• DOE is required to comply with Statements of Federal Financial

Accounting Standards (SFFAS) promulgated by the Federal Accounting

Standards Advisory Board (FASAB). One of these Statements, SFFAS

No. 4, Managerial Cost Accounting Standards, requires federal agencies
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Page 51 GAO-01-48 Nuclear Weapons

to provide reliable and timely information on the full cost of federal

programs, their activities, and outputs. According to the Deputy

Controller, if the Office of Defense Programs’ share of overhead costs is

allocated only to the Readiness in Technical Base and Facilities activity

and not to all benefiting programs and projects, the Department would

be in noncompliance with the intent of the Managerial Cost Accounting

Standards, the federal equivalent of generally accepted accounting

principles.

• Under the Federal Financial Management Improvement Act of 1996,

agencies are required to comply with federal financial management

systems requirements contained in Office of Management and Budget

Circular A-127, Financial Management Systems, and federal accounting

standards issued by FASAB. One of the specific purposes of this act is to

require federal financial management systems to support full disclosure

of federal financial data, including the full costs of federal programs and

activities so that programs and activities can be considered on the basis

of their full costs and merits. In conducting audits of federal financial

statements, cognizant auditors are required to report whether an

agency’s financial management system substantially complies with

federal financial management system requirements and federal

accounting standards. In the Deputy Controller’s view, the failure to

comply with CAS at the contractor level and to meet the full cost

reporting requirements contained in SFFAS No. 4 would result in a lack

of substantial compliance with the Federal Financial Management

Improvement Act.

Finally, the Government Management Reform Act of 1994 amended the

requirements of the Chief Financial Officers Act of 1990 by requiring,

among other things, the annual preparation and audit of organizationwide

financial statements of 24 executive departments and agencies, including

DOE. In the Deputy Controller’s view, the failure to comply with both CAS

and the federal financial accounting standards as well as lack of substantial

compliance with the provisions of the Federal Financial Management

Improvement Act could result in the auditor’s qualification or disclaimer of

opinion on DOE’s financial statements.

These concerns were raised in January 2000—very late in the budget

development cycle. Consequently, DOE and program budget officials

decided to submit the budget as developed with a caveat that recognized

the problems with the Readiness in Technical Base and Facilities activity.
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Page 52 GAO-01-48 Nuclear Weapons

DOE Amended the

Fiscal Year 2001

Budget Submission to

Improve Consistency,

but the Revisions Miss

the Opportunity to

Improve Program

Management

Since the original budget submission, DOE and program budget officials

have developed an amendment to the program’s original budget submission

for fiscal year 2001. One of the principal effects of this amendment has

been to shift overhead costs for the production plants from the Readiness

in Technical Base and Facilities activity to the Campaigns and Directed

Stockpile Work activities. This was done to ensure that the labs and plants

treat overhead in a consistent way and to address the Deputy Controller’s

concerns. Program budget officials told us that they also made additional

adjustments to correct for errors that occurred when the budget

submission for fiscal year 2001 was originally prepared. For example, they

found that Sandia was accounting for a facility under a campaign activity

that should have been included in the Readiness in Technical Base and

Facilities activity. They felt that errors of this latter type were a normal

outcome of making such a large change in the program’s budget and

accounting system. According to DOE’s Office of the Chief Financial

Officer and program budget officials, the amendment has been transmitted

to the staffs of the House and Senate Appropriations Committees and

authorization committees. In creating the amendment to the Office of

Defense Programs’ budget request for fiscal year 2001 to address the

concerns of the Office of the Chief Financial Officer, the program has made

it difficult to determine its fixed and variable costs. Officials in the Office of

the Chief Financial Officer, including the Deputy Controller, indicated that

understanding the relationship between cost and activity levels was

necessary and that fixed and variable costing was one method of

accomplishing this. They felt that a spreadsheet that delineated fixed and

variable costs could be developed.

Conclusions The Office of Defense Programs has taken an important step toward

improved program management with its new program activity structure.

We agree with the views of the 30-Day Review and various program

officials that understanding and measuring the fixed and variable costs of

the program are vital to improving the cost performance of the program

and making well-informed decisions about program trade-offs when faced

with a constrained budget. Such information will also be important to the

Congress as it exercises its oversight role. We recognize that DOE needs to

meet a variety of financial management requirements, such as the cost

accounting standards, and the amendment the Department developed

represents an initial attempt to reflect some of these types of concerns in

its budget submission. However, more needs to be done to give program

officials and congressional decisionmakers the information on fixed and
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Page 53 GAO-01-48 Nuclear Weapons

variable costs they need. If the Department is committed to improving

program management through a new program activity structure, it needs to

find a way to more closely relate this new budget structure to its cost

accounting framework.

Recommendation for

Executive Action

To improve the management and oversight of the Stockpile Stewardship

Program, we recommend that the Administrator of the National Nuclear

Security Administration direct the Deputy Administrator for Defense

Programs to develop a method to relate its new program activity structure

to DOE’s cost accounting considerations so that fixed and variable costs of

the program’s activities can be determined and made available when the

program makes its annual budget submission.

Agency Comments and

Our Evaluation

The National Nuclear Security Administration’s Office of Defense Programs

stated that the determination of the program’s fixed and variable costs was

never an essential purpose of its new program activity structure. Rather,

the Office felt that the purpose of the new program activity structure was to

improve the program’s management by, among other things, aligning the

program’s planning, budgeting, and performance evaluation functions. By

placing emphasis in our report on understanding the program’s fixed and

variable costs, the Office believed that we were implying that it had failed

to meet a goal of its new program activity structure. While the Office

recognized the value of understanding the program’s fixed and variable

costs, it felt that it was required to amend its budget submission for fiscal

year 2001 in order “to comply with Federal accounting statutes and

regulations.” However, consistent with our recommendation, it did offer to

develop additional information on cost elements for submission with its

budget request for fiscal year 2002 with the understanding that it would not

change its method of cost accounting.

We recognize throughout our report that the program’s new activity

structure serves multiple purposes and believe it is an important step

forward in improving the program’s overall management structure.

However, we believe that understanding the program’s fixed and variable

costs is vital to effective program management, especially when the

program is faced with a constrained budget. This is consistent with the

views of the Secretary’s 30-Day Review and numerous program officials.

However, we have modified our recommendation to make it clear that we

do not expect DOE to engage in a wholesale modification of its cost
Chapter 3

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Page 54 GAO-01-48 Nuclear Weapons

accounting systems. In the end, we believe that the Office’s willingness to

develop additional cost information and include it with its budget request is

an important first step to improved program cost management.
Page 55 GAO-01-48 Nuclear Weapons

Chapter 4

Fundamental Organizational and Leadership

Changes Needed for Successful

Implementation of the Program’s New MissionChapte4r

Over the past few years, internal and external studies of DOE’s Office of

Defense Programs have pointed out numerous management problems. In

response, DOE has identified and begun implementing dozens of specific

actions intended to address the problems identified in these studies. In

particular, DOE has made repeated attempts to reorganize the Office of

Defense Programs; however, these efforts have met with only limited

success. For example, the Secretary of Energy instituted a reorganization

in April 1999 that clarified some departmental level reporting relationships

between headquarters and field offices. The Deputy Secretary made further

adjustments to departmental reporting relationships, effective October

2000. In addition, the Office of Defense Programs is currently engaged in

another realignment of its own headquarters and field structure. However,

the implementation of these changes, which should help to clarify the

organizational structure and give the Office of Defense Programs formal

control over all of the sites performing substantial amounts of its work,

have just begun. Just as importantly, a 1999 presidential report noted that

consistent leadership is a hallmark of an effective program and that

longevity is a key to leadership. However, the Office of Defense Programs

has seen its proportion of offices vacant or with acting managers increase

from 17 percent in 1996 to about 65 percent in 2000.

DOE Has Reorganized

the Office of Defense

Programs to Meet Its

Changing Mission

The Office of Defense Programs’ organizational structure and leadership

have been critiqued numerous times since the Stockpile Stewardship

Program was created in 1992. These internal and external reviews of the

program have repeatedly cited organizational problems that deter the

program’s managers from effectively implementing the Stockpile

Stewardship Program. In response to those critiques, DOE has made

changes to the program’s organizational structure, ranging from a DOEwide reorganization to changes within the Office of Defense Programs.

The Office of Defense

Programs’ Organizational

Structure Has Been

Critiqued in Numerous

Studies Since the Stockpile

Stewardship Program Began

Almost immediately after the Stockpile Stewardship Program was created

in 1992, reviews of the organization and content of the new program began.

