Total Budget Estimates for Modernization Increased Compared with 2014 Plans

NNSA’s 2015 budget estimates for modernization total $293.4 billion over  25 years, an increase of $17.6 billion (6.4 percent) from the $275.8 billion  in estimates provided in 2014. These budget estimates are provided in  four program areas: stockpile, infrastructure, ST&E, and other weapons  activities. Within these four program areas, we found that some budget estimates  for individual programs changed more significantly from 2014 to 2015  than the total budget estimates changed—decreasing by as much as 31  percent and increasing by as much as 71 percent—because of changes  in (1) programs’ scope, (2) production schedules, (3) the methodology  used to develop certain budget estimates, and (4) budgetary structure. Near-Term Budget Estimates for Two of Three Life Extension Programs Align with NNSA’s 2015 Plans

The 5-year budget estimates contained in the 2015 budget materials for  two of the three LEPs that NNSA considers major modernization efforts  align with NNSA’s 2015 plans for these two programs. We  found that, compared with the prior year’s budget materials, which did not  include a high-to-low cost range for these LEPs, the 2015 budget  materials did include such a range. In each year of the 2015 FYNSP,  budget estimates for the cruise missile LEP are below the low point of the  program’s internally developed cost range, which is the minimum funding  level that would be consistent with the internal cost estimate. Including  information in future versions of budget materials that explicitly identify  potential risk to the achievement of program objectives and goals—such  as increased program cost and schedule delays, which may result from  shortfalls in LEP budget requests compared with internal cost estimates— would improve the transparency and quality of information available to  congressional decision makers. In addition, our prior work has  emphasized the importance of transparency in federal agencies’ budget  presentations because such information helps Congress have a clear  understanding of how new funding requests relate to funding decisions for  existing projects with continuing resource needs. NNSA’s Budget Estimates for Infrastructure Are Not Adequate to Stop the Growth of Its Deferred Maintenance Backlog, and NNSA Is Taking Steps to Improve Information to Better Prioritize Investment

NNSA’s infrastructure budget estimates included in its 2015 budget  materials are not adequate to address its reported $3.6 billion deferred  maintenance backlog, and the deferred maintenance backlog will  continue to grow. One reason the backlog will continue to grow is that the  amounts in 2015 budget estimates to address the problem fall below DOE  infrastructure investment benchmarks for maintenance or recapitalization. NNSA’s Budget Estimates for Maintaining and Recapitalizing Its Aging Nuclear Infrastructure Fall Below DOE’s Planning Benchmarks

the National Nuclear Security Administration  as a manufacturing facility for nuclear  weapons components. NNSA’s 2015 budget materials continue to demonstrate  weaknesses, particularly with respect to (1) internal cost estimates for  LEPs that are not fully supported by near-term budget estimates, which  could affect the programs’ cost and schedule, and (2) near-term budget  estimates for maintenance and recapitalization that do not achieve DOE  benchmarks for infrastructure investment, which could impair NNSA’s  ability to meet its goal of stopping the growth in its reported $3.6 billion  deferred maintenance backlog. Providing information in the budget  materials on the potential risks to the achievement of program objectives  when near-term budget estimates are not aligned with plans would  improve the transparency of budget materials and benefit Congress  during appropriation deliberations. Recommendations for Executive Action

To improve transparency in future NNSA budget materials so that they  are more useful for congressional decision makers, we recommend that  the Administrator of NNSA take the following three actions:  In instances where NNSA’s internal cost estimates for a life extension  program suggest that additional funding may be needed beyond what  is included in the 5-year budget estimates to align with the program’s  plan, identify the amount of the shortfall in its budget materials and,  what, if any, effect the shortfall may have on the program’s cost and  schedule or the risk of achieving program objectives. Appendix I: Objectives, Scope, and Methodology

Our objectives were to (1) identify the extent to which the National  Nuclear Security Administration’s (NNSA) budget estimates for  modernizing the nuclear security enterprise changed between the 2015  budget materials and the prior year’s material, (2) assess the extent to  which NNSA’s budget estimates for its current major modernization  efforts align with plans, and (3) assess the extent to which NNSA’s 2015  budget estimates for modernizing the nuclear security enterprise address  its stated goal of stopping the growth of the deferred maintenance  backlog. NNSA’s budget materials are composed of two  key policy documents that are issued annually: the agency’s budget  justification, which contains estimates for the 5-year Future-Years Nuclear  Security Program (FYNSP), and the Stockpile Stewardship and  Management Plan (SSMP), which provides budget estimates over the  next 25 years. A list of related GAO products is included at the end of this report. President’s policy priorities. Science, Technology, and Engineering Capabilities  Nuclear Weapons: National Nuclear Security Administration Needs to  Ensure Continued Availability of Tritium for the Weapons Stockpile.
Why GAO Did This Study

