Nuclear Weapons: Views on Proposals to Transform the Nuclear Weapons Complex
Published: 2006-04-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Over the past several years, a serious effort has begun to comprehensively reevaluate how the United States maintains its nuclear deterrent and what the nation's approach should be for transforming its aging nuclear weapons complex. The National Nuclear Security Administration (NNSA), a separately organized agency within the Department of Energy, is responsible for overseeing this weapons complex, which comprises three nuclear weapons design laboratories, four production plants, and the Nevada Test Site. At the direction of the Subcommittee on Energy and Water Development, the Secretary of Energy Advisory Board's (SEAB) Nuclear Weapons Complex Infrastructure Task Force issued a report in October 2005 that provided a systematic review of the requirements for the weapons complex for the next 25 years and offered its vision for an agile and responsive weapons complex. GAO was asked to discuss (1) the current actions NNSA is taking to address the SEAB task force's recommendations and (2) the critical steps that will be needed to achieve and sustain a meaningful, cost-effective transformation of the weapons complex.
section_title: What GAO Found
paragraphs: The SEAB task force report contained the following five recommendations: (1) immediately begin to modernize the cold war nuclear stockpile by designing a Reliable Replacement Warhead (RRW); (2) create a Consolidated Nuclear Production Center (CNPC) that contains a modern set of production facilities in one location; (3) consolidate all weapons-grade material and weapons components at the CNPC; (4) aggressively dismantle the cold war stockpile; and (5) create an Office of Transformation to oversee the transformation of the nuclear weapons complex. NNSA has offered a proposal for transforming the nuclear weapons complex that it believes is responsive to the recommendations in the SEAB task force report. Specifically, NNSA officials noted, they (1) will decide on a design competition for the RRW in November 2006, (2) have requested an increase of over $15 million in funding for dismantling legacy weapons in fiscal year 2007, and (3) have requested $15 million in their fiscal year 2007 budget proposal to create an Office of Transformation, among other things. However, NNSA does not support the SEAB task force's recommendation for a CNPC and the accompanying recommendation of consolidating weapons-grade material at the CNPC, primarily because it views these recommendations as too costly. Instead, NNSA has proposed building a consolidated center for processing plutonium, removing weapons-grade material from the three weapons laboratories, and modernizing the remaining production capabilities at their existing locations. Regardless of the approach chosen, any attempt to change an extremely complex enterprise must be based on solid analysis, careful planning, and effective leadership. GAO has identified the following four actions that, in its view, are critical to successfully transforming the weapons complex: (1) the Department of Defense will need to establish clear, long-term requirements for the nuclear stockpile by determining the types and quantities of nuclear weapons needed to provide for our nation's nuclear deterrent; (2) after the Department of Defense determines the size and composition of the future stockpile, NNSA will need to develop accurate cost estimates of the proposals for transforming the weapons complex because current estimates of the costs of transforming the weapons complex contain considerable uncertainty; (3) after NNSA selects a proposal based on accurate cost estimates, it will need to develop a clear transformation plan containing measurable milestones so that it can evaluate progress and the Congress can hold it accountable; and (4) the proposed Office of Transformation must have authority to make and enforce its decisions on transformation and must be held accountable by the Congress for achieving timely and cost-effective results.

section_title: Letter
paragraphs: We are pleased to be here today to provide our observations on the  October 2005 report, Recommendations for the Nuclear Weapons  Complex of the Future, prepared by the Secretary of Energy Advisory  Board’s (SEAB) Nuclear Weapons Complex Infrastructure Task Force.  After the end of the cold war, the United States, in 1992, began a unilateral  moratorium on underground nuclear testing. Subsequently, in 1993, the  Department of Energy (DOE), at the direction of the President and the  Congress, established the Stockpile Stewardship Program to ensure the  United States’ core intellectual and technical competencies in nuclear  weapons without testing. The National Nuclear Security Administration  (NNSA), a separately organized agency within DOE, is now responsible for  carrying out the Stockpile Stewardship Program through a nuclear  weapons complex (weapons complex) that comprises three nuclear  weapons design laboratories (weapons laboratories), four production  plants, and the Nevada Test Site. With the creation of the Stockpile  Stewardship Program, the mission of the weapons complex changed from  “designing, building, and testing” successive generations of weapons to  extending the life of the existing nuclear weapons stockpile through  “scientific study, computer simulation, and refurbishment.”
