FY2010 CTR Annual Report to Congress.pdf

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Table of Contents Introduction Figure 1: Program-assisted activities Program Activities and Assistance – Includes FY 2010 Implementation Plan and FY 2008

Accounting Activities

1. Strategic Offensive Arms Elimination

1.1. Solid Propellant ICBM/SLBM and Mobile Launcher Elimination - Russia

1.2. Liquid Propellant ICBM/SLBM Missile and Silo Elimination - Russia

1.3. SLBM Launcher Elimination/SSBN Dismantlement - Russia

2. Strategic Nuclear Arms Elimination

2.1. SS-24 Missile Disassembly, Storage, and Elimination - Ukraine

3. Chemical Weapons Destruction

3.1. Chemical Weapons Destruction Facility - Russia

4. Nuclear Weapons Storage Security

4.1. Site Security Enhancements – Russia

4.2. Far East Training Center – Russia

4.3. Automated Inventory Control and Management System – Russia

5. Nuclear Weapons Transportation Security

5.1. Nuclear Weapons Transportation – Russia

5.2. Railcar Maintenance and Procurement – Russia

6. Biological Threat Reduction

6.1. Biosecurity, Biosafety, Threat Agent Detection and Response

6.2. Cooperative Biological Research

7. Weapons of Mass Destruction Proliferation Prevention Initiative

7.1. Land Border and Maritime Proliferation Prevention – Ukraine

7.2. Caspian Sea Maritime Proliferation Prevention – Azerbaijan

7.3. Fissile and Radioactive Material Proliferation Prevention – Kazakhstan

7.4. Expanded Proliferation Prevention

8. Defense and Military Contacts (DMC)

9. New Initiatives

10. Other Assessments/Administrative Support

10.1. Audits and Examinations

10.2. Program Management/Administration

Figure 2: Program accountability actions for FY 2008 Figure 3: The amount notified, obligated, and expended for activities in millions Figure 4: Program FY 2010 Plan funding by program/project in millions Figure 5: Program FY 2010 Plan funding by objective in millions Figure 6: Program FY 2010 Plan funding by country in millions Appendix A: CTR Program Umbrella and Implementing Agreements Appendix B: Financial Commitments for FY 2009 from the International Community and Russia for the Chemical Weapons Destruction Facility at Shchuch’ye, Russia Appendix C: Report on Cooperative Threat Reduction Moscow Treaty Assistance Pursuant to

S. Exec. Rpt. 108-1, Section 2(1) Appendix D: Annual Certification on Use of Facilities Being Constructed for Cooperative Threat

Reduction Projects or Activities Acronyms and Abbreviations

Introduction Recurring Requirements Addressed in This Report

The Annual Report to Congress on Cooperative Threat Reduction (CTR) activities (CTR Annual Report) for Fiscal Year (FY) 2010 is submitted in accordance with Section 1308 of the Floyd D. Spence National Defense Authorization Act (NDAA) for FY 2001, as amended. It ad-dresses the FY 2008 requirement for “Accounting for CTR Program Assistance to States of the Former Soviet Union (FSU),” and the Treaty on Strategic Offensive Reductions (Moscow Treaty) Report (Senate Executive Report 108-1, Section 2(1)), dated March 6, 2003 (Appendix C). It also addresses the annual certifications on use of facilities being constructed, as required by Section 1307 of the FY 2004 NDAA (Appendix D). The “Five-Year CTR Program Imple-mentation Plan” only includes FY 2010 since the Administration has not completed a program and budget review for FY 2011–FY 2015.

CTR Program and United States National Security

The National Security Presidential Directive on the National Strategy to Combat Weap-ons of Mass Destruction issued in December 2002 cites possession of weapons of mass destruc-tion (WMD) by hostile states and terrorists as one of the greatest security challenges facing the United States and commits the United States to pursue a comprehensive strategy to counter this threat. The strategy calls on United States (U.S.) agencies to apply new technologies, increase emphasis on intelligence collection and analysis, strengthen alliances, and establish new partner-ships with former adversaries. Another National Security Presidential Directive was issued in April 2004, “Biodefense for the 21st Century,” for efforts against biological weapons (BW) threats. The CTR Program supports these directives by pursuing five objectives:

Objective 1: Dismantle threat WMD and associated infrastructure, Objective 2: Consolidate and secure threat WMD and related technology and materials, Objective 3: Increase transparency and encourage higher standards of conduct, Objective 4: Support defense and military cooperation with the objective of preventing proliferation, and Objective 5: Synchronize CTR activities with related U.S. Government and allied programs.

The Department of Defense (DoD) supports these objectives in partner countries and will support them in additional states as authorized by Congress when the Secretary of Defense, with the concurrence of the Secretary of State, makes the determinations required by law. CTR activities help deny rogue states and terrorists access to WMD and related materials, technolo-gies, and expertise and contribute to stability, cooperation, and expanding U.S. influence in these states and their regions. The Program:

• dismantles strategic weapons delivery systems and infrastructure;

• enhances security and safety of WMD and fissile material during transportation and storage;

• consolidates and secures dangerous pathogens at risk for theft, diversion, accidental release, or use by terrorists;

• enhances partner states’ capacity to develop an early warning system for bioterror attacks and potential pandemics;

• facilitates strategic research partnerships;

• helps prevent proliferation of WMD and related materials; and

• facilitates defense and military contacts to encourage military reform.

