How a $5 part used to modernize nuclear warheads could cost $850 million to fix

WASHINGTON — Issues with commercial parts on two nuclear warhead modernization projects could cost up to $850 million to fix, but the agency in charge of America’s warheads believes it has a solution.

The issue, first revealed by Verdon during the Sept. 4 Defense News Conference, would put both warhead modernization programs at an 18- to 20-month delay of their first production units, although NNSA is hopeful there won’t be significant delays on the overall program timelines.

The parts in question are commercially available capacitors that, during stress testing, did not give NNSA confidence they could survive the 20-30 years needed for these designs. Verdon stressed that the parts were not at risk of failure under normal circumstances, but that the agency was acting out of an abundance of caution for the long-term life of the weapons.

That caution is pricey: the Original capacitors, Verdon said, ran about $5 per unit. The upgraded ones, built to a higher standard NNSA believes can survive the lifetime of the programs, come in at $75 per unit. All told, the B61-12 will cost an extra $600-700 million, and the W88 will cost about $120-$150 million because of the capacitor issue.

Speaking at a House Strategic Forces Subcommittee hearing Wednesday, Charles Verdon, deputy administrator for defense programs at the National Nuclear Security Administration, said the costs associated with replacing commercial parts on the B61-12 and W88 Alteration 370 warhead programs could be recouped by savings found in future modernization activities.

Verdon’s hope is that lessons learned from these issues can be applied to “design simplifications” on modernization efforts on two warheads, the 80-4 and the W87-1, and allow NNSA to bring costs down on those programs in the long term.

Those savings, combined with built-in contingency funding for delays, should mean that even as the B61 and W88 programs experience cost increases, the whole warhead portfolio will be neutral from an increased-cost perspective. In other words, the two programs furthest along now need an increase of funding in the short term, but those investments should lead to savings down the road to balance it out.

“That is going to be our approach: to not request any increase to the bottom line of the modernization effort but to balance it within the modernization portfolio,” he said,

before telling the subcommittee chair, Rep. Jim Cooper, D-Tenn., that he hopes to have more fidelity on that in the coming year. Verdon added that any funding increases would come in fiscal 2021, not through a reprogramming request for fiscal 2020.

The B61-12 program, which will replace the B61-3, -4, -7 and -10 nuclear gravity bomb variants with a new warhead design, is expected by NNSA to cost $8.25 billion over the life-extension program.

The upgraded variant will be certified on the B-2, the future B-21, America’s F-15 and F-16 fighter aircraft, and British and German Tornado aircraft under a NATO agreement. The F-35 is expected to go through certification on the weapon at some point in the next decade.

The W88 Alteration 370 is meant to replace the arming, fuzing and firing subsystem for the W88 warhead for the Trident II sub-launched ballistic missile. NNSA estimates the cost of that system at about $2.7 billion.

The capacitor issue has raised a broader question of how NNSA deals with commercial off-the-shelf technologies. During the Cold War, roughly 70 percent of NNSA warhead parts were made in-house; that figure has entirely flipped now, with 70 percent of parts now commercial off-the-shelf. That comes with new challenges that the agency, which has not run a major warhead modernization effort in years, didn’t anticipate.

“What we didn’t recognize, and one of the lessons we’ve learned, is the variability that can exist even within a given vendor just between different lots. If you buy components and get different lots, there can be variability in how they are produced,” Verdon told the subcommittee. He said that the agency “underestimated” how much variability there can be, and said the agency is reviewing how it inspects and works with off-the-shelf components to be more rigorous about quality.

Asked by Rep. Doug Lamborn, R-Colo., whether the agency needs to consider bringing more production in-house, Verdon acknowledged it was something under discussion.

“We’re improving our interactions with the vendors themselves. We’re trying to make sure vendors understand our requirements very early in the process,” he said. “In some case the vendors want to work with us and will actually improve their processes to meet our requirements. We’re going to look at it on a part-by-part basis. For those parts vendors that will have a hard time [meeting those requirements], we would look to bring those back in house.”

‘No sacred cows’

While NNSA may be challenged in the short term with the B61-12, the Department of Defense is making progress on its portion of the weapon, including the development and procurement of new tail kits for the bomb.

On Tuesday evening, NNSA announced that a trio of bomb tests in August were successful, setting up a final demonstration test in 2020 with an F-16 jet. And last week, Gen. Timothy Ray, the head of Air Force Global Strike Command, said he is “very happy” with how the tail kit was progressing.

“So far, I think the releases went as we wanted them to,” Ray said at the Air Force Association’s annual conference. “That is an [Air Combat Command] test, technically not a Global Strike test as all the test business stays there, but I was there last week and my feedback was there were three good releases.”

While the witnesses at the subcommittee did not face hard questions from lawmakers during the public portion of the hearing, the subpanel did open on a tense note, with ranking member Rep. Mike Turner, R-Ohio, making it clear he was at the hearing under protest.

“I want to express my disappointment that we’re even having this hearing. We have a longstanding tradition in our committee that we don’t have hearings, public hearings especially, on issues being considered in conference,” Turner said, noting that the future of both warheads is part of the FY20 budget negotiations now underway.

“The only reason we must be in public is for [Democrats] to have some difficult discussionsabout support for our nuclear deterrent,” Turner said. “This is a disappointment. This is continued politicization of the process of this committee that we’ve seen throughout this year.”

Cooper, after allowing opening statements from the witnesses, replied that “the purpose of this hearing today is just to watch over taxpayer dollars. We have an obligation, as stewards of taxpayer dollars, to make sure it is properly spent, and anytime there is a delay or cost overrun, I think it’s worthy of note.”

“There are vitally important programs for America, but there are no sacred cows, so we need to make sure 18-month, two-year delays, cost overruns can be better understood so they can be avoided in the future,” Cooper added.