a

GAO

United States Government Accountability Office

Report to Congressional Committees

June 2005 COOPERATIVE 

THREAT REDUCTION

DOD Has Improved Its 

Management and 

Internal Controls, but 

Challenges Remain

GAO-05-329
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-329.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Joseph 

Christoff at (202) 512-8979 or 

christoffj@gao.gov. 

Highlights of GAO-05-329, a report to 

congressional committees 

June 2005

COOPERATIVE THREAT REDUCTION

DOD Has Improved Its Management and 

Internal Controls, but Challenges Remain 

Through the CTR program, DOD provides assistance to help the former 

states of the Soviet Union secure and eliminate their weapons of mass 

destruction. Since 2003, DOD has improved its management and internal 

controls over the CTR program. Prior to 2003, DOD had problems managing 

the program and ensuring that the program was meeting its objectives. 

These inadequacies became apparent in 2003 following two project failures 

in Russia that cost the CTR program almost $200 million, including the never 

used liquid rocket fuel disposition facility. Following these incidents, DOD 

implemented a more structured approach to managing the CTR program. In 

July 2003, DOD filled vacancies in the office responsible for managing the 

program, providing a level of leadership and oversight that did not 

previously exist. Once in place the new leadership made important 

improvements to the program’s internal controls in the areas of 

organizational structure, risk assessments, performance measures, program 

reviews, and communication. For example, DOD now assesses and balances 

risks with project requirements and measures project performance at each 

phase. DOD also conducts semi-annual meetings to review commitments 

and responsibilities of CTR-recipient governments and to minimize risk. 

Although enhancing its internal controls helps mitigate the risks that stem 

from having to rely on the cooperation of CTR-recipient governments, DOD 

can never fully eliminate the project risks associated with recipient 

governments’ cooperation. Furthermore, while DOD’s enhancements are an 

improvement over previous internal controls, current mechanisms do not 

include a separate review of CTR projects upon their completion. As such, 

DOD lacks a system for evaluating projects upon their completion and 

applying lessons learned to future projects. 

Facility to Destroy Liquid Rocket Fuel Cost $95 Million but Was Never Used 

Source: Department of Defense.

Section 3611 of the National 

Defense Authorization Act for 

Fiscal Year 2004 mandates that 

GAO assess the Department of 

Defense’s (DOD) internal controls 

for the Cooperative Threat 

Reduction (CTR) program and their 

effect on the program’s execution. 

In addressing the mandate, we 

assessed DOD’s management and 

internal controls over 

implementing CTR projects since 

2003 by using the control standards 

for the federal government as 

criteria. In response to the 

mandate, we focused on those 

management and internal control 

areas considered most relevant to 

CTR project implementation: (1) 

building a management structure, 

(2) risk assessments, (3) 

performance measures, (4) 

program reviews, (5) 

communications, and (6) project 

monitoring. The Congress also 

mandated that GAO describe the 

status of DOD’s implementation of 

legislative mandates covering the 

CTR program. 

What GAO Recommends

GAO recommends that the 

Secretary of Defense conduct 

performance reviews of CTR 

projects upon their completion. 

Such reviews would provide a 

mechanism to document lessons 

learned and apply them to future 

project planning and 

implementation. DOD concurred 

with our recommendation. 
Page i GAO-05-329 Cooperative Threat Reduction

Contents

Letter 1

Results in Brief 3

Background 6

DOD Has Improved Its Management and Internal Controls over the 

CTR Program 8

Conclusion 23

Recommendation for Executive Action 24

Agency Comments and Our Evaluation 24

Appendixes

Appendix I: Two Project Failures Cost the CTR Program Nearly $200 

Million 25

Appendix II: Legislative Mandates Covering the CTR Program 28

Appendix III: Scope and Methodology 37

Appendix IV: Current CTR Program Areas 39

Appendix V: DOD’s Current Management and Internal Controls for the 

CTR Program Compared with Internal Control Standards 42

Appendix VI: Comments from the Department of Defense 46

Appendix VII: GAO Contact and Staff Acknowledgments 47

Table Table 1: Internal Control Standards and Factors Compared with 

DOD Internal Controls 43

Figures Figure 1: DOD Management Structure for the CTR Program 7

Figure 2: Russian SS-24 Missile Engine Undergoing 

Dismantlement 13

Figure 3: CTR Program Legislative Mandates (Fiscal Years 

1992-2004) 31

Figure 4: CTR Program Area Descriptions and Obligations as of 

April 2005 40
Contents

Page ii GAO-05-329 Cooperative Threat Reduction

Abbreviations

AT&L Office of the Under Secretary of Defense for Acquisition, 

Technology, and Logistics

CT Cooperative Threat Reduction Directorate

CTR Cooperative Threat Reduction program

DOD Department of Defense

DTRA Defense Threat Reduction Agency

GAO Government Accountability Office

IG Inspector General

JRIP Joint Requirements and Implementation Plans

MDA Milestone Decision Authority

TRSC Threat Reduction Support Center

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Page 1 GAO-05-329 Cooperative Threat Reduction

United States Government Accountability Office

Washington, D.C. 20548

A

June 30, 2005 Letr

The Honorable John Warner

Chairman

The Honorable Carl Levin

Ranking Minority Member

Committee on Armed Services

United States Senate

The Honorable Duncan Hunter

Chairman

The Honorable Ike Skelton

Ranking Minority Member

Committee on Armed Services

House of Representatives

Since 1992, Congress has authorized the Department of Defense (DOD) to 

provide more than $5 billion for the Cooperative Threat Reduction (CTR) 

program to help the former states of the Soviet Union1

 secure and eliminate 

their weapons of mass destruction and prevent their proliferation. Through 

the CTR program, the United States has supported activities such as 

eliminating nuclear missiles, building storage facilities for nuclear 

materials, eliminating chemical weapons, securing biological pathogens, 

and employing former weapons scientists. Recent project failures in 

Russia, however, have raised congressional concerns about the program’s 

management. Specifically, from 1993 through 2003, DOD spent nearly $200 

million to construct a liquid rocket fuel disposition facility that was never 

used and to design a solid rocket motor elimination facility that was never 

constructed. In 2003, as a result of these incidents, DOD began to revise its 

management and internal controls over the CTR program. (For more 

detailed information on these CTR project failures, see app. I.)

The Deputy Assistant to the Secretary of Defense for Chemical 

Demilitarization and Threat Reduction within the Office of the Under

1

CTR recipient states of the former Soviet Union include Russia, Ukraine, Belarus, 

Kazakhstan, Uzbekistan, Azerbaijan, Moldova, and Georgia.
Page 2 GAO-05-329 Cooperative Threat Reduction

Secretary of Defense for Acquisition, Technology, and Logistics (AT&L)2 is 

responsible for developing CTR implementation plans and making sure that 

CTR contractual obligations are met. Concurrently, the CTR Policy Office, 

within the Office of the Under Secretary of Defense for Policy, is 

responsible for developing and coordinating CTR policy guidance and 

defining CTR program objectives. The Defense Threat Reduction Agency 

(DTRA) reports to the Deputy Assistant to the Secretary of Defense for 

Chemical Demilitarization and Threat Reduction and oversees the 

execution of CTR projects on a daily basis. 

Section 3611 of the National Defense Authorization Act for Fiscal Year 2004 

mandates that GAO assess DOD internal controls for the CTR program and 

their effect on the program’s execution.3

 The mandate specifies that our 

analysis focus on controls intended to ensure that projects are being 

executed consistent with the program’s objectives. In addressing the 

mandate, we evaluated DOD’s management and internal controls for 

implementing CTR projects since 2003 by using the applicable control 

standards for the federal government.4

 To respond to the mandate, we 

identified those management and internal control areas most relevant to 

CTR project implementation: (1) program management, (2) risk 

assessments, (3) performance measurement, (4) program reviews,

(5) communications, and (6) project monitoring. Congress also mandated 

that we describe the status of DOD’s implementation of legislative 

mandates covering the CTR program. (See app. II for information on CTR 

legislative mandates.) 

In reviewing DOD’s management and internal controls for implementing 

the CTR program, we collected and analyzed DOD documents and 

developed a semi-structured interview guide and questioned 30 DOD 

2

For the purposes of this report, we are using the acronym AT&L to refer to the office of the 

Deputy Assistant to the Secretary of Defense for Chemical Demilitarization and Threat 

Reduction within the Office of the Under Secretary of Defense for Acquisition, Technology, 

and Logistics. 

3

Public Law 108-136 also requires GAO to assess the management and coordination 

activities of the threat reduction and nonproliferation programs of the Departments of 

Defense and Energy. See GAO, Weapons of Mass Destruction: Nonproliferation Programs 

Need Better Integration, GAO-05-157 (Washington, D.C.: Jan. 28, 2005). GAO is also 

assessing the Department of Energy’s management of its nonproliferation programs. 

4

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: Nov. 1999); and Internal Control Management and Evaluation Tool, 

GAO-01-1008G (Washington, D.C.: Aug. 2001).
Page 3 GAO-05-329 Cooperative Threat Reduction

officials responsible for managing and implementing the CTR program. We 

met with other DOD officials, reviewed DOD documents including DOD 

acquisition management guidance, and analyzed legislation. In addition, we 

traveled to Russia and Kazakhstan to observe CTR project implementation 

and to obtain information from American, Russian, and Kazakhstani 

government officials and contractor personnel. To determine the reliability 

of the data we used in this report, we reviewed relevant agency documents 

and obtained information from agency officials to ensure that the data used 

are sufficiently reliable for our work. We performed our work from April 

2004 through May 2005 in accordance with generally accepted government 

auditing standards. (See app. III for more details on our scope and 

methodology.) 

Results in Brief Since 2003, DOD has improved its management and internal controls over 

the CTR program. Previously, DOD had problems managing the CTR 

program and ensuring that CTR program objectives were being met. 

Following two project failures in Russia, DOD implemented a series of new 

measures in 2003 that provided a more structured approach to managing 

the CTR program. DOD’s goal is to mitigate risks to an appropriate level. 

Despite the introduction of new and revised management approaches and 

controls, DOD cannot fully mitigate the risks involved in cooperating with 

CTR recipient governments. In addition, DOD’s current procedures and 

controls do not include final reviews of CTR projects upon their 

completion. Therefore, DOD has no systematic or formal mechanism to 

document and apply the lessons learned from such evaluations to new and 

ongoing projects. 

To improve management of the CTR program, DOD has addressed five key 

areas.

• Program management. DOD’s original management plan for the CTR 

program called for AT&L to oversee planning, issue written guidance on 

how projects should be implemented, and develop processes to ensure 

that projects were meeting objectives. However, DOD did not have 

officials in key positions in this office from 1998 through 2003. CTR 

policy and DTRA officials attempted to fill this void but lacked expertise 

and training in acquisition and project management. In July 2003, 

following the heptyl and Votkinsk project failures, DOD filled these 

vacancies within AT&L. AT&L officials now actively participate in 

program risk assessments, performance measurement, ongoing 
Page 4 GAO-05-329 Cooperative Threat Reduction

program reviews, and regular communication regarding details on 

project status. 

• Risk assessments. DOD uses several new methods to assess and 

mitigate the risks associated with CTR projects. DOD designates one 

official with overall management responsibility to balance the 

requirements of each project with potential risks. DOD divides CTR 

projects into three phases and requires management approval that the 

project is on track to meet its objectives before the project enters its 

next phase and additional funds are obligated. DOD also instituted 

periodic meetings with stakeholders5

 to evaluate and minimize risk 

associated with CTR projects. With these new methods in place, all 

stakeholders are now cognizant of CTR project risks and managers are 

required to develop concrete strategies for addressing identified risks. 

• Performance measurement. DOD devised and implemented new 

written guidelines on developing and reporting CTR project objectives, 

schedules, and cost estimates. In a new training course required for all 

CTR program and project managers, managers are instructed on 

developing measures for how, when, in what sequence, and at what cost, 

specific project tasks will be completed. According to CTR project 

managers, the current guidance on performance measurement is clearer 

and more consistent than in the past and helps with the review of 

ongoing projects. 

• Ongoing program reviews. DOD introduced a new process to more 

systematically and consistently review CTR projects. In quarterly and 

other meetings, a designated manager, in consultation with all 

stakeholders, oversees the project’s performance measures including 

cost, schedule, and performance objectives, and determines whether the 

project proceeds to its next phase or whether corrective actions need to 

be taken. According to CTR managers, the new program review system 

has resulted in more consistently conducted program evaluations that 

provide management with significant project details not previously 

included in program reviews. 

5

Stakeholders include all CTR management, acquisition, and policy decision makers as well 

as other government agency officials who are involved with implementing a particular CTR 

project.
Page 5 GAO-05-329 Cooperative Threat Reduction

• Communication. Communication among the DOD offices involved in 

the CTR program is more structured. All stakeholders communicate 

project issues and problems through daily email, weekly reports, and 

quarterly meetings. Through ongoing program reviews and new 

reporting requirements stakeholders and managers now have regular 

opportunities to learn about project developments and provide input on 

project implementation. DOD has also improved its external 

communications with CTR-recipient countries by more clearly defining 

the responsibilities and expectations of all parties, including the 

recipient countries involved in each project. These controls provide 

assurance that each party is held accountable for its responsibilities. 

Despite the introduction of new and revised internal controls, DOD 

continues to face the challenge of gaining the cooperation of CTR-recipient 

governments to jointly implement projects and ensure that assistance is 

used to meet program objectives. Successful projects require signed 

agreements between DOD and CTR recipient countries, as well as U.S. 

access to sites to ensure that program goals are being achieved. However, 

reaching agreement on project issues and obtaining necessary access can 

involve lengthy negotiations. For example, after more than 10 years of 

discussion, Russia and DOD have yet to negotiate an agreement that would 

allow U.S. personnel access to monitor the loading of the CTR-funded 

fissile material storage facility at Mayak. Such an agreement would assure 

DOD that the facility is being used as intended. 

DOD also lacks internal controls that would provide a system for 

monitoring projects upon their completion and applying lessons learned to 

future projects. According to internal control standards, monitoring 

includes assessing both ongoing activities and separate evaluations of 

completed activities and should assess the quality of performance over 

time. By conducting final reviews of completed CTR projects and 

addressing the findings of such reviews, DOD can further improve its 

current and future management of the program. 

To further improve DOD internal controls for the CTR program, we are 

recommending that the Secretary of Defense conduct final reviews of CTR 

projects at their completion to evaluate whether projects were conducted 

in an efficient manner or were effectively meeting the objectives of the 

program. Such reviews would provide a mechanism for documenting 

lessons learned and applying them to future project planning and 

implementation. 
Page 6 GAO-05-329 Cooperative Threat Reduction

DOD concurred with our recommendation to conduct evaluations of CTR 

projects upon their completion. DOD also provided technical comments 

that we incorporated as appropriate.

Background Congress created the CTR program in 1991 to help the states of the former 

Soviet Union secure and eliminate their weapons of mass destruction and 

prevent their proliferation. Through the CTR program, the United States 

has supported activities to eliminate nuclear missiles, build a storage 

facility for nuclear materials, eliminate chemical weapons, secure 

biological pathogens, and employ former weapons scientists. As of January 

2005, the CTR program has assisted in the elimination of about 570 

intercontinental ballistic missiles and nearly 30 nuclear powered ballistic 

missile submarines. In 2004, Congress authorized DOD to expand the scope 

of the CTR program to countries outside the former Soviet Union. For 

example, beginning in 2005, CTR assistance will help Albania destroy its 

chemical weapons stockpile.

Figure 1 shows the DOD management structure for the CTR program. 

Within the Office of the Under Secretary of Defense for Policy, the CTR 

Policy Office is responsible for developing and coordinating policy 

guidance, defining program objectives for the CTR program, and 

negotiating agreements with CTR recipients. The CTR Policy Office works 

with the office of the Under Secretary of Defense for Acquisition, 

Technology, and Logistics through the Deputy Assistant to the Secretary of 

Defense for Chemical Demilitarization and Threat Reduction. DTRA 

reports to the Assistant to the Secretary of Defense for Nuclear and 

Chemical and Biological Defense Programs. The Deputy Assistant to the 

Secretary of Defense for Chemical Demilitarization and Threat Reduction 

provides strategic implementation guidance on and oversight of CTR 

projects, and interacts daily with DTRA on CTR matters. Within DTRA, the 

Cooperative Threat Reduction (CT) directorate manages the program’s 

daily operations. The directorate is organized into five program areas: 

Biological Weapons Proliferation Prevention, Chemical Weapons 

Elimination, Nuclear Weapons Safety and Security, Strategic Offensive 

Arms Elimination, and Weapons of Mass Destruction (WMD) Proliferation 

Prevention.6

 (For a more detailed description of these program areas, see 

app. IV.) The directorate is located at Ft. Belvoir, Virginia, and several 

6

The CT directorate also has a program integration component and an executive language 

service to support program implementation.
Page 7 GAO-05-329 Cooperative Threat Reduction

DTRA offices throughout the former Soviet Union provide in-country 

support for CTR program implementation.7

Figure 1: DOD Management Structure for the CTR Program

7

Currently, the CTR program has offices in Moscow, Russia; and Kiev, Ukraine; and has plans 

to establish permanent offices in Tashkent, Uzbekistan; Almaty, Kazakhstan; Baku, 

Azerbaijan; and Tbilisi, Georgia.

Secretary 

of Defense

Under Secretary

of Defense Policy

Under Secretary

of Defense Acquisition,

Technology and Logistics

Assistant Secretary

of Defense International

Security Policy

Assistant to the

Secretary of Defense

Nuclear, Chemical,

Biological Defense

Deputy Assistant to the

Secretary of Defense

Chemical Demilitarization

and Threat Reduction

Defense Threat

Reduction Agency

(DTRA)

Cooperative Threat

Reduction Directorate

Strategic Offensive

Arms Elimination

Biological Weapons

Proliferation Prevention

Nuclear Weapons

Safety and Security

Deputy Under Secretary of

Defense Technology Security

Policy and Counterproliferation

CTR Policy Office

Chemical Weapons

Elimination

WMD Proliferation

Prevention

DTRA Embassy

Operations

Source: DOD.

Formal

Informal
Page 8 GAO-05-329 Cooperative Threat Reduction

At the beginning of the program in 1992, DOD primarily purchased and 

provided equipment such as cranes, cutting tools, and vehicles to recipient 

countries. As the program matured, CTR assistance provided more 

services, such as hiring U.S. contractors who helped recipient countries 

dismantle nuclear delivery systems and missiles. Currently, CTR provides 

most assistance to recipient countries through contracts with American 

firms. DOD executes, manages, and reviews the contracts according to 

DOD and federal acquisition requirements. Specifically, in 2001, the CTR 

program began using special contracts with prime contractors who, with 

their teams of supporting subcontractors, implement the majority of CTR 

projects in the recipient countries. These five contractors are known as 

CTR Integrating Contractors.8

 DTRA has also contracted with the Science 

Applications International Corporation’s Threat Reduction Support Center 

(TRSC). TRSC staff provide support to CTR program and project managers 

in the areas of operations, logistics, engineering, financial, and program 

management. 

DOD Has Improved Its 

Management and 

Internal Controls over 

the CTR Program

Since 2003, DOD has improved its management and internal controls over 

the CTR program. Prior to 2003, DOD’s internal controls over the program 

were limited and did not ensure that CTR program objectives were being 

met. Following two project failures in Russia, DOD implemented a series of 

new measures in 2003 that provided a more structured approach to 

managing the CTR program. Most importantly, in July 2003, DOD filled 

vacancies within AT&L, the office responsible for ensuring that DTRA’s 

implementation of CTR projects was meeting cost, schedule, and 

performance goals. After DOD filled these positions, the new leadership 

worked closely with DTRA officials to introduce important enhancements 

to the program’s internal controls. For example, DOD adopted several new 

methods to assess and mitigate the risks involved in cooperating with CTRrecipient governments. Although these methods attempt to reduce risk to 

an acceptable level, DOD cannot fully mitigate the risks involved in 

working jointly with CTR-recipient governments. While DOD’s 

enhancements are an improvement over the previous management and 

internal controls for the program, CTR procedures do not include final 

reviews of CTR projects upon their completion. As such, DOD has no 

8

The five CTRIC contractors are Parsons Delaware, Inc.; Bechtel National, Inc.; Raytheon 

Technical Services Company; Kellogg, Brown, & Root; and Washington Group International, 

Inc. 
Page 9 GAO-05-329 Cooperative Threat Reduction

mechanism for assessing the success of completed projects and applying 

lessons learned to future projects. 

Improved Program 

Management and Internal 

Controls Allow for 

Improved Implementation 

of CTR Program

Beginning in 2003, DOD implemented several new and enhanced 

management processes to allow program managers to better assess the 

progress of CTR projects and address program implementation 

weaknesses to reduce the risk of program failures. For example, DOD filled 

vacant AT&L positions; developed specific guidance for project managers 

on reporting objectives, schedules, and cost estimates; and improved 

communication within the program and with recipient countries. (For a 

comparison of DOD’s CTR internal controls with selected control 

standards for the federal government, see app. V.) DOD developed a 

training course that all CTR project and program managers are required to 

complete, which provides detailed instruction on incorporating the new 

requirements of the internal control framework into all CTR projects. 

According to 24 of the 30 CTR program, policy, and acquisition officials 

responding to our structured interview, the new framework has helped 

improve CTR project implementation. For example, CTR officials stated 

that now the program management review system is more rigorous and 

project managers know what is expected of them in reporting on the cost, 

schedule, and performance of their projects. 

Key Leadership and Oversight 

Vacancies Filled for CTR 

Program

In July 2003, DOD filled AT&L vacancies, closing a critical gap in the 

department’s ability to ensure that the CTR program was meeting cost, 

schedule, and performance goals. Previously, DOD had not been carrying 

out its own management plans for ensuring that CTR projects were meeting 

stated goals. Specifically, in May 1994, the Deputy Secretary of Defense 

approved a plan to strengthen the implementation of CTR projects. Under 

this plan, the CTR policy office was responsible for negotiating agreements 

with recipient countries, establishing policy guidance, working on the CTR 

budget, and notifying Congress of developments in the program. After CTR 

policy approved a project and signed an agreement to begin work, AT&L 

was responsible for developing detailed implementation plans, monitoring 

ongoing work, and ensuring that work was meeting cost, schedule, and 

performance goals. However, DOD left several AT&L positions vacant until 

2003, leaving a critical gap in oversight over the CTR program. The CTR 

policy office began managing daily CTR project activities to fill this 

leadership gap. However, according to the director of the policy office, staff 

in that office were not qualified to manage the activities of the program 

because they were not familiar with DOD acquisition guidelines nor did 

they have the technical expertise necessary to manage CTR programs. 
Page 10 GAO-05-329 Cooperative Threat Reduction

According to a 2004 DOD Inspector General (IG) report on the 

management of the CTR program, if the AT&L positions had been filled, 

those officials might have identified some of the risks involved in the two 

failed CTR projects that cost DOD nearly $200 million. 

Since the AT&L positions were filled in July 2003, the office now 

participates in CTR program planning and review, overseeing program 

review meetings, and providing guidance on issues such as performance 

measurement and reporting requirements. The Deputy Assistant Secretary 

of Defense for Chemical Demilitarization and Threat Reduction attends 

informal monthly meetings with CTR program managers to be updated on 

the status of projects and other management issues. He also serves as the 

program reviewer for several CTR projects, making him responsible for 

overseeing the cost, schedule, and performance of each of those projects 

and approving them at the end of each project phase. For example, in July 

2004, he approved a biological weapons proliferation prevention project’s 

acquisition program baseline and authorized the program manager to move 

the project into the demonstration phase. CTR officials stated that it is now 

clear who they need to report to and when.

DOD Uses Several New Methods 

to Assess CTR Project Risk 

DOD uses several new methods to assess and mitigate risks associated 

with CTR projects. DOD identifies a senior official responsible for ensuring 

the potential risks to meeting objectives are evaluated for each project, 

requires stakeholders on each project to meet regularly to conduct specific 

risk management activities, and implements each project in three phases. 

According to DOD’s risk management guide, risk is defined as a measure of 

the potential inability of a program to achieve its overall program 

objectives within defined cost, schedule, and technical constraints.9

DOD’s approach to assessing program risks was limited prior to 2003. In 

September 1996, we reported that the CTR multiyear plan did not indicate 

whether program officials had omitted risk and contingencies from project 

cost estimates.10 In addition, a 2003 DOD IG report found that DOD did not 

identify risks or have adequate controls in place to mitigate risk when

9

DOD, Risk Management Guidebook for DOD Acquisition, Fifth Edition, June 2003.

10GAO, Weapons of Mass Destruction, Status of the Cooperative Threat Reduction 

Program, GAO/NSIAD-96-222 (Washington, D.C.: Sept. 27, 1996).
Page 11 GAO-05-329 Cooperative Threat Reduction

managing projects.11 According to a CTR official, CTR program and project 

managers periodically included risk assessments in planning their projects, 

but did not include actions to control the risks identified if problems 

occurred. The DOD IG reported that the CTR program management’s 

failure to fully assess project risks contributed to DOD spending nearly 

$200 million on projects in Russia to construct a liquid rocket fuel 

disposition facility that was never utilized and to design a solid rocket 

motor elimination facility that was never constructed. 

In an effort to improve assessments of the risks associated with CTR 

projects, DOD began designating an official, known as the Milestone 

Decision Authority (MDA), to be responsible for ensuring that project 

managers, with assistance from project stakeholders, assess the risks to 

meeting project objectives and formulate plans to mitigate these risks. 

MDAs are assigned to projects based on several factors, including the 

project’s risk and expected cost. According to an AT&L official, the Deputy 

Assistant to the Secretary of Defense for Chemical Demilitarization and 

Threat Reduction is usually assigned as the MDA for high-cost or high-risk 

projects. For projects with less risk or expense, the MDA is usually the 

director of the DTRA/CT directorate. MDAs review the risks identified by 

the project managers and evaluate the plans they have developed to 

mitigate these risks. 

In addition, DOD instituted periodic stakeholders meetings to assess and 

minimize risks associated with CTR projects and to discuss major project 

issues and milestones. In these meetings, project managers present 

assessments of potential risks that could impact their ability to meet 

project objectives. For example, a risk identified for the Russian SS-24 

missile elimination project was that political or economic developments in 

Russia might unexpectedly affect the project’s costs. After the project 

managers present their assessments, the stakeholders provide input to 

address these risks and consider additional problems that may arise during 

project implementation. According to CTR management officials, this team 

approach to risk assessment ensures consensus early in each phase of the 

project. It has resulted in more informed decision making because 

stakeholders meet regularly to receive updates on project status and make 

decisions on the next phase of project implementation based on the facts 

presented during those meetings. Of the 30 DOD and CTR officials we 

11DOD, Office of the Inspector General, Cooperative Threat Reduction: Solid Rocket Motor 

Disposition Facility (D-2003-131), Sept. 11, 2003.
Page 12 GAO-05-329 Cooperative Threat Reduction

interviewed using our structured interview guide, 9 said that this new 

process of stakeholder involvement was one of the most important new 

internal controls for the CTR program.12

Furthermore, DOD now uses a new phased-contract approach that divides 

each CTR project into three phases. These phases can vary according to 

project, but usually include phases covering project development, project 

execution, and project maintenance, according to a CTR official. This 

approach helps to minimize risk by allowing managers to make the 

appropriate changes, delay, or stop a project if a problem occurs. For 

example, in 2003, in the development phase of a Ukrainian SS-24 missile 

elimination project, DOD decided not to proceed with the project because 

the risks associated with the missile destruction method that the 

Ukrainians wanted to use were too high. Project managers are required to 

develop exit criteria for each project phase that clearly state under what 

conditions the project will be permitted to move into the next phase and 

under what conditions DOD will stop the project. For example, for a CTR 

project tasked with eliminating Russia’s SS-25 missiles, one of the exit 

criteria for moving into the project’s maintenance phase is that DOD 

complete negotiations on the contract to maintain the missile elimination 

facility that is being constructed.

DOD Has New Guidelines for 

Reporting Project Performance

In 2003, DOD devised and implemented new guidelines that provide CTR 

project managers with written instructions on developing and reporting 

project objectives, schedules, and cost estimates. According to the internal 

control guidelines for the federal government, it is important for an 

organization to establish measures to gauge its performance on critical 

activities and determine if the organization is meeting its objectives. CTR 

program area and project managers we interviewed stated that prior to 

2003 there were no established procedures for developing performance 

measures, evaluating project performance, or reporting (either orally or in 

writing) on project implementation to management. In addition, project 

12Using our structured interview guide, we asked DOD officials what they believed the most 

important new internal controls for the CTR program are. This was an open-ended question 

and each official could provide multiple answers. We obtained the following responses from 

the 30 officials we interviewed as to which new internal controls are the most important: 19 

said the MDA review process, 9 said periodic meetings with stakeholders, 9 said the 

involvement of the AT&L office in the program, 8 said new reporting requirements, 7 said 

the new methods for communicating with and documenting the responsibilities of recipient 

government officials, and 7 said the program’s new focus on the acquisition process.
Page 13 GAO-05-329 Cooperative Threat Reduction

plans were not comprehensive and lacked established baselines against 

which to measure performance. 

According to CTR project managers, the current guidance on performance 

measurement is clearer and more consistent than in the past. For example, 

in a training course required for all CTR program and project managers, 

project managers are instructed on developing measures for how, when, in 

what sequence, and at what cost specific project tasks will be completed. 

Our fieldwork included a site visit to a CTR project in Russia that had 

developed such measures. One measure used to gauge performance on that 

project is whether the elimination of Russian SS-24 missiles complies with 

arms control treaty requirements. For each measure, project managers 

develop objectives – the indicator’s desired outcome – and thresholds – the 

minimum acceptable performance for that measure. For example, one 

objective for the SS-24 missile elimination project is to eliminate Russia’s 

SS-24 missiles by March 2008. However, if the missiles cannot be eliminated 

by then, they must be eliminated by the threshold date of August 2008. 

(Figure 2 shows the elimination of an SS-24 engine.)

Figure 2: Russian SS-24 Missile Engine Undergoing Dismantlement

Source: DOD.
Page 14 GAO-05-329 Cooperative Threat Reduction

If the threshold is not met at the end of a particular project phase, the 

project manager and DOD management officials may consider stopping the 

project. When an indicator is in danger of not being met, the project 

manager is required to submit a warning report to the project’s MDA to 

ensure that management is aware of potential delays and that the project 

manager is addressing the problem. If the indicator is not met, DOD 

management officials may stop the project until a plan is in place to bring 

the indicator up to the threshold level. 

DOD Has More Systematic and 

Consistent Tools to Review 

Programs

In 2003, DOD introduced a new process to review projects and programs to 

provide a more systematic and consistent structure to management’s 

review of CTR projects. According to the internal control guidelines for the 

federal government, program reviews are important for program 

management because they provide comparisons of actual performance to 

planned or expected results and help management assess its programs. 

Program reviews lacked the detail that allowed senior management to 

evaluate projects and risks consistently. However, according to CTR 

program managers we interviewed, before 2003 there was no standardized 

guidance to assist program managers on developing program reviews or 

implementing their programs. For example, CTR program area and project 

managers did not receive any guidance on how to report on the daily 

management of program operations or on the type of information that 

status reports should include. 

Under the new program review system, the designated MDA conducts 

reviews of a project’s cost, schedule, and performance objectives. During 

program reviews, which take place periodically throughout the course of a 

project, project managers report to their MDAs on the status of their 

projects and whether the objectives are being met. In addition, these 

review meetings are more detailed than they were before the new system 

was in place. For example, a project review in 2004 for a CTR project 

tasked with installing nuclear detection devices in Uzbekistan included 

details on the project’s schedule over the next 3 years, with specific dates 

for completion of certain milestones. It also included a detailed breakdown 

of funding for the project over the next 3 years and a thorough discussion 

of project risks. The information was not included in the project’s 2003 

review. According to several CTR project managers, the new program 

review system has resulted in more consistently conducted project 

evaluations. Of the 30 DOD officials we interviewed, 19 said the program 

review process, conducted by the MDA, was one of the most important new
Page 15 GAO-05-329 Cooperative Threat Reduction

internal controls for the CTR program.13 They reported that, with the 

introduction of the MDA, program reviews are occurring at the same 

intervals for each project and that project managers report cost, schedule, 

and performance data in the same format to their MDAs during the reviews. 

Through the course of work we reviewed copies of various MDA project 

review documents.

Communication Is More 

Structured

According to DOD officials, communication within the CT directorate and 

among the DOD offices involved in the CTR program, has improved with 

the introduction of new internal controls. DOD also has improved its 

external communications with CTR-recipient countries. Internal control 

guidelines for the federal government state that communication 

mechanisms should exist within an organization to allow the easy flow of 

information down, across, and up the organization. However, before 2003, 

internal communications within the CTR program office were not clear, 

according to DOD officials. For example, all CTR stakeholders were not 

present during project development meetings nor were they involved in 

early decision making about project risks. Communications between DOD 

and CTR recipient governments also were not clear. DOD assumed, without 

getting written documentation that CTR recipient countries would carry 

out the responsibilities and commitments to which they agreed.

Since 2003, communication among the DOD offices working on the CTR 

program has improved. Stakeholders on specific projects meet more 

frequently now than in the past to discuss project issues and problems. 

Project managers involve stakeholders in the earliest stages of project 

development on through to the final phase of project completion to assure 

that stakeholders and managers have regular opportunities to learn about 

project developments and provide input on project implementation. This 

system has now been institutionalized and all CTR project managers are 

instructed in a new training course to convene meetings with stakeholders 

throughout the life of their projects. In addition, new reporting 

requirements help ensure that all stakeholders are informed of project 

developments. All of the 30 DOD officials we interviewed said that they are 

required to report on the cost, schedule, and performance of their 

programs and projects periodically, including daily, weekly, monthly, and 

quarterly. For example, DOD now requires program managers to submit 

monthly project status reports to ensure that potential problems are 

documented and stakeholders are informed of them. In addition, 28 of the 

13See footnote 12 for a full list of responses.
Page 16 GAO-05-329 Cooperative Threat Reduction

30 DOD officials in our structured interview reported that the amount of 

communication within the CT directorate allows them to effectively 

implement their projects. Project managers are in frequent contact with 

contractors implementing projects in recipient countries. We observed a 

meeting in Russia between a CTR project manager and the Russian 

contractors implementing the project he manages. During the meeting, they 

negotiated revisions to a new contract and discussed the project’s status. 

The project manager makes similar trips at least once a month to the 

project site to oversee progress and meet with the contractors. Other 

project managers we interviewed in Russia and in the U.S. stated that they 

hold weekly phone conferences with contractors, exchange emails, and 

make regular visits to project sites. 

Contracting officials in Russia stated that they hold weekly telephone 

conferences with their CTR project managers and contact them regularly 

when project implementation issues arise. We observed such a weekly 

telephone communication during our visit to the International Science and 

Technology Center in Moscow. Contractors also submit monthly written 

reports. Project managers also are in daily contact with their program 

managers and CT directorate management. According to a CTR official, at 

quarterly program review meetings, program and project managers present 

detailed information, both orally and in writing, on the status of their 

projects to all involved stakeholders. 

DOD has also improved its external communications with CTR-recipient 

countries. DOD and recipient government officials now consistently share 

more detailed information on project developments and issues of concern. 

CTR management officials and program and project managers are in 

frequent contact with their recipient government counterparts throughout 

project implementation. In 2004 CTR teams made 165 trips, compared with 

70 trips in fiscal year 2001, to meet recipient government officials and 

improve their monitoring of CTR projects. Russian government officials 

working on CTR projects stated that they communicate with CTR officials 

continually and meet regularly with the director of the CT directorate. They 

also hold weekly teleconferences with project managers, and project 

managers visit project sites regularly. While traveling with CTR project 

managers in Russia and Kazakhstan, we observed extensive discussions of 

important issues during site visits and meetings with contractors and 

recipient government officials. 

Furthermore, DOD has introduced and updated its controls to ensure that 

commitments made by the CTR program and recipient governments are 
Page 17 GAO-05-329 Cooperative Threat Reduction

regularly documented and discussed. These controls also are a means to 

ensure that each party is held accountable for its responsibilities. In 2003, 

DOD began using Joint Requirements and Implementation Plans (JRIP) to 

document the commitments and responsibilities agreed to by each party 

involved in project implementation. For example, a requirements plan for a 

CTR project tasked with eliminating a specific type of Russian nuclear 

missile states that one of DOD’s responsibilities in implementing the 

project is to design and construct storage facilities for the missiles to be 

eliminated. One of the Russian government’s responsibilities on the same 

project is to provide DOD with a schedule for the delivery of the missiles to 

the proper facility for elimination. If either party fails to meet its 

obligations as articulated in the document, the other party can stop 

progress on the project. For example, DOD officials halted new 

construction from March to June 2004 at the CTR-funded chemical 

weapons destruction facility at Shchuch’ye until the Russian government 

stopped insisting on unnecessary design changes for the construction of a 

boiler house on the site. To further enhance communication between CTR 

program officials and CTR recipient countries, DOD also holds biannual 

meetings where officials from both sides meet to review and discuss 

project implementation and revise plans when necessary. According to 

CTR management officials and JRIP documents we reviewed, these 

meetings provide a regular forum for discussion that was not previously 

available and have improved communication between DOD officials and 

CTR-recipient governments.

Inherent Risks Remain in 

Working with Recipient 

Governments

DOD faces significant challenges in collaborating with CTR-recipient 

governments to jointly implement projects and ensure that assistance is 

used to meet program objectives. Successful implementation of CTR 

projects requires the cooperation of recipient governments, but DOD 

cannot fully mitigate the risks involved in working jointly with these 

governments. First, working with CTR-recipient governments often 

involves lengthy negotiations to reach agreements on various issues 

throughout a project’s implementation. This can delay U.S. funded efforts 

to help secure or dismantle weapons of mass destruction by months or 

years. Second, risks to the project can increase when implementation 

begins before the necessary agreements are in place. Third, after 

agreements are reached and implementation is under way, additional risk is
Page 18 GAO-05-329 Cooperative Threat Reduction

introduced by the control environment14 within the recipient governments. 

For instance, if a recipient government has a poor control environment risk 

increases that the agreed to objectives and conditions will not be met. 

In cooperating with CTR-recipient governments, DOD must negotiate a 

variety of agreements that can require lengthy negotiations. The highest 

level of agreements, called umbrella agreements, provide an overall legal 

framework for U.S. and CTR-recipient countries’ cooperation in 

implementing projects.15 Implementing agreements outline the types and 

amounts of assistance to be provided for specific CTR projects. For 

instance, projects to eliminate strategic nuclear arms, including strategic 

bombers, missiles, and related equipment are conducted under the 

Strategic Nuclear Arms Elimination Implementing Agreement signed by 

DOD and the Ukrainian Ministry of Defense in December 1993.16

Agreement amendments update the annual amount of funding that CTR 

will provide for a specific project within a recipient country. For example, 

the December 2004 agreement amendment for biological weapons 

proliferation projects with the government of Kazakhstan provides for 

$30 million in CTR funding during fiscal years 2004 and 2005. The recipient 

governments must sign agreements or agreement amendments before 

projects can begin and funding can be provided or increased, but this may 

take time and delay projects, according to CTR officials. According to a 

CTR program area manager, the Russian government took more than 18 

months to sign an implementing agreement for nuclear weapons 

transportation and security projects because it did not want to reveal the 

location of nuclear weapons storage sites that the government planned to 

close. In 2004, the government of Kazakhstan took more than 6 months to 

sign the annual agreement amendment for biological weapons proliferation 

projects. According to CTR contractors and officials at Kazakhstani 

14The governments maintain and establish an environment throughout their bureaucracies 

that sets a positive and supportive attitude toward internal control and management. It 

provides discipline and structure as well as the climate, which influences the quality of 

internal control.

15Umbrella agreements contain a comprehensive set of rights, exemptions, and protections 

for U.S. personnel and CTR program activities. Currently, DOD has umbrella agreements 

with the governments of Albania, Azerbaijan, Georgia, Kazakhstan, Moldova, Russia, 

Ukraine, and Uzbekistan.

16Agreement Between the Department of Defense of the United States of America and the 

Ministry of Defense of Ukraine Concerning the Provision of Material, Services, and 

Related Training to Ukraine in Connection with the Elimination of Strategic Nuclear 

Arms, dated December 5, 1993, and as amended.
Page 19 GAO-05-329 Cooperative Threat Reduction

biological research facilities, the government’s delay slowed efforts to 

improve the security and safety of biological pathogens at their institutes. 

For CTR biological weapons proliferation prevention projects in Russia, 

however, DOD has no implementing agreement. These projects are 

implemented through the International Science and Technology Center in 

Moscow.17 Until it can conclude a biological threat reduction implementing 

agreement with the Russian government, DOD has limited the types of 

projects it initiates in Russia.

Risks to CTR projects can increase when DOD begins implementation 

before the necessary agreements are in place with CTR recipient 

governments. After more than 10 years, Russia and DOD have yet to 

negotiate a transparency agreement that would allow U.S. personnel access 

to the CTR-funded fissile material storage facility at Mayak to ensure that it 

is being used as intended. DOD designed and built the facility to provide 

centralized, safe, secure, and ecologically sound storage for weapons-grade 

fissile material from dismantled Russian nuclear warheads. In December 

2003, DOD completed the CTR-funded Mayak facility at a cost of about 

$335 million,18 and the Russian government assumed full responsibility for 

its operation and maintenance. Although the Russian government has 

pledged its commitment to transparency, it has not signed an agreement 

with DOD. Therefore, the United States has no reasonable assurance that 

Russia will only use the facility to store materials from dismantled nuclear 

weapons and not reuse the materials. According to CTR program officials, 

the Russian government may soon begin storing nuclear materials at the 

Mayak facility without an agreement in place. We first raised concerns 

about the lack of a transparency agreement for the Mayak facility in 1994.19

Later, in April 1999, we voiced concerns that the United States still lacked

17The International Science and Technology Center was established by the United States, the 

European Union, Russia, and Japan in November 1992 to provide peaceful research 

opportunities to former Soviet weapons scientists and redirect their skills away from 

producing weapons of mass destruction.

18As of April 2005, DOD had spent $14.9 million on the design of the facility and $319.6 on the 

facility’s construction. The amount does not include $69.3 million spent on fissile material 

containers for the facility. 

19GAO, Weapons of Mass Destruction: Reducing the Threat From the Former Soviet Union, 

GAO/NSIAD-95-7 (Washington, D.C.: Oct. 6, 1994).
Page 20 GAO-05-329 Cooperative Threat Reduction

clear assurances that Russia would use the Mayak facility in a manner 

consistent with all U.S. national security objectives for the project.20

Furthermore, two CTR project failures in Russia illustrate the 

consequences of DOD not having the necessary agreements in place (see 

app. I for additional information). In the early 1990s, DOD agreed to assist 

Russia in constructing a facility to dispose of liquid missile propellant, 

known as heptyl, which had been drained from intercontinental and 

submarine-launched ballistic missiles. DOD spent nearly $95 million over 

10 years to build a facility to destroy the heptyl, only to learn in January 

2002 that Russia had diverted the heptyl to its commercial space program, 

rather than storing it for eventual destruction. As a result, the facility was 

never used. The DOD IG reported in 2002 that CTR program officials 

negotiated a weak implementing agreement with the Russian government. 

Specifically, the agreement did not require the Russian government to 

provide the heptyl or provide access for CTR program officials to inspect 

the heptyl storage facilities and verify the quantities present.21

Similarly, DOD had agreed in the early 1990s to build a facility in Russia to 

dispose of solid rocket motors from dismantled missiles. DOD spent almost 

$100 million over nearly 10 years to design the facility, despite the concerns 

of local residents about the possible environmental impact. In January 

2003, Russian officials notified DOD that the regional government had 

denied the land allocation permit necessary to begin construction due to 

the opposition from local residents. As a result, DOD never began 

construction on the facility. The DOD IG found that the implementing 

agreement for the design of the solid rocket motor elimination facility at 

Votkinsk failed to specify Russian responsibilities for the project. Primarily, 

the Russian government was to obtain the necessary land allocation 

permits. CTR officials accepted in good faith that Russia would help 

implement program objectives and therefore assumed that they did not 

need to document the Russian government’s responsibilities. In addition, 

despite local protests against construction of the facility from the

20GAO, Weapons of Mass Destruction: Effort to Reduce Russian Arsenals May Cost More, 

Achieve Less Than Planned, GAO/NSIAD-99-76 (Washington, D.C: Apr. 13, 1999.)

21DOD Office of the Inspector General, Cooperative Threat Reduction: Cooperative Threat 

Reduction Program Liquid Propellant Disposition Project, D-2002-154 (Washington, D.C.: 

Sept. 2002).
Page 21 GAO-05-329 Cooperative Threat Reduction

beginning of the project, DOD project managers did not identify land 

allocation as a potential risk until April 2002.22

Even after DOD concludes appropriate agreements, however, risks still 

may exist due to the control environment of the recipient governments. For 

instance, if a recipient government has a poor control environment risk 

increases that the agreed to objectives and conditions will not be met. A 

good control environment requires that an organization’s structure clearly 

defines key areas of authority and responsibility. When the Russian 

government reorganized in early 2004, it was uncertain which agencies and 

officials were in charge of working with DOD. While the names of some of 

the agencies had merely changed, other agencies were subsumed into 

larger organizations or completely dissolved. According to CTR program 

officials, the reorganization had a significant impact on program 

implementation. For example, the CTR Policy Office is renegotiating its 

implementing agreements to reflect the new Russian government entities. 

CTR projects also experienced delays when the Russian government 

reorganized the committee that granted tax exemptions and resolved 

customs issues for all CTR assistance entering Russia. Work on the CTRfunded chemical weapons destruction facility in Russia was delayed until 

needed equipment was cleared through customs. Furthermore, CTR 

recipient governments may not provide adequate access to project sites or 

may pursue priorities that compete with CTR program objectives. DOD’s 

inability to gain access to all sites where CTR assistance is provided has 

been an issue since the CTR program began in 1992. The U.S. government 

has been concerned with its ability to examine the use of its CTR-provided 

assistance, while CTR-recipient countries have security concerns regarding 

U.S. access to sensitive sites.23 For example, as we reported in March 2003, 

DOD had made only limited progress installing security upgrades at 

Russian nuclear weapons storage sites and former biological weapons 

facilities because Russia would not provide DOD access to several sites.24

Since March 2003, Russia has granted DOD access to some nuclear weapon 

22DOD Office of the Inspector General, Cooperative Threat Reduction: Solid Rocket Motor 

Disposition Facility Project, D-2003-131 (Washington, D.C.: Sept. 2003).

23GAO, Cooperative Threat Reduction: DOD Has Adequate Oversight but Procedural 

Limitations Remain, GAO-01-694 (Washington, D.C.: June 19, 2001).

24GAO, Weapons of Mass Destruction: Additional Russian Cooperation Needed to 

Facilitate U.S. Efforts to Improve Security at Russian Sites, GAO-03-482 (Washington, 

D.C.: Mar. 24, 2003).
Page 22 GAO-05-329 Cooperative Threat Reduction

storage sites, and continues to restrict access to some former biological 

weapons facilities. 

DOD Does Not Have a 

Mechanism to Review CTR 

Projects Once They Are 

Completed

While CTR program officials monitor the progress of ongoing projects, 

DOD has no mechanism to monitor and evaluate the results of completed 

projects in relation to their meeting program objectives. According to 

internal control standards, monitoring should assess the quality of project 

performance over time. Conducting program evaluations, such as 

reviewing completed CTR projects, may be warranted after major changes 

in management plans. DOD does not conduct final evaluations of 

completed CTR projects and currently has no mechanism to document 

lessons learned and apply them to future project planning and 

implementation. At its inception, the CTR program primarily provided 

equipment to recipient countries, but now the vast majority of assistance is 

provided through contracted services. Although the program has shifted to 

funding costly, complex, and sometimes high-risk projects that can last for 

many years, DOD has not expanded the scope of its project monitoring 

process to include evaluations of the efficiency and effectiveness of CTR 

projects upon their completion. 

In June 2001, we recommended that DOD conduct such evaluations to 

improve DOD’s overall program oversight. In response, DOD agreed to 

periodically assess the efficiency and effectiveness of CTR assistance, 

including contracted services. However, DOD lacks a final review process 

to assess the efficiency and effectiveness of completed CTR projects. As of 

June 2005, DOD had completed 77 projects, but program officials did not 

evaluate and record what went well during a project’s implementation and 

what could have been improved to better meet program objectives. While 

CTR officials discuss ongoing individual projects performance through the 

MDA process, senior CTR management officials acknowledged that 

projects are not evaluated upon their completion and such information is 

not shared program wide in a systematic manner. As such, it is difficult to 

apply lessons learned to future CTR projects as they are being planned and 

implemented and avoid past mistakes. Officials stated that conducting final 

evaluations could further improve their management of the CTR 

program,especially as the program expands into countries outside the 

former Soviet Union. Since DOD does not assess the efficiency and 

effectiveness of projects as they are completed, it cannot apply the lessons 

learned from such evaluations to new and ongoing projects in a systematic 

way. 
Page 23 GAO-05-329 Cooperative Threat Reduction

Conclusion Since 1992, CTR assistance has helped the states of the former Soviet 

Union eliminate and protect their weapons of mass destruction. Although 

the CTR program has helped reduce the threat that these weapons could be 

stolen or misused, incidents such as the heptyl disposition and solid rocket 

motor elimination projects demonstrated significant problems with DOD’s 

program management. In the aftermath of these incidents, DOD has 

worked to revamp its CTR program management to achieve greater 

assurance that projects are implemented according to program objectives. 

By standardizing its management approach and applying it consistently 

across all CTR program areas, DOD is improving its management of the 

CTR program. DOD has greater assurance that all stakeholders, including 

recipient governments, are involved in project implementation. CTR 

program and project managers have clearer guidance on how to conduct 

their work and report on it. Furthermore, DOD has made progress in more 

clearly articulating and documenting its cooperative arrangements with 

CTR recipient countries, as well as holding recipient governments more 

accountable for implementing the CTR projects in their respective 

countries. 

These improved controls cannot eliminate the risks inherent in the 

program, but the goal is to mitigate risk to an appropriate level given the 

circumstances. Most significantly, the success of the CTR program requires 

the cooperation of recipient governments. Good internal controls help 

mitigate the risks from having to rely on recipient governments to sign 

agreements, provide access, and support project implementation. Still, 

governments can change their project goals, deny access to U.S. 

contractors and officials, or withhold permits to allow work to proceed. 

DOD’s more robust internal controls have helped minimize the impact of 

these actions, but they cannot guarantee a project’s success. The U.S. 

government remains concerned about its ability to determine how CTRprovided assistance is being used, while CTR recipient countries continue 

to have security concerns regarding U.S. access to their sensitive facilities 

and sites. 

In addition, while DOD has made progress over the past 2 years in 

improving its management of the CTR program, it still does not review the 

overall performance of projects upon their completion. As projects are 

completed, assessing and documenting lessons learned will allow DOD to 

further improve CTR project implementation. As the CTR program 

completes more projects and the program begins to expand beyond the 
Page 24 GAO-05-329 Cooperative Threat Reduction

former Soviet Union, such a mechanism will become more important to 

overall program management. 

Recommendation for 

Executive Action

We recommend that the Secretary of Defense conduct performance 

reviews upon the completion of CTR projects. Such reviews would provide 

a mechanism for documenting lessons learned and applying them to future 

project planning and implementation. 

Agency Comments and 

Our Evaluation

DOD provided comments on a draft of this report, which are reproduced in 

appendix VI. DOD concurred with our recommendation that reviews of 

completed CTR projects should be conducted to document and apply 

lessons learned. DOD also provided technical comments, which we have 

incorporated where appropriate.

We are providing copies of this report to the Secretary of Defense and other 

interested congressional committees. We will also make copies available to 

others upon request. In addition, this report will be available on the GAO 

Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me 

at (202) 512-8979 or christoffj@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made major contributions to this report are 

listed in appendix VII.

Joseph A. Christoff, Director

International Affairs and Trade
Page 25 GAO-05-329 Cooperative Threat Reduction

Appendix I

Two Project Failures Cost the CTR Program Apendxies

Nearly $200 Million ApendxiI

By 2003, two CTR program project failures caused DOD to reassess its 

management of the program. In the early 1990s, DOD agreed to assist 

Russia in constructing a facility to dispose of liquid missile propellant, 

known as heptyl, and build a solid rocket motor disposition facility. 

However, DOD terminated these projects after spending nearly $200 

million over almost a decade. 

In the case of the heptyl disposition facility, DOD spent more than $95 

million over 10 years on the facility at Krasnoyarsk, Russia, that was never 

used. In 1993, the Russian government asked for CTR assistance to dispose 

of heptyl from intercontinental and submarine-launched ballistic missiles 

that were being destroyed in compliance with arms control agreements.1

 At 

the time, Russian government officials claimed that existing heptyl storage 

facilities were full and that they needed a way to dispose of the propellant, 

according to DOD officials. DOD officials also stated that Russian officials 

had told them that the heptyl could not be used for the Russian commercial 

space program. However, when CTR officials were ready to test the almost 

completed facility in January 2002, officials from the Russian Aviation and 

Space Agency revealed that nearly all of the heptyl had been diverted to the 

commercial space program. In February 2003, the Deputy Secretary of 

Defense approved the dismantlement and salvage of the no-longer needed 

heptyl disposition facility. 

According to the DOD IG, a variety of inadequate management controls 

contributed to the heptyl project failure.2

 The IG reported that AT&L was 

not assuming its role in managing the CTR program by providing input and 

direction for projects. Rather, the CTR Policy Office, which had little 

experience in following DOD acquisition guidelines, establishing 

milestones, and identifying risks, was managing daily CTR project 

activities. Because AT&L was not performing adequate oversight of the

1

The Strategic Arms Reduction Treaty (START) I, signed July 31, 1991, by the United States 

and the Soviet Union, limited the number of intercontinental ballistic missiles, submarinelaunched ballistic missiles, and heavy bombers each side could have as well as the number 

of warheads the missiles could carry. START II, signed in 1993 by the United States and the 

Russian Federation, was to eliminate multiple warheads on all intercontinental ballistic 

missiles except for submarine-launched missiles. 

2

DOD Office of the Inspector General, Cooperative Threat Reduction: Cooperative Threat 

Reduction Program Liquid Propellant Disposition Project, D-2002-154 (Washington, D.C.: 

Sept. 2002).
Appendix I

Two Project Failures Cost the CTR Program 

Nearly $200 Million

Page 26 GAO-05-329 Cooperative Threat Reduction

program, CTR program officials negotiated an implementing agreement3

without specific programmatic commitments from the Russian government 

and did not thoroughly identify the risks associated with eliminating the 

heptyl. Specifically, the agreement did not require the Russian government 

to provide the heptyl or provide access for CTR program officials to inspect 

the heptyl storage facilities and verify the quantities present. CTR officials 

accepted in good faith that Russia would provide the heptyl and therefore 

assumed that they did not need to document or oversee the Russian 

government’s responsibilities. In assessing the risks of the heptyl project, 

CTR project officials failed to identify the possibility that the Russian 

government would use the heptyl for other purposes and therefore 

developed no mitigation plan. 

A second project failed in January 2003. After spending almost 10 years to 

design the facility at Votkinsk to destroy solid rocket motors, CTR program 

officials ended the project at a cost of almost $100 million. In the early 

1990s, Russia had requested CTR assistance to destroy motors from 

dismantled missiles in compliance with an arms control agreement. 

Originally, the facility was to be located at Perm, but pending construction 

of the facility generated environmental opposition from local residents. 

The facility was thus moved to Votkinsk in February 1998, where local 

residents concerned with the environmental impact of the facility also 

began protests. Still, CTR program officials continued with the design of 

the facility, remaining optimistic that the regional government would issue 

the required permits regardless of opposition. Officials from the Russian 

Aviation and Space Agency told CTR program officials in July 2002 that 

land for the facility would be allocated no later than September 2002. In a 

January 2003 letter, however, Russian officials notified DOD that the 

regional government had denied the land allocation permit due to the 

opposition from local residents. 

Inadequate management practices also contributed to the failure of the 

solid rocket motor disposition project at Votkinsk. As with the failed heptyl 

project, the DOD IG reported that AT&L did not assume its management 

role in overseeing the CTR program.4

 The CTR Policy Office was managing 

3

Implementing agreements, signed by DOD and the executive agents of CTR recipient 

countries, outline the types and amounts of assistance to be provided for specific projects. 

4

DOD Office of the Inspector General, Cooperative Threat Reduction: Management 

Structure of the Cooperative Threat Reduction Program, D-2004-050 (Washington, D.C.: 

Feb. 2004).
Appendix I

Two Project Failures Cost the CTR Program 

Nearly $200 Million

Page 27 GAO-05-329 Cooperative Threat Reduction

daily CTR project activities. The implementing agreement for the Votkinsk 

project failed to specify Russian responsibilities, such as obtaining the 

necessary land allocation permits. In addition, despite the local 

environmental protests against construction of the facility from the 

beginning, project managers did not identify land allocation as a risk until 

April 2002. Furthermore, the contracting processes that were in place 

contained no mechanism to terminate the project when costs increased 

and the schedule was delayed. DTRA awarded the project contract for the 

complete design and construction of the facility rather than contracting in 

phases so that possible CTR program losses could be minimized. 
Page 28 GAO-05-329 Cooperative Threat Reduction

Appendix II

Legislative Mandates Covering the CTR 

Program ApendxiI

As required by section 3611 of the National Defense Authorization Act for 

Fiscal Year 2004, we reviewed the status of DOD’s implementation of 

legislative mandates covering the CTR program. Since 1992, Congress has 

passed 25 pieces of legislation that guide CTR project activities. 

Specifically, Congress has established a series of (1) requirements that 

must be met before DOD can fund CTR projects, (2) conditions on CTR 

expenditures, and (3) reporting requirements on the CTR program and 

project implementation. Figure 3 illustrates the types of congressional 

legislation covering the CTR program from fiscal year 1992 to 2004 and 

includes those legislative requirements that have lapsed. Over the years, 

DOD has mostly complied with these requirements, except for several 

occasions when it was late in providing required reports to Congress. 

Legislation has recently been proposed that would repeal some DOD 

requirements.

Congress has established a variety of requirements that must be met before 

DOD can fund CTR projects. For example, in establishing the CTR program 

in 1991, Congress required that CTR assistance provided to the countries of 

the former Soviet Union could not be expended until the President certified 

to Congress that the recipient governments were committed to reducing 

their weapons arsenals.1

 According to CTR officials, verifying CTR program 

compliance with legislation can be a time-consuming process and may 

delay the implementation of projects, but they cannot spend CTR funds 

unless all legislative conditions are met. DOD officials involved with 

managing the CTR program recognize that Congress is exercising its 

oversight responsibilities over the CTR program. 

Congress has also placed limits or conditions on how DOD can spend CTR 

money. For instance, in Congress placed conditions on CTR money to 

prohibit spending in certain areas, such as conventional weapons 

destruction2

 and housing for retired or current members of CTR-recipient 

countries’ military forces.3

 Also in 2000, Congress halted CTR funding for

1

Public Law 102-228, Section 211.

2

Public Law 106-65, Section 1303.

3

Public Law 106-79, Section 8078.
Appendix II

Legislative Mandates Covering the CTR 

Program 

Page 29 GAO-05-329 Cooperative Threat Reduction

construction of the Russian chemical weapons destruction facility at 

Shchuch’ye4

 until fiscal year 2004 when it granted a waiver.5

Congress also requires DOD to submit reports on overall program 

implementation, as well as specific projects. Since the beginning of the 

CTR program, DOD has mostly complied with its congressional reporting 

requirements. However, as we previously reported, from 1994 through 1999 

DOD was late in providing its annual report, which accounts for CTR 

assistance.6

 Specifically, DOD was 16 months late in submitting its report 

for 1997 and more than 10 months late in submitting its report for 1998. 

Beginning in fiscal year 2001, the reporting requirement to account for CTR 

assistance became part of the annual CTR report.7

 For fiscal years 2002 

through 2004, DOD provided its annual CTR report to Congress late.8

However, DOD provided its annual report to Congress for fiscal years 2005 

and 2006 mostly on time.

Recently, some members of Congress have introduced bills that may lesson 

the legislative burden on the CTR program. In February 2005, Senator 

Lugar introduced the Nunn-Lugar Cooperative Threat Reduction Act of 

2005.9

 The bill, among other actions, would repeal some of the restrictions 

that Congress had previously placed on the CTR program. If enacted the

4

Public Law 106-65, Section 1305. 

5

Public Law 106-65, Section 1305 and Public Law 108-136, Section 1306.

6

GAO, Cooperative Threat Reduction: DOD’s 1997-1998 Reports on Accounting for 

Assistance Were Late and Incomplete, GAO/NSIAD-00-40 (Washington, D.C.: Mar. 15, 2000). 

GAO, Cooperative Threat Reduction: DOD Has Adequate Oversight of Assistance, but 

Procedural Limitations Remain, GAO-01-694 (Washington, D.C.: June 19, 2001). 

7

Public Law 106-398, Section 1308(a). The annual report describes CTR activities and 

assistance provided during the preceding fiscal year. Subsequent legislation has added 

required information to this report. See Public Law 107-107, Section 1309; Public Law 107-

314, Section 1304. 

8

GAO, Cooperative Threat Reduction Program Annual Report, GAO-03-341R (Washington, 

D.C.: Dec. 2, 2002). GAO, FY 2003 Annual Report on the Cooperative Threat Reduction 

Program, GAO-03-627R (Washington, D.C.: Apr. 8, 2003). GAO, FY 2004 Annual Report on 

the Cooperative Threat Reduction Program, GAO-03-1008R (Washington, D.C.: July 18, 

2003).

9

S. 313. 
Appendix II

Legislative Mandates Covering the CTR 

Program 

Page 30 GAO-05-329 Cooperative Threat Reduction

bill would remove (1) a Presidential certification10 requirement for all CTR 

recipient countries to receive CTR assistance and (2) the funding 

constraints placed on the construction of the CTR-funded chemical 

weapons destruction facility in Russia. In February 2005, members of the 

House of Representative introduced the Omnibus Nonproliferation and 

Anti-nuclear Terrorism Act of 2005.11 This bill also includes a provision for 

the repeal of the same restrictions outlined in the bill introduced by 

Senator Lugar. 

10Public Law 102-228, Section 211, as amended, specifies that the President must state in 

writing that CTR recipient countries are committed to (1) making substantial investment of 

their own resources to dismantle or destroy weapons, (2) forgoing a military modernization 

program that exceeds legitimate defense requirements, (3) forgoing any use of components 

of destroyed nuclear weapons in new weapons, (4) facilitating U.S. verification of weapons 

destruction, (5) complying with all relevant arms control agreements, and (6) observing 

internally recognized human rights. 

11H.R. 665 was introduced by Representatives Schiff, Shays, Butterfield, Chandler, Davis, 

Edwards, Grijalva, Holt, Israel, Maloney, Scott, Sherman, and Watson.
Appendix II

Legislative Mandates Covering the CTR 

Program 

Page 31 GAO-05-329 Cooperative Threat Reduction

Figure 3: CTR Program Legislative Mandates (Fiscal Years 1992-2004)

Soviet Nuclear Threat Reduction Act of 1991

Former Soviet Union Demilitarization Act of 1992

Department of Defense Appropriations Act, 1994

Cooperative Threat Reduction Act of 1993

Department of Defense Appropriations Act, 1995

National Defense Authorization Act for Fiscal Year 1995

Certification requirement related to commitments of CTR recipients to various CTR goals

Requirement that Congress be given 15 days notice prior to the obligation of funds

Quarterly report activities to reduce the Soviet military threat

Certification requirement related to to various CTR goals

Requirement that Congress be given 15 days notice prior to the obligation of funds with

additional notice requirements regarding industrial demilitarization projects

Report requirement concerning activities to reduce the Soviet military threat

Line item earmark

Certification requirement related to to various CTR goals

Limitation on funds authorized for programs to assist in the environmental restoration of

military sites

Requirement that Congress be given 15 days notice prior to the obligation of funds with

additional notice requirements regarding demilitarization or conversion projects

Report requirement concerning activities carried out pursuant to the CTR program

Line item earmark for the study, assessment, and identification of nuclear waste disposal by

the former Soviet Union in the Arctic and North Pacific regions

Report requirement concerning activities carried out pursuant to the CTR program

Report requirement concerning accounting for U.S. assistance

Report requirement concerning control and accountability of material relating to weapons of

mass destruction

Report requirement concerning multiyear planning and allied support for CTR programs

Limitation on the amount of funds authorized to be expended on various CTR programs

Report requirement concerning the offensive biological warfare program of the former Soviet

Union

Coordination requirement

commitments of CTR recipients

commitments of CTR recipients

states

Requirements

Legislation Conditions

Reporting

Lapsed

Pub. L. 102-228

Pub. L. 102-484

Sec. 211 (as amended)

Sec. 231

Sec. 232

Sec. 1412

Sec. 1431

Sec. 1432

Pub. L. 103-139

Pub. L. 103-160

Pub. L. 103-335

Pub. L. 103-337

Sec. 1203

Sec. 1205

Sec. 1206

Sec. 1207

Sec. 1202

Sec. 1203

Sec. 1204

Sec. 1205

Sec. 1206

Sec. 1207

Sec. 1208
Appendix II

Legislative Mandates Covering the CTR 

Program 

Page 32 GAO-05-329 Cooperative Threat Reduction

Requirements

Legislation Conditions

Reporting

Lapsed

National Defense Authorization Act for FiscalYear 1996

Department of Defense Appropriations Act, 1997

National Defense Authorization Act for FiscalYear 1997

Department of Defense Appropriations Act, 1998

National Defense Authorization Act for FiscalYear 1998

Limitation on the amount of funds authorized to be expended on various CTR programs

Prohibition on use of funds for peacekeeping exercises with Russia

Requirement that Congress be given 15 days notice prior to the obligation of funds

Report on accounting for U.S.assistance

Certification requirement regarding assistance to nuclear weapons scientists of the former

Soviet Union

Certification requirement relating to the offensive biological warfare program of Russia

Certification requirement regarding the use of CTR funds for the planning and design

of a chemical weapons facility

Prohibition on use of funds to finance housing of members of the military forces of the

former Soviet Union or of the Russian Federation

Limitation on the amount of funds authorized to be expended on various CTR programs

Prohibition on use of funds for conducting peacekeeping activities , for

military housing, for environmental restoration, or for job retraining

Earmarks for the dismantling and disposal of nuclear submarines and submarine

reactor components and for the Arctic Military Environmental Cooperation Program

Prohibition on use of funds to finance housing of members of the military forces of the

former Soviet Union or of the Russian Federation

Limitation on the amount of funds authorized to be expended on various CTR programs

Prohibition on use of funds for conducting peacekeeping activities , for military

housing, for environmental restoration, or for job retraining

Certification requirement for projects related to the START II Treaty

Certification requirement regarding the use of CTR funds for the planning and design of

a chemical weapons facility. Prohibition against use of funds for construction of the

facility

Certification requirement regarding the use of CTR funds for the destruction of chemical

weapons

with Russia

with Russia

Pub. L. 104-106

Pub. L. 104-208

Pub. L. 104-201

Pub. L. 105-56

Pub. L. 105-85

Sec. 1202

Sec. 1203

Sec. 1205

Sec. 1206, as amended

Sec. 1207

Sec. 1208

Sec. 1209

Sec. 8098

Sec. 1502

Sec. 1503

Line Item

Sec. 8085

Sec. 1402

Sec. 1403

Sec. 1404

Sec. 1405

Sec. 1406
Appendix II

Legislative Mandates Covering the CTR 

Program 

Page 33 GAO-05-329 Cooperative Threat Reduction

Requirements

Legislation Conditions

Reporting

Lapsed

Sec. 1407

Sec. 1408

Sec. 1409

Former Soviet Union Threat

Reduction Line Item

Sec. 8079

Sec. 1302

Sec. 1303

Sec. 1304

Sec. 1305

Sec. 1306

Sec. 1307

Sec. 1308

Sec. 1309

Former Soviet Union Threat

Reduction Line Item

Sec. 8078

Sec. 1302

Sec. 1303(a)

Pub. L. 105-262

Pub. L. 105-261

Pub. L. 106-79

Pub. L. 106-65

Limitation on the use of CTR funds for a storage facility for Russian fissile material

Limitation on the use of CTR funds for weapons storage security activities

Report requirement regarding payment of taxes, duties, and other assessment on assistance

provided to Russia under CTR programs

Earmark for the dismantling and disposal of nuclear submarines and submarine reactor

components

Prohibition on use of funds to finance housing of members of the military forces of the former

Soviet Union or of the Russian Federation

Limitation on the amount of funds authorized to be expended on various CTR programs

Prohibition on use of funds for conducting peacekeeping activities , for military

housing, for environmental restoration, or for job retraining

Certification requirement regarding use of CTR funds for chemical weapons destruction

activities in Russia

Limitation on the use of CTR funds for biological weapons proliferation prevention activities in

Russia

Certification requirement regarding the Cooperative Counter Proliferation Program

Requirement to submit as part of the Defense Department's annual budget request a

summary of amounts requested by project category

Report requirement regarding biological weapons programs in Russia

Report requirement regarding individuals in the former Soviet Union with expertise in matters

associated with ballistic missiles and weapons of mass destruction

Earmark for the dismantling and disposal of nuclear submarines and submarine reactor

components

Prohibition on use of funds to finance housing of members of the military forces of the former

Soviet Union or of the Russian Federation

Limitation on the amount of funds authorized to be expended on various CTR programs

Prohibition on use of funds for conducting peacekeeping activities , for military

housing, for environmental restoration, or for job retraining

Department of Defense Appropriations Act, 1999

National Defense Authorization Act for Fiscal Year 1999

Department of Defense Appropriations Act, 2000

National Defense Authorization Act for Fiscal Year 2000

with Russia

with Russia
Appendix II

Legislative Mandates Covering the CTR 

Program 

Page 34 GAO-05-329 Cooperative Threat Reduction

Requirements

Legislation Conditions

Reporting

Lapsed

Sec. 1303(c)

Sec. 1304(a)(1)

Sec. 1304(a)(2)

Sec. 1304(b)

Sec. 1305

Sec. 1306

Sec. 1308

Sec. 1309

Sec. 1310

Former Soviet Union Threat

Reduction Line Item

Sec. 8074

Sec. 1302(a), (c)

Sec. 1302(b)

Sec. 1303

Sec. 1304(a)(1)

Sec. 1304(a)(2)

Sec. 1304(b)

Sec. 1305

Sec. 1307

Sec. 1308(a)

Pub. L. 106-259

Pub. L. 106-398

Prohibition on use of CTR funds for elimination of conventional weapons

Prohibition on use of Fiscal Year 2000 CTR funds for construction of a second wing of a

storage facility for Russian fissile material

Limitation on use of CTR funds for design or planning with respect to a second wing of a

storage facility for Russian fissile material

Certification requirement regarding the use of previously authorized CTR funds for

construction of a second wing of a storage facility for Russian fissile material

Prohibition on use of CTR funds for construction of a chemical weapons facility in Russia

Report requirement concerning the Defense Department's role in managing the CTR program

Report requirement concerning DoD's strategy for encouraging states of the former Soviet

Union to contribute financially to the CTR effort and other matters

Report requirement concerning the expanded threat reduction initiative

Certification requirement related to CTR fund recipients' commitment to various CTR goals

Earmark for the dismantling and disposal of nuclear submarines and submarine reactor

components

Prohibition on use of funds to finance housing of members of the military forces of the former

Soviet Union or of the Russian Federation

Limitation on the amount of funds authorized to be expended on various CTR programs

Report requirement concerning the obligation of CTR funds

Prohibition on use of CTR funds for elimination of conventional weapons

Prohibition on use of Fiscal Year 2000 CTR funds for construction of a second wing of a

storage facility for Russian fissile material

Limitation on use of CTR funds for design or planning with respect to a second wing of a

storage facility for Russian fissile material

Cap on CTR funding available for planning, design, or construction of the first wing of a

storage facility for Russian fissile material

Limitation on use of funds to support warhead dismantlement processing

Prohibition on use of CTR funds for construction of fossil fuel energy plants; report requirement

concerning options for assisting Russia in the development of alternative energy sources

Report requirement concerning previous year activities

Department of Defense Appropriations Act, 2001

National Defense Authorization Act for Fiscal Year 2001
Appendix II

Legislative Mandates Covering the CTR 

Program 

Page 35 GAO-05-329 Cooperative Threat Reduction

Requirements

Legislation Conditions

Reporting

Lapsed

Sec. 1308(i)

Sec. 1309

Sec. 1310

Sec. 1302(a)

Sec. 1302(b)

Sec. 1305

Sec. 1306

Sec. 1308 (amending Sec.

1305 of Pub. L. 106-65)

Sec. 1309

Former Soviet Union Threat

Reduction Line Item

Former Soviet Union Threat

Reduction Line Item

Sec. 1302(a), (b), (d)

Sec. 1302(c)

Sec. 1304

Sec. 1305

Former Soviet Union Threat

Reduction Line Item

Sec. 1302(a) (c)

Pub. L. 107-107

Pub. L. 107-117

Pub. L. 107-248

Pub. L. 107-314

Pub. L. 108-87

Pub. L. 108-136

Report requirement concerning Russian nonstrategic nuclear arms

Report requirement concerning Russian efforts concerning chemical weapons elimination

Report requirement concerning elimination of weapons grade plutonium

Limitation on the amount of funds authorized to be expended on various CTR programs

Report requirement concerning the obligation of CTR funds

Prohibition on use of Fiscal Year 2000 CTR funds for construction of a second wing of a

storage facility for Russian fissile material

Prohibition against use of CTR funds for construction activities carried out under Russia's

program to eliminate the production of weapons grade plutonium

Certification requirement concerning use of CTR funds for construction of a chemical weapons

facility in Russia

Report requirement concerning the financial commitment of other countries to the

Shchuch'ye chemical weapons facility

Earmark for the dismantling and disposal of nuclear submarines and submarine reactor

components

Earmark for the dismantling and disposal of nuclear submarines and submarine reactor

components

Limitation on the amount of funds authorized to be expended on various CTR programs

Report requirement concerning the obligation of CTR funds

Report requirement concerning the use of revenue generated by activities carried out under

CTR programs

Prohibition against use of CTR funds for a second wing of the fissile material storage facility

Earmark for the dismantling and disposal of nuclear submarines and submarine reactor

components

Limitation on the amount of funds authorized to be expended on various CTR programs

National Defense Authorization Act for Fiscal Year 2002

Department of Defense Appropriations Act, 2002

Department of Defense Appropriations Act, 2003

National Defense Authorization Act for Fiscal Year 2003

Department of Defense Appropriations Act, 2004

National Defense Authorization Act for Fiscal Year 2004
Appendix II

Legislative Mandates Covering the CTR 

Program 

Page 36 GAO-05-329 Cooperative Threat Reduction

Requirements

Legislation Conditions

Reporting

Lapsed

Sec. 1302(b)

Sec. 1303

Sec. 1304

Sec. 1305

Sec. 1306

Sec. 1307

Sec. 1308

Former Soviet Union Threat

Reduction Line Item

Sec. 1302(a), (c)

Sec. 1302(b)

Pub. L. 108-287

Pub. L. 108-375

Report requirement concerning the obligation of CTR funds

Limitation on use of CTR funds for construction activities until certain permits are obtained

Limitation on use of CTR funds for biological research in the former Soviet Union

Requirement for on-site managers

Certification requirement concerning funding for chemical weapons facility in Russia

Certification requirement concerning use of facilities constructed for CTR programs or

activities

Limited grant of authority to engage in proliferation threat reduction activity outside the states

of the former Soviet Union

Earmark for the dismantling and disposal of nuclear submarines and submarine reactor

components

Limitation on the amount of funds authorized to be expended on various CTR programs

Report requirement concerning the obligation of CTR funds

Department of Defense Appropriations Act, 2004

National Defense Authorization Act for Fiscal Year 2004

Source: GAO analysis.
Page 37 GAO-05-329 Cooperative Threat Reduction

Appendix III

Scope and Methodology ApendxiI

To assess DOD’s management and internal controls over the CTR program, 

we collected and analyzed DOD documents, including CTR project plans, 

briefings, annual reports, and milestone decision authority memorandums. 

We also obtained and analyzed all legislation passed since 1992 that covers 

the CTR program. We applied the internal standards as described in GAO’s 

Standards for Internal Control in the Federal Government.1

 We focused 

on those controls most relevant to the CTR program, including 

organizational structure, risk assessments, performance measures, 

program reviews, communications, and monitoring of projects. We also 

reviewed DOD acquisition management guidance as contained in the 

Defense Threat Reduction Agency’s Instruction 5000.01 for our 

assessment of CTR management controls.2

 Using the federal government 

standards and DOD’s guidance, we developed and tested a semi-structured 

interview guide that included questions regarding DOD’s internal controls 

for the CTR program. We included steps in the development and 

administration of the semi-structured interview guide to minimize errors 

resulting from the respondents’ interpretation of the questions or from 

differences in information available to respondents answering the 

questions. We pretested the instrument with three DOD officials. In 

addition, an internal survey specialist reviewed our semi-structured 

interview guide. We modified the interview guide to reflect the questions 

and comments from the pretests and internal review. We used the semistructured interview guide to interview 30 DOD officials responsible for 

managing and implementing the CTR program. We also held meetings with 

17 other officials. Specifically, we met with officials from the CTR Policy 

Office, AT&L, and DTRA’s Business and Cooperative Threat Reduction (CT) 

directorates. Within CT, we obtained information from the director, deputy 

director, program and project managers from all five program areas,3

 and 

officials from the Program Integration office. In addition, we met with 

officials from DTRA offices in Moscow and Almaty and the Threat 

Reduction Support Center in Springfield, Virginia. We traveled to the 

Russian Federation to observe CTR projects involving strategic offensive 

1

GAO/AIMD-00-21.3.1 (Washington, D.C.: Nov. 1999). We also referred to GAO’s publication, 

Internal Control Management and Evaluation Tool, GAO-01-1008G (Washington, D.C.: Aug. 

2001).

2

DTRA Instruction 5000.01: Defense Threat Reduction Agency (DTRA) Major Programs

(Ft. Belvoir, VA: Nov. 15, 2004).

3

The five program areas are Biological Weapons Proliferation Prevention, Chemical 

Weapons Elimination, Nuclear Weapons Safety and Security, Strategic Offensive Arms 

Elimination, and Weapons of Mass Destruction Proliferation Prevention.
Appendix III

Scope and Methodology

Page 38 GAO-05-329 Cooperative Threat Reduction

arms elimination and biological weapons proliferation prevention. We met 

with Russian officials at the Federal Space Agency, the Federal Agency for 

Industry, and the Federal Atomic Energy Agency. We also visited the 

Republic of Kazakhstan to observe CTR-funded projects involving 

biological weapons proliferation prevention. While in Russia and 

Kazakhstan, we met with representatives from all five CTR Integrating 

Contractors4

 to obtain information on their roles in implementing CTR 

projects. We also reviewed our prior work on the CTR program. 

Although information about funding for the CTR program and the 

program’s accomplishments is used for background purposes only, we 

assessed the reliability of these data by reviewing relevant agency 

documents and obtaining information from agency officials. We 

determined that the data used were sufficiently reliable for the purposes of 

this report. 

We performed our work from April 2004 through May 2005 in accordance 

with generally accepted government auditing standards. 

4

The five contractors are Parsons; Bechtel International Systems, Inc.; Raytheon Technical 

Services Company; Kellogg, Brown, and Root; and Washington Group International. 
Page 39 GAO-05-329 Cooperative Threat Reduction

Appendix IV

Current CTR Program Areas ApendxiIV

Since 1992, Congress has authorized DOD to provide more than $5 billion 

for the CTR program to help the former states of the Soviet Union, 

including Russia, Ukraine, Belarus, Kazakhstan, Uzbekistan, Azerbaijan, 

Moldova, and Georgia, secure and eliminate their weapons of mass 

destruction and prevent their proliferation. As of April 2005, DOD has 

obligated about $4.5 billion in support of the CTR program. Of this 

obligated amount, about $2.7 billion funds projects are being implemented 

under CTR’s five program areas of biological weapons proliferation 

prevention, chemical weapons elimination, nuclear weapons safety and 

security, strategic offensive arms elimination, and weapon of mass 

destruction proliferation prevention initiative, as shown in figure 4. The 

remaining obligations cover completed CTR projects or other program 

support areas.1

1

Other program support areas include Defense and Military Contacts, Arctic Nuclear Waste, 

and administrative costs. 
Appendix IV

Current CTR Program Areas

Page 40 GAO-05-329 Cooperative Threat Reduction

Figure 4: CTR Program Area Descriptions and Obligations as of April 2005

The Biological Weapons Proliferation Prevention (BWPP) program 

involves providing security and safety upgrades at institutes engaged 

only in legitimate dangerous biological pathogen research. CTR 

assistance is being provided to Georgia, Kazakhstan, Russia, and 

Uzbekistan to improve the security and safety of biological research 

facilities and to consolidate dangerous biological pathogen collections to 

reduce the number of storage sites. Some CTR assistance is also being 

provided for the elimination of biological weapons infrastructure in 

Kazakhstan, Georgia, and Russia. The BWPP program in Kazakhstan, 

Russia, and Uzbekistan also includes efforts to engage former biological 

weapons scientists in cooperative biological research projects to prevent 

the proliferation of their expertise. Furthermore, the biological threat 

agent detection and response project in Kazakhstan, Georgia, and 

Uzbekistan will strengthen dangerous pathogen detection and response 

networks, enable discovery of the diversion or accidental release of 

biological materials, and safely consolidate pathogen collections in 

central labs.a

CTR Funds Obligated as of April 2005:

$210.3 million

Integrating Contractors:

Raytheon Technical Services Company (Russia) and Bechtel National, 

Inc. (non-Russia former Soviet Union states)

The Chemical Weapons Elimination program is assisting Russia in the 

safe, secure, and environmentally sound destruction of its chemical 

weapons stockpile. Primarily, CTR assistance is funding the design, 

construction, equipment acquisition and installation, systems integration, 

training, and start-up of the chemical weapons destruction facility at 

Shchuch'ye. Construction of the facility began in March 2003, but the 

facility may not be operational until July 2009. In addition, CTR money is 

assisting Russia with the demilitarization of former chemical weapons 

production facilities in Volgograd and Novocheboksarsk. This effort 

includes decontaminating, dismantling, and destroying specialized 

equipment related to the production, transfer, and storage of chemical 

weapons, chemical agents, and their precursors.

CTR Funds Obligated as of April 2005:

$816.1 million

Integrating Contractor:

Parsons Delaware, Inc.b

Biological Weapons Proliferation Prevention

Chemical Weapons Elimination
Appendix IV

Current CTR Program Areas

Page 41 GAO-05-329 Cooperative Threat Reduction

a

Ukraine may also receive CTR assistance under the BWPP program.

b

The U. S. Army Corps of Engineers and other government agencies are involved with the construction 

of the chemical weapons destruction facility at Shchucy’ye.

c

NWSS includes Nuclear Weapons Storage Security projects and Nuclear Weapons Transportation 

Security projects in Russia.

The Strategic Offensive Arms Elimination (SOAE) program assists Russia in the destruction of Russian strategic 

weapons and their infrastructure to reduce the opportunities for their proliferation or use. The CTR program is 

assisting Russia by contracting for, and overseeing destruction of, its strategic weapons delivery systems and their 

related infrastructure. For example, CTR assistance is providing equipment and services to destroy or dismantle 

intercontinental ballistic missiles and their delivery systems, including silo launchers and road and rail mobile 

launchers. CTR is also assisting in the destruction of Russian submarine-launched ballistic missiles, as well as 

their launchers. In addition, the SOAE program is assisting Russia in shipping to storage the spent naval reactor 

fuel used on its nuclear powered submarines being prepared for elimination. 

CTR Funds Obligated as of January 2005:

$1.1 billion

Integrating Contractors:

Bechtel National, Inc.; Kellogg, Brown, and Root; Raytheon Technical Services Company; Parsons Delaware, Inc.; 

and Washington Group International

The Weapons of Mass Destruction Proliferation Prevention Initiative (WMD-PPI) program seeks to bolster nonRussian former Soviet Union states' ability to prevent the proliferation of WMD across their borders. Currently, CTR 

program officials are working with the governments of Azerbaijan, Kazakhstan, Ukraine, and Uzbekistan. CTR 

assistance will provide equipment and indigenous logistics support, training, and infrastructure support to those 

agencies of recipient governments vested with the authority to monitor borders for illegal transport of WMD or 

related materials. Such agencies include Border Guard, Customs, National Guard, and selected Defense and 

Interior government organizations. 

CTR Funds Obligated as of April 2005:

$38.2 million

Integrating Contractors:

Washington Group International and Raytheon Technical Services Company

Strategic Offensive Arms Elimination

Weapons of Mass Destruction Proliferation Prevention Initiative

The Nuclear Weapons Safety and Security (NWSS)c program is helping Russia to enhance its ability to secure 

nuclear weapons during transportation and storage. CTR assistance is being used to provide support and safety 

equipment for nuclear weapons storage sites, enhance the safety and security of nuclear weapons storage sites by 

installing security systems and training guard forces, and improving the safety and security of nuclear weapons 

during shipment through new rail cars and storage containers.

CTR Funds Obligated as of April 2005:

$516.2 million

Integrating Contractors:

Raytheon Technical Services Company and Bechtel National, Inc.

Nuclear Weapons Safety and Security

Sources: DOD (photos 2, 4, 5) and GAO (photos 1, 3). 
Page 42 GAO-05-329 Cooperative Threat Reduction

Appendix V

DOD’s Current Management and Internal 

Controls for the CTR Program Compared with 

Internal Control Standards ApendxiV

In managing the CTR program, standards for internal controls in the federal 

government provide an overall framework for DOD to establish and 

maintain management controls and identify and address major 

performance challenges and areas at risk for mismanagement. The five 

overall standards for internal control are control environment, risk 

assessment, control activities, information and communications, and 

monitoring. Each standard contains numerous factors that an 

organization’s management can use to evaluate its internal controls. For 

example, under the control environment standard, there are about 30 

factors listed such as whether an agency’s organizational structure has 

appropriate and clear internal reporting requirements. For this report, we 

focused on those factors most relevant to CTR program implementation. 

The scope of our work thus covered factors such as organizational 

structure, risk assessments, performance measures, program reviews, 

communications, and monitoring of projects. Table 1 describes the factors 

selected in reviewing DOD’s current internal controls for the CTR program.
Appendix V

DOD’s Current Management and Internal 

Controls for the CTR Program Compared 

with Internal Control Standards

Page 43 GAO-05-329 Cooperative Threat Reduction

Table 1: Internal Control Standards and Factors Compared with DOD Internal controls

Standards Factors Current DOD internal controls

Control environment Organizational structure

Establish and maintain

an environment 

throughout the 

organization that sets a 

positive and supportive 

attitude toward internal 

control and 

conscientious 

management.

Key areas of authority and 

responsibility are defined and 

communicated throughout the 

organization.

Appropriate and clear internal 

reporting relationships have been 

established. 

DOD filled vacancies in the office of the Under Secretary of Defense for 

Acquisitions, Technology, and Logistics (AT&L) to provide oversight of the 

program. Specifically, within AT&L, the office of the Deputy Assistant to 

the Secretary of Defense for Chemical Demilitarization and Threat 

Reduction participates in CTR program planning, including overseeing 

program review meetings and providing guidance to program and project 

managers. This office also interacts with the CTR Policy Office and 

conveys policy guidance to the Cooperative Threat Reduction 

Directorate.

DOD uses designated Milestone Decision Authority (MDA) to perform 

oversight of all CTR program areas. The MDA chairs program reviews 

and approves project acquisition and implementation strategies. The 

MDA has the authority to approve all project phases or to withhold 

approval subject to revised planning. 

CTR project managers regularly report to their MDAs to provide updates 

on project status and to report on cost, schedule, and performance. With 

the introduction of the MDA process, program reviews occur at the same 

intervals for each project and project managers are reporting similar 

types of information to their MDAs. 

DTRA Implementing Instructions for Major Program Guidance (DTRA 

5000.01) now defines the roles and responsibilities for management and 

oversight of DTRA major programs, including CTR projects.
Appendix V

DOD’s Current Management and Internal 

Controls for the CTR Program Compared 

with Internal Control Standards

Page 44 GAO-05-329 Cooperative Threat Reduction

Risk assessment Risk identification, risk analysis, and managing risk during change

Provide for an 

assessment of the risks 

the agency faces from 

both external and 

internal sources.

Management comprehensively 

identifies risk using various 

methodologies as appropriate. 

Management has developed an 

approach for risk management and 

control based on how much risk 

can be prudently accepted. For 

example, specific control activities 

are identified to manage or mitigate 

specific risks at each activity level. 

The agency has mechanisms in 

place to anticipate, identify, and 

react to risks presented by 

changes in governmental, 

economic, industry, regulatory, 

operating, or other conditions that 

can affect the achievement of 

entity-wide or activity-level goals 

and objectives.

Adequate mechanisms exist to 

identify risks to the agency arising 

from external factors. 

Since the two CTR project failures in 2003, DOD now uses several 

methods to assess and mitigate risks associated with CTR projects. 

An MDA is designated for each CTR project based on several factors, 

including the project’s risk and expected cost.

CTR program officials now use a phased-contract approach in managing 

project implementation. Under this approach, projects are evaluated in 

three phases to minimize project risk.

DOD has instituted periodic meetings of stakeholders to assess and 

minimize risks associated with CTR projects. 

The CTR program uses amendments to implementing agreements to 

convert recipient government assumptions or responsibilities into firm 

commitments. Implementing agreements have been used to limit CTR 

program risks.

CTR’s new and revised internal controls provide a mechanism for 

addressing and mitigating the specific risks associated with each project, 

but the CTR program must still rely on the good will of recipient 

governments to help implement projects. DOD cannot fully mitigate the 

risks of cooperating with these governments.

Control activities

Help ensure that 

management’s 

directives are carried out 

effectively and efficiently 

in accomplishing the 

agency’s objectives.

Top-level and management reviews at the functional or activity level

Top-level management regularly 

reviews actual performance 

against budgets, forecasts, and 

prior results. 

Agency managers review actual 

performance against targets. 

The MDA for CTR projects is responsible for balancing requirements with 

risks, approving and overseeing cost, schedule, and performance 

baselines. 

DOD has introduced a new process to review CTR projects whereby the 

designated MDA conducts periodic reviews of a project’s cost, schedule, 

and performance objectives.

Monthly review meetings of CTR projects include more detailed 

discussions of project plans that now include objectives, exit strategies, 

and project status. Project plans are submitted to CTR management for 

review regularly. 

Performance measures and indicators 

The agency has established and 

monitors performance measures 

and indicators. 

CTR project baselines now include the thresholds and objectives for key 

parameters such as cost, schedule, and performance. 

DTRA had developed and implemented guidelines that provide CTR 

project managers with written instructions on developing and reporting 

project objects, schedules, and cost estimates. 

(Continued From Previous Page)

Standards Factors Current DOD internal controls
Appendix V

DOD’s Current Management and Internal 

Controls for the CTR Program Compared 

with Internal Control Standards

Page 45 GAO-05-329 Cooperative Threat Reduction

Source: GAO analysis.

Information and 

communications

Should be recorded and 

communicated to 

management and others 

who need it.

Communications

Mechanisms should exist to allow 

the easy flow of information down, 

across, and up the organization, 

and easy communications exist 

between functional activities, such 

as between procurement and 

production activities.

DTRA Implementing Instructions for Major Program Guidance (DTRA 

5000.01) documents the roles and responsibilities for management and 

oversight of DTRA major programs, including CTR projects.

All CTR stakeholders are provided with consistent information on a 

regular basis through emails, weekly reports, and periodic meetings.

CTR project managers hold weekly phone conferences with contractors 

implementing projects in recipient countries to ensure proper program 

implementation. Contractors are required to submit monthly written 

reports to CTR officials.

DOD has improved its external communications with CTR-recipient 

countries. To more clearly define the project commitments of CTRrecipient governments and minimize risk at the outset of each project and 

throughout its life cycle, DOD has introduced and updated controls to 

ensure that commitments made by the CTR program and governments 

receiving CTR assistance are clearly defined and documented.

Monitoring

Should assess the 

quality of performance 

over time and ensure 

that the findings of 

audits and other reviews 

are promptly resolved. 

Ongoing monitoring 

Management has a strategy to 

ensure that ongoing monitoring is 

effective and will trigger separate 

evaluations where problems are 

identified. 

Separate evaluations are often 

prompted by events such as major 

changes in management plans or 

strategies.

CTR program officials now monitor the performance of ongoing projects 

through a variety of controls, but they do not assess the performance of 

CTR projects upon their completion. 

DTRA has developed and implemented guidance that provides CTR 

project managers with written instructions on how to measure 

performance for meeting project objectives, schedules, and cost 

estimates. The metrics described in this guidance are intended to 

establish meaningful goals and track milestones for each project. 

During periodic program reviews, CTR project managers report to their 

MDAs on the status of their projects, primarily whether objectives are 

being met. 

CTR project managers interact regularly with contractors and recipient 

government officials through emails, phone conferences, and project 

visits. In fiscal year 2003, CTR teams made 165 project trips compared 

with 70 trips in 2001. 

(Continued From Previous Page)

Standards Factors Current DOD internal controls
Page 46 GAO-05-329 Cooperative Threat Reduction

Appendix VI

Comments from the Department of Defense ApendxiVI
Page 47 GAO-05-329 Cooperative Threat Reduction

Appendix VII

GAO Contact and Staff Acknowledgments ApendxiVI

GAO Contact Joseph A. Christoff (202) 512-8979

Staff 

Acknowledgments

In addition to the contact named above, Dave Maurer, Beth Hoffman León, 

Josie Sigl, Stephanie Robinson, Nima Patel Edwards, Stacy Edwards, Lynn 

Cothern, Judy Pagano, and Mark Dowling contributed to this report. Etana 

Finkler also provided assistance.

(320264)
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