Defense Environmental Response Task Force Official Record

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                 DEFENSE ENVIRONMENTAL RESPONSE TASK FORCE
                              OFFICIAL RECORD



                              Task Force Procedures

    1.   Task Force Charter
    2.   Public Law 101-510, Section 2923 --Establishing the
         Task Force

    3.   Operating Rules for Task Force Meetings

    4.   Federal Advisory Committee Act

    5.   List of Members (including bios)

                  Read-Ahead Material for June 19 Meeting

    1.   Proposed Task Force Issues (June 13, 1991)
)   2.   Defense Environmental Restoration Program-- Annual Report
         to Congress for Fiscal Year 1990

    3.   Summary of Environmental Response Action and Costs for the
         First Round of Base Closures

    4.   DoD Ammunition and Explosives Safety Standards


                       Material from June 19 Meeting
    1.   Agenda for June 19 Meeting

    2.   Transcript for June 19 Meeting

    3.   Presentation by Col. Hourcle --Overview of Base Closure and
         Realignment Process

    4.   Statement of Col. Jackson-- Overview of Environmental
         Response Process

    5.   Presentation by Mr. Cheney -- Litigation Strategies to
         Prevent the Expedited Transfer of Pease Air Force Base

    6.   Statement by Col. Walsh -- Case History: Interim Lease of
         Hangar 763, Norton Air Force Base

    7.   Statement of Mr. Torrisi-- Case History: Fort Meade
 \




8.   Statement of Representative Ray

9.   H.R. 2179 (Representative Ray's Bill)
10. Staff Analysis of H.R. 2179

            Read-Ahead Material for July 17-18 Meeting

1.   Task Force Study Issues
2.   Annotated Version of Task Force Issues (June 13, 1991)

3.   Robbins Air Force Base Inter-Agency Agreement
4.   Report to Congress on Liability, Bonding, and Indemnification
     Issues for Department of Defense Restoration Program and
     Hazardous Waste Contracts

5.   Information on Defense Environmental Restoration Account's
     ''Worst First" Cleanup Strategy

6.   Information on Formerly Used Defense Sites


                 Material from July 17-18 Meeting
1.   Agenda for July 17-18 Meeting

2.   Transcript for July 17-18 Meeting
3.   Statement of Mr. MacKinnon (Office of Economic Adjustment)
     Economic Development and Environmental Requirements
4.   President's Economic Adjustment Committee Booklet --
     "Resolution of a Community Land Dispute"

5.   Presentation by Ms. Jones (Environmental Protection Agency)--
     on Resource Conservation and Recovery Act (RCRA) Delegation

6.   Presentation by Mr. Oh and Mr. Ciucci (Logistics Management
     Institute) -- Contracting Improvements

7.   Statement of Mr. Gelde (Public Witness)
8.   Presentation by Mayor Rubach of Mesa, Arizona --Resolution
     of Conference of Mayors on Environmental Mitigation at Clos-
     ing Military Facilities

9.   Statement of Mr. Strock (Task Force Member, Representative of
     the National Governors Association)

10. EPA Federal Register Notice of Policy Statement for the
    National Priorities List
. -.-



                        Information Requests by Task Force
        1.   General Services Administration Briefing-- Federal Property
             Acts

        2.   State of California Briefing -- Joint Services Regional
             Environmental Office

        3.   Army Response to Environmental Response Action Issue

        4.   Navy Response to Environmental Response Action Issue
        5.   Air Force Response to Environmental Response Action Issue


                             Task Force Correspondence
        1.   Nomination Letters for Task Force Members

        2.   Letter from Hazardous Waste Action Coalition (HWAC) to
             Task Force

        3.   Letter from Mr. Greer Tidwell, EPA Region IV Administrator,
             to Task Force

        4.   Letter from Pacific Studies Center to Task Force
        5.   Representative Dingell's Letter to EPA




\
   CHARTER OF THE DEFENSE ENVIRONMENTAL RESPONSE TASK FORCE

Defense Enyiromnental Response Task Fon:e

       In accordance with the provisions of the National Defense Authorization Act for Fiscal
Year 1991, Section 2923, a Defense Environmental Response Task Force is hereby ordered as
follows:

       I.     &tablishment

              There is established the Defense Environmental Response Task Force. The Task
       Force shall be composed of the following (or their designees):

              A.     The Secretary of Defense, who shall be chairman of the Task Force

              B.     The Attorney General

              C.     The Administrator of the General Services Administration

              D.     The Administrator of the Environmental Protection Agency

              E.     The Chief of Engineers, Department of the Army

               F.    A representative of a State environmental protection agency, appointed by
                     the head of the National Governors Association

               G.    A representative of a State attorney general's office, appointed by the head
                     of the National Association of Attorney Generals

               H.     A representative of a public-interest environmental organization, appointed
                      by the Speaker of the House of Representatives.

        n.     Functions

               The Task Force shall study and provide a report to the secretary of Defense for
        transmittal to the Congress on the findings and recommendations concerning
        environmental restoration at military installations closed or realigned under Title ll of
        Public Law 100.526, as authorized under Section 204(a)(3) of that title. The primaiy
        objectives of the Task Force shall be to:

               1.     Determine ways to improve interagency coordination, within existing
                      laws, regulatitXU, and administra.tive policies, of environmental resporue
                      actions at military installations (or portions of installations) that are being
                      closed, or are ~uled to be closed, punuantto Title n of the Defense
                    Authorization Amendments and Base Closure and Realignment Act (Public
                    Law 100-526); and

             2.     Determine ways to consolidate and streamline, within existing laws and
                    n:gulations, the practices, policies, and administrative procedures of
                    relevant Federal and State agencies with respect to such environmental
                    response actions so as to enable those actions to be carried out more
                    expeditiously.

            1be Task Force may also make recommendations regarding changes to existing
     laws, regulations and administrative policies.

     III.    Administration

             All Task Force members may be allowed travel expenses, including per diem in
      lieu of subsistence, as authorized by law for persons serving intermittently in the
      government service (5 United States Codes (U.S.C.) 5701-5707), to the full extent funds
      are available. 'The expenses of the Task Force are estimated to be $500,000 and shall
      be paid from such funds as may be available to the Secretary of Defense. Man-year
      requirements are estimated to be three. The proponent official is the Assistant Secretary
      of Defense (Production and Logistics) who will provide administrative support through
      the Office of the Deputy Assistant Secretary of Defense (Environment).

              'The Task Force shall be in place as soon as possible and meet as often as
      necessary (estimate is four meetings). The Task Force's final report shall include
      findings and recommendations concerning the environmental response actions at military
      installations closed or realigned under Title n of Public Law 100-526, as authorized
      under Section 204(a)(3). The Task Force should complete its work by October 5, 1991,
      and will terminate on November 5,1991.




17 April 1991
       SECTION 2923 OF THE NATIONAL DEFENSE AVIHORJZATION ACI'
                              FOR. FISCAL YEAR 1991
         Soun:e of Funds for Environmental Restoration at Closin& Installations

        (a) Authorization or Appropriations-There is hereby authorized to be appropriated to
the Department of Defense Base Closure Account for fiscal year 1991, in addition tO any other
funds authorized to be appropriated to that account for that fiscal year, the sum of $100,000,000.
Amounts appropriated to that account pursuant to the preceding sentence shall be available only
for activities for the purpose of environmental restoration at military insta!Jations closed or
realigned under title II of Public Law 100-526, as authorized under section 204(a)(3) of that title.

       (b) Exclusive Source or Fundiog-(1) Section 2fY7 of Public Law 100-526 is amended
by adding at the end the following:

        "(b) Base Closure Account to be Exclusive Source of Funds for Environmental
       Restoration Projects-No funds appropriated to the Department of Defense may be used
       for purposes described in Section 204(a)(3) except funds that have been authorized for
       and appropriated to the Account. The prohibition in the preceding sentence expires upon
       the termination of the authority of the Secretary to carry out a closure or realignment
       under this title. •

       (2) The amendment made by paragraph (1) does not apply with respect to the availability
       of funds appropriated before the date of the enactment of this Act.

       (c) Task Force Report-(1) Not later than 12 months after the date of the enactment of
this Act, the Secretary of Defense shall submit to Congress a report containing the findings and
recommendations of the task force established under paragraph (2) concerning:

               (A) ways to improve interagency coordination, within existing laws, regulations,
               and administrative policies, of environmental response actions at military
               installations (or portions of installations) that are being closed, or are scheduled
               to be closed, pursuant to title II of the Defense Authorization Amendments and
               Base Closure and Realignment Act (Public Law 100-526); and

               (B) ways to consolidate and streamline, within existing laws and regulations, the
               practices, policies, and administrative procedures of relevant Federal and State
               agencies with respect to such environmental response actions so as to enable those
               actioos to be carried out more expeditiously.                                    ,

        (2) There is hereby established an environmental response task force to make the findings
and recommendations, and to prepare the report, required by paragraph (1). The task force shall
consist of the following for their designees:
•'
     (A) The Secrelary of Defense, who sball be chairman of the task fon:c.
     (B) The Attorney General.
     (C) The Administrator of the General SeMces Administration.
     (D) The Administrator of the Environmental Protection Agency.
     (E) The Chief of Engineers, Department of the Army.
     (F) A representative of a State environmental protection agency, appointed by the
     bead of the National Governors Association.
     (G) A representative of a State attorney general's office, appointed by the head
     of the National Association of Attorney Generals.
     (H) A representative of a public-interest environmental organiV!tion, appointed
     by the Speaker of the House of Representatives.
                 PROCEDURAL RULES OF THE DEFENSE
                ENVIRONMENTAL RESPONSE TASK FORCE



Rule 1: The Defense Environmental Response Task Force was char-
tered as a Federal Advisory Committee under Public Law 92-463 and
shall comply with this Act.

Rule 2:   The Task Force's meeting will be open to the public.

Rule 3: The Task Force will meet at the call of the Chairman or
at the request of a majority of members of the Task Force.
Rule 4: ~The Chai~man will designate a member to preside in his
absence.

Rule 5: The Chairman (or another Member of the Task Force pre-
siding in the Chairman's absence) shall have the authority to
ensure the orderly conduct of the Task Force's business.  This
power includes, but is not limited to, recognizing members of the
Task Force and members of the public to speak, imposing reason-
able limitations on the length of time a speaker may hold the
floor, determining the order in which Members of the Task force
may question witnesses, conducting votes of members of the Task
Force, and designating Task Force members for the conduct of
public hearings.

Rule 6: A member of the Task Force may designate in writing
another member to vote and otherwise act for the first member
when he or she will be absent, or vote through his or her desig-
nated Alternate.
Rule 7: A simple majority of members shall be necessary to
approve the report of the Task Force.

Rule 8: These Rules may be amended by the majority vote of the
members of the Task Force serving at that time.
•                         Federal Advisory Committee Act
        Public Law 9Z-44J
    9Zad Concreu, H. R. 4JU
         October 6, 197 Z


                                     •• nn noo




           iWIODUDil




                   A3
.,    ·..
     Federal Actvtsory Committee Act-continued




                    u ni"P     111    Pub. Law 9Z-463                    • Z •             October 6, 197Z
                                              (I) Tho term ·~· hu U.. -                ,_..;q u iA _...
                                           .\51(1) of titlo 5, United Stat. Coda.
                                              (.) Tho lanD • PraoidODl.i&l ..t......., OOIIIJDiueo• - ...
                                           ad'Fia>ry ODIDIDiU. whieh ad.;.. U.. p,.;doat..
                                                                    An\J~

                                        S.:. 4. (a) _Tho pron.toa. of thia Act or of aay rui., ardoor, or NC'I·
                                      latioa promaJ.cal*l UDder thia Act ohaiJ ~-=adriaxy COlli·
                                      miu. ucept lo the ..neat that aay Act o                eotablilhiDc aay
                                      oach adn.ory ..,..,...;u.. opeci5eally ptot idao     ·
                   "-'rt ...ll'lll.      (b) NothiJi& iD thia Act ohall ba coaan.d 1o apply to uy ad.-.,.
                                      """'-'DiU. lllt&blilbed or atil.imd by-
                                             (1) the C..tniiDt.ellipDCO Acu>c7; or
                                             (t) the Federal R.o"'      s,.-_.
                                         (c) Nothi.Dc iA thia Act lha.ll ba CDIIItn>ed to apply to aay local ciric
                                      lfOIIP who. primuy faDcQoa il that of I1IDCI.erill( a j>abl>c llnioo with
                                       n.pect lo a Federal procn-m, or aay State or local """'-'DiU.... eoaDcil,
                                      board, coauniloion, or oimilar groap est&bliabecl lo adYia or make
                                       """""""eadationo lo State or local oollic:i&lo or ~
                                                 IZDO~              OP OOl"aa.noWU. COIII:kllim

                   "-nn.                 SIC. 5. (a) ID U.. uercia of ita l&lriolati'n rniew fm>cticm, ead>
                                      ot&Dding commiU. of the Senate &nO the Hoaoe of Rep..-tati.,..
                                      lhall mab a CODtinain« rn-iew of the adiTiti• of ead> ad"'-'" COlli·
                                      miu. aader ita jan.dictioa to det.ermme wbetbor oach acfn-,
                                      committee oboald be abolilhed or merged with aay other ad'Fia>ry
                                      commiu..., 'ffbeth.r the ~biliti• of oach adTiaory commiu.
                                      lhoald be re-n-1., aad whether rn~h ..tn-,- commiU. port...,.. a
                                      11-.y faDCtioa llOt ahady being pet fotmed. Each ..a tlt&tldiD«
                                      committee lhaJJ tab appropriate acbon to obtain the enactnwnt o1
                                      legiolation 11~ to earry oat the P"'"P.C-. of thia .,b-csiotL
                                         (b) lD conoidenng legj.lation eot&blisbing, or aathoriziag the
                                      Mt&bliab.meat of &DJ o.d-riaory committee, eech •:r;r~;::- of
                                      the Senate aDd of the Hoaa of Rep.--ntatino lhaJJ                 ·    I.Dd ·
                                      r'Oport ouch det.erminatiOD to the Sonate or to the H - of BeprMODte-
                                      tino, u the aa may be, wbother the hmd:iono of the propoeed
                                      adn..ry commiU. t.n1 being or cooJd be performed 1>7 ODe or more
                                      acaci• or by aa ad-riaory committee ahady iA ..,......., or by
                                      ealargiag the tD&Ddate of &D orioting ad-riaory commiU.... hy oach
                                      legillation lhall-
                                              (1) CODt&in & clearly defined pmp<a for the adn..ry
                                           committee;                                   '
                                              (2) ""!uire the membenhip of the ..t-riaory comm.iu. 1o be
                                           fairly balanced in terma of the pointa of new rep.-nted aDd the
                                           func:tiono to be performed by the ad.....,. """'-'DiU.;
                                              ( 3) 0011t&in appropriate prori.oi01111 to a.an that the adnea
                                           aad recotnmtmdati01111 of the ad-riaory oommitt. 'frill 110t ba inap-
                                           propriately ialluenood by .!:'.,jpointing aathority or by any
                                           lpOCi&l iDteroot, but will ·          be U.. .-It of U.. adTiaory
                                           ClllllltliU.'I independent jndgment;
                                              ( 4) caatein Jlrori.oiona deallDc with &Dthorizatiaa of app-
                                           priatiCIIII, the date for 1111:miamOD of l"'pprta ~!!,:;!, the dun.-
                                           tion of the ad-riaory committee, aad the pub · ·          of reporta
                                           and other materi&.la, to the ut.ont that the C•nding ClllllltliU.
                                           determineo the proTllliono of -=boll 10 of thia A..ct to be in..te-
                                           q~WA~; aad




                                                                  A4
                                                      Federal Advisory CommlttH Act-<ontlnued




October 6, 197Z                    • 3 •            Pub. Law 9Z-443
                                                                                 •• nu. 1n




                                                                                 Rape .. ~·
                                                                                 CQDCnN,




  S.c. 7. (a) Tba Dinaor lhall eot&blillh aDd maint&in withiD the c-s.n. ,_,.
Olllce of ~t &Del llucigot a Committeo M~t ~­                                    ...-.-s ..,....
tari&l.. whioh aliall b. rwpoaaible for all matt.en mating co ad"-':r \&ria,.
nommiua-.                                                                        El't&bU~.
    (b) Tba Direetor ahall, immedia&ely afl.er the 01>-ZDe!l• of thia llnln•
.\ci. inaitute a oomprebez>oift rrriew of the acti.Uieo aDd •wpoaai·
hili&ieo of each ad ..Wry oommitteo co det.ermi>-
        ( 1 ) wbo&her llloh a>mmiu.ee ia carr"JiD« oat ita purpc.o;
        (~) •bother, ocm-ic•nc with the pron.i0110 of applicable
      otatata, the n.ponoihilitieo &lllicned CO it "'-ld b. "'"'-~;
        (3) wbother It aboalcl ba JDeried with other ad..;.,.y oommit.
     ~;or
     ( 4) wbetbu ia at-lei ba aboliobecl
Tba Di""""'" may from tima co tima l'"ll(jlMK &O>oh iDformatlool u b.
d - n.._ry to c:&ITT oat bia fw>c:bODIIIDder thia lllt.etioL UJlOII
the com~Jetioa of the Dl.-or'o reri<• b. ah&Jnnue reoonurenclu•ona
to the     Midomt and to either the   .,..,CJ'  bead or the  eo...,.
1-.pect co &dloa be belie- obo.Ud ba ta.lt.L "Thereafter. the Di..-or
oball carrr oat a oimilar ~new ..... aally. Ap>cy head. ahall cnopen.ta
                                                                          with

...;th the Dii'"OfUJr in mak:in.tt th• revi•wo roqui...-.l hy this lnl'-:bOil.
                                                                                  ..._
                                                                                  ooope n.tt oa.




                                            AS
Federal AclvlaOry Committee Act--(;()ntlnued




                                        Pub. l..&w 'IZ-463                • 4 •             October 6, 1972
               •• '"'· ns
                                          {e) 'Tho Dirocs.or aiWl p..-ribo admjniMrati•e ,W.Uii.u• &Del._,.
                                        ·~ CODtl'Ob ayplieoblo .c.o od•~ committ-,              &Del., &o .Ill.-..;.
                                                                            ••••noo, &DCI. .,...a- &o
                                        mlllll """""' fouihl&, proncla adnca,
                                        ad"-1 commiu.- c.o UDpron !heir perfol"'ll&noo. LD ~oat b.io
                                        tvnctiOftl wulu l.bis out.oction, Ill. Dinctor lball ....,..doli U.O. _ . .
                                        """'dati""' of .W. o.cencY bead wi~ IWpocl &o ......., of imprcrriac
                                        Ill. pwto..,..... of adri8ory commi- wb- dutiel an rolalilll &o
                                        >Nebarocz:
                                           (d)l (1) Tbe Diroctor, otter otady &DCI. .......Ut&tiao. trith Ill. Qril
                                        Samoa Commiaion, lball est&blitb pideliDeo wi~ l'lllpocl &o ...,;.,_
                                        fair rora of pay for oompa.rablo   ...nc.     of -~ ltda, &DCI. ,_.
                                        :oultanta of adri8ory commi~UM in o ,........ wb.ieb I ' - oppropn.&.
                                        recopition &o ~ reopouibiliU.. &DCI. ualilletl:iOftl noquirocl i.DcfotW
                                        raJ......, factors. Sac.h renl&tiODI:3     prDYicla thM-
                                                 {A) DO member ol &11J adriaory oommiueo or of Ill. .U. of aay
                                              ad..;..ry eommiueo lball recein oompenation ot a rota iD -
                                              of Ule rota 'P""ifiecl for 65-18 of ~ GelloraJ Schedale udlr
                                              Mctioo M32 of title~. t'nitecl St&tol Cock; ADd
               Trswl      •1;1«111••·            (B) IUCh memben, while engapd in ~ performonoo of tblir
                                              duU.. away from U>eir bomeo or rqular pl""* of buC-m, 11107
                                              bo alloud traft! u~ iDcluciina par diem in lieu of .,.,...
               10 Ste.t. ' " '                t.oDol, u ou~risecl by oectioo ~701 o1 title 6, United Stot.a Coda,
               IJ   sta,. ao.                 fur pon<ma employed intennir:t.e.utly in ~ Gonl"'llDeelt ~
                                            (2) Nothing in l.bis ..beoetion oball pnonnt-
                                                 (A) on indindual wbo (wi~ou' reavd &o b..ia ounoo with a11
                                              ad..;..ry eommiueo) ia a full-time employee of Ill. tTnitecl Stataa,
                                              or
                                                 (B) on indiYidual wbo immedi&t&ly bofuno b..ia ounoo with &11
                                              ad..;..ry oommiueo wu 1111eb on employee, .
                                         from receinng compensation at~ rota "' wbieb be otherooUo .....Ud
                                        bo oompen••od (or 'II"U eompenated) u a full-time employee of~
               ~·          ,. ...
               . . adl.1:1 0111.
                                         T"nitecl Stat&
                                            (e) The Director shall indude in bu~ recomrnend&tiono a 1111111·
                                        mary of the omounta be· deems n...-ry "lor the u~ of ad..;.,ry
                                        oommitteeo, including the upou.. for publieotion of re~rta whouo
                                        appropnato.

                                           S.:. 8. (a) Each ag.ney head lball eot&bli.ob unifonn adminicr&tin
                                        I(Ulclalin• ADd "'~' eon~la for adri8ory oommiueo. lllltab-
                                        fllhecl by ~t agucy, wbieb sball be eonm.tent wtU. clireeti- of~
                                        Dif'fiCtOr under -=t.ion 1 and 31!1d:ion 10. Each agency shall majnr•in
                                        ~c information on ~ nature, functions, r.nd opera&iam of
                                        ,..eb odri8ory oommiueo .,.;~ i'- jurisdiction.
               .1.4n.ao 17 c--              (b) The bead of each agmcy wbieh bu aD &dYiaory eommitt-oball
               al-n.•     ~­            dNijln&te an J..dri8ory Committee .loh.nagement Ol6cer wbo lbaU--
               ••DC Coa\rol                      (1) uerciae eon~! and 1111pe...n.ion onr ~ ..cabli.b!!W!'-
               otn••r•       delltc-          pi'OOI'<!w.. ond oeeompliahmeota of adYiaor:v tcaUDiU.. lllltab-
               ra~toa..
                                             liabed by~ o.gmey;
                                                (2) .....,ble aDd main~~ noporta, recorda, and otl>er ptpan
                                             nf any 1111eb comm.iueo during iu uut.enoe; and
                                                (3) carry out. on behalf of that ag.ney, the proriaiolla of_,.
               n sta•. so.                   tion ~~~ of title 5. United Stota <'Ada. • i~ r-.pect &o md>
                                             raporta, ro<nrds. ~ ntb«r pa pen.


                                          Sl'lC. 9. (a) No adn.orr eommitt.ee ahall be eotabliabed unM. meb
                                        ""'a bl iabmonl ;.._      ·
                                                 !l) sr-ifiralh authorized by outut• nr hy th. P..-.sirlent: or




                                                                   AS
                             Fede111l Advlaory Committee Act-continued




October 6, 1972   •s•        P,b. Law 9Z-46l   . ,.,.
                                                  ,.,.
                                               __,_Ia
                                               ,..~~          .....



                                               COB\IIIU•




                                               -...
                                               l\abl1eaua. 1A
                                               hdo~

                                               ,.... JetS-·
                                                           ..._     ••




                                                11   s ...... "'·




                                                -·
                        A7
Fe<Seral Advisory Committee Act-<:entlnued




                               Pub. Law 9Z-41>J                  • b •             October 1>, 197Z
               ~··~~~·~'~·~,~~~--~-------
               (4,.,rt..
                       u-      ad • ....,. men mitt. n.. oc<:tU'ICY of all miAut.oo ab&ll br ce.rWI.! to
                                     by the chairm&.~~ of !he od f'ilor7 oommiu.o.
                                        (d) s..   terti""" (a) (1) U>Ci_(a) (3)_ of thia _ . . , ohtll-
                                     to uy o4 noory ClOii!JDIUeo a: <'" 1 which t.he    Pr.i'*"'   or !he
                                                                                                          ..:t'of
                                     the .......,y to which the odnoory oomm.itta r.poru, &comi-;.
                                     ............t with maaan li&od iA _..... 6ai(b) of title a, Ullited &&tao
                                     Cod&. Al>y -.b d~ ahall ... iA
                                     !he rtiUOGI for lllch ~ U -.b a~ il ~
                                                                                     ...nw..c  IUid ohall cra&aill
                                     t.he odrimry Ollalllliu.. lhall ;... o. nport at!.& uuuaally ~
                                     forth a IWIIIII&I'1 of ito aeeiriti• o.zullllch ralo.ted maaan • WOIIld be
                                     i.nfonD&tin to the public ..,.;cent with t.he pollq of_.._ a&(b)
                                     .,f title 5, Uaited Stu. Coda
               Ped.l~l   •tn••r
               er •Pl.,..,,
                                         (o) Then lhall bo d•ipated u c4cer or omploy• of !he FedNal
                                     0oftnuDellt to chair or attend oaeh ,.,.,i ... of oioch odYioory ...,mjt.
               .n.,..,...            r-. The o&oor or emplo_yeo oo rleoi.pated 11 outho<Ued, rb11 •• be
                                     drtanDilleo it to bo in !he publie iDt..._ to o.djoano uy-.b m rinc.
                                      ~o adrioory committeulwl conduct uy m.,.inc in !he ~of that
                                     ol&eer or employee.
                                        (f) .\d>iaory eommitt ... aho.ll not hold LDJ meeti,. ucept at t.he
                                     eall of, or with the odY'Uie& appronl of, a dlllipted cillicor or
                                     employee of the Fedora! Gofti'IUDellt, ud iD t.he cuo of odti8ory eom·
                                     rn.iu- (other tho.n Preeidentio.J od>Uory eocum.itt-), -rith u acu>da
                                     appro•ed by oueh oGicer or employ-.

                                                           •Y•" ••n ITT or    TI.I..HICUrft

                                       :Soc. 11. (a) EJ:eept wbere prohibited b1 OO<ltro.c:tuo.l ocr-z>ta
                                     •nterecl into prior to !he e!ec:tiYO date of thia Ac:t, ....,0.0 LDd o.d>i-
                                     .ory committe. ohall mako anilable to uy po.rwan,_at octaa1 ooort of
                                     duplication, eopi• of truoeript. of agency p~ or o.d>Uory
                                     r.ornmittee rneecjft~
               "lp'f'll7 pN-            (b) M uoed in       -non "orney P""""'"''"r" !MUll any proeeed·
               011411\C•"            ing u defined in rreetion ~51 (12) of title 5, Ullitecl Stu. Cock
               10 S'-\• ll2.


                                       Soc. 1:1. (a) Eo.eh ageney lhall keep reeordo u will full[ dioelooe the
                                     di.poeition of uy fundo whieh may De at tbe .u.po-1 o ito o.d...;.,ry
                                     committee~ and the nablre uwl eztent of their octiTitieo.       n..
                                                                                                      ~
                                     Serriceo Admin.Uuation, or ouc;h other oge11ey u !he P,....;~t may
                                     d~ote, ohall mamtam finanetal recordo with .-..poet to Pnorrid011tial
                                     ad.,.,ry eolllllli-. The Comptroller OeneroJ of tbe Urlit8d Stat., or
                                     uy of lWr autbon-1 rep,_tati._, ahall baft - , for tbe pur-
                                     pooe of audit ud eumination, to u7. lllldl recorda.
                ..__ ""P-               (b) Eaeh "1011C7 ohall bo reopoaaible for p...mdillg oupport       oemc.
                      ••r"'''1•••·   for MCb ad>iaory committee eotabliabecl by or~ to it ani- t.he
                po"
                                     Olltab~ing authority prn>ideo ~- Where 1o11y oueh
                                     oommJttee reporto to more thu ..,. ag-ooey, llllly ODe oc-y ahall bo
                                                                                                           ad..-.,.
                                     reoponoible for oupport oe...no.. at LDY ooe time. In tbe eaa of Pn.i·
                                     dentia.l od>iaory commi"-, oueh •rriceo may bo p.-ided by tbe
                                      r,.,.raJ SerTiceo AdminiJcntioll.

                                         Soc. 11. Subjee& to rreetiOD 5n of title &, United Sto.too Code, t.he
                                      Direc:tDr ohall protide for the 61inc with the Library of Oool,._ of at
                                      '-eight cop- of eo.eh report made by • .....,. ..t.;.,ry O<lllllllittee 1o11d,
                                      ..-ben oppropriat6, bo.eqrouDd papen p...p..reci by --!tontw The
                                      Librarian of Congro.o oh.I.U co.bl illh a depo.itory fOr oueh reporta and
                                      pepero ..-hero they shall b. a•ailabJ.. to publie inopertion and uoo.




                                                                AS
                                                        Federal Advisory Committee             Aet~ontlnued




October 6, 197l                      - 7 -              Pub.       uw   92-463
                                                                                 . "''· ,.,.
  :).:. it. (a) (1) Each achilory oomm.ia. wbich io iA uil&azlt:. OD U..
ofecLln cia&. of th.ia Act oh&lltarmiD&t.IIO( Ia tar tlwa tho aq~ir&tica of
the t.,....yoar period folloWUii ouch ofoctin cia&. nnlm
         (.A) iA U.. cuo of ..., odri.ory oamm.i""' ••b!i•bad bf U..
      p,.;cf&t or loll ol&cu of tho Federal Oonn>me~>t., IDch od~
      oomm.ia. ia 1'11!111-..1 by tho p,.;doot or !.hat ollloor by appropn·
      au ac&icm prior to tho aq~ir.tioD of ouch ,..,._,_,. period; or
         {8) Ul ~.boo CUO of loll od>iJoory COINDiuoo .W.lilhod by loll Act
      of Coacz- ita dur&l.i.OD ia othenria prcmdod few by law.
  (i) Each od>iloory commi""' eoto.bliahed o.ftar lllch elective do.la
<ho.ll &ennin&ta Do& later tlw1 the u:piration of the two-year period
bocW>ing OD the date of ite oot&b!Ulunent IIDI--
         (A.) iA U.. cuo of..., ed~ oamm.ituo eotebliahed by the
      p,.;dmt or ..., ol&oer of the Federal Gonrnment ouch ed>iloory
      commituo ia 1'11111111Jd by the Pnsident or IUch nliou by app,....
      pria&e action prior to the end of IUch period; or
         (B) iA the cue of ..., od'l'i3ory committee oot.abliahed by ..., .Act
      uf Con~ ita duration i• oc.herwia pro'lided for bylaw.
    (b) (1) Upon the renewal of o.ny od'l'i3ory COII1IJlittee, ouch od>iloory
.-ommiu. lho.ll 6.Je a charter iA accordo.noo with IOCtion t (e).
    (2) .Any od'liaory Ol>"'mitt..eoot&bliahed by loll .Act of Co~ oh&ll
lilo a eharter iA accorda'l"' with such oection u POD th.. up1ntioD of
each suecdli.-e two-year period following the date of ena.c:tment of
r.he Aet establiabing 111ch ad ..U.ry committee.
    (!) ~o odri.ory OOI!IItlittee required UDder thia 111be:tion to 6.Je a
cllarter llhall tab My action (other than preparation Md filing of
.,,ch eharter) prior to the dau on which 111Ch eharter ia filed.
    (e) Any adri.ory committee wbich io renewed by the Prooidoot or
any olioor of the Federal Go .. rnment may be continued only for IUe·
caoin two-year periods by appropnate aetion taken by the Prooident
nr such o!icer prior to the date on whiclt srtrh fl-chisory mmm1ttee
"''mid otherwiae terminatf!.
                                DiZCth& D.&.TE

   SEC. 1~. Exoopt u pro'lidod iA aection 7(b), thil Aet aball beeome
etrective upon the ezpiration of niDety daye folio~ thn date nf
"n.nment..
   Approved ..October 6, 1972.




LlG!SLlTTV'I KI:STOR'I':

tOJSt JttPORTS• Jlo. 92-1017 (c~. on Ccrnna•m Op.r..1to,.) &DIS
                •• 92-1403 (c-. or Coate,..nae}.
stMn EP"JRT 11o. 92·1091 ... ~nc s. :1529 {c-. 011
                 ecrn,..at Opera,toa.}.
C011211SSI01U.L R~:Cmm, Yol. 118 (1972)1
     ....,. 9 1 e0111ldii.....S a.Dd pa.uM fob\ue.,
     !eP'• 1.2 1 eON1CS."d -.rat p&e8ed S•rat..e,     ••nd•4   1
                  1n   11•u or s. 3529.
     Sept. 19, Sera't4t .._,...d '\o eont•,...nu "port.
     S•V'· 20, lb.w• e.cr-H '\o eaate"na• l"''port.




                                             A9
                ENVIRONMENTAL RESPONSE TASK FORCE
                         LIST OF MEMBERS


Department of Defense:

Chairman:   Thomas E. Baca
            Deputy Assistant Secretary of Defense (Environment}

Department of Justice:

            Anne Shields
            Chief, Policy, Legislation and Special Litigation

General Services Administration:

            Earl E. Jones
            Commissioner, Federal Property Resources

Environmental Protection Agency:

            Christian R. Holmes
            Deputy Assistant Administrator for Federal Facilities

Corps of Engineers:

            P.J. Offringa
            Major General
            Assistant Chief of Engineers

National Governors Association:

            James Strock
            Secretary for Environmental Protection
            State of California

National Association of Attorneys General:

            Daniel Morales
            Attorney General
            State of Texas

Speaker of the House of Representatives:

            Don Gray
            Senior Fellow and Water Program Director
            Energy and Environment Studies Institute
                         Thomas E. Baca
       Deputy Assistant Secretary of Defense (Environment)
                      Department of ~efense


     Mr. Thomas E. Baca assumed his role as the Deputy Assistant
Secretary of Defense (Environment) on August 1, 1990.   In this
position, he is responsible for the development, management and
coordination of environmental programs in the Department of
Defense.   He directs the Defense Environmental Restoration Pro-
_gram and budget to clean up hazardous waste sites on current and
former DoD activities; he is responsible for the overall coordi-
nation of the DoD natural resources conservation program and the
supervision of the Armed Services Pest Management Board.

    Mr. Baca brings a wide range of experience to his present
position.  He has over twenty-five years of experience i the
environmental area. He comes to the federal government from the
University of Arizona, where as Associate Vice President for
Administrative Services, he supervised several administrative
departments.  From 1986 to 1989, he was the City Manager for the
City of Santa Fe, New Mexico, and from 1982 to 1986 he worked in
the private sector as an environmental management consultant.
Mr. Baca served as the Director of the Environmental Improvement
Division for the state of New Mexico from 1976 to 1982.

    Mr. Baca received his Bachelor of Science degree from the
University of New Mexico in 1964 and a Master of Public Health
from the University of Minnesota. He is active in numerous
professional and civil organizations and has served as Chairman
of the Section on Environment of the American Public Health
Association and as Chairman of the Section on Administration of
the National Environmental Health Association.
                       Richard B. Stewart
                   Assistant Attorney General
           Environment and Natural Resources Division
              United States Department of Justice


    Richard B. Stewart is Assistant Attorney General for the
Environment and Natural Resources Division, United States Depart-
ment of Justice. Directing a staff of over 300 attorneys, he is
responsible for the representation of the United States in liti-
gation across the spectrum of environmental law, from hazardous
waste and air pollution to clean water and wetlands, coastal zone
protection, biotechnology, pesticides, and resource management on
federal lands and the outer continental shelf.

    Prior to joining the Justice Department, Mr. Stewart was
Byrne Professor of Administrative Law at Harvard Law School,
where he has taught since 1971. He has taught and published
extensively in the fields of administrative and regulatory law,
environmental law, tort law, and federalism. Most recently, his
work focused on the development of economic incentives for envi-
ronmental protection and international and comparative environ-
mental law. He is a graduate of Yale, Oxford, and the Harvard
Law School.
                         Earl E. Jones
                          Commissioner
               Federal Property Resources Service


    Earl E. Jones has served as the Commissioner of Federal
Property Resources Service (FPRS) for the U.S. General Services
Administration (GSA) in Washington, D.C., since April 1984.
     FPRS is responsible for managing the Nation's multimillion
ctollar program for the utilization and disposal of Federal real
estate, a program of multibillion dollar potential. Previously,
Jones was the Assistant Commissioner of the FPRS, Office of Real
Property, from 1979 to 1984. Until transfer of the function to
the Department of Defense in 1988, Jones was also responsible for
the management and administration of the nation's multibillion
dollar stockpile of strategic and critical materials.

    Jones joined GSA's real property office in 1962 as a realty
trainee and served in a number of positions of progressive
responsibility, including the Deputy Director of the Eastern
Division from 1971 to 1976, and the Director of the Western
Division from 1976 to 1979.
    A charter member of the Senior Executive Service established
in 1979, among many honors earned during his career, Jones
received the Presidential Rank Award of Meritorious Executive in
1983 and the GSA Distinguished Service Award in 1984. He is
actively involved in promoting agencywide community based volun-
teer programs, including GSA's adoption of the Prospect and
Buchanan Learning Centers in Washington, D.C. in February 1988
under the Partnership in Education Program, and the establishment
of the GSA Agencywide Volunteer Service Corps in 1989. Also, he
is a participant in the ongoing D.C. Committee on Public Educa-
tion project to upgrade the quality of education and school
facilities in the District of Columbia.

    A former Army captain, Jones was graduated from West Virginia
State College with a B.S. degree in business administration in
1955 and attended Graduate School at the American University in
Washington, D.C.
                         Christian Holmes
                  Deputy Assistant Administrator
               for Federal Facilities Enforcement
               U.S. Environmental Protection Agency


     Mr. Christian Holmes is currently the Deputy Assistant Admin-
 istrator for Federal Facilities Enforcement for the U.S. Environ-
 mental Protection Agency.  He is responsible for the EPA's
 cleanup, enforcement and waste management at all United States
 Government agencies, particularly Department of Defense installa-
'tions and Department of Energy nuclear weapons production facili-
 ties.
    Mr. Holmes has previously served as the Principal Deputy
Assistant Administrator, Office of Solid Waste and Emergency
Response at the EPA, Director of U.S. Trade & Development Pro-
gram, Principal Deputy Assistant Secretary of State for Refugee
Programs at the Department of State, and Vice President of a
Fortune 500 Company.

    Mr. Holmes graduated from Wesleyan University in 1968 with a
Bachelor of Arts.  In 1982, he became one of the first five
graduates in the history of the University to receive an Honorary
Master of Arts Degree, in Recognition of Public Service Achieve-
ments.

    Mr. Holmes was also the recipient of the U.S. Army Soldiers
Medal for Heroism in 1971, the Arthur S. Flemming Award (given to
the top five Federal managers) in 1978, the Presidential Merito-
rious Service Award (highest performance award to Foreign Service
Officers) in 1985 and 1987, and the highest performance award
given at the EPA, the Environmental Protection Agency Gold Medal,
in 1990.
                   Major General Peter J. Offrinqa
                    Assistant Chief of Engineers
                 Headquarters, Department of the Army


    Major General Peter J. Offringa is currently serving as the
Assi~tant Chief of Engineers, Office of the Chief of Engineers,
the Pentagon, Washington, D.C. He has been assigned to this
position since February 1988.

    As the Assistant Chief of Engineers, General Offringa has
~esponsibility for program development of all military construc-
tion , real property maintenance, and Army family housing at Army
installations and facilities worldwide.  Prior to this assign-
ment, General Offringa served as the Deputy Director for Civil
Works in the Office of the Chief of Engineers in Washington, D.C.

    General Offringa graduated from the U.S. Military Academy at
West Point in 1961 and has earned a master of science degree in
Applied Science from the University of California at Davis. He
is also a graduate of the U.S. Army Command and General Staff
College and the Air Force War College.

    He has held numerous responsible command and staff assign-
ments both in the United States and overseas. His command
assignments include serving as Commander and Division Engineer,
Ohio River Division, U.S. Army Corps of Engineers, Cincinnati,
OH; Commander, 130th Engineer Brigade, V Corps, U.S. Army Europe;
and Commander, 17th Engineer Battalion, 2nd Armored Division,
Fort Hood, Texas.

    His staff assignments have included serving as a Senior
Fellow at the Executive Seminar in National and International
Affairs, Foreign Service Institute, Rosslyn, Virginia; Director
of Engineering and Housing, V Corps, U.S. Army Europe; Special
Assistant to the Assistant Division Commander (Support), 2nd
Armored Division, Ft. Hood, Texas; Staff Management Division,
Office of the Chief of Staff, Army, Washington, D.C.; and Staff
Officer, Office of the Deputy Chief of Staff for Operations and
Plans, Washington, D.C.

    Among his military awards are the Legion of Merit, Bronze
Star (with 3 Oak Leaf Clusters), Meritorious Service Medal, Air
Medal, and the Army Commendation Medal.  He is also authorized to
wear the Parachutist Badge, Ranger Tab and the Army Staff Identi-
fication Badge. He is also a registered professional engineer in
the Commonwealth of Pennsylvania.
                         James M. Strock
            Secretary for Environmental Protection
          California Office of Environmental Protection


    Governor Pete Wilson appointed James M. Strock to be Secre-
tary for Environmental Protection for the State of California on
March 4, 1991. This is an interim position, and the Governor
intends to nominate him to be Secretary of his proposed "Cal-EPA"
later this year.
    Most recently Mr. Strock was Assistant Administrator for
Enforcement, U.S. Environmental Protection Agency. Appointed by
President Bush and confirmed by the Senate in November 1989, he
served as EPA's Chief law enforcement official. During his
tenure, working under Administrator William K. Reilly, civil and
criminal enforcement were at record levels, and he implemented
significant reorganization. He placed particular focus upon
invigorated federal facility enforcement and criminal enforce-
ment.
    Previously he was Acting Director (1989) and General Counsel
(1988-89), U.S. Office of Personnel Management; environmental
attorney with Davis, Graham & Stubbs, Denver, Colorado (1986-88);
Special Counsel, U.S. Senate Environment & Public Works Committee
(1985-86); Special Assistant to the Administrator, U.S. EPA
(1983-84); Special Consultant to Office of Majority Leader, U.S.
Senate (1982-83); Instructor, Department of Government, Harvard
(1980-81); Moderator, Producer, Lay It On the Line weekly televi-
sion program (WDSU-TV, NBC, New Orleans, 1973-74).

    Mr. Strock was educated at Harvard College (A.B., 1977-78);
Phi Beta Kappa; and New College, Oxford University (Postgraduate,
1981-82; Rotary Scholarship).  lst Lt., USAR-JAGC (1987- ) .

     Mr. Strock is a former Member, Board of Advisors of Toxic Law
Reporter (1987-89); Board of Directors of Youth Service America
 (1988-1989); Adjunct Fellows, Center for Strategic and Interna-
tional Studies (1989) . He received the Ross Essay Award of the
American Bar Association (1985), and an EPA Special Achievement
Award (1984). Mr. Strock is a frequent contributor to profes-
sional publications.
                        Daniel C. Moral••
                         Attorney General
             Office of the Attorney General of Texas


    Dan Morales took the oath of office as the 48th Attorney
General of Texas in January, 1991, at the age of 34.

    He promised to be an activist Attorney General, exercising
his Constitutional responsibility to defend state law, counsel
state leaders, and protect the citizens of Texas.

    Morales began his public service career in 1983 as Assistant
District Attorney for Bexar County. He served in that capacity
until 1985, when he was elected to the first of three terms in
the Texas House of Representatives.

    During his first term in the House, Morales was selected the
"Outstanding Freshman" by the Dallas Morning News and received
the "Outstanding Leadership Award" from the Texans' War on Drugs.

    He received numerous other honors during subsequent terms as
a member of the Texas House of Representatives. The Dallas
Morning News named him one of the state's "Seven Best Legisla-
tors." The San Antonio Express News twice named Morales "Politi-
cian of the Year," and the Greater Dallas Crime Commission twice
selected him one of the "Top Ten Legislative Crime-Fighters." He
has also received the "Outstanding Service Award" from the Inde-
pendent Colleges and Universities of Texas.

    Morales has served as Chairman of the House Criminal Juris-
prudence Committee and as a member of the powerful House Ways and
Means Committee.

    The Attorney General is an honors graduate of Trinity Univer-
sity, 1978, and Harvard Law School, 1981.

    He is a member of the boards of the Texas Lyceum Association,
the National Conference of Christians and Jews, and the World
Affairs council. He also is a trustee of Southern Methodist
University in Dallas and Schreiner College in Herrville.

    A native of San Antonio, Morales is an Elder with that city's
First Presbyterian Church.
                            Don Gray
            Senior Fellow and Water Proqram Director
            Environmental and Energy Study Institute


    Don Gray joined the Environmental and Energy Study Institute
as Senior Fellow and Water Program Director on May 9, 1991. Mr.
Gray is involved in developing policy alternatives to prevent
contamination of groundwater and to promote more efficient use of
water resources.

    Prior to joining EESI, Mr. Gray served as a professional
staff member, chief investigator, and staff director with the
House Subcommittee on Environment, Energy and Natural Resources.
Mr. Gray was responsible for the conduct of subcommittee's over-
sight of all programs of the Departments of Energy and the Inte-
rior, the U.S. Environmental Protection Agnecy, the Nuclear
Regulatory Commission, the Tennessee Valley Authority, the USDA
Forest Service, and civil works projects of the U.S. Army Corps
of Engineers.

    Mr. Gray has also served as an investigator with the House
Committee on Government Operations, the Senate Committee on
Appropriations, the Senate Permanent Subcommittee on Investiga-
tions, and the Senate Committee on Commerce.

    Mr. Gray is an honors graduate from the University of North
Carolina, and received a masters from Princeton University. He
was awarded the Woodrow Wilson National Fellowship, the Princeton
University Fellowship, and the American Political Science Associ-
ation Congressional Staff Fellowship .




     •
   DEFENSE ENVIRONMENTAL RESPONSE TASK FORCE: ISSUES
                     Working Draft
                      June 13, 1991



       Congress charged the Defense Environmental Response Task Force with making

findings and recommendations on two categories of issues relating to environmental

response actions at bases that are being closed: a) ways to improve interagency coordination;

and b) ways to consolidate and streamline the practices, policies, and administrative

procedures of relevant federal and state agencies in order to expedite response actions.

Congress specified that the Task Force make recommendations within existing laws,

regulations and administrative policies. The Task Force Charter provides that the Task

Force may also recommend changes to those laws, regulations and policies. To assist the

Task Force in its deliberations this paper identifies specific issues for potential consideration

within the broad framework of the Charter.




                                                1
                                     ISSUE #1

STATEMENT OF ISSUE

     a)    To what extent may facilities on closing bases be used by non-military users
           while cleanup investigations or other cleanup activities are being undertaken
           by the Department of Defense (DoD)?

     b)    To what extent may DoD transfer a base in parcels that exclude areas where
           ongoing remediation is necessary? How should such parcels be delineated?

     c)    To what extent may existing or proposed land uses be a factor in cleanup
           decisions:

           i.     if the site is on the National Priorities List (NPL)?

           ii.    if the site is regulated under the Resource Conservation and Recovery
                  Act (RCRA)? or

           iii.   if the site is not on the NPL and is not regulated under RCRA?

     d)    To what extent may the practices, policies and procedures for determining
           allowable uses of the land during and after the completion of remedial action
           be consolidated and streamlined:

           i.     if the site is on the NPL?

           ii.    if the site is regulated under the RCRA? or

           iii.   if the site is not on the NPL and is not regulated under RCRA?


BACKGROUND

     Statutory Requirements

            Environmental Restoration

     The Comprehensive Environmental Response, Liability, and Compensation Act

("CERCLA"), 42 U.S.C. §§9601-75, and the Resource Conservation and Recovery Act

(RCRA), as amended by the Hazardous and Solid Waste Amendments of 1984 (HSWA),


                                           2
§§42 U.S.C. 6901-69921(, are the principal federal statutes governing the cleanup of defense

sites contaminated by hazardous substances.            CERCLA § 120 specifically addresses the

responsibilities of federal agencies. Under CERCLA §120(a), federally owned facilities are

subject to and must comply with CERCLA to the same extent as nongovernmental entities.

In addition, 10 U.S.C. §270l{a)(2), specifically notes that environmental restoration activities

must be conducted consistent with and subject to CERCLA §120. Section 120(a) requires

EPA to use the same criteria to evaluate federal sites for the National Priorities List (NPL),

the list of highest priority sites under CERCLA, as it does for private sites. EPA interprets

§120(a) to mean that the criteria to list federal facilities should not be more exclusionary

than the criteria to list non-federal sites.   ~   EPA, Listing Policy for Federal Facilities, 54

m. ~· 10520, 10525 (Mar. 13, 1989).
       CERCLA also establishes certain minimum procedures that must be followed when

federal agencies transfer contaminated property. Section 120(h)(3) of CERCLA provides

that when the federal government transfers real property on which any hazardous substance

was stored for one year or more, or known to have been released, or disposed of, the

federal government must provide a covenant in the deed. The covenant must warrant that

all remediation necessary to protect human health or the environment with respect to any

hazardous substance remaining on the property has been taken before the date of the

 transfer, and that the United States will take any additional remedial action found to be

 necessary after the date of transfer.

        Some entire bases are listed on the NPL, including five on the 1988 closure list. In

 other cases, only a discrete site within the base is listed on the NPL.              There are


                                                   3
contaminated sites on other bases, that are not listed on the NPL CERCl.A § 120(a)( 4)

requires response actions on non-NPL sites to comply with state laws to the extent that state

laws apply equally to response actions at non-federal facilities. Some bases contain facilities

currently regulated under RCRA or state hazardous waste regulatory programs (or both);

these facilities will need to be closed in accordance with those statutes. HSWA requires a

treatment, storage, or disposal facility (TSDF) that has released hazardous waste into the

environment to undertake "corrective action" to clean up the release. Where a base, or

portion of a base, is both listed on the NPL and subject to state-delegated RCRA

authorities, conflicts may arise regarding a particular proposed remedial action.

              Transfer of Land

       Other statutory authorities also apply to real estate owned by military departments

that must be considered in the context of transferring land at a base that is being closed.

Section 204(c) of the Base Closure Act, for example, reiterates that the National

Environmental Policy Act (NEPA) applies to the actual closure or realignment of a facility

and the transfer of functions of that facility to another military installation. Other statutes

impose procedural requirements; 10 U.S.C. §2662(a), for example, provides that the

Secretary of a military department may not enter into certain real estate transactions,

including leases and other transfers of property where the value exceeds $200,000, until 30

days after he has submitted a report of the facts surrounding the transaction to Congress.

Title 10 of the United States Code, §2668(a), authorizes the Secretary of a military

department to grant easements for roads, oil pipelines, utility substations, and other

purposes including "any ... purpose that he considers advisable."



                                               4
       Under the Base Closure Act and the Federal Property and Administrative Services

Act, a federal agency receiving property from another federal agency must pay the estimated

fair market value for available facilities .   .5« Federal Property and Administrative Services
Act, 40 U.S. C. §571   ~ ~.;   Section 204(b) of the Base Closure Act, Pub. L 100-526, 102

Stat. 2627; Federal Property Management Regulations, 41 C.F.R. §§101-42 to -49. Excep-

tions to this general rule are allowed for intra-DoD transfers of real property and if the

Administrator of the General Services Administration and the Director of the Office of

Management and Budget both agree. 41 C.F.R. §101-47.203-7. Regulations implementing

this exception allow no-cost transfers for certain specified purposes including public parks

and recreation areas; historic monuments; public health or educational purposes; public

airports; and wildlife conservation. ld. In addition, the McKinney Act, 42 U.S.C. § 11411,

requires DoD to give non-profit organizations that assist the homeless priority in leasing

unutilized and underutilized property.

        Section 204(b) of the Base Closure Act requires the Secretary of the military

department contemplating a property transfer to consult with state and local governments

to consider any plan for the use of the property that the local community may have. Pub.

L 100-526, 102 Stat. 2627. States and local governments are generally given priority over

private individuals in acquiring surplus federal property. 41 C.F.R. §101-47.203-7.

        Issues Surroundin1: Transfers and Conveyances

        Some bases identified for closure contain facilities that are in demand for non-

military use. DoD may desire to lease, or otherwise transfer use of, such facilities to non-

military users before the base is closed. In some cases the facility may be within an "area



                                                   5
of concern" identified by DoD as needing either investigation to determine the need for

environmental restoration or actual restoration. The U.S. Environmental Protection Agency

(EPA) and state environmental regulatory agencies will have different interests in the site

depending on the state of knowledge about the site, the regulatory posture at the site, and

the stage of the investigation or restoration. It may be necessary to limit or restrict the non-

military use in order to ensure that it does not interfere with the ongoing investigation or

cleanup. Differing controls or limitations on interim use of facilities may be appropriate

during the phases of investigation and restoration.

       The procedures for determining interim and final uses of the affected land are likely

to differ depending on whether the cleanup is conducted under CERCLA, RCRA, or some

other framework. In addition, the intended interim or final use of the land may or may not

be a valid consideration in determining cleanup standards, depending on which of these

statutes governs the cleanup decision. The extent to which planned land uses affect cleanup

decisions is likely to be highly controversial. If higher levels of residual contamination are

allowed after cleanup because, for example, the planned use is industrial, measures must be

taken to ensure that future changes in land use do not expose the public to unacceptable

risks from the residual contamination.

       Contamination on many bases is limited to relatively small discrete areas. One issue

raised in such cases is whether the uncontaminated areas may be transferred as separate

parcels, with the Department retaining the contaminated areas until remedial action is

completed.




                                                6
       A corollary issue is how to define a contaminated area, panicularly where

groundwater may be contaminated and the extent of that contamination      ~.size,   direction

of flow, and speed of the plume) is unknown. It may be difficult to determine precisely the

boundaries of an "area of concern" prior to completion of cleanup.          Another related

question is whether, and under what circumstances, DoD may transfer uncontaminated

surface above contaminated groundwater, or contaminated surface above contaminated

groundwater for which surface remediation is complete. Also, the issue of defining and

transferring uncontaminated areas is complicated by the fact that activities during the

remedial design and remedial action could reveal that contamination extends to an area that

had already been transferred by easement, lease, or some other land use transfer

mechanism.

       Restrictions such as prohibitions on well drilling or other subsurface activity (if

subsurface contamination is an issue) may be appropriate. DoD could also sell or otherwise

transfer parcels of property with a right of entry for monitoring or with other use

restrictions. How restrictions are implemented will be critical to the protection of public

health and safety, success of the cleanup, and resolution of future conflicts between the

military department and its transferees. Restrictions on use are effective if they are made

a part of the deed and "run with the land" so that later owners cannot extinguish or ignore

them. Such restrictions also decrease the marketability of the land, making it more difficult

to obtain purchasers. Lenders may be hesitant to lend money to purchase land which has

had use restrictions placed on it.




                                              7
       Impediments to transfer resulting from threats of liability under CERCLA §§ 106 and

107 cannot be ignored. Potential transferees (including lessees) of property from DoD could

be considered "owners or operators" of a CERCLA site liable for the costs of response at

the site.      At Pease Air Force Base in New Hampshire, this problem was resolved by

legislation providing complete indemnification to the State of New Hampshire and lenders

for any liability associated with releases caused by the Air Force at the base.

Indemnification will likely be a recurring issue, since agencies do not have the authority to

indemnify a purchaser themselves.

       DoD has noted that bases may not be "nearly as valuable to the private sector" as

they are    to   DoD.   ~Statement    of James F. Boatright, Deputy Assistant Secretary of the

Air Force, before the Defense Base Closure and Realignment Commission, at 3 "(May 10,

1991)). Moreover, the commercial real estate market is still in a slump, id. at 4, which will

likely impede any large-scale transfers of property for some time. Factors that could affect

the value of a particular piece of property at a military installation include:

        (1)       impact of closure on local economy
        (2)       ability of local market to absorb a large tract of land in a short time period
        (3)       age and possible negative value of improvements on land
        ( 4)      availability of public benefit conveyances
        (5)       set asides for wetlands, critical habitats, or contaminated areas

ld. at 9.

        Other factors that may affect land values include the degree of encroachment of non-

military uses upon the base      ~.    military flight paths, weapons uses, training needs that

affect local communities); the condition of the base facilities and its improvements; the

facility's suitability for other uses without significant expenditures; and the value of existing

 improvements that can add to a property's marketability.




                                                 8
OPTIONS

    a)    Identify the circumstances in which, and the criteria and restrictions under

          which, facilities on closing bases may be leased or otherwise transferred for

          use by non-military users while cleanup investigations or other cleanup

          activities are being undertaken.

    b)    Clarify applicable statutes, regulations and policies to indicate that portions

          of bases for which there is no contamination or likelihood of contamination

          may be transferred independent of contaminated parcels.

    c)    Identify the differences in the policies, practices and procedures for

          determining allowable uses of land during and after cleanup when the site is

          on the NPL, a RCRA regulated site, or neither. Reconcile those differences.

    d)    Reconcile and combine oversight and regulatory responsibilities under

          CERCLA and RCRA at bases being closed or realigned.

    e)    Identify and develop criteria for the use of innovative real estate transactions.

     f)   Identify and develop criteria for the use of conservation easements or other

          protections for ecological resources for certain properties being sold or

          transferred.

     g)   Develop a policy to govern the use of parcels within an "area of concern"

          during the time investigation and remediation is ongoing, including provisions

          regarding access rights, compliance with applicable health and safety plans,

          and subsequent transfers.




                                          9
                                        ISSUE #2

STATEMENT OF ISSUE

      a)     To what extent may the practices, policies and procedures for detennining
             cleanup standards be consolidated and streamlined:

             i.     if the site is on the NPL?

             ii.    if the site is regulated under the RCRA? or

             iii.   if the site is not on the NPL and Is not regulated under RCRA?

      b)     To what extent may the practices, policies and procedures for executing the
             cleanup be consolidated and streamlined?

             i.     if the site is on the NPL?

             ii.     if the site is regulated under the RCRA? or

             iii.    if the site is not on the NPL and is not regulated under RCRA?


BACKGROUND

      The roles and responsibilities of state environmental regulatory agencies and EPA

vary depending on whether a site is on the NPL, is regulated under RCRA, or neither.

Each of these three legal categories provide distinct opportunities for consolidating and

streamlining the cleanup process. In particular, the procedures for determining the cleanup

standards for an NPL site will likely differ from the procedures for determining the cleanup

standards for a TSDF regulated by a state that has received RCRA corrective action

authorization from EPA Similarly, the procedures for implementing a remedial action at

an NPL site differ from the procedures for carrying out a corrective action at a TSDF in a

state that has a fully delegated RCRA/HSWA hazardous waste regulatory program.

Moreover, the procedures for determining and implementing cleanup decisions at non-NPL,

non-RCRA sites may differ from both of these systems.



                                             10
      Two sections of CERCLA are directly applicable to the questions of determining and

implementing cleanup standards at federal facilities. Section 121 of CERCLA, addressing

cleanup standards, is the primary statutory authority for determining cleanup standards at

all sites listed on the NPL Section 121 delineates the nature of the remedy to be chosen

and requires that a chosen remedy protect human health and the environment. Section 121

also provides that legally applicable or relevant and appropriate more stringent state

standards (ARARs) may apply in determining the proper level of cleanup.

       As already noted, CERCLA § 120 specifically addresses the responsibilities of federal

agencies for cleanup of hazardous substances. CERCLA §120(a) requires federally owned

facilities to comply with CERCLA to the same extent as nongovernmental entities.

CERCLA §120(e)(2) provides that for federal sites that are listed on the NPL, EPA plays

a significant role in remedy selection. The section directs the federal agency concerned to
       .                       '

enter into an lAG with EPA for the "expeditious completion ... of all necessary remedial

actions" at the facility. Executive Order 12580 specifies the procedures to be followed prior

to the selection of the remedy by EPA. Exec. Order 12580, §10, 52 Fed. Reg. 2923, 2928

(1987).

          For federal sites not on the NPL, CERCLA §120(a)(4) mandates that state laws

concerning response actions apply. Arguably, all of the procedures contained in the NCP

may apply even to federal sites not on the NPL. Section 120(a)( 4) raises the possibility that

§ 121 guidelines on state standards must be followed even for those federal facilities listed

on the NPL




                                              11
       Section 120(i) of CERCLA states that nothing in CERCLA §120 "shall affect or

impair the obligation of any department, agency, or instrumentality of the United States to

comply with any requirement of [RCRA] (including corrective action requirements)."

Section 120(i) states only that corrective action authorities apply to federal facilities; it does

not specify the extent to which those authorities, found in RCRA §3004(u), will apply if

CERCLA response activities are being conducted at the same time as corrective action

activities at a federal facility.

OPTIONS

        a)      Identify the differences in practices, policies and procedures for determining

                cleanup standards under CERCLA, · RCRA and other applicable laws,

                including state laws; reconcile those differences.

        b)      Identify the differences in practices, policies and procedures for executing

                cleanups under CERCLA, RCRA and other applicable laws, including state

                laws; reconcile those differences.

        c)      Interpret CERCLA §120(i) in conjunction with §121 so that RCRA §3004(u)

                requirements do not delay CERCLA cleanup actions.

        d)      Reconcile and combine oversight and regulatory responsibilities under

                CERCLA and RCRA at bases being closed or realigned.




                                                 12
                                        ISSUE #3

STATEMENT OF ISSUE

      Are there sites for which remediation is not technologically feasible, or for which the
      cost or remediation is simply prohibitive? If so, what uses, if any, can be made or
      such sites, and what mechanisms are needed to protect the public in perpetuity from
      the risks associated with such sites?


BACKGROUND

      This issue most frequently arises at military installations or former military

installations that are contaminated by munitions residue. There are many such sites around

the country with some degree of contamination. Two installations scheduled for closure

under the 1988 Base Closure Commission report, Jefferson Proving Ground and Fort

George G. Meade, have significant amounts of munitions residue. For example, at Jefferson

Proving Ground alone, it is estimated that more than 23 million rounds of munitions have

been fired, and over 1.5 million rounds remain as high-explosive duds.

       Munitions residue that contaminates military installations exists in many forms. The

simplest form is the inert fragmentation/ casing which remains after the high explosive fill

has detonated. On the other end of the spectrum are munitions containing high explosives

that malfunction (duds) and may be on the surface or (most probably) many feet

underground. Some munitions have been recovered as deep as 30 feet beneath the surface.

With the proper stimulus, these duds may detonate. In addition to these two types of

munitions are many other practice/training devices that may or may not contain an explosive

charge.




                                             13
      The regulatory status of unexploded ordnance under RCRA and CERCLA is not

clear. In fact, there are differing interpretations among EPA and the States of RCRA

storage, treatment and disposal requirements for the manufacture, testing. handling and

disposal of ordnance, munitions, and other weapons.         DoD is currently pursuing an

amendment to the U.S. Senate Federal Facilities Compliance Bill (S. 596) that would allow

the development of alternative regulations to address the RCRA issue.

       Not every military installation, or part of an installation, creates a munitions

contaminated area to the same degree.       For example, several bases may all use one

bombing range. At other bases, only small arms ammunition may have ever been used.

Therefore, the scope of contamination may not be easy to determine, and a records search

by the services may be needed in order to determine the location and extent of unexploded

ordnance. However, records may be inaccurate or non-existent, especially for actions that

occurred years ago.

       The feasibility and cost of remediation depends on the future intended use of the

property and the level of cleanup necessary for the intended use. Surface clearing may be

adequate for pastures or wildlife preserves. (Surface clearing has been proposed at Ft.

Meade where munitions contaminated property is being considered for use by the

Department of the Interior as a wildlife refuge. However, strict controls on human access

will also be required.)   DoD safety standards do not permit custody transfer of lands

contaminated with explosives that may endanger the public, when the contamination cannot

be remediated with existing technology and resources. Cleanup of the same property for

residential or commercial use may be prohibitively costly, if not technologically infeasible.


                                             14
                                              ---------




This is because more land must be excavated to recover dud munitions buried beneath the

surface that may be detonated by construction and excavation. Clearing land of ordnance

not only requires specialized equipment, it can also be very dangerous and extremely labor

intensive.

       Where adequate clean-up for residential or commercial use is not feasible, DoD

needs mechanisms to protect the public from residual risks on sites which are transferred.

First, past land use (and potential hazards) must be clearly identified to future owners.

Second, restrictions on future land use must be clearly identified to future owners and

somehow retained with title for all subsequent transactions.           Restrictions should be

commensurate with the residual unexploded ordnance hazard.

       Even with restrictions on future use, liability questions remain. DoD is still liable for

cleanup resulting from DoD activities prior to transfer. In cases where public access is

restricted, what happens if there are trespassers or access is required for legitimate reasons,

~.   firefighting? Can DoD ensure that it will not be liable for contamination created by

future users?

        Remediation costs are proportional to the depth of cleanup. This variability of cost

is best illustrated by the estimated remediation costs for Jefferson Proving Ground (95

square miles near Madison, Indiana) according to various levels of cleanup.




                                               15
                         ESTIMATED COSTS FOR VARYING LEVELS OF
                                 EXPLOSIVE REMEDIATION

                           (Estimates provided by Jefferson Proving Ground}


              CLEANUP LEVEL                                   COSTS

              Surface Cleanup                                 $550 Million
              Restricted Cleanup
                       3 Feet Deep                            $2.8 Billion
                       6 Feet Deep                            $3.8 Billion
                       10 Feet Deep                            $5.0 Billion
              Unrestricted Cleanup                           > $5.0 Billion
              (Technology for unrestricted
              cleanup is currently not available}



      Special Concerns and Considerations

       Present DoD policy requires that plans for leasing, transferring or disposing of DoD

real property where ammunition or explosives exists, or is suspected to exist, be submitted

to the DoD Explosives Safety Board for review and approval. DoD regulations (DoD

6055.9-510) specify that contaminated property cannot be transferred until "rendered

innocuous."

       Restricting a cleanup to surface contamination may not ensure that the surface

remains uncontaminated over time. Freezing and thawing of the soil and other physical

factors may result in subsurface ordnance migrating to the surface. Therefore continuing

remediation may be necessary, since all remediation tends to be temporary in lands which

have been heavily contaminated by penetrating ordnance like aircraft bombs and artillery.

       The location of buried ordnance may not be known. Therefore, it may be difficult

to certify that "clean" sites are in fact really clean. This has occurred at Jefferson Proving

Ground where large amounts of World War II munitions were found in the course of

excavating a supposedly clean area.




                                                    16
      Ordnance cleanup is inherently dangerous. The need to characterize and remediate

a site may conflict with requirements to minimize health and safety risks to cleanup

personnel.

       In addition to lack of technologies to remediate the site, technologies may also not

be available for conducting investigations of the site. For example, detectors may not be

capable of detecting ordnance buried deep beneath the surface or in wetlands.

       The excavation required for a complete cleanup would likely generate significant

undesirable environmental impacts. Removing 10+ feet of soil over a large area would

generate impacts similar to strip mining.      However, in areas heavily contaminated by

penetrating ordnance, even this level of clean11p might yield temporary results, as ordnance

items later work their way to the surface.

       In most cases, installations contaminated with high explosive munitions residue will

not be suitable for commercial or residential use, not only because of the cost or lack of

cleanup technologies, but also because it may be impossible to guarantee that a site is in

fact "clean."

OPTIONS

       a)       Separate highly-contaminated areas from "clean" areas (known as "parceling"),

                so that part of the land that experienced little or no contamination might be

                easily cleaned, verified and released.

       b)       Perform surface cleanups sufficient to allow activities where both cleanup and

                human access and exposure is   limited,~.   wildlife refuges or certain types of

                industrial activities not involving construction or excavation.



                                               17
c)   Establish mechanisms to protect the public in perpetuity from residual risks

     at sites where remediation is at a lesser level.

d)   Retain title in DoD and designate the area as a wildlife refuge, bird sanctuary

     or similar use not involving public access.

e)   Use funds from the Base Closure Account to research and develop technology

     for explosive ordnance disposal.




                                     18
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                                        ISSUE #4

STATEMENT OF ISSUE

      To what extent can overlapping or duplicative regulatory responsibilities and
      functions be combined or delegated to a single regulatory authority?


BACKGROUND
       Existing law allows EPA to delegate to states the primary responsibility under

RCRA/HSWA for overseeing corrective action at TSDFs, but does not allow similar

delegation of responsibility under CERCIA to oversee remedial actions at NPL sites. The

potential for delegation of corrective action oversight under RCRA is largely unrealized,

since few states have met EPA's criteria for authorization.

       Although CERClA does not provide for delegation of that program to individual

states, CERCIA §121(f) calls for "substantial and meaningful involvement by each state in

initiation, developments and selection of remedial actions to be undertaken in that State."
                                                                           .
EPA's proposed revisions to the National Contingency Plan (NCP) in 1988 included policy

options to allow NPL sites to be "deferred" to states to facilitate more rapid cleanup and to

conserve the federal fund. Amidst growing controversy over this proposed expansion of

states' role at NPL sites, the EPA Administrator informed a Senate committee in June 1989

that EPA would defer action on this proposal, and the new NCP includes no such option

for states. Nevertheless, many states take an active role in federal cleanups of NPL sites,

often assuming "state lead" under cooperative agreements with EPA Most states also now

operate their own cleanup programs for remediating non-NPL, non-RCRA sites.




                                             19
        Delegation of the RCRA regulatory program to the states is intended to eliminate

duplication of effort by agencies that have overlapping areas of responsibility.          The

argument is that delegation will expedite cleanups at TSDFs, including those located on

bases that will be closed. Delegation of RCRA corrective action authority to more states

might expedite cleanups at a significant number of bases subject to closure. When EPA

delegates RCRA §3004(u) authority to individual states, it could perhaps adjust the

delegated authorities to account for the special circumstances encountered at federal

facilities.

OPTIONS

        a)     Determine why more states have no_t satisfied the criteria for delegation of

               RCRA/HSWA corrective action authority. If delegation is being delayed for

               reasons unrelated to the established criteria, remove those impediments.

               Assist states to meet the criteria

         b)    Consider the benefits of a single environmental agency (federal or state)

               having regulatory responsibility for all hazardous substance cleanups at closing

               bases.

         c)    Authorize delegation to states of authority to oversee cleanup actions at NPL

               sites where the state demonstrates capability to do so.

         d)    Reconcile and combine oversight and regulatory responsibilities under

               CERCLA and RCRA at bases being closed or realigned.




                                               20
                                        ISSUE #5

STATEMENT OF ISSUE

      To what extent may proceeds from property transactions be used to fund cleanups?


BACKGROUND

      The 1988 Base Closure Act (P.L 100-526) authorized closures to begin in January

1990 and end by October 1995. The statute allows DoD to use the proceeds from the sale

of land at these dosing bases to offset the costs of such closings if the sale occurs by

October 1995.

      Cleanup of many closing bases will extend beyond five years and final transfer of

some portions of those bases, therefore, may not occur until after the five year deadline

passes. Moreover, funds currently budgeted for cleanup of contaminated sites at closing

bases are insufficient to dean up all such sites.      Until fiscal year 1991, cleanup of

contaminated sites at bases slated for closure was primarily funded under the Defense

Environmental Restoration Account (DERA), DoD's overall account for environmental

re.storation at all bases. DERA has $1.1 billion authorized for Fiscal Year 1991. In the

National Defense Authorization Act for Fiscal Year 1991, P.L 101-510, Congress moved all

funding for cleanup activities at closing bases from the Defense Environmental Restoration

Program (DERP) at active bases to the Base Closure Account, which was provided with

$100 million to fund the costs of cleanup at the bases on the 1988 closure list. Congress

took this action because of its concern that cleanup at dosing bases should not compete with

cleanup activities at active bases for DERA funds under DoD's worst-first priority system.




                                             21
       Applying the proceeds from the property transactions to the cleanup of other

contaminated sites would supplement the funds appropriated for cleanup and expedite

cleanup of all such sites. For example, a trust account might be created with the proceeds

from the lease or sale of land at a site, to be used to pay the costs of long-term operation

and maintenance of a groundwater pumping and treatment system required as part of the

cleanup at that site.

       An example of the use of a trust mechanism to fund future clean-up activities is

found in the consent decree entered in connection with United States of America v. Stauffer

Chemical Company. et al., Civil Action No. 89-0195-Mc, (D. Mass.).          Pursuant to the

consent decree, the parties allocated responsibility for conducting and paying for cleanup

activities and agreed to the establishment of two trust mechanisms and an escrow account

through which past and future cleanup activities would be financed.

       The defendants responsible for conducting future agreed-upon cleanup activities on

the site agreed to establish a trust (the "Remedial Trust") and provide the trust the money

necessary to ensure the uninterrupted progress and timely completion of the required

cleanup work. These defendants will remain jointly and severally liable for any failure of

the Remedial Trust to comply with the terms of the consent decree.

       A second category of defendants agreed to establish a second trust (the "Custodial

Trust") and to convey to such trust title to their real property interests in the site. Under

the terms of the consent decree, the Custodial Trust is responsible for managing the

property, which includes:




                                             22
             implementing land use restrictions that would maintain the integrity and

              prevent the unauthorized disturbance of the caps and other structures that are

              to be constructed at the site as part of the cleanup process.

              permitting access to the site for cleanup activities.

              subdividing the property and locating potential purchasers.

              negotiating and executing the sale or transfer of the property.

              arranging for the sale or transfer proceeds to be delivered to the escrow

              account established by the consent decree (the "Escrow").

       If any property included in the site is unsalable, the Custodial Trust is to establish

a further trust to hold and operate the property in accordance with a plan developed by

EPA in consultation with the Commonwealth of Massachusetts. The Custodial Trust is not

to sell any real property included in the site until after certification of completion of the

remedial action, except in limited circumstances where future cleanup and control of the

property has otherwise been assured by EPA and the Commonwealth.

       The bulk of the proceeds in the Escrow are to be applied to reimburse the United

States for response costs incurred prior to the entry of the consent decree and to reimburse

the defendants responsible for conducting future cleanup activity for their respective costs.

The defendants responsible for conducting and paying for future cleanup activity are also

jointly and severally responsible for any failure by the Custodial Trust, any further trust

established pursuant to the consent decree, or the representative of the Escrow to comply

with the terms of the consent decree. The Custodial Trust and its trustees are not to be

considered owners or operators of the site property for liability purposes solely on account


                                              23
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                                                                                                                                                                                                                                     -~     l---x
DEFENSE ENVIRC)NMENTAI.~
REST'ORAl~ION PROGRANI




ANNUAL REPOR1~ 1~() CC)NGRESS
F() R FISCAL YEAR 1990
(.\hrid~cd   \ ·crsion)
I   '




        Foreword

        D
                am pleased to provide the Congress with this report on the accomplishments of the
                Department of Defense Environmental RestoratiOn Program (DERP~ for Fiscal Year
                1990. This last fiscal year has seen steady progres s on all frpnts as w~ ll,as"·a continued
                                                                   1
        mcrease m the level of activity under DERP. The pnmary focus of DERP c6ntinued to be the "
        investigation and cleanup of contaminated DoD sites and formerly used pro~rties. To ,tt]is end.    I·-                                                                          ~


        over 96 percent of the funds authorized by Congress for DERP in Fiscal Year 1990 w,ere appl iea t
                                                                                        I,
        to Installation Restoration Program (IRP) efforts. Other significant DER~ efforts included .
        research and development, waste minimization. and manakement system improvements.
                                                                                                                                                                                                     t
           DoD's first priority in the IRP is to identify and clean up those sites that present tl)e.highest
        risk to public health and the environment. By the end of the fiscal year, 89 DoD installations an:d '                                                                                                    ·I.·
                                                                                                                                                                                                                   ,'ij
        12 fom1erly used properties were included on EPA's National Priorities Listl (NPL). Remedidl.
                                                                                                                                                                                                           .       -!~;~
        Investigation/Feasibility Study work was ongoing at 81 of the DoD NPL install:hions and removal·:                                                                                                      , ; I··_·:;,
        actions and/or Interim Remedial Actions had been conducted at 68 of the Dod NPL installations '
        by the end of Fiscal Year 1990.

           The total number of sites covered by the IRP increased,by 20 percent in Fiscal Year 1990,. to
        more than 17.000 sites at over 1.800 installations. These ne,w sites are attributa~le t6·the.inclus•ion
        of more than 200 smaller installations. such as U.S. Army Reserve Centers, in the IRP. By the
        end of the fiscal year. Preliminary Assessments had been cpmpleted at more th;an .16.000 of these
        sites and Site Inspections at more than 9,000 sites. Remedial Investigations/.Feasibility Studies ,.
        were underway or completed at more than 5...\00 sites and Remedial Actions llhad been initiated
        or completed at more than 1.400 sites.                                            '                   ·

             By the end of Fiscal Year 1990. IRP work had bee~ completed and nq further a.c,tion !'
        required at more than 6.300 of the sites included in the II}P. The majority oflthc sites rt'quiri1i.~
        "" further action represent instances where studies have shown that no threat to huma1~ hcal~h .
        or the cnvirumncnt exists and no remedial actions arc necessary. Altho~gh ~tudying Sj_.res tH~t·t
        C\'L'Illtiallv :1rc found tu pose no ri:-:k is a time-consuming process requirin£ consitkubk 1
                                                                                  ...             I   ...     l
        rt'"'t lllfccs. it is an csscntial :tctivitv n.:prL·scntint! si~nificant progress in the IRP.
                                                                                                                                                                                                               ..,
                                                                                                                                    I                                I   .

             :\llPtilL·r !lll':tsurc nf IRP prP1-;rl':-.S is 111 the :n·L·;, nf tntcragcncy cooperation. During Fisc:t) YL',\1
         ]\Ill(}_ llltl"t:t:-:l·llc:- .-\~rL'L'Illl'llh \\L'I\' '':-:'tl·d \\ tth EP:\ and the states fnr ~I 1),,() :-.:1.:1
        lfi'-Ltll.11tt'lh.                      l'tllJ;:nl_~               till·        lt•l.d   tlllllli't't   ,If   lll'!.tll.!ltt'th   '.\ith   ,i_\..!rlL'd   :t~I"L'l'tllt':lt'   t".•r   '1:-.- ·
        \ t l '. . . . I I .•. I I : ' ' I I . I I It   I ' II .. I Ill I ~ l   I ( ' ...,   j




                                                                                                                                                                                               )· J .~ .
· 'Glohol srewardshit' is our shared rcsponsihi!iry
and shared opportunity

                                          Pre~ident          George Flush




""f)t1~'11SC !11/(//ht'      t'lll'iltll/fllt"ll! 1.\ 1/1!/ 1111 t'ifht'l 111

fl!'Of'OSifiiJ/1.    To choust'         ht'/H't't'fl tht'St' '-'

/fl/{lti,\\'1/Jft• /II tfll.\ !'Cdf   \\'11,-/(/   t!/.\t'l/t!/1.\   tft'/;'U.\~·
tfu t'U{,\ dll,f .~t'l/{(/1/t' t'l/1-/!'til/11/~·11[.;/ 1'01/(       ((II.\




                St·t.:n:tar_, of lkft:lht' }{it:hard ( "ht•llt'.'
Table of Contents

The Defense Environmental Restoration Program

The Installation Restoration Program

Installation Restoration Program Status            6

FomH~rly                 Used Ddcnsc Sites         9

Army IRI' Progress                                12

Navy IRP                   Pru~rc:\s              I-I

Air Force IRP Progress                            16

                                                  lo

                                                  211

                                                  '
                                                  - ''


1 'r   , '~~ 1 .111 1   I ·111 ; , i : ; 1 ·. •

I :         . ·'           ·.··
!'in~di!.L'd between l)ol) :tnd 12 :-.laic:-. in Fiscal Yc~n· Jl)iJ()_ Tlti . . pnl~t\.''-'" illu'-'ILtlt:s the clllph:tst"
DoD ll:ts placed Pll tkvdoping workahk solutions fur sill' clc~tllllj)'-' in UHl)KT:tti()ll with other
cogniz:ult agcnciL·~ :111<.1 th~ puhl ic.

