New GAO report released.
Results in Brief
NNSA and DOD have not effectively managed cost, schedule, and technical risks for either the B61 or W76 life extension program. Regarding the B61 program, although NNSA completed the refurbishment of the B61 bombs on schedule in November 2008, the refurbished weapons do not meet all refurbishment objectives. According to DOD and NNSA laboratory and production plant officials, NNSA established an unrealistic schedule and failed to fully implement its Phase 6.X process. To meet an aggressive production schedule, NNSA adopted a modified Phase 6.X process that compressed and overlapped the development and production engineering phases, leaving little time to develop and manufacture critical materials and evaluate test results before full-scale production. In addition, NNSA did not include any cost or schedule contingencies in its baseline to address unforeseen technical challenges. NNSA assumed that it would not need time for development and production engineering because it would reuse, rather than manufacture, critical materials. Before fully determining whether a critical material could be reused for the B61 bomb, NNSA developed a production schedule with fixed delivery dates. However, after additional tests showed that NNSA could not reuse this material, NNSA decided to develop an alternative material, which led to an $11 million cost overrun. When NNSA was unable to produce this substitute, it faced significant schedule delays and additional cost overruns.
NNSA was able to meet its refurbishment schedule and avoid significant cost overruns for the B61 bomb only because (1) some of the refurbishment objectives changed, thereby allowing NNSA to use the original material in the weapon design, (2) tactical B61 bombs that were decommissioned had material that NNSA could use, and (3) the Nuclear Weapons Council significantly reduced the number of B61 bombs in the stockpile and thus the number that NNSA had to refurbish. Even though these events allowed NNSA to meet its schedule, it refurbished less than one-third of the weapons in the original baseline for almost twice the unit cost. The cost of manufacturing each B61 bomb almost doubled. Furthermore, the refurbished B61 bombs still do not meet all of the refurbishment objectives.
Many of the B61 refurbishment problems might have been avoided if DOD had fulfilled its roles and responsibilities in overseeing NNSA’s life extension program activities. First, STRATCOM did not comprehensively review military requirements for the B61 bomb before NNSA started refurbishment activities, which might have avoided unnecessary testing and manufacturing of the alternative material. Second, the Air Force did not adequately review NNSA’s design, engineering, and testing activities—a review that would have alerted DOD that NNSA was not meeting all refurbishment objectives. According to Air Force officials, the Lead Project Officer failed to provide the necessary oversight and alert the Air Force to changes in testing that NNSA conducted of refurbished B61 bombs.
Regarding the W76 warhead, NNSA did not effectively manage one of the highest risks of the program—the manufacture of a key material known as Fogbank—resulting in $69 million in cost overruns and a schedule delay of at least 1 year that presented significant logistical challenges for the Navy. Recognizing that the manufacture of Fogbank was one of the highest risks to the program and that it lacked the knowledge, expertise, and facilities to manufacture Fogbank, NNSA developed a risk mitigation strategy. This strategy included three primary components: (1) build a new Fogbank production facility early enough to allow time to resolve any manufacturing problems before starting full production; (2) use the existing pilot plant to test the Fogbank manufacturing process while the new facility was under construction; and (3) consider the development of an alternate material for Fogbank. However, NNSA started operations of the new facility about 1 year late because the schedule for constructing the new facility was unrealistic, disagreements on the implementation of safety guidelines emerged, and the W76 program manager lacked authority to manage the construction schedule. In addition, NNSA did not use the pilot plant as planned, missing opportunities to improve the manufacturing process before full-scale production began. Finally, NNSA did not develop an alternate material that was less costly and easier to produce than Fogbank until a late stage. If NNSA had effectively implemented its risk management strategy, schedule delays and cost increases might have been avoided. Compounding these problems, NNSA did not have a consistent approach for developing a cost baseline for the W76 life extension program. The lack of a consistent baseline approach with similar cost assumptions and criteria makes it difficult to know the actual cost of refurbishing nuclear bombs and warheads and to track the costs of the program over time.
To improve the management of the stockpile life extension program, in our classified January 2009 report, we recommended, among other things, that the Administrator of NNSA direct the Deputy Administrator for Defense Programs to develop a realistic schedule for the W76 and future life extension programs. This schedule should allow NNSA to (1) address technical challenges while meeting all military requirements; (2) build in time for unexpected technical challenges that may delay the program; (3) assess the cost and include funding in the baseline for risk mitigation activities that address the highest risks to the W76 and future life extension programs; and (4) before beginning a life extension program, assess the risks, costs, and scheduling needs for each military requirement established by DOD.
To improve DOD’s oversight over NNSA’s life extension activities and ensure that refurbished weapons meet all military requirements, we recommended that the Secretary of Defense direct (1) STRATCOM and the Secretary of the responsible service to comprehensively review military requirements for a weapons system before beginning a life extension program and work with NNSA to assess the cost and schedule implications for meeting each military requirement, and (2) the Secretaries of the Air Force and the Navy to ensure that the respective Lead Project Officers have the technical and managerial expertise and resources to review NNSA’s progress and technical challenges throughout the life extension program.
We provided a draft of our classified report to NNSA and DOD for their review and comment. As discussed in our classified report, NNSA agreed with our recommendations and plans to take a number of steps to implement them. DOD partially agreed with our recommendations. DOD agreed with our two recommendations directed at the department, but asked us to make modifications to the language of the recommendations to better target the responsible service or agency that has authority to implement them. We made the requested changes. NNSA and DOD also provided technical comments, which we incorporated as appropriate.
[Download the full report here.]