As of September 2015, NNSA’s expected costs  for its share of the LEP work were approximately $7.3 billion. Earned value  management systems measure the value of work accomplished in a  given period and compare the measured value with the planned value of  work scheduled for that period and the actual cost of work accomplished. The Management Approach for the B61- 12 LEP Informed a New NNSA Program Management Policy for Defense Programs, but Potential Challenges Remain

The B61-12 LEP’s program managers have developed a management  approach that was then used to inform a new NNSA policy that applies to  NNSA defense program management. Several officials from both NNSA and DOD characterized the B61-12  LEP’s overall program management approach as improved over the  approaches used in previous LEPs. According to NNSA and  DOD officials we interviewed, the B61-12 LEP is the first LEP to use  earned value management, a tool that may help NNSA ensure that its  work progresses on budget and on schedule. Integrated cost estimates. DOE generally agreed  with our recommendation. The new management approach that the B61-12 LEP’s program  managers have implemented, along with the new Program Execution  Guide, may help NNSA address the potential management challenges  that NNSA officials and others have identified with previous LEPs, but it is  too soon to determine whether this will be the case. NNSA and the Air Force Have Instituted a Process to Identify and Manage Risks

According to NNSA and Air Force officials, the B61-12 LEP risk analysis  and management approach uses the program’s integrated master  schedules in conjunction with a risk register, the Active Risk Manager  database. According to NNSA and Air Force officials, some of the joint risks  identified through this process have already been successfully managed. NNSA estimates  that avoiding this risk prevented a program delay that could have lasted  for more than a year and increased program costs by more than $2  million. Joint risks in the  “red” category (i.e., high risk) include risks related to the compatibility of  the B61-12 with the still-developing F-35 aircraft, the risk of temperature- related component failures in certain flight environments, and schedule  risks related to the hydrodynamic testing of certain changed nonnuclear  components. NNSA and DOD officials acknowledged the  schedule’s constraints, which they say are driven by factors including  delays in starting the B61-12 LEP because of a lengthy design study, the  effects of sequestration, and the need to complete work on the B61-12  LEP to enable NNSA to start work on planned future LEPs. In testimony  given to the Strategic Forces Subcommittee of the Senate Committee on  Armed Services in March 2015, the Nuclear Weapons Council  characterized the B61-12 LEP’s schedule as having “little, if any, margin  left.” DOD officials have testified before Congress that the B61-12 LEP  must be completed on the current schedule to ensure that the aging of  B61 legacy bombs does not affect the United States’ ability to maintain its  commitments to NATO, and DOE officials have testified that the LEP  must be completed to ensure that DOE can effectively manage other  ongoing and planned LEPs and stockpile stewardship activities. Agency Comments and Our Evaluation

We are not making new recommendations in this report. We provided a  draft of this report to DOE and DOD for review and comment. Both agencies provided  technical comments that we incorporated, as appropriate. Appendix I: Objectives, Scope, and Methodology

This report assesses (1) the Department of Energy’s (DOE) National  Nuclear Security Administration’s (NNSA) management approach for the  B61-12 Life Extension Program (LEP) and (2) the extent to which NNSA  and the Air Force are managing risks in the LEP. In  addition, we visited NNSA’s Sandia National Laboratories and Los  Alamos National Laboratory to view systems that track project activities,  cost and schedule information, and the execution of risk management  steps, as well as to meet program officials responsible for the design and  production of the B61-12 and see some of the components under  development.
Why GAO Did This Study

Weapons in the U.S. nuclear stockpile are aging. NNSA and DOD undertake LEPs to refurbish or replace nuclear weapons' aging components. In 2010, they began an LEP to consolidate four versions of a legacy nuclear weapon, the B61 bomb, into a bomb called the B61-12 (see fig.). NNSA and DOD have stated they must complete this LEP by 2024 to uphold U.S. commitments to the North Atlantic Treaty Organization. As of September 2015, NNSA and DOD estimated that the B61-12 LEP would cost about $8.9 billion.
Senate Report 113-44 included a provision for GAO to periodically assess the status of the B61-12 LEP. This report assesses (1) NNSA's management approach for the B61-12 LEP and (2) the extent to which NNSA and the Air Force are managing risks in the LEP. GAO reviewed project plans, schedules, management plans, and other documents and program data, and visited the two NNSA national laboratories—Sandia and Los Alamos—that serve as the design agencies for the LEP.

What GAO Found

The B61-12 life extension program's (LEP) managers have developed a management approach that officials from the Department of Energy's (DOE) National Nuclear Security Administration (NNSA) and the Department of Defense (DOD) regard as improved over the management approach used for past LEPs, which experienced schedule delays and cost overruns. Among other things, the B61-12 LEP is the first LEP to use earned value management, a tool that measures the planned versus actual value of work accomplished in a given period, which may help NNSA ensure that work progresses on budget and on schedule. It is also the first LEP to integrate the schedules and cost estimates for activities at all participating NNSA sites. NNSA used this new approach to inform its first Program Execution Guide for defense programs, issued in August 2014, which applies to all NNSA defense programs. NNSA's new management approach notwithstanding, the B61-12 LEP faces ongoing management challenges in some areas, including staff shortfalls and an earned value management system that has yet to be tested. The new management approach may help the LEP address these potential challenges, but it is too soon to determine whether this will be the case.
To manage risks in the B61-12 LEP, NNSA and the Air Force use a risk management database and integrated schedules to categorize risks and incorporate risk management steps in the schedules. According to NNSA and Air Force officials, some risks have already been managed in this manner. For example, NNSA estimates that making a needed material procurement in advance prevented a potential delay of more than a year and a potential cost increase of more than $2 million. Remaining risks include the risk that components may fail in certain flight environments and risks related to testing of certain nonnuclear components. NNSA is also working to ensure future compatibility with the F-35 aircraft. NNSA and Air Force officials said they will not know for several years whether steps planned to manage these risks are adequate. A constrained development and production schedule—which DOE's and DOD's Nuclear Weapons Council characterized as having “little, if any, margin left”—complicates efforts to manage risks. Factors constraining the schedule include the aging of components in current versions of the B61, delays in starting the B61-12 LEP because of a lengthy design study, the effects of sequestration, and the need to complete the B61-12 LEP so that NNSA can begin other planned LEPs. GAO will continue to monitor these issues as it assesses the LEP in later stages.

What GAO Recommends

GAO is making no new recommendations but discusses the status of prior GAO recommendations in this report. In commenting on a draft of this report, DOE generally agreed with GAO's findings and provided technical comments that were incorporated, as appropriate. DOD provided technical comments that were also incorporated, as appropriate.