Department of Energy Risking Nuclear Deterrence and National Security

According to the recent 2018 Nuclear Posture review, a smoothly functioning nuclear weapons industrial base is essential to a credible strategic deterrent. The Y-12 National Security Complex in Tennessee and the Pantex Plant in Texas are key sites that contribute to the sustainment and reliability of the nuclear deterrent but are under pressure to decrease costs.

The National Nuclear Security Administration (NNSA) is a semi-autonomous agency within the U.S. Department of Energy that oversees the development and assessment of warheads that are carried on the delivery vehicles of the nuclear triad. The requirements for the warheads are generated by the Department of Defense.

According to a recent report published by the Department of Energy’s Inspector General, serious management problems are occurring at Y-12 and Pantex. This is concerning because those sites enable a safe and reliable nuclear deterrent to protect the U.S. and its allies from potential nuclear aggressors.

Consolidated Nuclear Security, LLC was selected because it claimed it could achieve over $3 billion in savings at Y-12 and Pantex over 10 years. The contract awarded for management of these sites made cost savings a priority, and the ability to meet mission requirements by maintaining a safe and credible nuclear deterrent was not a priority.

Many policymakers questioned the high amount of savings projected by Consolidated Nuclear Security, LLC, especially since the nuclear triad is undergoing extensive modernization.

To fulfill President Donald Trump’s goal of revitalizing the nuclear force, Y-12 and Pantex need to prepare for an increased workload by updating buildings and purchasing new equipment. More funds and workers are required to meet current nuclear force goals, not less as would be expected from the cost savings approach.

The sites had to forego workers and some employee benefits to achieve cost savings. This creates a serious problem because personnel at these sites possess years of institutional knowledge and talent. They also have special security clearances that require long wait times for approval.

Workers at these facilities perform the labor necessary to fulfill the unique and valuable mission of maintaining a credible nuclear triad. When management of the facilities changes, the workforce largely stays the same with little turnover in staff.

Compromising knowledgeable staff to achieve cost savings in effect puts the reliability of the nuclear trad at risk. Qualified employees are not easy to find and maintaining the current workforce is critical to sustaining a strong nuclear deterrent.

Consolidated Nuclear Security, LLC has been struggling to reach the cost savings it promised as determined in a Fiscal Year 2015 performance evaluation report. The assessment confirmed the facilities’ serious problems related to work quality, operations and other issues.

The following year, production and safety problems were still a regular occurrence at the facilities. As a result, numerous programs were delayed by many months and costs for some nuclear weapon efforts increased by 50%.

Finally, in December 2017, the Department of Energy’s Inspector General released a report that confirmed numerous deficiencies related to the cost savings approach used to award the management contract of Y-12 and Pantex.

The same report noted that the NNSA agreed to eliminate $360 million of the required savings after Consolidated Nuclear Security, LLC asked to be forgiven for over $400 million. The administration also made the remaining savings a “discretionary” issue in annual evaluations.

Because changes to the original contract were made two months before the Department of Energy’s Inspector General report was released, the analysis did not account for these deviations. Additional auditing is required to better understand the impact of the revised contract terms.

However, the NNSA’s decision to change the contract terms of the cost savings program is noteworthy. This demonstrates that pressure to cut overhead costs at Y-12 and Pantex sacrificed the nuclear deterrent’s safety and credibility.

While it is a good sign that the NNSA realizes the cost savings approach is compromising the nuclear deterrent, the agency would be wise to hear from other qualified contractor teams about how they would manage these production sites in concert with the Nuclear Posture Review.

To perhaps remedy the negative effects of the cost savings approach, the contract for Y-12 and Pantex should be recompeted. This will allow applicants to submit proposals that value the nuclear deterrent mission over cost savings and fairly compete for the management work based on the same standards. Product quality and expertise should be the most important factors when deciding the best manager for Y-12 and Pantex, not how much costs can be eliminated.

The credibility of the nuclear deterrent is at risk without robust capability at the production plants to preserve a safe and reliable nuclear deterrent. This mission keeps Americans and allies safe from nuclear aggression and should not be placed in jeopardy.

Constance Douris is Vice President of the Lexington Institute. Her current research interests include energy, the electric grid, ballistic-missile defense, nuclear strategy, European security, and the Greek financial crisis. You can follow Constance at @CVDouris and the Lexington Institute @LextNextDC.