Chemical Weapons: Destruction Schedule Delays and Cost Growth
Continue to Challenge Program Management (01-APR-04,
GAO-04-634T).
Since its inception in 1985, the Chemical Demilitarization
(Chem-Demil) Program has been charged with destroying the
nation's large chemical weapons stockpile of over 31,000 tons of
agent. The program started destroying the stockpile in 1990. As
of March 2004, the program had destroyed over 27 percent of the
stockpile. The program has recently reorganized into the Chemical
Materials Agency (CMA) to manage seven of the nine sites. There
are five sites using incineration to destroy the agent and two
bulk agent only sites using neutralization. The Assembled
Chemical Weapons Alternatives (ACWA) Program, in the Department
of Defense (DOD), manages two sites using neutralization to
destroy agent in weapons. This testimony updates GAO's September
2003 report and October 2003 testimony. As requested, it focuses
on the following issues: (1) changes in the status of schedule
milestones and costs at the sites, (2) recent developments that
impact the Chemical Weapons Convention (CWC) deadlines, (3) the
challenges associated with managing the program, and (4) an
update on the status of the Chemical Stockpile Emergency
Preparedness Program (CSEPP).
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-634T
ACCNO: A09660
TITLE: Chemical Weapons: Destruction Schedule Delays and Cost
Growth Continue to Challenge Program Management
DATE: 04/01/2004
SUBJECT: Chemical and biological agents
Emergency preparedness
Noncompliance
Program management
Schedule slippages
Strategic planning
Cost estimates
DOD Chemical Demilitarization Program
DOD Chemical Stockpile Emergency
Preparedness Program
Chemical Weapons Convention
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GAO-04-634T
United States General Accounting Office
GAO Testimony
Before the Subcommittee on Terrorism, Unconventional Threats and
Capabilities, Committee on Armed Services, House of Representatives
For Release on Delivery
Expected at 10:00 a.m. EST CHEMICAL WEAPONS
Thursday, April 1, 2004
Destruction Schedule Delays and Cost Growth Continue to Challenge Program
Management
Statement of Raymond J Decker, Director Defense Capabilities and Management
GAO-04-634T
Highlights of GAO-04-634T, testimony to the Subcommittee on Terrorism,
Unconventional Threats and Capabilities, Committee on Armed Services,
House of Representatives
Since its inception in 1985, the Chemical Demilitarization (Chem-Demil)
Program has been charged with destroying the nation's large chemical
weapons stockpile of over 31,000 tons of agent. The program started
destroying the stockpile in 1990. As of March 2004, the program had
destroyed over 27 percent of the stockpile. The program has recently
reorganized into the Chemical Materials Agency (CMA) to manage seven of
the nine sites. There are five sites using incineration to destroy the
agent and two bulk agent only sites using neutralization. The Assembled
Chemical Weapons Alternatives (ACWA) Program, in the Department of Defense
(DOD), manages two sites using neutralization to destroy agent in weapons.
This testimony updates GAO's September 2003 report and October 2003
testimony. As requested, it focuses on the following issues: (1) changes
in the status of schedule milestones and costs at the sites, (2) recent
developments that impact the Chemical Weapons Convention (CWC) deadlines,
(3) the challenges associated with managing the program, and (4) an update
on the status of the Chemical Stockpile Emergency Preparedness Program
(CSEPP).
April 1, 2004
CHEMICAL WEAPONS
Destruction Schedule Delays and Cost Growth Continue to Challenge Program
Management
Since GAO testified in October 2003, the Chem-Demil Program continues to
fall behind its schedule milestones, which were last extended in 2001. In
the last 6 months, very little agent has been destroyed. While one site
has closed, no new sites have started destroying agent (two were scheduled
to start by March 2004). The delays stem from incidents during operations,
environmental permitting issues, concerns about emergency preparedness,
and unfunded requirements. If these delays persist, GAO continues to
believe that program costs will rise substantially higher than the October
2003 estimate of more than $25 billion. These rising costs have led to the
need to reallocate funds within the program's fiscal year 2005 budget.
Due to schedule delays, the United States will not meet the CWC April 2004
deadline to destroy 45 percent of the stockpile. Although it has received
an extension for this task to December 2007, it is questionable if the
program will meet this deadline. DOD has said it will ask for an extension
of the final deadline to destroy 100 percent of the stockpile beyond 2007.
Unless the program resolves the problems causing program delays, the
United States risks not meeting this deadline, if extended.
One positive development in the program is that the leadership has been
stabilized for over a year since the program was reorganized. However,
several long-standing organizational and strategic planning issues remain.
