Nuclear Weapons: NNSA Needs to Establish a Cost and Schedule Baseline for Manufacturing a Critical Nuclear Weapon Component
Published: 2008-05-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Energy's National Nuclear Security Administration (NNSA) is responsible for manufacturing pits, a key component in a nuclear warhead. The department lost its ability to manufacture pits in 1989 with the closing of the Rocky Flats Plant. In 1996, the Los Alamos National Laboratory (LANL) was directed to reestablish a pit manufacturing capability, starting with a limited number of pits for the W88 warhead. In recent years, NNSA has considered ways to increase its pit manufacturing capacity, including building a new, large-scale pit manufacturing facility. It has also proposed producing pits for the Reliable Replacement Warhead (RRW). GAO was asked to determine the (1) extent to which NNSA achieved its major goals for reestablishing its pit manufacturing capability, (2) factors that currently constrain its ability to increase its pit manufacturing capacity, and (3) status of its plans for future pit manufacturing. For this review, GAO met with NNSA and LANL officials, reviewed agency documents, and visited the nuclear facility used to manufacture pits.
section_title: What GAO Found
paragraphs: NNSA achieved its major goals for reestablishing its pit manufacturing capability at LANL as defined by the agency in 2002. Specifically, NNSA's goals were to create a capability to manufacture 10 pits per year starting in 2007 and to deliver a single W88 war reserve pit to the stockpile in 2007. War reserve pits must meet stringent specifications, while other types of pits, such as pits destructively tested for production quality control, may not meet the same standards. NNSA estimated that this effort would cost about $1.55 billion for fiscal years 2001 through 2007. According to NNSA, LANL produced 11 pits in 2007, eight of which were W88 war reserve pits, and spent about $1.29 billion for fiscal years 2001 through 2007. However, GAO found that NNSA did not establish clear, consistent goals for the number of W88 war reserve pits it planned to produce. Specifically, some NNSA documents, including budget requests to Congress, called for delivering 10 W88 war reserve pits per year starting in 2007. In addition, NNSA's cost estimate did not include estimates for a variety of activities that directly and indirectly supported the pit manufacturing mission at LANL between 2001 and 2007. These support activities, which included scientific experiments and facility operations and maintenance, totaled over $1 billion. Because of three major constraints on pit manufacturing operations at LANL, NNSA will not be able to substantively increase its current pit manufacturing capacity for the foreseeable future. Specifically, GAO found that LANL's building for performing analytical chemistry, which deals with the separation and identification of the components in a pit sample, has major operational and structural limitations. LANL's ability to store pits and associated waste is also constrained by limited vault storage space. Finally, a lack of available floor space in LANL's main nuclear facility limits its ability to install a large-scale, efficient production line for manufacturing pits. NNSA's plans for future pit manufacturing are still being developed and, as a result, no reliable cost estimates exist. Originally, NNSA and the Department of Defense (DOD) had planned to develop the capability to produce RRW pits beginning about 2014, pending the outcome of a RRW design definition and cost study in 2008. However, in fiscal year 2008 all of NNSA's RRW funding was eliminated. While NNSA and DOD continue to support the RRW program, in the short run, NNSA plans to maintain the existing pit manufacturing capability at LANL. Over the long term, NNSA is planning, with DOD's concurrence, to upgrade the existing LANL facility to achieve a production capacity of up to 80 pits per year. However, NNSA has not established a cost and schedule baseline to support its projected effort.

section_title: Letter
paragraphs: The National Nuclear Security Administration (NNSA), a separately  organized agency within the Department of Energy (DOE), is responsible  for managing the nation’s stockpile of nuclear weapons. As part of its  mission, NNSA is responsible for manufacturing a key nuclear weapon  component for use in the stockpile. This component, known as a “pit,” is  manufactured using a man-made radioactive element called plutonium and  is needed to begin the chain reaction in a nuclear weapon. Different  weapons systems use different types of pits. Pits that can be used in the  stockpile, known as war reserve pits, must meet stringent specifications  and be certified by NNSA’s nuclear weapons laboratories. Consequently,  the capability to produce war reserve pits is critical for replacing pits that  are removed from existing warheads for surveillance testing or other  purposes. Other types of pits, such as pits that are destructively tested as  part of production quality control, may not be required to meet the same  standards.
DOE lost its capability to manufacture pits when it ceased operations at  DOE’s Rocky Flats Plant in Colorado in 1989 because of environmental  and regulatory concerns. At that time, Rocky Flats was manufacturing war  reserve pits for the W88 warhead, which is used on submarine-launched  ballistic missiles. In December 1996, DOE designated the Los Alamos  National Laboratory (LANL) as the site for reestablishing the capability to  manufacture pits. Specifically, DOE’s original goals for the pit  manufacturing mission were to (1) reestablish the capability to  manufacture war reserve pits for the W88 warhead by fiscal year 2001 and  demonstrate the capability to produce all pit types for the enduring  stockpile, (2) establish a manufacturing capacity of 10 pits per year by  fiscal year 2001 and expand to a capacity of up to 50 pits per year by fiscal  year 2005, and (3) develop a contingency plan for the large-scale  manufacturing of pits (i.e., 150-500 pits per year) at some other DOE site  or sites.
In meeting this new mission, LANL faced constraints not faced at the  Rocky Flats Plant. Historically, DOE conducted underground nuclear tests  to ensure that the nuclear warhead, including the pit, would perform as  required. Now, however, the safety and reliability of today’s nuclear  stockpile, including newly manufactured pits, must be maintained without  the benefit of underground nuclear testing because the United States has  maintained a moratorium on such testing since 1992. In addition, LANL  had to replicate pit manufacturing processes used at the Rocky Flats Plant  in a manner compliant with current environmental and safety standards.
In November 1998, we reported on DOE’s plans for reestablishing the pit  manufacturing mission at LANL. We found that DOE had revised its  original 1996 goals for pit manufacturing capacity and instead planned to  have an interim capacity of only 20 pits per year online by fiscal year 2007.  DOE estimated that the total costs for establishing and operating its pit  manufacturing mission would be over $1.1 billion for fiscal years 1996  through 2007. However, we found that this estimate did not include over  $490 million in total costs for other activities—such as construction- related activities at various LANL nuclear facilities—that were needed to  support the production of pits, as well as a wide variety of other defense- related activities. In addition, we found that DOE had done little to  develop a contingency plan for the large-scale manufacturing of pits.
We also found that the Department of Defense (DOD) and DOE had  discussed, but not resolved, important issues regarding DOE’s planned pit  manufacturing capacity. DOD is responsible for implementing the U.S.  nuclear deterrent strategy, which includes establishing the military  requirements associated with planning for the stockpile. In this context,  the Nuclear Weapons Council is responsible for preparing the annual  Nuclear Weapons Stockpile Memorandum, which specifies how many  warheads of each type will be in the stockpile. We found that officials  from various DOD organizations, including U.S. Strategic Command and  the Department of the Navy, had expressed concern that DOE’s plans for  pit manufacturing capacity would not be sufficient to meet the stockpile’s  needs. Specifically, these DOD organizations had conducted preliminary  analyses of the capacity needed to support the stockpile. On the basis of  these analyses, some DOD officials believed that the stockpile’s needs  exceeded the interim capacity of 20 pits per year planned for LANL, or  even a capacity of 50 pits per year that DOE indicated it might establish in  the future.
