Yesterday, the Government Accountability Office (GAO) released another report on the National Nuclear Security Administration (NNSA), this time analyzing the NNSA’s reviews of budget estimates and decisions on resource trade-offs.
GAO’s findings on NNSA budgeting procedures are damning. The report concludes: “NNSA does not thoroughly review budget estimates before it incorporates them into its proposed annual budgets. Instead, it relies on undocumented, informal reviews of these estimates by site and headquarters program office officials.”
NNSA argues that “the agency’s trust in its contractors minimizes the need for a formal review process.” GAO, however, notes some key problems with this informal process.
Just one of the problems identified by GAO: NNSA’s review process “is not sufficiently thorough to ensure the credibility and reliability of NNSA’s budget because it is limited to assessing the processes used to develop budget estimates rather than the accuracy of the resulting estimates and is conducted for a small portion of NNSA’s budget – approximately 1.5 percent of which received such review in 2011.”
Inaccurate budget estimates on the scale seen regularly at NNSA would never be tolerated in the private sector. But Congress’ unwillingness to scrutinize NNSA’s spending requests has allowed over-budget, under-schedule nuclear boondoggles to move forward.
Recent history is full of the NNSA’s budgeting blunders. The annual operating costs of the MOX facility at the Savannah River site in South Carolina have grown from $156 million per year to close to $500 million. The refurbishment of the W87 nuclear warhead saw a cost increase of $300 million. The construction costs of the Uranium Processing Facility at the Y-12 National Security Complex ballooned from the original estimate of $1.1 billion in 2004 to $6.5 billion in 2011.
Last week we saw perhaps the worse example of poor budgeting at NNSA thus far. During the Senate Appropriations Subcommittee hearing, Senator Dianne Feinstein revealed that the NNSA’s cost estimate for the Life Extension Program (LEP) for the B61 nuclear bomb had doubled from its original estimate of $4 billion to $8 billion. The Pentagon’s Cost Assessment and Program Evaluation office is already challenging the NNSA’s estimate, saying the B-61 LEP costs could total $10 billion.
With examples like these, the GAO report didn’t exactly come as a surprise. But it does confirm that cost overruns are more than just mistakes – they are the result of systemic budgeting problems at NNSA, problems that raises fundamental problems about the reliability of NNSA’s budget estimates.
The GAO report may not say anything we didn’t know before, but it should encourage Congress to apply added scrutiny to NNSA’s budget requests.