Nuclear Weapons: Views on NNSA's Proposal to Transform the Nuclear Weapons Complex
Published: 2008-07-17T00:00:00

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 (DOE), is responsible for overseeing this weapons complex, which comprises three nuclear weapons design laboratories, four production plants, and the Nevada Test Site. In December 2007, NNSA issued a draft report on potential environmental impacts of alternative actions to transform the nuclear weapons complex, which NNSA refers to as Complex Transformation. NNSA's preferred action is to establish a number of "distributed centers of excellence" at sites within the existing nuclear weapons complex, including the Los Alamos National Laboratory for plutonium capabilities, the Y-12 Plant for uranium capabilities, and the Pantex Plant for weapons assembly, disassembly, and high explosives manufacturing. NNSA would continue to operate these facilities to maintain and refurbish the existing nuclear weapons stockpile as it makes the transition to a smaller, more responsive infrastructure. GAO was asked to discuss NNSA's Complex Transformation proposal. This testimony is based on previous GAO work.
section_title: What GAO Found
paragraphs: Transforming the nuclear weapons complex will be a daunting task. In April 2006 testimony before the Subcommittee on Energy and Water Development, House Committee on Appropriations, GAO identified four actions that, in its view, were critical to successfully achieving the transformation of the complex. On the basis of completed and ongoing GAO work on NNSA's management of the nuclear weapons complex, GAO remains concerned about NNSA's and the Department of Defense's (DOD) ability to carefully and fully implement these four actions. For this reason, GAO believes that the Congress must remain vigilant in its oversight of Complex Transformation. Specifically, NNSA and DOD have not established clear, long-term requirements for the nuclear weapons stockpile. While NNSA and DOD have considered a variety of scenarios for the future composition of the nuclear weapons stockpile, no requirements have been issued. It is GAO's view that NNSA will not be able to develop accurate cost estimates or plans for Complex Transformation until stockpile requirements are known. Further, recent GAO work found that the absence of stockpile requirements is affecting NNSA's plans for manufacturing a critical nuclear weapon component. NNSA has had difficulty developing realistic cost estimates for large, complex projects. In September 2007, a contractor provided NNSA with a range of cost estimates for over 10 different Complex Transformation alternatives. However, the contractor stated that (1) its analysis was based on rough order-of-magnitude estimates and (2) NNSA should not use its cost estimates to predict budget-level project costs. In addition, in March 2007 GAO reported that 8 of 12 major construction projects being managed by DOE and NNSA had exceeded their initial cost estimates. NNSA will need to develop a transformation plan with clear, realistic milestones. GAO expects that once NNSA decides the path forward for Complex Transformation later this year, NNSA will put forward such a plan. However, GAO has repeatedly documented problems with NNSA's ability to implement its plans. For example, in February 2006 GAO reported problems with the planning documents that NNSA was using to manage the implementation of its new approach for assessing and certifying the safety and reliability of the nuclear stockpile. Successful transformation requires strong leadership. In 2006, NNSA created an Office of Transformation to oversee its Complex Transformation activities. However, GAO is concerned that the Office of Transformation may not have sufficient authority to set transformation priorities for all of NNSA, specifically as they affect nuclear nonproliferation programs.

section_title: Letter
paragraphs: We are pleased to be here today to provide our observations on the  National Nuclear Security Administration’s (NNSA) proposal, known as  Complex Transformation, to modernize the nuclear weapons complex. As  you know, NNSA, a separately organized agency within the Department of  Energy (DOE), is responsible for conducting nuclear weapon and  nonproliferation-related national security activities in research and  development laboratories, production plants, and other facilities. With the  moratorium on underground nuclear testing that began in 1992 and the  subsequent creation of the Stockpile Stewardship Program, the mission of  the nuclear 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.” To carry out its weapons activities, NNSA  received about $6.3 billion for fiscal year 2008 and has requested about  $6.6 billion for fiscal year 2009. Between fiscal years 2010 and 2013, NNSA  is proposing to spend almost $29 billion for these programs.
Over the past decade, NNSA has invested billions of dollars in sustaining  the Cold War-era stockpile and upgrading the three nuclear weapons  design laboratories with new, state-of-the-art experimental and computing  facilities. In contrast, the production infrastructure of the nuclear weapons  complex is aging and increasingly outdated. The 2001 Nuclear Posture  Review found that the nuclear weapons manufacturing infrastructure had  atrophied and needed to be repaired. NNSA estimates 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. The 2001  Nuclear Posture Review also called for the development of a “responsive  infrastructure” that would support a smaller nuclear deterrent. The United  States subsequently committed to stockpile reductions in the Moscow  Treaty with Russia, which was ratified in 2003.
