Nuclear Weapons: NNSA Needs to Establish a Cost and Schedule Baseline for Manufacturing a Critical Nuclear Weapon Component
Released: 2008-06-02T00:00:00

Letter

Background

The U.S. nuclear weapons stockpile consists of nine weapon types. (See table 1.) These weapons include gravity bombs deliverable by dual-capable fighter aircraft and long-range bombers; cruise missiles deliverable by aircraft and submarines; submarine-launched ballistic missiles; and intercontinental ballistic missiles.

There are seven major phases associated with pit manufacturing operations at LANL (see fig. 1).

Disassembly–takes a source of plutonium (e.g., an existing pit) and extracts the plutonium metal.

Metal preparation–uses various chemical or electro-refining processes to remove impurities from the plutonium metal.

Foundry–heats up the plutonium metal and casts it into the desired shape.

Machining and inspection–removes unwanted material from the cast shape and inspects the machined shape for any defects.

Nonnuclear components–manufactures, tests, and qualifies nonnuclear subcomponents for pit manufacturing.

Assembly and joining–assembles the various pit components and nonnuclear components into a finished pit.

Nondestructive evaluation–inspects assembled pits to assure that final product specifications have been met.

In addition, three operations support these major phases (as shown in fig. 1).

Liquid and solid waste management–Pit manufacturing operations generate transuranic liquid and solid waste, which must be disposed of in a safe, secure manner.

Storage–Pits and associated waste materials from pit operations must be stored in a safe, secure environment to minimize their effect on human health and to ensure that they do not initiate a nuclear chain reaction.

Analytical chemistry–Samples are taken from pits to accurately determine their chemical composition and to provide assurance that a pit will meet its performance specifications.

Other operations are also required to support pit manufacturing, including quality assurance measures (e.g., calibration of equipment), maintenance of infrastructure, and support of facilities.

Pit manufacturing at LANL occurs in the PF-4 building, which was constructed in 1978 as a multiuse, plutonium research and development facility. Other pit-related facilities at LANL include the following: The CMR building, which was constructed in the early 1950s, houses most of LANL’s analytical chemistry equipment.

The Radioactive Liquid Waste Treatment Facility in Technical Area-50 (TA- 50), which has been in operation since 1963, processes transuranic liquid waste.

The Solid Waste Facility in Technical Area-54 (TA-54) stores transuranic solid waste pending disposal off site at the Waste Isolation Pilot Plant in New Mexico.

The Sigma and machine shop buildings carry out nonnuclear manufacturing and equipment installation.

In addition to these facilities, the Superblock buildings at the Lawrence Livermore National Laboratory in California are used for plutonium research and development.

NNSA oversees the pit manufacturing program at LANL through its Pit Manufacturing and Certification Campaign, which is composed of the following three subprograms: (1) Pit Manufacturing, (2) Pit Manufacturing Capability, and (3) Pit Certification. However, starting in fiscal year 2009, NNSA will transfer funding associated with the first two subprograms to the Directed Stockpile Work program, while activities associated with Pit Certification will be transferred to the Science Campaign program.

NNSA Met Its Cost and Schedule Goals but Did Not Establish Clear, Consistent Goals for the Number and Type of W88 Pits It Planned to Produce

NNSA achieved its major goals for reestablishing its pit manufacturing capability at LANL as defined by the agency in 2002. Specifically, NNSA’s schedule and production goals were to: (1) establish a capability to manufacture 10 pits per year by 2007, (2) deliver one W88 war reserve pit to the stockpile by 2007, and (3) certify LANL-produced W88 pits for use in the stockpile by 2007. In addition, NNSA estimated that pit manufacturing and certification expenditures for fiscal years 2001 through 2007 would be about $1.55 billion. NNSA officials said they believe that LANL exceeded its 2002 schedule and production goals by manufacturing 11 W88 pits, 8 of which were war reserve pits, in fiscal year 2007. In addition, according to NNSA data, LANL’s expenditures related to pit manufacturing and certification activities for fiscal years 2001 through 2007 were about $260 million under its original cost estimate. However, NNSA did not have a consistent set of production goals for W88 pit manufacturing between 2002 and 2007 and never specified the number of war reserve pits that LANL would be required to manufacture each year. In addition, NNSA’s cost estimate did not include almost $300 million in costs for a number of activities that were directly associated with the pit manufacturing and certification mission. Finally, NNSA’s cost estimate did not include a portion of over $1 billion in costs for other activities that were needed to support the production of pits, as well as a wide variety of other defense- related activities, at LANL for fiscal years 2001 through 2007.

NNSA Met Its 2002 Schedule and Cost Goals

According to NNSA officials, LANL first identified the activities necessary to manufacture and certify a W88 pit in a 1998 project plan entitled, “Integrated Pit Manufacturing and Certification Program Plan.” According to the plan, the pit manufacturing mission would require a total of about $1.25 billion for fiscal years 1996 through 2007 to fund three types of activities: (1) establishing the capability to manufacture W88 pits, (2) construction projects to support the pit manufacturing mission, and (3) engineering and physics tests to certify the LANL-produced W88 pits. In addition, the plan contained the following schedule and production milestones: (1) complete the first W88 war reserve pit in 2001, (2) complete a W87 manufacturing development unit in 2002, (3) establish a capacity to produce 10 war reserve pits per year by 2005, and (4) establish the capacity to produce 20 war reserve pits per year by 2007.

