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Military Base Closures: Reducing High Costs of Environmental Cleanup Requires Difficult Choices (Letter Report, 09/05/96, GAO/NSIAD-96-172)

Pursuant to a congressional request, GAO reviewed the costs of the
Department of Defense's (DOD) environmental cleanup efforts under the
base realignment and closure (BRAC) process, focusing on the: (1)
reasons that cleanups are so costly; and (2) potential for reducing
costs and the impact on program goals.
GAO found that: (1) as of March 1996, DOD allocated about $3.4 billion
for the BRAC environmental cleanup program, but available DOD financial
data indicate that program costs are likely to exceed $11 billion before
cleanup actions are completed; (2) DOD has increased its obligation rate
for cleanup funds and, as of September 1995, DOD had obligated 96
percent of its available funds; (3) reasons for high DOD cleanup costs
include the large number of contaminated sites, difficulties in
determining the extent and severity of site contamination, federal and
state legal requirements, the lack of cost-effective technology for
certain contaminants, and intended property reuse; (4) DOD has
identified over 5,300 potentially contaminated sites; (5) DOD has found
the laws governing expedited property transfers to be time-consuming,
complex, and costly; (6) options for reducing cleanup costs at BRAC
bases include deferring or extending certain cleanup actions, modifying
existing laws and regulations, adopting more cost-effective cleanup
technologies, and sharing costs with property users; and (7) all of
these options could adversely impact program goals and delay property
transfers and reuse, hurt the economic revitalization of nearby
communities, harm the environment or public health, and increase
environmental risk.
--------------------------- Indexing Terms -----------------------------
     TITLE:  Military Base Closures: Reducing High Costs of 
             Environmental Cleanup Requires Difficult Choices
      DATE:  09/05/96
   SUBJECT:  Base closures
             Pollution control
             Environmental monitoring
             Environmental law
             Budget obligations
             Military cost control
             Future budget projections
             Hazardous substances
             Real estate transfers
             Military bases
IDENTIFIER:  DOD Base Realignment and Closure Account
             DOD Base Realignment and Closure Program
             Defense Environmental Restoration Program
             DOD Relative Risk Site Evaluation
             EPA National Priorities List
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================================================================ COVER
Report to the Chairman, Subcommittee on National Security,
International Affairs, and Criminal Justice, Committee on Government
Reform and Oversight, House of Representatives
September 1996
Military Base Closures
=============================================================== ABBREV
  BRAC - base realignment and closure
  CERCLA - Comprehensive Environmental Response, Compensation, and
     Liability Act
  DOD - Department of Defense
  EPA - Environmental Protection Agency
  RCRA - Resource Conservation and Recovery Act
=============================================================== LETTER
September 5, 1996
The Honorable William H.  Zeliff, Jr.
Chairman, Subcommittee on National Security,
 International Affairs, and Criminal Justice
Committee on Government Reform
 and Oversight
House of Representatives
Dear Mr.  Chairman: 
As requested, we reviewed the cost of the Department of Defense's
(DOD) environmental cleanup efforts at bases being closed under the
base realignment and closure (BRAC) process.\1 Specifically, this
report addresses the (1) cost of cleanup efforts, (2) reasons that
cleanups are so costly, and (3) potential opportunities for reducing
costs and their impact on programmatic goals. 
\1 Environmental cleanup in this report refers broadly to both
compliance and restoration efforts.  Typically, compliance refers to
work required to ensure current operations comply with environmental
laws and regulations, and restoration refers to work involving the
cleanup of contamination caused by past disposal practices. 
------------------------------------------------------------ Letter :1
After the Cold War, DOD's base structure was larger than required to
meet changing national security needs.  Consequently, the Congress
enacted two separate laws that instituted base closure rounds in
1988, 1991, 1993, and 1995.\2 Through these four BRAC rounds, DOD has
closed or scheduled to close 311 bases, installations, and activities
and realigned or planned to realign an additional 112 bases.  Table 1
shows the number of closures and realignments for each BRAC round. 
                                Table 1
                Closures and Realignments by BRAC Round
BRAC round                                Closures        Realignments
------------------------------  ------------------  ------------------
1988                                            89                  10
1991                                            35                  39
1993                                           119                  38
1995                                            68                  25
Total                                          311                 112
Source:  Defense Base Closure and Realignment Commission. 