     We also have made progress in several relaicd areas under DERI':

        Our manag('mt'lll COfhthi!ities hU\'C IN.'£'11 S!l"t'llgtltcncd rhrou.r...:h ecrsonncl training am/
        i111proren1cnts to sire tracking and f>riority .\"('!fing tools.


        Research and dn·clopmcnt acti\·ities hare rcsuhcd                                    II!     hcftcr. more cost-e}}i.:ctin·
        in\·cstigotion and cleanup techniques.


        Waste minimization projects hm·e heen comrJ!cted to reduce lw:ardous u·aste generation
        rates at our actin· installations.


  Through lhesc and o1her aclivilies, we have made significanl headway in building an
environmenlal elhic wilhin DoD. The perseverance and commilmenl of our personnel. from the
inslallalion level up lo 1his Headquarters, have enabled us 10 lead 1he way among Federal
agencies in lhc invesligation and cleanup of our facililies. This corllinuing dedicalion 10 duly.
bolh in 1he defense of our nalional securily and in lhe prolcclion of our environmenl, will enable
us 10 meel 1he challenges ahead.

   As wt: make the transition from the investigation of our silt.·:-; to the more costly ckanup phase.
we rnusl ensure lhal our efforts are properly focused In ohlain lhc grealcsl bcncfil possihle for
our ckanur dull:trs. !\.Ltny d1alknges await us in the upcornin~ yc~tr~. :\!though \\l' h~J\"C COllll.'
a long way in the seven years that DERP has existed. we sti!! h~t'.'l.' Ltr to go. The courst.' we havt:
charted fur the 1\ltun.: is sound a11d will ensure the achit:vcmcnt                          or
                                                                          lllll" environmental restoration
goals.

     The programs ~llld acli\·itics rn;scnted                 in this rl.·pnrt [lf<l\"idl·            Cpn~rcs;-.          and thl· public    ;!
L·omprL'IlL"!lsive assl.'ssmcnt of our efforts to date and our p!:i!l'- !"Pr tilL· future. \\·..- IDllk t"l)rward
tP   worh.in~ tP~l'lhL·r   \\·itll   ~Ill   invuh'L'd   p~1rtics   111   umtinuin~   till·   ~..:rtlt-...":tl   \\orh.   llllldl!Ltcd thu" L11
tllllkr   J)JJ~I'.
                                                                                                                                                                                                                        ,,
    I
' '
. !



           The Installation
           Restoration Program
                                                                                                                                                                                                                         •.



    I
    I                         he Installation Restoration Program (lRP) conforms to the reqbirements of
                                                                                 •                  l
                              Na,tional Oil and Hazardous Substances Pollution Contingency Rlan (NCP).
                              guidelines are applied in conducting investigation 'and remediation wo~k in the nro&r,h

I
    l
    I
                                                                                                                                                                           I




I   I         The initial stage. a Preliminary
          Assessment or PA. is an instal-
                                                                                              After agreement is reached with

          lation-wide study ro determine if
                                                                                          appropriate EPA and/or state lregu·
                                                                                          latory authorities on how th~ site
                                                                                                                                               The Natiorns!
          sites are present that may pose                                                 will be cleaned up. Renledial                        Priorities list (NPl)
          hazards to public heahh or the
        . environment. Available information
          is collected on the source, nature,
                                                                                         Design/Remedial        Action1 or
                                                                                         RD/RA work begins. During this
                                                                                                                                                                           I ,.
                                                                                         phase. detailed design plans for the                      EPA has <;stablished
         extent. and magnitude of actual and
                                                                                         cleanup     are    prepJred i and                   Ranking Syst~;m (,HRS)
         pOiential   haz:.Hdous   substance
         releases :Jl sites on the installation.
                                                                                         impiememed.                                                 -
                                                                                                                                            uating contaminated sites basecl;;1:l[i:
                                                                                                                                                                 ,,
                                                                                                                                            their potential hazard to
         The next step. :1 Site Inspection or
                                                                                              The notable exception to' this                health and t~c environ
         Sl, consists nf s:11npling and anal-                                                                                               Revised Haza'rd Rankine
                                                                                          scyucnce involves Removal Ac:tions                                     I!              ._
        ysis to determine the c.'<.istencc of                                                                                               (HRS2) for evaluation of
                                                                                          and Interim Remedial Ac tions
        actu:1l site contamination. The infor-
                                                                                          (IRAs). These actions may he con-
                                                                                                                                 1
                                                                                                                                            sites has bccri' proposed                               bY
        mation gathcrcd is used to evJ.Iuatc
                                                                                         JuctcJ at any time Jurinc. the' IR.P              The applic~llioh of the HRS.:
        the site and Jctcm1inc the response                                                                            -
                                                                                         to protect public health or control    I           PA/SI data. gCnerate.'i a score
        a~.:tionnccdcd. Uncontamin;.ucd ·"itcs
                                                                                                                                                                 r                   • •
                                                                                         contarnin:mt releases to the environ-             each site evaluated. The sco're'
        dP not proceed to later stages of the                                                                                                                     11
                                                                                         ment. Such measures may include                                                       .
                                                                                                                                           computcu' b asc( on f actors sue I1 .     .·
        IRP pn.~css.                                                                                                                       the- amount J.nd toxicity ofqhL'
                                                                                         providing :.tltcmatc. watc=r suppli es (o
                                                                                                                                 1




                                                                                         ltk.:al residents. renHlVIng 'L.Ilfl·             t:Hninants prL'1erll. thcir
                Cnnt:lmin:llcd            arc fully ~itcs                                                                                  nwbilit\' . in the L'n~·irnnmcnt.
                                                                                         n;ntr:ncd SPurc~..·s nf t..'<Hll:llllinpnt.-...              .           I
        invt:sti!.!.~Ht:d                 H.cmedial
                                          111        thl..'                                                                                :tv:ubhtllly 1lf pathv•       .-;,ys l~•r
                                                                                         Pr con~tructing structures tn prc vt:nt
        !J·n,:estt~atiun/Feasihilit~· Stud)-· Pr                                         the spread of cont:unin:llHm.
                                                                                                                                1          t'"\f1''"Llrt:. :tnd t,'ht: pnl.\lllllty uf p.._ip~:.
        H.l/FS. The RJ mav mdudl' ;,                                                                                                       uLttion ~..·cntns ]!to the sitL·.             · · "'-"
             .       . , I          :      •
        VJflt.'I_Y of SHL' lflVCStl,.!!.~ltiVL', S;Hll·                                                                                                                    I                                     '.     It!
        plin~. and analyt11..:al ;lctivltlc' to                                                                                                 ·n1c     .'\'PL  1 compil:llit~n of iht:'
                                                                                                                                                                    IS :.1
        dt:tL'rl11lllt:         lht:       ll;!IUrt:.         1..'\lt:nt . .11\tl                                                          'Itt'-.. ,._·,,r,n.~ 2S.5 or hit:hcr hy thl~
        ... l~lliiii..':H\(t.: td l'illl[.lll\1\l,llltl/\                       Til\'"                                                     !IRS Su ..·h '11t.\ :1rc                    f1r'-'l      prtlj'(
        It''-   u-.. , •I   I tlt'" t·1 ~ .d tJ.lllt >11       '" It 1      tl..-t,· r                                                     !••r .'.:!'!.    !J,ttn~( Full,l\'"111~                   .1 puhl1,
        lllillt'" lht• lh!.. '"             th..-   ;.:.t'"lll.'l.d   I~'J'IILt                                                            .•ll:lr\lt'lll      j"'t.'"fHI .... I,    prnpt•,t·d               ~-1.-'1
        111>11     l'~"'t'<!      f••.      llh'      , 1111\.Lllllll.Lllt'IL
                                                                                                                                           'lit'"'   :tl.t'.    t .... •   111-..~cd     1'11\.il      •'!l      i'h,·'-1
                     .,,
                                   '.\:                          I I I \ t ·, l : ~                                                        ·,I.!               Ill.(',         I".     'j, ·I,·:,·,!          C:. 'I: \1:
                                                        •, I ·,j      lo•
The Defense Environmental
Restoration Program


ii
       he Defense Environmental Restoration Program (DERP) was established in I ':184 to
       promote and coordinate efforts for the evaluation and cleanup of contamination at
       Department of Defense (DoD) installations. The program currently consists of two major
elements:

           The Installation Restoration Program (IRP). where potential contamination at DoD
           installations and formerly used properties is investigated and. as necessary. site cleanups
           are conducted

    •      Other Hazardous Waste (OHW) Operations, through which research, development, and
           demonstration programs aimed at reducing DoD hazardous waste generation rates are
           conducted.


                                                                                                                                                                                     DERP Funding
    DERP is managcd centrally hy                               Dq)~lrtm~.:nt  · s Environmental R.cs-
the Office of the                      s~cn:t:lfy       of     tor~llinll Program v.:ithin the over-
                                                                                                                                        1200
Defense. Policy direction anJ over-                            all fr:..~rn~.:work of SAR.:\ anJ the
sight of DERP is the responsibility                            Cornprch~.:nsivc        EnvironmcrHal
of the D~.:puty Assistant Secretary of                         Rcspunsl'. Cnnlpt!nsation. anJ Lia-                                      1000
lkfcnsc (Environment l. Each rniti-                            hiliry Acr of I ~00 (CERCLA). The
                                                                                                                                    ~
t:•ry service anJ the Dck·nsc Logis-                           De-fense Appropriations .·\ct pro-                                        800
                                                                                                                                    "
tt..:s Agency (DLA) arc n:sponsihk                             \'ldt:s funtiln~ for DERP.                                           0
                                                                                                                                    0
for program irnpkmcntJ.tion :11 ttH:ir                                                                                              0    soo
                                                                                                                                    ~

111 st:il bt ion:-..                                                Prt:vnnlsly.  DER.P   :ll...'tivltit''                          0

                                                               HlL"IudL·d Build111~ Dcmnlllill!l :111d                              ~
                                                                                                                                    ~    '00
  The Superfund :\rncndmcnh ;tnd                               lkhr1' R.t:mnv;d (B()[)]{) ;tnd tu;-
Re;uHIH,n/:ltlon AL·t  11f I ll:-\(1                           :Lrdt~tl'\   v .. :i'..!t'   diS\'Ils;!l.     :..;,,   HDD!{
                                                                                                                                         ~co
1.S:\RA1 pn'"tde ..:ontlllUtll~ :llllll,lf                     :Ill!\ lilt:'\       h;I\L'       h<..'L"II    .._-,llllhh.'lt'<]
rt~ (ur the Secret;uy til I )clt·n-..c I~>                     under the pr··~r.1111 sllh't.: I·Y s
\',trr: nut tlu-.     pr•,).!Ltlll 111 L••n-..ui!.J            1 <..'1..,1:1'-<' hl-..:fH'I l'fillfll> IRI' ,!lh!
                                                                1                                                                          •J
                                                                                                                                                5-l   55   85    97      8.3    69    ~0   31
ihltl    ·.~llh   the li.S            i:ll,lf••lllllt'lll.d    llll\\' !'1•'1'.'~1-- ll'l\lllll'd llll· llilhh
                                                                                                                                                                F,~cJJ   YeJr
l'r••lc(IJ••n ;\~~n~.:~               d:l'·\1    1·.,,-,JJ     \JT!lll.tr!\       h.l/.1',,.,,11'- \~.l~h· . 1.1'-l''"·:~

:1·.\·   I lt,h·r    I ~-'-Sil        ,.,,   \1::•t·•:.::t.!        '.   ,lfl'   'II: :l'i\!h       ll!llo!,·.! rh:o•:::·h         DERP lunding has grown steadily. from 5150
l::l;'kllll :Ji.llltlll_        '.\' "·..              :::,·                                          ··;··. :····:·      .11:.:   mi!l1on 1n FY 3.! :a :narc th;m $1 bdlion 1n FY 9'
i'•.                       1.::111.
                    ,"'I    ·: ,,                                                                 '!'
--,--                                                                                                                                       I'·




                                                             Hy FY X9. 14.401     sit~.:"s at   I.Yn      The involvement of EPA and
                                                                                                                    . . r  •         . .
                -_•IRP Activity Levels                    insl<lllations had been idcntifi.cd. In      state authont1es an prepanng the.~
                                                                                                       lAG ensures th eir concurrence, and
                                                                                                                      1


                                                          FY 90. these numbers increased to
                  Have Increased                          17,482 sites at 1.855 installations.         thaefore, enhances the public credi-
                · SlgnlflcanUy                            The installations added in FY 90
                                                          were small. nonindustrial propenies.
                                                                                                       bility of the course of action taken
                                                                                                       by DoD. The lAG also provides a
                                                          In addition to sites associated .with        strong management tool for resolv-
                    The number of installations           these newly added installations •. new       ing issues risiri.g from overlapping
                 included in the IRP has increased        sites were defined at installations          or conflicting jurisdictions.
                                                                                                                                                             '
                 steadily since the inception of the      already in the IRP due to recla.<-                                                                 i
                 program. Consistent with the De-         sification of contaminated areas into           The lAG negotiation process
                 partment's worst-first policy, em-       individual sites and inclusion of            involves the applicable DoD com-
                 phasis initially was plact!d on large,   new sites at installations already in        ponent and both the EPA regional                              ·'
                                                                                                       office and ~tate environmental                                '
                                                                                                                                                             ·~
                 industrial facilities with the highest   the program. The recent program                                                                    '


                 probability     for    contamination.    growth trend has begun to level off          authorities. Th1: identification and
                 Effons expanded yearly to include        and is expected to stabilize over the        resolution of issues typically takes
                 smaller installations with lower         next few years.                              several months. Once the parties
                 hazard potentiaL In addition, instal-                                                 conclude neg?tiations, the agree-                            ,.
                 lation reassessments initiated to                                                     ment is signe4 and made available                           ·'1
                                                              The number of install:itions                                                                          ·,
                 satisfy SARA requirements identify       lisred on the NPL_ also increased            for public cOmment. Comments
                 additional sites not previously in-      dramatically in FY 90. At the end            received are considered and appro-
                 cluded in the program. It is antici-     of FY 89, 41 DoD installations               priate changes are made before the ·
                 pated that Resource Conservation         were listed on the NPL and another           agreement goes into effect. Revi-
                 and Recovery Act (RCRA) correc-          46 were on the proposed list. By             sions to four i [AGs were made in
                 tive action permits will continue to     the end of FY 90, 89 DoD instal-             FY 90 in reSponse to comments
                 increase the number of IRP sites as      lations were listed on the NPL and            received from' the public.
                 these permits are issued to DoD          none remained on the proposed list.
                 installations.                           (Because EPA has divided 6 of                    The Department recognizes the
                                                          these installations into 2 NPL list-         advantages ot involving all panies                                '
                                                                                                                                                                    '
lnslallatlons                                             ings each, 95 DoD installation               well before the lAG is requin!d
                                                          listings appear on the NPL)                  (i.e., before the ROD). Accordingly,
                                                                                                                             '

                                                                                                       DoD has involved EPA and the
                                                                                                       states in the IRP process from early
                                                                                                       assessment and characterization
                                                            lAGs Are A Critical                        through fina( cleanup of the site.
                                                            Step in the Cleanup                        The Departmt;nt seeks a cooperative
                                                                                                       and collaborhtive ongoing effort
                                                            of NPL Sites                               with all parties to avoid discovering
                                                                                                       problt:ms late in the process that
                                                                                                       could result in costly dclays. The
                                                               SARA requires that an Inter-
                                                                                                       early est.ablishment of goOO work- ·
                                                            agency    Agreement (lAG) be
        86          87            88     89                                                            tng relation~hips also resolves
                                                            reached between EPA and DoD
                            Ascal Year                                                                 potcntiJ.lly duplicative anJ possihly
                                                          · within 180 days after completion of
                                                            the Record of Decision (ROD) for           conflicting regulatory rcquircrnc..·nts
                                                                                                       govcn11ng cleanup. such as th1lSL"
                                                            each NPL-Iisted facility. The ROD.  I       that \loo,.'L·ur t"X:twccn C:ER.CL:\ and
  ·'
Sites                                                       a public document explaining wh1ch
                                                            cleanup alternatives will be used at        RCR.-\             '


                                                            an installation. marl:.s the c6mple·
                                                            tion of the Rl/FS. The completed
                                                            lAG provides J dct:1ilt:d rnanJ~t:·
                                                            ment plan for the effcL'IIVC dc.U1up
                                                            of the LKility.
 ~i 110000'- - - -
  ~
  e
 1I
   !

                                                                                                                                                                 ,_ ..
                                                                                                                                                    ·'   .. ~
                                                                                                                                                         I   llf,

                                                                                                                                                         j .. '
                                                                                                                                                         I ..
                                                                                                                                                   _·-j-~
                                                                                     !11   1:y S'J. ]lt,] > l'tltnpktl·d dn ,·1          rnhllrnatron fr11 l'tllll:llrlltl:llll dr.II.H ·
                                                                                 IIPilll'lll   ol   till·   Dl',\1. l )ol) "olrci!l'd    tcristKs cont;tirh.:d rn the 1>1'\1
                                                                                 nmlmcnts fronr El'A, till· st;~ll's.                    chcmicrls data ha:--c w;1." upd:1h:d.
                                                                                 cnvironment:d organiz:llinns. ;md                       This updatt.: w;rs conductt.:d ill coop-
   The onkr in which DoD cnn-                                                    thc puhlic. In rt.:sponse to con11ncnts                 eration with EPA to ensure corl:--1'\-
ducts JR. I' project ;u.:tivities is based                                       r~.:c~.:ived. the model was refined. In                 tency in methods. The DI'M <bt:r
on a policy assigning the highest                                                addition. the model has hcen auto·                      h:1w currently cnnt;1ins tnorl" th;lrt
priorities to sites that represent the                                           mated to facilitate scoring.                            2XO ch~.:micab. including. cxplosrves
greatest potential public health :.tnd                                                                                                   and radiologi<..:als. Other improve-
environnH.:nt;.d hazari.ls. Top priority                                            DoD component personnel have                         ments to DPM include claritication
is assigned to:                                                                  heen trained in the usc of DPM and                      or tcnns and increased user friendli-
                                                                                 have scored more than 250 sites                          ness of the automated version.
    Removal of imminent thre<lts                                                 where RD/RA activities could be
    from hazardous or toxic sub-                                                 initiated in FY 90. In this first year                      In the summer of 19()0, scoring
    stances or unexploded ordnance                                               of implementation. scoring 'results                     was accomplished for nearly 300
    (UXO)                                                                        were used primarily to identify                         sites where RD!RA work could tx:
                                                                                 scoring difficulties and gauge model                    initiated m FY 91. A quality
     Interim and stabilization mea-                                              pcrfonnance.                                            assurance review indicated that sit~.:
     sures to prevent site deterioriz..a-                                                                                                scores were more reliable th:ln last
     tion and achieve life cycle cost                                                 In preparation for the FY 91                       year due to increased experience
     savmgs                                                                       program sconng effon. funhcr                           with the model and improved
                                                                                  improvements were made to DPM.                         scoring guidance. Confidence is
     Rl/FSs at sites either listed or                                             Most significantly. the methodology                    expected to increase each year the
     proposed for the NPL and RD/                                                 used to calculate toxicity of con-                     model is applied.
     RAs necessary to comply with                                                 taminants was changed to renect
     SARA.                                                                        more accurately actual toxicity d~lta.                    The Depanment has a continuing
                                                                                  Previously, surrogate values were                      dialogue with EPA and st~Hes on
    Anticipating the need i.O refine                                              calculated relative to the chemical                     DPM. During FY 91, DoD intends
 priorities as the DERP matures and                                               hcnzo(a)pyrene.                In   addition,    all    lO continue to improve DPM and
 a large number of sites simultane-                                                                                                       procct:d with full implementation.
 ously reach the costly cleanup
 phase, DoD dcvclopcd the Defense
 Priority Model (DPM). The DPM
 uses Rl data to produce a score
 indicating the relative risk to hum:.m
 health and the environment prc-
 scntcd by a site. The model
 considers     the    fnllowing     site
 characteristics:

         H:u.ard - the characteristics and
         c<mccntratii)J\S of cont;Jminants




          R.c..:L'I'!<ll                 thl·          pn:-..,·n-.:l·      of
          I'' >It'll[ 1;1l    I ,.,.l'l •[, >I'



  t'ln"      r~-..1-.. l'.I"~·,J.q'llft•,l,             h ll·,·,,;:rll/l"•
  till·    lllll'"rt.l!l• ,. •d             l'r·•!<'. trro:• l'llblr,
  h,·,rltll        .1:\1~      ill'       t'll\    ll<'lltl:,·tli       .1!1<1
  1!,·11' . · d' ., .. ; I','.~       . : · !. ·! 1:        :1< •
                                                            :           .1:;'

  i'l,          .i: .... :.                             . ·····:t.        1···




                                                                                                                                                                 •• ,. :;:tl'•'"',•
   Installation Restoration
   Program Status

   i]     he lnstai!Jtion Restoration Program gained significant momentum in FY 90. By the end
          of the fiscal year. R.689 projects were actively underway at sites throughout the nation.
          In keeping with the Department's worst-first policy. considerable effort has been focused
   on the 89 DoD installations included on the NPL. Sixty-eight of the 296 remedial activities
   implemented to date (removal actions, Interim Remedial Actions. and final Remedial Actions)
   have been at NPL sites.




    IRP     Status by Program Phase               The end point for IRP sites is         must be documented and may be
                                               closeout. A closed out site is one        reversed if future information
                                               where no further actions arc con-         reveals that additional remedial
COMPLETE 16.Tr'S                               sidered appropriate and no further        activities are warranted.
UNDERWAY            658                        response action 1s p!J.nned
RJTURE               48                        (NFRAP). NFRAP is a relatively              This year marks the initiation
                                               new Superfund Program term th.::u         of NFRAP as an indicator of IRP
                                    PA         w:1s incorpor:.~ted into tht.: i\CP       progress. At the end of FY 90.
                                               final ruk in March \990. The              6.36\ sites. or more than 36 per-
                                               primary criteria for NFRAP is a           cent. were in the NFRAP cate-
COI.IPLETE         9.625                       determination that the sitt.: docs        gory. Closing out these sites h:1s
UNOER\'IAY         1.263                       not pose a signific:.uu thrt.:at to       rcquire!d considerabk: resource
FUTURE               935 ----lf-•              public health or the environmcn!.         c.'<.pcnditures and represents sig-
                                               NFRAP decisions ::an he made :ll          nificant real progrt:ss in the: IRP.
                                    Sl         any point in the IRP process. hu!

CC~.1PLE1C           9i G
UNDERWAY           .!,Si 1
rJTUr.::           1.5-!o                           Installation Restoration Program
                                                    Summary of Installations and Sites
                                                                         Number ol          Number of            Siles Requiring
                                                     Service            Installations         Sit4~S            No Furthef Action
                                         \
...' ·t:,... . .
' . , .-., ....
                                         ,,'         Army                  1,266             10.~59                    5.036

                                                     N,1vy                   ?<0
                                                                             ~··~
                                                                                              2.253                      775
                                    AD

                                                     A.r    r:l,fo"••        .'1 ~ : \        ~:513                      -1~8



                                                     ~ ~l   .,                                    :-=s:-                    ..
                                                                                               .. .:   .~. -~
                                                                                                                                                lAG Status at
                                                      '
                                                      f
                                                                      ~-y
                                                                      ··-_,-A--·
                                                                                                                                             NPL Installations,
                                                      \.'-..                 /)'
                                                          '~--
   In Jun~ J')XX. the Department                                   1988
completed negotiatiOn of lAG


                                                      (~--;~
model language for N PL sites with
EPA. The Office of the Deputy                                                                            -             S<)ned lAGs
Assistant Secretary of Defense
(Environment) (0DASD(E)) subse-                                                                          -             lAGs Near Completion
                                                                   1989
4UC:ntly issued guidance to the com-
ponents concerning the state role in
                                                                                                         c==J !AG Negot1J!10ns Underway
                                                                                       Si
the lAG process. Nationwide. the                                                       18                c=J NoAdiOn
negotiations simultaneously acceler-                                                   13
ated. Workshops were held with                                                          7
EPA and state agencies to refine                                   t990
site-specific language for the agree-
ments. Training sessions for DoD
personnel who will negotiate agree-         percent of the Defense Environ-                          (USACE). has been designated as
ments also were held.                       mental      Restoration   Account                        the DoD Executive Agent for
                                            (DERA) costs was developed. This                         receiving, processing, and moni-
   Negotiations with state agencies         procedure was developed through                          toring CA applications. Each CA
revealed concerns, especially re-           lengthy negotiations between DoD                         covers a 2-year period.
garding funding and jurisdictional          and the Association of State and
matters of RCRA versus CERCLA.              Territorial Solid Waste Management                          TheCA provides funding at both
These and other issues are con-             officials. the National Governors'                       the NPL and non-NPL sites within
tinually being discussed to settle          Association, and the National Asso-                      a state. The states' reporting re-
such difficulties.                          ciation of Attorneys General. Cur-                       quirements are minimal and allow
                                            rently, only active DERP sites are                       them to transfer their oversight
   The progress already made is             eligible under this program.                             funding between installations. Pa..o;;t
evident from the number of lAGs                                                                      costs incurred after October 17.
signed and nearing completion. By                These negotiations resulted in the                   19R6 (the date SARA was enacted)
the end of FY 89. 19 lAGs had               tkvelopment of a model Defense                           also arc cov~red in the CA. Cur-
been signed for DoD installations           and State Memorandum of Agree-                           rently. past costs at non-NPL sites
proposed and final-listed on the            ment (DSMOA) (54 FR 31358. July                          only can be reimbursed through the
NPL. Bv the end of FY 90. 51                ~S. J9S'I). The DSMOA not only                           CA.
1:\Gs h;J ht:en signed covering             addresses state agency support at
DoD NPL installations. In addition.         NPL sites. but also outlines the pro-                        All states and territories havt'
anotht:r 3 I lAGs were unden...·J.y.        cess t'tlr work at non-NPL sites.                        been contacted and encouraged to
Of these. I:-\ lr\Gs were fli..::lr         Alon~ with non-NPL reiml'1urse-                          rarticipatc in the OS~10.-\ pro~css
compktinn. Tnt:li IRP costs ;Jssu-          rnL'nt. the DS~10:\ prnviJcs :..a pro-                   FavorJ.blc responses h~IVL' hccn
ciated WLth signed 1:\Cs is 53.27           cess t'tlf DolJ ~mJ the stah.:s to                       rccl"ived from more than -10 stalL'S
hillion. These costs include past           resolve technical disputes before                        ;u1t1 territories. DoD Sl~ned I~
IRP costs along with future bud-            judicial remedies J.re sought. The                       DSMOAs and II CA..., 1n FY qn.
getary cstimJ.tcs for continued in-         dispute resolution process is ne(eS-                     tntalin!_! S7.5 milium.
vf.!stigatinn and de:.mup nf the sites      sarv. :1..; most nllll·SPL v.nrk ..;hnuld
at inst:Jil.HitHlS v. hoc :m 1:\(; ~~;,._    n•1t rt·qturc ;1n; ,,,n ()f 11'rm.il                            The progn:s:-.            llt:ldl' 111   f·Y   'l() 111
tx:er\ fin.iiLtnl.                                                                                   prt:p.uHl}! DSMO:\-. and ( ·.-\~ n.:prc-
                                             .1)-.:fl'CIIU:flt IP ,\l.,'>lfll\'11'-h ..:lculllj''-
                                             J'!Jc  llS\1()..\ .d"'' 1!1\-huk..; pr•'                'cnh '-L.~n!llc;ul( adncvt:mcnl'- th.11
                                            'l'-l•>rh   rt·rk, till~ !ht· \~ dlln;.::ll''-'- ·d      \~ Lll t:nh.m(t.' l'l"''lx·r;lllt'll .1111•'11~
                                            :;,,. ·,J.,~t· t" ·", :·;'' ;:\\· I >l'\1 ·''·           I ,,.J). Fl'·\. ,11\,J ·-t.11t· .nlth·•rlll<"'
                                            J ),   d ) ',   IIH'!I\1 ~ \ •                            I'! it' ,·._t.d•li'-hll\t'lli "! \:\1; I . \ ,,,,!
                                                                                                     I 1'.\11 ).\           lllt~k!·   .II!.:,;,,.,    1:111:1.' •• :
                                                                                                     !   h   ,j)   .Llltf    '-:.11'   ;"·; • •!Ill
                                                                                                         •. \ ,·], '!'rllt"ll:         !.
                   100
                                     89
                                                                             •   FY


              ~
                   80
              c
              -~


              "
              ~
              -;;; 60
              -=                                                                            gains in th   1:                luatiqn and
I


I
    !
    !         .
              0
              .0
              E
                   40
                                                                                            up of NPL l;''ites _in FY 90., Com'
                                                                                            pleted PA acttvtues <J.t l1sted NPl!.
                                                                                            installation~ increased from·&~- r6
    I
    I
              "
              z

                    20
                                                                                            89, while the number of Rl/li:Ss•.
                                                                                                         I
                                                                                            underway increased from 47_·to . ,
                                                                                                                              .

                                                                                            81. Further,l· the number of instal1;-:~"
                                                                                            lations at w'hich IRAs were·raR'e;t~
                     0
                                                                                                               1.

                                                                                            increased f,rfm 30 to 68 in.FY                            rt:
                                                                                                                                                      •      i




                                                                                                FY 90 al~o saw the comp1et},<?.".:·;
            Restoration Progress at DoD NPL Installations as of September 30, 1990          of RODs at the following•'l':wL!
                                                                                            installationJ: Tinker Air Foice!
                                                                                            Base (AFB)I in Oklahoma, Qgden
                                                                                                                    1




               By the end of FY 90. PAs had                At the end of FY 90. '4,059      Defense Depot in. Utah: W)Cst
            been completed at I 6,776 of the           remedial activities were knOwn to    Virginia O~dnance Works;-~ aGnd 1 •
            17,482 identified IRP sites. Sis           be nec:ded at lRP sites. Of these.
                                                                                      1
                                                                                                                    I
                                                                                            For~ Lewis in Washing~on: ~(:A;
            had been completed at 9.625 of             21.Jb had been completed and         ROD had been completed1 fo"r ..., '-_
                                                                                                      i               -
                                                                                                                          fhe;
        i   these sites. R:c::ed on PA/SI work         I, 191 were underway. During         Concord Na,va\ Weapons Sta!i~~n\
            completed to date, approximately           FY 90, 428 remedial activ-Ities      in FY 89; hOwever, this instaWll-r,

        I
        I
            65 percent of the Department's
            sites have been found to require
            further investigation in the RI/FS
                                                        were undertaken at 238 in~talla·
                                                        tions. The number of actiOns is
                                                       greater than the number of instal-
                                                                                            tion was re~oved from rhe p;·9~ ·
                                                                                            posed NPL i                 n FY 90). This prqg:''"'.
                                                                                                                        1




                                                                                            ress. renec~s) the .e~phasisf .B~ot~~ f ,'
            phase.                                     lations. as more than one r).pe of   places on h1gh-pno[1ty IRP S)tes. i\
                                                                                                                                          .:.t_;l'-
                                                       action was taken at some Or the
                                                                                                      '                 I       .     .


               By the end of FY 90. R 1/FS             installations.
            efforts had been completed at 916
            of the sites rc:4uiring such inves-
            tigations. RI/FS activities :.HI.!
            either complete or undcrwJ.y at 7X
            pcrL·~~nt of the sites whuc they Ht;
            nccJ::J. ,\ signific:.tnt incn:ast.' in
            compktions is t.:\pectcd durin~                                                                                                               ·-- '
                                                                                                                                                                      to: .
                                                                                                                                                                       t

            FY •J I.




                                                                                                                                                           ... ':




                                                                                                                                                           ,,~



                                                                                                                                                             ,,
                                                                                                                                                                        i
                                                                                                                                                                        I

                                                                                                                                                            '!!




                                                                                                                                                                 ;

                                                                                                                                                                 !.
   In split: ol tltc 1-'Y 1JO pn~.~rc~'
registered in ;Ill ph;t.,c:-. qf till·                                   .Summary of FY g·o Re:ft;.dial :Activities . ·
IRP. the number of completed                                             Summary f~r all lAP Installations
                                                                                  .                 . .
RI/FS ~1nd RD/RA aclivilies re-
ported is lower th;111 in FY X1J.                                                                                                                     Number of                           Number of
This is not indicative of lo'\t                                          Type of Activity                                                             Activities                          Installations
ground. hut of improved lr;td.:in~
                                                                         Alternate Water
of actual site progress and !he
resulling reclassification of sev-
                                                                         Supply/Treatment                                                                  14                                   11
eral sites.
                                                                         Incineration                                                                       6                                     3
   A centralized IRP s\atus !rack-
ing system was aJopted by all                                            Site Treatment/
Department components in FY 89.                                          Remediation                                                                      103                                   52
The accompanying rc-cvalualion
of project status conducted over
                                                                         Decontamination                                                                   56                                   32
the last 2 years used more strin-
gent criteria for delerm ini ng when
a program phase is complete. This                                        Waste Removal                                                                    201                                  108
resulted in several sites being
removed from complete status
                                                                         Ground Water
and rccategorized as underway or
awaiting further action.
                                                                         Treatment                                                                         48                                   32

                                                                         TOTAL                                                                            428                                  238

                                                                         Status as of September 30. 1990.




   Installation Restoration Program Status as of September 30, 1990
   Summary by Military Service                                                                   .                                        .           _
                                                                                                         Number of Sites                  (b~   Phase)
                                      PA                                       Sl                                 RI/FS                                                    AD                                 AA
                          c                u      F                  c              u             F              c              u             F             c              u          F          c            u          F
  Army              10.~47                  5     7        4.469                154              745            301           971             730          134           269         415       135          276         409

  Navy                  2.222              28     3            1.579            543               64              51          750             531                  8       20      1.051         31            50     1.03~



  Air Force             3.850          625      38         3,320                566              126            557 2.650                     275          116           77J         999       127          862         98J


  DLA                      251              0     0                  257                0            0               7         140                J                3           3       4).:       3               3       :-s

  Tot3l:;           16. ii"6           ·J)S     -18.           9.625         1.2>33              935            9!6       4,51 1          1.5-:'           . ."i   ~   l . Otl~i   2.55::!      205       I . 1 ~11   2.5:-.:
  c   ~ Corllpl·~l>:d   J\,·:r••r!,    •        I!:·> ......         flc:r·.-r:·o   •
                                                                                            ,.    ; ~ J\ t: r , • ,\c:r·.-rty f)l:l ::.
                                            "                  ).,
    !
        '
        r
        I       IJoiJ   .w;t, nol  tL"'-111'1\.-..thk !'or till'   :\lk,!;t:d   Vtnbtt~JII   :tn•l   f )rd.:r   i   111   V\fCJI\11\I.:Il!;d
                                                                                                                                            1
                                                                                                                                               ,\·b!J;J~CIIll'lll propns~.:d
                                                                                                                                                                      1
                                                                                                                                                                               #:
                                                                   US:\CE ;uHI tl11._· Hun::Ht ,,r Uutd                   n.:flltlvinc conla inin;!lcd stJil dowrd'' ' ,.
                                                                                                                                      ~
                cont;uttin:tlll'il of the <;it..:. r\notht:r                                                                                       II   •   .            '-- ·. ,' '

                                                                   r-..bnagcmcnl. lJS:\CL rcrnovcd                        to the water tatilc. llnmg the holes                       ··
        I
                sill:, We_,,       Yirgini;t Ordnanct.:
                                                                   mon: than 400 canist~.:rs from jth~.:                  with polycthyle flC, anJ
                                                                                                                                                   1

                                                                                                                                                                bac~filling t             :
                Works. is an tnactivc site th<ll is                                                                       with clean mat~rial.                        ( '-;\,~',
I

                                                                   JO~foot deep mine shaft. Hecausc of
        I       being rcmcJiatcd as ;m 3Ctive .site.                                                                                              '                            #..
        I          In FY 90, $5X.6 million was
                                                                   the mine shaft's instability. it Was
                                                                                                -    I
                                                                   unsa f e to enter an d a I rreman s
                                                                                                       •                     The Stale li of Rhode                 .
                                                                   hook had to be used to remove). the                    accepted a US"\CE cou~ter prqpo,s- ·
                spent on activities at fonner sites.
                                                                   canisters. The age of the canisters                    al. which resulted ih-' an RA con~·
                The following are examples of
                                                                    and the corrosive nature of'i the                     sisting of backfilling the holes\Vi'ihi
                work undertaken by USACE at
                                                                    chemicals made it necessary to                        the contaminarJd soil. perfonning al
                formerly used properties in FY 90.
                                                                    repackage all canisters prior to                      soil gas analy~is supplemented by~.
                                                                    transportation and disposal. Ne~oti~                  monitoring wei_!:;, and, as necessary.;
                                                                                                                          installing ski mining wells tO.recove6~.
                 Removal Action at                                  ations with the State of Nevada are
                                                                    ongoing to determine if fuhher                        free product i~ the ground w~te'r~·
               · Pine Grove Flats, NV                                response activities are required.
                                                                                                                I
                                                                                                                           An RVFS will be conducted to
                                                                                                                          determine the I! extent of.: enVi.'rqry~~· ·
                                                                                                                           mental contamination and the rieed
                                                                                                                           for long~term ~:mediati~~:·
                    An old mine shaft in a remote
                 part of Nevada was found to con-
                                                                      Tank Removal at
                 tain metal canisters of chemicals.                   Quonset Point, Rl                                         These negoiiations were initiated·
                 The party that illegally dumped the                                                                        by USACE. rJsuhing in a sut>stan.,:
                 canisters· re""'ains unidentified and                                                          I           tial savings bf $500.000 -to '
                                                                        During the winter of 1989-90.
                 no component of DoD ever owned                                                                             government, .J,.hile achieving '· vu"•·.t:
                 the property. However, labels on                    113 underground fuel storage tanks                     pliance with I· regulal':H)' ~-equ.ifei~' 1
                 the canisters indicated that they                   were removed from the site. D~ring                     ments and maintaining good re13j. 1
                 were once Army property produced                    the removal operation. a significant                   tions with the ~State' of Rhode Island .
                                                                     amount of soil and ground Water                                       I'                     '"
                 prior to 1966 for deactivating chem-                                                                                                              t :':,,
                 ical warfare agents. After the State                contamination was encountered. The
                                                                     Rhode Island Department of En-
                                                                                                                             regulatory agencies.
                                                                                                                                                                               . -'l't .'
                                                                                                                                                                               -          ,·''   ·''
                  of Nevada issued a Finding of


                                                                                                                                                                         .•




        I
        j, J
Formerly Used
Defense Sites

[j     he Secretary of the Army is the DoD Executive Agent for the implementation of DERP
       at Formerly Used Defense Sites (FUDS). As Executive Agent, the Anny is responsible
       for environmental restoration activities under DERP on lands formerly owned or used by
any DoD components. The U.S. Army Corps of Engineers (USACE) is responsible for executing
the FUDS program. Investigation and cleanup procedures at formerly used sites are similar to
those at currently owned installations. However, information concerning the origin of the
contamination, land transfer information, and current ownership must be evaluated before DoD
considers a site eligible for restoration.



   A total of 6. 980 FU DS with                                                  and explosive waste (OEW) from                               Status of Activities at
potential for inclusion in the pro-                                              former target ranges or impact                             Formerly Used Properties
gram have been identified through                                                areas. Prior to FY 88. 94 BDDR
inventory effons. By the end of FY                                               projects involving unsafe buildings
90. PAs had been initiated at 3.830                                              or structures on formerly owned or
of the sites. of which 1.461 were                                                used properties were completed. No
underway and 2,369 were com-                                                     BDDR projects have been con·                                                  1.461 UNOERV.'.'.··
pleted. Based on the completed                                                   dueled during the last 2 years.
PAs. it was determined that 1.588
sites were eligible and 781 sites                                                    USACE also represents DoD                                  PA Sites
were ineligible for the FUDS pro·                                                interests at NPL sites where former
gram. Of the eligible sites. 308                                                 properties are located and where
require no further action. but each                                              DoD may be a Potentially Respon-
of the other 1,280 sites requires one                                            sible Party (PRP). Former proper·
or more rcmt:dial/rcmoval projects.                                              tics th:..lt have passed from DoD                                               122   u~.o::.::·::   .. ·
Sis had been completed for 110                                                   control may have been contami·
 projects and were undef\.l.·:..~y for an-                                       natc:d by pa!-;t DoD operations as
other 12'2 projects as of the end of                                             well as by other owners, making                                51 Projects
 FY 90.                                                                          DoD one of seve: raJ PRPs. Ongoing
                                                                                 US:\CE efforts will detcrmin<.: the
    DoD has already funded 6!N                                                   allix:atlorl, if any. of DoD cleanup
propcnics for funha invcsug:uion                                                  rcs~msibility. US ACE :~!so cnor<=r·
and remedi:.tl action. Tilt:'\t' :1ctivitics                                      Jtcs wtth EPA. stJtc. Jnd otha PRP
indude -1)0 prnjel'IS :uldn::..;smg h:11.·                                       n.."JHl'St:lli;I[IVCS          [ll   f.il:dll:llc   lht•
.trdPu..; nr [~l\t\' w.t:-ll' ;liT\\' I ,,:nn                                    \:ic;Hlllfl   jlfiH,,.'l'v.:
Ltrntn.lltPil fr~•nt                    fpniJl·:l-. ll',l·d              tilt
•kl::r~•und                  '.[<~r.t~:,·       lt;··l      Ltlt\t..•,     ('i         \1 :j,,·,·tlll o•l I·Y ·'1'. 1: 1·\ j)\
i.tt~<trtll· . . trtol                l,·.t\t..tH~:      :'·•1:.,:1\:,,::        '.\t'r<' !t .[ ·,J <'t: :It,· '.I'! I I I ! · :i•'
  . I'   ·,I : ... : •i •.   :I·.   ! I 1'1 . H . . . . ''.,:: ,, .                                            :• ... :   ....
                                                                                                        '".
                                                                                                        '
                                                                                                                                                                                                                             ''




                               Army IRP Progress

        ij      he most significant IRP growth among DoD components in FY 90 occurred in the Army's
                program. This growth was the result of aggressive action taken by the Army to evaluate
                all installations and Army reserve centers. The number of sites included in the Army IRP
        increased from 8,642 in FY 89 to 10,459 in FY 90. IRP activities have been completed and no
        further remedial action is planned at 5,036 Army sites, or almost one-half of the sites in the
        program.



                                                                                                                                                tions, bringing the total number of
                                                                                                                                                Anny NPL installations covered by
                                                                                                                                                lAGs to 23. RifFS activities arc
             Assistant Secretary of the Army,
                                                                                                                                                underway at 28 of the Army's NPL
         ~nstallations, Logistics & Environment)
                                                                                                                                                facilities. Removal actions and
                                    I                                                                                                           IRAs have occurred at 30 Army
                                                                                                                                                NPL facilities.
        Deputy Assistant Secretary of the Army,
      (Environment, Safety & Occupational Health)
                                                                                                                                                    The following are examples of
                                    I                                                                                                           significant Army IRP project activi·
                                                                                                                                                ties conducted in FY 90.



                                                                                                                                                  Landfill Closure at                                                   i'
                                                                                                                                                  Iowa Army
                                                                                     Key to IRP Ae:sponsJbili1es:
                                                                                                                                                  Ammunition Plant, iA
                                                                                   0         Policy promulgation
                                                                                   tc=lo......
                                                                                   L2...:.:..J •• ~ram management                                      In Augu"t 1990, the Army com-

                  ;'~o:.    installations                            I             I ':e'<·l Progr.un implementation                            pktt.:J tht: t:xc:..~v:llion of 3.500 cuhi~.:
                                                                                                                                                y:1rd" of k:Jd-coHll:unin:llt.:d sod~
                  ~ronmental            Coordinator)             :                 ~~~·1 Techntcal support
                                                                                                                                                :tnd thl' com.tructHHl nf ~ 15.000-
                                                                                                                                                I.."Uht~.: ~ :Hd Cl:ty C:tp on thl' i:JnJtiJJ.
                                                                                                                                                 J'hl..'·< .Jl.'\tllrlS \'-t.'rl.." JX'rftlnllt:tl untkr
Army lAP Organization
                                                                                                                                                .1     k('l\:\ Ll1hlHL' pl:m th.11 w;1"
                                                                                                                                                ·li'J'I•'\~·.! h\          E!':\ II\      s.  ;ptt:llli""L'r

             By    tlh: t'!ll! PI       i·l     1':\ \\Of~
                                              ()I)_                      lln\,r.:\t:r. !he nurlll"l·r "'·,tit'' ·.,her··                         !•!;...,,-. !"h~.· dr,••."~>\cr~ •ll .!lldt!H•n:li
                                                                                                                                                l.'<llli.t:tlli\.1\L'd   '-o'd'-   ll''!Uiflll;:     (\<.:,t
         h.1d l"'o.'t'll <PJllJ 1 it'!::d .I( .LIJ htl! J ~              !\1/FS           \\olf~        \'>   undcr·.,,r-..   Pr     ,<~lOr
                                                                                                                                                '.,111·"1   '1.11! tkl.t\~·.j 1.'\]Pih         (<>   <•'Ill
         ·\r:rl'. 11\!' ,rtt·· .r:1.l \I ..,.,r\.. h.t.l                                                                          it•r,   II\

                                                                         I    'r     .,,, I• •      1.. •
                                                                                                                                                                                                     ,,· ...
         . , :···:. ,·r::                         •,!,                       ·:.1 .. : I 'r         '>~'                 . !, •

                                                I·       .·,t:                                                 t'.

                               !'!:                                          \: I:       j i.": '



                                                                                         '   .
             '!




                                                                                                                                                                                                               _t_ __
. Raplcf Resp~nse at··. · : ROD. at Hastings. ... ;
 Valley. Forge General                     East Industrial Park, ·
 Hospital, PA          ·                   NE
    In May 19{}0. the presence of             In September I ~90, USACE
 pesticides and herbicides was dis-       achieved a major milestone when a
 covered by property owners in an         ROD was signed to allow the offi-
 unused part of the hospital complex.     cial cleanup of the contaminated
 One month later, the US ACE Rapid        soil operable unit at thc Hastings
 Response Team overpacked, trans-         East Industrial Park, formerly the
 poned, and disposed of approxi-          Blaine Naval Ammunition Dcpol. In
 mately I 0 drums of hazardous            1991, USACE will prepare engi-
 chemical waste. The Team was able        neering design documents for incin-
 to perform a quick removal of the        eration of explosives-contaminated
 chemicals. Local residents were          soils.
 pleased with DoD's concern for
 public health and the environment.


 Removal Action at
 Port Heiden, 'AK
    More than 8,000 drums and sev-
 eral large-capacity above ground
 a:nd underground fuel tanks were
 abandoned at Pon Heiden Radio                                                  Extensive investigations at Hastings East Industrial
 Relay Site by the Army and the Air                                             Parle culminated in the FY 90 signing of a ROD lor
 Force after World War II. The                                                  the cleanup of this FUDS.
 remote location of the site required
 large-scale      mobilization   usmg
 barges for equipment and living
 quaners before the RA began in the
 summer of 1990. HTW as well as
 other regulated materials were
 removed from the site and trans-
 paned to approved disposal facili-
 ties in the continental United States.
  Unregulated wastes v.:crc recycled,
 to the e'(tt:nl prJctical, incinerated
  onsitc. nr huricd in lncal approved
  landfills. The rcmnval action w:1s
  successfully cornpkiL'd t".:forc the
  winte-r sc-:1son i"'L'~:Hl.
                                                                                                                                                                           ,·"),.:
                                                                                                                                                                           '
                                                                                                                                                                                    ,.
                                      Navy IRP Progress

            [i     he number of Navy sites included in the IRP increased slightly in FY 90. An additional.
                    222 Navy sites were added to the IRP last year, bringing the total to 2,253 sites at
                    242 installations. IRP activities have been completed at 775 sites, or 34 percent of the
            sites m the Navy program.




                                                                                                                                    The following are examples of·
                                                                                                                                  significant Navy IRP project activ-
                                                    Assistant Secretary of the Navy                                               ities conduCted in FY 90.
                                                     nnstallations & Environment)

                                                                                                                                   Cleanup Agreement
              Chief of Naval Operations
         (Environmental Protection, Safety &
                                                                            Commandant of the Marine Corps                         for Camp Pendleton,
                                                                            (Environmental Quality Program)
            Occupational Health Division)                                                                                          CA               -.. ,
                                                                                                                                     In October 1990, an agreemenl
                                                                                                                                  was signe.d by federal, state, and
                                                                                                                                  military 'officials to clean up haz-
                                                                                                                                  ardous ~·aste at Camp Pendleton.
                                                                                                                                  This marks the first cleanup· agree-
                                                                                                                                  ment in EPA's western regioh. ·· ·i
                                                                                                                                  CleanuH work will incJu(je · th~e1
            Key to IRP Responsibiiiti=                                                                                            removal of contaminated ~aterial
           [=:::J Polky promulgation                                                                                              from the Marine Corps ba.s'e.· .1
           I' ,. ~ I Pro<Jr.!m management                                                                                         major toxic site and the last large
                                                                                                                                  undeveloped coastal propcn·y in        . it
           I.e~    .1 Pro<Jr.!m mplementl1ion                                                                                                                             ,.   .~
                                                                                                                                  Southern California. Field invcs·
        "Technical support provided by EFOs                                                                                       ligations identified scver:.tl con·
                                                                                                                                  t:J.min3.nts. including spent oils.
                                                                                                                                  solvents, pcsti~idcs, met:Jls. :md
    Navy lAP Organization                                                                                                         PCBs,' :11 22 areas throughnut the
                  P:\ curnrktions at Navy sit~:-.                                                                                  125.0CO-:..~crc hasc. C!c:.mup cnsb
                                                                                1.-\G..; wt::rl" st~ncd L·nvcrin~ tivt'
             tfll.:rt·ast·d from I .9~0 to 2.222                            of  tht: :\.1v;. ·~ SPL Llht;LlbtHllh tn              ~urrentl;. :1re estimated :ll S~•i.~
                                                                                                                                  m i I! t\.)/1
             ,\unn:-: 1:y          \l()    and Sl work was                  FY 1)0. hrtn~tn.; thl' h\l.d numtx·r nf
             ll>lllpktc.l .11 1.57<) sites J.s of !he                       Savy ~Pl. lrl'l.di:J!llll\'• l'llVL':"t:d h;.
             <'thl ,,f tlw (i..,\::tl ye:.H. The numhcr                     \:\(;.., ]1\ t.:'l~ht St... h:tVl' h·t:l"ll (11111

             ••!    ·.t:;.·,   .tl '.~htLh     R.\/J.'S   Wt\f\.;    W:tS   pktcd .11 ~~~ o1! !IlL' ~;L\''> ·.., h-.,tnt
              .•'i:q·k:,·.! :lldl'.ht'<l ~r • .,n 10111 "1                  'l'l ltl,t.di.tt!••tl' I{LFS .l(!l\111l'·,
'
I                      • 1:1 ! 1 11 11         \r ~:tl· end ,>f !lh·

I             : 1 ., ,II        ·,:'.11

                   ' : , ' I !II<
                                        !•:\1 "•'"1\., h.lo~ l•<"l'll
                                             -~i     ·.·.!:I k ; : l\ ·\     !l-:                                      '   ., .
                                                                                                                            ''!

                                          . , ...                   ·...



                                                                                                                                                                         k:.
·~·..: ..      ·.,,, ... ,-:                 ·     -~·-1•'·   1c· .;. • ·            ·•

 ~::Cleanup· Agreement .-·                                                                            "There is an unabashed willingness to comply with
  . Signed at APG                                                                                     environmental regulations at APG."

           In March I t)t)(), the Anny ;md                                                     ._,.   .:_:·-~.-~;.< -~:   .........   Senator Barbara Mikulski, Maryland
        EPA sig.nL'd ~HI agrcL'tllL'IIt to clean                                                               ···,·                                                            ..·
        up two Sllpt.:rfund sites ;1! Ahcrdct:n
       Proving Ground. One of the sites.
       the Edgewood Area. was used for
       testing and disposal of chemical and                                                    Incineration of                                    Ground Water
       conventional munition:; since 1918.                                                     Contaminated Soils                                 Cleanup at
       The agreement sets schedules,
       assigns responsibilitil!s and provides                                                  at Louisiana AAP                                   Sharpe Depot, CA
       for cooperation and consult:uion
       with all involved agencies.                                                               In March 1990. the Anny com-                       Sharpe Depot is using exlraction
                                                                                              pleted the incineration of I 02.000                wells to withdraw contaminated
                                                                                              tons of explosives-contaminated                    ground water and air stripping
       ANAD Ground Water                                                                      soils. Revised exc:1vation criteria                towers to remove volatile organics
                                                                                              were approved by the State of                      from the water. Past practices
       Cleanup, AL                                                                            Louisiana and EPA. allowing sh3l·                  involved discharging treated wa1er
                                                                                              low excavation of the soils from the               to a Gmal. However, in September
           A series of ground water pump-                                                     Area P lagoons in lieu of deep                     1990, the Army began sending the
        oul systems have bt:en installed to                                                   c.xc:1vation. Because of the high                  cleaned water to a nearby pmver
        control ground water contamination                                                    concentrations of explosives in the                plant for u.se in steam gcncr:::~tion.
        at the Anniston Army Depot                                                            shallow soils, these revised criteria              This practice has significantly
        (ANAD) Alabama. Volatile organic                                                      were estimated to achieve greater                  reduced problems associated with
        compounds (VOCs) were disposed                                                        than 99 percent explosives removal                 discharging treated water in the
        of in three areas: the Trench Area.                                                   while reducing the amount of soils                 c:::~nal and decreased the use of
        the Landfill Area. and the Nonheast                                                   requiring destruction. These me:J.-                water resources in the area. The
              Sixteen extraction wells h:::~ve
        Arc::~.                                                                               sures resulted in estimated cost                   r:lle of water supplied to the power
        been insw.lkd in these three :::~rcas to                                              s~lVings of $10 million. The total                 plant, now 300 gallons per minutL'
        collect contaminated ground water                                                     projecl cost is approximately $33                  (gpm). is expected to increase to
        which is tht.:n trt.:3ted t0 remove                                                   million.                                           500 gpm in 1991.
        contarni nat io11.


        Cleanups at Rocky
        Mountain Arsenal, CO
                Tn an:ckratc rcmcdiation at the
            Arsenal. the .-\n11y. EP:\. ColoradP
            Dq);\rtrllL'Ill nf I k:alth. and ShL'!I Oil
            Cornp;l!l: h;J\"L' a~rL'l'd th;1t 1.' IR:\s
            :-;hPtild lx; cnndtll"lcd It~ rnltiCL' ~,·nn­
            tamnl.Hll nn~:r:lltllfl :u1d rL'IIlP\"l'
            hc:dtll tiHl':il"      IR ·\.., ~.:ompktnl
            W1lh1n !hL' ].,..,! ~l·.1r llh:ludc tht•
            llhi.dl.ll!•'l\                 l 0!    [\~0'     Ill'\\       lrliL"r~·t·p!
            .l!lol    !1~".111\ll"J\: "'-'•h"llh                 .\11,j lfll"         ~·J,,
            "•llll"      ··1      ·'i':'l•".llll.l!,·l\                ; .... ~     o~h.!ll
            ,j,q~,·.:          ·.~.   ii,          \q   "•1:·:1.1\·.·             <111\Hll

            ·~:1   :-.     ·     ·1.:




                                                                                                                                                             ........ ··'.      :   ···· ....... .
l




                                                                                                                                                                                                                                                                                   '•
                                                                                                                                                                                                                                                                                 ·:'




                                                        Air Force IRP, Progress

                                          he number of Air Force IRP sites increased by almost 30 percent in FY 90 to 4.513
                                          sites at 315 installations. IRP activities have been completed and no further remedial
                                          action is planned at 448 Air Force sites.



                                                                                                                                                                                         ities are 'underway at all of these "'
                                                                                                                                                                                         facilities.' Removal actions and
                                                                                                                                                                                         IRAs have occurred at 28 of the Air
                                                                   Deputy Assistant Secretary of the ,., Force                                                                           Force's NPL facilities.
                                                                 (Environmen~           Safety and Occupational Healtl1)                                                                                                                                                                .....
                                                                                                                                                                                            The following are examples of
                                                                                                                                                                                         significant Air Force IRP prC?ject
                                                                                                                                                                                         activities Conducted in FY 90. ·                                                                '
                                                                                                                                                                                                                                                                                         ·'

          .!(1 ,·,§.:-•~·1.:1~~\1:...--.
                 !.!!l~.i'
                                                                                                                                                                                          ROD at Tinker AF~,
                                                                                                                                                                                          OK
                                                                                                                                                                                               Tinker AFB became the first Air                                          '   .i

                                                                                                                                                                                         Force installation to sign an agree~·
                                                                                                                    Key to IRP Respoosibifi1ie
                                                                                                                                                                                         ment for cleaning up an NPL site.
                                                                                                              D Policy promulgation                                                      The ROD was approved by EPA.                                                                   '
                                                                                                                                                                                         along with. Tinker AFB and tht·
                                                                                                              1M! Progrnm management                                                     Oklahoma State Department of


                                                                                                               -Tedrical-
                                                                                                                -             Prog;Jm inp1emeo                     •tao,                 Health. Approximately 100 people ,
                                                                                                                                                                                         attended a public meeting held· in
                                                                                                                                                                                         April 1990 ·to discuss cleanup op·
                                                                                                                                                                                         tions for the threr.: segmr:nb p( tht.'
                                                                                                                                                                                                                                                                                  ..•.
                                                                                                                                                                                                                                                                                    ''""''

                                                                                                                                                                                                                                                                                            ',,
    Air Force IRP Organization                                                                                                                                                           ..;itr:. Thr: mr:eting J!lowr:d tht.· publil''                                                     ·•
                                                                                                                                                                                                          '                -
                                                                                                                                                                                         :tn upponumty to ask 4UL'Slli'llS :l!ld
                       PA work has ~en cornplc!cd at                                                   plcted RD!RA work were registered                                                 VOICC        COIH.:erns   rt:gai-ding the
                   J.XSO of the Air Force's ~.513 IRP                                                  at Air Force facililics 111 ~y 90.                                                ullr:nded cleanup altemativr:~
                   site:;, while Sl wnrk has hccn com-                                                 Howevc:r. more than 500 rcmcdi:11
                   pleted at JJ20 '\Ito. :\\though the                                                 :.~ctivitics were init1atcd. br ingmg                               1
                                                                                                                                                                                                Tht.:    pr<~pnscd de;ulUp altr:mJtivt' ·
                   Air Force's n:t.:LL,~tt"i'-·:uHm of site                                            the tmal number of Rr\s undcr.-.-·:1~                                             ,,,r   lht•    :=r•'ttl\d w:nt.:r HH.:ludt.'-. lll..;!;rl
                   status rcsullcd 111 .t decrease 111                                                 or completed to 1)K9.                                                             lrn;.:        1 ~~~     C'\\L\I..'llllll            \~~·\1-..        ~nn
                   RI/FS L·nmpktLnn, Lll FY ')(), !he                                                                                                                                    ·.o~tr.:tlll~          .r       s~.:p.rr.rlt'             v..l .. ll'·\,ll\"
                   numl-x.·r tlf '-IlL'' ·-~here R.l/FS ·.~ Prk                                              Dunn~                 FY       t)(J.      tht· :\n h•rlt.                   l::.::::lVIII !.ll.dil\ i<' [;t',ll ·;,:;,i,t:·•
                   I" \Jtllkr·.~.l:•                    tlf '-'•'lllj 1 kiL'   t!lL'IC.I,l.'d          ~..••rllpktcd .rr1d -.r;,:rh:d                        I·\(;, :.•r I i
                    [flltll         ~--~-1S       Ill !·J ,\l) [P :.~11' II\                           '-.1'1       rw.t,tll.rlt••rh                l!1r-. 1 •r.•tt;!t1 ;!;,·                             ·' , , , . I    I! l   i   :II~   ; 'I
                    l·l           •111         hnthc: Rl I·S 11:\L··.t•_:.:.•                          h•l.d         llll:td'l..·r       ••I        \11        [·,-:,:·         '-.1'1                         ;':·•,.
                    : :• •I\ •,     .11   t•    :11 h   !.':    , . · 'I   i:,~ ',: ·   j,. 't':   \   Ill . :. I~ ; . 1: • • I:     ,\ till        , l :' i 1,'      j   ·\I ; •,

                                                                                                       1 ... i' . ',[          ,\''I·.... i :.: '• : ·~· •.
                                                                                                                                        \.. i . "                              ·,,·
                                                                                         •'II:                                                                       .'
    .,
                                                                                                                                         :.·.·~   ·;·· ;;1•: ... '.· .......... ·. ,· ..... :·:./): ,·:·;;: ..   ·.~   ': .... ·.

   Camp Pendleton cleanup agreements " ... lay tire foun-                                                                                -ROD for Ships Parts · ·•
   dation for tire effective working relations/rips wlriclr will                                                                          Control Center, ·
   be crucial to cleaning up these sites expeditiously and in                                                                            ·Mechanicsburg, PA ·
   a manner fully protective of public health and the
   environment."
                                                                                                                                             A ROD w~1s signed in September
                                                                                                                                         J~)()()to allow for the cleanup of a
                                             Daniel McGovern                                                                             storm water dr:.~inage ditch con-
                                             Regio-n IX Administrator                                                     · .·           t~unin;!tcd with PCBs. Remediation
   ·.;   -                    , ·.,, ... · Environmental Protection Agency .                                                             for the first segment of this non-
    .··-.··
    .. ,,_                                           .
                              <-:·,,::·:~-:-~>--·: . -:... :_·;,--... ;';·;. . -:c·.:'.:·.· ~ ... _:.. ,· :- . :::.' '?~~~ .·'""':·      NPL cleanup has been awarded .
                                                                                                                                         This work includes excavating
                                                                                                                                         sediment to bedrock for the first
Removal Actions                                                       NIROP Ground Water                                                 :UOO linear feet of the ditch. In
                                                                                                                                         response to low contaminant con-
at Saint Lawrence                                                     Cleanup, MN                                                        centrations and safety considerations
Island, AK .                                                                                                                             due to sinkholes in the unstable
                                                                                                                                         kJ.rSt terrain, the Navy has fenced
                                                                       In September I 990. a ROD was                                     the J.rea. Dams hJ.ve bcl!n instJ!kd
                                                                   signed between the Navy, the                                          to trap sediments. The remainder of
    A PA conducted by the Navy at
                                                                   Minnesota        Pollution    Control                                 the     remediation    wi!l    include
Saint Lawrence Island in                         1989
                                                                   Agency. and EPA. which will aiiO\'-'                                   removal of sediments where com-
identified transformers and drums
                                                                   for the cleJ.nup of contaminated                                       posite samples indicate conccntrJ.-
containing hazJ.rdous chemicals that
                                                                   gro~.;;;d water at the Naval Industrial
posed a threat to human health and                                                                                                        tions over 5 parts per million (ppm l
                                                                   Reserve Ordnance Plant (NIROP).                                        of PCBs and the addition of anlHher
the environment The overall con-
                                                                   The ROD outlines a two-phased                                          gabion dam. Long-term monitoring
tamination at the site has resulted
                                                                   plan that calls for the installation of                                and confirmatory sampling are
from spills. leaks at storage areas.
                                                                   five pumping wells, and the con-                                       included m the overall ditch
burial in landfills, and random
                                                                   struction of a treatment plant to                                      remediation.
disposal of drums.
                                                                   pump and treat ground water to
                                                                   meet federal drinking water stan-
  In July 1990. the Navy initiated
                                                                   dards. The selected cleanup plan is
the rcmovalnf appro.ximJ.tt:ly 1.000
                                                                   designed to prevent further move-
drums. 30 trJ.nsformcrs. and 17
                                                                   ment of trich!orocthcnc (TCE) con-
comprcsscJ gas cylinders from the
                                                                   taminated ground water toward thl'
site. The ck:1nup crew was oper-
                                                                   Mississippi River.
ating undc.:r arduous conditions in
an area where access limitations
required importation of utilities.
supplies. equipment. and personnel
by helicopter. Hazardous wastt:s
removed from the sit~.· were pack-
aged and airlifted nffsitt.:. Transfer
of the:->c h:rtardmJ" cnnt:Imin:mts
rt.:llHl\Td the Jltltcnti:d f!lr immt.:diall.·
dan~cr to lift.: :u11l hc:dth. prcs~..Tvcd
the (khc!!l' :JrLtll" l..'l·P!~~~:·. :u11l
tx-t::Hl the pro •.:c-...-... 1d l"ll' Hlll\11\t'tll.d
..:k:uwp 111 tht• .1rc:t




                                                                                                                   ·<            ·'···                      •·.   ~   .. ·' :--                          ·-.!:.- ... -·        .·..
                                                                                                                                               .'




                                                                                              '                                        '                    ~--




                             Defense Logistics Agency··~:
                             IRP Progress                ·                                                                                             . -,,
                                                                                                                                                       'I'




        i1
                he Defense Logistics Agency (DLA) IRP continued to show steady progress in all
                areas in FY 90. The number of installations and sites in DLA 's program increased
                slightly in FY 90 to 32 sites at 257 installations. IRP activities have been completed a.hd
        no further remedial action is planned at 102 sites; or almost 40 percent of the DLA sites 1n the
        program.



                                                                                      PA/SI work has been completed
                                                                                  at all of DLA's 257 sites and·R•I/FS
                                                                                  work is complete or un_derway at
                                                                                                                                                            .1·
                                            Director, Defense logistics Agency    147 of the 150 sites tai-geted !6r                                              I
                                                          (DLA-D)       .         such studies. Six remedii:tl adiVities· __ II

                                                             I
                                                                                  ar'e: complete or undc:~·a'y. ai~6l:A ,_
                                                                                  siles.                 '
                                                                                                                                                                I
                                            Office of Installation Services and
                                                 Environmental Protection
                                                                                   '
                                                                                    ' In FY 90, lAGs. were signed
                                                                                  covering two DLA installations.                                           'II.
                                                                                                                                                                I
                                                          (DLA-1'1)               TI1ese were the first lAGs co~~­
                                                                                  pleted for DLA NPL installations                             ~--           I.
                                                              I                   PA/SI work has been COi-rjpleted                                          1-t
                                                                                                                                                            '
                                                                                  ~nd RifFS activities are under;v.·ay                                      I
                                                                                                                                                            I~ •

                                                                                  at all three of the DLA, installations
                                                                                  final-listed on the NPL Removal
                                                                                  ·actions and IRAs have occurred ·m.
                                                                                  one of DLA 's three NPL factllli~sJ                                  I'   l«t

       Key to lAP Responsibilities:                                                   In July of FY 90. Slmrl' .-\m1y
     c::::=J Policy promulgation                                                  Depot (AD) was transft:rr~d frod1
     c::::=J Program managment                                                    th~ ..\mn· to DL..\. nukin~.. SharrJ..·
     I'. '-"'~-I Program imolemetltation                                          .-\D the. founh DL.-\ "';:;,11:111.!,,
     I ~ .. ·.;,:o~_J Tectmic.31 Sl4lPQrt                                         IL"It:d un the l\iPl~. f-kc:HJSt" ttft'
                                                                                  .-\nnv w;tS rcspnnsihk' f~,r fllP'i /1:                          I
                                                                                                                                                   I
                                                                                  the ;""' conducted :11 the ""1.!1                                I

                                                                                                                         Sh:Jr;'t:. .-\IJ,,,
                                                                                                                                                   '
                                                                                  l.JII!lll       thruug.h FY    l)(),
De!ense Logrstrcs Agency lAP Orgamzatron
                                                                                  1\•1!    1n,:lwkd tn the 1>1.:\               ;~rc'~r.llll   '
                                                                                                                                               I"
                                                                                       ''lilll'- ~'lt''-t'lllt'd 111 lith ;~·;·· •;;           I
· Ground Water·· .                           ·
 Treatment at
 McClellan AFB, CA
     Investigations at McClellan Af-B
 have revealed ground water contam-
 ination caused by rainwater leachate
 from a I 0-acrc waste pit are;..~. A
 cap w<.~s constructed over the waste
 pits to prt!vcnt further leaching of
 comaminants into the ground water.
 A series of extraction wells have
 been installed to pump ground
 water to an onsite treatment planl.
 The plant has been in operation
 since 1987 and currently is receiv-
 ing the pumped water at a rate of
 250 gpm. The treatment system
 consists of air stripping and carbon
 filtration. The treated water IS
 released into Magpie Creek; how-
 ever. future plans call for reclaim-                            The Pump and Treat System at Williams Air Force Base is currently recovering fuel from
 ing the treated water for industri;.~l                          ground water on a continuous basis.
 uses.
                                                                                                             pump inlet :1pproximately 13 feet

  Cleanup Effort Earns                                            Innovative Cleanup                         ahove the \1.-'Jtcr pump inlel. Fluid
                                                                                                             levels arc monitored with a pressure
 ·Environmental Honors                                            System at Williams                         transducer to ensure Ihat the fluid/

. at Kelly AFB, TX                                                AFB,AZ                                     :..Jir intcrf:H.:c is maintained across
                                                                                                             the product inlct. David Annis.
                                                                                                              Prnjcct \hna~cr for the Ariznn:t
                                                                    \Villiams AFB is using a new              Dt:p;trtnh:nt of Water Resource:--.
    Kelly Af-B h:1s earned n~Jtiorul                             aquifer purnring sy:·i!t:m tu tre:t!         nh.-.L·rvcd J s;.stcrn demonstration
 recognition for its dlon~ in ckan-                              contaminated ground wata at the             :md .-.ut~d th:H the testing and re-
 ing up a jet fud spill on tht.: cast                            ~ite. The system bcGJ.me upt:r:.1hk in      ~,.·,lvcry system w:.ts impressive. and
 side of tht.: ba~c nc~1r Quintan:!                              August I t)90, recovering fuel that         11 w~rs       ohvious thJt J great deal of
 Ro:1d. R~ncw Amcrit::I, a nonrrofit                             h:rd contaminated ground \V~llcr            ~_·t't't)flh:HI tx:cn put into both Jc-
 organization haseJ in \V:.tshington.                            frnm J leaking underground StOf~I);C        't.;..:run~ the system :.tnd Jtbptin!_! it
 DC. that promu!L·s a s:1fc and                                  tank. ThL' down·hrdc rurnrin~ :-y..;-       111 Ctlnditl~>rr... :!1 ttll.'   site.
 healthy envirtlnn~t.:nt. ~Jw;,rded Ke-lly                       tcnl is L'quipped \~ 1th :1 pr~>du~t
  .'.FH     ;111   Fr1\ lfl'lllm~nt:d            .-\chic\c·
  mcnt t\ ward l.'L'rll (ll·:Hc for the
  (_ltnnt:tn:t R.o:1d I'JI,,I Jl' .. l Fut.:l
                                                                                                                                              -----,
  Rcct 1vc ry I'rtliCLI                                             The Quintana Road project was " ... an environmentally
                                                                    successful program, one that can be rcp/icated.:.in many
      Tltc :t'.\;ud "L'IL·ctiPn            1'.   h.ht·d   1111

  tfw :thll11y nf .1 pr,l!l't'l [,, ll'''IL'l't.                    communities interested in so/ring similar enrironmental
  :t''>\(>r,·. ,,r cnlun~t·thc en\ lrt•lltlll.'!ll                  prohlt•ms. · ·
  :\it'   'tl(l'l''>'> 1•! lliL' j'IPtt'' 1 '.~,I'> tiUt'


                                                                                                                           Tina llohson
                              '>.:··   \                                                                                   F\eruti\t' l>irl'ctnr
                                                                                                                           H.t·tlt'\\   \nH·rica
Other Hazardous Waste
Program Progress

il
        he Other Hazardous Waste (OHW) Program, the second element of DERP, examines
        current operations to find cost-effective approaches to DoD's waste management activities
        and to prevent pollution at the point of generation. Funds are provided to promote DoD's
total quality management of hazardous waste initiatives. Such efforts include research,
development. and demonstration of pollution prevention and hazardous waste management
technology. This work involves studies of UXO detection and range clearance ·methods:
investigation of allemate products, revised specifications, and improved acquisition and operating
practices: procurement of huardous waste reduction equipment: inforrnation exchange: and other
environmental restoration and pollution prevention activities.



    In July 1989, DoD published a                                                                  Establish adequate reporting to
directive entitled ''Hazardous Mate-                                                               track progress in achieving pro-                                  Hazardous Waste-
rials Pollution Prevention.·· In this
Directive. tht.: prevention of pollu-
                                                                                                   gram goals
                                                                                                                                                                     Source Reduction .
                                                                                                   Participate in infom1ation c:>..·
tion is t:mphasized to replace his-
                                                                                                   change on hazardous mataia[,
torical end of pipe solutions. This                                                                                                                                      The Aircraft lntem1ediate Main-
                                                                                                   pollution prevention
policy ret..~uin;::; th:.H hazardous mate-                                                                                                                          tenance Department (AIMD) at the
rials be sekctcU. used, and managed                                                                 Cooperate with environmcnt:il                                   ~brine Corps Air Station. Yuma.
over their life cycle so that DoD                                                                   agencies    pursu•ng simibr                                     Arizona has reduced its generation
realizes the lowest cost to properly                                                                objectives.                                                     of liquiJ ha:t_anJous waste by t){)
prott:ct human health and the en-                                                                                                                                   pcrct;nL This w:.~s accomplished hy
vironment. The preferred approach                                                                 The July 1989 Dircc<ivc aug·                                      segregating_ all sources of con·
is to avoid or reduce ha7.ardous                                                              ments extensive waste minimizatin11                                   centratcd h;JZanJuus w:.~ste and
m:.llcriJ.ls use. \Vith thc issu:mcc of                                                       work already unJcrway within !ht·                                     nunirni1.1ng the amount of h~t/.·
this Din:ctivc. DoD components J.n:                                                           services. especially the JogistiL'                                    :trd\lliS 1113tcnal u~d in c:Kh pr(l·
rt·quirnl It':                                                                                community. It requires that t;rwirPrl                                 L·c..,~. All rinse watL·r gcncr:J.tcd h:
                                                                                              fllt;ntal conccms tx· llll(..'~r;ttcd tnt~·                           :\1\1() slmrs j_.., an:1lyt.ed. Jlluwin~
   lndwk ;..:u1d.uh.·t'                             <Ill     h;l!arduus
                                                                                              the lkpartmcnt "L'\L'I-\<LI\ \\<lfk                                   ~·Jt!lllll,llllll\ nr ~(HH\.:t; I.:O!li:Hlllna!lllll
   lll;lt~·rt.d-.. 111 .ill dn(.:CII\t''>. n:;..:u
                                                                                                                                                                    iltr<·u~h         pn)o.\u,_.t           suhsttlult<'ll          1'1
   I. I! II   >Jh.        111.11 \\J,j   I"·      ..,~ 1\'!,:l I~~·;\[\! >II ....
                                                                                                 In FY t)()                   ~~~       .::.. ttldlto'l\      111
                                                                                                                                                                    Lh,Hl~t:l.l ll!"Cftlltun            tcdm1quo. F..,t1
   .tthl       ••thv;           ~111>1.\Jh , .              .t~~,_ttlll\'lt\-..
                                                                                              llFRI' Iuthi·.             \H't,·            1''•'\tok,l       I•'~   l\l,J[et\    L0'-1         :,.1\'lfl~-,    r~:r     :c.H       .11~·
    r·.,u,·, I
                                                                                              h.t/,trdo>lJ" '•\,\'>ll' 111!1\l!l\1.             .1(1"11 i'l•'l      0:.~711,11(1(),       \l.tth       ;1     ~,_·,)rn: . . pt.•lldln;-:
    I ), . '. \. t.   'i' .I I I• I    Ill .111\ l. I II I        '.   II! 'I    \ I \ \.     !'l.h    '"1.11>1.- >'\,llll[li.-                  ,,[   I   llf\\     :rltllt.tl. \t..t'>l\'"    fL·,!tJ~·tt!lll ,11       ]tf:-:.tll•l
   : ': • ' ' : .II ' '       :• •    : : I .I I \, I •'l    ~   I,I ' , I   ! j' ' I I   '   f't••:     1,111\ .1., o•ltl;   it   ,]·,;11

     ··.:·                                ... ::·:                               '::.         ·. \. t.     : ~.!' '·'
                                                                       ,,
: 'floo 11 o9Cien                                                        Reinoval Action at" the
                                                                                                                           lh 1he end ol J·"Y 1)0. ;t<..:ll\"IILt"'
                                                        ·                                                             c..·t~tll[->k!l.:d ;~\ tht.: -..nc in~.:ltah..·d '>l:t_:.:

 Defense Depot, UT                                                       Arctlc·surplus Site,                         ill).! .~.041 empty 5)-g;~llon dnull:-.
                                                                                                                      sampling arH.J tcsring I ,X7X full
                                                                         Fairbanks, Alaska                            55-gallon drums, draining and p;.~ek­
                                                                                                                      aeing 676 bJHcries. excJvating X4
      Ogdcn Dcfcn:-.c Dt.:pot hccamc
                                                                                                                      c~hi~ YJrds nf chlordane-cnntJilli-
 tht: first DLA         inst~lllation         to sign an                   Through a Consent Order with               nated ~oils and 200 cubic yards of
 :..t!.!,rcemcnt for dcaning up an NPL                                  EPA, DLA performed a removal                  lead-contaminated soils, and testing
 site. EPA Region VIII, the St~lti..! of                                action at this privately owned site.          and draining 135 tr:msform~rs. In
 Utah. and the depot approved a                                         This site was plact.:d on EPA's NPL           ad(fltion, an" incinerJtor was disas-
  ROD for cleanup operations. A                                         during 19~1). DLA 's objt.:ctivc was          sembled and associated dioxin-t:on-
 public hearing was held in July                                        to n.;muvc the major \Vastes to               taminated materii.lls and soil wcr~
  1990 lO discuss dc~mup options for                                    avoid any porential for public expo-          removed. The waste materials col-
 both the soil and ground water. The                                    sure. Surplus materials had hccn              lected during rhcse activitic::; arc
 meeting provided the public an                                         placed at the Arctic Surplus Site by          being transported to permitted toxic
 opportunity to voice their concerns                                    rhe private owners and operator::; of         wa::;te landfills and incineration
 and ask questions regarding the                                        the salvage yard. Most of these                f<.~cilities.
 cleanup alternatives.                                                  materials were purchased through
                                                                        the local Defense Reutilization and
     Approximately 40 cubic yards of                                    Marketing Office (DRMO). a DLA
 soil will be removed and incin-                                        teniary level field activity. DLA
 erated. A pump and treat system                                        became involved al the site because
 with reinjection into the aquifer is                                   of the potential imminent threat to
 the proposed remedial action for                                       public health.
 ground \Vater.




