Ground Combat Forces: The Marine Corps Should Take Actions to Track Training Funds and Link Them to Readiness

Training is key to building readiness—the military's ability to fight and meet the demands of its missions. Through the Department of Defense (DOD) budget cycle, the Marine Corps estimates or programs its funding needs for training and spends funds to accomplish its training mission. Questions have been raised about whether the Marine Corps' training budget estimates are sufficiently detailed to determine training costs at the unit level or the expected readiness generated by those costs.

House Report 115-200 included a provision for GAO to examine the military services' budgeting processes to build unit-level training readiness. This report examines the extent to which the Marine Corps (1) tracks unit-level training funds for ground combat forces through the budget cycle, and (2) links ground combat forces' unit-level training funds to readiness. GAO analyzed budget data and studies conducted by the Marine Corps and others, examined tools used by units to link training funds with readiness, and interviewed knowledgeable officials at various levels in the Marine Corps.

The Marine Corps cannot fully track all unit-level training funds for ground combat forces through the budget cycle. According to GAO's analysis of data provided by the Marine Expeditionary Forces (MEFs), the principal warfighting organization for the Marine Corps, units can track some, but not all, funds for training exercises from the budget request through use of the funds. The Marine Corps cannot fully track all training funds through the budget cycle, in part, because it has not established the consistent use of fiscal codes. Two key fiscal codes that officials identified as relevant to track funds for unit-level training are the Marine Corps Programming Code (MCPC) and the Special Interest Code (SIC). The Marine Corps uses MCPCs to program funds, but GAO found that when the Marine Corps spends those funds, it uses a different set of fiscal codes. This makes it difficult to link the programmed intent of funds to the execution of those funds. The Marine Corps uses SICs to track funds associated with training exercises, but GAO found that units do not use SICs consistently. For example, officials at all three MEFs told GAO that units generate SICs for large-scale training exercises, but may not do so for small-scale exercises. The Marine Corps is taking steps to align fiscal codes across the budget cycle, but this effort is in its early stages and will not include MCPCs, and may not address the inconsistent use of SICs. Without the ability to track unit-level training funds through the budget cycle, the Marine Corps lacks readily available data to assess whether funds were obligated consistent with their programmed intent and to adequately forecast and defend budget requests for training.

Although internal Marine Corps assessments and guidance state that the Marine Corps needs an enterprise-wide process to link resources to readiness, the Marine Corps has made little progress establishing a link between training funds for ground combat forces and readiness. The Marine Corps identified challenges with linking funds to readiness in a series of reports from fiscal years 2009 through 2014, citing factors such as stove-piped efforts and limited data availability and quality. Guidance directed that the Deputy Commandant for Programs and Resources organize quality coordination events with key stakeholders to synchronize activities within major lines of effort, but officials from this office stated that they have not been given the authority to direct the various efforts. Therefore, challenges have persisted, in part, because the Marine Corps has not designated a single entity with authority to oversee and coordinate efforts to link training funds to readiness. In the absence of a single oversight entity, two separate and overlapping tools were developed—the Cost to Run a MEF (C2RAM) tool and the Predictive Readiness Model (PRM). Although each tool had its own particular use and design, both were intended to link resources to readiness. Moreover, both faced similar challenges, such as data quality limitations, and relied on some of the same data sources. The Marine Corps recently assessed and discontinued development of PRM, however, it has not assessed C2RAM and how it could support an enterprise wide performance management process linking resources to readiness. Without dedicating a single entity with authority, and conducting an assessment of C2RAM, the Marine Corps is unlikely to make headway in addressing the challenges posed by trying to link resources to readiness.

GAO recommends that the Marine Corps (1) tracks training funds through the budget cycle, (2) designates a single entity to oversee establishment of a process that links resources to readiness, and (3) conducts an assessment of C2RAM. DOD concurred, and based on its comments, GAO modified one recommendation.

Training is key to building mission readiness—the military’s ability to fight  and meet the demands of assigned missions. To build readiness, the  Marine Corps uses funds from its Operation and Maintenance (O&M)  account to pay for training and education requirements for active Marine  Corps forces, among other items. To develop its budget requests and  allocate resources to provide capabilities necessary to accomplish its  missions, the Marine Corps follows the Planning, Programming,  Budgeting, and Execution process, which we refer to as the budget cycle,  for purposes of this report. In fiscal year 2017, the Marine Corps  obligated approximately $1.4 billion for its operational forces to be able to  rapidly deploy ready forces in support of combatant commanders. In  testimony before Congress in 2017, the Commandant of the Marine  Corps stated that the instability of and the level of funding available  adversely impacted readiness. However, the House Armed Services  Committee reported that the Marine Corps’ budget estimates for training  are not sufficiently detailed to determine training costs at the unit level or  the amount of readiness expected to be generated by those costs.

A House report accompanying a bill for the National Defense  Authorization Act for Fiscal Year 2018 contained a provision for us to  examine the military services’ budgeting processes to build unit-level  training readiness and their processes for evaluating the amount of  readiness generated from unit-level training costs. In this report, we  focus on the Marine Corps. Specifically, we examined the extent to which  the Marine Corps (1) tracks unit-level O&M training funds for ground  combat forces through the budget cycle; and (2) links unit-level training  funds for ground combat forces to readiness.

For objective one, we analyzed fiscal year 2017 budget data collected  from the Marine Expeditionary Forces (MEFs). We collected data for this  fiscal year because it was the most recently completed fiscal year for  which actual obligated amounts could be obtained. We discussed the  systems used to provide these data with knowledgeable Marine Corps  officials. We determined that the data were sufficiently reliable to assess  the availability of fiscal year 2017 funding for unit-level training exercises;  however, we identified issues with tracking unit-level O&M training fund  data, as discussed later in this report. Further, we reviewed a series of  reports issued by the Marine Corps from fiscal years 2009 through 2014,  which evaluated the health of the Marine Corps, including its use of fiscal  codes, through an enterprise-wide study of resource investments,  organizational activities, and readiness outcomes. In addition, we  reviewed documents and interviewed knowledgeable officials at Marine  Corps headquarters, major command, and various unit levels, including  MEF, division, and regiment, about the Marine Corps’ annual O&M  budget process for ground combat forces. This report focuses on ground  combat forces, which conduct a myriad of training exercises at the MEFs.

For objective two, we reviewed reports and other documentation about  Marine Corps efforts to evaluate readiness levels achieved from O&M  obligations for training for ground combat forces. We also were briefed on  and observed the operation of systems used to track training funds and  readiness at Marine Forces Command, I MEF, II MEF, and III MEF. This  observation enhanced our understanding of the efforts taken by the  Marine Corps to link training funds to readiness. Further, we reviewed  documents and interviewed knowledgeable officials at Marine Corps  headquarters, major command, and unit levels about the Marine Corps’  efforts to evaluate the readiness levels achieved from O&M training funds  for ground combat forces. We assessed this information against Marine  Corps Order 5230.23, Performance Management Planning, which calls  for the development and implementation of an enterprise-wide  performance management process that links resources to institutional  readiness via a robust analytic framework, as well as Standards for  Internal Control in the Federal Government, which states that  management should establish an organizational structure, assign  responsibility, and delegate authority to achieve its objective. Further  details on our scope and methodology can be found in appendix I.

We conducted this performance audit from August 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.

The Marine Corps, within the Department of the Navy, organizes itself  into different Marine Air Ground Task Forces. Each Marine Air Ground  Task Force consists of a command element that includes a ground  combat element, air combat element, and logistics combat element that  can conduct operations across a broad range of crisis and conflict  situations. As shown in figure 1, there are four types of Marine Air Ground  Task Forces: Marine Expeditionary Forces (MEFs), Marine Expeditionary  Brigades, Marine Expeditionary Units, and Special Purpose Marine Air  Ground Task Forces. The MEF is the principal warfighting organization  for the Marine Corps and consists of one or more divisions, including  subordinate units such as regiments and battalions. There are three  MEFs in the active component of the Marine Corps: I MEF—Camp  Pendleton, California; II MEF—Camp Lejeune, North Carolina; and III  MEF—Okinawa, Japan.

Headquarters Marine Corps consists of the Commandant of the Marine  Corps (Commandant) and the staff organizations, which are responsible  for advising and assisting the Commandant to carry out duties. For  example, the Deputy Commandant for Programs and Resources is  responsible for developing, defending, and overseeing the Marine Corps’  financial requirements and the Deputy Commandant for Plans, Policies,  and Operations is responsible for establishing policy, procedures,  training, and guidance on unit readiness reporting.