However, according to NNSA officials, NNSA recognized in 2000 that it needed to establish a better baseline of the cost, schedule, and scope needed to guide the pit manufacturing mission at LANL. As a result of this effort, LANL issued a pit manufacturing plan—entitled “W88 Pit Manufacturing and Certification Integrated Project Plan”—in March 2001.

The 2001 plan estimated that it would cost a total of about $1.55 billion for fiscal years 2001 through 2007 to manufacture and certify a W88 pit. In addition, the 2001 plan contained the following milestones: (1) establish a capability to manufacture 10 pits per year by 2007, (2) certify LANL- produced W88 pits for use in the stockpile by 2009, and (3) deliver a war reserve W88 pit to the stockpile by 2009. However, according to NNSA officials, NNSA revised the last two milestones in 2002. Specifically, NNSA moved up the milestones for LANL to deliver a war reserve W88 pit to the stockpile and certify LANL-produced W88 pits to fiscal year 2007.

NNSA officials said that LANL exceeded its 2002 schedule and production goals by manufacturing a total of 11 pits during fiscal year 2007. Of these 11 pits: NNSA plans to use 8 pits to replace existing W88 pits that will be taken out of the stockpile for use in its stockpile surveillance testing program. Specifically, surveillance testing involves destructive and nondestructive analysis to identify any defects or failures in pits. NNSA uses these tests to help maintain confidence in the safety and reliability of the stockpile without nuclear testing. According to NNSA officials, these 8 pits have been designated as war reserve quality.

NNSA plans to use 2 pits for its shelf life program, which examines how a pit ages over time. According to NNSA officials, these pits may, but are not required to, meet all of the quality standards of war reserve pits and, therefore, have not been designated as war reserve pits.

NNSA plans to subject 1 pit to destructive testing as part of LANL’s manufacturing quality control. According to NNSA officials, this pit may, but is not required to, meet all of the quality standards of war reserve pits and, therefore, has not been designated as a war reserve pit.

In addition, according to NNSA officials, LANL’s costs related to pit manufacturing were less than it estimated in its 2001 plan. According to NNSA data, the expenditures for the pit manufacturing and certification elements of the Pit Manufacturing and Certification Campaign for fiscal years 2001 through 2007 were about $1.29 billion. This amount is approximately $260 million under than the cost estimate in NNSA’s 2001 plan.

NNSA Did Not Establish Clear, Consistent Requirements for W88 Pit Production

While LANL’s 2001 plan contained goals related to a capability to manufacture 10 W88 pits per year and the delivery of a single war reserve pit to the stockpile, the 2001 plan did not define NNSA’s requirements for the total number of war reserve W88 pits that LANL needed to manufacture. In that regard, the capability to manufacture 10 W88 war reserve pits per year is different from the capability to produce 10 pits per year that are not of war reserve quality. According to NNSA officials, other types of pits, such as pits that are destructively tested as part of production quality control, may not meet the same standards and may be of lower production quality.

NNSA only recently established final requirements for the exact number and type of W88 pits to be manufactured at LANL. Specifically, NNSA issued a memorandum in February 2007 that established a total pit production requirement for LANL of 31 W88 pits for the following purposes: 18 pits will be designated as war reserve quality and will replace existing W88 pits in the stockpile for use in NNSA’s stockpile surveillance testing program, 7 pits will be used for NNSA’s shelf life program, 4 pits will be used for LANL’s manufacturing quality control program, and 2 pits will be used as spares.

However, the 2007 memorandum did not specify the number of war reserve pits that LANL would be required to manufacture each year.

Moreover, NNSA was inconsistent in the way it communicated this goal internally and to Congress. For example, according to NNSA’s 2002 baseline, a key milestone for the pit manufacturing program was to deliver a single war reserve W88 pit to the stockpile by 2007. However, in accordance with NNSA policies, officials in the NNSA pit manufacturing program office have also issued a number of program plans and implementation plans since 2002. Program plans are strategic in nature and identify the long-term goals, high-level milestones, and resources needed to support a particular program over a 7-year period, while implementation plans establish performance expectations for the program and each participating site for the current year of execution. According to NNSA’s most recent program and implementation plans for the Pit Manufacturing and Certification Campaign, a key objective of the pit manufacturing program is to establish an interim pit manufacturing capacity of “10 war reserve W88 pits per year” at LANL starting in fiscal year 2007. In addition, NNSA has established a number of annual performance targets for the pit manufacturing program, which it reports to Congress as part of its annual budget request. In particular, in its fiscal year 2008 congressional budget request, NNSA established as a performance target to produce “10 certified W88 pits” per year at LANL. According to NNSA, the term “certified pits” has the same meaning as “pits to the stockpile” or war reserve pits.

NNSA officials in the pit manufacturing office said that it was never NNSA’s intention that every pit produced by LANL would be designated as war reserve. Moreover, the officials said that there was some uncertainty in the beginning as to whether LANL would be required to manufacture any war reserve pits. However, they acknowledged the importance of clarifying the exact number of war reserve pits that LANL will required to manufacture. They said that they are more careful now in how they write the key milestones for the pit manufacturing program. For example, they said that they will write future milestones in terms of war reserve pits to clearly distinguish between requirements for war reserve pits and requirements for other types of pits.

