Nuclear Weapons: National Nuclear Security Administration Needs to Ensure Continued Availability of Tritium for the Weapons Stockpile
Published: 2010-10-07T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The National Nuclear Security Administration's (NNSA) Tritium Readiness Program aims to establish an assured domestic source of tritium--a key isotope used in nuclear weapons--in order to maintain the U.S. nuclear weapons stockpile. Because tritium decays at a rate of 5.5 percent annually, it must be periodically replenished in the stockpile. However, since 2003, NNSA's efforts to produce tritium have been hampered by technical challenges. In this context, GAO was asked to (1) determine the extent to which NNSA has been able to overcome technical challenges producing tritium, (2) determine the extent to which NNSA is able to meet current and future nuclear weapons stockpile requirements for tritium, and (3) assess the management of NNSA's Tritium Readiness Program. To do this, GAO visited facilities involved in tritium production and reviewed tritium requirements established by NNSA and the Department of Defense, among other things.
section_title: What GAO Found
paragraphs: NNSA has been unable to overcome the technical challenges it has experienced producing tritium. To produce tritium, stainless steel rods containing lithium aluminate and zirconium --called tritium-producing burnable absorber rods (TPBAR)--are irradiated in the Tennessee Valley Authority's (TVA) Watts Bar 1 commercial nuclear power reactor. Despite redesigns of several components within the TPBARS, tritium is still leaking--or "permeating"--out of the TPBARs into the reactor's coolant water at higher-than-expected rates. Because the quantities of tritium in the reactor coolant are approaching regulatory limits, TVA has been significantly restricting the number of TPBARs that it will allow NNSA to irradiate in each 18-month reactor fueling cycle, and, consequently, NNSA has not been producing as much tritium as it planned. NNSA and TVA officials are continuing to develop plans to increase the number of TPBARs that will be irradiated, as well as, if necessary, the number of reactors participating in the program. However, these plans have not been coordinated with the Nuclear Regulatory Commission (NRC), which ultimately must approve any changes to the operation of the TVA reactors. NNSA currently meets the nuclear weapons stockpile requirements for tritium, but its ability to do so in the future is in doubt. NNSA officials told us that they will be able to meet future requirements through a combination of harvesting tritium obtained from dismantled nuclear warheads and irradiating TPBARs. Although the number of nuclear weapons in the U.S. stockpile is decreasing, these reductions are unlikely to result in a significant decrease of tritium requirements and will not eliminate the need for a reliable source of new tritium because of the need to periodically replenish it in the remaining nuclear weapons stockpile due to tritium's decay. While NNSA has not, to date, been required to use tritium from a reserve that it maintains, use of this reserve in the relatively near future may be necessary if NNSA is unable to increase tritium production beyond its current level. Although NNSA has attempted to ensure a reliable long-term supply of tritium, GAO's review found two problems with NNSA's management of the Tritium Readiness Program. First, NNSA could not provide us with evidence that it adhered to the appropriate contracting procedures when purchasing components and services for the program. Second, due to, among other things, the way the program's contracts with its suppliers are structured, the program is spending its funds more slowly than planned and is accumulating large unexpended balances. The program is subject to thresholds established by the Department of Energy of acceptable levels of unexpended funds that may be carried over from one fiscal year to the next. However, the program exceeded these thresholds by more than $48 million in 2008 and by more than $39 million in 2009. While large unexpended balances are not necessarily an indication that the program is being mismanaged, it does indicate that the program is requesting more funding than it needs on an annual basis--funds that could be appropriated for other purposes.
section_title: What GAO Recommends
paragraphs: GAO recommends that NNSA develop a plan to manage tritium releases from reactors, analyze alternatives to its current tritium production strategy, ensure its contracting complies with appropriate contracting procedures, and ensure its future budget requests account for the program's large unexpended balances. NNSA generally agreed with our recommendations.

section_title: Letter
paragraphs: The National Nuclear Security Administration (NNSA), a separately  organized agency within the Department of Energy (DOE), is working to  re-establish the country’s capability to produce tritium—a key radioactive  isotope used to enhance the power of nuclear warheads and bombs.  Because tritium has a relatively short half-life of 12 years and therefore  decays at a rate of about 5.5 percent per year, tritium in existing weapons  must be periodically replenished, and an assured source of tritium is  necessary to maintain the U.S. nuclear weapons stockpile. During the Cold  War, tritium was produced in nuclear reactors at DOE’s Savannah River  Site (SRS) in South Carolina and the Hanford Site in Washington.  However, due to safety concerns, the last reactor used for tritium  production was shut down in 1988. Since that time, as the United States  decreased the size of its nuclear arsenal, NNSA has been able to meet its  tritium requirements by harvesting and recycling it from dismantled  nuclear warheads. However, because of tritium’s short half-life, NNSA  cannot meet its tritium needs in this manner indefinitely and is attempting  to re-establish new tritium production.
Nuclear weapons stockpile requirements for tritium are established jointly  by the Department of Defense (DOD) and NNSA. To meet these  requirements, the Tritium Readiness Program was established in 1996. It is  now a subprogram of NNSA’s Readiness Campaign that develops nuclear  weapons component manufacturing technologies. The Tritium Readiness  Program operates with an annual budget of about $70 million.
