oversight

Chemical Weapons: Better Management Tools Needed to Guide DOD's Stockpile Destruction Program

Published by the Government Accountability Office on 2003-10-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                             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 9 a.m. EST
Thursday, October 30, 2003   CHEMICAL WEAPONS
                             Better Management Tools
                             Needed to Guide DOD’s
                             Stockpile Destruction
                             Program
                             Statement of Henry L. Hinton, Jr., Managing Director,
                             Defense Capabilities and Management




GAO-04-221T 

                                                October 30, 2003


                                                CHEMICAL WEAPONS

                                                Better Strategic and Risk Management
Highlights of GAO-04-221T, a testimony          Tools Needed to Guide DOD’s Stockpile
to the Subcommittee on Terrorism,
Unconventional Threats and Capabilities,        Destruction Program
Committee on Armed Services, House of
Representatives




Since its inception in 1985, the                The Chem-Demil Program faces schedule delays and higher costs, but it has
Chemical Demilitarization                       improved emergency preparedness in communities near the sites. In 2001,
(Chem-Demil) Program has been                   the Chem-Demil Program extended its schedule milestones and increased its
charged with destroying the                     cost estimates from $15 billion to about $24 billion. Since then nearly all
nation’s large chemical weapons                 sites have experienced delays, stemming from problems such as: plant safety
stockpile. After years of planning
and building new facilities, the
                                                issues, environmental requirements, approving emergency preparedness
program started destroying the                  plans, and funding shortfalls. The program needs a risk management plan to
stockpile in 1990. As of October                mitigate problems affecting program schedules, costs, and safety. Program
2003, the program had destroyed                 officials say the delays have raised the cost estimates by an additional
26 percent of the 31,500-ton agent              $1.4 billion, to more than $25 billion as of September 2003. Based on current
stockpile, and its total estimated              schedule slippages, GAO believes that costs will grow higher and further
cost to destroy the entire stockpile            delays will occur. (See figure.)
is more than $25 billion.
                                                Because of schedule delays, the United States will not meet CWC’s April
This testimony summarizes GAO’s                 2004 deadline to destroy 45 percent of the stockpile and it risks not meeting
September 2003 report and                       the original 2007 deadline to complete destruction of the entire stockpile.
addresses the following issues:
(1) the status of schedule
                                                Unless the program fixes the problems causing delays, the United States also
milestones and cost estimates,                  risks not meeting CWC’s deadline of 2012, if extended.
(2) the impact of the current
schedule on the Chemical Weapons                The program has suffered from several long-standing management and
Convention (CWC) deadlines,                     organizational issues. The lack of sustained leadership has undercut
(3) the challenges associated with              decision-making authority and obscured accountability. The program’s
managing the program, and (4) the               complex structure, with multiple lines of authority, has left roles and
status of the Chemical Stockpile                responsibilities unclear. It does not have an overarching, comprehensive
Emergency Preparedness Program                  strategy to guide and integrate its activities and monitor its performance.
(CSEPP).
                                                The Army and the Federal Emergency Management Agency have helped
                                                state and local communities become better prepared to respond to chemical
GAO recommended in its                          emergencies. Despite these gains, CSEPP costs are rising because some
September 2003 report that the                  states have expanded their preparedness requests beyond the approved
Department of Defense (DOD) and                 budgets. These requests amount to $88 million for fiscal years 2004 and 2005.
the Army develop an overall
strategy and implementation plan                Comparison of 1998, 2001, and 2003 Cumulative Program Cost Estimates
for the program and implement a
risk management approach, and
DOD concurred.




www.gao.gov/cgi-bin/getrpt?GAO-04-221T.

To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Henry L.
Hinton, Jr. at (202) 512-4300 or
hintonh@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.