Since 1994, six major studies have been conducted by external review

groups and internal DOE task forces. (See table 6.) In addition, both the

Congressional Budget Office and the Congressional Research Service have

written numerous reports on various aspects of the program. Some of these

studies examined the program as a whole, while others focused on specific

portions of the program, such as the selection of a new tritium production

source or the changing roles of the laboratories.
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Page 56 GAO-01-48 Nuclear Weapons

Table 6: Major Studies of DOE’s Stockpile Stewardship Program

Study title Authoring group Date

Type of

study Focus of study

Science Based Stockpile

Stewardship

JASON, The MITRE

Corporation

Nov. 1994 External;

under DOE

contract

Contribution to scientific

understanding and national goals,

maintaining and renewing technical

and scientific skills, and maintaining

confidence in the stockpile without

nuclear testing

The Organization and

Management of the Nuclear

Weapons Program

Institute for Defense

Analyses (a.k.a., 120-Day

Study)

Mar. 1997 External;

under DOE

contract

Program’s roles, responsibilities, and

organization

Report of the Commission on

Maintaining United States

Nuclear Weapons Expertise to

Congress and the Secretary of

Energy

Commission on

Maintaining United States

Nuclear Weapons

Expertise (a.k.a., Chiles

Commission)

Mar. 1999 External;

legislative

mandate

Issues surrounding the recruitment

and retention of scientific,

engineering, and technical

personnel; and weapons complex

infrastructure

Science at Its Best, Security at

Its Worst

President’s Foreign

Intelligence Advisory

Board

June 1999 External Security and counterintelligence

threats to the nuclear weapons

laboratories and effectiveness of

responses to those threats

FY 1999 Report of the Panel to

Assess the Reliability, Safety, and

Security of the United States

Nuclear Stockpile

Foster Panel Nov. 1999 External;

legislative

mandate

Critical needs for preserving existing

test data, ensuring production

capability, and improving the

stockpile certification process

U.S. Department of Energy

Stockpile Stewardship Program

30-Day Review

DOE Under Secretary and

Senior Technical Advisors

(a.k.a., 30-Day Review)

Nov. 1999 Internal;

requested by

Secretary of

Energy

Structure, balance, and ability of the

Program to maintain a safe, secure,

and reliable nuclear weapons

stockpile without nuclear testing
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Fundamental Organizational and Leadership

Changes Needed for Successful

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Mission

Page 57 GAO-01-48 Nuclear Weapons

The studies cited continuing problems with the Stockpile Stewardship

Program in the areas of overall management, organization, priority setting,

external relations, and maintenance of a viable infrastructure and

workforce. With respect to the program’s organization, for example, the

President’s Foreign Intelligence Advisory Board found that DOE had a

dysfunctional management structure with convoluted, confusing, and often

contradictory reporting channels.1 In addition, they found that diffuse

authority has led to a lack of accountability, a finding echoed by the Foster

Panel, which found “clouded lines of authority and blurred responsibility

and accountability.”2 The 120-Day Study cited ambiguities and overlaps in

the roles of headquarters and the Albuquerque Operations Office as a

primary source of inefficiencies and conflict within the program. Finally,

the Chiles Commission cited uncertainties created by unclear government

roles in the supervision of operations. 3

More broadly, the studies cited issues requiring decisive leadership action,

such as setting priorities and allocating resources among competing needs.

For example, the Chiles Commission expressed concern over the balance

of funding between the production plants and the laboratories and a lack of

consistency in priorities, leading to inefficient cycles of program stops and

starts. Finally, DOE’s own 30-Day Review reported significant gaps in the

production complex—such as pit-manufacturing capability, special

materials processing, and the capability to implement new certification and

recertification techniques—owing to a lack of investment in production

capability.4

1

Science At Its Best, Security At Its Worst, President’s Foreign Intelligence Advisory Board

(June 1999), pp.3-4.

2

FY 1999 Report of the Panel to Assess the Reliability, Safety, and Security of the United

States Nuclear Stockpile, Foster Panel (Nov. 1999), p.10.

3

Report to Congress and the Secretary of Energy, Commission on Maintaining United States

Nuclear Weapons Expertise (a.k.a., the Chiles Commission) (Nov. 1999), p.16.

4

Stockpile Stewardship Program 30-Day Review, Department of Energy (Nov. 23, 1999).
Chapter 4

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Page 58 GAO-01-48 Nuclear Weapons

In Response to Critiques,

DOE Has Made Changes to

the Program’s

Organizational Structure

DOE and the Office of Defense Programs’ management recognize that

serious problems exist and have taken some steps to address the

recommendations made in the studies. Overall, DOE has proposed a total

of 136 actions in response to recommendations in the four major studies—

the 120-Day Study, the Chiles Commission, the Foster Panel, and the 30-Day

Review—that dealt primarily with management issues.5 Overall, about 48

percent of the actions identified have been completed, meaning that a onetime action is finished or that a continuing action (such as instituting a

revised planning process) is now part of routine operations.6 In addition to

those specific actions, DOE has made changes to the organizational

structure of the Office of Defense Programs.

Until the advent of the Stockpile Stewardship Program in 1992, the Office

of Military Application and Stockpile Management within the Office of

Defense Programs oversaw all of the nuclear weapons programs. Those

activities were coordinated at the field level by the Albuquerque Operations

Office. With the establishment of the Stockpile Stewardship Program, the

oversight of the stockpile management and maintenance portion of the

work continued to be overseen by the Office of Military Application and

Stockpile Operations at DOE’s headquarters. However, the science portion

of the work, done primarily at the nuclear weapons laboratories, was

allocated to two other programmatic offices at headquarters—the Office of

Strategic Computing and Simulation and the Office of Research and

Development. In August 1999, management in the Office of Defense

Programs consolidated the two programmatic offices that oversaw the

science portion of the Stockpile Stewardship Program to create the Office

of Research, Development, and Simulation. Thus, the Office of Defense

Programs is currently organized in two programmatic offices—Research,

Development, and Simulation (DP-10) and Military Application and

Stockpile Operations (DP-20). (Table 7 shows how the Office of Defense

Programs has divided responsibility for its programs among the

5

We did not analyze DOE’s responses to the November 1994 JASON study because its

recommendations dealt primarily with technical research issues. We also did not analyze

DOE’s responses to the June 1999 report by the President’s Foreign Intelligence Advisory

Board because its recommendations dealt primarily with security and counterintelligence

issues.

6

About 9 percent of the proposed actions have been deferred owing to the unavailability of

funding or have been dropped because the Office of Defense Programs did not concur that

the cited changes need to be made. The remaining 43 percent of proposed actions had not

been completed as of July 2000.
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Mission

Page 59 GAO-01-48 Nuclear Weapons

headquarters and field offices.) Finally, in response to the October 1999

passage of legislation establishing the semiautonomous National Nuclear

Security Administration, the Secretary issued an implementation plan for

the new agency in January 2000.

Table 7: Major Responsibilities of Office of Defense Programs’ Headquarters and Field Offices Reporting to the Office of

Defense Programs

Source: GAO’s analysis of DOE’s data.

Office Location Responsibilities

Research, Development, and Simulation (DP10)Headquarters • Programmatic oversight of the weapons labs and Nevada Test

Site

• Lead on eight campaigns

• Joint lead with DP-20 on three campaigns

• Oversight of experimental programs

• Oversight of advanced simulation development

• Maintenance and development of infrastructure at weapons labs

and Nevada Test Site

Military Application and Stockpile Operations

(DP-20)

Headquarters • Programmatic oversight of the weapons production complex

• Lead on seven readiness campaigns

• Joint lead with DP-10 on three campaigns

• Oversight of the production complex

• Oversight of the directed stockpile work at production facilities

located at weapons labs

• Maintenance and development of infrastructure at production

plants and production facilities at weapons labs

Albuquerque Operations Office Field • Execution of directed stockpile work at production plant sites

• Contract oversight for Los Alamos and Sandia

• Contract oversight for Pantex Plant and Kansas City Plant

Nevada Operations Office Field • Execution of test readiness and subcritical experiment program

at Nevada Test Site

• Contract oversight of Nevada Test Site
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Page 60 GAO-01-48 Nuclear Weapons

Since DOE was established in 1977, virtually every Secretary has made

management reforms and reorganizations at the departmental level. In

April 1999, the Secretary of Energy reorganized the Department’s

programmatic and field offices . This reorganization changed the reporting

relationships between the field offices and headquarters program offices.

Previously, the field offices had reported to the Secretary through the

Office of Field Management.7 As a result of the changes ordered by the

Secretary, the Albuquerque and Nevada Operations Offices have begun

reporting directly to the Office of Defense Programs. Most recently, the

Deputy Secretary announced yet another restructuring, effective October 1,

2000.

Under the April 1999 reorganization, the Office of Defense Programs’

responsibilities for the various sites in the weapons complex varied,

depending on whether the sites reported directly to the Office of Defense

Programs or to another program office within DOE. For two field offices—

the Albuquerque and Nevada Operations Offices—the Office of Defense

Programs served as the Lead Program Secretarial Office. A Lead Program

Secretarial Office is responsible for institutional health and long-term

planning, landlord activities,8 and overall site integration and operations.

Lead Program Secretarial Offices also have line accountability for

environment, safety, and health; for safeguards and security; and for the

implementation of departmental policy. However, as noted in chapter 1,

substantial stockpile stewardship work is performed at three other sites—

the Y-12 Plant in Oak Ridge (Tenn.), Savannah River Tritium Operations

(S.C.), and Lawrence Livermore (Calif.)—that did not report to the Office

of Defense Programs under this reorganization. For those sites, the Office

of Defense Programs served as Cognizant Secretarial Office and was

considered a “customer” of the field office where its work was being

performed.

Finally, in October 1999, the Congress passed legislation establishing the

National Nuclear Security Administration as a semiautonomous agency

within DOE with responsibility for the nation’s nuclear weapons,

nonproliferation, and naval reactors programs. As of March 1, 2000,

7

Under the April 1999 Department-wide reorganization, the Office of Field Management was

renamed the Office of Field Integration, and a Field Management Council was established to

serve as a coordination point and conflict resolution vehicle for inter-program relations.

8

“Landlord activities” refers to providing the physical and corporate infrastructure for site

operations, including facilities maintenance and repair, roads, and utilities.
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headquarters and field personnel of the Office of Defense Programs

became employees of the new agency. (See fig. 5.) In the summer of 2000,

the Administrator and Deputy Administrator for Defense Programs were

selected and confirmed, providing a new leadership team for the National

Nuclear Security Administration.
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Figure 5: Organization of the National Nuclear Security Administration and the Office of Defense Programs, as of October 1,

2000

Source: Compiled by GAO from DOE’s and the National Nuclear Security Administration’s data.

