Nuclear Weapons: NNSA Needs to Incorporate Additional Management Controls Over Its Microelectronics Activities

Microelectronics (see figure) form the basis of nearly all electronic products, including nuclear weapons. U.S. nuclear weapons use a unique supply of “strategic radiation-hardened” microelectronics that must function properly when exposed to high levels of radiation. NNSA's facilities at Sandia are the only source for these unique microelectronics, and the age of the facilities may pose significant risk to NNSA's capability after 2025.

A Senate committee report accompanying the National Defense Authorization Act for Fiscal Year 2019 included a provision for GAO to review NNSA's strategic radiation- hardened microelectronics activities. This report (1) describes NNSA's actions over the past decade to sustain existing facilities and identify future alternatives; and (2) examines NNSA's ongoing approach to managing its microelectronics activities and the extent to which this approach incorporates key management controls. GAO reviewed documents and interviewed officials and contractor representatives from NNSA and Sandia, toured Sandia's microelectronics facilities, and reviewed NNSA program and project management controls.

Over the past decade, the Department of Energy's (DOE) National Nuclear Security Administration (NNSA) completed several actions to sustain the condition of its existing microelectronics facilities at Sandia National Laboratories (Sandia), which are NNSA's only source for producing strategic radiation- hardened microelectronics that can operate in environments with extreme exposure to radiation. In particular, during fiscal years 2012 through 2019, NNSA carried out a multiyear, $150-million effort at Sandia to replace or refurbish infrastructure and equipment in its primary microelectronics production facility to ensure continued operations through 2025. While NNSA was working with Sandia to sustain current facilities, the agency also began identifying and evaluating options for producing microelectronics after 2025, including constructing a new multi-billion dollar production facility at Sandia. However, because of changes to key assumptions, including longer-term viability of existing facilities, NNSA decided in November 2018 not to pursue any of the identified alternatives and instead stated that the agency was going to assess options to sustain its current capability at Sandia.

NNSA's ongoing approach to managing its strategic radiation-hardened microelectronics activities includes two key efforts. First, the agency decided in October 2019 to invest about $1 billion over the next 20 years to upgrade and sustain its microelectronics capability at Sandia through 2040. Specifically, NNSA plans to upgrade its production process as well as complete identified infrastructure (such as electrical distribution) and equipment projects. Second, in November 2019 NNSA created and filled a new full-time microelectronics coordinator position that, among other things, will have responsibility for certain aspects of the agency's microelectronics activities, according to agency officials. However, NNSA's approach does not fully incorporate key management controls that NNSA applies to other important activities. For example, DOE and NNSA require their programs and projects to establish an overarching management plan that describes the procedures to define, execute, and monitor a program or project as well as establishing specific requirements in a variety of areas such as cost estimating and performance management. NNSA has not established a similar management plan to oversee and coordinate its microelectronics activities. By incorporating these key management controls, NNSA would have increased assurance that its planned microelectronics activities are clearly defined, efficiently executed, and effectively monitored.

GAO recommends that NNSA incorporate additional management controls, such as developing an overarching management plan, to better oversee and coordinate its microelectronics activities. NNSA neither agreed nor disagreed with this recommendation.

Microelectronics—commonly referred to as integrated circuits or  semiconductors—form the basis of nearly all electronic products,  including components of nuclear weapons. The long-term viability of the  U.S. nuclear deterrent depends on a trustworthy supply of unique  microelectronics, according to the National Nuclear Security  Administration’s (NNSA) Fiscal Year 2020 Stockpile Stewardship and  Management Plan. These unique electronics are referred to as “strategic  radiation-hardened” microelectronics, reflecting their ability to function  properly in environments with extremely high levels of radiation (such as  gamma rays or x-rays). Strategic radiation-hardened microelectronics  are essential components of a nuclear weapon’s arming, fuzing, and firing  system, which provides the signals that initiate the nuclear explosive  chain. In this report, we generally refer to strategic radiation-hardened  microelectronics produced by NNSA as simply “microelectronics.”

Producing such microelectronics is a technically challenging task  requiring specialized facilities, equipment, and materials. It also entails  executing and integrating activities related to research, design,  fabrication, packaging, and testing. The primary domestic source of  microelectronics for nuclear weapon components is the Microsystems  Engineering, Sciences and Applications (MESA) Complex at Sandia  National Laboratories (Sandia) in New Mexico, which National  Technology and Engineering Solutions of Sandia manages and operates  under contract for NNSA.

NNSA has identified multiple challenges to ensuring its ability to continue  operating its microelectronics capability. For example:

Sandia’s primary microelectronics production facility within the MESA  Complex is the Silicon Fabrication (SiFab) Facility, which was  commissioned in 1988 with a 25-year design life. According to agency  documentation, the facility’s age and dated physical layout—which  result in increased operational costs and extensive production  downtime—pose risks to NNSA’s microelectronics capability after  2025.

NNSA’s microelectronics capability at Sandia uses some of the same  materials, equipment, and processes as commercial microelectronics  producers. However, trends in the global commercial microelectronics  industry increasingly limit NNSA’s ability to partner with industry to  meet its microelectronics needs, according to NNSA officials and  Sandia contractor representatives. For example, the commercial  industry is focused on producing microelectronics for consumer and  “smart” devices using the latest technologies with a high volume of  production, which means that technologies are rapidly replaced and  commercial microelectronics have a relatively limited lifespan. In  contrast, NNSA requires a much lower quantity of microelectronics  with unique requirements (such as strategic radiation hardening) for  which there is no commercial demand. In addition, because the  United States must sustain its nuclear weapons for decades, NNSA  generally requires its microelectronics to remain functional for much  longer than consumer devices are designed to, according to NNSA  officials.

According to NNSA documentation, the nuclear weapons supply chain  must be trusted to protect against potential sabotage, among other  things. However, production of commercial microelectronics has  increasingly moved offshore—primarily to Asia—while a number of  domestic producers have been acquired by foreign entities. Our prior  work has shown that use of foreign suppliers could increase  opportunities for adversaries to corrupt technologies, introduce  malicious code, and potentially steal national security-related  intellectual property.

