U.S. DEPARTMENT OF ENERGY
 OFFICE OF INSPECTOR GENERAL
 
 
 
 
 
 
 
 
 AUDIT OF GROUNDWATER MONITORING AT HANFORD
 
 
 
 
 
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Report Number: WR-B-97-03
Western Regional Audit Office
Date of Issue: November 15, 1996
Albuquerque, New Mexico 87185
 
 
 AUDIT OF GROUNDWATER MONITORING AT HANFORD
 
 
 
 
 TABLE OF CONTENTS
 
 
 Page
 
 
SUMMARY........................................... 1
 
PART I - APPROACH AND
OVERVIEW........................................... 2
 
Introduction....................................... 2 
 
Scope and Methodology.............................. 2 
 
Background......................................... 3
 
Observations and Conclusions....................... 3
 
PART II - FINDING AND
RECOMMENDATIONS.................................... 4
 
Hanford Site Groundwater
Monitoring......................................... 4
 
PART III - MANAGEMENT AND AUDITOR
COMMENTS........................................... 8
 
 
 U.S. DEPARTMENT OF ENERGY
 OFFICE OF INSPECTOR GENERAL
 OFFICE OF AUDIT SERVICES
 WESTERN REGIONAL AUDIT OFFICE
 
 AUDIT OF GROUNDWATER MONITORING AT HANFORD
 
Audit Report Number: WR-B-97-03
Novemer 15, 1996
 
 SUMMARY
 
 The Department of Energy (Department), Richland Operations
Office (Richland) is responsible for ensuring that its
contractors'tasks are mission oriented and are completed at the
least cost to the Department. The objective of this audit was to
determine whether Richland was effectively managing its
groundwater monitoring activities so that unnecessary duplication
would not occur.
 
 The audit showed that while Richland's groundwater
monitoring program was mission essential, it was not performed at
the least cost to the Department. Work performed by the three
principle contractors overlapped, resulting in duplicative
groundwater monitoring activities. Because of duplicative
efforts, the Department spent at least $700,000 in Fiscal Year
1995 and 1996 more than it should have and could save at least
$500,000 annually by implementing action to ensure coordination
of contractor's work for Hanford's groundwater monitoring.
 
 We recommended that the Manager, Richland, give mission
authority to the groundwater monitoring group to develop a
management strategy to coordinate Hanford's Site contractors'
groundwater monitoring activities.
 
 
________________________________
 
OFFICE OF INSPECTOR GENERAL
 PART I
 
 APPROACH AND OVERVIEW
 
INTRODUCTION
 
 The Resource Conservation and Recovery Act of 1976 (RCRA)
and the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (CERCLA)--as well as DOE Order 5400.1--
govern how the Richland Operations Office (Richland) is to
perform its cleanup activities. To ensure efficient compliance
with certain aspects of these regulatory requirements, Richland
formed a management group to coordinate the groundwater
monitoring activities of its contractors. The objective of this
audit was to determine whether Richland was effectively managing
its groundwater monitoring activities so that unnecessary
duplication would not occur.
 
SCOPE AND METHODOLOGY
 
 The audit was performed from November 28, 1995 through June
30, 1996, at Richland and its prime contractors: Westinghouse
Hanford Company (Westinghouse); Battelle-Pacific Northwest
National Laboratory (Battelle); and Bechtel Hanford Incorporated
(Bechtel), as well as at the Hanford Site. We accomplished the
audit objective by:
 
  reviewing laws and regulations;
  interviewing Department and contractor personnel;
  examining procurement and accounting procedures;
  reviewing plans, budgets, and actual expenditures;
  reviewing utilization of Department drilling equipment;
  observing well drilling activities;
  comparing drilling costs to other Department sites;
  analyzing groundwater monitoring activities; and,
  reviewing and comparing groundwater reports.
 
 The audit, conducted in accordance with generally accepted
Government Auditing Standards for economy and efficiency audits,
included tests of internal controls, laws, and regulations to the
extent necessary to satisfy the audit objective. We did not
extensively rely on computer-generated data; therefore, we did
not fully examine the reliability of that data. Because the
audit was limited, it would not necessarily have disclosed all
internal control deficiencies that may have existed.
 
