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Testimony: 

Before the Subcommittee on Energy and Water Development, Committee on 
Appropriations, House of Representatives: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 10:00 a.m. EDT: 

Wednesday, April 26, 2006: 

Nuclear Weapons: 

Views on Proposals to Transform the Nuclear Weapons Complex: 

Statement of Gene Aloise, Director Natural Resources and Environment: 

GAO-06-606T: 

GAO Highlights: 

Highlights of GAO-06-606T, a testimony before the Subcommittee on 
Energy and Water Development, Committee on Appropriations, House of 
Representatives. 

Why GAO Did This Study: 

Over the past several years, a serious effort has begun to 
comprehensively reevaluate how the United States maintains its nuclear 
deterrent and what the nationís approach should be for transforming its 
aging nuclear weapons complex. The National Nuclear Security 
Administration (NNSA), a separately organized agency within the 
Department of Energy, is responsible for overseeing this weapons 
complex, which comprises three nuclear weapons design laboratories, 
four production plants, and the Nevada Test Site. 

At the direction of the Subcommittee on Energy and Water Development, 
the Secretary of Energy Advisory Boardís (SEAB) Nuclear Weapons Complex 
Infrastructure Task Force issued a report in October 2005 that provided 
a systematic review of the requirements for the weapons complex for the 
next 25 years and offered its vision for an agile and responsive 
weapons complex. GAO was asked to discuss (1) the current actions NNSA 
is taking to address the SEAB task forceís recommendations and (2) the 
critical steps that will be needed to achieve and sustain a meaningful, 
cost-effective transformation of the weapons complex. 

What GAO Found: 

The SEAB task force report contained the following five recommendations:
* Immediately begin to modernize the cold war nuclear stockpile by 
designing a Reliable Replacement Warhead (RRW).
* Create a Consolidated Nuclear Production Center (CNPC) that contains 
a modern set of production facilities in one location.
* Consolidate all weapons-grade material and weapons components at the 
CNPC.
* Aggressively dismantle the cold war stockpile.
* Create an Office of Transformation to oversee the transformation of 
the nuclear weapons complex. 

NNSA has offered a proposal for transforming the nuclear weapons 
complex that it believes is responsive to the recommendations in the 
SEAB task force report. Specifically, NNSA officials noted, they (1) 
will decide on a design competition for the RRW in November 2006, (2) 
have requested an increase of over $15 million in funding for 
dismantling legacy weapons in fiscal year 2007, and (3) have requested 
$15 million in their fiscal year 2007 budget proposal to create an 
Office of Transformation, among other things. However, NNSA does not 
support the SEAB task forceís recommendation for a CNPC and the 
accompanying recommendation of consolidating weapons-grade material at 
the CNPC, primarily because it views these recommendations as too 
costly. Instead, NNSA has proposed building a consolidated center for 
processing plutonium, removing weapons-grade material from the three 
weapons laboratories, and modernizing the remaining production 
capabilities at their existing locations. 

Regardless of the approach chosen, any attempt to change an extremely 
complex enterprise must be based on solid analysis, careful planning, 
and effective leadership. GAO has identified the following four actions 
that, in its view, are critical to successfully transforming the 
weapons complex:
* The Department of Defense will need to establish clear, long-term 
requirements for the nuclear stockpile by determining the types and 
quantities of nuclear weapons needed to provide for our nationís 
nuclear deterrent.
* After the Department of Defense determines the size and composition 
of the future stockpile, NNSA will need to develop accurate cost 
estimates of the proposals for transforming the weapons complex. 
Current estimates of the costs of transforming the weapons complex 
contain considerable uncertainty. 
* After NNSA selects a proposal based on accurate cost estimates, it 
will need to develop a clear transformation plan containing measurable 
milestones so that it can evaluate progress and the Congress can hold 
it accountable. 
* The proposed Office of Transformation must have authority to make and 
enforce its decisions on transformation and must be held accountable by 
the Congress for achieving timely and cost-effective results. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Gene Aloise at (202) 512-
3841 or aloisee@gao.gov. 

[End of Section] 

Mr. Chairman and Members of the Subcommittee: 

We are pleased to be here today to provide our observations on the 
October 2005 report, Recommendations for the Nuclear Weapons Complex of 
the Future, prepared by the Secretary of Energy Advisory Board's (SEAB) 
Nuclear Weapons Complex Infrastructure Task Force.[Footnote 1] After 
the end of the cold war, the United States, in 1992, began a unilateral 
moratorium on underground nuclear testing. Subsequently, in 1993, the 
Department of Energy (DOE), at the direction of the President and the 
Congress, established the Stockpile Stewardship Program to ensure the 
United States' core intellectual and technical competencies in nuclear 
weapons without testing.[Footnote 2] The National Nuclear Security 
Administration (NNSA), a separately organized agency within DOE, is now 
responsible for carrying out the Stockpile Stewardship Program through 
a nuclear weapons complex (weapons complex) that comprises three 
nuclear weapons design laboratories (weapons laboratories), four 
production plants, and the Nevada Test Site. With the creation of the 
Stockpile Stewardship Program, the mission of the weapons complex 
changed from "designing, building, and testing" successive generations 
of weapons to extending the life of the existing nuclear weapons 
stockpile through "scientific study, computer simulation, and 
refurbishment." 

