Nuclear Weapons: NNSA Needs to Incorporate Additional Management Controls Over Its Microelectronics Activities
Released: 2020-06-09T00:00:00

Letter

Background

Microelectronics Production at Sandia

The MESA Complex at Sandia comprises multiple production facilities and buildings, which total approximately 400,000 square feet (see fig. 1). In particular, the SiFab Facility, completed in 1988, is the primary production facility for microelectronics integrated into nuclear weapons. The SiFab Facility produces application-specific integrated circuits (ASIC) that are custom-designed to control certain nuclear weapon arming, fuzing, and firing functions. The MESA Complex also includes other buildings, such as the Micro Fabrication Facility, which was completed in 2006 and produces strategic radiation-hardened devices for manipulating electronic signals and electrical power. The physical layouts of these two production facilities center around a series of clean rooms that are designed to maintain an extremely low level of dust and other particulates, which can harm microelectronic functionality. The two facilities contain about 375 pieces of specialized production equipment, some of which cost millions of dollars, and have acid exhaust and liquid waste management systems for handling the byproducts of the production processes.

The SiFab Facility produces all of the strategic radiation-hardened ASICs currently used in nuclear weapons. ASICs are produced on wafers—a thin slice of semiconductor material such as silicon—using what is referred to as a complementary metal-oxide semiconductor (CMOS) process technology. The production of ASICs requires hundreds of processing steps, which are completed over multiple weeks. For example, according to Sandia documentation, the production of a specific type of ASIC requires over 600 processing steps over an approximately 26-week period.

Microelectronics are produced with characteristic dimensions (or “feature sizes”) measured in nanometers (nm), or one-billionth of one meter. The process technology together with an associated feature size is known as a technology “node.” In general, smaller nodes represent more advanced technologies. The SiFab Facility produces microelectronics at the 350 nm node, and NNSA and Sandia refer to the CMOS production process technology at the 350 nm node as “CMOS7.” Currently, state-of-the-art microelectronics are produced at the 32 nm or below node. For example, the Intel Corporation produces commercial microelectronics at the 14 nm node for use in personal computers and servers. However, such smaller nodes are more challenging to produce and have not been proven to perform at the strategic radiation-hardened level, according to Sandia contractor representatives. Figure 2 shows commercially produced microelectronics on a wafer (left photo) and diced into individual microelectronics parts next to a U.S. dime (right photo).

Ongoing and Planned Weapon Modernization Programs and Other Modernization Plans Requiring Microelectronics

As shown in table 1, NNSA is undertaking multiple LEPs and weapon modernization efforts, in which Sandia is participating. In addition, the 2018 Nuclear Posture Review calls for NNSA to consider additional weapon programs—specifically, a program to develop a modern nuclear- armed sea-launched cruise missile, and another to develop a new submarine-launched ballistic missile warhead (now referred to as the W93). To develop and produce microelectronics for these efforts, Sandia must (1) conduct research and development activities, (2) finalize the design of microelectronics to meet military requirements specific to the weapon program into which the microelectronics will be integrated, and (3) produce the microelectronics. Sandia must conduct all of these activities years before NNSA delivers a weapon program’s first production unit to DOD. According to Sandia documents and contractor representatives, microelectronics research and development efforts generally begin 10 to 15 years before a weapon program’s first production unit date, while microelectronics production generally begins 3 to 5 years before a first production unit date.

DOD is also undertaking modernization efforts related to nuclear weapon delivery platforms, and Sandia is producing microelectronics to support those efforts. Specifically, DOD is responsible for designing and producing the arming and fuzing components on delivery platforms for certain types of nuclear weapons, and Sandia produces some of these components for DOD at the MESA Complex. For example, according to Air Force and Sandia documentation, the Air Force contracted with Sandia to design and produce microelectronics for its Intercontinental Ballistic Missile Fuze Modernization, which will provide a new fuze for use on both the current Minuteman III missile and its replacement, the Ground Based Strategic Deterrent missile.

DOE and NNSA Management Approaches for Projects and Programs

DOE and NNSA distinguish between projects and programs, and the agencies use different management approaches for each:

Projects. DOE’s project management order governs NNSA’s management of capital asset acquisition projects with a total cost greater than $50 million. The order states that capital assets projects have a defined start and end point. Capital assets include land, structures, equipment and intellectual property that are used by the federal government and have an estimated useful life of 2 years or more. The order’s goal includes delivering projects within their original performance baselines (on time and within budget) and fully capable of meeting mission performance and other requirements, such as environmental, safety, and health standards.