Marine Corps units train to their core missions—the fundamental missions  a unit is organized or designed to perform—and their assigned  missions—those missions which an organization or unit is tasked to carry  out. Units train to a list of Mission Essential Tasks that are assigned  based on the unit’s required operational capabilities and projected  operational environments. For example, the Mission Essential Tasks for  a Marine Corps infantry battalion include amphibious operations,  offensive operations, defensive operations, and stability operations.  Marine Corps Training and Readiness manuals describe the training  events, frequency of training required to sustain skills, and the conditions and standards that a unit must accomplish to be certified in a Mission  Essential Task.

Unit commanders are responsible for their units’ readiness, including  assessing and reporting their units’ capabilities to accomplish Mission  Essential Tasks to specified conditions and standards. Unit readiness  assessments are tracked in the Defense Readiness Reporting System– Marine Corps. This information provides Marine Forces Command,  Headquarters Marine Corps, the Office of the Secretary of Defense, Joint  Staff, and Combatant Commands, among others, a means to assess  ground combat forces’ readiness trends and to assist with strategic and  operational planning.

The Marine Corps’ O&M budget funds a wide range of activities, including  the recruiting, organizing, training, sustaining, and equipping of the  service. The Department of Defense (DOD) uses the Planning,  Programming, Budgeting, and Execution (PPBE) process to allocate  resources to provide capabilities necessary to accomplish the  department’s missions. In this report, we refer to the PPBE process as  the budget cycle. The budget cycle includes the following phases:

The planning phase of the budget cycle examines the military role and  defense posture of the United States and DOD in the world  environment and considers enduring national security objectives, as  well as the need for efficient management of defense resources.

The programming phase of the budget cycle involves developing  proposed programs consistent with planning, programming, and fiscal  guidance, reflecting, among other things, the effective allocation of  resources.

The budgeting phase of the budget cycle refers to developing and  submitting detailed budget estimates for programs.

The execution phase of the budget cycle involves spending funds.

The Marine Corps’ Office of Programs and Resources has multiple  divisions that support Program Objective Memorandum (POM)  development, strategy, independent analysis, budget justification and  legislative coordination, among others. Two key divisions that have  responsibilities regarding Marine Corps resources are:

The Budget and Execution Division is responsible for leading  development and submission of the POM, providing quality control  over programmatic and financial data, and allocating funds to major  commands. According to a Marine Corps official, the division also  assists with defending the Marine Corps’ budget request to Congress  and others.

The Program Analysis and Evaluation Division is responsible for  providing Marine Corps senior leaders with independent and objective  analysis to inform resource allocation decisions and assessing  institutional risk.

The Program Budget Information System (PBIS) is the primary  information system used by the Navy and Marine Corps in the  programming and budgeting phases of the budget cycle to develop and  submit financial plans (i.e., the POM and the budget) to the Office of the  Secretary of Defense. Once appropriated, funds are passed via allocation  and allotment to subordinate units and executed via the Standard  Accounting, Budgeting, and Reporting System (SABRS). SABRS is  used to (1) record and report financial information; (2) provide an  accounting and reporting system for the execution of appropriations; and  (3) record financial transactions that originate from source systems.

The Marine Corps Cannot Fully Track All Unit-Level Training Funds for Ground Combat Forces through the Budget Cycle

Our analysis of data from the three MEFs for fiscal year 2017 funds  shows that the MEFs had some data available that could be used to track  some training funds from budget request to obligation. According to the  Marine Corps’ Financial Guidebook for Commanders, as part of the  budget cycle, commanders should determine the cost involved in meeting  requirements, among other things. To help develop a sound budget,  commanders need to know what they were and were not able to  accomplish as a result of funding in previous years. However, Marine  Corps officials told us they faced limitations tracking training funds, as  discussed below. Specifically, as shown in table 1, we found that I MEF  and II MEF were able to provide data on their fiscal year 2017 budget  request, allotment, and obligations for training exercises directed at the  MEF and division level, but data on exercises at smaller unit levels, such  as regiments and battalions, were not consistently available because  officials at those levels do not always track funds for these exercises. We  found that III MEF was able to provide obligations data for fiscal year  2017 training exercises at all unit levels, but was not able to provide data  on funds requested and allotted by training exercise. Officials at III MEF  stated that these data were not available because III MEF incurs several  large one-time expenses that contribute to training, but allocating those  costs across specific training exercises is difficult.

One of the primary reasons that the Marine Corps cannot fully track all  training funds through the budget cycle is that the Office of Programs and  Resources has not established the consistent use of fiscal codes to  provide greater detail about the use of funds across the budget cycle  phases, and the accuracy of these fiscal codes is sometimes  questionable. The Marine Corps uses a variety of fiscal codes to track  funds in the programming and execution phases of the budget cycle in  the PBIS and SABRS systems, respectively. Some of these codes are  used across DOD, while others are specific to the Marine Corps. Two key  fiscal codes that officials identified as relevant to efforts to track funds for  unit-level training are the Marine Corps Programming Code (MCPC) and  the Special Interest Code (SIC). However, we identified limitations with  how these fiscal codes are applied, as detailed below.

MCPCs are used to program funds for intended use, but are not  clearly linked to executed funds. When the Marine Corps programs  funds for intended use, it uses MCPCs to identify the funds; however,  when it executes those funds, it uses a different set of fiscal codes to  identify them. As a result, the Marine Corps cannot link the  programmed intent of the funds to the execution of the funds, making  it difficult to track funds through the budget cycle. In fiscal years 2011,  2012, and 2013, the Marine Corps found in a series of reports that it  faced challenges tracking funds through the budget cycle, in part  because MCPCs were used to program funds, but not to track them in  the execution phase. According to the fiscal year 2012 report, such  tracking would enable the Marine Corps to improve financial  traceability and add consistently reliable program execution data that  would promote an understanding of the current fiscal environment to  Marine Corps financial managers, comptrollers and others.

In 2014, the Marine Corps implemented a process to include MCPCs  in the execution phase of the budget cycle. The process enabled  SABRS to automatically generate MCPCs for executed funds, based  on the fiscal codes already used in the execution phase of the budget  cycle. According to officials in the Office of Programs and Resources,  this process increased the amount of executed funding that could be  linked to an MCPC. However, Marine Corps officials told us that the  mapping of MCPCs used in the programming phase to those used in  the execution phase were not cleanly aligned, causing uncertainty  about their linkage. The MCPCs associated with executed funds are  estimates based on subject matter expert and working group mapping  of fiscal codes to an MCPC and require continuous manual validation  to ensure their accuracy. Additionally, the data quality of the multiple  execution fiscal codes that are used to generate MCPCs is  questionable because the data quality of the various underlying  systems that feed data into SABRS is poor, according to officials in  the Office of Programs and Resources. Senior Marine Corps officials  from the Office of Programs and Resources told us that due to these  limitations, analysts cannot be certain that executed funds associated  with an MCPC as reflected in SABRS correspond to the purpose for  which the funds associated with the same MCPC were programmed  in the Program Budget Information System. This limits the Marine  Corps’ ability to assess the extent to which funds were executed  consistent with their programmed intent and track funds through the  budget cycle.

SICs are not used consistently across units. The Marine Corps uses  SICs to track funds associated with individual training exercises.  However, units, including the MEF and its subordinate units, do not  consistently use SICs in identifying funds associated with all training  exercises. Specifically, officials at all three MEFs told us that units  generate SICs for large-scale training exercises directed at the MEF  or division level, but may not generate SICs to track expenses for  small-scale exercises at lower unit levels such as the regiment and  battalion, making it difficult to track those funds. Officials at I MEF and II MEF stated that tracking costs associated with small-scale  exercises is less consistent because units are not required to use  SICs to track funds associated with exercises at those levels, and  SICs associated with each exercise may change from year to year.  Further, officials at I MEF and II MEF stated that supply officers are  responsible for financial management at units below the division level,  and they may not prioritize use of SICs. Officials at III MEF stated that  tracking costs associated with specific exercises was difficult because  officials could not attribute several large one-time training expenses to  specific training exercises. Officials at all three MEFs stated that there  is currently no systematic way to ensure that SICs are used  accurately to associate funds executed with training exercises, which  means they do not have complete or consistent data on costs  associated with individual training exercises. As a result, commanders  may lack accurate data for making resource decisions about training  exercises needed to complete Mission Essential Tasks and improve  units’ training readiness.

In 2014, the Marine Corps issued Marine Corps Order 5230.23,  Performance Management Planning, with the mission of linking resources  to readiness and requiring the Deputy Commandant for the Office of  Programs and Resources to ensure visibility and traceability of funds  through the budget cycle and accounting systems for all organizational  units and programs.

