oversight

Modernizing the Nuclear Security Enterprise: NNSA Is Taking Action to Manage Increased Workload at Kansas City National Security Campus

Published by the Government Accountability Office on 2019-04-12.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States Government Accountability Office
             Report to Congressional Committees




             MODERNIZING
April 2019




             THE NUCLEAR
             SECURITY
             ENTERPRISE

             NNSA Is Taking Action
             to Manage Increased
             Workload at Kansas
             City National Security
             Campus




GAO-19-126
                                              April 2019

                                              MODERNIZING THE NUCLEAR SECURITY
                                              ENTERPRISE
                                              NNSA Is Taking Action to Manage Increased
Highlights of GAO-19-126, a report to         Workload at Kansas City National Security Campus
congressional committees




Why GAO Did This Study                        What GAO Found
Modernization of the nation’s nuclear         Workload forecasts have significantly changed at the National Nuclear Security
stockpile depends on timely                   Administration’s (NNSA) primary site for procuring or producing nonnuclear parts
procurement and production of                 and components of nuclear weapons since the site’s modern production facility
nonnuclear parts and components.              was built in 2012. Specifically, workload projections made by the contractor
Such parts and components make up             operating the site, known as the Kansas City National Security Campus (Kansas
over 80 percent of the items in a             City site), has increased significantly from forecasts used in planning the site’s
nuclear weapon. The Kansas City site          new production facility. More recent forecasts show that to meet workload
procures or produces most of these            requirements, production and administrative staff will need to almost double by
parts, under NNSA oversight. In fiscal
                                              2020 compared to 2014 levels. For example, workload to modernize the B61-12
year 2012, the site completed
                                              and W88 weapons systems will double during fiscal years 2020 through 2022.
construction of a modern production
facility. The new facility was expected       Photos of Kansas City National Security Campus
to accommodate rising future workload
demands, based on the forecasts that
were current in 2012, according to
Kansas City site contractor
representatives.
The Senate committee report
accompanying a bill for the National
Defense Authorization Act for Fiscal
Year 2018 included a provision for
GAO to review the Kansas City site’s
staffing plans and capabilities to meet
national security requirements. This          According to NNSA officials and contractor staff, the site has identified and
report examines (1) workload forecasts        begun to mitigate management challenges to meeting future workload, including:
for the site since 2012, and (2)
management challenges the site has            •   Ensuring sufficient production and office space. Because the current
identified for achieving the forecasted           space is not sufficient for the increase in projected workload, the site is
workload, and actions the site has                leasing additional space until long-term solutions, currently in planning, can
taken to mitigate these challenges.               be implemented.
GAO reviewed NNSA and contractor              •   Updating production equipment. To update aging production equipment,
documents from 2012 through 2018                  the site is developing a 10-year equipment strategy, among other things.
relevant to workload changes, and
associated workload capacity,                 •   Retaining and recruiting a sufficient workforce. The site has offered
including information on infrastructure,          rewards and benefits to retain existing staff, about a third of whom are
equipment, and business processes—                eligible to retire. It is also recruiting skilled new staff in tight labor markets
as well as personnel data. GAO also               and seeking to expedite security clearances for them.
interviewed NNSA program and field
                                              •   Ensuring adequate external supplier capacity. The site procures about 65
officials and contractor representatives.
                                                  percent of its nonnuclear components from external suppliers. The site is
                                                  assessing capacity and risk of existing suppliers and developing new ones.
                                              Current mitigation efforts should help the site meet currently planned increased
                                              workload and capacity demands, according to contractor and NNSA analyses.
                                              However, the February 2018 Nuclear Posture Review—conducted by the
                                              Department of Defense under the direction of the President to determine the role
View GAO-19-126. For more information,        of nuclear weapons in the nation’s security strategy—may change requirements
contact Allison Bawden at (202) 512-3841 or   and add to the site’s workload in ways not yet fully known because studies and
bawdena@gao.gov.
                                              plans in response to the review are not fully complete.
                                                                                          United States Government Accountability Office
Contents


Letter                                                                                        1
              Background                                                                      4
              Projected Workload for the Kansas City Site Has Increased
                Significantly from 2012 Forecasts                                             9
              Kansas City Site Has Identified and Begun to Mitigate Several
                Management Challenges Related to Forecasted Workload,
                Which May Further Increase                                                   14
              Agency Comments                                                                35

Appendix I    Objectives, Scope, and Methodology                                             37



Appendix II   GAO Contact and Staff Acknowledgments                                          40



Table
              Table 1: National Nuclear Security Administration (NNSA) and
                      Department of Defense Life Extension Programs (LEP)
                      and Alterations (Alt), as of Fiscal Year 2018                           8

Figures
              Figure 1: Design Laboratories and Production Sites of the Nuclear
                       Security Enterprise                                                    5
              Figure 2: Joint DOD and NNSA Phase 6.X Process for Managing
                       Warhead Life Extension Activities for Nuclear Weapons                  7
              Figure 3: Full Production Timeline Comparison—Stockpile
                       Stewardship Management Plans for Fiscal Years 2012
                       and 2018                                                              10
              Figure 4: Forecasted Full-Time Equivalent Workload for
                       Production of Two Weapons Systems, as of Fiscal
                       Year 2018                                                             12
              Figure 5: Photo of Kansas City Site Production Facility Built
                       in 2012                                                               16
              Figure 6: Age of Production Equipment at NNSA’s Kansas City
                       National Security Complex, as of 2017                                 19
              Figure 7: Number of Kansas City Site Contractor Staff, by Years of
                       Service, as of Fiscal Year 2017                                       22
              Figure 8: Distribution of Kansas City Site Contractor Staff, by Age,
                       as of Fiscal Year 2017                                                23


              Page i                       GAO-19-126 Modernizing the Nuclear Security Enterprise
Figure 9: Change in Number of Kansas City Site Contractor Staff
         from End of Fiscal Year 2016 through End of Fiscal Year
         2017                                                                             25




Abbreviations

Alt               Alteration
DOD               Department of Defense
DOE               Department of Energy
FYNSP             Future-Years Nuclear Security Program
LEP               Life Extension Program
NNSA              National Nuclear Security Administration
OIG               Office of Inspector General
SSMP              Stockpile Stewardship and Management Plan




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Page ii                            GAO-19-126 Modernizing the Nuclear Security Enterprise
                       Letter




441 G St. N.W.
Washington, DC 20548




                       April 12, 2019

                       Congressional Committees

                       Modernization of our nation’s nuclear stockpile depends on the timely
                       procurement and production of nonnuclear parts and components, which
                       make up over 80 percent of the parts and components that compose a
                       typical nuclear weapon. Delays in or disruption to procurement or
                       production of these parts and components could jeopardize the nation’s
                       ability to accomplish nuclear weapons modernization goals in a timely
                       manner. Most of these parts and components are procured or produced
                       by the contractor operating the Kansas City National Security Campus
                       (Kansas City site). This site operates under the direction and oversight of
                       the National Nuclear Security Administration (NNSA)—a separately
                       organized agency within the Department of Energy (DOE). 1 Honeywell
                       Federal Management and Technologies, LLC, has managed and
                       operated the site since 2000. 2 The most recent management and
                       operating contract for this site began in July 2015. 3 Nonnuclear parts and
                       components that the site provides 4—through procurement or
                       production—for NNSA include fasteners, electrical interconnects,
                       machined parts, electronic microcircuits, polymers, plastics, foams, and
                       other engineered materials. The Kansas City site is also responsible for
                       quality assurance for all the parts and components it provides.

                       In November 2012, the site completed construction of a more modern,
                       leased production facility. The new facility was expected to accommodate
                       increasing future workload demands, based on the forecasts that were

                       1
                        NNSA’s Kansas City Field Office provides local oversight of all activity at the Kansas City
                       site.
                       2
                        In 1999, Allied Signal acquired and merged with Honeywell, adopting the Honeywell
                       name. In 2000, NNSA awarded Honeywell the contract to manage and operate the
                       Kansas City site.
                       3
                        NNSA carries out its work at government-owned, contractor-operated facilities. According
                       to the Federal Acquisition Regulation, management and operating contracts are
                       agreements under which the government contracts for the operation, maintenance, or
                       support, on its behalf, of a government-owned or government-controlled research,
                       development, special production, or testing establishment, wholly or principally devoted to
                       one or more major programs of the contracting federal agency.
                       4
                        For this report, when we refer to actions taken by the Kansas City site, we mean
                       collaborative actions taken by NNSA and the contractor managing and operating the site.




                       Page 1                              GAO-19-126 Modernizing the Nuclear Security Enterprise
current in 2012, according to Kansas City site contractor representatives
and NNSA documents. According to these representatives, the workload
of the Kansas City site has increased and is currently at the highest level
since the end of the Cold War. According to NNSA reports and officials,
NNSA will continue to modernize most of the nuclear weapons systems in
the U.S. stockpile in the coming years, and some refurbishment efforts
currently planned were not reflected in 2012 workload demand forecasts.
In addition, the February 2018 Nuclear Posture Review contains policy
direction that could further increase the Kansas City site’s workload if
eventually implemented. 5

We and others have made recommendations to NNSA aimed at
improving modernization planning in light of increasing workload. For
example, in 2017 we found that the next decade is particularly
challenging for NNSA’s nuclear modernization efforts because the agency
needs to ensure sufficient production capacity to execute life extension
programs (LEP), 6 along with major construction projects and programs to
modernize its uranium and plutonium capabilities. 7 We further found that
NNSA’s modernization budget estimates for fiscal years 2022 through
2026 may exceed the funding levels programmed for modernization in
future budgets, raising affordability concerns, and we recommended that
NNSA include an assessment of the affordability of its modernization
programs in future versions of its annual plan on stockpile stewardship.
Although NNSA did not explicitly agree or disagree with the
recommendation, we continue to believe it is valid and are monitoring any
actions NNSA takes that may the address the recommendation. In
5
 Department of Defense, Office of the Secretary of Defense, Nuclear Posture Review
(February 2018). In January 2017, the President directed the Department of Defense
(DOD) to conduct a new Nuclear Posture Review to determine what role nuclear weapons
should have in the nation’s security strategy. The review notes that the United States will
sustain and deliver on time the warheads needed to support both strategic and non-
strategic nuclear capabilities by completing the W76-1, B61-12, and W80-4 life extension
programs, and W88 Alterations (Alt) work, among other efforts.
6
 To maintain the readiness and extend the operational lives of weapons in the stockpile,
DOE, NNSA, and DOD undertake LEPs that refurbish or replace weapon components.
LEPs may also deploy advanced or emerging technologies to enhance safety and security
characteristics of weapons, as well as consolidate the stockpile into fewer weapon types
to minimize maintenance and testing costs. LEPs can extend the operational lives of
weapons by 20 years or more. NNSA also conducts Alts of weapons at the system, sub-
system, or component level to ensure the weapons are safe, secure, and effective.
7
 See, for example, GAO, National Nuclear Security Administration: Action Needed to
Address Affordability of Nuclear Modernization Programs, GAO-17-341 (Washington,
D.C.: Apr. 26, 2017).




