Modernizing the Nuclear Security Enterprise: NNSA Increased Its Budget Estimates, but Estimates for Key Stockpile and Infrastructure Programs Need Improvement
Released: 2015-08-06T00:00:00

Letter

Background

Congress funds NNSA’s modernization efforts through various activities and programs within the Weapons Activities appropriation that generally address four areas: (1) stockpile, (2) infrastructure, (3) ST&E capabilities, The four areas, which are described in and (4) other weapons activities.greater detail below, are interconnected. For example, research and experiments funded in the ST&E area contribute to the design and production of refurbished weapons, funded in the stockpile area. The infrastructure area offers critical support to both the stockpile and ST&E capabilities areas by providing a suitable environment for their various activities, such as producing weapons components and performing research and experimentation activities. The other weapons activities area offers support to the three other areas by, for example, providing for the security of nuclear weapons and nuclear material. In fiscal year 2015, the President requested $8.3 billion in total appropriations for Weapons Activities, and the Congress appropriated $8.2 billion.

The stockpile area includes weapons refurbishments through LEPs and other major weapons alterations and modifications; surveillance efforts to evaluate the condition, safety, and reliability of stockpiled weapons; maintenance efforts to perform certain minor weapons alterations or to replace components that have limited lifetimes; and core activities to support these efforts, such as maintaining base capabilities to produce uranium and plutonium weapons components. Our analysis of NNSA’s data indicates that about 40 percent of the budget estimates for the stockpile area from 2015 to 2039 is for LEPs. The U.S. nuclear weapons stockpile is composed of seven different weapon types, including air- delivered bombs, ballistic missile warheads, and cruise missile warheads (see table 1).

The infrastructure area involves NNSA-owned, leased, and permitted physical infrastructure and facilities supporting weapons activities. NNSA’s 2015 nuclear security budget materials include information on budget estimates for three major types of infrastructure activities: operating and maintaining the existing infrastructure, recapitalizing (improving) existing facilities, and constructing new facilities. Our analysis of NNSA’s budget materials indicates that about 57 percent of the budget estimates for infrastructure from 2015 to 2039 is for the operation, maintenance, and recapitalization of existing facilities and about 27 percent is for new facilities construction.

The ST&E capabilities area is composed of five “campaigns,” which are technically challenging, multiyear, multifunctional efforts to develop and maintain critical science and engineering capabilities, including capabilities that enable the annual assessment of the safety and reliability of the stockpile, improve understanding of the physics and materials science associated with nuclear weapons, and support the development of code-based models that replace underground testing. Our analysis of NNSA’s data indicates that about 36 percent of the budget estimates for the ST&E capabilities area from 2015 to 2039 are for the Advanced Simulation and Computing Campaign. This campaign procures supercomputers; develops the computer code to simulate nuclear weapons; and develops simulations to analyze and predict these weapons’ performance, safety, and reliability and to certify their functionality.

Other weapons activities include budget estimates associated with nuclear weapon security and transportation, as well as legacy contractor pensions, among other things. Our analysis of NNSA’s data indicates that about 44 percent of the budget estimates for the other weapons activities area from 2015 to 2039 are for nuclear weapon security.

NNSA’s modernization efforts in the areas described above include those directed toward NNSA’s goal of stopping the growth of its deferred maintenance backlog in its facilities and infrastructure.maintenance can be avoided either by conducting scheduled Deferred maintenance activities, recapitalization activities, or demolition activities. Maintenance activities—including the replacement of parts, systems, or components—are needed to preserve or maintain a facility in an acceptable condition to safely operate. Regular maintenance throughout a facility’s service life can minimize deferred maintenance or prevent it from accumulating. NNSA’s budget materials contain two categories of maintenance budget estimates: direct-funded and indirect-funded. According to a NNSA official, estimates for direct-funded maintenance are included in the budget in two places: (1) the maintenance account specified in NNSA’s budget materials and (2) the program budgets for certain NNSA programs that are the major users of key scientific and production facilities, such as the Advanced Simulation and Computing Facility at Lawrence Livermore National Laboratory and the Tritium Extraction Facility at the Savannah River Site. Indirect-funded maintenance represents activities that are budgeted and paid for as part of a site’s overhead costs. According to NNSA officials, some sites, such as Lawrence Livermore National Laboratory, use indirect-funded maintenance as the primary way to budget and pay for maintenance. The 2015 budget materials estimate that NNSA will budget $1.6 billion for direct-funded maintenance over the next 5 years and $2.3 billion for indirect-funded maintenance over the next 5 years. NNSA identifies the total direct and indirect budget estimates planned for maintenance at each site and reports this information for the FYNSP in the congressional budget justification. NNSA is required by DOE to collect this information from its management and operating contractors through a DOE prescribed tool known as the Integrated Facilities and Infrastructure Crosscut Budget.

NNSA can recapitalize facilities or their subsystems (e.g., roofing, ventilation systems, and electrical systems) when they wear out or become outdated (i.e., reach the end of their useful service life). For example, in 2016 NNSA plans to replace approximately 500 sprinkler heads, which are about 50 years old, in a building that manufactures nonnuclear components at its Y-12 National Security Complex in Tennessee. Similarly, in 2015, NNSA continues to upgrade a control tower’s electrical and mechanical components at its Sandia National Laboratories site in New Mexico to support nonnuclear testing activities for nuclear bombs. The 2015 budget materials estimate that $1.8 billion will be spent on recapitalization over the next 5 years and that $11.5 billion will be spent on such recapitalization over the next 25 years. According to officials, if NNSA determines that a facility is no longer needed for mission operations, the agency can demolish the facility. For example, NNSA recently demolished building 9744 at the Y-12 plant because the support structure was failing. Budget estimates for demolition are included as a subprogram in the recapitalization estimates; the 2015 budget materials contain 5-year budget estimates of $105 million and 25-year estimates of $230 million for demolition activities.

The current process by which NNSA prioritizes infrastructure investment is based on data on a facility’s condition and importance to achieving programmatic goals. Contractors that manage and operate each site within the nuclear security enterprise are required by a DOE order to inspect all facilities on their site at least every 5 years and are to update DOE’s infrastructure database annually with information relating to the condition of the site’s facilities. This information includes estimating the amount of a facility’s deferred maintenance and its replacement plant value, which is the cost to replace the existing structure with a new structure of comparable size using current technology, codes, standards, and materials. According to DOE’s real property asset management order, a facility’s condition is determined based on the scale shown below in figure 1.

NNSA categorizes each individual facility’s importance to accomplishing its mission based on designations defined by the Federal Real Property Council. The categories are as follows:

Mission critical. Facilities and infrastructure that are used to perform activities—such as nuclear weapons production, research and development, and storage—to meet the highest-level programmatic goals, without which operations would be disrupted or placed at risk. According to NNSA data, 245 (or 4.0 percent) of the agency’s 6,085 facilities are designated as mission critical.

Mission dependent, not critical. Facilities and infrastructure—such as waste management, nonnuclear storage, and machine shops—that play a supporting role in meeting programmatic goals. According to NNSA data, 2,063 (or 33.9 percent) of the agency’s 6,085 facilities are designated as mission dependent, not critical.