One problem is that the program's new management structure is complex,
with multiple lines of authority within the Army and the separation of
ACWA from the rest of the program. These complexities raise concerns about
the roles and responsibilities of the different parts of the program.
Program officials also told us that they are developing strategic and risk
mitigation plans, as GAO recommended.
Since GAO testified in October, there continues to be improvement in the
preparation of state and local communities to respond to chemical
emergencies. As of January 2004, 6 of 10 states near the stockpiles report
they are fully prepared. This is a marked improvement from the status we
reported in 2001 when three states reported they were far from being
prepared. However, CSEPP costs continue to rise because some states have
expanded their preparedness requests beyond their approved budgets.
www.gao.gov/cgi-bin/getrpt?GAO-04-634T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Raymond J. Decker at (202)
512-6020 or deckerrj@gao.gov.
Mr. Chairman and Members of the Subcommittee:
I appreciate the opportunity to participate in this hearing today on the
Department of Defense's (DOD) Chemical Demilitarization (Chem-Demil)
Program. Since its inception in 1985, this program has been charged with
destroying the nation's large chemical weapons stockpile, second only to
Russia's in terms of its size. After years of planning and building new
facilities, the program started destroying the stockpile in 1990. Since
1990, we have issued more than 25 reports on the Chem-Demil Program.
Nearly half of the reviews have raised questions about the program's
growing costs, its inability to meet its schedule milestones, and its
management weaknesses.
As you requested, my statement updates GAO's testimony from October 2003
and focuses on the following issues: (1) changes in the status of schedule
milestones and costs at the sites, (2) recent developments that impact the
Chemical Weapons Convention (CWC) deadlines, (3) the challenges associated
with managing the program, and (4) an update on the status of the Chemical
Stockpile Emergency Preparedness Program (CSEPP).
As of March 2004, the Chem-Demil Program had destroyed an estimated 8,691
tons (27.6 percent) of the total 31,500 tons of the original agent
stockpile stored at nine sites in the United States and the Pacific Ocean
at Johnston Atoll. Since our testimony in October 2003, the program has
destroyed very little additional agent (about 1.5 percent). Of the four
sites that have begun agent destruction operations, Johnston Atoll has
destroyed its entire stockpile and is closed; Tooele, Utah, has reduced
its stockpile by about 47.1 percent; Anniston, Alabama, has destroyed 5.1
percent of its stockpile; and Aberdeen, Maryland, has destroyed 7.9
percent of its stockpile. Current schedule estimates show that the Army
will not complete destruction of the entire stockpile until after the year
2012.
For this testimony, we conducted work that included discussions with
officials from DOD, the Army, and FEMA. We also drew on the work we
conducted for our September 2003 report1 and October 2003 testimony.2
1U.S. General Accounting Office, Chemical Weapons: Sustained Leadership,
Along with Key Strategic Management Tools, Is Needed to Guide DOD's
Destruction Program, GAO-03-1031 (Washington, D.C.: Sept. 5, 2003).
We performed our work in March 2004 in accordance with generally accepted
government auditing standards.
Summary In summary, we found the following:
o Since we testified in October 2003, the Chem-Demil Program continues
to fall behind its schedule milestones, which were extended in 2001. These
schedule delays led to increased program costs and very little agent
destruction over the last 6 months. We testified that four incineration
sites and one bulk agent site would miss their scheduled milestones.
However, since then, one of the incineration sites has closed and an
additional bulk agent site has missed its scheduled milestone, resulting
in five sites remaining behind approved destruction schedules. The
remaining three sites-two Assembled Chemical Weapons Alternatives (ACWA)
sites and one incineration site have not yet missed schedule milestones,
but they too have experienced delays. The delays stem from ongoing
incidents during operations, environmental permitting issues, concerns
about emergency preparedness, and unfunded requirements. If these delays
persist, we continue to believe that program costs will rise substantially
higher than the October 2003 estimate of more than $25 billion. These
rising costs have led to the need to reallocate funds within the program's
fiscal year 2005 budget.
o Because of schedule delays, the United States will not meet CWC's
April 2004 deadline to destroy 45 percent of the chemical stockpile. The
United States asked the governing body of the convention for and received
an extension for this deadline to December 2007. Although it has received
an extension for this task, it is questionable if the program will meet
this deadline. Moreover, DOD has said it will ask for an extension of the
final deadline to destroy 100 percent of the stockpile beyond 2007. Unless
the Chem-Demil Program is able to resolve the problems that have caused
schedule delays to destroy the stockpile, the United States also risks not
meeting CWC's deadline to destroy the entire stockpile, if extended to
2012.3
o We previously testified that despite efforts to improve the management
and reorganize the Chem-Demil Program, the program has suffered from
2U.S. General Accounting Office, Chemical Weapons: Better Management Tools
Needed to Guide DOD's Stockpile Destruction Program, GAO-04-221T
(Washington, D.C.: Oct. 30, 2003).
