EPA Action Could Have Minimized Program Management Costs

RCED-93-136: Published: Jun 7, 1993. Publicly Released: Jun 15, 1993.

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Pursuant to congressional requests, GAO assessed: (1) the extent of and reasons for high Superfund program management costs and the Environmental Protection Agency's (EPA) initiatives to reduce these costs on current Alternative Remedial Contracting Strategy (ARCS) contracts; and (2) EPA plans to control program management costs on new Superfund clean-up contracts.

GAO found that: (1) ARCS program management costs have exceeded EPA projections; (2) although EPA was aware of high ARCS program management costs as early as October 1989, it did not initiate action to correct the problem until the beginning of fiscal year 1992; (3) in some regions, there is significant excess contract capacity that could ultimately cost the government millions of dollars in unnecessary program management costs; (4) EPA is developing new clean-up contracts, known as Response Action Contracts (RAC), that will supplement and eventually replace ARCS contracts as they expire; (5) EPA has prepared work-load forecasts to estimate contracting needs, ensure the continuity of clean-up work after ARCS contracts expire, and help control program management costs; (6) EPA is designing RAC with features to address key ARCS contract deficiencies; (7) detailed cost breakdowns and a new award fee process should make it easier for EPA to monitor and control program costs; (8) major policy initiatives, such as the Superfund Accelerated Cleanup Model (SACM), to help expedite cleanups and Superfund reauthorization may affect RAC contracting needs; and (9) the usefulness of RAC depends on EPA ability to respond to changing contracting needs and coordinate the development and implementation of SACM.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: EPA's Office of Emergency and Remedial Response (OERR) completed its review of ARCS contract capacity in December 1993. OERR decided not to terminate contracts at that time because the new indemnification policy and conflict of interest requirements carried uncertainties about the number of contractors who would be available to complete work.

    Recommendation: To minimize program management cost expenditures, the Administrator, EPA, should direct the Assistant Administrators for the Office of Solid Waste and Emergency Response and Administration and Resources Management to review the remaining capacity of each ARCS contract and, in those regions where there is excess capacity, perform a cost-benefit analysis to determine whether terminating some contracts would be more cost-effective than continuing to pay program management costs for the remaining life of underutilized contracts.

    Agency Affected: Environmental Protection Agency

  2. Status: Closed - Implemented

    Comments: The new Superfund acquisition manager and a group of senior resource management officials have been given responsibility for tracking and coordinating all Superfund contracting needs. They meet periodically to review any changes in regional contracting needs and to discuss the impact of any legislative and policy changes.

    Recommendation: To ensure adequate control over contract capacity and program management costs on RAC, the Administrator, EPA, should direct officials of the Office of the Assistant Administrator for Solid Waste and Emergency Response and the Office of the Assistant Administrator for Administration and Resources Management to coordinate the development of SACM, other policy initiatives, and major program changes that may occur during Superfund's reauthorization with the development of RAC, modifying the contracts as needed to avoid unnecessary cost to the government.

    Agency Affected: Environmental Protection Agency


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