United States Office of Publication 9202.1 -19
Environmental Protection Solid Waste and EPA540-R-93-084
Agency Emergency Response PB94-963217
January 1994
Superfund
v»EPA Superfund Revitalization:
Measures Of Success
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SUPERFUND REVITALIZATION: MEASURES OF SUCCESS
January 7, 1994
Superfund Revitalization Office (5104)
Office of Solid Waste and Emergency Response
U.S. Environmental Protection Agency
U.S. Environment:: T.:::-,i;on Agency
Region 5, Library (PL-12J)
77 West Jackson Boulevard, 12th Floor
Chicago, IL 60604-3590
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NOTICE
The policies, procedures and conclusions described in this document are intended
solely for informational purposes. They are not intended, and can not be relied upon, to
create any rights, substantive or procedural, enforceable by any party in litigation with
the United States. The Agency reserves the right to act at variance with these polices
and procedures and to change them at any time without public notice.
Additional copies of this document may be obtained from the National Technical
Information Service (NTIS) at:
NTIS
5285 Port Royal Road
Springfield, VA 22161
(703) 487-4650
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TABLE OF CONTENTS
EXECUTIVE SUMMARY
CHAPTER 1
INTRODUCTION 1
1.1 LIMITATIONS OF THE ANALYSIS 3
1.2 SCOPE OF THE REPORT 4
1.3 REPORT ORGANIZATION 5
CHAPTER 2
VALUING SUPERFUND CLEANUP 6
2.1 CONSTRUCTION COMPLETIONS 6
2.2 CHANGES IN PROPERTY VALUE 10
CHAPTERS
ACCELERATING SUPERFUND RESPONSE 20
3.1 SACM INITIATIVES 20
3.2 PRESUMPTIVE REMEDIES 24
3.3 QUICK TURNAROUND METHOD (QTM)
ANALYTICAL SERVICES 30
3.4 DE MINIMIS SETTLEMENTS 33
CHAPTER 4
COMMUNICATION INITIATIVES 37
4.1 COMMUNICATIONS WITH STATES 37
4.2 COMMUNICATION WITH THE PUBLIC 41
4.3 COMPENDIUM OF GOOD IDEAS 44
4.4 COMMUNICATIONS WITH THE PRIVATE SECTOR 44
CHAPTERS
CONTRACT MANAGEMENT 46
5.1 REDUCTION IN PROGRAM MANAGEMENT COSTS 47
5.2 STREAMLINING THE AWARD FEE PROCESS 49
5.3 STRENGTHENING ARCS CONTRACT CONTROLS 51
5.4 INSTITUTION OF SENIOR MANAGEMENT
ACCOUNTABILITY AND OVERSIGHT 53
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EXECUTIVE SUMMARY
The Superfund program has undertaken thousands of response actions that have
eliminated or reduced the threats of hazardous waste to human health and the
environment. More than 2,900 hazardous waste sites have been successfully addressed
under the Superfund removal program, eliminating leaking abandoned drums, stabilizing
sites, and responding to emergency releases of hazardous substances. The program has
played a leading role in developing and presenting courses in hazardous material
response, training local HAZMAT teams as first responders, and generally providing an
expertise and response capability that ensures rapid protection anywhere in the country
for human health and the environment from releases of hazardous substances.
The site assessment program can point to 35,320 sites that have undergone
preliminary assessments and 16,107 sites with completed site inspections. The remedial
pipeline is full of hazardous waste sites at various stages of remediation. Over the past
12 years, EPA has evolved a process for addressing complex remedial challenges, while
considering the concerns of the local community, the affected State, the responsible
parties, and the environmental community.
In its site cleanup work, EPA has handled enough hazardous soil and solids to
cover more than 680 football fields to a depth of 10 feet; handled more than four gallons
of contaminated liquids for each man, woman, and child in the country; and treated
more than 25 gallons of contaminated groundwater for each U.S. resident1.
But there is always room for improvement. Actions to reduce risks can occur
faster; decisions can be more equitable; contract management can be more efficient. On
June 19, 1991, the EPA Administrator charged the Office of Solid Waste and Emergency
Response (OSWER) with the task of addressing two fundamental questions: (1) What
are EPA's options for accelerating the pace of cleanup at the nation's Superfund sites?,
and (2) Does the Superfund program use realistic assumptions when evaluating and
managing the risks at a Superfund site? The OSWER Deputy Assistant Administrator
chaired a 30-day Task Force to address these issues. The 30-day Study produced a series
of recommendations for improving the Superfund program. Many of these
recommendations have been implemented, and there is a general feeling within the
Superfund program that fundamental changes are occurring in how the program does
business.
Concurrent with the 30-day Task Force, another group was examining the
Alternative Remedial Contracts Strategy (ARCS) contracts. This group, the
1 EPA Superfund Progress, Spring 1992, p.9.
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Administrator's Task Force on ARCS, made 32 recommendations on how to improve the
management of these contracts. Almost all of these recommendations have now been
implemented.
On October 2, 1991, the Administrator announced a program to revitalize the
Superfund program based on the recommendations of the 30-day Task Force and the
ARCS Task Force. This revitalization effort focused on the streamlining of Superfund
activities to ensure that risks are addressed quickly and effectively. Areas addressed by
revitalization include completions, accelerated cleanups, contracts management and
administration, and outreach to various Superfund stakeholders. This report summarizes
the status of several of the initiatives undertaken as part of the revitalization effort, and
to the extent possible, estimates the benefits that may be attributable to those initiatives.
CONSTRUCTION COMPLETIONS
By September 30, 1993, EPA had completed all construction activities at 217 NPL
sites, and was well on its way to achieving its FY94 goal of 265 NPL sites with completed
construction. Progress is being made, risks are being reduced, and Superfund monies
and authorities are contributing significantly to the welfare of our nation.
A Superfund remediation generates benefits for individuals located on or near the
contaminated site, and for society in general. The benefits may take the form of reduced
health risks to individuals who live or work on or near the contaminated site, increased
property values for owners of the site and for those owners whose properties are
adjacent to or near the site. In addition, society in general benefits from a Superfund
cleanup because persons living far from the site take pleasure in knowing that the site is
not contaminated, and that drinking water is clean and safe wherever they may go.
About 35 percent of the sites with completed construction through FY92 have
returned to some beneficial use, and more than two-thirds of the 35 percent are currently
used in some commercial or industrial enterprise. Industrial operations include
electronic components manufacturing, production of specialty chemicals, pesticide and
fertilizer formulation, wood treating, and nail coating. Other light industrial operations
include various types of manufacturing, metal working operations, a warehouse facility,
and storage areas. Commercial operations include a restaurant, a commercial laundry,
an auto repair garage, and a plant nursery.
Almost 12 percent of the 35 percent are being used or are in the planning stage,
for recreational use. Residential use is occurring at two sites. Other beneficial uses
include State and County Offices, airports, an active landfill, and grazing land for cattle.
See Exhibit ES-1 for a full listing of beneficial uses by site and category. Exhibit ES-2
summarizes the current status of sites with construction completed by FY92. With
construction at the site complete, many of the sites experienced some increases in
ES-iv
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property value. A preliminary estimate of the change in property value is $39 million,
excluding the effect on adjacent and surrounding properties.
SACM INITIATIVES
The Superfund Accelerated Cleanup Model (SACM) approach to cleaning up
hazardous waste sites was launched by EPA on March 1, 1992, with the publication of
SUPERFUND ACCELERATED CLEANUP MODEL (SACMH: THE NEW
SUPERFUND PARADIGM. The document acknowledged that although the program
had evolved since the 1980 enactment of the Comprehensive Environmental Response,
Compensation, and Liability Act, it often developed in response to conflicting
expectations and mutually exclusive demands. The result was a patch-work of solutions
that still left the program open to a multitude of critics who claimed, among other things,
that the program was too slow or too costly. EPA believed that SACM would respond to
these criticisms.
SACM combines Early Actions, such as removing hazardous wastes or
contaminated materials, with on-going studies so that immediate public health and
environmental threats are taken care of while long-term cleanups are being planned.
Early actions may eliminate most of the risks posed to people by hazardous waste sites.
While these actions are underway, a Regional Decision Team (RDT) of Superfund site
managers, risk assessors, community relations coordinators, Regional counsel and other
experts who monitor site studies to determine what additional short-term and/or long-
term actions are required. Restoration of ground water is an example of long-term
action.
During 1992 and in 1993, EPA initiated Regional pilots to demonstrate the
implementation of SACM, as well as to document the benefits of SACM. EPA initiated
15 Regional pilots dealing with the acceleration of the Superfund cleanup process and
enhancement of equity in the process. Now roughly half of these pilots are complete.
Broad benefits seen from the pilots include the implementation of initiatives such as
SACM, presumptive remedies, integrated (i.e., more efficient) assessments, and early
actions.
On October 1, 1993, the Office Directors of the Office of Emergency and
Remedial Response and the Office of Waste Programs Enforcement stated in a joint
memorandum that a key priority for fiscal year 1994 will be moving SACM from a pilot
approach to "business as usual." EPA regional offices are now working toward this end.
PRESUMPTIVE REMEDIES
Presumptive remedies are preferred technologies for common categories of sites,
based on historical patterns of remedy selection and EPA's scientific and engineering
evaluation of performance data on technology implementation. The objective of the
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presumptive remedy initiative is to use the program's past experience to streamline site
investigation and to speed up selection and implementation of cleanup actions. EPA has
developed a series of directives on presumptive remedies for various types of sites. In
particular, presumptive remedy directives have been developed, or are being developed,
for the following site categories: municipal landfills, sites with soil contaminated with
volatile organic chemicals (VOCs), wood treatment sites, coal tar sites, sites
contaminated with PCBs, grain storage sites, and sites with groundwater contaminated .
Presumptive remedies draw upon past Superfund experience to streamline the
response process, without discouraging the use of innovative technologies or non-
standard approaches to sites with special characteristics. Instead of evaluating more than
a dozen potential remedies at every site, two or three remedies are identified in a
guidance document as having a high probability of success, based on EPA's historical
experience. Based on the "presumption" that one of these remedies will prove to be
ideal for a particular site, the data collection efforts and risk assessments can be better
focused, and feasibility studies can be completed faster and at a lower cost. Further,
Agency positions can be shared with other stakeholders at an early stage, thus reducing
the likelihood that serious concerns about remedial action will not be raised at the last
minute.
In developing presumptive remedy guidance, EPA has selected site categories
whose contamination is usually addressed by a small number of remedies, and where
there are a significant number of these types of sites that would benefit from
standardized approaches. EPA has completed the first presumptive remedy guidances
for VOCs in soil and municipal landfills. The other guidances are scheduled for
completion in 1994. When the guidances are completed, EPA will conduct several
demonstration projects per site category to help evaluate the overall benefits of these
guidance to the Superfund program.
Potential Benefits of the Presumptive Remedy Initiative
Currently, EPA estimates that as many as 600 future and 600 current NPL sites
may benefit from the use of presumptive remedies. The derivation of this estimate was
based on the assumption that future NPL sites will have a similar profile to historical
NPL sites.
In general, use of presumptive remedies is expected to result in cost and time
savings during the remedial investigation and remedy selection stages of the response.
Standardization of these processes through presumptive remedy guidance should also
increase consistency in remedial investigations, feasibility studies, remedy selections, and
remedial designs.
EPA estimates that response costs and time during the RI/FS stage of the
response may be reduced between 8 and 16 percent under the presumptive remedy
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initiative. Assuming that about 600 sites that are currently listed on the NPL could
benefit from the use of presumptive remedies, and the savings could reach $50,000 to
$125,000 per site during the RI/FS stage, the total savings could range from $30 to $750
million. It does not acknowledge any savings attributable to streamlined negotiations
with responsible parties and the other stakeholders at the site about what to expect from
the remediation. This estimate also does not account for cost savings from fewer
decision errors and voluntary cleanups.
Early empirical evidence indicates that the presumptive remedy initiative may
significantly reduce traditional response times. Preliminary information on the Region 6
pilots indicate that presumptive remedies were one factor that contributed to a 65 to 75
percent reduction in the duration of RI/FS activities. With additional savings due to
shortening PRP negotiations for conducting the RA, Region 6 projects an overall time
savings of about 60 to 65 percent, reducing the overall length of time to reach the RA
stage from 8 to 3 years.
Preliminary information on a Region 1 municipal landfill presumptive remedy
pilot also shows significant savings. By relying on historical groundwater data and basing
its actions on the presumptive remedy for a municipal landfill (i.e., a cap), the
completion of the RI/FS for the site is estimated to be completed in about two years vs.
the normal period of 41 months, with construction of the cap to be completed in a little
over two years after initiation of the remedial process. Traditionally, EPA has found
that it takes 41 months from the completion of the Record of Decision (ROD) to
completion of the remedial design and 55 months to complete the construction of the
remedy for all types of sites.
QUICK TURNAROUND METHOD (QTM) ANALYTICAL SERVICES
In 1980, the same year that CERCLA was signed into law, EPA initiated the
Contract Laboratory Program (CLP). This established on a competitive basis, a
community of contract laboratories which were to provide large volume, standardized
analyses in a cost-effective manner. As the Superfund program grew, the need for the
analytical services provided through the CLP also grew. The capacity of the participating
laboratories to analyze both organic and inorganic samples increased from about 5,000
samples annually to more than 78,000 samples annually in 1991.
During this period of explosive growth, problems were identified and attempts
were made to resolve them. In March 1991, the Deputy Administrator requested the
formation of a task force to review the CLP program. The task force reported that the
most frequent complaint from regional officials involved excessive turn-around-times.
The Regions reported that by the time the analytical results were reported by the
laboratory, screened for contract compliance, reviewed and validated by the Region, and
reported to the RPM, from three days to eight weeks or longer had passed.
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The Quick Turnaround Method (QTM) analytical service was developed to
provide a faster and more efficient process for analyzing chemical data at a site. There
is a need to collect chemical samples at several stages in the Superfund response process.
In some situations, the need to obtain the analytical results quickly is critical because the
data are essential to decisions that have to be made quickly. The QTM analytical
service offered through the CLP can be used to provide analytical data on 81 organic
target compounds within 48 hours. The traditional time frames for confirmatory organic
determinations under CLP are 14 days and 35 days.
QTM is designed to produce data of known and documented quality that can be
used for screening, monitoring, and other hazardous waste site assessments. It provides
rapid turnaround for samples of water, soil/sediment, and waste. QTM is most
appropriate for use in situations where site contaminants are known or highly suspected
from previous evaluations, and when analytical data are needed rapidly. Analytical
results through QTM are much less expensive than traditional CLP data. As a result,
the use of QTM in combination with CLP confirmatory analyses can be highly cost
effective. Comparisons between QTM and CLP confirmatory results have shown the
QTM data to be generally reliable.
QTM became broadly available in April 1992. Currently three laboratories are
validated to provide QTM service through the CLP. Tentative long-term plans include
expanding QTM to address metals.