Officials in the Office of Programs and Resources cited one effort to align  inconsistent fiscal codes, but this effort will not directly address the  challenges we have identified. According to officials in the Office of  Programs and Resources, the Marine Corps is currently conducting a  fiscal code alignment effort to address inconsistent use of fiscal codes,  but this effort is in its early stages, and the Marine Corps has not yet  developed clear guidance for implementation of the effort. Further, while  the Marine Corps uses a variety of fiscal codes to track funds in the  programming and execution phases of the budget cycle, an official from  the Budget and Execution division told us that this effort will focus on  fiscal codes that are used across DOD due to manpower limitations.  However, MCPCs are unique to the Marine Corps and not recognized in  larger DOD budgeting systems. As a result, the fiscal code alignment  effort will not include aligning MCPCs across the programming and  execution phases of the budget cycle, even though the Marine Corps will  continue to use MCPCs. Additionally, although an official told us that SIC  codes will be a part of this effort, implementation guidance for the effort  was still under development and as a result, it is unclear whether the  effort will address the inconsistent use of SICs across unit-level training  exercises. Without the ability to track unit-level training funds through the  budget cycle, including aligning MCPCs and ensuring consistent use of  SIC codes, the Marine Corps lacks data to assess the extent to which  funds were obligated consistent with their programmed intent and to  adequately forecast and defend budget requests for training. As a result,  commanders may face challenges making informed resource decisions.

The Marine Corps Has Made Limited Progress Establishing a Link between Training Funds for Ground Combat Forces and Readiness

The Marine Corps Identified a Need to Link Training Funds to Readiness, but Did Not Designate Responsibility to Meet That Need

Although internal Marine Corps assessments and guidance state that the  Marine Corps needs an enterprise-wide process to link resources to  readiness, the Marine Corps has made little progress fulfilling this need.  The Marine Corps has been aware for years of the challenges it faces in  explaining its resource needs in its budget estimates to Congress. As  stated in its 2009 Financial Guidebook for Commanders, “Many of the  congressional cuts the Marine Corps receives are because of an inability  to explain why we spent the money the way we did.” From fiscal years  2009 through 2014, the Marine Corps Office of Programs and Resources  issued a series of classified and unclassified reports—referred to as the  Marine Corps Strategic Health Assessments—that evaluated the health of  the Marine Corps. The reports cited a number of factors inhibiting the  Marine Corps’ ability to link funding to readiness, including stove-piped  efforts, lack of an analytical framework, limited data availability, and poor  data quality. For example, the fiscal year 2013 and 2014 reports found  that the lack of a comprehensive model to connect the output of  institutional processes to readiness measures hindered the Marine Corps’  ability to link funding to readiness. Table 2 below summarizes some of  the key related findings in the reports.

In fiscal year 2014, the Marine Corps stopped issuing the Marine Corps  Strategic Health Assessments, in part, because the person responsible  for preparing the analyses moved to another position. A senior Marine  Corps official also told us that the reports were discontinued because  producing them was no longer a priority for Marine Corps leadership.  However, the Marine Corps also issued guidance in August 2014 calling  for an enterprise-wide effort to link institutional resources to readiness.  Specifically, Marine Corps Order 5230.23 called for the development and  implementation of an enterprise-wide performance management process  that links resources to institutional readiness via a robust analytic  framework. The order included requirements to, among other things,  identify readiness goals, develop strategic performance indicators, and  improve data and business processes to include ensuring the visibility  and traceability of funds.

While implementing this order could address a number of the findings in  the Marine Corps Strategic Health Assessments, Marine Corps officials  told us that the service had not prioritized implementation of this order.  Specifically, the Marine Corps did not designate a single oversight entity  with the authority to enforce the order and directly oversee and coordinate  efforts to link training funds to readiness. For example, although the order  directed the Deputy Commandant for Programs and Resources to  organize a quarterly coordination event of key stakeholders to synchronize activities within each major line of effort, officials from this  office told us that they have not been given the authority to direct the  various efforts. As a result, problems identified in the Marine Corps  Strategic Health Assessments have persisted, and the Marine Corps  does not have a comprehensive model to connect the output of  institutional processes to readiness measures, as called for in the fiscal  year 2013 Marine Corps Strategic Health Assessment.

According to Standards for Internal Control in the Federal Government,  management should establish an organizational structure, assign  responsibility, and delegate authority to achieve its objective. Marine  Corps officials told us the benefits of having a single entity to oversee  efforts to tie funds to readiness include having one authority responsible  for ensuring a consistent data architecture—how data will be collected,  stored and transferred across the Marine Corps—and data quality.  Further, having a single entity would help ensure a unified approach that  would help analysts better answer questions about how funds affect  readiness.

Marine Corps Has Not Assessed Its Current Initiative to Link Dollars to Readiness

In the absence of a single entity responsible for overseeing the Marine  Corps’ efforts to link training funds to readiness, two different  organizations within the Marine Corps developed separate and  overlapping initiatives. First, in 2012, the Commanding General of II MEF  directed the development of C2RAM, a tool that attempts to link funding  to readiness for ground combat forces by capturing and correlating  resources and requirements associated with specific unit-level training  exercises. C2RAM was developed in response to our recommendation  that the Marine Corps develop results-oriented performance metrics that  can be used to evaluate the effectiveness of its training management  initiatives. The tool, a complex excel-based spreadsheet, is used to  capture day-to-day operating costs for training exercises to meet a unit’s  core and assigned Mission Essential Tasks for training readiness  requirements. For example, unit operations and resource officials enter  data on training exercise costs and the Mission Essential Tasks expected to be accomplished by each exercise, and the tool uses this data to  project the unit’s expected training readiness levels. Further,  commanders can use the tool to project the expected effect of decreases  in funding on training readiness levels. According to Marine Corps  officials, they spent approximately $11 million on the C2RAM initiative  from fiscal years 2012 through 2017.

Second, in 2015, the Headquarters Marine Corps Office of Programs and  Resources adopted and made adjustments for Marine Corps purposes to  the Air Force’s Predictive Readiness Assessment system and test-piloted  it with Marine Corps units. The Marine Corps’ system was known as the  Predictive Readiness Model (PRM). PRM was designed to evaluate the  complex interactions between resources and readiness to help inform  decisions about resource allocations and readiness outcomes. According  to Headquarters Marine Corps officials, PRM attempted to map  approximately 500 causal factors related to readiness ratings. The effort  involved input from more than 70 subject matter experts from multiple  Marine Corps organizations. In addition, data input into PRM was  obtained from various authoritative sources, including readiness,  financial, and training systems of record, as well as other unauthoritative  sources, including C2RAM. According to Marine Corps officials, as of  June 2018, the Corps had spent approximately $4 million to develop  PRM. In March 2019, while responding to a draft of this report, the Marine  Corps stated that it decided to discontinue development of PRM because  the model did not meet its objectives.

While these initiatives were both designed to help the Marine Corps link  dollars to readiness, each had its own particular use and design. For  example, unlike C2RAM, which focuses only on the training pillar of  readiness for ground combat forces, PRM focused on all pillars of  readiness tracked by the Marine Corps for ground combat forces and air  combat forces. In addition, while PRM attempted to capture all training  data, C2RAM does not. For example, it does not capture data on  individual training. Moreover, while C2RAM is primarily used at the MEF  level and below to help inform commanders’ decisions about how much  training funding to request and identify the effect of funding on readiness,  PRM was designed to help officials in Marine Corps Headquarters make  service-wide decisions about budget development and resource  allocation.

During our review, we found data quality and classification challenges  faced by both PRM and C2RAM, as discussed below.

Data quality limitations. Some Headquarters Marine Corps officials  questioned the accuracy and reliability of some of the data planned for  use in PRM because the data had to be aggregated from multiple  sources that have varying degrees of internal control. In addition,  officials told us that existing data were insufficient or are not currently  collected, so, in some cases, PRM had to rely on the opinion of  subject matter experts to determine how causal factors affect  readiness. According to Marine Corps officials at various levels,  C2RAM data quality is questionable because data is manually input  by various sources with varying degrees of expertise. This is  exacerbated by weak processes for conducting quality checks of the  data. Moreover, officials stated that cost data may be inaccurate  because units may neglect to update cost estimates with actual costs  after a training event is completed. Further, C2RAM is not  consistently used across all three MEFs. For example, when we  visited II MEF, we learned that their resource management officials do  not use C2RAM to build their budgets because of concerns about  data quality.

Classification of Data. Another challenge that both efforts faced is  the classification of aggregated data. Readiness data are classified;  budget data are generally not. When these data are combined, the  resulting data are classified, potentially making the tool less useful  and available to officials seeking to make informed decisions about  resource allocation. For example, C2RAM is currently an unclassified  system that captures fiscal and training data, but not readiness data.  However, officials at I Marine Expeditionary Force told us that if  readiness data were incorporated into the tool, it could become  classified, which would limit its availability and usefulness to lower unit  levels.