Page 2                             GAO-19-126 Modernizing the Nuclear Security Enterprise
addition, a congressional advisory panel examining the governance of the
nuclear security enterprise recommended that NNSA take action to
stabilize long-term workload across NNSA’s nuclear security enterprise
sites, including its Kansas City site, to better support its weapons
modernization efforts. 8

The Senate committee report accompanying a bill for the National
Defense Authorization Act for Fiscal Year 2018 included a provision for us
to review the Kansas City site’s staffing plans and capabilities to meet
national security requirements. 9 This report examines (1) workload
forecasts for the Kansas City site since 2012, and (2) management
challenges the Kansas City site has identified for achieving the forecasted
workload and actions the site has taken to mitigate these challenges.

To address these objectives, we visited the site and obtained and
reviewed workload planning documents, such as NNSA contractor
planning charts and graphs showing workload forecast information for
future years through 2036. We also interviewed officials from NNSA’s
headquarters offices and its Kansas City field office—co-located with the
management and operating contractor—as well as contractor
representatives at the site. To examine workload forecasts for the Kansas
City site since 2012—the year construction was completed for the modern
production facility—we obtained information on the Kansas City site
workload as full production commences for upcoming modernization
efforts, especially the B61-12 gravity bomb LEP and W88 submarine
launched ballistic missile Alteration (Alt) 370 work. 10 We also examined
steps the Kansas City site has taken to forecast workload demand from
2012 through 2018.

To examine management challenges the Kansas City site had identified
at the time of our review in 2018 for achieving the forecasted workload,
and any actions the site has taken to mitigate these challenges, we

8
 Congressional Advisory Panel on the Governance of the Nuclear Security Enterprise, A
New Foundation for the Nuclear Enterprise: Report of the Congressional Advisory Panel
on the Governance of the Nuclear Security Enterprise (Washington, D.C.: November
2014).
9
S. Rep. No. 115-125, at 356 (2017).
10
  An Alt is a limited scope change that affects assembly, tests, maintenance, and/or
storage of weapons. An Alt may address identified defects and component obsolescence;
however, it does not change a weapon’s operational capabilities. A weapon Alt generally
refurbishes fewer components than an LEP.




Page 3                            GAO-19-126 Modernizing the Nuclear Security Enterprise
                             interviewed NNSA officials and contractor representatives. We then
                             reviewed relevant documentation and data, available at the time of our
                             review in 2018, on the nature of the challenges and any mitigation steps
                             to determine if the Kansas City site is addressing previously identified
                             challenges. Among other things, we reviewed Kansas City site capacity
                             analyses; personnel data regarding worker attrition, aging, retention, and
                             hiring; information on worker clearances; analyses of information on the
                             capacity of external suppliers; and lessons learned from recently
                             completed work on the LEP for the W76-1 submarine-launched ballistic
                             missile warhead. We obtained information on actions the Kansas City site
                             has taken over the past several years, particularly from 2012—when the
                             new modern production facility was built—through 2018, regarding
                             infrastructure, business processes, staffing, and other areas to manage
                             current workload demands. To corroborate information provided by the
                             Kansas City site on management challenges and associated mitigation
                             action(s), we interviewed additional NNSA headquarters officials;
                             reviewed alternative documentation or analyses; and obtained examples
                             of the specific action(s) being taken, when available. See appendix I for
                             more details regarding our objectives, scope, and methodology and for
                             specific examples of steps we took to corroborate the information
                             obtained from the Kansas City site.

                             We conducted this performance audit from November 2017 to April 2019
                             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.


                             This section describes the (1) Kansas City site’s role in providing
Background                   nonnuclear parts and components, and (2) current and planned nuclear
                             weapons stockpile life extension and alteration efforts that drive workload.


Kansas City Site’s Role in   The Kansas City site is NNSA’s primary site for procuring or producing
Providing Nonnuclear         nonnuclear parts and components, providing over 80 percent of the parts
                             and components that compose a typical nuclear weapon. The Kansas
Parts and Components
                             City site interacts with a number of other NNSA sites that comprise the
                             nuclear security enterprise to support the nuclear weapons stockpile. For
                             example, NNSA’s design laboratories develop precise parts or
                             component specifications or requirements to which production sites, such


                             Page 4                       GAO-19-126 Modernizing the Nuclear Security Enterprise
                                         as the Kansas City site, must conform in procuring or producing these
                                         items for use in the nation’s nuclear weapon stockpile. 11 Figure 1 depicts
                                         how sites in the nuclear security enterprise interact with each other to
                                         design, produce, procure, and assemble nonnuclear components.

Figure 1: Design Laboratories and Production Sites of the Nuclear Security Enterprise




                                         Note: In addition to the laboratories and sites discussed, NNSA also maintains a testing site in
                                         Nevada that supports its overall mission. Also, on behalf of NNSA and DOE, the Pantex Plant
                                         accepts the final product after weapons assembly and transfers custody of the weapons to DOD.


                                         11
                                            NNSA relies on management and operating contractors at its laboratories to support
                                         understanding of the physics associated with the safety, security, and reliability of nuclear
                                         weapons, as well as to maintain core competencies in nuclear weapons science,
                                         technology, and engineering. In addition, NNSA relies on contractors at its production
                                         sites to maintain, evaluate, repair, and dismantle both the nuclear and nonnuclear
                                         components of nuclear weapons; to manufacture weapons components; and to process
                                         tritium, a key isotope used to enhance the power of nuclear weapons. NNSA also relies on
                                         management and operating contractors at these sites to refurbish or replace aging
                                         components of nuclear weapons as part of LEP activities.




                                         Page 5                                 GAO-19-126 Modernizing the Nuclear Security Enterprise
Components procured or produced by the Kansas City site range from
simple items such as nuts and bolts to more complex components such
as radars, arming and firing mechanisms, and critical nuclear safety
devices meant to prevent accidental detonation. The site delivers
approximately 100,000 parts annually, according to our previous report. 12
According to Kansas City site contractor documents, the primary mission
of the site is keeping the nation’s nuclear stockpile safe, secure, and
reliable by delivering mission-critical mechanical, electrical, and
engineered material components and services.

NNSA and the Department of Defense (DOD) jointly manage LEPs and
Alts under a multi-step process known as the phase 6.X process (see fig.
2). Phase 6.4 of this process, or the production engineering phase,
involves activities to adapt designs for production and prepare production
facilities, including the Kansas City site. For example, according to a
senior NNSA official, activities to adapt designs could include updating
product specifications to make parts easier to produce, changing or
refining tester limits, and substituting among commercial off-the-shelf
parts. The B61-12 LEP and W88 Alt 370 are currently in phase 6.4
(production engineering) of this process and are approaching production.
Other LEP efforts are in earlier phases.




12
  GAO, Nuclear Weapons: National Nuclear Security Administration Needs to Better
Manage Risks Associated with Modernization of Its Kansas City Plant, GAO-10-115
(Washington, D.C.: Oct. 23, 2009).




Page 6                           GAO-19-126 Modernizing the Nuclear Security Enterprise
Figure 2: Joint DOD and NNSA Phase 6.X Process for Managing Warhead Life Extension Activities for Nuclear Weapons




Current and Planned                    NNSA describes its plans to meet nuclear weapons stockpile life
Nuclear Weapons                        extension and alteration goals in two key documents that also describe
                                       NNSA’s operations and budget estimates for implementing these plans.
Stockpile Life Extension
                                       These documents, which NNSA updates annually, constitute NNSA’s
and Alteration Efforts                 nuclear security budget materials. First, the Stockpile Stewardship and
                                       Management Plan is NNSA’s formal means of communicating to
                                       Congress information on modernization and operations plans and budget
                                       estimates over the following 25 years. Second, NNSA’s annual
                                       justification of the President’s budget provides program information and
                                       budget estimates for the following 5 years. This 5-year plan is called the
                                       Future-Years Nuclear Security Program (FYNSP), and the budget
                                       estimates in this plan reflect amounts approved by the Office of
                                       Management and Budget. 13 These estimates align with those presented
                                       13
                                         The budget estimates for years included in the FYNSP must align with the 5-year overall
                                       federal budget estimates in the President’s budget. The budget estimates for years
                                       beyond the FYNSP are not subject to this requirement.




                                       Page 7                             GAO-19-126 Modernizing the Nuclear Security Enterprise
                                                               for the first 5 years included in the Stockpile Stewardship and
                                                               Management Plan.

                                                               According to the Fiscal Year 2018 Stockpile Stewardship and
                                                               Management Plan, NNSA and its nuclear security enterprise are
                                                               conducting a substantial level of activity to ensure the continued credibility
                                                               of the nation’s nuclear weapons stockpile. Specifically, in fiscal year 2018
                                                               NNSA was executing three nuclear weapons LEPs and one major Alt,
                                                               which are described in table 1.