To produce tritium, stainless steel rods containing lithium aluminate and  zirconium—called tritium-producing burnable absorber rods (TPBAR)— are irradiated in the Tennessee Valley Authority’s (TVA) Watts Bar 1  commercial nuclear power reactor in Tennessee. Once inserted into the  reactor core during refueling, the TPBARs are irradiated for approximately  18 months, after which they are transported to SRS, where they are  processed in a specialized facility to extract the tritium and prepare it for  nuclear warheads. However, since the first regular production TPBARs  were irradiated in TVA’s reactor in 2003, NNSA has experienced technical  challenges. Specifically, tritium has been leaking—or “permeating”—out of  the TPBARs at higher-than-expected rates into the reactor’s coolant water,  where it is eventually released to the environment under controlled and  monitored conditions. Although tritium decays relatively quickly and, in  small amounts, poses little risk to human health and the environment,  large amounts of tritium released into the environment could expose the  public to slightly higher radiation doses. To ensure that any releases do  not exceed safe amounts, releases of radioactive materials, including  tritium, from nuclear power plants are regulated by the Nuclear  Regulatory Commission (NRC) using limits established by the  Environmental Protection Agency.
In this context, in response to your request that we review the Tritium  Readiness Program, we (1) determined the extent to which NNSA has  been able to overcome technical challenges producing tritium, (2)  determined the extent to which NNSA is able to meet current and future  nuclear weapons stockpile requirements for tritium, and (3) assessed the  management of NNSA’s Tritium Readiness Program.
subsections: section_title: Scope and Methodology
paragraphs: To determine the extent to which NNSA has been able to overcome  technical challenges producing tritium, we visited and interviewed  officials from the Pacific Northwest National Laboratory, where the  TPBARs were designed and where work continues to overcome technical  problems, and WesDyne Corporation, NNSA’s contractor that fabricates  the TPBARs. In addition, we reviewed TVA tritium management plans and  reports. We examined amendments to TVA’s operating license for the  Watts Bar plant issued by NRC that approved TVA’s irradiation of TPBARs.  We also reviewed relevant NRC regulations and documents related to TVA  tritium activities and interviewed officials from NRC and the Defense  Nuclear Facilities Safety Board, an independent agency established in 1988  to oversee the safety of DOE’s nuclear facilities. We also visited and  interviewed officials at TVA’s Watts Bar 1 nuclear power plant, where  TPBARs are irradiated, and SRS, where the TPBARs are processed to  extract tritium for nuclear warheads.
To determine the extent to which NNSA is able to meet current and future  nuclear weapons stockpile requirements for tritium, we reviewed NNSA’s  tritium production plans as well as requirements documents prepared by  DOD and NNSA, such as the 2010 Nuclear Posture Review. We also  reviewed NNSA’s strategic plans for the Tritium Readiness Program,  including program execution and implementation plans; past and planned  schedules for completing TPBAR fabrication, transportation, irradiation,  and extraction activities; and the program’s risk management plan. We  also interviewed NNSA officials responsible for developing these plans.
Finally, to assess the management of NNSA’s Tritium Readiness Program,  we reviewed contracts between NNSA and WesDyne, as well as budget  and expenditure data obtained from DOE’s Office of Programming,  Planning, Budget, and Evaluation. In addition, we examined past  expenditure projections, contracts and subcontracts for TPBAR  fabrication, and NNSA’s planned and actual work schedules for  conducting and completing TPBAR fabrication, transportation, irradiation,  and extraction activities. We determined that the data used was  sufficiently reliable for the purposes of our report. We conducted this  performance audit from October 2009 to September 2010 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.
section_title: Background
paragraphs: Tritium is a radioactive isotope of hydrogen that exists naturally in the  environment, but in amounts that are too small for practical recovery.  Tritium is produced artificially when lithium-6 is bombarded with neutrons  (particles within an atom that have no electrical charge) in the core of a  nuclear reactor. When present in the center of a nuclear weapon at the  instant of its detonation, tritium undergoes nuclear fusion, releasing  enormous amounts of energy and significantly increasing the explosive  power, or “yield,” of the weapon.
From 1954 until 1988, the United States produced the majority of its  tritium using nuclear reactors at SRS. When the last of SRS’s reactors  ceased operations for safety reasons in 1988, the United States lost its  capability to produce tritium for the nuclear weapons stockpile. In August  1993 we reported that significant reductions in the U.S. nuclear weapons  stockpile as a result of, among other things, arms reduction treaties signed  with Russia would result in sufficient supplies of tritium through 2012  without the need to produce any new tritium. We reported, however, that  after that date a new source of tritium would be required for the stockpile.
To re-establish the nation’s tritium production capability, NNSA’s  predecessor—DOE’s Office of Defense Programs—studied two different  approaches to make tritium. The first involved building an accelerator to  produce tritium. This device would accelerate protons (particles within an  atom that have a positive electrical charge) to nearly the speed of light.  The protons would be crashed into tungsten, releasing neutrons through a  process called spallation, which can be used to change helium into tritium.  After extensive research and development of accelerator-based tritium  production technology, DOE abandoned this approach.