Several events over the past few years have made it clear that it is 
time for the United States to comprehensively reevaluate how it 
maintains its nuclear deterrent and to develop and implement a strategy 
for transforming its weapons complex. For example, the 2001 Nuclear 
Posture Review found that the nuclear weapons infrastructure had 
atrophied and needed to be repaired; it also called for the development 
of a "responsive infrastructure" that would support a smaller nuclear 
deterrent. Subsequently, the 2002 Moscow Treaty between the United 
States and Russia set a goal of reducing the number of deployed U.S. 
nuclear warheads to between 1,700 and 2,200 by 2012. More recently, 
NNSA, as directed by the conference report accompanying DOE's fiscal 
year 2005 appropriations act, created the Reliable Replacement Warhead 
(RRW) program to study a new approach to maintaining nuclear warheads 
over the long term by making weapons easier to manufacture, maintain, 
dismantle, and certify without nuclear testing.[Footnote 3] 

In this context, this Subcommittee requested, and the SEAB task force 
has provided, a systematic review of the requirements for the weapons 
complex over the next 25 years. The SEAB task force report contains 
five major recommendations that, combined with numerous supporting 
recommendations, offer the task force's vision for an agile and 
responsive weapons complex. These recommendations are as follows: 

* Immediately begin to modernize the nuclear weapons stockpile by 
designing a RRW. 

* Create a Consolidated Nuclear Production Center (CNPC) that contains 
a modern set of production facilities in one location. 

* Consolidate all Category I and Category II quantities of Special 
Nuclear Material and weapon primary and secondary components at the 
CNPC. 

* Aggressively dismantle the cold war stockpile. 

* Create an Office of Transformation to oversee the transformation of 
the weapons complex. 

Our testimony discusses (1) the current actions NNSA is taking to 
address the SEAB task force's recommendations and (2) the critical 
actions needed to achieve and sustain a meaningful, cost-effective 
transformation of the weapons complex. 

To carry out our objectives, we reviewed the final SEAB task force 
report and the comments provided by various parties on the initial 
draft. We interviewed the SEAB task force members individually to 
obtain their views on the final report and NNSA's response to it. We 
met with various NNSA officials, including the Deputy Administrator for 
Defense Programs and the head of NNSA's Responsive Infrastructure 
Steering Committee, and with the Deputy Assistant to the Secretary of 
Defense (Nuclear Matters). We also reviewed the methods the SEAB task 
force used to develop cost estimates for options presented in its 
report. Finally, we reviewed a variety of documents, including the 
Nuclear Posture Review, and the recent Defense Science Board report, 
entitled Report of the Defense Science Board Task Force on Nuclear 
Capabilities.[Footnote 4] We performed our work between February 2006 
and April 2006 in accordance with generally accepted government 
auditing standards. 

In summary: 

NNSA has offered a proposal for transforming the weapons complex that 
it believes is responsive to the recommendations in the SEAB task force 
report. Specifically, NNSA officials noted, they (1) will decide on a 
design competition for the RRW in November 2006, (2) have requested an 
increase of over $15 million in funding for dismantling legacy weapons 
in fiscal year 2007, and (3) have requested $15 million in their fiscal 
year 2007 budget proposal to create an Office of Transformation and to 
begin studying ways to transform the business practices of the weapons 
complex. However, NNSA does not plan to adopt the SEAB task force's 
recommendation for a CNPC and the accompanying recommendation of 
consolidating all Category I and II quantities of Special Nuclear 
Material at the CNPC, primarily because it views these recommendations 
as too costly. Instead, NNSA has proposed building a consolidated 
center for processing plutonium, removing Category I and II Special 
Nuclear Material from the three weapons laboratories, and modernizing 
the remaining production capabilities at their existing locations. 

Regardless of the approach chosen to transform the weapons complex, any 
attempt to change such an extremely complex enterprise must be based on 
solid analysis, careful planning, and effective leadership. We have 
identified four actions that, in our view, are critical to successfully 
transforming the weapons complex. As the Congress oversees NNSA's 
future actions, it should expect to see each of these actions carefully 
and fully implemented: 

* The Department of Defense (DOD) will need to establish clear, long- 
term requirements for the stockpile. Our current stockpile comprises 
nine weapon systems, all of which were designed during the cold war. 
Several of these systems--the B61, W76, and W80--are currently having 
their useful lives extended for up to 30 years through NNSA's Stockpile 
Life Extension Program. However, these life extensions are very 
expensive, and some have already experienced cost and schedule 
slippages. NNSA is now evaluating a new warhead--the RRW--which may be 
able to take the place of some existing warheads. Before any plans for 
a new weapons complex can be made final, however, in our view, DOD will 
need to determine the systems, their capabilities, their quantities, 
and the schedule it needs to provide for our nation's nuclear 
deterrent. 

