Superfund: Analysis of Costs at Five Superfund Sites (Letter Report,
01/28/2000, GAO/RCED-00-22).

Since the Superfund program began in 1980, the Environmental Protection
Agency (EPA) has spent about $17.7 billion to clean up hazardous waste
sites. EPA oversees the work, but private contractors do the actual
cleanups--known as remedial actions--of Superfund sites. GAO has issued
a series of reports that describe the portion of EPA's funds spent on
remedial actions by contractors, as opposed to other activities, such as
studying conditions at sites, designing cleanup remedies, and travel.
(See GAO/RCED-97-211, Sept. 1997, GAO/RCED-98-221, Aug. 1998, and
GAO/RCED-99-139, May 1999.) This report examines the costs at the
following five Superfund sites: the Raymark site in Stratford,
Connecticut; the Sharon Steel site in Midvale, Utah; the United
Creosoting site in Conroe, Texas; the NL Industries site in Granite
City, Illinois; and the Newmark site in San Bernadino, California. For
each site, GAO discusses (1) what portion of the total funds EPA spent
on each site was used to pay contractors for remedial actions as opposed
to other activities and how the contractors spent the money and (2)
whether the actual costs for remedial actions differed from the
estimated costs and why.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-00-22
     TITLE:  Superfund: Analysis of Costs at Five Superfund Sites
      DATE:  01/28/2000
   SUBJECT:  Contract costs
	     Funds management
	     Environmental monitoring
	     Hazardous substances
	     Toxic substances
	     Program management
	     Industrial wastes
	     Site selection
	     Cost effectiveness analysis
IDENTIFIER:  EPA Integrated Financial Management System
	     Superfund Program
	     EPA National Priorities List

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GAO/RCED-00-22

Report to the Chairman, Committee on the Budget, House of Representatives

January 2000 SUPERFUND Analysis of Costs at Five Superfund Sites

GAO/ RCED- 00- 22

Letter 3 Appendixes Appendix I: Summary of Remedial Action Work at the
Newmark

Superfund Site 16 Appendix II: Summary of Remedial Action Work at the NL
Industries

Superfund Site 26 Appendix III: Summary of Remedial Action Work at the
Raymark

Superfund Site 33 Appendix IV: Summary of Remedial Action Work at the Sharon
Steel

Superfund Site 39 Appendix V: Summary of Remedial Action Work at the United

Creosoting Superfund Site 47 Appendix VI: Comments From the Environmental
Protection Agency 60 Appendix VII: GAO Contacts and Staff Acknowledgments 62

Tables Table 1: Prime Contractors' Costs at Three Sites 9 Table 2: Major
Events in the Cleanup of the Newmark Site 20

Table 3: Major Events in the Cleanup of the NL Industries Site 28 Table 4:
Major Events in the Cleanup of the Raymark Site 35 Table 5: Major Events in
the Cleanup of the Sharon Steel Site 42 Table 6: Major Events in the Cleanup
of the United Creosoting Site 49

Figures Figure 1: Federal Expenditures at Five Superfund Sites as of May
1999 7

Figure 2: Remedial Action at The Newmark Superfund Site 18 Figure 3: Federal
Expenditures at the Newmark Superfund Site 21 Figure 4: Federal Expenditures
at the NL Industries Superfund Site 29 Figure 5: Construction of the Raymark
Cap 34 Figure 6: Federal Expenditures at the Raymark Superfund Site 36
Figure 7: Cap and Wetland Area at the Sharon Steel Site 40 Figure 8: Federal
Expenditures at the Sharon Steel Superfund Site 43 Figure 9: Federal
Expenditures at the United Creosoting Superfund Site 50

Figure 10: Residential Excavation Work at United Creosoting Site 52 Figure
11: Soil Treatment Plant at United Creosoting Site 55

Abbreviations

EPA Environmental Protection Agency GAO General Accounting Office IFMS
Integrated Financial Management System PAH polycyclic aromatic hydrocarbon
PCB polychlorinated biphenyl PCP pentachlorophenol ppm parts per million

Resources, Community, and Economic Development Division

Lett er

B- 284098 January 28, 2000 The Honorable John R. Kasich Chairman, Committee
on the Budget House of Representatives

Dear Mr. Chairman: Since cleanups of hazardous waste sites under the
Environmental Protection Agency's (EPA) Superfund program began in 1980, EPA
has spent a total of about $17.7 billion addressing contamination at
Superfund

sites. Although EPA is responsible for overseeing cleanups of Superfund
sites, private contractors perform the actual cleanup work, known as
remedial actions. In response to congressional concerns about the Superfund
program's costs and efficiency, GAO has issued a series of reports that
describe, for the program as a whole, the portion of EPA's

funds spent on remedial actions by contractors, as opposed to other
activities such as studying conditions at sites, designing cleanup remedies,
travel, and activities not directly related to cleaning up the sites. 1 This
report responds to your request that we complement these reports

with an examination of the costs at a small number of Superfund sites. As
agreed, we selected five Superfund sites-including two whose cleanups are
among the most costly and three that were randomly selected-to determine for
each site (1) what portion of the total funds EPA spent on each site 2 was
used to pay contractors for remedial actions as opposed to other activities
and how the contractors spent these funds and (2) whether the actual costs
for remedial actions differed from the estimated costs and, if so, why. The
two most expensive sites were the Raymark site in Stratford, Connecticut,
and the Sharon Steel site in Midvale, Utah. The three randomly selected
sites were the United Creosoting site in Conroe, Texas;

1 Superfund: Trends in Spending for Site Cleanups (GAO/ RCED- 97- 211, Sept.
1997), Superfund: Analysis of Contractor Cleanup Spending (GAO/ RCED- 98-
221, Aug. 1998) and Superfund: EPA Can Improve its Monitoring of Superfund
Expenditures (GAO/ RCED- 99139, May 1999). 2 At some sites, the Agency for
Toxic Substances and Disease Registry, a unit of the U. S. Public Health
Service, expended funds for health assessments. These funds were included in
our analysis.

the NL Industries site in Granite City, Illinois; and the Newmark site in
San Bernardino, California. Because these sites are not necessarily
representative of all Superfund sites, the cost information presented in
this

report should not be generalized to all sites. Results in Brief Most of the
funds that EPA spent as of May 1999 at each of the five

Superfund sites went to contractors for implementing remedial actions at the
sites. These contractors include the prime contractors that generally manage
cleanups and the subcontractors that do the physical cleanup work. The costs
for these prime contractors and subcontractors ranged from 53 percent to 86
percent of EPA's total spending at the sites we visited. The costs for site
studies and remedial designs were the second largest

portion of the total costs at three of the five sites, ranging from about 7
percent to about 33 percent. We further analyzed contractors' expenditures
to determine what portion was associated with the actual physical

implementation of the cleanup, as opposed to other activities, such as
overhead costs. At three of the five sites, we found that the prime
contractors spent the bulk of the funds they received from EPA either on

subcontractors that performed the physical cleanup or on supplies,
equipment, and in- house labor associated with the sites' cleanup. At two
other sites, details on contractors' spending were not available because the
sites were cleaned up under fixed- price contracts, which do not require
contractors to report how they spend funds. Work at two of the five sites
was still in progress at the time of our review; therefore, at these two
sites, both total expenditures and expenditures on remedial actions will
increase

over time. At the five sites we visited, for the remedial cleanup activities
that had occurred as of May 1999, the relationship between the actual costs
for these activities and the estimated costs varied: At three of the sites,
the actual costs exceeded the estimated costs; at one site, the actual costs
were lower than the estimated costs; and at the remaining site, a meaningful
comparison was not possible because the full scope of the work and its

costs were not known at the start of cleanup. At the three sites where
actual costs exceeded estimated costs, the total cleanup costs ranged from
less than 1 percent to 15 percent higher than estimated. These increases
were attributable to various factors, including higher- than- anticipated
quantities of materials and supplies. Costs were lower than estimated at one
site because, although EPA spent about $30 million on an innovative

cleanup method that failed, the actual amount of contaminated soil the

remedy had to address turned out to be only about one- fourth of the amount
initially estimated.

Background In 1980, the Comprehensive Environmental Response, Compensation,
and Liability Act created the Superfund program to clean up highly
contaminated hazardous waste sites. EPA places sites that pose a

sufficiently serious threat to human health or the environment on the
National Priorities List (NPL) for possible remedial action under the
program. As of July 1999, about half (595) of the 1,231 sites on the NPL
either were cleaned up or had the all methods- remedies- in place to achieve
cleanup. 3

EPA may compel the parties responsible for the contamination at a site to
clean it up, or the agency may pay for the cleanup itself and later try to
recover cleanup costs from the responsible parties. When EPA pays for the

cleanup, the work is conducted by private contractors who are directly hired
by (1) EPA or (2) a designated agency-either another federal agency, such as
the Army Corps of Engineers, or a state environmental agency. EPA may
designate another federal or state agency as the day- to- day manager of the
site if, for example, the agency has particular expertise in addressing the
problems posed by a site.

EPA employs a multistage process to address hazardous waste sites in the
Superfund program. After a site is placed on the NPL, conditions at the site
are studied, problems are identified, and alternative methods of cleaning up

the site are considered in a phase known as the remedial investigation and
feasibility study. The chosen remedy must ensure overall protection of human
health and the environment, as well as comply with other applicable and
relevant federal and state requirements. Other criteria used to evaluate
possible remedies include short- and long- term effectiveness, cost, and

community acceptance. Remedial actions must use permanent solutions and
innovative treatment technologies to the maximum extent practicable.
Following the remedial investigation and feasibility study, a final remedy
is selected and documented in a published record of decision. Then,
technical drawings and specifications for the selected remedy are developed
in a phase called the remedial design. Finally, in the remedial action
phase, a cleanup contractor begins implementing the remedy according to the
3 Long- term efforts to clean up groundwater at some of these sites are
continuing.

remedial design. To organize cleanup activities, EPA may divide a site into
two or more “operable units” corresponding to different physical
areas at the site or different environmental media, such as soil or
groundwater. Before beginning work, EPA agrees with the contractor on the
estimated

cost of performing the remedial action. In some cases, the remedial action
may be followed by a lengthy period of operations and maintenance, necessary
to maintain the effectiveness of the remedy. In addition to remedial
actions, EPA may conduct removal actions- generally short- term

responses to imminent health or environmental threats. Typical removal
actions include removing tanks, drums, or soil containing hazardous
materials that present a high risk of human exposure. When EPA administers a
remedial action, it typically uses an architectural and engineering firm as
a prime contractor to provide the professional services needed to direct the
cleanup. 4 The prime contractor does not typically perform the cleanup.
Instead, the prime contractor hires

subcontractors to perform physical work, such as excavating soil or treating
contaminated groundwater. EPA uses various contracting mechanisms to engage
the prime contractor, including cost- reimbursable contracts- under which
EPA agrees to reimburse the contractor for the costs of completing the work
and, in addition, pay the contractor a fee-and fixed- price contracts-under
which EPA defines a detailed scope of work and the contractor agrees to
complete it for a set price. For a fixed- price contract, detailed financial
information on the prime contractor's use of EPA funds is generally not
available.

