Weapons of Mass Destruction: Status of the Cooperative Threat Reduction
Program (Letter Report, 09/27/96, GAO/NSIAD-96-222).

Pursuant to a congressional request, GAO provided information on the
Department of Defense's (DOD) draft 1996 multiyear Cooperative Threat
Reduction (CTR) program plan, focusing on its: (1) estimated costs; and
(2) potential impacts on helping control nuclear weapons and materials,
and eliminating strategic delivery vehicles.

GAO found that: (1) the draft 1996 CTR multiyear plan does not
adequately reflect budgetary uncertainties associated with some projects
and cost estimates or important developments that have occurred since
1995; (2) although the CTR program has made progress in helping Russia
dismantle and store its nuclear weapons arsenal, DOD has not yet
resolved important issues concerning planned Russian nuclear weapons
storage and chemical weapons destruction facility projects; (3) the
estimated costs for the chemical weapons facility are unknown; (4) the
United States has capped its support for the nuclear weapons storage
facility that is now under construction, but CTR officials do not plan
to cap support for the chemical weapons destruction facility; (5)
funding decisions for the the chemical weapons destruction facility are
compounded by the facility's potential high cost and questions on
whether the facility will be effective at reducing the overall Russian
chemical weapons threat; (6) DOD officials consider the threat from
chemical weapons to be less urgent than the Russian nuclear threat; (7)
Russia may not be able to meet the terms of the Chemical Weapons
Convention unless six more facilities are constructed and other nations'
resume their funding commitments; (8) CTR officials lack the data needed
to independently determine the extent and effect of Russia's controls
over nuclear materials; (9) DOD has allocated or requested almost $1.5
billion for chemical weapon destruction, nuclear security, and delivery
vehicle destruction projects through 1997; and (10) CTR program costs
through 2001 are estimated to be $3.2 billion.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-96-222
     TITLE:  Weapons of Mass Destruction: Status of the Cooperative
             Threat Reduction Program
      DATE:  09/27/96
   SUBJECT:  Federal aid to foreign countries
             Chemical warfare
             Nuclear weapons
             Nuclear proliferation
             Future budget projections
             Facility construction
             Construction costs
             International cooperation
             Ballistic missiles
             Property disposal
IDENTIFIER:  DOD Cooperative Threat Reduction Program
             Russia
             Belarus
             Ukraine
             Kazakhstan
             Strategic Arms Reduction Treaty
             START
             Mayak (Russia)

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Cover
================================================================ COVER

Report to Congressional Requesters

September 1996

WEAPONS OF MASS DESTRUCTION -
STATUS OF THE COOPERATIVE THREAT
REDUCTION PROGRAM

GAO/NSIAD-96-222

Weapons of Mass Destruction

(711215)

Abbreviations
=============================================================== ABBREV

  DOD - Department of Defense
  CTR - Cooperative Threat Reduction
  FSU - former Soviet Union
  MINATOM - Russian Ministry of Atomic Energy
  MOD - Russian Ministry of Defense
  NIS - newly independent states
  START - Strategic Arms Reduction Treaty
  STI - Safeguards, Transparency, and Irreversibility

Letter
=============================================================== LETTER

B-273023

September 27, 1996

The Honorable Floyd Spence
Chairman
The Honorable Ronald Dellums
Ranking Minority Member
Committee on National Security
House of Representatives

The Honorable John Kasich
Chairman, Committee on the Budget
House of Representatives

Since 1992 the Department of Defense's (DOD) Cooperative Threat
Reduction (CTR) program has sought to help the four newly independent
states (NIS) of Belarus, Kazakstan, Russia, and Ukraine control and
reduce threats posed by weapons of mass destruction inherited from
the former Soviet Union (FSU).  In response to your requests, we
evaluated

  -- the draft 1996 multiyear CTR program plan in terms of its scope,
     depiction of project status and cost estimates, description of
     changes that occurred after the 1995 CTR multiyear program plan,
     and release to Congress and

  -- the progress, estimated costs, and potential impacts of CTR
     efforts to help control nuclear weapons and materials, eliminate
     strategic delivery vehicles, and destroy chemical weapons.

   BACKGROUND
------------------------------------------------------------ Letter :1

Upon its breakup in 1991, the Soviet Union bequeathed a vast array of
weapons of mass destruction to Russia, Ukraine, Belarus, and
Kazakstan.  This legacy included about 30,000 nuclear weapons, 2,500
strategic nuclear delivery systems, and at least 40,000 metric tons
of chemical weapons.  In 1991, Congress authorized DOD to establish a
CTR program to help these states (1) destroy weapons of mass
destruction, (2) store and transport the weapons in connection with
their destruction, and (3) reduce the risk of proliferation.

Congress has provided about $1.5 billion in fiscal years 1992-96 to
address CTR objectives.  As shown in figure 1, DOD has allocated
nearly three-quarters of these funds to delivery vehicle and
infrastructure dismantlement and destruction and to improving nuclear
material controls.\1 It has allocated the remainder to demilitarizing
defense activities,\2

destroying chemical weapons, and other efforts.  CTR program
officials have significantly increased obligations in recent years.
As of August 5, 1996, the program had obligated over $1 billion and
disbursed $571 million\3 (see app.  I for a breakdown of CTR funding
notifications, obligations, and disbursements).  The CTR program
generally procures goods and services for CTR recipient countries
instead of providing funds directly to them.

   Figure 1:  Allocation of CTR
   1992-96 Funds as of August 5,
   1996

   (See figure in printed
   edition.)

Note:  The percentages depicted above are based on DOD's
notifications to Congress of its plans to obligate funds for CTR
projects.  DOD must notify Congress at least 15 days before it may
obligate funds for a project.

Source:  GAO.

In 1994 we reported that the program's projects could have widely
varying effects and that DOD had not estimated total requirements for
achieving program objectives.\4 We recommended that the Secretary of
Defense institute a long-term planning process to help allocate CTR
funds among competing demands.  Congress subsequently required DOD to
submit a multiyear CTR plan and cost estimate with its annual budget.
DOD submitted the first version of this plan to Congress in 1995.
The second plan, now in draft, is for 1996.

--------------------
\1 Several CTR nonproliferation projects--including support for
peaceful projects for NIS weapons scientists and controls over
nonweaponized nuclear materials--have since been transferred from
DOD.

\2 We will be reporting separately on CTR defense conversion efforts.

\3 This figure may understate the actual value of CTR work performed
to date, due to lags in the CTR program's financial reporting
process.  See our report entitled Weapons of Mass Destruction:
Reducing the Threat From the Former Soviet Union--An Update
(GAO/NSIAD-95-165, June 9, 1995).

\4 See our report entitled Weapons of Mass Destruction:  Reducing the
Threat From the Former Soviet Union (GAO/NSIAD-95-7, Oct.  6, 1994).

   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

The draft 1996 CTR multiyear plan is a significant improvement over
its predecessor, but it does not adequately reflect uncertainties
associated with some projects and cost estimates and it does not
explain significant changes from the 1995 plan.  Moreover, it does
not reflect important developments that have occurred since it was
drafted in December 1995.  DOD officials have delayed the plan's
release for several months, in part because they could not quickly
adjust it to address changes in the President's budget submission for
fiscal year 1997.

