Superfund: Progress, Problems, and Future Outlook (Testimony, 03/23/99,
GAO/T-RCED-99-128).

Despite the long duration past cleanups, Superfund is within sight of
completing the construction of cleanup remedies at most of the sites on
the National Priorities List. However, management problems and cost
control issues that GAO has cited for years persist. Because few sites
have been admitted to the program in recent years, the pipeline for the
List is clearing out. On the other hand, many sites in the Environmental
Protection Agency's (EPA) inventory of potential List sites still need
attention and possible cleanup, but EPA and the states have postponed
decisions, sometimes for up to 10 years or longer, on how to address
them. During the past two decades, states have strengthened their
capacity to deal with site cleanups to varying degrees. Some have
substantial programs, while others claim to have little ability to pay
for cleanups. Moreover, not all of the states have adequate enforcement
authority to force responsible parties to pay for cleanups. Because the
states now have the lead for screening sites for List consideration,
future List sites could disproportionately represent complex cleanups
for which responsible parties cannot be found or are unwilling to ante
up the full cleanup cost. GAO recommends that EPA work with the states
to assign responsibility among themselves for these sites. The Superfund
reauthorization process gives Congress an opportunity to help guide EPA
and the states in allocating responsibility for dealing with these
sites.

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

 REPORTNUM:  T-RCED-99-128
     TITLE:  Superfund: Progress, Problems, and Future Outlook
      DATE:  03/23/99
   SUBJECT:  Site selection
	     Environmental monitoring
	     Waste management
	     Water pollution control
	     Hazardous substances
	     Waste disposal
	     Health hazards
	     Environment evaluation
	     Federal/state relations
IDENTIFIER:  EPA National Priorities List
	     Superfund Program
	     GAO High Risk Program

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1-LG-BW logo.eps GAO United States General Accounting Office

Before the Subcommittee on Finance and Hazardous Materials,
Committee on Commerce, House of Representatives

For Release on Delivery Expected at 2 p. m., EST Tuesday, March
23, 1999 SUPERFUND

Progress, Problems, and Future Outlook Statement of Peter F.
Guerrero, Director, Environmental Protection Issues, Resources,
Community, and Economic Development Division

GAO/T-RCED-99-128

PAGE2 GAO/ XXXX- 98-??? NAME OF DOCUMENT

Page 1 GAO/T-RCED-99-128

Mr. Chairman and Members of the Committee: Thank you for the
opportunity to discuss the current status and management of the
Superfund program and the outlook for the program's future. My
comments today are based on a number of reports we have

issued in recent years that relate to three specific issues: (1)
progress made toward cleaning up sites in the program, (2)
continuing management problems, and (3) factors affecting
Superfund's future workload. In summary, our work has shown the
following:  In the past, we have called attention to the slow pace
of cleanups in the Superfund program. For example, we reported
that cleanups completed in 1996 took an average of over 10 years.
1 However, now, 17 years after

sites were first placed on the Superfund list, many of the sites
have progressed a considerable distance through the cleanup
process. Decisions about how to clean up the great majority of
these sites have

been made, and the construction of cleanup remedies has been
completed at over 40 percent of the sites. EPA's goal is to
complete the construction of remedies at 1,200 sites by 2005. Work
to clean up groundwater will continue at many sites after remedies
are constructed.  Despite the progress that Superfund has made
toward site cleanups, certain management problems persist. These
problems include the

difficulty in controlling contract costs, the failure to recover
certain federal cleanup costs from the parties who are responsible
for the contaminated sites, and the selection of sites for cleanup
without assurance that they are the most dangerous sites to human
health and the environment. These problems have caused us to
include the program on our list of federal programs vulnerable to
waste and abuse. Furthermore, our analysis indicates that the
costs of on- site work by cleanup contractors represent less than
half of the spending in the program.

 There is considerable uncertainty about the future workload of
the Superfund program. Resolving this uncertainty depends largely
on deciding how to divide responsibility for the cleanup of sites
between EPA and the states. The number of sites that have entered
the Superfund program in recent years has decreased as EPA has
focused its resources on completing work at existing sites and the
states have developed their own programs for cleaning up sites.
However, 1 Superfund: Times to Complete the Assessment and Cleanup
of Hazardous Waste Sites (GAO/ RCED- 9720,

Mar. 31, 1997).

