The National Nuclear Security Administration may be underestimating the costs of its various weapons modernization programs by up to billions of dollars, raising concerns that some life-extension programs might be underfunded or even deferred, the Government Accountability Office said in a report released Wednesday.
The report said fiscal 2017 budget materials from the semiautonomous Department of Energy agency do not align with its modernization plans, “raising concerns about the affordability of NNSA’s planned portfolio of modernization programs.” The low end of the agency’s cost range estimates for some weapon refurbishments exceed the estimates made in other budget materials.
“For example, the W80-4 program’s low-range cost estimate for fiscal year 2017 exceeds the budget estimate by about $26.9 million,” according to congressional auditors, while the cost model estimates for the W76-1 life-extension program exceed existing budget estimates by $5.9 million in fiscal 2017, $57 million in fiscal 2019, and $80.5 million in fiscal 2020.
The W80-4 warhead will be used on the Air Force’s new nuclear cruise missile, the Long-Range Standoff weapon. The W76-1 warhead is deployed on the Navy’s submarine-launched Trident II D5 missiles.
Meanwhile, life extension for the B61-12 nuclear gravity bomb could cost between $200 million and $2.6 billion more than the fiscal 2017 cost estimate for the program, which is at $7.4 billion. The NNSA’s B61-12 program office estimated last June that the project might cost roughly $7.6 billion, while the NNSA’s Office of Cost Estimating and Program Evaluation assessed a two-year slip to the 2020 first production unit date and projected a cost of around $10 billion, the GAO said.
The B61-12 program is intended to extend the life of the B61 gravity bomb, a key component of the United States’ extended deterrent for its NATO allies.
The GAO also cautioned that some plutonium sustainment activities – currently underway to support the Los Alamos National Laboratory’s manufacturing capacity of 30 nuclear-warhead pits per year by 2026 – might be underfunded. It noted that the NNSA’s plutonium pit manufacturing equipment upgrade schedule might slip by two to three years, in which case “costs for these activities could collectively exceed their original cost estimates by more than $100 million.”
Plutonium pit production falls under the agency’s directed stockpile work’s strategic materials account, which currently receives an annualized $612.3 million – the fiscal 2016 funding level that has been maintained through a set of stopgap spending measures in the current budget year; the NNSA requested $577.8 million for the account for fiscal 2017.
According to the NNSA’s fiscal 2017 Stockpile Stewardship and Management Plan (SSMP), the cost of nuclear weapons modernization is $300.7 billion from fiscal 2017 through 2041. This includes the B61-12, W88 Alt 370, W80-4, IW-1, IW-2, and IW-3 warheads.
The report noted that because some programs’ budget estimates are billions of dollars below the funding the NNSA says it needs from fiscal 2018 through 2021, the agency might have to defer some modernization work. It added that the NNSA’s modernization budget estimates for fiscal 2022 through 2026 might be higher than the out-year projections in the president’s fiscal 2017 budget for those years.
“According to NNSA’s data, the agency’s overall modernization budget estimates total about $58.4 billion for fiscal years 2022 through 2026, and the out-year funding projections from the President’s fiscal year 2017 budget for the same period total about $55.5 billion,” the report said, concluding that the NNSA’s estimated needs exceed former President Barack Obama’s funding projections by $2.9 billion.
The GAO said the SSMP concludes the modernization program is affordable in the long term, a determination it called “an optimistic assessment that is not well supported.” Moreover, the SSMP does not specify how the NNSA would address affordability concerns in future budgets.
“By including an assessment of the affordability of its portfolio of modernization programs in future Stockpile Stewardship and Management Plans, NNSA could develop a plan that could bring its estimates of modernization funding needs into alignment with potential future budgets,” according to the GAO report.
The Government Accountability Office recommended that the NNSA administrator include such an assessment in future iterations of the SSMP, including outlining options such as deferring or canceling certain modernization programs as necessary.
Among several comments in response to the GAO’s findings, the NNSA said “its ability to execute its modernization plan under the current projections of future presidential budgets is manageable.” The GAO said in response that the agency might be overstating the affordability of these programs, particularly if they reach the high end of their cost ranges.