The second approach DOE pursued was to produce tritium using  commercial nuclear power reactors. In such a reactor, components called  burnable absorber rods are used to control the reactivity of the core in a  nuclear reactor during power production. With the support of Sandia  National Laboratories and the Idaho National Laboratory using Idaho’s  Advanced Test Reactor, the Pacific Northwest National Laboratory  designed a new rod—called a TPBAR—that could be substituted for  standard burnable absorber rods in the reactor. As the commercial reactor  produces power, the TPBARs are irradiated, controlling the nuclear  reaction while simultaneously producing tritium. The tritium produced  within the TPBAR is stored within the rod by a nickel-plated component  known as a “getter.” (See figure 1.)
In 1999 DOE entered into an interagency agreement with TVA to irradiate  TPBARs in TVA’s Watts Bar and Sequoyah nuclear power reactors. DOE,  and subsequently NNSA after its establishment in 2000, pays TVA an  irradiation fee as well as reimburses TVA for any additional costs  associated with TPBAR irradiation. The agreement anticipates that TVA  would be paid approximately $1.5 billion for its costs over the agreement’s  35-year term. To allow it to irradiate TPBARs in the reactor, TVA applied  to NRC for an amendment to its operating license. After completing a  safety evaluation, NRC issued a license amendment in 1997 that allowed  TVA to irradiate 32 TPBARs for testing purposes and, following successful  testing, issued another amendment in 2002 that allowed TVA to load up to  2,304 TPBARs in the Watts Bar 1 reactor per reactor operating cycle. In  2003 the first TPBARs intended to produce tritium for the nuclear  weapons stockpile were loaded into the Watts Bar 1 reactor and were  removed approximately 18 months later as part of the reactor’s normal  refueling cycle. To date, only the Watts Bar 1 reactor has been used to  irradiate TPBARs.
The first TPBARs were fabricated by the Pacific Northwest National  Laboratory, which designed the rods as well as the tritium production  processes associated with them. In 2000 NNSA contracted with WesDyne  International—a subsidiary of Westinghouse—to fabricate TPBARs.  WesDyne procures and maintains an inventory of TPBAR components and  assembles TPBARs at a Westinghouse facility in Columbia, South Carolina.  This facility also supplies nuclear fuel for TVA’s Watts Bar 1 reactor. The  Pacific Northwest National Laboratory continues to serve as the TPBAR  design agent, developing design changes as needed and supporting  WesDyne’s fabrication of TPBARs. The laboratory also maintains a backup  capability to produce TPBARs in the event WesDyne becomes unable or  unwilling to fulfill its contract with NNSA.
Once fabricated, the TPBARs are shipped to Watts Bar where they are  loaded into the reactor core during a normal refueling outage. After being  irradiated for approximately 18 months, the TPBARs are removed from the  reactor core and, after cooling for several months, are transported to SRS.  The TPBARs, which are now highly radioactive because of the time spent  inside the reactor, are processed at a specialized new Tritium Extraction  Facility at SRS. This facility, which began operations in 2007 at a cost of  nearly $500 million, cuts the tops off the TPBARs and processes them to  extract tritium. Waste from the extraction process, such as scrap pieces  from cut-apart TPBARs, is permanently disposed of as low-level  radioactive waste. The steps involved in NNSA’s tritium production  enterprise are illustrated in figure 2. Tritium extracted from TPBARs is  then loaded into specially designed reservoirs that are shipped to DOD for  installation into nuclear weapons. Tritium reservoirs are periodically  removed from each weapon in the stockpile as part of their routine  maintenance and then shipped to SRS, where any remaining tritium that  has not decayed is recovered. The reservoirs are then refilled with tritium  and returned to DOD.
section_title: NNSA Continues to Face Technical Challenges Producing Tritium
paragraphs: Despite the fact that the Pacific Northwest National Laboratory has  redesigned several components within the TPBARs to reduce the amount  of tritium permeating into the reactor coolant at the Watts Bar 1 reactor,  tritium is still leaking from the TPBARs at higher-than-expected rates. As a  result, significantly fewer TPBARs than planned are being irradiated in the  reactor, which has considerably reduced the amount of tritium NNSA is  producing. NNSA and TVA officials told us that they are developing plans  to increase the number of TPBARs being irradiated and the number of  reactors participating in tritium production, as well as plans to modify the  reactors to better manage tritium releases to the environment. However, to  date, these plans have not been actively coordinated with NRC, which  ultimately must approve any modifications to reactor operations.
subsections: section_title: Tritium is Still Permeating at Higher-Than-Expected Rates From TPBARs Into the Reactor Coolant at TVA’s Watts Bar 1 Reactor
paragraphs: NNSA has been unable to solve the technical challenges it has been  experiencing producing tritium. Specifically, tritium is permeating from  the TPBARs at higher-than-expected rates into the water used to cool the  reactor core at TVA’s Watts Bar 1 nuclear plant rather than being captured  in the TPBARs as designed. Watts Bar’s operating license is based on the  assumption that 2,304 TPBARs would be loaded into the reactor and that  tritium would permeate from the TPBARs into the reactor coolant at an  average rate of 1.0 curie of tritium per year per TPBAR. However,  according to NNSA reports, tritium is permeating from the TPBARs at  levels of up to 4.2 curies of tritium per year per TPBAR out of a total of  10,000 curies produced by one TPBAR.
