TABLE OF CONTENTS
SCOPE AND OBJECTIVES 1
SUMMARY OF FINDINGS 3
ACTION REQUIRED 5
BACKGROUND 6
FINDINGS AND RECOMMENDATIONS . 9
1. LENGTH OF REGIONAL REVIEWS DELAY
SUPERFUND CLEANUPS 9
2. REGION NEEDS TO BE MORE AGGRESSIVE IN
ASSESSING STIPULATED PENALTIES 18
3. OVERSIGHT OF TECHNICAL ENFORCEMENT SUPPORT
(TES) CONTRACTORS NEEDS IMPROVEMENT 24
4. OVERSIGHT COSTS WERE NOT BILLED AND COLLECTED
IN A TIMELY MANNER 34
EXHIBIT 1. EPA REVIEW OF VARIOUS PRP SUBMITTED WORK
PRODUCTS 38
EXHIBIT 2. CASE STUDIES OF LENGTHY REVIEW PROCESS 40
EXHIBIT 3. OVERSIGHT COSTS TO BE RECOVERED - FY 87
AND 88 45
APPENDIX 1. REGIONAL RESPONSE TO DRAFT REPORT 47
APPENDIX 2. DISTRIBUTION 71
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AOC
CERCLA
EPA
ERRD
FOP
FY
HASP
ITM
NYSDEC
OIG
OP
OSWER
OWPE
PCBs
POP
PRP
QA
RD/RA
RI/FS
ROD
RPO
ABBREVIATIONS
Administrative Order on Consent
Comprehensive Environmental Response,
Compensation and Liability Act
Environmental Protection Agency
Emergency and Remedial Response Division
Field Operations Plan
Fiscal Year
Health and Safety Plan
Interim Technical Memorandum
New York State Department of Environmental
Conservation
Office of Inspector General
Operations Plan
Office of Solid Waste and Emergency Response
Office of Waste Programs Enforcement
Polychlorinated Biphenyls
Project Operations Plan
Potential Responsibility Party
Quality Assurance
Remedial Design/Remedial Action
Remedial Investigation/Feasibility Study
Record of Decision
Regional Project Officer
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SARA
SOP
SOW
TCE
TES
Superfund Amendments and Reauthorization Act
Site Operations Plan
Statement of Work
Trichloroethylene
Technical Enforcement Support
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/X*;
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF THE INSPECTOR GENERAL
EASTERN AUDIT DIVISION
J F KENNEDY FEDERAL BUILDING
Room 1911
Boston Massachusetts 02203-1911
1617)565-3160
FT S 8-835-3160
NEW YORK OFFICE
90 Church Street
Suite 802
New York NY 10007
(212)264-5730
SUBJECT:
FROM:
To:
March 29, 1990
Review of Region 2's Oversight of Superfund
Post-Settlement Activities
Audit Report No. £15^109^02-0055-0100230
Paul D. McKech_
Divisional Inspector
Eastern Division
for Audi
C. Sidamon-Eristoff
Regional Administrator, Region 2
SCOPE AND OBJECTIVES
We have completed our review of Region 2's oversight of Superfund
post-settlement activities. The purpose of our review was to
determine the timeliness and effectiveness of the Region's
actions with respect to post-settlement activities. We performed
this review as part of our internal audit program which reviews
Agency operations. Our objectives were to determine whether:
o The Agency is adequately monitoring compliance
with settlements and taking effective measures
when parties are not in compliance.
o Applicable penalties and damages for noncompliance
are assessed and collected.
o The Agency is adequately monitoring enforcement
support contractors' oversight of potential
responsible party (PRP) post-settlement
compliance.
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The Superfund program has been the focus of intense scrutiny for
many years from a variety of quarters, including the Office of
Inspector General (OIG), the Congress, the media, the scientific
community, private parties, ard EPA management. While Congress
has allocated billions of dollars to address the cleanup of
hazardous waste sites, the public coffers will not be sufficient
to solve the entire problem. The Superfund law requires,
therefore the Agency established, an enforcement program to
either seek voluntary compliance with or administrative and court
ordered compliance by parties identified as contributing to the
cause of the site's public health risk. Our review focused on
EPA activities in Region 2 after the issuing of settlement
documents to PRPs.
To accomplish our objectives we interviewed personnel from the
Office of Enforcement and Compliance Monitoring (OECM) and the
Office of Solid Waste and Emergency Response (OSWER) at
Headquarters; the Emergency and Remedial Response Division
(ERRD), Financial Management Branch (FMB) and Office of Regional
Counsel (ORC) at the Regional Office in New York and the
Monitoring Management Branch (MMB) at Edison, New Jersey. We
also reviewed project files, status reports, computer printouts,
OSWER Directives and other policies and guidance.
Our review focused on EPA initiated settlement documents that
were issued between Fiscal Years (FYs) 1986 and 1989. Our case
sample was chosen from a review of the Region 2's SCAP-2 Report,
dated May 6, 1989, National Priority List Site Summary. We
judgmentally selected 13 cases from the 37 Federal lead sites
with settlement documents issued during our review period. The
vast majority of documents issued by the Region during our review
period pertained to a Remedial Investigation/Feasibility Study
(RI/FS) and our sample reflected that fact. In addition, we
chose a mix of New York and New Jersey cases. We did not select
cases from Puerto Rico since only a minimal number were issued.
We also assured that at least half had Technical Enforcement
Support contractors assignments to allow for the accomplishment
of our objectives.
We performed the review in accordance with the Government
Auditing Standards (1988 Revision) issued by the Comptroller
General of the United States and accordingly included such tests
of the records and other administrative procedures as we
considered necessary in the circumstances. No other significant
issues came to our attention that warranted additional audit
time. We also reviewed the Region's submission relative to the
Federal Managers' Financial Integrity Act and found no issues
relevant to our audit. An audit survey was conducted from
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November 28, 1988 to May 31, 1989. This survey reviewed the
overall effectiveness of Superfund settlements and studied both
pre and post-settlement process and actions. The survey found
areas in the post-settlement phase of the Superfund enforcement
process which required more detailed review. Fieldwork on the
audit phase began on July 19, 1989 and was completed December 6,
1989.
SUMMARY OF FINDINGS
Region 2 needs to intensify its efforts in overseeing PRP
activities. This will assure timely completion of Superfund
cleanups and proper compliance with settlement requirements.
With the Agency's heightened emphasis on enforcement, the number
of settlements are expected to dramatically increase. The
ability of EPA to properly oversee PRP activities will become
increasingly important. We found that the initiation of
Superfund cleanup work was unnecessarily delayed; stipulated
penalties were not being assessed for noncompliance with
settlement milestone dates; improvement was needed in the
oversight of Technical Enforcement Support contractors; and
oversight costs were not being recovered from PRPs. These
conditions occurred because of a variety of reasons which will be
addressed in the following summary. This situation can increase
the potential for adverse public health effects and further
environmental degradation, as well as deprive the Superfund Trust
Fund of monies that could be utilized on other site cleanups.
The following paragraphs summarize the areas where we believe
improvements are needed.
1. LENGTH OF REGIONAL REVIEWS DELAY SUPERFUND CLEANUPS
Initiation of Superfund cleanup work was unnecessarily delayed
after the Region had reached a settlement with PRPs. The
approval of workplans, project operation plans and other
documents required prior to initiating field work on RI/FSs, or
other work phases took between 6 and 36 months. This occurred
because of a lengthy review process which lacked definitive EPA
review and approval timeframe guidelines. In addition, the
Region did not maintain an automated post-settlement tracking
system to monitor the timeliness of PRP submissions or the
overall status of settlement cases. Another contributing factor
was an understaffed and overworked project manager corps which
could not always devote essential review time to individual
projects. As a result, Superfund cleanup actions were
significantly prolonged (up to several years) increasing the
potential for adverse public health effects and further
environmental degradation.
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We recommend that guidelines be developed and implemented which
set specific timeframe deadlines for Regional review and approval
of PRP submissions. We also recommend the development and
implementation of an automated tracking system to monitor
specific post-settlement milestone dates. In addition, we
recommend streamlining the review process for PRP draft
submissions. We further recommend the review of project
managers' workload to determine whether any reassignments are
necessary to better equalize workload. Finally, we recommend
that a systematic approach for the preservation of documentation
in project files be developed and implemented.
2. REGION NEEDS TO BE MORE AGGRESSIVE IN ASSESSING STIPULATED
PENALTIES
Stipulated penalties were not being assessed for noncompliance
with settlement milestone dates. The Region refrained from
taking aggressive enforcement action, limited its actions to
verbal negotiations or warning letters and had only sought
penalties in extreme instances. The Region did not assess PRPs
as much as $1,157,500 in penalties for two of the 13 cases we
reviewed. As a result, there was no inducement for PRPs to
comply with compliance order requirements. This lack of
enforcement encourages PRPs to delay implementing important
provisions of the settlement document which leads to an
unnecessary lengthening of the overall cleanup process. This can
detrimentally affect the public health and the environment. We
recommend the Emergency and Remedial Response Divisiort^"in
concert with the Office of Regional Counsel, aggressively pursue
the option of stipulated penalties when PRPs are in noncompliance
with settlement document requirements. Justification should be
provided and approved by appropriate Regional managers in those
instances where stipulated penalties are not pursued.
3. OVERSIGHT OF TECHNICAL ENFORCEMENT SUPPORT (TES1 CONTRACTORS
NEEDS IMPROVEMENT
The Region needs to improve its oversight responsibilities of TES
contractors. Specifically, the Region did not effectively
monitor the timely submission and processing of required
contractor reports and plans; conduct and document field
oversight reviews, quality assurance audits, and contractor
office reviews; and give emphasis to project manager training.
These conditions occurred because of inadequate monitoring,
untimely or lengthy Regional reviews and approvals, lack of
written procedures and low priorities or insufficient resources
assigned to certain tasks. As a result, there were work
stoppages and unnecessary delays which have contributed to a
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lengthier cleanup process, there was no assurance that TES tests
or records were reliable or accurate and there was no assurance
that project managers were sufficiently knowledgeable to
adequately administer TES contractors. We recommend the Region:
(i) improve the quality and timely EPA monitoring of TES
contractors' required reports and workplan submittals and
compliance with milestone dates; (ii) expedite the Regional
review and approval system for TES deliverables; and (iii)
develop timetables and minimum requirements for periodic field
oversight reviews/ quality assurance audits, and contractors
office reviews are scheduled, performed and adequately
documented. We also recommend that project managers be required
to attend prescribed training. Such training should generally be
received prior to performing TES oversight responsibilities.
4. OVERSIGHT COSTS WERE NOT BILLED AND COLLECTED IN A TIMELY
MANNER
The Region had not sought to recover from PRPs costs for cleanup
oversight as stipulated in settlement documents. Regional
management had given only limited attention to enforcing this
settlement requirement. In addition, project managers had made
this a low priority in their overall handling of individual
sites, and cost recovery packages were not adequately or timely
prepared to document costs claimed. As a result, the Region had
not recovered at least $627,761 for the Superfund Trust Fund that
could have been invested and earning interest, thus lessening the
amount available for appropriation. We recommend that the Region
establish and implement an effective system for the timely
recovery of oversight costs involving Superfund cleanup sites.
We also recommend that the Region initiate action to collect the
$627,761 in oversight costs identified in our report.
A written response to the draft report was submitted by the
Region on March 27, 1990 (See Appendix 1, without attachment).
An exit conference was not held with Regional Officials since
they stated that the written response adequately presented their
viewpoint. We evaluated the Region's comments and revised the
report where appropriate. Where differences still exist, we have
summarized the Region's comments and our response in the ensuing
paragraphs. These comments were considered when finalizing our
report. The entire response is available for review upon
request.
ACTION REQUIRED
In accordance with EPA Directive 2750, the action official is
required to provide this office with a written response to the
audit report within 90 days of the audit report date.
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BACKGROUND
In 1980, Congress passed the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA), commonly
called Superfund. This law provides the U.S. Environmental
Protection Agency (EPA) with the authority and necessary tools to
respond directly or to compel potentially responsible parties
(PRPs) to respond to releases or threatened releases of hazardous
substances, pollutants or contaminants. PRPs are parties
identified as having owned or operated hazardous substance sites,
or who have transported or arranged for disposal or treatment of
hazardous substances, pollutants or contaminants at such sites.
CERCLA was reauthorized and amended on October 17, 1986 by the
Superfund Amendments and Reauthorization Act (SARA). SARA
provides EPA with new authorities and tools that strengthen the
enforcement program.
The Superfund program has been the focus of intense scrutiny for
many years from a variety of quarters, including the OIG, the
Congress, the media, the scientific community, private parties,
and EPA management. The necessity for this heightened attention
is the importance of the public health threat that Superfund
sites pose.
EPA has designated or proposed 1,219 sites for the National
Priority List (NPL). The NPL identifies sites for long-term
remedial action under CERCLA, as amended by SARA. EPA has the
primary responsibility for managing the cleanup and enforcement
activities for these sites.
While Congress allocated billions of dollars to address the
cleanup of these hazardous waste sites, the public coffers will
not be sufficient to solve the entire problem. The Superfund law
requires, therefore the Agency established, an enforcement
program to either seek voluntary compliance with or
administrative and court ordered compliance by parties identified
as contributing to the cause of the site's public health risk.
If EPA believes the PRP is willing and capable of doing the work,
EPA will attempt to negotiate an enforcement agreement with the
PRP(s). The enforcement agreement may be an agreement entered in
court (such as a judicial consent decree) or it may be an
administrative order (where EPA and the PRP(s) sign an agreement
outside of court). Both of these agreements are enforceable in a
court of law. Under both agreements EPA oversees the PRP. If a
settlement is not reached, EPA can use its authority to issue a
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unilateral administrative order or directly file suit against the
PRP(s). Under either course of action, PRPs are directed to
perform removal or remedial actions at a site. If the PRPs do
not respond -to an administrative order, EPA has the option of
filing a law suit to compel performance.
By the end of Fiscal Year 1988, EPA's Office of Emergency
Response reported to Congress that the Agency had negotiated
responsible party settlements worth an estimated $1 billion.
These settlements are for (1) long-term site cleanup activities;
(2) short-term emergency cleanup action/ or (3) activities such
as site sampling. The long-term cleanups can include site
studies or partial cleanups with additional settlements needed to
achieve a final remedy.
EPA is ultimately responsible for all NPL sites and, therefore,
must assure that site cleanups including those performed by
responsible parties are consistent with Superfund
requirements. EPA's Assistant Administrator for Solid Waste and
Emergency Response and the Assistant Administrator for
Enforcement and Compliance Monitoring are primarily responsible
for overseeing priority site settlements. Their offices set
EPA's overall policies and procedures for these settlements,
while EPA's Regional offices actually manage and perform the
oversight function.
In Region 2, the Emergency and Remedial Response Division (ERRD)
is responsible for all Superfund activities. Within ERRD
oversight for remedial action activities is divided between
Remedial Programs (Superfund Trust Fund lead) and Enforcement
Programs (PRP lead).
