Nuclear Weapons: Views on Proposals to Transform the Nuclear	 
Weapons Complex (26-APR-06, GAO-06-606T).			 
                                                                 
Over the past several years, a serious effort has begun to	 
comprehensively reevaluate how the United States maintains its	 
nuclear deterrent and what the nation's approach should be for	 
transforming its aging nuclear weapons complex. The National	 
Nuclear Security Administration (NNSA), a separately organized	 
agency within the Department of Energy, is responsible for	 
overseeing this weapons complex, which comprises three nuclear	 
weapons design laboratories, four production plants, and the	 
Nevada Test Site. At the direction of the Subcommittee on Energy 
and Water Development, the Secretary of Energy Advisory Board's  
(SEAB) Nuclear Weapons Complex Infrastructure Task Force issued a
report in October 2005 that provided a systematic review of the  
requirements for the weapons complex for the next 25 years and	 
offered its vision for an agile and responsive weapons complex.  
GAO was asked to discuss (1) the current actions NNSA is taking  
to address the SEAB task force's recommendations and (2) the	 
critical steps that will be needed to achieve and sustain a	 
meaningful, cost-effective transformation of the weapons complex.
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-606T					        
    ACCNO:   A52539						        
  TITLE:     Nuclear Weapons: Views on Proposals to Transform the     
Nuclear Weapons Complex 					 
     DATE:   04/26/2006 
  SUBJECT:   Facility maintenance				 
	     Facility management				 
	     Nuclear facilities 				 
	     Nuclear materials					 
	     Nuclear weapons					 
	     Nuclear weapons plants				 
	     Performance measures				 
	     Research and development facilities		 
	     Strategic planning 				 
	     Weapons research and development			 
	     Technology modernization programs			 
	     Cost estimates					 

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GAO-06-606T

     

     * Background
     * NNSA Actions to Implement the SEAB Task Force Recommendation
     * Four Actions Will Be Critical to Successfully Transforming t
          * DOD Will Need to Establish Clear, Long-Term Requirements for
          * NNSA Will Need to Provide Accurate Estimates of the Costs of
          * NNSA Will Need to Develop a Transformation Plan with Clear M
          * Change Will Require a Strong Office of Transformation
     * GAO Contact and Staff Acknowledgments
     * GAO's Mission
     * Obtaining Copies of GAO Reports and Testimony
          * Order by Mail or Phone
     * To Report Fraud, Waste, and Abuse in Federal Programs
     * Congressional Relations
     * Public Affairs

Testimony

Before the Subcommittee on Energy and Water Development, Committee on
Appropriations, House of Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 10:00 a.m. EDT

Wednesday, April 26, 2006

NUCLEAR WEAPONS

Views on Proposals to Transform the Nuclear Weapons Complex

Statement of Gene Aloise, Director Natural Resources and Environment

GAO-06-606T

Mr. Chairman and Members of the Subcommittee:

We are pleased to be here today to provide our observations on the October
2005 report, Recommendations for the Nuclear Weapons Complex of the
Future, prepared by the Secretary of Energy Advisory Board's (SEAB)
Nuclear Weapons Complex Infrastructure Task Force.1 After the end of the
cold war, the United States, in 1992, began a unilateral moratorium on
underground nuclear testing. Subsequently, in 1993, the Department of
Energy (DOE), at the direction of the President and the Congress,
established the Stockpile Stewardship Program to ensure the United States'
core intellectual and technical competencies in nuclear weapons without
testing.2 The National Nuclear Security Administration (NNSA), a
separately organized agency within DOE, is now responsible for carrying
out the Stockpile Stewardship Program through a nuclear weapons complex
(weapons complex) that comprises three nuclear weapons design laboratories
(weapons laboratories), four production plants, and the Nevada Test Site.
With the creation of the Stockpile Stewardship Program, the mission of the
weapons complex changed from "designing, building, and testing" successive
generations of weapons to extending the life of the existing nuclear
weapons stockpile through "scientific study, computer simulation, and
refurbishment."

Several events over the past few years have made it clear that it is time
for the United States to comprehensively reevaluate how it maintains its
nuclear deterrent and to develop and implement a strategy for transforming
its weapons complex. For example, the 2001 Nuclear Posture Review found
that the nuclear weapons infrastructure had atrophied and needed to be
repaired; it also called for the development of a "responsive
infrastructure" that would support a smaller nuclear deterrent.
Subsequently, the 2002 Moscow Treaty between the United States and Russia
set a goal of reducing the number of deployed U.S. nuclear warheads to
between 1,700 and 2,200 by 2012. More recently, NNSA, as directed by the
conference report accompanying DOE's fiscal year 2005 appropriations act,
created the Reliable Replacement Warhead (RRW) program to study a new
approach to maintaining nuclear warheads over the long term by making
weapons easier to manufacture, maintain, dismantle, and certify without
nuclear testing.3

1U.S. Department of Energy, Secretary of Energy Advisory Board, Report of
the Nuclear Weapons Complex Infrastructure Task Force: Recommendations for
the Nuclear Weapons Complex of the Future (Washington, D.C.: July 13,
2005).