To keep the total amount of tritium released into the reactor coolant  below regulatory limits, TVA has limited the number of TPBARs being  irradiated in the Watts Bar 1 reactor, according to TVA officials. NNSA’s  original plans called for irradiating 1,160 TPBARs per reactor fueling cycle  by 2010 before ramping up to nearly 2,700 TPBARs per fueling cycle by  2013 using both the Watts Bar 1 reactor and TVA’s Sequoyah 1 reactor.  However, as a result of the tritium permeation problem, TVA currently  irradiates only 240 TPBARs per fueling cycle using only the Watts Bar 1  reactor. While the interagency agreement between DOE and TVA allows  NNSA to use the two Sequoyah reactors to irradiate TPBARs, TVA officials  told us that TVA is reluctant to allow NNSA to use these reactors because,  among other things, TVA would prefer to meet tritium requirements using  only a single reactor.
The Pacific Northwest National Laboratory has redesigned several  components within the TPBARs in an attempt to reduce the amount of  tritium permeating into the reactor coolant. For example, national  laboratory researchers have modified the nickel-plated “getter” in the  TPBAR to better capture tritium within the rod. However, despite this  redesign, no discernable improvement in TPBAR performance was made  and tritium is still permeating from the TPBARs at higher-than-expected  rates. NNSA, TVA, and national laboratory officials told us that the  obvious design changes to address the tritium permeation problem have  been made and that scientists and engineers charged with investigating the  issue and identifying solutions have not been able to identify the root  cause of the permeation problem. NNSA officials told us that it is  unknown whether any technical breakthrough will be made to  substantially correct the problem. However, scientists and engineers at the  Pacific Northwest National Laboratory are continuing to conduct research  to identify the root cause of the permeation problem and to determine  whether a technical solution can be found.
Because significantly fewer TPBARs are being irradiated than NNSA  originally called for, much less tritium is being produced than NNSA  planned. As a result, SRS’s Tritium Extraction Facility, which began  operations in 2007 and cost nearly $500 million to build and approximately  $30 million per year to operate, sits essentially idle for 9 months out of the  year. During this time, equipment and systems must be routinely  maintained while NNSA prepares for the 3 months the facility operates  during the year. At congressional direction, NNSA investigated shutting  down the Tritium Extraction Facility completely for an extended period  until sufficient TPBARs had been irradiated to justify continuous  operations. However, NNSA determined that shutting down the facility for  an extended period would cost at least $60 million more over 10 years than  continuing to maintain it for limited operations. According to NNSA  officials, these additional costs consist of, among other things, costs to  replace and/or recertify the operational readiness of equipment that would  degrade during the time the facility was shut down.
section_title: NNSA and TVA Are Developing Plans to Increase Tritium Production but Have Not Actively Coordinated These Plans With NRC
paragraphs: Faced with significantly lower tritium production than originally planned  due to tritium permeation, NNSA and TVA have been developing plans to  increase the number of TPBARs being irradiated at Watts Bar 1 during  each reactor fueling cycle as well as the number of reactors irradiating  TPBARs, according to NNSA and TVA officials. Planning continues to be  adjusted based upon changes to tritium requirements that are still being  determined. Although these plans have changed several times over the  past year and are still subject to significant uncertainty, current plans call  for the number of TPBARs being irradiated in the Watts Bar 1 reactor to  increase from 240 per cycle to 544 per cycle for the next three fueling  cycles beginning in 2011, according to NNSA officials. In addition, NNSA  and TVA are developing plans to irradiate TPBARs, using TVA’s Sequoyah  1 and Sequoyah 2 reactors—as provided for in the interagency agreement  between DOE and TVA—beginning in 2017 if this proves necessary to  meet tritium requirements. NNSA and TVA officials also told us that they  discussed the option of using the Watts Bar 2 reactor, which is currently  under construction. However, this reactor will not be operational until  2012 at the earliest and is not included in the interagency agreement  between DOE and TVA. Moreover, TVA likely would not attempt to  irradiate TPBARs in it until its second or third fueling cycle—18 to 36  months after the reactor begins operations. Therefore, according to TVA  officials, Watts Bar 2 is no longer being considered to irradiate TPBARs.
NNSA and TVA are also discussing a number of modifications to the Watts  Bar reactor to ensure that any tritium released from the reactor coolant  into the environment stays below regulatory limits, according to NNSA  and TVA officials. Specifically:    NNSA and TVA officials told us that they are considering the construction  of a large holding tank at the Watts Bar 1 reactor that could be used to  more effectively manage the presence of tritium in the reactor coolant. A  large holding tank will enable TVA to better control the timing of releases  of coolant containing tritium over time to stay within NRC and EPA limits.  NNSA’s initial cost estimate for the construction of a large holding tank is  approximately $13 million and may increase annual operations costs by as  much as $500,000.
NNSA and TVA officials also told us that they considered constructing a  tritium removal system at the reactors to remove excess tritium from  reactor coolant water before it is released into the Tennessee River.  NNSA’s initial cost estimate for the construction of a tritium removal  system is approximately $50 to $60 million per reactor and would add $9  to $10 million in annual operations costs. According to NNSA officials,  NNSA and TVA are continuing to monitor the development of this  technology.
According to NNSA and TVA officials, NNSA, with the cooperation of TVA,  is assessing the environmental impacts associated with irradiating  increased numbers of TPBARs with higher-than-expected rates of tritium  permeation. Such an increase would have to be approved by NRC and  incorporated into an amendment to the reactors’ operating licenses. TVA  officials told us that reactor license amendments cost up to $5 million. In  addition, NNSA officials told us that completing this environmental  analysis could cost between $2 million and $5 million.