According to the 2018 Nuclear Posture Review, the United States will  pursue initiatives to ensure a continued capability to develop and produce  microelectronics beyond 2025. Currently, NNSA plans to begin  production after 2025 for three nuclear weapon modernization programs,  and microelectronics will be needed for those programs. Historically,  NNSA’s weapon modernization programs have been life extension  programs (LEPs), which 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. However, NNSA is  moving into an era in which its weapon modernization programs will also  include weapon modification programs and potentially new acquisitions.

A Senate committee report accompanying a bill for the National Defense  Authorization Act for Fiscal Year 2019 included a provision for us to  review NNSA’s strategic radiation-hardened microelectronics activities  specific to nuclear weapons. Our report (1) describes NNSA’s actions  over the past decade to sustain existing microelectronics facilities and  identify future alternatives for its microelectronics capability and (2)  examines NNSA’s ongoing approach to managing its microelectronics  activities and the extent to which this approach incorporates key  management controls.

To address both objectives, we conducted a site visit to NNSA’s MESA  Complex at Sandia to review and tour microelectronics capabilities and  interview contractor representatives who are responsible for managing  and operating Sandia’s microelectronics facilities. In particular, our site  visit focused on MESA’s SiFab Facility because, according to NNSA  documentation, (1) the facility is the agency’s primary source for  microelectronics that are integrated into nuclear weapons, (2) the facility’s  layout and aging infrastructure may limit future production options, and (3)  the facility’s equipment and infrastructure present ongoing risks to  NNSA’s nuclear weapon production mission. To increase our familiarity  with how microelectronics are developed and produced, we also  conducted a site visit to and interviewed company representatives who  operate a microelectronics production facility located in Maryland. We  chose this facility because it produces microelectronics for national  security systems and its construction date and building layout are similar  to Sandia’s SiFab Facility.

To identify actions NNSA took to sustain existing facilities, we reviewed  NNSA and contractor documentation from 2010 (when Sandia submitted  its initial sustainment proposal) through 2018 (when NNSA completed its  most recent sustainment study). To examine the future alternatives NNSA  identified for its microelectronics capability, we reviewed NNSA  documentation from 2011 (the start of NNSA’s evaluation) through 2018  (when NNSA terminated its evaluation). To further support our analysis of  this documentation, we interviewed NNSA officials and contractor  representatives from Sandia who either authored or were responsible for  reviewing and approving key documents. We also interviewed  representatives of NNSA’s third-party independent contractor who  authored one study on sustaining existing facilities and two studies on  identifying alternatives for its capability. Because NNSA’s evaluation of  future alternatives included coordination with the Department of Defense  (DOD), which also requires the microelectronics contained in some of its  national security systems to properly function in certain environments  (such as space) that have increased radiation levels, we reviewed DOD  documents such as the department’s plan to accelerate implementation of  its trusted microelectronics strategy and roadmap. We also interviewed  officials from DOD’s Trusted and Assured Microelectronics program  office.

To examine NNSA’s ongoing approach to managing its microelectronics  activities and the extent to which this approach incorporates key  management controls, we reviewed key planning documentation, such as  Sandia’s MESA Complex Extended Life Plan and the MESA Complex  Fiscal Year 2020 Integrated Program Plan. We also interviewed NNSA  officials responsible for managing, overseeing, and coordinating the  agency’s microelectronics activities. To identify key management controls  employed for programmatic and project activities across the Department  of Energy (DOE) and NNSA and the extent to which the agency’s  microelectronics management approach incorporates such controls, we  reviewed NNSA’s program management directives and DOE’s order on  project management for the acquisition of capital assets. We also  reviewed federal standards for internal control related to risk management  and the control environment. We focused on existing NNSA program  management directives and the DOE project management order because  they provide requirements and guidance for NNSA’s management of its  programs and projects and are a primary mechanism for how NNSA  implements federal internal control standards for its programs and  projects.

NNSA’s microelectronics activities are currently adapting to a shifting  environment, evolving demands, and new priorities, in part because of the  agency’s 2018 decision to terminate its evaluation for a future  microelectronics alternative. Therefore, we focused on identifying key  management controls related to front-end planning that were specified in  both NNSA’s program management directives and DOE’s project  management order; such controls are most applicable to the current status of the agency’s microelectronics activities. In a similar manner, we  selected principles in the federal standards for internal control that were  most applicable to front-end planning to reflect the current status of  NNSA’s microelectronics activities.

We conducted this performance audit from November 2018 to June 2020  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 MESA Complex at Sandia comprises multiple production facilities  and buildings, which total approximately 400,000 square feet (see fig.  1). In particular, the SiFab Facility, completed in 1988, is the primary  production facility for microelectronics integrated into nuclear weapons.  The SiFab Facility produces application-specific integrated circuits (ASIC)  that are custom-designed to control certain nuclear weapon arming,  fuzing, and firing functions. The MESA Complex also includes other  buildings, such as the Micro Fabrication Facility, which was completed in  2006 and produces strategic radiation-hardened devices for manipulating  electronic signals and electrical power. The physical layouts of these  two production facilities center around a series of clean rooms that are  designed to maintain an extremely low level of dust and other  particulates, which can harm microelectronic functionality. The two  facilities contain about 375 pieces of specialized production equipment,  some of which cost millions of dollars, and have acid exhaust and liquid  waste management systems for handling the byproducts of the  production processes.

The SiFab Facility produces all of the strategic radiation-hardened ASICs  currently used in nuclear weapons. ASICs are produced on wafers—a  thin slice of semiconductor material such as silicon—using what is  referred to as a complementary metal-oxide semiconductor (CMOS)  process technology. The production of ASICs requires hundreds of  processing steps, which are completed over multiple weeks. For example,  according to Sandia documentation, the production of a specific type of  ASIC requires over 600 processing steps over an approximately 26-week  period.