As the Marine Corps found in its Fiscal Year 2012 Strategic Health  Assessment, its stove-piped processes often require integration at the  senior leadership level to develop a comprehensive view of issues,  including the effect of dollars on readiness. Development of C2RAM and  PRM, however, was not integrated, resulting in two separate systems— each devoted to tackling the same problem, but in different ways and with  similar weaknesses, such as data quality limitations. Moreover, there was  some overlap between the two systems. For example, C2RAM was one  of the many data sources for PRM. In addition, both PRM and C2RAM  used some of the same data sources. For instance, both systems relied  on information captured in the Marine Corps Training Information  Management System as well as on data captured in SABRS.

The Marine Corps assessed the feasibility of moving forward with the  PRM tool and, in March 2019, while responding to a draft of this report,  the Marine Corps stated that they decided to discontinue its development.  However, the Marine Corps has not assessed C2RAM as part of an  enterprise wide performance management process that links resources to  readiness. For example, the Marine Corps could learn from the  experience of commanders at the MEF level who find C2RAM useful and  consider the extent to which those usability considerations could and  should be brought into a service-wide model. Without conducting this  analysis, the Marine Corps is unlikely to make headway in tackling the  challenges posed by trying to link resources to readiness.

To meet the demands of its missions, the future security environment will  require military forces to train across the full range of military operations,  according to DOD. While the Marine Corps continues to ask for increased  funding, according to a congressional report, the Marine Corps is unable  to provide sufficient detail in its O&M budget estimates for training that  would allow Congress to determine the benefits gained from additional  funding. The Marine Corps has been aware for many years of the  importance of providing accurate budget justifications to Congress. A  number of factors have made it challenging for the Marine Corps to  provide Congress the information it needs. First, the Marine Corps cannot  fully track training funds through the budget cycle, making it difficult for  the Marine Corps to, among other things, show that training funds were  spent as planned. Second, the Marine Corps has not prioritized tackling  the longstanding problem of how to link training resources to readiness.  Although the Marine Corps has a standing order to develop an enterprise- wide performance management framework that links resources to  readiness via a robust analytical framework, no single entity has been  assigned the authority to enforce this order. In the absence of that  leadership, certain components of the Marine Corps have developed their  own, independent initiatives that were designed to achieve the same  objective of linking funding to readiness, but had their own specific  approaches and intended uses. Moreover, the Marine Corps has not  assessed whether C2RAM provides an enterprise-wide performance  management process linking resources to readiness. Until the Marine  Corps assigns the authority needed to oversee development and  implementation of a methodologically sound approach and assesses the  degree to which C2RAM could be used, it will continue to face challenges  making fully informed decisions about how much money it needs for  training purposes and what it can reasonably expect to deliver for that  money in terms of readiness gains.

We are making the following three recommendations:  The Secretary of the Navy should ensure that the Deputy Commandant  for the Office of Programs and Resources oversee development and  implementation of an approach to enable tracking of unit-level training  funds through the budget cycle. This approach should include aligning  MCPCs across the Marine Corps and ensuring consistent use of SIC  codes. (Recommendation 1)

The Secretary of the Navy should ensure that the Commandant of the  Marine Corps designates a single entity responsible for directing,  overseeing, and coordinating efforts to achieve the objective of  establishing an enterprise-wide performance management process that  links resources to readiness. (Recommendation 2)

The Secretary of the Navy should ensure that the Commandant of the  Marine Corps assesses C2RAM to determine the extent to which this  system, or elements of this system, should be adapted for use in an  enterprise-wide performance management process linking resources to  readiness. (Recommendation 3)

We provided a draft of this report to DOD for review and comment. In  written comments, DOD concurred with all three of the recommendations  in the draft report and stated that the Marine Corps would take actions to  track unit-level training funds, link resources to readiness, and examine  C2RAM, as discussed below. DOD’s comments are reprinted in appendix  II. DOD also provided technical comments, which we incorporated as  appropriate.

DOD concurred with the third recommendation in the draft report that the  Secretary of the Navy should ensure that the Commandant of the Marine  Corps assesses C2RAM and PRM and determine the extent to which  these systems or elements of these systems could and should be  adapted for use in the enterprise-wide performance management process  linking resources to readiness. In its comments, the Marine Corps stated  that work to develop PRM had been discontinued because the model did  not satisfy the Marine Corps objectives. Given that the Marine Corps’  decision to stop development of PRM mitigates the potential for  overlapping initiatives moving forward, we revised the report and  recommendation to focus on the Marine Corps assessing C2RAM for use  in the enterprise-wide performance management process linking  resources to readiness. The Marine Corps stated in its written response  that C2RAM has potential utility for supporting an understanding of  resources to readiness and it will examine the system further.

We are sending copies of this report to the appropriate congressional  committees, the Acting Secretary of Defense, the Secretary of the Navy,  and the Commandant of the Marine Corps. In addition, the report is  available at no charge on our website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2775 or FieldE1@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 III.

Appendix I: Objectives, Scope, and Methodology

This report evaluates the extent to which the Marine Corps (1) tracks unit- level Operations and Maintenance (O&M) training funds for ground  combat forces through the budget cycle; and (2) links unit-level training  funds for ground combat forces to readiness. This report focuses on  ground combat forces which conduct a myriad of training at the Marine  Expeditionary Forces (MEF).

For our first objective, we requested and analyzed budget request,  allocation, and obligations training exercise data for fiscal year 2017 from  I Marine Expeditionary Force (MEF), II MEF, and III MEF. We collected  data for this fiscal year because it was the most recently completed fiscal  year for which actual obligated amounts could be obtained. We used this  data request to determine the Marine Corps’ ability to provide the data as  well as determine the source or sources they used to provide the data.  We discussed the systems—Cost to Run a Marine Expeditionary Force  (C2RAM) and Standard Accounting, Reporting, and Budgeting System  (SABRS)—used to provide this data with knowledgeable Marine Corps  officials, including discussion of the data reliability concerns with these  systems which are identified in this report. We interviewed knowledgeable  officials about the systems, reviewed the user guide for one of the  systems, and observed how data was input and extracted to form reports.  Although we found the data to be insufficient to consistently identify and  fully track unit-level O&M training funding data though the budget cycle,  we determined that the data we obtained were sufficiently reliable to  provide information about the availability of fiscal year 2017 funding  amounts requested, allotted, and obligated for unit-level training  exercises, as discussed in this report.

We also reviewed and analyzed data from a series of classified and  unclassified reports that were issued by the Marine Corps from fiscal year  2009 through fiscal year 2014. These reports, known as the Marine Corps  Strategic Health Assessment (MCSHA), evaluated the health of the  Marine Corps, including its use of fiscal codes, through an enterprise- wide study of resource investments, organizational activities, and  readiness outcomes. We also reviewed data about Marine Corps  Programming Codes (MCPC) and Special Interest Codes (SIC) in Marine  Corps documents such as the MCSHAs as well as the Standard  Accounting, Budgeting, and Reporting System (SABRS) Customer  Handbook. We assessed this information against Marine Corps Order  5230.23, Performance Management Planning, which requires the Deputy  Commandant for Programs and Resources to ensure visibility and  traceability of funds through the budget cycle and accounting systems for  all organizational units and programs, as well as Standards for Internal  Control in the Federal Government, which states that management  should design an entity’s information system to ensure, among other  things, that data is readily available to users when needed.

For our second objective, we reviewed reports and supporting  documentation on Marine Corps efforts to evaluate readiness levels  achieved from O&M obligations for ground combat forces training and  observed the operation of systems used to track training funds and  readiness. Specifically, we reviewed and analyzed the MCSHAs to  identify challenges that the Marine Corps reported facing in attempting to  link training funds to readiness. As a part of our review of supporting  documentation, we reviewed and analyzed the MCSHAs from fiscal years  2011 through 2014 issued by the Marine Corps Office of Program  Analysis and Evaluation to summarize some of the key findings identified  by the Marine Corps related to linking training funds to readiness. We  reviewed these reports because they intended to provide a  comprehensive overview of the health of the Marine Corps. From these  reports, we identified and summarized key findings related to our review.  Specifically, one GAO analyst reviewed the four reports to identify  reported findings that prevent the Marine Corps from linking resources to  readiness, such as stove-piped processes and inconsistent data  management processes, while a second analyst confirmed the summary  from this review. We shared our summary of key findings with Marine  Corps officials and they concurred.

In addition, we reviewed guidance and other related documents on the  Predictive Readiness Model (PRM) and Cost to Run a Marine  Expeditionary Force (C2RAM). We were briefed on and observed data  being input into the C2RAM model and queries being run from that data.  We were able observe the summary reports that resulted from the queries  which helped to enhance our understanding of the Marine Corps efforts to  link training funds to readiness. In addition, we reviewed previously  issued GAO reports related to the issue. We assessed this information  against Marine Corps Order 5230.23, Performance Management  Planning, which calls for the development and implementation of an  enterprise-wide performance management process that links resources to  institutional readiness via a robust analytic framework, as well as  Standards for Internal Control in the Federal Government, which states  that management should establish an organizational structure, assign  responsibility, and delegate authority to achieve its objective.