CTR Assistance CTR assistance consists of goods and services provided through U.S. Government con-tracts by U.S. and non-U.S. enterprises. The contracts are executed, managed, and reviewed in accordance with DoD and Federal Acquisition Regulation requirements.

Funding for CTR assistance totals $6,772.7 million in obligation authority through FY 2009. In FY 2008, $410.5 million was obligated. The budget request for FY 2010 is $404.1 mil-lion and the estimated total amount required to achieve Program objectives through FY 2010 is $7,176.8 million. Programs and projects that require funding beyond FY 2010 will be identified in future CTR Annual Reports.

Figure 1 lists some of the CTR Program accomplishments. Details are provided in the Accounting for Assistance section of this report.

Figure 1: Program-assisted activities

Category Base-line

FY 2008

Activity

Cumulative Activity

CY 2012

Goal

Percent of Goal

Warheads Deactivated 13,300 107 7,504 8,452 89 ICBMs Destroyed 1,473 61 742 1,110 67 ICBM Silos Eliminated 831 11 496 574 86 ICBM Mobile Launchers Destroyed 442 27 143 267 54 Bombers Eliminated 233 0 155 155 100 Nuclear ASMs Destroyed 906 0 906 906 100 SLBM Launchers Eliminated 728 0 476 544 88 SLBMs Eliminated 936 16 633 728 87 SSBNs Destroyed 48 1 31 35 89 Nuclear Test Tunnels/Holes Sealed 194 0 194 194 100 Nuclear Weapons Train Shipments N/A 45 422 620 68 Nuclear Weapons Storage Site Security Upgrades N/A 6 24 24 100 BTR Zonal Diagnostic Laboratories 55 4 16 55 29 CWDF Design (percent complete) 100 .1 99.9 100 99.9 CWDF Construction (percent complete) 100 22.5 79 100 79

Interagency Responsibilities

CTR umbrella agreements establish comprehensive rights, exemptions, and protections for U.S. assistance, personnel, and Program activities. The agreements designate DoD as the U.S. CTR executive agent to negotiate implementing agreements and arrangements and to exe-cute Program activities with the partner country’s designated executive agent. Appendix A lists the applicable agreement currently used for each program included in the FY 2010 Plan.

Other executive branch departments pursue related programs; and standard interagency coordination, assisted by the National Security Council staff, ensures that Program activities complement those of other agencies. For example, the Department of State funds the Export Control and Related Border Security Program, which improves partner states’ export control ca-pabilities to prevent proliferation of WMD and associated components, technology, and delivery systems. The Department of Commerce, Department of Energy (DOE), Department of Home-land Security’s Bureau of Customs and Border Protection, and U.S. Coast Guard help implement the Export Control and Related Border Security Program. DOE’s Second Line of Defense Program installs radiation detection systems at ports of entry. The Program’s WMD Prolifera-tion Prevention Initiative (WMD-PPI), designed to upgrade partner countries’ abilities to detect and interdict trafficking of WMD and related materials, coordinates with these interagency pro-grams and other DoD programs, including the International Counterproliferation Program, which conducts activities with the Department of Homeland Security’s Bureau of Customs and Border Protection and the Federal Bureau of Investigation. Other project areas conduct similar coordi-nation activities as appropriate.

DoD Responsibilities The Office of the Under Secretary of Defense for Policy, through its CTR Policy Office, provides strategic guidance for the Program’s objectives, scope, and direction. The CTR Policy Office conducts long-range planning, provides policy oversight, and negotiates implementing agreements and arrangements. The Under Secretary of Defense for Policy, through the Deputy Assistant Secretary of Defense for Countering Weapons of Mass Destruction and the CTR Policy Office, is responsible for interaction with Congress, the National Security Council, and other ex-ecutive branch components and for establishing public affairs policy. The Office of the Assistant to the Secretary of Defense (Nuclear and Chemical and Biological Defense Programs) provides acquisition guidance, implementation oversight, risk reduction, and resource sponsorship for the CTR Program. The Defense Threat Reduction Agency is the Program’s implementing agency and responsible for all aspects of program, contract, and funds management.

Accounting for Assistance Key components of accounting for Program assistance include disciplined acquisition procedures, application of the Federal Acquisition and DoD regulations, and frequent on-site observation by DoD employees and contractors. The Defense Contract Audit Agency performs contract audits and provides accounting services for administration of DoD contracts. The Defense Contract Management Agency provides a wide range of services, including contract administration, invoice verification, and contract closeout support.

In accordance with umbrella and implementing agreements, the United States has the right to examine the use of any material, training, or service provided. Results of the five audits and examinations (A&Es) conducted in FY 2008 are included with the corresponding project narratives. Activities that provide and account for assistance include:

• Rigorous discussion of requirements and site access with partner countries, when possible before work is contracted, to ascertain the scope of the task and possible solutions to foreseeable implementation problems;

• Implementing agreements between the United States and partner countries to convert as-sumptions or responsibilities into firm, binding commitments;

• Periodic updates of Joint Requirements and Implementation Plans (JRIP) that define mu-tually acknowledged and agreed upon requirements, assumptions, major milestones, con-tract approaches, risk assessments, and responsibilities;

• Standardized business processes for development of cost estimates, technical and cost evaluations of contractor proposals, and proactive identification and mitigation of project risks;

• Online management tools for tracking the status of key cost, schedule, and technical per-formance parameters; key project risks; and contract data submissions by contractors;

• Prohibition of transferring assistance to entities not specifically designated in applicable agreements without written U.S. approval;

• In-house project management and business process training for all CTR Program U.S.