2National Defense Authorization Act for Fiscal Year 1994, Pub. L. No.
103-160, S: 3138 (1993).

In this context, this Subcommittee requested, and the SEAB task force has
provided, a systematic review of the requirements for the weapons complex
over the next 25 years. The SEAB task force report contains five major
recommendations that, combined with numerous supporting recommendations,
offer the task force's vision for an agile and responsive weapons complex.
These recommendations are as follows:

           o  Immediately begin to modernize the nuclear weapons stockpile by
           designing a RRW.

           o  Create a Consolidated Nuclear Production Center (CNPC) that
           contains a modern set of production facilities in one location.

           o  Consolidate all Category I and Category II quantities of
           Special Nuclear Material and weapon primary and secondary
           components at the CNPC.
           o  Aggressively dismantle the cold war stockpile.

           o  Create an Office of Transformation to oversee the
           transformation of the weapons complex.

           Our testimony discusses (1) the current actions NNSA is taking to
           address the SEAB task force's recommendations and (2) the critical
           actions needed to achieve and sustain a meaningful, cost-effective
           transformation of the weapons complex.

           To carry out our objectives, we reviewed the final SEAB task force
           report and the comments provided by various parties on the initial
           draft. We interviewed the SEAB task force members individually to
           obtain their views on the final report and NNSA's response to it.
           We met with various NNSA officials, including the Deputy
           Administrator for Defense Programs and the head of NNSA's
           Responsive Infrastructure Steering Committee, and with the Deputy
           Assistant to the Secretary of Defense (Nuclear Matters). We also
           reviewed the methods the SEAB task force used to develop cost
           estimates for options presented in its report. Finally, we
           reviewed a variety of documents, including the Nuclear Posture
           Review, and the recent Defense Science Board report, entitled
           Report of the Defense Science Board Task Force on Nuclear
           Capabilities.4 We performed our work between February 2006 and
           April 2006 in accordance with generally accepted government
           auditing standards.

           In summary:

           NNSA has offered a proposal for transforming the weapons complex
           that it believes is responsive to the recommendations in the SEAB
           task force report. Specifically, NNSA officials noted, they (1)
           will decide on a design competition for the RRW in November 2006,
           (2) have requested an increase of over $15 million in funding for
           dismantling legacy weapons in fiscal year 2007, and (3) have
           requested $15 million in their fiscal year 2007 budget proposal to
           create an Office of Transformation and to begin studying ways to
           transform the business practices of the weapons complex. However,
           NNSA does not plan to adopt the SEAB task force's recommendation
           for a CNPC and the accompanying recommendation of consolidating
           all Category I and II quantities of Special Nuclear Material at
           the CNPC, primarily because it views these recommendations as too
           costly. Instead, NNSA has proposed building a consolidated center
           for processing plutonium, removing Category I and II Special
           Nuclear Material from the three weapons laboratories, and
           modernizing the remaining production capabilities at their
           existing locations.

           Regardless of the approach chosen to transform the weapons
           complex, any attempt to change such an extremely complex
           enterprise must be based on solid analysis, careful planning, and
           effective leadership. We have identified four actions that, in our
           view, are critical to successfully transforming the weapons
           complex. As the Congress oversees NNSA's future actions, it should
           expect to see each of these actions carefully and fully
           implemented:

           o  The Department of Defense (DOD) will need to establish clear,
           long-term requirements for the stockpile. Our current stockpile
           comprises nine weapon systems, all of which were designed during
           the cold war. Several of these systems-the B61, W76, and W80-are
           currently having their useful lives extended for up to 30 years
           through NNSA's Stockpile Life Extension Program. However, these
           life extensions are very expensive, and some have already
           experienced cost and schedule slippages. NNSA is now evaluating a
           new warhead-the RRW-which may be able to take the place of some
           existing warheads. Before any plans for a new weapons complex can
           be made final, however, in our view, DOD will need to determine
           the systems, their capabilities, their quantities, and the
           schedule it needs to provide for our nation's nuclear deterrent.

           o  NNSA will need to provide accurate estimates of the costs of
           transformation. Once a decision is made about the size and
           composition of the stockpile, NNSA can develop accurate estimates
           of the costs of proposals for transforming the weapons complex. As
           we have noted in numerous reports over the last several years on
           key projects such as the National Ignition Facility and the
           Stockpile Life Extension Program, NNSA has had difficulty
           estimating costs and schedules and adhering to them.5 Some cost
           estimates to transform the weapons complex were developed as part
           of the SEAB task force report and, according to NNSA officials,
           NNSA is currently using the same cost models for its effort.
           However, these estimates need considerable refinement. As a
           result, NNSA will need to develop credible, defensible cost
           estimates for transforming the weapons complex.
           o  NNSA will need to develop a transformation plan with clear
           milestones for measuring progress. Developing workable plans, with
           realistic, measurable milestones has been a continuing problem for
           NNSA. For example, as we noted in our February 2006 report on
           NNSA's effort to develop and implement a new method for assessing
           and certifying the stockpile, NNSA does not have an integrated
           plan for carrying out this important activity or clear milestones
           for measuring progress.6 Without question, transforming the
           weapons complex will be a much more daunting enterprise. However,
           without a clear transformation plan that contains measurable
           milestones, NNSA will have no way to evaluate its progress, and
           the Congress will have no way to hold NNSA accountable.
           o  Change will require a strong Office of Transformation. As we
           noted in a 2003 report, one of the key practices for successfully
           transforming an organization is to ensure that top leadership sets
           the direction, pace, and tone for the transformation.7 Through its
           recent reorganizations, NNSA has shown that it can move from what
           was often called a "dysfunctional bureaucracy" to an organization
           with clearer lines of authority and responsibility. NNSA officials
           have embraced the SEAB task force's proposal for an Office of
           Transformation. However, in order for such an office to be
           effective, it must (1) report directly to the Administrator, NNSA;
           (2) have real authority to make and enforce its decisions; and (3)
           be held accountable by the Congress for achieving results in a
           cost-effective and timely manner.