In many respects, the CTR program has made important progress over
the past year.  CTR officials resolved long-standing delays in
designing a facility that Russia maintains is needed to store nuclear
components from dismantled weapons.  CTR officials also began
responding to Russian requests for aid in improving nuclear weapons
storage and transportation security and helped some FSU states
dismantle nuclear delivery vehicles.  CTR aid helped Ukraine remove
nuclear warheads for shipment back to Russia and build a facility for
neutralizing retired intercontinental ballistic missiles.  In
addition, DOD completed most of its dismantlement equipment
deliveries to Russia and began jointly developing technical
requirements with CTR recipients.  The CTR chemical weapons
destruction project demonstrated the feasibility of Russia's
previously unvalidated destruction technology in the laboratory.

Despite such progress, DOD has not yet resolved important issues
concerning the CTR program's Russian nuclear storage and chemical
weapon destruction facility projects.  Although the storage
facility--which will cost the United States at least $185 million--is
now under construction, the United States and Russia have not yet
agreed as to how DOD will be able to observe Russia's use of the
facility to store materials from dismantled weapons.  While CTR
officials have capped financial support for the storage facility at a
certain level,\5 they do not plan to similarly cap U.S.  support to
the planned chemical weapon destruction facility.  As of September 4,
1996, they had yet to determine how much that facility's construction
would cost the United States.  A year-old CTR estimate of $900
million was based on little design data.  DOD may not have a more
reliable estimate before it requests new funds for the destruction
facility.

Concerns regarding the potential high cost of the chemical weapons
destruction facility are compounded by uncertainties regarding its
impact on the Russian chemical weapons threat.  DOD officials
consider this threat to be less urgent than the Russian nuclear
threat.  By itself, the facility would require over a decade to
destroy declared chemical weapons stocks at one location.  Russia
would need to construct six more facilities to meet Chemical Weapons
Convention requirements.\6 Other nations' commitments fall short of
the billions of dollars that Russia will need to comply with the
convention.

While CTR projects, if properly executed, should to some degree
improve FSU controls over nuclear materials and augment Russia's
chemical weapons destruction capabilities, CTR officials lack the
data needed to independently determine the extent of such
improvements.  In contrast, CTR delivery vehicle dismantlement
activities may yield some quantifiable measures of impact.

To date, DOD has allocated or requested almost $1.5 billion for
chemical weapon destruction, nuclear security, and delivery vehicle
destruction projects for fiscal years 1992 through 1997.  It
estimates that the CTR program will cost a total of $3.2 billion
through fiscal year 2001.

This report recommends that the Secretary of Defense make needed
improvements to future CTR multiyear plans and refrain from
obligating funds for constructing a pilot chemical weapon destruction
facility until DOD prepares a more reliable estimate of how much the
facility's construction will cost the United States.  It also
suggests that Congress may wish to consider linking DOD's authority
to obligate CTR funds for the nuclear storage facility to progress in
concluding an agreement on the facility's openness to the United
States.

--------------------
\5 The specific figure is controlled as "For Official Use Only."

\6 When the convention enters into force (in 1997, as currently
projected), it will require parties to destroy chemical weapons
stocks in 10 years, with a 5-year extension if needed.

   CTR MULTIYEAR PLAN
------------------------------------------------------------ Letter :3

      STRENGTHS AND WEAKNESSES OF
      THE DRAFT CTR PLAN
---------------------------------------------------------- Letter :3.1

The CTR program office used the results of a new and improved
bottom-up planning process in drafting the 1996 multiyear plan.  The
new process requires CTR officials to develop a separate, detailed
project plan for each CTR project.  The individual project plans use
a standardized format that depicts each project's long-term funding
profile, objectives, acquisition strategy, schedule, measures of
effectiveness, and cost estimate basis.  The CTR program office used
the project plans, which are updated semi-annually, as the basis of
its overall plan.

In contrast to the previous CTR multiyear plan, the December 1995
draft contained more detailed data concerning several CTR projects
and was sometimes more candid in its description of the challenges
facing CTR projects than the preceding plan.  The draft plan also
detailed, for the first time, the program's measures for assessing
the effectiveness of CTR efforts.  In its description of these
measures, the plan noted that the program lacks the data and tools
needed to independently assess the effectiveness of CTR chemical
weapons and nuclear safety projects in achieving CTR objectives of
reducing the threat from weapons of mass destruction.  It indicated
that such projects would instead be assessed in terms of their
achievement of project milestones.  The plan also indicated that the
success of delivery vehicle destruction projects will be evaluated by
determining the NIS countries' progress in meeting Strategic Arms
Reduction Treaty (START) drawdown schedules.  In doing so, the plan
noted that the program will only be able to link such progress to
specific CTR projects by using recipient-country statements--rather
than on any available quantifiable data.

Despite these improvements over the prior multiyear plan, the
December 1995 draft plan had some deficiencies.  We found that it did
not always fully depict known project uncertainties nor did it reveal
the wide variations in certainty of the project cost estimates
embedded in its depictions of program cost.  For example, the draft
plan did not distinguish between cost estimates based on contracts
that had already been awarded or completed and estimates based on
little or no design data.  The draft plan also did not (1) indicate
whether officials had omitted risk and contingencies from cost
estimates or (2) fully identify and explain significant changes in
the depiction of projects included in the previous plan.

      DELAYED RELEASE OF THE PLAN
---------------------------------------------------------- Letter :3.2

Section 1205 of the National Defense Authorization Act for Fiscal
Year 1995 (P.L.  103-337, Oct.  5, 1994 ) directs the Secretary of
Defense to submit an annual report on DOD's plans and funding for the
CTR program with the President's budget submission.  This requirement
for a multiyear CTR plan was intended to provide Congress with
greater visibility into DOD's long-term CTR strategy and the
resources needed to implement that strategy.\7

DOD failed to comply with this requirement in 1996.  Although the CTR
program office completed its draft in December 1995, DOD did not
complete action on the plan in time to submit it with the President
budget's submission in April 1996.  According to DOD officials, DOD
failed to issue the plan primarily because the CTR program office
could not quickly revise the draft plan to make it fully consistent
with the President's budget submission for fiscal year 1997.\8 Such
revisions were called for because the plan's 1996 spending
assumptions had been rendered obsolete by the Fiscal Year 1996
National Defense Authorization Act--which was not enacted until
February 1996.\9 Officials in the DOD Comptroller's office did not
want to release the draft plan because it was not consistent with the
President's budget submission for 1997.  After weeks of discussion,
DOD officials agreed to add an explanatory addendum to the plan.
However, as of September 4, 1996, neither the plan nor the addendum
had been submitted to Congress.

DOD officials told us in July 1996 that they hoped to submit the
plan--without updating it--to Congress by the end of September
1996.\10 Because DOD will not update the plan before releasing it,
the plan will not reflect significant CTR-related developments that
occurred during the first half of 1996, nor will it reflect current
budgets.  For example, the plan would not reflect

  -- the program's reallocation of $60 million in fiscal year 1996
     funds from Russian chemical weapons destruction to strategic
     delivery vehicle dismantlement work in Ukraine, Belarus, and
     Kazakstan;

  -- progress made in early 1996 in defining CTR dismantlement
     projects in Russia; and

  -- the U.S.  response to Russian requests in March and June 1996
     for help in upgrading as many as 50 nuclear weapons storage
     sites.

DOD officials informed us that the time-consuming process of updating
the plan to reflect such changes would further delay the plan's
release to Congress.  They said the changes would be reflected in
next year's multiyear plan.

--------------------
\7 In our October 1994 report we recommended that DOD institute a
proactive, long-term CTR planning process to help allocate resources
among competing demands and that it revise the resulting plan
periodically.