Several events over the past few years have made it clear that it is time for  the United States to comprehensively reevaluate how it maintains its  nuclear deterrent and to develop and implement a strategy for  transforming its weapons complex. For example, the 2001 Nuclear Posture  Review found that the nuclear weapons infrastructure had atrophied and  needed to be repaired; it also called for the development of a “responsive  infrastructure” that would support a smaller nuclear deterrent.  Subsequently, the 2002 Moscow Treaty between the United States and  Russia set a goal of reducing the number of deployed U.S. nuclear  warheads to between 1,700 and 2,200 by 2012. More recently, NNSA, as  directed by the conference report accompanying DOE’s fiscal year 2005  appropriations act, created the Reliable Replacement Warhead (RRW)  program to study a new approach to maintaining nuclear warheads over  the long term by making weapons easier to manufacture, maintain,  dismantle, and certify without nuclear testing.
In this context, this Subcommittee requested, and the SEAB task force has  provided, a systematic review of the requirements for the weapons  complex over the next 25 years. The SEAB task force report contains five  major recommendations that, combined with numerous supporting  recommendations, offer the task force’s vision for an agile and responsive  weapons complex. These recommendations are as follows:  Immediately begin to modernize the nuclear weapons stockpile by  designing a RRW.
Create a Consolidated Nuclear Production Center (CNPC) that contains a  modern set of production facilities in one location.
Consolidate all Category I and Category II quantities of Special Nuclear  Material and weapon primary and secondary components at the CNPC.
Aggressively dismantle the cold war stockpile.
Create an Office of Transformation to oversee the transformation of the  weapons complex.
Our testimony discusses (1) the current actions NNSA is taking to address  the SEAB task force’s recommendations and (2) the critical actions  needed to achieve and sustain a meaningful, cost-effective transformation  of the weapons complex.
To carry out our objectives, we reviewed the final SEAB task force report  and the comments provided by various parties on the initial draft. We  interviewed the SEAB task force members individually to obtain their  views on the final report and NNSA’s response to it. We met with various  NNSA officials, including the Deputy Administrator for Defense Programs  and the head of NNSA’s Responsive Infrastructure Steering Committee,  and with the Deputy Assistant to the Secretary of Defense (Nuclear  Matters). We also reviewed the methods the SEAB task force used to  develop cost estimates for options presented in its report. Finally, we  reviewed a variety of documents, including the Nuclear Posture Review,  and the recent Defense Science Board report, entitled Report of the  Defense Science Board Task Force on Nuclear Capabilities. We  performed our work between February 2006 and April 2006 in accordance  with generally accepted government auditing standards.
NNSA has offered a proposal for transforming the weapons complex that  it believes is responsive to the recommendations in the SEAB task force  report. Specifically, NNSA officials noted, they (1) will decide on a design  competition for the RRW in November 2006, (2) have requested an  increase of over $15 million in funding for dismantling legacy weapons in  fiscal year 2007, and (3) have requested $15 million in their fiscal year 2007  budget proposal to create an Office of Transformation and to begin  studying ways to transform the business practices of the weapons  complex. However, NNSA does not plan to adopt the SEAB task force’s  recommendation for a CNPC and the accompanying recommendation of  consolidating all Category I and II quantities of Special Nuclear Material at  the CNPC, primarily because it views these recommendations as too  costly. Instead, NNSA has proposed building a consolidated center for  processing plutonium, removing Category I and II Special Nuclear Material  from the three weapons laboratories, and modernizing the remaining  production capabilities at their existing locations.