Page 2 GAO/T-RCED-99-128

according to EPA and state officials who responded to our survey,
a large number of sites in EPA's inventory of potential Superfund
sites are contaminating groundwater and drinking water sources and
causing other problems and may need cleanup. We have recommended
that EPA work with the states to assign responsibility for these
sites among themselves. The Superfund reauthorization process
gives the Congress an opportunity to help guide EPA and the states
in allocating

responsibility for addressing these sites. Background In 1980, the
Congress passed the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA), creating the Superfund
program to clean up highly contaminated hazardous waste sites.
CERCLA authorizes EPA to compel the parties responsible for the
contaminated sites to clean them up. The law also allows EPA to
pay for cleanups and seek reimbursement from the parties. EPA
places sites that it determines need long- term cleanup action on
its National Priorities List (NPL). As of early 1999, there were
1, 264 sites on or proposed for the NPL. Another 182 sites had
completed the cleanup process or were determined not to need
cleanup and had been deleted from the NPL. Once listed, the sites
are further studied for risks, and cleanup remedies are chosen,
designed, and constructed. EPA relies extensively on contractors
to study site conditions and conduct cleanups.

Cleanup actions fall into two broad categories: removal actions
and remedial actions. Removal actions are usually short- term
actions designed to stabilize or clean up hazardous sites that
pose an immediate threat to human health or the environment.
Remedial actions are usually longer term and more costly actions
aimed at permanent remedies. According to a 1998 report by the
Environmental Law Institute, 2 all 50 states have established
their own cleanup programs for hazardous waste sites. In addition
to handling less dangerous sites, some of the state programs can
handle highly contaminated sites, whose risks could qualify them
for the Superfund program. Some states initially patterned their
cleanup programs after the Superfund program but over the years,
in an effort to clean up more sites faster and less expensively,
have developed their own approaches to cleaning up sites. 2 An
Analysis of State Superfund Programs: 50- State Study, 1998
Update, Environmental Law Institute.

Page 3 GAO/T-RCED-99-128

States accomplish cleanups under three types of programs: (1)
voluntary cleanup programs that allow parties, who are often
interested in increasing sites' economic value, to clean them up
without state enforcement actions; (2) brownfields programs that
encourage the voluntary cleanup of sites in urban industrial areas
to enable their reuse; and (3) enforcement programs that oversee
the cleanup of the most serious sites and force uncooperative

responsible parties to clean up their sites. States generally use
their voluntary and brownfields programs to clean up less complex
sites by offering various incentives to responsible parties, such
as reduced state oversight. States maintain that these programs
accomplish site cleanups quickly and efficiently. Some states also
maintain cleanup funds to pay all or a portion of the costs of
cleanups at sites for which responsible parties that are able to
pay for full cleanups cannot be found. The states vary greatly in
the resources that

they have devoted to cleanups. For example, the 1998 Environmental
Law Institute study determined that states had cleanup funds
totaling $1.4 billion as of the end of the states' 1997 fiscal
year, with 6 states having fund balances of $50 million or more
and 26 states having fund balances of less than $5 million. The
study also reported that states spent a total of $565 million on
their cleanup programs in fiscal year 1997, 3 with 2 states
spending $50 million or more and 27 states spending less than $5
million.

Superfund Has Made Progress Cleaning Up Sites Even though cleanups
have taken a long time to accomplish, if it maintains its current
pace, the Superfund program will complete the construction of
cleanup remedies at the great majority of current NPL sites within
the next

several years. In our March 1997 report, we said that cleanups
completed in 1996 took an average of 10.6 years. Much of the time
taken to complete cleanups was spent during the early planning
phases of the cleanup process during which cleanup remedies are
selected. We said that less time had been spent on actual
construction work at sites than on the selection of remedies. 3
Six states did not report on their spending.

