GAO 

United States Government Accountability Office

Report to Congressional Requesters

SUPERFUND 

Information on Cost 

and Other Issues 

Related to the 

Cleanup of the 

Federal Creosote Site 

February 2010 

GAO-10-277 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

February 2010

SUPERFUND

Information on Cost and Other Issues Related to the 

Cleanup of the Federal Creosote Site 

Highlights of GAO-10-277, a report to 

congressional requesters 

In the 1990s, creosote was 

discovered under a residential 

neighborhood in Manville, New 

Jersey. Creosote, a mixture of 

chemicals, is used to preserve 

wood products, such as railroad 

ties. Some of the chemicals in 

creosote may cause cancer, 

according to the Environmental 

Protection Agency (EPA). EPA 

found that creosote from a former 

wood-treatment facility (known as 

the Federal Creosote site) had 

contaminated soil and groundwater 

at the site. Under the Superfund 

program—the federal government’s 

principal program to clean up 

hazardous waste—EPA assessed 

site risks, selected remedies, and 

worked with the U.S. Army Corps 

of Engineers to clean up the site. 

As of May 2009, construction of 

EPA’s remedies for the site had 

been completed; however, total site 

costs were almost $340 million and 

remedial construction costs had 

exceeded original estimates. 

In this context, GAO was asked to 

examine (1) how EPA assessed 

risks and selected remedies for the 

site, and what priority EPA gave to 

site cleanup; (2) what factors 

contributed to the difference 

between the estimated and actual 

costs; and (3) how EPA and the 

Corps divided responsibilities for 

site work. GAO analyzed EPA and 

Corps documents and data on the 

cleanup effort and its costs, and 

interviewed officials from these 

agencies. This report contains no 

recommendations. EPA generally 

agreed with GAO’s findings on the 

agency’s cleanup costs and actions, 

while the U.S. Army Corps of 

Engineers had no comments. 

The extent of the contamination in a residential area at the Federal Creosote 

site was the primary factor influencing EPA’s risk assessment conclusions, 

remedy selection decisions, and how EPA prioritized site work, according to 

site documents and agency officials. EPA assessed site contamination through 

multiple rounds of evaluation and concluded that soil and groundwater 

contamination levels were high enough that EPA needed to take action. Then, 

EPA evaluated remedies to achieve cleanup goals that it had established for 

the site and that were consistent with its residential use. EPA selected off-site 

treatment and disposal of the contaminated soil and long-term monitoring of 

the groundwater contamination as the remedies for the site. In selecting these 

remedies, EPA considered a range of alternatives but ultimately determined 

that certain options would be potentially infeasible or ineffective due to the 

residential setting. For example, EPA chose not to implement certain 

alternatives on-site because the agency found that there was insufficient space 

and they would be too disruptive to nearby residents. In addition, EPA chose 

not to implement certain alternatives because the agency found that they 

would be unlikely to achieve the cleanup goals for the site, especially 

considering the high level of treatment required to allow for unrestricted 

residential use of the area and the high levels of contamination found at the 

site. EPA made cleanup of the site a high priority because the contamination 

was in a residential area. For example, EPA took steps to shorten the cleanup 

period and prioritized the use of regional Superfund resources on the Federal 

Creosote site over other sites in the region. 

The $338 million in total site costs exceeded EPA’s estimated remedial 

construction costs of $105 million by about $233 million, primarily because 

EPA’s estimates focused only on construction costs, and EPA discovered 

additional contamination during the cleanup effort. EPA prepared preliminary 

cost estimates during the remedy selection process; however, EPA requires 

that these estimates include only the costs associated with implementing 

different remedies it was considering, not all site costs. Also, as a result of the 

movement of contamination in the ground and sampling limitations during 

EPA’s site investigation, a greater-than-expected amount of contamination 

was discovered during the cleanup effort, which increased costs. Other 

factors, such as contractor fraud, affected total site costs to a lesser extent. 

EPA was responsible for managing the overall site cleanup and community 

relations, while the Corps was responsible for implementing the cleanup. EPA 

dedicated a full-time staff member to manage the site cleanup who, according 

to EPA, maintained a significant on-site presence to ensure that the project 

remained on schedule and was adequately funded and to work with residents. 

EPA also oversaw the work of the Corps and its costs. To conduct the actual 

cleanup work, the Corps hired contractors to design or implement cleanup 

activities who, in turn, hired subcontractors for some tasks. The Corps 

oversaw the activities and costs of its primary contractors but, according to 

Corps officials, was less involved in selecting and overseeing subcontractors. 

View GAO-10-277 or key components.

For more information, contact John B. 

Stephenson at (202) 512-3841 or 

stephensonj@gao.gov. 
Page i GAO-10-277 

Contents 

Letter 1

Background 4 

EPA’s Risk Assessment, Remedy Selection, and Prioritization 

Decisions for the Federal Creosote Site Were Primarily 

Influenced by the Extent of the Contamination in a Residential 

Area 11 

Total Site Costs Exceeded Early Construction Cost Estimates 

Largely because of the Nature of these Estimates and the 

Discovery of Additional Contamination 28 

EPA Provided Overall Project Management and Communicated 

with Residents, while the Corps Oversaw Contractor 

Implementation of the Remedy 43 

Agency Comments and Our Evaluation 50 

Appendix I Summary of Criminal and Civil Litigation Related 

to the Federal Creosote Site 52 

Appendix II Objectives, Scope, and Methodology 57 

Appendix III Timeline of EPA Actions at the Federal Creosote 

Site 62 

Appendix IV Comments from the Environmental Protection 

Agency 65 

Appendix V GAO Contact and Staff Acknowledgments 67 

Tables 

Table 1: EPA’s Remedial Alternative Evaluation Criteria 9 

Table 2: Other Response Costs Not Included in Construction 

Estimates for the Federal Creosote Site 30 

 Superfund 
Table 3: Difference between Estimated Soil Quantities in the RODs 

and Final Soil Quantities at the Federal Creosote Site, by 

OU 31 

Table 4: Estimated and Actual Remedial Construction Costs at the 

Federal Creosote Site 39 

Figures 

Figure 1: Map of the Federal Creosote Site in the Borough of 

Manville, New Jersey 5 

Figure 2: EPA’s Site Cleanup Process 7 

Figure 3: Difference between Estimated Construction and Total 

Site Costs at the Federal Creosote Site 29 

Figure 4: Rustic Mall Areas Remediated at the Federal Creosote 

Site 33 

Figure 5: Residential Area Properties Remediated at the Federal 

Creosote Site 35 

Figure 6: Actual Remedial Construction Costs as a Portion of the 

Difference between Estimated Construction and Total 

Site Costs at the Federal Creosote Site 37 

Figure 7: Contrasting Methodologies and Contractor Fraud as a 

Portion of the Difference between Estimated 

Construction and Total Site Costs at the Federal Creosote 

Site 42 

Figure 8: Key Events Related to Risk Assessment and Remedy 

Selection at the Federal Creosote Site 63 

Figure 9: Key Events Related to Remedial Design and Action at the 

Federal Creosote Site 64 

Page ii GAO-10-277 Superfund
Abbreviations 

ATSDR Agency for Toxic Substances and Disease Registry 

BEI Bennett Environmental, Inc. 

CEFMS Corps of Engineers Financial Management System 

CERCLA Comprehensive Environmental Response, Compensation, 

and Liability Act of 1980 

EPA Environmental Protection Agency 

IDIQ indefinite-delivery/indefinite-quantity 

LTTD low temperature thermal desorption 

NJDEP New Jersey Department of Environmental Protection 

NPL National Priorities List 

OU operable unit 

PRAC pre-placed remedial action contract 

RI/FS remedial investigation/feasibility study 

ROD record of decision 

RPM Remedial Project Manager 

SCORPIOS Superfund Cost Recovery Package Imaging and On-Line 

System 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately. 

Page iii GAO-10-277 Superfund
Page 1 GAO-10-277 Superfund 

 

United States Government Accountability Office

Washington, DC 20548 

 

February 25, 2010 

The Honorable Harry M. Reid 

Majority Leader 

United States Senate 

The Honorable James M. Inhofe 

Ranking Member 

Committee on Environment 

 and Public Works 

United States Senate 

In the 1990s, creosote contamination was discovered at the Federal 

Creosote site, a former wood-treatment facility in the Borough of Manville, 

New Jersey, that had been developed into a residential community of 

single-family homes and a retail mall. Creosote—a mixture of 

approximately 300 chemicals—is used to preserve wood, and the 

Environmental Protection Agency (EPA) has identified some of these 

chemicals as probable human carcinogens. Under the Superfund 

program—the federal government’s principal program to clean up 

hazardous waste sites—EPA worked with the U.S. Army Corps of 

Engineers (the Corps) to construct remedies to address site 

contamination. This work was completed in 2008, although some 

maintenance and groundwater monitoring efforts continue. Early 

construction cost estimates for these remedies totaled $105 million.1

However, as of May 2009, EPA had spent almost $340 million on the 

cleanup, including $246 million to construct site remedies and $92 million 

in other response costs that were not part of EPA’s early estimates.2

 The 

increase in actual remedial construction costs over the agency’s original 

1

This figure represents the total of EPA’s estimated costs for remedial construction 

activities conducted through the spring of 2009 to address contamination at different areas 

of the site, which we discounted using a present value analysis and adjusted to fiscal year 

2009 constant dollars. As a result of the methodology we used to adjust these costs, this 

figure does not match EPA’s published estimates for completed and remaining work at the 

site, which totaled about $118 million in nominal dollars. As per GAO internal guidance, we 

are reporting all costs in fiscal year 2009 constant dollars, unless otherwise noted. 

2

We developed these data on actual site costs using data provided by EPA and the Corps. 

As a result of the methodology we used to adjust the data to fiscal year 2009 constant 

dollars, these figures do not match other EPA-published information on site costs. 
 

estimates raised questions about whether EPA had selected the most costeffective remedy, given site risks and the extent of contamination. 

Furthermore, the Department of Justice (Justice) and the state of New 

Jersey are pursuing civil claims against the site’s alleged responsible party 

related to cost recovery and—as part of the claims brought by the state of 

New Jersey—damages;3

 Justice has also filed criminal charges against 

several parties involved in the cleanup, asserting claims related to alleged 

fraud in awarding subcontracts by contractor personnel.4

The Comprehensive Environmental Response, Compensation, and 

Liability Act (CERCLA) of 1980 established the Superfund program to 

protect human health and the environment from the effects of hazardous 

substances. Under this program, EPA has the authority to (1) clean up 

hazardous waste sites and then seek reimbursement from the parties 

responsible for contaminating them or (2) compel the responsible parties 

to clean up these sites. The Superfund cleanup process begins with site 

discovery or notification to EPA of the possible release of hazardous 

substances posing a threat to human health or the environment. On the 

basis of an initial evaluation, EPA may select a site for inclusion on the 

National Priorities List (NPL), which catalogs many of the nation’s most 

seriously contaminated sites. For sites that EPA lists on the NPL, the 

agency initiates a more extensive investigation process to identify the 

nature and extent of contamination at the site, quantify potential risks to 

human health and the environment, and evaluate potential remedies to 

address site contamination. Selected remedies are then planned in the 

remedial design phase and implemented in the remedial action phase.5

EPA’s initial investigation at the Federal Creosote site identified 

contamination from the lagoons and canals of the former wood-treatment 

facility beneath the residential portion of the site. After listing the site on 

the NPL, EPA conducted additional investigations to quantify site risks; 

evaluated potential remedies to address contamination, including 

preparing cost estimates; and selected remedies for the site. EPA tasked 

the Corps with designing and implementing these remedies. The Corps 

 

3

Justice files claims on behalf of the federal government, including agencies such as EPA. 

4

In addition, a site contractor that was tasked with implementing the cleanup also filed a 

civil litigation action against several of these parties asserting claims related to alleged 

fraud. 

5

EPA also can take removal actions at any time; these are generally short-term or 

emergency actions to mitigate immediate threats. 

Page 2 GAO-10-277 Superfund 
 

hired contractors to perform the design and construction work, and, in 

turn, the prime contractor for the construction work hired subcontractors 

to perform certain tasks, such as soil transportation, treatment, and 

disposal; landscaping; and wastewater treatment. 

In this context, you asked us to review issues concerning the Federal 

Creosote site. Our objectives were to examine (1) how EPA assessed the 

risks and selected the remedies for the Federal Creosote site, and what 

priority EPA assigned to site cleanup; (2) what factors contributed to the 

difference between the estimated and actual costs of cleaning up the site; 

and (3) how responsibilities for implementing and overseeing site work 

were divided between EPA and the Corps. We also summarized 

information on criminal and civil litigation related to the Federal Creosote 

site (see app. I). 

To examine how EPA assessed risks and selected remedies for the site as 

well as what priority EPA assigned to the cleanup, we analyzed site 

documents detailing the results of the agency’s activities and decisions at 

the site. We also interviewed relevant EPA and other federal, state, and 

local officials. To determine what factors contributed to the difference 

between the estimated and actual costs of site cleanup, we obtained and 

analyzed data on estimated construction and total site costs from site 

documents that detailed EPA’s planned activities, EPA and Corps costtracking databases, and contractor cost summary reports. To compare 

estimated construction and total site costs, in accordance with our policy, 

we adjusted the estimated construction costs using a present value 

analysis and, to adjust for inflation, converted all dollar figures into fiscal 

year 2009 constant dollars. We also analyzed site documents describing 

the cleanup effort, reviewed EPA cost-estimating guidance, and conducted 

interviews with EPA and Corps officials. To describe how responsibilities 

for implementing and overseeing the site work were divided between EPA 

and the Corps as well as EPA’s oversight actions, we reviewed EPA 

interagency agreements with the Corps, site documents, and EPA 

guidance and interviewed EPA and Corps officials. To describe actions 

that the Corps took to implement its site responsibilities, we reviewed 

Corps guidance, Corps correspondence to the contractor, and contractor 

requests for approval of certain subcontracts and also interviewed Corps 

and EPA officials. To identify civil and criminal litigation related to the 

Federal Creosote site, we collected and reviewed information from 

publicly available court documents to summarize the cases and, where 

applicable, their outcome. We evaluated the reliability of the site actual 

cost data used in our analyses by, for example, comparing the data across 

different sources and reviewing agency data reliability controls. We 

Page 3 GAO-10-277 Superfund 
 

determined that these data were sufficiently reliable for our purposes. See 

appendix II for a more detailed description of our scope and methodology. 

We conducted our work from May 2008 through February 2010 in 

accordance with all sections of GAO’s Quality Assurance Framework that 

are relevant to our objectives. The framework requires that we plan and 

perform the engagement to obtain sufficient and appropriate evidence to 

meet our stated objectives and to discuss any limitations in our work. We 

believe that the information and data obtained, and the analyses 

conducted, provide a reasonable basis for any findings and conclusions in 

this product. 

Creosote is derived by distilling tar; the type of creosote most commonly 

used for wood-treating is manufactured from coal tar. Polycyclic aromatic 

hydrocarbons—chemicals formed during the incomplete burning of coal, 

oil, gas, or other organic substances—generally make up 85 percent of the 

chemical composition of creosote. EPA classifies some of the polycyclic 

aromatic hydrocarbons in creosote, such as benzo(a)pyrene, as probable 

human carcinogens. Some polycyclic aromatic hydrocarbons also may 

have noncarcinogenic health effects, such as decreased liver or kidney 

weight. 

Background 

From approximately the early 1910s to the mid-1950s, the Federal 

Creosote site was a wood-treatment facility. Untreated railroad ties were 

delivered to the site and, to preserve them, coal tar creosote was applied 

to the railroad ties at a treatment plant located on the western portion of 

the property (see fig. 1 for an illustration of the site). Residual creosote 

from the treatment process was discharged into two canals that led to two 

lagoons on the northern and southern parts of the site, respectively. After 

treatment, the railroad ties were moved to the central portion of the 

property, where excess creosote from the treated wood dripped onto the 

ground. The treatment plant ceased operations in the mid-1950s. During 

the late 1950s and early 1960s, the area where the treatment plant was 

formerly located was developed into a 15-acre commercial and retail 

property known as the Rustic Mall. Through the mid-1960s, other areas of 

the property, including the former canal, lagoon, and drip areas, were 

developed into a 35-acre residential neighborhood known as the 

Claremont Development, which was made up of 137 single-family homes 

that housed several hundred residents. 

Page 4 GAO-10-277 Superfund 
 

Figure 1: Map of the Federal Creosote Site in the Borough of Manville, New Jersey 

Source: GAO analysis of EPA site documents.

Main Street

East Camplain Road

Lagoon A 

Canal B Lagoon B

Rustic Mall

Canal A

Norfolk Southern Railroad

CSX Railroad

N

Former woodtreatment facility

East Camplain Road

Valerie Drive

Valerie Drive

Louise Drive

Louise Drive

Clare Court

CoFlorence

urt

Claremont Development

residential area

Drip area

Valerie Road

Issues with creosote contamination at the site became apparent in April 

1996, when the New Jersey Department of Environmental Protection 

(NJDEP) responded to an incident involving the discharge of an unknown 

thick, tarry substance from a sump located at one of the residences in the 

Claremont Development. Later, in January 1997, the Borough of Manville 

responded to complaints that a sinkhole had developed around a sewer 

pipe in the Claremont Development. Excavation of the soil around the 

sewer pipe identified a black, tar-like material in the soil. After an initial 

site investigation, EPA found contamination in both the surface and 

subsurface soils as well as in the groundwater beneath the site. In 1999, 

EPA placed the site on the NPL and divided it into three smaller units, 

Page 5 GAO-10-277 Superfund 
 

called operable units (OU).6 OU1 consisted of the source contamination 

(free-product creosote) in the lagoon and canal areas of the Claremont 

Development. OU2 included other soil contamination in the Claremont 

Development, such as residually contaminated soil at properties over and 

near the lagoon and canal areas and the drip area of the former woodtreatment facility. OU2 also included contamination at a nearby day-care 

facility. OU3 included the Rustic Mall soil contamination as well as 

groundwater contamination throughout the site.7

EPA completed all major site cleanup work in November 2007, and the site 

was declared “construction complete” in March 2008.8

 Ultimately, EPA 

performed cleanup activities on 93 of the 137 properties in the residential 

area as well as on the commercial portion of the site. EPA’s ongoing 

activities at the site include monitoring groundwater contamination, 

conducting 5-year reviews of contamination levels to ensure that the 

remedy remains protective of human health and the environment, and 

selling properties that EPA acquired during the remedial action. According 

to EPA officials, the agency could remove the site from the NPL as early as 

2011; however, this decision will depend on the results of contamination 

monitoring at the site. 

