Superfund: Progress Made by EPA and Other Federal Agencies to Resolve
Program Management Issues (Chapter Report, 04/29/99, GAO/RCED-99-111).
Pursuant to a congressional request, GAO provided information on: (1)
the efforts that the Environmental Protection Agency (EPA) and the other
federal agencies with major cleanup responsibilities have made to set
priorities for spending limited cleanup funds at the hazardous waste
sites posing the highest risks to human health and the environment; (2)
EPA's actions to recover its expenditures for cleanups from the parties
that are legally liable for the contamination; and (3) EPA's efforts to
better control contractors' cleanup costs.
GAO noted that: (1) for several years, GAO has included the Superfund
program on its list of federal programs that pose significant financial
risk to the government and potential for waste and abuse; (2) agencies
have corrected some of these problems, but those that remain are
important enough to prevent GAO from removing Superfund from the
high-risk list; (3) 4 of the 5 agencies GAO reviewed--EPA, the
Department of Agriculture, the Department of Defense, and the Department
of Energy (DOE)--are setting cleanup priorities on the basis of the
relative risk that sites pose to human health and the environment; (4)
EPA, Agriculture, and Defense set nationwide priorities for most of
their sites; (5) however, EPA may not know about all high-risk sites
because states are taking on more cleanups and deciding, often on the
basis of factors other than risk, which sites to refer to EPA for
possible listing; (6) each DOE facility considers risk and other factors
when setting priorities among its competing environmental management
projects; (7) however, cleanups at one facility do not compete with
those at another facility on a nationwide basis; (8) the Bureau of Land
Management has not set nationwide cleanup priorities because it has not
yet developed an overall cleanup strategy or an inventory of its
hazardous waste sites, estimated to cost billions of dollars to address;
(9) although EPA has succeeded in getting responsible parties to conduct
70 percent of long-term Superfund cleanups, it has been less successful
in recovering its costs from responsible parties when it conducts a
cleanup; (10) EPA has lost the opportunity to collect almost $2 billion
it spent on cleaning up sites since the program began because it
excluded large portions of its indirect costs when it calculated what
costs to assess parties; (11) while EPA has developed a new method of
calculating these costs that could increase their recovery, the agency
has not implemented it; (12) EPA has eliminated almost all of its
backlog of 500 required Superfund contract audits, and is trying to
complete the new audits on time; (13) however, some of EPA's actions
have been slow and have not gone far enough to address GAO's concerns
that the agency was not using its own estimates of what contract work
should cost to negotiate the best contract price for the government or
to control contractors' program support costs; and (14) less money is
going toward the actual cleanup of high-risk sites, and excessive
amounts are still being spent on administrative support costs.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-99-111
TITLE: Superfund: Progress Made by EPA and Other Federal Agencies
to Resolve Program Management Issues
DATE: 04/29/99
SUBJECT: Environmental monitoring
Cost control
Hazardous substances
Contract administration
Waste disposal
Liability (legal)
Pollution control
Interagency relations
IDENTIFIER: Superfund Program
EPA National Priorities List
Central Hazardous Materials Fund
GAO High Risk Program
EPA Comprehensive Environmental Response, Compensation,
and Liability Information System
EPA Contracts 2000 Initiative
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SUPERFUND: Progress Made by EPA and Other Federal Agencies to
Resolve Program Management Issues GAO/RCED-99-111 United States
General Accounting Office
GAO Report to Congressional Requesters
April 1999 SUPERFUND Progress Made by EPA and Other Federal
Agencies to Resolve Program Management Issues
GAO/RCED-99-111
GAO/RCED-99-111
GAO United States General Accounting Office
Washington, D. C. 20548 Resources, Community, and Economic
Development Division
B-282170 April 29, 1999 Congressional Requesters This report
addresses whether EPA and other selected federal agencies are
setting risk- based cleanup priorities under the Superfund law and
whether EPA is recovering cleanup costs and managing its cleanup
contractors as efficiently as possible. We are making
recommendations to the Administrator of EPA designed to improve
the agency's information on and management of cleanups of high-
risk sites, maximize EPA's recovery of cleanup costs, and help
prevent EPA from incurring unnecessary costs for contractors'
work.
We are also making recommendations to the Secretary of Defense and
the Secretary of Agriculture, to coordinate their efforts to
address hazardous wastes generated by the Department of Defense's
activities on National Forest System lands, and to the Secretary
of the Interior, to direct the Bureau of Land Management to
develop a comprehensive strategy to identify and clean up
hazardous waste sites. We are sending copies of this report to the
Honorable Carol Browner, Administrator, EPA; the Honorable Dan
Glickman, Secretary of Agriculture; the Honorable Mike Dombeck,
Chief, Forest Service; the Honorable William Cohen, Secretary of
Defense; the Honorable Bill Richardson, Secretary of Energy; the
Honorable Bruce Babbitt, Secretary of the Interior; the Honorable
Tom Fry, Director, Bureau of Land Management; and the Honorable
Jacob Lew, Director, Office of Management and Budget. Copies will
also be made available to others on request.
If you or your staff have any questions please call me on (202)
512- 4907. Major contributors to this report are listed in
appendix II.
Peter F. Guerrero Director, Environmental
Protection Issues
B-282170 List of Congressional Requesters The Honorable John H.
Chafee Chairman, Committee on Environment
and Public Works United States Senate
The Honorable Tom Bliley Chairman The Honorable John D. Dingell
Ranking Minority Member Committee on Commerce House of
Representatives
The Honorable Michael G. Oxley Chairman, Subcommittee on Finance
and Hazardous Materials Committee on Commerce House of
Representatives
The Honorable Bud Shuster Chairman The Honorable James L. Oberstar
Ranking Minority Member Committee on Transportation
and Infrastructure House of Representatives
The Honorable Sherwood L. Boehlert Chairman The Honorable Robert
A. Borski Ranking Minority Member Subcommittee on Water
Resources and Environment Committee on Transportation and
Infrastructure House of Representatives
GAO/RCED-99-111 Superfund Program Management Issues Page 2
B-282170
GAO/RCED-99-111 Superfund Program Management Issues Page 3
Executive Summary Purpose The magnitude of the nation's hazardous
waste problem calls for making
effective use of limited available funds. Current estimates
indicate that cleanups are expected to cost the federal government
about $300 billion and the private sector hundreds of billions
more. Since the early 1990s, GAO has identified several long-
standing management problems with the Environmental Protection
Agency's (EPA) Superfund program, created under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980.
These problems have hindered the agency's ability to effectively
manage cleanups of the nation's most hazardous sites. 1 This
report assesses (1) the efforts that EPA and the other federal
agencies with major cleanup responsibilities have made to set
priorities for spending limited cleanup funds at the sites posing
the highest risks, (2) EPA's actions to recover its expenditures
for cleanups from the parties that are legally liable for the
contamination, and (3) EPA's efforts to better control
contractors' cleanup costs.
Results in Brief For several years, GAO has included the Superfund
program on its list of federal programs that pose significant
financial risk to the government and
potential for waste and abuse. Agencies have corrected some of
these problems, but those that remain are important enough to
prevent GAO from removing Superfund from the high- risk list. For
example, four of the five agencies GAO reviewed EPA, Agriculture,
Defense, and Energy are setting cleanup priorities on the basis of
the relative risk that sites pose to human health and the
environment. 2 EPA, Agriculture, and Defense set nationwide
priorities for most of their sites. However, EPA may not know
about all high- risk sites because states are taking on more
cleanups and deciding, often on the basis of factors other than
risk, which sites, if any, to refer to EPA for possible listing.
Each Energy facility, such as a national laboratory, considers
risk and other factors when setting priorities among its competing
environmental management projects. However, cleanups at one
facility do not currently compete with those at another facility
on a nationwide basis. Energy maintains that because each facility
is unique, locally set priorities are more appropriate. Finally,
Interior's Bureau of Land Management has not set nationwide
cleanup priorities because it has not yet developed an overall
cleanup strategy or an inventory of its hazardous waste sites,
estimated to cost billions of dollars to address.
1 High- Risk Series: Superfund Program Management (GAO/HR-93-10,
Dec. 1992; GAO/HR-95-12, Feb. 1995; GAO/HR-97-14, Feb. 1997; and
GAO/OCG-99-17, Jan. 1999). 2 All federal agencies have agreed in
principle to address their highest- risk sites first. Although
each agency employs its own methods to assess risks, each
considers risks to human health and the environment along with
other issues, such as community concerns and cost- effectiveness,
when prioritizing cleanups.
GAO/RCED-99-111 Superfund Program Management Issues Page 4
Executive Summary
Although EPA has succeeded in getting responsible parties to
conduct 70 percent of long- term Superfund cleanups, it has been
less successful in recovering its costs from responsible parties
when it conducts a cleanup. EPA has lost the opportunity to
collect almost $2 billion it spent on cleaning up sites since the
program began because it excluded large portions of its indirect
costs the agency's costs to administer the program when it
calculated what costs to assess parties. While EPA has developed a
new method of calculating these costs that could increase their
recovery, the agency has not yet implemented it. Until it does so,
it will continue to lose funds that it could use for cleanups at
additional sites. EPA also has not established measures that
compare the amount of costs recovered with the amount that was
potentially recoverable to better evaluate its overall
performance.
In response to GAO's past concerns, EPA has eliminated almost all
of its backlog of 500 required Superfund contract audits, a key
tool for helping to deter contractors from fraud, waste, and
abuse, and is trying to complete new audits on time. However, some
of EPA's actions have been slow and have not gone far enough to
address GAO's concerns that the agency was not using its own
estimates of what contract work should cost to negotiate the best
contract price for the government or to control contractors'
program support costs, such as the costs for rent and managers'
salaries. While EPA is now more frequently using its own estimates
of what cleanup actions should cost to negotiate contract prices,
some regional staff lack cost- estimating experience and training,
as well as historical site- specific data on actual cleanup costs,
to help them develop more accurate estimates and better negotiate
contract prices. EPA took a number of actions to reduce the amount
of money it was paying to contractors for program support costs
instead of actual cleanup work. However, its actions have not gone
far enough, as indicated by the fact that the program support
costs for 10 of 15 new contracts exceed EPA's target of 11 percent
of total cleanup costs. The program support cost for the 10
contracts ranged from 16 to 76 percent, with a median of 28
percent. As a result, less money is going toward the actual
cleanup of high- risk sites, and excessive amounts are still being
spent on administrative support costs.
This report contains recommendations to improve agencies'
consideration of risk in setting funding priorities and EPA's
ability to recover and control costs.
GAO/RCED-99-111 Superfund Program Management Issues Page 5
Executive Summary
Principal Findings Most Agencies Are Using Risk as a Factor to Set
Cleanup Funding Priorities
EPA, Agriculture, Defense, and Energy have made progress over the
years and are setting priorities for their limited cleanup funds
on the basis of sites' risks, among other factors, while Interior
has not developed an inventory of sites in order to set priorities
among them. 3 EPA funds cleanups at those sites already on its
National Priorities List according to the risks that they pose,
but it is not necessarily placing the riskiest sites on its list.
According to cleanup managers in 4 of EPA's 10 regions, the states
are now deciding to address more of the sites that are risky
enough to be eligible for the federal Superfund program under
their own state programs. Furthermore, since 1995, EPA has been
seeking concurrence from a state's governor to include a site on
its list and has obtained such concurrence for 123 sites but not
for another 31 sites. As a result of this trend toward more state
cleanups, EPA expects that states will refer sites to it for
cleanup on the basis of difficulty and expense, rather than risk.
For example, EPA anticipates the referral of sites requiring many
years of groundwater cleanup and sites with no financially viable
parties available to pay for cleanup. The main problem EPA regions
have with this trend is that once a state begins managing a site's
cleanup, EPA has little or no information on its status. A small
subset of these sites are of great concern to EPA because, for
example, the contaminants are particularly hazardous, responsible
parties are recalcitrant, or local communities have come to EPA
with complaints and questions about cleanup. Most of the EPA
regions in this review would like the states to provide more
information on the status of these sites so that they can better
plan their own workload in the event that a state later seeks
EPA's involvement and so that they can be more responsive to
citizens' inquiries.