Table 1: National Nuclear Security Administration (NNSA) and Department of Defense Life Extension Programs (LEP) and
Alterations (Alt), as of Fiscal Year 2018

 Program                  Description
 W76-1 LEP                The W76 warhead was first introduced into the stockpile in 1978 and is deployed with the Trident II D5 missile on
                          the Ohio-class nuclear ballistic missile submarines. The W76-1 LEP is intended to extend the original warhead’s
                          service life, among other things. In its Fiscal Year 2018 Stockpile Stewardship and Management Plan, NNSA
                                                                                                           a
                          estimated that it would incur a total cost of about $3.6 billion for the program. The first production unit was
                                                          b
                          completed in September 2008, and NNSA produced the last production unit in December 2018.
 B61-12 LEP               The B61 bomb is the oldest nuclear weapon in the stockpile. It was first fielded in 1968, with current modifications
                                                            c
                          fielded between 1979 and 1991. The B61-12 LEP will consolidate and replace the B61-3, -4, -7, and -10
                          modifications of the bomb. NNSA estimates that it will incur a total cost of about $7.6 billion for the program. The
                          first production unit is scheduled for December 2020. Production is planned to be completed in fiscal year 2024.
 W88 Alteration           The W88 nuclear warhead entered the stockpile in late 1988 and is deployed on the Navy’s Trident II D5 submarine-
    d
 370 program              launched ballistic missile system. The W88 Alt 370 program will replace the arming, fuzing, and firing subsystem for
                          the W88 warhead. In November 2014, the Nuclear Weapons Council decided to also replace the conventional high-
                          explosive main charge, which increased the estimated cost for the Alt. As of April 2017, the program was estimated
                          to cost NNSA about $2.6 billion and was scheduled to complete its first production unit in December 2020,
                          according to NNSA officials, and end production in fiscal year 2024.
 W80-4 LEP                In 1982 the U.S. introduced the air-launched cruise missile that housed a W80-1 warhead. In close coordination with
                          DOD, NNSA is extending the life of the W80-1 through the W80-4 LEP which is intended to provide a warhead for a
                          future missile that will replace the Air Force’s current air-launched cruise missile. In NNSA’s Fiscal Year 2018
                          Stockpile Stewardship and Management Plan, the agency preliminarily estimated that the W80-4 LEP would cost
                          NNSA between about $8.0 billion and $11.6 billion, that NNSA would complete the first production unit by fiscal year
                          2025, and that NNSA would complete production for the LEP by fiscal year 2031.
Source: GAO analysis of NNSA documents and information reported by NNSA officials. | GAO-19-126

                                                               Note: To maintain the readiness and extend the operational lives of weapons in the stockpile, NNSA
                                                               and DOD undertake LEPs that refurbish or replace weapon components. LEPs may also deploy
                                                               advanced or emerging technologies to enhance safety and security characteristics of weapons, as
                                                               well as consolidate the stockpile into fewer weapon types to minimize maintenance and testing costs.
                                                               An Alteration (Alt) is a limited scope change that affects assembly, tests, maintenance, and/or storage
                                                               of weapons. An Alt may address identified defects and component obsolescence; however, it does
                                                               not change a weapon’s operational capabilities. A weapon Alt generally refurbishes fewer
                                                               components than an LEP.
                                                               a
                                                                The Stockpile Stewardship and Management Plan is NNSA’s formal means of communicating to
                                                               Congress information on modernization and operations plans and budget estimates over the following
                                                               25 years and is produced annually.
                                                               b
                                                                The “first production unit” is the first complete warhead from a production line certified for
                                                               deployment.




                                                               Page 8                                    GAO-19-126 Modernizing the Nuclear Security Enterprise
                      c
                       Throughout the history of nuclear weapons development, the United States has developed families
                      of warheads based on a single warhead design. Thus, some weapons in the U.S. stockpile were
                      developed as modifications to an already complete design. For example, the B61 bomb has had 12
                      variations over time, each designated as a different modification.
                      d
                       The W88 Alt 370 program is technically an Alt, not an LEP, but the effort is being managed
                      consistent with LEP execution guidance. An Alt is usually a replacement of an older component with a
                      newer component that does not affect military operations, logistics, or maintenance.



                      In addition, the 2018 Nuclear Posture Review calls for NNSA to resume a
                      program to replace the W78 warhead in fiscal year 2019; 14 produce a low-
                      yield submarine launched ballistic missile warhead, known as the W76-2;
                      and consider options for providing a nuclear warhead for a potential sea-
                      launched cruise missile. According to NNSA officials and contractor
                      representatives, NNSA developed an early production planning roadmap
                      for implementing the Nuclear Posture Review in late 2018. The
                      conference report accompanying DOE’s fiscal year 2019 appropriations
                      act directed the agency to spend a specified amount on the W78 warhead
                      replacement and W76-2 efforts.


                      Projected workload for the Kansas City site has increased significantly,
Projected Workload    based on NNSA’s stockpile plan changes from 2012—when the new
for the Kansas City   modern facility was built—to the 2018 stockpile plan update. A
                      comparison between the 2012 and 2018 plans shows that the start of full
Site Has Increased    production for the B61-12 LEP and the W88 Alt were delayed by
Significantly from    approximately 2 years, and their completions were delayed by 3 years
                      from initial schedule estimates in 2012. The 2018 plan also accelerates
2012 Forecasts        production of the W80-4 LEP by approximately 5 years. Figure 3 below
                      shows the change in the full production timelines for key weapons
                      systems.




                      14
                       GAO, Nuclear Weapons: NNSA Has Taken Steps to Prepare to Restart a Program to
                      Replace the W78 Warhead Capability, GAO-19-84 (Washington, D.C.: Nov. 30, 2018).




                      Page 9                                 GAO-19-126 Modernizing the Nuclear Security Enterprise
Figure 3: Full Production Timeline Comparison—Stockpile Stewardship Management Plans for Fiscal Years 2012 and 2018




                                       Note: To maintain the readiness and extend the operational lives of weapons in the stockpile,
                                       National Nuclear Security Administration and Department of Defense undertake LEPs that refurbish
                                       or replace weapon components. LEPs may also deploy advanced or emerging technologies to
                                       enhance safety and security characteristics of weapons, as well as consolidate the stockpile into
                                       fewer weapon types to minimize maintenance and testing costs. An Alteration (Alt) is a limited scope
                                       change that affects assembly, tests, maintenance, and/or storage of weapons. An Alt may address
                                       identified defects and component obsolescence; however, it does not change a weapon’s operational
                                       capabilities. A weapon Alt generally refurbishes fewer components than an LEP. The W88 Alt 370
                                       program was referred to as the W88 Alt in 2012, and the W80-4 LEP was referred to as the W80 in
                                       2012.




                                       Page 10                                GAO-19-126 Modernizing the Nuclear Security Enterprise
Enterprise Risk Management at the                        Using an enterprise risk management approach, the Kansas City site
Kansas City Site                                         determined that this change in production schedule represented a
Contractor representatives at the Kansas City            significant challenge that needed to be better understood and regularly
site determined that overlapping weapons
refurbishment efforts and schedule
                                                         monitored. NNSA contractor representatives at the Kansas City site
compression, which can increase workload                 developed a strategy for analyzing workload to better understand the
demand, was (1) likely to occur, (2) of high             enterprise risk and ensure the site’s ability to provide an adequate supply
impact, and (3) a site-wide challenge.
Representatives made this determination in               of nonnuclear components under variable requirements scenarios.
part by using an enterprise risk management              Specifically, in 2015, the Kansas City site increased the frequency of
approach. This management approach
includes the identification, prioritization, and         using its “what-if” approach that models standard production work and
management or mitigation of the site’s most              allows for an in-depth review of labor, equipment, and material capacity
significant risks to achieving objectives and            information, according to contractor representatives at the Kansas City
mission success, according to site contractor
representatives. Senior contractor                       site. 15 This analytic capability is intended to help ensure that the site
representatives assess risks by project,                 contractor can accurately predict future workload demand across multiple
program, division, and enterprise levels.
Once a potential risk is identified, the site            scenarios representing different production requirements. Contractor
contractor representatives responsible for               representatives update the model every quarter to reflect the current
managing the risk use a Kansas City site
scoring matrix to determine the potential                hardware schedules; testing requirements; and nuclear weapon scope,
likelihood and severity of that risk for the site.       production quantities, and schedules. These representatives use the
Kansas City site leaders then formulate plans            model to develop hourly staffing, equipment, and other capacity-related
to mitigate the risks and are responsible for
elevating risks that impact the entire Kansas            forecasts and plans. For example, contractor representatives evaluate
City site, in order to determine the resources           capital equipment capacity quarterly for multiple programs, with a primary
and help that will be needed. For example,
reviewing this matrix helps ensure Kansas                focus on equipment that is at or above a two-shift capacity. 16 However,
City site contractor representatives meet                according to these representatives, this approach has not been in place
regularly throughout the year with NNSA site
officials to review all site-level risks,
                                                         long enough to allow comparison of historical data with forecasts from the
according to site contractor representatives.            model to assess their accuracy.
Source: Kansas City National Security Campus data. | -
GAO-19-126                                               According to site contractor documents and representatives, forecasting
                                                         data from the what-if models project that, under the 2018 plans, the full-
                                                         time equivalent workload for production of nonnuclear parts and
                                                         components will continue to increase annually through 2020. 17
                                                         15
                                                           NNSA officials stated that the Kansas City site had applied some form of a “what-if”
                                                         analysis to production for many years prior to 2015. NNSA officials indicated that the
                                                         “what-if” tool is less efficient when multiple programs share material, parts, or components
                                                         that are experiencing issues, and added that the tool is not integrated or aligned with other
                                                         program management tools required by NNSA.
                                                         16
                                                           Most anticipated capacity issues can be mitigated with increased hiring and additional
                                                         shifts and overtime, if necessary, according to Kansas City site officials. The officials
                                                         noted that facility infrastructure and equipment can typically accommodate up to three 8-
                                                         hour shifts to fill a 24-hour day.
                                                         17
                                                           Full-time equivalent reflects the total number of regular straight-time hours (i.e.,
                                                         excluding overtime or holiday hours) worked by employees divided by the number of
                                                         compensable hours applicable to each fiscal year. Annual leave, sick leave, and
                                                         compensatory time off and other approved leave categories are considered to be “hours
                                                         worked” for purposes of defining full-time equivalent employment.