To answer the two objectives for this review, we interviewed  knowledgeable officials from the following offices:

Personnel and Readiness, Force Readiness

Headquarters Marine Corps, Washington, D.C.

Program Analysis and Evaluation Division

Command, Control, Communications, and Computers

Marine Forces Command – Norfolk, Virginia

Marine Corps Training and Education Command – Quantico, Virginia  I Marine Expeditionary Force – Camp Pendleton, California  II Marine Expeditionary Force – Camp Lejeune, North Carolina  III Marine Expeditionary Force – Okinawa, Japan.

Appendix II: Comments from the Department of Defense

Appendix III: GAO Contact and Staff Acknowledgments

In addition to the contact name above, Margaret Best, Assistant Director;  William J. Cordrey; Pamela Davidson; Angela Kaylor; Amie Lesser;  Tamiya Lunsford; Samuel Moore, III; Shahrzad Nikoo; Clarice Ransom;  Cary Russell; Matthew Ullengren; and Sonja Ware made key  contributions to this report.

The Marine Corps continues to request more money to train its forces on day-to-day operations and to prepare them for rapid deployment. However, a congressional report said that the Corps' budget estimates haven't included sufficient detail for Congress to determine what benefits more funding would bring.

We found that the Marine Corps can't fully track training funds or link them to mission readiness—its ability to fight and meet its assigned missions.

We recommended that the Marine Corps better align its efforts to track funds through the budget cycle and designate an entity to oversee a process that links dollars to readiness.

Marine Corps Ground Combat Forces Training


Nuclear Weapons: NNSA Has Taken Steps to Prepare to Restart a Program to Replace the W78 Warhead Capability

The Department of Defense and NNSA have sought for nearly a decade to replace the capabilities of the aging W78 nuclear warhead used by the U.S. Air Force. NNSA undertakes LEPs to refurbish or replace the capabilities of nuclear weapons components. In fiscal year 2014, NNSA was directed to suspend a program that was evaluating a capability that could replace the W78 and also be used by the U.S. Navy. NNSA's most recent estimate—reported in October 2018—was that the combined program would cost about $10 billion to $15 billion. NNSA has been directed by the 2018 Nuclear Posture Review to restart a program to replace the W78 for the Air Force in fiscal year 2019. The 2018 Nuclear Posture Review also directed NNSA and the Navy to further evaluate whether the Navy could also use the warhead.

Senate report 115-125 included a provision for GAO to review NNSA's progress on the program to replace the W78.

GAO's report describes NNSA's steps in key early planning areas—including program management, technology assessment, and coordination with facilities and capabilities—to prepare to restart a program to replace the W78. GAO reviewed documentation on areas such as program management, technologies, and facilities needed for the program, and interviewed NNSA and DOD officials.

The Department of Energy's National Nuclear Security Administration (NNSA) has taken steps to prepare to restart a life extension program (LEP) to replace the capabilities of the Air Force's W78 nuclear warhead—a program which was previously suspended. According to NNSA officials, these steps are typically needed to conduct any LEP. Therefore, they can be undertaken despite the current uncertainty about whether the final program will develop the warhead for the Air Force only or for both the Air Force and the Navy. Specifically, NNSA has taken the steps described below:

Program management. NNSA has begun to establish the program management functions needed to execute a W78 replacement program, as required by NNSA's program execution instruction. For example, NNSA has started to develop a risk management plan to define the process for identifying and mitigating risks. In addition, NNSA has created a preliminary schedule to restart the program in fiscal year 2019 in the feasibility and design options phase with the goal of producing the first unit in fiscal year 2030. (See figure)

Technology assessment. In May 2018, NNSA completed an assessment of 126 technologies for potential use in a W78 replacement. These included nine technologies that are needed to replace obsolete or no longer available technologies or materials. These are considered “must-do” because they are the only technologies or materials available to meet minimum warhead requirements established by the Department of Defense and NNSA. NNSA officials said that in fiscal year 2019 they will use the assessment to further evaluate technologies for potential use in the warhead.

Coordination with facilities and capabilities. NNSA's program manager is identifying the facilities and capabilities needed to provide components for the warhead. This information will be used to produce a report that identifies aspects of the program—including facilities and capabilities to support it—that could affect the program's schedule and technical risk. However, several of the needed facilities must be built or repaired, and these activities are separately managed and supported outside the W78 replacement program—representing a critical external risk to the program. As mitigation, the program intends to coordinate with the offices that oversee these facilities to draft agreements that describe the work to be performed and timeframes, among other things.

GAO is not making recommendations. NNSA and DOD provided technical comments, which GAO incorporated as appropriate.

For nearly a decade, the Department of Defense (DOD) and the  Department of Energy’s (DOE) National Nuclear Security Administration  (NNSA) have sought to replace the capabilities of the W78 nuclear  warhead—one of two U.S. Air Force intercontinental ballistic missile  (ICBM) warheads. Critical components within the W78 are aging, and the  military’s requirements for, among other things, the safety and security  features of this warhead have changed since it entered the stockpile in  1979. NNSA is responsible for delivering nuclear warheads to the U.S. Air  Force and the U.S. Navy, which are organized under DOD, for use in their  weapons delivery systems. NNSA and DOD undertake life extension  programs (LEPs) to refurbish or replace nuclear weapons components to,  among other things, extend the lives of these weapons and enhance the  safety and security of the stockpile.

The Nuclear Weapons Council is the joint DOD and DOE activity  responsible for matters related to executive-level management of the  nuclear weapons stockpile. The Nuclear Weapons Council serves as the  focal point for interagency analyses and decisions to maintain and  manage U.S. nuclear weapons, and reviews and approves proposed  LEPs. When undertaking an LEP, DOD, with input from NNSA, defines  the performance, safety, and security requirements for the warhead— known as the military characteristics—which DOD refines over time and  finalizes before NNSA begins production. NNSA develops warhead  designs to meet these requirements and is ultimately responsible for  producing the warheads. The Nuclear Weapons Council is also used to  resolve larger questions regarding design and costs for LEPs.

The April 2010 Nuclear Posture Review (NPR)—which described  presidential policy on the role of nuclear weapons in national security— directed NNSA and DOD to study options to replace the capabilities of the  W78 nuclear warhead in an ICBM system. The NPR also directed the agencies to study whether the resulting warhead could also be fielded by  the U.S. Navy in its submarine launched ballistic missile (SLBM) system,  making the weapon an “interoperable” warhead. In September 2010,  DOD and NNSA began assessing concepts for an interoperable warhead  to extend the life of the W78 and the Navy’s W88 warhead. DOD  subsequently began drafting military characteristics that captured a set of  joint Air Force and Navy requirements, including an interoperable nuclear  explosive package—the explosive core of the weapon—and adaptable  nonnuclear components for the Air Force’s ICBM and Navy’s SLBM  systems.

From 2011 through 2014, NNSA, with input from DOD, assessed  concepts for the warhead based on the draft military characteristics and  completed initial feasibility studies analyzing various warhead design  options. NNSA concluded, on the basis of these studies, that the initial  design concepts that it proposed could, in principle, be fielded in both Air  Force and Navy delivery systems. During this period, the warhead  replacement program was initially referred to as the W78 LEP, then as  the W78/88-1 LEP, and then subsequently as the Interoperable Warhead  1 (IW1). During this four year period, NNSA expended about $114.5  million on the program, according to information provided by NNSA.

In fiscal year 2014, in part because of budget constraints, the Nuclear  Weapons Council directed NNSA to suspend the program for an  anticipated 5 years, with resumption planned in fiscal year 2020. At the  time the program was suspended, NNSA had selected the major  components of the nuclear explosive package to replace the capabilities  of the W78 and briefed the Nuclear Weapons Council on some of those  choices.

In February 2018, DOD issued a new NPR that revised nuclear weapons  policy and programs. Rather than endorsing the interoperable warhead  concept, it directed NNSA and DOD to restart the program to replace the  W78 warhead and to continue to investigate the feasibility of fielding the  nuclear explosive package in a Navy SLBM system. It also directed  NNSA to restart the W78 replacement warhead program a year early, in  fiscal year 2019, to better align its schedule with the Air Force’s schedule  for modernizing its ICBM system. NNSA’s most recent preliminary cost  estimate—reported in October 2018 and based on a program to provide a  warhead to both the Air Force and Navy—was that the program would  cost about $10 billion to $15 billion from fiscal year 2019 through fiscal  year 2041.

The Senate Armed Services Committee report 115-125 accompanying S.  1519, a bill for the National Defense Authorization Act for Fiscal Year  2018, includes a provision for GAO to report on NNSA’s progress on the  IW1. This report describes the steps that NNSA has taken to prepare a  W78 replacement program for restart.

