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United States Government Accountability Office: 
GAO: 

Report to the Subcommittee on Energy and Water Development, Committee 
on Appropriations, U.S. Senate:

March 2012:

Modernizing The Nuclear Security Enterprise:

New Plutonium Research Facility at Los Alamos May Not Meet All Mission 
Needs:

GAO-12-337:

GAO Highlights:

Highlights of GAO-12-337, a report to the Subcommittee on Energy and 
Water Development, Committee on Appropriations, U.S. Senate. 

Why GAO Did This Study:

Plutonium—-a man-made element produced by irradiating uranium in 
nuclear reactors-—is vital to the nuclear weapons stockpile. Much of 
the nation’s current plutonium research capabilities are housed in 
aging facilities at Los Alamos National Laboratory in New Mexico. 
These facilities pose safety hazards. The National Nuclear Security 
Administration (NNSA) has decided to construct a multibillion dollar 
Chemistry and Metallurgy Research Replacement Nuclear Facility (CMRR) 
to modernize the laboratory’s capabilities to analyze and store 
plutonium. GAO was asked to examine (1) the cost and schedule 
estimates to construct CMRR and the extent to which its most recent 
estimates reflect best practices, (2) options NNSA considered to 
ensure that needed plutonium research activities could continue, and 
(3) the extent to which NNSA's plans reflected changes in stockpile 
requirements and other plutonium research needs. GAO reviewed NNSA and 
contractor project design documents and visited Los Alamos and another 
plutonium facility at Lawrence Livermore National Laboratory in 
California. 

What GAO Found:

The estimated cost to construct the CMRR has greatly increased since 
NNSA’s initial plans, and the project’s schedule has been 
significantly delayed. According to its most recent estimates prepared 
in April 2010, NNSA determined that the CMRR will cost between $3.7 
billion and $5.8 billion—-nearly a six-fold increase from the initial 
estimate. Construction has also been repeatedly delayed and, in 
February 2012 after GAO provided its draft report to NNSA for comment, 
NNSA decided to defer CMRR construction by at least an additional 5 
years, bringing the total delay to between 8 and 12 years from NNSA’s 
original plans. Infrastructure-related design changes and longer-than-
expected overall project duration have contributed to these cost 
increases and delays. GAO’s review of NNSA’s April 2010 cost and 
schedule estimates for CMRR found that the estimates were generally 
well prepared, but important weaknesses remain. For example, a high-
quality schedule requires a schedule risk analysis that incorporates 
known risks to predict the level of confidence in meeting a project’s 
completion date and the amount of contingency time needed to cover 
unexpected delays. CMRR project officials identified hundreds of risks 
to the project, but GAO found that these risks were not used in 
preparing a schedule risk analysis. As a result of these weaknesses, 
NNSA cannot be fully confident, once it decides to resume the CMRR 
project, that the project will be completed on time and within 
estimated costs. 

NNSA considered several options to preserve its plutonium-related 
research capabilities in its decision to build CMRR at Los Alamos. 
NNSA assessed three different sizes for a new facility—22,500, 31,500, 
and 40,500 square feet. In 2004, NNSA chose the smallest option. NNSA 
officials stated that cost was the primary driver of the decision, but 
that building a smaller facility would result in trade-offs, including 
the elimination of contingency space. In the end, NNSA decided to 
build a minimally-sized CMRR facility at Los Alamos with a broad suite 
of capabilities to meet nuclear weapons stockpile needs over the long-
term. These capabilities would also be used to support plutonium-
related research needs of other departmental missions. 

NNSA’s plans to construct CMRR focused on meeting nuclear weapons 
stockpile requirements, but CMRR may not meet all stockpile and other 
plutonium-related research needs. NNSA analyzed data on past workload 
and the expected need for new weapon components to help ensure CMRR’s 
design included the necessary plutonium-related research capabilities 
for maintaining the safety and reliability of the nuclear stockpile. 
However, some plutonium research, storage, and environmental testing 
capabilities that exist at Lawrence Livermore National Laboratory may 
no longer be available after NNSA consolidates plutonium-related 
research at Los Alamos. Furthermore, NNSA conducts important plutonium-
related research in other areas such as homeland security and nuclear 
nonproliferation, but it has not comprehensively analyzed plutonium 
research and storage needs of these other programs outside of its 
nuclear weapons stockpile work and therefore cannot be sure that the 
CMRR plans will effectively accommodate these needs. As a result, 
expansion of CMRR or construction of more plutonium research and 
storage facilities at Los Alamos or elsewhere may be needed in the 
future, potentially further adding to costs.

What GAO Recommends:

GAO is making recommendations to improve CMRR’s schedule risk analysis 
and to conduct an assessment of plutonium research needs. NNSA agreed 
with GAO’s recommendations to assess plutonium research needs, but 
disagreed that its schedule risk analysis should be revised, citing 
its recent decision to defer the project. GAO clarified the 
recommendation to specify that NNSA should take action when it resumes 
the project. 

View [hyperlink, http://www.gao.gov/products/GAO-12-337]. For more 
information, contact Gene Aloise at (202) 512-3841 or aloisee@gao.gov. 

[End of section] 

Contents:

Letter:

Background:

CMRR's Initial Cost Estimate Has Significantly Increased and Its 
Schedule Has Been Delayed:

NNSA Considered Several Options to Preserve Plutonium-Related Research 
Capabilities, but Ultimately Chose to Build a Minimally Sized Facility 
at Los Alamos:

CMRR May Meet Nuclear Weapons Stockpile Requirements but May Not 
Accommodate Other Plutonium-Related Research Needs:

Conclusions:

Recommendations for Executive Action:

Agency Comments and Our Evaluation:

Appendix I: Objectives, Scope, and Methodology:

Appendix II: Summary Assessment of CMRR's Cost Estimate Compared to 
Industry Best Practices:

Appendix III: Summary Assessment of CMRR's Schedule Estimate Compared 
to Industry Best Practices:

Appendix IV: Comments from the National Nuclear Security Administration:

Appendix V: GAO Contact and Staff Acknowledgments:

Tables:

Table 1: Extent to Which CMRR's Cost Estimate Met Industry Best 
Practices:

Table 2: Extent to Which CMRR's Schedule Estimate Met Industry Best 
Practices:

Abbreviations:

CMRR: Chemistry and Metallurgy Research Replacement Nuclear Facility:

DOE: Department of Energy:

NNSA: National Nuclear Security Administration: 

[End of section]

United States Government Accountability Office: 
Washington, DC 20548: 

March 26, 2012:

The Honorable Dianne Feinstein: 
Chairman: 
The Honorable Lamar Alexander: 
Ranking Member: 
Subcommittee on Energy and Water Development: 
Committee on Appropriations: 
United States Senate: 

Plutonium--a man-made radioactive element produced by irradiating 
uranium in nuclear reactors--is vital to the nation's nuclear weapons 
stockpile. Plutonium is used in "pits"--the spherical central core of 
a nuclear weapon that is compressed with high explosives to create a 
nuclear explosion. Several kilograms of plutonium are sufficient to 
make a nuclear bomb, so plutonium must be stored under extremely high 
security to protect it from theft. In addition, exposure to small 
quantities is dangerous to human health, so that even inhaling a few 
micrograms creates a long-term risk of lung, liver, and bone cancer 
and inhaling larger doses can cause immediate lung injuries and death. 
Also, if not safely contained and managed, plutonium can be unstable 
and spontaneously ignite under certain conditions. Therefore, any 
facility that stores or conducts research on plutonium must be 
robustly designed to safely prevent the uncontrolled release of 
hazardous material to the environment and to securely store the 
material to protect it from potential theft.

Much of the nation's current plutonium research and development 
capabilities are housed at the Los Alamos National Laboratory in New 
Mexico. The laboratory is one of the National Nuclear Security 
Administration's (NNSA) two primary laboratories responsible for 
designing nuclear weapons components that contain plutonium; the other 
is Lawrence Livermore National Laboratory in California.[Footnote 1] 
Los Alamos has been supporting the production of new pits since the 
closure of the Department of Energy's (DOE) Rocky Flats Plant near 
Denver, Colorado, in 1989, as well as homeland security activities, 
energy programs, and nuclear nonproliferation activities.

The Chemistry and Metallurgy Research nuclear facility at Los Alamos 
conducts plutonium-related research that is crucial to effectively 
maintain the nuclear weapons stockpile. However, the facility is 
nearly 60 years old, and its aging infrastructure poses safety 
hazards. In addition, the facility is situated on a seismic fault 
line, raising concerns about the effect of earthquakes on the safety 
and security of plutonium used for research or stored at the facility. 
Because of these concerns, NNSA has decided to construct a Chemistry 
and Metallurgy Research Replacement Nuclear Facility (CMRR) at Los 
Alamos that will (1) modernize the laboratory's capabilities to 
analyze plutonium and (2) store plutonium in vaults that provide a 
secure environment that protects against its accidental or intentional 
misuse and minimizes health risks for workers and the surrounding 
communities.[Footnote 2] Originally estimated to begin construction in 
2008, the project has experienced several delays and, in February 2012 
after we had provided a draft of this report to NNSA for its comments, 
NNSA announced that it had decided to defer construction of the 
facility for at least 5 years.

NNSA's proposed construction of the CMRR is part of a larger strategic 
effort to consolidate nuclear materials from other locations across 
the United States and to modernize nuclear research, development, and 
production facilities that support the nuclear weapons stockpile. For 
example, NNSA's plans call for some of the plutonium-related research 
currently conducted at a high security facility at Lawrence Livermore 
National Laboratory known as Superblock to be transferred to CMRR. 
NNSA's plans also call for much of the plutonium currently stored at 
Livermore's Superblock to be consolidated at Los Alamos for continued 
research activities, and for the other material not needed for 
research at Livermore or Los Alamos to be stored at DOE's Savannah 
River Site pending final disposition. In addition, the nuclear weapons 
stockpile's requirements for plutonium are evolving. Specifically, the 
New Strategic Arms Reduction Treaty that the United States and Russia 
signed in April 2010 is to reduce the number of deployed strategic 
nuclear warheads by 30 percent. As a result of this treaty and NNSA's 
approach for modernizing the stockpile through the refurbishment of 
existing weapons, demand for newly manufactured pits has fluctuated in 
recent years. In light of these fluctuations, NNSA's current strategy 
is to design the CMRR around a broad suite of capabilities--equipment, 
processes, and expertise--that it anticipates may be needed to fulfill 
the stockpile's requirements regardless of the specific demand for pits.