Applications for QTM arise in site inspections, site characterization, treatability
studies, engineering designs, and during actual response actions at a site. One
particularly important QTM application is in site characterization. QTM can enhance
site characterization efficiency and cost effectiveness by increasing the number of "hits" in
the more rigorous "full organics" CLP analytical methods. By locating high concentration
areas using QTM results, samples submitted for confirmatory CLP analysis can be
selected carefully. For example, samples that will affect Hazard Ranking System (HRS)
scores could be selected from a larger number of samples analyzed through the QTM
service. Results obtained using QTM can be used to identify the specific
locations/samples where confirmation analyses are needed. The per-sample cost for the
confirmatory CLP analysis is around $1,100, compared to around $300 for the QTM. By
combining QTM with the CLP's Routine Analytical Services for the confirmatory
analyses, a savings of approximately $150,000 to $200,000 per site is feasible depending
on the number of samples required for site characterization.
DE MINIMIS SETTLEMENTS
Small waste contributors often complain that they are not able to settle with EPA
until late in the remedy process, and settlement is often dependent on volumetric
information that is not comprehensive at many sites. Moreover, many small waste
contributors, who often are small businesses, complain that they spend an inordinate
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amount of time acquiring information about the Superfund process and understanding
the terms of a proposed settlement.
Part of the Superfund revitalization effort has been to place greater emphasis on
reaching equitable settlements with individual responsible parties as early in the process
as possible. To this end, EPA has reemphasized the use of de minimis settlements.
Section 122(g) of CERCLA allows the Agency to enter into de minimis settlements
whenever practicable and in the public interest. Two groups of parties are eligible for
these settlements: de minimis waste contributors and de minimis landowners. Under a
de minimis waste contributor settlement, parties responsible for only small amounts of
hazardous substances at a site can be released from further liability after paying an
agreed amount to EPA Most of the de minimis settlements to date have been with
waste contributors.
Benefits of De Minimis Settlements
Early waste contributor de minimis settlements promote efficient case load
management at sites where there are wastes from multiple generators. Eliminating de
minimis parties early in the response process reduces the number of parties with which
EPA and other PRPs must negotiate with for implementation of the selection of the site
remedy. Early settlements may also provide the Agency with reimbursement of costs
already incurred and may provide funds for future site cleanup. Collecting funds early in
the response process benefits the Agency and all PRPs. Amounts received from de
minimis settlements reduce the amount non-de minimis parties would be liable for and a
portion of that payment may be placed in a trust fund to defray future PRP cleanup
costs. The availability of funds may also facilitate a global settlement, thus expediting
the cleanup process and benefiting all parties and the public.
EPA Region 3 recently completed a pilot at the Tonolli Corporation site that
involved de minimis settlements. Tonolli operated a secondary lead smelter and battery
recycling facility between August 1974 and January 1986. Batteries were stripped for
lead content. Contaminants identified at the site included cadmium, chromium, copper,
lead, and arsenic. EPA Region 3 estimates that the Agency's cost, including contractor
and Agency staff time, for settlements with about 200 de minimis parties was $825,000.
Most of the expenditures involved review and compilation of the waste-in information.
These efforts, however, have resulted in collection of more than $3.06 million as of June
1, 1993. Further payments resulting from the settlements are expected. For this site,
there were two groups of settlements. In the first group, 170 parties signed and 161 of
these have paid. The total settlement was $3,491,233. In the second group, 33 parties
signed settlements totaling $542,124.
Early settlements with de minimis parties will generally entail lower transaction
costs for the settling parties compared to settlements that occur during the RD/RA stage
of the response, because negotiations focus solely on the party's waste contributions and
ES-ix
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payments, and not on the performance of work. Although de minimis settlements
accomplished to date are considered costly to the Agency, the benefits to settling parties,
including some reductions in transaction costs and increased equity in the Superfund
program, may justify the expenditure. It is likely that the total benefits of de minimis
settlements (both in terms of efficiency and equity) will continue to increase, particularly
as the Agency becomes more proficient in doing de minimis settlements.
EPA issued guidelines for streamlining the de minimis settlement process on July
30, 1993. These guidelines establish the minimal level of information necessary before a
Region can consider a de minimis settlement, provide a methodology to construct
payment matrices in appropriate circumstances, and encourage Regions to take a more
active role in facilitating the settlement. Regions are no longer required to complete a
waste-in list prior to offering a de minimis settlement which should allow many more
PRPs to qualify for de minimis settlements. To emphasize the Agency's commitment to
these settlements, EPA has targeted 35 settlements for the 1994 fiscal year.
COMMUNICATIONS WITH STATES
States are facing many of the same challenges currently facing the Superfund
program. The Federal and State governments are partners in meeting environmental
challenges. To this end, EPA management and staff have met with State representatives
on several different occasions this past year. Issues of discussion included the State role
in Superfund revitalization and State experiences in enforcement and community
relations, as well as technical issues (e.g., soil cleanup levels), program management
issues (e.g., risk management and future land use), and procedural issues. These
meetings have been both informative and extremely helpful.
Since April 1992, EPA has held seven State forums in cooperation with
ASTSWMO to exchange information on Superfund management issues. Participants
have included EPA headquarters and Regional staff, State agency representatives,
Department of Energy staff, and staff from the Agency of Toxic Substances and Disease
Registry (ATSDR). The topics covered were diverse and timely, including consideration
of future land use, voluntary cleanups, clean-up standards, communications, and cost
sharing. The format of these meetings included presentations, questions and answers,
and open discussion on topics.
In addition to the EPA/State meetings, there have been other opportunities for
EPA to interact with States, including meetings of the State/EPA Superfund Policy
Forum. EPA is also working with ASTSWMO on the non-NPL Cleanups Study. This
study will collect data on State non-NPL cleanups in order to get a complete picture of
the national cleanup picture. To accomplish this, ASTSWMO sent out a survey form to
all of the States and territories requesting data on all State non-NPL cleanups to compile
a national data basis.
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Benefits from Improved Communication
The purpose of the State/EPA meetings is to ensure that States have an
opportunity to express their views and share their experiences with EPA. Through these
meetings, States have an opportunity to share their successes and inform others facing
similar challenges about lessons learned. Also, because States are co-implementers of
Superfund with EPA, the forums provide the States with an important opportunity to
become familiar with EPA policies regarding Superfund implementation.
States welcome the opportunity to share information with EPA. Through
EPA/State interaction, States can alert EPA to concerns they may have with particular
program management approaches.
The role that States have played in the Superfund response process has evolved
over time; their role in site cleanups has increased as the Superfund program has
developed. States and EPA have found that the hazardous waste cleanup universe is
bigger than originally anticipated. Many States have developed site cleanup programs
that complement the Federal Superfund program. Some States are developing their own
funding schemes, liability approaches, and standards. At this juncture, involving the
States in managing Superfund is most important to ensure national consistency.
COMMUNICATION WITH THE PUBLIC
EPA has held several meetings to solicit input from the public on how the Agency
might improve the Superfund response process and communication with the public. The
first of these meetings, held in June 1992, was in Washington, DC. Other meetings have
been held in Chicago, San Francisco, and Dallas to facilitate participation by interested
parties. The purpose of the public forums is to provide an opportunity for people with
different perspectives to express their views. No effort is made to develop consensus or
to prioritize concerns or solutions suggested during the meetings. However, after each
meeting, EPA has developed a set of follow-up actions on major suggestions made by
meeting participants.
Benefits of Public Communication
The meetings with the public have provided a mechanism for EPA outreach
concerning Superfund. The meetings have provided an opportunity for diverse
stakeholders to express their opinions. By participating in the discussions, public
participants gain an understanding of the complexities of the issues facing the Superfund
program. The meetings afford EPA an opportunity to gain a better appreciation for the
concerns and motivations of the public on Superfund issues.
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CONTRACTS MANAGEMENT
In the past two years, EPA has made significant strides in improving the contract
management of its Alternative Remedial Contracting Strategy (ARCS) contracts. Four
areas of success stand out:
• Reduction in Program Management Costs;
• Streamlining the Award Fee Process;
• Strengthening ARCS Contract Controls; and
• Increased Oversight and Senior Management Accountability.
EPA has succeeded in lowering its ARCS contractor program management costs
from 20% of total contract costs to 12%. This reduction is due, in part, to the cost
control mechanisms, instituted as a result of the ARCS Task Force recommendations.
EPA also took steps to streamline the Award Fee process through such changes as
limiting contractor's self-evaluations and establishing thresholds for evaluating ARCS
Work Assignments.
The ARCS Task Force made recommendations that reached beyond the ARCS
contracts. One of these was a recommendation in the area of contract controls. The
Task Force recommended that Independent Government Cost Estimates be performed
for each new work assignment. The usage of estimates on all Superfund contracts is an
effective tool for understanding and negotiating work assignment costs. Another area
that has impacted Superfund contracts is the development of the ARCS Council and
Regional Management Teams. Communications about effective contract controls and
contract management vulnerabilities are expedited through the Council and the Teams.
In addition, the Regional management teams serves as the forum for contract
management improvements from the "front line", embodying the Total Quality
Management approach to management.
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Exhibit ES-1 . NPL Construction Completion Sites in Reuse by Category/Site Type
Location
Category/Site Type
Urban industrial
Other Urban
(Nonindustrial)
Suburban Industrial
Suburban Hi-Tech
Electronics
Manufacturing
Suburban Residential
Sites
Medium Town,
Industrial
Medium Town
(Nonindustrial)
Medium Town
Landfill
Small Town
Rural Industrial
Other Rural
(Nonindustrial)
Remote
Total
Number of
Sites in
Category
14
8
9
9
5
8
14
12
10
8
22
5
124
Number of
Sites in
Reuse
4
5
7 *
9
4
3 *
7
1
4
1
6 *
1
52
Types of Reuse
Manufacturing, commercial
State office, active landfill
Commercial, manufacturing,
metal working, chemical
research, warehouse, auto-
garage
Electronics manufacturing
Residential, plant nursery,
park
Manufacturing, commercial
Commercial, manufacturing,
sports facility, golf course
Park
Metal coating, wood
treatment
Manufacturing polyester resin
Manufacturing, seasonal
recreation area, future
recreational lake, sand
mining, private garage
Cattle grazing
Includes one site where studies conducted after the NPL listing determined that
no clean-up activities were necessary.
ES-xiii
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CHAPTER 1
INTRODUCTION
In response to such dramatic episodes as Love Canal, Congress passed the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(CERCLA). Its primary purpose was to establish a framework for responding to and
remediating contamination caused by the release of hazardous substances, pollutants, and
contaminants into the environment. CERCLA attempted to fashion a national
hazardous waste response program after the highly successful hazardous substance and
oil response program authorized under the Clean Water Act (CWA). This earlier
response program was designed to enable the Federal government to respond effectively
and efficiently to emergency releases of hazardous substances and oil into U.S. navigable
waters. Responsibility for this early response program rested primarily with the U.S.
Coast Guard and the U.S. Environmental Protection Agency (EPA), and roles and
responsibilities were delineated in the National Oil and Hazardous Substances Pollution
Contingency Plan (NCP; 40 CFR Part 300). CERCLA directed the EPA Administrator
to amend the NCP to reflect the response procedures, roles, and responsibilities of an
expanded hazardous substance response program under CERCLA.
Pursuant to the provisions in CERCLA, Superfund responses were divided into
two discrete groups: removal actions and remedial actions. The Superfund removal
program had primary responsibility for responding quickly to releases of hazardous
substances into all environmental media. The Superfund remedial program was designed
to complement and parallel the already successful emergency response program. The
remedial program was designed to address releases of hazardous substances, pollutants,
and contaminants into all environmental media, and to address specifically the complex,
long-term hazards to human health and the environment posed by sites with the worst
contamination.
Although both the removal and remedial response programs provided for the
responsible party to pay for the cleanup to the greatest extent possible, the remedial
program was purposely designed to cautiously tackle difficult cleanup problems. Because
the remedial response was likely to cost millions of dollars and involve many different
responsible parties, the program evolved in such a manner to ensure that, whenever
possible, the risks were properly characterized, responsibilities for response costs were
appropriately assigned, and consensus on the remedy was reached between EPA, and the
local community. Thus, the process was specified in such a way to facilitate and
encourage State and local government, as well as community, participation in the remedy
selection process.
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In 1986, Congress enacted the Superfund Amendments and Reauthorization Act
(SARA). SARA reauthorized CERCLA and increased the size of the Superfund to $8.5
billion, a clear acknowledgement that the scope of the problem facing the Agency was
much larger than originally anticipated. Today, more than 37,900 sites have been
identified around the nation with hazardous waste contamination; more than 35,320 sites
have undergone preliminary assessments and 16,107 sites have completed site
inspections. Of these, nearly 1,300 sites have been listed on the National Priorities List
(NPL), the Federal government's list of the "worst" sites in the nation.
However, not only was the number of hazardous waste sites significantly greater
than first envisioned, the complexity and challenge of the cleanup had been grossly
underestimated. Many of the contamination problems at these Superfund sites had
never before been experienced. Sites were discovered with complex mixtures of
hazardous substances that were reactive and were leaching into nearby surface water or
groundwater. Drinking water supplies were contaminated, and potentially explosive
situations existed. Conventional and well-tested control technologies often did not exist
to address many of the problems found at these sites. Only now, after more than a
decade of experience, is EPA able to generalize about likely remedies for different types
of contamination problems.
Because of the size and complexity of the pollution problems at many abandoned
hazardous waste sites, response under CERCLA's remedial program was generally long-
term and expensive, and the need to ensure proper characterization of the risks and
documentation of the expenditures tended to slow down the response process and
increase the expense even more than would otherwise be the case. As a result, the
public perception was that the Superfund response program was ineffective, inefficient,
and inequitable.
Unfortunately, such a perception completely overlooks the fact that the Superfund
program has successfully addressed more than 2,900 hazardous waste sites in the removal
program, eliminating leaking abandoned drums, stabilizing sites, and responding to
emergency releases of hazardous substances. The program has played a leading role in
developing and presenting courses in hazardous material response, training local
HAZMAT teams as first responders, and generally providing an expertise and response
capability that ensures a basic level of protection for human health and the environment
from releases of hazardous substances.
The site assessment program can point to 35,320 sites that have undergone
preliminary assessments and 16,107 sites with completed site inspections. The remedial
pipeline is full of hazardous waste sites at various stages of remediation. Over the past
12 years, EPA has evolved a process for addressing complex remedial challenges, while
considering the concerns of the local community and the affected State, the responsible
parties, and the environmental community.
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In its site cleanup work, EPA has handled enough hazardous soil and solids to
cover more than 680 football fields to a depth of 10 feet; handled more than four gallons
of contaminated liquids for each man, woman, and child in the country; and treated
more than 25 gallons of contaminated groundwater for each U.S. resident2.
But there is room for improvement. Actions to reduce risks can occur faster;
decisions can be more equitable; contract management can be more efficient. On June
19, 1991, the EPA Administrator charged the Office of Solid Waste and Emergency
Response (OSWER) with the task of addressing two fundamental questions: (1) What
are EPA's options for accelerating the pace of cleanup at the nation's Superfund sites?,
and (2) Does the Superfund program use realistic assumptions when evaluating and
managing the risks at a Superfund site? The OSWER Assistant Administrator chaired a
30-day Task Force to address these issues. The 30-day Study produced a series of
recommendations for improving the Superfund program. Many of these
recommendations have been implemented, at least on a pilot scale, and there is a
general feeling within the Superfund program that fundamental changes are occurring in
how the program does business.
