Nuclear Supply Chain:
DOE Has Not Used Its Enhanced Procurement Authority but Is Assessing Potential Use
GAO-18-572R: Published: Aug 2, 2018. Publicly Released: Aug 2, 2018.
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The Department of Energy's National Nuclear Security Administration maintains the nation's nuclear arsenal. Its activities include rebuilding aging nuclear weapons, which sometimes need new components.
NNSA has concerns that weapons components produced abroad could be used for sabotage or spying. In 2014, Congress approved an enhanced procurement authority that allowed NNSA to exclude certain component suppliers from its work without explanation and without possibility of legal challenge. NNSA officials told us they believe extending the authority—which has not yet been used—past its June 2018 expiration would be beneficial.
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What GAO Found
Officials from the Department of Energy (DOE) and National Nuclear Security Administration (NNSA) stated that DOE has not used its enhanced procurement authority. This enhanced procurement authority allows the Secretary of Energy, in the interest of national security, to exclude suppliers from certain procurements made directly by DOE and NNSA or indirectly by a contractor, if various conditions are met. The authority applies to procurements of "covered systems"--primarily nuclear weapons components and items associated with the design, production, and maintenance of such weapons; items associated with the design and development of nonproliferation and counterproliferation systems; and certain information technology systems.
GAO recommended in August 2016 that DOE direct NNSA to assess the circumstances that might warrant using the authority and take additional actions based on the results, such as developing processes to use the authority and examining whether the agency had adequate resources for doing so. NNSA officials stated that, since August 2016, they identified one circumstance related to direct procurements that may have warranted using the authority to address supply chain risks, but this circumstance was resolved in another way without use of the authority. NNSA officials stated that they are drafting a report in response to GAO's August 2016 recommendation that will document their assessment of circumstances that may warrant using the authority. NNSA officials said they expect this report to be finalized in October 2018 and have communicated to congressional staff that they believe extending this authority beyond its June 2018 expiration would be beneficial.
Why GAO Did This Study
The U.S. government has identified a trend toward using a non-domestic supply chain for non-nuclear components of nuclear weapons and the increasing sophistication of adversaries, according to documents from DOE and NNSA. NNSA has identified heightened risks for the supply chain, including the possibility that a counterfeit or sabotaged component could cause a nuclear weapon to malfunction. The National Defense Authorization Act for Fiscal Year 2014 provides an enhanced procurement authority to the Secretary of Energy to help manage supply chain risks. The Secretary may use the authority to exclude suppliers from the procurement of a covered system without providing the supplier with a reason, and the Secretary's decision is not subject to review in federal court. The authority terminated on June 24, 2018.
The National Defense Authorization Act for Fiscal Year 2014 also includes a provision for GAO to report on DOE's use of the enhanced procurement authority and on the status of any previous recommendations GAO has made in this area. This report updates GAO's previous work by examining the extent to which DOE used its enhanced procurement authority and assessed the circumstances and factors that officials reported affecting its use.
GAO reviewed the statutory requirements for using the enhanced procurement authority and DOE and NNSA documents. GAO interviewed DOE and NNSA officials involved with decisions to use the authority to determine the extent to which DOE has used the authority; their views on what opportunities to use the authority, if any, had been identified since May 2016; and factors that officials identified as affecting DOE's and NNSA's use of the authority.
What GAO Recommends
GAO is not making any recommendations.
For more information, contact Allison Bawden at (202) 512-3841 or BawdenA@gao.gov.