Page 4 GAO/T-RCED-99-128

Now, however, most NPL sites have been in the cleanup process for
a long time and have moved beyond the remedy selection phase. Last
year, we reported that EPA had completed the selection of remedies
at about 70 percent of the NPL sites as of the end of fiscal year
1997. 4 It had plans to complete, by the end of fiscal year 1999,
remedies for about 67 percent of the federally owned or operated
sites and 95 percent of the nonfederal sites that were listed as
of the end of fiscal year 1997. EPA reports that it has completed
the construction of cleanup remedies at 585 sites as of January
1999; will complete construction at 85 sites in each of fiscal
years 1999 and 2000; and will finish a total of 1,200 sites by
2005. Groundwater cleanups will continue at many of these sites
after the completion of remedy construction.

These completion rates reflect EPA's decision to make the
completion of construction at existing sites the Superfund
program's top priority and to reduce new entries into the program.
About 89 percent of the NPL sites were placed on the list between
1982 and 1990. Figure 1 shows the number of sites listed on the
NPL and the number of sites where the construction of the cleanup
remedy was completed during the years 1986 through 1998.

4 Superfund: Information on the Status of Sites (GAO/RCED-98-241,
Aug. 28, 1998).

Page 5 GAO/T-RCED-99-128

Figure 1: Numbers of Sites Listed on the NPL and for Which the
Construction of Final Cleanup Remedies Were Completed, 1986
Through 1998

Source: Compiled by GAO from Environmental Protection Agency data.

Under the Superfund program, in addition to its remedial work, EPA
has conducted removals at 595 NPL sites and 2,591 other
contaminated sites. Cleanup work has also been conducted at sites
where construction of the final cleanup remedy has not yet been
completed. At the request of this committee, we are conducting a
review to determine the extent of this ongoing cleanup activity.
Uncorrected Problems Make Superfund A High- Risk Program For
several years, GAO has included the Superfund program on its list
of federal programs that pose significant financial risk to the
government and the potential for waste and abuse. We included
Superfund on the list

because of (1) problems with the management of cleanup
contractors, (2) insufficient recovery of cleanup costs from
responsible parties, and (3) the absence of risk- based priorities
for site cleanups. 5 EPA has corrected some

of these problems, but enough remain that we have not yet been
able to remove Superfund from the high- risk list. I would like to
review these problems and EPA's response.

Page 6 GAO/T-RCED-99-128

Contract Management First, we raised concerns about several
contracting practices. We said that EPA had a backlog of more than
500 audits of its Superfund contracts. The purpose of these audits
is to evaluate the adequacy of contractors' policies, procedures,
controls, and performance. The audits are necessary for effective
management and are a key tool for deterring and detecting waste
and abuse. The agency has now almost eliminated its backlog of
contract audits. We also found that EPA was approving contractors'
cleanup cost proposals without estimating what the work should
cost. As a result, the agency

could not negotiate the best contract price for the government. In
response, EPA is now developing its own cost estimates and using
them to guide its price negotiations with contractors. However,
EPA was still having problems developing accurate estimates in
about half the cases we recently reviewed. Furthermore, many of
the cost estimators in the EPA regions told us that they lacked
the experience and historical data they needed to do a better job
at developing these estimates. EPA has requested the U. S. Army
Corps of Engineers, an agency with extensive contracting

experience, to conduct an assessment of EPA's cost- estimating
practices and recommend potential improvements. The assessment is
still ongoing and will be completed in mid 1999. Unless EPA
ensures that its regions implement and sustain corrective measures
resulting from this review, problems can reoccur. EPA has taken
similar corrective actions in the past, yet we continue to find
problems with estimates. Lastly, with respect to contracting, we
reported that EPA had difficulty

controlling the overhead, or program support costs, of its
contractors. To ensure that it had enough contractors to conduct
cleanups, EPA hired a large number of contractors more, it turned
out, than it actually needed. Even though it did not have enough
cleanup work to keep them all busy, it had to pay their overhead
costs (i. e., the costs of their maintaining the capacity to
respond to work assignments-- such as office space). Although EPA
cut in half the number of contractors that it keeps in place, our
recent

work indicates that this reduction may not have been enough. We
found that, for the majority of contracts we reviewed, EPA
continues to pay overhead costs ranging from 16 percent to 76
percent of the overall contract's costs, exceeding EPA's 11
percent target. In addition, persistent high overhead costs and
uncertainty about the future size of the program raise broader
questions about the type and the number of contracts EPA

really needs to have in place.

