Nuclear Weapons: NNSA Needs to Establish a Cost and Schedule	 
Baseline for Manufacturing a Critical Nuclear Weapon Component	 
(23-MAY-08, GAO-08-593).					 
                                                                 
The Department of Energy's National Nuclear Security		 
Administration (NNSA) is responsible for manufacturing pits, a	 
key component in a nuclear warhead. The department lost its	 
ability to manufacture pits in 1989 with the closing of the Rocky
Flats Plant. In 1996, the Los Alamos National Laboratory (LANL)  
was directed to reestablish a pit manufacturing capability,	 
starting with a limited number of pits for the W88 warhead. In	 
recent years, NNSA has considered ways to increase its pit	 
manufacturing capacity, including building a new, large-scale pit
manufacturing facility. It has also proposed producing pits for  
the Reliable Replacement Warhead (RRW). GAO was asked to	 
determine the (1) extent to which NNSA achieved its major goals  
for reestablishing its pit manufacturing capability, (2) factors 
that currently constrain its ability to increase its pit	 
manufacturing capacity, and (3) status of its plans for future	 
pit manufacturing. For this review, GAO met with NNSA and LANL	 
officials, reviewed agency documents, and visited the nuclear	 
facility used to manufacture pits.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-593 					        
    ACCNO:   A82187						        
  TITLE:     Nuclear Weapons: NNSA Needs to Establish a Cost and      
Schedule Baseline for Manufacturing a Critical Nuclear Weapon	 
Component							 
     DATE:   05/23/2008 
  SUBJECT:   Agency missions					 
	     Cost analysis					 
	     Defense capabilities				 
	     Design specifications				 
	     Facility construction				 
	     Facility maintenance				 
	     Industrial facilities				 
	     Missile warheads					 
	     Nuclear facilities 				 
	     Nuclear warfare					 
	     Nuclear waste storage				 
	     Nuclear weapons					 
	     Quality control					 
	     Radioactive waste disposal 			 
	     Requirements definition				 
	     Standards						 
	     Standards evaluation				 
	     Strategic planning 				 
	     Warfare						 
	     Weapons industry					 
	     Cost estimates					 
	     Program goals or objectives			 
	     Los Alamos National Laboratory (LANL)		 
	     W88 Warhead					 
	     Reliable Replacement Warhead			 

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GAO-08-593

This is the accessible text file for GAO report number GAO-08-593 
entitled 'Nuclear Weapons: NNSA Needs to Establish a Cost and Schedule 
Baseline for Manufacturing a Critical Nuclear Weapon Component' which 
was released on June 2, 2008. 

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Report to the Subcommittee on Energy and Water Development, Committee 
on Appropriations, House of Representatives: 

United States Government Accountability Office: 
GAO: 

May 2008: 

Nuclear Weapons: 

NNSA Needs to Establish a Cost and Schedule Baseline for Manufacturing 
a Critical Nuclear Weapon Component: 

GAO-08-593: 

GAO Highlights: 

Highlights of GAO-08-593, a report to the Subcommittee on Energy and 
Water Development, Committee on Appropriations, House of 
Representatives. 

Why GAO Did This Study: 

The Department of Energyï¿½s National Nuclear Security Administration 
(NNSA) is responsible for manufacturing pits, a key component in a 
nuclear warhead. The department lost its ability to manufacture pits in 
1989 with the closing of the Rocky Flats Plant. In 1996, the Los Alamos 
National Laboratory (LANL) was directed to reestablish a pit 
manufacturing capability, starting with a limited number of pits for 
the W88 warhead. In recent years, NNSA has considered ways to increase 
its pit manufacturing capacity, including building a new, large-scale 
pit manufacturing facility. It has also proposed producing pits for the 
Reliable Replacement Warhead (RRW). GAO was asked to determine the (1) 
extent to which NNSA achieved its major goals for reestablishing its 
pit manufacturing capability, (2) factors that currently constrain its 
ability to increase its pit manufacturing capacity, and (3) status of 
its plans for future pit manufacturing. For this review, GAO met with 
NNSA and LANL officials, reviewed agency documents, and visited the 
nuclear facility used to manufacture pits. 

What GAO Found: 

NNSA achieved its major goals for reestablishing its pit manufacturing 
capability at LANL as defined by the agency in 2002. Specifically, 
NNSAï¿½s goals were to create a capability to manufacture 10 pits per 
year starting in 2007 and to deliver a single W88 war reserve pit to 
the stockpile in 2007. War reserve pits must meet stringent 
specifications, while other types of pits, such as pits destructively 
tested for production quality control, may not meet the same standards. 
NNSA estimated that this effort would cost about $1.55 billion for 
fiscal years 2001 through 2007. According to NNSA, LANL produced 11 
pits in 2007, eight of which were W88 war reserve pits, and spent about 
$1.29 billion for fiscal years 2001 through 2007. However, GAO found 
that NNSA did not establish clear, consistent goals for the number of 
W88 war reserve pits it planned to produce. Specifically, some NNSA 
documents, including budget requests to Congress, called for delivering 
10 W88 war reserve pits per year starting in 2007. In addition, NNSAï¿½s 
cost estimate did not include estimates for a variety of activities 
that directly and indirectly supported the pit manufacturing mission at 
LANL between 2001 and 2007. These support activities, which included 
scientific experiments and facility operations and maintenance, totaled 
over $1 billion. 

Because of three major constraints on pit manufacturing operations at 
LANL, NNSA will not be able to substantively increase its current pit 
manufacturing capacity for the foreseeable future. Specifically, GAO 
found that LANLï¿½s building for performing analytical chemistry, which 
deals with the separation and identification of the components in a pit 
sample, has major operational and structural limitations. LANLï¿½s 
ability to store pits and associated waste is also constrained by 
limited vault storage space. Finally, a lack of available floor space 
in LANLï¿½s main nuclear facility limits its ability to install a large-
scale, efficient production line for manufacturing pits. 

NNSAï¿½s plans for future pit manufacturing are still being developed 
and, as a result, no reliable cost estimates exist. Originally, NNSA 
and the Department of Defense (DOD) had planned to develop the 
capability to produce RRW pits beginning about 2014, pending the 
outcome of a RRW design definition and cost study in 2008. However, in 
fiscal year 2008 all of NNSAï¿½s RRW funding was eliminated. While NNSA 
and DOD continue to support the RRW program, in the short run, NNSA 
plans to maintain the existing pit manufacturing capability at LANL. 
Over the long term, NNSA is planning, with DODï¿½s concurrence, to 
upgrade the existing LANL facility to achieve a production capacity of 
up to 80 pits per year. However, NNSA has not established a cost and 
schedule baseline to support its projected effort. 

What GAO Recommends: 

GAO is making two recommendations to the Administrator of NNSA to 
ensure that NNSA establishes a cost and schedule baseline to support 
future pit manufacturing operations. NNSA did not specifically comment 
on GAOï¿½s recommendations but provided general comments on the report. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-593]. For more 
information, contact Gene Aloise at (202) 512-3841 or [email protected]. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

NNSA Met Its Cost and Schedule Goals but Did Not Establish Clear, 
Consistent Goals for the Number and Type of W88 Pits It Planned to 
Produce: 

Several Factors Constrain NNSA's Ability to Increase Its Pit 
Manufacturing Capacity: 

NNSA Has Not Established a Cost and Schedule Baseline for Its Future 
Pit Manufacturing Mission: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Comments from the National Nuclear Security Administration: 

Appendix II: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Current U.S. Nuclear Weapon Types: 

Table 2: Costs for Activities That Directly Supported the Pit 
Manufacturing Mission at LANL, Fiscal Years 2001-2007: 

Table 3: Examples of Costs for Activities That Supported the Pit 
Manufacturing Mission, Fiscal Years 2001-2007: 

Table 4: Description of Programmatic Areas Occupying Space in PF-4: 

Table 5: Estimated Costs of Other Construction Projects That Will 
Support a Variety of Missions, Including Pit Manufacturing, at LANL: 

Figures: 

Figure 1: Major Phases of Pit Manufacturing at LANL: 

Figure 2: Percentage of Space in PF-4 Occupied by Various Programs as 
of September 1, 2007: 

Abbreviations: 

ARIES: Advanced Recovery and Integrated Extraction System: 

CMR: Chemistry and Metallurgy Research building: 

DOD: Department of Defense: 

DOE: Department of Energy: 

LANL: Los Alamos National Laboratory: 

MOX: mixed-oxide: 

NNSA: National Nuclear Security Administration: 

PF-4: Plutonium Facility-4 building: 

RRW: Reliable Replacement Warhead: 

TA-50: Technical Area-50: 

TA-54: Technical Area-54: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

May 23, 2008: 

The Honorable Peter Visclosky: 
Chairman: 
The Honorable David Hobson: 
Ranking Member: 
Subcommittee on Energy and Water Development: 
Committee on Appropriations: 
House of Representatives: 

The National Nuclear Security Administration (NNSA), a separately 
organized agency within the Department of Energy (DOE), is responsible 
for managing the nation's stockpile of nuclear weapons.[Footnote 1] As 
part of its mission, NNSA is responsible for manufacturing a key 
nuclear weapon component for use in the stockpile. This component, 
known as a "pit," is manufactured using a man-made radioactive element 
called plutonium and is needed to begin the chain reaction in a nuclear 
weapon. Different weapons systems use different types of pits. Pits 
that can be used in the stockpile, known as war reserve pits, must meet 
stringent specifications and be certified[Footnote 2] by NNSA's nuclear 
weapons laboratories. Consequently, the capability to produce war 
reserve pits is critical for replacing pits that are removed from 
existing warheads for surveillance testing or other purposes. Other 
types of pits, such as pits that are destructively tested as part of 
production quality control, may not be required to meet the same 
standards. 

DOE lost its capability to manufacture pits when it ceased operations 
at DOE's Rocky Flats Plant in Colorado in 1989 because of environmental 
and regulatory concerns. At that time, Rocky Flats was manufacturing 
war reserve pits for the W88 warhead, which is used on submarine- 
launched ballistic missiles. In December 1996, DOE designated the Los 
Alamos National Laboratory (LANL) as the site for reestablishing the 
capability to manufacture pits. Specifically, DOE's original goals for 
the pit manufacturing mission were to (1) reestablish the capability to 
manufacture war reserve pits for the W88 warhead by fiscal year 2001 
and demonstrate the capability to produce all pit types for the 
enduring stockpile, (2) establish a manufacturing capacity of 10 pits 
per year by fiscal year 2001 and expand to a capacity of up to 50 pits 
per year by fiscal year 2005, and (3) develop a contingency plan for 
the large-scale manufacturing of pits (i.e., 150-500 pits per year) at 
some other DOE site or sites. 

In meeting this new mission, LANL faced constraints not faced at the 
Rocky Flats Plant. Historically, DOE conducted underground nuclear 
tests to ensure that the nuclear warhead, including the pit, would 
perform as required. Now, however, the safety and reliability of 
today's nuclear stockpile, including newly manufactured pits, must be 
maintained without the benefit of underground nuclear testing because 
the United States has maintained a moratorium on such testing since 
1992. In addition, LANL had to replicate pit manufacturing processes 
used at the Rocky Flats Plant in a manner compliant with current 
environmental and safety standards. 

