SIJPERFIJND
RD/RA Negotiation Time Frames
E1SFG7-11-0024-8400015
March 27, 1998

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Inspector General Division	Headquarters Audit Division
Conducting the Audit	Washington, DC
Regions Involved	Regions 3 and 5
Program Office Involved
Office of Enforcement and Compliance Assurance,
Office of Site Remediation Enforcement

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
MAR 2 7 1998
OFFICE OF
THE INSPECTOR GENERAL
SUBJECT: RD/RA Negotiation Time Frames
Report No. E1SFG7-11-0024-8400015
FROM:
Norman I
Divisional Inspector General for Audit
Headquarters Audit Division
TO:
Barry Breen, Director
Office of Site Remediation Enforcement
Office of Enforcement and Compliance Assurance
Linda Boornazian, Director
Policy and Program Evaluation Division
Office of Site Remediation Enforcement
Office of Enforcement and Compliance Assurance
Attached are the results of our review of time frames for negotiating remedial
design and remedial action (RD/RA). This report is designed to provide you information
as part of the OIG's Advisory and Assistance Services. We, therefore, have not included
formal recommendations. We have included several suggestions for your consideration.
This concludes our work on this assignment and no written response is necessary
We analyzed overall trends in the length of RD/RA negotiations for fiscal years
1990-1996 and whether Superfund enforcement reforms affected the length of
negotiations. In general, we found the average time frames for RD/RA negotiations were
longer in later years (1995 and 1996) than in earlier years. We also noted that changes in
the time frames coincided with two major policy changes, "enforcement first" and the
Superfund reforms. In addition, different regional management approaches appear to
have influenced RD/RA negotiation time frames. Case specific factors, which we did
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not include in our analysis, and many of which are not within EPA's control, can also affect
RD/RA negotiation time frames.
You may want to consider the following suggestions in addressing RD/RA negotiation
time frames: (1) exception reporting and tracking of RD/RA negotiations that exceed 240 days;
(2) assuring there is a written policy that establishes a formal process for extending the
negotiations beyond 180 days and requires headquarters approval when appropriate; (3)
encouraging Regions to consider issuing unilateral orders with effective dates deferred to the end
of the new moratorium period when appropriate to help ensure continued progress on long
negotiations; and (4) continuing to emphasize early RD starts to assure negotiation time frames
do not impact the pace of cleanup.
This report represents the opinion of the OIG and does not necessarily represent the final
EPA position. In this particular review, the OIG did not measure the offices' performance against
the standards established by the National Oil and Hazardous Substances Pollution Contingency
Plan (NCP). The results contained in this report are not binding in any enforcement proceeding
brought by EPA or the Department of Justice under section 107 of the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA) to recover costs incurred
not inconsistent with the NCP.
We appreciate the opportunity to work with you and your staff in answering some key
questions about the RD/RA negotiations process. If you have any questions or need additional
information about our work, please contact Fran Tafer, Headquarters Audit Division at (202)
260-2824.
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PURPOSE. SCOPE AND METHODOLOGY
EPA's regional offices and the Office of Enforcement and Compliance Assurance
(OECA) have a challenging task integrating competing priorities at the RD/RA
negotiation stage. One of the principles underlying EPA's Superfund enforcement
program is that those responsible for the release should pay for and correct the
damage caused and prevent future problems. At the same time, EPA's Superfund
reforms call for fairer treatment of all parties and reduced transaction costs. EPA
negotiators must take into account site-specific factors such as the strength of available
evidence. They must also work within judicial precedents applicable to their Region.
These priorities and other factors affect the extent to which EPA will negotiate with
potentially responsible parties (PRPs) to achieve a settlement before using
enforcement tools (e.g., unilateral administrative orders, litigation) or Fund-financing to
move the cleanup process forward.
Purpose
We initiated this assignment based on results of past OIG audit work on
Superfund administrative improvements and in-depth case studies of three Superfund
sites. The objectives were to analyze timeliness of the Agency's RD/RA negotiations;
determine the overall trends; and gauge the effect of Superfund enforcement reforms
on the timeliness of the negotiations. We conducted the work in cooperation with the
Office of Site Remediation Enforcement's (OSRE) Policy and Program Evaluation
Division as part of our management advisory services to address questions about
timeliness of RD/RA negotiations since 1990.