NNSA currently funds the pit manufacturing mission through the Pit  Manufacturing and Certification Campaign, which includes funding for  both the manufacture and the certification of pits at LANL and for related  activities at other supporting locations, such as the Lawrence Livermore  National Laboratory. According to NNSA data, over $234 million was  spent on these activities in fiscal year 2007, and NNSA plans to spend  almost $214 million in fiscal year 2008. At LANL, pit manufacturing takes  place within the Plutonium Facility-4 building, known as PF-4, which was  constructed in 1978 as a multiuse research and development facility. LANL  employs approximately 430 full-time equivalent employees associated with  the pit manufacturing program, including employees associated with pit  manufacturing operations at PF-4 and the manufacture of non-nuclear pit  components at other facilities.
Several key events over the past 6 years have affected NNSA’s plans for pit  manufacturing.
In May 2002, the Secretary of Energy approved the start of design work for  a large-scale manufacturing plant called the Modern Pit Facility. This  facility was designed to manufacture all pits in the enduring stockpile at a  capacity of 125 pits per year. However, the conference report  accompanying the fiscal year 2006 NNSA appropriation stated that it  provided no funding for the Modern Pit Facility and directed NNSA to  focus on improving its manufacturing capability at LANL. As a result,  NNSA suspended the Modern Pit Facility project indefinitely.
In 2005, the Nuclear Weapons Council approved the creation of a Reliable  Replacement Warhead (RRW) program to study a new approach for  providing a credible nuclear warhead deterrent over the long term. The  RRW program would redesign weapon components, in particular the pit,  to be easier to manufacture, maintain, dismantle, and certify without  nuclear testing, potentially allowing NNSA to transition to a smaller and  more efficient weapons complex. In March 2007, the Nuclear Weapons  Council approved a RRW design by the Lawrence Livermore National  Laboratory to provide a replacement warhead for a portion of the nation’s  submarine-launched ballistic missiles. NNSA had planned to complete a  detailed design definition and cost study of the RRW during 2008.  However, the explanatory statement accompanying the fiscal year 2008  NNSA appropriation stated that the bill provided no funding for the RRW  program and directed NNSA to focus on assessing a new strategic nuclear  deterrent mission for the twenty-first century in order to define the  associated stockpile requirements and determine the scope of the  weapons complex modernization plans. According to NNSA officials,  NNSA has ceased all activities associated with the RRW program for fiscal  year 2008 but plans to continue to fund some elements of the RRW design  for fiscal year 2009 under activities associated with its Directed Stockpile  Work and Science Campaign programs.
Finally, in October 2006, NNSA offered a proposal to address long- standing problems with the condition and responsiveness of the nuclear  weapon production facilities. Under its plan—which NNSA currently  refers to as “Complex Transformation”—NNSA proposed to build a new,  consolidated plutonium center at an existing DOE site that would replace  the interim plutonium production facility at LANL. A key responsibility of  the plutonium center would be to manufacture pits for a RRW-based  stockpile. Although NNSA had planned to begin design work on the  plutonium center during 2008, the explanatory statement accompanying  the fiscal year 2008 NNSA appropriation stated that no funding was  provided for the plutonium center and directed NNSA to focus on  developing a modern nuclear weapons strategy, including the required pit  production capacity defined by nuclear stockpile requirements. As a  result, NNSA has suspended its work on the plutonium center.
In this context, you asked us to determine the (1) extent to which NNSA  achieved its major goals for reestablishing its pit manufacturing capability,  (2) factors that currently constrain NNSA’s ability to increase its pit  manufacturing capacity, and (3) status of NNSA’s plans for future pit  manufacturing.
In conducting our work, we met with NNSA and contractor officials;  reviewed agency documents; and visited the pit manufacturing plant (PF- 4) and other supporting facilities at LANL. We also visited the pit  manufacturing facility at the United Kingdom’s Atomic Weapons  Establishment to determine its relevance to manufacturing practices at  LANL. In addition, we performed the following work:    To determine the extent to which NNSA achieved its major goals for  reestablishing its pit manufacturing capability, we interviewed NNSA and  LANL officials; reviewed NNSA and LANL plans related to pit  manufacturing; and analyzed NNSA and LANL data on expenditures.
To determine the current constraints on NNSA’s ability to increase its pit  manufacturing capacity, we interviewed NNSA and LANL officials;  analyzed LANL data on the major constraints of each phase of the pit  manufacturing process; and reviewed NNSA and LANL plans for  addressing these constraints.
To determine the status of NNSA’s plans for future pit manufacturing, we  interviewed officials from NNSA, LANL, and the Lawrence Livermore  National Laboratory. We reviewed NNSA and LANL’s plans related to  manufacturing pits for the RRW and other pit types, as well as the Nuclear  Weapons Stockpile Memorandum and related Nuclear Weapons Council  plans on the future size and composition of the stockpile. We also  reviewed NNSA’s plans for developing new pit manufacturing technologies  and compared these plans with our previous work on technology  readiness levels, which DOD uses for measuring and communicating  technology readiness for first-of-a-kind technology applications. In  addition, we consulted with an outside expert to obtain additional  information on the adequacy of NNSA’s plans for technology development.  We visited research and development facilities at the Lawrence Livermore  National Laboratory that are used to support new pit manufacturing  technologies. Finally, we interviewed officials from the Office of the  Assistant to the Secretary of Defense (Nuclear and Chemical and  Biological Defense Programs) and the Nuclear Weapons Council.
We conducted this performance audit from April 2007 to May 2008 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.
subsections: section_title: Background
paragraphs: The U.S. nuclear weapons stockpile consists of nine weapon types. (See  table 1.) These weapons include gravity bombs deliverable by dual-capable  fighter aircraft and long-range bombers; cruise missiles deliverable by  aircraft and submarines; submarine-launched ballistic missiles; and  intercontinental ballistic missiles.
There are seven major phases associated with pit manufacturing  operations at LANL (see fig. 1).
Disassembly–takes a source of plutonium (e.g., an existing pit) and  extracts the plutonium metal.
Metal preparation–uses various chemical or electro-refining processes to  remove impurities from the plutonium metal.
Foundry–heats up the plutonium metal and casts it into the desired shape.
Machining and inspection–removes unwanted material from the cast  shape and inspects the machined shape for any defects.
Nonnuclear components–manufactures, tests, and qualifies nonnuclear  subcomponents for pit manufacturing.
Assembly and joining–assembles the various pit components and  nonnuclear components into a finished pit.
Nondestructive evaluation–inspects assembled pits to assure that final  product specifications have been met.
In addition, three operations support these major phases (as shown in   fig. 1).