Not mission dependent. Facilities and infrastructure—such as cafeterias and parking structures, that do not link directly to programmatic goals but support secondary missions or quality-of- workplace initiatives. According to NNSA data, 3,777 (or 62.1 percent) of the agency’s 6,085 facilities are designated as not mission dependent.

Total Budget Estimates for Modernization Increased Compared with 2014 Plans

NNSA’s 2015 budget estimates for modernization total $293.4 billion over 25 years, an increase of $17.6 billion (6.4 percent) from the $275.8 billion in estimates provided in 2014. These budget estimates are provided in four program areas: stockpile, infrastructure, ST&E, and other weapons activities. Some budget estimates for individual programs within these four areas changed more significantly from 2014 to 2015 than the total budget estimates changed—decreasing by as much as 31 percent and increasing by as much as 71 percent—because of changes in programs’ production schedules, scope, the methodology used to develop certain budget estimates, and budgetary structure. Figure 2 provides a comparison of total budget estimates for nuclear modernization activities in NNSA’s 2014 and 2015 budget materials.

Table 2, which appears on the next page, details the changes in NNSA’s 25-year budget estimates from 2014 to 2015 for modernization in four program areas: stockpile, infrastructure, ST&E, and other weapons activities.

Within these four program areas, we found that some budget estimates for individual programs changed more significantly from 2014 to 2015 than the total budget estimates changed—decreasing by as much as 31 percent and increasing by as much as 71 percent—because of changes in (1) programs’ scope, (2) production schedules, (3) the methodology used to develop certain budget estimates, and (4) budgetary structure. Table 3 shows the changes in the 25-year budget estimates for those individual programs with estimates that changed more significantly than the total and identifies the causes for those changes.

In the Stockpile Area and for Multiple Reasons, Budget Estimates for LEPs Decreased Significantly While Estimates for Stockpile Services Increased Significantly

The 25-year budget estimates for the stockpile area changed significantly between the 2014 and 2015 budget materials for multiple reasons. Specifically, budget estimates for LEPs decreased by $18.4 billion or 31 percent, and budget estimates for Stockpile Services increased by $11.3 billion or 37 percent. LEP budget estimates decreased due to, among other things, delayed production schedules and changes in estimating methodologies while estimates for Stockpile Services increased due to changes in program scope and budgetary structure.

Reasons for Decrease in Budget Estimates for LEPs

The 2015 budget materials estimate that, over the next 25 years, $41.7 billion will be needed for nuclear weapon LEPs, which is a decrease of $18.4 billion (31 percent) compared with the estimates contained in the prior year’s budget materials. According to NNSA documents and officials, one reason for this decrease in budget estimates is delayed production schedules. The 2015 budget materials state that NNSA will complete three LEPs—the W76-1, B61-12, and the cruise missile—as well as the W88 alteration over the next 25 years, whereas the prior year’s budget materials stated that the agency planned to complete these and an additional LEP. The program that will no longer be completed within the 25-year time frame of the 2015 budget materials is the Interoperable Warhead 1 (IW-1) LEP. The first production unit for the IW-1 LEP is now estimated to be in 2030, which is a 5-year delay over the prior year’s plans, and no programmatic activities are planned to occur during the 5-year FYNSP period from 2015 through 2019. According to NNSA documents, this schedule delay is due, in part, to the agency providing more time to study the concept of interoperability and to reduce uncertainty about the agency’s ability to achieve necessary plutonium and uranium capabilities to support the LEP. In addition, the 2015 budget materials included a 3-year delay to the first production unit of the IW-2 LEP (now estimated in 2034) and a 4-year delay to the first production unit of the IW-3 LEP (now estimated to be no earlier than 2041) compared with the prior year’s plans. These schedule delays move some budget estimates previously included in the 2014 budget materials outside the 25-year time frame covered by the 2015 budget materials. See figure 3 for a summary of changes to the production schedules for the planned LEPs from the 2014 to the 2015 budget materials, and see appendix II for a summary of schedule changes to major modernization efforts since the 2010 Nuclear Posture Review.

Second, according to NNSA officials, DOD and NNSA made programmatic decisions about one LEP’s scope that reduced uncertainties and risks. Specifically, NNSA officials said that the agency selected the W80 warhead for the cruise missile LEP (the B61 and the W84 were also under consideration). The selection of a specific warhead, according to NNSA officials, removed certain risks and uncertainties associated with the potential of conducting research and development on three separate warheads and allowed the agency to significantly lower its program cost estimate. Further, NNSA officials said that the selection of the W80 warhead allowed the agency to eliminate uncertainties related to component design, technology development efforts, and certification requirements. The 2015 budget materials estimate that $6.8 billion will be needed to complete the cruise missile LEP, while the prior year’s materials estimated that $11.6 billion would be needed. This change represents a decrease of $4.8 billion or 42 percent.

Finally, to develop LEP budget estimates for the 2015 budget materials NNSA used either (1) budget estimates contained in Selected Acquisition Reports or (2) the midpoint between the high and low bounds of the ranges in their cost estimates for LEPs and then applied a percentage inflation rate, which was calculated based on numbers provided by the Office of Management and Budget (OMB), according to NNSA officials. This methodology differed from that in the prior year’s report, in which NNSA used the low point of the estimated cost ranges and used an inflation rate higher than that which would result from the application of OMB guidance to account for uncertainties and risks. According to NNSA officials, using the midpoint estimate is a better way to account for uncertainties and risks, and using the OMB-recommended inflation rate makes LEP inflation rates consistent with the rate applied to all other NNSA programs.

Reasons for Increase in Budget Estimates for Stockpile Services

The 2015 budget materials estimate that, over the next 25 years, $42.2 billion will be needed for Stockpile Services, which is an increase of $11.3 billion (37 percent) compared with the estimates contained in the prior year’s budget materials. For three Stockpile Services subprograms, the 2015 budget materials included increased program scope. According to NNSA officials, this increased scope includes, among other things, (1) expanded manufacturing capabilities, such as the capability related to detonator production at Los Alamos National Laboratory, and (2) increased weapon assembly/disassembly and stockpile surveillance activities. For each of the three subprograms, the 25-year budget estimates increased approximately $2.0 billion over the estimates in the prior year’s materials. With regard to budgetary structure changes, the 2014 budget materials included the Tritium Readiness subprogram, with its 25-year budget estimate of $3.6 billion, in the ST&E area. The joint explanatory statement accompanying the Consolidated Appropriations Act, 2014 stated that funding for NNSA’s Tritium Readiness subprogram was being provided in the stockpile area. In its 2015 budget materials NNSA included budget estimates for the Tritium Readiness subprogram, with its 25-year budget estimate of $3.7 billion, in the stockpile area as a Stockpile Services subprogram. This budgetary structure change represents a significant increase to the budget estimate for Stockpile Services and a corresponding decrease in the ST&E area’s budget estimates, but the net increase to the overall budget estimates for modernization attributable to Tritium Readiness was small ($70 million).