\8 Other factors cited by DOD officials included a furlough
experienced by DOD staff during a 1995 budget crisis, internal delays
in moving the draft through DOD before reaching the Comptroller's
office, and the need to obtain interagency comments.

\9 For example, statutory language barred use of $60 million in
fiscal year 1996 funds for Russia because the President could not
certify that Russia was complying with multilateral obligations
concerning biological weapons.  The funds were instead made available
for use in the other three CTR recipient states.

\10 H.R.  3230, (104th Cong.) as passed by the House of
Representatives, would prohibit DOD from obligating any fiscal year
1997 CTR funds until 15 days after DOD has provided the plan and two
other reports.

   SECURING NUCLEAR WEAPONS AND
   MATERIALS
------------------------------------------------------------ Letter :4

Since the Soviet Union's collapse in 1991, the safety and security of
FSU nuclear weapons and their fissile components have been sources of
concern for the United States.  The CTR program is seeking to address
these concerns by helping Russia construct a fissile material storage
facility and control its nuclear weapons.

      STORAGE OF FISSILE WEAPONS
      COMPONENTS
---------------------------------------------------------- Letter :4.1

The CTR program is supporting Russian Ministry of Atomic Energy
(MINATOM) efforts to design and construct a facility at Mayak that
will store 50,000 containers of fissionable material from dismantled
nuclear weapons.  While Russia has not sought U.S.  help in
dismantling its nuclear weapons, it has asserted that it lacks
storage space for fissile materials from dismantled weapons and asked
for U.S.  help in designing and constructing such a facility.  A key
MINATOM official told us in March 1996 that MINATOM needs space for
about 100,000 containers of fissile materials.\11

--------------------
\11 Two to five containers could be needed to hold components from a
single warhead.  CTR program briefings indicate that 100,000
containers could hold components from approximately 25,000 weapons.
We reported in October 1994 that Russia may have to store components
from as many as 24,000 dismantled warheads by 2001.

         PROGRESS ON MAYAK DESIGN
         AND CONSTRUCTION
-------------------------------------------------------- Letter :4.1.1

The design of the Mayak facility is nearly 2 years behind schedule,
due to a unilateral Russian design concept change in 1994 that
eliminated the relevance of about a third of the CTR program's
initial $15-million design project.  However, in July 1996, with CTR
support, Russian designers provided a one-third design document to
CTR officials.  DOD officials anticipate certifying that the Mayak
design is one-third complete in September 1996.

Despite some stoppages, Russian construction activity has proceeded
over the past year with CTR-supplied materials.  The CTR program
recently hired a U.S.  design and construction contractor to help
coordinate CTR aid at the Mayak facility.  If construction continues
as currently anticipated, the facility could begin storing its first
25,000 containers in 1999 and be entirely completed in 2001.\12

--------------------
\12 DOD shipped almost 7,000 CTR-funded fissile material containers
to Mayak by mid-July 1996 and plans to deliver another 17,000
containers by September 1997.  DOD has obligated most of the $50
million allocated for these containers and asked for another $38.5
million in fiscal year 1997 funds for additional containers.

         LACK OF PROGRESS ON MAYAK
         TRANSPARENCY
-------------------------------------------------------- Letter :4.1.2

While the design and construction of the Mayak facility have
progressed over this year, the United States and Russia have yet to
finalize transparency arrangements for the facility.  This lack of
progress in obtaining Mayak transparency arrangements is due largely
to the failure to date of talks on a broader range of reciprocal
U.S.-Russian transparency measures to complete an agreement that
would have included Mayak and other facilities.

According to DOD, Mayak transparency should provide the United States
with reasonable assurance that Russia is storing only materials from
dismantled nuclear weapons and that these materials are not being
reused for weapons.  Russian officials appear to have agreed to Mayak
transparency in principle.  They have indicated that the facility
will be transparent to the United States and stated that it will
provide for "joint accountability and transparency measures
permitting confirmation by the U.S." In October 1994 Russian
officials stated that they were prepared to pledge that Mayak would
contain only materials from dismantled nuclear weapons and that these
materials would not be reused for weapons.\13

However, the United States and Russia have yet to conclude an
agreement specifying exactly how Russia's transparency pledges will
be implemented at Mayak.  According to executive branch officials,
U.S.  efforts to pursue such an agreement went into a hiatus when the
U.S.  and Russian governments launched the broader Safeguards,
Transparency, and Irreversibility (STI) negotiations.  STI would have
addressed Russian concerns regarding reciprocity by establishing (1)
reciprocal inspections to confirm each nation's stockpiles of highly
enriched uranium and plutonium from dismantled nuclear weapons, (2)
data exchanges on nuclear warhead and fissile material stocks, and
(3) cooperative arrangements to monitor excess warheads awaiting
dismantlement.  However, the STI talks ceased in late 1995.

Given recent Mayak design and construction progress, DOD and MINATOM
agreed in early 1996 that Mayak transparency efforts would proceed
regardless of STI's status.  U.S.  and Russian technical experts met
in June 1996 to discuss the planned Mayak material control and
accounting process.  According to a key DOD official, the talks
established that this process--if supplemented by inspection
equipment--would generate the data needed for transparency.

However, the United States and Russia have not begun discussing the
extent to which the United States will have access to such data at
Mayak.  DOD officials have not developed a position concerning the
degree of access DOD requires at Mayak or a timetable for completing
transparency arrangements.  Executive branch agencies disagree on
whether talks on Mayak transparency should be pursued in a broader
government-to-government forum or in the narrower DOD-MINATOM forum
that addresses the Mayak project.

Until a detailed transparency arrangement is agreed upon, the United
States does not know exactly how it will be able to insure that Mayak
is being used as intended.  A failure to reach such an agreement in
the future would force the United States to choose between curtailing
support for the facility--after investing many tens of millions of
dollars--and compromising on its access rights.  However, a key DOD
policy official told us that the details of the Mayak transparency
arrangements can be worked out over time without harm to the project
and suggested that even a partially built facility--if eventually
completed by Russia alone--would help secure Russian fissile
materials.\14

--------------------
\13 In doing so, they appeared to link these pledges to reciprocal
U.S.  pledges.  In the past Russian officials have raised the issue
of reciprocity in connection with Mayak.  U.S.  officials have held
that U.S.  transparency rights derive from U.S.  funding and would
not result in reciprocal Russian access to U.S.  storage facilities.
DOD officials told us that Russian officials have not raised the
issue since 1994.

\14 Russian officials have also suggested that they will place the
facility under International Atomic Energy Agency safeguards.  DOD
officials told us that they have not discussed this possibility with
Russia in detail.

         MAYAK COST ESTIMATES
-------------------------------------------------------- Letter :4.1.3

DOD plans to spend at least $185 million on Mayak design and
construction.  It has allocated $119 million in fiscal year 1992-96
funds and asked Congress for another $66 million for fiscal year
1997.  As of August 5, 1996, DOD had obligated about $72 million for
Mayak design and construction.

While Mayak's construction could ultimately cost over $800 million,
according to a 1994 estimate by the U.S.  Army Corps of Engineers,
the facility's cost to the United States should be considerably less.
In congressional testimony during 1996, DOD officials stated that the
United States will pay no more than half of the cost of building
Mayak.  CTR officials plan to cap the CTR program's support of Mayak
construction at a certain specific level of effort\15 and ask
Congress for added funding on an as-needed annual basis.\16 The Corps
will complete a more certain cost estimate--using the recently
obtained one-third design data--by September 1996.