Most Superfund sites progress through the cleanup process in roughly the 

same way, although EPA may take different approaches on the basis of 

site-specific conditions. After listing a site on the NPL, EPA initiates a 

process to assess the extent of the contamination, decides on the actions 

that will be taken to address that contamination, and implements those 

actions. Figure 2 outlines the process EPA typically follows, from listing a 

site on the NPL through deletion from the NPL. 

 

6

Sites are often divided into OUs by geography, pathways of contamination (e.g., 

groundwater), or type of remedy. 

7

As part of the OU3 groundwater investigation, EPA also looked at off-site groundwater, 

surface water, and sediment contamination that may have been related to the site. 

8

EPA Region 2, which covers New Jersey, New York, Puerto Rico, the U.S. Virgin Islands, 

and seven federally recognized Indian tribes, was responsible for the Federal Creosote site. 

Page 6 GAO-10-277 Superfund 
 

Figure 2: EPA’s Site Cleanup Process 

Source: GAO rce: GAO analysis of EPA data.

Milestones

Phases Site Study Remedial Action Operation and Maintenance

Remedial

action

Remedial

investigation

Remedial

design

NPL Listing

Record of Decision

Construction Complete

Feasibility

study

Deletion from tne NPL

In the site study phase of the cleanup, EPA or a responsible party 

conducts a two-part remedial investigation/feasibility study (RI/FS) 

process.9

 The first part of this process—the remedial investigation—

consists of data collection efforts to characterize site conditions, 

determine the nature of the waste, assess risks to human health and the 

environment, and conduct treatability testing as necessary to evaluate the 

potential performance and cost of the treatment technologies that are 

 

9

According to EPA guidance, the RI/FS process is a dynamic, flexible process that can be 

tailored to the circumstances of individual sites. The objective of the RI/FS is not to remove 

all uncertainties associated with the site cleanup but, rather, to gather sufficient 

information to support informed decision making regarding which remedy appears to be 

the most appropriate for a site. 

Page 7 GAO-10-277 Superfund 
 

being considered.10 During the second part of the RI/FS process—the 

feasibility study—EPA identifies and evaluates various options to address 

the problems identified through the remedial investigation. EPA also 

develops cleanup goals, which include qualitative remedial action 

objectives that provide a general description of what the action will 

accomplish (e.g., preventing contamination from reaching groundwater) 

as well as preliminary quantitative remediation goals that describe the 

level of cleanup to be achieved.11 According to EPA guidance, it may be 

necessary to screen out certain options to reduce the number of 

technologies that will be analyzed in detail to minimize the resources 

dedicated to evaluating less promising options. EPA screens technologies 

on the basis of the following three criteria: 

• effectiveness: the potential effectiveness of technologies in meeting the 

cleanup goals, the potential impacts on human health and the environment 

during implementation, and how proven and reliable the technology is 

with respect to the contaminants and conditions at the site; 

• implementability: the technical and administrative feasibility of the 

technology, including the evaluation of treatment requirements and the 

relative ease or difficulty in achieving operation and maintenance 

requirements; and 

• cost: the capital and operation and maintenance costs of a technology (i.e., 

each technology is evaluated to determine whether its costs are high, 

moderate, or low relative to other options within the same category). 

 

10To assess site risks during the remedial investigation, EPA generally follows a four-step 

process: (1) contaminant identification—narrowing down the list of contaminants for risk 

analysis on the basis of which contaminants present the biggest threats to human health; 

(2) exposure assessment—identifying current and future pathways for how individuals 

could be exposed to contamination on the basis of how the site is or could be used; 

(3) toxicity assessment—examining the potential health effects of contaminants on the 

basis of their toxicity; and (4) risk characterization—estimating the potential risks from 

exposure to contaminants. EPA’s acceptable levels for carcinogenic human health risks are 

based on a range of values—between 1 in 10,000 individuals and 1 in 1 million individuals—

that represent the excess probability a person will develop cancer over a lifetime as a result 

of exposure to contamination. If human health risks are greater than 1 in 10,000, they are 

considered to be above EPA’s acceptable range. For noncarcinogenic risks, EPA calculates 

a hazard index value that sums the values for individual noncarcinogenic effects from site 

contaminants. If the hazard index exceeds a value of 1, EPA assumes there is a potential 

for noncarcinogenic health effects to occur from exposure to site contamination. 

11Generally, final remediation goals are determined when a remedy is selected. 

Page 8 GAO-10-277 Superfund 
 

After screening the technologies that it has identified, EPA combines 

selected technologies into remedial alternatives. EPA may develop 

alternatives to address a contaminated medium (e.g., groundwater), a 

specific area of the site (e.g., a waste lagoon or contaminated hot spot), or 

the entire site. EPA guidance states that a range of alternatives should be 

developed, varying primarily in the extent to which they rely on the longterm management of contamination and untreated wastes. In addition, 

containment options involving little or no treatment, as well as a no-action 

alternative, should be developed. EPA then evaluates alternatives using 

the nine evaluation criteria shown in table 1 and documents its selected 

alternative in a record of decision (ROD).12 

Table 1: EPA’s Remedial Alternative Evaluation Criteria 

Criterion Description 

Overall protection of human health and 

the environment 

An alternative’s ability to protect human health and the environment through engineered 

systems and institutional controls that eliminate, reduce, or control risks.a

Compliance with applicable or relevant 

and appropriate requirements 

An alternative’s ability to comply with federal, state, and local environmental and health 

regulations, and other advisory or guidance criteria. 

Long-term effectiveness and permanence The degree of certainty that an alternative will be successful, considering the risks 

remaining after the remedial action and the adequacy and reliability of engineering and 

institutional controls. 

Reduction of toxicity, mobility, or volume 

through treatment 

An alternative’s ability to permanently and significantly reduce the toxicity, mobility, or 

volume of hazardous substances through treatment. 

Short-term effectiveness An alternative’s effects on and risks to workers, surrounding communities, and the 

environment during the remedial action as well as the time required to achieve the 

remedial action objectives. 

Implementability The relative ease or difficulty associated with implementing an alternative, considering the 

technical and administrative feasibility of remedial technologies, and the availability of 

required labor, equipment, and materials. 

Cost An alternative’s capital and operation and maintenance costs. 

State/Agency acceptance The extent to which the state and other regulatory agencies support an alternative. 

Community acceptance The extent to which the community supports an alternative. 

Source: GAO analysis of EPA site documents. 

 

12These criteria were developed to incorporate the remedy selection requirements and 

preferences of section 121 of CERCLA, which mandates, among other requirements, that 

remedial actions be protective of human health and the environment and be cost-effective. 

CERCLA also indicates a preference for actions that reduce the toxicity, mobility, or 

volume of contamination through treatment. 

Page 9 GAO-10-277 Superfund 
 

Note: These criteria are not weighted equally in EPA’s evaluation. The first two are threshold criteria 

that must be met for an alternative to be eligible for selection. The third through the seventh (longterm effectiveness through cost) are balancing criteria used to compare trade-offs between the 

alternatives. The last two are modifying criteria that are considered after a public comment period on 

EPA’s proposed plan. 

a

Institutional controls, such as deed restrictions on future land use, are limited measures that are 

intended to minimize potential human exposure to contaminants. These measures are typically 

implemented along with other technologies because they do not reduce contaminant levels or prevent 

migration. 

Next, either EPA or a responsible party may initiate the remedial action 

that was documented in the ROD. Like the RI/FS, implementation of the 

remedial action is divided into two phases. The first phase is the remedial 

design, which involves a series of engineering reports, documents, and 

specifications that detail the steps to be taken during the remedial action 

to meet the cleanup goals established for the site. For EPA-led remedial 

actions, EPA may either select a private contractor to perform the 

remedial design or, under a 1984 interagency agreement with the Corps, 

assign responsibility for designing the remedial action to the Corps, which 

may select and oversee a private contractor to perform the design work.13

The second phase is the remedial action phase, where the selected 

remedy, as defined by the remedial design, is implemented. Similar to the 

design phase, for EPA-led remedial actions, EPA may either select a 

private contractor to perform the remedial action or assign the remedial 

action to the Corps, which would be responsible for contractor selection 

and oversight during the remedial construction. 

When physical construction of all remedial actions is complete and other 

criteria are met, EPA deems the site to be “construction complete.” Most 

sites then enter into an operation and maintenance phase, when the 

responsible party or the state maintains the remedy while EPA conducts 

periodic reviews to ensure that the remedy continues to protect human 

health and the environment. For example, at a site with soil 

contamination, the remedial action could be to build a cap over the 

contamination, while the operation and maintenance phase would consist 

of monitoring and maintaining the cap. Eventually, when EPA determines, 

with state concurrence, that no further remedial activities at the site are 

appropriate, EPA may delete the site from the NPL. 

 

13EPA referred to the 1984 interagency agreement with the Corps as an “umbrella” 

agreement. If EPA chooses to assign work to the Corps, EPA establishes site-specific 

interagency agreements that document the type of work to be performed and an initial 

budget. 

Page 10 GAO-10-277 Superfund 
 

The extent of the contamination in a residential area at the Federal 

Creosote site was the primary factor that influenced EPA’s risk 

assessment conclusions, remedy selection decisions, and site work 

priorities. EPA determined that risk levels were unacceptable given the 

site’s residential use. EPA then selected remedies for the site, taking into 

account space constraints and other challenges associated with a 

residential cleanup. Finally, EPA placed a high priority on scheduling and 

funding site work because the contaminated area was residential, thereby 

reaching key cleanup milestones relatively quickly. 

EPA’s Risk 

Assessment, Remedy 

Selection, and 

Prioritization 

Decisions for the 

Federal Creosote Site 

Were Primarily 

Influenced by the 

Extent of the 

Contamination in a 

Residential Area 

EPA Assessed Risks and 

Selected Cleanup Goals on 

the Basis of the Site’s 

Residential Use 

From the spring of 1997 to the summer of 2001, EPA conducted multiple 

rounds of sampling and risk assessment at the Federal Creosote site and 

concluded that human health risks exceeded acceptable levels.14 

Specifically, EPA assessed the air, groundwater, surface soil, and 

subsurface soil as part of an initial site investigation and an RI/FS process. 

See appendix III for a timeline of EPA’s risk assessment activities.15

EPA’s initial investigation of site contamination, which began in 1997, 

included such efforts as assessing whether contamination was affecting 

public drinking water supplies; investigating the nature of the bedrock and 

the aquifer underlying the site; collecting soil samples from 30 properties 

selected on the basis of their proximity to the lagoons, canals, and drip 

area of the former wood-treatment facility; and collecting approximately 

1,350 surface soil samples (up to 3 inches below the ground surface) from 

133 properties in and near the residential development. From this initial 

 

14Although these efforts were largely conducted by EPA contractors, the agency provided 

direction and oversight to the contractors, and, therefore, we refer to them as EPA efforts. 

15We excluded EPA’s Hazard Ranking System evaluation results from our discussion of 

EPA’s risk assessment because EPA officials said that the risk assessment process is 

different from the Hazard Ranking System evaluation that is conducted as part of the NPL 

listing process. The officials said that the goal of the listing process is to determine whether 

a site requires additional evaluation, and that a site’s Hazard Ranking System evaluation 

score does not relate to EPA’s human health risk assessment. 

Page 11 GAO-10-277 Superfund 
 

investigation, EPA concluded that site contamination posed unacceptable 

human health risks. For example, while EPA found that contamination did 

not pose short-term health risks that could require an evacuation of 

residents, EPA found that the contamination was extensive and 

uncontrolled; had impacted soil, sediment, and groundwater in the area; 

and likely posed long-term health risks. For soil contamination in 

particular, EPA determined that, in some areas, the contamination was 

within 2 to 3 feet of the ground surface; in other areas, EPA found that the 

contamination was covered by little or no fill material.16 According to a 

site document, one resident had discovered a large amount of buried tar 

when installing a fence on his property. As a result of its concerns that 

surface soil contamination could pose a risk to residents, EPA developed a 

surface soil risk assessment in January 1999. EPA concluded th

contamination levels at 27 properties in the residential area posed longterm human health risks, including carcinogenic or noncarcinogenic risks 

(or both), that exceeded acceptable levels. In addition to soil 

contamination, EPA’s initial investigation determined that creosote had 

contaminated groundwater in the soil as well as in fractures in the 

bedrock underlying the site, which was a potential source of drinking 

water. Furthermore, EPA’s aquifer investigation showed that groundwater 

from the site had the potential to influence the Borough of Manville’s 

municipal water supply wells, although Region 2 officials said the nature 

of the fractures made it difficult for EPA to determine whether site 

contamination would actually affect the wells. 

at soil 

 

According to Region 2 officials, the purpose of a remedial investigation is 

to collect enough data to determine whether there is a need to take a 

remedial action. These officials said that an RI/FS for OU1 was not 

necessary because EPA had obtained much more information from its 

initial investigation on the extent of contamination at properties over the 

lagoon and canal source areas than is typically available to support taking 

an action. Also, according to EPA, the data that were collected during this 

initial investigation were equivalent in scope to that of a remedial 

investigation. Therefore, because EPA was trying to address the source 

contamination in the residential area on an expedited basis, the agency 

chose to incorporate these data into an Engineering Evaluation/Cost 

Analysis because it allowed EPA to evaluate remedial alternatives in a 

16EPA found that 19 properties had high levels of surface soil contamination. To limit 

potential exposures at certain properties, in July 1998, EPA took removal actions, such as 

applying topsoil or other materials. 

Page 12 GAO-10-277 Superfund 
 

more streamlined way, as compared with an RI/FS report.17 However, for 

OU2 and OU3, EPA initiated an RI/FS process in 1998 to more fully 

characterize the extent of soil and groundwater contamination throughout 

the site.18 EPA’s OU2 soil evaluation determined that elevated levels of 

creosote contamination close to the surface in the residential area were 

generally found near the lagoons and canals, while the drip area generally 

had residual levels of contamination close to the surface. Underlying the 

site, EPA found that free-product creosote rested on a clay layer 

approximately 6 to 10 feet below the surface, although in some areas the 

layer was not continuous, and the creosote had migrated as deep as the 

bedrock, roughly 25 to 35 feet underground. On the basis of these findings, 

in April 2000, EPA developed a human health risk assessment for soil 

contamination in the residential area using a sample of six representative 

properties: two properties each represented the lagoon and canal areas, 

the drip area, and the remaining residential area, respectively.19 EPA found 

that soil contamination exceeded acceptable risk levels at the lagoon and 

canal and drip areas, but not at properties representing other areas of the 

Claremont Development. 

 

17At the Federal Creosote site, EPA initially began evaluating whether to address site 

contamination under its removal program and, therefore, started preparing an Engineering 

Evaluation/Cost Analysis, which is required under the National Contingency Plan to 

support certain types of removal actions. The National Oil and Hazardous Substances 

Pollution Contingency Plan, referred to as the National Contingency Plan, is published in 

the Federal Register and can be found in the Code of Federal Regulations at 40 CFR Part 

300. This plan, which was revised pursuant to CERCLA, establishes the procedures and 

standards for responding to releases of hazardous substances. According to EPA guidance 

(see EPA, Guidance on Conducting Non-Time-Critical Removal Actions Under CERCLA, 

EPA 540-R-93-057 (Washington, D.C.: August 1993)), the goals of an Engineering 

Evaluation/Cost Analysis are to identify the objectives of a removal action and to evaluate 

various alternatives that may be used to satisfy these objectives on the basis of their cost, 

effectiveness, and implementability. EPA’s guidance also states that an Engineering 

Evaluation/Cost Analysis, although less comprehensive, is similar to the RI/FS conducted 

for a remedial action. 

18To evaluate OU2 soil contamination, EPA took approximately 2,000 soil samples, among 

other activities. EPA’s investigation of OU3 soil contamination included taking almost 250 

soil samples, while its groundwater investigation included taking samples from monitoring 

wells and collecting data on the movement of groundwater contamination in the soil and 

bedrock. 

19EPA officials said it would have been labor-intensive to assess the risks for each 

residential property because of the large number of properties and the amount of data and 

calculations involved. Also, according to EPA, an equally important consideration was the 

time involved in assessing the risks for each individual property, since this would have 

potentially delayed remediation of the site and prolonged residents’ exposure to 

contamination. 

