-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO/RCED-97-42		

TITLE:     FEDERAL FACILITIES: EPAï¿½s Penalties for Hazardous Waste Violations

DATE:   02/28/1997
				                                                                         
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United States General Accounting Office 

Report to the Chairman, Committee onGAO Appropriations, U.S. Senate 

February 1997 

FEDERAL FACILITIES 

EPAï¿½s Penalties for 
Hazardous Waste 
Violations 


GAO/RCED-97-42



GAO United States 
General Accounting Office 
Washington, D.C. 20548 

Resources, Community, and 
Economic Development Division 

B-275734 

February 28, 1997 

The Honorable Ted Stevens 
Chairman, Committee on Appropriations 
United States Senate 

Dear Mr. Chairman: 

The Environmental Protection Agency (EPA) imposes penalties on other 
federal agencies for violations under the Resource Conservation and 
Recovery Act (RCRA) of 1976 and the Comprehensive Environmental 
Response, Compensation, and Liability Act (CERCLA) of 1980. RCRA controls 
the management and disposal of hazardous wastes. CERCLA, also known as 
Superfund, governs the cleanup of sites contaminated by hazardous 
substances. 

If EPA penalizes federal agencies for a violation, they may challenge the 
assessed penalty under EPAï¿½s dispute resolution procedures. The penalty 
may be upheld, reduced, or eliminated entirely. Agencies may propose 
projects to benefit the environment as part of the settlement. In some 
cases, these ï¿½supplemental environmental projectsï¿½ may increase the final 
settlement amount above EPAï¿½s original assessment. 

Because of your interest in knowing the frequency of penalties and the 
costs of settling their final amount, you asked us to determine (1) the 
number and dollar amount of penalties assessed by EPA against other 
federal agencies for violations under RCRA and CERCLA and (2) for selected 
cases, the costs associated with negotiating the final amount of the 
penalty. 

Results in Brief From November 1989 through October 1996, EPA assessed penalties in 61 
cases totaling $16.4 million against federal agencies for violating the 
hazardous waste management and cleanup provisions of RCRA and CERCLA. 
Penalties were assessed against the Departments of Agriculture, Defense, 
Energy, and the Interior and the U.S. Coast Guard. Forty-one cases having 
EPA-assessed penalties of $8.2 million were settled for $8.4 million, 
including the value of supplemental environmental projects. Agencies 
made settlement through direct cash payments of $2.4 million and also by 
agreeing to perform supplemental environmental projects costing about 
$6 million. Twenty cases with assessed penalties of $8.2 million are still 
being negotiated, and final settlements have not been determined. 

Page 1 GAO/RCED-97-42 Hazardous Waste Violations 


B-275734 

We reviewed three settled cases that had EPA-assessed penalties of 
$6 million against the Departments of Defense and Energy, which 
represented more than a third of the value of all the assessed penalties. 
After negotiationsï¿½which lasted from 7 to 20 monthsï¿½were finalized, 
these cases were settled for $3.7 million. One case involving a Navy facility 
was finally settled for $125,000 more than the assessed penalty because of 
two supplemental environmental projects. EPA and the Departments of 
Defense and Energy incurred about $364,000 in salaries, travel costs, and 
other costs to negotiate these three settlements. Because each case has its 
own unique attributes, we cannot say whether these costs would be 
typical for all cases. We did note that for the most part, the settlement 
costs reflect the number of personnel assigned to a case and the time they 
devote to its resolution. 

RCRA, as amended by the Federal Facility Compliance Act of 1992, and

Background CERCLA are the primary statutes that impose hazardous waste management 
and cleanup obligations on federal agencies and that allow the imposition 
of penalties. EPA has established administrative procedures for appeals of 
RCRA penalties and dispute resolution procedures for CERCLA penalties 
assessed against agencies. 

Enforcement Under RCRA RCRA authorizes EPA to regulate the generation, treatment, storage, and 
disposal of hazardous waste. Regulation is achieved largely through the 
issuance of permits by EPA or states authorized by EPA to engage in 
hazardous waste activities. These permits specify the terms and conditions 
under which the activities must be carried out. For example, federal 
facilities that handle RCRA-regulated waste must comply with 
record-keeping, reporting, labeling, treatment, storage, and disposal 
requirements. In fiscal year 1994, the latest year for which data were 
available, 2,580 federal RCRA facilities existed. 

EPAï¿½s RCRA enforcement actions include formal and informal actions. 
Formal actions, such as EPA orders, may impose a penalty on the facility 
and require it to take some corrective action within a specified time and 
refrain from certain behavior or require future compliance. An agency may 
request a hearing to challenge the facts alleged in EPAï¿½s complaint or the 
amount of the penalty. 

Informal actions such as notices of violations, notices of noncompliance, 
and warning letters are advisory in nature. They inform the manager of a 

Page 2 GAO/RCED-97-42 Hazardous Waste Violations 


B-275734 

facility of what violation was found, what corrective action should be 
taken, and when the corrective action should be taken. Informal actions 
do not impose penalties or compel action but, if ignored, can lead to more 
severe actions. 

