EPA Action Could Have Minimized Program Management Costs

T-RCED-93-50: Published: Jun 10, 1993. Publicly Released: Jun 10, 1993.

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GAO discussed program management costs associated with the Environmental Protection Agency's (EPA) hazardous waste cleanup contracts under Superfund. GAO noted that: (1) lack of EPA action has contributed to excessive Alternative Remedial Contracting Strategy (ARCS) program management costs; (2) program management costs have been greater than anticipated, since the expected cleanup work load never materialized; (3) EPA built in excess contract capacity and awarded a large number of contracts to avoid future capacity shortages and allow for the termination of poor contract performance; (4) the anticipated cleanup work load for ARCS contractors never materialized because EPA did not consider policy changes in its original work-load estimates; (5) EPA did not initiate action to avoid additional contract costs or correct high ARCS program management costs until the beginning of fiscal year 1992; (6) of the $465 million in ARCS costs, nearly $161 million was for indirect costs that were subject to waste and overcharging; (7) EPA has strengthened its contractor oversight; (8) EPA has increased the ARCS work load by shifting work from other contracts; (9) nearly one of every five ARCS contracts charges program management costs in excess of 20 percent of the total contract costs; and (10) EPA is currently developing new cleanup contracts that will supplement and eventually replace ARCS contracts as their capacity is exhausted.

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