Page 13 GAO-10-277 Superfund 
 

Furthermore, EPA’s OU3 soil analysis revealed that contamination was 

generally in three main areas of the mall, with several other “hot spots” of 

contaminated material. EPA also determined that most of the soil 

contamination was within the first 2 feet below the ground surface; 

however, in certain areas, contamination was as deep as 35 feet below the 

surface. EPA noted that it did not collect soil samples from under the mall 

buildings, although, according to a site document, EPA thought it likely 

that contamination remained under at least a portion of one of the 

buildings. EPA assessed the human health risks from exposure to soil 

contamination in June 2001. At the time of EPA’s assessment, OU3 was a 

commercial area. However, the Borough of Manville and the mall owner 

had indicated that the area could be redeveloped for a mixed 

residential/commercial use. Therefore, EPA evaluated risks for OU3 under 

both residential and commercial use scenarios, and found that risks 

exceeded acceptable levels for residential use at some areas of the mall 

and for commercial use at one area.20

Finally, EPA’s OU3 RI/FS investigation determined that contaminated 

groundwater in the soil above the bedrock had not migrated far from the 

original source areas of the lagoons and canals. However, free-product 

creosote had penetrated as deep as 120 feet into the fractured bedrock, 

and groundwater contamination in the bedrock had moved through the 

fractures toward two nearby rivers.21 On the basis of these results, in July 

2001, EPA evaluated the potential human health risks from groundwater 

contamination to on-site and off-site residents (i.e., residents who lived on 

or near the site) and commercial workers, and found that risks for on-site 

residents and workers exceeded acceptable levels for carcinogenic and 

noncarcinogenic contaminants. 

The Department of Health and Human Services’ Agency for Toxic 

Substances and Disease Registry (ATSDR) also evaluated the risks from 

site contamination and published a series of studies that expressed 

concern about site contamination levels.22 Between May 1997 and 

 

20To calculate risk levels, EPA broke OU3 into six areas, primarily on the basis of where 

higher levels of contamination were present within 10 feet of the ground surface. 

21According to EPA, these two rivers are a source of drinking water and the intake for the 

public water supply was approximately 2,700 feet away from the site. 

22Pursuant to CERCLA requirements, ATSDR performs health assessments at all sites 

proposed for the NPL. ATSDR looks at sites from a public health and medical needs 

perspective and provides individuals with medical assistance to respond to conditions 

identified as stemming from exposure to site contamination. 

Page 14 GAO-10-277 Superfund 
 

February 1999, ATSDR published five health consultations that responded 

to EPA requests to answer specific questions, such as whether consuming 

vegetables grown in site soils posed a health threat. For example, ATSDR’s 

first consultation concluded that subsurface soil contamination levels 

posed a threat to residents if the contamination was dug up, or if similar 

levels of contamination were discovered in surface soils. Then, in 

September 2000, ATSDR published a public health assessment that 

evaluated site contamination and concluded that past and present 

exposures to surface soil (at that time) did not represent an apparent 

health hazard.23 However, the assessment also stated that this conclusion 

did not rule out the need for remedial action because subsurface 

contamination posed a long-term hazard if soil 2 feet below the ground in 

certain areas was disturbed. 

ATSDR and EPA officials told us that ATSDR’s conclusion that surface soil 

contamination did not pose a public health hazard did not mean that EPA’s 

action to remediate the site was unwarranted. In particular, officials from 

both agencies cited differences in the agencies’ risk assessment views and 

processes as a reason why they could reach alternative conclusions about 

site risks. For example, ATSDR officials indicated that ATSDR’s 

assessment focused on conditions in the first 6 inches of soil to evaluate 

what contamination exposures residents may have been subject to in the 

past and at the time of the assessment. However, the officials said that 

EPA’s risk assessment would have been more focused on the hypothetical 

situation where subsurface soil contamination is brought to the surface in 

the future.24 Therefore, the officials said that, in fact, ATSDR would have 

had very serious concerns if the site had not been remediated because of 

the potential for high levels of contamination in the subsurface soil to be 

brought to the surface through activities such as tree planting or house 

remodeling. ATSDR also had concerns about potential exposures to 

groundwater contamination.25 As a result, the officials stated that ATSDR’s 

 

23ATSDR officials said the assessment pulled together the various health consultations that 

it had developed. 

24Both ATSDR and EPA officials also noted other differences between the two agencies’ 

risk assessment processes, such as different underlying data and assumptions, which could 

yield different results. 

25ATSDR found that groundwater contamination posed a future hazard if public water 

supplies became affected; however, EPA’s groundwater investigation was still ongoing at 

the time of ATSDR’s assessment. 

Page 15 GAO-10-277 Superfund 
 

assessment recommended that EPA continue its plans to implement a 

remedial action to remove source material from the site. 

On the basis of its conclusions about site risks, EPA set cleanup goals for 

different areas of the site that, when achieved, would reduce risks to 

acceptable levels for residential use. For example, EPA established sitespecific qualitative objectives for its remedial actions, such as preventing 

human exposure to contamination, cleaning up areas of source 

contamination to allow for unrestricted land use and prevent future 

impacts to groundwater quality, and minimizing disturbance to residents 

and occupants of the Rustic Mall during a remedial action. EPA also 

developed quantitative remediation goals to identify the level at which 

remedial actions would need to be implemented to protect human health. 

According to site documents, there were no federal or state cleanup 

standards for soil contamination at the time of the cleanup effort. 

Therefore, EPA established risk-based remediation goals that would 

reduce excess carcinogenic risks to a level of 1 in 1 million, and that were 

consistent with New Jersey guidance for residential direct contact with 

soil.26 For the groundwater contamination, EPA used both federal and 

state chemical-specific standards to set risk-based remediation goals. 

According to site documents and Region 2 officials, risk levels required a 

remedial action regardless of the site’s future use. The officials said that 

EPA considered what level of waste could be left on-site while still 

allowing for unrestricted residential use of properties; however, they 

noted that, with unrestricted residential use, there is a very low threshold 

for the level of waste that can be left on-site. They said that even the 

residually contaminated soil was sufficiently contaminated that EPA dug 

between 10 and 14 feet deep to allow for unrestricted use of residents’ 

properties. Similarly, EPA determined that source material in the Rustic 

Mall needed to be remediated because of the potential future residential 

use of the site.27 According to a site document, EPA determined that, 

under a current use scenario (at the time of its risk assessment in 2001), 

there were likely no unacceptable human health risks from contamination 

 

26EPA’s remediation goal for OU1 was based on visible levels of contamination. However, 

according to site documents and Region 2 officials, the agency did not plan to begin 

excavation in OU1 areas until it had developed quantitative remediation goals following its 

assessment of the OU2 soil contamination. 

27However, EPA found that residually contaminated soil could remain at depths greater 

than 10 to 14 feet. 

Page 16 GAO-10-277 Superfund 
 

under the mall because contaminants were covered by buildings and 

pavement. However, the contamination could be exposed if these co

were removed during site redevelopment. Therefore, EPA identified the 

level of site cleanup required on the basis of the most conservative futu

use scenari

vers 

re 

o.28

 

EPA’s Remedy Selection 

Decisions Were Influenced 

by the Residential Nature 

of the Site 

To select remedies to address the soil and groundwater contamination at 

the Federal Creosote site, EPA identified potential remedial technologies 

from agency guidance29 as well as from other publications and databases 

that listed potentially available technologies.30 After identifying potential 

technologies, EPA screened out less viable technologies, combined 

selected technologies into remedial alternatives, evaluated the 

alternatives, and selected a preferred remedy for each OU. See appendix 

III for a timeline of EPA’s remedy selection efforts. 

Region 2 officials told us that, to identify technologies for site remediation, 

EPA identifies a range of technologies on a site-specific basis. According 

to agency guidance, EPA prefers three technologies for treating the type of 

soil contamination found at the Federal Creosote site: bioremediation—

using microbes to degrade contaminants and convert them to carbon 

dioxide, water, microbial cell matter, and other products; low temperature 

thermal desorption (LTTD)—heating contaminated material to 

temperatures less than 1,000 degrees Fahrenheit to physically separate 

contaminants from soils; and incineration—heating contaminated material 

28A contractor’s study of site contamination found that applying nonresidential rather than 

residential cleanup standards in the Rustic Mall area would have reduced the amount of 

material requiring remediation by only about 1.4 percent of the estimated total. 

29The primary guidance that EPA relied on to identify potential remedial technologies for 

the soil contamination was the agency’s guidance entitled Presumptive Remedies for Soils, 

Sediments, and Sludges at Wood Treater Sites (December 1995). EPA developed this 

guidance as part of an initiative to speed up remedy selection and reduce the cost and time 

required to clean up similar sites, among other purposes. Region 2 officials said that a goal 

of the initiative was to avoid conducting treatability studies to assess innovative or 

emerging technologies—technologies that have been implemented on a small scale and 

show promise for being able to remediate similar types of contamination—if EPA already 

had proven technologies. 

30As with efforts to assess the risks of contamination at the site, EPA contractors did much 

of the work to identify and evaluate remedial technologies and alternatives. However, EPA 

provided direction and oversight to the contractors, and decided which remedial 

alternatives to select for the site. Therefore, we refer to all of these activities as EPA 

efforts. 

Page 17 GAO-10-277 Superfund 
 

to temperatures greater than 1,000 degrees Fahrenheit to destroy 

contaminants.31 EPA also identified other technologies to cap, contain, 

excavate, extract, treat, or dispose of site soil or groundwater 

contamination, including a number of emerging or innovative 

technologies. 

For the soil contamination, the range of technologies EPA considered 

varied among the OUs at the site. During its remedy selection process for 

OU1, EPA primarily evaluated the three technologies preferred by agency 

guidance for soil contamination at wood-treatment sites. According to 

Region 2 officials, EPA considered a limited range of technologies for OU1 

because, originally, the agency was evaluating whether it would need to 

evacuate residents to protect them from site contamination. Consequently, 

EPA conducted a more streamlined remedy selection process for OU1 to 

speed decision making. Alternatively, for OU2 (and later for OU3), EPA 

evaluated a wider range of technologies, including several emerging 

technologies. In addition, Region 2 officials stated that differences in the 

contamination between the OUs impacted the range of technologies 

considered. Specifically, the officials said that the OU1 material was the 

more sludge-like, free-product creosote, whereas the OU2 contamination 

might not have been visible. The officials noted that, with less 

contaminated soils, more treatment options might become viable, since 

some options that might have difficulty treating more highly contaminated 

material might successfully treat less contaminated material. However, 

while EPA considered a wider range of technologies for OU2 and OU3, in 

general, EPA screened out the emerging technologies in favor of those that 

were identified as preferred in its guidelines.32 Ultimately, EPA determined 

that off-site thermal treatment and disposal of the soil contamination 

would best achieve its cleanup goals and were consistent with residential 

use of the site. In implementing this remedy, EPA determined that it would 

need to purchase some houses—where contamination was inaccessible 

without demolishing the houses—and permanently relocate these 

 

31Bioremediation may be performed either in situ (in place in the ground) or ex situ (after 

material is excavated). 

32Region 2 officials said that innovative or emerging technologies were screened out 

because EPA found they would not be a good match for the site, not simply because they 

required a treatability study to assess their viability. 

Page 18 GAO-10-277 Superfund 
 

residents, while residents in other houses would only need to be relocated 

temporarily.33

For the groundwater contamination, Region 2 officials said that EPA tried 

to determine how to clean up the contaminated groundwater in the 

fractured bedrock but ultimately concluded that none of the options 

would be effective; moreover, many of the options would be expensive 

and take a long time to implement.34 As a result, EPA determined that 

attenuation of the groundwater contamination over time, long-term 

monitoring, and institutional controls to prevent the installation of wells at 

the site would be the best alternative to address contamination in the 

fractured bedrock. To select this remedy, EPA invoked a waiver for 

technical impracticability, which allowed it to select an alternative that 

would not comply with requirements to clean up the groundwater to levels 

that would meet site cleanup goals.35 Region 2 officials stated that one of 

the presumptions EPA makes in using a waiver for technical 

impracticability is that it has put forth its best effort to remove source 

contamination. Therefore, according to the officials, on the basis of agency 

guidance, EPA needed to clean up the source material that was 

contaminating the groundwater to justify a waiver for technical 

impracticability.36 Moreover, the officials said that by removing the source 

material, EPA may have helped prevent the contaminated groundwater 

area from getting larger. Also, the officials said that, in their judgment, 

EPA’s action would help the contamination in the bedrock attenuate more 

quickly, although they were unable to quantify this impact. 

In selecting these remedies, EPA’s decisions were influenced by several 

challenges associated with a residential cleanup, including (1) space 

constraints that limited on-site implementation of actions, (2) a 

 

33EPA noted that all remedial alternatives it considered, with the exception of a no-action 

alternative, would have required that the agency relocate residents. 

34EPA treated contaminated groundwater in the soil that it encountered while excavating 

the soil contamination. 

35Under the National Contingency Plan, EPA is allowed to select an alternative that does 

not comply with requirements applicable to a site, such as meeting groundwater guidelines, 

if the agency determines that certain circumstances exist. One such circumstance is when 

the agency determines that compliance with the requirement would be technically 

impracticable from an engineering perspective. 

36EPA, Guidance for Evaluating the Technical Impracticability of Ground-Water 

Restoration, Office of Solid Waste and Emergency Response Directive 9234.2-25 

(Washington, D.C.: September 1993). 

Page 19 GAO-10-277 Superfund 
 

determination that some options would not achieve the site cleanup goals, 

and (3) concerns about some options’ community impacts. 

Space constraints. According to Region 2 officials, space constraints 

posed by the residential nature of the site limited EPA’s ability to 

remediate contamination on-site. For example, the officials said that soil 

contamination in the lagoons and canals was interspersed throughout the 

residential area. As a result of the lack of available open land and the 

residential nature of the site, a site document indicated that options for onsite treatment and disposal of excavated material were not considered for 

OU1.37 Also, while EPA considered on-site treatment technologies and 

alternatives for OU2 and OU3, Region 2 officials said EPA did not consider 

buying additional houses to create more open space.38 They said that once 

EPA determined that the majority of houses in the residential area could 

be saved, it tried to avoid demolishing as many homes as possible.39 The 

officials also noted that EPA could have placed a treatment facility in a 

corner of the Rustic Mall, but that the mall was still a functioning 

commercial area at the time EPA was selecting remedies. The mall was in 

the middle of the town, and, according to the officials, feedback from local 

citizens indicated that the community relied heavily on the mall. As a 

result, EPA did not formally consider taking over additional areas of the 

mall to create more open space as part of a remedial alternative. Region 2 

officials acknowledged that, after EPA began the cleanup, the owner 

decided to demolish the mall. However, they stated that, when EPA made 

its remedy selection decisions, it did not have sufficient justification to 

purchase or demolish the mall. 

In particular, EPA Region 2 officials told us that the challenge of space 

constraints was a key factor in why EPA chose not to implement 

 

37One area of the mall was used as a staging area to support site work, including EPA and 

contractor offices; a soil staging area to store excavated material; and an area for backfill 

soil, equipment, and other required materials. The need to have these facilities at the site 

contributed to the lack of open space. 

38Region 2 officials also stated that EPA considered placing a treatment facility on a nearby 

Superfund site. However, they said it would have been very difficult to get the required 

state and local approvals. 

39According to EPA, agency guidance indicates a preference for actions that address 

contamination risks using methods of cleanup that allow people to remain safely in their 

homes and businesses. See EPA, Interim Policy on the Use of Permanent Relocations as 

Part of Superfund Remedial Actions, Office of Solid Waste and Emergency Response 

Directive 9355.0-71P (Washington, D.C.: June 1999). 

Page 20 GAO-10-277 Superfund 
 

bioremediation or LTTD—two of EPA’s preferred remedies for treating 

creosote contamination—on-site. For example, the officials noted that 

bioremediation of excavated material on-site would have required a lot of 

space to store the material while it was being treated with microbes that 

would help degrade the contamination. Similarly, the officials said that 

there was not sufficient space to stockpile material for treatment using 

LTTD. That is, to operate an LTTD unit efficiently, the officials said that 

EPA would have needed to feed material into the unit constantly. 

However, they said doing so was not possible at the site because, while 

EPA might excavate 100 tons of soil on some days, on other days, EPA was 

unable to excavate as much since it needed to work by hand around 

residents’ houses. Given EPA’s inconsistent rate of excavation, the agency 

would have needed to stockpile material to ensure a constant flow into an 

LTTD unit. However, according to Region 2 officials, there was not enough 

space to stockpile contaminated material awaiting treatment, and, as a 

result, the officials estimated that EPA could have operated an on-site 

LTTD unit only 25 percent of the time, which they said would not have 

been cost-effective. Specifically, the officials said that it would take 

around 60,000 square feet for all of the operations associated with an 

LTTD unit. They noted that a space roughly this size was available in the 

northeast corner of the Rustic Mall. However, because of constraints, such 

as fire code access requirements for a bowling alley that bordered this 

area, the officials estimated that the total available space was actually only 

about 43,000 square feet. Also, EPA would have needed additional space 

for other facilities related to the cleanup. In addition, while EPA 

determined that bioremediation and LTTD could be used to treat 

contamination off-site, EPA found that they would be difficult to 

implement because of a lack of permitted commercial facilities.40 As a 

result, EPA relied on incineration because incineration facilities were the 

most readily available for off-site treatment of material from the site. 

Level of cleanup required. EPA had concerns about whether certain 

technologies would effectively treat contamination to required levels, 

given the residential nature of the site. For example, EPA determined it 

was unlikely that such technologies as bioremediation of contaminated 

material in place would achieve the agency’s soil remediation goals, 

 

40Region 2 officials said that EPA attempted to reach out to identify permitted vendors who 

could perform off-site LTTD, but none of the LTTD vendors responded to bid requests for 

site work. Similarly, EPA learned of one commercial facility that may have been able to 

treat site soils using bioremediation; however, the company did not respond to bid requests 

for site work. 

Page 21 GAO-10-277 Superfund 
 

because EPA was uncertain whether the bioremediation microbes could 

be distributed evenly in contaminated areas since some of the 

contamination was under residents’ homes.41 Region 2 officials also said it 

was unlikely that EPA could have achieved its cleanup goals using 

bioremediation because of the high levels of soil contamination at the site. 