NNSA’s Complex Transformation effort seeks to address these issues by  transforming to a smaller, more responsive infrastructure—one that will  ultimately support a smaller nuclear weapons stockpile—while continuing  to maintain and refurbish the existing nuclear weapons stockpile in the  interim. In recent years, NNSA and the Department of Defense (DOD)  have advocated replacing the existing stockpile with one composed of  reliable replacement warheads (RRW), which could potentially be easier  to manufacture, maintain, and certify without the need for underground  nuclear tests. They believe the RRW program would help transform the  complex. In addition, in January 2008 the Congress established the  Congressional Commission on the Strategic Posture of the United States,  which must conduct a review of nuclear weapons policies and  requirements. NNSA and DOD must cooperate with the Commission as it  conducts its review.
In December 2007, NNSA issued a draft report on the potential  environmental impacts of alternative Complex Transformation actions.  NNSA’s preferred action is to establish a number of “distributed centers of  excellence” at sites within the existing nuclear weapons complex. The  individual centers of excellence proposed include the Los Alamos National  Laboratory (LANL) for plutonium capabilities, the Y-12 Plant for uranium  capabilities, and the Pantex Plant for weapons assembly and disassembly  as well as for high explosives manufacturing. In addition, NNSA’s  preferred action includes the consolidation of significant quantities of  special nuclear material. Implementation of the preferred action is  supported by two major construction projects: (1) the Chemistry and  Metallurgy Research Replacement Facility at LANL, which would provide  upgraded analytical chemistry capabilities to support manufacturing of  “pits”—a key nuclear weapons component that contains plutonium; and  (2) the Uranium Processing Facility at Y-12, which would provide  upgraded capabilities to support manufacturing and processing of  weapons components containing uranium. The total costs of these two  projects are currently estimated to be as high as $5.5 billion.
Our testimony discusses our concerns with NNSA’s Complex  Transformation proposal and is based on completed and ongoing GAO  work. To carry out our objective, we relied on previous GAO work,  including our April 2006 testimony before the Subcommittee on Energy  and Water Development, Committee on Appropriations, House of  Representatives; a May 2008 report on nuclear weapon pit manufacturing;  and our March 2007 report on DOE’s management of major construction  projects. We conducted the performance audit work that supports this  statement in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to produce 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 statements  today.
Transforming the nuclear weapons complex will be a daunting task. The  facilities that maintain and refurbish the legacy nuclear weapons stockpile  must remain operational during the transition to a smaller, more  responsive infrastructure while minimizing the potential safety, security,  and environmental impacts of relocating and constructing this  infrastructure. In our April 2006 testimony, we identified four actions that,  in our view, are critical to successfully achieving the transformation of the  complex. We continue to believe these actions must be addressed.  Specifically:    NNSA and DOD will need to establish clear, long-term requirements for  the stockpile by determining the types and quantities of nuclear weapons  needed;    After stockpile requirements are developed, NNSA will need to provide  accurate estimates of the costs of transformation;     NNSA will need to develop and implement a plan with clear milestones for    NNSA’s Office of Transformation must have the authority to make and  enforce its decisions on transformation and be held accountable by the  Congress for achieving timely and cost-effective results.
On the basis of our review of recent and ongoing GAO work on NNSA’s  management of the nuclear weapons complex, we remain concerned  about NNSA’s and DOD’s ability to carefully and fully implement these  four actions. For this reason, we believe that the Congress must remain  vigilant in its oversight of Complex Transformation.
subsections: section_title: NNSA and DOD Have Not Established Clear, Long-Term Requirements for the Nuclear Weapons Stockpile
paragraphs: The United States’ nuclear weapons stockpile comprises nine nuclear  weapons types, all of which were designed during the Cold War. Two of  these systems—the B61 and the W76—are currently being refurbished to  extend their useful lives for up to 30 years through NNSA’s Life Extension  Program. In May 2008, we reported that, over the past few years, NNSA  and DOD have considered a variety of scenarios for the future  composition of the nuclear stockpile that would be based on different  stockpile sizes and the degree to which the stockpile would incorporate  new RRW designs. For example, NNSA and DOD have considered how  large the stockpile needs to be in order to maintain a sufficiently robust  and responsive manufacturing infrastructure to respond to future global  geopolitical events. In addition, NNSA and DOD have considered the  number of warheads that will need to be either refurbished or replaced in  the coming decades. However, NNSA and DOD have not issued  requirements defining the size and composition of the future stockpile.
We discussed one effect of this lack of clear stockpile requirements in our  May 2008 report on plutonium pit manufacturing. Specifically, we found  that in October 2006, NNSA proposed building a new, consolidated  plutonium center at an existing DOE site that would be able to  manufacture pits at a production capacity of 125 pits per year. However,  by December 2007, NNSA stated that instead of building a new,  consolidated plutonium center, its preferred action was to upgrade the  existing pit production building at LANL to produce up to 80 pits per  year. Although DOD officials agreed to support NNSA’s plan, these  officials also stated that future changes to stockpile size, military  requirements, and risk factors may ultimately lead to a revised, larger rate  of production. This uncertainty has delayed NNSA in issuing final plans for  its future pit manufacturing capability.