Background
Superfund time frames have been a concern to EPA and the Congress. The
Agency has initiated several reform efforts over the years in an effort to make the
Superfund program work faster and fairer. A growing emphasis on enforcement in the
late 1980s culminated in EPA's June 1989 A Management Review of the Superfund
Program (90-Day Study) and its recommendation to increase use of enforcement and
settlement authorities to induce PRPs to do more cleanups. This approach is
sometimes referred to as "enforcement first." The November 1989 Superfund
Enforcement Strategy and Implementation Plan (1989 Plan), prepared in response to
the House and Senate Appropriations Committees, addressed enforcement issues in
more detail. It stated that:
"Approximately 80% of negotiations are not fully completed during the
moratorium period, although many agreements-in-principle are reached or
nearly complete. The Regions were uncertain when unilateral
administrative orders (UAOs) should optimally be used."
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The second broad change affecting Superfund enforcement was announced in
June 1993. The Agency issued a series of initiatives to strengthen the Superfund
program prior to its reauthorization. Although some Superfund reforms addressed
timeliness, the enforcement-related reforms were not meant to address timeliness.
One of the goals of these initiatives was "increasing enforcement fairness and reducing
transaction costs." As a result, the program focus shifted toward implementing
enforcement reforms that would provide for more equitable treatment of PRPs.1 This
change in program emphasis was reflected in the Agency's Superfund enforcement
priorities for the first time in fiscal year 1993 and was given greater attention in fiscal
1994. Moreover, "enforcement fairness" is a continued priority as indicated by the
initiation of additional enforcement reforms in February and October 1995.2 Program
management manuals setting out annual priorities added enforcement fairness as a
separate program priority in 1993. (Enforcement first remained a priority.)
Lengthy enforcement negotiations were identified as a barrier to timely and cost
effective cleanups in the 1995 EPA OIG Review of Barriers to Superfund Site Cleanups
(Report 6400016, November 29, 1995). During 1997, GAO reported on the broader
question of overall time required to clean up Superfund sites, concluding that site
cleanup is taking longer than before (Superfund: Times to Complete the Assessment
and Cleanup of Hazardous Waste Sites, GAO/RCED-97-20, and Superfund: Duration of
the Cleanup Process at Hazardous Waste Sites on the National Priorities List
GAO/RCED 97-238R). EPA disagreed with GAO's methodology and conclusions. The
Congress held hearings in February 1997 and February 1998 on overall Superfund
time frames.
Taken together, the law and EPA guidance provide for a 180-day moratorium on
EPA remedial action. The purpose of the moratorium is to provide a period for the
Agency and PRPs to conduct RD/RA negotiations. The Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA), as amended by Superfund
Amendments and Reauthorization Act of 1986 (SARA), established, under Section 122
(e), a 120-day moratorium for remedial design/remedial action (RD/RA) negotiations
during which the Agency may not start remedial actions. This depends, however, on
the PRPs making a good faith offer within 60 days of receiving a special notice letter.
EPA policy issued in 1987 allows two thirty-day extensions, increasing the potential
moratorium period to 180 days.
^he enforcement reforms in 1993 included greater use of allocation tools (e.g., non-binding
allocation and alternative dispute resolution) and de minimis/de micromis settlements as well as
evaluating and piloting mixed funding settlement demonstration projects.
2These reforms included expedited settlements, allocation pilots, adopting private party
allocations, orphan share compensation, equitable issuance of UAOs, revised de micromis guidance,
and site specific special accounts.
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Subsequent EPA policy and guidance discuss the importance of managing
negotiation time frames. The 1987 Interim Guidance: Streamlining the CERCLA
Settlement Decision Process stated that, "while the Section 122 provisions related to
negotiation moratoria are discretionary, EPA policy will be that those provisions should
generally be employed." The 1989 Plan's implementation steps stated that the
Regions should be prepared to issue a UAO promptly if (1) a good faith offer is not
received within 60 days; or (2) settlement is not reached within 120 days and progress
towards settlement is insufficient. Even when the moratorium is extended, the 1989
Plan stated that "Regions should be encouraged to issue unilateral orders with effective
dates delayed to the new negotiations deadline." The June 11, 1990 Integrated
Timeline for Superfund Site Management states that the "'enforcement first' process is
particularly vulnerable to delays if negotiation deadlines are not established or if they
are routinely allowed to slip."
Scope and Methodology
We analyzed one part of the overall Superfund process, RD/RA negotiations.
The scope of our analysis was national, focusing primarily on the fiscal 1990-1996
period. In addition to analyzing national data on RD/RA negotiation time frames, we
met with Headquarters staff and Superfund remedial project managers (RPMs) and
attorneys in Region 3 and Region 5 to discuss results of the analysis and factors
affecting the length of RD/RA negotiations, including Superfund reforms. We analyzed
National Priorities List sites, excluding state-lead and Federal facility sites.