3 The CWC allows extensions of up to 5 years to the 2007 deadline.
several long-standing and unresolved management, organizational, and
strategic planning issues. Recently, under the new organization, the
leadership of the program has stabilized. However, the program's complex
management structure, with multiple lines of authority within the Army and
the separation of program components between the Army and DOD, raises
concerns about the roles and responsibilities of the different parts of
the program. For example, DOD manages two of the program's nine sites
separately from the Army's management of the other sites. In addition, the
absence of an overarching, comprehensive management strategy has resulted
in a program without a clear road map to closely guide and integrate all
of its activities and monitor its performance. Neither DOD nor the Army
has adopted a comprehensive risk management approach that could help
mitigate potential problems that affect program schedules, costs, and
safety by anticipating problems and developing proactive plans. Program
officials also told us that they are developing strategic and risk
mitigation plans, as we have recommended.
o Since our October 2003 testimony, states and communities have
continued to improve their emergency preparedness to respond to chemical
incidents. Based on the states' self-assessments and FEMA's reviews, 6 of
the 10 states near the eight storage sites are fully prepared and the
remaining 4 are close to being fully prepared. In addition, in response to
recommendations in our 2001 report,4 FEMA and the Army have implemented a
number of actions to improve technical assistance and guidance, training,
and compliance measures to assess preparedness. However, despite these
accomplishments, CSEPP costs continue to rise because some state and local
communities have expanded their emergency preparedness requests beyond
their approved budgets. The requests for fiscal years 2004 and 2005
exceeded approved budgets by a total of $88 million. In a few communities,
these requests have grown as the sites have moved closer to the agent
operations phase. These unfunded requirements have caused further delays
in overall program operations because funds have to be diverted from other
sites approved budgets to pay for these communities' requirements. To
date, CSEPP has spent a total of $723 million in local communities.
4 Chemical Weapons: FEMA and Army Must Be Proactive in Preparing States
for Emergencies, GAO-01-850 (Washington, D.C.: Aug. 13, 2001).
Most Sites Will Miss Schedule Milestones Due to Program's Inability to
Anticipate and Influence Issues
Since our October 2003 testimony, the Chem-Demil Program continues to
struggle to meet its schedule milestones and remain within its cost
estimates. These schedule delays led to increased program costs and very
little agent has been destroyed over the last 6 months. We testified then
that most incineration sites would miss their scheduled milestones
established in 2001. At that time Anniston, Umatilla, and Pine Bluff had
missed their 2001 milestones to begin agent destruction operations and
Johnston Atoll had missed its milestone for shutting down the facility.
However, since then, three of these sites have experienced further delays.
Table 1 shows the delays at Umatilla, Pine Bluff, and Johnston Atoll
incineration sites since October 2003. The delays stem from incidents
during operations, environmental permitting issues, emergency
preparedness, and unfunded requirements. If these delays persist, we
continue to believe that program costs will rise substantially higher than
the October 2003 estimate of more than $25 billion. These rising costs
have led to the need to reallocate funds within the program's fiscal year
2005 budget.
Table 1: Delays in Meeting Schedule Milestones, by Incineration Site
Difference
between 2003
October 2003 Current status and
estimate to estimates to current
Next schedule begin next begin next estimate
Site milestone milestone phasea (no. of months)
Umatilla Operations Mar. 2004 Juy 2004 +4
Pine Bluff Operations Apr. 2004 July 2004 +3
Johnston Atoll End of closure Nov. 2003 Dec. 2003 +1
Sources: DOD and the U.S. Army.
a
Actual date that Johnston Atoll closed and program manager's official
estimates for Pine Bluff and Umatilla to start operations.