Programs. As we reported in 2018, DOE has not established a program management policy. However, NNSA issued its own program management policy in February 2019. The policy applies to all NNSA elements and requires them to establish additional program management requirements for respective NNSA programs based on needs, risk, complexity, and stakeholder involvement, among other things. The NNSA policy defines a program in part as an organized set of activities directed toward a common purpose or goal, undertaken or proposed in support of an assigned mission area. In addition, some NNSA offices have issued their own program management directives that are more specific than the NNSA policy. For example, NNSA’s Office of Defense Programs—which is responsible for, among other things, weapon modernization programs, including LEPs, and associated materials and components, such as microelectronics—issued a program management directive in June 2019 that establishes requirements and processes for managing the office’s programs. This directive establishes four program management categories and execution requirements for these categories. These management categories are risk-based and apply different execution requirements commensurate with program risk.

Fiscal Year 2020 Funding for Microelectronics Activities at Sandia

The MESA Complex’s estimated fiscal year 2020 budget is $283 million, according to Sandia documentation. As shown in figure 3, this funding comes from a variety of sources, because Sandia uses the MESA Complex to meet both NNSA’s and DOD’s nuclear weapon production missions as well as for research and development for those and other federal entities through strategic partnership programs. Sandia documentation states that a portion of the MESA Complex’s budget is obtained from other, non-NNSA federal entities that pay Sandia directly to produce microelectronics for, among other thing, research and development purposes, and this amount of funding fluctuates annually. According to Sandia contractor representatives, the laboratory presents MESA’s budget as an estimate for this reason.

Specific funding sources are discussed in greater detail below:

NNSA provides about 60 percent (or $168 million) of the MESA Complex’s total estimated budget for fiscal year 2020. Two NNSA offices account for most of the agency’s funding:

The Office of Defense Programs accounts for 42 percent (or about $71 million) and is responsible for ensuring the United States maintains a safe, secure, and reliable nuclear stockpile through the application of science, technology, engineering, and manufacturing activities. This funding comes from multiple sub- offices. For example, the Office of Research, Development, Test, and Evaluation provides funding for microelectronics research and development; the Office of Production Modernization provides funding for, among other things, refurbishing microelectronics processing capabilities; and the Office of Stockpile Management provides funding for microelectronics production, according to an NNSA official and NNSA documentation.

The Office of Safety, Infrastructure and Operations accounts for 46 percent (or about $78 million), and this office is responsible for ensuring existing facilities are safely operated, effectively managed, and maintained to meet mission needs.

DOE’s Strategic Partnership Programs account for about 13 percent (or $36 million) of the MESA Complex’s fiscal year 2020 budget. These programs include research and development projects sponsored by the Air Force and the Defense Advanced Research Projects Agency.

DOE’s Laboratory Directed Research and Development work accounts for about 10 percent (or $28 million) of the MESA Complex’s fiscal year 2020 budget. Each of DOE’s 16 contractor-operated laboratories—including Sandia—may direct a portion of the funding they receive from DOE to scientists who conduct independent research. The statutory limit on this laboratory-directed research and development work is between five to seven percent of funds provided by DOE to the laboratories for national security activities.

DOD provides about 6 percent (or $17 million) of the MESA Complex’s fiscal year 2020 budget through Strategic Partnership Programs. According to Sandia documentation, this funding comes directly from the Air Force and Navy to support the production of microelectronics that are integrated into nuclear weapon delivery platforms.

Other sources account for about 12 percent (or $34 million) of the MESA Complex’s fiscal year 2020 budget. Among other things, this funding comes from indirect rates applied to all Sandia programs to support the MESA Complex’s management and operations.

NNSA Completed Actions over the Past Decade to Sustain Its Microelectronics Capability at Sandia and Identified but Did Not Pursue Alternatives for a New Future Capability

Over the past decade, NNSA completed several actions to sustain its existing strategic radiation-hardened microelectronics facilities at Sandia through 2025 while simultaneously identifying future alternatives for its microelectronics capability beyond 2025. In particular, during fiscal years 2012 through 2019, NNSA engaged in a $150 million effort at Sandia to sustain operations at the SiFab Facility through 2025. NNSA pursued this effort in response to a 2010 study conducted by Sandia that identified the need for millions of dollars in funding to sustain the SiFab Facility through 2025. NNSA’s sustainment efforts focused on the following two areas: Infrastructure. NNSA spent about $27 million to complete approximately 25 infrastructure projects that support microelectronics production. For example, NNSA installed two new 20,000-gallon tanks for water storage to improve the facility’s deionized water system, which provides ultra-high purity water for use in certain processing steps. NNSA also replaced a portion of the facility’s acid exhaust system.