Interagency Agreements CERCLA created the Superfund program to clean up hazardous waste sites 

Under CERCLA that were releasing contaminants into the environment. Federal agencies 
whose properties are on Superfundï¿½s National Priorities Listï¿½the list of 
the nationï¿½s highest priorities for further study and possible 
cleanupï¿½must clean them up under EPAï¿½s oversight. As of November 1996, 
151 federal sites were on the National Priorities List. Section 120 of CERCLA 
provides that an agency must enter into an interagency agreement with EPA 
setting forth a plan for cleaning up each facility on the National Priorities 
List. In most cases, states are also signatories to these cleanup 
agreements. Under these agreements, failing to comply with the terms and 
schedules of the cleanup plan may result in EPA-assessed penalties. 

Penalties RCRA allows EPA to impose penalties of up to $25,000 for each day of 
noncompliance with the actï¿½s provisions. Moreover, the Federal Facility 
Compliance Act authorizes EPA to exercise its RCRA enforcement authority 
over federal agencies. Under the Federal Facility Compliance Act, federal 
facilities are also subject to state fines and enforcement actions. In 
addition, CERCLAï¿½s interagency agreements may contain provisions for 
penalties of up to $5,000 for the first week of a violation and up to $10,000 
for each additional week. The actual penalty levied by EPA under RCRA or 
CERCLA depends on EPAï¿½s judgment about such factors as the severity and 
number of violations, damage sustained, and history of noncompliance. 

Appeals RCRAï¿½s regulations and CERCLAï¿½s agreements set out procedures that 
agencies must follow when challenging an EPA-assessed penalty. The RCRA 
process for contesting an enforcement action by EPA requires an agency to 
respond to EPAï¿½s complaint within 30 days. The agency may also request a 
formal public hearing as part of its response. EPA encourages the informal 
settlement of RCRA disputes at any time during the process. If an agency 
opts for a public hearing, an administrative law judge is appointed to hear 
the matter. The judgeï¿½s decision on the nature and amount of the penalty 
may be appealed to an Environmental Appeals Board and beyond to the 
EPA Administrator. (See app. I for a more detailed discussion of the RCRA 
hearing process.) 

Page 3 GAO/RCED-97-42 Hazardous Waste Violations 


B-275734 

Dispute resolution under CERCLAï¿½s interagency agreements employs two 
layers of committees comprising officials of EPA, the appealing agency, and 
the state when it is party to the agreement. If the initial committee does 
not resolve the dispute within a stipulated time, the dispute is forwarded 
to the next higher committee. If a settlement cannot be reached by either 
of the committees, the dispute is referred to the EPA Administrator for final 
resolution. The agreements also state that all parties should pursue an 
informal resolution at the working level. (See app. II for a more detailed 
summary of CERCLAï¿½s dispute resolution process.) 

Settlements If the final settlement stipulates that the agency must make payment, the 
settlement may take one of two formsï¿½cash only or cash plus a 
supplemental environmental project. EPA defines this project as an 
environmentally beneficial activity that an agency agrees to undertake as 
part of settling the enforcement action. 

A supplemental project imposes a monetary cost on the agency. But 
according to EPAï¿½s policy guidance, the final settlement penalty will usually 
be lower for a violator who agrees to perform an acceptable supplemental 
project compared with the violator who does not. EPA notes that 
supplemental projects can play an additional role in securing 
environmental or public health protection and improvements. Examples 
include efforts to prevent pollution, improve the management of 
hazardous waste, or conduct environmental assessments and audits. Even 
if a supplemental project is undertaken, EPA requires that some amount of 
cash be paid. 

EPAï¿½s Hazardous From November 1989 through October 1996, EPA assessed penalties 
totaling $16.4 million in 61 cases against five federal agencies. The

Waste Penalties at agencies were the Departments of Agriculture, Defense, Energy, and the 

Federal Facilities Interior and the U.S. Coast Guard. Forty-one cases having EPA-assessed 
penalties of $8.2 million were settled for $8.4 million, including the value 
of supplemental environmental projects. Twenty cases with assessed 
penalties of $8.2 million were still being negotiated. Of all 61 penalty cases, 
33 involved violations of CERCLAï¿½s interagency agreements, and 28 involved 
violations under RCRA.1 

1In 3 of the 33 cases, assessed penalties were expressed as an amount per week of violation. No total 
amounts were stated. 

Page 4 GAO/RCED-97-42 Hazardous Waste Violations 


B-275734 
Of the 33 CERCLA cases, 30 were resolved as of October 1996, and 3 were 
still in negotiation. For the resolved cases, assessed penalties of about 
$6.7 million were settled for about $6.3 million. In five of these cases, 
supplemental environmental projects were a significant factor, accounting 
for about $4.5 million in the final settlements. Three CERCLA cases with 
assessed penalties totaling about $600,000 were still being negotiated. 
Of the 28 RCRA cases, 11 were resolved as of October 1996, and 17 were 
still being negotiated. The assessed penalties for the settled cases totaled 
about $1.5 million; they were settled for about $2.2 millionï¿½which was 
more than the assessed amount because, in two cases, the agencies were 
willing to perform higher-valued supplemental environmental projects. EPA 
was still negotiating assessed penalties of about $7.6 million for 17 cases. 
(See table 1.) 
Table 1: Disposition of Cases Where 
EPA Assessed Penalties on Federal 
Agencies Under CERCLA and RCRA, 
as of October 1996 
Final settlement 
Dollars in thousands 
Law Status 
Number 
of cases 
EPA-
assessed 
penaltya Cash 
Supplemental 
environmental 
project Total 
CERCLA Resolved 30 $6,680 $1,747 $4,537 $6,284 
Unresolved 3 595 
Subtotal 33 7,275 
RCRA Resolved 11 1,516 623 1,528 2,151 
Unresolved 17 7,648 
Subtotal 28 9,164 
Total Resolved 41 $8,196 $2,370 $6,065 $8,435 
Unresolved 20 $8,243 
Total 61 $16,439 
aIn three CERCLA cases, assessed penalties were expressed as an amount per week of violation. 
Because no total amounts were calculated, the table does not present assessed penalties for 
these cases. 
Source: GAOï¿½s presentation of EPAï¿½s data. 
CERCLA penalties may be imposed when agencies do not meet the terms 
and conditions of the interagency agreements they signed. For example, 
agencies may be penalized when they do not complete site contamination 
studies, prepare cleanup plans, or undertake required cleanup action 
within the timetables and deadlines called for in the agreements. 
According to EPA officials, penalties are usually not assessed until agencies 
GAO/RCED-97-42 Hazardous Waste Violations Page 5 