Page 7 GAO/T-RCED-99-128

Cost Recovery Even though CERCLA makes parties who are responsible
for contaminated sites liable for cleanup costs, we have
repeatedly reported that EPA has not charged responsible parties
for certain costs of operating the cleanup program-- mainly
indirect program costs, such as personnel and facilities. EPA has
excluded about $3 billion about 20 percent of the $15 billion it
has spent on Superfund through fiscal year 1997 in indirect costs
from final settlements with responsible parties. In the early
years of the program, EPA 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. The agency could
lose the opportunity to recover at least a half billion dollars

more if it does not soon reverse this practice. Recently,
Superfund program officials have developed a new way to determine
recoverable indirect costs that could increase EPA's cost
recoveries, but the Superfund program has not yet used this new
method because it is waiting for approval from EPA and the Justice
Department. Priority Setting The final Superfund issue that we
discussed in our high- risk series is the

absence of a system for prioritizing sites for cleanup based on
the risk they pose to human health and the environment. EPA has
partially corrected this problem. In 1995, it created the National
Prioritization Panel to help it set funding priorities for sites
at which remedies had been selected and that were ready for
cleanup. The panel, which is composed of regional and headquarters
cleanup managers, ranks all of the sites ready for cleanup
construction nationwide on the basis of the health and
environmental risks and other project considerations, such as
cost- effectiveness. EPA then approves funding for projects on the
basis of these priority rankings. EPA, however, does not use
relative risk as a major criterion when deciding which of the
eligible sites to place on the NPL. 6 In our discussions with EPA
managers responsible for assessing sites for Superfund
consideration, we found that the agency relies on the states to
choose which of the eligible sites to refer to EPA for placement
on the NPL. States refer sites after selecting those that they
will address through their own enforcement or voluntary cleanup
programs. The EPA cleanup managers with whom we talked expect that
future sites placed on the NPL will not necessarily be the 6 A
site is eligible for the NPL if it scores sufficiently high on
EPA's Hazard Ranking System, which

evaluates a site's potential risk to public health and the
environment.

Page 8 GAO/T-RCED-99-128

most risky but, rather, those that the states find to be large,
complex, and therefore costly, or those without responsible
parties willing and able to pay for the cleanup. Because EPA does
not usually track the status of cleanups that take place

outside of the Superfund program, EPA does not know if the worst
sites in the nation are being addressed first. Some EPA regions
are encouraging their states to voluntarily provide EPA with
information on the cleanup status of the sites that the states are
addressing and that EPA considers as potentially posing
significant risk. In addition to our work on the high- risk
aspects of the Superfund program, we have conducted detailed
analyses of spending in the program 7 . In summary, we have
reported that the share of Superfund expenditures that go to
cleanup contractors for the study, design, and implementation of
cleanups increased from fiscal years 1987 through 1996, but
declined in fiscal year 1997. We also reported that between fiscal
years 1996 and 1997,

EPA's Superfund costs for administration and support activities
correspondingly increased (see fig. 2). As you know, we are
currently conducting additional analysis of the Superfund
program's expenditures for this Committee and others. We plan to
report on the results of this work in May.

7 Superfund: Trends in Spending for Site Cleanups (GAO/RCED-97-
211, Sept. 4, 1997) and Superfund: Analysis of Contractor Cleanup
Spending (GAO/RCED-98-221, Aug. 4, 1998).

Page 9 GAO/T-RCED-99-128

Figure 2: Superfund Spending for Contractor Cleanup Work and Other
Program Activities, Fiscal Years 1996- 97, Dollars in Millions

Note: Other costs includes costs for enforcement activities,
research and development/ laboratories, and other directly related
costs. Source: Superfund: Analysis of Contractor Cleanup Spending
(GAO/RCED-98-221, Aug. 4, 1998).