           NNSA conducts nuclear weapon and nonproliferation-related national
           security activities in research and development laboratories,
           production plants, and other facilities.8 Specifically, NNSA
           operates three weapons laboratories-Lawrence Livermore National
           Laboratory (LLNL), California; Los Alamos National Laboratory
           (LANL), New Mexico; and the Sandia National Laboratories, New
           Mexico and California; and four nuclear weapons production
           sites-the Pantex Plant, Texas; the Y-12 Plant, Tennessee; the
           Kansas City Plant, Missouri; and the Savannah River Site, South
           Carolina. NNSA also operates the Nevada Test Site. To implement
           its nuclear weapons programs, NNSA received about $6.4 billion for
           fiscal year 2006 and has requested more than $6.4 billion for
           fiscal year 2007. Between fiscal years 2008 and 2011, NNSA is
           proposing to spend almost $27 billion for these programs.

           Over the past decade, NNSA has invested a substantial amount of
           money in sustaining the cold war stockpile and upgrading the three
           weapons laboratories with new, state-of-the-art experimental and
           computing facilities. However, as described in studies over the
           past decade, the production infrastructure of the weapons complex
           is aging and increasingly outdated. For example, a 2000 DOE Office
           of Inspector General report concluded that the postponement of
           repairs to aging and deteriorating facilities had resulted in
           delays in weapons modification, remanufacture, and dismantlement,
           among other things.9 In addition, a 2001 report by the Foster
           Panel found the state of the production facilities to be troubling
           and recommended that NNSA restore missing production capabilities
           and refurbish the production infrastructure.10 In its fiscal year
           2007 budget request, NNSA estimated that it will cost $2.4 billion
           to reduce the backlog of deferred maintenance at these facilities
           to an appropriate level consistent with industry best practices.

           Events over the past several years have served to intensify
           concern about how the United States maintains its nuclear
           deterrent and what the nation's strategy should be for
           transforming the weapons complex. Specifically:

           o  The 2001 Nuclear Posture Review stated, among other things,
           that cold war practices related to nuclear weapons planning were
           obsolete, and few changes had been made to the size or composition
           of the nation's nuclear forces. Furthermore, there had been
           underinvestment in the weapons complex, particularly the
           production sites. The Nuclear Posture Review called for, among
           other things, the development of a "responsive infrastructure"
           that would be sized to meet the needs of a smaller nuclear
           deterrent while having the capability to respond to future
           strategic challenges.

           o  The terrorist attacks of September 11, 2001, led DOE to
           increase the size of its Design Basis Threat, a classified
           document that identifies the size and capabilities of terrorist
           forces. This increase in the size of the Design Basis Threat has
           greatly increased NNSA's cost for protecting its weapons-grade
           nuclear material.

           o  The 2002 Moscow Treaty between the United States and Russia set
           a goal of reducing the number of deployed U.S. nuclear warheads to
           between 1,700 and 2,200 by 2012. However, a significant number of
           existing warheads would be kept in reserve to address potential
           technical contingencies with the existing stockpile.

           o  NNSA, at the Congress' direction, created the RRW program to
           study a new approach to maintaining nuclear warheads over the long
           term. The RRW program would redesign weapon components to be
           easier to manufacture, maintain, dismantle, and certify without
           nuclear testing, potentially allowing NNSA to transition to a
           smaller, more efficient weapons complex. A design competition
           between LANL and LLNL is scheduled to end in November 2006.

           o  Finally, in recent congressional testimony, the Secretary of
           Energy and the Administrator of NNSA emphasized to the Congress
           that while they believe stockpile stewardship is working, the
           current cold war legacy stockpile is the wrong stockpile for the
           long term, and the current nuclear weapons infrastructure is not
           responsive to unanticipated events or emerging threats.

           Current NNSA plans call for substantial funding to operate the
           existing weapons complex. For example, according to NNSA's fiscal
           year 2007 budget request, over the next 5 years, NNSA plans to
           spend about $7.4 billion to operate and maintain the existing
           infrastructure of the weapons complex. In addition, NNSA plans to
           spend $1.8 billion on new construction projects. These
           construction projects include

           o  the Highly Enriched Uranium Materials Facility at the Y-12
           Plant, which is estimated to cost $335 million and be completed in
           fiscal year 2007;11

           o  the Chemistry and Metallurgy Research Replacement facility at
           LANL, which is estimated to cost $838 million and be completed in
           fiscal year 2013; and

           o  the proposed Uranium Processing Facility at the Y-12 Plant,
           which is projected to cost between $600 million to $1 billion.