                                                         Page 11                             GAO-19-126 Modernizing the Nuclear Security Enterprise
                                        Specifically, the number of production and administrative staff at the time
                                        of the relocation to the new facility in 2014 was almost 2,500, based on
                                        needs at that time. However, the fiscal year 2018 updates, based on
                                        “what-if” capacity analyses, now show that the headcount will need to
                                        almost double, growing to more than 4,900 administrative and production
                                        staff by 2020. For example, according to 2018 “what-if” capacity analyses
                                        prepared by site contractor representatives, personnel dedicated
                                        exclusively to two efforts—the B61-12 LEP and W88 Alt 370—will double
                                        from 251 full-time equivalents needed in fiscal year 2018 to over 500
                                        during fiscal years 2020 through 2022, as shown in figure 4. 18

Figure 4: Forecasted Full-Time Equivalent Workload for Production of Two Weapons Systems, as of Fiscal Year 2018




                                        Notes: The B61-12 LEP seeks to consolidate four versions of a nuclear weapon—the B61 bomb—
                                        into a bomb called the B61-12. The W88 Alt 370 program will replace the arming, fuzing, and firing
                                        subsystem for the W88 warhead, which is deployed on the Navy’s Trident II D5 submarine-launched
                                        ballistic missile system.

                                        18
                                          In this example, the full-time equivalents reflect workload forecasts for hourly production
                                        staff only for the B61-12 LEP and W88 Alt 370.




                                        Page 12                                GAO-19-126 Modernizing the Nuclear Security Enterprise
Full-time equivalent reflects the total number of regular straight-time
hours (i.e., excluding overtime or holiday hours) worked by employees
divided by the number of compensable hours applicable to each fiscal
year. Annual leave, sick leave, and compensatory time off and other
approved leave categories are considered to be “hours worked” for
purposes of defining full-time equivalent employment. In this figure, the
full-time equivalents reflect workload forecasts for hourly production staff
only for the B61-12 LEP and W88 Alt 370.




Page 13                       GAO-19-126 Modernizing the Nuclear Security Enterprise
                              NNSA officials and contractor representatives at the Kansas City site
Kansas City Site Has          have identified and begun to mitigate several management challenges to
Identified and Begun          meeting the forecasted workload for known future production
                              requirements, but they face uncertainties about future workload demands.
to Mitigate Several           Specifically, current mitigation efforts should help the site meet currently
Management                    forecasted increased workload and capacity demands, according to
                              NNSA analysis and consistent with the program plan included in the
Challenges Related            Fiscal Year 2018 Stockpile Stewardship and Management Plan.
to Forecasted                 However, the February 2018 Nuclear Posture Review, the results of
                              which were not fully reflected in the Fiscal Year 2018 Stockpile
Workload, Which May           Stewardship and Management Plan, may change requirements and add
Further Increase              to the site’s workload because it calls for additional weapons efforts.


Current Efforts to Mitigate   Kansas City site contractor representatives have identified management
Identified Challenges         challenges that could affect the site’s ability to meet forecasted future
                              workload increases based on 2018 analyses and its Enterprise Risk
Should Support Meeting
                              Management process, and NNSA officials agreed with the challenges the
Forecasted Future             contractor representatives identified. These management challenges
Workload Increases at the     include ensuring that the site has (1) sufficient production and
Kansas City Site              administrative office space, (2) up-to-date production equipment, (3) a
                              sufficient workforce with necessary security clearances, (4) capable and
                              reliable external suppliers, and (5) complete weapons designs early
                              enough in development to minimize production changes and delays. The
                              Kansas City site has identified strategies to mitigate the effects of each of
                              these management challenges and has begun taking steps to implement
                              these strategies.




                              Page 14                       GAO-19-126 Modernizing the Nuclear Security Enterprise
 NNSA’s Enterprise Modeling and Analysis                    NNSA analysis concludes that current mitigation efforts initiated at the
 Consortium                                                 Kansas City site should support currently planned increased workload
 NNSA’s Enterprise Modeling and Analysis                    and an increased capacity to achieve the 2018 workload forecast.
 Consortium is composed of NNSA site
 representatives and program representatives
                                                            Specifically, according to analyses conducted by NNSA’s Enterprise
 from NNSA’s Defense Programs offices and                   Modeling and Analysis Consortium, the Kansas City site’s operations will
 is a principal source for NNSA model-                      be stressed above current capacity for multiple consecutive years in the
 informed analytics for decisions about
 stockpile stewardship program management,                  future, and current mitigation efforts should reduce risk associated with
 policy, and implementation. The consortium                 the elevated workload. In addition, NNSA Kansas City Field Office and
 conducts modeling based on common data
 sets and assumptions of current and planned                headquarters officials said that they have high confidence in the ability of
 stockpile plans, design alternatives,                      the Kansas City site to forecast and manage infrastructure and staffing
 commodity requirements, and nuclear                        needs at the site to support currently planned nuclear weapon stockpile
 security enterprise capacity. One of the
 consortium’s projects includes analyzing the               life extension needs over the coming decades. In particular, NNSA’s
 nuclear security enterprise’s capacity to                  recent annual performance evaluation reports—which document the
 execute the nuclear weapon production
 program of record to identify any important                contractor’s overall performance for a fiscal year—show that the Kansas
 issues or bottlenecks within or between sites.             City site contractor has delivered the vast majority of hardware on time,
 Source: National Nuclear Security Administration data. |
 GAO-19-126
                                                            within budget, and in a safe and secure environment.

Production and Administrative                               Kansas City site officials indicated that ensuring adequate production and
Office Space                                                administrative office space at the site is a management challenge
                                                            because the current facility is too small to accommodate future workload.
                                                            Specifically, forecasted workload demand has grown significantly since
                                                            the modern facility was built in 2012. The new facility, which
                                                            accommodates both production and administrative staff, replaced a
                                                            deteriorating World War II-era facility that was much larger and had
                                                            significant maintenance and operations costs, according to site contractor
                                                            representatives. For example, according to NNSA documents, the move
                                                            reduced the footprint of the site’s production activities from about 3 million
                                                            square feet to 1 million square feet. 19 According to site contractor
                                                            representatives, the modern facility was designed to be more flexible in
                                                            accommodating changes in the production line. For example, equipment
                                                            can more easily be removed or installed at any location in the facility, to
                                                            accommodate increased workload, because there is ready access to
                                                            electrical, ventilation, or other necessary hookups and connections.
                                                            Figure 5 shows a photo of the new facility.



                                                            19
                                                              Since 2012, NNSA’s Kansas City site is leasing this space over a 20-year period at an
                                                            annual cost of about $51 million, according to Kansas City site contractor staff. About 1
                                                            million square feet of this leased space initially included almost 63,000 square feet of
                                                            unallocated space capable of accommodating unanticipated surge capacity needs, but
                                                            this unallocated space has since been consumed, according to these staff.




                                                            Page 15                            GAO-19-126 Modernizing the Nuclear Security Enterprise
Figure 5: Photo of Kansas City Site Production Facility Built in 2012




The Kansas City site has identified that it needs an additional 250,000
square feet of production space in 2019 and ultimately a total of an
additional 400,000 square feet to support the forecasted workload and
associated staff increase. To mitigate the challenge of insufficient
production and administrative space to support the forecasted increase in
production staff, Kansas City site officials told us they are pursuing
multiple short- and long-term strategies.

•   With respect to production space, under the short-term plan the
    Kansas City site is pursuing a temporary lease of commercial space
    to allow for the offsite storage of unclassified materials that are
    currently at the production facility. According to site contractor
    representatives, this new lease would free up production space at the
    main site. Further, the site submitted a request to NNSA for leasing an
    additional 250,000 feet of production space—an increase of almost 30
    percent over current production space in the modern facility. Kansas
    City site contractor representatives stated that the cost of this lease
    will be based on competitive offers, and they expect the lease to be
    awarded by summer 2019.




Page 16                          GAO-19-126 Modernizing the Nuclear Security Enterprise
•    With respect to administrative office space, the site has leased more
     than 150,000 square feet of space since 2014 for the short term at a
     cost of more than $3.5 million per year. 20
•    Under the long-term plan, expected to take a minimum of 5 years to
     implement, the site will complete an analysis of alternatives and
     submit a combined office and production space expansion project
     plan to NNSA, which will determine final costs and timelines.
     Currently, the mission need statement for the project indicates the
     need for over 400,000 square feet of additional production and
     administrative space to accommodate the planned increased
     workload for known production and supporting administrative
     requirements 21—an increase of roughly 50 percent over current
     leased production space. According to Kansas City site contractor
     representatives, at this early stage, costs would be based on the
     current Kansas City site lease of $43 per square foot, or roughly $17
     million per year. This long-term plan would include space for
     approximately 1,200 administrative personnel. Kansas City site
     contractor representatives told us in September 2018 that, depending
     on the selected long-term solution, the short-term leases for
     administrative space could either be terminated or modified into long-
     term arrangements.

In 2017, we reported in our high risk list update that federal agencies
have not demonstrated that they have the capacity to reduce their
reliance on costly leases, 22 particularly high-value leases—defined as
$2.85 million and above per year in lease costs—where owning
properties would be less costly in the long run. In particular, we reported
that the General Services Administration had not implemented our 2013
recommendation to develop a strategy to increase ownership of
investments for a prioritized list of high-value leases where ownership



20
  The three leases have individual annual costs of approximately $2 million, $1.5 million,
and $150,000.
21
  National Nuclear Security Administration, Mission Need Statement: Office and
Manufacturing Space Expansion Project, Kansas City National Security Campus (Kansas
City, Missouri: initial document Sept. 19, 2018). Developing a mission need statement is a
key activity during the early stages of a project, and it identifies the capability gap between
the current state of a program’s mission and the mission plan.
22
 GAO, High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts
Needed on Others, GAO-17-317 (Washington, D.C.: Feb. 15, 2017).