 Bioremediation at
 Defense Fuel Support
 Pointin Casco Bay, ME
        Biorcmediation of soil contam-
  inated with 6,500 mg/kg of JP-5 jet
  fuel beean in August 1990. By
  Novem~r. concentr:nion levels had
  been         redu~..:ed       by       70           percent.
  :\pproxim~.ncly      600 cubic yards of
  cont:.~minart:d soil was removed to a
  tank dike area where it was fer-
  tilized usin~ nitrogen. phosphorc..Jus.
  and ptl!:ls~IUrn. \"atur:il rainf:lll
  provided -..llil ll111isture. ·nlc S(lil
  w:1..; :-.r,r~·:td thinl; l(l inchcsl ttl
                                                                         A total of 1.878 55-gallon drums were tested at the Arctic Surplus Site in 1990.
  .illo\~o;    f11r   rn:l\lllllHll       n\y~cn               dit"-
  fu-.;1111\ 1I1!11   the    ..;oil.


         F.Hl1n Lthcn:t!l'r'. d.t!.l lud dcm·
  "lhtr;t!l.."t~ thv l'ft'"·Ch"l' td 'llii!L"tc..·nt
  f't'\'lli.LII•'Ih "I       J!'       lh-:,.:r.1dlfl:: h.h"
  · · ·r 1.1   !;     i '.11 ll": ·    'T:!! i .'l"    I ht'     :~·l
                                                                                                                                                                                                                                          ::'
                                                                                                                                                                                                                                          ; ~:
                                                                                                                                                                                                             ~··
Hawaii Hazardous                                                                          that this project has establish~d the DoD as the
Waste Minimization                                                                         waste minimization in Hawaii... We cdmmend
                                                                              your:Jo.re~tig•~t. in- establishing this pr~ject."           .
Project                                                                                                              .     .
                                                                                                                                                                                                                                            '
   The Hawaii Hazardous Waste
Minimiz;:llion Project is a muhi-
phase venture in which efforts are                                                                                                                                                                                         ~ -·   '
being developed and implemented
to reduce hazardous waste genera-                                                                                                                                                                                          .. ,            '-

tion rat~s and off-island disposal                                                                                                                                                                                                        i
needs for all military operations in
the State. Near-tcnn recommen-                                                                                                       cleaning and degreasing operations.:-"~                                           i
dations have been developed and
are being pursued at 21 Army,
                                                                            Electroplating                                           Used sOlvents are now sent offsite
                                                                                                                                     and distilled for reuse. reducing·
Navy, Air Force, Marine Corp.:;,                                            Metals Recovery                                          costs associated with waste disposal
DLA, and National Guard instal-                                                                                                      and material USage.          ,,      I·
lmions. These near-term measures,
defined as activities that could                                               Naval Aviation Depot, Norfolk
                                                                           has developed a successful program
reasonably be implemented within
one year, are estimated to result in                                       to reduce cyanide wastewater gener-
                                                                           ation in their electroplating lines by
                                                                                                                                          Hazardous Materials
reductions in DoD's waste genera-
tion rates in Hawaii by up to 28                                           50 percent. The Depot has installed                            Reduction Program
percent once implemented. Potential                                        two electrolytic recovery units. one
                                                                           on the cadmium-cyanide plating
savings of almost $500,000 per year                                                                                                           A' chemical use redudion prb-                                                               -,,,
                                                                           line and one on the silver-cyanide
are projected for all of the near-                                                                                                       granl has been established at Tinker:
                                                                           plating line. These units electro-
term measures being pursued.                                                                                                             AFB. Oklahoma within the ·last
                                                                           chemically oxidize dissolved cya-
                                                                                                                                         yea~. This special program reviews'-
                                                                           nides in the rinsewaters lO produce
       The next          sever~!!        phases of the                                                                                   the .'justification and authorization
                                                                           cyanates.     Simultaneously.       the
project, which is being managed by                                                                                                       for .'using hazardous materials~basc- ..
the Navy. ,~.·ill formulate, imple-                                        metals (cadmium and silver) are
                                                                                                                                         wide. Although the program is new.


                                                                                                                                                                                                                                           )
                                                                           reduced to their elemental state and
ment, and cvalu:.Hc long-tenn waste                                                                                                      it ,,:.has already acco'mpfis~~-9 ..~·-~~) I
                                                                           recycled to the plating tanks.
minimization measures. The entire                                                                                                        reduction in the use of some chCm.l'-~ ;.-·'
                                                                           Approximately 99 percent metal                                                                . iU .
project is scheduled for completion                                                                                                      ca!s by one-third. The p,rograp~;·~s_J
                                                                            recovery is achieved.
by IY%.                                                                                                                                  cu,'rrently being expand~~d~'tO ma~·a~c
                                                                                                                                         <.!II chemicals on base by FY 91.
                                                                              The Depot's goal is 10 reduce all
                                                                                                                                                                                                                                      .I
                                                                                                                                                                                                                                           1.
                                                                           hazardous waste generation by
Asbestos                                                                   exploring additional technologies.
Replacement                                                                                                                                                                                                            ~,:,.
                                                                                                                                                                                                                                          r
                                                                           including recycling uf chromium
                                                                           rinsewater and scrubber waters from
                                                                                                                                          Inventory C@ntli'@~                                                                             I •



                                                                                                                                                                                                                                      J·:
                                                                                                                                                    trc1inin~ P'"~'·':n ,'.. ~~;u~,~~,·r,
                                                                           a hard chromc plating line. suhstitu-
       A stud...- fnr ~tst-.e:-.tos replacement                            ting for hard chrome.: plating. con-                                                                                                                       '
                                                                                                                                                                                                                                      '
                                                                                                                                              A
 111  p:tddn.,t./;.::~'>1-..cts has been initi-                            vening from wat_cr-basc filters to                            {J\~rs    in the itkntifiL·ation. i:ontrql.
 :ttcd :111d tv-.11 1•f the three phases of                                dry filters in paint booths. frccZL'                          .'and   USl' of hat.:mlnus m:IIL·ri:11~: lu)
 tlu.: stthh h:tvc tx:cn completed.                                        crystalli7...ation t~catmcnt for mct:II-                   ."al'l' tx·cn nnpklllL'ntnl ;II thl· 'N:t·v:d
 l'h' ,ll..':tl ·l,:tr:tmctcr ~~~~J detrimc_ntal                           IJ.den rinse watcr. and ozone trc:\1                        ·\tr StttiPn. \\'hid!'-....·\' l\l:lnd. Til
                                                                                                                                     .                              .               I
                                                                                                                                     r




 rn,;tcn.d ,._.fl'L'IIlll).: tc•;ts have been                              ment for organic chemicals.                               • j'fll):!f:\111   [\ tlliCIHkt! l•l lr.l~'l•!\r
 l't•tlll'il'tL·d L.tl .... •r:tt••ry tc.:sting of a
                                                                                                                                         !ll\L'Il!llf\' (tlll!rnJ
                                                                                                                                                           .                     h\.
                                                                                                                                                                                   .    :1\'lllc:::~...: o>\Cl
                                                                                                                                                                                                      .      . I
 lt\t:d ll'''       !nturL· 111 -.,unulatc rotary                                                                                        .. to~.:!.. in~ nl h:t/:mltl\1\: lll.tt~·r:.d-., .ll11!
 .tnd rL· . .:q,rt-....::tltn;.: ll\turcs accnnltng                                                                                                    .                                                           I
                                                                                                                                         !"J~· !Ur!llll~            in
 t<~ '\.t·. •,       .,l.tthl.trd, ts lllhh:rw:t~                            Solvent Distillation                                        '>~11'1'1~ !~>r ~''"'thk·
                                                                                                                                                                           1/IIII'L'd 1ll.l:·l'fLLI·. 1;,
                                                                                                                                                                                     f('• ..   tk .i::,] :t·u .,·
 I ::::it<t       ttt\,·.tt:'.tlt••n·.     trh·lutk :tdt!t                                                                               : •:: • •I :, ' .,] n·l    t I 1 t ,. • .- • ; 'lJ ,:         ::: ··:' ;:
                               : o• I'   ,LII<l    f, ![!, 1\~    o 'II
                                                                                    lit,· ·.11·.;··•. · .. : !'It ,.,.,t      ,I.:
  ir       • :,           · .... ~: 1"1: ·· .II    I hv     ( ; I l' .II
                                                                            h.l'o l .....·;,·ll t'li!IJ, .. 1: ,' '  • .I •
                                                                                                                                                      .: :. , ,·.· ...
 I ..                                        I ·~·I II.''        I ht•
                                                                            ...;l.tllo •II \\. ht, I; "."• I -..1:": \'.
                                                                                                                                                               ''    ..
                                         '.!.:·.       ·.. :... ··.·.
                                                                            l•or1      1'1 1 t •.• ,.
                                                                               '·
                                                                                                                        -
Aerobic    · · · ··                                                    Chlorofluorocarbons                           Spray~Casting
Biodegradation                                                         Substitution
                                                                                                                        Th~
                                                                                                                          Air Fort.:c Engineering Scr-
                                                                                                                   vic~ Ccrl!cr is developing a spr:Jy-
   The Air Force Enginct.:rin~                                           This rcst.:an.:h is intcntlcd to iJen-
                                                                                                                  ~astin~     process     10   rcpla~c.;
Service Center i.s developing a full-                                 tify :tnd valiJ:Hc less or   non~ozonc
                                                                                                                  dcctrorbting orcrations. Current
sc~lc   aboveground       biorcactor                                  tkplcting <~hcmativc materials for
                                                                                                                  electroplating processes involve the
capable of treating ground w;.~ter                                    chloroOuorocarbon.s (CFCs). The
                                                                                                                  usc of conccntnllcd, complexed
and waste streams contarninatcd                                       research     includes       establishing
                                                                                                                  metal pl:.Hing solutions that require
with mixtures of chlorin:..~tcd aro-                                  benchmark values for military spec~
                                                                                                                  extensive ventilation and health and
matic compounds. Bench scale                                          ifications rnatcri<.~.ls using stamt.Jrd~
                                                                                                                  safety procedures.
experiments have shown tktt it C<lll                                  ir.ed techniques for board assembly
aerobically biodcgradc curnpk:x                                       and testing. and cv;JiU;Jting new ;Jnd
                                                                                                                       The usc of this technique will
mixtures of solvents <.~nd chemicals                                  existing     alternative       cleaning
                                                                                                                   provide significant benefits, includ-
to non-detectable levels.                                             materials using the same procedures
                                                                                                                   ing the elimination of hazardous
                                                                      as benchmark testing. Further
                                                                                                                   waste, reduction of health and
   The pilot-scale bioreactor was                                     studies will include testing of a
                                                                                                                   safety problems, and decreased air
tested at Kelly AFB under a variety                                   terpcnc~b3sed solvent th:.lt does not
                                                                                                                   qualily problems and ventilation
of operating conditions. The system                                   contain CFCs. identifying and quan~
                                                                                                                   cosls. Annual savings of $450.000
reduced concentr;ltions of various                                    tifying contamin::mts in recycled
                                                                                                                   associared with material usage and
solvents from the parts per million                                   CFC cleaning solvents, and deter~
                                                                                                                   waste disposal costs are projec1ed.
level down to the parts per billion                                    mining the possible adverse effects
                                                                                                                   In addition to these benefits. supe-
level at a 40-minute retention time.                                  of ultrasound cleaning on the relia~
                                                                                                                   rior coating engineering properties
Several chlorinated solvents pre-                                      hility of soldering joints and inter~
                                                                                                                   (i.e .. yidd strength. tensile strength.
viously considered nonbiodcgrad-                                       nal wire bonds on printed wire
                                                                                                                   hardness. ductility) can be achieved.
able were readily degraded by this                                     assemblies.
                                                                                                                   A full-scale demonstration is sched-
system.          A       second field test is
                                                                                                                   uled at Tinker AFB in FY 93/94.
scheduled for 1991 to collect addi-
tional operating d:Ha for usc in the
design of a full scalc system.
                             4




Aluminum lon Vapor
Deposition
   The Anny is conducting a !C.-..1
program at ANAO. Alabama tu
determine the feasibility of using
ion Vapor Deposition (IYDI nf
aluminum in lieu nf cadmium pbt-
ing ;.~t Depot f:.H.:iliti~:... Cad!lliUl\1
plat lilt! opcr:Jtions :1rt: :1 Ltr~L' "llllr._·L·
of hazardous                w:1~tc          gcncLLI\111\       .11
r11:111y AD~. Alumtfllllll l\"1) dllc'
lhll generate h:ll:lrd,IU\ ·.~.s,tc .t111l
tht.:     ;t\ulllilllllll 1:-. IHHlltl\1~             \\',qj._l'l
l'\pil:'-.llfC       to          (ll\1\."    !ll,lli.'fl.d"     1-.

 rcdu-.:t:d hy the               cltnHcLt!l<•l: "'         !1\.1;
 tn;..:    ,n[u!Ltlll-..          l·tlrlhL·r . .dt!l:l!l:lllll
 [\ [)       Jllo>\itk-..         '•liJII.'II••:    ,,•;;.•·.,.•!
 :<' .j,[,llh •·     •   •'1111'·:·.·,!      ; ..
  ·i.,;·::··




                                                                       it...
                                                                                                                  . . ··.
Ground Water                              Depot Hazardous                           In Situ Field
Modeling                                  Waste Minimization                        Bioindicator Systems
                                         "(HAZMIN)Technology
  The Air Foret: ln:-.titutc of Tcch-                                                 TI1c Navy currently has no rcli·
nulogy·s School nf Civil Engi-                                                     ahlc system that can be used to
                                            DoD depot operations involving
neering and    Service~   h;1s   rnadc                                             routinely monitor and quantify
                                         c4uipment maintenance generate
sig.nific;mt changes to a conlaminant                                              environmental impacts at con·
                                         hazardous waste as the result of
transport mtxlcl used in IRP activi-                                               laminated sites. To better assess
                                         painting, paint removal. cleaning.
ties to srudy ground water contam-                                                 such impacts on the marine envi·
                                         and plating processes. New tech-
ination. The new model includes                                                    ronmcnt and establish a clear causc-
                                         nologies to decrease the amount of
key physical mechanisms that were                                                  and·effcct relationship with haz·
                                         waste produced are needed because
omitted from the original model as                                                 ardous wastes of concern. the Navy
                                         of the high cost. future liability. and
a result of mathematical simplifica-                                               is developing a system to allow
                                         potential increased restrictions on
tions. lt can provide more accurate                                                physical and chemical measure-
                                         current treatment and disposal
outputs for given ground water                                                     ments to be conducted simul·
                                         methods. To achieve these objec·
conditions and     parameters. The                                                 taneously with measurements of
                                         tives. the Anny is evaluating sev·
model is currently in use at Tyndall                                               biological response in the field (in
                                         era! measures, including using high·
AFB.                                                                               situ). The system is planned for use
                                         efficiency paint application systems
                                                                                   in a variety of environments to
                                         to decrease air emissions. extending
                                                                                   address various Navy environmental
                                         the bath lives of chemical paint
                                                                                    problems.
                                         stripping formulations by filtration.
                                         and reclaiming and reusing plating
                                         solutions through the use of electro-
                                         dialysis. These test programs are           In Situ Vitrification
                                         being conducted at Sacramento
                                          (CA),    Letterkenny (PA),         and      In situ vitrification (lSV) is a
                                          Corpus Christi (TX) ADs.                 thermal process that converts con-
                                                                                   taminated soil and wa.•:;te into a
                                                                                   durable product containing glass in
                                                                                   crystalline phases. In this process.
                                                                                   the soil is heated to a molten stage
                                                                                   and allowed to cool to the final
                                                                                   vitrified product. ISV is designed to
                                                                                   retain or immobilize heavy metals.
                                                                                   other organics. and radionuclides in
                                                                                   the glass structure and to destroy or
                                                                                   capture organics in an off-gas treat·
                                                                                   ment system.

                                                                                        Bcn...:h· and pilot-scJ.lc ISV tests
                                                                                   were cnnJuctcd at Arnold AFB t11
                                                                                   tc'>t the rcnwval of contaminant-.
                                                                                   present 111 soils at the base ftn.'
                                                                                   training area. In this demonstratum.
                                                                                    inorgani..::.; were cffcctivt:ly reta111~.:d
                                                                                    within the melt and ;..;q percent t1f
                                                                                   the organt...:s 111 tht: ,,,tl \H'rc
                                                                                   dcstroycd. wtth an ovcr:1ll destnh· ·
                                                                                    tton :tnd rcnwval cfl.t<..:lt•;h:~· nl qq
                                                                                    f'\=fCCill     :\ fuJI.,~_·:lk fl.'lllCiii.IIIPLl .It

                                                                                    :\rnnhl ·\FB '' ..,~·heduk.! I•' !v·'1:1
                                                                                    l!l   ]<l'l]
Research, Development,
and Demonstration


11
        raditional approaches to hazardous waste site cleanup may not be permanent or
        cost-effective solutions. These approaches can require large capital outlays and
        operating costs and may merely move the problem from one location to another. DoD is
working to identify and develop permanent cleanup technologies and innovative waste site
investigation techniques that will be efficient and cost-effective. In addition, significant effort is
being focused on the development and testing of methods to reduce the generation of hazardous
wastes at DoD facilities. While these efforts requ1re large financial commitments upfront. the
potential future cost savings are enormous.




    In FY 90. DoD inveSicd opproxi-   scntatives from I!J.Ch componenl.               The following examples of re-
matcly S47 million of Environ-        The IRTCG encour:.~ges impnwed           C(...'nt RD&D projects demonstrate
mentJ.! R~swration Account funds      communication anwng the com-             th(...' progress m:.1dc by DoD and
111  Resc:uch. Development. and       ponents to ensure the most dlcctivc      illustrate the potential benefits of
Demonstration (RD&DJ of ckanup        possible usc of limited RD&D             welt-directed research work.
tcchnologics and hat.ardPus waste     funds. In addi1ion. o DoD/EPA/
minimil.atinn.                        DOE working group eslablishcd in

    RD&D efforts arc coordinated
                                      1985 addresses the cost of h:Jz~ml­         Composting of
                                      ous waste cleanups. evaluates inno·
hy an lnst:llbtillfl KcstPration      vative technology needs. and devel-         Explosives·
Tcchn\)lo~y  CPnrdin:lling Gmup
( IRTC(;) wh1dt l·nnsi,as nf rcprc-
                                      ops a coordinated :.1ppro:Jch to these
                                      efforts.
                                                                                  Contaminated Soil
                                                                                    :\ fult-scak pilot dcmonstrati('ll
                                                                                ts   underway :1t Umatilla Anny
                                                                                DeptH, OR. to optimize the com-
                                                                                po:-.tmg llf c:.\plnsivcs-contaminalt.:d
                                                                                soih. Tests :1rc: being conductc:d to
                                                                                rc:ducc: trc:lllnc:nt time. identify
                                                                                1ltffcrcnt com~)St amendments. and
                                                                                find the k:.l:\1 C:\fXIlsivc m;ucrials 111
                                                                                ;u\d to the: ~o:otnpost systc:m. :\
                                                                                lllL',:h:trliCll ,,,-ornl~'stcr, :trprnvcd ,,,r
                                                                                \l'-l'    \\1th       :.:\J 1 hi-.,1\"L''   <...'Pil\.111llll.1(l'd
                                                                        ;_.     ... •• d h., ...   1·~·~·:1 \111'\,."llfl'\t .llh!     \\til .,,.

                                                                                           ··!:::•·



 · ...   ...   :•   · ....                      .   :···
                                          liSATIIt\1VlA i . . t.:\';du:llm;..: till·        hdd tcstin~ showed th;ll hydw-
Hot-Gas                                process In dch:nninc..· iL... ~..:l'fccrJ\'l'.   hlastinc wastewater c;~n he n:cvck·d
                                                                                        n1nc ~times      without ;u..Jv~rsdy
                                       lll'Ss on itc:ms contaminah:d with
Decontamination                        chemical agents and other cncrc~.:tic            affecting hoiler tube cleaning opera-
                                       and pyrotechnic mah.:ri;lls.   ~                 tions, potentially reducing waste-
  The U.S. t\nny Toxic ;:lnd                                                            water generation by 90 percent and
Hazardous Matcri:.~Js Agency                                                            resulting in a 2. 7 million gallon
(USATHAMAJ conducted a pilot            Hydroblasting                                   n.:duction in w<.~stewatcr generation
                                                                                        at Naval Shipyards. Associated dis-
sludy to determine the operating
conditions required to effectively
                                        Wastewater                                      posal costs can be reduced bv
decontaminate        explosives-        Recycling                                       almost $8 million with syste~1
contaminated equipment. Previous                                                        implementation and the rcmainine.
pilot studies showed that structural                                                     I 0 percent of the wastestrea~
components can be decontaminated          The Naval Civil Engineering                   treated to meet sewer discharge
using a heated gas to thennally        Laboratory conducted field tests of               requirements. A portable hydro-
decompose or volatilize explosives,    a recycling system to reduce the                 blasting wastewater recycling unit is
with subsequent incineration of the    volume ofhydroblasting wastewater                scheduled      for    implementation
off-gases. The compounds evaluated     generated at the Naval Shipyards.                testing at Pearl Harbor Naval Ship-
in this study were trinitrotoluene     Hydroblasting uses a sodium nitrate              yard in 1991. The technology will
(TNT) and ammonium picrate. Test       solution to remove the soft deposits             then be available to other Naval
items i!_lcluded p1pmg, motors.        on boiler tubes and other parts of               Shipyards and Shore Intermediate
powder boxes, and sewer lines. The     ship boilers.                                    Maintenance Activities.
hot-gas process was effective in
treating items contaminated with
TNT and ammonium picrate.
···site characterii8uori'1'
. and Analysis · · · · · •
  Penetrometer System
    The Anny h<JS tkvclop(.:d a st;tl<.:-
 of-the-art Site Charactaiz:uion and
 Analysis     Penetrometer            Systt:rn
 (SCAPS) for usc in mapping areas
 of soil and ground water contam-
 ination. The SCAPS is mountco on
 a    uniquely  engineered   truck
 designed with protected work
 spaces to allow access to          to.~ic   and
 hazardous sites. The SCAPS
 screening      penetrometers are
 equipped with sensors that can
 determine physical and chemtcal
 characteristics, strength. electrical
 resistivity, and speCtral properties of            The Site Characterization and Analysis Penetrometer System allows rapid collection of
  soils.                                            samples and exploration of subsurface conditions at contaminated sites.


     During     initial   f1elt.l      tcsllng
  perfonned in July through Septem-                 Toxicology                                             Fluidized Bed Paint
  ber 1990. the SCAPS equipment
  successfully delineated petroleum.
                                                    Demonstration                                          Stripper/Degreaser
  oil, and lubricant contaminated
  zones at Jacksonville Naval Air                      Three sites at the Naval Air                          The Army is evaluating the
  Station and Tyndall AFB. Major                   Station. Whidbey Island, are being                     feasibility of using a heated fluid+
  development efforts are currently                investigated      for    toxicological                 ized bed of. aluminum oxide to
  being directed toward the produc-                impacts on wildlife and the environ-                   remove paint and grease from tac-
  tion of sensors capable of detecting             men!. The study is being conducted                     tical equipment parts at main-
  solvents and hydrocarbon products                by the Institute of Wildlife and                       tenance depots. Production scale
  at low levels, explosives wastes,                Environmental Toxicology at Clem-                      testing is being conducted at Red
  and toxic and hazardous metal                    son University. where analytical                       River (TX) and Lcttcrkenny (PA)
  wastes. The goal is to produc~                   samples collected from the ongoing                     ADs. The fluidized bed system can
  sensor systems that respond rapidly              field work arc being analyzed.                         substantially reduce the generation
   to the presence of Spl:Cific con-               Radio transmitters have been                           of hazardous waste and provide a
   taminants at low levels in soil. This           attached to one adult female and                       s~1fer   work cnvironmcnL ClosL"
  effort is being jointly fumkJ hy the              three juvenik Northern Harriers to                    coordin:llinn is being maintained
   Am1y. Navy. and Air Fnn.:c.                     drx.:urncnt feeding :wd foragin~                        with thL" Air For(l.' :tnd Navy durin:;
                                                    :1Ct1vitics. Heron nestlin~s have :lisn               th1s IL'"-1   prcl~LIIll
                                                    tx·cn identified and ~.:olony hrct:din~
                                                    and ncstin1! at.:tivitics arc tx:111t'.
                                                   nHHlltnrcd. -r\ pro&r:un rt:\ JL"W :u11i
                                                   \'llf\..:--hnp \-.·:IS t,;tll\du~IL'd Ill :\li~\J',I
                                                    ll)l){)
                     Training of DoD Personnel
                     in DERP Activities

                             he Defense. Environmental Restoration Program requires a te~m effort to complete

                     iJ      effectively its varied and complicated tasks. This is especially trtie in the IRP portion of
                             the program. DoD has implemented training programs so that personnel can effectively
                     manage various aspects of the cleanup process. The following are e xamples of courses of
                     instruction provided in FY 90.
                                                                                                                                                  1




                                                                                                                                                      '
                 I Health and Safety                                                     DLA DERP Training                            DERP Training of
                     Training                                                                                                         USACE Personnel
                                                                                           During FY 90. DLA personnel
                                                                                        panicipated in a variety of training
                         DoD personnel who may be                                                                                       US·ACE is conducting response
                                                                                        programs to improve their effective-
                      exposed to hazardous substances                                                                                activities under both the RJDS and
                                                                                        ness in managing DERP. Scver:.tl
                      through their work in the IRP are                                                                              IRP portions of DERP. Courses to
                                                                                        DL:-\    t::nvirnnmcntal        officers
                      routinely     provided    training                                                                             meet 'training needs are taught b:y
                                                                                        au~nded EPA courses on RifFS
                      regarding sJ.fc opaating pr:.1ctices                                                                           inhoJ~;c             USACE            instructors.
                                                                                        procedures and            DoD-sponsurcd
                      while workin~ in areas of potential                                                                            US EPA contractors, and.con{ractors
                                                                                        courst:s on DPM usc. The DL:\
                      contamination.   u;o;c of persona[                                                                             under the sponsorship of the Pro-
                                                                                        Office of Installation Services :.tnd
                      protective cyuipmcnt. and the.: oper-                                                                          poncnl Sponsored Engini!er Corps
                                                                                        Environmental Protc~.:tion FY 90
                      ation of cont:.Hninant monitoring                                                                              Training (PROSPEC1"). Progr:.tm.
                                                                                        conference included sevcr:.tl bhx:ks
                      sysh:ms. ·n1is tratning fulfills the                                                                           Thcst; courses arc d~~igncd ID
                                                                                        of instruction on the DERP. :\II
                      requirements of the Occupational                                                                               enhJrKe the technical skills needed
                                                                                        DL.·\    c:nvironmcnta\         officer:-.
                      Safety ~md lh::dth :\ct and helps                                                                              to accomplish the hazardous_.wastc
                                                                                        :LIIendcd thc::-.c sessi(.lllS.
                      assure the safl.."ty of DoD rcrsonncl                                                                          rnissilHl. Topics include envinH.I· · ·
                      wPrktn~ :l! IR.P qtc.-...                                                                                      mental bws and rc~u1J1ions. safet~:                        ''
                                                                                                                                     and health for ha1.~1rdous W:lSIC
                                                                                                                                     sites.-air survcilbncc for h:li'.ardous
                                                                                                                                     rn;llcn:.J\s, risk as~cssrncnt guidan~c.
                                                                                                                                     h:.J:t.~rdous rn:llcnals trc;Hmcnt tcdr·                        ·\
                                                                                                                                     f11llogy. gnlurHI w~llc..'r invcsll!!.lli<l~ls.
                                                                                                                                     -.;un{1hn::, fnr hat.ardnus material-.'.·
                                                                                                                                     .Lilli ·r:Hb.lilllll sat'L·ty Dunn!-: FY fx1.
'   '.                                                                                                                               (!~!)~( :~_.\( 'F C111pl~>~o...·~·-. 11\\l>l\'•:.1 Ill
                                                                                                                                     I ll-'1-!1' -.::. ,l·-.-.11111-.. L'tilll)'klv.lllh··,,·
                                                                                                                                     '''lll ·l'




         L\'C :J··t:;,•nt···· ··•··· •.•   ·~ .•   ····· .'".;.--.:   ,·,·· ::.1;'' ·    .:··~·   .      ···.:     ........
                                                              l111pkrncntalnlll 111 tht, ll'llHlv;d
· Agricuitural son · ··                                 :11111 '1111 :UIIL'lldllll'lll :tL'\1!111, 'dtL'd    ·Integrated R!'sk::--·.--.- .... ':
  Amendments from                                       ulcd for I'NI. complie" with h11H1
                                                        the lt:IIL'r ami the spirit of thc N( 'I'
                                                                                                              Assessment
  Wastes                                                hy .. promoting        treatment vc.:rsus             Demonstration ·               ·
                                                          nolllrcallllL'nt options atHI usc of
                                                          innovative IL'chnologics ... Usl.' of
        The Anny, in coordination with                    the sediments as a soil amendment                    Estimating the! risk posed by
 EPA. Rogion IX. California Depart-                       will hoth remcdiate the con-                      contaminated     marine sediments
 ment of Health Services, and Cali-                       t:.nninatcd site and provide a bene-              based on laboratory chemical anal-
 forni~  Regional \Vater Quality                          ficial source of critical plant nutri-            yses only has proven inadequate. To
 Conlrol Board, has conducted an                        . ents to enhance the productivity of               predict the environmental impact
 Engineering Ev;..~luation}Cost Analy-                    tht.: fannland 10 which it will be                without overestimating or under-
 sis (EE/CA) evaluating the use of                        applied.                                          estimating the scope of remediation.
 zinc-laden sediments from the                                                                              an integrated risk assessment that
 Riverbank Anny Ammunition Plant                                                                            incorporates biological assessment
 (RBAAP) as an agricullural soil
 amendment. Sediments with ele-
                                                          Antifreeze Recycle/                               techniques with chemical techniques
                                                                                                            may be the best approach.
 vated levels of zinc have accumu-                        Substitution
 lated in the RBAAP evaporation/                                                                                This demonstration will support
 percolation ponds from past plant                                                                          two programs, including the assess-
                                                            A study has been initiated by
 operations                 and     waste   treatment                                                       ment of the Aquatic Hazardous
                                                         DLA to evaluflte the substitution of
 techniques.                                                                                                Waste Site at the Naval Air Station
                                                         antifreeze. Antifreeze is not regu·
                                                                                                            Nnnh Island and the monitoring of
                                                         l:J.ted as a hazardous waste undci
    Under the RBAAP lAG. the                                                                                contamin:.Hed sediments at the
                                                         RCRA. but is regulated by some
 contaminated sediments are required                                                                        Naval StJtion. SJn Diego. It \o,.·i!l
                                                         states. The study includes screening
 to be addressed because of the pres-                                                                       integrate existing techniques at
                                                         possible alternative· materials and
 ence of zinc in excess of the Total                                                                        these two sites to provide the Navy
                                                         evaluating three t:ommercial recy-
 Threshold Limit Concentration                                                                              with a multidimensional approach
                                                         cling systems. It is intended to
 (ITLC) criteria, as defined under                                                                          to assess the chemical and bio-
                                                         reduce the large quantities of anti-
 Title 22 of the California Codt: of                                                                        logic:.tl implic:Hions of contJmi-
                                                         freeze waste costs associated with
 Regulations.                                                                                               n:.tnts in marine scdimems. Standard
                                                         waste disposal and material pur-
                                                                                                            protocols will be! developed for
                                                         chase costs.
    The EE/CA recommends the usc                                                                            risk      ass~ssm~nts    and    dat:J
 of the zinc-rich sediments as :1 soil                                                                      intt.:rprctal ions.
 amendment on zinc-deficient                    agri~
 cultur;JI bnd. \Vhcn applied 111
 ;Jgronomic;JIIy ;Jppropriate ;Jmounts.
 the zmc m the sediments will
 cnh;Jncc the agricui!Ural prnduc-
 tivity of the soils. Coincidcntally.
 zinc deficiency is by far thc most
 important micronutrient prohlem in
 C;difomia soils. Spcei(h.:;tlly. a~n­
 L·ultur:.~l soils in th...: Ktverh:lllk :trc:1.
 :1nd t..:'\.ll.:ndmt. thrnu);:h!llll the :trc:t'
 nf eastem Stanisbus :..~nd eas1cm
 .\1crccd ('lnlllties and S\ltJ!hcrn S:u1
 Jll:lljlllll ( ·,1unty. art: 0..:\lrl-:tdcrcd t,1

  IX:    .111101\_:.! ihL' 111!1'\ /11\L·IL''PPibl\l'
  '>lltl ...   Ill   thl'   SUIL'
            Program Funding

                    n FY 84, Congress consolidated and expanded DoD programs to clean up hazardous wast~

              I     in a separate appropriation entitled the Defense Environmemal Restoration Account
                    (DERA), under the Defense Appropriations Act. This has allowed the Depanment to
            accelerate the work and add research and other components to DERP. More than 84 percent of
            DERA funds have been allocated to the IRP since FY 84. In FY 90, 96 percent was expended
            in the IRP ponion of the program. This heavy emphasis is expected to continue in FY 91 because
            of the growth in these high-priority requirements. The FY 91 DoD Authorization Act provides
            $1.1 billion in DERA funding.



                                                                                The Depanmcnt has estimat~J
                                                                             the total cost of future DoD IRP
                                                                             activities at installations and for-
      BOO                                                                    merly used propenie:s to tx
                                                                             S9 billion (baseline) to S 1.\ billion
                                                                             (adjusted) in FY 87 dollars. The
                                                                             bulk of this funding is for the more
                     D    HWO


      600
                     •
                     •
                          BOOR
                          OHW
                                 ~-~--·
                                                               601.3
                                                                             costly RD!RA cleanup phase of the
                                                                             progr:.~m.




                     •    tAP                                                   The baseline cost estim~Hc v.~1:-.
                                                                             developed from infonnation on slit:
                                                                             cleanup   rcquin:mcnts    that    1:-.
 "'
.!§                                                                          currently avaibhlc. The adju.-:tcd
0                                                                            cost estimate includes prnjcctiono.;
Cl
                                                                             for sites where e.xtenstvc Uat;J
0     400                                                                    collection i~. undcrway. Once thr-.
"'
c
0                                                                            wor~ i:- C\lmpktc, :.1 bcucr Jetlr1Lti11n
=
:E
                                                                             of thL' :-.lit.:'. th;ll ;JCiu:il!~ rc.:qu1rt·
                                                                             ~kanur will tx po:-.sihk


                                                                                   Clc:ulllp SI;JIHbrd'i a!..;,, rt:ll\.1111
      200                                                                    unccnam. Some agreeml!niS for
                                                                             remcd1:d :Ktion at NPL in:-.t;JllJ.lmn-.
                                                                             h;.~vc n,), been rcJ.chcd ''-Lih EP·\
                                                                             :md ... t:ut· agcncLes. Don\\ 111 rcvLC\\
                                                                             the      h•l.d        progr:1111         ~·,,..,,   c . . !rnr.tl;·
                                                                             ;••.:rr ... !J,.dl\ .t .... llh·]•r••;:r.r·•         ·:~otlll"

        Q.                                                                   .I ltd    IIi• 'll"     111!1   •r 111.11 I< 'I!    "··   ',,.

                                                                              i"· iii.:···
    To pn.:p:1rc rcmcdi;d project
lll:lnagcrs for scoring sites for the
f.Y l) I program. DoD d..:velopcd an
inh.:nsivc twn-day DPM trainin~
class. The class includes cxplJ.na-
tions of th~ model components. data
input rcquircmcnrs, and hands-on
scoring cxpcrienc<! u~ing the uuto-
matcd DPM. Approximately 150
DoD personnel altcnded classes
held in various locations throughout
the United States in FY 90. These
personnel scored nearly 300 sites
where    remedial      design/action               is       DPM training prepares IRP project managers to score sites being considered tor remediation.
planned for FY 91.
                                                           relevant to decision makers involved
                                                           in the remediation process. Topics                                          DERP Training of
Defense                                                    included: CERCLA: RCRA: SARA:
                                                                                                                                       High-Level Personnel
                                                           the Historic Site Preservation Act:
Environmental                                              the Clean Air Act: the Endangered
Restoration Training ·                                     Species Act; the National Environ-
                                                           mental Policy Act; fiscal ~nJ con-
                                                                                                                                         In the spring of 1990. the Air
                                                                                                                                      Force t:stab!ished an environmental
                                                           tracting laws pertinent to environ                                    4


                                                                                                                                      course for their commanders and
   In late FY 90, a contract effort                        ment~l is.sucs, ~n introduction to
                                                                                                                                      general officers. This intensive one-
was initiated to study the full spec-                      law, legal research. and civil proce-                                      ~·eek course challenges senior lead-
trum of training requirements in                           dure; sovereign immunity; enforce-                                         ership ro become the drivers for
DERP. The first phase calls for a                          ment mechanisms; and personal                                              preparing scht:duks for cleJ.ning up
needs assessment of all key indivi-                        liability.                                                                 sites on their installations. devel-
duals involved in DERP activities.                                                                                                    t)ping a tearn approach with regub-
Particular aucntion is being given to
installation commandcrs. directors                          IRP Training of Air                                                       tnrs for site ckanup. and estah-
                                                                                                                                      lishing a working relationship with
of cn!.!incas ::md housing. ~nvirnn­
mcnt~~l coordinators. onsitc workers.
                                                            Force Personnel                                                           cummunity leaders. This course will
                                                                                                                                      J-.c offered fl)Uf times in FY' 91. Tn
and DER.P project management                                                                                                          d:11~. mort: than 60 senior leader~
officers. ,\Jditimul efforts include                             An installation restoration course                                   h:tvc ~Htt:ntkd the course and it is
identifying training th:1t current!~                       off~red      by the Air Fore~ lnstitutL' of                                anticipated th:H ova 100 mdividu:1ls
c."(ists that can b..: directly or                         Technology J.t Wright-Patterson                                             will attend in FY q I.
indirectly used to meet DoD's                              .-\FR. Dayton. Ohio has proven very
needs. Pl)llow-on work will incluJt:                       :--ucccs.sful. More than 2fX) engi-
dcvc!opin!! and t~.:stin~ :1 pmJCL'!                       IIL'L'rs. lawyers. public affairs pcr-
111:111:1)-!L'f·..;  l,.'OIIrSt' (,!f lli..'W              :-;pnnel. and hiocnvimnrnt.:ntal engi-
crnp!PYL'L'"        workin).! v.1tlnn thl'                 lll'L'f" have l'X:en tr.Iined. TI1is
:\nn: "Y"tcnl.                                             ~,:Pur:--e provid~s an overviev.· uf Air
                                                            h~rce policy and nunagernent guid-
                                                           .111\.'l'_ hydrogeol1lgy.nlmrnunity and
Environmental Law                                           rt').!.Ul:ltnry rel;1tionships. interagency
for the Non-Lawyers                                         .l;.:rL'clllc:rHs. and cleanup c.Jse h!:->ltl-
                                                            rll·.., ·nle ..:our ... ._. ,.., offered inttr
                                                           111:\l· .... 1 ~L'.H         .u1d         11    h    ,1/lll~,·tp.l!cd

                                 ,:I I' ~   ~ : '' ' : :    !11.1!   ,•\t'l     \(lll        Ill\   It\   ld!i.d ...   ',\Ill   ~"'
                                                                     · 1 1·.   r ~      •·
"' ( "I'    >·LIIttlii:II ( )il and I   bt:trdtHl'-.    Suh..,Lull.. ·~·, l'tdluiH,ll t   ·,,rlltii).!L'Ih..::··   Pl;tll
~1-Rt\1'    ~-~~ Furth~..:r 1-:L·spons~_.· .-\ctit)J\
                                           is l'l:llllll..'tl
NIROI'      Nav;d lnduslri"l Reserve ( )rdn;ulL"L" Plan I
NI'L        N"lion"l Priorilics Lisl

ODASD(Iol   Office of the Deputy Assislant Sccrclary of Defense (Environmenl)
OEW         Ordnance and Explosive Wasle
OHW         Olhcr Hazardous Waste

PA          Preliminary Assessment
PCB         Polychlorinated Biphenyl
PPM         Parts per Million
PRP         Polentially Responsible Party
RA          Remedial Action
RCRA        Resource Conservation and Recovery Act of 1976
RD          Remedial Design
RD&D        Research, Development and Demonstration
RI          Remedial Investigation
ROD         Record of Decision
SARA        Superfund Amendments and Reauthorization Act
SI          Site Inspection
TCE         Trichloroethene
US ACE      United States Army Corps of Engineers
uxo         Unexploded Ordnance
voc         Volatile Organic Compound
List of Acronyms

AD          Anny Depot
AFB         Air Force Base
ANAD        Anniston Anny Depot
APG         Aberdeen Proving Ground
BDDR        Building Demolition and Debris Removal

CA          Cooperative Agreement
CERCLA      Comprehensive Environmental Response, Compensation, and Liability
              Act of 1980
CFC         Chlorofluorocarbon
DERA        Defense Environmental Restoration Account
DERP        Defense Environmental Restoration Program
DLA         Defense Logistics Agency
DoD         Depar1ment of Defense
DOE         Dcpanment of Energy
DPM         Defense Priority Model
DRMO        Defense Reutilization and Marketing Office
DSMOA       Defense and State Memorandum of Agreement
EPA         Environmental Protection Agency
FS          Feasibility Study
FUDS        Fonnerly Used Defense Sites
FY          Fiscal Year
GPM         Callons per Minute
HRS         lla1.ard Ranking System
!ITW        fb;:trdPus ur Tuxic \\/asiL'

1.\(;       lntL'r:t~t....'lll'Y :\~r~L'rllL'Ill
II\ A       lnll'rim 1-\emcdi:d Action
II\ I'      lrht:III:IIHlfl   Rt..·_..,,,,r:ltillll   f'n,~r;un
11\1'1·<;   fn,t.tii:IIH111 f{L'"!I,r:liiCHI          Tt..· . .:hntdtl~: { ·~~~~rdtn:ttlrl~   (   ;r,'lll'
I~\         lr1 S1ttl \'ltrifl,_..tiH'Il
I\ I l      I·>Jt \ ·lf'•'i I l,·l'~'"llltlll
                                               .
                                               ,
                                      .        '~
                                                     .'




                                                                . ·~
                                               ......:···r
                                                                 •

                                                       ,,




             SUMMARY OF

    ENVIRONMENTAL RESPONSE ACTION.
                                                      ' 't
                                          ~·   ·,,    .;, :·:.~
                                                      ''
          AND COSTS FOR THE                                 '          .




     FIRST ROUND OF BASE CLOSURES .
                                                          ~.:        ~·




'



t
I

I
                                    A~":·    BASE       CLOSURE/RE~i..l6!o!MENT
                                    EN'i!RON~ENTAL 'ESFCt~SE            ACi iONS
                                                            i S(h)i))

CHESG~Y /DESCRiP:Iml   PRIOR iT'i                 LOCATION              STAiE      FY ll9l FY 1992 FY m3

RUFS                     !A         ALABAMA HAP                          .,
                                                                         H.                               0              0
RA                       !A         ALA?AM AAP                           AL         10125             12771           100
RUFS                     lA         PUEBLO AD                            co          7165               750          300
?.A                      !A         PUEBLO AD                            co           350              2500         3000
RifFS                    ~A         UPhHILLA AD                          OR          mo                4200          bOO
RA                       1.~        UMAiiLLA          AD                 OR           400              6000         9700
                         !A         AMT                                  M           2601)             2000        22500
                         lH         HIH                                  MA              50           24200          200
RifFS                    !B         BENNETi ANG                          co           500                    ,j        0
RI/FS                    1B         CMERON SW ION                        \'A         1250                  0             c
!1H                      lE         CAMERON SiAiiON                      VA            550               200        537=
R!/F5                    lB         CODEA RivER                          AL            351)                0            0
RiiFS

R! /FS
                         .'
                         lB
                         ..
                         lB
                                    tFENSE MP ASENC''
                                    DE=:Hs: ~A? AGENCY
                                    Fi DES MOINES
                                                                         MDW
                                                                         ~o•
                                                                         lA
                                                                                       100
                                                                                         0
                                                                                       371)
                                                                                                           0
                                                                                                           0
                                                                                                         150
                                                                                                                     200
                                                                                                                     4i)0
                                                                                                                        0
o.~.

""                       lB         q D~S fi!OI~E5                       lA                              750        1000
R;IF:                    18         Fi Dl'l.                                                             500             ,;
p~                       lB                                                                           ~4~fi0        2400
P.! ~~~                  lB         FT DGUSLHS                           UT            54<i                  t")
::.·.                    lE
""                                  ~T ~OU6LAS                           UT               0                 0
                         lC         F~     :iCLABIPD                                   ! 50                 0
                         lS         F: ;;aLA3!R"                                                         3CC:
                         1?                                                                                 0            0
                                                                                                      3~(;!}{i

                         1?                                                                              35(·            0
                                                                         •:..

                                                                                                             0
c ~ :::
                                                                                                             0           (;
                         lt:                                             c~
                                    i~:!H~H                              !S            3(·(·                              ~·
                                    ;:FFERSGN PE                         IN          100,:·
                                    r.mLAM            ~L     P.SV                    ~ ~ 1)(·                             ·.::
~:      . =:                                                                                           100•)         :jt)

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r:; ::
                         13         cE•:SST~N          AD                                                     0     275j
                         !B         .~EW    ORLE-NE
                         :r         ~!~.£    H?5                                       ., .....
'"                       ~?         ~~:~: ~~E                                                                 ,,          \'
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                         !?         .~G!iT!A:       STC; ::-H[
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                                                                         'I
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                         !:         . :.~ ~"·;     -~.;::~:·.\:::
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                                    =~··     .·    :.~:..:s:~~



                                                                                                  ~   :·:·.j l.,
CC~?!.:;.\:~:


CUL ':':~;:;~ RESOURcES          lH    f1 DEVENS         M        10        10           oj
cu~ n~"~~ RESGG.~ES              !H    PUEBLO AD         co        I)       20       ~\j(,'
C~L ;:JRH ... ~~SOURCES          1H    UMATILLA AS       0?.       v        20       !00
~~L !UE~.._         RESOURCES    !H    AMT               M         0       2Q1;          ()

~:.J:..T~R:i!..     RESOURCES    !M    CA~ERON STATiON   VA       50        10          0
:':!.!!.. iURH!..   RESOURCES    !.~   CODE ARIVER       AL        0          0        2b
CULERriL            RESOURcES    !M    Fi DES ~Q!NES
                                                         ,.                 15
                    RESOU'iCES   !M    FT DOUGLAS
                                                         ·"       35                   0
C~LTURA~                                                 UT       bO        30         0
CUL T~1 P.Al        RESOURCES    !M    FT MEADE          MD        0        90        50
CULTUP.A!.          RESOURCES    !M    Fi SHERiDAN       IL       20        4•j        0
CULTURAc            RESOURCES    !M    FT msm            N~      140       400       600
CULTURAL            RESOURCES    1M    6H!THERSBURE      MD        0         0        10
S~LTURA~            RESOURCES    1M    LEiTERKENNY AD    PA        0        2·j         0
Clll ':'W'"l
 Ul..ll.or.f-!._    RESOURCES    !M    NEii ORLEANS      LA        0       2t'JS      H
c~~:.. :'jr..;:.. RESOURCES      1M    NlKE APe          MD        •)       !B           0
CUL!URHL RESOURCES               1M    PRESIDIO OF SF    CA       61          0          0
CULTURA:.. :tESQURCES            !M    YUM P6            HZ      SO!i         •l         0

SUBTQ"T-?.!..                                                    879      1095      !COO
TGTHL                                                          so~~~    1:~:~s     73~00
                                                                                                                                      Pri              BYl_O~      8Y2_9)



         N-oother A,:B             CA RiffS                  /I.C ond W             ~i1•s                                          lA         SQOO
         Mut~tr         Af8        CA llffS                  2) $11H                                                               lA       52.05•
...
OS
         P..,.. AF9
         Mathor AlB
                                   NH iljfS
                                   CA       11/FS
                                                             e Si1•s
                                                             2) Sitet
                                                                                                                                   lA
                                                                                                                                   lA
Af       Cf.o""'• AlB              ll       R~/fS            R.ntdloll~~;gor•O" at                       e S••e~                   lA

...
A1       P.-o AfB
         No<too AlB
                                   NH
                                   CA
                                      Rl/fS
                                      RiffS
                                                             18 Sittl
                                                             Slagt 4
                                                                                              u,..,,
                                                                                                                                   lA
                                                                                                                                   1A        52.500
                                                                                                                                                        SA.SOO


...
AF

A1
         C-eorg• AFB
         Mathe' Af9
         p_.Af8
                                   CA
                                   CA
                                      RI/FS
                                      RiffS
                                   NH RI/FS
                                                             Svppl.t,...ental C~
                                                              8 $11'"' (SWAT \A/ote"i
                                                              8   s...
                                                                                                        # I                        1A
                                                                                                                                   lA
                                                                                                                                   1A
                                                                                                                                               5600
                                                                                                                                             52,00C
                                                                                                                                                                    52,500
AF       C"'nvt• AFB               I( ltlffS                 iei'"OYCII Contotnino'~ Soi[                                          lA          SQ6
Af       c-.;. AFB                 CA Rljl'S                 P!Qn., R_,j <J Do<k""' Qp Ur~ tt J                                    lA        S1.00C
AF       Pecw Af9                  NH RI/FS                  26    s•.. 51094' 3. A. & 5                                           lA        58.600
/.1      0.01'\ute Af8             ~  111/FS                  Re........Ciol   mv.Siigot~M                                         lA          5'37
A•       Goc'3" A18                CA RiffS                  Plo ... RO(e'd ol o.c;. o• Op u.-;o II •                              1A        SI,OOC
Af       0.0!)!! AFB               CA RiffS                   rJ.u!ti-~lt                                                          lA                   51,500
                                                                                                                                            $24,037    510,350      52.500

RO/RA
/.1   Moll.o< A.cs                 CA RO/RA                  .u $ita4                                                              1A                   SI.SOO        5500
#        t..,...,.,
              AlB                  0. ROllA                  \cndloil 112                                                          1A                    S500
A~       C~rwte          AfB       ~  RD/l!A                 \codl.ll s;tn II 1 throooh a •                                        11.      s1.000 se.ooo
1>1      George AfB                CA RO/RA                  MJrr-vte                ~                                             1A                   Si,OO?
Af       NonO<" AfB                CA RO/RA                  Coif CourH Optrobie Urul                                              1A                   51.00C
JJ       Ctot;• AJ!                0 10/RA                   p.~     on CroYnd....oler                                             1A                   51,800
Af       N""oo AFS                 CA RD/RA                   M! S..0 Opo"lbl•                  l.Jnrt                             IA                                 S200
...      Vo"'9" /.IB               CAP.C/iA                   Multi-sde                                                            lA                   S1,00C
AF       Nof10t1 AfS               CA RO/RA                         0rum Sto...,ge A.r.-:1 II l
                                                              WQ"",.r!t                                                            1A                                $125
AF       G4-ors•AfB                CA RC),IiA                 O?f~reonal Costs .~ -.4 on Groundwol.,                               1A                                S10C
M        Nor.on AF9                (A RO/iA                   W•'JI<enal c.osr~. (."ntre~l Be~ Op U~t                              l /..                             5200
Af       Peose AFB                 NH RD/RA                  )<! T<>' Coil                                                         1A                                $300
 .. c:   Nor'l0t1 AFB              CA RD/RA                   Uod..g..,..,d WO* OJ 5torog. T_.;                                    14                                5125
         PeaH A.t8                 NI-l 10_19;,..             0,. C.:.ts, lond!.ll II 5                                            1A                               S2.000
         f'..:ot!on AlB            CA RO/RA                   Opo-.ti.,.,.,l Coon, NO ~blo                           u,,,          IA                                $200
AI       Peow AFS                  N~ RD/RA                   !ldg 1118                                                            :A                                5300
IJ       ~0':"1 .AI!               CA RD.Ii~                  Lond r:u • 1                                                         1"                                 s100
,u.      Mot~r AFS                 CA R?/l!A                  ACa~ws;,r:-s                                                         1-"                    5600
/>F      No<too AfB                CA RO/RA                   AVG/-.S Spol! AI"!'CC                                                1A                                 S\25
A'       ~I'M•           AFB       ll RD/RA                   Bldg II 9 3 2 - Slvd;~~t P11                e~nd F"~   p,, II '2     1 ».
JJJ      ~C"!           A.F9       CA RD/RA                   F.,.l Sl.,ds• .....                                                  lA                               52.000
AI       P~s.cAF8                  NH RD/RA                   Land Fill        It   S                                              :A
AI-      NoftOf'l       .AF8       CA RD/b                    \.ondf,ll II 2                                                       1"                               s~ .250
Af       l'orlo.'       AfB        0 RD/RA                    fWtO ~~t Uno~                                                        1A                   $2.0CG
/JJ      N:>rton .a_,:e            CA i0f11A                  ~ ~. r#'S' CP'!'ab1. 'Jf\1                                           1A
~~       !'<.lo.,on Ate            CA RD!RA                   ~atiCf'IOI             CM. C~n1ral Be~ ~ Ur::t                       IA                     S20C.
AI-      t.Jo.tfol"' AFB           CA tD/RA                   Lo--df,H • 2                                                         1 ..                            SI~.OOO
,t.f     C.O.g< AF8                CA RO/RA                   POlleoch Ad, WCSJe Bu~ Pir. ~.re Tng A.rt>o                          iA                     55(>0
Af       Nc:1cn AFB                0 ROjliA                   ~=u~ Ploor«!ion T~ 14ne tl '2                                        1A
Af       .:~1!' .AFS               CA RD/R~                   ~t?t'ono1 C,.os.ts               NE Q.,~l Are~                       1A
A._r:.   NC""''Y'I Af8           I. CA RD/RA                  51vdgo Oupcocl ' - '                                                 iA                               S:Z.!:xJ
Af       C,..~ .AF~                 CA RD/RA                  Opt"•attonol Cod\ "-'C.                  Cispose~\ Ar~o              IA                                 S2ac
Af       t~Ot'          -'.f6      ,CA RO/R;.                 i.,'nd"!1'9rou,, j:'f'n"'C'J'O"'d" Tonl                              lA                                 ~i25
A.J      P..:lwo A~                 NH RO/RA                  Bldg•113                                                             , ..                               530C
A'       Norto., AFa                CA ROIRA                  C'ca Col.li. C?Jf Cov,.,~ ~rob!• ~""'~                               IA                                 S200
A.:      M.o-htr Af:                C• a:>/R.t.               :...~ o"CC W Sit~                                                    lA                   56.~
:...'    C~anvl• A'S               ll       RO/R•             7.0 :,':lll"'ti.. ..,.., lOt ~ ~·••s                                 1A          !>5C          s:          SO
:....r   ":1-:::~"~.::" A.F9       ~~       '0-"ll~           F.,.m~ and 7te-o' a• ~a~:; 5:1~' • l l~r., • "' i.:..                                     Sj ..x.v
AF       NOf"'"!W" .418            CA ~0.1?'­                 Cro5 ~- <;.:.1~ ::.O..n.e 0;:>-.-obl~ l,)o-o..r 1A
Ai       f'.~Ot'::l:'> AFD         .:::..:. RD IRA            ~..;: ea .. 0p'!'M:b~ ~ ......                  1•
Ai       Nottor. A~8               -:.• RO/h                  5.-'20C Ta,..\                                                       lA                                 5150
..r      c-, a· AF9                CA ~/RJ).                  ::~ :..OCh Fid_ \l'.'o~" Bv" P.1. Jr""t Tf'l4i A-..c:                1.r..                              S'OC
,.,      ~e   ... Ol"   A.Fa       CA ROf';.                  WO\rt• '"~ II •                                                                                         s:~5
;.,•     0 c-ov.o     AI   e       "-~~ lC.'~.:.              F•'1' • ro;lono--; .,...., ' 7                                                            5'.!15C      S1.:!50
 •:      :'"lc'-CV'     .o.t:,     (;. Ot;:)/P.-1             ~~~-'·:3plofo""9 !,~              Sc-;! ~:!
         N':"'!.!)r     AiS                                   ~       .;:et,,       rK.P     Cpeooob!• l;.·-ut
         :,..:Y;e        AJ~       :J.      ot-;>~            "'J~    .....ocloo Jl~ '.'\/.;;._.. "-~         0 •- f.,_ T"'g 41M    1 A,
;.J      ;.f"O\P A.:~              t-:'-. ~jll.:.             J , .. ~.3 ..... "')      A......: • j-
=kf~---~~~~g·~~·~l~?________       . . .-   rCc;'•c:~:.___c_.'~- t. ':""" ~""'!> ........ ;-o·•·                                               S:5C
        !,~,~e Tctai                        tO/ItA                                                                                           ~2.J;;Q   S~J.050      S2J.225
                                                            NAVY      BAS~
                                                                       CLOSURE/REAL!SNHENT
                                                            ENVIRO!H1ENT~L RESPONSE ACTIONS
     CLEANUP:                                                                (SOOO)

     CATEGORY/DESCRIPTION                 PRIORITY                    LOCATION             SiATE   FY 1991 FY 1992 FY 1993
       • ,,.. T
     pHr:l.~o                                1B             NAVSTA   NEll YORK              NY        230          0                  0
     PAIS!                                   1B             NAVSTA   PU6ET SOUND            WA         50          0                 0
     RD/RA                                   1B             NAVSiA   PUGET SOUND            WA          0      500                   0
     RifFS                                   1B             NAVSTA   PUSET SOUND            WH        100          0                 0
     sr                                      1B             NAVSTA   PU6ET SOUND            IIA          0      ,.
                                                                                                                 L"                  0
     R!                                      1A             NAVSTA   PU6ET SOUND            WA           (I    700             500
     R!                                      lA             ~MVSTA PUSET SOUND              liA          0     300               0
     UNIDENTIFIED                            1A             I'IULTIPLE                   VARIOUS         0    1575                   0

     SUBTOTAL                                                                                         320     3100             soc
         JMPL!ANC::

     F:CP.H USi                              1H             NAVAL     HOSPITAL PHIL         PA        150          I)
                                                                                                                                      (;
                                                                                                                                      v

     TSCA ?CB                                2H             NAVHL     HOSPITAL ?HI~         ?"
                                                                                            .H          0          (1              50
     ASBESTOS                               3H              NAVAL     HOSPITAL PHIL         PA           t)
                                                                                                                   ,,
                                                                                                                   ·•·
                                                                                                                         f I "70::
                                                                                                                         .... !t ... .,..
     RADON                                  3H              NAVAL     HOSPiTAL PHIL         ?A           0         0            100
     \IAiER (PR~TREATi                      3H              NAVAL     HOSPITAL PHiL         PA            '        8                  0
     PROPERTY ASSESS~ENT                    3H              NAVAL     HOSPITAL PHIL         PA
                                                                                                         v


                                                                                                         0
                                                                                                                   ,,              so
                                                                                                                   ·-·
     RCRA UST                                1H             NAVAL     SHl BROOKLYN          NV•         50     300             0
     TSCA PCB                                ..,:.:
                                                 .,         NA\'AL    STN BROOKLYN          NY           0       0           75(:
     ASBESTOS                               'U
                                            ·.Jii           NAVAL     SiN BROOKLYN          NY          0        0          6425
     PROPERTY ASSESSMENT                    3H              NAVAL     STN BROOKLYN          NY          0        0             100
     RCRA UST                                lH             NA'IAL    STN PUGET SOUND       WA          v       20             200
     RCRA HAl WASTE FAC UPGRAD               lH             flA\'AL   STN Pij6ET SOUND      iiA       2j0      ~•n
                                                                                                               LOV               0
     ASBESiOS                                2H             NAVAL     STN PU5ET SOUND       WA        250      200          3000
     U~lDENTiF:ED                            !H             ~UlilP~E                     VA~IOUS         .
                                                                                                         ,
                                                                                                         n     .~.,
                                                                                                               •"- ...
                                                                                                                               .,
                                                                                                                               '
     SUBiGTAL                                                                                         7·)3     900       moo
     T8T 14:_     E~:n RGWI\E~TA!.. F.~5?0NS::        AC: I GNS                                      ':·o~
                                                                                                     11\J>J   4000       226       1
                                                                                                                                   )(·




!\

     \
     ~.
..,
PA/i)l
         Pe<~w      AfB            N>iP4/SI
                                   NH P4l51
                                                   u~r   S<•...
                                                   WoSJ~ t~       f "4~9;:t Plo..,!
                                                                                                           lA
                                                                                                           lA
                                                                                                                   5450
                                                                                                                   5117
         P.o~       AF8
         Sub T01ol                    PA/SI                                                                        5567        ,;o    ---"Tcl-

..,
Cther

AF
         I'.J'!)tfotl
         ~'Jn\.lte
                        .AI8
                         AFB
                                   CA
                                   ll
                                         Olhe•
                                         Ohet
                                                   l T MJr.pl4 5ir"
                                                      M
                                                   Long T..-m ~'()r\"9                ".,...r ~"'d r'•o'
                                                                                                           1.~
                                                                                                           lA
                                                                                                                                        3~00
                                                                                                                                        52$0
.>.F     Otanut• AFB               ll   Othot-     Qt.-s'lt RPM ~vppo"'                                    lA       560       s~o        S60
AF       Goo.gt AFB                CA   OthO'      ~M/SUJ'PO"                                              16      $120      512J       512~


...
Ai

...
         P..a" Af8
         P.aM AFB
         Nottot' Af8
                                   NH   Other
                                   f,jH Olhot-
                                   CA Other
                                                   UST PtrnoYQI1
                                                   Sotl RttriOYCI gh,...
                                                   L Mu!hpl" ~
                                                    !M
                                                                              ~•      1 ~!
                                                                                                           lA
                                                                                                           I"'
                                                                                                           14
                                                                                                                   SI?J
                                                                                                                   s173
                                                                                                                             5~sc

...
"''      ~oAFB
         Nor!"" AFB
         Mo"'-tAfB
                                   CA Othe<
                                   CA Othe<
                                   CA Ot.....
                                                   lTM .Abo"<b-.d W..l:
                                                   On-sit~ IPM ~
                                                   0.-... e&PM!~
                                                                                                           lA
                                                                                                           I~
                                                                                                           !A
                                                                                                                    5100
                                                                                                                   5120
                                                                                                                    $120
                                                                                                                             5120
                                                                                                                             5120
                                                                                                                                        5120
                                                                                                                                        5120
"''
P.f      P•QM AF8                  NH Othe•        On-~eP.P~y~~/~
                                                   eo~ w~~e w~              P.o-      :~   ..,.., •5
                                                                                                           lA       Si20     $120       ~120
AF       ~rs- A~e                  CA Ott,•                                                                !A      5600
         Sub      T01ol                 Otho.                                                                     51.556    51.190    Si.St?::•

Mgr(Mp<
AF       ~Afi                      CA Mgt!~     TOY                                                        lA       520       52C         $20
AF       p..,. A.<&                NH l>lgt/"'9<ToY                                                        lA       520       520         520
AF       Mcl~.et        Me         C). N<JI/Mp• TOY                                                        lA       520       520         520
AF       OcJ~ute     AfB           ~   Mgi/Mpl TOY                                                         lA       520       520         520
"!       !\l.of1.,. AF8            CA Mgt~ lOY                                                             lA       S2~       520        520
         S...-b   Totol                  Mst/Mg                                                                    S.10Q     SIOC       SIC'J

         i;ubTolal                       R'fSTORAnON                                                             528 590   54'/>90   ~27,415




                               \
    ..    . ..


                AtB
         (:o,.vt~                  ll   UST T.wing/Alldt lt"41otlcli0'1                 IH         $25
         Pt-OM AlB                 NH   US T llf"l'\\'o'CI                              IH     520;.1      ~2QQ
~        "-'oo''c..    A~8         CA   A~     v.•vol       ~Nil.... Wro•l",..tf'l p~   'II                 5200
.s       '.-;n.e A'8               NH   Monpawo< !C-M 1 J         t. G$6}               IH         SICS     5108
.s       Co.....,tto   Af9         ll   Al.cl•~•,,     {GM13 & GS.6l                    :I'    ~·o&         ~10&      $lOS
t.}      c;..,'9"      .u:s        CA   Tonk Testing                                    IH                             560
t.J      Muho                           Eftlol"f'()nmentol S.Mces Q4,,.                 IH     s.oo       $1,719    s t.o; •
••
M
         Nono" ,t.FS
         Motlo..,r     AFB
                                   CA
                                   CA
                                        US T lemoYCII
                                        Mon_. !OM 1 J & u$6}
                                                                                        IH
                                                                                        1"1    s:oe
                                                                                                            $600
                                                                                                            s;os
                                                                                                                      S60C
                                                                                                                      S\Oij
t.}      Co,.vt• Af9               ll   us r r...,.....,'Y CJow..,                      IH                             $75
M        Motho• AfB                CA   USTt..,_,l                                      IH                   SA5      $180
AJ       c.,nut .. AFB             ~    US T Rtft'oval                                  IH                  SJOO      SJOO
IJ       Geo<9•        AFB         CA   Mo"f>>WW• (0M13 & GS6l                          IH     SlOB         $108      SICS
M        Non""         m           CA   Monpo-o< !OM 13 & GS6l                          IH     StUB         5108      $108
Af       C..O.g< AA!               CA   Closur~ Plon 1 TSO. HA Vv'T'P                   IH     $1)1)
         ~-vb Toro/                     Prionty I                                             S 1,A05     SJ,60A    52.661




Jl.F     G.otgt Afll               CA   ROtA ~ of J.foN Storog• Fact!~                  IIH                           S100·
Af       No110"'A.FB               CA        ClowN Pion
                                        (li!MO                                          IIH                s•sc
AF       Mot~• A'B                 CA   RCRA ao..,... Coo<i                             UH                            S500
                                        US T Monogem..,. Pion                           llH          SJ
~·
         Molho< AFB                CA
AF       .Y.atlo:~r    AfS         CA   ~CRJ\ Co<To<tivo Act:or•                        IIH                           5700
AF       Con..:te AFE              ll   UST ~rnent Pion                                 !H           SJ
                       AFB         CA   P.CRA Oo.vf'f t:J Fir" T..,.;,.,'"g.A~          II~                           s•oo
""
...
Af
         c-<ge
         N'~l-.c-r  AH!            CA
                                   NH
                                        A;r Credit ff'Qnder Cmh.
                                        A,;.le~l     c:l.   ~ Tr~•r !.JI"e1
                                                                                        !IH
                                                                                        IIH
                                                                                                                       $20
         P~s.e     AFB                                                                                                S200
AJ       Conul"!' Af8              ll   lOA CotrectNe A(t;Ofl\                          IIH                s•oo
         Svb Total                      PnOI'Ity II                                                  S6     5850    $1,620




         Geo~•AFS                                                                                          S4S62
         SvbC.ol                                                                              s.   $01    $.41fi6   50"2t.:




                              l,
'
    .   .
                                               DOD 61!i5.9-STD




                   DEPARTMENT OF DEFENSE




            AMMUNITION AND
            EXPLOSIVES SAFETY
               STANDARDS


                        JULY 1984




              ASSISTANT SECRETARY OF DEFENSE
              PRODUCTION AND LOGISTICS
                                                                        DoD 6055.9-STD



                                    CHAPTER 12

              REAL PROPERTY CONTAMINATED WITH AHHUNITION AND EXPLOSIVES


A.   SCOPE

     This chapter contains·particular policies and procedures necessary to
provide protection to personnel from accidental injury as a result of con-
tamination of DoD real property by ammunition and explosives. It requiries
identification and control measures that are in addition to, not substitutes
for, those generally applicable to DoD real-property management. Contamina-
tion as used in this chapter refers in all cases to contamination with ammuni-
tion and explosives.

B.   POLICY

    !. Every means possible shall be used to protect members of the general
public who may become exposed to hazards from contaminated real property
currently or formerly under DoD ownership or control.

    2. Permanent contamination of real property by final disposal of ammunition
and explosives is prohibited. This prohibition extends to disposal by land
burial; by discharge. onto watersheds   o~   ~nto   sewers, streams, lakes, or water-
ways. This policy does not preclude burial to control fragments during author-
ized destruction by detonation, or disposal by dumping in deep water in the
open ocean when these procedures are authorized by the DoD Component concerned,
and compliance with applicable statutes and regulations relative to environ-
mental safeguards is ensured.

    3. DoD real property that is known to be contaminated with ammunition
and explosives that may endanger the general public may not be released·
from DoD custody until the most stringent efforts have been made to ensure
appropriate protection of the public. Some contamination is, however, so
extensive that removal of the hazard is beyond the scope of existing tech-
nology and resources.     Such properties shall be retained until rendered
innocuous.

C.   PROCEDURES

     1. General. Some DoD real property is contaminated with ammunition and
explosives due to its use as manufacturing areas, firing and impact ranges,
and waste collection or disposal areas including pads, pits, basins, ponds,
streams, burial sites, an·d other locations incident to such operations.

     2.   Identification and Control

        a. Permanent records, including master planning installation maps,
shall identify clearly all areas contaminated with ammunition and explosives,
and shall be maintained by each DoD installation. These records shall indicate,
to the extent possible, positive identification of the ammunition and explosives
contamination by nomenclature, hazard, quantity, and exact locations. If the
installation is inactivated, the records shall be transferred to the office
designated by the DoD Component concerned to ensure permanent retention.


                                        12-1
        b. All contaminated locations shall be placarded appropriately with
permanent signs that prohibit entrance of unauthorized personnel. These
signs shall be multilingual, when appropriate. The DoD Component concerned
shall ensure periodically that such signs are restored and maintained in a
legible condition.

        c. Active firing ranges, demolition grounds, and explosives test
areas shall be assumed to be contaminated with unexploded ordnance explosive
material and shall be controlled accordingly.

    3.   Land Disposal

        a. Plans for leasing, transferring, or disposing of DoD real property
when ammunition and explosives contamination exists or is suspected to exist
shall be submitted to DDESB for review and approval of· explosive safety aspects.

        b. DoD Component correspondence or reports of contaminated excess real
property shall state the nature and extent of such contamination, location of
contaminated lands and improvements, any plans for decontamination, and the
extent to which the property may be used safely without further decontamination.

        c. When accountability and control of real property contaminated with
ammunition and explosives are transferred among DoD Components, the action
shall be accompanied by a like transfer of the permanent records of contamina-
tion.

        d. Accountability and control of real property contaminated wi~h
ammunition and explosives may not be transferred to agencies outside the-
Department of Defense and the accountability for such contaminated real pro-
perty shall remain vested in the Department of Defense until the property has
been rendered innocuous. By innocuous, it is meant that it is reasonable to
assume the real property is not contaminated with live ammunition or ex-
plosives to an extent that constitutes an unacceptable risk to the general
public. When real property is reported to the disposal agency General
Services Administration (GSA)· after decontamination, information to indicate
the nature and extent of the original contamination and the decontamin~tion
methods used shall be enclosed with the report of excess with the requirement
that they be entered in the permanent land records of the civil jurisdiction
in which the property is located.

        e. Limited-use outgrants may be arranged with other federal agencies
for compatible use of contaminated real property such as wildlife refuges,
safety zones for federal power facilities, or other purposes not requiring
entry except for personnel authorized by the DoD Component concerned. These
outgrants shall include all restrictions and prohibitions concerning use of
the property to ensure appropriate protection of both DoD personnel and the
general public.

    4.   Decontamination Methods and Use Restrictions

        a. Surface Clearing. Visual inspection and electronic detection in-
struments shall be used to locate and remove unexploded ordnance located at
or very near the surface. Later use of the real property shall be restricted
to activities that do not require excavation of the surface such as wildlife
preserves, sanitary land fills, and livestock grazing.

                                      12-2
                                                                           July 84#
                                                                           DoD 6D55.9-STD

                  b. Minimum Depth. A minimum depth shall be used where scarifying          -.·.-
~·.-      the area is both possible and allowable. Mechanical procedures such as rake
          or windrower to a 6-inch depth•may be used and followed up with magnet and
-:.-      rock picker. This procedure will clear the area of all metal fragments and
                                                                                            *
                                                                                            -.·.-
          unexploded ordnance on the surface or buried within the scarifying depth.
          Later use shall be restricted to activities requiring minimum disturbance of
          the surface such as limited agriculture or tree farming.

                  c. Specified Depth. Unexploded ordnance shall be removed to a depth
          below which any future soil disturbance is expected to be performed by the
          general public. Real property decontaminated by this method may be released
          for unrestricted use to the depth cleared. The reliability of this method is
          dependent upon:

                      (1) A determination of the penetration characteristics of the
          unexploded ordnance known or suspected to be present in the soil to be decon-
          taminated.

                      (2) Testing of candidate detection instruments in the specific
          geographical, geological,. and physical features present to determine reliable
          depth of detection for the types of ordnance suspected. An example of such a
          test is contained in DDESB TR 76-1 (reference (;)).
                                                            ("

                  d. Any clearance certification shall list the known or suspected
          contaminates, the method of decontamination used, and restrictions, if any, for
          future use to include maximum safe depth of soil disturbance or excavation.

~··       D.   MINERAL EXPLORATION AND EXTRACTION                                           ;';

   ·.-
....

               I.   Ammunition and Explosives Facilities.
                                                                                             *
*                                                                                            *
··.'.·            a. Mineral exploration and drilling activities are to be separated
                                                                                             *
-:.-      from ammunition and explosives operating and storage facilities by public
                                                                                             *
          traffic route explosives safety distances provided there is to be no occup-
                                                                                             *
                                                                                             .......
~·.-      ancy of the site by personnel when the exploration or drilling is completed,       *
          and by inhabited building explosives safety distances if occupancy is to           *
          continue when exploration or drilling is completed, If toxic chemical agents       ......

          or munitions are pr~sent, public exclusion distances must be maintained to         *
          the exploration or drilling activities. Examples of exploration activities         ;';

 ~·.-
          are seismic or other geophysical tests. Examples of drilling activities are        *
.......
          those for exploration or extraction of oil, gas, and geothermal energy .           -::
 ......                                                                                      -.·:
                  b. Mining activities are to be separated from ammunition and explo-        *
 ·:.-     sives operating and storage facilities by inhabited building explosives
          safety distances. If toxic chemical agents or munitions are present, public        *
 ~·.-     exclusion distances must be maintained to the mining activities. Examples of       *
 ~·.-
          mining activities are strip, shaft, open pit and placer mining which normally       ;';


  ~··     require the presence of operating personnel.                                       *




 ";:;,·st Amendment (Ch l, 8/19/86)              12-3
..                                                                           July 84#
                                                                             DoD 6055.9-STD

               2. Contaminnted Lands. Exploration, drilling, and m1n1ng are prohibited
           on the surface of explosives or toxic chemical agent contaminated lands.           *
           Exploration and extraction is permitted by directional (slant) drilling at a       *
     *     depth greater than 50 fee~beneath the explosives contaminated land surface
                                                                                              *
     *     or by shaft mining at a depth greater than 100 feet beneath such land· surfaQe.    *
     *                                                                                        *
     *         3. Safety Review of Exploration and Extraction Plans. Military Depart-
                                                                                              *
     *     ment approved plans for mineral exploration and extraction on land that is in
                                                                                              *
     *     proximity to ammunition and explosives facilities or land that is contami-
                                                                                              *
     *     nated or suspected to be contaminated with explosives must be forwarded to         *
     *     the Chairman, DDESB 'for safety review and approval. Submission will include
                                                                                              *
     *     information necessary for explosives safety evaluation consistent with sub-        *
     *     section C.3. above. Relationships with other PES should be included.               *
     *                                                                                        *




         #First Amendment (Ch 1, 8/19/86)        12-4
                              AGENDA
        DEFENSE ENVIRONMENTAL RESPONSE TASK FORCE MEETING
                     KIMBALL CONFERENCE CENTER
                         1616 P Street, NW
                          Washington, D.C.
                  JUNE 19, 1991, 9:00AM-4:00PM

9:00-9:20 a.m.      I.    Chairman's Welcome- Mr. Baca, Members
                          A. Task Force Mission
                          B.  Introductions
9:20-9:40          II.    Base Closure Process: Overview-
                            Colonel Hourc1e

9:40-10:00        III.    Task Force Procedures- LTC Bryan
                          A. Charter
                          B. Task Force deadlines
                          C. Federal Advisory Committee Act
                                Requirements
                          D. Operating Rules
10:00-10:20         IV.   Environmental Response Process: Overview-
                            (Col. Jackson)

                    V.    Experience to Date: Case Histories
10:20-11:20               A. Panel Presentations:
                              - Pease AFB (Mr. Cheney)
                              - Chanute AFB (Mr. Ayers)
                              - Norton AFB (Col. Walsh)
                              - Fort Meade (Mr. Torissi)
11:20-12:00               B. Task Force Discussion
12:00-1:00 p.m.     LUNCH

1:00-1:45           VI.     Members of Congress

1:45-3:30         VII.      Discussion of Issue Papers- Staff
                            A.  Staff Presentations
                            B. Task Force Discussion
3:30-3:50         VIII.     Next Steps- Mr. Doxey
                            A.  Schedule of Task Force Meetings
                            B. Schedule of Report Preparation
                            C. Opportunities for Additional Informa-
                                tion Gathering:
                                - field trips
                            D. Task Force Assignments
                            E. Staff Assignments

3:50-4:00           IX.     Closing Remarks - Mr. Baca




                                                                       /
                                                                     Defense

                                                    Base Closures

                                           and Realignments



         -   .··   ~~   -, -r



...:.·   ~ -~~~         .,·..-·c<,:~.·.-··:_,·,,. .1!·~;   :   c3';',_!· . '   ...   '"· ..•
           57%
60
                      Defense as a Share of Federal Outlays
55

50

                                     43%
45

40

35                             39%


30                                                                         27%

25
          27"
20                                                            23"
                                                                         IFY 1992 ..-19.6"·I 18"
                                                                         '-·- - - - '
15
                                                                                    ~
10                                                                        The lowest share
                                                                           in over 50 years
 5

 0
     50          55       60    65         70            75         80     85           90         96

                                           FISCAL YEAR
                         IWhat's at Stake                  I
            Reductions In DoD force structure and budget are dramatic
        Base Closures and realignments are Integral to a balanced drawdown

By FY 1995:
    • The Army will have 10 fewer divisions
        •• 33% reduction In active divisions
        •• 40% reduction In reserve divisions

    •    The Navy will have 1 less carrier and 2 fewer carrier air wings
          •• Battle force ships decline by 94 to a total of 451 -a 17% reduction

   •     The Marine Corps will retain its 4 divisions - personnel will decline by
         13%

   •     The Air Force will have 10 fewer tactical fighter wings - a 37% reduction
          •• 87 fewer strategic bombers- a decline of 32%
               DoD Personn.el
            End Strength in Thousands

                  FY 1990     FY 1995     %Reduction
Army                751            536       -29%
                              \



Navy                583            510       -13%


Marine Corps        197            171       -13%


Air Force            539           437       -29%
                   2,070          1,654      -20%


Reserves           1,128           906       -20%


Civilians          1,073           940       -14%
                     IForce Structure I
                            FY 1990           FY 1995
Army Divisions               28 (18 active)    18 (12 active)


Aircraft Carriers            13                12


Carrier Air Wings            15 (13 active)    13(11 active)


Battle Force Ships          545               451


Tactical Fighter Wings       36 (24 active)    26 (15 active)


Strategic Bombers           268               181
                IWhy close bases? I

•   Forces are going to decline dramatically
     •• All categories of forces affected
     •• Drawdowns from 15% to over 30%

•   Workload will decline accordingly

•   Too few construction and O&M dollars chasing too many projects


Conclusion:
We want fewer excellent bases, not a lot of average ones
     j Recent         Base Closure History                      I
•   Legislation stopped closures for a decade

•   In 1988, Secretary Carlucci and Congress agreed to a Commission
    which recommended:
     •• Closing 86 bases (16 major)
     •• Realigning (plus or minus) 59 bases

•   1988 closures and realignments have the force of law

•   In 1990, Secretary Cheney tried to close additional bases
     •• Old legislation applied
     •• Congress charged list was politically motivated
    j1990 Base Closure Legislation                        I
•   Exclusive process for closing or realigning bases
     •• Except for actions below thresholds
     •• Except for the 1988 closures

• · New Base Closure and Realignment Commission
     •• 1991
     •• 1993
     •• 1995

•   Defense Management Review studies n:tay be Impacted

•   GAO Involved early
           IA Complicated Process I
•   Secretary of Defense
     •• Proposes selection criteria
     •• Develops 6-year force structure plan
     •• Recommends closures and realignments

•   President
     •• Nominates commissioners
     •• Approves Commission recommendations

•   Congress
     •• Confirms commissioners
     •• Oversees process and approves final list
                j Final     Selection Criteria                  I
Military Value:
   1. The current and future mission requirements and the impact on the
      operational readiness of the Department of Defense's total force.
   2. The availability and condition of land, facilities and associated airspace
      at both the existing and potential receiving locations.
   3. The ability to accommodate contingency, mobilization, and future total
      force requirements at both the existing and potential receiving locations.
   4. The cost and manpower Implications.