Microelectronics are produced with characteristic dimensions (or “feature  sizes”) measured in nanometers (nm), or one-billionth of one meter. The  process technology together with an associated feature size is known as  a technology “node.” In general, smaller nodes represent more advanced  technologies. The SiFab Facility produces microelectronics at the 350 nm  node, and NNSA and Sandia refer to the CMOS production process technology at the 350 nm node as “CMOS7.” Currently, state-of-the-art  microelectronics are produced at the 32 nm or below node. For example,  the Intel Corporation produces commercial microelectronics at the 14 nm  node for use in personal computers and servers. However, such smaller  nodes are more challenging to produce and have not been proven to  perform at the strategic radiation-hardened level, according to Sandia  contractor representatives. Figure 2 shows commercially produced  microelectronics on a wafer (left photo) and diced into individual  microelectronics parts next to a U.S. dime (right photo).

Ongoing and Planned Weapon Modernization Programs and Other Modernization Plans Requiring Microelectronics

As shown in table 1, NNSA is undertaking multiple LEPs and weapon  modernization efforts, in which Sandia is participating. In addition, the  2018 Nuclear Posture Review calls for NNSA to consider additional  weapon programs—specifically, a program to develop a modern nuclear- armed sea-launched cruise missile, and another to develop a new  submarine-launched ballistic missile warhead (now referred to as the  W93). To develop and produce microelectronics for these efforts, Sandia  must (1) conduct research and development activities, (2) finalize the  design of microelectronics to meet military requirements specific to the  weapon program into which the microelectronics will be integrated, and  (3) produce the microelectronics. Sandia must conduct all of these  activities years before NNSA delivers a weapon program’s first production  unit to DOD. According to Sandia documents and contractor representatives, microelectronics research and development efforts  generally begin 10 to 15 years before a weapon program’s first production  unit date, while microelectronics production generally begins 3 to 5 years  before a first production unit date.

DOD is also undertaking modernization efforts related to nuclear weapon  delivery platforms, and Sandia is producing microelectronics to support  those efforts. Specifically, DOD is responsible for designing and  producing the arming and fuzing components on delivery platforms for  certain types of nuclear weapons, and Sandia produces some of these  components for DOD at the MESA Complex. For example, according to  Air Force and Sandia documentation, the Air Force contracted with  Sandia to design and produce microelectronics for its Intercontinental  Ballistic Missile Fuze Modernization, which will provide a new fuze for use  on both the current Minuteman III missile and its replacement, the Ground  Based Strategic Deterrent missile.

DOE and NNSA Management Approaches for Projects and Programs

DOE and NNSA distinguish between projects and programs, and the  agencies use different management approaches for each:

Projects. DOE’s project management order governs NNSA’s  management of capital asset acquisition projects with a total cost  greater than $50 million. The order states that capital assets  projects have a defined start and end point. Capital assets include  land, structures, equipment and intellectual property that are used by  the federal government and have an estimated useful life of 2 years or  more. The order’s goal includes delivering projects within their original  performance baselines (on time and within budget) and fully capable  of meeting mission performance and other requirements, such as  environmental, safety, and health standards.

Programs. As we reported in 2018, DOE has not established a  program management policy. However, NNSA issued its own  program management policy in February 2019. The policy applies to  all NNSA elements and requires them to establish additional program  management requirements for respective NNSA programs based on  needs, risk, complexity, and stakeholder involvement, among other  things. The NNSA policy defines a program in part as an organized  set of activities directed toward a common purpose or goal,  undertaken or proposed in support of an assigned mission area. In  addition, some NNSA offices have issued their own program  management directives that are more specific than the NNSA policy.  For example, NNSA’s Office of Defense Programs—which is  responsible for, among other things, weapon modernization programs,  including LEPs, and associated materials and components, such as  microelectronics—issued a program management directive in June  2019 that establishes requirements and processes for managing the  office’s programs. This directive establishes four program  management categories and execution requirements for these  categories. These management categories are risk-based and apply  different execution requirements commensurate with program risk.

Fiscal Year 2020 Funding for Microelectronics Activities at Sandia

The MESA Complex’s estimated fiscal year 2020 budget is $283 million,  according to Sandia documentation. As shown in figure 3, this funding  comes from a variety of sources, because Sandia uses the MESA  Complex to meet both NNSA’s and DOD’s nuclear weapon production  missions as well as for research and development for those and other  federal entities through strategic partnership programs. Sandia  documentation states that a portion of the MESA Complex’s budget is  obtained from other, non-NNSA federal entities that pay Sandia directly to  produce microelectronics for, among other thing, research and  development purposes, and this amount of funding fluctuates annually.  According to Sandia contractor representatives, the laboratory presents  MESA’s budget as an estimate for this reason.

Specific funding sources are discussed in greater detail below:

NNSA provides about 60 percent (or $168 million) of the MESA  Complex’s total estimated budget for fiscal year 2020. Two NNSA  offices account for most of the agency’s funding:

The Office of Defense Programs accounts for 42 percent (or about  $71 million) and is responsible for ensuring the United States  maintains a safe, secure, and reliable nuclear stockpile through  the application of science, technology, engineering, and  manufacturing activities. This funding comes from multiple sub- offices. For example, the Office of Research, Development, Test,  and Evaluation provides funding for microelectronics research and  development; the Office of Production Modernization provides  funding for, among other things, refurbishing microelectronics  processing capabilities; and the Office of Stockpile Management  provides funding for microelectronics production, according to an  NNSA official and NNSA documentation.

The Office of Safety, Infrastructure and Operations accounts for  46 percent (or about $78 million), and this office is responsible for  ensuring existing facilities are safely operated, effectively  managed, and maintained to meet mission needs.

DOE’s Strategic Partnership Programs account for about 13 percent  (or $36 million) of the MESA Complex’s fiscal year 2020 budget.  These programs include research and development projects  sponsored by the Air Force and the Defense Advanced Research  Projects Agency.

DOE’s Laboratory Directed Research and Development work  accounts for about 10 percent (or $28 million) of the MESA Complex’s  fiscal year 2020 budget. Each of DOE’s 16 contractor-operated  laboratories—including Sandia—may direct a portion of the funding  they receive from DOE to scientists who conduct independent  research. The statutory limit on this laboratory-directed research and  development work is between five to seven percent of funds provided  by DOE to the laboratories for national security activities.