Because of the extensive safety and security measures required to 
analyze and store plutonium, the cost of constructing new nuclear 
facilities is typically a multibillion dollar venture. In the past, we 
have reported on several major DOE and NNSA construction projects that 
faced cost increases and schedule delays.[Footnote 3] DOE's long-
standing difficulties in preparing cost and schedule estimates is one 
reason contract management in NNSA and DOE's Office of Environmental 
Management is on our list of federal programs at high risk of fraud, 
waste, abuse, and mismanagement.[Footnote 4] Because other federal 
agencies have also had problems developing high-quality cost and 
schedule estimates, we issued a cost-estimating guide in March 2009, 
consisting of best practices drawn from across industry and 
government, to assist agencies to develop cost and schedule estimates 
that are well-documented, comprehensive, accurate, and credible. 
[Footnote 5]

In this context, you asked us to review NNSA's plans for constructing 
the CMRR. Specifically, our objectives were to examine (1) NNSA's cost 
and schedule estimates for the construction of the facility and the 
extent to which its most recent estimates reflect best practices, (2) 
options NNSA considered to ensure that plutonium-related research 
activities will continue as needed, and (3) the extent to which NNSA's 
plans to construct the CMRR and its consideration of options reflected 
changes in nuclear weapons stockpile requirements and the plutonium-
related research needs of other departmental missions.

To examine NNSA's cost and schedule estimates for the CMRR project and 
the extent to which its current estimates reflect best practices, we 
reviewed relevant NNSA documents and met with agency and Los Alamos 
project officials to discuss the changes in the estimates that have 
occurred to date and the reasons for them. We compared NNSA's most 
recent cost and schedule estimates--prepared in April 2010--with best 
practices contained in our cost estimating guide and gave project 
officials the opportunity to provide and discuss feedback on our 
assessment. To examine the options NNSA considered to ensure that its 
plutonium-related work will continue, we reviewed NNSA and contractor 
documents on plutonium research needs and the various options 
available to meet those needs. We also met with NNSA and contractor 
officials to better understand how these options were analyzed to 
determine the best approach to fulfill NNSA's mission. To determine 
the extent to which NNSA's plans reflect changes in nuclear weapons 
stockpile requirements, we reviewed NNSA analyses that were used to 
support CMRR project decisions and met with NNSA officials to 
determine if these analyses were comprehensive and reflected up-to-
date nuclear weapons stockpile requirements. We also visited the Los 
Alamos and Lawrence Livermore national laboratories. To ensure the 
data we used were sufficiently reliable, we compared information 
gathered from a variety of data sources. For example, we interviewed 
officials from both Los Alamos and Livermore to obtain separate and 
independent perspectives on CMRR project plans. We determined the data 
were sufficiently reliable for our purposes.

We conducted this performance audit from February 2011 through 
February 2012 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. Appendix I contains a detailed description of our scope 
and methodology.

Background:

In the mid-1990s, Congress directed DOE to develop the Stockpile 
Stewardship Program to provide a single, highly integrated technical 
program for maintaining the continued safety and reliability of the 
nuclear weapons stockpile. Stockpile stewardship comprises activities 
associated with conducting nuclear weapons research, design, and 
development; maintaining the knowledge base and capabilities to 
support nuclear weapons testing; and assessing and certifying nuclear 
weapons safety and reliability. Stockpile stewardship includes 
operations associated with producing, maintaining, refurbishing, 
surveilling, and dismantling the nuclear weapons stockpile. The 
Stockpile Stewardship Program's objectives were updated as a result of 
the 2010 Nuclear Posture Review, which establishes the U.S. nuclear 
policy for the next 5 to 10 years, including the nation's nuclear 
weapons stockpile requirements.[Footnote 6] The Nuclear Posture Review 
and the Stockpile Stewardship Program reinforce the New Strategic Arms 
Reduction Treaty between the United States and Russia. As part of this 
treaty, the United States has agreed to reduce the size of its 
strategic nuclear weapons stockpile from a maximum of 2,200 to 1,550 
weapons, with the remaining weapons in the stockpile continuing to be 
an essential element of U.S. defense strategy.

Nuclear stockpile requirements include a pit production capacity that 
is defined by estimating the number of pits NNSA needs to manufacture 
annually to effectively support the nuclear weapons stockpile. The 
demand for pits has fluctuated over the past decade for various 
reasons. Until 2005, NNSA planned to produce pits in a large-scale 
manufacturing plant to be built called the Modern Pit Facility, which 
would have increased pit production capacity per year to a range of 
125 to 450 pits. This project was terminated and, at around the same 
time, NNSA began to study a new approach for modernizing the 
stockpile, called the Reliable Replacement Warhead program, which 
would have produced 50 pits per year and which was also short-lived. 
Through this program, NNSA would have designed new weapon components, 
including pits, to be safer and easier to manufacture, maintain, 
dismantle, and certify without nuclear testing. Since 2008, NNSA's 
guidance has established pit capacity for future production at about 
20 pits per year, with an upper range limit of 80 pits per year. In 
addition, NNSA has recently determined that pit lifetimes are longer 
than anticipated and that it may increase the reuse of existing pits, 
reducing the demand for newly manufactured pits. Currently, pit 
capacity requirements are uncertain and still in flux. Demand may 
again fluctuate as a result of the Nuclear Posture Review and changes 
to the Stockpile Stewardship Program. For example, there are still 
unknowns in implementing the Nuclear Posture Review and modernization 
work on each nuclear weapon type may require a varied number of new 
pits.

To execute the activities to maintain and refurbish the nation's 
existing nuclear weapons stockpile, NNSA oversees eight sites that 
comprise its nuclear security enterprise--formerly known as the 
nuclear weapons complex--which includes three national weapons 
laboratories, four production plants, and a test site, all of which 
carry out missions to support NNSA's programs. One of these sites, Los 
Alamos National Laboratory, plays a crucial role in carrying out 
NNSA's maintenance of the nuclear weapons stockpile, including (1) 
production of weapons components, (2) assessment and certification of 
the nuclear weapons stockpile, (3) surveillance of weapons components 
and weapon systems, (4) assurance of the safe and secure storage of 
strategic materials, and (5) management of excess plutonium 
inventories. Los Alamos was established in 1943 during the Manhattan 
Project in northern New Mexico. It is a multidisciplinary, 
multipurpose institution primarily engaged in theoretical and 
experimental research and development. A significant portion of Los 
Alamos' work is focused on ensuring that nuclear weapons stockpile 
needs are met. Since 2000, pit production has been established within 
the Plutonium Facility Complex at Los Alamos's Technical Area 55, and 
certified pits have been produced over the past 5 years in that 
facility.

A particularly important facility at Los Alamos within Technical Area 
55 is the nearly 60-year-old Chemistry and Metallurgy Research 
facility. The facility has unique capabilities for performing 
analytical chemistry, material characterization, and research and 
development related to plutonium. This includes activities that 
support the manufacturing, development, and surveillance of nuclear 
weapons pits; programs to extend the life of nuclear weapons in the 
stockpile; and nuclear weapon dismantlement efforts. This pit 
production mission support work was first assigned to Los Alamos in 
1996. NNSA also currently maintains some plutonium-related research 
capabilities at other facilities, such as Livermore's Superblock 
facility. These capabilities are necessary components of NNSA's 
overall stockpile management strategy. NNSA and DOE also use the 
unique plutonium-related capabilities located at Los Alamos and 
Livermore to support the plutonium-related research needs of other 
national security missions and activities outside of the nuclear 
weapons stockpile work, including nuclear nonproliferation activities; 
homeland security activities, such as nuclear forensics and nuclear 
counterterrorism; waste management; and material recycle and recovery 
programs.

The Chemistry and Metallurgy Research facility was initially designed 
and constructed to comply with building codes in effect during the 
late 1940s and early 1950s. In 1992, recognizing that some of the 
utility systems and structural components were aging, outmoded, and 
generally deteriorating, DOE began upgrading the facility. These 
upgrades addressed specific safety, reliability, consolidation, and 
security issues with the intent of extending the useful life of the 
facility for an additional 20 to 30 years. However, beginning in about 
1997 and continuing to the present, a series of additional operational 
and safety concerns have surfaced. In particular, a 1998 seismic study 
identified two small parallel faults beneath the northern portion of 
the Chemistry and Metallurgy Research facility. The presence of these 
faults raised concerns about the structural integrity of the building 
in the event of an earthquake. DOE and NNSA determined that, over the 
long term, Los Alamos could not continue to operate the mission-
critical support capabilities in the existing Chemistry and Metallurgy 
Research facility at an acceptable level of risk to worker safety and 
health. To ensure that NNSA can fulfill its national security mission 
for the next 50 years in a safe, secure, and environmentally sound 
manner, NNSA decided in 2004 to construct a replacement facility, 
known as the CMRR.[Footnote 7]

Federal agencies, including DOE and NNSA, have experienced long-
standing difficulties in completing major projects within cost and on 
schedule. To provide assistance in preparing high-quality cost and 
schedule estimates, we compiled best practices used throughout 
government and industry and, in March 2009, issued a guide outlining 
the criteria for high-quality cost and schedule estimates. 
Specifically, our guide identified four characteristics of a high-
quality, reliable cost estimate: (1) credible, (2) well-documented, 
(3) accurate, and (4) comprehensive.[Footnote 8] In addition, our cost 
guide lays out 12 key steps that should result in high-quality cost 
estimates and hundreds of best practices drawn from across industry 
and government for carrying out these steps. For example, one of the 
key steps includes conducting an independent cost estimate--that is, 
one generated by an entity that has no stake in the approval of the 
project but uses the same detailed technical information as the 
project estimate. Having an independent entity perform such a cost 
estimate and comparing it to the project team's estimate provides an 
unbiased test of whether the project team's cost estimate is reasonable.

Our guide also identified nine best practices for effectively 
estimating schedules: (1) capturing key activities, (2) sequencing key 
activities, (3) assigning resources to key activities, (4) 
establishing the duration of key activities, (5) integrating key 
activities horizontally and vertically, (6) establishing the critical 
path for key activities, (7) identifying total float (i.e., the time 
that activities can slip before the delay affects the completion 
date), (8) performing a risk analysis of the schedule, and (9) 
updating the schedule using logic and durations to determine dates. 
[Footnote 9] Many of these practices have also been incorporated into 
DOE's recent guidance for establishing performance baselines.[Footnote 
10]

CMRR's Initial Cost Estimate Has Significantly Increased and Its 
Schedule Has Been Delayed:

The estimated cost to construct the CMRR, according to estimates 
prepared in April 2010, is nearly six times higher than the project's 
initial cost estimate that was prepared in 2005. The project's 
estimated completion date has also been delayed by at least 8 to 12 
years. Our review of these most recent detailed cost and schedule 
estimates for the CMRR project found that the estimates generally 
reflect best practices, but are not yet entirely reliable.

Estimated Cost to Construct CMRR Has Increased by Almost Six-Fold, and 
Its Scheduled Completion Has Been Delayed:

Since CMRR was first proposed, its costs have risen significantly, and 
its schedule has been repeatedly delayed. Specifically, in 2005, when 
DOE developed initial plans for CMRR, it estimated that the project 
would cost from $745 million to $975 million and would be completed 
between 2013 and 2017. This estimate was prepared using preliminary 
information--before a detailed project design was substantially under 
way--and was therefore considered by DOE to be a rough estimate. In 
April 2010, NNSA estimated that the CMRR will cost between $3.7 and 
$5.8 billion--a nearly six-fold increase from the initial estimate--
and that construction will be complete by 2020--a 3-to 7-year delay. 
In February 2012, after we had provided NNSA with a draft of this 
report for its comments, NNSA announced that it had decided to defer 
CMRR construction by at least an additional 5 years, bringing the 
total delay from NNSA's original plans to 8 to 12 years.