They said that if contamination levels are high, the microbes introduced 

into the soil could be killed before they have a chance to degrade the 

contaminants. Moreover, because of the high contamination levels and 

treatment requirements at the site, the officials said they had concerns 

about the effectiveness of using LTTD. They stated that LTTD treats 

material using lower temperatures than incineration, and that it removes 

about 80 percent of the contamination each time material is passed 

through the unit. As a result, sometimes material must be treated multiple 

times before it meets residential standards. The officials indicated that this 

would have probably been the case with the Federal Creosote material 

because it was so highly contaminated. They said, given the nature of the 

contamination at the site, incineration was a more efficient method of 

treatment to achieve the agency’s remediation goals. 

While the high treatment levels required because of the residential nature 

of the site impacted EPA’s choices about individual soil remediation 

technologies, they also influenced decisions about whether to dispose of 

treated and untreated material on-site, or at an off-site location. According 

to Region 2 officials, if EPA disposed of excavated material on-site, the 

agency would have had to ensure, through treatment and testing, that the 

soil met residential standards. Consequently, the officials concluded that if 

EPA disposed of excavated material on-site, it would have had to treat and 

test the material more extensively than it did for off-site disposal. The 

officials said that only about 35 percent of the material excavated from the 

site needed to be thermally treated before it could be disposed of off-site.42

The rest of the excavated material could be disposed of without treatment 

at a hazardous or nonhazardous waste landfill. However, they said, if EPA 

had disposed of material on-site, it would have had to test and possibly 

treat 100 percent of the material to ensure that it met residential 

 

41EPA had similar concerns about using chemical grouting to immobilize contaminants. 

42EPA found that contamination from wood-preserving operations is a “listed waste” under 

the Resource Conservation and Recovery Act, which gives EPA the authority to control 

hazardous waste from the “cradle-to-grave,” including the generation, transportation, 

treatment, storage, and disposal of hazardous waste. As a listed waste under the act, EPA 

could not dispose of contaminated material without ensuring that it had been treated to 

specified standards. 

Page 22 GAO-10-277 Superfund 
 

standards. Due to the potential expense of additional treatment and 

sampling, EPA determined that off-site disposal would be more costeffective. 

For the groundwater contamination, according to site documents, EPA 

found that none of its remedial alternatives, including those based on 

extracting or treating the contamination in place, would be able to achieve 

its cleanup goals effectively and reliably within a reasonable time frame. 

For example, EPA found that some of the groundwater contaminants 

could take decades to move through the groundwater, and, as a result, it 

would take an extremely long time to remediate these contaminants using 

an extraction technology. Moreover, EPA estimated that the technology 

that was most likely to be able to achieve its remediation goals—

extracting contaminants using steam—would cause significant disruption 

to the residential neighborhood and would be much more expensive than 

EPA’s other alternatives. On the basis of its experience at other sites, EPA 

determined that complete removal of the groundwater contamination in 

the bedrock at the site was not practicable. In addition, EPA found that 

several of the treatment technologies it considered would not be effective 

at treating the highly contaminated free-product creosote found in 

portions of the site. 

Community impacts. The residential nature of the site and the 

importance of the Rustic Mall to the community also influenced EPA’s 

remedy selection, given the effects that different technologies and 

alternatives might have on the community. For example, according to 

EPA, some of the substances that could be used to immobilize soil 

contamination in the ground were potentially more toxic than the creosote 

contamination. Also, certain options that treated contamination in place or 

extracted it from the soil or groundwater would have emitted heat or gas 

that could have posed risks to residents and the community. Moreover, 

EPA determined that some options would have significantly disrupted the 

community because of the need to install equipment, wells, and piping 

throughout the residential and commercial areas. 

Also, because EPA was implementing a remedial action in a residential 

neighborhood at the site, it was concerned about the length of the cleanup 

and other timing impacts on the community. Region 2 officials said that 

EPA generally does not use certain alternatives unless the agency has the 

flexibility to accomplish remediation over a long time frame on the basis 

of the current land use (e.g., the site is abandoned). Under these 

circumstances, EPA could use a remedy like bioremediation of 

contaminated material in place, which would cause long-term disruption if 

Page 23 GAO-10-277 Superfund 
 

implemented in a residential neighborhood. Also, Region 2 officials said 

that, if EPA had used on-site LTTD to treat contaminated material, it could 

not have operated the unit in the most efficient way—24 hours a day—

because the residents in houses within 200 feet of where the unit would 

have been located would have been negatively affected by its lights and 

noise during the night. However, the officials said, if EPA had only run the 

LTTD unit 8 hours a day, the cleanup effort would have taken much 

longer.43 The length of time involved was a particular concern in EPA’s 

evaluation of groundwater remediation alternatives. According to the 

Region 2 officials, the best alternative to extract contaminated 

groundwater from the bedrock would have taken 18 to 20 years to 

implement and would have covered the site with machinery. 

Finally, EPA factored future land use impacts into its remedy selection 

decisions.44 For example, EPA found that options that relied on 

containment or deed restrictions, but that left contamination under and 

around the residential community, were not viable alternatives. Region 2 

officials said capping the contamination would not have supported use of 

the land as a residential area because residents would have had to sign 

agreements not to disturb the cap, which would have restricted their use 

of the properties. Also, because of these restrictions, the officials said it is 

likely that some owners would have refused to sign the necessary 

agreements, and EPA would have had to take an enforcement action. 

Similarly, EPA avoided certain remedies for the Rustic Mall because of the 

impacts that they could have on the community’s ability to redevelop the 

mall as well as on the operation of the mall. A Borough of Manville official 

told us that the Rustic Mall was the “hub of the town” and was located 

directly behind buildings on the town’s Main Street. As a result, he said the 

community was very opposed to alternatives that would have left or 

 

43Region 2 officials said that EPA placed an LTTD unit in a residential area at another site. 

However, at this other site, the officials noted that none of the residents’ houses were 

within 200 feet of the unit, and there was enough space to build a large earthen berm to 

lessen the unit’s impacts on the community. 

44According to EPA guidance, remedial alternatives should be consistent with reasonably 

anticipated future land use. See EPA, Land Use in the CERCLA Remedy Selection Process, 

Office of Solid Waste and Emergency Response Directive 9355.7-04 (Washington, D.C.: May 

1995). 

Page 24 GAO-10-277 Superfund 
 

treated contamination on-site.45 He said that, in the town’s view, the 

contamination under the mall needed to be cleaned up. Otherwise, it 

would have been difficult to get tenants into the mall in the future, and the 

town might have ended up with a blighted area in the center of the 

community. He also said the community was concerned that no one would 

want to come and shop at the mall if there was a treatment facility in the 

parking lot. 

EPA Placed a High Priority 

on Cleaning Up the 

Federal Creosote Site 

EPA placed a high priority on scheduling and funding the Federal Creosote 

site work because the contamination was in a residential area. According 

to Region 2 officials, it is rare to find source contamination, such as the 

free-product creosote, under a residential area, and most sites with the 

level and extent of contamination found at the Federal Creosote site are 

abandoned. The officials said EPA places the highest priority on 

addressing the principal threats at residential sites first. As evidence of 

this prioritization, EPA initiated efforts to study, select a remedy for, and 

begin cleanup of the residential part of the site before undertaking similar 

efforts for the Rustic Mall. For example, Region 2 officials said that EPA 

decided relatively early in the cleanup process to break the site into three 

OUs to allow work to proceed as quickly as possible. EPA determined that 

it needed to get to work immediately on OU1, and that the groundwater 

contamination and commercial area could wait until after EPA had 

decided what to do with the residential area. The Region 2 officials said 

that breaking the site into different OUs was important because EPA knew 

that it needed to relocate some OU1 residents, and this process can be 

time-consuming—one official noted that residents who must permanently 

relocate have 1 year to do so. While this process took less time at the 

Federal Creosote site, EPA did not know that would be the case initially. 

Moreover, the Region 2 officials said that the first couple of years EPA 

spent studying the site caused a great deal of anxiety for residents, 

because they did not understand the risks of remaining in their homes and 

could not sell their homes if the homes would need to be demolished. The 

officials said the OU1 ROD informed residents that most of the homes in 

 

45Region 2 officials said the state of New Jersey was also opposed to on-site treatment and 

disposal options. The Region 2 officials said that while EPA occasionally signs a ROD 

without state concurrence, the agency generally tries to avoid doing so because, under 

CERCLA, EPA cannot carry out a remedial action without the relevant state’s agreement to 

provide a 10 percent cost share. Also, the officials noted that community acceptance of 

EPA’s remedial action is one of the selection criteria, and the agency prefers not to store 

large amounts of contamination for treatment near a residential area. 

Page 25 GAO-10-277 Superfund 
 

the neighborhood would not need to be demolished, and this helped 

reduce residents’ anxiety.46

EPA also took steps to shorten the time needed to select, design, and 

implement the remedial actions. For example, Region 2 officials said that, 

because of the residential nature of the site, the site investigation process 

was both unusually extensive and expedited in comparison to other sites. 

Region 2 officials said that EPA began sampling early because, when the 

site was discovered, the agency was concerned that contamination risks 

could be so significant that residents might need to be evacuated. As a 

result, they said that the agency gathered a large amount of information 

about site contamination before listing the site on the NPL. The officials 

said this data collection effort helped EPA move forward with site work 

quickly because, with a large amount of data to use to gauge its overall 

approach to the site, EPA was able to compress the removal evaluation, 

listing process, and RI/FS into a relatively short amount of time. In 

addition, EPA tried to streamline work by configuring its sampling efforts 

to satisfy postexcavation requirements to confirm that contaminated 

material no longer remained on-site. Specifically, site documents show 

that to meet New Jersey requirements, EPA took samples on 30-by-30 foot 

grids to confirm that contamination was no longer present along the sides 

and bottom of an excavated area. Rather than wait until the excavation 

was completed to take additional samples to confirm that contamination 

was not present, EPA incorporated these requirements into earlier 

sampling efforts. As a result, if samples were clean, EPA could 

immediately backfill an area, which reduced the overall length of the 

cleanup effort.47 Finally, in an effort to expedite the cleanup effort, EPA 

Region 2 officials said that more of the region’s resources were devoted to 

 

46The officials emphasized that the OU1 remedial action was an early interim action and 

that EPA did not begin the excavation until the OU2 ROD was issued, which set 

quantitative remediation goals for the cleanup of the Claremont Development. The officials 

stated that when EPA’s National Remedy Review Board reviewed the OU1 decision and 

recommended that Region 2 complete its sitewide RI/FS before beginning source material 

excavation, the board meant the investigation of the residential area and not that Region 2 

should complete its RI/FS of OU3 before beginning excavation of OU1. Region 2 agreed 

with this recommendation. 

47Region 2 officials said that EPA did not have as much data for the Rustic Mall but 

maximized resources by coordinating RI/FS efforts for this area with design activities for 

other parts of the site. Additionally, while EPA had signed the ROD and designed the 

excavation for OU3 by the time that the owner of the mall decided to demolish it, EPA 

revised the design concurrently with the excavation rather than delay work. 

Page 26 GAO-10-277 Superfund 
 

the site relative to other sites that the region needed to address at that 

time. 

As a result of these efforts to prioritize and expedite site cleanup work, the 

Federal Creosote site reached key cleanup milestones in less time than 

some other site cleanups. Region 2 officials said that they completed the 

three RODs for the site in about 3 years, which they said is a very quick 

time frame to complete such analyses. They noted that issuing a ROD is an 

intensive process that at another site, for example, took over a decade. 

Also, the Federal Creosote site reached EPA’s construction complete stage 

more quickly than other megasites—that is, sites at which actual or 

expected total cleanup costs, including removal and remedial action costs, 

are expected to amount to $50 million or more. In July 2009, we reported 

that, based on EPA data through fiscal year 2007, the median length of 

time it took for megasites to reach construction complete after NPL listing 

was 14.8 years.48 However, according to EPA data, the Federal Creosote 

site reached construction complete in just over 9 years.49

 

48GAO, Superfund: Litigation Has Decreased and EPA Needs Better Information on Site 

Cleanup and Cost Issues to Estimate Future Program Funding Requirements, 

GAO-09-656 (Washington, D.C.: July 15, 2009). 

49In our July 2009 report (GAO-09-656), we raised concerns about the usefulness of EPA’s 

“construction complete” measure as an indicator of the status of site cleanups because, for 

example, sites with groundwater contamination (as at the Federal Creosote site) may take 

decades to reach selected standards, even though EPA declares the site construction 

complete. By presenting statistics in this report that compare the median length of time 

from NPL listing to construction complete for the Federal Creosote site with other 

megasites, we mean only to contrast the length of time it took to reach key agency 

milestones and not to compare the status of the site cleanup with EPA’s remediation goals. 

Page 27 GAO-10-277 Superfund 
 

Total site costs exceeded construction estimates at the Federal Creosote 

site by roughly $233 million, primarily because (1) EPA’s early 

construction estimates were not designed to include all site-related 

expenses and (2) additional quantities of contaminated material were 

discovered during the cleanup effort. Other factors, such as 

methodological variation for estimating site costs and contractor fraud, 

accounted for a smaller portion of the cost difference. 

Total Site Costs 

Exceeded Early 

Construction Cost 

Estimates Largely 

because of the Nature 

of these Estimates 

and the Discovery of 

Additional 

Contamination 

Total Site Costs Exceeded 

Construction Estimates by 

Approximately $233 

Million 

According to our analysis, total site-related costs, including remedial 

construction and other response costs at the Federal Creosote site through 

the spring of 2009, were approximately $338 million,50 a roughly $233 

million difference from the estimated remedial construction costs of $105 

million.51 Total site costs were higher than construction estimates for 

several reasons.52 As shown in figure 3, of the $233 million difference, 39.6 

percent (or about $92 million) is due to other response costs that were not 

 

50We developed these data on actual site costs using data provided by EPA and the Corps. 

As a result of the methodology we used to adjust the data to fiscal year 2009 constant 

dollars, these figures do not match other EPA-published information on site costs. 

51This figure represents the total of EPA’s estimated costs for remedial construction 

activities conducted through the spring of 2009, to address contamination at different areas 

of the site, which we discounted using a present value analysis and adjusted to fiscal year 

2009 constant dollars. To identify the estimated costs of activities that had been completed 

as of the spring of 2009, we added EPA’s estimates for the construction costs of these 

activities for each OU and, following GAO guidance, applied a discount factor to reflect 

that EPA’s estimates pertained to future costs. In this report, when we discuss “estimated 

costs,” we refer to GAO’s revised estimated cost figure. As a result of the methodology we 

used to adjust these estimates, our calculated total does not match EPA’s published 

estimates for completed and remaining work at the site, which totaled $118 million in 

nominal dollars. Unless otherwise noted, we adjusted all dollar values presented in this 

report to fiscal year 2009 dollars as per GAO guidance. See appendix II for more 

information on our methodology for estimating site costs. 

52We recognize that total site costs, which include other response costs, will always be 

different from remedial construction costs. However, for the purposes of this report, we 

determined that it was necessary to report total site costs as a point of departure to discuss 

how construction costs, as well as other response costs that were not included in EPA’s 

original construction cost estimates, contributed to the total amount EPA spent on the site. 

Page 28 GAO-10-277 Superfund 
 

included in EPA’s construction estimates;53 47.5 percent (or about $111 

million) is from an increase in remedial construction costs—mostly 

directly related to the discovery of additional contaminated material; and 

12.9 percent (or about $30 million) is due to other factors—primarily 

differences in cost estimation methodology and, to a smaller extent, 

contractor fraud. 

to a smaller extent, 

Figure 3: Difference between Estimated Construction and Total Site Costs at the 

Federal Creosote Site 

12.9%

39.6% 47.5%

Source: GAO analysis of data obtained from EPA, the Corps, and court documents.

Other factors (about $30 million)

Other response costs not included in 

construction estimates (about $92 million)

Remedial construction costs potentially 

related to greater contaminated soil 

quantities (about $111 million)

Total = $233 million

Note: Site costs were drawn from several sources, including Corps data on construction contractor 

costs updated through February 15, 2009, as well as Corps and EPA sources updated through 

various dates from April to early May, 2009. Due to several reasons, including our methodology for 

adjusting costs to fiscal year 2009 dollars, the percentages in this figure are considered to be 

approximate. 

 

53“Other response costs” refer to costs associated with the site that were not directly 

related to construction of a particular remedy (discussed in greater detail in the next 

section of this report). 

Page 29 GAO-10-277 Superfund 
 

EPA intentionally included only costs related to the construction and 

maintenance of the selected remedies rather than total sitewide costs in its 

early cost estimates, which follows its guidance, according to the agency.54

EPA prepares these preliminary estimates during the remedy selection 

process to compare projected construction costs across different remedial 

action alternatives. Specifically, the National Contingency Plan directs 

EPA to consider the capital costs of construction and any long-term 

operation and maintenance costs as part of the remedial alternative 

screening process.55 According to EPA guidance, these estimates are not 

intended to include all site-related expenses, and certain expenses, such as 

early site investigation and EPA enforcement costs, are beyond the scope 

of these early estimates because these costs are not linked to a specific 

remedial alternative and, therefore, would not affect the relative 

comparison of alternatives. For example, while site investigation studies 

were conducted for each operable unit, these studies were completed 

prior to remedy selection to inform the selection process and, therefore, 

were not linked to any particular remedy. Similarly, the removal cleanup 

of surface soils in the residential area occurred prior to remedy selection 

and, therefore, was not related to the construction costs of any particular 

remedial alternative. Table 2 summarizes costs for activities that were not 

included in EPA’s remedial construction cost estimates—other response 

costs—at the Federal Creosote site. 

