Chemical Demilitarization: Actions Needed to Improve the	 
Reliability of the Army's Cost Comparison Analysis for Treatment 
and Disposal Options for Newport's VX Hydrolysate (26-JAN-07,	 
GAO-07-240R).							 
                                                                 
The U.S. stockpile of 1,269 tons of VX nerve agent stored at the 
Newport Chemical Depot (Newport), Indiana, is one of nine	 
stockpiles that the Department of Defense (DOD) must destroy in  
response to congressional direction initially provided in 1985.  
In addition, the stockpile must be destroyed to comply with the  
requirements of the Chemical Weapons Convention, which the United
States became a party to in 1997. The stockpile at Newport is the
first U.S. stockpile containing VX that will be destroyed by	 
using neutralization--a process that mixes hot water and sodium  
hydroxide (a caustic chemical) with VX to change the chemical	 
composition to a less toxic form. The resulting by-product is a  
liquid wastewater commonly referred to as hydrolysate that	 
consists mostly of water but also has a caustic component and	 
organic salts that need further treatment to meet Chemical	 
Weapons Convention requirements and to meet federal and state	 
environmental requirements for disposal. The Army, DOD's	 
designated executive agent, began neutralizing Newport's VX	 
stockpile on-site in May 2005 and, as of December 1, 2006,	 
reports neutralizing about 34 percent of the stockpile. None of  
the generated hydrolysate--expected to be about 2 million gallons
when the neutralization process is completed--has been treated.  
The hydrolysate is being stored on-site until a post-treatment	 
plan can be implemented. The Army has been evaluating options for
treating the hydrolysate since the mid-1990s. The John Warner	 
National Defense Authorization Act for Fiscal Year 2007 mandated 
that GAO review the Army's Cost-Benefit Analysis of Off-Site	 
Versus On-Site Treatment and Disposal of Newport Caustic	 
Hydrolysate. Specifically, GAO (1) assessed the reasonableness of
the Army's rationale to eliminate five of the eight technologies 
for treating Newport's hydrolysate; (2) determined what other	 
options the Army considered, such as incineration; and (3)	 
evaluated the adequacy of the cost comparison analysis presented 
for the three remaining technologies considered as alternatives  
to the Army's proposed plan. To meet the December 1, 2006, due	 
date, GAO briefed or offered to brief your offices prior to that 
time. This report provides details of our findings and our	 
conclusions and recommendations. GAO will also issue a separate  
letter on its assessment of the Army's cost-benefit analysis once
DOD has completed its sensitivity review of the data in that	 
letter. 							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-240R					        
    ACCNO:   A65264						        
  TITLE:     Chemical Demilitarization: Actions Needed to Improve the 
Reliability of the Army's Cost Comparison Analysis for Treatment 
and Disposal Options for Newport's VX Hydrolysate		 
     DATE:   01/26/2007 
  SUBJECT:   Army facilities					 
	     Chemical agents					 
	     Chemical weapons disposal				 
	     Cost analysis					 
	     Program evaluation 				 
	     Strategic planning 				 
	     Waste treatment					 
	     Independent regulatory commissions 		 
	     Comparative analysis				 
	     Chemical Weapons Convention			 
	     Newport (IN)					 
	     VX Nerve Gas					 

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GAO-07-240R

   

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January 26, 2007

Congressional Committees

Subject: Chemical Demilitarization: Actions Needed to Improve the
Reliability of the Army's Cost Comparison Analysis for Treatment and
Disposal Options for Newport's VX Hydrolysate

The U.S. stockpile of 1,269 tons of VX nerve agent^1 stored at the Newport
Chemical Depot (Newport), Indiana, is one of nine stockpiles that the
Department of Defense (DOD) must destroy in response to congressional
direction initially provided in 1985. In addition, the stockpile must be
destroyed to comply with the requirements of the Chemical Weapons
Convention,^2 which the United States became a party to in 1997. The
stockpile at Newport is the first U.S. stockpile containing VX that will
be destroyed by using neutralization--a process that mixes hot water and
sodium hydroxide (a caustic chemical) with VX to change the chemical
composition to a less toxic form. The resulting by-product is a liquid
wastewater commonly referred to as hydrolysate that consists mostly of
water but also has a caustic component and organic salts that need further
treatment to meet Chemical Weapons Convention requirements and to meet
federal and state environmental requirements for disposal. The Army, DOD's
designated executive agent, began neutralizing Newport's VX stockpile
on-site in May 2005 and, as of December 1, 2006, reports neutralizing
about 34 percent of the stockpile.

None of the generated hydrolysate--expected to be about 2 million gallons
when the neutralization process is completed--has been treated. The
hydrolysate is being stored on-site until a post-treatment plan can be
implemented. The Army has been evaluating options for treating the
hydrolysate since the mid-1990s. Through these evaluations, on-site
supercritical water oxidation (SCWO) was initially selected as the
preferred option in 1999, but the preferred option was subsequently
changed in 2002 to using an off-site commercial treatment facility because
of concerns about the continued storage of the stockpile after the
September 11, 2001, terrorist attacks and numerous technical challenges
identified during one-tenth scale engineering testing. The Army's plan for
the treatment and disposal of the hydrolysate was to transport it from
Newport to an off-site commercial treatment and disposal facility--the
DuPont Secure Environmental Treatment Facility (DuPont) in Deepwater, New
Jersey--which would use a pretreatment process that would include various
chemical processes, including oxidation followed by chemical precipitation
to further break down the hydrolysate. The remaining liquid effluent would
be treated in the facility's biodegradation-based waste treatment plant.
This plan has generated concerns about its safety and cost. However, on
January 5, 2007, DuPont announced that it will not participate in the
treatment of Newport's hydrolysate, citing a "lengthy and arduous"
approval process. Army officials stated that the Army will explore all
available on-site and off-site options to treat Newport's hydrolysate.

^1 VX is a rapid-acting, lethal nerve agent that affects the nervous
system by interfering with the signals sent from the brain to vital
organs. Nerve agents are the most toxic and rapidly acting of known
chemical warfare agents.

^2 The Chemical Weapons Convention prohibits the use of chemical weapons
and specifies deadlines for signatories, of which the United States is
one, to destroy unitary stockpiles. The final deadline to destroy existing
stockpiles is April 29, 2012.