B-275734 

fall substantially behind in their commitments. RCRA penalties are generally 
imposed when agencies fail to conform their hazardous waste activities, 
such as waste treatment, storage, or disposal, to the conditions stated in 
their permits. 

We obtained from agency officials their estimates of the costs of

Costs of Resolving negotiating settlements of assessed penalties for (1) CERCLA violations at

Agenciesï¿½ the Armyï¿½s former West Virginia Ordnance Works and Energyï¿½s Rocky 

Environmental Flats Environmental Technology Site and (2) a RCRA violation at the El 
Centro Naval Air Facility. (See apps. III, IV, and V for a more detailed

Disputes With EPA discussion of each case.) The estimates include salaries, fringe benefits 
and other indirect costs, and travel costs. The three cases represented 
about 36 percent of all EPA-assessed CERCLA and RCRA penalties. 

At the West Virginia Ordnance Works, EPA assessed a $2 million penalty on 
the basis of its assertion that the Army missed a deadline for submitting 
draft cleanup studies and did not fully implement a community relations 
plan. The case was settled for $500,000 after a 7-month negotiation 
process. EPA assessed a $3.7 million penalty for Rocky Flatsï¿½ failure to 
meet deadlines for completing cleanup studies set out in the facilityï¿½s 
interagency cleanup agreement. Energy agreed to a $700,000 cash payment 
and two supplemental environmental projects valued at $2.1 million 
following 4 months of informal negotiations. At the El Centro Naval Air 
Facility, EPA assessed a $258,000 RCRA penalty for various hazardous waste 
management violations, including improper storage. The case was settled 
for a $100,000 cash payment and two supplemental projects valued at 
$283,000 after 20 months of informal negotiations. 

According to their estimates, Energy, Defense, and EPA expended about 
$364,000 to settle these three cases. Because each case has its own unique 
attributes, we cannot say whether these costs would be typical for all 
cases. We did note that for the most part, the settlement costs reflect the 
number of personnel assigned to a case and the time they devote to its 
resolution. (See table 2.) 

Page 6 GAO/RCED-97-42 Hazardous Waste Violations 


B-275734 
Dollars in thousands 
assessed 
penalty Cash 
environmental 
project Total 
negotiation 
cost 
Facilities 
Table 2: EPA-Assessed Penalties, Final 
Settlements, and Estimated 
Negotiation Costs for Three Federal 
Facility 
West 
Virginia 
EPA-Supplemental Estimated 
Final settlement 
$500 $0 $500 $175 
Ordnance 
Works 
$2,025 
El Centro 258 
Rocky Flats 3,700 700 2,100 2,800 62 
100 283 383 127 
Total $5,983 $1,300 $2,383 $3,683 $364 
Source: GAOï¿½s analysis of data from EPA, Army, Navy, and Energy. 
Table 3 presents data on the duration of penalty negotiations, the number 
of personnel who worked on the case, and additional details on the costs 
of negotiating a settlement. Salaries constitute the largest portion 
Table 3: Estimated Penalty Negotiation 
Costs, Number of Staff, Hours Worked, 
32 percent, and travel represents the remaining 6 percent. 
(62 percent) of all costs, fringe benefits and other indirect costs constitute 
and Length of Negotiations for Three 
Federal Facilities 
Category 
Number of staff 
West Virginia 
Rocky Flats 
Environmental El Centro 
Facility 
Ordnance 
Works 
Technology 
Site 
Naval Air 
Facility Total 
Negotiation 
period (months) 
Fringe benefits 
and other indirect 
costs 
Hours worked 2,491 1,185 2,732 6,408 
28 25 18 71 
7 4 20 31 
Negotiation costs 
Salaries $117,312 $41,364 $72,221 $230,897 
42,569 16,556 52,243 111,368 
Travel $15,600 $3,575 $2,953 $22,128 
Total $175,481 $61,495 $127,417 $364,393 
Source: GAOï¿½s presentation of data from EPA, Army, Energy, and Navy. 
All three cases were settled at management levels within EPA and the 
penalized agency. The West Virginia Ordnance case was settled by the 
GAO/RCED-97-42 Hazardous Waste Violations Page 7 


B-275734 

Deputy Assistant Secretary of the Army and the acting EPA Region 3 
Administrator; the Rocky Flats case, by the Energy facility manager and 
the Deputy Administrator of EPAï¿½s Region 8; and the El Centro case, by the 
base commanding officer and the hazardous waste division director of 
EPAï¿½s Region 9. 

