Superfund: Progress, Problems, and Future Outlook
Published: 1999-03-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Pursuant to a congressional request, GAO discussed the status and management of the Superfund program and the outlook for the program's future, focusing on: (1) progress made toward cleaning up sites in the program; (2) continuing management problems; and (3) factors affecting Superfund's future workload.
section_title: What GAO Found
paragraphs: GAO noted that: (1) in the past GAO has called attention to the slow pace of cleanups in the Superfund program; (2) however, 17 years after sites were first placed on the Superfund list, many of the sites have progressed a considerable distance through the cleanup process; (3) decisions about how to clean up the great majority of these sites have been made, and the construction and cleanup remedies have been completed at over 40 percent of the sites; (4) the Environmental Protection Agency's (EPA) goal is to complete the construction of remedies at 1,200 sites by 2005; (5) work to clean up groundwater will continue at many sites after remedies are constructed; (6) despite the progress that Superfund has made toward site cleanups, certain management problems persist; (7) these problems include the: (a) difficulty in controlling contract costs; (b) failure to recover certain federal cleanup costs from the parties who are responsible for the contaminated sites; and (c) selection of sites for cleanup without assurance that they are the most dangerous sites to human health and the environment; (8) these problems have caused GAO to include the program on its list of federal programs vulnerable to waste and abuse; (9) furthermore, GAO's analysis indicates that the costs of on-site work by cleanup contractors represent less than half of the spending in the program; (10) there is considerable uncertainty about the future workload of the Superfund program; (11) resolving this uncertainty depends largely on deciding how to divide responsibility for the cleanup of sites between EPA and the states; (12) the number of sites that have entered the Superfund program in recent years has decreased as EPA has focused its resources on completing work at existing sites and the states have developed their own programs for cleaning up sites; (13) according to EPA and state officials who responded to the survey, a large number of sites in EPA's inventory of potential Superfund sites are contaminating groundwater and drinking water sources and causing other problems and may need cleanup; (14) GAO recommended that EPA work with the states to assign responsibility for these sites among themselves; and (15) the Superfund reauthorization process gives Congress an opportunity to help guide EPA and the states in allocating responsibility for addressing these sites.

section_title: Letter
paragraphs: Thank you for the opportunity to discuss the current status and  management of the Superfund program and the outlook for the program’s  future.  My comments today are based on a number of reports we have  issued in recent years that relate to three specific issues:  (1) progress  made toward cleaning up sites in the program, (2) continuing management  problems, and (3) factors affecting Superfund’s future workload.  In  summary, our work has shown the following:
In the past, we have called attention to the slow pace of cleanups in the  Superfund program.  For example, we reported that cleanups completed  in 1996 took an average of over 10 years.  However, now, 17 years after  sites were first placed on the Superfund list, many of the sites have  progressed a considerable distance through the cleanup process.   Decisions about how to clean up the great majority of these sites have  been made, and the construction of cleanup remedies has been  completed at over 40 percent of the sites.  EPA’s goal is to complete the  construction of remedies at 1,200 sites by 2005.  Work to clean up  groundwater will continue at many sites after remedies are constructed.
Despite the progress that Superfund has made toward site cleanups,  certain management problems persist.  These problems include the  difficulty in controlling contract costs, the failure to recover certain  federal cleanup costs from the parties who are responsible for the  contaminated sites, and the selection of sites for cleanup without  assurance that they are the most dangerous sites to human health and  the environment.  These problems have caused us to include the  program on our list of federal programs vulnerable to waste and abuse.   Furthermore, our analysis indicates that the costs of on-site work by  cleanup contractors represent less than half of the spending in the  program.