Nuclear weapons continue to be an essential part of the nation's defense strategy. The end of the cold war resulted in a shift from producing new nuclear weapons to maintaining the stockpile through refurbishment. Also, billions of dollars in scheduled maintenance for nuclear weapons infrastructure has been deferred. The 2010 Nuclear Posture Review identified long-term stockpile modernization goals for NNSA that include (1) sustaining a safe, secure, and effective nuclear arsenal and (2) investing in a modern infrastructure.
The National Defense Authorization Act for Fiscal Year 2011 included a provision for GAO to report annually on NNSA's nuclear security budget materials. This report (1) identifies changes in estimates to the 2015 budget materials from the prior year's materials, and (2) assesses the extent to which NNSA's 2015 budget estimates align with plans for major modernization efforts, and (3) addresses the agency's stated goal of stopping the growth of its deferred maintenance backlog.
GAO analyzed NNSA's 2014 and 2015 nuclear security budget materials, which describe modernization plans and budget estimates for the next 25 years, and interviewed NNSA officials.

What GAO Found

The National Nuclear Security Administration's (NNSA) 25-year budget estimates for modernizing the nuclear security enterprise in its fiscal year 2015 budget materials total $293.4 billion, which is an increase of $17.6 billion (6.4 percent) compared with the prior year's materials. NNSA's budget materials are (1) its 2015 congressional budget justification that includes the President's fiscal year budget request and information about 4 additional years of planned budget requests, and (2) its update to its Stockpile Stewardship and Management Plan that includes NNSA's long-range, 25-year plans for sustaining the stockpile and modernizing the nuclear security enterprise. Congress funds NNSA's 2015 budget estimates in four program areas: stockpile; infrastructure; science, technology, and engineering capabilities; and other weapons activities. GAO found that some budget estimates for individual programs within these four areas changed more significantly from 2014 to 2015 than the total budget estimates changed. For example, stockpile budget estimates to refurbish nuclear weapons through life extension programs (LEP) decreased by 31 percent in part due to changes in programs' production schedules. In contrast, infrastructure budget estimates for construction projects increased by 71 percent largely because the estimates were more complete than those GAO evaluated in 2014.
For NNSA's major modernization efforts—which include LEPs that are not in full scale production and major construction projects—near-term budget estimates for two of three LEPs align with plans, but estimates for construction projects are too preliminary to assess alignment. NNSA's near-term budget estimates to refurbish its B61 bomb and W88 warhead align with its plans because annual budget estimates reflect internally developed estimated cost ranges for the programs. However, the near-term budget estimates for the cruise missile LEP are not aligned with NNSA's 2015 plans because annual budget estimates are below the low point of the program's internally developed estimated cost range. A 2008 internal review of NNSA's project management stated that failure to request full funding can result in risks to programs' goals such as increased program costs and schedule delays. GAO's prior work has emphasized the importance of transparency in federal agencies' budget presentations because such information helps Congress understand how new funding requests relate to program decisions. Including information in future versions of budget materials on the potential risks to achieving LEPs' goals when funding requests are not aligned with plans would improve the quality of budget materials.
NNSA's infrastructure budget estimates are not adequate to address its reported $3.6 billion deferred maintenance backlog, and the backlog will continue to grow. One reason the backlog will continue to grow is that the 2015 budget estimates to address the problem fall below DOE infrastructure investment benchmarks for maintaining and recapitalizing existing facilities, activities that can reduce deferred maintenance. NNSA's goal to stop the growth of the backlog is stated in its budget materials, but these materials do not identify that budget estimates for maintenance and recapitalization fall below DOE's infrastructure investment benchmarks. Including information in future versions of budget materials on the potential risks to the achievement of infrastructure goals if budget estimates fall below internal benchmarks would improve the transparency of budget materials.

What GAO Recommends

GAO recommends improving the transparency of future budget materials by identifying potential risks to the achievement of program goals if budget estimates are lower than plans suggest are necessary. NNSA agreed with GAO's recommendations and outlined actions to address them.