Page 17                              GAO-19-126 Modernizing the Nuclear Security Enterprise
                       would be less expensive in the long run. 23 The Kansas City site’s plans
                       for significantly expanding its production and office space underscores
                       the challenges that exist in meeting these space needs while at the same
                       time limiting overall reliance on costly leases.

Production Equipment   NNSA and its contractor at the Kansas City site have identified
                       challenges in ensuring that the plant has up-to-date production
                       equipment. Recapitalizing equipment was not a significant part of the
                       move to the new modern production facility, according to site contractor
                       representatives. 24 Information from NNSA’s Master Asset Plan 2017, 25 for
                       example, states that most of the equipment used for producing
                       nonnuclear parts and components at the Kansas City site is nearing or
                       past the end of its useable life—defined as 15 years. 26 Specifically, as
                       shown in figure 6 below, 39 percent of the equipment at the Kansas City
                       site is from 6 to 15 years old, and 27 percent is 16 years old or more,
                       according to the plan. Much of the oldest equipment is located in
                       functional areas used for machining, refurbishment, and dismantlement
                       operations, or for production functions using rubber and plastics. The
                       oldest piece of equipment still maintained is more than 60 years old.




                       23
                         GAO, Federal Real Property: Greater Transparency and Strategic Focus Needed for
                       High-Value GSA Leases, GAO-13-744 (Washington, D.C.: Sept. 19, 2013). The General
                       Services Administration provides real-estate management and other administrative
                       support services for the federal government.
                       24
                         Production equipment no longer needed or no longer operational for mission purposes
                       was not moved from the old facility to the new facility, but older equipment that was still
                       needed and operational was moved, according to site contractor representatives.
                       25
                        National Nuclear Security Administration, Office of Safety, Infrastructure, and
                       Operations, Master Asset Plan 2017 (Washington, D.C.: 2017).
                       26
                         NNSA’s Master Asset Plan represents NNSA’s first step toward an integrated, strategic
                       infrastructure plan. It covers the condition of NNSA’s infrastructure, identifying current and
                       potential infrastructure risks to mission requirements.




                       Page 18                              GAO-19-126 Modernizing the Nuclear Security Enterprise
Figure 6: Age of Production Equipment at NNSA’s Kansas City National Security
Complex, as of 2017




Note: NNSA defines “useable life” as up to 15 years in its analysis; after that, equipment still needed
is due for replacement or recapitalization.



In addition to age-related challenges, officials at the Kansas City site
identified equipment challenges regarding capacity, based on an
equipment workload forecast analysis performed in 2015. For example,
according to this forecast, starting late in calendar year 2019, demand for
vibration- and shaker-test equipment will become consistently greater
than existing capacity, requiring additional equipment. 27

To address these challenges, Kansas City site contractor representatives
stated that they evaluate equipment needs across the facility at least
annually, based on production and maintenance schedules. The
representatives then develop a master list of equipment requests—
weighted for risk, age and condition of existing equipment, and whether
an external supplier can provide the functional need, among other
factors—and ranked according to current and future business needs,
according to these officials and contractor representatives. NNSA officials
at the Kansas City site and senior contractor representatives then review

27
  Vibration- and shaker-test equipment is used to test conformance of parts and
components to design laboratory requirements for structural integrity, durability, and other
performance requirements, according to site contractor representatives.




Page 19                                  GAO-19-126 Modernizing the Nuclear Security Enterprise
the master list to determine priorities for equipment purchases. Site
contractor representatives are developing a 10-year equipment strategy,
expected to be completed in December 2019, to sharpen focus on the
future needs of the production facility to support capacity and capability,
according to NNSA officials at the Kansas City site.

Budgets for equipment procurements at the Kansas City site vary from
year to year and are subject to change. According to Kansas City site
contractor representatives, the site is regularly adjusting and
communicating its equipment needs to reflect the results of equipment
evaluations to ensure that the funding NNSA will request for equipment
procurement is adequate. For example, according to Kansas City site
contractor representatives, the site originally received $4.5 million in fiscal
year 2018 to fund planned equipment procurements and received an
additional $13.4 million from NNSA in April 2018 to move fiscal year 2019
work scope into fiscal year 2018. 28 The remaining funding available is
$11.6 million, which covers the remaining fiscal year 2019 work scope.
Site plans for fiscal year 2018 specifically included capital equipment
replacement and upgrades needed for parts assembly, electronics and
fabrication, and non-destructive testing of nonnuclear parts and
components.

For fiscal year 2019, planned procurements include equipment for testing
of parts and components, rubber- and plastics-related production,
precision milling, machining and welding, paint and heat treatment,
fabrication, and chemical processing. NNSA officials at the Kansas City
site stated that planned budgets for fiscal years 2019 through 2023—
which currently include $8 million in equipment procurements and $2
million for area modifications for each of the 5 years—are subject to
adjustment based on ongoing evaluation of site equipment needs. These
estimates could change, depending on the outcome of the 10-year
equipment strategy, according to NNSA Kansas City site officials and
contractor representatives.

In addition to new equipment procurements, the Kansas City site has
developed other mitigation plans also focused on equipment capacity

28
   According to Kansas City site contractor staff, the majority of equipment procured for the
site is funded through NNSA’s Weapons Activities appropriation, which is available for
acquisition of plant and capital equipment and other purposes. These funds are
administered by NA-50, NNSA’s Office of Safety, Infrastructure, and Operations through
its recapitalization program.




Page 20                             GAO-19-126 Modernizing the Nuclear Security Enterprise
            risks. For example, these plans include options such as better allocating
            equal workload amongst similar equipment, and additional batching of
            material, according to Kansas City site officials. 29 The batching of material
            processed by a certain set of equipment increases efficiencies because it
            consolidates material into larger portions, which minimizes inefficiencies
            associated with starting and stopping the equipment multiple times,
            according to NNSA contractor representatives.

Workforce   Kansas City site officials and contractor representatives have identified
            three management challenges in ensuring the site can achieve a
            sufficient contractor workforce to meet forecasted future workload: (1)
            retention of existing staff, (2) recruiting skilled staff in a competitive job
            market, and (3) obtaining security clearances for new staff in a timely
            manner. To address these challenges, the site has been taking actions to
            retain existing staff, hiring and recruiting hundreds of new staff, and
            working to speed the security clearance process, according to site
            contractor representatives.

            Retaining Existing Staff

            Kansas City site contractor representatives said that retaining existing
            staff is challenging because the majority of the workforce falls into either
            of two categories: (1) recent, younger hires who have a high attrition
            rate, 30 or (2) staff eligible to retire. More than half (53 percent) of all staff
            have 5 years or less of service working at the site (see fig. 7).




            29
              Batching of material, as commonly defined, involves determining the amount of material
            prepared or needed for, or produced in, one operation. Batching is typically used as a
            method for purposes of gaining efficiency in operations, according to site contractor
            representatives.
            30
              According to Kansas City staff, within the first year of service, benefits and
            compensation are large factors for turnover.




            Page 21                              GAO-19-126 Modernizing the Nuclear Security Enterprise
Figure 7: Number of Kansas City Site Contractor Staff, by Years of Service, as of Fiscal Year 2017




                                          In addition, approximately 32 percent of the Kansas City site’s contractor
                                          staff are eligible to retire. 31 Figure 8 shows the distribution of staff by age
                                          at the Kansas City site, with the highest number in their late 50s and the
                                          next highest number in their late 20s.




                                          31
                                            According to site contractor representatives, Kansas City site staff are designated as
                                          eligible to retire based on a combination of their age and years of service. For salaried
                                          staff, retirement eligibility equates to their age and years of service adding to 80, or being
                                          55 years of age with 5 years of service. For hourly staff, retirement eligibility equates to
                                          their age and year of service adding to 80, or being 55 years of age with 10 years of
                                          service.




                                          Page 22                              GAO-19-126 Modernizing the Nuclear Security Enterprise
Figure 8: Distribution of Kansas City Site Contractor Staff, by Age, as of Fiscal Year 2017




                                           According to Kansas City contractor representatives and NNSA
                                           documents, site strategies for retaining newly hired and retirement-eligible
                                           staff include improvements in rewards and recognition programs, along
                                           with an emphasis on pay for performance. Contractor representatives
                                           also noted that the site offers telecommuting from a home office for those
                                           approved, flexible work hours—such as working 9-hour days to allow for a
                                           day off every 2 weeks—and flexible work options, including part-time
                                           employment.

                                           To better retain retirement-eligible staff the site has also created talking
                                           points to better prepare managers to discuss retirement and delayed
                                           retirement, covering topics such as the potential for reduced hours or
                                           returning to work after retirement, consistent with certain restrictions and
                                           policies. Because of these steps, according to Kansas City contractor
                                           representatives, many retirement-eligible staff are electing to continue to
                                           work; projected retirements are less than 20 percent of those eligible for
                                           retirement, based on actual retirement data for years 2013 to 2017. For
                                           example, although an employee may be eligible to retire at age 55 with at
                                           least 25 years of service, contractor representatives we interviewed noted
                                           that most retirements on average are at age 62 with 30 years of service.




                                           Page 23                           GAO-19-126 Modernizing the Nuclear Security Enterprise
Recruiting Skilled Staff

Kansas City site contractor representatives we interviewed have identified
a management challenge in recruitment because of a gap between the
critical technical skills needed at the site and those available in the local
labor market. In particular, they cited high demand for skilled labor in the
Kansas City area and low unemployment in the labor market at 4 percent,
which can make it difficult to fill positions. Contractors at the site said that
filling skilled positions can take an average of 58 days and that certain
positions, such as electrical engineers and toolmakers, are particularly
difficult to fill.

Kansas City site contractors noted that they have taken actions to
mitigate this challenge. These actions, which contractor site
representatives have characterized as largely successful, include
participation in and development of university relations programs,
involvement in research and development partnerships and consortiums,
recruitment from area trade schools and technical schools, and
expanding the market area in which the site searches for recruits. For
example, contractors noted the site’s participation in a service academy
career conference in San Diego, California, in August 2018. 32 They also
said they are considering ways to recruit skilled positions that are in high
demand, such as toolmakers, by offering to cover relocation expenses for
newly hired workers. They further noted that the site maintains an
internship program and has plans to double the number of interns, from
35 in 2018 to 71 in 2019, as a strategy to increase talent in critical areas.

