Why It Matters

A recent report found that the National Nuclear Security Administration (NNSA) is not consistently using a contracting tool that could improve accountability over one of the federal government's largest and most consequential spending portfolios. NNSA spends more than $20 billion per year on nine management and operating (M&O) contracts to run the government-owned, contractor-operated sites of the nation's nuclear security enterprise, and plans to spend nearly $200 billion over the next decade modernizing nuclear weapons production and research infrastructure.

The U.S. Government Accountability Office (GAO) found that NNSA lacks documented criteria for deciding when to use individual contract line item numbers, a tool introduced in 2014 to bring greater visibility to specific efforts within those contracts. Without clear, written criteria, GAO concluded, NNSA lacks reasonable assurance that contracting officers are applying consistent and appropriate standards, potentially missing opportunities to improve contractor accountability and performance.

The Big Picture

Line items, as GAO describes them, capture information about separately identifiable goods and services the government seeks to acquire within an overall contract. NNSA's M&O contracting portfolio totaled close to $24 billion in fiscal year 2025 alone, and the agency's plans call for nearly $200 billion in nuclear modernization spending over the coming decade, covering weapons production facilities, research infrastructure and capital asset projects at sites across the country. GAO found that without documented criteria for deciding when to use separate line items, NNSA lacks reasonable assurance that contracting officers apply consistent and appropriate standards and may miss opportunities to improve accountability and contractor performance.

When NNSA introduced line items in 2014, it intended to increase visibility of specific efforts. According to NNSA officials and M&O contractor representatives interviewed by GAO, line items can also allow the agency to develop separate contractor fee plans and performance evaluations for high-risk, high-value projects.

Despite those potential benefits, NNSA has used the tool minimally. Of 21 capital asset projects with approved performance baselines as of June, only five are covered by separate line items in M&O contracts. Those five cover two projects at the Y-12 National Security Complex related to the Uranium Processing Facility, two projects at the Savannah River Site related to the Savannah River Plutonium Processing Facility, and one project at Sandia National Laboratories for Power Sources Capability. One smaller project and two projects under a former contract were completed as separate line items.

Broader Context

NNSA officials told GAO they are considering adding at least two other construction projects at one site as separate line items.

Officials and M&O contractor representatives acknowledged to GAO that separate fee plans and performance evaluations, while beneficial for oversight, require additional administrative resources to implement, which they cited as a drawback of the approach. NNSA officials said they weigh factors such as total project cost, complexity, and whether dedicated appropriations exist when deciding whether to use line items, but they have not documented those considerations in policy or guidance.

GAO also found that NNSA has not fully assessed or documented lessons learned from its existing use of line items, meaning institutional knowledge about what has and has not worked is not being captured in ways that could inform future acquisition decisions. GAO found that documenting those lessons could help NNSA retain information needed to use line items effectively and appropriately while avoiding spending administrative resources on ineffective acquisition approaches.

Senate Report 118-188, accompanying S. 4638, the National Defense Authorization Act for Fiscal Year 2025, mandated the report and directed GAO to review NNSA's use of line items in its M&O contracts and how line items can improve contract oversight. GAO reviewed NNSA's M&O contracts, compared NNSA's practices to Department of Energy (DOE) acquisition policy and relevant internal control standards, and interviewed DOE and NNSA headquarters and field office officials, as well as M&O contractor representatives.

The Bottom Line

GAO issued two recommendations to NNSA's associate administrator for the Office of Partnership and Acquisition Services: document in policy or guidance the process and criteria contracting officers should use when determining which deliverables warrant separate line or subline items, and assess and document lessons learned from the use of separate line items to inform future acquisition policies and practices.

Both recommendations remain open. NNSA identified steps it plans to take to address them. Until NNSA documents criteria for determining when to use separate line items and assesses lessons learned from their use, the agency lacks reasonable assurance that contracting officers are using consistent and appropriate criteria when making those decisions and risks missing opportunities to improve accountability and contractor performance.

You can track the status of those open recommendations through Legis1.com.

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