In November 1998, we reported on DOE's plans for reestablishing the pit 
manufacturing mission at LANL.[Footnote 3] We found that DOE had 
revised its original 1996 goals for pit manufacturing capacity and 
instead planned to have an interim capacity of only 20 pits per year 
online by fiscal year 2007. DOE estimated that the total costs for 
establishing and operating its pit manufacturing mission would be over 
$1.1 billion for fiscal years 1996 through 2007. However, we found that 
this estimate did not include over $490 million in total costs for 
other activities--such as construction-related activities at various 
LANL nuclear facilities--that were needed to support the production of 
pits, as well as a wide variety of other defense-related activities. In 
addition, we found that DOE had done little to develop a contingency 
plan for the large-scale manufacturing of pits. 

We also found that the Department of Defense (DOD) and DOE had 
discussed, but not resolved, important issues regarding DOE's planned 
pit manufacturing capacity. DOD is responsible for implementing the 
U.S. nuclear deterrent strategy, which includes establishing the 
military requirements associated with planning for the stockpile. In 
this context, the Nuclear Weapons Council is responsible for preparing 
the annual Nuclear Weapons Stockpile Memorandum, which specifies how 
many warheads of each type will be in the stockpile.[Footnote 4] We 
found that officials from various DOD organizations, including U.S. 
Strategic Command and the Department of the Navy, had expressed concern 
that DOE's plans for pit manufacturing capacity would not be sufficient 
to meet the stockpile's needs. Specifically, these DOD organizations 
had conducted preliminary analyses of the capacity needed to support 
the stockpile. On the basis of these analyses, some DOD officials 
believed that the stockpile's needs exceeded the interim capacity of 20 
pits per year planned for LANL, or even a capacity of 50 pits per year 
that DOE indicated it might establish in the future. 

NNSA currently funds the pit manufacturing mission through the Pit 
Manufacturing and Certification Campaign, which includes funding for 
both the manufacture and the certification of pits at LANL and for 
related activities at other supporting locations, such as the Lawrence 
Livermore National Laboratory.[Footnote 5] According to NNSA data, over 
$234 million was spent on these activities in fiscal year 2007, and 
NNSA plans to spend almost $214 million in fiscal year 2008. At LANL, 
pit manufacturing takes place within the Plutonium Facility-4 building, 
known as PF-4, which was constructed in 1978 as a multiuse research and 
development facility. LANL employs approximately 430 full-time 
equivalent employees associated with the pit manufacturing program, 
including employees associated with pit manufacturing operations at PF- 
4 and the manufacture of non-nuclear pit components at other 
facilities. 

Several key events over the past 6 years have affected NNSA's plans for 
pit manufacturing. 

* In May 2002, the Secretary of Energy approved the start of design 
work for a large-scale manufacturing plant called the Modern Pit 
Facility. This facility was designed to manufacture all pits in the 
enduring stockpile at a capacity of 125 pits per year. However, the 
conference report accompanying the fiscal year 2006 NNSA appropriation 
stated that it provided no funding for the Modern Pit Facility and 
directed NNSA to focus on improving its manufacturing capability at 
LANL. As a result, NNSA suspended the Modern Pit Facility project 
indefinitely. 

* In 2005, the Nuclear Weapons Council approved the creation of a 
Reliable Replacement Warhead (RRW) program to study a new approach for 
providing a credible nuclear warhead deterrent over the long term. 
[Footnote 6] The RRW program would redesign weapon components, in 
particular the pit, to be easier to manufacture, maintain, dismantle, 
and certify without nuclear testing, potentially allowing NNSA to 
transition to a smaller and more efficient weapons complex. In March 
2007, the Nuclear Weapons Council approved a RRW design by the Lawrence 
Livermore National Laboratory to provide a replacement warhead for a 
portion of the nation's submarine-launched ballistic missiles. NNSA had 
planned to complete a detailed design definition and cost study of the 
RRW during 2008. However, the explanatory statement accompanying the 
fiscal year 2008 NNSA appropriation stated that the bill provided no 
funding for the RRW program and directed NNSA to focus on assessing a 
new strategic nuclear deterrent mission for the twenty-first century in 
order to define the associated stockpile requirements and determine the 
scope of the weapons complex modernization plans. According to NNSA 
officials, NNSA has ceased all activities associated with the RRW 
program for fiscal year 2008 but plans to continue to fund some 
elements of the RRW design for fiscal year 2009 under activities 
associated with its Directed Stockpile Work and Science Campaign 
programs. 

* Finally, in October 2006, NNSA offered a proposal to address long- 
standing problems with the condition and responsiveness of the nuclear 
weapon production facilities. Under its plan--which NNSA currently 
refers to as "Complex Transformation"--NNSA proposed to build a new, 
consolidated plutonium center at an existing DOE site that would 
replace the interim plutonium production facility at LANL. A key 
responsibility of the plutonium center would be to manufacture pits for 
a RRW-based stockpile. Although NNSA had planned to begin design work 
on the plutonium center during 2008, the explanatory statement 
accompanying the fiscal year 2008 NNSA appropriation stated that no 
funding was provided for the plutonium center and directed NNSA to 
focus on developing a modern nuclear weapons strategy, including the 
required pit production capacity defined by nuclear stockpile 
requirements. As a result, NNSA has suspended its work on the plutonium 
center. 

In this context, you asked us to determine the (1) extent to which NNSA 
achieved its major goals for reestablishing its pit manufacturing 
capability, (2) factors that currently constrain NNSA's ability to 
increase its pit manufacturing capacity, and (3) status of NNSA's plans 
for future pit manufacturing. 

In conducting our work, we met with NNSA and contractor officials; 
reviewed agency documents; and visited the pit manufacturing plant (PF- 
4) and other supporting facilities at LANL. We also visited the pit 
manufacturing facility at the United Kingdom's Atomic Weapons 
Establishment to determine its relevance to manufacturing practices at 
LANL. In addition, we performed the following work: 

* To determine the extent to which NNSA achieved its major goals for 
reestablishing its pit manufacturing capability, we interviewed NNSA 
and LANL officials; reviewed NNSA and LANL plans related to pit 
manufacturing; and analyzed NNSA and LANL data on expenditures. 

* To determine the current constraints on NNSA's ability to increase 
its pit manufacturing capacity, we interviewed NNSA and LANL officials; 
analyzed LANL data on the major constraints of each phase of the pit 
manufacturing process; and reviewed NNSA and LANL plans for addressing 
these constraints. 

* To determine the status of NNSA's plans for future pit manufacturing, 
we interviewed officials from NNSA, LANL, and the Lawrence Livermore 
National Laboratory. We reviewed NNSA and LANL's plans related to 
manufacturing pits for the RRW and other pit types, as well as the 
Nuclear Weapons Stockpile Memorandum and related Nuclear Weapons 
Council plans on the future size and composition of the stockpile. We 
also reviewed NNSA's plans for developing new pit manufacturing 
technologies and compared these plans with our previous work on 
technology readiness levels,[Footnote 7] which DOD uses for measuring 
and communicating technology readiness for first-of-a-kind technology 
applications. In addition, we consulted with an outside expert to 
obtain additional information on the adequacy of NNSA's plans for 
technology development. We visited research and development facilities 
at the Lawrence Livermore National Laboratory that are used to support 
new pit manufacturing technologies. Finally, we interviewed officials 
from the Office of the Assistant to the Secretary of Defense (Nuclear 
and Chemical and Biological Defense Programs) and the Nuclear Weapons 
Council. 

We conducted this performance audit from April 2007 to May 2008 in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. 

Results in Brief: 

NNSA achieved its major goals for reestablishing its pit manufacturing 
capability at LANL as defined by the agency in 2002. However, NNSA did 
not establish clear, consistent goals for the number of W88 war reserve 
pits it planned to produce. In addition, NNSA's cost estimate did not 
include estimates for a variety of activities that directly and 
indirectly supported the pit manufacturing mission at LANL. 
Specifically, according to NNSA officials, NNSA established the first 
complete schedule, production, and cost baseline to guide the pit 
manufacturing mission at LANL in 2002. NNSA's schedule and production 
goals were to: (1) establish a capability to manufacture 10 pits per 
year by 2007, (2) deliver one W88 war reserve pit to the stockpile by 
2007, and (3) certify LANL-produced W88 pits for use in the stockpile 
by 2007. NNSA officials said they believe that LANL exceeded its 2002 
schedule and production goals by manufacturing 11 W88 pits, 8 of which 
were war reserve pits, in fiscal year 2007. However, we found that NNSA 
did not have a clear, consistent set of production goals for 
manufacturing W88 war reserve pits. For example, while NNSA's baseline 
plan called for the production of a single W88 war reserve pit by 2007, 
other NNSA plans related to pit manufacturing called for the production 
of 10 W88 war reserve pits per year at LANL starting in 2007. 
Furthermore, when NNSA issued final requirements for the total 
production of W88 war reserve pits at LANL in February 2007, it did not 
specify the number of war reserve pits that LANL would be required to 
manufacture each year. With respect to costs, NNSA estimated that pit 
manufacturing and certification expenditures for fiscal years 2001 
through 2007 would be about $1.55 billion. According to NNSA data, 
LANL's expenditures for fiscal years 2001 through 2007 were about $260 
million under its baseline estimate. However, NNSA's cost baseline did 
not include almost $300 million in costs for a number of activities, 
such as conducting plutonium experiments to certify LANL-produced pits, 
which were directly associated with the pit manufacturing and 
certification mission for fiscal years 2001 through 2007. In addition, 
NNSA's baseline did not include some portion of over $1 billion in 
costs for other activities--including facility operations and 
maintenance, waste processing, construction, and security--that were 
needed to support the production of pits, as well as a wide variety of 
other defense-related activities, for fiscal years 2001 through 2007. 

Because of three major constraints on pit manufacturing operations at 
LANL, NNSA will not be able to substantively increase its pit 
manufacturing capacity for the foreseeable future. Specifically, we 
found the following: 

* LANL's building for performing analytical chemistry has major 
operational and structural limitations. LANL analyzes samples from the 
pits it manufactures to accurately determine their chemical composition 
and to provide assurance that a pit will meet its performance 
specifications. The Chemistry and Metallurgy Research (CMR) building, 
constructed in the early 1950s, currently houses most of LANL's 
analytical chemistry capabilities. However, the CMR building can only 
handle small amounts (i.e., less than about 200 grams) of plutonium at 
a time because of its age and deteriorating condition. Moreover, LANL 
officials discovered the existence of a seismic fault trace beneath one 
of the wings of the CMR building in the late 1990s, which has further 
complicated efforts to upgrade the building's infrastructure. 

* LANL's ability to store pits and associated waste is constrained by 
limited vault space. LANL maintains a storage vault in PF-4 that is 
used to store pits, plutonium residues, and waste material containing 
plutonium--all of which are radioactive and extremely hazardous to 
human health. However, because PF-4 was built to support research and 
development, the storage vault is not designed to store the large 
amounts of pits and waste material that result from large-scale pit 
manufacturing operations. For example, according to LANL officials, 
LANL had to temporarily cease pit manufacturing operations in August 
2007 when it ran out of room in the storage vault to store pits. 