Regardless of the approach chosen to transform the weapons complex,  any attempt to change such an extremely complex enterprise must be  based on solid analysis, careful planning, and effective leadership. We  have identified four actions that, in our view, are critical to successfully  transforming the weapons complex. As the Congress oversees NNSA’s  future actions, it should expect to see each of these actions carefully and  fully implemented:    The Department of Defense (DOD) will need to establish clear, long-term  requirements for the stockpile. Our current stockpile comprises nine  weapon systems, all of which were designed during the cold war. Several  of these systems—the B61, W76, and W80—are currently having their  useful lives extended for up to 30 years through NNSA’s Stockpile Life  Extension Program. However, these life extensions are very expensive,  and some have already experienced cost and schedule slippages. NNSA is  now evaluating a new warhead—the RRW—which may be able to take the  place of some existing warheads. Before any plans for a new weapons  complex can be made final, however, in our view, DOD will need to  determine the systems, their capabilities, their quantities, and the schedule  it needs to provide for our nation’s nuclear deterrent.
NNSA will need to provide accurate estimates of the costs of  transformation. Once a decision is made about the size and composition  of the stockpile, NNSA can develop accurate estimates of the costs of  proposals for transforming the weapons complex. As we have noted in  numerous reports over the last several years on key projects such as the  National Ignition Facility and the Stockpile Life Extension Program, NNSA  has had difficulty estimating costs and schedules and adhering to them.  Some cost estimates to transform the weapons complex were developed  as part of the SEAB task force report and, according to NNSA officials,  NNSA is currently using the same cost models for its effort. However,  these estimates need considerable refinement. As a result, NNSA will need  to develop credible, defensible cost estimates for transforming the  weapons complex.
NNSA will need to develop a transformation plan with clear milestones  for measuring progress. Developing workable plans, with realistic,  measurable milestones has been a continuing problem for NNSA. For  example, as we noted in our February 2006 report on NNSA’s effort to  develop and implement a new method for assessing and certifying the  stockpile, NNSA does not have an integrated plan for carrying out this  important activity or clear milestones for measuring progress. Without  question, transforming the weapons complex will be a much more  daunting enterprise. However, without a clear transformation plan that  contains measurable milestones, NNSA will have no way to evaluate its  progress, and the Congress will have no way to hold NNSA accountable.
Change will require a strong Office of Transformation. As we noted in a  2003 report, one of the key practices for successfully transforming an  organization is to ensure that top leadership sets the direction, pace, and  tone for the transformation. Through its recent reorganizations, NNSA has  shown that it can move from what was often called a “dysfunctional  bureaucracy” to an organization with clearer lines of authority and  responsibility. NNSA officials have embraced the SEAB task force’s  proposal for an Office of Transformation. However, in order for such an  office to be effective, it must (1) report directly to the Administrator,  NNSA; (2) have real authority to make and enforce its decisions; and (3)  be held accountable by the Congress for achieving results in a cost- effective and timely manner.
subsections: section_title: Background
paragraphs: NNSA conducts nuclear weapon and nonproliferation-related national  security activities in research and development laboratories, production  plants, and other facilities. Specifically, NNSA operates three weapons  laboratories—Lawrence Livermore National Laboratory (LLNL),  California; Los Alamos National Laboratory (LANL), New Mexico; and the  Sandia National Laboratories, New Mexico and California; and four  nuclear weapons production sites—the Pantex Plant, Texas; the Y-12  Plant, Tennessee; the Kansas City Plant, Missouri; and the Savannah River  Site, South Carolina. NNSA also operates the Nevada Test Site. To  implement its nuclear weapons programs, NNSA received about $6.4  billion for fiscal year 2006 and has requested more than $6.4 billion for  fiscal year 2007. Between fiscal years 2008 and 2011, NNSA is proposing to  spend almost $27 billion for these programs.
