Project Blue was a scientific project involving biological weaponry. They worked with a virus the United States Army called A-Prime Flu, which the public later called Captain Trips or Superflu. One of their research facilities was located in the desert in California.
Project Blue was the source of the superflu virus nicknamed "Captain Trips," and inadequate security measures enabled Charles Campion to escape the California research facility where the virus was created.
"The Shop" was brought in to handle things after much delay as the U.S. Army and FBI argued over who was supposed to deal with the problem, and whether to tell and what to tell state and local police and authorities. The federal government threw its weight behind lying to the public about the existence of the virus while also trying to stop its spread. All of these efforts ended in total failure.
According to General William Starkey, Project Blue remained without any spies or infiltrators until the very end. To help ensure the source of the virus was never known, Starkey ordered agents behind "both curtains, Iron and bamboo" to release what they had been told were vials of harmless radioactive particles to be tracked by weather satellites. This both guaranteed no foreign government could be sure the Americans had created the superflu and all but doomed the human race.