NNSA and TVA officials, however, have not been actively coordinating  their plans with NRC, which ultimately must approve these plans and  incorporate them into operating license amendments for the TVA reactors.  At the time we spoke with them, NRC officials were not aware that fewer  TPBARs than planned were being irradiated in the Watts Bar 1 reactor.  Subsequently, in a February 2010 letter from TVA, the NRC was officially  informed of how many TPBARs were being irradiated in the reactor. With  regard to plans that were discussed to irradiate TPBARs in the Watts Bar 2  reactor when it is completed, NRC officials pointed out that technical  issues that usually accompany any new reactor startup may not be  resolved in time for TPBARs to be irradiated by the reactor’s second  fueling cycle. NRC officials were also not informed of proposals being  developed to install reactor coolant holding tanks or tritium removal  systems at the reactors and of potential future license amendment  applications to increase the amount of tritium the reactors would be  allowed to release into the environment. NRC’s approval of these  modifications, such as the construction of tritium removal systems at the  TVA reactors, is uncertain because, according to NRC officials, there is  currently no regulatory framework for the construction and operation of  tritium effluent management technologies in the United States.
section_title: NNSA Is Currently Meeting Tritium Requirements, but Uncertainty Exists in Its Ability to Continue Doing So In the Future
paragraphs: DOD is responsible for implementing the U.S. nuclear deterrent strategy,  which includes establishing the military requirements associated with  planning for the nuclear weapons stockpile. NNSA and DOD work  together to produce the Nuclear Weapons Stockpile Memorandum. This  memorandum outlines a proposed plan for the President to sign to guide  U.S. nuclear stockpile activities. This plan specifies the size and  composition of the stockpile and other information concerning  adjustments to the stockpile for a projected multi-year period. While the  exact requirements are classified, NNSA uses the detailed information  included in the memorandum on the number of weapons to be included in  the stockpile to determine the amount of tritium needed to maintain these  weapons. In addition, NNSA maintains a reserve of additional tritium to  meet requirements in the event of an extended delay in tritium production.  Small quantities of tritium are also needed by the national laboratories and  other entities for scientific research and development purposes.
According to NNSA officials, NNSA is meeting current requirements  through a combination of harvesting tritium obtained from dismantled  nuclear warheads and producing lower-than-planned amounts of tritium  through the irradiation of TPBARs in the Watts Bar 1 reactor. However,  tritium in the stockpile as well as in NNSA’s tritium reserve continues to  decay, making increased production of tritium critical to NNSA’s ability to  continue meeting requirements.
Although the number of nuclear weapons in the U.S. stockpile is  decreasing, these reductions are unlikely to result in a significant decrease  to tritium requirements. Specifically, the New Strategic Arms Reduction  Treaty signed in April 2010, if ratified by the Senate, will reduce the  number of deployed strategic nuclear warheads by 30 percent. However, it  has not yet been determined whether some or all of these warheads will be  maintained in reserve—where the warheads would continue to be loaded  with tritium—or dismantled—where the tritium could be removed from  the weapons. Moreover, even if some or all of the warheads reduced under  the treaty were dismantled, tritium requirements are unlikely to decrease  by a significant amount. While the specific reasons for this lack of  decrease in tritium requirements are classified, NNSA officials we spoke  with said that the additional tritium supply that would be available as a  result of increased warhead dismantlements is unlikely to fill what they  estimate will be a steady tritium demand in the future.
To date, NNSA has not had to use tritium in the reserve it maintains.  However, according to NNSA officials, use of some of the tritium reserve  in the relatively near future may be necessary if NNSA is unable to  increase tritium production beyond its current level of 240 TPBARs being  irradiated in a single reactor. In addition, if NNSA takes longer than  expected to increase tritium production, even reserve quantities may be  insufficient to meet requirements for an extended period of time.  Information on the dates when NNSA will need to begin using the tritium  reserve and when the reserve will be depleted is classified. Nevertheless,  NNSA officials told us that they were confident that NNSA will be able to  meet tritium requirements in the future without substantially reducing the  nation’s tritium reserve and are not considering alternative ways of  producing tritium for the stockpile.
section_title: NNSA Could Not Provide Us With Evidence That It Adhered to the Appropriate Contracting Procedures for the Tritium Readiness Program and is Accumulating Large Amounts of Unexpended Funding
paragraphs: Although NNSA has attempted to ensure a reliable long-term supply of  tritium, our review found two problems with NNSA’s management of the  Tritium Readiness Program. First, NNSA was unable to provide us with  evidence about its adherence to the appropriate contracting procedures  when purchasing components and services for the Tritium Readiness  Program. Second, because of, among other things, the contract structure  NNSA has entered into with suppliers of components and services for the  Tritium Readiness Program, program funds are being expended much  more slowly than planned. As a result, the program is accumulating large  unexpended funding balances beyond thresholds established by DOE.
subsections: section_title: NNSA Could Not Provide Us With Evidence That It Adhered to the Appropriate Contracting Procedures When Entering Its Long-Duration TPBAR Procurement Contract
paragraphs: NNSA relies largely on commercial suppliers to provide TPBARs, TPBAR  components, and other services to the program through fixed price  contracts. Although the Pacific Northwest National Laboratory originally  designed the TPBARs and fabricated initial supplies, NNSA believed that  the commercial sector was better able to meet nuclear industry quality  requirements at lower cost. Therefore, in 2000, NNSA entered into a  contract with WesDyne International to manufacture TPBARs. WesDyne  International is a subsidiary of Westinghouse which is owned by the  Japanese company Toshiba. Because of the relatively few companies  capable of manufacturing TPBAR components, and to minimize the  possibility of one of these companies exiting the industry or losing interest  in working with the program, the contract was structured as a 44-year  fixed price contract with an approximately 4-year initial phase and a 40- year second phase consisting of a 10-year base period and three 10-year  options.