NNSA officials explained that the majority of the cost increases 
occurred because of changes to the facility's design and because of 
project delays. Specifically,

* Modifications to the facility's design. To address concerns about 
seismic activity, the project design was modified to strengthen the 
facility to withstand a potential earthquake. For example, significant 
design changes resulted from the need to thicken the concrete walls to 
satisfy increasingly stringent seismic requirements. In addition, to 
proceed to final design, project officials had to evaluate the 
potential effects of an earthquake on the facility's complex 
ventilation system. This effort included several studies, 
consultations with vendors and other designers, and an assessment of 
the availability of equipment that would meet seismic requirements. 
Overall, Los Alamos estimates the seismic related design changes 
increased the project costs by almost $500 million.

* Delays in the construction start date and longer overall project 
duration. CMRR construction was originally expected to begin in 2008, 
but was first delayed until 2013 and is now not expected to begin 
before 2018. The initial delay in starting construction from 2008 to 
2013 had varying causes, including facility design changes described 
previously as well as the additional time needed for NNSA to determine 
where and how to consolidate plutonium operations in the nuclear 
security enterprise, according to project officials. This delay 
starting construction pushed the estimated construction completion 
date from between 2013 and 2017 to 2020--3 to 7 years later than 
initially expected. At the time, the facility was expected to be 
operational in 2022.[Footnote 11] These delays further increased 
costs, partly because inflation meant that equipment and materials 
became more expensive as time passed. In addition, the longer project 
duration also contributes to increases in the cost of workers' wages 
and salaries. Overall, project officials estimate that about $1.2 
billion in additional costs resulted from these schedule delays. In 
February 2012, NNSA announced another significant project delay--at 
least an additional 5-year deferral in starting the construction of 
the CMRR--resulting in a total of an 8 to 12 year delay from NNSA's 
original plans. However, NNSA has not yet determined the impact to the 
project's costs as a result of this additional delay.

NNSA's Most Recent Cost and Schedule Estimates Generally Meet Industry 
Best Practices, but Are Not Yet Entirely Reliable:

Our review of NNSA's most recent cost and schedule estimates for the 
CMRR construction project found that the estimates were generally well 
prepared but that important weaknesses remain. Specifically, we found 
that the CMRR cost estimate prepared in April 2010 exhibits most of 
the characteristics of high-quality, reliable cost estimates. As 
identified by the professional cost-estimating community and 
documented in our cost-estimating guide, a high-quality cost estimate 
is comprehensive, well-documented, accurate, and credible.[Footnote 
12] Our review of the CMRR cost estimate found that the cost estimate 
exhibits three of the four characteristics of a high-quality estimate 
by being substantially comprehensive, well documented, and accurate, 
but only partially credible, as shown in table 1. Appendix II contains 
additional information about each of the four general best practice 
characteristics and our assessment of the estimate compared to 
detailed best practices.

Table 1: Extent to Which CMRR's Cost Estimate Met Industry Best 
Practices:

Best practice characteristic: Comprehensive; 
Overall assessment[A]: Substantially met.

Best practice characteristic: Well documented; 
Overall assessment[A]: Substantially met.

Best practice characteristic: Accurate; 
Overall assessment[A]: Substantially met.

Best practice characteristic: Credible; 
Overall assessment[A]: Partially met.

Source: GAO analysis of CMRR project cost information. 

[A] The ratings we used in this analysis are as follows: "Not met" 
means CMRR provided no evidence that satisfies any of the 
characteristic. "Minimally met" means CMRR provided evidence that 
satisfies a small portion of the characteristic. "Partially met" means 
CMRR provided evidence that satisfies about half of the 
characteristic. "Substantially met" means CMRR provided evidence that 
satisfies a large portion of the characteristic. "Fully met" means 
CMRR provided complete evidence that satisfies the entire 
characteristic. 

[End of table] 

The CMRR cost estimate only partially met industry best practices for 
credibility because project officials did not use alternate methods to 
crosscheck major cost elements to see whether the results were similar 
under different estimating methods. In addition, according to our 
guide, there are varying methods of validating an estimate, but the 
most rigorous method is the independent cost estimate that is 
generated by an entity that has no stake in the approval of the 
project. Conducting an independent cost estimate is especially 
important at major milestones because it provides senior decision 
makers with a more objective assessment of the likely cost of a 
project. A second, less rigorous method for validating a project's 
cost estimate--an independent cost review--focuses on examining the 
estimate's supporting documentation and interviewing relevant staff. 
Independent cost reviews address only the cost estimate's high-value, 
high-risk, and high-interest aspects without evaluating the remainder 
of the estimate. An independent cost review on the entire CMRR project 
was initiated in 2011, but the more rigorous method of validating--
conducting an independent cost estimate--has only been used on a small 
portion of the project representing about 6 percent of the project's 
total costs.[Footnote 13] According to NNSA officials, DOE orders do 
not require NNSA to seek an independent cost estimate until just prior 
to establishing the project baseline, and project officials told us 
NNSA is preparing to have one conducted before the project baseline is 
established. However, until a quality independent cost estimate is 
completed on the entire project or another means of validating the 
estimate for the project, DOE and NNSA officials cannot be confident 
that the current cost estimate is completely credible.

With regard to CMRR's schedule, the project's schedule estimate fully 
met two and substantially met six out of nine best practices for a 
high-quality schedule as identified by our guide and minimally met 
one. For example, two of the best practices the estimate fully met 
concerned how well it (1) captured all of the project's activities, 
including design, construction, and other tasks that collectively form 
a comprehensive schedule, and (2) is successfully kept up-to-date. 
Table 2 lists best practices along with our assessment of the extent 
to which the project's schedule met each best practice.

Table 2: Extent to Which CMRR's Schedule Estimate Met Industry Best 
Practices:

Best practice: Capturing all activities; 
Overall assessment[A]: Fully met.

Best practice: Sequencing all activities; 
Overall assessment[A]: Substantially met.

Best practice: Assigning resources to all activities; 
Overall assessment[A]: Substantially met.

Best practice: Establishing the duration of all activities; 
Overall assessment[A]: Substantially met.

Best practice: Integrating schedule activities; 
Overall assessment[A]: Substantially met.

Best practice: Establishing the critical path for all activities; 
Overall assessment[A]: Substantially met.

Best practice: Identifying float between activities; 
Overall assessment[A]: Substantially met.

Best practice: Conducting a schedule risk analysis; 
Overall assessment[A]: Minimally met.

Best practice: Updating the schedule using logic and durations to 
determine dates; 
Overall assessment[A]: Fully met.

Source: GAO analysis of CMRR project schedule information.

[A] The ratings we used in this analysis are as follows: "Not met" 
means the CMRR provided no evidence that satisfies any part of a 
practice. "Minimally met" means the CMRR provided evidence that 
satisfies a small portion of a practice. "Partially met" means the 
CMRR provided evidence that satisfies about half of a practice. 
"Substantially met" means the CMRR provided evidence that satisfies a 
large portion of a practice. "Fully met" means the CMRR provided 
evidence that completely satisfies a practice. 

[End of table] 

The CMRR schedule estimate minimally met industry best practices for 
conducting a schedule risk analysis. Namely, according to our guide, a 
high-quality schedule requires a schedule risk analysis that uses 
already identified risks, among other things, to predict the level of 
confidence in meeting a project's completion date and the amount of 
contingency time needed to cover unexpected delays. CMRR project 
officials identified and documented hundreds of risks to the project, 
but these risks were not used in preparing a schedule risk analysis. 
For example, project officials identified the following three risks 
that are likely to occur: (1) a necessary electrical system upgrade 
that might not be completed in time for construction activities, (2) 
uncertainties associated with the flow of simultaneous design changes, 
and (3) noncompliance with certain quality assurance standards for 
nuclear facilities. These risks could cause delays, ranging anywhere 
from 1 to 5 years. Nevertheless, the project's schedule risk analysis 
identified only a 1-year schedule contingency for the entire project. 
If NNSA is unable to successfully mitigate these risks and if they 
occur together, there is a high likelihood that the 1-year contingency 
that NNSA established may be exceeded. As a result, project officials 
cannot be certain the schedule estimate contains all identified risks 
in its risk analysis. Project officials told us that, before the 
project baseline is established, they expect to have a schedule risk 
analysis that includes identified risks and that they are in the early 
stages of developing a plan to do so.

NNSA is taking steps to mitigate the risks that have been identified 
and, because the project is still in early stages, many risks may be 
resolved. For example, to mitigate the risk that the electrical system 
upgrade would not be completed in time to avoid a delay in 
construction activities, project officials have identified specific 
steps to help ensure that the upgrade is performed in a timely manner. 
However, without a schedule risk analysis that contains risks 
identified by CMRR project officials, NNSA cannot be fully confident, 
once it decides to resume CMRR construction plans, that sufficient 
schedule contingency is established to ensure that the project will be 
completed on time and within estimated costs. As a result, overall 
project costs could potentially exceed NNSA's April 2010 estimate of 
between $3.7 billion and $5.8 billion and NNSA had not yet determined 
the impact to the project's costs of its recent decision to defer CMRR 
construction for at least 5 years. Appendix III contains additional 
information on each practice and our assessment of the estimate 
compared to best practices.

NNSA Considered Several Options to Preserve Plutonium-Related Research 
Capabilities, but Ultimately Chose to Build a Minimally Sized Facility 
at Los Alamos:

To replace the plutonium-related research capabilities in Los Alamos's 
deteriorating Chemistry and Metallurgy Research facility, NNSA 
considered several options. In the end, NNSA decided to build a 
minimally sized CMRR facility at Los Alamos with a broad suite of 
capabilities to meet nuclear weapons stockpile needs over the long-
term. These capabilities would also be used to support plutonium-
related research needs of other departmental missions. NNSA evaluated 
these options based on their expected effect on cost, schedule, risk, 
and ability to meet the plutonium-related research needs of the 
nuclear weapons stockpile stewardship program.

NNSA first focused on identifying and replacing the capabilities 
necessary to maintain and modernize the nuclear weapons stockpile. 
Specifically, these capabilities included those necessary to study the 
chemical and metallurgic properties of plutonium pits to ensure that 
they are properly produced, certified, and monitored over time so they 
remain safe and reliable[Footnote 14]. For example, to ensure that a 
nuclear weapon will function as intended, the plutonium inside of the 
pits needs to meet strict specifications. Meeting these specifications 
requires having the capability to analyze and characterize the 
plutonium's chemistry and material properties. The specifications 
require NNSA to measure several chemical attributes, including 
chemical composition and impurities, as well as the pit's structural 
attributes, such as the metal's microscopic grain size, its texture, 
any potential defects, and its weld characteristics. NNSA identified 
at least 58 distinct capabilities that will be required in the new 
facility to allow it to conduct the analyses necessary to build at 
least one pit of every type currently in the stockpile.[Footnote 15] 
NNSA determined that as many as 79 capabilities may be required if 
NNSA needs to manufacture a larger quantity of pits--up to its high 
estimate of 80 pits per year, which is the Department of Defense's 
published military requirement for pit production. In addition to 
research capabilities, NNSA determined that the new facility would 
need to provide other capabilities to support research operations. In 
particular, long-term plutonium storage space is needed to support 
plutonium-related research at CMRR.