Concurrent with the 30-day study, EPA was examining its management of the
Alternative Remedial Contracting Strategy (ARCS) contracts. EPA's Administrator
Reilly commissioned a study to look at the ARCS contracts after some negative publicity
regarding the high costs associated with administration of the contracts. On October 2,
1991, the Administrator announced a program to revitalize the Superfund program. This
revitalization encompassed the results of the 30-day study and the ARCS Task Force.
The objective of the revitalization effort was to refocus and streamline activities to
ensure that risks are addressed quickly and effectively. This revitalization effort
addressed areas within the Superfund program that include site completions, accelerated
cleanups, contracts management and administration, and risk assessment/risk
management.
Some of the initiatives have been under development for a while, and the
Administrator's announcement simply spurred on their implementation; others are a
direct result of the intensive scrutiny to which the program has been subject. The
success of the various initiatives is the subject of this report.
1.1 LIMITATIONS OF THE ANALYSIS
Our ability to accurately estimate the full effects of the revitalization initiatives is
made more difficult by several significant factors. First, the Superfund program is
dynamic, constantly responding to new information, learning from past mistakes and
improving on past successes. In reality, there is no such thing as a static "snapshot" of
2 EPA Superfund Progress, Spring 1992, p.9.
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the way the program operated prior to October 1991; the program was very different in
1982, 1984, 1986, 1988, and 1990. Some of the differences are attributable to natural
evolution of the program; other differences are attributed to the changing focus of EPA
management (e.g., "enforcement first", "worst sites first").
Second, once a site is stabilized and immediate threats have been addressed, the
nature and extent of contamination at a Superfund site must be fully evaluated. EPA
and the public have climbed a steep learning curve; some of the benefits of past studies
and evaluations are being reaped now. It may be that the spurt in construction
completions is due to modifications of our targets and goals and some of the credit
belongs to the renewed emphasis on completions. Also some credit may belong to the
bulge in the remediation pipeline, reflecting the many years of background work, study,
and site development efforts.
Third, some of the initiatives that evolved from the 30-day Study were under
development, and their development was accelerated due to the revitalization effort.
Other initiatives are newly developed and have been tested in the field for only a limited
time, making an evaluation of their success problematic. Pilots have been initiated in
different Regions to test different aspects of some of the innovations, and data from
these pilots are critical input to this report, but each of the pilots has a uniqueness that
makes generalization of results difficult.
12 SCOPE OF THE REPORT
There are three primary offices within OSWER currently responsible for
implementing portions of CERCLA and the revitalization initiatives: the Office of
Emergency and Remedial Response (OERR); the Office of Waste Programs
Enforcement; and the Superfund Revitalization Office. In addition, the EPA Office of
Enforcement (OE), the Office of Policy, Planning, and Evaluation, and the Office of
Acquisition Management (OAM) have played critical roles in formulating and
implementing the revitalization initiatives. Each of these offices has helped to identify,
test, and implement certain aspects of the initiatives analyzed in this report. All three
OSWER offices, OE, OPPE, and OAM are actively pursuing change and aggressively
identifying ways of improving the effectiveness, efficiency, and perceived equity of the
Superfund program. This report focuses primarily on four areas of change and renewed
emphasis within the Superfund program: Construction Completions; Accelerated
Cleanup; Contract Management; and Improved Information Exchange.
There are other initiatives, however, that are integral parts of the Superfund
revitalization effort, but that are not addressed in this report because the initiatives are
still under development or beyond the scope of this report. Nonetheless, these
initiatives are believed to significantly contribute to the improvements in program
management and implementation. Issues such as "how clean is clean?" are addressed at
every site and have significant equity and efficiency implications. The selection of final
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remediation levels at a site hinges directly on the assumptions made about future land
use -- residential, industrial - and site access. How much importance should be placed on
current land use or historical land use? How flexible should EPA be in establishing soil
cleanup levels? Local governments often have the best understanding of the value of
specific parcels of land in a community, but they often do not have the advantage of a
national perspective in selecting the optimal remedy for a local site.
1J REPORT ORGANIZATION
The remainder of the report is divided into four chapters, reflecting the major
revitalization initiatives:
o Chapter 2 describes the construction completion initiatives and its
accomplishments to date. The chapter also presents results of a study of
changes in property values attributable to Superfund response actions.
o Chapter 3 discusses the Superfund program's efforts to accelerate cleanup
and risk reduction, and estimates the cost and time savings that may be
attributable to use of presumptive remedies, accelerated sampling data
analysis methods, and de minimis settlements.
o Chapter 4 describes the latest efforts by EPA to improve communication
and information exchange among the stakeholders at Superfund sites,
explaining why such initiatives are fundamental to the program's success.
o Chapter 5 discusses improvements to the management of the ARCS
program; the reduction of program management costs, the streamlining of
the Award Fee process, the strengthening of ARCS contract controls and
the increase in oversight and senior management accountability.
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CHAPTER 2
BENEFITS OF SUPERFUND CLEANUP
Millions of dollars are being spent each year on Federal responses to releases of
hazardous substances throughout the nation. This chapter attempts to measure how well
EPA is accomplishing that goal in terms of reduced risk to the public and increased
property values after a site has been cleaned up .
To date, Superfund monies and/or authority have been used to reduce or
eliminate immediate threats to people and the environment at more than 2,500 sites
around the nation; more than 500 of these "early actions" have occurred at NPL sites.
Risks posed by exposure to hazardous waste have been reduced for more than 24 million
people who live within four miles of these 500 NPL sites, including almost one million
people who were at risk to threats posed by direct contact with hazardous waste.3
The remainder of this chapter describes EPA's success in accelerating cleanup at
NPL sites throughout the nation, and estimates the benefits of those cleanups in terms of
increased property value.
2.1 CONSTRUCTION COMPLETIONS
By September 30, 1993, EPA had completed all construction activities at 217 NPL
sites, and is well on its way to achieving its FY94 goal of 265 NPL sites with completed
construction. Progress is being made, risks are being reduced, and Superfund monies
and authorities are contributing significantly to the welfare of our nation. Some
examples of Superfund's contribution to our nation's welfare are presented below.
For at least one locale, there is a significant regional benefit from Superfund
cleanup activities. There are 23 NPL sites in the South Bay area of San Francisco in
Santa Clara County, California; all of these sites, have contaminated groundwater.
Twelve sites have remedial construction in place and operational, and are among the
sites designated "construction complete." Six of these sites are grouped close enough
together to cause a significant cumulative effect to the regional water supply.
Facilities at these six sites have used a variety of toxic chemicals to process semi-
conductors, and other high-technology parts. Chlorinated organic solvents and other
organic compounds are the primary cause of contamination in the soil and groundwater.
The San Francisco Bay Regional Water Quality Control Board is overseeing the
3 "Superfund: Reporting on Cleanup Activities Through Environmental Indicators," FY91
Update, EPA 9200.5-07A, p.l.
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groundwater cleanup. Both the EPA and the California Department of Health Services
provide support to the Regional Board during the investigation and cleanup processes.
The sites are all located within the Santa Clara Valley Groundwater Basin, which
provides up to 50 percent of the municipal drinking water for over 1.4 million residents
of Santa Clara Valley. The general groundwater gradient within the county is northward
toward San Francisco Bay. The proximity of tidally influenced streams and the bay
punctuates the importance of the aquifer to the residents in the area as a source of
drinking water.
Within a three mile radius of these groupings of sites, nearly 700,000 people rely
on local drinking water sources. More than 89,000 housing units, valued at more than
$24 billion, are potentially affected by the remediation efforts. Although the affected
population estimates presented above represent only those persons living within a three
mile radius of the sites, the area potentially affected extends far beyond three miles. If
left unabated, the cumulative effect of groundwater contamination over time in the South
Bay area could render the aquifers unfit for use as a municipal water source. Extensive
treatment of the water at great expense could become necessary prior to distribution.
The added costs of water treatment in the area could have a substantial negative impact
on the desirability of housing and on the value of real estate in the region.
A second set of examples that are useful to illustrate Superfund's contribution to
our nation's welfare primarily focus on landfills and hazardous waste disposal sites that
historically were located on floodplains close to a large river. Because current hazardous
waste and water pollution regulations prohibit such sitings, many sites near major
waterways have been abandoned and are now included on the Superfund NPL. By
eliminating the contamination sources, cleanups at such sites benefit the immediate site
vicinity, as well as downstream communities. If left unaddressed, the likelihood of far-
reaching environmental damage is high. As a consequence of the proximity to a river
system, contaminants may be carried downstream, leading to degradation of the riparian
area ecologically, as well as economically. The value of the river to the downstream
communities is enhanced considerably, and the likelihood that riverine biota and
sensitive ecological habitat would be compromised is greatly reduced by Superfund
actions. Some examples follow.
The FMC Corporation NPL site is located adjacent to the Mississippi River in
Fridley, Minnesota. For 20 years, until the early 1970s, the company disposed of
hazardous waste in an 11-acre unlined landfill at the site. Contaminated leachate from
the disposal pits has seeped into the surficial and confined alluvial aquifers that
discharge to the Mississippi River. The water supply intake for the city of Minneapolis is
located 1,500 feet downstream from the FMC property. The remedial actions at the site,
which include soil aeration and groundwater extraction, are protecting the Minneapolis
drinking water intake. FMC's naval ordnance manufacturing complex continues
-------
operation adjacent to the area where groundwater extraction is working to confine and
eliminate the groundwater contamination.
The 6-acre Bruin Lagoon NPL Site in Pennsylvania, is located on Bear Creek, a
tributary to the Allegheny River. Used for 40 years for disposal of refinery wastes,
contamination from the site spread to the river periodically during flooding. The
Allegheny River is an important water supply source for many industries and
communities, including Pittsburgh. On at least one occasion, a fishkill resulting from the
Bruin Lagoon contamination was seen 100 miles downstream. The cleanup has finally
ended the environmental problems emanating from this site.
Trends in Beneficial Reuse
A Superfund remediation generates benefits for individuals located on or near the
contaminated site, and for society in general. The benefits may take the form of reduced
health risks to individuals who live or work on or near the contaminated site, increased
property values for owners of the site and for those owners whose properties are
adjacent to or near the site. In addition, society in general benefits from a Superfund
cleanup because persons living far from the site take pleasure in knowing that the site is
not contaminated, and that drinking water is clean and safe wherever they may go.
To appreciate some of the benefits generated by the Superfund remedial program,
the 149 sites with construction completed as of September 30, 1992, were evaluated to
determine whether the sites have been put to a beneficial use since the construction was
completed. It is extremely difficult to put a dollar value on most of the benefits that are
generated by a Superfund cleanup action. However, a discussion of post-remediation site
activities may be helpful in providing a sense of the rejuvenation provided by the
elimination or mitigation of the contamination at Superfund sites.
Many factors influence whether a site will be reused following hazardous waste
remediation. The most important factor appears to be location of the property and the
nature of the real estate market in the vicinity of the remediated property. Sites located
in areas with many vacant lots and where the pace of real estate development is- slow are
less likely to be resold immediately after remediation as compared to sites in areas
where prime lots are scarce.
Forty-five of the 149 sites with completed construction as of September 30, 1992,
are located in remote or rural locations, or small towns. Twelve of these 45 sites are
currently being put to a beneficial use, including sand mining, recreation, cattle grazing,
and industrial uses Exhibit 1. The low population density surrounding remote, rural, and
small-town sites, as well as the ready availability of land and a depressed rural economy,
are likely factors influencing the low rate of reuse for these sites.
8
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Twenty-two of the 149 sites are in urban locations. This group of sites includes 14
urban industrial sites. Four of the urban sites are currently being used constructively,
and one of these is an industrial site. Several urban sites contain buildings with
substantial assessed values, however, and constructive use in the near future is likely.
A total of 23 sites are located in suburban areas. Twenty of these sites are
currently in use. The suburban sites are in Exhibit 1. Of the nine suburban industrial
sites, all except two are in continued use or reuse. Nine suburban high-tech electronics
manufacturing sites are all in continuing operation. Four out of five suburban residential
area sites are in use.
Thirty-four of the 149 sites are located in medium-sized towns. These sites
include eight industrial sites and 12 municipal landfills. One landfill is included in a
park system and will be part of a recreational area. The remaining landfills are covered
or capped and are currently unused. Reuse of municipal landfills is generally limited
because of the high cost of building on such sites and the need for methane control. Ten
other medium-town sites, including three industrial sites, are being used beneficially.
In summary, about 35 percent of the sites with completed construction in FY92
have returned to some beneficial use, and more than two-thirds of the 35 percent are
currently used in some commercial or industrial enterprise. Industrial operations include
electronic components manufacturing, production of specialty chemicals, pesticide and
fertilizer formulation, wood treating, and nail coating. Other light industrial operations
include various types of manufacturing, metal working operations, a warehouse facility,
and storage areas. Commercial operations include a restaurant, a commercial laundry,
an auto repair garage, and a plant nursery.
Almost 12 percent of the sites are being used or are in the planning stage, for
recreational use. Residential use is occurring at two sites. Other beneficial uses include
State and County Offices, airports, an active landfill, and grazing land for cattle. See
Exhibit 1 for a full listing of beneficial uses by site and category.
Some communities surrounding Superfund sites where construction has been
completed have benefitted significantly. One example is in Libertyville, Illinois, where a
planning commission is in the final stages of transforming the Petersen Sand and Gravel
Site, a former mining operation, into a recreational lake. Another example is in
Belvedere, Michigan, where the Boone County Conservation District has acquired a
covered and revegetated landfill for incorporation into its park system as a nature trail.
Approximately 15 sites have been sold since remedial construction has been
completed. New businesses have entered the remediated site with the foreknowledge of
its limitations and have tailored their practices to suit the temporary constraints at the
site. Review of the 149 sites with construction completed shows that
industrial/manufacturing sites were more likely to be sold and reused in the private
-------
sector than other types of sites. In some cases, there are high value, on-site structures
that can operate while remedial actions occur, especially if the remediation is addressing
only the contaminated groundwater at the site.
22 CHANGES IN PROPERTY VALUE
When it is discovered that a property has become contaminated with hazardous
substances, its value often plummets. This market response primarily reflects the fact
that most people do not want to live on or near a contaminated Superfund site.
Generally, people are concerned about the health risks posed by hazardous substances at
the site, and are unwilling to risk living or working near those substances without some
compensation. Although some people will accept the risk voluntarily, they usually
demand compensation in the form of higher wages or, in the case of contaminated
residential property, lower prices. Once the cleanup is complete and the risks have been
eliminated, property values should be restored to their former levels.
Thus, at least theoretically, one should be able to analyze changes in property
value before and after a Superfund response, and directly measure some of the benefits
attributable to the cleanup action. The increase in property value after cleanup should
represent some of the value added by the Superfund response. The price elasticity of
the real estate market in the short run may be low, however, depending on the health of
the surrounding real estate market and the economy in general. In addition, many
factors other than site remediation affect the recovery speed for property values (e.g.,
prevailing interest rates). To properly analyze the changes in property value attributable
to a Superfund response, therefore, one must isolate these other factors from the effect
of the remediation.