           During testimony before this Subcommittee in March 2004, the
           Secretary of Energy agreed to conduct a comprehensive review of
           the weapons complex. Subsequently, in January 2005, the Secretary
           of Energy requested the SEAB to form the Nuclear Weapons Complex
           Infrastructure Task Force to assess the implications of
           presidential decisions on the size and composition of the
           stockpile; the cost and operational impacts of the new Design
           Basis Threat; and the personnel, facilities, and budgetary
           resources required to support a smaller stockpile. The review was
           also to evaluate opportunities for consolidating Special Nuclear
           Material, facilities, and operations across the weapons complex in
           order to minimize security requirements and the environmental
           impacts of continuing operations. The SEAB task force formally
           transmitted the final report to the Secretary of Energy in October
           2005.

           According to the report, the SEAB task force assessed the impact
           of its recommendations on near-term funding requirements, as well
           as total costs, for the weapons complex over the next 25 years.
           The report stated that implementing all of the recommendations
           will increase near-term costs substantially but would result in a
           substantial reduction in future operating costs after the CNPC is
           in full operation. The SEAB task force estimated that the
           long-term cost savings would be approximately twice the near-term
           cost increases.

           Initially, NNSA officials did not provide us with any detailed
           information concerning their plans for transforming the
           infrastructure of the weapons complex and for addressing the
           recommendations in the SEAB task force report. Instead, NNSA
           officials described to us the following process they were using to
           establish a detailed vision for the future weapons complex and to
           identify a "path forward" for achieving that vision:

           o  In March 2005, NNSA established a Responsive Infrastructure
           Steering Committee and created a position within the Office of
           Defense Programs to lead this effort.
           o  In October 2005, NNSA received the final SEAB task force
           report. NNSA officials said that they have reviewed the
           recommendations from this report, along with recommendations from
           other advisory bodies, such as the Defense Science Board.
           o  In November 2005 and January 2006, NNSA held two meetings for
           senior-level officials within the weapons complex to establish a
           broad range of planning options, which NNSA refers to as its
           "preferred infrastructure planning scenario."
           o  In January 2006, NNSA held a 3-week session for about 50 key
           midlevel managers within the weapons complex to evaluate the
           proposed planning options.

           As a result of this process, NNSA recently offered a proposal for
           transforming the weapons complex that it believes is responsive to
           the recommendations in the SEAB task force report. Specifically,
           NNSA officials stated that

           o  NNSA will decide on the RRW design competition in November 2006
           and, assuming that the RRW is technically feasible, will seek
           authorization to proceed to engineering development and
           production;
           o  NNSA is requesting an additional $15.6 million in its fiscal
           year 2007 budget request to dismantle legacy weapons material at
           the Pantex Plant; and
           o  NNSA is requesting about $15 million for fiscal year 2007, as
           well as over $30 million annually from fiscal years 2008 through
           2011, to support the implementation of its responsive
           infrastructure strategy, including the creation of an Office of
           Transformation within the Office of Defense Programs.

           However, NNSA does not plan to adopt the SEAB task force's
           recommendation for a CNPC and the accompanying recommendation of
           consolidating all Category I and II quantities of Special Nuclear
           Material at the CNPC. NNSA believes that these recommendations are
           not affordable or feasible. For example, in recent congressional
           testimony, the Deputy Administrator for Defense Programs said that
           the SEAB task force report's recommendation on the timing for a
           CNPC-i.e., that a CNPC could be designed, built, and operational
           by 2015-is not plausible and underestimates the challenges of
           transitioning a unique and highly skilled workforce to a new
           location. He also stated that the recommendation does not
           recognize the challenge of meeting near-term requirements of the
           current stockpile and transforming the weapons complex
           infrastructure at the same time. In addition, he stated that it
           may be decades before all existing legacy weapons are fully
           removed from the stockpile and dismantled.

           Instead, NNSA has proposed the following plan for the 2030 weapons
           complex, which it states will achieve many of the benefits of the
           SEAB task force's approach in a way that is technically feasible
           and affordable over both the near and longer term:

           o  Consolidated plutonium center. All research and development
           (except certain experiments at the Nevada Test Site),
           surveillance, and production activities involving Category I and
           II quantities of plutonium would be transferred to a consolidated
           plutonium center. The center would have a baseline production
           capacity of 125 pits per year by 2022 and would be situated at an
           existing Category I and II Special Nuclear Material site. In the
           interim, NNSA would upgrade the plutonium facility at Tech Area 55
           at LANL to produce 30-50 pits per year and operate the Chemistry
           and Metallurgy Research Replacement facility at LANL as a Category
           I and II Special Nuclear Material facility.