To house these needed capabilities, NNSA assessed three potential 
sizes for a new facility--22,500 square feet, 31,500 square feet, and 
40,500 square feet. The 40,500 square foot option included about 
10,500 square feet of unequipped space--known as contingency space--to 
allow for program changes, such as increased pit manufacturing. In 
addition, this contingency space could accommodate users outside Los 
Alamos, such as researchers from Livermore. However, in 2004, NNSA 
chose the smallest and least expensive option--22,500 square feet. 
NNSA officials told us that cost was the primary driver of this 
decision.

NNSA's choice to build a minimally sized facility was questioned in 
two studies conducted subsequent to NNSA's decision in 2004. 
Specifically, a Los Alamos study conducted in 2006 found that 
increasing CMRR's size by 9,000 square feet--to a total of 31,500 
square feet--would be the best option based on cost, schedule, risk, 
and the facility's ability to meet plutonium-related research needs. 
[Footnote 16] Furthermore, a separate independent study prepared for 
NNSA in 2006 determined that adding 9,000 square feet to CMRR would 
lower risk and increase facility flexibility but could cost an 
additional $179 million.[Footnote 17] Nevertheless, NNSA officials 
told us that a smaller sized facility had the best chance of 
minimizing costs. NNSA officials acknowledge that the smaller size 
option poses more risk because the facility will include no 
contingency space. This space may be necessary, for example, to 
respond to potential increases in pit production needs if in the 
future they unexpectedly approach or exceed 80 pits per year. If this 
occurs, and no contingency space is available, other plutonium-related 
research beyond that required for the nuclear weapons stockpile will 
also likely be affected. According to NNSA and Los Alamos officials, 
these risks could be mitigated by conducting some nonnuclear weapons 
plutonium-related research at other facilities, such as Los Alamos's 
PF-4 pit production facility. However, PF-4 also has ongoing 
laboratory and storage limitations and may not be able to accommodate 
these other nonweapons plutonium activities.

Subsequent to its 2004 decision to build CMRR at Los Alamos, NNSA 
continued to study other locations for consolidating plutonium-related 
research within the nuclear security enterprise. Specifically, as part 
of its development of a complexwide strategy to modernize nuclear 
research, development, and production facilities that support the 
nuclear weapons stockpile, NNSA studied consolidating the nation's 
plutonium-related research capabilities at Los Alamos, the Pantex 
Plant in Texas, the Nevada National Security Site in Nevada, the 
Savannah River Site in South Carolina, and the Y-12 National Security 
Complex in Tennessee. In December 2008, NNSA decided to consolidate 
plutonium research at Los Alamos and reaffirmed its earlier 2004 
decision to locate the new CMRR at Los Alamos. Consolidating plutonium-
related research capabilities at Los Alamos presented several 
advantages, including lower costs and risks when compared to other 
locations. For example, colocating plutonium analytical capabilities 
with Los Alamos's pit manufacturing capabilities reduced the costs and 
risks of protecting plutonium from potential theft. As part of NNSA's 
decision to consolidate plutonium research at Los Alamos, NNSA also 
decided that the CMRR would be used to support plutonium-related 
research needs of other non-weapons activities, including nuclear 
nonproliferation activities; homeland security activities, such as 
nuclear forensics and nuclear counterterrorism; waste management; and 
material recycle and recovery programs. However, the size of the 
planned CMRR facility--22,500 square feet--has not changed since 
NNSA's initial 2004 decision, which calls into question the facility's 
ability to support the needs of these other activities.

CMRR May Meet Nuclear Weapons Stockpile Requirements but May Not 
Accommodate Other Plutonium-Related Research Needs:

NNSA's plans to construct the CMRR focused on meeting changing nuclear 
weapons stockpile requirements. However, CMRR may not be able to 
accommodate all stockpile and other plutonium-related research needs, 
particularly as other NNSA facilities reduce or end their plutonium 
research activities as a result of broader NNSA plans to consolidate 
its plutonium activities.

NNSA's CMRR Plans Focus on Meeting Nuclear Weapons Stockpile 
Requirements, But Some Plutonium-Related Work for the Stockpile May 
Not Be Accommodated:

NNSA's plans to construct the CMRR primarily focus on maintaining 
plutonium-related research capabilities that are necessary for meeting 
nuclear weapons stockpile requirements. NNSA designed the CMRR to 
support the capabilities necessary for maintaining the safety and 
reliability of the nuclear stockpile--namely, the testing, 
manufacturing, and certification of the pits--and, in particular, 
plutonium-related research capabilities, such as analytical chemistry 
and materials characterization, and associated special nuclear 
materials vault storage. More specifically, in designing the CMRR, 
NNSA analyzed detailed data on past nuclear weapons activities 
conducted at Los Alamos, including information on the frequency of 
plutonium samples analyzed over time and the expected annual 
requirement for manufacturing new pits to determine the plutonium-
related research capabilities the new facility would need to meet NNSA 
weapons program requirements. For example, NNSA studied the number of 
plutonium samples that had been processed in 2007 at the old Chemistry 
and Metallurgy Research facility for analytical chemistry and 
materials characterization work and used the number as an average 
representation in assuming future workloads. In addition, NNSA 
considered the numbers of specific pieces of equipment and the 
associated square footage of laboratory space needed to conduct 
specific analytical chemistry and material characterization work.

In its planning, NNSA considered how plutonium-related capabilities in 
the CMRR could meet changing stockpile requirements, including NNSA's 
established upper limit of producing 80 pits per year. NNSA designed 
the facility to ensure that it can meet the pit production 
requirements regardless of the specific number of pits produced--or, 
in other words, the number of pits produced each year will not 
significantly affect the capabilities NNSA will need in the new 
facility, although capacity limits cap the quantity of new pits at 80 
pits per year. For example, NNSA's 2009 CMRR Program Requirements 
document states that the new facility will have laboratory spaces 
designed in a way that is flexible and modular to accommodate changes 
in the mission and the dynamic conditions associated with normal 
processing and maintenance activities in a laboratory environment.

NNSA officials indicated that they are confident that the CMRR will 
generally meet nuclear weapons activities needs and accommodate 
changes in the nuclear weapons stockpile requirements, including the 
ability to produce up to 80 pits per year. However, some weapons 
activities capabilities that currently exist at other NNSA sites may 
no longer be available to the nuclear security enterprise because of 
broader NNSA modernization plans to consolidate plutonium activities. 
As part of NNSA's plan to consolidate plutonium related work at Los 
Alamos, the CMRR was designed to absorb some plutonium-related 
research from other facilities as those other facilities reduce or end 
their weapons activities work. For example, Livermore's Superblock 
facility is equipped with the necessary systems to safely work with 
plutonium and to support extending the life of certain warheads in the 
nuclear weapons stockpile. Under NNSA's strategy to consolidate 
plutonium work at Los Alamos, the majority of Livermore's plutonium is 
scheduled to be removed in 2012, and some of this research will be 
discontinued at Superblock. NNSA plans to have the CMRR take on much 
of this work; however, Livermore officials told us they believe that 
NNSA may still lose some plutonium-related capabilities once some 
research is discontinued at Superblock. For example, NNSA may face a 
gap in the plutonium-related capabilities necessary to help improve 
nuclear warhead surety--that is, safety, security, and use control. 
NNSA has not planned for another facility to take over this work, and 
NNSA officials told us that the CMRR has not been designed to support 
this surety research. Furthermore, NNSA and Los Alamos officials told 
us that NNSA may also lose some pit testing capabilities that only 
take place in the Superblock at Livermore and are expected to be 
discontinued there in 2013. Pit testing includes thermal, vibration, 
and other environmental tests on pits that ensure that the weapon can 
successfully function from the time it is in the stockpile until it is 
deployed and reaches a target. Livermore officials told us that CMRR 
will not accommodate pit environmental testing because the systems 
used to conduct the environmental tests could cause vibrations through 
the rest of the facility. This could disrupt other work that requires 
precision instrumentation. Livermore officials also told us that these 
pit environmental testing capabilities are necessary to help meet 
nuclear weapons stockpile requirements. Because the CMRR was not 
intended to support all of these capabilities, NNSA will need to find 
another location if this plutonium-related work currently being 
conducted at Livermore is to be continued. NNSA has begun studying the 
extent to which the environmental pit testing capabilities will be 
needed, and if so, where they will be located. However, NNSA currently 
has no final plans for relocating them elsewhere.[Footnote 18]

CMRR May Not Meet Other Plutonium-Related Research and Storage Needs 
As DOE and NNSA Have Not Fully Analyzed Programs Outside of Nuclear 
Weapons Stockpile Work:

DOE and NNSA conduct important plutonium-related research in other 
mission areas outside of nuclear weapons stockpile work, and it is 
unclear whether the CMRR as designed will be large enough to 
accommodate these nonweapons activities because they have not 
comprehensively studied their long-term research and storage needs. A 
NNSA record of decision states that the CMRR will support other 
national security missions involving plutonium-related research, 
including nonproliferation, nuclear forensics, and nuclear 
counterterrorism programs. For example, NNSA plans to use analytical 
chemistry capabilities in CMRR to perform nuclear forensics work that 
would be needed to, among other things, identify the source of and 
individuals responsible for any planned or actual use of a nuclear 
device.

However, DOE and NNSA have not comprehensively studied the long-term 
plutonium-related research and storage needs of programs outside of 
NNSA's nuclear weapons stockpile work and therefore cannot be sure 
that the CMRR can accommodate them. In particular, DOE does not have 
important information on departmentwide analytical chemistry and 
material characterization research and storage needs, which can be 
helpful in making fully informed planning decisions about its long-
term infrastructure and consolidation plans for the nuclear security 
enterprise. As we have previously reported, conceptual planning for a 
building--a process by which an organization's facility needs are 
identified and understood--is the critical phase of any successful 
building project development.[Footnote 19] This conceptual planning 
results in a building design that should be well defined according to 
an organization's needs and include input from all key stakeholders 
before it is designed. NNSA and Los Alamos officials told us that the 
programs supporting mission areas outside of the nuclear stockpile 
work--including NNSA's Office of National Technical Nuclear Forensics 
and Office of Fissile Materials Disposition--were generally not 
involved in planning the CMRR. Los Alamos officials said that they 
thought that there was too much time before the new facility would be 
operating for other mission areas to know their specific needs. 
However, by not including input from all the mission areas during the 
design of CMRR, NNSA has risked not knowing all of the potential needs 
and uses for the new facility to complement its important missions 
outside of the nuclear weapons stockpile work.