The initial phase in the process for most settlement documents is
the RI/FS. PRPs are currently conducting 50 to 60 percent of the
RI/FSs at nationwide Superfund sites. With increased emphasis on
PRP participation, the percentage of PRP lead activity is
expected to grow. The RI/FS is a vital key to the site's
remediation. It is the part of the process that identifies the
scope of the problem and proposes potential remedies. It is also
the building block from which the success of the cleanup effort
is developed. Delays at this critical point in the process
effectively postpone accomplishing the remainder of the site
cleanup since all other aspects (i.e. Record of Decision,
construction phase, etc.) follow.
The Regional Project Manager (RPM) has primary responsibility for
managing the RI/FS and Remedial Design/Remedial Action (RD/RA)
oversight. The RD/RA details design plans and specifications for
conducting the site cleanup. In general, the RPM is responsible
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for accomplishing four primary objectives during the RI/FS: (i)
verifying that the work complies with the settlement document and
the Statement of Work; (ii) verifying that the RI/FS complies
with CERCLA, the National Contingency Plan and relevant Agency
guidelines; (iii) verifying that all work is performed according
to generally accepted scientific and engineering methods; and
(iv) verifying that sufficient data is being collected and
analyzed to enable EPA to identify site risks, develop
alternatives, select a preferred remedial alternative and write
the Record of Decision (ROD).
If the RPM requires technical assistance in performing his/her
oversight responsibilities for PRP-lead RD/RAs, enforcement
support contractors such as Technical Enforcement Support (TES)
contractors can be utilized.
EPA also has the authority to impose civil penalties of up to
$25,000 a day on parties that are in noncompliance with
settlement documents.
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FINDINGS AND RECOMMENDATIONS
INTRODUCTION
Region 2 needs to intensify its efforts in overseeing PRP
activities. This will assure timely completion of Superfund
cleanups and proper compliance with settlement requirements.
With the Agency's heightened emphasis on enforcement, the number
of settlements are expected to dramatically increase. The
ability of EPA to properly oversee PRP activities will become
increasingly important. We found that the initiation of
Superfund cleanup work was unnecessarily delayed; stipulated
penalties were not being assessed for noncompliance with
settlement milestone dates; improvement was needed in the
oversight of Technical Enforcement Support contractors; and
oversight costs were not being recovered from PRPs. These
conditions occurred because of a variety of reasons which will be
addressed in the following pages. This situation can increase
the potential for adverse public health effects and further
environmental degradation, as well as deprive the Superfund Trust
Fund of monies that could be utilized on other site cleanups.
Our findings follow.
1- LENGTH OF REGIONAL REVIEWS DELAY SUPERFUND CLEANUPS
Initiation of Superfund cleanup work was unnecessarily delayed
after the Region had reached a settlement with PRPs. The
approval of workplans, project operation plans and other
documents required prior to initiating field work on Rl/FSsf or
other work phases took between 6 and 36 months. This occurred
because of a lengthy review process which lacked definitive EPA
review and approval timeframe guidelines. In addition, the
Region did not maintain an automated post-settlement tracking
system to monitor the timeliness of PRP submissions or the
overall status of settlement cases. Another contributing factor
was an understaffed and overworked project manager corps which
could not always devote essential review time to individual
projects. As a result, Superfund cleanup actions were
significantly prolonged (up to several years) increasing the
potential for adverse public health effects and further
environmental degradation.
OSWER Directive 9835.1A details the various documents and plans
that must be prepared and approved before field activities can
commence at a Superfund cleanup site. Prior to issuing a
settlement document the Region should send a Statement of Work
(SOW) to the PRPs. The SOW describes the broad objectives and
general activities to be undertaken in the RI/FS. Once the PRPs
receive the SOW, they develop a more detailed Workplan, which is
submitted for Agency review and approval.
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RI/FS project plans include those plans developed for the RI/FS.
At a minimum they should include a Workplan, Sampling and
Analyses PLan, and Health and Safety Plan (HASP). EPA develops
the Community Relations Plan. EPA review and approval of the
project plans will be required before PRPs can begin site
activities.
PRPs must submit all required RI/FS project plans (except the EPA
developed Community Relations Plan) to EPA for review and
approval. EPA will review the plans for technical validity and
consistency with the National Contingency Plan (NCP) and relevant
EPA guidance. The Agency must review and approve these plans
before PRPs can begin site activities.
EPA will review all project plans (deliverables) in fulfillment
of the settlement agreement. If the initial submittals lack
sufficient content or scope, the Regional Project Manager will
request that the PRPs submit revised documents within a specified
time period. When all required project plans have been reviewed
and accepted, EPA will approve the PRP's commencement of field
activities and other workplan tasks.
We found that in 12 of 13 cases reviewed, the Regional process of
approving workplans, project operation plans and other documents
required prior to initiating field work on RI/FSs and other work
phases took between 6 and 36 months. This time was measured from
the initial submission of the document by the PRP. In most of
these cases (10 of 12) Regional approval was an 8 to 16 month
process. (See Exhibit I).
One major factor causing delays in the approval process was a
cumbersome EPA review procedure which allowed the continued
involvement of many interested parties with no time restrictions
on how long the review should take. Typically, plans or reports
submitted by PRPs would require three or four major revisions
before final Regional approval. For example, one case we
reviewed had a Field Operation Plan (FOP) that was submitted on
time by the PRP. Approximately two months later, EPA answered
with eight pages of comments, and the PRP responded one month
later. After two additional months had elapsed, the Region
responded with five more pages of comments. One month later, the
PRP once again addressed these comments. Two months later the
Region issued four more pages of comments. The PRP submitted its
final revision one month later, and EPA approved it 10 days
later. This entire process took 10 months. This was not an
isolated case. We found case after case involving similar
delays.
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The Administrative Order in the above case required the PRP to
submit a FOP within 30 days of the effective date of the
settlement agreement for EPA review and written comment. Within
30 calendar days of receipt of EPA comments the PRP was to amend
the FOP. Therefore, while the PRP had specific timeframes to
address EPA's comments, EPA's timeframes were open-ended.
The lack of definitive guidelines for EPA's review and approval
of PRP submissions inherently contributes to a lengthening of the
process. Milestones were not established for project managers to
strive for and there was a tendency to permit time to pass since
there was no pressure to meet a specific date. While we
recognize that there may be strategic reasons for the absence of
specific EPA review timeframes in settlement documents, for
example legal complications which could result, established
internal Agency guidelines would commit staff to a more
expeditious handling of post-settlement documents.
The review procedure was also compounded by the numerous parties
involved in the process. Within EPA all of the following may
review and comment on a PRP submittal: various Branches of ERRD,
Air and Waste Management Division, Water Management Division,
Environmental Services Division (especially the Monitoring
Management Branch), and Office of Policy and Management
(Environmental Impact Branch). In addition, State Environmental
Agencies are actively involved (the New York State Department of
Environmental Conservation (NYSDEC) and the New Jersey Department
of Environmental Protection (NJDEP)), as can be the State
Departments of Law and Health. Comments are also solicited from
other agencies including the U.S. Department of Interior,
National Oceanic Atmospheric Administration, Army Corps of
Engineers, and Occupational Safety and Health Administration
(OSHA). This is in addition to comments received from EPA's TES
or other contractors. In several cases many of these parties
reviewed the numerous PRP plan/report revisions. This round
robin of comments from all these factions increased the review
process time. We found, however, that cases progressed more
timely when the project manager took primary, technical review
responsibility and limited the participants after the initial
review.
On October 31, 1989 a meeting was held with the Director, ERRD,
to discuss our preliminary findings. In a December 1, 1989
letter he stated that the process which precedes the start of
field activities requires a minimum of six to nine months to
complete. The Director indicated that many PRPs have never done
this type of technical investigation before and the materials
submitted warranted thorough review. The Director further
stated:
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EPA has also examined this process to identify possible
ways in which the process may be streamlined including
standardization of some of the workplan and operations
plan elements, preparation of workplans while
negotiating the order, and combining some workplans and
operations plans into a single document. I believe
that the 6-9 month timeframe between the order's
effective date and the start of field work is our
minimum practicable, implementable result.
With regard to the lengthier reviews, the Director also
indicated that disputes over issues arise and most significant
delays result from attempts to resolve those issues.
Another contributing factor causing delays was an inexperienced,
overworked and understaffed project manager corps. The project
managers we interviewed were generally assigned 6-12 cases
encompassing Federal enforcement lead cases, State leads,
remedial leads and removal actions. On State and remedial lead
sites, the project manager provided technical support and peer
review. The Associate Director for Enforcement stated that each
project manager may have five active cases plus remedial and
State lead sites for a total of 10-12 cases. The Associate
Director believed two to three cases would be ideal, otherwise a
"burnout" factor comes into play. • One Section Chief also stated
that two enforcement lead sites would be the optimum case load
for a project manager's time. We also believe that the project
managers were inexperienced, overworked and understaffed.
Some interviewed project managers indicated that a higher
priority was afforded the issuance of a ROD, an Administrative
Order on Consent (AOC) or a Consent Decree. These documents were
afforded full-time precedence over every day work and things were
allowed to lapse. One project manager stated that in the "bean
count" the ROD was the highest priority followed by AOCs or
Consent Decrees, since they involve annual Regional commitments;
program work was not deemed as critical. The project manager
also stated that he was constantly engaged in "putting out fires"
on two large cases which were taking up a great deal of his time.
This individual, therefore, could not devote much attention to
the day-to-day activities of other assignments. Two other
project managers also mentioned the "burnout factor" due to the
burden of their extensive job requirements. During the course of
our audit one project manager we interviewed had three cases
reassigned to other project managers due to the unmanageability
of his workload. This individual originally had 11 cases when we
initially spoke to him.
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Turnover has taken its toll at Region 2. Several cases we
reviewed had as many as three to four project managers. For
example, during the course of our field work, one project manager
and one Section Chief involved with our case sample departed
Region 2. This delayed the review process while the new
individual became familiar with the case. The Chief, Compliance
Branch, Office of Waste Programs Enforcement (OWPE), indicated
that Region 2 project managers were overworked, overloaded with
cases, and once the PRP negotiation responsibility was added,
there was an immense amount of work for a new inexperienced
staff. This sentiment was echoed by other EPA Headquarters and
Regional officials. The Director, ERRD and Associate Director
for Enforcement Programs, stated that Region 2 had experienced
the highest turnover rate in the country resulting in
inexperienced project managers who had to deal with the PRP's
experienced engineers and lawyers. Furthermore, project files
were not always maintained in an organized and orderly manner.
The disarray of these files adversely affected the new project
manager's ability to timely understand the reassigned case.
In addition to the length of the review process, the Region did
not maintain an automated post-settlement tracking system to
monitor the timeliness of PRP submissions and Regional review.
Monitoring of a specific site's progress varied by project
manager. One project manager maintained a detailed manual
schedule in which all tasks and major milestones towards reaching
ROD completion were closely monitored. Other project managers
did not monitor progress very closely, but indicated they
generally knew the site's status and if deliverables were late.
ERRD managers and supervisors relied on individual project
managers for the status of sites and any problems that might
develop. In lieu of an automated system, Region 2 implemented in
January 1989 a weekly project managers report which summarized
the site's accomplishments/activities. These reports were
discussed with the Section Chief and forwarded through the chain
of command to the Associate Director for Enforcement Programs.
Critical issues were passed along to the Director, ERRD and
possibly the Regional Administrator. The purpose of the report
was to brief EPA managers on site problems and upcoming weekly
events, and provide the status of all compliance actions. While
this weekly report contained useful information from an overall
broad management perspective, it did not track deliverables or
major milestone dates to enable Regional managers to determine
the timeliness of site activities. An automated tracking system
would provide management the status of a site at a glance, and
enable newly assigned project managers a clearer understanding of
the case.
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Moreover, on some cases we reviewed, PRPs did not always submit
required monthly progress reports. This lack of documentation
can be especially critical where case turnover or reassignment
occurs because new project managers then have one less piece of
information at their disposal.
To further detail some problems found with regard to post-
settlement activities, we have highlighted one sample case.
Additional detailed descriptions of four other sample cases are
presented in Exhibit 2.
Facet Enterprises Site
On May 22, 1986, EPA Region 2 entered into an Administrative
Order on Consent (AOC) with Facet Enterprises, Inc. (Facet) and
Allied Corporation to undertake an RI/FS. The site contained
nine potential waste disposal areas and an open storage area.
Wastes disposed of in these areas included plating wastes from
electroplating operations, heavy metal sludges, solvents, and oil
sludges. The site's hazardous substances included zinc, nickel,
cadmium, chromium, polychlorinated biphenyls ("PCBs"), arsenic,
lead selenium and trichloroethylene ("TCE"). For example, TCE
concentrations as high as 800 parts per billion (ppb) were found
in groundwater. EPA has a Maximum Contaminant Level in drinking
water of 5 ppb. TCE is suspected to be carcinogenic. Chronic
(long-term) exposure to TCE may cause damage to the heart, liver,
kidneys, and central nervous system. Exposure to TCE vapor may
also cause eye and respiratory system irritation.
The AOC required submission of a detailed workplan and
implementation schedule for additional studies necessary to
complete the RI. On May 22, 1986, Facet submitted an RI
Workplan, Quality Assurance Plan and HASP which the Region
approved, subject to incorporating additional comments, on June
13, 1986. Subsequently, on October 29, 1986, Facet through their
consulting firm submitted a timely draft RI report. It was not
until March 14, 1988 (502 days later) that the Region submitted
comments to the PRP's consultant for changes to the draft RI
report. On April 14, 1988, the PRP's consultant addressed EPA's
comments. It was not until June 13, 1989 (425 days later) that
the Region responded to the consultant's April 1988 letter.
Due to problems with the draft RI, the Region could not accept
many of the consultant's conclusions. Finally, on August 4, 1989
a meeting was held between Facet and EPA. As a result, Facet was
given six weeks to select a new consulting firm and 13 weeks to
submit a new Workplan, HASP and Quality Assurance/Quality Control
Plan. On September 22, 1989, Facet selected a new consultant-
contractor for continuing the RI and redrafting the report
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covering the previous work performed. As of the conclusion of
our field work, the revised workplan was not submitted. Thus,
nearly 3 1/2 years after the original workplan was submitted, the
RI/FS is basically starting over again, although the project
manager indicated previously gathered data will be utilized.
NYSDEC was very concerned about this large time loss and stated
in their February 26, 1988 letter: "NYSDEC provided comments on
the report to USEPA Region II in February 1987. Monthly status
reports from the consulting engineering firm preparing the RI/FS
indicate that no comments have ever been received from USEPA,
Region II as of January 1988." Further public health concern was
expressed in their September 22, 1988 follow-up letter: "As I
indicated in my February 26, 1988 letter to you, contamination
has been detected in a municipal water supply well located
downgradient from Facet Enterprises. This contamination poses a
threat to the operation of this well which provides a significant
amount of drinking water to the Elmira Water Board."
Additional public health risks were expressed in a March 14, 1989
NYSDEC letter: "It has been reported that children and pets have
access to and play in the drainage ditch. This is a potential
route of exposure to contaminants of concern. Further exposed-
population analysis needs to be conducted to determine which
populations are likely to be exposed through contact with
contaminated media. Also, if relevant epidemiological data are
available, they can provide valuable evidence of the actual type
and severity of health risk posed by the site, if any such risk
exists. Regardless of the outcome of these future studies,
common sense dictates that proper removal and disposal of
contaminant laden sediment, and/or preventing access to the
drainage ditch can eliminate this potential exposure route."