In the Infrastructure Area, Significant Increase in Budget Estimates for Line Item Construction Projects Was Due to a More Complete Methodology

The 2015 budget materials estimate that, over the next 25-years, $23.0 billion will be needed for construction projects, which is an increase of $9.6 billion (71 percent) over the prior year’s materials. This increase in budget estimates for line item construction in the 2015 budget materials is because the estimates are more complete than those included in the 2014 budget materials. In December 2013, we found that the estimates contained in NNSA’s 2014 budget materials omitted most of the budget estimates for two multibillion dollar construction projects, the Uranium Processing Facility and the Chemistry and Metallurgy Research Replacement-Nuclear Facility. We recommended that NNSA include in future modernization plans at least a range of potential budget estimates for projects and programs that the agency knows are needed, and NNSA generally concurred with the recommendation. Consistent with our recommendation, in the 2015 budget materials, NNSA: (1) included preliminary estimates (at the midpoint of a low-high cost range) for the phase 2 and 3 Uranium Processing Facility and the Chemistry and Metallurgy Research Replacement-Nuclear Facility and (2) increased from $364 million to $851 million (current year dollars) budgeted for construction projects scheduled for the 20 years after the FYNSP.

In the ST&E Area, Budget Estimates for Certain Activities Increased Due to Budgetary Structure Changes and Increased Program Scope

The 2015 budget materials estimate that, over the next 25 years, $59.2 billion will be needed for all ST&E related activities, which is an increase of $5.4 billion (10 percent) over the prior year’s budget materials. Across ST&E activities, some increases in budget estimates are offset by decreases, such as the budgetary structure change described above that moved the Tritium Readiness subprogram from the ST&E area to the stockpile area. The most significant increases in the ST&E area are as follows:

The 25-year estimates in the 2015 budget materials for the Inertial Confinement Fusion Ignition and High Yield Campaign are $15.4 billion, which is an increase of $5.0 billion (48 percent) over the prior year’s materials. According to NNSA officials, approximately 86 percent of the $5.0 billion increase is due to a budgetary structure change. Specifically, the 2014 budget materials split estimates for operating the National Ignition Facility (NIF) at Lawrence Livermore National Laboratory by including a portion within the campaign and another portion within the laboratory’s site operations account (infrastructure area). NNSA officials told us that, in accordance with congressional direction received during the 2014 appropriations process, the 2015 budget materials contain estimates for NIF operations solely in the Inertial Confinement Fusion Ignition and High Yield Campaign, increasing the campaign’s 2015 budget estimates by $4.3 billion over the prior year’s estimates. While this budgetary structure change increased budget estimates for the ST&E area and decreased estimates for the infrastructure area, NNSA officials said there was no net increase to the total budget estimates for modernization.

The Science Campaign’s 2015 budget materials estimate that, over the next 25 years, $16.1 billion will be needed, which is an increase of $3.0 billion (23 percent) over the prior year’s budget materials. Approximately 83 percent of this increase is dedicated to funding increased plutonium experimentation to support future LEPs, according to our analysis of NNSA’s budget materials.

The Advanced Simulation and Computing Campaign’s 2015 budget materials estimate that over the next 25 years $21.0 billion will be needed, which is an increase of $2.0 billion (11 percent) over the prior year’s budget materials. Approximately 90 percent of this increase is associated with new programmatic scope for NNSA’s exascale computing efforts, which are being coordinated with DOE’s Office of Science. According to NNSA officials, exascale computing budget estimates were not included in the 2014 budget materials, but they were included in the 2015 budget materials, based on congressional direction received during the 2014 appropriation process.

In the Other Weapons Activities Area, Budget Estimates Increased Significantly Due to Budgetary Structure Change

The 2015 budget materials estimate that, over the next 25 years, $47.0 billion will be needed in the other weapons activities area, which is an increase of $7.9 billion (20 percent) over the prior year’s budget materials. This area funds activities associated with nuclear weapon security and transportation as well as information technology, among other things. A budgetary structure change for two of the agency’s emergency response and counterterrorism programs was the primary reason for the increased budget estimates. The 2014 budget materials did not include estimates for these programs under Weapons Activities; rather the programs were budgeted under Defense Nuclear Nonproliferation, an NNSA account that is separate from that used to fund modernization activities. In the 2015 budget materials, NNSA included 25-year budget estimates of $7.9 billion for the emergency response and counterterrorism programs. The 2015 budget materials included these programs based on congressional direction received during the 2014 appropriation process. operations per second, which according to NNSA officials will greatly increase NNSA’s ability to perform advanced scientific and engineering simulations.

For NNSA’s Major Modernization Efforts, Near-Term Budget Estimates for Two of Three Life Extension Programs Align with 2015 Plans While Plans for Infrastructure Are Preliminary

NNSA considers its current major modernization efforts to include three LEPs (currently at various stages of development and not in full scale production), as well as major construction projects to replace aging, existing facilities for plutonium (the Chemistry and Metallurgy Research Replacement-Nuclear Facility or its alternative) and uranium (the Uranium Processing Facility). The 5-year budget estimates contained in the 2015 budget materials for two of the three LEPs that NNSA considers major modernization efforts align with NNSA’s 2015 plans. The 5-year budget estimate for the remaining LEP does not align with the 2015 plans; however, based on our review of whether this misalignment persisted in NNSA’s 2016 budget materials, NNSA’s 2016 budget estimates appear to be better aligned with 2016 plans. Project plans and associated budget estimates for NNSA’s plutonium and uranium construction projects are too preliminary for us to evaluate alignment, but NNSA’s 2015 budget materials for these projects are improved in comparison to the 2014 version of these materials that we previously reviewed.

Near-Term Budget Estimates for Two of Three Life Extension Programs Align with NNSA’s 2015 Plans

The 5-year budget estimates contained in the 2015 budget materials for two of the three LEPs that NNSA considers major modernization efforts align with NNSA’s 2015 plans for these two programs. NNSA’s 5-year budget estimates for the B61-12 LEP and the W88 alteration—both of which are currently in the design phase and scheduled for first production units in 2020—align with their associated plans. Specifically, we found that, for 2015-2019, NNSA plans to request approximately $672 million annually for the B61-12 and $160 million annually for the W88 alteration. In general, these annual budget estimates are consistent with the midpoints of the program’s internally estimated cost ranges, indicating that the budget estimates reflect program plans. In addition, NNSA officials said that the budget estimates for the B61-12 LEP and the W88 alteration are consistent with these programs’ established cost baselines as outlined in their Selected Acquisition Reports to the Congress. We found that, compared with the prior year’s budget materials, which did not include a high-to-low cost range for these LEPs, the 2015 budget materials did include such a range. This inclusion is a positive development in how budget estimates are presented because the range reflects the uncertainty in these estimates for executing a technically complex program and allows decision makers an opportunity to evaluate where the budget estimates included in NNSA’s materials fall within this range.

In contrast, the 5-year budget estimates contained in the 2015 budget materials for the cruise missile LEP—which is currently in the design phase and scheduled for a first production unit in the mid-2020s—are not aligned with the program’s plans. In each year of the 2015 FYNSP, budget estimates for the cruise missile LEP are below the low point of the program’s internally developed cost range, which is the minimum funding level that would be consistent with the internal cost estimate. Specifically, the 2015 budget materials contain 5-year budget estimates for the cruise missile LEP totaling approximately $480 million, which is $220 million less than the approximately $700 million that is needed to support the low point of the program’s internally estimated cost range. An additional $150 million would be needed in the 5-year budget estimates for these estimates to reflect the approximately $850 million midpoint of the internally developed cost range for the cruise missile LEP. According to NNSA officials, the shortfall against the low point and midpoints of the cost estimate in the 5-year budget estimates reflects the difference between an ideal budget environment where funding is unconstrained and the trade-offs made in an actual budget environment where constraints are imposed by competing priorities.