As you requested, my statement focuses on the following issues: (1) the
status of schedule milestones and costs at the sites, (2) the impact that the
current schedule may have on the Chemical Weapons Convention1 (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 October 2003, the Chem-Demil Program had destroyed an estimated
8,210 tons (26 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. Of the four sites that have begun agent destruction
operations, Johnston Atoll has destroyed all of its stockpile; Tooele, Utah,
has reduced its stockpile by about 44 percent; Anniston, Alabama, has
destroyed about 2 percent of its stockpile; and Aberdeen, Maryland, has
eliminated over 3 percent of its stockpile. Current schedule estimates
show that the Army will not complete destruction of the entire stockpile
until after the year 2012.

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.




1
 In April 1997, the United States Senate ratified the Convention on the Prohibition of
the Development, Production, Stockpiling and Use of Chemical Weapons and on Their
Destruction, commonly known as the Chemical Weapons Convention. S. Res. 75,
April 24, 1997.



Page 1                                                   GAO-04-221T Chemical Weapons
     My testimony today draws heavily from our most recent report, which was
     issued in September 2003.2 In summary, we found the following:

•	   While the Chem-Demil Program has revised its schedule milestones and
     increased its cost estimates several times, with the latest revision in 2001,
     the program still cannot meet them. According to current Army schedules
     for destruction, five sites will miss their 2001 schedule milestones, less
     than 2 years after they were reset. The other four sites have not yet missed
     schedule milestones, but they too have experienced delays. Most of the
     substantial delays have stemmed from problems that DOD and the Army
     have been unable to anticipate or influence. These include plant safety
     issues, difficulties in meeting environmental permitting requirements,
     public concerns about emergency preparedness plans, and funding
     shortfalls. 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 mitigation plans. Army officials told us they are now
     developing such an approach. According to program officials, the delays
     that have occurred since the 2001 schedule revisions, along with the
     resolution of emergency preparedness issues, have raised the program’s
     cost estimates by $1.4 billion, to a current total of more than $25 billion.
     We expect this amount will grow substantially before the destruction of
     the stockpile is complete if these delays continue.

•	   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 recently asked the governing body of the convention for an
     extension beyond the April 2004 deadline. If the delays that the program
     has experienced continue, the United States also risks not meeting the
     2007 deadline to destroy 100 percent of the stockpile. Unless the
     Chem-Demil Program is able to fix the problems that have caused these
     delays, the United States also risks not meeting CWC’s deadline, if
     extended to 2012, to destroy the entire stockpile. The CWC allows
     extensions of up to 5 years to the 2007 deadline.

•	   Despite recent efforts to improve the management and streamline the
     organization of the Chem-Demil Program, the program has suffered from
     several long-standing and unresolved leadership, organizational, and
     strategic planning issues. The program has lacked sustained leadership at


     2
      U.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).



     Page 2                                              GAO-04-221T Chemical Weapons
                               both the upper levels of oversight and at the program-manager level,
                               which undercuts decision-making authority and obscures accountability.3
                               In addition, the program’s complex management structure, with multiple
                               lines of authority within the Army and the separation of program
                               components among the Army, DOD, and the Federal Emergency
                               Management Agency (FEMA), has left roles and responsibilities for the
                               different parts of the program unclear. FEMA manages the emergency
                               preparedness program (CSEPP) for communities near the storage sites.
                               Finally, the absence of an overarching, comprehensive strategy has
                               resulted in a program without a clear road map to closely guide and
                               integrate all of its activities and monitor its performance.

                          •	   Since our 2001 report,4 the Army and FEMA have helped state and local
                               communities become better prepared to respond to chemical emergencies.
                               Based on the states’ self-assessments and FEMA’s reviews, all of the states
                               with nearby chemical storage sites are considered close to being fully
                               prepared for emergency issues. 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, exceeding them by $88 million for fiscal years 2004 and
                               2005, especially as they move closer to agent operations phase. FEMA and
                               the Army have implemented a number of recommendations we made to
                               improve technical assistance and guidance, training, and compliance
                               measures to assess preparedness.