There are some mitigating factors in this case. The Facet site
is in close proximity to two other sites, Kentucky Ave.
Wellfield, a remedial (Fund) lead, and Westinghouse, an
enforcement case. The Region had attempted to handle all three
cases together. In addition, thete were seven project managers
assigned to the case due to employee turnover and reassignments.
Upon each reassignment there is a learning curve necessary for
the new individual to become familiar with the case and some time
is lost. The draft RI report was also deficient in many areas.
The REM III contractor's November 1986 review of the RI report
found it lacked several basic criteria and scope of work
requirements as delineated in the NCP. The REM contractor
indicated that "virtually no areas of NCP were satisfied
completely in this RI." A February 17, 1987 NYSDEC letter stated
"The general impression of the report is that it draws
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conclusions on the extent and severity of on-site and off-
site contamination which is insufficient. It also makes
conclusions as to the significance of contaminant levels without
relating them to acceptable USEPA and NYSDEC standards and
guidelines." The New York State Department of Health stated on
March 10, 1987 that the RI "fails to address potential public
health concerns in any meaningful manner." EPA's March 14, 1988
review letter contained 12 pages of comments on the draft RI and
its June 13, 1989 letter contained another 6 pages of comments
and indicated that the RI report could not be approved and
additional field work was required.
While we recognize there were mitigating factors involved with
the Facet site, we believe that the Region took too much time to
address the draft RI report problems. As a result, there was a
substantial delay in completing the RI/FS with increased risk to
the public health.
The delays in this case and in the others reviewed were caused by
a number of factors. EPA's review process was lengthy and lacked
definitive timeframes for EPA review and approval of documents.
In addition, there was no automated post-settlement tracking
system which provided project managers or supervisors the ability
to monitor the timeliness of the review process. Furthermore
cases underwent several reassignments to different project
managers due to turnover, too many assignments per project
manager or lack of priority afforded.
The Region needs to initiate additional actions to streamline its
review process so that PRPs can commence cleanup operations in a
more timely manner at Superfund sites. In addition, the Region
should establish time standards and/or milestone dates for the
expeditious review of PRP submittals. This will enable the
Region to have a basis to measure results. Action is also needed
to improve workload distribution so that project managers can
better focus on individual sites. Delays only aggravate the
potential health risks that Superfund sites threaten.
Region's Comments to Draft Report
'6-9
The Region in its response reiterated its assessment that a
month timeframe between the effective date of the order and
initiation of field activities is the minimum practicable period
required prior to initiation of field work." The Region believed
this time period was needed to provide meaningful participation
by all Federal and State agencies. The Region further believed
that there should be a flexibility in Regional review timeframes
to allow for the varying degree of site complexity. However, the
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Region stated that it will work toward developing guidelines
which set timeframes for the review and approval of PRP
submissions. The Region also agreed that the documents underwent
three or four major revisions. However, the Region pointed to
PRPs' inexperience in cleanup activities and the highly technical
nature of the work as contributing factors.
The Region further stated that it was initiating action to remedy
the absence of an automated post-settlement tracking system.
During the past six months, it had been installing and
implementing a local system which could be used to track all
major milestones of EPA-achieved settlements. The Region
intended to fully use this system when all outstanding orders for
PCs were filled. The Region also described the improvements that
will be occurring relative to files. These included establishing
a central filing system and designating a full-time records
coordinator.
Finally, in regard to project manager workloads, the Region cited
recent reorganizations to improve supervisor to staff ratios and
increase full-time equivalent positions. In addition, pursuant
to the Agency's 90 Day Study, the Region recently integrated the
enforcement and remedial programs so that it "can better optimize
the project manager/site ratio and secure a lighter workload per
project manager".
Auditor's Response
We found that in the majority cases reviewed the initiation of
field work took longer than 6-9 months cited by the Region as
practicable. While we acknowledge that some complex sites may
require a lengthier review process, that pattern should not be
sustained in most sites. We believe the Region needs to set
specific timeframes for its own review to avoid the potential of
an open-ended review. Tighter internal controls should be an
asset in achieving more timely reviews and eventual site
cleanups, while allowing for justifiable timeframe deviations.
Further, the Region should attempt to address all its major
concerns with a PRP's submission during the "first round" review.
In this way only a limited number of participants at the project
manager's discretion would be necessary for any subsequent
reviews. We believe these actions will assist in streamlining
the review and approval process and lead to more timely cleanup
activities.
Finally, we are pleased that the Region has taken positive
actions in the areas of an automated post-settlement tracking
system, an improved filing system, and project managers'
workload.
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Recommendations
We recommend that you:
1. Direct the Director, ERRD, to develop and implement
guidelines which set specific timeframe deadlines for
Regional review and approval of PRP submissions.
2. Direct the Director, ERRD, to develop and implement an
automated tracking system to monitor specific post-
settlement milestone dates. The use of personal computers
should be considered for this system due to their
availability to ERRD enforcement personnel.
3. Consider streamlining the review process for PRP draft
submissions. While initial reviews should continue to be
sent to all appropriate parties, technical review of any
revised submission should be primarily limited to the
project manager.
4. Review the current project managers' workload and determine
whether there are extreme cases where reassignments are
necessary to better equalize workload. Once this is
accomplished a plan of action should be developed for case
assignments taking into consideration such items as optimal
project manager/site ratio, site status, project manager
experience, and contingencies for staff turnover.
5. Develop and implement a systematic approach for preserving
documentation in project files. Files should be maintained
in an organized and orderly fashion so that information can
be readily obtained.
2. REGION NEEDS TO BE MORE AGGRESSIVE IN ASSESSING STIPULATED
PENALTIES
Stipulated penalties were not being assessed for noncompliance
with settlement milestone dates. The Region refrained from
taking aggressive enforcement action, limited its actions to
verbal negotiations or warning letters and had only sought
penalties in extreme instances. The Region did not assess PRPs
as much as $1,157,500 in penalties for two of the 13 cases we
reviewed. As a result, there was no inducement for PRPs to
comply with compliance order requirements. This lack of
enforcement encourages PRPs to delay implementing important
provisions of the settlement document which leads to an
unnecessary lengthening of the overall cleanup process. Such
delays can detrimentally affect the public health and the
environment.
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Sections 106 and 109 of CERCLA requires that Consent Decrees
contain provisions for penalties in an amount not to exceed
$25,000 per day. In addition to stipulated penalties, Section
122 provides civil penalties for violations of Administrative
Orders and Consent Decrees. Delays that endanger public health
and/or the environment can result in termination of the Agreement
between EPA and the PRP and EPA takeover of the RI/FS.
OSWER Directive 9835.1A, Appendix IV states that penalties should
begin to accrue on the first day of the deficiency and continue
to be assessed until the deficiency is corrected. The type of
violation (i.e., reporting requirements vs. implementation of
construction requirements), as well as the amounts, should be
specified as stipulated penalties in the Agreement to avoid
negotiations on this point which may delay the collection. The
amounts should be set pursuant to Section 109 of CERCLA and must
take into account the nature, circumstances, extent, and gravity
of the violations as well as the PRPs' ability to pay, prior
history of violations, degree of culpability, and the economic
benefit resulting from noncompliance.
Consistent with the intent of Congress, EPA Enforcement Policy
#GM-21, "Policy on Civil Penalties," states:
The first goal of penalty assessment is to deter people
from violating the law. Specifically, the penalty
should persuade the violator to take precautions
against falling into noncompliance (specific
deterrence) and dissuade others from violating the law
(general deterrence). Successful deterrence is
important because it provides the best protection for
the environment. In addition, it reduces the resources
necessary to administer the laws by addressing
noncompliance before it occurs.
If a penalty is to achieve deterrence, both the
violator and the general public must be convinced that
the penalty places the violator in a worse position
than those who have complied in a timely fashion.
All Region 2 Superfund settlement documents contain stipulated
penalty language for noncompliance. The penalties can be
assessed on an incremental scale as the number of days of non-
compliance increase (for example, $500 per day for the first 14
days; $1,000 for each of days 15 to 30, and $1,500 for every day
thereafter). The Region can assess stipulated penalty amounts
directly for noncompliance of administrative orders. Court
intervention is required on actions related to Consent Decrees
since these documents are Court issued.
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We found among our sample cases two sites where noncompliance
with ordered requirements occurred. In neither instance were
stipulated penalties assessed. Instead the Region relied on
warning letters and verbal negotiations to attempt to prod PRPs
back into compliance. The Region was content not to escalate
enforcement actions if possible progress was in the offing.
These actions by the Region were not successful and the delays by
the PRPs continued.
The following are brief summaries of these cases:
Paisley Solvents and Chemicals Site
An Administrative Order of Consent (AOC) was signed by
the PRP (an oil firm) effective August 24, 1988, to
conduct an RI/FS. The site consisted of an inactive
tank farm. Seven Nassau County water districts were
located downgradient of the site, each of which is
potentially subject to contamination from any hazardous
substances released at the site. Hazardous substances
found in groundwater samples included methylene
chloride, trans-l,2-dichloroethylene,
tetrachloroethylene, benzene, toulene, xylene, 1,1,1-
trichloroethane and 1,1,2-trichloroethane. Several of
these substances can cause damage to the liver, kidney,
and central nervous system.
The AOC contained a Field Operations Plan (FOP),
revised August 30, 1988, which set forth specific
schedule dates. On March 28, 1989 the Region issued a
warning letter to the PRP because certain required
interim milestone dates were not met. Specifically,
the firm had neither awarded a drilling contract for
well installation by January 20, 1989 nor commenced
field work by January 23, 1989. Both items were
required two months prior to the Region's letter. The
letter stated that "it would appear that failure to
resolve these violations immediately may make it
impossible for your contractor to comply with the
September 15, 1989 due date for the submittal of the
Remedial Investigation report."
The site's project manager stated that the Region did
not plan to pursue stipulated penalties until the RI
report date was missed even though this was a direct
violation of the stipulated penalty provisions. The
Regional attorney assigned to the case stated that she
believed issuing a warning letter was sufficient action
at that time since the PRP was working towards
completing its required tasks.
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Fieldwork on the RI did not commence until September
11, 1989 (four days before the RI report was due). As
of October 31, 1989 the RI report had not been
submitted and the Region had not initiated any
enforcement actions. We were advised by the project
manager that the Regional attorney assigned was leaving
the Agency and further action was being held in
abeyance until another attorney was assigned to the
case.
The Director, ERRD, stated in a memorandum dated
December 5, 1989 that when interim milestones were
missed, the Region evaluated violations on a case-by-
case basis. There had been some interim delays, but it
was believed that the PRP could still complete its work
and submit the RI report timely. For that reason, only
a warning letter was sent. The Director, BRRD, added
that since "the RI submittal date has not been met, we
are currently evaluating the assessment of penalties
for this violation."
We estimated that the stipulated penalties on this case
(as of October 31, 1989) could have totalled $771,000.
North Sea Municipal LandfillSite
An AOC was signed by the PRP (a municipality) effective
March 31, 1987, to conduct an RI/FS. Appendix V of the
Order incorporated a timetable of major tasks to be
completed. The site is an active municipal landfill
owned and operated by the Town of Southampton. A plume
of groundwater emanating from the site was contaminated
with heavy metals and volatile organic compounds.
Hazardous substances found in the groundwater in the
vicinity of the site included phenol, arsenic, cadmium,
lead and vinyl chloride.
The PRP missed scheduled due dates totalling 11 months.
For example, the PRP's initial FOP revision was 35 days
late and its final revised FOP was ten days late, for a
total of 45 days. The RI suffered from far lengthier
delays. The initial submission was 39 days late, the
initial revised report was 128 days late, and the final
revised report was 112 days late, for a total of 279
days.
The Region addressed the noncompliance with a series of
warning letters. The initial RI revision was due on
August 29, 1988. The Region sent the PRP a warning
letter four months later (December 22, 1988) giving the
PRP an additional three weeks to submit the document.
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The PRP submitted the revised RI on January 4, 1989.
However, the PRP did not respond so quickly the next
time. The final revised RI report was due April 17,
1989. On May 23, 1989 the Region issued another
warning letter and again gave the PRP three weeks to
submit the report (June 16, 1989). The letter stated,
"if the report is not received by the above date, EPA
may elect to enforce the provisions of the
Administrative Order." The PRP did not submit the
revised RI until August 7, 1989. The Region did not
seek penalties for the extensive delay.
The Director, ERRD, stated in a memorandum dated
December 5, 1989, the Region was aware that the PRP
encountered some scheduling problems. He concluded by
stating, "In addition, as the PRP is a municipality and
we were satisfied that the work was proceeding at a
reasonable pace, we did not believe the situation was
appropriate for assessing penalties."
We estimated that the stipulated penalties on this case
could have totalled $386,500.
The Region neither had an effective strategy nor formal guidance
documents or Regional procedures for enforcing settlement
compliance. In the two cases where the Region could have taken
action, it did not. Regional efforts and priorities were
generally directed towards measurable items like Records of
Decision and settlement documents rather than post-settlement
enforcement. ERRD personnel, however, indicated that more
attention will be focused on that area in the future.
As an example of the Region's nonaggressive approach, one project
manager provided the following typical scenario for dealing with
noncompliance. The Region would not react immediately to
noncompliance, but would rather allow a two week grace period
after the missed milestone date. Then an additional two weeks
would be required to prepare a warning letter in which another
three-week period would be provided the PRP to submit the already
late submission.
The Director, ERRD, agreed that the Region was not aggressively
pursuing stipulated penalties. However, he mentioned one recent
case, Chemical Leamon (not one of our sample cases), where the
Region took back responsibility for the cleanup from the PRP
because of continued noncompliance. The Deputy Regional Counsel
stated that stipulated penalties had only been pursued in one
case, Vineland Chemical. In that instance, the RI/FS was taken
back from the PRP. In September 1989, a civil referral was sent
to the Department of Justice seeking the assessment by the court
of stipulated penalties.
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We believe that the Region must take a more aggressive stance
with PRPs that violate settlement requirements and seek more
stipulated penalties. In order for an enforcement program to be
effective parties have to perceive that the Government will take
action to deal with noncompliance. This acts as a deterrence to
possible or continued noncompliance by PRPs. To date, there has
been little to reinforce that perception.
Region's Comments to Draft Report
The Region agreed with our recommendation. The Region in its
response discussed in general terms the discretionary nature of
pursuing and seeking penalties. It stated that many times
noncompliance was difficult to define because it revolved around
technical or scientific differences of opinion. The Region
further stated that it "weighs the programmatic cost of assessing
penalties for non-compliance against the specifics of each case
and the administrative cost of seeking such penalties."
The Region also provided updated information on the Pasley site.
On December 15, 1989 the Region informed the PRP that it was
subject to accumulated stipulated penalties of about $240,000.
The PRP then submitted a revised project schedule and timely
submitted monthly reports. The Region further stated: "The
staff assigned to the case have recommended that resources not be
expended to collect the accrued stipulated penalties unless
further violations of the revised schedules occur."
Auditor's Response
The Region's response addressed its policy on penalties but not
specifically the issue of stipulated penalties. We believe the
Region needs to be more aggressive with regard to assessing
stipulated penalties. In the two cases detailed in our report,
the Region permitted PRP's noncompliance with required milestone
dates for up to nine months, even though the AOCs had specific
language to assess stipulated penalties from the first day of
noncompliance.
