This is the accessible text file for GAO report number GAO-10-582 
entitled 'Nuclear Weapons: Actions Needed to Identify Total Costs of 
Weapons Complex Infrastructure and Research and Production 
Capabilities' which was released on June 21, 2010. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as 
part of a longer term project to improve GAO products' accessibility. 
Every attempt has been made to maintain the structural and data 
integrity of the original printed product. Accessibility features, 
such as text descriptions of tables, consecutively numbered footnotes 
placed at the end of the file, and the text of agency comment letters, 
are provided but may not exactly duplicate the presentation or format 
of the printed version. The portable document format (PDF) file is an 
exact electronic replica of the printed version. We welcome your 
feedback. Please E-mail your comments regarding the contents or 
accessibility features of this document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

Report to the Subcommittee on Strategic Forces, Committee on Armed 
Services, House of Representatives: 

United States Government Accountability Office: 
GAO: 

June 2010: 

Nuclear Weapons: 

Actions Needed to Identify Total Costs of Weapons Complex 
Infrastructure and Research and Production Capabilities: 

GAO-10-582: 

GAO Highlights: 

Highlights of GAO-10-582, a report to the Subcommittee on Strategic 
Forces, Committee on Armed Services, House of Representatives. 

Why GAO Did This Study: 

The National Nuclear Security Administration (NNSA) manages and 
secures the nation’s nuclear weapons stockpile, with annual 
appropriations of about $6.4 billion. NNSA oversees eight contractor-
operated sites that execute its programs. Two programs make up almost 
one-third of this budget: Readiness in Technical Base and Facilities 
(RTBF) Operations of Facilities, which operates and maintains weapons 
facilities and infrastructure, and Stockpile Services, which provides 
research and development (R&D) and production capabilities. Consistent 
with cost accounting standards, each site has established practices to 
account for these activities. The Administration has recently 
committed to stockpile reductions. GAO was asked to determine the 
extent to which NNSA’s budget justifications for (1) RTBF Operations 
of Facilities and (2) Stockpile Services are based on the total costs 
of providing these capabilities. GAO was also asked to discuss the 
implications, if any, of a smaller stockpile on these costs. To carry 
out its work, GAO analyzed NNSA’s and its contractors’ data using a 
data collection instrument; reviewed policies, plans, and budgets; and 
interviewed officials. 

What GAO Found: 

NNSA cannot accurately identify the total costs to operate and 
maintain weapons facilities and infrastructure because of differences 
in sites’ cost accounting practices. These differences are allowable 
under current NNSA guidance as long as sites comply with cost 
accounting standards and disclose their practices to NNSA. The 
differences among cost accounting practices include the facilities and 
activities sites support with RTBF Operations of Facilities funds and 
how sites use other funding sources to support weapons facilities and 
infrastructure. GAO’s analysis of sites’ responses to a data 
collection instrument showed that the total cost to operate and 
maintain weapons facilities and infrastructure likely significantly 
exceeds the budget request for the RTBF Operations of Facilities 
program submitted to Congress for fiscal year 2009. NNSA has an effort 
under way that, if fully implemented, would provide more detail on the 
total costs to operate and maintain weapons facilities and 
infrastructure. 

NNSA does not fully identify or estimate the total costs of the 
products and capabilities supported through Stockpile Services R&D and 
production activities. Instead, NNSA primarily identifies the 
functional activities—-such as engineering operations, quality 
control, and program management—-and their costs supported through 
Stockpile Services and bases its future-year budget requests on the 
extent to which prior-year budgets were sufficient to execute these 
functions. In 2009, GAO issued a cost guide that identified using a 
product-oriented management tool, rather than a functionally oriented 
one, as a best practice for cost estimating. Using cost guide 
criteria, GAO’s analysis found tracking costs by functions provides 
little information on the costs of the individual capabilities 
supported through Stockpile Services. NNSA has an effort under way 
that, if fully implemented, would provide more detail on the total 
costs of the products and capabilities supported through Stockpile 
Services. 

Reducing stockpile size is unlikely to significantly affect NNSA’s 
RTBF Operations of Facilities and Stockpile Services costs because a 
sizable portion of these costs is fixed to maintain base nuclear 
weapons capabilities. The Administration has planned to increase 
budget requests for NNSA’s nuclear weapons program by $4.25 billion 
between fiscal years 2011 and 2015. This planned increase is intended, 
in part, to invest in and modernize facilities and infrastructure and 
to ensure that base capabilities are supported such that a smaller 
nuclear deterrent continues to be safe, secure, and reliable. While 
base capability costs appear to be relatively insensitive to 
reductions in the stockpile, without complete and reliable information 
about these costs, NNSA lacks information that could help justify 
planned budget increases or target cost savings opportunities. 

What GAO Recommends: 

Among other things, GAO recommends that NNSA develop guidance for 
consistent collection of total cost information and use this 
information for budget formulation and program planning. NNSA agreed 
with the report’s findings and recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-10-582] or key 
components. For more information, contact Gene Aloise at (202) 512-
3841 or aloisee@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

NNSA Cannot Accurately Identify the Total Costs to Operate and 
Maintain Weapons Activities Facilities and Infrastructure, and These 
Costs Likely Significantly Exceed the Budget Justified to Congress for 
the RTBF Operations of Facilities Program: 

NNSA Does Not Fully Identify or Estimate the Total Costs of the 
Products and Capabilities Supported through Stockpile Services R&D and 
Production Activities: 

RTBF Operations of Facilities and Stockpile Services Costs Are 
Unlikely to Be Significantly Affected by Reductions in Stockpile Size, 
and NNSA Lacks Cost Information to Help Justify Planned Budget 
Increases: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Readiness in Technical Base and Facilities Operations of 
Facilities: 

Appendix III: Stockpile Services: 

Appendix IV: Comments from the National Nuclear Security 
Administration: 

Appendix V: GAO Contacts and Staff Acknowledgments: 

Tables: 

Table 1: NNSA's Breakdown of its Fiscal Year 2009 Appropriation for 
Weapons Activities: 

Table 2: Congressional Spending Directives by Site for RTBF Operations 
of Facilities, Fiscal Year 2009: 

Table 3: NNSA's National Work Breakdown Structure for RTBF Operations 
of Facilities, Fiscal Year 2009: 

Table 4: Number and Percentage of Weapons Activities Facilities 
Supported Directly with RTBF Operations of Facilities Funds, by 
Category, Fiscal Year 2009: 

Table 5: NNSA's National Work Breakdown Structure for Stockpile 
Services, Fiscal Year 2009: 

Figures: 

Figure 1: Primary Responsibilities of Sites within the Nuclear 
Security Enterprise: 

Figure 2: NNSA's Stockpile Services Obligations to Sites, Fiscal Year 
2009: 

Abbreviations: 

CAS: Cost Accounting Standards: 

DOE: Department of Energy: 

ESH&Q: Environment, Safety, Health, and Quality: 

FIRP: Facilities Infrastructure Recapitalization Program: 

HEAF: High Explosives Applications Facility: 

KCP: Kansas City Plant: 

LANL: Los Alamos National Laboratory: 

LLNL: Lawrence Livermore National Laboratory: 

M&O: management and operating: 

MTP: Management, Technology, and Production: 

NNSA: National Nuclear Security Administration: 

NTS: Nevada Test Site: 

PF: plutonium facility: 

R&D: research and development: 

RTBF: Readiness in Technical Base and Facilities: 

SFFAS: Statement of Federal Financial Accounting Standards: 

SNL: Sandia National Laboratories: 

SPEC: Scientific/Process Equipment and Capabilities: 

SRS: Savannah River Site: 

ST&E: science, technology, and engineering: 

Y-12: Y-12 National Security Complex: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

June 21, 2010: 

The Honorable James R. Langevin:
Chairman:
The Honorable Michael R. Turner:
Ranking Member:
Subcommittee on Strategic Forces:
Committee on Armed Services:
House of Representatives: 

Nuclear weapons have been and continue to be an essential part of the 
nation's defense strategy. The end of the Cold War resulted in a 
dramatic shift in how the nation maintains such weapons. Instead of 
designing, testing, and producing new nuclear weapons, the strategy 
has shifted to maintaining the existing nuclear weapons stockpile 
indefinitely and extending the operational lives of these weapons 
through refurbishment, without nuclear testing.[Footnote 1] The 
Department of Energy's (DOE) National Nuclear Security Administration 
(NNSA) is responsible for the management and security of the nation's 
nuclear weapons programs. NNSA's annual appropriation for nuclear 
weapons has totaled approximately $6.4 billion in recent years. To 
execute the activities to maintain and refurbish the nation's existing 
nuclear weapons stockpile, NNSA oversees eight separate sites-- 
collectively known as the nuclear security enterprise--that are 
managed and operated by private contractors. Among other things, these 
contractors operate and maintain the government-owned facilities and 
infrastructure deemed necessary to support the nuclear weapons 
stockpile and to support the capabilities to conduct scientific, 
technical, engineering, and production activities that ensure the 
continued safety and reliability of the stockpile. 

In October 2008, NNSA put forward a plan to modernize the nuclear 
security enterprise infrastructure--with the intent to make it smaller 
and more responsive, efficient, and secure--while continuing to meet 
national security requirements.[Footnote 2] NNSA's plan, if fully 
implemented, would consolidate certain operations within the nuclear 
security enterprise and replace its aging infrastructure with new 
nuclear and nonnuclear facilities sized to support a smaller 
stockpile. The size of this smaller stockpile is the outcome of 
recently completed negotiations between Russia and the United States 
on a New Strategic Arms Reduction Treaty, which was signed on April 8, 
2010, and, if ratified, will commit the two countries to significant 
and verifiable arms reductions. The President's fiscal year 2011 
budget request (1) supports increased funding to replace key nuclear 
security enterprise facilities and to invest in infrastructure and (2) 
anticipates requesting an additional $4.25 billion between fiscal 
years 2011 and 2015 over the fiscal year 2010 enacted level. This 
policy framework--to enable arms reductions by ensuring that the 
remaining stockpile and the infrastructure on which it depends are 
safe, secure, and reliable--is also underscored in the newly released 
Nuclear Posture Review.[Footnote 3] 

The current nuclear weapons stockpile consists of seven different 
warhead and bomb types delivered by four types of weapon systems, 
[Footnote 4] including the following: 

* B61 and B83 gravity bombs delivered by dual-capable aircraft and 
long-range bombers; 

* W80 warheads for cruise missiles deliverable by long-range bombers; 

* W76 and W88 warheads for submarine-launched ballistic missiles; and: 

* W78 and W87 warheads for intercontinental ballistic missiles. 

In recent years, NNSA has taken steps to create system-based budgets 
associated with each of these seven warhead and bomb types. These 
system-based budgets represent the planned work activities NNSA 
identifies as specific to each warhead or bomb type. In fiscal year 
2009, the seven system-based budgets totaled $542.8 million, or 8.5 
percent of NNSA's overall nuclear weapons budget. However, the vast 
majority of the nuclear weapons budget is not system-based but rather 
represents funding to support all other activities needed to operate 
and maintain the nuclear security enterprise, including the 
intellectual and technical capabilities of the nuclear workforce. 

Two of the largest non-system-based components of NNSA's nuclear 
weapons budget are: (1) Readiness in Technical Base and Facilities 
(RTBF) Operations of Facilities, the goal of which is to operate and 
maintain facilities and infrastructure in a safe, secure, and reliable 
condition such that they are operationally ready to execute nuclear 
weapons work, and (2) Stockpile Services, the goal of which is to 
provide a foundation for operations, which includes the research, 
development, and production support capabilities for multiple nuclear 
weapon programs. In fiscal year 2009, Congress appropriated $6.41 
billion for NNSA's weapons activities,[Footnote 5] which an 
explanatory statement accompanying the annual appropriations act 
reported as including $1.163 billion for RTBF Operations of Facilities 
and $866.4 million for Stockpile Services.[Footnote 6] Together, these 
two components total over $2 billion, or almost one-third of NNSA's 
total nuclear weapons activities appropriation for that year. 

Consistent with Federal Accounting Standards Advisory Board guidance 
on identifying the full (total) cost of federal programs and 
activities, your subcommittee has emphasized that NNSA should 
establish budgets that reflect total program costs and that these 
budgets should be more transparent to congressional oversight, 
particularly as efforts proceed to modernize the nuclear security 
enterprise.[Footnote 7] In this context you asked us to (1) determine 
the extent to which NNSA's RTBF Operations of Facilities congressional 
budget justification that supplements the Budget of the United States 
Government (the President's Budget) for fiscal year 2009 is based on 
the total cost of operating and maintaining weapons facilities and 
infrastructure; (2) determine the extent to which NNSA's fiscal year 
2009 congressional budget justification for Stockpile Services 
identifies the total costs of providing foundational research and 
production support capabilities; and (3) discuss the implications, if 
any, of a smaller stockpile on RTBF Operations of Facilities and 
Stockpile Services costs. 

To address these objectives, we analyzed NNSA's congressional budget 
justifications for fiscal years 2009, 2010, and 2011, as well as 
accounting records related to NNSA's execution of its RTBF Operations 
of Facilities and Stockpile Services programs for fiscal year 2009. We 
also analyzed documentation on NNSA's programs and activities, 
including national work breakdown structures--management tools NNSA 
uses to identify the work activities that completely define a project 
or program--for RTBF Operations of Facilities and Stockpile Services. 
We compared NNSA's work breakdown structures with our best practices 
for work breakdown structures as published in the GAO Cost Estimating 
and Assessment Guide: Best Practices for Developing and Managing 
Capital Program Costs.[Footnote 8] Further, we analyzed budget, cost, 
and program documentation from all eight NNSA sites. We also collected 
data from NNSA's sites on their nuclear weapons facilities and the 
sources of funding sites use to fully support operations and 
maintenance of these facilities. These data were collected using a 
data collection instrument that was pretested with NNSA and several of 
its sites. We performed a reliability assessment of these data and 
determined they were sufficiently reliable for the purposes of this 
report. In addition, we analyzed NNSA's nuclear security enterprise 
modernization plans and associated cost estimates. Finally, we 
conducted interviews with DOE, NNSA, and site officials and toured 
facilities at six of NNSA's eight sites. More details on our scope and 
methodology can be found in appendix I. 