Since February 1997, Agriculture more specifically its agency with
the largest potential cleanup workload to date, the Forest Service
has taken a number of actions to complete its inventory of sites,
set priorities among them nationwide, and obtain additional
cleanup funding for them. Defense has also further implemented its
process to set risk- based priorities. The Department has five
primary components in its environmental cleanup program one for
each of the three military services; one for all Defense- wide
agencies, such as the Defense Logistics Agency; and one for
formerly used Defense sites. Each component follows a process that
the Department established in order to request and allocate
cleanup funds
3 The departments of Agriculture, Defense, Energy, and the
Interior are responsible for the largest number of federal
facilities cleanups.
GAO/RCED-99-111 Superfund Program Management Issues Page 6
Executive Summary
according to risk- based priorities for its nationwide backlog of
sites. While Defense formerly tried to set priorities across its
components, it no longer does so, in part because each component
receives its own, separate cleanup appropriation. Instead, Defense
established department- wide cleanup goals on the basis of risk
and monitors to make sure the components fund and achieve these
goals. According to the Department's environmental budget
examiner, the components have been receiving sufficient funds each
year to meet their goals for addressing high- risk sites.
At Energy, each field operations office or facility, such as a
large laboratory, uses its own methodology to set risk- based
priorities for the cleanup projects that it manages. In March
1995, we reported concerns because the Department was not
allocating funds across its field operations offices on the basis
of risk. To date, the Department has not taken action in response
to our recommendation that it set nationwide priorities, stating
that this would interfere with priorities already set with local
communities and other stakeholders at each of its facilities on
the basis of each facility's unique contamination, activities, and
cleanup requirements. Furthermore, the agency stated that while it
does provide the same amount of environmental management funds to
each facility from year to year, the proportion of funds allocated
to any one of its facilities was based on the amount and type of
work and the risks at that site. Interior's Bureau of Land
Management has yet to complete an inventory of its contaminated
sites a problem we first identified in 1987. 4 The Bureau must
complete this step in order to set priorities, estimate necessary
resources, and develop a cleanup strategy that considers using
Superfund authority as a tool to get private parties to help pay
for some cleanups. Until then, some Interior sites could continue
to pose health and environmental risks and increased cleanup costs
for the government if contamination spreads and responsible
parties are no longer able to pay.
EPA Could Recover More Costs and Adopt Better Performance Measures
For the past several years, EPA has consistently succeeded in
getting responsible parties to conduct about 70 percent of long-
term cleanups, one of its main goals for the program. If EPA
cleans up a Superfund site, its next goal is to seek the recovery
from responsible parties, where appropriate, of 100 percent of the
federal funds expended at the site. However, EPA has lost the
opportunity to recover about $2 billion from responsible parties
because the methodology it used to calculate the amount of
indirect costs the administrative costs of operating the program
that it would
4 Superfund: Civilian Federal Agencies Slow to Clean Up Hazardous
Waste (GAO/RCED-87-153, July 24, 1987).
GAO/RCED-99-111 Superfund Program Management Issues Page 7
Executive Summary
charge these parties when settling cost recovery cases excluded a
large portion of these costs. Following federal accounting
standards, EPA has developed a new methodology that more
accurately accounts for these costs. Cost recovery program
managers estimate that using the new methodology could increase
recoveries in cases yet to be settled by about $629 million. The
cost recovery program has not yet implemented the new methodology
because it is waiting for approval from EPA; the Department of
Justice, which litigates cost recovery cases; and an independent
accounting firm hired to review the methodology. Until EPA uses
the new methodology, it will continue to lose the opportunity to
recover these funds.
According to EPA's cost recovery data as of the end of fiscal year
1998, the most recent data at the time of GAO's review, the agency
had agreements to recover a total of about $2.4 billion since the
beginning of the program. The agency spent a total of $15.9
billion in the Superfund program during this same period, but not
all of this amount is recoverable. At some sites, for instance,
there were no financially viable parties. Because EPA does not
have a cost recovery performance measure that compares annually
the amount of costs it recovers with the amount of costs it had
the potential to recover, the agency cannot determine how well it
is performing its cost recovery activities. The agency is
concerned that developing such a recovery rate might be
misinterpreted by settling parties as a willingness to settle for
less than 100 percent of the recoverable costs in all cases and
could therefore jeopardize its negotiations. In addition, EPA
notes that it cannot control some factors that influence the
amount of funds it can recover, such as the percentage of cleanups
with financially viable responsible parties.
EPA Has Reduced Its Audit Backlog and Improved Some of Its Cost
Estimates but Still Does Not Effectively Control Contractors'
Cleanup Costs
EPA relies heavily on private contractors to perform or manage its
cleanup activities. To deter and detect fraud, waste, and abuse by
contractors, GAO recommended in February 1997 that EPA reduce its
backlog of more than 500 required Superfund contract audits the
primary tool the agency uses to evaluate the adequacy of
contractors' policies, procedures, controls, and performance.
Depending on the size of the contractor and the amount of EPA work
that the contractor is to accomplish, either EPA's Office of
Inspector General or the Defense Contract Audit Agency is to
conduct an audit within at least 2 years of EPA's request. Since
February 1997, both agencies have eliminated almost all the
backlog and are performing new audits on time. Although GAO did
not review the quality of these audits,
GAO/RCED-99-111 Superfund Program Management Issues Page 8
Executive Summary
conducting them in a more timely manner helps ensure that
important records are maintained.
As GAO reported in February 1995 and 1997, EPA was not developing
its own estimates of what cleanup work should cost and was not
using such estimates to negotiate the best contract price for the
government. In this review, GAO tested a sample of 35 work
assignments that EPA had issued to contractors and found that the
agency had generated its own estimates for all 35 assignments. GAO
also determined that about half of those estimates closely matched
the final price set for the work. However, EPA overestimated costs
for 6 of the remaining assignments by as much as 36 percent and
underestimated costs for 11 of them by as much as 101 percent.
Such variances, according to EPA's own Financial Managers'
Financial Integrity Act report, can indicate problems with the
quality of the agency's estimates. The EPA staff that prepared
these cost estimates said their lack of experience and access to
detailed historical site- specific cost data hinder their ability
to develop accurate estimates. EPA has established a workgroup to
assess its cost- estimating procedures and to design solutions to
identified problems, including training options. The agency has
undertaken similar corrective measures in the past but has had
problems fully implementing and sustaining them over the long
term. While EPA is also collecting cost data as part of a new
Superfund contract management information system, several EPA cost
estimators are concerned that the system will collect aggregate
cost data, not the site- specific data they need to improve their
estimates. Furthermore, because cost data from prior work will not
be entered into the system, estimators will have to wait years for
the historical data they need.
Finally, as GAO reported in the past, EPA was paying too high a
percentage of funds to contractors for program support costs, such
as rent and management salaries, leaving too small a percentage
for cleanup work. One major reason for the high percentage was
that EPA retained all of its 45 Superfund contractors and
continued to pay their program support costs, even though it did
not have enough cleanup work to give to all of the contractors. In
response, EPA reduced by half the number of contractors it plans
to retain as it authorizes its new round of Superfund contracts.
However, at the time of our review, 10 of 15 new contracts
exceeded EPA's target of 11 percent for program support costs,
ranging from 16 to 76 percent, with a median of 28 percent. The
costs remain high, in part, because EPA continues to retain more
contractors than it needs and continues to pay their overhead
costs. Given that EPA expects its future Superfund workload to
decrease as states take on more cleanups, the
GAO/RCED-99-111 Superfund Program Management Issues Page 9
Executive Summary
percentage of program support costs will continue to rise unless
the agency now takes the opportunity to make adjustments when
deciding whether to exercise the contract options to renew those
contracts whose base periods are expiring soon.
The recurring problems that GAO identified raise broader questions
about EPA's contracting practices and the need for sustained
management attention to reforms. EPA currently has a Contracts
2000 initiative to consider, among other things, various contract
management options that it could use to address additional issues,
such as the need to have contracts and contract management staff
in place in each of its 10 regional offices. However, the agency
could not provide GAO with documentation describing the team's (1)
overall strategy for determining what options it would recommend
that the agency adopt and (2) time frames for implementing them.
Recommendations GAO makes a number of recommendations in this
report to improve (1) agencies' processes for ensuring that
limited cleanup dollars go to the
sites posing the highest risks, (2) EPA's ability to recover its
cleanup costs from the parties responsible for the contamination
at sites, and (3) EPA's control of contractors' costs.
Agency Comments GAO provided a draft of this report for review and
comment to EPA and the departments of Agriculture, including the
Forest Service; Defense,
including the U. S. Army Corps of Engineers; Energy; and the
Interior, including the Bureau of Land Management. GAO met with or
obtained information from officials in each of these organizations
responsible for making cleanup funding decisions, implementing
various portions of each agency's cleanup programs, and
contracting for cleanup work. The agencies provided updated
information on and technical corrections and clarifications to the
draft report, which were incorporated as appropriate. EPA,
Agriculture, Defense, and Interior generally agreed with GAO's
findings and recommendations. Energy agreed with GAO's
presentation of its process for setting risk- based priorities for
funding cleanups at individual facilities, but continues to
disagree with GAO's long- standing recommendation that it develop
a nationwide risk- based system to set cleanup priorities in order
to achieve more cost- effective cleanup progress. Energy maintains
that locally set priorities are more appropriate, given the unique
characteristics of each of its facilities, and that all of its
facilities pose high enough risks to merit steady funding. GAO
maintains
GAO/RCED-99-111 Superfund Program Management Issues Page 10
Executive Summary
that developing nationwide cleanup priorities would help the
Department make informed budget decisions and analyze trade- offs
among its facilities. Additional discussions of the agencies'
comments and GAO's responses are provided in chapters 2, 3, and 4.
GAO/RCED-99-111 Superfund Program Management Issues Page 11
Contents Executive Summary 4 Chapter 1 Introduction
14 Background on the Superfund Program 14 Prior GAO Work 19
Objectives, Scope, and Methodology 19
Chapter 2 Most Agencies Are Considering Risk in Setting Cleanup
Priorities
22 EPA Funds Its Cleanup Actions According to Risk but Is Not
Adding New Sites to the National Priorities List Solely on the
Basis of Risk
22 The Departments of Agriculture, Defense, and Energy Have Set
Risk- Based Cleanup Priorities, but Interior Has Not Yet
Identified All Sites Needing Cleanup
28 Conclusions 40 Recommendations 42 Agency Comments 43
Chapter 3 EPA Is Not Seeking to Fully Recover Its Indirect Costs
or Appropriately Evaluating Its Cost Recovery Efforts
45 EPA Continues to Lose Revenue by Excluding Some Indirect
Costs From Recovery 45
EPA's Goals and Measures Do Not Fully Reflect Progress in
Recovering Costs
47 Improved Information and Financial Systems Will Enable EPA to
Retrieve Data More Efficiently and Accurately to Support
Recoveries
50 Conclusions 51 Recommendation 52 Agency Comments 52
GAO/RCED-99-111 Superfund Program Management Issues Page 12
Contents
Chapter 4 EPA Has Improved Its Management of Superfund Contracts
but Still Does Not Effectively Control Some Cleanup Contractors'
Costs
53 Contract Audit Backlog Has Been Reduced 53 EPA Cannot Ensure
the Best Possible Price for Contracted Work 54 EPA Is Still
Experiencing Some Contract Management
Deficiencies 59
Conclusions 64 Recommendations 65 Agency Comments 66
Appendixes Appendix I: Objectives, Scope, and Methodology 68
Appendix II: Major Contributors to This Report 76
Tables Table 1.1: Number of Federal Facilities on the Docket and
on the National Priorities List as of September 1998
15 Table 2.1: Summary of Steps Four Federal Agencies Have Taken
to Set Risk- Based Priorities 29
Figures Figure 1.1: Steps Toward Including a Site on EPA's
National Priorities List
16 Figure 1.2: Cleanup Steps for Sites on the National Priorities
List 18 Figure 2.1: Status of All Sites in EPA's CERCLIS Database
27 Figure 3.1: Status of EPA's Efforts to Recover $11 Billion in
Superfund Program Costs Through Fiscal Year 1998 46
Figure 4.1: EPA's Estimate Compared With the Final Contract Price
for 35 Work Assignments
55
Abbreviations
BLM Bureau of Land Management CERCLA Comprehensive Environmental
Response, Compensation,
and Liability Act CERCLIS Comprehensive Environmental Response,
Compensation,
and Liability Information System DCAA Defense Contract Audit
Agency EPA Environmental Protection Agency NPL National Priorities
List OAM Office of Acquisition Management OMB Office of Management
and Budget OSWER Office of Solid Waste and Emergency Response
GAO/RCED-99-111 Superfund Program Management Issues Page 13
Chapter 1 Introduction
The Environmental Protection Agency (EPA) administers the federal
program for ensuring the cleanup of abandoned hazardous waste
sites that pose significant risks to public health and the
environment. EPA may compel parties responsible for the
contamination to conduct or pay for these cleanups. EPA manages
cleanups for a portion of these hazardous sites through the
Superfund program. Other federal agencies clean up sites on their
lands and can also compel parties responsible for the
contamination to conduct or pay for these cleanups. States
generally manage cleanups at sites that are not addressed in the
Superfund program. Estimates predict that the nation's total
investment in cleanups will exceed hundreds of billions of
dollars. This report assesses federal agencies' progress in
solving several problems that hinder their ability to protect this
investment.