* NNSA will need to provide accurate estimates of the costs of 
transformation. Once a decision is made about the size and composition 
of the stockpile, NNSA can develop accurate estimates of the costs of 
proposals for transforming the weapons complex. As we have noted in 
numerous reports over the last several years on key projects such as 
the National Ignition Facility and the Stockpile Life Extension 
Program, NNSA has had difficulty estimating costs and schedules and 
adhering to them.[Footnote 5] Some cost estimates to transform the 
weapons complex were developed as part of the SEAB task force report 
and, according to NNSA officials, NNSA is currently using the same cost 
models for its effort. However, these estimates need considerable 
refinement. As a result, NNSA will need to develop credible, defensible 
cost estimates for transforming the weapons complex. 

* NNSA will need to develop a transformation plan with clear milestones 
for measuring progress. Developing workable plans, with realistic, 
measurable milestones has been a continuing problem for NNSA. For 
example, as we noted in our February 2006 report on NNSA's effort to 
develop and implement a new method for assessing and certifying the 
stockpile, NNSA does not have an integrated plan for carrying out this 
important activity or clear milestones for measuring progress.[Footnote 
6] Without question, transforming the weapons complex will be a much 
more daunting enterprise. However, without a clear transformation plan 
that contains measurable milestones, NNSA will have no way to evaluate 
its progress, and the Congress will have no way to hold NNSA 
accountable. 

* Change will require a strong Office of Transformation. As we noted in 
a 2003 report, one of the key practices for successfully transforming 
an organization is to ensure that top leadership sets the direction, 
pace, and tone for the transformation.[Footnote 7] Through its recent 
reorganizations, NNSA has shown that it can move from what was often 
called a "dysfunctional bureaucracy" to an organization with clearer 
lines of authority and responsibility. NNSA officials have embraced the 
SEAB task force's proposal for an Office of Transformation. However, in 
order for such an office to be effective, it must (1) report directly 
to the Administrator, NNSA; (2) have real authority to make and enforce 
its decisions; and (3) be held accountable by the Congress for 
achieving results in a cost-effective and timely manner. 

Background: 

NNSA conducts nuclear weapon and nonproliferation-related national 
security activities in research and development laboratories, 
production plants, and other facilities.[Footnote 8] Specifically, NNSA 
operates three weapons laboratories--Lawrence Livermore National 
Laboratory (LLNL), California; Los Alamos National Laboratory (LANL), 
New Mexico; and the Sandia National Laboratories, New Mexico and 
California; and four nuclear weapons production sites--the Pantex 
Plant, Texas; the Y-12 Plant, Tennessee; the Kansas City Plant, 
Missouri; and the Savannah River Site, South Carolina. NNSA also 
operates the Nevada Test Site. To implement its nuclear weapons 
programs, NNSA received about $6.4 billion for fiscal year 2006 and has 
requested more than $6.4 billion for fiscal year 2007. Between fiscal 
years 2008 and 2011, NNSA is proposing to spend almost $27 billion for 
these programs. 

Over the past decade, NNSA has invested a substantial amount of money 
in sustaining the cold war stockpile and upgrading the three weapons 
laboratories with new, state-of-the-art experimental and computing 
facilities. However, as described in studies over the past decade, the 
production infrastructure of the weapons complex is aging and 
increasingly outdated. For example, a 2000 DOE Office of Inspector 
General report concluded that the postponement of repairs to aging and 
deteriorating facilities had resulted in delays in weapons 
modification, remanufacture, and dismantlement, among other 
things.[Footnote 9] In addition, a 2001 report by the Foster Panel 
found the state of the production facilities to be troubling and 
recommended that NNSA restore missing production capabilities and 
refurbish the production infrastructure.[Footnote 10] In its fiscal 
year 2007 budget request, NNSA estimated that it will cost $2.4 billion 
to reduce the backlog of deferred maintenance at these facilities to an 
appropriate level consistent with industry best practices. 

Events over the past several years have served to intensify concern 
about how the United States maintains its nuclear deterrent and what 
the nation's strategy should be for transforming the weapons complex. 
Specifically: 

* The 2001 Nuclear Posture Review stated, among other things, that cold 
war practices related to nuclear weapons planning were obsolete, and 
few changes had been made to the size or composition of the nation's 
nuclear forces. Furthermore, there had been underinvestment in the 
weapons complex, particularly the production sites. The Nuclear Posture 
Review called for, among other things, the development of a "responsive 
infrastructure" that would be sized to meet the needs of a smaller 
nuclear deterrent while having the capability to respond to future 
strategic challenges. 

* The terrorist attacks of September 11, 2001, led DOE to increase the 
size of its Design Basis Threat, a classified document that identifies 
the size and capabilities of terrorist forces. This increase in the 
size of the Design Basis Threat has greatly increased NNSA's cost for 
protecting its weapons-grade nuclear material. 

* The 2002 Moscow Treaty between the United States and Russia set a 
goal of reducing the number of deployed U.S. nuclear warheads to 
between 1,700 and 2,200 by 2012. However, a significant number of 
existing warheads would be kept in reserve to address potential 
technical contingencies with the existing stockpile. 