Return on Investment:
   5. The extent and timing of potential costs and savings, Including the
      number of years, beginning with the date of completion of the closure or
      realignment, for the savings to exceed the costs.

Impacts:
   6. The economic Impact on communities.
   7. The ability of both the existing and potential receiving communities
      Infrastructure to support forces, missions and personnel.
   8. The environmental Impact.
                                                  ---------




     STATEMENT OF SALVATORE P. TORRISI

                 BEFORE THE
  DEFENSE ENVIRONMENTAL RESPONSE TASK FORCE

                    ON THE

FORT MEADE ENVIRONMENTAL RESTORATION ACTIVITIES
   ASSOCIATED WITH THE BASE CLOSURE PROGRAM



                 JUNE 19. 1991
STATEMENT OF COLONEL LOUIS M. JACKSON

               BEFORE THE
DEFENSE ENVIRONMENTAL RESPONSE TASK FORCE

                 ON THE

 ARMY ENVIRONMENTAL RESTORATION PORTION
       OF THE BASE CLOSURE PROGRAM



              JUNE 19, 1991
    GOOD MORNING. MY NAME IS LOUIS M. JACKSON. I AM COMMANDER
OF THE U.S. ARMY TOXIC AND HAZARDOUS MATERIALS AGENCY <WHICH IS
ALSO CALLED USATHAMAl.     THE USATHAMA IS A FIELD OPERATING
ACTIVITY OF THE U.S. ARMY CORPS OF ENGINEERS. THE USATHAMA HAS A
SUBSTANTIAL ROLE IN THE MANAGEMENT AND EXEC UTI ON OF THE ARMY'S
ENVIRONMENTAL PROGRAM. THE AGENCY IS THE CENTRAL MANAGER FOR THE
ENVIRONMENTAL RESTORATION PORTION OF THE ARMY'S BASE CLOSURE
PROGRAM.

    TODAY, I WILL COVER FIVE BASIC AREAS. FIRST, I WILL IDENTIFY
THE INDIVIDUALS AND ORGANIZATIONS WITH PRIMARY RESPONSIBILITIES
FOR THE ARMY'S BASE CLOSURE PROGRAM. SECOND, I WILL DISCUSS THE
GENERAL POLICIES ESTABLISHED BY THE ARMY FOR ENVIRONMENTAL
RESTORATION ACTIVITIES DURING THE EXECUTION OF THE BASE CLOSURE
PROGRAM. THIRD, I WILL REVIEW THE PROCESS USED BY THE ARMY AS IT
EXECUTES THE ENVIRONMENTAL RESTORATION PORTION OF THE BASE CLOSURE
PROGRAM.    FOURTH, I WILL SUMMARIZE THE ARMY'S ENVIRONMENTAL
RESTORATION ACCOMPLISHMENTS TO DATE IN THE BASE CLOSURE PROGRAM.
FINALLY, I WILL DISCUSS THE EXPERIENCE GAINED DURING THE PAST TWO
YEARS WHILE IMPLEMENTING THE BASE CLOSURE PROGRAM. THIS ANALYSIS
WILL INCLUDE LESSONS LEARNED ABOUT THE PROCESS AS WELL AS AREAS
WHERE CONTINUED IMPROVEMENT CAN RESULT IN GREATER BENEFIT TO THE
ARMY AND LOCAL COMMUNITIES.

                 '
1. RESPONSIBILITIES.
    THE SECRETARY OF THE ARMY HAS OVERALL RESPONSIBILITY FOR THE
ARMY BASE CLOSURE ACTIONS. ASSISTANT SECRETARY OF THE ARMY FOR
INSTALLATIONS, LOGISTICS AND THE ENVIRONMENT HAS OVERSIGHT AND
POLICY RESPONSIBILITIES FOR THE ARMY BASE CLOSURE ACTIONS.                  THE
DIRECTOR OF MANAGEMENT HAS THE EXEC UTI ON RESPONSIBILITY FOR THE
MANAGEMENT AND EXECUTION OF ALL REALIGNMENTS AND CLOSURES IN THE
ARMY.     THE MAJOR COMMANDS WITH ASSISTANCE FROM THE U.S. ARMY
CORPS OF ENGINEERS        <USACEl    ARE RESPONSIBLE FOR EXECUTING THE
ENVIRONMENTAL RESTORATION AND CONSTRUCTION MISSIONS.


2.   POLICIES.
     THE ARMY ENVIRONMENTAL POLICY FOR BASE CLOSURE AT INSTALLA-
TIONS INCLUDES THE GOAL OF CLEANING UP CONTAMINATION TO ALLOW FOR
THE UNRESTRICTED USE OF THE PROPERTY AT THE TIME OF TRANSFER.
     THE ARMY CONDUCTS THE ENVIRONMENTAL RESTORATION PORTION OF
THE BASE CLOSURE PROGRAM IN A MANNER SIMILAR TO ITS INSTALLATION
RESTORATION PROGRAM <IRPl.          ALL IMMINENT THREATS TO LIFE. HEALTH,
OR SAFETY ARE REMOVED, CONTAINED, OR ELIMINATED AS QUICKLY AS
POSSIBLE.        STUDIES ARE USED TO IDENTIFY CONTAMINATION EXISTING AT
AN INSTALLATION.        IN ACCORD WITH APPLICABLE FEDERAL, STATE, AND
ARMY REGULATIONS, ALL ENVIRONMENTAL CONTAMINATION PRESENT ON THE
INSTALLATION OR MIGRATING FROM IT IS MONITORED AND CONTAINED OR
TREATED     TO    ACCEPTABLE   PUBLIC   HEALTH       OR   ENVIRONMENTAL   IMPACT
LEVELS.
     ON A CASE-BY-CASE BASIS, THE ARMY MAY CONSIDER RELEASING BASE
REALIGNMENT AND CLOSURE (BRACl EXCESS PROPERTY SUBJECT TO LAND
USE RESTRICTIONS.        IN SOME INSTANCES, THESE RESTRICTIONS COULD BE
REQUIRED IN ORDER TO MAINTAIN LONG-TERM REMEDIAL ACTIONS.                     IN
OTHER CASES, IF THERE IS NO IMMINENT THREAT TO HEALTH, SAFETY, OR

                                                 2
THE ENVIRONMENT FROM THE CONTAMINATION, AND THE ESTIMATED COST OF
CLEANUP IS GREATER THAN THE ANTICIPATED RECEIPTS FROM SALE OF THE
SITE. THE CLEANUP OF THE INSTALLATION MAY BE DEFERRED TO THE
DEFENSE ENVIRONMENTAL RESTORATION PROGRAM IN FISCAL YEAR 96 OR
BEYOND ON A "WORST FIRST" BASIS.            ADDITIONALLY, SOME FACILITIES
MAY BE CLEANED AND SOLD IN SEPARATE PARCELS RATHER THAN AS ONE
LARGE PACKAGE.       WHEN THE RESTRICTIONS ARE ATIACHED TO THE SALE,
THE    RESTRICTIONS     MUST     BE     COMPATIBLE          WITH     ACTIVITIES    ON
NEIGHBORING PROPERTIES AND CONSISTENT WITH THE EXPECTED FUTURE
USE OF THE SITE.       IN ALL CASES, ANY RESIDUAL CONTAMINANTS AND USE
RESTRICTIONS ARE FULLY IDENTIFIED TO THE BUYER.
      IN CASES WHERE THE ARMY INSTALLATION IS BEING TRANSFERRED TO
ANOTHER    FEDERAL     AGENCY,    THE    ARMY     TAKES       THE    LEAD   FOR   ALL
RESTORATION STUDIES AND INVESTIGATIONS,                THE COST OF ANY CLEANUP
WILL BE NEGOTIATED BETWEEN THE ARMY AND THE GAINING AGENCY.
      AS A GENERAL RULE, ALL ENVIRONMENTAL RESTORATION ACTIVITIES
NECESSARY TO CLOSE OR REALIGN INSTALLATIONS COVERED UNDER THE
BRAC PROGRAM ARE FUNDED USING THE BASE CLOSURE ACCOUNT,                           ONLY
BASE CLOSURE AND REALIGNMENT ACTIVITIES MAY BE FUNDED FROM THAT
ACCOUNT.    THOSE EXPENDITURES NECESSARY TO MAINTAIN INSTALLATIONS
IN    COMPLIANCE     WITH    FEDERAL,    STATE,       AND    LOCAL     ENVIRONMENTAL
REQUIREMENTS,      SUCH AS     RCRA AND NPDES PERMITS,               COME FROM THE
NORMAL OPERATING ACCOUNTS.
      IN MANAGING BASE CLOSURE FUNDS FOR ENVIRONMENTAL RESTORATION
ACTIVITIES, PRIORITY IS GIVEN TO SITUATIONS WHERE UNACCEPTABLE
HUMAN HEALTH OR ENVIRONMENTAL HAZARDS EXIST.                       ADDITIONALLY, THE
ARMY WILL MEET COMMITMENTS MADE TO THE U.S. ENVIRONMENTAL


                                                  3
PROTECTION AGENCY (EPA> AND STATE REGULATORY AGENCIES IN FEDERAL
FACILITY AGREEMENTS AND CORRECTIVE ACTION SCHEDULES. FINALLY,
ENVIRONMENTAL RESTORATION AT SITES WHERE AN ECONOMIC PAYBACK IS
ANTICIPATED WILL BE CONSIDERED.

3. PROCESS.
     THE PROCESS FOR CONDUCTING THE ENVIRONMENTAL RESTORATION
PORTION OF BASE CLOSURE IS PATTERNED AFTER THE CERCLA AND SARA
REGULATIONS.
     THE FIRST STEP IS A PRELIMINARY ASSESSMENT.       THIS IS A
QUALITATIVE EVALUATION OF THE SITE. FOCUSED ON ITS SUITABILITY
FOR TRANSFER. DURING THE PRELIMINARY ASSESSMENT. ALL EXISTING
RECORDS RELATED TO THE ENVIRONMENTAL CONDITION OF THE SITE ARE
EVALUATED TO DETERMINE IF ANY ENVIRONMENTAL HAZARDS ARE PRESENT.
A SITE VISIT IS MADE. AERIAL PHOTOGRAPHS ARE EVALUATED TO
DETERMINE POTENTIAL AREAS OF CONTAMINATION (SUCH AS STRESSED
VEGETATION AND LAND SCARS), AND CURRENT AND FORMER EMPLOYEES ARE
 INTERVIEWED TO DETERMINE WHERE UNREPORTED DISPOSAL OF HAZARDOUS
WASTE MAY HAVE OCCURRED. THE ASSESSMENT INCLUDES BUILDINGS <FOR
SUCH THINGS AS ASBESTOS> , TRANSFORMERS (FOR PCB'S) , AND UNDER-
GROUND STORAGE TANKS, AS A RESULT OF THESE EFFORTS, POTENTIAL
HAZARDOUS WASTE CONTAMINATION SOURCES ARE IDENTIFIED.         THIS
DOCUMENT IS REVIEWED BY THE INSTALLATION; THE INSTALLATION'S
MAJOR COMMAND; THE BASE CLOSURE, ENVIRONMENTAL, AND DIRECTOR OF
MANAGEMENT OFFICES AT HEADQUARTERS, DEPARTMENT OF THE ARMY
 (HQDA); AS WELL AS APPLICABLE ELEMENTS WITHIN THE U.S. ARMY CORPS
OF ENGINEERS (USACE>. THE PRELIMINARY ASSESSMENT TYPICALLY

                                       4
CONTAINS RECOMMENDATIONS SUGGESTING FURTHER WORK OR ADDITIONAL
INVESTIGATIONS BE CONDUCTED TO CHARACTERIZE THE SITE.       IF NO
HAZARDOUS WASTE OR OTHER ENVIRONMENTAL IMPACTS ARE IDENTIFIED AT
THE SITE WHICH WOULD PRECLUDE TRANSFER OF THE PROPERTY DURING THE
PRELIMINARY ASSESSMENT PHASE, THE PROPERTY CAN BE SOLD OR
TRANSFERRED.    IT TAKES APPROXIMATELY 6 MONTHS TO PREPARE THE
PRELIMINARY ASSESSMENT.
     AT THOSE INSTALLATIONS WHERE THE PRELIMINARY ASSESSMENT
IDENTIFIES SITES WITH KNOWN OR SUSPECTED CONTAMINATION, A
REMEDIAL INVESTIGATION/FEASIBILITY STUDY (RifFS> IS CARRIED OUT.
THE RI/FS IS USED TO MORE PRECISELY DETERMINE THE NATURE AND
EXTENT OF ENVIRONMENTAL CONTAMINATION. · IT IS ACCOMPLISHED
THROUGH PHYSICALLY COLLECTING AND TESTING SAMPLES FROM THE SITE.
THE DATA OBTAINED IS ANALYZED TO DETERMINE: WHAT HEALTH RISKS
MAY EXIST AND WHICH REMEDIAL ACTION ALTERNATIVES MAY EXIST BASED
ON A RANGE OF LAND USE SCENARIOS. THE ACTIONS UNDERTAKEN DURING
THIS PHASE ARE REVIEWED BY AND COORDINATED WITH EPA AND STATE
REGULATORY AGENCIES. CONCURRENCE IS OBTAINED FROM EPA AND THE
STATE PRIOR TO INITIATION OF FIELD WORK.          EPA AND STATE
REGULATORS ARE PROVIDED COPIES OF THE RI/FS DOCUMENTS FOR REVIEW
AND CONCURRENCE.    THROUGHOUT THE PROGRAM, THERE IS EXTENSIVE
 INTERNAL ARMY COORDINATION AMONG THE INSTALLATION, MACOM, HQDA,
AND USACE. AT THE COMPLETION OF THE FS, A PUBLIC MEETING IS HELD
TO REVIEW THE FINDINGS AND TO OBTAIN PUBLIC INPUT.         AT THE
CONCLUSION OF THE RI/FS IF NO ENVIRONMENTAL CLEANUP IS REQUIRED,
THE SITE CAN BE SOLD OR TRANSFERRED. WHEN CLEANUP IS REQUIRED, A
RECORD OF DECISION (ROD> WILL BE PREPARED. THE ROD IS COMPRISED

                                      5
OF THOSE DOCUMENTS SUPPORTING THE AGREEMENT REACHED BETWEEN THE
ARMY AND THE REGULATORY AGENCIES ON THE ACTIONS REQUIRED TO
MITIGATE THE CONDITIONS IDENTIFIED AT A SITE.                                                         THE RIIFS PROCESS
CAN TAKE FROM 20 TO 46                     ~ONTHS.               EFFORTS ARE UNDERWAY TO EXPEDITE
                                                                                                                                             --
                                                                                                                                   -----
THESE SCHEDULES.
    SOME    CLEANUP             ACTIONS               CAN         BE        ACCOMPLISHED                      PRIOR            TO        THE
PREPARATION OF A ROD AT THE END OF THE RI /FS,                                                                  THESE INCLUDE
REMOVAL AND CLEANUP ASSOCIATED WITH UNDERGROUND STORAGE TANKS,
ASBESTOS CLEANUP, AND ACTIONS ASSOCIATED WITH PCB REMEDIATION.
MANY OF THESE TYPES OF ACTIONS ARE BEING ADDRESSED AT BRAC I
SITES DURING FISCAL YEAR 91.
    A STATEMENT OF CONDITION WILL BE ISSUED WHEN REMEDIAL ACTIONS
ARE COMPLETED AND THE SITE IS RESTORED FOR ITS INTENDED END USE.
THE STATEMENT OF                 CONDITION                 CONSOLIDATES
                                                               -      .                      INFORMATION GENERATED
DURING THE PRELIMINARY ASSESSMENT, THE RIIFS, AND THE REMEDIAL
ACTION PHASE.            IT INCLUDES MAPS AND A LEGAL DESCRIPTION OF THE
PROPERTY,     THIS DOCUMENT BECOMES PART OF THE FORMAL DEED OF
TRANSFER WHEN THE PROPERTY IS SOLD OR TRANS- FER RED.                                                                        THE DEED
FOR PROPERTY BEING CONVEYED BY THE ARMY WILL CONTAIN A COVENANT
WARRANTING THAT ALL KNOWN REMEDIAL ACTIONS NECESSARY TO PROTECT
HUMAN HEALTH OR THE ENVIRONMENT HAVE BEEN COMPLETED.                                                                            IT WILL
FURTHER STATE, IF ADDITIONAL ARMY-CAUSED CONTAMINATION IS LATER
FOUND, ITS CLEANUP WILL REMAIN THE RESPONSIBILITY OF THE ARMY.
            -~   ·------· .. --··-·- ------ ... ---------------- -- .. ··-···-· ----·-· ---- -- ------------------- ·-·- ---- ---·· ----· -----· ...
IF THE PROPERTY IS BEING TRANSFERRED TO ANOTHER FEDERAL AGENCY
SUBJECT TO LAND USE RESTRICTIONS, WORDING IS PLACED IN THE DEED
SO THE PROPERTY WILL REVERT BACK TO THE ARMY IF IT IS NOT USED IN
CONFORMANCE WITH THE AGREED UPON LAND USE.


                                                                                 6
    LONG-TERM REMEDIAL ACTIONS SUCH AS GROUNDWATER TREATMENT MAY
TAKE MANY YEARS TO COMPLETE. AS A PART OF THE OPERATION AND
MAINTENANCE OF ANY REMEDIAL ACTION, MONITORING WILL BE CONDUCTED
TO ENSURE CLEANUP GOALS ARE MET.       ON A CASE-BY-CASE BASIS,
STATEMENTS OF CONDITION MAY BE PREPARED, AND THE PROPERTY MAY BE
TRANSFERRED OR SOLD, WHILE CONTAMINATED GROUNDWATER IS STILL
BEING TREATED.     THIS WOULD BE PERMISSIBLE IN AN AREA WHERE
MUNICIPAL WATER IS AVAILABLE AND WHERE GROUNDWATER IS NOT A
SOURCE OF DRINKING WATER. ONCE THE ARMY'S GROUNDWATER CLEANUP IS
COMPLETED, THE STATEMENT OF CONDITION WILL BE AMENDED.

4. ACCOMPLISHMENTS TO DATE.
    THERE ARE 81 ARMY BRAC I SITES WHICH ARE BEING EVALUATED FOR
CLOSURE. PRELIMINARY ASSESSMENTS HAVE BEEN COMPLETED FOR 53 OF
53 HOUSING AREAS AND 25 OF 28 INSTALLATIONS.           PRELIMINARY
ASSESSMENTS WERE NOT PREPARED FOR THE OTHER THREE INSTALLATIONS
SINCE THOSE INSTALLATIONS ALREADY HAD ONGOING RifFS'S UNDER THE
INSTALLATION RESTORATION PROGRAM.      RifFS'S ARE CURRENTLY IN
PROGRESS FOR 22 OF 28 SITES. NO FURTHER ACTIONS ARE PLANNED AT
FOUR FACILITIES UNDER THE BASE CLOSURE PROGRAM. FUTURE ENVIRON-
MENTAL EFFORTS AT THOSE FACILITIES WILL BE CONDUCTED UNDER THE
INSTALLATION RESTORATION PROGRAM.
    SIXTEEN OF THE 53 PRELIMINARY ASSESSMENTS FOR HOUSING AREAS
INDICATED NO FURTHER ACTION WAS REQUIRED.        AN ADDITIONAL 16
HOUSING AREAS REQUIRED FURTHER SAMPLING AND ANALYSIS AND WERE
DETERMINED TO CONTAIN NO HAZARDS. AS A RESULT, 700 HOUSING UNITS
AT 32 OF THE 53 HOUSING AREAS HAVE BEEN CERTIFIED BY THE ARMY FOR
     RELEASE OR TRANSFER, THE REMAINING SITES ARE AT DIFFERENT STAGES
     OF REMEDIATION.

     5. LESSONS LEARNED.
          ONE OF THE ISSUES IMPACTING THE PROGRAM HAS BEEN THE BELATED
     RELEASE OF ENVIRONMENTAL RESTORATION FUNDING FOR THE BASE CLOSURE
     PROGRAM. IN FISCAL YEAR 9L THE ARMY FIRST RECEIVED FUNDS LATE
     IN ITS THIRD QUARTER. LATE RELEASE OF FUNDS HAS COMBINED WITH
     THE AMBITIOUS CLOSURE SCHEDULE TO CAUSE CONSIDERABLE MANAGEMENT
     PROBLEMS AND SLIPPAGE. THE ARMY'S SCHEDULES IN THIS PROGRAM WILL
     BE DIFFICULT TO MAINTAIN UNLESS FUNDS ARE RELEASED IN --- ----
                                                     .                THE FIRST
                                                           ---·------------~---




     QUARTER OF EACH FISCAL YEAR.
               -------------------- ---- - -- --- -·
          BASED ON OUR EXPERIENCE WITH THE PROGRAM, WE BELIEVE THE
     APPROACH OF RELEASING INSTALLATIONS IN PARCELS IS POSSIBLE AND
     DESIRABLE. THIS PERMITS THE ARMY TO GENERATE REVENUE BY SELLING
                                                       TO HELP OFFSET THE COST
     PARCELS AND USING THE RESULTING REVENUE ------ ____ ____ ·------------------------ ---
                                                                     _.




      _______________
     OF BASE CLOSURE. THIS CONCEPT HAS BEEN UTILIZED AT FORT MEADE
,....--..


     AND WILL BE DISCUSSED DURING MR. TORRISI'S TESTIMONY FOCUSING ON
     THE FORT MEADE EXPERIENCE. THIS APPROACH WILL ALSO BE CONSIDERED
     AT OTHER BASE CLOSURE SITES ONCE THE FIELD STUDIES ARE COMPLETED
     AND UNCONTAMINATED AREAS IDENTIFIED.
          OUR IDEAL IN THIS PROGRAM IS TO CARRY OUT ENVIRONMENTAL
      RESTORATION THAT WILL PERMIT UNRESTRICTED LAND USE.                         WHEN
      UNRESTRICTED LAND USE· IS NOT POSSIBLE, REUSE OPTIONS SHOULD BE
      NARROWED EARLY IN THE ASSESSMENT OF THE SITE. THEN THE DATA
      GATHERING DURING THE FIELD INVESTIGATION PHASE CAN BE TAILORED TO



                                                       8
MEET THOSE NEEDS. THIS WILL RESULT IN A LESS COSTLY PROGRAM AND
A FASTER SCHEDULE.
     THE ARMY IS CONDUCTING THE BASE CLOSURE ENVIRONMENTAL
RESTORATION PROGRAM IN CONFORMANCE WITH CERCLA AS AMENDED BY SARA
AND ITS IMPLEMENTING REGULATIONS, AND THE NATIONAL OIL AND
HAZARDOUS SUBSTANCES POLLUTION CONTINGENCY PLAN <NCPl.        AS A
RESULT, THE PROGRAM IS CARRIED OUT IN COOPERATION WITH EPA. IN
MANY EPA REGIONS, BASE CLOSURE PLANS AND REPORTS, WHICH ARE
PROVIDED FOR REVIEW AND COMMENT. DO NOT RECEIVE TIMELY EVALUA-
TIONS. SINCE ARMY POLICY IS TO OBTAIN REGULATORY CONCURRENCE ON
THE WORK BEING DONE BY THE ARMY, _L8..cLOE EPA PARTICIPATION CAN
SLOW DOWN THE PROGRESS OF THE WORK.
-----·.
      IT HAS BEEN SUGGESTED THAT IN THE FUTURE BASE CLOSURES FOR
THE ARMY INTERACT WITH EPA ONLY AT NPL SITES WHERE EPA HAS ACTIVE
 RESPONSIBILITY, AT OTHER FACILITIES, THE ARMY COULD LIMIT ITS
 COORDINATION TO THE STATES. THE DEPARTMENT OF DEFENSE AND STATE
MEMORANDUM OF AGREEMENT <DSMOAl CAN BE USED TO PROVIDE FUNDS TO
 STATES TO EXPEDITIOUSLY REVIEW DOD CLEANUP PROJECTS, THUS HELPING
TO MAINTAIN OVERALL SCHEDULES.
      THE ARMY'S EXPERIENCE TO DATE IS THAT EPA AND STATE REVIEWERS
 CHANGE SEVERAL TIMES DURING A PROJECT. THIS RESULTS IN MID-
 COURSE CHANGES IN REGULATORY PHILOSOPHY AND APPROACH.            A
 CONSISTENT APPROACH BY REGULATORY- AGENCY REVIEWERS WOULD BE OF
 GREAT BENEFIT.
      SINCE THE BASE CLOSURE ENVIRONMENTAL RESTORATION TIME LINES
 ARE SHORT, AN EARLY MEETING AT THE START OF THE PROCESS WITH


                                       9
. ·..

        REGULATORY AGENCIES TO FORMALIZE THEIR REVIEW PROCESS AND
        PHILOSOPHY IS DESIRABLE.
             IN CONCLUDING, I WOULD LIKE TO ADVISE THE TASK FORCE THAT THE
        ARMY HAS MADE SIGNIFICANT PROGRESS TO DATE IN CONDUCTING THE
        ENVIRONMENTAL RESTORATION PORTION OF THE BASE CLOSURE PROGRAM.
        THE ARMY IS DEDICATED TO INSURING THE MAXIMUM NUMBER OF SITES ARE
        RESTORED AND RETURNED TO THE PRIVATE SECTOR IN A TIMELY MANNER.
             THIS COMPLETES MY TESTIMONY.




                                               10
~       ..
                          Possible Litigation strategies to Prevent
                       the Expedited Transfer of Pease Air Force Base
                              from Federal Government ownership


              Section 8056 of the 1991 Defense Appropriations Act (P.L.
    101-511) requires the Air Force to indemnify the State of New
    Hampshire, its lenders and others from any liability for Air Force
    releases of hazardous substances at Pease Air Force Base.                By
    indemnifying redevelopers of Pease Air Force Base against certain
    environmental liabilities, Section 8056 may encourage an expedited
    transfer of the Federal government's ownership of Pease Air Force
    Base, which is on the Superfund National Priorities List ("NPL"), 40
    C.F.R. Part 300, Appendix B, before completion of the environmental
    studies and clean-up activities that Section 120 of the Superfund
    Amendments and Reauthorization Act ("SARA") (42 u.s.c.             §   9620)
    requires at Pease.
              A possible conflict between Section 8056 and Section 120 of SARA
    would be a major element of any legal strategy employed by opponents
    of an expedited transfer of Pease Air Force Base.          Some legal
    theories that might presented in opposition to a transfer are
    outlined below.
              Opponents of the transfer of Pease Air Force Base out of federal
    government hands could file a declaratory judgment action in U.S.
    District court in New Hampshire under 28 u.s.c.        §   2201.       The
    plaintiffs could allege federal question jurisdiction under 28 u.s.c.
    §        1331 because the case would arise under federal statutes, and based
    on decisions such as Sierra Club v. Simkins Industries. Inc •. 847
    F.2d 1109, reh'q en bane denied (4th Cir. 1988), cert. denied, 491
    u.s. 904 (1989), an environmental organization could successfully
                                   -   2 -

demonstrate standing if some of its members live in New Hampshire and
allege injury in fact in the form of a delayed clean-up and an
ultimately more degraded environment for a longer period than would
be the case absent the expedited transfer.   Adjacent landowners to
the redevelopment could also demonstrate standing.
    The complaint would request a determination that any transfer of
Pease before completion of the procedure required at Pease by SARA
Section 120, including the conduct of a Remedial Investigation/
Feasibility Study ("RI/FS") and the completion of any required
remedial action, violates SARA.   The complaint would also request
injunctive relief to prevent the Air Force from transferring Pease to
non-federal ownership until the Air Force complies fully with the
SARA Section 120(e) and (h).
    This theory would be premised on the failure of Section 8056 to
excuse Pease Air Force Base from compliance with SARA Section
120. 1   Subsection (e) of Section 120 establishes a detailed time
schedule under which the Air Force must start the RI/FS within six
months of Pease being listed on the NPL, and must begin any required
remedial action within fifteen months of RI/FS completion.    One
result of the mandatory action deadlines under Section 120 is that
any required clean-up at Pease is likely to begin sooner during



     1   The Senate report prov1s1on that explains what eventually
became Section 8056 of the DoD Authorization Act states that "the
indemnification provision [for Pease) in no way is intended to affect
the liabilities of either the Defense Department or of any
indemnified party under [SARA] . . . . " s. Rep. No. 521, lOlst
Cong., 2d Sess. (1990).
-
                                     -   3 -

    federal government ownership than would be the case if Pease were not
    federally owned.
        SARA Section 120(h) requires that:
             in the case of any real property owned by the
             United States on which any hazardous substance was
             • • . known to have been released, or disposed of,
             each deed entered into for the transfer of such
             property by the United States to any other person
             or entity shall contain . . . a covenant
             warranting that all remedial action necessary to
             protect human health and the environment with
             respect to any such substance remaining on the
             property has been taken before the date of such
             transfer . . . .
    The plaintiffs would argue that subsections (e) and (h) of Section
    120 impose significant additional restrictions and obligations beyond
    those normally required at NPL sites on the federal government before
    it can transfer a federal facility on which a release of hazardous
    substances has occurred.   Section 120(h) explicitly requires that the
    federal government warrant in the deed that it has completed all
    necessary remedial action before 2 it transfers ownership of any
    federal facility on the NPL.
        The plaintiffs would also argue that any attempt to remove Pease
    from the scope of Section 120 by transferring its ownership before
    clean-up could result in a less effective long-term remedial action
    than if Pease remained subject to Section 120.   This position would
    be based on the federal government's obligation to assure long-term
    operation and maintenance ("O&M") tasks at federal facilities cleaned



        2    A necessary precondition to the completion of required
    remedial action is the selection of the appropriate remedial action
    through the conduct of an RI/FS.                ·
--
                                        - 4 -

     up under section 120.   No such federal obligation exists at former
     federal facilities, and payment of O&M costs would depend instead on
     the solvency of the subsequent owner or on the Superfund. 3
         The plaintiffs could also include a claim under Sections 107 and
     310 of the Comprehensive Environmental Response, Compensation and
     Liability Act ("CERCLA"), 42 u.s.c.   §§   9607 and 9659, for response
     costs they incurred to investigate the extent of any release of
     hazardous substances from Pease.    Such a claim must be preceded by at
     least sixty days notice to EPA and the Air Force, and to be
     recoverable the costs must be incurred consistent with the National
     Contingency Plan, 40 C.F.R. 'Part 300.     Examples of response costs
     that the courts have allowed citizens to recover include soil and
     groundwater sampling and analysis costs.      Landowners adjacent to
     Pease could hire a contractor to drill several wells ($5-10,000), and
     send samples collected from them to a laboratory for analysis
     ($3-5000).   Another reason that the redevelopment opponents might
     include a CERCLA response cost recovery claim is because of a recent
     appellate court decision that allows non-government plaintiffs who
     bring CERCLA cost recovery cases to collect their attorneys' fees.
     General Electric co. v. Litton Industrial Automation Systems. Inc.,
     920 F.2d 1415 (8th Cir. 1990), cert. denied, 59 U.S.L.W. 3651 (U.S.
     Mar. 26, 1991).



         3    This argument would probably fail due to the requirement in
     Section 8056 for the Air Force to indemnify the beneficiaries against
     all costs relating to hazardous substances resulting from Air Force
     activities. This indemnification would likely be interpreted to
     include O&M costs.
-.
                                      -    5 -

         In addition to the statutory claims outlined above, any adjacent
     landowners who oppose expedited Pease redevelopment could include in
     their complaint pendant state law claims such as nuisance and
     trespass if they could demonstrate the migration of contaminated
     groundwater under their property from Pease.     Such a demonstration
     might be made based on the Air Force's own Preliminary Assessment of
     Pease under the Defense Environmental Restoration program, or on
     sampling data collected by the plaintiffs as described in the
     preceding paragraph.
         There may be other non-environmental federal or state law claims
     that redevelopment opponents could include as well.
         From the redevelopment opponents' perspective, litigation of the
     type described above would be successful if it survived the
     government's initial summary judgment and dismissal motions,
     regardless of the ultimate outcome.     This is so because the
     uncertainty created by the pending litigation would be likely to
     collapse any existing redevelopment financing, and would probably
     deter any new redevelopment financing.      The uncertainty created by
     the lawsuit would also have the potential to impair the issuance or
     marketability of any state-issued or -supported bonds for financing.
         The substantial legal issues presented by the federal
     government's transfer of Pease before completion of any required
     remedial action under SARA Section 120 make it likely that a legal
     challenge to such action would survive the government's early
     dispositive motions, resulting in possibly lengthy litigation.
                    DEPARTMENT OF THE AIR FORCE




                          PRESENTATION TO
       TASK FORCE ON DEFENSE BASE CLOSURES AND REALIGNMENTS




SUBJECT:   CASE HISTORY-INTERIM LEASE OF HANGAR 763, NORTON AFB




STATEMENT OF:   COL PETER WALSH

                DIRECTOR OF ENVIRONMENTAL QUALITY

                OFFICE OF THE CIVIL ENGINEER




                                                           This li iii ' -
                                                      SAF/PAS docum~
                            JUNE 19, 1991
                                                        9 1-· 12 01
                                                       Call   73222/7893~
                                                          for pickup o~
                                                        ratum to 502271


                 NOT FOR PUBLICATION UNTIL RELEASED

    BY THE TASK FORCE ON DEFENSE BASE CLOSURES AND REALIGNMENTS
MR. CHAIRMAN AND MEMBERS OF THE TASK FORCE,


    Thank you for the opportunity to present the case history on
some of the difficulties we have encountered with regard to
interim use of properties at Norton AFB.   While the Norton AFB
case relates specifically to interim use of properties via lease
arrangements, I will also discuss some of the impediments which
could prevent the Air Force from permanently conveying
properties once the installation is closed in June 1994.


    Let me begin by stating that the Air Force is very much
concerned about the impact closing our installations will have
on the local economy and community.   While our mandate is to
close installations, our intention is to do so with minimal
disruption to the community.   Our strategy is to provide a
smooth transition of properties to productive, private use as
Air Force programs drawdown and are realigned to other bases and
as.military and civilian employees are moved to support these
program transfers.   To facilitate this transition, we are
accommodating development authorities, where possible, by
leasing facilities to them prior to the actual closure of the
bases.   They in turn can sublease the facilities to private
firms that can provide civilian jobs in the community.     The
overall effect is to create jobs, bolster the local economy, and
provide tax revenues prior to the loss of Federal payrolls.




                               -1-
    To date, the Air Force has entered into leases with the
Inland Valley Development Agency (at Norton AFB) and Pease
Development Authority (Pease AFB).    Of primary concern today, is
the lease the Inland Valley Development Agency has with it's
sublessee, Lockheed Commercial Aircraft Center, Inc.; a
subsidiary of the Lockheed Corporation.


BACKGROUND


    Environmental studies to determine the location and extent
of hazardous waste sites on Norton AFB have been ongoing since
1982.   Twenty-two sites have been identified.   Of primary
concern is a plume of trichloroethylene contaminated groundwater
which extends across the central portion of the base, including
the facilities being leased by Lockheed Corporation.
Contaminate levels in this plume range from several parts per
billion to as high as 4,600 parts per billion.    An interim
remedial action to remove and treat this TCE contaminated
groundwater will come online this year.    A base-wide remedial
investigation and feasibility study (RI/FS) is scheduled for
completion in September 1992.


    Norton AFB was listed on the National Priorities List in
July 1987.   A three-party Interagency Agreement (Federal




                                -2-
Facilities Agreement) was entered into on June 22, 1989.
Parties to the agreement include:     the Environmental Protection
Agency (Region IX); State of California, Department of Health
Services; and the United States Air Force.




CASE HISTORY


    Lockheed signed an interim lease for the use of docks 3 and
4 of Building 763 at Norton AFB on July 10, 1990.     Lockheed
plans to use the hangar to maintain and modify Boeing 747
aircraft.   To begin operations, Lockheed obtained a lease for
only docks 3 and 4, but intends to secure permanent interests in
docks 1 and 2, other hangars and administrative facilities from
the Inland Valley Development Authority upon closure of Norton
Air Force Base, which is scheduled for June 1994.


    Building 763 is a large aircraft hangar used by the Air
Force since the early 1960s to repair and maintain cargo
aircraft such as C-135s and C-14ls.     In addition to maintenance
on fuel and hydraulic systems, solvents such as
trichloroethylene (TCE) have been used for cleaning aircraft
parts since the 1970s.   A small electroplating shop has also
been operated in the northeast corner of Hangar 763 since the




                               -3-
1970s.   Historical records, obtained in conjunction with the
Preliminary Assessment of Norton AFB, document the spillage of
fuels, other petroleum products, trichloroethylene, and heavy
metals (such as cyanide and chromium) from electroplating
operations onto the floor of Hangar 763 over the past 20 years.


    Prior to commencing construction modifications at Hangar
763, Lockheed undertook engineering studies to determine if the
concrete floor would support "747" aircraft.         In October 1990,
foundation borings were taken; the results showed that most of
the floor would have to be removed and replaced with 12-14
inches of reinforced concrete.


    It was during these engineering investigations that
contamination was confirmed beneath the hangar floor.
Subsequent   ~nvironmental   studies, conducted during February and
March of 1991, showed that soils beneath the concrete floor were
contaminated with volatile organic compounds (primarily
trichloroethylene and toluene) and heavy metals (primarily
cadmium and cyanide).     Heavy   m~tal   contamination was found to be
localized in a small portion of the hangar, while volatile
organic compound contamination occurred under most of the hangar
floor.   The majority of contaminatiqn was found within the upper
three feet of the soil.




                                   -4-
    The parties to the Interagency Agreement were first informed
of the potential contamination underlying hangar 763 in November
1990 and insisted that any actions the Air Force may take with
regard to removal of contaminated soils be conducted in
accordance with the Interagency Agreement and consistent with
the National Contingency Plan (NCP).


    Section 300.415 of the National Contingency Plan addresses
removal actions and establishes the criteria to be used to
determine the type of removal action allowed..    Three types of
removal actions are discussed:     (1) emergency; (2)
time-critical; and (3) non-time-critical.     The type of removal
action to be undertaken depends upon the estimated cost and time
to complete the removal and imminent or potential threats to .
human health or the environment.


    As a general rule, emergency removals are conducted as soon
as a release is discovered and require minimal coordination with
Federal and State regulatory authorities; time-critical removals
are conducted within 2-3 months following discovery; and
non-time-critical removals can take as long as 8-12 months to
complete.   Lockheed had planned to complete the modifications to
Hangar 763 at least by December 1990 to meet obligations made to
a major client.   A non-time-critical removal would not be
completed in time to meet these commitments.




                                 -5-
    After considerable deliberation and consultation with the
EPA and the California Department of Health Services, the Air
Force decided to conduct a time-critical removal action to
remove the known levels of contaminated soil underlying Hangar
763 immediately.     That decision was taken in order to protect
workers in the hangar from ill effects of air venting of the
contaminants, to prevent further spread of the contaminants by
water seeping down through broken areas of the hangar floor
pavement, and to expedite Lockheed's ability to lay the new
floor and commence its new operations there.


    However, both the Environmental Protection Agency and the
State of California, Department of Health Services had specific
reservations as to whether the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA) and the
applicable National Contingency Plan regulations allowed a
removal action to be undertaken primarily for purposes of
facilitating reuse activities.     They refused   t~   issue formal
"approvals" of the action, though they concurred with the
technical aspects of the removal and expressly agreed not to
oppose it legally.     The Air Force was left to authorize that
removal action pursuant to its own decision-making authority
under the Defense Environmental Restoration Program (Superfund
Amendments and Reauthorization Act) and Executive Order 12580




                                 -6-
which delegates to the Department of Defense many CERCLA
.authorities of the President with regard to contamination which
is on military installations or emanating from them.


    This "do it at your own risk" situation is not a comfortable
one, and the Air Force in the future could find such removal
action proposals opposed by either regulatory agencies or
citizen groups.     We believe that authoritative guidance from
Headquarters EPA addressing and clarifying this issue will go
far in expediting cleanups and property conveyances at closing
installations.


    Having to independently take removal actions to cleanup
surface contamination is only one difficulty we have encountered
in trying to facilitate transfer and reuse of properties.       There
are at least three other difficulties which are seriously
hampering our ability to convey property at Pease Air Force Base
and which could hamper property conveyances at Norton Air Force
Base if not resolved soon.


    1.   In the   past~   the Environmental Protection Agency has
    opted to list entire military installations on the National
    Priorities List.      While this was done to optimize the




                                   -7-
management of cleanup activities within the installation
boundaries, it has effectively slowed-down cleanups by invoking
the requirements in CERCLA for the Air Force to enter into
Interagency Agreements and to strictly adhere to the National
Contingency Plan.     The coordination and oversight processes
contained in these agreements are inordinately time consuming
and cumbersome.     Review of documents, regardless of their
technical content and complexity, typically takes 60 days with a
30 day automatic extension, if requested.     As much as one-third
of the time it takes to reach a Record of Decision on a Remedial
Investigation and Feasibility Study is due to reviews and agency
coordination.


    EPA's decision to list entire installations on the NPL has
    effectively prohibited the parceling and transfer of clean
    properties until all contaminated sites are cleaned-up.      An
    alternative approach would be to list.only the areas of
    contamination allowing the uncontaminated parcels to be
    conveyed without delay ..


    The emphasis in the National Contingency Plan has been on
    conducting removal actions which are necessary to protect
    human health and the environment.    As discussed in the
    Norton Air Force Base-Hangar 763 Case History, this focus
    has impeded our ability to accomplish removal actions
    specifically for the purpose of conveying property.




                                 -8-
   2.    Currently, there are two separate processes, administered
   by separate offices within EPA, which govern the cleanup of
   hazardous waste sites on an installation:    (1) those covered by
    the corrective action process required by specific sections of
    the Resource Conservation and Recovery Act; and (2) those
   covered by the remedial action process required under CERCLA.
   These overlapping processes could be rolled into one to attain
    greater program management consistency while, at the same time,
   optimizing both EPA and Air Force staff time and resources.


    3.   Presently, EPA and State authorities hold a very
    restrictive interpretation of CERCLA Section 120 (h)(3) which
    effectively prohibits transfer of properties until all remedial
    actions necessary to protect human health and the environment
    have been taken.   In the case of groundwater contamination,
    completed remedial actions could take years or several
    decades.   House Resolution 2179, recently introduced into the
    Congress, seeks to resolve this dilemma by clarifying the
    statutory language to include remedial actions which have been
    commenced on the property.


    Impediments 1 and 2 could be resolved by clarifying regulations
or guidance; impediment 3 appears to resolvable only by a statutory
change to CERCLA.




                                 -9-
.'

         In conclusion, the Norton Air Force Base case history you asked
     that we address today deals with the difficulties we have
     encountered in trying to modify facilities under an interim lease
     arrangement when there is known contamination on or under the
     property.   The Air Force can employ its removal authority under
     Section 104 of the Comprehensive Environmental Response,
     Compensation, and Liability Act but it does so on its own and at
     risk of alienating the other parties to the Interagency Agreement.
     We would prefer to work in a cooperative, but expeditous manner
     with the Environmental Protection Agency and appropriate state
     regulatory authorities to reach a mutually satisfactory approach to
     these removal actions.


         However, a more important issue is how the Air Force will be
     able to convey properties expeditiously when they are known to be
     contaminated on the surface or in underlying groundwaters.   Until
     the questions of whether uncontaminated properties on National
     Priorities Listed sites can be transferred and whether Section 120
     (h) really requires that all remedial actions be completed, the Air
     Force will be prevented from conveying properties in an expeditious
     manner.




                                     -10-
    Good morning, I am Salvatore Torrisi, Chief of the Base
Closure Division for the u.s. Army Toxic and Hazardous Materials
Agency,    MY testimony today will focus on the environmental
restoration activities conducted at Fort Meade as part of the
Army's Base Closure Program.

    Under the Base Closure and Realignment Act of 1988, Fort
Meade was slated for realignment and partial closure with 9,000
acres being excessed.

    Fort George G. Meade is a permanent Army installation located
on 13,670 acres in Anne Arundel County, Maryland between Baltimore
and Washington D.C. The northernmost one-third of the installa-
tion,     referred to as the cantonment area, contains
administrative, recreational and housing facilitiesJ the
remaining portion serves mainly as a firing/combat range and
training areas with minimal maneuver areas. CurrentlY Fort Meade
provides support and services for about 65 Department of Defense
tenant activities and organizations. The major tenants are the
National SecuritY Agency (NSAh Headquarters, First ArmYJ Army
Intel! igence and SecuritY ConmandJ Nava 1 Security Group J and the
6940th Electronic SecuritY Wing (U.S. Air Force>. In addition,
Fort Meade provides range and training support for other units of
the armed services. The 9,000 acre base closure parcel consists
of the firing/combat ranges and training area south of the
cantonment area, Tipton Army Airfield, the active sanitary
 landfill, a sewage lift

                                1
station, an Ammunition SuPPlY Point and potable water SUPPlY
wells.

     Prior to 1988, the Army was conducting remedial !nvest!gat!ons
at the active sanitary Jandf!ll and the clean fill area as part of
the Fort Meade installation restoration program. The Army began
its base c Iosure env i ronmenta 1 restoration eva 1uat!on by conduc-
ting a Pre I iminary Assessment of the 9,000 acre property. The
purpose of the assessment was to identify all potentiallY
contaminated areas requiring further environmental investigation
and possible remediation prior to the release of the property,
and to identifY all areas where there is no contamination. The
Preliminary Assessment was completed in October 1989. The areas
 requiring further investigation consist predominantlY of former
and existing Jandf!lls and former artillery impact areas. Plans
 to conduct additional environmental investigations at Fort Meade
 based on the Preliminary Assessment were final !zed and approved
 by Region III of the u.s. Environmental Protection Agency, and by
 the Maryland Department of Environment in September 1990. The
 plans address the evaluation of potential risks from chemical
 contamination. A site investigation of those sites identified in
 the Preliminary Assessment was conducted.         Both the Remedial
 Investigation Report for the active sanitary landfill and clean
 fill area and the Site Investigation Report are expected to be
 completed by December 1991. At this time, the site investigation
  report may identifY a need for additional studies at the base
 closure areas evaluated. This effort will subsequentlY be

                                 2
further environmental <chemical> investigation were 1imi ted to a
few areas, no propertY could be immediately released without
additional study since there was the potential for unexploded
ordnance to be present throughout the entire 9,000 acres. The
ArlllY proposed a three phased approach for releasing property at
Fort Meade. This three phased approach was designed to incre-
mentallY parcel the property based on the relative likelihood of
the presence of unexploded ordnance.

    At Fort Meade, the westernmost part of the installation was
considered the least likely to contain unexploded ordnance.
Selection of this tract would have had the added benefit of
releasing the land most preferred for development first, thus
          '
bringing in income to finance base closure activities.

    USHHAMA requested input from the Corps of Engineers Real
Estate Directorate for assistance in determining the parcel
boundaries. Specifically, a parcel should contain appropriate
access and features which make it salable. Once an ordnance
survey has been performed on a parcel and a Statement of
Condition approved, that parcel could be released while an
ordnance survey would begin on the next parcel.

    This three phased parcelling concept was ultimately overtaken
by events when the Fiscal Year 1991 Military Construction
Appropriations Act directed the transfer of 7,600 acres of the
9,000 acres to the Department of Interior.      DOl will add this
tract to the neighboring Patuxent Wildlife Research Center.
                               4
Transferring the proPerty to the Department of Interior for wild-
life and surface use only will require only a surface ordnance
survey that should cause minimal impact to vegetation ·and wildlife
in the area.

    Major issues that have arisen during the Fort Meade base
closure environmental restoration program are as follows:

    1. Establishing the extent and degree of the ordnance survey,
Since past records describing impact areas and caliber of
munitions utilized are either nonexistent or difficult to
reconstruct, it is di ff i cu 1t to determine both the area and depth
of ordnance clearance required.

    2. Estimating the cost of conducting an ordnance survey while
knowing the cost is dependent on the amount of unexploded
ordnance recovered. As I just mentioned, at Fort Meade, this
information is very limited.

    3. Reconciling the potential need to clear denselY wooded
areas of Fort Meade in order to conduct ordnance surveys, with
the desire to minimize the adverse impacts vegetation clearance
would pose in this environmentallY sensitive area.

    4. Establishing the logistics and parameters for conducting
an ordnance survey in the large area of wetlands found at Fort
Meade. Both technical feasibilitY and regulations protecting

                                  5
wetlands had to be considered. Agreement has been reached that
an ordnance survey will be· conducted In wetlands which are
traversable by foot. No survey will be conducted in wetlands
that are not traversable bY foot.

    5. Resolving the conflict between the Department of Defense
Regulation 6055.9 which governs the transfer of propertY contami-
nated with unexploded ordnance, and the Fiscal Year 1991 Military
Construction Appropriations Act which directs the transfer of
7,600 acres to the Department of Interior by September 1991.
Department of Defense Regulation 6055.9 states "Accountability
and control of real property contaminated with ammunition and
explosives may not be transferred to agencies outside the Depart-
ment of Defense and the accountabilitY for such contaminated real
property shall' remain vested in the Department of Defense unti 1
the property is rendered innocuous. BY innocuous, it is meant
that it is reasonable to assume real property is not contaminated
with live ammunition or explosives to an extent that constitutes
an unacceptable risk to the general public." This issue is being
addressed by Headquarters, Department of Army and the Office of
the Secretary of Defense.

    6. ClarifYing the uncertain future of the 1,400 acre parcel
not subJect to transfer to the Department of the Interior. The
uncertain future use of this 1,400 acres may result in an
inefficient use of base closure funds by the Army. Under current
Policy, the Army will prepare and conduct a surface and subsurface

                                6
'   .



        ordnance survey in order to release the land without land use
        restrictions.    Meanwhile, the local Coordinating Council has
        recommended this tract also be subjected to use restrictions
        similar to those in the lands to be added to the Patuxent
        Wildlife Research Center.    IL at a later date, it is indeed
        decided this property too, will be released for restricted
        surface use only, the money spent in expensive subsurface
        ordnance surveys would have been wasted.       An earlY decision
        concerning the ultimate use of this acreage would be helpful.

             In conclusion, the environmental portion of base closure
        program is a complex process which is not easilY separated from
        socio-economic issues and is an integral part of these activities.
        It has been a challenge to assure all environmental and regulatory
        issues have been properly addressed. The Fort Meade project will
        be an even greater challenge to complete in a manner which
        satisfies local communitY concerns while simultaneouslY achieving
        maximum return on investment by the Army, The Army has restored
        property at other locations and sold it for local beneficial
        use. It is not easy, but it can be done.

            This completes my testimony,




                                           7
STATEMENT OF REPRESENTATIVE RAY
               TO

ENVIRONMENTAL RESPONSE TASK FORCE
    I appreciate the opportunity to appear before the Base Clo-
sure Environmental Response Task Force this afternoon to provide
my views on base closure environmental issues and how they might
be addressed.
    Last year, I strongly supported Congressman Fazio's efforts
to establish this Task Force as part of a legislative strategy to
make base closure environmental activities more visible to Con-
gress and provide a dedicated source of funds to support these
activities.
    Two years ago, the Environmental Restoration Panel held a
hearing on Department of Defense base closure environmental
issues -- the first of its kind in Congress. At that time, we
learned that DoD did not know very much about environmental
issues affecting base closure. We also found that DoD had not
factored environmental considerations into its base closure
decision making process. Lastly, it became clear that DoD did
not have a very realistic estimate of the costs associated with
environmental compliance and cleanup activities related to base
closure.
    Obviously, DoD's awareness of the environmental aspects of
base. closure has significantly improved since that panel hearing,
but more needs to be done and this Task Force can play a major
role in that process. I believe the Task Force's most important
contribution would be to identify ways to cut through the red
tape to expedite the characterization and cleanup of hazardous
waste sites at closed bases. The conflict and overlap between
federal, state, and local laws and regulations make cleanups at
DoD bases among the most complex and difficult in the nation.
Moreover, the mutual suspicion and misunderstanding between the
regulators and DoD personnel complicate efforts to sort these
issues out in a timely fashion. In addition, DoD procurement
regulations, contract procedures, and funding requirements are
often inconsistent with expedited cleanup efforts.
    Having a cleanup at an active DoD installation get bogged
down in bureaucratic bickering is regrettable, to allow the same
thing to happen at a closed base would be nothing short of
tragic. It would delay the availability of the property for
alternative uses at a time when the community is feeling the most
severe economic hardship because of base closure. It would be
even more tragic because I know what can be accomplished when all
parties start to pull. together. This year I have assisted in the
negotiation of supplemental agreements at national priority list
sites at two Georgia bases. These agreements are expected to
reduce cleanup schedules in the existing federal facility agree-
ments by months or years, without lowering the quality of the
cleanup itself. With your permission, I would like to provide a
copy of the Robins Air Force Base agreement for the record. The
situation at closed bases for expedited cleanups is even more
promising because the need for quick action is recognized by all
parties and there is a greater receptivity to innovation and
responsible risk taking.
    The Task Force has a tremendous opportunity to recommend
innovative ways to work through current statutory and regulatory
requirements, and foster improved cooperation between Dod and the
regulators to streamline base closure cleanups. Another major
issue that I think needs to be looked into carefully is the legal
problems associated with the expedited transfer of land at base
closure NPL sites. Reviewing the closure, cleanup and transfer
of property at Pease and Norton Air Force Bases highlighted the
importance of this problem. Because the Environmental Protection
Agency has designated all of the property contained in these
bases as NPL sites, there is concern that all of the property
would have to be cleaned up before any land could be transferred.
    Equally troubling, it is not clean whether "uncontaminated"
portions could be carved out for expedited transfer and reuse, or
that there could be surface leasing of areas affected by sub-sur-
face groundwater contamination.
    We have consulted with some Superfund lawyers and the
attached paper that they have provided suggests that current law
provides a litigation lighting rod over these base closure NPL
sites about the size of the Washington Monument. Any individual
or group who is unhappy about the cleanup or land reuse plan of
these base closure NPL sites can mount a strong legal challenge
that would seriously complicate efforts to attract developers or
lenders.   The whole thing could be tied up in court for months
or years while the community suffers.
    As a result, I have introduced legislation, H.R. 2179, that
would amend Section 120(h) of the Superfund Amendments and Reau-
thorization Act to provide for the expedited cleanup and transfer
of base closure NPL sites. Since I have introduced this legisla-
tion, the number of communities that might be affected by this
problem has grown from 5 to 14, and this total is bound to grow
when the next two Base Closure and Realignment lists come out.
    It would be very useful to the Panel and Congress if the Task
Force could look into this issue and suggest ways of addressing
it administratively or legislatively.
    In addition, I think it would be worthwhile for the Task
Force to provide its recommendations on the role of communities
in making land transfer decisions that involve environmental
issues.
    Another major consideration by the Task Force would be to
identify any other base closure related environmental issues that
are unique and deserve special consideration. Over the past two
years, we have become aware of the cleanup and land transfer
issues, but I am sure that there are a number of other environ-
mental issues that need to be addressed to facilitate the timely
closure and economic reutilization of current and future base
closure candidates. The sooner Congress becomes aware of these
problems, the sooner it can deal with them.
    In closing, I want to again express my appreciation to the
Task Force for being invited to appear this afternoon. I look
forward to the Task Force's report and believe its findings and
recommendations will materially assist the Department of Defense
and Congress in dealing with environmental issues associated with
base closure and realignment actions. I also want to assure the
Task Force that the Environmental Restoration Panel will be happy
to assist your efforts in any way it can. We all want to address
environmental issues in a way that will minimize the economic
dislocation and hardship of communities affected by base closure.
Working together, I think we can reconcile environmental require-
ments with the needs of these communities.
                                                                             I



102o CONGRESS
     1ST SESSION
                         H.R.2179
To amend provisions of the Comprehensive Environmental Response, Compen-
    sation, and Liability Act of 1980 relating to Federal property transferred
    by Federal agencies.




        IN THE HOUSE OF REPRESENTATIVES
                                MAY 1, 1991
Mr. RAY {for himself, Mr. FAZIO, and Mr. MATSUI) introduced the following
    bill; which was referred jointly to the Committees on Energy and Com-
    merce and Anned Services




                              A BILL
To amend proVlsiOns of the Comprehensive Environmental
   Response, Compensation, and Liability Act of 1980 relat-
   ing to Federal property transferred by Federal agencies.

 I         Be it enacted by the Senate and House of Representa-
 2 tives of the United States of America in Congress assembled,
 3   SECTION 1. TRANSFERS OF CERTAIN FEDERAL PROPERTY

 4                   UNDER SUPERFUND.

 5         (a) NOTICE.-(1) Section 120(h) of the Comprehen-
 6 sive Environmental Response, Compensation, and Liabil-
 7 ity Act of 1980 (42 U.S.C. 9620(h)) is amended in para-
 8 graph (1) by striking out "any contract for the sale or
 9 other transfer of real property" and inserting in lieu there-
                                    2
1 of the following: "any contract for sale of, any lease of,
2 any grant of easement on, or any written agreement for
3 other transfer of, real property".
4       (2) Section 120(h) of such Act is further amended
5 in paragraph (1) by striking out "such contract" and in-
6 serting in lieu thereof "such contract, lease, grant, or
7 agreement".
8       (b) REMEDIAL ACTION REQUIRED.-(!) Section
9 120(h) of the Comprehensive Environmental Response,
lO Compensation, and Liability Act of 1980 (42 U.S.C.
ll 9620(h)) is amended in paragraph (3)(B)(i) by-
12               (A) striking out "all"; and
l3               (B) inserting after "has been taken" the follow-
14      ing: "in accordance with paragraph (4)".
15       (2) Section 120(h) of such Act is further amended
16 by adding at the end the following new paragraph:
17               "(4) REMEDIAL ACTION REQUIRED.-For pur-
18       poses of paragraph (3)(B)(i), remedial action neces-
19       sary to protect human health and the environment
20       has been taken on the property if one of the follow-
21       ing conditions exist:
22                   "(A) Remedial action has been completed
23               on the property.
24                    "(B) No remedial action is required on the
25               property.


      •HR 2111   m
                                            3
           1                    "(C)(i) Remedial action has been com-
    .-'


          2                 menced on the property with respect to any
.
          3                 hazardous substance remaining on the property;
          4                     "(ii) the deed entered into for the transfer

          5                 of such property contains clauses (I) assuring
           6                access to the property so that any further reme-
           7                dial action required can be taken, and (II) lim-
           8                iting the use of such property to uses that
          9                 would be consistent with the protection of
          10                human health and the environment; and
          11                    "(iii) the United States agrees to continue
          12                diligently carrying out any further required re-
          13                medial action on the property until all remedial
          14                action has been completed.".
          15       (c) AUTHORITY TO REMOVE HAzARDOUS SUB-
          16 STANCE.-Section 120(h) of the Comprehensive Environ-
          17 mental Response, Compensation, and Liability Act of
          18 1980 (42 U.S.C. 9620(h)) is further amended by adding
          19 at the end the following new paragraph:
          20                "(5) REMOVAL.-For purposes of attaining a
          21       condition described in paragraph ( 4), the President,
          22       acting through the head of any department, agency,
          23       or instrumentality of the United States, may remove
          24       or arrange for the removal of, under section
          25       104(a)(l), any hazardous substance on real property


                •HR lll7t   m
                                4
 1      subject to this subsection, regardless of whether an
 2      imminent and substantial danger to the public
 3      health or welfare or the environment exists.".
 4      (d) AUTHORITY TO SUBDIVIDE      AND   LEASE FEDERAL
 5 PR.oPERTY.-Section 120(h) of the Comprehensive Envi-
 6 ronmental Response, Compensation, and Liability Act of
 7 1980 (42 U.S.C. 9620(h)) is further amended by adding
 8 at the end the following new paragraph:
 9           "(6) AUTHORITY TO SUBDIVIDE       AND   TRANSFER
10      FEDERAL PROPERTY.-(A) For purposes of this sub-
11      section, in the case of real property which is subject
12      to this subsection, the head of the department, agen-
13      cy or instrumentality with jurisdiction over the prop-
14      erty may subdivide the property for purposes of sale,
15      lease, grant of easement, or other transfer in accord-
16      ance with this paragraph. Such real property may be
17      subdivided regardless of whether the property is list-
18      ed as a site on the National Priorities List.
19           "(B) In the case of a parcel of property subdi-

20      vided out of such real property, the head of the de-
21      partment, agency, or instrumentality may sell, lease,
22      grant an easement, or otherwise transfer the parcel
23      in accordance with this subsection and other provi-
24      sions of Federal law relating to Federal property
25      sales or transfers.".


     •RR s1?t m
                               5
 1 SEC. 2.. ENVIRONMENTAL RESTORATION ON CERTAIN MILl·
 2                  TARY   INSTALLATIONS     UNDER     REVISED

 3                  SUPERFUND LAW.

 4       (a) REPORT.-Not later than 30 days after the date
 5 of the enactment of this Act, the Secretary of Defense
 6 shall submit to Congress a report on the manner in which
 7 the Department of Defense plans to carry out environmen-
 8 tal restoration activities on military installations described
 9 in subsection (b) to take into account the amendments
10 made by section 1 of this Act.
11       (b) MILITARY lNSTALLATIONS.-The military instal-
12 lations referred to in subsection (a) are the military instal-
13 lations to be closed pursuant to title II of the Defense
14 Authorization Amendments and Base Closure and Re-
15 alignment Act (Public Law 100-526; 10 U.S.C. 2687
16 note), pursuant to the Defense Base Closure and Realign-
17 ment Act of 1990 (part A of title XXIX of Public Law
18 101-510), or otherwise by the Department of Defense.
                               0




      •HR   ant m
IT IS SO AGREED:




          ~ARY D. VBST, Deputy Assistant
             Secretary of the Air Force
             (Bnvironment, Safety and
             Occupational Health)



                            ~~
             CHRISTIAN R. HOLMES, Deputy
             Assistant Administrator for
             Federal Facilities Bnforcement


           . #if/d;P
         ~RICHARD   F. GILLIS
            Major General, USAF
            Commander, WR-ALC




                 • TAHNBR, Commissioner
           ~~gla    Department of
            Natural Resources




            PATRICK TOBIN, Deputy
            Regional Administrator
            United States Bnvlronmental
            Protection Agency Region IV
                       STAFF ANALYSIS OF B.R. 2179


        This is in response to the Task Force's June 19 request for
    the views of the staff on H.R. 2179, 102nd Congress, a bill "To
    amend provisions of the Comprehensive Environmental Response,
    compensation, and Liability Act of 1980 relating to Federal
    property transferred by Federal agencies."
        Section 120Chl of the Comprehens~ve Environmental Response,
    Compensation, and Liability Act (CERCLA) requires a Federal
    agency to provide notice of hazardous substance storage, release
    or disposal on real property in the contract and in the deed for
    the sale or other transfer of the property. It also requires a
    covenant in the deed that all remedial action necessary to pro-
    tect human health and the environment with respect to any such
    substance remaining on the property has been taken before the
    date of the transfer.
        H.R. 2179 would amend Section 120(h) to: clarify what prop-
    erty transfers it applies to; clarify when remedial action has
    been taken; clarify the ability to use removal actions; and
    clarify the authority to subdivide and transfer property whether
    or not it is on the National Priorities List. It also requires a
    Report to Congress, within 30 days of enactment, on the manner in
    which the Defense Department plans to carry out environmental
    restoration activities on military installations to be closed
    under the Base Closure and Realignment Acts or otherwise.
        This legislation would improve DoD's ability to transfer
    property which poses no health or environmental threat to the
    local community that we believe enhance local redevelopment
    without diminishing DoD's responsibility to clean up contamina-
    tion from hazardous substances.
        The full benefits of clarification of broader authority for
    removal actions to expedite necessary cleanups would be con-
    strained by the CERCLA time and dollar limits on removal actions.
    We believe that, for Federal agency removal actions, the limits
    should be site related, not arbitrary administrative limits
    developed to manage Superfund.




I
,             DEFENSE ENVIRONMENTAL RESPONSE TASK FORCE: ISSUES
                                Working Draft
                                 June 13, 1991

                   As revised by the Defense Environmental Response Task Forr:e
                                   at its meeting of JIUII! 19, 1991

                               (Task Forr:e additions appear in italics)


           Congress charged the Defense Environmental Response Task Force with making

    findings and recommendations on two categories of issues relating to environmental

    response actions at bases that are being closed: a) ways to improve interagency coordination;

    and b) ways to consolidate and streamline the practices, policies,· and administrative

    procedures of relevant federal and state agencies in order to expedite response actions.

    Congress specified that the Task Force make recommendations within existing laws,

    regulations and administrative policies. The Task Force Charter provides that the Task

    Force may also recommend changes to those laws, regulations and policies. To assist the

    Task Force in its deliberations this paper identifies specific issues for potential considefation

    within the broad framework of the Charter.




                                                    1
                                      ISSUE #1

STATEMENT OF ISSUE

      a)    To what extent may facilities on closing bases be used by non-military users
            while cleanup investigations or other cleanup activities are being undertaken
            by the Department of Defense (DoD)?

      b)    To what extent may DoD transfer a base in parcels that exclude areas where
            ongoing remediation is necessary? How should such parcels be delineated?

     c)     To what extent may existing or proposed land uses be a factor in cleanup
            decisions:

            I.     if the site is on the National Priorities List (NPL)?

            ii.    if the site is regulated under the Resource Conservation and Recovery
                   Act (RCRA)? or

            iii.   if the site is not on the NPL and is not regulated under RCRA?

      d)    To what extent may the practices, policies and procedures for determining
            allowable uses of the land during and after the completion of remedial action
            be consolidated and streamlined:

            i.     if the site is on the NPL?

            ii.    if the site is regulated under the RCRA? or

            iii.   if the site is not on the NPL and is not regulated under RCRA?


BACKGROUND

     · Statutory Reaujrements

            Environmental Restoration

     . The Comprehensive Environmental Response, liability, and Compensation Act

("CERCLA"), 42 U.S.C. §§9601-75, and the Resource Conservation and Recovery Act

(RCRA), as amended by the Hazardous and Solid Waste Amendments of 1984 (HSWA),


                                           2
i   §§42 U.S.C. 6901-69921<, are the principal federal statutes governing the cleanup of defense

    sites contaminated by hazardous substances. CERCI.A §120 specifically addresses the

    responsibilities of federal agencies. Under CERCI.A §120(a), federally owned facilities are

    subject to and must comply with CERCI.A to the same extent as nongovernmental entities.

    In addition, 10 U.S.C. §2701(a)(2), specifically notes that environmental restoration activities

    must be conducted consistent with and subject to CERCI.A §120. Section 120(a) requires

    EPA to use the same criteria to evaluate federal sites for the National Priorities List (NPL),

    the list of highest priority sites under CERCI.A, as it does for private sites. EPA interprets

    §120(a) to mean that the criteria to list federal facilities should not be more exclusionary

    than the criteria to list non-federal sites.   ~   EPA, Listing Policy for Federal Facilities, 54

    &g. B&g. 10520, 10525 (Mar. 13, 1989).

           CERCI.A also establishes certain minimum procedures that must be followed when

    federal agencies transfer contaminated property. Section 120(h)(3) of CERCI.A provides

    that when the federal govemffient transfers real property on which any hazardous substance

    was stored for one year or more, or known to have been released, or disposed of, the

    federal government must provide a covenant in the deed. The covenant must warrant that

    all remediation necessary to protect human health or the environment with respect to any

    hazardous substance remaining on the property has been taken before the date of the

    transfer, and that the United States will take any additional remedial action found to be

    necessary after the date of transfer.

           Some entire bases are listed on the NPL, including five on the 1988 closure list. In

    other cases, only a discrete site within· the base is listed on the NPL              There are


                                                   3
contaminated sites on other bases, that are not listed on the NPL CERCLA §120(a)(4)

requires response actions-on non-NPL sites to comply with state laws to the extent that state

laws apply equally to response actions at non-federal facilities. Some bases contain facilities

currently regulated under RCRA or state hazardous waste regulatory programs (or both);

these facilities will need to be closed in accordance with those statutes. HSWA requires a

treatment, storage, or disposal facility (TSDF) that has released hazardous waste into the

environment to undertake "corrective action" to clean up the release. Where a base, or

portion of a base, is both listed on the NPL and subject to state-delegated RCRA

authorities, conflicts may arise regarding a particular proposed remedial action.

              Transfer of Land

       Other statutory authorities also apply to real estate owned by military departments

that must be considered in the context of transferring land at a base that is being closed.

Section 204(c) of the Base Closure Act, for example, reiterates that the National

Environmental Policy Act (NEPA) applies to the actual closure or realignment of a facility

and the transfer of functions of that facility to another military installation. Other statutes

impose procedural requirements; 10 U.S.C. §2662(a), for example, provides that the

. Secretary of a military department may not enter into certain real estate transactions,

including leases and other transfers of property where the value exceeds $200,000, until 30

days after he has submitted a report of the facts surrounding the transaction to Congress.

Title 10 of the United States Code, §2668(a), authorizes the Secretary of a military

department to grant easements for roads, oil pipelines, _utility substations, and other

purposes including "any ... purpose that he considers advisable."


                                              4
       Under the Base Closure Act and the Federal Property and Administrative Services

Act, a federal agency receiving property from another federal agency must pay the estimated ·

fair market value for available facilities. ~Federal Property and Administrative Services

Act, 40 U.S.C. §571 ~ill!·; Section 204(b) of the Base Closure Act, Pub. L 100-526, 102

Stat. 2627; Federal Property Management Regulations, 41 C.F.R. §§101-42 to -49.       Excep~

tions to this general rule are allowed for intra-DoD transfers of real property and if the

Administrator of the General Services Administration and the Director of the Office of

Management and Budget both agree. 41 C.F.R. §101-47.203-7. Regulations implementing

this exception allow no-cost transfers for certain specified purposes including public parks

and recreation areas; historic monuments; public health or educational purposes; public

airports; and wildlife conservation.   :W. In addition, the McKinney Act, 42 U.S.C. § 11411,
requires DoD to give non-profit organizations that assist the homeless priority in leasing

unutilized and underutilized property.

       Section 204(b) of the Base Oosure Act requires the Secretary of the military

department contemplating a property transfer to consult with state and local governments

to consider any plan for the use of the property that the local community may have. Pub.

L 100-526, 102 Stat. 2627. States and local governments are generally given priority over

private individuals in acquiring surplus federal property. 41 C.F.R. §101-47.203-7.

       Issues Surrounding Transfers and Conveyances ·

     . Some bases identified for closure contain facilities that are in demand for non- .

military use. DoD may desire to lease, or otherwise transfer use of, such facilities to non-

military users before the base is closed. In some cases the facility may be within an "area



                                               5
of concern" identified by DoD as needing either investigation to determine the need for

environmental restoration or actual restoration. The U.S. Environmental Protection Agency

(EPA) and state environmental regulatory agencies will have different interests in the site

depending on the state of knowledge about the site, the regulatory posture at the site, and

the stage of the investigation or restoration. It may be necessary to limit or restrict the non-

military use in order to ensure that it does not interfere with the ongoing investigation or

cleanup. Differing controls or limitations on interim use of facilities may be appropriate

during the phases of investigation and restoration.

       The procedures for determining interim and final uses of the affected land are likely

to differ depending on whether the cleanup is conducted under CERCLA, RCRA, or some.

other framework. In addition, the intended interim or final use of the land may or may not

be a valid consideration in determining cleanup standards, depending on which of these

statutes governs the cleanup decision. The extent to which planned land uses affect cleanup

decisions is likely to be highly controversial. If higher levels of residual contamination are

allowed after cleanup because, for example, the planned use is industrial, measures must be

taken to ensure that future changes in land use do not expose the public to unacceptable

risks from the residual contamination.·

       Contamination on many bases is limited to relatively small discrete areas. One issue

raised in such cases is whether the uncontaminated areas may be transferred as separate

parcels, with the Department retaining the contaminated areas until remedial action is

completed.




                                               6
      A corollary issue is how to define a .contaminated area, particularly where

groundwater may be contaminated and the extent of that contamination (i&... size, direction

of flow, and speed of the plume) is unknown. It may be difficult to determine precisely the

boundaries of an "area of concern" prior to completion of cleanup. Another related

question is whether, and under what circumstances, DoD may transfer uncontaminated

surface above contaminated groundwater, or contaminated surface above contaminated

groundwater for which surface remediation is complete. Also, the issue of defining and

transferring uncontaminated areas is complicated by the fact that activities during the

remedial design and remedial action could reveal that contamination extends to an area that

had already been transferred by easement, lease, or some other land use transfer

mechanism.

       Restrictions such as prohibitions on well drilling or other subsurface. activity (if

subsurface contamination is an issue) may be appropriate. DoD could also sell or otherwise

transfer parcels of property with a right of entry for monitoring or with other use

restrictions. How restrictions are implemented will be critical to the protection of public

health and safety, success of the cleanup, and resolution of future conflicts between the

military department and its transferees. Restrictions on use are effective if they are made

a part of the deed and "run with the land" so that later owners cannot extinguish or ignore

them. Such restrictions also decrease the marketability of the land, making it more difficult

to obtain purchasers. Lenders may be hesitant to lend money to purchase land which has

had use restrictions placed on it.




                                              7
        Impediments to transfer resulting from threats of liability under CERCIA §§ 106 and

107 cannot be ignored._ Potential transferees (including lessees) of property from DoD could

be considered "owners or operators" of a CERCIA site liable for the costs of response at

the site. At Pease Air Force Base in New Hampshire, this problem was resolved by

legislation providing complete indemnification to the State of New Hampshire and lenders

for any liability associated with releases caused by the Air Force at the base.

Indemnification will likely be a recurring issue, since agencies do not have the authority to

indemnify a purchaser theinselves.

        DoD has noted that bases may not be "nearly as valuable to the private sector" as

they are to DoD.   (~   Statement of James F. Boatright, Deputy Assistant Secretary of the

Air Force, before the Defense Base Closure and Realignment Commission, at 3 (May 10,

1991)). Moreover, the commercial real estate market is still in a slump,      ll.t. at 4, which will
likely impede any large-scale transfers of property for some time. Factors that could affect

the value of a particular piece of property at a military installation include:

        (1)     impact of closure on local economy
        (2)     ability of local market to absorb a large tract of land in a short time period
        (3)     age and possible negative value of improvements on land
        (4)   . availability of public benefit conveyances
        (5)     set asides for wetlands, critical habitats, or contaminated areas

IQ. at 9.

        Other factors that may affect land values include the degree of encroachment of non-

military uses upon the base    (~    military flight paths, weapons uses, training needs that

affect local communities); the condition of the base facilities and its improvements; the

facility's suitability for other uses without significant expenditures; and the value of existing

improvements that can add to a property's marketability.




                                                8
OPTIONS

    a)    Identify the circumstances in which, and the criteria and restrictions under

          which, facilities on closing bases may be leased or otherwise transferred for

          use by non-military users while cleanup investigations or other cleanup

          activities are being undertaken.

          i)     Identify and develop criteria for the use of innovative real estate

                 transactions to accomplish such transfers.

          ii)    Identify and develop criteria for the use of conservation easements or

                 other potections for ecological fl!S()W"Cl!S for parcels that have significcmt

                 value as natural areas.

          iii)   Develop a policy to govem the use of parr:els within an environmental

                 "area of concern" during the time investigation and cleanup ir ongoing,

                 including provisions regarding protections from liability, access rights,

                 compliance with applicable health and safety plans, and subsequent

                 transfers.

