Review of the Costs Related to the Decontamination Contract for the Frankford Arsenal

GAO was asked to review certain aspects of the cost-plus-fixed-fee contract awarded by the Army for the decontamination of the Frankford Arsenal in Philadelphia. Under the terms of the contract, the awardee is to decontaminate those areas at the arsenal that are radiologically contaminated above applicable guidelines, to demolish structures in the 400 area, to clean up areas which contain explosive and heavy metal residues, and to remove platform number 329. To accomplish this, the program was divided into three phases. Under phase I, the contractor would review documentation provided by the Government which identified contaminated areas and perform some onsite work to obtain information to use in the decontamination and cleanup operations. Operating plans and standard operating procedures for the decontamination and cleanup operations would be prepared by the contractor in phase II, and the actual decontamination and cleanup operation would occur in phase III.

In making its review, GAO found that: (1) phase I and II are each 100 percent completed, and phase III was 70 percent completed; (2) the awardee is scheduled to complete its decontamination fieldwork at the arsenal by November 1980 and to submit a final report by February 1981; (3) the awardee estimates that all subcontracts will total $2.93 million, and about 43 percent of the total had been awarded; (4) 50 percent of the contract cost had been expended, and 87 percent of the contract reimbursable costs; (5) the awardee estimates that contract reimbursable costs will increase by almost $2 million because the quantity of radiologically contaminated material to be removed from the arsenal is approximately six times greater than it originally estimated; (6) the buildings in the 400 area are not being scraped and painted before they are demolished; and (7) the awardee estimated that termination costs, as of June 1980, were $524,000. GAO also found that the supporting data provided by the awardee and the Army were reasonable. However, GAO believes that a more reasonable monthly continuation cost is $152,000.