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GAO Report: Lax Contract Management Persists in Superfund Program

October 26, 1991

WASHINGTON (AP) _ The Environmental Protection Agency has ignored repeated recommendations for eliminating waste, fraud and abuse by contractors hired to clean up the nation’s most polluted sites, congressional investigators say.

In a study obtained by The Associated Press, the General Accounting Office found limited follow-through on suggestions it had made since 1988 to hold down Superfund contractors’ costs.

″EPA has studied some of these things. Somehow they never carry them out,″ said Barry Hill, GAO’s assistant director for Superfund issues.

In a follow-up to four previous reports, the GAO said EPA emphasized enforcement and the speed and quality of hazardous waste cleanups and paid too little attention to managing expenses.

″Only when press reports of excessive program management costs appeared did EPA set up a high-level task force to examine issues of Superfund contractor costs,″ the study said.

EPA Administrator William Reilly earlier this month ordered a re- examination of 45 major Superfund contracts to eliminate unnecessary overhead.

Rich Guimond, EPA’s national Superfund director, said he felt squeezed by several competing needs.

″I’m looking at the budget for 1992 and I’ve got $180 million less than the president requested,″ Guimond said. ″At the same time I want to increase oversight of money going to these contractors, I’m trying to speed up and triple the number of projects we complete by the end of ’93. Trying to balance those things is a difficult job and we’ll do the best we can.″

The GAO study cited several deficiencies in the way EPA manages and bird- dogs its contracts. Those included unlimited liability for contractor negligence and no safeguards against conflicts of interest involving contractors hired by both the EPA and polluters responsible for cleanups.

Three members of Congress who requested the study complained Thursday to Reilly that it’s time the agency more aggressively keep track of spending in the $15 billion program.

″This is no way for the EPA to manage and oversee a program which involves billions of taxpayer dollars,″ said the letter signed by Rep. John Dingell, D-Mich., Sen. Frank Lautenberg, D-N.J., and Sen. David Pryor, D-Ark. All three head subcommittees with jurisdiction over Superfund.

They noted that under Reilly’s direction, ″the EPA finally has begun to address these longstanding deficiencies in the Superfund program.″ But, they said, ″the ongoing attention of top management will finally be necessary to move EPA beyond simple acknowledgement.″

They asked Reilly for a detailed implementation plan by Nov. 6.

The GAO cited several problems in EPA’s contract management:

-The agency has not yet required its regional offices to prepare cost estimates of cleanup studies. Investigators visiting the Boston, Chicago, New York and Philadelphia offices found regional staffs had developed independent cost estimates for only four of 30 cleanup studies reviewed. In three of the cases, the agency estimates meant significant savings.

The contractor for the U.S. Radium site in Woodside, Queens, proposed a $3 million budget; EPA found the work could be done for $1.6 million. At the Higgins Farm site in Franklin Township, N.J., an independent government estimate reduced the study budget nearly $640,000 to under $1.2 million.

″Because the EPA does not prepare independent government estimates of cleanup costs, it cannot assess the reasonableness of costs proposed by its Superfund contractors,″ the lawmakers wrote.

-The two principal agencies charged with auditing Superfund contractors’ costs have such a backlog that EPA cannot assess the validity of charges.

-EPA continues to grant unlimited indemnification to almost all of its Superfund contractors even though GAO warned two years ago that the provision is excessive.

-In response to GAO’s 1989 report on contractor conflict of interest, EPA has made only ″limited attempts to improve guidance and increase contractor oversight.″

Dingell is chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations. Lautenberg is chairman of the Senate Superfund Subcommittee. Pryor is chairman of the Senate Subcommittee on Federal Services, Post Office and Civil Service.

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