News | March 23, 2021

Assuring the Nation’s Strategic Deterrent: Nuclear Enterprise Modernization Challenges and Opportunities

Nuclear deterrence is the foundation of U.S. national security and underpins every U.S. military operation. As Russia completes its nuclear modernization and China expands its nuclear force, the United States faces two nuclear-capable, strategic peer competitors for the first time.
Unlike Russia and China, most systems in the U.S. nuclear enterprise have served far beyond their initial design life.

Across the nuclear enterprise, program offices face many common challenges. The decades between recapitalization programs require the United States to reconstitute industrial capacity and human capital to meet the growing demand. The Department of Defense must sustain legacy systems for decades as modernization proceeds on a tight schedule. This dual effort creates competition for funds, industrial capacity, and specialized labor. Nuclear weapon systems are held to the highest safety and security standards, which makes it difficult, slow, and costly to innovate or introduce emerging technology. Although there has been consistent support across presidential administrations for an effective nuclear deterrent, conflicting cost estimates are a target for opponents of recapitalization, and program offices must consider the equities of a
range of stakeholders, particularly Congress.

The U.S. defense industrial base that supports the nuclear enterprise suffers from limited competition that reduces the incentive to innovate. This lack of innovation makes it more difficult to recruit and retain talent in a highly competitive labor market. As supporting industries become increasingly globalized and focused on commercial customers, it is more difficult to secure the supply chain and adopt emerging technology. Although demand conditions are strong, a growing regulatory burden and slow approval processes deter new companies from entering the
market and discourage existing contractors from investing in research and development.

These challenges make it more difficult for the nuclear enterprise to innovate, manage risk, maintain acquisition schedules, contain costs, and recruit and retain talent. However, the United States also possesses historical advantages, including decades of cooperation between
government, industry, and academia to develop nuclear weapon systems. Each program office takes a unique approach to address these concerns.

Effective 21st century strategic deterrence will require the United States to develop the talent and industrial capacity to employ strategic deterrence principles, exploit strategic advantages within the U.S. innovation ecosystem, and adapt to the contemporary global security environment. Although the challenges are significant, they are not insurmountable. This report provides recommendations aimed at communicating a consistent strategic narrative, developing comprehensive strategies to address cross-cutting challenges, transferring best practices across the enterprise, and improving incentives for innovation within industry. If the nation takes these steps and remains politically and financially committed to recapitalization, it will be better postured to secure itself and its allies from future threats.

Summary of Challenges:

  • Chinese and Russian Modernization
  • U.S. Modernization Gap Requires Reconstituting Industrial Capacity and Human Capital
  • Integration of Legacy and Modern Systems
  • Simultaneous Sustainment and Modernization—No Margin for Delay
  • Competition Among Programs for Funds, Labor, and Industrial Capacity
  • Always/Never Standard Slows Upgrades and the Introduction of Emerging Technology
  • Conflicting Cost Estimates
  • Budgetary Uncertainty
  • Multiple Stakeholders with Competing Interests
  • Limited Competition in the Industrial Base Deters Innovation
  • Lack of Specialized Labor and Difficulty Recruiting and Retaining Talent
  • Incorporating Emerging Technologies and Development Processes
  • Securing an Increasingly Globalized and Commercialized Supply Chain
  • Growing Regulatory Burden and Inefficient Approval Processes

Summary of Recommendations:

1.  Communicate a Consistent Strategic Narrative to Congress, Industry, and the Public

  • Designate a Lead to Develop a Coherent Narrative Across the Enterprise
  • Ensure a Consistent Narrative to Congress to Sustain Budgetary Support
  • Convey a Consistent Narrative to Industry to Send a Clear Demand Signal
  • Communicate a Consistent Narrative to the Public to Reiterate the Importance of Modernization and Encourage Talent to Join the Nuclear Enterprise

2.  Develop Comprehensive Strategies and Transfer Best Practices Across the Nuclear Enterprise

  • Embrace and Execute a Mindset of “Integrated Deterrence”
  • Build an Integrated Network of Epicenters to Bridge Gaps Between Modernization and Sustainment Efforts
  • Baseline Security and Certification Requirements and Streamline Approval Processes
  • Embrace Emerging Technologies Smartly
  • Reinvigorate Deterrence Intellectual Capital
    • Invest in the National Security Workforce and STEM Education
    • Maximize Opportunities to Create Deterrence Expertise

3.  Increase Incentives for Innovation in Industry

  • Avoid the Temptation of Vertical Integration
  • Pursue Modular Open System Architectures (MOSA) to Encourage Internal Research and Development (IRAD) Expenditures and Participation by Smaller Firms
  • Develop Challenging Benchmarks for Contract Award Fees
  • Leverage All Aspects of the Adaptative Acquisition Framework and Seek New Authorities

Read the report →