NNSA manages a complex, decades-long effort to modernize the nuclear security enterprise. In its recent report, the Augustine-Mies Panel observed that NNSA’s SSMP, which is intended to communicate long- range plans and cost estimates, has varied from year to year in the costs and schedules for the delivery of several major life extension programs (LEP) and nuclear facilities, and the Panel concluded that the lack of a stable, executable plan for modernization is a fundamental weakness for NNSA. Our 2013 report similarly found that NNSA’s SSMP has shown changes in plans and long-term budget estimates from year to year and that some assumptions on future spending estimates may not be realistic. For example, in 2013 we found that: The planned schedules for key weapons LEPs had changed. For example, key dates for the W78/88 LEP were pushed several years into the future. Specifically, this program shifted from a 2021 first- production-unit and 2031 completion time frame in the fiscal year 2012 SSMP to a 2025 first-production-unit and 2036 completion time frame in the fiscal year 2014 SSMP. We have ongoing work looking at the fiscal year 2015 SSMP. NNSA’s long-term budget estimates for the nuclear security enterprise For example, we found have continued to change from year to year. that NNSA’s stockpile budget estimates from 2014 through 2031 increased by about $27 billion compared with the 2012 stockpile budget estimates for the same time period. We noted that some of these changes were due to decisions made by the Nuclear Weapons Council. For example, according to the 2014 SSMP, the Nuclear Weapons Council directed changes to the planned schedules for some of the LEPs to accommodate the number and scope of all LEPs, which contributed to increases in the stockpile budget estimates. NNSA had not included estimated costs to construct both the Uranium Processing Facility (UPF) and the Chemistry Metallurgy Replacement Facility (CMRR). We recommended that NNSA include in its estimates at least a range of budget estimates for known future expenses for large capital projects even when a fully developed cost estimate had not been developed. NNSA agreed with this recommendation and the 2015 SSMP included estimates for these major large capital projects, which had previously been excluded. In addition, in the 2014 SSMP, NNSA also changed its methodology for developing budget estimates for LEPs. For example, NNSA officials said that the 2012 budget estimates for LEPs were based on an older LEP because there was not enough data at that time from recent and ongoing LEPs to develop cost models. In contrast, NNSA officials told us that they based their 2014 estimates on more reliable data from an ongoing LEP. Our 2013 report also found that some assumptions in the SSMP may be unrealistic. NNSA’s budget estimates to operate and maintain its existing facilities and infrastructure remain relatively flat through 2031 at about $1.5 billion per year (in constant dollars). However, much of NNSA’s existing facilities and infrastructure were constructed more than 50 years ago and are reaching the end of their useful lives. As a result, the agency is undertaking a number of improvement projects to modernize and maintain these facilities. We concluded that it may not be realistic for NNSA to assume that its annual budget estimates for operations and maintenance of facilities from 2014 to 2031 can remain relatively flat when its aging facilities will likely need additional resources to maintain them in the future. In our February 2015 update to our high risk list, we expressed concern that DOE, including NNSA, may not have adequately identified the root causes of its contract and project management challenges. Our update also found that NNSA appeared resistant to implementing some of the recommendations we made in 2014 to correct these problems. DOE has undertaken numerous efforts over the years to understand and address its contract and project management challenges. Our 2015 high risk update described a sequence of actions starting in 2008, when DOE issued a root cause analysis and a corrective action plan that identified what DOE considered to be the 10 most significant issues in managing its contracts and projects, and the actions needed to mitigate these issues. These issues included problems with front-end planning, project funding, accountability, cost estimating, contract and project management workforce, and project oversight. DOE issued another report in 2011 that stated that the corrective actions it implemented from its 2008 plan had effectively mitigated most of the root causes of these issues. However, the department continued to identify additional root causes and corrective actions and recommendations to address its persistent contract and project management challenges. In 2010, DOE identified in a report six additional barriers to improving contract and project management and developed corrective actions to address these barriers.issued another report stating that it had completed or partially completed In 2012, DOE the corrective actions necessary to address these barriers. In November 2014, DOE issued another report on project management that identified four key factors that contribute to project management success or failure at DOE: front-end planning, project funding, accountability, and project