We conducted this performance audit from April 2009 to June 2010 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. 

Background: 

Established by Congress in 2000 as a separately organized agency 
within DOE, NNSA has the primary mission of providing the United 
States with safe, secure, and reliable nuclear weapons and maintaining 
core competencies in nuclear weapons science, technology, and 
engineering. To support this highly technical mission, NNSA relies on 
capabilities in several thousand facilities located at eight nuclear 
security enterprise sites that support weapons activities. These sites 
are owned by the government but managed and operated by private 
contractors, and each has specific research and development (R&D) 
and/or production responsibilities within the nuclear security 
enterprise. (See figure 1.) 

Figure 1: Primary Responsibilities of Sites within the Nuclear 
Security Enterprise: 

[Refer to PDF for image: illustrated U.S. map] 

The map depicts the sites, along with the following descriptive 
statements: 

Kansas City Plant (KCP) (Kansas City, MO): Manufactures and procures 
nonnuclear components for nuclear weapons, including electrical, 
electronic, mechanical, and plastic components. 

Lawrence Livermore National Laboratory (LLNL) (Livermore, CA): 
Research and development laboratory responsible for ensuring the 
performance, safety, and reliability of nuclear weapons, particularly 
their nuclear components; supporting surveillance, assessment, and 
refurbishment of weapons in the stockpile; and providing unique 
capabilities in high-energy density physics, high explosives research 
and development and assessment, and environmental containment of high-
hazard experiments. 

Los Alamos National Laboratory (LANL) (Los Alamos, NM): Research and 
development laboratory responsible for ensuring the performance, 
safety, and reliability of nuclear weapons, particularly their nuclear 
components; supporting surveillance, assessment, and refurbishment of 
weapons in the stockpile; and providing unique capabilities in neutron 
scattering, radiography, and actinide sciences. LANL also manufactures 
plutonium components and weapons detonators. 

Nevada Test Site (NTS) (Mercury, NV): Conducts high-hazard operations, 
testing, and training in support of NNSA, Department of Defense, and 
other federal agencies; maintains the capability to resume underground 
nuclear testing should the President deem it necessary. 

Pantex Plant (Pantex) (Amarillo, TX): Assembles nuclear and nonnuclear 
components into nuclear weapons; conducts disassembly, testing, 
quality assurance, repair, refurbishment, retirement, and final 
disposition of nuclear weapon assemblies, components, and materials; 
fabricates chemical high explosives for nuclear weapons applications. 

Sandia National Laboratories (SNL) (Albuquerque, NM; Livermore, CA): 
Research and development laboratories responsible for ensuring the 
performance, safety, and reliability of nuclear weapons, particularly 
their nonnuclear components; supporting surveillance, assessment, and 
refurbishment of weapons in the stockpile; conducting environmental 
testing of nuclear weapons systems; responsible for the engineering of 
nonnuclear components and for some nonnuclear component production. 

Savannah River Site (SRS)-Tritium Operations (Aiken, SC): Extracts 
tritium, a key isotope in nuclear weapons design; performs loading, 
unloading, and surveillance on tritium reservoirs. 

Y-12 National Security Complex (Y-12) (Oak Ridge, TN): Manufactures 
components for nuclear weapons, including uranium components; 
evaluates, tests, assembles, and disassembles these components; 
supplies highly enriched uranium for use in naval reactors. 

Sources: NNSA; Map Resources (map). 

[End of figure] 

In addition to implementing NNSA's nuclear weapons programs, some 
sites also support additional missions such as U.S. Navy nuclear 
propulsion, nuclear nonproliferation activities, and work for other 
federal agencies such as the Departments of Defense and Homeland 
Security. NNSA's Office of Defense Programs is responsible for NNSA's 
weapons activities and oversees the sites' management and operating 
(M&O) contractors to execute R&D and production work.[Footnote 9] NNSA 
reimburses its M&O contractors under cost-reimbursement-type contracts 
for the costs incurred in carrying out the department's missions, and 
M&O contractors have the opportunity to periodically earn additional 
award fees and contract extensions based on annual performance 
assessments. 

Congress funds NNSA's nuclear weapons mission through an appropriation 
titled Weapons Activities. Weapons Activities is organized by NNSA 
into 14 operating programs with more than 40 budget lines across four 
activity areas. In fiscal year 2009, Congress appropriated 
approximately $6.4 billion for Weapons Activities, broken down by NNSA 
into the four areas described in table 1. 

Table 1: NNSA's Breakdown of its Fiscal Year 2009 Appropriation for 
Weapons Activities (Dollars in thousands): 

Weapons Activities area: Stockpile Support; 
Description: Stockpile Support provides nuclear warheads and bombs for 
NNSA to the Department of Defense in accordance with the President's 
Nuclear Weapons Stockpile Plan, which directs the number and type of 
weapons for the Department of Defense to maintain. Operating programs 
also support dismantlement and disposition of retired weapons as well 
as selection and maturation of production technologies critical to 
manufacturing to meet presidential requirements; 
Fiscal year 2009 congressional spending directives by operating 
program: Directed Stockpile Work = $1,590,152; 
Readiness Campaign = $160,620; 
Subtotal: $1,750,772. 

Weapons Activities area: Science, Technology, and Engineering (ST&E); 
Description: ST&E funds support operating programs that develop 
improved capabilities and experimental infrastructure to assess the 
safety, security, reliability, and performance of nuclear weapons 
without reliance on further underground nuclear testing. Operating 
programs focus on science, engineering, high-energy density physics 
and fusion, and advanced computing; 
Fiscal year 2009 congressional spending directives by operating 
program: Science Campaign = $316,690; 
Engineering Campaign = $150,000; 
Inertial Confinement Fusion and High Yield Campaign = $436,915; 
Advanced Simulation and Computing Campaign = $556,125; 
Science, Technology and Engineering Capability = $30,000; 
Subtotal: $1,489,730. 

Weapons Activities area: Infrastructure; 
Description: Infrastructure consists of three programs that together 
provide the base support to operate and maintain the nuclear weapons 
complex. These programs operate and maintain NNSA program facilities 
in a safe, secure, efficient, reliable, and compliant condition and 
support specific construction projects. In addition, Infrastructure 
funds support restoration and revitalization of sites' physical 
infrastructure, and facilitate sites' efforts to modernize and 
consolidate while ensuring compliance with environmental regulations; 
Fiscal year 2009 congressional spending directives by operating 
program: Readiness in Technical Base and Facilities = $1,674,406; 
Facilities and Infrastructure Recapitalization Program = $147,449; 
Environmental Projects and Operations[A] = $38,596; 
Subtotal: $1,860,451. 

Weapons Activities area: Security and Nuclear Counterterrorism; 
Description: Security and Nuclear Counterterrorism funds support 
NNSA's efforts to provide physical protection for NNSA personnel, 
facilities, nuclear weapons, and special nuclear material through the 
use of protective guard forces, physical protection systems, and 
secure transportation, as well as NNSA's cyber security program. In 
addition, funds support nuclear emergency response assets in support 
of homeland security and collaborative efforts in countering nuclear 
terrorism in support of national security; 
Fiscal year 2009 congressional spending directives by operating 
program: Secure Transportation Asset = $214,439; 
Nuclear Counterterrorism Incident Response = $215,278; 
Defense Nuclear Security = $735,208; 
Cyber Security = $121,286; 
Subtotal: $1,286,211. 

Weapons Activities area: Total; 
Fiscal year 2009 congressional spending directives by operating 
program: $6,387,164. 

Source: NNSA and Joint Explanatory Statement, Regarding H.R. 1105, 
Omnibus Appropriations Act, 2009, 155 Cong. Rec. H1653, H1962-63 (Feb. 
23, 2009). 

Note: Total does not include appropriations for congressionally 
directed projects. 

[A] In fiscal year 2010, the Environmental Projects and Operations 
program was integrated into a new, broader program--Site Stewardship-- 
that additionally focuses on special nuclear material consolidation. 

[End of table] 

RTBF is the single largest program within NNSA's Weapons Activities 
appropriation, with nearly $1.7 billion for fiscal year 2009, and 
encompasses 90 percent of NNSA's funds designated in congressional 
spending directives for the Infrastructure area.[Footnote 10] A 
significant RTBF mission, executed through its Operations of 
Facilities subprogram, is to operate and maintain NNSA-owned 
programmatic capabilities in a state of readiness, ensuring that each 
capability--defined to include facilities, infrastructure, and 
supporting workforce--is operationally ready to execute programmatic 
tasks identified in ST&E and Stockpile Support. Congressional spending 
directives designated nearly $1.2 billion of the RTBF program funds in 
the Weapons Activities account, or about 70 percent, for RTBF 
Operations of Facilities at NNSA's eight sites.[Footnote 11] (See app. 
II for additional discussion.) 

In 2006, NNSA and its sites sought to improve linkages between 
programmatic tasks and the facilities and infrastructure that support 
the nuclear weapons program. To do so, NNSA established three 
categories for its facilities and infrastructure that indicate the 
extent to which they are critical to the achievement of Stockpile 
Support and ST&E milestones: 

* Mission Critical facilities and infrastructure--such as for nuclear 
weapons production, R&D, and storage--are used to perform activities 
to meet highest-level Stockpile Support and/or ST&E milestones, and 
without these facilities and infrastructure, operations would be 
disrupted or placed at risk. 

* Mission Dependent, Not Critical facilities and infrastructure--such 
as for waste management, nonnuclear storage, and machine shops--play a 
supporting role in meeting Stockpile Support and/or ST&E milestones, 
and loss of these facilities and infrastructure would only disrupt 
operations so long as operations could not resume within 5 business 
days. 

* Not Mission Dependent facilities and infrastructure--such as 
cafeterias, parking structures, and excess facilities--do not have 
direct linkage to Stockpile Support or ST&E milestones but support 
secondary missions or quality-of-workplace initiatives. 

Together, Mission Critical and Mission Dependent, Not Critical 
facilities and infrastructure are deemed "mission essential." In 
fiscal year 2009, NNSA categorized its over 4,500 facilities and 
infrastructure in these three categories.[Footnote 12] Across the 
entire nuclear security enterprise, over 200 facilities and 
infrastructure were deemed Mission Critical and over 1,400 were deemed 
Mission Dependent, Not Critical. 

Directed Stockpile Work is the second largest program within NNSA's 
Weapons Activities appropriation, with nearly $1.6 billion in fiscal 
year 2009. The Directed Stockpile Work program is executed through 
four subprograms: 

* Stockpile Services, the largest of these subprograms, with $866.4 
million in fiscal year 2009, builds on weapons activities facilities 
and infrastructure to provide the foundational capabilities to conduct 
R&D and production work applicable to multiple warhead and bomb types. 
According to NNSA, the capabilities supported with Stockpile Services 
funds enable the achievement of other Directed Stockpile Work missions. 

* Weapons Dismantlement and Disposition, with $190.2 million in fiscal 
year 2009, supports efforts to reduce the inventory of retired nuclear 
weapons and their components.[Footnote 13] 

* The Life Extension Program, with $205 million in fiscal year 2009, 
represents one of NNSA's two subprograms focused on specific warhead 
and bomb types. The Life Extension Program funds efforts to refurbish 
and extend the expected stockpile lifetime of legacy warheads and 
bombs for 20 to 30 years. 

* Stockpile Systems funding supports ongoing sustainment activities 
for the active nuclear weapons stockpile, such as the exchange of 
components with limited lives and weapon-specific assessments. In 
fiscal year 2009, Congress directed $328.5 million for these 
activities, which NNSA prioritized among specific weapon and bomb 
types. 

NNSA reimburses its M&O contractors for the costs incurred in carrying 
out NNSA's missions. These include costs that can be directly 
identified with a specific NNSA program (known as direct costs)--for 
example, the costs for dismantling a retired weapon--and costs of 
activities that indirectly support a program (known as indirect 
costs), such as administrative activities. To ensure that NNSA 
programs are appropriately charged for incurred costs, M&O 
contractors' accounting systems assign the direct costs associated 
with each program and collect similar types of indirect costs into 
pools and allocate them among the programs. Consistent with Cost 
Accounting Standards (CAS), M&O contractors must classify their costs 
as either direct or indirect, and once costs are classified, must 
consistently charge their costs.[Footnote 14] M&O contractors are 
required to disclose their cost accounting practices in formal 
disclosure statements, which are updated annually and approved by NNSA 
officials. M&O contractors' cost accounting practices cannot be 
readily compared with one another because contractors' methods for 
accumulating and allocating indirect costs vary--that is, a cost 
classified as an indirect cost at one site may be classified as a 
direct cost at another.[Footnote 15] 

NNSA has developed national work breakdown structures for RTBF 
Operations of Facilities and for Stockpile Services, management tools 
that define the scope of work associated with the two subprograms. 
[Footnote 16] (See app. II and app. III for these fiscal year 2009 
work breakdown structures.) In March 2009, we issued a cost estimating 
guide, a compilation of cost estimating best practices from across 
industry and government.[Footnote 17] Among other things, these best 
practices discuss establishing product-oriented work breakdown 
structures, where a product is defined as an output and 100 percent of 
the work associated with achieving that output.[Footnote 18] Product- 
oriented work breakdown structures allow a program to track cost and 
schedule by defined deliverables, promote accountability by 
identifying work products that are independent of one another, and 
provide a basis for identifying resources and tasks for developing a 
program cost estimate. The ability to generate reliable cost estimates 
is a critical function, and a program's cost estimate is often used to 
establish budgets. 