 An exit conference was held with the Director, Restoration
Projects Division, the staff for the groundwater monitoring
management group and a representative from the Contract Finance
and Review Division on October 23, 1996.
 
BACKGROUND
 
 With the closing of Hanford's production reactors, the
Site's primary focus has changed from producing plutonium to
cleanup. A part of the cleanup is the monitoring of waste source
areas such as tank farms, ponds, and landfills to determine if
contaminants have been released into the groundwater. If
contaminants have been released, monitoring is used to assess and
document the extent and rate of contaminant movement so that the
appropriate remedial actions can be implemented.
 
 The Department funds the groundwater monitoring through
Hanford's Waste Management and Environmental Restoration
programs. In Fiscal Year 1996, Richland provided each
contractor the funds to perform groundwater monitoring,
remediation, and surveillance activities such as well drilling
and maintenance, groundwater sampling and analysis, and
reporting. Richland divided $48 million among three contractors.
Westinghouse received $15.6 million to perform RCRA groundwater
monitoring; of which $8.9 million was for groundwater monitoring
and supporting activities; Bechtel received $30 million to
perform CERCLA remediation work; of which about $700,000 was for
groundwater monitoring; and Battelle received $2.4 million to
perform sitewide groundwater surveillance. Richland provided
each contractor the funds to perform groundwater monitoring
activities such as well drilling and maintenance, groundwater
sampling and analysis, and reporting.
 
OBSERVATIONS AND CONCLUSIONS
 
 The audit showed that one aspect of Hanford's groundwater
monitoring--specifically, the drilling program--has improved. In
an effort to more effectively manage site cleanup and control
costs, Richland contracted with an environmental restoration
contractor in 1993 to conduct restoration of the Hanford Site.
The new contractor competitively awarded drilling subcontracts
for CERCLA well drilling. This procurement established fixed
unit costs for each well drilled and reduced the number of
personnel required for drilling. Richland also cut costs by
employing alternative drilling technologies. In addition,
Richland negotiated with Tri-Party regulators and reduced the
number of new RCRA wells required from 50 per year to "up to 50"
per year (no wells were installed in FY 1995 and only one was
installed in FY 1996). These actions and others have made
Hanford's drilling costs reasonable and comparable with other
Department sites.
 
 While well drilling activities have improved, the audit
detected problems with Richland's overall coordination of
groundwater monitoring, as described in Part II. Despite efforts
to address known problems, the Department still needs improvement
to its management plan to better coordinate current monitoring
tasks and avoid future duplication. The necessity for such
improvements, however, is not limited to Hanford. A recent OIG
report, Audit of Groundwater Remediation Plans at the Savannah
River Site (ER-B-96-02), for example, concluded that management
plans for groundwater remediation at this site also needed to be
improved.
 PART II
 
 FINDING AND RECOMMENDATIONS
 
 Hanford Groundwater Monitoring
 
FINDING
 
 Richland is responsible for ensuring that its contractors'
tasks are mission oriented and are completed at the least cost to
the Department. The audit determined, however, that while
Richland's groundwater monitoring program was mission essential,
it was not performed at the least cost to the Department. Work
performed by the three principle contractors overlapped,
resulting in duplicative groundwater monitoring activities.
Although Richland established a group to manage groundwater
activities, it had not given the group a defined mission, nor had
it provided function statements or job descriptions. Unless the
group is given such official sanction, it can not ensure that
groundwater monitoring activities are coordinated and not
duplicative. Because of duplicative efforts, the Department
spent about $700,000 more than it should have for monitoring and
could save over $500,000 annually by implementing actions to
ensure coordination of contractors' work for Hanford's
groundwater monitoring.
 
RECOMMENDATIONS
 
 We recommend that the Manager, Richland Operations Office,
ensure that the groundwater monitoring program is effective and
efficient. Specifically, we recommend that the Manager:
 
 1. Establish a defined mission, provide function
 statements, and give job descriptions for the group
 formed to manage and coordinate the Hanford site
 groundwater monitoring activities.
 
 2. Direct the groundwater monitoring group to develop a
 management strategy to coordinate Hanford contractorsm
 groundwater monitoring activities.
 
MANAGEMENT REACTION
 
 Management concurred with recommendation 1 and took action
that was responsive to recommendation 2. Details of management's
comments and our responses are included in Part III.
 