The five Superfund sites in our review include two whose cleanups are among
the most expensive in the program and three that were randomly selected. The
two most expensive sites were the Raymark Industries site in Stratford,
Connecticut, and the Sharon Steel site in Midvale, Utah. The

three randomly selected sites were the United Creosoting site in Conroe,
Texas; the NL Industries site in Granite City, Illinois; and the Newmark
site in San Bernardino, California. EPA paid for at least some of the
remedial action at each site, although the agency may recover its costs from
responsible parties at some of the sites. Cleanup is complete or nearly
complete at three of the five sites, but considerable site study and
remedial action work remain at two sites (Raymark and Newmark). 4 At a site
where EPA has delegated the responsibility for managing the cleanup to
another

federal or state agency, the agency awards the cleanup contract.

EPA Funds Were Used According to data obtained from EPA's financial
management system, as of

Primarily for Remedial May 1999, the majority of the funds EPA spent at each
of the five sites we

selected went to the prime contractor for implementing the remedial Actions
at All Five actions. Figure 1 illustrates the distribution of costs at each
site.

Sites

Figure 1: Federal Expenditures at Five Superfund Sites as of May 1999

$160 Dollars in millions $140 $120 $100

$80 $60 $40 $20

$0 a

a Newmark

Industries Raymark

Sharon Steel United Creosoting

NL Other Study/ design Removal actions Remedial actions

Source: GAO's analysis of EPA data. Notes: Other costs include the costs of
salaries and travel for EPA staff overseeing cleanups, EPA's efforts to
ensure that responsible parties pay their share of cleanup costs, and
government administration and support, including such indirect costs as
those for rent and utilities.

a Because substantial work remains to be done at the Raymark and Newmark
sites, both the total expenditures and the expenditures for remedial action
will increase in the future.

The percentage of EPA's total costs at each site that could be attributed to
remedial actions ranged from 53 percent at the Newmark site to 86 percent at
the NL Industries site. 5 The remedial action work accomplished at each site
is described in more detail in appendixes I through V. Site study and remedy
design- that is, assessing the hazards posed by a site, considering
alternative remedies, and developing a detailed plan for the selected
remedy- represented the second largest cost at three of the five sites. As a
percentage of a site's total costs, the expenses for site study and remedy
design ranged from about 7 percent at the NL Industries site to about 33
percent at the Newmark site. Other costs ranged from about 7 percent at the
United Creosoting site to about 15 percent at the Newmark site.

Because work was in progress at the Raymark and Newmark sites, the
percentages of funds spent for the remedial actions at these sites will
likely increase as the ongoing work is completed.

We further analyzed contractors' remedial action expenses to determine what
portion was associated with the physical implementation of the cleanup
effort, as opposed to other activities, such as the contractors' overhead,
travel, and fees. We classified funds as spent for physical implementation
if they went to a subcontractor that performed the physical work of
implementing the remedy or were used by the prime contractor itself for
labor and materials directly related to the remedy. 6 At three sites, the
prime contractors spent a large majority of the remedial action funds they
received from EPA to physically implement the remedies, while at two other
sites, we were not able to obtain detailed information on the contractors'
costs because these sites were cleaned up under fixed- price

contracts, which do not require contractors to report how they spend funds.
As table 1 indicates, the portion of the prime contractor's funding going to
physically implement the remedy at each of the three sites ranged from 69
percent at the Raymark site to 88 percent at the NL Industries site. 5 At
the Raymark site, a $25 million removal action, involving the excavation and
removal of contaminated soil at numerous residential properties, was the
second largest cost category.

If the costs of this action were included with the remedial action costs,
about 75 percent of the total costs at the Raymark site would have been
attributable to the remedial action. 6 We considered the following prime
contractor costs to be physical implementation costs: (1) any costs for
labor pertaining to the on- site implementation of the remedy, including
earth moving, well drilling, the construction and operation of treatment
facilities, the

installation of a cap or piping, and the transport and disposal of
contaminated media and (2) the costs for equipment, supplies and materials
directly related to the remedy's implementation, such as bulldozers and
backhoes, hardware used in the construction of treatment facilities,
wellhead parts, and piping. We excluded the contractor's costs for
professional services.

The costs for other activities- that is, the costs not related to directly
implementing the remedy-include those for the prime contractor's work, such
as construction management and engineering services, associated travel
costs, overhead expenses, and administrative costs and fees.

Table 1: Prime Contractors' Costs at Three Sites Dollars in millions

Raymark NL Industries Newmark Cost category Amount Percent Amount Percent
Amount Percent

Physical implementation of $53.9 69 $34. 6 88 $12.6 84 remedy Other
activities 24 31 4.7 12 2. 4 16

Total $77. 9 100 $39. 3 100 $15.0 100

Relationship Between At three sites in our review- Newmark, Raymark, and
Sharon Steel-the Actual and Estimated actual costs of performing the
remedial activities that had been performed

as of May 1999 were higher than the estimated costs EPA and the Costs Varied
contractor had agreed to at the start of work. The increases at these sites
ranged from less than 1 percent to 15 percent. 7 At one site- United
Creosoting- the actual cost for these activities was less than the estimated
cost by about 9.5 percent. We identified various reasons for the differences

between actual and estimated costs. At the fifth site- NL Industries- we
were not able to compare actual and estimated costs because the scope of the
work at the beginning of the remedial action was too uncertain to prepare a
meaningful estimate.

At the Raymark site, the actual cost of the remedial action was about $77.9
million-$ 4.6 million, or 6 percent, higher than the estimated cost of $73.3
million. Two factors accounted for a significant portion of this
increase-the cost of clean fill for a cap covering contaminated soil and
higher indirect 7 According to the American Society of Civil Engineers, the
actual costs of a construction project can be expected to exceed the
estimated costs because of unknown conditions or other factors. It is common
to assume that the final costs will exceed the costs estimated at the time
construction bids are obtained by about 5 percent. Larger or more complex
projects may require higher contingencies.

costs than those estimated by the contractor. These factors accounted for
about $3. 8 million of the cost increase. At the Sharon Steel site, the
actual cost of the remedial action, $49.2

million, exceeded the estimated cost, $42. 7 million, by about $6.5 million,
or 15 percent. There were a number of reasons for this increase. One part of
the remedy at this site involved installing a cap over contaminated
material, in part to prevent future human exposure. The remedy required

more water than expected to suppress airborne dust at the site and therefore
cost about $2 million more than planned. Expenses for additional materials
needed at the site accounted for another $3. 6 million in unanticipated
costs. At this site, the owner of the portion of the site where

a milling operation formerly occurred also claimed that the cleanup costs
were excessive because EPA required that lead- contaminated soil be cleaned
more thoroughly than the owner thought necessary. According to the owner,
other Superfund sites located near the Sharon Steel site contained lead-
contaminated soil that was cleaned to a less stringent standard than the
500- parts- per- million-( ppm) standard established for Sharon Steel. The
owner was not able to estimate how much would have been saved by applying
the less stringent standard. EPA maintains that the 500 ppm standard was
consistent with the scientific model the agency uses to determine the safe
level of lead in soil. According to EPA's best scientific information, a
less stringent cleanup standard might not have adequately protected public
health. An EPA official also noted that if the less stringent standard had
been applied and then found inadequate to protect public health, additional
cleanup work would have been required, entailing higher

costs. Two of EPA's offices-the Office of Pollution Prevention and Toxic
Substances, which publishes guidance on lead contamination at residential
properties, and the Office of Solid Waste and Emergency Response, which
administers the Superfund program-have developed policies for cleaning up
lead in soils. According to EPA, the offices do not differ in their
assessments of the health effects of lead in soil. However, the two offices

can apply different approaches to managing the risks posed by lead in soil.
The Superfund program uses a quantitative risk assessment model that takes
into account site- specific conditions and can recommend lead concentrations
of 500 ppm or lower. On the other hand, EPA's Office of Pollution Prevention
and Toxic Substances has general guidance for homeowners and others to
address lead in soil. For example, the office has

proposed a rule which recommends a variety of lower- cost actions to address
lead concentrations between 400 and 2,000 ppm, such as planting

grass over bare soil in areas where children play. The proposed rule
recommends that homeowners remove lead from soil if concentrations exceed 2,
000 ppm. EPA officials also said that the office's guidance takes into
account the limited ability of many property owners to pay for permanent
cleanup solutions. At the Newmark site, the actual cost of addressing the
first operable unit- $14.8 million-was about 1 percent over the estimated
cost of $14.7 million. At the United Creosoting site, the actual cost of the
remedial action, about

$40.9 million, was about $4. 3 million (9. 5 percent) less than the total
estimated cost of about $45.2 million. However, much of this decrease
related to the discovery that the actual volume of contaminated soil needing
remediation was a fraction- about one- fourth-of that initially assumed for
the estimate. In considering this apparent saving, it should be noted that
EPA spent about $30 million on an innovative treatment remedy that failed.
The selection of the remedy was preceded by a study that estimated that
about 115,000 tons of soil were contaminated. EPA proposed

using a largely untried, innovative technology that would chemically remove
contaminants from the soil. This remedy ultimately proved ineffective, and a
subsequent study found that only 30, 000 tons of soil were contaminated at
the site. According to a Texas official, a less costly remedy might have
been selected had the actual quantity of contaminated soil been known.
Moreover, the cost of the failed remedy could have been substantially
reduced had the state or EPA terminated its use earlier, when,

according to the Texas officials, it became clear that the problems with the
treatment process could probably not be corrected. In the end, the
contaminated soil was excavated and removed at a cost of about $5.1 million.
At NL Industries, we could not compare actual and estimated costs because a
meaningful total cost estimate was not prepared before the cleanup work
began. Instead, the prime contractor was directed to determine if
residential properties and alleys in an area were contaminated

and to excavate any that were to whatever depth was necessary to achieve
cleanup. However, at this site, as at the Sharon Steel site, the businesses
responsible for paying for the cleanup disagreed with EPA about the
appropriate level of cleanup for lead- contaminated soil. EPA required that
the soil be cleaned up to a standard of 500 ppm, while the responsible
parties argued that a standard of 1,000 ppm would be sufficient to protect
public health. If EPA had chosen the 1, 000- ppm standard, about 250
residences would have required cleanups at an estimated cost of $7 million,

while under the 500- ppm standard, 1,300 residences required cleanups at an
esitmated cost of $30 million. According to EPA, the 500- ppm cleanup
standard was derived using the Superfund program's quantitative risk
assessment model. As noted, this model takes site- specific conditions into
account.

Agency Comments and We provided a draft of this report to EPA for its review
and comment. EPA's

Our Evaluation written comments, which appear in appendix VI, primarily
provided

additional information on the agency's policies on the cleanup of
leadcontaminated soil. We revised our report to reflect these comments. For
example, we added the statement from EPA that its Office of Pollution

Prevention and Toxic Substances and its Office of Solid Waste and Emergency
Response, which administers the Superfund program, do not differ in their
assessments of the health effects of lead. We further noted, as EPA pointed
out, that the offices may use different strategies for managing this risk.
EPA also provided technical clarifications, which we incorporated

as appropriate. Scope and Of the five Superfund sites we selected for our
review, two were among Methodology

those on which EPA had recently spent substantial amounts of funds, and
three were randomly selected. We used EPA's data to compile a list of sites
where (1) EPA had spent a total of at least $1. 5 million from fiscal year
1996

through fiscal year 1998 and (2) its spending in these years accounted for
at least 50 percent of its total spending at the sites in all years. From
this list, we then selected two of the most expensive sites. We also
randomly selected three other sites from the list in order to include a
variety of other sites. To determine what portion of the total funds EPA
spent on each site was used to pay contractors for actual cleanup work and
what portion was used for other purposes, we obtained data from EPA's
Integrated Financial Management System (IFMS) as of May 1999 and categorized
costs according to whether payments were made to contractors for remedial
actions, remedial investigations and feasibility studies, or other purposes.