NPL Property Value Changes
To effectively isolate the effect on property values attributable to Superfund
remediation, it would be useful to perform time series analyses (i.e., analyses of changes
in property value over time), isolating the effects of individual property characteristics,
interest rates, and the general health of the real estate market, from the level and nature
of contamination at the site. To perform such an analysis on the 149 Superfund sites
with completed construction, however, would require extensive amounts of data on
property values prior to remediation and data on similar sites with no contamination at
all. Such an analysis was beyond the scope of this report.
To provide some insight into the change in the value of property after Superfund
remediation, EPA reviewed the current land use at 124 sites on the NPL
10
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where construction was completed on or before September 1992, and estimated the
change in property values.4
The current (cleaned-up) market values for the sites of interest were estimated
based on local property tax assessment records and sales transactions data where
available. Data were obtained for 95 of the 143 sites. For those sites where property
values were unavailable, estimates were derived by extrapolating information from those
sites with available data. The extrapolation was performed by grouping the sites into 12
site location categories (e.g., suburban industrial), and assuming that the median per acre
values for sites with property value data were applicable to the sites without data.
This analysis should be viewed simply as an indication of the positive effects a
Superfund response action can have on property values and the tax base of a community.
It is not based on econometric analyses, which would isolate the effects of the Superfund
response actions from other variables that effect the price of real estate. For example,
no attempt was made to adjust the estimates for market trends and the effects of a
recession on property values. Thus, although property values may be seen to rise when
the Superfund response was completed, the market value may be artificially depressed
and the effect of the Superfund response may be underestimated accordingly. Similarly,
properties were not grouped by number of bathrooms, lot size, or age of the house, even
though these factors significantly effect property values. These influences are too specific
to each geographic location and were beyond the scope of this analysis. Exhibit 2
presents the result of the analysis, showing the value of the 124 NPL sites before and
after remedial construction was complete. As shown in the exhibit, the site category that
experienced the largest change in property values is the suburban industrial category
(total: $12.9 million for nine sites with a median per acre value of more than $267,000).
The urban category also experienced significant changes in property value (total: $10.4
million for 8 sites with a median per acre value of more than $100,000). The estimated
cumulative change in onsite property values is $39.6 million, with an average positive
change of $7,770 per acre for all site categories.
The changes in onsite property values presented above are likely to be significant
underestimates of the total increases in property value. Several factors lead to this
conclusion. First, it is likely that the property values have not fully recovered since the
Superfund response actions are relatively recent. Second, the nation in general is
The universe of sites reviewed for the study included the 149 NPL sites with completed
construction as of September 1992. Four of the original 149 sites were excluded from the study
because they were outside the continental United States; two additional sites were excluded because
the sites were referred to another response authority and thus construction activities at the sites are
still ongoing. Twelve sites were not included in the study because they include negligible land area.
Six other sites were not included because the area of cleanup is a waterway or roadside. One site not
included is a Federal facility.
15
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EXHIBIT 2
ESTIMATES OF INCREASED PROPERTY VALUES ATTRIBUTABLE TO
SUPERFUND
Total
number
of sites
Urban
industrial
airport, landfill,
etc.
Suburban
industrial
residential area
Medium Town
general
industrial
landfill
Small Town
Rural
general
industrial
Remote
Hi-Tech Electronics
No Land
Miscellaneous
Total
14
8
10
8
14
9
12
9
23
8
5
Number of Estimated Estimated Estimated
sites with Total Value Total Value Total
value With Cleanup W/0 Cleanup Change in
information ($millions) ($mHlions) Site Value
($millions)
14
8
10
7
14
9
12
9
21
8
5
$10.1
$12.6
$57.3
$1.6
$12.7
$15.0
$1.9
$1.5
$1.7
$10.3
$0.7
$2.0
$2.7
$43.6
$02
$0.3
$10.9
$01
$1.1
$1.0
$9.5
$02
$8.1
$9.9
$13.7
$1.6
$12.3
$4.2
$1.9
$0.5
$0.7
$0.8
$0.7
Manufacturer
10
11
4
143
10
N/A
0
125
$57.8
N/A
N/A
$183.2
$57.8
N/A
N/A
$128.9
$03
N/A
N/A
$54.4
1 All figures rounded to nearest $100,000. Three sites had poorly defined boundaries
and are not included.
2 Value indicates that sites are considered entirely unusable without cleanup action
3 Value denotes that the presence of contamination did not affect site productivity.
16
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suffering through an economic downturn and real estate in particular has been
significantly depressed. Finally, and perhaps most importantly, limited data were
available on the value of the properties today had remediation not occurred at the site.
Because many of the sites were contaminated in only isolated areas, the analysis assumed
that the value of the contaminated area today would be zero for that portion of the site
that was contaminated; the remaining portions of the site were valued at full market
value. Thus, if one-fifth of the site was contaminated and four-fifths were not
contaminated, the analysis assumed that the value of four-fifths of the property at the
site was not affected by the response action. This is unlikely to be the case, because
properties in proximity are also negatively effected by noxious site characteristics.
Adjacent Properties
The economic literature includes several studies that estimate the effects of
noxious properties on the value of surrounding residential properties5. These studies
have attempted to isolate the effect of the noxious characteristic from other site
amenities. Several studies indicate that increased distance from the site has a positive
effect on property values, all else being equal. Stated another way, the real estate
market places a premium on increased distance from the contaminated site. For
example, the March 1993 EPA draft of the "Regulatory Impact Analysis for the Final
Rulemaking on Corrective Action of Solid Waste Management Units" shows that
property values were impacted negatively within a four mile radius of a contaminated
treatment, storage, and disposal facility. Another study by Janet Kohlhase in 1991
showed a negative impact that ranged from 0.0237 to 0.0312 per mile from a Superfund
site, with negative effects realized more than six miles from the site.
Because of their proximity to the contaminated sites, adjacent and nearby
properties may be affected by the NPL site's contamination through a number of
different exposure pathways (e.g., groundwater contamination, noxious odors, airborne
dust). If current and potential owners of the surrounding properties perceive some
significant risk or other displeasure associated with this exposure, the effect essentially
lowers the market value of the offsite parcel.
An approach called "benefits transfer" was used to estimate the value changes for
residential properties near three NPL sites. "Benefits transfer" refers to the use of
Measurement of the effect on property value per mile further from a noxious site has been
estimated by Diamond, "The Relationship Between Amenities and Urban Land Prices," Land
Economics, 1980, 56(l):21-32; Smith and Desvousges, "The Value of Avoiding a LULU: Hazardous
Waste Disposal Sites," The Review of Economics and Statistics 1986, 68(2):293-299; Michaels and
Smith, "Market Segmentation and Valuing Amenities with Hedonic Models: The Case of Hazardous
Waste Sites," Journal of Urban Economics, 1990, 28:223-242; Kohlhase, "The Impact of Toxic
Waste Sites on Housing Values," Journal of Urban Economics, 1991, 30:1-26; Nelson, et.al., "Price
Effects of Landfills on House Values," Land Economics, 1992, 68(4):359-65.
17
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empirical estimates from one study to evaluate effects at other sites. The three sites
chosen for this analysis are: Chisman Creek, a former fly ash disposal area in suburban
Yorktown, Virginia; Chem-Dyne, a former chemical storehouse in a residential area of
Hamilton, Ohio; and Harris (Farley St.) Site, located on the outskirts of metropolitan
Houston, Texas.
Surrounding residential property value data for the three NPL sites were obtained
from the Geographic Information System (CIS). CIS is capable of fusing together
spatial, physiographic, and socioeconomic information for an integrated analysis. This
system was used to obtain the baseline market values and linear distance to the NPL
subject site for all properties located between 0.5 miles and 2 miles of the NPL sites.
The values reflect data from the 1990 Census of Population. The results of the analysis
are shown in Exhibit 3.
The economic studies referenced above show that the values of property located
near the outer edge of the contamination area (i.e., 2 miles from the site) are affected to
a much smaller degree than are those located immediately adjacent to the site.
Consequently, removal of the contamination has only a slight effect on these outlying
property values. This explains why the effect is smaller for Chisman Creek, where the
housing properties are distributed more toward the outer part of the 2-mile zone, than
for Chem-Dyne, where this is not the case. This effect is even more pronounced at
Harris (Farley St.) site, where the average distance to the site for all properties within
two miles is over 1.5 miles. More information is needed to extrapolate these findings to
other sites.
The estimated changes in property values shown in Exhibits 2 and 3, respectively,
should be viewed only as order of magnitude estimates for a small sample of Superfund
sites. Without cleanup, at least portions of the land area at many of the sites would have
no value. The negative impact of these contaminated areas on adjoining areas is not
reflected in these estimates.
Groundwater contamination often extends beyond property boundaries, and if left
unmitigated, may spread further from the site over time. Without the Superfund cleanup
actions to address the contamination source, groundwater contamination would
ultimately affect a much larger area. Property values would likely be negatively
impacted throughout the area overlying a contaminated aquifer or throughout the area
dependent on such an aquifer for drinking water. Such property value impacts also are
not reflected in the estimates of property value changes derived in this report.
Finally, and perhaps most importantly, the estimated changes in the value of
property do not reflect the total benefit attributable to Superfund response actions. The
greatest benefit attributable to the Superfund program is perhaps the reduced risk of
exposure to hazardous substances, which translates into avoided health care costs and a
18
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higher quality of life for people who live or work on or near a remediated Superfund
site.
EXHIBIT 3
ESTIMATED CHANGES IN OFF-SITE PROPERTY VALUES
Total
Property
Value within
2 mile*
<$million)
Chang** in
Property Value*
within 2 Milaa
($millions)
Number of
Owner
Occupied
Houeing
Units within
2 Mile*
Property Value
Effect per
Houeing
Unit
($dollars)
Percent of
Total
Property
Value
Effected
within 2
mHee
Average
Distance of
Properties to
She (miles)
Chem-Dyne, OH
Chisman Creek,
VA
Harris (Farley
St.). TX
$430.6
$461.8
$171.3
$11.1 -25.2
$3.1 -8.7
$0.265- 1.9
8,885
6,932
3,125
$1,250-2,830
$458- 1,285
$85 - 608
2.6 - 5.9%
0.7- 1.9%
0.2- 1.1%
1.16
1.41
1.53
19
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CHAPTERS
ACCELERATING SUPERFUND RESPONSE
When CERCLA was first enacted, relatively little was known about the efficiency
and effectiveness of environmental remediation technologies. Many of the technologies
were first being piloted in the field. Each Superfund site was relatively unique, with
unknown contamination and uncertain remedies. Because of this uncertainty, each site
required a full analysis of the feasibility of alternative remediation technologies, and a
full spectrum of data sampling and analysis was required to fully characterize each site.
Over the years, however, certain contamination and remediation patterns have
developed. It became easier to anticipate the presence of specific hazardous substances
at certain sites. Production and disposal patterns within industry sectors began to evolve,
and these patterns created contamination that could be addressed by a limited number of
feasible and cost effective remedial alternatives. It also became clear that a full
spectrum of data sampling and analysis may not be needed to initiate action at sites
whose histories are relatively well known and the nature of the contamination relatively
obvious.
To expedite the Superfund response process, EPA is rethinking the way sites are
evaluated and addressed. The goal is to improve the rate at which risks are reduced by
creating greater flexibility for taking quicker actions to reduce risks, reducing duplicative
activities to improve response efficiency, and applying lessons learned in selecting
remedies. This chapter describes some of the initiatives EPA has begun as it revitalizes
the Superfund program. Section 3.1 describes the presumptive remedy initiative and
presents some estimates of benefits that may be attributable to that initiative. Section
3.2 describes the benefits associated with the use of computer-assisted, field generated
data analysis. Section 3.4 discusses improvements in the enforcement arena and the use
of de minimis settlements.
3.1 SACM INITIATIVES
The Superfund Accelerated Cleanup Model (SACM) approach to cleaning up
hazardous waste sites was launched by EPA on March 1, 1992, with the publication of
SUPERFUND ACCELERATED CLEANUP MODEL (SACM!): THE NEW
SUPERFUND PARADIGM. The document acknowledged that although the program
had evolved since the 1980 enactment of the Comprehensive Environmental Response,
Compensation, and Liability Act, it often developed in response to conflicting
expectations and mutually exclusive demands. The result was a patch-work of solutions
that still left the program open to a multitude of critics who claimed, among other things,
that the program was too slow or too costly. EPA believed that SACM would respond to
these criticisms.
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Throughout the remainder of the year, guidance and fact sheets were developed
to disseminate information to all Superfund stakeholders about the new approach.
These fact sheets on SACM boldly state that the purpose of SACM is to make
Superfund cleanups more timely and efficient. Further, that this will be accomplished
through more focus on the front end of the process and better integration of all
Superfund program components. The approach involves:
o A continuous process for assessing site-specific conditions and the need for
action;
o Cross-program coordination of response planning;
o Prompt risk reduction through early action (removal or remedial);
o Appropriate cleanup of long-term environmental problems;
o Early public notification and participation; and
o Early initiation of enforcement activities.
SACM is a process change considered for all Superfund activities.
Implementation of this policy is consistent with the National Oil and Hazardous
Substance Pollution Contingency Plan (NCP) and with CERCLA. Overall Superfund
priorities remain the same: deal with the worst problems first; aggressively pursue
enforcement; and involve the public and relevant State agencies at all appropriate stages
of the work.
SACM combines early actions, such as removing hazardous wastes or
contaminated materials, with on-going studies so that immediate public health and
environmental threats are taken care of while long-term cleanups are being planned.
Early actions may eliminate most of the risks posed to people by hazardous waste sites.
While these actions are underway, a Regional Decision Team (RDT) of Superfund site
managers, risk assessors, community relations coordinators, Regional counsel and other
experts who monitor site studies to determine what additional short-term and/or long-
term actions are required. Restoration of ground water is an example of long-term
actions.
The new model attempts to take down institutional barriers that had grown over
time and lead to bureaucratic distinctions between "NPL" and "non-NPL" sites, rather
than a focus on the worst sites. Under the new model, all sites where Superfund takes
any kind of cleanup action enter the system through one "Superfund door" for review
and assessment. The distinctions between the "remedial" and "removal" programs are
21
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greatly reduced so that the Superfund program as a whole can focus its resources on the
worst sites first.
Previously, the removal program had been seen as a quick action program to
address emergencies or to stabilize sites while they awaited the more deliberate process
of the remedial program. Sites entered the removal program once an action
memorandum was signed that documented the threat to human health and the
environment and the CERCLA statutory authority for such action. The traditional
remedial process required a remedial investigation and feasibility study (RI/FS) which
lead to the decision document, a Record of Decision (ROD). After the Record of
Decision was signed, a remedial design (RD) was developed and implemented in the
remedial action (RA). At times, due to variations in practices and the lack of consistent
practices, there had been confusion as to a site's status.