* NNSA, at the Congress' direction, created the RRW program to study a 
new approach to maintaining nuclear warheads over the long term. The 
RRW program would redesign weapon components to be easier to 
manufacture, maintain, dismantle, and certify without nuclear testing, 
potentially allowing NNSA to transition to a smaller, more efficient 
weapons complex. A design competition between LANL and LLNL is 
scheduled to end in November 2006. 

* Finally, in recent congressional testimony, the Secretary of Energy 
and the Administrator of NNSA emphasized to the Congress that while 
they believe stockpile stewardship is working, the current cold war 
legacy stockpile is the wrong stockpile for the long term, and the 
current nuclear weapons infrastructure is not responsive to 
unanticipated events or emerging threats. 

Current NNSA plans call for substantial funding to operate the existing 
weapons complex. For example, according to NNSA's fiscal year 2007 
budget request, over the next 5 years, NNSA plans to spend about $7.4 
billion to operate and maintain the existing infrastructure of the 
weapons complex. In addition, NNSA plans to spend $1.8 billion on new 
construction projects. These construction projects include: 

* the Highly Enriched Uranium Materials Facility at the Y-12 Plant, 
which is estimated to cost $335 million and be completed in fiscal year 
2007;[Footnote 11] 

* the Chemistry and Metallurgy Research Replacement facility at LANL, 
which is estimated to cost $838 million and be completed in fiscal year 
2013; and: 

* the proposed Uranium Processing Facility at the Y-12 Plant, which is 
projected to cost between $600 million to $1 billion. 

During testimony before this Subcommittee in March 2004, the Secretary 
of Energy agreed to conduct a comprehensive review of the weapons 
complex. Subsequently, in January 2005, the Secretary of Energy 
requested the SEAB to form the Nuclear Weapons Complex Infrastructure 
Task Force to assess the implications of presidential decisions on the 
size and composition of the stockpile; the cost and operational impacts 
of the new Design Basis Threat; and the personnel, facilities, and 
budgetary resources required to support a smaller stockpile. The review 
was also to evaluate opportunities for consolidating Special Nuclear 
Material, facilities, and operations across the weapons complex in 
order to minimize security requirements and the environmental impacts 
of continuing operations. The SEAB task force formally transmitted the 
final report to the Secretary of Energy in October 2005. 

According to the report, the SEAB task force assessed the impact of its 
recommendations on near-term funding requirements, as well as total 
costs, for the weapons complex over the next 25 years. The report 
stated that implementing all of the recommendations will increase near- 
term costs substantially but would result in a substantial reduction in 
future operating costs after the CNPC is in full operation. The SEAB 
task force estimated that the long-term cost savings would be 
approximately twice the near-term cost increases. 

NNSA Actions to Implement the SEAB Task Force Recommendations: 

Initially, NNSA officials did not provide us with any detailed 
information concerning their plans for transforming the infrastructure 
of the weapons complex and for addressing the recommendations in the 
SEAB task force report. Instead, NNSA officials described to us the 
following process they were using to establish a detailed vision for 
the future weapons complex and to identify a "path forward" for 
achieving that vision: 

* In March 2005, NNSA established a Responsive Infrastructure Steering 
Committee and created a position within the Office of Defense Programs 
to lead this effort. 

* In October 2005, NNSA received the final SEAB task force report. NNSA 
officials said that they have reviewed the recommendations from this 
report, along with recommendations from other advisory bodies, such as 
the Defense Science Board. 

* In November 2005 and January 2006, NNSA held two meetings for senior- 
level officials within the weapons complex to establish a broad range 
of planning options, which NNSA refers to as its "preferred 
infrastructure planning scenario." 

* In January 2006, NNSA held a 3-week session for about 50 key midlevel 
managers within the weapons complex to evaluate the proposed planning 
options. 

As a result of this process, NNSA recently offered a proposal for 
transforming the weapons complex that it believes is responsive to the 
recommendations in the SEAB task force report. Specifically, NNSA 
officials stated that: 

* NNSA will decide on the RRW design competition in November 2006 and, 
assuming that the RRW is technically feasible, will seek authorization 
to proceed to engineering development and production; 

* NNSA is requesting an additional $15.6 million in its fiscal year 
2007 budget request to dismantle legacy weapons material at the Pantex 
Plant; and: 

* NNSA is requesting about $15 million for fiscal year 2007, as well as 
over $30 million annually from fiscal years 2008 through 2011, to 
support the implementation of its responsive infrastructure strategy, 
including the creation of an Office of Transformation within the Office 
of Defense Programs. 

However, NNSA does not plan to adopt the SEAB task force's 
recommendation for a CNPC and the accompanying recommendation of 
consolidating all Category I and II quantities of Special Nuclear 
Material at the CNPC. NNSA believes that these recommendations are not 
affordable or feasible. For example, in recent congressional testimony, 
the Deputy Administrator for Defense Programs said that the SEAB task 
force report's recommendation on the timing for a CNPC--i.e., that a 
CNPC could be designed, built, and operational by 2015--is not 
plausible and underestimates the challenges of transitioning a unique 
and highly skilled workforce to a new location. He also stated that the 
recommendation does not recognize the challenge of meeting near-term 
requirements of the current stockpile and transforming the weapons 
complex infrastructure at the same time. In addition, he stated that it 
may be decades before all existing legacy weapons are fully removed 
from the stockpile and dismantled. 