Stipulated penalties are a means by which the Region can enforce
settlement agreements and deter PRPs from continued and future
noncompliance. Without the aggressive use of this tool, PRPs are
not discouraged from delaying Superfund cleanup actions.
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Recommendations
We recommend that you require the Director, ERRD, in concert with
the Office of Regional Counsel, to aggressively pursue the option
of stipulated penalties when PRPs are in noncompliance with
settlement document requirements. Justification should be
provided and approved by appropriate Regional managers in those
instances where stipulated penalties are not pursued.
3. OVERSIGHT OF TECHNICAL ENFORCEMENT SUPPORT fTESl CONTRACTORS
NEEDS IMPROVEMENT
The Region needs to improve its oversight responsibilities of TES
contractors. Specifically, the Region did not effectively
monitor the timely submission and processing of required
contractor reports and plans; conduct and document field
oversight reviews, quality assurance audits, and contractor
office reviews; and give emphasis to project manager training.
These conditions occurred because of inadequate monitoring,
untimely or lengthy Regional reviews and approvals, lack of
written procedures and low priorities or insufficient resources
assigned to certain tasks. As a result, there were work
stoppages and unnecessary delays which have contributed to a
lengthier cleanup process, there was no assurance that TES tests
or records were reliable or accurate and there was no assurance
that project managers were sufficiently knowledgeable to
adequately administer TES contractors.
Section 104(a)(l) of CERCLA requires that a "qualified person"
assist in the oversight and review of the conduct of the RI/FS.
EPA has interpreted qualified persons for overseeing RI/FS
activities as those firms or individuals with the professional
qualifications, expertise, and experience necessary to provide
assurance that the Agency is conducting meaningful and effective
PRP oversight activities. EPA mainly uses TBS contractors to
accomplish this task.
The TES contracts are zonal covering several EPA Regions. Each
zone has a prime contractor with teams consisting of several
specialty subcontractors. Each team is capable of providing a
wide range of technical skills and services directed at support
for the enforcement activities undertaken by OWPE and the
Regions. Under Superfund, the TES contractors assist EPA in
conducting enforcement investigations and compliance actions and
in obtaining information so that cleanup funds can be recovered
from responsible parties. For the period of our review, Region 2
was serviced by the Zone 1 TES contractor under TES contracts III
and V.
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Work Assignment Delays
There were delays in TES contractors submitting or the Region
processing TES contractor deliverables in five of the eight cases
reviewed. The TES contractor and its subcontractors were not
submitting required reports and the Region was not approving
oversight workplans in a timely manner. This occurred because
project managers were not effectively monitoring TES contractor
milestone dates and the Region's review procedures were sometimes
lengthy. As a result, there were work stoppages and delays which
contributed to a lengthier cleanup process.
The Regional Project Officer (RPO) and the project managers have
primary responsibility for monitoring Regional TES contractor
performance. The RPO's responsibilities include:
o Ensuring that the TES contractors prepare and submit
all required reports in a timely manner;
o Reviewing monthly progress reports to ensure the
accuracy of technical and financial information; and
o Resolving reporting discrepancies and performance
problems.
Project managers act as Work Assignment Managers (WAMs) with
regard to TES contracts. Their responsibilities include:
o Reviewing monthly progress reports to ensure that
technical and financial information is accurate;
o Reviewing and approving workplans;
o Reviewing all work assignment deliverables to ensure
they are sufficiently detailed and meet work assignment
requirements;
o Resolving reporting discrepancies; and
o Closing out work assignments.
We found that the Region was not approving TES oversight
workplans within the required timeframes. In one case the TES
oversight workplan took seven months to approve. The TES
contractor submitted a draft oversight plan on January 15, 1988,
45 days after the November 30, 1987 scheduled due date. The TES
contractor had originally stated in its workplan that the process
of developing and preparing an oversight plan would be completed
during the contract base period (by September 30, 1987). The
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contractor submitted its final revision on August 15, 1988, which
was approved by the Region on August 22, 1988. The site's
project manager could not explain the reasons for the overall
delay, but believed the concurrent nonapproval of the PRP's Site
Operation Plan was a mitigating factor.
In another case the Region took 80 days to approve a revised TES
workplan submitted on April 4, 1988. The June 1988 TES III
Monthly Work Assignment Status Report stated, "On June 2, 1988
CDM was notified by FPC [a division of the TES contractor] to
stop all work on the site due to EPA not approving the workplan
within 45 days of receipt." TES III & IV Users Manual Volume 1
(May 1988) states that TES contractors are permitted to commence
work upon submitting a detailed workplan to EPA. However, if the
workplan is disapproved, or not approved within 45 days, the
contractor is required to stop all work immediately at the work
assignment. OSWER Directive 9871.0 also requires that workplans
be received and approved/disapproved in a timely manner (prior to
a 45 day-period). The TES contractor stopped work until approval
was received on June 23, 1988. The narrative to the work
assignment amendment indicated that workplan approval took longer
because of negotiations concerning the amount of hours/dollars
needed to perform work assignment activities.
Delays that TES contractors reportedly experienced with their own
laboratories also resulted in late deliverables. In one case TES
Draft and Final Field Oversight Summary Reports were delayed up
to 22 weeks because the TES subcontractor's laboratory submitted
untimely test results. April and May 1988 TES III Monthly Work
Assignment Status Reports disclosed that the TES subcontractor
could not prepare the Field Oversight Summary Report until its
laboratory submitted all test results. In June 1988 the
laboratory data was received and the subcontractor submitted the
Draft Field Oversight Summary Report to the TES contractor on
July 22, 1988. The Region received the report on August 2, 1988.
The following shows the number of weeks that the reports were
late:
DELIVERABLE DUE DATE
Field Oversight Lab Letter 02/22/88
Summary Report
Draft Field Oversight 03/14/88
Summary Report
Final Field Oversight 04/25/88
Summary Report
DATE
DELIVERED
04/07/88
08/02/88
09/29/88
WEEKS LATE
6
20
22
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In another case we found that TES contractors did not solicit a
bid for a laboratory prior to the taking of air samples. As a
result, collected air samples exceeded their allowable holding
time and were useless because the contractor could not get them
properly tested. Normal procedures require the contractor to
solicit a laboratory bid before samples are taken. The April
1988 monthly progress report reported that due to problems in
obtaining the proper equipment and laboratory space, air sampling
was not performed during Phase I. On April 26, 1988, the project
manager postponed the air sampling program until Phase II. These
samplings will now be conducted in 1990.
In these latter two cases EPA's more active and effective
managing of the TES contractors could have identified problems
earlier and led to a speedier resolution. Because of these
delays the Region could not be assured that these aspects of the
cleanup were being properly performed.
We also found one case where TES contractors submitted untimely
monthly progress reports from 18 to 28 days late. The project
manager was not aware of this until we brought it to her
attention. Progress reports are deliverables required to be
submitted on the 20th day of each month during the active life of
each work assignment. They are an integral part of monitoring
project performance and financial management, and should be
reviewed to ensure the accuracy of technical and financial
information. These reports contain information pertaining to
project status, schedule adherence, total budgeted costs and
labor hours, and cumulative costs and labor hours expended.
The TESWATS Microcomputer based system was used for tracking
purposes. We found that Region 2's TESWATS system neither
provided schedule nor status information to the RPO and project
managers. TESWATS is a nationwide system designed to provide the
current status of each work assignment and each TES contract as a
whole, regarding finances, scheduling and status. Specific data
items include the number of professional "Level of Effort" (LOE)
hours, funding amounts for each assignment, assigned period of
performance, and approval dates of work plans and amendments.
The RPO stated that schedule and status information could not be
understood because it was printed in coded language and required
an explanation key. TESWATS was not designed as a user friendly
system that could provide readable information. Most project
managers stated that they only used the TESWATS system for
financial information or did not use the system at all. Instead,
project managers relied on TES contractor monthly status reports
and conversations with contractors. The RPO has advised
Headquarters of the unworkability of the system and has been told
that the system will be improved.
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To ensure that the TES contractors are progressing satisfactorily
in implementing assigned tasks and meeting planned financial and
programmatic objectives, EPA must actively oversee and regularly
monitor contractor performance. Such monitoring is important to
achieving early identification and prevention of potential
problems that otherwise may adversely affect the smooth operation
and implementation of the program. The Region must more closely
monitor these contractors to assure the quality and timeliness of
their work assignments.
Prelect Manager Site Visits
Project managers rarely made site visits to monitor TES
contractor performance. In addition, even when a periodic site
visit occurred, written reports were not prepared to document
these visits. This condition occurred because of inadequate
Regional monitoring of project managers who were generally given
too much flexibility in scheduling such visits. Our interviews
with eight project managers indicated that the number and timing
of site visits significantly varied by managers. One manager
stated that he made five visits in the past year while several
others made an average of only one visit during the same period.
Also, only one of the eight project managers provided us with any
written support of site visits. The seven other project managers
stated they did not document these visits because they were
unaware of such a requirement. The Director, ERRD, stated that
project managers "are expected to periodically visit their sites
to observe field activities and check up on our oversight
contractor's work."
To ensure that TES contractors are progressing satisfactorily, it
is necessary for managers to actively oversee and regularly
monitor contractors' performance. Effective and frequent
communication between project managers and TES contractors is
important in achieving early identification and prevention of
potential cost or scheduling problems that can adversely affect
the project. While deliverables submitted by the TES contractor
are the formal means of communication, the TES Manual states that
they are not intended to be the only source of communications
between the parties. Conducting regularly scheduled site visits
is one way to prevent potential future problems. The visits also
assure that TES contractors are performing their duties properly.
For example, there was an incident when a PRP complained to the
Region that the TES contractor's representative "was conducting
all oversight activity from a car parked some 150 feet from the
boundary of the established exclusion zone." More frequent
visits by the project manager might have alerted the Region
sooner to that situation.
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Furthermore, because of the high turnover of project managers, it
is very important that as much written documentation as possible
is prepared concerning a site especially when infrequent site
visits are made. This will enable any project manager who is
assigned a future case £ better understanding of any prior or
existing site problems and previous actions taken to resolve
them. OSWER Directive 9355.3-01FS1, Getting Ready: Scoping the
RI/FS, requires project managers to document all meetings,
progress reports, telephone conversations, and visits in the site
file. This technique is to be used to enhance the technical
supervision of the site.
To improve the management of TES contractor performance, project
managers need to increase the number of site visits made. In
addition, adequate documentation, in the form of a trip report,
should be prepared for inclusion in the project file.
Quality Assurance Audits
Region 2 was not conducting many quality assurance (QA) review
audits of TES contractors. This occurred because of the staff's
unawareness of a program in existence since 1984; lack of written
procedures; inadequate coordination between quality assurance
(located in Edison, New Jersey) and program (located in New York
City) elements; and low priority and lack of resources assigned
to this function. As a result, there was no assurance that tests
conducted by TES contractors in conjunction with their oversight
of PRP activities were reliable and accurate.
EPA Order 5360.1, Policy and Program Requirements to Implement
the Mandatory Quality Assurance Program, issued April 1984,
establishes policy and program requirements for conducting QA for
all environmentally related measurements performed by or for EPA.
The primary goal of the QA program is to ensure that all
environmentally related measurements supported by EPA produce
data of known quality. Section 4c of the Order requires the
Regional Administrator to "Ensure that all projects and tasks
involving environmentally related measurements are covered by an
acceptable QA project plan and that the plan is implemented," and
"Ensure that an adequate degree of auditing is performed to
determine compliance with QA requirements."
EPA's Contractor Administration: A Guide for Project Officers
states in Chapter 9:
Inspection clauses in the contract give the Government
the right to inspect and test the work performed under
the contract. This right is standard under Government
contracts; it is derived from the concept that the
Government has the right to determine if the goods or
services offered are what was ordered.
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The May 1988 TES III & IV Users Manual Volume I states in Chapter
5 Section 5.7 that the RPO is responsible for establishing a
field audit program in conjunction with the Quality Assurance
Officer. Periodic field checks of sampling/ bottle preparation,
sample shipment, and inspection procedures will assist EPA in
receiving quality work from contractors. These audits should be
performed by EPA personnel or the National Enforcement
Investigations Center (NEIC) audit contractor.
We found the Region had not established a field audit program
with written procedures and QA field audits were not being
performed. The Regional Toxic and Hazardous Waste Section (T&KW)
of the Environmental Services Division would be responsible for
performing QA audits. The Section Chief stated that audits were
performed on only one percent of Superfund activity and only a
small portion are related to TES contractual activity. He
further stated that these limited number of audits occurred
because of insufficient resources to conduct QA field reviews.
In addition, program staff did not advise his office of site
activities so that field audits could be scheduled when resources
were available. The RPO was also unaware when QA audits were
performed and that their performance was part of her
responsibility. We were informed that only four TES related
audits were performed during Fiscal Years 1986 through 1989 (none
for the cases we reviewed). Since we identified deficiencies in
this area, the RPO advised us that a meeting was held and more
were planned with the T&HW Section Chief to discuss improved
program implementation.
TES contractors are responsible for acting as the "eyes and ears"
for EPA on most PRP lead sites. They perform day to day
oversight to assure that activities and tests are properly done
so that cleanups are complete and environmentally sound. By not
conducting QA field audits on TES contractors EPA cannot be
assured of the diligence of these contractors nor of the
reliability of the PRP efforts they are overseeing.
TES Contractor Office Reviews
The RPO was not conducting periodic TES contractor office
reviews. This occurred because the RPO believed the visits were
a Headquarters rather than a Regional function. As a result,
by the RPO not performing these spot checks the Region cannot be
assured that the TES contractor has adequate internal controls
and sufficient documentation. Therefore, any existing weaknesses
might go undetected and could result in a loss of Federal
dollars.
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The TES III and IV Users Manual, Section 5.6, states:
In order to ensure that the contractor has mechanisms
in.place to ensure chain-of-custody and document
control, it is very important that the RPO or other
regional representatives conduct periodic spot check
visits to the contractor's office to examine
documentation such as time sheets, expense records,
equipment maintenance logs, and so forth. The PO
should always be notified in advance of these spot
checks. These visits are not intended to be a formal
audit but rather a means to determine whether an
outside audit is necessary. Regular monitoring is also
important to ensure that government property is being
properly maintained. Headquarters will also conduct
internal reviews and provide feedback as appropriate.
Training
Project managers were not receiving required training prior to
performing TES oversight responsibilities. Project managers
placed workload priorities ahead of required training needs and
supervisors were not sufficiently encouraging staff to attend the
necessary courses. As a result, there was no assurance that
project managers were sufficiently knowledgeable to adequately
administer the TES contractors under their purview.
The EPA Contractors Management Manual, Chapter 7, states that all
project managers should attend the Basic Project Officer and
Contract Administration training courses. The first course while
not mandatory was strongly encouraged by Regional officials. The
second course was mandatory.
The Basic Project Officer Course is a comprehensive survey-style
course which provides attendees with a thorough understanding of
the project officer's responsibilities within the acquisition
cycle. The Contract Administration course encompasses all
functions relating to a contract from award until final payment
has been made and the contract is closed out. The Region has
offered these courses on an annual basis.