Background on the Superfund Program
The Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) of 1980, as amended, governs cleanups of
both federal and nonfederal hazardous waste sites. The program was
originally authorized for 5 years and has been reauthorized twice,
in 1986 and 1990. EPA evaluates contaminated sites and places
those that qualify for long- term cleanup on its National
Priorities List. EPA may either order parties responsible for the
contamination to perform cleanups or clean up sites itself and
seek reimbursement from the responsible parties. 1 EPA relies
heavily on private contractors to perform or manage cleanup
activities. CERCLA also established a trust fund (the Superfund
trust fund) to pay for cleanups and related activities, financed
primarily by taxes on crude oil and chemicals. The program's
authorization, and the taxes financing the fund, expired in 1995.
The Congress continues to fund the program through annual
appropriations from the Superfund trust fund and general revenues.
2
The federal government faces an even greater potential cleanup
investment than EPA alone. Federal agencies must report potential
hazardous waste sites on lands that they administer to EPA.
Agencies clean them up using funds from their own appropriations.
3 The agencies potentially responsible for the most cleanups are
the departments of Agriculture, Defense, Energy, and the Interior.
As of September 1998, EPA
1 Parties responsible for cleanups include waste generators, site
owners and operators, transporters, and persons who arranged for
the treatment or disposal of hazardous wastes. 2 See Superfund:
Status of the Superfund Trust Fund (GAO/RCED-98-152R, Apr. 16,
1998). 3 The costs of long- term cleanup actions at federal
facilities are generally not eligible for funding from the
Superfund trust fund.
GAO/RCED-99-111 Superfund Program Management Issues Page 14
Chapter 1 Introduction
had included 2,104 of these agencies' facilities on the federal
facility docket the list of federally owned facilities that EPA is
to consider for placement on the National Priorities List and had
included a total of 173 of these facilities on the National
Priorities List. 4 (See table 1.1.)
Table 1.1: Number of Federal Facilities on the Docket and on the
National Priorities List as of September 1998 Agency Facilities on
docket Facilities on the National
Priorities List
Agriculture 182 3 Defense 974 141 Energy a 84 21 Interior 453 3
All others b 411 5
Total 2,104 173
Source: EPA's Office of Solid Waste and Emergency Response. a
Energy cleanup managers said that 3 of the Department's 21
facilities on the National Priorities List have now been
transferred to the U. S. Army Corps of Engineers, within Defense.
b Agencies in the All others category include the Central
Intelligence Agency, Commerce, EPA, General Services
Administration, Health and Human Services, Housing and Urban
Development, Justice, Labor, National Aeronautics and Space
Administration, Postal Service, Small Business Administration,
Tennessee Valley Authority, Transportation, Treasury, and Veterans
Affairs.
For a federal facility on the National Priorities List, EPA enters
into an interagency agreement under which the responsible federal
agency cleans up the facility. The agreement establishes penalties
for failure to comply with the schedule or terms of the cleanup.
In 1995, a group of representatives from federal agencies
responsible for cleanups under the Superfund program, the Federal
Facilities Policy Group, estimated that the total cost of cleaning
up these federal facilities ranges from $234 billion to more than
$300 billion over a 75- year period. 5 For fiscal years 1991
through 1999, the Congress appropriated to Agriculture, Defense,
Energy, and the Interior the four agencies included
4 A site generally refers to a specific area of contamination and
a facility to a geographically contiguous area under an agency's
ownership or control within which a contaminated site or sites are
located.
5 The Federal Facilities Policy Group was convened by the Director
of the Office of Management and Budget and the Chair of the
Council on Environmental Quality to review the current status and
future course of environmental response and restoration at federal
facilities. The group included officials from the departments of
Agriculture, Defense, Energy, and the Interior; EPA; and other
organizations.
GAO/RCED-99-111 Superfund Program Management Issues Page 15
Chapter 1 Introduction
in our review a total of almost $33 billion for hazardous waste
cleanups. 6 EPA's Site Cleanup Process Once a site has been
identified, EPA includes it in the database it uses to
track hazardous waste sites, known as the Comprehensive
Environmental Response, Compensation, and Liability Information
System (CERCLIS). The next step in EPA's cleanup process is to
assess the site to determine whether the contamination poses a
large enough health or environmental risk to qualify for a long-
term cleanup under the Superfund program. (See fig. 1.1.)
Figure 1.1: Steps Toward Including a Site on EPA's National
Priorities List
6 The $33 billion includes approximately $18.2 billion for
Defense, $13.8 billion for Energy, $0.5 billion for Interior, and
$0.2 billion for Agriculture.
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Chapter 1 Introduction
For nonfederal sites, EPA or the state in which the potentially
contaminated site is located conducts the assessment. The
responsible federal agencies assess their own sites that are on
the federal facility docket. EPA then uses the data from these
assessments to calculate a site's potential risks by using its
hazard ranking system. This system assesses potential risks to
humans and sensitive environments, such as wetlands, from exposure
to contamination at the site through four pathways soil,
groundwater, surface water, and air. Each site receives a score
ranging from 0 to 100, and sites that score above 28.5 in this
system are eligible to be considered for placement on EPA's
National Priorities List. Only sites on this list may receive
long- term cleanups financed by the Superfund trust fund.
EPA, typically with a state's concurrence, proposes that an
eligible site be placed on the agency's National Priorities List.
Once EPA places the site on the list, it generally receives a more
extensive investigation of the risks it poses and an evaluation of
alternative cleanup methods to address these risks. After one or
more cleanup methods are selected, the cleanup is designed and
implemented, either by EPA or by the responsible parties under
EPA's oversight. (See fig. 1.2.)
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Chapter 1 Introduction
Figure 1.2: Cleanup Steps for Sites on the National Priorities
List
Once the cleanup is completed and EPA considers that the site no
longer poses a risk to human health or the environment, EPA may
remove the site from the National Priorities List and delete it
from CERCLIS.
EPA's Office of Solid Waste and Emergency Response (OSWER)
administers the Superfund program, setting its policy and
direction through the Office of Emergency and Remedial Response.
However, EPA's 10 regional offices award contracts for the
cleanups in their jurisdiction that the agency has decided to
fund, manage cleanup activities at these sites, monitor private
parties' and federal agencies' cleanups, and determine when to
propose new sites for the program or delete completed sites.
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Chapter 1 Introduction
Prior GAO Work In 1990, we identified a group of federal programs
that could pose a significant risk of waste, fraud, abuse, and
mismanagement, as well as a
significant financial risk to the government. We included the
Superfund program in this group because of the anticipated large
federal investment and the extensive use of contractors to
implement the program. In 1992, we reported on key problems with
the Superfund program and actions EPA should take to decrease this
risk. 7 Specifically, we reported on the need (1) for EPA and
other federal agencies to give greater consideration to the
relative risks of sites when setting priorities for using their
limited cleanup funds; (2) for EPA to improve its limited recovery
of cleanup costs from responsible parties; and (3) for EPA to
correct poor contract management practices and inadequate controls
over contractors' costs. Since we issued our initial report in
1992, we have reviewed the agencies' progress in addressing these
issues every 2 years. 8 In 1997, we reported that (1) several
agencies had begun to implement systems that consider the relative
risks of sites when allocating cleanup funds, while other agencies
had not; (2) EPA had not resolved the cost recovery problems we
had identified; and (3) EPA still had to improve its use of
independent estimates to set the best contract prices for
cleanups, its ability to control contractors' high program
management costs, and its efforts to reduce a significant backlog
of Superfund contract audits.
Objectives, Scope, and Methodology
Given EPA's and other federal agencies' uneven progress in
responding to the concerns about the Superfund program's
management that we raised in our prior work, we initiated this
review to determine whether the agencies had now more fully
addressed these concerns and, therefore, reduced the government's
financial risks. Specifically, we wanted to assess (1) the efforts
that EPA and other federal agencies with major cleanup
responsibilities have made to set priorities for spending limited
cleanup funds at the sites posing the highest risks; (2) EPA's
actions to recover its expenditures for cleanups from the parties
that caused the contamination, and (3) EPA's efforts to better
control contractors' cleanup costs.
To respond to the first objective, we conducted interviews with
EPA site assessment managers in 4 of EPA's 10 regions with the
largest number of sites that are awaiting consideration for the
National Priorities List or have already been listed regions I
(Boston), II (New York), IV (Atlanta), and V (Chicago) and the
director, deputy director, and staff of the State,
7 High- Risk Series: Superfund Program Management (GAO/HR-93-10,
Dec. 1992). 8 High- Risk Series: Superfund Program Management
(GAO/HR-95-12, Feb. 1995; GAO/HR-97-14, Feb. 1997; and GAO/OCG-99-
17, Jan. 1999).
GAO/RCED-99-111 Superfund Program Management Issues Page 19
Chapter 1 Introduction
Tribal, and Site Identification Center within OSWER to understand
the agency's approach to assessing and listing sites. We also
interviewed the chair and 4 of 10 regional representatives on
EPA's National Prioritization Panel, which assigns nationwide
priorities for all sites that are on the National Priorities List
and are ready to construct the cleanup. We obtained and reviewed
documents that describe the criteria and weights the panel uses to
score and rank sites. In addition, we examined the panel's funding
decisions for fiscal year 1997, confirming that they were based on
the panel's ranking. To understand EPA's responsibilities and
overall approach to federal facility cleanups, we met with the
associate director of OSWER's Federal Facilities Restoration and
Reuse Office and interviewed remedial managers who oversee federal
facility cleanups in regions IV (Atlanta), V (Chicago), VIII
(Denver), IX (San Francisco), and X (Seattle). We also conducted
interviews with environmental cleanup and budget officials at the
headquarters of the departments of Agriculture, Defense, Energy,
and the Interior. As necessary, we visited regional offices to
test how field offices implemented these relative risk policies
and used relative risk to make cleanup funding decisions.
For the second objective assessing EPA's cost recovery program we
interviewed and obtained data from cost recovery program managers
in EPA headquarters and two regional offices. In EPA headquarters,
we met with the director of the Policy and Program Evaluation
Division in the Office of Site Remediation and Enforcement, Office
of Enforcement and Compliance Assurance, as well as the chief of
the Program and Cost Accounting Branch in the Financial Management
Division, Office of the Comptroller, Office of the Chief Financial
Officer. We reviewed EPA's proposed methodology on developing a
new indirect cost rate to charge to responsible parties to
identify changes from the previous method. In addition, we
analyzed EPA's 1999 annual plan for the Government Performance and
Results Act to determine the status of EPA's goals and performance
measures. We also spoke with EPA enforcement, cost recovery, and
legal staff in regions IV (Atlanta) and V (Chicago), which we
selected because of their unique and large recovery efforts,
respectively.
