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For immediate release Aug 17, 2023
Contact: Greg Mello, 505-265-1200 office, 505-577-8563 cell
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Albuquerque -- Today the Government Accountability Office (GAO) released its first biannual "Assessment of Major Projects" of the National Nuclear Security Administration (NNSA) (full report, GAO-23-104402).
NNSA is a semi-autonomous agency created within the Department of Energy (DOE) in 1999, tasked with designing and producing nuclear warheads, designing naval reactors, and providing technical support for U.S. nonproliferation efforts.
DOE contract management, including the functions subsequently placed in NNSA's portfolio, has been on GAO's "High Risk List" of federal programs especially vulnerable to waste, fraud, abuse, and mismanagement since 1990. In 2013, GAO narrowed its "high-risk" designation at NNSA to only those projects with an estimated cost of at least $750 million or greater. (GAO's April 2023 discussion of its greatest concerns at NNSA).
Today's report details the problems at 28 NNSA capital projects, i.e. congressional line-item construction projects or major subprojects within them. It does not review NNSA programs, or the cost and schedule increases in programs and their deliverables. [Note 1]
Greg Mello, executive director:
This review of NNSA's major construction projects will make Congress wince. Nearly every project is over budget and schedule.
Much of the problem comes from NNSA's peculiar management structure. Contractors manage contractors, doing nearly all of NNSA's work. NNSA's own staff is tiny.
Meanwhile Congress does very little oversight these days. Few on the oversight committees dare question "national security," so little accountability is required. No matter how poor NNSA's performance or how grand its ambitions, Congress nearly always provides all the money requested and often more.
NNSA's warhead business is a runaway train, a self-licking ice-cream cone not just for its own contractors but also for the military-industrial complex as a whole.
Teams of NNSA contractors plan their strategies with the military and key members of Congress, making a unified juggernaut that stumbles more in execution than in funding. That's what we are seeing here. Execution is difficult.
The worst example of this is NNSA's grand plan to build two separate plutonium warhead core (pit) factories -- a new, safer, adequate one in South Carolina, and an old, unsafe, inadequate one at Los Alamos.
The justification for LANL's factory, which will also cost more than the one in South Carolina which will be able to carry the entire mission itself, is to get NNSA into pit production a few years earlier.
That advantage is shrinking. GAO's report notes that LANL's main pit project will not be ready until 2032, four years later than NNSA said last year.
Meanwhile the cost of the equipment needed to produce pits reliably at LANL has tripled.
GAO's report does not include the increased operating costs caused by schedule delays. Four years of delay for LANL pit production will cost taxpayers an additional four billion dollars, in addition to the 30-40% increase in capital cost that GAO mentions.
GAO's report describes how designs change, costs increase, and schedules lengthen, as optimism meets reality. Nowhere is this more true than at LANL. On multiple LANL projects, NNSA doesn't even know when it will have a new schedule or cost estimate. On one large LANL project, more than 20 years have elapsed since the project began, and NNSA still does not know what it will finally cost or when it will be done.
GAO only publishes the estimates NNSA provides. The actual situation is typically worse. For LANL pit production, enormous problems remain, the full measure of which is not yet admitted by NNSA.
NNSA's new plan to increase the latent capacity of the South Carolina pit plant, mentioned in today's report, makes the rushed, makeshift plant at LANL even more unnecessary.
Note 1: For example, the 4-year additional delay mentioned here in the main plutonium warhead core ("pit") production project at Los Alamos National Laboratory (LANL), the "Los Alamos Plutonium Pit Production Project" (LAP4), will also incur increased program costs, in addition to the 30-40% increase in LAP4 costs GAO mentions (Appendix I), quoting from NNSA's March 2023 Congressional Budget Request. From the same source, these program costs (in "Plutonium Modernization" at LANL) will equal or exceed one billion dollars per year over this period, leading to an additional $4 billion cost increase in LANL pit production startup costs, i.e. $4 billion more than the 30-40% increase GAO tallies. (For details see Schedule for Nuclear Warhead Core ("Pit") Production Slipping, Costs Increasing: NNSA's Strategy is Failing, press release, Mar 22, 2023 and " Pit Production Startup Costs By Site and Year," May 11, 2023.)
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