    B)    Cl&FJY &f'f)lieaBle staftltes, regulatiens &ad pel:ieies te ituJieate that pertians

          ef Beses fer ·.vhieB tHere is ae   ~eatami.eatiea   er lilEelil=leeEi ef eeatamiaatiea

          ma,r he H"&B5feffed iRdepeaEieBt ef     eeat~Beted      p&reel-5.

    e)    leeatify tl!e Eliffefeaees ia tl!e pelieies, Jlf&etiees aae JlfeeeS!lfeS fef

          tleteHBiniag e:llerw·&ele ttses ef lead tittriag ead after eleB:Bttp 'Nhea the site is

          ea tke NPL; a RCR.'\ Feg~~Iatee site, ef aeitl!ef. Reeeaeile taese diffefeaees.




                                             9
d)   Reeeaeile a.ad eeRli:Jiae eYersigRt &Ad regulatOf)' respeH5il3ilities HASer

     CERCL'\ Me RCRA at bases beiHg elesee er realigttee.

e)   ldeatiey &REI Se·,elep eriteria fer the t~se ef illfle·;a.tive real estate tr&RSaetions.

f)   IEieatif)· end Ele-,elep eriteFia far the ttSe ef eetlSeAl&tiOB e&Semeas or ether

     preteeaeas fur eeelegteal researees fur eertaift preperaes betag sale er

     kaasferree.

g)   l>er.~elep   a peliey· te gevefR the HSe of p8:Feel5 vAHHB aa "He& of eeaeem"

     dttriag the time iw.·estigatiea &Hd remediatiaa is aageifig, iaelading pre-lisieH5

     regarEiiBg aeeess rights, eofBfJliaaee vAth &J3pHea91e health &BEl saf.ety plans,

     BB:e Sl:leseqaeat trall5fers.

b)   Investigate the potential for redefining the boundaries of NPL sites on miliJary

     bases from including the entire base to an area determined by the source and

     extent of contaminatioiL

c)   Determine the eXtent to which applicable statutes, regulations, and policies

     provide that portions of bases for which there is no contamination or likelihood

     of contamination may be transferred independent         of contaminated parcei.s.




                                       10
                                         ISSUE #2

STATEMENT OF ISSUE

       a)     To what extent may the practices, policies and procedures for determining
              cleanup standards be consolidated and streamlined:

              i.     if the site is on the NPL?

              ii.    if the site is regulated under the RCRA? or

              iii.   if the site is not on the NPL and is not regulated under RCRA?

       b)     To what extent may the practices, policies and procedures for executing the
              cleanup be consolidated and streamlined?

              i.     if the site is on the NPL?

              ii.    if the site is regulated under the RCRA? or

              iii.   if the site is not on the NPL and is not regulated under RCRA?


BACKGROUND

       The roles and responsibilities of state environmental regulatory agencies and EPA

vary depending on whether a site is on the NPL, is regulated under RCRA, or neither.

Each of these three legal categories provide distinct opportunities for consolidating and

streamlining the cleanup process. In particular, the procedures for determining the cleanup

standards for an NPL site will likely differ from the procedures for determining the cleanup

standards for a TSDF regulated by a state that has received RCRA corrective action

authorization from EPA Similarly, the procedures for implementing a remedial action at

an NPL site differ from the procedures for carrying out a corrective action at a TSDF in a

state that has a fully delegated RCRA/HSWA hazardous waste regulatory program.

Moreover, the procedures for determining and implementing cleanup decisions at non-NPL,

non-RCRA sites may differ from both of these systems.


                                             11
       Two sections of CERCLA are directly applicable to the questions of determining and

implementing cleanup standards at federal facilities. Section 121 of CERCLA. addressing

cleanup standards, is the primary statutory authority for determining cleanup standards at

all sites listed on the NPL Section 121 delineates the nature of the remedy to be chosen

and requires that a chosen remedy protect human health and the envirorunent. Section 121

also provides that legally applicable or relevant and appropriate more stringent state

standards (ARARs) may apply in determining the proper level of cleanup.

          As already noted, CERCLA §120 specifically addresses the responsibilities of federal

agencies for cleanup of hazardous substances. CERCLA §120(a) requires federally owned

facilities to comply with CERCLA to the same extent as nongoverrunental entities.

CERCLA §120(e)(2) provides that for federal sites that are listed on the NPL, EPA plays

a significant role in remedy selection. The section directs the federal agency concerned to

enter into an lAG with EPA for the "expeditious completion ... of all necessary remedial

actions" at the facility. Executive Order 12580 specifies the procedures to be followed prior

to the selection of the remedy by EPA Exec. Order 12580, §10,        52~.~·        2923, 2928

(1987).

          For federal sites not on the NPL, CERCLA §120(a)(4) mandates that state laws

concerning response actions apply. Arguably, all of the procedures contained in the NCP

may apply even to federal sites not on the NPL Section 120(a)(4) raises the possibility that

§121 guidelines on state standards must be followed even for those federal facilities listed

on the NPL




                                               12
       Section 120(i) of CERCLA states that nothing in CERCLA §120 "shall affect or

impair the obligation of any department, agency, or instrumentality of the United States to

comply with any requirement of [RCRA) (including corrective action requirements)."

Section 120(i) states only that corrective action authorities apply to federal facilities; it does

not specify the extent to which those authorities, found in RCRA §3004(u), will apply if

CERCLA response activities are being conducted at the same time as corrective action

activities at a federal facility.

OPTIONS

       a)      Identify the differences in practices, policies and procedures for determining

               cleanup standards under CERCI.A, RCRA and other applicable laws,

               including state laws; reeeaeile these eiffereaees.

       b)      Identify the differences in practices, policies and procedures, inclllding DoD

               contracting procedures, for executing cleanups under CERCI.A, RCRA and

               other applicable laws, including state laws; reeeaeile these eiffereaees.

        e)     IateFpret Cli:RCLt\ §12Q(i) ia eeRjHHetieH v.~th §121 se that RCRA §3QQ4(H)

               re€J:ttiFemeats de aet delay CERCL'\ ele&AHp aetien5.

       d)      Reeeae~le    &nd eemBiae eversight &Bd regHlatefY respensieilities Mader

               CERCLA ee RCRA at eases eeiag elesee er realigaee.

       c)      Investigate the potential to erpedile the process ofdetirmining cleanup Slandards

               tJuough the we of standard or generic responses to reauring types of

               contamination, such as petroleum releases. In partiadar; investigate the potential

               for generic RI/FSs and RCRA. Facility Investigation/Corrective Measures Studies.


                                                13
d)   Investigate the potential for combining the land use planning process for base

     reuse, enviroivnental assessment of base closure under NEPA. and cleanup

     studies such as an Rl/FS or RCRA FaciliJy Investigation/Corrective Mearures

     Study.

e)   Investigate the potential for expediting cleanup through improved contracting

     policies and procedures.

f)   Evaluate DoD'J resource availability for restoration activities.




                                      14
                                           ISSUE #3

STATEMENT OF ISSUE

       Are there sites for which remediation is not technologically feasible, or for which the
       cost of remediation is simply prohibitive? If so, what uses, if any, can be made of
       such sites, and what mechanisms are needed to protect the public in perpetuity from
       the risks associated with such sites?


BACKGROUND

       This issue most frequently arises at military installations or former military

installations that are contaminated by munitions residue. There are many such sites around

the country with some degree of contamination. Two installations scheduled for closure

under the 1988 Base Closure Commission report, Jefferson Proving Ground and Fort

George G. Meade, have significant amounts of munitions residue. For example, at Jefferson

Proving Ground alone, it is estimated that more than 23 million rounds of munitions have

been fired, and over 1.5 million rounds remain as high-explosive duds.

          Munitions residue that contaminates military installations exists in many forms. The

simplest form is the inert fragmentation/ casing which remains after the high explosive fill

has detonated. On the other end of the spectrum are munitions containing high explosives

that malfunction (duds) and may be on the surface or (most probably) many feet

underground. Some munitions have been recovered as deep as 30 feet beneath the surface.

With the proper stimulus, these duds may detonate. In addition to these two types of

munitions are many other practice/training devices that may or may not contain an explosive .

charge:



                                               15
      The regulatory status of unexploded ordnance under RCRA and CERCIA is not

clear. In fact, there are differing interpretations among EPA and the States of RCRA

storage, treatment and disposal requirements for the manufacture, testing, handling and

disposal of ordnance, munitions, and other weapons.         DoD is currently pursuing an

amendment to the U.S. Senate Federal Facilities Compliance Bill (S. 596) that would allow

the development of alternative regulations to address the RCRA issue.

       Not every military installation, or pan of an installation, creates a munitions

contaminated area to the same degree.        For example, several bases may all use one

bombing range. At other bases, only small arms ammunition may have ever been used.

Therefore, the scope of contamination may not be easy to determine, and a records search

by the services may be needed in order to determine the location and extent of unexploded

ordnance. However, records may be inaccurate or non-existent, especially for actions that

occurred years ago.

      The feasibility and cost of remediation depends on the future intended use of the

property and the level of cleanup necessary for the intended use. Surface clearing may be

adequate for pastures or wildlife preserves. (Surface clearing has beep. proposed at Ft.

Meade where munitions contaminated property is being considered for use by the

Department of the Interior as a wildlife refuge. However, strict controls on human access

will also be required.)   DoD safety standards do not permit custody transfer of lands

contaminated with explosives that may endanger the public, when the contamination cannot

be remediated with existing technology and resources. Oeanup of the same property for

residential or commercial use may be prohibitively costly, if not technologically infeasible.



                                             16
This is because more land must be excavated to recover dud munitions buried beneath the

surface that may be detonated by construction and excavation. Clearing land of ordnance

not only requires specialized equipment, it can also be very dangerous and extremely labor

intensive.

       Where adequate clean-up for residential or commercial use is not feasible, DoD

needs mechanisms to protect the public from residual risks on sites which are transferred.

First, past land use (and potential hazards) must be clearly identified to future· owners.

Second, restrictions on future land use must be clearly identified to future ownerS aild

somehow retained with title for all subsequent transactions.           Restrictions should be

commensurate with the residual unexploded ordnance hazard.

       Even with restrictions on future use, liability questions remain. DoD is still liable for

cleanup resulting from DoD activities prior to transfer. In cases where public access is

restricted, what happens if there are trespassers or access is required for. legitimate reasons,

~   firefighting? Can DoD ensure that it will not be liable for contamination created by

future users?

       Remediation costs are proportional to the depth of cleanup. This variability of cost

is best illustrated by the estimated remediation costs for Jefferson Proving Ground (95

square miles near Madison, Indiana) according to various levels of cleanup.




                                               17
                    ESTIMATED COSTS FOR VARYING LEVELS OF
                            EXPLOSIVE REMEDIATION

                     (EStimates provided by Jefferson Proving Ground)


               CLEANUP LEVEL                               COSTS

               Surface Cleanup                             $550 Million
               Restricted Cleanup
                      3 Feet Deep                          $2.8 Billion
                      6 Feet Deep                          $3.8 Billion
                      10 Feet Deep                         $5.0 Billion
               Unrestricted Cleanup                        > $5.0 Billion
               (Technology for unrestricted
               cleanup is currently not available)


        Special Concerns and Considerations

        Present DoD policy requires that plans for leasing, transferring or disposing of DoD

 real property where ammunition or explosives exists, or is suspected to exist, be submitted

 to the DoD Explosives Safety Board for review and approval. DoD regulations (DoD

 6055.9-510) specify that contaminated property cannot be transferred until "rendered

 innocuous."

        Restricting a cleanup to surface contamination may not ensure that the surface

.. remains uncontaminated over time. Freezing and thawing of the soil and other physical

 factors may result in subsurface ordnance migrating to the surface. Therefore continuing

 remediation may be necessary, since all remediation tends to be temporary in lands which

 have been heavily contaminated by penetrating ordnance like aircraft bombs and artillery.

        The location of buried ordnance may not be known. Therefore, it may be difficult

 to certify that "clean" sites are in fact really clean. This has occurred at Jefferson Proving

 Ground where large amounts of World War II munitions were found in the course of

 excavating a supposedly clean area. ·


                                               18
       Ordnance cleanup is inherently dangerous. The need to characterize and remediate

a site may conflict with requirements to minimize health and safety risks to cleanup

personnel.

       In addition to lack of technologies to remediate the site, technologies may also not

be available for conducting investigations of the site. For example, detectors may not be

capable of detecting ordnance buried deep beneath the surface or in wetlands.
                                                                    •
       The excavation required for a complete cleanup would likely generate significant

undesirable environmental impacts. Removing 10+ feet of soil over a large area would

generate impacts similar to strip mining.           However, in areas heavily contaminated by

penetrating ordnance, even this level of cleanup might yield temporary results, as ordnance

items later work their way to the surface.

       In most cases, installations contaminated with high explosive munitions residue will

not be suitable for commercial or residential use, not only because of the cost or lack of

cleanup technologies, but also because it may be impossible to guarantee that a site is in

fact "clean."

OPTIONS

       a)       Separate highly eeetamiaated area5 Hem "elea~" areas (k:Bev8l as "pareel-iag"),

                se that p&Ft ef the lead that e"f)erieaeed little er ae eeatami:natiea might Be

                easi~   ele&aed, -;erified aed released.

       h)       PeffeffB st:1rfeee eleaHHps sttffieieat te &ll&lW· aetivities 'Hhere hath eleRAHp ane:l

                BtiHUlll aeeess S:Rd e*fJSSl:tfe is limited, U;;, vlildlife ·reRlges er eertaiB ty}les ef

                ifldastrifkl aeti-:tties aet ifwel¥iag ee115tFlietiea er exear;atiea


                                                   19
e)   eslablisl! meel!&nisms le preleel tile pHblie iH peFpeiHily frem resi8Hal risiES

     at sites where remediatien is at a lesser Ie·1eL

a)   RelaiH tide iH DeD aHa aesigHale tile area as a ·.vilalife refuge, bird saHelliafY

     er similar ase aet iw1elYiag pa8lie eeeess.

e)   Use fuads frem tHe B~e ClesHre .Aeeeaat te rese&Feh &lui develep teehaelegy

     far eXJJlesive erdftftftee El~ese.l.

a)   Provide a list of bases and formerly used defense sites at which nwnilions

     conJamination is an issue.

b)   Investigate whether any other sites or types of conJamination at closing bases are

     tecluw1ogicaily or economically infeasible to clean up.




                                      20
                                         ISSUE #4

STATEMENT OF ISSUE

       To what extent can overlapping or duplicative regulatory responsibilities and
       functions be combined or delegated to a single regulatory authority?


BACKGROUND

       Existing law allows EPA to delegate to states the primary responsibility under

RCRA/HSWA for overseeing corrective action at TSDFs, but does not allow similar

delegation of responsibility under CERCl.A to oversee remedial actions at NPL sites. The

potential for delegation of corrective action oversight under RCRA is largely unrealized,

since few states have met EPA's criteria for authorization.

       Although CERCLA does not provide for delegation of that program to individual

states, CERCLA §121(f) calls for "substantial and meaningful involvement by each state in

initiation, developments and selection of remedial actions to be undertaken in that State."

EPA's proposed revisions to the National Contingency Plan (NCP) in 1988 included policy

options to allow NPL sites to be "deferred" to states to facilitate more rapid cleanup and to

conserve the federal fund. Amidst growing controversy over this proposed expansion of

states' role at NPL sites, the EPA Administrator informed a Senate committee in June 1989

that EPA would defer action on this proposal, and the new NCP includes no such option

for states. Nevertheless, many states take an active role in federal cleanups of NPL sites,

·often assuming "state lead" under cooperative agreements with EPA Most states also now

operate their own cleanup programs for remediating non-NPL, non-RCRA sites.



                                             21
        Delegation of the RCRA regulatory program to the states is intended to eliminate

duplication of effort by agencies that have overlapping areas of responsibility.                           The

argument is that delegation will expedite cleanups at TSDFs, including those located on

bases that will be closed. Delegation of RCRA corrective action authority to more states

might expedite cleanups at a significant number of bases subject to closure. When EPA

delegates RCRA §3004(u) authority to individual states, it could perhaps adjust the

delegated authorities to account for the special circumstances encountered at federal

facilities.

OPTIONS

        e)    DeteFftliae why mere states Ba·le aet satisfied the efitefia f'er delegatieR ef

              RC~\:/HS\lf.A       eerreetive aetiea      &HtReri~.   If aelegatiee is heiag delayed fer

              rea:sefl5 ttftfelatefl te the estaBltsfted eriteria, remeYe these impediments.

              1\ssist states te meet the eriteria.

        e)    CellSiEief the e'eHefits ef 8 siHgle eft•tire.ftfftefttal ageHey (federal er state)

              B&¥iag regulate!=)' resfJensiBilir:y t:er all fta:2arEietis Sl:ll:lstanee eleaiH::lps at elesiag

              e!lSes.

        a)    &search whether barriers to consolidating in a single environmental agency

              (federal or state) regulatory responribility for all hazardous substance clearwps at

              dosing bases are administrative or statuloly.

       · e)   Aittherize delegatiea te states ef &Htherity te evef5ee eleaiutp             aet~eftS   at   ~1PL

              sites \Yhere· the state demenstrates eapaBility te de se ..




                                                    22
' .

      d)   Investigate specific areas where it is possible to reconcile and combine oversight

           and regulatory responsibilities under CERCLA and RCRA at bases being

           closed or realigned.




                                           23
                                          ISSUE #5

STATEMENT OF ISSUE

       To what extent may proceeds from property transactions be used to rund cleanups?


BACKGROUND
       The 1988 Base Closure Act (P.L 100-526) authorized closures to begin in January

1990 and end by October 1995. The statute allows DoD to use the proceeds from the sale

of land at these closing bases to offset the costs of such closings if the sale occurs by

October 1995..

       Cleanup of many closing bases will extend beyond five years and final transfer of

some portions of those bases, therefore, may not occur until after the five year deadline

passes. Moreover, funds currently budgeted for cleanup of contaminated sites at closing

bases are insufficient to clean up all such sites.      Until fiscal year 1991, cleanup of

contaminated sites at   base~   slated for closure was primarily funded under the Defense

Environmental Restoration Account (DERA), DoD's overall account for environmental

restoration at all bases. DERA has $1.1 billion authorized for Fiscal Year 1991. In the

National Defense Authorization Act for Fiscal Year 1991, P.L 101-510, Congress moved all

funding for cleanup activities at closing bases from the Defense Environmental Restoration

Program (DERP) at active bases to the Base Oosure Account, which was provided with

$100 million to fund the costs of cleanup at the bases on the 1988 closure list. Congress

took this action because of its concern that cleanup at closing bases should not compete with

cleanup activities at active bases for DERA funds under DoD's worst-first priority system.




                                             24
       Applying the proceeds from the property transactions to the cleanup of other

contaminated sites would supplement the funds appropriated for cleanup and expedite

cleanup of all such sites. For example, a trust account might be created with the proceeds

from the lease or sale of land at a site, to be used to pay the costs of long-term operation

and maintenance of a groundwater pumping and treatment system required as part of the

cleanup at that site.

       An example of the use of a trust mechanism to fund future clean-up activities is

found in the consent decree entered in connection with United States of America v. Stauffer

Chemical Company. et a!.. Civil Action No. 89-0195-Mc, (D. Mass.). Pursuant to the

consent decree, the parties allocated responsibility for conducting and paying for cleanup

activities and agreed to the establishment of two trust mechanisms and an escrow account

through which past and future cleanup activities would be financed.

       The defendants responsible for conducting future agreed-upon cleanup activities on

the site agreed to establish a trust (the "Remedial Trust") and provide the trust the money

necessary to ensure the uninterrupted progress and timely completion of the required

cleanup work. . These defendants will remain jointly and severally liable for any failure of

the Remedial Trust to comply with the terms of the consent decree.

       A second category of defendants agreed to establish a second trust (the "Custodial

Trust") and to convey to such trust title to their real property interests in the site.. Under

the terms of the consent decree, the Custodial Trust is responsible for managing the

property, which includes:




                                             25
              implementing land use restrictions that would maintain the integrity and

              prevent the unauthorized disturbance of the caps and other structures that are

               to be constructed at the site as part of the cleanup process.

               permitting access to the site for cleanup activities.

              subdividing die property and locating potential purchasers.

               negotiating and executing the sale or transfer of the property.

              arranging for the sale or transfer proceeds to be delivered to the escrow

              account established by the consent decree (the "Escrow").

       If any property included in the site is unsalable, the Custodial Trust is to establish

a further trust to hold and operate the property in accordance with a plan developed by

EPA in consultation with the Commonwealth of Massachusetts. The Custodial Trust is not

to sell any real property included in the site until after certification of completion of the

remedial action, except in limited circumstances where future cleanup and control of the

property has otherwise been assured by EPA and the Commonwealth.

       The bulk of the proceeds in the Escrow are to be applied to reimburse the United

States for response costs incurred prior to the entry of the consent decree and to reimburse

.the defendants responsible for conducting future cleanup activity for their respective costs.

The defendants responsible for conducting and paying for future cleanup activity are also

jointly and severally responsible for any failure by the Custodi8.1. Trust, any further trust

established pursuant to the consent decree, or the representative of the Escrow to comply

with the terms of the consent decree. The Custodial Trust and its trustees are not to be

considered owners or operators of the site property for liability purposes solely on account


                                              26
of the Custodial Trust's ownership and disposition of such property in accordance with the

consent decree, so long as the Custodial Trust does not conduct or allow others to conduct

any activity on the property other than activities permitted by the consent decree.

OPTIONS

       a)     Investigate the feasibility of using a OISiodial or other type of trust funded by the

              proceeds from land transfers to fund long-term cleanup activities at closing

              bases.

       e)     Remeve   ~e   ftrte ye!lf limitstiell 611 tl§e ef lsna trftllSfef preeeeds far eleft11Hj3
              at elesiag Bases.




                                                27
                  Understanding on Knvironmental Coordination
                      and Cleanup at Robins APB, Georgia


Meetings were held ln Atlanta and Robins APB, Georgia, called tor and led by
Congressman Richard Ray on 14 and 15 February 1991 and attended at Congreuman
Ray· a request by senior manage~~~ent otClcials ot the Georgia lnviro~~~~~ental
Protection Dlvialon, the Knvironmental Protection Agency and the Onited States
Alr Force. Tbe purpose or the meetings was to identity ways to achieve early
environmental cleanup actions at Robina APB as part ot ita Inatallat\on
Restoration Program.    As a result, a high level workgroup was formed to make
suggestions tor expediting the ongoing cleanup, consistent wltb the exletlng
Interagency   Agreement   between all parties under Section 120 ot the
Comprehensive Environmental Response, Compensation and Liability Act and where
practicable to suggest other initiatives that could be useful tor other
installations.

The workgroup, consisting or the Deputy Regional Administrator, BPA Region IV;
the Chiet', Land Protection Branch, Georgia lnvlronmental Protection Dlvidon;
and the Director, Warner Robins Air Logistics Center Environmental Manage~~~ent
orrice, has Dtt and has developed several rec011111endations tor expedited
implementation at Robins ArB. Additional initiatives wUl be developed tor
use at Robins AFB with the goal or enhancing and accelerating base cleanup
consistent wltb all applicable state and t'ederal lava and regulations. The
workgroup or designees or the respective members will meet from time to tlme
as may be necessary to accomplish this goal.

It 1e the understanding of all parties that thle workgroup baa been and will
continue to be given the fullest support by all levels ot' the Agencies
involved. The workgroup will endeavor to make periodic reports or significant
achievements and successful initiatives.

Specifically, it 111 understood by all parties that the workgroup shall have
full dlecretlon to suggest changes to a.n,y activity, procedure, organization,
guidance, or policy that may result in expediting or enhancing environmental
cleanup, and tbat workgroup suggestions wlll be given careful consideration at
the levels or decision required tor implementation.      The group will give
special attention to mea3urea that wlll streamline processes and ellalnate
unneceuary del~, such as duplicative efforts or failure to share or use
available expertise or the agencies involved, whlle at tbe sa~~~e Ume being
tully protective ot' health and the environment and giving ample opportunity
tor public review and comment.

Where initiatives that could benefit other installations are noted,- these ~
be made the subject or special reports, separate trom any periodic reports,
that can be forwarded tor review and implementation by the appropriate
!S&encies, so that the et't'orts or thle group may benetlt the nationwide
environmental program or the Air Force and the Department of Defense, as well
as the KPA and the State or Georgia.
        SPECIFIC COMMITMENTS TO EXPEDITE CLEANUP ACTIONS

RECORD OF DECISION: The Environmental Protection Agency
Region IV (EPA), Georgia Environmental Protection Division
(GEPD), and the u.s. Air Force (USAF) will work toward completing
the Record of Decision by 30 June 1991, vice the original
scheduled date of October 1991. To meet this date, the parties
will work jointly to accelerate preparation of the Remedial
Action Plan with a target date for start of the public comment
period by 25 April 1991.
LANDFILL 4: The Air Force will expedite efforts with a goal of
beginning field work on remedial actions within six months after
the Record of Decision is signed. EPA Region IV and the Air
Force will work together to resolve the issue of the need for a
Section 404 permit so construction of a runon control system can
begin as soon as possible.
WETLANDS: BPA and the Air Force will work jointly to define the
required scope of the wetlands study. EPA personnel will do the
initial reconnaissance field work during the first week of
April 1991. The Air Force will complete the remainder of the
field studies in early 1992, depending upon the results of the
reconnaissance survey.
SHALLOW GROUND WATER AQUIFER: The Air Force will expedite field
testing with a goal of completing the remedial investigation
report by the end of 1991. EPA, GEPD and the Air Force will
expedite the review and revision of the report. The Air Force
will review the wetlands study results and the initial data from
the groundwater study to evaluate the benefit of installing
extraction wells to provide a barrier to reduce the contaminant
burden on the wetlands.
OTHER ROBINS AFB IRP SITES: The Air Force has formulated an
action plan to cleanup and close 16 sites in 1991. GEPD and the
USAF have discussed interim and corrective actions. GBPD and the
USAF will work together to assure the documentation supports site
closure.
  REPORT TO CONGRESS ON LIABILITY,
BONDING, AND INDEMNIFICATION ISSUES
     FOR DEPARTMENT OF DEFENSE
     RESTORATION PROGRAM AND
    HAZARDOUS WASTE CONTRACfS




 Office of the Deputy Assistant Secretary of Defense
                   (Environment)
                     Response Action Contractors' Liability Issues
            Regarding the Defense Environmental Restoration Program
                          Conclusions and Recommendations


Conclusions:
       The Department of Defense {DoD) faces a major challenge to cleanup its
contaminated sites quickly, effectively and without excessive cost to taxpayers. The
DoD cleanup and remedial program relies on the architectural and engineering
services and the design and construction capabilities of private sector remedial action
contractors (RACs). The RAC community expresses reservations about its members'
future willingness to undertake this work for the DoD because of perceived uncertain,
but believed potentially large, risk to their firms inherent in DoD's remedial action
work. In order to better understand the substance and basis of these concerns the
Department of Defense has endeavored to work with representatives of the RAC
community, other private sector contracting entities, as well as representatives
knowledgeable about the practices and concerns regarding the insurance and surety
sectors of the nation. The study concludes that contractors have the following deeply
held perception of the current liability situation:
               RACs, because of joint strict and several liability under federal and state
               law, may be found liable when they are not at fault.

               The resulting probability of insolvency through imposition of liability
               without fault is uncertain and therefore unacceptable.
                     RACs are unable to secure adequate insurance due to the
                     insurance industry's reluctance to become involved where the
                     risk is so uncertain and potentially large.

                     RACs are also hampered in obtaining performance bonds required
                     by the Miller Act for DoD construction contracts. Surety companies
                     are reluctant to write bonds. The uncertain and potentially large
                     risk for the situation has decreased availability and increased costs
                     which are ultimately reflected in DoD's costs.

               RAC's believe they are assuming risks that properly go to DoD as the
               generator of hazardous waste and owner of the site.

      These perceptions have serious implications for the continued progress of the
DoD's cleanup program, as DoD may not be able to sustain rapid progress in its
cleanup program without a heavy reliance on knowledgeable qualified contractors.

      The Department has also concluded the following as to the current status of
response action contracting and the legal liabilities of the Department
DoD is currently able to get adequate competition for our remediation
contracts.

Some well-regarded companies are not bidding on DoD contracts dting
the risk Issues as their reason not to compete.

DoD is not able to determine, based on this study, what impact the
contractor's perceived liability exposure is having on their bid pricing of
DoD contracts.

There is no evidence that quality of work on DoD contracts is being
affected.

The current liability picture particularly discourages contractor
participation in innovative remedies as they place potential additional
risk on the contractor. A contractor's prime defense to their perceived
liability exposure is to use standard, conservative measures wherever
possible, thus favoring an excessively conservative approach to
remediation.

RACs express a willingness to be liable for their failure to perform
adequately on their remediation contracts.

DoD as waste generator, facility owner, and overall manager of its
remediation effort is and should be ultimately responsible for future
problems associated with its remediation efforts, however, it should have
a legal remedy against a non-performing contractor.

      As a waste generator and owner of the contaminated site DoD is
      in a different liability relationship with its contractors than EPA
      with its contractors. As such liability shifting rules developed by
      EPA for dealing with its contractors may not be appropriate for
      DoD.

Private firms hiring RACs for private cleanup work engage in risk
sharing strategies with RAC contractors which may be adaptable to DoD
contracts.

             Different types of remediation projects have different
             inherent risks and therefore may call for different risk
             sharing strategies.

             Appropriate risk sharing strategies should result in reduced
             cleanup cost to the Department and the taxpayer, without
             increasing the ultimate risk to the treasury.

             Adoption of risk sharing strategies may require regulatory
             and legislative reform.
Res;ommendations:

       Based on the foregoing conclusions, the Department is concerned remedial
action contractors' perceptions may lead in the future to reduction in competition,
escalation in costs, lowering of quality, and increased risk to the public. We are also
very conscious that any recommendation we adopt for action or inaction, will have
economic consequences. Any choice inevitably confers competitive advantage on
some contractors and disadvantage on others. We must make sure we understand
the nature and implications of the incentives and disincentives our choices Imply.
We must encourage responsible and professional behavior by our oontractors. We
must avoid creating incentives for behavior that diverts government resources from
the primary goal of cleanup. Ultimately, whatever strategies we adopt should
improve the Departmenfs ability to perform effective cleanup in a timely manner at
a responsible cost to the taxpayer.
        Based on information developed in. doing this report, the Department is
implementing changes in its contracting strategies and polides within its amtrol to
resolve some of these issues. These include better acquisition planning including
varying types of contract strategies, redudng amounts of bonds required on
construction contracts or use of rolling or phased bonds, allowing irrevocable letters
of credit in lieu of bonds, and retaining certain work elements under DoD control
(e.g. signing hazardous waste manifests). The environmental and engineering arms
of the military departments will continue to examine their current contracting
practices with a view to recommending changes in guidance, policy, regulations, and
legislation to enhance the effectiveness of our environmental and remedial action
contracting. We have tasked them to ensure the scope of their study addresses
appropriate and equitable risk sharing between the DoD and its contractors in the
cleanup program, and to make spedfic recommendations for action to be taken.
The DoD is now also engaged in a comprehensive review of the Federal Acquisition
Regulations so as to ensure adequate treatment of environmental requirements.

       Two recommendations merit further consideration. The first would resolve the
extent of liability of a surety to a remedial action contract where their only
involvement is in providing a bond. This issue was addressed in the last Congress
by amending section 119(g) of the Comprehensive Response Compensation and
Liability Act to spedfically broaden coverage for sureties at National Priorities List
sites. Extending this prindple to all DoD sites, whether or not on the NPL, would
help bring sureties back into writing bonds for DoD cleanup a>ntracts at a reasonable
prices. This should broaden competition for a>ntracts, improve timeliness, and reduce
overall costs to the Departmenl This should not work a disservice to innocent third
parties, as ultimately it is the Department that is responsible for the remediation. The
prime purpose of the surety is to ensure the Department receives the fiscal benefit
of the contracl
      A more wide-sweeping risk sharing concept evolved from discussions during
the preparation of this reporl This concept would involve limiting a Response
Action Contractor's liability to outside persons. The Department and any other true
potentially responsible parties would be designated as those solely responsible for
damages to innocent third parties for damages arising out of a remediation action at
a DoD site-logical application of current law as to generators and operators of
hazardous waste facilities. The DoD's contracts with its RACs would then provide
for recovery by DoD from the RAC if the damages resulted from the RAC's
negligence. This concept is similar to the latent damages clause currently used in
construction contracts.
       The time for preparation of this report was short considering the complexity
of the issues. Among the areas that still need substantial further analysis are the
total cost implications of various risk sharing strategies as compared with the long
term liabilities of the government. We will continue working with the contractor
community and other interested parties to explore these and other recommendations
and solutions to improve the Department's clean-up program.
     APPENDIX 1

SAME FOI'1UD Pn r""lnp
                      .,
...., r··   ~n   .,




   "j

    '




  ·I


    '
    I




            jj.j ,•
    SOCIETY OF
     MILITARY
    ENGINEERS                  ..




ENVIRONMENTAL CONTRACTS
        FORUM

                           •




    30-31 JANUARY 1991 .
 BOLLING AIR FORCE BASE
                             SAME ENVlRONMENTAL CONTRACI'S FORUM
                                       30 • 31 JANUAR.Y 1"1
                                    BOWNG AIR FORCE BASE


EXECUTIVE SUMMARY

On 30 • 31 January 1991, the executive level Environmental Contracts FoNm of the Society of
American Military Enginecn (SAME) met at Bollin& Air Force Base to diSC'ISs the issue$ ofUabili-
ty, Indemnification, and Bonding in Environmental Contractina.

During the forum, the foUowing key issua were raised:

      L     There il a risk to the remedial action contractor (RAC) performin& emironmatal
work. Part of this risk are the unlalowns •ssor.iated with the wort. Another part il the potential
for third party liability suiu raulting &om the performance of such wort.

      b.     RACs are unable to obtain professional performance liability insurance for hazardous
waste site cleanup projec:ts. The insurance industry is reluctant to provide such insurmce due to
the high risk of liability associated with the performance of such wort. Available insuraDce only
coven the period of work performance; not the period during which RACs are most susceptible to
third party liability suiu.

      c.    RACs are unable to obtain surety bonds required for Federal government hazardous
waste cleanup projects because the surety bond industty sees a hip risk &om liability ill issuing
such bonds. AvaJ1able bonds are generally for projects of less than SSM value. Some oompania
arc self-bonding in Of.der to meet governmental requirements.

      d.      RACs feel that the Department of Defense (DOD) is raponsible for the presence of
the hazardous material on the site and therefore, should be responsible for their portion of the risk
associated with site cleanup. RACs believe that DOD should indemnify RACs performin& work
against. third party liability to oovcr the government's portion of the risk.

1n response to the ooncems raised .by RAC:S. DOD representatives indicated that they would
consider the following potential solutions to resolve the issues raised:

        a.    Change lt!e laws so that RACs are excluded as a potentially responsible party for
liability suiu resulting &om cleanup actions.

     b.    Revise the Federal Acquisition ReJulations (FAR) to extend the applicability of
indemnification to oontractor worlc done as a pan of the De~nse EnvironmeJUal Restoration
Program.

       c.   Limit the statute of limitations for contracton on eDYironmental cleanup projects and
limit the contractor's liability for a project.

       d.    Limit the contractor's liability to that resulting &om their neJ)igence.

      e.     Negotiate the risks of a project with the contractor and determine equitable clistn'bution
of the risk between the contractor and the government as a pan of the oontract.

  •·
                    "'
T
                    come to ~ps on these issues, the DOD's cleanup efl'ons may not suc:ICced                  ana to him
I
                    unsatisfac:tory. He indicated that althoulh the l'onl111 may not reach closure             ~n these ·~·~~i
1,
                    erpec:ted that proaress would be made during these two daJI.                                I




                    C.           AGENPA TOPICS

    I
                    1.   An ASsessment of the Risks and Potentl81 UabUitlu of E.a1riroiUDent1all R•espou,,
                    Contractors. Under Fecler.al and St.te uw, at Department of Defense F..::lDtle's. aaiiHhe!
     I              of These LiAbilities on lmplemenl8tion of DOD's EnYironmenwl Retneclllatlo~
                    Prognun.
     I

                    The industry topic l~der discussed, throu&h the use of an aample cleanup emm.
        I           pOtential liabilities lll,&t are aperienoed by a IV.C perfprmiD& wo~ -ill 111i!l~"
                    hazardous ~te site Cleanup efrons. Some1ofthe problema cited w,ere:
         I
                    did not cover 100 pe'*nt of the area under consideratioa, and, .u a ~
                    water leakage paths o{which the RAC would be unaware; po~ty of~~~-~~~~m~
         I          ~rec:lude cow cleanup•of toxic chemic:als, and these chemic:ab may leach out
                    c:6mpleted; the technolo&Y chosen for the cleanup (althoulfl qreed to bJ the
            I
                    etfcctive; today's t~, seen through the eyes of a jwy ill the future,
                     il-:                                '
                    be negligent.

                    The copic leader indicated that, when bidding on a task, the RAC will euminc
                    ~th ,the .proposed effort and make a decision of bid or 110-tpd aa:ordiqly.. '·',..,l... n,... !I,'(!.!J~!!!i
                    the RACs isl expe.WVC: and. because it only eovers the c:urm1l year and wu.J,D~t
                    f'Ptentiallaw suits woUld be c.xpec:ted, is wo~ess. The contnc:tor mlllllook
                    ~logy, theloow pathS of contaminants, and the location of the ~ relacm.
                    site when bidding on a job. There would be. a considerable difference of risk ~~~iill,.lt;Jllljl
                    job in the desens of Utah and one on Lhng Island. RACs are rduct~&J~n=t~~=~~~
                                               1

                    technology ill hazardous waste site cleanup efforts because of the creater risk to
                    a'llaw suiL By experience. the RACs have learned that if Water becomes
                    loses value, some damages (personal or property) may oa:ur, and people are llOltJI! •o.

                    I~ response to a question from a DOD repr~tative, the RAC anende~ estimll~
                    insurance would cost about S250K per year. .Once the work is completed, .the pciiiCJ.:is :h.;r111~:
                    and   there is no further coverage. The point was raised by i cootract.Or .that
                                     I

                    pedormed c:Dc:tly to spec:ification, the RAC oould still be taken to court, and ,cvo:;n ,ti,.UJ
                    c:Onvinced th~ court that it was neither negli'gent nor contrjbuted to the ·COtJdition in.Stipt
                    suit. the defense oosts for the RAC would be substantial.
                                     I

                    One contractor indicated that if he had to work for the pemmcnt without ill~~lllifjl;
                    .Ould take efforts to' decrease the risk. such u drill additioaal wdls to
                    ~undwater laow. This would unnecessarily Rise the cost of dOing the ..iork. ftll.!&'" ~~~•a:
                    r~presenta~ indicated that only five percent of the bid c:Oven potential risk
                    but this did linle to cover the potential risk costs.

                    The RAC represent&~ asserted that they were dealing with an tmbown liabiilitv
                    in 'swes will\ differing laws. As a result, thq might not be able· to adequately ~i~d;Ji~:~


                                                                              2

                            •'



                I
                                                                                        ..
                I
                     SAME ENVIRONMENTAL CONTRACI'S FORUM
                               30 • 31 JANUARY lt9l
                            BOWNG AIR FORCE BASE


A.        INTRODUCTION
The executive level Environmental Contracts Forum of the Society of American Military EDiineers
(SAME) met at Bolling Air Force Base oa 30 and 311anuary 1991 to diSNSS the issuea of4ability,
Indemnification. and Bonding in Euviroamental Contracting. Ill attendaDcc at thb foi'WII were
representativeS of the Office of the Depury Assistant Secretary of Defense (Environment). Army,
Na")', Air Force. and Coast Guard and em:utives repreaenting remedial action contractors {RAC.)
that perform eDYironmental deanup senica for the Department of Defense lllld private Milby.
A list of attendees for this forum is provided u Attachment A to this report.

"Ibis forum wu ~red by Captain I ames A. Rispoli, CEC. USN, Vice President, Environmental
Affairs. Society of American Military Engineers and Mr. Russ Milnes, Priocipal Deputy to the
Deputy Assistant Secretary of Defense, (Environment).

Prior to this forum. in'Yitees were aslted to submit di•cussion papers on any upect of the topic
issues. Suggested disc"IISvon topics included: what are the liability concerns; wbal are the
experiences with regard to liability and bonding; how is the risk of performin& en'Yironmental work
assessed; and how do the problems of liability and bonding affect competition. Seven papen were
submitted in advance or during the forum. These papers were provided as attacluacau to the draft
proceedings of the forum.
                      :t'

B.        OPENING R£MARKS
Captain Rispoli opened the forum by outlining the objective of the Environmental Contracts
Forum. which is to facilitate an ongoing &ank and open disn••von of programmatic and contractual
issues between industry and the military ser'Yices. He indicated that this was the third session of
this executive forum, and tltat SAME bad been asked by the Office of the Deputy Assistant Secre-
tary of Defense (Environment) to further address the issues of liability, indemnific:alion, and
bonding to assist them in obtaining views so that DOD might prepare a repon to Congress. To
increase the dialogue, CAPT Rispoli indicated that additional contractors bad been invited to
panicipate. CAPT Rispoli stated tltat proceedings of the forum 'M)uld be issued. These
proceedings would not provide any quotes or ann"bution. He assencd that the forum was DOt a
place for debate, but was a means to disn.ass the issues so that an in attcadaace could listeD and
learn. He asked if there 'M)uid be 1117 objec:Qoas in havin& submitted papers publisbcd as a pan
of the forum proceedings. No objections were raised.

Mr. Milnca addressed the Corum swine that the only meaDS of solvin& environmental deaaup
liability problems was through an open forum. He indicated that the Department of Ddensc
(DOD) bas pledged to comply with its environmental oblipticxls 1bc installation ratoratioa effort
is imponant. and as the DOD moves from the study phue, it recognizes that action mllll be tlkcD
to ensure site cleanup progresses smoothly. He emphasized that the DOD wants to &aish the
cleanup business. Mr. Milnes stated that his office wants to come to grips with the hazardous waste
site cleanup contract issue. Performance bonding is an issue; legislative fixes may be possible. but
be did not see this as a solution. He explained that if the DOD and the deanup industiJ do not


     •·
z.   The AvailAbility, Costs, and Limit.:uions or Commercial Insurance to Co'"r the Rlslu and
Potential Liabilities or DOD's En•ironment:al Contnctors

An insurance industry representative topic leader stated that insurance underwriters have problems
with insurin& projec:t.s which have an environmental risk. there arc inherent reuons: the lona
latency period of tollic exposure and the multiple potential causes of bodily or property harm
associated with environmental projecu. lhe insurers must establish premiums today Cor liabilities
which will occur ten or more years in the funue.

Although liability standards are provided in Section 11!1 ofCERCLA (dealin& with ~eppnce), 23
states have laws which are contrary to this section. Contractors may be required to shoulder more
liability than they deserve. New, emtic bodily injury theories are bein& applied. These inc:lude:
medical suiVCillanee (if an individual is exposed, he or she should be moaitored); immunolalieity
(ton& term nposure can break down the body's immunity malcin& people more susceptible to
diseases such as cancers); advance risk of future harm (aposure may iDcrease the possibility of
future bodily hann); and mental an&Uish (the fear of &ettin& a disease as .a result of exposure).
Once considered remote as reasons for winning a suit, these theories now make environmental work
in several states uninsurable.

Recently, the insurance industry has been involved in coverqe dispute c:ascs.. Policy holders/
insurers have asked the courts to look at contracts and determine if an environmental aspect cllists.
Even though the insurers have thought that a contract bas DO environmental a.spcet, courts bave
frequently decided dtat it did. PoUution ac:lusion clauses have not been upheld in coun. Since the
insurance industry does not have faith in drafting future policies, they are simply not insurin&
arc:hiteet~ngineers. There is a specialty market for insurance, but there are very few players, and
insurance is expensive.

Some A-Es are fonnin& risk retention groups. which is a fonn of self-insurance. Although this is
a potential solution, it does not appear to be working. It is apensive. Many companies do not
seem to be ready to insure the practices of their competitors.

 The topic leader was asked what type of c:ap the insurance industry felt would provide adequate
 coverage for environmental worlt. The topic leader indicated that he did not have a response to
 this action. An attendee indicated that the EPA currently has under review a SSOM c:ap on
 indemnification to the RACs. The topic leader was asked if there bad been any claim against a
 RAC. The answer was that he did not know of any; there is not a larce dairas history. This may
 result from the long latency period for tollic chemical claims. Oeanup efforts have been onaoing
 for a only few years; only SO sites have been cleaned up.

  The topic leader was asked if this was JOins to be a new market; -were pollution incidents insurable?
  The response was dtat as a result of changes to Superfund, specialty eoverage may occur. A
  question as to whether the federal aovernment would subsidize this type of insurance. brought the
· response of probably not. Is there a croup to step in and develop a marbt to seD this type of
  insurance? The answer was, not at this time; one of the problems is that insuranoe companies are
  paying on liabilities which they do not believe they insured.

 A RAC representative raised the point that there is DO parantee for professional liability
 insurance. The insurer may chose not to issue or renew t.he insurance. Insurers will not cover

                                                    4
Cor a cleanup in oenain states, and theref'ore may choose not to bid. They indicated dial in
performin& some worlt, they were staldn& the survivability of their corporation. When asked. the
RACI aplained that. in workina with the private ICClOr, the RAC ahara the risk with the clienL
lbia protectS the contractor. The point wu raised that the owner of a wute site OWIII the wute.
and the RAC is helpinc to clean it up. Theref'ore, die site owner must share 1 aood portioo ol the
risk.
The issue of strict liability was raised bf the RAC representatives. If anyone bas a COMecdon with
a hazardous waste site, they are liable. Proper behavior bas not ax:used liability.

When working Cor the Environmental Protectioll AacocY (EPA) on orphan lites, there is a paler
risk to the RAC The EPA indemni&a the RAC under Section 119 of the Comprebealive
Environmental Response, Compensalion, and Uability Al:t (CERQA). 'Ibis IDdemni&catioa only
covers negliaence and not strict liability. 'Ibe RAC must loot at the state laws when clecicfiD& to
accept a risk.

Another issue raised was that in some instances, a DOD activity required 1 RAC to si&n lw:udous
waste manifesu. This action places liability on the RAC Cor transponin& of wutes. If the RAC
had known it would be required to do this, it would not have bid on the job without iodcmnifica.
tion. A DOD representative indicated that. pnerally, the DOD sip the manifest as the aeoenror.
The RAC representatives indicated that even if the contractor does not liJD the manifest, but
arranges Cor tranSport. the contractor could be liable, a potentially responsible pany (PRP). Even ·
if the contractor doesn't arranae the transport. but is on site, it may be sued. The contracton
emphasized that defense cosu are a real-time cash 8ow problem and a real risk CYeD if the
contractOr is not involved or is innoccnL

The problems Cor the•RAC were summarized as f'oDows:

        a.    There is an inherent risk associated with doing enviroDIDental work. RAC. are dealing
        with anomalies which are inherently difficult to model.

        b.    There is an environmental risk of third    pany liability.
        c.    There is no incentive Cor innovation. Before iMovation win be empl~ by
        contractors. there musr be ao agreement between the client and the contractor, aod the
        beneficiary of the innovative practice is required to assume liability. IMovation is prohibitive
        in a regulatory atmosphere. There is pnerally no innovation in the U.S.

        d.    The ard!itect-engineers (A·Es) are bein& apected to accept the liabilities of ochen.
        Liability insurance is not available in the mark&L If it is &Yailable, it is oaly Cor the period
        of the job.

        e.     Requiremenu vary from state to swe. There is 1 bript spot for tbe RACI in that
        there is more 8czibility shown when dealin& with states than when dealin& with the Federal
        govemmenL Some states may c:banp the specifications on their cleanup projects to permit
        innovative technolo&Y. Mally see some states asswnin& the liability ofPRPs. State rqulaton
        are a pan of the Record of Decision (ROD), and this permits 8afbility in dealin& with the
        states.                         •

                                                     3
Surety bond companies normally underwrite constn~ction efforts. HOMYer, many of the contncu
for site cleanup arc dcsi111-build efforts with bondin& required lor both phascL The topic leader
stated. "Today's state of the an tecllnoloey is tomorrow's malpraclicc." Surety compaaica arc
reluctant to parantcc dcsil" tccllnoloey which is normally covered bJ profcasional errora and
omissions insurance policies (which. today, is probably not available to the· RAC for thcac risks)•

While disc:ussin& the ava~lability and cost of surety bonds, tbc topic leader indicated that the cost
of surety bonds has not incrcucd l'or hazardous waste site dcanup projeca. It is about one percent
of the construction cost. Initially. hazardous waste site deanup ooatr'ICIS were thoupt 10 be service
contracts; then they were required to be construction contrac:u. About two JUI'I.aF tbc surety
bond market started drying up. The availability of surety bonds ia a major iaue. Some &Yailable
bonds require 100 percent collateral. Some large constNc:tion companies arc sclf-bonq Siaec
the pa.ssa~ of Scctioll 119 to CERCLA. three to l'our compaaies baYC reentered the buardous
waste site bondin& raarkeL The market hu opened up slipdy, bat the uadcrwritera arc not
fighting for business. Only the major providcn arc comin& back iDto the bazardous wutc lite
cleanup bondin& arena. and they arc only bondinc work on National Priority llst (NPL) litca
(covered by Sec:tion 119 of CERa.A).

The topic leader indicated that the surety bond companies need tbc same liability protection u the
insurers. The more protection that they receive, tbc more surety companies will reenter the marlccL     ·.
Surety companies. u a rule, will not back i~tive enJineeriq (too much risk).

Aquestion was raised if any RAC surety bond company had been held to be a PRP?     The answer
-.ias no, but the industry was concerned because of New Jcney commoalaw interprcWioDL Some
waste site cleanups arc being bonded because they arc bein& considered u non-hazardous (due to
rilatively low risk). This raises the :lSUe of how hazardous is hazardous?

An Army representative indicated that they had received more t1w1 l'our qualified bidden on a
recent job. People arc apparently getting bonds. There is competition. The stage of not       ccttinc
responsible contractors bidding has not yet been reached. One of the RAC representatives
indicated that the project referred to by the Army may ha~ been a smaD projec:t. People will still
bid a SSM project. The break point comes l'or projects crcatcr t1w1 SlOM. where there may be
insufficient bondinl money left.

The topic leader indicated that the surety bond industry is seekinc clarification relief that such
bonds only cover performance in accordance with the specifications and the payment of bills;
bonding does not cover design. third party torts (bodily or property injury), or the performance of
designs. A few, new, acgressive companies arc issuing bonds l'or less than SSM; bow~r. some of
these companies may be backing off. Bonds being issued require bigh c:ollateral. Companies
cannot look at the l'orminl of subsidiaries 10 do bondinc to decrease the liability, due 10 the
requirements of remaining on the Department of tbe Treasury list of ~~Xeptable sureties for Federal
CODStNctiOn projects.

The topic leader asscned that the surety bond business is a very smaD portion of the iDsuraaec
market. In tbc past. it hu rendered a sraaJI. but reliable profit. Now it is a bic risk. The industry
is only issuinl bonds on a case-by-case policy and thea only to lone-term CUIIOmerL



                                                   6

  .-
L




    "prior acts". RACs are payinJ premiums but are not receivina Future c:overaac- The topic leader
    indicated that if states had neJiiaence statements similar to Section 119 of CER~ then
    insurance companies mipt become more interested in provilinJ such insurance. There are
    presently no maJic solutions.

    The topic leader wa.s a.slced the insurance industry's plan of actiaa. The response was that the
    insurance industry is "sluginJ out" solutions on a casc-by<asc basiL The industry hu not been
    able to agree on alternatives to the curTent situation. A formal definition of "pollution emusion"
    is a possibility. A Jenera! discussion on possible approaches (IOiutions) fol&o-d. A law similar
    to Price-Anderson which would be applicable to the IOiic waste cleanup iadustly wu mentioned
    as a potential solution. This solution would create three layers of protection iii the event of
    liability: the insurance layer, the owner/operator layer, and the pemment layer.

    3.        Near and l.ona Term EaYiroamear.l Restoration ContnetiDJ Stra,..cs.

    Eadl of the sct'licc representatives made a sbon prescatatioa 011 emironmental restoration
    contracting strateJies. Dcscn"bed were current efforts, current problems, and actions beinJ tabn
    to dean up identified hazardous waste sites.

    4.   Tbc Availability, Costs, and Umit.Dtions otCorporate Suretr Bonds to Cowr the Rlskl and
    Potential Liabilities of DOD's Ea'rironmeatal Contrac:ton.

    The topic leader from the insurance industry indicated that there were considerable problems with
    the issuance of corporate surety bonds. Contrac:tors must post a surety bond Cor Federal we :it
    under the Miller Act. AJ. this time, there are few bonds available lor work on hazardous waste lites.

    The topic leader descn"bed the problems of issuinJ bonds lor such tasks. Surety bonds are
    underwritten only to cover the performance of a contnctor and the payment of suppliers lor
    ex~nstruction work. They are written based on the quality of the contractor (ability to do JOOd wortc.
    quality of people on site, equipment, how well the ex~ntnctor has done on similar efforts, and the
    availability of ex~ntractor finances to ful611 the contrad requirements). Underwriters normally
    develop a long-standing relationship with the ex~ntraaor. Uability from third party Nits is not
    norTDally considered (this is normally CXIVercd by ex~mmeraal general liability insurance). Recently,
    however. surety bond issuers have come under attaclt ia the coun room because they are the only
    "deep pocket" remaining in a law suit (RACs are normally people rid1, but asset limited).

    There has been a lack of indemnification Cor surety bond issuers lor hazardous waste site worlc.
    Anyone involved in hazardous waste site work (including the surety bond underwriters who are only
    covering contraaor performance and supply payments) have been found to be liable. If the RAC
    defaults on such work, the surery principal would be required to bire a eompletiDJ c:oatrac:tor aacl,
    consequently, may be ex~nstrucd to have contracted for the removal of hazardous wute and
    subjected itself to liability.

    Another issue with hazardous waste site bondinJ is the bond terminatioa date. Normally, a bond
    is terTDinatcd when all work bas been satisfactorily accomplished on a project. Due the possibility
    of lona time periods associated with hazardous wute lite deanup ICtion (mchadiq the prospeet
    of having to reinitiate work), the bonding company may be required to pay daims lon& after work
    has been completed on a project.

                                                       s
         •·
the larger the number of contractors in\IOJved in a project, the sreater the dcsree of risk to any one
contractor. If their work is uninsurable (u it frequently is), the RACa could Jose their company
u the result of third party liability action. They userted that they have walked away from jobs
when they could not receive indemnification. They stated that the risks tbcy were concerned ~t
were those which they could not control Any work on an eiiYironraental site may end up with a.
Jaw suiL Only five percent of Jaw suits on environmental projects result in a judsment. but
contracton have to pay defense costs to defend aoo<1 work. lbc aru outside of neppncc (strict
liability) is of concern. The RAC representative dcelarcd that indemnification 1110uld not dlanp
the quality of their work.

The RAC representstives were asked. if aothina is done with reprd to iDdcmni&caiion for DOD
work. what is the probability of their doina 1110rk? The resp311SC - . they would do feasibility
studies but would probably not perform any remedial action work without iDdcmnific:alio 1bcy
stated. the only companies that the DOD 'WOUld be able to hire without iDdcmnific:ation 1110uld be
those with nothina to lose.

A question was raised reprdin& when indemnification is needed. The answer was. durinl deanup
and detailed design because these were the riskiest tasks. These efforts were less controDable.
During studies, the contr3ctor was further away from being !Wiled u a PRP.

One of the contractors summarized bis. thoughts. He indicated that eiiYironmcntal work: was
auemely risk)'. This was due to the application of the concept of strict, joiDt, and several liability.
It !WaS also due to the laclt of standards wbidl define ne&ligence; the bishJy litipous arena imlolving
environmental work; the current state of the an of environmental work; and the Ions latency
periods for hazardous/toxic material npomres (trying to defend oneself 10 to lS ,an later is
difficult). These risks arc currently funded by: iDsuranc:e (the insurance companies won't
participate); fees (not a practical idea because fees arc small, risks arc veat); and the net worth
of the service provider (about 20 per=nt of annual revenue). As a result, this work is becoming
unattractive, and, in the future, may be more unattractive. The followiDg recommendations were
made:

      a.       A uniform   s~ndard   of liability is needed. State laws must be preempted.

      b.    There should be a comparative standard for negligence instead of strict liability (if 70
      per=nt negligent, then 70 percent liable). This wu defined by another contractor as
      comparative responsibility. The pernment owns the land, put the wute there. and should
      bear a significant portion of the responsibility.

      c.       Liability should be capped to the profit of a job.

      d.       Statute of limitations should commence after completion of the work aDd nm for four
      years.

      e.    The DOD should reimburse the RAC for insuranoe costs or indemnify the RAC if
      insurance is unavailable.

       f.      Risk apportionment should be a pan of the contract nc&Ofiations.


                                                     8
5.   Further Discussion on lndustf7'1 Liability Concerns with Reprd to DOD EaYiroamental
Restoration Work and Potential Solutloaa to Addre11 These Concema.

A DOD representative led this topic to aenerate further discussion OD the key iuua and to aplo~e
potential solutions to these issues. The topic leader indicated that DOD was lookilla for solutions
that would result in JOOd (technical and timely) deanups of its hazardous waste sites, at a aood
price. and maintain a JOOd contractor base which earns a fair profit and ila.Yiable community. 1be
RAC representatives indicated that this would be possible if there was equitable risk slwin&
between the RAC. and the DOD.
                                                                                      .      .
It was suggested that valufo,-enJineeriDa dauses in contracts be utilized. Some coatni::ton iDdicated
that this effort doesn't work very well, due to lack of tiraelineu in the pemmeat's rapouc. 1bil
JKk of timeliness causes contracton to stop tJyin&. A DOD representative indicated that in
situations in which a tec:hnolo&Y il approved in the ROD, there il reluctaDoe ID coasidcr Vllue-
enpneering proposals because it may mean reopcnin& the ROD. AN~ repraeatative IDdic:atcd
that his serviQ: welcomes value-en&ineerina. The services indicated that whea tbcy become aware
of roadbloda, they would take action ID eliminate them.

A question was raised whether the RACs nonoaDy revalidated the remedial investiption/feasl'bility
study (RifFS) when contracted to perform remedial desicnlremcdial action (R.DiRA). The RAC.
agreed that they would revalidate the. data obtained by another contractor. The dcaree of
revalidation would depend upon the contractor who performed the RJJFS. Such revalidatioa could
cost up to 20 percent of the llDIRA effort.

The Navy's Comprehensive Lon& Term Environmental Actio11, Na~ (C E"N) contnet was
discussed. The llAC. were asked why they bid on these CODtracts sinQ: they did DOt know the
deanup effort involved. The RACs said that cost-plus (rather than lind fee) conmc:tiDJ of
CLEAN was a plus. They remarked that they would be better able to define the work and act a
good price to perfortn a full scope of each task. As long as the dcanup effort wu on the base, the
possibility of third pany liability was low. The doser to the site boundaries, the p-cater the rilk
associated with a project. Under CLEAN, each task is negotiated, and the contractor can evaluate
the risk for each task. Only one pen:ent of the projects in a CLEAN CXlntract are anticipated as
being a problem.

In a discussion of contracting strategies versus risk. the RAC representatives indicated that third
pany liability is independent of the contract type. They did not look at thed price contracts in the
environmental area because there are too many unknowns and too much time and effort is spent
in contract modifications. They wanted to be able to address. in the contract, the care to be talc:en
in determining the risk of the project.

"'be RAC representatives were asked, what pereentap of CODtracts are biJh risk? The reaponsc
was, that a large pereentaae of environmental effort requires third party liability and tbenmre, il
a high risk. One company representative indic:ated that bis compa!l)' will not perform any wort
without some form of indemnification. Defense costs for liability suits are the bia problem. There
is no method of predeterminin& how juries will apportion COltS.

The RAC representatives reiterated that they have the ability to aeaotiate risks for commerc:ial
projectS. That ability doe£ not currently exist in dealinJ with the DOD. 1bey also indicated that

                                                   7




                                                                .   '
The RAC representatives concluded this disc:ussion by statin1 that contracton arc responsible and
want to be held responsible for those actions over which they ha...: control. They do not, however,
want to be solely responsible for liabilities rcsultinl from a site deanup.

D.    MEUING ASSE$SMEN'[
CAPT Rispoli asked if all people who would malce decisions reprdin1 these !slues were
represented in this forum. Participants indicated that there we•e ao other lfOupl which should be
represented u a part of the foi'IUII. The foi'IUII participants felt. however, that followin& their
review of the proc:ccdinp and incorporation of their comments, the proceedinp ~d be provided
to select environmental aroups for commcnL

CAPT Rispoli indicated that the draft procudinp would be circulaced to SAME and the Oflice
of the Deputy Assistant Secretary of Defense (Environment) and thea be sent with aD submitted
papen to forum participants for comment prior to &aalizatioll. the forum aneadees qreed with
these procedures.

E.    MEUING PRQCEEDINGS
The draft proceedings of the meeting were provided to all attendees on 21 february 1991.
Comments were received from a US Azmy Corps ofEngineen representative, the NUS Corporation
representative. and from the American Insurance Association representatives. There comments
have been incorporated into the proceedinp.




                                                 10
The discussion continued with the RAC repreaentatives indicatin& that a ne&Jicenc:e standard emu
in CERClA and they want a similar 1- modification Cor state laws and the Resource Conser·
vation and Recovery At::t (RCRA). They do not desire strict liability 10 apply to them. 1be
overridin& issue is that the RACa are conc:emed that they must assume responsibility for wbat th~
did not initially cause. The responsibility should be adjudced 10 the people who put the waste ia
the land.

The DOD tope leader asked what the DOD could do to help the contractoR. There were four
areas of potential chanae; the law, which would be moa difficult to chaoae; the re&Wations (DOD
indicated that they would wort with the EPA 10 determine bow the rc&Wations mipt be dwlpd);
policy; and the FAR/contract (DOD indicated that they coulcl direc:tiJ impact these lut two areas
and achiCYe the qWckeSl results).                                                 ·

Indemnification of contractors is now addressed in Pub6c Law (P.L) u.aM aod FAR 52-228.7.
Under p .L 85-504, the contractor must identify the nature of the risk aod then the Contncan&
Officer must raise the issue to the service Secretary for authorization. To support iDdcmni&catioa
of contracton for environment risks would make each service's effort unique. lbc FAR dause is
based on radioactive material risks and =:ludes construction. A chance to the FAR appears 10
be appropriate, but it would have 10 be based on a chance in the law. DOD representatives
considered that such a chanse might be accomplished u a part of the Defense Reauthorization N:t.

The following potential solutions were identified Cor evaluation by DOD in response 10 the issuea
raised by the RAC representatives regarding their risks:

      a.   Qange the laws so that the RACa are =:Judcd u a PRP. This would resolve the
      Federal issue, but would not resolve the state issues.

      b.     Revise FAR 52-228.7 (and possibly FAR 28-311.2) which would extend the applicability
      of indemnification to contractor wort done as a pan of the Defense Environmental R.cscora·
      tion Program. This would make the Federal government the defendant and the contractor
      liable to the government. (This may require a 1- change to accomplish.)

      c.      limit the statute oflimitations for contractors on environmental dcanup projects (after
      the statute of limitations, the government assumes full liability) and limit the contractor's
      liability for a project (similar 10 the limit Cor oil spills cscablished in the 011 PoUution At::t of
      1990).

      d.     limit the contractor's liability 10 that resulting &om their ne&ligencc.

      c.    Negotiate the risks of a project with the contractor and. determine an equitable
      distn"bution of the risk between the contractor and the pcmmcnt u a part of the ODilti'Kt.

       f.   The DOD should specify standards of practice for a project 10 which the contractor
       must comply.

       g.    A procedure for worlcin& out changes u a reault of unknown conditions nccdl to be
       developed. Cost reimbursable contracting and incentive cost and schedulin& were sugestcd.


                                                     9
                                                                            .   '"V"   I
!   '
i   .

                                                     AIR FORCE
I   I
    !
    i        Col Peter Walsh, USAF
I   I
    I
             Chief, Environmental Quality Division

I
I
    I
    i
    I
             Headquanen United Slates Air Foree (HQ USAF/LEEV)
             Bolling Air Force Base
             Washinaton. DC 20332-5000
I   !        (202) 767-4178
             fu: (202) 767-3106
I   !        Col Jay Johnson. USAF

            9 Breez.clull Road
            Fon SaJoya. NY 11768                                                            ·(' . L . ~~:
                                                                                             i ,.
                                                                                                                 .;·,    ~


                                                                                             i
                                                                                             l'
                                                                                                            · -,         'r,i
            LtCol Michael Donnelly, USAF                                                     !    ' :
                                                                                                            ..
                                                                                                            '

                                                                                                       . ' '"
                                                                                                                  -~     •

                                                                                                                         ~
                                                                                                                  I      .!
            Olief. Environmental Law DivUion
            Office of The Judge Advocate General (HQ USAF/JACE)
            Bolling Air Force Base                                                                                '·
            Washinaton. DC 20332-5000
            (202) 767-4823
I   ,



I   !       LtCol Bradley Orton. USAF
    !
    !
                                                                                             '

                                                                                             I
            ContraCting S1aff Officer
            Operations Contractin& Division (SAF/AQCO)
.   '       The Pen1agon
            Washington, DC 20230-1000
. I         (703) 614-2289
    I       fu: (703) 69J.SS89
            Ms. Melissa Rider

    i       Contracting S1aff Officer                                                                             •.:o
'   '       Operations Contracting Division (SAF/AQCO)
    I
            The Pentagon
    i       Washington. DC 20230-1000
    I
        I
            (703) 614-2289
            fu: (703) 69J.SS89
                                                                                           .· i '·'
                                                                                           t :                    .,.

• i
    !                                                                                        1
                                                                                             I ..                ::r

    I




                                                                                                   '        d:

                                                         2        .Attadlment A
                                                                                                       ..       ~-~t.
                                                                                                                   .
                                                                                                                  i\.

        i
    I
i   I
.
    I
    I
II
               SOCIE"'Y OF AMERICAN MILrrAilY ENGINEERS
       EXECUTIVE ENVIRONMENTAL CONTRACI'S FORUM PARTICIPANTS

Captain James A. Rispoli, CEC, USN

Soc:iery of American Military Encineen
Vice President, Environmental Affain

Assistant Commander for Environment, Safety, and Health
Naval Facilities Encjneefin& Command                                            .   ..

200 Stovall Street
AJea.ndria. VA 22332-2.300
(i03) 325-0295
Fax: ((103} 325-0183

Mr. Russ Milnes, Co-Cbalnnan

Principal Depury to the Deputy Assistant Secretary of Defense (Environmmt)
Office of the Secretary of Defense
Washington. DC 20301-8000
(703) 695-7820
Fax: (703) 614-1521

                     DEPARTMENT OF DEFENSE PAltTICIPANTS
COL Laurent R. Hourde, USAF

Attorney, Environmental Llw
Office of General CoUDSel
Department of Defense
Pentagon
Washington. DC 20301
(703) 697-9136

Mr. Kevin Doxey

Director, Defense Environmental Restoration Program Division
Office of the Assistant Secretary of Defense (Environment)
Washington. DC 20301-8000
(i03) 325-2211
Fax: (703) 325-22.34

Mr. Matt Prasteln
Defense Environmental Restoration Division
Office of the Assistant Secretary of Defense (Environmmt)
Washington. DC 20301-8000
(703) 325-2211
Fax: (703) 325-22.34

                                              1                              Attachment A
                                                      r ,.

 Mr. Hal Snyder

 Environmental Restoration Division
 HQ US Army Corps of Enginee11                                                                 .
 ATIN: CEMP·R
 20 Massachusetts Avenue. NW
 Washinston. DC 20314-1000
 (202) S04-4Ir9
                                                             .I·'



                                        COAST GUARD
 CDR Richard Buddqhaaa, USCG                                                           '    ·'':



 Oajms LitiptioD DMsiOD                                                                     ..
 U.S. Coast Guard Headquarte11
 Washington. DC 20593.0001
 (202) 267-2245
                                                                              ..
                                                                             '
 Fu: (202) 267-4163                                                          :,   .,')1-''~·
                                                                                       .,     .
 Ms. Elaine Eder

Procurement Law Division
U.S. Coast Guard Headquane11
Washington. DC 20593.0001
(202) 267-1544
Fu: (202) 2674163

Mr. D&Yid Reese

Civil Engineering Division
US. Coast Guard Headquarters
Washington. DC 20593.0001
(202) 267-1907
Fu: (202) 2674163

                                          NAvY                    '   ~-


Mr. Bob Bo,er

Direaor, Conmcu Policy Division
Naval Fac:ilities Engineerin& Command
200 StoVall Street
Ala:andria, VA 22332-2300
(?03) 3~9121
Fu: (703) 3~169
                                                             •,




                                                                                  ··.-:'
                                                                                >::I
                                           4                               t· ; ,.rt
     Major Roy IC. Salomon, VSAE

 Environmental Pro&ram Manaaer
 Headquanen United States Air Force (USAFIIJ..£EV)
 Bollin& Air Force Base
 Wuhinaton. DC 20332·5000
 (202) 767..()276
 fu: (202) 767-3106

 Captain John Ahem, VSAF

Environmental Prop-am Manqer
Headquarters United States Air Force {USAFII.J.DV)
Bolling Air fora: Base
Washington, DC 20332-5000
(202) 767..()276
fu: (202) 767-3106




COL Robert L Keenan, VSA

Hcadquaners, Department of the Anny {DAEN-ZCE)
Pcncaeon. Room 1E687
Washington. DC 20310

LCOL Mas Todl. VSA

Deputy Chief Environmental
    Restoration Division
HQ US Army Corps of EnginccB
ATIN: CEMP-R
20 Massachusetts Avenue, NW
Washington. DC 20314-1000
(202) 272-0579
fu: (202) 504-4032

Mr. Jack Mahon

Office of Chief Counsel
HQ US Army Corps of Engineers
ATIN: CECCC
20 Massachusetts Avenue. NW
WuhinlfOn. DC 20314-1000
(202) 272-0021
fu: (202) 504-4123




                                         3           Attachment A
.·
Mr. Richard E. Feeler

Senior Vice President
Donohue II: Associates                                                   ·:·~   t·.l{j .
4738 North 40 Street                                                        : /. .:~-~·
Sheboypn. WS 53083                                               <;,!     4'i:•;~
(414) 4S8-8711
Fax: (414) 4S8-0S37

Mr. Brad S. FlcJey

Vice President, Administration
rr Corp.
23456 Hawthorne Blvd.
Torrance. CA 90SOS
(213) 791-2511                                                                  J·-k·:
Fax: (213) 791-2586                                                     . ,~··1 ~·1.1       ,!fo·
                                                                                t '"'
                                                                   .j   ·:~:: .• •t•:ii.ll-1
Mr. William C. Fry                                                          ~1·;


Managing Principal
Dewberry II: Davis                                                                  '.
8401 Arlington Blvd.
Fairf'D. VA 22031                                                               •   f       'tj!
(703) 849-0320                                                          .• I ,., .                  ~~   ..
Fax: (703) 849-0648

Mr. Larry P. Jaworski

Vice President
Metcal£ II: Eddy
3901 National Drive
BurtOnsville. MD 20866
(301) 622-6600
Fax: (301) 421-1418

Mr. Jim Kimble                                                                  t       t

American Insurance Association
1130 Connecticut Avenue
                                                                        ..• !.
Suite 1000
Washini'Oft, DC 20036
(202) 828-7100
Fax: (202) 293-1219

Mr. Paul B. MacRoberu

President
Black II: Veatch Waste Science and Tec:hnolol)' Corp.
Black II: Veatch Corporation
Kansas City, MO
(913) 338-6646
                                                             I ..               I •:·\·

                                               6        Atta~ent i/1(: ·.


                                                                           . I

                                                             I     i .,,jri
Mr. Bill Mahm

Anod~te   Counsel
Naval Faalities EnlinccrinJ Command
200 Stovall Street
Alcundria, VA 22332·2300
(703) 325-8.553
fu: (703) 325-1913

                            SAME CONTRActS FORUM STAFF

Mr. Ted Zapobeln:r
DirectOr, Environmental Restoration Division
Naval facilities EnJinccrina CoiDIIWid
200 Stovall Street
AJCDIIdria. VA 22332-2300
(703) 325-8176
fu: (703) 325~183

Ms. Susan Sanason

Director of federal MarkctinWWashinaton Operations
EBASCO Services lne.
2111 Wilson Blvd.. Suite 1000
Arlington, VA 22201
(703) 35g..g900
fu: (703) 522-1534

                         SAME CONTRACI'S FORUM SUPPORT

Mr. Joe Dobes

Director, Safety and Environmental
              Protection Division
Designers & Planners. 1ne.
2611 Jefferson Davis Hwy.
Arlington. VA 22202
(703) 418-3800
Fu: (703) 418-2251

         SAME ENVIltONMENTAL ADVISORY COMMrrl'EE PAltTICIPANTS

Mr. Brent BWer

Division Manager Cor Waste Manaacmcnt
           and federal ProlfiiDS
CH2M Hill
625 Herndon Parltwa:r
Herndon. VA 22070
(703) 471-1441
Fu: (703) 481-&JSO

  .·                                           5          Attac:hmcnt A
Mr. RichArd   J. Tosettl                                      -I
                                                               i
Vice President, Bechtel Environmental Inc.
Bechtel
SO Beale Street
San FranciSCO· CA 94119-3965
(~15) 768-1134
Fu: (~15) 768-9038

 Mr. William WarteD

 Contndin& Manqer
 Scone .t Webster
 245 summer Street
 Boston. MA 02107
 (611) 589-2156
 Fu:: (617) S89-S31S

  Dr. Mi~l Jt. Yates

 · Senior Vice President
  EBASCO
  160 Qlubb Avenue
  Lyndhunt. Nl 07011
  (201)~2
  Fu: (201) 460-5929




                                                                   I




                                                 AttachrDent A 1
                                             8




                                                                   -'
 Mr. Dou;la• C. MoorhoUJe

 Woodward Oydc Group
 600 Montaomery Street
 30th Floor
 San Franc:iJco, CA 94111
 (415) 434-1955
 fu: (415) 956-5929

 Mr. And~ P PaJab

Baker TSA Incorporated
Airport Office Park
Buildin1 3
420 Rouser Road
Qlraopolis, PA 15108
(412) 269-6000
Fu: (412) 269-6097

Ms. Lynn M. Schubert

Senior Counsel
American Insurance Association
1130 CGMec:ticut Avenue, NW
Suite 1000
Washington. DC 20036
(202) 828-7100
Fu: (202) 293-1219

Mr. Donald Senovich

Senior Vice President
Environmental Management Group
NUS Corporation
910 Copper Road (P.O. Box 6032)
Gaithersburg, MD 208n.{)%2
(301) 258-2598

Ms. Susan Thomas

Flour Daniel
3333 Michaelson Drive
Irvine. CA 92730
{714) 975-2610
fu: (714) 975-2260




 0




                                  7   Attachment A
                                                                         1130 Connec:l~ Avenue N.W.
                                                                         Suite1000
                                                                         WISNnglon, O.C. 20038
           AMERICAN INSURANCE ASSOCIATION                                C202I 1211-7100
                                                  LAW DEPARTMENT         C2Q2I ~1211 'AX




                                                   March 28, 1991

3oseph c. Oobes .
Director, Safety and Environmental Protection Division
Designers & Planners, Inc.
2611 3efferson Davis Highway, Suite 3000
Ar1in9ton, Vicginia 22202
                Re:   Minutes of the society of American Military
                      Engineers 3anuary Conference
Dear Mr. Dobes:
          Thank you for sending the draft minutes from the
3anuary 30-31, 1991 meeting of the Society of American Military
Engineers. I was pleased to attend and discuss the issue of
surety bonds for hazardous waste cleanup projects. As we
discussed on the phone recently, I have only a few comments on
the draft minutes, and you took care of the specific items while
we spoke.
          However, I also have a general comment which I wanted
you to have in writing for the record. As you may remember, I
was unable to stay for the entire program, and thus, missed the
creation of the recommendations and potential solutions contained
in the minutes. All of the recommendations and potential
solutions developed by the attendees of the conference are
excellent ideas. However, I was concerned that surety was not
specifically included in some of the comments.
          For example, recommendation •e• states that •The DOD
should reimburse the RAC for insurance costs or indemnify the RAC
if insurance is unavailable.• This is an instance where the
RAC's surety should specifically be included in the
recommendation. Just such a provision is part of the Superfund
amendment passed last year, and bas been essential to the
increase we have seen in the availability of surety bonds for
those contracts covered by that amendment. The ideas contained
in the recommendations should apply equally to the RAC and its
surety.
          The potential solutions also refer only to the
contractor, while applying the solutions to the surety as well
will be necessary to increase the sureties' ability to underwrite

 __
.,. R. O'HARE
 oeJiN                            A08ERT B.SNIBOAN
                                  o..:zOt·r·nro
                                                         JOSEPH W.IIAOWN. JR.
                                                         ..,.,.,._              -A08ERT E. VNJ!.Ef
Mr. Joseph c. Debes (cont'd)
March 28, 1991
Page 2
bonds tor these types ot projects. Thus, it is my recommendation
that the potential solutions be amended to read as tallows
(underlined portion is the proposed amendment):
          a. change the laws so that the RAcs ~
          their sureties are excluded as a PRP. This
          would resolve the Federal issue, but would
          not resolve the state issues.
          b. Revise FAR 52-228.7 (and possibly FAR 28-
          311.2) which would extend the applicability
          of indemnitication to contractor And surety
          work dene as a part of t.~e Defense
          Environmental Restoration Program. This
          would make the Federal government the
          defendant and the contractor or surety liable
          to the government.   (This may require a law
          change to accomplish.)
          c. Limit the statute of limitations tor
          contractors and their sureties on
          environmental cleanup projects (atter the
          statute of limitations, the government
          assumes tull liability) and limit the
          contractor's and surety's liability tor a
          project (similar to the limit tor oil spills
          established in the Oil Pollution Act of
          1990).
          d. Limit the contractor's and surety's
          liability to that resulting trom their
          negligence.
          e. Negotiate the risks of a project with the
          contractor and surety who takes over tor a
          cgnt;acto; and deter:ine an equitable
          distribution or the risk between the
          contractor or surety and the government as a
          part of the contract.
          f. The DOD should specify standards of
          practice for a project to which the
          contractor or surety must comply.
          g. A procedure tor working out changes as a
          result or unknown conditions needs to be
          developed. cost reimbursable contracting and
          incentive cost and scheduling were suggested.
     Mr. Joseph c. Oobes (cont'd)
     March 28, 1991
     Page 3
           These minor cbanqes in the recommendations and
 potential solutions would express the necessity ot protectinq the
 surety of a response action contractor to the same extent as the
 contractor. Without this equity, it is most likely that bonds
 will continue to be difficult to obtain tor all hazardous waste
 cleanup projects not covered by the Superfund amendment
 implemented last year.
            Thank you tor allowinq us to submit these follow-up
 comments. Please let me know it there is anythinq else which I
 c:an do to assist you in puttinq toqether the final version of the
 minutes.