           o  Consolidation of Category I and II Special Nuclear Material.
           This material would be consolidated to fewer sites, and to fewer
           locations within sites. Specifically, NNSA would remove all
           Category I and II Special Nuclear Material from Sandia National
           Laboratory by 2008 and from LLNL by 2014, and would cease all
           activities involving this material at LANL by 2022. The remaining
           NNSA sites with Category I and II Special Nuclear Material would
           include the consolidated plutonium center, the Nevada Test Site,
           the Pantex Plant, the Y-12 Plant, and the Savannah River Site.

           o  Modernizing the remaining production sites. The planned Uranium
           Processing Facility at the Y-12 Plant would consolidate existing
           highly enriched uranium contained in legacy weapons, dismantle
           legacy warhead secondaries, support associated research and
           development, and provide a long-term capacity for new secondary
           production. Tritium production and stockpile support services
           would remain at the Savannah River Site. All weapons assembly and
           disassembly would be carried out at a Pantex Plant modernized for
           increased throughput for the long term. In addition, NNSA would
           build a new, nonnuclear component production facility by 2012 at
           an unspecified location. Finally, the Nevada Test Site would
           become the only site for large-scale hydrodynamic testing, which
           measure how stockpile materials behave when exposed to explosively
           driven shocks.

           Regardless of the approach chosen to transform the weapons
           complex, any attempt to change such an extremely complex
           enterprise must be based on solid analysis, careful planning, and
           effective leadership. We have identified four actions that, in our
           view, are critical to the successful transformation of the weapons
           complex. As the Congress oversees NNSA's future actions, it should
           expect to see each of these actions carefully and fully
           implemented.

           The U.S. nuclear weapons stockpile consists of nine weapon types.
           (See table 1.) The lifetimes of the weapons currently in the
           stockpile have been extended well beyond the minimum life for
           which they were originally designed-generally about 20
           years-increasing the average age of the stockpile and, for the
           first time, leaving NNSA with large numbers of weapons that are
           close to 30 years old.

3The conference report accompanying the fiscal year 2005 Consolidated
Appropriations Act, Pub. L. No. 108-447, stated that the appropriations
committee was providing $9 million "for the Reliable Replacement Warhead
program to improve the reliability, longevity, and certifiability of
existing weapons and their components." H.R. Rep. No. 108-792, Div. C, at
951 (2004).

4Office of the Under Secretary of Defense for Acquisition, Technology, and
Logistics, Report of the Defense Science Board Task Force on Nuclear
Capabilities (Washington, D.C.: January 2006).

5See GAO, Nuclear Weapons: Opportunities Exist to Improve the Budgeting,
Cost Accounting and Management Associated with the Stockpile Life
Extension Program, GAO-03-583 (Washington, D.C.: July 28, 2003) and GAO,
National Ignition Facility: Management and Oversight Failures Caused Major
Cost Overruns and Schedule Delays, GAO/RCED-00-271 (Washington, D.C.: Aug.
8, 2000).

6GAO, Nuclear Weapons: NNSA Needs to Refine and More Effectively Manage
Its New Approach for Assessing and Certifying Nuclear Weapons, GAO-06-261
(Washington, D.C.: Feb. 3, 2006).

                                   Background

7GAO, Results-Oriented Cultures: Implementation Steps to Assist Mergers
and Organizational Transformations, GAO-03-669 (Washington, D.C.: July 2,
2003).

8The Office of Naval Reactors is managed as a separate entity within NNSA.

9DOE Office of Inspector General, Management of the Nuclear Weapons
Production Infrastructure, September 2000, DOE/IG-0484.

10John S. Foster, Fr., et. al, FY 2000 Report to Congress of the Panel to
Assess the Reliability, Safety, and Security of the United States Nuclear
Stockpile, Feb. 1, 2001.

11NNSA's fiscal year 2007 budget request states that detailed design,
cost, and schedule assessments for incorporating facility improvements to
meet the new Design Basis Threat and facility start-up activities are
still in progress. It is anticipated that when these assessments are
complete, the baseline "total estimated costs" of the Highly Enriched
Uranium Materials Facility will increase substantially, and the completion
date will slip.

         NNSA Actions to Implement the SEAB Task Force Recommendations

     Four Actions Will Be Critical to Successfully Transforming the Complex

DOD Will Need to Establish Clear, Long-Term Requirements for the Stockpile

Table 1: Nuclear Weapons in the Enduring Stockpile

Warhead or                Date of entry into                   Military    
bomb type  Description    stockpile                 Laboratory service     
B61 3/4/10 Tactical bomb  1979/1979/1990            LANL, SNL  Air Force   
B61 7/11   Strategic bomb 1985/1996                 LANL, SNL  Air Force   
W62        ICBM warheada  1970                      LLNL, SNL  Air Force   
W76        SLBM warheadb  1978                      LANL, SNL  Navy        
W78        ICBM warheada  1979                      LANL, SNL  Air Force   
W80 0/1    Cruise missile 1984/1982                 LLNL, SNL  Air Force / 
              warhead                                             Navy        
B83 0/1    Strategic bomb 1983/1993                 LLNL, SNL  Air Force   
W87        ICBM warheada  1986                      LLNL, SNL  Air Force   
W88        SLBM warheadb  1989                      LANL, SNL  Navy        

Source: NNSA.