There is considerable uncertainty about the future workload of the  Superfund program.  Resolving this uncertainty depends largely on  deciding how to divide responsibility for the cleanup of sites between  EPA and the states.  The number of sites that have entered the  Superfund program in recent years has decreased as EPA has focused  its resources on completing work at existing sites and the states have  developed their own programs for cleaning up sites.  However,  according to EPA and state officials who responded to our survey, a  large number of sites in EPA’s inventory of potential Superfund sites are  contaminating groundwater and drinking water sources and causing  other problems and may need cleanup.  We have recommended that EPA  work with the states to assign responsibility for these sites among  themselves.  The Superfund reauthorization process gives the Congress  an opportunity to help guide EPA and the states in allocating  responsibility for addressing these sites.
subsections: section_title: Background
paragraphs: In 1980, the Congress passed the Comprehensive Environmental Response,  Compensation, and Liability Act (CERCLA), creating the Superfund  program to clean up highly contaminated hazardous waste sites.  CERCLA  authorizes EPA to compel the parties responsible for the contaminated  sites to clean them up.  The law also allows EPA to pay for cleanups and  seek reimbursement from the parties.  EPA places sites that it determines  need long-term cleanup action on its National Priorities List (NPL).  As of  early 1999, there were 1,264 sites on or proposed for the NPL.  Another 182  sites had completed the cleanup process or were determined not to need  cleanup and had been deleted from the NPL.  Once listed, the sites are  further studied for risks, and cleanup remedies are chosen, designed, and  constructed.  EPA relies extensively on contractors to study site conditions  and conduct cleanups.
Cleanup actions fall into two broad categories:  removal actions and  remedial actions.  Removal actions are usually short-term actions designed  to stabilize or clean up hazardous sites that pose an immediate threat to  human health or the environment.  Remedial actions are usually longer  term and more costly actions aimed at permanent remedies.
According to a 1998 report by the Environmental Law Institute, all 50  states have established their own cleanup programs for hazardous waste  sites.  In addition to handling less dangerous sites, some of the state  programs can handle highly contaminated sites, whose risks could qualify  them for the Superfund program.  Some states initially patterned their  cleanup programs after the Superfund program but over the years, in an  effort to clean up more sites faster and less expensively, have developed  their own approaches to cleaning up sites.
States accomplish cleanups under three types of programs: (1) voluntary  cleanup programs that allow parties, who are often interested in increasing  sites’ economic value, to clean them up without state enforcement actions;  (2) brownfields programs that encourage the voluntary cleanup of sites in  urban industrial areas to enable their reuse; and (3) enforcement programs  that oversee the cleanup of the most serious sites and force uncooperative  responsible parties to clean up their sites.  States generally use their  voluntary and brownfields programs to clean up less complex sites by  offering various incentives to responsible parties, such as reduced state  oversight.  States maintain that these programs accomplish site cleanups  quickly and efficiently.
Some states also maintain cleanup funds to pay all or a portion of the costs  of cleanups at sites for which responsible parties that are able to pay for  full cleanups cannot be found.  The states vary greatly in the resources that  they have devoted to cleanups.  For example, the 1998 Environmental Law  Institute study determined that states had cleanup funds totaling $1.4  billion as of the end of the states’ 1997 fiscal year, with 6 states having fund  balances of $50 million or more and 26 states having fund balances of less  than $5 million.  The study also reported that states spent a total of $565  million on their cleanup programs in fiscal year 1997, with 2 states  spending $50 million or more and 27 states spending less than $5 million.
section_title: Superfund Has Made Progress Cleaning Up Sites
paragraphs: Even though cleanups have taken a long time to accomplish, if it maintains  its current pace, the Superfund program will complete the construction of  cleanup remedies at the great majority of current NPL sites within the next  several years.  In our March 1997 report, we said that cleanups completed  in 1996 took an average of 10.6 years.  Much of the time taken to complete  cleanups was spent during the early planning phases of the cleanup process  during which cleanup remedies are selected.  We said that less time had  been spent on actual construction work at sites than on the selection of  remedies.
Now, however, most NPL sites have been in the cleanup process for a long  time and have moved beyond the remedy selection phase.  Last year, we  reported that EPA had completed the selection of remedies at about 70  percent of the NPL sites as of the end of fiscal year 1997.  It had plans to  complete, by the end of fiscal year 1999, remedies for about 67 percent of  the federally owned or operated sites and 95 percent of the nonfederal sites  that were listed as of the end of fiscal year 1997.  EPA reports that it has  completed the construction of cleanup remedies at 585 sites as of January  1999; will complete construction at 85 sites in each of fiscal years 1999 and  2000; and will finish a total of 1,200 sites by 2005.  Groundwater cleanups  will continue at many of these sites after the completion of remedy  construction.