NNSA’s Plan Did Not Include a Variety of Costs Associated with Pit Manufacturing

According to officials in NNSA’s pit manufacturing office, they generally relied on the 2001 plan to oversee activities associated with the Pit Manufacturing and Certification Campaign. However, the 2001 plan did not include cost estimates for a number of activities that were directly associated with the Pit Manufacturing and Certification Campaign. These include costs associated with the (1) support activities at the Nevada Test Site, (2) activities associated with the Pit Manufacturing Capability subprogram, and (3) activities associated with the design of the Modern Pit Facility, a large-scale pit manufacturing plant. For example, support activities at the Nevada Test Site included experiments with plutonium that supported LANL’s pit certification effort. In addition, the Pit Manufacturing Capability subprogram supported the development of pit manufacturing processes necessary to establish the capability to manufacture other stockpile pits by fiscal year 2009. As shown in table 2, the cost for these activities was almost $300 million for fiscal years 2001 through 2007.

In addition, the 2001 plan did not include some portion of the costs of other activities that were needed to support the production of pits, as well as a wide variety of other defense-related activities, at LANL between fiscal years 2001 and 2007. These activities include (1) operations and maintenance of key facilities, including PF-4, CMR, and waste processing facilities at TA-50 and TA-54; (2) processing of waste material containing plutonium; and (3) physical security. Specifically: Operations and maintenance includes all labor, equipment, and projects required to maintain the facilities as “mission capable” to perform programmatic tasks. In this case, the key facilities are PF-4, CMR, and waste processing facilities at TA-50 and TA-54. NNSA funds these activities using the budget category Readiness in Technical Base and Facilities, Operations of Facilities. In addition, NNSA provides funding for deferred maintenance at these facilities using the budget category Facilities and Infrastructure Recapitalization Program.

Processing of waste material from plutonium operations includes the cost of processing, packaging, and shipping the waste from each facility. For example, when liquid waste is generated by plutonium operations (including pit manufacturing) at PF-4, LANL transfers this waste to TA-50. Once this liquid waste is processed at TA-50 into solid waste, LANL transfers the solid waste to TA-54 for final packaging. Finally, this solid waste is shipped off site to the Waste Isolation Pilot Plant in New Mexico.

Physical security includes the protective forces, consisting of armed uniformed officers, and physical security systems—including intrusion detection and assessment barriers, access controls, tamper protection monitoring, and performance testing and maintenance of security systems—at the TA-55 site, which houses the PF-4 building.

In addition, the following eight construction projects supported the pit manufacturing mission, as well as other LANL missions, between fiscal years 2001 and 2007: CMR Upgrades project–activities associated with upgrading various infrastructure systems at CMR, including ventilation, fire, and emergency lighting controls.

CMR Replacement project–activities associated with the planned construction of a replacement for the CMR building.

TA-55 Reinvestment project, Phase I–activities associated with upgrading the major facility and infrastructure systems at PF-4.

TA-55 Radiography Facility–activities associated with the planned construction of a high-energy radiography facility at TA-55.

Radioactive Liquid Waste Treatment Plant Upgrade project–activities associated with renovating and constructing new buildings associated with LANL’s radioactive liquid waste treatment and disposal capability.

TRU Waste Facility–activities associated with the planned construction of a new transuranic solid waste facility.

Nuclear Materials Safeguards and Security Upgrades project, Phases I and II–activities associated with upgrading the security features at TA-55.

Table 3 provides examples, based on expenditure data provided by LANL, of these types of expenditures for fiscal years 2001 through 2007, which total over $1.3 billion.

Previous pit manufacturing plans contained estimates for some of these types of activities. For example, the 1998 pit manufacturing project plan identified about $136 million in planned expenditures to support construction projects directly related to pit manufacturing operations for fiscal years 1996 through 2008. These projects were primarily designed to upgrade equipment and facility infrastructure at the TA-55 site. The 1998 plan also identified about $439 million in planned expenditures primarily to maintain the infrastructure at the TA-55 site and the CMR building for fiscal years 1996 through 2008. According to the plan, these costs would support the execution of the pit manufacturing mission but were not directly attributable to pit production.

LANL officials said that they recognize the importance of accurately tracking and accounting for these kinds of supporting costs. For example, one LANL official said that LANL plans to implement a new cost distribution model in fiscal year 2009 that will enable the laboratory to allocate the cost of shared infrastructure activities, such as the cost associated with radiological control technicians, across the various programs and missions that reside in TA-55 and CMR. This cost distribution model will use the percentage of space occupied by the tenant programs in TA-55 and CMR as the basis for distributing the shared costs. According to the model, as of September 1, 2007, the pit manufacturing and certification program occupied about 35 percent of the space in TA-55 and 30 percent of the space in CMR. However, NNSA pit manufacturing program officials noted that these types of costs support the total program portfolio at LANL, including defense-related and nondefense-related activities. They also said that they purposely did not include the costs associated with these activities in the Pit Manufacturing and Certification Campaign to ensure a tight focus on the objectives of the campaign.

