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Modernizing the Nuclear Security Enterprise: NNSA Increased Its Budget Estimates, but Estimates for Key Stockpile and Infrastructure Programs Need Improvement

GAO-15-499 Published: Aug 06, 2015. Publicly Released: Aug 06, 2015.
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Highlights

What GAO Found

The National Nuclear Security Administration's (NNSA) 25-year budget estimates for modernizing the nuclear security enterprise in its fiscal year 2015 budget materials total $293.4 billion, which is an increase of $17.6 billion (6.4 percent) compared with the prior year's materials. NNSA's budget materials are (1) its 2015 congressional budget justification that includes the President's fiscal year budget request and information about 4 additional years of planned budget requests, and (2) its update to its Stockpile Stewardship and Management Plan that includes NNSA's long-range, 25-year plans for sustaining the stockpile and modernizing the nuclear security enterprise. Congress funds NNSA's 2015 budget estimates in four program areas: stockpile; infrastructure; science, technology, and engineering capabilities; and other weapons activities. GAO found that some budget estimates for individual programs within these four areas changed more significantly from 2014 to 2015 than the total budget estimates changed. For example, stockpile budget estimates to refurbish nuclear weapons through life extension programs (LEP) decreased by 31 percent in part due to changes in programs' production schedules. In contrast, infrastructure budget estimates for construction projects increased by 71 percent largely because the estimates were more complete than those GAO evaluated in 2014.

For NNSA's major modernization efforts—which include LEPs that are not in full scale production and major construction projects—near-term budget estimates for two of three LEPs align with plans, but estimates for construction projects are too preliminary to assess alignment. NNSA's near-term budget estimates to refurbish its B61 bomb and W88 warhead align with its plans because annual budget estimates reflect internally developed estimated cost ranges for the programs. However, the near-term budget estimates for the cruise missile LEP are not aligned with NNSA's 2015 plans because annual budget estimates are below the low point of the program's internally developed estimated cost range. A 2008 internal review of NNSA's project management stated that failure to request full funding can result in risks to programs' goals such as increased program costs and schedule delays. GAO's prior work has emphasized the importance of transparency in federal agencies' budget presentations because such information helps Congress understand how new funding requests relate to program decisions. Including information in future versions of budget materials on the potential risks to achieving LEPs' goals when funding requests are not aligned with plans would improve the quality of budget materials.

NNSA's infrastructure budget estimates are not adequate to address its reported $3.6 billion deferred maintenance backlog, and the backlog will continue to grow. One reason the backlog will continue to grow is that the 2015 budget estimates to address the problem fall below DOE infrastructure investment benchmarks for maintaining and recapitalizing existing facilities, activities that can reduce deferred maintenance. NNSA's goal to stop the growth of the backlog is stated in its budget materials, but these materials do not identify that budget estimates for maintenance and recapitalization fall below DOE's infrastructure investment benchmarks. Including information in future versions of budget materials on the potential risks to the achievement of infrastructure goals if budget estimates fall below internal benchmarks would improve the transparency of budget materials.

Why GAO Did This Study

Nuclear weapons continue to be an essential part of the nation's defense strategy. The end of the cold war resulted in a shift from producing new nuclear weapons to maintaining the stockpile through refurbishment. Also, billions of dollars in scheduled maintenance for nuclear weapons infrastructure has been deferred. The 2010 Nuclear Posture Review identified long-term stockpile modernization goals for NNSA that include (1) sustaining a safe, secure, and effective nuclear arsenal and (2) investing in a modern infrastructure.

The National Defense Authorization Act for Fiscal Year 2011 included a provision for GAO to report annually on NNSA's nuclear security budget materials. This report (1) identifies changes in estimates to the 2015 budget materials from the prior year's materials, and (2) assesses the extent to which NNSA's 2015 budget estimates align with plans for major modernization efforts, and (3) addresses the agency's stated goal of stopping the growth of its deferred maintenance backlog.

GAO analyzed NNSA's 2014 and 2015 nuclear security budget materials, which describe modernization plans and budget estimates for the next 25 years, and interviewed NNSA officials.

Recommendations

GAO recommends improving the transparency of future budget materials by identifying potential risks to the achievement of program goals if budget estimates are lower than plans suggest are necessary. NNSA agreed with GAO's recommendations and outlined actions to address them.

