Environmental Cleanup at DOD

This report examines the Defense Department's (DOD) policies and procedures governing the cleanup of environmental contamination at government-owned, contractor-operated plants. Earlier GAO reports have cited inconsistent policies and practices on cost sharing. GAO reviews nine higher-cost case studies at the Defense Logistics Agency and the military services (1) to assess the consistency of cost-sharing practices across DOD and (2) to compare the service cleanup estimates against DOD's. Specifically, GAO identifies the steps taken and the types of arrangements for sharing cleanup costs between the government and other responsible parties and examines site-specific cleanup cost data.

GAO noted that: (1) the services' policies and practices for having contractors share cleanup costs still vary widely; (2) notwithstanding GAO's recommendations to do so, DOD has not given the services adequate guidance for making decisions on whether and when to seek recovery of environmental cleanup costs incurred by DOD from contractors and other parties at GOCO facilities; (3) the Army authorized indemnifying its operating contractors from cleanup costs at ammunition plants; (4) the Navy policy requires cost-recovery efforts, but has not initiated timely requests for cost sharing or followed up; (5) the Air Force is beginning to seek participation in cleanup costs from its operating contractors; (6) regarding cleanup at GOCO facilities GAO visited, DOD's fiscal year (FY) 1994 report to Congress included cleanup costs that were closer to the military services' supporting data than DOD's reported FY 1993 estimates; (7) DOD's estimates for cleaning up the 78 GOCO facilities increased from $1.4 billion in FY 1993 to $3.6 billion in 1994, but decreased somewhat to $3.3 billion in 1995; (8) although DOD and the services have addressed GAO's recommendations to improve cost information, their estimates of past and projected costs still differ, and not all costs were included; (9) for example, the 1995 estimate decreased in part because DOD excluded $19.1 million in unfunded Navy cleanup requirements that should have been reported, and DLA cleanup costs totalling $101 million in FY 1994 that would be funded by customer surcharges; (10) GAO also found many additional expenses that were not included in either DOD or service cost estimates; (11) because Superfund holds parties liable for the billions of dollars needed to remediate past contamination regardless of wrongdoing, it is important that DLA and the services deal with potentially responsible parties on the basis of consistent policy and accurate data; (12) however, the lack of DOD guidance on cost sharing has permitted inconsistencies in approaches to cost-sharing, and the potential for some parties to be held responsible for cleanup costs, while others in similar situations are not; and (13) if cost-sharing agreements are reached, omissions in historical information and cost data may inhibit the recovery of all appropriate costs.

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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