A 2008 DOE review to identify the underlying problems associated with the department’s contract and project management identified that failure to request full program funding can result in increased program costs and schedule delays, which are risks to the achievement of program goals.

NNSA officials said that the longer-term budget estimates in the 2015 budget materials “buy back” the shortfall in later fiscal years so that the total estimated cost of the cruise missile LEP is reflected in the budget materials. Specifically, the 2015 budget materials include cruise missile LEP budget estimates at the high end of its cost range for years 2020- 2027. The 2015 budget materials, however, do not explicitly state that the budget request for the cruise missile LEP is not consistent with the total amount needed to fund the program’s internal cost estimate for 2015- 2019 at even the low point. DOE guidelines state that the department should aim to disseminate information to the public that is transparent to its intended users and meets a basic level of quality. Aspects of quality include the usefulness of the information to the intended users and whether it is presented in an accurate, clear, complete, and unbiased manner. NNSA’s budget materials are a key source of information that is used by Congress to make appropriation decisions. Including information in future versions of budget materials that explicitly identify potential risk to the achievement of program objectives and goals—such as increased program cost and schedule delays, which may result from shortfalls in LEP budget requests compared with internal cost estimates— would improve the transparency and quality of information available to congressional decision makers. In addition, our prior work has emphasized the importance of transparency in federal agencies’ budget presentations because such information helps Congress have a clear understanding of how new funding requests relate to funding decisions for existing projects with continuing resource needs.

Unlike the budget estimates included in the 2015 budget materials, NNSA’s 2016 budget justification contains 5-year budget estimates (2016 to 2020) for the cruise missile LEP that appear to be better aligned with revised program plans. NNSA’s 2016 budget justification includes approximately $1.8 billion in budget estimates for 2016-2020, which is approximately $1.3 billion more than the 5-year budget estimates contained in the 2015 budget materials, and more closely aligned with NNSA’s updated midpoint cost estimate for the program. Further, both the internal cost estimate and the $1.8 billion in near-term budget estimates appear to support a change in the production schedule for the cruise missile LEP based on a congressional requirement in the 2015 National Defense Authorization Act that NNSA deliver the first cruise missile warhead by September 2025, a 2-year acceleration to its 2015 production schedule.

NNSA’s Plans for Its Plutonium and Uranium Construction Projects Are Too Preliminary for GAO to Assess

For NNSA’s major modernization efforts related to plutonium and uranium infrastructure, the agency has not established a firm cost, schedule, and scope baseline for either the Chemistry and Metallurgy Research Replacement-Nuclear Facility (or its alternative) or the Uranium Processing Facility, and the 2015 budget materials do not specify when these projects will establish such a baseline. This precludes us from assessing the extent to which budget estimates align with the agency’s preliminary plans. We have previously reported on NNSA’s challenges— significant cost increases, schedule delays, and scope changes—in executing these projects. conducted to provide continuing oversight of both of these projects. The 2015 budget materials do include estimates for both these projects which, as stated above, is an improvement from the prior year’s budget materials in which NNSA omitted most of the budget estimates for these projects.

See GAO, Modernizing the Nuclear Security Enterprise: New Plutonium Research Facility at Los Alamos May Not Meet All Mission Needs, GAO-12-337 (Washington, D.C.: Mar. 26, 2012), Nuclear Weapons: Factors Leading to Cost Increases with the Uranium Processing Facility, GAO-13-686R (Washington, D.C.: July 12, 2013), and High-Risk Series: An Update, GAO-15-290 (Washington, D.C.: Feb 11, 2015).

NNSA’s Budget Estimates for Infrastructure Are Not Adequate to Stop the Growth of Its Deferred Maintenance Backlog, and NNSA Is Taking Steps to Improve Information to Better Prioritize Investment

NNSA’s infrastructure budget estimates included in its 2015 budget materials are not adequate to address its reported $3.6 billion deferred maintenance backlog, and the deferred maintenance backlog will continue to grow. One reason the backlog will continue to grow is that the amounts in 2015 budget estimates to address the problem fall below DOE infrastructure investment benchmarks for maintenance or recapitalization. NNSA has calculated that it has $3.6 billion in deferred maintenance in its backlog; however, NNSA has identified needed improvements to information about the backlog that would help prioritize investment. Specifically, the amount of the backlog that actually needs to be addressed is unclear because approximately 40 percent of the backlog is related to facilities that have little to no effect on programmatic operations, and improvements in NNSA’s data would enhance the agency’s ability to identify mission priorities to drive investment needs. NNSA is currently undertaking a broad effort to improve its enterprise-wide data on facilities and infrastructure.

NNSA’s Budget Estimates for Maintaining and Recapitalizing Its Aging Nuclear Infrastructure Fall Below DOE’s Planning Benchmarks

the National Nuclear Security Administration as a manufacturing facility for nuclear weapons components. The use of corrosive substances in building 9204-2, which produces lithium for the nuclear weapons stockpile, has caused significant concrete and metal degradation in several areas. In March 2014, a large section of concrete ceiling fell. Large chunks of concrete rebounded into a frequently used walkway and an adjacent welding station. No personnel were struck by the concrete, but workers had used the welding station earlier that day. The sites’ management and operations contractor reported the incident a “near miss.” The photos below depict the ceiling and the floor after the incident. maintenance budget estimates should be at least 2 percent of a site’s replacement plant value in order to keep facilities in good working order. We determined, based on NNSA’s reporting of real property value, that the average, annual replacement plant value for the eight sites within the nuclear security enterprise and other related infrastructure over the 5-year FYNSP is about $50 billion, which means that maintenance budget estimates should be approximately $1 billion a year.contained in the 2015 budget materials are on average approximately $772 million a year over the next 5 years, which is an average annual shortfall of $224 million compared with the DOE maintenance benchmark. These annual shortfalls amount to a $1.1 billion shortfall over the next 5 years. According to NNSA’s Associate Administrator for Infrastructure and Operations, NNSA is changing its investment strategy to stop the decline of NNSA infrastructure and to improve safety, working conditions, sustainability, and productivity. This strategy will (1) invest more in infrastructure modernization including recapitalization, sustainability, and disposition and (2) consider reasonable increases to risk in operations and annual maintenance by minimizing resources dedicated to annual maintenance. Further, the 2015 budget materials state that the agency plans to decrease annual maintenance work scope by 10 percent at all sites across the nuclear security enterprise, but the materials do not describe what, if any, impact this decision will have on the deferred maintenance backlog or the goal of stopping its growth.

However, the maintenance budget estimates

According to DOE’s benchmark for recapitalization, recapitalization budget estimates should be 1 percent of a site’s replacement value to keep existing facilities modern and relevant in an environment of changing standards and missions. Again, based on NNSA’s reporting of real property value, we determined that the average, annual replacement plant value for the eight sites within the nuclear security enterprise and other related infrastructure over the 5-year FYNSP is about $50 billion, which means that recapitalization budget estimates should be approximately $500 million a year. However, the annual recapitalization budget estimates contained in the 2015 budget materials are approximately $360 million a year over the next 5 years, which is an average annual shortfall of $140 million as compared with the DOE recapitalization benchmark. These annual shortfalls amount to a $700 million shortfall over the next 5 years. Even though the recapitalization budget estimates do not meet the DOE benchmark, NNSA officials told us that this funding level is (1) an increase from prior years and (2) the increase is responsive to direction from NNSA’s Associate Administrator for Infrastructure and Operations to maximize resources that can be dedicated to recapitalization. According to agency officials, NNSA’s infrastructure investment decisions are based on a risk reduction methodology to which the amount of deferred maintenance is a key input. However, deferred maintenance is not the only input the agency considers when planning investment decisions. Other considerations include safety risk reduction, increased program capabilities, and opportunities to improve energy efficiency.