To analyze the timeliness of the Agency's RD/RA negotiations, we used several
methods to identify overall trends. We concentrated on changes in EPA policy and
guidance because it should affect how RD/RA negotiations are conducted and can be
controlled by the Agency. We used these analytical methods to address the second
key objective of gauging the effect of Superfund enforcement reforms on the timeliness
of the negotiations. We discussed our results with OSRE periodically and used their
suggestions for additional analyses. As we looked for the effect of the reforms, we also
saw the earlier effect of the 90-Day Study and related policy changes.
We calculated fiscal year averages for: (1) negotiations started in fiscal 1990-
1996 and (2) negotiations completed in fiscal 1990-1996. Although these two
calculations include many of the same negotiations, they produced very different
results, as seen below in this report. We also analyzed the percentage of negotiations
completed within the moratorium period and beyond and calculated median values.
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To further analyze how the Superfund enforcement reforms may have affected
the duration of RD/RA negotiations, we chose to examine durations before and after
that change. First, we excluded the initial year in which the reforms were announced
(fiscal 1993). Then we calculated (1) the average length of negotiations completed in
fiscal 1990-1992, before reforms began; and (2) the average length of negotiations
started in 1994-1996, after reforms were underway. The negotiations completed in
1990-1992 would not have been influenced by the reforms, but those started in 1994-
1996 may have been affected. We used the same methodology to analyze the effect of
the 90-Day Study.
For 12 negotiations started within our time period that were still ongoing when
we concluded our work, we assigned a temporary ending date of January 31, 1998.
This allowed us to include these ongoing negotiations in our calculations based on start
dates. Without including them, we believed the averages calculated by starting date
would have been overly optimistic because they would have excluded the on-going
negotiations. Please see Appendix 2 for a more detailed discussion of scope and
methodology.
This work was completed in accordance with generally accepted government
auditing standards except for the fourth field work standard on management controls.
We did not formally assess the validity and reliability of CERCLIS data or controls.
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RESULTS AND MATTERS FOR CONSIDERATION
Average RD/RA Negotiation Time Frames Have Changed Over Time
We found different patterns when calculating the average duration of RD/RA
negotiations by fiscal year, depending on whether we used negotiation start dates or
completion dates. The trend shown by the completion date analysis seems to parallel
the broad policy changes discussed above; however, the trend based on starting dates
is less clear. (See Figure 1.) Coincidental^, the actual number of negotiations started
and completed declined from fiscal 1991 through fiscal 1996. (See Figure 2).
Figure 1
Average Length of RD/RA Negotiations: 1988-1996
420
360
300
« 240
Q 180
120
1988 1989 1990 1991 1992 1993 1994 1995 1996
Fiscal Year
Based on Date Started
Based on Date Completed
Fiscal Year Average
1988
1989
1990
1991
1992
1993
1994
1995
1996
Based on Date Started
219
312
183
229
266
276
254
284
267
Based on Date Completed
251
227
326
190
214
203
326
372
367
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Figure 2
Number of RD/RA Negotiations: 1988-1996
160
140
120
100
60
40
20
1988 1989 1990 1991 1992 1993 1994 1995 1996
Fiscal Year
«— # Started —¦— #Completed
Fiscal Year
1988
1989
1990
1991
1992
1993
1994
1995
1996
# Started
117
108
98
154
104
100
68
66
43
# Completed
98
108
117
134
118
84
90
68
58
As can be seen in Figure 1, fiscal year averages based on completion dates
form a dramatic U-shaped curve between 1990 and 1994. Superfund enforcement
policy changes in fiscal 1989 and 1990 appear to have set the stage for a 42 percent
drop (136 days) in average RD/RA negotiation time frames-from 326 days in fiscal
1990 to 190 days in 1991. The drop occurred about one fiscal year after EPA's
"enforcement first" emphasis was highlighted in the 90-Day Study and the 1989 Plan.
Similarly, negotiation times rose 61 percent (123 days), from 203 days in 1993 to 326
days in fiscal 1994, the year after enforcement fairness was added as a program
priority. (The higher numbers in 1990 and 1994-1996 may also be due to the Agency
completing some negotiations that had been in process for a long time. We discuss
this possibility below in sections on median values and proportion completed within the
moratorium period.)