Over the past decade, NNSA has invested a substantial amount of money  in sustaining the cold war stockpile and upgrading the three weapons  laboratories with new, state-of-the-art experimental and computing  facilities. However, as described in studies over the past decade, the  production infrastructure of the weapons complex is aging and  increasingly outdated. For example, a 2000 DOE Office of Inspector  General report concluded that the postponement of repairs to aging and  deteriorating facilities had resulted in delays in weapons modification,  remanufacture, and dismantlement, among other things. In addition, a  2001 report by the Foster Panel found the state of the production facilities  to be troubling and recommended that NNSA restore missing production  capabilities and refurbish the production infrastructure. In its fiscal year  2007 budget request, NNSA estimated that it will cost $2.4 billion to reduce  the backlog of deferred maintenance at these facilities to an appropriate  level consistent with industry best practices.
Events over the past several years have served to intensify concern about  how the United States maintains its nuclear deterrent and what the  nation’s strategy should be for transforming the weapons complex.  Specifically:    The 2001 Nuclear Posture Review stated, among other things, that cold  war practices related to nuclear weapons planning were obsolete, and few  changes had been made to the size or composition of the nation’s nuclear  forces. Furthermore, there had been underinvestment in the weapons  complex, particularly the production sites. The Nuclear Posture Review  called for, among other things, the development of a “responsive  infrastructure” that would be sized to meet the needs of a smaller nuclear  deterrent while having the capability to respond to future strategic  challenges.
The terrorist attacks of September 11, 2001, led DOE to increase the size  of its Design Basis Threat, a classified document that identifies the size  and capabilities of terrorist forces. This increase in the size of the Design  Basis Threat has greatly increased NNSA’s cost for protecting its weapons- grade nuclear material.
The 2002 Moscow Treaty between the United States and Russia set a goal  of reducing the number of deployed U.S. nuclear warheads to between  1,700 and 2,200 by 2012. However, a significant number of existing  warheads would be kept in reserve to address potential technical  contingencies with the existing stockpile.
NNSA, at the Congress’ direction, created the RRW program to study a  new approach to maintaining nuclear warheads over the long term. The  RRW program would redesign weapon components to be easier to  manufacture, maintain, dismantle, and certify without nuclear testing,  potentially allowing NNSA to transition to a smaller, more efficient  weapons complex. A design competition between LANL and LLNL is  scheduled to end in November 2006.
Finally, in recent congressional testimony, the Secretary of Energy and the  Administrator of NNSA emphasized to the Congress that while they  believe stockpile stewardship is working, the current cold war legacy  stockpile is the wrong stockpile for the long term, and the current nuclear  weapons infrastructure is not responsive to unanticipated events or  emerging threats.
Current NNSA plans call for substantial funding to operate the existing  weapons complex. For example, according to NNSA’s fiscal year 2007  budget request, over the next 5 years, NNSA plans to spend about $7.4  billion to operate and maintain the existing infrastructure of the weapons  complex. In addition, NNSA plans to spend $1.8 billion on new  construction projects. These construction projects include  the Highly Enriched Uranium Materials Facility at the Y-12 Plant, which is  estimated to cost $335 million and be completed in fiscal year 2007; the Chemistry and Metallurgy Research Replacement facility at LANL,  which is estimated to cost $838 million and be completed in fiscal year  2013; and the proposed Uranium Processing Facility at the Y-12 Plant, which is  projected to cost between $600 million to $1 billion.
During testimony before this Subcommittee in March 2004, the Secretary  of Energy agreed to conduct a comprehensive review of the weapons  complex. Subsequently, in January 2005, the Secretary of Energy  requested the SEAB to form the Nuclear Weapons Complex Infrastructure  Task Force to assess the implications of presidential decisions on the size  and composition of the stockpile; the cost and operational impacts of the  new Design Basis Threat; and the personnel, facilities, and budgetary  resources required to support a smaller stockpile. The review was also to  evaluate opportunities for consolidating Special Nuclear Material,  facilities, and operations across the weapons complex in order to  minimize security requirements and the environmental impacts of  continuing operations. The SEAB task force formally transmitted the final  report to the Secretary of Energy in October 2005.