While individual M&O contractors account for the activities included 
in NNSA's work breakdown structures according to their own accounting 
practices and these practices vary, NNSA is required to provide 
reliable and timely information on the full cost of its programs 
because this information is crucial for effective management of 
government operations and for oversight.[Footnote 19] Full costs 
include direct and indirect costs that contribute to programs, 
regardless of funding sources. To meet this requirement, NNSA needs 
complete and reliable information from its M&O contractors so that it 
can determine the full (or total) costs of its programs. We have 
previously reported on NNSA's lack of managerial cost accounting 
systems for its programs, particularly with respect to stockpile life 
extension programs.[Footnote 20] 

NNSA Cannot Accurately Identify the Total Costs to Operate and 
Maintain Weapons Activities Facilities and Infrastructure, and These 
Costs Likely Significantly Exceed the Budget Justified to Congress for 
the RTBF Operations of Facilities Program: 

NNSA cannot accurately identify the total costs to operate and 
maintain weapons activities facilities and infrastructure because of 
differences in sites' cost accounting practices. NNSA does not require 
sites to report the total cost to execute their RTBF Operations of 
Facilities work scope, but the results of our analysis of sites' 
responses to our data collection instrument showed that the total cost 
to execute the RTBF Operations of Facilities work scope likely 
significantly exceeds the budget for the RTBF Operations of Facilities 
program justified to Congress. Efforts are under way to revise NNSA's 
work breakdown structure that includes RTBF Operations of Facilities. 
According to NNSA officials, once the revised work breakdown structure 
is fully implemented it will capture these total costs, but NNSA will 
not begin collecting this information until 2011. 

NNSA Cannot Accurately Identify the Total Costs to Operate and 
Maintain Weapons Activities Facilities and Infrastructure: 

Each of the eight sites in the nuclear security enterprise has 
established its own practices for how to account for the activities 
necessary to operate and maintain weapons activities facilities and 
infrastructure. While individual M&O contractors are required to be 
CAS compliant,[Footnote 21] differences in their cost accounting 
practices preclude NNSA from being able to identify the total costs to 
operate and maintain the facilities and infrastructure essential to 
achieving Stockpile Support and ST&E program missions. These 
differences include determining (1) which weapons activities 
facilities and infrastructure individual sites support with RTBF 
Operations of Facilities funds, (2) which activities included in the 
RTBF Operations of Facilities work breakdown structure each site 
supports directly or indirectly, and (3) the additional funding 
sources sites use to support certain activities included in the RTBF 
Operations of Facilities work breakdown structure. (For a detailed 
discussion of the differences in M&O contractors' cost accounting 
practices, see appendix II.) For example, 

* While NNSA has identified the Mission Critical facilities and 
infrastructure at each of its sites, NNSA does not require M&O 
contractors to pay for them with RTBF Operations of Facilities funds. 
In fiscal year 2009, Pantex fully funded the RTBF Operations of 
Facilities work scope at all of its Mission Critical facilities with 
RTBF Operations of Facilities funds. In contrast, LANL partially 
funded the RTBF Operations of Facilities work scope at the majority, 
but not all, of its Mission Critical facilities with RTBF Operations 
of Facilities funds. 

* Six of the eight sites in the nuclear security enterprise reported 
to us that in fiscal year 2009 they allocated the costs of certain 
activities included in the RTBF Operations of Facilities work scope 
into indirect cost pools, including the costs of activities such as 
utilities purchasing and real property maintenance. These indirect 
cost pools are often funded through multiple funding sources. 

* All sites used funding in addition to RTBF Operations of Facilities 
funds to pay for activities included in the RTBF Operations of 
Facilities work scope in fiscal year 2009. In response to our data 
collection instrument, site officials identified 11 sources of funding 
congressionally directed for other Weapons Activities programs and 
subprograms that they expended, in part, on activities they considered 
to be included in NNSA's RTBF Operations of Facilities work breakdown 
structure. In addition, some sites have developed user fee or cost 
recovery models for multiprogram facilities. These models are 
generally based on charges to programmatic users based on rates 
applied to, for example, the square footage of a facility users occupy 
or the volume of waste they produce. User fees or cost recovery may be 
charged as direct costs to Weapons Activities programs as well as to 
other programs and projects, or they may be charged through an 
indirect cost pool. 

As a result of these differences, NNSA cannot reliably identify the 
total costs to operate and maintain these facilities and 
infrastructure across the nuclear security enterprise. Rather, NNSA 
officials can only accurately identify the direct costs to the RTBF 
Operations of Facilities program, and in some instances, the direct 
costs to other Weapons Activities programs. Senior NNSA officials in 
the RTBF Program Office acknowledged that NNSA does not know the 
sites' baseline costs to fully execute RTBF Operations of Facilities 
work scope, and NNSA does not require M&O contractors to track their 
sites' total operations and maintenance costs for weapons activities 
facilities and infrastructure. Instead, NNSA officials told us they 
rely on individual contractors to know this information for their 
sites as a basis for formulating budget requests; however, some 
contractors did not identify a total cost for their sites' weapons 
activities facilities and infrastructure. For example, when we asked, 
M&O contractors from two sites--Y-12 and LANL--did not provide the 
total cost to operate and maintain weapons activities facilities and 
infrastructure at their sites. LANL did not provide this information 
because site officials could not determine the extent to which costs 
charged against indirect cost pools were associated with activities 
included in the RTBF Operations of Facilities work scope. Y-12 did not 
provide this information because, according to officials, while their 
management system is capable of identifying this information, it 
cannot do so readily with accuracy.[Footnote 22] 

Total Costs to Operate and Maintain Weapons Activities Facilities and 
Infrastructure Likely Significantly Exceed the RTBF Operations of 
Facilities Budget NNSA Justified to Congress: 

The total costs to operate and maintain weapons activities facilities 
and infrastructure likely significantly exceed the amount NNSA 
justified to Congress in the President's Weapons Activities budget 
request for RTBF Operations of Facilities and that Congress directed 
to NNSA's sites in fiscal year 2009. While NNSA requires M&O 
contractors to report information on their direct costs to the RTBF 
Operations of Facilities program, NNSA does not require M&O 
contractors to report on the total sitewide operation and maintenance 
costs for their weapons activities facilities and 
infrastructure.[Footnote 23] NNSA officials acknowledged that a more 
accurate figure for total costs to support the enterprisewide work 
scope for RTBF Operations of Facilities would include these other 
funding sources M&O contractors use to operate and maintain weapons 
activities facilities and infrastructure. 

As reported above, when we asked, not all M&O contractors determined 
the total cost to operate and maintain weapons activities facilities 
and infrastructure at their sites. However, for the six contractors 
that did so, the cost to fully operate and maintain weapons activities 
facilities and infrastructure greatly exceeded the amount of funding 
for RTBF Operations of Facilities in fiscal year 2009. Congressionally 
directed RTBF Operations of Facilities funding for these six sites in 
fiscal year 2009 totaled approximately $558.6 million, but their 
estimated fiscal 2009 expenditures for this work scope drawn from all 
funding sources totaled approximately $1.1 billion.[Footnote 24] 
Officials from the two M&O contractors that did not provide the total 
costs to operate and maintain weapons activities facilities and 
infrastructure at their sites also told us that their expenditures for 
this purpose in fiscal year 2009 exceeded their congressionally 
directed RTBF Operations of Facilities funds, as funding from other 
programs also contributed. NNSA's congressional budget justification 
for RTBF Operations of Facilities is not based on total cost 
information, and it does not fully support the scope of work it 
describes. 

NNSA Is Revising Its Work Breakdown Structure to Capture the Total 
Costs to Operate and Maintain Weapons Activities Facilities and 
Infrastructure: 

NNSA officials and M&O contractors told us that RTBF program 
representatives from all of the sites are working closely together and 
with NNSA to develop an updated national RTBF work breakdown structure 
that will be integrated into a larger national work breakdown 
structure for all of the activities overseen by the Office of Defense 
Programs. The revised Defense Programs work breakdown structure, once 
implemented, is to more closely align activities, including RTBF 
activities, at the sites with the nuclear weapons R&D and production 
capabilities they support. Moreover, according to NNSA officials, NNSA 
envisions the sites using the revised work breakdown structure for 
budget formulation, budget execution, and cost collection, unlike the 
current RTBF work breakdown structure, which is used only for program 
management during a single fiscal year. NNSA has asked that the sites 
begin submitting their RTBF program budget requests using the revised 
Defense Programs work breakdown structure format. NNSA and site 
officials agreed that the revised work breakdown structure should help 
better explain how RTBF supports the core missions of the weapons 
complex and the base capabilities needed to support those missions. 
NNSA officials expect the first phase of revisions to the Defense 
Programs work breakdown structure to be completed around the end of 
2010. Starting in 2011, NNSA officials said they plan to begin efforts 
to further enhance the revised work breakdown structure by including 
total cost information for operating and maintaining weapons 
activities facilities and infrastructure to support future budget 
formulation activities. While this total cost information will not be 
wholly captured within the portion of the revised Defense Programs 
work breakdown structure associated with RTBF Operations of 
Facilities, according to NNSA officials total cost information will be 
captured in the revised work breakdown structure as a whole. 
Differences in how sites pay for RTBF Operations of Facilities 
activities--and weapons activities facilities and infrastructure--will 
persist under the revised work breakdown structure. However, NNSA 
officials said once the revised Defense Programs work breakdown 
structure is fully implemented, NNSA will have a tool to collect 
consistent cost information from contractors' disparate cost 
accounting systems. 

NNSA Does Not Fully Identify or Estimate the Total Costs of the 
Products and Capabilities Supported through Stockpile Services R&D and 
Production Activities: 

While in total NNSA's Stockpile Services work breakdown structure for 
fiscal year 2009 reflects $866.4 million in work scope as justified to 
Congress, the work breakdown structure does not fully identify or 
provide the estimated costs of the products or capabilities supported 
through the Stockpile Services program. Rather, the work breakdown 
structure is organized largely around work functions and only 
partially by specific products or capabilities. (See app. III for a 
more detailed Stockpile Services work breakdown structure.) NNSA 
officials told us that the largely functionally oriented work 
breakdown structure for Stockpile Services in total captures all the 
work activities associated with providing foundational programmatic 
capabilities for R&D and production capacity across the nuclear 
security enterprise. In addition, they said the work breakdown 
structure for Stockpile Services is a useful management tool for 
executing work functions across products and deliverables. However, 
the organization of much of the work breakdown structure precludes the 
ready identification of base capabilities and their costs. For 
example, the activities included in the Stockpile Services work scope 
range widely--from basic infrastructure support to the manufacturing 
of actual weapons components--often without specifically identifying 
the products or capabilities they are supporting. The exception is 
Plutonium Sustainment, the one group that is product-based and that 
better aligns work activities with the product or capability it is 
ultimately supporting. The five work activity groups in the Stockpile 
Services work breakdown structure are as follows (see app. III for 
more detailed descriptions of these activities): 

* Production Support ($293.1 million in fiscal year 2009) includes non-
weapon-type specific or multi-weapon-type activities that a site 
performs to support its own production mission, whatever that mission 
might be. Examples of these activities include engineering and 
manufacturing operations; quality supervision and control; and tool, 
gauge, and equipment services. 

* Management, Technology, and Production (MTP) ($195.3 million in 
fiscal year 2009) includes activities that (1) sustain and improve 
stockpile management, (2) develop and deliver weapon use control 
technologies, and (3) result in production of weapons components for 
use in multiple warhead and bomb types.[Footnote 25] In contrast to 
Production Support activities that are focused on individual sites' 
production missions, MTP includes those activities that benefit the 
nuclear security enterprise as a whole. 

* R&D Certification and Safety ($187.6 million in fiscal year 2009) 
provides the underlying capabilities to mature basic research 
conducted in ST&E programs and serves as a technology development 
bridge between research and weaponized technologies. Activities 
support design work to develop certain multisystem limited life weapon 
components; the specialized facilities, equipment, and personnel to 
maintain a base capability to perform hydrodynamic tests and 
subcritical experiments; and the preparation of various types of 
studies.[Footnote 26] 

* R&D Support ($35.1 million in fiscal year 2009) consists largely of 
administrative and infrastructure support activities for sites' R&D 
missions. These activities include program management for and 
coordination of Stockpile Services' many different outputs, R&D 
quality control, computing hardware for personnel, and financial 
database maintenance. 

* Plutonium Sustainment ($155.3 million in fiscal year 2009) captures 
work activities associated with pit manufacturing and related R&D, as 
well as associated indirect and overhead costs.[Footnote 27] These 
funds not only support the base capabilities for pit manufacturing, 
but also contribute to the operation and maintenance of the facilities 
and infrastructure necessary to conduct these activities and the 
actual manufacturing of a limited number of pits each year. 

[Side bar: 
Neutron Generators: 

Neutron generators are designed by SNL and manufactured at SNL in 
Albuquerque, New Mexico. According to an SNL official associated with 
neutron generator production, it is not easy to identify all of the 
activities associated with neutron generators in NNSA’s functionally 
oriented work breakdown structure. To identify the more than $36 
million in Stockpile Services costs to support activities associated 
with neutron generators in fiscal year 2009 at SNL, NNSA program 
officials provided the following information from different activity 
groups in the Stockpile Services work breakdown structure: 

R&D Certification and Safety: 
* Weapon Component Development costs: $7.2 million; 
* Packaging Technologies: $0.1 million. 

Production Support: 
* Engineering Operations: $8.3 million; 
* Manufacturing Operations: $9.5 million; 
* Quality Supervision and Control: $3.8 million; 
* Tool, Gage, and Equipment Services: $0.8 million; 
* Purchasing, Shipping, and Materials: $0.8 million; 
* Electronic Product Flow Information Systems: $5.7 million. 

According to an SNL official, between $2.7 million and $12.2 million 
in fiscal year 2009 Production Support funds paid for activities that 
could be considered RTBF Operations of Facilities work scope related 
to operating and maintaining SNL’s neutron generator facilities and 
infrastructure. 