The picture is less obvious when RD/RA negotiating time is calculated using the
dates negotiations were started. For example, after the 90-Day Study was issued,
average time declined from 312 days in fiscal 1989 to 183 days in fiscal 1990, a 41
percent (129 day) reduction. No similarly dramatic change occurred after the
Superfund enforcement reforms were introduced. In fact, average time for negotiations
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started each year rose steadily after fiscal 1990, except for small drops in 1994 and
1996. Negotiations started in fiscal 1993 and 1995, when the Superfund reforms were
issued, were longer than other years, but the variation between 1992 and 1996 is
relatively small (no more than 30 days).
When graphed, the starting date averages form a pattern from fiscal 1988-1992
that is roughly similar to the pattern formed by the completion date averages for fiscal
1989-1993. To see how closely the starting date averages seemed to predict the
following year's completion date averages, we took our original graph (Figure 1) and
moved the starting date averages one year forward. (See Figure 1a.)
Figure 1a
Comparison of Average Time Frames
420
360
O 180
120
60
1989 1990 1991 1992 1993 1994 1995 1996
Completion Date Fiscal Year
—•— Starts	—¦— Completions
Note: Fiscal year averages based on date started were moved forward one year in this table and chart for
	comparison purposes.	
Fiscal Year Average
1989
1990
1991
1992
1993
1994
1995
1996
Based on Date Started
219
312
183
229
266
276
254
284
Based on Date Completed
227
326
190
214
203
326
372
367
The close relationship in the earlier years may simply reflect that RD/RA negotiations
started in one fiscal year were being completed in the following year. If so, then Figure
1a suggests that something occurred to change this pattern beginning with negotiations
started in fiscal 1992 or completed in fiscal 1993.
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Medians Show Increase in 1995
The median (or middle value) helps show what happened to RD/RA negotiation
time frames because it is affected less by particularly long or short negotiations than
the average (or mean). Median number of days for each fiscal year showed only
modest changes until fiscal 1995 when the median for RD/RA negotiations started that
year increased 49 percent (80 days) over fiscal 1994. Similarly, the median for
negotiations completed that year increased 38 percent (71 days) over fiscal 1994 (from
188 to 259 days). Interestingly, the medians for both negotiations started and
completed are similar for fiscal 1990-1996. They show little variation from fiscal 1990-
1993, unlike the average based on completion dates which shows a dramatic decline
from fiscal 1990 to 1991. (Compare Figures 1 and 3.) This suggests that some of the
negotiations completed in fiscal 1990 may have been particularly long, raising the
average but not the median. The significant increase in the median for RD/RA
negotiations started or completed in fiscal 1995 and fiscal 1996 suggests, along with
higher averages, that negotiation time frames headed upwards in those years.
Figure 3
Median Length of RD/RA Negotiations
420
360
300
«240
Q 180
120
60
1990 1991 1992 1993 1994 1995 1996
Fiscal Year
Based on Date Started
Based on Date Completed
Fiscal Year Medians
1990
1991
1992
1993
1994
1995
1996
Based on Date Started
167
173
183
187
164
244
217
Based on Date Completed
184
170
178
181
188
259
244
Smaller Proportion Completed Within the Moratorium
The percentage of RD/RA negotiations completed within the 180-day moratorium
period has declined to under 40 percent in fiscal 1995-1996. Conversely, the
percentage of long negotiations, (those over 240 days), was higher in those years than
the preceding five years. OSRE believes that the 240 day mark is significant, because
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it takes into account the statutory 120-day moratorium, the two 30-day extensions
allowed by EPA guidance, and an estimated additional 60 days to prepare a UAO
(assuming that the need for a UAO would become clear only after a full 180 day
negotiation period). This pattern is consistent when analyzing the data based on
negotiation starting dates and completion dates (see Figures 4 and 5 and Appendix 3).
A greater percentage of negotiations started in fiscal 1995-1996 took longer than
previous years. Similarly, a greater percentage of negotiations completed in fiscal
1995-1996 took longer than previous years.
3
Figure 4
Percentage Breakout by Length—Based on Year Started
1996
re
CD
>-
re
o
(A
995
994
993
992
991
990
10 20 30 40 50 60 70 80 90 100
Percentage
0-180 Days
240-365 Days
2-3 Years
4-5 Years
180-240 Days
1-2 Years
3-4 Years
Over 5 Years
re
u
>-
re
o

Figure 5
Percentage Breakout by Length—Based on Year Completed
996 -t
995
994
993
992
991
990
10 20 30 40 50 60 70 80 90 100
Percentage
0-180 Days
240-365 Days
2-3 Years
4-5 Years
180-240 Days
1-2 Years
3-4 Years
Over 5 Years
3 For data underlying Figures 4 and 5, see Appendix 3.
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In fact, over 16 percent of negotiations completed in fiscal 1995 and 1996 took over 2
years. OSRE officials believe that the Superfund enforcement reforms may have been
a factor in bringing some of the older negotiations to closure by addressing issues of
concern to PRPs.
