Broken Budget System at NNSA

The National Nuclear Security Administration, under fire for massive cost overruns on projects in New Mexico and elsewhere, doesn’t thoroughly review its own budget estimates before it sends them to Congress, according to auditors at the Government Accountability Office.

A top agency official disputed the finding, but acknowledged improvements are needed in its budget process. Rising costs of a new plutonium building at Los Alamos National Laboratory, which saw a sixfold increase before the project was shelved this year, are evidence of a broken budget management system at the agency, GAO auditors found.

Given the agency’s “record of weak management of major projects,” the nuclear weapons program’s federal managers need to do a better job of realistically estimating the cost of maintaining the U.S. nuclear arsenal and the labs and plants needed to do the job, according to the GAO.

Auditors at the GAO, an investigative arm of Congress, found that the NNSA accepts cost estimates developed by Los Alamos and other contractors that do the bulk of the agency’s work, without subjecting them to sufficient independent scrutiny before sending them on to Congress each year as part of the agency’s annual funding request.

The rising cost of the Chemistry and Metallurgy Research Replacement building at Los Alamos, which lab and federal managers say is crucial to maintaining the U.S. nuclear weapons stockpile, has become a serious liability for the NNSA as it tries to fend off criticism from Congress.

In 2005, the NNSA estimated the building would cost between $745 million and $975 million. When it was finally shelved in February, that estimated cost had risen to $4 billion to $6 billion, before construction had even begun.

“At a time of fiscal constraints, NNSA must be more cost-conscious and do a better job developing realistic and credible cost-estimates for major projects,” Sen. Dianne Feinstein, D-Calif., said during a hearing on the agency’s budget earlier this year. “Or else, cost overruns and schedule delays will undermine the nuclear modernization agenda and nonproliferation goals.”

In a written response to the GAO, NNSA budget manager Cynthia Lersten agreed to implement a series of GAO recommendations to try to tighten up its budget process. But she said the agency already engages in “a wide range of review activities” to validate budget estimates before funding requests are sent to Congress.