[Photograph of Neutron Generator; Source: NNSA.] 
End of side bar] 

According to NNSA officials, the fiscal year 2009 Stockpile Services 
work breakdown structure was used to estimate costs and formulate 
future budget requests based on the sufficiency of prior-year budgets 
to execute the program and adjusted to reflect planned changes in 
program execution. NNSA's process for validating the methodology used 
to formulate the Stockpile Services fiscal year 2009 budget request 
was based on a site-by-site review of prior-year spending for ongoing 
activities, rather than a bottom-up approach to integrate product or 
capability costs across the nuclear security enterprise.[Footnote 28] 
Our cost guide states the risks of using a functionally oriented work 
breakdown structure--rather than a product-oriented work breakdown 
structure--to develop cost estimates, including difficulty in 
identifying work products that are independent from one another, and 
difficulty in evaluating and accounting for the level of effort 
associated with products (see appendix III for additional discussion 
of our cost guide). This methodology provides little information that 
would help NNSA identify capability costs or better explain the 
effects of proposed funding increases or decreases on Stockpile 
Services activities. For example, 

* A key nuclear weapon component known as a neutron generator is 
designed and manufactured at SNL. Activities associated with neutron 
generator R&D and production are distributed across several parts of 
the Stockpile Services work breakdown structure and are not combined 
by NNSA either to provide a total accounting of the activities 
necessary to sustain the neutron generator capability or to determine 
the total costs of these activities. Furthermore, common support 
costs--such as program management--are not allocated to the neutron 
generator capability. Our cost guide states that common support costs 
should be included in the work breakdown structures of their 
associated products or capabilities. 

* When we asked, NNSA identified $45.9 million in MTP production costs 
for weapon surveillance testing support in fiscal year 2009. Weapon 
surveillance testing is used to assess the condition of systems, 
subsystems, and components in the stockpile. According to an NNSA 
official, surveillance costs in Stockpile Services for fiscal year 
2009 could be as high as $100 million to $130 million, depending on 
the extent to which costs are included for activities that support 
both surveillance and other capabilities. For example, certain tools 
may be used for surveillance and for other production missions. The 
$45.9 million identified as the costs for surveillance do not include 
the costs to maintain or upgrade those tools. Rather, NNSA tracks the 
costs for tooling as a function across all products and capabilities. 
In its fiscal year 2011 congressional budget justification for both 
R&D Certification and Safety and MTP, NNSA discusses funding to 
support the surveillance testing capabilities. The budget 
justification provides no explanation for why funding in both activity 
groups is requested and does not identify the total amount requested 
for Stockpile Services surveillance activities. 

[Side bar: 
Surveillance to Ensure Weapons Safety and Reliability: 

In fiscal year 2009, NNSA and its M&O contractors spent $45.9 million 
in MTP production funds to provide the capabilities, testers, 
engineering resources, and data management tools to facilitate 
enterprisewide interpretation of data and information regarding the 
condition of systems, subsystems, and components in the stockpile. 
This work supports assessments of warhead reliability, as well as 
ongoing laboratory safety, security, and use control evaluations. 
Surveillance capabilities include simulating and testing the effects 
of vibration, shock, acceleration, temperature, and radiation 
environments on weapons and their components. The illustration below 
shows a shaker table, used for testing the effects of vibration on 
weapons components. 

[Photograph: Source: NNSA.] 
End of side bar] 

NNSA's ongoing effort to revise the Defense Programs work breakdown 
structure includes revising the portion associated with Stockpile 
Services. Its primary purpose is to provide better evidence to support 
assertions made in congressional budget justifications. Our analysis 
shows the revised work breakdown structure, once fully implemented, 
will better identify products and capabilities supported through 
Stockpile Services and provide improved total cost information. NNSA 
is planning to "tag" individual activities in the revised Defense 
Programs work breakdown structure, including Stockpile Services 
activities, to identify the products and capabilities with which those 
activities are associated, where possible. This will allow officials 
to aggregate activities (and their costs) by product or capability as 
necessary within the Defense Programs work breakdown structure. NNSA 
officials also said that current plans include tagging indirect or 
overhead costs. According to NNSA officials, fully realizing the 
revised Defense Programs work breakdown structure will give federal 
program managers a tool to collect consistent cost information from 
disparate contractor cost accounting systems on the products supported 
through Stockpile Services. 

RTBF Operations of Facilities and Stockpile Services Costs Are 
Unlikely to Be Significantly Affected by Reductions in Stockpile Size, 
and NNSA Lacks Cost Information to Help Justify Planned Budget 
Increases: 

Reducing the stockpile size, as has recently been negotiated in the 
New Strategic Arms Reduction Treaty, if ratified, and reinforced by 
the 2010 Nuclear Posture Review, is unlikely to significantly affect 
NNSA's RTBF Operations of Facilities and Stockpile Services costs, 
which represent about one-third of NNSA's total nuclear weapons 
program budget. A sizable portion of these costs are fixed and 
represent the costs of maintaining the base capabilities necessary to 
ensure that the nuclear weapons stockpile continues to be safe, 
secure, and reliable without underground nuclear testing. NNSA and its 
sites are working to reduce fixed costs and to bring these costs into 
line with base capabilities by modernizing and downsizing facilities 
and infrastructure and by eliminating excess production and 
experimental capacity. However, NNSA lacks information on the costs of 
these base capabilities that could adequately justify planned budget 
increases, particularly with respect to infrastructure investment. 

Base Capability Costs Are Unlikely to Be Significantly Affected by 
Reductions in Stockpile Size: 

NNSA and site officials identify the scope of work captured in the 
RTBF Operations of Facilities and Stockpile Services work breakdown 
structures as providing the base capabilities necessary to conduct the 
ST&E and system-specific work that ensures the continued safety, 
security, and reliability of the nuclear weapons stockpile without 
underground nuclear testing. According to NNSA and site officials, 
most of the base capabilities these programs provide would be 
necessary to maintain even if the size of the stockpile were 
significantly reduced. Furthermore, NNSA and site officials identify 
the majority of the costs associated with these base capabilities as 
fixed and thus relatively insensitive to stockpile size. NNSA recently 
analyzed its fiscal year 2008 costs to determine the extent to which 
these costs represented the fixed or variable costs of sustaining the 
nuclear security enterprise. NNSA's resulting analysis showed that 100 
percent of RTBF cost is fixed for certain capabilities, including high 
explosives and weapons assembly/disassembly facilities and 
infrastructure. In addition, the analysis showed that between 85 and 
90 percent of cost was fixed for nonnuclear components and plutonium 
and uranium work. Many of these costs are included in the RTBF 
Operations of Facilities and Stockpile Services work scopes. 

While we were unable to independently verify NNSA's analysis, during 
the course of our review we did observe the relatively fixed nature of 
the infrastructure and activities necessary to maintain base 
capabilities. For example, an NNSA official estimated that the base 
capability cost for pit manufacturing is about $120 million in 
Stockpile Services funds annually, in comparison with overall 
Plutonium Sustainment funding for fiscal year 2009 of $155.3 million. 
[Footnote 29] Plutonium Sustainment funding also included production-
related R&D costs, as well as incremental costs for actual component 
manufacturing. In addition, officials from several sites highlighted 
equipment that may be operated for only a limited portion of each year 
but that still must be maintained and operated when needed. Officials 
at Y-12 noted that the fixed costs to maintain certain of these 
capabilities currently exceed the value of their output; however, to 
ensure that Stockpile Support and ST&E missions are achieved, these 
capabilities must be maintained. 

While base capability costs for the nuclear security enterprise are 
unlikely to significantly decline as a result of stockpile reductions, 
a primary purpose of NNSA's effort to modernize the nuclear security 
enterprise is to reduce the overall level of fixed costs at and among 
sites by consolidating infrastructure and reducing capacity to base 
levels without compromising national security. According to an NNSA 
official, 10 years from now one-third of NNSA's total existing 
facilities and infrastructure will be in excess of programmatic need. 
Furthermore, NNSA's modernization plans call for consolidating 
experimental capabilities among sites within the complex and for 
reducing excess production capacity. We previously reported on efforts 
at several sites, including LANL and LLNL, to reduce or eliminate 
storage of significant quantities of weapons-grade special nuclear 
material in site facilities.[Footnote 30] We also recently reported on 
progress to replace KCP infrastructure with a new, modern facility 
that NNSA expects to result in significantly reduced operations and 
maintenance costs for that site.[Footnote 31] Other efforts include 
construction of the new Highly Enriched Uranium Materials Facility at 
Y-12, which will enable closure of several older storage facilities at 
the Y-12 site. In addition, facility disposition at multiple sites, 
including LANL, LLNL, NTS, Pantex, and Y-12, will reduce both ongoing 
maintenance costs and deferred maintenance backlogs. Consolidation of 
equipment at NTS will reduce maintenance. 

NNSA Lacks Information on Program Costs That Could Help Justify 
Planned Budget Increases: 

While base capability costs appear to be relatively insensitive to 
changes in the stockpile, complete and reliable information about the 
costs of these capabilities is necessary for sound program management 
and to help inform future planning. This is particularly important in 
the current political and budgetary environment, in which stockpile 
reductions are anticipated, and the Administration has planned to 
increase budget requests for Weapons Activities by $4.25 billion over 
the fiscal year 2010 enacted level between fiscal years 2011 and 
2015.[Footnote 32] This planned budget increase is envisioned in part 
to ensure adequate support to maintain and improve base capabilities, 
including infrastructure recapitalization and replacement. In such an 
environment, NNSA is likely to face increased scrutiny of its 
planning, programming, and budget execution to determine the effect of 
funding increases on the overall health of base capabilities. 

In the past, Congress, we, and NNSA have examined different ways of 
generating information on the costs of the nuclear weapons program 
that would be useful to NNSA management and congressional decision 
makers for planning purposes. In 2000 we recommended that NNSA develop 
a method to relate its program structure to DOE's cost accounting 
considerations so that fixed and variable costs of the program's 
activities could be determined and made available when the program 
makes its annual budget submission.[Footnote 33] In fiscal year 2005, 
NNSA reorganized its budget structure in response to congressional 
appropriations committees, which instructed NNSA to begin budgeting by 
warhead and bomb type--another way to understand program costs. 
[Footnote 34] The current budget structure does identify some type-
specific information. However, NNSA and site officials have continued 
to caution against allocating RTBF and Stockpile Services costs to 
specific warhead or bomb types, stating that allocating fixed costs 
does not really provide any additional information than is already 
available and could prove to be misleading; in the event of stockpile 
reductions, fixed costs would simply be reallocated across remaining 
warhead and bomb types and fail to produce the significant cost 
savings that might be anticipated. 

Statement of Federal Financial Accounting Standards (SFFAS) No. 4, 
Managerial Cost Accounting Standards, states a general standard for 
federal agencies to provide reliable and timely information on the 
full cost of federal programs. The principal purpose of SFFAS No. 4 is 
to determine the cost of delivering a program or output to allow an 
organization to assess the reasonableness of this cost or to establish 
a baseline for comparison. Congressional appropriations committees 
sought to define individual warhead and bomb types as NNSA's programs; 
however, since 2005 NNSA has defined its programs as a mix of 
individual warhead and bomb types, production and R&D functions that 
support multiple warhead and bomb types, facilities and infrastructure 
support, and other supporting programs such as security. In part, NNSA 
has done so because DOE's accounting guidance does not require NNSA to 
allocate basic R&D costs and certain infrastructure capacity costs. 
Also, by identifying RTBF and Stockpile Services as programs, NNSA has 
identified in its budget structure costs it has determined are fixed. 
Going forward, NNSA appears to be moving toward a budget structure 
aimed at ensuring sufficient funding to sustain base capabilities and 
to identify additional funding that may be necessary to modernize 
capabilities or to achieve a level of research or production capacity 
above the base level. NNSA currently lacks the total cost information 
about its existing programs to ensure it can accurately identify the 
costs of its base capabilities for future budget justifications. 
Through its ongoing effort to revise its Defense Programs work 
breakdown structure, which includes portions associated with RTBF 
Operations of Facilities and Stockpile Services, NNSA has the 
opportunity to capture this information. More specifically, 

* NNSA's preliminary revisions to its national work breakdown 
structure for RTBF Operations of Facilities reorients the work 
breakdown structure around capabilities and products; highlights 
Mission Critical facilities that support these capabilities; and 
identifies three types of costs to support these capabilities: (1) 
operations, which represents the current program; (2) risk reduction, 
which includes costs above base capability to support facility and 
equipment upgrades; and (3) transformation, which includes costs to 
replace facilities and infrastructure or otherwise significantly 
invest in their modernization. These revisions are positive 
developments that we believe will enable NNSA to improve its 
understanding of facilities and infrastructure costs paid for with 
congressionally directed RTBF Operations of Facilities funds and to 
improve the transparency of its RTBF Operations of Facilities budget 
justification. According to NNSA officials, once the revised work 
breakdown structure for all of Defense Programs has been fully 
implemented, it should allow NNSA to capture information on the total 
costs to operate and maintain weapons activities facilities and 
infrastructure, not just those costs paid for with congressionally 
directed funds for RTBF Operations of Facilities. In the absence of 
total cost information, according to a senior NNSA official, NNSA is 
challenged to balance operations and maintenance costs with 
recapitalization projects and with large facility replacement projects. 

* According to NNSA officials, the portion of the revised Defense 
Programs work breakdown structure for Stockpile Services will include 
a reorientation around capabilities and products, where possible. 
While several NNSA officials said that improving cost estimating is 
not a primary impetus for revising the Stockpile Services work 
breakdown structure because all Stockpile Services costs are fixed, 
officials responsible for revising the Defense Programs work breakdown 
structure told us that doing so will help achieve transparent cost 
reporting from disparate contractor cost accounting systems, 
regardless of the fixed nature of these costs. Without identifying the 
total costs of Stockpile Services-supported products and capabilities, 
NNSA will be challenged to explain the effects of funding changes or 
justify the necessity for increased investment to support or enhance 
base capabilities. It is important to recognize that having a product-
or capability-oriented work breakdown structure for Stockpile Services 
that includes associated support costs should not reduce NNSA's or its 
M&O contractors' flexibility to manage Stockpile Services activities 
by function. 