Equipment. NNSA spent about $123 million on production equipment for two main purposes: (1) to replace aging equipment that Sandia classified as being at high risk of failure; and (2) to refurbish existing equipment and procure equipment that will be used to produce microelectronics once Sandia completes its ongoing effort to convert the production process from using 6-inch silicon wafers to 8-inch wafers.

Prior to these equipment investments, the SiFab Facility relied on aging equipment to perform certain processing steps using a manual process. In fiscal year 2018, Sandia refurbished existing equipment and purchased new equipment that is more automated and is intended to increase process reliability. In addition, according to Sandia documentation, Sandia needed to convert its production process to use 8-inch silicon wafers because the commercial sector had increasingly limited maintenance support and service for equipment that processed 6-inch wafers.

While NNSA was working with Sandia to sustain the SiFab Facility through 2025, the agency also began identifying and evaluating options for producing microelectronics after 2025, such as constructing a new multibillion-dollar production facility at Sandia. However, because of changes to key assumptions, NNSA decided in November 2018 not to pursue any of the identified alternatives and instead stated that the agency was going to assess options to sustain its current capability at Sandia beyond 2025. See figure 4 for a summary of NNSA’s actions to sustain the SiFab facility and consider alternatives.

More specifically, NNSA took the following actions during the past decade to identify alternatives for producing microelectronics beyond 2025: In 2011, NNSA’s Deputy Administrator for Defense Programs requested proposals from the agency’s three nuclear weapons laboratories for flagship experimental science, technology, and engineering facilities to help ensure that NNSA will have the capabilities to address future national security needs. In response, Sandia submitted a proposal to NNSA in 2012 to construct a new, multibillion-dollar microelectronics production facility, called the Center for Heterogeneous Integration, Packaging, and Processes (CHIP2). The Sandia proposal estimated that CHIP2 would take 14 years to design and build at an estimated cost of $2.5 billion. The proposal indicated that the facility would increase microelectronics functionality and trustworthiness by creating a trusted supply chain into the future for design, fabrication, testing, and packaging activities. As a result of the time needed to design and construct CHIP2, investment would still be needed to sustain the MESA SiFab Facility through 2025.

NNSA commissioned two studies by The Aerospace Corporation, a federally funded research and development center sponsored by the Air Force, to help the agency evaluate Sandia’s CHIP2 proposal against other potential alternatives, such as contracting with commercial entities to produce microelectronics. These studies, completed in August and September 2014, generally ranked the CHIP2 proposal at or near the top of the alternatives but also stated that CHIP2 did not stand out as a decidedly better option. Nonetheless, in early 2015, NNSA’s Deputy Administrator for Defense Programs issued a memorandum recommending that NNSA pursue the CHIP2 proposal as a formal capital asset project, subject to DOE’s project management order on acquisition of capital assets.

In 2016, in accordance with DOE’s project management order, NNSA developed two key documents during the initiation phase of its capital asset project supporting the CHIP2 proposal, which NNSA referred to as the Trusted Microelectronics Capability (TMC) project.

NNSA first developed a mission need statement, which is a formal document that identifies a credible performance gap between current capabilities and those needed to achieve the goals stated in the agency’s strategic plan. The mission need should be stated in a way that is solution-neutral. The project’s mission need statement stated that, among other things, after 2025 the SiFab Facility faced a severe risk of equipment and facility failures that could have detrimental impacts on future microelectronics production schedules. The statement noted that continued refurbishment of the SiFab Facility beyond 2025 could result in significant downtime during critical weapon development and production cycles, as the facility was constructed in the 1980s and was not sized for modern microelectronics production equipment and supporting infrastructure.

NNSA next developed a requirements document, which describes the ultimate goals the project must satisfy while also identifying key assumptions and constraints. The requirements document identified several key requirements, including that the TMC project must be able to provide NNSA with trusted access to produce microelectronics in support of the agency’s nuclear weapons mission.

Between 2016 and 2017, in accordance with DOE’s project management order, NNSA conducted an analysis of alternatives for the TMC project based on achieving NNSA’s mission need statement. Such an analysis identifies, analyzes, and selects a preferred alternative to best meet the mission need by comparing the operational effectiveness, costs, and risks of potential alternatives, according to DOE documentation. During this process, NNSA considered 21 alternatives for meeting the mission need statement, among them the CHIP2 proposal as well as several alternatives that included partnerships with commercial industry and other government production facilities. The final TMC analysis of alternatives report, dated January 2018, did not identify the CHIP2 proposal as a preferred alternative because of the proposal’s high life-cycle costs, high total project cost, and long project schedule. Instead, the report identified two preferred alternatives as best meeting NNSA’s needs: (1) partnering with an existing, government-owned, contractor- operated production facility other than Sandia; and (2) entering into an interagency agreement with DOD and at least one member of the intelligence community, as well as a commercial entity, to design, build, and operate a state-of-the-art production facility.