For the last objective assessing EPA's management of Superfund
contracts we conducted work at EPA headquarters and three EPA
regions. At headquarters, we met with Superfund program managers
in OSWER, including the deputy director, Office of Emergency and
Remedial Response and the director and senior managers, Office of
Acquisition Management, to understand EPA's contracting policies
and procedures. We also met with Superfund program and contracting
managers in regions III
GAO/RCED-99-111 Superfund Program Management Issues Page 20
Chapter 1 Introduction
(Philadelphia) and VII (Kansas City), because their Superfund
contracts had been in place for the longest time, and in Region V
(Chicago), because we had selected this region in our last review.
To test the quality and use of independent government cost
estimates to set contract prices, we conducted a detailed analysis
of a total of 35 Superfund contract work assignments initiated in
the three EPA regions from January 1, 1997, through September 30,
1997. We used this time frame because it was similar to the time
frame in our last review and would serve as a basis for
comparison. We also visited the U. S. Army Corps of Engineers in
Washington, D. C., to compare its cost- estimating practices with
EPA's. In addition, we visited a private Superfund contractor in
Region III to get a general understanding of how contractors
estimate costs for Superfund cleanup activities. We also met with
EPA's Office of the Inspector General in Washington, D. C, and
officials from the Defense Contract Audit Agency (DCAA) in Fort
Belvoir, Virginia. 9
For a more detailed description of our audit's scope and
methodology, see appendix I. We conducted our work from May 1998
through April 1999 in accordance with generally accepted
government auditing standards.
9 EPA's Office of the Inspector General audits the agency's
contractors when EPA is the primary customer for the contractor.
The Defense Contract Audit Agency conducts audits of EPA
contractors when EPA is not the primary agency providing work and
funding to the contractors.
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Chapter 2 Most Agencies Are Considering Risk in Setting Cleanup
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EPA has made progress over the years in responding to our concerns
that it was not effectively using its limited cleanup dollars by
setting funding priorities on the basis of sites' relative risks
to human health and the environment. Relative risk refers to the
risk a site poses to human health and the environment compared
with the risks posed by other sites. This comparison may also
consider other important factors, such as communities' concerns
and legal requirements. EPA now manages sites on the National
Priorities List according to a worst sites first policy. However,
EPA may not know about all high- risk sites because states now
increasingly decide which ones they will address under their own
cleanup programs and which ones they want EPA to address through
the Superfund program. Because states are managing these sites,
EPA does not have information on the status of their cleanups.
Without this information, EPA cannot assure local communities near
high- risk sites that these sites are being addressed. Nor can EPA
plan its own work in the event that the states require EPA's
assistance at these sites. Furthermore, because of the significant
federal investment still needed to clean up hazardous waste sites
on federal facilities and lands, it is important that other
federal agencies likewise use their limited cleanup dollars
efficiently by addressing the riskiest sites first. While the
departments of Agriculture, Defense, and Energy have begun using
risk to set priorities for cleanups to varying degrees, Interior,
specifically the Bureau of Land Management (BLM), has not
completed the first step developing an inventory of its hazardous
waste cleanup workload, estimated to cost billions of dollars.
EPA Funds Its Cleanup Actions According to Risk but Is Not Adding
New Sites to the National Priorities List Solely on the Basis of
Risk
For sites that EPA has already placed on its National Priorities
List and whose cleanup will be conducted or monitored by EPA, EPA
provides funding according to their relative risk. However, EPA is
not using relative risk as the primary basis for deciding what new
sites to list. States are now assuming more responsibility for
high- risk sites those that are risky enough to be eligible for
the National Priorities List. As a result, this evolving
relationship with the states has created a need for closer
coordination between EPA and the states with respect to sharing
information on the status of cleanups, deciding who should address
sites, and disseminating that information to the public.
Currently, EPA cannot ensure that some of the worst sites are
being addressed first, if at all, because some states may not be
reporting all high- risk sites to EPA and, therefore, EPA may not
know the full universe of such sites. Furthermore, states are not
always recommending sites for EPA to address through the Superfund
program because the sites present the highest risk to human
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Chapter 2 Most Agencies Are Considering Risk in Setting Cleanup
Priorities
health and the environment, but rather because they are too
difficult and too expensive for the states to address.
EPA Uses Relative Risk to Set Cleanup Priorities for Sites on the
National Priorities List
Once EPA places a site on its National Priorities List for
cleanup, the agency uses relative risk to decide which ones to
fund when priority setting is needed. Even though EPA's policy has
been to address the worst sites first since 1989, our prior work
showed that the agency's regions were setting priorities for early
phases of cleanup on the basis of other factors, such as
geographical considerations (e. g., funding equal numbers of sites
in each state). In 1997, we reported that EPA had begun to give
greater consideration to sites' relative risks when setting
priorities. 1
Since then, EPA has continued to implement a nationwide process to
set risk- based funding priorities for sites ready to begin
construction of the cleanup method because it has had more sites
to fund than dollars available. EPA does not go through a similar
process for sites in earlier cleanup phases. Because it funds most
of these sites so as not to delay them from moving through the
cleanup process, EPA officials told us that they had a relatively
small or no backlog of sites waiting to begin the earlier cleanup
phases; therefore, they did not have to set funding priorities.
In order to distribute its fiscal year 1996 funds to the backlog
of sites awaiting construction, EPA created the National Risk-
Based Prioritization Panel. This panel, which is composed of
regional and headquarters cleanup managers, is to rank all of the
sites ready to construct the cleanup method nationwide, primarily
on the basis of the risks they pose. The panel uses five weighted
criteria, four of which address health and environmental risks and
one of which addresses considerations such as cost- effectiveness.
The panel then ranks the sites and EPA, in turn, allocates funding
for these sites according to this ranking. The sites that are not
funded in one year can compete again for funding the following
year.
In our 1997 report, we determined that the panel used the ranking
process to allocate fiscal year 1996 funds. However, because the
panel process was new and the Congress did not pass EPA's
appropriations act until April of that year, we decided to
continue monitoring the agency's use of the panel process. We
found that, in fiscal year 1998, EPA ranked 50 sites and funded 38
according to the panel's ranking, at a value of more than $200
million.
1 High- Risk Series: Superfund Program Management (GAO/HR-97-14,
Feb. 1997).
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Chapter 2 Most Agencies Are Considering Risk in Setting Cleanup
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EPA Does Not Fully Control Which Sites Are Identified and Included
on the National Priorities List
EPA does not know the universe of high- risk sites remaining to be
addressed. EPA has never had its own site identification program
and relies primarily on other entities, such as states and private
citizens, to report sites for possible inclusion in the Superfund
program. Early in the program, these entities referred tens of
thousands of sites to EPA. Over time, however, according to site
assessment managers in all four regions in our review, the states
became reluctant to report sites because they wanted to avoid what
they saw as the long and costly Superfund cleanup process. As a
result, they currently do not necessarily report all high- risk
sites to EPA.
For those sites that are reported to EPA, the agency assesses the
level of potential risk posed to human health and the environment
by applying the hazard ranking system. 2 Sites scoring at least
28.5 are considered eligible for the National Priorities List but
are not automatically included. As state cleanup programs have
matured, the states have assumed a greater role in determining
which sites EPA will address under Superfund and which sites the
states will address under their own cleanup programs. Most states
have established enforcement programs similar to the Superfund
program and, more recently, have used EPA grants to help establish
voluntary cleanup programs. Consequently, many states prefer to
use their own programs to address sites, including sites with
risks high enough to make them potentially eligible for the
National Priorities List. If a state does not want to assume
responsibility for a cleanup, it can turn the site over to EPA.
The states also have a greater role in deciding which sites get
listed because EPA, as a matter of policy, seeks the relevant
state governor's concurrence before listing a site. EPA was
required to seek concurrence under appropriations laws for fiscal
years 1995 and 1996 and has since continued the practice.
According to EPA officials, some governors are reluctant to
concur, because placement on the list stigmatizes a site as one of
the worst in the country, thus discouraging development. As of
February 1999, governors had opposed the listing of 31 sites and
supported the listing of another 123 sites. Since 1995, EPA has
proposed only one site for listing without the relevant governor's
concurrence. 3
2 EPA's hazard ranking system assigns a score from 0 to 100 to
evaluate the potential risks a site poses to humans and sensitive
environments from exposure through four pathways soil,
groundwater, surface water and air. A site with a score of 28.5 or
higher is considered eligible for placement on the National
Priorities List.
3 EPA proposed the Fox River, Wisconsin, site for listing in July
1998, over the governor's objection, because of concerns raised by
EPA and other stakeholders about the lack of cleanup progress,
given the significant risks posed to wildlife and humans.
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Given increases in the states' ability to address sites combined
with EPA's policy of seeking the relevant governor's concurrence,
EPA does not propose an eligible site for the National Priorities
List until it enters into negotiations with the state to determine
whether the state plans to take any action at the site through its
own programs. If EPA anticipates that the state will clean up the
site, the agency usually assigns the site a low priority for
listing, according to cleanup managers from the four EPA regions.
In addition, the managers said that they typically do not take any
further action at these sites unless the state subsequently asks
EPA to list the site. Therefore, according to these cleanup
managers, decisions to propose sites for listing on the National
Priorities List are not based primarily on the sites' relative
risks. Instead, states turn sites over to EPA for cleanup under
the Superfund program when they have difficulties in getting
responsible parties to pay for the cleanup, for example, or when
they encounter a complex cleanup, such as one addressing
groundwater problems. Consequently, EPA cleanup managers expect
that future National Priorities List sites will be large, complex,
and thus costly to clean up or will have either recalcitrant or no
financially viable responsible parties to help pay for the
cleanup. This trend could influence the future number and types of
sites on the list. In the late 1980s to early 1990s, EPA proposed
about 76 sites, on average, per year for listing. In the mid
1990s, this number dropped to 28 because EPA decided to
concentrate more on completing cleanups for sites already listed.
Although EPA has recently stated that it expects to return to an
average listing rate of about 40 sites, this workload may depend
on states' concurrence.
EPA Lacks Information on the Status of State Cleanups As the
states' roles in cleaning up high- risk sites have increased, EPA
cleanup managers have noted that they do not know to what extent
all high- risk sites are being addressed and cannot respond to
public inquiries about the status of cleanups at the sites that
the states are addressing. EPA administers the federal cleanup of
abandoned hazardous waste sites that pose significant risks to
public health and the environment. As the states increasingly take
responsibility for cleaning up these sites outside the Superfund
program, EPA must rely on the states to report on the sites'
status. Sometimes a state may later ask that EPA increase its
involvement at a state- run cleanup.
In order to plan their own workload and to respond to public
inquiries, three of the four EPA regions in our review said that
they would like more information on the status of state- led
cleanups at certain high- risk sites that posed particular
concerns for the regions. For example, cleanup managers in EPA's
Region I in Boston predicted that although only a
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Chapter 2 Most Agencies Are Considering Risk in Setting Cleanup
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handful of sites from their region would be placed on the National
Priorities List in the future, they plan to monitor about 50
additional high- priority sites being addressed under state
programs because of risks posed by particular hazards,
recalcitrant responsible parties, or community concerns. Cleanup
managers in Region IV in Atlanta expressed similar interest in
tracking the status of certain high- priority sites in their
region that are being cleaned up outside the Superfund program.
Region II in New York is already piloting a project to monitor the
progress of state cleanups to better plan its own Superfund
workload if the state later decides to turn sites over to EPA, as
well as to provide better information to the public on the status
of these cleanups. Under the pilot project, EPA and New York are
trying to electronically link the state's database on the status
of sites with EPA's CERCLIS database so that EPA can better track
sites. According to these regional officials, one reason for New
York's willingness to cooperate in this effort is that it could
speed up the process of eliminating sites from further
consideration for the Superfund program. On the other hand,
cleanup managers in Region V said that they have enough
information on the status of cleanups and do not need a tracking
system because the states send letters to EPA notifying it that
cleanups are either under way or complete.
Lack of Communication and Coordination Between States and EPA
Means That Some High- Risk Sites Are Not Addressed
In November 1998, we reported on the need for better communication
and coordination between federal and state officials to set
priorities and determine cleanup responsibilities for high- risk
sites. 4 As of October 1998, according to EPA, the agency had
about 10,400 sites in CERCLIS the database EPA uses to track
hazardous waste sites. Of these sites, 5,977 need further
assessment or are candidates for removal from CERCLIS because no
further EPA action is required. About 1,400 sites are on the
National Priorities List. 5,6 EPA classified the remaining 3,023
sites as potentially eligible for listing on the basis of the
hazard ranking system. (See fig. 2.1.)