                               Despite several revisions to schedule milestones since the program’s
Most Sites Will Miss           inception, the Chem-Demil Program still is unable to meet these
Schedule Milestones            milestones because of unanticipated delays. Most incineration sites have
                               missed important milestones established in 2001. Delays at Anniston,
due to Program’s               Umatilla, and Pine Bluff have already resulted in their missing the
Inability to Anticipate        2001 schedule milestones to begin chemical agent destruction operations
                               (operations phase).5 Johnston Atoll has missed its schedule milestone
and Influence Issues           for shutting down the facility (closure phase).6 Although Tooele has not


                               3
                                Upper level refers to the offices of the assistant secretary or above in the Departments of
                               the Army and Defense.
                               4
                                 Chemical Weapons: FEMA and Army Must Be Proactive in Preparing States for
                               Emergencies, GAO-01-850 (Washington, D.C.: Aug. 13, 2001).
                               5
                                At the time of the 2001 schedule revision, all three of these sites were in the systemization
                               phase; thus, their next milestone was to begin agent destruction operations.
                               6
                                At the time of the 2001 schedule revision, agent destruction operations had been
                               completed and its next milestone was to complete closure of the facility.



                               Page 3                                                     GAO-04-221T Chemical Weapons
     missed any milestones since the 2001 schedule was issued, the site has
     undergone substantial delays in destroying its stockpile primarily because
     of a safety-related incident in July 2002. If additional delays occur at the
     Tooele site, it could also exceed its next milestone as well. Table 1 shows
     the status of the incineration sites that will miss 2001 schedule milestones.

     Table 1: Slippage of 2001 Scheduled Milestone Dates, by Incineration Site

                                                                                              Difference
                                                                                                 between
                                              2001 schedule                               2001 schedule
                             Next schedule    date to begin       Date to begin            and estimate
                                                                             a
         Site                milestone        next milestone      next phase             (no. of months)
         Anniston            Operations       July 2002           Aug. 2003                         +13
         Umatilla            Operations       July 2003           Mar. 2004                          +8
         Pine Bluff          Operations       Oct. 2003           Apr. 2004                          +6
         Johnston Atoll      End of closure   Sept. 2003          Nov. 2003                          +2
     Sources: DOD and the U.S. Army.
     a
     Program manager’s official estimates for Pine Bluff, Umatilla and Johnston Atoll.


     Many of the recent delays at the incineration sites have resulted from
     operations incidents, from environmental permitting problems,
     community protection concerns, and funding issues—a trend that we
     identified in previous reports on the program. Among the events that have
     caused delays at incineration sites since 2001 are the following:

•	   Incidents during operations. At Tooele, a chemical incident involving a
     plant worker who came into contact with a nerve agent while performing
     routine maintenance led to the suspension of agent destruction operations
     from July 2002 to March 2003. An investigation attributed the incident to
     inadequate or poorly followed worker safety procedures, and a corrective
     action plan, including an improved safety plan, was instituted before
     operations resumed. Since operations restarted in March 2003, Tooele has
     experienced several temporary shutdowns.

•	   Environmental permitting. Several environmental permitting issues have
     delayed the start of agent destruction operations at sites at Umatilla and
     Anniston.7 At Umatilla, the delays stemmed from several unanticipated


     7
      We have reported on permitting delays in Chemical Weapons And Materiel: Key
     Factors Affecting Disposal Costs and Schedule, GAO/NSIAD-97-18 (Washington, D.C.:
     Feb. 10, 1997).



     Page 4                                                          GAO-04-221T Chemical Weapons
     engineering changes related to reprogramming software and design
     changes that required permit modifications and to a shutdown by state
     regulators because furnaces were producing an unanticipated high amount
     of heavy metals during surrogate agent testing. At Anniston, delays
     occurred because state environmental regulators did not accept test
     results for one of the furnaces because the subcontractor did not follow
     state permit-specified protocols.