Liquid and solid waste management–Pit manufacturing operations  generate transuranic liquid and solid waste, which must be disposed of in  a safe, secure manner.
Storage–Pits and associated waste materials from pit operations must be  stored in a safe, secure environment to minimize their effect on human  health and to ensure that they do not initiate a nuclear chain reaction.
Analytical chemistry–Samples are taken from pits to accurately  determine their chemical composition and to provide assurance that a pit  will meet its performance specifications.
Other operations are also required to support pit manufacturing, including  quality assurance measures (e.g., calibration of equipment), maintenance  of infrastructure, and support of facilities.
Pit manufacturing at LANL occurs in the PF-4 building, which was  constructed in 1978 as a multiuse, plutonium research and development  facility. Other pit-related facilities at LANL include the following:    The CMR building, which was constructed in the early 1950s, houses most  of LANL’s analytical chemistry equipment.
The Radioactive Liquid Waste Treatment Facility in Technical Area-50 (TA- 50), which has been in operation since 1963, processes transuranic liquid  waste.
The Solid Waste Facility in Technical Area-54 (TA-54) stores transuranic  solid waste pending disposal off site at the Waste Isolation Pilot Plant in  New Mexico.
The Sigma and machine shop buildings carry out nonnuclear  manufacturing and equipment installation.
In addition to these facilities, the Superblock buildings at the Lawrence  Livermore National Laboratory in California are used for plutonium  research and development.
NNSA oversees the pit manufacturing program at LANL through its Pit  Manufacturing and Certification Campaign, which is composed of the  following three subprograms: (1) Pit Manufacturing, (2) Pit Manufacturing  Capability, and (3) Pit Certification. However, starting in fiscal year 2009,  NNSA will transfer funding associated with the first two subprograms to  the Directed Stockpile Work program, while activities associated with Pit  Certification will be transferred to the Science Campaign program.
section_title: NNSA Met Its Cost and Schedule Goals but Did Not Establish Clear, Consistent Goals for the Number and Type of W88 Pits It Planned to Produce
paragraphs: NNSA achieved its major goals for reestablishing its pit manufacturing  capability at LANL as defined by the agency in 2002. Specifically, NNSA’s  schedule and production goals were to: (1) establish a capability to  manufacture 10 pits per year by 2007, (2) deliver one W88 war reserve pit  to the stockpile by 2007, and (3) certify LANL-produced W88 pits for use in  the stockpile by 2007. In addition, NNSA estimated that pit manufacturing  and certification expenditures for fiscal years 2001 through 2007 would be  about $1.55 billion. NNSA officials said they believe that LANL exceeded  its 2002 schedule and production goals by manufacturing 11 W88 pits, 8 of  which were war reserve pits, in fiscal year 2007. In addition, according to  NNSA data, LANL’s expenditures related to pit manufacturing and  certification activities for fiscal years 2001 through 2007 were about $260  million under its original cost estimate. However, NNSA did not have a  consistent set of production goals for W88 pit manufacturing between 2002  and 2007 and never specified the number of war reserve pits that LANL  would be required to manufacture each year. In addition, NNSA’s cost  estimate did not include almost $300 million in costs for a number of  activities that were directly associated with the pit manufacturing and  certification mission. Finally, NNSA’s cost estimate did not include a  portion of over $1 billion in costs for other activities that were needed to  support the production of pits, as well as a wide variety of other defense- related activities, at LANL for fiscal years 2001 through 2007.
subsections: section_title: NNSA Met Its 2002 Schedule and Cost Goals
paragraphs: According to NNSA officials, LANL first identified the activities necessary  to manufacture and certify a W88 pit in a 1998 project plan entitled,  “Integrated Pit Manufacturing and Certification Program Plan.” According  to the plan, the pit manufacturing mission would require a total of about  $1.25 billion for fiscal years 1996 through 2007 to fund three types of  activities: (1) establishing the capability to manufacture W88 pits,   (2) construction projects to support the pit manufacturing mission, and   (3) engineering and physics tests to certify the LANL-produced W88 pits.  In addition, the plan contained the following schedule and production  milestones: (1) complete the first W88 war reserve pit in 2001,   (2) complete a W87 manufacturing development unit in 2002, (3) establish  a capacity to produce 10 war reserve pits per year by 2005, and   (4) establish the capacity to produce 20 war reserve pits per year by 2007.
However, according to NNSA officials, NNSA recognized in 2000 that it  needed to establish a better baseline of the cost, schedule, and scope  needed to guide the pit manufacturing mission at LANL. As a result of this  effort, LANL issued a pit manufacturing plan—entitled “W88 Pit  Manufacturing and Certification Integrated Project Plan”—in March 2001.
The 2001 plan estimated that it would cost a total of about $1.55 billion for  fiscal years 2001 through 2007 to manufacture and certify a W88 pit. In  addition, the 2001 plan contained the following milestones: (1) establish a  capability to manufacture 10 pits per year by 2007, (2) certify LANL- produced W88 pits for use in the stockpile by 2009, and (3) deliver a war  reserve W88 pit to the stockpile by 2009. However, according to NNSA  officials, NNSA revised the last two milestones in 2002. Specifically, NNSA  moved up the milestones for LANL to deliver a war reserve W88 pit to the  stockpile and certify LANL-produced W88 pits to fiscal year 2007.
NNSA officials said that LANL exceeded its 2002 schedule and production  goals by manufacturing a total of 11 pits during fiscal year 2007. Of these  11 pits:    NNSA plans to use 8 pits to replace existing W88 pits that will be taken out  of the stockpile for use in its stockpile surveillance testing program.  Specifically, surveillance testing involves destructive and nondestructive  analysis to identify any defects or failures in pits. NNSA uses these tests to  help maintain confidence in the safety and reliability of the stockpile  without nuclear testing. According to NNSA officials, these 8 pits have  been designated as war reserve quality.
NNSA plans to use 2 pits for its shelf life program, which examines how a  pit ages over time. According to NNSA officials, these pits may, but are not  required to, meet all of the quality standards of war reserve pits and,  therefore, have not been designated as war reserve pits.
NNSA plans to subject 1 pit to destructive testing as part of LANL’s  manufacturing quality control. According to NNSA officials, this pit may,  but is not required to, meet all of the quality standards of war reserve pits  and, therefore, has not been designated as a war reserve pit.
In addition, according to NNSA officials, LANL’s costs related to pit  manufacturing were less than it estimated in its 2001 plan. According to  NNSA data, the expenditures for the pit manufacturing and certification  elements of the Pit Manufacturing and Certification Campaign for fiscal  years 2001 through 2007 were about $1.29 billion. This amount is  approximately $260 million under than the cost estimate in NNSA’s 2001  plan.
section_title: NNSA Did Not Establish Clear, Consistent Requirements for W88 Pit Production
paragraphs: While LANL’s 2001 plan contained goals related to a capability to  manufacture 10 W88 pits per year and the delivery of a single war reserve  pit to the stockpile, the 2001 plan did not define NNSA’s requirements for  the total number of war reserve W88 pits that LANL needed to  manufacture. In that regard, the capability to manufacture 10 W88 war  reserve pits per year is different from the capability to produce 10 pits per  year that are not of war reserve quality. According to NNSA officials, other  types of pits, such as pits that are destructively tested as part of  production quality control, may not meet the same standards and may be  of lower production quality.