According to NNSA officials, a 44-year fixed price contract with lengthy  options was intended to assure companies that there would be sufficient  work required far enough into the future to make a contractor’s initial  investment in new facilities and capabilities worthwhile. Because of the  highly specialized manufacturing processes involved in fabricating  TPBARs, the relatively low production quantities planned by the program,  and the length of time required to set up facilities for manufacturing  classified components, NNSA identified the loss of one or more  component suppliers as a major program risk. For example, several  components can only be obtained from a single supplier, and if any of  these companies were to decide it was no longer profitable to continue  working with NNSA or were acquired by foreign firms, it could take NNSA  several years and millions of dollars to find and develop a new supplier.
While these considerations led NNSA to use a 44-year contract to procure  TPBARs, NNSA did not provide us evidence that it adhered to the  appropriate contracting procedures typically involved when entering into  a contract of this length. Federal statutes as implemented by the Federal  Acquisition Regulation are the principal set of rules that govern the  process through which the federal government acquires and purchases  goods and services. NNSA officials did not document the legal authority  used in entering into a contract of this length. In contrast, NNSA waived  application of a statutory provision prohibiting contract awards under  certain circumstances to foreign-controlled entities—by permitting a  foreign-owned company to produce TPBARs—and provided us with  evidence of its compliance with the waiver requirements.
In its comments on a draft of this report, NNSA stated that it provided  documentation of a solicitation review that was conducted as well as its  explanation of its legal authority to enter into contracts with periods of  performance in excess of 5 years. While we agree that a review of the  solicitation took place, the documentation NNSA provided contained no  evidence that the long period of performance of this contract—a period of  performance that NNSA agreed in its comments was unusually long—was  considered as part of this solicitation review. NNSA asserts that it  followed the appropriate procedures when approving a contract of this  length. However, the procedures NNSA cited in its comments were not  implemented until about 10 years after the contract with WesDyne was  initially awarded. Moreover, while NNSA claimed that it had the legal  authority to enter into a contract of this length, none of the documentation  NNSA provided to us before we sent our draft report to NNSA for its  comments stated the specific legal authority that was used to enter into a  contract of this length. In fact, it was not until NNSA’s comments on our  draft report that it provided us with its explanation of its legal authority to  enter into contracts with periods of performance in excess of 5 years.
section_title: NNSA is Spending Program Funds More Slowly Than Planned And Has Accumulated Large Amounts of Unexpended Funding
paragraphs: NNSA is spending program funds more slowly than planned and has  accumulated large amounts of unexpended funding. NNSA receives “no- year” appropriations from Congress that have no limit on how long the  agency may take to obligate and expend those funds. However, to ensure  large amounts of unexpended funding do not accumulate that could be  better used for other purposes, DOE has established thresholds of  acceptable levels of unexpended funds that may be carried over from one  fiscal year to the next. DOE also analyzes individual program budgets to  determine a percentage of program funds which each program can  reasonably be expected to carry over each year. For example, in fiscal  year 2009, DOE determined that NNSA’s Tritium Readiness Program could  expect to carry over 16 percent—or approximately 2 months worth—of  funding, or $20.7 million. However, the program has routinely exceeded  DOE’s threshold for unexpended funds. For example, it exceeded the  threshold by $23.4 million at the end of fiscal year 2006, $27.6 million at  the end of fiscal year 2007, $48.4 million at the end of fiscal year 2008, and  $39.1 million at the end of fiscal year 2009.  Officials with the Tritium  Readiness Program estimate that the program will exceed DOE’s threshold  by approximately $50 million by the end of fiscal year 2010. Table 1  outlines the Tritium Readiness Program’s unexpended funds.
The contract structure NNSA has entered into with suppliers of  components and services contributes to these high unexpended funding  balances. An agency must generally obligate the full amount of a contract  at the time it enters into the contract. These obligated funds are then  expended over time as components and other services are delivered to  NNSA by the contractor. Although NNSA’s TPBAR fabrication contract is  structured as a 44-year contract with 10-year options, the program has  been funding each option in 5-year increments. Under this arrangement,  the program obligates sufficient funds for 5 years at the beginning of each  increment, which NNSA officials told us should result in high unexpended  funding balances during the first year which are gradually reduced over  the following 5 years as the program pays out the funds to its contractors.  NNSA also uses a number of 3-4 year subcontracts to procure TPBAR  components, which also require funding at the time NNSA enters into the  contract and are often awarded in different years than the main contract’s  5-year periods. Consequently, NNSA’s contracting strategy periodically  results in high levels of unexpended funds as funds for different awards  are obligated and expended at different times.