According to Kansas City site contractor representatives, the site
increased the total number of contractor staff by about 65 percent in a 4-
year period, from 2,492 in August 2014 to 4,134 in August 2018, and is
expected to continue to increase to nearly 5,000 staff by August 2019.
Figure 9 shows the change in number of Kansas City site staff during the
last fiscal year for which data are complete, and the reasons for the
changes, as reported to us by site contractor representatives. To meet
forecasted workload increases, the site plans to continue to increase staff
in each year through 2020, with the numbers of planned annual hires


32
  The service academy career conference is a job fair exclusively for service academy
alumni, administered and supported by the alumni associations and association of
graduates of the U.S. Military Academy, the U.S. Naval Academy, the U.S. Air Force
Academy, the U.S. Coast Guard Academy and the U.S. Merchant Marine Academy.




Page 24                           GAO-19-126 Modernizing the Nuclear Security Enterprise
ranging from 800 to more than 1,000 staff, according to site contractor
representatives.

Figure 9: Change in Number of Kansas City Site Contractor Staff from End of Fiscal
Year 2016 through End of Fiscal Year 2017




Obtaining Timely Security Clearances for New Staff

Kansas City site officials identified a challenge in obtaining appropriate,
high-level security clearances for new staff on a timely basis. Contractor
representatives we interviewed noted that 100 percent of staff who
directly contribute to the design, disposition, fabrication, inspection,
scheduling, and protection of products and services related to nuclear
weapons require a Q clearance. 33 They further noted that the large
majority of support functions also require a Q clearance. As we reported
in March 2018, 34 the National Background Investigation Bureau had a


33
  DOE and U.S. Nuclear Regulatory Commission “Q” clearances are equivalent to top-
secret clearances granted by DOD.
34
  GAO, Personnel Security Clearances: Additional Actions Needed to Implement Key
Reforms and Improve Timely Processing of Investigations, GAO-18-431T (Washington,
D.C.: Mar. 7, 2018).




Page 25                          GAO-19-126 Modernizing the Nuclear Security Enterprise
backlog of more than 700,000 investigations as of February 2018. 35 As
we reported, this backlog was caused in part by two 2015 breaches of
Office of Personnel Management personnel records. 36 We designated the
government-wide personnel security clearance process as a high-risk
area in January 2018. 37

Of this national backlog, 3,609 were investigations of Q applicants. As of
April 2018, over 790 Kansas City site personnel were awaiting Q
clearances, according to Kansas City site contractor representatives.
According to these representatives, historically, the Bureau took 80 days,
on average, to investigate most Q applicants prior to the 2015 breaches;
however, as of February 2018, the Bureau took 316 days, on average, to
do so. According to Kansas City site contractor representatives, the
Bureau is not projecting normal operations until late 2019 or early 2020.
From fiscal year 2017 through March 2018, 778 Q clearances were
granted for the Kansas City site, with an average of 335 days at the
Bureau and another 27 days at NNSA to make a final determination. 38
According to site contractor representatives, these long wait times may
contribute to less than full employee utilization at the site. For example,
they noted that fully cleared staff are able to perform roughly 38 percent
more productive work than uncleared staff, and that difference amounts to
approximately 695 direct labor hours of productive work per person in a
year.


35
  The National Background Investigations Bureau is the entity within the Office of
Personnel Management with responsibility for conducting personnel background
investigations. It absorbed the Federal Investigative Services—the prior entity within the
Office of Personnel Management that conducted background investigations—when it
became operational on October 1, 2016.
36
  In June 2015, the Office of Personnel Management reported that an intrusion into its
systems had affected the personnel records of about 4.2 million current and former federal
employees. Then, in July 2015, the agency reported that a separate, but related, incident
had compromised its systems and the files related to background investigations for 21.5
million individuals. In total, OPM estimated 22.1 million individuals had some form of
personally identifiable information stolen, with 3.6 million being victims of both breaches.
37
  GAO’s High-Risk List includes federal areas in need of either broad-based
transformation or specific reforms to prevent waste, fraud, abuse, and mismanagement.
See GAO-18-431T for additional detail.
38
  According to NNSA officials, Kansas City site contractor representatives indicated
progress in increasing the number of clearances granted in a December 2018 update to
NNSA, due in part to the site requesting priority background investigations from the
Bureau.




Page 26                             GAO-19-126 Modernizing the Nuclear Security Enterprise
The Kansas City site is taking steps to mitigate the challenges associated
with the Bureau’s backlog. For example, the site is hiring hourly
production factory staff well in advance of the full production schedule for
the B61-12 and W88 Alt 370 weapons systems in fiscal year 2019, in part
to ensure these staff will be cleared in time to meet workload demands,
according to site contractor representatives. 39 Site contractor
representatives told us that they have also worked to expedite the
issuance of clearances by working with local Office of Personnel
Management officials on interviews for clearance cases. In addition, the
site has worked to ensure that new staff can be trained and productive
while awaiting clearances. Specifically, according to contractor
representatives, the site has

•    established segregated training space for uncleared workers;
•    created security plans and escorting practices that allow uncleared
     staff supervised access into secure areas to perform unclassified
     work, where possible; 40 and
•    temporarily converted some production space into areas where
     uncleared staff can perform unclassified hand assembly work.

In addition, the Kansas City site has requested 339 interim Q clearances,
267 of which had been approved, as of January 2018. DOE’s order that
establishes requirements for processing and granting security clearances
allows for interim security clearances to be issued under exceptional
circumstances and when such action is clearly consistent with agency
and national interests. DOE considers interim clearances to be temporary
measures pending completion of the investigation, which must be in
process when the interim clearance is granted. 41 As of September 2018,
39
  These hourly staff may work in areas such as assembly and electrical fabrication, rubber
and plastics, or secure electronics.
40
  Contractor staff noted that sufficiently cleared staff supervise uncleared staff while the
latter conduct unclassified work only in areas of the plant where the need for those
uncleared staff outweighs the potential burden placed upon the department to utilize
escorts. Contractor staff further noted that they temporarily converted production space
into areas where such employees can perform unclassified hand assembly work.
41
  DOE Order 472.2, Personnel Security outlines DOE’s guidance for processing and
granting of security clearances. According to Kansas City site contractor representatives,
DOE also issued additional guidance directing personnel that grant security clearances for
DOE federal and contractor staff/applicants to make risk-based interim clearance
decisions on a case-by-case basis only until the clearance investigation backlog has
abated, at which point interim security clearances will be processed in accordance with
usual practices.




Page 27                              GAO-19-126 Modernizing the Nuclear Security Enterprise
                     less than 1 percent of interim clearances approved for the Kansas City
                     site had been cancelled once full investigations were completed,
                     according to site contractor representatives.

External Suppliers   Kansas City site contractor representatives identified challenges
                     regarding the site’s monitoring and management of external suppliers’
                     capacity and skills, and other challenges—such as ensuring that suppliers
                     are willing to establish long-term partnerships with the Kansas City site—
                     that could affect supply chain risk. Since the site procures about 65
                     percent of its nonnuclear components from external suppliers, these
                     management challenges are highly important, according to site contractor
                     representatives. For example, disruption to the established supply chain
                     due to insufficient capacity, skills, or a supplier’s decision not to do
                     business with the Kansas City site can result in production delays.
                     According to Kansas City site contractor representatives, delays in such
                     instances are possible because site contractor representatives would
                     need to take additional time to either replace the lost supplier or develop
                     its own production line to produce the parts in-house at the Kansas City
                     site.

                     To help mitigate challenges regarding the site’s overall monitoring and
                     management of suppliers’ capacity, skills, and other risks, the Kansas
                     City contractor representatives said that they developed two key analytic
                     tools. These tools are a Supplier Capacity Analysis Tool, developed in
                     2018, and a Supplier Overall Risk Tool, which has been evolving since
                     2015, according to these representatives. According to Kansas City site
                     officials, contractor representatives use these analytical tools to evaluate
                     over 230 suppliers on a quarterly basis and to evaluate the top 39
                     suppliers monthly. The evaluations assess factors such as operational
                     performance and financial health, whether a supplier is the sole
                     commodity supplier, and a supplier’s willingness to partner with the site.

                     To help mitigate supplier capacity risks, the site develops plans, using
                     information from the supplier evaluations, to ensure sufficient external
                     supplier capacity, according to Kansas City site contractor
                     representatives. For example, Kansas City site contractor representatives
                     used the supplier capacity analysis tool to identify capacity gaps for at-
                     risk commodities, including machine parts, and to develop gap-closure
                     plans, according to these contractor representatives. As a result of these
                     plans, contractor representatives certified two new suppliers and entered
                     into agreements with several other suppliers to provide reserve capacity.
                     In addition, NNSA’s Enterprise Modeling and Analysis Consortium
                     conducted alternate analysis on the Kansas City site’s workload capacity


                     Page 28                       GAO-19-126 Modernizing the Nuclear Security Enterprise
that corroborated the Kansas City site’s conclusion that mitigation steps
being taken at the Kansas City site, including ensuring adequate external
supplier capacity, should address increased workload concerns.

To help mitigate risks regarding suppliers’ skills in working with the
Kansas City site, site contractor representatives also said that the site has
taken steps to help train new suppliers. For example, site contractor
representatives perform multiple on-site training exercises within the first
6 months of new supplier relationships. These exercises educate the
suppliers on purchase order requirements, terms, drawing definitions, and
quality expectations using a documented, comprehensive, nine-step
process, according to site contractor representatives.

To help mitigate risks regarding suppliers’ willingness to establish long-
term partnerships with the Kansas City site, site contractor
representatives told us that they have begun taking steps to encourage
and foster long-term partnerships with suppliers. According to these
representatives and a study NNSA conducted of lessons learned from an
essentially complete warhead life extension program, 42 facilitating
effective supply chains for the nuclear enterprise requires enduring
business relationships with suppliers of commercial off-the-shelf
components. Because specifications for weapons components and
materials are exacting and quantities required are frequently low, many
potential suppliers are reluctant to expose themselves to the risk of
production for a niche market, according to Kansas City site officials and
contractor representatives. To mitigate reluctance to partner with the
Kansas City site, contractor representatives stated that the site has
developed points of contact with each supplier. These points of contact
work toward establishing and maintaining a collaborative partnership in
which production forecasts are routinely shared and performance metrics
are discussed to foster continuous improvement when needed.