Note: The dates of entry into the enduring nuclear stockpile are based on
when the weapon reached phase 6 of the weapons development and production
cycle. As of 2005, responsibility for the W80 0/1 was transferred from
LANL to LLNL.

aICBM = intercontinental ballistic missile.

bSLBM = submarine launched ballistic missile.

NNSA is currently rebuilding several of these weapon types through the
Stockpile Life Extension Program. Already, the W87 has been refurbished.
In addition, the B61, W76, and W80 are well into their respective
refurbishments. The first production unit for the B61 is scheduled for
September 2006, while the first production unit for the W76 is scheduled
for September 2007 and for the W80 for January 2009. These are costly and
difficult undertakings. According to NNSA's fiscal year 2007 budget
request, over the next 5 years, the agency will need $118.4 million for
the B61 life extension, $669.9 million for the W76, and $581.5 million for
the W80. These efforts place considerable demands on the computational and
experimental facilities of the weapons laboratories, as well as the
production facilities. Finally, some of the life extensions have
experienced significant cost and schedule overruns.12 For example, the
total cost of the W80 life extension has increased by almost $600 million,
while the first production unit date has slipped from February 2006 to the
current date of January 2009.

In its 2001 Nuclear Posture Review, DOD described the need to
substantially reduce operationally deployed strategic warheads through
2012. These reductions were subsequently reflected in the Moscow Treaty
between the United States and Russia, which was signed in May 2002. As
part of this strategy, DOD has stated its support for the development of
an RRW, which could enable reductions in the number of older, nondeployed
warheads maintained as a hedge against reliability problems in deployed
systems and assist in the evolution to a smaller and more responsive
nuclear weapons infrastructure. Currently, LANL and LLNL are developing
competing designs for an RRW deployed on a submarine-launched ballistic
missile, with the first production unit planned for fiscal year 2012.
However, since the RRW design competition will not be completed until
November 2006, more information on the viability of the RRW program will
be necessary before any firm plans can be drawn up, budgeted, and
implemented. In particular, it is not clear at this point whether the RRW
can achieve the military characteristics, such as yield, provided by the
current stockpile. Some NNSA officials have indicated that the military
characteristics may need to be relaxed in order to design a warhead that
is safer, easier to build, and easier to maintain.

Producing an RRW warhead, while at the same time refurbishing a
significant portion of the stockpile and continuing to dismantle retired
weapons, will be a difficult and costly undertaking. Given NNSA's
performance to date with the life extension programs and the current
unresolved questions about the RRW, in our view, DOD will need to
establish clear, long-term requirements for the nuclear stockpile before
NNSA can make any final decisions about transforming the weapons complex.
Specifically, DOD, working with NNSA through the Nuclear Weapons Council,
needs to determine the types and quantities of nuclear weapons that will
provide for our nation's nuclear deterrent over the long term. To
facilitate this process, and to provide a foundation for transforming the
weapons complex, the Congress may wish to consider setting firm deadlines
for DOD, NNSA, and the Nuclear Weapons Council to determine the future
composition of the nuclear stockpile.

12For information on cost and schedule overruns associated with the W87
life extension program, see GAO, Nuclear Weapons: Improved Management
Needed to Implement Stockpile Stewardship Program Effectively, GAO-01-48
(Washington, D.C.: Dec.14, 2000).

NNSA Will Need to Provide Accurate Estimates of the Costs of Transformation

Once a decision about the size and composition of the stockpile is made,
NNSA will need accurate estimates of the costs of proposals for
transforming the weapons complex. However, historically, NNSA has had
difficulty developing realistic, defensible cost estimates, especially for
large complex projects. For example, in our August 2000 report on the
National Ignition Facility,13 we found that NNSA and LLNL managers greatly
underestimated the costs of creating such a technically complex facility
and failed to include adequate contingency funding, which virtually
assured that the National Ignition Facility would be over budget and
behind schedule. Similarly, as noted in a March 2005 NNSA report,
inadequate appreciation of the technical complexities and inadequate
contingency funding directly contributed to the cost overruns and schedule
slippage experienced by the Dual Axis Radiographic Hydrodynamic Test
facility.14 As noted earlier, NNSA has experienced similar cost and
schedule problems with some of its life extension efforts.

Some cost estimates to transform the weapons complex were included in the
SEAB task force report. Specifically, using the results of computer models
developed at LANL and LLNL, the SEAB task force estimated that NNSA would
need about $175 billion between now and 2030 to support its current
baseline program and modernize the current weapons complex in place, while
NNSA would need only $155 billion to carry out the task force's
recommendations. According to NNSA officials, NNSA is currently using the
same cost models to evaluate its proposal.

However, according to SEAB task force and NNSA and laboratory officials,
while the LANL and LLNL models are useful for analyzing overall cost
trends and evaluating the cost implications of alternative strategies,
they are not currently designed to provide overall life-cycle cost
estimates. In addition, we found, among other things, that the cost data
used in the models have a high degree of uncertainty associated with them
and that the models do not currently have the ability to provide any
confidence intervals around their estimates. Several of the SEAB task
force members told us that they recognize the limitations associated with
their cost estimates. Since they did not have the time to fully analyze
the costs and implementation issues associated with their recommendations,
they expected that the proposed Office of Transformation would perform the
necessary, detailed cost-benefit analyses of their recommendations in
order to make the most informed decisions.

