Audit Report: DOE-OIG-18-42

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August 9, 2018

The Sandia National Laboratories Silicon Fabrication Revitalization Effort

The primary mission of the Department of Energy’s National Nuclear Security Administration (NNSA) is to ensure the safety, reliability, and performance of the Nation’s nuclear weapons stockpile.  The NNSA’s Sandia National Laboratories (Sandia) supports this mission through the development, design, and manufacturing of strategic radiation-hardened microelectronics at its Silicon Fabrication (SiFab) facility.  The SiFab facility, constructed in 1988, reached its design end of life in 2013 and relies on fabrication tools configured for processing 6-inch silicon wafers to produce the radiation-hardened integrated circuits used in the stockpile.  Commercial support for maintaining fabrication tools for 6-inch silicon wafers no longer exists.  To address this problem, in 2012, Sandia began the Sandia Silicon Fabrication Revitalization (SSiFR) effort with the objective of reducing the risk of SiFab equipment failures through the replacement or refurbishment of tools and facility modifications.  The SSiFR was originally scheduled to be completed in fiscal year 2018 with a Total Project Cost (TPC) of $150 million.

Because of the importance of the SiFab to the nuclear weapons program, and the Department’s long history with project management issues, we conducted this audit to determine whether Sandia had effectively managed the SSiFR project.

Our review revealed that Sandia had managed the SSiFR project scope within the planned cost and schedule, but NNSA did not require Sandia to execute the project within Departmental requirements.  We identified issues that, if corrected, should improve Sandia’s management of SSiFR and NNSA’s oversight of SSiFR. Nothing came to our attention to indicate that Sandia will not continue to make progress in refurbishing or replacing silicon fabrication tools and facility modifications.  Nevertheless, the issues we identified may contribute to problems in project execution in the future. We noted that Sandia had not:

• Generated reliable, accurate, and reasonable earned value data related to cost and completion estimates for managing SSiFR;

• Employed an earned value management system certified by the Department as compliant with established standards;

• Included NNSA in the baseline change approval process; and

• Established management reserve based on a formal risk analysis, and instead, determined management reserve as a percentage of remaining project costs.

These conditions occurred because NNSA Safety, Infrastructure, and Operations, the organization originally overseeing the SSiFR project, did not require Sandia to manage the SSiFR project in accordance with Department Order 413.3B1.  Following Department Order 413.3B would have required Sandia to use management practices that should have provided greater rigor in project execution.

We made recommendations to the Administrator, National Nuclear Security Administration to address the issues identified.  Management’s comments and proposed actions were generally responsive to our findings and recommendations.

Topic: National Security & Safety