We found that none of the six project managers with TES oversight
responsibilities on our sample cases had completed either of the
two training courses prior to site assignments. However, three
had subsequently taken the Basic Project Officer course within
three months of the assignment. Three project managers never
attended the mandatory Contract Administration course, including
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one individual who had been a project manager for four years.
One project manager had not attended either training course. The
most recent Contract Administration course offered in Region 2
was conducted in Spring 1989, but not all expected participants
attended. The next course is scheduled for February 1990.
The EPA Contractor Manual, Chapter 7, states that the Director,
Procurement and Contracts Management Division (PCMD) may issue
interim certificates to enable individuals to perform as project
officers or work assignment managers until training can be
completed. Interim certificates can be issued for a six-month
period. However, we found no evidence of interim certificates
being issued.
Classroom training provides the necessary basics and technical
expertise to understand the complexities of the subject matter.
In addition, it supplements or broadens understanding of the
offered topic and enables the individual to improve performance
or increase knowledge. The particular training courses addressed
in this finding are especially important to project managers
because they present information distinctly different from the
academic disciplines of the project managers themselves. All the
project managers have scientific or engineering credentials, but
are not as well versed in management and administration areas.
These training courses provide basic knowledge and techniques so
that they can properly oversee TES contractors.
The lack of formal training may have contributed to some
weaknesses that we have previously detailed relative to TES
contractor oversight.
In conclusion, we believe that project managers need to take an
increased active role in order to more effectively monitor TES
contractors. The number of field visits and reviews should be
increased and adequately documented, report milestone dates have
to be more closely monitored and adhered to, and required
training must be taken. Without this the Region has no assurance
the cleanups are being properly performed.
Region's Comments to Draft Report
The Region in its response discussed the delays presented in the
report. It stated that delays in reviewing and approving TES
workplans can result from various reasons including the
interactive process with PRPs to develop a firm schedule of
activities, finalization of a scope of work, and various Regional
and Headquarters approval signoffs. The Region also stated that
the 45 day approval limit safeguarded the government against
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unnecessary costs, but did not obligate the government to approve
the plan within that timeframe, though work will be stopped by
the TES contractor . Reasons given for not meeting the 45 day
limit included higher priorities, impending PRP negotiations,
awaited State or other Federal Agency comments, schedule
implications, and procedural or resource constraints. The Region
noted that partial workplan approvals under TBS III were not
permissible, but conditional approvals were permissible under TES
V and VI. Therefore, few work stoppages will occur under the
current contract.
Concerning automated tracking of TES contracts, the Region stated
it initiated use of a Regional monitoring system to substitute
for the TESWATS deficiencies. This monitoring system was
developed for the Regionally managed Alternative Remedial
Contracts Strategy (ARCS) contracts. The Region expects this
system to be in use by May 1990. This should enable supervisors
to better track contractor deliverables.
Regarding project manager site visits, the Region stated that
such visits were dependent on the ongoing level of site activity
and this could explain the wide divergence of visits made.
Another factor might be whether PRPs provided sufficient notice
about a field activity. The Region stated that project managers
were expected to periodically visit sites and also agreed with
our recommendation to document site visits.
The Region attributed the lack of formal visits to the TES
contractor's office on resource limitations. However, it
initiated action to alleviate this problem by assigning more
staff to the RPO function. For example, a chemical engineer was
hired in September 1989 to assist the management of TES
contractors. The Region also agreed with our recommendation on
quality assurance audits.
Finally, with regard to training, the Region had given precedence
to the courses on health and safety, statutes and regulations,
risk assessments, and a number of other topics. While project
officer and contract management training were relevant, the other
types were considered more crucial to site cleanup. However, the
Region intended to improve project managers' training in the
areas of contract management skills, and make every effort to
comply with our recommendation.
Auditors Response
The Region has apparently undertaken a number of positive actions
to improve the oversight of TES contractor activities. The
development of an automatic tracking system, assignment of
additional staff, documentation of site visits/ and increased
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emphasis on contract administration training should make TES
contractor oversight more effective. We believe the Region
should also follow through on our other recommendations to
achieve an improved monitoring effort.
Recommendations^
We recommend that you:
1. Improve the quality and timely monitoring of TES
contractor's required reports and workplan submittals and
compliance with milestone dates.
2. Expedite the Regional review and approval system for TES
deliverables.
3. Develop timetables and minimum requirements for periodic
field oversight reviews, quality assurance audits, and
contractors office reviews.
4. Require that project managers attend prescribed training.
Such training should generally be received prior to
performing TES oversight responsibilities. Consider
including this requirement in performance standards, if it
is not already stated.
4. OVERSIGHT COSTS WERE NOT BILLED AND COLLECTED IN A TIMELY
MANNER
The Region had not sought to recover from PRPs costs for cleanup
oversight as stipulated in settlement documents. Regional
management had given only limited attention to enforcing this
settlement requirement. In addition, project managers had made
this a low priority in their overall handling of individual
sites, and cost recovery packages were not adequately or timely
prepared to document costs claimed. As a result, the Region had
not recovered at least $627,761 for the Superfund Trust Fund that
could have been invested and earning interest, thus lessening the
amount available for appropriation.
OSWER Directive 9835.1A lists the required aspects of an AOC.
One of these is a statement on reimbursement of costs. This
section specifies that PRPs will assume all costs of performing
the work required by the AOC. In addition, this section commits
PRPs to reimbursement of all costs associated with EPA review and
oversight activities. This includes reimbursement for third
party oversight assistance as required by Section 104(a) (1) of
SARA. This section also specifies the nature and kind of cost
documentation to be provided and the process for billing and
receiving payment.
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According to the Chief, Accounting Operations Section, FMB, that
section was given cost recovery responsibilities at the beginning
of calendar year 1989. Prior to that, they were Headquarters
functions. Because of the newness of these responsibilities and
because FY 1989 accounting would not be processed during the
course of our audit, we did not review FMB's cost recovery
procedures.
We found that 10 of the 13 cases we reviewed had specific cost
recovery requirements in their settlement documents. The other
three just had general statements to that effect. The AOCs
lacked language for the payment of interest if PRP reimbursements
were untimely. The AOCs with specific cost recovery requirements
generally had the following language:
After the end of each federal fiscal year in which
oversight costs relating to this Order and/or the RI/FS
at the Site are incurred by the United States
Government, EPA will transmit to respondent an itemized
accounting of all such costs that were incurred during
the previous year. These accountings will include, but
not be limited to, the costs of oversight of
Respondent's implementation of the requirements of this
Order, the cost of a risk assessment and health
assessment of the Site, and the cost of EPA's community
relations activities, and will include both direct and
indirect costs. Respondent shall, within 30 calendar
days of receipt of each such accounting, remit a
cashier's or certified check for the amount of those
costs.
Of the ten cases, eight had oversight costs that EPA should have
billed PRPs for fiscal years prior to 1989 (Fiscal Year 1989
accounting would not be expected to be prepared until after the
completion of our audit fieldwork). The following table details
oversight costs for FYs 1987 and 1988 for these eight sites as
listed on EPA's financial management system. (See Exhibit 3 for
a more detailed breakdown). The amounts shown only represent EPA
payments. We did not calculate any additional interest that
would have accrued in Federal accounts if payments were timely
made.
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Site
Curcio
Mannheim
North Sea
Pasley
Richardson Hill
Ringwood
Robintech
Syosset
Oversight Costs^
$ 24,679
24,038
116,426
34,744
93,879
121,452
61,226
151,317
$627,761
We found that the Region had only billed one PRP during that
period but no money was collected. The following is a brief
summary of that case.
North Sea Landfill
On December 28, 1987 the Region sent the Town of Southampton,
New York a statement of EPA oversight, response and the balance
of workplan development costs through the end of FY 1987. The
bill amounted to $79/665.48. On August 19, 1988 (almost eight
months later), the Region sent the Town a letter concerning the
non-receipt of payment. The Town responded that it was reluctant
to authorize payment without documentation of the costs. The
Region replied on September 26, 1988 that "this office of EPA
will generate a request within the agency that will result in
cost documentation being assembled that further supports the
response and oversight statement that was sent to the Town in
December 1987." This package was assembled and submitted to the
project manager for review on August 10, 1989. As of October 3,
1989, no further action was taken. We were advised by the
project manager that no FY 1988 billing had been prepared or sent
to the PRP (at least $36,900). The project manager further
stated that the Region intended to include all past costs
(including FYs 1987 and 1988) in a new Consent Decree planned for
issuance by December 31, 1989.
In the other cases, the Region had not prepared accounting for
submittal to PRPs for reimbursement. Program managers stated
that this task was given a low priority since their main focus
was site activity or document review and that in some instances
they expected to seek to recover several years costs with a FY
1989 billing. All eight cases had oversight costs in FY 1989.
By postponing the recovery of oversight costs, funds were not
collected that could have been available for other Superfund
cleanups, or at least accruing interest in the Superfund Trust
Fund account.
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Region's Commentsto Draft Report
The Region in its response stated that due to workload and
resources constraints it established various cost recovery
priorities. The foremost priority was past PRP costs, the second
remedial action or expensive removal action costs, and the third
EPA oversight costs. These priorities were based on the amount
of monies to be recovered and the applicability of statute of
limitation requirements.
However, in response to our audit, the Region was undertaking a
number of actions to provide greater attention to the recovering
of EPA oversight costs. These included requiring TES contractors
to provide itemized documentation of cost expenditures, sending
timely demand letters to PRPs, and hiring a cost recovery
coordinator. The Region was working towards the completion of
cost recovery documentation packages so that the $627,761 cited
in our report could be pursued during this fiscal year. The
Region also plans to incorporate language in AOCs about the
accrual of interest if required payments are not made within 30
days.
Auditor's Response
We acknowledge the actions taken and planned by the Region. We
had recommended in the draft report that the Director, ERRD
assign an individual the responsibility of administering cost
recovery activities. Since the Region has hired a cost recovery
coordinator, we are eliminating that recommendation from the
final report. In addition, since the Region has stated that AOCs
will include the requirement of interest payments when cost
recovery payments are not received, we are similarly removing
that recommendation from the final report.
Recommendations
We recommend that you:
1. Establish and implement an effective system for the timely
recovery of oversight costs involving Superfund cleanup
sites. Specifically, require that mandated settlement
document itemized cost accountings are sent to PRPs within
90 days of the end of each fiscal year.
2. Initiate action to collect the $627,761 in oversight costs
identified in our report.
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EXHIBIT 1
EPA REVIEW OF VARIOUS PRP SUBMITTED WORK PRODUCTS
Months
Taken to
Review
Document (Mote 31
Project Operations Plan (POP) 5
Field Operations Plan (FOP) 6
Project Operations Plan (POP) 8
Project Operations Plan (POP) 8
Project Operations Plan (POP) 10
Field Operations Plan (FOP) 10
Workplan/Site Operations
Plan (WP/SOP) 15
Field Operations Plan (FOP)-RI/FS 12
REM III Field Oversight Plan 7
Work Plan for Supplemental RI/FS 14
Operations Plan (OP) for
Supplemental RI/FS 7
Site Operations Plan (SOP) 16
Interim Technical Memorandum
(ITM) (Note 1) 6
Draft Remedial Investigation (RI)
Report (Note 2) 36
Work Plan for Feasibility Study
(FS) 12
Work Plan for Removal and
Disposal of Paint Sludge 7
Site Operations Plan (SOP) 4
Draft Remedial Investigation (RI)
Report 11
Site
Robintech Inc./National
Pipe Company
North Sea Landfill
Mannheim Avenue
Rowe Industries
Tronic Plating Company
Hooker/Ruco
Curcio Scrap Metal
Pasley Solvents and
Chemicals
Swope Oil and Chemical
Company
Richardson Hill Road
Landfill
Facet Enterprises, Inc.
Ringwood Mines/Landfill
Syosset Landfill
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EXHIBIT 1 (Cont.)
Notes
1. The ITM was submitted on May 23, 1989 and at the conclusion"
of our audit field work the review had not yet been
completed.
2. At the conclusion of our audit field work, a revised
workplan was to be submitted by the PRP's consultant.
3. Review time was measured from the initial submission of the
document by the PRP until EPA approval.
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EXHIBIT 2
CASE STUDIES OF LENGTHY REVIEW PROCESS
Richardson Hill Road Landfill Site
On July 22, 1987 EPA Region 2 entered into an AOC with Allied
Corporation, as successor to the Bendix Corporation and Amphenol
Corporation, to undertake an RI/FS at this site (an inactive
landfill). Hazardous substances found on or nearby the site
included PCBs in concentrations as high as 1,650 parts per
million, TCE in concentrations as high as 230 ppb, and vinyl
chloride. PCBs have been demonstrated to cause cancer in
animals, are suspected carcinogens in humans, and can also cause
liver damage and dermatological abnormalities. PCBs
bioaccumulate, i.e., are retained in human and animal tissues, at
concentrations in excess of exposure levels. Vinyl chloride is a
skin irritant and contact with the liquid may cause frostbite
upon evaporation, and the eyes may be immediately and severely
irritated, vinyl chloride also attacks the liver, brain and
hemolymphopoietic system.
On April 8, 1987, prior to the AOC being signed, Amphenol
submitted a Site Operations Plan (SOP) detailing Phase 1 RI
specific work efforts. This document contained a Quality
Assurance/Quality Control Plan and a HASP. On September 3, 1987,
nearly five months later, EPA sent nine pages of initial comments
to Amphenol. On September 24, 1987, the firm retained by
Amphenol to complete the RI/FS, replied to EPA's comments. The
October 1987 PRP progress report indicated the previous EPA
project manager had informed the PRP's consultant on October 16,
1987 that EPA had agreed to the SOP modifications which should be
included in the final SOP. This occurred at approximately the
time a new project manager was assigned to the case.
Subsequently, on November 25, 1987, the Region issued seven pages
of additional comments to the SOP. Amphenol and its consultant
believed these later comments contradicted the previous EPA
comments. The new project manager indicated that the more recent
comments were consistent with EPA's desires. Because of
extensive changes requested, EPA on January 12, 1988 allowed an
extension until February 12, 1988 for the SOP submittal. This
timeframe was met by the PRPs. On March 25, 1988 the Region
provided nine additional comments on this version of the SOP,
which were addressed on April 27, 1988. This submission was
followed up with additional Regional comments on May 23, 1988 and
the SOP was revised on June 15, 1988, and August 17, 1988.
Finally, on August 22, 1988, EPA formally approved the SOP. The
entire approval process took more than 16 months from the time of
the original April 8, 1987 workplan submittal.
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EXHIBIT 2 (cont.)
During the week of September 26, 1988, the RI was initiated at
the site. Upon completing the waste oil pit investigation, it
became apparent that waste oil occurred in an area more
widespread than previously anticipated. The Region and the PRP
agreed in early November 1988 that after completing soil borings
the data obtained would be presented as an Interim Technical
Memorandum (ITM) to evaluate the extent of oily waste materials.
The ITM was expected to be completed in January 1989, but due to
the scope of work increases, it was not completed until May 23,
1989. EPA Toxic and Hazardous Waste Section comments were
forwarded to the project manager on June 23, 1989 and the TES III
contractor submitted their evaluation report on June 28, 1989.
As of December 7, 1989 the Region had not completed its review of
the ITM and forwarded comments to the PRP. The case was also
transferred to a different project manager. Due to the PRP
consultant's delays in submitting the ITM as well as Regional
delays in reviewing the ITM, another 11 months at a minimum, were
lost in completing the RI.