13GAO, National Ignition Facility: Management and Oversight Failures
Caused Major Cost Overruns and Schedule Delays, GAO/RCED-00-141
(Washington, D.C.: Aug. 8, 2000).

14NNSA, DARHT Construction Project Lessons Learned Report, March 2005.

As previously mentioned, NNSA officials have stated that they do not
support building a CNPC because they believe that it is neither affordable
nor feasible. However, until NNSA develops a credible, defensible method
for estimating life-cycle costs and performs detailed cost analyses of the
recommendations contained in the SEAB task force report, as well as its
own proposal, it will not be possible to objectively evaluate the
budgetary impact of any path forward.

NNSA Will Need to Develop a Transformation Plan with Clear Milestones for
Measuring Progress

According to one count, NNSA has established over 70 plans with associated
performance measures to manage the Stockpile Stewardship Program.
Nevertheless, over the last 6 years, we have repeatedly documented
problems with NNSA's process for planning and managing its activities. For
example, in a December 2000 report prepared for this Subcommittee, we
found NNSA needed to improve its planning process so that there were
linkages between individual plans across the Stockpile Stewardship Program
and that the milestones contained in NNSA's plans were reflected in
contractors' performance criteria and evaluations.15 However, in February
2006, we reported similar problems with how NNSA is managing the
implementation of its new approach for assessing and certifying the safety
and reliability of the nuclear stockpile.16 Specifically, we found that
NNSA planning documents did not contain clear, consistent milestones or a
comprehensive, integrated list of the scientific research being conducted
across the weapons complex in support of the Primary and Secondary
Assessment Technologies programs. These programs are responsible for
setting the requirements for the computer models and experimental data
needed to assess and certify the safety and reliability of nuclear
warheads. We also found that NNSA had not established adequate performance
measures to determine the progress of the weapons laboratories in
developing and implementing this new methodology.

15See GAO-01-48 .

16GAO, Nuclear Weapons: NNSA Needs to Refine and More Effectively Manage
Its New Approach for Assessing and Certifying Nuclear Weapons, GAO-06-261
(Washington, D.C.: Feb. 3, 2006).

However, the need for effective planning applies to more than the
Stockpile Stewardship Program. One of the major recommendations of the
SEAB task force is to consolidate Category I and II Special Nuclear
Material at the CNPC. In our July 2005 report, we noted that the
successful consolidation of Special Nuclear Material into fewer locations
is a crucial component of several DOE sites' Design Basis Threat
implementation plans.17 Such consolidation requires the cooperation of a
variety of entities, including NNSA's Office of Secure Transportation,
which moves weapons-grade material from site to site. In our report, we
recommended that DOE develop a departmentwide Design Basis Threat
implementation plan that includes the consolidation of Special Nuclear
Material. However, while DOE has established a Nuclear Material
Disposition Consolidation and Coordination Committee, it has yet to
develop such a comprehensive plan.

The process of transforming the weapons complex will take a long time to
complete-as long as two decades, according to some estimates. As a result,
NNSA will need to develop a transformation plan with clear milestones that
all involved can work toward and that the Congress can use to hold NNSA
accountable. For example, as we stated in a 2003 report, one key practice
in successful transformations is to set implementation goals and a time
line to build momentum and show progress from day 1.18 In addition, given
the demand for transparency and accountability in the public sector, these
goals and time lines should be made public. We would note that NNSA should
be able to establish milestones for some activities quickly, while others
will take more time. For example, NNSA's Deputy Administrator for Defense
Programs has indicated a willingness to establish an Office of
Transformation and to implement other SEAB task force recommendations,
such as developing a consistent set of business practices across the
weapons complex. In these situations, the Congress should expect NNSA to
move quickly to establish specific milestones needed to create the Office
of Transformation, select key staff to fill this office, and implement key
initiatives.

17GAO, Nuclear Security: DOE's Office of the Under Secretary for Energy,
Science, and Environment Needs to Take Prompt, Coordinated Action to Meet
the New Design Basis Threat, GAO-05-611 (Washington, D.C.: July 15, 2005).

18See GAO-03-669 .

We recognize that NNSA will not be able to establish specific milestones
in some areas until after the Office of Transformation has performed a
detailed, cost-benefit analysis of both the recommendations in the SEAB
task force report and of NNSA's own preferred approach. However, once this
analysis is complete, the Congress should expect to see specific, detailed
plans and accompanying milestones for the RRW program, the establishment
of a pit production capability, and the other adopted recommendations from
the SEAB task force report.

Change Will Require a Strong Office of Transformation

Many of the recommendations in the SEAB report are not new. A number of
studies over the past 15 years have stressed the need to transform the
weapons complex. However, for a variety of reasons, DOE and NNSA have
never fully implemented these ideas. One of the key problems that NNSA has
experienced during this time has been its inability to build an
organization with clear lines of authority and responsibility. As we noted
in our June 2004 report, NNSA, through its December 2002 reorganization,
made important strides in providing clearer lines of authority and
responsibility.19 However, we also noted problems in certain oversight
functions, such as safety. We are currently evaluating NNSA's management
effectiveness for the Subcommittee on Strategic Forces of the House
Committee on Armed Services.