As of March 2004, the two bulk-agent only sites, Aberdeen and Newport,
have experienced delays and Aberdeen has missed its scheduled milestone
for draining the agent from the ton containers. In 2002, DOD approved
using an accelerated method that was expected to increase the rate of
destruction at these two sites. The Army estimated that this process would
reduce the scheduled end of operations at both sites by 5 years, from 2008
to 2003 at Aberdeen and from 2009 to 2004 at Newport. However, Aberdeen
has encountered unanticipated problems with the processing of the mustard
agent in the ton containers and has extended its planned completion date
from October 2003 to December of 2004. The program has
exceeded the 6-month period it estimated would be needed for accelerated
destruction of the agent. Additionally, the site has only drained 152 of
the 1,817-ton containers as of March 2004. Even if finished by December
2004, this time frame only covers the first stage of the operation to
remove the mustard agent from the containers. An added problem, the
hardening and congealing of residual agent in the ton containers, will
require a second stage of operation to remove the residual agent. In
addition, Newport has faced construction delays and community resistance
to offsite treatment of waste byproducts. As a result of these delays,
Newport extended its planned start date for agent operations twice: first
from October 2003 to February 2004, and again to August 2004. However, the
current plan to ship the waste to a treatment facility in New Jersey from
Indiana has not been finalized and faces opposition from residents,
workers, and environmental groups. DOD has not programmed funds to treat
the waste on-site or to store it there until a disposal location has been
finalized.
At the two ACWA sites, Pueblo, Colorado, and Blue Grass, Kentucky, DOD
directed that they pursue accelerated destruction methods. According to
program officials, the initial accelerated approaches proposed by the
contractors exceeded DOD programmed funding and have to be reevaluated.
Until the plans are approved, final schedule milestones cannot be set.
This means both projects have been delayed while additional design work is
completed.
These delays and schedule extensions5 have contributed directly to program
cost growth, according to program officials. As a result, DOD's total
program cost estimate grew from $15 billion to $24 billion between 1998
and 2001. (See fig. 1.) Because of delays encountered since the 2001
revisions, the Army is now in the process of developing new milestones
that will extend beyond those adopted in 2001. According to a DOD
official, the program will use events that have occurred since 2001 in
presenting new cost estimates to DOD for preparation of the fiscal year
2006 budget submission. Program officials told us that they estimate new
costs had increased by $1.4 billion as of October 2003, and this estimate
is certainly going to rise further, given the information we obtained on
schedule delays from fiscal year 2005 budget documents and from program
officials.
5 Schedule extensions or slippages are caused primarily by actual
destruction rates being lower than planned.
Figure 1: Comparison of 1998, 2001, and 2003 Cumulative Program Cost
Estimates
As an example of the impact schedule delays have on the program, DOD's
fiscal year 2005 budget request includes a realignment of $147 million
from the ACWA program to the rest of the program. Additional requirements
have been identified that will likely delay the schedule further if future
realignments are necessary.
Although the United States met the first two chemical weapons treaty
deadlines, the continuing delays in the schedule jeopardize its ability to
meet the final two deadlines. (See table 2.) The program will not meet the
April 2004 CWC deadline to destroy 45 percent of the stockpile. Although
it has received an extension for this task to December 2007, it is
questionable if the program will meet this deadline. Unless the Chem-Demil
Program is able to resolve the problems that have caused schedule delays
to destroy the stockpile, the United States will likely risk not meeting
the deadline, if extended to 2012, to eliminate 100 percent of the
stockpile.
Schedule Delays Required CWC Extension of Deadlines
Table 2: CWC Deadlines
Required percentage of Date United States agent destroyed Deadlines for
destruction met deadline
1 April 29, 2000 September 1997
20 April 29, 2002 July 2001
45 April 29, 2004 Will not meet
100 April 29, 2007 Will not meet
Long-standing Management and Strategic Planning Weaknesses Hamper Program
Progress
Sources: CWC and U.S. Army.
Despite recent efforts to improve the management and change the
organization of the Chem-Demil Program, the program continues to falter
because several long-standing management, organizational, and strategic
planning weaknesses remain unresolved. While the program has lacked
sustained leadership in the recent past, this situation has stabilized.
However, the program's complex structure, with its many lines of authority
within the Army and between the Army and DOD, raises questions about the
roles and responsibilities of its various offices. In addition, the
program lacks strategic and risk management plans to guide and integrate
its activities.
Program Management Structure Remains Complex
Although the program has experienced turbulence in key leadership
positions in the recent past, the current leadership has been in place for
more than a year, and these leaders have a substantial history of
involvement with the program. The new leadership team is clarifying its
roles, responsibilities, decision-making authority, and accountability.
However, despite the recent reorganization, this change has not
streamlined the program's complex organization, as we documented in our
2003 report.6 The establishment of the Chemical Materials Agency (CMA) in
January 2003 has left the Director reporting to two different senior Army
organizations. The reorganization has also divided the responsibility for
various program phases between two offices within CMA. One organization,
the Program Manager for the Elimination of Chemical Weapons, will manage
the first three phases (design, construction, and systemization) for each
site, and a newly created organization, the Director of Operations, will
manage the final two phases (operations and
6 GAO-03-1031.
closure). Moreover, the reorganization did not address the relationship
between the Assembled Chemical Weapons Alternatives (ACWA) program and the
Army's CMA since DOD manages ACWA separately from the Army, as
congressionally directed.