We recognize that there were mitigating factors involved in this
case. From the time the Order was signed site access problems
occurred which lasted until September 1988. Also, there was a
related problem of installation and maintenance of an EPA
approved alternative water supply. In addition, two project
managers had been assigned to the case and because of the present
project manager's workload, the case was being reassigned again.
However, more than 21/2 years elapsed from the time the original
workplan was submitted. The Region took 16 months to approve the
SOP and as of the conclusion of our field work the Region still
had not provided comments on the May 23, 1989 Interim Technical
Memorandum.
Swope Oil Site
On September 30, 1986, EPA Region 2 entered into an AOC for a
Supplemental RI/FS. Scope Oil and Chemical Co. operated a
chemical reclamation business at the site. Hazardous substances
found there included PCBs, lead, 1,1,1-trichloroethane, mercury
and bis (2-ethylhexyl) phthalate.
Our review of the project files indicated EPA took more than 21
months (643 days) to approve the Operations Plan (OP) for the
Supplemental RI/FS, thus delaying the start of field work and
eventual completion of the study. The initial delay was in
connection with the workplan approval which consumed nearly 14
months (413 days). The workplan was timely submitted by the PRPs
on November 26, 1986. EPA's initial 13 page comments were
submitted to the PRPs on June 5, 1987 (191 days later).
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EXHIBIT 2 (cont.)
After an approved extension of time, the PRPs revised the
workplan 54 days later on July 29, 1987. The Region forwarded
additional comments on September 3, 1987 and another revised
workplan was submitted on October 7, 1987 (total time elapsed 70
days). The Region needed another three months (98 days) to
finally approve the workplan. The entire process took nearly 14
months.
Once the Supplemental RI/FS workplan was approved, another eight
months (230 days) was needed to approve the OP. The PRPs
submitted the OP timely on March 10, 1988. EPA's initial
comments (9 pages) were sent on June 21, 1988 (103 days after the
OP was submitted). The OP's first revision was submitted by the
PRPs on July 21, 1988 (30 days later) and the Region provided a
second round of comments on August 15, 1988 (25 days later). The
PRPs submitted a second OP revision on August 16, 1988 and EPA's
approval came on August 30, 1988.
Pursuant to the Order, the draft RI Report was due April 30, 1989
(eight months after EPA's determination that the OP was
acceptable). However, due to access problems, additional well
installation, and incorporation of downgradient well data, EPA
approved a March 31, 1990 time extension for submitting the
Report. While we recognize there were some necessary time delays
involved (e.g., turnover of four project managers), we believe
that the OP approval process took an inordinate amount of time
thus pushing RI/FS completion back even further.
Curcio Scrap Metal Site
On May 27, 1988 EPA Region 2 entered into an AOC with
Consolidated Edison Co., Curcio Scrap Metal, Inc. and Seco, Inc.
to perform an RI/FS. The site is an active scrap metal yard.
Hazardous substances at the site included PCBs, lead, copper,
nickel, and trichloroethylene.
The Workplan/Site Operations Plan (WP/SOP) approval process took
almost 15 months (450 days) from the PRP's draft submittal until
EPA's ultimate approval. On March 23, 1988, prior to the AOC
being signed, Consolidated Edison, through their consulting firm,
submitted the draft WP/SOP. Included in the workplan was a SOP,
HASP and Quality Assurance Project Plan (QAPP). EPA took 107
days to review the first draft, and subsequent revisions took 136
days, 36 days, 51 days, and 6 days for a total of 336 days
(approximately 11 months). On May 25, 1989, after three major
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EXHIBIT 2 (cont.)
revisions, EPA finally approved the workplan portion of the
document. The PRP submitted a revised SOP, HASP and QAPP on June
9, 1989 and EPA approval came approximately June 15, 1989. Due
to this long approval process field work did not start until
approximately July 19, 1989 which represented nearly a one year
delay.
Consolidated Edison on January 31, 1989 informed EPA that their
main purpose was to reduce the project scale and perform a "mini-
RI/FS". They also expressed the following frustration with the
long review process:
With that understanding [referring to the mini RI/FS]
the Respondents prepared a draft Work Plan which was
submitted to the USEPA on or about March 22, 1988....
The Respondents were equally astonished that USEPA,
after rushing them into entering into the
Administrative Order, had taken more than three months
to review the draft Work Plan... the Respondents
included the bulk of the USEPA comments in the revised
Work Plan that was submitted to the USEPA on or about
August 23, 1988.
More than four months later, on or about January 6,
1989, Respondents received a second set of major
revisions from the USEPA with regard to the revised
Work Plan submitted by First Environment. These
comments represent a further escalation of the work
required at the Curcio Site....
When we filed the revised work plan in August 1988, we
expected to receive USEPA's comments in a timely
fashion so that the required field work at the site
could be started during the fall of 1988.
EPA officials later indicated that the PRP's consultant was not
knowledgeable of Superfund requirements which caused major WP/SOP
revisions thus delaying the project. In fact, after the WP/SOP
was approved, the firm was replaced during July 1989 by a new
firm retained to perform the RI/FS. Despite the performance of
the PRP's first consultant, we believe EPA still took too long to
review the WP/SOP revisions.
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EXHIBIT 2 (cont.)
Hooker/Ruco Site
On September 21, 1988 EPA Region 2 entered into an AOC with
Occidental Chemical Corp. to undertake an RI/FS. Since the early
1950s the site has been used for manufacturing various chemicals
and chemical products including polyvinyl chloride ("PVC")
resins, synthetic rubber, polyurethane and plasticizers. The
hazardous substances detected in the soil included PCBs,
phthalates trichloroethylene (TCE) and tetrachloroethylene (PCE).
The hazardous substances detected in groundwater included vinyl
chloride, TCE, PCE, tetrahydrofuran, 1,2-trans-dichloroethylene,
styrene, methyl ethyl ketone ("MEK") and cadmium. There was a
risk of human exposure to the site's hazardous substances from
contact with contaminated groundwater and soil. In addition,
ingestion, inhalation or direct contact with the site's hazardous
substances might cause adverse human health effects.
Occidental submitted a Field Operations Plan (FOP) on October 24,
1988. EPA provided initial comments (eight pages) on December
16, 1988. Occidental provided a timely revised FOP on January
18, 1989. After two months the Region sent a second round of
comments on March 22, 1989 (eight pages) and March 27, 1989.
These were timely addressed by Occidental on April 25, 1989.
Subsequently, on June 28, 1989 the Region issued a third set of
comments (four pages) to the FOP and Occidental replied on August
3, 1989, having received the comments on July 12, 1989.
Subsequent revisions were made on August 7, 1989 and August 17,
1989 and the Region approved the FOP on August 17, 1989, nearly
ten months after it was submitted. Field work commenced on
September 11, 1989.
The original October 19, 1988 project schedule prepared by
Occidental's technical consultants called for the draft RI report
to be submitted by September 15, 1989. Their August 25, 1989
revised schedule called for the draft RI report to be submitted
on April 5, 1990 which represented a 6 1/2 month delay. Field
work commenced only four days before the draft RI was originally
scheduled to be submitted.
While some access problems were encountered, the project manager
indicated this was not a major issue in holding up the start of
field work. He believe that the principal reason for the delay
in starting field work was the long FOP approval process.
44
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EXHIBIT 3
OVERSIGHT COSTS TO BE RECOVERED - FY 87 AND
Site
Curcio
Mannheim
North Sea
Pasley
Richardson Hill
Ringwood
FY
88
88
88
88
88
88
87
87
88
88
88
87/88
88
87
87
87
87/88
88
88
87
87
87/88
88
Cumulative
Payments
$ 257
24.422
$24,679
$ 377
14
2,888
20.759
$24,038
$47,843
31.683
$79,526
33,236
71
70
3.523
$36,900
$34,744
10,239
13,259
1.179
$24,677
2,673
65,931
598
$69,202
31,768
54.777
$86,545
5,118
29.789
$34,907
Item
Coop. Agreement
TES 3
Payroll
Travel
Coop. Agreement
TES 3
TES 3
TES 3
TES 3
Payroll
Payroll
TES 3
REM 3
TES
TES
2 & 3
2 & 3
TES 2
TES 3
TES 3
Payroll
TES 3
TES 3
TES 3
TES 3
45
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OVERSIGHT COSTS TO BE RECOVERED -
Site
Robintech
Syosset
FY
87
87/88
88
88
87
87
87/88
88
Total
Cumulative
Payments
$ 4,318
2,352
53,474
1.082
$ 56,908
18,008
57,953
$ 75,961
19,982
55.374
$ 75,356
$627,761
EXHIBIT 3 (cont.)
FY 87 AND 88
Item
TES 3
TES 3
TES 3
Payroll
TES 3
TES 3
TES 3
TES 3
46
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APPENDIX 1
^^E:
FROM
*
TO
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION II
MAR 2 7 1990 '
Draft Report on Review of Region II's Oversight of Superfund
Post-Settlement Activities
/") *.
/2s ft A /?
Herbert Barrack /Vix-v SL4 ^c /^-tf-rZ-f/U
Assistant Regional Administrator for Policy and Management
Paul D. McKechnie
Divisional Inspector General for Audit
Eastern Division
Attached is Regions II's response to the above-referenced draft,
audit.
Should you have any questions/ please call me at FTS-264-2520 or
have your staff contact Helen Beggun at FTS-264-9860.
Attachment
cc: Herbert Maletz, OIG
47
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Attachment
REGION II RESPONSE TO OIG DRAFT AUDIT REVIEW - REGION II'S
OVERSIGHT OF SUPERFUND POST-SETTLEMENT ACTIVITIES
Lengthiness of Regional Reviews Delaying Superfund cleanups
The report states in both its summary of findings page 3 and in
the narrative of its findings and recommendations page 9, that
the "initiation of Superfund cleanup work was unnecessarily
delayed after the Region had reached a settlement with PRPs". It
also states that "The approval of workplans, project operation
plans and other documents required prior to initiating field work
on RI/FSs, or other work phases took between 6 and 36 months."
The Emergency and Remedial Response Division has recently
reviewed all of the RI/FS AOs issued by Region II to determine
the minimum practicable time needed to initiate field work.
Based on this review, which was also undertaken to streamline the
review process, we determined that a 6-9 month time frame between
the effective date of the order and initiation of field
activities is the minimum practicable period required prior to
initiation of field work. This time period is required to allow
other state and federal agencies to meaningfully participate in
the RI/FS process so that we can ensure compliance with Section
121 of CERCLA. This Section requires EPA to meet all applicable
or relevant and appropriate requirements (ARARs) whenever it
selects a remedy. It is this requirement that results in the
participation of so many state and federal agencies (see
attachment). The State Department of Law should also be included
on the list of agencies reviewing our documents (page 11).
It is the above-mentioned interactive involvement between EPA and
the other agencies that results in the 6-9 month minimum
practicable workplan review process. In order to expedite the
review of documents, time restrictions are routinely requested by
EPA of the other agencies, but we cannot require them to limit
their reviews nor disallow their participation in the process as
the report seems to suggest on page 10. Their involvement is
essential if EPA is to ensure meeting the many ARARs mandated by
the Superfund legislation.
The report states on page 10 that three or four major revisions
on documents submitted by the PRPs seem to take place prior to
Regional approval. We agree with the findings of the draft
report, however, it should be mentioned that the documents
submitted by the PRPs warrant a thorough review by EPA. In most
cases the PRPs responsible for the performance of the RI/FS have
not done this type of investigation before. These documents
include many technical subparts which must be reviewed by all of
48
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the state and federal reviewers, including sampling plans,
analytical plans, quality assurance plans, and health and safety
plans, before field work can safely and efficiently begin.
For example, on occasion, a PRP will suggest a new idea, in field
analytical screening of a particular chemical. This idea will
need careful review by those parts of our Region II review team
associated with laboratory and field analyses to ensure that the
results will be accurate, reproducible and reliable. On other
occasions, disputes will arise among the reviewers or between the
government and the PRPs over a particular issue (for example, the
construction material used for monitoring well casing is an issue
frequently disputed) and a great deal of time may be needed to
resolve the dispute. In nearly every case where RI/FS field work
has been significantly delayed beyond the 6-9 month time frame,
resolution of issues, like those noted above, has been the cause
of the delay.
The report states on page 16, that "The Region needs to initiate
additional actions to streamline its review process so that PRPs
can commence cleanup operations in a more timely manner".
However, it is important to note our Region's success in
streamlining these time frames during the past few years. In
reviewing the RI/FS orders Region II has issued, we have found a
significant decrease in review/approval time frames for Post-SARA
orders (those issued during the three years since SARA was
enacted in October 1986) and Pre-SARA orders. Since October
1986, the data are as follows:
RI/FS Administrative Orders
Reducing Time Between Order i^uance and
Final Operation Plan Approval
Timt> Period
Pre-SARA
Post SARA
Number of A.O./s
11
12
Work Plan Plus
Operation Plan
Approval Time
Average Range
11.5 months 2-35
8.6 months 2-13
The report states on page 16, that "the Region should establish
time standards and or milestones dates for the expeditious review
of PRP submittals." As stated on page 12 of the report, the
Region places a high priority on the issuance of a Record of
Decision (ROD). The ROD reflects a key turning point in the
remediation of a site. At this juncture the site has been
characterized fully/ remedial alternatives analyzed and the
remedy to be implemented is selected by the Regional
Administrator.
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Without reaching this point/ further remedial action is not
possible. Consequently, the ROD date is the most significant
milestone and time standard around which our reviews revolve. We
do therefore, establish milestones in a generic fashion.
We believe however, that the timeframes for Regional reviews of
PRP submittals must remain flexible due to the varying degree of
complexity of the sites, the review times required by other state
and federal agencies, and the critical importance of EPA assuring
that PRPs conduct their activities in a fashion which will meet
the high standards set in the National Contingency Plan and the
quality which we strive for on EPA lead projects. To establish
fixed timeframes for reviews in an upfront fashion would be
difficult to achieve and may result in compromising the quality
of our reports.
The report acknowledges that "another contributing factor causing
delays was an overworked and understaffed project manager corps"
(page 12). The report should also acknowledge the inexperience
of most project managers to thoroughly review the PRP submittals
thereby relying on their already overworked supervisors for
support and input. This can also result in additional delays.
OIG Audit Recommendation 1 (page 16)
"We recommend that you direct the Director, ERRD, to develop and
implement guidelines which set specific timeframes for Regional
review and approval of PRP submissions."
Region II Response
In the interest of being responsive to the OIG's concern, we will
be addressing the issues of timeframes and review guidelines as
part of our negotiation with New York State to develop a State
Superfund Memorandum Agreement (SMOA). This SMOA will be
developed pursuant to the recently finalized Superfund
Regulations 40 CFR Part 300.500 {National Oil and Hazardous
Substances Pollution). Through these discussions, we will work
towards developing agreements which define our respective roles
and responsibilities as well as developing guidelines which set
timeframes for the review and the approval of PRP submissions.
Automated Tracking System:
The report states on pages 3 and 13 that the Region does not
maintain "an automated post-settlement tracking system to monitor
the timeliness of PRP submissions and Regional reviews."