DOD provides about 6 percent (or $17 million) of the MESA  Complex’s fiscal year 2020 budget through Strategic Partnership  Programs. According to Sandia documentation, this funding comes  directly from the Air Force and Navy to support the production of  microelectronics that are integrated into nuclear weapon delivery  platforms.

Other sources account for about 12 percent (or $34 million) of the  MESA Complex’s fiscal year 2020 budget. Among other things, this  funding comes from indirect rates applied to all Sandia programs to  support the MESA Complex’s management and operations.

NNSA Completed Actions over the Past Decade to Sustain Its Microelectronics Capability at Sandia and Identified but Did Not Pursue Alternatives for a New Future Capability

Over the past decade, NNSA completed several actions to sustain its  existing strategic radiation-hardened microelectronics facilities at Sandia  through 2025 while simultaneously identifying future alternatives for its  microelectronics capability beyond 2025. In particular, during fiscal years  2012 through 2019, NNSA engaged in a $150 million effort at Sandia to  sustain operations at the SiFab Facility through 2025. NNSA pursued  this effort in response to a 2010 study conducted by Sandia that identified  the need for millions of dollars in funding to sustain the SiFab Facility  through 2025. NNSA’s sustainment efforts focused on the following two  areas:  Infrastructure. NNSA spent about $27 million to complete  approximately 25 infrastructure projects that support microelectronics  production. For example, NNSA installed two new 20,000-gallon tanks  for water storage to improve the facility’s deionized water system,  which provides ultra-high purity water for use in certain processing  steps. NNSA also replaced a portion of the facility’s acid exhaust  system.

Equipment. NNSA spent about $123 million on production equipment  for two main purposes: (1) to replace aging equipment that Sandia  classified as being at high risk of failure; and (2) to refurbish existing  equipment and procure equipment that will be used to produce  microelectronics once Sandia completes its ongoing effort to convert  the production process from using 6-inch silicon wafers to 8-inch  wafers.

Prior to these equipment investments, the SiFab Facility relied on aging  equipment to perform certain processing steps using a manual process.  In fiscal year 2018, Sandia refurbished existing equipment and purchased  new equipment that is more automated and is intended to increase  process reliability. In addition, according to Sandia documentation,  Sandia needed to convert its production process to use 8-inch silicon  wafers because the commercial sector had increasingly limited  maintenance support and service for equipment that processed 6-inch  wafers.

While NNSA was working with Sandia to sustain the SiFab Facility  through 2025, the agency also began identifying and evaluating options  for producing microelectronics after 2025, such as constructing a new  multibillion-dollar production facility at Sandia. However, because of  changes to key assumptions, NNSA decided in November 2018 not to  pursue any of the identified alternatives and instead stated that the  agency was going to assess options to sustain its current capability at  Sandia beyond 2025. See figure 4 for a summary of NNSA’s actions to  sustain the SiFab facility and consider alternatives.

More specifically, NNSA took the following actions during the past decade  to identify alternatives for producing microelectronics beyond 2025:  In 2011, NNSA’s Deputy Administrator for Defense Programs  requested proposals from the agency’s three nuclear weapons  laboratories for flagship experimental science, technology, and  engineering facilities to help ensure that NNSA will have the  capabilities to address future national security needs. In response,  Sandia submitted a proposal to NNSA in 2012 to construct a new,  multibillion-dollar microelectronics production facility, called the Center  for Heterogeneous Integration, Packaging, and Processes (CHIP2).  The Sandia proposal estimated that CHIP2 would take 14 years to  design and build at an estimated cost of $2.5 billion. The proposal  indicated that the facility would increase microelectronics functionality  and trustworthiness by creating a trusted supply chain into the future  for design, fabrication, testing, and packaging activities. As a result of  the time needed to design and construct CHIP2, investment would still  be needed to sustain the MESA SiFab Facility through 2025.

NNSA commissioned two studies by The Aerospace Corporation, a  federally funded research and development center sponsored by the  Air Force, to help the agency evaluate Sandia’s CHIP2 proposal  against other potential alternatives, such as contracting with  commercial entities to produce microelectronics. These studies,  completed in August and September 2014, generally ranked the  CHIP2 proposal at or near the top of the alternatives but also stated  that CHIP2 did not stand out as a decidedly better option.  Nonetheless, in early 2015, NNSA’s Deputy Administrator for Defense  Programs issued a memorandum recommending that NNSA pursue  the CHIP2 proposal as a formal capital asset project, subject to DOE’s  project management order on acquisition of capital assets.

In 2016, in accordance with DOE’s project management order, NNSA  developed two key documents during the initiation phase of its capital  asset project supporting the CHIP2 proposal, which NNSA referred to  as the Trusted Microelectronics Capability (TMC) project.

NNSA first developed a mission need statement, which is a formal  document that identifies a credible performance gap between  current capabilities and those needed to achieve the goals stated  in the agency’s strategic plan. The mission need should be  stated in a way that is solution-neutral. The project’s mission need  statement stated that, among other things, after 2025 the SiFab  Facility faced a severe risk of equipment and facility failures that  could have detrimental impacts on future microelectronics  production schedules. The statement noted that continued  refurbishment of the SiFab Facility beyond 2025 could result in  significant downtime during critical weapon development and  production cycles, as the facility was constructed in the 1980s and  was not sized for modern microelectronics production equipment  and supporting infrastructure.

NNSA next developed a requirements document, which describes  the ultimate goals the project must satisfy while also identifying  key assumptions and constraints. The requirements document  identified several key requirements, including that the TMC project  must be able to provide NNSA with trusted access to produce  microelectronics in support of the agency’s nuclear weapons  mission.

Between 2016 and 2017, in accordance with DOE’s project  management order, NNSA conducted an analysis of alternatives for  the TMC project based on achieving NNSA’s mission need statement.  Such an analysis identifies, analyzes, and selects a preferred  alternative to best meet the mission need by comparing the  operational effectiveness, costs, and risks of potential alternatives,  according to DOE documentation. During this process, NNSA  considered 21 alternatives for meeting the mission need statement,  among them the CHIP2 proposal as well as several alternatives that  included partnerships with commercial industry and other government  production facilities. The final TMC analysis of alternatives report,  dated January 2018, did not identify the CHIP2 proposal as a  preferred alternative because of the proposal’s high life-cycle costs,  high total project cost, and long project schedule. Instead, the report  identified two preferred alternatives as best meeting NNSA’s needs:  (1) partnering with an existing, government-owned, contractor- operated production facility other than Sandia; and (2) entering into  an interagency agreement with DOD and at least one member of the  intelligence community, as well as a commercial entity, to design,  build, and operate a state-of-the-art production facility.