As a result of military base downsizing, DOD has had to phase down
base operations, expedite the sale or transfer of unneeded base
property for future reuse, properly account for cost and savings
attributable to base closures, and perform environmental cleanup of
contaminated property no longer needed.  Because of congressional
interest in the impact of base closures on DOD and affected states
and communities, we have issued several reports on these issues.  In
August 1996, we reported on the status of bases closed during the
BRAC 1988, 1991, and 1993 rounds.\3 In February 1995, we reported on
the environmental impact at DOD closing bases.\4 In November 1994 and
August 1995, we reported on property reuse issues arising from the
BRAC 1988 and 1991 rounds.\5 In March 1993 and April 1996, we
reported on BRAC cost and savings issues.\6
The severity of contamination at a large number of BRAC bases has
turned environmental cleanup into a major challenge for DOD.  Before
BRAC, DOD had begun addressing environmental contamination at its
active military bases through ongoing compliance and restoration
programs.  Types of hazardous waste found at military installations
include solvents and corrosives; paint strippers and thinners;
metals, such as lead, cadmium, and chromium; and unique military
substances, such as nerve agents and unexploded ordnance.\7
Contamination has usually resulted from storage and disposal
practices that were accepted at the time but which have proved
damaging to the environment. 
Cleanup issues faced at closing bases are similar to those at active
bases.  Base closures have underscored the importance and urgency of
environmental cleanup.  Because cleanup is, in most instances, a
prerequisite for the title transfer of BRAC property to nonfederal
parties, DOD must begin to address environmental issues early in the
closure process to expedite property transfer.  In doing so, DOD must
comply with existing federal and state laws and regulations.  Two
federal environmental statutes--the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA) and the Resource
Conservation and Recovery Act (RCRA)--and state laws and regulations
govern most of the environmental compliance and restoration
activities at closing bases.  In general, CERCLA governs the cleanup
of inactive waste sites, and RCRA regulates the management of
facilities that treat, store, and dispose of hazardous wastes. 
Appendix I summarizes selected federal and state laws and regulations
pertinent to BRAC environmental cleanup. 
The Congress established separate BRAC funding accounts to help
ensure that DOD could devote high-priority attention to base closure
and property transfer.  Although the Congress appropriates overall
funding for BRAC based on DOD budget requests and not directly for
environmental cleanup purposes, it may specify either maximum
(ceiling) or minimum (floor) dollar amounts to be used for
environmental efforts in any given budget year.\8 DOD uses overall
BRAC appropriations to allocate funds to the services based on
requirements in each of several BRAC subaccounts, including the
environmental subaccount.  This subaccount includes multiyear funding
for each of the BRAC rounds, thereby allowing the services greater
flexibility in executing the environmental cleanup program.  Further,
with a floor, unneeded funds from other BRAC subaccounts may be
transferred into the environmental subaccount throughout the year. 
With a ceiling, environmental funding can be shifted into other
subaccounts.  We review BRAC budget account issues on an annual
basis; we issued our latest report in July 1996 on the validity of
DOD's fiscal year 1997 BRAC budget submission.\9
\2 Defense Authorization Amendments and Base Closure and Realignment
Act of 1988 (P.L.  100-526) and Defense Base Closure and Realignment
Act of 1990 (P.L.  101-510, title XXIX, part A). 
\3 Military Bases:  Update on Status of Bases Closed in 1988, 1991,
and 1993 (GAO/NSIAD-96-149, Aug.  6, 1996). 
\4 Military Bases:  Environmental Impact at Closing Installations
(GAO/NSIAD-95-70, Feb.  23, 1995). 
\5 Military Bases:  Reuse Plans for Selected Bases Closed in 1988 and
1991 (GAO/NSIAD-95-3, Nov.  1, 1994) and Military Bases:  Case
Studies on Selected Bases Closed in 1988 and 1991 (GAO/NSIAD-95-139,
Aug.  15, 1995). 
\6 Military Bases:  Revised Cost and Saving Estimates for 1988 and
1991 Closures and Realignments (GAO/NSIAD-93-161, Mar.  31, 1993) and
Military Bases:  Closure and Realignment Savings Are Significant, but
Not Easily Quantified (GAO/NSIAD-96-67, Apr.  8, 1996). 
\7 Ordnance that remains unexploded either through malfunction or
design is capable of causing injury to personnel or damage to
material.  Types of unexploded ordnance include bombs, missiles,
rockets, artillery rounds, ammunition, or mines. 
\8 Before fiscal year 1996, legislation established a floor for the
environmental subaccount that required DOD to spend at least the
amount requested in the BRAC budget submission for environmental
costs.  Consequently, the specified minimum amount could not be
shifted to other subaccounts.  In fiscal year 1996, however,
legislation established a ceiling for the environmental subaccount
that prohibited DOD from spending more than the amount requested in
the BRAC budget justification for environmental costs.  The Secretary
of Defense must notify the appropriations committees if more spending
on environmental activities is found to be necessary. 
