GAO 

United States Government Accountability Office

Report to the Subcommittee on Energy 

and Water Development, Committee on 

Appropriations, U.S. Senate 

NUCLEAR WEAPONS

National Nuclear 

Security 

Administration Needs 

to Better Manage 

Risks Associated with 

Modernization of Its 

Kansas City Plant 

October 2009 

GAO-10-115 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

October 2009

NUCLEAR WEAPONS

National Nuclear Security Administration Needs to 

Better Manage Risks Associated with Modernization 

Highlights of GAO-10-115, a report to the of Its Kansas City Plant 

Subcommittee on Energy and Water 

Development, Committee on 

Appropriations, U.S. Senate 

Built in 1943, the Kansas City Plant 

(KCP)––the National Nuclear 

Security Administration’s (NNSA) 

primary production plant for 

manufacturing nonnuclear 

components of nuclear warheads 

and bombs––is to be modernized 

because of its age and the high cost 

of maintenance and operation. 

Among other changes, NNSA plans 

to relocate KCP to a new facility 

and increase components obtained 

from external suppliers from about 

54 to 70 percent. KCP’s continued 

supply of these components is 

essential for maintaining a reliable 

nuclear weapons stockpile. 

GAO was asked to determine 

(1) how KCP developed plans for 

modernization, (2) actions KCP has 

taken to ensure uninterrupted 

production of components, and 

(3) actions KCP has taken to 

address the risks of outsourcing. 

GAO reviewed planning documents 

and met with officials from NNSA, 

KCP, and Sandia National 

Laboratories, which designs many 

of the components produced at 

KCP. 

What GAO Recommends

GAO is recommending, among 

other things, that NNSA ensure that 

future cost analyses consider the 

full useful life of the facility, revise 

the KCP relocation schedule to be 

consistent with Department of 

Energy (DOE) guidance and GAOidentified best practices, and 

develop a risk-based approach for 

managing technologies that could 

advance adversaries’ nuclear 

capabilities. In commenting on a 

draft of this report, NNSA generally 

agreed with our recommendations. 

KCP evaluated several alternatives on behalf of NNSA to modernize its facility 

based on whether the alternative (1) was consistent with NNSA’s goals for 

maintaining a smaller facility for producing nuclear weapons and one that 

could quickly adapt to change, (2) met NNSA’s commitments to Congress to 

operate a new facility by 2012, and (3) minimized costs and implementation 

risks. Based on KCP’s analyses of alternatives, NNSA chose to have a private 

developer build a new building in Kansas City 8 miles from the current facility, 

which NNSA would then lease through the General Services Administration 

(GSA) for a period of 20 years. However, in evaluating a financing method, 

KCP compared alternatives using cost estimates limited to 20 years. Twenty 

years is far shorter than the useful life of a production facility that is properly 

maintained; the current facility has operated for more than 60 years. NNSA 

and KCP officials acknowledge that while leasing a facility through GSA under 

a 20-year scenario is less costly than purchasing, it can be more costly over 

the longer term. Because KCP’s analysis did not consider costs beyond 20 

years, NNSA cannot be certain if other alternatives, such as purchasing the 

facility, might have offered lower costs over the longer term. 

KCP officials developed extensive plans to ensure that the production of 

components is not interrupted because of the transition to the new facility. 

However, its schedule—which is critical to ensuring that the move does not 

disrupt production—does not fully adhere to best practices GAO identified for 

schedule development and related DOE scheduling guidance. In February 

2009, GAO assessed KCP’s schedule and found that, among other things, KCP 

had not adequately sequenced all activities in its schedule in the order in 

which they are to be carried out. GAO followed up in July 2009 and found that 

although KCP officials have made progress in addressing several of these 

problems, the schedule still has some shortcomings. 

KCP has taken steps to mitigate some risks of increased outsourcing, but 

NNSA has not provided adequate oversight or clear and up-to-date export 

control guidance tailored for NNSA production and laboratory sites to 

effectively manage associated nuclear weapons proliferation risks. As such, 

KCP has not implemented a formal, risk-based approach to identify specific 

components and technologies that may be used by potential adversaries to 

develop or advance their nuclear capabilities. Lacking effective NNSA-specific 

guidance and a risk-based approach, KCP instead treats all components as if 

they pose equal proliferation risks. As such, items such as a common, 

commercially available screw are considered to be at the same level of 

proliferation risk as a complex mechanism designed to arm nuclear weapons. 

Further, KCP’s primary means of addressing this issue rests on its suppliers’ 

self-enforced compliance with a contract clause that outlines the suppliers’ 

responsibility to abide by applicable export control laws. Under this broadly 

applied approach to managing export control––where all components are 

treated as equal risks––NNSA may be missing opportunities at KCP to 

systematically identify and more effectively mitigate those risks that pose the 

greatest threats.

View GAO-10-115 or key components.

For more information, contact Gene Aloise at 

(202) 512-3841 or aloisee@gao.gov. 
Page i GAO-10-115 

Contents 

Letter 1

Background and Overview of Plans for Modernizing NNSA’s KCP 

Facility 4 

KCP Evaluated Several Alternatives for Modernizing Its Facility but 

Did Not Fully Analyze the Long-Term Impact of Some Financing 

Options 11 

KCP Is Taking Steps to Ensure Uninterrupted Production, 

Including Efforts to Address Scheduling Problems We Identified 16 

KCP Has Begun Taking Steps to Mitigate Some Outsourcing Risks 

but Could Better Safeguard Technologies That Pose Nuclear 

Proliferation Risks 22 

Conclusions 27 

Recommendations for Executive Action 28 

Agency Comments and Our Evaluation 29 

Appendix I Objectives, Scope, and Methodology 31 

Appendix II GAO Assessment of KCP’s Relocation Schedule 33 

Appendix III Comments from the National Nuclear Security 

Administration 37 

Appendix IV GAO Contact and Staff Acknowledgments 43 

Tables 

Table 1: KCP’s Comparison of Financing Options 14 

Table 2: KCP’s Progress in Meeting GAO-Identified Best Practices 

for Scheduling 21 

Figure 

Figure 1: Production of Nonnuclear Components in the U.S. 

Nuclear Weapons Complex 10 

 Nuclear Weapons 
Abbreviations 

DOD Department of Defense 

DOE Department of Energy 

DOJ Department of Justice 

GSA General Services Administration 

KCP Kansas City Plant 

NNSA National Nuclear Security Administration 

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

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Page ii GAO-10-115 Nuclear Weapons
Page 1 GAO-10-115 

 

United States Government Accountability Office

Washington, DC 20548 

 

October 23, 2009 

The Honorable Byron L. Dorgan 

Chairman 

The Honorable Robert Bennett 

Ranking Member 

Subcommittee on Energy and Water Development 

Committee on Appropriations 

United States Senate 

Built in 1943, the Kansas City Plant (KCP)—the National Nuclear Security 

Administration’s (NNSA) primary production plant for manufacturing 

nonnuclear components of nuclear warheads and bombs—is being 

modernized because of its age and the high cost of maintenance and 

operation. KCP produces or procures more than 100,000 parts annually—

ranging from nuts and bolts to complex radars—comprising about 85 

percent of the components that go into a typical nuclear weapon. NNSA, a 

separately organized agency within the Department of Energy (DOE), 

owns the building, equipment, and components produced at KCP, and 

NNSA’s Kansas City Site Office provides local oversight of all activity. 

Honeywell Federal Manufacturing and Technologies (Honeywell) manages 

and operates the KCP facility for NNSA. In response to a July 2005 report 

of the Secretary of Energy Advisory Board’s infrastructure task force,1

 and 

NNSA’s 2006 strategic plan on infrastructure,2

 which proposed ways to 

transform the nuclear weapons complex, NNSA directed KCP to develop 

plans for modernizing its production facilities based on its goals of 

developing a smaller, more responsive production infrastructure––one 

that will ultimately support a smaller nuclear weapons stockpile––while 

continuing to maintain and refurbish the weapons currently in the 

stockpile. KCP outlined three key avenues for achieving NNSA’s goals, 

including (1) purchasing more components from external suppliers; 

(2) implementing a more commercial-like business process; and 

1

Secretary of Energy Advisory Board, Report of the Nuclear Weapons Complex 

Infrastructure Task Force: Recommendations for the Nuclear Weapons Complex of the 

Future (Washington, D.C., July 13, 2005). Although not formally part of the nuclear 

weapons complex transformation, KCP aligned its modernization goals with NNSA’s 

overall transformation goals for the nuclear weapons complex. 

2

National Nuclear Security Administration, Complex 2030: An Infrastructure Planning 

Scenario for a Nuclear Weapons Complex Able to Meet the Threats of the 21st Century 

(Washington, D.C., Oct. 23, 2006). 

 Nuclear Weapons 
 

(3) building a smaller, modern, state-of-the-art, and more flexible 

manufacturing facility by 2012. KCP’s current plans are expected to result 

in an 18-month relocation to a new facility, an increase in outsourcing of 

components from 54 to 70 percent, and a reduction in KCP’s 

manufacturing footprint from about 3 million to 1 million square feet. KCP 

estimates that these measures will save about $100 million annually. 

Because KCP produces or procures components that are used to maintain 

the nation’s nuclear weapons stockpile, any disruptions in production at 

KCP could negatively affect the nuclear weapons stockpile. Another 

important consideration—particularly as KCP increases purchases of 

components from external suppliers, or outsourcing—is ensuring that 

NNSA protects components and technologies, including weapons-related 

design drawings, unique production processes, and information that, 

although mostly unclassified, could be used by potential adversaries to 

develop or advance their nuclear capabilities. Recent GAO testimonies and 

a grand jury indictment have described events where foreign entities 

sought dual-use items—items that can be used for both commercial and 

military applications. In fact, we covertly purchased two such items—a 

triggered spark gap and an accelerometer—and shipped dummy copies 

overseas to demonstrate the ease with which real, illegal shipments could 

be affected.3

 These events also demonstrate potential nuclear proliferation 

risks and gaps in the nation’s system for controlling the export of these 

items.4

 KCP regularly outsources the production of these types of dual-use 

items—which may have been designed at the nuclear weapons 

laboratories with unique weapons design characteristics, such as very high 

tolerances to extreme environments—raising questions as to whether 

these items may be more vulnerable to export. 

In this context, you asked us to determine (1) how KCP developed plans 

for modernizing the facility, (2) actions KCP has taken to ensure 

uninterrupted production of components needed to support the weapons 

stockpile during and after the transition to the new facility, and (3) actions 

 

3

Triggered spark gaps are versatile high-voltage switches used for medical applications that 

can also be used as nuclear weapons detonators. Accelerometers are sensors and 

instruments used for measuring, displaying, and analyzing acceleration and vibration. 