NNSA’s 2016 budget justification (covering the 2016-2020 FYNSP) restates the agency’s commitment to increase investment to stop the growth of deferred maintenance through maintenance and recapitalization. NNSA has proposed a restructuring of its infrastructure budget in its 2016 congressional budget justification.

Water Diverter at the Los Alamos National Laboratory Radiochemistry Lab The Radiochemistry Facility at Los Alamos National Laboratory conducts radiological and chemical analyses of samples and produces medical isotopes. This photo depicts a water intrusion incident that interrupted research activities at the lab. No one was injured but the lab could not be used for a few days and work was relocated to another part of the building. A water diverter was used to immediately prevent further damage to the lab. The roof has since been repaired and the lab is back to full operation.

We found that the 5-year $1.1 billion shortfall in maintenance budget estimates and the $700 million shortfall in recapitalization budget estimates as compared with DOE infrastructure investment benchmarks are not explicitly identified in NNSA’s 2015 budget materials. Further, the budget materials do not identify the potential effects this shortfall may have on the agency’s stated goal of stopping the growth of its deferred maintenance backlog. As stated earlier, DOE guidelines state that the department should aim to disseminate information to the public that is useful to the intended users and presented in an accurate, clear, complete, and unbiased manner. NNSA’s budget materials are a key source of information for Congress as it makes appropriation decisions. In addition, our prior work has emphasized the importance of transparency in federal agencies’ budget presentations because such information helps Congress have a clear understanding of how new funding requests relate to funding decisions for existing projects with continuing resource need. Historical underfunding of maintenance and recapitalization, among other things, has led to the current level of deferred maintenance across the nuclear security enterprise. According to a 2014 NNSA infrastructure planning document, there are numerous examples within the nuclear security enterprise where deteriorated infrastructure conditions have affected mission performance. Therefore, it is important to identify the risks, if any, associated with levels of maintenance and recapitalization investment that fall below DOE benchmarks. Providing such information would present Congress with key information it needs to make infrastructure resource allocation decisions during the appropriations process.

NNSA Has Identified Needed Improvements to Information to Better Prioritize Infrastructure Investment

NNSA has identified opportunities to improve information about its reported $3.6 billion backlog that the agency needs in order to better prioritize infrastructure investment. While NNSA’s reported $3.6 billion total deferred maintenance backlog in the 2015 budget materials meets the accounting requirements for real property reporting, the figure is not useful for budget estimating because (1) approximately 40 percent of the backlog is related to facilities that have little or no effect on programmatic operations and is therefore low priority to be addressed and (2) strengthening NNSA’s data would improve the agency’s ability to fully prioritize investment needs. The agency has ongoing efforts to improve its infrastructure data.

According to NNSA data, facilities considered not mission dependent comprise 40 percent ($1.4 billion) of the deferred maintenance backlog. As stated earlier, these facilities that are not mission dependent—such as cafeterias, parking structures, and excess facilities—do not link directly to programmatic goals but only support secondary missions or quality-of- workplace initiatives. NNSA officials told us that deferred maintenance at these facilities is low priority and unlikely to be addressed, beyond keeping facilities in a safe condition, because the agency is targeting scarce budgetary resources to mission critical facilities. As mentioned above, DOE guidelines and our prior work have emphasized the importance of transparency in federal agencies’ budget presentations to help Congress have a clear understanding of how new funding requests relate to funding decisions for existing projects with continuing resource needs. Reporting the $3.6 billion deferred maintenance backlog without explaining that over one-third of it has little or no effect on the programmatic mission and is of low priority limits the transparency and usefulness of the budget materials for the purpose of planning for infrastructure investment. Clarifying the budget materials in this manner would provide Congress with key information during the appropriation process.

We also found that improvements in NNSA’s data would enhance the agency’s ability to identify mission priorities to drive investment needs. Specifically,

According to NNSA officials, the categories of mission-based designations—defined by the Federal Real Property Council—that are assigned to NNSA facilities and infrastructure do not always accurately reflect the importance of facilities and infrastructure to mission achievement and, therefore, are not fully useful for prioritizing infrastructure investment. Among other things, NNSA’s current process for prioritizing infrastructure budget estimates focuses on those facilities and infrastructure identified as mission critical, but this designation may not accurately target infrastructure investment requirements because it understates the importance of some key facilities and other infrastructure to its mission. For example, agency officials said that current plutonium research and production facilities at Los Alamos National Laboratory are designated as mission critical, but the facility that treats the associated radioactive and hazardous waste is designated mission dependent, not critical. According to NNSA officials, if the waste treatment facility experienced an unexpected shutdown, the research and production facilities could slow down or stop operations since the waste could not be treated. However, the designation assigned to the waste facility does not elevate it to the highest priority for infrastructure investment. Elevating the importance of all mission dependent, not critical, facilities does not provide an optimal solution because doing so could similarly overstate the importance of some facilities and infrastructure that are less essential to mission achievement. NNSA officials with whom we spoke agreed that improved data on the importance of facilities and infrastructure to mission achievement, beyond the designations defined by the Federal Real Property Council, could help NNSA better identify needed infrastructure investment and improve the planning basis for its budget estimates. To improve this information, NNSA is planning to implement a “mission dependency index” that will measure a facility’s importance based on (1) the direct loss of capability and (2) how that loss effects other assets. According to agency officials, this new index may result in increased investment for supporting and enabling infrastructure (e.g., waste processing facilities, power lines, HVAC systems, etc.) that is currently considered mission dependent, not critical. According to NNSA plans, this ongoing effort is currently being used to inform program execution and is scheduled to be completed by the time the agency develops its 2017 budget materials.

NNSA is improving data about the condition of its facilities and infrastructure at a level of detail to inform investment prioritization decisions. NNSA currently reports on conditions at the facility level and is in the process of implementing a method to report the condition of a facility’s subsystems, according to agency officials we interviewed. These officials told us that a facility’s overall condition can be assessed as good even if the facility has a failing subsystem that is essential to its operation. A failure of a critical subsystem could stop programmatic activities at the entire facility. For example, a leak in the fire suppression system shut down operations at the Device Assembly Facility, a mission critical facility at the Nevada National Security Site, for 10 days. Further, according to officials, a subsystem within a facility could be in better condition than the rating of the entire facility might otherwise indicate making prioritization within such facilities challenging. NNSA officials with whom we spoke agreed that improved data about the condition of subsystems could help NNSA better identify needed investment and improve the basis for its budget estimates. To improve this information, NNSA is adopting a standardized condition assessment process and infrastructure database used by the Department of Defense. According to officials, NNSA plans to implement a revised facility inspection program that (1) conducts more detailed and more frequent inspections of its key facilities—those that are mission critical, and mission dependent (not critical)—and those facilities’ key subsystems and (2) uses statistical modeling that is based on, among other things, material used and component age to predict the optimal time to conduct maintenance or recapitalization activities on these subsystems. According to NNSA plans, this ongoing effort is currently being used to inform program execution and is scheduled to be completed by the time the agency develops its 2017 budget materials.