Ultimately, NNSA decided not to pursue either preferred alternative because of changing assumptions. For example, one of NNSA’s key assumptions for the TMC analysis of alternatives was that the SiFab Facility could not remain operational beyond 2025. However, NNSA tasked The Aerospace Corporation to validate this assumption, and in January 2018, The Aerospace Corporation completed a study concluding that the SiFab Facility could remain viable until 2040 with prioritized and well-planned infrastructure repairs and equipment replacements. Another example of changing assumptions concerned the preferred alternative under which NNSA would enter into an interagency agreement with DOD and at least one member of the intelligence community to design, build, and operate a state-of-the-art production facility. This preferred alternative assumed that DOD, the intelligence community, or both, would pay to develop and build the production facility (estimated to cost from $350 million up to $1.2 billion), while NNSA would pay to equip its portion of the production process. The TMC analysis of alternatives report stated that commitment from DOD and the intelligence community would be vital, and that this alternative carried significant execution risks. In January 2018, NNSA documentation stated that this interagency alternative was no longer viable because other agencies stated they were no longer interested in a potential partnership.

Partly as a result of these changes in key assumptions, in November 2018, NNSA wrote in a letter to Congress that it was no longer requesting funding for the TMC and was assessing what investments were needed to extend the operational life of the SiFab Facility to 2040.

NNSA Has Decided to Upgrade and Sustain Its Microelectronics Capability at Sandia through 2040, but Its Management Approach Does Not Fully Incorporate Key Controls

As part of NNSA’s ongoing approach to managing its strategic radiation- hardened microelectronics activities, the agency plans to upgrade and sustain its microelectronics capability at Sandia through 2040, which it estimates will cost about $1 billion over the next 20 years. NNSA is also in the preliminary stages of identifying and evaluating options for a microelectronics capability beyond 2040. In addition, NNSA is starting to implement a revised management approach, including appointing a coordinator to guide certain aspects of its microelectronics activities. However, NNSA’s approach does not fully incorporate key management controls, such as developing an overarching management plan, which the agency has applied to other important activities.

NNSA Plans to Upgrade and Sustain Its Microelectronics Capability at Sandia through 2040 and Is Beginning to Identify Options for a Capability Beyond 2040

In 2019, NNSA made three key decisions related to upgrading and sustaining its microelectronics capability at Sandia through 2040. First, NNSA approved plans to further upgrade its process for producing microelectronics. This upgraded process, called CMOS8, contains some features of the currently employed CMOS7 process, but is a more advanced technology node that also includes many new features, according to Sandia documentation. Second, NNSA approved plans to produce and integrate into future nuclear weapons a more advanced type of microelectronics component called a field programmable gate array (FPGA). According to Sandia documentation, strategic radiation- hardened FPGAs can be produced using the CMOS8 process but not the CMOS7 process. Third, Sandia developed and NNSA approved a plan to identify, prioritize, and provide budget estimates to sustain Sandia’s microelectronics infrastructure and equipment at the MESA Complex over the next 20 years. This plan incorporates NNSA’s decisions to develop the CMOS8 process and produce FPGAs.

According to NNSA and Sandia documents, the rationale behind and expected benefits of these three key decisions are as follows:

The CMOS8 process will allow Sandia to produce microelectronics at a smaller, more advanced technology node (180nm) compared with the current CMOS7 technology node (350nm). NNSA documentation states that, among other things, the CMOS8 process is expected to produce microelectronics that have twice the processing speed compared with those produced using the CMOS7 process. Such advances are needed to help ensure that future nuclear weapons remain safe, secure, and reliable while operating in increasingly hostile threat environments and that the weapons meet increased performance requirements, according to Sandia documentation. According to NNSA officials, the agency agreed with Sandia’s assessment on implementing the CMOS8 production process based, in part, on findings and recommendations contained in an independent study commissioned by NNSA and completed by multiple entities including The Aerospace Corporation.

According to Sandia documentation, while FPGAs have never been used before in a nuclear weapon, they may significantly reduce the cycle time for microelectronics research, development, and production compared with cycle times for ASICs used in nuclear weapons. This reduction may be possible because the ASICs currently used in nuclear weapons are uniquely designed and produced to carry out specific functions, whereas FPGAs can be produced using a common design and then programmed after production (but before insertion into a nuclear weapon) to carry out different functions, according to NNSA officials. Reduced cycle time from FPGAs could alleviate schedule pressure on future weapon modernization programs because cycle times for designing and producing ASICs for LEPs have historically been about 10 years before production of the first weapon, according to Sandia documentation.