4

GAO, Export Controls: Fundamental Reexamination of System Is Needed to Help Protect 

Critical Technologies, GAO-09-767T (Washington, D.C.: June 4, 2009), and Military and 

Dual-Use Technology: Covert Testing Shows Continuing Vulnerabilities of Domestic 

Sales for Illegal Export, GAO-09-725T (Washington, D.C.: June 4, 2009). 

Page 2 GAO-10-115 Nuclear Weapons
 

KCP has taken to address the risks and potential consequences of 

increased outsourcing of nonnuclear components. 

To determine how KCP developed plans for modernizing the current 

facility, we reviewed NNSA and Honeywell documents describing the 

project’s goals, approach, and rationale for key decisions on what actions 

to take, where to locate the facility, and how to finance it. We also 

interviewed officials at NNSA’s Kansas City Site Office, Honeywell, and 

relevant subcontractors. Under our long-standing policy of not addressing 

issues in ongoing litigation, we did not evaluate KCP’s analysis of location 

alternatives because a lawsuit was filed in October 2008 that among other 

things challenged the extent and adequacy of DOE’s consideration of 

alternatives to its plans for replacing the KCP facility.5

 To determine the 

actions KCP has taken to ensure uninterrupted production of components, 

we reviewed agency and contractor documents describing transition plans 

and talked to officials at Sandia National Laboratories (Sandia) in New 

Mexico, which designs many of the nonnuclear components that are 

produced at KCP. We also evaluated the reliability of KCP’s relocation 

schedule using GAO-identified best practices for effective scheduling,6

many of which are also identified by DOE in its guidance on establishing 

performance baselines.7

 To determine the actions KCP has taken to 

address the risks associated with outsourcing, we reviewed agency and 

contractor documents, including KCP’s outsourcing strategy and export 

control process and relevant export control laws and regulations, and 

interviewed key KCP, Sandia, and NNSA officials responsible for 

overseeing nuclear nonproliferation activities. 

We conducted this performance audit from November 2008 through 

October 2009 in accordance with generally accepted government auditing 

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

obtain sufficient, appropriate evidence to provide a reasonable basis for 

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

that the evidence obtained provides a reasonable basis for our findings 

 

5

Natural Resources Defense Council v. Samuel W. Bodman, No. 1:08-cv-01709 (D. D.C. 

filed Oct. 8, 2008). 

6

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

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: March 2009). 

7

Department of Energy, Performance Baseline Guide, G 413.3-5 (Washington, D.C., Sept. 

12, 2008). 

Page 3 GAO-10-115 Nuclear Weapons
 

and conclusions based on our audit objectives. Appendix I contains a 

detailed description of our scope and methodology. 

The KCP facility, NNSA’s primary site for producing or procuring 

nonnuclear components, is the first site within the nuclear weapons 

complex scheduled for significant modernization. KCP does not possess 

weapons-grade nuclear materials, but it supplies approximately 85 percent 

of the nonnuclear components that compose a typical nuclear weapon—

ranging from simple items like nuts and bolts to more complex 

components, such as radars, arming and firing mechanisms, and critical 

nuclear safety devices meant to prevent accidental detonation. The facility 

has a footprint of nearly 3 million square feet and costs about $400 million 

per year to operate. Currently, about 127,000 square feet of this space is 

devoted to stored inventory, including production equipment, tooling, 

gauges, and testers. 

Background and 

Overview of Plans for 

Modernizing NNSA’s 

KCP Facility 

Modernizing the KCP 

Facility 

The production infrastructure of the nuclear weapons complex is aging 

and becoming increasingly outdated. A 2001 Department of Defense 

(DOD) review of the nation’s nuclear policy found that the nuclear 

weapons production infrastructure needed to be repaired and made more 

flexible so that it could adapt to the changing needs of the nuclear 

weapons stockpile.8

 Subsequently, NNSA developed the strategic Complex 

Transformation Plan, which seeks to develop a smaller, more responsive 

production infrastructure—one that will ultimately support a smaller 

nuclear weapons stockpile—while continuing to maintain and refurbish 

the weapons currently in the stockpile. 

As part of its Complex Transformation Plan, in 2006 NNSA directed KCP 

to develop plans for modernizing its production facilities. In its plans, KCP 

identified three key avenues for achieving NNSA’s goals: 

 

8

Department of Defense, Nuclear Posture Review (Washington, D.C., Dec. 31, 2001). This 

review was required by the Floyd D. Spence National Defense Authorization Act for Fiscal 

Year 2001, Pub. L. No. 106-398, § 1041, 114 Stat. 1654, 1654A-262 (2000), which directed the 

Secretary of Defense, in consultation with the Secretary of Energy, to “conduct a 

comprehensive review of the nuclear posture of the United States for the next 5 to 10 

years.” The result of this review was DOD’s proposal for the New Triad, which significantly 

expanded the range of strategic capabilities. A new Nuclear Posture Review is currently in 

progress—as required by the National Defense Authorization Act for Fiscal Year 2008, Pub. 

L. No. 110-181 § 1070, 122 Stat. 3, 327 (2008)—and a report on the results of this review is 

required to be submitted to Congress in 2009. 

Page 4 GAO-10-115 Nuclear Weapons
 

Increasing outsourcing. KCP is increasing the percentage of nonnuclear 

components purchased from external suppliers from about 54 to 70 

percent. At the same time, it is consolidating and reducing its external 

suppliers from about 412 in May 2008 to 320 in September 2009 to reduce 

the costs of working with and certifying multiple suppliers. As more 

components are acquired from external suppliers, KCP expects the 

equipment and infrastructure necessary for the production of many of 

those components to be eliminated, reducing the need for the large size 

and associated operating costs of the facility. KCP currently uses 

domestic-based suppliers, with the exception of those components that 

are acquired from Malaysia and Mexico. Nearly all of the components and 

processes that KCP outsources are unclassified; KCP officials told us that 

they have only certified one supplier that is approved for classified 

processing, production, and storage. 

Transforming its business processes. Honeywell, the contractor that 

manages KCP, is implementing more commercial-like business practices. 

In particular, KCP officials note that they have recently been granted relief 

from some DOE and NNSA oversight, such as NNSA nuclear security 

orders, because it does not possess weapons-grade nuclear material and 

because commercial standards are being used. KCP officials believe that 

these changes will lead to more streamlined business processes with lower 

administrative costs. According to KCP officials, an independent review 

estimated that these lower costs will amount to $37 million each year—

more than one-third of the $100 million annual cost savings KCP projects 

will result from its modernization plans. 

Building a modern, more flexible facility. NNSA plans to have a new KCP 

facility built on an undeveloped site in Kansas City, Missouri. KCP’s new 

facility is designed to be smaller and more adaptable than the current 

facility, allowing quick and economical changes to the capability and 

capacity of the facility, such as using more open manufacturing space and 

modular utility systems so that it can be quickly and inexpensively 

reconfigured to adapt to changing production needs. NNSA committed to 

Congress that the new KCP facility would be operating by 2012 but now 

expects a delay of about 1 year. 

Financing the New Facility To construct this new facility, NNSA identified three financing options. 

The traditional approach for financing construction projects is to request 

funding from Congress using a budget line item in the President’s annual 

request for appropriations. If the requested funds are appropriated, a 

federal manager directly controls the scope, cost, and schedule of the 

Page 5 GAO-10-115 Nuclear Weapons
 

design and construction of the facility. These projects usually require 

significant funding up front when the facility is being designed and 

constructed. However, as we have reported, large amounts of funding have 

become more difficult to obtain, and agencies are increasingly interested 

in financing alternatives that distribute costs over longer periods of time.9

One alternative is to acquire facilities using the General Services 

Administration’s (GSA) leasing authority, which allows GSA to lease space 

from a private developer on behalf of many government agencies. For a 

lease on privately owned land, the process culminates with a lease 

agreement of up to 20 years.10 Another alternative, according to KCP 

officials, allows NNSA to secure financing directly through private 

developers for the construction of facilities, but this alternative allows 

only for a maximum 5-year lease term.11

We have considered federal leasing, in general, to be a challenge for 

almost 20 years. In January 2003 we designated federal real property as a 

high-risk area, citing the government’s overreliance on costly, long-term 

leasing as one of the major reasons.12 Our work has also shown that 

building ownership often costs less than operating leases, especially for 

long-term space needs.13 Based on this work, we made recommendations 

in 2008 that agencies develop strategies to reduce reliance on leased space 

for long-term needs when ownership would be less costly.14

 

9

GAO, Federal Real Property: Strategy Needed to Address Agencies’ Long-standing 

Reliance on Costly Leasing, GAO-08-197 (Washington, D.C.: Jan. 24, 2008). 

10The lease term may be for up to 30 years if the government owns the underlying land. 

11Current NNSA policy permits potentially three additional 5-year options under this 

financing alternative—a total of 20 years. 

12GAO, High-Risk Series: An Update, GAO-03-119 (Washington, D.C.: January 2003). 

13An operating lease is a lease that meets six criteria listed in the scorekeeping guidelines in 

OMB Circular A-11, app. A. Specifically, (1) ownership of the asset remains with the lessor 

during the term of the lease and is not transferred to the government at or shortly after the 

end of the lease term; (2) the lease does not contain a bargain-price purchase option; 

(3) the lease term does not exceed 75 percent of the estimated economic life of the asset; 

(4) the asset is a general purpose asset, it is not for a special purpose of the government, 

and it is not built to the unique specifications of the government lessee; (5) there is a 

private sector market for the asset; and (6) the present value of the minimum lease 

payments over the life of the lease does not exceed 90 percent of the fair market value of 

the asset at the beginning of the lease term. 

14GAO-08-197. 

Page 6 GAO-10-115 Nuclear Weapons
 

Avoiding Interruptions in 

the Supply of Components 

Another important consideration in KCP’s modernization plans is avoiding 

interruptions in the supply of components it produces. Such interruptions 

could negatively affect the nuclear weapons stockpile and weaken 

national security. For example, as nuclear weapons components age, they 

may need to be replaced to avoid undermining the reliability and 

performance of the weapon that they occupy. KCP produces or procures 

these replacement components. Much of KCP’s current workload supports 

the life extension program for the W76 warhead—carried on the Navy’s 

Trident II submarine-launched ballistic missile—which is a significant part 

of the U.S. nuclear weapons stockpile. Life extensions lengthen weapons’ 

operational life for an additional 20 to 30 years and allow NNSA to certify 

that the weapons continue to meet military performance requirements 

without underground nuclear testing. In addition, KCP currently produces 

or procures nonnuclear components needed to maintain the W88 

submarine-launched ballistic missile warheads, the W78 and W87 

intercontinental ballistic missile warheads, the W80 cruise missile 

warhead, and the B61 and B83 nuclear bombs. 

