Identification, investigation, and cleanup of hazardous substances under DOD's FUDS program are authorized by the Defense Environmental Restoration Program (DERP). Such actions must be carried out consistent with the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) as amended by the Superfund Amendments and Reauthorization Act of 1986 (SARA), which established DERP. The goals of the program also include the correction of environmental damage. To fund the program, SARA set up the Defense Environmental Restoration Account. DOD has established specific goals for the cleanup of properties, including FUDS, that have hazardous, toxic, and radioactive wastes in the soil and water. These goals include having an approved cleanup process in place or cleanup complete at 100 percent of all such properties by the end of fiscal year 2014. DOD has not yet set any goals for projects involving hazardous, toxic, and radioactive waste in containers, unexploded ordnance, other explosive wastes, or unsafe building demolition. Total spending for the FUDS cleanup program since fiscal 1984 is $2.6 billion. During the most recent past five fiscal years (1997-2001), annual program funding for FUDS cleanup averaged about $238 million, with program funding in fiscal year 2001 of $231 million. The Corps' estimate of the additional cost to complete cleanup of the 4,467 currently identified projects is about $13 billion, not including program management or support costs or inflation beyond fiscal year 2007. Also omitted from the estimated cost is a revised cost projection for the cleanup of unexploded ordnance, which resulted from a recent survey of DOD training ranges. According to Corps officials, the revised cost projection for ordnance cleanup would add another $5 billion or more, depending on the level of cleanup selected, to the estimated cost to complete all FUDS projects. By the time all projects are completed, the Corps estimates that it will spend at least $15 billion to $20 billion cleaning up FUDS properties. At the current funding level, the Corps does not expect to meet the established goal of cleaning up FUDS properties with hazardous, toxic, and radioactive waste by fiscal year 2014, even if work could be deferred on all other projects, such as containerized wastes, unexploded ordnance, and building demolition, for which no goals have been established. In deciding which actions, if any, need to be taken at a potential FUDS property, the Corps generally follows the process established for cleanup actions under CERCLA. The process usually includes the following phases: Preliminary assessment of eligibility--The Corps determines if the property is eligible for the FUDS cleanup program based on whether there are records showing that DOD formerly owned, leased, possessed, or operated the property or facility. The Corps also identifies any potential hazard on the property related to DOD activities. The results of this assessment are detailed in an Inventory Project Report. If the property is eligible but there is no evidence of hazards, the property is categorized as requiring "no further action." Site inspection--The Corps inspects the site to confirm the presence, extent, and source(s) of hazards. Remedial investigation and feasibility study--The Corps evaluates the risk associated with the hazard; determines whether cleanup is needed; and, if so, selects alternative cleanup approaches. Remedial action--The Corps designs the remedy, performs the cleanup, and conducts long-term monitoring if necessary. When all of these steps have been completed for a given project, or if no cleanup is needed, the Corps considers the project to be "response complete." After all projects at a property are designated as response complete, the property can then be closed out. Property closeout may require concurrence by federal or state regulators depending on the type of hazard involved. A flow chart showing the decision process in the preliminary assessment of eligibility phase is shown in figure 1. Upon completion of the preliminary assessment of eligibility phase, a property enters the site inspection phase. The site inspection phase involves a more detailed examination of the property and related records to confirm that a hazard exists and that a cleanup project is required to remove or reduce the hazard to a safe level. After the site inspection phase, the Corps conducts a remedial investigation to assess the risk posed by the hazard and determine if a cleanup is necessary. A feasibility study is then performed to select a cleanup approach. The Corps develops more detailed plans for constructing and carrying out the selected cleanup approach during the remedial design phase. A project next moves into the remedial action phase. The remedial action phase can involve several steps including constructing or installing the selected cleanup approach, operating the approach, and long-term monitoring, if necessary. A flow chart for the site inspection through long-term monitoring process is shown as figure 2. Corps review of potential FUDS properties found that many properties are ineligible because they are still part of an active DOD installation or there are no records available showing that DOD ever owned or controlled the property. Many of the eligible properties did not require cleanup under the FUDS program because the Corps determined that no DOD-related hazards existed. As of October 1, 2000, there were 9,171 properties that had been identified by the Corps, the states, or other parties as potentially eligible for cleanup under the FUDS program. Of these properties, 9,055 had received a preliminary assessment of eligibility, 42 were still being assessed, and 74 properties had not been assessed yet. Based on preliminary assessments, the Corps determined that 6,746 properties were eligible and that 2,309 of the