NNSA and Los Alamos officials told us they are confident that the CMRR 
will be able to support other missions' needs for plutonium-related 
research, but the facility's design does not include dedicated space 
for other missions' research needs and includes little to no 
contingency space. Los Alamos officials told us that shifting nuclear 
stockpile requirements and changing pit production rates may impact 
specific workloads and space capacity issues but that the CMRR is 
still too far from becoming operational to estimate these impacts. For 
example, if stockpile requirements are such that the higher boundary 
of pit production capacity is needed--up to 80 pits per year--then the 
new facility will have little, if any, space to address other 
missions' research.[Footnote 20] Moreover, in a 2008 analysis of the 
CMRR's design, NNSA stated that Los Alamos is uncertain that it will 
be able to conduct all of NNSA's plutonium-related research operations 
within the 22,500 square feet of laboratory space in the facility. 
NNSA planning documents indicate that CMRR is intended to support 
nonweapons activity needs only if additional capacity remains after 
all weapons-related activities are supported. If additional capacity 
is not available, NNSA may face the prospect of not being able to use 
the new facility for one of its intended purposes of supporting 
certain plutonium-related research for missions outside of nuclear 
weapons stockpile work. A 2004 NNSA study suggested that this could 
effectively result in national security, nonproliferation, and 
environmental management programs potentially not performing in a cost-
effective, compliant, and timely manner.[Footnote 21]

In addition, the CMRR has been designed to support Los Alamos and 
NNSA's mission need to store significant quantities of nuclear 
material associated with the plutonium operations in a safe and secure 
manner using vault storage. Specifically, NNSA plans to shift all of 
Los Alamos' current vault storage materials from its existing 
chemistry and metallurgy facility and overflow inventory from the PF-4 
facility to the CMRR.[Footnote 22] However, Los Alamos officials told 
us that Los Alamos may not have enough storage space even after the 
CMRR is complete. NNSA plans to first use the newly available vault 
space in the CMRR for short-term, daily storage of nuclear materials 
being used for programmatic work and then use any remaining space for 
long-term storage. NNSA designed the CMRR without much long-term vault 
storage because these materials were initially planned to be shipped 
offsite for disposal. However, due to broader departmental challenges 
with other NNSA sites receiving materials for disposal, Los Alamos may 
not be able to ship its nuclear material off-site. If this is the 
case, Los Alamos officials told us that they may have to find 
additional long-term vault storage. This could also potentially affect 
Los Alamos' ability to receive nuclear materials from other sites 
under NNSA's consolidation strategy. In addition, Los Alamos officials 
told us that NNSA is still considering facility layout options that 
would allow for vault storage space to be configured for other 
operations and lab space. If this space is used for functional 
laboratory space rather than storage, less space will be available for 
short-term vault storage than NNSA originally thought.

Conclusions:

Once NNSA resumes the CMRR project and constructs the facility, CMRR 
will play an important role in ensuring the continued safety and 
reliability of the U.S. nuclear weapons stockpile. The CMRR can 
potentially offer NNSA the opportunity to improve efficiency, save 
costs, and reduce safety hazards for workers. Because of the 
facility's importance to the stockpile, multibillion dollar price tag, 
the inherent challenges in building facilities that can safely and 
securely store plutonium, and NNSA's ongoing difficulties managing 
large projects, it is critical that NNSA and Congress have accurate 
estimates of the project's costs and schedules, particularly when the 
CMRR project is resumed. After facing a nearly six-fold increase in 
estimated cost and schedule delays, NNSA's most recent cost and 
schedule estimates generally meet industry best practices, but there 
are important weaknesses that call these estimates' reliability into 
question. For example, an independent cost estimate--the most rigorous 
method to validate major cost elements that is performed by an entity 
that has no stake in the approval of the project--has not yet been 
conducted. To its credit, NNSA plans to have an independent cost 
estimate conducted prior to the completion of CMRR's project baseline 
once the project is resumed. With regard to the project's schedule 
estimate, however, NNSA cannot yet provide high assurance that all 
project risks are fully accounted for in the project's schedule risk 
analysis that is used for updating the project's schedule contingency 
estimates. As a result, NNSA cannot yet be fully confident that, once 
it decides to resume the CMRR project, the project will meet its 
estimated completion date, which could lead to further delays and 
additional costs.

However, reliable cost and schedule estimates for CMRR that fully meet 
industry best practices are of little use if DOE's and NNSA's mission 
needs are not met. Constructing CMRR is an important part of NNSA's 
strategy to modernize its nuclear weapons facilities into a smaller 
and more responsive, efficient, and secure infrastructure to meet the 
changing requirements of the nuclear weapons stockpile. The CMRR was 
intended to support the plutonium-related research and storage needs 
of other DOE and NNSA national security missions and activities 
outside of the nuclear weapons stockpile work, including homeland 
security and nuclear nonproliferation activities; but because NNSA 
decided early in the project to reduce the size of the proposed 
facility to save money, CMRR may now lack the ability to accommodate 
these other research needs. In particular, the planned removal of most 
plutonium from Livermore presents NNSA with a dilemma in that the 
primary benefit of consolidating plutonium at Los Alamos--lower 
security costs--may be offset by the need to replace Lawrence 
Livermore National Laboratory's plutonium research, storage, and 
environmental testing capabilities. Importantly, when NNSA decided to 
consolidate plutonium operations at Los Alamos, it did not fully 
consider whether planned or existing facilities at Los Alamos would be 
capable of continuing plutonium work being conducted elsewhere. For 
example, CMRR was not intended to accommodate the thermal, vibration, 
and other environmental pit testing that Livermore currently conducts 
because the vibrations this type of testing creates could disrupt 
other work at CMRR that requires precision instrumentation. 
Nevertheless, this type of testing is necessary to meet nuclear 
weapons stockpile requirements and so must be conducted somewhere. The 
full extent of the potential shortfall in plutonium research 
capabilities is not well-understood because DOE and NNSA have not 
comprehensively assessed their plutonium-related research, storage, 
and environmental testing needs. Plutonium research for the nuclear 
weapons stockpile and for other missions may have to compete for 
limited laboratory and storage space in CMRR and other facilities at 
Los Alamos, especially if the demand for newly manufactured pits 
unexpectedly increases. As a result, expansion of CMRR or construction 
of costly additional plutonium research, storage, and testing 
facilities at Los Alamos or elsewhere may be needed sometime in the 
future.

Recommendations for Executive Action:

To strengthen cost and schedule estimates for the CMRR and ensure 
needed plutonium research needs are sufficiently accommodated, we 
recommend that the Secretary of Energy take the following three actions:

1. Once NNSA resumes the CMRR project and prior to establishing a new 
cost and schedule baseline, incorporate all key risks identified by 
CMRR project officials into the project's schedule risk analysis, and 
ensure that this information is then used to update schedule 
contingency estimates, as appropriate.

2. Conduct a comprehensive assessment of needed plutonium-related 
research, storage, and environmental testing needs for nuclear weapons 
stockpile activities as well as other missions currently conducted at 
other NNSA and DOE facilities, with particular emphasis on mitigating 
the consequences associated with eliminating plutonium research, 
storage, and environmental testing capabilities from NNSA's Lawrence 
Livermore National Laboratory.

3. Using the results of this assessment, report to Congress detailing 
any modifications to existing or planned facilities or any new 
facilities that will be needed to support plutonium-related research, 
storage, and environmental testing needs for nuclear weapons stockpile 
activities as well as other missions conducted by NNSA and DOE.

Agency Comments and Our Evaluation:

We provided NNSA with a draft of this report for its review and 
comment. In its written comments, reproduced in appendix IV, NNSA 
generally agreed with our recommendations to conduct a comprehensive 
assessment of needed plutonium-related research, storage, and 
environmental testing needs and to report to Congress on any 
modifications to existing or planned facilities or any new facilities 
that will be needed to support these needs. However, NNSA disagreed 
with our recommendation to incorporate all key risks identified by 
project officials into the project's schedule risk analysis.

Specifically, NNSA stated that, subsequent to receiving our draft 
report for its comments, the President's budget request for fiscal 
year 2013 was released and resulted in several changes to the funding 
and execution of the CMRR project. In particular, construction of the 
CMRR is now to be deferred for at least 5 years. Therefore, NNSA 
stated that it is conducting additional analysis to determine the most 
effective way to provide analytical chemistry, materials 
characterization, and storage capabilities that were originally 
intended for the CMRR through the use of existing infrastructure. As 
part of this analysis, NNSA stated that it will evaluate options to 
use existing facilities at other sites. We believe this is consistent 
with our recommendation that NNSA conduct a comprehensive assessment 
of needed plutonium-related research, storage, and environmental 
testing needs and that NNSA's decision to defer construction of the 
CMRR will give it sufficient time to conduct this assessment.

NNSA also commented that it will continue to work with Congress and 
other stakeholders as it adjusts its plutonium strategy. In our view, 
this is also consistent with our recommendation to report to Congress 
on any modifications to existing or planned facilities or any new 
facilities that will be needed to support plutonium-related research, 
storage, and environmental testing needs for nuclear weapons stockpile 
activities as well as other missions conducted by NNSA and DOE.

With regard to our recommendation to incorporate all key risks 
identified by CMRR project officials into the project's schedule risk 
analysis, NNSA commented that spending project money to update the 
CMRR project's schedule would not be prudent because of the 
construction delay. Therefore, NNSA disagreed with the recommendation. 
NNSA stated that its efforts in the near term would be focused on 
closing out the current design and that any future efforts will 
require updated cost and schedule estimates. We agree with NNSA that 
it is not necessary to update the project's schedule at this time 
because of the recently announced construction delay; however, we 
maintain that it is important that all project risks are fully 
accounted for in the CMRR's schedule once the project is resumed. 
Therefore, we clarified our recommendation to specify that NNSA should 
take action to ensure that the CMRR's schedule risk analysis is 
appropriately revised to account for all project risks when NNSA 
resumes the project and before it establishes a new cost and schedule 
baseline.

We are sending copies of this report to the Secretary of Energy; the 
Administrator of NNSA; the Director, Office of Management and Budget; 
the appropriate congressional committees; and other interested 
parties. In addition, the report is available at no charge on the GAO 
website at [hyperlink, http://www.gao.gov].

If you or your staffs have any questions about this report, please 
contact me at (202) 512-3841 or aloisee@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made major 
contributions to this report are listed in appendix V. 

Signed by: 

Gene Aloise: 
Director, Natural Resources and Environment: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology:

Our objectives were to examine (1) changes in the cost and schedule 
estimates for the construction of the facility and the extent to which 
its most recent estimates reflect best practices, (2) options the 
National Nuclear Security Administration (NNSA) considered to ensure 
that plutonium-related research activities could continue as needed, 
and (3) the extent to which NNSA's plans to construct the Chemistry 
and Metallurgy Research Replacement Nuclear Facility (CMRR) and its 
consideration of options reflected changes in nuclear weapons 
stockpile requirements and other plutonium-related research needs.

To examine the project's cost and schedule estimates and the extent to 
which its current estimates reflect best practices, we reviewed 
relevant NNSA documents and met with agency and contractor officials 
on the changes that have occurred to date and the reasons for them. We 
compared NNSA's most recent detailed cost and schedule estimates with 
industry best practices contained in our cost estimating and 
assessment guide and discussed them with project officials to give 
them the opportunity to provide feedback on our assessment. Our review 
examined specifically those NNSA cost estimates that were prepared in 
April 2010 and schedule estimates, which at the time of our review 
were updated as of May 2011 or more recent for some portions of the 
schedule. As such, the cost and schedule estimates we reviewed do not 
reflect NNSA's 5-year construction deferral recently announced in 
February 2012 and NNSA has not yet determined the potential long-term 
cost impact of this delay.