Government employees and Advisory and Assistance contract personnel; and

• Compliance with the Defense Acquisition Workforce Improvement Act enabling all per-sonnel to attend Defense Acquisition University and attain appropriate certifications.

Enhancing the Efficiency and Effectiveness of the Program

The FY 2002 NDAA directs DoD to describe the means used to ensure that assistance is fully accounted for, used for intended purposes, and used efficiently and effectively. In FY 2008, 183 management trips were made to develop requirements; negotiate agreements, arrangements, and contracts; monitor contractor performance; resolve program concerns; and verify that the assistance provided was used efficiently and effectively for intended purposes.

On-site managers, U.S. representatives, and U.S. contractors regularly submit project status re-ports. Site visits by the CTR Integrated Services contractor, Raytheon Technical Services Company, LLC (RTSC), to maintain equipment and oversee the transfer of custody process pro-vides additional verification. In FY 2008, on-site CTR Integrated Services teams made 56 visits to project locations and performed 182 maintenance actions. The teams reported that all equip-ment was available for use and no misuse of assistance was evident. Figure 2 details account-ability actions.

Other means include:

• Executive Reviews that enable joint evaluation of assistance, project assumptions, and objectives; clarification of each party’s responsibilities; and adjustment of program plans to ensure that U.S national security interests and resources are protected. Executive Reviews of major programs in Russia were conducted with the four Russian CTR execu-tive agents: Federal Space Agency (FSA), Ministry of Defense (MOD), State Atomic Energy Corporation (SAEC), and the Ministry for Industry and Trade (MI&T). An Executive Review was held with the Ministry of Defense in Ukraine. Executive Reviews were conducted with executive agents of WMD-PPI projects in Azerbaijan and Ukraine and of Biological Threat Reduction (BTR) projects in Azerbaijan, Georgia, Kazakhstan, Ukraine, and Uzbekistan.

• Coordination with the Departments of State, Justice, Agriculture, Health and Human Ser-vices, Energy, and Homeland Security; agencies of Canada, the United Kingdom (UK), other Group of Eight countries, donor nations of the Global Partnership; and the Euro-pean Union to maximize leverage with partner countries and avoid duplication of effort.

• A rigorous requirements review process that translates initial policy guidance into opera-tional requirements before developing an acquisition strategy.

• Incremental development of WMD-PPI and BTR projects that enables DoD to manage risks more effectively, implement projects in phases, field demonstrated capabilities in manageable pieces, and rapidly insert new technologies and capabilities.

• Integrated Product Teams to improve project management. These teams make key pro-ject decisions, manage risks, and resolve issues.

• Milestone Decision Authorities to provide senior-level oversight and management con-trols for each project. They approve acquisition and implementation strategies; resource allocation; program plans; and cost, schedule, and performance baselines.

• On-site project managers where investment is expected to exceed $50 million. A major responsibility is to develop and monitor progress on a list of activities critical to achiev-ing the project’s goals. There are on-site managers for Strategic Offensive Arms Elimi-nation projects; the nuclear weapons Automated Inventory Control and Management

System (AICMS) project; the Chemical Weapons Destruction Facility (CWDF) project in Russia; and for BTR projects in Azerbaijan, Georgia, Kazakhstan, Russia, Ukraine, and Uzbekistan.

• An Earned Value Management System to monitor contractor performance, schedule, and cost efficiency.

• A formal risk management program that provides guidance, processes, training, and sup-porting tools to identify and mitigate technical, cost, and schedule risks for projects.

• A Key Performance Parameter Tracker Tool that captures project cost, schedule, and per-formance parameters, enabling managers at all levels to track project status.

• Increased emphasis on systems engineering to balance system solutions with project cost, schedule, and performance parameters throughout the life cycle. A systems engineering toolkit and training materials were developed to ensure consistent use.

• The CTR Program’s annual targets as performance measures.

Calendar Year 2008 2009 2010 WMD Means of Delivery Elimination 140 158 188 Cumulative Eliminations 3,674 3,832 4,020

New Railcars to Transport Nuclear Weapons 19 18 18 Cumulative Railcar Deliveries 29 47 65

Nuclear Weapons Site Security Upgrades 8 Cumulative Upgrades 24

Biological Zonal Diagnostic Laboratories 7 15 9 Cumulative 19 34 43

CTR PROGRAM PERFORMANCE MEASURES ANNUAL TARGETS

Compliance and Accounting Concerns

CTR assistance is fully accounted for and is being used efficiently and effectively for its intended purpose. The Mayak Fissile Material Storage Facility (FMSF) was completed and turned over to Russia in December 2003, and Russia announced that it had commenced loading in July 2006. The Department of State has assumed responsibility for negotiating a legal frame-work, separate Liability Agreement, and Transparency Protocol that would enable monitoring of the stored material, increasing confidence that only fissile material with agreed attributes of weapons-grade plutonium or enriched uranium is stored at the FMSF. No DoD funds are expended to support these negotiations. Other prior year concerns are detailed in the BTR narrative (6).