properties--more than a quarter of those assessed--were ineligible. In most cases, properties were ineligible either because the properties were still under DOD control (915) or because there were no records found showing that DOD had ever controlled the property (787). Table 1 shows the reasons that properties were found to be ineligible. Although the Corps initially found that 6,746 properties were eligible for cleanup, the Corps subsequently determined, on the basis of site inspections, that most of these properties do not require cleanup after all. Specifically, the Corps determined that 4,070 properties either do not have any hazards requiring DOD cleanup or else have hazards that do not meet the level requiring cleanup. Hazards requiring cleanup were found on 2,676 of the eligible properties. Figure 3 shows the breakout of properties by eligibility and those where hazards were found. The Corps identified 4,467 distinct projects requiring cleanup at the 2,676 properties that were identified as having hazards needing cleanup. At 25 of these properties, no specific projects have been identified as yet. However, after further investigation the Corps determined that projects identified at 405 properties were ineligible because other outside parties were responsible for contaminating the properties after DOD relinquished control. At another 33 properties, the identified projects were not recommended for further action or were not approved. The reasons for not recommending a project for further action or not approving a project varied. For example, the current landowner might have refused access to the property or might have already addressed the problem. The remaining 2,213 eligible properties had 3,736 projects requiring investigation and cleanup. Of these projects, 284 were not yet scheduled for action, 1,844 projects were under way or planned, and 1,608 were completed. Figure 4 depicts the status of FUDS projects with hazards that required cleanup actions. DOD reports on the status of its various environmental cleanup programs in an annual report to the Congress. However, as of the date of this report, DOD had not yet released its report for fiscal year 2000--the most recently completed fiscal year. According to the Corps' FUDS database, there were 2,382 completed FUDS projects as of the end of fiscal year 2000, or about 53 percent of the nearly 4,500 FUDS projects that required cleanup. The completed projects figure includes those removed from the active inventory either as a result of a study or an administrative action or as the result of an actual cleanup action such as removing toxic wastes or treating contaminated groundwater. In fact, our analysis showed that over 57 percent of the projects reported as complete did not require any actual cleanup and were reported as complete on the basis of a study or an administrative decision. For example, 183 of the 205 unexploded ordnance projects reported as complete were closed based on a study, while only 22 required an actual cleanup phase. Further, the completed figure includes 774 projects that were ineligible for cleanup as part of the FUDS program. The Corps initially thought that these projects were eligible but later determined that they were ineligible because the contamination was caused by other parties after DOD relinquished control of the properties. The Corps made an administrative decision to classify these projects as "response complete" to remove them from its tracking system. If only the number of projects actually believed to require cleanup--3,148--was used as the basis for calculating cleanup progress, then only 1,020 projects or about 32 percent of those requiring cleanup have actually been cleaned up. Further, according to Corps officials, most of the projects cleaned up to date were the least complex and least expensive ones, such as removing underground storage tanks (668 completed projects) or demolishing buildings (198 completed projects). On the other hand, many of the remaining cleanup projects are high cost and technologically difficult. Consequently, cleanup of the approximately 2,100 remaining projects will require at least $13 billion (revised estimates may raise this to $18 billion or more) and take more than 70 years to complete based on current planned funding of about $200 million per year. According to Corps officials, reporting of completed FUDS projects follows DOD's reporting policies for all its environmental cleanup areas such as base closures and active installations. The more than 9,000 properties identified as potential candidates for cleanup as FUDS are distributed across every state, the District of Columbia, and six U.S. territories and possessions. However, there are large concentrations of potential FUDS properties in certain states. For example, 10 states account for almost 52 percent of all the properties, while 27 states have more than 100 properties each and represent over 81 percent of all the properties. Figure 5 shows the geographic distribution of potential FUDS properties. Unexploded ordnance and other explosive wastes were believed to contaminate over 1,600 FUDS properties, of which 753 were associated with former training ranges according to a recent DOD survey. Our review of the over 800 properties not designated as training ranges in DOD's survey results showed that there may be 200 or more additional properties with training ranges that should be included in DOD's range survey results. As discussed previously, most of the 9,171 potential FUDS are either ineligible for the cleanup program (2,309 properties) or do not require any environmental cleanup (4,070 properties) according to assessments made by the Corps; 116 properties were still being reviewed for eligibility and potential hazards. The remaining 2,676 properties were found to have sufficiently high levels of hazards