EPA’s Construction Cost 

Estimates Intentionally 

Did Not Include All Site 

Costs 

Table 2: Other Response Costs Not Included in Construction Estimates for the 

Federal Creosote Site 

Cost description 

Total costsa

(FY 2009 dollars)

Indirect support costs related to site construction workb$72,679,000

Site investigation and risk assessment study 11,038,700

Indirect support costs related to other response effortsb4,209,100

EPA payroll and travel 2,085,100

 

54EPA, A Guide to Developing and Documenting Cost Estimates During the Feasibility 

Study, Office of Solid Waste and Emergency Response Directive 9355.0-75 (Washington, 

D.C.: July 2000). 

55According to EPA guidance, capital costs include all labor, equipment, and material costs 

associated with construction activities as well as costs for professional/technical services, 

such as engineering support for the construction of the remedial action. Operation and 

maintenance costs are those postconstruction costs necessary to ensure or verify the 

continued effectiveness of a remedial action. 

Page 30 GAO-10-277 Superfund 
 

Cost description 

Total costsa

(FY 2009 dollars)

Enforcement 1,579,800

Analytical and technical support 319,300

State cooperative agreement 278,500

Emergency removal cleanup 32,200

Miscellaneous 8,400

Total $92,230,100

Source: GAO analysis of EPA data. 

Note: Other response costs were drawn from EPA data through April 30, 2009. As a result of the 

delay between when a cost is incurred and when it may be submitted and entered into EPA’s costtracking systems, the total costs listed in this table are approximate. 

a

Certain categories in this table include contractor annual allocation costs. These costs include money 

spent by government contractors doing site-related work not traceable to a particular site, such as 

hazardous materials training. Government contractors allocate these costs across the sites on which 

they have worked during the course of each year, and EPA treats them as direct costs. 

b

Indirect support costs are overhead costs for activities related to managing the Superfund program, 

such as guidance development, that EPA allocates across all Superfund sites. 

The Need to Remediate 

Greater-than-Expected 

Quantities of 

Contaminated Material 

Contributed Most to the 

Gap between Estimated 

and Actual Construction 

Costs 

During excavation, contractors discovered greater-than-expected amounts 

of contaminated material requiring remediation across all OUs, which 

contributed most to the difference between estimated and actual 

construction costs. Based on our analysis of EPA documents, the initial 

ROD estimates for the site indicated that approximately 154,100 to 164,400 

tons of material would need to be excavated for treatment or disposal; 

however, EPA ultimately found that roughly 456,600 tons of material 

needed to be excavated—an increase of at least 178 percent. As shown in 

table 3, according to our analysis, increased amounts excavated from the 

OU1 and OU3 areas contributed the most to the difference between the 

estimated and actual excavated amounts across the site as a whole. 

Table 3: Difference between Estimated Soil Quantities in the RODs and Final Soil Quantities at the Federal Creosote Site, by 

OU 

Hundreds of tons 

OU 

Estimated soil 

quantity from RODs 

Final soil 

quantity 

Soil quantity 

increase from RODs 

Percentage 

increase

OU1 66,200 to 70,700a210,800 140,100 to 144,600 198% to 218%

OU2 31,700 to 33,800 67,900 34,200 to 36,300 101 to 115

OU3 56,300 to 60,000 177,800 117,800 to 121,600 196 to 216

Totalb 154,100 to 164,400 456,600 292,200 to 302,500 178% to 196%

Source: GAO analysis of EPA documents. 

Page 31 GAO-10-277 Superfund 
 

Note: Soil quantities are presented in a range because EPA updated its conversion factor for 

calculating soil weights from volumes at the site as additional information regarding the density of the 

soil became available. The lower bound in this table generally represents soil quantities using a 

conversion factor of 1.5 cubic yards per ton, whereas the upper bound reflects EPA’s later use of 1.6 

cubic yards per ton. We based our analysis on EPA documents and did not independently verify the 

soil quantities reported by EPA. 

a

EPA revised its original quantity estimate for OU1 soils as a result of its investigation of OU2 

contamination. Based on our analysis of site documents, the revised quantity is approximately 

152,600 to 162,700 tons. 

b

Totals may not add due to rounding. 

According to EPA officials, it is common for EPA to remove more soil than 

originally estimated at Superfund sites because of the uncertainty inherent 

in using soil samples to estimate the extent of underground contamination. 

For example, EPA guidance indicates that the scope of a remedial action is 

expected to be continuously refined as the project progresses into the 

design stage and as additional site characterization data and information 

become available.56 However, both Corps and EPA officials stated that the 

Federal Creosote site posed a particular challenge for estimating soil 

quantities prior to excavation because of the way in which the waste 

moved at the site and, in some cases, because of access restrictions during 

sampling. According to EPA’s Remedial Project Manager (RPM) for the 

site, soil contaminants generally either stay in place or migrate straight 

down; however, while some of the creosote waste at the site stayed in 

place, some of the waste migrated both horizontally and vertically. The 

RPM said that this migration made it difficult to predict the waste’s 

location through sampling. For example, during excavation, contractors 

found seams of contaminated material, some of which led to additional 

pockets of creosote waste, while others did not. Given the diameter of the 

sampling boreholes (which were generally 2 to 4 inches wide) and the 

width of the seams of creosote waste (which in some cases were only 6 

inches wide), the sampling process could not detect all of the creosote 

seams at the site, despite what EPA officials considered to be the 

extensive sampling during the early site investigations that formed the 

basis for the initial cost estimates. Additionally, sampling during the site 

investigations for the residential area as well as the Rustic Mall was 

limited by the location of buildings and access restrictions, according to 

EPA’s RPM. For example, site documents indicate that no samples could 

 

56Our analysis of site documents found that additional sampling during the design stage was 

generally successful in refining the estimated quantity of material requiring excavation 

across all OUs. Specifically, final excavation amounts increased by only about 28 percent 

over estimates at the design stage as compared with at least 178 percent over ROD 

estimates. 

Page 32 GAO-10-277 Superfund 
 

be taken from under the mall during the OU3 soil investigation because 

the buildings were being used. It was not until the mall owners decided to 

demolish the existing structures as part of a town revitalization plan that 

mall tenants left and EPA was able to take samples in the areas covered by 

the buildings. These areas were found to contain additional areas of 

creosote waste, as shown in figure 4.57

Figure 4: Rustic Mall Areas Remediated at the Federal Creosote Site 

Source: GAO rce: GAO analysis of EPA site documents.

N

Rustic Mall

East Camplain Road

East Camplain Road

Valerie Drive

Va

Rd

lerie

Valerie Drive

Louise Drive

Louise Drive

Clare Court

CoFlorence

urt

Main Street

Central Area

Southwest Area

Canal Area

North Area 1

North Area 2

Lagoon A

Canal A

South Area

Canal B

Lagoon B

Claremont Development residential area

Norfolk Southern Railroad

CSX Railroad

Additional remediated areas

Identified contamination areas in Rustic Mall ROD

Rustic Mall

 

57According to site documents, EPA suspected there was contamination underneath the 

Rustic Mall buildings on the basis of sampling in the areas surrounding the mall. However, 

because EPA did not have access beneath the mall buildings for sampling and EPA’s 

original quantity estimates presumed the buildings would remain standing, contamination 

under the buildings was not included in the original estimates. 

Page 33 GAO-10-277 Superfund 
 

Although the mobility of the waste in the subsurface soil and sampling 

limitations hindered EPA’s ability to determine the total quantity of 

material requiring excavation during the pre-ROD site investigation when 

the initial cost estimates were prepared, soil sampling during this stage 

was generally successful at identifying which residential properties 

contained contamination, according to our analysis of site documents. For 

example, pre-ROD soil sampling allowed EPA to correctly identify 83 of 

the 93 residential properties that would eventually require remediation, as 

shown in figure 5.58

 

58According to EPA, residents at 3 properties refused EPA access to conduct sampling 

during the pre-ROD site investigation. EPA later gained access to the properties and found 

that 2 of the 3 properties required soil remediation. 

Page 34 GAO-10-277 Superfund 
 

Figure 5: Residential Area Properties Remediated at the Federal Creosote Site 

Source: GAO rce: GAO analysis of EPA site documents. Clare Court

Norfolk Southern Railroad

Valerie Drive

Valerie Drive

Louise Drive

Valerie Road

Louise Drive

East Camplain Road

Florence Court

Lagoon A

Additional OU1 properties remediated

Additional OU2 properties remediated

OU1 properties identified in EPA’s RODs

OU2 properties identified in EPA’s RODs

N

Lagoon B

CSX Railroad

Rustic Mall

Note: In addition to the properties highlighted in this figure, other areas, such as sections of streets 

and railroad rights of way, were also excavated. 

According to EPA guidance, because of the inherent uncertainty in 

estimating the extent of site contamination from early investigation data, 

cost estimates prepared during the RI/FS stage are based on a conceptual 

rather than a detailed idea of the remedial action under consideration. The 

guidance states that these estimates, therefore, are expected to provide 

sufficient information for EPA to compare alternatives on an “order of 

magnitude” basis, rather than to provide an exact estimate of a particular 

remedy’s costs. For example, the guidance also states that preliminary 

Page 35 GAO-10-277 Superfund 
 

cost estimates prepared to compare remedial alternatives during the 

detailed analysis phase of the RI/FS process are expected to range from 30 

percent below to 50 percent above actual costs. 

However, at the Federal Creosote site, actual construction costs were 

more than twice what EPA estimated. Specifically, we found that sitewide 

remedial construction costs increased by $141 million over EPA’s 

estimated amounts. According to site documents, increases in the quantity 

of material requiring excavation, transportation, treatment, or disposal 

resulted in higher construction costs across all OUs. Our analysis of site 

cost data indicated that construction costs potentially associated with the 

additional quantity of contaminated material accounted for most of this 

increase ($111 million, or about 78.7 percent).59 In particular, soil 

excavation, transportation, treatment, and disposal costs constituted 

approximately 56.1 percent ($62 million) of the increased construction 

costs potentially related to additional quantities of material, and 26.7 

percent of the overall $233 million difference between estimated 

construction and total site costs, as shown in figure 6. 

 

59In 2006, EPA issued an Explanation of Significant Differences for the site, which 

documented quantity increases and their associated cost increases to date across all three 

OUs. According to EPA officials, they waited to issue this document until after the 

completion of the OU3 design phase so that they could understand the differences across 

the entire site. Generally, EPA does not revisit its remedy selection decision unless new 

information indicates that the selected remedy is technically infeasible or is not sufficiently 

protective to meet cleanup goals, or that an alternative approach would be equally 

protective and more cost-effective. According to EPA officials, they did not find anything to 

indicate the agency should change the overall cleanup approach at the site. 

Page 36 GAO-10-277 Superfund 
 

Figure 6: Actual Remedial Construction Costs as a Portion of the Difference 

between Estimated Construction and Total Site Costs at the Federal Creosote Site 

Source: GAO analysis of data obtained from EPA, the Corps, and court documents.

Remedial construction costs potentially related to greater contaminated soil quantities

Other response costs not included in construction estimates

Other factors

20.9%

Other sitewide 

construction costs

26.7%

Excavation, transportation, 

treatment, and disposal 

costs

47.5%

12.9%

39.6%

Note: Site costs were drawn from several sources, including Corps data on construction contractor 

costs updated through February 15, 2009, as well as Corps and EPA sources updated through 

various dates from April to early May, 2009. Due to several reasons, including our methodology for 

adjusting costs to fiscal year 2009 dollars, the percentages in this figure are considered to be 

approximate. 

According to EPA’s RPM, both the need to excavate greater amounts of 

material and the reclassification of excavated material from nonhazardous 

waste to hazardous waste affected excavation, transportation, treatment, 

and disposal costs. For example, the discovery of additional pockets of 

creosote waste increased the overall amount of material requiring 

excavation and treatment or disposal because, in addition to removing the 

waste itself, any soil overlying the contamination needed to be removed 

and disposed of to access the creosote waste. Additionally, if a pocket of 

creosote waste was unexpectedly discovered in an area of soil that had 

already been designated for excavation and disposal in a landfill without 

treatment because prior sampling indicated it was less contaminated, the 

overall amount of soil to be excavated would not be affected, but costs 

Page 37 GAO-10-277 Superfund 
 

would increase because treatment is more expensive than landfill 

disposal.60

In addition, EPA and Corps officials said that the need to remediate 

greater quantities of material contributed to increases in other sitewide 

construction costs, such as general construction requirements and site 

restoration costs. Our analysis showed that such costs accounted for 

another 20.9 percent of the difference between estimated construction 

costs and total site costs—although the exact extent to which additional 

amounts of material contributed to the difference in costs is not clear. 

EPA’s RPM stated that the effect of increased quantities varied, depending 

on the OU. However, EPA and Corps officials said that in general, more 

extensive excavation would increase design engineering, inspection, and 

other costs as well as costs for general construction requirements and for 

site restoration, as shown in table 4. For example, the decision to 

remediate additional contaminated material under the Rustic Mall 

buildings led to increased design engineering costs because the original 

excavation plans were created under the assumption that the mall would 

remain standing, and further rounds of design sampling were needed to 

identify the extent and location of contamination once the buildings were 

demolished. Additionally, our analysis of site documents indicated that the 

increased time required to excavate additional material could have led to 

greater project costs for general construction requirements, such as 

temporary facility rental, site security, and health and safety costs. 

Similarly, site restoration costs, such as costs for backfill soil, could have 

increased because more backfill would be required to restore the site after 

excavation. 

 

60Although the quantities of soil and contaminated material increased above EPA’s 

estimates, our analysis found that the average unit costs that EPA paid for thermal 

treatment and disposal of contaminated material—the most expensive remediation 

option—were lower than originally estimated and decreased over time. For example, the 

estimated unit cost for these services ranged from $510 for OU1 to $650 for OU2 and OU3; 

however, actual average unit costs were $448 per ton for OU1, $426 per ton for OU2, and 

$354 per ton for OU3. We did not adjust these costs to 2009 dollars to more accurately 

reflect the actual bid prices at the time of construction. 

Page 38 GAO-10-277 Superfund 
 

Table 4: Estimated and Actual Remedial Construction Costs at the Federal Creosote 

Site 

Cost descriptiona

ROD estimates 

(FY 2009 dollars)b

Actual cost

(FY 2009 dollars)b,c

Excavation, transportation, treatment, 

and disposal $76,110,500 $159,643,400

Design-engineering, inspection, and 

other costsd

12,027,400 34,133,500

Resident relocation and home demolition 5,874,000 9,405,500

General construction requirements 5,495,500 26,613,900

Site restoration 4,298,300 15,101,000

Site preparation 1,183,700 926,500

Total $104,989,400 $245,823,800

Source: GAO analysis of data obtained from EPA and the Corps. 

Note: Site costs were drawn from several sources, including Corps data on construction contractor 

costs updated through February 15, 2009, as well as Corps and EPA sources updated through 

various dates from April to early May, 2009. Due to several reasons, including our methodology for 

adjusting costs to fiscal year 2009 dollars, the amounts in this table are considered to be 

approximate. 

a

Some actual costs were not listed as line items in the ROD estimates. In these cases, we included 

related actual costs in the same category. For example, water removal costs for soil excavation areas 

below the water table and odor control were not line items in the estimates, but we included them in 

the “excavation” category because they are part of the process. 

b

These amounts do not match EPA-published data as a result of our methodology for adjusting the 

data to fiscal year 2009 dollars, among other reasons. 

c

This amount includes approximately $2.1 million in inflated prices due to contractor fraud, as we 

discuss later in this section of the report. 

d

Some groundwater remediation costs incurred as part of the Corps’ contract for design activities 

were included under the engineering, inspection, and other costs category. This total also includes 

the Corps’ management and support fee, which according to EPA’s RPM, was not charged to 

individual sites at the time the ROD estimates were prepared. 

According to the RPM, EPA and the Corps instituted certain controls at 

the site to minimize costs. In particular, the RPM stated that the Corps 

took steps to ensure that material was not unnecessarily excavated and 

sent for treatment and disposal. For example, if contractors found an 

unexpected pocket of creosote waste during excavation, they were 

required to notify the Corps official on-site, who would decide whether 

additional excavation was required depending upon visual inspection and 

additional testing, as needed. The contractor was not allowed to excavate 

beyond the original excavation limits without Corps approval. According 

to the RPM, the Corps’ approach of reevaluating the original excavation 

depth on the basis of additional sampling results and a visual inspection of 

the soil led to cost savings because in some areas less material needed to 

be excavated than originally planned. Furthermore, EPA and Corp officials 

Page 39 GAO-10-277 Superfund 
 

stated that this process minimized unnecessary treatment and disposal 

costs that might be incurred if “clean” soil was sent for treatment or 

hazardous waste disposal. Additionally, EPA’s decision in November 2002 

to allow treated soil to be disposed of in a nonhazardous waste facility if it 

met the facility’s criteria for contamination levels helped reduce unit costs 

for treatment and disposal because disposing of soil at a hazardous waste 

facility is more expensive. For example, in a bid for a contract to treat and 

dispose of soil following EPA’s decision, the selected subcontractor 

submitted a unit price for treatment and disposal at a nonhazardous waste 

facility that was $80 (or 16 percent) less than its unit price for treatment 

and disposal at a hazardous waste facility—which for that particular 

contract saved $800,000.61

Furthermore, on the basis of information gathered from site documents 

and from statements made by EPA and Corps officials, EPA and the Corps 

took other steps intended to minimize costs. For example, a Corps official 

said that reducing the duration of the project could help minimize certain 

site costs. Specifically, according to our analysis of site documents, to 

reduce the amount of time spent waiting for sampling results prior to 

backfilling an excavated area, EPA and the Corps incorporated state 

postexcavation sampling requirements into their design sampling plans for 

earlier investigations. Accordingly, unless additional excavation was 

required to meet the cleanup goals, these samples could be used to 

confirm that the boundaries of the excavation areas had been tested for 

contamination. Additionally, our analysis of site documents showed that 

the Corps tested various odor control measures before beginning 

excavation at certain areas of the site, which allowed it to use less 

expensive odor control alternatives than originally planned and saved 

approximately $1.1 million in implementation costs. These measures also 

helped to speed up the construction work. Finally, according to the RPM, 

the Corps was able to minimize costs by managing the work to avoid 

costly contractor demobilization and remobilization expenses. For 

example, the Corps dissuaded the contractors from removing idle 

equipment and worked with the RPM to resolve administrative or funding 

 

61Additionally, according to site documents, EPA did not excavate contaminated soil at the 

site if EPA determined that it did not pose a direct threat of human exposure. Specifically, 

although EPA removed source material that could pose a threat of groundwater 

contamination, EPA allowed residually contaminated soil to be left in some areas of the 

site at levels deeper than approximately 14 feet below the ground surface. According to site 

documents, EPA and NJDEP used deed notices for properties in these areas to document 

the remaining contamination and restrict excavation. 