In addition, Kansas City site contractor representatives stated that the site
is taking steps to develop relationships with other sites to address site-
wide challenges regarding supplier evaluations, which can contribute to
risks such as lower efficiency and effectiveness and higher costs. The site
is taking this action in response to a July 2018 DOE Office of Inspector
General (OIG) report that identified the potential duplication of supplier

42
  National Nuclear Security Administration, Defense Programs W76-1 Life Extension
Program Lessons Learned Study (Washington, D.C.: August 3, 2017) (Official Use Only).




Page 29                          GAO-19-126 Modernizing the Nuclear Security Enterprise
                         evaluations among NNSA sites, including the Kansas City site, 43 resulting
                         in lower efficiency and effectiveness, and higher costs. The OIG report
                         noted that the need to minimize duplication of efforts will become even
                         more important when considering the additional demands on production
                         related to upcoming weapon refurbishment efforts, which are expected to
                         increase the number of supplier quality auditors needed by the Kansas
                         City site. The OIG recommended that to maximize efficiencies and
                         effectiveness, NNSA should work with contractors, including the Kansas
                         City site, to assess ways to improve the efficiency of supply chain
                         management activities, among other things.

                         Steps the Kansas City site has taken in response to this OIG report
                         include establishing a point of contact with Sandia National Laboratories,
                         which is leading an overarching effort across the nuclear security
                         enterprise to address duplication concerns, according to site contractor
                         representatives. In addition, a December 2018 report to the President by
                         DOD, in consultation with other agencies, identified supply chain risks in
                         the government’s manufacturing and defense industrial base, including at
                         DOE and NNSA sites, and recommended that DOE establish an
                         Industrial Base Analysis and Sustainment program to address risks within
                         the energy and nuclear sectors. 44 According to NNSA officials at the
                         Kansas City site, they are still determining how it will respond to this
                         recommendation.

Weapons Design Changes   With increasing concurrency of production forecasted, Kansas City
                         contractor representatives have identified challenges regarding their need
                         to minimize weapons design changes during production, which in the past
                         contributed to cost increases and schedule delays for the W76-1 life
                         extension. According to Kansas City contractor representatives and
                         NNSA officials, at least two general weapons design issues can
                         contribute to overall schedule pressure at the Kansas City site. For
                         example, delays due to design changes intended to make parts easier to
                         produce can exacerbate schedule delays by compressing the overall
                         weapons refurbishment schedule. In addition, design changes are


                         43
                           Office of Inspector General, U.S. Department of Energy, Supplier Quality Management
                         at National Nuclear Security Administration Sites, DOE-OIG-18-41 (Washington, D.C.:
                         July 18, 2018).
                         44
                           Department of Defense, Assessing and Strengthening the Manufacturing and Defense
                         Industrial Base and Supply Chain Resiliency of the United States (Washington, D.C.:
                         September 2018).




                         Page 30                           GAO-19-126 Modernizing the Nuclear Security Enterprise
undertaken for other reasons, such as in response to weapons testing
results.

First, according to NNSA’s B61-12 program manager, even though both
design laboratories and production site team members advocate for the
design changes that make parts easier to produce, 45 the enterprise-wide
impact of these changes late in the design process may, as site
contractor representatives noted, impact the LEP’s schedule and may
require more resources and plant/vendor capacity to meet the schedule.
According to this official, given the resource demands of simultaneously
occurring major weapons refurbishments, such as the B61-12 and W88
Alt 370, schedule impacts can be magnified and have caused justifiable
concern with leadership at NNSA, the design laboratories, and the
Kansas City site.

Second, Kansas City site officials expressed concern that some
component design requirements continue to change late in the production
development phase, sometimes because of test results, which creates
tension between improving the design and stabilizing production
requirements and processes in preparation for full-scale production.
Kansas City site officials stated that such design changes pose an
ongoing management challenge. Specifically, time lost because of design
delays in the earlier stages of weapons’ design and development often
needs to be recovered later, during time allotted for production, to meet
established delivery schedules, according to Kansas City site officials.
Such delays have triggered the need for schedule recovery plans at the
Kansas City site in the past.

In response to the concerns, NNSA has led several mitigation steps to
address schedule risk as both the B61-12 and W88 Alt 370 enter the final
stages before full production begins, according to NNSA’s B61-12
program manager. For example, NNSA revised its baseline change
process for the B61-12 and W88 Alt 370 to require all changes, including
production-related changes, to be reviewed, according to NNSA’s B61-12
program manager. Specifically, NNSA implemented a change
management board with several tiers for review and approval of proposed
design changes based on the type of change, and potential impact to

45
  Design changes for helping to make parts easier to produce could include changes such
as updating product specifications, changing or refining tester limits, and substituting
among commercial -off-the-shelf parts—such as resistors, caps, and diodes—to fine-tune
circuit performance, according to NNSA’s B61-12 program manager.




Page 31                           GAO-19-126 Modernizing the Nuclear Security Enterprise
                         program milestones, cost, and risk. Varying levels of required review and
                         approval, depending on the change, can include NNSA production and
                         design agency officials, senior site managers, B61-12 or W88 Alt 370
                         project officers, or other senior managers at DOD and NNSA. The intent,
                         according to this official, is to screen all the changes and determine if they
                         are really needed and when, and if site-wide resources and schedules
                         can support the changes.

                         In addition, Kansas City site contractor representatives said that they
                         have developed management strategies to help mitigate production-
                         related impacts of design changes, such as adding work shifts to increase
                         production output. For example, an August 2017 analysis by Kansas City
                         site contractor representatives shows the use of three shifts—both partial
                         and full shifts—to meet workload demand in multiple functional areas,
                         including production of cables, high voltage assembly, encapsulation and
                         welding, arming and firing mechanisms, machining, and environmental
                         and pressure laboratories. 46 Using additional shifts can help the Kansas
                         City site recover from schedule delays that might result from late design
                         changes, according to site contractor representatives. Moreover, lessons
                         learned from the W76-1 LEP—which will complete production in 2019—
                         are helping to improve coordination between production sites and design
                         agencies, specifically through increased coordination earlier in the
                         weapon development process, according to Kansas City site contractor
                         representatives.


Further Changes to       While current efforts to mitigate the challenges Kansas City site
Stockpile Requirements   contractor representatives have identified are expected to help address
                         the site’s anticipated future workload, as discussed previously, this
Are Anticipated, Which
                         workload could further increase if certain 2018 Nuclear Posture Review
May Affect Existing      policy statements, based on nuclear weapons stockpile studies now
Workload Plans at the    underway in response to the review, result in changes to production
Kansas City Site         requirements. 47 For example, the Nuclear Posture Review called for
                         modifying existing sea-launched ballistic missile warheads to provide a
                         low-yield option; advancing a program to replace the W78 Intercontinental

                         46
                           The analysis also showed that workload demand for other functional areas was being
                         met by using single shifts, including the production of radars, certain electronics,
                         telemetry, foam fabrication, plastics machining and molding, painting and heat treatment,
                         and polymer production.
                         47
                           The Nuclear Posture Review was prepared by the DOD under the direction of the
                         President to determine the role of nuclear weapons in the nation’s security strategy.




                         Page 32                             GAO-19-126 Modernizing the Nuclear Security Enterprise
Ballistic Missile warhead by 1 year; 48 the study of a sea-launched,
nuclear-armed cruise missile; and sustaining the B83 strategic nuclear
bomb past its currently planned retirement date. NNSA and DOD are
developing studies and implementation plans for the 2018 Nuclear
Posture Review, but it is too soon to know to what extent these studies
and plans may affect the Kansas City site. One early indication of how
implementing the 2018 Nuclear Posture Review may affect the Kansas
City site is that, according to the Fiscal Year 2019 Stockpile Stewardship
and Management Plan, 49 concurrent production of the W80-4 LEP and
the W78 replacement LEP is now expected to extend into the 2030s. In
addition, the 2019 plan anticipates that alts may be needed to sustain the
B83, if the weapon system remains in the stockpile for long enough.

We concluded in an April 2017 report that the new Nuclear Posture
Review comes during a particularly challenging decade for NNSA’s
nuclear modernization efforts, as the agency plans to simultaneously
execute at least four nuclear LEPs along with major construction projects,
such as efforts to modernize NNSA’s uranium and plutonium
capabilities. 50 We further concluded that NNSA’s modernization budget
estimates for fiscal years 2022 through 2026, which reflected past
program plans, may exceed the funding levels programmed for
modernization in future budgets, raising affordability concerns. Moreover,
we concluded that NNSA had not addressed a projected “bow wave” of
future funding needs—that is, an impending and significant increase in
requirements for additional funds—or the mismatch between potential
funding needs and potential funding available even before the Nuclear
Posture Review was completed. We recommended that NNSA include an
assessment of affordability of NNSA’s portfolio of modernization
programs in future versions of the Stockpile Stewardship and
Management Plan—for example, by presenting options NNSA could
consider to bring its estimates of modernization funding needs into
alignment with potential future budgets. NNSA did not explicitly agree or

48
  The W78 replacement is based on work NNSA and its sites previously did on an inter-
operable warhead.
49
  National Nuclear Security Administration, Fiscal Year 2019 Stockpile Stewardship and
Management Plan—Biennial Plan Summary Report to Congress (Washington, D.C.:
October 2018). According to the Fiscal Year 2019 Stockpile and Stewardship
Management Plan, the plan begins to, but doesn’t fully incorporate the 2018 Nuclear
Posture Review—NNSA will continue to analyze the portfolio’s long-term needs and the
next plan will include further changes to align it with the 2018 Nuclear Posture Review.
50
 GAO-17-341.




