Defense Environment Alert
April 23, 2002

ACQUISITION REPORT SAYS CHEM DEMIL PROGRAM WILL COST $24 BILLION

The Defense Department in a recent acquisition report says the chemical demilitarization program will cost nearly $24 billion, confirming a number that correlates with extensions in the chemical weapons destruction schedule past 2012 for some sites. An international treaty that governs the destruction of stockpiled chemical weapons allows countries such as the United States to ask for a five-year extension to the treaty's destruction deadline, but even with an extension, the Army would have to be done by 2012.

DOD released the cost figure as part of a package of selected reports on major defense acquisition program cost and schedule changes since the September 2001 reporting period. In a summary explanation of significant cost changes for the chemical demilitarization program, DOD says the program costs increased from $13.2 billion to $23.7 billion, primarily because of revisions to the estimate to demilitarize those weapons that are stockpiled. Selected Acquisition Reports "summarize the latest estimates of cost, schedule, and technical status," according to an April I I DOD press release.

The summary lists the primary reasons why the cost of the program has escalated. They are "(1) revised processing rates based on operational experience at the Johnston Island and Tooele facilities, (2) schedule extensions for disposal operations, (3) new/emerging environmental regulations, (4) worse-than-expected condition of the stockpile, (5) increase in equipment, labor rates, and construction costs, and (6) higher emergency preparedness costs," it says. The revised cost figure is as of Dec. 31, 2001.

The Army and DOD last fall indicated the chemical demilitarization stockpile program would cost a total of between $20 billion and $24 billion, depending on the schedule for the program. The Army's objective was centered on the lower number, which correlated with a schedule that completed destruction at six sites by fiscal year 2009. At the other two remaining sites, the Army predicted it would be done by the end of FY 12 in Kentucky, and by the end of FY07 in Colorado.

The release of the acquisition report, though, indicates that the Army's "objective" schedule is off the table, says a spokesman for the Chemical Weapons Working Group (CWWG), noting that schedule drives cost. CWWG has long advocated non-incineration destruction technologies for the stockpile program. The acquisition report to Congress on the cost of the program names a figure that is reflective of the "threshold" schedule, the source says.

The Army's program manager for chemical demilitarization (PMCD) office last fall announced revised estimates that pegged the overall chemical demilitarization program at a cost of $20 billion and said it would take as long as FY09 to destroy stockpiled chemical weapons at some sites -- a projection the military called the "objective schedule." Meanwhile, an Office of the Secretary of Defense group known as the Cost Analysis Improvement Group (CAIG) projected a cost of $24 billion and a schedule DOD and the Army said was the "threshold" for all but two stockpile sites. DOD Under Secretary for Acquisition, Technology & Logistics E.C. "Pete" Aldridge approved both schedules at the time.

PMCD in an October 2001 press release said the cost estimate of $24 billion for the threshold program is "to accommodate for potential two to three year extensions to the objective schedule in the event they are needed." A chart distributed by the Army last November indicated that the CAIG-developed schedule had the Kentucky site completing destruction at the end of fiscal year 2016, and the Colorado site finishing at the end of FYI 3. Both the Alabama and Oregon sites, it projected, would finish by the end of FY 11, and the other sites would be done with destruction at earlier dates.