	NNSA Faces Challenges Implementing Its Plans to Modernize the Nuclear Security Enterprise

NNSA manages a complex, decades-long effort to modernize the nuclear  security enterprise. In its recent report, the Augustine-Mies Panel  observed that NNSA’s SSMP, which is intended to communicate long- range plans and cost estimates, has varied from year to year in the costs  and schedules for the delivery of several major life extension programs  (LEP) and nuclear facilities, and the Panel concluded that the lack of a  stable, executable plan for modernization is a fundamental weakness for  NNSA. that NNSA’s stockpile budget estimates from 2014 through 2031  increased by about $27 billion compared with the 2012 stockpile  budget estimates for the same time period. We recommended that NNSA include in its  estimates at least a range of budget estimates for known future  expenses for large capital projects even when a fully developed cost  estimate had not been developed. NNSA Does Not Fully Understand the Causes of Its Contract and Project Management Problems and Appears Resistant to Implementing GAO’s Recommendations

In our February 2015 update to our high risk list, we expressed concern  that DOE, including NNSA, may not have adequately identified the root  causes of its contract and project management challenges. The report also included 21 recommendations to address  continuing project management challenges. As we noted in our February 2015 update to our high risk list,long history of identifying additional corrective actions suggests that it has  not always fully understood the causes of its contract and project  management problems. However, DOE did not specify a timeline for  implementing many of these recommendations, indicating to us DOE’s  lack of urgency or commitment in correcting these issues. A reliable analysis is critical to ensuring that key capital  asset and program decisions will both meet mission needs and be cost- effective. NNSA’s DNN Programs Have Made Some Progress Securing Vulnerable Nuclear Material, but Significant Challenges Remain

Our reports have found that DNN has made some progress in securing  vulnerable nuclear material. In addition, in September 2011, we found that DNN and U.S. agencies  faced significant challenges in accounting for and ensuring the security of  U.S. weapons-usable nuclear materials as a result of foreign nuclear  research and commercial power activities. NNSA disagreed  with our recommendations. We recommended that NNSA  develop and maintain useful and reliable measures to assess the  performance of the initiative. Finally, the effectiveness of NNSA’s nuclear nonproliferation mission  depends in part on the agency’s plutonium disposition program, and we  found in 2014 NNSA faces challenges in this regard. NNSA Faces Challenges in Its Governance of the Nuclear Security Enterprise

The Augustine-Mies’s Panel’s report highlighted the challenges NNSA  faces in its governance of the nuclear security enterprise. The issues  and concerns identified in this report appear to be consistent with those  that we have previously described in our work. As noted earlier, our  work has found that NNSA’s long-term budget estimates for the nuclear  security enterprise have continued to change from year to year and that  some assumptions in the SSMP may be unrealistic. In addition, consistent with our 2015 high risk update, the Augustine-Mies  Panel found that NNSA’s capital projects have been a continuing source  of cost overruns and schedule delays. The panel noted that these have  significantly undermined the agency’s credibility and recommended that  DOE strengthen its efforts to develop independent cost and resource  analysis capabilities and that leadership employ a rigorous analysis of  alternatives early in the decision process as the basis for assessing and  validating program requirements. Modernizing the Nuclear Security Enterprise: Observations on NNSA’s  Options for Meeting Its Plutonium Research Needs. Department of Energy: Observations on DOE’s Management Challenges  and Steps Taken to Address Them. Nuclear Weapons: NNSA Needs to Improve Guidance on Weapon  Limitations and Planning for Its Stockpile Surveillance Program. Nuclear Nonproliferation: Action Needed to Address NNSA’s Program  Management and Coordination Challenges. Implemented and Sustained. National Nuclear Security Administration: Additional Actions Needed to  Improve Management of the Nation’s Nuclear Programs.
Why GAO Did This Study

NNSA is responsible for managing the nation's nuclear security missions, which include ensuring a safe, secure, and reliable nuclear deterrent; achieving reductions in the nuclear weapons stockpile; and supporting nuclear nonproliferation efforts (known as DNN programs). NNSA executes its missions at eight sites that make up the nuclear security enterprise.
GAO's reports have highlighted challenges NNSA has faced for several years. These challenges contribute to GAO's continuing inclusion of NNSA's management of contracts and major projects on GAO's list of agencies and program areas that are high risk due to their vulnerabilities to fraud, waste, abuse, and mismanagement, or are in most need of transformation. A recent series of commissions on NNSA's management, governance, and structure—such as the Augustine-Mies Panel—highlights the importance of NNSA's mission.
This testimony is based on eight prior GAO products issued from December 2010 through February 2015 and discusses NNSA's (1) plans to modernize the nuclear security enterprise, (2) understanding of the causes of contract and project management problems and the extent to which it is has implemented GAO's related recommendations, (3) DNN programs' status in securing vulnerable nuclear materials, and (4) challenges in its governance of the nuclear security enterprise.
GAO is not making new recommendations in this statement.

What GAO Found

The National Nuclear Security Administration (NNSA) faces challenges implementing its plans to modernize the nuclear security enterprise. In its November 2014 report, the Augustine-Mies Panel observed that NNSA's Stockpile Stewardship Management Plan, which is intended to communicate long-range plans and cost estimates, has varied from year to year in the costs and schedules for the delivery of several major life extension programs and nuclear facilities. The panel concluded that the lack of a stable, executable plan for modernization is a fundamental weakness for NNSA. Similarly, GAO found in 2013 that the Stockpile Stewardship Management Plan has shown changes in long-term budget and schedule estimates from year to year—for example, NNSA's stockpile budget estimates for 2014 through 2031 increased by about $27 billion compared with the 2012 stockpile budget estimates for the same time period. GAO recommended that NNSA include in future plans a range of estimates that reflects projects that the agency knows are needed. NNSA agreed and appears to be implementing this recommendation.
As noted in GAO's 2015 high risk report, NNSA has a long history of identifying corrective actions and declaring them successfully resolved, only to follow with the identification of additional actions. As GAO has reported, this suggests that NNSA does not have a full understanding of the root causes of its contract and project management challenges. In its prior reports, GAO has made numerous recommendations to correct NNSA's project management problems. While NNSA has initiated some actions and made some progress, the agency has not taken action on many of these recommendations, including improving cost estimating capabilities and employing a rigorous analysis of alternatives to ensure that key capital asset and program decisions will both meet mission needs and be cost-effective. This suggests a lack of urgency or commitment on DOE's part to address identified challenges.
NNSA's Defense Nuclear Nonproliferation (DNN) programs have made progress securing vulnerable nuclear materials, but significant challenges remain. For example, GAO found in 2011 that NNSA faced challenges accounting for and ensuring the security of U.S. weapons-usable nuclear materials. GAO recommended that NNSA improve its process for securing these materials. Although NNSA disagreed, it has since taken some steps to prioritize its efforts. In addition, prior GAO work has raised concerns about the effectiveness of DNN program management and implementation, particularly with regard to execution of its plutonium disposition program, performance measures, and sustainability.
NNSA faces challenges in its governance of the nuclear security enterprise. The Augustine-Mies Panel highlighted such challenges in its report. The report addresses issues and concerns that GAO has also previously described in its work. For example, consistent with GAO's 2015 update to its high risk list, the Panel noted that NNSA major projects have been a continuing source of program schedule delays and cost overruns and that, as a result, NNSA needs to strengthen its cost estimating capabilities. The report also recommended that NNSA leadership employ a rigorous analysis of alternatives early in the decision process as the basis for assessing and validating program requirements, which is consistent with past GAO recommendations.