Secretary of 

Energy

Albuquerque Operations Office

Nevada Operations Office

Oakland Operations Office

Under Secretary 

and Administrator

for the National 

Nuclear Security 

Administration

Deputy Administrator 

for

Defense Programs

Assistant Deputy 

Administrator,

Research, Development, 

and Simulation

Assistant Deputy 

Administrator,

Program Support

Savannah River National 

Nuclear Security 

Administration Area Office

Oak Ridge National 

Nuclear Security 

Administration Area Office

Deputy Administrator

for Defense 

Nuclear Nonproliferation

Deputy Administrator 

for 

Naval Reactors

Assistant Deputy 

Administrator,

Military Application and 

Stockpile Operations
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DOE’s Attempts to

Reorganize Have Not

Addressed All of the

Organizational and

Leadership Issues

Organizational structure problems, including confusing and overlapping

roles and responsibilities and a lack of clear accountability, continue to

plague the Office of Defense Programs. In addition, instability in the

Stockpile Stewardship Program’s leadership has led to a lack of consistent

management direction. Standards we have developed require federal

agencies to establish and maintain an effective system of internal controls

over their operations.9 Such a system is the first line of defense in

safeguarding assets and preventing and detecting errors. Under our

standards, managers should, among other things, ensure that their staff

have the required skills to meet organizational objectives, that the

organizational structure clearly defines key areas of authority and

responsibility, that progress be effectively measured, and that operations

be effectively monitored.

Problems Remain in the

Organizational Structure at

Three Levels

In spite of repeated attempts to improve the organizational structure of the

Office of Defense Programs, problems remain at three levels—within the

Stockpile Stewardship Program’s headquarters, between headquarters and

the field offices, and between contractor-operated sites and their federal

overseers. These problems result in overlapping roles and responsibilities

for the federal workforce overseeing the Stockpile Stewardship Program

and confusion and duplication of effort for the contractors implementing

the program at sites in the nuclear weapons complex.

The Structure of the Office of

Defense Programs Remains

Fragmented at the Headquarters

Level

In 1998, a Program Integration Task Force consisting of representatives

from throughout the downsized weapons complex identified fragmentation

in the Office of Defense Programs headquarters as “a structural obstacle”

to the coherent planning, prioritization, and execution of the Stockpile

Stewardship Program. They identified instances in which the research and

development, simulation, and production portions of the program—

managed by three separate headquarters’ offices—were not synchronized

to support planned stockpile refurbishments. As part of the August 1999

reorganization of the Office of Defense Programs, the two science offices—

the Office of Strategic Computing and Simulation and the Office of

Research and Development—were consolidated to create the Office of

Research, Development, and Simulation, and definitions of the

headquarters offices’ roles and responsibilities were issued. However, the

9

Standards for Internal Control in the Federal Government (GAO/AIMD-00-21.3.1, Nov.

1999).
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definition of “missions” and “functions” for the new Office of Research,

Development, and Simulation did not specifically mention integration with

the production program, even though the coordination of effort and

allocation of resources between the two are critical to the Stockpile

Stewardship Program’s success.

While this action reduced fragmentation in the science offices, it left the

split between the science program and the production program in place.

This bifurcated structure has resulted in widespread dissatisfaction with

the way the program is being managed. Officials at DOE’s headquarters,

field offices, labs, and production plants repeatedly cited to us numerous

ways that the split between the science and production portions of the

Stockpile Stewardship Program at the headquarters level negatively affects

coordination throughout the complex. For example, the Office of Research,

Development, and Simulation and the Office of Military Application and

Stockpile Operations share responsibility for several campaigns, including

the Advanced Design and Production Technologies campaign. Officials at

both the labs and production plants told us that each headquarters

organization has provided different amounts of funding and imposed

different reporting requirements on the contractors doing the work under

this campaign. This has resulted in difficulties in getting the work done, as

well as duplication of effort, as the contractors attempt to satisfy the

requirements of the two groups.

Organizational Issues Between

Headquarters and the Field

Remain Unresolved

One of the key problems noted in 1997 in the 120-Day Study was the

existence of “two headquarters”—one in the Office of Defense Programs’

headquarters and one in the Albuquerque Operations Office. The study

noted that, with the end of the design and production of new weapons,

there had been a natural tendency for “mission creep,” whereby

Albuquerque attempted to assume policy and planning responsibilities

typically performed by a headquarters function and the Office of Defense

Programs’ headquarters staff became more heavily involved in the

Stockpile Stewardship Program’s execution—an Albuquerque

responsibility.

Three years later, this situation still persists. For example, officials in the

Albuquerque Operations Office believe that headquarters is still trying to

give specific program direction to the contractors, a function that is

properly the responsibility of the contracting officer located in the

Albuquerque Operations Office. For example, they noted that headquarters

staff gave direction to the Kansas City Plant about how many specific

weapons components to produce. They noted that specific production
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direction has always been contained in documents produced by the

Albuquerque Operations Office. Conversely, officials at the Nevada

Operations Office have similar concerns, and the Operating Office Manager

noted that many headquarters and field staff are not “staying in their boxes”

organizationally. Finally, the Principal Deputy for Operations told us that

there have been problems, since headquarters and field staff are “not

playing well together” because roles and responsibilities are not clearly

defined.

Underlying this problem is the fact that the document—a memorandum—

that defines the roles and responsibilities of the Office of Defense

Programs and the Albuquerque Operations Office was last issued in May

1968, clearly predating the creation of the Stockpile Stewardship Program.

In this memo, the then Division of Military Application in headquarters was

responsible for the “overall management of the weapons development and

production program,” while the Albuquerque Operations Office managed

the production complex, including “determining production

responsibilities and schedules.”

DOE officials told us that there have been several attempts during the last

several years to resolve and clarify the organizational relationships

between the Office of Defense Programs’ headquarters and its field

structure; however, none of them have been successful. Elaborating on

comments made in the 120-Day Study, officials told us that this problem has

been allowed to exist because the former Assistant Secretary for Defense

Programs was simply not interested in management and organizational

issues. Officials at levels as high as the Field Office Manager level told us

that the former Assistant Secretary relied on an informal network of

trusted associates to run the nuclear weapons program and placed little

stock in formal organizational structure.

Most recently, the Principal Deputy for Operations has begun yet another

effort to resolve the organizational problems within the Office of Defense

Programs. While waiting for the National Nuclear Security Administration’s

new Administrator and Deputy Administrator to be selected and

confirmed, he implemented several small efforts, such as hiring new

technical staff. He expects a renewed effort now that a new Administrator

and Deputy Administrator for the National Nuclear Security Administration

have been installed. Although the scope of the realignment effort is still

being defined, he believes that a fundamental principle that needs to

underpin this effort is that the Office of Defense Programs needs to clearly

assign responsibility for each of its various programs. He also felt that it
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was important to move federal program oversight as close to the

contractors as possible and that the Office needed to move to a climate

where everyone considered themselves part of the Office of Defense

Programs—not headquarters staff or field staff. Officials in the

Albuquerque and Nevada Operations Offices told us that they support the

Principal Deputy’s efforts and agree with the principles embodied in the

realignment effort.

Both the 120-Day Study and the Chiles Commission report contain

important principles that can guide any eventual reorganization. In

particular, the 120-Day Study also advocated moving the people doing the

program work of the Office of Defense Programs as close to the field as

possible. The study supported a smaller headquarters staff focused on toplevel management tasks, such as strategic management and dealing with

the Stockpile Stewardship Program’s external customers—the Department

of Defense and the Congress. The Chiles Commission endorsed the

recommendations of the 120-Day Study, noting that the Office of Defense

Programs needed to be structured to eliminate overlapping responsibilities

between headquarters and the Albuquerque Operations Office. Like the

120-Day Study, the Chiles Commission felt that headquarters staff should

focus on top management tasks, while the field staff should be responsible

for operational tasks, such as contract management, facility operations,

and oversight.

Organizational Issues Between

the Office of Defense Programs,

DOE’s Field Offices, and DOE

Contractors Also Remain

Unresolved

A key finding of the Chiles Commission was that direct reporting chains

should be established for operations offices administering nuclear

weapons contracts. The study stated that such a structure would provide

the Assistant Secretary for Defense Programs with oversight authority for

all facilities supporting the nuclear weapons program, as well as for the

execution of the program.10 The President’s Foreign Intelligence Advisory

Board found that “(c)onvoluted, confusing, and often contradictory

reporting channels make the relationship between DOE headquarters and

the labs, in particular, tense, internecine, and chaotic.”

10This position is now the Deputy Administrator for Defense Programs in the National

Nuclear Security Administration.
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In April 1999, the Secretary of Energy reorganized DOE to bring all of

DOE’s field offices, like the Albuquerque Operations Office, under a

specific headquarters program office. However, under that departmental

structure, not all of the field sites that performed work for the nuclear

weapons complex reported directly to the Office of Defense Programs.

Specifically, while the Albuquerque and Nevada Operations Offices (and

their contractors) reported directly to the Office of Defense Programs,

contractors operating the Savannah River Tritium Operations, the Y-12

Plant at Oak Ridge, and the Lawrence Livermore National Laboratory were

overseen by operations offices that reported to either the Office of

Environmental Management or the Office of Science.11 While the Deputy

Secretary of Energy directed in August 1999 that memorandums of

agreement be implemented promptly to further define relationships

between multiple program offices sharing a single site, the Office of

Defense Programs had finalized only two of the three agreements needed

as of August 2000.

11The Albuquerque Operations Office oversees the Office of Defense Programs’ contractors

at the Kansas City Plant, the Pantex Plant, the Los Alamos National Laboratory, and the

Sandia National Laboratories.
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Specifically, for the Oakland Operations Office, the memorandum of

agreement between the Office of Defense Programs, the Office of Science,

and the Oakland Operations Office defined how the two headquarters

program offices would interact with the operations office to oversee

operations at the Lawrence Livermore National Laboratory. Both the Office

of Defense Programs and the Office of Science fund the Oakland

Operations Office. The Office of Defense Programs was assigned landlord

responsibilities for Lawrence Livermore, including safety and security

functions, although the landlord function is usually filled by the Lead

Program Secretarial Office (at that time, the Office of Science).