Instead, NNSA has proposed the following plan for the 2030 weapons 
complex, which it states will achieve many of the benefits of the SEAB 
task force's approach in a way that is technically feasible and 
affordable over both the near and longer term: 

* Consolidated plutonium center. All research and development (except 
certain experiments at the Nevada Test Site), surveillance, and 
production activities involving Category I and II quantities of 
plutonium would be transferred to a consolidated plutonium center. The 
center would have a baseline production capacity of 125 pits per year 
by 2022 and would be situated at an existing Category I and II Special 
Nuclear Material site. In the interim, NNSA would upgrade the plutonium 
facility at Tech Area 55 at LANL to produce 30-50 pits per year and 
operate the Chemistry and Metallurgy Research Replacement facility at 
LANL as a Category I and II Special Nuclear Material facility. 

* Consolidation of Category I and II Special Nuclear Material. This 
material would be consolidated to fewer sites, and to fewer locations 
within sites. Specifically, NNSA would remove all Category I and II 
Special Nuclear Material from Sandia National Laboratory by 2008 and 
from LLNL by 2014, and would cease all activities involving this 
material at LANL by 2022. The remaining NNSA sites with Category I and 
II Special Nuclear Material would include the consolidated plutonium 
center, the Nevada Test Site, the Pantex Plant, the Y-12 Plant, and the 
Savannah River Site. 

* Modernizing the remaining production sites. The planned Uranium 
Processing Facility at the Y-12 Plant would consolidate existing highly 
enriched uranium contained in legacy weapons, dismantle legacy warhead 
secondaries, support associated research and development, and provide a 
long-term capacity for new secondary production. Tritium production and 
stockpile support services would remain at the Savannah River Site. All 
weapons assembly and disassembly would be carried out at a Pantex Plant 
modernized for increased throughput for the long term. In addition, 
NNSA would build a new, nonnuclear component production facility by 
2012 at an unspecified location. Finally, the Nevada Test Site would 
become the only site for large-scale hydrodynamic testing, which 
measure how stockpile materials behave when exposed to explosively 
driven shocks. 

Four Actions Will Be Critical to Successfully Transforming the Complex: 

Regardless of the approach chosen to transform the weapons complex, any 
attempt to change such an extremely complex enterprise must be based on 
solid analysis, careful planning, and effective leadership. We have 
identified four actions that, in our view, are critical to the 
successful transformation of the weapons complex. As the Congress 
oversees NNSA's future actions, it should expect to see each of these 
actions carefully and fully implemented. 

DOD Will Need to Establish Clear, Long-Term Requirements for the 
Stockpile: 

The U.S. nuclear weapons stockpile consists of nine weapon types. (See 
table 1.) The lifetimes of the weapons currently in the stockpile have 
been extended well beyond the minimum life for which they were 
originally designed--generally about 20 years--increasing the average 
age of the stockpile and, for the first time, leaving NNSA with large 
numbers of weapons that are close to 30 years old. 

Table 1: Nuclear Weapons in the Enduring Stockpile: 

Warhead or bomb type: B61 3/4/10;
Description: Tactical bomb;
Date of entry into stockpile: 1979/1979/1990;
Laboratory: LANL, SNL;
Military service: Air Force. 

Warhead or bomb type: B61 7/11;
Description: Strategic bomb;
Date of entry into stockpile: 1985/1996;
Laboratory: LANL, SNL;
Military service: Air Force. 

Warhead or bomb type: W62;
Description: ICBM warhead[A];
Date of entry into stockpile: 1970;
Laboratory: LLNL, SNL;
Military service: Air Force. 

Warhead or bomb type: W76;
Description: SLBM warhead[B];
Date of entry into stockpile: 1978;
Laboratory: LANL, SNL;
Military service: Navy. 

Warhead or bomb type: W78;
Description: ICBM warhead[A];
Date of entry into stockpile: 1979;
Laboratory: LANL, SNL;
Military service: Air Force. 

Warhead or bomb type: W80 0/1;
Description: Cruise missile warhead;
Date of entry into stockpile: 1984/1982;
Laboratory: LLNL, SNL;
Military service: Air Force / Navy. 

Warhead or bomb type: B83 0/1;
Description: Strategic bomb;
Date of entry into stockpile: 1983/1993;
Laboratory: LLNL, SNL;
Military service: Air Force. 

Warhead or bomb type: W87;
Description: ICBM warhead[A];
Date of entry into stockpile: 1986;
Laboratory: LLNL, SNL;
Military service: Air Force. 

Warhead or bomb type: W88;
Description: SLBM warhead[B];
Date of entry into stockpile: 1989;
Laboratory: LANL, SNL;
Military service: Navy. 

Source: NNSA. 

Note: The dates of entry into the enduring nuclear stockpile are based 
on when the weapon reached phase 6 of the weapons development and 
production cycle. As of 2005, responsibility for the W80 0/1 was 
transferred from LANL to LLNL. 