•	   Community protection. Concerns about emergency preparedness for
     local communities have led to additional delays at Anniston. These
     concerns included the inadequacy of protection plans for area schools and
     for special needs residents (e.g., elderly and disabled individuals) who
     would have difficulty in an evacuation. Although we reported on this issue
     in July 19968 and again in August 2001, and a senior DOD official identified
     it as a key concern in September 2001, the Army had difficulty
     satisfactorily resolving the issue with key state stakeholders. As a result,
     operations did not begin until August 2003.

•	   Funding. Delays at Pine Bluff and Johnston Atoll occurred because
     DOD redirected fiscal year 2002 destruction program funds to acquire
     $40.5 million worth of additional emergency protection equipment for
     Anniston. To cover this unfunded budget expense, the Army reduced
     Pine Bluff’s budget by $14.9 million and Johnston Atoll’s budget by
     $25.1 million, leading to systemization and closure milestone slippages,
     respectively, at these sites. Program officials told us that the total cost of
     this schedule slip would ultimately be $116 million due to the extended
     period before closure. The program is likely to face unfunded
     requirements as programwide funding requests continue to exceed
     budgeted amounts. As of October 2003, according to preliminary
     estimates from FEMA, unfunded CSEPP requirements for all sites are
     expected to amount to $39.4 million and $49.0 million for fiscal years 2004
     and 2005, respectively.

     Unlike the incineration sites, the two bulk-agent only sites, Aberdeen and
     Newport, have experienced delays but have not breeched their schedule
     milestones. In 2002, DOD approved using an alternative technology
     (neutralization), instead of incineration, at these two sites. This technology
     is expected to accelerate the rate of destruction at these two sites. The



     8
      See U.S. General Accounting Office, Chemical Weapons Stockpile:
     Emergency Preparedness in Alabama Is Hampered by Management Weaknesses,
     GAO/NSIAD-96-150 (Washington, D.C: July 23, 1996).



     Page 5                                           GAO-04-221T Chemical Weapons
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 removal of residual agent from bulk
containers and has extended its planned completion date by 6 months,
from October 2003 to March 2004. In addition, Newport has faced
construction delays and community resistance to offsite treatment of
waste byproducts. As a result of these delays, Newport has extended its
planned start date for agent operations by 5 months, from October 2003 to
February 2004.

At two sites, Pueblo, Colorado, and Blue Grass, Kentucky, no milestones
were set in the 2001 schedule because DOD had not yet selected a
destruction technology. DOD has now selected a destruction technology
for these sites, but it made decisions several months later than estimated.
More importantly, DOD has set initial schedule milestones for these
two sites that go beyond the extended April 2012 CWC deadline.
According to DOD officials, these milestones are preliminary and will be
reevaluated once contractors finish initial facility designs.

The Chem-Demil Program has faced continued delays with the program
largely because DOD and the Army have not yet developed a risk
management approach to proactively anticipate and address potential
problems that could adversely affect program schedules, costs, and safety.
Such an approach could also leverage knowledge of potential problems
gained at other sites. Instead, according to a DOD official, the program has
used a crisis management approach, which has forced it to react to, rather
than control, issues. The program had drafted a plan in June 2000 that was
intended to address these issues. However, according to a program
official, this plan was never approved or implemented because of a change
in management in 2001.

The delays and schedule extensions9 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 an Army



9
 Schedule extensions are caused largely by actual destruction rates being lower
than planned.



Page 6                                                  GAO-04-221T Chemical Weapons
                     official, the program will use events that have occurred since 2001 in
                     presenting new cost estimates to DOD for preparation of the fiscal year
                     2005 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
                     likely to rise further as additional factors are considered.