--------------------
\15 The exact figure is controlled as "For Official Use Only."

\16 As a result, the CTR office dropped more than $280 million in
risk and contingency funds from the Corps' estimate.

         IMPACT OF MAYAK ON CTR
         OBJECTIVES
-------------------------------------------------------- Letter :4.1.4

The theft or misuse of uranium and plutonium components from
dismantled nuclear weapons would constitute an enormous security risk
to the United States and other nations.  The Mayak project, if
properly executed, would provide Russia with a modern and secure
facility for storing components from thousands of nuclear weapons.\17
MINATOM officials told us in March 1996 that the facility would help
alleviate the build-up of materials from dismantled weapons and
greatly improve the safety and security of the stored materials.\18

Nonetheless, assessing the degree to which Mayak will improve
Russia's existing storage capabilities is difficult.  We reported in
October 1994 that U.S.  agencies had been unable to confirm a Russian
shortage of storage space.  The draft CTR multiyear plan acknowledges
that the program cannot measure the impact of CTR fissile material
storage projects--such as Mayak--on CTR program objectives because
DOD lacks (1) direct knowledge of Russian nuclear warhead
dismantlement activities, (2) control cases, and (3) data and models
needed for assessing risk.  DOD instead plans to assess the success
of the project in terms of its achievement of project milestones.

--------------------
\17 CTR briefings indicate that the facility's 50,000 containers will
hold materials from about 12,500 nuclear weapons.

\18 MINATOM officials told us in March 1996 that Russia needs a
second storage facility (at Tomsk) and that it would need outside
financing.  The Tomsk facility would be similar to the Mayak facility
in capacity and cost.  The United States and Russia have not yet
agreed to cooperate in constructing such a facility.

      NUCLEAR WEAPONS SECURITY
      PROJECTS
---------------------------------------------------------- Letter :4.2

Statements made by U.S.  and Russian officials over the past 2 years
indicate that Russian nuclear weapon security may need to be
improved.  A U.S.  government expert told a congressional committee
in August 1995 that the Russian nuclear weapons security system had
not been designed to counter insiders who might be tempted to steal a
nuclear weapon and that the system was facing new strains engendered
by the Soviet Union's collapse.  In March 1996, the minority staff of
the Senate Committee on Governmental Affairs, Subcommittee on
Investigations, testified that "security at some nuclear weapon field
sites may be suspect." Key Russian Ministry of Defense (MOD)
officials have indicated concern about the possibility that nuclear
weapons could be stolen in transit or damaged in accidents on
Russia's deteriorating rail system.  They have also stated that MOD's
top nonproliferation priority is to improve security at nuclear
weapon storage sites.

         PROGRESS CONCERNING
         NUCLEAR WEAPON SECURITY
-------------------------------------------------------- Letter :4.2.1

The CTR program has made progress over the past year in its efforts
to improve Russian security over nuclear weapons slated for
dismantlement.  During 1996 the CTR program paid a Russian railyard
almost $1 million to complete the installation of CTR-supplied fire
and intrusion detectors on railcars used to carry nuclear warheads.
The program had previously given MINATOM armored blankets and
emergency response equipment to help protect weapons in transit.

A new set of projects has begun emerging from CTR discussions with
MOD over the past year.  For example, the CTR program plans to
deliver 150 supercontainers to MOD by early 1997 to help protect
warheads in transit against penetration and fire.  It has also begun
shipping five rail-mobile emergency support modules to help respond
to rail accidents and terrorist attacks.

The CTR program has also developed several new projects to help MOD
protect its nuclear weapons in storage.  It has agreed to help MOD
develop a prototype automated nuclear weapon inventory system, which
Russia reportedly lacks, and has begun providing needed computers and
training.  MOD will use the prototype in developing an operational
system for weapons to be dismantled.

Perhaps most significantly, in 1996 MOD for the first time asked for
CTR assistance in upgrading security at as many as 50 nuclear weapon
storage sites.  In response, the CTR program has moved to provide MOD
with computerized site security assessment models and data on
personnel security assessment tools.  MOD has proposed that the CTR
program establish a technical training base in Russia to install,
test, and evaluate security technology equipment and procedures.
Under such an approach, a CTR-funded contractor at the training base
could support MOD-cleared Russian subcontractors--possibly by helping
them identify security needs and procuring needed equipment from
Russian firms.

         ESTIMATED COST OF NUCLEAR
         WEAPON SECURITY
         ENHANCEMENTS
-------------------------------------------------------- Letter :4.2.2

The CTR program has allocated a total of $116 million in fiscal year
1992-96 funds--and has requested another $15 million for fiscal year
1997--to help improve the security of nuclear weapons in Russia.
This $131 million includes $89.5 million on the new MOD transit and
storage projects, of which $39.5 million is slated for improving MOD
storage security.\19

However, the costs of the MOD storage security projects--while still
undefined--will almost certainly exceed $39.5 million.  The program
manager for these CTR projects told us that each of Russia's 50
storage sites might cost about $2 million to upgrade, based on DOD's
current understanding of requirements.\20

--------------------
\19 The remaining $41.5 million--$131 million minus $89.5
million--has already been largely obligated for the railcar, blanket,
and emergency response projects.

\20 However, costs could increase if the as-yet-undefined CTR effort
proves to be comparable to the Department of Energy's efforts to
upgrade MINATOM's systems for protecting and accounting for
weapons-usable fissile materials.  The Department of Energy estimates
that upgrading each MINATOM facility could cost $5 million to $10
million.  See our report entitled Nuclear Nonproliferation:  Status
of U.S.  Efforts to Improve Nuclear Material Controls in Newly
Independent States (GAO/NSIAD/RCED-96-89, Mar.  8, 1996).

         POTENTIAL IMPACT OF
         SECURITY ENHANCEMENT
         PROJECTS
-------------------------------------------------------- Letter :4.2.3

While CTR aid could help improve the security of Russian nuclear
weapons to some degree, assessing the extent of this improvement will
be very difficult.\21 The CTR program's draft 1996 multiyear plan
indicates that the program lacks the data and analytical tools needed
to assess the extent to which its nuclear security projects are
achieving CTR objectives.\22 Limited access to the sensitive
locations where CTR nuclear weapons security aid is being used will
affect the CTR program's ability to determine how effectively the
assistance is being used.  For example, Russian officials recently
denied a DOD audit team access to MOD sites where CTR-supplied
emergency response equipment was located and instead brought such
equipment to the DOD team.\23 Similarly, any DOD integrating
contractor for the nuclear weapons storage site security project
would be precluded from visiting actual weapon storage sites.

--------------------
\21 In March 1996, MOD officials told us that they had used
CTR-provided armored blankets in removing warheads from Ukraine and
CTR-provided railcar upgrades to help secure nuclear warheads in
transit.  However, U.S.  analysts have previously informed us that
such aid would not make Russia's weapons transportation system safe
by western standards.

\22 As a result, program officials plan to assess these projects in
terms of their achievement of project milestones.

\23 According to DOD, this practice is consistent with U.S.-Russia
CTR agreements which provide for access to sites of usage "if
possible." We plan to provide Congress with a separate report on the
CTR program's audits and examinations after DOD releases its
currently overdue report accounting for CTR assistance.