4 Hazardous Waste: Unaddressed Risks at Many Potential Superfund
Sites (GAO/RCED-99-8, Nov. 30, 1998). 5 As of Aug. 1998, EPA had
deleted 175 of these sites from the National Priorities List upon
construction of the cleanup remedy. 6 Of these 1,400 sites, 173
are federal facilities.
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Chapter 2 Most Agencies Are Considering Risk in Setting Cleanup
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Figure 2.1: Status of All Sites in EPA's CERCLIS Database
Source: GAO and EPA.
Of these 3,023 sites, we found that approximately 1,234 have
ongoing or completed cleanups outside of Superfund or are
misidentified as eligible. The disposition of most of the
remaining 1,789 sites, 307 of which were considered among the
highest- risk sites, was uncertain. The state and federal cleanup
managers did not know who would address them, under what programs,
whether responsible parties would participate, or when the cleanup
actions would begin. As a result of our findings, we recommended
in November 1998 that EPA regions and the states coordinate their
efforts to ensure that the highest- risk sites are addressed,
assigning a lead agency as necessary. In response, the agency is
planning to further assess the 307 highest- risk sites to
determine whether it needs to take any immediate cleanup actions
at these sites through its short- term removal program.
For those sites that EPA and states have agreed should be placed
on the National Priorities List, EPA does not use relative risk to
decide which ones to list first. Although EPA initially uses its
hazard ranking system as a screening tool to determine a site's
eligibility for listing, other factors, such
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Chapter 2 Most Agencies Are Considering Risk in Setting Cleanup
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as a governor's concurrence or EPA's inability to identify a
responsible party willing to conduct the cleanup, will determine
when EPA decides to propose a site for listing.
The Departments of Agriculture, Defense, and Energy Have Set Risk-
Based Cleanup Priorities, but Interior Has Not Yet Identified All
Sites Needing Cleanup
Three of the four federal agencies with the largest cleanup
workloads the departments of Agriculture, Defense, and Energy have
implemented systems to set cleanup funding priorities on the basis
of the relative risk sites pose. The Department of the Interior
has not developed a central database of hazardous waste sites,
estimated the resources it needs to address them, or developed an
overall strategy to manage its cleanup workload.
Given that current estimates predict federal agencies could spend
more than $300 billion to clean up contaminated federal
facilities, it is imperative that they spend this money
effectively. Since 1995, we have encouraged these agencies to set
risk- based priorities for applying their cleanup dollars to the
backlogged sites waiting to be addressed. 7 In 1995, the Federal
Facilities Environmental Restoration Dialogue Committee consisting
of representatives from federal, state, local, and tribal
governments, as well as citizens' groups and labor organizations
reached a consensus that risk should be a primary consideration,
among other factors, in setting cleanup priorities at federal
facilities. 8 These other factors include the cost- effectiveness
of the cleanup remedies and their responsiveness to any cleanup
requirements and concerns from the communities surrounding a
facility. Likewise, in 1995, the Administrator announced EPA's
intention to promote risk- based priority setting at federal
facilities and sites. 9 The federal agencies in our review have
responded to this call for setting risk- based cleanup priorities
to varying degrees. (See table 2.1.)
7 Federal Facilities: Consistent Relative Risk Evaluations Needed
for Prioritizing Cleanups (GAO/RCED-96-150, June 7, 1996), Federal
Hazardous Waste Sites: Opportunities for More Cost Effective
Cleanups (GAO/T-RCED-95-188, May 18, 1995), and Superfund Program
Management (GAO/HR-95-12, Feb. 1995).
8 EPA chartered the Federal Facilities Environmental Restoration
Dialogue Committee in 1992 to develop a consensus on how agencies
can make fair and consistent decisions about cleanup priorities
and funding.
9 In Aug. 1998, EPA issued a new policy, the Interim Final Policy
on the Use of Risk- Based Methodologies in Setting Priorities for
Cleanup Actions at Federal Facilities, that provides guidance for
its regions to use to promote risk- based priority setting for
cleanups at federal facilities and calls for EPA regions to meet
annually with the federal facility environmental staff in their
areas to negotiate cleanup priorities.
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Table 2.1: Summary of Steps Four Federal Agencies Have Taken to
Set Risk- Based Priorities Department
Does the agency have a system in place to identify potential
hazardous waste sites and characterize their risks?
Do individual locations within the agency fund cleanups on the
basis of sites' risk?
Does the agency allocate funds across locations nationwide on the
basis of sites' risks?
Agriculture a Yes Yes Yes Defense Yes Yes No b Energy Yes Yes No
Interior No No No c
a For this table, Agriculture represents the programs within the
Forest Service because it is responsible for the most significant
portion of the Department's cleanups to date. b Although the
Department of Defense does not allocate funds nationwide on the
basis of risk, it has set nationwide cleanup goals for high- risk
sites that are to be met by each of its five environmental budget
components one for each of the three services, one for all
Defense- wide agencies, and one for all formerly used Defense
sites. Each component sets priorities for its own sites on a
nationwide basis.
c Although the Department of the Interior does not set priorities
for all sites across its bureaus on a nationwide basis, it does
use risk to set nationwide priorities for the small number of
sites it considers for funding from its Central Hazardous
Materials Fund.
Agriculture's Forest Service Sets Risk- Based Cleanup Priorities
In the early 1990s, Agriculture's Forest Service, which has
accomplished the most significant portion of the Department's
cleanup activities to date, implemented a process to rank and fund
sites on the basis of their relative risks. The Forest Service
manages the National Forest System, including remote public lands
that have been contaminated by the activities of other parties.
However, in 1996, we reported that the Forest Service had made
limited progress in completing an inventory of its potential
hazardous waste sites, such as mining waste sites, a critical
first step for effectively establishing priorities. 10 Since that
time, the Forest Service has made a concerted effort to identify
its universe of sites and develop an inventory of them. The Forest
Service has also used the results of its inventory to fund
cleanups of the sites posing the most serious risks, while also
requiring the parties responsible for the contamination to pay for
some of the cleanups.
According to Agriculture's coordinator for hazardous waste
cleanups and the Forest Service's chief engineer in charge of
cleanups, the Forest Service, as of January 1999, had completed
its inventory of underground
10 Federal Land Management: Information on Efforts to Inventory
Abandoned Hard Rock Mines (GAO/RCED-96-30, Feb. 23, 1996).
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tanks, landfills, and abandoned hard rock mining sites. 11 In
completing the mining site inventory, which encompasses the
largest number of sites remaining to be addressed, the Forest
Service set standard procedures for its regions to identify sites
with the potential to release hazardous substances and pose risks
to human health and the environment. The regions ranked each site
as posing a high, medium, or low relative risk depending on the
presence of mining wastes or discharges; the site's proximity to
sensitive environments, such as wetlands; and applicable
regulatory cleanup requirements. As a result of this nationwide
inventory, the Forest Service has identified a total of
approximately 39,000 abandoned mine sites, of which an estimated
1,800, or about 5 percent, are considered high priorities because
they are or could be releasing hazardous substances.
The Forest Service has not yet completed an inventory of sites
contaminated by Defense activities on its lands, such as sites
containing unexploded ordnance. This is mainly because the Forest
Service has had very little information about these sites,
according to Agriculture's coordinator for hazardous waste
cleanups. Defense and Agriculture have not fully implemented a
1988 memorandum of understanding for cooperation between the two
agencies on this issue. Recently, Defense provided the Forest
Service with a list of sites that Defense had used in the past and
that the Forest Service now manages. However, the Forest Service
would like Defense, which may be a potentially responsible party
at these sites, to better identify its activities at those sites
and the hazards that may be associated with those activities. As a
start, the Forest Service would like to be included in Defense's
process for setting cleanup priorities and standards when
addressing sites on National Forest System lands. In this way,
Defense and Agriculture could begin to work together to clean up
sites on lands that Defense could have contaminated. To help
ensure that the federal agencies address these sites, EPA plans to
establish a workgroup in the spring of 1999, according to the
associate director of the Federal Facilities Restoration and Reuse
Office. The workgroup will initially consist of EPA
representatives and, later, other federal agencies to discuss how
to accurately characterize the risks at these sites, set
priorities among them, and fund their cleanups. Furthermore,
according to a senior official in the Office of the Deputy Under
Secretary of Defense for Environmental Security, Defense,
Agriculture, and Interior are in the
11 Hard rock mining involves the extraction and preliminary
processing of minerals such as gold, silver, copper, and lead,
typically for use in industrial applications. Abandoned hard rock
mines could pose physical safety hazards (e. g., open shafts or
pits, unsafe structures, or explosives) or risks to the
environment and human health (e. g., through the drainage of
hazardous substances into nearby surface water or groundwater).
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process of finalizing a new memorandum of agreement to establish
the Inter- Agency Military Land Use Coordination Committee. The
committee consists of senior policy officials from Defense,
Agriculture, and Interior and has established five subgroups
addressing issues such as the contamination and cleanup of public
lands.
The Forest Service has used its inventories to set cleanup goals,
justify requests for additional cleanup funds, and allocate the
funds it receives. On the basis of data from its inventories, the
Forest Service has set a goal to clean up all of its high-
priority hazardous waste sites by 2045, at a cost of approximately
$2 billion. Funding for the Forest Service's hazardous waste
program has increased in recent years from approximately $7
million in fiscal year 1997 to approximately $12.5 million in
fiscal year 1999. Furthermore, the administration has requested
over a 70- percent increase for Forest Service programs, to $21.5
million for fiscal year 2000. This request is based on the Forest
Service's inventories of hazardous waste sites.
To develop the Forest Service's annual funding request, the
regions select sites to submit to a round table of regional and
headquarters staff for priority ranking. For example, the Forest
Service's regional office in Utah forwards approximately 10 to 15
sites to the round table each year depending on the relative risks
the sites pose, the size of the cleanup workload the region can
manage, and the degree to which parties responsible for the
contamination are available and able to pay for the cleanup. The
round table then ranks the sites from all nine regions using six
factors, two of which specifically address risks to human health
and the environment. The remaining four factors address such
things as the cost- effectiveness of the proposed cleanup actions
and any applicable statutory or regulatory cleanup requirements.
The Forest Service uses this list to justify its cleanup budget
requests to Agriculture and, eventually, the Congress.
Agriculture's coordinator for hazardous waste cleanups explained
that once the Forest Service receives its cleanup budget, it
allocates funds to the regions according to their ranked list of
priorities, and the regions in turn spend the funds following
these priorities.
To supplement its limited cleanup funds, the Forest Service places
priority on requiring responsible parties to clean up sites on its
lands. In recent years, with EPA's assistance, the Forest Service
and Agriculture have negotiated and issued cleanup orders to these
parties and sought reimbursement for its cleanup costs from
responsible parties under CERCLA. For example, in fiscal year
1998, Agriculture estimates that the
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Forest Service was able to leverage its cleanup funding to produce
more than $100 million in cleanup work funded by responsible
parties.
Defense Has a Risk- Based Process for Setting Cleanup Priorities
In 1994, Defense implemented a consistent process for identifying
and funding most sites according to risk within each of its five
environmental components one for each of the three military
services, one for all Defense- wide agencies, and one for formerly
used Defense sites. Following detailed guidance from the
Department's Environmental Security Office, each of the components
evaluates its sites and categorizes them into groups, depending on
whether they pose high, medium, or low relative risks to human
health and the environment. 12 These components evaluate the
nature and concentration of the site's contaminants, the possible
pathways for the contaminants to move from the site, and the
opportunities for the contaminants to come in contact with humans.
If the service or agency does not have enough information to
evaluate a site, it must schedule the site for further study and
conduct an interim cleanup action to address any immediate threats
to public health and the environment.
The components use the results of their relative risk evaluations
to develop their budget requests and allocate funds accordingly.
Each Defense component has its own, separate appropriations
account for environmental restoration and decides for itself what
percentage of its high- risk sites it will fund in any given year.