Page 40 GAO-10-277 Superfund 
 

issues or questions about the work as they arose to prevent an expensive 

work stoppage.62

Contrasting CostEstimating Methodologies 

and Contractor Fraud 

Explain a Smaller Portion 

of the Difference between 

Estimated Construction 

and Total Site Costs 

Other factors, including different cost-estimating methodologies and 

contractor fraud, explain a smaller portion of the difference between 

estimated construction and total site costs at the Federal Creosote site. In 

developing its estimates, EPA followed agency guidance, which states that 

as a simplifying assumption, most early cost estimates assume that all 

construction costs will be incurred in a single year.63 According to EPA, 

since the estimated implementation periods for EPA’s remedial actions 

were relatively short periods of time, EPA did not discount future 

construction costs in its estimates, and, therefore, these estimates were 

higher than they would have been otherwise.64 In accordance with our best 

practices regarding the use of discounting, we adjusted the initial cost 

estimates to reflect that costs were projected to accrue over several years 

and that, therefore, future costs should be discounted.65 However, by 

discounting future construction costs prior to adjusting for inflation, our 

discounted values were lower than EPA’s original estimates in site 

documents. According to our analysis, discounting estimated costs 

accounted for approximately 12 percent of the $233 million difference 

between estimated construction and total site costs (see fig. 7). 

 

62Region 2 officials said it was important to prevent a work stoppage because it would lead 

to additional contractor demobilization and remobilization costs and would negatively 

impact community relations. 

63This assumption can be modified if construction is projected to last over a longer period 

of time. 

64Discounting future costs to their present value accounts for the time value of money. In 

particular, having one dollar today is worth more than having one dollar a year from now 

because if it were invested, it could earn a return from interest. EPA’s estimated 

implementation periods for site construction at the ROD stage ranged from 21 months to 

3.5 years. However, EPA did not expect to begin implementing remedial actions until at 

least 1 year after it selected its remedies because of, for example, design activities or 

resident relocations. Therefore, while EPA’s estimated construction periods were relatively 

short, EPA did not plan to incur construction costs until further into the future than is 

indicated simply by its estimated time frames. Consequently, discounting these future 

implementation costs had a relatively greater effect on our analysis of EPA’s estimated site 

costs than if the costs were projected to occur immediately after EPA selected its 

remedies. 

65GAO, Discount Rate Policy, GAO/OCE 17.1.1 (Washington, D.C.: May 1991). 

Page 41 GAO-10-277 Superfund 
 

Figure 7: Contrasting Methodologies and Contractor Fraud as a Portion of the 

Difference between Estimated Construction and Total Site Costs at the Federal 

Creosote Site 

Source: GAO analysis of data obtained from EPA, the Corps, and court documents.

Remedial construction costs potentially related to greater contaminated soil quantities

Other response costs not included in construction estimates

Other factors

0.9%

Confirmed or proven 

contractor fraud

12.0%

Cost estimate discount 

adjustment

47.5%

12.9%

39.6%

Note: Site costs were drawn from several sources, including Corps data on construction contractor 

costs updated through February 15, 2009, as well as Corps and EPA sources updated through 

various dates from April to early May, 2009. Due to several reasons, including our methodology for 

adjusting costs to fiscal year 2009 dollars, the percentages in this figure are considered to be 

approximate. 

Contractor fraud also contributed to the difference between estimated 

construction and total site costs, but to a small degree. However, while 

some parties have pled guilty to fraud, the full extent of the effect of fraud 

on site costs will not be known until all investigations are complete. Court 

documents alleged that employees of the prime contractor at the site, as 

well as some subcontractors, were engaged in various kickback and fraud 

schemes, which resulted in inflated prices for certain subcontractor 

services. For example, a subcontractor for soil treatment and disposal 

agreed to pay approximately $1.7 million in restitution to EPA for fraud in 

inflating its bid prices. In addition, court documents alleged that 

fraudulent price inflation also affected other site costs, including certain 

subcontracts for items such as wastewater treatment, backfill, landscaping 

services, and utilities. To date, our analysis of available court documents 

indicated that at least approximately $2.1 million in inflated payments may 

be directly attributable to fraud at the Federal Creosote site. On the basis 

of currently available information, this figure represents less than 1 

Page 42 GAO-10-277 Superfund 
 

percent of the difference between estimated construction and total site 

costs. However, since the fraud investigations are ongoing and additional 

charges may be filed, the full extent of contractor fraud is not currently 

known. See appendix I for more information about site-related fraud 

investigations. 

EPA managed the overall cleanup and communicated with residents 

through a dedicated on-site staff presence, among other actions. The 

Corps implemented the cleanup work by hiring and overseeing 

contractors; the Corps was less involved in selecting and overseeing 

subcontractors at the site. 

EPA Provided Overall 

Project Management 

and Communicated 

with Residents, while 

the Corps Oversaw 

Contractor 

Implementation of the 

Remedy 

EPA Managed the Cleanup 

and Communicated with 

Residents 

According to a 1984 interagency agreement between EPA and the Corps 

for the cleanup of Superfund sites, EPA maintains statutory responsibility 

for implementing the Superfund program. In addition to selecting the 

remedy at a site, EPA provides overall management of the cleanup, 

ensures that adequate funding is available, and manages relationships with 

other interested parties, such as residents. If EPA decides that Corps 

assistance is needed to conduct cleanup work, EPA establishes sitespecific interagency agreements. These agreements outline the specific 

tasks and responsibilities of the Corps at the site and provide a proposed 

budget for the activities listed. Once the site-specific agreements are 

established, EPA’s primary responsibilities are to make sure that the work 

continues without interruption and that adequate funding is available, 

according to EPA officials. EPA officials also noted that the agency does 

not have the authority to direct Corps contractors at the site; rather, all 

instruction and direction to contractors goes through the Corps. 

To fulfill its project management and community outreach responsibilities, 

EPA dedicated a full-time RPM to the Federal Creosote site, according to 

Region 2 officials. Although RPMs generally have two or more sites for 

which they are responsible at any given time, Region 2 officials stated that 

the size and complexity of the site required a higher level of EPA 

involvement. For example, the officials said that the relatively large size of 

Page 43 GAO-10-277 Superfund 
 

the site and stringent cleanup goals meant that a large area was excavated, 

and the complexity of the cleanup process led to a greater number of 

questions from the Corps and its contractors that required EPA’s attention. 

According to the officials, the RPM was on-site at least two to three times 

per week; however, during some segments of the work, he was on-site 

almost every day. They noted that the design phase in particular required 

close coordination with the Corps because design activities for different 

areas of the site occurred simultaneously and were often concurrent with 

construction.66 Consequently, the RPM said he was on-site working with 

the Corps and its design contractor to design new phases of the work; 

revise existing designs; and answer any questions regarding ongoing 

construction activity, such as whether to excavate additional pockets of 

waste found during the construction phase. According to the RPM, 

although the Corps was required to ask EPA for approval only to expand 

excavation to properties that were not included in the RODs, in practice, 

Corps officials kept him informed whenever additional excavation was 

required, and, in many cases, he made the decision regarding whether to 

broaden or deepen the excavated area. 

To monitor project progress and funding, the RPM had weekly on-site 

meetings with the Corps and received weekly and monthly reports on 

progress and site expenditures, according to EPA officials.67 At the weekly 

meetings, the RPM would answer Corps questions regarding the work and 

be informed of any contracting or subcontracting issues that might delay 

or stop work at the site. Moreover, as part of EPA’s oversight of site 

progress, the RPM said he reviewed Corps documents regarding any 

changes in the scope of the work. Because EPA provided funding to the 

Corps on an incremental basis, the RPM also closely monitored the rate of 

Corps expenditures to ensure sufficient funding to continue the work, 

according to EPA officials. The RPM explained that he also reviewed 

 

66Design specifications provide detailed instructions to the contractor about how to 

perform the work. See appendix III for a timeline of key remedial design and action events 

at the Federal Creosote site. 

67Although concerns were identified by a 2007 EPA Office of Inspector General report that 

evaluated EPA’s management of Superfund interagency agreements at the Federal 

Creosote site and certain other sites, officials with EPA’s Office of Inspector General 

indicated that key findings did not necessarily involve EPA’s oversight at the Federal 

Creosote site. According to these officials, the only issue related to the Federal Creosote 

site was a lack of detail in the monthly progress reports that the Corps submitted to EPA. 

However, the officials stated that, because of the RPM’s on-site presence and level of 

involvement at the Federal Creosote site, they believed that the RPM had a good 

understanding of the work that was occurring at the site. 

Page 44 GAO-10-277 Superfund 
 

Corps cost information for unusual charges and, with the exception of a 

few instances of labor charge discrepancies, most of the time the Corps 

reports did not contain anything surprising. In the few instances where the 

RPM found a discrepancy, he contacted Corps officials, and they were able 

to explain the reason for the discrepancy—for example, a problem with 

the Corps’ billing software. The RPM stated that, under the interagency 

agreement with the Corps, he did not review contractor invoices or 

expenditures because the Corps had both the responsibility and the 

expertise necessary to determine whether the contractor charges were 

appropriate, given the assigned work. 

Additionally, EPA officials stated that the residential nature of the site 

necessitated a substantial investment in community relations to manage 

residents’ concerns about the contaminated material under their homes 

and the Rustic Mall. As part of these efforts, EPA used such tools as flyers, 

newsletters, resident meetings, and media interviews to communicate with 

concerned citizens.68 According to the RPM, managing community 

relations required the second largest commitment of his time, after 

designing the work. He said that he spent a great deal of time working with 

residents to help them understand the situation during the early site 

investigation stage, when it was not clear who was going to need to move 

out of their homes and residents were concerned about their health and 

property. The RPM said that he also worked personally with residents 

during the design and implementation of the remedy to minimize the 

impact to the community and to inform it of any additional actions needed, 

such as excavating contamination across a property line or closing roads. 

According to site documents and a local official, EPA’s community 

relations efforts were successful at reducing residents’ anxieties. For 

example, in a summary of lessons learned from the cleanup effort, site 

documents indicate that EPA’s policy of promptly responding to 

community inquiries and the regular presence of EPA personnel at the site 

helped to establish and preserve a high level of public acceptance and 

trust with the community. Also, a Borough of Manville official noted that 

the continuity provided by having one RPM dedicated to the site for the 

duration of the project was particularly helpful in maintaining good 

communication because it allowed EPA officials to know almost all of the 

residents on a first-name basis and encouraged their participation in the 

cleanup process. For example, the RPM stated that he worked closely with 

 

68In addition to the RPM, EPA also assigned a community relations specialist to the site. 

Page 45 GAO-10-277 Superfund 
 

residents to address their concerns and minimize impacts to the 

community during the excavation of contaminated material and the 

restoration of affected areas of the neighborhood. Similarly, according to 

the Borough of Manville official, EPA and the contractors effectively 

coordinated with town officials to ensure that the cleanup effort went 

smoothly. For example, to minimize disruption, EPA consulted with town 

officials about which roads would be best to use, considering the routes 

and weight limitations of trucks leaving the site. In the official’s view, 

EPA’s outreach efforts ensured that residents and the community as a 

whole had sufficient information to feel comfortable about the cleanup. 

Consequently, despite the size and scope of the cleanup effort, the official 

could recall very few complaints from residents. 

The Corps Selected and 

Oversaw Contractors’ 

Design and 

Implementation of the 

Remedy but Had a Limited 

Role in the Subcontracting 

Process 

At the Federal Creosote site, the Corps selected and oversaw private 

contractors’ design and implementation of the remedial action; however, 

the Corps was less involved in the subcontracting process. Under the 1984 

interagency agreement with EPA, the Corps selects and oversees private 

contractors for all design, construction, and other related tasks at 

Superfund sites, in accordance with Corps procedures and procurement 

regulations.69 According to Corps officials, the Corps selected a contractor 

to perform the design for the three OUs at the Federal Creosote site from a 

list of qualified vendors and then negotiated a price for the contracts. For 

construction, the Corps selected a prime contractor from a pool of eligible 

contractors under a cost-reimbursement, indefinite-delivery/indefinitequantity (IDIQ) contract.70 According to EPA and Corps guidance, this 

system provides more flexible and responsive contracting capabilities for 

Superfund sites, which may require a quick response and often lack a 

sufficiently defined scope of work for price negotiation. 

 

69Under the 1984 interagency agreement, the Corps is also responsible for providing 

(1) technical assistance to EPA during the RI/FS phase and (2) site-specific cost 

documentation to support EPA’s cost recovery efforts. 

70A cost-reimbursement contract is one in which the contractor receives payments for the 

amount of allowable costs incurred to the extent prescribed in the contract rather than a 

prenegotiated fixed amount, while an IDIQ contract is one in which orders for goods or 

services are placed against an established contract. The IDIQ contracts used at the Federal 

Creosote site were “pre-placed remedial action contracts” (PRAC). According to Corps 

officials, the construction at the site was performed under four PRACs—three for the 

prime contractor and one for the demolition contractor. 

Page 46 GAO-10-277 Superfund 
 

The Corps’ prime contractor performed some of the work and 

subcontracted some tasks to other companies. For example, the prime 

contractor excavated contaminated material but awarded subcontracts for 

transportation, treatment, and disposal of the excavated material. Other 

subcontracted services included providing backfill soil and landscaping 

for site restoration, and treating wastewater. To subcontract, the prime 

contractor solicited bids from potential vendors and, for smaller 

subcontracts, provided the Corps with advance notification of the award. 

To award larger subcontracts, the prime contractor requested Corps 

approval. 

To carry out its oversight responsibilities, the Corps monitored changes in 

the scope of the work, contractor progress and costs, and work quality. 

For example, Corps officials stated the following: 

• The Corps had to approve any changes in project scope, such as 

excavating greater quantities of material, or any increases in other 

construction services or materials beyond the amounts originally 

negotiated between the Corps and the prime contractor. According to EPA 

officials, this chain of command helped prevent any unauthorized 

expansion of work at the site.71

• To monitor project progress and contractor costs during construction, the 

Corps reviewed prime contractor cost summary reports for each phase of 

the work. These reports contained detailed information on contractor 

costs and work progress, and, according to Corps officials, they were 

updated, reviewed, and corrected if necessary on a daily, weekly, and 

monthly basis.72 For example, Corps officials explained that they reviewed 

the daily reports primarily for accuracy and unallowable costs. For weekly 

and monthly reports, the Corps also examined whether the contractor was 

incurring costs more quickly than expected, which could indicate that a 

cost was incorrectly attributed or that a change in project scope was 

necessary (i.e., because particular aspects of the work were more costly 

than anticipated, and, therefore, a scope revision was needed to complete 

 

71Although the Corps directed the prime contractor, Corps officials also noted that the RPM 

was heavily involved at the beginning of each work phase and established a precedent for 

when decisions regarding additional excavation could be made by the Corps, and for when 

the RPM needed to be consulted first. 

72Corps officials said that EPA specifically requested that the Corps track contractor 

charges daily because of the large scale of the project and of EPA’s concern about 

maintaining forward progress due to the residential nature of the site. 

Page 47 GAO-10-277 Superfund 
 

planned activities). However, Corps officials commented that the 

contractor data were generally accurate, and that errors were infrequent. 

The officials also said that, during the most active periods of the work, 

they discussed the cost reports and project progress, including any 

potential changes in unit costs, during the weekly meetings with the 

contractor. 

• The Corps also monitored work quality at the site. According to site 

documents, the Corps was required to implement a quality assurance plan 

as part of its oversight responsibilities and had a quality assurance 

representative at the site during construction. For example, in a July 2002 

notice to the prime contractor, the Corps identified several workmanship 

deficiencies that the contractor had to address to retain its contract for 

that portion of the work.73

According to Corps guidance and officials, the Corps had a limited role in 

the subcontracting process at the Federal Creosote site. For example, the 

prime contractor was responsible for selecting and overseeing 

subcontractors. In particular, Corps guidance states that since 

subcontracts are agreements solely between the prime contractor and the 

subcontractor, the Corps does not have the authority to enforce the 

subcontract provisions.74 Rather, the guidance indicates that the Corps 

oversees the prime contractor’s management systems for awarding and 

administering subcontracts through periodic reviews of the contractor’s 

subcontracting processes and ongoing reviews of subcontract awards. 

