National Nuclear Security Administration:
Action Needed to Address Affordability of Nuclear Modernization Programs
GAO-17-341: Published: Apr 26, 2017. Publicly Released: Apr 26, 2017.
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To ensure that the nation's existing nuclear weapons remain safe and reliable, the National Nuclear Security Administration is working to modernize the nuclear weapons stockpile and its related infrastructure. Budget estimates for these efforts total about $301 billion from fiscal years 2017 to 2041.
We reviewed NNSA's fiscal year 2017 plan for nuclear modernization over the next 25 years. We found that NNSA's estimated budget needs may exceed those projected by the President's fiscal year 2017 budget for fiscal years 2022 through 2026. We recommended that NNSA assess the affordability of its modernization plans.
NNSA's FY 2017 Estimated Budget Needs Compared to the President's FY 2017 Budget Projections for FYs 2022-2026
Line graphs showing gap between NNSA's estimated budget needs and President's budget projections.
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What GAO Found
The National Nuclear Security Administration's (NNSA) overall nuclear modernization budget materials and plans for the next 25 years, as presented in the Fiscal Year 2017 Stockpile Stewardship and Management Plan , differ little from those in the fiscal year 2016 plan. Specifically,
Budget estimates in the fiscal year 2017 plan increased about 1 percent over the 2016 plan in nominal terms, which is similar to the overall budget increases in the fiscal year 2016 plan compared to the fiscal year 2015 plan.
Specific budget estimates changed to a greater degree for certain program areas and individual programs. For example, changes in NNSA's modernization estimates varied across the four program areas that make up the Weapons Activities appropriations account: stockpile; infrastructure; research, development, testing, and evaluation; and other weapons activities.
Changes were made in the 25-year budget estimates for the Weapons Activities account as well as at the program level. Reasons for changes include movement of program funding to other areas. For example, the infrastructure area funding decreased 2.7 percent from fiscal year 2016 to fiscal year 2017, in part because about $6.5 billion in strategic materials sustainment funding was moved from the infrastructure area to the stockpile area.
In some cases, NNSA's fiscal year 2017 nuclear security budget materials do not align with the agency's modernization plans, both within the 5-year Future-Years Nuclear Security Program (FYNSP)—fiscal years 2017 through 2021—and beyond, raising concerns about the affordability of NNSA's planned portfolio of modernization programs. In particular, for some weapons refurbishments, the low end of NNSA's cost range estimates exceeds the estimates in the budget materials. For example, the W80-4 program's low-range cost estimate for fiscal year 2017 exceeds the budget estimate by about $26.9 million. In addition, the budget estimates for some modernization programs for fiscal years 2018 through 2021 are more than $5 billion below the funding levels NNSA has identified needing. If these needs are not met, NNSA may have to defer certain modernization work. Further, NNSA's budget estimates for fiscal years 2022 through 2026 may exceed out-year funding projections in the President's budget for those same years. GAO identified a similar funding gap in the prior year's budget materials. NNSA's fiscal year 2017 plan concludes that the modernization program is generally affordable in the years beyond the FYNSP, but this conclusion is optimistic, and the NNSA plan does not assess options to align future modernization plans and budgets with or without out-year funding increases. Portfolio management best practices developed by the Project Management Institute state that organizations can optimize their portfolios of programs and projects by assessing their capability and capacity to finance specific portfolio components; determining which portfolio components should receive the highest priority; and identifying components to be suspended, reprioritized, or terminated. By including an assessment of the affordability of its portfolio of modernization programs in future Stockpile Stewardship and Management Plans, NNSA could develop a plan that could bring its estimates of modernization funding needs into alignment with potential future budgets.
Why GAO Did This Study
To ensure that the nation's existing nuclear weapons remain safe and reliable, the 2010 Nuclear Posture Review identified a set of long-term modernization goals for the nation's nuclear weapons stockpile that include sustaining a safe, secure, and effective nuclear arsenal and investing in a modern infrastructure. NNSA, which is responsible for the stockpile, is charged with carrying out these goals.
The National Defense Authorization Act for Fiscal Year 2011 includes a provision for GAO to report annually on NNSA's nuclear security budget materials. This is the sixth year that GAO has undertaken work in response to this provision. This report assesses the extent to which NNSA's fiscal year 2017 nuclear security budget materials (1) differ, if at all, from its budget estimates and plans for modernization activities as presented in its fiscal year 2016 budget materials and (2) align with NNSA's modernization plans.
GAO analyzed NNSA's fiscal year 2016 and 2017 nuclear security budget materials associated with those years' Stockpile Stewardship and Management Plans , and interviewed officials from NNSA and the Office of Management and Budget.
What GAO Recommends
GAO recommends that NNSA include an assessment of the affordability of its portfolio of modernization programs in future versions of the Stockpile Stewardship and Management Plan . NNSA did not explicitly agree or disagree with the recommendation. GAO continues to believe that the recommendation is valid, as discussed in this report.
For more information, contact David C. Trimble at (202) 512-3841 or firstname.lastname@example.org.
Recommendation for Executive Action
Comments: NNSA included a new section in the Fiscal Year 2020 Stockpile Stewardship and Management Plan (SSMP) of its analysis of the affordability of its weapons modernization plans. However, this section still does not include details about, or an assessment of, the options NNSA might have to take in the future--such as adjusting the schedules or scopes of certain programs or projects--to address an apparent misalignment between the future budget estimates of its portfolio of nuclear modernization programs and the projections of potential future budgets. Therefore, we will continue to review future SSMPs to assess whether NNSA has included additional information or an assessment consistent with this recommendation.
Recommendation: To help NNSA put forth more credible modernization plans, the NNSA Administrator should include an assessment of the affordability of NNSA's portfolio of modernization programs in future versions of the Stockpile Stewardship and Management Plan--for example, by presenting options NNSA could consider to bring its estimates of modernization funding needs into alignment with potential future budgets, such as potentially deferring the start of or canceling specific modernization programs.
Agency Affected: Department of Energy: National Nuclear Security Administration