[A] ICBM = intercontinental ballistic missile. 

[B] SLBM = submarine launched ballistic missile.

[End of table] 

NNSA is currently rebuilding several of these weapon types through the 
Stockpile Life Extension Program. Already, the W87 has been 
refurbished. In addition, the B61, W76, and W80 are well into their 
respective refurbishments. The first production unit for the B61 is 
scheduled for September 2006, while the first production unit for the 
W76 is scheduled for September 2007 and for the W80 for January 2009. 
These are costly and difficult undertakings. According to NNSA's fiscal 
year 2007 budget request, over the next 5 years, the agency will need 
$118.4 million for the B61 life extension, $669.9 million for the W76, 
and $581.5 million for the W80. These efforts place considerable 
demands on the computational and experimental facilities of the weapons 
laboratories, as well as the production facilities. Finally, some of 
the life extensions have experienced significant cost and schedule 
overruns.[Footnote 12] For example, the total cost of the W80 life 
extension has increased by almost $600 million, while the first 
production unit date has slipped from February 2006 to the current date 
of January 2009. 

In its 2001 Nuclear Posture Review, DOD described the need to 
substantially reduce operationally deployed strategic warheads through 
2012. These reductions were subsequently reflected in the Moscow Treaty 
between the United States and Russia, which was signed in May 2002. As 
part of this strategy, DOD has stated its support for the development 
of an RRW, which could enable reductions in the number of older, 
nondeployed warheads maintained as a hedge against reliability problems 
in deployed systems and assist in the evolution to a smaller and more 
responsive nuclear weapons infrastructure. Currently, LANL and LLNL are 
developing competing designs for an RRW deployed on a submarine- 
launched ballistic missile, with the first production unit planned for 
fiscal year 2012. However, since the RRW design competition will not be 
completed until November 2006, more information on the viability of the 
RRW program will be necessary before any firm plans can be drawn up, 
budgeted, and implemented. In particular, it is not clear at this point 
whether the RRW can achieve the military characteristics, such as 
yield, provided by the current stockpile. Some NNSA officials have 
indicated that the military characteristics may need to be relaxed in 
order to design a warhead that is safer, easier to build, and easier to 
maintain. 

Producing an RRW warhead, while at the same time refurbishing a 
significant portion of the stockpile and continuing to dismantle 
retired weapons, will be a difficult and costly undertaking. Given 
NNSA's performance to date with the life extension programs and the 
current unresolved questions about the RRW, in our view, DOD will need 
to establish clear, long-term requirements for the nuclear stockpile 
before NNSA can make any final decisions about transforming the weapons 
complex. Specifically, DOD, working with NNSA through the Nuclear 
Weapons Council, needs to determine the types and quantities of nuclear 
weapons that will provide for our nation's nuclear deterrent over the 
long term. To facilitate this process, and to provide a foundation for 
transforming the weapons complex, the Congress may wish to consider 
setting firm deadlines for DOD, NNSA, and the Nuclear Weapons Council 
to determine the future composition of the nuclear stockpile. 

NNSA Will Need to Provide Accurate Estimates of the Costs of 
Transformation: 

Once a decision about the size and composition of the stockpile is 
made, NNSA will need accurate estimates of the costs of proposals for 
transforming the weapons complex. However, historically, NNSA has had 
difficulty developing realistic, defensible cost estimates, especially 
for large complex projects. For example, in our August 2000 report on 
the National Ignition Facility,[Footnote 13] we found that NNSA and 
LLNL managers greatly underestimated the costs of creating such a 
technically complex facility and failed to include adequate contingency 
funding, which virtually assured that the National Ignition Facility 
would be over budget and behind schedule. Similarly, as noted in a 
March 2005 NNSA report, inadequate appreciation of the technical 
complexities and inadequate contingency funding directly contributed to 
the cost overruns and schedule slippage experienced by the Dual Axis 
Radiographic Hydrodynamic Test facility.[Footnote 14] As noted earlier, 
NNSA has experienced similar cost and schedule problems with some of 
its life extension efforts. 

Some cost estimates to transform the weapons complex were included in 
the SEAB task force report. Specifically, using the results of computer 
models developed at LANL and LLNL, the SEAB task force estimated that 
NNSA would need about $175 billion between now and 2030 to support its 
current baseline program and modernize the current weapons complex in 
place, while NNSA would need only $155 billion to carry out the task 
force's recommendations. According to NNSA officials, NNSA is currently 
using the same cost models to evaluate its proposal. 

However, according to SEAB task force and NNSA and laboratory 
officials, while the LANL and LLNL models are useful for analyzing 
overall cost trends and evaluating the cost implications of alternative 
strategies, they are not currently designed to provide overall life- 
cycle cost estimates. In addition, we found, among other things, that 
the cost data used in the models have a high degree of uncertainty 
associated with them and that the models do not currently have the 
ability to provide any confidence intervals around their estimates. 
Several of the SEAB task force members told us that they recognize the 
limitations associated with their cost estimates. Since they did not 
have the time to fully analyze the costs and implementation issues 
associated with their recommendations, they expected that the proposed 
Office of Transformation would perform the necessary, detailed cost- 
benefit analyses of their recommendations in order to make the most 
informed decisions. 