Policy Appears to Affect Time Frames
We found that policy changes appeared to affect average RD/RA negotiation
time frames. To better evaluate the effect of policy changes, we excluded the fiscal
year in which the Superfund reforms began (1993) and the year the "enforcement first"
emphasis began (1989). Then we calculated average durations for negotiations
completed before each change and compared them to averages for negotiations
started after the change.
The results show that negotiating time was lower after the "enforcement first"
emphasis was introduced and higher after reforms began. Specifically, the average
RD/RA negotiation time frame declined from 272 days for the three years preceding the
90-Day Study to a 227 day average for the three years after it was introduced-this
represents a 17 percent decrease (45 days). Conversely, the average for fiscal 1990-
1992 was 241 days, compared to 268 days for fiscal 1994-1996, the three years
following the introduction of reforms in 1993—this represents an 11 percent rise (27
days). (See Figures 6 and 7.)
Figure 6	Figure 7
Time Frames Before & After 90-Day Study	Time Frames Before & After Start of Superfund Reforms
~ FY 86-FY 88 ~ FY 90 - FY 92	~ FY 90 - FY 92 ~ FY 94 - FY 96
Although the effect of policy changes is apparent at the national level, the report
sections that follow point out that regional and site-specific factors come into play as
well.
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Regional Emphasis Mav Influence RD/RA Negotiation Time Frames
Different regional management approaches appear to have influenced RD/RA
negotiations at the two regional offices we visited. Region 3 and Region 5 together
account for about 1/3 of the 669 RD/RA negotiations completed nationally from fiscal
years 1990-1996. Region 3 completed 108 negotiations and Region 5 completed 120
negotiations during this period. Figures 8 through 11 show the two Regions' number of
negotiations and average time to complete the negotiations.
Figure 8
Region 3 Average Times
>.420
Figure 9
Region 3 Number of RD/RA Negotiations
1990 1991 1992 1993 1994 1995 1996
Fiscal Year
1990 1991
1992 1993 1994 1995 1996
Fiscal Year
Starts
Completions
Starts
Completions
Fiscal Year Averages
1990
1991
1992
1993
1994
1995
1996
Based on Date Started
198
152
335
445
472
416
302
Based on Date Completed
312
123
173
246
406
408
738
Fiscal Year
1990
1991
1992
1993
1994
1995
1996
# Started
10
24
25
17
9
8
8
# Completed
21
17
23
14
11
13
9
Figure 10
Region 5 RD/RA Negotiation Time Frames
780
720
660
600
540
480
>,420
^360
300
240
180
120
60
0
Figure 11
Region 5 Number of RD/RA Negotiations
1990 1991 1992 1993 1994 1995 1996
Fiscal Year
1990 1991 1992 1993 1994 1995 1996
Fiscal Year
Starts
Completions
Starts
Completions
Fiscal Year
Average
1990
1991
1992
1993
1994
1995
1996
Based on Date
Started
189
199
192
215
135
241
137
Based on Date
Completed
215
205
202
125
198
172
186
Fiscal Year
1990
1991
1992
1993
1994
1995
1996
# Started
16
31
20
21
13
11
4
# Completed
17
25
28
19
16
6
9
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Region 3 fiscal year averages were higher than the national averages in fiscal 1993-
1996, although they were lower for negotiations completed in fiscal 1990-1992. (See
Figures 1 and 8.) Region 5 RD/RA negotiations were generally shorter than the
national average. (See Figure 10.) Region 3 focuses on recovering past costs which
is achieved through settlements with potentially responsible parties (PRPs). They
emphasize a willingness to listen to PRP issues. In addition, we were informed that
Region 3 works with somewhat different judicial precedents than Region 5. Region 5
told us they place greater emphasis on negotiation deadlines in order to get cleanups
started. Region 3 informed us that they instituted a process during fiscal 1997
requiring written approval to extend negotiations beyond 180 days. If an extension is
not approved, then negotiations would be terminated.
Based on our discussions with Agency officials, we believe there are trade-offs
with each approach. Emphasizing settlements may lengthen the negotiations. We
believe that longer negotiations would delay the point at which cleanup actions begin.
