Nuclear Weapons:

Actions Needed to Identify Total Costs of Weapons Complex Infrastructure and Research and Production Capabilities

GAO-10-582: Published: Jun 21, 2010. Publicly Released: Jun 21, 2010.

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The National Nuclear Security Administration (NNSA) manages and secures the nation's nuclear weapons stockpile, with annual appropriations of about $6.4 billion. NNSA oversees eight contractor-operated sites that execute its programs. Two programs make up almost one-third of this budget: Readiness in Technical Base and Facilities (RTBF) Operations of Facilities, which operates and maintains weapons facilities and infrastructure, and Stockpile Services, which provides research and development (R&D) and production capabilities. Consistent with cost accounting standards, each site has established practices to account for these activities. The Administration has recently committed to stockpile reductions. GAO was asked to determine the extent to which NNSA's budget justifications for (1) RTBF Operations of Facilities and (2) Stockpile Services are based on the total costs of providing these capabilities. GAO was also asked to discuss the implications, if any, of a smaller stockpile on these costs. To carry out its work, GAO analyzed NNSA's and its contractors' data using a data collection instrument; reviewed policies, plans, and budgets; and interviewed officials.

NNSA cannot accurately identify the total costs to operate and maintain weapons facilities and infrastructure because of differences in sites' cost accounting practices. These differences are allowable under current NNSA guidance as long as sites comply with cost accounting standards and disclose their practices to NNSA. The differences among cost accounting practices include the facilities and activities sites support with RTBF Operations of Facilities funds and how sites use other funding sources to support weapons facilities and infrastructure. GAO's analysis of sites' responses to a data collection instrument showed that the total cost to operate and maintain weapons facilities and infrastructure likely significantly exceeds the budget request for the RTBF Operations of Facilities program submitted to Congress for fiscal year 2009. NNSA has an effort under way that, if fully implemented, would provide more detail on the total costs to operate and maintain weapons facilities and infrastructure. NNSA does not fully identify or estimate the total costs of the products and capabilities supported through Stockpile Services R&D and production activities. Instead, NNSA primarily identifies the functional activities--such as engineering operations, quality control, and program management--and their costs supported through Stockpile Services and bases its future-year budget requests on the extent to which prior-year budgets were sufficient to execute these functions. In 2009, GAO issued a cost guide that identified using a product-oriented management tool, rather than a functionally oriented one, as a best practice for cost estimating. Using cost guide criteria, GAO's analysis found tracking costs by functions provides little information on the costs of the individual capabilities supported through Stockpile Services. NNSA has an effort under way that, if fully implemented, would provide more detail on the total costs of the products and capabilities supported through Stockpile Services. Reducing stockpile size is unlikely to significantly affect NNSA's RTBF Operations of Facilities and Stockpile Services costs because a sizable portion of these costs is fixed to maintain base nuclear weapons capabilities. The Administration has planned to increase budget requests for NNSA's nuclear weapons program by $4.25 billion between fiscal years 2011 and 2015. This planned increase is intended, in part, to invest in and modernize facilities and infrastructure and to ensure that base capabilities are supported such that a smaller nuclear deterrent continues to be safe, secure, and reliable. While base capability costs appear to be relatively insensitive to reductions in the stockpile, without complete and reliable information about these costs, NNSA lacks information that could help justify planned budget increases or target cost savings opportunities.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To allow Congress to better oversee management of the nuclear security enterprise and to improve NNSA's management information with respect to the base capabilities necessary to ensure nuclear weapons are safe, secure, and reliable, the Administrator of NNSA should, once the Stockpile Services work breakdown structure reflects a product or capability basis, use this work breakdown structure to develop product/capability cost estimates that adequately justify the congressional budget request for Stockpile Services.

    Agency Affected: Department of Energy: National Nuclear Security Administration

    Status: Open

    Comments: In process: NNSA is working to develop an Enterprise Portfolio Analysis Tool (EPAT) that incorporates a national work breakdown structure and a variety of tools for budget formulation and justification, prioritization and analysis, scenario planning, execution, evaluation, and reporting. The national workbreakdown structure on which it is based can be viewed in terms of both products and capabilities. As of February 2012, NNSA officials said Phase 1 development of EPAT will allow the tool to be used for FY 2014 budget formulation. GAO believes EPAT is promising and will continue to follow-up on its development and deployment.

    Recommendation: To allow Congress to better oversee management of the nuclear security enterprise and to improve NNSA's management information with respect to the base capabilities necessary to ensure nuclear weapons are safe, secure, and reliable, the Administrator of NNSA should evaluate the total costs of operating and maintaining existing weapons activities facilities and infrastructure as part of program planning processes and budget formulation, especially in relation to recapitalization and modernization of the nuclear security enterprise.

    Agency Affected: Department of Energy: National Nuclear Security Administration

    Status: Open

    Comments: Under review

    Recommendation: To allow Congress to better oversee management of the nuclear security enterprise and to improve NNSA's management information with respect to the base capabilities necessary to ensure nuclear weapons are safe, secure, and reliable, the Administrator of NNSA should require M&O contractors to report to NNSA annually on the total costs to operate and maintain weapons activities facilities and infrastructure at their sites.

    Agency Affected: Department of Energy: National Nuclear Security Administration

    Status: Open

    Comments: Under review

    Recommendation: To allow Congress to better oversee management of the nuclear security enterprise and to improve NNSA's management information with respect to the base capabilities necessary to ensure nuclear weapons are safe, secure, and reliable, the Administrator of NNSA should develop guidance for management and operating (M&O) contractors for the consistent collection of information on the total costs to operate and maintain weapons activities facilities and infrastructure.

    Agency Affected: Department of Energy: National Nuclear Security Administration

    Status: Open

    Comments: Under review

    Recommendation: In light of significant proposed increases to NNSA's nuclear weapons program budget in fiscal year 2011 and beyond, the Administrator of NNSA should include in future years' congressional budget justifications (a) detailed justifications for how these proposed funding increases will affect program execution and (b) information about how the funding increases affected programs.

    Agency Affected: Department of Energy: National Nuclear Security Administration

    Status: Open

    Comments: Under review

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