The House Committee on Armed Services Report on the National Defense
Authorization Act for Fiscal Year 2006, H.R. Rep. No. 109-89, directed the
Secretary of the Army not to proceed with any action to transport or
relocate hydrolysate from Newport until health and environmental concerns
raised by the Environmental Protection Agency and the Centers for Disease
Control and Prevention were addressed in a manner that would not result in
substantial ecological or human heath risk. The Centers for Disease
Control and Prevention issued its report^3 in July 2006. The report
concluded, in part, that the Army/DuPont proposal sufficiently addressed
critical issues related to human toxicity, transportation, and treatment
of Newport's hydrolysate. The committee report also required that the
Secretary of the Army certify to the congressional defense committees that
sending the hydrolysate off-site for treatment would result in significant
cost and schedule savings compared to on-site disposal of the hydrolysate
before transport. The report further required that the Secretary of the
Army conduct and provide the congressional defense committees a detailed
cost-benefit analysis to include an analysis comparing the proposed
off-site treatment option with eight on-site options, which are discussed
in detail in enclosure I.

In response to the latter requirement, the Army published its cost-benefit
report^4 in April 2006, which concluded that only chemical oxidation,
SCWO, and wet-air oxidation technologies were feasible for treating
Newport's hydrolysate. In the cost-effectiveness analysis contained in the
report, the Army determined that the cost of off-site treatment of the
hydrolysate at DuPont would be from $146 million (without program risk) to
$347 million (including program risk) less expensive than the on-site
options. The Army also concluded that the off-site treatment option would
allow the disposal of the hydrolysate to be accomplished in the shortest
amount of time and would minimize the amount of time that Newport's
hydrolysate must be stored at Newport.

^3 Department of Health and Human Services, Centers for Disease Control
and Prevention, Review of the Revised Plan for Off-Site Treatment of
Newport's Chemical Agent Disposal Facility's Caustic VX Hydrolysate at
DuPont Secure Environmental Treatment Facility in Deepwater, New Jersey
(Atlanta. Ga.: July 2006).

^4 U.S. Army, Project Manager for Alternative Technologies and Approaches,
Cost-Benefit Analysis of Off-Site Versus On-Site Treatment and Disposal of
Newport Caustic Hydrolysate (Aberdeen Proving Ground, Edgewood Area, Md.:
April 2006).

The John Warner National Defense Authorization Act for Fiscal Year 2007^5
mandated that we review the Army's Cost-Benefit Analysis of Off-Site
Versus On-Site Treatment and Disposal of Newport Caustic Hydrolysate.
Specifically, we (1) assessed the reasonableness of the Army's rationale
to eliminate five of the eight technologies for treating Newport's
hydrolysate; (2) determined what other options the Army considered, such
as incineration; and (3) evaluated the adequacy of the cost comparison
analysis presented for the three remaining technologies considered as
alternatives to the Army's proposed plan. To meet the December 1, 2006,
due date, we briefed or offered to brief your offices prior to that time.
This report provides details of our findings and our conclusions and
recommendations. We will also issue a separate letter on our assessment of
the Army's cost-benefit analysis once DOD has completed its sensitivity
review of the data in that letter.

To meet our objectives, we reviewed documentation and interviewed
officials in the Office of the Under Secretary of Defense (Acquisition,
Technology, and Logistics); Office of the Deputy Assistant Secretary of
the Army (Elimination of Chemical Weapons); U.S. Army Chemical Materials
Agency (CMA), Aberdeen, Maryland; the Newport Chemical Depot, Newport,
Indiana; DuPont's Secure Environmental Treatment Facility, Deepwater, New
Jersey; Parsons Infrastructure and Technology Group, Inc. (Parsons); and
Shaw Environmental Group, Inc. (Shaw)--the contractor that assisted the
Army in performing the analysis for the Army's report. To assess the
Army's methods of evaluating various options for treating hydrolysate, we
relied on a review of CMA's Newport On-Site Hydrolysate Post Treatment
Estimate report (post-treatment estimate report), which was prepared by
Shaw,^6 National Research Council (NRC) reports, and other referenced
documents and supporting documentation. We did not conduct an independent
evaluation of these technologies. To assess the adequacy of the Army's
cost comparison analysis, we compared the Army's methods and approaches
with the guidance contained in Office of Management and Budget (OMB) and
DOD instructions and Cost Estimating Standards and Practices developed by
the Society of Cost Estimating and Analysis, and assessed the reliability
of the cost estimates.^7 We reviewed and evaluated the cost analyses the
Army used in preparing its cost-benefit report and interviewed Army and
contractor officials regarding the data and assumptions they used in
preparing their analyses. To determine the accuracy of underlying data, we
independently calculated values based on provided assumptions to compare
against values contained in supporting spreadsheets. We also compared
values from the supporting spreadsheets to summary data provided in the
supporting post-treatment estimate report prepared for CMA by Shaw. Also,
we made use of information that we obtained during our ongoing review of
DOD's Chemical Demilitarization Program to assess the reasonableness of
certain assumptions. We conducted our review from August 2006 through
November 2006 in accordance with generally accepted government auditing
standards.

^5 Pub. L. No. 109-364, S 922 (2006).

^6 Shaw Environmental, Inc., Newport Chemical Disposal Facility On-Site
Hydrolysate Post Treatment Estimate (Edgewood, Maryland: April 2006).

^7 The Department of the Army Cost Analysis Manual contains criteria and a
checklist that are similar to the OMB and best practices guidance. See
Department of the Army, U.S. Army Cost and Economic Analysis Center, Cost
Analysis Manual (Washington, D.C.: May 2002).

Results in Brief

The rationale that the Army used to eliminate five of the eight
technologies for treating Newport hydrolysate appears reasonable. Based on
our review of the supporting post-treatment estimate report and key NRC
reports referenced by the Army, there was evidence of significant
difficulties associated with the five eliminated options that would make
them less promising than the three others that were evaluated against the
proposed DuPont option in the Army's cost comparisons. For example, the
Army report's finding that one alternative technology would not be well
suited to treat large volumes of wastes with high concentrations of water,
such as Newport's hydrolysate, was consistent with determinations made in
the post-treatment estimate report and was supported by findings in a 2001
NRC report. Also, for another alternative, the Army determined that the
vendor with the rights to the technology was no longer in business and
further development of this alternative would call for a company to
acquire the rights and start development work, creating a large cost and
schedule risk.

In addition to evaluating the eight alternatives discussed in its 2006
cost-benefit report, the Army previously evaluated off-site and on-site
technical solutions for treating the hydrolysate, including incineration.
The Army's evaluations concluded for various reasons that these
alternatives would also be difficult to implement or not viable at this
time. For example, of the more than 100 commercial disposal firms that
were initially considered as candidates to treat Newport's hydrolysate
off-site in 2002, only 7 firms (not including DuPont) that have been
determined to be qualified by the Army's contractor have provided price
information through either the Army's 2002 request for proposals or a
subsequent market survey. However, 5 of the 7 firms would use either of
two methods: incineration or deep-well injection. Army officials believe
that these two methods would garner higher levels of public concern than
other methods. Moreover, while other on-site technologies were evaluated,
those that were considered to be the most promising technologies in the
2001 and 2002 reports are very similar to the technologies identified in
the Army's 2006 cost-benefit report. The use of any of the Army's four
incinerators at its stockpile sites, while potentially technically
feasible, has not been evaluated because it also has the potential for
high levels of public concern, but could be evaluated if other options are
no longer available.