   DISMANTLING NUCLEAR DELIVERY
   VEHICLES AND INFRASTRUCTURE
------------------------------------------------------------ Letter :5

According to DOD, Russia, Ukraine, Belarus, and Kazakstan inherited
about 2,500 strategic nuclear delivery systems from the FSU, along
with an extensive nuclear weapons-related infrastructure.  According
to U.S.  estimates, these four states must eliminate over 900
strategic nuclear delivery vehicles and safely remove over 4,000
nuclear warheads from deployment by 2001 to comply with START
requirements.  These estimates also indicate that if Russia ratifies
START II, it must also eliminate another 200 launchers and remove up
to 3,000 warheads from deployment.\24 Under the terms of the Lisbon
Protocol, Ukraine, Belarus, and Kazakstan must become non-nuclear
weapons states by 2001.\25

The CTR program has launched a broad array of projects to eliminate
or reduce NIS nuclear delivery vehicles and infrastructure.  These
projects have helped Ukraine, Russia, Kazakstan, and Belarus
dismantle nuclear delivery systems.

--------------------
\24 START I limits the FSU to 1,600 delivery vehicles and 6,000
warheads by no later than 2001.  The as yet unratified START II
accord further lowers these limits and bans intercontinental
ballistic missiles that carry multiple re-entry vehicles.

\25 As legal successors to the Soviet Union, Belarus, Kazakstan, and
Ukraine became parties to START I through the Lisbon Protocol.  In
signing the protocol, these countries committed to eliminating
strategic nuclear offensive arms from their respective territories.
According to DOD, Ukraine and Kazakstan are now non-nuclear states
and Belarus is scheduled to become so by the end of 1996.

      DISMANTLEMENT PROGRESS
---------------------------------------------------------- Letter :5.1

Over the past year, progress has been made in implementing CTR
nuclear dismantlement projects in the recipient countries.  The CTR
program has increased dismantlement-related equipment deliveries and
completed some dismantlement projects.  It has evolved from simply
providing dismantlement equipment requested by the recipient
countries to jointly developing technical requirements with them.

According to DOD, Ukraine is proceeding with eliminations of
strategic delivery systems.  In Ukraine, the CTR program has
completed deliveries of fuels, cranes, vehicles, and other assistance
to facilitate the removal of nuclear warheads.  CTR assistance helped
Ukraine complete an SS-19 missile neutralization facility, funded a
contractor to destroy SS-19 missile silos, and provided intermodal
tank containers and a storage facility to safely transport and store
nearly 4,000 metric tons of liquid rocket fuel removed during missile
dismantlement.

With CTR assistance, Ukraine will eliminate all of its SS-19 missiles
and silos.  The program has made less progress regarding Ukraine's
SS-24 missile systems.  Under START, Ukraine plans to destroy its
SS-24 silos and has already returned SS-24 warheads to Russia.
However, it has not yet decided whether to dismantle its SS-24
missiles or retain them for space launch purposes.\26

Recently, CTR program officials have begun work on defining Ukrainian
nuclear infrastructure elimination projects.  According to a
Ukrainian Ministry of Defense official, such projects could include
dismantling missile system fueling and storage sites and destroying
nuclear warhead storage bunkers.

According to DOD, Russia is now ahead of its START I schedules.
During the past year, the CTR program has nearly completed equipment
deliveries to help Russia dismantle heavy bombers, submarine-launched
ballistic missiles, and intercontinental ballistic missiles.  For
example, CTR assistance has recently provided intermodal containers
and flatbed railcars to safely transport and store some 100,000
metric tons of liquid rocket fuel during dismantlement.  CTR-provided
equipment and services will also help dispose of this fuel.

Until earlier this year, the Russians had only requested CTR
assistance in the form of equipment procurement and support.  Now,
however, CTR and Russian Committee of Defense Industry officials have
begun to jointly develop Russian technical requirements for CTR aid.
For example, both CTR and Russian officials are working together to
eliminate over 900 solid rocket motors and 17,000 metric tons of
solid rocket propellant.  Also, in cooperation with the Russians, CTR
program officials reviewed Russia's SS-18 elimination process and
determined that the Surovatikha facility has reached full capacity
and cannot meet START II goals.  CTR officials are now considering a
Russian proposal to increase the dismantlement rate at this facility
by over 60 percent.  In August 1996, U.S.  and Russian officials held
discussions to help improve Russian submarine-launched ballistic
missile dismantlement processes.

In Kazakstan, CTR-provided equipment will help destroy seven heavy
bombers and dispose of 7,800 metric tons of liquid rocket fuel.  A
CTR-funded contractor should begin restoring the SS-18 silo sites in
September as Russia completes silo destruction efforts.  By early
next year, CTR aid plans to close nearly 60 nuclear weapon test
tunnels.  Program officials are also considering a project to
dismantle a biological weapon production facility.

In Belarus, a CTR-funded contractor should begin eliminating SS-25
missile launch pads by September 1996.  A CTR-provided incinerator
will help eliminate about 10,000 metric tons of liquid rocket fuel.
In addition, CTR and Belarusian officials are defining nuclear
infrastructure elimination projects that will help destroy missile
storage and command and control bunkers and safely store radioactive
materials.

--------------------
\26 Under START, Ukraine is not required to eliminate its SS-24
missiles.

      DISMANTLEMENT COSTS
---------------------------------------------------------- Letter :5.2

The CTR program plans to commit about $669 million for NIS
dismantlement efforts through fiscal year 1996--a greater amount than
it has invested in any of its other program areas.  In addition, the
CTR budget request for fiscal year 1997 allocates another $47 million
for Ukrainian dismantlement efforts and $52 million more for Russia,
including funding for initial
START II-related efforts.  The program has not requested any fiscal
1997 funds for Belarus and Kazakstan.

As of August 5, 1996, DOD had notified Congress of plans to obligate
about $669 million, had obligated nearly $383 million and had
disbursed almost $218 million.  Of the dismantlement funds notified
to Congress, Ukraine will receive about $267 million and Russia will
receive $236 million.  Figure 2 shows the distribution of notified
dismantlement funds among the recipient countries.

   Figure 2:  CTR Dismantlement
   Funds Notified as of August 5,
   1996

   (See figure in printed
   edition.)

Source:  GAO.

Current CTR dismantlement cost estimates appear to be relatively
certain at this point.  However, future START II-related costs could
increase total CTR dismantlement costs beyond the amount currently
allocated for fiscal years 1992-97.  A Russian official suggested to
us that Russia could need several hundred million dollars to meet its
START II requirements.  Such an estimate may include contractor and
logistics support for destroying submarine-launched ballistic
missiles, dismantling SS-18s, and funding solid rocket motor and fuel
elimination.\27 U.S.  and Russian officials continue to define these
efforts.

--------------------
\27 The CTR program considers aid for Russian solid rocket motor fuel
elimination to be a nonproliferation effort and not one linked to
START II compliance.

      POTENTIAL IMPACT OF
      DISMANTLEMENT PROJECTS
---------------------------------------------------------- Letter :5.3

According to its draft multiyear plan, the program plans to assess
the effectiveness of CTR dismantlement projects by determining how
well recipients meet or exceed anticipated START drawdown rates.  The
plan acknowledges that the link between drawdowns and specific
projects is generally based on recipient countries' statements,
rather than on quantifiable data available to the United States.\28

However, in contrast to other CTR efforts, U.S.  involvement in
dismantlement activities may yield some quantifiable measures of
impact.  For example, CTR-funded projects have provided Ukraine with
a capability--otherwise lacking--to dismantle and destroy its SS-19
missile systems.  In Russia, CTR assistance could increase the
missiles eliminated per year at an SS-18 dismantlement facility.