                     Figure 1: Comparison of 1998, 2001, and 2003 Cumulative Program Cost Estimates




                     Although the United States met the first two chemical weapons treaty
Schedule Delays      deadlines, the continuing delays jeopardize its ability to meet the final
Jeopardize Ability   two deadlines. (See table 2.) Since reaching the 2002 deadline to destroy
                     20 percent of the stockpile in July 2001, the Chem-Demil Program has been
of Program to Meet   able to destroy only an additional 3 percent of the stockpile. In order to
CWC Deadlines        meet the April 2004 CWC deadline to destroy 45 percent of the stockpile,
                     the program would have to eliminate an additional 22 percent of the
                     stockpile within the next 6 months. Because the program will likely not be
                     able to achieve this rate of destruction, the United States has asked for an
                     extension of the 2004 deadline.

                     According to current destruction schedules, the United States will not
                     meet the 2007 deadline to eliminate 100 percent of the stockpile. As a
                     result, the United States will likely have to ask for an extension of the 2007
                     deadline to complete the destruction of the entire stockpile. The CWC
                     allows extensions of up to 5 years beyond the 2007 deadline. Unless the



                     Page 7                                           GAO-04-221T Chemical Weapons
                       program fixes the problems that are causing schedule delays, the United
                       States also risks not meeting this deadline, if extended to 2012.

                       Table 2: CWC Deadlines

                       Required percentage of        Deadlines for          Date United States
                       agent destroyed               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
                       Sources: CWC and U.S. Army.




                       Despite recent efforts to improve the management and streamline the
Long-standing          organization of the Chem-Demil Program, the program continues to falter
Management and         because several long-standing leadership, organizational, and strategic
                       planning weaknesses remain unresolved. The lack of sustained leadership
Organizational         has undercut decision-making authority and obscured accountability. The
Weaknesses Hamper      program’s complex structure, with many lines of authority, has left roles
                       and responsibilities unclear. Finally, the program lacks an overarching,
Program Progress       comprehensive strategy to guide and integrate its activities and monitor
                       performance.


Leadership Shifts      The Chem-Demil Program’s lack of sustained leadership above the
Affect Continuity in   program level is underscored by the multiple shifts in oversight
Decision Making        responsibilities that have occurred three times between DOD and the
                       Army during the past two decades. The most recent change took place in
                       2001 when oversight responsibility for the program shifted back to DOD’s
                       Office of the Secretary of Defense. Table 3 summarizes the changes.




                       Page 8                                         GAO-04-221T Chemical Weapons
Table 3: Transfer of Program Oversight Responsibilities between DOD and
the Army, 1986-Present

 Year         Oversight authority      Action
 1986         Army 	                   DOD designates the Army as the executive
                                       agent for the Chem-Demil Program.
 1994         DOD 	                    DOD makes the program a major defense
                                       acquisition program and oversight is elevated to
                                       control cost and schedule increases and to
                                       raise program visibility.
 1998         Army 	                   DOD delegates decision-making authority to the
                                       Army, primarily as part of its overall effort to
                                       reduce responsibilities and staffing of its offices.
 2001         DOD 	                    DOD reinstates its position as the program’s top
                                       decision maker. According to DOD, this was
                                       done to streamline decision making, which is
                                       consistent with the cost of the program and
                                       national and state interest in the safe and timely
                                       destruction of the stockpile.
Source: GAO analysis of DOD data.



These shifts in oversight responsibilities affected the continuity of
program decision making and obscured accountability. As a different
office assumed major decision authority, the program’s emphasis
shifted and initiatives that had been started were often not completed.
For example, when the Army had oversight responsibility for the program,
it established a memorandum of understanding with FEMA to clarify each
of their roles and responsibilities related to CSEPP.10 However, after DOD
assumed the program’s oversight responsibilities in 2001, DOD did not
follow the protocols for coordination that had been established in the
memorandum, according to FEMA and DOD officials. As a result, DOD
provided funds for emergency preparedness items without having
adequate plans for distribution, which delayed the process. This shift in
oversight responsibilities from the Army to DOD also left state and local
community officials and other stakeholders uncertain as to the credibility
of federal officials. According to FEMA and Army officials, coordination
between the two agencies has improved in the last few months and efforts
are being made to repair relationships with community and state
stakeholders.