To describe the steps that NNSA has taken to prepare a W78  replacement program for restart, we focused on the agency’s planning  and activities during fiscal years 2015 through 2018. In particular, we  focused on planning activities related to program management and  personnel, technology development and assessment, and coordination  with facilities and capabilities because they are key areas in the early  planning phases of NNSA’s LEP process. We reviewed documentation on  NNSA’s planning for program management, technologies, and facilities  for a W78 replacement program, such as internal briefing documents and  a technology readiness assessment that NNSA completed in May 2018 in  preparation to restart the program. We interviewed NNSA officials as well  as contractors from Lawrence Livermore, Los Alamos National Laboratory  (Los Alamos), and Sandia National Laboratories (Sandia) to obtain  information about the planning for program management and personnel,  technology, and facilities needed for the program. We interviewed  contractors at these laboratories because they are involved in the design  of the nuclear warheads and warhead components. We also interviewed  NNSA officials in the Office of Technology Maturation to learn about  technology development related to a W78 replacement, and in the Office  of Systems Engineering and Integration to learn about the results of the  technology readiness assessment and the potential impact of the  program on facilities within the nuclear security enterprise. We also  interviewed officials from DOD’s Office of the Deputy Assistant Secretary  of Defense for Nuclear Matters, the Air Force Nuclear Weapons Center,  the Navy Strategic Systems Programs, and the U.S. Strategic Command  to learn about their roles in preparing to restart the program and in setting  requirements for the warhead.

We conducted this performance audit from October 2017 to November  2018, 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 (1) NNSA’s weapons design and production sites;  (2) the framework for managing LEPs, known as the Phase 6.X process,  and NNSA’s program execution instruction; and (3) NNSA’s technology  development and assessment process.

NNSA Weapons Design and Production Sites

NNSA oversees three national security laboratories—Lawrence  Livermore in California, Los Alamos in New Mexico, and Sandia in New  Mexico and California. Lawrence Livermore and Los Alamos are the  design laboratories for the nuclear components of a weapon, while  Sandia works with both to design nonnuclear components and as the  system integrator. Los Alamos led the original design of the W78, but  Lawrence Livermore is leading current efforts to design the replacement  warhead.

NNSA also oversees four nuclear weapons production plants—the  Pantex Plant in Texas, the Y-12 National Security Complex in Tennessee,  the Kansas City National Security Campus in Missouri, and the Savannah  River Site in South Carolina. In general, the Pantex Plant assembles,  maintains, and dismantles nuclear weapons; the Y-12 National Security  Complex produces the secondary and the radiation case; the Kansas City  National Security Campus produces nonnuclear components; and the  Savannah River Site replenishes a component known as a gas transfer  system that transfers boost gas to the primary during detonation.

Phase 6.X Process for Managing LEPs and NNSA’s Program Management Directive

DOD and NNSA have established a process, known as the Phase 6.X  process, to manage life extension programs. According to a Nuclear  Weapons Council document, NNSA’s Office of Defense Programs will  follow this process to manage a W78 replacement program. As shown in  figure 1, this process includes key phases or milestones that a nuclear  weapon LEP must undertake before proceeding to subsequent steps.

In January 2017, while the program was still suspended, NNSA issued a  supplemental directive that defines additional activities that NNSA offices  should conduct in support of the Phase 6.X process. For example, as  discussed below, NNSA’s supplemental directive established a new  requirement during Phase 6.1 (Concept Assessment) that NNSA conduct  a technology readiness assessment of technologies proposed for  potential use in the warhead. In addition, NNSA’s Office of Defense  Programs issued a program execution instruction that defines enhanced  program management functions for an LEP and other programs. This  instruction also describes the level of program management rigor that the  LEP must achieve as it advances through the Phase 6.X process.

NNSA’s Technology Development and Assessment Process

According to NNSA’s Fiscal Year 2018 Stockpile Stewardship  Management Plan, NNSA extends the life of existing U.S. nuclear  warheads by replacing aged nuclear and non-nuclear components with  modern technologies. In replacing these components, NNSA seeks  approaches that will increase safety, improve security, and address  defects in the warhead. Several technologies are frequently developed  concurrently before one approach is selected. According to NNSA’s  Fiscal Year 2018 Stockpile Stewardship Management Plan, this approach  allows selection of the option which best meets warhead requirements  and reduces the risks and costs associated with an LEP. NNSA conducts  technology readiness assessments to provide a snapshot in time of the  maturity of technologies and their readiness for insertion into a program’s  design and schedule, according to NNSA’s guidance. NNSA’s  assessments also look at the ability to manufacture the technology.  NNSA measures technological maturity using technology readiness levels  (TRLs) on a scale from TRL 1 (basic principles developed) through TRL 9  (actual system operation). Similarly, NNSA measures manufacturing  readiness using manufacturing readiness levels (MRL) on a scale from  MRL 1 (basic manufacturing implications identified) through MRL 9  (capability in place to begin full rate production). According to NNSA’s  guidance, NNSA recommends but does not require that an LEP’s critical  technologies reach TRL 5 (technology components are integrated with  realistic supporting elements) at the beginning of Phase 6.3  (Development Engineering). At the end of Phase 6.3, it recommends  that a technology be judged to have achieved MRL 5 (capability to  produce prototype components in a production relevant environment).  However, according to NNSA officials, lower TRLs and MRLs may be  accepted in circumstances where a technology is close to achieving the  desired levels or the program team judges that the benefit of the  technology is high and worth the increased risk that it may not be  sufficiently mature when the program needs it.

NNSA Has Taken Steps to Prepare to Restart a Program to Replace the W78 Nuclear Warhead Capability

NNSA has taken steps to prepare to restart a program to replace the W78  nuclear warhead capability. According to NNSA officials, these steps are  typically needed to conduct any LEP. Therefore, they can be undertaken  despite the uncertainty about whether the final program will develop the  warhead for the Air Force only or for both the Air Force and the Navy.  Specifically, NNSA has (1) taken initial steps to establish the program  management functions needed to execute the program and assemble  personnel for a program management team; (2) assessed technologies  that have been under development while the program was suspended  that could potentially be used to support a W78 replacement; and (3)  initiated plans for the facilities and capabilities needed to provide the  nuclear and nonnuclear components for the warhead.

At the time of our review, NNSA and DOD officials stated that, in  response to the 2018 NPR, they planned to restart a program that would  focus on replacing the capabilities of the W78 for the Air Force; however,  the extent to which the program would focus on providing a nuclear  explosive package for the Navy was uncertain. DOD officials said that  the Navy plans to complete a study examining the feasibility of using the  nuclear explosive package developed for the W78 replacement warhead  in its SLBM system by the end of fiscal year 2019. According to DOD  officials, the Nuclear Weapons Council will make a decision about  developing an interoperable warhead for the Air Force and the Navy  based on the results of the study but, as of August 2018, had not  established time frames for making that decision. According to Air Force  and NNSA officials, if the Nuclear Weapons Council decided that the  Navy should participate in the program, then NNSA would not need to  redo the work planned for fiscal year 2019.

NNSA has taken initial steps to establish the program management  functions needed to execute the program and assemble personnel for a  program management team, as follows:

Program management. In fiscal year 2018, NNSA started to  establish the program management functions needed to execute a  W78 replacement program, as required in the Office of Defense  Programs’ program execution instruction. In preparation for the  program restart, NNSA assigned a manager for a W78 replacement  program who is taking or plans to take steps to implement these  functions. For example, among other steps, the W78 replacement  program manager told us that he had started developing the risk  management plan to define the process for identifying and mitigating  risks that may impact the program. The program manager also said  NNSA had started to adapt a standardized work breakdown structure  for life extension programs to define and organize the W78  replacement program’s work scope for restart. An initial version of  this work breakdown structure would be completed before the  program restarts in fiscal year 2019, according to the program  manager. Further, as NNSA refines the scope of work, the agency will  refine and tailor the work breakdown structure. At the time of our  review, this work was under development and therefore we were not  able to review these plans and tools.

In addition, as of July 2018, NNSA had created a preliminary schedule  for a W78 replacement program under the Phase 6.X process (see  fig. 2).

According to NNSA’s preliminary schedule, the program will:

Restart in Phase 6.2 (Feasibility and Design Options) in the third  quarter of fiscal year 2019. NNSA previously completed Phase 6.1  and was authorized by the Nuclear Weapons Council to start  Phase 6.2 in June 2012. During Phase 6.2, NNSA plans to,  among other things, select design options and develop cost  estimates of the selected design options.