The overall impact of the destruction projects will probably vary
from one CTR recipient to another.  Without CTR dismantlement
assistance, Ukraine probably could not meet its START I requirements.
CTR assistance enabled Ukraine to return all of its nuclear warheads
to Russia by June 1996.  A Ukrainian Ministry of Defense official
told us that with CTR assistance his country can adhere to START I
and honor its treaty obligations.

In contrast, Russia met its START I delivery vehicle limit before
significant amounts of CTR aid were delivered.  However, a Russian
official told us that CTR aid has helped Russia maintain its
dismantlement efforts.  He said that Russia dismantled more systems
in the past year with CTR aid than in all prior years without it.
Specifically, CTR efforts helped to safely store and transport some
100,000 metric tons of liquid rocket propellant and will soon help
eliminate the fuel.\29 U.S.  personnel have observed the use of
CTR-provided assistance in dismantling bombers and submarine
launchers, as well as the poor condition of Russian dismantlement
equipment.

Russian officials have stated that CTR-provided hardware has been
used to dismantle SS-18 missiles in Kazakstan.\30 CTR assistance
should help eliminate Kazakstan's nuclear infrastructure, including
186 tunnels once used to test nuclear weapons at Degelen Mountain,
and thus reduce the possibility of resumed nuclear testing at that
site.  A proposed CTR project at Kazakstan's BioMedPreparat
biological weapons production plant would dismantle key components of
the facility, rendering it available for other purposes.

CTR assistance to Belarus will help destroy concrete SS-25 launch
pads in compliance with START.  As in Kazakstan, the CTR program
should help dismantle the remaining nuclear infrastructure.  While
Belarusian government officials have approved several projects, CTR
officials are still defining the specific requirements.

--------------------
\28 According to DOD, U.S.  willingness to provide CTR aid had an
important--if unquantifiable--impact on NIS decisions to undertake
dismantlement efforts.

\29 Russian officials told us last year that rocket fuel
transportation and disposition were the most crucial bottlenecks in
meeting their treaty obligations.

\30 We noted in our June 1995 report Russian difficulties in
transporting and eliminating liquid rocket fuel from dismantled
SS-18s in Kazakstan.

   DESTROYING CHEMICAL WEAPONS
------------------------------------------------------------ Letter :6

Russia currently has the world's largest declared chemical weapon
stockpile.  The bulk of this 40,000 metric ton stockpile is comprised
of nerve agents, rather than older mustard or blister agents.  Russia
has signed the Chemical Weapons Convention.  Once it ratifies the
convention, it will be committed to destroying this stockpile within
15 years of the convention's entry into force.  Russia does not have
an operational capability to destroy large quantities of chemical
weapons.

DOD officials have stated that Russian chemical and nuclear weapon
proliferation would pose a major security problem for the United
States and that the eventual destruction of Russia's huge stockpile
would significantly reduce the chemical weapon threat.  However, DOD
officials have also stated that the threat of chemical weapons is
less significant and urgent than that of nuclear weapons.

To help address the threat posed by Russia's declared stockpile, the
CTR program has adopted a strategy of "jump starting" Russia's
chemical weapon destruction efforts.  Executive branch officials have
stated that CTR project assistance would help encourage Russian
ratification of the Chemical Weapons Convention.

The program has taken the initial steps toward providing Russia
assistance leading to creation of a pilot chemical weapon destruction
facility at Shchuche that will have a destruction capacity of up to
500 metric tons of nerve agent contained in artillery shells and
supporting eventual Russian establishment of a full-scale facility,
capable of eliminating 1,200 metric tons annually.  The purpose of
the pilot facility is to gain sufficient design and operational data
to obtain approval to expand the facility's industrial capabilities
to reach the full-scale capacity.  The intent of the U.S.  support
program is not to eliminate the entire Russian chemical weapon
stockpile, but rather to provide Russia with a technologically proven
starting point.  CTR aid has also begun providing Russia with
chemical weapon destruction-related laboratories.

      PROGRESS IN PROVIDING A
      CHEMICAL WEAPON DESTRUCTION
      CAPABILITY
---------------------------------------------------------- Letter :6.1

The CTR program's chemical weapon destruction project has made some
progress in the past year.\31 The CTR program and Russia concluded
that Russia's previously unproved two-step destruction process is
effective and feasible for destroying Russia's nerve agent stocks.
\32 The United States and Russia also moved to clarify their plans
and working relationship regarding the destruction facility by
signing an implementing arrangement.  The arrangement designated MOD
as Russia's lead agency responsible for destroying chemical weapons
and outlined U.S.  and Russian roles in establishing the destruction
facility.  CTR and Russian officials also amended their July 1992
chemical weapons destruction agreement to increase U.S.  funds by $13
million and identify DOD aid to help establish the pilot facility.

U.S.  and Russian representatives also developed a 1996 work plan for
the pilot facility and five joint project plans.  The project plans
outlined each nation's specific tasks and milestones in 1996 to begin
the process of designing and developing a pilot facility using the
newly validated Russian destruction process.  CTR program officials
plan to award an engineering services contract in December 1996 for
the facility's design and process scale-up, construction, and
munitions processing equipment.  By May 1997, CTR officials hope to
have a preliminary design of the pilot facility and completed (1)
tests on optimizing the Russian destruction technology and (2) a
feasibility study to support Russian decisions on the facility's
location.

An unexpected development was the project's loss of $60 million of
its $73 million fiscal year 1996 budget.  CTR program officials
shifted these funds because the President could not certify that
Russia was complying with multilateral obligations concerning
biological weapons, as required by law.\33 Program officials were
then unable to obligate the entire $13 million during fiscal year
1996 because of Russian delays in signing the implementing
arrangement, according to a CTR official who told us that Russia held
up the arrangement in an unsuccessful attempt to obtain a U.S.
commitment to fully fund the entire facility and provide greater
intellectual property rights over the destruction process.

Program officials also shipped three mobile chemical weapons
destruction labs to Russia and reached agreement with Russian
officials on a joint project plan to establish a central analytical
laboratory in Moscow and begin hiring a contractor to oversee this
project.  DOD plans to award a contract by the end of September 1996.
The mobile analytical laboratories are to (1) monitor and analyze
environmental and verification samples at storage and destruction
sites to assess the impact of chemical weapons destruction
operations, (2) train personnel to operate destruction site
laboratories and mobile labs, and (3) address public concerns about
the safety of chemical weapons destruction activities.  According to
program officials, the mobile labs will cost $3 million, including
vehicles, training, travel, and spare parts.

--------------------
\31 In March 1996, Russia issued its long-awaited comprehensive
implementation plan for managing and destroying chemical weapons.
The plan indicates that Russia will destroy its stockpile within the
Convention's deadlines but leaves unanswered many questions about how
it would do so.

\32 They also found that the second stage of the neutralization
process, while creating a "slightly dangerous" mass of residue three
to seven times as large as the destroyed nerve agent, nevertheless
would be safe and irreversible.  As such, the process would appear to
comply with convention standards.

\33 Section 1208 of Public Law 104-106.