10
 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).


Page 9                                                 GAO-04-221T Chemical Weapons
                     Similar problems have also occurred within the Army as program
                     leadership has changed. Three different officials at the Assistant Secretary
                     level have held senior leadership positions since December 2001. In
                     addition, five officials have served as the Deputy Assistant Secretary of the
                     Army (Chem-Demil) during that time.11 From April 2002 to February 2003,
                     the program manager’s position remained vacant for nearly 1 year, before
                     being filled. However, after only 4 months, the program manager resigned
                     and the Army named a replacement.

                     Frequent shifts in key leadership positions have led to several instances
                     where the lack of continuity affected decision making and obscured
                     accountability. For example, in June 2002, a program official promised to
                     support future funding requests for emergency preparedness equipment
                     from one community, but his successor did not fulfill this promise. Other
                     communities viewed the agreement with one community as an opportunity
                     to substantially expand their own funding requests. The lack of sustained
                     leadership makes it unclear who is accountable when program
                     commitments are made and not fulfilled. Moreover, when key leaders do
                     not remain in their positions to develop the needed long-term perspective
                     on program issues and effectively implement program initiatives, it is
                     difficult to maintain program progress and ensure accountability for
                     leadership actions.


Program Management   As our 2003 report documents, the Army recently reorganized the
Structure Remains    program. But this change in management structure has not streamlined
Complex              the program’s complex organization nor clarified roles and
                     responsibilities. The establishment of the Chemical Materials Agency
                     (CMA) in January 2003 has left the Director reporting to two different
                     senior Army organizations, which is one more than under the previous
                     structure. This divided reporting approach is still not fully developed,
                     but has the potential to adversely affect program coordination and
                     accountability. 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



                     11
                      This position is now the Deputy Assistant Secretary of the Army (Elimination of
                     Chemical Weapons).



                     Page 10                                                 GAO-04-221T Chemical Weapons
                          closure). This reorganization changes the cradle-to-grave management
                          approach that was used to manage sites in the past and has blurred
                          responsibilities for officials who previously provided support in areas
                          such as quality assurance and safety. Moreover, the reorganization did
                          not address two program components—Assembled Chemical Weapons
                          Alternatives (ACWA) program and community-related CSEPP. DOD will
                          continue to manage ACWA separately from the Army, as congressionally
                          directed. In addition, the Army will continue to manage CSEPP jointly
                          with FEMA.


Program Lacks Strategy    While DOD and the Army have issued numerous policies and guidance
and Implementation Plan   documents for the Chem-Demil Program, they have not developed an
                          overarching, comprehensive strategy or an implementation plan to guide
                          the program and monitor its progress. This is contrary to the principals
                          that leading organizations embrace to effectively implement and manage
                          programs. Some key aspects of an approach typically used to effectively
                          manage programs include promulgating a comprehensive strategy that
                          includes a clearly stated mission, long-term goals, and methods to
                          accomplish these goals. An implementation plan that includes annual
                          performance goals, measurable performance indicators, and evaluation
                          and corrective action plans is also important. According to DOD and Army
                          officials, the Chem-Demil Program has relied primarily on guidance and
                          planning documents related to the acquisition process.12 However, in
                          response to our recent recommendation that they prepare such a strategy
                          and plan, DOD stated that it is in the initial stages of doing so and
                          estimates completion in fiscal year 2004.