As previously mentioned, NNSA officials have stated that they do not 
support building a CNPC because they believe that it is neither 
affordable nor feasible. However, until NNSA develops a credible, 
defensible method for estimating life-cycle costs and performs detailed 
cost analyses of the recommendations contained in the SEAB task force 
report, as well as its own proposal, it will not be possible to 
objectively evaluate the budgetary impact of any path forward. 

NNSA Will Need to Develop a Transformation Plan with Clear Milestones 
for Measuring Progress: 

According to one count, NNSA has established over 70 plans with 
associated performance measures to manage the Stockpile Stewardship 
Program. Nevertheless, over the last 6 years, we have repeatedly 
documented problems with NNSA's process for planning and managing its 
activities. For example, in a December 2000 report prepared for this 
Subcommittee, we found NNSA needed to improve its planning process so 
that there were linkages between individual plans across the Stockpile 
Stewardship Program and that the milestones contained in NNSA's plans 
were reflected in contractors' performance criteria and 
evaluations.[Footnote 15] However, in February 2006, we reported 
similar problems with how NNSA is managing the implementation of its 
new approach for assessing and certifying the safety and reliability of 
the nuclear stockpile.[Footnote 16] Specifically, we found that NNSA 
planning documents did not contain clear, consistent milestones or a 
comprehensive, integrated list of the scientific research being 
conducted across the weapons complex in support of the Primary and 
Secondary Assessment Technologies programs. These programs are 
responsible for setting the requirements for the computer models and 
experimental data needed to assess and certify the safety and 
reliability of nuclear warheads. We also found that NNSA had not 
established adequate performance measures to determine the progress of 
the weapons laboratories in developing and implementing this new 
methodology. 

However, the need for effective planning applies to more than the 
Stockpile Stewardship Program. One of the major recommendations of the 
SEAB task force is to consolidate Category I and II Special Nuclear 
Material at the CNPC. In our July 2005 report, we noted that the 
successful consolidation of Special Nuclear Material into fewer 
locations is a crucial component of several DOE sites' Design Basis 
Threat implementation plans.[Footnote 17] Such consolidation requires 
the cooperation of a variety of entities, including NNSA's Office of 
Secure Transportation, which moves weapons-grade material from site to 
site. In our report, we recommended that DOE develop a departmentwide 
Design Basis Threat implementation plan that includes the consolidation 
of Special Nuclear Material. However, while DOE has established a 
Nuclear Material Disposition Consolidation and Coordination Committee, 
it has yet to develop such a comprehensive plan. 

The process of transforming the weapons complex will take a long time 
to complete--as long as two decades, according to some estimates. As a 
result, NNSA will need to develop a transformation plan with clear 
milestones that all involved can work toward and that the Congress can 
use to hold NNSA accountable. For example, as we stated in a 2003 
report, one key practice in successful transformations is to set 
implementation goals and a time line to build momentum and show 
progress from day 1.[Footnote 18] In addition, given the demand for 
transparency and accountability in the public sector, these goals and 
time lines should be made public. We would note that NNSA should be 
able to establish milestones for some activities quickly, while others 
will take more time. For example, NNSA's Deputy Administrator for 
Defense Programs has indicated a willingness to establish an Office of 
Transformation and to implement other SEAB task force recommendations, 
such as developing a consistent set of business practices across the 
weapons complex. In these situations, the Congress should expect NNSA 
to move quickly to establish specific milestones needed to create the 
Office of Transformation, select key staff to fill this office, and 
implement key initiatives. 

We recognize that NNSA will not be able to establish specific 
milestones in some areas until after the Office of Transformation has 
performed a detailed, cost-benefit analysis of both the recommendations 
in the SEAB task force report and of NNSA's own preferred approach. 
However, once this analysis is complete, the Congress should expect to 
see specific, detailed plans and accompanying milestones for the RRW 
program, the establishment of a pit production capability, and the 
other adopted recommendations from the SEAB task force report. 

Change Will Require a Strong Office of Transformation: 

Many of the recommendations in the SEAB report are not new. A number of 
studies over the past 15 years have stressed the need to transform the 
weapons complex. However, for a variety of reasons, DOE and NNSA have 
never fully implemented these ideas. One of the key problems that NNSA 
has experienced during this time has been its inability to build an 
organization with clear lines of authority and responsibility. As we 
noted in our June 2004 report, NNSA, through its December 2002 
reorganization, made important strides in providing clearer lines of 
authority and responsibility.[Footnote 19] However, we also noted 
problems in certain oversight functions, such as safety. We are 
currently evaluating NNSA's management effectiveness for the 
Subcommittee on Strategic Forces of the House Committee on Armed 
Services. 