In 1997, the most recent year for which data are available,
Defense spent about 82 percent of its cleanup dollars (on average,
departmentwide) on high- risk sites, for those sites evaluated. 13
The Department does not set priorities for sites among its
components, and they do not compete against each other for
environmental funding on the basis of the relative risks at their
sites. According to the manager within the Department's Office of
Environmental Security in charge of tracking cleanups, this has
not been necessary because the components have been receiving
sufficient appropriations to conduct scheduled
12 Defense has set risk- based priorities for formerly used
Defense sites containing hazardous waste but has not applied the
priority- setting system to sites containing unexploded ordnance.
According to an EPA official, federal agencies currently disagree
about how to characterize the potential risk associated with
unexploded ordnance. Defense is developing a risk- based priority
system for unexploded ordnance sites but has not yet developed
goals for addressing them.
13 Defense does not require relative risk evaluations for sites
where it has already made cleanup commitments; unexploded ordnance
sites; sites requiring environmental cleanup as part of building
demolition; or sites where it lacks information for an evaluation.
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cleanups. This would also be somewhat difficult, according to
Defense's environmental budget examiner, because once funds are
appropriated, the Department cannot transfer funds between two
appropriations accounts without obtaining statutory authority.
Even though the Department does not set nationwide priorities, it
has established a set of nationwide cleanup goals to have cleanup
remedies in place at 50 percent of all installations' high- risk
sites in 2002 and at 100 percent of these sites in 2007. The
Department requires each component to annually certify that it is
sufficiently funding its installations to meet these goals and
biannually reviews the components' progress. If the Department
determines that a component has not included sufficient funds in
its annual budget request to meet its goals for that year, the
Comptroller will require the component to revise its request,
according to the Defense manager in charge of tracking cleanups.
In response to congressional concerns that the components were
identifying too many sites in the high- risk category when
requesting cleanup funding, in August 1997, the Office of
Environmental Security developed more precise criteria for
classifying sites' risks as high, medium, or low. In 1998, we
found that for more than 99 percent of the 6,000 sites we
analyzed, the components' classifications were consistent with the
new definitions. 14 We recommended, however, that the Department
provide more specific Defense- wide categories to aid in priority
setting. The Department's Secretary for Environmental Security
does not agree with this recommendation, stating that more refined
categories of risk are currently being applied by individual
installations.
Energy Sets Risk- Based Priorities Within but Not Among Facilities
In 1995, Energy developed procedures for considering the relative
risks of its environmental management activities to help its
facilities, or operations offices, establish cleanup funding
priorities. Since then, Energy has continued to set priorities for
its cleanups on the basis of risk and other factors at its
operations offices. The Department's Office of Environmental
Management requires its operations offices, in preparing their
budget requests, to rank all of their proposed environmental
management projects, which include CERCLA cleanups; activities
required to maintain safe operations related to nuclear materials;
and activities required to close, clean, and transfer property.
Operations offices are to classify proposed cleanup projects as
high, medium, or low priorities considering,
14 Environmental Cleanup: DOD's Implementation of the Relative
Risk Site Evaluation Process (GAO/NSIAD-99-25, Oct. 7, 1998).
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at a minimum, seven core criteria, three of which relate to the
level of risk to workers, the public, and the environment. The
Department's Office of Environmental Management also provides
guidance for operations offices to evaluate projects in four
additional areas: (l) compliance with federal, state, and local
cleanup regulations; (2) support for crucial operations at the
site; (3) the potential for reducing costs; and (4) responsiveness
to local citizens' concerns. Considering the results of the
evaluations in these seven areas, each field office uses its own
priority- setting system to rank its cleanup projects along with
all of its other environmental management projects and submits
this combined list to headquarters as part of the Department's
budget request. Once the operations offices receive their budget
allocations, they distribute the funds across projects according
to the rank- ordered list.
For example, Rocky Flats, a facility that is preparing for
closure, has assigned the highest priority to those environmental
management projects needed to maintain safety, such as security
systems for the plutonium and other special nuclear materials at
the site. In its overall plan to close the facility, Rocky Flats
used its own system to qualitatively rank- order all remaining
projects, including CERCLA cleanup projects, and established a
time line to complete them. To develop the sequence of projects,
program managers considered the extent to which each one (1)
reduces risks to human health and the environment as well as
costs, (2) helps the facility progress toward closure, (3) cleans
up the site, (4) complies with regulatory requirements, and (5)
improves contractors' performance and the site's overall
management. According to the risk expert at Rocky Flats, the
resulting rankings will remain relatively constant from year to
year; however, the time line or sequence for completing the
projects may change. Because EPA was concerned that CERCLA
cleanups may not rank high enough when compared to other efforts
to clean up or manage nuclear materials, Energy agreed to work
with EPA's federal facilities manager for Rocky Flats to annually
select and fund a maximum of 12 of EPA's highest- priority
environmental cleanup projects. EPA's federal facilities manager
then monitors to ensure that Rocky Flats completes these projects
in accordance with this cleanup agreement.
The Oak Ridge Operations Office, an active facility where CERCLA
cleanups compete with ongoing operations, also assigns the highest
priority to funding the environmental management activities needed
for safety at its facilities. To set priorities among the
remaining environmental projects, including the on- site treatment
of waste, CERCLA cleanups, and the demolition of contaminated
buildings, Oak Ridge uses its own quantitative
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system to rank order these activities following Energy's seven
relative risk areas. The Operations Office reviews and adjusts
this ranking as necessary two to three times a year. Using these
rankings in accordance with their 1992 cleanup agreement, EPA and
the Oak Ridge Operations Office are to select their highest-
priority environmental cleanup projects and set time lines for
completing them. Recently, however, EPA has not been satisfied
with its level of involvement in these decisions and is concerned
because fiscal year 1999 is the third consecutive year that Energy
has postponed funding some cleanup activities and asked EPA to
extend the time lines of its cleanup agreement. Consequently, EPA
has begun the formal dispute process provided for in the cleanup
agreement with Energy. The agreement establishes penalties and
possible fines for failure to comply with its schedule or terms.
Energy does not allocate funds across operations offices according
to any nationwide ranking of projects. We previously reported that
Energy would continue to make limited progress in cleaning up
environmental problems if it did not set national priorities for
cleanups. 15 Thus, we recommended that Energy set national
priorities and allocate its resources accordingly. To date, the
agency has not adopted this recommendation. According to a senior
official in charge of strategic planning, Energy prefers to allow
local decision- making when setting priorities among its
environmental management projects because of the unique
requirements posed by local regulations, community concerns, and
the types and extent of contamination. As a result, according to a
senior analyst in Energy's Office of Budget and Planning, Energy
continues to allocate an environmental management budget to each
operations office that is based on the extent and nature of the
work required at its sites and the risks they pose. The amount of
the environmental budget for each operations office varies very
little from year to year, but the amount that operations offices
use for CERCLA cleanups can vary substantially, depending on other
competing funding priorities at the facility. For example, a
contractor's unforeseen costs at one facility resulted in delays
of certain CERCLA cleanups agreed to with EPA.
Energy also had previously stated that it could not adopt a
nationwide priority system because it did not have the necessary
data to do so. However, several of Energy's senior environmental
managers at Oak Ridge and Rocky Flats and EPA's federal facilities
managers for Energy's Hanford facility and Idaho National
Engineering and Environmental Laboratory
15 Department of Energy: National Priorities Needed for Meeting
Environmental Agreements (GAO/RCED-95-1, Mar. 3, 1995) and Nuclear
Weapons Complex: Establishing a National Risk- Based Strategy for
Cleanup (GAO/T-RCED-95-120, Mar. 6, 1995).
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stated that it is feasible for Energy to produce a national list
of risk- based cleanup priorities. Energy officials acknowledge
that although it may be technically feasible, it is not practical
and could be counterproductive, stating that altering agreements
reached with local stakeholders to accommodate a new national,
risk- based prioritization scheme would cause significant
disruption and legal challenges.
Interior Cannot Fully Set Priorities for Funding Cleanups Until
the Bureau of Land Management Develops an Inventory of Sites and a
Strategy for Their Cleanup
As we reported in 1997, Interior in particular, its bureau with
the largest number of potential cleanups, the Bureau of Land
Management (BLM) does not have a comprehensive inventory of its
hazardous waste sites, an essential step for setting risk- based
cleanup priorities. 16 Early estimates by BLM indicate that it
faces a substantial cleanup workload, potentially costing billions
of dollars, yet it has not systematically assessed the full extent
of its cleanup problems. For example, in 1996, BLM estimated, on
the basis of available data from sources such as the U. S. Bureau
of Mines and the U. S. Geological Survey, that it had 70,000 to
300,000 abandoned mining sites on its lands. On the basis of
sample field tests, BLM further estimated that about 4 to 13
percent of these sites a range of 2,800 to 39,000 sites may have
contaminated material that poses potential risks to human health
and the environment and must be addressed. Assuming that Interior
would, at a minimum, conduct short- term removal actions at these
sites, which can cost up to about $40,000 each according to the
manager of BLM's hazardous materials program, the cost of cleaning
up these sites could range from $112 million to $1.5 billion,
while more extensive cleanups could cost billions of dollars.
These estimates do not include the costs of cleanups at other BLM
sites, including landfills, illegal dumping areas, and underground
storage tanks.
BLM employs a reactive approach to cleanup by addressing hazards
at sites after they have been identified by other federal and
state agencies. Sometimes hazards are identified following
injuries to citizens or livestock. The resulting patchwork of
information is insufficient to develop an effective cleanup
strategy for addressing the worst sites first. Furthermore, by not
getting responsible parties to perform or pay for cleanups under
CERCLA, BLM could cause the federal government to incur greater
costs in the long run.
16 BLM has developed six priorities for funding hazardous
materials activities in its Hazardous Materials Management Manual.
The first priority is for funding emergency removals to protect
public health and BLM's natural resources. However, without a
centralized database of sites requiring cleanup, these priorities
have limited usefulness in making risk- based cleanup decisions.
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Individual Field Offices Have Developed Some Inventory Data, but
This Information Is Insufficient for Developing an Overall Cleanup
Strategy
Cleanup managers differ on the need for an inventory. For example,
the manager of BLM's hazardous materials management program has
not supported the development of a more comprehensive inventory of
BLM's hazardous waste sites, stating that each of BLM's 12 state
offices has already discovered most large hazardous waste sites.
17 However, several BLM hazardous waste specialists in the field
disagreed, stating that some field offices continue to find large,
high- risk sites each year. These specialists believe that a
comprehensive database of known sites and a process for
identifying new sites would help the field offices better identify
high- priority sites, develop a cleanup strategy, and justify
cleanup budget requests.
Although BLM's state offices have completed portions of
inventories and headquarters is beginning to electronically
organize these portions, the data constitute a patchwork of
inconsistent information. Environmental and abandoned mines
specialists we talked with, representing six of BLM's state
offices, have either attempted their own surveys or have relied on
joint efforts with other federal agencies and states. For example,
BLM's Nevada office participated in a small pilot program to
identify environmental problems associated with abandoned mine
sites but does not have an inventory of other sites, such as
landfills and illegal dump sites. 18
A lack of funds is the primary reason why BLM is reluctant to
proactively survey its lands, according to BLM environmental
managers at headquarters and in the field. The state field offices
use much of BLM's annual hazardous materials budget approximately
$15 million in fiscal year 1998 to conduct emergency removals of
hazardous materials. According to BLM, it accomplishes hundreds of
such cleanup actions each year, ranging from the removal of debris
that has been dumped on public lands illegally to the closure of
water- polluting abandoned mines. As a result, developing an
inventory is often not a high priority. In comparison, however,
the Forest Service, with a similarly small environmental cleanup
budget, was able to complete its inventory by funding it over
several years, leaving some money for ongoing cleanups and
removals on an annual basis.
Several of BLM's state offices have leveraged state funds to
complete portions of inventories. For example, BLM's state offices
in Wyoming, Colorado, and Montana have mine inventory data because
the states paid
17 BLM has 12 state offices, 11 in western states and 1 for the
eastern states. 18 Bureau officials said that BLM has started to
fund a 5- year survey of California desert areas designed to
identify illegal activities and contamination.
