Environmental Cleanup: Unresolved Issues in Reimbursements to DOD Contractors

GAO discussed Department of Defense (DOD) reimbursements to contractors for environmental cleanup costs. GAO noted that: (1) the 15 largest DOD contractors' future environmental cleanup costs could total up to $2.1 billion; (2) DOD lacks sufficient contract cost information to adequately budget for future DOD contract costs; (3) defense contractors responsible for military production site cleanup can defer some of their cleanup costs to DOD; (4) DOD lacks specific policy guidance on the allowability of profits on contractor reimbursements and whether all cleanup costs should be considered as business expenses; and (5) DOD needs to develop adequate cleanup cost information to determine the allowability of cleanup costs.