For immediate release February 9, 2016

Expect further details tomorrow

Administration’s Proposed Nuclear Warhead Budget
Its Highest Ever

Underground plutonium processing modules not mentioned

Contact: Greg Mello, gmello@lasg.org, 505-265-1200 or 505-577-8563

ALBUQUERQUE – Today the Department of Energy (DOE) and its nuclear weapons subsidiary the National Nuclear Security Administration (NNSA) released their fiscal year (FY) 2017 Congressional Budget Request (CBR). Five years of prior NNSA planning and budgeting documents are here.

Volume 1 of the DOE CBR pertains to NNSA programs and supplies fresh details on the administration’s plans to modernize and maintain nuclear warheads and warhead facilities as well as how to dispose of surplus plutonium and fund related nonproliferation programs.  Vol. 5 (not yet available) addresses Environmental Management.[1]

Proposed total DOE spending by site (Laboratory Tables) and state (State Tables) are also available.

NNSA sites conduct Work for Others (WFO) as well, open data regarding which is spotty. At Los Alamos National Laboratory (LANL), WFO for FY15 was $272 million (M), 13% of a total LANL budget authority of $2.15 B in that year. At Y-12, WFO is holding steady at about $50 M per year, about 3% of Y-12 total spending.

Today’s is the Obama Administration’s all-but-final budget request – which is to say, program request – and as such one of President Obama’s last chances to put his stamp on U.S. nuclear weapons policies for the late years of this decade and beyond.

In the interest of truth it is necessary to examine this budget and the programs it contains using reference frames outside those assumed by the agencies in question. Some traditional reference frames too rarely used today will be discussed in a second press release tomorrow.  

Today’s top-line proposal for NNSA “Weapons Activities” (WA) breaks all prior records.

By comparison, the Cold War (1948-1989) average for nuclear weapons research, development, testing, and production (RDT&E), including administration, was $5.14 B in 2015 (and also in 2016 so far) dollars.[2] This Weapons Activities request is 86% greater, or almost twice, the Cold War average for these functions, even though there is much less actual design, testing, and production today. Costs are much, much greater today. (We will supply historical graphs of this spending, overall and by site, tomorrow.)

All eight NNSA warhead complex sites are operated by private management and operating (M&O) contractors and it is they who receive these dollars. An NNSA web page provides the contracts; DOE provides a table showing the status of these and other DOE M&O contracts as of November 2015. Since then, NNSA has decided to terminate the M&O contract for LANL, effective in late 2017 or possibly late 2018.

NNSA has not yet posted its M&O contractor evaluations for FY15.

The administrative portion of NNSA’s total Weapons Activities budget (about $298 million) represents an upper bound on NNSA’s federal Weapons Activities spending, especially given that some of NNSA’s administrative budget is spent on contracted consultants and workforce augmentation. The portion of overall nuclear warhead enterprise spending which is spent directly by the federal government therefore does not exceed about 3%. The U.S. nuclear warhead business is 97% privatized.

Some key issues

1. NNSA projects ever-increasing costs for its contractors, which costs must be considered low-balled in the absence of massive reform. There is no sign of any such reform.

The warhead program outlined in this year’s budget request is described more fully in the FY16 SSMP. There, we see that NNSA expects Weapons Activities spending to rise monotonically through at least 2040 (see Figure 8-12).

Historically, NNSA costs have escalated dramatically for major projects, sometimes by factors exceeding a full order of magnitude. NNSA and its predecessor DOE Defense Programs have been on the GAO’s High-Risk List for waste, fraud, and abuse since its inception more than 30 years ago.  It is therefore unlikely that these cost projections, even as great as they are, will prove adequate, unless significant savings are found and reforms are made.

Adding to the problem, NNSA maintains hundreds of contaminated, unused facilities which have no budgeted path to disposition, as the DOE Inspector General has warned. Disposition will be costly.

On December 23, 2015, Secretary Moniz wrote the Office of Management and Budget (OMB) Director Shaun Donovan, asking him to increase NNSA’s out-year spending plan (that is, for 2018 through 2021: four years) by $5.2 B, an average of $1.3 B per year (an increase of about 10%), citing what he said was inadequate funding for infrastructure and computing in particular. We can now check to see if Sec. Moniz got that funding.

Recent past- and current-year projected NNSA funding is shown in the following table. It shows that funding requests grew by an average of $427 M for all years (i.e. a total of $1.707 B over four years) from February 2014 to February 2015.

It appears Sec. Moniz’s last-minute plea, or ploy, to get the White House to commit to a larger future-years funding stream for NNSA as a whole was not very successful. Discernible overall NNSA budget growth, i.e. growth for the years FY17-FY2020, was held to a total of $473 million or an average of $118 million per year, an order of magnitude less than Sec. Moniz allegedly requested.

2. NNSA’s warhead projects serve an overall nuclear weapons modernization and deployment plan slated to cost a trillion dollars over 30 years, for which no present funding source is adequate.

The overall U.S. defense budget is much more than just the military budget alone. It easily now exceeds $1 trillion per year.  At $1 trillion, the 125 million U.S. households currently pay (or the federal government borrows on their behalf) about $8,000 annually to pay for these security services.

Within this amount, nuclear deployments and modernization are expected to cost roughly $1 trillion over 30 years, assuming all goes as planned (see the references in this 2015 overview).