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for surveys using a federal reclamation fund financed by coal-
mining fees. Some BLM state offices have been able to develop
information on abandoned mines by participating in several water
quality initiatives. 19 For example, BLM works with other federal
agencies and state and local authorities to obtain funding under
the administration's Clean Water Action Plan to clean up
watersheds selected by the state. As part of this effort, it is
necessary to identify and survey surrounding abandoned mines as
possible sources of the watersheds' contamination.
Another reason BLM is reluctant to identify potential hazardous
substance release sites, according to both the manager of the
hazardous materials management program and experts at BLM's
National Applied Resource Sciences Center, is that BLM officials
believe, once the sites are identified, BLM may be held
financially liable for thousands of abandoned sites that it did
not contaminate, particularly abandoned mine sites. Furthermore,
these officials worry that once the hazardous waste sites are
identified, EPA will place the sites on the federal facility
docket and the sites will then be subject to what the officials
perceive as the burdensome and costly requirements of a remedial
action under CERCLA. 20
BLM Has Not Developed a Comprehensive Cleanup Strategy Using
CERCLA as a Tool for Completing Cleanups
BLM has no comprehensive strategy for managing the cleanup of its
sites and has been reluctant to seek reimbursement for cleanup
costs or issue orders to responsible parties to clean up sites
under CERCLA as part of, or in conjunction with, other cleanup
programs. 21 While the Forest Service has used these CERCLA
authorities to get responsible parties to pay for or perform
cleanups, BLM has not yet adopted a similar cleanup enforcement
strategy.
BLM managers gave several reasons for their reluctance to get
responsible parties to perform or pay for cleanups under CERCLA at
more sites. First, BLM officials do not see the benefit of
expending large portions of their
19 A task force of federal land management agencies developed the
Interdepartmental Abandoned Mine Lands Watershed Initiative in
1996 to address water quality problems caused by abandoned mines
on federal lands. A participating state sets priorities among its
watersheds and selects the one with the most serious water quality
problems caused by abandoned mines. The federal agencies then take
steps to clean up or treat the mining site's waste in order to
meet the state's water quality standards in the watershed. In
1998, EPA and other federal agencies developed the Clean Water
Action Plan, which provides additional funding to support, among
other things, this watershed initiative.
20 Cleanup actions under CERCLA fall into two broad categories:
removal actions and remedial actions. Removal actions are usually
short- term actions designed to stabilize or remove hazards, and
remedial actions are usually longer- term and costlier actions
aimed at permanent remedies.
21 Although Bureau officials acknowledged their reluctance to use
CERCLA authorities to pursue responsible parties, they emphasized
that they comply with CERCLA's procedures for reporting hazardous
spills and conducting removals and cleanups.
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small cleanup budget on what they describe as the expensive and
time- consuming investigations and analyses required for a
remedial action under CERCLA. Agency officials contend that,
unlike the Forest Service, BLM has less chance of finding
responsible parties to pay the cleanup costs for most of these
mines because BLM's mines are decades old. 22
Second, BLM prefers to conduct short- term removals, rather than
the longer- term and generally more expensive cleanups sometimes
required for remedial actions under CERCLA, because in the vast
majority of cases, the managers contend, these are sufficient for
the types of sites and the level of risk they pose. While this
could be true for a large portion of its sites, early BLM
estimates still indicate that BLM may have a number of high- risk
sites to address that may require more extensive cleanups.
Third, BLM has increased its use of watershed initiatives as the
programmatic vehicle for conducting cleanups because they involve
fewer detailed procedures and because funding is available for
them. However, the disadvantage of these types of cleanups,
according to an EPA environmental specialist for federal
facilities, is that they focus on surface water and may ignore
other problems, such as contaminated groundwater. In any case, BLM
could still use its enforcement authority under CERCLA in
conjunction with watershed initiatives, as the Forest Service
does, to effectively get more cooperation from responsible
parties, so that taxpayers' money can be more effectively used to
clean up sites where no responsible parties can be found.
Interior Funds a Small Number of Risk- Based Cleanups at Large,
Complex Sites
Since 1995, Interior has set aside approximately $10 million
annually to fund relatively long- term and large- scale cleanup
projects, and it allocates these funds according to the relative
risks posed by the sites. A technical review committee consisting
of staff from the Department and its bureaus meets annually to
review and rank the sites the bureaus submit and monthly to
monitor the cleanup progress at the sites that have been selected
and funded. The committee considers four factors: (l) the risks
posed to human health and the environment, (2) applicable legal
and regulatory cleanup requirements, (3) the potential for
responsible parties to participate in the cleanup, and (4) the
estimated time and cost of the cleanup. According to officials in
Interior's Office of Environmental Policy and Compliance, once the
Department receives its annual appropriation, it allocates the $10
million to cleanup projects in accordance with priorities set by
the committee. Interior funded cleanups at nine sites in 1997
under
22 Agriculture and EPA officials stated that many of the Forest
Service's sites are equally old and many are close in proximity to
BLM's sites.
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this process. In 1998, the Department continued funding seven of
these sites and added three others.
Several BLM cleanup managers have not submitted sites to compete
for these funds because they either did not know that the funding
was available or had erroneous information about how the process
works. For example, some cleanup managers were discouraged from
submitting sites because they believed that most of the funds were
already earmarked for a handful of large, complex sites on EPA's
National Priorities List for several more years in the future.
Although senior environmental program managers at Interior
acknowledged that one National Priorities List site did consume
most of the funding for a few years, Interior's cleanup
responsibilities at this site are ending. Consequently, according
to these managers, more funds are becoming available for other
high- risk sites in the future. In addition, BLM cleanup managers
stated that they thought only remedial cleanup actions qualified
for funding and because the vast majority of their cleanups are
removals, they rarely, if ever submit cleanups for consideration.
Interior officials acknowledged that the distinction is not clear
but said that the Department has sometimes funded large- scale
removals.
Conclusions EPA is setting risk- based funding priorities for
cleanups at sites on its National Priorities List. EPA will not
necessarily be listing the highest- risk
sites in the future, however, because states are more frequently
deciding which sites to ask EPA to list for Superfund cleanups and
are basing these decisions on factors such as the technical
complexities of a cleanup and the availability of responsible
parties to share in the cleanup costs. Currently, it is uncertain
who will take responsibility for cleaning up approximately 1,789
sites that are potentially eligible for the National Priorities
List, 307 of which are considered among the highest- risk sites.
Unless EPA regions work with their states to implement our earlier
recommendation to determine who is responsible for each site's
cleanup, as well as to better share information on the status of
certain high- risk sites that were found eligible for the National
Priorities List and are now being addressed by the states, the
agency cannot manage its own workload in the event that the states
seek EPA's assistance in the future. Nor can EPA respond to
community and congressional inquiries about the cleanup status of
some of the riskiest sites.
Each of Defense's services and agencies is also setting risk-
based funding priorities for its sites nationwide. The Department
is no longer setting
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funding priorities nationwide across these services and agencies,
in part because each of them now receives its own cleanup
appropriation and has been receiving enough funds to complete
planned cleanups in recent years, according to agency budget
officials. To some extent, Defense did consider its nationwide
priorities when it implemented its set of long- term goals for
completing cleanups at all of its sites. It is also considering
these priorities as it monitors its progress toward achieving
these goals. However, we did find that Defense may not have fully
coordinated its cleanup efforts with the Forest Service to address
hazards that Defense may be responsible for on National Forest
System lands. Until it does so, some federal waste sites may not
be adequately addressed.
Energy has instituted a risk- based prioritization scheme for its
operations offices but does not set priorities nationwide among
these offices. Although the Department believes that local
priority setting is more appropriate because each facility has
unique local regulations, community concerns, and contamination
problems, we continue to believe that unless Energy sets
nationwide priorities, it cannot make the most informed budget
decisions and support budget trade- offs among its facilities, as
necessary.
Until the Bureau of Land Management and, therefore, the Department
of the Interior, define the extent of their cleanup
responsibilities, determine the strategies they will use to pursue
cleanups, and consider how to use CERCLA as a tool in this
strategy, they cannot present strong justification for more
cleanup funds or effectively set priorities for using their
current cleanup resources. As a result, thousands of sites on BLM
lands could continue to pose risks to human health and the
environment, and federal cleanup costs could rise if responsible
parties are not found and made to pay for the sites' cleanup.
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Recommendations EPA To help EPA regions better plan their cleanup
workload and be responsive to local communities' concerns about
hazardous waste sites in their areas, we recommend that the
Administrator, EPA,
task the agency's regional offices to work with the states in
their regions to determine how to share information on the
progress of cleanups at those sites of highest risk or concern
considering any successful efforts currently under way in the
regions.
Defense and Agriculture To ensure that all federal waste sites are
being adequately addressed, we recommend that the Secretary of
Defense and the Secretary of Agriculture direct the Deputy Under
Secretary for Environmental Security and the Chief of the Forest
Service, respectively, to work together to clarify cleanup
requirements for lands with former or current Defense activities
that may pose risks to human health and the environment.
Furthermore, we recommend that the Department of Defense, in
consultation with the Department of Agriculture, work to ensure
that these cleanup requirements are met.
Interior To more effectively use its limited cleanup funds and
better leverage funds from responsible parties to clean up its
hazardous waste sites so as to protect the public and the
environment, we recommend that the Secretary of the Interior
direct the Assistant Secretary for Policy, Management and Budget;
the Assistant Secretary for Lands and Minerals Management; and the
Solicitor of the Interior to work together to ensure that
the Bureau of Land Management (l) develops a national database
for all of its known hazardous waste sites and abandoned mine
sites; (2) develops and implements a strategy for updating its
national database, which includes collecting new information on
potential hazardous waste sites and abandoned mines in a
consistent manner across all of its state offices; (3) develops
and applies a mechanism for setting cleanup priorities among sites
on a nationwide basis using risk and other factors, as
appropriate; (4) develops a comprehensive cleanup strategy,
including specific goals and time lines for cleaning up the sites,
on the basis of their risk- based priorities; and (5) develops
nationwide procedures for conducting
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searches of potentially responsible parties and for using CERCLA
authorities, where appropriate, to get more responsible parties to
perform or pay for cleaning up contamination; and all of
Interior's bureaus and regional offices understand the purpose and
size of the Department's Central Hazardous Materials Fund and the
criteria the Department uses to allocate dollars to cleanups,
including both remedial and removal actions.
Agency Comments We met with or obtained comments from cleanup
program managers from EPA, Agriculture, the Forest Service,
Defense, Energy, Interior, and the
Bureau of Land Management, who generally agreed with our findings
and recommendations, with one exception. The agencies also
suggested several changes for technical accuracy and clarity,
which we incorporated where appropriate. EPA agreed with our
findings and acknowledged that it needed to work with the states
to coordinate cleanups and obtain the information needed to track
the status of state cleanups. Agriculture and Defense fully
concurred with our findings and agreed to our joint recommendation
to their agencies to better coordinate their efforts to clean up
previously used Defense sites.
Energy disagreed that it needed to act on our earlier
recommendation to adopt a nationwide risk- based process for
setting priorities among its sites. The Department stated that all
of its operations offices receive a relatively stable budget that
is based on the general needs and risks of their environmental
management activities. Once the operations offices' receive their
budgets, they determine their own priorities for cleanup. Energy
stated that local control of priority setting is preferable to a
national strategy because each site has unique regulatory
requirements, community concerns, and contamination. Nevertheless,
we continue to maintain that developing nationwide cleanup
priorities would help the Department to make informed budget
decisions and analyze trade- offs among its facilities.
Interior and its Bureau of Land Management generally agreed with
our findings and said they would develop a plan for addressing our
recommendations. However, BLM provided several points of
clarification. First, BLM did not think it was cost- effective to
undertake a comprehensive inventory of sites, stating that it
currently has more cleanups than it can fund and already knows its
worst sites. We continue to maintain, however, that BLM cannot
effectively use its limited cleanup funding until it determines
the extent of its cleanup workload and sets risk- based
GAO/RCED-99-111 Superfund Program Management Issues Page 43
Chapter 2 Most Agencies Are Considering Risk in Setting Cleanup
Priorities
priorities for its cleanups. Furthermore, we determined that BLM
state offices continue to find high- risk sites each year. Second,
BLM stressed that it uses other authorities besides CERCLA, such
as the Mining Law of 1872, to address some sites and has always
had a policy that the polluter should perform the cleanup work
wherever possible. We acknowledged BLM's use of these other
authorities in our report but continue to recommend that the
agency more effectively include CERCLA as one of the tools
available for obtaining the full cooperation of parties
potentially responsible for contamination in conducting and paying
for cleanups. Third, BLM asked us to acknowledge that it has taken
actions such as removing debris at sites and closing abandoned
mines for safety reasons, and we added this information to the
report.