Because not all federal expenditures on Superfund sites are captured by
IFMS, we supplemented this information with data from an EPA costtracking
system. This system compiles Superfund expenditures not reported by IFMS,
such as those of some other federal agencies and those of EPA that are not
associated with specific sites, such as the costs of

headquarters and regional office space and of utilities. We further analyzed
the portion of the total funds that went to the remedial action prime
contractor to determine what portion was used for actual physical work at
the site. To do this, we examined vouchers submitted by contractors to EPA
or other financial reports, which provided details on how the prime

contractors spent federal funds. In general, we classified funds that the
prime contractors paid to “pool” subcontractors- the
subcontractors that physically implement work such as excavating soil,
installing wells, and building treatment facilities- as funds spent for
physical implementation. At two sites- the Newmark and NL Industries
sites-however, the prime contractors were also responsible for substantial
physical implementation,

and we counted the costs of this work as expenditures for physical
implementation. To determine whether actual cleanup costs differed from
estimated cleanup costs at each site, we compared the cost estimates agreed
to by EPA and the contractor following the remedy design with the best data
available on actual costs at the time of our site visit. The sources of data
on estimated and actual costs varied among our selected sites. At the Sharon
Steel site, for example, the remedial action report contained a summary of
estimated and actual remedial action costs. At three other sites, we
compared agreed- upon estimates from sources such as contractors' work plans
or contract bids with data from the contractors' most recent

vouchers. At a fifth site, we were unable to conduct this analysis because
meaningful cost estimates had not been prepared. After identifying the cost
changes, we spoke with EPA or contractor officials and reviewed

appropriate documents to determine the causes of significant cost
differences. We conducted our work from February through December 1999 in
accordance with generally accepted government auditing standards. As
arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days after
the date of this letter. At that time, we will send copies to appropriate
congressional committees; interested Members of Congress; the Honorable
Carol M. Browner, Administrator, EPA; managers of the state programs

mentioned in our report; and other interested parties. We will also make
copies available to others upon request.

Please call me at (202) 512- 6111 if you or your staff have any questions.
Key contributors to this report are listed in appendix VII.

Sincerely yours, David G. Wood Associate Director, Environmental

Protection Issues

Appendi xes Summary of Remedial Action Work at the

Appendi x I

Newmark Superfund Site Background The Newmark Groundwater Contamination
Superfund site (Newmark site) involves the cleanup of groundwater
contaminating a municipal water supply in San Bernardino, California. EPA
has implemented the first phase of a three- phase remedy by building
facilities to pump groundwater and

remove contaminants before the water is used by the city. Site Background
and

The Newmark site consists of two streams, or “plumes,” of
contaminated History groundwater as well as a common source area lying
beneath about 8 square miles of the city of San Bernardino, California. The
groundwater

contamination was discovered in 1980, when the California Department of
Health Services found that water from wells providing drinking water to San
Bernardino contained excessive concentrations of two toxic

chemicals- perchloroethylene and trichloroethelyne. Both chemicals are
widely used in a variety of industries, including dry cleaning, metal
plating, and machinery degreasing. In sufficient concentrations, both
chemicals can damage the central nervous system and cause dizziness and
headaches.

Both chemicals can also damage the kidneys and liver and may increase the
risk of cancer. The wells, which supplied approximately 25 percent of San
Bernardino's water supply, were contaminated above state and federal
drinking water standards. To address the immediate problem, the state

constructed several water treatment plants to remove contaminants and
maintain the city's water supply. In subsequent years, additional testing
revealed that the contaminated groundwater continued to flow southwards,
threatening additional wells in San Bernardino and the

drinking water sources of other communities. After almost a decade of state-
and city- financed efforts to protect the city's water supply, the state of
California asked that EPA add the Newmark site to the National Priorities
List, and EPA did so in March 1989. To both address the imminent threats and
devise a long- term solution to the groundwater contamination, EPA divided
the site into three operable units : (1) the Newmark operable unit to the
east; (2) the Muscoy operable unit to the west; and (3) the source operable
unit-that is, the area suspected to be the source of the contamination in
both the Newmark and Muscoy operable

units-which lies northwest of the two plumes. EPA has not pinpointed the
origin of the contamination but believes that it lies on or near an
abandoned Army base known as Camp Ono.

EPA's Approach to At both the Newmark and the Muscoy operable units, EPA
considered a Remedying the

range of remedial actions, each of which would have extracted the
Contamination

contaminated water and treated it to remove contaminants. The chosen
remedies consist of extracting and decontaminating water by pumping it
through large vessels filled with contaminant- attracting granular activated

carbon and then delivering the treated water to San Bernardino's water
distribution system for use by the general public. Other remedies would have
either used different treatment technologies or reinjected the treated water
into the ground. At both operable units, the chosen remedy was not the most
expensive one considered. The remedy for the Newmark operable unit, selected
from possible remedies whose estimated costs ranged from $47.9 million to
$61 million, is projected to cost $49.9 million, including the costs of
operations and maintenance for 30 years. The remedy for the Muscoy operable
unit, selected from possible remedies whose estimated costs ranged between
$21.5 million and $32 million, is expected to cost $26 million. The
projected costs of operations and maintenance for the Muscoy treatment
system over 30 years are $33 million. EPA is not responsible for operations
and maintenance costs after the first 10 years at either system.

As implemented, the remedy for the Newmark operable unit is designed to
prevent additional contaminants from entering the plume, prevent the plume's
advance to the south and east, and treat water for delivery to

residents. As indicated in figure 2, EPA installed five wells at the leading
edge of the plume. Each of these wells extracts contaminated water from the
plume's leading edge at a rate of about 2,000 to 2,500 gallons per minute,
thereby preventing the contaminated water from flowing farther south. EPA
installed another set of wells in the northern part of the plume, where
contaminants flow between the impermeable rock of the Shandin Hills on the
south and the San Bernardino Mountains to the northeast. These wells are
intended to “pinch off” the flow of contaminants at the

point where groundwater from the suspected source flows into the rest of the
plume. Water drawn from both groups of wells is piped to treatment plants,
where it is decontaminated using granular activated carbon technology. EPA
plans to construct a similar remedy to address the Muscoy operable unit.
(See fig. 2)

Figure 2: Remedial Action at The Newmark Superfund Site

Source operable unit N

Shandin Hills Muscoy plume

Proposed site of Muscoy treatment facility

Newmark pipeline EPA's monitoring wells Proposed Muscoy pipeline

City well affected by contamination

Newmark operable unit treatment facility

Newmark plume Shandin Hills

Newmark operable unit treatment facility

Newmark operable unit treatment facility

Newmark extraction wells Wells at risk

Proposed Muscoy extraction wells

Source: CIty of San Bernadino Municipal Water Department.

At the Newmark operable unit, EPA arranged for the remedy's construction
through a contract with a private construction firm- URS Greiner-and a
cooperative agreement with the San Bernardino Municipal Water Department. 1
URS Greiner was contracted to build the granular- activated

carbon treatment facilities and to install monitoring wells to ensure that
the contaminated plume was halted at the extraction wells. The cooperative
agreement, between the San Bernardino Municipal Water Department and EPA,
provided for installing the extraction wells and laying the water pipes that
would carry extracted water to the treatment facilities. Under the
agreement, the San Bernardino Municipal Water Department pays for the

cost of pumping to extract the contaminated water. Table 2 summarizes the
major events during EPA's involvement with the site.

Table 2: Major Events in the Cleanup of the Newmark Site Date Event

Mar. 1989 EPA adds the Newmark site to the National Priorities List. Sept.
1992 On the basis of additional investigations indicating that the Newmark
and Muscoy plumes have a

common source, EPA expands the Newmark site to include the Muscoy component.
Mar. 1993 EPA completes the remedial investigation of the Newmark operable
unit. Aug. 1993 EPA issues the record of decision selecting a remedy for the
Newmark operable unit. Dec. 1994 EPA completes the remedial investigation of
the Muscoy operable unit. Mar. 1995 EPA issues the record of decision
selecting a remedy for the Muscoy operable unit. Feb. 1996 EPA issues a
memorandum stating that a former U. S. Army depot is a likely source of
contamination. Aug. 1998 The U. S. Army agrees to conduct a remedial
investigation at the source unit. Oct. 1998 Construction of the remedial
action for the Newmark operable unit is completed. 1 Another firm, CH2M
Hill, became EPA's prime contractor in early 1999, although URS

Greiner remains at the site as a subcontractor.

Cleanup Costs and EPA spent almost $28 million on the Newmark site as of May
1999, mostly Major Components

on remedial actions, including drilling groundwater wells and constructing
facilities for pumping, treating, and transporting the water. Costs
Attributable to EPA's Integrated Financial Management System indicated that
through May Remedial Action Work

1999, EPA had spent $27.7 million to clean up the Newmark site. As figure 3
shows, about $14.6 million, or 53 percent of this amount, was spent for
remedial actions. Because EPA's efforts at the site are ongoing, figure 3
should be taken as snapshot of an ongoing story. According to EPA officials,
the percentage of the project's total costs applied to remedial actions is
likely to increase in the coming years as the preliminary study and design
work are completed and the remedial work progresses.

Figure 3: Federal Expenditures at the Newmark Superfund Site

Design $3.6 million (13%) Other $4.1 million (15%)

Study $5.4 million (19%)

Remedial actions $14.6 million (53%)

Source: GAO's analysis of EPA data.

Data submitted by the contractor and the city of San Bernardino indicate
that of the roughly $15 million 2 spent on remedial actions at the Newmark
site, about $7. 3 million was spent by the prime contractor and about $7. 7
million by the San Bernardino Municipal Water Department. GAO's analysis

of these data indicates that the majority of funds were spent on items
directly related to the physical work of implementing the remedy. 3 For
example, about $5.8 million- or 79 percent of the total paid to the prime
contractor-went to subcontractors that actually performed the physical work.
Other significant expenditures by the prime contractor include $446,000- 6.
1 percent -for the prime contractor to manage and oversee the remedial
action and $533,000- 7.3 percent- for costs such as rent and utilities for
on- site space.

Under the cooperative agreement with EPA, the city's water department spent
about $7.7 million on remedial actions at the Newmark operable unit,
including about $6.8 million, or 88 percent, to physically implement the
remedy. Of this $6. 8 million, the city spent about $3. 2 million, or 47
percent, for contractors involved in the implementation; about $813,000, or
12 percent, for in- house personnel involved in physically implementing the

remedy; and $2.7 million, or 40 percent, for supplies directly related to
the remedy. Selected Remedial Action

The remedial action at the Newmark operable unit consisted of four major
Tasks and Costs tasks, two implemented by the San Bernardino Municipal Water
Department and two by the prime contractor.