Several Factors Constrain NNSA’s Ability to Increase Its Pit Manufacturing Capacity

Because of three major constraints on pit manufacturing operations at LANL, NNSA will not be able to substantively increase its pit manufacturing capacity for the foreseeable future. First, LANL’s existing facility for performing analytical chemistry has major operational and structural limitations. Second, LANL’s ability to store pits and associated waste is constrained by limited vault space. Finally, large-scale pit manufacturing operations are constrained by the lack of available floor space within the PF-4 building and by the facilities that process waste material containing plutonium.

LANL’s Existing Facility for Analyzing Pit Samples Has Major Operational Limitations

LANL analyzes plutonium from pit subcomponents, feed materials, and waste streams for a variety of purposes. These analyses provide the (1) data required to certify the material control and accountability of the plutonium feed and waste materials, (2) chemical accuracy for quality control of the product, and (3) assurance that the pit will meet its performance specifications. The CMR building, which was constructed in the early 1950s, houses most of LANL’s analytical chemistry capabilities. According to LANL estimates, for each pit that is produced at PF-4, the pit manufacturing program generates an average of about 10 to 15 samples that have to be sent to CMR for analytical chemistry analyses. Chemists at CMR take each sample and conduct multiple analyses or “instrument runs.” As a result, each pit generates an average of about 100 to 150 instrument runs at CMR.

According to LANL estimates, CMR currently contains enough analytical chemistry instruments to support a pit production rate of 20 pits per year. However, because of several limiting factors, LANL officials estimate that the CMR building can only support a pit production capacity of between 10 to 15 pits per year. The major factor limiting analytical chemistry operations in CMR is the need to impose safety restrictions on CMR’s operations that involve plutonium. In 1992, DOE began a planning process aimed at upgrading many of the safety, security, and safeguards features of CMR. Later, in 1997 and 1998, a series of operational, safety, and seismic issues surfaced that affected the long-term viability of CMR. For example, studies identified a seismic fault trace beneath one of the wings of the CMR building that increased the level of structural integrity required to meet current structural seismic code requirements for a Hazard Category 2 nuclear facility.

DOE decided that it would be too difficult and costly to correct the CMR building’s defects by performing repairs and upgrades. Instead, DOE decided to perform only the upgrades necessary to ensure the safe and reliable operation of the CMR building through 2010. In addition, LANL imposed a number of restrictions on the CMR facility’s operations and capabilities. For example, the areas within CMR that perform analytical chemistry analyses are limited to handling no more than approximately 200 grams of plutonium material (equivalent to Pu-239) at a time. Moreover, according to LANL officials, the analytical chemistry areas in CMR may not be available for programmatic work for as much as 25 percent of the time due to the age and deteriorating condition of the building. A final limiting factor is that the pit manufacturing program at LANL does not have dedicated analytical chemistry instruments within the CMR building. Specifically, while pit manufacturing accounts for almost 60 percent of the analytical chemistry work at CMR, the rest of the work is conducted for other programs within PF-4, including programs associated with NNSA’s Office of Defense Nuclear Nonproliferation and DOE’s Office of Nuclear Energy.

LANL’s Ability to Store Pits and Associated Wastes Is Constrained by Limited Vault Space

LANL maintains a storage vault in PF-4 to store old pits, newly manufactured pits, pit residues, and waste material containing plutonium. The storage vault is about 4,500 square feet in size and was designed to provide adequate storage for special nuclear materials in a research and development setting. As a result, the storage vault was not designed to store large amounts of pits and waste material that result from large-scale pit manufacturing operations. By comparison, the Rocky Flats Plant, which manufactured pits for DOE until 1989, had a storage area of about 8,000 to 10,000 square feet.

According to LANL officials, vault space within PF-4 was one of the major limiting factors for pit production in fiscal year 2007. For example, in August 2007, LANL officials had to temporarily cease pit manufacturing operations because they had no more room in the vault to store pits. In particular, the lack of vault space has led to significant amount of “on-the- floor” storage of material, whereby materials are stored in safes on the process floor, over the past 10 years. According to LANL officials, the vault in PF-4 is currently operating at 120 percent of its originally designed capacity.

Pit Manufacturing Operations at LANL are Constrained by Lack of Additional Floor Space

PF-4 was originally designed as a research and development facility to support multiple DOE nuclear research programs. As a result, PF-4 houses a variety of programs. Specifically, as shown in figure 2, operations related to pit manufacturing and certification occupy about 35 percent of the available space in PF-4. Another 29 percent is used by the Readiness in Technical Base and Facilities program, which operates and maintains NNSA program facilities in a safe, secure, reliable, and compliant condition. In particular, this program is responsible for facility operations and maintenance and addressing environment, safety, and health issues. The remaining 36 percent of available space in PF-4 is used by other programs. (See table 4 for a description of these programmatic areas.)

Because the majority of the space in PF-4 is occupied by other programs, NNSA is limited in its ability to expand its pit manufacturing operations into other areas in PF-4. In order for the pit manufacturing mission to acquire new space, NNSA Office of Defense Programs officials have to negotiate with the departmental sponsor of the other programs. For example, in June 2007, the NNSA Office of Defense Programs signed a memorandum of agreement with the DOE Office of Nuclear Energy to consolidate the activities conducted by the ceramic fuels program into a single room, thereby freeing up an additional room for use by NNSA. However, because NNSA has not issued a record of decision on its efforts to transform the nuclear weapons complex, the Office of Defense Programs has not reached a decision on whether to make the space available for pit manufacturing operations, for analytical chemistry analyses, or for the consolidation of special nuclear materials from other sites in the nuclear weapons complex. In addition, it will take several years for NNSA to consolidate the ceramic fuels program, decontaminate the room, and install the necessary new gloveboxes and equipment.