However, analyzing duration through RD start was beyond the scope of this review and
officials pointed out that some PRPs begin work on the RD before negotiations are
completed. Even if negotiations take longer and the start of cleanup is delayed, the
PRPs may be more cooperative overall and the cleanup process may proceed more
smoothly and quickly once it begins.
On the other hand, focusing on negotiation time frames and issuing UAOs when
the moratorium period expires could result in early initiation of the cleanup process. If
applied consistently overtime, this approach might cause PRPs to settle more quickly if
they want to avoid UAOs. However, UAOs generally require the Region to follow up
with a separate cost recovery case. Settlements usually include cost recovery. OSRE
noted that guidance issued in March 1990 indicates an Agency preference for
settlements. Officials in both regional offices expressed a preference for settlements.
Case Specific Factors Affect Time Frames
Although management direction at the national and regional levels appear to
affect RD/RA negotiation average time frames, there are a number of case-specific
factors that can shorten or lengthen RD/RA negotiations. Some of these factors are
clearly not within EPA's control. Based on our interviews with regional officials, we
found that the sites with relatively short RD/RA negotiation time frames were not
necessarily the result of "best practices." Generally, these were sites where the
Agency was confident there was little or no chance of reaching a settlement and
proceeded to issue a UAO.
The sites with longer RD/RA negotiation time frames were affected by a number
of factors, many of which were case-specific and not controllable by the Agency. For
example, at one site the RD/RA negotiations took over 1000 days due to ongoing
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litigation in Federal district and appeals courts. At another site, PRPs could not reach
an agreement about their cost share, which accounted for more than two years of
negotiation time.
In addition to asking what caused delays at specific sites, we asked Agency
officials to provide factors they believe typically delay negotiations. They mentioned a
number of factors, including cost of the remedy, identifying additional PRPs, Natural
Resource Trustee issues and ongoing litigation. See Appendix 1 for specifics.
CONCLUSIONS
Many factors can affect how long individual RD/RA negotiations last. Some of
these factors may not be within EPA's control. However, the change in negotiation time
frames between fiscal 1990 and fiscal 1996 appears to reflect changes in management
direction and approach during that time period. An early emphasis on statutory and
policy time frames has competed more recently with the Superfund reforms' emphasis
on enforcement fairness. Consequently, time frames for this one piece of the
Superfund "pipeline" have lengthened. Longer RD/RA negotiating time could mean a
delay in getting cleanup activities started, depending on when the RD is started. On
the other hand, enforcement fairness might result in less contentious and quicker
cleanup and cost recovery.
MATTERS FOR CONSIDERATION
We have not included formal recommendations because this report is designed
to provide information as part of the OIG's Advisory Services. The Director, OSRE may
want to consider the following suggestions in addressing RD/RA negotiation time
frames: (1) exception reporting and tracking of RD/RA negotiations that exceed 240
days; (2) assuring there is a written policy that establishes a formal process for
extending the negotiations beyond 180 days and requires headquarters approval when
appropriate; (3) encouraging Regions to consider issuing unilateral orders with
effective dates deferred to the end of the new moratorium period when appropriate to
help ensure continued progress on long negotiations; and (4) continuing to emphasize
early RD starts to assure negotiation time frames do not impact the pace of cleanup.
OSRE provided us Agency comments during a teleconference and through an
edited version of the draft report. They agreed overall with the report, conclusions and
matters for consideration. They also suggested we change wording to clarify points,
correct a definition, and expand the matters for consideration to include emphasizing
early RD starts. We also received informal comments from an official in OSWER and
officials we met with in Regions 3 and 5. We adopted their suggestions in most cases.
We added more categories to Figures 4 and 5 to show the percentages of older
negotiations started and completed each fiscal year. We also added wording to reflect
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OSRE opinions that (1) the Superfund enforcement reforms may have helped in closing
out some of the older negotiations; and, (2) longer negotiations would not necessarily
delay the start of cleanup, depending on when the RD is started.
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Appendix 1
ADDITIONAL FACTORS AFFECTING RD/RA NEGOTIATION TIME
FRAMES
In addition to asking what caused delays at specific sites, we asked Agency
officials to provide factors they believe typically delay negotiations. The following table
lists the factors regional officials in both Regions 3 and 5 cited as causing delay in the
RD/RA negotiation process.
Factor
Explanation
Cost of the Remedy
PRPs faced with remedies that are relatively high
in cost will sometimes request additional time and
information before reaching an agreement.
Identification of Additional PRPs
Additional PRPs were discovered and brought in
to the process after negotiations had been
initiated.