First, the San Bernardino Municipal Water Department constructed a total of
seven extraction wells, two at the north end where the contaminants enter
the plume and five at the leading, southern edge of the plume, for

about $3. 4 million. 4 Ranging in depth from 1,200 to 340 feet deep, the
majority of these wells are designed to pump about 2,500 gallons of water
per minute, 24 hours a day. These wells will remove contaminated water and
prevent further migration of the contaminated plume. Major cost elements of
the well installation included $1,095,000 for a subcontractor to drill the
wells and $683,000 to provide materials such as the well shafts,

pumps, and well housing. In addition, the water department spent $362,000 2
Because of a lag between when vouchers are submitted and when data are
entered into EPA's Integrated Financial Management System, spending totals
derived from these two sources may differ, as they do in this case. 3
Because remedial action work had not yet begun at the Muscoy operable unit
at the time of our review, the following discussion pertains to the Newmark
operable unit only. 4 In addition, the contractor modified an existing well
at the north end for extraction.

to purchase properties in residential neighborhoods where the wells were to
be installed. Second, the San Bernardino Municipal Water Department
installed pipelines to transmit the contaminated water from the extraction
wells to the treatment facilities. About 23,000 feet of water mains,
predominantly 24- inch pipe, were laid beneath city streets, at a cost of
$2.5 million, to transport contaminated water from the wells to treatment
plants.

Third, EPA's prime contractor installed granular activated carbon treatment
vessels at three sites over the Newmark plume, at a cost of about $4.25
million. The major components of this effort included the procurement of

30 vessels and modification of 6 vessels, each containing 20, 000 pounds of
the granular activated carbon that will attract contaminants in the water,
and the construction of the facilities themselves, which was performed by a
pool subcontractor. Finally, the prime contractor installed six monitoring
wells, 5 designed to monitor contaminant levels in groundwater downstream
from the extraction wells, to measure the effectiveness of the remedy. The
depth of these wells ranged from 400 feet at the north end of the plume to
about 1,000 feet just below the plume's leading edge. The total cost of
these wells

was about $1 million, the largest component of which was the cost for a
subcontractor to drill the wells. Periodically, according to the sitewide
monitoring plan, water will be drawn from these wells and tested to ensure
that the contaminated plume has not spread beyond the extraction wells.
Significant Cost

Overall, the actual costs of constructing the remedy at the Newmark Changes

operable unit, $14.8 million, were less than 1 percent over the originally
estimated costs of about $14.7 million. Although the San Bernardino
Municipal Water Department's costs were about $1. 3 million- or about 21
percent- higher than estimated, the prime contractor's actual costs were
about $1. 2 million- or 14 percent- lower than expected. According to San

Bernardino Municipal Water Department officials, the additional cost covered
a 1- year performance evaluation task- which began in October 1998- that was
not included in the initial cooperative agreement. 5 EPA also used other,
preexisting wells for monitoring.

EPA's formal assessment of the contractor, as well as EPA officials'
comments to us, indicate that both the contractor and the city performed
well in implementing this remedial action. In formal evaluations covering
the period from November 1, 1997, through October 31, 1998, EPA gave the
contractor high marks for project management and cost control. A report for
the 6 months ending April 30, 1998, praised the contractor's effectiveness
in subcontracting major construction activities, including the

installation of the granular activated carbon treatment vessels, and in
overseeing the construction of the north and south treatment plants. The
contractor successfully planned around heavy rainfall and unanticipated
field conditions to keep the project on schedule. During the 6- month
period, EPA gave the contractor a score of 4 out of a possible 5- indicating

that the contractor exceeded expectations in all rated areas, including cost
control and project planning. We did not review formal assessments of the
San Bernardino Municipal Water Department's performance. However, EPA
officials said the city performed well and effectively coordinated its work
with that of the contractors.

Current Status of The construction of the remedial action at the Newmark
operable unit is Cleanup

completed, and a 1- year testing and evaluation period ended in October
1999. However, EPA faces significant additional costs at this Superfund
site. For example, EPA will fund operations and maintenance costs at the
Newmark operable unit for 10 years, at an estimated annual cost of $850,000.
After this period, the state will be responsible for these costs.

In November 1999, the remedial action began at the Muscoy operable unit, and
officials estimated this work would cost a total of $22 million. Operations
and maintenance at this unit are expected to cost $10 million over 10 years.

At this time, the remedial investigation and feasibility study is being
conducted at the source operable unit, and the costs of remedial action, if
any, are not known. Enforcement and Cost EPA has not yet definitively
identified the sources of the groundwater Recovery Issues contamination and
has not formally named potentially responsible parties. As a result, it is
not clear whether EPA will ultimately recover the costs of

cleaning up groundwater at the site. According to EPA officials, three areas
are the most likely sources. These are (1) Camp Ono, a former U. S. Army
base that lies to the north and west of the two plumes; 6 (2) the Cajon
Landfill, a county- owned facility that lies north of Camp Ono; and (3) the
site of the former San Bernardino Airport, which lies farther south, within
the Newmark plume. According to EPA officials, there is no known

financially viable entity associated with the former airport to cover
cleanup costs if it is found to be one of the sources.

Although EPA has not named the U. S. Army as a potentially responsible party
liable for response costs, the Army is currently conducting an investigation
of the source operable unit, under an agreement with EPA. This investigation
consists of testing soil and groundwater at locations at Camp Ono where
solvents are most likely to have been used. Army officials told us that
although it is possible that the Army is partly responsible for the
contamination, the Army's responsibility has not been proved. 6 In a
separate action, the city of San Bernardino and the state of California have
filed a lawsuit against the U. S. Army in an effort to recover the costs of
past efforts to address the contamination.

Summary of Remedial Action Work at the NL

Appendi x II

Industries Superfund Site Background The NL Industries Superfund site is a
16- acre industrial facility located in Granite City, Illinois. It operated
as a lead- smelting facility from about 1903 to 1983, during which time it
generated an on- site pile of lead- contaminated slag and debris from a
battery casing breakup operation. The industrial activities caused extensive
lead contamination in Granite City and several surrounding communities.
First, airborne emissions from the smelting operation contaminated an
extensive area to the south and west of the

facility, and second, lead- contaminated material from the crushed battery
casings were sold off- site and used to fill low- lying areas and alleys-
known as remote fill areas-throughout the surrounding communities. Lead
contamination from the site was evident over an area of about 100 blocks,
affecting an estimated 1, 600 residences. The remote fill activities
affected about 100 locations, including residences and alleys. The
industrial site also had significant contamination, including piles of soil
and debris weighing about 250,000 tons and about 35 drums of contaminated
solid waste from

the smelting operations. Because of concerns over lead contamination in the
Granite City area and documented risks to public health from exposure to
high levels of lead, the state of Illinois, in 1982, denied an application
to continue operating the smelter, and all operations at the site were

discontinued in 1983. A blood study indicated that 16 percent of the
children in the surrounding areas, and 25 percent of those living nearest
the site, had blood lead levels above 10 micrograms per deciliter. 1 In
1985, EPA directed NL Industries to assess the site's contamination and
identify possible remedies. Through this investigation, NL Industries
identified seven potential cleanup remedies for the site, including a

$475,000 no action remedy, which involved monitoring air quality and
groundwater and placing restrictions on the site's use. Five of the
remaining remedies involved removing drums off- site, excavating
leadcontaminated

soil and battery chips from residential properties and alleys and placing
them on the industrial site's slag pile, capping the pile, moving some of
the most contaminated soil to an approved landfill, and installing deep
groundwater- monitoring wells. The estimated costs of these remedies ranged
from about $6 million to about $67 million. The major difference among them
was the type of cap that would have been used to cover the site. The seventh
and most expensive remedy would have moved all of the

1 According to the Illinois Department of Health, any blood level above 10
micrograms suggests exposure that is greater than normal and requires
action. A level of 30 micrograms indicates blood poisoning.

contaminated soil to a suitable landfill. For all of the remedies requiring
soil cleanup, the potentially responsible parties (PRP) proposed that soil
from both the residential properties and the industrial site be cleaned up
to a standard of 1, 000 parts per million (ppm) of lead. They estimated that
about 250 residential properties would require remediation under this
standard. In addition to these alternatives, EPA asked NL Industries to
develop an alternative using a 500- ppm cleanup standard, but NL Industries
declined to do so. Subsequently, EPA developed such an alternative. EPA's
alternative was similar to one of the remedies that would have consolidated

and capped contaminated material at the industrial site, but it applied a
standard of 500 ppm to the residential areas.

In March 1990, EPA issued a record of decision selecting the alternative it
had developed, thus applying the 500- ppm standard to the residential areas.
The estimated cost of this remedy was $30 million, compared with $7 million
for a comparable remedy using the 1,000- ppm standard, because the estimated
number of properties to be cleaned increased from 250 to about 1,300. The
responsible parties considered this standard more stringent than necessary
to protect public health and too costly. Even though EPA issued

a unilateral administrative order 2 directing the responsible parties to
implement the selected remedy, they did not cooperate. In addition, in
response to information disclosed during the remedy design, EPA later

amended the remedy to protect groundwater. EPA determined that the
contaminated soil and battery casings excavated from residential properties
and alleys would be disposed of off- site in an approved landfill, instead
of being added to the waste piles at the industrial site. This change,

as well as other factors, such as larger- than- expected numbers of remote
fill sites, increased the estimated cost of the remedial action from $30
million to about $55 million. Because the responsible parties refused to
comply with EPA's administrative order, EPA, in February 1993, entered into
an interagency agreement with the U. S. Army Corps of Engineers (the Corps)
to design and implement the remedy. The Corps, in turn, contracted with OHM
Remediation Services Corporation (OHM) to conduct the remedial work

under a cost- plus- fixed- fee contract. Under this arrangement, EPA,
through the Corps, paid the contractor for all costs incurred, as well as a
fixed fee.

2 A unilateral administrative order is an enforcement tool EPA uses to
compel responsible parties to perform and pay for cleanup when negotiations
fail.

Table 3 summarizes major events in EPA's cleanup effort.

Table 3: Major Events in the Cleanup of the NL Industries Site Date Event

May 1985 NL Industries officials sign a consent order to conduct a remedial
investigation. June 1986 EPA places the NL Industries site on the National
Priorities List. Jan. 1990 NL Industries completes a remedial investigation/
feasibility study. Mar. 1990 EPA issues a record of decision specifying the
selected remedy. Nov. 1991 EPA issues a unilateral administrative order
directing the responsible parties to implement the remedy. Feb. 1993 EPA
signs an agreement with the Corps to design and implement the remedy. Apr.
1993 The Corps starts residential cleanup action.

Apr. 1994 The responsible parties seek a court order to halt EPA's cleanup
activity. July 1998 The responsible parties agree to take over the cleanup
and enter into cost recovery negotiations. Sept. 2000 All cleanup activity
at the NL Industries site is scheduled for completion.

Cleanup Costs and According to EPA's financial management system, EPA has
spent about

Major Components $45.8 million to clean up the NL Industries site. Of this
amount, the largest portion, about $39.3 million (86 percent), went directly
to the contractors

that implemented the cleanup remedy. Figure 4 illustrates the costs
associated with the site's cleanup, by its major components.