Managing Outsourced 

Technologies 

Another important consideration in KCP’s modernization plans, 

particularly as it begins to increase outsourcing, is that KCP manages 

components and technologies that might be attractive to terrorists or other 

potential adversaries. Passing components and technologies to external 

suppliers may put them at greater risk of being obtained and used by 

potential adversaries to develop or advance their own nuclear capabilities. 

Recently, the Department of Justice (DOJ) reported that on a daily basis, 

foreign states as well as criminal and terrorist groups seek arms, 

technology, and other material to advance their technological capacity, 

and the United States is a primary target because it produces advanced 

technologies. For fiscal year 2008, DOJ reported that more than 145 

defendants faced criminal charges for attempting to illegally transfer these 

items and technologies, with roughly 43 percent of these defendants 

charged with attempting to transfer them to Iran or China. 

Some of the components KCP produces or procures, as well as 

technologies that can be developed from obtaining weapons-related design 

drawings and unique production processes, among other things, may be 

subject to laws and regulations controlling their export. Export control is 

primarily managed by the Departments of Commerce and State. The 

Department of Commerce, through the Export Administration 

Regulations, controls exports of most dual-use items and technologies. 

The Department of Commerce maintains the Commerce Control List, 

which describes the characteristics and capabilities of dual-use items that 

Page 7 GAO-10-115 Nuclear Weapons
 

may require export licenses. The list is divided into 10 general categories 

of controlled technologies, such as sensors or electronics, which could 

include components that KCP produces or outsources. The Department of 

State, under the authority of the Arms Export Control Act and the 

International Traffic in Arms Regulations, controls exports of munitions 

items and technologies—those designed, developed, configured, adapted, 

or modified solely for military applications. These items are identified on 

the U.S. Munitions List, requiring most to be licensed for export. While 

these two departments are responsible for limiting the possibility of 

export-controlled items and technologies falling into the wrong hands, 

NNSA asserts that it is also generally responsible for the management and 

security of the nation’s nuclear weapons, including ensuring that nuclear 

weapons components or related information about these technologies are 

not used to advance the nuclear capabilities of potential adversaries. 

Collaborating with NNSA’s 

National Laboratories 

Many of the actions needed to successfully relocate the KCP facility 

require the ongoing cooperation of and collaboration with other NNSA 

laboratory sites. Design engineers at Lawrence Livermore, Los Alamos, 

and Sandia National Laboratories design the nonnuclear components 

produced or procured by KCP and determine whether the designs are 

classified, among other things. KCP produces or procures the components 

according to laboratory design specifications, but quality and production 

engineers from KCP continue to periodically collaborate with laboratory 

design engineers to oversee production, mitigate production risks, and 

integrate competing priorities, such as cost, schedule, design 

requirements, and quality. Before KCP begins full procurement or 

production of some components, laboratory design engineers must 

formulate a plan to qualify the component and assist in executing the 

qualification plan, which involves testing a sample of components to 

ensure that they meet quality, safety, and security standards. Such tests 

may include visual, environmental, mechanical, and electric tests, among 

others. In addition, if KCP decides to make major production changes or 

move the production process, components may have to be requalified to 

ensure that they still meet quality, safety, and security standards. 

Requalification can take from 1 month to more than 1 year, depending on 

the significance or complexity of the part and the extent of the planned 

production change. Requalification may also be required when a product is 

outsourced or moved from one supplier to another. As such, many 

components will have to be requalified before they can be produced at 

KCP’s new facility or by an external supplier. KCP is NNSA’s primary site 

within the nuclear weapons complex for producing nonnuclear 

components of nuclear warheads and bombs. Figure 1 illustrates how sites 

Page 8 GAO-10-115 Nuclear Weapons
 

in the nuclear weapons complex interact with each other to design, 

produce, procure, and assemble nonnuclear components. 

Page 9 GAO-10-115 Nuclear Weapons
 

Figure 1: Production of Nonnuclear Components in the U.S. Nuclear Weapons Complex 

54%

46%

Outsourced

Produced at KCP

May 2006 September 2011

70%

30%

Lawrence

Livermore National 

Laboratory

Designs nuclear and 

nonnuclear

components

Kansas City Plant

Produces or procures

nonnuclear components

Other production sites within the 

nuclear weapons complex

Savannah River Site

Y-12 Plant

Pantex Plant

Assembles nuclear

weapons using

nonnuclear

components from

KCP and nuclear

components from

other NNSA sites

Private suppliers

KCP outsources the production of

select nonnuclear parts and

components to private suppliers

Department of

Defense

Sandia National

Laboratories

Primary designer of

nonnuclear

components

Los Alamos

National

Laboratory

Designs nuclear and 

nonnuclear

components

Design

laboratories

Production plants Nuclear

weapons

stockpile

Source: GAO analysis of NNSA and KCP data.

Page 10 GAO-10-115 Nuclear Weapons
 

KCP officials told us that they evaluated several locations and financing 

alternatives based on their potential for satisfying NNSA’s key goals 

outlined in its strategic plans for modernizing the overall infrastructure of 

the nuclear weapons complex. Based on analyses conducted by KCP, 

NNSA chose to lease a new facility for 20 years. However, KCP compared 

financing alternatives using cost estimates limited to 20 years rather than 

the full expected life of the proposed facility; therefore, NNSA cannot be 

certain whether other financing alternatives might have offered lower 

costs over the longer term. 

KCP Evaluated 

Several Alternatives 

for Modernizing Its 

Facility but Did Not 

Fully Analyze the 

Long-Term Impact of 

Some Financing 

Options 

KCP Evaluated Several 

Alternatives for 

Modernizing the Facility 

KCP evaluated several alternatives on behalf of NNSA for modernizing its 

facility based on each alternative’s potential to satisfy key goals outlined in 

NNSA’s strategic plans for modernizing the nuclear weapons complex, 

among other things.15 Specifically, KCP officials told us that they sought an 

option that (1) was consistent with NNSA’s goals for maintaining a smaller 

facility for producing nuclear weapons and that could quickly adapt to 

change; (2) met schedule commitments to Congress; (3) minimized costs 

of constructing and annually operating and maintaining the facility; and, 

(4) maximized chances of completing the relocation within the established 

scope, cost, and schedule. Although KCP conducted the analyses of 

alternatives for modernizing its facility under the direction of NNSA, 

NNSA ultimately made its final decisions on how best to proceed using 

these analyses. 

To determine how to proceed with the modernization of its facility, KCP 

officials stated that they considered (1) taking no action—essentially 

continuing operations at the current KCP location; (2) renovating adjacent 

GSA facilities; (3) purchasing or leasing other facilities that were already 

available in the Kansas City area; or (4) building a new facility on the 

existing KCP site, on other vacant land within Kansas City, or at another 

location. KCP officials explained that several of these options proved 

undesirable for a variety of reasons. 

 

15A lawsuit was filed in October 2008 that, among other things, challenged the extent and 

adequacy of DOE’s consideration of alternatives to its plans for replacing the KCP facility. 

Natural Resources Defense Council v. Samuel W. Bodman, No. 1:08-cv-01709 (D. D. C. 

filed Oct. 8, 2008). Pursuant to its long-standing policy of not addressing issues in ongoing 

litigation, GAO has not evaluated DOE’s consideration of these alternatives. 

Page 11 GAO-10-115 Nuclear Weapons
 

• Taking no action. KCP determined that taking no action did not align with 

NNSA’s overall Complex Transformation goals or commitments that 

NNSA’s Deputy Administrator made to Congress to modernize the facility. 

According to KCP officials, taking no action would also result in annual 

operating costs that are about $100 million higher than necessary beyond 

fiscal year 2013, over half of which would be related to facility 

maintenance. 

• Renovating adjacent GSA facilities. KCP determined that renovating 

adjacent GSA facilities was feasible and the least costly alternative in 

terms of construction costs, but it posed several problems. For example, 

renovating the 70-year-old facility would require extensive modification of 

electrical, heating, and cooling systems, which would require moving, 

penetrating, or bypassing concrete walls, floors, and ceilings. KCP officials 

stated that this would be difficult and time-consuming, and the 

considerable expense would be of questionable worth for such an old 

facility. Also, the adjacent facility is located in an area susceptible to 

flooding. Further, KCP officials stated that this option presented schedule 

risks. For example, multiple tenants in the GSA facility would need to 

relocate, and any delays in their relocations could cascade to the 

renovation process. 

• Purchasing or leasing other available facilities in the Kansas City area.

KCP officials stated that they could not identify any other facilities in the 

region that were adequate for the KCP mission. 

In light of these constraints, NNSA officials determined that building a new 

facility was the best option. 

To identify a specific location for the new facility, KCP officials also told 

us that they considered nearby sites as well as sites outside of the Kansas 

City area. In particular, NNSA’s Office of Transformation asked Science 

Applications International Corporation—a support contactor—to prepare 

an independent assessment of moving the nonnuclear production facilities 

from KCP to another site in the nuclear weapons complex.16 In examining 

seven other active NNSA sites in the nuclear weapons complex, the study 

determined that Albuquerque, New Mexico, presented the highest 

potential for cost savings because Sandia—the primary design laboratory 

 

16Science Applications International Corporation, Relocation of Non-Nuclear Production to 

an Alternate Location Business Case, prepared for the National Nuclear Security 

Administration (Washington, D.C., Apr. 25, 2008). 

Page 12 GAO-10-115 Nuclear Weapons
 

for nonnuclear components––has a location there. However, the study 

concluded that constructing the new facility in Albuquerque would not 

allow NNSA to recover the cost of moving the operation—reaching a 

“break even” point—by the end of the period considered in the study—

about 20 years. The study also determined that relocating operations away 

from Kansas City would be expensive because staff would have to 

relocate, new staff would have to be trained, and critical expertise would 

be lost. Ultimately, based on KCP’s analysis, NNSA decided to build its 

new facility on an available site in Kansas City about 8 miles from the 

existing facility that is not on a flood plain. 

KCP’s Cost Evaluation Did 

Not Consider the Full Life 

Cycle Costs of the 

Proposed Facility 

To determine how to finance the construction of the new facility, KCP 

analyzed options to determine which best met NNSA’s goals and presented 

acceptably low risks. According to KCP officials, these options included 

(1) using congressional line item capital project funding, which is DOE’s 

traditional approach; (2) using a DOE lease process, which secures 

financing directly through private developers for the construction of 

facilities, but allows for a maximum 5-year lease term; and (3) using GSA’s 

leasing process. According to KCP officials, GSA’s leasing process was the 

best available financing alternative because it was the only financing 

option that could meet the NNSA Administrator’s commitment to 

Congress to operate the facility by 2012. GSA’s leasing process also led to 

the lowest overall total cost over a 20-year period and eliminated the need 

for large up-front capital outlays that Office of Management and Budget 

officials said would likely not be available for modernizing KCP. According 

to KCP officials, a 20-year lease through GSA would cost less annually 

than a lease undertaken through DOE’s lease process, which allows only a 

maximum 5-year lease. 