* The lack of available floor space in the PF-4 building also limits 
LANL's ability to install a large-scale, efficient production line for 
manufacturing pits. Pit manufacturing and certification operations 
occupy about 35 percent of the available space in PF-4. The remaining 
space is used to support about eight other NNSA and DOE programs, 
including several programs that are not associated with nuclear weapons 
production. 

NNSA's plans for future pit manufacturing are still being developed 
and, as a result, no reliable cost estimates exist. Originally, NNSA 
and DOD had planned to develop the capability to produce RRW pits 
beginning around 2014, pending the outcome of an RRW design definition 
and cost study in 2008. At about the same time, the Nuclear Weapons 
Council began considering a variety of scenarios based on different 
stockpile sizes and the degree to which the stockpile would include RRW-
type warheads. However, the explanatory statement accompanying the 
fiscal year 2008 NNSA appropriation stated that the bill provided no 
funding for the RRW program. While NNSA and DOD continue to support the 
RRW program, in the short run, NNSA plans to maintain the existing pit 
manufacturing capability at LANL. Over the long term, NNSA is planning, 
with DOD's concurrence, to upgrade the existing PF-4 building to 
achieve a production capacity of up to 80 pits per year. However, NNSA 
has not established a reliable cost and schedule baseline to support 
its projected efforts. Using the best available data, we estimate that 
NNSA's plans would entail spending about $1.5 billion over the next 5 
years to continue funding activities associated with the Pit 
Manufacturing and Certification Campaign and up to $500 million to 
install a second pit manufacturing line at PF-4 by the 2014 time frame. 
In addition, we identified an additional $4 billion that NNSA plans to 
spend on activities that are needed to support the production of pits 
and other plutonium programs at LANL over the next decade. Of these 
activities, the largest single cost is associated with constructing the 
proposed CMR Replacement facility, which would house LANL's analytical 
chemistry equipment and provide a new storage vault for plutonium. 
While NNSA has not established a cost and schedule baseline for the 
construction of this facility, NNSA estimated in its fiscal year 2009 
budget request that this project could cost over $2 billion. NNSA 
officials said that NNSA does not expect to reach a final decision 
regarding the design of this facility or the expected date of operation 
until it issues a record of decision as part of its Complex 
Transformation planning effort, which is expected later in 2008. 

We are recommending that the Administrator of NNSA establish a cost and 
schedule baseline that it can use to manage future pit manufacturing 
operations in an efficient and cost-effective manner. We provided a 
draft of this report to NNSA and DOD for their review and comment. NNSA 
did not specifically comment on our recommendations but provided two 
general comments on our findings. First, NNSA stated that the pit 
manufacturing mission should not be accountable for certain costs 
directly associated with the pit manufacturing and certification 
project, such as activities at the Nevada Test Site, or the costs 
associated with support facilities, such as PF-4, because these 
facilities and their capabilities would be required to address other 
program requirements, regardless of the presence of the pit 
manufacturing program. Second, NNSA stated that the main purpose of the 
pit manufacturing and certification project was to reconstitute pit 
manufacturing with a limited manufacturing capacity. According to NNSA, 
the exact number of pits to be manufactured was immaterial to the scope 
and purpose of the project. However, we continue to believe that in 
order for NNSA to be able to successfully manage future pit 
manufacturing missions, such as those proposed in NNSA's Complex 
Transformation documents, it will need a cost baseline that accounts 
for all costs, including an appropriate portion of necessary support 
costs, as well as clear, well-defined production goals. NNSA also 
provided technical comments, which we have incorporated in this report 
as appropriate. DOD did not have any comments on our report. 

Background: 

The U.S. nuclear weapons stockpile consists of nine weapon types. (See 
table 1.) These weapons include gravity bombs deliverable by dual- 
capable fighter aircraft and long-range bombers; cruise missiles 
deliverable by aircraft and submarines; submarine-launched ballistic 
missiles; and intercontinental ballistic missiles. 

Table 1: Current U.S. Nuclear Weapon Types: 

Warhead or bomb type: B61-3/4/10; 
Description: Tactical bomb; 
Delivery system: F-15, F-16, Tornado; 
Laboratory: Los Alamos/Sandia; 
Military service: Air Force. 

Warhead or bomb type: B61-7/11; 
Description: Strategic bomb; 
Delivery system: B-52, B-2; 
Laboratory: Los Alamos/Sandia; 
Military service: Air Force. 

Warhead or bomb type: W62; 
Description: ICBM warhead[A]; 
Delivery system: Minuteman III ICBM; 
Laboratory: Lawrence Livermore/Sandia; 
Military service: Air Force. 

Warhead or bomb type: W76; 
Description: SLBM warhead[B]; 
Delivery system: D5 missile, Trident submarine; 
Laboratory: Los Alamos/Sandia; 
Military service: Navy. 

Warhead or bomb type: W78; 
Description: ICBM warhead; 
Delivery system: Minuteman III ICBM; 
Laboratory: Los Alamos/Sandia; 
Military service: Air Force. 

Warhead or bomb type: W80-0; 
Description: TLAM/N[C]; 
Delivery system: Attack submarine; 
Laboratory: Lawrence Livermore/Sandia; 
Military service: Navy. 

Warhead or bomb type: W80-1; 
Description: ALCM, ACM[D]; 
Delivery system: B-52; 
Laboratory: Lawrence Livermore/Sandia; 
Military service: Air Force. 

Warhead or bomb type: B83-0/1; 
Description: Strategic bomb; 
Delivery system: B-52, B2; 
Laboratory: Lawrence Livermore/Sandia; 
Military service: Air Force. 

Warhead or bomb type: W87; 
Description: ICBM warhead; 
Delivery system: Minuteman III ICBM; 
Laboratory: Lawrence Livermore/Sandia; 
Military service: Air Force. 

Warhead or bomb type: W88; 
Description: SLBM warhead; 
Delivery system: D5 missile, Trident submarine; 
Laboratory: Los Alamos/Sandia; 
Military service: Navy. 

Source: Nuclear Weapons Council. 

[A] ICBM = Intercontinental Ballistic Missile. 

[B] SLBM = Submarine Launched Ballistic Missile. 

[C] TLAM/N = Tomahawk Land Attack Missile/Nuclear. 

[D] ALCM = Air Launched Cruise Missile; 

ACM = Advanced Cruise Missile. 

[End of table] 

There are seven major phases associated with pit manufacturing 
operations at LANL (see fig. 1). 

* Disassembly-takes a source of plutonium (e.g., an existing pit) and 
extracts the plutonium metal. 

* Metal preparation-uses various chemical or electro-refining processes 
to remove impurities from the plutonium metal. 

* Foundry-heats up the plutonium metal and casts it into the desired 
shape. 

* Machining and inspection-removes unwanted material from the cast 
shape and inspects the machined shape for any defects. 

* Nonnuclear components-manufactures, tests, and qualifies nonnuclear 
subcomponents for pit manufacturing. 

* Assembly and joining-assembles the various pit components and 
nonnuclear components into a finished pit. 

* Nondestructive evaluation-inspects assembled pits to assure that 
final product specifications have been met. 

Figure 1: Major Phases of Pit Manufacturing at LANL: 

[See PDF for image] 

This figure is an illustration of the major phases of pit manufacturing 
at LANL. The following information is presented in flow-chart format: 

PF-4 Operations: 
1) Disassembly; 
2) Metal preparation; 
3) Foundry; 
4) Machining and Inspection; 
5) Assembly and joining; 
6) Nondestructive evaluation. 

LANL support operations: 
1) Storage: supporting Disassembly, Metal preparation, and Foundry; 
2) Liquid and solid waste management: supporting Disassembly, Metal 
preparation, Foundry, and Machining and Inspection; 
3) Analytical chemistry: supporting Metal preparation, Foundry, and 
Machining and Inspection; 
4) Nonnuclear components: supporting Assembly and joining. 

Source: GAO analysis of LANL data. 

[End of figure] 

In addition, three operations support these major phases (as shown in 
fig. 1). 

* Liquid and solid waste management-Pit manufacturing operations 
generate transuranic[Footnote 8] liquid and solid waste, which must be 
disposed of in a safe, secure manner. 

* Storage-Pits and associated waste materials from pit operations must 
be stored in a safe, secure environment to minimize their effect on 
human health and to ensure that they do not initiate a nuclear chain 
reaction. 

* Analytical chemistry-Samples are taken from pits to accurately 
determine their chemical composition and to provide assurance that a 
pit will meet its performance specifications. 

Other operations are also required to support pit manufacturing, 
including quality assurance measures (e.g., calibration of equipment), 
maintenance of infrastructure, and support of facilities. 

Pit manufacturing at LANL occurs in the PF-4 building, which was 
constructed in 1978 as a multiuse, plutonium research and development 
facility. Other pit-related facilities at LANL include the following: 

* The CMR building, which was constructed in the early 1950s, houses 
most of LANL's analytical chemistry equipment. 

* The Radioactive Liquid Waste Treatment Facility in Technical Area-50 
(TA-50), which has been in operation since 1963, processes transuranic 
liquid waste. 

* The Solid Waste Facility in Technical Area-54 (TA-54) stores 
transuranic solid waste pending disposal off site at the Waste 
Isolation Pilot Plant in New Mexico. 

* The Sigma and machine shop buildings carry out nonnuclear 
manufacturing and equipment installation. 

In addition to these facilities, the Superblock buildings at the 
Lawrence Livermore National Laboratory in California are used for 
plutonium research and development. 

NNSA oversees the pit manufacturing program at LANL through its Pit 
Manufacturing and Certification Campaign, which is composed of the 
following three subprograms: (1) Pit Manufacturing, (2) Pit 
Manufacturing Capability, and (3) Pit Certification. However, starting 
in fiscal year 2009, NNSA will transfer funding associated with the 
first two subprograms to the Directed Stockpile Work program, while 
activities associated with Pit Certification will be transferred to the 
Science Campaign program. 

NNSA Met Its Cost and Schedule Goals but Did Not Establish Clear, 
Consistent Goals for the Number and Type of W88 Pits It Planned to 
Produce: 

NNSA achieved its major goals for reestablishing its pit manufacturing 
capability at LANL as defined by the agency in 2002. Specifically, 
NNSA's schedule and production goals were to: (1) establish a 
capability to manufacture 10 pits per year by 2007, (2) deliver one W88 
war reserve pit to the stockpile by 2007, and (3) certify LANL-produced 
W88 pits for use in the stockpile by 2007. In addition, NNSA estimated 
that pit manufacturing and certification expenditures for fiscal years 
2001 through 2007 would be about $1.55 billion. NNSA officials said 
they believe that LANL exceeded its 2002 schedule and production goals 
by manufacturing 11 W88 pits, 8 of which were war reserve pits, in 
fiscal year 2007. In addition, according to NNSA data, LANL's 
expenditures related to pit manufacturing and certification activities 
for fiscal years 2001 through 2007 were about $260 million under its 
original cost estimate. However, NNSA did not have a consistent set of 
production goals for W88 pit manufacturing between 2002 and 2007 and 
never specified the number of war reserve pits that LANL would be 
required to manufacture each year. In addition, NNSA's cost estimate 
did not include almost $300 million in costs for a number of activities 
that were directly associated with the pit manufacturing and 
certification mission. Finally, NNSA's cost estimate did not include a 
portion of over $1 billion in costs for other activities that were 
needed to support the production of pits, as well as a wide variety of 
other defense-related activities, at LANL for fiscal years 2001 through 
2007. 