Program Activities and Assistance – Includes FY 2010 Implementation Plan and FY 2008 Accounting Activities

Section 1308 Requirements (as amended) Addressed

The Floyd D. Spence NDAA for FY 2001 requires the Secretary of Defense to submit an annual report to Congress on CTR activities. The FY 2010 Annual Report is submitted in accor-dance with Section 1308 of that Act as amended by Sections 1307 and 1309 of the FY 2002 NDAA, Section 1304 of the FY 2003 NDAA, and Section 1304 of the FY 2005 NDAA. It in-cludes the FY 2008 requirement for “Accounting for CTR Program Assistance to States of the Former Soviet Union.” The “Five-Year CTR Program Implementation Plan” only includes FY 2010 since the Administration has not completed a program and budget review for FY 2011– FY 2015. The following legislative requirements are addressed:

“(1) An estimate of the total amount that will be required to be expended by the United States in order to achieve the objectives of the Cooperative Threat Reduction programs. (See Introduction )

(2) A five-year plan setting forth the amount of funds and other resources proposed to be provided by the United States for Cooperative Threat Reduction programs over the term of the plan, including the purpose for which such funds and resources will be used, and to provide guidance for the preparation of annual budget submissions with respect to Cooperative Threat Reduction programs. (See project descriptions and Figure 4)

(3) financial commitments for FY 2009 from the international community and from Russia for the Chemi-cal Weapons Destruction Facility located at Shchuch’ye, Russia (See Appendix B);

(4) a description of CTR defense and military contact activities carried out during the fiscal year preced-ing the year of the report (See Defense and Military Contacts project narrative and Figure 3);

(5) a descriptive summary, with respect to the appropriations requested for Cooperative Threat Reduction programs for the fiscal year after the fiscal year in which the summary is submitted, of the amounts requested for each project category under each Cooperative Threat Reduction program element (See project descriptions that fol-low); and

(6) descriptive summary, with respect to appropriations for Cooperative Threat Reduction programs for the fiscal year in which the list is submitted and the previous fiscal year, of the amounts obligated or expended, or planned to be obligated or expended, for each project category under each Cooperative Threat Reduction program element (See Figure 4).

(7) current description of the tactical nuclear weapons arsenal of Russia (will be submitted under separate cover).

(8) a description of how revenue generated by CTR activities in recipient states is being utilized, moni-tored, and accounted for (See SLBM Launcher Elimination/SSBN Dismantlement project narrative);

(9) A description of the Cooperative Threat Reduction activities carried out during the fiscal year ending in the year preceding the year of the report, including –

(A) the amounts notified, obligated, and expended for such activities and the purposes for which such amounts were notified, obligated, and expended for such fiscal year and cumulatively for Coop-erative Threat Reduction programs (See project descriptions that follow and Figure 3);

(B) a description of the participation, if any, of each department and agency of the United States Government in such activities (See project descriptions that follow);

(C) a description of such activities, including the forms of assistance provided (See project descrip-tions that follow);

(D) a description of the United States private sector participation in the portion of such activities that were supported by the obligation and expenditure of funds for Cooperative Threat Reduction pro-grams (See project descriptions that follow);

(E) such other information as the Secretary of Defense considers appropriate to inform Congress fully of the operation of Cooperative Threat Reduction programs and activities, including with respect to proposed demilitarization or conversion projects, information on the progress toward demilita-rization of facilities and the conversion of the demilitarized facilities to civilian activities (See pro-ject descriptions that follow);

(10)) “A description of the means (including program management, audits, examinations and other means) used by the United States during the fiscal year ending in the year preceding the year of the report to ensure that assistance provided under Cooperative Threat Reduction Programs is fully accounted for, that such assistance is being used for its intended purpose, and that such assistance is being used efficiently and effectively, including:

(A) if such assistance consisted of equipment, a description of the current location of such equipment and the current condition of such equipment (If the current condition or use of DoD provided equipment is compromised, it is included as an item of concern. A list of locations and values of equipment is maintained at the Defense Threat Reduction Agency and is immediately available for review.);

(B) if such assistance consisted of contracts or other services, a description of the status of such con-tracts or services and the methods used to ensure that such contracts and services are being used for their intended purpose (See project narratives for descriptions of services and their status.

Methods used to ensure contracts or services are used for their intended purpose are described in the Introduction, and specific actions are described throughout this report.);

(C) a determination whether the assistance described in subparagraphs (A) and (B) has been used for its intended purpose and an assessment of whether the assistance being provided is being used effectively and efficiently (See Compliance and Accounting Concerns in the Introduction and the follow-up to prior year concerns in the project narratives.); and

(D) description of the efforts planned to be carried out during the fiscal year beginning in the year of the report to ensure that Cooperative Threat Reduction assistance provided during such fiscal year is fully accounted for and is used for its intended purpose. (FY 2008 A&Es are detailed in the project narratives. A schedule of future audits is in the A&E project narrative. The means detailed in the Introduction will continue to enhance the Effectiveness and Efficiency of the Program.)”

Format

The Implementation Plan and Accounting for Assistance Report is organized by program areas and project categories (referred to as programs and projects). The narratives include a summary of Executive Reviews held in FY 2008; any significant concerns; the FY 2010 Plan, Purpose, and Resources (which includes resources and activities for FY 2009); a Description of Activities Carried Out in FY 2008; and information on A&Es. All activities and assistance are planned or provided for by DoD unless specified otherwise. Figure 2 summarizes activities con-ducted to ensure that assistance is used effectively and efficiently for its intended purposes; para-graph references are to program areas and project categories unless the activity was completed and is not in the FY 2010 Plan. Figure 3 provides the amounts notified, obligated, and expended for CTR activities in FY 2008 and cumulatively for the CTR Program. Figure 4 identifies pro-posed funding through FY 2010. Figure 5 provides a summary of funding by objective and Figure 6 identifies project funding by country.