The GSA lease process defines, among other things, (1) facility 

requirements; (2) how the facility should be built, such as security during 

construction; and (3) developer responsibilities for providing facility 

maintenance services over the life of the lease. For a lease on privately 

owned land, the process results in an operating lease agreement of up to 

20 years—a legal and binding contract between GSA and a developer, with 

ownership remaining with the developer. KCP estimated that the GSA 

lease option would cost about $4.762 billion, which includes estimated 

annual operating costs, onetime relocation costs, capital equipment, and 

annual lease payments of about $43 million beginning in fiscal year 2011 

and continuing through fiscal year 2030. In contrast, KCP’s total estimated 

cost for constructing the facility using congressional line item capital 

project funding is about $4.875 billion, which includes the same types of 

Page 13 GAO-10-115 Nuclear Weapons
 

costs plus construction costs, but excludes annual lease payments because 

NNSA would own the facility.17 KCP determined that DOE third-party 

financing was not viable because the process was new and unproven and 

offered only a short-term lease of 5 years, which KCP officials believed 

would likely result in higher annual lease costs because potential 

developers would have difficulty obtaining financing for such a short-term 

lease at a reasonable cost. As a result, KCP did not develop a total 

estimated cost based on a 5-year lease using DOE’s process of obtaining 

third-party financing. Table 1 shows KCP’s comparison of the two KCP 

options it determined would pose the lowest risk to implement—the GSA 

lease and DOE line-item project—revealing that the GSA lease is less 

costly than line-item funding by over $100 million. 

Table 1: KCP’s Comparison of Financing Options 

Dollars in billions 

Financing 

option 

Meets NNSA’s complex 

transformation goals 

Meets NNSA’s 

schedule 

commitments to 

Congress 

Total 

estimated 

costa

GSA lease Yes Yes $4.762

Congressional 

line item capital 

project funding 

Yes No 4.875

Source: GAO analysis of KCP data. 

a

KCP’s total estimated cost is presented as the net present value in fiscal year 2006 dollars, with GSA 

lease payments beginning in fiscal year 2011 and ending in fiscal year 2030—a 20-year period. 

KCP’s estimate also includes costs for the 5 years preceding commencement of the lease payments. 

However, KCP did not compare alternatives using the total costs over the 

expected life of the proposed KCP facility—the full life cycle costs; 

therefore, NNSA cannot be certain whether other alternatives might result 

in lower longer-term costs. KCP limited its analysis of future costs to 20 

years after lease payments begin, consistent with the longest lease term 

allowed under the GSA option and the longest period for which NNSA was 

willing to commit to under its current KCP relocation approach. However, 

20 years is far shorter than the useful life of a production facility that is 

properly maintained; the current KCP facility has operated for more than 

60 years. In addition, although requirements may change in the future, 

current nuclear weapons production requirements justify the need for KCP 

 

17The congressional line item capital project costs were adjusted to account for the 

estimated residual value of the facility after 20 years—about $130 million. 

Page 14 GAO-10-115 Nuclear Weapons
 

manufacturing capabilities for at least another 32 years. Although leasing a 

facility for 20 years through GSA is less costly than leasing over shorterterm periods, leasing is usually more costly over the long term than 

constructing and owning a facility. NNSA and KCP officials acknowledged 

that while leasing a facility through GSA under a 20-year scenario is less 

costly than a line item project, it can be more costly over a longer-term 

scenario—possibly even beginning at about 22 years into the lease. 

In early 2009, DOE’s Office of Cost Analysis reviewed KCP’s relocation 

project. Although ultimately supporting NNSA’s decision to lease a new 

facility, DOE’s review found KCP’s cost analysis to be biased toward the 

leasing option. DOE’s review noted that while leasing is more affordable 

up front, it is more costly over time, particularly since the government 

tends to occupy facilities for long periods of time and must pay relocation 

costs when the lease terms expire or negotiate new leases and continue 

making lease payments. KCP’s cost analysis, being limited to 20 years, 

precludes including either of these costs, whereas a full life cycle cost 

analysis would have included both relocation and continuing lease costs. 

KCP officials stated that limiting their analyses to 20 years is appropriate 

and is consistent with NNSA’s overall approach for KCP’s transformation. 

As part of its goals to develop a more adaptable nuclear infrastructure, 

NNSA determined that 20 years is the longest period for which it would be 

willing to commit under the current KCP relocation approach. NNSA 

officials stated that it is conceivable that the nation’s entire nuclear 

stockpile, its nuclear strategy, or both could be obsolete by 2030 and a 

new strategy would apply. However, NNSA’s weapons program manager 

for the W76 and W88 told us that current nuclear weapons production 

requirements for these two warhead types justify the need for KCP 

manufacturing capabilities until at least 2042. He added that since some 

threat to the United States will always exist, a new project will likely 

replace the W76 and W88 if they are ever taken out of service, thus 

justifying the need for KCP’s manufacturing capabilities even beyond 2042. 

Page 15 GAO-10-115 Nuclear Weapons
 

KCP Is Taking Steps 

to Ensure 

Uninterrupted 

Production, Including 

Efforts to Address 

Scheduling Problems 

We Identified 

KCP is initiating several key actions to help ensure that components are 

produced without delay or interruption, such as producing components 

before the move to compensate for periods of time when production will 

be halted and coordinating with design laboratories that will help to 

requalify equipment after the move. However, KCP’s relocation schedule—

which is critical to ensuring that the move does not disrupt production—

did not initially adhere to all of GAO’s best practices for schedule 

development. While KCP officials have taken steps to address some of 

these problems, the schedule still has some shortcomings. 

KCP Is Initiating Several 

Key Actions to Help 

Ensure That Components 

Are Produced without 

Delay or Interruption 

In preparation for KCP’s 18-month move to its new facility, KCP officials 

have developed plans to ensure that it can continue to provide 

components for the nuclear weapons stockpile as scheduled. In 2007, KCP 

hired a professional moving company to develop a high-level strategy to 

minimize the duration, costs, and disruptions associated with the move. 

This strategy included major milestones and estimated time frames for 

moving each department within KCP. Based on these estimates, KCP has 

begun to produce components that it will store or deliver before and 

during the move to ensure that it can meet delivery requirements when 

production is halted to move, set up, and requalify equipment at the new 

facility. KCP officials conducted long-range planning to determine the 

demand for components through 2016, which helped officials estimate the 

number of components to produce in advance. As of June 2009, KCP 

officials stated that they are largely on schedule for producing these 

additional components. 

Moreover, KCP has established a formal program to capture and preserve 

information about certain production processes and ensure that 

production capabilities are not lost. While KCP does not plan to record 

information about all processes, officials developed more than 60 step-bystep videos, overview videos, and notes from subject matter experts. This 

knowledge preservation program focuses on processes that are difficult to 

develop or involve key personnel who are retiring or otherwise leaving 

through other forms of attrition, as well as processes that KCP uses 

infrequently or plans to outsource. These efforts are designed to allow 

KCP to transfer knowledge and resume internal production of outsourced 

components, if necessary. Our March 2009 report on NNSA’s stockpile life 

extension program illustrates the importance of maintaining such 

Page 16 GAO-10-115 Nuclear Weapons
 

information.18 Specifically, at another NNSA site, we found that officials no 

longer knew how to manufacture a key material needed to refurbish the 

W76 warhead because the site had kept few records of the process when 

the material was made in the 1980s, and almost all staff with expertise on 

its production had retired or left the agency. NNSA’s efforts to address this 

information gap resulted in $69 million in cost overruns and a schedule 

delay of at least 1 year that presented significant logistical challenges for 

the Navy. KCP’s knowledge preservation program should help avoid 

similar problems. 

In addition, KCP has developed a strategy to estimate the cost and time 

needed to requalify production and testing equipment after the move, 

which will help to ensure that the equipment continues to produce 

components of the same quality as before the move. In particular, KCP 

officials have identified all equipment that they believe will need to be 

requalified and determined how the move will affect this equipment, which 

in turn will affect how extensive requalification efforts will need to be. For 

example, officials assessed how the production process will change as a 

result of KCP purchasing new equipment or outsourcing production. 

Changes in environment, such as temperature and humidity levels, could 

also affect equipment and production. KCP officials also estimated how 

long requalification will likely take, based on previous requalification 

efforts, and have been meeting with design laboratories since July 2006 to 

plan and budget requalification efforts and to communicate overall plans 

for KCP’s transition. 

However, officials at Sandia stated that they are concerned that they may 

not have sufficient funds to assist with requalification activities within 

KCP’s scheduled time frames. KCP officials estimate that requalification 

activities will cost KCP about $20 million, while Sandia estimates that their 

support of requalification activities will cost Sandia an additional 

$40 million for fiscal years 2008 through 2013.19 In fiscal year 2009, the 

design laboratories’ budgets did not include funding for requalification at 

KCP; the laboratories have requested funding for fiscal year 2010. KCP 

officials acknowledge that if funding is not available, requalification 

 

18GAO, Nuclear Weapons: NNSA and DOD Need to More Effectively Manage the Stockpile 

Life Extension Program, GAO-09-385 (Washington, D.C.: Mar. 2, 2009). 

19Lawrence Livermore and Los Alamos National Laboratories will also conduct 

requalification activities; however, Sandia maintains a primary role in conducting these 

activities. 

Page 17 GAO-10-115 Nuclear Weapons
 

efforts will be delayed, which will significantly delay its production 

schedule. Nevertheless, KCP believes that NNSA is committed to the KCP 

transition and will provide adequate funding to the design laboratories to 

support requalification. Accordingly, KCP is continuing to coordinate with 

the laboratories to estimate requalification needs. 

KCP officials have also made plans to provide additional capability and 

capacity at the new facility to produce components that implement new 

technology or to reestablish the production of outsourced components if 

necessary. Specifically, KCP designed the facility so that it can add second 

and third work shifts, which may allow it to increase production of some 

components if needed. KCP has also dedicated about 10 percent of the 

facility’s total square footage—about 100,000 square feet out of the 

facility’s 1 million total square feet—to unused space that can be quickly 

and cost effectively converted for new capabilities or expansion of 

existing ones. KCP officials stated that they designed the new facility with 

a more open manufacturing space and modular utility systems so that it 

can be quickly and inexpensively reconfigured to adapt to changing 

production needs. In contrast, reconfiguring KCP’s current facility would 

require extensive modification of electrical, heating, and cooling systems, 

including moving, penetrating, or bypassing concrete walls, floors, and 

ceilings. KCP has also retained the capability to produce certain 

components that it currently outsources, which will allow it to reverse the 

decision to outsource those components and more quickly resume 

production internally if necessary. For other components, however, KCP 

officials have determined that there are many private suppliers with 

similar production capabilities. As a result, KCP will not retain the ability 

to produce these components or execute such processes. 