NNSA Met Its 2002 Schedule and Cost Goals: 

According to NNSA officials, LANL first identified the activities 
necessary to manufacture and certify a W88 pit in a 1998 project plan 
entitled, "Integrated Pit Manufacturing and Certification Program 
Plan." According to the plan, the pit manufacturing mission would 
require a total of about $1.25 billion for fiscal years 1996 through 
2007 to fund three types of activities: (1) establishing the capability 
to manufacture W88 pits, (2) construction projects to support the pit 
manufacturing mission, and (3) engineering and physics tests to certify 
the LANL-produced W88 pits. In addition, the plan contained the 
following schedule and production milestones: (1) complete the first 
W88 war reserve pit in 2001, (2) complete a W87 manufacturing 
development unit in 2002, (3) establish a capacity to produce 10 war 
reserve pits per year by 2005, and (4) establish the capacity to 
produce 20 war reserve pits per year by 2007. 

However, according to NNSA officials, NNSA recognized in 2000 that it 
needed to establish a better baseline of the cost, schedule, and scope 
needed to guide the pit manufacturing mission at LANL. As a result of 
this effort, LANL issued a pit manufacturing plan--entitled "W88 Pit 
Manufacturing and Certification Integrated Project Plan"--in March 
2001. The 2001 plan estimated that it would cost a total of about $1.55 
billion for fiscal years 2001 through 2007 to manufacture and certify a 
W88 pit. In addition, the 2001 plan contained the following milestones: 
(1) establish a capability to manufacture 10 pits per year by 2007, (2) 
certify LANL-produced W88 pits for use in the stockpile by 2009, and 
(3) deliver a war reserve W88 pit to the stockpile by 2009. However, 
according to NNSA officials, NNSA revised the last two milestones in 
2002. Specifically, NNSA moved up the milestones for LANL to deliver a 
war reserve W88 pit to the stockpile and certify LANL-produced W88 pits 
to fiscal year 2007. 

NNSA officials said that LANL exceeded its 2002 schedule and production 
goals by manufacturing a total of 11 pits during fiscal year 2007. Of 
these 11 pits: 

* NNSA plans to use 8 pits to replace existing W88 pits that will be 
taken out of the stockpile for use in its stockpile surveillance 
testing program. Specifically, surveillance testing involves 
destructive and nondestructive analysis to identify any defects or 
failures in pits. NNSA uses these tests to help maintain confidence in 
the safety and reliability of the stockpile without nuclear testing. 
According to NNSA officials, these 8 pits have been designated as war 
reserve quality. 

* NNSA plans to use 2 pits for its shelf life program, which examines 
how a pit ages over time. According to NNSA officials, these pits may, 
but are not required to, meet all of the quality standards of war 
reserve pits and, therefore, have not been designated as war reserve 
pits. 

* NNSA plans to subject 1 pit to destructive testing as part of LANL's 
manufacturing quality control. According to NNSA officials, this pit 
may, but is not required to, meet all of the quality standards of war 
reserve pits and, therefore, has not been designated as a war reserve 
pit. 

In addition, according to NNSA officials, LANL's costs related to pit 
manufacturing were less than it estimated in its 2001 plan. According 
to NNSA data, the expenditures for the pit manufacturing and 
certification elements of the Pit Manufacturing and Certification 
Campaign for fiscal years 2001 through 2007 were about $1.29 billion. 
This amount is approximately $260 million under than the cost estimate 
in NNSA's 2001 plan. 

NNSA Did Not Establish Clear, Consistent Requirements for W88 Pit 
Production: 

While LANL's 2001 plan contained goals related to a capability to 
manufacture 10 W88 pits per year and the delivery of a single war 
reserve pit to the stockpile, the 2001 plan did not define NNSA's 
requirements for the total number of war reserve W88 pits that LANL 
needed to manufacture. In that regard, the capability to manufacture 10 
W88 war reserve pits per year is different from the capability to 
produce 10 pits per year that are not of war reserve quality. According 
to NNSA officials, other types of pits, such as pits that are 
destructively tested as part of production quality control, may not 
meet the same standards and may be of lower production quality. 

NNSA only recently established final requirements for the exact number 
and type of W88 pits to be manufactured at LANL. Specifically, NNSA 
issued a memorandum in February 2007 that established a total pit 
production requirement for LANL of 31 W88 pits for the following 
purposes: 

* 18 pits will be designated as war reserve quality and will replace 
existing W88 pits in the stockpile for use in NNSA's stockpile 
surveillance testing program, 

* 7 pits will be used for NNSA's shelf life program, 

* 4 pits will be used for LANL's manufacturing quality control program, 
and; 

* 2 pits will be used as spares. 

However, the 2007 memorandum did not specify the number of war reserve 
pits that LANL would be required to manufacture each year. 

Moreover, NNSA was inconsistent in the way it communicated this goal 
internally and to Congress. For example, according to NNSA's 2002 
baseline, a key milestone for the pit manufacturing program was to 
deliver a single war reserve W88 pit to the stockpile by 2007. However, 
in accordance with NNSA policies, officials in the NNSA pit 
manufacturing program office have also issued a number of program plans 
and implementation plans since 2002. Program plans are strategic in 
nature and identify the long-term goals, high-level milestones, and 
resources needed to support a particular program over a 7-year period, 
while implementation plans establish performance expectations for the 
program and each participating site for the current year of execution. 
According to NNSA's most recent program and implementation plans for 
the Pit Manufacturing and Certification Campaign, a key objective of 
the pit manufacturing program is to establish an interim pit 
manufacturing capacity of "10 war reserve W88 pits per year" at LANL 
starting in fiscal year 2007. In addition, NNSA has established a 
number of annual performance targets for the pit manufacturing program, 
which it reports to Congress as part of its annual budget request. In 
particular, in its fiscal year 2008 congressional budget request, NNSA 
established as a performance target to produce "10 certified W88 pits" 
per year at LANL. According to NNSA, the term "certified pits" has the 
same meaning as "pits to the stockpile" or war reserve pits. 

NNSA officials in the pit manufacturing office said that it was never 
NNSA's intention that every pit produced by LANL would be designated as 
war reserve. Moreover, the officials said that there was some 
uncertainty in the beginning as to whether LANL would be required to 
manufacture any war reserve pits. However, they acknowledged the 
importance of clarifying the exact number of war reserve pits that LANL 
will required to manufacture. They said that they are more careful now 
in how they write the key milestones for the pit manufacturing program. 
For example, they said that they will write future milestones in terms 
of war reserve pits to clearly distinguish between requirements for war 
reserve pits and requirements for other types of pits. 

NNSA's Plan Did Not Include a Variety of Costs Associated with Pit 
Manufacturing: 

According to officials in NNSA's pit manufacturing office, they 
generally relied on the 2001 plan to oversee activities associated with 
the Pit Manufacturing and Certification Campaign. However, the 2001 
plan did not include cost estimates for a number of activities that 
were directly associated with the Pit Manufacturing and Certification 
Campaign. These include costs associated with the (1) support 
activities at the Nevada Test Site, (2) activities associated with the 
Pit Manufacturing Capability subprogram, and (3) activities associated 
with the design of the Modern Pit Facility, a large-scale pit 
manufacturing plant. For example, support activities at the Nevada Test 
Site included experiments with plutonium that supported LANL's pit 
certification effort. In addition, the Pit Manufacturing Capability 
subprogram supported the development of pit manufacturing processes 
necessary to establish the capability to manufacture other stockpile 
pits by fiscal year 2009. As shown in table 2, the cost for these 
activities was almost $300 million for fiscal years 2001 through 2007. 

Table 2: Costs for Activities That Directly Supported the Pit 
Manufacturing Mission at LANL, Fiscal Years 2001-2007 (Dollars in 
millions): 

Activity: Support activities at the Nevada Test Site[A]; 
Cost: $164.3. 

Activity: Pit manufacturing capability; 
Cost: $88.2. 

Activity: Modern Pit Facility; 
Cost: $43.5. 

Activity: Total costs; 
Cost: $296.0. 

Source: NNSA. 

[A] NNSA was only able to provide data on specific costs associated 
with support activities at the Nevada Test Site starting in fiscal year 
2003. 

[End of table] 

In addition, the 2001 plan did not include some portion of the costs of 
other activities that were needed to support the production of pits, as 
well as a wide variety of other defense-related activities, at LANL 
between fiscal years 2001 and 2007. These activities include (1) 
operations and maintenance of key facilities, including PF-4, CMR, and 
waste processing facilities at TA-50 and TA-54; (2) processing of waste 
material containing plutonium; and (3) physical security. Specifically: 

* Operations and maintenance includes all labor, equipment, and 
projects required to maintain the facilities as "mission capable" to 
perform programmatic tasks. In this case, the key facilities are PF-4, 
CMR, and waste processing facilities at TA-50 and TA-54. NNSA funds 
these activities using the budget category Readiness in Technical Base 
and Facilities, Operations of Facilities. In addition, NNSA provides 
funding for deferred maintenance at these facilities using the budget 
category Facilities and Infrastructure Recapitalization Program. 

* Processing of waste material from plutonium operations includes the 
cost of processing, packaging, and shipping the waste from each 
facility. For example, when liquid waste is generated by plutonium 
operations (including pit manufacturing) at PF-4, LANL transfers this 
waste to TA-50. Once this liquid waste is processed at TA-50 into solid 
waste, LANL transfers the solid waste to TA-54 for final packaging. 
Finally, this solid waste is shipped off site to the Waste Isolation 
Pilot Plant in New Mexico. 

* Physical security includes the protective forces, consisting of armed 
uniformed officers, and physical security systems--including intrusion 
detection and assessment barriers, access controls, tamper protection 
monitoring, and performance testing and maintenance of security 
systems--at the TA-55 site, which houses the PF-4 building. 

In addition, the following eight construction projects supported the 
pit manufacturing mission, as well as other LANL missions, between 
fiscal years 2001 and 2007: 

* CMR Upgrades project-activities associated with upgrading various 
infrastructure systems at CMR, including ventilation, fire, and 
emergency lighting controls. 

* CMR Replacement project-activities associated with the planned 
construction of a replacement for the CMR building. 

* TA-55 Reinvestment project, Phase I-activities associated with 
upgrading the major facility and infrastructure systems at PF-4. 

* TA-55 Radiography Facility-activities associated with the planned 
construction of a high-energy radiography facility at TA-55. 

* Radioactive Liquid Waste Treatment Plant Upgrade project-activities 
associated with renovating and constructing new buildings associated 
with LANL's radioactive liquid waste treatment and disposal capability. 

* TRU Waste Facility-activities associated with the planned 
construction of a new transuranic solid waste facility. 

* Nuclear Materials Safeguards and Security Upgrades project, Phases I 
and II-activities associated with upgrading the security features at TA-
55. 