Conclusions: 

Within the global community, the Administration, and Congress, a 
bargain is being struck on nuclear weapons policy. Internationally, if 
the treaty is ratified, significant stockpile reductions have been 
negotiated between the United States and Russia. Domestically, a new 
Nuclear Posture Review has provided an updated policy framework for 
the nation's nuclear deterrent. To enable this arms reduction agenda, 
the Administration is requesting from Congress billions of dollars in 
increased investment in the nuclear security enterprise to ensure that 
base scientific, technical, and engineering capabilities are 
sufficiently supported such that a smaller nuclear deterrent continues 
to be safe, secure, and reliable. For its part, NNSA must accurately 
identify these base capabilities and determine their costs in order to 
adequately justify future presidential budget requests and show the 
effects on its programs of potential budget increases. As it now 
stands, NNSA may not be accurately identifying the costs of base 
capabilities because (1) without guidance to M&O contractors for 
consistent reporting, NNSA cannot identify the total costs to operate 
and maintain essential weapons activities facilities and 
infrastructure, and (2) NNSA analyzes the reported costs of R&D and 
production functions without fully identifying these functions with 
the specific capabilities supported through Stockpile Services. 
Without taking action to identify these costs, NNSA risks being unable 
to identify the return on investment of planned budget increases on 
the health of its base capabilities or to identify opportunities for 
cost saving. NNSA has the opportunity to mitigate these risks by 
addressing them through the ongoing revision of work breakdown 
structures and through identifying means of collecting the total costs 
of its base capabilities from M&O contractors, which will not 
necessitate any changes to the way that Weapons Activities programs 
are budgeted or how funds are expended. Without taking these actions, 
NNSA will not have the management information it needs to better 
justify future budget requests by making its justifications more 
transparent. Additionally, the availability of this information will 
assist Congress with its oversight function. 

Recommendations for Executive Action: 

We recommend that the Administrator of NNSA take the following five 
actions. 

To allow Congress to better oversee management of the nuclear security 
enterprise and to improve NNSA's management information with respect 
to the base capabilities necessary to ensure nuclear weapons are safe, 
secure, and reliable: 

(1) develop guidance for M&O contractors for the consistent collection 
of information on the total costs to operate and maintain weapons 
activities facilities and infrastructure; 

(2) require M&O contractors to report to NNSA annually on the total 
costs to operate and maintain weapons activities facilities and 
infrastructure at their sites; 

(3) evaluate the total costs of operating and maintaining existing 
weapons activities facilities and infrastructure as part of program 
planning processes and budget formulation, especially in relation to 
recapitalization and modernization of the nuclear security enterprise; 
and: 

(4) once the Stockpile Services work breakdown structure reflects a 
product or capability basis, use this work breakdown structure to 
develop product/capability cost estimates that adequately justify the 
congressional budget request for Stockpile Services. 

In light of significant proposed increases to NNSA's nuclear weapons 
program budget in fiscal year 2011 and beyond, we also recommend that 
the Administrator of NNSA: 

(5) include in future years' congressional budget justifications (a) 
detailed justifications for how these proposed funding increases will 
affect program execution and (b) information about how the funding 
increases affected programs. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to NNSA for its review and comment. 
NNSA agreed with the report and its recommendations. NNSA's comments 
on our draft report are presented in appendix IV. NNSA and several of 
its sites also provided technical comments, which we incorporated into 
the report as appropriate. In particular, we worked with NNSA 
officials to ensure the technical accuracy of the discussion of NNSA's 
efforts to revise the Defense Programs national work breakdown 
structure. Because this effort is ongoing, we and NNSA wanted to 
ensure that information included in this report is as current and 
complete as possible. 

We are sending copies of this report to the appropriate congressional 
committees, Secretary of Energy, Administrator of NNSA, and other 
interested parties. In addition, the report will be available at no 
charge on the GAO Web site at [hyperlink, http://www.gao.gov]. 

If you or your staff 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: 

At the request of the Chairman and Ranking Member, Subcommittee on 
Strategic Forces, Committee on Armed Services, House of 
Representatives, we were asked to (1) determine the extent to which 
the National Nuclear Security Administration's (NNSA) Readiness in 
Technical Base and Facilities (RTBF) Operations of Facilities 
congressional budget justification that supplements the Budget of the 
United States Government (i.e., the President's Budget) for fiscal 
year 2009 is based on the total cost of operating and maintaining 
weapons facilities and infrastructure; (2) determine the extent to 
which NNSA's fiscal year 2009 congressional budget justification for 
Stockpile Services identifies the total costs of providing 
foundational research and production support capabilities; and (3) 
discuss the implications, if any, of a smaller stockpile on RTBF 
Operations of Facilities and Stockpile Services costs. 

In conducting our review and to accomplish all of these objectives, we 
reviewed and analyzed relevant documents concerning NNSA's weapons 
programs and activities, such as NNSA's congressional budget 
justifications for fiscal years 2009, 2010, and 2011 and the fiscal 
year 2009 national work breakdown structures for RTBF Operations of 
Facilities and Stockpile Services (see apps. II and III). We analyzed 
NNSA's work breakdown structures and compared them with GAO's best 
practices, as published in the GAO Cost Estimating and Assessment 
Guide: Best Practices for Developing and Managing Capital Program 
Costs.[Footnote 35] To help assess the merits and requirements of 
indirect cost allocations to warhead and bomb types, we examined the 
Statement of Federal Financial Accounting Standards No. 4, promulgated 
by the Federal Accounting Standards Advisory Board, and Cost 
Accounting Standards, promulgated by the U.S. Cost Accounting 
Standards Board. In addition, we interviewed key officials from the 
Department of Energy's Office of the Chief Financial Officer and 
Office of Engineering and Construction Management, and NNSA's Office 
of Defense Programs, Office of Management and Administration, Office 
of Field Financial Management, and site offices. Furthermore, we 
collected and analyzed budget, cost, and program documents and 
interviewed key officials from all eight NNSA sites. We visited six of 
the eight sites, including Lawrence Livermore (LLNL), Los Alamos 
(LANL), and Sandia National Laboratories (SNL); Nevada Test Site 
(NTS); Pantex Plant (Pantex); and Y-12 National Security Complex (Y-
12), where in total we toured more than 30 weapons activities 
facilities. All of these facilities were Mission Critical--directly 
employed to meet highest-level NNSA weapons program milestones. We 
selected these facilities based upon the following criteria: (1) their 
uniqueness within the nuclear security enterprise, (2) the importance 
of the capabilities provided by the facilities, and (3) the complexity 
of their operations. We went to these sites to understand their roles 
in weapons program activities and the nuclear weapons budget, and to 
see the facilities, equipment, and infrastructure within the nuclear 
security enterprise. 

To determine the extent to which NNSA's RTBF Operations of Facilities 
congressional budget justification for fiscal year 2009 is based on 
the total cost of operating and maintaining weapons facilities and 
infrastructure, we also collected data from NNSA's eight sites on 
their facilities and the sources of funding they use to fully support 
the operations and maintenance of weapons activities facilities and 
infrastructure. These data were collected through the use of a data 
collection instrument we developed and transmitted electronically to 
officials identified at all eight sites in the form of a Word 
Electronic Questionnaire. The data collection instrument was used to 
obtain RTBF program information and fiscal year 2009 expenditure data. 
The practical difficulties of employing any data collection instrument 
may introduce unwanted discrepancies. For example, differences in how 
a particular question is interpreted, the sources of information 
available to respondents, or the individual characteristics of the 
people who respond can introduce unwanted variability into the 
results. We included steps in both the data collection and data 
analysis stages to minimize such discrepancies. For example, we took 
the following steps: 

* In developing this data collection instrument, we consulted with 
stakeholders within GAO and with NNSA officials to properly phrase our 
questions and to format the instrument; we also pretested the 
instrument with NNSA officials in the Office of Defense Programs and 
the NNSA Service Center, and with NTS, Pantex, and SNL management and 
operating (M&O) contractors, on a line-by-line basis to ensure the 
questions were clear, complete, and accurate, and made appropriate 
modifications and clarifications to increase data validity and 
reliability. 

* Upon receiving responses from the sites to the data collection 
instrument, we analyzed data on costs, budget, work scope, direct 
funding sources, and indirect cost pools on a consistent basis for all 
sites; we followed up with sites as needed to ensure their responses 
were accurate and complete; and finally, we performed a reliability 
assessment of these data and determined they were sufficiently 
reliable for the purposes of our report. 

In addition, we reviewed NNSA documents such as the RTBF Operations of 
Facilities national work breakdown structure, the RTBF Mission 
Dependency Guidance, and sites' documents such as their RTBF Site 
Execution Plans and RTBF Quarterly Reports, and interviewed NNSA and 
site officials. We also requested general information and general 
fiscal year 2009 funding information from sites on several specific 
weapons activities facilities to use as examples in this report. We 
worked with GAO methodologists to develop criteria for selecting the 
facility examples such as facilities at sites we visited, facilities 
at both laboratories and plants, facilities with diverse funding 
expenditures, and facilities conducting both R&D and production 
missions. 

To determine the extent to which NNSA's fiscal year 2009 congressional 
budget justification for Stockpile Services identifies the total costs 
of providing foundational research and production support 
capabilities, we also examined and analyzed NNSA's Stockpile Services 
national work breakdown and NNSA's expenditure data for fiscal year 
2009, observed neutron generator and plutonium pit manufacturing 
facilities supported with Stockpile Services funds, and interviewed 
NNSA and site officials. In addition, we requested information from 
NNSA on specific Stockpile Services activities to use as examples in 
our report. We selected activities based on their financial 
significance in the Stockpile Services work breakdown structure. 

To discuss the implications, if any, of a smaller stockpile on RTBF 
Operations of Facilities and Stockpile Services costs, we also 
reviewed documents such as NNSA's Final Complex Transformation 
Supplemental Programmatic Environmental Impact Statement and NNSA's 
Infrastructure and Modernization Report to obtain estimates of the 
nuclear security enterprise's fixed costs. In addition, we interviewed 
NNSA and site officials. 

We conducted the work between April 2009 and June 2010 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: Readiness in Technical Base and Facilities Operations of 
Facilities: 

RTBF Operations of Facilities Funding and Work Breakdown Structure: 

Congressional spending directives designate funds within NNSA's 
Weapons Activities appropriation for the RTBF Operations of Facilities 
subprogram at each of NNSA's eight sites. In addition, a small amount 
is also directed for Institutional Site Support, which is at NNSA's 
discretion to prioritize for expenditure (see table 2). 

Table 2: Congressional Spending Directives by Site for RTBF Operations 
of Facilities, Fiscal Year 2009 (Dollars in thousands): 

Site: Kansas City Plant (KCP); 
Spending directives: $89,871. 

Site: LLNL; 
Spending directives: $82,605. 

Site: LANL; 
Spending directives: $289,169. 

Site: NTS; 
Spending directives: $92,203. 

Site: Pantex; 
Spending directives: $101,230. 

Site: SNL[A]; 
Spending directives: $123,992. 

Site: Savannah River Site (SRS); 
Spending directives: $92,762. 

Site: Y-12; 
Spending directives: $235,397. 

Site: Institutional Site Support[B]; 
Spending directives: $56,102. 

Site: Total; 
Spending directives: $1,163,331. 

Source: NNSA's Fiscal Year 2010 Congressional Budget Justification. 

[A] SNL includes the New Mexico and California sites. 

[B] NNSA defines Institutional Site Support as supporting corporate 
activities across the nuclear security enterprise, including planning, 
program management and performance monitoring, independent and 
internal technical reviews and assessments, and contractor support. 
Institutional Site Support also provides funding for specific projects 
across the complex to meet changing programmatic requirements. 
Institutional Site Support funds are directed by Congress to NNSA, 
which obligates funds to sites based on priority need. 

[End of table] 

Table 3 provides NNSA's RTBF work breakdown structure applicable to 
all sites for fiscal year 2009 and showing three levels of detail. 
Sites may create further levels of detail for their own management, 
budgeting, or cost collection. Alternatively, sites may use their own 
work breakdown structures that they ultimately cross-walk to NNSA's 
work breakdown structure to report to NNSA program managers on how 
congressionally directed funds were expended. 

Table 3: NNSA's National Work Breakdown Structure for RTBF Operations 
of Facilities, Fiscal Year 2009: 

RTBF: Operations of Facilities (by site): 

Facilities Management and Support: 
* Facility Management and Administration.
* Facility Operations.
* Facility Engineering.
* Facility Planning and Analysis.
* Facility Training.
* Rental/Lease of Land/Building.
* Other Facility Support Activities. 

Real Property Maintenance: 
* Management, Planning, and Engineering.
* Corrective Maintenance.
* Preventive Maintenance.
* Predictive Maintenance. 

Scientific/Process Equipment and Capabilities (SPEC): 
* SPEC Management and Administration.
* SPEC Operations.
* SPEC Engineering.
* SPEC Planning and Analysis.
* SPEC Training.
* SPEC Maintenance.
* SPEC Upgrades.
* Other SPEC Activities. 

Utilities and General Services: 
* Utilities and General Services Management and Planning.
* Purchased Utilities.
* Site Utilities.
* General Site Services. 

Environment, Safety, Health, and Quality (ESH&Q).
* ESH&Q Management and Planning.
* Environmental.
* Nuclear Safety.
* Industrial Safety and Health.
* Quality Assurance.
* ESH&Q Document Control and Records Management.
* Waste Management. 

Excess Facilities Management and Disposition: 
* Management and Disposition.
* Deactivation.
* Surveillance and Maintenance.
* Decontamination.
* Demolition.
* Other Excess Facilities Management and Disposition. 