\9 Military Bases:  Potential Reductions to the Fiscal Year 1997 Base
Closure Budget (GAO/NSIAD-96-158, July 15, 1996). 
------------------------------------------------------------ Letter :2
As of March 1996, DOD had allocated about $3.4 billion for the BRAC
environmental cleanup program.  However, as more bases are closed and
more cleanup actions are underway, program costs are likely to
increase significantly.  Although DOD has not computed a total cost
estimate for the program, available DOD financial data indicate that
program costs are likely to exceed $11 billion. 
The key reasons for the high cost of closing base cleanups include
(1) the large number of contaminated sites and difficulties
associated with types of contamination, (2) requirements of federal
and state laws and regulations, (3) lack of cost-effective cleanup
technology for certain contaminants, and (4) intended property reuse. 
DOD has identified over 5,300 potentially contaminated sites at its
BRAC bases.  Also, the laws and regulations DOD must abide by in
expediting property transfer for reuse have proven to be
time-consuming, complex, and costly.  Further, technology limitations
in cleaning property of certain contaminants (such as unexploded
ordnance) have proved costly. 
Options for reducing cleanup costs at closing bases include (1)
deferring or extending certain cleanup actions, (2) modifying
existing laws and regulations, (3) adopting more cost-effective
cleanup technologies, and (4) sharing costs with the ultimate user of
the property.  However, all of these options may adversely impact
programmatic goals, thereby presenting decisionmakers with difficult
choices in developing a cost-effective environmental cleanup program. 
Deferring or extending cleanup actions may delay property transfer
and reuse, hurt the economic revitalization of communities affected
by the closure process, and harm the environment and health as well. 
Modifying laws and regulations may increase environmental risk,
thereby increasing public resistance and dissatisfaction.  Adopting
more cost-effective technologies may delay the program because new
technologies currently under development may not be available for
years and the new technologies may not be more cost-effective than
existing technologies.  Sharing costs with the ultimate user could
present problems because of unknown future liabilities and difficulty
establishing the value of the property. 
------------------------------------------------------------ Letter :3
The cleanup of contaminated base property has been costly, and with
the majority of base cleanup work still to be done, costs will
continue to grow.  Although $3.4 billion had been allocated for BRAC
environmental cleanup through March 1996, it is likely that costs
will exceed $11 billion before cleanups are completed well into the
next century.  In the earlier years of the BRAC program, the Congress
had expressed concern about DOD's slow progress in obligating funds
for environmental cleanup.  Our analysis shows that in recent years
DOD has greatly increased the rate at which it has obligated funds. 
As of September 1995, for example, DOD had obligated 96 percent of
available funds, which was substantially higher than the 50- percent
rate 2 years earlier. 
Through March 1996, DOD had allocated $3.4 billion, obligated $2.8
billion, and expended $1.6 billion on BRAC environmental cleanup. 
Tables 2 and 3 show these amounts by BRAC round and military
component, respectively. 
                                Table 2
                   Environmental Cleanup Allocations,
                 Obligations, and Expenditures by BRAC
                      Round (as of Mar. 31, 1996)
                         (Dollars in thousands)
                                                    Percent    Percent
                                                         of         of
                                                  allocatio  obligatio
                    Allocate  Obligate                   ns         ns
BRAC round                 d         d  Expended  obligated   expended
------------------  --------  --------  --------  ---------  ---------
1988                $980,119  $966,926  $600,672       98.7       62.1
1991                1,391,77  1,100,52   676,134       79.1       61.4
                           9         0
1993                 812,677   660,775   302,997       81.3       45.9
1995                 177,601    43,868     1,817       24.7       4.14
Total               $3,362,1  $2,772,0  $1,581,6       82.5       57.1
                          76        89        20
Source:  Our analysis of DOD data. 
                                Table 3
                   Environmental Cleanup Allocations,
                    Obligations, and Expenditures by
                Military Component (as of Mar. 31, 1996)
                         (Dollars in thousands)
                                                    Percent    Percent
                                                         of         of
                                                  allocatio  obligatio
                    Allocate  Obligate                   ns         ns
Military component         d         d  Expended  obligated   expended
------------------  --------  --------  --------  ---------  ---------
Air Force           $1,314,6  $1,033,3  $599,644       78.6       58.0
                          20        37
Army                 956,622   781,158   451,073       81.7       57.7
Navy                1,077,52   949,167   528,214       88.1       55.7
Defense agencies      13,414     8,427     2,689       62.8       31.2
Total               $3,362,1  $2,772,0  $1,581,6       82.5       57.1
                          76        89        20
Source:  Our analysis of DOD data. 