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Region II Response
We agree with the recommendation, the Region has undertaken an
aggressive role in providing PCs to all of its professional staff
in order to enable us to automate and track all our response
actions. The Region has been installing and implementing during
the past 6 months a Local Area Network call "Wasteland" which can
be used to track all major milestones of EPA-achieved
settlements. This automated post-settlement tracking system will
enable us to monitor the timeliness of PRP submissions and
Regional reviews. We intend to use this system fully when the
outstanding orders for PCs are filled. We are developing a PC
purchasing plan to cover the staffing increases we have received
in FY-90.
OIG Audit Recommendation 2 (page 16)
"We recommend that you direct the Director, ERRD/ to develop and
implement an automated tracking system to monitor specific
post-settlement milestone dates. The use of personal computers
should be considered for this system due to their availability to
ERRD enforcement personnel.
Region II Response
We agree with this recommendation. It should be noted that the
Region will fully implement an automated tracking system to
monitor specific post-settlement milestone dates, once all its
professional staff are provided with PCs. We are working towards
having this accomplished within this current fiscal year.
OIG Audit Recommendation 3 (page 17)
"We recommend that you consider streamlining the review process
for PRP draft submissions. While initial reviews should continue
to be sent to all appropriate parties, technical review of any
revised submission should be primarily limited to the project
manager."
Region II Response
While we generally agree with this recommendation. We note that
the Region is limited by Statutory provisions in implementing this
recommendation. Section 121(f) of CERCLA requires EPA to provide
"for substantial and meaningful involvement by each State in
initiation, development, and selection of remedial actions to be
undertaken in that State". Furthermore, the law requires EPA to
issue regulations which at a minimum include "State-participation
in the long-term planning
51
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process for all remedial sites within the State". Section
121
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It should be corrected to state that employee turnover,
resignations, and re-assignments resulted in the site being
re-assigned to seven project managers on seven separate occasions
Region Needs To Be More Aggressive In Assessing Stipulated
Penalties
Region II Response
The report states on page 4 and then on page 22, that the Region
is not pursuing "a more aggressive stance with PRPs that violate
settlement requirements" ... and recommends that ERRD and the
Office of Regional Counsel "aggressively pursue the option of
stipulated penalties when PRPs are in noncompliance with
settlement document requirements".
We agree the recommendation. However, the report should
acknowledge the Region's pursuit and success in the enforcement
area In FY '89, the Region's settlements amounted to
approximately 30 per cent of the total dollars that EPA achieved
in settlements on a national basis i.e. $150-200 million.
Furthermore, the report should recognize that unlike other EPA
programs, Superfund is not a regulatory program.
Consequently, non-compliance is very difficult to define in the
absence of specific standards and regulations. In the Superfund
program, non-compliance definition often revolves around technical
and scientific differences between PRPs and EPA managers. Often,
these differences are judgmental and not definitive. Our
Administrative Orders (AOs) require PRPs to submit technical
documents for EPA approval. The PRPs, in compliance with terms of
the AO submit the documents but it is the above-mentioned
technical differences of opinion that may constitute and label a
report deficient. In these cases, it is difficult to prove that
the PRPs are out of compliance.
In addition, differences of opinion not only between EPA and the
PRPS but also between EPA and other State and federal agencies can
result in the late submittal of documents by the PRPs through no
fault of their own. In these cases, it is often difficult to hold
the PRPs in violation of the order while we pursue resolution of
our differences.
As mentioned in the report's first paragraph of page 18, the
circumstances of pursuing and seeking penalties are discretionary.
The Region in cases of non-compliance weighs the programmatic cost
of assessing penalties for non-compliance against the specifics of
each case and the benefits of seeking such penalties.
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8
Many such cases are in the "Grey Area" and the program is often
advised to continue to build a case rather than pull the project
back from the PRPs and assess penalties for non-compliance.
In summary, non-compliance is not as "cut and dry" as the report
seems to portray it. It is often difficult to prove and therefore
discretion is applied before non-compliance proceedings are
undertaken.
In reference to the two cases presented in the report on pages 19
and 20, Pasley Solvents and North Sea Municipal Landfill. With
respect to the latter, the facts presented are accurate. With
respect to the former, however, there is a minor but pertinent
inaccuracy.
In the second paragraph on page 19, the report states on "March
28 1989 the Region issued a warning letter to the PRP because
certain required deliverables were not met." In fact, the interim
milestone events which preceded the date of that letter were not
"deliverables/" that is, respondent was not required to deliver
anything to EPA by those interim dates. The first "deliverable"
which respondent failed to provide on time was the draft RI
report, due on September 15, 1989.
When respondent failed to meet that deadline, a meeting was
arranged and held on December 15, 1989. At that meeting
respondent set forth certain reasons for its failure to timely
comply with the project schedule, including its removal of a
contractor and problems with its drilling subcontractor. EPA
informed respondent that theses reasons did not amount to force
majeure excusing compliance under the order, and that respondent
is subject to accumulated stipulated penalties of about $240,000
to date, for its failure to submit the draft RI report by
September 15 as required.
As we have done in a number of other instances, we advised
respondent that we would hold in abeyance any claim for collection
of these penalties pending submission of a revised project
schedule, and subsequent adherence to the schedule. Since that
time respondent has submitted the revised schedule and has timely
submitted monthly reports. The staff assigned to the case have
recommended that resources not be expended to collect the accrued
stipulated penalties unless further violations of the revised
schedules occur. We will be reviewing that recommendation, and
will keep in mind the OIG's concerns as we do so.
OIG Audit Recommendation (page 22)
"We recommend that you require the Director, ERRD, in concert with
the Office of Regional Counsel, to aggressively pursue the option
of stipulated penalties when PRPs are in noncompliance with
settlement document requirements. Justification should be
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provided in those instances where stipulated penalties are not
pursued."
Region II Response
We aqree with the recommendation. ERRD, along with the Office off
Reaional Counsel will be more aggressive in seeking stipulated
penalties with respect to future violations. As the report notes
on page 21, we have already referred for civil action one case
which includes a request for stipulated penalties.
Miscellaneous:
The resort states on page 21, that "As an example of the
Region's non-aggressive approach ... The Region would not react
immediately to non-compliance, but would rather allow two week
arace period after the missed milestone".
The report should note that AOs usually allow a grace period or
minimal penalties for the first week of non-compliance before EPA
can hold the PRPs liable. It is not an indication of the Regions
non-aqgressive approach to violations but rather the result of
implementing standard operating procedures acceptable to all EPA
programs, regulatory or not.
Oversight Of Technical Enforcement Support (TES)
Contractors Needs Improvement
Region II Response
TES Contract Management:
The report states on page 22, that "the Region needs to improve
its oversight responsibilities of TES contractors".
TES III contract, as you know, was a Zone contract. It provided
enforcement support to Regions I, II, III 6 IV and was essentially
managed out of EPA Headquarters. The Regional Project Officers
(RPOs) were assigned in June 1989 under TES V 6 VI, however, the
Project and Contracting Officers (CO) are still located in
Headquarters. Thus, there is an inherent time lapse in the
management and administering of the TES contracts because of the
qeog?aphical distance between the RPO and the CO. This is
explained further in the following paragraphs, in reference to
your subsequent observations.
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10
Work Delays:
The report states on page 23, that "there were delays in
submitting or processing TES contractor deliverables in five of
the eight cases reviewed, .... we found that TES oversight work
plans were not always timely approved. In one case the TES
oversight work plan took seven months to approve .
TI- will be helpful to understand that the preparation and approval
of a responsible party oversight work plan (RI/FS, RD, RA) is not
11 cut and dry as it may appear. It is, rather, an interactive
process involving several parties such as the RPM, ORC c DOJ
(sometimes) representatives, the TES contractor and responsible
parties, their consultants and attorneys.
ThP oversiqht of an RP action is dependent upon the work plan and
schedule agreed to by the parties listed above. The TES
contractor's work plan is subject to revisions and adjustments
based on the outcome of negotiations between EPA and the
responsible parties. If the RP does not have a firm schedule of
activities, which in turn may depend upon numerous factors such as
legal, institutional or technical considerations, the final
approval of the TES work plan may be delayed until all the
impending issues are mutually resolved. The approval of the work
plan depends upon the finalization of the scope of work and
schedule of activities agreed to by the participating parties.
YOU should, however, recognize and understand the dilemma that the
TES contract operation is "paper" and "procedure" dependent.
several pieces of paper have to pass through several hands in the
Region and also in EPA Headquarters before an approval of a work
plan can take place. These individuals are the Regional Project
ManaaeT Regional Project Officer, Project Officer, Contract
Specialist? and the Contracting Officer located in Headquarters.
Fach individual was required to review and sign off on the
document" before an "approval" was issued to the TES III
contractor. However, the procedures were changed, in December
1988, when the PO sign off was eliminated.
The specific instance, reviewed in your evaluation, should be
viewed in the context of circumstances resulting in the delay of
the work plan approval.
Also please bear in mind that the contract clause requiring the
approval of the work plan within forty-five (45) days of
submission is provided to safeguard the government against
unnecessary costs when the work plan is not (can not be) approved
wi?hin the 45 day limit. The clause does not obligate the
government to approve the work plan within 45 days or pay
unnecessary costs. If the work plan is not approved within
days, the contractor stops work until the work plan is
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11
approved, There are circumstances when it is not feasible to meet
the 45 day schedule due to various reasons some of which are
listed below:
Other duties of the RPM which have higher priorities/
Impending negotiations with the Responsible Parties,
State or other Federal Agency comments are awaited,
Schedule implications,
Procedural or resource constraints
We did have a procedure in .place whereby the contractor submits a
list of pending actions to the RPM and their supervisors. This
summary report listed the type of pending action, due date and the
stop work date. The contractor was required to stop work if the
approval was not granted by the due date. A partial approval of
the work plan was not permissible under TES ill, resulting in
stoppage of work. On the contrary, a conditional approval is
permissible under TES V & VI, therefore few work stoppages will
occur under the current contracts,
We would also like to point out that you consider the statistical
profile of the occurrence of delays in the overall TES III
contractor oversight and management. The data was pulled from the
May 1989 monthly progress report.
Total No. of work assignments to TES III 150 (CERCLA)
Major Assignments
No. of RI/FS oversight
Review of RP Plans
Enforcement support
Health/Environmental assessments
Enforcement Feasibility Studies
Field Work
Subtotal
58
31
15
17
9
2
76
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12
Medium Assignments
Community Relations Plans
PRP Searches
Subtotal
19
_34
53
Minor Assignments
Expert Consultant/Witness
Administrative Record
MRS ranking
Subtotal
7
1
13
21
The contractor's data base also indicates that fifty-eight
significant work plans were approved within the specified time
frame In sixteen cases the work assignment was cancelled or
returned due to conflict of interest or other reasons. There were
cases, recognized, where the work plan approval was delayed. The
circumstances of such delays are explained in the foregoing
paragraphs.
Delay in Procuring the Laboratory:
The report states on page 24, that "in another case we found that
TES contractors did not solicit a bid for a laboratory. As a
result the collected air samples exceeded their holding time".
One case where an inordinate delay occurred has been discussed in
detail. However, there is no mention of the total number of cases
under TES III, neither is there a trend analysis to portray the
nature, extent and the occurrence of the "delays" discussed in one
case. The TES III or other Superfund support systems are not
absolutely "fail safe" or "error free". However, it should point
out that the oversight contractor's (TES III) performance largely
depends upon the RP schedule. In cases where the RP contractor
fails to show up for a sampling event, the TES contractor's
scheduling of procuring the lab, shipping and analyzing the
samples, preparing the reports and submitting the deliverables to
EPA would eventually be affected.
with regard to the specific example of delay, if samples were
shipped to a lab for analysis in March or April, the results are
returned in four weeks and the data validation requires another
two weeks. Assuming a complete data package was received from the
lab(s), it will put us in a mid June timeframe. However, if the
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13
lab delivered an incomplete data package, it can not be validated
until the missing component is received. Data validation only
takes place after a complete data package is received. Therefore,
the sequence and dates of events described in your observations
are, in our opinion quite normal.
However, your observation regarding the inadequate project
monitoring is earnestly noted. In various sections of this
memorandum We have described the numerous improvements that have
been instituted in ERRD operations to enhance the effectiveness of
program management.
Late Monthly Progress Report:
The report states on Page 24, that "We also found one case where
TES contractors submitted untimely progress reports from 18 to 28
days late".
According to the terms of the TES contract, the monthly progress
reports are required to be submitted by the 20th day of the
following month. As we pointed out earlier, TES III was a zone
contract and the monthly progress reports were produced and
distributed by the contractor's zone office located in Fairfax,
Virginia. Usually, the reports were received on time. Occasional
delays were exceptions. The contractor was cognizant that the
schedule was one of the important evaluation categories in the
periodic performance evaluation. The contractor's award fee was
dependent upon maintaining the schedules for delivering the
progress reports. If delays were a consistent problem on the
majority of deliverables, including progress reports, the
performance rating and the award fee would have been negatively
impacted.
TESWATS:
The report states on Page 25, that "the TESWATS Microcomputer
based system was used for tracking purposes. We found that Region
II's TESWATS system neither provided schedule nor status
information to the RPO and Project Managers."
TESWATS was developed and implemented by PCMD for the primary
purpose of TES contract administration. It is designed to process
work assignments and to monitor the hours and dollars used by the
contract. It is deficient in the monitoring and management of
individual work assignments as to the budget, schedules,
deliverables and contractor performance.
We have initiated the use of a Regional monitoring system, which
has been developed for the Regionally managed ARCS (Alternative
Remedial Contracts Strategy) contracts. Since, another FTE has
been added to the management of TES, the implementation is
imminent. My staff will be more than willing to share with you
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14
the capabilities of ARCS management system. We are, therefore
confident that in the near future the TES contractor monitoring
will considerably improve with the help of this management tool.
Monitoring Contractor Performance:
The report states on Page 26, that "EPA must actively oversee and
regularly monitor contractor performance".
As discussed in the foregoing paragraph, we will be enhancing the
TES contractor monitoring by adapting the ARCS monitoring system.
To better monitor and evaluate the contractor performance, we have
recommended to the PCMD substantive revisions to the TES contract
fee plan.
Under the current TES fee plan the performance is evaluated on the
basis of mean numerical scores for all active work assignments.
The changed fee plan recommends subjective weights to schedules,
budgets, responsiveness, reporting, effort and the quality of
deliverables. The fee plan is, in certain respects, similar to
one implemented for the ARCS contracts. The new fee plan has been
jointly developed between Regions I and II. This request for
contract modification has been submitted to the TES Contracting
Officer for incorporation to the TES V & VI contracts. The
adoption of the new fee plan will have a positive effect to the
management of the contracts.
We have formalized written procedures for administering TES work
assignments. A copy is attached herewith for your information.
We hired a Chemical Engineer in September 1989 and assigned him to
assist in the management of TES V & VI contracts. The TES-RPO now
has a back up person, which has resulted in reducing the
processing time of the TES work assignments.
016 Audit Recommendation 1 (page 31)
"We recommend that you improve the quality and timely monitoring
of TES contractor's required reports and workplan submittals and
compliance with milestone dates."