Based on our assessment of supporting documentation and analyses, we
determined that the underlying cost estimates used in the Army's report
were not reliable, and the impact of this on the Army's report finding
that the DuPont plan had "significant cost savings" over the three
considered alternatives is uncertain. Using OMB criteria and criteria
approved by the cost estimating community,^8 we determined that the
estimates were unreliable because of (1) the quantity and magnitude of
errors,

^8 The Society of Cost Estimating and Analysis (SCEA) is an organization
dedicated to improving cost estimating and analysis and to furthering the
effectiveness and efficiency of cost estimating and analysis. The
characteristics of a high-quality estimate are contained in SCEA's Cost
Programmed Review of Fundamentals (c) 2003 SCEA.

(2) quality control weaknesses, (3) questionable or inadequate supporting
source data and documentation, and (4) the undetermined sensitivity of key
assumptions. Neither the Army nor the contractor has a system in place to
perform cross-checks of the costs, underlying assumptions, or the
technical parameters that went into the estimates. Moreover, we have
determined that the results from the Army's programmatic risk analysis are
unreliable because they were generated from the previously discussed
unreliable cost estimates and because the Army attributed no risk to
potential permitting, legal, or other challenges to the DuPont plan. It
was unclear to us whether the programmatic risks of other alternatives
were understated or overstated. Overall, we could not determine the
cumulative effect of these problems on the outcome or results of the
Army's analysis, in large part because we did not have confidence in much
of the supporting data because of the problems that we have noted.
Nevertheless, without reliable underlying cost estimates, the Army, the
Congress, and the public cannot have confidence that the most
cost-effective solution has been selected. We are making recommendations
that the Army conduct its cost-benefit analysis again using best practices
so that its data and conclusions are comprehensive, traceable, accurate,
and credible; correct any technical and mathematical errors in the cost
estimate; establish quality control and independent review processes that
check data sources, calculations, and assumptions; and perform a
sensitivity analysis of key assumptions.

In written comments on a draft of this report, DOD concurred with our
findings and recommendations, and stated that the Army will be preparing a
new cost-benefit analysis based on a revised cost estimate, which will be
independently reviewed and verified. DOD comments are discussed in more
detail at the end of this correspondence and are reproduced in full in
enclosure II. DOD also provided technical comments, which have been
incorporated where appropriate.

Background

In 1994, the Army, in response to continued public and congressional
concerns about the use of incineration as a destruction method,
established the Alternative Technologies and Approaches Project under the
Program Manager for Chemical Demilitarization, which became CMA in 2003.
The project was tasked with investigating alternatives to incineration for
the stockpiles that were located at Aberdeen Proving Ground (Aberdeen),
Maryland, and Newport. These two sites were unique in that they consisted
solely of chemical agent stored in bulk containers, without explosives or
other munitions components.

In February 1999, the Army announced that it would establish a pilot
program to destroy Newport's stockpile of VX. The treatment and disposal
method chosen to be pilot tested was neutralization followed by SCWO. In
making its decision, the Army considered evaluations made by the NRC and
independent Army reviews of alternatives to incineration and for treating
hydrolysate. Another key factor in the Army's decision was a
recommendation made by the Indiana Citizens Advisory Commission that the
Army consider technologies other than incineration.

In 2002, in response to heightened concerns about the storage of chemical
weapons after the terrorist attacks of September 11, 2001, the Army
adopted "an accelerated approach" at both its Newport and Aberdeen
stockpile locations in order to eliminate the stockpiles faster. A key
change resulting from this accelerated approach is that the Army would not
treat the hydrolysate on-site, but would transport it off-site to
commercial facilities that had the necessary environmental permits to
treat and dispose of the hydrolysate. In the case of Newport, Parsons, the
government's site contractor, awarded a contract to Perma-Fix of Dayton,
Inc., Dayton, Ohio, through a 2002 request for proposals, to demonstrate
that it could treat the hydrolysate. However, this plan generated
considerable public concern, and the contract was subsequently terminated
when a discharge permit could not be obtained. The Army and its contractor
at Newport then began pursuing efforts to transport the hydrolysate to
DuPont, which also responded to the 2002 request for proposals.

Methodology Used to Develop the Army's Cost-Benefit Analysis

In response to the committee report,^9 the Army tasked Shaw with
developing technical schedule and cost information comparing the eight
on-site technologies cited in the committee report to the Army's proposed
off-site transportation of the hydrolysate to DuPont. A post-treatment
estimate report was prepared to document the methodology, assumptions, and
findings used in the analysis. In conducting its analysis, each of the
eight technologies was initially evaluated to determine its applicability
to process Newport hydrolysate. The Army determined that the eight cited
treatment and disposal methods were the eight methods evaluated by the NRC
in an assessment it prepared for the Project Manager for the Non-Stockpile
Chemical Materiel Project^10 in 2001. The analysis used the evaluation
criteria in the NRC report to assess benefits and risks of each method,
updating information when necessary to reflect events subsequent to the
report's publishing. The post-treatment estimate report also noted that
the Army has been monitoring for years the development of emerging
technologies for the potential application to chemical demilitarization.
Schedules and cost estimates were only developed for technologies that
were determined to be applicable to the volume and characteristics of the
Newport hydrolysate.

Army officials stated that they selected Shaw because of its experience
with various aspects of the DOD's Chemical Demilitarization Program and
its familiarity with treatment methods, which provides it with the
expertise to make reasoned judgments about the treatment methods contained
in the Army's cost-benefit report. Shaw has supported CMA and its
predecessor for more than 15 years. For example, Shaw supported the
Non-Stockpile Chemical Materiel Project by participating in the
identification, evaluation, and testing of methods for treating waste
streams from the neutralization of recovered chemical materials and binary
chemical agents. According to the Army, Shaw evaluated over 140
technologies, including all eight cited in the committee report. Moreover,
Shaw was responsible for a program that monitors the development of new
technologies for potential application to CMA's mission. In addition, Shaw
participated in the study and testing of various candidate processes for
post-treatment of Newport's hydrolysate, including SCWO.

^9 H.R. Rep. No. 109-89 (2005).

^10 Non-stockpile chemical materiel are items not included as part of the
nation's unitary chemical stockpile, including buried munitions and binary
munitions.