Appendix II provides additional detail on allocations, obligations,
and expenditures by military component for each BRAC round. 
---------------------------------------------------------- Letter :3.1
The estimated cost for the BRAC environmental cleanup program is
uncertain but will be much higher than amounts allocated thus far. 
The $3.4 billion allocation through March 1996 included only initial
funding for BRAC 1995 bases and was insufficient to complete cleanup
at prior round BRAC bases.  Even though the Congress has established
a 6-year period for closing a base, there are no statutory deadlines
for the cleanup process.  All indicators point to cleanups extending
well into the next century.  At the time of our review, DOD did not
have a total BRAC environmental cleanup cost but was in the process
of collecting the data to make such a projection.  Our analysis
showed that many base cleanups are expected to be very costly. 
Available DOD data indicate, for example, that cleanup costs for 27
closing bases will likely exceed $100 million each.  Further, with
the use of available DOD financial data, we estimate that the total
cost is likely to exceed $11 billion, as shown in table 4. 
                                Table 4
                Estimated DOD BRAC Environmental Cleanup
                             Program Costs
                         (Dollars in millions)
                               allocated      Estimated
                                 through        cost to
                             fiscal year       complete
BRAC round                          1995     cleanups\a          Total
-------------------------  -------------  -------------  =============
1988                              $980.1       $2,139.1       $3,119.2
1991                             1,066.8        1,656.5        2,723.3
1993                               573.1        1,342.3        1,915.4
1995                                   0        3,577.4        3,577.4
Total                           $2,620.0       $8,715.3      $11,335.3
\a The cost includes closing base estimates for fiscal year 1996
through completion, as shown in the Defense Environmental Restoration
Program Annual Report to Congress for Fiscal Year 1995, and estimated
program management costs.  Certain Navy and Air Force environmental
compliance costs are not included in the estimate. 
Our total cost estimate was based on the best available data at the
time of our review, but we believe the estimate is likely to be
conservative for several reasons.  First, environmental cleanup cost
estimates for many of the 1995 BRAC bases are based on projected
costs developed while they were active installations.  DOD officials
told us that cost estimates for these bases would likely increase as
additional environmental studies are performed, more work is
identified, and cleanup timelines are accelerated.  Second, according
to DOD officials, certain Navy and Air Force environmental compliance
costs that are funded under the BRAC program are not included in the
above estimate.  Finally, previous DOD estimates were generally
understated.  For example, in September 1994, DOD reported that it
would cost about an additional $3.1 billion to complete base-level
environmental cleanups of its 1988, 1991, and 1993 BRAC bases. 
However, in September 1995, that estimate had increased to $4.7
---------------------------------------------------------- Letter :3.2
In recent years, DOD has significantly increased the rate at which it
has obligated environmental funds for the BRAC program.  As shown in
figure 1, DOD obligated $2.5 billion, or 96 percent, of the $2.6
billion available for the BRAC environmental program as of September
1995.  In comparison, DOD had obligated 50 percent of the funding
available in September 1993.  Low obligation rates in the early years
of the BRAC program raised concerns on the part of the Congress. 
   Figure 1:  Comparison of BRAC
   Environmental Cleanup
   Allocations, Obligations, and
   Expenditures (Sept.  1993
   through Sept.  1995)
   (See figure in printed
DOD officials offered a variety of reasons for the low obligation
rate in the early BRAC years and the high obligation rate in recent
years.  First, during the early BRAC years, DOD officials
acknowledged they (1) were probably overly optimistic in the level of
funds requested, (2) did not have all the necessary expertise to
better estimate requirements and timing, and (3) were slow in
actually obligating funds through existing contract mechanisms. 
Second, because BRAC funds are available for use on a multiyear
basis, there was no overriding pressure to quickly obligate funds. 
Due in large part to heightened congressional interest in the issue,
however, DOD made a concerted effort to increase obligations. 
Further, with the expiration of BRAC 1988 funds on September 30,
1995, DOD focused its attention on obligating as much of the
available money as possible for remaining BRAC 1988 cleanup
Although the obligation rate has increased and the relative amount of
unobligated funds has decreased, a large unexpended balance of funds
remains.  As of September 1995, BRAC environmental expenditures were
about 48 percent of obligations--a modest increase from the
34-percent rate existing in September 1993.  DOD officials told us
that the large amount of unexpended funds was typical of other
environmental programs and were relatively low because of (1)
widespread service use of large cost-reimbursable contracts for
environmental work where major projects are in the early stages and
(2) the lag involved in contractor payments and subsequent reporting
in the financial system.  DOD officials also told us that the
services had been able to obligate funds quicker through the use of
large cost-reimbursable contracts than through previous contracting
vehicles.  However, because the contracts are often for
time-consuming studies or site cleanups, expenditures have a tendency
to lag well behind the obligated amounts. 