Conclusions

NNSA faces a complex, decades-long task in planning, budgeting, and ensuring the execution of interconnected activities to modernize the nuclear security enterprise. Because NNSA annually submits a budget justification and updates its SSMP, the agency has an opportunity each year to improve its nuclear security budget materials so that they are more useful for congressional decision makers. DOE guidelines on data quality state that information should be useful to the intended users and presented in an accurate and complete manner, and our prior work has emphasized the importance of transparency in federal agencies’ budget presentations. NNSA’s 2015 budget materials continue to demonstrate weaknesses, particularly with respect to (1) internal cost estimates for LEPs that are not fully supported by near-term budget estimates, which could affect the programs’ cost and schedule, and (2) near-term budget estimates for maintenance and recapitalization that do not achieve DOE benchmarks for infrastructure investment, which could impair NNSA’s ability to meet its goal of stopping the growth in its reported $3.6 billion deferred maintenance backlog. Providing information in the budget materials on the potential risks to the achievement of program objectives when near-term budget estimates are not aligned with plans would improve the transparency of budget materials and benefit Congress during appropriation deliberations.

With particular regard to the total deferred maintenance backlog reported by NNSA, it is not useful for budget estimating because it includes deferred maintenance that is unlikely to be addressed. DOE guidelines and our prior work have emphasized the importance of transparency in the information federal agencies provide, such as in their budget presentations. Such information helps Congress have a clear understanding of how new funding requests relate to funding decisions for existing projects with continuing resource needs. By not explicitly identifying that some deferred maintenance is unlikely to be addressed, the agency cannot fully target infrastructure investment across the nuclear security enterprise or clarify programmatic scope to Congress. NNSA has ongoing efforts to improve its data on the relationship between facilities and infrastructure and the missions they support, as well as the level of detail it has on facility condition.

Recommendations for Executive Action

To improve transparency in future NNSA budget materials so that they are more useful for congressional decision makers, we recommend that the Administrator of NNSA take the following three actions: In instances where NNSA’s internal cost estimates for a life extension program suggest that additional funding may be needed beyond what is included in the 5-year budget estimates to align with the program’s plan, identify the amount of the shortfall in its budget materials and, what, if any, effect the shortfall may have on the program’s cost and schedule or the risk of achieving program objectives.

In instances where budget estimates do not achieve DOE benchmarks for maintenance and recapitalization investment over the 5-year budget estimates, identify in the budget materials the amount of the shortfall and the effects, if any, on the deferred maintenance backlog.

Until improved data about the importance of facilities and infrastructure to mission is available, clarify in the budget materials for the 5-year FYNSP period the amount of the deferred maintenance backlog associated with facilities that has little to no effect on programmatic operations and is therefore low priority to be addressed.

Agency Comments and Our Evaluation

We provided a draft of this report to DOE and NNSA for their review and comment. NNSA provided written comments, which are reproduced in full in appendix III, as well as technical comments, which we incorporated in our report as appropriate. In its comments, NNSA agreed with our recommendations and outlined planned actions to incorporate these recommendations into the agency’s fiscal year 2017 budget materials, which is the next opportunity for such incorporation.

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

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

Appendix I: Objectives, Scope, and Methodology

Our objectives were to (1) identify the extent to which the National Nuclear Security Administration’s (NNSA) budget estimates for modernizing the nuclear security enterprise changed between the 2015 budget materials and the prior year’s material, (2) assess the extent to which NNSA’s budget estimates for its current major modernization efforts align with plans, and (3) assess the extent to which NNSA’s 2015 budget estimates for modernizing the nuclear security enterprise address its stated goal of stopping the growth of the deferred maintenance backlog. All years in this report refer to fiscal years, unless otherwise noted.

To identify the changes to NNSA’s budget estimates, we compared the estimates in the 2014 budget materials with the estimates in the 2015 version of those materials. NNSA’s budget materials are composed of two key policy documents that are issued annually: the agency’s budget justification, which contains estimates for the 5-year Future-Years Nuclear Security Program (FYNSP), and the Stockpile Stewardship and Management Plan (SSMP), which provides budget estimates over the next 25 years. We compared the budget estimates down to the subprogram and line item construction project level. If we identified changes between the 2015 and 2014 budget materials, we reviewed both versions of the materials and interviewed knowledgeable officials from NNSA to determine the reasons for those changes. We reviewed prior GAO reports on modernization and specific programs or projects included in the plans to provide context for NNSA’s plans and changes in the plans. A list of related GAO products is included at the end of this report. We also reviewed the GAO Cost Estimating and Assessment Guide, which highlights best practices for developing, managing, and evaluating cost estimates for capital programs.

To assesses the extent to which the total 2015 budget estimates align with plans for major modernization efforts—which the agency defines as nuclear weapon life extension programs (LEP) and projects for plutonium and uranium infrastructure—we compared the budget estimates included in NNSA’s 2015 budget materials with its long-range plans included in the SSMP. In addition to new issues that we identified as part of our review of the 2015 budget materials, we also followed up on the findings identified in our December 2013 report, such as the extent to which NNSA’s 2015 budget materials include estimates for plutonium and uranium infrastructure projects that were omitted in the prior year’s materials.Additionally, we reviewed prior GAO reports to provide context for the concerns we identified and discussed areas where budget estimates did not appear to align with its modernization plans with knowledgeable officials from NNSA. If we identified areas in the 2015 budget materials where estimates did not appear to align with modernization plans, we reviewed the 2016 FYNSP included in NNSA’s 2016 budget justification to determine the extent to which this misalignment persisted.

To determine the extent to which NNSA’s budget estimates for modernizing the nuclear security enterprise address its stated goal of stopping the growth of the deferred maintenance backlog, we compared budget estimates contained in the 2015 budget materials over the 5 years of the FYNSP for (1) maintenance and (2) recapitalization to infrastructure investment benchmarks contained in the Department of Energy’s (DOE) 2005 Real Property Asset Management Plan. DOE’s 2005 plan states that budget estimates for maintenance should be at least 2 percent of the replacement plant value, which is the cost to replace the existing structure with a new structure of comparable size using current technology, codes, standards, and materials. NNSA’s 2015 budget materials include the total replacement plant value for all eight sites in the nuclear security enterprise. DOE’s 2005 plan states that budget estimates should be dedicated toward recapitalization activities, but the plan did not provide a specific benchmark. The plan’s associated 2015 budget guidance (issued in March 2013) states that DOE programs, including NNSA, should institute a “recapitalization strategy” that is equal to 1 percent of replacement plant value if the program’s overall facility condition fell According to NNSA data, its overall facility below a certain threshold.condition was below the established threshold. These “recapitalization strategy” budget estimates were to be added to the agency’s maintenance budget account because NNSA at that time did not have a separate recapitalization budget account. NNSA made its first targeted request for recapitalization in the 2015 budget materials. We compared the budget estimates contained in the specific recapitalization control to the investment benchmark of 1 percent of replacement plant value. NNSA officials confirmed that this approach was reasonable. We then calculated the amount of budget estimates for maintenance (2 percent of replacement plant value) and recapitalization (1 percent of replacement plant value) that would be equal to DOE’s own infrastructure investment benchmarks. We then compared these benchmarks with annual budget estimates in NNSA’s 2015 budget justification for maintenance and recapitalization over each year of the FYNSP to determine if the total budget estimates met, exceeded, or fell short of the benchmarks. We discussed with knowledgeable officials from NNSA areas where these budget estimates did not appear to align with the stated policy goal.