 
 DETAILS OF FINDING
 
 Richland is responsible for ensuring its contractors' work
is mission oriented, complies with federal regulations, and is
conducted at the least cost to the Department. As outlined in
its 1994 "Hanford Strategic Plan," Richland was to integrate
Hanford activities through established goals and management
strategies. One such goal was to manage cleanup efficiently by
applying management principles to achieve the desired end as
quickly and cost effectively as possible. Another was to have an
effective decisionmaking process that balanced quality,
acceptance, and timeliness of the decision. Further, Richland
sought to integrate all related contractor activities.
Integration, in this sense, refers to optimize resources to
achieve as many mission objectives as possible with the least
duplication of effort.
 
GROUNDWATER MONITORING ACTIVITIES
 
 The audit showed, however, that despite these goals,
Westinghouse, Battelle, and Bechtel had not completely eliminated
duplicated groundwater monitoring activities. The contractors
duplicated each others' work in groundwater sampling and modeling
analyses. Further, two of the contractors produced duplicative
reports and maintained similar management positions.
 
Sampling Analysis
 
 During 1995, Westinghouse and Battelle duplicated efforts by
collecting water samples from the same wells within 30 days of
each other. This occurred at 56 different wells during 1995. In
February 1995, for example, Westinghouse visited well 199-K-27,
took a water sample, and analyzed it for about 12 constituents,
such as bromide, chloride, fluoride, and nitrate. One day later,
Battelle visited the same well, also drew a water sample, and
tested it for the exact same constituents. Officials at each
contractor did not provide substantive or qualitative reasons for
taking duplicative samples. If appropriate coordination had
occurred, either contractor could have used the other's sample
results. Instead, costs associated with visiting the 56 wells
and analyzing the samples were paid twice.
 
 This duplicative activity continued into 1996 as well. A
review of monitoring activities for the first 6 months of 1996
showed that at least two of the Site's contractors visited the
same wells 33 times within 30 days of each other. One example
showed that Westinghouse duplicated its own efforts on at least
four occasions by visiting the same wells several times within a
few days for different projects. As in 1995, there was no
substantive reason for doing so and coordinated efforts could
have eliminated at least 33 samples and 33 sets of analyses. Had
the contractors adequately planned, information could have been
gathered for all contractors at once.
 
 Finally, in February 1996 Richland directed Battelle to
gather information on the groundwater under the tank farms.
However, Westinghouse had been sampling the tank farm groundwater
since 1991. Since groundwater information was already available,
Battelle's efforts were duplicative.
 
Modeling Analysis
 
 Hanford contractors also duplicated each others' work in
modeling. For example, Westinghouse, Battelle, and Bechtel each
applied their own models of groundwater movement. In applying
these models, the contractors duplicated groundwater analyses to
predict such action as declining groundwater levels and the
groundwater flow from an effluent disposal site. Additionally,
two contractors, Westinghouse and Bechtel, each paid the same
subcontractor on separate projects to develop forecasts of
groundwater contamination migration using separate models.
According to Richland officials, separate models were not
necessary for qualitative or scientific reasons, but were the
result of poor coordination.
 
Reports
 
 Westinghouse and Battelle each published annual reports
about Hanford Site groundwater to comply with environmental laws
and a Department Order. The reports contained similar
information, such as hydrogeology and radionuclide analyses. In
addition, Battelle published a third report that had one chapter
discussing groundwater monitoring sampling and analysis.
Although the reports were published to satisfy statutory
requirements, all such requirements could have been met with a
single document. Instead, the Department paid each of the two
contractors to produce separate reports. When questioned during
the audit, current users of the reports agreed that the reports
were duplicative and that all requirements could be satisfied
with one combined report.
 
Management Positions
 
 Because the audit identified several areas of potential
consolidation, as discussed above, we also examined contractor
management positions related to groundwater monitoring to
determine whether further efficiencies were available. Two
contractors, Westinghouse and Battelle, maintained organizations
with overlapping responsibilities. For example, we noted that
Westinghouse's Liquid Effluents Services performed many of the
same functions as Battelle's Groundwater Surveillance Project.
These two separate organizations used six personnel to manage the
activities. We discussed these concerns with Westinghouse's
Environmental Services Manager, who agreed with us that, given a
more coordinated approach, only three full time equivalent
management positions were need to effectively manage monitoring
activities.
 