Ultimately, NNSA decided not to pursue either preferred alternative  because of changing assumptions. For example, one of NNSA’s key  assumptions for the TMC analysis of alternatives was that the SiFab  Facility could not remain operational beyond 2025. However, NNSA  tasked The Aerospace Corporation to validate this assumption, and in  January 2018, The Aerospace Corporation completed a study concluding  that the SiFab Facility could remain viable until 2040 with prioritized and  well-planned infrastructure repairs and equipment replacements.  Another example of changing assumptions concerned the preferred  alternative under which NNSA would enter into an interagency agreement  with DOD and at least one member of the intelligence community to  design, build, and operate a state-of-the-art production facility. This  preferred alternative assumed that DOD, the intelligence community, or  both, would pay to develop and build the production facility (estimated to  cost from $350 million up to $1.2 billion), while NNSA would pay to equip  its portion of the production process. The TMC analysis of alternatives  report stated that commitment from DOD and the intelligence community  would be vital, and that this alternative carried significant execution risks.  In January 2018, NNSA documentation stated that this interagency  alternative was no longer viable because other agencies stated they were  no longer interested in a potential partnership.

Partly as a result of these changes in key assumptions, in November  2018, NNSA wrote in a letter to Congress that it was no longer requesting  funding for the TMC and was assessing what investments were needed  to extend the operational life of the SiFab Facility to 2040.

NNSA Has Decided to Upgrade and Sustain Its Microelectronics Capability at Sandia through 2040, but Its Management Approach Does Not Fully Incorporate Key Controls

As part of NNSA’s ongoing approach to managing its strategic radiation- hardened microelectronics activities, the agency plans to upgrade and  sustain its microelectronics capability at Sandia through 2040, which it  estimates will cost about $1 billion over the next 20 years. NNSA is also  in the preliminary stages of identifying and evaluating options for a  microelectronics capability beyond 2040. In addition, NNSA is starting to  implement a revised management approach, including appointing a  coordinator to guide certain aspects of its microelectronics activities.  However, NNSA’s approach does not fully incorporate key management  controls, such as developing an overarching management plan, which the  agency has applied to other important activities.

NNSA Plans to Upgrade and Sustain Its Microelectronics Capability at Sandia through 2040 and Is Beginning to Identify Options for a Capability Beyond 2040

In 2019, NNSA made three key decisions related to upgrading and  sustaining its microelectronics capability at Sandia through 2040. First,  NNSA approved plans to further upgrade its process for producing  microelectronics. This upgraded process, called CMOS8, contains some  features of the currently employed CMOS7 process, but is a more  advanced technology node that also includes many new features,  according to Sandia documentation. Second, NNSA approved plans to  produce and integrate into future nuclear weapons a more advanced type  of microelectronics component called a field programmable gate array  (FPGA). According to Sandia documentation, strategic radiation- hardened FPGAs can be produced using the CMOS8 process but not the  CMOS7 process. Third, Sandia developed and NNSA approved a plan to  identify, prioritize, and provide budget estimates to sustain Sandia’s  microelectronics infrastructure and equipment at the MESA Complex over  the next 20 years. This plan incorporates NNSA’s decisions to develop  the CMOS8 process and produce FPGAs.

According to NNSA and Sandia documents, the rationale behind and  expected benefits of these three key decisions are as follows:

The CMOS8 process will allow Sandia to produce microelectronics at  a smaller, more advanced technology node (180nm) compared with  the current CMOS7 technology node (350nm). NNSA documentation  states that, among other things, the CMOS8 process is expected to  produce microelectronics that have twice the processing speed  compared with those produced using the CMOS7 process. Such  advances are needed to help ensure that future nuclear weapons  remain safe, secure, and reliable while operating in increasingly  hostile threat environments and that the weapons meet increased  performance requirements, according to Sandia documentation.  According to NNSA officials, the agency agreed with Sandia’s  assessment on implementing the CMOS8 production process based,  in part, on findings and recommendations contained in an  independent study commissioned by NNSA and completed by  multiple entities including The Aerospace Corporation.

According to Sandia documentation, while FPGAs have never been  used before in a nuclear weapon, they may significantly reduce the  cycle time for microelectronics research, development, and production  compared with cycle times for ASICs used in nuclear weapons. This  reduction may be possible because the ASICs currently used in  nuclear weapons are uniquely designed and produced to carry out  specific functions, whereas FPGAs can be produced using a common  design and then programmed after production (but before insertion  into a nuclear weapon) to carry out different functions, according to  NNSA officials. Reduced cycle time from FPGAs could alleviate  schedule pressure on future weapon modernization programs  because cycle times for designing and producing ASICs for LEPs  have historically been about 10 years before production of the first  weapon, according to Sandia documentation.

Sandia’s plan will provide NNSA with the basis for the investment  profile needed to sustain the MESA Complex’s infrastructure and  equipment through 2040. Because the sustainment effort will last at  least 20 years, NNSA officials said that having a long-term planning  document that provides a current baseline for the condition of  Sandia’s microelectronics infrastructure and equipment, identifies  challenges, and recommends specific sustainment activities will be a  useful management tool.