Pit Manufacturing Operations at LANL Are Also Constrained by Waste Processing Facilities

Pit manufacturing operations at PF-4 generate liquid and solid transuranic waste. Liquid waste is processed at the Radioactive Liquid Waste Treatment Facility at TA-50, which has been in operation since 1963. This facility treats approximately 80,000 liters of transuranic waste a year. According to LANL officials, the facility can currently process enough liquid waste to support a pit capacity of about 30 pits per year using a single shift of operations. However, the Radioactive Liquid Waste Treatment Facility processes waste from PF-4, CMR, and at least seven other nuclear research, production, and support facilities. As a result, the tranuranic waste stream is influenced by multiple programs at LANL that support nuclear research and production and varies significantly in volume on a daily basis—potentially constraining pit capacity.

Transuranic solid waste is placed in drums at the generating facilities— PF-4 being the largest source of transuranic drums at LANL—and sent to LANL’s TA-54 area for inspection and characterization. This waste is ultimately shipped to the Waste Isolation Pilot Plant in New Mexico for final storage. According to LANL officials, the main limiting factor in LANL’s ability to process and ship solid waste is its ability to stage and store drums of solid waste before they are shipped off-site. In fiscal year 2007, TA-55 generated about 450 drums of transuranic solid waste. Of this amount, roughly half came from pit manufacturing operations. According to LANL estimates, TA-54 can currently support a pit manufacturing capacity of between 20 to 30 pits per year. However, under an agreement with the state of New Mexico, DOE will close significant portions of TA-54, including operations involving transuranic solid waste, by 2010. NNSA has initiated a TA-50 transuranic waste consolidation project to establish the necessary capabilities to handle solid waste after TA-54 is no longer available. According to LANL, this facility needs to be operational in the 2011-2013 time frame.

In commenting on our report, NNSA officials agreed that they will not be able to increase LANL’s pit manufacturing capacity to larger levels (e.g., 50 to 80 pits per year) without improvements to supporting facilities. However, they said that they had some flexibility to achieve a modest increase in LANL’s pit manufacturing capacity to address a specific requirement for additional pits. In that regard, they said that they could apply more shifts, add equipment to PF-4, move some material out of the storage vault in PF-4, and make some adjustments to analytical chemistry requirements. However, NNSA officials did not provide any details on how many additional pits they would be able to produce if they performed these activities.

NNSA Has Not Established a Cost and Schedule Baseline for Its Future Pit Manufacturing Mission

NNSA’s plans for future pit manufacturing are still being developed and, as a result, no reliable cost estimates exist. Over the past few years, NNSA and DOD had planned to develop the capability to produce RRW pits beginning about 2014. However, the explanatory statement accompanying the fiscal year 2008 NNSA appropriation stated that the bill provided no funding for the RRW program. While NNSA and DOD continue to support the RRW program, in the short run, NNSA plans to maintain the existing pit manufacturing capability at LANL. Over the long term, NNSA is planning, with DOD’s concurrence, to upgrade the PF-4 facility to achieve a production capacity of up to 80 pits per year. However, NNSA has not established a cost and schedule baseline to support its projected efforts. Using the best available data, we estimated that NNSA’s plans entail spending several billion dollars at LANL over the next decade.

NNSA Has Changed Its Strategy for Manufacturing Future Pit Types over the Past Few Years

One of NNSA’s original goals for the pit manufacturing mission was to develop the technology and demonstrate the processes required to manufacture all pit types in the enduring stockpile by the end of fiscal year 2009. NNSA planned to achieve this milestone by first demonstrating the key manufacturing processes for the W87 and B61-7 pits. However, with the creation of the RRW program, NNSA’s strategy changed. Specifically, In April 2006, NNSA issued guidance to the nuclear weapons complex to demonstrate the capacity to manufacture and certify an RRW by 2012.

In October 2006, as part of its Complex Transformation effort, NNSA issued a planning document describing its vision for the nuclear weapons complex of the future. According to the document, NNSA wanted to establish an RRW-based stockpile plan by the end of 2007 with a majority of intercontinental ballistic missile, submarine-launched ballistic missiles, bombs, and cruise missiles transitioning to RRW-types by 2030.

In February 2007, NNSA established a planning target of “2014 plus or minus two years” to produce an RRW first production unit. In particular, by March 2007, NNSA planned to manufacture an RRW first production pit by the end of fiscal year 2012.

In December 2007, as part of its Complex Transformation planning effort, NNSA issued a draft plan stating that the first RRW was being considered as a possible replacement for the Navy’s W76 warhead starting as early as the 2014 time frame.