Further, the gap between expenditures and obligations has widened,
since many projects are deferred or planned for execution in later
years.  As this practice continues, there is greater uncertainty as
to when and how much of the funds will actually be spent.  Charleston
Naval Shipyard officials, for example, told us they were expending
funds at a slower rate than expected because of uncertain cleanup
requirements and state regulatory reviews that were delaying many
contracted site contamination surveys.  In addition, at Pease Air
Force Base, BRAC officials, citing that available BRAC 1988 funds
were due to expire, obligated about $8 million in September 1995 for
future environmental monitoring and operating requirements extending
into fiscal year 1998.  The amount of this money that will actually
be spent will not be known for several years. 
------------------------------------------------------------ Letter :4
Our review of selected base closure sites and other analysis showed
that BRAC environmental costs are driven by several key factors. 
Among these factors are (1) the large number of contaminated sites
and associated extent of contamination, (2) the requirements of
federal and state environmental laws and regulations, (3) the lack of
cost-effective cleanup technology, and (4) property reuse plans. 
---------------------------------------------------------- Letter :4.1
The sheer magnitude of the BRAC program, coupled with the severe soil
and water contamination that has developed over decades of base
operations, is a key cause for the high cost of cleanup.  The closing
bases have a large number of contaminated sites, and it often becomes
very difficult and costly to determine the full extent and severity
of site contamination.  Further, the number of BRAC contaminated
sites has grown as more bases have been selected for closure and
additional contaminated sites have been identified.  In addition,
further study often reveals a number of areas of environmental
concern on the bases, thereby increasing fund expenditures to resolve
the concerns.  DOD officials told us that typically after a base is
slated for closure, the likelihood increases that additional
contaminated sites will be identified as more investigative work is
performed.  For example, before the closure of Pease Air Force Base,
Air Force officials had identified 18 contaminated sites; as the
closure process progressed and more investigative work was performed,
the number of sites grew to 55.  Table 5 shows the number of BRAC
contaminated sites and their disposition. 
                                Table 5
                Contaminated Sites at BRAC Closing Bases
                         (as of Sept. 30, 1995)
                                   Sites       Sites in
BRAC round                   completed\a     progress\b          Total
-------------------------  -------------  -------------  =============
1988                                 503            735          1,238
1991                                 287          1,044          1,331
1993                                 110            796            906
1995                                 552          1,310          1,862
Total                              1,452          3,885          5,337
\a These sites have either been cleaned or do not need any further
\b These sites are either awaiting cleanup funding or have some
ongoing work. 
Source:  DOD. 
DOD officials told us that the extent of site contamination is often
difficult, time-consuming, and costly to detect and may not be fully
determined until environmental cleanup is actually underway.  At
Pease Air Force Base landfill sites, for example, it was not known
whether contaminants existed below the water table level until
excavation was underway.  Also, according to Army officials, the Army
spent over $45 million--$20 million more than originally
estimated--for radioactive contamination cleanup at the Army Material
Technology Laboratory in Massachusetts.  The cost underestimation was
due largely to difficulties in accurately determining the extent of
the contamination caused by the reactor. 
Unexploded ordnance is another concern for many closing bases.  At
Mare Island Naval Shipyard, for example, potential unexploded
ordnance sites, which include dredge ponds and the waterfront, are
the result of decades of ordnance manufacturing, storage, and
disposal.  Navy engineers estimate that cleaning up these sites could
cost about $60 million. 
---------------------------------------------------------- Letter :4.2
The requirements of federal and state environmental laws and
regulations have a significant impact on the cost of environmental
cleanup.  Under the existing environmental legal framework, DOD must
comply with cleanup standards and processes associated with existing
laws, regulations, and executive orders in conducting assessments and
cleanups of its base closure property.  Although CERCLA and RCRA are
two of the primary drivers for the BRAC environmental program and the
ones that impact most closing bases, other laws or executive orders,
such as the Endangered Species Act or Executive Order 11990
(Protection of Wetlands), are directed to more unique areas of
concern that may exist at a BRAC base.  At Pease Air Force Base, for
example, BRAC officials had to consider threatened and endangered
species, sensitive habitats, wetlands, and historic sites in their
cleanup plans.  In response to the requirements to protect wetlands,
these officials were creating a 2.5- acre wetlands parcel at a cost
of about $100,000 to replace wetlands destroyed during cleanup at
another site.  Further, environmental laws and regulations vary by
state and often have more stringent requirements that tend to
increase cost.  For example, California's standard for clean drinking
water is 10 times more stringent than the federal standard, thereby
increasing cleanup costs when this standard is applied. 