1. Strategic Offensive Arms Elimination

DoD supports destruction of Russia’s strategic weapons delivery systems and associated infrastructure in accordance with applicable Strategic Arms Reduction Treaty (START) provi-sions, including the START Conversion or Elimination Protocol. This assistance remains an incentive for Russia to draw down its Soviet-legacy nuclear forces and reduces opportunities for their proliferation or use. Equipment and services are provided to destroy or dismantle intercon-tinental ballistic missiles (ICBMs), ICBM silo launchers, road-mobile launchers, submarine-launched ballistic missiles (SLBMs), SLBM launchers, nuclear reactor cores of strategic nuclear-powered ballistic missile submarines (SSBNs), and WMD infrastructure.

Executive Reviews: DoD held two Executive Reviews with FSA (executive agent for destruction of strategic systems other than SSBNs) and SAEC (executive agent for SSBN destruction) in conjunction with Integrated Program Management Reviews. The reviews with FSA updated the JRIP and reviewed assumptions, responsibilities, risks, and schedules. Partici-pants discussed decommissioning and elimination plans for 2008 and 2009, completion of the SS-24 elimination project, results of Russian-funded open detonation testing to support elimina-tion of solid rocket motors (SRMs), construction and use of a high-risk SRM burn stand, alloca-tion of SS-25 SRMs between the two burn stand locations, and status of the SS-N-20 SLBM eliminations. Additional topics included the criteria and scope of DoD assistance when SS-18/19 silos are dismantled vice eliminated, FSA’s agreement to assume responsibilities for demilitari-zation of SS-25 support vehicles, and maintenance of emergency response equipment in 2010.

The reviews with SAEC addressed the Russian government reorganization that estab-lished the SAEC; delineation of responsibility among the United States, Canada, and Russia to dismantle SSBNs; dismantlement schedule for Typhoon- and Delta III-class submarines; and the lack of Russian funding to complete their portion of near-term dismantlement activities.

1.1. Solid Propellant ICBM/SLBM and Mobile Launcher Elimination - Russia

FY 2010 Plan, Purpose, and Resources: DoD will eliminate SS-N-20 SLBMs, SS-25 road-mobile launchers, and SS-25 ICBMs. Plans include decommissioning SS-25 Strategic Rocket Forces regiments. Russia will be responsible for demilitarization of support vehicles after December 2009.

Description of Activities Carried Out in FY 2008: Washington Group International, Inc.

eliminated the last six SS-24 missiles, and DoD closed out the SS-24 elimination project. RTSC decommissioned 2 SS-25 regiments, eliminated 38 ICBMs and the elements of 8 additional SS- 25 missiles, eliminated 27 SS-25 road-mobile launchers, and demilitarized 92 launch-associated SS-25 support vehicles. DoD disassembled and eliminated four SS-N-20 missiles.

A&E: DoD conducted an A&E of the SS-25 ICBM SRM burn and storage operations at Perm, Russia in September 2008. The team’s focus was to determine the ability of the facility to conduct SS-25 SRM burn operations and assess the readiness of equipment planned for transfer from the completed SS-24 project to the SS-25 project. The A&E team concluded that the Perm facility met safety and environmental requirements for SS-25 SRM burn operations. The team was satisfied with the ability of Perm to conduct SS-25 SRM eliminations, the condition of the equipment, and the commitment of Russia not to use the vacant SS-24 ICBM elimination and storage buildings for any other purposes.

1.2. Liquid Propellant ICBM/SLBM Missile and Silo Elimination - Russia

FY 2010 Plan, Purpose, and Resources: This project dismantles and eliminates SS-18 and SS-19 ICBM silos and destroys SS-18 and SS-19 ICBMs and SS-N-18 SLBMs.

Description of Activities Carried Out in FY 2008: DoD eliminated 1 SS-18 ICBM and 17 SS-19 ICBMs. In addition, Russia eliminated 12 SS-N-23 SLBMs using CTR-provided equipment. DoD dismantled 7 SS-18 silos and 21 SS-19 silos and eliminated 11 SS-19 silos.

1.3. SLBM Launcher Elimination/SSBN Dismantlement - Russia

FY 2010 Plan, Purpose, and Resources: DoD plans to eliminate SLBM launchers and dismantle Delta III-class and Typhoon-class SSBNs. Russia is responsible for completing dis-mantlement of the bow, sail, and stern sections and transport of spent nuclear fuel to interim storage. DoD provides SSBN towing, SLBM launcher elimination, launcher-compartment dis-mantlement, spent naval fuel removal, and sectioning and preparation of reactor core compart-ments for storage afloat. As individual SSBNs are released, DoD will discuss with Canada whether it will support reactor defueling as it did for Typhoon 724 as well as support for other dismantlement activities.

Description of Activities Carried Out in FY 2008: Dismantlement of Typhoon 713 was completed, and elimination of the SLBM launchers on Typhoon 724 was initiated.

Report of Use of Revenue Generated by Activities Carried Out under CTR Programs:

The Zvezdochka shipyard finished dismantling SSBN Typhoon 713 in July 2008. The shipyard reported that 14,390 tons of metal scrap generated approximately $3.8 million. SAEC’s January 2007 report stated that, “in accordance with Russian legislation, funds received from the sale of materials recovered from dismantled nuclear submarines are deposited into an account specifi-cally for these proceeds” and “can be used only for tasks related to dismantling nuclear submarines.” The report states that these funds finance work not performed with DoD money, including pre-sale preparation of scrap, formation of reactor blocks from nuclear submarines, towing of reactor blocks, handling of spent naval fuel, and related tasks.