EPA officials told us that despite the costs of negotiating settlements of 
environmental penalties, the penalties are effective enforcement 
techniques. In their opinion, the unwanted attention that results from EPAï¿½s 
public disclosure of violations and penalties and the possible need for 
agencies to seek special funding to pay them are strong inducements for 
compliance with hazardous waste requirements. 

Agency Comments We provided the Departments of Defense and Energy and EPA with a draft 
of this report for their review and comment. We met with officials of these

and Our Evaluation agencies, including a representative of the Office of the Under Secretary of 
Defense-Environmental Security and the Senior Enforcement Counsel, 
Federal Facilities Enforcement Office, EPA. In addition, we discussed the 
draft with Energy headquarters and Rocky Flats officials from their 
respective Office of General Counsel. 

Overall, the agencies believed that our report was factually accurate. The 
agencies had some concern about the interpretation of some information 
and wanted us to include additional information. We revised our report 
accordingly. In addition, the agencies provided us with editorial and 
technical comments that we incorporated into the report as appropriate. 

To respond to this reportï¿½s objectives, we visited several Defense and 
Energy field installations and reviewed documentation on the processes 
followed and costs incurred in establishing final settlements. We also met 
with officials from EPA, Defense, and Energy headquarters units to review 
data on the overall number and status of assessed penalties. We asked EPA 
and the Departments of Defense and Energy to provide us with their best 
estimates of the costs they incurred to reach settlement. These estimates 
include hours worked, salaries, fringe benefits, other indirect costs, and 
travel. Some of the estimates are based on officialsï¿½ recollections of past 
events. We discussed the estimates provided by the agencies with agency 
officials but did not verify them. 

Page 8 GAO/RCED-97-42 Hazardous Waste Violations 


B-275734 
We reviewed pertinent laws and regulations and examined EPAï¿½s guidance 
on assessing environmental penalties. We conducted our review from 
August 1996 through January 1997 in accordance with generally accepted 
government auditing standards. Appendix VI contains additional 
information on our scope and methodology. 
As arranged with your office, unless you announce its contents earlier, we 
plan no further distribution of this report until 5 days after the date of this 
letter. At that time, we will send copies to the Administrator of EPA and the 
Secretaries of Defense and Energy. We will also make copies available to 
others on request. Please call me at (202) 512-6520 if you or your staff have 
any questions. The major contributors to this report are listed in appendix 
VII. 
Sincerely yours, 
Stanley J. Czerwinski 
Associate Director, Environmental 
Protection Issues 
GAO/RCED-97-42 Hazardous Waste Violations Page 9 

Contents 
Letter 1 
Appendix I 
RCRAï¿½s Penalty 
Resolution Process 
for Federal Facilities 
12 
Public Hearing 12 
Informal Settlement Negotiations 12 
Appendix II 
CERCLAï¿½s Penalty 
Resolution Process 
for Federal Facilities 
13 
Appendix III 
Summary of CERCLA 
Enforcement Action: 
West Virginia 
Ordnance Works 
14 
Appendix IV 
Summary of CERCLA 
Enforcement Action: 
Rocky Flats 
Environmental 
Technology Site 
16 
Appendix V 
Summary of RCRA 
Enforcement Action: 
U.S. Naval Air Facility, 
El Centro 
18 
GAO/RCED-97-42 Hazardous Waste Violations Page 10 

Contents 

Appendix VI 20 
Objectives, Scope, 
and Methodology 

Appendix VII 22 
Major Contributors to 
This Report 

Tables Table 1: Disposition of Cases Where EPA Assessed Penalties on 5 
Federal Agencies Under CERCLA and RCRA, as of October 1996 
Table 2: EPA-Assessed Penalties, Final Settlements, and 7 
Estimated Negotiation Costs for Three Federal Facilities 

Table 3: Estimated Penalty Negotiation Costs, Number of Staff, 7 
Hours Worked, and Length of Negotiations for Three Federal 
Facilities 

Table III.1: Estimated Number of Army and EPA Staff, Hours 15 
Worked, and Costs Involved in Settling Assessed CERCLA 
Penalty at the West Virginia Ordnance Works 

Table IV.1: Estimated Number of EPA and Energy Staff, Hours 17 
Worked, and Costs Involved in Settling Assessed CERCLA 
Penalty at the Rocky Flats Environmental Technology Site 

Table V.1: Estimated Number of EPA and U.S. Navy Staff, Hours 19 
Worked, and Costs Involved in Settling Assessed RCRA Penalty at 
the U.S. Naval Air Facility, El Centro 

Abbreviations 

CERCLA Comprehensive Environmental Response, Compensation, 

and Liability Act 
EPA Environmental Protection Agency 
GAO General Accounting Office 
NAF Naval Air Facility 
NAVFAC Naval Facilities Engineering Command 
RCRA Resource Conservation and Recovery Act 

Page 11 GAO/RCED-97-42 Hazardous Waste Violations 


Appendix I 

RCRAï¿½s Penalty Resolution Process for 
Federal Facilities 

The adjudication process for all enforcement actions taken under the 
Resource Conservation and Recovery Act (RCRA) is governed by the 
Environmental Protection Agencyï¿½s (EPA) Consolidated Rules of Practice 
Governing the Administrative Assessment of Civil Penalties and the 
Revocation or Suspension of Permits (40 C.F.R. part 22). These rules 
establish the timing and procedures that a federal agency must follow to 
preserve its appeal rights. Under these rules, an agency may either elect to 
challenge any of EPAï¿½s RCRA enforcement actions through a public hearing 
or engage in an informal settlement negotiation. EPAï¿½s regulations 
encourage informal negotiations. 