Capital Equipment: 
* SPEC Equipment.
* Facility Equipment. 

Other Project Costs (associated with RTBF line item construction 
projects): General Plant Projects: 
* Real Property General Plant Projects.
* Scientific/Process Capability General Plant Projects.
* Utilities General Plant Projects.
* Compliance General Plant Projects.
* Other Construction General Plant Projects. 

Other Project Costs (associated with RTBF line item construction 
projects): Expense Funded Projects: 
* Real Property Expense Funded Projects.
* Scientific/Process Capability Expense Funded Projects.
* Utilities Expense Funded Projects.
* Compliance Expense Funded Projects.
* Other Construction Expense Funded Projects. 

Institutional Site Support: 

Congressional Directed Activities: 

Source: NNSA. 

[End of table] 

Differences in Sites' Cost Accounting Practices for RTBF Operations of 
Facilities: 

Each of the eight sites in the nuclear security enterprise has 
established its own cost accounting practices for how to account for 
the activities necessary to operate and maintain weapons activities 
facilities and infrastructure. While individual M&O contractors may be 
Cost Accounting Standards (CAS) compliant,[Footnote 36] differences in 
their cost accounting practices preclude NNSA from being able to 
identify the total costs to operate and maintain the facilities and 
infrastructure essential to achieving Stockpile Support and science, 
technology, and engineering (ST&E) program missions. These differences 
include determining (1) which weapons activities facilities and 
infrastructure individual sites support with RTBF Operations of 
Facilities funds, (2) which activities included in the RTBF Operations 
of Facilities work breakdown structure each site supports directly or 
indirectly, and (3) the additional funding sources sites use to 
support certain activities included in the RTBF Operations of 
Facilities work breakdown structure. 

Facilities and Infrastructure Supported with RTBF Operations of 
Facilities Funds: 

Consistent with congressional funding direction, each site has 
discretion to determine which of its facilities and infrastructure 
will be supported with RTBF Operations of Facilities funds.[Footnote 
37] While NNSA has identified the mission essential facilities and 
infrastructure at each of its sites, NNSA does not require M&O 
contractors to pay for essential facilities and infrastructure with 
RTBF Operations of Facilities funds. For example, LLNL officials told 
us their top priority for RTBF Operations of Facilities funds is fully 
supporting safe and secure nuclear facilities operations. In fiscal 
year 2009, only KCP fully funded all of its essential weapons 
activities facilities with RTBF Operations of Facilities funds. Table 
4 shows the extent to which weapons activities facilities and 
infrastructure were fully, partially, or not supported with RTBF 
Operations of Facilities funds in fiscal year 2009 across the nuclear 
security enterprise. 

Table 4: Number and Percentage of Weapons Activities Facilities 
Supported Directly with RTBF Operations of Facilities Funds, by 
Category, Fiscal Year 2009: 

Facilities: Fully supported with RTBF Operations of Facilities; 
Mission Critical facilities: Number: 97; 
Mission Critical facilities: Percent: 44; 
Mission Dependent, Not Critical facilities: Number: 84; 
Mission Dependent, Not Critical facilities: Percent: 5. 

Facilities: Partially supported with RTBF Operations of Facilities; 
Mission Critical facilities: Number: 72; 
Mission Critical facilities: Percent: 32; 
Mission Dependent, Not Critical facilities: Number: 937; 
Mission Dependent, Not Critical facilities: Percent: 61. 

Facilities: Not supported with RTBF Operations of Facilities; 
Mission Critical facilities: Number: 54; 
Mission Critical facilities: Percent: 24; 
Mission Dependent, Not Critical facilities: Number: 529; 
Mission Dependent, Not Critical facilities: Percent: 34. 

Source: GAO analysis of responses provided by site officials to data 
collection instrument. 

[End of table] 

Activities Included in the RTBF Operations of Facilities Work 
Breakdown Structure Supported Directly or Indirectly: 

While NNSA can identify the activities its contractors classify as 
direct to the RTBF Operations of Facilities program, NNSA cannot 
easily identify those activities its contractors classify as indirect 
but that also are included in the RTBF Operations of Facilities work 
breakdown structure. Six of the eight sites in the nuclear security 
enterprise reported to us that in fiscal year 2009 they allocated 
certain activities included in the RTBF Operations of Facilities work 
scope into indirect cost pools. These indirect cost pools are often 
funded through multiple funding sources.[Footnote 38] For example, 

* NNSA includes utilities and general services, such as electric power 
and steam supplied to weapons activities facilities, as an activity in 
its RTBF Operations of Facilities work breakdown structure, but two 
sites--LLNL and SNL--did not consider utilities costs to be direct to 
the RTBF Operations of Facilities program in fiscal year 2009. 

* The RTBF Operations of Facilities work breakdown structure includes 
real property maintenance--maintenance for facilities, facility 
equipment, and programmatic equipment--when that real property 
supports multiple, not individual, weapon programs. SNL officials told 
us that their direct costs to the RTBF Operations of Facilities 
program for real property maintenance include only the programmatic 
equipment that provides mission capabilities inside weapons activities 
facilities. Real property maintenance costs for facilities or facility 
equipment are indirect. In contrast, LLNL officials told us that real 
property maintenance costs for programmatic equipment, facility 
equipment, and facilities themselves may be direct costs to the RTBF 
Operations of Facilities program, depending on the facility and the 
nature of the equipment. 

* NNSA includes SPEC, such as running and maintaining programmatic 
equipment and training staff to operate this equipment, in its RTBF 
Operations of Facilities work breakdown structure,[Footnote 39] but 
there were significant differences across the nuclear security 
enterprise in how SPEC costs were actually funded during fiscal year 
2009. Three sites--KCP, Pantex, and NTS--funded all SPEC costs 
directly with RTBF Operations of Facilities funds. Another three 
sites--LLNL, LANL, and SNL--classified SPEC costs as direct and 
partially paid for these costs with RTBF Operations of Facilities 
funds. Y-12 did not fund SPEC with RTBF Operations of Facilities funds 
at all, while SRS reported that it did not spend any money on SPEC 
activities in fiscal year 2009. 

[Side bar: 
Nevada Test Site’s U1a Complex: 

Year facility began operations: 1988. 

Facility dimensions: The 14 million-square foot complex is a 
laboratory approximately 960 feet underground and consisting of 
several mined horizontal tunnels. 

NNSA Defense Programs missions supported: U1a supports LANL’s 
subcritical experiments, which use explosives to assess the properties 
of plutonium under high-pressures that stop short of a nuclear 
detonation. 

Other federal government missions supported: None. 

Key weapons capabilities and systems supported: U1a is used by the 
nuclear security enterprise to conduct shock physics experiments with 
plutonium and provides support to the entire enduring nuclear weapon 
stockpile. 

Total cost to execute the Operations of Facilities work scope in 
fiscal year 2009: $15,965,957. 

RTBF Operations of Facilities expenditures in fiscal year 2009: 
$15,965,957. 

[Photograph of site: Source: National Security Technologies (NSTec), 
LLC.] 
End of sidebar] 

Additional Funding Sources Used to Support Activities Included in the 
RTBF Operations of Facilities Work Breakdown Structure: 

Finally, all sites used funding in addition to RTBF Operations of 
Facilities funds to pay for activities included in the RTBF Operations 
of Facilities work scope in fiscal year 2009. Consistent with CAS, M&O 
contractors are allowed to use these additional funding sources as 
long as their cost accounting practices are disclosed; their costing 
practices for supporting facilities and infrastructure are 
consistently applied; the programs supporting facilities and 
infrastructure benefit from their use; and their practices otherwise 
comply with applicable cost principles, CAS, and the M&O contract. 
These additional sources of funding included (1) other Weapons 
Activities programs that in some instances are congressionally 
mandated, and (2) programs outside of Weapons Activities, including 
Defense Nuclear Nonproliferation, Department of Energy (DOE), and 
other federal agencies.[Footnote 40] NNSA officials cannot easily 
identify all of the costs associated with RTBF Operations of 
Facilities work scope paid for through these other funding sources. In 
response to our data collection instrument, site officials identified 
11 sources of funding congressionally directed for other Weapons 
Activities programs and subprograms that they expended, in part, on 
activities they considered to be included in NNSA's RTBF Operations of 
Facilities work breakdown structure. For example, 

* As congressionally directed, LLNL expended funds designated for the 
Inertial Confinement Fusion and High Yield and the Advanced Simulation 
and Computing Campaigns to support RTBF Operations of Facilities 
activities for facilities and infrastructure associated with these 
programs. 

* LANL expended congressionally directed funds for the Directed 
Stockpile Work program to support activities included in the RTBF 
Operations of Facilities work breakdown structure--including some 
facilities management and support, real property maintenance, and SPEC 
costs. 

* SRS expended funds congressionally directed for the Tritium 
Readiness Campaign to support all the activities included in the RTBF 
Operations of Facilities work breakdown structure at its Tritium 
Extraction Facility. 

* Y-12 expended funds congressionally directed for the Facilities 
Infrastructure Recapitalization Program (FIRP) to support RTBF 
Operations of Facilities activities covering real property 
maintenance, excess facilities management and disposition, and 
construction projects.[Footnote 41] 

* NNSA includes capital equipment procurement for both SPEC and 
facility equipment in its RTBF Operations of Facilities work breakdown 
structure.[Footnote 42] However, most M&O sites only partially paid 
for capital equipment costs in their weapons activities facilities 
with RTBF Operations of Facilities funds in fiscal year 2009.[Footnote 
43] Officials from multiple sites, including Pantex and SNL, told us 
that some capital equipment costs that could be paid for with RTBF 
Operations of Facilities funds can also be paid for with funds 
directed for other Weapons Activities programs, such as Stockpile 
Services, that use the equipment. 

[Side bar: 
LLNL’s High Explosives Applications Facility (HEAF): 

Year facility began operations: 1989. 

Facility dimensions: approximately 121,028 square feet. 

NNSA Defense Programs missions supported: High explosives research, 
development, and testing for the Science and Engineering Campaigns, 
Advanced Simulation and Computing (computer modeling), and Directed 
Stockpile Work (detonator surveillance). 

Other federal government missions supported: Department of Defense’s 
advanced conventional weapon technologies and Department of Homeland 
Security’s threat assessments on conventional and improvised 
explosives. 

Key weapons capabilities supported: HEAF is used to conduct high 
explosives R&D shock research and as a laboratory for the design, 
development, and testing of detonators. 

Total cost to execute the Operations of Facilities work scope in 
fiscal year 2009: Approximately $8.4 million. 

RTBF Operations of Facilities expenditures in fiscal year 2009: $3.8 
million. 

Other expenditures to execute the Operations of Facilities work scope 
in fiscal year 2009: FIRP and costs allocated to indirect cost pools. 

[Photograph of site: Source: Lawrence Livermore National Laboratory.] 
End of side bar] 

In addition, some sites with essential facilities that are used by 
multiple programs have developed user fee or cost recovery models for 
those facilities. These models are generally based on charges to 
programmatic users based on rates applied to, for example, the square 
footage of a facility users occupy or the volume of waste they 
produce. User fees may be charged as direct costs to Weapons 
Activities programs as well as to other NNSA, DOE, and non-DOE 
programs and work for others projects, or they may be charged through 
an indirect cost pool. These charges may be in addition to a base 
amount of support provided through RTBF Operations of Facilities. Some 
sites, such as SNL, NTS, and Y-12 apply cost recovery models to all of 
their facilities. In contrast, LANL applies user fees to those certain 
facilities that are multiprogram in nature and particularly expensive 
to operate and maintain. For example, LANL officials explained that in 
fiscal year 2009 it charged approximately $34.8 million in user fees 
to Weapons Activities programs--such as the pit manufacturing program, 
and the Science and Engineering Campaigns--as well as to other work 
sponsors that used space inside the laboratory's plutonium facility. 

[Side bar: 
LANL’s Plutonium Facility (PF-4): 

Year facility began operations: 1974. 

Facility Dimensions: approximately 232,753 gross square feet. 

NNSA Defense Programs missions supported: Directed Stockpile Work 
(plutonium infrastructure sustainment and life extension programs), 
ST&E missions associated with plutonium R&D, Advanced Simulation and 
Computing Campaign (computer modeling), and recovery and recycling of 
plutonium. 

Other federal government missions supported: NNSA’s Defense Nuclear 
Nonproliferation; DOE’s Office of Nuclear Energy; and DOE’s Material, 
Identification, and Surveillance Program. 

Key weapons capabilities and systems supported: PF-4 capabilities 
include plutonium stabilization for storing and manufacturing 
plutonium components; surveillance and disassembly of plutonium 
weapons components; plutonium processing R&D; R&D testing on power 
sources; and storage, shipping, and receiving of special nuclear 
material. 

Total cost to execute the Operations of Facilities work scope in 
fiscal year 2009: LANL was unable to determine the total cost to 
execute Operations of Facilities work scope at PF-4. 

RTBF Operations of Facilities expenditures in fiscal year 2009: $53.6 
million. 

Other expenditures to execute the Operations of Facilities work scope 
in fiscal year 2009: $34.8 million in cost recovery collected from 
Stockpile Services; Science Campaign; NNSA’s Defense Nuclear 
Nonproliferation; DOE’s Office of Nuclear Energy; and DOE’s Material, 
Identification, and Surveillance program; additional costs allocated 
to indirect cost pools. 
End of side bar] 

[End of section] 

Appendix III: Stockpile Services: 

Congressional spending directives designate funds within NNSA's 
Weapons Activities appropriation for the Stockpile Services 
subprogram. Within the subprogram, NNSA obligates funds to its eight 
sites for expenditure. In fiscal year 2009, NNSA obligated $866.4 
million to its sites to execute Stockpile Services work scope (see 
figure 2). 

