SENATOR: COST OF B61 REFURBISHMENT SKYROCKETS TO AS MUCH AS
$10 BILLION

The National Nuclear Security Administration’s refurbishment of the B61 nuclear bomb is going to cost a whole lot more than expected, but there appears to be a disagreement over just how much more. Sen. Dianne Feinstein (D-Calif.) revealed at a Senate Energy and Water Appropriations Subcommittee hearing this week that the cost to refurbish four versions of the B61 bomb has nearly doubled over the last year, with competing estimates by the NNSA and the Department of Defense suggesting it could cost between $7.9 billion and $10 billion. Feinstein, the chair of the panel, said she was briefed July 23 by the NNSA about the cost of the life extension program, which a year ago was expected to cost $3.8 billion, and told that the agency was currently projecting that the effort would cost $7.9 billion.

The NNSA has reviewed the cost of the life extension program since the Nuclear Weapons Council settled on a refurbishment plan, which was believed to represent a “middle ground” approach that didn’t include some expensive technological additions and was deemed more affordable than some other options. At the same time, the Department of Defense’s Cost Assessment and Program Evaluation group performed its own assessment of the cost, coming up with an estimate more than $2 billion higher than the agency. A subcommittee staffer said the NNSA and CAPE “had some disagreements on assumptions” that led to the vastly different estimates. “We have to find a way to stop this from happening and that’s what we are now trying to do,” Feinstein said after the hearing, during which she reiterated her longstanding concerns about the rising costs of NNSA projects.

Increased Price Tag Encroaching on Priorities

The cost of the life extension program has been a significant issue for some time. The Nuclear Weapons Council didn’t sign off on a path forward for the refurbishment until earlier this year, and even then, it only gave a tentative nod to further analyze the cost of the effort and proceed with engineering development, which has yielded the current estimates. In the meantime, the NNSA announced in February that it was moving the deadline for a First Production Unit on the life-extended B61 back two years, to 2019, due to budget and schedule issues. The Obama Administration also deferred work on the multibillion- dollar Chemistry and Metallurgy Research Replacement-Nuclear Facility planned for Los Alamos National Laboratory due to budget issues, prioritizing the B61 over the massive facility. It said the deferral of CMRR-NF for at least five years would save $1.8 billion, but Feinstein noted that those savings have been erased by the cost increases in the B61 program. “The new B61 extension program cost estimate alone requires NNSA to find an additional $4 billion at a time when budgets are shrinking and sequestration is a real possibility,” Feinstein said.

In a statement, the NNSA did not commit to a cost estimate for the program. “As part of the Government’s process for executing life extension programs, engineering work has begun on the B61 which will allow for a formal cost estimate to be made in the future,” NNSA spokesman Josh McConaha said. “While a number of reviews based on the Nuclear Weapons Council’s selected option have been ongoing, it is too early in the process to speculate on any final cost changes or schedule impacts, and we will not comment on numbers or dates cited in any review until the required engineering work has been completed.”

Not the ‘Cadillac’ Option

Before it began the design definition and cost study on the weapons system, the Administration said that the upgrade to the gravity bomb would help save money, lower demands on the weapons complex and allow for stockpile reductions by consolidating four warhead modifications— tactical warheads known as ‘mods’ 3, 4, and 10, and a strategic warhead known as mod 7—into the newest B61 modification, known as the B61-12. Specifically, the arming, fuzing and firing portion of the warhead would be upgraded to increase reliability, according to the U.S. Strategic Command. Increased security features would reduce risks if the bomb were to fall into unauthorized hands or be involved in an accident, and increased safety would improve weapons handling, maintenance and storage. The alternative chosen by the Nuclear Weapons Council, however, did not include all the features that weapons designers had suggested—described by NNSA weapons chief Don Cook last year as the ‘Cadillac’ option—leaving out multi-point safety and optical firing sets that have driven the cost even higher, according to Hans Kristensen, the director of the Nuclear Information Project at the Federation of American Scientists.