Table 3 provides examples, based on expenditure data provided by LANL, 
of these types of expenditures for fiscal years 2001 through 2007, 
which total over $1.3 billion. 

Table 3: Examples of Costs for Activities That Supported the Pit 
Manufacturing Mission, Fiscal Years 2001-2007 (Dollars in millions): 

Activity: Operations and maintenance of key facilities; 
Cost: $842.9. 

Activity: Waste processing; 
Cost: $116.8. 

Activity: Security[A]; 
Cost: $146.5. 

Activity: Line-item construction; 
Cost: $262.0. 

Activity: Total costs; 
Cost: $1,368.2. 

Source: LANL. 

[A] Security costs only include costs incurred at the TA-55 site for 
fiscal years 2004 through 2007. According to LANL's Security Program 
Manager, LANL did not calculate or track security costs at this level 
until 2004. 

[End of table] 

Previous pit manufacturing plans contained estimates for some of these 
types of activities. For example, the 1998 pit manufacturing project 
plan identified about $136 million in planned expenditures to support 
construction projects directly related to pit manufacturing operations 
for fiscal years 1996 through 2008. These projects were primarily 
designed to upgrade equipment and facility infrastructure at the TA-55 
site. The 1998 plan also identified about $439 million in planned 
expenditures primarily to maintain the infrastructure at the TA-55 site 
and the CMR building for fiscal years 1996 through 2008. According to 
the plan, these costs would support the execution of the pit 
manufacturing mission but were not directly attributable to pit 
production. 

LANL officials said that they recognize the importance of accurately 
tracking and accounting for these kinds of supporting costs. For 
example, one LANL official said that LANL plans to implement a new cost 
distribution model in fiscal year 2009 that will enable the laboratory 
to allocate the cost of shared infrastructure activities, such as the 
cost associated with radiological control technicians, across the 
various programs and missions that reside in TA-55 and CMR. This cost 
distribution model will use the percentage of space occupied by the 
tenant programs in TA-55 and CMR as the basis for distributing the 
shared costs. According to the model, as of September 1, 2007, the pit 
manufacturing and certification program occupied about 35 percent of 
the space in TA-55 and 30 percent of the space in CMR. However, NNSA 
pit manufacturing program officials noted that these types of costs 
support the total program portfolio at LANL, including defense-related 
and nondefense-related activities. They also said that they purposely 
did not include the costs associated with these activities in the Pit 
Manufacturing and Certification Campaign to ensure a tight focus on the 
objectives of the campaign. 

Several Factors Constrain NNSA's Ability to Increase Its Pit 
Manufacturing Capacity: 

Because of three major constraints on pit manufacturing operations at 
LANL, NNSA will not be able to substantively increase its pit 
manufacturing capacity for the foreseeable future. First, LANL's 
existing facility for performing analytical chemistry has major 
operational and structural limitations. Second, LANL's ability to store 
pits and associated waste is constrained by limited vault space. 
Finally, large-scale pit manufacturing operations are constrained by 
the lack of available floor space within the PF-4 building and by the 
facilities that process waste material containing plutonium. 

LANL's Existing Facility for Analyzing Pit Samples Has Major 
Operational Limitations: 

LANL analyzes plutonium from pit subcomponents, feed materials, and 
waste streams for a variety of purposes. These analyses provide the (1) 
data required to certify the material control and accountability of the 
plutonium feed and waste materials, (2) chemical accuracy for quality 
control of the product, and (3) assurance that the pit will meet its 
performance specifications. The CMR building, which was constructed in 
the early 1950s, houses most of LANL's analytical chemistry 
capabilities. According to LANL estimates, for each pit that is 
produced at PF-4, the pit manufacturing program generates an average of 
about 10 to 15 samples that have to be sent to CMR for analytical 
chemistry analyses. Chemists at CMR take each sample and conduct 
multiple analyses or "instrument runs." As a result, each pit generates 
an average of about 100 to 150 instrument runs at CMR. 

According to LANL estimates, CMR currently contains enough analytical 
chemistry instruments to support a pit production rate of 20 pits per 
year. However, because of several limiting factors, LANL officials 
estimate that the CMR building can only support a pit production 
capacity of between 10 to 15 pits per year. The major factor limiting 
analytical chemistry operations in CMR is the need to impose safety 
restrictions on CMR's operations that involve plutonium. In 1992, DOE 
began a planning process aimed at upgrading many of the safety, 
security, and safeguards features of CMR. Later, in 1997 and 1998, a 
series of operational, safety, and seismic issues surfaced that 
affected the long-term viability of CMR. For example, studies 
identified a seismic fault trace beneath one of the wings of the CMR 
building that increased the level of structural integrity required to 
meet current structural seismic code requirements for a Hazard Category 
2 nuclear facility.[Footnote 9] 

DOE decided that it would be too difficult and costly to correct the 
CMR building's defects by performing repairs and upgrades. Instead, DOE 
decided to perform only the upgrades necessary to ensure the safe and 
reliable operation of the CMR building through 2010. In addition, LANL 
imposed a number of restrictions on the CMR facility's operations and 
capabilities. For example, the areas within CMR that perform analytical 
chemistry analyses are limited to handling no more than approximately 
200 grams of plutonium material (equivalent to Pu-239) at a time. 
Moreover, according to LANL officials, the analytical chemistry areas 
in CMR may not be available for programmatic work for as much as 25 
percent of the time due to the age and deteriorating condition of the 
building. A final limiting factor is that the pit manufacturing program 
at LANL does not have dedicated analytical chemistry instruments within 
the CMR building. Specifically, while pit manufacturing accounts for 
almost 60 percent of the analytical chemistry work at CMR, the rest of 
the work is conducted for other programs within PF-4, including 
programs associated with NNSA's Office of Defense Nuclear 
Nonproliferation and DOE's Office of Nuclear Energy. 

LANL's Ability to Store Pits and Associated Wastes Is Constrained by 
Limited Vault Space: 

LANL maintains a storage vault in PF-4 to store old pits, newly 
manufactured pits, pit residues, and waste material containing 
plutonium. The storage vault is about 4,500 square feet in size and was 
designed to provide adequate storage for special nuclear materials in a 
research and development setting. As a result, the storage vault was 
not designed to store large amounts of pits and waste material that 
result from large-scale pit manufacturing operations. By comparison, 
the Rocky Flats Plant, which manufactured pits for DOE until 1989, had 
a storage area of about 8,000 to 10,000 square feet. 

According to LANL officials, vault space within PF-4 was one of the 
major limiting factors for pit production in fiscal year 2007. For 
example, in August 2007, LANL officials had to temporarily cease pit 
manufacturing operations because they had no more room in the vault to 
store pits. In particular, the lack of vault space has led to 
significant amount of "on-the-floor" storage of material, whereby 
materials are stored in safes on the process floor, over the past 10 
years. According to LANL officials, the vault in PF-4 is currently 
operating at 120 percent of its originally designed capacity. 

Pit Manufacturing Operations at LANL are Constrained by Lack of 
Additional Floor Space: 

PF-4 was originally designed as a research and development facility to 
support multiple DOE nuclear research programs. As a result, PF-4 
houses a variety of programs. Specifically, as shown in figure 2, 
operations related to pit manufacturing and certification occupy about 
35 percent of the available space in PF-4. Another 29 percent is used 
by the Readiness in Technical Base and Facilities program, which 
operates and maintains NNSA program facilities in a safe, secure, 
reliable, and compliant condition. In particular, this program is 
responsible for facility operations and maintenance and addressing 
environment, safety, and health issues. The remaining 36 percent of 
available space in PF-4 is used by other programs. (See table 4 for a 
description of these programmatic areas.) 

Figure 2: Percentage of Space in PF-4 Occupied by Various Programs as 
of September 1, 2007: 

[See PDF for image] 

This figure contains a pie-chart, depicting the following information: 

Percentage of Space in PF-4 Occupied by Various Programs as of 
September 1, 2007: 
Pit manufacturing and certification: 35%; 
Readiness in technical base and facilities: 29%; 
Other NNSA/DOE programs: 28%; 
Other NNSA weapons programs: 8%. 

Source: LANL. 

[End of figure] 

Table 4: Description of Programmatic Areas Occupying Space in PF-4: 

Program: Other NNSA weapons programs: Pit surveillance; 
Description: This program takes pits from the stockpile and subjects 
them to destructive and nondestructive tests to ensure that no changes 
that might affect performance are occurring in the pits. 

Program: Other NNSA weapons programs: Plutonium research and 
development; 
Description: This program supports all defense-related programs by 
maintaining the capability to address new and unusual issues that arise 
during the execution of the other plutonium-related programs. 

Program: Other NNSA weapons programs: Special recovery line; 
Description: This program processes retired stockpile components to 
recover tritium-contaminated plutonium. 

Program: Other NNSA/DOE programs: Pu-238 heat source fabrication; 
Description: This program designs and fabricates general purpose heat 
source units and radioisotope heater units for the National Aeronautics 
and Space Administration. 

Program: Other NNSA/DOE programs: ARIES/pit disassembly; 
Description: The Advanced Recovery and Integrated Extraction System 
(ARIES) disassembles legacy pits and removes and oxidizes the 
plutonium, which can be used as a feed metal for the mixed-oxide (MOX) 
fuel polishing activities described below. The purpose of the ARIES 
line is to develop and demonstrate the technologies to be used in the 
Pit Disassembly and Conversion Facility at the Savannah River Site. 

Program: Other NNSA/DOE programs: MOX fuel polishing; 
Description: This program purifies plutonium from the ARIES project to 
specifications that would allow direct use of the plutonium in the 
fabrication of MOX fuel (which could be used in a nuclear reactor). 

Program: Other NNSA/DOE programs: Oxide fuels/ceramics research and 
development; Description: This program analyzes and processes plutonium-
bearing oxides and ceramics that could be used as fuel in a nuclear 
reactor. 

Source: GAO analysis of LANL data. 

[End of table] 

Because the majority of the space in PF-4 is occupied by other 
programs, NNSA is limited in its ability to expand its pit 
manufacturing operations into other areas in PF-4. In order for the pit 
manufacturing mission to acquire new space, NNSA Office of Defense 
Programs officials have to negotiate with the departmental sponsor of 
the other programs. For example, in June 2007, the NNSA Office of 
Defense Programs signed a memorandum of agreement with the DOE Office 
of Nuclear Energy to consolidate the activities conducted by the 
ceramic fuels program into a single room, thereby freeing up an 
additional room for use by NNSA. However, because NNSA has not issued a 
record of decision on its efforts to transform the nuclear weapons 
complex, the Office of Defense Programs has not reached a decision on 
whether to make the space available for pit manufacturing operations, 
for analytical chemistry analyses, or for the consolidation of special 
nuclear materials from other sites in the nuclear weapons complex. In 
addition, it will take several years for NNSA to consolidate the 
ceramic fuels program, decontaminate the room, and install the 
necessary new gloveboxes and equipment. 