We also reviewed NNSA’s Infrastructure Data Analysis Center system to identify the estimated value of NNSA’s real property and the total amount of deferred maintenance across the nuclear security enterprise. We did not assess the reliability of these estimates because they were mostly used to determine whether NNSA was meeting its own stated goal of reducing deferred maintenance and dedicating benchmarked proportions We also of replacement plant value to maintenance and recapitalization.reviewed documentation and received briefings from NNSA officials on the agency’s ongoing efforts to improve its infrastructure data and resource prioritization.

To assess the reliability of NNSA’s budget estimates and DOE’s real property management system, we conducted manual and electronic tests of the data, looking for missing values, outliers, or other anomalies. Additionally, we interviewed knowledgeable NNSA officials about the data and their methodologies for using the data to construct their estimates, including discussing missing data that we identified in our tests of the data. During our review, we found that NNSA had omitted 20 years of budget data for site operations at the Y-12 National Security Complex in Tennessee after 2019. We brought this to the attention of agency officials who confirmed the omission and provided GAO with corrected budget estimates. We determined that the corrected Y-12 data and the data underlying the budget estimates were sufficiently reliable for our purposes, which was to report the total amount of budget estimates and those estimates dedicated to certain programs and projects. We also found that the limited amount of data we used from DOE’s real property information management system were also sufficiently reliable for our purposes, which was to report the total amount of deferred maintenance and replacement plant value in the nuclear security enterprise, as well as the amount of deferred maintenance and replacement plant value associated with specific facility designations (i.e., not mission dependent). However, we did not assess the reliability of NNSA’s underlying budget estimating processes or independently verify the reliability of specific budget estimates because such analysis exceeds the scope of our mandate.

We limited the scope of our review to NNSA’s Weapons Activities appropriation. NNSA does not have a definition of “modernization,” but NNSA officials consider all of the programs in the Weapons Activities appropriation to directly or indirectly support modernization. This scope is Additionally, we focused our consistent with our December 2013 review.review on those programs or projects with the potential to have a significant impact on NNSA’s modernization plans or budgets. All data are presented in current dollars, which include projected inflation, unless otherwise noted. NNSA’s budget estimates do not incorporate reductions for sequestration. As stated in NNSA’s 2014 SSMP, incorporating such reductions would lead to adjustments to future plans.

We conducted this performance audit from July 2014 to August 2015 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Comparison of Budget Estimates and Schedules for Planned Key Modernization Activities in the 2010 Nuclear Posture Review and Subsequent Budget Materials

All years in this report refer to fiscal years, unless otherwise noted. The 2014 SSMP stated that NNSA did not submit the 2013 SSMP to Congress because analytic work conducted by DOD and NNSA to evaluate future needs for nuclear modernization activities across the nuclear security enterprise was ongoing and, as such, predecisional.

President’s policy priorities. The FYNSP is generally consistent with the first 5 years of NNSA’s plan presented in its SSMP. In addition, the report that the Department of Energy (DOE) jointly submits with the Department of Defense (DOD) in accordance with section 1043 of the National Defense Authorization Act for Fiscal Year 2012 as amended is required to provide 10-year budget estimates and plans to enhance the reliability of the nuclear weapons stockpile and modernize infrastructure. Similarly, the FYNSP is generally consistent with the first 5 years of NNSA’s plan presented in this joint report.

The 2010 Nuclear Posture Review included discussion of a number of planned major modernization efforts for NNSA, while other efforts have been identified in later versions of the planning documents discussed above. In particular, the Nuclear Posture Review identified three planned LEPs, one for the W76—a warhead delivered by submarine launched ballistic missile—another for the B61—a gravity bomb delivered by aircraft—and also discussed the potential for a common warhead developed through refurbishment and for use on both Navy and Air Force delivery vehicles. NNSA’s planning documents for 2015 continue to include LEPs for the W76 and B61 and the 2015 SSMP further developed the concept of a common warhead, now termed an “interoperable” warhead (IW), including long-range plans for three IWs. In addition, NNSA’s 2015 planning documents include an LEP for the Air Force’s cruise missile warhead and a major alteration (ALT) of the Navy’s W88 warhead, also delivered on a submarine launched ballistic missile, neither of which was discussed in the Nuclear Posture Review. The Nuclear Posture Review also discussed major line item construction projects to replace aging facilities for NNSA’s plutonium and uranium processing missions. The project for plutonium processing is known as the Chemistry and Metallurgy Research Replacement-Nuclear Facility (CMRR-NF), and the project for uranium processing is known as the Uranium Processing Facility (UPF). Both projects are being reconceptualized as a result of project execution challenges and increasingly escalating cost estimates. Table 4 summarizes changes to the schedules for these major modernization efforts as reported in NNSA’s annual updates to its planning documents.

Figure 4 presents budget information from fiscal year 2011 through fiscal year 2019, comparing planned budget estimates for modernization presented in the Fiscal Year 2011 Joint NNSA and Department of Defense Report (baseline) to estimates in budget materials for subsequent years.

NNSA’s total budget estimates for modernization generally address four areas: (1) stockpile; (2) infrastructure; (3) science, technology, and engineering (ST&E) capabilities; and (4) other weapons activities.

NNSA’s stockpile area represents the largest portion of NNSA’s overall budget estimates for modernization (about 35 percent of the total budget estimates in 2015) and includes LEPs. Figure 5 presents budget information from fiscal year 2011 through fiscal year 2019, comparing planned budget estimates for the stockpile area presented in the Fiscal Year 2011 Joint NNSA and Department of Defense Report (baseline) to estimates in budget materials for subsequent years.

NNSA’s infrastructure area represents the second largest portion of NNSA’s overall modernization plans (about 29 percent of the total budget estimates in 2015) and includes construction of new facilities as well as operations and maintenance of existing facilities and infrastructure. Figure 6 presents budget information from fiscal year 2011 through fiscal year 2019, comparing planned budget estimates for the infrastructure area presented in the Fiscal Year 2011 Joint NNSA and Department of Defense Report (baseline) to estimates in budget materials for subsequent years.

NNSA’s ST&E capabilities area represents the third largest portion of NNSA’s overall modernization plans (about 20 percent of the total budget estimates in 2015) and includes technically challenging, multiyear, multifunctional efforts to develop and maintain critical science and engineering capabilities in support of the stockpile. Figure 7 presents budget information from fiscal year 2011 through fiscal year 2019, comparing planned budget estimates for the ST&E area presented in the Fiscal Year 2011 Joint NNSA and Department of Defense Report (baseline) to estimates in budget materials for subsequent years.