Under the SACM approach, there is one integrated site assessment to develop the
information needed for decisions throughout the entire Superfund process. The
Regional Decision Team is an integral part of the site assessment process. Under
SACM, coordination among removal, remedial, and State agency personnel is critical and
fostering that coordination is a role of the Regional Decision Team. At the point where
assessment information is adequate for decision-making, the Regional Decision Team
convenes to consider options for the site. The Regional Decision Team can then direct
or recommend a response action (e.g. time critical removal, non-time critical removal, or
remedial action), decide to collect additional data, develop an enforcement strategy, and
recommend placing the site on the NPL. Of course, emergency situations continue to be
dealt with immediately and do not go through the Regional Decision Team.
The essential elements of SACM are:
o Streamlines and integrated site screening and risk assessment;
o Regional Decision Teams to "traffic cop" all sites;
o Early action to reduce immediate risk;
o Long-term cleanup to restore the environment, and;
o Enforcement, community relations, and public involvement throughout the
process.
Under SACM, EPA continues to pursue potentially responsible parties (PRPs)
who may have caused or contributed to the site contamination to the maximum extent
possible. Expedited enforcement and procedures for negotiating PRP involvement in
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cleanups secures their participation. Public and State participation and access to
information are encouraged during all phases of the process.
Regional Pilots
Also during 1992 and in 1993, EPA initiated Regional pilots to demonstrate the
implementation of SACM, as well as to document the benefits of SACM. EPA initiated
15 Regional pilots dealing with the acceleration of the Superfund cleanup process and
enhancement of equity in the process. Now roughly half of these pilots are complete.
Broad benefits seen from the pilots were the beginning of the implementation of
initiatives such as SACM and presumptive remedies and increased coordination within
the Regions.
Some Regional pilots have focused on the early action aspect of SACM and tried
to obtain information on its benefits. At the Kearsarge, New Hampshire Superfund site,
Region I undertook an early action to deal with the surface contamination at the site.
The Region used the removal process to immediately cleanup the contamination. A pre-
SACM approach would have required the writing of a remedial engineering design
before a remedial action was begun to met the cleanup levels specified in the Record of
Decision. The Region estimates that 6 to 12 months and approximately $300,000 to
$450,000 were saved with the use of this early action. In addition the Region believes
that the early action resulted in quicker risk reduction at the site and a heightened public
confidence by the local community which are primary goals of SACM. The Region also
began a long-term remedial action dealing with the groundwater contamination at the
site at the same time as the removal action; thus illustrating the compatibility of the two
processes under a SACM approach.
Region X reduced costs and saved time at two sites by using early actions in the
form of removals rather than the long-term remedial processes. At the Yakima Plating
site, the remedial action cleanup described in the Record of Decision was accomplished
as a removal under the management of personnel from both programs using joint
resources. As required by the traditional long-term approach, a 30-day comment period
was provided for the Remedial Investigation and the Feasibility Study (RI/FS) and the
Proposed Plan which proposes the recommended remedy to the public. The estimated
time savings was 15 months, of which 12 months were saved because a remedial design
was not needed. The costs saved by not requiring a remedial design were over $100,000
(based on National and Regional averages).
At Allied Plating, Region X, working with the U.S. Army Corps of Engineers,
performed a pre-Record of Decision removal leading to a finding that no further action
was needed at the site. Again, about 12 months and over $100,000 were saved because a
remedial design was not needed. In addition, the Region estimates that $400,000 were
saved by using the removal process than if the traditional remedial process had been
used.
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Region VI designed pilots that used the SACM process and their own accelerated
Record of Decision (ROD) process they call a "Lightning ROD." A major finding from
both the SACM and Lightning ROD pilots was that the intense up-front effort by the
Regional Decision Team and associated staff required at least twice the "average" in-
house resources in the first year for each site. Forty-eight different professional staff
contributed to the projects, some of them working full-time. However, this up-front
investment has already resulted in impressive time savings of 2 to 3 years and is expected
to result in a net resource savings of 30% (by reducing the time from NPL proposal to
initiation of cleanup from 8 to 2.5 years). The Region has learned that because of the
up-front resources required, managers will have to carefully prioritize sites for such an
accelerated effort.
Region IV has successfully implemented a pilot program at three sites to integrate
the Expanded Site Investigation (ESI) with the RI/FS process and to facilitate earlier
Potentially Responsible Party (PRP) participation in the remedial process. Under this
approach to accelerate cleanup, the PRPs, with EPA oversight under a consent
agreement, conducted a combined ESI-RI/FS to determine the full extent of
contamination at the site while generating the data necessary to complete a Hazardous
Ranking Score (HRS) package. The first site completed resulted in a time savings of
two years over the traditional remedial process involving separate ESIs and RIs. Also,
PRPs paid for EPA oversight of the integrated assessment and all costs of the
investigation, conserving Superfund resources for truly abandoned sites.
The first site completed was referred to the State of Tennessee for remedial
design/remedial action, saving the State time and money in the remedial response
process. The remaining sites coming out of the RI/FS phase with eligible HRS scores
will be immediately proposed for the NPL and moved into RD/RA, again with two years
in time savings.
Full Implementation of SACM
On October 1, 1993, a joint memorandum from the Office Directors of the Office
of Emergency and Remedial Response and the Office of Waste Programs Enforcement
stated that a key priority for fiscal year 1994 will be moving SACM from a pilot
approach to "business as usual." EPA regional offices are now working toward this end.
32 PRESUMPTIVE REMEDIES
Presumptive remedies are preferred technologies for common categories of sites,
based on historical patterns of remedy selection and EPA's scientific and engineering
evaluation of performance data on technology implementation. The objective of the
presumptive remedy initiative is to use the program's past experience to streamline site
investigation and speed up selection of cleanup actions. EPA plans to develop a series
of directives on presumptive remedies for various types of sites. In particular,
24
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presumptive remedy directives have been developed, or are being developed, for the
following site categories: municipal landfills, sites with soil contaminated with volatile
organic chemicals (VOCs), wood treatment sites, coal tar sites, sites contaminated with
PCBs, grain storage sites, and groundwater contaminated sites.
Presumptive remedies draw upon past Superfund experience to streamline the
response process, without discouraging the use of innovative technologies or non-
standard approaches to sites with special characteristics. Instead of evaluating more than
a dozen potential remedies at every site, two or three remedies are identified in a
guidance document as having a high probability of success, based on EPA's historical
experience. Based on the "presumption" that one of these remedies will prove to be
ideal for a particular site, the data collection efforts and risk assessments can be more
focused, and feasibility studies can be completed faster and at a lower cost.
In developing presumptive remedy guidance, EPA selects site categories whose
contamination is usually addressed by a small number of remedies, and where there are
a significant number of these types of sites that would benefit from standardized
approaches. EPA has developed the first presumptive remedy guidance for VOCs in soil
and municipal landfills. Presumptive remedies have been identified for these site
categories, draft guidance has been prepared, and Regional pilots are in progress for
municipal landfill sites.
Potential Benefits of the Presumptive Remedy Initiative
EPA estimates that as many as 600 future NPL sites may benefit from the use of
presumptive remedies.6 The derivation of this estimate was based on the assumption
that future NPL sites will have a similar profile to historical NPL sites.
In general, use of presumptive remedies is expected to result in cost and time
savings during the site investigation and remedy selection stages of the response.
Standardization of these processes through presumptive remedy guidance also should
increase consistency in site assessments, remedy selections, and remedy designs, and will
likely result in fewer decision errors throughout the Superfund response. The
information presented below is speculative in nature, because the presumptive remedy
initiative is being field tested and little data exist to truly measure the benefits of using
presumptive remedies.
Estimates were developed by the Hazardous Site Control Division in EPA based on data
from the Record of Decision (ROD) Information Database and the Comprehensive Environmental
Response, Compensation, and Liability Information System (CERCLIS).
25
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Site Assessment Stage
Generally, data collected during the Site Assessment are used to identify the
contaminants of concern and the most significant exposure pathways. Although site-
specific conditions will necessarily drive the investigation, presumptive remedies may
facilitate these determinations in the following way:
• Focused sampling efforts, enabling EPA to limit the analysis to exposure
pathways of true concern. For example, PCB and coal tar sites have been
shown to be contaminated with hazardous substances that have low
solubility or low vapor pressure. Such contaminants generally would not
pose a significant threat to groundwater or likely pose significant risks to
human health through the volatilization pathway. The presumption about
the contaminants of concern at these sites should allow early focus on the
more significant exposure pathways, enabling concentration of data
collection and analysis on the remedial design for the presumptive remedy,
with an associated reduction in sampling efforts for pathways of less
concern and remedies unlikely to be selected.
• Effective earfy actions and streamlined risk assessments. For example, the
presumptive remedy for municipal landfill sites is to cap the site to control
the source, along with pumping and treating of the groundwater to contain
the contaminated plume. Because groundwater data are often available at
municipal landfill sites, it may be feasible, based on the presumptive
remedy guidance, to begin construction of a cap as an early action to
eliminate leaching at the site. Similarly, the risk assessment at the site may
focus on the presumptive remedy, enabling design of a more cost-effective
sampling and analysis regime.
Feasibility Study
The presumptive remedy initiative may have its greatest impact on the feasibility
study (FS) and Engineering Evaluation/Cost Analysis (EE/CA) stage of the response.
The FS and EE/CA represent those stages in a Superfund response in which alternative
treatment technologies are evaluated. Under the presumptive remedy initiative,
significant reductions would be likely in the time and costs required to analyze the
remedial alternatives because of the abridged list of alternatives that would need to be
evaluated at the site. The presumptive remedy guidance allows the site managers to
focus directly on a limited number of remedial alternatives.
Exhibit 4 illustrates the potential savings that may be realized from the
presumptive remedy initiative by focusing on one site, Saunders Supply Company,
Chuckatuck, VA. Exhibit 4 shows the standard feasibility study (FS) phase as conducted
26
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ft
83,8
b •£
*
C/3
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Ed
•s
• I
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a
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28
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at this site, and describes for each step the predicted savings with the presumptive
remedy approach.
Response bv Responsible Parties to Presumptive Remedies
Use of presumptive remedies may facilitate negotiations with Potentially
Responsible Parties (PRPs) by reducing uncertainty and limiting the likely remedial
alternatives that will be seriously considered during the remedy selection process. As a
result, responsible parties will be better able to bound their potential liabilities,
increasing the likelihood that an amicable settlement may be reached quickly and actual
remediation begun within a shorter time frame. Of course, actual time savings during
the negotiation stage will be very site specific, depending directly on the number of
responsible parties, the nature and extent of the liability, and who the responsible parties
are.
Presumptive remedies are being piloted in both EPA Region 1 and Region 6. In
both Regions, EPA personnel are very optimistic about the likelihood that the
presumptive remedy initiative will significantly reduce the time (and thus the costs)
associated with negotiating a settlement with responsible parties at the sites.
EPA Region 6 expects to realize as much as a 35 percent savings in time (1.25
years) in post-ROD negotiations at their wood treatment and municipal landfill pilot
sites. Region 1 has completed negotiations over a presumptive remedy (i.e., a municipal
landfill cap) in two months, as opposed to the 6 to 12 months that are more usual for
RI/FS negotiations.
In addition to facilitating negotiations with responsible parties, use of presumptive
remedies may stimulate the number of voluntary cleanups by establishing standard
remedial measures and site assessment procedures for specific site types. Presumptive
remedies should help mitigate two of the greatest hindrances to voluntary cleanups:
PRPs' uncertainty as to what will be required of them if they take responsibility for a
cleanup, and PRPs' concern that requirements may significantly change during the course
of a remediation.
Voluntary cleanup of coal tar sites may be a good example of how reduced
uncertainty and use of presumptive remedies can facilitate response actions. In at least
five States, utility companies have volunteered to take over investigation and remediation
of coal tar sites. Site-to-site similarities, and the industry trade association's efforts to
develop presumptive remedy guidance, may be partly responsible for these voluntary
efforts.
29
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Cost and Time Savings
EPA estimates that response costs and time during the RI/FS stage of the
response will be reduced between 8 and 16 percent under the presumptive remedy
initiative. Assuming that about 600 sites currently listed on the NPL could benefit from
the use of presumptive remedies, savings could reach $50,000 to $125,000 per site during
the RI/FS stage. Although this estimate is very rough, it is based only on the obvious
opportunities for savings, and does not acknowledge any savings attributable to a
streamlined negotiation process due to an improved understanding by both responsible
parties and the local stakeholders at the site of what to expect from the remediation.
This estimate also does not account for cost savings from fewer decision errors and
voluntary cleanups.
Early empirical evidence indicates that the presumptive remedy initiative may
significantly reduce traditional response times. Preliminary information on the Region 6
pilots indicate that presumptive remedies may have contributed to a 65 to 75 percent
reduction in the duration of RI/FS activities. With additional savings due to shortening
PRP negotiations for conducting the RA, Region 6 projects an overall time savings of
about 60 to 65 percent, reducing the overall length of time to reach the RA stage from 8
to 3 years.
Preliminary information on a Region 1 municipal landfill presumptive remedy
pilot also shows significant savings. By relying on historical groundwater data and basing
its actions on the presumptive remedy for a municipal landfill (i.e., a cap), the RI/FS for
the site is predicted to be completed in about two years vs. the normal period of 41
months, with construction of the cap to be completed in a little over two years after
initiation of the remedial process. Traditionally, EPA has found that it takes 41 months
from the completion of the Record of Decision (ROD) to completion of the remedial
design and 55 months to complete the construction of the remedy for all types of sites.
Both of these estimates, although very promising, are also very preliminary. In
both cases, it is difficult to project what costs and schedules would have been without the
use of the presumptive remedy guidance. Without an accurate baseline, cost and time
savings must necessarily be speculative.
3.3 QUICK TURNAROUND METHOD (QTM) ANALYTICAL SERVICES
In 1980, the same year that CERCLA was signed into law, EPA initiated the
Contract Laboratory Program (CLP). This established on a competitive basis, a
community of contract laboratories which were to provide large volume, standardized
analyses in a cost-effective manner. As the Superfund program grew, the need for the
analytical services provided through the CLP also grew. The capacity of the participating
laboratories to analyze both organic and inorganic samples increased from about 5,000
samples annually to more than 78,000 samples annually in 1991.
30
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During this period of explosive growth, problems were identified and attempts
were made to resolve them. In March 1991, the Deputy Administrator requested the
formation of a task force to review the CLP program. The task force reported that the
most frequent complaint from regional officials involved excessive turn-around-times.
The Regions reported that by the time the analytical results were reported by the
laboratory, screened for contract compliance, reviewed and validated by the Region, and
reported to the RPM, from three to eight weeks or longer had passed.
The Quick Turnaround Method (QTM) analytical service was developed to
provide a faster and more efficient process for analyzing chemical data at a site. There
is a need to collect chemical samples at several stages in the Superfund response process.
In some situations, the need to obtain the analytical results quickly is critical because the
data are essential to decisions that have to be made quickly. The QTM analytical
service offered through the Contract Laboratory Program (CLP) can be used to provide
analytical data on 81 organic target compounds within 48 hours. The traditional time
frames for confirmatory organic determinations under CLP are 14 days and 35 days.