                                          Very truly yours,
                                         c,   "'~· ~~         ;p~
                                          Lynn M. Schubert
                                          Senior Counsel

     LMS/lmsjjdltr.sam


 cc:      captain James A. Rispoli
          Ms. Susan Sarason
          craiq A. Berrinqton, Esquire
          Ms. Martha R. Hamby
          James L. Kimble, Esquire




•·
                                       APPENDIX2

                  Huarcloaa ud TOIIc w... (B1W) Coatndlnl Prabl
A   SCud7 ttllbe Coalnedaa Prablm• Related 1D SurelJ londl.. ID tile ll'nV Cleuap .........
r.Pf.i)
-~
US Army COI'p' or En1'ncc"
W•r Rnoun:n S.ppot1 Ccnwr
lnscicuw   r. w&lltf R,csoun;cs




              HAZARDOUS AND TOXIC WASTE (HTW)
                   CONTRACTING PROBLEMS


                                  A Study of the Contracting Problems
                                     Related to Surety Bonding in
                                      the HTW Cleanup Program




JULY 1990                                                       IWR REPORT 90-R-1
     • Uocla.. ified
~lluil&t''l' lLAnt~iZA 'li5N i5~ 'H~ 'Al:l
     -                                 REPORT DOCUMENTATION PAGE
                                                                                                                                 IOtm AppiOtt«<
                                                                                                                                 OMI No 01'04-0111
                                                                                                                                 l•P O.rt Jul'l JO. rta
lo REPORT SECURITY CL.&SSifiCATION                                                lb RESTRICTIVE MARKINGS
U• •assified
i.       .CUIIITY CL.&SSifiCA TION AUTHORITY                                      J DISTIIIIUTION I AVAII.AIILITY OF REPORT

Zb    OECL.&SSIFICA TION 1 DOWNGRADING SCHEDULE
                                                                                      Approved for public release;
                                                                                      unlimited
A. PERFORMING ORGANIZATION REPORT NUMBER($)                                       S. MONITORING ORGANIZATION REPORT NUMIER(S)

IVR Report 90-R-1
&.. NAME OF PERFORMING ORGANIZATION                    6b. OFFICE SYMIOL          7o. NAME Of MONITORING ORGANIZATION
                                                           (If .Wico/WI
USACE, Institute for Water
Resources                                               CEWRC-lWR
k. ADOIIESS (City, Store. ond ZIP Code)                                           7b. ADDRESS (City, Store. ond Zit' C-)
Casey Building
Telegraph & Leaf Roads
Ft. Belvoir, VA 22060-5586
Ia.   NAME OF FUNDING I SPONSORING                     lb. OFFICE SYMBOL          9. PROCUREMENT INSTRUMENT IDENTIFICATION NUMIER
      OIIGof.NIZATION USACE, Directorate                  (If opplico/W)
of Military Programs
1t. ADORESS (City, Stott. ond ZIP C-)                                             10. SOURCE Of FUNDING NUMBERS
Pulaski Building                                                                  PROGRAM            PROJECT         TASK               WORK UNIT
                                                                                  ELEMENT NO.        NO              NO                 ACCESSION NO
20 Massachusetts Avenue, NW
Washington, DC 20314-1000
II. TITLE (/ndudt Stcumy Ooaificonon)
Hazardous and Toxic Waste (HI WI Contracting Problems - A Study of the Contracting Problems
Related to Surety Bonding in the HT'ol Clean-up Program
12 PERSONAL AUTHOR($)
  f   rP, Francis, M.
~lo. TYPE OF REPORT
      final
                                       I'   Jb. TIME COVERED
                                            FROM               TO
                                                                                 I"   DATE OF REPORT (Yto<. Monlll, Ooy)
                                                                                              1990/April
                                                                                                                            rs   PAGE COUNT


16. SUPPLEMENTARY NOTATION



17.                    COSA Tf CODES                    18. SUBJECT TERMS (COIItinu* on rewtV il M<•sury •nd i&ntify by block numtt.rJ
         FIELD      GROUP         SUB-GROUP            Bonding, Miller Act, Service Contracts Act, Davis-Bacon
                                                       Act, CERCLA, FAR • HTW, Surety, Performance Bond

19. ABSTRACT (Conti,_ on ,..,.,.. if IWCtSWI')' ond identify by block numM<)

     This study attempts to determine the impact of performance bond availability on the
successful accomplishment of Hazardous & Toxic Waste (HTW) projects.




 20. ~TII18UTION I AVAIL."BIUTY OF A8STRACT                                       21 A8STRACT SECURITY CLASSIFICATION
       INClASSifiEOIVNLIMITEO   £I SAM£ AS RPT.                0    OTIC USERS
lz•      NAME OF RESPONSIBLE INDIVIDUAL                                           ;~b ~~LEPHON£ (lnci!IM A<oo Code) 22< OFFICE SYMBOL
     Francis M. Sharo                                                                 202   355-2369                   CEWRC-IWR-N
DO FORM 147), 14 MAR                             ll APR K•ttOn m•y be uMd unt:•l e•h•usted                 S£Cl:RITY CLASSIFI(A TION OF T"IS PAGE
                                                       All other ed•t•ons  •r•
                                                                          obsolete.
        HAZARDOUS AND TOXIC WASTE (HTW)
             CONTRACTING PROBLEMS


            A Study of the Contracting Problems
               Related to Surety Bonding in
                the HTW Cleanup Program




                         Prepared by

                U.S. Army Corps of Engineers
               Water Resources Support Center
                Institute for Water Resources
                        Casey Building
               Fort Belvoir, Virginia 22060-5586


                      Commissioned by
               Environmental Protection Agency
                             and
                U.S. Army Corps of Engineers
              Environmental Restoration Division




July 1990                                  .   IWR Report 90-R-1
•



                                    TABLE OF CONTENTS

                                                                              PACE

    I.     sUMMARY • •                                                           1

    u.     BACKGROUND                                                            5

           A.   BONDING PROBLEMS                                                 5

           1.   STUDY COAL: DETERMINE EXTENT OF THE BONDING PROBUK AND
                PllOPOSE SOUJTIONS                                               5

    Ill.   PllOILEK DEFINITION                                                   7

           A.   APPLICAJILE LAWS, REGULATIONS AND OTHER FACTORS                  7
                1. Killer Act Construction Contract Bonding Requirement         10
                2. The Service Contract Act                                     11
                3. Davis-lacon Act . • • • • • • •                              13
                4. Superfund Legislation • • • • •                              14
                5. Federal Acquisition Regulation                               16

           B.   HAZARDOUS AND TOXIC WASTE (Hnl) CONTRACTING PRACTICES           17

           C.   CORPS HT\l PROJECT DATA PRESENTATION, ANALYSIS AND FINDINGS     17
                1. Introduction . . . .                                         17
                2. Analysis and Findings . . • • • . . .                        18

           D.   HT\l INDUSTRY BONDING PROSLEKS PERCEPTIONS                      29
                1. Contracting Industry Perceptions                             29
                2. Surety Industry Bonding Perceptions                          33

    IV.    CONCLUSIONS • • . • •                                                37
               TRENDS OVER TIME                                                 37

    v.     OPTIONS EXAMINED                                                     45

           A.   INTRODUCTION                                                    45

           B.   NON-LEGISLATIVE CHANCES                                         46
                1. Improved Acquisition Planning & Bond Structuring             48
                2. Clarify Surety Liability                                     53
                3. Indemnification Guidelines                                   55
                4. eo-wdcation With the Induatry                                56
                5. Liait Risk Potential                                         57

           C.   LEGISLATIVE CHANGES • • •                                        58




                                            Hi
•

                              TABLE OF CONTENTS (Continued)
                                                                           PAGE

    VI.   RECOHKENDATIONS . . . • . .                                       61

          A.    NON-LEGISLATIVE CHANCES . . . . . . . . . . . . .            61
                1. Issue Guidance on Use of Acquisition Planning for HTW     61
                2. Clarify Surety Liability                                  62
                3. Inde.nification Guidelines                                62
                4. Co..unication with Industry                               62
                5. Liait Risk Potential                                      63

          11.   LEGISLATIVE CHANGES                                         63

          ENDNOTES                                                          65

          BIBLIOGRAPHY                                                       67

          APPENDICES
                Appendix A · List of Contacts                                71

                Appendix 8 · Sample Foras . .                                75




                                          iv
                                    LIST OF CHAllTS
                                                                             PACE
Chart lA • Average Ratio Award .... t./Covt. Eat. (by lid Opening
           Date) . . . . . . • . . • . . . . . . . . . . . . .               . 24

Chart 11 • Ratio Award .... t./Govt. Eat. Averaae Award
           (by Project Size)         . . . . . . . . . . . . . . . . . . . . . 24

Chart lC • Ratio Award .... t./Govt. Est. Averaae Award
           (by Re11edy Type)     . .   . . . .   . . . .                       24

Chart 2A • Average Ratio:    High/Low lids over Tt.e 1987·9                    25

Chart 21 • Average Ratio: High/Low lids over Tt.e 1987·9
           (by Project Size)     • . . . . . . . •                             25

Chart 2C • Ratio:   High/Low lids     (by   Re~~edy   Type)                    25

Chart 3A • Average Number of lids Over Time            ...                     26

Chart 31 • Average Number of Bids (by Contract Type)                           26

Chart 3C • Average Number of lids Received (by Re11edy Type)                   26

Chart 4   · Average Number of lids Received (by Award Allount)                 27

Chart 5   · Corps HTV Programs · Contractor's Dollar Shares 1987·9             28

Chart 6   • Contractor's Projects Shares 1987-9                                28

Chart 7   • Sureties' Dollar Shares 1987·1989                                  30

Chart 8   · Sureties' Project Shares 1987-1989                                 30



                                    LIST OF TABLES


Table 1 • Legislation Pertaining to HTW Contracting                             8

Table 2A· Corps HTW Contracts                                                  21
      21· Corps HTW Contracts                                                  22
      2C· Corps HTV Contracts                                                  23

Table 3 • Types of Options                                                     47

Tabla 4 • Sample Alternative Contract for Incineration                         50




                                            v
II
                                                                                     , I




           The intervlava elicited the perception& of the H"nl aurety, and cont-rac                                                                       '
     community ragardin& thair concarna about riaka in the H"nl C~ianup prograa
     Kany of theaa concern& are of potential riaka that are hypotheaized, but,~.~--~~
     not yet occurred.          However, theae rleu are· pe'rceived and ac{ed upon •a•. '


        'n.~ atudy      flndin&•, which centered on Corps executed projlcu;
     that the surety industry b             uking perforaance bonde           avaUab~o                            to c. a .r. ta:iii,
     the -jor flnu COIIpatin& for HTV vork.                      However, it appaau lthet in<·ill·                                 ui:J!;;{!'~f
     roluct~· over the potential liability associated vitb sue~ rork baa
     the induatry tO -Va toward llaiting bondin& to flras havin& other                                                        ,&UID'&IC'&r

     buaine.s with the aurety, or aajor financial a . .eta available!, ·and.
                                                                                           I,                             .             .
     of paat perforaance on H"nl project&.                  Tbia aurety industry reticence
     precluded ao. . finas fr011 being able to aecure needed                    bondi~~ and has a"''~'~'
                                                                                      '     ~   .~
                                                                                               II                     ; .,, ,' '    '
     lessened the opportunity for finu wishing to break lnto                       th~         Federallf,l'W ,
     aarketplace.       The resulting       conc~m        of both EPA and the Corpsli is that                                                        ,
     availaoillty not curtail qualified finu' ability to compete for HTV                                                                .
     to auch an extent that the prices for the remedial action work: 1a arbltr.ar;:~ii~F
     and   ex~essively        increased.                                                        1.

                                                                                                                                                          ' •.
                                                                                                    I·

           There 1a no single solution to remedy the probleas encowttered ln the                                                                     1
                                                                                                         I

     atudy.        Rather, there are a number of individual actions that' uy be
                                                                                                                                                         I·~
     inatlt~ted,       aome at a fairly lov institutional cost that wiU I help tO
     alleviate the situation.              The government should aitigate the concerns
                                                                                                         1!
                                                                                                                                        of           J~
                                                                                                                                                     ~~:,···
                          1
     contractors and the sureties while uintaining appropriate protection 'of
     government's interests.
                                                                                                         '                                                    r·
                                                                                                                                                              i
                                                                                                         I
           The· solution& to the cited problelll& in H"nl bondin& lnclude]l the                                                foll:oVi!iniil/!t~:ll:,>l:
                                .. __             .               . I,
         - bquir..ent f or zero ....ad acquhition plannin& involvina an
                                                                  .'
     interdiaciplinary teaa to develop plana that incorporate tac~iquea
               •                                                                           .                  I
     rhk analyah in atructurin& the project contractina plan.                             Arialyaia vUl .
                                                                                           ,j,
     include 1conaiderat i on o fth e extent o f riaka a . .lm&d b y the &Cf'anllient
     effect Potential project coat aavings, increased ca.petition for                                                                       ·
            I      f.       f1                    I   •           .II
     opportuldtiea or - r •    ru to co.pete in the H'IV progru. Plollcy


                                                             2                                                                                  ,.




                                                                                                    I             I
•




                                       I.   SUKKAilY


       The EPA and the U.S. Aray Corps of En&ineers (•Corps•) have experienced
    difficulties ln contracting Hazardou. and Toxic Vasta (HTV) cleanup projects.
    The HTV cleanup indu.try has expressed concern that it could not obtain surety
    bonds required as a prerequisite for competing for remedial action
    construction projects.    It vas reported that Treasury Depart.ent listed
    corporate sureties, which provide the ruarantee bonds for       Gove~nt   projects,
    bad t..posed strincent llaitations on the provlaion of perfonanc:a bonds vbich
    assure the govern.ent that the cleanup project vill be completed.
    Essentially, the bonds ruarantee that the surety vill either complete
    perforaance or pay the Govern.ent its costs associated vlth completing the
    project to the limit of the penal .-ount of the bond. Variou. contracting
    industry fir.~ stated that they have not been able to secure bonding for some
    projects. Tho .. that have obtained bonds had a difficult tt.e doing so, and
    some firms that had obtained bonds for previous projects vera unable to obtain
    bonds for a subsequent project.   The surety indu.try indicated its reluctance
    to guarantee performance on HTV projects prt.arily because of its        concern for
    possible long-term liability exposure and changing state-of-the-art design
    requirements associated vith such actions.

        The EPA and the Corps commissioned the Institute for Vater Resources to
    gather information on the subject; to analyze the data to determine the extent
    of the existing bonding problems; and to offer recommendations which could be
    t.plemented in an effort to alleviate problems noted.        A survey vas conducted
    of Corps district offices, the HTV cleanup industry, surety firms, and trade
    associations, to deter.ine the extent and nature of the problem.        A fev survey
    activities extended to EPA and state offices involved in HTW vork.


        The study examined 24 ongoing remedial action and co.pleted Corps HTV
    construction contracts.    Statistics vere gathered from actu.l Corps records on
    the contractors and sureties that participated in these contracts.        In
    addition, a sample of the universe of HTV contractors and sureties vas
    interviewed along with industry association representatives.        The responaes to
    these interviews appear later ln this paper.       They   -re analyzed to arrive at
    cooclusions coocernlng industry vlavs and perceptions of the surety problem.
                                  II •     BACKGROUND


A.   BONDING PROBLEMS
     rerforaance bonda are uaed in the conatruction ind... try to insure the
completion of conatruction projecte.          Theea bonda are aandated by the Miller
Act for all Federal     conatruct~on     projecte.     Vhile bonda are normally required
only for conatruction contracte; in eo.e inatancea, concern for aeauring
perforaance baa led to the induetry being required to auarantee             perfor~~&nce   on
work el...nta that are characterized prlaarily ae eervice rather than
conatruction.     In general, a 100' perfor.ance bond baa been required by the
Corp• on conetruction contract&.


     the Corp&, EPA, and the eta tel have been told by auretiea and HTV
contrecting firma about the inability of contractor• to obtain performance
bonding for HtV cleanup projecte.          Bond availability problema and contractor
c ncerna have increased over the past year. In ao1ae inatancee firms
 9
reaponding to Government HTV contract announcement& have not been able to
secure perforaance bonda.      So~ae   firas have alao reported that they will not
c~ete    for HtV   co~truetion   contracts because they know that they cannot
obtain the required aurery bonds.

     While the inability to eecure bonding aay occur in other types of
construction contracting and is not exclusive to the HTW field, the frequency
of non-bonding occurrences and the fact that they involve companies that are
of a eize and financial etature not normally concerned about such matters, is
 itself a cause for concern.     Even     ~re   diaconcerting is the fact that firms
which are   ~•t    experienced in accomplishing HTW work are in aome instances
being precluded      froa competing for auch work by their inability to aecure the
required bonds.

a.   STUDY GOAL:     DETEilMINE EXTENT OF THE IONDINC PROBLEM AND PROPOSE SOU1TIONS
     BPA'• Office of EIMrgency aJid       lle~aedial   lleaponae and the Corpe Directorate
 of Military Programa,    Environ~aental    lleatoration Diviaion, coamiaaioned a etudy
 to detenine the extent of the bonding problem and identify action vhich could
 be takan to alleviate bonding probleu noted.              the Inetltute for Vater

                                                s
vill be issued on the appropriate factors to be taken into conaideration in
acco.pliahin& this analysis •

    • Analysis of the option of dividina the project into vork ele..nts vith
an appropriate level of bondina in each .

    • Clarify the &overn.ent'a policy on inde.nification of contractors and
sureties •

    • To the extent of its authority, each &overnaent a1ency vill define its
specific reaponaibility for the risk aspect of the cleanup project Where
appropriate (e.,. accept reapon.iblllty for performance apeclflcatlona) .

    . Tbe 1overnaent vill specifically accept the responaibility for project
design vbere the performance apecificationa have been .. t.

    The thrust of thla study vas specifically centered on the bondina i ..ue.
While che stated problea of -.any of the respondents vu bondiDJ, the
underlyiDJ issue is the uncertainty about risk in seneral u it applies to the
HTV Cleanup prograa.   There is uncertainty by sureties and contractors
concernina risk and liability. Surety bonds for perforaance, liability
insurance and indemnification questions are closely related and difficult to
separate when dealina vith HTV risk questions.

    There are two categories of options available to address these solutions.
Firat, short tera steps can be taken internally by the Corps and EPA that
involve revising internal agency procedures to alleviate the contracting
probl-. Ch&DJes to &ove~nt·vide conatruction procur.-nt repletions,
a.g. stalldard bond foru, shcNld be pursued with the FAJl Council. Finally,
lonaer tara actlona c-td ba carried out Which concentrate on potential
le&islative revisions to the liability and indemnification provisions in the
 auperfuad statute.




                                        3
                             111. PROBLEM DEFINITION


     When aurety bonding problems are added to the hurdles that firms muat face
vhen competing for multi·•illion dollar projects, the number of firms meeting
all the construction contract requirements could be reduced even further.
Thia atudy attempts to determine the    i~act   of performance bond availability
on the aucceasful   acco~liahaent   of HTW projects. The survey of surety bonding
in the HTW prograa entails the exaaination of various institutional and
procedural factors involved in Superfund and related HTW cleanup contracting
progr....   While there vaa general consensus that the potential liability and
uncertainty surrounding auch llablllty vaa the root cause for the Halted
bonding available, it Ia not clear that thla vaa the only factor affecting
availability.   The surety industry'• vlllingneaa to provide bonding vas also
linked to its independent evaluation of a number of factors relating to an
Individual contractor's financial and performance history.      Construction firms
were not asked vhy they may not have bid for or obtained contracts.      Since
p~oprletary 1nforaatlon concerning the financial status of companies is not
readily available and companies were queried only about the problems they had
in obtaining surety bonds in the survey, and not about their financial status,
the study vas not able to establish that the liability issue vas the only
reason for sureties refusal to bond.


A.   APPLICABLE U.\IS, llECULATIONS AND OTHER FACTORS
     There are several laws and regulations that affect contract cleanup
activity in the HTW area. They are listed in the following table:




                                         7
Resources (IVR), a Corps research agency located at Fort Belvoir, VA, vas
aelected to do the study. The study vas initiated in lata Nove~er 1989.       IVR
conducted a aeries of personal and telephone interviews of HTV industry
contractor&, as vall as HTV industry associations.   In addition, personnel
fro• insurance and surety industry firaa, surety associations, states, EPA,
and the Corps vera interviewed about the issue. A listin& of the interviewees
appear• in Appendix A.

    The interviewees vera questioned regardin& difficulties experienced in the
HTV bondin& area. They vere also asked for their vievs on the nature and
aaanitude of any bondin& probleas and requested to provide su&&estions on
actions that could be taken to rectify the situation. IWR also gathered
references, such as seainar papers, letters of concern to various agencies,
testlaony before Conaress, government foras and regulations, and other
relevant docuaents. A body of background aaterial concerning the problem vas
assembled. The study also collected inforaation concernin& contracting for HTW
cleanup, in particular inforaation regardin& the difficulties in the
acquisition of surety bonds by contractors.




                                       6
j~tified      for aervice contracte.   HTW cleanup projecta aay contain actlvitlal
claoaified aa either conatructlon or aarvice.      According to CERCLA Section
9604, theae claaaificationa are aovarnad by daciaiona iaaued by the Department
of Labor (DOL). Theae decieiona will control the vage rate• applicable to the
particular activitiea; that i1 Davie-Bacon for conatruction activitiea and
Service Contract Act for aervlce activitlea. In aany caaea, it is impoaalble
to create an HTV contract compriaed totally of conatruction or non-
conatructlon activitlea. therefore 1101t Jn'V contracta are ..de up of a
c~inatlon       of theae activitiea.   Vhere conatructlon and aervice activitiea
are c~ined ln the .... contract, the procurin& agency generally vill treat
the contract aa bein& under either a aervice or conatruction contract baaed on
tbe claaalfication of the predominant vork.      A recent letter (31 Kay 90) froa
DOL   to   llcLoq, advlaea thlt conatruction Davia Bacon Vage llates JNBt be
included if there ia a "aubstantial" eaount of conatruction vork involved.
Contractin& officer• have varied in their deciaiona on bonding requirements
for contract• involving both claseificationa of vork. In some instances,
P.rfo~e bond requirement• vere applied only to the extent of the value of
the conatructlon vork; in othera the requirement vaa applied to the total
value of the conatruction and closely associated aervice vork. In these
latter cases, the decision vas usually criticized by contractors unable to
aecure bonding as being unduly restrictive of competition and unnecessary to
protect the Covernment'a performance interests. Moreover, where the CO
determines that the contract is principally aervice related, he may treat the
contract as a aervice contract and require no bonding.

    The Contracting Officer (CO) is responsible for the initial determination
of Whether a contract ahould be eervice or construction based on the CO's
underatandin& of the applicable rulin&s laaued by the DOL.       On   occasions, DOL
baa            a CO' a deciaion and baa caused the Coven.ent additional
      overtun~ad

espenae by requirin& the CO to include Davla-kcon Vage btu and, at times,
payin& additional vagu retroactively. The Corpa experienced one instance
Where a aervice contract claaaificetion aaaoclated vith excavation of HTW
contaainated aoil waa reveraed by DOL to a conatructlon claaeification
follovlD& contract co.pletion. Thb declaion reaulted in a aignlflcant
contract price increase in order to provide an equitable adjustment to the
contractor for the higher wage rete pa,...nta that bacl to be aade to vorkera on
                                           9
                               Table 1
          STATUTES AND Bf#ULATIONS Pf.BIAINING TO H1ll CONTRACTING
    ACT                        QESCBIPTIQN
Klller Act              Requires Federal agencies awarding construction
 Construction           contracts to utilize payment bonds to assure that
 Contract Bonding       the priae contractor pays his subcontractors and
 Requireaent            perforaance bonds to suarantee coapletion of vork in
                        accordance vith the contract specifications.

KcNamara·O'Hara         Defines the types of activity classified u service
 Service Contract       contracts for the purposes of Federal government
 Act (SCA)              procureaent.

Davls ·Bacon Act        Applies to all Federally funded construction projects.
 (DBA)                  Designates the Secretary of Labor as the sole
                        authority on the classification of vage rates for
                        construction projects.

Co..prehensive          CERCLA enacted to eliainate past contaaination caused
 Environmental Res-     by hazardous substances pollutants or contaminants
 ponse, Compensation    released into the environment. Authorizes EPA to
 and Liability Act      recover cleanup costs. SARA enacted to strengthen
 (CER.CLA), as aaen-    CERCLA and tighten cleanup target dates. Requires use
 ded by Superfund       Davis-Bacon vage rates for construction projects
 Amendments 6           funded under section 9604(C) of CER.CLA.
 Reauthorization Act
 (SARA)

 Federal Acquisition    Pursuant to the requireaents of Public Law 93-400
.Regulation (FAR)       as aaended by Public Lav 96-83: provides uniform
                        policies and procedures for contracting by Federal
                        executive agencies.

    The procedure for obtaining performance and payaent bonds froa individual
or corporate sureties for HTV cleanup contracts is inco..plete without
e:xaaining the background of the bonding requireaent.   The 1935 Miller Act
specified that all construction contracts by the Federal Covernaent would be
covered by perforaance and payaent bonds. The purpose of the performance bond
la to insure that the project ls co.pleted in the event that the original
contractor defaults.


    The requireaent for perforaance bonds varies vith each project and is
affected by the type of project being undertaken. A bond ls required by the
Killer Act on all fixed-price construction contracts over $25,000, but .ust be


                                         a
    Acceptable aurety aay be provided from a number of other aoureea in
addition to the -re fuUiar corporate and individual aurety bonds.        theae
other aoureaa are liated in the Federal Aequiaition Reculation (FAR) aa
including •united Statea bonds or notea•, •.. • certified or cashier'• cheek,
bank drafts, Poat Office .oney order, or eurreney•. 1 Corporate aurety bonds
are provided by surety firms that have been approved by the Treasury
DepartJHnt.   These firas cannot provide bonding beyond certain dollar limits
established by the Treasury. Individual surety providere are, as the nue
s..pliea, individual& vho pledge their perao-1 uaeta as cuarantee. the
corporate bond la the priaary suarantee utilized ln performance and payment
bonding of both HTV and non-HTII work.


    Over the past two year&, interest in the use of individual sureties
increased sharply as contractors anxloua to   eo~ete   for all Federal
construction projects, but unable to acquire a corporate aurety bonding
epamitiHnt, sought to aatiafy the Government'• bonding requirements from the
only aouree available. Iaporta auggest theae bonds were aade available at
aignifieantly higher coat. Unfortunately, the individual surety'a assets
available to aeeure the bond obligation all too frequently were insufficient
in value to cover the penal uount of the bonds. In each instance where the
contractor proposing the individual surety vas disqualified, due to the non·
responsibility of its proposed individual aurety, the CO aade an award to the
next higher bidder which in every ease provided a corporate surety bond. New
regulations instituted in February 1990 place -re stringent requirements on
the use of individual surety bonds.

    2.   the Seryiee Contract Act.   the KeNamara·O'Hara Service Contract Act
(41 USC 351-358) (SCA) covers all Federal govern.ent service contracts
exceeding $2,500, whose principal purpose is the furnishing of services to the
Federal govern.ent through the use of aervlce a~ployees. Sinee the teB
•service• ls - t aa explicitly def1ned within the SCA as the ten
•construction• is ln the   Davia-laeon Act (DBA), the DOL's   ~leaenting

reculations (29 CFR Part 4) are keyed to the teras •aervlee    ~loyees•    and
•principal purpoae.•




                                        11
the project.     The Corps of Engineers is very sensitive to avoiding disputes
with DOL arising from failure to use construction wage rates.       EPA is equally
concerned that the proper rate be used by the Corps.


    1.     Miller Ast Construstion Contract Bonding Reguiregents.    In order to
fully address the performance bonding requirement and its relationship to the
contracting industry, we .ust first examine the Miller Act.     The Miller Act
requires performance and payment bonds for any contract over $25,000 for the
•construction, alteration or repair of any public building or public work".
P&P bonds are required on all FFP construction contracts and/or delivery
orders over $25,000.     The percentage needed for performance bonds is flexible.
However, these bonds are not necessary for cost reimbursement contracts and/or
delivery orders. The level of bonding required is determined by the
Contracting Officer based on the level of risk associated with the project and
the resulting need to protect the Government's interest.     The performance bond
guarantees the Government that the building or work will be completed in
accordance with the terms and conditions of the contract or the Government
will be compensated.     The payment bond guarantees that subcontractors and
suppliers of the prime contractor will be paid for their work.      Performance
and payment bonds are usually issued by the same surety for a particular
project.     These bonds protect against contractor non-performance.   They are
not intended as insurance for contractor actions which may prompt third party
liability suits, or as a substitute for pollution or any other type of
insurance.     A third bond, generally required by agency or acquisition
regulations where the contract solicitation is a formally advertised sealed
bid, is the bid bond.     The bid bond protects the Government by providing a
penal amount that will be forfeited by the surety of the lowest responsible
bidder if the bidder falls to accept the award or to provide the required
performance and payment bonds after award has been made.     Bid bonds generally
are provided by the same surety that provides the performance and payment
bonds for a particular contract.     The surety's decision to issue the bonds
appears to be controlled by the contractors bonding capacity and its analysis
of the risk associated with each particular contract.     Hence, it would seem
that difficulties reported in contractors' ability to acquire bid bonds are in
fact directly connected to the same factors causing those contractors
inability to acquire perforaance bonds.

                                         10
         c. The conatruction work ia phyaically or functionally aeparata and ia
capable of being parfor.ed on a aegreceted baaia     fr~   the other work required
by the contract.

    3.   payia-lacon Aet.   The Davia·lacon Act (40 USC 276) (DBA) covers all
Federally funded or Federally aaaiated contract• in exceaa of $2,000 for
•conatruction, alteration or repair of public building• or public works.• 2
The Secretary of Labor'a authority to rule on questiona of statutory coverace
under DBA ia derived   fr~ ~eorcanization    flan Mo. 14 of 1950 (5 USC App. USC
p. 1050 (1982).

       a. Applicability deterainationa iuued by the Secretary' a deaicnate,
the Adainiatrator of the Vace and Hour Division, is binding rather than
advlaory in nature.    Thus, when the DOL decides that the contracting agency
aade an erroneous determination not to incorporate the DB.A provbiona in a
covered contract, the agency .uat either .odify the contract to incorporate
the required wage decision and proviaiona or terainate the contract (29 CFR
1.6).

    In their determinations of DB.A applicability relating to H1V work, the DOL
relies on the regulatory definitions set forth at 29 CFR, Part 5. Thus, the
atatutory teras •construction. alteration or repair• refer to: • ... all types
of work done on a particular building or work at the site thereof, including
without liaitation, altering. reaodeling, installation (if appropriate) on the
site of the work of iteas fabricated off-site, painting and decorating, the
transportin& of aaterials and supplies to or froa the building or work and
hauling aoil to an incinerator by the eaployees of the construction contractor
or subcontractor .••. • DOL has defined •auilding• or •work" as follows: •
construction activity as diatinguiahed fro• aanufacturing. furnishing of
aateriala, or aervicea and aaintenanee work. The teras include without
llaitation, buildinga, structures and laproveaenta of all types, auch as ...
excavating, clearin& and landscaping.• DOL, in ita review of one
auviroa.entel reatoration project, baa indicated that the tera "landscaping•
includes activitlea such aa plantln& treea, lawn. and ahruba in conjunction
with other vorlt, but also elaborate landacaplng actlvltlea auch u aubstantial
earth 80Vlng and/or rearrangeMnt of the terralo.        DOL edvbed further that

                                        13
'
!
        Inas.uch as the scope of possible service contracts is exten8ive, section
    7 of the Act liata specific contracts outside the Act. Included amon& these
    exeaptions are contracts for •construction, alteration and/or repair,
    includin& paintin&, or decoratin& of public buildin&s or public works.•    While
    DOL's regulations (29 CFR 4.130) contain a number of illustrative service
    contracts, none of those listed relate specifically to environmental
    restoration (HTV) projects.

        The prinelpal purpgse eaphaaia is key inasauch as a contract aay be
    principally for services, but aay at the saae tiae involve aore than
    lnsidcntal eonstrystion.


        Exlstin& DOL regulations do not define incidental construction.     Guidance
    on this issue, however, aay be derived fro• advisory aemoranda issued by the
    DOL's vase and hour adainistration relatin& to construction projects comprised
    of different cateaoriea or schedules (buildina, heavy, hi&hway and
    residential). As a aeneral rule, DOL advises contractin& officers to
    incorporate a separate schedule when such work is more than incidental to the
    overall or predoainant schedule. •Incidental• is here defined as less than
    20t of the overall project cost. DOL notes that 20t is a rou&h guide,
    inas.uch aa iteaa of work of a different cateaory may be sufficiently
    substantial to warrant separate schedules even thou&h these items of work do
    not specifically aaount to 20t of the total project cost.     This same rationale
    aay apply to contracts involving services and construction.

         under such circua.tancea, both the SCA and the Davis-&acon Act (see below)
     aay apply.   lD this re&ard FAR 22.402(b)(l) prescribes that the D&A will apply
     when:
             a. tbe CODStruction ia to be performed on a public building or work.

             b. Tbe coatract contains specific requireaents for a substantial
     amount of construction vork exceedin& the aonetary threshold for application
     of the DIA. Tbe ten substantial defines the type and quantity of the
     construed- vork and aot -rely tbe total value of the construction vork as
     cCMiPU•cl with tbe total c-tract value.


                                            12
lav vaa enacted to eli•inate the contamination created by the indiacriainate
diapoaal of organic and inorganic cheaicala and other pollutanta. The Act
alao allova EPA to force potentially reaponeible partiea (PlPa) to perfor. the
remediation or recover cleanup costa froa the PlPa.


    SARA (Superfund   ~e~nta   and Reauthorization Act of 1986) (P.L. 99·499)
vaa enacted to re-authorize and atrengthen the CERCLA.    It vas perceived at
the time that cleanup activity vu not proceeding quickly enough. SARA,
therefore, aet targeta for beginning cleanup work. EPA vaa required to begin
cleanup activities at 175 aitea by October 1989 and an additional 200 sites by
October 1991. CERCLA, as -nded by SARA, apeciflaa the bade cuidellnea for
Superfund liability. Strict and joint and aeveral liability are the
foundations of both the 1980 and the 1986 Acta. These liability concepta are a
powerful tool that can be used by the govern!Hnt to pr...ote voluntary PlP
response actions and to recover cleanup coats froa any party found aa having
contributed to the conta.ination.


    Strict liability ia liability without fault. Thus, even if the firm is
not negligent, the fir. ..y be liable. The basis of joint and several
liability involves the concept that, even if the firm is only responsible for
a portion.of the contamination, the firm aay be held liable for all costs
expended in the cleanup effort.


    Recognizing that the atrict and joint and several liability standard of
CERCLA aigbt prove onerous to remedial action contractors that are needed for
cleanup efforts, Congress specifically excluded response action contractors
froo liability under Federal laws except for cases involving negligence.
Groos negligence or willful wrongdoing are not covered.    Furthermore, in
aection 119 of SARA, Congress authorized indeanification for remedial action
contractor negligent liability associated vitb releasee of hazardous
aUbstaneea. lndeanification for atrict liability Where lt exists at state
level la not authorized.   There la no apecific reference in either CERCLA or
SARA on the availability of Section 119 indeanlfication to surety cuarantors
on Superfund projecta. However, EPA baa, at least in one instance, indicated
that lt would ..U. indeanlflcation available to a surety following a

                                       15
these activities standin& alone ..y be properly characterized as construction,
alteration or repair of a public work.


    Section 9604(G) of CERCLA also specifically stipulates the vage rates to
be paid on Response Action Construction projects are to be as determined by
the Secretary of Labor in accordance vith the Davia·lacon Act as follows:


         •sect. 9604(&)(1) All laborers and ..chanica e~loyed by contractors
         or subcontractors in the performance of construction, repair, or
         alteration vork funded in whole or in part under this section shall be
         paid wages at rates not less than those prevailing on projects of a
         character slaUar in the locality as deterained by the Secretary of
         Labor in accordance vith the Davis-lacon Act. The President shall not
         approve any such funding without first obtaining adequate assurance
         that required labor standard& vill be aaintained upon the construction
         vork.
            (2)The Secretary of Labor shall have, vith respect to the labor
         standards specified in paragraph (1), the authority and functions set
         forth in Reorganization Plan Numbered 14 of 19~0 (15 F.R. 3176; 64
         Stat. 1267) and section 276c of title 40 of the United States Code.•


        b. The essential point of the foregoing discussion of the Service
Contract and Davis-Bacon Acta is that although the public policy objective
(labor standard protection) of the statutes are similar, there are significant
differences between the two which affect the cost of doing business. Clearly.
the DOL's authority to require contracting agencies to retroactively modify
contracts to add one set of vage rate provisions and/or delete another. will
have consequences for project costs.    In view of DOL's authority to issue
deterainations as to vbat comprises "construction" for purposes of the DRA,
there aay also be consequences for the coverage and extent of the bonds
required under the Killer Act.

    4.   SuperfWJd Statute.   InasiiUCh as considerable concern vas expressed by
the surety industry re&arding ita potential for liability arising from bonding
of HTV projects, a brief discussion of the superfund statute is included in
this section.   The eo.prehensive Environaental Response, Compensation and
Liability Act of 1980 (P.L. 96-510)(CElCLA), commonly referred to as the
Superfund lav, authorized $1.6 billion to clean up abandoned   d~    sites. The


                                        14
nee~      are eatabliahed, and include• the de1cription of requirement• to 1etiafy
                                                                                      -   '

agency     nee~.   aolicitation and &election of aource1, avard of contracts,
contract financina, contract perforaance, contract admini•tration, and those
technical and ..nagement functions directly related to the process of
fulfillin& agency needs by contract.

1.   HAZARDOUS AND TOXIC VAST! (HTV) CONTRACTIIIC PRACTICES
     The Corp• contract& with      induatry for conatruction and other aervices,
a.g., architect·encineer aervlcea, reaearch and development aervic .. , and
auppll ...

     The decialon on whether to uae a fira filled price (FFP) contract, coat
pluo award fee (CPAF), coat plua fixed fee (CPFF), or a combination of fixed
prlce and coat depends on whether coatplete apeciflcations can be provided in
the aolicitation.      Other factor• detenainln& the decision are the aize of the
project, incremental fundin&, urgency, and the type of design required for
wle-ntation.

     Prior to iasuinc a delivery order against an indefinite delivery type,
uabrella contract (Pre·Placed Re. . dial Action (PPRA) or Rapid Response (RR))
or requeating a proposal from a contractor, a vritten determination must be
-de deacribing the type of project (aervice, construction, or both) and the
type of delivery order to be issued (FFP, CPAF, CPFF, or mixed).


C.   CORPS H'N PROJECT DATA PRESENTATION, ANALYSIS AND FINDINGS
     1.     In;ro4uction.   The study analyzed data relative to the Corps HTW
contracting experience for Superfund projects.        The prime offices responsible
for HTV contracting within the Corp• are the Oaaha and Kansas City Districts.
Contractin& recorda froa theae diatricta for the years 1987 through 1990 were
uaellbled and exaained.      The Tables and    ~rta   on the foll-in& pages
~rize         lnforaation on the 24 Superfund contract• carried out in the 1987-89
time period.       A • - r y of the charta b    ahovn balov.




                                           17
performance default on the aaae baaia aa aueh inde.nifieation would be offered
to any remedial action contractor provided the aurety aaaumea auhatantially
the same role as the original contractor.     so.. corporate auretiea point to
thia liability potential as the basia for their refuaal or reluctance to
actively provide bonding for HtV vork.    These auretiea urge that it be made
clear that the aurety performance bond ia a JU&rantee of performance only and
in no vay la intended to aerve aa inaurance for potentlal third party
liability auita.   Llkevise, they urge that the application of the Section 119
indemnification to the corporate aurety involved in a HTV project be
elarifled.


    5. federal Acquisition Regulation. HTV contract&, like other Federal
government procurement procedures, are controlled by the Federal Acquisition
Resulation (FAR). The Federal Acquiaition Resulation provides uniform
policies and procedures for all Federal executive agencies. These policies
and procedures define construction and other government procurement
activities. In addition, they specifically define contracting instruments
such as performance and payment bonds (see Appendix 1). The development of
the FAR is in accordance vith the requirements of the Office of Federal
Procurement Polley Act of 1974 (Pub. L. 93-400) as amended by Pub. L. 96-83
and OFPP Polley Letter BS-1, Federal Acquisition Resulatlon System, dated
August 18, 198S. The FAR is prepared, lasued, and aaintalned, and the FAR
system is prescribed jointly by the Secretary of Defense, the Administrator of
General Services Administration (GSA) and the Administrator of the National
Aeronautics and Space Administration (NASA).     These agency heads rely on the
coordinated action of tvo councils, the Defense Acquisition Resulatory Council
(DAR Council) and the Civilian Agency Acquisition Council (CAA Council) to
perform thia function. Agency heads are authorized to independently iasue
agency aequiaition regulations provided aueh regulation& implement or
supple..nt the FAR.


    ly definition, the ter. •acquisition• refera to acquiring by contract vith
appropriated funds supplies or service& (including eonatruetion) by and for
the uae of the Federal goven.ent through purchaae or lease -- whether the
aervicea or auppliea are already in exiatenee or .uat be created or developed,
de-natrated, and evaluated. ·Acqulaltlon begina at the point vhen agency

                                         16
                                                                                      •

while the vaate containaent, innovative technolo&Y project& and alternative
vater aupply product& have hish·lov bid ratio& of around 1.2.      Thia
info~tion    alao vould aupport the caae for leaa co.petition in the bidding
for HTV project& throu&h ti...


        c.   lidding Cgmpetition Climate.     To deteraine if the bonding issues
bad contributed to any reduction in the competition for HTW projects, the bids
for the 24 projecta conducted by the Corps in the 1987 throu&h 1989 period
vera ex. .ined.   The nuaber of bids vaa reduced froa 6.2 on the average in
early 1987 to 4.6 in late 1989 aa ahovn in chart 3A.      The number of bids also
tended to leaaen aoaevhat as the aize of the project increased.      This is
illustrated in chart 31.    The latter pheno..na ia also experienced on all
large construction projects.     Chart 3C ahovs that the type of project also
influences the number of bids received.       Vaste containment projects received
the aoat bids--seven on the average--followed by alternative vater supply and
aoil and vaste vater treatment projects.       The least number of bids vas
received by the innovative technology projects.      These projects received an
average of only two bids.    The data does not aupport a finding of significant
cause and effect of bonding problems on the bidding for cleanup projects, but
it does indicate a trend toward fever bids for HTV projects.


    The state lead EPA HTW projects have experienced similar problems in
performance bonding as the Corps districts.       The Texas Water Commission issued
a aecond invitation for bids on a project due to limited competition and
excessively high bids.     The first attempt vas unsuccessful due to the
inability of four of the five contractors to obtain bonds and the final bid
beJng excessively high. The EPA reco...nded contractual changes in the second
atteopt, and these changes resulted in a successful outcome with a contract
being awarded at a substantial reduction in contract price. The changes
recommended by EPA vere as follows:


  All-ing the uae of an irrevocable letter of credit or a conventional bond
   in lieu of a performance bond.

  Reduction in the aecurity aaount of the perforaanc:e bond.


                                         19
•



                     lid Information      Bid Open    Project    Project
                                          Date        She        Date
                     Avard Allount/
                     Gov. Estiaate        1A          11         lC
                     Hi&}\ Bid/
                     Low Bid              2A          2B         2C
                     llwaber of Bids      3A          3B         3C


        2.   Analysis   and   Flodin&•·
             a.    Ratio of Avard Priee to Goverpment Estlgate.       Chart 1A illustrates
    the trend in the ratio of award price to the government estiute over the
    study period from 1987 to 1989.        The ratio of award amount to government
    estimate rose from .8 to 1.2.         In addition, the ratio of award amount to
    government estimate tended to increase with the size of the project, as shown
    in chart lB.     The type of remedy that vas utilized also affected the
    award/estimate ratio.      Avard ratios of 1.3 were observed for the waste
    containment projects, on the average, as opposed to .85 on the other extreme
    for alternative water supply projects as displayed in chart lC.          The remainder
    of the projects were around the 1.0 area.         The conclusion drawn from this
    information is that there is a tendency for large projects to run at a higher
    ratio of award/estimate and through time.         This tends to lend credence to the
    fact that there is a tight.aarket for HTW contracts.


             b.    High to Lpv Bid &atio.      An analysis of the contract data indicated
    that out of the 24 projects four contracts involved situations where the
    initial bid winner vas not awarded the bid due to inability to secure bonding.
    These four contracts totaled about $31 aillion.         $3.9 aillion additional costs
    were incurred because of the necessity to utlllze the next lowest bidder.
    This vas an average of a 14t increase in costa for the four contracts.            The
    ratio of hi&h bids to low bids baa been found to drop froa around 2 to 1 in
    1987 to 1.3 to 1 in 1989 as il1u.trated in chart 2A.         The range of bids also
    tends to decrease with the size of the project.         Chart 211 shows this tendency.
    The bi&h-lov bid ratio also varies by the type of project.          The collection and
    disposal of waste products baa a large variation in the ratio of the bids

                                                 18
                                                                                        •
                                   TABIZ 2A

                             CORPS lml CONTRACTS
                     RICH liDS COMPARED WITH LOW liDS
                     -------------------------------
                                $1,000,000•

liD                                           REK.EDY TYPE     RICH       LOW HI liD/
DATE         ST   noJICT RAKE                 TYPE    CONTRACT liD        liD LOW liD
---- PA Lact.vanna lafuaa
 6/04/87 -- -------·········-----------------------------------------------·
                                               CAIn       40.0   15.9   2.S
  3/23/88   MA Nyanza Chaaical Waate Dump      CA    In           14.5     8.3    1.7
  S/17/88   MA Charla• Caoraa Landfill         CA    In           23.3    13.8    1.7
  6/07/88   lU Lana Property                   CD    IFI           4.7     2.7    1.7
  6/07/88   MJ Kata1tac Aeroayataaa            CD    In            7.S     2.4    3.1
  1/02/88   OR Mev L,.e Landfill               CA    In           u.s     13.7    1.4
10/06/88    PA lruia Laaooa                    CA    In            9.4     4.0    2.4
10/12/88    PA Heleva Landfill                 CA    In            7.1     s.o    1.6
10/18/88    1N Lake Sandy Jo                   CD    In            3.9     2.4    1.6
11/16/88    MJ loa Creak Fara                  TV    U'P          14.4    13.9    1.0
12/06/88    CA Del Morte Peaticide Storage     TV    In            2.0     1.2    1.7
  2/02/89   lU lridaeport Rental/Oil Svca.     TV    In           8s.o    S2.S    1.6
  3/28/89   lU Caldwell Truck Co.              AS    In            0.3     0.2    1.5
  6/22/89   NH Lipari Landfill on-aite         TV    In           28.0    16.0    1.8
 '7/ll/89   KD Kane & Lollberd St. Drums       CA    In            5.4     5.4    1.0
  7/24/89   NY Wide leach Development          IT    U'P          17.4    15.6    1.1
  8/01/89   KS Cherokee County Storaae Tanks   AS    In            0.7     0.6    1.2
  8/01/89   DE Delaware Sand/Gravel Landfill   CA    IFI           2.4     1.5    1.6
  8/02/89   RI Weatera Sand & Gravel           AS    In            1.2     0.9    1.3
  8/23/89   MA laird & McGuire                 TV    IFI          13.5    ll. 3   1.2
  8/31/89   MJ Montclair W orange Sites        GV    In            0.4     0.2    2.0
  9/06/89   KD S.Md.Vood Treating              co    IFII          3.4     2.6    1.3
  9/19/89   NJ Helen Kramer Landfill           TV    In           73.0    35.9    2.0
  9/19/89   PA Moyer• Landfill                 CA    IFI          33.9    28.5    1.2
                                                         TOTAL:   410.6   254.5   1.6


KEY: REMEDY TYPE
.............................
TV- Treac.ent of vaatea (aoil and water)
CA- RCIA Cap
co- Collection and dlapoaal of vaates
IT- Innovative technoloaies
AS- Alternative water aupply
cv- Gu ventlD&
co- Containaent of vutes
IFB- Iuvitatlon for bldl
aFP- Requeata for proposals


                                                    21
•


     Deletion of the handling of hazardous aaterial in the first phase of the
      project and ahifting it to the aecond phase and deletion of a test burn of
      contaainated aoil, thus re.oving the auretiea' objections to bonding the
      flrat phaae.
     The writing of aeparate bond agree..nts for the tvo project phasea and the
       preciae definition of vhat liability ia covered by the perfor.ance bond
       and the ti.. limits of liability.
     tleducing the dollar cap on the retainage for the la.e phue of the project
        from $6 aillion to $2 aillion and reducing the time the retainage is held
        from 60 to 18 -ntha.
     Giving the aurety the ri&ht to chooae the option of whether to complete the
       project or forfeit the bond if the contractor defaulta on the performance
       bond.
     Providing the require..nts for the aurety to obtain indemnification in case
       of contractor default and the surety assuaing project completion.


           d.   Distribution of   HTY   contracts.   There is considerable variation in
    the distribution of contracts among HtV contractors. In the Kansas City
    Diatrict, about 400 firas are on the biddera' aailing liat for all
    conatruction, including HtV contracts. In 1987 through January 1990, 24
    contractor• competed in the HTW prograa, and 14 received contracts. According
    to Corps District personnel, the same few companies continually appear in the
    final bidders' lists for HTV contracts.

       Charts S and 6 list the contractors that have worked on Corps HTV
    construction projects and their aarket share of the total competed Corps HTV
    outlay or activity. Five contractors, individually or in partnerships, have
    received 78' of the HtV contract dollars (Chart 5).       Five of the 14 firms
    obtained about 58' of all the projects (Chart 6).       The firms receiving awards
    are, for the -•t part, large firas with experience in waste handling in
    general. They are not the only firaa with the qualifications and credentials
    to do the work, nor are they the only firaa that have expreaaed interest in
    the hazardous and toxic vesta projects. There are aany contractora interested
    in participating in these projecta. There appeara to be legitt.&te concern
    that contracting illpediaents, such as bonding, aight leaaen further the
    Covernaent'a ability to expand contractor participation.       Contracting
    iapediaenta auat be carefully considered as to their relative significance.



                                               20
                                                                                                   •
                                           TAILE 2C
                                      CORPS HTV COIITRACTS
                           PAilTICIPATl!IC CONTltACTOllS AlfD SUUTYS
                           ···············-···················-~


liD
           ST
                .......... -----.----.------ .. -... -- CO!ITllACTOil -·.-.- .... ----.- ...
DATE              Pli.OJECT !lAKE                                            SURETY !lAKE
                                                        ........ -.-.
 6/04/17   PA Lack.availna hfu..                        Chea Wuta            Fedaral lN.
 3/23/11   MA Nyanza Cbeaical Waate Duap                TrieU                Seabd St Paul Kaine
 5/17/18   MA Cbarlea C.or&• Landfill                   Trlcll               Seabd St Pau~ Kaine
 6/07/11   NJ LaD& Property                             Sevenaon             Wauaau
 6/07/11   NJ Kataltec Aaroayata..                      Seveuon              Vauaau
 1/02/11   OH !lev Lyaa Landfill                        Sevaoaoo             Vauaau
10/06/11   PA lrulll l.a&OOII                           C.oCon               UA
10/12/11   PA Halava Landfill                           Qlea Vuta            Fedaral lN.
10/11/11   Dl Lake Sanely Jo                            We atOll             nona, eacrov
11/16/18   IU lo& Creak Fara                            Cbea Vuta            Fedaral loa.
12/06/88   CA Del aorta Paaticide Stora&e               '0 A Andanon         Greet America
 2/02/19   NJ lrid&aport aental/011 Svca.               Ebaaco               Seabd St Paul Kaine
 3/21/19   BJ Caldwell Truck Co.                        Ella• CoNtr.         Wauaau
 6/22/89   NH Llpari Landfill on-aite                   lechtel         .
                                                                        · Aetn.l Caa .6 Surety
 7/11/89   MD 1tane & Lollbard St. Drwu                 CeoCon            ; INA
 7/24/19   WY Vida leach Development                    Ki-N              ·. individual
 8/01/89   KS Cherokee County Storage Tanks             PittfDeaiiOines ·.INA
 8/01/89   DE Delavara Sand/Gravel Landfill             Weston              :Indiana Lwlbet11Ans
·8/02/89   Ill Western Sand & Gravel                    l H White           ·,Wauaau
 8/23/89   MA laird 6 McGuire                           Barletta            ',,tlausau
 8/31/89   NJ Montclair W orange Sites                  Su.ae Env.           :,Intl. Fld. Ins.
           MD S.Md.Wood Treating                                             :Indiana Luabermans              '
                                                                                                            ',I
 9/06/89                                                Weston
 9/19/89   NJ Helen Kramer Landfill                     IT. Davy             Natl. 'Onion
 9/19/89   PA Moyers Landfill                           Chell Waste          Allerican Home
            ---------------------------------------------------------




                                                                                                       '.'i


                                                                                                       ·~
                                                                                                             .
                                                                                                             ',

                                                                                                        . I




                                                          23

                                                                                                       .1
•

                                       TABLE 21
                                   COilPS HTV CONTRACTS
                COST OF PROJECT COMPARED TO COVEllNK£NT ESTIMATE
                                  NIJKIER. OF liDS PElt PROJECT
                                  ···········----------·----
    aiD                                                           GOVT AllARD AllARD AKT NO.
    DATE       ST      PROJECT HAKE                       PROGRAK EST AKT     /COVT EST BIDS
               .. ·····--·--------------------------------------------------------
     6/04/87    PA Lackawanna llefu.ae                 SF   23.0 15.9      0.7            7
     3/23/88   KA Nyanza Cheaical llaste Dump                  SF   13.0  8.6    0.7     13
     5/17/88   KA Charles Ceorae Landfill                      SF   15.0 15.6    1.0      6
     6/07/88   NJ Lana Property·                               SF    4.1  3.6    0.9      6
     6/07/88   NJ Kateltec Aerosysteas                         SF    3.5  3.4    1.0      5
     8/02/88   OH Nev Lyae Landfill                            SF   12.0 13.7    1.1      5
    10/06/88   PA lruin Laaoon                                 SF    5.0  4.0    0.8      5
    10/12/88   PA Heleva Landfill                              SF    4.7  5.4    1.1      8
    10/18/88   IN Lake Sandy Jo                                SF    2.3  2.4    1.0      3
    11/16/88   NJ lo& Creek Fara                               SF   14.0 14.0    1.0      4
    12/06/88   CA Del Norte Pesticide Storaae                  SF    1.3  1.2    0.9     11
     2/02/89   NJ Bridgeport Rental/Oil Svc•.                  SF   42.0 52.5    1.3      5
     3/28/89   NJ Caldwell Truck Co.                           SF    0.2  0.2    0.8      9
     6/22/89   NH Lipari Landfill on·•ite                      SF   21.0 15.8    0.8      4
     7/11/89   KD Kane & Loabard St. Drwu                      SF    4.0  4.5    1.1      l
     7/24/89   NY Vide Beach Development                       SF   15.6 15.6    1.0      2
     8/01/89   KS Cherokee County Storage Tanks                SF    0.7  0.6    0.9      2
     8/01/89   DE Delaware Sand/Gravel Landfill                SF    1.2  1.5    1.3      3
     8/02/89   Ill llestern Sand & Gravel                      SF    1.0  0.9    0.9      9
     8/23/89   KA laird & McGuire                              SF    9.6 11.3    1.2      5
     8/31/89   NJ Montclair II oranae Sites                    SF    0.2  0.2    1.0      3
     9/06/89   KD S.Md.llood Treating                          SF    2.0  2.6    1.3      7
     9/19/89   NJ Helen Kramer Landfill                        SF   36.0 55.7    1.5      4
     9/19/89   PA Moyers Landfill                              SF   25.0 28.0    1.1      4
     .................. ------------------------------------------------------------------
                                                            TOTAL: 256.4 277.2    1.12 AVG.

     $1,000,000•
     SF- SUPER.FI1ND




                                                          22
                    CH 2A RATlO: MilLO Bins
                                                    uo
                                                    3.00

                                                    uo
                                                    2.00 %
                                                            ~

                                                            ~
                                                    1.10

                                                    1.00

                                                    o.so
                                                    0.00
                    1987          1888       1989
                  CH 2B     RAllO: HIGH/LOW BIOS

                                                    3.14

                                                    U4
                                                            (/)
                                                    2.14    0
                                                            iii
                                                            ~
                                                    2.44

                                                    U4
                                                            %
                                                            0
                                                    ,_   ... i
                        20.00   30.00               0.14


                    AWARD AMOUNT S1,000,000S
    •   AWN'C ..WOUNT


                      CHART 2C
          RATIO: HIGH/LOW BIDS (BY REMEDY)




                                                                 !y
                                                                  G




8   oHIIOILDIIO

                                        25
•




                                                                              ui
                                                                              1.4
                                                                                      5
                                                                              1.2

                                                                              1.0
                                                                              0.1
                                                                                     1:1
                                                                                      Q

                                                                              o.ei
                                                                              0.4 4C

                                                                              G.2~
                                                                                      ~
                                                                             0.0
                            18117       Ullll        1. .

        •   Awtl'EST":;:g..WDIEST REGRES
                     CH II RAllO: AWARD AMOUNf/C3CM' ESTUATe




        ~----+-----+-----,_----~----~-----ro.~




                            AWAAO N1101.MT Sl .000.0005

        •    AWARD AMOUNT      # BIOS      NO. BIDS REGR
            CHART 1C RATIO: AWARD AMOUNT/GOVERNMENT ESTIMATE
                              BY REMEDY TYPE




                                                                                    '••
                                                            --..
                                                               -nil
                                                            Tna. . . ., ... &ae (•11 ...   •tel')

                                                            c.n-•-- a._.l o f - -
                                                            ...
                                                            ~-~
                                                            &lCUMCI._-~
                                                                     W&M ....lJ
                                                                -'"- . , ......
                                                            C'W'''



    .
    ..--.,..   ...
                               24
                           CH 4        NUMBER OF BIDS

Cl)

i 1.00
... -.oo
o
~
w
!J    J.OO
::l
z
w
      11.110
(!)
~ 1.00
~
<     0.00



               II NO. C1F liDS
                                 A

                                     CONTRACT TYPE   -
               IFB=INVITATlON FOR BIDS
               RFP=REQUEST FOR PROPOSALS




                                        27
                             CH 3A · BIOS PER PROJECT



     12 ~~----~----,_----~---4~---4~---4~---+-;

Jto
-
0
~




~
:I
c:
     .
     I



     •

     2

     0
                              1987                          1988          1989
         •       # BllS REGAS •        # BDS

                           CH 31 N\JiooiBER 17 BIDS (flf AWNiflJ AMOUNT)




                                           AWAAD AMOUNT (t1.000.00Cia)

             •    AWAKJ AMOUNT

                                CHART3C
                  AVERAGE NO. BIOS RECEIVED (BY




     ·-                       . - '"   .     ,_ ___   ~-'   ~   .,
                                                                     26
                                                                     ~
                                                                                               I                                                                                                           .\   '"
                                                                                                                                                                                                            1-·11\·-.
                                      e.   Surety Flra Partlstpatlon.   The •aterhl froa the' Corps dhtrlcta
                                                                                                   '
                                                                                                   I                                                                                     i.'
                            indicates that no HTV project requiring bonding vas       preclude~                          froa being 't
                                                                                                   I·                                                                                    '     ·\~
                            placed under contract because of nonavallability of bonding.': So11e flras, ,
                                                                                                        I
                            however, were disqualified froa    co~etition    becauae of their ',inability to
                                                                                              I
                                                                                                            I                                                                        .
                            provide acceptable surety.     The .. instances usually involved ~contracton • ~se
                            of individual sureties that after examination were found to have insufflciilnt
                                                                                                                I

                            assets to protect the Covernaent's interests.       Where thla occurred, award ..;ent
                                                                                                                I                                                                                    I
                                                                                                                    I                                                                                '
                            to the next lowest bidder providing acceptable bonding.         All contracts were\
                                                                                                 ,.

                                                                                                                    I.
                            eventually awarded despite probl . . . reported by certain     contr~.cton.                                                                        The
                                                                                                                        I
                            .urety industry participation ln the Corps HTW prograa during •1987·1989 ls
                                                                                                                         I
                            depleted in Charts 7 and 8.     Chart 7 indicates the percent of *ureties'
                                                                                                                            'i
                            dollars shares covered by each surety flr..       Six firas received 83• of the
                                                                                                                             \
                            project dollars.     Chart 8 shove the percent of sureties' project shares
                                                                                                                                 I                                                             ••
                                                                                                                                 I                                                              k
                            covered by each surety fir..     Seventy-one percent of the projects were covered
                                                                                                                                                                                                                   ·.I
                            by five sureti...                                                                                                                                                                        i

                            D.   HTW INDUSTRY BONDING PROBLEMS AND PERCEPTIONS
                                 1.   Contracting Induitrv Perceptions.      Fro• the point of view of the
                                                                                                                                     '
                            contracting industry, a . .jor proble• in the H1V progr&~~ is the~ many
                                                                                            '
                            contractors coapeting for contracts are unable to obtain the req'l"ired surety
                                                                                                                                         1
                            performance bonds for construction contracts. 3       Some contractors '1 are unable
          I                 to secure bonds due to the surety's perception of liability rislttat HTW
                                                                                                                                         I,




··•·.•.   \                 projects; others because contractors have exhausted their bond in~ capacity.
                                                                                                                                              I
                                                                                                                                                                                                         ·~.   J
                            Noncompeting firms maintain close contact with the surety industr;y and
                                                                                                                                                  I
                            routinely seek information relative to bond availability.         They a,re aware of

          .\
                                                                                                                                                  I

                            the surety industry's stated reasons for not providing surety bon~s.                                                                                But,
                                                                                                                                                      I

                            contractors assert that corporate surety decisions on providing b~nding are
              \             not unifora.     Consequently, bondin& . .y be provided in some instances based on •
                                                                                                                                                          I




                            the aurety' s relationship to the contractor rather than on purely ',.objective
                                                                                                                                                          :                                                      ~
                                                                                                                                                              I



              .\            atandards.     Nonc011peting fir.s do request . . uings concerning HTW !project
                            aolicitations, but they do so only to keep up to date on HTII activ'ities or
                                                                                                                                                              I


                II
                            they anticipate involv...nt as a subcontractor.        On HTV contracts around 100
                                                                                                    I
                                                                                                                                                                  '
                                                                                                                                                                  '



                            flras request plans but fever than seven usually bid.
              ·•••..   \                                                                                                                                              'I

                                                                                                                                                                      '
                                                                                                  '
                                 llemedial action contractor (llAC) aaaociatlons point out that there are
                       '·                                                                                                                                                  '
                                                                                                                                                                           I
                                                                                                                                                                                                                         \
                            aany flras that are lntereated ln partlclpatlng ln the HTV cleanup program,                                                                                                                  I
                                                                        29                                                                                                                                               1'
                           CHART 5   CORPS HTW PROGRAM
                      CONTRACTORS' SHARES (S280 MIWON TOTAL)




                                                      Chern Wa"-(22.8%)


 A
w
 A
 A
 D
    A       Ebuco(18.9%)
 M
 T

                                                         Baltetta(-4.1 %)



                            Sevenson(7.5%)

                                     CONTRACTOR




                       CHART6
        CONTRACTORS' SHARES (24 PROJECTS TOTAL)




,.
R
0
J
E
c
T




                                             28
bovever, only a fev are con.istently able to . . et the bondln& requirements     •
oeceaaary to continually compete for contracta.   Some companies stated that
they did not evan participate in biddin& on HtV projects for reason. of
liability and the inability to obtain performance aurety bonda in the HTW
area. On formally advertized sealed bid procurementa inability to obtain
performance bonding normally has the added affect of precludin& the contractor
fr- being able to provide the required bid bond, without which the bid b
considered nonresponsive by the Government and not considered for avard.


    The HTV induatry stated that the number of contractors biddins on HTW
treae.ent projects is fever than thoae bidding on non-hazardous and toxic
vaate projecta, in part due to the bonding problem. 4 One contractin& firm
pointed out that the HTV prosraa ia comparatively amall in relation to the
entire ensineering and construction industry activity in this country. Kany
firms reported that they have elected not to participate in the. HTW cleanup
prosram When they experienced difficultiea in securing bonds or anticipated
complications in that area.


    Contractors perceive that the problems in contracting in the HTW area to
some extent are due to the Government'• use of contracting procedures
developed for non-HTW construction and service contracting. HTW vork involves
a perceived increase in the possibility of liability in excess of traditional
construction projects. There is also a strong perception in the surety and
insurance industry that the odds of incurring liability given recent asbestos
litigation are much greater than before. Contracting firms felt that the
lavs, regulations, standard Government procurement forms and procedures on HTW
contracting efforts were not totally appropriate.    They recommended more
careful acrutiny of the acquisition procesa to assure avoidance of
inappropriate applications.

    The contractor respondents vera alao of the opinion that the total
contract &110\lllt of indefinite delivery covered h&&ardoua and toxic waste
contract• engaged in by a contractor would be uaeaaed by the auraty vben
upper bondin& U.aita vere decided upon for a contractor. This concern
prevail• in apite of the fact that the Federal govenaent only requirea
bonding for delivery orders written againat indefinite delivery contracts.

                                        31
     CHART 7 CORPS HTW PROGRAM 1987-9
     SURETIES' SHARES ($280 MILLION TOTAL)




A
w
A
II
D
A
M
T
                                             '.
                                             u




                      SURETY




                   CHARTS
     SURETIES' SHARES (24 PROJECTS TOTAL)




,.
II
0
                                             t
                                             0
J                                            u
E
c
T
                                             •
                                             T




                       30                        I
                                                                                                                !.




                        necessary to aatiafy corporate sureties and secure surety bonds.          The results
                        of a survey conducted by the Environmental Business Association (TEBA) shoved
                        that half of the 45 finu surveyed vere unable to aucce .. ful!ly compete for a
                        project due to the lack of adequate bonding or had decided not to bid on
                        contracts due to probleas vith securing performance bonds.


                            2.   Surety lndustn Dondios Perceptions.     The probleu th.at are perceived
                        by che aurety bond co-.mlty ere sw.arlzed in a docwaent entitled "Hazardous
                        v..tea   and che Surety.•'   Thia docuaent, revleed in Nov.-her 1989, vas
                        continually Mntioned in the interviews u       the "bible" of the. HTW industry
                        concerning haz:ardoue and toxic waste.    This docwaent delineates the issues
\                       concerning aureties in handling HT\1.    Soae of the factors that are of
                        particular interest and concern to the sureties follow:•

\                                e.   The aureties believe that design of any sort is not traditionally
                        a surety bonded activity.     Bonding coapanies perceive that the·., risk of bonding
                        design eleaents of HTW cleanup is even 110re aubstantial than what 1s faced on
                        noraal construction projects.     This steas fro• the viev that the actual
                        'la>ovledge and experience in the area 1s lilllited.   Designs aay b,ecome obsolete
                                                                                                                              ~       ··'
                        very quickly as changes in the HT\1 processes evolve and general·ly there is
    \
    i                   considerable difference of opinion among technical experts on ~sign adequacy.
    '
    I                                                                                                                             I

                        Perforaance bonds are nomally used in construction contracts. '.In such
                        instances, the design is fixed and technical interpretations are more uniform.
                        However, where design eleaents and construction are combined in ·.the same
                        contract (e.g. through perfomance specifications), bonding probleiiiS aay arise
                                                                                              '
                        due to the increased risk to the surety associated with the unknowns on HT\1
                        project designs.     However, bonding firas believe and the governm~nt agrees
                        that the builder who specifically carries out U.S.      Government-ap~roved    and-
                        accepted plans and specifications should not be subject to these ·.,potential
        \               liabilities - absent knowledge on its part that the specificatio~ were


        I               defective which vu not brought to the Governaent • s attention.        '
                                                                                              This builder
                        ia t.pleaenting an accepted and approved design, and, therefore, is not

        I   I
                        reiSpOnsible for the tachnolol)' nor the . . th...s. uaed to carry out the cleanup.


                                 b.   Tachnolo&ical unlcnowns, particularly those in an area 'with
                        potential liability such u     the toxic cleanup pro&raa, are worrisome to the
                I
                I                                                 33

                \
                    I
                                                                                                                     l_   i
This had parcicular concern to contraccora chac had been awarded large,
indefinice delivery contracca. They feared Chat suratiaa •i&ht uaa che cotal
concracc aaximua, racher chan accual work ·orders issued, co compute chair bond
capacity li•icacion.

    Tables 2A-C illustrate che experience of Che Oluha and Kansas Cicy Corp•
discriccs.     There vere a saall nuaber of bids received on several HTV
projecu.      This lov nuaber of bids is not neceasarily due co cha lack of
incareac in the projecca. Accordin& co several HTV organizaciona interviewed,
including che Hazardous Vaace Accion Coalicion, Environmencal ausinesa
Association, Associated General Concraccora, National Solid Vasce Kanage..nt
Associacion and che Remedial Concraccors Inscicuce, che key faccor
concribucing co lower compecicion for some HTV projeccs is che inabilicy of
. .ny concractors co secure bonding. Ic should be noted that in many cases
fir.s cannoc obcain bonding despice a proven hiscory of competence in doing
such vork, scrong financial assecs and proficabilicy and sound leadership and
experience in che fir..

    In some cases ic vas reporced by boch contractors and government
concracting agencies thac projects have been delayed due to che shortage of
contraccors who can obtain bonding and related surety problems. Contracting
represencatives for boch the Corps and che staces advised that chey have had
administrative delays as a result of contractors not being able to obcain
appropriace bonding. This additional work has resulted in the slippage of
projecc schedules.

    The resulcina shorcage of qualified fir.. chat are able co consiscencly
arranae surecy bondin& . .y be reflecced in hi&her coscs to che govenmenc.
&onding's lt.itacion on co8p&ticion, vith only four or five final bidders in
aany cases, . .y have rasulcad in higher concracc bids than would ochervise be
expected.     Tables 2A and 2! illuscrate the experience of two Corps discricts
in bid prices and·auaber of bidders.

    s..ller   concractora, in particular, . .y be screened out of the HTV cleanup
progr.. aarket due co cbeir inability to aecure surecy bonding.     Several
contractors stated chat they do noc have the excensive financial aquicy

                                         32
pollution liability inaurance coverage.      The aame concarna regarding the
                                                                                 •
unknown riak of involvement in the KTW ..rket are equally important to
auratiaa that .uat decide vhathar to provide needed bonding for the program.
The following auamarizaa aome of the finding• contained in theae paper• on the
ahortcominga of preaent coverage for KTW project•:
           1) Preaent KTW conatruction contractor•' pollution insurance
coverage ha• only limited apatial or geographic coverage. Some policlaa cover
only on-alta liabilltlea. In aome c..ea, KTW liability ..y be off-alta due to
h&zardoua aubatancea baing carried beyond the border• of the aite by wind,
vater runoff, or underground aeepage.
           2) Clai.S-..de inaurance only.      The inaurance coverage b on a
cleiiU·IUde bad• and doea not cover the period after the coapletion of the
project unl••• the contractor continua• to carT)' the inaurance . Moreover,
even vhere a contractor aay chooae to continue coverage, it aay not be able to
do ao becauae of the insurance coapany'• decbion to no longer make auch
coverage available. The abort time period (one year) covered by claims-made
inaurance preclude• coverage over the long period of 20 years or ao in vhich
claiiU ..y be . .de in the KTW area. In claias-made insurance, the policy is
only in force during the period vhen pre•iums are being paid. With respect to
KTW cleanup, thia vould be normally the period of contract performance
including any contractually required warranty periods.
           3)   Low dollar li•its.   Surety organizations state that the upper
dollar li•its in presently available pollution liability coverage are
inaufficient to cover the risks associated on HTW projects. The comparatively
lov limits of the insurance policies outlined in the document would only be
adequate for aaaller HTW projects vhere proven technology would be employed on
an isolated site.
           4) There is a concern by aurety firms that they will be targeted
by third party liability plaintiff• in the event other parties whose actions
aay have cauaed the injury are judpent proof.       The lack of aufficlent
tnaurance or indemnification for the HtV re.. dial action contractor leads
aa.e bond underwriter• to be concerned that the corporate aurety based on its
providing a aurety performance bond ..y be adjudicated to fill the insurance
"VOid ao that the third party•a injury can be coapenaated. They vorry that,
after inaurance coverage baa lapaed or expired, and perhaps after decade• have
, .. sed, the corporate aurety firm vhich provided the bond may be looked upon

                                        35
eurety co..unity. londin& coapanl .. perceive that the etate of technolo&Y of
the liN cleanup proceu ll        con~tantly    ch&n&in& and very ublauoua. It b          their
opinion that Uttle ll k:novn about the adequacy of the technolo&Y either
concernina     ~diata    or   lor~~-terw   experience.   Technolo&Y aay evolve that
render• the preaent .. thod inadequate.          Suretiea are concerned that thb aay
leave the d . . iper-builder potentially liable if the pr. .ent H1'V le&al cllaate
conti.Duea.

        c.     Surety firwa have etated that the preaent unfavorable le&al
.enviror.ent, with widespread Uti&ation and larse avarda, baa ucle insurance
co~apaDiee    very cautious about   in.~urin&   HTV projecta.     Althou&h vocal in their
ueertiona that they not be treated u            a eubetitute for insurance, they fear
that by bondin& such vork they uy in the future be aou&ht out baaed on a
lesal theory which vould treat thea ae if they vere             in.~urance.   The cause for
liability, euch as the appearance of a dieeaee 20 or aore years after exposure
to tozic eubatancee, leads to a very uncertain eituation for euretiee.


        d.     Accordin& to the eurety firaa interviewed, toxic tort liti&ation
feature• are an 1aportant reason for their preeent reluctance to participate
in the HTW cleanup field.        In the toxic tort arena a very lone tiae period (10
or 20 yeare) between exposure and developiHnt of injury 1a typical.                Unlike
other prototypical injury       situation~,     toxic liability involves long time
perioda 7 between the alle&ed expoeure and the diecovery of da&a&ea.              Since
thie liti&ation takes place in etate courte, the indemnification under SARA ie
not helpful, nor lesally binding on the etatee.


        e.     Inaurance.     the Hazardous Vute Action Coalltiou, m orsanization
co.prlaed of technical conaultin& firaa in tha 11TV field, aloft& vith llareb and
llc:Lerman, a lari• lneurance broker, held a -•tina ln Vuhift&tOII, D.C. on
Septe8ber 13, 1919, ln which a earle• of apeabra outlined the lnaurance and
 tnde.m.flcatlon probleu confront ina the contractlna indue try.              The collected
paper• of thie -•tin& are entitled •Pollution Inaurance/lndeanification
 Iaauea for £n&lneera in Hazardous Vute Cleamap•.            The papera point - t that
 the preaent inaurance cover•&• 1e not adequate ln aany areu.                 They abo
 azpreae the inaurance lnduetry' • concern that potential llti&ation
 uncertaintlea play a aajor part in their decblona to foreso providln&
                                 IV.   CONCUJSIONS                                     •


TRENDS OVER TIME

   Twenty four KTW projects were examined in the study.         Contract data vas
assembled for the bidding process on these projects including contractors and
sureties participating, bid amounts, project dates, project types and
aovernment estimates.     The inforaation presented in Tables 2A-C and Charts
la-c and la-c sumaarlza the relationships of these factors and shows the
trends in these elements over the past fev years.        The information vas
analyzed with .-phasis on the relationships between award amount and
aovernsent   e~tlmates,   the ratio between hi&h and lov estiaates and the number
of bids received.     The respective shares of the HTW market for contractors and
for sureties were also examined.


   There tends to be an increasing trend in the ratio of contract award
.-ount to govern.ent estimate over tt.e.        The average ratio has climbed from
.8 to 1.2 over approximately a two year period.        This has transpired while the
ratio of high bids to low bids bas been falling from 2 to 1.3 and the number
of bids received on the average for each project has dropped from 6.2 to 4.6.
This information suggests a decrease in competition for projects in the        H~

field over the time period and to an apparent increase in price at the same
time.   The decreasing ratio of high to low bids over the same period also is
an indication of a changed competitive situation.


    Relationship of pro1ect size.      The relationship of the project size and
these various factors vas examined.      As    the projects increased in size, the
ratio of the award amount to the government estimate increased from .9 for
small projects to 1.5 in the $60 aillion dollar range, indicating the
lessening of competition for larae contracts where fev contractors can
compete.     At the saae ttae the average number of bids per project decreased
with the size of the project, reflecting the fact that fev contractors are
currently available to coapete for these larae KTW projects. The average of 6
bids for smaller contracts was reduced to 4.5 on the contracts in the range of
$60,000,000 at the higher end of the acale.        These findings, although not

                                          37
•


    by the courts as the insurer of last resort or a "deep pocket,• 1               This
    unknown rbk has led so.. corporate sureties to forego involve11ent in the HTV
    aarket.        Surety bond producers that have aade such a decision indicate that
    they would be aore likely to participate in the aarket if the applicability of
    SARA indemnification to the surety vas clarified. Moreover, that the
    performance surety bond be clearly represented as being intended by the
    Government solely as a ruarantee of performance by the contractor and not in
    anyway as protection for the contractor's tortuous injuries to third parties.


              f.     Greater rhk to Government.          In response to claw by so11e
    contractor interests that bonding could be substantially reduced for certain
    categories of HTW vork, surety sources stated that risks of non-performance
    increase if construction contracts are awarded either without surety bonds or
    vith lover rated surety performance bonds.              Surety officers contacted in the
    survey pointed out the trade-offs involved risks to the government if surety
    bonds vere not used on projects that normally would be surety bonded.                  They
    emphasized that surety finas perform a valuable service for the government in
    screening out potential proble11 contractors fro11 the pool of contractors
    competing on government construction projects.


              g.     Indemnification.      The sureties and contractors have listed many
    perceived probleii.S vith the present SARA1 indemnity law.           There is
    dissatisfaction over the amount of indemnification coverage, as well as the
    extent of the coverage and even what events are indemnified.              Sureties find
    that the definition of what 1s the aaxillull dollar coverage of the indemnity is
    not specific.        CER.CLA sets the upper llllit of the indeaniflcation SIIIOunt as
    the funding that is       re~~Sining   in the Superfund account.     However Section 119
    says "If sufficient funds are unavailable in the ..• Superfund ... to aake
    payments pursuant to such indemnification or if the fund is repeated.                  There
    are authorized to be appropriated such aaounta as aay be necessary to aake
    such payments.        Sureties and contractors are of the opinion that such
    li11itation on indemnification aay prove inadequate in the future if there are
    li11ited funds available in the Superfund account at the tllle indemnification
    requests ripen.        The EPA is presently addressin& the llait on indemnification
    proble• in proposed draft suidelines for t.plementlng Section 119 of SARA.