Furthermore, as “cognizant secretarial office,” the Office of Defense

Programs was accountable only for the infrastructure and construction

that support Defense Programs work. However, the Office of Science

Programs was responsible for overseeing the programs, facilities,

construction, and operations at the lab that served its programs. Finally, the

Oakland Operations Office, which reports to the Office of Science,

managed the contract with the University of California for operating the

Lawrence Livermore National Laboratory. While the overall budget for the

Office of Defense Programs has decreased about 31 percent over the last

decade, the budget for Defense Programs’ work at Lawrence Livermore has

risen by about 75 percent to about $746 million for fiscal year 2000 (more

than half of the total budget for the lab).12 Yet, performance expectations

for Lawrence Livermore were set by the Oakland Operations Office—not

by the Office of Defense Programs. Thus, the April 1999 reorganization

perpetuated a structure that made the integration and coordination of the

Stockpile Stewardship Program very difficult and diffused accountability

for the overall performance and management of a key Office of Defense

Programs site.

As we noted in our recent report on the National Ignition Facility, one of

the causes of the significant cost and schedule overruns that this key

Stockpile Stewardship Program facility experienced was the unclear chain

of command between DOE’s headquarters and the Oakland Operations

Office.13 While the Office of Defense Programs funded the National Ignition

Facility and assigned a project director at headquarters, the day-to-day

supervision of the facility was assigned to a project manager in the Oakland

12This analysis is based on April 2000 budget data provided by the Office of Defense

Programs’ Office of Program Analysis and Financial Management.

13See National Ignition Facility: Management and Oversight Failures Caused Major Cost

Overruns and Schedule Delays (GAO/RCED-00-141, Aug. 8, 2000).
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Operations Office who reported to the Office of Science—not to the project

director in the Office of Defense Programs. Although a 1997 memorandum

of understanding on the National Ignition Facility defined the field project

manager’s responsibilities, it left unchanged the misdirected reporting to

the Office of Science rather than to the Office of Defense Programs, which

was responsible for the project. Laboratory officials told us they

considered DOE’s chain of command confusing and really did not know to

whom they reported on a day-to-day basis. Since our report was finalized,

however, the Office of Defense Programs has begun making improvements

designed to strengthen the management and oversight of the National

Ignition Facility. For example, the Department has created a new

headquarters National Ignition Facility Project Office whose manager is

dedicated to the project. These actions are encouraging, but since

implementation has only just begun in many areas, an assessment of their

ultimate value is premature.

In October 1999, the Congress passed legislation that established the

National Nuclear Security Administration.14 One reason for the agency’s

creation was to correct the confused lines of authority and responsibility

within DOE’s nuclear weapons program. However, the plan that DOE

prepared to implement the agency laid out an organizational structure that

was virtually the same as it was before the new agency was established.

The January 2000 implementation plan simply moved the Office of Defense

Programs and the field offices that are associated with it to the National

Nuclear Security Administration. As a result, the Los Alamos National

Laboratory and the Sandia National Laboratories reported through the

Albuquerque Operations Office to the Deputy Administrator for Defense

Programs, but activities at the Savannah River Tritium Operations, Oak

Ridge Y-12 Plant, and Lawrence Livermore National Laboratory continued

to report through operations offices that were not part of the agency’s field

structure.

Effective October 2000, the Deputy Secretary of Energy took further action

to reorganize reporting relationships between DOE’s headquarters and

operations offices. This action complies with congressional direction to

eliminate “dual-hatting,” that is, staff serving in both DOE and National

Nuclear Security Administration positions simultaneously. Under this

reorganization, the Oakland Operations Office, which oversees the

Lawrence Livermore National Laboratory, will report to the National

14National Nuclear Security Administration Act (P.L. 106-65, Title XXXII, Oct. 5, 1999).
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Nuclear Security Administration. In addition, a new Area Office reporting

to the Office of the Deputy Administrator for Defense Programs will be

established in Oak Ridge to oversee the Y-12 Plant. Similarly, a new Area

Office in Savannah River will oversee Tritium Operations and other

National Nuclear Security Administration operations at that site and report

to the National Nuclear Security Administration. However, DOE and

National Nuclear Security Administration officials recognize that full

implementation of these changes will take some time. For example, it has

not yet been decided whether the Savannah River Area Office will report

directly to the National Nuclear Security Administration Administrator or

another senior National Nuclear Security Administration official. In

addition, memorandums of agreement covering coordination between the

National Nuclear Security Administration and other DOE program offices

that share the Oakland, Savannah River, and Oak Ridge sites will need to be

negotiated. Finally, relationships between the new Area Offices at Oak

Ridge and Savannah River and the existing Operations Offices at those sites

must be defined and agreements implemented.

Leadership Issues Also

Remain Unresolved

The President’s Foreign Intelligence Advisory Board identified factors that

they believe lead to management and programmatic success. The first of

these factors is strong leadership to set standards and expectations

regarding performance and accountability. For effective leadership, they

found that longevity is a key ingredient. DOE’s 30-Day Review also found

that the program must take a long view that extends decades into the future

to be effective, which we believe reinforces the need for a long-term focus

and consistent leadership. However, analysis of the senior management

positions in the Office of Defense Programs indicates a pattern of

instability.15 The proportion of offices vacant or with acting managers has

increased from 17 percent in 1996 to almost 65 percent in 2000. As of

January 2000, the Office of Defense Programs had 57 offices, including

those headed by directors. Thirty-nine of those offices were headed by

officials in an acting capacity, while 6 officials headed multiple offices. Out

of 28 offices in the Office of Defense Programs headed by a senior manager,

18 were staffed on an acting basis.

15We defined senior management positions as those ranging from the Assistant Secretary for

Defense Programs through the directors of the program offices, such as DP-13—the Office

of Research, Development, and Testing Facilities.
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The lack of consistent management direction was cited by managers at

many of the field sites in the nuclear weapons complex, as well as by

headquarters officials. As the President’s Foreign Intelligence Advisory

Board noted, lack of consistent leadership leads to initiatives that, once

started, are often changed or dropped when leadership changes. For

example, the Secretary proposed establishing the Stockpile Management

Integration Council in his June 1997 report to the Congress on actions

taken to respond to the 120-Day Study. The Council was to serve as a

conflict resolution vehicle for coordination between the various

components of the Office of Defense Programs at the field and

headquarters levels. According to DOE officials, that council was never

fully implemented because one Deputy Assistant Secretary for Military

Application and Stockpile Operations retired and the new Deputy Assistant

Secretary, seeking a different forum, developed a quarterly program review.

This program review, in which the field sites participate, could accomplish

the same objectives as the Council. However, some officials told us that

these quarterly reviews focus on short-term problems and do not

effectively address the longer term needs that are most pressing for their

sites.

In a similar vein, the Office of Defense Programs has been aware of longstanding problems caused by the failure to maintain facilities and has been

studying infrastructure issues for at least 5 years. However, some sites

reported that adequate funding for basic maintenance needs has not been

provided for as much as a decade. As a result, the complex now has

significant vulnerabilities in its ability to produce the components and

materials needed to maintain the weapons in the enduring stockpile. In

response, the Office of Defense Programs sought limited supplemental

funding for emergency maintenance needs for fiscal year 2000 and—once

again—began a new planning effort in May 2000.
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Finally, as noted earlier, the Office of Defense Programs has been

implementing dozens of specific actions intended to address an array of

organizational issues, including responses to recommendations to improve

the program’s management and leadership in such areas as organization,

planning and integration, infrastructure and workforce management, and

external relations. We assessed what impact these actions, when fully

implemented, were likely to have on the Stockpile Stewardship Program’s

effectiveness. Overall, we believe that about 47 percent of the proposed

actions should improve the program’s effectiveness. However, fully 45

percent of the actions proposed do not completely address the problem.16

In some cases, key management decisions on organization and leadership

issues, such as setting priorities for the program, have been deferred for

years.

The root cause of the instability in the Office of Defense Programs’

leadership is not clear. As noted earlier, the previous Assistant Secretary

was generally believed not to have had significant interest in management

issues. In addition, the Principal Deputy for Operations believes that the

turnover among the Stockpile Stewardship Program’s managers was due to

the program’s organizational problems, which created significant

frustration among managers as they jockeyed for turf and left them

uncertain about what actions they were authorized to take.

Conclusions The Stockpile Stewardship Program cannot be effective without an

effective organizational structure to carry it out. Numerous analyses, as

well as our work, have shown how problems with the organization of the

relationships between the Office of Defense Programs, its field offices, and

its contractors have led to inefficiencies and conflict within the Stockpile

Stewardship Program. However, these analyses have provided the

principles that should guide the reorganization of the program, which

include clearly defining the roles and responsibilities of headquarters and

field officials, moving program management officials as close to the action

as possible, and bringing all of the field structure and contractors that carry

out the program under one organization. The National Nuclear Security

Administration’s implementation gives DOE a chance to fundamentally

restructure the convoluted organization of the Office of Defense Programs,

16Some actions (about 9 percent) were either deferred or limited because of resource

constraints, such as the extent of laboratory security upgrades that can be funded. We did

not include those actions in this category.
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rationalize oversight and reporting relationships, and institute new

processes where needed. However, the current realignment of the

headquarters and field structure will not succeed without the full support

of the new leadership of the National Nuclear Security Administration.

Likewise, we believe that the resolution of these issues is necessary for the

Stockpile Stewardship Program to be successful.

While all organizations have some turnover in management positions, we

believe that the high level of turnover indicated by the predominance of

acting managers in the Office of Defense Programs is not healthy and may

be contributing to the substantial number of useful management

improvements that have been identified but not fully implemented. The

implementation of the new National Nuclear Security Administration

provides opportunity, as well, for the Office of Defense Programs to

identify the reasons for management turnover and address them.