KCP plans to reduce the size of its available stored inventory space from 

nearly 300,000 square feet to 60,000 square feet—a total reduction of about 

240,000 square feet, or about 80 percent. This will be accomplished by 

higher-density storage and disposition of obsolete and surplus inventory. 

KCP officials are currently in the process of identifying surplus inventory, 

which they define as items that have not been used in the last 2 years or 

have no demand anticipated in the next 10 years. As of February 2009, 

KCP had identified from 8,000 to 9,000 parts as surplus inventory. Sandia 

design engineers are concerned that KCP may discard critical equipment 

that could be expensive and difficult to re-create if it were needed again in 

the future. However, according to KCP officials, most equipment stored at 

KCP is so outdated that it would cost more to repair the equipment than 

the equipment is worth. Moreover, KCP officials said that they have 

consulted periodically with design engineers as part of the review process 

Page 18 GAO-10-115 Nuclear Weapons
 

and that before disposal of items is authorized, NNSA will distribute a list 

of excess items to all nuclear weapons complex sites to confirm that KCP 

does not need to retain these items. KCP officials said that they plan to 

continue to coordinate with the design laboratories as they reduce 

inventory. 

KCP Has Begun Taking 

Steps to Address Some 

Scheduling Problems We 

Identified 

As part of KCP’s plans to ensure a smooth transition to its new facility, 

KCP officials are working to develop a comprehensive project schedule 

that details when relocation activities will occur, how long they will take, 

and how they are interrelated. The schedule provides a road map for the 

move and a means for gauging progress and identifying potential 

problems. KCP officials stated that they have not established a formal 

baseline of the schedule because the construction portion of the schedule 

is not firm.20 We assessed KCP’s initial schedule in February 2009 and 

found that KCP did not fully adhere to GAO-identified best practices for 

schedule development. We assessed its revised schedule in July 2009 and 

found that KCP officials have taken steps to address some of the problems 

identified in our initial review, but that the schedule still has some 

shortcomings. 

We assessed KCP’s relocation schedule based on the nine best practices 

we have identified for effective schedule estimating: (1) capturing key 

activities, (2) sequencing key activities, (3) assigning resources to key 

activities, (4) establishing the duration of key activities, (5) integrating key 

activities horizontally and vertically, (6) establishing the critical path for 

key activities, (7) identifying “float time”—the time that activities can slip 

before the delay affects the completion date, (8) performing a risk analysis 

of the schedule, and (9) updating the schedule using logic and durations to 

determine dates.21 Most of these practices are also identified by DOE in 

recent guidance on establishing performance baselines.22 Appendix II 

 

20KCP officials initially expected to establish a formal baseline for the schedule in April 

2009, in conjunction with the lease award, which did not occur at that time. Subsequently, 

KCP officials have delayed establishing the schedule baseline and currently expect to have 

one established by fall 2009. 

21GAO-09-3SP. 

22Department of Energy, Performance Baseline Guide. Although there is not a one-to-one 

correlation, many of the GAO-identified best practices, are also suggested schedule 

development practices in DOE’s Performance Baseline Guide. 

Page 19 GAO-10-115 Nuclear Weapons
 

contains more details on GAO’s best practices for scheduling and a 

description of our assessments. 

Our assessment of KCP’s February 2009 schedule revealed that KCP did 

not meet three of these best practices and only partially met five.23 For 

example, we found that KCP’s schedule did not reflect resources—such as 

labor, material, or overhead—required to complete each activity, which is 

important to determine the feasibility of the schedule based on available 

resources. Further, KCP officials told us that they did not intend to 

conduct a risk analysis of the schedule, which, according to best practices, 

is important to predict the level of confidence in meeting a program’s 

completion date and to identify high-priority risks. In addition, our 

assessment revealed that KCP established excessively long time frames for 

some very broad activities—275 activities had time frames of over 200 

days in length. According to best practices, activity durations should be as 

short as possible. 

In April 2009, we provided KCP and NNSA officials with our assessment of 

the February schedule. Although KCP officials provided additional context 

about their particular schedule situation, they acknowledged that the prebaselined schedule was not yet complete and expressed an intention to 

work toward ensuring that the relocation schedule better conforms to 

GAO-identified best scheduling practices. For example, KCP officials 

acknowledged that they did not assign resources to activities in the 

schedule as suggested by GAO best practices, but explained that they 

planned to assign resources to certain activities in the schedule as well as 

track resources using other management systems as they complete a more 

detailed relocation plan in fiscal year 2011. KCP officials also explained 

that scheduling is time-intensive, and that the schedule is updated and 

improved daily. For example, KCP officials told us that they are in the 

process of reducing the number of activities with excessively long 

durations by, among other things, splitting longer duration activities into 

more detailed and shorter tasks as more information becomes available. 

KCP officials further explained that most of the activities with long 

durations are well into the future and cannot be accurately broken into 

smaller segments until some near-term activities are completed. In 

addition, KCP officials explained that although they have not performed a 

 

23In our February 2009 review, we had not completed our assessment of whether KCP’s 

schedule had captured all key activities because we were missing key information and 

needed additional clarification. KCP supplied additional information and clarification for 

our July 2009 review. 

Page 20 GAO-10-115 Nuclear Weapons
 

formal risk analysis on the schedule, they use alternative methods to 

identify and reduce scheduling risks. For example, KCP officials told us 

that scheduling officials consult subject matter experts to provide 

estimates for the duration of activities, which they believe will be 

successfully executed within those time frames. Further, KCP officials 

asserted that they are monitoring schedule risks at the project and 

program levels through a separate database. 

In our review of KCP’s revised schedule in July, we found that KCP had 

taken steps to address some of the problems we identified; however, the 

schedule still does not fully adhere to GAO’s best practices. Specifically, 

KCP improved the schedule in several areas. For example, KCP’s February 

schedule did not fully resolve some key activities on the critical path—the 

path of work that must be completed as planned if the projected 

completion date is to be met. To correct this, KCP’s July schedule included 

additional information on the lease award and other activities in the 

critical path that more realistically depicts KCP’s overall expected 

completion date for relocation—October 2013, about a 1-year delay from 

NNSA’s original commitment to Congress. However, a few practices that 

KCP’s initial schedule either did not meet or only partially met did not 

significantly improve. For example, although KCP officials monitor 

schedule risks in a separate database, they do not plan to conduct a risk 

analysis using statistical analysis techniques as suggested by GAOidentified best practices. Table 2 summarizes the progress KCP made from 

February through July 2009. 

Table 2: KCP’s Progress in Meeting GAO-Identified Best Practices for Scheduling 

Criterion February 2009 July 2009 

Capturing all activities a Partially meets 

Sequencing all activities Does not meet Partially meets 

Assigning resources to all activities Does not meet Does not meet 

Establishing the duration of all activities Partially meets Mostly meets 

Integrating schedule activities horizontally and vertically Partially meets Mostly meets 

Establishing the critical path for all activities Partially meets Mostly meets 

Identifying float between activities Partially meets Partially meets 

Conducting a schedule risk analysis Does not meet Does not meet 

Updating the schedule using logic and durations 

to determine the dates 

Partially meets Mostly meets 

Source: GAO assessment of KCP’s relocation schedule plan as of February and July 2009. 

a

We did not assess this best practice in February 2009 because we needed KCP to first clarify details 

on the data we received. We obtained additional data and clarification for the July 2009 assessment. 

Page 21 GAO-10-115 Nuclear Weapons
 

The timely implementation of KCP’s relocation schedule is critical to 

ensure that the relocation occurs on time and does not risk disruption of 

component production. In particular, the relocation is scheduled to occur 

during a large production run for the W76 life extension program, which 

began 2 years ago and is scheduled to last at least 10 more years. An NNSA 

W76 program manager stated that the relocation was planned without 

substantial input from him and that KCP may have missed opportunities to 

reduce risks associated with the relocation. For example, if officials had 

delayed the relocation by 2 years as he would have recommended, KCP 

could have reduced potential disruptions to the life extension program for 

the W76 nuclear warhead. Moreover, the program manager stated that any 

schedule delays during the relocation will likely cascade to an already 

tight production and delivery schedule. 

KCP has begun taking steps to address outsourcing risks, such as potential 

interruptions to supply sources; unanticipated price increases; and quality 

assurance problems, including counterfeiting and sabotage. However, KCP 

lacks a formal, risk-based approach to identifying and mitigating risks 

posed by components and technologies, including weapons-related design 

drawings; unique production processes; and information that although 

mostly unclassified, could be used by adversaries to develop or advance 

their nuclear capabilities. 

KCP Has Begun 

Taking Steps to 

Mitigate Some 

Outsourcing Risks but 

Could Better 

Safeguard 

Technologies That 

Pose Nuclear 

Proliferation Risks 

KCP Has Begun Taking 

Steps to Mitigate Many 

Risks of Outsourcing 

Sandia design engineers that we interviewed identified several general 

risks of outsourcing that could jeopardize the quality or safety of nuclear 

weapons or affect KCP’s schedule or costs, and KCP has begun taking 

steps that seek to mitigate many of those risks. Specifically: 

• Loss of a supplier. Sandia officials stated that relying on one supplier to 

produce a particular component can be risky because if a supplier can no 

longer produce components for KCP because of business failures, loss of 

interest in working with KCP, a natural disaster, or other reasons, 

production may be delayed while KCP identifies an alternative supplier or 

reestablishes production capabilities on-site. To mitigate this risk, KCP is 

developing a pool of capable suppliers for outsourced components so that 

Page 22 GAO-10-115 Nuclear Weapons
 

it can quickly move production to another qualified supplier, if necessary. 

For example, when KCP officials decided to outsource a plating process—

the process of coating electrical and mechanical products to improve their 

mechanical properties and protect against corrosion—they identified 1 

primary supplier and 4 backup suppliers out of a potential pool of more 

than 2,000 suppliers that could be called upon if the primary supplier could 

no longer meet KCP’s needs. KCP officials told us that they also review 

potential suppliers’ financial stability and eliminate those companies with 

financial concerns from consideration. 

• Price increases. According to Sandia officials, suppliers could increase 

their prices, which could cause an unanticipated increase in KCP’s 

manufacturing costs. To mitigate this risk, KCP officials told us that they 

include cost thresholds in their long-term purchase agreements and 

validate the reasonableness of the component price by comparing it with 

those of direct competition. 