The Congress, and Chairman Hobson in particular, have offered leadership
in supporting the creation of the SEAB task force and in funding the RRW
program. However, as we stated in a 2003 report, organizational
transformation entails fundamental and often radical change.20 As a
result, top leadership must set the direction, pace, and tone for the
transformation, while simultaneously helping the organization remain
focused on the continued delivery of services. One key strategy is to
dedicate a strong and stable implementation team that will be responsible
for the transformation's day-to-day management. Accordingly, this team
must be vested with the necessary authority and resources to set
priorities, make timely decisions, and move quickly to implement
decisions. Therefore, in our view, it is imperative that the proposed
Office of Transformation (1) report directly to the Administrator of NNSA;
(2) be given sufficient authority to conduct its studies and implement its
recommendations; and (3) be held accountable for creating real change
within the weapons complex.

19GAO, National Nuclear Security Administration: Key Management Structure
and Workforce Planning Issues Remain as NNSA Conducts Downsizing,
GAO-04-545 (Washington, D.C.: June 25, 2004).

20See GAO-03-669 .

Mr. Chairman, this concludes my prepared statement. I would be happy to
respond to any questions that you or Members of the Subcommittee may have.

                     GAO Contact and Staff Acknowledgments

For further information on this testimony, please contact me at (202)
512-3841 or [email protected]. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this statement. James Noel, Assistant Director; Jason Holliday; and
Peter Ruedel made key contributions to this testimony.

(360672)

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Highlights of GAO-06-606T , a testimony before the Subcommittee on Energy
and Water Development, Committee on Appropriations, House of
Representatives

April 26, 2006

NUCLEAR WEAPONS

Views on Proposals to Transform the Nuclear Weapons Complex

Over the past several years, a serious effort has begun to comprehensively
reevaluate how the United States maintains its nuclear deterrent and what
the nation's approach should be for transforming its aging nuclear weapons
complex. The National Nuclear Security Administration (NNSA), a separately
organized agency within the Department of Energy, is responsible for
overseeing this weapons complex, which comprises three nuclear weapons
design laboratories, four production plants, and the Nevada Test Site.

At the direction of the Subcommittee on Energy and Water Development, the
Secretary of Energy Advisory Board's (SEAB) Nuclear Weapons Complex
Infrastructure Task Force issued a report in October 2005 that provided a
systematic review of the requirements for the weapons complex for the next
25 years and offered its vision for an agile and responsive weapons
complex. GAO was asked to discuss (1) the current actions NNSA is taking
to address the SEAB task force's recommendations and (2) the critical
steps that will be needed to achieve and sustain a meaningful,
cost-effective transformation of the weapons complex.

The SEAB task force report contained the following five recommendations:

           o  Immediately begin to modernize the cold war nuclear stockpile
           by designing a Reliable Replacement Warhead (RRW).
           o  Create a Consolidated Nuclear Production Center (CNPC) that
           contains a modern set of production facilities in one location.
           o  Consolidate all weapons-grade material and weapons components
           at the CNPC.
           o  Aggressively dismantle the cold war stockpile.
           o  Create an Office of Transformation to oversee the
           transformation of the nuclear weapons complex.

NNSA has offered a proposal for transforming the nuclear weapons complex
that it believes is responsive to the recommendations in the SEAB task
force report. Specifically, NNSA officials noted, they (1) will decide on
a design competition for the RRW in November 2006, (2) have requested an
increase of over $15 million in funding for dismantling legacy weapons in
fiscal year 2007, and (3) have requested $15 million in their fiscal year
2007 budget proposal to create an Office of Transformation, among other
things. However, NNSA does not support the SEAB task force's
recommendation for a CNPC and the accompanying recommendation of
consolidating weapons-grade material at the CNPC, primarily because it
views these recommendations as too costly. Instead, NNSA has proposed
building a consolidated center for processing plutonium, removing
weapons-grade material from the three weapons laboratories, and
modernizing the remaining production capabilities at their existing
locations.

Regardless of the approach chosen, any attempt to change an extremely
complex enterprise must be based on solid analysis, careful planning, and
effective leadership. GAO has identified the following four actions that,
in its view, are critical to successfully transforming the weapons
complex:

           o  The Department of Defense will need to establish clear,
           long-term requirements for the nuclear stockpile by determining
           the types and quantities of nuclear weapons needed to provide for
           our nation's nuclear deterrent.
           o  After the Department of Defense determines the size and
           composition of the future stockpile, NNSA will need to develop
           accurate cost estimates of the proposals for transforming the
           weapons complex. Current estimates of the costs of transforming
           the weapons complex contain considerable uncertainty.
           o  After NNSA selects a proposal based on accurate cost estimates,
           it will need to develop a clear transformation plan containing
           measurable milestones so that it can evaluate progress and the
           Congress can hold it accountable.
           o  The proposed Office of Transformation must have authority to
           make and enforce its decisions on transformation and must be held
           accountable by the Congress for achieving timely and
           cost-effective results.
*** End of document. ***