to require cleanup. Of these, 463 properties were excluded because other parties were deemed responsible for the hazard (405 properties), or because no specific project had been identified as yet (25 properties), or because no projects had been identified or approved for further action (33 properties). Table 2 summarizes the eligibility status of the potential FUDS by geographic location. For the remaining 2,213 properties, a total of 3,736 projects were identified and approved for further action. The status of these projects varies from those that were only recently identified and have had no cleanup action taken as yet to those that are completed. Information on individual properties, by state, including the property name, location, congressional district, eligibility, existence of hazards, number of eligible projects, estimated costs incurred to date, and estimated cost to complete cleanup is contained in appendix I. Information on individual projects, by state, including the property name, location, congressional district, project number, type(s) of hazard, risk level, status of cleanup, cleanup remedy used, costs incurred to date, and estimated cost to complete cleanup is contained in appendix II. These appendixes are available only on the Internet at http://www.gao.gov/GAO- 01-1012SP/. In response to the Senate Armed Service's Committee direction to develop more complete information on the estimated cost to conduct environmental cleanup at training ranges, DOD conducted a survey of training ranges at its active, closing, and closed facilities to determine which ones might contain unexploded ordnance. Because DOD does not have a complete inventory of its training ranges, the amount of funding necessary to clean up training ranges has been unreliable and is believed to be significantly understated. DOD's survey results indicated that 753 FUDS properties that might contain unexploded ordnance should be classified as training ranges. For a variety of reasons, over 800 FUDS properties were not included in DOD's survey. Many of these properties were excluded because the Corps had previously decided that, although there might be unexploded ordnance or other explosive wastes present, no further action was needed to address the hazards at these properties. We reviewed basic information about these properties, such as the name of the property and the project description, to see if there could be additional ranges not reported as part of DOD's survey. For example, if a project with ordnance or explosive wastes was located at property that was named "Bombing Range" or "Bombing Target" or was described as an ordnance or explosive wastes cleanup project at a bombing range or bombing target, we concluded that these properties were likely training ranges. We found over 200 properties that could be ranges based on such criteria. DOD's annual report on the status of its environmental restoration activities can provide a misleading picture of FUDS program accomplishments. In its annual report, DOD accounts of completed projects include projects that were determined to be ineligible or that did not involve any actual cleanup effort, as well as projects that required actual cleanup actions to complete. As a result, it appears that after 15 years and expenditures of $2.6 billion, over 50 percent of the FUDS projects have been completed. In reality, only about 32 percent of those projects that required actual cleanup actions have been completed, and those are the cheapest and least technologically challenging. The Corps estimates that the remaining projects will cost over $13 billion and take more than 70 years to complete. The Corps' reporting of completed FUDS projects reflects DOD's reporting policies for all of its environmental cleanup programs, including those at closing bases and active installations. As such, progress on those cleanup programs may not be accurately pictured either. In addition, DOD's range survey did not include all FUDS properties that may contain unexploded ordnance and could be former training ranges. Consequently, DOD's inventory of FUDS training ranges is likely incomplete, and its estimated cost to clean up these ranges is likely understated. The Secretary of Defense should clarify DOD's reporting of the cleanup progress at FUDS and for other DOD cleanup activities by excluding projects from its "completed" list that were closed solely as a result of a study or administrative action and did not require actual cleanup. Such projects should instead be reported as eligible properties where a hazard either was not found or did not require cleanup because it was below the threshold level or because it resulted from another party's actions. Similarly, DOD's annual report should exclude projects from its "completed" list that were determined to be ineligible for cleanup under the FUDS program. To improve the accuracy of DOD's FUDS training range survey results and its estimate of the costs related to environmental cleanup at these ranges, the Secretary of Defense should direct the Corps to review the FUDS properties that were excluded in DOD's initial survey to determine if any are training ranges that should be included in the survey. DOD provided oral comments that generally agreed with the need to clarify reporting on the status of the FUDS program and to review the unexploded ordnance projects that were excluded from its initial training range survey. DOD did not agree with the need to exclude from the list of completed projects those projects closed either as the result of a study or because they were determined to be ineligible. However, DOD did agree that it needs to clarify in future annual reports to the Congress that the restoration efforts on some projects were completed with a study phase and not a cleanup action. DOD did not specifically address how it would