The Future Direction Of Superfund Is Uncertain

EPA's inventory of potential NPL sites contains sites that have
been awaiting a decision for several years or more on whether they
should be listed on the NPL. EPA and state officials believe that
many of these sites need cleanup work, but the respective cleanup
responsibilities of EPA and the states have not been established.
As of the end of fiscal year 1997, EPA's Superfund database
indicated that the risks of over 3,000 sites had been judged on
the basis of preliminary evaluations to be serious enough to make
the sites potentially eligible for the NPL. EPA classified these
sites as awaiting an NPL decision. Information about the nature
and the extent of the threat that these sites

pose to human health and the environment, the extent of states' or
EPA's cleanup actions at the sites, and the states' or EPA's
cleanup plans for the sites is important to determining the future
size of the Superfund program. We surveyed EPA regions, other
federal agencies, and the states to (1)

determine how many of the over 3,000 sites remain potentially
eligible for the NPL; (2) identify the characteristics of these
sites, including their health 1996

Cleanup actions $614

43.5%

Study/ Design $81

5.7%

Admin./ Support $299

21.2%

Other costs $417

29.6% 1997

Cleanup actions $588

40.5%

Study/ Design $76

5.3%

Admin./ Support $355

24.4%

Other costs $432

29.8%

Page 10 GAO/T-RCED-99-128

and environmental risks; (3) determine the status of any actions
to clean up these sites; and (4) collect the opinions of EPA and
other federal and state officials on the likely final disposition
of these sites, including the number of sites that are expected to
be placed on the NPL. We reported the results of our surveys in
two November 1998 reports. 8

On the basis of our surveys, we determined that 1,789 of the 3,036
sites that EPA's database classified as awaiting an NPL decision
in October 1997 are still potentially eligible for placement on
the list. 9 EPA, other federal agency, and state officials
responding to our survey said that many of these sites presented
risks to human health and the environment. According to these
officials,  about 73 percent of the sites have caused
contamination in groundwater

and another 22 percent could contaminate groundwater in the
future;  about 32 percent of the sites caused contamination in
drinking water sources and another 56 percent could contaminate
drinking water sources in the future;  96 percent of the
potentially eligible sites are located in populated areas within a
half- mile of residences or places of regular employment; and
workers, visitors, or trespassers may have direct contact with
contaminants at about 55 percent of the sites. We asked officials
of EPA, other federal agencies, and states to rank the

risks of the potentially eligible sites. These officials
collectively said that about 17 percent of the potentially
eligible sites currently pose high risks to human health and the
environment, and another 10 percent of the sites (for a total of
27 percent) reportedly may also pose high risks in the future if
they are not cleaned up (see fig. 3). For about one- third of the
sites, the officials said that it was too soon or they needed more
information to determine the seriousness of the sites' risks, or
they provided no risk characterization. 8 Hazardous Waste:
Unaddressed Risks at Many Potential Superfund Sites (GAO/RCED-99-
8, Nov. 30, 1998, and Hazardous Waste: Information on Potential
Superfund Sites (GAO/RCED-99-22, Nov. 30, 1998). 9 We refer to
these 1,789 hazardous waste sites as "potentially eligible sites."
We consider the 1,234 other sites as unlikely to become eligible
for various reasons. For example, some sites were erroneously
classified as awaiting an NPL decision or do not meet EPA's
criteria for placement on the list. Other sites do not require
cleanup in the view of the responding officials, have already been
cleaned up, or have final cleanup activities underway. Whether
potentially eligible sites are eventually listed depends on, among
other things, a final evaluation by EPA and the states'
concurrence.

Page 11 GAO/T-RCED-99-128

Figure 3: Number of Potentially Eligible Sites With High, Average,
and Low Potential Risks

Source: Hazardous Waste: Unaddressed Risks at Many Potential
Superfund Sites (GAO/RCED-99-8, Nov. 30, 1998).

Officials responding to our surveys said that some cleanup
activities (which they stated were not final cleanup actions) have
taken place at 686 of the potentially eligible sites. These
actions were taken at more than half of the sites that were
reported to currently or potentially pose high risks, compared to
about a third of the sites that have been reported to currently

or potentially pose average or low risks. No cleanup activities
beyond initial site assessments or investigations have been
conducted or no information is available on any such actions at
the other 1, 103 potentially

eligible sites. 10 Many of the potentially eligible sites have
been in state and EPA inventories of hazardous sites for extended
periods. Seventy- three percent have been in EPA's inventory for
more than a decade. No cleanup progress was reported at the
majority of the sites that have been known for 10 years or more.
It is uncertain whether most potentially eligible sites will be
cleaned up; when cleanup actions, if any, are likely to begin; who
will do the cleanup; under what programs these activities will
occur; and what the extent of 10 Of the 1, 103 sites for which no
cleanup actions were reported, both EPA and the states said that
they had taken no cleanup actions beyond initial site assessments
at 719 of them. For 336 sites, EPA officials

alone said that their agency had taken no cleanup actions, but the
states provided no information. California, Massachusetts, and New
Jersey accounted for about 85 percent of these sites. Similarly,
for six sites, the states said that they had taken no action, but
EPA provided no information. Neither EPA nor the states provided
information on any cleanup actions that may have occurred at the
remaining 42 of the 1,103 sites.