Still, the cost has exploded in recent months, with little explanation why. A Congressional aide said NNSA estimated the base cost of the life extension program at $7.095 billion, which includes a contingency of approximately 10 percent, or $640 million. An additional $819 million of the estimate is for Stockpile Services work associated with technical maturation and component manufacturing work. Because of the increased estimates, the NNSA is expected to need $413 million in FY 2013—more than the $369 million the Administration requested for the program—and $566 million in FY2014. Details of the CAPE study are not available, but a staffer said that its work concluded that it would take until 2022 to complete a First Production Unit under the $7.9 billion cost profile. The group suggested it would take $10 billion to meet the FPU deadline by 2019. No matter the cost—$7.9 billion or $10 billion—the new price tag is certain to renew questions among some lawmakers about whether the life extension program. “There’s a lot of concern with the cost of this program and how do you balance it with other priorities,” the staffer said. “Is this really the lowest cost option that meets all military requirements? Is DoD really sure we’re going to go through with this? At what point does it become absurd to spend $10 billion on several hundred weapons?”

Feinstein, Alexander Take Active Role in Projects

Feinstein and Sen. Lamar Alexander (R-Tenn.), the ranking member of the subcommittee, have taken a keen interest in massive NNSA projects that have exceeded their baselines, and this week met with NNSA Administrator Tom D’Agostino about the Uranium Processing Facility planned for the Y-12 National Security Complex, which is currently estimated to cost as much as $6.5 billion, up from original estimates of $600 million. “Senator Alexander and I have been very concerned about … the inability to keep these programs within the initial budget confines, and they go up exponentially, and it’s a problem. And so we are on that,” Feinstein said. The problem, she said, is that the cost increases are infringing on other programs and projects. “These costs are big costs and as they increase it pushes everything else out,” Feinstein said on the sidelines of the hearing. “There is no new money. In fact, the allocation of the whole thing gets constrained. We can’t afford a process that doesn’t function so we are trying to find a process that does function.”

Feinstein said she and Alexander were pushing to establish a single person at NNSA that is in charge of the projects and can serve as the main point of contact between the subcommittee to keep it abreast of potential cost overruns, schedule slips or scope changes. “We have to find a way to stop this from happening,” she said, adding that the purpose of establishing a direct conduit between the agency and Congress would be to “make people solve problems quickly before they are just left and they just continue to grow.”

Feinstein stopped short of saying the new estimate would impact the subcommittee’s support of the project, but the new estimate has fueled calls for the project to be scrapped from other sources. The panel already cut $30 million from the Administration’s $369 million request for work on the B61 in the NNSA’s Fiscal Year 2013 budget and directed that no funding be used until a validated cost, schedule and scope baseline is submitted to Congress. The number of warheads being refurbished is classified, but Kristensen estimates that 400 will go through the life extension process, and he suggested that with the added cost of a refurbished tailkit for the bomb, the per-warhead cost of the refurbishment would be $28 million. “If these cost overruns were in the private sector, heads would roll and the program would probably be canceled,” Kristensen said in an analysis of the new estimate.

Increase Raises Questions About Future LEPs

One Congressional staffer also suggested that the cost overruns did not engender confidence in the NNSA for future refurbishment efforts, such as the more-complicated W78/W88 refurbishment. “If we can’t do the B61, which is a relatively straight forward, mostly non-nuclear life extension program, what happens when we get to the 78/88, which is more complex, has more nuclear aspects, and you’re looking at commonality and reuse stuff that we’ve never tried? If you can’t do the simple stuff, how do we do the complex stuff at a reasonable cost?” the staffer said.

peaking at this week’s hearing, retired Gen. James Cartwright, the former commander of U.S. Strategic Command and the vice chairman of the Joint Chiefs of Staff, suggested that it was imperative that the NNSA get a handle on the cost to refurbish nuclear weapons. “We have to get our arms around how to cost these extension programs, because we are going to do them for the next 50 years,” Cartwright said. “You know, the likelihood of going to zero is probably not inside that window. And so we have to find a way to understand what it costs, what the implications of a large inventory are versus a small inventory, and do a good business case. Even though it is war-fighting and it is strategic and it is our security, it should not escape the business case of how you do it and how you think about the trades that you have inside of it, and I think we have not gotten that business case nailed down just based on the cost growth that we have today.” —Todd Jacobson