According to Corps officials, the Corps’ main responsibility in the 

subcontracting process at the Federal Creosote site was to review 

subcontract decisions and approve subcontracts above a certain dollar 

threshold. As Corps officials explained, subcontracts between $25,000 and 

$100,000 did not need to be approved by the Corps; rather, the prime 

contractor sent the Corps an “advance notification” package, which 

documented that the contractor had competitively solicited the work and 

 

73In addition to overseeing the prime contractor charged with construction, site documents 

showed that the Corps was also required to oversee the design contractor and provide 

written reports to EPA on a monthly basis on changes in the scope of work, project 

progress, and costs. Additionally, the Corps was responsible for ensuring that the prime 

contractor’s work was in accordance with EPA guidance and policies. 

74Although the Corps is not a party to the contract between the prime contractor and the 

subcontractor, the Corps requires that the prime contractor include certain contract 

clauses in its subcontracts to ensure that the subcontract follows the intent of federal 

acquisition regulations and policies. 

Page 48 GAO-10-277 Superfund 
 

why the contractor selected a particular subcontractor over others. 

However, for subcontracts greater than $100,000, the prime contractor had 

to submit a “request for consent” package to the Corps, which contained 

similar documentation as an advance notification but required Corps 

approval prior to awarding a subcontract. 

According to federal acquisition regulations and policies, when evaluating 

request for consent packages, Corps contracting officers should consider 

whether there was sufficient price competition, adequate cost or price 

comparison, and a sound basis for selecting a particular subcontractor 

over others, among other factors. Early in the project, the Corps identified 

several issues with the prime contractor’s performance at the site, 

including the award of subcontracts. According to a letter the Corps sent 

to the prime contractor, the Corps noted that after repeated unsuccessful 

attempts to address these issues, the Corps would initiate proceedings to 

terminate the contract for site work unless the contractor took corrective 

action. However, Corps officials said the contractor demonstrated 

sufficient improvement in its documentation practices. Then, in 2003, the 

Corps raised the request for consent threshold from $100,000 to $500,000 

because of the high volume of these packages that the Corps was 

receiving.75 A Corps official noted that while the Corps reviews and 

consents to the subcontracting decisions of its contractors as appropriate, 

it avoids becoming too involved in the subcontracting process because of 

bid protest rules regarding agency involvement in that process. According 

to the official, under these rules, a subcontract bidder cannot protest a 

subcontract award unless it can show that the overseeing agency was 

overly involved in the subcontracting process. 

Concerning contractors at the Federal Creosote site, the Department of 

Justice and EPA’s Office of Inspector General have ongoing investigations, 

some of which have resulted in allegations of fraud committed by 

employees of the prime contractor and several subcontracting firms. For 

example, court documents alleged bid-rigging, kickbacks, and other 

fraudulent activity related to the award of several subcontracts for a 

variety of services and materials. According to Corps officials, the Corps 

did not suspect issues of fraud in the subcontracting process until 2004 

when, in one instance, a subcontract bidder objected to the award of a soil 

 

75The advance notification threshold was also increased from $25,000 to $100,000 at this 

time, according to Corps officials. Corps officials said that raising the notification and 

consent thresholds is not unusual, and it had been done before at other sites. 

Page 49 GAO-10-277 Superfund 
 

transportation, treatment, and disposal subcontract to another firm whose 

bid was substantially higher. Upon further review of the documents, Corps 

officials found that the prime contractor had not conducted a proper 

evaluation of the bid proposals, and the Corps withdrew its consent to the 

subcontract—ultimately requesting that the prime contractor solicit bids 

under a different process.76 In the revised bidding process, the firm that 

had won the earlier subcontract reduced its price from $482.50 to $401.00 

per ton of contaminated material—only 70 cents below the competing bid 

submitted by the firm that had protested the original subcontract. On this 

basis, the prime contractor again requested consent to subcontract with 

the firm to which it had awarded the earlier subcontract. According to a 

Corps official, the Corps was suspicious of illegal activity given how close 

the two bids were, and Corps officials discussed whether to take formal 

action against the prime contractor. However, Corps officials decided they 

did not have sufficient evidence of wrongdoing to support a serious action 

but did cooperate with others’ investigations of fraud at the site. For more 

information on site-related fraud, see appendix I. 

We provided a draft of this report to the Secretary of the Army and the 

Administrator of the Environmental Protection Agency for review and 

comment. The Secretary, on behalf of the Corps of Engineers, had no 

comments on the draft report. EPA generally agreed with our findings 

regarding the agency’s actions and costs to clean up the Federal Creosote 

site, and provided a number of technical comments, which we 

incorporated as appropriate. EPA’s written comments are presented in 

appendix IV. 

Agency Comments 

and Our Evaluation 

In its comments, EPA noted that the draft report accurately described the 

cleanup of the site and correctly compared the site’s estimated and final 

remedial construction costs. However, EPA stated that comparing 

estimated remedial construction costs to total site costs is not an “apples 

to apples” comparison because some costs, such as amounts spent on 

removal actions or EPA personnel salaries (referred to as “other response 

 

76The prime contractor had solicited bids under a “Request for Proposals” process, which, 

according to a site document, allowed it to select the subcontractor that provided the “best 

value,” even if it involved paying a higher price. However, the Corps found that the prime 

contractor did not adequately justify why a higher price should be paid for the 

subcontractor’s services and requested that the prime contractor solicit bids using a sealed 

bid process, in which only a price per ton and a determination of a subcontractor’s ability 

to perform the work were considered in the selection process. 

Page 50 GAO-10-277 Superfund 
 

costs” in this report), are purposely excluded from EPA’s early estimates 

of remedial construction costs. We agree that to identify the extent to 

which site costs increased over agency estimates, one should only 

compare estimated and actual remedial construction costs, as we do in 

table 4 of this report. However, our objective was, more broadly, to 

identify what factors contributed to the difference between the estimated 

remedial construction costs ($105 million) and the actual total site costs 

($338 million). We found that the difference between these two amounts 

was $141 million in remedial construction cost increases—which were 

largely due to increases in the amount of contaminated material requiring 

remediation—and $92 million in other response costs that were not 

included in EPA’s original estimates. We believe it was necessary to 

provide information on these other response costs to more fully answer 

our objective and to provide a more informative accounting of the total 

costs that EPA incurred in cleaning up the Federal Creosote site. 

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution of it until 30 days from 

the date of this report. At that time, we will send copies of this report to 

the appropriate congressional committees, the Secretary of the Army, the 

Administrator of the Environmental Protection Agency, and other 

interested parties. In addition, the report will be available at no charge on 

GAO’s Web site at http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact me 

at (202) 512-3841 or stephensonj@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page of 

this report. Key contributors to this report are listed in appendix V. 

John B. Stephenson 

Director, Natural Resources 

 and Environment 

Page 51 GAO-10-277 Superfund 
Appendix I: Summary of Criminal and Civil 

Litigation Related to the Federal Creosote 

Site 

Page 52 GAO-10-277 Superfund 

Appendix I: Summary of Criminal and Civil 

Litigation Related to the Federal Creosote 

Site 

Cost Recovery and 

Court records show that several cases have been brought concerning the 

Federal Creosote site cleanup. First, the Department of Justice (Justice) 

and the state of New Jersey have filed claims to recover cleanup costs. 

Second, Justice has brought criminal charges in a series of cases against 

one employee of the prime contractor, three subcontractor companies, 

and eight associated individuals involved in the cleanup, alleging fraud, 

among other things. Third, the prime contractor has brought a civil suit 

against a former employee alleged to have committed fraud and other 

offenses during his employment as well as against associated 

information in this appendix provides a brief 

lated to the Federal Creosote site cleanup. 

United States v. Tronox, LLC: The Comprehensive Environmental 

Response, Compensation, and Liability Act of 1980 (CERCLA) provides 

that parties incurring costs to respond to a release or threatened release of 

a hazardous substance may recover such costs from legally responsible 

parties, including persons who owned or operated a site, among others. In 

this regard, the Environmental Protection Agency (EPA) identified 

Tronox, LLC, the successor to the companies that owned and operated the 

Federal Creosote site, and, for 2 years, EPA and Tronox participated in 

alternative dispute resolution concerning EPA’s cost recovery claims. In 

August 2008, Justice, on behalf of EPA, filed a civil action in the United 

States District Court for the District of New Jersey against Tronox, seeking 

recovery of costs that the government incurred for the Federal Creosote 

site cleanup. The complaint asserted that the government had incurred at 

least $280 million in response costs and would incur additional costs. In 

October 2008, the New Jersey Department of Environmental Protection 

and the Administrator of the New Jersey Spill Compensation Fund filed 

suit in the same court against Tronox, seeking recovery of costs incurred 

for the site, as well as damages for injury to natural resources—under both 

CERCLA and the New Jersey Spill Compensation Act—and public 

nuisance and trespass claims.1

 In December 2008, the federal and state 

cases were consolidated. Tronox has stated its intent to vigorously defend 

against these claims. In early 2009, Tronox filed for voluntary Chapter 11 

bankruptcy in federal bankruptcy court and initiated an adversary 

proceeding in that court, seeking a declaratory judgment on the status of 

the EPA and New Jersey claims with respect to the bankruptcy. 

 

subcontractors. The 

summary of known actions re

Natural Resources 

Damages Claims 

1

New Jersey’s related claims in state court, originally filed in 2007, were dismissed 

subsequent to the filing in federal court. 
Appendix I: Summary of Criminal and Civil 

Litigation Related to the Federal Creosote 

Site 

Page 53 GAO-10-277 Superfund 

Subsequently, both courts entered a stipulation filed by both the 

government plaintiffs and Tronox to stay the cost recovery case as well as 

the adversary proceeding to allow the parties to resolve the claims. As of 

the date of this report, the stays remain in effect. 

United States v. Stoerr: Norman Stoerr, a former employee of the prime 

contractor at the Federal Creosote site, pled guilty to three counts related 

to his activities as a contracts administrator at the site. Court documents 

alleged that over a 1-year period, the employee conspired with others to 

rig bids for one subcontractor at the site, resulting in EPA being charged 

inflated prices. In addition, the documents alleged that over several years, 

the employee solicited and accepted kickbacks from certain 

subcontractors at the Federal Creosote site and another site, and allowed 

the kickbacks to be fraudulently included in subcontract prices that were 

charged to EPA. To date, Stoerr has not been sentenced. 

United States v. McDonald et al: In August 2009, the United States 

indicted Gordon McDonald—a former employee of the prime contractor at 

the Federal Creosote site—as well as representatives of two 

subcontractors who worked at the site, for various counts, including 

kickbacks and fraud. The indictment charged that the prime contractor’s 

employee, a project manager, solicited and accepted kickbacks from 

certain subcontractors in exchange for the award of site work, and that 

these kickbacks resulted in EPA being charged an inflated price for the 

subcontractors’ work. The indictment also charged that the project 

manager disclosed the bid prices of other vendors during the 

subcontracting process, which resulted in the government paying a higher 

price for services than it would have otherwise paid.2

 One of the indicted 

employees (James Haas)—representing a subcontractor who provided 

backfill material to the site—has pled guilty of providing kickbacks and 

submitting a bid that was fraudulently inflated by at least $0.50 per ton of 

material. Haas agreed to pay more than $53,000 in restitution to EPA as 

part of his guilty plea, and has been sentenced to serve 33 months in jail 

and to pay a $30,000 criminal fine. McDonald’s case is proceeding, and 

charges against a third defendant are still pending. 

 

2

The indictment alleged that these acts took place on several occasions and at more than 

one Superfund site. 

Criminal Cases 

Involving Alleged 

Contractor Fraud at 

the Site 
Appendix I: Summary of Criminal and Civil 

Litigation Related to the Federal Creosote 

Site 

United States v. Bennett Environmental, Inc.: Bennett Environm

Inc. (BEI), a subcontractor providing soil treatment and disposal services 

to the Federal Creosote site cleanup, entered a plea agreement admitting 

to one count of fraud conspiracy. Court document

ental, 

s alleged that over 2 

years, the company paid kickbacks to an employee or employees of the 

rime contractor, in return for receiving favorable treatment in the award 

d 

 employees 

ejpar is awaiting 

sentencing. 

sote site 

d arranged for 

intentionally high, noncompetitive bids from other vendors. To date, JMJ 

nvironmental and Drimak are awaiting sentencing. 

 

p

of subcontracts, and inflated its prices charged to EPA. BEI was sentence

to 5 years’ probation and ordered to pay $1.662 million in restitution to 

EPA, plus a $1 million fine.3

United States v. Tejpar: Zul Tejpar, a former employee of BEI, entered a 

plea of guilty to one count of fraud conspiracy. Court documents alleged 

that Tejpar, along with coconspirators, provided kickbacks to

of the prime contractor to influence the award of subcontracts at the site 

and fraudulently inflated the company’s bid price after an employee of the 

prime contractor revealed the other bid prices. To date, T

United States v. Griffiths: Robert P. Griffiths entered a plea of guilty to 

three counts related to fraudulent activity at the Federal Creo

when he was an officer of BEI. Griffiths, along with coconspirators, 

provided kickbacks to employees of the prime contractor to influence the

award of subcontracts at the site, fraudulently inflated the company’s 

invoices that the prime contractor charged to EPA, and fraudulently 

received the bid prices of other bidders prior to award of a subcontract. 

To date, Griffiths is awaiting sentencing. 

United States v. JMJ Environmental, Inc.: JMJ Environmental, Inc., a 

subcontractor providing wastewater treatment supplies and services, and 

John Drimak, Jr., its president, entered guilty pleas related to fraudulent

activity at the Federal Creosote site and another site. At the Federal 

Creosote site, JMJ Environmental and Drimak, along with coconspirators, 

provided kickbacks to employees of the prime contractor to influence the 

award of subcontracts at the site, fraudulently inflated the company’s 

prices that the prime contractor charged to EPA, an

E

3

Courts may impose probation on a corporation. This probation may involve various 

activities intended to prevent future wrongdoing and often involves court-appointed 

oversight. 

Page 54 GAO-10-277 Superfund 
Appendix I: Summary of Criminal and Civil 

Litigation Related to the Federal Creosote 

Site 

United States v. Tranchina: Christopher Tranchina, an employee of 

subcontractor Ray Angelini, Inc., which provided electrical services and 

supplies, entered a plea of guilty to fraud conspiracy for activities at the 

Federal Creosote site. Tranchina, along with coconspirators, provided 

kickbacks to employees of the prime contractor to influence the award o

subcontracts at the site and fraudulently inflated the company’s prices that

the prime contractor charged to EPA. Tranchina was sentenced to 

imprisonment of 20 months and ordered to pay $154,597 in restitution to

EPA. 

f 

tive process, resulting in EPA paying higher prices than if 

procurement regulations were followed. Landgraber was sentenced to 

al 

ployees of the prime contractor 

to influence the award of subcontracts at the site and fraudulently inflated 

ms 

n 

reosote 

he suit also asserted 

various claims against other defendants, including McDonald’s relatives 

and companies allegedly owned by him,4

 and six subcontractors and 

 

United States v. Landgraber: Frederick Landgraber, president of 

subcontractor Elite Landscaping, Inc., entered a plea of guilty to fraud 

conspiracy for activities at the Federal Creosote site. Landgraber, along 

with coconspirators, provided kickbacks to employees of the prime 

contractor to influence the award of subcontracts at the site and 

submitted fraudulent bids from fictitious vendors to give the appearance 

of a competi

imprisonment of 5 months and ordered to pay $35,000 in restitution to 

EPA and a $5,000 fine. 

United States v. Boski: National Industrial Supply, LLC, a pipe supply 

company, and coowner Victor Boski entered guilty pleas for fraud 

conspiracy at the Federal Creosote site and another site. At the Feder

Creosote site, National Industrial Supply and Boski, along with 

coconspirators, provided kickbacks to em

the company’s prices that the prime contractor charged to EPA. The ter

of the plea agreement require National Industrial Supply and Boski to have

available $60,000 to satisfy any restitution or fine imposed by the court, 

among other items. To date, they are awaiting sentencing. 

Sevenson Environmental Services, Inc. v. McDonald: In 2008, Sevenso

Environmental Services, Inc., the prime contractor at the Federal C

site, sued former employee Gordon McDonald for fraud, breach of 

fiduciary duty, breach of contract, and other claims. T

 .; 

cDonald; Kevin McDonald; and Thomas McDonald. 

Prime Contractor 

Civil Suit 

4

These defendants include GMEC, Inc.; Patricia McDonald; Flowers By Sweetens, Inc

Matthew M

Page 55 GAO-10-277 Superfund 
Appendix I: Summary of Criminal and Civil 

Litigation Related to the Federal Creosote 

Site 

associated individuals.5 The allegations related to the Federal Creoso

site and another site. With respect to the Federal Creosote site, the suit 

alleged that the subcontractors provided unauthorized kickbacks to 

McDonald, his companies, or affiliates. Sevenson also alleged, among 

other things, that the company suffered substantial damage from the fraud 

perpetrated by McDonald and employees of BEI, for example, in the 

company’s reliance on fraudulent change orders prepared and 

recommended by McDonald and fraudulent invoices submitted by BEI. 

Seven

te 

son asserted similar allegations of kickbacks and fraudulent invoices 

with respect to other subcontractors. Sevenson sought judgment against 

ve 

 

the defendants, including punitive damages. To date, the parties ha

stipulated to a stay of the case while criminal charges against McDonald

and others are pending (see the previously mentioned cases). 

 

5

These defendants include BEI; John Bennett; Robert Griffiths; DCP Technical Services; 

JMJ Environmental, Inc.; John Drimak, Jr.; Elite Landscaping, Inc.; Frederick A. 

Landgraber; Ray Angelini, Inc.; Ray Angelini; Christopher Tranchina; National Industrial

Supply, LLC; and Victor Boski. 