These completion rates reflect EPA’s decision to make the completion of  construction at existing sites the Superfund program’s top priority and to  reduce new entries into the program.  About 89 percent of the NPL sites  were placed on the list between 1982 and 1990.  Figure 1 shows the number  of sites listed on the NPL and the number of sites where the construction of  the cleanup remedy was completed during the years 1986 through 1998.
Under the Superfund program, in addition to its remedial work, EPA has  conducted removals at 595 NPL sites and 2,591 other contaminated sites.   Cleanup work has also been conducted at sites where construction of the  final cleanup remedy has not yet been completed.  At the request of this  committee, we are conducting a review to determine the extent of this  ongoing cleanup activity.
section_title: Uncorrected Problems Make Superfund A High-Risk Program
paragraphs: For several years, GAO has included the Superfund program on its list of  federal programs that pose significant financial risk to the government and  the potential for waste and abuse.  We included Superfund on the list  because of (1) problems with the management of cleanup contractors, (2)  insufficient recovery of cleanup costs from responsible parties, and (3) the  absence of risk-based priorities for site cleanups.  EPA has corrected some  of these problems, but enough remain that we have not yet been able to  remove Superfund from the high-risk list.  I would like to review these  problems and EPA’s response.
subsections: section_title: Contract Management
paragraphs: First, we raised concerns about several contracting practices.  We said that  EPA had a backlog of more than 500 audits of its Superfund contracts.  The  purpose of these audits is to evaluate the adequacy of contractors’ policies,  procedures, controls, and performance.  The audits are necessary for  effective management and are a key tool for deterring and detecting waste  and abuse.  The agency has now almost eliminated its backlog of contract  audits.
We also found that EPA was approving contractors’ cleanup cost proposals  without estimating what the work should cost.  As a result, the agency  could not negotiate the best contract price for the government.  In  response, EPA is now developing its own cost estimates and using them to  guide its price negotiations with contractors.  However, EPA was still  having problems developing accurate estimates in about half the cases we  recently reviewed.  Furthermore, many of the cost estimators in the EPA  regions told us that they lacked the experience and historical data they  needed to do a better job at developing these estimates.  EPA has requested  the U.S. Army Corps of Engineers, an agency with extensive contracting  experience, to conduct an assessment of EPA’s cost-estimating practices  and recommend potential improvements.  The assessment is still ongoing  and will be completed in mid 1999.  Unless EPA ensures that its regions  implement and sustain corrective measures resulting from this review,  problems can reoccur.  EPA has taken similar corrective actions in the past,  yet we continue to find problems with estimates.
Lastly, with respect to contracting, we reported that EPA had difficulty  controlling the overhead, or program support costs, of its contractors.  To  ensure that it had enough contractors to conduct cleanups, EPA hired a  large number of contractors—more, it turned out, than it actually needed.   Even though it did not have enough cleanup work to keep them all busy, it  had to pay their overhead costs (i.e., the costs of their maintaining the  capacity to respond to work assignments--such as office space).  Although  EPA cut in half the number of contractors that it keeps in place, our recent  work indicates that this reduction may not have been enough.  We found  that, for the majority of contracts we reviewed, EPA continues to pay  overhead costs ranging from 16 percent to 76 percent of the overall  contract’s costs, exceeding EPA’s 11 percent target.  In addition, persistent  high overhead costs and uncertainty about the future size of the program  raise broader questions about the type and the number of contracts EPA  really needs to have in place.
section_title: Cost Recovery
paragraphs: Even though CERCLA makes parties who are responsible for contaminated  sites liable for cleanup costs, we have repeatedly reported that EPA has not  charged responsible parties for certain costs of operating the cleanup  program--mainly indirect program costs, such as personnel and facilities.   EPA has excluded about $3 billion—about 20 percent of the $15 billion it  has spent on Superfund through fiscal year 1997—in indirect costs from  final settlements with responsible parties.  In the early years of the  program, EPA took a conservative approach to allocating indirect costs to  private parties because it was uncertain which indirect costs the courts  would agree were recoverable if parties legally challenged EPA.  The  agency could lose the opportunity to recover at least a half billion dollars  more if it does not soon reverse this practice.  Recently, Superfund program  officials have developed a new way to determine recoverable indirect costs  that could increase EPA’s cost recoveries, but the Superfund program has  not yet used this new method because it is waiting for approval from EPA  and the Justice Department.