Recommendations for Executive Action

Agency Affected Recommendation Status
National Nuclear Security Administration To improve transparency in future NNSA budget materials so that they are more useful for congressional decision makers, the Administrator of NNSA should, in instances where NNSA's internal cost estimates for a life extension program suggest that additional funding may be needed beyond what is included in the 5-year budget estimates to align with the program's plan, identify the amount of the shortfall in its budget materials and, what, if any, effect the shortfall may have on the program's cost and schedule or the risk of achieving program objectives.
Closed – Implemented
In commenting on the report, the National Nuclear Security Administration (NNSA) agreed with this recommendation and stated that the agency would include, as appropriate, statements in future Stockpile Stewardship and Management Plans (SSMP) when funding for a nuclear weapon life extension program (LEP) is less than suggested by the agency's own cost estimate. NNSA has taken action to address the intent of our recommendation. For example, the agency's Fiscal Year 2020 SSMP (1) explicitly states that 5-year budget estimates for the W87-1 LEP is underfunded compared to the NNSA's own cost estimate and (2) displays the amount of underfunding graphically. The W87-1 LEP is currently conducting feasibility studies of multiple design options and will establish an official cost and schedule baseline in the next 2 to 3 fiscal years. The Fiscal Year 2020 SSMP states that the agency is using multiple analytical tools, such as cost-benefit analysis, to identify cost reduction opportunities as the NNSA completes feasibility studies. NNSA's actions to explicitly identify the underfunding and the tools to address it early in the W87-1 LEP's project lifecycle improves the transparency of the agency's budget materials so that they are more useful to congressional decision makers.
National Nuclear Security Administration To improve transparency in future NNSA budget materials so that they are more useful for congressional decision makers, the Administrator of NNSA should, in instances where budget estimates do not achieve DOE benchmarks for maintenance and recapitalization investment over the 5-year budget estimates, identify in the budget materials the amount of the shortfall and the effects, if any, on the deferred maintenance backlog.
Closed – Implemented
In commenting on the report, the National Nuclear Security Administration (NNSA) agreed with this recommendation and outlined planned actions to incorporate the recommendation into the agency's future budget materials. NNSA has taken multiple actions to address our recommendation. First, the agency's fiscal years 2017 and 2018 Stockpile Stewardship Management Plan (SSMP), which provides information on modernization and operations plans and budget estimates over the next 25 years, compares budget estimates for its line item maintenance and recapitalization budget accounts to Department of Energy (DOE) benchmarks. This action clearly acknowledges that NNSA's infrastructure budget estimates do not meet DOE benchmarks, provides additional information for the Congress to consider during the appropriation process, and describes agency actions to mitigate such shortfalls. Both the fiscal years 2017 and 2018 SSMP explicitly state that NNSA presented this additional information in response to our recommendation. Second, NNSA plans to fully implement by the end of 2018 an information technology system that the agency designed to be the single source of information on the condition of all NNSA physical infrastructure. Using a variety of data, including standardized condition assessments and risk of failure models, this system will allow NNSA to (a) better prevent deferred maintenance from occurring and (b) better prioritize investments to address deferred maintenance once it does occur.
National Nuclear Security Administration To improve transparency in future NNSA budget materials so that they are more useful for congressional decision makers, we recommend that the Administrator of NNSA should, until improved data about the importance of facilities and infrastructure to mission is available, clarify in the budget materials for the 5-year Future-Years Nuclear Security Program period the amount of the deferred maintenance backlog associated with facilities that has little to no effect on programmatic operations and is therefore low priority to be addressed.
Closed – Implemented
In commenting on the report, the National Nuclear Security Administration (NNSA) agreed with this recommendation and outlined planned actions to incorporate the recommendation into the agency's fiscal year 2017 budget materials. According to NNSA's Fiscal Year 2017 Stockpile Stewardship and Management Plan, NNSA is deploying management tools and processes to help it make data-driven and risk-informed investment decisions to address its infrastructure needs. Specifically, with respect to this recommendation, NNSA included data in its 2017 budget materials, explicitly in response to our recommendation that provide dollar amounts for deferred maintenance in total, on excess facilities, and on facilities that will be in excess in 10 years. The budget materials further note that NNSA will deliberately not perform some maintenance and repair on facilities that are or soon will be in excess. NNSA also identified in the budget materials the top 10 facilities posing the highest risk to the mission, the workers, the public, and the environment and stated that these facilities will be addressed using fiscal year 2017 funding.

Full Report

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Topics

EngineeringFacility constructionFederal agenciesFuture budget projectionsNuclear facility securityNuclear weaponsProgram managementSchedule slippagesStrategic planningWeapons research and developmentCost estimatesFacility maintenance