                                                    36
                                                                                     •

aovernaent concractina officera, and the contractln& and auraty induatriaa.          .
The experience 1a chat the aarket ia conatricted for contractor• in ehe HTV
fleld and the avallabllity of bondina h a problea. Althou&h all project•
have proceeded and none have been atopped by lack of bond availability, the
difficultiea   ~t   have been encountered in the bondlna area have impacted the
cleanup proceas by delayina achedulea, reducina competition and ultiaately
ehereby, increasina ehe pricea peid for cleanup.

    Financial rjak.    Vho ia affected?   The   &ove~nt,   ehe HtV contractor• and
ehe aurety indclatry are all at rlak in the IITil cleanup proceaa.A key aspect
ln ebb analyat.. 1a the aaau.ptlon of fin&neial rhk ln ehe HTV prograa. So~ae
rlak 1a aaaUIHc:! by ehe aovernaent and ao.e by induatry. The proble.. arise
when ehe financial rlaks are exaained in detail and found to be auch that
private induatry decline• to participate due to ehe perception that it will
have to bear vbat it conaidera to be aore than its ahare of the rlak.
Hiatorlcally, Cbe aurety induatry has provided perforaance bonds to cover the
riaka of nonperforaance by conatruction contractors. However, in the HTV
area, ehere has been a areat deal of reluctance to do ao for fear of extended
llabllity due co ehe lona tera nature of Uabillties involved and other
factor• of UDCertainty in ehe CER.ClA area. The projecta involved risk
uncertaintiea in teras of the present and the future atate of the art of the
HTV cleanup technology. The atate of the art is conatantly changing and
improved   tec~ques   lead to future pollution standards that may be higher and
-re atringent.

    fbyslcal £!sk. Vho or what is impacted? The environment, cleanup site
workers and the local residents are affected by the physical risk. The risks
exiat durin& the cleanup of ehe project, and extend through the warranty and
the latent defect period of ehe cleenu.p project. However, due to the nature
of bazardoua _.te, the riak -y lut for yeara, decade• or forever. This
problea of ~ riak and uncertain liability .u.t be eddreaaed and the risk
to induatry - t be bounded ln order to &aln ita full participation in the HTV
pro&rea.   In order to reduce ehe phydcal rhk over the long tara, ehe actions
taken involve f'inancial UDCertaintlea and llabilitiea-     The aovern!Hnt auat
aaau.e a certain level of reaponaibility for theae uncertainties.      The total

                                          39
    •
•
•

        concluaive, indicate • pattern of co~etition in the field that above a
        liaited availability of eligible contrectora. The expanding HTV cleanup
        requirement will exacerbate thia aituation

            Relation•hip of pro1ect type.   Examination of the relationabip of the
        ratio of award amount to government e1tlaate 1hows that the ratio i1
        acceptable, except for containment project• where the ratio va1 1.3 to 1.    The
        largeat apread for the variation of blah and low bide val in the project•
        involving collection and dl1p01al of va1te1, 2.2 to 1, while the next greate1t
        variation va• for ga• venting project• which ran 2 to 1. The heavie•t
        co~etition va1 evidenced in the average nuaber of bide (7) received for va1te

        containaent project• with the next highest nuaber (6.5) bids for alternate
        water 1upply project•. It i1 noted that the average number of bids received
        for RFP'I VAl only 3, c~ared vith nearly double that amount for Invitation~
        for bidl.

            Contxaetpra' pro1ect aarket &bares.     The aharea of the HTV cleanup aarket
        (24 Corpl projecta) are heavily concentrated in a relatively amall number of
        contractor•. Chart 5 ahova that three fir.. or joint partnerships have about
        60' of the dollar aarket of HTW projects and 5 of the 15 firms have
        successfully bid for about 58' of the total number of projects. The rest of
        the project• are being apread among the remainder of contractors, 1oae of
        which are quite large.   While the total is 1tlll small, the concentration of
        activity in a few firas tends to persist and is not assuring to those aspiring
        to participate in the program.

            Sureties' urJtet abares. Surety bond provlden are abo unequally
        repre•ented in the liat of 1uretiea ahares of the project pie. Five .uretiea
        or aurety ca.binationa account for 13' of the project bond dollars and five
        auretiea or collbinationa bonded 70t of the Corps 24 projects analyzed in the
        atudy.   Thia illuatrates the eaae that few aureties are intereated in
        providing bonding for 11tv projects.

            The foregoing experience preaented in the contracting inforaation froa the
        Corpa Kansaa City and o.&ha Districts reinforce• the atory presented by the
                                               38
                                                                                    •

the bonding of HTV projecta becauae of perceived new and unanticipated riaka
                                                                                    .
                                                                                    '




bein& poaaibly tranaferrad to the aurety.        Theaa perceived nev riaka entail
additional poaaible re•ponaibilitie• for project efficacy, deaicn (perforaance
apecificationa) and third party auita. It i• in thi• area that the pre•ent
proble., of uncertainty have aurfacad and are at thia ti.. a aubject of
conaiderable concern.

    Thia atudy indicate• that the problea of perfor.ance bond availability for
HtV conatr\&Ctlon work uy be lt.itln& the mmber of quallflad contractor& that
caD co.-pete for auch -rk.    In   &OIH   caaea, the liaitation on firaa able to
c~ete,  when coupled vlth requirement• on the governaent neceaaitatin& a hi&h
mmber of HTV contract awarda within a ahort apan of tt.e, uy have cauaed
co~etin&   fir.& to be leaa   co~etitive     in their bid 1ubaittal1.

    The data analyzed doea not clearly indicate any aerioua proble.. at thh
time. However, the contract infor.ation on the tventy·four project• analyzed
uy be akewed due to a concentration of contract• durin& September and October
of 1989.   Althou&h trenda are aug.. ted, the data h not •ufflcient to draw
apecific concluaiona. Continuous obaervationa of award data h necessary to
deteraine if trenda are developing.

    While not yet resulting in the government not being able to get
co~etition   on ita KTV projects or to carry through on its reaedial action
prograas. the clear t.plication of induatry comment• received ia that the
concern bein& expreased by the aurety industry over providing bonding for HTW
project• . .y well ultt.&tely lead to a aituation where bondin& llaitations
will arbitrarily curtail the extent of co.-petition realized by the government
 for auch work.   Thia concern aay threaten the government'• ability to
aucceaafully acquire the conatruction aervlcea needed.

     Thla report baa reviewed both aubjective data gained fr- interviewin&
various HTV indultry rapre•entative• and objective data ba1ed on bide received
by the Corpa. While tbe inforaation fr- intarvlewa 1a aubjectiva, it doea
repreaent the industry aind aet and aa auch govern induatry daciaion· aaking.
Vbera there ia little or DO rlak, it la appropriate to try to ainlalze
                                            41
•


    level of riak doea not diaappear; it ia aerely transferred fro• one entity of
    aociety to another. It ia not reaaonable to expect private induatry to
    voluntarily participate in a hi&h riak entarpriaa unlaaa a hi&h preaium la
    paid. Many goven.ant progr8lU ere atructured to reduce thla uncertainty in
    new hi&h tech and experiaental enterpriaea to a level that ia aanageebla by
    the private aector.


        Indemnification, inauranca, bonding and contractual egreeaenta era all
    aecbania.. to transfer riak.     The preaent aituation in the HTV cleanup area
    bring• thia eapect of riak, and who .uat asau.e riaka for the nation'•
    cleanup, into focua. There ia a need in the HTV progr.. for the definition of
    the riak involved and the aseign88nt of each riak to the proper entity.
    Guideline• ere neceaaary to apell out and clarify the appropriate
    reaponaibilitiea that will be borne by government egenclea and those that are
    within the purview of private enterpriae.


        Indemnification ia a tool that transfer• the risks fro. private industry
    to the government.    One problea with inde.nificetion in HTV cleanup• ia the
    uncertainty of coverage. It is not known at the ti.. of bid openings whether
    coverage will be available to the contractor or the surety, end, if it ls, the
    aaxl- amount of coverage is unknown.

        Another tool co.aonly used to aanage uncertainty is insurance.     Insurance
    presently available to contractors is inadequate.     The aaxi- 1111ount
    available ia   ~h    too low, the tt.e period of coverage is too lt.ited, and
    third parties ere not covered.     Thus, the transfer of risk to the insurance
    induatry is quite llaited.


        The bonding proceaa ia another way to transfer uncertaintiea froa the
    sovernaent. It ie a traditional vay to transfer riak in the construction area
    where conatruction occura over a long tlae period and co-itaenta .uat be aade
    for the entire project before the project can proceed. The traditional riak
    covered by construction perforaance honda waa that the project be coapleted as
    deaigned, that the contractor asauaed reaponsibility during the conatruction
    period, the warranty and the latent defect period.     Probleas have arisen in

                                             40
       Contractor• want to be able to provide alternate   ~netAry   protection to
the Covenuaent, i.e., lettera of credit.     Vblle the Covenaent cannot at
preaent accept lettera of credit directly, lettera of credit can be uaed aa an
aaaet by an individual aurety. Regulationa would be required to allow the
Covenuaent to directly accept lettera of credit in lieu of aurety bonding.
       Suretiea want indeanification for both the.. elvea and their contractors
abould they have to aaaume reaponaibility for project execution or deaign.
       Protection of the Government intereat can be achieved by perforaance
bonding, by careful aelection of coapetent contractor• or a combination of the
cvo.   The Corpa bae, for the 110at part, uaed conatruction contracting where
dle primary .. thod of contractor aelection la by lov bid. Since control over
contractor &election ia lt.ited, the Government baa coapenaated by demanding
100\ bonding. An alternative would be to uae an RFP where technical
capability, aanage..nt expertiae, experience, and price are considered in
contractor aelection. Vith .ore confidence in contractor capability, a lower
perforaance bond aigbt be appropriate. The government abould attempt to
aitigate contractor and aurety concerna vbile aaintaining appropriate
protection of the govern.ent intereat.




                                        43
•



    industry fean.   The underlyina industry concern    ~s   rhk to the contractor
    and/or the surety.   Factors affectina risk include:     indemnification,
    insurance and bondin&.   Theae risk factors influence one another, e.a., if
    inde.nification is available to the surety, then bondin& aay be .ore readily
    available.   No sinal• action vill solve all the bondin& problems.     Additional
    conclusions are listed belov:


           The aovernaent .ust select the .ast appropriate acquisition strategy
    early in the solicitation process.    Risk to sureties, contractors and the
    1 overn.ent should be considered in addition to other site requirements.
            The aovernment acquisition strate&Y should address the need to aake an
    early decision whether to use a service or construction contract.      In some
    cases, different contract types aay be used for different project phases
    within the sa.e contract.    Miller Act, Davis·Bacon Act and Service Contract
    Act decisions should be aade on their .. r1u and without regard to bonding or
    cost implications.
           Contracts should be structured, the type of contracts selected and
    bonding require.. nts established, to appropriately protect the government's
    interests.   These interests include: insuring that contractors capable of
    performing the contract remain eligible and that the selected contractor
    performs as promised.
           HTW cleanup agencies should explicitly decide hov much performance
    bonding is required and hov that bonding should be structured.      Normal
    practice ia to require 100• perfor.ance bondin& for construction contracts and
    zero bonding for service contracts, although the contracting officer can
    select other percentage a.   Ve need to assure that the amount selected is only
    that needed to protect soverruaent interests.
           Sureties only vant to assure that the remedial action contractor
    constructs what vu required by the plans and specifications.       They vish to
    avoid desisn/construct contracts or contracts containins aajor performance
    specifications.
           There is a strona perception by the industry that difficulties vith
    bonds 1a l:laitin& c011pet1t1on.   RA contractor. report that they bave not bid
    projects due to unavailability of bondin&.      Sureties indicate that the risk is
    t - large.
                                             42
lee hietory of perfo~e. In chle reepecc, lc eupple•ence the pre-avard
eurYaY parfor-ed by the concractin& officer to . .ka hi• affir.ativa
detaninatlon of contractor r .. ponalblllty.      Hovevar, ln the ca.. of HlV
projacta, cha aurety c-'llty appaara to all- lta concem for che unknown
rlaka aaaociatad wlth auch work to ovarahadov lta con~1derat1on of .ora
conventional factor• raflecctnc cha contractor'• capab111ey co parfon. The
at\Mly b\dlcatad chat au11 auratiea foracloaed any con~tderatloa of bondin& a
contractor baaed aolaly on the face that the project ••• aa1ociatad wlch KTV.
In doin& ao, the aureey did not analyze the contractor'• ability co perfom ••
it would have done on a non-Htv con~Cructlon project.


B.   NON-LEGISlATIVE CIWIGES
     Tbeee option~ addreae aoluclona vhicb can be readily tmple.ented by the
various agenciea conceraed. They pri. .rily focus on lsauea related co the
contractin& procaaa. In ao.. caaaa, chay call for clerlflcation of each
agency'• axiatin& activ1tiaa. la other inatancea, they call for nev
initiative• by the agenciaa to aaaura that bondin& require.enu and the
acquiattion factor• which ..y have a . .jor !.pact on the availabllicy of
bondin& will be given careful conaideration durin& the acquialtion planning
proceaa.   Table 3 -rlzea che     ~:ypea   of   option~,   their advantage• and
diaadvantagea, the lead agency for implementation, and their priorlcy.

     In ao.. caaea, the optiona recognize chat implementation vill necessitate
a tradeoff of protection for the Covernaent againat contractor nonperformance.
The advi ..biUey of acceptins aucb a tradeoff will need to be evaluated for
each contract. Tbla will be dona in light of the rlalt being auuaed by the
Coven.ent, venus the benaflta to be derl'ftd fro. the potential t.Provement
in cha c~tltiva clt.ata aaaociatad vith lowering the bond requirement.

     Vhlla t.pl...ntation of theaa optlona ..y pro.ota greater intaraat in KTW
work by both contractor• and corporate auratlea, incraaaed lntereat and
c~~~~pt~t1t1on . .y not necaaaarlly raclw:e che coat of the work. Moreover, any
dec1a1on to laaaen bondln& raqulr...nta .uat be completed with apaclal
.-phaala beln& placed on tba pre-award aurvey procedure• by the procuring
...ncy.
                                           46
                               V.    OPTIONS EXAMINED


A.   INTRODUCTION
     Dhcu.uion. conducted durin& the 1tudy with ind111try, contractor, and
government per1onnal railed laveral po11ibla alternative• that •i&ht be taken
to increa1e the availability of bondl to HTV con.truction contractor•.      These
alternative• fall into tvo general categorie1 as follow•:


     o   Non-Lic1alat1ye Cb•ncea. Internal Corp• and EPA non-legl1lative
         chan&•• in procedure• related to contractin& atratagy and
         implementation of the authorities Which each acency already possesses.


     0   Lfddtdve Cbancea.      includes revbiODI to reaulttiOnl Which &Uide
         each acency but which neither posse•••• the authority to revile
         independently; revision. to axistin& 1tatute1 10 as to, (1) ellainate
         requirements that serve to le1sen the corporate 1urety indUitry' s
         intere1t in bondin& of HTV projects and, (2) to clarify that
         performance bondl are to be Uled only to assure that the contractor
         vill complete all contractual requirements and are not a vehicle by
         vhich third party claiaa aay be 1ati1fied.


     Of the options available to the covernment to alleviate the bonding
problem, aany are centered on the concept of management of risk by the
government.   Financial and physical risk exist in the cleanup process and the
government needs to incorporate risk analysis into its planning process to
examine the trade offa in costs and benefits of the transfers of these risks
between government and the private aector.      In the case of bonding HTW cleanup
projects, the governaent IMllt examine the assumption of higher risks in non-
performance of contracts for HTV cleanup against the gains of •ore competition
by the cleanup indultry and the resultant lover prices for projects.


     It ahould be pointed out that the bonding community generally does perform
a service for the Govarnaent contractin& agency in aaking its evaluation to
bond a particular contractor.       In aaking thia decision, it carefully analyses
the contractor'• financial and technical competence to do the work as well as

                                          45
                                                                                    •


   1.   Igproycd Aeguieltion Planolns 6 Bond Sttycturtns       These option.
require that the procurina a&ency be eapecially aen.itlve to lea
characterization of the work to ba perforaed under the HtV contract and
vl&llant to preclude bondln& requirement& that are aaceaalve to the needa of
the Government.     If -rk under one contract la both eervlce and con.tructlon
and dutlea are not aeverable, the lar&eat part of the effort (aervlce or
construction) will prevail.       HTV contract& involvina incineration or other
treac.ent technolo&iea will ueually involve work element• in both the
construction and aervice cate&oriea of -rk.        The Killer Act bondin&
require-nte apply only to construction, while aervice work does oot require
any bondin& unlees the contractin& officer views it aa bein& needed to protect
a le&itimate Governaental interest.


        a.    lackuound.    The atudy found that early aoll incineration
contract& were considered by a Corps diatrict to be service work requirin& no
bondin&·     When a decbion by the Departllent of Labor concluded that hazardous
aoll excavation for shipment to a landfill constituted construction, a
different Corps district treated excavation associated with an HTW
incineration project as construction requirin& Killer Act perforaance and
payment bond protection. In this latter case, the actual incineration process
vas classified as bein& service work.       Although as service work there was no
need to provide bondin& for the work, the contractin& officer, concluded that
the incineration procesa was ao cloaely tied to the excavation work that the
penal amount of the perforaance bond ahould encompass both work cate&ories.
This substantially raised the perforaance bond amount and led to a protest
from a fira which waa precluded from coapetln& due to its inability to obtain
the required bondin&·      Thia fira bad succeeafully performed the work required
under the ori&in&l service incineration project.       The comptroller &eneral
ultl8ately updated the contractin& officer• discretion to require 100\ of
perforaance bondin& for thb project.


    Thla incident, u     well u    indication& fr- a recent Superfund project
performed for EPA by the State of Texu, (see pa&e 11) highlight the neceseity
for the procurln& a&ency to cloeely analyze its bondin& requirement& ln light
of the work to be performed and the extent of protection needed for the

                                           48
•
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                                                                                           47
'   construction project.    While some bonding aay be appropriate to cover the risk
    to the Government associated with paid   ~bilization    coato and potentially
    hi&her reprocurement coats on HTW treatment technologies projects, lt aay
    appear excessive to require. that perfomance bondin& cover 100\ of the total
    contract amount where that includes the coat of the treatment technology
    service over a significant period of ti...     In the case of incineration
    projects, an incinerator is constructed by the contractor, operated over an
    extended period of time durin& the cleanup and demobilized and      ~ved   away
    afterwards.    Tbe Corps abould analyze, ln ita acquisition plan preparation,
    the possibility of the Government utilizinc the incinerator for continuing the
    cleanup in the event of contractor default.      The contract aay be modified to
    include teras for tbb contingency.     Many alternative contract structures aay
    be utilized.    Some specific alternatives are shown below in Table 4.     These
    are merely examples.    The contracting officer is within his discretion to
    require no bonding whatever where the project is predominantly for service.


                                         TABLE 4

                       Sample Alternative Contrast for tnsineration


      Phase            Erection &     Operation         Operation       DemobUi-
                       Prove Out      Excavation &      Incineration    zation of
                                      Stockpile         Site            plant and
                                                        Restoration.    equipment
                                                        Capping,
                                                        Landscaping
     Alt•l:
     Single            Full Bond      Very Lov Bond     Very Low Bond   Full Bond
     Construction
     Contract with
     Davis-Bacon
     Wage Rates
      Alt•2:
      Service          Full Bond      No Bond           No Bond         Full Bond
      Contract &
      Service
      Contract
      Rates




                                             50
eove~nt.    Thla ahould be done early in the acquleition proceae to eeaure
that the coapetltlon benefit• that aifht be gained by aucb effort can be fully
aaxlaized. The deciaion of whether to uae a aervice contract or a
conatrw:tlon contract auat be aada on their reapective aerita and not on the
tapacta of aecurlna perforaaoce bonding.    A aeparate aet of procedures ls
required to eatabllah the bondln& requlreaent.

    In aakln& thh bondin& detemlnation it 1a alao laportant to recognize
that the aurety co-..nity'a concern regardin& the rhk aaaociated with IITV
vork wlll probably lead to the aurety not ateppina forward to co.-plate the
project ln the event of a contractor default. Consequently, it la likely that
the Cove~nt will benefit only froa the aurety' a providing· the penal aWl of
the perforaance bond. The Govenwent probably wlll atlll need to reprocure
the work. Contractors pointed out that aureties vera requiring substantial
financial comaltaenta froa contractors as a prerequlaite to providing bonding.
Thia face would cend to aake the aurety even aore inclined co buy itaelf out
rather than asswae the greacer rhk burden aasoclaced vlth lu cakeover of the
defaulced contracc. The reality then appears to be that the perforaance bond
ia prlaarily proteccing the Govern.ent'a financial atake in che contract
rather than ita lncerest in noc having to deal with reprocureJHnC upon
defaulc.

    In looking at che character of work to be performed under an HTW contract,
lt aay well be that the nature of the work and the payaent arrangements
aaployed by the Government aay provide a aeasure of protection in themselves
that could warrant a lover bonding percentage.    In the excavation aituation,
and even .ore eo where we are dealing with incineration aervice work, aany of
the payaenta co the contraccor are aubject Co lea perfor.ing aacisfaccorily.
A default afcar partial perfotll&nCe raquirea thac the Governaenc procure
another contractor to ccmtinue perfotll&nCe. This defaulc sicuaclon, however,
la aubacantlally different froa that faced where we are dealing vlth a
bulldln& construction project.   In the foraer cue, the work to be c011plated
la relatively eaay to datet'lllne. Thla 1a ln aharp contraat to the problem
facing the Government where aultlple aubcontractors and co.-plex dealgn
requlreaenta .uat be deteralned and taken into consideration ln a vertical

                                       49
fro• other work that noraally would not require bondin& if contracted
independently.       The project ahould be divided into aeparata contract• with
appropriate bondin& for each contract. Thia would require the uae of aultiple
contract awarda to aeeure that ele.. ntl of work not requirina bonding are
procured aeparetely froa conatruction work ela .. nta.

     There ara dravbackl to aultiple contract&.            If the require..nt i1 eplit,
it   au~t   be detenlnad to be eeverable.       Probleu uy vall be encountered in
uaurina tlaaly award of contract&. A delay ln one award or a failure to
lnaure tlaely co.pletion of a contract will .. an delay for all later
contract&. Thi1 will require aubatantially increaeed a~lnietrative overai&ht
and procur...nt effort on the Government • 1 pert becauae of the greater uwaber
of awarda to be ude. Furthermore, the lack of bondln& on what . .y ba ltay
ale..nta of the reaedial action will require greater care by•the Covernaent ln
perforaing itl pre·award aurvey on the contractor'• raeponalblllty.

            c.   Prpvide Guidanet on Bonding Requircaenta.        Unifor. JUidanee need.
to be laaued on evaluatin& bondln& raquireaente appropriate for HTV work.                It
11 l.peratlve that my IUCh CUidance take lnto COn&ideration the lllportmce of
aafecuardlng the dlecretlon of the contractin& officer in auch .. ttera.

            d.   Clarify Perforgance Period.        Klniaize the tlae period of eurety
perforaance and thereby reduce the tlae expoeure for eurety coverage. Use
tlae-phaaed bondinJ, with increaental reduction in the penal amount through
tlae, a• the work ia coapleted: A alallar atrategy involve• the diviaion of
the·projact into phaaea and a requiraaent for bondin& only on the active part
of the project.


     The - = t of a bond can be reduced by aaparatin& the project into partl
and only requiring • bond for the -unt needed to cN~plete caach phue
••quentially. All bonda au~t be aacurad before iuuance of the notice to
proceed. Thb baa the .... effect .. raducin& the penal - t of the
bondinc. Thua, a bond vlll be rolled over, vlth the bond teninated on the
firat part when it 11 co.platad, and atartad on the aecoDd put, ate. Thh


                                               52
        b.   Require Increased Acquf•ltlon Planolns.   The contractin& proceaa,
including the bondin& issues, should be intearatad into a project acquisition
plan. An anelysle of the rhk trade offe to tha Gova~nt uy be
incorporated into the acquisition planning process for HTW projects.
Presently the Federal Government requires perforaance bonds to assure aaainst
the uncertainty of project non-perforaance on construction projects as
aandatad by the Miller Act.   The coat of this protection should approximate
the cost of the potential non-perforaance risk in the long run.    The trade
off• of this risk uy be exaained in the acquisition plannin& process for each
project. The process vill analyze the benefits and coats of the Government
aasuaing slightly higher risks in project performance and the resultant
benefits and coats of t.provina the co~etitive cllute for HTW contracting
and the coneequent reduction in contract prices. This uy involve the
analysis of each phase of the cleanup and the appropriate level of bondina
that would afford adequate protection for the Covernaent's interests and still
encouraae participation by the bondin& industry. Careful examination of the
contract alternatives, service contracts or construction contracts, should be
carried out by an interdisciplinary teaa, •recommending" to the contracting
officer, although final disposition will be ..de by the Department of Labor.
Meetinas are being planned for early summer 1990 between EPA, Corps and
Department of Labor representatives to clarify the classification of
construction and service contracts under the Davis-Bacon and Service contract
Acts.

   Cost type contracts should be given careful consideration where there are
sisnificant technological unknowns associated vith undertaking an HTW project.
It is not in the proar.. •s interest for the contractor to be required to bear
an inordinate share of the risk.   Requirina fixed priced contracts under such
conditions places both the contractor and surety in an unacceptable risk
condition and would iDCrease the coat to the aovera.ent significantly.

   Multiple contracts are another actlon vblch could be considered by the
Gove~nt      durin& its acquisition planning to liait the risk potential for the
boodin& c - i t y . The approach would be to structure the contract
require-nts so as to llait or lsolate the activity requiring a surety bond

                                        51
   Discussion with the surety industry reisea tvo apecific actiona which aay
result in encouraging greater surety fira involvement in HTW work.            The firat
action arises froa the aurety industry concern that it not be perceived as an
insurer of third party injuries as a result of the bond.          The surety
performance bond is intended as a guarantee of contractor performance of the
vork.     However, the bond fora does not aake any specific atateaent indicating
that the surety bond is not intended to provide coverage for third party
injury actiona vhich aiJht arise aa a reault of the contract work perforaed.
nte auraty industry repreaentativea have indicated that aoue atete-nt on the
performance bond fora noting apeclflcally that the bond b not available for
coverage of third party injury auita could iaprove the aecondary aarketa'
perception of the risk for HTW projects and thereby iaprove the willingness of
sureties to coae into the aarketplace and provide bonding for such work.


    The second action would clarify, within the invitation or solicitation
package, the tiae at which the performance bond coapletlon requireaents will
be seen to have been accoaplished.          For the construction projects, the bond is
available for· the execution period of non-HTW construction plus the warranty
period.        It also is available to cover latent defects which aay coae to light
following the end of the warranty period.          There is nothing unusual about an
HTW project that would require any different coverage period for its
performance bond.

          b.     pefine third party risk.    Define in the contract which party has
responsibility for specific risks.          Transfers of risk, usually to the
Governaent will probably be tested in tbe courts.          The governaent will aake
explicit that Performance Bonds are not available for third party coverage.
nth aay be addressed in tvo vays:
                 aodify the invitation or aolicitation package with a disclaimer.
                 This aolution can be lllpleaented by the procurina agency.
                 aodlfy the performance bond fora to include a dbclaiaer.       This
                 would require the approval of the General Services Administration
                 and a revision to the Federal Acquisition Regulation.




                                              54
plan vould place an ad8lniatrative burden on the project.     If additional flrme
participate, there ia a chance of reduced project coata.

   2.   Clarify Surety Liability.
        a.   Dosksroypd.   lntervieva conducted in the courae of the atudy vith
contractor• and auretiea focueed on the real concern in the aurety COIIIIIUI\ity·
re 1 arding the potential liability ariaing from their villingneaa to act as
prantora for H'IV projecu.      thla b cone latent vith the auretiea • atand that
they are bonding execution of plane and apeca, not project perforaance. thle
ia a perceived danger, not one baaed on any particular court ruling involving
a aurety suarantee situation. the perceived liability ariaea from potential
third party injury clalaa and an ill-defined bond coverage completion period.

    The surety's concern for liability reaulta froa the trend in case• arieing
froa the -nuaental asbeatoa litigations where the courte have aought aoae
deep pocket to coapeneate the injured party. In aoae cases, the courte hove
looked to insurance coapaniea for such rellef deapite the insurance indue try' a
dbclat.er of any llabllity under their pollcies. the aureties viev
theaaelvea as alailar to these altuatione, with potential deep pocketa from
which injured parties ..y aeek relief.    they recognize that they are not
insurers of ouch injury, but have little faith that the courts vill take note
of the diatinction between insurer and guarantor if there is no other
financially viable party against which a valid judgement can be executed.

    The aurety co-.unity, alailar to the insurance industry, uses a secondary
aarket to spread the risk associated vith any particular bond arrangement.
thia secondary aarket has aode it clear that it is not interested in sharing
the riak associated vith HTW projects. M a consequence, surety firms are
80 re and 80re being called upon to undertake &reater risk levels for ouch
vork.   The insurance incluotry reaponded to the loas of its secondary insurers
by withdrawing co.pletely froa the pollution liability coverage . .rket.     the
aurety lnc!uatry, althoUJh atlll aalntainlng a reduced presence, doea hove
certain -IIbera of lta c - l t y vbich hove followed the insurance incluotry
lead and choaen to vithdrav froa providing bond coverage for such vork.


                                         53
obtain adequate competition.         In fact, there is soae indication that the
desi&n and construction firaa perforaing this vork have structured theaaelves
to liait the potential financial burden that •i&ht be asaoeiated with clai..
aade against thea in the absence of governaent        inde~mification.   Once EPA has
defined clearly the extent of its indeanification coverage and the
requireaenta for obtaining it, the aurety induatry uy well decide to provide
bonding for EPA projecta.

    Regardless of the final decision on these issues, it ia vital that the
procedures for impleaentlng the indeaniflcatlon and for oaking claiu be
si.-pllfled aa auch u pouible.          At thh tlae, there 11 no written stateaent
of the procedure that will be followed if EPA receives a claia deaand notice
froa an lndeanified contractor.         Also it is iaportant that the extent of
litigation coats and the tiaing for payaent of such coats be defined. The
industry ia particularly concerned that litigation costa associated vith
injuries covered by indeanification not become a aajor drain on ita financial
assets.    The industry 11 concerned that it vill have to carry such costa over
long perioda of litigation and aay vell have to forego ita recovery fro• the
indemnification pool if a aettleaent ia reached prior to final juds-ent on the
case.     It vould seea advisable that the clai.. procedures include aoae early
decision by the Governaent vith respect to the Government taking over
 responsibility for defense or settlement of the claia.


          b.   fublish final indegnification guidelines.      In completing the
 indeanification guidelines EPA should consider the following.
               explicitly describe the llaita of coverage.
               define the claiu procedure including clalas for ongoing litigation
               coats.
               explicitly state under vbat conditions indeanification for surety
               firaa ls available.



          a.   lackcround.    It b    avldent froa the study that there 11 not a
 clear undentandlng -ng the aurety c-s.ey•s ae.tlen when advanced
 technolog h used on II'IV projects veraua vben conventional engineered
 construction 11 used.       Vblle there la no dispute that soae II'IV vorlt can be

                                              56
          c.     Surety Inde1111lfleat1on.   Another coneern that needt to be
clarified it the extent of indellllifieation, if any, that the turety would be
entitled to at a retult of providin& bondin& on the contraet. Indemnifieation
for reaedlal action contraetort perforain& HTW vork lt per.itted by 42 U.S.C.
9619, provided that certain requireaent• are .. t. Suretiet quettion the
applicability of thit lndeanlfieation to thea. Since it has a aajor lapeet on
the evaluation of the ritk for bondin& tueh vork, clarifieation it needed to
allow the induatry to adequately quantify itt potential lons·tera rltk.


          d.     Define bond cogpletion period,      The sovernaent vlll define the
point at vhieh bond coapletlon        requireaen~•   have been fulfilled.   This
definition b vlthln the authority of the procurln& •sene: let.


    aecently,       in reply to a turety't coneern over its right to indeanifieation
in the event       of a default of the bonded eontractor, EPA advised that the
1 urety would      be eli&ible for lndeanification if lt elected to stand in the
thoet of the       defaulted contractor and coaplete perforaanee of the remedial
aetion.        A final decition baa not been aade •• to bow thia vill apply to a
turety that elect• to take on retponslbility for perforaanee, but doe• to
through itt proeuring another eontrtctor. It it clear that this issue .vat be
clarified vith respect to the EPA tuperfund projects.

    3.    In4egnification Guidelines,
          a. Background. There is no defined llait of coverage in EPA's
lnterla !Uidance on indelll!ification.that can be addreaaed vith certainty by
turety or contractor interests in assesaing their potential risk. Likewise,
the requireaenta that vill need to be . . t to becoae eligible for the
indemnlfieation are not coapletely elear vith respeet to the contractor.              They
are even -re aablguoua resardin& the turety. These unknovns appear to
exaeerbate an already bad tituation and provide no incentive for industry to
.,ve forward and co-lt theuelvet and their utett to 1\lpport the prosru.


    It lt unclear froa the data coapiled ln the ttudy the effect that
clarification of thlt lttue vill have on the turety and contractor community.
DOD, vhlch hat not provided indemnification, for itt vork, bat been able to
                                              55
government could consider aore explicitly reduction of the contractors
llablllty as long as the perforaance specification continues to be aet.


      Where appropriate assume governmental responsibility for risk.      Consider
developing specific language that relieves the contractor of third party
liability when aeeting governmerit·dictated perforaance specifications.        Where
perforaence specifications are provided to the contractor, and the governaent
is solely responsible for the perforaance criteria selected, the government
-'lld accept responsibility for bara to the environment or third party
resulting froa the use of the perfonaance criteria.       An   exception to this is
where the contractor bad knowledge of deficiencies in the perforaance criteria
and failed to disclose such fact to the government.


          c.   letters of Credit.   Indications fro• the contractor community
received during the study were that allowing the use of letters of credit will
give new contractors and those with little experience a chance to get started
in the HTW field and build • track record.       The letter of credit is not
without its detrlaental aspects. They aay prove to be financially draining to
a contracting firm and limit a fira's ability to coapete, auch as surety bonds
cSo   in relation to the firas financial capacity.    Again, one aust veigh the
benefits of increased participation against the chances of problems due to
using less experienced firas.       To pursue the issue further the agencies should
explore the use of letters of credit in lieu of bonds by (1) reviewing the
acceptability of individual sureties' use of letters of credit as assets, and
(2) deteraining the feasibility and desirability of modifying the FAR to allow
letters of credit.


C. IZGISLATIVE CHANGES
   The path for change in the laws governing the hazardous and toxic waste
area 1s long and co.-plex.     However, SARA 1s due to be reauthorized in 1991, so
plana aay be aade for proposed chan&•• to the future legislation. The EPA is
the lead agency ln the Superfund. program and, thus, the agency to initiate
activity in the legislative area.       Posaible changes aainly apply to the
 indemnification question. They include the following:




                                           sa
hazardou. and coaplex, aany projacta usa proven •nainaering principle• which
have a lon& hiatory of use and acceptance. The extra.. caution on the part of
the auraty induatry, liaited number of projecta conatructed and reluctance of
auratiaa to bacoae involved in HtV projacta, all ...h together to cause the
aurety to aaauae each HTV project ia the aaae deapita the conaiderable
variation ln the typea of projecta. A number o( projecta are water aupply
conatruction alternatives that have no direct involveaent with hazardoua
vestee.

          b.   Outreaeh Prong.    To overco.. thh lack of undentandina, the EPA
and the Corp• co.uld aponaor outreach afforta alAed at brlnain& both auretiea
and contractors together for purposea of dbcusalna with industry technical
aapecta of different typea of HTV projects. The agenclea ahould also focus on
the different aite conditione and various contractual provhiona that can
diatinguiah one aite fro• another and the technical aapecta of using atate of
the art technology. While not eU.ainating all iapediaenta to aurety
involvement, this could go a long way toward lowering the aurety industry's
reticence to participate on aoae of the leas coaplex projects.

   5.     Llait Risk Potential.
          a.   lackgrownd.   Sureties expressed particular coneern that the
Government not paekage its procureaents, as design-build contrasts including
the use of performance apecifications.      In these cases, the surety is
concerned that its risks are significantly enlarged from the situation it
faces where design has been coapleted and the contractor need only construct
the deaigned project in order to satiafy perforaanee.

          b.   Clarifv Contract Policy.   The government ahould consider accepting
deaign reaponaibility where perforaance apecification requiraaenta have been
.. t. Perforaance apecificationa are used to aoae extend in all construction
contracta.      Incineration and ground water treae..nt contracta bave a very
large perforaance apeciflcat1on coaponent and will reaain that way. The
governaent will continue to allow contractora to propoae the coaplex equipaent
needed to . .et apecific aite treae.ent require. .nta. Once the contractor has
deJM>natrated that the aqulpaent ..eta the perforaance apecificatlon, the


                                          57
                                                                                          •
                            VI.    RECOHKENDATIONS
                                                                                          •

     Table 3 liata all options which have been considered as a result of the
study.    It represents in capsule for. the pros and cons associated with each
and provides an indication of the potential for increasing competition
associated with implementation of the option.        It also ahovs the specific
actions which are reco-nded to be taken by EPA and the Corps as a means of
increasing the availability of bonds for HTV vork.


A.   NON-LEGISlATIVE CHANGES
     1.   Issue Gyidanse go Uae of Acqui1ition Planning fpr     BTV.
     The 80&t affective atrategies for alleviating the scarcity in bonding of
the HTV program are those emphasizing improved acquisition planning, both
formal and informal, additional risk sharing guidance which gives emphasis to
the careful consideration of the bonding requirements, and contract type that
will maximize qualified contractor competition.        This particular alternative
permits immediate implementation by the agencies concerned.            It also places
the burden on the contracting officer to make appropriate decisions on aatters
which aay impact substantially the competitive climate for a particular
invitation or solicitation.       Each agency should have this guidance issued by
an appropriate office within their headquarters for        immediat~    implementation.


     The steps in the recommended acquisition planning process are as follows:
          a.   Determine appropriate vage rate categories for anticipated
required labor.
       b. Determine contract type, e.g., service, construction, etc.
          c.   Decide whether to subdivide the project into phases.
          d.   Decide on the appropriate performance bonding level based on a
risk analysis.     Explicitely consider leas than 100' bonding for construction
contracts and greater than zero for aervice contracts.
          e.   Decide on contract .ethod (consideration of coat type contracts in
addition· to fira fix~d price contracts).


     The guidance should emphasize that the Killer, Davis-Bacon or Service
contract act decisions aust be aade on their -rita without consideration of
coat or bonding factors involved.

                                           61
•

        1. Increaae ehe cover•&• for lnde.ntflcaelon. Expand eha typaa of
    cover•&• for llabllley lnde.nlflcaeton and aake theaa available eo ehe auraty
    •• well aa eha coneraceor.
       2. Eaeabllah a dollar cap on HTW llabllley.
       3. Preeape aeaee lava coverln& atrlct llablllty, and provide untveraal
    lndeanlty.
        4. Aaend CERCLA and/or Miller Act to epeclfy thee the purpoae of
    perforaance bond& la to •••ure the &overnaent thee the contractor will
    coaplete all contractual requlreaenta and obll&atlona. Perforaence bond&
    shall not be • vehicle for third party llablllty clalaa.




                                          59
                                                                                       •
      EPA and the Corps ahould jointly establish an   o~traach   prograa desisned to
dlacuss wlth the •~rety and conat~tlon induatry es to the nat~re of the HTW            •
proar... the realltles of the tecbnoloiY being eaployed on reaedial action
_projects and the contract cleu.e addressing risk. The joint working group,
lncludln& procurement and PARC representatives, would seek out proainent
lnduatry •embers and associations and urge that a dialogue be initiated on a
perlodlc beals to address specific concern. of the industry ste. . lng froa
bondln& particular types of HTV projects.

      5.   Llalt Biak PotiQtial.
      Each agency abould lamediately ls1ue guidance to as1i1t contracting
officer• ln aakln& their deci1iona on the aaount of rlsk for the government to
a••- ln the ls1uance of perforll&nce bonds. The guid&nce should emphasize
that perforaance apeciflcatlona and desian-build contracts should be used only
when nece1sary and solicitations sho~ld be clear on what responsibilities the
governaent assuaes for the technical criteria of the project. Additionally,
the contrectln& officer should be urged to ass~e that the contract be
at~~ed to reduce bonding requirements, Where the risk of non-perforaance

to the government is •iniaal Which can have a detriaental effect on
coapetition froa qualified firas. C~idance should emphasize protecting
governaents' interests. These inel~de ensuring that the contractor performs
as proaised arid all contractors, capable of performing. remain eligible. The
agencies should seek approval of a contract cla~e which will clearly indicate
that ln professional specifications the governaent ls responsible for
 establlshaent of the level of cleanup and the contractor ls responsible for
 the aethod and . .ans used to achieve this level.


     A Joint working group should be established between the Corps and EPA to
 better define the laplicationa associated with proposing a recoaaendation for
 a FAR revision to peralt the acceptance of letters of credit in lieu of a
 aurety bond.

 B.   UCISLATIVI CIIAKCES
      Jlec-nd EPA conalder propodna legillative changes for lndeanlficadon
 and third party llabillty.     Analysis of the c-nts received       ~ing   the
 co~••     of thls atudy indicates that laglslatlve changes ln these areas will
                                          63
•
•
       EPA and Corpa repreaentativea ahould aeet with       Depar~ent   of Labor to
    clarify the contract requireaenta of the HTV progr. . and the relationship of
    these to the:       Miller Act, Davia-Bacon Act and related regulations.


       A progr. . of continuing review of contract actions will insure continued
    competition in the contracting process.


        Eaphaaia ahould be placed on appropriate acquiaition plannin& which takes
    into conaideration all factor• that relate to the coapetitivenesa of the
    contract aituation.


        2.    Clarify Surety Liability Vader SARA.
        EPA ahould move iaaediately to clearly define the extent to which it vill
    provide indemnification coverage to aureties on HTW projects.        Extendin&
    inde.nification by the Federal government to aureties should be explored when
    they fulfill these surety obligations by stepping in and completing the
    project for the defaulting contractor.        Presently this area is not well
    defined.        EPA ahould also institute, in conjunction with the Corps, an effort
    to revise        the present FAR perforaance bond fora to deal with the concerns
    raised by sureties on potential for third party actions looking to the bond
    for injury judgement recovery.        A task force composed of appropriate personnel
    from both agencies ahould be established to work on having this revision
    instituted for HTW projects.        At the same time, each agency should require its
    internal procurement elements to assure that wording is included in
    invitations and solicitations disclaiming any interest by the Government in
    having the performance bond being available to cover third party injury
    claias.

        3.     Jpdegpifieatiop Guideline•.
        A    111v   indeJmification clause will be iaple-nted by the Corpa vbich vill
     asaure the inde.nification of HTV contractor• in the event that they are not
     able to aecure adequate inaurance for fira fixed price contracts.         1he
     indemnification will extend to third party liability by the aurety.

        4.     eg.punleation vitb Jnduatn.

                                                62
•

    substantially reduce ..ny of the concerns of the surety industry and
    contractor community in being involved vith Superfund remedial action vork.




                                           64
                                     ENDNOTES


1. FAC 84-12 January 20, 1986. Part 28, Bonds and Insurance •       Subpart
2J,203-1 and 28203·2.

2. Information paper on Davis-Bacon Act. Gregory Noonan, Ar.y Corpa of
Engineera. 1989.
3. Qaaha Diatrict Corpa of Engineers, Analyaia of Contract Bidding.       4th
quarter, 1989.
4. Teatlmony of Varren Diederich, Associated General Contractor• of America
to the Committee on Merchant Marine and Fisheries, U.S. Houae of
aepresentativea on the topic of Hazardous Waste Cleanup of Coaat Guard
Facilities, November 1, 1989.

5. Hazardous Vasta and the Surety.    American Bar Assn. VUUaa Ryan and
Robert Vright. November 1989.
6. Briefing on Pollution Insurance/Indemnification Issues for Engineera in
Hazardous Waste Cleanup. Hazardous Waste Action Coalition, Karsh and
McLennan. Washington, DC. September 1989.

1.   Briefing on Indemnification Issues.     Karsh and McLennan.

8. Hazardous Waste Action Coalition. Briefing on Pollution/Indemnification
Iasues for Engineers in Hazardous Waste Cleanup. Karsh and McLennan. Sept.
13, 1989.
9. EPA Indemnification under SARA S 119.        American Consulting Engineers
Council. Karch 1989.




                                        65
                                      IULIOCRAPKY


A!Hrlcan lrwurance Auociation.        lnforution Papeu.       June 1989.

Associated General Contractor• of ..._.rica.        Inforaation Papera.    Dece•ber
1989.
eo.preherwlve     Enviro~ental   Reaporwe, Co.pensation, and Liability Act, 1980
(CEB.Cl.A), US.
Hazardo\18 Vute Action Coalicion, ..._.rican Consultina Enaineeu Councll.
arlefin& on Pollution
t 08 urance/lnde.nification Iaauea For Enaineers In Hazardous Vaate Cleanup.
Marsh 6 J(cLenrwn. Septellber 13, 1989.
Hazardous Vute Action Coalition, ..._.rican Consultina £naineera Council.             EPA
Indeanlflcation Under SARA •119. Karch 1989.
Gibson, Jill. Inforaation papera.       Anay Corps of En&ineers, OCE, CEKP-RS,
December 1989.
Crace Environmental.      Information Papera.      Novellber 1989.
Killian, aerrwrd P.      Information Paper.       Illinois Environmental Protection
A&ency. Kay 1989.

11-nan, Creaory K.     Labor Standards and Environmental Restoration Projects.
Information Paper.     Ar.y Corps of Enaineers, OCE, CECC·L. 1989.
Ryan, Villi .. F., Jr. and Robert K. Wright. Hazardous Waste Liabilities and
the Surety. ..._erican lar Association.  Revised October 1989.
Surety Association of ..._erica.     Information Papers.      July 1989.

Tletenberg, To• H. "Indivisible Toxic Torts: The Econo•ics of Joint and
several Liability". In Land Econo•ics. Board of Regents of the University of
Wisconsin Syste•, 65 (4), November 1989. pp. 305-319.
u~.          "Industry Probes Effect of Dwindling Bond Market on Superfund
Cleanups•.     Inside EPA. Noveaber 10, 1989.

United State• General Accountin& Office. Contractor• Are lein& Too Liberally
IQdeanifled by the CoverMent. CAO/RCED-89-160. Septellber 1989.

Waldorf, Dan.      Ke•orandua.   A 6 A I.e search and DevelopMnt. October 1989.

Vatlln&. Edward T.      Information Paper.    Ar.y    Corps of Enaineeu, OCE, CEKP-R.
Deceaber 1989.
Whalen, "nl~ A. P. E. Perforaance and Pay.ent Bonde for Construction
Coatrects. Environmental Protection A&eney, Decellber 1989.


                                             67
·,




     APPENDICES




           69
    '
    :
        I,   ~

        i




:
•




      Appendix A:

    List of Contacts




          /


            71
               I
               I
                                                           !         I·, ,.. .,. ..

               '

                                            Orl•nheu~on
                    ···········---., .... __________________________________________ _
                          PhU Dealt~.,      zr Corp .
                         lfol"a4n ~~brtdae    Jon.. Cp, i   '                             .   '


               ,         Joeeph S•fthl ,      Joa.J S•tthi & Aaate,
               1          c'-"da lf\lett4!r   Loutn·uze -llht.
               j          JQea lf.l'on71      lferah 6 lfclenn..,


               I a.,..,. ....u, ......... , ..~•.,....., . ..••.
                        ·- .. ...... .... s.u. , •~..,,
               1           lfyre fobtn '      lfenh & lfcle'M.an
               '
               I•
                        ....._' ... J ...., ....................
                '' · Jt. V.aZiter 0 H Hetertat.l Corp :       '
                    l~ee •-...u l o • "'""•••I eo.,. lnc
               I• ' "'''" Hiller ... Pertand Em.. Tech. ..
t;                  "tchae.z ·QulM      ! lt!alt Sctel1<:e lntl. 111(:.
•'                             ~••ley
                     l)enilta Vtne -
                     Ja.ea
                                        1 S\lrety Au. olj "'-r.
                                          texea V.ater Co-..
                     '   £·.   Schutt     Sf.t. Crece/Crec!:e Env.



               I

               ~.
                                                                                                               .....
                                                                                                       .   -

               I

               i:
               I
               '
               I

                                                                                                  .,I •
                                                                                                                                                                                     j
                                                                                                                                                                                 j
                                                                                                                                                                             j
                                                                                                  .,
                                                                                                                         .
                                                                                                                       " '
                                                                                                                                                                         j
                                                                                                                                                                     j
                                                                                                                                                                 j
                                                                                                                                                             j
                                                                                                                                                         j
                                                                                                                                                     j
                                                                                                                                                 j
                                                                                                                                             j
                                                                                                                                         j
                                                                                                                                     j
                                                                                                                                 j
                                                                                                                             j

L:·-   •I ..   1;,                                                                    /
'
"
•
                          APPEifDlX A
                    H'I\1 BONDING STUDY
                     List of Contacts
    •···•························•····················•·····
            Na~~e               Oraanlzation                        Addre ..
    ····················································································
         .John     Staller      Ill. Dept land Pollution ctrl        Springfield      IL
         Lynn      Schubert    American Ins. Assn                    Washington       DC
        Irian      Deery       Assn. Cenl. Contr/Amer                Washington       DC
       Sc:uart    lin.ttock    Assn. Cenl. Contr/Amer.               Washington       DC
         Dave     .Johnson     Assn. Cenl. Contr/Amer.               Washington       DC
         .Jack    Mahon        CECC-C    OCE                         Washin&ton       DC
         Cre&     Noonan       CECC-C    OCE                         Washington       DC
        Chuck     Schroer      CDO'-C OCE                            Washington       DC
       Walter     Nor'ko       CEKP-CP OCE                           Washington       DC
         Sara     lunch        CEKP-IlS OCE                          Washington       DC
           .Ji•   Gibson       CEKP-IlS OCE                          Washington       DC
         Paul     Lancer       CEHP-IlS OCE                          Washington       DC
         Noel     Urban        CEKP-IlS OCE                          Washington       DC
         Cene     Jones        CEHilD-CT                             Omaha            NE
        Bruce     Anderson     CEHilD·OC                             Omaha            NE
         Nor.     Spero        CEHilD-OC                             Omaha            NE
       August     Spallo       CEHRK-OC                              Kansas    City   MO
         .Joan    Olap•an      CEHRK-CT                              Kans ..   City   MO
       Steven     Switzer      CEHRK-CT-K                            Kansas    City   MO
        Franlt    Iader        CEHRK·ED-T                            Kansas    City   MO
           Lee    Fuerst       CEHRK-ED-T                            Kansas    City   MO
       Donald     Robinson     CEHR.O-CT                             Omaha            NE
        Cathy     Vanetta      CEHR.O-CT                             Omaha            NE
         Kirk     Willius      CEHR.O·CT                             Omaha            NE
      Stanley     Karlock      CEHR.O-ED-E                           Omaha            NE
         Cary     Henninger    CEHR.O-OC                             Kansas City      Ko
           Ann    Wright       CEHR.O·OC                             Omaha            NE
         Rick     Heinz        CEORD-RS                              Cincinatti       OH
         Mary     Melhorn      CEPR·ZA                               Washington       DC
       George     Wischlaen    CEPll·ZA                              Washington       DC
      Richard     Corrigan     CH2K Hill                             Vashinton        DC
            S.    McCallie     CH2K Hill                             Denver           CO
           Ji•    lAne         Corroon & lllack                      tudison          WI
        Peter     Bond         Davy Corp                             San Francisco    CA
         Ki'ke    Yates        Ebasco Constr. Inc.                   Lyndhurst        NJ
      wnu ...     Jodie        Environmental Ius. Assn.              Washington       DC
         Paul     Nadeau       EPA      HQ                           Washington       DC
          To•     Whalen       EPA      HQ                           Washington       DC
         Carl     Edlund       EPA I.e& Off 6 (Dallas)               Dallas           TX
          To•     Bosley       Fidelity & Deposit Co.                laltt.ore        KD
         John     Herguth      Foster Wheeler Corp.                  Clinton          NJ
        Terra     Belt         Hazardous Vasta Action Co             Washington       DC
          .Joe    Turner       Huntington Dist .                     Huntlnaton       wv
         John     Daniel       IT Corp                               Vashington       DC




                                                     73
             .,..... -        I'OUII      ......,
                                                             1lff1DAVIT Of                         SUIITT
                                                                     rs..-....- .... _,

                                                                      .

                                             tTn-,   ,._,1

                                                                                                                                          J .,:
                                                                                     4 . ..,.,.. Of   IMI\0"' tlf   wl(-...,.. • .... I


             •-.          I   .tiDDIDS                                               . . . . . . . . . 11110:




                   ...
                   &- fcrir ""lue of oolely owned recll estate •


                   .. All mottgoges or other encvmbtances Oft the reGI estate inclvded in Line a
                   '- a.a1 estate equity (subtract Line b from Line al


                   ·-
                      foir wolve of al 110lely owned Pr-'Y othet than r..,l estote•
                      Total of the amollt'lls on Line• :c and d
                   ~. AI ather &abiliNI1 a~ or incvtred not inclvded in Line b
                   S· Net watth (wbtract Line f from Line •I

                    •Dt        afl
                         , , if .., •
                                     iatlaM . , . , a,.JH frw• IDt•l'io• •rul s.U f•r
                                         en-,1.
                                                                                        -••1 ,....,...
             I.




             ..........

                                                                   ·SIGHATU.




                                                                                77



,, -•   !•
.




    Append.ix B:

    Sample Forms




         75
                                                                                                               0 INOIYinuAL 0
                                                                                                               0 JOINT YINT\1111 0
                                                                                                                                            -·
                                                                                                                                          'AIITNI"SHI'
                                                                                                                                          COII"'OIATI()N'-




OBLIGATION:
-         tiW Princillll ..., s....tvlioll . . firmly IIOuiiCI to Ole Unit.:l   s - of America lhoAinafwr cal lid 1M Gcwwntnllltl in ~~~~- .....
.,;._ For DW"*'t of ttw .,..... .,.,., -bind ~.our heir\. ••ea.oton, .cltftinisnun. n • ....._,, jointtv n - . l l v . -
""""" ttw Sumia . . _,.tiofts ~Clint •. co..,,.~                    .....
                                                                !f'e Surlti•. bind _ . . _ in aiCII ...., "joinlly n -.llv" • wetl .i
"~lv" on1v fat tiW Cturllllti_Of lllawtft91JCllftt ICtlon or ICtiOftS l',lllnst""' or 111 of .... For 111 oilier--· ue11 ~ biftcls illltf.
joindv .,_, - * l v .Msn Ole PrinciPII. fat Ole P~"*'' of Ole .,m sn..- OPOOSita sne ,.,.. olllll Sutetv. If no limit of lilbilitv is i..:li·
c:a,.,, tiW limit allilllilitv ish full _ , of 1M.,..... .,.,.,
CONDITIONS:
Tlw Princil)lll ... Slbmitt8d tfle bid idlfttifood - ·
THEREFORE;
n. -        obli!lltiOn it .aid if tiW Princillll .- 111 \100ft ICQIItaftCI by "" Go_.,.,t of 1111 bid identified eo.. . .Mtl'lin till i>Wiocl 1110ti·
fi.cl tNrein fat oa:aC>- (SIXtY (601 d8yt of no lllftoel OS ICICCI.fi.cll, IXICU"'" lfll funMr COftnc:IIIIJ dOal,_,. .nd giws tm bcncl(slre-
                                                                     "'"'*
quired bv tfle wms of sne bid • - t l < l witl'lon ""ome SI>ICifiC ,,... 1101 cliVI if ftO I>Wiocl it llllcifoodl ,,_ rwctiPl of till fQrms ~ "''
pnnci081: or lbl in "" ...,, of ,..lure oo to execute aldl
cast of llf'OO,Ifing,.. wor1t wllicllu.-s till 1m001nt of"" bid.
                                                                         con~ ~~~ n g;.e a.c:11 bo..:ls. llil'tS 1111                a.,..,,.,.,,
                                                                                                                                             to-

Eldl s..r.tv executing snis instrUment -        tl'llt itS .obligation is not impaoriCI by lftV ••-onlil of till time far _,..,.,.of ll'ol o.:
,.., , . Princi081 tniY grant to till        G_,,.,.,,_
                                                      Not1C8 to tile sunnvliesl of ••tensionlsl n .,....,, -·-~of till notoCIIOOiies
onJv to extwnsions 199.-;aong not rnora tl'llft sixtY (601 c:alend¥ .S.Vs in ICiditoon ID till e>e<ioel ongiftiiiY II lowed far axeotana of .,. bod

WITNESS.
nw Principal.,_, Suretvliesl uecutiCI           tllis bid bo..:llftd 1ffiaed tNir -Is on tile llbOoe dltl .

                                                                                  ..
                                                                         -
                      1.




          -.J.
        sqw-111
                                                                                                                                 ,_,       Corporatt
                      L                                                           ••                                                         Sftl
          ToCIOW
          "'-'

        s.w-.        r                                              INOIYIOUAI. IUIIntll




          -·
          -
                                                                   CO~TliUIIIT'IIIISI

                                                                                                              jo;-'"''"' uMcT
                                                                                  ...
          --
                                                                                          Js "'"'"" '""'·
    ,.
    fC
    ...               ••                                                                                                                    Corpo#flt~

    "'
    c
    i
          -·
           To-
           rr..-.
                      1.


                                                                            2 .. 1Cts
                                                                                79
                                                                                  iZ.
                                                                                                                                 .

                                                                                                                         STANDAIIO POIIM 2•1••
                                                                                                                         ,...._,._..,GSA
                                                                                                                                                Scol



                                                                                                                         ,-aA ,.,. CJI'• SJ.221can
                                                                                                                                                       -
                                                                                                                                                       ...,
                                            tUTifiCATl Of SUffKIOIC'f
     1 Hereby Ccrcify. Thee the tuncy named hcrc•n it peuonall)' knt••ft co .w; that. en •r iudlllll'ftt, u 1d turfty 11
responsible. and qualified co .n 11 such; and char. co chc betc uf mr kno-tcdat. che facu scaccd by •••d '"''"' •• ctw
fonaoi"l eAdnic .,. true.
,...... t T PI'#•.,.,,. I                                   l"""""*
                                                            I




                                                     INSTIUalONS

   1. This form shall be used whenever sureties on                nent resident of the place of eaeculion of the controct
bonds 1o be executed in connection with Go,.,..ment               ond bond.
controctl are incliYicluol sureties, as provided in gov·
eming regulations('" .tl Cfii:.I0.203, 1-16.801,                     4. The indiviclual surety ahoft show net worth in o
101~.3). There shall be no deviation hom this form                sum not less than the penolty of the bond by supply·
except as so outhotized       !•••   41 Cfl 1-1.009,              ing the information required on the foe• hereof,
                                                                  under oath before a United States commissiOftef, a
101-1.110).
                                                                  clerk of o United States Court, or ftotory public, or
    2. A corporation. portnenhip, 01 other buaine11               some other oflicer having authority to odminislef ooths
 atiOCiation or firm, as auch, will not be occepted as a          generally. If the oflicer hos on oflicial seal, it shall
 surety, ftor will o partner be accepted as o surety for          be off"taed, otherwise the proper certificate as to his
 co-partners or for a firm of which he is o member.               official charocter shall be fumished.
 Stockholden of o corporate principal may be occcepted
 01 suretiet provided their qualifications os such ore               S. The certificate of sufficiency shall be signed by
 independent of their stockholding• therein. In orriv·            on officer of a bonk or trust company, o judge or
 ing ot the net worth figure in Item 7 on the foce of             clerk of o court of record, o United States district ot·
 this aflidovit on individual surety will not include any         torney or commiuioner, a postmaster, o colledor or
 financial interest he moy have ift the auets of the              dep"'ty collector of internal revenue, or any other of-
 principal on the bond which this off"tdovit suppcwn.             ~cer of the United States acceptable to the deport·
                                                                  ment or establishment concemec:l. further certificates
    3. An individual surety shall be o citizen of the             showing additional assets, or a new sUfety, rnoy be
  United States, eacept that if the contract and bond             required to ouvre protection of the Government's
 are ea:ecvted in any foreign country, the Common·                interest.    s..,chcertificates "'"''' be bated on the
 wealth of 'uetto lico, the Virgin Islands, the Conal             persoftCII investigation of the certifying officer ot the
 Zone, Gvam, or any other ..rritory or posseaaion of              hme of the 111oking thereof, and not upon prior
 the Uniled Stoles, such surety Med only be a permo·              certilicotiOfts.




                                 U.S. GOVEIIOIDIT PRDITDIC :lFFlCE        1984 0 ... U7-J07


                                                             78
                                                                                                                                  ........ - ..... _
             ,,_,   ___.     __ --
                              ............
                                PERFORMANCE BOND
                                                                                               ~::.r:,::..,




                                                                                                0
                                                                                                   >&.,.. ., •   .._,.,.n.,.. '" _,
                                                                                                         IHI)IIIIOUAL
                                                                                                                                                    .

                                                                                                                                                                 -·
                                                                                                                                             0 '""'""'-''
                                   ".
                                                                                                0        JOINT IIINTUIIl                     0     COIII'Oif&




-~-      ...... .,._,..   ----·                                                                iSTAnOO'I



                                                                                               ~




                                                                                                .
                                                                                                 .....,_...
                                                                                                 ~            '(lj
                                                                                                                     ....... L-01'10010


                                                                                                                     ·Ta   ~~
                                                                                                                                         -
                                                                                                                                ..............            lu"n

08L.IGATION:
- · u.. Princi!*   ond Sumvfilll ... fonnly bound 111 IN Uni1811 Staca or """'iQ c-.rw Cllled IN
...,.. For c-wnwot ol IN CIINI ...,., __ llincl ~. 0111            '*"·U-tor&.ICimonisntor&. n •
                                                                                                                            c_-n...,,,,
                                                                                                                              ill , . -
                                                                                                                "· J01ftlly n -tv. - · .
                                                                                                                                            .,.,.,


---1y·
-        IN $uletia ... --~~ ICII"' a
             anlv lor .,. -
                                                   =----·      we.... Sontie. bind ~ '" ..ell ..... -JO'"IIy ..., _tv .. a - · IS
                                  of llloooiftt 1 joint Ktian or ICtions IQalnrtlftV ar 111 or .... Far 111 o - - · llldl Sumv -            •aott.
joifttiY .., _ . l y widl .,. P'rio dpJ'. lat IN IIW"*'t of .,. .., -            0111101i111 "" ,..... olIN Sumv. If no fim11 or liatlihrv os one!•·
~. IN limit of liD~ tv it IN 11.11 - · o f INI)INI ......

OONOITIONS:
The Princillll .... .,..., into ... mt~tnel idonti'*l -
THEREFORE:
The -        oblitnian is .oid if IN PrinciPII -
   181111 Pwfotms ond l\llfillo Ill IN ..,.,.,. . . . CDMNn1t. uorms. c:onditions. -       .,.. wmona of IN =ntnct duMt 1111 ori9iNI wm of
u.. c:anmoct lftd   ..., ...- - . o f t11a1 . . grwt!M bv IN c;....,,_,, wiltl or wiiNiut nociC8 ID 1111 Sr.nrvtiesl.- c1unng"'" o.te
of lftV ~ry NQUiriCI -
......                            IN _=ntnet. lnd 121 -'""" -
of .,., . . , 111 duty .,ltiOnmd modoficaliOIII of ""

   fbi ....... 1D .... Ci~IIN IIIII         -t
                                                           concr-a
                                                                    flllfills Ill lt>e unGonat>IIIS• .,...,..,,., - c:ondilions. lnd ...._....,,.
                                                              11\at -her . . lftiCie. Notoat of , _ rnoclofiati0111 ID IN Sr.nrvt


                                                of .... aox• i~ bv IN c;.,.....,_l, illtot aid mt~tnct is ..Ujoct to 1111 Mille\" Act
                                                                                                                                               re


1«1 U.S.C. 270.27011. ...,icll . . callee!ICI, ~. ar wiltllleld from wago~~ paid bv IN PrinciPII in ...,;ng out 1l'le canstn~Ctoon con·
1nC1 wilt\ ~ 1D ...,icll dlotl:land ot film,_..,.

WITNESS.
n.. Princillll lftd SutwtvliaJ auo::utiCI ltlis -'ormlfteal:land lftd aHiud tl'lelr - • • on tne- data .

                    ••                                                       ••
  ~
                                                                     ,...,                                                                ,....,
     -·
                                                                                                                                                    Corporau
                    i•·                                                      jl.                                                                       Sft1

     ,.,_
     TIMbl
                                                      ..




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     ,.,_ 1:                                                                       -I:                                                                          rs-J>




   -·
   -                                                                                                                            ...
                                                              CDIUOMTI.,IIIT'I'IIUI

                                                                                     r     : 0#'......     I~UTVU                     T
 c
     ......... ..                                                             a.                                                                    Corporat~


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                                                                         81
                                                                                                                                                                  -
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            --
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            -·
                                                               COit'<ltiA Tl IUitiTYUIII
                                                                                               rTATil 0" lfiiC.       ,~ .... ILl       t..IMIT


    .
    •
    ..
    ~     St9f'\8turwfll
                           I.
                                                                                     "·                                                                              Corporol'
                                                                                                                                                                       s,ol
    ~     Neml(t16         I.                                                        ••
            ,.,..,,..,
             T;r~eCtJ


            ........
            ..........
                                                                                               l'TATII. 0 ... I..C.   l~Aelt..ITV I..IMIT

    .
    u
    ..~
    ~
          S.tnetyrwlsl
                           I.                                                        ••                                                                              Corporal'
                                                                                                                                                                       s,o/
           ~tsJ6
             Tit.. tsl
                           I.                                                        ••
            rr.,,.d,

    ..
    ..
    0
    ~
       -·
       -  $egNture(ll
                           I.                                                        • •
                                                                                               rTATE 0" INC.          ~~Aett..tTV I..IMI


                                                                                                                                                                     Corporal'
                                                                                                                                                                        ~ol
    J      -Ill&           I.                                                        ••

    .. --
            TirleCsl



    . -·
            n'>-1
                                                                                               Isun o•        INC.    ~~AeiLIT           LIMIT




    .. _,,,.
    ~



    I
          Signotu,.lll
                           I.                                                        ••
                                                                                     '·
                                                                                                                                                                     Corpora"
                                                                                                                                                                        ~ol


•             Titlllfsl
             ,.,..,,..dJ
                           ••
                                                                                                                      I
    .. -·
       -                                                                                       \"TATE o• INC.          ~A81LITY LIMIT

    ...
    ...
    ~     ~turlltl
                               I.                                                     ••                                                                             Corporolt
                                                                                                                                                                         ~ol
    ~                      I.
           -lsi_&
             rr.,,..,
            T•t1e(sl
                                                                                     I'"
    . -·     ...........
                                                                                               'STATE Q(lr lfittC.    I~··•L.iT'"i'L.IMIT

    c                                                                                                                                                         I
                               I.                                                     ••                                                                             Corporate
    ...
    ~     $.9naturelsl
                                                                                                                                                                       Stal
    . rr.-·
    !      ~tsJ&
              Titlelsl     i
                               1.

                                                                                     I'"                                                                     1
                                                                            INSTRuCTIONS



    1 Tl·us torm •s aumonzed for use         ~hen   a b•d   ~ll'antv   •s reawred.         '" me scac.es lSvretv A, Surety 8. etc) heaaed ·c.J;...Pc,.:.:. -:
    Anv devtat•on from tn•s form will reQ~o.ure the wr.tten aoproval of                    SURETVIIESI"". In tne space des1gnated ··suRETv"ES· ;r ·-~
    tf\e Adm'"•strator of General Serv•ces.                                                face of the form. •nsert only the letter •dent•f•cat.~Jn ._,; :-e ;~·~: ~~

    2. Insert tne full tegal name and business address of the Pt~nc•oat ,,                      lb1 Where •nd•v•dual sureties are .nvolved, two !)r .,ere ·~s=·=''"
    the wace ces•gt"ated ··Princapal'' on the face .Jf !'h~ form A.r'l                     s•blt persons Shall execute tht: bond. A comoletea .l'· Ja, ·. : ·
    ..,thorized person snail sign the bonc:t. Any pe:rs'jt'l s•gntng '"a reo·              lr"'diVIdoJal Suretv (Standard Form 28L for each ondPIIOwdl 51..~~~·.
    resentative caoacitv (e.g .. .., attomev·in·fKtl .,...ust furntsh ev•·                 shall Ktomoanv the bond. The Go'lef'nment ror.av '"tQv•rt ~"'esc
    dena of authontv if that representat•ve •s not a "''mber of tne                        suret•es to furn•sn ldd&tional substant•at•ng tnforf'Pllt•on con~.:"~- "'!;
    firm. 01 nnerstup, or toint venture. or an ott•cer of the corpora·                     their financ•al caoab•htv
     t•on rnvotved.
                                                                                           S. Coroorattons eaecuting the bond sl'\all 1ff•x tne~r ~urt.:.:ra!f'
     3. The bond mav express penal sum a a r.ercontage of the b1d                          seats lndu,tdu.IIS sn111 e.eOJtt the bond QOOOSltl tne ~0'~ (. .:r: :>·
     prtc:e. In tnese cases. rhe bond ,...y state I ,..•~···· ....m dullar hmrti·          rate Sui". ¥\d il\111 1ff1• an a1heslvt . ., ,t e"'e..: ... :eo .n •.•.;.~
     ttOn ce.g .. 2()% of thl bid price but the amount not to exceed                       New H1mosntre. or ltlnY other junsdic:t•on reQu•r•ng acl!\fS··~e wa·s
     ----dollars I
                                                                                           5 Type the """' and title of eac:h                Qer$0n    Stgn.ng tf'I•S ouno        ~ ~ ... oe'
     •· (al Corporations executing the bond IS sur.e··~ ..-:ust iDC'tar on                 scace orov•ded.
     the Qepanment of me Treasury's list of apuro~oeo suret•es and
     must «t w•th•n the limitation tisted here•n Where more tnan one                        1 In •ts aoohcat•on to negotiated contracts. t"'e ter-s :·d·· :Jnc
     .:oroorate suretv is involved. their names .,d addresses shill apeqr                  ""b~der""   shall 1ncludo ··proposal"" ...:1 ··offeror"".

                                                                                      80
                                                                                                                                    ITANOAAO ~- 2ol aACI.                    fA[Y &·Ul
                                                                                                                            e   V.I . . ._        ... _ , . . Off-   , •• ~ ... , l•l•ftMJ
                                                                                                                                       ~:,:':.:.~&.,;V, •v fill WI .. ••• •• ....,. ...,. . -
                                                     PAYMENT BOND
                                                    ,_ ,,.fi'W....... .,. ,...,..,
••INCI~AL I&Aiel            ,..M. eA4 ....ifWII ....... ,                                                                             1••,.. o•      o~"""'•AnoN      , .. A·   ....,             '
                                                                                                                                                                                                        .
                                                                                                                                        0        IN0~V10UAl                      0      ~AAT~EIIIIS.,.tP

                                                                                                                                        0        J()I,_.T VENTUA!:               0      COOI"'A             ...
                                                                                                                                        "~'""'• oNCO~P<>•A OON


~·IITVCt&SI          f,"'ie..-•tu .,. ......,,..._ . , .. ,. .. , •• ,
                                                                                                                                                           Jf"AL SUM OF IONO
                                                                                                                                       MILLI~(SI          I TMOUSANOIII     MVNO~~gCal           ;CC .. 'r!


                                                                                                                                       fONTOACT OAT•            CONTOAC         NO.




OBLIGATION

we.    the Princ•DII ¥1d Suretvhesl. ll"t firmly bound to tne Un•ted States ot Amer•a (hefetnafter called the Government) '" t"'e abOve ~q
sum. For pavment of ~ penal sum. we b•nct ourselves . .Jur he•rs. executors. Jidm•n•strators.n successors. to•ntly lnd S!VerJIIv ... owe·~·
where the Suret•es are coroorat•ons acr•~ as co-suret•es. vwe. t.,e Suret•ts. bind ourselves in such sum ''to•ntlv and severauv·· •                                                                   *!'    :

··.-.,erally" ontv fOf the purDQSe oi atlow.ng a to•nt act•o" or act•ons agau.,st anv or all of us FC)f' all other purooses. eacn S..,retv D•nds                                                       •:Je ·
,o1ntty and severally Wtlh the Pnnc•oal. for rhe oavMent Of the sum shown oooos•te 1~ ~me of the Suretv If no In'""• I of l.. bthtv rs •":
ated. the limtt of liability is tl'\e full .,-,ount of tne oena1 surr


CONDITIONS

The 1100ve obhgat•on tS votd tf the Prrnc•cai =r:r.,O!•·.                        ·-a«.~s      Ud\'-tf\1 !U an          ~~r~ns      na .... ng a drrec relatronshro wrtn lF"re P~.nc,ca. :·a i_:
contractor of the Pflnc•oal for turn,stung :ao::Jr                        ···ate~    a·   ~, :c~ ...   ·n      :~e ::r:.se-:~.t.vr. ~~ :"'~       NO'k: orov•deo tor '" the :ontrac ~
~ve. and anv iuthOfrlt!O ~OCirfiCiteOns Oft"''~ .::ont~3l! :~·-61 S...oCS":''HJ!II"!IV                                a'!                                                        S ... rt:.
                                                                                                                             ,...·dOe '~O~ ":! ~t fi10Se I'I'ICXIrfrCitrOf'S !0 the                   ·~~   ;·



WITNESS




     $orgNit~tsl
                       ,.                                                                       'RINCI,AL
                                                                                                    ,2



-------------r,---------------------------------------C~~.,--------------------------------------·~·~·~~·,·
                                                                                              1$4-o/ 1 '
                                                                                                                                                                                          Corporate
      ~bl&             !'                                    ••                                        '
                                                                                                                                                                                            s~a/
                                                                                                       '
       Totletsl
       n . . ,.,                                                                                       I
                                                                                     INDIVIOUAL SURITYUISI

     Sqt.aruretsl
                         1.
                                                                                                                       ••
                                                                                                                       I
                                                                                                                       ...
                                                                                                                tSuh r
                         1.
       (f'.,,.,,
       ftqlrfttbl




         -·
                                                                                     CORI'OIIATE SUIIETYIIISI
                                                                                                                         ST.-Tit. QIJ' tflriC.      Ll-· LITY LIMIT


 ,.
 c
         .........       1.                                                                              ..'
                                                                                                                                                   Is
                                                                                                                                                                                          Corporalt
 ~
 •
       Signature hi
                                                                                                       '                                                                                       s~a/
 c     ...,.Cillo        1.                                                                            '•••
 i
 -
         ~~·J
      7fo10.01-IIJ...aot t
 . . EVIOUS lOITIOff USA8t.l
                                                                                                       I
                                                                                                                                                             STANOA.IIO FOAM ZS.A
                                                                                                                                                             ll'Petct~o.G OY GSA
                                                                                                                                                                                             tAE:v
                                                                                                                                                                                                        -
                                                                                                                                                                                                        lD-Il
                                                                                                                                                             IJ'AR t•l CIJ'A U.UICCI1
              APPENDIX l

Sum_., Table o1 Slate Law Relnanl 10 RACa
  -·
                                                                  CO,_POIItAfiiUIItiTYIIIII tC.'"'AV«<I

..
 '       .....,,...                                                                                                  I"'"'".,.. ....,.            ll..tAeiL.ITV t..t... IT

                                                                                                                                                    s .
..
•
"!
       S•""''"'relsl
       ,..,..,...,,,.
                             l.                                                                         ••                                                                                     Corpof'Oit
                                                                                                                                                                                                  ~al



  . _.
         Tot .. III
                             l.                                                                         ••
         IT, ..~,
                                                                                                                     !STATE: Qfl' INC.            •I..IAett..tTV t..IMI--,.-
                         I                                                                                                                        Is
.
         &da•ou

..
u
       s..,.turelsl
                             l.
                                                                                                        (                                                                                      Corpora It
                                                                                                                                                                                                  ~a I
a  .........,,,.             I.
                                                                                                        (

     --
     -·                                                                                                                                           I ........
         Ti!:!:,',
         tT      I
                                                                                                                     iSTA1'-. Ofl' INC.             ~          TV \.1M IT


..
Q

       s.tNtutettl
                             ••                                                                         !•                                                                                     Corporalt
                                                                                                                                                                                                  ~al
 a      ........ 1116        l.
                                                                                                            ••

.... -
          TiNitl



     -·
         tf"rl'lf41
                                                                                                                     'STAT£ OF' INC.               ~~A81\.ITV LIMIT




 ..
a:
 :>
       $t9Nturwtsl
                             I.