To examine the options NNSA considered to continue plutonium-related 
analytical work, we reviewed NNSA and contractor documents on 
plutonium research needs and the various options available to meet 
those needs. We also met with NNSA and contractor officials to better 
understand how these options were analyzed to determine the best 
approach to fulfill NNSA's mission. While NNSA evaluated options on 
how to best meet its mission needs, it may have also evaluated 
alternatives based on the environmental impact of building the CMRR. 
As such, our review examined the options NNSA assessed to maintain the 
capabilities for plutonium-related analytical chemistry, material 
characterization, and storage and did not address NNSA's compliance 
with requirements of the National Environmental Policy Act. We also 
met with NNSA and contractor officials to gain a better understanding 
of how these options were analyzed to determine the best approach to 
fulfill NNSA's mission.

To determine the extent to which NNSA's plans reflect changes in 
nuclear weapons stockpile requirements, we reviewed NNSA analyses that 
were used to support CMRR project decisions and met with NNSA 
officials to determine if these analyses were comprehensive and 
reflected up-to-date nuclear weapons stockpile requirements. We also 
visited Los Alamos and Lawrence Livermore National Laboratories. To 
ensure the data we used were sufficiently reliable, we compared 
information gathered from a variety of data sources. For example, we 
interviewed officials from both Los Alamos and Lawrence Livermore 
National Laboratories to obtain separate and independent perspectives 
on CMRR project plans. We determined the data were sufficiently 
reliable for our purposes.

We conducted this performance audit from February 2011 through 
February 2012 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives.

[End of section]

Appendix II: Summary Assessment of CMRR's Cost Estimate Compared to 
Industry Best Practices:

Best practice characteristic: Comprehensive; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The cost estimate includes all life cycle 
costs; 
Detailed assessment[A]: Substantially met. The total project cost for 
the construction of the Nuclear Facility is $4.2 billion. Government 
and contractor costs are included. However, operations and retirement 
costs are not included. These costs were not included because there 
was no mandate to estimate them. The cost estimate spans from start of 
construction in June 2010 to completion in 2020 with a schedule 
contingency through 2022. 

Best practice characteristic: Comprehensive; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The cost estimate completely defines the 
program, reflects the current schedule, and is technically reasonable; 
Detailed assessment[A]: Fully met. Technical descriptions were 
provided in multiple documents such as the "CMRR Nuclear Facility (NF) 
Estimate at Complete Forecast-April 2010," the Los Alamos CMRR Mission 
Need Statement, the Program Requirements Documents, the WBS 
dictionary, and the "Final Environmental Impact Statement for the 
Chemistry and Metallurgy Project." 

Best practice characteristic: Comprehensive; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The cost estimate work breakdown structure is 
product-oriented, traceable to the statement of work/objective, and at 
an appropriate level of detail to ensure that cost elements are 
neither omitted nor double-counted; 
Detailed assessment[A]: Partially met. The work breakdown structure 
and work breakdown structure dictionary are product oriented and the 
work breakdown structure flows down to level 4 of the program, 
project, or task. A statement of work was provided in the form of a 
mission need statement; however, it is not easily reconciled with the 
work breakdown structure dictionary. 

Best practice characteristic: Comprehensive; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The estimate documents all cost-influencing 
ground rules and assumptions; 
Detailed assessment[A]: Fully met. Cost influencing ground rules and 
assumptions can be found in the CMRR Estimate Update Execution Plan. 
Budget constraints and escalation are addressed. A list of high-level 
risk drivers along with the handling costs and risk input information 
was provided. Exclusions to the cost estimate are noted in the 
documents. 

Best practice characteristic: Well documented; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The documentation captures the source data 
used, the reliability of the data, and how the data were normalized; 
Detailed assessment[A]: Partially met. The data was analyzed and high-
level cost drivers have been addressed as well as unit rates and 
quantities. Source data used to develop the estimate were found. The 
cost estimate was based on historical data from other Department of 
Energy (DOE) sites and the data was normalized. However, the 
independent review team found inconsistencies and discrepancies of 
quantities (hours) and costs. In addition, the review team reported 
that even though the basis of estimate referred to current contract 
awards or proposals, no reference was made to specific contracts or 
proposals by date and number. 

Best practice characteristic: Well documented; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The documentation describes in sufficient 
detail the calculations performed and the estimating methodology used 
to derive each element's cost; 
Detailed assessment[A]: Substantially met. While not explicitly 
stating what methodology was used, the pricing approach summary 
indicates that the estimate was developed using a combination of the 
build-up method and extrapolation from pricing information and 
productivity rates from other DOE sites. However the calculations 
involved were not clearly shown. 

Best practice characteristic: Well documented; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The documentation describes, step by step, how 
the estimate was developed so that a cost analyst unfamiliar with the 
program could understand what was done and replicate it; 
Detailed assessment[A]: Substantially met. The documentation for the 
estimate contains a summary narrative about the project as well as 
high-level cost summaries. The documentation discusses risk and 
contingency reserve. However, it does not address sensitivity although 
a sensitivity analysis was performed. Narrative on how the sensitivity 
analysis was conducted was not provided. 

Best practice characteristic: Well documented; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The documentation discusses the technical 
baseline description and the data in the baseline is consistent with 
the estimate; 
Detailed assessment[A]:Substantially met. There are technical 
descriptions discussed in the documentation that are consistent with 
the basis of estimate and the work outlined in the detail cost 
estimate spreadsheets. However, we are unable to map specific 
technical descriptions as outlined in the requirements document to 
cost elements in the high-level or detailed cost estimates. During the 
site visit, project officials showed us how the scope of work in the 
work breakdown structure dictionary was written in a way to illustrate 
how the scope of work was captured. 

Best practice characteristic: Well documented; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The documentation provides evidence that the 
cost estimate was reviewed and accepted by management; 
Detailed assessment[A]: Partially met. Los Alamos policy states that 
reviews shall be performed. According to project officials, these 
reviews typically include an integrated project team review, 
functional manager review, directorate review, and in the case of 
projects of high complexity or risk, an external corporate review 
and/or DOE Los Alamos Site Office review. A CMRR functional review was 
held March 12, 2010, and the review of the current estimate was listed 
on the meeting agenda. However, without further documentation we are 
unable to determine whether or not a briefing was given to management 
that clearly explains the detail of the cost estimate--including 
presentation of lifecycle costs, ground rules and assumptions, 
estimating methods and data sources as they relate to each work 
breakdown structure element, results of sensitivity analysis, risk and 
uncertainty analysis, and if a desired level of confidence was 
reached. Additionally, it is not clear that an affordability analysis, 
contingency reserve, conclusions, or recommendations were discussed 
with management. The documentation also does not show management's 
acceptance of the cost estimate. 

Best practice characteristic: Accurate; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The cost estimate results are unbiased, not 
overly conservative or optimistic, and based on an assessment of most 
likely costs; 
Detailed assessment[A]: Substantially met. Risk and uncertainty 
analyses were performed providing an 84 percent confidence level. 
There are three components that contribute to the total contingency 
value established for the project--schedule, estimate, and technical 
and programmatic risk analysis. 

Best practice characteristic: Accurate; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The estimate has been adjusted properly for 
inflation; 
Detailed assessment[A]: Substantially met. The documentation contained 
information on escalation rates. However, it is unclear how the cost 
estimate data were normalized. For example, costs are listed but are 
not labeled as constant or then-year dollars. Detailed calculations on 
how escalation was applied to the cost estimate are not documented. 

Best practice characteristic: Accurate; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The estimate contains few, if any, minor 
mistakes; 
Detailed assessment[A]: Substantially met. The numbers shown in the 
estimate at complete document and the cost estimate spreadsheet are 
accurate and the independent review team found only one minor mistake 
in their review of the estimate. However, we were not provided access 
to the detailed calculations behind the spreadsheet to check that the 
estimate was calculated correctly. 

Best practice characteristic: Accurate; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The cost estimate is regularly updated to 
reflect significant changes in the program so that it always reflects 
current status; 
Detailed assessment[A]: Substantially met. The CMRR Project Control 
Plan outlines a formal change control process that is to be executed 
in accordance with the Los Alamos Project Management and Site Services 
Directorate as well as the CMRR Baseline Change Control Board. These 
documents provide an approach to document, communicate, and approve 
potential changes to scope, cost, and schedule, and they provide the 
basis for incorporating changes into the project baseline and/or the 
forecast estimate at completion. These documents also describe the 
activities and responsibilities for making changes to the baseline. 

Best practice characteristic: Accurate; 
Overall assessment[A]: Substantially met; 
Detailed best practice: Any variances between planned and actual costs 
are documented, explained, and reviewed; 
Detailed assessment[A]: Substantially met. Earned value is entered for 
each work package based on the earned value method indicated for that 
work package. Progress is reported in terms of percent complete by 
work package and is verified, analyzed, and reported to the project 
controls team. This information is then analyzed by the project 
controls team and control account managers and reviewed with CMRR 
management as the final reports are completed and published. However, 
there is no evidence of the cost estimate being updated to capture 
variances from the earned value system. 

Best practice characteristic: Accurate; 
Overall assessment[A]: Substantially met; 
Detailed best practice: The estimate is based on a historical record 
of cost estimating and actual experiences from other comparable 
programs; 
Detailed assessment[A]: Substantially met. Part of the estimate was 
developed using the engineering build up method which includes 
historical data from other DOE/NNSA sites (Waste Treatment Plant, 
Mixed Oxide Fuel Fabrication Facility, and two chemical 
demilitarization facilities). The reliability of the data is 
documented where confidence levels associated with quantity, 
productivity, labor, and nonlabor pricing are addressed. However, for 
some of the data, the sources were not provided and there was no 
evidence that earned value data was used to develop or update the 
estimate. 

Best practice characteristic: Credible; 
Overall assessment[A]: Partially met; 
Detailed best practice: The cost estimate includes a sensitivity 
analysis--a technique that identifies a range of possible costs based 
on varying major assumptions, parameters, and data inputs; 
Detailed assessment[A]: Substantially met. CMRR conducted some sort of 
sensitivity analysis. No documentation was given providing a narrative 
on how the sensitivity analysis was conducted--including whether high 
percentages of cost were determined and how their parameters and 
assumptions were examined. Additionally, it cannot be determined 
whether the outcomes were evaluated for parameters most sensitive to 
change or how this analysis was applied to the estimate. However, 
during a site visit, Los Alamos officials provided a copy of a report 
that shows how a sensitivity analysis was applied to the nuclear 
facility cost estimate. For this assessment, a high and low range was 
determined. Some of the factors that were varied included overhead and 
General and Administrative rates, and escalation. 