At the same time, the Nuclear Weapons Council began considering a variety of scenarios based on different stockpile sizes and the degree to which the stockpile would incorporate new RRW designs. According to a senior DOD official on the Nuclear Weapons Council staff, while the council has not issued a final decision as to the size and composition of the future stockpile, the council has considered how large the stockpile needs to be in order to maintain a sufficiently large, responsive manufacturing infrastructure—comprised of people and equipment that can be responsive to future global geopolitical events. In addition, the council has considered the number of warheads that will need to be either refurbished or replaced in the coming decades.

However, the explanatory statement accompanying the fiscal year 2008 NNSA appropriation stated that the bill provided no funding for the RRW program. NNSA and DOD officials still support the goals of the RRW program. For example, in recent testimony before the House Armed Services Subcommittee on Strategic Forces, the Commander of the U.S. Strategic Command stated that his agency supports the continuation of the RRW design definition and cost study to explore a replacement for aging warheads in the stockpile. However, in the short term, NNSA has shifted its strategy for pit manufacturing. Specifically, in its fiscal year 2009 budget request to Congress, NNSA stated that three of its key objectives for the pit manufacturing mission were to (1) establish the capability to manufacture replacement pits for warheads other than the W88, (2) improve manufacturing processes used to manufacture all pit types, and (3) develop the processes and equipment necessary to manufacture pits for future requirements. According to NNSA officials in the pit manufacturing office, their activities in 2009 will focus on continuing to manufacture W88 pits, documenting the processes necessary to manufacture other pit types, and developing the technology necessary to increase the capacity for pit manufacturing beyond 10 pits per year. Moreover, they said that the mission for the pit manufacturing program going forward is to maintain the existing capability and the quality control infrastructure to be able to manufacture whatever the DOD requires.

NNSA Has Changed Its Plans for Future Pit Capacity Over the Past Few Years

NNSA’s initial goals for large-scale pit manufacturing focused on the construction of a new production facility. For example, in May 2002, the Secretary of Energy approved the start of design work for a large-scale manufacturing plant called the Modern Pit Facility. This facility was designed to address the long-term pit manufacturing capability and capacity required to support the nuclear weapons stockpile. Specifically, it would be able to manufacture pits at a production capacity of 125 pits per year. However, the conference report accompanying the fiscal year 2006 NNSA appropriation stated that it provided no funding for the Modern Pit Facility and directed NNSA to focus on improving its manufacturing capability at LANL. As a result, NNSA suspended the Modern Pit Facility indefinitely.

In October 2006, NNSA offered a new proposal to address the need for a large-scale pit manufacturing facility. Specifically, in its Complex Transformation plan, NNSA proposed to build a new, consolidated plutonium center at an existing DOE site that would replace the interim pit facility at LANL by 2022. As with the planned capacity of the Modern Pit Facility, NNSA planned to design the consolidated plutonium center for a production capacity of 125 pits per year to support an RRW-type stockpile. In addition, NNSA planned to upgrade the manufacturing operations at LANL in order to achieve a production capacity of up to 50 RRW pits per year by 2012. It planned to maintain this capacity at LANL until 2022, when pit operations at LANL would cease, and the consolidated plutonium center would begin operations. However, the explanatory statement accompanying the fiscal year 2008 NNSA appropriation stated that no funding was provided for the consolidated plutonium center and directed NNSA to focus on developing a modern nuclear weapons strategy, including the required pit production capacity defined by nuclear stockpile requirements. As a result, NNSA suspended work on the consolidated plutonium center.

Since the issuance of its 2006 planning document, NNSA’s strategy for large-scale pit manufacturing has changed. Specifically, in December 2007, as part of its Complex Transformation planning effort, NNSA issued a draft plan establishing various alternatives for the future of its pit manufacturing mission. One alternative remained the construction of a consolidated plutonium center with a capacity of 125 pits per year for a single shift of operations. However, NNSA listed as its preferred alternative an upgrade of the existing PF-4 building at LANL to produce up to 80 pits per year. According to the plan, the actual time frame for reaching this capacity will depend on an operational date for new analytical chemistry and vault storage space at LANL.

DOD officials have only recently agreed to support NNSA’s plan to manufacture up to 80 pits per year at LANL. According to the 2007 Nuclear Weapons Stockpile Memorandum, the Nuclear Weapons Council stated that NNSA will need to provide a pit manufacturing capacity of 125 pits per year going forward. According to a senior DOD official on the Nuclear Weapons Council staff, the council voted on February 20, 2008, to support a baseline production capacity of 50 to 80 pits per year. However, at that meeting, the council stated that future changes to stockpile size, military requirements, and risk factors may ultimately lead to a revised capacity rate. According to the senior DOD official, it is possible that this revised capacity rate will ultimately be larger than 80 pits per year.

NNSA’s Current Plans Are Draft and Do Not Contain Reliable Cost Estimates

Given the amount of uncertainty surrounding NNSA’s strategy for its future pit manufacturing mission, NNSA’s current plans have been in a state of flux over the past year and remain in draft. For example, LANL issued a draft “Pit Manufacturing Program Execution Plan” in September 2007 to identify the scope, schedule, and budget necessary to execute NNSA’s strategy for manufacturing RRW pits around the 2014 time frame. The draft plan stated that the laboratory had not completed fundamental planning and scheduling activities—which would include the development of a fully integrated, resource-loaded schedule and risk management assessment—to validate budget and schedule requirements. As a result, LANL considered its plan to be preliminary. However, when the explanatory statement accompanying the fiscal year 2008 NNSA appropriation stated that the bill provided no funding for the RRW program, LANL revised the plan to support an upgrade of the existing PF-4 building to produce up to 80 pits per year, as reflected in NNSA’s current Complex Transformation planning effort. According to NNSA program officials, LANL is still on track to issue a final plan by the summer of 2008, which will reflect the program’s new strategy. However, they currently do not have a final baseline for the plan’s cost, schedule, and scope.