As has been widely reported, nuclear weapon system modernization costs are expected to peak in the 2020s, creating serious conflicts with other defense priorities. Lawrence Korb and Adam Mount at the Center for American Progress are among the most recent to carefully analyze these funding conflicts, a job they have done very well indeed.[3]

Given these budgetary challenges, which are quite serious without even examining the overall budgetary and economic assumptions behind them, will the entire proposed suite of upgraded nuclear weapons currently envisioned really be developed, built, and deployed? As many have said, it is doubtful.

Even without cancellation of a single weapon system, is the NNSA’s “3+2” warhead plan, the foundation of its entire budget request for warheads, a plan which envisions a new “interoperable” Air Force/Navy warhead [IW-1] – which the Navy does not want or need – actually practical, feasible, prudent, and defensible? As we said here:

The Navy does not need or want IW-1 for the foreseeable future, since the 400 or so extant W88s are scheduled to be upgraded starting in late 2020 and provided with new conventional high explosives (CHE), enabling an extended service life extending until the late 2030s.  (See “Nuclear Weapons Council Debating Expanding Scope of W88 Alt 370, Senior Navy Admiral Says; Refreshing High Explosive in Warhead Under Consideration,” Todd Jacobson, Nuclear Security and Deterrence Monitor, 6/20/2014).  The Nuclear Weapons Council made the decision to refresh the CHE in December of 2014 (see the FY2016 SSMP, p. 2-21).  The IW-1 program was accordingly mothballed in FY2014 (Ibid, p. 2-26) and its FPU [First Production Unit] delayed 5 years to the present 2030.  The program remains alive today in name only; several close observers of the program serving in government say it is all but dead, especially since the commonality of the Air Force and Navy versions of the warhead has decreased; separate fuzing systems are now envisioned (Ibid, p. 8-19).

Further, and partly derivative of these plans and partly independent, NNSA’s infrastructure plans are under tremendous managerial and budgetary stress, as the Moniz letter of 12/23/15 cited above apparently stated (the letter itself is not available). We expect trouble in that aspect of NNSA’s work.

3. The FY17 NNSA budget request does not include underground plutonium processing “modules” at LANL.

Pit infrastructure plans have changed again, perhaps very recently.

First and foremost, reports suggested (also here) that underground plutonium processing modules would appear in this request, with an upside estimated cost of roughly $3 B. Two 5,000 sq. ft. modules costing $3 B would cost $300,000/sq. ft., twice the evolving cost of space in the original Chemistry and Metallurgy Research Replacement Nuclear Facility (CMRR-NF) plan, now cancelled.  

Interestingly, today’s request states (on p. 353), regarding the CMRR-NF: “This subproject is hereby cancelled with the remaining mission need for CMRR to be met by REI2, PEI1, PEI2, and RC3.” (Emphasis added.) (These four projects are the current four subprojects in the overall CMRR project, two of them new with this request.)

This does not mean that the planned modules, for which a mission need was approved on November 25, 2015, will not appear next year in a new line item. But for now, the sentence quoted above appears to supersede the reported language of the CD-0 approval:

The plutonium modular approach (PMA) project will provide the National Nuclear Security Administration (NNSA) with “high-hazard, high-security laboratory space” for LANL’s plutonium operations, according to the Nov. 25 approval memorandum for the program intended to replace the suspended Chemistry Metallurgy and Research Replacement Nuclear Facility project with separate, less expensive facilities. The memo from Deputy Secretary of Energy Elizabeth Sherwood-Randall to NNSA Administrator Frank Klotz said the project’s cost range is $1.3 billion to $3 billion and its expected completion date is between 2025 and 2027.

LANL’s Radiological, Utility, and Office Building (RLUOB, also part of the CMRR project) is now expected to be a $1.44 B building (a number which we get by adding up all four RLUOB subprojects) when and if it is finished, which would make it the most expensive building in the history of New Mexico. With this request NNSA signals its commitment to convert RLUOB to a 400 gram Pu-239-equivalent Hazard Category III Nuclear Facility, despite not meeting the construction requirements for a nuclear facility.

The sole managerial purpose served by the current pit production requirement (summarized on p. A-9 in the FY2016 SSMP) assumes a new Cold War.

There are more details and issues under the pit production topic than can be addressed today.

There are many other issues of interest in this NNSA budget but we must close this analysis before the hour becomes later than it is.

****ENDS****

[1] Further program detail can be found in the unclassified portions of the FY16 Stockpile Stewardship and Management Plan (SSMP). An update is due by March 15.

A third planning document series is the classified annual 10-year plan for the nuclear weapons stockpile, nuclear weapons complex, nuclear weapons delivery systems and nuclear weapons command and control systems (the "1043 report"). See “Nuclear Weapons Sustainment: Improvements Made To Budget Estimates, But Opportunities Exist To Further Enhance Transparency,” Government Accountability Office (GAO), GAO-15-536, July 2015.

[2] The Bureau of Labor Statistics consumer price index for urban consumers (CPI-U) is currently about zero.

[3] See also “Is the Pentagon’s Budget About To Be Nuked? The Pentagon is ready to begin sweeping nuclear modernization. Can it afford to do it? Can it afford not to?”, Aaron Mehta, Defense News, Feb. 5, 2016.