March 17, 2014

GAO QUESTIONS NNSA LONG-TERM MODERNIZATION COST ESTIMATES

By ExchangeMonitor

Costs to modernize the nation’s nuclear stockpile and weapons complex from 2014 through 2031 increased $19 billion from Fiscal Year 2012 to Fiscal Year 2014, but the National Nuclear Security Administration may be understating the price tag for maintaining its portion of the nuclear deterrent, according to a report released yesterday by the Government Accountability Office. The report notes that modernization costs rose to $187.9 billion in FY 2014, up $19.2 billion from FY 2012, but it said the costs don’t include work on the second two phases of the Uranium Processing Facility or the modular plutonium sustainment plan at Los Alamos National Laboratory, which could drive costs even higher. The GAO also said that the agency has not added in enough contingency time to the schedule estimates for warhead life extension work, ignoring problems on previous refurbishments. The GAO urged the NNSA to better refine its budget numbers in future budget submissions and updates to its Stockpile Stewardship and Management Plan. “NNSA has an opportunity to continuously improve its nuclear security budget materials and bring modernization plans into full alignment with budget estimates by including a range of estimates for projects and programs the agency knows it needs in its modernization plans,” the GAO wrote.

Stockpile cost projections from 2014 to 2031 increased by $27 million from FY 2012 to FY 2014, which were partially offset by slight decreases in infrastructure, science, technology and engineering, and other costs. A large chunk of the increase in estimated stockpile costs came from a change in how the agency projected costs for its life extension programs. Before 2014, the agency based its estimates on data from projections for the Reliable Replacement Warhead, but it began to use data from the ongoing W76 life extension program starting in 2014. “According to the officials, the estimates included in the 2014 budget materials are likely to be more accurate than estimates generated using the previous approach because they are based on the costs of an LEP that is in progress, rather than a program that was never executed,” the GAO said. The NNSA said it would reflect uncertainties in program and project plans in future budget submissions in response to the GAO report.

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