Figure 4: Federal Expenditures at the NL Industries Superfund Site

Study/ design $3 million (7%)

Other $3.5 million (8%)

Remedial actions $39.3 million (86%)

Note: Removal costs, which are less than 1 percent of EPA's total spending,
are included with remedial action costs. Percentages do not add up to 100
due to rounding.

Source: GAO's analysis of EPA data.

Our analysis of the prime contractor's financial data revealed that of the
$39.3 million in remedial action costs, $34. 6 million (88 percent) went to
the remedial action contractors for costs generally associated with physical
cleanup activities. Of the $34.6 million, about $2 million (6 percent) went
to

subcontractors that performed various on- site work, and the prime
contractor, OHM, retained about $32.6 million (94.2 percent) for the
physical cleanup activities it performed. The other $4. 7 million in
remedial action costs went for overhead and administrative support
activities, such as travel, insurance, and laboratory services.

The cleanup of the NL Industries site was separated into two distinct
phases: (1) a rapid response activity- comparable to a removal action-
managed by the Corps' Omaha office and (2) a longer- term remedial action
managed by the Corps' Chicago office. OHM performed the cleanup activities
for both phases. For the rapid response activity, the contractor designed
the remedy, moved drums of contaminated material off- site, and cleaned up
about 109 residential properties and/ or alleyways that required immediate
attention. The costs of individual rapid response components could not be
determined because the Corps' records did not provide this

level of detail. However, the total amount paid for these rapid response
efforts was about $11 million. For the remedial action, OHM cleaned up
another 960 residential lots and alleyways, at a cost of about $28 million.
In general, the contractor was directed to identify the extent of
contamination at each property and to eliminate exposure to the
contamination. The

scope of work was determined property by property. According to a Corps
official, the costs to sample, excavate, and backfill a residential property
ranged from about $1, 400 to about $69,900 and averaged about $24,000 per
property. As discussed below, in 1998 some of the responsible parties
reached a settlement with EPA under which they agreed to take over the
cleanup. At that time, the Corps became responsible for overseeing the
parties' work for EPA. Significant Cost

We were unable to assess cost changes at this site because uncertainties
Changes and Other

about the scope of cleanup needed prevented full cost estimates from being
developed at the start of the work. Instead, the prime contractor was Remedy
directed to determine if residential properties and alleyways in an area
Implementation Issues were contaminated and to excavate and remove any
contaminants to whatever depth was necessary, as well as to implement the
groundwater and industrial site remedies. Therefore, it was impossible to
accurately estimate the cost to remediate a property until the work was
under way. The Corps' estimates of costs were based on worst- case
scenarios.

The Corps did estimate the costs of capping the site, about $6 million, and
of installing the groundwater- monitoring wells, about $3 million. However,
these tasks had not been finished at the time of our review and have now

been taken over by the responsible parties. Under its agreement with EPA,
the Corps was responsible for overseeing the performance of the remedial
action contractors. According to Corps officials, the prime contractor did a
good job of staying on schedule and

received payments as planned. EPA and Responsible Parties

Both the responsible parties and Granite City officials opposed using the
Disagree Over Lead Cleanup 500- ppm cleanup standard for lead in soil. About
a year after the residential Standards

cleanup actions started, Granite City officials and the responsible parties
sought a court order halting EPA's cleanup efforts. They believed the 500-
ppm standard imposed by EPA was unnecessarily expensive. In August 1994, in
accordance with a negotiated agreement, EPA suspended

residential cleanup actions and reconsidered the standard. To do so, EPA

used a quantitative model that incorporated site- specific data to assess
the risk posed by lead contamination. After about a year's delay, EPA
reaffirmed its decision to use the 500- ppm standard, and the court allowed

the cleanup work to resume. In 1996, a federal district court rejected an
attempt by Granite City officials and some responsible parties to halt the
cleanup.

While the court decision was pending during the early residential excavation
and removal work, Granite City officials refused to give the Corps' cleanup
contractor access to city- owned easements-strips of land between the
streets and sidewalks. By the time the city gave the contractor access, the
soil had been excavated from about 325 residential yards but not from the
associated easements. The Corps estimates that EPA had to

spend about $650,000 for the contractor to return to excavate the easements.
3 In addition, an EPA official said the litigation helped extend the cleanup
period from 2. 5 years, as initially estimated, to 7 years, thereby
increasing EPA's and the Department of Justice's overhead costs.

EPA's 500- ppm standard was based on interim guidance, in effect at the time
the remedy was chosen at the site, establishing a cleanup level for lead in
soil within residential areas. This guidance referred to a range of 500 to
1,000 ppm. While the guidance suggested that blood lead levels, especially
in children, appear to be affected by lead concentrations in soil that range

from 500 to 1,000 ppm, it did not specifically recommend that
leadcontaminated soil be cleaned up to a standard of 500 ppm. Instead, it
stated that site- specific factors should be included in decisions to
determine the actual cleanup level. According to the responsible parties,
EPA did not provide definitive evidence to show that the 500- ppm standard
would be more protective of human health than the 1,000- ppm standard.
According to EPA, the 500- ppm level was consistent with the quantitative
model it uses to determine the safe level of lead in soil. A less stringent
cleanup level

would not, according to EPA's best scientific information, have been
adequate to protect public health. An EPA official also said that if the
less stringent standard had been applied and found inadequate to protect
public health, the cleanup costs would have been higher because of the need
to mobilize a second cleanup. 3 While there would have been some cost to
remediate these easements during the earlier work, EPA officials believe a
significant portion of these funds could have been saved.

Current Status of Effective July 1998, six of the major responsible parties
that had generated

Cleanup the contaminated waste agreed to take joint responsibility for
cleaning up the lead contamination at the industrial site, as well as for
completing the

remedial actions that were under way at the residential properties. These
responsible parties have contracted with another firm to complete the
cleanup actions initiated by the Corps and OHM. According to November 1999
cleanup figures, over 1, 540 residential properties have been excavated,
backfilled, and resodded-about 836 by the Corps' contractor and about 708 by
the responsible parties. In addition, another 125 residential properties and
alleyways were excavated because they were contaminated with battery chip
debris.

As of December 1999, substantially all of the cleanup activities specified
in the record of decision were completed, except for the groundwater remedy.
The total cleanup costs for the site are estimated to be about $63. 5
million. The remainder of these costs will be picked up by the responsible
parties. Enforcement and Cost

NL Industries officials did not join six other responsible parties in their
Recovery Issues decision to settle with EPA and complete the site's cleanup
actions. EPA has reached a verbal agreement with NL Industries to enter into
a consent decree, but the agreement has not been finalized. The other six
responsible parties agreed in July 1998 to complete the cleanup actions
(then estimated

to cost about $21 million), reimburse EPA about $9 million of its already
expended funds, and pay about $400,000 in penalties for failing to comply
with the unilateral administrative order, as well as pay about $2 million to
abate lead- based paint problems in the cleanup area.

Summary of Remedial Action Work at the

Appendi x II I Raymark Superfund Site Background The Raymark Superfund site
is centered on the 33- acre Raymark facility, located in Stratford,
Connecticut. Raymark manufactured brake pads, clutch parts, and other
automotive products from 1919 to 1989. The facility generated wastes
containing over 60 different contaminants, including

lead, asbestos, and polychlorinated biphenyls (PCBs). Raymark's waste
disposal practices resulted in two main environmental hazards. First, the
company's on- site disposal of wastes and chemical spills contaminated soil
at the facility. The contaminated soil formed a layer underlying nearly all
of the facility and ranged in thickness up to 24 feet. These disposal
practices

also contaminated groundwater underlying the facility, particularly in the
vicinity of previous chemical disposal and spill areas. Second, Raymark
periodically dredged contaminated sludge from the site and provided it to

property owners throughout the town of Stratford to fill areas of their
properties. Investigations revealed over 70 properties with elevated levels
of lead, asbestos, and PCBs, including playing fields at a local school,
recreational parks, and residential and commercial properties.

Health assessments concluded that on- site and off- site contamination
presented an imminent health threat to workers, residents, and others who
might inhale, ingest, or touch the contaminants. Several potential health
effects are associated with the contaminants at the site. Asbestos can cause

lung cancer and scarring of lung tissue. Lead can cause brain and nervous
system damage, especially among children. PCBs have been linked to cancer
and reproductive effects.

The Raymark site currently consists of eight operable units. The first, the
former site of the Raymark facility, is the only unit where remedial work
has been conducted to date. 1 The other operable units are areas off the

industrial facility that were contaminated by material from the facility.
After considering four remedies (other than a “no action”
remedy) to clean the first operable unit, EPA selected the least expensive
remedy, estimated at $62 million. A major feature of the selected remedy was
the construction of a multilayered, impermeable cap over the entire
facility, designed to prevent (1) people from coming in contact with
contaminated soil and (2) rainwater from leaching contaminants into
groundwater. (See fig. 5.) The remedy also involved removing highly
contaminated pockets of solvents and decontaminating and demolishing all on-
site buildings. A second

1 As discussed later in this appendix, EPA has also implemented a removal
action at this site, separate from remedial action measures.

remedy, estimated to cost $131 million, would have been similar to the first
but would also have excavated, treated, and provided for the off- site
disposal of approximately 21, 000 cubic yards of highly contaminated soil.
The third and fourth remedies would have excavated all contaminated
materials above the water table for treatment and disposal either on- site
(estimated to cost $351 million) or off- site (estimated to cost over $1

billion).

Figure 5: Construction of the Raymark Cap

Source: U. S. Army Corps of Engineers.

EPA and the U. S. Army Corps of Engineers (the Corps) oversaw the management
of the cleanup and hired private contractors to conduct the prescribed
cleanup actions at the site. Through an interagency agreement between EPA
and the Corps, EPA provided the funding to the Corps for the

cleanup actions. The Corps used a cost- reimbursable contract with the
primary contractor at the site. Table 4 shows the major events that occurred
during the cleanup.

Table 4: Major Events in the Cleanup of the Raymark Site Date Event

June 1993 EPA starts a removal action to excavate contaminated fill from
residential properties. June 1995 EPA proposes Raymark for the National
Priorities List. Aug. 1994 EPA begins a remedial investigation/ feasibility
study. Apr. 1995 EPA adds Raymark to the National Priorities List. June 1995
EPA issues a record of decision for on- site work at the Raymark facility.
Sept. 1995 The remedial action begins. Sept. 1996 The removal action ends.
Nov. 1997 The remedial action is completed.

Cleanup Costs and As of May 1999, EPA had spent about $145 million cleaning
up the Raymark Major Components

Superfund site. The costs for remedial action work have been the largest
component of the site's costs, accounting for about 58 percent ($ 84
million) of the spending to date. Figure 6 shows the amount and share of
spending for the various cost categories involved in cleaning up the Raymark
site.

The percentages will change as work continues at this site.

Figure 6: Federal Expenditures at the Raymark Superfund Site

Study $6.7 million (5%) Design $8.9 million (6%)

Other $20.5 million (14%)

Removal actions $25 million (17%)

Remedial actions$ 84 million (58%)

Source: GAO's analysis of EPA data.