Page 33                            GAO-19-126 Modernizing the Nuclear Security Enterprise
disagree with our recommendation, but we will continue to monitor any
action NNSA takes in response to the recommendation.

In addition to addressing affordability concerns, NNSA has been advised
to stabilize long-term workload at operating sites. A congressional
advisory panel examining the governance of the nuclear security
enterprise issued a report in November 2014 recommending, among
other things, actions intended to stabilize long-term workload at operating
sites. 51 In particular, it recommended that NNSA, working with DOD,
create a long-term operating plan to support the nation’s warhead
modernization strategy; it further specified that this plan should be
designed to create a relatively stable, long-term workload. The panel’s
report stated that a stable baseline of design, engineering, and production
is needed to make effective use of the available capabilities in the
weapons complex, provide the basis for sizing and modernization of the
weapons complex, and identify potentially conflicting demands on
available capabilities. While NNSA has taken some actions in response to
this recommendation, an expert panel concluded in March 2018 that
NNSA’s overall response had been inadequate and called for NNSA to
develop, among other things, an integrated strategic plan for the entire
nuclear security enterprise. 52 The panel concluded that, given NNSA’s
expected increase in workload across the nuclear weapons complex, and
the new 2018 Nuclear Posture Review uncertainties, NNSA’s ongoing
implementation of this and other recommendations made by the Panel
over the next several years will take on additional importance.




51
  Congressional Advisory Panel on the Governance of the Nuclear Security Enterprise, A
New Foundation for the Nuclear Enterprise. Section 3166 of the National Defense
Authorization Act for Fiscal Year 2013 established the panel to examine options and make
recommendations for revising the governance structure, mission, and management of the
nuclear security enterprise.
52
  Panel to Track and Assess Governance and Management Reform in the Nuclear
Security Enterprise (National Academies of Sciences, Engineering, and Medicine and
National Academy of Public Administration), Report 2 on Tracking and Assessing
Governance and Management Reform in the Nuclear Security Enterprise (Washington,
D.C.: March 13, 2018). Section 3137 of the National Defense Authorization Act for Fiscal
Year 2016 requires DOE and NNSA to develop an implementation plan to reform the
governance and management of the nuclear security enterprise. The act also required
NNSA to contract with the National Academy of Science and the National Academy of
Public Administration to establish a panel of experts to assess the plan and its
implementation.




Page 34                            GAO-19-126 Modernizing the Nuclear Security Enterprise
                  We provided a draft of this report to NNSA for its review and comment.
Agency Comments   NNSA provided technical comments, which we incorporated into this
                  report, as appropriate.


                  We are sending copies of this report to the appropriate congressional
                  committees, the Administrator of the National Nuclear Security
                  Administration, and other interested parties. In addition, the report is
                  available at no charge on the GAO website at http://www.gao.gov.

                  If you or your staff have any questions about this report, please contact
                  me at (202) 512-3841 or bawdena@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 key contributions to this
                  report are listed in appendix II.




                  Allison B. Bawden
                  Director, Natural Resources and Environment




                  Page 35                       GAO-19-126 Modernizing the Nuclear Security Enterprise
List of Committees

The Honorable James M. Inhofe
Chairman
The Honorable Jack Reed
Ranking Member
Committee on Armed Services
United States Senate

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

The Honorable Adam Smith
Chairman
The Honorable Mac Thornberry
Ranking Member
Committee on Armed Services
House of Representatives

The Honorable Marcy Kaptur
Chairwoman
The Honorable Mike Simpson
Ranking Member
Subcommittee on Energy and Water Development, and Related Agencies
Committee on Appropriations
House of Representatives




Page 36                   GAO-19-126 Modernizing the Nuclear Security Enterprise
Appendix I: Objectives, Scope, and
              Appendix I: Objectives, Scope, and
              Methodology



Methodology

              The Senate committee report accompanying a bill for the National
              Defense Authorization Act for Fiscal Year 2018 included a provision for us
              to review the Kansas City site’s staffing plans and capabilities to meet
              national security requirements. 1 Our report examines (1) workload
              forecasts for the Kansas City site since 2012, and (2) management
              challenges the Kansas City site has identified for achieving the forecasted
              workload and actions the site has taken to mitigate these challenges.

              To examine workload forecasts for the Kansas City site since 2012, we
              visited the site, obtained and reviewed workload documents, and
              interviewed officials from the National Nuclear Security Administration’s
              (NNSA) Kansas City site office and headquarters offices, and NNSA
              contractor representatives at the site. In particular, we obtained
              information on the Kansas City site forecasted workload based on fiscal
              years 2012 and 2018 Stockpile Stewardship and Management Plans
              (SSMP), comparing full production schedules, including upcoming B61-12
              Life Extension Program (LEP) and W88 Alteration (Alt) 370 work.
              Because the design and capacity of the modern production facility,
              completed in 2012, was based largely on the 2012 SSMP and previous
              plans, we used this as the baseline plan. We then compared nuclear
              weapons systems LEP and Alt schedules in the 2012 SSMP with the
              2018 SSMP because Kansas City contractor representatives told us that
              plans and associated workload had changed significantly by 2018. In
              addition, we reviewed Kansas City contractor information provided by the
              “what-if” capacity analyses tool, including graphs and charts depicting
              workload for each weapons system undergoing LEPs or Alts. 2 Whenever
              possible, we validated or corroborated contractor-forecasted data on
              workload and facility capacity by reviewing other sources such as NNSA’s
              Enterprise Modeling and Analysis Consortium analysis and conclusions
              and SSMP information.

              To examine management challenges the Kansas City site has identified
              for achieving the forecasted workload, and any actions the site has taken
              to mitigate these challenges, we visited the Kansas City site, obtained
              and reviewed documentation, and interviewed NNSA and contractor
              officials who identified management challenges in five areas: ensuring
              that the site has (1) sufficient production and administrative office space,

              1
              S. Rep. No. 115-125, at 356 (2017).
              2
               We reviewed the results of these contractor analyses but did not take steps to assess the
              specific forecasts for validity and accuracy.




              Page 37                              GAO-19-126 Modernizing the Nuclear Security Enterprise
Appendix I: Objectives, Scope, and
Methodology




(2) up-to-date production equipment, (3) a sufficient workforce, (4)
capable and reliable external suppliers, and (5) complete weapons
designs early enough in development to minimize production changes
and delays. We selected these five areas for review based on NNSA
officials’ and contractor representatives’ identification of such challenges
as being the most significant at the Kansas City site.

To corroborate information on management challenges and associated
mitigation action(s) provided by the Kansas City site, we conducted
interviews with additional sources, reviewed alternative documentation or
analyses, and obtained examples of the specific action(s) being taken,
when available. For example, regarding the first management challenge
of ensuring adequate production and administrative office space, we
reviewed Kansas City site information, including information on space in
the modern facility, the mission needs statement for expanding the site’s
space, and NNSA budget justifications for fiscal years 2018 and 2019.
We also obtained information on short- and long-term plans for meeting
forecasted workload demands.

Regarding the second management challenge—ensuring it has up-to-
date production equipment—we reviewed Kansas City site information
and information from an alternative source. Specifically, we reviewed
NNSA’s 2017 Master Asset Plan, which provided additional information
and alternate analyses concerning the age of the Kansas City site’s
production equipment. Regarding the third management challenge—
ensuring a sufficient, capable, and security-cleared workforce—we
reviewed both site-level information and information from other sources,
including from NNSA and the Department of Energy (DOE). For example,
we reviewed NNSA’s Fiscal Year 2018 Stockpile Stewardship and
Management Plan, which also includes workforce information and
analyses. In addition, we asked the Kansas City site contractor
representatives and NNSA officials for additional clarification and detail
concerning the management challenges and mitigation actions, as well as
specific examples to support their statements. For issues related to the
clearance process, we contacted DOE officials to obtain information on
DOE supplemental guidance for interim clearance mitigation steps. To
confirm the accuracy of staffing-related information provided by Kansas
City site contractor representatives, we obtained information from these
representatives on how the site performed certain calculations, such as
determining the change in number of Kansas City site staff; number of
Kansas City site staff, by years of service; and distribution of Kansas City
staff, by age. We reviewed the various formulas Kansas City contractor
representatives used in preparing its analyses in order to understand the


Page 38                              GAO-19-126 Modernizing the Nuclear Security Enterprise
Appendix I: Objectives, Scope, and
Methodology




logic used in making these determinations. Furthermore, we validated
that these calculations were accurate by independently performing the
calculations to see if our results matched the site’s results.

For information concerning the fourth management challenge—ensuring
capable and reliable external suppliers—we interviewed a senior NNSA
headquarters official overseeing NNSA’s Enterprise Modeling and
Analysis Consortium, which conducted alternate analyses on the Kansas
City site’s workload capacity, equipment, and workforce. The Consortium
corroborated the Kansas City site’s conclusion—that mitigation steps
being taken at the Kansas City site should address increased workload
concerns. Regarding the fifth and last management challenge—ensuring
complete weapons designs early in development to ensure that
production changes and delays are kept to a minimum—we reviewed the
W76 lessons learned report, which also describes design completion
issues affecting the Kansas City site. In addition, we interviewed NNSA’s
B61 program manager to obtain additional perspective on design-related
challenges facing upcoming B61-12 refurbishments.

We conducted this performance audit from November 2017 to April 2019
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.




Page 39                              GAO-19-126 Modernizing the Nuclear Security Enterprise
Appendix II: GAO Contact and Staff
                  Appendix II: GAO Contact and Staff
                  Acknowledgments



Acknowledgments


                  Allison B. Bawden, (202) 512-3841 or bawdena@gao.gov.
GAO Contact
                  In addition to the individual named above, Jonathan Gill (Assistant
Staff             Director), Christopher Pacheco (Analyst in Charge), and Sophia Payind
Acknowledgments   made significant contributions to this report. Also contributing to this
                  report were Elizabeth Dretsch, R. Scott Fletcher, Thomas Gilbert, Richard
                  Johnson, Cynthia Norris, Jeanette Soares, and Sara Sullivan.




(102399)
                  Page 40                              GAO-19-126 Modernizing the Nuclear Security Enterprise
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