section_title: Priority Setting
paragraphs: The final Superfund issue that we discussed in our high-risk series is the  absence of a system for prioritizing sites for cleanup based on the risk they  pose to human health and the environment.  EPA has partially corrected  this problem.  In 1995, it created the National Prioritization Panel to help it  set funding priorities for sites at which remedies had been selected and that  were ready for cleanup.  The panel, which is composed of regional and  headquarters cleanup managers, ranks all of the sites ready for cleanup  construction nationwide on the basis of the health and environmental risks  and other project considerations, such as cost-effectiveness.  EPA then  approves funding for projects on the basis of these priority rankings.
EPA, however, does not use relative risk as a major criterion when deciding  which of the eligible sites to place on the NPL.  In our discussions with  EPA managers responsible for assessing sites for Superfund consideration,  we found that the agency relies on the states to choose which of the eligible  sites to refer to EPA for placement on the NPL.  States refer sites after  selecting those that they will address through their own enforcement or  voluntary cleanup programs.  The EPA cleanup managers with whom we  talked expect that future sites placed on the NPL will not necessarily be the  most risky but, rather, those that the states find to be large, complex, and  therefore costly, or those without responsible parties willing and able to  pay for the cleanup.
Because EPA does not usually track the status of cleanups that take place  outside of the Superfund program, EPA does not know if the worst sites in  the nation are being addressed first.  Some EPA regions are encouraging  their states to voluntarily provide EPA with information on the cleanup  status of the sites that the states are addressing and that EPA considers as  potentially posing significant risk.
In addition to our work on the high-risk aspects of the Superfund program,  we have conducted detailed analyses of spending in the program.  In  summary, we have reported that the share of Superfund expenditures that  go to cleanup contractors for the study, design, and implementation of  cleanups increased from fiscal years 1987 through 1996, but declined in  fiscal year 1997.  We also reported that between fiscal years 1996 and 1997,  EPA’s Superfund costs for administration and support activities  correspondingly increased (see fig. 2).  As you know, we are currently  conducting additional analysis of the Superfund program’s expenditures for  this Committee and others.  We plan to report on the results of this work in  May.
section_title: The Future Direction Of Superfund Is Uncertain
paragraphs: EPA’s inventory of potential NPL sites contains sites that have been  awaiting a decision for several years or more on whether they should be  listed on the NPL.  EPA and state officials believe that many of these sites  need cleanup work, but the respective cleanup responsibilities of EPA and  the states have not been established.
As of the end of fiscal year 1997, EPA’s Superfund database indicated that  the risks of over 3,000 sites had been judged on the basis of preliminary  evaluations to be serious enough to make the sites potentially eligible for  the NPL.  EPA classified these sites as “awaiting an NPL decision.”   Information about the nature and the extent of the threat that these sites  pose to human health and the environment, the extent of states' or EPA's  cleanup actions at the sites, and the states' or EPA's cleanup plans for the  sites is important to determining the future size of the Superfund program.
We surveyed EPA regions, other federal agencies, and the states to (1)  determine how many of the over 3,000 sites remain potentially eligible for  the NPL; (2) identify the characteristics of these sites, including their health  and environmental risks; (3) determine the status of any actions to clean up  these sites; and (4) collect the opinions of EPA and other federal and state  officials on the likely final disposition of these sites, including the number  of sites that are expected to be placed on the NPL.  We reported the results  of our surveys in two November 1998 reports.
On the basis of our surveys, we determined that 1,789 of the 3,036 sites that  EPA's database classified as “awaiting an NPL decision” in October 1997  are still potentially eligible for placement on the list.  EPA, other federal  agency, and state officials responding to our survey said that many of these  sites presented risks to human health and the environment.  According to  these officials, about 73 percent of the sites have caused contamination in groundwater  and another 22 percent could contaminate groundwater in the future; about 32 percent of the sites caused contamination in drinking water  sources and another 56 percent could contaminate drinking water  sources in the future;
96 percent of the potentially eligible sites are located in populated areas  within a half-mile of residences or places of regular employment; and workers, visitors, or trespassers may have direct contact with  contaminants at about 55 percent of the sites.