Using the best available data, we estimate that NNSA’s current strategy would entail spending over $1 billion on activities directly associated with the pit manufacturing mission at LANL over the next 5 years. Specifically, according to NNSA’s fiscal year 2009 budget request and out-year funding schedule, NNSA plans to fund the following activities from fiscal years 2009 through 2013: Over $730 million on activities associated with pit manufacturing Over $258 million on activities associated with pit manufacturing capability, which is associated with the capability to manufacture pits for other warhead types beside the W88 and to develop the technology necessary to manufacture pits at higher rates with reduced costs.

For fiscal year 2009, NNSA also plans to spend almost $43 million on activities associated with pit certification. However, because NNSA realigned all activities associated with the Pit Manufacturing and Certification Campaign in its fiscal year 2009 budget request, we were not able to account for the costs of these activities in NNSA’s out-year funding schedule (from fiscal years 2010 through 2013).

NNSA’s plans also call for spending hundreds of millions of dollars to install a second manufacturing line for producing pits. Specifically, in a 2006 study, LANL estimated that it could cost up to approximately $500 million to install a new manufacturing line and upgrade the electrorefining equipment in PF-4 by the 2014 time frame. However, according to NNSA program officials, it could cost as much as $1 billion to perform the necessary research and development work, procure and install the necessary equipment, and upgrade the PF-4 infrastructure, among other things.

In this report, we previously identified four types of activities that are needed to support the production of pits, as well as a wide variety of other defense-related activities at LANL. These activities include (1) operations and maintenance of key facilities, including PF-4, CMR, and waste processing facilities at TA-50 and TA-54; (2) processing of waste material containing plutonium; (3) physical security; and (4) construction projects.

Operations and maintenance of key facilities: According to LANL estimates, NNSA plans to spend about $846 million between fiscal years 2009 and 2013 on operations and maintenance activities at PF-4, CMR, and waste processing facilities at TA-50 and TA-54. In addition to these costs, NNSA is considering a plan to extend the life of the CMR building beyond 2010, which is the year when the building’s safety basis expires. According to a 2006 LANL study, it will cost approximately $100 million to continue operations at CMR from 2009 to 2013. Beyond 2013, LANL estimated that it would cost an additional $160 million to $240 million to upgrade some of CMR’s major systems, such as its electrical and heating systems. As a result, LANL estimated that it could cost between $240 million to $360 million to maintain the CMR building up to and beyond the 2013 time frame. “The Board understands that LANL plans to develop a CMR facility safety basis for post- 2010 operations, with approval and implementation of this new safety basis in 2009. It is unlikely that this effort will eliminate or mitigate the safety risks of operating the CMR facility beyond 2010 without significant facility upgrades or mission changes. This timetable leaves little time for NNSA to complete any necessary safety system upgrades or identify alternative strategies for meeting national security priorities.”

According to NNSA officials, if NNSA cannot develop a satisfactory plan to extend operations at CMR beyond 2010, NNSA would have to find a new location at LANL or LLNL to perform analytical chemistry operations to support pit manufacturing. They said that NNSA is still working through this process with the Defense Nuclear Facilities Safety Board.

Processing of waste material containing plutonium: According to LANL estimates, NNSA plans to spend about $87 million for fiscal years 2009 through 2013 to process, package, and ship transuranic waste at the waste processing facilities at TA-50 and TA-54.

Physical security: According to LANL estimates, LANL plans to spend about $179 million on security at the TA-55 site for fiscal years 2009 through 2013.

Construction projects: The largest single cost is associated with the proposed CMR Replacement project, which would house LANL’s analytical chemistry equipment and provide a new storage vault for plutonium and other special nuclear material. The CMR Replacement project has been in the planning stages since 2001. According to current designs, the CMR Replacement project will include a storage vault of about 13,000 square feet in size. However, the current design work did not account for NNSA’s strategy to support a larger pit production rate of up to 80 pits per year at PF-4. One NNSA official stated that a new design for a larger CMRR Replacement facility, which would include an additional 9,000 square feet of laboratory space, could add as much as $500 million to the total cost.

NNSA has not established a baseline for the cost and schedule of the CMR Replacement project. In its fiscal year 2008 budget request, NNSA estimated that this project would cost over $837 million and start operations by the end of fiscal year 2014. However, in its fiscal year 2009 budget request, NNSA estimated that this project could cost over $2 billion and did not provide a planned date for the start of operations. NNSA officials said that NNSA does not expect to reach a final decision regarding the design of this facility or the expected date of operations until it issues a record of decision as part of its Complex Transformation planning effort, which is expected later in 2008.

Finally, table 5 shows the costs associated with the remaining construction projects that will support a variety of missions, including the pit manufacturing mission, at LANL over the next decade. These costs total to over $500 million.