Region II Response
The following enhancements and improvements have been made to
assure the quality and timely monitoring of the TES contractors:
The microcomputer based monitoring system, developed for oversight
of the Regional ARCS contracts will be adopted to monitor the TES
contractors' schedules, deliverable approvals and all the major
and medium sized work assignments, by May 1990. Another FTE has
been added to supplement the RPO; this will enhance the oversight
monitoring in line with the recommendations included in the draft
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15
audit report. We will reassess the need for additional FTE in
this area over the next three months.
We have draft a revised contractor fee plan and have submitted
this to PCMD for review and approval The revised fee plan rewards
contractors based upon the quality of services provided under the
TES contract, rather than the numerical score. Once adopted, the
revised fee plan will improve the performance of TES contractors.
OIG Audit Recommendation 2 (page 31)
"We recommend that you expedite the Regional review and approval
system for TES deliverables."
Region II Response
In order to expedite Regional review and approval of work plans
Region II has made three improvements.
* ERRD has received additional FTE to support the
enforcement program. As a result, the reduced workload
on project managers will provide them the relief to
devote greater effort to oversight of the TES contractor
deliverables.
* We have added another FTE to the RPO function, which
will also lead to expedited review of TES assignments
and deliverables.
* The ability of the RPO, under TES V 4 VI to request
partial or conditional approval of the TES deliverables
will also be helpful in improving the work product. In
addition the adoption of Regional tracking and
monitoring tools will enable the supervisors to better
track the contractor deliverables.
Region II Response
Project Manager Site Visits:
The report states on Page 26, that "Project Managers were not
making regularly scheduled site visits to monitor TES contractor
performance".
Concerning PM site visits, it should be pointed out that site
visits by the PM are dependent on the level of ongoing field
activity at the site. As noted before, development and approval
of work plans before initiation of site activities can be a
lengthy process which is necessary to ensure the proper/adequate
amount of field data is collected.
A contractor may be "on-board" for six months to a year before any
field work begins thus obviating the need for PM site visits in
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16
overseeing the contractor. The particulars of the sites discussed
and the site specific timeframes were hopefully considered when
evaluating the need for PM visits. In many cases, the type of
activity in the field does not warrant field visits. For example,
although an RI/FS may extend over 18 months or more, the actual
well-drilling and sample collection may only be a few weeks. More
than one or two site visits by the PM during this short active
field period may not be warranted.
The PM that made the five (5) site visits may have had some
special concerns which resulted in this number of visits.
Generally, the PM and his/her supervisor decide on the appropriate
number of site visits. Another factor is the timing of the
visits Often the RP contractor may provide short notice of a
field event making it impractical for the PM (who often is in
charge of a number of sites with all the associated negotiations,
meetings, etc.) to perform a field oversight visit.
it's difficult, if not impossible, to pre-determine the number of
field visits required. Thus, we expect PMs to periodically visit
the 'site as warranted by taking their associated workload into
consideration. Your suggestion about written reports is a good
one and we plan to direct the supervisors and PMs to provide this
after site visits. These reports will be useful in assessing the
overall contractor performance and provides information to
succeeding PMs in the event of staff turnover. This exchange of
information currently occurs. The new PMs are briefed on the
sites history.
Suoervisors, the RPO and the results of the Performance Evaluation
Board are deemed to provide an "institutional memory" to the new
PM in the event the contractor has not been performing in a
diliaent manner. As a point of information the OSWER Directive
vou refer to {19355.3-01FS1: Getting Ready Scoping the RI/FS) was
issued in November 1989 and received in December by my office. We
have circulated copies and intend to have the PMs follow the
guidance.
Quality Assurance Audits:
The report states on Page 27 that "Region II was not conducting
many quality assurance review audits of TES contractors".
We agree with this recommendation. Although we have not conducted
many audits, we do have a QA plan in place. For each site where a
PRP is conducting the work, the PRP must submit a QA plan which is
reviewed and approved by EPA before work begins. The TES
rontractors follow the same QA plan to ensure we're providing
comparable data for review. Results of PRP sampling are assessed
in relation to splits analyzed by the TES contractor. If the two
independently analyzed samples provide similar results, we can
project that the QA plan has been followed. If sample results are
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significantly different, we then need to resolve their differences
(i e , lab errors, sample preparation errors, arithmetic errors in
calculations, etc.). In 1986, the ERRD in conjunction with BSD
initiated training in the QA area. PMs and contractors attended
these sessions which established a common ground.
For your information, Monitoring and Management Branch (MMB) of
our ESD conduct field audits to ensure that the RP contractor is
following the approved QA plan. Information about the field audits
performed by the MMB on the RP managed sites during the last
fiscal year, is available if necessary.
In addition, Monitoring and Management Branch (MMB) is already
instituting changes in operating procedures to facilitate both
plan reviews and our audit role in the PRP-lead area.
TES Contractor Office Reviews:
The report states on page 29, that "the RPO was not conducting
periodic TES contractor office reviews".
As stated earlier the RPO function was recently delegated to the
Region. The primary reason for a lack of formal spot checks of
contractor operation should be attributed to resource limitation.
One person was assigned to manage all enforcement support
activities. These activities encompassed the TES III & IV
management, project officer responsibility for five Niagara area
site specific contracts, coordination of PRP searches and cost
recovery documentation, case budget management for enforcement
activities, establishing account numbers for new CERCLIS sites and
myriads of other non descript duties.
However, recently some of the enforcement support functions have
been shifted to others by adding resources, and RPO function is
consolidated between two FTEs. The Region intends to add a third
FTE to the RPO function. Thus in FY'90 we have planned the RPO
function to perform most of the activities identified in the TES V
& VI Users Manual. It should however be noted that Procurement
and Contracts Management Division (PCMD) and Property
Administrator's staff, which are located in EPA Headquarters do
perform periodic audits of the TES contractors. These audits
cover the areas of concern pointed out in your report.
OIG Audit Recommendation 3 (page 31)
"We recommend that you develop procedures and guidance to ensure
that periodic field oversight reviews, quality assurance audits,
and contractors office reviews are scheduled, performed and
adequately documented."
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Region II Response
The suggestion by the DIG of written reports for field visits for
PM has already been implemented in the Region. This will insure
that information will be provided to succeeding PMs in the event
of staff turnover. Also, copies of the OSWER Directive referred
to (I9355.3-01FS1: Getting Ready Scoping the RI/FS) has been
circulated to the project manager. Based on our actions taken
this portion of the recommendation which focuses on documenting
project site visits should be eliminated.
As to the Quality Assurance Audits, we do have a QA plan in place.
The Monitoring and Management Branch (MMB) of our BSD will not
only continue to conduct audits to ensure that the RP contractor
is following the approved QA plan but also to audit the EPA
oversight contractors.
Improvements concerning TES Contractor Office Reviews are now
possible since some of the enforcement support functions have been
shifted to others by adding resources, and the RPO function is
consolidated between two FTEs. The Region also intends to reassess
the RPO functions to determine the need for additional FTEs. Thus
in FY'90 we have planned the RPO function to perform most of the
activities identified in the TES V & VI Users Manual.
Training:
Region II Response
The report states on page 29, that " Project Managers were not
receiving required training prior to performing TES oversight
responsibilities".
Our standard practice is to provide Project Officer and Contract
Administration courses to each Project Manager (PM). These
courses are developed and given by the staff of Procurement and
Contracts Management Division (PCMD), twice a year. Thus far 75%
of ERRD's PMs have taken both the courses and 65% have
participated in one course. In addition, twenty-two PMs have taken
the RPM Training Course, in April 1989. This course has been
developed by the Office of Emergency and Remedial Response (OERR)
for the PMs - Work Assignment Managers - to teach the specific
skills required for the management of work assignments under cost
plus award fee (CPAF) type contracts.
Additionally, each TES Project Manager is furnished with a TES
User' s Guide and provided with individual training sessions in the
proper use of TES contracts. WE have also/ recently adopted a
Mentoring Program as recommended in the EPA's 90 Day Management
study Implementation Plan. Under the Mentoring Program each new
PM is coupled with a senior PM to receive "on the job" training on
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a continuous basis. Furthermore, all enforcement PMs received TES
work assignment management training, in small groups of seven to
ten PMs at a time to maximize dialogue and enhance understanding.
Also, PMs supervisor, the TES RPO and the Chief, Contracts
Management Section are additional resources for PMS for ad hoc
consultation and problem resolution.
You should also be aware that EPA has established an OSC/RPM
Academy for the comprehensive training in all pertinent areas of
Superfund site management. Each PM will devote two weeks in the
Academy. We sent six (6) PMs to the first two sessions of the
Academy and have nominated ten (10) more for the next session. We
intend to send all the PMs in the future, subject to the
availability of the slots in the Academy.
I would respectfully submit that you should also consider the
thirty-three percent separation rate of the Project Managers in
ERRD coupled with the fact that fifty percent of the Project
Managers are in the program for less than a year. Each Project
Manager has to undergo the mandatory training such as, Health and
Safety, comprehension of the Superfund program, statutes and
regulations, risk assessments and a number of other topics.
Project officer and contract management training, though relevant,
sometimes does not get precedence over other important trainings
which are more crucial to site clean-up and negotiations with
responsible parties.
We are establishing a computerized tracking system for Project
Managers and we intend to improve the Project Manager training in
the areas of contract management. However, we have held informal
training sessions for the all Project Managers with the
contracting and project officers on several occasions to impart
the basic contract management skills.
OIG Audit Recommendation 4 (page 31)
Require that project managers attend prescribed training . Such
training should generally be received prior to performing TES
oversight responsibilities. Consider including this requirement
in performance standards, if it is not already stated.
Region II Response
We agree with the recommendation. Currently the Region requires
TES Project Managers to attend the Project Officer and Contract
Administration course before undertaking any TES assignments.
However, in some cases it is not feasible to provide these
trainings to the RMP before hand. ERRD will make every effort to
comply with this part of the recommendation.
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Each new RMP is required to attend the OSC/RPM Academy within 6
months of start date. The academy provides comprehensive training
in all areas pertinent to Superfund, including contract
management. Region II has sent six RPMs to the academy thus far
and ten more are expected to attend the next session.
ERRD will schedule in house training bases on the TES User's Guide
which contains written procedures for administering TES work
assignments. The first two training sessions have been scheduled,
for March 19th and the first week of April. In addition we have
Established a computerized tracking system which is intended to
improve the monitoring of RPM training and enable the supervisor
to forecast training needs and the frequency and type of training
needed.
ERRD will also include the appropriate training requirements in
the performance standards of the RPM
Oversight Costs Were Not Billed And Collected In A Timely
Manner
Region II Response
The report states on pages 5 and 31, that "The Region had not
sought to recover from PRPs costs for cleanup oversight as
stipulated in settlement documents".
The report should include and indicate the Region's aggressive
cost recovery program as evidenced by the fact that in FY '89 we
have referred to the Department of Justice for judicial litigation
13 cases amounting to $33.3 million. In addition, the Region has
collected to date approximately $21 million from either PRP
settlements or collection of oversight costs. Given, however, the
overextended nature of our workload and in order to effectively
utilize our limited resources, we have established various cost
recovery priorities to enable us to optimize the dollars collected
for replenishment of the Superfund Trust Fund. This results in an
effective cost recovery program that pursues cases which can
generate millions of dollars. The Region's foremost priority is
to settle with PRPs on past costs. This way, we avoid extensive
litigation which is resource intensive and we immediately recover
past costs which can be deposited in the Trust Fund.
The second cost recovery priority is the referral to the
Department of Justice under Section 107 of CERCLA, those cases
where EPA incurred or is about to incur substantial amounts of
money e.g. remedial actions or expensive removal actions. In this
category, sites with an impending statute of limitations deadline
are given the highest priority.
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The third priority is recovery of EPA oversight costs from PRPs.
These costs are a small percentage of total site costs when
compared to our efforts to recover the much larger costs
associated with remedial and removal actions filed under Section
101 of CERCLA. Furthermore, the oversight costs are not impacted
by the statute of limitations since they are contained in
agreements between the Agency and the PRPs, i.e. Administrative
Orders on Consent.
OIG Audit Recommendation 1 (page 34)
"We recommend that you establish and implement an effective system
for the timely recovery of oversight costs involving superfund
cleanup sites. Specifically/ require that mandated settlement
document itemized cost accountings are sent to PRPs within 90 day
of the end of each fiscal year. The director, ERRD, should assign
an individual in that Division responsibility for determining
which sites require cost accountings and assuring that staff
members obtain necessary cost documentation for processing
billings."
As we have previously discussed, resource constraints and a high
rate of employee turnover have required that we focus attention on
Superfund activities needed to meet statutory requirements. With
the recent increase in the Region's FTE allocation, we will be
able to hire personnel to devote additional attention to the
recovery of EPA oversight costs. We have set up the following
procedures:
* Henceforth, any assignments tasked to the Technical
Enforcement Support contractors will contain provisions
requiring the contractor to provide EPA on an annual basis
itemized documentation of their cost expenditures.
* These cost expenditures will be included in an EPA
demand letter to the PRPs seeking immediate reimbursement of
our oversight cost. A standard demand letter will be
developed in concert with the Office of Regional Counsel by
March 31, 1990.
* The Region has hired a cost recovery coordinator whose
sole responsibility is the administration of cost recovery
activities in Region II. One of his responsibilities will be
coordinating the issuance of demand letters for oversight
costs to PRPs.
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OIG Audit Recommendation 2 (page 34)
"We recommend that you initiate action to collect the $627,711 in
oversight costs identified in our report."
Region II Response
At this point, we are working towards the completion of our cost
recovery documentation packages for oversight costs so that we can
pursue these funds during this fiscal year.
OIG Audit Recommendation 3 (page 34)
"We recommend that you include language in all settlement
documents that requires payments not received within 30 days start
accruing interest."
Region II Response
With respect to Recommendation 3 of the report to incorporate
language in all settlement documents requiring payments not
received from PRPs within 30 days to start accruing interest, the
Agency does require this provision for all its Consent
Decrees. We will be incorporating this recommendation in our
Administrative Orders as well.
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ATTACHMENT
Scoping the RI/FS
Document
RegionII Super fund Document Reviewers
Reviewerq
WQRKPLAN DEVELOPMENT
Draft Workplan
Final Workplan
Draft Operations Plan
Final Operations Plan
Air Compliance Branch
Air Programs Branch
ATSDR
Corps of Engineers
Department of Interior
Environmental Impacts Branch
Environmental Services Div.
EPA-Headquarters
ERRD-Hydrologist peer review
ERRD-Other RPMs peer.review
National Oceanic and
Atmospheric Administration
RCRA Branch
Responsible Parties
State of NJ or NY or PR
(including all appropriate
State agencies)
Water Management Division
Same as above/ plus:
Office of Regional Counsel
OPERATIONS PLAN*
Same as draft workplan list
plus Office of External Programs
Same as above, plus
Community Groups
*Includes Sampling and Analysis Plan, Health and Safety Plan,
Community Relations Plan.
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APPENDIX 2
DISTRIBUTION
Recipient
Office of Inspector General
Inspector General (A-109)
Deputy Inspector General
Divisional Inspector General for Audit,
Internal Audit Division
Director, Audit Operations Staff
Other Divisional Inspectors General
for Audit
Headquarters Liaison
Regional Office
Regional Administrator, Region 2
Audit Followup Coordinator
Headquarters
Comptroller (PM-225)
Agency Followup Official (PM-208)
Agency Followup Official (PM-225)
Attn: Director, Resource Management Division
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