NNSA only recently established final requirements for the exact number  and type of W88 pits to be manufactured at LANL. Specifically, NNSA  issued a memorandum in February 2007 that established a total pit  production requirement for LANL of 31 W88 pits for the following  purposes:    18 pits will be designated as war reserve quality and will replace existing  W88 pits in the stockpile for use in NNSA’s stockpile surveillance testing  program,   7 pits will be used for NNSA’s shelf life program,    4 pits will be used for LANL’s manufacturing quality control program, and    2 pits will be used as spares.
However, the 2007 memorandum did not specify the number of war  reserve pits that LANL would be required to manufacture each year.
Moreover, NNSA was inconsistent in the way it communicated this goal  internally and to Congress. For example, according to NNSA’s 2002  baseline, a key milestone for the pit manufacturing program was to deliver  a single war reserve W88 pit to the stockpile by 2007. However, in  accordance with NNSA policies, officials in the NNSA pit manufacturing  program office have also issued a number of program plans and  implementation plans since 2002. Program plans are strategic in nature  and identify the long-term goals, high-level milestones, and resources  needed to support a particular program over a 7-year period, while  implementation plans establish performance expectations for the program  and each participating site for the current year of execution. According to  NNSA’s most recent program and implementation plans for the Pit  Manufacturing and Certification Campaign, a key objective of the pit  manufacturing program is to establish an interim pit manufacturing  capacity of “10 war reserve W88 pits per year” at LANL starting in fiscal  year 2007. In addition, NNSA has established a number of annual  performance targets for the pit manufacturing program, which it reports to  Congress as part of its annual budget request. In particular, in its fiscal  year 2008 congressional budget request, NNSA established as a  performance target to produce “10 certified W88 pits” per year at LANL.  According to NNSA, the term “certified pits” has the same meaning as “pits  to the stockpile” or war reserve pits.
NNSA officials in the pit manufacturing office said that it was never  NNSA’s intention that every pit produced by LANL would be designated as  war reserve. Moreover, the officials said that there was some uncertainty  in the beginning as to whether LANL would be required to manufacture  any war reserve pits. However, they acknowledged the importance of  clarifying the exact number of war reserve pits that LANL will required to  manufacture. They said that they are more careful now in how they write  the key milestones for the pit manufacturing program. For example, they  said that they will write future milestones in terms of war reserve pits to  clearly distinguish between requirements for war reserve pits and  requirements for other types of pits.
section_title: NNSA’s Plan Did Not Include a Variety of Costs Associated with Pit Manufacturing
paragraphs: According to officials in NNSA’s pit manufacturing office, they generally  relied on the 2001 plan to oversee activities associated with the Pit  Manufacturing and Certification Campaign. However, the 2001 plan did not  include cost estimates for a number of activities that were directly  associated with the Pit Manufacturing and Certification Campaign. These  include costs associated with the (1) support activities at the Nevada Test  Site, (2) activities associated with the Pit Manufacturing Capability  subprogram, and (3) activities associated with the design of the Modern  Pit Facility, a large-scale pit manufacturing plant. For example, support  activities at the Nevada Test Site included experiments with plutonium  that supported LANL’s pit certification effort. In addition, the Pit  Manufacturing Capability subprogram supported the development of pit  manufacturing processes necessary to establish the capability to  manufacture other stockpile pits by fiscal year 2009. As shown in table 2,  the cost for these activities was almost $300 million for fiscal years 2001  through 2007.
In addition, the 2001 plan did not include some portion of the costs of  other activities that were needed to support the production of pits, as well  as a wide variety of other defense-related activities, at LANL between  fiscal years 2001 and 2007. These activities include (1) operations and  maintenance of key facilities, including PF-4, CMR, and waste processing  facilities at TA-50 and TA-54; (2) processing of waste material containing  plutonium; and (3) physical security. Specifically:    Operations and maintenance includes all labor, equipment, and projects  required to maintain the facilities as “mission capable” to perform  programmatic tasks. In this case, the key facilities are PF-4, CMR, and  waste processing facilities at TA-50 and TA-54. NNSA funds these activities  using the budget category Readiness in Technical Base and Facilities,  Operations of Facilities. In addition, NNSA provides funding for deferred  maintenance at these facilities using the budget category Facilities and  Infrastructure Recapitalization Program.
Processing of waste material from plutonium operations includes the cost  of processing, packaging, and shipping the waste from each facility. For  example, when liquid waste is generated by plutonium operations  (including pit manufacturing) at PF-4, LANL transfers this waste to TA-50.  Once this liquid waste is processed at TA-50 into solid waste, LANL  transfers the solid waste to TA-54 for final packaging. Finally, this solid  waste is shipped off site to the Waste Isolation Pilot Plant in New Mexico.
Physical security includes the protective forces, consisting of armed  uniformed officers, and physical security systems—including intrusion  detection and assessment barriers, access controls, tamper protection  monitoring, and performance testing and maintenance of security  systems—at the TA-55 site, which houses the PF-4 building.
In addition, the following eight construction projects supported the pit  manufacturing mission, as well as other LANL missions, between fiscal  years 2001 and 2007:    CMR Upgrades project–activities associated with upgrading various  infrastructure systems at CMR, including ventilation, fire, and emergency  lighting controls.
CMR Replacement project–activities associated with the planned  construction of a replacement for the CMR building.
TA-55 Reinvestment project, Phase I–activities associated with upgrading  the major facility and infrastructure systems at PF-4.
TA-55 Radiography Facility–activities associated with the planned  construction of a high-energy radiography facility at TA-55.
Radioactive Liquid Waste Treatment Plant Upgrade project–activities  associated with renovating and constructing new buildings associated  with LANL’s radioactive liquid waste treatment and disposal capability.
TRU Waste Facility–activities associated with the planned construction of  a new transuranic solid waste facility.
Nuclear Materials Safeguards and Security Upgrades project, Phases I and  II–activities associated with upgrading the security features at TA-55.
Table 3 provides examples, based on expenditure data provided by LANL,  of these types of expenditures for fiscal years 2001 through 2007, which  total over $1.3 billion.
Previous pit manufacturing plans contained estimates for some of these  types of activities. For example, the 1998 pit manufacturing project plan  identified about $136 million in planned expenditures to support  construction projects directly related to pit manufacturing operations for  fiscal years 1996 through 2008. These projects were primarily designed to  upgrade equipment and facility infrastructure at the TA-55 site. The 1998  plan also identified about $439 million in planned expenditures primarily  to maintain the infrastructure at the TA-55 site and the CMR building for  fiscal years 1996 through 2008. According to the plan, these costs would  support the execution of the pit manufacturing mission but were not  directly attributable to pit production.