QTM is designed to produce data of known and documented quality that can be
used for screening, monitoring, and other hazardous waste site assessments. It provides
rapid turnaround for samples of water, soil/sediment, and waste. QTM is most
appropriate for use in situations where site contaminants are known or highly suspected
from previous evaluations, and when analytical data are needed rapidly. Analytical
results through QTM are much less expensive than traditional CLP data. As a result,
the use of QTM in combination with CLP confirmatory analyses can be highly cost
effective. Comparisons between QTM and CLP confirmatory results have shown the
QTM data to be generally reliable.
QTM became broadly available in April 1992. Currently three laboratories are
under contract to provide QTM service through the CLP. Tentative long-term plans
include expanding QTM to address metals if the Regional demand for the organic
analyses under QTM increases.
Applications for QTM arise in site inspections, site characterization, treatability
studies, engineering designs, and during actual response actions at a site. One
particularly important QTM application is in site characterization. QTM can enhance
site characterization efficiency and cost effectiveness by increasing the number of "hits" in
the more rigorous "full organics" CLP analytical methods. By locating high concentration
areas using QTM results, samples submitted for confirmatory CLP analysis can be
selected carefully. For example, samples that will drive Hazard Ranking System (HRS)
scores could be selected from a larger number of samples analyzed through the QTM
31
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service7. Results obtained using QTM can be used to identify the specific
locations/samples where confirmation analyses are needed.
Examples of specific applications where a quick response could be important
include the following: directing sampling efforts; determining the presence or absence of
organic contaminants in soil or water samples; compound identification for safety
reasons; preliminary quantitative analysis of contaminants; monitoring concentration
gradients during investigations; optimizing a sampling grid; definition of pollutant plumes
in groundwater; placement of monitoring wells and selection of screen intervals;
identifying critical samples for confirming analyses; optimizing analysis conditions (e.g.,
dilutions, extract cleanups) for confirming analyses; and monitoring effectiveness of waste
treatment.
Historical Experience With QTM
The first QTM pilot study was carried out in Region 2 between April 1991 and
January 1992. Since the pilot study, Region 2 Project Managers have continued to use
QTM on a regular basis. According to the CLP Sample Management Office, Region 2
has requested QTM almost every week for the last 18 months.
Region 2 personnel are enthusiastic when describing how the ability to have
validated data quickly offers a considerable cost savings, particularly where there is a
field crew mobilized and excavation equipment is on-site. QTM data were used at the
BROS/Bridgeport remedial site in New Jersey to determine if the soil excavations in a
13-acre lagoon had proceeded to an adequate depth to achieve the PCB cleanup goals.
The excavated soil was treated by incineration and then returned to the site to fill the
excavated area. Use of QTM helped to expedite the cleanup actions by providing the
chemical analysis results quickly, thus reducing the level of effort necessary to complete
the job.
QTM was also used at the Higgins Disposal site in Franklin Township, New
Jersey. This site had been used for industrial waste disposal since 1956, and contained
buried, leaking unmarked barrels. When the site contamination was discovered, the site
was being used as a horseback riding facility. It was important to inform people using
the site of the potential chemical exposures. QTM was used to determine the contents
of the barrels. The results indicated the presence of benzene, toluene, phenols,
pesticides, and other contaminants. The EPA site manager presented the QTM findings
and information on the constituents of concern at a public meeting shortly after the
buried containers were found. The QTM service enabled EPA to obtain this information
7 HRS scores reflect the extent of chemical contamination at a site and the potential for
exposure to contamination. HRS scores above 28.5 are needed to qualify a site for the National
Priorities List.
32
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and make it available promptly, so that individuals could make informed decisions about
using the riding facility. In addition, the information on the types of chemicals was used
to determine how the materials should be disposed. Based on the QTM results, wastes
were segregated by their waste categories for disposal.
QTM was also used at the Higgins Disposal site to decide termination levels for
soil excavations. QTM results were used to determine if the excavation had removed all
of the contaminated soil or if further excavation was needed. The results of the
chemical analysis were available quickly enough so that decisions could be made while
the equipment and crew were still on site.
There are plans for using QTM in the site investigation for another New Jersey
site where screening is needed for HRS scoring. A total of 320 subsurface soil samples
will be collected and analyzed using QTM. Results from these screening samples will
indicate which samples are critical to the HRS scoring. The information will be used to
select 40 samples for confirmatory CLP analysis. The per-sample cost for the
confirmatory CLP analysis is around $1,100, compared to around $300 for the QTM. By
combining QTM with the CLP's Routine Analytical Services for the confirmatory
analyses, a savings of approximately $212,000 is expected for this site investigation.
During early 1992, Region 6 employed a QTM pilot as part of their "Lightning
RODs" pilot projects. These projects were initiated to demonstrate ways to shorten the
time spent in preconstruction study and design at three sites. Expedited analytical data
turnaround was one of the improvements enlisted to meet a tight field schedule. During
this effort, the QTM laboratories performed 600 analyses over a 3-week period and
returned validated data to the site and to the Regional Office within an average of 4.5
days after each day of sampling. This use of the QTM service occurred while the QTM
program was still under development. Since April 1992, the QTM program has been
returning data to the Regional Office within the 48-hour time frame.
In some cases, the need for quick analytical data is already being met through
other means. For example, Region 4 uses it's quick analytical service, "Fast Analytical
Screening Procedure" (FASP). FASP utilizes a mobile laboratory with organic and
metals capabilities and can provide 24-hour turnaround times. This service offers
laboratories with telecommunication capabilities, and is available for pre-remediation
through post-remediation sampling. At least three other Regions also have mobile
laboratories that may, in part, provide a similar service as that provided by the QTM
service. The capacity of the mobile laboratories, however, may be insufficient to provide
all of the analytical capability needed for quick turnaround analyses.
3.4 DE MINIMIS SETTLEMENTS
Small waste contributors often complain that they are not able to settle with EPA
until late in the remedy process, and settlement is often dependent on volumetric
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information that is not comprehensive at many sites. Moreover, many small waste
contributors, who often are small businesses, complain that they spend an inordinate
amount of time acquiring information about the Superfund process and understanding
the terms of a proposed settlement.
As part of the Superfund revitalization effort, EPA has placed greater emphasis
on reaching equitable settlements with individual responsible parties as early in the
process as possible. To this end, EPA has reemphasized the use of de minimis
settlements to resolve the obligations of small-volume waste contributors early in the
negotiation process. Section 122(g) of CERCLA allows the Agency to enter into de
minimis settlements whenever practicable and in the public interest. Two groups of
parties are eligible for these settlements: de minimis waste contributors and de minimis
landowners. Under a de minimis waste contributor settlement, parties responsible for
only small amounts of hazardous substances at a site can be released from further
liability after paying an agreed amount to EPA. Most of the de minimis settlements to
date have been with waste contributors.
One goal of Superfund enforcement is to focus Regional attention on reaching de
minimis settlements as early as possible, with as many qualified parties as possible. Early
settlements (e.g., settlement prior to the selection of remedies) allow parties to resolve
their liability early in the process. De minimis settlements should result in increased
equity and efficiency, because more attention may be focused on the major contributors
to the hazardous substances at a site. De minimis settlements are expected to reduce
transaction costs8.
Use of De Minimis Settlements to Date
In February 1988, EPA announced a major de minimis settlement for four
Cannons Engineering Corporation sites in Massachusetts and New Hampshire. This
settlement involved 276 PRPs. Their combined payments were $11 million out of a total
of about $50 million for the site cleanup. To date, there have been 125 final de minimis
settlements involving over 6,000 parties as of September 30, 1993. Of the total number
of parties offered de minimis settlements, 63 percent have agreed to settle.
Transaction costs consist of expenditures that are required to carry out an activity, without
contributing significantly to the substantive production of that activity. One example of transaction
costs is the time and costs associated with information gathering for small businesses who are PRPs,
who must learn about the Superfund process. There are other sources of transactions costs often
incurred by a PRP. These are costs incurred to: (1) search for other PRPs; (2) negotiate with other
PRPs and EPA over apportioning costs; (3) recover costs from other PRPs; (4) negotiate with EPA
over remedy selection and cleanup implementation; and (5) negotiate with insurers for reimbursements
of costs. (Dixon, et al., "Superfund: Private-Sector Expenditures and Transaction Costs," EPA, 1993,
p. 4) Because transaction costs do not usually contribute substantively to site cleanups, it is desirable
to avoid or minimize these types of costs.
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Final de minimis settlements, as of September 1993, total more than $131 million
of these, 89 percent have been settlements with de minimis generators. A recent report,
The First 125 De Minimis Settlements. (U.S. EPA, Office of Waste Programs
Enforcement, October, 1993) notes an upward trend in de minimis enforcement activity.
Out of the total 125 final de minimis settlements at 78 sites, 58 percent occurred in 1992
and 1993.
EPA issued guidelines for streamlining the de minimis settlement process on July
30, 1993. These guidelines establish the minimal level of information necessary before a
Region can consider a de minimis settlement, provide a methodology to construct
payment matrices in appropriate circumstances, and encourage Regions to take a more
active role in facilitating the settlement. Regions are no longer required to complete a
waste-in list prior to offering a de minimis settlement which should allow many more
PRPs to qualify for de minimis settlements. To emphasize the Agency's commitment to
these settlements, EPA has targeted 35 settlements for the 1994 fiscal year.
Benefits of De Minimis Settlements
Early waste contributor de minimis settlements promote efficient case load
management at sites where there are wastes from multiple generators. Eliminating de
minimis parties early in the response process reduces the number of parties with which
EPA and other PRPs must negotiate with for implementation of the selection of the site
remedy. Early settlements may also provide the Agency with reimbursement of costs
already incurred and may provide funds for future site cleanup. Collecting funds early in
the response process benefits the Agency and all PRPs. Amounts received from de
minimis settlements reduce the amount non-tie minimis parties would be liable for and a
portion of that payment may be placed in a trust fund to defray future PRP cleanup
costs. The availability of funds may also facilitate a global settlement, thus expediting
the cleanup process and benefiting all parties and the public.
EPA Region 3 recently completed a pilot at the Tonolli Corporation site that
involved de minimis settlements. Tonolli operated a secondary lead smelter and battery
recycling facility between August 1974 and January 1986. Batteries were stripped for
lead content. Contaminants identified at the site included cadmium, chromium, copper,
lead, and arsenic. EPA Region 3 estimates that the Agency's cost, including contractor
and Agency staff time, for settlements with about 200 de minimis parties was $825,000.
Most of the expenditures involved review and compilation of the waste-in information.
These efforts, however, have resulted in collection of more than $3.06 million as of June
1, 1993. Further payments resulting from the settlements are expected. For this site,
there were two groups of settlements. In the first group, 170 parties signed and 161 of
these have paid. The total settlement was $3,491,233. In the second group, 33 parties
signed settlements totaling $542,124.
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Early settlements with de minimis parties will generally entail lower transaction
costs for the settling parties compared to settlements that occur during the RD/RA stage
of the response, because the de minimis parties are involved in the process for a shorter
period of time.
An increase in early de minimis settlements could also help to decrease the
duration of later phases of the response. EPA data show that the actual durations for
remedial design and remedial action, including tune required to negotiate with PRPs, are
longer when there are more than 100 PRPs.9 To the extent that negotiations with PRPs
are a determinative factor in the duration of each phase of the response, eliminating de
minimis parties, particularly if accomplished early in the process, could speed up
selection of the final cleanup remedy.
Although de minimis settlements accomplished to date are considered costly to the
Agency, the benefits to settling parties, including some reductions in transaction costs
and increased equity in the Superfund program, may justify the expenditure. The total
benefits of de minimis settlements (both in terms of efficiency and equity) will continue
to increase, particularly as the Agency becomes more proficient in doing de minimis
settlements, and as other administrative initiatives are implemented within the
enforcement program.
Remedial design duration varied from about 16 to about 23 months (average 19.2 months)
when there were 100 or fewer PRPs; the duration averaged 27 months for sites with more than 100
PRPs. Remedial action duration varied from 15.3 to about 29 months (average 22.8 months) when
there were 100 or fewer PRPs; the duration averaged 32.4 months when there were more than 100
PRPs.
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CHAPTER 4
COMMUNICATION INITIATIVES
The responsibility for remediating our nation's worst hazardous waste sites is
shared between the Federal government, State and local governments, and responsible
parties. Many sites are addressed directly by responsible parties through 'Voluntary"
actions, that is, actions that are not directly motivated by administrative orders or
consent decrees. Other sites are being remediated under State hazardous waste
programs. As such, State and local governments, as well as the private sector, have been
wrestling with many of the same problems that face the Superfund program today. Good
ideas can come from lots of different and varied sources, and the Superfund
revitalization effort has .been soliciting good ideas from all parties interested and
concerned about making the Superfund program work better.
In an effort to learn from past experiences, and to better understand the concerns
of States and the public in general, EPA has engaged in an aggressive communications
effort, soliciting ideas from all affected stakeholders in the hazardous waste cleanup
arena. These communications have focused, in particular, on ways to improve the
Superfund program.
EPA has sponsored or co-sponsored, with organizations such as the International
City/County Management Association (ICMA) and the Association of State and
Territorial Solid Waste Management Offices (ASTSWMO), a number of meetings to
provide opportunities for EPA to hear from States, potentially responsible parties
(PRPs), and the public, their views on Superfund and how to improve the process. The
location of these meetings are indicated on the map in Exhibit 5. This chapter describes
some of EPA's Superfund communication initiatives and their benefits.
4.1 COMMUNICATIONS WITH STATES
Many of the challenges currently facing the Superfund program have been faced
before by some State governments. The Federal and State governments are partners in
meeting environmental challenges. To this end, EPA management and staff have met
with State representatives on several different occasions this past year. Issues of
discussion included the State role in Superfund revitalization and State experiences in
enforcement and community relations, as well as technical issues (e.g., soil cleanup
levels), program management (e.g., risk management and future land use), and
procedural issues. These meetings have been both informative and extremely helpful.
Since April 1992, EPA has held seven State forums in cooperation with
ASTSWMO to exchange information on Superfund management topics. Participants
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have included EPA headquarters and Regional staff, State agency representatives,
Department of Energy staff, and staff from the Agency of Toxic Substances and Disease
Registry (ATSDR). The topics covered were diverse and timely,including consideration
of future land use, voluntary cleanups, clean-up standards, communications, and cost
sharing. The format of these meetings included presentations, questions and answers,
and open discussion on topics. Exhibit 6 briefly summarizes the meetings EPA has
convened with State representatives over this past year to discuss pertinent Superfund
implementation issues.