Foster Wheeler Environmental Corporation, the contractor hired by the Corps
to design and implement the Raymark cleanup, received approximately $77.9
million of the $84 million spent on remedial action. In addition,
approximately $5 million was paid to the Corps. Of the $77.9

million, about 69 percent went to physically implementing the cleanup while
the remaining 31 percent went to expenses related to managing and overseeing
the cleanup- professional work, such as construction management and
engineering services, and the associated travel, overhead, and
administrative costs and fees. Major components of the remedial action
included (1) decontaminating

and demolishing all on- site structures and (2) placing an impermeable cap
over the entire facility and preventing pockets of solvents from further
contaminating groundwater. The first major component- decontaminating and
demolishing approximately 16 acres of industrial buildings- cost $17.9
million. Most of the debris from the demolition was disposed of on- site for
eventual placement under the cap. Wood, which could decompose and

affect the integrity of the cap, was disposed of off- site, and metal
materials, such as steel girders and heavy machinery, were decontaminated
and recycled.

A second major component of the cleanup- placing an impermeable cap over the
entire facility and removing pockets of solvent contamination from
groundwater- cost approximately $52 million. The cap was designed with
multiple layers to prevent rainwater from infiltrating the waste beneath the
cap and leaching into groundwater. One layer- a polyethylene liner- provided
protection because of its low permeability to water vapor, high chemical
resistance, and resistance to weathering and puncturing. In addition, a sand
layer with a system of pipes was installed to collect volatile gases
building up from the waste soils and convey the gases to treatment buildings
constructed above the cap.

The cap was designed and built so as to facilitate future commercial use of
the site. EPA worked with a potential developer who had plans to build a
shopping center on the site. For example, the cap included areas that served
as “building pods” that could support the weight of the shopping

mall. In one area, approximately 270 steel pipes were driven into the ground
to depths of up to 100 feet and filled with concrete, and a 2- foot steel-
reinforced concrete slab was placed over the pipes.

Another segment of this component of the cleanup was designed to prevent
pockets of solvent contamination from further spreading into groundwater.
The contamination is captured by extraction wells, and a piping system that
sends the contamination to a treatment facility and prevents it from moving
further into groundwater.

A removal action was conducted at the residential off- site locations where
Raymark historically disposed of its waste. The removal action involved
excavating contaminated soil and waste from 46 residential properties and
placing the contaminated soil and waste under the cap on the industrial
facility. An estimated 100,000 cubic yards of contaminated material was
removed from the properties and the school playing field. The cost of the
removal action for the residential properties was $25 million.

Significant Cost The actual costs incurred by the contractor to implement
the Raymark

Changes remedial action were about $77. 9 million, or 6 percent over the
$73.3

million estimate originally negotiated between the Corps and Foster Wheeler.
Decreases in the cost of some elements were offset by increases in the costs
of others. Two cost categories accounted for a significant portion of the
cost increase. These were (1) higher- than- expected costs for clean fill
material for the cap and (2) increases in the contractor's indirect costs.
The costs for these categories increased by $3.8 million.

The cost of clean fill used at the site increased by about $2.2 million,
from about $10.8 million to $13 million. The increase occurred because more
clean fill was needed than originally estimated and additional costs were
incurred for labor and equipment related to handling the material. According
to the contractor, so much fill was brought onto the site that its grade was
10 feet higher after the remedial action than it had been before. Adverse
weather conditions and unanticipated difficulties in placing the material on
the site also increased the costs of the remedial action.

Increases in the contractor's indirect costs raised the cost of the work at
the Raymark site by $1. 6 million. These costs- for rent, employee benefits,
utilities, and other operations- were estimated annually. The contractor
billed the indirect costs on a provisional basis during each accounting
year. After the contractor's accounting year was completed, the Defense

Contract Audit Agency performed an audit of the indirect cost rate. A final
indirect cost rate was established, and adjustments were made in the amount
that was billed. Current Status of

The remedial action at the first operable unit, the industrial site, is
Cleanup

complete. However, EPA faces significant future costs at this site.
According to EPA's current estimate, completing all remedial action work
will require another $80 million. This estimate includes the costs of
cleaning up seven additional operable units, which encompass about 20
commercial properties, a ball field that used Raymark waste as fill,
wetlands, and groundwater throughout the town of Stratford. The estimate
does not cover any other costs, such as those for the remedial design or

EPA's oversight. Because EPA has not yet completed studies at all of the
remaining operable units, it has not decided how it will clean up the
remaining areas. Therefore, EPA's current estimate is not final and is only
for planning purposes.

Enforcement and Cost EPA expects to recover some of the costs of cleaning up
the Raymark site Recovery Issues

and surrounding areas through several sources. For example, the agency
expects to receive funds from the sale of the Raymark property. In addition,
EPA may be able to collect funds from Raymark insurance policies.

Summary of Remedial Action Work at the

Appendi x V I Sharon Steel Superfund Site Background The 570- acre Sharon
Steel Superfund site, located in Midvale, Utah, consists of a former metal
ore milling area that operated from 1906 to 1971 and approximately 600
commercial, residential, and public properties in the vicinity of the
milling operation. During the milling process, lead, zinc, copper, and other
metals were extracted from ore. The operation created an estimated 10
million tons of mine tailings, which are sandlike deposits, piled 40 to 50
feet deep on the site. The tailings, which contained high levels of lead,
cadmium and arsenic were blown by the wind, contaminating the soil in the
city of Midvale.

According to EPA's record of decision for the site, exposure to high levels
of lead can result in lead poisoning that can lead to coma, mental
retardation, or seizures. Chronic ingestion of arsenic can damage the

nervous and cardiovascular systems. In addition, the ingestion of cadmium is
associated with kidney disease, bone damage, high blood pressure, and
suppression of the immune system.

EPA divided the Sharon Steel Superfund site into two operable units. The
first operable unit included the tailings pile and the former milling
operation. EPA considered five cleanup remedies for this unit. The estimated
cost of the five remedies ranged from about $1. 6 million to

approximately $2. 3 billion. The remedy chosen for the site consisted of
constructing a multilayered cap of soil and other materials over the
tailings pile and repairing a wetland area on the site, at an estimated cost
of about $54 million. The wetland area was rehabilitated by removing
contaminated soil from the wetland, placing the soil on the tailings pile,
and contouring

and planting vegetation in the wetland. (See fig. 7.) Excluding a “no
further action” remedy, which was determined not to be protective of
human health and the environment, the chosen remedy was the second least
expensive one EPA considered. The other remedies considered included using
controls, such as land- use restrictions and dust suppression technologies,
to limit exposure to the contamination; transporting tailings off- site; or
mixing soil with a chemical compound to immobilize the

contamination and prevent it from leaching into groundwater.

Figure 7: Cap and Wetland Area at the Sharon Steel Site

View of cap View of wetland area

At the second operable unit- the properties that had become contaminated by
wind- blown tailings- EPA considered five remedies ranging in cost from
about $1. 4 million to $98 million. The chosen remedy consisted of removing
contaminated soil with lead concentrations of 500 ppm or more and arsenic
concentrations of 70 ppm or more from the properties and

placing it on the tailings pile at the first operable unit at an estimated
cost of $23 million. Excluding a “no further action” remedy,
which EPA

determined would do nothing to limit exposure to contaminants, the chosen
remedy was the second least expensive one considered, given the estimates
available at the time. The other remedies considered included constructing a
cap over soil on contaminated properties or adding chemicals to soil to
prevent contaminants from moving into groundwater.

In addition to these two remedial actions, EPA oversaw three removal actions
at the site. Under the first removal action, a fence was constructed around
the site, and a chemical was sprayed on the tailings pile to stabilize it
and reduce the amount of tailings blown by the wind. During the second

removal action, chemicals were removed from buildings left on the site. A
third removal action was conducted to demolish buildings on the site.

EPA entered into a cooperative agreement with the Utah Department of
Environmental Quality (a state environmental agency), under which the state
oversaw the management of the cleanup actions at the site. EPA provided the
state with funds to manage these actions and pay contractors to perform the
cleanup work. EPA obtained the funds it paid to the state

from a settlement entered into with responsible parties at the site. The
state entered into contracts with private firms to conduct the remedies. At
the first operable unit, the state used a type of fixed- price contract
under which the contractor charged the state at an agreed- upon rate per
unit of work. For example, the contractor charged the state a price per
cubic yard of soil excavated. At the second operable unit, the state used
fixed- price contracts under which several contractors charged the state

lump sum amounts to conduct cleanup actions. Table 5 summarizes the major
events that occurred during the site's cleanup.

Table 5: Major Events in the Cleanup of the Sharon Steel Site Date Event

Dec. 1984 EPA begins the remedial investigation/ feasibility study at the
site. Jan. 1989 The first removal action is started- excavating tailings,
erecting a fence around the site, and stabilizing the tailings pile.

Aug. 1990 EPA places the site on the National Priorities List. Sept. 1990 A
record of decision is issued for the second operable unit- residential and
other properties. Mar. 1991 The second removal action is started- removing
chemicals located in buildings on the site. Oct. 1991 The remedial action
begins at the second operable unit- residential and commercial properties.
Sept. 1992 The third removal action- demolition of buildings on- site-
begins. Dec. 1993 A record of decision is signed for the tailings pile and
milling area (first operable unit). June 1995 The remedial action begins at
the first operable unit. Oct. 1998 The remedial action for the second
operable unit is completed. Mar. 1999 The remedial action for the first
operable unit is completed.

Cleanup Costs and Through May 1999, EPA spent $75. 8 million on the Sharon
Steel site's Major Components

cleanup. About 70 percent of this amount ($ 52.8 million) was spent on
remedial actions at the site, and 4 percent ($ 2. 8) was spent on removal
actions as shown in figure 8. Of the funds spent on remedial actions, about
$49 million was paid to contractors to conduct remedial action work and
about $4 million was paid to the state of Utah to oversee the management

of the cleanup and to the Bureau of Reclamation 1 to oversee the contractors
and other work related to the remedial actions. EPA entered into a
settlement with responsible parties- former owners and operators of the
site- under which these parties paid funds towards the cost of

cleaning up the site. According to the EPA remedial project manager for the
site, the majority of the costs of the cleanup of the Sharon Steel site were
paid out of the settlement.

1 The Bureau of Reclamation, an agency within the Department of the
Interior, manages, develops, and protects water and related resources.

Figure 8: Federal Expenditures at the Sharon Steel Superfund Site

Removal actions $2.8 million (4%) Design $4.3 million (6%) Study $6.1
million (8%)

Other $9.7 million (13%) Remedial actions $52.8 million (70%)

Note: Percentages do not add up to 100 due to rounding. Source: GAO's
analysis of EPA data.