BRAC officials told us that the current assessment and cleanup
process, as dictated by legal requirements, was complex, costly, and
time-consuming.  This description is consistent with our findings in
our review of high- priority site cleanup efforts at active bases.\10
For example, under CERCLA, DOD follows a detailed four-phase
process--preliminary assessment, site inspection, remedial
investigation/feasibility study, and remedial design/remedial
action--in cleaning up property for transfer.  Embodied in the
process are extensive requirements for documentation, studies, and
the need to interact frequently with Environmental Protection Agency
(EPA) and state officials and the public.  BRAC officials told us
that cleanups could require sustained action over many years--10
years in many cases--to achieve targeted goals.  Site studies can
take 4 or more years to complete, remedial designs may require 3
years, and cleanup may take another 3 years.  Delays are frequent as
federal and state regulators review and approve documents. 
An inherent part of the process that has undergone criticism is the
amount of time and money devoted to base contamination studies.  Our
prior work on environmental issues, for example, showed that DOD has
spent large amounts of money on studies but that actual cleanup
progress has been slow.\11 We recognize that the cleanup process is
driven largely by regulation and involves time-intensive steps. 
Therefore, many of the BRAC sites have not reached the actual cleanup
stage while several sites have been closed out as a result of study. 
The Congress has expressed concern and directed DOD to establish a
goal to limit, by the end of fiscal year 1997, spending for
administration, support, studies, and investigations to
20 percent of the funding for its active base program.\12 No such
restriction has been enacted for the BRAC program.  Although DOD does
not have readily available data that show overall funding devoted to
studies at BRAC bases, officials have stated that the amount has been
substantial.  However, DOD now states that more funding is being
devoted to actual cleanups, particularly for earlier round BRAC
bases.  Our review of the six bases we visited indicated considerable
amounts of money are being expended on studies.  Pease Air Force Base
officials estimated, for example, that about one-half of the $140
million they expected to spend would be for studies. 
\10 Environmental Cleanup:  Too Many High Priority Sites Impede DOD's
Program (GAO/NSIAD-94-133, Apr.  21, 1994). 
\11 Environmental Cleanup:  Too Many High Priority Sites Impede DOD's
Program (GAO/NSIAD-94-133, Apr.  21, 1994). 
\12 This goal was set forth in the National Defense Authorization Act
for Fiscal Year 1996 (P.L.  104-106, Sec.  323). 
---------------------------------------------------------- Letter :4.3
The technology used to clean contaminated property can be a key cost
factor.  In many cases, a cost-effective cleanup technology may not
be available.  Cleaning up unexploded ordnance, for example, may be
not be practical or affordable, especially when there are large
parcels of property.  Removal work can involve burning and clearing
thousands of acres to apply existing cleanup techniques, which are
labor-intensive, dangerous, time-consuming, and costly.  For example,
preliminary estimates by the Army Corps of Engineers indicate that
cleaning up unexploded ordnance at Fort Ord may cost over $200
million.  Most of the cost would be attributable to an 8,000-acre
impact range. 
"Pump and treat" systems, which are shown in figure 2 and commonly
used to treat groundwater contamination, can also cost millions and,
depending on site conditions, be only marginally effective in some
cases.  Further, such systems may need to operate for decades after
the base has closed and the property has been transferred.  As this
occurs, DOD continues to incur costs for operating and maintaining
the system as well as monitoring water quality results.  At Norton
Air Force Base, for example, the Air Force spent over $10 million
between 1980 and 1992 to investigate contamination of a groundwater
plume that extends beyond the base boundary and threatens water
supplies in a nearby community.  A small-scale pump and treat system
was initially installed in 1989; beginning in 1991, a larger-scale
pilot system was constructed and subsequently upgraded in 1995. 
