GAO Report Cites New NIF Cost Estimate

Poor management and faulty original cost estimates have led to substantial cost overruns and delays in construction of DOE’s National Ignition Facility (NIF), according to a new General Accounting Office (GAO) report. The report looks at difficulties still facing the project, calls for an independent review of its technical challenges, and urges Secretary of Energy Bill Richardson not to reallocate funds from other DOE programs without carefully assessing the consequences. It estimates that, to be completed in 2008, the total cost for the NIF will approach $3.9 billion (including a number of related costs). Congress will surely consider this report as it completes DOE’s FY 2001 funding bill this fall.

NIF is a key component of DOE’s Science-based Stockpile Stewardship Program to maintain the safety and reliability of the nation’s nuclear weapons without testing. Under construction at Lawrence Livermore National Laboratory (LLNL), NIF would use 192 laser beams to simulate aspects of a nuclear explosion, and would also contribute to research in areas such as materials, astrophysics, and fusion. In 1995, the project was first proposed at a cost of $1.1 billion, with another $1 billion in supporting R&D and program costs calculated separately, and with completion expected in 2002. A year ago, shortly after announcing that the project was on schedule and on budget, Secretary Richardson learned from LLNL of problems that were driving up costs and slowing down construction. DOE’s latest estimate is just over $2 billion for construction (see /fyi/2000/fyi00.065.htm ), with just over $1 billion in separate, additional supporting costs within the Inertial Confinement Fusion budget, and completion in 2008.

GAO points out that DOE’s calculations do not take into account other costs that “directly support the completion of NIF and should be considered part of its total costs,” such as target design and fabrication. Incorporating these additional costs, and thus not directly comparable to DOE’s estimates, the GAO report states that, “on the basis of DOE and Laboratory data, NIF’s total cost could reach at least $3.9 billion.” Additionally, the report finds that unresolved technical problems, such as developing lenses for the target chamber that can withstand the powerful lasers, “may further drive up the cost of NIF” and delay construction past 2008. Although lab officials reportedly believe the difficulties will be surmounted, GAO warns that “there is currently no solution to this problem,” and adds that “substantial technical and cost uncertainties also persist” in other areas.

Another concern raised in the report is Richardson’s pledge that the overruns will be paid for by reallocating funds from elsewhere within DOE’s nuclear weapons program. (Note: Since the GAO report was begun, responsibility for these programs was transferred to the semi-autonomous National Nuclear Security Agency, but the report uses the older terminology.) Richardson has apparently submitted a revised FY 2001 budget request that would shift $95 million to NIF from other areas of the Stockpile Stewardship Program. GAO cautions that the Stockpile Stewardship Program’s budget is already “under significant stress” to support necessary construction of other science facilities, replacement of aging infrastructure, and refurbishment of weapons. Reallocating funds to NIF, the report says, “has broad implications for DOE’s nuclear weapons program.” GAO cites concerns from some scientists about potential impacts to DOE’s civilian science programs as well. House Science Committee Ranking Minority Member Ralph Hall, (D-TX), who requested the report along with committee chairman James Sensenbrenner (R-WI), commented, “I am especially concerned that NIF cost overruns may cut into funds available for other worthy scientific research projects under the jurisdiction of this Committee.”

Based on the above findings, the report makes two recommendations:

I.) “That the Secretary of Energy arrange for an outside scientific and technical review of the technical challenges remaining for NIF that could affect the project’s cost and schedule risks;" and

II.) “That the Secretary of Energy not reallocate funds from the nuclear weapons program to pay for NIF until DOE (1) evaluates the impact of the current cost and schedule plan, as well as any other options for NIF, on the overall nuclear weapons program and (2) certifies that the selected NIF cost and schedule plan will not negatively affect the balance of the Stockpile Stewardship Program.”

Declaring that “NIF’s cost increases and schedule delays were caused by a combination of poor Lawrence Livermore management and inadequate DOE oversight,” the report also provides a history of the failings and mismanagement that led to the current situation. In addition to inexperience, poor planning, insufficient contingency funding, lack of disclosure of problems by LLNL officials to DOE, and ineffective review mechanisms, the report also finds that the original LLNL and DOE officials knowingly proposed an inadequate budget “in the belief that the Congress would not fund NIF at a higher cost.” While GAO finds it “encouraging” that DOE and laboratory officials have already taken actions to improve management and strengthen oversight, the report says it is premature to assess the results yet.

When they return after Labor Day, congressional appropriators will certainly take note of the GAO report as they meet in conference to work out the final FY 2001 DOE spending bill. Regarding funding for NIF, the House Appropriations Committee report says, “The Committee does not believe that the information provided to date is an adequate basis for additional appropriations in fiscal year 2001. The Committee will reserve judgment on this project” until DOE submits a final cost and schedule estimate in September (see /fyi/2000/fyi00.074.htm .) Although Senate appropriators completed work on their DOE bill before leaving for August recess, the text of their report is not yet available.

The GAO report, “National Ignition Facility: Management and Oversight Failures Caused Major Cost Overruns and Schedule Delays,” was released in earlier this month. It runs 45 pages with appendices, and is available at http://www.gao.gov/cgi-bin/getrpt?rced-00-141