National Nuclear Security Administration: Use of Line Items in Management and Operating Contracts Could Be Improved
Fast Facts
The National Nuclear Security Administration spends over $20 billion per year on 9 contracts to manage and operate the nation's nuclear security enterprise.
In 2014, NNSA began using line items in contracts to define expectations for specific goods and services within a larger contract. Line items can increase transparency and allow more contracting options for construction projects.
But NNSA hasn't used them much. We found that NNSA doesn't have clear criteria for determining when to separate tasks with line items—which could mean missing opportunities to use this tool.
We recommended ways to address this issue.
A contract and an ink pen
Highlights
What GAO Found
The National Nuclear Security Administration (NNSA) has traditionally used a single, all-encompassing management and operating (M&O) contract at each of its sites to acquire work performed, including to subcontract for construction services. Beginning in 2014, NNSA introduced individual contract line item numbers (line items) to some contracts to increase the visibility of specific efforts. Line items capture information about separately identifiable goods and services that the government seeks to acquire within the scope of the overall contract.
Since introducing individual contract line items in 2014, NNSA has minimally used line items to separate contract deliverables, especially for construction projects. Specifically, five of NNSA’s 21 capital asset projects that had approved performance baselines as of June 2026 are covered by separate line items in the M&O contracts (see table). One smaller project and two projects under a former contract were completed as separate contract line items. NNSA officials told GAO they are considering adding at least two other construction projects at one site as separate line items.
Ongoing Construction Projects with Separate Contract Line Items in the National Nuclear Security Administration’s Management and Operating Contracts
|
Line item |
Contract |
|---|---|
|
Uranium Processing Facility (2 projects) |
Y-12 National Security Complex |
|
Savannah River Plutonium Processing Facility (2 projects) |
Savannah River Site |
|
Power Sources Capability |
Sandia National Laboratories |
Source: GAO analysis of National Nuclear Security Administration data. | GAO-26-108409
According to NNSA officials and M&O contractor representatives GAO interviewed, contract line items can enhance transparency of procurement data and allow NNSA to develop separate contractor fee plans and performance evaluations for high-risk, high-value projects. However, officials said these separate fee plans and performance evaluations require additional administrative resources to implement.
Because line items can have both benefits and drawbacks, NNSA officials stated that they decide which deliverables are most appropriate to oversee through contract line items based on several considerations, such as the total project cost, complexity, and whether there are dedicated appropriations. However, NNSA has not documented the criteria for determining how and when officials should decide to use separate line items. Without doing so, NNSA lacks reasonable assurance that contracting officers are using consistent and appropriate criteria when determining separate line items. This could result in missed opportunities to improve accountability and contractor performance.
NNSA also has not fully assessed and documented lessons learned from its use of line items, which could be used to inform its future use of line items. By documenting lessons learned, NNSA can ensure it retains information that could help it to most effectively and appropriately use line items and avoid expending administrative resources on ineffective acquisition approaches.
Why GAO Did This Study
Over the next decade, NNSA plans to spend almost $200 billion modernizing the nation’s nuclear weapons production and research infrastructure. In fiscal year 2025, NNSA spent close to $24 billion on multi-year, multi-billion-dollar M&O contracts to run the government-owned, contractor-operated sites of the nuclear security enterprise.
Senate Report 118-188, accompanying S. 4638, the National Defense Authorization Act for Fiscal Year 2025, includes a provision for GAO to review NNSA’s use of line items in its M&O contracts and how line items can improve contract oversight.
This report examines (1) the extent to which NNSA has used line items in its M&O contracts; (2) the benefits and drawbacks of using line items, according to officials and contractors; and (3) how NNSA determines when to use line items in M&O contracts.
GAO reviewed NNSA’s M&O contracts and compared NNSA’s use of line items to Department of Energy (DOE) acquisition policy and relevant standards for internal control. GAO also interviewed DOE and NNSA headquarters and field office officials and M&O contractor representatives.
Recommendations
GAO is making two recommendations to NNSA to document criteria for using separate line items and to assess and document lessons learned for using line items in M&O contracts. NNSA identified steps it plans to take to address these recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| National Nuclear Security Administration | The Associate Administrator for NNSA's Office of Partnership and Acquisition Services should document in policy or guidance the process and criteria contracting officers should use when determining which deliverables, such as an individual construction project, are separately identifiable and should have separate line or subline items in M&O contracts. (Recommendation 1) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| National Nuclear Security Administration | The Associate Administrator for NNSA's Office of Partnership and Acquisition Services should assess and document lessons learned regarding the use of separate line items in M&O contracts, such as for construction projects, to inform future acquisition policies and practices. (Recommendation 2) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|