We asked officials of EPA, other federal agencies, and states to rank the  risks of the potentially eligible sites.  These officials collectively said that  about 17 percent of the potentially eligible sites currently pose high risks to  human health and the environment, and another 10 percent of the sites (for  a total of 27 percent) reportedly may also pose high risks in the future if  they are not cleaned up (see fig. 3).  For about one-third of the sites, the  officials said that it was too soon or they needed more information to  determine the seriousness of the sites' risks, or they provided no risk  characterization.
Officials responding to our surveys said that some cleanup activities  (which they stated were not final cleanup actions) have taken place at 686  of the potentially eligible sites.  These actions were taken at more than half  of the sites that were reported to currently or potentially pose high risks,  compared to about a third of the sites that have been reported to currently  or potentially pose average or low risks.  No cleanup activities beyond  initial site assessments or investigations have been conducted or no  information is available on any such actions at the other 1,103 potentially  eligible sites.  Many of the potentially eligible sites have been in state and  EPA inventories of hazardous sites for extended periods.  Seventy-three  percent have been in EPA's inventory for more than a decade.   No cleanup  progress was reported at the majority of the sites that have been known for  10 years or more.
It is uncertain whether most potentially eligible sites will be cleaned up;  when cleanup actions, if any, are likely to begin; who will do the cleanup;  under what programs these activities will occur; and what the extent of  responsible parties' participation will be.  We did not receive enough  information from our survey to determine what cleanup actions will be  taken at more than half of the 1,789 potentially eligible sites and whether  EPA or the states will take these actions (see fig. 4).  We are making no  forecast of the number from the group of 1,789 potentially eligible sites that  will be added to the NPL in the future.  However, EPA and state officials  collectively believed that 232 (13 percent) of the potentially eligible sites  might be placed on the NPL in the future.  Officials estimated that almost  one third of the potentially eligible sites are likely to be cleaned up under  state programs but usually could not give a date for the start of cleanup  activities.  State officials stated that, for about two-thirds of the sites likely  to be cleaned up under state programs, the extent of responsible parties'  participation is uncertain.  This is important because officials of about half  of the states told us that their state's financial capability to clean up  potentially eligible sites, if necessary, is poor or very poor.  In addition,  officials of about 20 percent of the states said that their enforcement  capacity (including resources and legal authority) to compel responsible  parties to clean up potentially eligible sites is fair to very poor.
Our November report recommends that EPA review its inventory of  potential NPL sites to determine which of them need immediate action and  which will require long term cleanup action and, in consultation with the  states, develop a timetable for taking these actions.
In conclusion, Mr. Chairman, despite the long durations of cleanups in the  past, Superfund is within sight of completing the construction of cleanup  remedies at most of the sites on the NPL.  While recognizing this  accomplishment, we believe that management problems and cost control  issues we have reported on for several years remain to be solved.  Because  few sites have been admitted to the program in recent years, the NPL  pipeline is clearing out.  On the other hand, there are many sites in EPA’s  inventory of potential NPL sites that still need attention and possible  cleanup, but EPA and the states have postponed decisions, sometimes for  up to 10 years or longer, on how to address them.
Over the last two decades, the states have built up the capacity to deal with  site cleanups to varying degrees.  Some have substantial programs, but  others have limited resources and report that their ability to pay for  cleanups is poor.  Furthermore, not all of the states have adequate  enforcement authority to force responsible parties to pay for cleanups.
Because states generally now have the lead for screening sites for NPL  consideration, future NPL sites may disproportionately represent complex  cleanups for which responsible parties cannot be found or are unwilling to  ante up the full cost of the cleanup.  We have recommended that EPA work  with the states to assign responsibility among themselves for these sites.   The Superfund reauthorization process gives the Congress an opportunity  to help guide EPA and the states in allocating responsibility for addressing  these sites.
Mr. Chairman, this concludes my prepared statement.  I will be happy to  respond to your questions or the questions of committee members.
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