Conduct Phase 6.2A (Design Definition and Cost Study) for one  year beginning in the fourth quarter of fiscal year 2021. During this  phase, for example, NNSA plans to develop a preliminary cost  estimate for the program, called a weapons design and cost  report, and also produce an independent cost estimate.

Start Phase 6.3 (Development Engineering) in the fourth quarter  of fiscal year 2022 and transition to Phase 6.4 (Production  Engineering) in the mid-2020s. During these phases, NNSA will  develop the final design as well as begin producing selected  acquisition reports, which detail the total program cost, schedule,  and performance, among other things. According to the W78  program manager, the military characteristics will be finalized in  Phase 6.4 and before that point DOD will continue to update the  requirements.

Achieve production of the first warhead—Phase 6.5—by the  second quarter of fiscal year 2030 so that it can be fielded on the  Air Force’s planned Ground Based Strategic Deterrent that same  year.

Start Phase 6.6 (Full Scale Production) by the second quarter of  fiscal year 2031.

When the program restarts in fiscal year 2019, NNSA intends to  develop or finalize initial versions of other plans and tools such as a  requirements management plan, according to the program manager.  (See appendix I for a detailed description of the steps NNSA is taking  or plans to take to establish the program management functions  needed to execute a W78 replacement program, according to the  manager for the W78 replacement program.)

The program manager also told us that as the program progresses  through Phases 6.2 (Feasibility and Design Options), 6.2A (Design  Definition and Cost Study), and 6.3 (Development Engineering),  NNSA will increase the maturity of the program management  processes and tools, consistent with the Office of Defense Programs’  program execution instruction. For example, in Phases 6.2 and 6.2A,  NNSA intends to establish an earned value management system  (EVM)—used to measure the performance of large, complex  programs. In Phase 6.3, NNSA will further develop the system to be  consistent with DOE and industry standards, as specified in the  program execution instruction. NNSA officials said they will need to  achieve sufficient program management rigor in Phase 6.3 to  effectively report to Congress on the status and performance of the  program as NNSA develops cost and schedule baselines.

Personnel. At the time of our review, NNSA was reconstituting a  program management team. Specifically, as mentioned above, NNSA  assigned a new program manager in March 2017. In the spring of  2018, NNSA began assigning additional federal staff and contractor  support to help ramp up the program in advance of the fiscal year  2019 restart date. According to the program manager, he expected to  complete a plan in the late summer or early fall of 2018 that NNSA  could use to hire additional federal staff needed to manage the  program in fiscal year 2019. The advanced development and  implementation of staffing plans prior to each phase of an LEP was a  key lesson learned from an NNSA review of another LEP—the W76- 1.

While the program was suspended, NNSA supported other programs that  developed weapons technologies—including materials and manufacturing  processes—that could potentially be used by the W78 replacement  program and potentially by other future life extension programs.  Specifically, according to NNSA officials, NNSA supported the  development of technologies through ongoing LEPs (such as the W80-4  LEP) and other technology maturation projects (such as the Joint Technology Demonstrator) that could support future LEPs. For example,  the W80-4 program has supported development at Lawrence Livermore  of certain new materials as a risk mitigation strategy in case certain  legacy materials used in the secondary are not available. According to  NNSA officials, NNSA will likely continue to develop these new materials  for use in future weapons, including the W78 replacement. In addition,  contractors at Lawrence Livermore told us that test demonstrations  conducted under the Joint Technology Demonstrator have helped to  mature potential technologies for a W78 replacement. Examples they  cited included additively manufactured mounts and cushions for securing  and stabilizing the nuclear explosive package inside the Air Force’s  aeroshell.

In May 2018, in anticipation of the restart of a W78 replacement program  and to retroactively address NNSA’s new supplemental requirement to  conduct a technology readiness assessment in Phase 6.1, NNSA’s Office  of Systems Engineering and Integration completed a technology  readiness assessment that evaluated the maturity of technologies  potentially available for the W78 replacement program. According to  NNSA officials, the assessment identified and evaluated technologies that  NNSA would have available for the next LEP, irrespective of whether the  final program will replace the W78 warhead in ICBMs only or will also be  used in the Navy’s SLBMs.

The assessment evaluated 126 technologies based on proposals from  the laboratories and production sites. As shown in table 1 below, the proposals related to key functional areas of the warhead, including the  nuclear explosive package and the arming, fuzing, and firing  mechanism—which provides signaling that initiates the nuclear explosive  chain. For the W78 warhead replacement, DOD divided the military  characteristics into two categories: threshold or minimum requirements  (or “needs”) and objective or optional requirements (or “wants”). NNSA’s  assessment grouped the technologies into one of three categories, as  follows.

Must do. A technology deemed “must do” means that it is the only  technology available that can meet a minimum requirement (or  “need”) for the warhead to function. The technology that previously  fulfilled this requirement is generally obsolete or no longer produced,  and there are no alternatives.

Must do (trade space). “Must do (trade space)” technologies fulfill a  minimum requirement (or “need”) for the warhead, but there are two  or more technologies that could meet this need. NNSA must evaluate  and select which technology it will use to fulfill the need.

Trade space. “Trade space” technologies are those that can meet an  optional requirement (or “want”) for the warhead.

Among the nine “must do” technologies that NNSA evaluated, for  example, was a new manufacturing process being developed at Sandia to  produce a type of magnesium oxide—needed for use in the thermal  batteries that power the warhead’s firing mechanism—that is no longer  available from a vendor and for which NNSA’s existing supplies are  limited. For this new process, the assessment team estimated that it had  completed TRL 1 (basic principles developed) but had not yet reached  MRL 1 (basic manufacturing implications identified). The technology  readiness assessment noted that for technologies with a TRL of 3 or less,  an MRL of 1 or less is expected. In addition, according to the report,  Sandia estimated that it may cost about $7.1 million to develop the  material and manufacturing process to TRL 5 and MRL 4 during fiscal  years 2018 through 2023—when the program is slated to reach Phase  6.3—to achieve a level of readiness where it could potentially be included  in the design of the W78 replacement warhead.

Among the 59 “must do (trade space)” technologies that NNSA evaluated  were, for example, two new gas transfer system technologies developed  by Sandia that may offer advantages compared with the existing  technology. A gas transfer system is a required capability (or “must do”)  but, according to the technology readiness assessment report, NNSA  needs to compare the costs, benefits, and risks of these new  technologies with the traditional technology (i.e., evaluate the “trade  space”) and make a selection among them. The first new technology was  a gas transfer system bottle made out of aluminum that could be cheaper,  weigh less, and last longer than the gas transfer system used in the W78.  According to the technology readiness assessment report, the  assessment team estimated the aluminum-based bottle had completed  TRL 2 but did not have enough information to estimate an MRL. Sandia  estimated that it would cost about $6.5 million to achieve TRL 5 and MRL  4 during fiscal years 2018 through 2023. The second Sandia technology  involved an advanced gas transfer system technology. The assessment  team estimated that this technology had completed TRL 3 but did not  have enough information to estimate an MRL. Sandia estimated that it  would cost about $5.4 million to achieve TRL 5 and MRL 4 during fiscal  years 2018 through 2023. According to the technology readiness  assessment report, NNSA will need to further evaluate these approaches  as well as the traditional technology to make a selection for a W78  replacement program.

The 75 “trade space” technologies that the assessment team evaluated  included, for example, several proposed by Lawrence Livermore, Los  Alamos, and Sandia for providing an advanced safety feature to prevent  unauthorized detonation of the warhead. As mentioned above, when  NNSA extends the life of existing U.S. nuclear warheads it also seeks  approaches that will increase the safety and improve security of the  warhead. According to the report, the laboratories proposed similar  concepts that varied in maturity levels and estimated costs for further  development. Specifically, the assessment team estimated the Lawrence  Livermore and Los Alamos technologies to have completed TRL 4 and  Sandia’s proposal to have completed TRL 3. Regarding MRLs, the  assessment team also estimated Lawrence Livermore’s technology to  have completed MRL 1, Los Alamos’s technology to be at MRL 1, and did  not have enough information to estimate the MRL for Sandia’s  technology. In addition, according to the report, Lawrence Livermore  estimated costs of about $31.2 million to $45.6 million to further mature its  technology during fiscal years 2018 through 2023. Los Alamos estimated  costs of about $72.1 million to $154.5 million to further mature its  technology during the same period. Sandia estimated costs of about $8.2  million to further mature its technology during the same period. Because  the feature is not a minimum requirement, NNSA officials told us that they  are continuing to evaluate the costs, benefits, and risks of including the  feature.

According to NNSA’s manager for the W78 replacement program and key  staff involved in preparing to restart the program, when the program  restarts in fiscal year 2019 they will use the assessment to identify  specific technologies or groups of technologies (i.e., trade spaces) to  further evaluate for potential use in the warhead. These officials said they  will continue evaluating technologies and make selections of preferred  options at the same time that the warhead’s program requirements and  priorities are refined during Phases 6.2 and 6.2A. According to the  program manager, NNSA will produce a technology development plan for  technologies selected for a W78 replacement during Phase 6.2 and 6.2A  and that will identify the current readiness levels of the technologies, key  risks, and estimated costs to bring them to TRL 5 in Phase 6.3.

