Hazardous Waste

Contractors Should Be Accountable for Environmental Performance Gao ID: RCED-90-23 October 30, 1989

Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) and the Department of Defense's (DOD): (1) payment of contractors' penalties and associated legal costs for noncompliance with the Resource Conservation and Recovery Act (RCRA); and (2) reductions of contractors' award fees when they failed to comply with environmental regulations.

GAO found that: (1) DOD generally held its contractors accountable for costs resulting from RCRA violations; (2) DOD limited its payment of contractors' fines and costs to cases where the contractors requested but did not receive compliance assistance from DOD; (3) DOE believed that it was responsible for shielding its contractors from virtually all financial risks and liabilities, and generally paid its contractors' costs associated with RCRA noncompliance; and (4) DOE did not pay contractors' costs in cases of criminal behavior by the contractor's top management. GAO also found that: (1) neither DOD nor DOE regulations or guidelines required consideration of contractors' environmental performance in award-fee determinations; (2) DOD and DOE both considered contractors' environmental performance to some extent in eight award-fee determinations GAO reviewed, with four of the determinations citing environmental performance as a distinct evaluation area; (3) DOD and DOE rated contractors' environmental performance as satisfactory or better in six of the eight determinations, although the contractors had been repeatedly cited for RCRA violations; and (4) contractors' entire award fees were withheld in the other two cases, primarily due to their poor environmental management.


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