Recommendations for

Executive Action

To improve the Stockpile Stewardship Program’s management, we

recommend that the Administrator of the National Nuclear Security

Administration direct the Deputy Administrator for Defense Programs to

take the following steps:

• Reorganize the program so that roles and responsibilities between

headquarters program offices and between headquarters and field staff

are clearly defined and so that program management officials are

located as close as possible to the programs they manage.

• Ensure that the October 2000 field structure’s reorganization is

implemented in a way that ensures clear lines of authority between the

Office of Defense Programs and its contractors and that clearly defines

and establishes effective relationships between the National Nuclear

Security Administration and the DOE program offices that share some

of its sites.

• Identify the reasons for the high level of management turnover in the

program and take prompt and decisive action to provide greater

management consistency and stability for the program.

Agency Comments and

Our Evaluation

The National Nuclear Security Administration’s Office of Defense Programs

agreed that there is a need to resolve organizational ambiguities and to

improve the understanding of roles, responsibilities, and accountabilities

between headquarters and field elements. The Office also highlighted the
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actions it has taken or is planning to take that will address our

recommendations. These actions include implementing the October 2000

DOE reorganization; appointing a new Acting Chief Operating Officer,

whose function is to provide operational oversight, guidance, and

coordination for the nuclear weapons complex; and making permanent

personnel assignments as quickly as possible to improve organizational

stability. We agree that these actions have the potential to improve

management of the Stockpile Stewardship Program. While we have made

changes to the report to recognize these initiatives, we believe that it is too

soon to determine how effectively they will be implemented and, hence,

whether they will lead to substantial improvements. However, we are

encouraged by the actions the new leadership of the National Nuclear

Security Administration and the Office of Defense Programs have taken to

improve the organization and leadership of the Office of Defense Programs,

as delineated in their comments on a draft of this report. (See app. III.)

With regard to the issue of the high level of management turnover identified

in this report, the National Nuclear Security Administration’s Office of

Defense Programs agreed that greater organizational stability is desirable

but did not consider the level of turnover abnormally high, given the

technical nature of the work and the opportunities available to highly

educated and skilled personnel. The Office pointed out that the former

Assistant Secretary for Defense Programs served for over 6 years and that

his Principal Deputy, who served as Acting Assistant Secretary until the

Deputy Administrator took office, has been with the Stockpile Stewardship

Program since 1996. However, we believe that the increasing level of

turnover and the widespread dissatisfaction with the lack of consistent

management direction among federal and contractor officials we

interviewed are indicative of serious problems. While we are pleased with

the new Deputy Administrator’s efforts to make permanent personnel

appointments, we continue to believe that the Office of Defense Programs

should make additional efforts to identify the underlying causes of the

management turnover and take appropriate steps to correct those

underlying problems.
Page 75 GAO-01-48 Nuclear Weapons

Chapter 5

Management Improvements Needed for the

Office of Defense Programs to Conduct

Successful Stockpile Life Extensions Chapte5r

The Office of Defense Programs is about to embark on a series of life

extensions for the weapons in the nation’s nuclear stockpile. To date, only

one stockpile life extension has been attempted—the extension of the W87

nuclear warhead. This life extension experienced significant design and

production problems that raised its costs by over $300 million and caused

schedule delays of about 2 years. Numerous factors contributed to this

outcome. The original design to enhance the structural integrity and extend

the stockpile life of the W87 did not work as planned. In addition, all of the

major production facilities in the nuclear weapons complex experienced

significant problems as they attempted to restart an atrophied complex. At

the heart of many of the problems was an inadequate Office of Defense

Programs management process and unclear leadership, which prevented

the Office from adequately anticipating and mitigating the problems that

arose. Virtually all of the participants in the W87 life extension recognize

that there are important lessons to be learned from their experiences, and

some management improvements have been started. However, more action

is needed before the Office of Defense Programs begins extending the life

of two additional warheads—the W76 and W80—that form a significant

portion of the stockpile.

The Office of Defense

Programs Has Begun a

Major Program to

Extend the Life of

Nuclear Weapons in

the Stockpile

The current U.S. nuclear weapons strategy is to maintain the existing

stockpile of weapons indefinitely without underground nuclear testing.

However, nuclear warheads, even while in storage, can change over time.

For example, radioactive materials may cause decay in metals and

corrosion in joints. In addition, plastics and other organic materials change

with age and exposure to heat and radiation. Consequently, all warheads in

the stockpile are expected to require periodic refurbishment and

remanufacturing in order to extend their life. While the Office of Defense

Programs is about to embark on a series of life extensions for the weapons

in the nation’s nuclear stockpile, to date, only one stockpile life extension

has been attempted—the extension of the W87 nuclear warhead.

Lawrence Livermore National Laboratory (Livermore) designed the W87

nuclear warhead during the1980s. Currently deployed by the Air Force on

the Peacekeeper missile, the W87 was produced from 1986 through 1989

and first deployed in December 1986. During the early 1990s, DOE

recognized the need to enhance the structural integrity and extend the

stockpile life of the W87. Since accomplishing this required disassembly

and refurbishment, DOE, in agreement with the Department of Defense,

decided to conduct a life extension program (LEP) to evaluate the
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expected lifetime of the components in the W87 and replace the parts

needed to extend the life of the W87 for an additional 30 years.

As summarized in table 8, carrying out the W87 LEP has involved the effort

of virtually all of the labs and production facilities within the nuclear

weapons complex.

Table 8: Nuclear Weapons Complex Facilities That Participated in the W87 LEP

Source: GAO’s analysis of DOE’s data.

The Office of Defense Programs is about to begin several additional

stockpile life extension programs for warheads that represent a significant

portion of the nation’s nuclear arsenal. Specifically, the Office of Defense

Programs is in the process of studying how to extend the life of the W76

nuclear warhead—which is carried by the Navy on Trident nuclear

submarines—and the W80 nuclear warhead—which is used by both the Air

Force and Navy on cruise missiles. The first production unit dates for these

weapons are scheduled for later this decade. According to officials in the

Office of Defense Programs, the costs for these life extensions promise to

be significantly higher than those associated with the W87 LEP.

Participant Role

Lawrence Livermore National

Laboratory (Livermore)

Develop and certify design changes to the nuclear

portion of the W87.

Los Alamos National Laboratory

(Los Alamos)

Peer review the design changes that Livermore

proposed. Fabricate detonator parts.

Sandia National Laboratory

(Sandia)

Develop and certify changes to the nonnuclear portion

of the W87.

Kansas City Plant Refurbish and fabricate new detonator/arming and

safing devices and other nonnuclear parts.

Y-12 Plant Disassemble and rebuild components of the nuclear

portion of the W87.

Pantex Plant Disassemble the W87, ship parts to Kansas City and Y12 for refurbishment or replacement, and reassemble

the W87 using new or refurbished parts.
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The Only Life

Extension Conducted

to Date Experienced

Significant Design and

Production Problems

Due to Management

Weaknesses

The W87 LEP experienced both design and production problems as the

result of an inadequate management structure and unclear leadership.

Consequently, the W87 LEP experienced both schedule delays and cost

overruns. With respect to schedule slippage, the W87 LEP was officially

begun in September 1994. The first production unit of the refurbished W87

was originally scheduled for the first quarter of fiscal year 1997; however,

as a result of the problems discussed below, this date slipped to February

1999. The first production unit was achieved in February 1999. The W87

LEP is currently scheduled for completion in fiscal year 2004. Regarding

costs, the estimated cost of the W87 LEP has risen from an original

estimate of about $440 million to a current estimate of about $747 million—

an increase of almost 70 percent. (Table 9 contains details on the W87 LEP

cost estimate.)

Table 9: W87 LEP Cost Estimate Comparison

Source: GAO’s analysis of DOE’s data.

Design Issues Added to

Program Costs

Livermore developed an initial design to enhance the W87’s structural

integrity and extend its stockpile life and subjected the design to a series of

ground and flight tests. After a September 1996 flight test, Livermore

decided that a major redesign was required. While the redesign effort did

not ultimately affect the slippage of the first production unit date from 1997

to 1999, officials at Livermore and the Office of Defense Programs told us

that the redesign effort placed considerable pressure on the labs and

production plants and contributed to the increase in costs, particularly

with respect to design. According to a program official in the Office of

Defense Programs’ Office of Stockpile Systems, Livermore’s effort to

redesign the W87 approximately doubled the design cost of the W87 LEP.

Livermore’s initial design was subjected to a peer review by Los Alamos.

During a peer review, one nuclear design laboratory reviews the work of

Dollars in millions

Cost element

Current cost

estimate

Original cost

estimate Percent increase

Design $92 $46 101.7

Production 655 394 66.0

Total $747 $440 69.7
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the other design laboratory in order to provide an independent technical

assessment of the adequacy of the originating laboratory’s work. Peer

review has become increasingly important, since underground nuclear

tests are no longer available to verify design issues. Peer reviews are

required for the development of a new nuclear weapon and were used

during the W87 LEP as well.

Production Problems Were

Experienced Throughout

the Complex

The need to develop a revised design had a major effect on the production

complex and the cost of production. To meet Livermore’s redesign

requirements, the plants had to develop new materials and new production

techniques, which added time to the production process. The Office of

Defense Programs’ cost data are not of sufficient quality to precisely

determine to what extent the redesign increased production plant costs;

however, program officials acknowledge that it had a major effect. Just as

importantly, all of the major production facilities in the nuclear weapons

complex—Kansas City Plant, Y-12, and Pantex—have experienced

significant production problems during the W87 LEP. These problems,

which resulted from such factors as restarting an atrophied production

complex and addressing safety and technician training issues, led directly

to slippage in the W87 schedule and contributed to the program’s increased

costs.