The Rationale Used for Eliminating Technologies from Further Consideration
Appears Reasonable

Although the Army's cost-benefit report did not provide specific details
on the process it used to make its determination to eliminate five of the
eight congressionally specified treatment technologies from further
consideration, the Army's rationale for eliminating these methods appears
reasonable based on our review of the findings in the post-treatment
estimate report prepared by Shaw. The report's evaluations were supported
by past NRC reports, past program studies, and experience that Shaw has
gained through its work with the Non-Stockpile Chemical Materiel Project
and its role in evaluating emerging technologies.

Army Eliminated Five Treatment Methods It Determined to Be Unsuitable for
Newport Hydrolysate

The Army's cost-benefit report stated that based on a technical review
conducted by Shaw's professional engineers with extensive experience in
these treatment methods, five treatment methods specifically referenced in
H.R. Rep. No. 109-89 were not viable because the methods were not well
suited for the known properties and volumes of Newport hydrolysate. The
five methods eliminated from further study were (1) electrochemical
oxidation, (2) solvated-electron technology, (3) gas-phase chemical
reduction, (4) plasma-arc technology, and (5) stand-alone biodegradation.
Table 1 lists the five eliminated treatment methods and the factors the
Army report cited as leading to their elimination.

Table 1: Rationale for the Elimination of Five Technologies from the
Army's Cost-Benefit Report for Hydrolysate Treatment

Technology                   Factors leading to elimination                
Electrochemical oxidation    o Not appropriate for aqueous wastes.         
                                                                              
                                o Concern about scale-up issues and risks.    
                                                                              
                                o Generates large volumes of waste streams    
                                needing additional treatment.                 
Solvated-electron technology o Not appropriate for aqueous wastes.         
                                                                              
                                o Generates hydrogen.                         
                                                                              
                                o Uses difficult-to-handle reagents.          
Gas-phase chemical reduction o Company no longer exists.                   
                                                                              
                                o Generates high volumes of gaseous waste.    
                                                                              
                                o Hydrogen reagent considered a safety risk.  
Plasma-arc technology        o Not appropriate for large quantities of     
                                aqueous wastes.                               
                                                                              
                                o Considered similar to incineration.         
                                                                              
                                o Limited experience with both hazardous and  
                                aqueous solutions.                            
Stand-alone biodegradation   o Primary reaction products in Newport        
                                caustic hydrolysate are not amenable to       
                                direct treatment by biodegradation.           
                                                                              
                                o Not efficient for on-site waste volumes;    
                                cannot obtain economies of scale available at 
                                commercial large-scale treatment, storage,    
                                and disposal facilities.                      

Source: U.S. Army.

Army's Eliminations Appear Reasonable Based on Our Review of Supporting
Documents

Our review of the Army's rationale for dismissing five of the eight
alternative technologies found that the findings contained in the Army's
report appear to be reasonable and are supported by documentation from the
post-treatment estimate report prepared for CMA by Shaw and NRC reports.
The evaluation of the benefits and risks of each technology was largely
based on criteria developed by the NRC in its 2001 report.^11 The NRC
cited four areas as "top priority" criteria: relative process safety (low
risk), technical effectiveness, permit status, and pollution prevention.
Additionally, another six categories were designated "important" criteria:
robustness, cost, practical operability, continuity, space efficiency, and
materials efficiency. When necessary, the findings of the NRC neutralent
waste report were updated within these criteria based on more recent
technological developments, experience Shaw has gained working with the
Non-Stockpile Chemical Materiel Project, and Shaw's role in evaluating
emerging technologies. Our review of the post-treatment estimate report
and key NRC reports referenced by the Army provided evidence of likely
significant difficulties associated with the five eliminated options that
would make them less promising than the three options that were evaluated
against the proposed DuPont option in the Army's cost comparisons.
Evidence used by the Army to support its rationale for eliminating each
treatment method is discussed below.

^11 National Research Council, Review and Evaluation of the Army
Non-Stockpile Chemical Materiel Disposal Program: Disposal of Neutralent
Wastes (Washington, D.C.: 2001).

Electrochemical Oxidation

           o The Army report's finding that electrochemical oxidation would
           generate large volumes of waste is supported by findings in the
           NRC neutralent wastes report. In its report, the NRC noted that
           electrochemical oxidation generates large amounts of gaseous
           effluents, particularly chlorine gas, which needs to be scrubbed.
           The report also noted that those effluents would be corrosive and
           could cause operating problems. Shaw's evaluation determined that
           the amount of water present in Newport's hydrolysate would be too
           large for the electrochemical oxidation technology to process,
           requiring either the hydrolysate to be concentrated or the
           electrochemical system to be redesigned. The NRC neutralent wastes
           report also noted that treating large quantities of water would be
           an issue for this treatment method.

           o The finding that an electrochemical oxidation system would
           require a significant scale-up is also supported by findings in
           the NRC neutralent wastes report. The report also stated that the
           one existing CerOx facility (the type of electrochemical oxidation
           proposed for use by the Army) could process only one 35-gallon
           barrel at a time. In Shaw's evaluation, it noted concerns about
           whether the manufacturer could easily scale up production for the
           200 electrochemical cells necessary to operate at Newport, as
           their systems were only accustomed to handling laboratory-scale
           amounts of waste.

Solvated-Electron Technology

           o The Army report's finding that the solvated-electron technology
           is not appropriate for Newport hydrolysate is supported by the NRC
           neutralent wastes report findings as well. The NRC determined that
           the solvated-electron technology process' efficiency is poor when
           treating aqueous waste streams, and its advantages may be
           outweighed by the difficulty of handling its reagents, which are
           toxic and have been known to cause fires. The NRC also was
           concerned that the solvated-electron process was less mature than
           some of the other treatment technologies. Shaw determined that
           solvated-electron

           technology was evaluated by the Assembled Chemical Weapons
           Alternatives^12 program but that it could not successfully
           complete demonstration testing.

Gas-Phase Chemical Reduction

           o The Army report's finding that the gas-phase chemical reduction
           technology is not appropriate for Newport hydrolysate is supported
           by Shaw's findings, which noted that the vendor who had the rights
           to this technology, ELI Eco Logic, went out of business in 2004.
           Shaw noted that further development of gas-phase chemical
           reduction as an option would "require finding a company to acquire
           the rights and start development work" and that process "would be
           a large risk to cost and schedule."

           o The NRC's neutralent wastes report notes that gas-phase chemical
           reduction is a complex process that requires the management of hot
           hydrogen gas, which presents unique safety concerns. The NRC
           report cited the need to manage gases both in the reactor and as
           effluents and the potential for the buildup of carbon soot. The
           report also stated that no commercial-scale reactor of this type
           has received a permit to operate in the United States, which could
           lead to delays.