According to the report, the SEAB task force assessed the impact of its  recommendations on near-term funding requirements, as well as total  costs, for the weapons complex over the next 25 years. The report stated  that implementing all of the recommendations will increase near-term  costs substantially but would result in a substantial reduction in future  operating costs after the CNPC is in full operation. The SEAB task force  estimated that the long-term cost savings would be approximately twice  the near-term cost increases.
section_title: NNSA Actions to Implement the SEAB Task Force Recommendations
paragraphs: Initially, NNSA officials did not provide us with any detailed information  concerning their plans for transforming the infrastructure of the weapons  complex and for addressing the recommendations in the SEAB task force  report. Instead, NNSA officials described to us the following process they  were using to establish a detailed vision for the future weapons complex  and to identify a “path forward” for achieving that vision:  In March 2005, NNSA established a Responsive Infrastructure Steering  Committee and created a position within the Office of Defense Programs  to lead this effort.
In October 2005, NNSA received the final SEAB task force report. NNSA  officials said that they have reviewed the recommendations from this  report, along with recommendations from other advisory bodies, such as  the Defense Science Board.
In November 2005 and January 2006, NNSA held two meetings for senior- level officials within the weapons complex to establish a broad range of  planning options, which NNSA refers to as its “preferred infrastructure  planning scenario.”
In January 2006, NNSA held a 3-week session for about 50 key midlevel  managers within the weapons complex to evaluate the proposed planning  options.
As a result of this process, NNSA recently offered a proposal for  transforming the weapons complex that it believes is responsive to the  recommendations in the SEAB task force report. Specifically, NNSA  officials stated that    NNSA will decide on the RRW design competition in November 2006 and,  assuming that the RRW is technically feasible, will seek authorization to  proceed to engineering development and production;   NNSA is requesting an additional $15.6 million in its fiscal year 2007  budget request to dismantle legacy weapons material at the Pantex Plant;  and   NNSA is requesting about $15 million for fiscal year 2007, as well as over  $30 million annually from fiscal years 2008 through 2011, to support the  implementation of its responsive infrastructure strategy, including the  creation of an Office of Transformation within the Office of Defense  Programs.
However, NNSA does not plan to adopt the SEAB task force’s  recommendation for a CNPC and the accompanying recommendation of  consolidating all Category I and II quantities of Special Nuclear Material at  the CNPC. NNSA believes that these recommendations are not affordable  or feasible. For example, in recent congressional testimony, the Deputy  Administrator for Defense Programs said that the SEAB task force report’s  recommendation on the timing for a CNPC—i.e., that a CNPC could be  designed, built, and operational by 2015—is not plausible and  underestimates the challenges of transitioning a unique and highly skilled  workforce to a new location. He also stated that the recommendation does  not recognize the challenge of meeting near-term requirements of the  current stockpile and transforming the weapons complex infrastructure at  the same time. In addition, he stated that it may be decades before all  existing legacy weapons are fully removed from the stockpile and  dismantled.
Instead, NNSA has proposed the following plan for the 2030 weapons  complex, which it states will achieve many of the benefits of the SEAB  task force’s approach in a way that is technically feasible and affordable  over both the near and longer term:    Consolidated plutonium center. All research and development (except  certain experiments at the Nevada Test Site), surveillance, and production  activities involving Category I and II quantities of plutonium would be  transferred to a consolidated plutonium center. The center would have a  baseline production capacity of 125 pits per year by 2022 and would be  situated at an existing Category I and II Special Nuclear Material site. In  the interim, NNSA would upgrade the plutonium facility at Tech Area 55 at  LANL to produce 30-50 pits per year and operate the Chemistry and  Metallurgy Research Replacement facility at LANL as a Category I and II  Special Nuclear Material facility.
Consolidation of Category I and II Special Nuclear Material. This  material would be consolidated to fewer sites, and to fewer locations  within sites. Specifically, NNSA would remove all Category I and II Special  Nuclear Material from Sandia National Laboratory by 2008 and from LLNL  by 2014, and would cease all activities involving this material at LANL by  2022. The remaining NNSA sites with Category I and II Special Nuclear  Material would include the consolidated plutonium center, the Nevada  Test Site, the Pantex Plant, the Y-12 Plant, and the Savannah River Site.