Restarting Production Was

Difficult

The Kansas City Plant is responsible for the production of nonnuclear

components for nuclear weapons, such as radars, timing devices, gas

reservoirs, plastic products, and products requiring special technology

capabilities. For the W87, Kansas City’s major effort was refurbishing and

manufacturing detonators. Originally, the W87’s detonators were

manufactured at the Office of Defense Programs’ Mound Plant in Ohio.

When Mound was closed in 1990 as part of the consolidation of the nuclear

weapons complex, production for the detonators used in the W87 was

transferred to the Kansas City Plant and Los Alamos. As part of the W87

LEP, the Office of Defense Programs intended to reuse detonators taken

from the W87s that Pantex was disassembling and to manufacture new

detonators. Both processes experienced significant restart problems.

With respect to the reuse of existing detonators, Albuquerque Operations

Office and Livermore officials assumed that the reacceptance rate of the

detonators would be about 80 to 90 percent. However, Livermore

developed very strict reacceptance criteria in order to reduce the risk of

introducing new problems during the W87 LEP. According to Albuquerque

Operations Office and Kansas City Plant officials, this resulted in an actual
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reacceptance rate of only about 45 percent, placing considerable pressure

on Kansas City to begin new detonator production.

The production of new detonators was fraught with numerous problems,

including the following:

• The original production process had not been adequately documented.

When Mound was closed, the people who knew how to produce

detonators were not retained, resulting in a loss of process knowledge.

• Leftover production material from Mound that Kansas City had planned

to reuse had not been adequately stored, rendering it useless.

• The detonator parts that Mound produced were actually built to closer

tolerances than the tolerances shown on the drawings; therefore, when

Kansas City built the parts to the tolerances in the drawings, they would

not work.

These problems did not affect the February 1999 first production unit date;

however, they did cause internal schedule slippage. Consequently,

according to Kansas City Plant officials, Kansas City had to develop an

aggressive and expensive recovery schedule. They estimated that Kansas

City’s production costs increased from about $4.5 million to $32.4 million.

Safety and Training Issues

Contributed to Production

Delays

The Y-12 Plant’s principal mission involves manufacturing (including

refurbishment), disassembly, and surveillance of the secondary stage of

nuclear weapons.1 In September 1994, Y-12 went into a stand-down because

of extensive concerns about safety practices at the plant. The contractor

had to rework safety procedures and improve technician training on a

facility-by-facility basis within the plant, gradually bringing Y-12 back up

one function at a time. According to program officials, the stand-down at Y12 directly contributed to the Office of Defense Programs’ decision to slip

the first production unit date from the first quarter of 1997 to February

1999. While the facilities necessary to support the W87 LEP were brought

up first, the restart is still not complete. This could affect future LEPs.

1 A nuclear weapon consists of two stages—a primary and a secondary. The primary is the

fission stage of a nuclear weapon. Detonated first, the primary produces the extremely high

temperatures and pressures required to produce fusion in the weapon’s secondary. The

secondary, or thermonuclear stage, of a nuclear weapon produces its energy through the

fusion of deuterium and tritium nuclei.
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Technician training at the Pantex Plant, where the nation’s nuclear

weapons are disassembled, repaired, and assembled, also affected

production. In order to work on any particular nuclear weapon, Pantex

technicians must be trained and certified. The technicians who were going

to perform the W87 LEP were working on other weapons programs when

the LEP began. Similar to the situation at Y-12, some of this training had to

do with ensuring that technicians performed operations safely.

Consequently, delays occurred while these technicians completed their

current workload and then were trained and certified. According to

Albuquerque Operations Office officials, while Pantex met the first

production unit date of February 1999, problems with technician training

caused them to miss the June and July 1999 shipments.

After Pantex fell behind, it went to overtime and double shifts to try to

catch up. However, Albuquerque Operations Office officials said that the

technicians were not proficient enough to work at the accelerated rate that

they were trying to achieve. As a result, the technicians damaged the W87’s

detonators when they tried to install them on this accelerated schedule.

Albuquerque Operations Office officials were able to persuade

headquarters officials to stop trying to meet the accelerated schedule and

to return to the regular schedule. Once they returned to the regular

schedule, the problem stopped. Albuquerque Operations Office officials

hope that when the technicians gain more experience, they can make up

the deliveries that Pantex missed. This problem also affected detonator

production at Kansas City, since the Office of Defense Programs had not

assumed that there would be any damage at Pantex when it set up the

original production schedule.

Finally, in addition to safety issues, Y-12 experienced problems when

production actually began. For example, certain materials needed for the

W87 were no longer being manufactured by outside vendors. This required

Y-12 to develop production processes in-house or to reuse existing

materials. As with the Kansas City Plant, meeting these requirements added

to the cost of the effort.

Changing Requirements Caused

Conflict Between the Plants and

Livermore

Once a design lab has developed the requirements for a redesigned

weapon, the production plants must develop and implement production

methods. The design lab, in turn, must certify that these methods produce

the required part or component. Changing requirements dictated by the

design lab—Livermore—contributed to the problems experienced during

the production process. As noted earlier, part of these changing

requirements resulted from the need for a redesign. However, plant
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officials repeatedly told us that Livermore added additional requirements

as they went through the production cycle. For example, Livermore

required the plants to capture much more data on the parts they were

manufacturing than they had in the past. While plant officials conceded

that these data should be useful in the future, they felt that these

requirements had not been adequately anticipated and budgeted for,

putting extra pressure on them during the production process.

Management Weaknesses

Contributed to the W87’s

Problems

A major contributing factor to the problems experienced during the W87

LEP was the Office of Defense Programs’ lack of an effective management

process and leadership. Without an effective process and leadership, the

potential impact of many of the problems encountered was neither

anticipated nor effectively mitigated.

While the Office of Defense Programs has historically used a very detailed

program management process to design and build new nuclear weapons,

the W87 LEP was conducted without such a process, as shown in the

following examples:

• The Office of Defense Programs did not develop an overall program plan

to manage the entire W87 LEP process. According to a program official,

the W87 was begun with a one-line directive in the fiscal year 1995

Production and Planning Directive to “extend the life of the W87.” This

one-line directive continued to be contained in subsequent Production

and Planning Directives and was the only official program guidance

given until fiscal year 1999, when detailed production guidance was

given to the production plants regarding monthly production and

schedule. The Livermore project manager did develop a briefing for the

Office of Defense Programs on how the lab intended to proceed with the

design; however, the contents of this briefing were never integrated into

the Production and Planning Directive in order to create an overarching

plan.

• The Office of Defense Programs did not develop an overall cost and

schedule baseline to guide the design process. Without a cost baseline,

the design process was funded out of Livermore’s operating funds,

providing little oversight and control over program costs when they

escalated.

• The Office of Defense Programs did not develop an overall cost baseline

for the entire W87 LEP. As a result, we developed an overall estimate of

the W87 LEP for this review from the best available data.
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• The Office of Defense Programs did not implement any overall system

of change control for the W87 LEP. Consequently, as design and

production changes occurred, the Office was not able to effectively

oversee the process.

In addition to the lack of an effective management process, the W87 LEP

lacked consistent, coherent leadership, as shown below:

• No one person within the Office of Defense Programs was expressly in

charge of the W87 LEP. The program official in headquarters responsible

for the W87 LEP saw his role as one of being an “integrator” of the views

of the different individual program managers at the labs, plants, and

Albuquerque Operations Office. In contrast, the Albuquerque Operations

Office has clear authority over the production plants; however, its ability

to direct the labs is more limited.2 Moreover, during the course of the

W87 LEP, the responsibility for program management at the

Albuquerque Operations Office turned over four times.

• Leadership of the program appeared to, in the words of one participant,

“move around,” depending on which phase the program was in. For

example, during the design phase, Livermore program managers led the

effort, while during the production phase, Albuquerque Operations

Office officials were in charge. During the transition between these

phases, many participants felt that who was in charge was not clear. The

Director of the Air Force’s Office of Nuclear Weapons and Counter

Proliferation—the customer for the W87 LEP—told us that the Air Force

was often cast in the role of resolving disputes between the labs and the

production plants.

In trying to explain why the Office of Defense Programs’ management of

the program was so weak, the former Associate Deputy Assistant Secretary

for Nuclear Weapons Stockpile provided the most comprehensive

explanation. He said that, when the Office of Defense Programs was in the

regular business of designing and producing weapons, each participant

knew his/her role and how to manage the process. Once the Office of

Defense Programs got out of the business in the late 1980s, people simply

forgot how. He stressed that the more time that passes until the Office of

Defense Programs begins full-scale refurbishments, the worse the problem

2 As a result of the Deputy Secretary’s September 26, 2000, memorandum on field

restructuring, the Y-12 Plant and the Tritium Operations at the Savannah River Site no longer

report to the Albuquerque Operations Office. (See ch. 4 for further discussion.)
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of not having people with first-hand program management knowledge will

become.

Without a management process and consistent leadership, the Office of

Defense Programs was unable to effectively anticipate many of the

problems they faced and to effectively resolve areas of disagreement. For

example, despite the fact that the Mound production plant had been shut

down and the processes moved to Los Alamos and Kansas City, Office of

Defense Programs officials assumed that there would be no start-up

problems. An Office of Defense Programs official told us that, when they

developed cost estimates, they used the same contingency factors they had

in the past and did not allow for any start-up problems.