Public Hearing ï¿½ EPAï¿½s notice of violation and compliance order is final unless the penalized 
agency files a response and requests a public hearing within 30 days. 

ï¿½ The agencyï¿½s response must deny, admit to, or explain each of EPAï¿½s 
allegations. A failure to respond will constitute an admission of all alleged 
facts. 
ï¿½ If the agency fails to file a written answer within 30 days of EPAï¿½s order, the 
penalty assessed by EPA will become due and payable. 
ï¿½ If the agency requests a public hearing, it will be conducted by an 
EPA-appointed administrative law judge. 
ï¿½ An agency may appeal a hearing decision to an Environmental Appeals 
Board and beyond to the EPA Administrator. 
Informal Settlement 
Negotiations 

ï¿½ Whether or not the agency requests a hearing, the agency may confer 
informally with EPA to discuss the alleged facts, violations, and penalty. 
But the informal conference does not affect the agencyï¿½s responsibility to 
file a written response within 30 days of EPAï¿½s complaint. This informal 
conference may be pursued simultaneously with the public hearing 
procedure. 
ï¿½ Any settlement reached must be set out in a written agreement. 
ï¿½ If a settlement cannot be reached informally, filing a written response 
within 30 days of EPAï¿½s complaint preserves the agencyï¿½s right to a hearing. 
Page 12 GAO/RCED-97-42 Hazardous Waste Violations 


Appendix II 
CERCLAï¿½s Penalty Resolution Process for 
Federal Facilities 
Interagency cleanup agreements under the Comprehensive Environmental 
Response, Compensation, and Liability Act (CERCLA) establish schedules 
for evaluating and cleaning up contamination at federal facilities. If 
agencies fail to comply with any terms or conditions relating to interim or 
final remedial action, the agreements authorize EPA to impose a penalty. 
Should agencies disagree with EPAï¿½s assessed penalty, the agreements set 
forth a series of dispute resolution procedures. The agreements state that 
all parties should pursue an informal resolution at the working level. 
Failing an informal resolution, the agreements set out the following 
process: 
ï¿½ Within 30 days after any action that leads to or generates a dispute, the 
agency must submit to a Dispute Resolution Committee1 a written 
statement setting forth the nature of the disagreement and, among other 
things, the technical, legal, or factual information that the agency relied 
upon to support its position. 
ï¿½ The Dispute Resolution Committee has 21 days to unanimously resolve the 
issue and prepare a written decision. 
ï¿½ If the committee cannot resolve the matter within the 21-day resolution 
period, the dispute is forwarded to a Senior Executive Committee.2 
ï¿½ The Senior Executive Committee has 21 days to reach a unanimous 
resolution. If unanimity is not achieved, the cognizant EPA Regional 
Administrator must issue a written position. If the two non-EPA members 
do not disagree with the Regional Administratorï¿½s decision within 21 days, 
they will be considered as being in agreement with EPA. If one of the 
members disagrees with the EPA decision, that member has 21 days to 
issue a written notice elevating the case to the EPA Administrator. 
ï¿½ The EPA Administrator has 21 days to issue a written decision, which is 
final on all parties. The Administratorï¿½s duties cannot be delegated. 
1While the makeup of the Dispute Resolution Committee varies, it is usually composed of the following 
three individuals (or their equivalents): the EPA regional waste management division director, the 
federal facilityï¿½s deputy manager or deputy base commander, and a state environmental official. 
2The Senior Executive Committee is usually composed of three individuals: the EPA Regional 
Administrator, the federal agencyï¿½s Deputy Assistant Secretary (or equivalent official), and a state 
environmental representative of comparable rank. 
GAO/RCED-97-42 Hazardous Waste Violations Page 13 

Appendix III 

Summary of CERCLA Enforcement Action: 
West Virginia Ordnance Works 

During World War II, the U.S. Army manufactured TNT and other 
explosives at the West Virginia Ordnance Worksï¿½an 8,323-acre tract along 
the Ohio River. At the close of TNT-manufacturing operations in 1945, the 
facility was placed in standby status, and most of the industrial portion of 
the site was deeded to the state of West Virginia, which used it as a state 
park. 

In May 1981, a West Virginia park official noticed an unusual seepage of 
red groundwater, causing West Virginia and EPA to investigate the incident. 
The shallow groundwater discharging to a nearby pond was found to 
contain TNT by-products. On the basis of these and other studies by EPA 
and the state, the site was listed on the Superfund National Priorities List 
in September 1983. 

Because of the facilityï¿½s status as a formerly used defense site, the Army 
became responsible for managing the cleanup. In September 1987 and 
July 1989, EPA and the Army entered into two separate interagency cleanup 
agreements. 