Unknown risks (573 sites)

32%

Low potential risks (348 sites)

19%

Average potential risks (392 sites)

22%

High potential risks (476 sites)

27%

Page 12 GAO/T-RCED-99-128

responsible parties' participation will be. We did not receive
enough information from our survey to determine what cleanup
actions will be taken at more than half of the 1,789 potentially
eligible sites and whether

EPA or the states will take these actions (see fig. 4). We are
making no forecast of the number from the group of 1,789
potentially eligible sites that will be added to the NPL in the
future. However, EPA and state officials collectively believed
that 232 (13 percent) of the potentially eligible sites might be
placed on the NPL in the future. 11 Officials estimated that
almost one third of the potentially eligible sites are likely to
be cleaned up under state programs but usually could not give a
date for the start of cleanup activities. State officials stated
that, for about two- thirds of the sites likely to be cleaned up
under state programs, the extent of responsible parties'
participation is uncertain. This is important because officials of
about half of the states told us that their state's financial
capability to clean up potentially eligible sites, if necessary,
is poor or very poor. In addition, officials of about 20 percent
of the states said that their enforcement capacity (including
resources and legal authority) to compel responsible

parties to clean up potentially eligible sites is fair to very
poor. 11 However, EPA and the states agreed on the listing
prospects of only 26 specific sites.

Page 13 GAO/T-RCED-99-128

Figure 4: Estimates of the Likely Final Cleanup Outcome for 1, 789
Potentially Eligible Sites

Note: Other sites includes sites likely to be cleaned up under
other EPA programs (43), sites that either EPA or state programs
may clean up (13), and sites that are reportedly unlikely to be
cleaned up (19).

Source: Hazardous Waste: Unaddressed Risks at Many Potential
Superfund Sites (GAO/RCED-99-8, Nov. 30, 1998).

Our November report recommends that EPA review its inventory of
potential NPL sites to determine which of them need immediate
action and which will require long term cleanup action and, in
consultation with the

states, develop a timetable for taking these actions. In
conclusion, Mr. Chairman, despite the long durations of cleanups
in the past, Superfund is within sight of completing the
construction of cleanup remedies at most of the sites on the NPL.
While recognizing this accomplishment, we believe that management
problems and cost control issues we have reported on for several
years remain to be solved. Because few sites have been admitted to
the program in recent years, the NPL pipeline is clearing out. On
the other hand, there are many sites in EPA's inventory of
potential NPL sites that still need attention and possible
cleanup, but EPA and the states have postponed decisions,
sometimes for

up to 10 years or longer, on how to address them. Over the last
two decades, the states have built up the capacity to deal with
site cleanups to varying degrees. Some have substantial programs,
but others have limited resources and report that their ability to
pay for cleanups is poor. Furthermore, not all of the states have
adequate enforcement authority to force responsible parties to pay
for cleanups. Sites for which final

outcome is uncertain (946)

53%

Sites likely to be cleaned up under state programs (536)

30%

Other sites (75)

4%

Sites that might be placed on the NPL (232)

13%

Page 14 GAO/T-RCED-99-128

Because states generally now have the lead for screening sites for
NPL consideration, future NPL sites may disproportionately
represent complex cleanups for which responsible parties cannot be
found or are unwilling to ante up the full cost of the cleanup. We
have recommended that EPA work with the states to assign
responsibility among themselves for these sites. The Superfund
reauthorization process gives the Congress an opportunity

to help guide EPA and the states in allocating responsibility for
addressing these sites. Mr. Chairman, this concludes my prepared
statement. I will be happy to respond to your questions or the
questions of committee members.

(160479) Let t er

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