NNSA’s other weapons activities represent the smallest portion of NNSA’s overall modernization plans (about 16 percent of the total budget estimates in 2015) and includes nuclear weapon security and transportation as well as legacy contractor pensions, among other things. Figure 8 presents budget information from fiscal year 2011 through fiscal year 2019, comparing planned budget estimates for other weapons activities presented in the Fiscal Year 2011 Joint NNSA and Department of Defense Report (baseline) to estimates in budget materials for subsequent years.

Appendix III: Comments from the National Nuclear Security Administration

Appendix IV: GAO Contact and Staff Acknowledgments

GAO Contact

David C. Trimble, (202) 512-3841 or trimbled@gao.gov.

Staff Acknowledgments

In addition to the individual named above, Allison B. Bawden (Assistant Director), Patrick Bernard, Pamela Davidson, Tom Fullum, and Jason Trentacoste made key contributions to this report.

Related GAO Products

Nuclear Weapons: Actions Needed by NNSA to Clarify Dismantlement Performance Goal. GAO-14-449. Washington, D.C.: April 30, 2014.

ICBM Modernization: Approaches to Basing Options and Interoperable Warhead Designs Need Better Planning and Synchronization. GAO-13-831. Washington, D.C.: September 20, 2013.

Modernizing the Nuclear Security Enterprise: Observations on NNSA’s Options for Meeting Its Plutonium Research Needs. GAO-13-533. Washington, D.C.: September 11, 2013.

Nuclear Weapons: NNSA Needs to Improve Guidance on Weapon Limitations and Planning for Its Stockpile Surveillance Program. GAO-12-188. Washington, D.C.: February 8, 2012.

Nuclear Weapons: DOD and NNSA Need to Better Manage Scope of Future Refurbishments and Risks to Maintaining U.S. Commitments to NATO. GAO-11-387. Washington, D.C.: May 2, 2011.

Nuclear Weapons: NNSA and DOD Need to More Effectively Manage the Stockpile Life Extension Program. GAO-09-385. Washington, D.C.: March 2, 2009.

Nuclear Weapon:, Annual Assessment of the Safety, Performance, and Reliability of the Nation’s Stockpile. GAO-07-243R. Washington, D.C.: February 2, 2007.

Nuclear Weapons: Improved Management Needed to Implement Stockpile Stewardship Program Effectively. GAO-01-48. Washington, D.C.: December 14, 2000.

DOE Facilities: Better Prioritization and Life Cycle Cost Analysis Would Improve Disposition Planning. GAO-15-272. Washington, D.C.: March 19, 2015.

DOE Real Property: Better Data and a More Proactive Approach Needed to Facilitate Property Disposal. GAO-15-305. Washington, D.C.: February 25, 2015.

Nuclear Waste: DOE Needs to Improve Cost Estimates for Transuranic Waste Projects at Los Alamos. GAO-15-182. Washington, D.C.: February 18, 2015.

Nuclear Weapons: Technology Development Efforts for the Uranium Processing Facility. GAO-14-295. Washington, D.C: April 18, 2014.

Federal Real Property: Improved Transparency Could Help Efforts to Manage Agencies’ Maintenance and Repair Backlogs. GAO-14-188. Washington, D.C.: January 23, 2014.

Nuclear Weapons: Factors Leading to Cost Increases with the Uranium Processing Facility. GAO-13-686R. Washington, D.C.: July 12, 2013.

Department of Energy: Observations on Project and Program Cost Estimating in NNSA and the Office of Environmental Management. GAO-13-510T. Washington, D.C.: May 8, 2013.

Department of Energy: Concerns with Major Construction Projects at the Office of Environmental Management and NNSA. GAO-13-484T. Washington, D.C.: March 20, 2013.

Modernizing the Nuclear Security Enterprise: Observations on DOE’s and NNSA’s Efforts to Enhance Oversight of Security, Safety, and Project and Contract Management. GAO-13-482T. Washington, D.C.: March 13, 2013.

Modernizing the Nuclear Security Enterprise: Observations on the National Nuclear Security Administration’s Oversight of Safety, Security, and Project Management. GAO-12-912T. Washington, D.C.: September 12, 2012.

Modernizing the Nuclear Security Enterprise: New Plutonium Research Facility at Los Alamos May Not Meet All Mission Needs. GAO-12-337. Washington, D.C.: March 26, 2012.

Nuclear Weapons: NNSA Needs More Comprehensive Infrastructure and Workforce Data to Improve Enterprise Decision-making. GAO-11-188. Washington, D.C.: February 14, 2011.

Nuclear Weapons: National Nuclear Security Administration’s Plans for Its Uranium Processing Facility Should Better Reflect Funding Estimates and Technology Readiness. GAO-11-103. Washington, D.C.: November 19, 2010.

Nuclear Weapons: Actions Needed to Identify Total Costs of Weapons Complex Infrastructure and Research and Production Capabilities. GAO-10-582. Washington, D.C.: June 21, 2010.

Science, Technology, and Engineering Capabilities Nuclear Weapons: National Nuclear Security Administration Needs to Ensure Continued Availability of Tritium for the Weapons Stockpile. GAO-11-100. Washington, D.C.: October 7, 2010.

Nuclear Weapons: Actions Needed to Address Scientific and Technical Challenges and Management Weaknesses at the National Ignition Facility. GAO-10-488. Washington, D.C.: April 8, 2010.

Modernizing the Nuclear Security Enterprise: Strategies and Challenges in Sustaining Critical Skills in Federal and Contractor Workforces. GAO-12-468. Washington, D.C.: April 26, 2012.

Department of Energy: Progress Made Overseeing the Costs of Contractor Postretirement Benefits, but Additional Actions Could Help Address Challenges. GAO-11-378. Washington, D.C.: April 29, 2011.

Nuclear Weapons: NNSA Needs More Comprehensive Infrastructure and Workforce Data to Improve Enterprise Decision-making. GAO-11-188. Washington, D.C.: February 14, 2011.

High-Risk Series: An Update. GAO-15-290. Washington, D.C.: February 11, 2015.

DOE and NNSA Project Management: Analysis of Alternatives Could Be Improved by Incorporating Best Practices. GAO-15-37. Washington, D.C.: December 11, 2014.

Project and Program Management: DOE Needs to Revise Requirements and Guidance for Cost Estimating and Related Reviews. GAO-15-29. Washington, D.C.: November 25, 2014.

Nuclear Weapons: Ten-Year Budget Estimates for Modernization Omit Key Efforts, and Assumptions and Limitations Are Not Fully Transparent. GAO-14-373. Washington, D.C.: June 10, 2014.

National Nuclear Security Administration: Agency Report to Congress on Potential Efficiencies Does Not Include Key Information. GAO-14-434. Washington, D.C.: May 15, 2014.

Modernizing the Nuclear Security Enterprise: NNSA’s Budget Estimates Do Not Fully Align with Plans. GAO-14-45. Washington, D.C.: December 11, 2013.

Modernizing the Nuclear Security Enterprise: NNSA’s Reviews of Budget Estimates and Decisions on Resource Trade-offs Need Strengthening. GAO-12-806. Washington, D.C.: July 31, 2012.

National Nuclear Security Administration: Observations on NNSA’s Management and Oversight of the Nuclear Security Enterprise. GAO-12-473T. Washington, D.C.: February 16, 2012.

Department of Energy: Additional Opportunities Exist to Streamline Support Functions at NNSA and Office of Science Sites. GAO-12-255. Washington, D.C.: January 31, 2012.