On March 29, 1993, following several requests for compliance with the 
second interagency agreement, EPA assessed penalties of $2.025 million, 
citing the Armyï¿½s failure to deliver certain required documents. 
Specifically, EPA alleged that the Army failed to (1) submit four draft 
groundwater-monitoring plans for EPAï¿½s review ($900,000 penalty) and 

(2) fully implement a community relations plan ($1.125 million penalty). 
The following is a chronology of significant events outlining the Armyï¿½s 
and EPAï¿½s actions to settle the penalty. 

ï¿½ On April 9, 1993, the Deputy Assistant Secretary of the Army 
(Environment, Safety, and Occupational Health) wrote EPA noting that the 
Secretary was unaware of EPAï¿½s significant concerns about the siteï¿½s 
cleanup. The Armyï¿½s letter formally invoked dispute resolution regarding 
the existence of and length of time for violations and the amount of the 
assessed penalties. The Army also provided EPA with a statement of 
technical, legal, and factual information to support the formerï¿½s position. 
ï¿½ On May 5, 1993, EPA and Army representatives on the Dispute Resolution 
Committee met to resolve the dispute. 
ï¿½ From May 5 through May 18, 1993, the Dispute Resolution Committee 
attempted to resolve the issue through telephone conferences and 
exchanges of letters. 
Page 14 GAO/RCED-97-42 Hazardous Waste Violations 


Appendix III 
Summary of CERCLA Enforcement Action: 
West Virginia Ordnance Works 
ï¿½ On May 19, 1993, the committee concluded that no resolution could be 
reached and formally elevated the dispute to the Senior Executive 
Committee. 
ï¿½ From May 19 through July 15, 1993, staff of the EPA and Army 
representatives to the Senior Executive Committee met, exchanged letters, 
and held telephone conferences to narrow the issues and refine the 
proposed terms of a resolution. 
ï¿½ From July 16 through September 23, 1993, the Senior Executive 
Committee members continued discussions during telephone conferences 
and exchanges of letters. 
ï¿½ On September 24, 1993, the Senior Executive Committee agreed to resolve 
the dispute for $500,000 (reducing the original penalty by about 
$1.5 million). EPA and the Army cited the need ï¿½to concentrate the partiesï¿½ 
efforts on environmental restoration activitiesï¿½ at the site. The terms of the 
resolution also noted that nothing in the agreement should be construed as 
an admission of liability by the Army. 
ï¿½ On October 6 and 18, 1993, the acting Administrator, EPA Region 3 
(Philadelphia) and the Deputy Assistant Secretary of the Army 
(Environment, Safety, and Occupational Health), respectively, agreed to a 
final settlement. 
Table III.1 shows the Armyï¿½s and EPAï¿½s estimates of staff assigned, hours 
charged, and costs involved in negotiating the final penalty. 
Table III.1: Estimated Number of Army 
and EPA Staff, Hours Worked, and 
Costs Involved in Settling Assessed 
CERCLA Penalty at the West Virginia 
Ordnance Works 
Costs of settling assessed penalty 
Agency 
Number 
of staff 
Hours 
worked Salaries 
Fringe 
benefits 
and other 
indirect 
costs Travel Total 
EPA Region 3 9 535 $18,239 $18,614 0 $36,853 
Army Corps of 
Engineers 19 1,956 99,073 23,955 $15,600 138,628 
Total 28 2,491 $117,312 $42,569 $15,600 $175,481 
Source: GAOï¿½s presentation of EPAï¿½s and the Armyï¿½s data. 
GAO/RCED-97-42 Hazardous Waste Violations Page 15 

Appendix IV 
Summary of CERCLA Enforcement Action: 
Rocky Flats Environmental Technology Site 
The Department of Energyï¿½s Rocky Flats facility, located on 6,500 acres 16 
miles northwest of Denver, Colorado, produced plutonium components 
for Energyï¿½s nuclear weapons program. In late 1989, plutonium operations 
were suspended for various reasons, including concerns about health and 
safety. The site has been listed on the Superfund National Priorities List 
since October 1989. 
In January 1991, EPA, Energy, and the state of Colorado signed an 
interagency cleanup agreement. Energy did not provide 14 remedial study 
documents required by the agreementï¿½some were nearly a year overdue. 
According to EPA, these violations effectively rendered the entire 
agreement moot. Consequently, EPA, Energy, and Colorado agreed to 
negotiate Energyï¿½s penalty for noncompliance with the agreement and 
discuss the terms of a new agreement. 
The following is a chronology of significant events outlining Energyï¿½s, 
EPAï¿½s, and Coloradoï¿½s actions to informally resolve the penalty issue and 
prepare a new interagency agreement. 
ï¿½ On March 10, 1994, Energy, EPA, and the Colorado Department of Health 
met to discuss Rocky Flatsï¿½ inability to meet pending and potential 
milestones established by the January 1991 agreement. EPA assessed total 
penalties of $3.7 million. 
ï¿½ On April 26, 1994, the parties agreed to a single settlement for all actual 
and anticipated violations through January 1995. As part of the settlement, 
Energy agreed to undertake supplemental environmental projects. The 
settlement terms also required a new cleanup agreement for the Rocky 
Flats facility. 
ï¿½ On May 2, 1994, Energy offered a settlement of $2.8 million consisting of 
$750,000 cash and the remainder of $2.1 million in supplemental 
environmental projects. 
ï¿½ From May 9 through May 12, 1994, the parties held discussions about a 
settlement. Rocky Flats officials indicated that $2.8 million was the highest 
amount they were authorized to proposeï¿½any larger sums would require 
negotiations with Energy headquarters staff. 
ï¿½ On May 17, 1994, the parties agreed to a $2.8 million settlement, thus 
reducing the $3.7 million penalty by $900,000, and continued discussions 
about the possible use of supplemental environmental projects. 
ï¿½ From May 26 through June 23, 1994, the parties discussed proposed 
settlement language and the state of Coloradoï¿½s concerns. 
ï¿½ On July 7, 1994, the Deputy Regional Administrator, EPA Region 8; the 
Manager, Rocky Flats Field Office; and the Director, Office of 
GAO/RCED-97-42 Hazardous Waste Violations Page 16 