Modernizing the remaining production sites. The planned Uranium  Processing Facility at the Y-12 Plant would consolidate existing highly  enriched uranium contained in legacy weapons, dismantle legacy warhead  secondaries, support associated research and development, and provide a  long-term capacity for new secondary production. Tritium production and  stockpile support services would remain at the Savannah River Site. All  weapons assembly and disassembly would be carried out at a Pantex Plant  modernized for increased throughput for the long term. In addition, NNSA  would build a new, nonnuclear component production facility by 2012 at  an unspecified location. Finally, the Nevada Test Site would become the  only site for large-scale hydrodynamic testing, which measure how  stockpile materials behave when exposed to explosively driven shocks.
section_title: Four Actions Will Be Critical to Successfully Transforming the Complex
paragraphs: Regardless of the approach chosen to transform the weapons complex,  any attempt to change such an extremely complex enterprise must be  based on solid analysis, careful planning, and effective leadership. We  have identified four actions that, in our view, are critical to the successful  transformation of the weapons complex. As the Congress oversees NNSA’s  future actions, it should expect to see each of these actions carefully and  fully implemented.
subsections: section_title: DOD Will Need to Establish Clear, Long-Term Requirements for the Stockpile
paragraphs: The U.S. nuclear weapons stockpile consists of nine weapon types. (See  table 1.) The lifetimes of the weapons currently in the stockpile have been  extended well beyond the minimum life for which they were originally  designed—generally about 20 years—increasing the average age of the  stockpile and, for the first time, leaving NNSA with large numbers of  weapons that are close to 30 years old.
NNSA is currently rebuilding several of these weapon types through the  Stockpile Life Extension Program. Already, the W87 has been refurbished.  In addition, the B61, W76, and W80 are well into their respective  refurbishments. The first production unit for the B61 is scheduled for  September 2006, while the first production unit for the W76 is scheduled  for September 2007 and for the W80 for January 2009. These are costly and  difficult undertakings. According to NNSA’s fiscal year 2007 budget  request, over the next 5 years, the agency will need $118.4 million for the  B61 life extension, $669.9 million for the W76, and $581.5 million for the  W80. These efforts place considerable demands on the computational and  experimental facilities of the weapons laboratories, as well as the  production facilities. Finally, some of the life extensions have experienced  significant cost and schedule overruns. For example, the total cost of the  W80 life extension has increased by almost $600 million, while the first  production unit date has slipped from February 2006 to the current date of  January 2009.
In its 2001 Nuclear Posture Review, DOD described the need to  substantially reduce operationally deployed strategic warheads through  2012. These reductions were subsequently reflected in the Moscow Treaty  between the United States and Russia, which was signed in May 2002. As  part of this strategy, DOD has stated its support for the development of an  RRW, which could enable reductions in the number of older, nondeployed  warheads maintained as a hedge against reliability problems in deployed  systems and assist in the evolution to a smaller and more responsive  nuclear weapons infrastructure. Currently, LANL and LLNL are developing  competing designs for an RRW deployed on a submarine-launched ballistic  missile, with the first production unit planned for fiscal year 2012.  However, since the RRW design competition will not be completed until  November 2006, more information on the viability of the RRW program  will be necessary before any firm plans can be drawn up, budgeted, and  implemented. In particular, it is not clear at this point whether the RRW  can achieve the military characteristics, such as yield, provided by the  current stockpile. Some NNSA officials have indicated that the military  characteristics may need to be relaxed in order to design a warhead that is  safer, easier to build, and easier to maintain.