The plan for extending the life of the MESA Complex at Sandia provides  cost and schedule estimates related to sustainment of existing facilities  and equipment, as well as installation of new equipment for CMOS8 and  development and maturation of the FPGA technology. Overall, the plan  calls for spending about $1 billion over the next 20 years. Specifically, the  plan identifies spending for the following activities:

Sustainment of existing facilities and equipment. The plan  identifies about $900 million in spending from fiscal years 2020  through 2040—or about $45 million a year for the next 20 years—to  complete identified infrastructure and equipment projects. The plan  calls for spending roughly half of the $900 million on projects to  upgrade existing infrastructure within the MESA Complex. In  particular, Sandia plans to spend about $120 million from fiscal years  2020 through 2024 on projects to improve or upgrade infrastructure  within the SiFab Facility that is considered to be in “poor condition”  based on information contained in NNSA’s infrastructure condition  database. The SiFab Facility is to be the physical location for the  majority of production tools for CMOS8. Two of these projects would  replace electrical power and distribution equipment at an estimated  cost of about $50 million, while another project would replace the  facility’s chemical distribution system at an estimated cost of about $5  million. Sandia plans to spend the other half of the $900 million on  equipment-related projects. For example, Sandia plans to spend  about $85 million from fiscal years 2021 through 2026 on projects to  support existing, non-CMOS8 production processes—such as  producing transistors in the Micro Fabrication Facility—as well as  activities that support microelectronics production, such as laboratory  analysis, testing, and packaging. For example, Sandia plans to spend  $1.5 million on a computerized tomography machine to support  microelectronics testing.

Development of CMOS8 and production of FPGAs. The MESA  Complex extended life plan identifies about $170 million in spending  from fiscal years 2020 through 2027 related to developing, maturing,  installing, and implementing the CMOS8 process and the FPGA  technology. Sandia contractor representatives told us that the CMOS8  process relies on newer and more advanced equipment to complete  critical individual processing steps compared with the current CMOS7  process. As a result, the plan identifies about $70 million (out of the  $170 million total) to acquire approximately 30 pieces of equipment,  which Sandia will need to install and then qualify their performance. In  addition, the plan identifies almost $90 million (out of the $170 million  total) for developing and maturing the CMOS8 production process and  the FPGA technology. According to Sandia documentation, Sandia  plans to begin using the CMOS8 process to produce FPGAs for  integration into a future nuclear weapon program at the end of fiscal  year 2027.

In addition to upgrading and sustaining Sandia’s microelectronics  capabilities through 2040, NNSA is in the preliminary stages of identifying  and evaluating options to ensure a continued microelectronics capability  beyond 2040, according to NNSA officials and documentation. In  particular, NNSA has identified the following two key options:

NNSA is in the initial stages of identifying and evaluating options to  construct a new facility for producing microelectronics by 2040 and  beyond. In December 2019, NNSA officials provided us with  documentation stating that the agency plans to begin evaluating  options for a new microelectronics facility in 2021 with the goal of  completing construction in 2030, installing needed equipment in the  completed facility by 2033, and qualifying the production process and  begin producing microelectronics for integration into nuclear weapons  no later than 2035. In NNSA’s fiscal year 2021 budget request, which  was released in February 2020, the agency requested funds to begin  evaluation and early planning activities for this new microelectronics  facility.

NNSA is also evaluating whether the agency might be able to  leverage a recent investment by DOD in a U.S. commercial  microelectronics production facility to help meet NNSA’s  microelectronics production needs after 2040. Specifically, DOD  announced in October 2019 that it had awarded a contract to a U.S.- owned-and-operated microelectronics commercial production facility  to, among other things, enhance its radiation-hardened  microelectronics production process to meet DOD’s microelectronic  needs for systems (such as satellites) that operate in environments  with increased radiation levels. Over the next two years, the U.S.  commercial microelectronics production facility plans to adapt its  current production process and develop a new process that will  produce microelectronics at a smaller node, according to DOD  documentation. According to NNSA officials we interviewed in  February 2020, NNSA and DOD are in preliminary discussions to  determine if NNSA could make additional investments in this same  facility to potentially produce strategic radiation-hardened  microelectronics for integration into nuclear weapons. NNSA officials  said that there was no firm timeframe for making an investment  decision because such a decision would need to be made after the  microelectronics facility begins producing microelectronics at the  smaller node.

NNSA Is Starting to Implementing a Revised Microelectronics Management Approach, but This Approach Does Not Fully Incorporate Key Management Controls

NNSA is starting to implement a revised approach to managing its  microelectronics activities. During our initial interviews with NNSA officials  in early 2019, they stated that NNSA had not established a formal  management structure to oversee the agency’s microelectronics  activities. Instead, they said that NNSA had delegated primary  responsible for overseeing such activities to two officials within NNSA’s  Office of Defense Programs, who both served in multiple positions and  had other duties within the office. According to these officials, once NNSA  formally canceled the TMC project in November 2018, management  efforts were focused on making initial determinations on the actions and  budget estimates needed to sustain NNSA’s existing microelectronics  capability at Sandia until 2040. These efforts included coordinating with  multiple NNSA offices—such as the Office of Safety, Infrastructure and  Operations—to understand their future microelectronics needs and  requirements and to review draft MESA Complex sustainment  documentation prepared by Sandia.

However, officials from NNSA’s Office of Defense Programs told us that  in late 2019 they determined that a more coordinated management  approach would better position NNSA to oversee microelectronics  activities and make informed budgetary and programmatic decisions.  Specifically, NNSA officials stated that in November 2019 the Office of  Defense Programs created and filled a new full-time microelectronics  coordinator position within a sub-office, the Office of Research,  Development, Test, and Evaluation. The microelectronics coordinator told  us that NNSA has not yet finalized an official position description for the coordinator role. However, the coordinator said that the position will  primarily be responsible for developing the CMOS8 process and the  FPGA technology and integrating the research and development activities  of the Office of Research, Development, Test, and Evaluation with  another sub-office, the Office of Production Modernization.

In addition, officials from NNSA’s Office of Defense Programs and Office  of Safety, Infrastructure and Operations told us that they continue to use  other existing processes to manage microelectronics activities at Sandia.  For example, these officials said that they use the annual planning,  programming, budgeting, and evaluation process, along with the annual  work authorization process, to coordinate across NNSA offices on  budgetary matters and work activities associated with microelectronics  activities at Sandia. As part of these processes, agency officials told us  that they issue annual implementation plans to direct the work of Sandia  contractors related to microelectronics activities. NNSA officials then  monitor the contractors’ progress toward completing the identified scope  of work and work activities. For example, NNSA officials said that they  conduct monthly meetings with contractor representatives to review  status and financial reports. They also said that they hold mid-year and  end-of-year program reviews with contractor representatives.