Further, in March 1993, the Air Force contracted for a $5.5-million
pump and treat system to be located near the base boundary, and in
August 1994, it increased the funding by $1.6 million.  Even though
the project was costly, its effectiveness was not certain, and Air
Force officials agreed to modify the system to treat the off- base
water or reimburse the community if the remediation action was not
   Figure 2:  Pump and Treat
   System at Pease Air Force Base
   (See figure in printed
---------------------------------------------------------- Letter :4.4
Intended property reuse can also increase the costs associated with
cleaning up contaminated property.  In particular, reuse plans are a
major determinant most often in the cleanup standard levels (e.g.,
residential or industrial) used as criteria in cleanup plans. 
Cleanup of a site that will be transferred to the Department of
Interior for nonpublic use, for example, will typically not be as
thorough or costly as a site that will be used for residential
We noted several cases in which reuse or public concern associated
with reuse has, or could, impact costs.  For example, the Air Force
has been conducting site investigations since 1982 in search of
radioactive wastes in soils and groundwater on or near Norton Air
Force Base.  In fiscal year 1995, it obligated $2.7 million, and in
May 1996 was planning to obligate an additional $185,000.  The Air
Force cited high community interest, scrutiny, and review as
significant in its search for the waste.  At Lowry Air Force Base, a
change the community has proposed for the 77-acre landfill site could
cost the Air Force an additional $1 million to $5 million for
cleanup.  The Air Force had originally planned for limited use (e.g.,
nature trails) at the site; however, in March 1996, the redevelopment
authority identified alternative uses for the property, such as a
golf course and facility to be used along with the adjacent existing
golf course or polo and soccer fields.  Air Force officials told us
they were studying these alternatives because they would require more
extensive and costlier remediation actions. 
------------------------------------------------------------ Letter :5
Potential options exist for reducing the cost of cleanup.  We are not
taking a position on these options because of policy and legislative
implications associated with them.  Rather, we are presenting them in
the context of tradeoffs they represent so that congressional and
defense decisionmakers have the information for their consideration
as they explore ways to reduce program costs while achieving
environmental cleanup goals.  The options we analyzed are (1)
deferring or extending certain cleanup actions, (2) modifying
existing laws and regulations, (3) adopting more cost-effective
cleanup technologies, and (4) sharing costs with transferees. 
---------------------------------------------------------- Letter :5.1
Deferring or extending certain cleanup actions for those sites where
there is no immediate danger to human health or the environment has
the potential for reducing environmental costs at closing bases. 
Under current policy, DOD is advocating an expedited approach to BRAC
cleanups in the interest of making property quickly available to
communities and others for reuse.  Because of the higher priority
given to cleanups, DOD officials told us that preclosure cleanup
schedules are typically accelerated after a base is slated for
closure.  However, although accelerating cleanup may offer faster
transfer possibilities, it may also cause program cost increases,
according to DOD officials.  For example, McClellan Air Force Base
officials estimate that their cleanup efforts, originally targeted to
cost between $705 million and $925 million through fiscal year 2034,
could cost $1.2 billion to $1.8 billion under an accelerated program
ending in fiscal year 2018.  The officials said longer time frames
allow for more cost-effective sequencing of the cleanup work and the
use of new technologies that become available. 
Deferring or extending cleanup within acceptable bounds of risk may
decrease costs but not without programmatic tradeoffs and cost risks. 
It would delay transfer of property to users and be contrary to the
spirit of the President's base closure community reinvestment
program, announced in July 1993, for the economic recovery of those
communities affected by the closure process.  Delaying cleanup could
promote significant community dissatisfaction and delay reuse--even
for clean parcels that may be adjacent to contaminated property. 
It must be recognized that, on a case-by-case basis, deferring or
extending cleanups may increase costs.  Because DOD may be required
to retain unneeded property for a longer period of time, it may incur
added caretaker costs.  However, according to DOD officials, the
caretaker costs would be relatively minor in comparison to the
cleanup cost.  Further, environmental costs may increase if
contamination spreads or is not otherwise contained while cleanup is
Deferring or delaying cleanup at certain sites requires that a
priority system be in place to provide decisionmakers with a means to
determine the sequence in which projects are funded.  The order in
which sites are cleaned can impact the overall cost of environmental
cleanup.  DOD has stated that its highest priorities for BRAC
environmental cleanup are for those sites that pose an immediate
danger to human health or the environment or are needed for prompt
reuse.  With regard to protecting health and the environment, in
September 1994, DOD issued guidance for a prioritization framework,
referred to as Relative Risk Site Evaluation, that categorizes
contaminated sites into high-, medium-, and low-relative risk groups. 