• Quality assurance problems—including counterfeiting and sabotage.

Sandia officials stated that KCP is likely to have less direct control over 

outsourced production processes, which could lead to quality assurance 

problems, including an increased risk of counterfeiting and sabotage. KCP 

has, on occasion, experienced poor quality results from suppliers, which 

has required rework or changes in suppliers. Sandia officials also stated 

that they are increasingly concerned about the potential for KCP to 

unintentionally purchase counterfeit parts. For example, an expansive 

black market exists for some microelectronics, particularly in Southeast 

Asia. Sandia officials stated that counterfeit parts are becoming 

increasingly more sophisticated, thereby requiring more expertise to 

detect. Sandia officials also stated that suppliers may sabotage a 

component to undermine the reliability of a nuclear weapon. To mitigate 

these risks, KCP officials, sometimes accompanied by design engineers, 

have conducted periodic quality reviews, including scheduled and 

unannounced visits to some suppliers’ production sites. According to KCP 

officials, the frequency and type of these reviews depends on, among other 

things, the components’ degree of customization and the ease of 

inspection—in some cases, components must be destroyed while 

undergoing inspection, which is known as destructive testing. KCP 

officials have reportedly observed some suppliers’ production processes 

and overall quality of operations to verify that suppliers adhere to industry 

standards and follow proper production techniques, such as using 

appropriate levels of electrical voltage when manufacturing certain 

components. KCP officials also have tested components for problems with 

quality, including counterfeiting and sabotage. However, Sandia officials 

stated that testing might not always effectively reveal counterfeit parts or 

Page 23 GAO-10-115 Nuclear Weapons
 

attempted sabotage. Although KCP officials said they do not outsource 

components that have the potential for sabotage that their tests cannot 

detect, KCP’s efforts to restrict outsourcing of these components is not 

infallible. Although KCP’s outsourcing process considers the security of a 

component and there is no evidence that sabotage has occurred in any 

components KCP has procured, KCP’s outsourcing process lacks criteria 

and steps for determining and mitigating the risk of a component being 

counterfeited or sabotaged—a crucial feature of an effective risk-based 

approach. KCP officials have previously outsourced highly customized and 

preassembled components that cannot be easily inspected, potentially 

increasing the chance of counterfeited or sabotaged components going 

undetected. 

KCP Has Not Conducted a 

Systematic Review to 

Identify Outsourced 

Technologies That Pose 

Nuclear Proliferation Risks 

KCP has not implemented a systematic review process to identify specific 

components, technologies, and information that although not considered 

to be classified national security information, are subject to export 

controls and could be used to advance the nuclear capabilities of 

adversaries. Although DOE guidance states that KCP should conduct a 

review to identify the components, technology, and information that could 

potentially advance the nuclear capabilities of potential adversaries, KCP 

and NNSA’s site office have not conducted such a review. KCP and NNSA 

officials stated that they have not conducted such a review because 

NNSA’s current interpretation of export control regulations is that all 

components used in nuclear weapons should be considered subject to the 

regulations. If this were not the case, the officials stated that it would be 

both difficult and time-consuming to make individual export control 

determinations for each of the many components produced or outsourced 

at KCP given the officials’ perception of the lack of clarity in the 

regulations and would add little value to their current approach. 

Specifically, DOE issued guidance in 1999 to help DOE and its contractors 

to implement a consistent policy regarding transfers of unclassified 

equipment, materials, and technology that could adversely affect U.S. 

security or lead to the proliferation of weapons of mass destruction. This 

guidance specifies the need for an export control review to identify such 

equipment, materials, and technology, among other things, that could pose 

proliferation risks.24 NNSA officials stated that although these guidelines 

are not requirements, they would be appropriate for KCP to use in its 

 

24Department of Energy, Office of Nonproliferation and National Security, Office of Arms 

Control and Nonproliferation, Nuclear Transfer and Supplier Policy Division, Guidelines 

on Export Control and Nonproliferation, July 1999. 

Page 24 GAO-10-115 Nuclear Weapons
 

outsourcing decisions. Furthermore, the DOE guidance states that the 

NNSA site office manager at KCP is responsible for ensuring that KCP 

performs export control reviews. 

As outsourcing increases and additional individuals gain access to nuclear 

weapons design and production information, potential adversaries could 

gain access to information that could be used to advance their own 

nuclear capabilities. KCP officials estimate that about 10 percent of the 

components KCP produces or procures would likely be considered high 

risk if a program of review existed, and acknowledged that they have not 

conducted a review to systematically evaluate the level of risk for each 

component. Instead, KCP officials stated that they treat each component 

and the associated design information as if they pose equal proliferation 

risks and are subject to International Traffic in Arms Regulations—the 

regulations controlling the exports of munitions items and technologies.25

As such, items that pose little apparent risk of contributing to potential 

adversaries’ development of nuclear weapons, such as a commercially 

available screw, are considered to be the same level of risk as complex 

components, such as a mechanism designed to arm nuclear weapons. 

As a precautionary measure, KCP officials stated that they produce and 

assemble most of the more complex and higher-level components inhouse, reserving outsourcing for components that are more commercially 

available, less complex, and at lower stages of assembly. Nevertheless, we 

observed that KCP officials currently outsource the production and 

assembly of several components that they determined to be of higher 

complexity and assumed the components were subject to export control 

requirements but did not conduct a systematic assessment of the 

components’ actual proliferation risk. Without a systematic review process 

to identify which components and technologies—including weaponsrelated design drawings, unique production processes, and other 

information—pose greater threats, KCP may be missing opportunities to 

restrict certain outsourcing activities and mitigate the risk associated with 

sharing critical information that could be used use to develop or enhance 

an adversary’s nuclear weapon capabilities. 

Furthermore, KCP’s primary export control measure rests on its suppliers’ 

compliance with a contract clause outlining their responsibility to abide by 

export control laws and safeguard nuclear weapon component production 

 

25The International Traffic in Arms Regulations appear at 22 C.F.R. §§ 120-130 (2009). 

Page 25 GAO-10-115 Nuclear Weapons
 

and design information. The contract clause informs external suppliers of 

the potential applicability of export regulations and notifies suppliers that 

they must report any information that may require an export license or 

other forms of approval. For example, KCP outlines expectations for its 

suppliers, including to (1) disclose their intent to export a component or 

hire foreign nationals that might be exposed to the component or its 

design-related information and (2) fully comply with all export control 

laws and regulations. In some instances, self- reporting has allowed KCP 

to identify and mitigate a risk. For example, when one of KCP’s domestic 

suppliers moved its operations to Mexico, KCP officials were faced with 

the decision whether to switch suppliers or retain the now foreign-based 

supplier. To mitigate concerns about working with a foreign-based 

company, KCP officials told us that they reevaluated the design of the 

component and decided to continue purchasing less-sensitive parts of the 

component—such as a type of connector—from that supplier, but found 

another domestic-based supplier to produce other more sensitive parts of 

the component—such as a particular type of cable. KCP officials told us 

that they took these actions after the supplier reported its relocation plans 

to KCP, as required in its contract. However, according to Sandia officials, 

supplier self-reporting has not always been a reliable approach. In another 

recent case, Sandia learned that a supplier was foreign owned only after it 

had already procured parts from that supplier, which led to additional 

costs, schedule delays, and other problems that eventually forced Sandia 

to produce the component in-house. 

DOE and NNSA lack clear and up-to-date export control guidance. As a 

result, NNSA has not clearly communicated to KCP its expectations of 

what a systematic and consistent export control review process should 

include, or ensured that the specific components, technologies, and 

information that could be used to advance the nuclear capabilities of 

potential adversaries are identified. For example, NNSA officials that we 

spoke with noted that DOE’s 1999 export control guidance is outdated. In 

2005, NNSA officials determined that DOE’s guidance needed to be 

updated, but the guidance revision was never completed. In addition, 

because the export control guidance is not tailored for NNSA production 

and laboratory sites, NNSA lacks firm criteria for conducting oversight of 

export control activities. KCP officials further explained that DOE’s 

guidance is not helpful in interpreting the Commerce Control List, which is 

made up of broad categories that are not always specific to nuclear 

weapons technologies. For example, the Commerce Control List identifies 

sensors as a controlled technology; however, according to KCP officials, 

several items may fit that category, including items that could be used by 

potential adversaries to advance their own nuclear weapon capabilities as 

Page 26 GAO-10-115 Nuclear Weapons
 

well as those that would not pose such a threat, such as a simple 

thermometer or rain gauge. Further, KCP officials stated that DOE’s 

guidance does not clearly define laboratories’ and production sites’ 

responsibilities or provide a clear determination of who is responsible for 

identifying the components that are subject to export control. In 

particular, both KCP officials and design engineers told us that it is unclear 

whether KCP or the laboratories should determine the level of risk and 

how that risk should be communicated, such as how each design drawing 

should be labeled. KCP officials suggested that if design engineers 

identified the portions of the design drawing that may require more careful 

export control consideration, it would help them determine effective 

export risk mitigation steps. One KCP official stated that there is also 

considerable risk in asserting that a component is not subject to 

International Traffic in Arms Regulations, especially given the sensitivity 

and risk-averse nature of the nuclear weapons community. As a result, 

KCP has defaulted to treating all components as being of equal risk and 

subject to these regulations and has taken no specific actions to identify 

and mitigate the greatest risks. 

KCP has made substantial progress toward achieving NNSA’s overall goals 

to modernize its nonnuclear production facility and ensure continued 

production of quality components essential to maintaining the U.S. nuclear 

weapons stockpile. However, shortcomings in NNSA’s oversight of KCP’s 

relocation may offer lessons for future modernization efforts at its nuclear 

weapons facilities. In particular, NNSA allowed KCP to limit its cost 

analysis to a 20-year life cycle that has no relationship with known 

requirements of the nuclear weapons stockpile or the useful life of a 

production facility that is properly maintained, and did not require that 

KCP consider the full useful life of the facility in its analysis. As a result, 

NNSA’s financing decisions were not as fully informed and transparent as 

they could have been. If KCP had quantified potential cost savings to be 

realized over the longer useful life of the facility, NNSA may have made a 

different decision. Further, because NNSA has not ensured that KCP’s 

relocation schedule fully complies with DOE schedule development 

guidance and GAO-identified scheduling best practices, there is a potential 

for delays. A delay in KCP’s relocation could affect the timely delivery of 

replacement components needed to maintain a reliable nuclear weapons 

stockpile, which, in turn, could have a detrimental effect on national 

security. Moreover, DOE and NNSA lack clear and up-to-date export 

control guidance that articulates NNSA’s expectations of what a 

systematic and consistent export control review process should include. 