To help management achieve desired results—such as ensuring a  continued microelectronics capability—federal agencies design,  implement, and operate internal controls, which comprise the plans,  methods, policies, and procedures used to fulfill an entity’s mission,  goals, and objectives. Federal standards for internal control state that  management should, among other things: design control activities, such as by developing policies, procedures,  techniques, and mechanisms that enforce management’s directives,  to achieve objectives and respond to risk; and establish an organizational structure, assign responsibility, and  delegate authority to achieve the entity’s objectives.

NNSA has implemented internal controls at the agency level, in part, by  developing and implementing directives that provide an organizational  structure for the agency to plan, execute, control, and assess its  programs and projects while also assigning responsibility and delegating  authority for key management roles. For example, one purpose of  NNSA’s 2019 program management directives is to increase  management efficiency and effectiveness by, among other things, clearly  defining management responsibilities and authorities. In addition, DOE’s  project management order for the acquisition of capital assets lists  principles for successful project execution such as disciplined, up-front  planning; line management accountability; and effective implementation  of all management systems (such as risk and performance management)  supporting the project.

In particular and as applicable to front-end planning, NNSA’s and DOE’s  directives related to program and project management both include the  following controls:

Appointment of a federal manager, who is vested with the authority to  carry out assigned responsibilities to meet program or project  milestones on schedule and on budget, who manages the  coordination of deliverables between the multiple entities (such as  different program offices) involved, and who is responsible and  accountable for planning, implementing, and executing a program or  project, which includes responsibility for developing an overarching  management plan;

An overarching management plan, which establishes the procedures  to define, execute, and monitor a program or project, as well as  establishing specific requirements in a variety of areas—such as cost  estimating, an integrated schedule, performance management, and  risk management—to use to develop a baseline and against which to  measure and monitor;

A mission need statement, which identifies a credible gap between  current capabilities and those needed to achieve the goals stated in  the strategic plan; and

A requirements document that describes the ultimate goals the  program or project must satisfy while also identifying key assumptions  and constraints.

However, while some in NNSA and at Sandia have recognized the need  to coordinate microelectronics activities to effectively carry them out and  meet specific goals by specific dates, as evidenced by the hiring of a  coordinator, Office of Defense Programs leadership have not fully  developed controls to better manage and coordinate its microelectronics  activities. Specifically, NNSA does not have or has not fully developed the  following:

Federal manager with coordination or oversight authority. NNSA  has not established a federal management position with the authority  and accountability to better coordinate or oversee NNSA’s  microelectronics activities. Instead, as described above, agency  officials told us that NNSA’s Office of Defense Programs established a  coordinator position—within a sub-office, the Office of Research,  Testing, Development and Evaluation—in November 2019 to help  guide the agency’s efforts to develop the CMOS8 process and the  FPGA technology, among other things. Moreover, in May 2020, NNSA  stated that senior leadership within the Office of Defense Programs  have not endorsed the formal role of a microelectronics coordinator  and that the coordinator’s role and responsibilities are currently under  review. NNSA also stated that the coordinator has not been given  authority to manage an annual budget for microelectronics activities  and that it was unlikely that such authority would be granted.  This  statement stands in contrast to earlier statements made to us that the  coordinator would have responsibility for an annual budget of about  $50 million, subject to future appropriations.

Management plan. NNSA has not developed an overarching  management plan to guide and coordinate the agency’s  microelectronics activities. Instead, NNSA officials from the Office of  Defense Programs and the Office of Safety, Infrastructure and  Operations told us that the agency is in the very early stages of  developing a NNSA plan that will incorporate key decisions and  approaches outlined in the Sandia’s 20-year MESA sustainment plan,  among other things. While NNSA officials are still evaluating the  specific contents of this plan, they said that the plan may outline  specific roles and responsibilities for each NNSA office involved in  microelectronics, describe how these offices will interact with the  microelectronics coordinator, and provide options for future  microelectronics technology development efforts. However, it is  unclear whether the document will define the planning approach,  procedures, and processes that NNSA will use to ensure coordinated  management in multiple areas and across multiple offices, such as  developing cost estimates, an integrated schedule, and performance  metrics. Agency officials said that this plan, when finalized, will  provide a useful tool for coordinating various aspects of NNSA’s  microelectronics activities, but they did not provide an estimated date  for when the plan will be completed.

Mission need statement and requirements document. NNSA has  not developed a current mission need statement or a current program  requirement document. In 2016, as required by DOE’s project  management order on the acquisition of capital assets, NNSA issued  a formal mission need statement and a requirements document to  guide its assessment of the cancelled TMC project (as described  earlier in this report). However, agency officials told us that these  2016 documents are no longer applicable to NNSA’s current approach  to sustaining its microelectronics capability and evaluating options to  ensure a continued capability after 2040. NNSA officials said that they  intend to establish an updated set of requirements to guide the  agency’s future microelectronics capability, and that they will consider  these requirements in establishing a future mission need statement.  However, NNSA officials did not provide a timeframe for finalizing  these documents.

NNSA officials acknowledged the importance of using management  controls and that the controls described above would be useful, but they  could not identify any specific DOE or NNSA directives, government-wide  guidance, or best practices that they follow to manage their  microelectronics activities. Instead, they offered three reasons why the  agency has not implemented a more coordinated and robust set of  management controls to oversee the agency’s microelectronics activities:

Microelectronics production has historically been managed as a  component production effort by an LEP, which is led by an NNSA  program manager within the Office of Defense Programs who  coordinates directly with other NNSA offices and Sandia contractors.

Because NNSA has not designed microelectronics as a formal  program, the requirements contained in the agency’s program  management directives are not binding on microelectronics activities.

NNSA officials said that the multiple projects (identified in the MESA  Complex extended life plan) to upgrade and sustain the  microelectronics capabilities at Sandia through 2040—at an estimated  cost of over $1 billion over 20 years—will not be subject to DOE’s  project management order, as these projects are for sustainment and  not for new facility construction. According to officials from NNSA’s  Office of Safety, Infrastructure, and Operations, infrastructure  investments are being planned and managed as maintenance and  repair efforts.

