1). As of March 2006, Russia had destroyed about 1,158 metric tons of blister agents, about 3  percent of its stockpile. Until destroyed,  chemical weapons remain a proliferation threat. In addition, Congress  has conditioned funding for the Shchuch’ye facility on the Secretary of  Defense’s certification that, among other conditions, Russia has allocated at least $25 million to eliminating its chemical weapons and has developed a practical plan for destroying its chemical weapons stockpile. Construction Has Progressed, but Project Is behind Schedule and Faces Substantial Challenges

Since our last visit to the Shchuch’ye site in 2003, we found that Parsons  and DOD had made progress in constructing the facility. However, key buildings had fallen behind schedule, affecting the facility’s overall cost and schedule. Furthermore, the failure of Parsons to develop and implement a  usable EVM system has limited DOD’s efforts to oversee project schedule  and cost. Since October 2005, Parsons has incurred costs for personnel salaries,  rent, and transportation of more than $3 million per month, which will  continue until the subcontract is awarded. The delay in awarding the contract for the remainder of Building 101 has  impacted the overall schedule for completing the facility’s construction. Cost and Schedule Subject to Uncertain Progress of Russian Construction, an Unpredictable Russian Operating Environment, and System Testing Issues

The cost and schedule of the Shchuch’ye facility are subject to continuous  risks. Parsons was expected to have a validated EVM  system by March 2005. DOD has not yet conducted an IBR for the Shchuch’ye project and does not plan to do so until after Parsons awards the  subcontract to complete Building 101, possibly in June 2006. In 2000, the Russian  government spent about $16 million for chemical weapons destruction. needed  to support the facility’s operations. The Russian government will need continued international assistance to  complete destruction of its chemical weapons stockpile. The Russian  government estimates it will need about $5.6 billion to eliminate its entire  stockpile. Conclusion

Until destroyed, Russia’s stockpile of chemical weapons—especially nerve agents contained in small munitions, such as those stored at Shchuch’ye— remain a proliferation threat, vulnerable to diversion and theft. Although  progress has been made on the physical construction of the facility over  the past 3 years, DOD continues to encounter numerous challenges that  affect the completion of the Shchuch’ye CWDF. Parsons’ EVM system, implemented to help  manage the schedule and cost of the Shchuch’ye project, contains unreliable and inaccurate data; thus, DOD cannot use it as a management tool. Even with significant international assistance at Shchuch’ye and other destruction facility sites, the Russian government will likely fail to destroy its entire chemical weapons stockpile by the CWC extended deadline of 2012. We traveled to the Russian Federation to observe construction of the CTR- funded chemical weapons destruction facility at Shchuch’ye.
Why GAO Did This Study

Until destroyed, Russia's stockpile of chemical weapons remains a proliferation threat, vulnerable to theft and diversion. Since 1992, Congress has authorized the Department of Defense (DOD) to provide more than $1 billion for the Cooperative Threat Reduction (CTR) program to help the Russian Federation construct a chemical weapons destruction facility (CWDF) at Shchuch'ye to eliminate about 14 percent of its stockpile. Over the past several years, DOD has faced numerous challenges that have increased the estimated cost of the facility from about $750 million to more than $1 billion and delayed the facility's operation from 2006 until 2009. DOD has attributed the increase cost and schedule to a variety of factors. In this report, we (1) assess the facility's progress, schedule, and cost and (2) review the status of Russia's efforts to destroy all of its chemical weapons.

What GAO Found

Although DOD has made visible progress over the past 2 years in constructing the chemical weapons destruction facility at Shchuch'ye, it continues to face numerous challenges that threaten the project's schedule and cost. Primarily, key buildings on the site have fallen behind schedule due to difficulties working with Russian subcontractors. Such delays have been costing DOD more than $3 million per month since October 2005 and will continue until the award of a crucial subcontract, possibly in June 2006. Uncertain progress of Russian construction on the site, unpredictable Russian regulatory requirements, and various technical issues, such as testing the facility, could cause further schedule delays and increase costs. Also, DOD lacks a reliable earned value management (EVM) system to record, predict, and monitor the project's progress. DOD allocated $6.7 million to the project's contractor in September 2004 to establish an EVM system and expected to have a validated EVM system in place by March 2005. DOD cannot use the current EVM system to assess the final schedule and cost for completing the Shchuch'ye facility because it contains flawed and unreliable data. In addition, the contractor has not yet conducted an IBR of the Shchuch'ye project. Furthermore, it remains uncertain whether the Russian government can destroy its entire chemical weapons stockpile by the Chemical Weapons Convention (CWC) extended deadline of 2012. As of March 2006, Russia had destroyed about 3 percent of its 40,000 metric tons of chemical weapons at two completed destruction facilities. To eliminate the remainder of its chemical weapons over the next six years, the Russian government must construct and operate five additional destruction facilities, including Shchuch'ye. The Russian government has indicated that it will need continued international assistance to destroy the remaining stockpile.