Because of this, KCP is not required to take—and therefore has not 

Conclusions 

Page 27 GAO-10-115 Nuclear Weapons
 

taken—proactive steps to identify specific components, technologies, and 

information that could be used to advance the nuclear capabilities of 

potential adversaries. Furthermore, without export control requirements 

that are designed specifically to meet NNSA production and nuclear 

weapons design laboratory needs, and an effective mechanism for 

ensuring enforcement of these requirements within NNSA, NNSA site 

offices are less able to 

(1) mitigate the risks associated with outsourcing components and 

(2) exercise effective oversight. 

We recommend that the Secretary of Energy take the following five 

actions to strengthen NNSA’s oversight practices and current and future 

facility modernization efforts. 

Recommendations for 

Executive Action 

To improve the transparency and usefulness of cost analyses prepared for 

future NNSA nuclear facilities modernization projects, we recommend that 

the Secretary of Energy direct the Administrator of NNSA to ensure that 

life cycle cost analyses include a thorough and balanced evaluation of 

short- and long-term construction and financing alternatives. Such 

analyses should consider the full useful life of the facility rather than the 

20-year requirement for GSA leases or any predetermined length of time 

that might produce results that favor one option over another. 

To better manage the KCP relocation schedule, we recommend that the 

Secretary of Energy direct the Administrator of NNSA to ensure that KCP’s 

operating contractor revise the KCP relocation schedule so that it is 

consistent with DOE schedule development guidance and GAO-identified 

scheduling best practices, as outlined in appendix II. 

Because of the importance of mitigating the risks of outsourcing nuclear 

weapons components and other information that if exported, might allow 

potential adversaries to develop or advance their nuclear capabilities, we 

also recommend that the Secretary of Energy direct the Administrator of 

NNSA to take immediate action to: 

• Assess the effectiveness of NNSA’s oversight of KCP’s current export 

control and nonproliferation practices and, if appropriate, initiate 

corrective actions to strengthen that oversight. 

• In collaboration with the Departments of State and Commerce, replace or 

supplement DOE’s July 1999 Guidelines on Export Control and 

Nonproliferation with guidelines, or another form of directive as deemed 

Page 28 GAO-10-115 Nuclear Weapons
 

appropriate by the agencies, that (1) clarify expectations for export 

control reviews to specifically meet NNSA production and nuclear weapon 

design laboratory needs and (2) contain an effective mechanism for 

ensuring enforcement of these export control guidelines within NNSA. 

• Direct the KCP operating contractor to develop and implement a formal 

risk-based review process in cooperation with the nuclear weapons design 

laboratories that (1) identifies specific components, technologies, 

production processes, and related information that if exported, might 

allow potential adversaries to develop or advance their nuclear 

capabilities and (2) includes steps for mitigating these risks, particularly 

for considering whether or how to outsource these items. 

We provided NNSA with a draft of this report for its review and comment. 

In its written comments, NNSA states that our review was thorough and 

that we appropriately recognized NNSA’s progress toward achieving the 

overall goals to modernize its production facility. NNSA also provided 

additional information on its overall approach for modernizing the KCP 

facility. NNSA generally agreed with our five recommendations and 

outlined some initial actions that it expects to take to address each of 

them. 

Agency Comments 

and Our Evaluation 

NNSA provided its most substantive comments on our findings and 

recommendations concerning export control. Specifically, although 

agreeing with our three export control recommendations, NNSA stated 

that it will delay action on them until an export control working group that 

it created in July 2009 completes its analysis of export licensing and other 

related issues. While we believe NNSA’s formation of a working group to 

study these export control issues is a positive first step toward improving 

its export control practices, it is important that NNSA not unduly delay 

taking action to mitigate nuclear proliferation risks associated with 

outsourcing nuclear weapons components and information. 

Regarding our finding that KCP lacks a formal, risk-based approach to 

safeguard components and technology that could be used by potential 

adversaries, NNSA commented that KCP officials do not feel that 

additional outsourcing increases risk or that a more rigorous review would 

necessarily lead to different outsourcing decisions. However, as our draft 

report noted, without knowing which components pose the greatest risks, 

NNSA cannot be certain that it is focusing its efforts to safeguard the 

highest-risk components and technologies in the most effective manner. 

Page 29 GAO-10-115 Nuclear Weapons
 

With regard to our recommendation that NNSA assess the effectiveness of 

its oversight of KCP’s current export control and nonproliferation 

practices, NNSA responded that the correct export control requirements 

are being applied through its management and operating contract for KCP. 

Specifically, the management and operating contractor (Honeywell) uses 

standard export compliance clauses in supplier purchasing agreements to 

put suppliers on notice as to the requirements applicable to them. 

However, in our view, simply relying on the use of such clauses is not 

oversight. Because NNSA has the primary responsibility of preventing the 

proliferation of nuclear weapons, it is important that NNSA consider 

adopting a risk-based approach that could enhance existing export control 

requirements. 

NNSA’s comments are reprinted in appendix III. 

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the appropriate 

congressional committees; the Secretaries of Energy, State, and 

Commerce; the Administrator of NNSA; and the Director, Office of 

Management and Budget. The report also will be available at no charge on 

the GAO Web site at http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact 

me at (202) 512-3841 or aloisee@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made major contributions to this report are 

Gene Aloise 

listed in appendix IV. 

Director, Natural Resources and Environment 

Page 30 GAO-10-115 Nuclear Weapons
Appendix I: Objectives, Scope, and 

Methodology 

Page 31 GAO-10-115 

Appendix I: Objectives, Scope, and 

Methodology 

Our objectives were to determine (1) how the Kansas City Plant (KCP) 

developed plans for modernizing its facility, (2) actions KCP has taken 

actions to ensure uninterrupted production of components needed to 

support the nuclear weapons stockpile during and after the transition to 

the new facility, and (3) actions KCP has taken to address the risks and 

potential consequences of increased outsourcing of nonnuclear 

components. 

To determine how KCP developed plans for modernizing the facility, we 

reviewed documents from the National Nuclear Security Administration 

(NNSA) and Honeywell Federal Manufacturing and Technologies 

(Honeywell), which manages and operates the KCP facility for NNSA, that 

describe the project’s goals, approach, and rationale for key decisions on 

relocating and outsourcing the production of nonnuclear components. We 

also interviewed officials at NNSA’s Kansas City Site Office, Honeywell, 

relevant subcontractors, and component design laboratories about KCP’s 

relocation plans, approach, and time frames, including how the relocation 

might affect continued production of high-quality components and the 

risks posed by the current approach. Under our long-standing policy of not 

addressing issues in ongoing litigation, we did not evaluate KCP’s analysis 

of relocation alternatives because a lawsuit was filed in October 2008 that, 

among other things, challenged the extent and adequacy of the 

Department of Energy’s (DOE) consideration of alternatives to its plans 

for replacing the KCP facility.1

To determine the actions KCP has taken to ensure uninterrupted 

production of components needed to support the nuclear weapons 

stockpile during and after the transition to the new facility, we reviewed 

agency and contractor documents describing transition plans. We talked 

to officials at Sandia National Laboratories (Sandia) in New Mexico—

which designs the nonnuclear components that are produced at KCP—

about the impact of KCP’s plans on the quality, reliability, and future 

support of the nuclear weapons stockpile. We evaluated the reliability of 

KCP’s relocation schedule to determine the extent to which it captures key 

activities, is correctly sequenced, establishes the duration of key activities, 

is integrated, and has an established reliable critical path, among other 

things. We conducted an initial assessment in February 2009, and 

conducted a second assessment in July 2009 to evaluate the extent to 

 

1

Natural Resources Defense Council v. Samuel W. Bodman, No. 1:08-cv-01709 (D. D.C. 

filed Oct. 8, 2008). 

 Nuclear Weapons 
Appendix I: Objectives, Scope, and 

Methodology 

which the schedule improved over time. We based our assessment on 

GAO-identified best practices associated with effective schedule 

estimating,2

 many of which are also identified by DOE in its guidance on 

establishing performance baselines.3

 To assess KCP’s schedule, we 

consulted with a scheduling expert and interviewed key program officials 

responsible for developing this schedule. 

To determine the actions KCP has taken to address the risks and potential 

consequences of increased outsourcing of nonnuclear components, we 

reviewed agency and contractor documents, including KCP’s outsourcing 

strategy and export control process. We also reviewed DOE’s Export 

Control and Nonproliferation Guidelines, as well as relevant export 

control laws and regulations. In addition, we interviewed key KCP and 

Sandia officials to understand potential risks associated with outsourcing 

and KCP’s approach for mitigating these risks, including nuclear 

proliferation risks. We met with NNSA site office officials responsible for 

overseeing KCP nuclear nonproliferation activities, and headquarters 

officials that provide guidance and nonproliferation expertise to site 

offices across NNSA. 

We conducted this performance audit from November 2008 through 

October 2009 in accordance with generally accepted government auditing 

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

obtain sufficient, appropriate evidence to provide a reasonable basis for 

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

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

 

2

GAO-09-3SP. 

3

Department of Energy, Performance Baseline Guide. 

Page 32 GAO-10-115 Nuclear Weapons
Appendix II: GAO Assessment of KCP’s 

Relocation Schedule 

Criterion Explanation 

GAO analysis – 

February 2009 

GAO follow-up analysis – 

July 2009 

Capturing all activities The schedule should reflect all 

activities as defined in the program’s 

work breakdown structure, to include 

activities to be performed by both the 

government and its contractors. 

Criteria not evaluated: The 

schedule appears to contain 

most necessary activities; 

however, we were unable to 

verify whether all activities were 

included because of incomplete 

data and the need to clarify 

details on the data we received. 

Criteria partially met: The 

schedule appears to contain 

most necessary activities; 

however, a supplemental 

dictionary that defines activities 

did not include sufficient detail 

for us to conclude that the 

schedule includes all the 

activities to be performed. The 

July schedule has a total of 

5,592 activities. 

Sequencing all activities The schedule should be planned so 

that it can meet critical program dates. 

To meet this objective, key activities 

need to be logically sequenced in the 

order that they are to be carried out. In 

particular, activities that must finish 

before the start of other activities (i.e., 

predecessor activities) as well as 

activities that cannot begin until other 

activities are completed (i.e., 

successor activities) should be 

identified. By doing so, 

interdependencies among activities 

that collectively lead to the 

accomplishment of events or 

milestones can be established and 

used as a basis for guiding work and 

Sequencing all activities 

measuring progress. 

Criteria not met: The schedule 

has an excessive amount of 

incomplete logic—where 

successor activities start before 

predecessor activities have 

completed—and an excessive 

amount of constrained tasks––

which are tasks that have a 

specific start to finish date. 