NNSA officials told us that the agency’s current efforts provide the  necessary structure for NNSA to oversee and manage its  microelectronics capability. However, NNSA has recognized the  importance of implementing a more coordinated and robust set of  management controls for other important activities within its nuclear  security mission that similarly have not been treated in the past as  specific programs. For example, as we reported in June 2019, while  NNSA historically managed its high-explosive capability without a formal  mechanism to coordinate activities across multiple programs, it recently  implemented a more robust set of management controls to oversee its  high-explosive activities. Specifically, in 2018 NNSA appointed an  enterprise manager to help coordinate these activities. NNSA also  encouraged the enterprise manager to adopt, where appropriate, the  program management controls contained in an NNSA directive on  managing nuclear weapon life extension and strategic materials  programs. Subsequently, the enterprise manager issued a strategic plan  that provided an organizational structure for the agency’s high explosives  capability. By taking a similar approach to its management of  microelectronics activities and incorporating a more coordinated and  robust set of management controls, the agency would have increased  assurance that its planned microelectronics activities are clearly defined,  efficiently executed, and effectively monitored.

NNSA’s ability to produce unique microelectronics for nuclear weapons is  essential to ensuring a credible U.S. nuclear deterrent. Producing such  microelectronics is a complex task, and NNSA is limited in its ability to  partner with the commercial sector for such production. Over the next two  decades, NNSA will undertake an expensive and ambitious approach to  upgrade and sustain its existing microelectronics production facilities and  capabilities. Specifically, NNSA plans to spend about $1 billion over the  next 20 years to, among other things, upgrade its process to produce a  new type of microelectronic component that has never been integrated  into a nuclear weapon. In addition, NNSA officials said that the agency  will need to identify and analyze options for a continued capability after  2040, and that effort could begin as early as 2021.

To increase its management and oversight of the agency’s  microelectronics activities, NNSA has taken some positive steps such as  appointing a microelectronics coordinator within the Office of Defense  Programs and approving certain long-term planning documents.  However, in contrast to other NNSA activities, including programs and  projects, NNSA has not fully developed a coordinated and robust set of  management controls to oversee its microelectronics activities. For  example, NNSA has not established an overarching management plan to  manage and coordinate the cost, schedule, and risks associated with its  microelectronics activities. By incorporating a more coordinated and  robust set of management controls, NNSA would have increased  assurance that its planned microelectronics activities are clearly defined,  efficiently executed, and effectively monitored.

The NNSA Administrator should incorporate additional management  controls to better oversee and coordinate NNSA’s microelectronics  activities. Such management controls could include investing the  microelectronics coordinator with increased responsibility and authority,  developing an overarching management plan, and developing a mission  need statement and a microelectronics requirements document.  (Recommendation 1)

We provided a draft of this report to DOD and NNSA for review and  comment. DOD did not provide any comments. In its written comments,  reproduced in appendix I, NNSA neither agreed nor disagreed with our  recommendation but provided three main comments. First, NNSA stated  that by December 2020 the agency plans to complete a strategic  management plan that will more clearly articulate the integration of  management controls for the various components of its microelectronics  activities. NNSA stated that it believes this action is consistent with our  recommendation. We are encouraged by this planned action and will  evaluate the completed strategic management plan to determine if it  meets the intent of our recommendation.

Second, NNSA stated that our report did not clearly convey the  differences between the management of microelectronics and other  weapons or materials programs and did not include all aspects of its  microelectronics activities (such as the procurement of commercial off the  shelf components) in our audit’s scope. In response, we added  references to the various aspects of NNSA’s microelectronics activities  and clarified that our report focuses on NNSA’s strategic radiation- hardened microelectronics activities at Sandia’s MESA Complex. As  stated in the report, we focused on this specific aspect of NNSA’s  microelectronics mission because of the language in the Senate  committee report accompanying a bill for the National Defense  Authorization Act for Fiscal Year 2019, which included a provision for us  to review NNSA’s efforts to recapitalize its strategic radiation-hardened  microelectronics design and production capacity. We also focused on this  specific aspect of NNSA’s mission because the fiscal year 2020 Stockpile  Stewardship and Management Plan lists the continued production of  strategic radiation-hardened microelectronics as one of four key  challenges to the agency’s nuclear stockpile mission.

Third, NNSA stated that our audit did not include an assessment of  management controls for the range of activities that work together to  ensure the effectiveness of microelectronics planning and execution.  However, our report identifies and describes these management controls,  and as part of our work we considered how these controls work together.  In addition and as stated above, NNSA intends to complete a strategic  management plan to more clearly articulate the integration of its various  microelectronics management controls, which is especially important as  the agency invests about $1 billion dollars over the next 20 years while  simultaneously needing to meet microelectronics production deliverables  for multiple nuclear weapon modernization programs.

NNSA also provided technical comments, which we incorporated in our  report as appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of Energy, the Secretary of Defense, 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 have any questions about this report, please contact  me at (202) 512-3841 or at 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 key contributions to this  report are listed in appendix II.

Appendix I: Comments from the National Nuclear Security Administration

Appendix II: GAO Contact and Staff Acknowledgments

Allison B. Bawden at (202) 512-3841 or bawdena@gao.gov  In addition to the contact named above, Jason Holliday (Assistant  Director), Patrick Bernard (Analyst in Charge), and Alisa Carrigan made  key contributions to this report. Also contributing to this report were  Jonathan Felbinger, Juan Garay, Lisa Gardner, Cindy Gilbert, Cynthia  Norris, and Dan C. Royer.

Microelectronics used in nuclear weapons must function in environments with extremely high radiation levels. The National Nuclear Security Administration’s only source for producing these specialized microelectronics are aging facilities at Sandia National Labs.

NNSA is starting a $1 billion, 20-year effort to upgrade and sustain Sandia’s existing facilities and nuclear capabilities. NNSA has appointed a coordinator to lead this effort, but hasn’t fully developed a thorough set of controls for managing the cost, schedule, and associated risk. We recommended they develop such plans to effectively carry out planned microelectronics activities.