The Congress, and Chairman Hobson in particular, have offered 
leadership in supporting the creation of the SEAB task force and in 
funding the RRW program. However, as we stated in a 2003 report, 
organizational transformation entails fundamental and often radical 
change.[Footnote 20] As a result, top leadership must set the 
direction, pace, and tone for the transformation, while simultaneously 
helping the organization remain focused on the continued delivery of 
services. One key strategy is to dedicate a strong and stable 
implementation team that will be responsible for the transformation's 
day-to-day management. Accordingly, this team must be vested with the 
necessary authority and resources to set priorities, make timely 
decisions, and move quickly to implement decisions. Therefore, in our 
view, it is imperative that the proposed Office of Transformation (1) 
report directly to the Administrator of NNSA; (2) be given sufficient 
authority to conduct its studies and implement its recommendations; and 
(3) be held accountable for creating real change within the weapons 
complex. 

Mr. Chairman, this concludes my prepared statement. I would be happy to 
respond to any questions that you or Members of the Subcommittee may 
have. 

GAO Contact and Staff Acknowledgments: 

For further information on this testimony, 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 statement. James Noel, Assistant Director; Jason Holliday; 
and Peter Ruedel made key contributions to this testimony. 

FOOTNOTES 

[1] U.S. Department of Energy, Secretary of Energy Advisory Board, 
Report of the Nuclear Weapons Complex Infrastructure Task Force: 
Recommendations for the Nuclear Weapons Complex of the Future 
(Washington, D.C.: July 13, 2005). 

[2] National Defense Authorization Act for Fiscal Year 1994, Pub. L. 
No. 103-160, ß 3138 (1993). 

[3] The conference report accompanying the fiscal year 2005 
Consolidated Appropriations Act, Pub. L. No. 108-447, stated that the 
appropriations committee was providing $9 million "for the Reliable 
Replacement Warhead program to improve the reliability, longevity, and 
certifiability of existing weapons and their components." H.R. Rep. No. 
108-792, Div. C, at 951 (2004). 

[4] Office of the Under Secretary of Defense for Acquisition, 
Technology, and Logistics, Report of the Defense Science Board Task 
Force on Nuclear Capabilities (Washington, D.C.: January 2006). 

[5] See GAO, Nuclear Weapons: Opportunities Exist to Improve the 
Budgeting, Cost Accounting and Management Associated with the Stockpile 
Life Extension Program, GAO-03-583 (Washington, D.C.: July 28, 2003) 
and GAO, National Ignition Facility: Management and Oversight Failures 
Caused Major Cost Overruns and Schedule Delays, GAO/RCED-00-271 
(Washington, D.C.: Aug. 8, 2000). 

[6] GAO, Nuclear Weapons: NNSA Needs to Refine and More Effectively 
Manage Its New Approach for Assessing and Certifying Nuclear Weapons, 
GAO-06-261 (Washington, D.C.: Feb. 3, 2006). 

[7] GAO, Results-Oriented Cultures: Implementation Steps to Assist 
Mergers and Organizational Transformations, GAO-03-669 (Washington, 
D.C.: July 2, 2003). 

[8] The Office of Naval Reactors is managed as a separate entity within 
NNSA. 

[9] DOE Office of Inspector General, Management of the Nuclear Weapons 
Production Infrastructure, September 2000, DOE/IG-0484. 

[10] John S. Foster, Fr., et. al, FY 2000 Report to Congress of the 
Panel to Assess the Reliability, Safety, and Security of the United 
States Nuclear Stockpile, Feb. 1, 2001. 

[11] NNSA's fiscal year 2007 budget request states that detailed 
design, cost, and schedule assessments for incorporating facility 
improvements to meet the new Design Basis Threat and facility start-up 
activities are still in progress. It is anticipated that when these 
assessments are complete, the baseline "total estimated costs" of the 
Highly Enriched Uranium Materials Facility will increase substantially, 
and the completion date will slip. 

[12] For information on cost and schedule overruns associated with the 
W87 life extension program, see GAO, Nuclear Weapons: Improved 
Management Needed to Implement Stockpile Stewardship Program 
Effectively, GAO-01-48 (Washington, D.C.: Dec.14, 2000). 

[13] GAO, National Ignition Facility: Management and Oversight Failures 
Caused Major Cost Overruns and Schedule Delays, GAO/RCED-00-141 
(Washington, D.C.: Aug. 8, 2000). 

[14] NNSA, DARHT Construction Project Lessons Learned Report, March 
2005. 

[15] See GAO-01-48. 

[16] GAO, Nuclear Weapons: NNSA Needs to Refine and More Effectively 
Manage Its New Approach for Assessing and Certifying Nuclear Weapons, 
GAO-06-261 (Washington, D.C.: Feb. 3, 2006). 

[17] GAO, Nuclear Security: DOE's Office of the Under Secretary for 
Energy, Science, and Environment Needs to Take Prompt, Coordinated 
Action to Meet the New Design Basis Threat, GAO-05-611 (Washington, 
D.C.: July 15, 2005).

[18] See GAO-03-669. 

[19] GAO, National Nuclear Security Administration: Key Management 
Structure and Workforce Planning Issues Remain as NNSA Conducts 
Downsizing, GAO-04-545 (Washington, D.C.: June 25, 2004). 

[20] See GAO-03-669. 

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