Figure 2: NNSA's Stockpile Services Obligations to Sites, Fiscal Year 
2009: 

[Refer to PDF for image: pie-chart] 

LANL: $239.1 million; 
SNL: $207.2 million; 
KCP: $102.8 million; 
Y-12: $93.2 million; 
Pantex: $80.0 million; 
LLNL: $71.8 million; 
NTS: $42.6 million; 
SRS: $15.3 million; 
NNSA[A]: $8.4 million; 
Total: $860.4[B] million. 

Source: NNSA. 

[A] Includes small amounts for sites outside the nuclear security 
enterprise. 

[B] The $6 million difference between the total shown here and the 
total of the five Stockpile Services work groups discussed on page 17 
represents funds obligated to support M&O contractors from across the 
nuclear security enterprise who are temporarily assigned to duties at 
NNSA. 

[End of figure] 

According to our cost guide, a work breakdown structure is the 
cornerstone of every program because it defines in detail the work 
necessary to accomplish a program's objectives and promotes 
accountability by identifying work products that are independent of 
one another.[Footnote 44] This provides a basis for identifying 
resources and tasks for developing a program cost estimate. The 
ability to generate reliable cost estimates is a critical function, 
and a program's cost estimate is often used to establish budgets. 
NNSA's sites may create further levels of detail within the work 
breakdown structure for their own management, budgeting, or cost 
collection. Our cost guide is a compilation of cost estimating best 
practices from across industry and government. Among other things, 
these best practices discuss establishing a product-oriented work 
breakdown structure, which allows a program to track cost and schedule 
by defined deliverables. This allows a program manager to more 
precisely identify which components are causing cost or schedule 
overruns and to more effectively mitigate the root causes of overruns. 
For NNSA, a product may best be thought of more broadly as a 
capability, since a significant portion of NNSA's mission is research 
and development (R&D). Thus, a product-oriented work breakdown 
structure for NNSA could be focused on the capability to execute a 
class of experiments, to produce a weapon component, or to conduct 
specified R&D. Our cost guide emphasizes that a product-oriented work 
breakdown structure should contain program management and other 
overhead activities to make sure all work activities are included. In 
contrast, a functionally based work breakdown structure--for example, 
one based on manufacturing, engineering, or quality control--would not 
have the detailed information to reflect cost, schedule, and technical 
performance on specific deliverables. Table 5 provides NNSA's work 
breakdown structure applicable to all sites for fiscal year 2009 and 
showing four levels of detail. 

Table 5: NNSA's National Work Breakdown Structure for Stockpile 
Services, Fiscal Year 2009: 

Directed Stockpile Work: 

Stockpile Services: 

Research and Development Certification and Safety: 
* Weapon Component Development.
* Base Hydrodynamic Experiments and Subcritical Tests.
* Department of Defense/Department of Energy Munitions Memorandum of 
Understanding.
* Research and Development Studies. 

Management, Technology, and Production: 
* Management: Product Realization Integrated Digital Enterprise.
* Management: Weapons Training and Military Liaison.
* Management: Studies and Initiatives.
* Management: General Management Support.
* Technology: Assessments and Studies.
* Production: Surveillance.
* Production: Support for External Production Missions.
* Production: Production of new non-weapon-specific base spares, 
test/handling gear, containers, and weapon components.
* Production: Maintenance of existing non-weapon-specific base spares, 
test/handling gear, containers, and weapon components. 

Production Support: 
* Engineering Operations.
* Manufacturing Operations.
* Quality Supervision and Control.
* Tool, Gage, and Equipment Services.
* Purchasing, Shipping, and Materials Management.
* Electronic Product Flow Information Systems. 

Research and Development Support: 
* Research and Development Infrastructure Support.
* Program Management and Integration for Research and Development 
Activities.
* Laboratory Research and Development Support to the Production 
Agencies.
* Nuclear Component Surveillance Activities.
* Quality Control for Research and Development Activities. 

Plutonium Sustainment: 
* Pit Manufacturing: Facility Services and Support.
* Pit Manufacturing: Manufacturing Operations.
* Pit Manufacturing: Infrastructure and Program/Project Management.
* Pit Manufacturing: Equipment Engineering and Installation.
* Pit Manufacturing: Pit Component Characterization.
* Pit Capability: Infrastructure and Program Management.
* Pit Manufacturing: Technology Design and Development. 

Source: NNSA. 

[End of table] 

As table 5 shows, NNSA's Stockpile Services work breakdown structure 
is organized around five work activity groups, four of which are 
primarily functionally oriented. Descriptions of these work activity 
groups follow: 

* Production Support. Production Support is the largest activity group 
within Stockpile Services. According to NNSA's fiscal year 2009 
congressional budget justification and as confirmed by NNSA officials, 
Production Support includes those non-weapon-type-specific or multi- 
weapon-type activities that a site performs to support its internal 
site production mission, whatever that mission may be. More 
specifically, these support activities--such as engineering and 
manufacturing operations; quality supervision and control; tool, gage, 
and equipment services (tooling); purchasing, shipping, and materials 
management; and electronic information systems--enable the production 
of weapons components and weapon assembly/disassembly, and help 
support surveillance testing. To this end, NNSA officials 
characterized Production Support as paying directly for the indirect 
activities at individual sites that (1) are associated with providing 
manufacturing support for production processes and (2) support more 
than one warhead or bomb type. 

[Side bar: 
Tooling in Support of Manufacturing: 

In fiscal year 2009, $59.6 million in Production Support funds was 
spent to provide tooling and tooling services at sites where 
production work occurs. Tooling provides production facilities with 
the tools, parts and accessories, machinery, equipment, and labor 
needed for production and to maintain production equipment. This work 
also involves preparation of specifications and designs for tooling 
and test equipment. The illustration below shows a vacuum calibration 
system—a piece of specialized equipment used to calibrate/certify 
vacuum gages—for which tooling funds support corrective and preventive 
maintenance. 

[Photograph: Source: NNSA.] 
End of side bar] 

* Management, Technology, and Production (MTP). MTP is the second 
largest activity group within Stockpile Services. According to NNSA, 
MTP includes activities that (1) sustain and improve stockpile 
management, (2) develop and deliver weapon use control technologies, 
[Footnote 45] and (3) result in production of weapons components for 
use in multiple warhead and bomb types. In contrast to Production 
Support activities that are focused on individual sites' production 
missions, MTP includes those activities that benefit the nuclear 
security enterprise as a whole. NNSA officials characterized MTP as 
supporting a mix of direct and indirect activities. More specifically, 
among other things, MTP management funds support weapons test data 
archiving and other shared data systems; MTP technology funds support 
studies and assessments relating to the safety and security of nuclear 
weapons; and MTP production funds support the interpretation of the 
results from surveillance tests, which are used to monitor and 
evaluate the condition, safety, and reliability of weapons in the 
stockpile.[Footnote 46] In addition, certain activities are captured 
within MTP that would be classified by NNSA if associated with a 
specific warhead or bomb type.[Footnote 47] According to NNSA 
officials, costs for these activities represent a relatively small 
amount of MTP, which one official estimated at approximately 10 
percent of surveillance costs, or about $4.6 million in fiscal year 
2009. 

[Side bar: 
Hydrodynamic and Subcritical Tests: 

In fiscal year 2009, NNSA and its M&O contractors spent $93.3 million 
in R&D Certification and Safety funds supporting the base capability 
to conduct hydrodynamic and subcritical tests. These experiments 
improve understanding of weapons materials. Hydrodynamic tests assess 
the performance and reliability of a weapon by using high explosives 
to detonate mock weapons that contain surrogate rather than fissile 
materials, to analyze the response of the adjacent materials in the 
weapon. Subcritical tests use explosives to assess the properties of 
plutonium under high pressures that stop short of a nuclear 
detonation. The illustration below shows the Cygnus dual-beam 
radiographic facility, which provides X-ray imaging of subcritical 
tests. Cygnus is located in the NTS’s U1a Tunnel Complex, 
approximately 1,000 feet underground. 

[Photograph: Source: NNSA.] 
End of side bar] 

* R&D Certification and Safety. R&D Certification and Safety provides 
the underlying capabilities to mature basic research conducted in ST&E 
programs. In this sense, R&D Certification and Safety serves as a 
technology development bridge between research and weaponized 
technologies. Among other things, R&D Certification and Safety funds 
support three major activities. First, funds are used to support 
design work to develop certain limited life weapon components that are 
used in multiple warhead and bomb types and that must be exchanged on 
a regular basis because they expire. Second, funds support the 
specialized facilities, equipment, and personnel to maintain a base 
capability to perform hydrodynamic tests, which examine the 
performance of nuclear weapons pits using surrogate materials to 
replace fissionable materials, and subcritical experiments, which 
examine the material properties of plutonium. Finally, funds support 
the preparation of various types of studies, including those produced 
annually to report to the President of the United States on the 
safety, security, and reliability of the stockpile. 

* R&D Support. R&D Support is the smallest of the functional work 
activity groups in Stockpile Services. R&D Support consists largely of 
indirect activities that provide administrative and infrastructure 
support for sites' R&D missions. These activities include program 
management for and coordination of Stockpile Services' many different 
outputs, R&D quality control, computing hardware for personnel, and 
financial database maintenance. 

* Plutonium Sustainment. Plutonium Sustainment is the only fully 
product-oriented activity group in Stockpile Services. While 
incorporated as an activity group within Stockpile Services, Plutonium 
Sustainment has its own work breakdown structure that is independent 
from the other four Stockpile Services activity groups. The Plutonium 
Sustainment work breakdown structure includes production support, R&D 
support, and program management activities. According to an NNSA 
official, this work breakdown structure, which captures work 
activities associated with pit manufacturing and related R&D--as well 
as associated indirect and overhead costs--is largely a legacy from 
when Plutonium Sustainment was an ST&E program instead of part of 
Stockpile Services.[Footnote 48] This is markedly different from the 
other four groups, where production or R&D activities are organized 
separately from their supporting overhead activities. The same NNSA 
officials said that nearly all Plutonium Sustainment funds are spent 
at LANL, which is home to the nation's pit manufacturing capability. 
These funds not only support the base capabilities for plutonium R&D 
and pit manufacturing, but also contribute to the operation and 
maintenance of the facilities and infrastructure necessary to conduct 
these activities as well as the actual manufacturing of a limited 
number of pits each year. 

[End of section] 

Appendix IV: Comments from the National Nuclear Security 
Administration: 

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

June 11, 2010: 
	
Mr. Gene Aloise: 
Director, National Resources: 
and Environment: 
U.S. Government Accountability Office: 
Washington, D.C. 20458: 

Dear Mr. Aloise: 

The National Nuclear Security Administration (NNSA) appreciates the 
opportunity to review the Government Accountability Office (GAO) draft 
report, Nuclear Weapons: Actions Needed to Identify Total Costs of 
Weapons Complex Infrastructure and Research and Production 
Capabilities, GAO-10-582. I understand, that at the request of the 
Strategic Forces Subcommittee of the House Armed Services Committee, 
GAO was asked to determine (1) the extent to which NNSA's Readiness in 
Technical Base and Facilities (RTBF) Operations of Facilities 
congressional budget justification that supplements the Budget of the 
United States for FY 2009 is based on the total cost of operating and 
maintaining weapons facilities and infrastructure; (2) the extent to 
which NNSA's FY 2009 congressional budget justification for Stockpile 
Services identifies the total costs of providing foundational research 
and production support capabilities; and (3) discuss the implications, 
if any, of a smaller stockpile on RTBF Operations of Facilities and 
Stockpile Services costs. The review provided NNSA with 
recommendations focused on strengthening contractor cost reporting and 
improving cost evaluation, cost structure and data collection 
capabilities. 

NNSA has recognized the need for improvements in these areas for some 
time and has been working diligently to enhance the integration of our 
budget information in a way that builds on past improvements. NNSA 
shares the GAO opinion that these improvements, when implemented, will 
address the noted concerns and will result in much better capability 
to present integrated budget information about the investments needed 
to deliver the Defense Programs mission. 

In many cases, NNSA's current capabilities rely on the expert 
knowledge of our program managers to define the necessary capabilities 
and linkages in an integrated fashion. NNSA is well on its way to 
implementing a portfolio management system for Defense Programs that 
incorporates a National Work Breakdown Structure that accounts for all 
work required to execute the mission and documents the cost of mission 
products and capabilities. We are making progress in several cost 
management initiatives including a uniform cost structure. 

NNSA appreciates the GAO's efforts in identifying opportunities for 
ongoing improvement and is confident in our ability to achieve these 
improvements in the coming year. We are committed to being effective 
stewards of the taxpayer's money, and take that responsibility very 
seriously. We would like to acknowledge and thank the efforts of the 
GAO auditors in working with us in ensuring the technical accuracy of 
this draft report. 

If you have any questions concerning this response, please contact 
JoAnne Parker, Director, Office of Internal Controls, at 202-586-1913. 

Sincerely, 

Signed by: 

Gerald Talbot, 
Associate Administrator for Management and Administration: 

Enclosure: 

cc: Principal Assistant Deputy Administration for Military Application: 

[End of section] 

Appendix V: GAO Contacts and Staff Acknowledgments: 

GAO Contact: 

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

Acknowledgments: 

In addition to the contact named above, the following staff members 
made key contributions to this report: Jonathan Gill, Assistant 
Director; John Bauckman; Allison Bawden; Muriel Brown; Abe Dymond; 
Eugene Gray; Carol Henn; Alison O'Neill; Timothy Persons; Cheryl 
Peterson; Rebecca Shea; Vasiliki Theodoropoulos; Jack Warner; and 
Franklyn Yao. 

[End of section] 

Footnotes: 

[1] In 1992, the United States began a moratorium on testing nuclear 
weapons. Subsequently, the President extended this moratorium in 1993, 
and Congress, in the National Defense Authorization Act of 1994, 
directed the Department of Energy to establish a science-based 
stockpile stewardship program to maintain the nuclear weapons 
stockpile without nuclear testing. Pub. L. No. 103-160, § 3138 (1994). 