                          Since our 2001 report, the Army and FEMA have assisted state and
Emergency                 local communities to become better prepared to respond to chemical
Preparedness              emergencies. Based on the states’ self-assessments and FEMA’s reviews,
                          all 10 states with chemical storage sites located within them or nearby are
Program Is Improving,     now considered close to being fully prepared to respond to a chemical
but Costs Are Rising      emergency. This is a marked improvement from the status we reported in
                          200113 when 3 states reported that they were far from being prepared. Now,
                          6 of the 10 states are reporting that their status is fully prepared and the


                          12
                            Acquisition programs establish program goals for cost, schedule, and performance
                          parameters over the program’s life cycle.
                          13
                               GAO-01-850.



                          Page 11                                                GAO-04-221T Chemical Weapons
remaining 4 are close to being fully prepared. However, these statuses are
subject to change because the states and communities themselves can
revise or expand their agreed-upon emergency preparedness needs. They
can make these changes because the “maximum protection” concept that
governs CSEPP is open to interpretation. As a result, they can appear to be
less prepared than before. For example, Oregon certified that it was fully
prepared, but now has requested additional emergency equipment. This
request has changed Oregon’s self-reported preparedness status from fully
prepared to incomplete.

Despite these accomplishments, CSEPP costs continue to rise because,
according to Army and FEMA officials, state and local communities may
add to their emergency requirements beyond approved requests. 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 all requested funds for infrastructure, including roads
and bridges. In June 2002, Oregon certified that its community readiness
was adequate and recommended permit approval to allow test burns at
Umatilla. Since that time, Oregon has asked for additional emergency
preparedness support that exceeds its CSEPP budget. This request follows
a pattern of substantially increasing funding requests at the start of the
operations phase, as occurred at Anniston in 2001 when it received
$40.5 million for additional CSEPP items. 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 $39.4 and $49.0 million in unfunded
requirements for fiscal years 2004 and 2005, respectively. (See table 4.)




Page 12                                        GAO-04-221T Chemical Weapons
Table 4: CSEPP Unfunded Requirements (UFR) for Fiscal Years 2004 and 2005, as of October 2003

 Dollars in millions
                              FY2004 unfunded requirements                      FY2005 unfunded requirements
                                             FY2004                                             FY2005
 Funding entity        FY2004 funded   requirements   FY2004 UFRs       FY2005 funded     requirements   FY2005 UFRs
 Alabama                        21.0           41.9           21.0               19.7             36.7            17.0
 Arkansas                       16.9           24.7            7.8                 3.6            13.1             9.6
 Colorado                        3.1            2.8           -0.3                 2.5             4.5             1.9
 Confederated
 Tribes                          0.2            3.7            3.5                 0.2             0.9             0.7
 Illinois                        0.9            0.8           -0.1                 0.8             0.7             0.0
 Indiana                         3.9            4.7            0.8                 2.3             6.0             3.7
 Kentucky                        4.3            5.3            1.0                 3.7             4.4             0.7
 Maryland                        2.3            1.5           -0.8                 1.8             2.0             0.2
 Oregon                          5.7           12.4            6.7                 4.5            13.9             9.4
 Utah                            5.6            5.6            0.0                 7.1             7.0            -0.1
 Washington                      5.9            5.8           -0.1                 3.1             5.3             2.2
 FEMA support                   18.7           18.7            0.0               22.6             26.5             3.9
 Total                          88.5          127.9           39.4               72.0            120.9            49.0
Source: FEMA data.



                                          In our August 2001 report, we recommended that the Army and FEMA
                                          (1) provide technical assistance, guidance, and leadership to the three
                                          states (Alabama, Indiana, and Kentucky) with long-standing emergency
                                          preparedness issues to resolve their concerns; (2) provide all states and
                                          their communities with training and assistance in preparing budget and
                                          life-cycle cost estimates and provide guidance and plans on reentry; and
                                          (3) establish specific measures of compliance with the benchmarks to
                                          more evenly assess performance and to correctly identify requirements.
                                          The Army is continuing to provide assistance to CSEPP states and
                                          communities as requested by FEMA. FEMA now participates more often
                                          in local community CSEPP activities and sponsors an annual CSEPP
                                          conference in an effort to improve its working relationships. FEMA
                                          has also provided software to simplify development of CSEPP financial
                                          reporting documents and has published a Reentry and Recovery
                                          Workbook. The workbook fills a void in state and local guidance for
                                          emergency responders to follow in the event of a chemical emergency.
                                          Lastly, FEMA expanded its capability assessment readiness tool to assist
                                          local communities in quantifying benchmark scores.



