In this report, we identified two areas of misalignment  between NNSA’s modernization plans and the estimated budgetary  resources needed to carry out those plans, which could result in  challenges to NNSA in affording its planned portfolio of modernization  programs. Second, the costs of some  major modernization programs—such as for nuclear weapon  refurbishments—may also increase and further strain future  modernization budgets. Misalignment between Estimates and Plans May Result in Increased Cost and Schedule Risks and Raises Affordability Concerns

As we reported in April 2017, NNSA estimates of funding needed for its  modernization plans sometimes exceeded the budgetary projections  included in the President’s planned near- and long-term modernization  budgets. With respect to the alignment of NNSA’s estimate of its budget needs and  NNSA’s internal cost range estimates, we found that NNSA’s budget  estimates were generally consistent with NNSA’s high- and low-range  cost estimates. To help NNSA put forth more credible modernization plans, we  recommended in our April 2017 report that the NNSA Administrator  include an assessment of the affordability of NNSA’s portfolio of  modernization programs in future versions of the Stockpile Stewardship  and Management Plan, such as by presenting options (e.g., potentially  deferring the start of or canceling specific modernization programs) that NNSA could consider taking to bring its estimates of modernization  funding needs into alignment with potential future budgets. DOE Has Taken Steps to Improve Contract and Project Management, but Challenges Persist, Particularly in Contract Management

The Secretary of Energy has taken several important steps that  demonstrate DOE’s commitment to improving contract and project  management. In our recent reports, we have noted progress as DOE has  developed and implemented corrective actions to identify and address  root causes of persistent project management challenges, as well as  progress in the department’s monitoring of the effectiveness and  sustainability of corrective actions. NNSA neither  agreed nor disagreed with the recommendations. Areas Where Challenges Continue to Persist

DOE’s recent efforts do not address several areas where it continues to  have shortcomings including (1) acquisition planning for its major  contracts, (2) the quality of enterprise-wide cost information available to  DOE managers and key stakeholders, (3) DOE’s need for a program  management policy, (4) how DOE’s new project management  requirements will be applied to its major legacy projects, and (5)  whistleblower protections. However, as of September 2016, DOE  has not yet implemented our recommendations. DOE Annually Spends Billions on Environmental Cleanup, but the Cost of Its Liabilities Continues to Increase

DOE also faces challenges with addressing its environmental liabilities. In  February 2017, we added the federal government’s environmental  liabilities to our High-Risk List. Specifically, we found that the federal  government’s environmental liability has been growing for the past 20  years—and is likely to continue to increase—and that DOE is responsible  for over 80 percent ($372 billion) of the nearly $450 billion reported  environmental liability. Notably, this estimate does not reflect all of the  future cleanup responsibilities that DOE may face. In January 2017, we reported that the cost estimate for DOE’s  new approach excluded the costs and time frames for key activities. As a result, the full cost of these activities is likely billions of dollars  more than what is reflected in DOE’s environmental liability. We and others have  pointed out that DOE needs to take a nation-wide, risk-based approach to  cleaning up these sites, which could reduce costs while also reducing  environmental risks more quickly. Since 1994, we have made at least 28 recommendations related to  addressing the federal government’s environmental liability and 4  recommendations to Congress to consider changes to the laws governing  cleanup activities. Of these, 13 recommendations remain unimplemented. NNSA Faces Nonproliferation Performance and Program Management Challenges

NNSA also faces challenges implementing its nonproliferation programs  under its Office of Defense Nuclear Nonproliferation (DNN). In June 2016, we found that the Nuclear Smuggling Detection and  Deterrence (NSDD) program had developed a program plan, but that  NSDD could not measure its progress towards activities and goals  because its goals were not all measurable and performance  measures were not aligned with its goals. Under this program,  NSDD may not be able to determine when it has fully accomplished  its mission and risks continuing to deploy equipment past the point of  diminishing returns. Selected GAO Products