Page 56 GAO-10-277 Superfund 
Appendix II: Objectives, Scope, and 

Methodology 

Page 57 GAO-10-277 Superfund 

Appendix II: Objectives, Scope, and 

Methodology 

This appendix provides information on the scope of work and 

methodology used to examine (1) how EPA assessed the risks and 

selected remedies for the Federal Creosote site, and what priority EPA 

assigned to site cleanup; (2) what factors contributed to the difference 

between the estimated and actual remediation costs of the site; and (3) 

how responsibilities for implementing and overseeing the site work w

divided between EPA and the U.S. Army Corps of Engineers (the Corp

also discusses our methodology for summarizing criminal and civil 

litigation related to the Federal Creosote site. 

To examine how EPA assessed the risks and selected remedies for the 

Federal Creosote site, as well as what priority it assigned to the clean

we reviewed EPA’s Superfund site investigation

ere 

s). It 

up, 

 and cleanup processes, 

including applicable statutes, regulations, and agency guidance. We also 

reviewed documentation from the site’s administrative record, which 

detailed the agency’s activities and decisions at the site.1

 As part of this 

review, we analyzed public comments that were documented in site 

records of decision to identify key issues with the cleanup effort. To 

obtain additional information on these and other site cleanup issues, we 

interviewed EPA Region 2 officials involved with the site, including 

officials from the Emergency and Remedial Response Division, the Public 

Affairs Division, and the Office of Regional Counsel. Furthermore, we 

interviewed and reviewed documentation obtained from officials with the 

Agency for Toxic Substances and Disease Registry regarding its 

determination of site risks. We also consulted with New Jersey and 

Borough of Manville officials to obtain their views on the cleanup effort. 

Finally, we interviewed representatives of the potentially responsible party 

for the site to obtain the party’s views on EPA’s risk assessment, remedy 

selection, and site prioritization. 

To determine what factors contributed to the differences between the 

estimated and actual costs of site cleanup, we obtained and analyzed data 

on estimated and actual site costs from several sources.2

 For estimated 

site costs, we combined EPA’s estimates for selected remedies from site 

records of decision and remedial alternative evaluations. In developing 

 

1

We did not independently verify the accuracy of the information contained in these 

nts. 

g. 

docume

2

We focused on the estimated and actual costs of activities that had already been

performed as of the spring of 2009, and excluded the costs of future activities at the site, 

such as groundwater monitorin
Appendix II: Objectives, Scope, and 

Methodology 

Page 58 GAO-10-277 Superfund 

these estimates, EPA applied a simplifying assumption that all 

construction costs would be incurred in a single year, and, therefore

did not discount future construction costs, even though work was 

projected to occur several years into the future as a result of design 

activities and resident relocations as well as EPA’s estimated constructio

time frames.3

 However, our discount rate policy guidance recommends 

that we apply a discount factor to future costs.4

 Consequently, to convert 

EPA’s estimated costs into fiscal year 2009 dollars, we (1) conducted

present value analysis to discount future site c

, EPA 

n 

 a 

osts to the dollar year of the 

original estimate (base year) for each remedy, using EPA’s recommended 

e 

cted 

ime 

he 

urces, 

gh various dates in April and early May, 

2009; and contractor-generated project cost summary reports for data on 

discount rate of 7 percent, and (2) converted the present value of each 

estimate into fiscal year 2009 dollars. To calculate the present value of 

estimated costs, we identified the projected construction time frames for

each remedy from site documents. Because the documents did not provid

information on how construction costs would be distributed over the 

projected time frame, we calculated the midpoint of a range of values, 

assuming that all costs for particular activities comprising EPA’s sele

remedies would either be incurred at the beginning of the projected t

frame (the maximum value of these costs) or at the end of the projected 

time frame (the minimum value). To adjust the present values from t

base year to fiscal year 2009 constant dollars, we divided the present 

values by the inflation index for the base year and weighted the 

calculation to convert the base year from calendar years to fiscal years. 

To identify actual sitewide costs, we compiled data from multiple so

including EPA’s Superfund Cost Recovery Package Imaging and On-Line 

System (SCORPIOS) for data on site costs through April 30, 2009;5

 the 

Corps of Engineers Financial Management System (CEFMS) for data on 

Corps and contractor costs throu

 

EPA’s estimated costs were actually higher than they would have been otherwise. 

4

GAO, Discount Rate Policy, GAO/OCE 17.1.1 (Washington, D.C.: May 1991). 

 as 

elated to the Federal Creosote site. According to an EPA official, some early 

investigation work was performed by a contractor that was working at multiple sites, and 

o the 

3

Because EPA did not discount future construction costs when calculating its estimates,

5

The SCORPIOS data collected from EPA included all costs that the agency identified

specifically r

EPA was unable to identify how much of the contractor’s costs were attributable t

Federal Creosote site. As a result, costs for this work were not included in the SCORPIOS

data that EPA provided. 
Appendix II: Objectives, Scope, and 

Methodology 

contractor costs for each phase of the cleanup through Februar

We relied on multiple data sources for our analysis because none of the 

sources provided a sufficient level of specificity for us to comprehe

determine when and for what purpose costs were incurred. In partic

the SCORPIOS data provided specific dates of when EPA incurred costs 

but for some costs, especially those related to site construction work, th

data did not generally provide detailed information on why the costs were

incurred. Therefore, to obtain more detailed information on the reason f

incurring certain costs, we used the data from CEFMS and the contractor’s 

project cost summary reports. However, the CEFMS and contractor 

project cost summary report data did not generally provide specific 

information on when costs were incurred. Consequently, to determine 

actual site costs in fiscal year 2009 dollars, we used two approaches. For 

costs taken from the SCORPIOS data or when detailed information on the 

date of a particular cost was available, we applied the inflation index f

the particular fiscal year in which EPA incurred the cost. For costs take

from the other data sources, we used the midpoint of the range of 

inflation-adjusted values for the construction start and end dates for 

individual work phases, as recorded in site documents. 

We worked with EPA Region 2 officials to categorize site costs, includ

those that were part of EPA’s original construction estimates as 

those that were not part of EPA’s estimates. After identifying the costs th

y 15, 2009.6

nsively 

ular, 

e 

or 

or 

n 

ing 

well as 

at 

were not included in EPA’s original estimates, we took the difference 

d 

site documents on the estimated and actual amounts of contaminated 

material at various stages of the cleanup process to obtain further 

information on the extent to which increased amounts of contaminated 

material affected site costs.7

 To examine the impact of alternative 

 

between estimated and actual construction costs, according to categories 

that we discussed with EPA, to identify where actual costs changed the 

most from EPA’s estimates. Then, to identify the factors that contribute

the most to the difference in these cost categories, we analyzed the types

of costs in each category and interviewed EPA Region 2 and Corps 

officials responsible for the cleanup. In addition, we analyzed data from 

methodologies on the disparity between estimated and actual costs, we 

 r, 6

According to site documents, remedial construction concluded in February 2008; howeve

EPA and Corps officials noted that costs for some site maintenance and administrative 

activities continued to accrue. 

7

We did not independently verify the information on soil quantities within the site 

documents. 

Page 59 GAO-10-277 Superfund 
Appendix II: Objectives, Scope, and 

Methodology 

reviewed EPA cost-estimating guidance and calculated the effect of 

discounting future estimated costs within our analysis. To determine how

fraud impacted site costs, we reviewed civil and criminal litigation 

documents describing the monetary values exchanged in various 

schemes.

ents 

ir 

e 

erally, 

lay between when 

a cost is incurred by a contractor and when it is invoiced and processed, 

 the 

d and 

e 

n 

general as well as site-specific agreements for the design and 

implementation of the cleanup at the Federal Creosote site. We also 

 

8

To ensure the reliability of the actual cost data we used for this report, we 

reviewed the data obtained from the SCORPIOS and CEFMS databases as 

well as the contractor-generated cost summary reports that the Corps 

provided. For each of these data sources, we reviewed agency docum

and interviewed EPA and Corps officials to obtain information on the

data reliability controls. We also electronically reviewed the data and 

compared them across all sources as well as with other information on sit

costs as available. For example, we compared contractor cost data 

provided by the Corps with similar data from the contractor-generated 

cost summary reports. Similarly, we compared Corps cost data from 

CEFMS with analogous data from EPA’s SCORPIOS database. Gen

we found that discrepancies among comparable data from different 

sources were most likely attributable to the potential de

first by the Corps and later by EPA. On the basis of our evaluation of these

sources, we concluded that the data we collected and analyzed were 

sufficiently reliable for our purposes. However, because some costs 

incurred prior to early May 2009 may not have been processed through

Corps and EPA’s cost-tracking systems at the time of data collection, site 

cost data in this report are considered to be approximate. Moreover, 

because our methodology relied on calculating the midpoint of a range of 

costs for both the present value calculations and adjusting data for 

inflation, we consider the data we present in this report on estimate

actual costs and the difference between these costs also to be 

approximate. 

To describe how responsibilities for implementing and overseeing the sit

work were divided between EPA and the Corps, we reviewed the 

interagency agreement between EPA and the Corps for Superfund sites i

 

Because some cases involved fraud at multiple sites and investigations are ongoing, we 

ederal 

. 

8

could not determine the exact extent to which fraud affected cleanup costs at the F

Creosote site

Page 60 GAO-10-277 Superfund 
Appendix II: Objectives, Scope, and 

Methodology 

reviewed agency guidance regarding EPA’s responsibilities at Superf

sites. To obtain information on EPA’s oversight actions, we interviewed 

EPA and Corps officials responsible for site cleanup and contracting

We also reviewed site meeting minutes, monthly progress reports,

correspond

und 

 work. 

 EPA 

ence to the Corps, and relevant EPA Office of Inspector 

General reports. To further describe the Corps’ responsibilities at the 

t 

f 

orps’ 

e 

al, we 

plan and 

gagement to obtain sufficient and appropriate evidence to 

meet our stated objectives and to discuss any limitations in our work. We 

sions in 

 

Federal Creosote site, we reviewed Corps guidance for the cleanup of 

hazardous waste projects, Corps contract management best practices, and 

relevant procurement regulations. To obtain information on actions tha

the Corps took to implement its site responsibilities, we reviewed Corps 

correspondence to the contractor and contractor requests for approval o

soil treatment and disposal subcontracts. We also interviewed Corps 

officials responsible for site cleanup and contracting work as well as EPA 

Region 2 officials. However, we did not assess the adequacy of the C

efforts or its compliance with Corps guidance and federal procurement 

regulations. 

To examine issues regarding civil and criminal litigation related to th

Federal Creosote site, we collected case data from the Public Access to 

Court Electronic Records system.9

 We then qualitatively analyzed 

documents obtained from this system to identify the issues involved and 

the status of each case as well as the outcomes, if any, of the cases. 

However, because criminal investigations are ongoing and confidenti

could not determine whether any additional criminal charges were under 

consideration, but relied solely on the publicly available information for 

charges that had been filed as of November 2009.10

We conducted our work from May 2008 through February 2010 in 

accordance with all sections of GAO’s Quality Assurance Framework that 

are relevant to our objectives. The framework requires that we 

perform the en

believe that the information and data obtained, and the analyses 

conducted, provide a reasonable basis for any findings and conclu

this product. 

9

This system provides access to documents related to cases filed in federal courts and is 

 by the Administrative Office of the U.S. Courts, which is the central support 

aluate the accuracy of the information obtained from court documents. 

operated

agency for the Judicial Branch. 

10We did not ev

Page 61 GAO-10-277 Superfund 
Appendix III: Timeline of EPA Actions at the 

Federal Creosote Site 

Page 62 GAO-10-277 Superfund 

Appendix III: Timeline of EPA Actions at the 

Federal Creosote Site 

Figures 8 and 9 provide additional information on the timing of EPA’s 

actions at the Federal Creosote site. Specifically, figure 8 shows the timing 

of key EPA actions related to its risk assessment and remedy selection at 

the site, while figure 9 provides additional information on the timing of k

remedial design and action activities. Both figures demonstrate the e

to which EPA’s efforts to assess risks and select, design, and construct

remedies took place concurrently. 

ey 

xtent 
Appendix III: Timeline of EPA Actions at the 

Federal Creosote Site 

Figure 8: Key Events Related to Risk Assessment and Remedy Selection at the Federal Creosote Site 

a

The groundwater human health risk assessment and remedial technology evaluation was completed 

in two parts. First, in July 2001, EPA issued a remedial investigation report for groundwater that 

contained the human health risk assessment. Second, in August 2001, EPA issued a feasibility study 

report that included the remedial technology evaluation for groundwater. 

Source: GAO rce: GAO analysis of EPA documents.

EPA conducts an initial site investigation

1996 1997 1998 1999 2000 2001 2002 2003

4/96

1/98 5/98

1/97

4/97

5/97 9/00

10/97 11/98

1/99

1/98

New Jersey Department of Environmental Protection (NJDEP)

identifies a black tarry substance in a leaking sump on-site

Borough of Manville responds to report of sinkhole in residential area and 

determines that local drinking water supplies are not contaminated from the site

NJDEP and EPA sample for indoor air contamination in residential homes

Start

date

End

date

2/97

5/97

4/99

7/98

1/99

3/99

11/99

9/99

4/00

9/00

7/01

6/02

9/02

Agency for Toxic Substances and Disease Registry (ATSDR) develops several

health consultations and issues a public health assessment for the site

EPA completes a Hazard Ranking System evaluation

Responsibility for Federal Creosote site transferred from NJDEP to EPA

EPA completes a human health risk assessment for surface soil 

EPA completes an evaluation of remedial technologies for OU1 on the basis of the

results of the initial investigation 

Federal Creosote site proposed for the National Priorities List (NPL) 

EPA takes soil samples in the Claremont Development Operable Unit 2 (OU2)

soils as part of the remedial investigation/feasibility study (RI/FS)

Federal Creosote site formally listed on the NPL

EPA takes soil samples in the Rustic Mall (OU3) as part of the RI/FS

EPA takes additional groundwater samples as part of the RI/FS

6/01

OU1 record of decision (ROD) issued

EPA completes a human health risk assessment and remedial technology

evaluation for OU2 soils

OU2 ROD issued

EPA completes a human health risk assessment and remedial technology

evaluation for OU3 soils

EPA completes a human health risk assessment and remedial technology

evaluation for groundwatera

OU3 ROD issued

EPA completes an addendum to the groundwater evaluation determining

that treating groundwater at the site would be technically impracticable

Key events

12/98

8/99

8/99 11/99

Page 63 GAO-10-277 Superfund 
Appendix III: Timeline of EPA Actions at the 

Federal Creosote Site 

Figure 9: Key Events Related to Remedial Design and Action at the Federal Creosote Site 

a

According to EPA, the OU1 Phase 2 remedial action was completed in April 2004. However, this 

area was used as a staging area for waste from OU1 Phase 3, OU2 Phase 2, and OU3 properties. As 

a result, restoration of the OU1 Phase 2 area could not be completed until all excavation and shipping 

of OU3 waste was complete (since OU3 was the last completed area for which the OU1 Phase 2 area 

was used to stage waste). 

b

According to EPA, the OU2 Phase 2 remedial action occurred on an episodic basis. The initial 

remedial action that was part of OU2 Phase 2 was a remedial action at the day-care center 

playground that began and ended in August 2001. Remedial action on OU2 Phase 2 residential 

roperties was not begun until almost 2 years later and was completed in June 2005. Also, because 

6. 

Source: GAO rce: GAO analysis of EPA documents.

Relocation efforts begin for residents in residential

properties identified for demolition

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

7/98 9/98

4/03 4/06

9/99

9/99 1/03

10/99

10/00 6/02

6/02 1/08

EPA conducts a removal action at certain residential

properties with unacceptable risks from surface soil

contamination

OU1 Remedial design Phase 1

Phase 2

Phase 3

Start

date

End

date

9/99 10/00

3/02

9/00 11/01

9/00 2/03

8/01 5/06

6/02

7/07

11/02

OU1 Remedial action Phase 1

OU2 Remedial action Phase 1

OU3 Remedial action 

Phase 2a

Phase 3

OU2 Remedial design Phase 1

Phase 2

Phase 2b

OU3 Remedial design 

6/05 2/08

EPA approval for treated waste to be disposed of

at a nonhazardous waste facility

Indicates activities for the Claremont Development

Indicates activities for the Rustic Mall 

Key events

2/02

9/02

p

the day-care center parking lot was connected to the Rustic Mall, the remedial action at the parking 

lot was completed, together with the OU3 remedial action, between November 2005 and May 200

Page 64 GAO-10-277 Superfund 
Appendix IV: Comments from the 

Environmental Protection Agency 

d 

Appendix IV: Comments from the 

Environmental Protection Agency 

Page 65 GAO-10-277 Superfun
Appendix IV: Comments from the 

Environmental Protection Agency 

Page 66 GAO-10-277 Superfund 
Appendix V: GAO Contact and Staff 

Acknowledgments 

Page 67 GAO-10-277 Superfund 

Appendix V: GAO Contact and Staff 

John B. Stephenson, (202) 512-3841 or stephensonj@gao.gov

In addition to the individual named above, Vincent P. Price, Assistant 

Director; Carmen Donohue; Maura Hardy; Christopher Murray; Ira 

Nichols-Barrer; and Lisa Van Arsdale made key contributions to this 

report. Elizabeth Beardsley, Nancy Crothers, Alexandra Dew, Richard 

Johnson, and Anne Stevens also made important contributions. 

Acknowledgments 

GAO Contact 

Staff 

Acknowledgments 

(360952) 
GAO’s Mission The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help 

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost 

is through GAO’s Web site (www.gao.gov). Each weekday afternoon, GAO 

posts on its Web site newly released reports, testimony, and 

correspondence. To have GAO e-mail you a list of newly posted products, 

go to www.gao.gov and select “E-mail Updates.” 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s Web site, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information. 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Ralph Dawn, Managing Director, dawnr@gao.gov, (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, DC 20548 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548 

Public Affairs 

Please Print on Recycled Paper