Pit Manufacturing Operations at LANL Are Also Constrained by Waste 
Processing Facilities: 

Pit manufacturing operations at PF-4 generate liquid and solid 
transuranic waste. Liquid waste is processed at the Radioactive Liquid 
Waste Treatment Facility at TA-50, which has been in operation since 
1963. This facility treats approximately 80,000 liters of transuranic 
waste a year. According to LANL officials, the facility can currently 
process enough liquid waste to support a pit capacity of about 30 pits 
per year using a single shift of operations. However, the Radioactive 
Liquid Waste Treatment Facility processes waste from PF-4, CMR, and at 
least seven other nuclear research, production, and support facilities. 
As a result, the tranuranic waste stream is influenced by multiple 
programs at LANL that support nuclear research and production and 
varies significantly in volume on a daily basis--potentially 
constraining pit capacity. 

Transuranic solid waste is placed in drums at the generating 
facilities--PF-4 being the largest source of transuranic drums at LANL-
-and sent to LANL's TA-54 area for inspection and characterization. 
This waste is ultimately shipped to the Waste Isolation Pilot Plant in 
New Mexico for final storage. According to LANL officials, the main 
limiting factor in LANL's ability to process and ship solid waste is 
its ability to stage and store drums of solid waste before they are 
shipped off-site. In fiscal year 2007, TA-55 generated about 450 drums 
of transuranic solid waste. Of this amount, roughly half came from pit 
manufacturing operations. According to LANL estimates, TA-54 can 
currently support a pit manufacturing capacity of between 20 to 30 pits 
per year. However, under an agreement with the state of New Mexico, DOE 
will close significant portions of TA-54, including operations 
involving transuranic solid waste, by 2010. NNSA has initiated a TA-50 
transuranic waste consolidation project to establish the necessary 
capabilities to handle solid waste after TA-54 is no longer available. 
According to LANL, this facility needs to be operational in the 2011- 
2013 time frame. 

In commenting on our report, NNSA officials agreed that they will not 
be able to increase LANL's pit manufacturing capacity to larger levels 
(e.g., 50 to 80 pits per year) without improvements to supporting 
facilities. However, they said that they had some flexibility to 
achieve a modest increase in LANL's pit manufacturing capacity to 
address a specific requirement for additional pits. In that regard, 
they said that they could apply more shifts, add equipment to PF-4, 
move some material out of the storage vault in PF-4, and make some 
adjustments to analytical chemistry requirements. However, NNSA 
officials did not provide any details on how many additional pits they 
would be able to produce if they performed these activities. 

NNSA Has Not Established a Cost and Schedule Baseline for Its Future 
Pit Manufacturing Mission: 

NNSA's plans for future pit manufacturing are still being developed 
and, as a result, no reliable cost estimates exist. Over the past few 
years, NNSA and DOD had planned to develop the capability to produce 
RRW pits beginning about 2014. However, the explanatory statement 
accompanying the fiscal year 2008 NNSA appropriation stated that the 
bill provided no funding for the RRW program. While NNSA and DOD 
continue to support the RRW program, in the short run, NNSA plans to 
maintain the existing pit manufacturing capability at LANL. Over the 
long term, NNSA is planning, with DOD's concurrence, to upgrade the PF- 
4 facility to achieve a production capacity of up to 80 pits per year. 
However, NNSA has not established a cost and schedule baseline to 
support its projected efforts. Using the best available data, we 
estimated that NNSA's plans entail spending several billion dollars at 
LANL over the next decade. 

NNSA Has Changed Its Strategy for Manufacturing Future Pit Types over 
the Past Few Years: 

One of NNSA's original goals for the pit manufacturing mission was to 
develop the technology and demonstrate the processes required to 
manufacture all pit types in the enduring stockpile by the end of 
fiscal year 2009. NNSA planned to achieve this milestone by first 
demonstrating the key manufacturing processes for the W87 and B61-7 
pits. However, with the creation of the RRW program, NNSA's strategy 
changed. Specifically, 

* In April 2006, NNSA issued guidance to the nuclear weapons complex to 
demonstrate the capacity to manufacture and certify an RRW by 2012. 

* In October 2006, as part of its Complex Transformation effort, NNSA 
issued a planning document[Footnote 10] describing its vision for the 
nuclear weapons complex of the future. According to the document, NNSA 
wanted to establish an RRW-based stockpile plan by the end of 2007 with 
a majority of intercontinental ballistic missile, submarine-launched 
ballistic missiles, bombs, and cruise missiles transitioning to RRW- 
types by 2030. 

* In February 2007, NNSA established a planning target of "2014 plus or 
minus two years" to produce an RRW first production unit.[Footnote 11] 
In particular, by March 2007, NNSA planned to manufacture an RRW first 
production pit by the end of fiscal year 2012. 

* In December 2007, as part of its Complex Transformation planning 
effort, NNSA issued a draft plan[Footnote 12] stating that the first 
RRW was being considered as a possible replacement for the Navy's W76 
warhead starting as early as the 2014 time frame. 

At the same time, the Nuclear Weapons Council began considering a 
variety of scenarios based on different stockpile sizes and the degree 
to which the stockpile would incorporate new RRW designs. According to 
a senior DOD official on the Nuclear Weapons Council staff, while the 
council has not issued a final decision as to the size and composition 
of the future stockpile, the council has considered how large the 
stockpile needs to be in order to maintain a sufficiently large, 
responsive manufacturing infrastructure--comprised of people and 
equipment that can be responsive to future global geopolitical events. 
In addition, the council has considered the number of warheads that 
will need to be either refurbished or replaced in the coming decades. 

However, the explanatory statement accompanying the fiscal year 2008 
NNSA appropriation stated that the bill provided no funding for the RRW 
program. NNSA and DOD officials still support the goals of the RRW 
program. For example, in recent testimony before the House Armed 
Services Subcommittee on Strategic Forces, the Commander of the U.S. 
Strategic Command stated that his agency supports the continuation of 
the RRW design definition and cost study to explore a replacement for 
aging warheads in the stockpile.[Footnote 13] However, in the short 
term, NNSA has shifted its strategy for pit manufacturing. 
Specifically, in its fiscal year 2009 budget request to Congress, NNSA 
stated that three of its key objectives for the pit manufacturing 
mission were to (1) establish the capability to manufacture replacement 
pits for warheads other than the W88, (2) improve manufacturing 
processes used to manufacture all pit types, and (3) develop the 
processes and equipment necessary to manufacture pits for future 
requirements. According to NNSA officials in the pit manufacturing 
office, their activities in 2009 will focus on continuing to 
manufacture W88 pits, documenting the processes necessary to 
manufacture other pit types, and developing the technology necessary to 
increase the capacity for pit manufacturing beyond 10 pits per year. 
Moreover, they said that the mission for the pit manufacturing program 
going forward is to maintain the existing capability and the quality 
control infrastructure to be able to manufacture whatever the DOD 
requires. 

NNSA Has Changed Its Plans for Future Pit Capacity Over the Past Few 
Years: 

NNSA's initial goals for large-scale pit manufacturing focused on the 
construction of a new production facility. For example, in May 2002, 
the Secretary of Energy approved the start of design work for a large- 
scale manufacturing plant called the Modern Pit Facility. This facility 
was designed to address the long-term pit manufacturing capability and 
capacity required to support the nuclear weapons stockpile. 
Specifically, it would be able to manufacture pits at a production 
capacity of 125 pits per year. However, the conference report 
accompanying the fiscal year 2006 NNSA appropriation stated that it 
provided no funding for the Modern Pit Facility and directed NNSA to 
focus on improving its manufacturing capability at LANL. As a result, 
NNSA suspended the Modern Pit Facility indefinitely. 

In October 2006, NNSA offered a new proposal to address the need for a 
large-scale pit manufacturing facility. Specifically, in its Complex 
Transformation plan, NNSA proposed to build a new, consolidated 
plutonium center at an existing DOE site that would replace the interim 
pit facility at LANL by 2022. As with the planned capacity of the 
Modern Pit Facility, NNSA planned to design the consolidated plutonium 
center for a production capacity of 125 pits per year to support an RRW-
type stockpile. In addition, NNSA planned to upgrade the manufacturing 
operations at LANL in order to achieve a production capacity of up to 
50 RRW pits per year by 2012. It planned to maintain this capacity at 
LANL until 2022, when pit operations at LANL would cease, and the 
consolidated plutonium center would begin operations. However, the 
explanatory statement accompanying the fiscal year 2008 NNSA 
appropriation stated that no funding was provided for the consolidated 
plutonium center and directed NNSA to focus on developing a modern 
nuclear weapons strategy, including the required pit production 
capacity defined by nuclear stockpile requirements. As a result, NNSA 
suspended work on the consolidated plutonium center. 

Since the issuance of its 2006 planning document, NNSA's strategy for 
large-scale pit manufacturing has changed. Specifically, in December 
2007, as part of its Complex Transformation planning effort, NNSA 
issued a draft plan establishing various alternatives for the future of 
its pit manufacturing mission. One alternative remained the 
construction of a consolidated plutonium center with a capacity of 125 
pits per year for a single shift of operations. However, NNSA listed as 
its preferred alternative an upgrade of the existing PF-4 building at 
LANL to produce up to 80 pits per year. According to the plan, the 
actual time frame for reaching this capacity will depend on an 
operational date for new analytical chemistry and vault storage space 
at LANL. 

DOD officials have only recently agreed to support NNSA's plan to 
manufacture up to 80 pits per year at LANL. According to the 2007 
Nuclear Weapons Stockpile Memorandum,[Footnote 14] the Nuclear Weapons 
Council stated that NNSA will need to provide a pit manufacturing 
capacity of 125 pits per year going forward. According to a senior DOD 
official on the Nuclear Weapons Council staff, the council voted on 
February 20, 2008, to support a baseline production capacity of 50 to 
80 pits per year. However, at that meeting, the council stated that 
future changes to stockpile size, military requirements, and risk 
factors may ultimately lead to a revised capacity rate. According to 
the senior DOD official, it is possible that this revised capacity rate 
will ultimately be larger than 80 pits per year. 

NNSA's Current Plans Are Draft and Do Not Contain Reliable Cost 
Estimates: 

Given the amount of uncertainty surrounding NNSA's strategy for its 
future pit manufacturing mission, NNSA's current plans have been in a 
state of flux over the past year and remain in draft. For example, LANL 
issued a draft "Pit Manufacturing Program Execution Plan" in September 
2007 to identify the scope, schedule, and budget necessary to execute 
NNSA's strategy for manufacturing RRW pits around the 2014 time frame. 
The draft plan stated that the laboratory had not completed fundamental 
planning and scheduling activities--which would include the development 
of a fully integrated, resource-loaded schedule and risk management 
assessment--to validate budget and schedule requirements. As a result, 
LANL considered its plan to be preliminary. However, when the 
explanatory statement accompanying the fiscal year 2008 NNSA 
appropriation stated that the bill provided no funding for the RRW 
program, LANL revised the plan to support an upgrade of the existing PF-
4 building to produce up to 80 pits per year, as reflected in NNSA's 
current Complex Transformation planning effort. According to NNSA 
program officials, LANL is still on track to issue a final plan by the 
summer of 2008, which will reflect the program's new strategy. However, 
they currently do not have a final baseline for the plan's cost, 
schedule, and scope. 