Finally, BLM stated that another reason it rarely, if ever,
nominates sites for funding from Interior's Central Hazardous
Materials Fund is because it believes the proposed cleanup must be
a remedial, not a removal, action. However, Interior officials
stated that large- scale removals sometimes qualify for funding.
We revised our report to include BLM's reason for not nominating
sites for funding. However, we believe that BLM's uncertainty
about whether removal actions qualify for funding underscores our
finding and recommendation that Interior needs to more clearly
communicate the criteria it uses to allocate cleanup funds.
GAO/RCED-99-111 Superfund Program Management Issues Page 44
Chapter 3 EPA Is Not Seeking to Fully Recover Its Indirect Costs
or Appropriately Evaluating Its Cost Recovery Efforts
The federal government has lost the opportunity to try to recover
up to $2 billion from responsible parties because EPA has assessed
them only a portion of the indirect costs that it incurred in
operating the Superfund program. Although the ultimate goal of the
program is to clean up sites, EPA may recover its costs, including
indirect costs, from responsible parties. In response to new
federal cost accounting standards, EPA is revising its indirect
cost rate to more fully account for costs, but the agency has not
applied the revised rate to parties for cost recovery purposes. In
addition, EPA cannot evaluate how well it is recovering costs
because it has not established performance measures that compare
what it could have recovered with what it actually recovered.
Finally, the agency is improving its information systems so that
it can (1) better determine costs and locate key supporting
evidence and (2) better track the status of recoveries.
EPA Continues to Lose Revenue by Excluding Some Indirect Costs
From Recovery
EPA has met one of its primary goals getting responsible parties
to pay for more than 70 percent of the long- term cleanups
conducted over the past few years. However, EPA has had less
success changing cost recovery policies that exclude a significant
portion of its indirect cleanup costs from its cost recovery
efforts. When EPA pays for the costs of cleanups, it incurs both
direct and indirect costs. Direct costs are those that can be
attributed directly to a site, such as the cost to pay a
contractor to remove hazardous waste from the site. Indirect costs
are those that cannot be attributed to an individual site and,
thus, are prorated across all sites, such as the administrative
costs of operating the Superfund program. EPA's current method of
calculating the indirect cost rate excludes significant portions
of the agency's indirect costs.
EPA estimates that since the beginning of the Superfund program,
responsible parties have agreed to perform cleanups worth $15.5
billion 1 and it has spent about $15.9 billion to clean up hazards
caused by private parties. EPA considers about $5 billion of its
costs unrecoverable because, for example, financially viable
responsible parties could not be found or the agency reached final
settlements with responsible parties to pay less than all of the
past cleanup costs owed to the agency. Of the remaining
approximately $11 billion in Superfund expenditures, EPA had
entered into
1 Data are as of the end of fiscal year 1998 and are the most
recent available. According to EPA, its estimated value of work
conducted by responsible parties is based on cleanup cost
estimates at the time the cleanup method is selected, and it does
not include any management, overhead, legal, or other costs the
responsible party may incur in addition to the actual cleanup.
GAO/RCED-99-111 Superfund Program Management Issues Page 45
Chapter 3 EPA Is Not Seeking to Fully Recover Its Indirect Costs
or Appropriately Evaluating Its Cost Recovery Efforts
agreements to recover about $2.4 billion, or 22 percent, through
the end of fiscal year 1998. 2 (See fig. 3.1)
Figure 3.1: Status of EPA's Efforts to Recover $11 Billion in
Superfund Program Costs Through Fiscal Year 1998
Note: Dollars in billions. Source: GAO's presentation of data from
EPA.
Although EPA has obtained settlements to recover $2.4 billion, it
has lost the opportunity to recover up to another $1.9 billion of
indirect costs because it did not revise its indirect cost rate to
include all appropriate costs. In the earlier years of the
Superfund program, the agency took a conservative approach to
allocating indirect costs to private parties because it was
uncertain which indirect costs the courts would agree were
recoverable if parties legally challenged EPA. Starting in 1989,
we
2 This 22- percent figure is higher than the 14- percent cost
recovery figure in our prior report, High Risk Series: Superfund
Program Management (GAO/HR-97-14, Feb. 1997), because in the past
we included total Superfund expenditures in our calculation of
this rate. Now, in response to EPA's comments, we have excluded
from our calculation costs EPA has deemed unrecoverable.
GAO/RCED-99-111 Superfund Program Management Issues Page 46
Chapter 3 EPA Is Not Seeking to Fully Recover Its Indirect Costs
or Appropriately Evaluating Its Cost Recovery Efforts
expressed concerns about this approach because of the substantial
dollar amounts EPA was not seeking to recover and return to the
federal Treasury. 3 EPA recognized the need to revise this
practice and, in 1992, proposed a rule that would have allowed it
to expand the types of indirect costs it would attempt to recover.
However, because it received so many negative comments on this
proposed rule, EPA did not publish a final rule and did not
increase its rate.
Now, however, EPA has the opportunity to address this issue. In
response to updated governmentwide accounting standards, EPA began
to implement a new cost accounting system. As part of this
process, EPA's Financial Management Division developed a new
indirect cost rate that will better account for the agency's
indirect costs. The director of EPA's Program and Cost Accounting
Branch, Financial Management Division, believes that the new
rates, if implemented, could significantly increase the costs
charged to responsible parties.
According to EPA's cost recovery program managers, they are
waiting until the methodology used to develop the new rate is
reviewed and approved by EPA management, the Department of
Justice, and an independent accounting firm hired to review the
methodology before adopting it for the Superfund program.
According to EPA, the methodology could be approved by September
1999. If the program adopts the new rate, the agency could
increase its recovery of indirect costs. For example, according to
EPA's estimates, through fiscal year 1998, the agency excluded
about $1.3 billion in indirect costs at sites where it had not yet
agreed to a final settlement with the parties. The agency
estimates it could recover $629 million, or 49 percent, of these
costs. EPA estimates it will not recover the remaining $662
million, or 51 percent, because, for example, there may be no
financially viable parties at some sites. In addition, EPA regions
may decide, as is consistent with the agency's policy, not to
pursue recoveries at sites where the total cleanup costs are less
than $200,000 because such efforts may not be cost- effective.
EPA's Goals and Measures Do Not Fully Reflect Progress in
Recovering Costs
EPA's existing cost recovery goals and measures do not facilitate
effectively evaluating and improving the agency's cost recovery
performance. EPA's cost recovery program managers stated that the
agency's current goals for the program are to seek the recovery of
all funds expended at sites, where appropriate, and to take cost
recovery
3 Superfund: A More Vigorous and Better Managed Enforcement
Program Is Needed (GAO/RCED-90-22, Dec. 15, 1989).
GAO/RCED-99-111 Superfund Program Management Issues Page 47
Chapter 3 EPA Is Not Seeking to Fully Recover Its Indirect Costs
or Appropriately Evaluating Its Cost Recovery Efforts
actions at all cleanup sites before the agency's authority to do
so expires. However, EPA cannot use these goals to effectively
monitor its performance because the goals do not fully reflect its
progress in recovering costs.
Need for Cost Recovery Performance Measures
Since 1991, we recommended additional goals and measures for the
cost recovery program. 4 We and others, including EPA in its own
past management review of the program, 5 recommended that the
agency better track and compare the costs it actually recovers
with the costs it could have recovered. Establishing performance
measures to better track the outcome of cost recovery efforts is
consistent with the Government Performance and Results Act of
1993, under which agencies must set such measures. 6 We also
previously recommended that the agency establish a goal to take
earlier action on cases, rather than focusing just on taking
action before its authority expires, because early action reduces
the probability that a responsible party's financial condition
will decline, making cost recovery more difficult. 7
Although EPA reports the amount of funds it obtains in cost
recovery settlements in a given fiscal year, it does not compare
this amount with the total amount of funds it could have recovered
from this set of settlements. Such a comparison could allow the
agency to better measure its performance on a consistent basis.
Tracking its rate of recovery over time and the main reasons for
fluctuations in the rate from year to year could help the agency
better understand how well it is achieving recoveries and what
improvements it could make in its recovery program.
In the past, we showed that it is possible to compute such a
measure. 8 We reported that in fiscal year 1989 (the most recent
year for which data were available at the time), responsible
parties agreed to reimburse EPA for 59 percent ($ 116 million) of
its program costs, leaving about $80 million in
4 Superfund: EPA Has Opportunities to Increase Recoveries of Costs
(GAO/RCED-94-196, Sept. 28, 1994) and Superfund: More Settlement
Authority and EPA Controls Could Increase Cost Recovery (GAO/RCED-
91-144, July 18, 1991).
5 A Management Review of the Superfund Program, EPA (Washington D.
C.: June 1989). 6 Under this act, federal agencies must establish
long- term strategic plans and set annual goals for programs and
measure the programs' performance in achieving those goals. 7
Superfund: EPA Has Opportunities to Increase Recoveries of Costs
(GAO/RCED-94-196, Sept. 28, 1994). 8 Superfund: More Settlement
Authority and EPA Controls Could Increase Cost Recovery (GAO/RCED-
91-144, July 18, 1991).
GAO/RCED-99-111 Superfund Program Management Issues Page 48
Chapter 3 EPA Is Not Seeking to Fully Recover Its Indirect Costs
or Appropriately Evaluating Its Cost Recovery Efforts
unrecovered costs. We recommended that EPA use this percentage as
a performance measure to show the extent to which EPA has been
reimbursed for its costs. However, the agency has raised two
primary concerns about doing so. First, EPA is concerned that if
it develops the percentage of dollars recovered, responsible
parties may misinterpret the figure as the percentage EPA is
willing to accept and not agree to pay a higher percentage during
settlement negotiations. We believe that if EPA has an appropriate
negotiation strategy and is willing to issue orders or pursue
litigation when negotiations fail, then responsible parties'
knowledge of EPA's performance measure should have little effect.
Second, EPA notes that an increase or decrease in the percentage
of costs it recovers each year may be based on factors outside its
control. For example, in a given year, EPA could have a
proportionately larger number of cases with insolvent parties,
decreasing the percentage of recoveries that year. However, we
believe that tracking increases or decreases in the percentage of
recoveries compared with what EPA defines as potentially
recoverable costs would account for these fluctuations because
factors outside EPA's control, such as insolvent parties, could be
identified as not recoverable by EPA and taken out of the
calculation. Without systematically tracking its rate of recovery
and analyzing the reasons for differences in these rates, EPA
cannot determine if the differences are due to internal factors
that it can address, such as poor cost documentation or
inexperience on the part of its negotiators, or external factors
outside its control, such as the absence of financially viable
parties.
EPA Does Not Track Whether Regions Are Taking Early Action on Cost
Recoveries
Under CERCLA's statute of limitations, EPA must generally initiate
cost recovery actions within 3 years after it completes a removal
action or within 6 years after it begins the physical construction
of a remedial action. EPA's goal is to take action on all cases
with cleanup costs of $200,000 or more within these time frames.
EPA took cost recovery actions before the limitations period
expired at 100 percent of the sites in fiscal year 1997 and at
almost all sites in fiscal years 1996 and 1995 as well. EPA's
guidance encourages the regions to take action on cost recovery
cases even earlier than this either within 12 months after a
removal action is completed or within 18 months after the
construction of a remedy is initiated but the agency does not
regularly track how well the regions are meeting this guidance.
Taking early action on cases is useful because the longer EPA
waits to take an action, the greater is the likelihood it will
lose evidence, the financial condition of the responsible parties
will deteriorate, or the limitations period will expire.
GAO/RCED-99-111 Superfund Program Management Issues Page 49
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