Plasma-Arc Technology

           o The NRC neutralent wastes report notes concerns about the
           prospects for plasma-arc technology to get a permit since it has
           not operated in the United States and regulators may consider it
           to be incineration. Also, the NRC noted that tests of the
           technology conducted by the Army's Assembled Chemical Weapons
           Alternatives program on VX hydrolysate generated products of
           environmental concern. The NRC report also stated that this
           process is less efficient with wastes that contain large amounts
           of water.

           o The post-treatment estimate report states that regulatory
           hurdles would need to be overcome and then technology development
           would need to be accomplished.

Stand-alone Biodegradation

           o The NRC has repeatedly noted its concerns related to the ability
           of stand-alone biodegradation to treat hydrolysate from VX. For
           example, in its 1996 Review and Evaluation of Alternative Chemical
           Disposal Technologies,^13 its 2000 Integrated Design of
           Alternative Technologies for Bulk-Only Chemical Agent Disposal
           Facilities,^14 and its neutralent wastes reports, the NRC noted
           that the primary reaction products of VX hydrolysate are not
           readily amenable to direct treatment by biodegradation, since they
           cannot be easily broken down by the microorganisms used in this
           process. Additionally, Shaw cited an Assembled Chemical Weapons
           Assessment evaluation that found biodegradation to be "inadequate
           for complete destruction" of VX hydrolysate.

           o The Army report's finding that biodegradation could not achieve
           the economies of scale needed to make biodegradation efficient is
           supported by the findings of the NRC. In its 1996 study, the NRC
           found that because hydrolysate cannot serve as the primary
           substrate for the microorganisms in this process, substantial
           quantities of co-substrate need to be added to co-feed the
           process, making it inefficient.

           o Chemical oxidation, followed by chemical precipitation in
           conjunction with biodegradation, is the process proposed for use
           in both the off-site DuPont option and the on-site chemical
           oxidation option.

^12 The Congress established the Assembled Chemical Weapons Assessment
program in 1996 to identify and demonstrate at least two alternative
technologies to baseline incineration. Omnibus Consolidated Appropriations
Act, 1997, Pub. L. No. 104-208 (1996). In 2002, the program was assigned
responsibility for full-scale pilot testing of neutralization technologies
to destroy the chemical weapons stockpiles at the Pueblo Chemical Depot in
Colorado and Blue Grass Army Depot in Kentucky. Department of Defense
Appropriations Act, 2003, Pub. L. No. 107-248 (2002). In 2003, the
program's name was changed to Assembled Chemical Weapons Alternatives.

The Army Has Evaluated Other Technical Solutions for Treating Newport's
Hydrolysate

Although the Army did not discuss them in its cost-benefit report, it has
evaluated other technical solutions for treating Newport's hydrolysate
since its 1999 decision to use SCWO. These solutions include both off-site
commercial treatment facilities and treatment technologies that would be
used on-site. In general, the evaluations of off-site options have
determined that there are only a few commercial treatment facilities that
are qualified and interested in treating Newport's hydrolysate, but
addressing public comments and concerns could be challenging. Evaluations
of on-site options have determined that the most promising options are
similar to those included in the Army's 2006 report, but concerns were
raised about development costs and operational risks. Other solutions,
such as using one of the Army's four incineration facilities, may be
technically feasible but not viable at this time.

Army's Evaluation of Off-Site Commercial Treatment Facilities Found Few
That Are Potentially Qualified and Interested

While there may be numerous facilities that could treat the Newport
hydrolysate, only a small number have actually responded to requests for
proposals. The Army began evaluating commercial treatment facilities that
use various treatment methods, including those using incineration,
biodegradation, and deep-well injection options subsequent to a 2001 NRC
report that expressed concerns about the reliability of SCWO reactors
during engineering tests. An earlier NRC report in 2000 recommended that
the Army evaluate the potential off-site treatment of Newport hydrolysate
both for potential costs and schedule benefits as well as a contingency in
the case of start-up problems implementing SCWO.

^13 National Research Council, Review and Evaluation of Alternative
Chemical Disposal Technologies (Washington, D.C.: 1996).

^14 National Research Council, Integrated Design of Alternative
Technologies for Bulk-Only Chemical Agent Disposal Facilities (Washington,
D.C.: 2000).

The Army adopted an accelerated approach in 2002 that changed the planned
treatment method for hydrolysate from on-site to an off-site commercial
treatment facility. The Army's contractor at Newport--Parsons--conducted
industry surveys to identify facilities that could transport, treat, and
dispose of Newport's hydrolysate. Parsons conducted a nationwide survey
and identified over 100 commercial treatment and disposal facilities in
the United States as capable of handling hazardous waste. However, after
considering the facilities' technology, environmental permits, safety and
environmental records, and outreach initiatives, Parsons determined that
only 45 of the facilities should be considered to determine their
qualifications to treat and dispose of the Newport hydrolysate. These 45
facilities were sent a qualification survey by Parsons; however, only 14
firms completed and returned the survey. After a review of the responses
to determine if they met minimum specified requirements, Parsons provided
requests for proposals to 10 of these facilities. Ultimately, 4 facilities
responded: 2 incineration-based facilities and 2 biodegradation
treatment-based facilities (Perma-Fix and DuPont). None of the facilities
that use deep-well injection responded to Parson's request. The range of
proposed prices varied significantly with a fourfold difference in price
from the least expensive to the most expensive of the four facilities.

According to the Army, during the evaluation process for the four
proposals, the two commercial incineration facilities were eliminated: one
withdrew its proposal and the other was deemed to be too high of a risk
because of concerns about public opposition. Parsons, in its capacity as
the government's contractor, awarded Perma-Fix a contract in December 2002
to demonstrate its ability to successfully treat the hydrolysate. However,
before any hydrolysate could be shipped, Parsons terminated the contract
for convenience of the government. This cancellation was caused by the
determination that an environmental permit would not be issued to
Perma-Fix by the local county government.

As part of this continuing procurement in 2005, Parsons conducted a market
survey to establish an updated range of hazardous waste treatment and
disposal prices at the commercial treatment facilities. The 10 commercial
facilities that were surveyed were the same facilities that were provided
proposal requests in 2002. In this instance, 7 of the 10 commercial
facilities provided price data for processing generic hazardous waste
material.^15 Of the 7 facilities that provided price data, 2 use
incineration, 2 use deep-well injection, 2 use biodegradation, and 1 uses
both biodegradation and deep-well injection. Program officials stated that
the prices for these firms represented a broad range of pricing for
hazardous waste treatment based on a range of treatment technologies,
locations, and marketplace factors, such as financial risks and regulatory
and environmental liabilities. The price for treating and disposing of any
waste depends on the facilities' capabilities, regulatory restrictions,
and permit requirements.

^15 Price data for DuPont were not included as part of Parsons' 2005
market research pricing for hazardous waste treatment.