                                          Page 13                                        GAO-04-221T Chemical Weapons
                       We recommended in our September 2003 report that the Secretary of
Agencies’ Actions to   Defense direct the Under Secretary of Defense for Acquisition,
Implement Prior GAO    Technology and Logistics, in conjunction with the Secretary of the Army,
                       to (1) develop an overall strategy and implementation plan for the
Recommendations        chemical demilitarization program and (2) implement a risk management
                       approach that anticipates and influences internal and external factors that
                       could adversely impact program performance. DOD concurred with our
                       recommendations. It said that it was in the initial stages of developing an
                       overall strategy and implementation plan and estimated that it would be
                       completed in fiscal year 2004. It also said that CMA will review the
                       progress of an evaluation of several components of its risk management
                       approach within 120 days and then that DOD would evaluate the results
                       and determine any appropriate action. In our 2001 report, we
                       recommended that the Army and FEMA make improvements to the
                       program, and they have implemented those recommendations.

                       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)
                       512-4300. Individuals making key contributions to this testimony include
                       Donald Snyder, Rodell Anderson, Bonita Oden, John Buehler, Nancy
                       Benco, and Mike Zola.




(350462)               Page 14                                        GAO-04-221T Chemical Weapons
This is a work of the U.S. government and is not subject to copyright protection in the
United States. It may be reproduced and distributed in its entirety without further
permission from GAO. However, because this work may contain copyrighted images or
other material, permission from the copyright holder may be necessary if you wish to
reproduce this material separately.
                           The General Accounting Office, the audit, evaluation and investigative arm of
GAO’s Mission              Congress, exists to support Congress in meeting its constitutional responsibilities
                           and to help improve the performance and accountability of the federal
                           government for the American people. GAO examines the use of public funds;
                           evaluates federal programs and policies; and provides analyses,
                           recommendations, and other assistance to help Congress make informed
                           oversight, policy, and funding decisions. GAO’s commitment to good government
                           is reflected in its core values of accountability, integrity, and reliability.


                           The fastest and easiest way to obtain copies of GAO documents at no cost is
Obtaining Copies of        through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and full-
GAO Reports and            text files of current reports and testimony and an expanding archive of older
                           products. The Web site features a search engine to help you locate documents
Testimony                  using key words and phrases. You can print these documents in their entirety,
                           including charts and other graphics.
                           Each day, GAO issues a list of newly released reports, testimony, and
                           correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site
                           daily. The list contains links to the full-text document files. To have GAO e-mail
                           this list to you every afternoon, go to www.gao.gov and select “Subscribe to e-mail
                           alerts” under the “Order GAO Products” heading.


Order by Mail or Phone 	   The first copy of each printed report is free. Additional copies are $2 each. A
                           check or money order should be made out to the Superintendent of Documents.
                           GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a
                           single address are discounted 25 percent. Orders should be sent to:
                           U.S. General Accounting Office
                           441 G Street NW, Room LM
                           Washington, D.C. 20548
                           To order by Phone: 	 Voice:      (202) 512-6000
                                                TDD:        (202) 512-2537
                                                Fax:        (202) 512-6061


                           Contact:
To Report Fraud,
                           Web site: www.gao.gov/fraudnet/fraudnet.htm
Waste, and Abuse in        E-mail: fraudnet@gao.gov
Federal Programs           Automated answering system: (800) 424-5454 or (202) 512-7470


                           Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800
Public Affairs 	           U.S. General Accounting Office, 441 G Street NW, Room 7149
                           Washington, D.C. 20548