Appendix IV 
Summary of CERCLA Enforcement Action: 
Rocky Flats Environmental Technology Site 

Environment, Colorado Department of Health, agreed to a final settlement. 
Energy agreed to pay $350,000 to the Superfund account, $350,000 to the 
Colorado Department of Health, and $2.1 million to acquire 900 acres 
adjoining the facility for open space preservation as a supplemental 
environmental project. The parties further agreed to use best efforts to 
reach a new cleanup agreement by January 31, 1995. 

Table IV.1 shows Energyï¿½s and EPAï¿½s estimates of costs incurred to resolve 
penalty issues. 

Table IV.1: Estimated Number of EPA and Energy Staff, Hours Worked, and Costs Involved in Settling Assessed CERCLA 
Penalty at the Rocky Flats Environmental Technology Site 
Costs of settling assessed penalty 
Fringe benefits and 
Agency Number of staff Hours worked Salaries other indirect costs Travel Total 

Energy 
HQ 9 199 $9,567 $1,147 $1,575 $12,289 
Rocky Flats 7 748 23,708 4,873 2,000 30,581 
Subtotal 16 947 33,275 6,020 3,575 42,870 
EPA 
HQ 26317 850 
Region 8 7 232 7,773 10,450 0 18,223 
Subtotal 9 238 8,090 10,535 0 18,625 

Total 25 1,185 $41,365 $16,555 $3,575 $61,495 

Note: Some portion of these costs was spent on negotiating a new site cleanup agreement. These 
costs cannot be determined separately. 

Legend 

HQ = headquarters 

Source: GAOï¿½s presentation of Energyï¿½s and EPAï¿½s data. 

Page 17 GAO/RCED-97-42 Hazardous Waste Violations 


Appendix V 
Summary of RCRA Enforcement Action: 
U.S. Naval Air Facility, El Centro 
The U.S. Naval Air Facility, El Centroï¿½located approximately midway 
between San Diego, California, and Yuma, Arizonaï¿½furnishes support for 
U.S. Navy carrier aircraft. The facility provides tactical air training, such as 
carrier-landing practice, air-to-air and air-to-ground weapons training, and 
air combat maneuvers. 
On January 20, 1993, EPA conducted an inspection at El Centro and 
determined that the facility violated various RCRA provisions. The following 
is a chronology of EPAï¿½s and the Navyï¿½s efforts to resolve the RCRA 
enforcement action. 
ï¿½ On May 3, 1993, EPA filed a compliance order with the cognizant EPA 
regional office hearing clerk alleging a variety of RCRA violations at El 
Centro. Among other things, the order noted (1) a failure to determine 
whether waste was hazardous, (2) the storage of incompatible waste, 
(3) the failure to adequately train personnel, and (4) the mismanagement 
of waste accumulation areas. EPA assessed a penalty of $257,580. 
ï¿½ On June 9, 1993, the Navy filed an ï¿½answerï¿½ to EPAï¿½s complaint and 
requested an opportunity to meet with EPA to resolve the matter. 
ï¿½ On July 12, 1993, EPA and the Navy held an initial meeting at which the 
Navy presented information regarding the violations and presented a 
settlement offer. The Navy also inquired whether a portion of the penalty 
could be satisfied through supplemental environmental projects. 
ï¿½ EPA requested additional information, which the Navy provided in 
September 1993. From September 30 through December 7, 1993, EPA and 
the Navy submitted various offers and counteroffers. 
ï¿½ On January 20, 1994, a second meeting was held, and the parties reached 
an agreement in principle. The total penalty would be $129,309, of which 
$100,000 would be paid in cash and the balance would be suspended on 
the condition that the Navy perform two supplemental environmental 
projects. 
ï¿½ From February through July 1994, various discussions occurred about the 
exact nature of the supplemental projects. It was agreed that the first 
project would consist of installing a system that uses nontoxic solutions to 
clean aircraft parts. The second project would involve building a 
Hazardous Waste Minimization Center to reduce the volume of hazardous 
waste by controlling the procurement and use of materials. (The eventual 
cost of these two supplemental projects was $283,480.) 
ï¿½ On August 29, 1994, EPA and the Navy formally agreed to a ï¿½Consent 
Agreement and Consent Order,ï¿½ which was filed formally with EPAï¿½s 
regional hearing examiner. 
GAO/RCED-97-42 Hazardous Waste Violations Page 18 

Appendix V 
Summary of RCRA Enforcement Action:


U.S. Naval Air Facility, El Centro 
ï¿½ On September 14, 1994, the Navy directed that the base operating support 
contractor for the El Centro facility pay $60,466 as its share for penalties 
assessed in areas where the contractor exercised direct control and 
responsibility. 
Table V.1 shows the Navyï¿½s and EPAï¿½s estimates of staff assigned, hours 
charged, and costs involved to reach settlement. 