COORDINATION OF GROUNDWATER MONITORING
 
 We were able to determine that duplicative activities of the
Hanford Site contractors have been ongoing since at least 1988.
This resulted because Richland had not coordinated the
contractors' groundwater monitoring activities. In October 1995,
Richland formed a group with the mission to coordinate such
activities. Since that time, this group has made efforts to
consolidate both the groundwater monitoring and reporting.
Although we believe the formation of the group is a positive
action, the group, as of the time of our audit, had neither
received an official charter nor position descriptions. We
believe that such official authority is needed to ensure success
for the group. In addition, although the group had started some
actions, it had not, as of June 30, 1996, developed an official
strategy to address overlapping groundwater monitoring
activities.
 
COSTS OF DUPLICATIVE EFFORTS
 
 The costs associated with duplicative groundwater monitoring
activities are significant. By implementing the report
recommendations to better control and coordinate monitoring,
Richland has the opportunity to reduce unnecessary costs by about
$500,000 annually. For example, although the exact amount could
not be determine, Richland could at least save $103,600 by
ensuring duplicative groundwater sampling is reduced. Also, by
combining groundwater reporting, savings of $164,000 can be
achieved. Finally, by consolidating groundwater monitoring
management, Richland could reduce personnel costs by about
$230,000.
 
 In addition to the estimated savings, Richland unnecessarily
spent almost $100,000 ($26,000 + $72,000) for three Hanford Site
contractors to perform similar groundwater analysis. For
example, Westinghouse, Battelle, and Bechtel each predicted
impacts of declining Hanford Site groundwater levels. In Fiscal
Year 1994, Battelle completed an analysis for about $50,000 that
predicted the groundwater levels for the next 15 years. Later
that same fiscal year, Westinghouse completed a similar analysis
for $26,000. Finally, in Fiscal Year 1996 Bechtel again made an
analysis predicting groundwater levels for $72,000. Another
example showed that in Fiscal Year 1996, Westinghouse and Bechtel
each hired the same subcontractor, for $475,000 and $400,000,
respectively, to perform groundwater modeling for the Hanford
Site Remedial Action Environmental Impact Statement and the
Environmental Impact Statement for the Tank Waste Remediation
System. According to Richland officials, had there been a
coordinated approach, the subcontract could have used the same
model for both statements, thereby, reducing overall costs.
 
 
 PART III
 
 MANAGEMENT AND AUDITOR COMMENTS
 
 The Manager, Richland Operations Office, concurred with one
recommendation, took action on the other, and provided additional
comments as detailed below.
 
RECOMMENDATIONS
 
 Management Comments. Management concurred with
recommendation 1, agreeing to establish a defined mission,
provide function statements, and give job descriptions for the
groundwater monitoring group.
 
 Auditor Comments. Management's comments are responsive;
however, Richland should provide an estimated completion date for
this action.
 
 Management Comments. Richland did not concur with
recommendation 2, to develop a management strategy to coordinate
Hanford contractors' groundwater monitoring activities. However,
on September 5, 1996, one of Richland's contracting officers
issued a letter to the Hanford contractors that stated Richland
has moved to a single "groundwater project" for Hanford and away
from separate and distinct groundwater "programs" operated by
three contractors. The letter defined the roles and
responsibilities each contractor was to follow in the future to
avoid redundancies and inefficiencies in the groundwater
programs.
 
 Auditor Comments. Even though Richland did not concur with
the recommendation, if it follows its own directions it will
achieve the results that we sought. Therefore, we have treated
management's actions as a concurrence.
 
COST SAVINGS
 
 Management Comments. Management indicated that the benefit
of combining groundwater monitoring reports was overstated. In
fact, management estimated that the cost to prepare a single
report was $274,000, the same amount currently spent to produce
two reports.
 
 Auditor Comments. The Office of Inspector General estimate
of savings includes annual report preparation costs for two
contractors to procure printing, paper, graphics, reviewers,
coordination, word processing and some quality control. Data
provided to us by management showed that the cost for one
contractor to prepare one report was about $110,000. Potential
savings, therefore, of about $164,000 ($274,000 - $110,000)
should be available.
 
 
 
Report No. WR-B-97-03
 
 
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