oversight. The report also included 21 recommendations to address continuing project management challenges. Notably, all four of these factors are among those discussed in DOE’s 2008 root cause analyses and among those that DOE said in 2011 it had at least partially mitigated. As we noted in our February 2015 update to our high risk list,long history of identifying additional corrective actions suggests that it has not always fully understood the causes of its contract and project management problems. More importantly, DOE’s December 2014 project management report included a description of actions to address the four key factors it had identified; however it did not discuss why the previous attempts to address these issues had either failed or why these problems had reemerged. For example, the 2008 corrective action plan found front-end planning as one of the top 10 issues contributing to the department’s contract and project management problems. The corrective actions DOE identified in that report included developing a more detailed internal front- end planning process, such as identifying and defining specific assumptions for technical design and nuclear safety requirements. However, this is contrary to DOE’s 2011 report that stated that the department had fully or partially completed all corrective measures from 2008, including those related to front-end planning. In addition, the 2008 report identified a number of areas where DOE had continuing challenges, including cost estimating and an inadequate number of federal contracting and project management personnel. For cost estimating, our November 2014 report also found that DOE and NNSA cost estimating requirements and guidance for projects and programs generally did not reflect best practices for developing cost estimates. For federal personnel, our February 2015 high risk report found that DOE did not meet the criteria for having the capacity (people and resources) to resolve contract and project management problems. Our report cited a DOE workforce analysis from 2013 that concluded that DOE had an extremely low number of contract specialists. We also noted in our report that this workforce analysis did not include the other key staff members normally included in the description of the acquisition workforce, such as program and project managers and contracting officer representatives.In contrast to these findings, DOE reported, in 2011, that it would complete its efforts to improve cost estimating later that year, and that had substantially completed its efforts to enhance the federal contract and project management workforce. We have previously noted instances where DOE appeared resistant to implementing some of our recommendations to correct DOE’s project management problems. For example, our February 2014 report included an evaluation of NNSA’s mixed oxide (MOX) fuel fabrication facility, the estimated cost of which NNSA had increased by more than $6.3 billion from NNSA’s initial estimate in 1997 to about $7.7 billion in 2014.report, we recommended that DOE require a root cause analysis for projects that experience cost increases or schedule delays exceeding a certain threshold established by the department, including the MOX facility. We noted that such an analysis would help ensure that future In that DOE projects benefit from lessons learned that reflect the causes of past projects’ cost increases and schedule delays. DOE disagreed with our recommendation, stating that such an analysis should not be required, and that DOE program offices could decide on a case-by-case basis when to conduct such an analysis. However, DOE’s requirements do not define how or when a root cause analysis should be conducted and it is not clear when or what would trigger a root cause analysis, which could result in analyses not being conducted consistently or not being conducted at all, hampering DOE’s ability to apply lessons learned from past projects to ongoing or future projects. We continue to believe that a root cause analysis should be conducted for all projects that experience cost increases or schedule delays above a threshold established by the department. We also note that our recommendation is consistent with a requirement in the Weapon Systems Acquisition Reform Act of 2009, under which that the Department of Defense must perform a root cause analysis of a cost increase that exceeds a certain threshold. Similarly, in 2014, we issued two reports with recommendations addressing key elements of the front-end planning process for large projects and programs. In both reports, DOE agreed with the recommendations, but it did not indicate whether it would implement them. In November 2014, we noted that DOE had a history of struggling to complete many of its major construction projects within initial cost and schedule estimates. We found that DOE and NNSA cost estimating requirements and guidance for projects and programs generally do not reflect best practices for developing cost estimates. We also found in November 2014 that, because DOE and NNSA do not require reviews of program cost estimates, the extent of weaknesses in program cost estimates is largely unknown. DOE itself, in 2008, identified inadequate cost estimating capability as one of the top 10 most significant issues contributing to its contract and project management challenges.