2. Strategic Nuclear Arms Elimination

DoD supports the safe storage of 160 SRMs from dismantled SS-24 ICBMs and provides funding for empty motor cases after the propellant is removed by Ukraine.

Executive Review: The Executive Review resulted in agreement on the JRIP and reviewed assumptions, responsibilities, risks, and schedules. Participants discussed Ukraine’s efforts to complete the water washout facility and begin SRM washout operations.

2.1. SS-24 Missile Disassembly, Storage, and Elimination - Ukraine

FY 2010 Plan, Purpose, and Resources: DoD will support environmentally controlled, safe storage of the remaining 160 SRMs, movement of SRMs within and between storage areas, and elimination of empty motor cases. Ukraine will finance construction and operation of a full-scale water washout facility to remove and eliminate the propellant from the 160 SRMs. DoD will provide fixed-fee payments for the empty motor cases.

Description of Activities Carried Out in FY 2008: Washington Group International sup-ported the safe storage of 160 SRMs and paid for 3 empty (water washed-out) motor cases.

3. Chemical Weapons Destruction

DoD is assisting Russia with safe, secure, and environmentally sound destruction of the portion of its chemical weapons nerve-agent stockpile most vulnerable to proliferation. The Shchuch’ye CWDF project supports this effort. In May 2007, DoD and the Russian Federal Agency for Industry agreed to a trilateral acquisition strategy by which prior year funds would be provided, through a U.S. contracted agent, to Russian contractors to complete the facility to destroy organophosphorus (nerve) agent-filled munitions. This arrangement is codified in the Joint Arrangement between the Department of Defense of the United States of America and the Federal Agency for Industry Concerning the Completion of Construction of the Russian Chemical Weapons Destruction Facility Shchuch’ye Area, Kurgan Region. Russia recently replaced the Federal Agency for Industry with MI&T as the executive agent for chemical weapons elimination.

Executive Reviews: Two Executive Reviews with MI&T focused on the status of im-plementing the trilateral agreement, the status of U.S. oversight activities, construction progress, and mitigation of risks associated with transitioning from U.S. oversight to Russian operations.

A&E: In March 2008, an A&E was conducted at Russia’s Planovy chemical weapons storage facility. The team inspected equipment and observed operational demonstrations of the perimeter fence and associated lighting, anti-ram barrier, back-up generator, security sensors, closed-circuit televisions, and mini chemical agent monitors throughout the facility. All equip-ment appeared to be in good working order, and personnel effectively demonstrated operator knowledge.

3.1. Chemical Weapons Destruction Facility - Russia

FY 2010 Plan, Purpose, and Resources: With FY 2008 and prior year funds, DoD will oversee MI&T’s completion of CWDF construction at Shchuch’ye and verify work completed during site visits. Parsons Global Services, Inc. will manage the invoicing and payment process through their designated agent, Vneshstroyimports. In-country program management staff includes individuals from the Defense Threat Reduction Agency, the U.S. Army Corps of Engineers, and Parsons.

Description of Activities Carried Out in FY 2008: Parsons completed the boiler house construction and process line and supporting equipment procurements. DoD validated work valued at more than $150 million that was completed by the MI&T Russian contractors.

4. Nuclear Weapons Storage Security

This program supports proliferation prevention by enhancing the security systems of nuclear weapons storage sites using mutually agreed intrusion detection standards as a basis for design. For nuclear weapons storage sites in Russia, DoD is authorized to make three visits to each site where security upgrades are being installed. These visits occur at initiation of site up-grade to verify the vulnerability assessment, at approximately the 50 percent completion point, and following site acceptance to verify that security systems are installed and functioning as required. In addition to the site visits, DoD is allowed to audit equipment through alternative means, including data on locations of equipment, in situ photographs, documentation, examina-tion of sample equipment, and MOD letters attesting that equipment is being used as intended.

Executive Reviews: Two Executive Reviews in conjunction with Program Management Reviews were held with MOD, Russia’s executive agent responsible for security of nuclear wea-pons in storage and during transport. Agenda items included amendments to all implementing agreements and storage and transportation security assumptions and responsibilities. The major implementation issues addressed were progress of each project listed in the JRIP, barriers to completing security enhancements, and the Far East Training Center work schedule. The status of the AICMS project and Nuclear Weapons Transportation Security was also discussed.

4.1. Site Security Enhancements – Russia

FY 2010 Plan, Purpose, and Resources: This project in coordination with DOE is com-pleting a set of regional training and logistics centers and developing a cadre of MOD personnel to operate, maintain, and support the security system upgrades. It also sustains security en-hancements at five MOD temporary nuclear weapons storage sites (rail transfer points) con-trolled by Russia’s 12th Main Directorate, the personnel reliability program, and the small arms training system previously provided to MOD. Sustainment includes maintenance, spares, and training. Under the Bratislava Nuclear Security Initiative, DoD and DOE accelerated completion of nuclear security work and enhanced security systems at all requested locations that store stra-tegic, non-strategic, or tactical nuclear weapons, including those waiting to be eliminated. DoD upgraded its 24 sites by December 31, 2008 with prior-year funds.