[2] Department of Energy, NNSA, Final Complex Transformation 
Supplemental Programmatic Environmental Impact Statement Summary, DOE/ 
EIS-0236-S4 (Washington, D.C.: Oct. 2008), and associated Records of 
Decision published in the Federal Register at 73 Fed. Reg. 77644 (Dec. 
19, 2008) and 73 Fed. Reg. 77656 (Dec. 19, 2008). 

[3] Department of Defense, Nuclear Posture Review Report, (Washington, 
D.C.: April 2010). The Nuclear Posture Review is a legislatively 
mandated review that establishes U.S. nuclear policy, strategies, 
capabilities, and force posture for the next 5 to 10 years. Pub. L. 
No. 110-181, div. A, title X, §1070, 122 stat. 3, 327 (Jan. 28, 2008). 

[4] Although there are seven different warhead and bomb types, several 
of these have multiple variants. 

[5] Omnibus Appropriations Act, 2009, Pub. L. No. 111-8 (Mar. 11, 
2009) and Supplemental Appropriations Act, 2009, Pub. L. No. 111-32 
(Jun. 24, 2009). 

[6] Joint Explanatory Statement, Regarding H.R. 1105, Omnibus 
Appropriations Act, 2009, 155 Cong. Rec. H1653, H1962-63 (Feb. 23, 
2009). Although the amounts designated in committee reports for each 
of the NNSA weapons activity budget line items are not legally binding 
and may be reprogrammed within the Weapons Activities appropriation 
account, the appropriations committees impose limitations on NNSA's 
ability to reprogram funds from one line item, such as Stockpile 
Services, to another over the course of a year. 

[7] According to the Federal Accounting Standards Advisory Board, 
established in 1990 to promulgate accounting standards and principles 
for the U.S. government, the full costs of government programs include 
evaluating direct and indirect costs. Direct costs are costs that can 
be specifically identified with an output, including salaries and 
benefits for employees working directly on the output, materials, 
supplies, and costs for facilities and equipment used exclusively to 
produce the output. Indirect costs are costs that are jointly or 
commonly used to produce two or more types of outputs but are not 
specifically identifiable with any output. These may include costs for 
general administration, research and technical support, and operations 
and maintenance for buildings and equipment. 

[8] 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). 

[9] M&O contracts are agreements under which the government contracts 
for the operation, maintenance, or support, on its behalf, of a 
government-owned or -controlled research, development, special 
production, or testing establishment wholly or principally devoted to 
one or more major programs of the contracting federal agency. Federal 
Acquisition Regulation, 48 C.F.R. § 17.601. 

[10] In this report, we refer to funding instructions contained in the 
legislative history of NNSA's appropriations acts as congressional 
spending directives. Committee reports contain congressional spending 
directives that instruct NNSA to make specific amounts of funding 
available to each of its operating programs from within the Weapons 
Activities appropriation. For more information, see GAO, Congressional 
Directives: Selected Agencies' Processes for Responding to Funding 
Instruction, GAO-08-209 (Washington, D.C.: Jan. 31, 2008). 

[11] Beginning in fiscal year 2008, congressional spending directives 
designated specific amounts of RTBF Operations of Facilities funds for 
each NNSA site. In prior years, the total amount of RTBF Operations of 
Facilities funds had been directed to NNSA, which made decisions about 
the amounts to obligate to each site. 

[12] A single building may actually comprise multiple facilities. For 
example, in Pantex's Building 12-44--which is used for assembling and 
disassembling nuclear weapons--each assembly cell is counted as a 
separate Mission Critical facility. 

[13] Fiscal year 2009 funds for Weapons Dismantlement and Disposition 
included almost $70 million in operating funds associated with 
construction projects that are no longer funded through this 
subprogram. 

[14] CAS is a set of 19 standards promulgated by the U.S. Cost 
Accounting Standards Board, an independent and statutorily established 
board (41 U.S.C. §422) that is administratively part of the Office of 
Management and Budget's Office of Federal Procurement Policy. For 
current applicability of CAS, see chapter 99 of Title 48, U.S. Code of 
Federal Regulations. 

[15] GAO examined trends in indirect cost rates at five DOE 
laboratories, three of which are NNSA laboratories, in 2005. See GAO, 
Department of Energy: Additional Opportunities Exist for Reducing 
Laboratory Contractors' Support Costs, [hyperlink, 
http://www.gao.gov/products/GAO-05-897] (Washington, D.C.: Sept. 9, 
2005). 

[16] In this report, when we refer to the RTBF Operations of 
Facilities or the Stockpile Services work scopes, we are referring to 
the complete set of activities that may be paid for with 
congressionally directed funds for these programs as defined by their 
work breakdown structures. Consistent with sites' cost accounting 
practices, activities included in these work scopes may in fact be 
paid for with other funding sources. 

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

[18] Throughout this report, we consider work breakdown structures 
that are oriented around production or R&D capabilities within the 
definition of a product oriented work breakdown structure where the 
maintenance of a production or R&D capability is the output. However, 
when following the product-oriented best practice, there should not be 
work breakdown structure elements for various functional activities 
like design, engineering, tooling, risk, or quality, because these 
efforts should be embedded in each activity. 

[19] Federal Accounting Standards Advisory Board, Statement of Federal 
Financial Accounting Standards No. 4, Managerial Cost Accounting 
Standards and Concepts, (Washington, D.C.: June 2008). 

[20] GAO, Nuclear Weapons: Opportunities Exist to Improve the 
Budgeting, Cost Accounting, and Management Associated with the 
Stockpile Life Extension Program, [hyperlink, 
http://www.gao.gov/products/GAO-03-583] (Washington, D.C.: July 28, 
2003). 

[21] Our review did not address the extent to which individual M&O 
contractors' cost accounting practices are CAS compliant. Rather, our 
review focused on the extent to which CAS allows contractors' cost 
accounting practices to differ from another to expend the same funds. 

[22] Officials from Y-12 and LANL told us they are able to identify 
the total amounts of funding they accumulate in their indirect cost 
pools to pay for sitewide costs. 

[23] NNSA does require sitewide reporting on different categories of 
support costs, including several categories that are included in the 
RTBF Operations of Facilities work scope, such as facilities 
management, maintenance, and utilities. According to an NNSA official, 
these costs include support costs associated with weapons activities 
facilities and infrastructure, but these costs cannot be separated 
from sitewide support costs. 

[24] In providing these estimates, officials from these sites 
cautioned that because of how indirect cost pools are accumulated, the 
multiple funding sources that support RTBF Operations of Facilities 
work scope are not completely independent from one another. Thus, 
under current practices, there is the potential for error when 
calculating this total. 

[25] Weapon use control technologies are solutions that can be 
engineered into nuclear weapons to help ensure denial of unauthorized 
use. 

[26] Hydrodynamic tests examine the performance of certain nuclear 
weapons components, known as pits, using surrogate materials to 
replace fissile materials. Subcritical experiments examine the 
material properties of plutonium through shock physics experiments. 

[27] Plutonium Sustainment became part of the Stockpile Services work 
breakdown structure in fiscal year 2009 once its primary goal, to 
reestablish the nation's capability to manufacture plutonium weapons 
components, known as pits, was achieved. The capability to manufacture 
and certify pits is critical to maintaining the reliability of the 
stockpile. The nation's capability to manufacture pits was lost when 
DOE's Rocky Flats Plant near Denver, Colorado, was closed in 1989. 
Beginning in 2002, a Pit Manufacturing Campaign was established as an 
ST&E program to reconstitute this capability. The campaign ended when 
this effort was determined to be successful, and funds to maintain the 
capability and continue R&D work on plutonium were transferred to 
Stockpile Services in fiscal year 2009. 

[28] In contrast, during fiscal year 2009, NNSA undertook a zero-based 
review of costs associated with its physical security program, the 
goals of which included elimination of unnecessary costs and 
improvement of the consistency and clarity of security requirements. 
As a result, NNSA's fiscal year 2011 congressional budget 
justification attributes a $38.8 million reduction in the President's 
request for physical security funding to the results of this zero-
based review. 

[29] In providing technical comments on a draft of this report, LANL 
officials said the base budget for pit manufacturing is about $140 
million. 

[30] GAO, Los Alamos National Laboratory: Long-Term Strategies Needed 
to Improve Security Management and Oversight, [hyperlink, 
http://www.gao.gov/products/GAO-08-694] (Washington, D.C.: June 13, 
2008), and Nuclear Security: Better Oversight Needed to Ensure That 
Security Improvements at Lawrence Livermore National Laboratory Are 
Fully Implemented and Sustained, [hyperlink, 
http://www.gao.gov/products/GAO-09-321] (Washington, D.C.: Mar. 16, 
2009). 

[31] GAO, Nuclear Weapons: National Nuclear Security Administration 
Needs to Better Manage Risks Associated with Modernization of Its 
Kansas City Plant, [hyperlink, http://www.gao.gov/products/GAO-10-115] 
(Washington, D.C.: Oct. 23, 2009). 

[32] Planned increases to the fiscal years 2012 through 2015 budget 
requests for Weapons Activities were included in NNSA's congressional 
budget justification for fiscal year 2011. 

[33] GAO, Nuclear Weapons: Improved Management Needed to Implement 
Stockpile Stewardship Program Effectively, [hyperlink, 
http://www.gao.gov/products/GAO-01-48] (Washington, D.C.: Dec. 14, 
2000). 

[34] H.R. Rep. 107-258. 

[35] 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). 

[36] Our review did not address the extent to which individual M&O 
contractors' cost accounting practices are CAS compliant. Rather, our 
review focused on the extent to which CAS allows contractors' cost 
accounting practices to differ from one another to expend the same 
funds. 

[37] In some instances, Congress directed that other programs, such as 
the Advanced Simulation and Computing Campaign, would pay for the 
operations and maintenance of specific Mission Critical weapons 
activities facilities and infrastructure associated with that program. 

[38] Consistent with CAS, when indirect cost pools were used to 
support these activities, the costs were paid indirectly sitewide, 
including for weapons activities facilities and infrastructure, not 
simply in lieu of using congressionally directed RTBF Operations of 
Facilities funds. 

[39] NNSA defines SPEC as including costs associated with maintaining, 
repairing, and upgrading the scientific and/or process equipment that 
provides Stockpile Support and ST&E programs with the capabilities 
needed to accomplish their missions. 

[40] NNSA's sites often undertake "work for others," which DOE Order 
481.1C defines as the performance of work for non-DOE entities by DOE/ 
NNSA personnel and their respective contractor personnel or the use of 
DOE/NNSA facilities for work that is not directly funded by DOE/NNSA 
appropriations. 

[41] FIRP was authorized by Congress to eliminate a backlog of 
deferred maintenance in weapons activities facilities and 
infrastructure by fiscal year 2013. NNSA obligates funding for this 
program to sites on an individual project basis for work to address 
maintenance deferred prior to fiscal year 2005. While NNSA separates 
FIRP projects from RTBF Operations of Facilities work scope, we found 
that several sites view FIRP funds as integral to their overall 
maintenance funding. 

[42] NNSA defines capital equipment as including costs for purchasing 
equipment that is not otherwise purchased as part of a line item 
construction project or is not attributed to a single Stockpile 
Support or ST&E programmatic use. 

[43] The exception is KCP, which fully funded its capital equipment 
costs in fiscal year 2009 with RTBF Operations of Facilities funds. 

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

[45] Weapon use control technologies are solutions that can be 
engineered into nuclear weapons to help ensure denial of unauthorized 
use. 

[46] According to NNSA officials, while the interpretation of 
surveillance results is supported with funds from MTP, actual 
surveillance testing is paid for through a different Directed 
Stockpile Work subprogram, Stockpile Systems, through which NNSA 
obligates funds to support specific warhead and bomb types. 

[47] NNSA officials told us the agency classifies information that is 
specific to nuclear weapons design. 

[48] Plutonium Sustainment became part of the Stockpile Services work 
breakdown structure in fiscal year 2009 once its primary goal, to 
reestablish the nation's capability to manufacture plutonium weapons 
components, was achieved. The capability to manufacture and certify 
pits is critical to maintaining the reliability of the stockpile. The 
nation's capability to manufacture pits was lost when DOE's Rocky 
Flats Plant, near Denver, Colorado, was closed in 1989. Beginning in 
2002, a Pit Manufacturing Campaign was established as an ST&E program 
to reconstitute this capability. The campaign ended when this effort 
was determined successful, and funds to maintain the capability and 
continue R&D work on plutonium were transferred to Stockpile Services 
in fiscal year 2009. 

[End of section] 

GAO's Mission: 

The Government Accountability Office, the audit, evaluation and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the performance 
and accountability of the federal government for the American people. 
GAO examines the use of public funds; evaluates federal programs and 
policies; and provides analyses, recommendations, and other assistance 
to help Congress make informed oversight, policy, and funding 
decisions. GAO's commitment to good government is reflected in its core 
values of accountability, integrity, and reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each 
weekday, GAO posts newly released reports, testimony, and 
correspondence on its Web site. To have GAO e-mail you a list of newly 
posted products every afternoon, go to [hyperlink, http://www.gao.gov] 
and select "E-mail Updates." 

Order by Phone: 

The price of each GAO publication reflects GAO’s actual cost of
production and distribution and depends on the number of pages in the
publication and whether the publication is printed in color or black and
white. Pricing and ordering information is posted on GAO’s Web site, 
[hyperlink, http://www.gao.gov/ordering.htm]. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card,
MasterCard, Visa, check, or money order. Call for additional 
information. 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 

Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]: 
E-mail: fraudnet@gao.gov: 
Automated answering system: (800) 424-5454 or (202) 512-7470: 

Congressional Relations: 

Ralph Dawn, Managing Director, dawnr@gao.gov: 
(202) 512-4400: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7125: 
Washington, D.C. 20548: 

Public Affairs: 

Chuck Young, Managing Director, youngc1@gao.gov: 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548: