Over Budget and Behind Schedule, JACADS' Cost Now Exceeds $1 Billion

posted in: March 1997 | 0

The Johnston Atoll Chemical Agent Disposal System was designed in the mid-1980s and construction of the $150 million facility was completed in 1988. Four years earlier, when the Army was first charged by Congress to destroy the nation’s stockpiles of chemical weapons by 1997, the cost of the total national project was estimated at $1.7 billion. Now, it appears likely that nearly this much will be spent at JACADS alone, with the latest estimates putting the cost at approximately $1.3 billion.

Just four years into the program, when JACADS had been built, the total “life-cycle cost” as the Army called it of disposing of the chemicals stored at Johnston Island was estimated to be $298 million, while the total amount of time that the project was expected to take was approximately four years from the time the project began. The life-cycle cost for the entire chemical weapons stockpile dis–posal program had by then increased to $6.5 billion, with a scheduled completion date of 1999.

By 1991, the Army had revised its life-cycle cost of JACADS upward, nearly doubling the cost to $585 million. The General Accounting Office issued a report that year bearing the descriptive title, “Chemical Weapons: Stock–pile Destruction Cost Growth and Schedule Slippages are Likely to Continue.”1 Since the only operational facility at the time was JACADS, the GAO’s conclusions were based exclusively on its brief and rather dismal history to that time.

Low destruction rates were one of the chief reasons cited by the GAO in determining that the Army’s estimated costs and completion date were overly optimistic. “Even with the extension of the initial testing period from 16 weeks to 32 weeks, only 7,490 rockets were destroyed, compared with the Army’s initial goal of 9,984 rockets. Before the completion of this test period on February 27, 1991, the best monthly destruction rate for the GB– filled, M-555 rockets was approximately 13 rockets per hour, compared with the Army’s goal of 24 per hour during a month…

“Due to technical and mechanical problems during the initial testing, the expected monthly destruction rate of 24 rockets per hour was not achieved… Problems surfaced when the heated discharge conveyor jammed, the deactivation furnace flange bolts failed, the pollution abatement system plugged, and gates jammed.”

Even with the Army’s revised cost estimates and time schedules, the GAO found, “estimates for fiscal 1994 through 1997 could increase because they depend on production rates that have not been demonstrated, environmental permit limits that have not been determined, international agreements with requirements that have not been defined, and contingency drills that have not been exercised.”

Finally, the GAO suggested that the Army should consider alternatives to incineration: “The likelihood of further cost increases and schedule slippages suggests that the Army needs to determine whether there are faster and less costly alternatives to its current disposal plan.”

Falling Further Behind

In January 1993, the GAO issued another report to Congress: “Chemical Weapons Destruction: Issues Affecting Program Cost, Schedule, and Performance.”2 As before, the GAO found the Army’s estimates of costs and its timetable for completion of destruction of the nation’s chemical weapons stockpile were far rosier than was justified by JACADS’ operations. “Total program costs have increased from an initial estimate of $1.7 billion to a current estimate of almost $8 billion,” the GAO noted.

In the intervening years, the GAO has continued to monitor, at Congress’ request, the Army’s progress or lack of it on the disposal of chemical weapons. The GAO found, in its most recent report on the subject (February 1997), “Since 1985, the Army’s cost estimate for the stockpile disposal program has increased seven-fold, from an initial estimate of $1.7 billion to $12.4 billion, and the planned completion date has been delayed from 1994 to 2004. Although the Army is committed to destroying the stockpile by the legislatively imposed deadline of December 31, 2004, it is unlikely to meet that date.”3

A Billion-Dollar Contract

In October 1996, the Army awarded a third contract to Raytheon Engineers & Construc–tors for the operation of JACADS. The contract, having a value of $500 million, is to cover costs of operating the facility through 2001.

The value of JACADS contracts received by Raytheon or Engineers & Constructors before its purchase by Raytheon totals $1.16 billion.

Raytheon is one of the top 20 firms in the U.S. to receive federal contract dollars, with most of its contracts awarded through the Department of Defense. In the federal fiscal year for 1993, the GAO has reported, Raytheon received contracts worth $3.5 billion.

1. GAO Report No. NSIAD-92-18 (November 1991).
2. GAO Report No. NSIAD – 93-50.
3. GAO Report No. NSIAD/97-18, “Chemical Weapons and Materiel: Key Factors Affecting Disposal Costs and Schedules.” This is a very long, very comprehensive discussion of disposal issues for both stockpile and nonstockpile chemical weapons. It provides a comprehensive history of chemical weapons development, an overview of the international situation as well as a discussion of alternative technologies. In short, it is a vital reference document for anyone desiring more detailed information on the subject of chemical weapons.

Volume 7, Number 9 March 1997

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