Table V.1: Estimated Number of EPA and U.S. Navy Staff, Hours Worked, and Costs Involved in Settling Assessed RCRA 
Penalty at the U.S. Naval Air Facility, El Centro 
Costs of settling assessed penalty 
Fringe benefits 
Number of Hours and other 
Agency staff worked Salaries indirect costs Travel Total 

Civilian Navy staff 
NAFï¿½ El Centro 8 992 $18,367 $4,939 $23,306 
NAVFACï¿½ San Diego 1 765 24,452 30,076 54,528 
Subtotal 9 1,757 42,819 35,015 77,834 
Military 4 495 14,274 0 $2,953 17,227 
Totalï¿½Navy 13 2,252 57,093 35,015 2,953 95,061 
EPA Region 9 5 480 15,128 17,228 32,356 

Total 18 2,732 $72,221 $52,243 $2,953 $127,417 

Legend 

NAF = Naval Air Facility 

NAVFAC = Naval Facilities Engineering Command 

Source: GAOï¿½s presentation of the Navyï¿½s and EPAï¿½s data. 

Page 19 GAO/RCED-97-42 Hazardous Waste Violations 


Appendix VI 

Objectives, Scope, and Methodology 

We were asked to determine (1) the number and dollar amount of 
penalties assessed by EPA against other federal agencies for violations 
under RCRA and CERCLA and (2), for selected cases, the costs associated 
with negotiating the amount of the penalty. 

To address our first objective, we compiled information on penalties that 
EPA had assessed for agenciesï¿½ violations of CERCLAï¿½s interagency 
agreements and RCRA at 61 federal facility sites. This information was 
based on EPA-developed data of penalties against the Departments of 
Agriculture, Defense, Energy, and the Interior and the U.S. Coast Guard. 
By reviewing these cases, we were able to determine the penalties 
assessed initially by EPA as well as the final penalty amounts negotiated 
between EPA and the agencies.1 

To address our second objective, we selected for further review three 
resolved penalty cases that represent more than a third of the value of all 
the assessed penalties. For the Rocky Flats case study, we visited Energyï¿½s 
headquarters, Washington, D.C.; Energyï¿½s Rocky Flats Environmental 
Technology Site, Rocky Flats, Colorado; and EPAï¿½s regional office, Denver, 
Colorado. For the West Virginia Ordnance Works study, we visited the U.S. 
Army Corps of Engineersï¿½ headquarters, Washington, D.C., the Corpsï¿½ Ohio 
River Division, Cincinnati, Ohio; and EPAï¿½s regional office, Philadelphia, 
Pennsylvania. For the El Centro case, we visited the Naval Air Facility, El 
Centro, California; the Naval Facilities Engineering Command, Southwest 
Division, San Diego, California; and the EPA regional office, San Francisco, 
California. 

According to the agency officials we interviewed, separate cost records on 
settling interagency disputes generally do not exist. However, the 
negotiation period is usually the time between the agencyï¿½s notification 
that it will formally contest the EPA-assessed penalty and the final 
resolution. Using this reference point, we asked EPA and the Departments 
of Defense and Energy to provide us with their best estimates of the costs 
they incurred to reach settlement, including salaries, fringe benefits, other 
indirect costs, and travel. Some of the estimates are based on officialsï¿½ 
recollections of past events. We discussed the estimates provided by the 
agencies with agency officials but did not verify them. 

1We noted that the Nuclear Regulatory Commission also has authority to penalize federal agencies for 
regulatory violations. Since October 1979, the Commission has assessed fines totaling $265,000 on 
federal agencies including Defense, Veterans Affairs, the U.S. Geological Survey, and Agriculture. 
Through September 1996, the Commission had collected $251,000. The fines were imposed for 
infractions of the Commissionï¿½s regulations on the management of nuclear materials. According to 
Commission officials, federal agencies have never invoked the appeals process available to dispute the 
Commissionï¿½s fines. 

Page 20 GAO/RCED-97-42 Hazardous Waste Violations 


Appendix VI 
Objectives, Scope, and Methodology 
We gathered policy guidance and other documentation on the RCRA and 
CERCLA dispute processes as well as EPAï¿½s supplemental environmental 
project policy. We also met with officials at EPA, Defense, and Energy to 
obtain their views on the resolution of disputes. 
We conducted our review from August 1996 through January 1997 in 
accordance with generally accepted government auditing standards. 
GAO/RCED-97-42 Hazardous Waste Violations Page 21 

Appendix VII 
Major Contributors to This Report 
Resources, 
Community, and 
Economic 
Development 
Division, Washington, 
D.C. 
James F. Donaghy, Assistant Director 
John D. Yakaitis, Evaluator-in-Charge 
Earl P. Williams, Jr., Communications Analyst 
Office of the General 
Counsel, Washington, 
D.C. 
Richard P. Johnson, Attorney 
(160360) GAO/RCED-97-42 Hazardous Waste Violations Page 22 

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