Natural Resource Trustee (NRT)
Involvement
NRTs became involved late in the process; made
unrealistic cleanup demands.
De minimis settlements/
Number of PRPs
The more parties involved, the longer it takes to
negotiate.
Ongoing Litigation
Issues being litigated that affected the outcome of
negotiations.
PRP Experience
If a PRP has not had prior experience with
Superfund, then negotiations tend to take longer.
PRP Disagreed with the
Remedy
PRPs wanted changes to and/or different
remedies.
PRP Cost Allocation
PRPs inability to agree among themselves on the
division of costs.
State Issues/Involvement
Addition of another party to the process; inability
to pay cost share; late involvement; requests for
stricter cleanup standards than those proposed by
the Agency.
Viability of PRPs
The financial status of the PRPs and their ability to
fund a Superfund cleanup.
Weak Evidence (Litigation Risk)
Weak evidence increases litigation risk, which
weakens the Agency's negotiating position.
Other factors mentioned in a Region or by OSRE included:
PRP view of liability;
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Appendix 1
orphan share;
type of site (i.e., landfill);
cost recovery issues;
Congressional interest/politics;
litigious approach and personality of opposing counsel;
involvement of a Federal PRP;
initial use of a reform;
PRP delay tactics/corporate philosophy;
lack of incentive for parties to settle;
lack of continuity of participation (turnover of people involved);
local government involved;
community objections to the remedy;
remedy was reconsidered;
model CD;
no fund-lead dollars available for the site; and,
ability-to-pay determinations.
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Appendix 2
SCOPE AND METHODOLOGY
Scope
The scope of this analysis includes all RD/RA negotiations for National Priorities
List (NPL) sites completed by EPA, excluding state-lead sites and federal facilities. We
limited our work primarily to fiscal 1990-1996. We started with 1990 because the
Superfund program underwent a change in enforcement emphasis about that time,
starting with the 90-Day Study, "A Management Review of the Superfund Program."
That report called on the Agency to "emphasize enforcement to induce private party
cleanup." It stated that "EPA will use the fact and threat of enforcement, encompassing
a broad range of administrative and legal tools, to increase the proportion of cleanups
undertaken by private parties." Based on our past audit work and discussions with
OSRE, we decided to use 1990 as our starting point because of this increased
emphasis on "enforcement first." Our fieldwork was conducted from July 1997 to
January 1998.
Methodology
Our methodology included primarily (1) analysis of CERCLIS data; (2) reviews of
relevant law, regulations, policy and guidance; and, (3) interviews of Agency staff at
headquarters, Region 3, and Region 5. We also met with PRP representatives to get a
better appreciation of their view of the RD/RA negotiation process. Based on our
analysis of CERCLIS data and discussions with EPA staff, we decided to visit Region 3
and Region 5. They were among the top three Regions in numbers of negotiations and
they showed significantly different results in RD/RA negotiation times. In Region 3 and
Region 5, we discussed with attorneys and RPMs some specific negotiations that took
comparatively long and some that took a comparatively short time to identify whether
lessons learned could be generalized to be used as best practices to share throughout
the Agency. We also discussed the overall trends for each Region and the effect of the
Superfund reforms on the RD/RA negotiation process.
CERCLIS. We used CERCLIS report ENFR59, "Negotiations Master Report"
data in electronic form covering data through June 1997. We did not include fiscal year
1997 data in our analysis because the CERCLIS data for fiscal year 1997 was not
complete. In addition, we did not test CERCLIS data reliability and accuracy; however,
we did select a standard CERCLIS report for our analysis, which Agency officials told
us had better controls than an ad hoc report. In addition, OSRE officials informed us
that regional staff checked and corrected data as a result of our review.
Calculating Length of Negotiations. We calculated the number of calendar days
between the actual RD/RA negotiation start date and the actual RD/RA negotiation
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Appendix 2
completion date as indicated in the CERCLIS ENFR59 report. First, we calculated fiscal
year averages for: (1) negotiations started in fiscal 1990-1996 and (2) negotiations
completed in fiscal 1990-1996. Although these two methods include many of the same
negotiations, they produced very different results. (See Figure 1.) To assess the
impact of two major policy changes, we calculated how long negotiations took during
the years immediately preceding and following the change. (See Figures 6 and 7.) We
also analyzed the percentage of negotiations completed within the moratorium period
and beyond. (See Figures 4 and 5.) In addition, we calculated median values. (See
Figure 3.) For 12 negotiations started within our time period that were still ongoing
when we concluded our work, we assigned a temporary ending date of January 31,
1998. This allowed us to include these ongoing negotiations in our calculations based
on start dates. Without including them, we believed the averages calculated by starting
date would have been overly optimistic because they would have excluded the on-
going negotiations.