The following is a selection of GAO’s recent work assessing the National  Nuclear Security Administration’s and the Department of Energy’s Office  of Environmental Management’s management efforts:  Nuclear Waste: Opportunities Exist to Reduce Risks and Costs by  Evaluating Different Waste Treatment Approaches at Hanford. National Nuclear Security Administration: Action Needed to Address  Affordability of Nuclear Modernization Programs.
Why GAO Did This Study

DOE's NNSA is responsible for managing the nuclear weapons stockpile and supporting nuclear nonproliferation efforts. DOE's Office of Environmental Management's mission includes decontaminating and decommissioning facilities that are contaminated from decades of nuclear weapons production.
Over the last few years, GAO has reported on a wide range of challenges facing DOE and NNSA. These challenges contribute to GAO's continuing inclusion of DOE's and NNSA's management of major contracts and projects on the list of agencies and program areas that are at high risk of fraud, waste, abuse, and mismanagement, or are in need of transformation. GAO also recently added the U.S. government's environmental liabilities to this list.
This statement is based on 13 GAO reports issued from May 2015 through May 2017 and discusses (1) challenges related to the affordability of NNSA's nuclear modernization plans, (2) the status of DOE's efforts to improve its management of contracts and projects, (3) challenges in addressing DOE's environmental liabilities, and (4) challenges facing NNSA's nonproliferation programs.

What GAO Found

The Department of Energy's (DOE) National Nuclear Security Administration (NNSA) faces challenges related to the affordability of its nuclear modernization programs. GAO found in April 2017 that these challenges were caused by a misalignment between NNSA's modernization plans and the estimated budgetary resources needed to carry out those plans. First, GAO found that NNSA's estimates of funding needed for its modernization plans sometimes exceeded the budgetary projections included in the President's planned near-term and long-term modernization budgets. Second, GAO found that the costs of some major modernization programs—such as for nuclear weapon refurbishments—may also increase and further strain future modernization budgets that currently do not anticipate these potential increases. GAO recommended in April 2017 that NNSA include an assessment of the affordability of its modernization programs in future versions of its annual plan on stockpile stewardship; NNSA neither agreed nor disagreed with that recommendation.
DOE has taken several important steps that demonstrate its commitment to improving contract and project management, but challenges persist. In recent reports, GAO has noted progress as DOE has developed and implemented corrective actions to identify and address root causes of persistent project management challenges and progress in its monitoring of the effectiveness and sustainability of corrective actions. However, DOE's recent efforts do not address several areas of contract and project management where the department continues to struggle. GAO has made several recommendations related to these issues, many of which DOE has not yet implemented.
DOE also faces challenges with addressing its environmental liabilities—the total cost of its cleanup responsibilities. In February 2017, GAO found that DOE was responsible for over 80 percent ($372 billion) of the U.S. government's estimated $450 billion environmental liability. However, this estimate does not reflect all of DOE's cleanup responsibilities. For example, in January 2017, GAO found that the cost estimate for DOE's proposal for separate defense and commercial nuclear waste repositories excluded the costs and time frames for key activities, and therefore full costs are likely to be billions of dollars more than DOE's reported environmental liabilities. To effectively address cleanup, GAO and other organizations have reported that DOE needs to take a nation-wide, risk-informed approach, which could reduce long-term costs as well as environmental risks more quickly. Since 1994, GAO has made at least 28 recommendations to address the federal government's environmental liabilities and 4 suggestions to Congress to consider changes to the laws governing cleanup activities. Of these, 13 recommendations remain unimplemented.
Finally, NNSA faces challenges in implementing its nonproliferation programs. For example, in June 2016, GAO found that NNSA's Nuclear Smuggling Detection and Deterrence program had developed a program plan, but NNSA could not measure progress because not all of the program's goals were measurable, and performance measures were not aligned with the goals. As a result, NNSA may not be able to determine when the program has fully achieved its mission. GAO has made several recommendations related to NNSA's nonproliferation programs, some of which NNSA has yet to implement.

What GAO Recommends

GAO is not making any new recommendations in this statement. GAO has suggested that Congress consider taking certain actions and that DOE continue to act on the numerous recommendations made to address these challenges. GAO will continue to monitor DOE's implementation of these recommendations.