      ESTIMATED COSTS OF CHEMICAL
      WEAPON DESTRUCTION
---------------------------------------------------------- Letter :6.2

The CTR program's chemical weapon destruction project costs have been
modest to date, relative to other CTR projects, but could increase
greatly in the future.  DOD has allocated $68 million in fiscal year
1992-96 CTR funds for chemical weapons destruction.  DOD has asked
Congress for another $78.5 million in fiscal year 1997 to continue
program support.  DOD will use the funds to further develop chemical
and munitions processing equipment and systems and to begin designing
the pilot facility.  A 1995 CTR estimate--prepared without
site-specific data--indicated that the pilot facility could
ultimately cost as much as $900 million to build.\34

To date, the CTR program has not asked for construction funds and has
not committed to provide Russia more than $68 million in chemical
destruction aid.  U.S.  and Russian experts have agreed to amend
their bilateral assistance agreement annually to reflect yearly
funding requirements--thus limiting the project's annual financial
obligation to the amount agreed upon in the annual amendment.

Regardless of this arrangement, however, the total cost of the
facility--and the U.S.  share of that cost--remains undefined and
potentially large.  CTR officials told us that they hope to prepare a
more certain cost estimate, based on a one-third completed design, in
1998.  However, this estimate would not be ready until after DOD will
have submitted its request for fiscal year 1998 funding.  CTR
officials told us that they do not plan to cap the program's total
contribution to the project at a certain level, as they have for the
Mayak project.  DOD stated that, as with all CTR projects, funds
required for chemical weapon destruction will be assessed and
requested from Congress on an annual basis.

--------------------
\34 Russian officials told us in March 1996 that they estimate that
the facility (including its surrounding infrastructure) would cost
less than $200 million to build.  CTR officials have not reviewed
this estimate and would not attest to its reliability.

      POTENTIAL IMPACT OF CHEMICAL
      WEAPON DESTRUCTION
---------------------------------------------------------- Letter :6.3

CTR program officials plan to assess the effectiveness of their
chemical weapons destruction projects only in terms of their success
in achieving project milestones.  According to a program document,
without direct U.S.  involvement in Russian chemical weapons
elimination, the CTR program lacks the data, control cases, and risk
assessment models needed to assess these projects' impact on the
Russian chemical weapon threat.  Moreover, DOD officials note that
they cannot assess the program's impact because Russia will not
complete the task of destroying chemical weapons until after the CTR
program ends in 2001.  Nevertheless, DOD stated that Russian movement
toward that goal will allow DOD to assess progress.

While providing Russia with a proven chemical weapon elimination
technology and a functioning pilot chemical weapon destruction
facility capable of destroying 500 metric tons annually would greatly
expand Russia's current capabilities, the sheer size of the Russian
stockpile will limit the pilot facility's direct impact.  The pilot
would require more than a decade to destroy the artillery shells that
constitute the site's 14 percent share of the total Russian
stockpile.  It would not address Russia's need to construct
additional facilities at six more sites in time to meet the Chemical
Weapons Convention's time frames.

CTR officials acknowledge that the pilot facility will not address
Russia's overall Chemical Weapons Convention requirements and suggest
instead that the U.S-funded pilot facility could help "jump start"
the slow-moving Russian effort to destroy its stockpiles.  However,
there are few current indications that Russia will find the needed
resources.  Russia estimates that it will need roughly $3.3 billion
in January 1995 dollars to destroy the stockpile, according to its
comprehensive plan.\35 Russian officials told us in March 1996 that
they lack such resources and are seeking non-Russian government
sources of support.

However, foreign aid for this effort is very limited.  Aid being
provided by Germany, the Netherlands, Sweden, and the United States
falls far short of Russia's stated requirements.\36 In May 1996, the
United States and several other nations began discussing this issue
in detail at a multilateral conference in Germany.  Only the
Netherlands pledged specified financial support for Russian chemical
weapon destruction at the conference.

--------------------
\35 The CTR program has not assessed this estimate.

\36 Germany will have provided about $17 million by the end of 1996.
The Netherlands has pledged a total of about $16 million, and Sweden
has provided and promised a total of about $450,000.

   RECOMMENDATIONS
------------------------------------------------------------ Letter :7

To help clarify the presentation of programmatic and cost issues, we
recommend that the Secretary of Defense direct that the annual CTR
multiyear program plan submitted to Congress identify and explain (1)
significant cost, schedule, or scope changes from the preceding
year's plan and (2) known uncertainties affecting project cost
estimates and schedules.

We also recommend that the Secretary of Defense refrain from
obligating any CTR funds for constructing a chemical weapons
destruction facility in Russia until DOD has completed a construction
cost estimate based on a one-third completed design and specified the
U.S.  share of the estimated costs.

   MATTER FOR CONGRESSIONAL
   CONSIDERATION
------------------------------------------------------------ Letter :8

Congress may wish to consider linking DOD's authority to obligate
some or all of the funds that it may provide for constructing a
fissile material storage facility in Russia to completion of a
transparency agreement regarding the facility's use.

   AGENCY COMMENTS
------------------------------------------------------------ Letter :9

DOD concurred with our findings and recommendations.  DOD stated that
it will incorporate our recommendation regarding the CTR multiyear
plan into subsequent versions.  It also agreed not to obligate
construction funds for the chemical weapon destruction facility until
a 35-percent design has been completed and the costs have been better
defined.  DOD further stated that it will not completely disburse
construction funds for the fissile material storage facility until
transparency measures have been agreed with Russia.  (DOD's comments
are reproduced in app.  II.)

CTR officials suggested several technical and editorial revisions.
We have incorporated most of these suggestions into this report.

   SCOPE AND METHODOLOGY
----------------------------------------------------------- Letter :10

This report is the latest of a series of GAO reviews of the CTR
program since 1992 and draws upon data developed in the United
States, Russia, and Ukraine.  To assess the CTR program's current
planning process, we reviewed the CTR program's draft multiyear plan,
individual project plans, and cost estimates.  In reviewing the draft
plan, we assessed the level of detail and scope, the depiction of any
uncertainties or difficulties concerning projects and cost estimates,
and the description of changes that occurred after the CTR program's
1995 plan.  We decided that, to be useful, the plan should provide a
reasonably complete and candid depiction of the projects' status,
prognosis, likely cost, and potential impact; identify any major
changes from the preceding year's plan; and explain why those changes
have come about; and be timely.

To assess the CTR program's progress, likely cost, and potential
impact regarding controls over FSU nuclear materials, we reviewed
reports and cables detailing discussions with NIS officials;
interviewed officials at DOD's Threat Reduction Policy Office, CTR
program office, Defense Special Weapons Agency, and Army Corps of
Engineers.  We also spoke with officials at the Department of State
and the Arms Control and Disarmament Agency concerning the status of
transparency discussions.  In addition, we discussed the status and
prognosis of the Mayak and nuclear weapon security projects with high
ranking officials from Russia's Ministry of Atomic Energy and
Ministry of Defense in Moscow in 1995 and in Washington in 1996.  In
doing so, we contrasted past and current depictions of project
progress and assessed plans for overcoming current and foreseeable
obstacles.  We also reviewed the process used to prepare DOD's
estimates of the cost of the Mayak facility.  Our assessment
concerning the likely impact of these projects was based in large
part from data presented in the CTR program's draft program plan.

To assess the CTR program's progress, likely cost, and potential
impact regarding the elimination of FSU delivery vehicles, we
reviewed documents and interviewed officials at DOD's CTR program
office.  In addition, we discussed the status and prognosis of these
projects with high ranking officials from Russia's Committee for
Defense Industry and Ukraine's Ministry of Defense in Moscow and Kiev
in 1995 and Washington in 1996.  In doing so, we contrasted past and
current depictions of project progress and assessed plans for
overcoming current and foreseeable obstacles.  Our assessment
concerning the likely impact of these projects was based in large
part from data presented in the CTR program's draft program plan.