Past Evaluations of On-Site Technologies Yielded Similar Results regarding
the Most Promising Technologies

Although the Army selected SCWO as its planned on-site treatment and
disposal method for Newport's hydrolysate in 1999, the Army and its
contractors conducted several more evaluations in 2001 and 2002 to
consider other on-site approaches because of Army and NRC concerns about
the reliability of SCWO. These evaluations included technologies other
than those that were considered in the Army's recent cost-benefit report,
but the technologies deemed most promising were similar to the
technologies that survived elimination in the Army's 2006 report. Earlier
study findings included the following.

           o A 2001 Parsons report identified and assessed 8 potential
           on-site technologies that were capable of processing the Newport
           hydrolysate. Initially, more than 100 technologies were identified
           in literature and database searches. After screening based on
           several criteria, including process efficiency, technology
           maturity, and the extent that they were considered low pressure or
           temperature, 8 technologies met the criteria: two types of SCWO,
           electrochemical oxidation, wet-air oxidation, two types of
           chemical oxidation, ozone (with and without peroxide), and bleach
           treatment with biodegradation. Two additional technologies were
           added--gas phase chemical reduction and plasma arc--although they
           did not meet the criteria for being low-temperature processes.
           This report found that the two types of SCWO, wet-air oxidation,
           and chemical oxidation, were the most promising technologies for
           further consideration; these are the same three technologies that
           were identified in the Army's cost-benefit report.

           o A 2002 Parsons report prepared for the Army compared various
           on-site and off-site disposal options for consideration as a
           potential backup plan for treating Newport hydrolysate. In its
           evaluation, the contractor determined that the two on-site
           treatment options--SCWO and the pretreatment/biological treatment
           option--would rate more favorably for public acceptance, but not
           as favorably for cost and schedule, primarily because of
           development and testing costs and operational risks. The
           evaluation also determined that pretreating the hydrolysate
           on-site before transporting it off-site would offer no advantage.
           The evaluation concluded that off-site options had more favorable
           ratings because of advantages in cost, schedule, and environmental
           compliance, but would likely be at higher risk for lack of public
           acceptance. Figure 1 compares the 2002 evaluation of various
           on-site and off-site treatment options by cost, schedule, public
           acceptance, and environmental compliance.

Figure 1: Comparison of 2002 Evaluation of the On-site, Off-site, and
Combination Treatment Options for Newport's Hydrolysate

Using Existing Army Incineration Sites Is Not Considered a Viable Option
at This Time

CMA officials acknowledged that using one of the four operating chemical
agent disposal facility incinerators to process the hydrolysate is
considered a technically feasible option; however, CMA has not formally
assessed all its advantages and disadvantages because CMA officials do not
believe incineration to be viable at this time. These officials told us
that from a technical standpoint, incineration could be used to dispose of
Newport's hydrolysate, and as discussed above, the Army has considered
commercial facilities that use incineration. However, it is not an ideal
solution for treating hydrolysate, which is primarily water (85 percent),
thus leading to greater energy consumption. These officials also stated
that because of the opposition to incineration of hydrolysate, both
locally in Indiana and nationally, the Army has committed to pursuing
nonincineration options first. However, should there be no permitted
commercial treatment facility reasonably available, the Army would once
again evaluate the viability/acceptability of using incineration for
disposing of Newport's hydrolysate, including evaluating the potential
legal and regulatory barriers.

Army's Cost Estimates and Programmatic Risk Analysis Were Not Reliable,
and Impact on Results Is Uncertain

The Army's report found that the DuPont plan was significantly more
cost-effective than the three considered on-site alternatives, but based
on our assessment of supporting documentation and analyses, we determined
that the underlying cost estimates used in the Army's report were not
adequate or reliable, making the cost-effectiveness determination among
options uncertain. Using OMB criteria and criteria approved by the cost
estimating community to assess the methodology, key assumptions, and data
used to develop cost estimates in the Army's cost-benefit report, we
determined that the estimates were unreliable for reasons related to

(1) the quantity and magnitude of errors, (2) quality control weaknesses,

(3) questionable or inadequate supporting source data and documentation,
and

(4) the undetermined sensitivity of key assumptions. Further, neither the
Army nor the contractor had a system of cross-checking in place to verify
computations or to substantiate the basis for some assumptions. Moreover,
we determined that the results from the Army's programmatic risk analysis
are unreliable because they were generated from the previously discussed
unreliable cost estimates and because the Army attributed no risk to
potential permitting, legal, or other challenges to the DuPont plan. It
was unclear to us whether the programmatic risks of other alternatives
were understated or overstated. Overall, we could not determine the
cumulative effect of these problems on the outcome or results of the
Army's analysis, in large part because we did not have confidence in much
of the supporting data because of the stated problems and the limited time
available to further test these data.

Cost Estimating Community Has Best Practices Criteria for Reliability

Guidance provided in OMB Circular A-94 and best practices established by
professional cost analysts, such as those identified by the Society of
Cost Estimating and Analysis, have identified characteristics of a
high-quality, reliable cost estimate. These characteristics include the
following.

           o Comprehensive. The estimate should be at a level of detail
           appropriate to ensure that cost elements are neither omitted nor
           double counted. All cost-influencing ground rules and assumptions
           are detailed in the documentation of the cost estimate.
           o Traceable. The estimate is thoroughly documented, including
           source data and significance, clearly detailed calculations and
           results, and explanations for why a particular method or reference
           was chosen. Data can be traced back to the source documentation.
           o Accurate. The estimate should be unbiased, not overly
           conservative or overly optimistic, and based on an assessment of
           most likely costs. Few, if any, mathematical mistakes are present
           and are minor in nature.
           o Credible. Any limitations of the analysis because of uncertainty
           or biases surrounding data or assumptions should be discussed.
           Major assumptions should be varied and other outcomes recomputed
           to determine how sensitive outcomes are to changes in the
           assumptions. In addition, the results of an estimate should be
           cross-checked with an independent cost estimate and a level of
           risk associated with the estimate should be identified.

Engineering Buildup Approach Was Used to Develop the Technical Cost
Estimate

In developing the cost comparisons that were cited in the post-treatment
estimate report, an engineering buildup approach was used, which can be an
appropriate methodology for construction projects. The approach was based
on conceptual design data for manpower estimates, facility sizing,
construction, equipment costs, and throughput estimates for the on-site
options. Cost estimates for categories, such as utilities, processing
materials, and storage costs, for the accumulating hydrolysate were also
developed. For the DuPont off-site option, DuPont's past estimate was
updated based on an assessment of the impacts of program changes since the
estimate was originally provided in 2002. For all options, costs were
grouped by the following major categories: (1) project services; (2)
engineering, design, and permitting; (3) process equipment and systems;
(4) facilities construction;

(5) systemization; (6) operations and pilot test; (7) hydrolysate storage;
and

(8) closure. A contingency factor was added to each estimate to account
for estimating, commercial, and technical risks.