We were unable to determine what portion of the prime remedial action
contractors' costs was attributable to physical cleanup at the site. This
information was unavailable because the fixed- price contracts used to
accomplish remedial action work at the site did not require the prime

contractors to break down their costs. Contractors at the two operable units
received a total of about $49 million for remedial action work. The cost of
the remedial action for the first operable unit- the tailings pile and
milling area- was $29.6 million. A cap was constructed over the tailings
pile to prevent further airborne spread of contaminants and keep rainwater
from seeping through the pile and then

contaminating groundwater. To construct the cap, layers of dirt and other
materials were placed on top of the tailings pile. One layer of the cap,
designed to be as protective as 2 feet of clay, consisted of over 7.3
million square feet of material and took 3 months to install. Another layer,
a flexible liner, consisted of 6.7 million square feet of material. The
cap's materials and installation cost $17.9 million. In addition, at least
2.3 million

cubic yards of tailings and contaminated soil were excavated at the first
operable unit. The cost of this work and of spraying water to reduce dust

and compact soil, was $7. 6 million. Other costs were incurred at the
operable unit to repair wetlands, construct an interceptor trench to capture
rainwater and guide it away from the tailings pile, and construct monitoring

wells. The total cost of the remedial action work at the second operable
unit was about $19.6 million. This operable unit consisted of about 600
properties surrounding the tailings pile and milling area that were
contaminated with windblown tailings. To clean up these properties,
contractors removed soil contaminated with lead in concentrations of over
500 ppm and soils with arsenic in concentrations of over 70 ppm. Contractors
removed a total of

about 188, 800 cubic yards of soil from the properties, replaced it with
clean soil, and relandscaped the area. The contaminated soil was placed at
the first operable unit to be capped.

Significant Cost The $49.2 million paid to contractors for implementing the
remedial action

Changes and Other at both operable units of the Sharon Steel site was about
15 percent greater than the $42.7 million estimate originally agreed to by
the state and the

Remedy contractors. Most of this increase was attributable to increases in
the cost Implementation Issues

of work at the first operable unit, including the cap's construction. Utah
entered into a contract with the contractor, Ogden Remediation Services
Company, Incorporated, to construct the cap for about $24 million. While

the cleanup work was being done, the state and the contractor negotiated
revisions to the contract that increased the cost of the work by a net
amount of $5.6 million (a 23.5- percent increase at the first operable
unit). Two of the revisions- for increases of $2 million and $3.6 million-
accounted for most of the cost increases at the operable unit.

According to state officials, the $2 million cost increase was due primarily
to a need for more water to control dust and compact soil. Originally, the
Bureau of Reclamation, which conducted the design and oversight work at the
site, estimated that about 2.5 million gallons would be needed. The actual
amount needed- 71 million gallons- was nearly 30 times greater than
originally estimated. According to Utah officials, the state would not have
been able to pay for the additional water at the original price per gallon.
Through negotiations, the price was reduced to a level that the state could
afford to pay. The $3.6 million cost increase occurred because the
quantities of various materials used at the site were higher than estimated.
For example, according to state officials, the contractor needed more earth
to mix with

or cover the tailings. In this instance, the price the contractor charged
per unit of earth moved did not change, and the state was required to pay
the full additional cost. The current owner of the first operable unit at
the site had concerns about the 500- ppm cleanup standard for lead in soil
at the Sharon Steel site because other nearby Superfund sites had been
cleaned up to less stringent standards. Although the owner had not estimated
how much the cleanup of the second operable unit would have cost if the
cleanup standard for lead had been less stringent, he noted that the 500-
ppm standard entailed

cleanups of more properties and, therefore, higher costs. According to EPA,
the 500- ppm level was consistent with the scientific model it uses to
determine the safe level of lead in soil. According to state officials, the
contractor that conducted work at the first

operable unit performed very well, and the contractors that worked at the
second operable unit met the state's minimum performance standards or
performed well.

Current Status of All planned cleanup work has been completed at the Sharon
Steel site. EPA

Cleanup and the state of Utah have determined that the cleanup remedies at
the site

are operational and functional. However, operations and maintenance work
remains. This work includes periodically examining the soil layer in the
cap, drain systems, fences, and monitoring wells, as well as mowing the

area and controlling weeds. State officials estimate that operations and
maintenance will cost $50,000 to $100,000 per year. Currently, there are no
firm plans for redeveloping the site for future use. According to state
officials, development options are limited at this site, because a
development plan for the site was not created before the remedy was
constructed. The state did take some actions, such as evening out the level
of the cap, so the site could better accommodate redevelopment. The owner of
the first operable unit noted that, in its current state, the site is not
suitable for some redevelopment options, such as those that require large
buildings. Some redevelopment proposals the owner has received would require
additional dirt to be placed on the site to accommodate underground drainage
systems.

Enforcement and Cost EPA entered into a settlement with the responsible
parties at two

Recovery Issues Superfund sites- Sharon Steel and a nearby site called
Midvale Slag- to

pay funds toward the cleanup of the sites. Under this settlement, the
responsible parties- former owners and operators of the sites- paid EPA $62
million for cleanup actions. Relying on its initial estimate of the work
needed at the Midvale Slag site after the settlement was reached, EPA
reserved $5 million of the settlement funds for use at the Midvale Slag site
and allocated the remainder for the Sharon Steel site.

Summary of Remedial Action Work at the

Appendi x V

United Creosoting Superfund Site Background The United Creosoting Superfund
site is located in Conroe, Texas, about 40 miles north of Houston, and is
approximately 100 acres in size. It operated as a wood- preserving facility
from 1946 until 1972, where pentachlorophenol (PCP) and creosote were
applied under pressure to formed lumber, such as telephone poles and
railroad ties. During the treatment process, the facility became scarred by
the black, oily treatment chemicals, and the ground was contaminated when
wastewater from

rinsing the pressure cylinders was routed to two waste ponds located onsite.
After the facility was closed in 1972, the site was redeveloped for light
industrial use, and a residential area was built adjacent to the site.

In 1980, the county excavated soil from the site and used it as fill along
various roads in the area. Afterwards, citizens living near these roads
complained of headaches, burns, respiratory problems, and damage to the
vegetation. Subsequent investigations revealed that as a result of the wood
treatment operations, the soil at the site was contaminated with PCP,
polycyclic aromatic hydrocarbons (PAH), and to a lesser extent,

chlorinated dioxins. Many of the residential properties adjacent to the
treatment facility were also contaminated with these chemicals, possibly
from wastewater runoff or property redevelopment activities. The possibility
of human exposure to these chemicals, whether through ingestion or contact,
posed a significant health threat. All of the chemicals are thought to be
human carcinogens, and exposure to PAHs can irritate the eyes and skin. PCP
is extremely toxic, potentially leading to circulatory system damage and
heart failure even in small doses.

In August 1982, the Texas Natural Resources Conservation Commission, a state
environmental agency, referred the United Creosoting site to EPA as a
candidate for the National Priorities List. EPA proposed the site for the
National Priorities List in September 1983 and directed the owner of the
industrial portion of the site to conduct an immediate response action,
regrading soil and diverting water from the residential area, capping the
soil with a synthetic membrane and clay, and restricting access to the site.
EPA entered into a cooperative agreement with the state in 1984 that made
the state responsible for contracting for, and providing day- to- day
oversight of, the site study and remedial action. The state contracted with
various private entities to conduct this work. Roy F. Weston, Inc. (Weston),
was

chosen to conduct the remedial investigation and feasibility study. Weston's
May 1986 final investigation report substantiated the presence of PCP, PAHs,
and dioxin compounds and estimated that about 115, 000 tons of soil required
remediation. 1 In a 1986 record of decision, EPA selected the following
cleanup remedies for the site: (1) purchase and demolition of seven
residential properties adjacent to the waste pond area, (2) excavation and
consolidation of residential property soils contaminated above health- based
levels, (3) construction of a temporary cap over the pond area, and (4)
natural attenuation of the groundwater contamination. EPA decided to defer a

decision on how to clean up soil on the site. At that time, EPA's rules
required dioxin- contaminated soil to be incinerated prior to disposal, and
no off- site facility had a permit to incinerate this type of waste. On-
site incineration was not considered feasible because of nearby residences.
EPA decided to evaluate the feasibility of using innovative technologies for
treating the contaminated soil.

EPA issued a second record of decision in 1989, proposing a permanent remedy
for the soil that would use critical fluid extraction, an approach that uses
a chemical process to separate contaminants from soil. The treated soil
would then be returned to the industrial site. The cost of this approach,
estimated to be $22 million, was in the middle of the costs for the five
remedies considered, which ranged from $2 million to $190 million. The other
remedies included building a cap over the untreated soil to prevent human
exposure, incinerating and replacing soil, treating the soil 1 The report
estimated about 72, 000 cubic yards of contaminated soil. This figure was
converted to 115,000 tons by applying Weston's conversion factor of about
1.6 tons per cubic

yard.

with microbes that would break down the contaminants, and excavating soil
for incineration off- site.

As discussed later in this appendix, the critical fluid extraction
technology proved ineffective and was abandoned. When another study of the
site determined that 30,000 tons of soil- instead of 115, 000 tons as
originally estimated- needed to be addressed and regulatory changes allowed
soil containing dioxin to be disposed of on land, EPA amended the 1989
record of decision to allow for excavating and disposing of the soil off-
site. This

remedy was completed in August 1999. Table 6 summarizes the major events at
the site since it was added to the National Priorities List.

Table 6: Major Events in the Cleanup of the United Creosoting Site Date
Event

Sept. 1983 EPA proposes the site for the National Priorities List Dec. 1984
The remedial investigation is begun to estimate the extent and magnitude of
the contamination. Sept. 1986 EPA issues a record of decision for a
temporary remedy. Sept. 1989 EPA issues a second record of decision, calling
for the use of fluid extraction to separate and remove contaminants from
soil. Oct. 1990 Remedial action work on the residential properties begins.
Jan. 1993 Remediation of these residential properties is considered
substantially complete. Dec. 1994 Remedial action- fluid extraction- begins
on the industrial property Feb. 1998 The contract for fluid extraction is
terminated for failure to perform.

Sept. 1998 EPA amends the record of decision to revise the remedy for the
industrial site. Aug. 1999 All remedial action at the site is completed.

Cleanup Costs and As of May 31, 1999, about $38.7 million in federal funds
had been spent at Major Components

the United Creosoting site. As figure 9 illustrates, about $33 million (85
percent) went to the remedial action contractors that implemented the
cleanup remedy.

Figure 9: Federal Expenditures at the United Creosoting Superfund Site

Study $1.5 million (4%) Design $1.6 million (4%) Other $2.6 million (7%)

Remedial actions $33 million (85%)

Note: The cost of removals which is less than 1 percent of EPA's total
spending is included in remedial actions. Source: GAO's analysis of EPA
data.

Although EPA's financial reporting system indicated that $33 million had
been spent on remedial action costs as of May 1999, as of August 1999,
remedial action costs had grown to $40.9 million. About $33 million (81
percent) of this amount went to contractors generally associated with
physical cleanup activities. The other $7. 9 million (19 percent) went to
the

engineering and oversight contractor and to the Texas Natural Resources
Conservation Commission (a state environmental agency), both of which
performed oversight and technical functions but did not generally do onsite

cleanup. Remedial action at the United Creosoting site occurred in three
major phases. 2 First, EPA and the state addressed the contaminated
residential properties, incurring costs of about $1. 8 million to purchase 7

contaminated residential properties and relocate the residents of 61
properties to rental housing for about 6 months. In addition, the state
contracted with a private firm- Qualtec, Inc.- to clean up the 2 The dollar
figures for these remedial action components do not include about $700, 000
paid to the Texas Natural Resource Conservation Commission for oversight and
management.

contaminated residential properties. Qualtec excavated soil from these
properties and moved it to the United Creosoting site, backfilled the
properties with clean soil, and restored the landscaping. Excavation at some
residential properties went to depths of 5 feet before contaminant
concentrations were considered safe. Figure 10 illustrates the excavation
work at one of these properties. The costs for Qualtec's work totaled about
$2. 8 million.