                             l.
                                                                                                        (                                                                                      Corporalt
                                                                                                                                                                                                  ~al
        N.,....hl&
         (f',,..,,
         Totleltl                                                                                       (
... -·
                                                                                                                     I
,.
     .........                                                                                                        .
                                                                                                                          STATE OF' INC.           IL.IA81L.ITV LIMIT

                                                                                                                                                      $

 .
 ..
 0:
 :>
       S•9f\IIU"' Is I

        ~tsl&
                             ••                                                                         •
                                                                                                        i

                                                                                                        •2 .
                                                                                                            ••                                                                                 Corpora It
                                                                                                                                                                                                   s~al

          T •ttf'lsl
          IT',_,,        I'"                                                                            '
          :-..~&
                                                                                                                      .STAT[ OF' tf'IIC.          T~IAIIILITV LIMi'f

 ,..
 ~
          Aoorns         I                                                                                  ..
                                                                                                                      I
                             I.                                                                                                                                                           '    Corpora It
                                                                                                                                                                                                 Stal
                                                                                                            2




       Th•S tor"'            tor tne t'rotect10n of uersons St.::-(llv1ng tabor             a"'~CI               ·~ !r"€ ~=·a~·~s      ·s . . r~: •    .:. Svretv B. etc    1 headed ·cc=:;~·:=.:. -:
•"'~ater.at.    •S ...,sed wncon a :;av,..,ent bond 1S reau•reo .. noer tl'le A;_:                               SuPE-:-v,,:_s.            1,..   !r"E'   so.:ace desagnateo ·suFIETYliES·· y· :""":
of Auqust 24. 1935. 49 S:at 793 (40 USC 270 a-270.• Aov                                                          face o• .. "': '. •··      ··~r: ·:::>n1·,   tne   let~er   •dent1f•cat•0n ct tr-t: ~ •. ·~· ·:.
:1ev•at•Qn from !'"'IS tor·:"' w•ll reQlt~re th~ wrctten at•rroval '.Jf t'"'~
Aam.r,.snator ot General Serv•ces                                                                                    :ot    ::~•e      "-=·-.··~··•• ~~..ret·~s  are onvolved. two ur ..,..0''!' •o?s:: -~
                                                                                                                 S•Oie  uersc..,..s sroa;; ~.:ecute           the oond A coMOit>tt><.J Att.o,h · • •
2. Insert r.-.e full legal name and bus.nes.s ado, .. ~~ -:.·        ""f' ;~.,,.,,.:.,a,       •n                tnd•v•d ... al s. .
                                                                                                                                   re~v I Stanoaro            Form 281' tor each .ndovu1uat sur.:.·.
the soace ctes•gnated "Pt~nctpal" on the ·~·- ·' :'"'t!' tQrl"l .:.n                                             snatt dC:o-,!"::'a"v t"'~ ound                The Government ·nay r~.nrr ~ ... -:s.-
-..thor•zed person shall s•gn the bOnd A·· : "'"'.V"' S•CJ"'•"CI .n a                                            s-..ret•~ to h,.rnosn aod•t•onat             substantrattng .ntormat•on .'(,f'lr .. • " · " :
r~ore-sentattve caoac•tv te g . art attornev ,,.. •<oJ· ···~..st • .• rn•sh ev•·                                 the,r f•nanc·•' :ao..at:•l•tv
dence of authonrv ,t rnat reoresenti:ltiYe -~ ··        j ...., .. ·oer >Jf r~


 ftrm. oartnersh•D. or 1o•nt venture. or an                           •   '1'\t.<   ~or:·vra                     4 Coruorauons :•ecutmg the bond shall affu rne.r ~or::-o•ate
 tton tnvolved                                                                                                   seats lnd•v•c:Juats shall execute the bond OOPOS•te the word ""Cor::c
                                                                                                                 rate Sear·. ano snail atf•x an a::lhes•ve seal ,t executed '" \"a•"'e
                                                                                                                                                                                        1
 3 tal Coroorat•ons e•ecuttng the bond as ~ .                          . .\1 o: : ··.J' .                        !"., ....., Hamosh•re. or anv otner 1ur•sdictaon regard•ng adnes•ve sta s

 rne Oeoarrment of the Treasurv·s t.st ·>i .•. :
 m""' Kt w•th•n the ltm•tat•on liSted therp.n ·.· ·                         ..      '".1~     _., ...            5 T ,;~e the na,..,e and t1tle of each oerson s•gn•nq th.s brJn·J                         .r :"-
                                                                                                                 soace urov•ded


                                                                                                                                                           STANOA .. OFO .. MJI.AaACKtAlV lO·tJ;
                                                                                             84
                                                                                                                                                                               1;110 :   '..   0 .. tJJ· )66
        -·
    -
                                                      CO..POIIAft .,,_IT'Yflall tc:au6 . .,


.~-·                                                                                I"''"·-·- Is                     'W•IT

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.,
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J  _....     $ipMWetU

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                                                                                                                                                         s.J




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                                                                                                                                                   Corporwu
                                                                                                                                                         s.J
I                 TotiOIII
                               ••

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                                                                                                          ~~-'-ITT UIIIT


.. _
                                                                                    rATe Of' IOC.

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             ~·                                                                                                                                          S«<l
I                     ••                                                   IL

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             Tille(at




._
                                                                                    f'~o•"""              ~~uro ..,.,-

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                  .........
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                               ••
                               ••
                                                                           IL

                                                                            a.
                                                                                                                                                    Corpol'lltR
                                                                                                                                                         S.al




   --
                   Tilletll



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                  tf'7-l
                                                                                    ISTATI:   01" '""'"   ~~-UTT       .......
I
    ,.            ••                                                 ...    a.                                                                      CQrpoi'IIU
    c        ~-                                                             a.
                                                                                                                                                         S«<l
    i
             -~~·
                  ••
              ~=.
              '

                                                       IXft IIlii
                                      1=- • Is
                                                                    INSTRUCTIONS

    1. Th•s form 11 -..tttorized tor ~in connction Mth Gow.nnwnt                 SURETYIIESJ"_ In tile.,.._ ~l811 ..SURETYIIESl" on"'"
(IOfttrXU,     Alty cs..ietion from lllill farm wm -uirw the -i~                 taca of ""- form i,.,-t ontv uW      •nw
                                                                                                                 id.,titicat•Oft of tt. SUIII•es
    _.,.,.. of the Adminillntot of G-w s.w:-.
                                                                                    lbl WIW'I -..sMcS..-1   .,,.tiel ..
                                                                                                                  invoNC. t.o 01 , _ , - ·


                  on-
    2. 1,_. IN full 1oog11 -    ..S buli,_ lddlw. of the Phr>C~N in
    IN IIIIC8 dBigna1811 '1'rif1Ci1181 .. on the ' - of IN fotm. 1vt

    ,__.,.tl.. '*-' tflell .• -" the bond. ,_, - must lil'ling in •
    . , 111
               cscitV (e.g
                           Iii"
                                 _,..,-in.fKtl         fumi., ..,;.
    denCt of .,lllontV if INt r~atlve ill not • " - of the
                                                                                 -1 _.,
                                                                                 11ble pencns ... I acua IN - · A comolet8d AH.,.,I of
                                                                                 lndividu.i Sumv ISandWtl F""" 281. tor -     incl;.,icl..-1 ..,..., .
                                                                                                    I N - · The ~t....., -..irw .,_
                                                                                 .,,.lie to fumilll mclilionlf .-Utint inltltmllnon -
                                                                                 ~Nor financo• caoeilitv.
    firm. 1*114'11110. or joint      ..,.ture.
                                  or., oHicer of the COI'IIO,.
                                                                                 & CotPOI'IItiON     .,....,lint
                                                                                                             N bond tllell affix lNir CDri>O'Itw
    lioni-.

    3. ,., Co<ootnionl .,.....ling the bond •
    IN ~ ot the                     r_.,·,
                                                 ..,et,.   must-  on
                                        tilt of - r o - ..,.... ..o
                                                                                 ...•. lnclivicl..-s ....lncua the-~- IIIIWOIII "Coroo-
                                                                                 rate s-t ... 1nc1 .,..,
                                                                                 - _.,,,., 01..., o-
                                                                                                          .ma ., .,.... _,   if IUCIIteO on - ·
                                                                                                               iuritdiaion -..iring                   c....,..--
    mu11 K'l wt1hin d"' li,.imtion tia.d ttwwin. Where more tNn one
    corpotate turetv ill iiWONC, ~Nor- ...:1 I~ I       " ..... _                5. Type the ftlmllftd lille o f - I*WI" si9'inglllis bOiicl in IN
           ....,. ISutetV A. SurwtV B. e~e.l -
                                                                                 -~·
    · -                                               ..CORPORATE



                                                                           82                                                              ..
                                                                                                                   SI'A_,.NI POIIII8 lAC& c v. aHJI
                                                                                                             • u.&               . . . . . . ....._ .......... . . . , .•••
                                                                                                                                                           -~
                                                                                                                                                            .,.,
                                                         ·~tiC. ..uilllt'I''I'O                                                                             i

 ....           .. .- ...
                   .....
...... ..... ............                       ---..s...u-~-(UC.)=-=-·=-~~·~~·~~~--::::::-;;::::.=::=~
                                                                                                                                     ..................
                                                                                                                                 ...,.ac~& ... es ,_.,,,

 , ..
                                            lulct Ll . . Ultp       J...__lt.,.        llllltl--1--.tp


                                                                    •... •.... ... •... ,.....                         ..
                                           IN a.l:'e . . ltat.Ca    ltat... al IH IIIIC'a                ltat.tea


                  CCA . . . - Ch.
                  . . I ~~-·JtJI
                                     lea, If lAC &a wae,.nel~l•
                                     few ••1•• .. (CA ••• ca4e,
                                     J~JIJ) __. lf lAC cau111
                                     ... cent•l'-tae ta the
                                                                    ,..,._u.,.
                                                                    ICA ..I -
                                                                                   ........
                                                                                   uc. •••
                                                                    up • • • , , •• ,, . . .
                                                                                                      ·~·······-
                                                                                               un.nfa•c••••• la ... , . .
                                                                                               .... c ... , .......
                                                                                                                             ... ..tl·······...,It•
                                                                                                                             •t•cute ... ,, ••
                                                                                                                             ,.,_. te IIAC•
                                                                                                                                                ~




                                     .,,
                                                                                                                             .
                                     •••ch.•l•· (Pt.,.altlen        UN4.1(4)h),                centi'IOtl   (CA Cl•ll Ce4e


      c.a......
                  -·- -·
                  -·-
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      REPORT TO CONGRESS ON LIABILfiY,
    BONDING, AND INDEMNIFICATIONISSUES
         FOR DEPARTMENT OF DEFENSE
          RESTORATION PROGRAM AND
        HAZARDOUS WASTE CONfRACfS




     Office of the Deputy Assistant Secretary of Defense
                       (Environment)
                    Response Action Contractors' Liability Issues

            Regarding the Defense Environmental Restoration Program

                         Conclusions and Recommendations


Conclusions:
       The Department of Defense (DoD) faces a major challenge to cleanup its
contaminated sites quickly, effectively and without excessive cost to taxpayers. The
DoD cleanup and remedial program relies on the architectural and engineering
services and the design and construction capabilities of private sector remedial action
contractors (RACs}. The RAC community expresses reservations about its members'
future willingness to undertake this work for the DoD because of perceived uncertain,
but believed potentially large, risk to their frrms inherent in DoD's remedial action
work. In order to better understand the substance and basis of these concerns the
Department of Defense has endeavored to work with representatives of the RAC
community, other private sector contracting entities, as well as representatives
knowledgeable about the practices and concerns regarding the insurance and surety
sectors of the nation. The study concludes that contractors have the following deeply
held perception of the current liability situation:

               RACs, because of joint strict and several liability under federal and state
               law, may be found liable when they are not at fault.

               The resulting probability of insolvency through imposition of liability
               without fault is uncertain and therefore unacceptable.

                     RACs are unable to secure adequate insurance due to the
                     insurance industry's reluctance to become involved where the
                     risk is so uncertain and potentially large.

                     RACs are also hampered in obtaining performance bonds required
                     by the Miller Act for DoD construction contracts. Surety companies
                     are reluctant to write bonds. The uncertain and potentially large
                     risk for the situation has decreased availability and increased costs
                     which are ultimately reflected in DoD's costs.

               RAC's believe they are assuming risks that properly go to DoD as the·
               generator of hazardous waste and owner of the site.

      These perceptions have serious implications for the continued progress of the
DoD's cleanup program, as DoD may not be able to sustain rapid progress in its
cleanup program without a heavy reliance on knowledgeable qualified contractors.

      The Department has also concluded the following as to the current status of
response action contracting and the legal liabilities of the Department
DoD is currently able to get adequate competition for our remediation
contracts.

Some well-regarded companies are not bidding on DoD contracts citing
the risk issues as their reason not to compete.
DoD is not able to determine, based on this study, what impact the
contractor's perceived liability exposure is having on their bid pricing of
DoD contracts.
There is no evidence that quality of work on DoD contracts is being
affected.
The current liability picture particularly discourages contractor
participation in innovative remedies as they place potential additional
risk on the contractor. A contractor's prime defense to their perceived
liability exposure is to use standard, conservative measures wherever
possible, thus favoring an excessively conservative approach to
remediation.
RACs express a willingness to be liable for their failure to perform
adequately on their remediation contracts.
DoD as waste generator, facility owner, and overall manager of its
remediation effort is and should be ultimately responsible for future
problems associated with its remediation efforts, however, it should have
a legal remedy against a non-performing contractor.
       As a waste generator and owner of the contaminated site DoD is
       in a different liability relationship with its contractors than EPA
       with its contractors. As such liability shifting rules developed by
       EPA for dealing with its contractors may not be appropriate for
       DoD.

Private firms hiring RACs for private cleanup work engage in risk
sharing strategies with RAC contractors which may be adaptable to DoD
contracts.
              Different types of remediation projects have different
              inherent risks and therefore may call for different risk
              sharing strategies.

              Appropriate risk sharing strategies should result in reduced
              cleanup cost to the Department and the taxpayer, without
              increasing the ultimate risk to the treasury.

              Adoption of risk sharing strategies may require regulatory
              and legislative reform.
                 -~··::,.·--,--

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Becommendations:


       Based on the foregoing conclusions, the Department is concerned remedial
action contractors' perceptions may lead in the future to reduction in competition,
escalation in costs, lowering of quality, and increased risk to the public. We are also
very conscious that any recommendation we adopt for action or inaction, will have
economic consequences. Any choice inevitably confers competitive advantage on
some contractors and disadvantage on others. We must make sure we understand
the nature and implications of the incentives and disincentives our choices imply.
we must encourage responsible and professional behavior by our contractors. We
must avoid creating incentives for behavior that diverts government resources from
the primary goal of cleanup. Ultimately, whatever strategies we adopt should
improve the Departmenrs ability to perform effective cleanup in a timely manner at
a responsible cost to the taxpayer.
·       Based on information developed in. doing this report, the Department is
implementing changes in its contracting strategies and policies within its control to
resolve some of these issues. These include better acquisition planning including
varying types of contract strategies, reducing amounts of bonds required on
construction contracts or use of rolling or phased bonds, allowing irrevocable letters
of credit in lieu of bonds, and retaining certain work elements under DoD control
(e.g. signing hazardous waste manifests). The environmental and engineering arms
of the military departments will continue to examine their current contracting
practices with a view to recommending changes in guidance, policy, regulations, and
legislation to enhance the effectiveness of our environmental and remedial action
contracting. We have tasked them to ensure the scope of their study addresses
appropriate and equitable risk sharing between the DoD and its contractors in the
cleanup program, and to make specific recommendations for action to be taken.
The DoD is now also engaged in a comprehensive review of the Federal Acquisition
Regulations so as to ensure adequate treatment of environmental requirements.

       Two recommendations merit further consideration. The first would resolve the
extent of liability of a surety to a remedial action contract where their only
involvement is in providing a bond. This issue was addressed in the last Congress
by amending section 119(g) of the Comprehensive Response Compensation and
Liability Act to -specifically broaden coverage for sureties at National Priorities List
sites. Extending this principle to all DoD sites, whether or not on the NPL, would
help bring sureties back into writing bonds for DoD cleanup contracts at a reasonable ·
prices. This should broaden competition for contracts, improve timeliness, and reduce
overall costs to the Department This should not work a disservice to innoomt third
parties, as ultimately it is the Department that is responstble for the remediation. The
prime purpose of the surety is to ensure the Department re<:eives the fiscal benefit
of the contract.
       A more wide-sweeping risk sharing concept evolved from discussions during
 the preparation of this report This concept would involve limiting a Jtesponse
 Action Contractor's liability to outside persons. The Department and any other true
          ,.,,
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    I,
potentially responsible parties would be designated as those solely responsible for
damages to innocent third parties for damages arising out of a remediation action at
a DoD site-logical application of current law as to generators and operators of
hazardous waste facilities. The DoD's contracts with its RACs would then provide
for recovery by DoD from the RAC if the damages resulted from the RAC's
negligence. This concept is similar to the latent damages clause currently used in
construction contracts.

       The time for preparation of this report was short considering the complexity
of the issues. Among the areas that still need substantial further analysis are the
total cost implications of various risk sharing strategies as compared with the long
term liabilities of the government We will continue working with the contractor
community and other interested parties to explore these and other recommendations
and solutions to improve the Department's clean-up program.
I
                                 ''•,




      APPENDIX 1

SAME FCM'UIII Prcl ' 'lnp




                             ··~~
                            . ···.,.,,
                                  ....
                            ,·~:·




                            .._,~­
                                 ·-~·
    SOCIETY OF
     MILITARY
    ENGINEERS                  ..




ENVIRONMENTAL CONTRACTS
        FORUM

                           •




    30-31 JANUARY 1991 .
 BOLLING AIR FORCE BASE
                             SAME ENVlRONMENI'AL CONTRACTS FORUM
                                       30 • 31 JANUARY 1991
                                    BOWNG AIR FORCE BASE


EXECUTIVE SUMMARY

On 30 • 31 January 1991, the executive level Environmental Contracts Fonm~ of the Society of
American Military Engineers (SAME) met at Bollin& Air Force Base to discuss the issues of liabili-
ty, Indemnification. and Bonding in Environmental Contnc:tinJ.

During the forum. the foUowing key issues were raised:

      a.    There is a risk to the remedial action contractor (RAC) perfonninJ euvironmental
worlc. Part of this risk are the unknowns associated with the worlc. Another part is the potential
for third party liability suits resulting from the perfonnance of such worlc.

      b.     RACs are unable to obtain professional perfonnance liability insurance for hazardous
waste site cleanup projects. The insurance industry is reluctant to prOIIide such insuruce due to
the high risk of liability associated with the perfonnance of such worlc. Available insurance only
covers the period of work performance; not the period during which RACs are most susceptible to
third party liability suits.

      c.    RACs are unable to obtain surety bonds required for Federal government hazardous
waste cleanup projeas because the surety bond industry sees a hiJh risk from liability in issuing
such bonds. AvaJ1able bonds are generally for projeas of less than SSM value. Some companies
are self-bonding in order to meet governmental requirements.

      d.     RACs feel that the Department of Defense (DOD) is responsible for the presence of
the hazardous material on the site and therefore, should be respoDSI"ble for their portion of the risk
associated with site cleanup. RACs believe that DOD should indemnify RACs performing work
against third party liability to cover the government's portion of the risk.

In response to the concerns raised by RAC.S. DOD representatives indicated that they would
consider the following potential solutions to resolve the issues raised:

        a.     Change U!e laws so that RACs are excluded as a potentially respoiiSI"ble party for
liability suits resulting from cleanup actions.

     b.    Revise the Federal Acquisition ReJU)ations (FAR) to mend the applicability of
indemnification to contraaor work done as a part of the Defense Environmental Reswration ·
Program.

        c.   Limit the statute of limitations for contractors on environmental cleanup projects and
 limit the contraaOr's liability for a project.

       d.     Limit the contraaor's liability to that resulting from their negligence.

       e.     Negotiate the risks of a project with the contractor and determine equitable distnllution
 of the risk between the contractor and the government as a part of the contract.
•                        SAME ENVIRONMENTAL CONTRACTS FORUM
                                   30 • 31 JANUARY 1991
                                BOWNG AIR FORCE BASE


              INTBODUCDON

    The executive level Environmental Contracts Forum of the Society of Americ:an Military Enpneers
    (SAME) met at Soiling Air Force Base on 30 and 31January 199110 discus~ the issues of4ability,
    Indemnification. and Bonding in Environmental Contnaing. In attendance at thfs iii'UIIl ~e
    representatives of the Office of the Deputy Assistant Secretary of Defense (Environment). Army,
    Navy, Air Force. and Coast Guard and encutives representing remedial action contractors (RAC.)
    that perfono environmental cleanup setVic:es tbr the Department of Defense aod private iodusay.
    A list of attendees for this forum is provided as Artac:hment A 10 this report.

    This forum was axhaired by Captain James A. Rispoli, CEC, USN, Vice President, Environmental
    Affairs. Society of Americ:an Military Engineers and Mr. Russ Milnes, Principal Deputy to the
    Deputy Assistant Secretary of Defense, (Environment).

    Prior to this forum. invitees were aslced to submit discussion papers on any aspe~ of the topic
    issues. Suggested discussion topics included: what are the liability concerns; what are the
    aperiences with regard to liability and bondin,_ how is the risk of performin& environmental worlt
    assessed; and how do the problems of liability and bonding aff~ competition. Seven papers were
    submitted in advance or during the forum. These papers were provided as attacluneots 10 the draft
    proceedings of the forum.

    B.        OPENING REMARKS

    Captain Rispoli opened the forum by outlining the objective of the Environmental Contracts
    Forum, whic:h is to facilitate an ongoing frank and open di•m•sion of programmatic and contniCtUal
    issues between industry and the military services. He indicated that this was the third session of
    this executive forum, and that SAME bad been asked by the Office of the Deputy A••istant Secre-
    tary of Defense (Environment) to further address the issues of liability, indemnification. and
    bonding to assist them in obtaining views so that DOD might prepare a report 10 Congress. To
    increase the dialogue, CAPT Rispoli indicated that additional contractors bad been izMted to
    participate. CAPT Rispoli stated that proceedings of the forum "M:Iuld be issued. These
    proceedings would not provide any quotes or attn'bution. He asserted that the forum wu DOt a
    place for debate, but was a means to discuss the issues so that all in attendance could listen and
    learn. He asked if there would be any objeaioos in having submitted papen publisbed u a part
    of the tbruro prcxeedinp. No objections were raised.                                               ·

     Mr. Milne,s addressed the lbrum satin& that the only means of soJvio& environmental cleanup
     liability problems was throu&h an open forum. He indicated that the Department of Defence
     (DOD) bas pledged 10 comply with its environmental obliptioas. The iostallation restoratioa efton
     is important. and as the DOD moves from the study phase, it recognizes that action must be takell
     to ensure site cleanup proeresses smoothly. He emphasized that the DOD wants to 6oish the
     cleanup business. Mr. Milnes swed that his oflic:e wants to come 10 crips with the hazardous waste
     site dean up contract issue. Perfonnance bonding is an issue; legislative fixes may be possible, but
      he did not see this as a solution. He explained that if the DOD and the cleanup industry do not


         •·
•   for a cleanup in certain states, and therefore may choose not 10 bid. They indicated that in
    performing some worlc, they were staking the survivability of their corporation. When asked, the
    RACs explained that. in workina with the private sector, the RAC shares the risk with the client.
    This protec:u the contractor. The point wu raised that the owner of a waste site owns the ~
    and the RAC is helpin& to clean it up. Therefore, the site owner must share a aood portion of the
    risk.

    The issue of strict liability was raised by the RAC representatives. IC anyone bas a connection with
    a hazardous waste site, they are liable. Proper behavior has DOt ucused liability.

    When worlcing for the Environmental Protec:tion Aaenc:y (EPA) on orphan sites, there is a pater
    risk to the RAC The EPA indemnifies the RAC under Section 119 of the Compnbalsive
    Environmental Response, Compensation, and Liability loa (CERCL\). This indemnific:atioll only
    covers negli,ence and not strict li.ability. 1be RAC must loot at the awe laws whCD decidiq to
    ac:cept a risk.

    Another issue raised was that in some insuDees. a DOD activity required a RAC to silft hazardous
    waste manifests. This action places liability on the RAC for transporting of wastes. U the RAC
    had tnown it would be required 10 do this. it would not ha"Je bid on the job without indemnifica-
    tion. A DOD representative indicated that. aenerally, the DOD sicns the manifest as the aeneraror.
    The RAC representatives indicated that C"JeD if the contractor does DOt sien the manifest. but
    arranges for transport. the contractor could be liable, a potentially respollSible party (PRP). E"Jen ·
    if the contractor doesn't uranae the transport. but is on site, it may be sued. The contractors
    emphasized that defense cosu are a real-time c:ash Oow problem and a real risk e"JeD if the
    contractOr is not in110lved or is innoc::ent.

    The problems for the RAC were summarized as foUows:

           a.    There is an inherent risk associated with doing environmental worlc. RACs are dealing
           with anomalies which are inherently difficult to model.

           b.    There is an environmental risk of third party liability.

           c:.   There is no incentive for innovation. Before innovation will be employed by
           contractors. there must be an agreement between the client and the contractor, and the
           beneficiary ofthe innovarive practice is required to assume liability. Innovation is prohibitive
           in a regulatory atmosphere. There is eenerally no innovation in the U.S.

           d.    The architect-engineers (A-Es) are being apected 10 accept the liabilities of others.
           Liability insurance is DOt available in the marct. U it is available, it is oa1y for the period .
           of the job.

           c.    Requirements vary &om state to swe. There is a bright spot for the RACI iD that
           there is more 8a1bility shown when dealing with states than when dcalin& with the Federal
           government. Some states may chanae the specifications on their cleanup projects to permit
           innovative technology. Many sec some states a.ssumin& the liability of PRPs. State rqulalors
           are a part of the Record of Decision (ROD), and this permiu Ocnbility in dcaliD& with the
                                           •

                                                        3
•
    "prior acu·. RACs are paying premiums but are not receiving future coverage. The topic leader
•   indicated that if states had negligence statements similar to Section 119 of CERCI.A. then
    insurance companies might become more interested in pi'OYiding suc:h insurance. There are
    presently no magic solutions.

    The topic leader was asked the insurance industry's plan of action. The response was that the
    insurance industry is •stu&ging out" solutions on a case-by-case basis. The industry bas not been
    able to agree on alternatives to the current situation. A formal definition of "poUution eu:lusion"
    is a possibility. A general discussion on possible approaches (JOiutions) followed. A 1- similar
    10 Price-Anderson which would be applicable to the toxic waste deanup industry was mentioned
    as a potential solution. This solution would create three layen of protection iJi the event of
    liability: the insurance layer, the owner/operator layer, and the pemment layer.

    3.    Near and tong Tel'lll Environmental Restoration Contnctlq Stratecles.

    Eac:h of the sel'lice representatives made a short presentation on environmental restoration
    contracting strategies. Described were current efforts, current problems, and actions being talccn
    to dean up identified hazardous waste sites.

    4.    The Availability, Costs, and IJmitations   ot Corporate Surety Bonds tA Co-.er the Risks and
    Potential Liabilities or DOD's EIIYironmental Contractors.

    The topic leader from the insurance industry indicated that there were considerable problems 'With
    the issuance of corporate surety bonds. Contractors must post a surety bond f'or Federal we :i:
    under the Miller At;t. Al this time, there are few bonds available Cor work on hazardous waste lites.

    The topic leader descnbed the problems of issuing bonds Cor sw:h tasks. Surety bonds are
    underwritten only to cover the performance of a contractor and the payment of suppliers Cor
    construction worlt. They are written based on the quality of the contractor (ability 10 do good work.
    quality of people on site, equipment, how well the contractor has done on similar efforu, and the
    availability of contractor finances to fulfill the contract requirements). Underwriters normally
    develop a long-standing relationship with the contraaor. Liability from third patty suits is not
    normally considered (this is normally covered by commercial general liability insurance). Recenlly,
    however, surety bond issuers have come under attack in the oourt room because they are the only
    "deep poclc:et• remaining in a law suit (RACs are nonnally people rich. but asset limited).

    There has been a lack of indemnification f'or surety bood issuers for haz:udous waste site work.
    Anyone in'IIOlved in hazardous waste site work (including the surety bond underwriters who are only
    covering contractOr performance and supply payments) bave been found to be liable. If the RAC
    defaults on such work, the surety principal would be required to hire a oompletin1 cootrKIOr and,
    consequently, may be construed to have contracted fer the removal of hazardous wute and
    subjected itself to liability.

    Another issue with hazardous wute site bonding is the bond terminatioa date. Normally, a bond
    is terminated when all -work bas been satisbctonly accomplished co a project. Due the possibility
    of long time periods associated with hazardous waste site cleanup action fmdudinJ the prospect
    of having to reinitiate work), the bonding company may be required to pay claims long after -work
    has been completed on a project..

                                                       s
•
    5.   Further Disc:uulon on Industry'• Liability Concem1 with Reprd to DOD Ea'riroaDMntal
•   Restoration Work and Potential Solutlont to Addre11 These Concema.

    A DOD representative led this topic: to generate f'urther discussion on the key iuua and to aplo!e
    potential solutions to these wues. The topic: leader indicated that DOD was looldn& Cor solutiona
    that would result in aood (technic:al and timely) c:leanups of its hazardous waste lites. at 1 JOOd
    price. and maintain a good contractor base which earns a fair profit and is I' viable communicy. The
    RAC representatives indicated that this would be pouible if then: was equitable risk sharing
    between the RA~ and the DOD.
                                                                                                .
    It was suggested that valut,-enaineering dauses in contracts be utilized. Some c:on!ndon indicated
    that this effort doesn't work very well, due to lack of tirDelineaa in the pemment's responac. This
    lack of timelineu causes contraclOn to stop t!yina. A DOD representative indicated that in
    situations in whieh 1 technolo&r is approved in the ROD, then: is reJnct&Dce to coasider Yllue-
    cnpneering proposals because it may mean rcopcnin& the ROO. A Navy representative Indicated·
    that his service welcomes value-enaineerina. The services indicated that when they become aware
    of roadblocla, they would talce action to eliminate them.

    A question was raised whether the llACs nonnally revalidated the remedial investiption/fcasibility
    study (RIIFS) when contracted to perfonn remedial de.sianJremedial action(~). The llACs
    agreed that they would revalidate the. data obtained by another contractor. The depee of
    revalidation would depend upon the contractor who perfonned the RI/FS. Suc:h n:Yilidation could
    cost up to 20 percent of the RDIRA effort.

    The Naii)''S Comprehensive Long Term Environmental Ac:tion, NaYJ (~ contrXt was
    di5cussed. The RACs were asked why they bid on these contracts since they did not kDow the
    cleanup effort involved. The llACs said that cost·plus (rather than &xed fee) contracting of
    CLEAN was a plus. They remarked that they would be better able to define the work and pt a
    good price to perfonn a f'ull scope of each task. As long as the de.anup effort was on the base. the
    possibility of third party liability was low. The closer to the site bowdaries, the greater the risk
    associated with a projec:t. Under CLEAN, eacll task is negotiated, and the contractor can evaluate
    the risk for each task. Only one percent of the projects in a CLEAN contraa an: anticipated as
    being a problem.

    In a discussion of contracting strategies versus risk, the RAC representatives indicated that third
    party liability is independent of the contract type. They did not look at &xed price contracts in the
    environmental area because there are too many unknowns and too muc:h time and effort is spent
    in contract modifications. They wanted to be able to address, in the contract, the can: to be taken
    in determining the risk of the project.

    The RAC representatives were aslced, what perc:entaae of c:ootracts an: hiah rill:? The response
    was, that a lar&e perc:ent.qe of environmental effort requires third pany liability and tbueli:lre, is
    1 high risk. One company representative indicated that his compa!!1 will not perform any work
    without some Conn of indemnification. Defense costs for liability suits are the bi& problem. There
    is no method of predeterminin& bow juries will apportion COltS.

     The RAC representatives reiterated that they have the ability to neaotiate risJa for commercial
     projeas. That ability does not c:urn:ntly exist in dealing with the DOD. They also indicated that

                                                       7
    The discussion continued with the RAC representatives indiatin&lh.at a ncclicence standard emu
•   in CERCI.A. and they want a similar law modification for state II'WS and the Resource Co~~~er·
    vation and Recovery Act (RCR.A). They do not desire strict liability to apply to them. The
    overridin& issue is that the RACa arc concerned that they must assume responsibility for what thg-
    did not initially cause. The responsibility should be adjudged to the people who put the waste iA
    the land.

    The DOD topic leader asked what the DOD could do to help the contractors. There were four
    areas of potential chanae; the law, which would be most difficult to chance; the reJUiations (DOD
    indicated that they would worlt with the EPA to determine bow the reJU.Iations mi&ht be c::lwlpd);
    policy; and the FAR/contract (DOD indicated that they could. directly impact these.laat two areas
    and achiCYe the quickest results).                                                 .

    Indemnification of contracton is now addressed iA Public Law (P.L) 85-8)4 and FAR 52-228.7.
    Under p .L SS-504, the contractor must identify the nature of the risk and then the CoatracWIJ
    Officer must raise the issue to the service Secretary for authorization. To support indcmnificati011
    of contnctors for environment risks would make each service's effort unique. The FAR clause is
    based on radioactive material risks and acludcs construction. A chance to the FAR appcan to
    be appropriate. but it would have to be based on a chance in the law. DOD representative~
    considered that such a chance might be accomplished as a part of the Defense Reauthorization Al::t.

    The following potential solutions were identified Cor evaluation by DOD in response to the issues
    raised by the RAC representatives regarding their risks:

           a.   Olange the laws so that the RACs are acluded as a PRP. This would resolve the
           Federal issue. but would not resolve the state issues.

           b.     Revise FAR S2-228.7 (and possibly FAR 28-311.2) which would extend the applicability
           of indemnification to contractor worlt done as a part of the Defense Environmental Rcstora·
           tion Program. This would make the Federal government the defendant and the contnaor
           liable to the government. (This may require a 1- change to accomplish.)

           c.      Limit the statute oflimitations for contrac:ton on environmental cleanup projects (after
           the statute of limitations, the government assumes full liability) and limit the contractor's
           liability for a project (similar to the limit for oil spills established in the Oil PoUution Al::t. of
           1990).

           d.     Limit the contractor's liability to that resulting from their neeJ.igeoce.

           e.     Negotiate the risks of a project with the cont:raetor and determine an equitable
           distn"bution of the risk between the contractor and the pemment as a part of the contract..

           f.   The DOD should specify standards of practice for a project to which the contraaor
           must comply.

           1-    A procedure Cor worltin& out changes u a result of unJcnown conditions needs to be
           developed. Cost reimbunable contracting and incentive cost and schedulin& were sugested.


                                                           9
.                  SOCIEn' OF AMERICAN MILrrAR.Y ENGINEERS
           EXECUTIVE ENVIRONMENTAL CONI'RACTS FORUM PA.RTJCIPANTS
•
    Captain James A. Rispoli, CEC, USN

    Sociery of American Military Encineert
    Vice President, Environmental Affairt

    Assistant Commander for Environment, Safery, and Health
    Naval Faaliries En&ineerina Command                                              ..
    200 Stovall Street
    AJeu.ndria. VA 22332-2300
    (i03) 32.S-029S .
    Fu: ((703) 3~183

    Mr. Russ Milnes, Co-Oialnnan

    Principal Depury to the Deputy Assistant Secretary of Defense (Environment)
    Office of the Secretary of Defense
    Washington. DC 20301-8000
    (703) 695-7820
    Fu: (703) 614-1S21

                          DEPARTMENT OF DEFENSE PARTICIPANTS
    COL Laurent R.. Rourcle. USAF

    Attorney, Environmental Law
    Office of General Counsel
    Dcparunent of Defense
    Pentagon
    Washington. DC 20301
    (703) 697-9136

    Mr. Kevin Dosey

    Director. Defense Environmental Restoration Program Division
    Office of the Assistant Secretary of Defense (Environment)
    Washington. DC 20301-8000
    (703) 325-2211
    Fu: (i03) 325-2234

    Mr. Matt Pr:utein

    Defense Environmental Restoration Division
    Office of the Assistant Secretary of Defense (Environment)
    Washington. DC 20301-«XX>
    (i03) 325-2211
    Fu: (i03) 325-2234

                                                   1                              Attachment A
Major RoJ K. Salomon, USAF

Environmental Program Manager
Headquaners United States Ajr Force (USAFILUEV)
Bollin& Air Force Base
Washinaton. DC 20332-SOOO
(202) 767~276
Fu: (202) 767-3106

Captain John Ahern, USAF

EDvironmental Proaram Manqer
Hcadquaners United States Ajr Force   (USAF~
Soiling Air Force Base
Washington, DC 20332-SOOO
(202) 767~76
Fu: (202) 767-3106




COL Robert L Keeoan, USA

Hcadquaners, Department of the Army (DAEN-ZCE)
PentaJOn. Room 1E687
Washington, DC 20310

LCOL Mas Toch, USA

Deputy Olief Environmental
    Restoration Division
HQ US Army Corps of Engineers
ATIN: CEMP-R
20 Mas•achusetu Avenue, NW
Washington, DC 20314-1000
(202) 272~579
Fu: (202) 504-4032

Mr. Jack Mahon

Office of Otief Counsel
HQ US Army Corps of Engineers
ATIN: CECC-C
20 M.assachuseru Avenue, NW
Washinawn. DC 20314-1000
(202) 272-0021
Fu: (202) 504-4123




                                        3         Attachment A
     Mr. liD Mahm

'"   Associate Counsel
     Naval facilities Encineerin& Command
     200 Stovall Street
     Alexandria, VA 22332·2300
     (703) 325-8553
     fax: ('703) 325-1913

                                SAME CONTRACI"S FORUM STAFF

     Mr. Ted Zapobelny

     DirectOr, Environmental Restoration Division
     Naval facilities Encineerin& Command
     200 Slovall Street
     AlCDDdria. VA 22332·2300
     (703) 32.5-8176
     fu: (703) 325..0183

     Ms. Susan Sanason

     Director of Federal Marlteting!Washinaton Opentions
     EBASCO Servi<:cs Inc.
     2111 Wilson Blvd.. Suite 1000
     Arlington. VA 22201
     (703) 358-8900
     Fax: (703) 522-1534

                              SAME CONTRACI'S FORUM SUPPORT

     Mr. Joe Dobes

     Director, Safety and Environmental
                  Protection Division
     Designers & Planners. Inc.
     2611 Jefferson Davis Hwy.
     Arlington. VA 22202
     (703) 418-3800
     Fax: (703) 418-2251

              SAME ENVlllONMENTAL ADVISORY COMMITl'EE PAilTICIPANTS

     Mr. Brent IWer

     Division Manaaer for Waste Mana&ement
                  and Federal Proanzns
     CH2M Hill
     62S Herndon Parkway
     Herndon. VA 22070
     ('703) 471-1441
     Fax: (703) 481~80

                                                    s          Attachment A
 Mr. Dou;laa C. Moomoute

Woodward Oyde Group
600 Montaomery Street
30th Floor
San Francisco, CA 94111
(415) 434-1955
Fu: (415) 956-5929

Mr. Andrew P   P~ab

Baker TSA Incorpo~ted
Airport Office Part
Bwldina3
420 Rouser Road
Coraopolis, P A 15108
(412)26~
Fu: (412) 269-6097

Ms. Lynn M. Schubert

Senior Counsel
American Insurance Association
1130 CoMedicut Avenue, NW
Suite 1000
Washinaton. DC 20036
(202) 828-7100
Fu: (202) 293-1219

Mr. Donald Senovich

Senior Vice President
Environmental Management Group
NUS Corporation
910 Copper Road (P.O. Box 6032)
Gaithersburg, MD 20877-0962
(301) 258-2598

Ms. Susan Thomas

Flour Daniel
3333 Michaelson Drive
Irvine, CA 92730
(714) 975-2610
Fu: (714) 975-2260




                                  7   Artac:hment A
                                                                                 1130 eonn.cslc:YI Avenue N.W.
                                                                                 SuhiOQO
      ~~   AMERICAN INSURANCE ASSOCIATION                                        WasNnglon. D.C. 20038
                                                                                 IZCI2l 126-7100
      ~                                              LAW DEPARTMENT              IZCI2l m-1211 F,;x




                                                      March 28, 1991

Joseph c. Oobes .
Director, Safety and Environmental Protection Division
Designers & Planners, Inc.
2611 Jefferson Davis Highway, Suite 3000
Arlington, vicginia 22202
            Re:   Minutes of the Society of American Military
                  Engineers January Conference
Dear Mr. Debes:
          Thank you !or sending the draft minutes from the
January 30-Jl, 1991 meeting of the Society of American Military
Engineers. I was pleased to attend and discuss the issue of
surety bonds !or hazardous waste cleanup projects. As we
discussed on the phone recently, I have only a few comments on
the draft minutes, and you took care of the specific items while
we spoke.
          However, I also have a general comment which I wanted
you to have in writing for the record. As you may remember, I
was unable to stay for the entire program, and thus, missed the
creation of the recommendations and potential solutions contained
in the minutes. All of the recommendations and potential
solutions developed by the attendees of the conference are
excellent ideas. However, I was concerned that surety was not
specifically included in some of the comments.
           For example, recommendation "e" states that "The DOD
 should reimburse the RAC !or insurance costs or indemnify the RAC
 if insurance is unavailable.• This is an instance where the
 RAC's surety should specifically be included in the
 recommendation. Just such a provision is part of the Superfund
 amendment passed last year, and has been essential to the
 increase we have seen in the availability of surety bonds for
 those contracts covered by that amendment. The ideas contained
 in the recommendations should apply equally to the RAC and its
 surety.
           The potential solutions also refer only to the
 contractor, while applying the solutions to the surety as well
 will be necessary to increase the sureties' ability to underwrite


  --
~R.O"HAAE

...
                              A08ERT B.SAHSORH
                              "tiC:! 0"1 ....... ,
                                                             ~W.IIAOWN,JR.
                                                             w::t QocMII6I   M

                                                                                          -
                                                                                          R:IIIERT E. VIGJ..EY
•
    Mr. Joseph c. Dobes (cont'd)
    March 28, 1991
    Page 2
    bonds tor these types of projects. Thus, it is my recommendation.
    that the potential solutions be amended to read as follows
    (underlined portion is the proposed amendment):
              a. Change the laws so that the RACs ~
              their sureties are excluded as a PRP. This
              would resolve the Federal issue, but would
              not resolve the state issues.
              b. Revise FAR 52-228.7 (and possibly FAR 28-
              311.2) which would extend the applicability
              of indemnification to contractor Ana surety
              work d~ne as a part of ~~e Defense
              Environmental Restoration Program. This
              would make the Federal government the
              defendant and the contractor or surety liable
              to the government.   (This may require a law
              change to accomplish.)
               c. Limit the statute of limitations for
               contractors and their sureties on
               environmental cleanup projects (after the
               statute of limitations, the government
               assumes full liability) and limit the
               contractor's and surety's liability for a
               project (similar to the limit for oil spills
               established in the Oil Pollution Act of
               1990).
               d. Limit the contractor's and surety's
               liability to that resulting !rom their
               negligence.
               e. Negotiate the risks of a project with the
               contractor and surety who takes over for a
               c~~t;ac~o;   and :eter:ine an equit&Qle
               distribution of the risk between the
               contractor or surety and the government as a
               part of the contract.
               f. The DOD should specify standards of
               practice for a project to which the
               contractor or surety must comply.
               g. A procedure for working out changes as a
               result of unknown conditions needs to be
               developed. Cost reimbursable contracting and
               incentive cost and scheduling were suggested.
    ••
         Mr. Joseph c. Oobes (cont'd)
r        March 28, 1991
         Page 3
                   These minor chanqes in the recommendations and
         potential solutions would express the necessity ot protectinq the
         surety of a response action contractor to the same extent as the
         contractor. Without this equity, it is most likely that Donds
         will continue to be ditticult to obtain tor all hazardous waste
         cleanup projects not covered by the Superfund amendment
         implemented last year.
                   Thank you tor allowinq us to suDmit these tollow-up
         comments. Please let me know it there is anythinq else which I
         can do to assist you in puttinq toqether the final version of the
         minutes.

                                              Very truly yours,
                                              c, __..~· ~
                                              Lynn M. Schubert
                                              Senior Counsel

         LMS/lmsjjdltr.sam


         cc:   Captain James A. Rispoli
               Ms. Susan Sarason
               craig A. Berrington, Esquire
               Ms. Martha R. Hamby
               James L. Kimble, Esquire
                                   APPENDIX 2

                 HazardoaiiDd Tarde WUIII (BlW) Coalnc1lnl Probl a
A   SbldJ oldie Coatncda& ~ Related to SurdJ lloodlaa Ill 1be HTW Clcuap l'rop'q
ff.iif.i
~
u..~ Anny COIP' of Ena'ncc"
W *'   Rcsc!l'n~cs S..ppH't Ccnw'
...ticu~ fot W arcr Resources




            HAZARDOUS AND TOXIC WASTE (HTW)
                 CONTRACTING PROBLEMS


                                A Study of the Contracting Problems
                                   Related to Surety Bonding in
                                    the HTW Cleanup Program




 JULY 1990                                                    IWR REPORT 90-R-1
          Unclassified
\ECiJiifY (lA\Sth(A TtON OF fHt\ PAGI
                                                                                                                                            IOttft ApofowM
                                         REPORT DOCUMENTATION PAGE                                                                          OMI No 0104-0IU
      ~
                                                                                                                                            E•P O•rt Jun JO. ' " '
 I I REPORT SECURITY CUlSSIFICA TION                                                   lb RESTRICTIVE MARKINGS
 U• •aasified
li.        .CUIIITY CUlSSIFICATION AUTHOIIlTY                                          J OISTRIIUTION I AVAILAIILITY OF REPORT

 lb       O£(LAS\IFICA TION 1 DOWNGRADING SCHEDULE                                       Approved for public release;
                                                                                         unlimited
 A. PE.aRMING ORGANIZATION REPORT NUMIER(Sl                                            5 MONITORING ORGANIZATION REPORT NUMIER(S)
 IWR Report 90-R-1
 N        NAME OF PERfORMING ORGANIZATION                  6b. OFFICE SYMBOL           71. NAME OF MONITORING ORGANIZATION
                                                               (If opp/ico!Wl
 USACE, Institute for Water
 Resources                                                  CEWRC-IWR
 k. ADO«ESS (City, Star~. ontl ZIP CO<MJ                                               7b. ADDRESS (Cify, Sflfo, 1ttd Zll' CQ<M)
 Casey Building
 Telegraph & Leaf Roads
1Ft Belvoir VA 22060-5586
 S.. NAME OF FUNDING /SPONSORING                           lb. OFFICE SYMBOL           9. PROCUREMENT INSTRUMENT IDENTIFICATION NUMIEII
              USACE, Directorate
          OIIGANIZATION                                       (If opplicoiWJ
 of Military Programs
 lt. ADORESS (City, Stofo. and Zll' C<><*J                                             10. SOURCE OF FUNDING NUMBERS
 Pulaski Building                                                                      PROGRAM                PROIECT           TASK                WORK UNIT
                                                                                       ELEMENT NO.            NO                NO                 ACCESSION NO
 20 Massachusetts Avenue, NW
 Washington, DC 20314-1000
 1 1 TITU (lnclu<H S«urify Oossificor:ionJ
 Hazardous and Toxic Waste (H T\il Contracting Problems
 Related to Surety Bonding in the HTV Clean-up Program
                                                                                                  - A Study of          the Contracting Problems

 12 PERSONAl AUTHOR(S}

~~
            r'Po Francis, M.
           TYP£ OF REPORT
          final
                                          I'   lb. TIME COVERED
                                               FROM               TO
                                                                                     14 DATE OF REPORT (Yur. Monfh, O.yj
                                                                                                       1990/ Anril
                                                                                                                                       rs   PAGE COUNT


 16. SuPPLEMENTARY NOTATION



 17                       COSATI CODES                       18. SUBJ£CT T£RMS (Contmu~           on   ,....,.rw if M·osury •nd ~ntifoy by bloct    numbfor)
           FI(LD       GROUP            SUB-GROUP          Bonding, Miller Act, Service Contracts Act, Davis-Bacon
                                                           Act, CERCLA, FAR • HTW, Surety, Performance Bond

 19. AaSTRACT (Conti,.,.. on , •    .,.rw if nK•sury •rw:J idfntify     br   bloct f'H.Iml>trr)


       This study attempts to determine the impact of performance bond availability on the
  successful accomplishment of Hazardous & Toxic Waste (HTW) projects.




  20 I'\ISTIIUIUT~N 1 AVAILAIILITY OF AISTRACT                                          21 ABSHtACT SECURITY (lASS"ICATION
             INCL.ASSIJIEOI\JNLIMIT£0    iJ    SAME AS IIPT       0    OTIC USE AS
 llo       NAME 0• RE SP0NS18LE INO•VIOUAl                                             22b TELEPHO .. [ (lnci...W Aru C-) 122< OHI([ Sv"'BOl
      Francis M. Sharp                                                                   202) 355-2369                            CtwRC-IVR-N
 DO FORM 1473. au,.Ao                                 13 APR N•t.on '"•Y M uMd unt•l ean•~e<J
                                                            All other N•t•onl ,,. obtOieu
        HAZARDOUS AND TOXIC WASTE (HTW)
             CONTRACTING PROBLEMS


            A Study of the Contracting Problems
               Related to Surety Bonding in
                the HTW Cleanup Program




                         Prepared by

                U.S. Army Corps of Engineers
               Water Resources Support Center
                Institute for Water Resources
                        Casey Building
               Fort Belvoir, Virginia 22060-5586


                       Commissioned by
                Environmental Protection Agency
                              and
                 U.S. Army Corps of Engineers
               Environmental Restoration Division




July 1990                                  .   IWR Report 90-R-1
•

•                                         TABLE OF CONTENTS

                                                                                  PACE

        I.     stJKKAR.Y • •                                                         1

        II.    BACKGROUND                                                            5

               A.    BONDINC PRO&LEKS                                                5

               &.    STUDY COAL: DETERMINE EXTENT OF THE BONDINC PROBLEM AND
                     PROPOSE SOUJTIONS                                               5

        III.   PRO&LEK DEFINITION                                                    7

               A.    APPLICABLE lAWS, REGUlATIONS AND OTHER. FACTORS                 7
                     1. Miller Act Construction Contract Bonding Requirement        10
                     2. The Service Contract Act                                    11
                     3. Davis-Bacon Act . . . . . • . •                             13
                     4. Superfund Legislation . . . . •                             14
                     5. Federal Acquisition Regulation                              16

               r..   HAZARDOUS AND TOXIC WASTE (HTW) CONTRACTING PRACTICES          17

               C.    CORPS HTW PROJECT DATA PRESENTATION, ANALYSIS AND FINDINGS     17
                     1. Introduction . . . .                                        17
                     2. Analysis and· Findings . . . . . . . .                      18

               D.    HTW INDUSTRY BONDINC PROBLEMS PERCEPTIONS                      29
                     1.   Contracting Industry Perceptions                          29
                     2.   Surety Industry Bonding Perceptions                       33

        IV.    CONCLUSIONS • • . . •                                                37
                   TRENDS OVER TIME                                                 37

        v.     OPTIONS EXAMINED                                                     45

               A.    INTRODUCTION                                                   45
    I          r..   NON·LECISIATIVE CHANCES                                         46
                     1. Improved Acquisition Planning & &ond Structuring             48
                     2. Clarify Surety Liability                                     53
                     3. Indemnification Guidelines                                   55
                     4. Cosounication With the Industry                              56
                     5. Limit Risk Potential                                         57

               C.    LECISU.TIVE CHANGES . . .                                       58




                                                 iii
•

                             TABL! OF CONTDITS (Continued)
                                                                          PAGE

    VI.   RECOKHENDATIONS • •   ....                                        61

          A.   NON·L!GISLATIVE CHANCES                                      61
               1. Issue Guidance on Use of Acquisition Plannin& for HTW     61
               2. Clarify Surety Liability                                  62
               3. Indemnification Guidelines                                62
               4. CoiiiiiUIIication vith Industry                           62
               5. Liait Risk Potential                                      63

          B.   L!CISLATIVE CHANCES                                          63

          ENDNOTES                                                          65

          BIBLIOGRAPHY                                                      67

          APPENDICES
               Appendix A - List of Contacts                                71

               Appendix B - Sample Foras . .                                75




                                          1v
.•
                                         LIST OF CHARTS
                                                                               PACE
     Chart lA • Avera&• Ratio Avard Aat./Covt. Eat. (by Bid Openin&
                Date) • • . . . • . . . . . . . . • . . . . . . . .            . 24

     Chart 1B • Ratio Avard Aat./Covt. Eat. Average Avard
                (by Project Size)      . . . . . . . . . . . . . . . . . . . . . 24

     Chart 1C • Ratio Avard Aat./Covt. Est. Avera&• Avard
                (by Remedy Type) . .     . .   .   .   . .                       24

     Chart 2A • Average Ratio:    High/Low Bids over Ti... 1987-9                25

     Chart 21 • Average Ratio: High/Low Bids over Time 1987-9
                (by Project Size)     . . . . . .                                25

     Chart 2C • Ratio:   High/Low Bids     (by   Re~~edy   Type)                 25

     Chart :SA • Average Nullber of Bids Over T1...                              26

     Chart 3B • Average Number of Bids (by Contract Type)                        26

     Chart 3C • Average Number of Bids Received (by Remedy Type)                 26

     Chart 4   • Average Number of Bids Received (by Avard Amount)               27

     Chart 5   - Corps HTW Programs - Contractor's Dollar Shares 1987-9          28

     Chart 6   • Contractor's Projects Shares 1987-9                             28

     Chart 7   - Sureties' Dollar Shares 1987-1989                               30

     Chart 8   • Sureties' Project Shares 1987-1989                              30



                                         LIST OF TABLES


     Table l • Legislation Pertaining to HTW Contracting                          8

     Table 2A- Corps HTW Contracts                                               21
           28- Corps HTW Contracts                                               22
           2C· Corps HTW Contracts                                               23

     Table 3 • Types of Options                                                  47

     Table 4 • Sample Alternative Contract for Incineration                      so




                                                 v
                                   I•   SIJMHAllY


   The EPA and the U.S. Ar.y Corpa of Engineer• (•Corpa•) have experienced
difficultiea in contracting Hazardous and Toxic Vasta (HTV) cleanup projecta.
The HTV cleanup industry haa expressed concern that it could not obtain aurety
bonds required as a preraquiaite for competing for remedial action
conatruction projecta.    It vaa reported that Treasury Department liated
corporate aureties, which provide the guarantee bonda for Government projecta,
bad 11apoaed atr1nsent lU.itationa on the provhion of performance boncl.a vbich
assure the government that the cleanup project vill be completed.
Essentially, the boncl.a cuarantee that the aurety vUl either complete
performance or pay the Covernaent ita costs associated vith completing the
project to the limit of the penal amount of the bond.       Various contracting
industry firms atated that they have not been able to aecure bonding for some
projects.   Those that have obtained bonds had a difficult time doing ao, and
aome firms that had obtained bonds for previous projects vere unable to obtain
bonda for a subsequent project.    The surety industry indicated its reluctance
to guarantee performance on HTV projects primarily because of its        concern for
possible long-term liability exposure and changing state-of-the-art design
requirements associated vith auch actions.


    The EPA and the Corps commissioned the Institute for Vater Resources to
gather information on the subject; to analyze the data to determine the extent
of the existing bonding problems; and to offer recommendations which could be
t.plemented in an effort to alleviate problems noted.       A survey vas conducted
of Corps district offices, the HTV cleanup industry, aurety firms, and trade
associations. to deterwine the extent and nature of the problem.        A fev survey
activities extended to EPA and atate offices involved in HTW vork.


    The study examined 24 onsoins reiMdial action and co.pleted Corpa HTV
conatruction contracts.    Statiatica vere gathered from actual Corp• recorda on
 the contractor• and auretiea that participated in thea• contracts.        In
 addition, a sample of the univerae of HTW contractors and sureties vas
 intervieved alons vith induatry .. sociation repreaentatives.      The r .. pon.aea to
 these intervievs appear later in this paper.       They vera analyzed to arrive at
 concluaiona concernin& industry v1eva and perceptiona of the surety problea.
.
    will be iasued on the appropriate factors to be taken into conalderation in
    acco.plishing thls analysis .


        • Analysis of the option of dividin& the project into vork elements vith
    an appropriate level of bondin& in each .


        • Clarify the government'& policy on indemnification of contractors and
    sura tie• •

        • To the extent of its authority, each govenaent agency vill define its
    apecific responaibility for the risk aspect of the cleanup project where
    appropriate (e.g. accept reaponalblllty for performance speciflcatlona) .


         • The government vill specifically accept the responsibility for project
    design where the performance specifications have been aet.

        Tbe thrust of this study vas specifically centered on the bonding issue.
    Vhile the stated problem of aany of the respondents vas bonding, the
    underlying issue is the uncertainty about risk in general aa it applies to the
    HTV Cleanup program.     There is uncertainty by sureties and contractors
     concerning risk and liability. Surety bonds for performance. liability
     insurance and indemnification questions are closely related and difficult to
     aeparate when dealing vith HTW risk questions.

         There are tvo categories of options available to address these solutions.
     Firat, ahort term steps can be taken interMlly by the Corps and EPA that
     iavolve revising internal agency procedure• to alleviate the contracting
     problea.     ChAnge a to goven.ent-vide conatruction procureaent regulations.
     e.g. at&Ddard bond foBa. abould be pursued vith the FAll Council.     Finally,
     lonaar ten actiona could be can:iad out which coDCentrate on potential
     legialative revision& to the liability and indemnification provision& in the
     auperfuod atetute.




                                                3
Reaourcea (IWR), a Corpa raaearch agency located at Fort Belvoir, VA, vaa
aelected to do the atudy.   The atudy vaa initiated in late November 1989.    IWR
conducted a aerie• of personal and telephone intervieva of HTV industry
contractor•, aa vall aa HTV industry association&. In addition, personnel
fro• insurance and auraty industry firaa, aurety associations, atatea, EPA,
and the Corp• vera interviewed about the iaaue. A liating of the interviewees
appear• in Appendix A.

    The interviewees ware questioned regarding difficulties experienced in the
HTV bonding area.   They were also aaked for their vieva on the nature and
aagnitude of any bonding proble.. and requeated to provide auggeations on
actiona that could be taken to rectify the aituation.   IWR also gathered
reference•, auch as seainar papera, lettera of concern to various agencies,
teatiaony before Congreaa, government foraa and regulations, and other
relevant docuaenta. A body of background material concerning the problem was
assembled. The atudy also collected information concerning contracting for HTW
cleanup, in particular information regarding the difficulties in the
acquiaition of aurety bonds by contractors.




                                        6
                               Table 1
          STATUTES AND REGYLATIQNS P£RIAINING TO HTW CONIRACIING
    ACT                        DESCRI PI ION
Killer Act              Requires Federal agencies awarding construction
 Construction           contracts to utiliza payment bonda to assure that
 Contract Bonding       the pri111 contractor pays his subcontractors and
 Require11ent           performance bonda to suarantee co11pletion of vork in
                        accordance vith the contract specifications.

KcNa~~&ra-O'Hara        Defines the types of activity classified aa aervice
 Service Contract       contracts for the purposes of Federal govern...nt
 Act (SCA)              procure111nt.

Davis- Bacon Act        Applies to all Federally funded construction projects.
 (DaA)                  Designates the Secretary of Labor as the tole
                        authority on the clasaification of vage rates for
                        construction projecta.

Co.aprehensive          CERCLA enacted to eli11inate past cont111ination caused
 Environmental Res-     by hazardous aubstancea pollutants or contaminants
 ponse, Compensation    released into the environment. Authorizes EPA to
 and Liability Act      recover cleanup coata. SARA enacted to strengthen
 (CERCLA), as &~~en­    CERCLA and tighten cleanup target dates. Requires use
 ded by Superfund       Davis·!acon vage rates for construction projects
 Amendments 6           funded under section 9604(G) of CERCLA.
 Reauthorization Act
 (SARA)

Federal Acquisition     Pursuant to the require11ents of Public Lav 93-400
Regulation (FAR)        as ~~~ended by Public Lav 96-83: provides uniform
                        policies and procedures for contracting by Federal
                        executive agencies.

    The procedure for obtaining performance and payment bonds fro11 individual
or corporate aureties for HTW cleanup contracts is inco.aplete vithout
e1111ining the background of the bonding requirement.   The 1935 Killer Act
apecified that all construction contracts by the Federal Government would be
covered by perforaance and payaent bonds. The purpose of the performance bond
ia to insure that the project is ca.pleted in the avent that the original
contractor defaulta.


    The require.. nt for perforaanee bonds varies vith each project and is
affectad by the type of project being undertaken.   A bond 1a required by the
Killar Act on all fixed-price construction contracts over $25,000, but   ~t     be


                                         a
the project.     The Corps of Engineers is very sensitive to avoiding disputes
with DOL arising from failure to use construction wage rates.       EPA is equally
concerned that the proper rate be used by the Corps.


    1.     Miller Act Construction Contract Bonding Requirements.   In order to
fully address the performance bonding requirement and its relationship to the
contracting industry, we must first examine the Killer Act.     The Killer Act
requires performance and payment bonds for any contract over $25,000 for the
•construction, alteration or repair of any public building or public work•.
P&P bonds are. required on all FFP construction contracts and/or delivery
orders over $25,000.     The percentage needed for performance bonds is flexible.
However, these bonds are not necessary for cost reimbursement contracts and/or
delivery orders.     The level of bonding required is determined by the
Contracting Officer based on the level of risk associated with the project and
the resulting need to protect the Government's interest.     The performance bond
guarantees the Government that the building or work will be completed in
accordance with the terms and conditions of the contract or the Government
will be compensated.     The payment bond guarantees that subcontractors and
suppliers of the prime contractor will be paid for their work.       Performance
and payment bonds are usually issued by the same surety for a particular
project.     These bonds protect against contractor non-performance.    They are
not intended as insurance for contractor actions which may prompt third party
liability suits, or as a substitute for pollution or any other type of
insurance.     A third bond, generally required by agency or acquisition
regulations where the contract solicitation is a formally advertised sealed
bid, is the bid bond.     The bid bond protects the Government by providing a
penal amount that will be forfeited by the surety of the lowest responsible
bidder if the bidder falls to accept the award or to provide the required
performance and payment bonda after award has been made.     Bid bonds generally
are provided by the same surety that provides the performance and payment
bonda for a particular contract.     The surety's decision to issue the bonds
appears to be controlled by the contractors bonding capacity and its analysis
of the risk associated with each particular contract.     Hence. it would seem
that difficulties reported ln contractors' ability to acquire bid bonds are in
fact directly connected to the aa.e factors causing those contractors
inability to acquire performance bonda.

                                         10
'    .
'. ...      Inas.ueh as the acope of possible service contracts is extensive, section
         7 of the Act liata specific contracts outside the Act. Included among these
         exeaptions are contracts for •construction, alteration and/or repair,
         includin& painting, or decorating of public buildings or public works.•     While
         DOL'a regulations (29 CFR 4.130) contain a number of illustrative service
         contracts, none of those listed relate specifically to environaental
         restoration (KTW) projects.

             The prln;ipal purpose eaphasia is key inssauch as a contract aay be
         principally for services, but aay at the aaae tiae involve aore than
         incidental construction.


             Existing DOL regulations do not define incidental construction.     Guidance
         on this issue, however, aay be derived fro• advisory memoranda issued by the
         DOL's wage and hour administration relating to construction projects comprised
         of different categories or schedules (building, heavy, highway and
         residential).   As   a general rule, DOL advises contracting officers to
          incorporate a separate schedule when such work is more than incidental to the
         overall or predoainant schedule.     •Incidental• is here defined as less than
          20\ of the overall project cost.    DOL notes that 20\ is a rough guide,
          inas.uch aa iteas of work of a different category may be sufficiently
          substantial to warrant separate schedules even though these items of work do
          not specifically aaount to 20\ of the total project cost.     This same rationale
          aay apply to contracts involving services and construction.


              under auch circuaatances, both the SCA and the Davis·Racon Act (see below)
          aay apply.   In thia regard FAR 22.402(b)(l) prescribes that the DRA will apply
          when:
                  a. Tbe conatruction is to be perforaed on a public building or work.


                   b. Tbe contract contain& specific requirements for a SubStantial
          amount of conatructlon work exceedin& the aonetary threshold for application
          of the DBA. Tbe tara aubatantial definu the type and quantity of the
          construction -rlr. AM not aerely the total value of the construction vork as
           c()III)U•d with the tatal contract value.


                                                   12
these activities atandin& alone aay be properly characterized as construction,
alteration or rapair of a public vork.


    Section 9604(C) of CERCLA also specifically stipulates the vage rates to
be paid on Response Action Construction projects are to be as determined by
the Secretary of Labor in accordance vith the Davia-aacon Act as follows:


         •sect. 9604(&)(1) All laborers and .. chanica employed by contractors
         or subcontractors in the performance of construction, repair, or
         alteration vork funded in whole or in part under this section shall be
         paid vagea at rates not leas than those prevailing on projects of a
         character aiailar in the locality as determined by the Secretary of
         Labor in accordance vith the Davis-Bacon Act. The President shall not
         approve any 1uch funding without first obtaining adequate assurance
         that required labor standards vill be aaintained upon the construction
         vork.
            (2)The Secretary of Labor shall have, vith respect to the labor
         standards specified in paragraph (1), the authority and functions set
         forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176; 64
         Stat. 1267) and section 276c of title 40 of the United States Code.•


         b.   The essential point of the foregoing discussion of the Service
Contract and Davis-Bacon Acts is that although the public policy objective
(labor standard protection) of the statutes are similar, there are significant
differences between the two which affect the cost of doing business.    Clearly,
the DOL's authority to require contracting agencies to retroactively modify
contracts to add one set of vage rate provisions and/or delete another, will
have consequences for project costs.    In view of DOL's authority to issue
determinations as to what comprises •construction• for purposes of the DBA,
 there aay. also be consequences for the coverage and extent of the bonds
required under the Killer Act.


    4.   Syperfynd Stsryte.   lnas.uch as considerable concern vas expressed by
 the surety induatry re&arding its potential for liability arising from bonding
 of HTV projects, a brief discussion of the auperfund statute is included in
 this section.   The Comprehensive !nviron.ental Response, Compensation and
 Liability Act of 1980 (P.L. 96-510)(CERCLA), commonly referred to as the
 Superfund lav, authorized $1.6 billion to clean up abandoned dump aitea. The


                                        14
performance default on the aaae baala aa auch        lnde~if1cat1on   vould be offered
to any remedial action contractor provided the surety aaaumea auhatantlally
the same role aa the original contractor.        Some corporate auretiea point to
thla liability potential as the basta for their refusal or reluctance to
actively provide bonding for HTV vork.      These auretiea urge that it be made
clear that the surety performance bond ia a        ~rantee   of performance only and
in no vay ia intended to serve aa insurance for potential third party
liability auita.    Likeviae, they urge that the application of the Section 119
inde~ification     to the corporate surety involved in a HTV project be
clarified.


    S.   federal Acquisition Reculatiqn.        HTW contracts, like other Federal
government procurement procedures, are controlled by the Federal Acquisition
Regulation (FAR).    The Federal Acquisition Regulation provides uniform
policies and procedure• for all Federal executive agencies.           These policies
and procedure• define construction and other government procurement
activities.   In addition, they specifically define contracting instruments
such as performance and payment bonds (aee Appendix a).         The development of
the FAR is in accordance vith the requirements of the Office of Federal
Procurement Policy Act of 1974 (Pub. L. 93-400) as amended by Pub. L. 96-83
and OFPP Policy Letter 85-l, Federal Acquisition Regulation System, dated
August 18, 1985. The FAR is prepared, issued. and maintained. and the FAR
system is prescribed jointly by the Secretary of Defense, the Administrator of
General Services Administration (GSA) and the Administrator of the National
Aeronautics and Space Administration (NASA).         These agency heads rely on the
coordinated action of tvo councils, the Defense Acquisition Regulatory Council
(DAR Council) and the Civilian Agency Acquisition Council (CAA Council) to
perform this function. Agency heads are authorized to independently issue
agency acquisition regulations provided auch regulations implement or
supplement the FAR.


    ay definition, the tera "acquisition• refers to acquiring by contract vith
appropriated fund& auppliea or aervicea (including construction) by and for
 the uae of the Federal govern.ent throu&h purchaae or lease -- whether the
 aervlcea or auppliea are already in existence or       ~t   be created or developed,
demonstrated, and evaluated. ·Acqu1alt1on beglna at the point vben agency

                                           16
                    Bld Infonution     aid Open       Project      Project
                                       Date           Size         Date
                   Avard Allount/
                   Cov. Eatiute        1A             111          lC
                   Hi&h Bld/
                   Lov Bld             2A             2B           2C
                   Number of Bids      3A             38           3C


    2.   An•lysil and Findings.
         a.       &atio of Avard Price to Government Estimate.           Chart lA illustrates
the trend in the ratio of award price to the government estimate over the
atudy period from 1987 to 1989.          The ratio of award amount to government
estimate rose from .8 to 1.2.          In addition, the ratio of award amount to
government estimate tended to increase with the size of the project, as shown
in chart lB.        The type of remedy that vas utilized also affected the
award/estimate ratio.          Avard ratios of 1.3 were observed for the waste
containment projects, on the average, as opposed to .85 on the other extreme
for alternative water supply projects as displayed in chart lC.                 The remainder
of the projects were around the 1.0 area.             The   concl~sion   drawn from this
information ia that there is a tendency for large projects to run at a higher
ratio of award/estimate and         thro~gh   time.   This tends to lend credence to the
fact that there is a tight market for HTW contracts.


             b.   High to Lpw Bid &atio.      An analysis of the contract data indicated
that   o~t    of the 24 projects four contracts involved         sit~tions    where the
initial bid winner vas not awarded the bid due to inability to                aec~re    bonding.
These four contracts totaled about $31 aillion.               $3.9 aillion additional costs
were incurred because of the neceaaity to utilize the next lowest bidder.
This vas an average of a 14\ increase in costa for the              fo~r   contracts.     The
ratio of high bida to low bids h . . been found to drop froa around 2 to 1 in
1987 to 1.3 to 1 in 1989 •• illustrated in chart 2A.               The range of bids also
tends to decrease with the aize of the project.               Chart 21 ahova this tendency.
The high·lov bid ratio also varies by the type of project.                 The collection and
dispoaal of vaate products h . . a large variation io the ratio of the bida


                                                18
•
     Deletion of the handling of hazardous aaterial in the first phase of the
      project and shifting it to the second phase and deletion of a teat burn of
      contaminated aoil, thus reaovlng the sureties' objections to bonding the
      f1nt phase.

     The vriting of separate bond agreements for the tvo project phases and the
       precise definition of What liability ia covered by the performance bond
       and the time limits of liability.

     &educing the dollar cap on the retainage for the last phase of the project
       from $6 aillion to $2 aillion and reducing the time the retainage is held
       from 60 to 18 aonths.

     C1v1ng the surety the ri&ht to choose the option of Whether to complete the
       project or forfeit the bond if the contractor defaults on the performance
       bond.

     Providing the requirements for the surety to obtain indemnification in case
       of contractor default and the surety assuming project completion.


           d.   pistrlbution of HTV Contracts.     There is considerable variation in
    the distribution of contracts among HTW contractors.     ln the Kansas City
    District, about 400 firas are on the bidders' aailing list for all
    construction, including HtV contracts.     ln 1987 through January 1990, 24
    contractors competed in the HTW program. and 14 received contracts.     According
    to Corps District personnel, the same few companies continually appear in the
    final bidders' lists for HTW contracts.


       Charts 5 and 6 list the contractors that have worked on Corps HTW
    construction projects and their aarket share of the total competed Corps HTW
    outlay or activity.   Five contractors, individually or in partnerships. have
    received 78' of the HTW contract dollars (Chart 5).     Five of the 14 firms
    obtained about 58' of all the projects (Chart 6).      The firms receiving awards
    are, for the aost part, large firas with experience in waste handling in
    general. They are not the only firas with the qualifications and credentials
    to do the vork, nor are they the only fi~ that have expressed interest in
    the hazardous and toxic vesta projects. There are aany contractors interested
    in participating ln these projects.   Thera appears to be legitimate concern
    that contracting iapediMnta, auch as bonding, aight leuen further the
    Cove~nt's     ability to expand contractor participation.    Contracting
    ~diaents     .u.t be carefully conaidared as to their relative aisnlflcance.



                                              20
•

•                                   TAIIU: 2B
                                CORPS tml CONTRACTS
                COST OF PROJECT COMPARED TO GOVERNMENT ESTIMATE
                               NUMBER OF BIDS PER PROJECT
                                --------------------------
    BID                                                       GOVT AllARD AllARD AKT   NO.
    DATE       ST    PROJECT NAME                     PROClWl EST AKT     /GOVT EST    II IDS

     6/04/87
               -- ----------------------------------------------------------------
                PA Lackawanna Refuse                  SF    23.0 15.9      0.7          7
     3/23/88   KA   Nyanza Cheaical Waste Duap          SF     13.0  8.6      0.7      13
     5/17/88   KA   Charles George Landfill             SF     15.0 15.6      1.0       6
     6/07/88   NJ   Lang Property                       SF      4.1  3.6      0.9       6
     6/07/88   NJ   Metaltec Aerosysteas                SF      3.5  3.4      1.0       5
     8/02/g8   OH   New Lyae Landfill                   SF     12.0 13.7      1.1       5
    10/06/g8   PA   Bruin Lagoon                        SF      5.0  4.0      0.8       5
    10/12/88   PA   Heleva Landfill                     SF      4.7  5.4      1.1       8
    10/18/88   IN   Lake Sandy Jo                       SF      2.3  2.4      1.0       3
    11/16/88   NJ   log Creek Fara                      SF     14.0 14.0      1.0       4
    12/06/88   CA   Del Norte Pesticide Storage         SF      1.3  1.2      0.9      11
     2/02/89   NJ   Bridgeport Rental/Oil Svcs.         SF     42.0 52.5      1.3       5
     3/28/89   NJ   Caldwell Truck Co.                  SF      0.2  0.2      0.8       9
     6/22/89   NH   Lipari Landfill on-site             SF     21.0 15.8      0.8       4
     7/ll/89   KD   Kane & Lombard St. Drwu             SF      4.0  4.5      1.1       1
     7/24/89   NY   llide !leach Developaent            SF     15.6 15.6      1.0       2
     8/01/89   KS   Cherokee County Storage Tanks       SF      0.7  0.6      0.9       2
     8/01/89   DE   Delaware Sand/Gravel Landfill       SF      1.2  1.5      1.3       3
     8/02/89   RI   Western Sand & Gravel               SF      1.0  0.9      0.9        9
     8/23/89   KA   !laird & McGuire                    SF      9.6 11.3      1.2        5
     8/31/89   NJ   Montclair ll orange Sites           SF      0.2  0.2      l.O        3
     9/06/89   HD   S.Kd.llood Treating                 SF      2.0  2.6      1.3        7
     9/19/89   NJ   Helen Kramer Landfill               SF     36.0 55.7      1.5        4
     9/19/89   PA   Moyers Landfill                     SF     25.0 28.0      l.l        4
     -------- ------------------------------------------------------------------
                                                  TOTAL: 256.4 277.2    1.12 AVG.

     $1,000,000•
     SF- SUPERFUND




                                                       22
·'


•                                                                                             1.1   i
                                                                                              1.4 ..

                                                                                              1.2
                                                                                                    5
                                                                                                    ~
                                                                                              1.0 ~
                                                                                              0.1   ::.!
                                                                                                    Q

                                                                                              0.1 ~
                                                                                              0.4   <iC
                                                                                                    ~
                                                                                              0.2~
                                                                                              0.0
                                  11187        11118          111118

         •       AWOIE5r~WOiEST REGRES
                         Ql tB AAl10: AWN'CJ NIOJifr/Of:NT ES'TNATE




                 --t:-r----:-r=~======r~;..r -~ i
                 I                     e        ~
                                                                              •           1


                                                                                                    ~

         ~----~----~~----~-----4------+------+-o.~
                                                                                                    i
                                                                                                    I
                                                                                                    ~
                                   AWAAD ANII::J4MT St .000.0005

             •    AWARD AM0UI(T       # BIOS       NO. BIOS REGR

                 CHAI'IT 1C RATIO: AWAP.O AMOUNT/GOVERNMENT ESTIMATE
                                     BY REMEDY TYPE




                                                                                                    t
                                                                                                    •
                                                                                                    •
                                                                       ·-nPI
                                                                                                < n ....."-•>
                                                                                                 ..

                                                                       __...,.
                                                                       Tnam-c . , .......
                                                                       KIA C..
                                                                       C.llenl• _, a.,...., •f ... a.
                                                                       ,_..a..      ~lesl•
                                                                       &ltarMct... •tee' . . . , , ,
                                                                       C."'          ., . . .cae




     ·----·--·                        24
                                               -
•
                                      CH 3A · BIDS PER PROJECT
                                                             I NT·I -

            14 ~-r-----r----;-----+-----~----~----~--~~

            12 ~~----~----~----+-----~----~----+-----~

    -8      10
    J5
    0       I
    ;a;
    ~        I
    2        4

             2

             0
                                       1987         1988           1989
                  •       # 8DS PIEGRS •   # BDS

                                    CH 31 H\NBEll a' BIOS (8Y AWINJ AMOUNT)

          14.00

          12.00
      t;
     10.00
      IIi 1.00
      ...
      :ga.oo
      iii
      !!! 4.00
      IE
      wz.oo
      io.oo ~00~----.~0~.00~--~~----~~--~~=---~~~--~~~.00

                                            AWAAO AMOUNT (Sl .OOO.OOOs)

                      •     AWAFID AMOUNT

                                          CHART3C
                            AVERAGE NO. BIDS RECEIVED (BY REMEO




                ·-                                      26
                       CHART 5 CORPS HTW PROGRAM
                  CONTRACTORS' SHARES ($280 MILLION TOTAL)




                                                      Chern Waste(22.8%)


A
w
A
R
0
A      Ebasco(18.9%)
M
T



                                                    Klmmons(!5.8%)

                                             Bechte~!5. 7%)
                        Sevenson(7 .5%)

                                CONTRACTOR




                   CHART6
    CONTRACTORS' SHARES (24 PROJECTS TOTAL)




~
A
0
J
(
c
T
    CHART 7 CORPS HTW PROGRAM ·1987-9
    SURETIES' SHARES ($280 MILLION TOTAL)




A
w
A
R
D
A
M
T
                                            '
                                            u
                                            ...




                     SURETY




                  CHART 8
    SURETIES' SHARES (24 PROJECTS TOTAL)




~
R
0                                           !
                                            0
J
                                            u
'
c                                           •
T
                                            '




                      30                        I
•



    This had particular concern to contractors that had been awarded larga,
    indefinite delivery contracts.    They feared that suraties •ight use the total
    contract aaxi.ua, rather than actual work orders issued, to compute their bond
    capacity li•itation.


        Tables 2A·C illustrate the experience of the Omaha and Kansas City Corps
    districts.    There