Analysis of Contractor Cleanup Spending

RCED-98-221: Published: Aug 4, 1998. Publicly Released: Sep 4, 1998.

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Peter F. Guerrero
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Pursuant to a congressional request, GAO: (1) updated the share of annual Superfund spending that went for contractor cleanup work to include fiscal year (FY) 1997; (2) determined the share of contractor spending for remedial actions that were managed by the Environmental Protection Agency (EPA), other federal agencies, and the states during FY 1996 and FY 1997; and (3) for the contractor spending for remedial actions that was managed by EPA or the Army Corps of Engineers, analyzed the share that contractors charged for the physical implementation of cleanup actions, as opposed to other contractor charges.

GAO noted that: (1) in FY 1997, about 46 percent of total Superfund spending went to the contractors who study, design, and implement cleanups, compared with 49 percent that was spent on these functions during FY 1996; (2) a corresponding 3-percent increase occurred in EPA's administrative and support costs for the program between FY 1996 and FY 1997; (3) EPA said that this increase can be attributed to normal outlay fluctuations; (4) the share of spending for other Superfund cost categories remained about the same between the 2 fiscal years; (5) contractor spending for remedial actions is managed by several different entities, including EPA, the Corps, the Department of the Interior, and about half of the states; (6) among these, the Corps manages the largest portion of this spending--accounting for 65 percent during FY 1996 through FY 1997; (7) the states collectively managed about 17 percent of such spending during the past 2 fiscal years; (8) EPA managed about 13 percent of such spending during this period; (9) the Department of the Interior also managed a small portion of such spending--accounting for 5 percent over the 2 fiscal years; (10) for the spending managed by EPA nationwide, about 71 percent of the costs charged by contractors for remedial action work during FY 1996 through FY 1997 was for the subcontractors who physically performed the cleanups, such as earthmoving and constructing treatment facilities; (11) the remaining 29 percent went to the prime contractors for professional work, such as construction management and engineering services, and the associated travel, overhead, and administrative costs and fees; (12) for the two projects where detailed information on contractor charges was available from the Corps, the share of spending for the physical implementation of cleanups was about 69 percent; and (13) because these two projects accounted for only 16 percent of contractor spending managed by the Corps during FY 1996 through FY 1997, GAO could not determine whether these results generally represent the Corps' contractor spending.

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