In addition to the EPA/State meetings described in Exhibit 6, there have been
other opportunities for EPA to interact with States, including meetings of the State/EPA
Superfund Policy Forum. EPA is also working with ASTSWMO on the non-NPL
Cleanups Study. This study will collect data on State non-NPL cleanups in order to get a
complete picture of the national cleanup picture. To accomplish this, ASTSWMO sent
out a survey form to all of the States and territories requesting data on all State non-
NPL cleanups to compile a national data basis. This study will:
o Provide a more complete picture of CERCLA-influenced cleanups
completed or underway;
o Provide useful information on the large amount of State cleanup activity
being conducted outside the Federal system;
o Allow for a comparison of the quantity of cleanups being conducted by
Federal vs. State governments on a national level and within individual
States;
o Allow interested parties to have the information needed to better
communicate Superfund success;
o Provide very timely information needed to participate in the dialogue with
Congress on the role of States in the reauthorization of Superfund.
Benefits from Improved Communication
The purpose of the State/EPA meetings is to ensure that States have an
opportunity to express their views and share their experiences with EPA. Through these
meetings, States have an opportunity to share their successes and inform others facing
similar challenges about lessons learned. Also, because States are co-implementers of
Superfund with EPA, the forums provide the States with an important opportunity to
become familiar with EPA policies regarding Superfund implementation.
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EXHIBIT 6
EPA AND STATE MEETINGS
DATE AND
PLACE
1. April 16, 1992
Washington,
DC
2. August 1992
Scottsdale,
AT.
3. Sept 25, 1992
Washington,
DC
4. Oct 13-14,
1992
Washington, DC
5. Oct 21, 1992
Salt Lake
City, Utah
6. Dec 3-4, 1992
Washington,
DC
7. June 24-25,
1993
ATTENDANCE
EPA and
ASTSWMO
44 States, 2
territories, and 3
Indian tribes
24 States, EPA
Headquarters, and
7 EPA Regions.
19 States and 20
EPA officials
ISSUES DISCUSSED
Cost Sharing;
Cleanup Standards;
State ARARs/Federal Requirements;
Permitting/Permit Equivalency;
Presumptive Remedies and Risk Assessments;
Dispute Resolution; and
Consent Decrees.
• State role in SACM.
• Individual State views on SACM issues.
The objective was to gain an undeistanding of Ihe stats of regulation
o^dbpmerteffi^ardtoidertifyteytedTicala
Issues discussed included:
Protection of Groundwater;
Direct Contact Soil Standards;
Potential Human Health Risks;
Ecological Effects of Concern; and
Site-Specific Risk Assessment versus Generic Oeaaip Standards.
Groundwater remediation;
Future land use;
Mechanisms to promote effective State/EPA partnerships;
The EPA Regional perspective; and
State cost sharing.
Future Land Use Considerations in Superfund Remedy Selection;
Voluntary Cleanup Programs;
Groundwater Remediation Time Frames;
Measuring and Communicating Success; and
State non-NPL Cleanup Initiatives.
This technical meeting was convened to discuss issues associated wilh
e^xHie to scicortaniBrts \iadrectailalard
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States welcome the opportunity to share information with EPA. Through
EPA/State interaction, States can alert EPA to concerns they may have with particular
program management approaches.
The role that States have played in the Superfund response process has evolved
over time; their role in site cleanups has increased as the Superfund program has
developed. States and EPA have found that the hazardous waste cleanup universe is
bigger than originally anticipated. Many States have developed site cleanup programs
that complement the Federal Superfund program. Some States are developing their own
funding schemes, liability approaches, and standards. At this juncture, involving the
States in managing Superfund is most important to ensure national consistency.
42 COMMUNICATION WITH THE PUBLIC
EPA has held several meetings to solicit input from the public on how the Agency
might improve the Superfund response process and communication with the public. The
first of these meetings, held in June 1992, was in Washington, DC. Other meetings have
been held in Chicago, San Francisco, and Dallas. The purpose of the public forums is to
provide an opportunity for people with different perspectives to express their views. No
effort is made to develop consensus or to prioritize concerns or solutions suggested
during the meetings. However, after each meeting, EPA has developed a set of follow-
up actions on major suggestions made by meeting participants.
Superfund Revitalization Public Forum
To solicit suggestions on how to accelerate the Superfund response process, EPA
held a public meeting on June 24, 1992, in Washington, DC. More than 150 people
attended the meeting, representing industry, State and local governments, communities,
environmental groups, and other constituencies. Clean Sites, Inc., under a cooperative
agreement with EPA, facilitated the meeting. In addition to receiving general
suggestions on how to expedite the Superfund cleanup process, three specific topics were
targeted for discussion in breakout sessions. These topics were:
Ways to encourage and manage voluntary cleanups by potentially
responsible parties (PRPs);
Effective ways to involve the States, the community, and other interested
parties in the cleanup process; and
Ways to describe the expectations of the Superfund program, measure
success in achieving program goals, and communicate the goals and
successes to interested parties.
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Each breakout session included a panel comprised of senior EPA Headquarters
and Regional officials in key decision making roles with respect to the Superfund
Program. Breakout session participants were invited to present their views on the stated
topics, and the EPA panelists were given an opportunity to address the ideas presented.
The meeting afforded members of the public a forum to convey to EPA their
concerns and recommendations and also an opportunity to develop a better
understanding of the Agency's position and the challenges it faces relative to the
Superfund program/process. The meeting was beneficial in identifying the myriad issues
of concern to parties directly affected by the Superfund process. The interaction
between EPA and the meeting participants during the breakout sessions also served to
initiate dialogue on the issues.
EPA/ICMA Regional Conferences
Following the June Public meeting in Washington, EPA immediately began efforts
to convene four additional meetings in 1992-1993 in association with EPA Regional
Offices and the International City/County Management Association (ICMA) through a
cooperative agreement with EPA EPA and the ICMA convened a regional conference
in Chicago on November 12-13, 1992, to solicit suggestions from different constituencies
on how to improve the current Superfund program.
A total of 80 people participated in the meeting. Participants represented the
private sector, local government, citizen and environmental groups, State agencies, EPA
Headquarters, and EPA Region 5. Speakers were selected to provide several different
perspectives to open the meeting. These included senior EPA Headquarters and
Regional personnel, as well as individuals representing different interest groups .
Attendees were divided into four smaller groups for the breakout sessions which
focused on three primary topics:
Voluntary Cleanups;
Accelerated Cleanups; and
Public Involvement.
A second EPA/ICMA Superfund Revitalization Forum was convened on February
1-2, 1993, in San Francisco, California. A total of 84 people attended, representing the
private sector, local government, citizen and environmental groups, State agencies, and
EPA The meeting structure and general topics for breakout sessions were the same as
the Chicago meeting. Interest group perspectives were provided by speakers
representing city government, community groups, and private industry.
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A day and a half public forum was convened in Dallas, Texas on May 19-20, 1993.
Although structured along the lines of the previous meetings, this forum focused on
different topics. Breakout sessions addressed issues pertaining to environmental equity.
Session #1 was entitled "Economic Considerations at Superfund Sites" and included
discussions on employment opportunities and training local labor, redevelopment at
Superfund sites, and property value impacts of Superfund sites. Session #2, "Public
Involvement: Addressing Social Concerns of Superfund Sites," included discussions on
outreach to low-income communities and minorities at Superfund sites; environmental
equity; risk issues; enhanced public involvement; and Superfund Technical Assistance
Grants. Session #3, "Innovative Technologies," included discussions on criteria for
evaluating innovative technologies, additional assurances needed, information on
innovative technologies, and incentives for the development and use of innovative
technologies. About 80 people participated in the Dallas meeting.
Benefits of Public Communication
The meetings with the stakeholders have provided a mechanism for EPA outreach
to the community concerning Superfund. The meetings have provided an opportunity for
diverse stakeholders to express their opinions. By participating in the discussions, public
participants gain an understanding of the complexities of the issues facing the Superfund
program. The meetings afford EPA an opportunity to gain a better appreciation for the
concerns and motivations of the public on Superfund issues.
The meetings, in particular the breakout sessions, provide an opportunity for open
communication. These sessions let participants know that EPA is sincerely interested in
their viewpoints.
One industry participant at the Chicago meeting noted the EPA Headquarters
and Regional Office attention to the meeting. He was impressed by the EPA effort to
encourage communications and to listen. He suggested the greatest benefit from these
meetings is the opportunity for policy makers to meet with a cross-section of people
involved with sites (ranging from city administrators to PRPs) to get a "reality check"
about concern and problems in the field. It is important that EPA policy makers hear
from people with heart-felt opinions on Superfund issues. Meetings such as the Chicago
forum facilitate this communication.
A participant in the San Francisco meeting also stated that he thought such
meetings are beneficial. He observed a level of responsiveness on the part of EPA that
he had not seen before and remains convinced of EPA's sincerity in trying to revitalize
the Superfund process and to use community input constructively.
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4.3 COMPENDIUM OF GOOD IDEAS
Because the Super-fund program is implemented primarily in the EPA Regions,
the program has evolved with some differences in each Region. As may be expected,
different Regions have been able to perform certain functions better than others. To
learn from those programs that have been particularly successful in certain areas, a
compendium of model programs has been developed that summarizes aspects of each
Region's success stories. These success stories were summarized in the "Compendium of
Good Ideas, Models of Success and Lessons Learned," March 1993, EPA Publication
9202.1-10-1.
The Compendium summarizes innovative ways to improve Superfund
implementation. The Compendium is a two-volume publication, with 19 ideas discussed
in some detail in Volume 1 and approximately 250 ideas described briefly in Volume 2.
Many of the suggestions identified in the Compendium are already being
implemented or explored in other Regions throughout the nation. There has been some
exchange among Regions for at least 14 of the 19 ideas presented in the Volume 1
Compendium of Good Ideas.
4.4 COMMUNICATIONS WITH THE PRIVATE SECTOR
Superfund Ambassador Program
An undeniable effect of the Superfund program has been to stimulate corporate
America to deal directly with hazardous waste cleanup. Several major firms across the
country have either created their own cleanup programs or hired cleanup companies to
handle hazardous waste cleanup. Major corporations such as Dow Chemical have
cleanup operations employing over 300 people, greater than some of EPA's Superfund
Regional offices. These people deal with cleanups under Superfund, RCRA, and other
Federal, State and local law.
To improve communications with private companies, EPA has piloted the
Ambassador Program (models of success, good ideas, and lessons learned), which is
similar to the one used to develop the Compendium of Good Ideas. A focus group
approach is being used in which a few EPA people meet with several people from a
particular company. The focus group sessions provide an opportunity for EPA staff to
meet with their private counterparts in a non-confrontational setting to understand
better the ideas and interests of the "other side." Private companies are being
encouraged to discuss successes, innovations, lessons learned, and concerns with
Superfund and other hazardous waste issues off-the-record.
EPA staff visited Dow Chemical Company in Midland, Michigan, on April 26,
1993, and Geraghty and Miller, Inc., in Chicago, Illinois, on May 10, 1993, as a pilot for
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this program. Specific issues discussed at the meeting include site investigation; site
management; effective practices; liability issues; communication activities; and EPA,
State, and PRP interaction.
Dow has 10 sites with major Superfund involvement. Recommendations raised in
meetings with Dow staff include shifting responsibility for community relations to the
PRP who often have a local presence; not using residential land use as a default for risk
assessments; and using a proactive approach in dealing with hazardous materials.
Geraghty and Miller is a consulting firm that has been involved in approximately
150 Superfund sites, primarily for private companies. Some of the suggestions that were
raised in the meeting with Geraghty and Miller staff include increasing Superfund
program flexibility; formation of a mentoring program for training of EPA Remedial
Project Managers in both technical and interpersonal skills; reducing the number of
deliverables; streamlining data requirements; adopting a performance based process for
remedy selection; and increasing the informal interaction between PRPs and government
agencies.
PRP Incentives Forum
In mid-April 1993, a two-day meeting was convened in Denver, Colorado, to
discuss how to create incentives for PRPs to work more cooperatively with EPA. The
objectives of the Forum was to promote better interaction, identify obstacles, and
develop recommendations from the private sector that could facilitate faster cleanups.
This meeting was called the PRPs Incentives Forum. Participation in the forum was by
invitation. The 30 people attending were primarily industry representatives. Case
studies discussed at the meeting were volunteered by the participating PRPs.
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CHAPTERS
IMPROVING ARCS CONTRACT MANAGEMENT
In the past two years, EPA has made significant strides in improving the contract
management of its Alternative Remedial Contracting Strategy (ARCS) contracts. In
1991, EPA faced major criticism by Congress and the press for mismanagement of the
ARCS contracts, in particular the high program management costs, and EPA's
administration of oversight control. In response, EPA's Administrator Reilly
immediately established an Agency Task Force to evaluate the allegations and
recommend actions to correct any weaknesses in EPA's management of these contracts.
The Task Force made thirty-two recommendations for improvements in its 1991 report,
"Implementation of the Superfund ARCS". To date, EPA has succeeded in
implementing the majority of these recommendations.
The recommendations made by the Task Force incorporate across-the-board
improvements to strengthen contract management in ARCS and the Superfund program
as a whole. They included: strengthening monitoring of contractor costs and
performance; streamlining the Award Fee process; and improving oversight and
instituting greater accountability for contract management throughout the program.
Since 1991, EPA staff have worked diligently on implementing these improvements in all
ARCS contracts. The improvements have led to cost savings through reduced charges
for contract administration and increased scrutiny of contractor costs.
Many of the recommendations have also had a significant impact on improving
contract management in other Superfund contracts. In addition, they have led to tighter
controls in the next generation of EPA's clean-up contracts being placed under the Long
Term Contracting Strategy. These changes, such as requirements for more detailed
independent government cost estimates, enable EPA to manage the expenditure of
contract dollars better. Following the ARCS Task Force report, the EPA's
Administrator commissioned a review of procurement and contracts management at
EPA. The contracts improvements by the "Standing Committee on Contracts
Management", as the task force was called, are in the process of being implemented and
thus are beyond the scope of this report.
This chapter describes the ARCS management successes EPA has had in four key
areas. They are:
• Reduction in Program Management Costs;
• Streamlining the Award Fee Process;
• Strengthening ARCS Contract Controls; and
• Increased Oversight and Senior Management Accountability.
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5.1 REDUCTION IN PROGRAM MANAGEMENT COSTS
During the past two years, EPA has succeeded in reducing its ARCS contractor
program management costs from 20% of total contract costs to 12%. EPA has also
taken action to restructure the program management cost category by breaking it down
into administrative and technical support costs/ This allows the agency to monitor costs
more closely and better document contractor costs. In addition, EPA now evaluates
contractors' control of program management costs in determining contractors'
performance award fee.
Under the Superfund program, EPA must account for all cleanup costs related to
a site in order to successfully recover costs from responsible parties. The ARCS
contracts have two accounts where cleanup costs are charged. Site-specific costs are
charged to the remedial planning account; non-site specific costs (e.g., administrative
costs), and multi-site costs (e.g., equipment costs), are charged to program management.
The amounts expended by contractors under program management during the first few
years of the ARCS contracts were high compared to the remedial planning costs and
total contract expenditures. EPA's successes in reducing program management
expenditures and closer monitoring are described below.