To assess the CTR program's progress, likely cost, and potential
impact regarding the destruction of Russian chemical weapons, we
reviewed reports and cables detailing discussions with NIS officials;
interviewed officials at DOD's Threat Reduction Policy Office, CTR
program office, and Army Chemical and Biological Defense Command.  We
also spoke with an official at the Arms Control and Disarmament
Agency concerning the status of the Chemical Weapons Convention.  In
addition, we discussed the status and prognosis of the chemical
weapons projects with high ranking officials from the Russian
President's Commission for Chemical Weapons Destruction and attended
an international North Atlantic Treaty Organization conference in
Bonn, Germany, on eliminating weapons of mass destruction.  In doing
so, we contrasted past and current depictions of project progress and
assessed plans for overcoming current and foreseeable obstacles.  We
also reviewed the process used to prepare DOD's estimates of the cost
of the pilot chemical weapons destruction facility.  Our assessment
concerning the likely impact of these projects was based in large
part from data presented in the CTR program's draft program plan.

We conducted our review between August 1995 and August 1996 in
accordance with generally accepted government auditing standards.

--------------------------------------------------------- Letter :10.1

We are sending copies of this report to other appropriate
congressional committees; the Secretaries of Defense and State; and
other interested parties.  Copies will also be made available to
others upon request.

Please contact me on (202) 512-4128 if you or your staff have any
questions concerning the report.  Major contributors to this report
are listed in appendix III.

Harold J.  Johnson
Associate Director, International
 Relations and Trade Issues

FUNDING STATUS OF THE COOPERATIVE
THREAT REDUCTION PROGRAM
=========================================================== Appendix I

The Cooperative Threat Reduction (CTR) program has made continued
progress in obligating and disbursing funds.  In our last report,\1
we noted that CTR obligations and disbursements had increased sharply
to almost $599 million and $177 million, respectively, as of May 8,
1995.  One year later (May 14, 1996) the program had obligated an
additional $411 million and disbursed another $327 million.

As of August 5, 1996, the program had obligated over $1 billion and
disbursed more than $571 million.  Figures I.1 and I.2 depict the
allocation of these amounts among the program's principal activities.
Table I.1 lists the amounts that the Department of Defense (DOD) has
notified, obligated, and disbursed for each CTR project as of August
5, 1996.

   Figure I.1:  Allocation of CTR
   Obligations as of August 5,
   1996

   (See figure in printed
   edition.)

Source:  GAO.

   Figure I.2:  Allocation of CTR
   Disbursements as of August 5,
   1996

   (See figure in printed
   edition.)

Source:  GAO.

                                    Table I.1

                     CTR Funding Status as of August 5, 1996

                              (Dollars in millions)

Projects by                           Notification
program area                           to Congress     Obligation   Disbursement
-----------------------------------  -------------  -------------  -------------
Chain of custody
--------------------------------------------------------------------------------
Armored blankets (Russia)                   $5.000         $3.244         $2.905

Emergency response training and equipment
--------------------------------------------------------------------------------
Belarus                                      5.000          4.980          4.147
Kazakstan                                    5.000          2.793          0.830
Russia                                      15.000         14.385         12.946
Ukraine                                      3.400          2.995          1.381

Export controls
--------------------------------------------------------------------------------
Belarus                                     16.260          9.974          6.531
Kazakstan                                    7.260          4.200          2.455
Russia                                       2.260          1.517          0.038
Ukraine                                     13.260          7.729          5.538
Fissile material containers                 50.000         48.379         17.106
 (Russia)
Fissile material storage facility           15.000         14.999         14.466
 design (Russia)
Fissile material storage facility           75.000         57.044         12.396
 (Russia)
Industrial Partnering Program               10.000         10.000          0.000

Material control and accountability
--------------------------------------------------------------------------------
Belarus                                      3.000          2.891          0.828
Kazakstan                                   23.000          7.718          2.364
Russia                                      45.000         42.817         18.349
Ukraine                                     22.500         21.522          3.200
Multilateral Nuclear Safety                 11.000         11.000          8.858
 Initiative (Ukraine)
Security enhancements for railcars          21.500         21.200         19.282
 (Russia)
Weapons security storage                    28.000          2.758          0.374
 (Russia)
Weapons security transportation             46.500         24.764          3.692
 (Russia)
================================================================================
Subtotal                                  $422.940       $316.908       $137.736

Demilitarization
--------------------------------------------------------------------------------
Defense Enterprise Fund                      7.670          7.670          7.670
Belarus                                      5.000          5.000          5.000
Kazakstan                                    7.000          7.000          7.000
Russia                                      10.000         10.000         10.000

Industrial partnerships
--------------------------------------------------------------------------------
Belarus                                     20.000         19.697         11.166
Kazakstan                                   15.000         14.905          6.701
Russia                                      38.000         37.339         12.358
Ukraine                                     55.000         54.119         40.816
International Science and                   35.000         34.585         31.914
 Technology Center (Russia)
Research and Development Foundation         10.000         10.000          5.000
 (Russia)

Science and Technology Center
--------------------------------------------------------------------------------
Belarus                                      5.000          4.950          0.468
Kazakstan                                    9.000          8.950          0.640
Ukraine                                     15.000         14.932          2.374
================================================================================
Subtotal                                  $231.670       $229.246       $141.127

Destruction and dismantlement
--------------------------------------------------------------------------------
Chemical weapons destruction                68.000         48.681         28.325
 (Russia)
Continuous communications link               2.300          1.158          0.790
 (Belarus)

Government-to-government communications link
--------------------------------------------------------------------------------
Kazakstan                                    2.300          1.576          0.670
Ukraine                                      1.000          0.989          0.464

Nuclear infrastructure elimination
--------------------------------------------------------------------------------
Kazakstan                                   23.500          7.084          3.170
Ukraine                                     23.400          0.896          0.296
Site restoration (Belarus)                  25.000         19.430         12.174
Strategic nuclear arms elimination         242.700        182.249         94.527
 (Ukraine)

Strategic offensive arms elimination
--------------------------------------------------------------------------------
Belarus                                     33.900          2.510          0.082
Kazakstan                                   78.500         35.174          4.953
Russia                                     236.000        132.539        100.872
================================================================================
Subtotal                                  $736.600       $431.392       $245.128

Other program support
--------------------------------------------------------------------------------
Arctic nuclear waste (Russia)               30.000         29.950         17.669

Defense and military contacts
--------------------------------------------------------------------------------
Belarus                                      3.524          0.780          0.366
Kazakstan                                    1.900          0.516          0.057
Russia                                      15.548          9.061          4.969
Ukraine                                      9.028          2.737          1.189
Other assessments and                       50.900         29.203         21.823
 administration costs
================================================================================
Subtotal                                  $110.900        $72.245        $46.073
================================================================================
Total                                   $1,502.110     $1,049.791       $571.065
--------------------------------------------------------------------------------
Note:  Figures may not add due to rounding.

Source:  DOD.

(See figure in printed edition.)Appendix II

--------------------
\1 Weapons of Mass Destruction:  Reducing the Threat From the Former
Soviet Union--An Update (GAO/NSIAD-95-165, June 9, 1995).

COMMENTS FROM THE DEPARTMENT OF
DEFENSE
=========================================================== Appendix I

(See figure in printed edition.)

(See figure in printed edition.)

MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C.

F.  James Shafer
Pierre Toureille
Jo Ann Geoghan
Beth Hoffman Le�n
Rona Mendelsohn
Jeffrey Phillips
Raymond Plunkett

*** End of document. ***