Improved Management

Processes Have Been

Developed for Future

Life Extensions, but

More Needs to Be

Done

As a direct result of its experience with the W87 LEP, the Office of Defense

Programs has developed a specific management process for future life

extension programs called the “6.X process.” The 6.X process uses the

management framework that the Office of Defense Programs employed for

over 40 years to successfully design and build the nation’s nuclear arsenal

and applies it to the refurbishment process. By doing so, the 6.X process

requires the use of a management process, such as the development of the

plans and cost and schedule estimates, that we found missing in the W87

LEP. However, the development of the 6.X process is not complete. While a

joint DOE /DOD version of the 6.X process has been approved, a more

detailed Office of Defense Programs version that defines such things as the

role of the participants and how and when peer review will be used during

the life extension process is still under review. More importantly, on the

basis of our review of draft documents and discussions with program

officials, the revised 6.X process does not solve the problem of a lack of

clear leadership in the Office of Defense Programs throughout the life

extension process. Rather, it continues the current practice of multiple

program managers at multiple locations.

We identified a relatively new Office of Defense Programs management

practice—known as the multisite performance-based incentive—which has

shown promise for more effectively integrating the actions of the nuclear

weapons complex. Specifically, for fiscal year 2000, part of the fee earned

by the Kansas City, Y-12, and Pantex Plants is based on their meeting the

ultimate delivery schedule to the final user—the Air Force. This incentive

requires the three contractors to work closely together because, if one

contractor should cause the delivery schedule to be missed, none of the

contractors will earn the monthly available fee. During fiscal year 2000, we
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Page 84 GAO-01-48 Nuclear Weapons

found general agreement that the multisite incentive program had met its

expected benefit of improving cooperation and communication and

meeting production goals. Several participants suggested that this program

should be extended to include the labs when they serve as a production

plant. For example, as noted earlier, in the case of the W87, Los Alamos

produces detonator parts. In addition, it was suggested that linking the

design labs into such an incentive program could serve to align the

interests of all of the parties throughout the life extension process.

Finally, all of the participants involved in the W87 LEP agree that significant

“lessons learned” need to be applied to future life extensions if the W87’s

problems with cost and schedule are to be avoided. For example, in

addition to the need for a more coherent management process, many

participants agreed that the weapons complex cannot assume in the future

that previously shut-down processes can be easily restarted. However, we

found that, to date, there has been no formal effort to catalogue the lessons

learned and directly communicate them to managers and participants in

the W76 and W80 LEPs. We did find some evidence of informal

communication within some organizations; however, while acknowledging

its importance, Office of Defense Programs officials said that the formal

development and transmission of lessons learned had not been a high

priority.

Conclusions While some of the problems encountered during the W87 LEP were

probably unavoidable, an effective management process and clear

leadership could have mitigated their impact. All of the participants agreed

that important lessons have been learned from the W87 LEP and that the

Office of Defense Programs has taken some actions, such as the

development of the 6.X process, to make improvements. However, because

of the importance of future life extensions to the nation’s stockpile, we

believe that more needs to be done. Specifically, we believe that the Office

of Defense Programs needs to ensure that one overall manager is

accountable for each life extension program. This role is critical to

ensuring that the many participants in a life extension stay focused on cost

and schedule as the life extension moves through the process. In addition,

we believe that the Office of Defense Programs needs to actively pursue the

use of multisite incentive programs for future life extensions. In doing so,

the Office of Defense Programs should explore mechanisms for including

the design labs in these incentive programs to ensure that the incentives of

all parties are clearly aligned. Finally, we believe that that a W87 lessons

learned document, with recommendations for additional management
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changes, if necessary, needs to be developed and formally communicated

to all participants in the current W76 and W80 life extensions.

Recommendations for

Executive Action

To improve the management of the stockpile life extension program, we

recommend that the Administrator of the National Nuclear Security

Administration direct the Deputy Administrator for Defense Programs to

do the following:

• For each life extension, establish a manager who is responsible for and

accountable for the entire life extension program.

• Use the multisite incentive approach in future life extensions to align, to

the maximum extent possible, the performance incentives of all of the

participants, including the design labs and the production plants.

• Develop and transmit a W87 life extension program “lessons learned”

report with recommendations for additional program management

changes, if needed, to all participants in ongoing and future life

extension programs.

Agency Comments and

Our Evaluation

The National Nuclear Security Administration’s Office of Defense Programs

concurred with our recommendations regarding improving the

management of future life extension activities and stated that it was

planning to take action on each recommendation. Specifically, the Office

stated that it was planning to (1) appoint a “super” program manager for

each life extension, (2) link the performance of all sites contributing to the

Stockpile Stewardship Program through new management and operating

contracts, and (3) require that a “lessons learned” document be

immediately produced for the W87. While we support the Office of Defense

Program’s proposed actions, we are concerned about how it describes the

super program manager position. Specifically, in its comments on our

report, the Office states that this position will be responsible only for

“coordinating” all activities for each life extension program. As we noted in

our report, there are already managers who integrate, or coordinate,

activities in the program. We believe that each life extension program

needs a manager who does more than simply coordinate. In our view, one

person who is responsible and accountable for each life extension is

needed. Without such a position, the problems experienced on the W87

LEP, such as a lack of focus on cost and schedule, could easily be repeated.
Page 86 GAO-01-48 Nuclear Weapons

Appendix I

Explanation of How Modern Nuclear Weapons Apendxies

Work ApendxiI

The following simplified explanation of how modern nuclear weapons

work is adapted from the Department of Energy's (DOE) Draft

Programmatic Environmental Impact Statement for Stockpile Stewardship

and Management and the Congressional Budget Office report entitled

Preserving the Nuclear Weapons Stockpile Under a Comprehensive Test

Ban.

1,2 Most modern nuclear weapons consist of three sets of

components—a primary, a secondary, and a set of nonnuclear

components—enclosed in a case. (See fig. 6.)

Figure 6: Simplified Drawing of a Modern Nuclear Weapon

Source: Draft Programmatic Environmental Impact Statement for Stockpile Stewardship and

Management, DOE, p. S-4.

1

Draft Programmatic Environmental Impact Statement for Stockpile Stewardship and

Management, Department of Energy (Dec. 1996), p. S-4.

2

Preserving the Nuclear Weapons Stockpile Under a Comprehensive Test Ban,

Congressional Budget Office (CBO Papers, May 1997), pp. 11-15.

Contact 

fuse

Radar

Aerodynamic

structure

Battery

Arming and

firing

Safing

components

Nuclear explosive

package

Gas transfer

system

Permissive action link

coded control

Explosive

actuators

Neutron

generators

Parachute

Before firing Implosion

Chemical

explosive

Subcritical

mass

Supercritical

mass

The diagram is a symbolic representation of the design elements of a

nuclear weapon. None of the symbols represent actual designs.
Appendix I

Explanation of How Modern Nuclear

Weapons Work

Page 87 GAO-01-48 Nuclear Weapons

The primary stage of the weapon produces large amounts of energy, which

is used to ignite the secondary. Most primaries consist of a “pit,” or central

core surrounded by high explosive. Pits are typically made of an isotope of

plutonium.3 An electrical charge triggers detonators, causing the layer of

high explosives to burn and detonate. As shown in the inset in figure 6, this

compresses the material in the pit, enough to form a critical mass, that is,

one that can sustain a nuclear fission chain reaction.4 Usually, that reaction

is enhanced, or “boosted,” by injecting a mixture of tritium and deuterium

gases into the pit by a gas transfer system. Those gases are stored in

reservoirs until the firing sequence is initiated. The net result of the

reactions occurring in the primary stage is the production of large amounts

of nuclear particles (neutrons) and energy (X-rays and gamma rays) that

are essential for igniting the secondary stage of the weapon.

The secondary contains components that focus the X-rays from the

primary-stage explosion onto the fusion cylinder in the weapon, resulting

in a radiation-induced implosion that creates the conditions necessary for

thermonuclear fusion.5 The fusion reaction is accompanied by the release

of great amounts of energy and fast neutrons and generally takes place only

under extreme heat and pressure.

This sequence of events is controlled by the nonnuclear components of the

weapon—mechanisms that control the arming and firing of the weapon. All

of the components shown in figure 6, except those in the nuclear explosive

package, are nonnuclear components. Components for “use control” are

included in the weapon to ensure that only authorized persons use the

weapon. For example, the permissive action link coded control, shown in

the schematic, precludes arming and/or launching the weapon until the

insertion of a prescribed code or combination.

3

Isotopes of an element all have the same number of protons in their nuclei, for example, a

plutonium atom has 92 protons, but have different numbers of neutrons. Isotopes usually

have nearly identical chemical and physical properties, but they may differ greatly in their

nuclear properties.

4

Fission occurs when the nucleus of an atom is split into two lighter parts and is usually

accompanied by the release of neutrons and large amounts of energy.

5

Fusion occurs when light nuclei are joined, or fused, to form a heavier nucleus.
Page 88 GAO-01-48 Nuclear Weapons

Appendix II

Scope and Methodology ApendxiI

During the course of our work, we visited seven of the eight facilities

currently working for the Office of Defense Programs. These included the

Nevada Test Site, the Kansas City Plant (Mo.), the Pantex Plant (Tex.), the

Y-12 Plant in Oak Ridge (Tenn.), the Los Alamos National Laboratory (N.

Mex.), the Lawrence Livermore National Laboratory (Calif.), and the

Sandia National Laboratories (N. Mex. and Calif.). We also met with DOE

officials in the Albuquerque Operations Office in New Mexico and the

Nevada Operations Office in Nevada, as well as DOE and contractor

officials at each of the sites listed, to discuss all of the objectives of the job.

We did not visit the Tritium Operations site at Savannah River, South

Carolina, because we had recently completed intensive work with that

office during our review of DOE’s plans to reinstitute the production of

tritium, a gas used in nuclear weapons.1 We also met with officials in the

Office of Defense Programs’ headquarters offices, including the Principal

Deputy for Operations, and numerous officials in the Office of Research,

Development, and Simulation and the Office of Military Application and

Stockpile Operations to discuss all of the objectives of the job.

