Superfund

GAO has designated the Superfund--a $15 billion effort to clean up the nation's most hazardous waste sites--as one of 16 federal programs most vulnerable to waste, fraud, and abuse. The program is especially at risk because of its large size and its extensive use of cost-reimbursable contracts potentially worth almost $10 billion. Despite years of GAO's reporting on deficiencies in the Environmental Protection Agency's (EPA) Superfund contract management, EPA has not adequately addressed most of GAO's recommendations. Controls over contractor costs, such as critical reviews of contractor cost proposals and invoices, are still not being fully used. In addition, contractor program management costs are excessive because EPA hired more contractors than it needed and then moved slowly to cut the excess capacity. Superfund's exposure to indemnification losses is still unlimited because regulations to limit coverage have yet to be resolved. Moreover, Superfund remains vulnerable to contractor conflicts of interest because EPA contracting officials still need better guidance, and field checks of contractors' compliance with conflict-of-interest rules have not yet been done.

GAO found that EPA: (1) still does not require its regional offices to prepare cost estimates of cleanup studies and as a result the regions are too dependent on the contractors' own cost proposals; (2) does require Superfund managers to review contractor invoices for reasonableness, but contracting officials in two of the four regions examined estimated that project managers were conducting invoice reviews for only about half of their contracter's invoices; (3) has not corrected the problem of excessive contractor indemnification and is still not tracking the contractors' efforts to obtain private insurance; (4) established a four-person conflict-of-interest unit to develop agency policy and guidance, but most of the previously reported problems continued to exist; (5) is developing a plan to increase contract audits and has requested increased funding to reduce a backlog, but due to proposed staffing and budget cuts, increased coverage is doubtful; and (6) has acknowledged many of the problems GAO has reported, but has not addressed them sufficiently to actually correct the problems.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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