In addition, the technology readiness assessment team made several  recommendations to the NNSA Deputy Administrator for Defense  Programs regarding the development of technologies that could provide  benefits to the nuclear security enterprise overall. For example, the  assessment team observed that 21 of the proposed technologies for a  W78 replacement involved the use of additive manufacturing. The  assessment noted that, if successful, these technologies could reduce  component production costs and schedule risks for future LEPs  compared to current methods. The team recommended that the Office of  Defense Programs conduct an analysis to validate these capabilities and  develop a nuclear enterprise-wide effort to address additive  manufacturing for a W78 replacement, future LEPs, and other  applications. According to the NNSA official who led the assessment, at  the time of our review, the assessment team was preparing to present its  enterprise-wide recommendations to the Office of Defense Program’s  senior leadership; therefore, specific follow-on actions had not yet been  decided.

Coordination with Facilities and Capabilities

The manager of the W78 replacement program said that he has begun to  identify the facilities and capabilities at the laboratories and production  sites that will be needed to provide the nuclear and nonnuclear  components for a W78 replacement, and plans to draft formal  agreements to help ensure coordination with them. According to the  program manager, collecting the information that identifies facilities and  capabilities—including a rough idea of key milestone dates for when the  program will need to use them—is the first step in producing a major  impact report, which is required upon completion of Phase 6.2 and  accompanies the final Phase 6.2 study report delivered to the Nuclear  Weapons Council. Among other things, a major impact report identifies  aspects of the program—including facilities and capabilities to support it— that could affect the program’s schedule and technical risk, according to  the Phase 6.X guidelines.

According to an NNSA official and contractor representatives, many of the  existing nuclear and nonnuclear components of the W78 are outdated or  unusable and a W78 replacement will need all newly manufactured  components. As a result, NNSA will need to exercise numerous  manufacturing capabilities in support of this effort, and the facilities and  capabilities must be ready to support the work. However, many of the  facilities that may be needed to provide components for a W78  replacement program are outdated and are undergoing modernization to  either build new facilities or repair existing facilities and capabilities, which  represents a critical external risk to the program. According to NNSA’s  Fiscal Year 2018 Stockpile Stewardship and Management Plan, these  planned modernization activities will require sustained and predictable  funding over many years to ensure they are available to support the  weapons programs. Some examples of NNSA activities to build or repair  facilities and capabilities that will provide nuclear or nonnuclear  components for a W78 replacement warhead—and which may have  schedule, cost, or capacity issues that could impact the program— include:

Plutonium pit production facilities. NNSA does not currently have  the capability to manufacture sufficient quantities of plutonium pits for  a W78 replacement program. NNSA’s Fiscal Year 2018 Stockpile  Stewardship and Management Plan stated that the agency will  increase its capability to produce new pits over time, from 10 pits per  year in fiscal year 2024 to 30 pits per year in fiscal year 2026, and as  many as 50 to 80 pits per year by 2030. NNSA is refurbishing its pit  production capabilities at Los Alamos to produce at least 30 pits per  year. In addition, in May 2018, NNSA announced its intention to  repurpose the Mixed Oxide Fuel Fabrication Facility at the Savannah  River Site in South Carolina to produce at least an additional 50 pits  per year by 2030. NNSA officials told us that they will need both the  Los Alamos and Savannah River pit production capabilities to meet  anticipated pit requirements for the W78 replacement program and for  future warhead programs.

Uranium processing facilities. NNSA’s construction of the Uranium  Processing Facility at the Y-12 National Security Complex will help  ensure NNSA’s continued ability to produce uranium components for  the W78 replacement program. NNSA plans to complete the facility  for no more than $6.5 billion by the end of 2025—approximately 4  years before the scheduled delivery of the first production unit of a  W78 replacement program warhead. This effort is part of a larger  NNSA plan to relocate and modernize other enriched uranium  capabilities performed in a legacy building at the Y-12 National  Security Complex to other existing buildings or in newly constructed  buildings.

Lithium production facility. NNSA will require lithium for a W78  replacement warhead. The United States no longer maintains full  lithium production capabilities and relies on recycling as the only  source of lithium for nuclear weapon systems. According to the Fiscal  Year 2018 Stockpile Stewardship and Management Plan, NNSA has  analyzed options to construct a new lithium production facility, and a  conceptual design effort is next, with an estimated completion date of  fiscal year 2027 for the new facility. Until the facility is available,  NNSA has developed a bridging strategy to fill the interim supply  gaps.

Radiation-hardened microelectronics facility. Nuclear warheads,  such as a W78 replacement warhead, include electronics that must  function reliably in a range of operational environments. NNSA has a  facility at Sandia that produces custom, strategic radiation-hardened  microelectronics for nuclear weapons. In August 2018, NNSA officials  told us that this facility, known as Microsystems and Engineering  Sciences Applications, can remain viable until 2040—but would need  additional investment.

The W78 replacement program manager told us that the need for newly  manufactured components coupled with the scale of NNSA’s  modernization activities means that a comprehensive coordination effort  will be necessary to ensure that the facilities and capabilities are ready to  provide components for the warhead by the end of the 2020s. Because  these activities are separately managed and supported outside the W78  replacement program, NNSA considers progress on them to represent a  critical external risk to the program.

NNSA is taking or plans to take some action to mitigate this external risk  at the program and agency level. One step that the program plans to take  to address this risk is to draft formal agreements—called interface  requirements agreements—with other NNSA program offices that  oversee the deliverables and schedules for the design, production, and  test facilities that are needed for the program. These agreements  describe the work to be provided by these external programs, including  milestone dates for completing the work; funding; and any risks to cost,  schedule, or performance. The W78 program manager stated that they  are generally drafted toward the end of Phase 6.2 through Phase 6.2A  and largely finalized in Phase 6.3—though small adjustments may be  made into Phase 6.4 (Production Engineering).

At the agency level, in response to a direction in the 2018 NPR, NNSA  officials told us that the agency is also developing an agency-wide  integrated master schedule that is intended to align NNSA’s enterprise- wide modernization schedule with milestone delivery dates for nuclear  weapons components. The W78 program manager and other NNSA  officials told us that the information they provide on the facilities and  capabilities needed, as well as milestone dates, will be integrated into this  schedule and used to help ensure that the facilities and capabilities are  ready to support the program.

We provided a draft of this report to NNSA and DOD for comment. NNSA  and DOD provided technical comments, which we incorporated as  appropriate.

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

If you or your staff members 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 significant  contributions to the report are listed in appendix II.

Appendix I: NNSA’s Program Management Functions to Execute a W78 Replacement Program

The table below identifies the steps NNSA is taking or plans to take to  establish the program management functions needed to execute a W78  replacement program. NNSA was directed by the Nuclear Weapons  Council to suspend the program in fiscal year 2014 and the 2018 Nuclear  Posture Review directed NNSA to restart the program in fiscal year 2019.  The NNSA Office of Defense Program’s program execution instruction  defines enhanced program management functions for a warhead life  extension program (LEP) such as the W78 replacement program and  other programs. The instruction also describes the level of program  management rigor that the LEP must achieve as it advances through the  Department of Defense and NNSA process for managing life extension  programs called the Phase 6.X process. This process includes key  phases or milestones that a nuclear weapon life extension program must  undertake before proceeding to subsequent steps. NNSA completed  Phase 6.1 (Concept Assessment) and started Phase 6.2 (Feasibility and  Design Options) activities before the program was suspended in fiscal  year 2014. NNSA, therefore, plans to restart the program in Phase 6.2.

Appendix II: GAO Contact and Staff Acknowledgments

Allison B. Bawden, (202) 512-3841 or bawdena@gao.gov.

In addition to the individual named above, William Hoehn (Assistant  Director), Brian M. Friedman (Analyst in Charge), and Julia T. Coulter  made significant contributions to this report. Also contributing to this  report were Antoinette Capaccio, Pamela Davidson, Penney Harwell  Caramia, Greg Marchand, Diana Moldafsky, Cynthia Norris, Katrina  Pekar-Carpenter, and Sara Sullivan.

The National Nuclear Security Administration is preparing to restart a program to replace the W78 nuclear warhead, which is used in Air Force intercontinental ballistic missiles. The goal is to produce the first W78 replacement warhead in fiscal year 2030. Pending further study, this replacement warhead may also be used in Navy submarine launched ballistic missiles.

program management, such as developing a risk management plan

assessing technologies for potential use

coordinating with facilities needed to provide warhead components