Cost Estimates Were Unreliable Because of Inadequate Supporting
Documentation and Numerous Computational Errors

The technical cost analysis that the Army used in estimating the costs of
the proposed off-site option and the three on-site options contained in
its cost-benefit report did not follow all applicable guidance from OMB
and best practices for a cost-effectiveness analysis. Specifically, the
quality of some of the underlying estimates in the technical report was
affected because the supporting analysis was not comprehensive nor
traceable in that data sources were frequently not provided throughout the
analysis nor was it accurate because of the numerous computational errors.
Neither the Army nor the contractor performed independent cross-checks of
the costs or the technical parameters that went into the estimates.

Our analysis revealed numerous instances where the data were not
comprehensive or traceable. We determined that the documentation provided
was not detailed enough to provide an accurate assessment of the quality
of each alternative's cost estimate. For example, neither the technical
report nor the supporting documentation referenced the source for numerous
data inputs, such as the sources for equipment installation labor hour per
unit parameters or chemical reagent unit costs. Additionally, the basis of
estimate documented for some data inputs were found to be inadequate for
assessing estimate credibility, such as staffing estimates, labor rates,
and other direct costs.

Our analysis also revealed many computation errors that affect the
accuracy of the cost estimates, including an incorrect rate being applied
to all labor categories for

5 years, leading to costs for one category of one option being overstated
by about

$34 million and another option's solid waste disposal costs being
understated by approximately $3.5 million. CMA officials acknowledged that
there was no system in place to independently verify the accuracy of the
data. In total, the errors affected all options and led to both over- and
underestimating of costs. However, to the extent that we could correct
identified inaccuracies, our recalculations just for computation errors
did not result in a significant variance from the Army's analysis. The
estimated costs would fall in the same order that the Army had originally
computed, although the net difference in costs between the DuPont option
and each on-site option was reduced. Table 2 shows the relative comparison
of the corrected costs versus the reported cost estimates.

Table 2: Comparison of Reported and Corrected Cost Estimates for the Three
On-Site Options Relative to DuPont's Cost Estimates (without Programmatic
Risk)

Treatment              Reported cost     Corrected cost Change in relative 
                     estimates relative estimates relative  costs of reported 
option              to DuPont's cost        to DuPont's and corrected cost 
                               estimate     corrected cost          estimates 
                                                  estimate                    
Chemical                $145,900,000       $130,625,000      ($15,275,000) 
oxidation                                                                  
Wet-air oxidation       $148,900,000       $133,525,000      ($15,375,000) 
Supercritical           $200,500,000       $178,125,000      ($22,375,000) 
water oxidation                                                            

Source: GAO analysis of U.S. Army data.

Note: In the Army's cost-benefit report, to protect proprietary
information generated by DuPont, the estimated costs for implementation of
each on-site option was reported relative to the estimated cost for the
DuPont option (considered the base cost) without disclosing the actual
value of the DuPont cost estimate.

Our estimate corrects only for obvious mathematical and spreadsheet errors
and does not account for unsubstantiated input parameters or parameters
used in the spreadsheets that are in conflict with the documentation. For
example, there were differences between consumption levels used in the
spreadsheet model versus the level documented in the post-treatment
estimate report. These discrepancies could potentially translate to an
underestimate of nearly $15 million. This discrepancy and others like it
are not reflected in our estimate because it is not obvious which
consumption level is correct. To resolve discrepancies like these, an
independent technical assessment would need to be conducted to verify the
validity of inputs and assumptions used to prepare the estimates.

Uncertainty of Cost Estimate Is Not Adequately Addressed

The Army's cost analysis does not sufficiently address the uncertainty of
its cost estimates, which affects the credibility of its conclusions.
First, the technical report does note that the estimate is a rough order
of magnitude estimate for cost and schedule that can be used to provide a
basis for evaluating probable life cycle costs. CMA officials stated that
the Association for the Advancement of Cost Engineering International's
Cost Engineers' Notebook was used to develop the order of magnitude
estimate. According to the technical report, the cost estimates are based
on conceptual design data, and because of the breadth of technological
alternatives considered, relative unique processes, and lack of processing
data for Newport hydrolysate, the technical cost estimate should be
considered in the range of plus
30 percent and minus 15 percent. However, neither the Army's cost-benefit
report nor the supporting post-treatment estimate report provided
estimates that reflect these ranges of outcomes. For example, applying the
worst case to DuPont (plus 30 percent) and the best case (minus 15
percent) to one or more of the on-site options could significantly reduce
the cost difference, although DuPont would still be more cost-effective.
Second, the Army did not perform a sensitivity analysis to assess how
variations in certain key assumptions could affect its cost estimates
although there can be imprecision in both underlying data and modeling
assumptions. For example, the cost estimates were based on the DuPont
off-site option having about 2.5 times greater throughput capacity than
each of the on-site treatment technologies. This assumption leads to a
greater disparity between the on-site and off-site operation costs since
the operation period, and its associated costs, would be longer for the
on-site options. However, it is possible that the actual throughput could
increase or decrease based on design and operational considerations.
Because such uncertainty is basic to many analyses, its effects should be
analyzed and reported. There was no analysis done to determine the effects
of varying this assumption on the cost estimate. Third, the cost estimates
also do not address the uncertainty associated with impacts that
environmental permitting activities, actions of public or government
agencies, or public opinion could have on program execution. This
uncertainty is particularly relevant since these impacts have greatly
affected the program in the past, delaying the Army's proposed plan for
over 2 years.

Army's Programmatic Risk Analysis Was Not Reliable Because It Used
Unreliable Technical Cost Estimates and Understated Risks

We determined that the Army's programmatic risk analysis that added
additional costs to each option is also unreliable because the analysis
was generated from the previously discussed unreliable technical cost
estimates and because the Army attributed no risk to potential permitting,
legal, or other challenges to the DuPont plan. The programmatic risk
analysis is used to account for unknown risks that could affect the cost
or schedule of given options. This analysis uses a statistical
distribution model that typically extends the schedule durations by a
scaled amount based on the level of risk (none, low, medium, and high)
assigned to each of three phases: design/construction, operations, and
closure.

Based on this programmatic risk analysis, the Army added additional costs
to each option. The proposed DuPont plan had the least additional costs
added during the programmatic analysis, while the net additional cost
(total additional costs minus additional costs for DuPont) for the three
options ranged from $84 million to
$146 million.