LANL officials said that they recognize the importance of accurately  tracking and accounting for these kinds of supporting costs. For example,  one LANL official said that LANL plans to implement a new cost  distribution model in fiscal year 2009 that will enable the laboratory to  allocate the cost of shared infrastructure activities, such as the cost  associated with radiological control technicians, across the various  programs and missions that reside in TA-55 and CMR. This cost  distribution model will use the percentage of space occupied by the tenant  programs in TA-55 and CMR as the basis for distributing the shared costs.  According to the model, as of September 1, 2007, the pit manufacturing  and certification program occupied about 35 percent of the space in TA-55  and 30 percent of the space in CMR. However, NNSA pit manufacturing  program officials noted that these types of costs support the total program  portfolio at LANL, including defense-related and nondefense-related  activities. They also said that they purposely did not include the costs  associated with these activities in the Pit Manufacturing and Certification  Campaign to ensure a tight focus on the objectives of the campaign.
section_title: Several Factors Constrain NNSA’s Ability to Increase Its Pit Manufacturing Capacity
paragraphs: Because of three major constraints on pit manufacturing operations at  LANL, NNSA will not be able to substantively increase its pit  manufacturing capacity for the foreseeable future. First, LANL’s existing  facility for performing analytical chemistry has major operational and  structural limitations. Second, LANL’s ability to store pits and associated  waste is constrained by limited vault space. Finally, large-scale pit  manufacturing operations are constrained by the lack of available floor  space within the PF-4 building and by the facilities that process waste  material containing plutonium.
subsections: section_title: LANL’s Existing Facility for Analyzing Pit Samples Has Major Operational Limitations
paragraphs: LANL analyzes plutonium from pit subcomponents, feed materials, and  waste streams for a variety of purposes. These analyses provide the (1)  data required to certify the material control and accountability of the  plutonium feed and waste materials, (2) chemical accuracy for quality  control of the product, and (3) assurance that the pit will meet its  performance specifications. The CMR building, which was constructed in  the early 1950s, houses most of LANL’s analytical chemistry capabilities.  According to LANL estimates, for each pit that is produced at PF-4, the pit  manufacturing program generates an average of about 10 to 15 samples  that have to be sent to CMR for analytical chemistry analyses. Chemists at  CMR take each sample and conduct multiple analyses or “instrument  runs.” As a result, each pit generates an average of about 100 to 150  instrument runs at CMR.
According to LANL estimates, CMR currently contains enough analytical  chemistry instruments to support a pit production rate of 20 pits per year.  However, because of several limiting factors, LANL officials estimate that  the CMR building can only support a pit production capacity of between  10 to 15 pits per year. The major factor limiting analytical chemistry  operations in CMR is the need to impose safety restrictions on CMR’s  operations that involve plutonium. In 1992, DOE began a planning process  aimed at upgrading many of the safety, security, and safeguards features of  CMR. Later, in 1997 and 1998, a series of operational, safety, and seismic  issues surfaced that affected the long-term viability of CMR. For example,  studies identified a seismic fault trace beneath one of the wings of the  CMR building that increased the level of structural integrity required to  meet current structural seismic code requirements for a Hazard Category 2  nuclear facility.
DOE decided that it would be too difficult and costly to correct the CMR  building’s defects by performing repairs and upgrades. Instead, DOE  decided to perform only the upgrades necessary to ensure the safe and  reliable operation of the CMR building through 2010. In addition, LANL  imposed a number of restrictions on the CMR facility’s operations and  capabilities. For example, the areas within CMR that perform analytical  chemistry analyses are limited to handling no more than approximately  200 grams of plutonium material (equivalent to Pu-239) at a time.  Moreover, according to LANL officials, the analytical chemistry areas in  CMR may not be available for programmatic work for as much as 25  percent of the time due to the age and deteriorating condition of the  building. A final limiting factor is that the pit manufacturing program at  LANL does not have dedicated analytical chemistry instruments within the  CMR building. Specifically, while pit manufacturing accounts for almost 60  percent of the analytical chemistry work at CMR, the rest of the work is  conducted for other programs within PF-4, including programs associated  with NNSA’s Office of Defense Nuclear Nonproliferation and DOE’s Office  of Nuclear Energy.
section_title: LANL’s Ability to Store Pits and Associated Wastes Is Constrained by Limited Vault Space
paragraphs: LANL maintains a storage vault in PF-4 to store old pits, newly  manufactured pits, pit residues, and waste material containing plutonium.  The storage vault is about 4,500 square feet in size and was designed to  provide adequate storage for special nuclear materials in a research and  development setting. As a result, the storage vault was not designed to  store large amounts of pits and waste material that result from large-scale  pit manufacturing operations. By comparison, the Rocky Flats Plant,  which manufactured pits for DOE until 1989, had a storage area of about  8,000 to 10,000 square feet.
According to LANL officials, vault space within PF-4 was one of the major  limiting factors for pit production in fiscal year 2007. For example, in  August 2007, LANL officials had to temporarily cease pit manufacturing  operations because they had no more room in the vault to store pits. In  particular, the lack of vault space has led to significant amount of “on-the- floor” storage of material, whereby materials are stored in safes on the  process floor, over the past 10 years. According to LANL officials, the vault  in PF-4 is currently operating at 120 percent of its originally designed  capacity.
section_title: Pit Manufacturing Operations at LANL are Constrained by Lack of Additional Floor Space
paragraphs: PF-4 was originally designed as a research and development facility to  support multiple DOE nuclear research programs. As a result, PF-4 houses  a variety of programs. Specifically, as shown in figure 2, operations related  to pit manufacturing and certification occupy about 35 percent of the  available space in PF-4. Another 29 percent is used by the Readiness in  Technical Base and Facilities program, which operates and maintains  NNSA program facilities in a safe, secure, reliable, and compliant  condition. In particular, this program is responsible for facility operations  and maintenance and addressing environment, safety, and health issues.  The remaining 36 percent of available space in PF-4 is used by other  programs. (See table 4 for a description of these programmatic areas.)
Because the majority of the space in PF-4 is occupied by other programs,  NNSA is limited in its ability to expand its pit manufacturing operations  into other areas in PF-4. In order for the pit manufacturing mission to  acquire new space, NNSA Office of Defense Programs officials have to  negotiate with the departmental sponsor of the other programs. For  example, in June 2007, the NNSA Office of Defense Programs signed a  memorandum of agreement with the DOE Office of Nuclear Energy to  consolidate the activities conducted by the ceramic fuels program into a  single room, thereby freeing up an additional room for use by NNSA.  However, because NNSA has not issued a record of decision on its efforts  to transform the nuclear weapons complex, the Office of Defense  Programs has not reached a decision on whether to make the space  available for pit manufacturing operations, for analytical chemistry  analyses, or for the consolidation of special nuclear materials from other  sites in the nuclear weapons complex. In addition, it will take several  years for NNSA to consolidate the ceramic fuels program, decontaminate  the room, and install the necessary new gloveboxes and equipment.
section_title: Pit Manufacturing Operations at LANL Are Also Constrained by Waste Processing Facilities
paragraphs: Pit manufacturing operations at PF-4 generate liquid and solid transuranic  waste. Liquid waste is processed at the Radioactive Liquid Waste  Treatment Facility at TA-50, which has been in operation since 1963. This  facility treats approximately 80,000 liters of transuranic waste a year.  According to LANL officials, the facility can currently process enough  liquid waste to support a pit capacity of about 30 pits per year using a  single shift of operations. However, the Radioactive Liquid Waste  Treatment Facility processes waste from PF-4, CMR, and at least seven  other nuclear research, production, and support facilities. As a result, the  tranuranic waste stream is influenced by multiple programs at LANL that  support nuclear research and production and varies significantly in  volume on a daily basis—potentially constraining pit capacity.