Figure 10: Residential Excavation Work at United Creosoting Site

Residential Yard During Excavation Residential Yard Before Excavation

Excavation levels went to depths of five feet. Source: Texas Natural
Resources Conservation Commission

The second major phase included cleaning up the contaminated soil at the
industrial property using the critical fluid extraction technology. The
total costs of this phase amounted to about $30.2 million and can be broken
down into several major components. First, the state contracted with CF
Environmental Corporation, the firm that developed the treatment technology,
to construct and operate the treatment plant. The total cost of designing
the facility, fabricating the equipment, and erecting the plant was

about $12.6 million. Figure 11 presents both aerial and close- up views of
the completed treatment plant. The facility was expected to clean about
115,000 tons of contaminated soil, but after more than a year of repeated
efforts, it proved unable to clean soil in the volumes required, and the
state terminated the contract. The total cost of the contractor's efforts,
including the $12. 6 million spent for the plant, was about $14.1 million.
The state had also contracted with another firm- Anderson Columbia
Environmental- to excavate contaminated soil and deliver it to the treatment
facility. Because the treatment facility could not process the contaminated
soil in the volumes expected, Anderson was substantially idle during much of
the 10- month period that CF Environmental tried to operate its facility.
Nonetheless, the state was contractually obligated to pay Anderson Columbia
Environmental for its work crew while the crew was on stand- by

status. The total costs for working and standing by amounted to about $11.2
million. In addition, Weston was paid about $4. 7 million for its
engineering and site management efforts during this phase of the remedial

work.

Figure 11: Soil Treatment Plant at United Creosoting Site

Excavated Soil Preparation Facility Onsite Distributing Company Soil
Processing and Treatment Facility Tanglewood Residential Subdivision

Chemical Extraction Plant Chemical Extraction Plant

View From North to South End of Processing Plant

Source: Texas Natural Resources Conservation Commission.

The third major phase of the remedial action occurred after the state
terminated the contract for the treatment facility and a follow- up site
study revealed that the quantity of contaminated soil at the site (about 30,
000 tons) was much smaller than originally estimated (115, 000 tons). This
phase involved the excavn and off- site disposal of contaminated soils from
the industrial facility, an approach that became (1) possible because of a
regulatory change and (2) financially feasible with a smaller volume of
contaminated soil. The state, in January 1999, competitively awarded a

lump- sum contract to Remedial Construction Services, Inc. (ReCon), for
about $4. 7 million. There was one amendment to the contract, valued at
about $340,000, which reflected negotiated increases in the original
estimate for several required tasks that the state had omitted in the
original contract. The total costs for excavation and removal under this
third phase was $5.1 million.

Significant Cost The United Creosoting site was cleaned up for less than the
estimated cost.

Changes and Other The total estimated cost of the cleanup was about $45.2
million, or $4. 3

million more than the cost of the cleanup as of August 1999, then about
Remedy

$40.9 million. However, the total estimated cost of the fluid extraction
Implementation Issues

remedy was $36.5 million. If EPA had obtained better information about the
extent of the site's contamination when it selected the extraction treatment
remedy, the site's total estimated cleanup cost would likely have been much
lower than $45.2 million. Furthermore, if the extraction remedy had been
terminated sooner, the cost of implementing the failed remedy would have
been lower.

Overestimate of Contaminated EPA's selection in 1989 of the critical fluid
extraction technology was based Soil Quantities May Have

on the assumption that 115,000 tons of contaminated soil would have to be
Increased Project's Costs

cleaned. This assumption, derived from the remedial investigation and
feasibility studies that Weston conducted at a cost of $1 million from 1984
to July 1990, proved to be greatly overstated. While the extraction remedy

was being implemented, the state of Texas and EPA directed Weston to conduct
additional studies of soil contamination after testing showed that
supposedly contaminated soil was not contaminated. These studies concluded
that about 30,000 tons of contaminated soil would require excavation- about
one- fourth as much as estimated earlier. According to Weston, the original
estimate was based on a study that used fewer samples per volume of soil
than the later studies. Because the later studies included more samples per
unit of soil, they produced a more detailed picture of the actual level of
contamination. According to Weston, its earlier actions, which were approved
by Texas and EPA, were consistent with the policies, guidelines and
procedures used to investigate cleanup sites and its

estimates of soil volume were sound, given the data available at that time.
According to the state's project manager, if the second estimate had been
available at the start, the same remedy might have been selected but a

smaller, less expensive treatment facility might have been constructed to
clean the soil at a slower pace.

An Earlier Decision to Terminate Under its contract with the state, CF
Environmental was required to clean the Failed Remedy Could Have

about 6, 800 tons of soil per month. However, the facility was never able to
Lowered Costs

clean soil at this rate. During the 10 months from April 1997 to February
1998, CF Environmental successfully treated only about 8,700 tons of soil.
Even though project officials believed that the treatment remedy was
probably irreparably flawed, the state gave the contractor a series of
extensions and contract amendments.

As early as May 1997, the state's project manager and construction engineer
concluded that CF Environmental would not be able to significantly improve
the system's performance. The state considered terminating the contract but
did not do so because the contractor strongly asserted that its problems
could be overcome and the Executive Director of the Texas Natural Resources
Conservation Commission urged that the contractor be allowed to continue its
efforts to resolve the problems. The system continued to operate erratically
through 1997, with no significant improvement. In January 1998, the
Executive Director recommended to the

state's environmental commissioners that the process continue. They tabled
action pending public comment. During an open meeting, the public and local
government officials voiced overwhelming support for terminating the remedy.
Soon thereafter, the state commenced actions to

terminate the contracts with CF Environmental and Anderson Columbia
Environmental. From May 1997 through June 1998, the state paid these
contractors a total of about $6.3 million, much of which might have been
avoided if the contracts had been terminated earlier. 3 According to EPA
officials, under the terms of the agency's cooperative agreement with the
state, the state and EPA project managers meet continuously to monitor
technical and contractual issues related to the site.

However, because EPA is not a party to contracts between the state and
cleanup contractors, it does not get involved in day- to- day contract
management decisions. According to the Texas project manager, EPA

decided to take a hands- off approach and leave the decision on contract
termination up to the state. According to EPA and state officials, there was
reluctance to terminating the contracts because innovative technologies were
highly favored at the time and they did not want to terminate the contracts
too quickly in light of CF Environmental's strong assertions that

solutions to the major problems were imminent. Current Status of

Under the third phase of the remedial action at the United Creosoting site,
Cleanup

contaminated soil was excavated and transported off- site for disposal as
required by May 12, 1999. The Texas Natural Resources Conservation
Commission then issued a certificate of substantial completion in June 1999.
In total, about 29, 754 tons of contaminated soil were excavated and hauled
off- site in about 1, 400 dump truck loads. All cleanup activities were 3
According to a state official, contract termination costs and payments for
the limited work that was done would still have been incurred.

completed as of August 1999, and there were no associated operations and
maintenance costs.

Enforcement and Cost Because there were no viable responsible parties for
this site, EPA and the

Recovery Issues state assumed all cleanup costs.

Comments From the Environmental

Appendi x VI Protection Agency

Appendi x VII

GAO Contacts and Staff Acknowledgments GAO Contacts James Donaghy (202) 512-
6519 Mike Hartnett (312) 220- 7677 Acknowledgments In addition to those
named above, Willie Bailey, Joseph Cook, and Stephen

Jones made key contributions to this report.

(160466) Lett er

GAO United States General Accounting Office

Page 1 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Contents

Contents Page 2 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Page 3 GAO/ RCED- 00- 22 Costs at Five Superfund Sites United States General
Accounting Office

Washington, D. C. 20548 Page 3 GAO/ RCED- 00- 22 Costs at Five Superfund
Sites

B- 284098 Page 4 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

B- 284098 Page 5 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

B- 284098 Page 6 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

B- 284098 Page 7 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

B- 284098 Page 8 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

B- 284098 Page 9 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

B- 284098 Page 10 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

B- 284098 Page 11 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

B- 284098 Page 12 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

B- 284098 Page 13 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

B- 284098 Page 14 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Page 15 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Page 16 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix I

Appendix I Summary of Remedial Action Work at the Newmark Superfund Site

Page 17 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix I Summary of Remedial Action Work at the Newmark Superfund Site

Page 18 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix I Summary of Remedial Action Work at the Newmark Superfund Site

Page 19 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix I Summary of Remedial Action Work at the Newmark Superfund Site

Page 20 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix I Summary of Remedial Action Work at the Newmark Superfund Site

Page 21 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix I Summary of Remedial Action Work at the Newmark Superfund Site

Page 22 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix I Summary of Remedial Action Work at the Newmark Superfund Site

Page 23 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix I Summary of Remedial Action Work at the Newmark Superfund Site

Page 24 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix I Summary of Remedial Action Work at the Newmark Superfund Site

Page 25 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Page 26 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix II

Appendix II Summary of Remedial Action Work at the NL Industries Superfund
Site

Page 27 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix II Summary of Remedial Action Work at the NL Industries Superfund
Site

Page 28 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix II Summary of Remedial Action Work at the NL Industries Superfund
Site

Page 29 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix II Summary of Remedial Action Work at the NL Industries Superfund
Site

Page 30 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix II Summary of Remedial Action Work at the NL Industries Superfund
Site

Page 31 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix II Summary of Remedial Action Work at the NL Industries Superfund
Site

Page 32 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Page 33 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix III

Appendix III Summary of Remedial Action Work at the Raymark Superfund Site

Page 34 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix III Summary of Remedial Action Work at the Raymark Superfund Site

Page 35 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix III Summary of Remedial Action Work at the Raymark Superfund Site

Page 36 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix III Summary of Remedial Action Work at the Raymark Superfund Site

Page 37 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix III Summary of Remedial Action Work at the Raymark Superfund Site

Page 38 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Page 39 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix IV

Appendix IV Summary of Remedial Action Work at the Sharon Steel Superfund
Site

Page 40 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix IV Summary of Remedial Action Work at the Sharon Steel Superfund
Site

Page 41 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix IV Summary of Remedial Action Work at the Sharon Steel Superfund
Site

Page 42 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix IV Summary of Remedial Action Work at the Sharon Steel Superfund
Site

Page 43 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix IV Summary of Remedial Action Work at the Sharon Steel Superfund
Site

Page 44 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix IV Summary of Remedial Action Work at the Sharon Steel Superfund
Site

Page 45 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix IV Summary of Remedial Action Work at the Sharon Steel Superfund
Site

Page 46 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Page 47 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 48 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 49 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 50 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 51 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 52 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 53 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 54 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 55 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 56 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 57 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 58 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix V Summary of Remedial Action Work at the United Creosoting
Superfund Site

Page 59 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Page 60 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix VI

Appendix VI Comments From the Environmental Protection Agency

Page 61 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Page 62 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

Appendix VII

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Page 64 GAO/ RCED- 00- 22 Costs at Five Superfund Sites

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