Description of Activities Carried Out in FY 2008: RTSC completed upgrades at six sites (two rail transfer points and four small permanent nuclear weapons storage sites) and continued upgrades at six additional sites (three small and three large permanent nuclear weapons storage sites). In addition, RTSC commenced sustainment for three rail transport points and the Security Assessment and Training Center. Forty armored transport vehicles were procured and delivered.

4.2. Far East Training Center – Russia

FY 2010 Plan, Purpose, and Resources: This project will establish a Far East Training Center in FY 2009 with FY 2008 and prior year funds. The Training Center will support the operators, maintainers, and system administrators of upgraded physical security equipment and be a regional depot-level maintenance facility for security equipment.

Description of Activities Carried Out in FY 2008: The majority of building construction and infrastructure enhancements (heating and power) was completed.

4.3. Automated Inventory Control and Management System – Russia

FY 2010 Plan, Purpose, and Resources: Using FY 2008 and prior year funds, this project will enhance the automated inventory system for tracking and cataloging of nuclear weapons to be eliminated. It will construct new AICMS facilities at 13 additional sites and provide a techno-logical refresh of the hardware and software for the existing 20 automated inventory systems, a one-year warranty for hardware and software for all 33 systems, and new system training. This project will be completed in FY 2009.

Description of Activities Carried Out in FY 2008: Black and Veatch Special Projects Corporation (BVSPC) completed construction of 3 of 13 new facilities and the technological refresh of the hardware and software at 15 of 20 existing facilities. BVSPC completed software development and demonstrated interoperability of AICMS software databases.

5. Nuclear Weapons Transportation Security

This program supports proliferation prevention by enhancing the security and safety of nuclear weapons during shipment.

5.1. Nuclear Weapons Transportation – Russia

FY 2010 Plan, Purpose, and Resources: This project assists MOD in shipping nuclear warheads to dismantlement locations or more secure storage sites pending dismantlement. It complies with U.S. policy against assisting modernization of Russia’s strategic forces and sup-ports nonproliferation by ensuring that nuclear warheads are transported from operational sites to dismantlement facilities or storage sites and from storage sites to dismantlement facilities.

Shipments average four per month and will continue through 2012.

Description of Activities Carried Out in FY 2008: RTSC supported 45 train shipments.

5.2. Railcar Maintenance and Procurement – Russia

FY 2010 Plan, Purpose, and Resources: This project will procure up to 100 heated cargo railcars to replace existing railcars at the end of their service life. MOD will destroy two old cargo railcars for each new railcar built. Oak Ridge National Laboratory will manage procure-ment of the railcars and the Railcar Consist Security System (RCSS). DoD will procure satellite transmitters and antennas for 15 DoD-provided railcars as components of an off-train communi-cations system. The satellite communication supports a near real-time capability to monitor location and alarm-system status from the MOD headquarters facility. This project also supports depot- and capital-level maintenance for the cargo railcars to ensure compliance with Russian railway certification requirements.

Description of Activities Carried Out in FY 2008: RTSC provided scheduled mainte-nance on 101 cargo railcars. The prototype RCSS was demonstrated and accepted. Vendors were selected to produce the satellite communication system and to integrate the off-train com-munication elements with the cargo cars and RCSS. The first 19 cargo railcars with RCSS installed were delivered, and production of the next 23 cargo railcars began. The destruction of 38 old cargo cars was verified.

6. Biological Threat Reduction

The program objectives are to prevent proliferation of BW-related materials, technolo-gies, and expertise and to combat bioterrorism. DoD establishes disease baselines to determine especially dangerous pathogen prevalence; enhances partner countries’ capacity to consolidate and secure dangerous pathogen collections into safe, secure national-level laboratories and to detect, diagnose, and report bioterror attacks and potential pandemics; improves the safety and security of biological facilities involved in threat agent detection and response and research ef-forts; engages scientists with BW-related expertise in mutually beneficial research; and destroys former BW facilities and related infrastructure. This program promotes sustained transparency and the formation of strategic partnerships in the war on bioterrorism.

DoD has implementing agreements for the BTR program with Azerbaijan, Georgia, Kazakhstan, Ukraine, and Uzbekistan and is negotiating one with Armenia. The International Science and Technology (ISTC) Agreement and the ISTC Funding Memorandum of Agreement govern all BTR efforts in Russia. Bechtel National, Inc., RTSC, and BVSPC are the integrating contractors for all BTR projects. DoD contracts with Bechtel National, Inc. for work in

Azerbaijan, Georgia, Kazakhstan, and Uzbekistan and with RTSC for work in Azerbaijan, Russia, and Ukraine. In July 2008, DoD established a contract with BVSPC for work in Ukraine. BTR develops a Country Science Plan and Threat Agent Detection and Response con-cept of operations for each partner country to harmonize the BTR mission, existing projects, and research agenda. The plans are reviewed to determine which elements are eligible for DoD assistance and which elements the partner country or other sources must fund. The plans are periodically updated to reflect changing research needs.

DoD efforts are coordinated with other U. S. Government agencies, partner governments, and international programs to maximize biological threat reduction resources. DoD works to create in-country working groups that establish strong lines of communication with other organi-zations working on similar issues, including the Departments of State, Agriculture, and Health and Human Services, U.S. Agency for International Development, World Health Organization, World Bank, Japan International Cooperation Agency, Rostropovich-Vishnevskaya Foundation, Food and Agriculture Organization of the United Nations, Ministry of Defense of the United Kingdom, Canadian Global Partnership Program, ISTC, and Science and Technology Center in Ukraine.