Sandia’s plan will provide NNSA with the basis for the investment profile needed to sustain the MESA Complex’s infrastructure and equipment through 2040. Because the sustainment effort will last at least 20 years, NNSA officials said that having a long-term planning document that provides a current baseline for the condition of Sandia’s microelectronics infrastructure and equipment, identifies challenges, and recommends specific sustainment activities will be a useful management tool.

The plan for extending the life of the MESA Complex at Sandia provides cost and schedule estimates related to sustainment of existing facilities and equipment, as well as installation of new equipment for CMOS8 and development and maturation of the FPGA technology. Overall, the plan calls for spending about $1 billion over the next 20 years. Specifically, the plan identifies spending for the following activities:

Sustainment of existing facilities and equipment. The plan identifies about $900 million in spending from fiscal years 2020 through 2040—or about $45 million a year for the next 20 years—to complete identified infrastructure and equipment projects. The plan calls for spending roughly half of the $900 million on projects to upgrade existing infrastructure within the MESA Complex. In particular, Sandia plans to spend about $120 million from fiscal years 2020 through 2024 on projects to improve or upgrade infrastructure within the SiFab Facility that is considered to be in “poor condition” based on information contained in NNSA’s infrastructure condition database. The SiFab Facility is to be the physical location for the majority of production tools for CMOS8. Two of these projects would replace electrical power and distribution equipment at an estimated cost of about $50 million, while another project would replace the facility’s chemical distribution system at an estimated cost of about $5 million. Sandia plans to spend the other half of the $900 million on equipment-related projects. For example, Sandia plans to spend about $85 million from fiscal years 2021 through 2026 on projects to support existing, non-CMOS8 production processes—such as producing transistors in the Micro Fabrication Facility—as well as activities that support microelectronics production, such as laboratory analysis, testing, and packaging. For example, Sandia plans to spend $1.5 million on a computerized tomography machine to support microelectronics testing.

Development of CMOS8 and production of FPGAs. The MESA Complex extended life plan identifies about $170 million in spending from fiscal years 2020 through 2027 related to developing, maturing, installing, and implementing the CMOS8 process and the FPGA technology. Sandia contractor representatives told us that the CMOS8 process relies on newer and more advanced equipment to complete critical individual processing steps compared with the current CMOS7 process. As a result, the plan identifies about $70 million (out of the $170 million total) to acquire approximately 30 pieces of equipment, which Sandia will need to install and then qualify their performance. In addition, the plan identifies almost $90 million (out of the $170 million total) for developing and maturing the CMOS8 production process and the FPGA technology. According to Sandia documentation, Sandia plans to begin using the CMOS8 process to produce FPGAs for integration into a future nuclear weapon program at the end of fiscal year 2027.

In addition to upgrading and sustaining Sandia’s microelectronics capabilities through 2040, NNSA is in the preliminary stages of identifying and evaluating options to ensure a continued microelectronics capability beyond 2040, according to NNSA officials and documentation. In particular, NNSA has identified the following two key options:

NNSA is in the initial stages of identifying and evaluating options to construct a new facility for producing microelectronics by 2040 and beyond. In December 2019, NNSA officials provided us with documentation stating that the agency plans to begin evaluating options for a new microelectronics facility in 2021 with the goal of completing construction in 2030, installing needed equipment in the completed facility by 2033, and qualifying the production process and begin producing microelectronics for integration into nuclear weapons no later than 2035. In NNSA’s fiscal year 2021 budget request, which was released in February 2020, the agency requested funds to begin evaluation and early planning activities for this new microelectronics facility.

NNSA is also evaluating whether the agency might be able to leverage a recent investment by DOD in a U.S. commercial microelectronics production facility to help meet NNSA’s microelectronics production needs after 2040. Specifically, DOD announced in October 2019 that it had awarded a contract to a U.S.- owned-and-operated microelectronics commercial production facility to, among other things, enhance its radiation-hardened microelectronics production process to meet DOD’s microelectronic needs for systems (such as satellites) that operate in environments with increased radiation levels. Over the next two years, the U.S. commercial microelectronics production facility plans to adapt its current production process and develop a new process that will produce microelectronics at a smaller node, according to DOD documentation. According to NNSA officials we interviewed in February 2020, NNSA and DOD are in preliminary discussions to determine if NNSA could make additional investments in this same facility to potentially produce strategic radiation-hardened microelectronics for integration into nuclear weapons. NNSA officials said that there was no firm timeframe for making an investment decision because such a decision would need to be made after the microelectronics facility begins producing microelectronics at the smaller node.