report on the ineligible projects that were being reported as completed. DOD also provided a number of technical comments and clarifications related to specific numbers and dollar figures in the report, which we addressed as appropriate in the body of the report. The scope of this review encompassed all potentially eligible properties included in DOD's FUDS inventory as of the end of fiscal year 2000. To obtain information on the number of potential FUDS properties that are eligible and require or have required cleanup and on the geographic distribution, by state, of FUDS properties, we relied primarily on the Corps database of FUDS properties. To obtain information on those FUDS properties that contain or contained ordnance and other explosive wastes, we also relied on the Corps database of FUDS properties and on a database constructed by the Corps to respond to DOD's range survey. We then compared those databases to determine which properties were included as part of the range survey and which were not. For those that were not included, we reviewed the property name and project description information to determine if there were additional properties that could be ranges based on these descriptors. The data in this report represent a static point in time--the end of fiscal year 2000. The Corps database of FUDS properties is used by the Corps on a daily basis to plan, schedule, and monitor the FUDS program, so there are constant changes and updates. Consequently, the numbers presented in this report may vary somewhat from other published sources; however, such variations represent the changing status of individual properties and projects, not material changes in the overall program status. On an overall level and as a measure of the FUDS program's scope and efforts, we believe that these data represent a reasonable picture of the program at the end of fiscal year 2000. The Corps database of FUDS properties incorporates data from a previous Corps effort that did not contain all of the various categories of data in the current database. Consequently, for some properties and projects, particularly those that are no longer active, some information is dated and may not reflect current property conditions. We reviewed the Corps' policies and procedures to verify the reliability of these data and found them to be reasonably accurate for our use. To the extent that we found material errors in the data, we worked with the Corps to correct those errors. We did not, however, attempt to independently assess the reliability of the data. We also acquired and reviewed program documents and interviewed Corps officials from headquarters, division, and district offices to obtain information about the FUDS program. We did not ask state officials to verify or confirm the Corps data for this review. We also contacted DOD and Environmental Protection Agency officials about aspects of the FUDS program. We conducted our review from November 2000 through May 2001 in accordance with generally accepted government auditing standards. As arranged 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 letter. We will then send copies to the Secretary of Defense; the Director, Office of Management and Budget; the appropriate congressional committees; and other interested parties. We will also provide copies to others on request. Appendix I contains summary data on all 9,171 properties identified for potential inclusion in the FUDS cleanup program. The properties are listed by state, the District of Columbia, and six U.S. territories and possessions. For each property, the data include the property name, Corps' property number, the county and congressional district where the property is located, the eligibility status, and whether hazards are present. Also included for eligible properties with hazards are the number of eligible cleanup projects, the actual cleanup-related costs incurred to date, and the estimated cost to complete the cleanup projects. All information is reported as of the end of fiscal year 2000. Appendix I is available only on the Internet at http://www.gao.gov/ GAO-01-1012SP/.

Summary:
The U.S. Army Corps of Engineers estimates that it will spend as much as $20 billion to clean up contamination at thousands of properties that were once owned, leased, or operated by the Defense Department (DOD). These properties contain hazardous, toxic, and radioactive wastes in the soil and water or in containers, such as underground storage tanks. The Corps is responsible for cleaning up the hazards, including removing underground storage tanks. DOD's annual report on its environmental restoration activities can provide a misleading picture of the Corps' accomplishments. DOD's accounts of completed projects include projects that were ineligible or that did not involve any actual cleanup effort. As a result, the impression is that--after 15 years and expenditures of $2.6 billion--more than half of the projects at formerly used defense sites have been completed. In reality, only about 32 percent of those projects that required actual cleanup actions have been completed, and those are the cheapest and least technologically challenging. The Corps estimates that the remaining projects will cost more than $13 billion and take upwards of 70 years to complete. The Corps' reporting of completed projects reflects DOD's reporting policies for all of its environmental cleanup programs, including those at closing bases and active installations. As such, progress on those cleanup programs may not be accurately pictured either. In addition, DOD's range survey did not include all formerly used defense sites properties that may contain unexploded ordnance and could be former training ranges. Consequently, DOD's inventory of training ranges is likely incomplete, and its estimated cost to clean up these ranges is likely understated.