Transuranic solid waste is placed in drums at the generating facilities—  PF-4 being the largest source of transuranic drums at LANL—and sent to  LANL’s TA-54 area for inspection and characterization. This waste is  ultimately shipped to the Waste Isolation Pilot Plant in New Mexico for  final storage. According to LANL officials, the main limiting factor in  LANL’s ability to process and ship solid waste is its ability to stage and  store drums of solid waste before they are shipped off-site. In fiscal year  2007, TA-55 generated about 450 drums of transuranic solid waste. Of this  amount, roughly half came from pit manufacturing operations. According  to LANL estimates, TA-54 can currently support a pit manufacturing  capacity of between 20 to 30 pits per year. However, under an agreement  with the state of New Mexico, DOE will close significant portions of TA-54,  including operations involving transuranic solid waste, by 2010. NNSA has  initiated a TA-50 transuranic waste consolidation project to establish the  necessary capabilities to handle solid waste after TA-54 is no longer  available. According to LANL, this facility needs to be operational in the  2011-2013 time frame.
In commenting on our report, NNSA officials agreed that they will not be  able to increase LANL’s pit manufacturing capacity to larger levels (e.g., 50  to 80 pits per year) without improvements to supporting facilities.  However, they said that they had some flexibility to achieve a modest  increase in LANL’s pit manufacturing capacity to address a specific  requirement for additional pits. In that regard, they said that they could  apply more shifts, add equipment to PF-4, move some material out of the  storage vault in PF-4, and make some adjustments to analytical chemistry  requirements. However, NNSA officials did not provide any details on how  many additional pits they would be able to produce if they performed  these activities.
section_title: NNSA Has Not Established a Cost and Schedule Baseline for Its Future Pit Manufacturing Mission
paragraphs: NNSA’s plans for future pit manufacturing are still being developed and, as  a result, no reliable cost estimates exist. Over the past few years, NNSA  and DOD had planned to develop the capability to produce RRW pits  beginning about 2014. However, the explanatory statement accompanying  the fiscal year 2008 NNSA appropriation stated that the bill provided no  funding for the RRW program. While NNSA and DOD continue to support  the RRW program, in the short run, NNSA plans to maintain the existing  pit manufacturing capability at LANL. Over the long term, NNSA is  planning, with DOD’s concurrence, to upgrade the PF-4 facility to achieve  a production capacity of up to 80 pits per year. However, NNSA has not  established a cost and schedule baseline to support its projected efforts.  Using the best available data, we estimated that NNSA’s plans entail  spending several billion dollars at LANL over the next decade.
subsections: section_title: NNSA Has Changed Its Strategy for Manufacturing Future Pit Types over the Past Few Years
paragraphs: One of NNSA’s original goals for the pit manufacturing mission was to  develop the technology and demonstrate the processes required to  manufacture all pit types in the enduring stockpile by the end of fiscal year  2009. NNSA planned to achieve this milestone by first demonstrating the  key manufacturing processes for the W87 and B61-7 pits. However, with  the creation of the RRW program, NNSA’s strategy changed. Specifically,  In April 2006, NNSA issued guidance to the nuclear weapons complex to  demonstrate the capacity to manufacture and certify an RRW by 2012.
In October 2006, as part of its Complex Transformation effort, NNSA  issued a planning document describing its vision for the nuclear weapons  complex of the future. According to the document, NNSA wanted to  establish an RRW-based stockpile plan by the end of 2007 with a majority  of intercontinental ballistic missile, submarine-launched ballistic missiles,  bombs, and cruise missiles transitioning to RRW-types by 2030.
In February 2007, NNSA established a planning target of “2014 plus or  minus two years” to produce an RRW first production unit. In particular,  by March 2007, NNSA planned to manufacture an RRW first production pit  by the end of fiscal year 2012.
In December 2007, as part of its Complex Transformation planning effort,  NNSA issued a draft plan stating that the first RRW was being considered  as a possible replacement for the Navy’s W76 warhead starting as early as  the 2014 time frame.
At the same time, the Nuclear Weapons Council began considering a  variety of scenarios based on different stockpile sizes and the degree to  which the stockpile would incorporate new RRW designs. According to a  senior DOD official on the Nuclear Weapons Council staff, while the  council has not issued a final decision as to the size and composition of  the future stockpile, the council has considered how large the stockpile  needs to be in order to maintain a sufficiently large, responsive  manufacturing infrastructure—comprised of people and equipment that  can be responsive to future global geopolitical events. In addition, the  council has considered the number of warheads that will need to be either  refurbished or replaced in the coming decades.
However, the explanatory statement accompanying the fiscal year 2008  NNSA appropriation stated that the bill provided no funding for the RRW  program. NNSA and DOD officials still support the goals of the RRW  program. For example, in recent testimony before the House Armed  Services Subcommittee on Strategic Forces, the Commander of the U.S.  Strategic Command stated that his agency supports the continuation of the  RRW design definition and cost study to explore a replacement for aging  warheads in the stockpile. However, in the short term, NNSA has shifted  its strategy for pit manufacturing. Specifically, in its fiscal year 2009  budget request to Congress, NNSA stated that three of its key objectives  for the pit manufacturing mission were to (1) establish the capability to  manufacture replacement pits for warheads other than the W88,   (2) improve manufacturing processes used to manufacture all pit types,  and (3) develop the processes and equipment necessary to manufacture  pits for future requirements. According to NNSA officials in the pit  manufacturing office, their activities in 2009 will focus on continuing to  manufacture W88 pits, documenting the processes necessary to  manufacture other pit types, and developing the technology necessary to  increase the capacity for pit manufacturing beyond 10 pits per year.  Moreover, they said that the mission for the pit manufacturing program  going forward is to maintain the existing capability and the quality control  infrastructure to be able to manufacture whatever the DOD requires.
section_title: NNSA Has Changed Its Plans for Future Pit Capacity Over the Past Few Years
paragraphs: NNSA’s initial goals for large-scale pit manufacturing focused on the  construction of a new production facility. For example, in May 2002, the  Secretary of Energy approved the start of design work for a large-scale  manufacturing plant called the Modern Pit Facility. This facility was  designed to address the long-term pit manufacturing capability and  capacity required to support the nuclear weapons stockpile. Specifically, it  would be able to manufacture pits at a production capacity of 125 pits per  year. However, the conference report accompanying the fiscal year 2006  NNSA appropriation stated that it provided no funding for the Modern Pit  Facility and directed NNSA to focus on improving its manufacturing  capability at LANL. As a result, NNSA suspended the Modern Pit Facility  indefinitely.