Program Lacks Strategic and Risk Management Plans
Emergency Preparedness Program Is Improving, but Costs Are Rising
In response to our recommendations in our September 2003 report, according
to DOD officials, the Army is developing a strategic plan to address the
goals, objectives, and performance measures of the program. DOD says it is
now in the process of developing a risk management plan. In the past,
because the program had used a crisis management approach, it was forced
to react to, rather than control issues. We believe a risk management
approach would allow DOD and the Army to proactively anticipate and
address potential problems that could adversely affect program schedule,
costs, and safety.
FEMA and the Army continue to provide assistance to state and local
communities to improve their emergency preparedness. Since our October
2003 testimony, states and communities have continued to improve their
emergency preparedness to respond to chemical incidents. Additionally,
FEMA has provided software and training to state and local communities to
help them simplify development of CSEPP financial reporting documents.
FEMA also has published a Recovery Workbook.7 The workbook fills a void in
state and local guidance for emergency responders to follow in the event
of a chemical emergency. FEMA also expanded its capability assessment
readiness tool to assist local communities in quantifying benchmark
scores. In January 2004, FEMA reported to Congress that these achievements
have aided CSEPP communities in reaching 95 percent of their benchmark
compliance. Six of 10 states near the eight storage sites reported that
they are fully prepared and the remaining 4 reported being close to fully
prepared.
Despite these accomplishments, CSEPP costs continue to rise because,
according to Army and FEMA officials, some state and local communities
continue to identify additional emergency requirements that exceed DOD's
7 U.S. General Accounting Office, Chemical Weapons: FEMA and Army Must Be
Proactive in Preparing States for Emergencies, GAO-01-850 (Washington,
D.C.: Aug. 13, 2001). Recovery plans refer to support activities that
occur following a chemical event. The primary purpose is to protect the
public health and safety while returning the community to normal
conditions.
programmed funding. This situation occurs because of the open
interpretation of "maximum protection" concept that governs CSEPP. These
unfunded requests have two effects. First, they cause the benchmarks
showing how prepared each community is to change from fully compliant to
not compliant from year to year. Second, they cause funds to be
transferred from destruction activities to CSEPP and result in further
delays in the destruction schedule. Army and FEMA officials explain that
the states often identify and expand their requirements, especially as
destruction facilities move closer to the start of the operations phase.
For example, the states of Colorado, Alabama, and Oregon have requested
additional funds for infrastructure support, including roads and bridges
that exceed their CSEPP budgets. These requests follow a pattern that
occurred at Anniston in 2001 when it received $40.5 million for additional
CSEPP items. Currently, the communities around the Umatilla facility are
demanding that substantial additional funding be provided as the onset of
operations comes closer. Programwide, new requirements continue to exceed
approved CSEPP funding levels. FEMA has little control over the additional
funding requests made by the states. As of October 2003, FEMA had
identified total $88 million in unfunded CSEPP requirements for fiscal
years 2004 and 2005. As of fiscal year 2004, the total cost for CSEPP has
risen to $723.1 million. Funding for individual states ranges from $9.7
million to $259.6 million for the period of 1989 to 2004. (See table 4.)
Table 4: CSEPP Funding by State, Fiscal Years 1989-2004
State Fiscal years 1989-2004 Percent of total spending
Alabama $259,612,223
Arkansas 80,311,665
Colorado 30,233,930
Illinois 9,724,039
Indiana 46,201,152
Kentucky 60,055,596
Maryland 30,472,755
Oregon 93,484,394
Utah 74,596,336
Washington 38,388,929
Total $723,071,019 100.0
Source: FEMA data. The Army and FEMA have recently recognized the
Confederated Tribes of the Umatilla Indian Reservation as a separate
funding entity. The confederated tribes have received $2.5 million to
date.
Mr. Chairman, this concludes my statement. I would be pleased to respond
to any questions that you or Members of the Subcommittee may have.
Contacts and Acknowledgments
For future questions regarding this testimony, please contact me at (202)
512-6020. Individuals making key contributions to this testimony include
Donald Snyder, Rodell Anderson, Bonita Oden, John Buehler, Nancy Benco,
Rick Yeh, Susan Mason, and Mike Zola.
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