BTR facilitates international scientific collaboration on specific projects to ensure high quality research, establish long-term sustainable working relationships, and leverage available resources. U.S. collaborators, who work with the partner scientists on site, include the Depart-ment of Agriculture, Centers for Disease Control and Prevention, Walter Reed Army Institute of Research, Naval Medical Research Center, U.S. Army Medical Research Institute of Infectious Diseases, Armed Forces Research Institute of Medical Sciences, Armed Forces Institute of Pathology, Naval Medical Research Unit-3, and academic collaborators from Louisiana State University, New Mexico State University, Arizona State University, University of Maryland, Pennsylvania State University, University of Florida, and Texas A&M University.

Executive Reviews: Executive Reviews were held in Azerbaijan, Georgia, Kazakhstan Ukraine, and Uzbekistan. Each occurred in conjunction with a Program Management Review where implementation issues were discussed.

The Executive Review in Azerbaijan addressed staffing plan updates and compensation and retention issues of BTR-trained personnel. Another key topic was developing warehousing and distribution capability for BTR equipment, materials, and supplies. Development of a de-tailed Construction Management and Oversight Plan for the Azerbaijan-financed Central Refer-ence Laboratory (CRL) and a plan for financial support of operations and sustainment after U.S.

Government assistance ends also were discussed. Topics discussed with Georgia included man-agement planning and staffing for the CRL and planning for Test and Evaluation of the Interim Operational Capability of the Threat Agent Detection and Response system. In Ukraine, topics included engagement of newly added veterinary executive agents, impacts of poor structural conditions and site permitting delays at the interim human health CRL, site selection for the permanent human CRL, and pathogen consolidation. The major topic in Uzbekistan was nego-tiation of the implementing arrangement under the CTR Umbrella Agreement. The Kazakhstan Executive Review addressed the ongoing need for Kazakhstan to provide value added tax (VAT) exemption and ratify the December 13, 2007, extension amendment of the CTR Umbrella Agreement.

Unresolved Prior Year Concern: Russia continues to defer entering into an agreement on biological threat reduction. BTR implementation is under a Memorandum of Agreement be-tween the United States and the ISTC, which provides the necessary protections, exemptions, and A&E rights. DoD limits its engagement to the continuation of smallpox research and select biosecurity and biosafety projects, but the smallpox projects remain stalled due to lack of Russian Ministry of Health’s approval. DoD continues to receive good cooperation at the scien-tific level and from the Ministry of Agriculture. Thus, DoD is exploring ways to further its part-nership with the Ministry of Agriculture in biosecurity and disease surveillance and will continue to seek opportunities for joint efforts to reduce biological threats.

Unresolved Prior Year Concern: In July 2005, DoD raised the concern that some funding provided to the ISTC for Russian projects was subject to VAT. In April 2007, a joint decree by Russia’s Ministries of Foreign Affairs and Finance listed legal entities including ISTC eligible for zero VAT rate. The ISTC is assessing how to apply for retroactive reimbursements back to January 2001.

Unresolved Prior Year Concern: Kazakhstan did not grant the guaranteed exemptions in the CTR Umbrella Agreement, especially to assistance provided under the BTR program. How-ever, on December 13, 2007, the two governments added language to the CTR Umbrella Agree-ment via amendment to facilitate Kazakhstan’s ability to guarantee such exemptions. On October 15, 2008, the President of Kazakhstan formally accepted the December 13, 2007, exten-sion amendment, and the two governments are working to ensure exemptions are provided.

6.1. Biosecurity, Biosafety, Threat Agent Detection and Response

FY 2010 Plan, Purpose, and Resources: Through this project, DoD and partner countries consolidate and secure collections of dangerous pathogens and are developing a network of disease surveillance and diagnostic laboratories at the national, regional, and district levels that are linked with an Electronic Integrated Disease Surveillance System to facilitate rapid reporting of outbreak data to national authorities and U.S. Government counterparts. These systems facili-tate countries meeting their commitments to comply with the World Health Organization and the World Organization for Animal Health requirements to report disease outbreaks within 24 hours.

A second electronic database, the Pathogen Asset Control System, inventories and controls access to pathogens. Eventually, partner countries’ networks will link with regional partners to enhance disease monitoring, reporting, and containment and ensure early warning of potential bioattacks and pandemics. DoD, working with the Centers for Disease Control and Prevention and DoD laboratories, conducts training to improve diagnostic and epidemiological capabilities of the scientific and technical staff; promote bioethics, biosafety, and biosecurity; and emphasize sustainment, effectiveness, program investment, and strategic relevance.

This project develops national-level laboratories with state-of-the-art diagnostic capabili-ties, research resources, and modern communications. These laboratories support existing na-tional response teams with enhanced diagnostic and epidemiological capacity for rapid response to infectious disease outbreaks. The national-level laboratories also support veterinarians and clinicians who conduct population-based surveillance in areas where especially dangerous pathogen cases may occur. The regional level Zonal Diagnostic Laboratories (ZDLs) have the capability to survey suspicious disease outbreaks, analyze epidemics, and collect disease reports from veterinarians, clinicians, and epidemiologists.

Description of Activities Carried Out in FY 2008: In Russia, DoD provided technical oversight for biosecurity and biosafety upgrades at Golitsino, Pokrov, Vector, Kazan, and…