However, the fact that fewer than expected numbers of TPBARs are being  irradiated in the Watts Bar 1 reactor is also contributing to NNSA’s  accumulation of large unexpended funding balances. Irradiating fewer  than expected TPBARs impacts the program’s costs by lowering the total  irradiation fees NNSA pays to TVA for each reactor cycle. Specifically,  NNSA pays TVA an irradiation fee of $4,950 per year per TPBAR  irradiated. Irradiating fewer than expected TPBARs has also lowered  expenses associated with operating the Tritium Extraction Facility at SRS.  In addition, funds under NNSA’s contract for TPBAR fabrication are being  expended much more slowly than planned. In 2008 and 2009, the program  planned to order 812 TPBARs from WesDyne, but due to the permeation  problem at Watts Bar, the program eventually reduced that number to 240.  Furthermore, NNSA’s contract with WesDyne originally planned for  fabricating more than 2,500 TPBARs between 2004 and 2009, but NNSA  had ordered fewer than half that many by the end of fiscal year 2009.  Because fewer TPBARs are being ordered than originally planned for, the  price to fabricate each TPBAR has increased over time from about $700  per TPBAR in 2000 to approximately $1,300 per TPBAR today. NNSA and  WesDyne officials told us that the price per TPBAR is likely to increase  further when the next contract increment is finalized later this year.
While large unexpended funding balances do not necessarily indicate that  the tritium program is being mismanaged, the fact that they have been  increasing indicates that NNSA is requesting more funding than it needs on  an annual basis—funds that could be appropriated for other purposes.  From fiscal year 2006 to fiscal year 2008, NNSA’s unexpended balances in  the Tritium Readiness Program exceeding DOE’s threshold more than  doubled from $23.4 million to $48.4 million, and as a result, Congress  reduced the program’s funding by $10.4 million for fiscal year 2009.  Although the program’s unexpended funds were lower at the end of fiscal  year 2009, this was largely due to $8.7 million which was deobligated at the  end of the year because of an ongoing subcontract proposal audit. These  funds were returned to the program in fiscal year 2010, and had they not  been deobligated, the program’s unexpended balances would have  remained approximately the same from fiscal year 2008 to fiscal year 2009,  even with the congressional reduction in funding. Finally, by the end of the  second quarter of fiscal year 2010, NNSA had spent less than half the funds  it had originally planned to spend by that time, and NNSA officials stated  that the program will likely end fiscal year 2010 with even higher levels of  unexpended funds. Thus, while NNSA’s contracting approach does  contribute to its high unexpended funds, the fact that these unexpended  funds are increasing each year indicates that the program is receiving  more funding than it is able to execute due to the reduced scope of work  caused by the tritium permeation problem.
section_title: Conclusions
paragraphs: NNSA’s inability to overcome the technical challenges and meet its  original tritium production goals has raised serious questions about the  agency’s ability to provide a reliable source of tritium to maintain the  nation’s nuclear weapons stockpile in the future. While NNSA has taken  steps to attempt to solve the tritium permeation problem, it is unlikely that  anything less than a complete redesign of the TPBARs will solve the  problem. Unfortunately, existing supplies of tritium in the stockpile and  the tritium reserve are unlikely to fulfill requirements for the time a  complete redesign would take. It is also not clear that a redesign would  solve the problem since NNSA does not fully understand the reasons  behind tritium permeation. Therefore, NNSA and TVA are working  together to not only increase the number of TPBARs being irradiated in  the Watts Bar 1 reactor but also to increase the number of reactors being  used for the program. Increasing the number of TPBARs irradiated will  also require substantial and costly modifications to TVA facilities to ensure  that tritium emissions comply with applicable nuclear safety and  environmental regulations. Because such modifications to the operation of  TVA’s reactors must be approved by NRC, it is important that NNSA and  TVA coordinate their efforts closely with the regulatory agency. In  addition, it is critical that DOD—the ultimate customer of NNSA’s tritium  production program—is also kept informed of the challenges facing the  program and the impact of these challenges on current and future  availability of tritium for the nuclear weapons stockpile.
NNSA’s Tritium Readiness Program has taken a number of steps to ensure  the long-term availability of critical components needed for tritium  production. We are concerned, however, that NNSA was unable to provide  evidence that it adhered to the appropriate contracting procedures when  purchasing components and services for the Tritium Readiness Program.  In addition, the contract structure NNSA has put in place for the program  in conjunction with lower than expected rates of tritium production has  led the program to accumulate large amounts of unexpended funding.  These large balances make it difficult for NNSA management and  Congress to accurately determine the amount of funding the program  actually requires, what the program is accomplishing with the  appropriated funding, and how much could potentially be appropriated for  other priorities.
section_title: Recommendations for Executive Action
paragraphs: To increase confidence in the nation’s continued ability to produce a  reliable supply of tritium in the future and to improve the management of  NNSA’s Tritium Readiness Program, we recommend that the Secretary of  Energy direct the Administrator of NNSA to take the following four  actions:  In cooperation with TVA and NRC, develop a comprehensive plan to  manage releases of tritium from TVA’s Watts Bar 1 and any other reactors  chosen to irradiate TPBARs in the future.
Conduct a comprehensive analysis of alternatives to the current tritium  production strategy in the event that NNSA continues to be unable to meet  its tritium production goals. This alternatives analysis should be  coordinated closely with DOD and take into account current and future  nuclear weapons stockpile requirements for tritium.