section_title: NNSA Has Had Difficulty Developing Realistic Cost Estimates for Large, Complex Projects
paragraphs: Once a decision is made about the size and composition of the stockpile,  NNSA should develop accurate estimates of the costs of transforming the  nuclear weapons complex. In September 2007, a contractor provided  NNSA with a range of cost estimates for over 10 different Complex  Transformation alternatives. For example, the contractor estimated that  the cost of NNSA’s preferred action would be approximately $79 billion  over the period 2007 through 2060. This option was also determined to be  the least expensive. In contrast, the contractor’s estimate for a  consolidated nuclear production center—another alternative that would  consolidate plutonium, uranium, and weapons assembly and disassembly  at one site—totaled $80 billion over the same period. Although these  estimates differ by only $1 billion over 53 years, they are based on  significantly different assumptions. Specifically, NNSA’s preferred action  assumes a manufacturing capacity of up to 80 pits per year, and the  alternative for a consolidated nuclear production center assumes a  capacity of 125 pits per year. In addition, the contractor cautioned that  because its cost analysis was not based on any specific conceptual designs  for facilities such as the consolidated nuclear production center, it had not  developed cost estimates for specific projects. As a result, the contractor  stated that its estimates should not be used to predict a budget-level  project cost.
Historically, NNSA has had difficulty developing realistic, defensible cost  estimates, especially for large, complex projects. For example, in March  2007, we found that 8 of the 12 major construction projects that DOE and  NNSA were managing had exceeded their initial cost estimates. One  project, the Highly Enriched Uranium Materials Facility nearing  completion at the Y-12 Plant, has exceeded its original cost estimate by  over 100 percent, or almost $300 million. We reported that the reasons for  this cost increase included poor management and contractor oversight. In  addition, NNSA’s cost estimate for constructing the Chemistry and  Metallurgy Research Replacement Facility has more than doubled—from  $838 million to over $2 billion—since our April 2006 testimony. This  revised cost estimate is so uncertain that NNSA did not include any annual  cost estimates beyond fiscal year 2009 in its fiscal year 2009 budget  request to the Congress. Finally, the preliminary results of our ongoing  review of NNSA’s Life Extension Program for this Subcommittee show  that NNSA’s cost estimate for refurbishing each B61 nuclear bomb has  doubled since 2002.
section_title: NNSA Will Need to Develop a Transformation Plan with Clear, Realistic Milestones
paragraphs: NNSA does not expect to issue a record of decision on Complex  Transformation until later this year. As a result, we do not know the  ultimate decision that NNSA will make—whether to modernize existing  sites in the weapons complex or consolidate operations at new facilities.  We expect that once NNSA makes this decision, NNSA will put forward a  transformation plan with specific milestones to implement its decision.  Without such a plan, NNSA will have no way to evaluate its progress, and  the Congress will have no way to hold NNSA accountable.
However, over the past decade, we have repeatedly documented problems  with NNSA’s process for planning and managing its activities. For  example, in a December 2000 report, we found that 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 and reliability of the nuclear stockpile. Specifically, we  found that NNSA planning documents did not contain clear, consistent  milestones or a comprehensive list of the scientific research being  conducted across the weapons complex in support of NNSA’s Primary and  Secondary Assessment Technologies programs. These programs are  responsible for setting the requirements for the computer codes 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.
section_title: Successful Transformation Requires a Strong Office of Transformation
paragraphs: As we noted in July 2003, 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. One of the key problems  that NNSA has experienced has been its inability to build an organization  with clear lines of authority and responsibility. We also reported in  January 2004 that NNSA, as a result of reorganizations, has shown that it  can move from what was often called a “dysfunctional bureaucracy” to an  organization with clearer lines of authority and responsibility. In this  regard, we stated in our April 2006 testimony that NNSA’s proposed Office  of Transformation needed to be vested with the necessary authority and  resources to set priorities, make timely decisions, and move quickly to  implement those decisions. It was our view that the Office of  Transformation should (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.
In 2006, NNSA created an Office of Transformation to oversee its Complex  Transformation efforts. This office has been involved in overseeing early  activities associated with Complex Transformation, such as the issuance  of the December 2007 draft report on the potential environmental impacts  of alternative Complex Transformation actions. However, the Office of  Transformation does not report directly to the Administrator of NNSA.  Rather, the Office reports to the head of NNSA’s Office of Defense  Programs. In this respect, we are concerned that the Office of  Transformation may not have sufficient authority to set transformation  priorities for all of NNSA, specifically as they affect nuclear  nonproliferation programs. Because NNSA’s ultimate decision on the path  forward for Complex Transformation has not yet been made, it remains to  be seen whether the office has sufficient authority to enforce  transformation decisions or whether it will be held accountable within  NNSA for these decisions.
Madam Chairman, this concludes my prepared statement. I would be  happy to respond to any questions that you or Members of the  Subcommittee may have at this time.
section_title: GAO Contacts and Staff Acknowledgements
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. Ryan T. Coles, Assistant Director; Allison Bawden; Jason  Holliday; Leland Cogliani; Marc Castellano; and Carol Herrnstadt Shulman  made key contributions to this testimony.
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