Best practice characteristic: Credible; 
Overall assessment[A]: Partially met; 
Detailed best practice: A risk and uncertainty analysis was conducted 
that quantified the imperfectly understood risks and identified the 
effects of changing key cost driver assumptions and factors; 
Detailed assessment[A]: Substantially met. The cost estimate includes 
contingency costs for schedule ($99 million), cost estimate ($508 
million) and technical and programmatic risks ($404 million). While a 
schedule risk analysis was performed that identified $99 million in 
schedule contingency, it is not clear how this analysis was done as no 
supporting documentation was provided. An independent review team 
assessed the schedule risk analysis and found that the risk model did 
not contain enough detail to allow specific risk events to be 
associated with the schedule activities they affect. Documentation 
supporting the cost estimate ($508 million) risk and uncertainty 
analysis was conducted via a Monte Carlo simulation which established 
an 84 percent confidence level for cost estimate uncertainty. The 
process by which this analysis was done is well documented and 
includes the contingency level range results. However, this risk and 
uncertainty analysis only reviewed classic cost estimate contingency 
and did not assess technical, programmatic or schedule risks. In 
addition, the independent review team found that the cost risk 
uncertainty analysis was done at a summary level so it does not fully 
reflect the uncertainty of the design costs associated with 
uncertainty related to quantities or prices listed. 

Best practice characteristic: Credible; 
Overall assessment[A]: Partially met; 
Detailed best practice: Major cost elements were crossed checked to 
see whether results were similar; 
Detailed assessment[A]: Partially met. Documentation was provided that 
shows comparison of selected CMRR cost elements against cost estimates 
of other sites. 

Best practice characteristic: Credible; 
Overall assessment[A]: Partially met; 
Detailed best practice: An independent cost estimate was conducted by 
a group outside the acquiring organization to determine whether other 
estimating methods produce similar results; 
Detailed assessment[A]: Partially met. An independent cost estimate 
was not conducted by a group outside of the acquiring organization. 
However, an independent cost review was performed by the U.S. Army 
Corps of Engineers in conjunction with an experienced contractor. This 
independent cost review resulted in the identification of key findings 
which require a Corrective Action Plan. The independent cost review 
focused on engineering design, and nuclear facility special facility 
equipment engineering design. The independent cost review team had 24 
key findings and recommendations. 

Source: GAO analysis of CMRR project cost information.

[A] The ratings we used in this analysis are as follows: "Not met" 
means the CMRR provided no evidence that satisfies any of the 
practice. "Minimally met" means the CMRR provided evidence that 
satisfies a small portion of the practice. "Partially met" means the 
CMRR provided evidence that satisfies about half of the practice. 
"Substantially met" means the CMRR provided evidence that satisfies a 
large portion of the practice. "Fully met" means the CMRR provided 
evidence that completely satisfies the practice. 

[End of table] 

[End of section] 

Appendix III: Summary Assessment of CMRR's Schedule Estimate Compared 
to Industry Best Practices:

Best practice: Capturing all activities; 
Explanation: The schedule should reflect all activities as defined in 
the program's work breakdown structure, to include activities to be 
performed by both the government and its contractors; 
Detailed assessment[A]: Fully met. The schedule integrates all of the 
effort of NNSA, its contractor, and its major subcontractors. 

Best practice: Sequencing all activities; 
Explanation: The schedule should be planned so that it can meet 
critical program dates. To meet this objective, key activities need to 
be logically sequenced in the order that they are to be carried out. 
In particular, activities that must finish before the start of other 
activities (i.e., predecessor activities) as well as activities that 
cannot begin until other activities are completed (i.e., successor 
activities) should be identified. By doing so, interdependencies among 
activities that collectively lead to the accomplishment of events or 
milestones can be established and used as a basis for guiding work and 
measuring progress; 
Detailed assessment[A]: Substantially met. While we found that about 
16 percent of the activities were missing predecessors and successors, 
or had constraints, lags, and leads, the majority (84 percent) of the 
activities were logically sequenced. There are more than 2,400 
activities (5 percent) with missing or dangling predecessors or 
successors. There are summary tasks linked with logic (3 percent), but 
we have determined that they do not affect the credibility of the 
schedule. There are 123 activities (less than 1 percent) with start-to-
finish logic. There are 460 activities (less than 1 percent) that have 
10 predecessors or more. There are 590 activities (1 percent) 
scheduled with constraints, in addition to or substituting for 
complete logic. 

Best practice: Assigning resources to all activities; 
Explanation: The schedule should reflect what resources (i.e., labor, 
material, and overhead) are needed to do the work, whether all 
required resources will be available when they are needed, and whether 
any funding or time constraints exist; 
Detailed assessment[A]: Substantially met. Not all activities in the 
project schedule are resource loaded--only 3,757 activities (8 
percent) out of the 45,429 activities with positive remaining duration 
have resources assigned in the schedule we received. However, there is 
credible evidence that the program and Los Alamos manage resources in 
various ways outside the project schedule and that their resource 
solutions are fed back to the project schedule so that it is feasible 
given resource limits. 

Best practice: Establishing the duration of all activities; 
Explanation: The schedule should realistically reflect how long each 
activity will take to execute. In determining the duration of each 
activity, the same rationale, data, and assumptions used for cost 
estimating should be used. Further, these durations should be as short 
as possible and they should have specific start and end dates. 
Excessively long periods needed to execute an activity should prompt 
further decomposition of the activity so that shorter execution 
durations will result; 
Detailed assessment[A]: Substantially met. There are 1,642 activities 
(4 percent) with durations 44 days or greater, which means that the 
majority of the activities (96 percent) have activities that are of 
short duration. Contributing to this is the rolling wave approach to 
the schedule, where the near-term activities are detailed while 
activities further in the future are left in large planning packages 
until they become near-term, at which point they are broken down into 
their component activities. 

Best practice: Integrating schedule activities horizontally; 
Explanation: The schedule should be horizontally integrated, meaning 
that it should link the products and outcomes associated with already 
sequenced activities. These links are commonly referred to as handoffs 
and serve to verify that activities are arranged in the right order to 
achieve aggregated products or outcomes. The schedule should also be 
vertically integrated, meaning that traceability exists among varying 
levels of activities and supporting tasks and subtasks. Such mapping 
or alignment among levels enables different groups to work to the same 
master schedule; 
Detailed assessment[A]: Substantially met. As discussed previously in 
the "sequencing all activities," there are activities missing 
predecessor and successor logic as well as the presence of 
constraints, lags, and leads that call into question the adequacy of 
horizontal traceability. Vertical traceability was confirmed. The 
schedule hierarchy includes five levels, increasing in detail and 
specificity from top to bottom. 

Best practice: Establishing the critical path for all activities; 
Explanation: Using scheduling software, the critical path--the longest 
duration path through the sequenced list of key activities--should be 
identified. The establishment of a program's critical path is 
necessary for examining the effects of any activity slipping along 
this path. Potential problems that may occur on or near the critical 
path should also be identified and reflected in the scheduling of the 
time for high-risk activities; 
Detailed assessment[A]: Substantially met. This schedule's critical 
path has 5,479 activities with zero or negative total float. There are 
so many critical activities because of a number of constraints on 
intermediate milestones which is causing negative float on paths to 
those activities. However, these activities do not all drive the final 
delivery. Los Alamos officials said that when they baseline the 
schedule, they plan to remove many of the constraints that are causing 
negative float. Many of these constraints are there to enable Los 
Alamos to monitor status of intermediate milestones. 

Best practice: Identifying float between activities; 
Explanation: The schedule should identify float so that schedule 
flexibility can be determined. As a general rule, activities along the 
critical path typically have the least amount of float; 
Detailed assessment[A]: Substantially met. Of the remaining 
activities, 22 percent have unexplained large positive and large 
negative total float values. Even with agency review, these were 
present in the schedule. The total float values in many cases are 
several years long. There are 4,611 activities (10 percent) that have 
total float over 1,000 days or about 3.8 years. These high total float 
values are likely related to the incomplete logic described in the 
"sequencing all activities" best practice. 

Best practice: Conducting a schedule risk analysis; 
Explanation: A schedule risk analysis should be performed using a 
schedule built using a good critical path method and data about 
project schedule risks, as well as statistical analysis techniques 
(such as Monte Carlo) to predict the level of confidence in meeting a 
program's completion date. This analysis focuses not only on critical 
path activities but also on activities near the critical path, since 
they can potentially affect program status; 
Detailed assessment[A]: Minimally met. There is no evidence that a 
risk analysis has been conducted on this schedule or any summary 
schedule derived from this schedule. Los Alamos officials said that 
they have conducted a risk analysis using Monte Carlo simulation based 
on a prior and more concise schedule a full year before the version we 
reviewed was developed. The version we reviewed contained 90,000 
activities and was developed in the Spring of 2010--a full year after 
Los Alamos conducted its risk analysis and Monte Carlo simulation. Los 
Alamos did not conduct a risk analysis on this more recent schedule, 
nor did it prepare and simulate a summary schedule based on this more 
recent schedule. The summary schedule that Los Alamos simulated was 
based on critical and near critical paths. This schedule comprised the 
main, secondary and tertiary critical paths. As a result, we believe 
that the schedule did not cover the entire work of the project, and 
therefore may have excluded some activities or paths that have risk 
sufficient to affect the finish date. Instead, Los Alamos selected 
about 2,100 activities based on total float, but this practice is 
risky because they may not have included all of the activities that 
risks in the risk register may affect. 

Best practice: Using logic and durations to determine the start and 
completion dates; 
Explanation: The schedule should use logic and durations in order to 
reflect realistic start and completion dates for program activities. 
The schedule should be continually monitored to determine when 
forecasted completion dates differ from the planned dates, which can 
be used to determine whether schedule variances will affect downstream 
work. Maintaining the integrity of the schedule logic is not only 
necessary to reflect true status, but is also required before 
conducting a schedule risk analysis; 
Detailed assessment[A]: Fully met. The CMRR schedule is updated at 
least monthly, although much of it is updated weekly. The schedule 
integrity is checked after each update and metrics are compiled on 
problems to determine if the schedule's integrity is improving with 
each update. There are no activities in the past that lack the 
designation of actual start or actual finish. There are some 
activities on or after the data date that have actual start or finish 
designations, but that may be because there are 15 schedules combined 
in the Integrated Master Schedule and some were updated somewhat after 
May 9, 2011. 

Source: GAO analysis of CMRR project schedule information.

[A] The ratings we used in this analysis are as follows: "Not met" 
means the CMRR provided no evidence that satisfies any part of the 
practice. "Minimally met" means the CMRR provided evidence that 
satisfies a small portion of the practice. "Partially met" means the 
CMRR provided evidence that satisfies about half of the practice. 
"Substantially met" means the CMRR provided evidence that satisfies a 
large portion of the practice. "Fully met" means the CMRR provided 
evidence that completely satisfies the practice. 