NNSA Is Starting to Implementing a Revised Microelectronics Management Approach, but This Approach Does Not Fully Incorporate Key Management Controls

NNSA is starting to implement a revised approach to managing its microelectronics activities. During our initial interviews with NNSA officials in early 2019, they stated that NNSA had not established a formal management structure to oversee the agency’s microelectronics activities. Instead, they said that NNSA had delegated primary responsible for overseeing such activities to two officials within NNSA’s Office of Defense Programs, who both served in multiple positions and had other duties within the office. According to these officials, once NNSA formally canceled the TMC project in November 2018, management efforts were focused on making initial determinations on the actions and budget estimates needed to sustain NNSA’s existing microelectronics capability at Sandia until 2040. These efforts included coordinating with multiple NNSA offices—such as the Office of Safety, Infrastructure and Operations—to understand their future microelectronics needs and requirements and to review draft MESA Complex sustainment documentation prepared by Sandia.

However, officials from NNSA’s Office of Defense Programs told us that in late 2019 they determined that a more coordinated management approach would better position NNSA to oversee microelectronics activities and make informed budgetary and programmatic decisions. Specifically, NNSA officials stated that in November 2019 the Office of Defense Programs created and filled a new full-time microelectronics coordinator position within a sub-office, the Office of Research, Development, Test, and Evaluation. The microelectronics coordinator told us that NNSA has not yet finalized an official position description for the coordinator role. However, the coordinator said that the position will primarily be responsible for developing the CMOS8 process and the FPGA technology and integrating the research and development activities of the Office of Research, Development, Test, and Evaluation with another sub-office, the Office of Production Modernization.

In addition, officials from NNSA’s Office of Defense Programs and Office of Safety, Infrastructure and Operations told us that they continue to use other existing processes to manage microelectronics activities at Sandia. For example, these officials said that they use the annual planning, programming, budgeting, and evaluation process, along with the annual work authorization process, to coordinate across NNSA offices on budgetary matters and work activities associated with microelectronics activities at Sandia. As part of these processes, agency officials told us that they issue annual implementation plans to direct the work of Sandia contractors related to microelectronics activities. NNSA officials then monitor the contractors’ progress toward completing the identified scope of work and work activities. For example, NNSA officials said that they conduct monthly meetings with contractor representatives to review status and financial reports. They also said that they hold mid-year and end-of-year program reviews with contractor representatives.

To help management achieve desired results—such as ensuring a continued microelectronics capability—federal agencies design, implement, and operate internal controls, which comprise the plans, methods, policies, and procedures used to fulfill an entity’s mission, goals, and objectives. Federal standards for internal control state that management should, among other things: design control activities, such as by developing policies, procedures, techniques, and mechanisms that enforce management’s directives, to achieve objectives and respond to risk; and establish an organizational structure, assign responsibility, and delegate authority to achieve the entity’s objectives.

NNSA has implemented internal controls at the agency level, in part, by developing and implementing directives that provide an organizational structure for the agency to plan, execute, control, and assess its programs and projects while also assigning responsibility and delegating authority for key management roles. For example, one purpose of NNSA’s 2019 program management directives is to increase management efficiency and effectiveness by, among other things, clearly defining management responsibilities and authorities. In addition, DOE’s project management order for the acquisition of capital assets lists principles for successful project execution such as disciplined, up-front planning; line management accountability; and effective implementation of all management systems (such as risk and performance management) supporting the project.

In particular and as applicable to front-end planning, NNSA’s and DOE’s directives related to program and project management both include the following controls:

Appointment of a federal manager, who is vested with the authority to carry out assigned responsibilities to meet program or project milestones on schedule and on budget, who manages the coordination of deliverables between the multiple entities (such as different program offices) involved, and who is responsible and accountable for planning, implementing, and executing a program or project, which includes responsibility for developing an overarching management plan;

An overarching management plan, which establishes the procedures to define, execute, and monitor a program or project, as well as establishing specific requirements in a variety of areas—such as cost estimating, an integrated schedule, performance management, and risk management—to use to develop a baseline and against which to measure and monitor;

A mission need statement, which identifies a credible gap between current capabilities and those needed to achieve the goals stated in the strategic plan; and

A requirements document that describes the ultimate goals the program or project must satisfy while also identifying key assumptions and constraints.