In October 2006, NNSA offered a new proposal to address the need for a  large-scale pit manufacturing facility. Specifically, in its Complex  Transformation plan, NNSA proposed to build a new, consolidated  plutonium center at an existing DOE site that would replace the interim pit  facility at LANL by 2022. As with the planned capacity of the Modern Pit  Facility, NNSA planned to design the consolidated plutonium center for a  production capacity of 125 pits per year to support an RRW-type stockpile.  In addition, NNSA planned to upgrade the manufacturing operations at  LANL in order to achieve a production capacity of up to 50 RRW pits per  year by 2012. It planned to maintain this capacity at LANL until 2022, when  pit operations at LANL would cease, and the consolidated plutonium  center would begin operations. However, the explanatory statement  accompanying the fiscal year 2008 NNSA appropriation stated that no  funding was provided for the consolidated plutonium center and directed  NNSA to focus on developing a modern nuclear weapons strategy,  including the required pit production capacity defined by nuclear stockpile  requirements. As a result, NNSA suspended work on the consolidated  plutonium center.
Since the issuance of its 2006 planning document, NNSA’s strategy for  large-scale pit manufacturing has changed. Specifically, in December 2007,  as part of its Complex Transformation planning effort, NNSA issued a draft  plan establishing various alternatives for the future of its pit  manufacturing mission. One alternative remained the construction of a  consolidated plutonium center with a capacity of 125 pits per year for a  single shift of operations. However, NNSA listed as its preferred  alternative an upgrade of the existing PF-4 building at LANL to produce up  to 80 pits per year. According to the plan, the actual time frame for  reaching this capacity will depend on an operational date for new  analytical chemistry and vault storage space at LANL.
DOD officials have only recently agreed to support NNSA’s plan to  manufacture up to 80 pits per year at LANL. According to the 2007 Nuclear  Weapons Stockpile Memorandum, the Nuclear Weapons Council stated  that NNSA will need to provide a pit manufacturing capacity of 125 pits  per year going forward. According to a senior DOD official on the Nuclear  Weapons Council staff, the council voted on February 20, 2008, to support  a baseline production capacity of 50 to 80 pits per year. However, at that  meeting, the council stated that future changes to stockpile size, military  requirements, and risk factors may ultimately lead to a revised capacity  rate. According to the senior DOD official, it is possible that this revised  capacity rate will ultimately be larger than 80 pits per year.
section_title: NNSA’s Current Plans Are Draft and Do Not Contain Reliable Cost Estimates
paragraphs: Given the amount of uncertainty surrounding NNSA’s strategy for its  future pit manufacturing mission, NNSA’s current plans have been in a  state of flux over the past year and remain in draft. For example, LANL  issued a draft “Pit Manufacturing Program Execution Plan” in September  2007 to identify the scope, schedule, and budget necessary to execute  NNSA’s strategy for manufacturing RRW pits around the 2014 time frame.  The draft plan stated that the laboratory had not completed fundamental  planning and scheduling activities—which would include the development  of a fully integrated, resource-loaded schedule and risk management  assessment—to validate budget and schedule requirements. As a result,  LANL considered its plan to be preliminary. However, when the  explanatory statement accompanying the fiscal year 2008 NNSA  appropriation stated that the bill provided no funding for the RRW  program, LANL revised the plan to support an upgrade of the existing PF-4  building to produce up to 80 pits per year, as reflected in NNSA’s current  Complex Transformation planning effort. According to NNSA program  officials, LANL is still on track to issue a final plan by the summer of 2008,  which will reflect the program’s new strategy. However, they currently do  not have a final baseline for the plan’s cost, schedule, and scope.
Using the best available data, we estimate that NNSA’s current strategy  would entail spending over $1 billion on activities directly associated with  the pit manufacturing mission at LANL over the next 5 years. Specifically,  according to NNSA’s fiscal year 2009 budget request and out-year funding  schedule, NNSA plans to fund the following activities from fiscal years  2009 through 2013:    Over $730 million on activities associated with pit manufacturing    Over $258 million on activities associated with pit manufacturing  capability, which is associated with the capability to manufacture pits for  other warhead types beside the W88 and to develop the technology  necessary to manufacture pits at higher rates with reduced costs.
For fiscal year 2009, NNSA also plans to spend almost $43 million on  activities associated with pit certification. However, because NNSA  realigned all activities associated with the Pit Manufacturing and  Certification Campaign in its fiscal year 2009 budget request, we were not  able to account for the costs of these activities in NNSA’s out-year funding  schedule (from fiscal years 2010 through 2013).
NNSA’s plans also call for spending hundreds of millions of dollars to  install a second manufacturing line for producing pits. Specifically, in a  2006 study, LANL estimated that it could cost up to approximately   $500 million to install a new manufacturing line and upgrade the  electrorefining equipment in PF-4 by the 2014 time frame. However,  according to NNSA program officials, it could cost as much as $1 billion to  perform the necessary research and development work, procure and  install the necessary equipment, and upgrade the PF-4 infrastructure,  among other things.
In this report, we previously identified four types of activities that are  needed to support the production of pits, as well as a wide variety of other  defense-related activities at LANL. These activities include (1) operations  and maintenance of key facilities, including PF-4, CMR, and waste  processing facilities at TA-50 and TA-54; (2) processing of waste material  containing plutonium; (3) physical security; and (4) construction projects.
Operations and maintenance of key facilities: According to LANL  estimates, NNSA plans to spend about $846 million between fiscal years  2009 and 2013 on operations and maintenance activities at PF-4, CMR, and  waste processing facilities at TA-50 and TA-54. In addition to these costs,  NNSA is considering a plan to extend the life of the CMR building beyond  2010, which is the year when the building’s safety basis expires.  According to a 2006 LANL study, it will cost approximately $100 million  to continue operations at CMR from 2009 to 2013. Beyond 2013, LANL  estimated that it would cost an additional $160 million to $240 million to  upgrade some of CMR’s major systems, such as its electrical and heating  systems. As a result, LANL estimated that it could cost between $240  million to $360 million to maintain the CMR building up to and beyond the  2013 time frame. “The Board understands that LANL plans to develop a CMR facility safety basis for post- 2010 operations, with approval and implementation of this new safety basis in 2009. It is  unlikely that this effort will eliminate or mitigate the safety risks of operating the CMR  facility beyond 2010 without significant facility upgrades or mission changes. This  timetable leaves little time for NNSA to complete any necessary safety system upgrades or  identify alternative strategies for meeting national security priorities.”
According to NNSA officials, if NNSA cannot develop a satisfactory plan to  extend operations at CMR beyond 2010, NNSA would have to find a new  location at LANL or LLNL to perform analytical chemistry operations to  support pit manufacturing. They said that NNSA is still working through  this process with the Defense Nuclear Facilities Safety Board.