Conducting a programmatic risk analysis is an acceptable method for
applying unknown risk; however, it depends heavily on the judgment used
when assigning risks. For example, Army officials assigned no programmatic
risk to DuPont's design/construction phase because the process would use
commercially available facilities and personnel. Another reason cited for
not assigning risk was that the technical cost estimates contained
sufficient known risk for the limited scope and design that would be
needed at DuPont. However, this risk determination does not take into
account the potential permitting, legal, or other challenges that may
arise, which could delay construction, transport of the hydrolysate to New
Jersey, or start of operations. Based on the history of delays associated
with implementing the proposed plan, it would be prudent to account for
these risks. It was unclear to us whether the programmatic risks of other
alternatives were understated or overstated.

Conclusions

The Army has been pursuing the off-site treatment of Newport's hydrolysate
at a commercial treatment, storage, and disposal facility since it adopted
an accelerated disposal approach in 2002. One of the reasons that has been
frequently cited for adopting this approach is that it would provide
substantial cost savings over designing, constructing, and operating an
on-site treatment and disposal method. However, from the time that the
accelerated approach was adopted, the Army faced resistance on many fronts
because of skepticism concerning advantages attributable to the off-site
treatment option. If the Army is to be successful in garnering support for
its plan, then it is imperative that the Army use a transparent process to
develop cost estimates that are comprehensive, traceable, accurate, and
credible. Without reliable underlying cost estimates, the Army, the
Congress, and the public cannot have confidence that the most
cost-effective solution for the treatment and disposal of Newport's
hydrolysate has been selected.

Recommendations for Executive Action

To ensure confidence in the reliability of the underlying cost estimates
for the Army's decision to send hydrolysate from the Newport Chemical
Depot, Indiana, off-site for treatment, which indicate significant cost
and schedule savings compared to on-site disposal of the hydrolysate, we
recommend that the Secretary of Defense direct the Secretary of the Army
to take the following four actions.

           o Conduct the Army's cost-benefit analysis again using best
           practices so that its data and conclusions are comprehensive,
           traceable, accurate, and credible.
           o Correct any technical and mathematical errors in the cost
           estimate.
           o Establish quality control and independent review processes that
           check data sources, calculations, and assumptions.
           o Perform a sensitivity analysis of key assumptions, including, at
           a minimum,

           (1) variations in the throughput rates for various options; (2)
           the technological uncertainty of options; and (3) for off-site
           treatment and disposal options, the risks associated with
           potential permitting, legal, and other challenges.

Agency Comments

In written comments on a draft of this report, DOD concurred with our
recommendations and stated that it fully supports the use of best
practices for the development and preparation of cost estimates. DOD
stated that the Army will be preparing a new cost-benefit analysis based
on a revised cost estimate, which will be independently reviewed and
verified, and will contain an analysis of assumptions. DOD estimated that
the revised cost estimate will be available by the third quarter of fiscal
year 2007 and the new cost-benefit analysis will be available by the
fourth quarter of fiscal year 2007. DOD's comments are reproduced in full
in enclosure II. DOD also provided us with technical comments, which have
been incorporated where appropriate. Finally, we adjusted our fourth
recommendation in the draft report in light of DuPont's January 5, 2007,
announcement that it was no longer interested in being considered as a
potential treatment site.

                                   _ _ _ _ _

We are sending copies of this report to other interested congressional
parties. We also are sending copies to the Secretary of Defense; the
Secretary of the Army; and the Director, Office of Management and Budget.
We will make copies available to others upon request. In addition, the
report will be available at no charge on GAO's Web site at
http://www.gao.gov .

If you or your staff have any questions concerning this report, please
contact me at (202) 512-5431 or by e-mail at [email protected] .
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. GAO staff who made
key contributions to this report are listed in
enclosure III.

Davi M. D'Agostino

Director
Defense Capabilities and Management

Enclosures - 3

List of Congressional Committees

The Honorable Carl Levin
Chairman
The Honorable John McCain
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable Ike Skelton
Chairman
The Honorable Duncan Hunter
Ranking Minority Member
Committee on Armed Services
House of Representatives

The Honorable Daniel Inouye
Chairman
The Honorable Ted Stevens
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
United States Senate

The Honorable John P. Murtha
Chairman
The Honorable C.W. Bill Young
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
House of Representatives

Enclosure I

          Description of Eight Congressionally Specified Disposal and

                  Treatment Options for Newport's Hydrolysate

           o Chemical oxidation. Organic wastes are mixed with an oxidizing
           agent (such as hydrogen peroxide) and water at low temperatures
           and low pressure. This process breaks down the organic components
           of the waste into either benign compounds or compounds that can be
           more easily treated by other means.

           o Electrochemical oxidation. A similar chemical process to
           chemical oxidation, electrochemical oxidation uses a metallic
           element as an oxidizing agent within an electrochemical cell. This
           also is a low-temperature, low-pressure process.

           o Biodegradation. This process uses microorganisms to destroy
           certain organic compounds in dilute aqueous (water) solutions.
           This low-temperature, low-pressure process is often used to treat
           sewage. Some organic compounds can be readily broken down by
           biotreatment, while the structure of other compounds makes them
           highly resistant.

           o Solvated-electron technology. This process involves the reaction
           of organic waste materials with solutions of metallic sodium in
           anhydrous liquid ammonia. In contrast to most of the other
           technologies considered by the Department of Defense's Chemical
           Demilitarization Program, this is a reduction rather than an
           oxidation reaction. Solvated-electron technology is a
           low-temperature, low-pressure process.

           o Wet-air oxidation. This process oxidizes organic compounds in
           water using dissolved oxygen and air. It operates at relatively
           higher temperatures and pressures than chemical oxidation. Wet-air
           oxidation is commercially in use worldwide to treat industrial
           wastes.

           o Supercritical water oxidation. This process destroys organic
           compounds through oxidation by introducing air to water that has
           been superheated beyond its critical point (374DEGC). This is a
           high-temperature, high-pressure process.

           o Gas-phase chemical reduction. This process uses hydrogen and
           steam at high temperatures to break down organic compounds into
           more easily treated chemicals. Like solvated-electron technology,
           gas-phase chemical reduction is a reduction reaction. This is a
           high-temperature but low-pressure process.

           o Plasma-arc technology. This process uses electrical discharges
           through gases to produce intense radiant energy and
           high-temperatures to break down organic compounds in a containment
           chamber. This is an extremely high-temperature but low-pressure
           process.

Enclosure II

                    Comments from the Department of Defense

Enclosure III

                     GAO Contact and Staff Acknowledgments

GAO Contact

Davi M. D'Agostino, (202) 512-5431 or [email protected]

Acknowledgments

In addition to the contact named above, Mark A. Pross, Assistant Director;
Bonita Anderson; Rodell Anderson; Susan Ditto; Jennifer Echard; Neil
Feldman; James Lawson; Brian Octeau; Charles Perdue; and Karen Richey made
key contributions to this report.

(350933)

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