According to best scheduling 

practices, the schedule should 

use logic and durations to reflect 

realistic start and completion 

dates for program activities. 

Specifically, we found 

• 212 tasks with early start 

constraints—that is, a “start 

no earlier than” date; 

• 2,121 activities with no 

successor activities; 

• 352 activities with no 

predecessor activities; 

• 102 lags—which are the 

duration between activities 

that delay successor 

activities; and 

• 850 negative lags––which 

allow the start or finish of a 

successor activity to occur 

earlier than the start or 

finish of a predecessor 

activity. 

Criteria partially met: KCP’s 

use of constrained tasks has 

been reduced but not 

eliminated. Specifically, we 

found that since February 2009 

KCP reduced the extent to 

which the following tasks were 

constrained: 

• the number of tasks with 

early start constraints was 

reduced from 212 in 

February to 144 in the July 

schedule; 

• the number of tasks with 

no successors was 

reduced from 2,121 in 

February to 200; 

• the number of tasks with 

no predecessor activities 

was reduced from 352 in 

February to 21; 

• the number of lags was 

reduced from 102 in 

February to 21, although 

some lags are still 

excessively long—from 

240 to 422 days; and 

• the number of tasks with 

negative lags was reduced 

from 850 in February to 

20. 

Appendix II: GAO Assessment of KCP’s 

Relocation Schedule 

Page 33 GAO-10-115 Nuclear Weapons 
Appendix II: GAO Assessment of KCP’s 

Relocation Schedule 

Criterion Explanation 

GAO analysis – 

February 2009 

GAO follow-up analysis – 

July 2009 

Assigning resources to all 

activities 

The schedule should reflect what 

resources (i.e., labor, material, and 

overhead) are needed to do the work, 

whether all required resources will be 

available when they are needed, and 

whether any funding or time 

constraints exist. 

Criteria not met: The schedule 

did not include resources; 

therefore, it is not clear that this 

schedule is feasible. 

Criteria not met: KCP’s July 

schedule still does not include 

resources. Although the 

agency asserted that it has 

other systems to track resource 

use and to determine future 

resource needs, according to 

scheduling best practices, 

resources should be included 

in the schedule. 

Establishing the duration 

of all activities 

The schedule should realistically 

reflect how long each activity will take 

to execute. In determining the duration 

of each activity, the same rationale, 

data, and assumptions used for cost 

estimating should be used. Further, 

these durations should be as short as 

possible and they should have specific 

start and end dates. Excessively long 

periods needed to execute an activity 

should prompt further decomposition of 

the activity so that shorter execution 

durations will result. 

Criteria partially met: The 

schedule included 138 activities 

with over 260 days’ duration, 

which is approximately 1 year 

given a 5-day calendar. In 

addition, we found that KCP 

included 275 activities over 200 

days in length. It is difficult to 

manage activities of this length 

and to know if these are realistic 

durations or how they were 

determined. According to best 

scheduling practices, durations 

should be as short as possible. 

Criteria mostly met: Activity 

durations have been reduced, 

although some still remain 

long. For example, KCP has 

since reduced the number of 

activities with over 260 days 

duration from 138 in February 

to 57 activities in its July 

schedule. In addition, KCP has 

reduced the number of 

activities over 200 days in 

length from 275 in February to 

204 in its July schedule. 

According to KCP officials, 

most of the long duration 

activities are well into the future 

and cannot be accurately 

decomposed until some nearterm planning activities are 

completed. 

Integrating schedule 

activities horizontally and 

vertically 

The schedule should be horizontally 

integrated, meaning that it should link 

the products and outcomes associated 

with already sequenced activities. 

These links are commonly referred to 

as handoffs and serve to verify that 

activities are arranged in the right 

order to achieve aggregated products 

or outcomes. The schedule should 

also be vertically integrated, meaning 

that traceability exists among varying 

levels of activities and supporting tasks 

and subtasks. Such mapping or 

alignment among levels enables 

different groups to work to the same 

master schedule. 

Criteria partially met: The 

schedule is not horizontally 

integrated. There are excessive 

instances of incomplete logic 

where activities have no 

successors. In addition, there is 

no evidence that the schedule is 

vertically traceable to other 

levels of activities, supporting 

tasks, or subtasks. 

Criteria mostly met: KCP has 

made significant progress; 

however, because of the 

continued use of constraints, 

lags, and incomplete logic, the 

schedule is still not fully 

horizontally integrated. KCP 

has demonstrated that the 

schedule is vertically integrated 

with supporting tasks and 

subtasks through an external 

document. 

Page 34 GAO-10-115 Nuclear Weapons
Appendix II: GAO Assessment of KCP’s 

Relocation Schedule 

Criterion Explanation 

GAO analysis – 

February 2009 

GAO follow-up analysis – 

July 2009 

Establishing the critical 

path for all activities 

Using scheduling software, the critical 

path—the longest duration path 

through the sequenced list of key 

activities—should be identified. The 

establishment of a program’s critical 

path is necessary for examining the 

effects of any activity slipping along 

this path. Potential problems that may 

occur on or near the critical path 

should also be identified and reflected 

in the scheduling of the time for highrisk activities. 

Criteria partially met: The 

critical path appears to be 

logical; however, with all of the 

other incomplete logic, as well 

as a large float value—the time 

that a predecessor activity can 

slip before the delay affects 

successor activities—the critical 

path is not reliable. In addition, 

in the February schedule, the 

critical path extended to 

September 27, 2010, and the 

lease award task was not on the 

critical path. 

Criteria mostly met: KCP has 

made progress on the critical 

path. In KCP’s July schedule, 

the critical path was extended 

to October 5, 2013, and the 

lease award task was added, 

as appropriate. However, the 

continued incomplete logic and 

large float value continue to 

affect the validity of the critical 

path. 

Identifying float between 

activities 

The schedule should identify float, so 

that schedule flexibility can be 

determined. As a general rule, 

activities along the critical path 

typically have the least amount of float.

Criteria partially met: The 

schedule calculates total float 

values––the time that activities 

can slip before the delay affects 

the end date––automatically. 

However, there are more than 

4,800 activities with total float 

over 200 days. In addition, in the 

February schedule, there were 

390 activities with over 1,000 

days of total float. These values 

do not seem reasonable for a 

project schedule and probably 

are due to the excessive use of 

constraints and incomplete logic. 

Criteria partially met:

Progress has been made on 

reducing total float values, 

although they remain higher 

than expected. For example, 

KCP reduced the number of 

activities with over 200 days of 

total float from 4,800 in 

February to 2,964 in the July 

schedule. In addition, KCP has 

since reduced the number of 

activities with over 1,000 days 

of total float from 390 to 147. 

Conducting a schedule 

risk analysis 

A schedule risk analysis should be 

performed using a good critical path 

method schedule and data about 

project schedule risks, as well as 

statistical analysis techniques (such as 

Monte Carlo) to predict the level of 

confidence in meeting a program’s 

completion date. This analysis focuses 

not only on critical path activities but 

also on activities near the critical path, 

since they can potentially affect 

program status. 

Criteria not met: KCP has not 

performed a schedule risk 

analysis using statistical 

techniques. KCP officials 

reported that they have no plans 

to address this issue. 

Criteria not met: KCP’s 

schedule has not been 

subjected to a statistical risk 

analysis. KCP’s scheduling 

team also indicated that it does 

not have plans to conduct 

statistical analyses on the 

schedule. Although KCP 

officials stated that they have 

conducted an analysis on a 

separate spreadsheet, it does 

not provide sufficient 

confidence in meeting a 

program’s completion date. 

Page 35 GAO-10-115 Nuclear Weapons
Appendix II: GAO Assessment of KCP’s 

Relocation Schedule 

Criterion Explanation 

GAO analysis – 

February 2009 

GAO follow-up analysis – 

July 2009 

Updating the schedule 

using logic and durations 

to determine the start and 

completion dates 

The schedule should use logic and 

durations in order to reflect realistic 

start and completion dates for program 

activities. The schedule should be 

continually monitored to determine 

when forecasted completion dates 

differ from the planned dates, which 

can be used to determine whether 

schedule variances will affect 

downstream work. Maintaining the 

integrity of the schedule logic is not 

only necessary to reflect true status, 

but is also required before conducting 

a schedule risk analysis. 

Criteria partially met: The 

schedule appears to have been 

updated recently; however, 

because of the incomplete logic 

and reliance on lags, the dates 

for future activities are not 

reliable. Because the dates are 

not all calculated automatically, 

the schedule cannot be used to 

monitor changes in forecasted 

completion. Therefore, we could 

not determine with confidence 

whether schedule variances will 

affect downstream work. 

Criteria mostly met: There are 

still 14 instances of incomplete 

logic—where successor 

activities start before 

predecessor activities have 

been completed. 

Source: GAO assessment of KCP’s relocation schedule based on GAO-identified best scheduling practices. 

Note: During our July 2009 assessment, we learned that the software used to conduct our February 

assessment had produced inaccurate statistics. To correct this, we obtained new statistics for both 

February’s and July’s assessments using a more reliable method. However, the statistics shown in 

the February analysis have not been verified with KCP officials. Nevertheless, KCP officials agree 

that the general conclusions of our February assessment are still considered to be valid. 

Page 36 GAO-10-115 Nuclear Weapons
Appendix III: Comments from the National Appendix III: Comments from the National Nuclear Security Administration 

Nuclear Security Administration 

 Page 37 GAO-10-115 Nuclear Weapons 
Appendix III: Comments from the National 

Nuclear Security Administration 

 Page 38 GAO-10-115 Nuclear Weapons
Appendix III: Comments from the National 

Nuclear Security Administration 

 Page 39 GAO-10-115 Nuclear Weapons
Appendix III: Comments from the National 

Nuclear Security Administration 

 Page 40 GAO-10-115 Nuclear Weapons
Appendix III: Comments from the National 

Nuclear Security Administration 

 Page 41 GAO-10-115 Nuclear Weapons
Appendix III: Comments from the National 

Nuclear Security Administration 

 Page 42 GAO-10-115 Nuclear Weapons
Appendix IV: 

A

GAO Contact and Staff 

cknowledgments 

Page 43 GAO-10-115 

Appendix IV: GAO Contact and Staff 

Acknowledgments 

Gene Aloise, (202) 512-3841 or aloisee@gao.gov

In addition to the contact named above, Ryan T. Coles, Assistant Director; 

Antoinette Capaccio; Tisha Derricotte; Terry Dorn; David T. Hulett; Sandra 

Kerr; Amanda Krause; Alison O’Neill; Christopher Pacheco; Tim Persons; 

Jeff Phillips; and John Smale made key contributions to this report. 

 Nuclear Weapons 

GAO Contact 

Acknowledgments 

(361025) 
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