However, while some in NNSA and at Sandia have recognized the need to coordinate microelectronics activities to effectively carry them out and meet specific goals by specific dates, as evidenced by the hiring of a coordinator, Office of Defense Programs leadership have not fully developed controls to better manage and coordinate its microelectronics activities. Specifically, NNSA does not have or has not fully developed the following:

Federal manager with coordination or oversight authority. NNSA has not established a federal management position with the authority and accountability to better coordinate or oversee NNSA’s microelectronics activities. Instead, as described above, agency officials told us that NNSA’s Office of Defense Programs established a coordinator position—within a sub-office, the Office of Research, Testing, Development and Evaluation—in November 2019 to help guide the agency’s efforts to develop the CMOS8 process and the FPGA technology, among other things. Moreover, in May 2020, NNSA stated that senior leadership within the Office of Defense Programs have not endorsed the formal role of a microelectronics coordinator and that the coordinator’s role and responsibilities are currently under review. NNSA also stated that the coordinator has not been given authority to manage an annual budget for microelectronics activities and that it was unlikely that such authority would be granted. This statement stands in contrast to earlier statements made to us that the coordinator would have responsibility for an annual budget of about $50 million, subject to future appropriations.

Management plan. NNSA has not developed an overarching management plan to guide and coordinate the agency’s microelectronics activities. Instead, NNSA officials from the Office of Defense Programs and the Office of Safety, Infrastructure and Operations told us that the agency is in the very early stages of developing a NNSA plan that will incorporate key decisions and approaches outlined in the Sandia’s 20-year MESA sustainment plan, among other things. While NNSA officials are still evaluating the specific contents of this plan, they said that the plan may outline specific roles and responsibilities for each NNSA office involved in microelectronics, describe how these offices will interact with the microelectronics coordinator, and provide options for future microelectronics technology development efforts. However, it is unclear whether the document will define the planning approach, procedures, and processes that NNSA will use to ensure coordinated management in multiple areas and across multiple offices, such as developing cost estimates, an integrated schedule, and performance metrics. Agency officials said that this plan, when finalized, will provide a useful tool for coordinating various aspects of NNSA’s microelectronics activities, but they did not provide an estimated date for when the plan will be completed.

Mission need statement and requirements document. NNSA has not developed a current mission need statement or a current program requirement document. In 2016, as required by DOE’s project management order on the acquisition of capital assets, NNSA issued a formal mission need statement and a requirements document to guide its assessment of the cancelled TMC project (as described earlier in this report). However, agency officials told us that these 2016 documents are no longer applicable to NNSA’s current approach to sustaining its microelectronics capability and evaluating options to ensure a continued capability after 2040. NNSA officials said that they intend to establish an updated set of requirements to guide the agency’s future microelectronics capability, and that they will consider these requirements in establishing a future mission need statement. However, NNSA officials did not provide a timeframe for finalizing these documents.

NNSA officials acknowledged the importance of using management controls and that the controls described above would be useful, but they could not identify any specific DOE or NNSA directives, government-wide guidance, or best practices that they follow to manage their microelectronics activities. Instead, they offered three reasons why the agency has not implemented a more coordinated and robust set of management controls to oversee the agency’s microelectronics activities:

Microelectronics production has historically been managed as a component production effort by an LEP, which is led by an NNSA program manager within the Office of Defense Programs who coordinates directly with other NNSA offices and Sandia contractors.

Because NNSA has not designed microelectronics as a formal program, the requirements contained in the agency’s program management directives are not binding on microelectronics activities.

NNSA officials said that the multiple projects (identified in the MESA Complex extended life plan) to upgrade and sustain the microelectronics capabilities at Sandia through 2040—at an estimated cost of over $1 billion over 20 years—will not be subject to DOE’s project management order, as these projects are for sustainment and not for new facility construction. According to officials from NNSA’s Office of Safety, Infrastructure, and Operations, infrastructure investments are being planned and managed as maintenance and repair efforts.

NNSA officials told us that the agency’s current efforts provide the necessary structure for NNSA to oversee and manage its microelectronics capability. However, NNSA has recognized the importance of implementing a more coordinated and robust set of management controls for other important activities within its nuclear security mission that similarly have not been treated in the past as specific programs. For example, as we reported in June 2019, while NNSA historically managed its high-explosive capability without a formal mechanism to coordinate activities across multiple programs, it recently implemented a more robust set of management controls to oversee its high-explosive activities. Specifically, in 2018 NNSA appointed an enterprise manager to help coordinate these activities. NNSA also encouraged the enterprise manager to adopt, where appropriate, the program management controls contained in an NNSA directive on managing nuclear weapon life extension and strategic materials programs. Subsequently, the enterprise manager issued a strategic plan that provided an organizational structure for the agency’s high explosives capability. By taking a similar approach to its management of microelectronics activities and incorporating a more coordinated and robust set of management controls, the agency would have increased assurance that its planned microelectronics activities are clearly defined, efficiently executed, and effectively monitored.