Producing an RRW warhead, while at the same time refurbishing a  significant portion of the stockpile and continuing to dismantle retired  weapons, will be a difficult and costly undertaking. Given NNSA’s  performance to date with the life extension programs and the current  unresolved questions about the RRW, in our view, DOD will need to  establish clear, long-term requirements for the nuclear stockpile before  NNSA can make any final decisions about transforming the weapons  complex. Specifically, DOD, working with NNSA through the Nuclear  Weapons Council, needs to determine the types and quantities of nuclear  weapons that will provide for our nation’s nuclear deterrent over the long  term. To facilitate this process, and to provide a foundation for  transforming the weapons complex, the Congress may wish to consider  setting firm deadlines for DOD, NNSA, and the Nuclear Weapons Council  to determine the future composition of the nuclear stockpile.
section_title: NNSA Will Need to Provide Accurate Estimates of the Costs of Transformation
paragraphs: Once a decision about the size and composition of the stockpile is made,  NNSA will need accurate estimates of the costs of proposals for  transforming the weapons complex. However, historically, NNSA has had  difficulty developing realistic, defensible cost estimates, especially for  large complex projects. For example, in our August 2000 report on the  National Ignition Facility, we found that NNSA and LLNL managers  greatly underestimated the costs of creating such a technically complex  facility and failed to include adequate contingency funding, which virtually  assured that the National Ignition Facility would be over budget and  behind schedule. Similarly, as noted in a March 2005 NNSA report,  inadequate appreciation of the technical complexities and inadequate  contingency funding directly contributed to the cost overruns and  schedule slippage experienced by the Dual Axis Radiographic  Hydrodynamic Test facility. As noted earlier, NNSA has experienced  similar cost and schedule problems with some of its life extension efforts.
Some cost estimates to transform the weapons complex were included in  the SEAB task force report. Specifically, using the results of computer  models developed at LANL and LLNL, the SEAB task force estimated that  NNSA would need about $175 billion between now and 2030 to support its  current baseline program and modernize the current weapons complex in  place, while NNSA would need only $155 billion to carry out the task  force’s recommendations. According to NNSA officials, NNSA is currently  using the same cost models to evaluate its proposal.
However, according to SEAB task force and NNSA and laboratory  officials, while the LANL and LLNL models are useful for analyzing overall  cost trends and evaluating the cost implications of alternative strategies,  they are not currently designed to provide overall life-cycle cost estimates.  In addition, we found, among other things, that the cost data used in the  models have a high degree of uncertainty associated with them and that  the models do not currently have the ability to provide any confidence  intervals around their estimates. Several of the SEAB task force members  told us that they recognize the limitations associated with their cost  estimates. Since they did not have the time to fully analyze the costs and  implementation issues associated with their recommendations, they  expected that the proposed Office of Transformation would perform the  necessary, detailed cost-benefit analyses of their recommendations in  order to make the most informed decisions.
As previously mentioned, NNSA officials have stated that they do not  support building a CNPC because they believe that it is neither affordable  nor feasible. However, until NNSA develops a credible, defensible method  for estimating life-cycle costs and performs detailed cost analyses of the  recommendations contained in the SEAB task force report, as well as its  own proposal, it will not be possible to objectively evaluate the budgetary  impact of any path forward.
section_title: NNSA Will Need to Develop a Transformation Plan with Clear Milestones for Measuring Progress
paragraphs: According to one count, NNSA has established over 70 plans with  associated performance measures to manage the Stockpile Stewardship  Program. Nevertheless, over the last 6 years, we have repeatedly  documented problems with NNSA’s process for planning and managing its  activities. For example, in a December 2000 report prepared for this  Subcommittee, we found NNSA needed to improve its planning process so  that there were linkages between individual plans across the Stockpile  Stewardship Program and that the milestones contained in NNSA’s plans  were reflected in contractors’ performance criteria and evaluations.  However, in February 2006, we reported similar problems with how NNSA  is managing the implementation of its new approach for assessing and  certifying the safety and reliability of the nuclear stockpile. Specifically,  we found that NNSA planning documents did not contain clear, consistent  milestones or a comprehensive, integrated list of the scientific research  being conducted across the weapons complex in support of the Primary  and Secondary Assessment Technologies programs. These programs are  responsible for setting the requirements for the computer models and  experimental data needed to assess and certify the safety and reliability of  nuclear warheads. We also found that NNSA had not established adequate  performance measures to determine the progress of the weapons  laboratories in developing and implementing this new methodology.