Complete an acquisition strategy that reflects the outcome of the analysis  of alternatives and aligns the contracting structure to that plan and, if  necessary, ensures adherence to the appropriate contracting procedures  for long-duration contracts.
Ensure NNSA’s future budget requests account for the large unexpended  balances in the Tritium Readiness Program and better reflect the amount  of funding the program is able to spend annually.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided NNSA, TVA, and NRC with a draft of this report for their  review and comment.
In its comments, NNSA generally agreed with the facts in the report and  the recommendations. However, NNSA noted that, in its view, it has a high  probability of meeting its tritium mission requirements without risk of  using reserve inventories. In response to the draft report’s discussion of  the Tritium Readiness Program’s TPBAR manufacturing contract with  WesDyne, NNSA commented that the program’s unique contracting  structure enables the program to leverage and maintain a commercial  supply chain over a period of more than 40 years while providing some  assurances of cost controls for the life of the contracts. Finally, NNSA  noted that it provides responsible financial stewardship of government  resources by adjusting future budget requests for changes in the Tritium  Readiness Program planning requirements and risks.
With regard to meeting tritium requirements, NNSA commented that  irradiating 544 TPBARs in the Watts Bar 1 reactor per reactor fueling cycle  until fiscal year 2016 will provide proof of NNSA’s ability to meet near  term requirements without using reserves. Our draft report discussed  NNSA’s plans to increase the number of TPBARs being irradiated in the  Watts Bar 1 reactor from 240 per fueling cycle to 544 per fueling cycle.  However, it is important to note that NNSA’s plans have changed several  times and are still subject to considerable uncertainty. In particular,  NNSA’s original plans called for irradiating 1,160 TPBARs per fueling cycle  by 2010 before ramping up to nearly 2,700 TPBARs per fueling cycle using  both the Watts Bar 1 reactor and the Sequoyah 1 reactor. While we are  encouraged that NNSA and TVA are working together to increase the  number of TPBARs being irradiated, continued uncertainty about NNSA’s  and TVA’s ability to irradiate additional TPBARs in a single reactor while  not exceeding limits on the amount of tritium released into the  environment raises doubts about the program’s ability to provide a reliable  supply and predictable quantities of tritium over time.
Regarding its TPBAR manufacturing contract with WesDyne, NNSA stated  that it provided documentation of a solicitation review that was conducted  as well as its explanation of its legal authority to enter into contracts with  periods of performance in excess of 5 years. We modified our draft report  to clarify that, although we agree that a review of the solicitation took  place, the documentation of the review that NNSA provided to us  contained no evidence that the long period of performance in this  contract—a period of performance that NNSA agreed in its comments was  unusually long—was considered as part of this solicitation review.  Although NNSA asserts that it followed the appropriate procedures when  approving a contract of this length, the procedures NNSA cited in its  comments were not implemented until about 10 years after the contract  with WesDyne was initially awarded.
Finally, with regard to NNSA’s management of the Tritium Readiness  Program’s finances, NNSA commented that it monitors its unexpended  funding and meets quarterly with DOE to discuss and justify its  unexpended balances. NNSA also stated that adjustments to its budget  requests and refinements to its acquisition strategy will continue as part of  its efforts to accommodate changes to the nuclear weapons stockpile. We  are encouraged by NNSA’s pledge to adjust its budget requests in response  to changes in program needs and by other actions NNSA is taking to  reduce its unexpended funding balances. However, as our draft report  notes, unexpended funding balances in excess of DOE’s threshold for  unexpended funds increased every year since fiscal year 2006 with the  exception of fiscal year 2009 and NNSA estimates the program will exceed  DOE’s threshold by approximately $50 million by the end of fiscal year  2010. In our view, these increases in unexpended funding call into question  the effectiveness of NNSA’s monitoring of the program’s financial  management.
NNSA also provided technical comments that we incorporated as  appropriate. NNSA’s comments are presented in appendix I.
TVA commented that it shared our perspectives regarding the importance  of NNSA’s ability to assure that the nuclear weapons stockpile  requirements for tritium will be met in the future. TVA noted that it has  been and continues to be dedicated to working with NNSA in evaluating  and deciding among alternative approaches to help better assure that  future tritium production will be a the necessary levels. TVA also provided  technical comments that we incorporated as appropriate. TVA’s comments  are presented in appendix II.
In its comments, NRC agreed with our findings, conclusions, and  recommendations. NRC also provided technical comments that we  incorporated as appropriate. NRC’s comments are presented in appendix  III.
We are sending copies of this report to the appropriate congressional  committees, Secretary of Energy, Administrator of NNSA, Chairman of  NRC, President and Chief Executive Officer of TVA, Director of the Office  of Management and Budget, and other interested parties. 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 about this report, please contact me  at (202) 512-3841 or aloisee@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix IV.
section_title: Appendix I: Comments from the National Nuclear Security Administration
section_title: Appendix II: Comments from the Tennessee Valley Authority
section_title: Appendix III: Comments from the Nuclear Regulatory Commission
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Ryan T. Coles, Assistant  Director; Allison Bawden; Will Horton; Jonathan Kucskar; Alison O’Neill;  Tim Persons; Peter Ruedel; Ron Schwenn; and Rebecca Shea made key  contributions to this report.