Processing of waste material containing plutonium: According to LANL  estimates, NNSA plans to spend about $87 million for fiscal years 2009  through 2013 to process, package, and ship transuranic waste at the waste  processing facilities at TA-50 and TA-54.
Physical security: According to LANL estimates, LANL plans to spend  about $179 million on security at the TA-55 site for fiscal years 2009  through 2013.
Construction projects: The largest single cost is associated with the  proposed CMR Replacement project, which would house LANL’s  analytical chemistry equipment and provide a new storage vault for  plutonium and other special nuclear material. The CMR Replacement  project has been in the planning stages since 2001. According to current  designs, the CMR Replacement project will include a storage vault of  about 13,000 square feet in size. However, the current design work did not  account for NNSA’s strategy to support a larger pit production rate of up  to 80 pits per year at PF-4. One NNSA official stated that a new design for  a larger CMRR Replacement facility, which would include an additional  9,000 square feet of laboratory space, could add as much as $500 million to  the total cost.
NNSA has not established a baseline for the cost and schedule of the CMR  Replacement project. In its fiscal year 2008 budget request, NNSA  estimated that this project would cost over $837 million and start  operations by the end of fiscal year 2014. However, in its fiscal year 2009  budget request, NNSA estimated that this project could cost over $2 billion  and did not provide a planned date for the start of operations. NNSA  officials said that NNSA does not expect to reach a final decision  regarding the design of this facility or the expected date of operations until  it issues a record of decision as part of its Complex Transformation  planning effort, which is expected later in 2008.
Finally, table 5 shows the costs associated with the remaining  construction projects that will support a variety of missions, including the  pit manufacturing mission, at LANL over the next decade. These costs  total to over $500 million.
section_title: Conclusions
paragraphs: The capability and capacity to manufacture pits for nuclear warheads is  important to maintaining the nation’s nuclear weapons deterrent, either  through supporting the current nuclear stockpile or producing any new  warheads, such as the proposed RRW. As such, NNSA’s reestablishment of  a W88 pit manufacturing capability at LANL represents a positive step.  However, NNSA’s long-term strategy for the pit manufacturing mission,  and its attendant costs and schedule, is in a state of flux. In our 1998  report on pit manufacturing, we recommended that DOD provide DOE  with its views on the pit manufacturing capacity needed to maintain the  then existing stockpile. Since then, the two agencies have reached a  decision to support a future pit manufacturing capacity of up to 80 pits per  year at LANL. However, DOD and NNSA have shifted their focus from the  existing stockpile to a potential stockpile of new RRWs. Whether DOD,  NNSA, and Congress commit to supporting the replacement of warheads  in the existing stockpile or the production of RRW-type warheads, NNSA  will need to take two key actions before it can complete any draft plans  for pit manufacturing and project future costs and schedules with any  precision. Specifically, building on its agreement with DOD, NNSA will  need to establish clear, well-defined production goals for the type and  number of war reserve pits to be produced each year at LANL. In addition,  using these production goals, NNSA will need to fully account and plan for  all costs associated with the pit manufacturing mission, including  supporting costs associated with operation and maintenance, waste  processing, security, and construction. Without these actions, we believe  that NNSA will not have a sufficient baseline against which to manage  future pit manufacturing missions.
section_title: Recommendations for Executive Action
paragraphs: To ensure that NNSA establishes a sufficient cost and schedule baseline  that it can use to manage pit manufacturing operations in an efficient and  cost-effective manner, we recommend that the Administrator of NNSA  take the following two actions:    Develop clear, well-defined production goals for the type and number of  war reserve pits to be produced each year at LANL and include them in  any plan for the future pit manufacturing mission.
Establish an integrated cost baseline for future pit manufacturing at LANL  that accounts for the entire pit-manufacturing mission, including  supporting costs associated with operation and maintenance, waste  processing, security, and construction of supporting facilities.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to NNSA and DOD for their review and  comment. NNSA did not specifically comment on our recommendations.  However, NNSA provided general comments on our findings that NNSA  had not developed complete cost estimates for the W88 pit manufacturing  mission and that NNSA had not developed clear requirements for the  number of W88 war reserve pits it planned to manufacture.
With respect to the completeness of NNSA’s cost estimate for W88 pit  manufacturing, NNSA stated that the pit manufacturing mission should not  be accountable for certain costs directly associated with the pit  manufacturing and certification project, such as activities at the Nevada  Test Site, or the costs associated with support facilities, such as PF-4,  because these facilities and their capabilities would be required to address  other program requirements, regardless of the presence of the pit  manufacturing program. However, we note that NNSA’s 1998 pit  manufacturing project plan did include both direct costs, such as  construction costs directly related to pit manufacturing, as well as support  costs, such as those needed to maintain the infrastructure at PF-4. In  addition, we found that currently LANL is developing a cost distribution  model that will allow the laboratory to allocate the cost of shared activities  at facilities such as PF-4 and CMR. Therefore, we continue to believe that  in order for NNSA to be able to successfully manage future pit  manufacturing missions such as those proposed in NNSA’s Complex  Transformation documents, it will need a cost baseline that accounts for  all costs, including an appropriate portion of the necessary supporting  costs.
With respect to the need for clear requirements for the number of W88 war  reserve pits NNSA planned to manufacture, NNSA stated that the main  purpose of the pit manufacturing and certification project was to  reconstitute pit manufacturing with a limited manufacturing capacity.  NNSA stated that the lack of available pits to support the surveillance  program for the W88 warhead was the near term requirement and the  driver for the project’s schedule. However, according to NNSA, the exact  number of pits to be manufactured was immaterial to the scope and  purpose of the project. While we agree that NNSA has successfully  reestablished the capability to manufacture W88 pits at LANL, as we state  in our report, and as acknowledged by NNSA officials responsible for the  pit manufacturing program, it is important for NNSA to establish the exact  number of war reserve pits that it plans to manufacture in the future.  NNSA’s ability to determine the specific number of war reserve pits it  plans to produce per year is directly tied to decisions Congress will need  to make about any future pit manufacturing mission. For example, a  projected manufacturing capacity of 50 pits per year would result in a very  different estimate for scope, cost, and schedule than a manufacturing  capacity of 10 pits per year. Therefore, we continue to believe that NNSA  needs to implement our recommendation that it develop clear, well- defined production goals.
NNSA’s comments on our draft report are included in appendix I. NNSA  also made technical comments, which we incorporated into this report as  appropriate. According to the Deputy Assistant to the Secretary of Defense  for Nuclear Matters, DOD did not have any comments on this report.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 10 days from the  report date. At that time, we will send copies of this report to the  Secretaries of Energy and Defense, the Administrator of NNSA, and  appropriate congressional committees. We also will make copies available  to others on request. In addition, the report will be available at no charge  on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions on 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  listed in appendix II.
section_title: Appendix I: Comments from the National Nuclear Security Administration
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, James Noel, Assistant Director;  Jason Holliday; and Stephen Marchesani made significant contributions to  this report.