Specifically, to determine if the Stockpile Stewardship Program has a

comprehensive planning process that effectively integrates its various

components, we obtained copies of DOE’s Strategic Plan; DOE’s annual

Stockpile Stewardship Plan; all of the available program and

implementation plans for the Campaigns, Directed Stockpile Work, and

Readiness in Technical Base and Facilities activities; and the interim

Stockpile Life Extension Program plan. We also obtained copies of the

relevant site plans, such as Institutional Plans and 10-Year Plans at the

national laboratories and the production plants. We assessed the Office of

Defense Program’s planning efforts against our standards for internal

control and assessed the interim Stockpile Life Extension Program plan

against the criteria given in the National Defense Authorization Act for

Fiscal Year 2000. 2 We also met with officials in the Office of Defense

Programs’ headquarters planning offices to review the status of the various

plans and to discuss their efforts for improving the integration of the plans.

Finally, we discussed planning issues with officials at each of the national

laboratories, the Nevada Test Site, and the production plants.

1

See Nuclear Weapons: Challenges Remain for Successful Implementation of DOE’s Tritium

Supply Decision (GAO/RCED-00-24, Jan. 28, 2000).

2

Standards for Internal Control in the Federal Government (GAO/AIMD-00-21, Nov. 15,

1999).
Appendix II

Scope and Methodology

Page 89 GAO-01-48 Nuclear Weapons

To review the new budget structure proposed by the Office of Defense

Programs for fiscal year 2001 and assess if it would help improve the

Stockpile Stewardship Program’s management, we met with officials in the

Office of Defense Programs’ Office of Program Analysis and Financial

Management, including the director of the latter Office, other senior

officials in the former Office, and officials in DOE’s Office of the Chief

Financial Officer, including the Deputy Controller. We also asked officials

at the field offices for details of how they were implementing the new

program activity structure and the potential effects of various activity

structures on their operational efficiency. Finally, we reviewed the Office of

Defense Programs’ budget submission for fiscal year 2001 and supporting

documentation on the development of the new program activity structure.

To assess if the Office of Defense Programs is organized to effectively carry

out the Stockpile Stewardship Program, we reviewed six major studies of

the program issued by internal and external reviewers since the program’s

inception. We selected four of those studies for an in-depth analysis of their

findings and recommendations and of DOE’s responses to their

recommendations. We met with senior DOE officials, including the DOE

Under Secretary, and with senior officials in the Office of Defense

Programs, including the Principal Deputy for Operations, the Director of

the Strategic Planning Staff, the Executive Assistant, the Associate Deputy

Assistant Secretary for Operations and Readiness, and officials from the

Office of the Deputy Assistant Secretaries for Military Application and

Stockpile Operations and the Office of Program Support, to discuss their

responses to these studies. We prepared draft matrices of the

recommendations, DOE’s proposed responses, and the current status of

DOE’s responses; these matrices were updated by senior Office of Defense

Programs officials and reviewed by the Principal Deputy for Operations for

accuracy and completeness. We analyzed DOE’s responses to the

recommendations for effectiveness, basing our analysis on all of the

information gathered during our site visits and meetings with DOE and

contractor officials. Finally, we analyzed staffing turnover in the Office of

Defense Programs by reviewing DOE’s listings of senior management

personnel, which denote whether an incumbent is in permanent or acting

status or whether the position is vacant, and discussed the reasons for the

turnover observed with the Principal Deputy for Operations.

To assess if the Office of Defense Programs has an effective management

process in place to oversee the life extension programs for weapons in the

stockpile, we met with officials in the Office of Defense Programs’

headquarters and field offices, including the Associate Deputy Assistant
Appendix II

Scope and Methodology

Page 90 GAO-01-48 Nuclear Weapons

Secretary for Nuclear Weapons Stockpile and the Director of the Office of

Stockpile Systems. We used the ongoing refurbishment of the W87 as a case

study of the life extension program process. We reviewed the available data

on the estimates of cost and schedule for the W87 life extension program.

In addition, we met with the senior officials at each of the field sites

responsible for overseeing the life extension program for the W87 and

discussed the problems DOE has encountered with that life extension and

the reasons for those problems. Finally, we reviewed the Office of Defense

Programs’ formal documentation of the new 6.X life extension process.

We conducted our review from June 1999 through October 2000 in

accordance with generally accepted government auditing standards.
Page 91 GAO-01-48 Nuclear Weapons

Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration ApendxiI

See comment 1.

See comment 2.

See comment 3.
Page 92 GAO-01-48 Nuclear Weapons

See comment 4.

See comment 5.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 93 GAO-01-48 Nuclear Weapons
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 94 GAO-01-48 Nuclear Weapons

Now on p. 6.

See comment 6.

Now on p. 9.

See comment 5.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 95 GAO-01-48 Nuclear Weapons

Now on p. 9.

See comment 6.

Now on p. 10.

See comment 6.

Now on p. 14.

See comment 6.

Now on p. 15.

See comment 7.

Now on p. 10.

See comment 7.

Now on p. 17.

See comment 6.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 96 GAO-01-48 Nuclear Weapons

Now on p. 21.

See comment 6.

Now on p. 21.

See comment 6.

Now on p. 23.

See comment 6.

Now on p. 27.

See comment 6.

Now on p. 31.

See comment 8.

Now on pp. 43-44.

See comment 2.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 97 GAO-01-48 Nuclear Weapons

See comment 2.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 98 GAO-01-48 Nuclear Weapons

See comment 2.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 99 GAO-01-48 Nuclear Weapons
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 100 GAO-01-48 Nuclear Weapons

Now on p. 34.

See comment 6.

Now on p. 34.

See comment 9.

Now on p. 38.

See comment 6.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 101 GAO-01-48 Nuclear Weapons

Now on pp. 38 and 39.

See comment 6.

Now on p. 39

See comment 10.

Now on p. 39.

See comment 6.

Now on p. 40.

See comment 6.

Now on p. 42.

See comment 6.

Now on p. 44.

See comment 2.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 102 GAO-01-48 Nuclear Weapons

See comment 3.

Now on pp. 8, 11, and 12.

See comment 6.

Now on pp. 8, 11, 12, 47, and 48.

See comment 3.

Now on p. 53.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 103 GAO-01-48 Nuclear Weapons
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 104 GAO-01-48 Nuclear Weapons

Now on pp. 47 and 48.

See comment 11.

Now on p. 50.

See comment 12.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 105 GAO-01-48 Nuclear Weapons

Now on p. 52.

See comment 6.

Now on p. 52.

See comment 6.

Now on p. 73.

See comment 13.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 106 GAO-01-48 Nuclear Weapons

See comment 4.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 107 GAO-01-48 Nuclear Weapons

Now on p. 67.

See comment 5.

Now on p. 67.

See comment 5.

Now on p. 69.

See comment 5.

Now on pp. 69 and 70.

See comment 5.

Now on p. 73.

See comment 13.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 108 GAO-01-48 Nuclear Weapons

See comment 7.

Now on p. 85.

See comment 7.

See comment 7.

Now on p. 78.

See comment 6.

Now on pp. 78 and 79.

See comment 6.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 109 GAO-01-48 Nuclear Weapons

Now on p. 81.

See comment 6.

Now on p. 82.

See comment 5.
Page 110 GAO-01-48 Nuclear Weapons

The following are GAO’s comments on the National Nuclear Security

Administration’s letter dated November 7, 2000.

GAO’s Comments 1. The report referenced is now numbered GAO-01-48.

2. Our reply to the National Nuclear Security Administration’s concern

about our planning recommendation appears at the end of chapter 2.

3. Our reply to the National Nuclear Security Administration’s concerns

about our budget recommendation appears at the end of chapter 3.

4. Our reply to the National Nuclear Security Administration’s concern

about instability in the Office of Defense Programs’ leadership and

management appears at the end of chapter 4.

5. Changes have been made to the text where appropriate to incorporate

information on changes being developed and/or implemented by the

National Nuclear Security Administration.

6. We concur with this comment, and changes have been made to the text

where appropriate.

7. Our reply to the National Nuclear Security Administration’s comments

on our recommendations to improve the stockpile life extension process

appears at the end of chapter 5.

8. The purpose of including the comments of the contractor officials in the

background chapter was to establish that the production complex is

currently being undercapitalized, not to determine the exact extent of the

undercapitalization. Nevertheless, we have also included the Office of

Defense Programs’ estimate of the appropriate level of capitalization in our

report.

9. We do not concur with this comment. The interim Stockpile Life

Extension Program Plan does not contain complete information on plant

capacity. Specifically, as stated in the report, the Y-12 Plant’s capacity

estimates for producing certain weapons components at that site are not

available because the Y-12 Plant does not have a current, validated model

for estimating plant capacity.
Appendix III

Comments From the Department of Energy’s

National Nuclear Security Administration

Page 111 GAO-01-48 Nuclear Weapons

10. We do not concur with this comment. We, again, reviewed the

Production and Planning Directive (provided by the National Nuclear

Security Administration with its comments) and found only references to

the fact that studies will be performed to address the potential capacity

shortfalls at Pantex. However, the document did not provide specific plans

for addressing the issues, such as establishing activities or making firm

commitments to modify facilities or hire and train additional staff to

prevent impacts to the schedule.

11. We have used the definition of fixed and variable costs contained in

DOE’s 30-Day Review. We believe that this definition makes clear that the

Readiness in Technical Base and Facilities category represents, in essence,

the fixed costs of the program.

12. We believe that functional costs do represent a reasonable surrogate for

the fixed costs of the program. However, we have made changes to the

report to make clearer the time frame of the functional cost data that we

cite.

13. Our response recognizes organizational changes made by DOE and the

National Nuclear Security Administration. The recommendation has been

redirected to the Administrator of the National Nuclear Security

Administration and refocused on the effective implementation of the recent

organizational changes that took effect October 1, 2000.

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