Controlling Program Management Costs
The ARCS Task Force recommended improving cost control in the ARCS
contracts to reduce administrative expenditures. The ARCS Task Force recommended a
target ratio be set at 20% for program management costs against total contract
expenditures. This target was subsequently lowered by Congress in appropriations
language to 15% for fiscal year 1992, 12% for FY 1993 and 11% for FY 1994. EPA's
actions to control costs resulted in EPA achieving the program management
Congressional targets for FY 1992 (with an actual ratio of 13.9%) and FY 1993 (a ratio
of 11.9% for the 9 months of available data). The implementation of targets brought
program management costs down from an FY 1990 high of S30.2M of a total $106M in
contract expenditures to a decreasing $24.7M of a total $166M in increased contract
expenditures during FY 1992. The national target continues to decrease each year,
encouraging contractors cleaning up sites to manage administrative costs wisely, or to
shift costs previously charged to program management to more appropriate cost areas,
especially site specific accounts.
In keeping with this later initiative, the ARCS task force also recommended
restructuring the program management cost category to provide for more accurate
tracking of costs. Due to the size of the ARCS contracts and the broad definition of
program management activities, the costs accumulating into the program management
category were substantial. As a result, EPA was vulnerable to misplaced costs being
charged and paid for under program management, since invoices lacked sufficient detail
for EPA to monitor and control costs effectively.
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Refinements in Program Management Cost Tracking
In response to the Task Force recommendation to restructure the program
management cost category, EPA developed and issued guidance on program
management activities under ARCS that specified that program management costs
should be segregated into administrative support and technical cleanup costs.
Contractors have begun providing a summary level report of program management by
cost element, and to invoice their program management administrative and technical
cleanup costs separately. In addition to enabling the Agency to more efficiently monitor
costs, the breakdown will also enable the Agency to better report the actual expenditures
on hazardous waste site cleanups.
This program management restructuring effort has permitted the government to
improve its ability to track administrative costs. Region 8 exemplifies how all of EPA's
Regions have adopted the new program management restructuring. The project officer
and contracting officer have established new approval procedures to control travel and
equipment purchases. Travel and equipment purchases must now be reviewed and
approved by the project officer before costs are incurred. Approved expenditures are
then tracked and monitored carefully using the new program management structure.
Award Fee Changes
In addition to setting program management goals and restructuring administrative
costs reporting, the Task Force recommended adopting contractor effectiveness in
controlling costs as a factor in the award fee evaluation process. Historically, ARCS
contractors were evaluated on task and management performance. Cost control was
factored into task evaluations, but was not a stand alone criteria for program
management. The establishment of program management cost goals, the ongoing efforts
to reduce program management expenditures, and the addition of cost control as an
evaluation criteria effectively augmented the Agency's cost control efforts. The Regional
ARCS contract managers have used this evaluation criteria effectively. For example, in
Region IV, contracting officers routinely provide the performance evaluation board with
an analysis of program management costs and factors affecting the program management
of individual contractors so that the ARCS contracts can be evaluated on their efforts in
attaining the program management goals.
Future Contracts
The lessons learned in controlling administrative costs have been applied in the
next generation of Superfund cleanup contracts. Program management as an accounting
category has been replaced with individualized specific cost categories, (e.g., equipment,
mobilization, and contract reporting). These specific categories result in contract
managers having much better control in reviewing, tracking and minimizing
administrative costs.
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5.2 STREAMLINING THE AWARD FEE PROCESS
The ARCS contracts are cost-plus-award-fee type contracts. Under this type of
contract, the fee, which can total up to 10% of the contract value, is comprised of a base
fee portion and an award fee portion. The base fee does not vary with the quality of
performance. It compensates the contractor for risk and allows for costs incurred but
not accommodated under standard government contracts, such as financing costs. To
provide added incentive fee pool is available whenever the contractor achieves high-
quality performance. The award fee is dependent on EPA's evaluation of the
contractor's performance.
A formal performance evaluation procedure is the backbone of the incentive
concept. The ratings given during the evaluation process are used in determining the
amount of fee given a contractor. Contractor performance is also considered when
allocating new work among several contractors. The evaluation requires EPA work
assignment managers and contractor project managers to write reviews, document
performance and determine ratings for specific categories of work. The ratings are then
evaluated by an EPA Performance Evaluation Board. The board reviews and critiques
the evaluations prepared for each work assignment and agrees on the quality ratings for
each contractor. The board's recommendations are then forwarded to an EPA Fee
Determination Official, who assesses the soundness of the decisions, and makes the final
determination on the amount of fee. Board recommendations may be overruled by the
Fee Determination Official.
Although effective, the performance evaluation process for determining the award
fee is labor intensive and time consuming. In order to streamline the process, the
reviews for the ARCS contracts were adjusted from three to two times a year, but they
still took an inordinate amount of effort to prepare, conduct and document.
The ARCS Task Force Report recommended an evaluation of the Award Fee
system to determine if it could be further streamlined, with particular attention to the
paperwork burden and the issue of national consistency. A group of EPA staff who
manage the ARCS contracts identified several adjustments that improve the existing
system. Their recommendations were summarized in an EPA Directive, issued in
September 1992, that outlines the steps to streamline the award fee process and reduce
the overall cost to the Agency. The improvements are discussed in the following
sections.
ARCS Contractors' Self-Evaluations Are Now Limited to Highlights of
Performance
As part of an objective award fee process, contractors are allowed to submit a
self-evaluation for inclusion in the performance evaluation package that is submitted to
the EPA Performance Evaluation Board. Over the years, these "contractor self-
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evaluations" had become lengthy and quite detailed. Since EPA pays for the contractor
to perform its self-evaluation, it is in the Agency's interest to limit the contractor's
evaluation to the minimum length and detail necessary. In addition, it is time consuming
for the performance evaluation board to review lengthy contractor evaluations.
Nationally, ARCS contractors' self-evaluations were limited to a maximum of ten
pages. Exceptions were limited to cases where performance problems were evident, in
which case, the contractor could include their views and corrective actions as an
appendix. In addition, contractors were required to refocus their self-evaluations to
include a section on program management and other critical areas established by each
EPA regional office.
By limiting the length of contractor self-evaluations, the direct contractor costs
associated with performance evaluation were reduced. In addition, the regional
workload was reduced as a result of more concise contractor reporting. A final direct
benefit is that contractor reports now include an evaluation of program management
which helps the EPA regions control non-site costs.
EPA Establishes Thresholds for Evaluation of ARCS Work Assignments
Under the original award fee process established for ARCS contracts,
performance was typically evaluated for every work assignment worked on during the
period being evaluated. This could include anything from four hours of effort to 4,000
hours of effort. Since individual reviews and ratings were prepared for each work
assignment, an inordinate amount of time and energy was being expended on evaluating
small amounts of work.
The EPA Regions were directed to establish hour thresholds under which work
assignments would no longer be individually evaluated, (e.g., 100 hours), unless there was
unsatisfactory performance. Therefore, the contractor's award for these hours is based
on satisfactory performance and work assignments below the threshold are only
evaluated if warranted by unsatisfactory performance.
This policy helps focus Superfund's performance evaluation efforts on high cost,
high impact work assignments while at the same time reducing paperwork and costs.
EPA to Increase Performance Incentives in New Generation of Remedial
Contracts
EPA is currently placing the Remedial Action Contracts (RACs), which will
replace the existing ARCS contracts. The award fee plan for these contracts will include
greater performance incentives and fewer administrative requirements. The increased
performance incentive is achieved by limiting the availability of award fee to
performance that exceeds EPA's expectations. The administrative burden is also reduced
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by eliminating distribution of provisional award fee. Superfund will incorporate the
award fee process improvements into all new contracts under the Superfund LTCS.
5.3 STRENGTHENING ARCS CONTRACT CONTROLS
EPA contracts, in particular the ARCS contracts, have been under scrutiny by
Congress for EPA's lack of adequate contract controls. In an effort to address its
vulnerabilities, the EPA Superfund program has taken action to ensure proper controls
are in place to efficiently monitor contracts and safeguard the government against waste,
fraud, and abuse.
Under ARCS, which are cost-reimbursement type contracts, diligent contract
monitoring is important because the primary cost risk rests with the Agency and not the
contractor. In an effort to lower these risks, EPA contract managers perform frequent
financial monitoring. EPA contract managers use an array of contract controls to ensure
good contracts management. These methods include: developing independent
government cost estimates prior to issuing work, scrutinizing monthly contractor invoices
during work assignments, and implementing guidance on techniques to monitor costs.
Independent Government Cost Estimate
EPA has received criticism over the years that contractors have a hold over the
Superfund program, not only by the high percentage of work contracted out but also
because they establish the cost of the work. Criticism stemmed from EPA's over-
reliance on contractors' recommendations regarding the cost to perform work at
hazardous waste sites. Prior to the directive requiring Independent Government Costs
Estimates (IGCEs), EPA work assignment managers used their best judgement in
evaluating a contractor's cost proposal for a task. The Agency now requires the
development of an Independent Government Cost Estimate for every new work
assignment or work assignment modification expected to exceed $25,000. The IGCE is
used by the EPA contract manager as a tool in negotiating the workplan budget with the
contractor and for documenting the resulting agreements in the contract file. The IGCE
provides enough detail to allow EPA contract managers to determine whether the
approach and costs are realistic and reasonable. Therefore, the IGCE is a good measure
to assess the validity of the contractor's proposal.
The EPA contract manager holds considerable negotiation leverage when realistic
IGCEs are developed prior to contractor work plan negotiations. The exercise of
developing IGCEs also demonstrates to EPA contractors that the government
negotiation team is fully prepared to question contractor assumptions and negotiate
realistic costs for the work to be performed.
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Invoice Review
EPA has also received criticism on its procedures for reviewing invoices. The
problem was due in part to unclear roles and responsibilities of the EPA contract
managers regarding invoice reviews. EPA has since implemented changes in contractor
invoice reviews, instituting clear accountability and responsibility of contract managers
regarding the invoice review process.
Work assignment managers are being offered refresher training on how to review
their contract invoices carefully, how to question charges properly and to
suspend/disallow payments. EPA work assignment managers are now required to
provide written certifications or recommendations concerning cost reasonableness to the
EPA project officer. This has resulted in a better system of internal control within EPA
Regional offices. Also, there is a greater assurance that all costs billed by contractors
are being thoroughly reviewed by EPA personnel prior to payment, and any
inappropriate costs are being questioned and may be disallowed.
In an effort to assure continuous improvement, a Quality Action Team (QAT)
was recently established within EPA to review in detail the invoice review and payment
process. This QAT will 1) identify any data gaps, for financial oversight purposes, in
vouchers and monthly reports submitted by contractors, 2) identify any inefficiencies or
areas of vulnerability in the current voucher review process, and 3) make
recommendations for development of new contract requirements, if appropriate, to
ensure that invoice and monthly progress reports contain adequate information for EPA
staff to assess reasonableness of charges. A report from this team, along with
recommendations for change if appropriate, is expected in June of 1994.
Remedial Cost Management Manual
In another effort to control costs and improve contract management, EPA is
developing the Remedial Cost Management Manual. This document presents a
universal set of cost management practices and procedures for EPA personnel who have
the responsibility for managing work assignments under Superfund contracts. The
manual includes procedures for developing independent government cost estimates,
scoping, reviewing project costs, budgeting, and managing schedules. When completed,
the manual will serve as a handy reference guide for work assignment managers to use in
monitoring and controlling work assignment costs.
Regional Reviews
In an effort to monitor the Regions' progress in implementing the ARCS study
recommendations, a Headquarters review team was established to conduct a series of
Regional reviews. The purpose of the reviews is to determine whether the Regions are
effectively implementing the recommendations contained in the ARCS Task Force
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report, and to determine if other issues or factors may be acting as barriers to good
contracts management. The team is responsible for assessing first hand the contract
management practices in each EPA Region. These reviews provide valuable insight into
Regional activities and issues, and help assure that ARCS Task Force recommendations
are being implemented.
The review team makes recommendations to the Regions in the areas of program
management, ARCS Task Force contract controls, ARCS contractor audits and reviews,
award fee process, and EPA's management processes and organization. The Regions
heed the recommendations of the review team. For example, the reviews have resulted
in more active Regional Management Teams in most of the Regions visited, thereby
assuring high-level management attention to contracts management issues. The
information obtained during these reviews also assists EPA in better responding to
Congressional concerns and inquiries.
5.4 INSTITUTION OF SENIOR MANAGEMENT ACCOUNTABILITY AND
OVERSIGHT
The EPA administered Superfund contracts represent the largest system of
contracts within EPA and are among the largest in the civilian portion of the Federal
Government. Although contracting is a key component of the Superfund program,
management of contracts has historically been fragmented among EPA offices. There
was no central link between the program's mission and the acquisition process. It is
important for EPA to ensure that Superfund contracts and the acquisition of services are
best utilized and managed to meet the Superfund mission.
Given the reliance of the Superfund program on the services of outside parties,
the management of the acquisition of those services is of unique importance. In order to
manage the process, EPA created the position of an Acquisition Program Manager, who
reports directly to the Assistant Administrator responsible for overseeing Superfund
acquisition decisions and activities.
ARCS Council
In addition to designating a single point of contact for Superfund Acquisitions in
the Superfund program, the Task Force also recommended the formation of an ARCS
Council, consisting of Headquarters and Regional personnel, to identify issues and
improve ARCS contract management on a continuous basis. The ARCS Council
includes management officials from both the Regions and Headquarters to assure the
integration of technical program considerations and contracts management issues and to
provide continuing top-level management ownership of and involvement in the contracts
management process.
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Regional Management Teams
Contributing to the ARCS Council are the ideas and recommendations of the
Regional Management Teams. The Regional Management Teams were established to
bring together contracting officers, technical staff and supervisors in the management of
the ARCS contracts in each Region.
The ARCS Council, Regional Management Teams and the Acquisition Program
Manager together form the infrastructure for coordinating and communicating across
Regions about issues and vulnerabilities in contracts management. This communication
is critical to successful contracting in EPA, particularly in the Superfund program where
contracts are being decentralized. Through the ARCS Council, the Regional
Management Teams are tasked with evaluating the management of their contracts and
reporting to the council on their findings.
Although many of the issues the Regional Management Teams have been
addressing are the recommendations of the ARCS Task Force, the teams have also been
proactive in identifying areas of improvement within their own Regions. For example,
under the direction of the Regional Management Teams, most Regions have conducted
contract 'Vulnerability assessments." Invoice review was identified by several Regions as
a vulnerable area. Many Regions have developed contract specific training, offered
informally through such efforts as brown-bag lunches or seminars, to educate and
improve work assignment managers' skills in invoice review. Work assignment managers
have highlighted these seminars as extremely useful in improving their effectiveness in
managing contracts.
Senior Regional Management Acquisition Council
The deliberations of the Regional Management Teams and the ARCS Council
has resulted in the successful implementation of the ARCS Task Force report
recommendations, and facilitated in sharing performance information across the Regions.
Recently, in a move to consolidate Superfund contract management initiatives, the
ARCS Council was merged with the group working on implementing Superfund's Long-
Term Contracting Strategy. It has been renamed the Senior Regional Management
Acquisition Council.
As a result of the efforts of many dedicated work assignment managers, contract
managers and supervisors over the past two years, EPA has established the foundation
for proper management of the ARCS contracts, and a good baseline of proper contract
management for future Superfund procurements.
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