Using the best available data, we estimate that NNSA's current strategy 
would entail spending over $1 billion on activities directly associated 
with the pit manufacturing mission at LANL over the next 5 years. 
Specifically, according to NNSA's fiscal year 2009 budget request and 
out-year funding schedule, NNSA plans to fund the following activities 
from fiscal years 2009 through 2013: 

* Over $730 million on activities associated with pit manufacturing 
operations, and; 

* Over $258 million on activities associated with pit manufacturing 
capability, which is associated with the capability to manufacture pits 
for other warhead types beside the W88 and to develop the technology 
necessary to manufacture pits at higher rates with reduced costs. 

For fiscal year 2009, NNSA also plans to spend almost $43 million on 
activities associated with pit certification. However, because NNSA 
realigned all activities associated with the Pit Manufacturing and 
Certification Campaign in its fiscal year 2009 budget request, we were 
not able to account for the costs of these activities in NNSA's out- 
year funding schedule (from fiscal years 2010 through 2013). 

NNSA's plans also call for spending hundreds of millions of dollars to 
install a second manufacturing line for producing pits. Specifically, 
in a 2006 study,[Footnote 15] LANL estimated that it could cost up to 
approximately $500 million to install a new manufacturing line and 
upgrade the electrorefining equipment in PF-4 by the 2014 time frame. 
However, according to NNSA program officials, it could cost as much as 
$1 billion to perform the necessary research and development work, 
procure and install the necessary equipment, and upgrade the PF-4 
infrastructure, among other things. 

In this report, we previously identified four types of activities that 
are needed to support the production of pits, as well as a wide variety 
of other defense-related activities at LANL. These activities include 
(1) operations and maintenance of key facilities, including PF-4, CMR, 
and waste processing facilities at TA-50 and TA-54; (2) processing of 
waste material containing plutonium; (3) physical security; and (4) 
construction projects. 

Operations and maintenance of key facilities: According to LANL 
estimates, NNSA plans to spend about $846 million between fiscal years 
2009 and 2013 on operations and maintenance activities at PF-4, CMR, 
and waste processing facilities at TA-50 and TA-54. In addition to 
these costs, NNSA is considering a plan to extend the life of the CMR 
building beyond 2010, which is the year when the building's safety 
basis[Footnote 16] expires. According to a 2006 LANL study,[Footnote 
17] it will cost approximately $100 million to continue operations at 
CMR from 2009 to 2013. Beyond 2013, LANL estimated that it would cost 
an additional $160 million to $240 million to upgrade some of CMR's 
major systems, such as its electrical and heating systems. As a result, 
LANL estimated that it could cost between $240 million to $360 million 
to maintain the CMR building up to and beyond the 2013 time frame. 

However, in October 2007, the Defense Nuclear Facilities Safety Board, 
which monitors safety operations at CMR and other nuclear facilities, 
sent a letter to NNSA expressing concern about NNSA's plan. 
Specifically, the board stated: 

"The Board understands that LANL plans to develop a CMR facility safety 
basis for post-2010 operations, with approval and implementation of 
this new safety basis in 2009. It is unlikely that this effort will 
eliminate or mitigate the safety risks of operating the CMR facility 
beyond 2010 without significant facility upgrades or mission changes. 
This timetable leaves little time for NNSA to complete any necessary 
safety system upgrades or identify alternative strategies for meeting 
national security priorities."[Footnote 18] 

According to NNSA officials, if NNSA cannot develop a satisfactory plan 
to extend operations at CMR beyond 2010, NNSA would have to find a new 
location at LANL or LLNL to perform analytical chemistry operations to 
support pit manufacturing. They said that NNSA is still working through 
this process with the Defense Nuclear Facilities Safety Board. 

Processing of waste material containing plutonium: According to LANL 
estimates, NNSA plans to spend about $87 million for fiscal years 2009 
through 2013 to process, package, and ship transuranic waste at the 
waste processing facilities at TA-50 and TA-54. 

Physical security: According to LANL estimates, LANL plans to spend 
about $179 million on security at the TA-55 site for fiscal years 2009 
through 2013. 

Construction projects: The largest single cost is associated with the 
proposed CMR Replacement project, which would house LANL's analytical 
chemistry equipment and provide a new storage vault for plutonium and 
other special nuclear material. The CMR Replacement project has been in 
the planning stages since 2001. According to current designs, the CMR 
Replacement project will include a storage vault of about 13,000 square 
feet in size. However, the current design work did not account for 
NNSA's strategy to support a larger pit production rate of up to 80 
pits per year at PF-4. One NNSA official stated that a new design for a 
larger CMRR Replacement facility, which would include an additional 
9,000 square feet of laboratory space, could add as much as $500 
million to the total cost. 

NNSA has not established a baseline for the cost and schedule of the 
CMR Replacement project. In its fiscal year 2008 budget request, NNSA 
estimated that this project would cost over $837 million and start 
operations by the end of fiscal year 2014. However, in its fiscal year 
2009 budget request, NNSA estimated that this project could cost over 
$2 billion and did not provide a planned date for the start of 
operations. NNSA officials said that NNSA does not expect to reach a 
final decision regarding the design of this facility or the expected 
date of operations until it issues a record of decision as part of its 
Complex Transformation planning effort, which is expected later in 
2008. 

Finally, table 5 shows the costs associated with the remaining 
construction projects that will support a variety of missions, 
including the pit manufacturing mission, at LANL over the next decade. 
These costs total to over $500 million. 

Table 5: Estimated Costs of Other Construction Projects That Will 
Support a Variety of Missions, Including Pit Manufacturing, at LANL 
(Dollars in millions): 

Project and description: Nuclear materials safeguards and security 
upgrades project, phase II: selective upgrades to the physical security 
systems at the TA-55 site; 
Estimated cost: $239; 
Estimated completion date: 2011. 

Project and description: TA-55 reinvestment project: selective 
replacements and upgrades of major facility and infrastructure systems 
in PF-4; 
Estimated cost: $144; 
Estimated completion date: To be determined. 

Project and description: Radioactive liquid waste treatment facility 
upgrade: upgrades to current facility systems at TA-50; 
Estimated cost: $88; 
Estimated completion date: 2010. 

Project and description: TRU waste facilities: construction of new 
transuranic waste storage and process facilities; 
Estimated cost: $46; 
Estimated completion date: To be determined. 

Project and description: TA-55 radiography facility: construction of a 
new radiography facility at the TA-55 site to take high-energy X-ray 
pictures of pits; 
Estimated cost: $38; 
Estimated completion date: To be determined. 

Project and description: Total costs; 
Estimated cost: $555. 

Sources: GAO analysis of data from LANL's Integrated Construction 
Project Plan and NNSA's fiscal year 2009 budget request. 

[End of table] 

Conclusions: 

The capability and capacity to manufacture pits for nuclear warheads is 
important to maintaining the nation's nuclear weapons deterrent, either 
through supporting the current nuclear stockpile or producing any new 
warheads, such as the proposed RRW. As such, NNSA's reestablishment of 
a W88 pit manufacturing capability at LANL represents a positive step. 
However, NNSA's long-term strategy for the pit manufacturing mission, 
and its attendant costs and schedule, is in a state of flux. In our 
1998 report on pit manufacturing, we recommended that DOD provide DOE 
with its views on the pit manufacturing capacity needed to maintain the 
then existing stockpile. Since then, the two agencies have reached a 
decision to support a future pit manufacturing capacity of up to 80 
pits per year at LANL. However, DOD and NNSA have shifted their focus 
from the existing stockpile to a potential stockpile of new RRWs. 
Whether DOD, NNSA, and Congress commit to supporting the replacement of 
warheads in the existing stockpile or the production of RRW-type 
warheads, NNSA will need to take two key actions before it can complete 
any draft plans for pit manufacturing and project future costs and 
schedules with any precision. Specifically, building on its agreement 
with DOD, NNSA will need to establish clear, well-defined production 
goals for the type and number of war reserve pits to be produced each 
year at LANL. In addition, using these production goals, NNSA will need 
to fully account and plan for all costs associated with the pit 
manufacturing mission, including supporting costs associated with 
operation and maintenance, waste processing, security, and 
construction. Without these actions, we believe that NNSA will not have 
a sufficient baseline against which to manage future pit manufacturing 
missions. 

Recommendations for Executive Action: 

To ensure that NNSA establishes a sufficient cost and schedule baseline 
that it can use to manage pit manufacturing operations in an efficient 
and cost-effective manner, we recommend that the Administrator of NNSA 
take the following two actions: 

* Develop clear, well-defined production goals for the type and number 
of war reserve pits to be produced each year at LANL and include them 
in any plan for the future pit manufacturing mission. 

* Establish an integrated cost baseline for future pit manufacturing at 
LANL that accounts for the entire pit-manufacturing mission, including 
supporting costs associated with operation and maintenance, waste 
processing, security, and construction of supporting facilities. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to NNSA and DOD for their review and 
comment. NNSA did not specifically comment on our recommendations. 
However, NNSA provided general comments on our findings that NNSA had 
not developed complete cost estimates for the W88 pit manufacturing 
mission and that NNSA had not developed clear requirements for the 
number of W88 war reserve pits it planned to manufacture. 

With respect to the completeness of NNSA's cost estimate for W88 pit 
manufacturing, NNSA stated that the pit manufacturing mission should 
not be accountable for certain costs directly associated with the pit 
manufacturing and certification project, such as activities at the 
Nevada Test Site, or the costs associated with support facilities, such 
as PF-4, because these facilities and their capabilities would be 
required to address other program requirements, regardless of the 
presence of the pit manufacturing program. However, we note that NNSA's 
1998 pit manufacturing project plan did include both direct costs, such 
as construction costs directly related to pit manufacturing, as well as 
support costs, such as those needed to maintain the infrastructure at 
PF-4. In addition, we found that currently LANL is developing a cost 
distribution model that will allow the laboratory to allocate the cost 
of shared activities at facilities such as PF-4 and CMR. Therefore, we 
continue to believe that in order for NNSA to be able to successfully 
manage future pit manufacturing missions such as those proposed in 
NNSA's Complex Transformation documents, it will need a cost baseline 
that accounts for all costs, including an appropriate portion of the 
necessary supporting costs. 

With respect to the need for clear requirements for the number of W88 
war reserve pits NNSA planned to manufacture, NNSA stated that the main 
purpose of the pit manufacturing and certification project was to 
reconstitute pit manufacturing with a limited manufacturing capacity. 
NNSA stated that the lack of available pits to support the surveillance 
program for the W88 warhead was the near term requirement and the 
driver for the project's schedule. However, according to NNSA, the 
exact number of pits to be manufactured was immaterial to the scope and 
purpose of the project. While we agree that NNSA has successfully 
reestablished the capability to manufacture W88 pits at LANL, as we 
state in our report, and as acknowledged by NNSA officials responsible 
for the pit manufacturing program, it is important for NNSA to 
establish the exact number of war reserve pits that it plans to 
manufacture in the future. NNSA's ability to determine the specific 
number of war reserve pits it plans to produce per year is directly 
tied to decisions Congress will need to make about any future pit 
manufacturing mission. For example, a projected manufacturing capacity 
of 50 pits per year would result in a very different estimate for 
scope, cost, and schedule than a manufacturing capacity of 10 pits per 
year. Therefore, we continue to believe that NNSA needs to implement 
our recommendation that it develop clear, well-defined production 
goals. 