In addition, we tested the effect of outliers (negotiations under 10 days and over
1460 days or 4 years) on the overall trends. We found that, although the average
times varied somewhat, the overall trends remained the same. Therefore, we included
all negotiations in our calculations. Figures 12 and 13 below show the trend excluding
the outliers.
Figure 12
RD/RA Negotiation Time Frames - Excluding Outliers
420
360
300
o 180
120
60
1988 1989 1990 1991 1992 1993 1994 1995 1996
Fiscal Year
— Starts	—¦— Completions
Fiscal Year Average
1988
1989
1990
1991
1992
1993
1994
1995
1996
Based on Date Started
233
286
190
224
276
280
274
303
302
Based on Date Completed
254
219
338
212
232
221
290
371
343
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Appendix 2
Figure 13
Number of RD/RA Negotiations - Excluding Outliers
160
140
120
100
60
40
20
1988 1989 1990 1991 1992 1993 1994 1995 1996
Fiscal Year
•— # Started —¦— # Completed
Fiscal Year
1988
1989
1990
1991
1992
1993
1994
1995
1996
# Started
110
104
94
138
94
92
63
62
38
# Completed
90
105
113
120
109
77
84
62
51
Communication. As part of our methodology, we worked closely with OSRE
evaluation staff, discussing our approach and methodology to ensure what we did
made sense to them and met their needs for information about the RD/RA negotiation
process. This two-way communication allowed us to benefit from their suggestions on
how to analyze the issue. This was in accordance with OIG policy/guidance on
providing assistance to the Agency in improving program management.
Standards. This work was completed in accordance with generally accepted
government auditing standards except for the fourth field work standard on
management controls. We did not formally assess the validity and reliability of controls
over CERCLIS data.
Limitations. This report represents the opinion of the OIG and does not
necessarily represent the final EPA position. In this particular review, the OIG did not
measure the offices' performance against the standards established by the National
Contingency Plan (NCP). The results contained in this report are not binding in any
enforcement proceeding brought by EPA or the Department of Justice under section
107 of the Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA) to recover costs incurred not inconsistent with the NCP.
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Appendix 3
TABLES FOR FIGURES 4 AND 5
Percentage Breakout by Length-Based on Year Started
Fiscal Year in Which Negotiations Were Started
% That Took
1990
1991
1992
1993
1994
1995
1996
0-180 Days
53%
53
47
47
56
36
35
180-240 Days
21
22
15
20
15
14
21
240-365 Days
23
16
18
13
10
30
12
1 -2 Years
2
5
13
10
10
12
32
2-3 Years
0
2
4
8
7
5
0
3-4 Years
1
1
2
1
2
3
0
4-5 Years
0
0
1
1
0
0
0
Over 5 Years
0
1
0
0
0
0
0
Percentage Breakout by Length-Based on Year Completed
Fiscal Year in Which Negotiations Were Completed
% That Took
1990
1991
1992
1993
1994
1995
1996
0-180 Days
49
52
52
49
47
37
31
180-240 Days
9
25
16
21
20
12
19
240-365 Days
10
17
23
19
9
21
22
1 -2 Years
19
4
7
10
14
13
12
2-3 Years
8
2
1
0
6
12
10
3-4 Years
5
0
1
1
2
4
2
4-5 Years
0
0
0
0
1
0
2
Over 5 Years
0
0
0
0
1
1
2
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Appendix 4
DISTRIBUTION LIST
Inspector General (2410)
Assistant Administrator, OECA (2201 A)
Principal Deputy Assistant Administrator, OECA (2201 A)
Director, Regional Support Division, OSRE, OECA (2272 A)
Audit Follow-up Coordinator, OECA (2201 A)
Audit Follow-up Coordinator, OSWER (5101)
Agency Follow-up Official (2710), Attn: Director, Resource Management Division,
OARM
Agency Follow-up Coordinator (2724)
Comptroller (2731)
Director, Grants Administration Division (3903 F)
Associate Administrator for Congressional and Legislative Affairs (1301)
Associate Administrator for Communications, Education, and Public Affairs (1701)
Administrator, Region 3
Director, Hazardous Waste Management Division, Region 3
Audit Follow-up Coordinator, Region 3
Office of External Affairs, Region 3
Administrator, Region 5
Director, Superfund Division, Region 5
Audit Follow-up Coordinator, Region 5
Office of Public Affairs, Region 5
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