[End of table] 

[End of section] 

Appendix IV: Comments from the National Nuclear Security Administration:

Department of Energy: 
National Nuclear Security Administration: 
Washington, DC 20585: 

February 24, 2012: 

Mr. Gene Aloise: 
Director: 
Natural Resources and Environment: 
Government Accountability Office: 
Washington, DC 20548: 

Dear Mr. Aloise: 

The National Nuclear Security Administration (NNSA) appreciates the 
opportunity to review the Government Accountability Office's (GAO) 
draft report, GA0-12-337, Modernizing The Nuclear Security Enterprise: 
New Plutonium Research Facility at Los Alamos May Not Meet Al Mission 
Needs. 

Subsequent to issuance of the draft report for comment, the Presidents 
Budget Request for Fiscal Year (FY) 2013 was released and provides 
several changes to the funding and execution of the Chemistry and 
Metallurgy Research Replacement (CMRR) project that supersede the 
recommendations contained in the GAO's Draft Report. Specifically, in 
FY 2013, no funding is provided for the CMRR project and construction 
of the CMRR Nuclear Facility (NF) is deferred for at least Five years. 
As part of the decision to defer construction of the NF, the NNSA is 
adjusting its plutonium strategy and developing plans to close out 
current design efforts for the NF. While details of both efforts will 
be developed in the next 60 days, the impacts to the recommendations 
in the GAO report are clear. 

I have enclosed a summary of our initial response to address the three 
recommendations noted in the report. 

If you have any questions related to this response, please contact 
Dean Childs, Director, Internal Control at (301) 903-1341. 

Sincerely, 

Signed by: 

Cynthia A. Lersten: 
Acting Associate Administrator for Management and Budget: 

Enclosure: 

[End of letter] 

National Nuclear Security Administration Comments on GAO Draft Report, 
GAO-12-337, "Modernizing The Nuclear Security Enterprise: New 
Plutonium Research Facility at Los Alamos May Not Meet All Mission 
Needs" 

Initial Response to Report Recommendations: 

Recommendation 1: 

Incorporate all key risks identified by CMRR project officials into 
the project's schedule risk analysis and ensure that this information 
is then used to update schedule contingency estimates, as appropriate. 

Nonconcur. 

NNSA disagrees with this recommendation. Given changes to the CMRR-NF 
execution strategy resulting from the FY2013 Budget Request, it would 
not be prudent to spend project money to update the project's schedule 
when construction of the NF is deferred for at least five years. Near 
term design efforts will focus on closing out the current design; any 
future efforts will require updated cost and schedule estimates. 

Recommendation 2: 

Conduct a comprehensive assessment of needed plutonium-related 
research, storage, and environmental testing needs for nuclear weapons 
stockpile activities as well as other missions currently conducted at 
other NNSA and DOE facilities. with particular emphasis on mitigating 
the consequences associated with eliminating plutonium research, 
storage and environmental testing capabilities from NNSA's Lawrence 
Livermore National Laboratory. 

Concur in Principle. 

NNSA agrees in principle with this recommendation. Consistent with the 
FY20 Budget request, NNSA is conducting additional analysis to 
determine the most effective way to provide analytical chemistry, 
materials characterization and storage capabilities originally
slated for the CMRR-NF through the use of existing infrastructure. As 
part of this analysis, NNSA will evaluate options to use existing 
facilities at other sites. NNSA remains committed to ensuring 
continuity of required plutonium capability and mission functions. 
Before proceeding with interim measures in lieu of CMRR-NF, NNSA must 
ensure it has adequate National Environment Policy Act Coverage. 

Recommendation 3: 

Using the results of this assessment, report to the Congress detailing 
any modifications to existing or planned facilities or any new 
facilities that will be needed to support plutonium-related research, 
storage, and environmental testing needs for nuclear weapons stockpile 
activities as well as other missions conducted by NNSA and DOE. 

Concur in Principle. 

NNSA agrees in principle with this recommendation. As NNSA adjusts its 
plutonium strategy, as discussed above, it will continue to interface 
with Congress and other stakeholders to keep them informed of future 
programmatic decisions. 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments:

GAO Contact:

Gene Aloise, (202) 512-3841 or aloisee@gao.gov:

Acknowledgments:

In addition to the contact named above, Ryan T. Coles, Assistant 
Director; John Bauckman; Jennifer Echard; Eugene Gray; David T. 
Hulett; Jonathan Kucskar; Alison O'Neill; Christopher Pacheco; Tim 
Persons; Karen Richey; Stacey Steele; Vasiliki Theodoropoulos; and 
Mary Welch made key contributions to this report.

[End of section] 

Footnotes: 

[1] NNSA was created by the National Defense Authorization Act for 
Fiscal Year 2000, Pub. L. No. 106-65 (1999). It is a separate, 
semiautonomous agency within the Department of Energy, with 
responsibility for the nation's nuclear weapons, nonproliferation, and 
naval reactors programs.

[2] For the purposes of this report, CMRR refers to the design and 
construction of the nuclear facility portion of NNSA's CMRR project. 
The scope of this report does not include the first phase of the 
project--the Radiological Laboratory, Utility, and Office Building--
which is much smaller in scope and cost and is substantially complete.

[3] GAO, Nuclear Weapons: National Nuclear Security Administration's 
Plans for Its Uranium Processing Facility Should Better Reflect 
Funding Estimates and Technology Readiness, [hyperlink, 
http://www.gao.gov/products/GAO-11-103] (Washington, D.C.: Nov. 19, 
2010); GAO, Department of Energy: Actions Needed to Develop High-
Quality Cost Estimates for Construction and Environmental Cleanup 
Projects, [hyperlink, http://www.gao.gov/products/GAO-10-199] 
(Washington, D.C.: Jan. 14, 2010); GAO, Nuclear Weapons: National 
Nuclear Security Administration Needs To Better Manage Risks 
Associated with the Modernization of Its Kansas City Plant, 
[hyperlink, http://www.gao.gov/products/GAO-10-115] (Washington, D.C.: 
Oct. 23, 2009): GAO, Nuclear Waste: Uncertainties and Questions about 
Costs and Risks Persist with DOE's Tank Waste Cleanup Strategy at 
Hanford, [hyperlink, http://www.gao.gov/products/GAO-09-913] 
(Washington, D.C.: Sept. 30, 2009); and GAO, Department of Energy: 
Contract and Project Management Concerns at the National Nuclear 
Security Administration and Office of Environmental Management, 
[hyperlink, http://www.gao.gov/products/GAO-09-406T] (Washington, 
D.C.: Mar. 4, 2009).

[4] GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-11-278] (Washington, D.C.: Feb. 16, 
2011).

[5] GAO, GAO Cost Estimating and Assessment Guide: Best Practices for 
Developing and Managing Capital Program Costs, [hyperlink, 
http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: March 2009).

[6] Department of Defense, Nuclear Posture Review Report, (Washington, 
D.C.: April 2010).

[7] In 2004, NNSA determined that it needed a nuclear facility to 
relocate certain analytical capabilities from existing facilities at 
Los Alamos, which are near end-of-life, as part of NNSA's plans for 
maintaining and certifying the nation's nuclear weapons stockpile. In 
deciding whether to build a new facility or instead use or refurbish 
other existing facilities, a 2006 Los Alamos study determined that a 
new nuclear facility should be built because the fundamental 
objectives of NNSA's strategic planning for the nuclear weapons 
complex could not be achieved without it.

[8] In the context of our cost guide, a cost estimate is the summation 
of individual cost elements, using established methods and valid data, 
to estimate the future costs of a project, based on what is known today.

[9] [hyperlink, http://www.gao.gov/products/GAO-09-3SP].

[10] DOE, Performance Baseline Guide, DOE G 413.3-5A (Washington, 
D.C.: Sept. 23, 2011). Although there is not a one-to-one correlation, 
many of the GAO-identified best practices, are also suggested schedule 
development practices in DOE's Performance Baseline Guide. DOE also 
requires that NNSA establish a project performance baseline to 
document estimated project cost and schedule for planned capital 
projects in order to measure the project's performance. See DOE, 
Program and Project Management for the Acquisition of Capital Assets, 
DOE O 413.3B (Washington, D.C.: Nov. 29, 2010).

[11] The delay between completion of construction and the date of 
operation allows for equipment to be prepared for use and workers to 
be trained on new equipment, among other things. 

[12] [hyperlink, http://www.gao.gov/products/GAO-09-3SP].

[13] An independent cost estimate was initiated in 2011 covering the 
design and infrastructure needed to complete the CMRR nuclear facility 
project, such as concrete batch plants and equipment storage, which 
represents only $250 million of the estimated total project cost.

[14] Actual pit production will not take place in CMRR, but it will 
provide plutonium-related analytical capabilities to support pit 
production being done at another facility known as PF-4, which is 
located within Los Alamos's Technical Area 55. The purpose of the pit 
production program is to re-establish the capability to produce pits, 
which were formerly produced at the Rocky Flats Plant outside of 
Denver, Colorado, until 1989 when operations there ceased. 
Responsibility for pit production was then assigned to Los Alamos in 
1996.

[15] Weapon types in the nuclear weapons stockpile include the W78 and 
W87 warheads for intercontinental ballistic missiles used by the Air 
Force; W76 and W88 warheads for submarine launched ballistic missiles 
used by the Navy; B61 and B83 bombs used by the Air Force; and the W80 
warhead for missiles used by the Navy and Air Force.

[16] Los Alamos National Laboratory, Options for Plutonium-Related 
Missions and Associated Facilities Between 2007 and 2022, LA-CP-06-
0957 (Los Alamos, NM: Oct. 10, 2006).

[17] Techsource Incorporated, Independent Business Case Analysis for 
Construction of the Chemistry and Metallurgy Research Replacement 
Nuclear Facility (Washington, D.C.: Dec. 21, 2006). The $179 million 
cost difference represents the $4.175 billion estimate for the larger 
31,500 square foot facility less the $3.996 billion estimate for a 
smaller 22,500 square foot facility. The study results are based on 
estimated project costs from fiscal year 2007 through fiscal year 
2022. Estimated costs are shown in fiscal year 2006 dollars and are 
not adjusted to reflect present worth or net residual value.

[18] NNSA has initiated a study considering implications of 
potentially upgrading Livermore's nuclear facility security and hazard 
categories for short periods to allow NNSA to continue and maintain 
needed plutonium-related capabilities. An NNSA official told us that 
NNSA is confident that the environmental pit testing capabilities will 
be maintained somewhere.

[19] GAO, Guide to the Building Development Process: The First Phase: 
Conceptual Planning, [hyperlink, 
http://www.gao.gov/products/GAO-04-859G] (Washington, D.C.: July 2004).

[20] NNSA and Los Alamos have considered using space in Los Alamos' PF-
4 plutonium facility to handle additional plutonium-related research. 
However, NNSA officials told us that operating at this high pit 
production range would also likely use all of PF-4's capacity. As a 
result, NNSA would have to consider reducing or eliminating other 
mission work currently supported in PF-4 or modify CMRR to incorporate 
additional needed space at additional cost.

[21] NNSA, Los Alamos National Laboratory Chemistry and Metallurgy 
Research Facility Replacement Project Mission Need Statement (Jan. 15, 
2004).

[22] Los Alamos officials told us that one of the major uses of CMRR 
storage space will be to relieve vault storage space at its plutonium 
facility that has already reached its available storage capacity.

[End of section] 

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