Conclusions

NNSA’s ability to produce unique microelectronics for nuclear weapons is essential to ensuring a credible U.S. nuclear deterrent. Producing such microelectronics is a complex task, and NNSA is limited in its ability to partner with the commercial sector for such production. Over the next two decades, NNSA will undertake an expensive and ambitious approach to upgrade and sustain its existing microelectronics production facilities and capabilities. Specifically, NNSA plans to spend about $1 billion over the next 20 years to, among other things, upgrade its process to produce a new type of microelectronic component that has never been integrated into a nuclear weapon. In addition, NNSA officials said that the agency will need to identify and analyze options for a continued capability after 2040, and that effort could begin as early as 2021.

To increase its management and oversight of the agency’s microelectronics activities, NNSA has taken some positive steps such as appointing a microelectronics coordinator within the Office of Defense Programs and approving certain long-term planning documents. However, in contrast to other NNSA activities, including programs and projects, NNSA has not fully developed a coordinated and robust set of management controls to oversee its microelectronics activities. For example, NNSA has not established an overarching management plan to manage and coordinate the cost, schedule, and risks associated with its microelectronics activities. By incorporating a more coordinated and robust set of management controls, NNSA would have increased assurance that its planned microelectronics activities are clearly defined, efficiently executed, and effectively monitored.

Recommendation for Executive Action

The NNSA Administrator should incorporate additional management controls to better oversee and coordinate NNSA’s microelectronics activities. Such management controls could include investing the microelectronics coordinator with increased responsibility and authority, developing an overarching management plan, and developing a mission need statement and a microelectronics requirements document. (Recommendation 1)

Agency Comments and Our Evaluation

We provided a draft of this report to DOD and NNSA for review and comment. DOD did not provide any comments. In its written comments, reproduced in appendix I, NNSA neither agreed nor disagreed with our recommendation but provided three main comments. First, NNSA stated that by December 2020 the agency plans to complete a strategic management plan that will more clearly articulate the integration of management controls for the various components of its microelectronics activities. NNSA stated that it believes this action is consistent with our recommendation. We are encouraged by this planned action and will evaluate the completed strategic management plan to determine if it meets the intent of our recommendation.

Second, NNSA stated that our report did not clearly convey the differences between the management of microelectronics and other weapons or materials programs and did not include all aspects of its microelectronics activities (such as the procurement of commercial off the shelf components) in our audit’s scope. In response, we added references to the various aspects of NNSA’s microelectronics activities and clarified that our report focuses on NNSA’s strategic radiation- hardened microelectronics activities at Sandia’s MESA Complex. As stated in the report, we focused on this specific aspect of NNSA’s microelectronics mission because of the language in the Senate committee report accompanying a bill for the National Defense Authorization Act for Fiscal Year 2019, which included a provision for us to review NNSA’s efforts to recapitalize its strategic radiation-hardened microelectronics design and production capacity. We also focused on this specific aspect of NNSA’s mission because the fiscal year 2020 Stockpile Stewardship and Management Plan lists the continued production of strategic radiation-hardened microelectronics as one of four key challenges to the agency’s nuclear stockpile mission.

Third, NNSA stated that our audit did not include an assessment of management controls for the range of activities that work together to ensure the effectiveness of microelectronics planning and execution. However, our report identifies and describes these management controls, and as part of our work we considered how these controls work together. In addition and as stated above, NNSA intends to complete a strategic management plan to more clearly articulate the integration of its various microelectronics management controls, which is especially important as the agency invests about $1 billion dollars over the next 20 years while simultaneously needing to meet microelectronics production deliverables for multiple nuclear weapon modernization programs.

NNSA also provided technical comments, which we incorporated in our report as appropriate.

We are sending copies of this report to the appropriate congressional committees, the Secretary of Energy, the Secretary of Defense, and other interested parties. In addition, this report is available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-3841 or at bawdena@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 key contributions to this report are listed in appendix II.

Appendix I: Comments from the National Nuclear Security Administration

Appendix II: GAO Contact and Staff Acknowledgments

GAO Contact Staff Acknowledgments

Allison B. Bawden at (202) 512-3841 or bawdena@gao.gov In addition to the contact named above, Jason Holliday (Assistant Director), Patrick Bernard (Analyst in Charge), and Alisa Carrigan made key contributions to this report. Also contributing to this report were Jonathan Felbinger, Juan Garay, Lisa Gardner, Cindy Gilbert, Cynthia Norris, and Dan C. Royer.