Conclusions

The capability and capacity to manufacture pits for nuclear warheads is important to maintaining the nation’s nuclear weapons deterrent, either through supporting the current nuclear stockpile or producing any new warheads, such as the proposed RRW. As such, NNSA’s reestablishment of a W88 pit manufacturing capability at LANL represents a positive step. However, NNSA’s long-term strategy for the pit manufacturing mission, and its attendant costs and schedule, is in a state of flux. In our 1998 report on pit manufacturing, we recommended that DOD provide DOE with its views on the pit manufacturing capacity needed to maintain the then existing stockpile. Since then, the two agencies have reached a decision to support a future pit manufacturing capacity of up to 80 pits per year at LANL. However, DOD and NNSA have shifted their focus from the existing stockpile to a potential stockpile of new RRWs. Whether DOD, NNSA, and Congress commit to supporting the replacement of warheads in the existing stockpile or the production of RRW-type warheads, NNSA will need to take two key actions before it can complete any draft plans for pit manufacturing and project future costs and schedules with any precision. Specifically, building on its agreement with DOD, NNSA will need to establish clear, well-defined production goals for the type and number of war reserve pits to be produced each year at LANL. In addition, using these production goals, NNSA will need to fully account and plan for all costs associated with the pit manufacturing mission, including supporting costs associated with operation and maintenance, waste processing, security, and construction. Without these actions, we believe that NNSA will not have a sufficient baseline against which to manage future pit manufacturing missions.

Recommendations for Executive Action

To ensure that NNSA establishes a sufficient cost and schedule baseline that it can use to manage pit manufacturing operations in an efficient and cost-effective manner, we recommend that the Administrator of NNSA take the following two actions: Develop clear, well-defined production goals for the type and number of war reserve pits to be produced each year at LANL and include them in any plan for the future pit manufacturing mission.

Establish an integrated cost baseline for future pit manufacturing at LANL that accounts for the entire pit-manufacturing mission, including supporting costs associated with operation and maintenance, waste processing, security, and construction of supporting facilities.

Agency Comments and Our Evaluation

We provided a draft of this report to NNSA and DOD for their review and comment. NNSA did not specifically comment on our recommendations. However, NNSA provided general comments on our findings that NNSA had not developed complete cost estimates for the W88 pit manufacturing mission and that NNSA had not developed clear requirements for the number of W88 war reserve pits it planned to manufacture.

With respect to the completeness of NNSA’s cost estimate for W88 pit manufacturing, NNSA stated that the pit manufacturing mission should not be accountable for certain costs directly associated with the pit manufacturing and certification project, such as activities at the Nevada Test Site, or the costs associated with support facilities, such as PF-4, because these facilities and their capabilities would be required to address other program requirements, regardless of the presence of the pit manufacturing program. However, we note that NNSA’s 1998 pit manufacturing project plan did include both direct costs, such as construction costs directly related to pit manufacturing, as well as support costs, such as those needed to maintain the infrastructure at PF-4. In addition, we found that currently LANL is developing a cost distribution model that will allow the laboratory to allocate the cost of shared activities at facilities such as PF-4 and CMR. Therefore, we continue to believe that in order for NNSA to be able to successfully manage future pit manufacturing missions such as those proposed in NNSA’s Complex Transformation documents, it will need a cost baseline that accounts for all costs, including an appropriate portion of the necessary supporting costs.

With respect to the need for clear requirements for the number of W88 war reserve pits NNSA planned to manufacture, NNSA stated that the main purpose of the pit manufacturing and certification project was to reconstitute pit manufacturing with a limited manufacturing capacity. NNSA stated that the lack of available pits to support the surveillance program for the W88 warhead was the near term requirement and the driver for the project’s schedule. However, according to NNSA, the exact number of pits to be manufactured was immaterial to the scope and purpose of the project. While we agree that NNSA has successfully reestablished the capability to manufacture W88 pits at LANL, as we state in our report, and as acknowledged by NNSA officials responsible for the pit manufacturing program, it is important for NNSA to establish the exact number of war reserve pits that it plans to manufacture in the future. NNSA’s ability to determine the specific number of war reserve pits it plans to produce per year is directly tied to decisions Congress will need to make about any future pit manufacturing mission. For example, a projected manufacturing capacity of 50 pits per year would result in a very different estimate for scope, cost, and schedule than a manufacturing capacity of 10 pits per year. Therefore, we continue to believe that NNSA needs to implement our recommendation that it develop clear, well- defined production goals.

NNSA’s comments on our draft report are included in appendix I. NNSA also made technical comments, which we incorporated into this report as appropriate. According to the Deputy Assistant to the Secretary of Defense for Nuclear Matters, DOD did not have any comments on this report.

As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 10 days from the report date. At that time, we will send copies of this report to the Secretaries of Energy and Defense, the Administrator of NNSA, and appropriate congressional committees. We also will make copies available to others on request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions on this report, please contact me at (202) 512-3841 or aloisee@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix II.

Appendix I: Comments from the National Nuclear Security Administration

Appendix II: GAO Contact and Staff Acknowledgments

Staff Acknowledgments

In addition to the individual named above, James Noel, Assistant Director; Jason Holliday; and Stephen Marchesani made significant contributions to this report.