However, the need for effective planning applies to more than the  Stockpile Stewardship Program. One of the major recommendations of the  SEAB task force is to consolidate Category I and II Special Nuclear  Material at the CNPC. In our July 2005 report, we noted that the successful  consolidation of Special Nuclear Material into fewer locations is a crucial  component of several DOE sites’ Design Basis Threat implementation  plans. Such consolidation requires the cooperation of a variety of entities,  including NNSA’s Office of Secure Transportation, which moves weapons- grade material from site to site. In our report, we recommended that DOE  develop a departmentwide Design Basis Threat implementation plan that  includes the consolidation of Special Nuclear Material. However, while  DOE has established a Nuclear Material Disposition Consolidation and  Coordination Committee, it has yet to develop such a comprehensive plan.
The process of transforming the weapons complex will take a long time to  complete—as long as two decades, according to some estimates. As a  result, NNSA will need to develop a transformation plan with clear  milestones that all involved can work toward and that the Congress can  use to hold NNSA accountable. For example, as we stated in a 2003 report,  one key practice in successful transformations is to set implementation  goals and a time line to build momentum and show progress from day 1.  In addition, given the demand for transparency and accountability in the  public sector, these goals and time lines should be made public. We would  note that NNSA should be able to establish milestones for some activities  quickly, while others will take more time. For example, NNSA’s Deputy  Administrator for Defense Programs has indicated a willingness to  establish an Office of Transformation and to implement other SEAB task  force recommendations, such as developing a consistent set of business  practices across the weapons complex. In these situations, the Congress  should expect NNSA to move quickly to establish specific milestones  needed to create the Office of Transformation, select key staff to fill this  office, and implement key initiatives.
We recognize that NNSA will not be able to establish specific milestones in  some areas until after the Office of Transformation has performed a  detailed, cost-benefit analysis of both the recommendations in the SEAB  task force report and of NNSA’s own preferred approach. However, once  this analysis is complete, the Congress should expect to see specific,  detailed plans and accompanying milestones for the RRW program, the  establishment of a pit production capability, and the other adopted  recommendations from the SEAB task force report.
section_title: Change Will Require a Strong Office of Transformation
paragraphs: Many of the recommendations in the SEAB report are not new. A number  of studies over the past 15 years have stressed the need to transform the  weapons complex. However, for a variety of reasons, DOE and NNSA have  never fully implemented these ideas. One of the key problems that NNSA  has experienced during this time has been its inability to build an  organization with clear lines of authority and responsibility. As we noted  in our June 2004 report, NNSA, through its December 2002 reorganization,  made important strides in providing clearer lines of authority and  responsibility. However, we also noted problems in certain oversight  functions, such as safety. We are currently evaluating NNSA’s management  effectiveness for the Subcommittee on Strategic Forces of the House  Committee on Armed Services.
The Congress, and Chairman Hobson in particular, have offered leadership  in supporting the creation of the SEAB task force and in funding the RRW  program. However, as we stated in a 2003 report, organizational  transformation entails fundamental and often radical change. As a result,  top leadership must set the direction, pace, and tone for the  transformation, while simultaneously helping the organization remain  focused on the continued delivery of services. One key strategy is to  dedicate a strong and stable implementation team that will be responsible  for the transformation’s day-to-day management. Accordingly, this team  must be vested with the necessary authority and resources to set  priorities, make timely decisions, and move quickly to implement  decisions. Therefore, in our view, it is imperative that the proposed Office  of Transformation (1) report directly to the Administrator of NNSA; (2) be  given sufficient authority to conduct its studies and implement its  recommendations; and (3) be held accountable for creating real change  within the weapons complex.
Mr. Chairman, this concludes my prepared statement. I would be happy to  respond to any questions that you or Members of the Subcommittee may  have.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: For further information on this testimony, 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  statement. James Noel, Assistant Director; Jason Holliday; and Peter  Ruedel made key contributions to this testimony.
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