NNSA's comments on our draft report are included in appendix I. NNSA 
also made technical comments, which we incorporated into this report as 
appropriate. According to the Deputy Assistant to the Secretary of 
Defense for Nuclear Matters, DOD did not have any comments on this 
report. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 10 days 
from the report date. At that time, we will send copies of this report 
to the Secretaries of Energy and Defense, the Administrator of NNSA, 
and appropriate congressional committees. We also will make copies 
available to others on request. In addition, the report will be 
available at no charge on the GAO Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions on this report, 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 report. GAO staff who made major contributions to this 
report are listed in appendix II. 

Signed by: 

Gene Aloise: 
Director, Natural Resources and Environment: 

[End of section] 

Appendix I: Comments from the National Nuclear Security Administration: 

Department of Energy: 
National Nuclear Security Administration: 
Washington, DC 20585: 

April 30, 2008: 

Mr. Gene Aloise: 
Director: 
Natural Resources and Environment: 
Government Accountability Office: 
Washington, DC 20548: 

Dear Mr. Aloise: 

The National Nuclear Security Administration (NNSA) appreciates the 
opportunity to review the Government Accountability Office's (GAO) 
draft report, GAO-08-593, "Nuclear Weapons: NNSA Needs to Establish a 
Cost and Schedule Baseline for Manufacturing a Critical Nuclear Weapon 
Component." We understand that this work was performed at the request 
of the House's Subcommittee on Energy and Water Development, Committee 
on Appropriations to determine if we have achieved goals for 
reestablishing manufacturing capability, constraints associated to 
increased capacity, and the status of future manufacturing plans. 

NNSA appreciates GAO's acknowledgement that we have achieved our goals 
for establishing a manufacturing capability within the goals that we 
had established. Regarding the remainder of the report and the 
corresponding recommendations, I have attached both general and 
technical comments for your consideration while preparing GAO's final 
report. 

Should you have any questions about this response, please contact 
Richard Speidel, Director, Policy and Internal Controls Management at 
202.586.5009. 

Signed by: 

Michael C. Kane: 
Associate Administrator for Management and Administration: 

Enclosure(s): 

cc: Robert Smolen, Deputy Administrator for Defense Programs: 
Donald Winchell, Revitalization Manager, Los Alamos Site Office: 
David Boyd, Senior Procurement Executive: 
Karen Boardman, Director, Service Center: 

General Comments: 

1.NNSA Cost Estimates: The comment is made that "NNSA's cost estimate 
did not include estimates for a variety of activities that directly and 
indirectly supported the pit manufacturing mission at LANL between 2001 
and 2007", implying that full costs of the project were not identified. 
The referenced costs can be separated into two groups - supporting 
nuclear facilities and other Pit Manufacturing and Certification 
Campaign funding lines. With regard to supporting nuclear facilities, 
NNSA did not include costs for those facilities within the baseline of 
the pit manufacturing and certification project because those 
facilities and their capabilities were required to address other 
program requirements, regardless of the presence of the project. To be 
able to work with plutonium on any level requires NNSA to have the same 
supporting facilities that the pit manufacturing and certification 
project required. Funding for those facilities is identified in the 
NNSA FYNSP under Required Technical Base and Facilities (RTBF) and no 
additional funds were required to expand those facilities to meet the 
objectives of the pit manufacturing and certification project. Reliance 
upon all support facilities was documented in the March 2001 baseline 
document, "W88 Pit Manufacturing and Certification Integrated Project 
Plan". As with any project it was necessary to ensure the funding 
identified and managed was directly spent to achieve the scope and 
schedule in the baseline document. That scope and schedule was to 
"establish a near term manufacturing capability of 10 pits per year by 
2007" and deliver a certified war reserve pit to the stockpile in FY 
2007. Both were not only achieved, as the GAO Report states, but were 
achieved below costs and ahead of schedule from the original 2001 
baseline. 

The same argument applies to the other Pit Manufacturing and 
Certification Campaign elements, Pit Capability, Modem Pit Facility, 
and Nevada Test Site support. None of the Pit Capability and Modern Pit 
Facility funds were used to achieve the pit manufacturing and 
certification project scope and objectives. Pit Capability funds have 
always been used to develop new manufacturing processes for long term 
manufacturing and to ensure the capability to manufacture all pit types 
is preserved. These funds were initially directed towards supporting 
the equipment that would have been introduced into the Modern Pit 
Facility. Most recently, the same development work is now applicable to 
long term pit manufacturing within the LANL TA-55/PF-4 facility based 
upon the preferred alternative within the Complex Transformation 
Programmatic Environmental Impact Statement. With regard to the Nevada 
Test Site funding, the funding for the site, like the funding for the 
other nuclear supporting facilities cited above, is to maintain a 
minimum capability and is a necessary part of stockpile stewardship, 
regardless of the presence of the pit manufacturing and certification 
project. The funding had been in the Directed Stockpile Stewardship 
(DSW) funding line prior to 2003; however, the Pit Campaign assumed 
budget authority from 2003 to 2007 because it became the primary 
customer for the Nevada Test Site subcritical activities during that 
time frame. Subsequent to 2007, these funds have reverted back to DSW. 
While NTS activities were not identified in the 2001 baseline, a 
projectized cost baseline that included NTS support was maintained 
after 2003. The same project controls and earned value reporting were 
required consistent with the rest of the project. 

2. Number of W88 war reserve pits: The baseline scope of the Pit 
Manufacturing and Certification project, as reflected in its baseline 
document of March 2001, "W88 Pit Manufacturing and Certification 
Integrated Project Plan", was to: 

* Reestablish the capability to manufacture the W88 pit by 2003; 

* Fabricate a certifiable W88 pit in 2003; 

* Establish a capability to manufacture 10 pits per year by 2007; 

* Certify LANL-produced W88 pits for use in the stockpile by 2009 
(later moved up in schedule to 2007); and; 

* Deliver a WR pit to the stockpile in 2009 (later moved up in schedule 
to 2007). 

As reflected above, the main purpose of the project was to reconstitute 
pit manufacturing with a limited manufacturing capacity, a critical 
production capability lacking to support the stockpile, since the 
closure of the Rocky Flats Plant. The lack of available pits to support 
the surveillance program for the W88 pit was the near term requirement 
and was the driver for the project's schedule with the exact number to 
be manufactured immaterial to the scope and purpose of the project, but 
characterized through the rate of pits (10 pits per year) to be 
manufactured. The pit manufacturing and certification project, however, 
assumed for planning purposes a total production requirement based on 
historical precedence for annual surveillance requirements, laboratory 
requirements for tests, and production quality testing. The actual 
requirement, established in February 2007, through NNSA and Laboratory 
agreement, was less than the assumed planning base due to changes in 
the surveillance program requirement for the W88. 

[End of section] 

Appendix II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Gene Aloise, Director, (202) 512-3841, or [email protected]: 

Staff Acknowledgments: 

In addition to the individual named above, James Noel, Assistant 
Director; Jason Holliday; and Stephen Marchesani made significant 
contributions to this report. 

[End of section] 

Footnotes: 

[1] Title 32 of the National Defense Authorization Act for Fiscal Year 
2000 established NNSA as a separately organized agency with DOE and 
made NNSA responsible for the management and security of DOE's nuclear 
weapons, nuclear nonproliferation, and naval reactor programs. 

[2] Certification is the process through which the nuclear weapons 
laboratories establish that a particular nuclear warhead or bomb meets 
its designated military operational specifications. According to NNSA, 
the term "certified pits" has the same meaning as "pits to the 
stockpile" or war reserve pits. 

[3] GAO, Nuclear Weapons: Key Nuclear Weapons Component Issues Are 
Unresolved, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-99-
1] (Washington, D.C.: Nov. 9, 1998). 

[4] The Nuclear Weapons Council coordinates activities jointly managed 
by DOD and DOE to support the nuclear stockpile. Each year, the 
President signs a directive giving formal approval to the Nuclear 
Weapons Stockpile Memorandum, which reflects the production plan of the 
U.S. nuclear weapons complex. 

[5] Starting in fiscal year 2009, NNSA will transfer funding associated 
with the Pit Manufacturing and Certification Campaign to the Directed 
Stockpile Work and Science Campaign program areas. 

[6] The conference report accompanying DOE's fiscal year 2005 
appropriations act stated that funds appropriated were made available 
for the RRW program. H.R. Rep. No. 108-792, Div. C, at 951 (2004), 
accompanying the fiscal year 2005 Consolidated Appropriations Act, Pub. 
L. No. 108-447. 

[7] GAO, Department of Energy: Major Construction Projects Need a 
Consistent Approach for Assessing Technology Readiness to Help Avoid 
Cost Increases and Delays, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-07-336] (Washington, D.C.: Mar. 27, 2007). 

[8] Transuranic wastes can include discarded rags, tools, equipment, 
soils, or other solid materials that have been contaminated by man-made 
radioactive elements, such as plutonium. Inhaling or ingesting even 
miniscule quantities of some transuranic elements can cause cancer in 
humans. 

[9] DOE defines the CMR building as a Hazard Category 2 nuclear 
facility, which is one in which a hazard analysis identified the 
potential for significant on-site consequences. A hazard analysis is 
the determination of material, system, process, and plant 
characteristics that can produce undesirable consequences. The hazard 
analysis examines the complete spectrum of potential accidents that 
could expose members of the public, on-site workers, facility workers, 
and the environment to hazardous materials. 

[10] NNSA, Complex 2030: An Infrastructure Planning Scenario for a 
Nuclear Weapons Complex Able to Meet the Threats of the 21st Century 
(Washington, D.C.: Oct. 23, 2006). 

[11] A first production unit corresponds to phase 5 of the traditional 
nuclear weapons development and production cycle, in which NNSA and the 
nuclear weapons complex certify a weapon, initiate production, and 
implement quality control and inspection procedures. 

[12] NNSA, Draft Complex Transformation Supplemental Programmatic 
Environmental Impact Statement: Summary (Washington, D.C.: December 
2007). 

[13] Chilton, Kevin P., Commander, U.S. Strategic Command. Statement 
before Strategic Forces Subcommittee, Committee on Armed Services, 
House of Representatives, Feb. 27, 2008. 

[14] The Nuclear Weapons Council is responsible for preparing the 
annual Nuclear Weapons Stockpile Memorandum, which specifies how many 
warheads of each type will be in the stockpile over a projected period 
of time. 

[15] LANL, Alternatives for Increasing Pit Production Capacity at the 
Los Alamos Plutonium Facility (U) (Los Alamos, N.M.: Apr. 10, 2006). 

[16] A safety basis is the documented safety analysis and hazard 
controls that provide reasonable assurance that a DOE nuclear facility 
can be operated safely in a manner that adequately protects workers, 
the public, and the environment. 

[17] LANL, Options for Plutonium-Related Missions and Associated 
Facilities Between 2007 and 2022 (Los Alamos, N.M.: Oct. 10, 2006). 

[18] Defense Nuclear Facilities Safety Board letter, Oct. 23, 2007. 

[End of section] 

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