Relative risk is based on an evaluation of contaminants, hazards,
pathways, and receptors in groundwater, surface water, sediment, and
surface soils.  Even though relative risk categorizations are
important, service officials said that relative risk is one of many
factors they consider in prioritizing funding at BRAC bases.  Other
considerations include reuse plans; cultural, social, and economic
factors; and statutory requirements and legal agreements.  These
officials said that, with the exception of immediate health and
safety threats, reuse plans are often the most important factor for
funding and that some sites with lower environmental risk are funded
in the interest of reuse. 
Although most interested parties we spoke to endorsed the need for
setting priorities, many had concerns about DOD's current efforts. 
For example, EPA officials were concerned about the (1) lack of
objectivity in DOD's relative risk model, (2) large number of sites
not included in the evaluation, and (3) lack of regulatory
involvement in the development of the criteria.  State environmental
representatives were also concerned that a large number of sites,
some of which may be high priority, had not been evaluated.  One
state official indicated many states had already established cleanup
priorities that may differ from DOD's because of differences in risk
evaluations.  DOD officials told us that the use of Restoration
Advisory Boards, as advisors in the prioritization process, have had
strong input in community-based decisions, taking into account risk
and other factors.  We did not evaluate the effectiveness of these
---------------------------------------------------------- Letter :5.2
Modifying laws and regulations that must be considered when
performing environmental cleanup at closing bases could ease the
severity of requirements and help reduce costs.  However, the
benefits of modifying certain aspects of existing laws and
regulations may not be achieved without tradeoffs.  For example,
easing cleanup standards and associated requirements may increase
environmental risk and create unacceptable danger to human health and
the environment, thereby increasing public resistance and
DOD has supported a number of proposed legislative and administrative
changes that would reduce the cost of environmental cleanup and
expedite the closure process.  Many of these have been debated by the
Congress in the past and are still under consideration.  In this
regard, DOD supports efforts to improve the remedy selection process
by using realistic site-based risk assumptions and foreseeable future
land uses in the decision-making process.  According to Navy
environmental officials, emphasizing site-based risk assumptions over
specific cleanup standards has the potential for reducing costs. 
Further, DOD supports wider use of generic or presumptive remedies in
certain cases to reduce lengthy study time and cost.  DOD also
supports legislative revision as to what constitutes an
uncontaminated parcel and further clarification that such parcels be
excluded from placement on the National Priorities List.\13 This
revision would reduce cost and allow more expedited transfer of
uncontaminated property.  EPA has indicated its support for many of
DOD's proposals, but state officials and private representatives we
talked to were more skeptical. 
Changing regulatory requirements can have a significant impact on
costs, as illustrated by recent changes being recommended in
California's approach to remediating contamination resulting from
leaking underground fuel storage tanks.  In late 1995, a report by
the Department of Energy's Lawrence Livermore National Laboratory,
California, concluded that, where soil conditions were favorable,
natural processes, rather than other cleanup actions, could be relied
on to clean up petroleum contaminants left by leaking underground
fuel storage tanks.  The report estimated that traditional cleanup
costs had been averaging $150,000, thereby prompting state water
control board officials to recommend the use of natural processes for
cleanup of those sites where contamination was deemed to be of low
If these same procedures were used at DOD facilities where favorable
soil conditions existed, costs could be reduced.  At Norton Air Force
Base, the Air Force has spent about $5 million to remediate about
20,000 cubic yards of contaminated soil at former underground storage
tank sites.  Air Force officials estimate that about 20 percent of
the cleanup may not have been needed and could have been left to
natural processes.  At Pease Air Force Base, officials estimated that
about $2.5 million was spent to clean up fuel contaminated soils
around 10 pumphouses.  Figures 3 and 4 show underground tank removal
operations at Pease Air Force Base.  At Mare Island Naval Shipyard,
Navy officials estimate that about 50 underground storage tanks and
about 42,000 feet of abandoned underground fuel lines require cleanup
at an estimated cost of $26.9 million.  Under the new policy for
underground storage tank cleanups, this estimate may be reduced to
$13.5 million.  However, Air Force and Navy officials noted that the
new policy is not statewide at this point and is being adopted only
in certain regions of the state. 
   Figure 3:  Underground Fuel
   Storage Tanks at Pease Air
   Force Base
   (See figure in printed
   Figure 4:  Underground Fuel
   Storage Tank Removal at Pease
   Air Force Base
   (See figure in printed
In another example, bases were once required, before the issuance of
EPA guidance in September 1993, to develop cleanup plans for certain
groundwater problems, even though the proper technology was not
available.  However, EPA guidance now recognizes that some
groundwater cleanups are technically not possible.  According to Air
Force BRAC officials, the Air Force was thus permitted to cease
further consideration of several remedial actions proposed for one
site contaminated by a waste solvent that could not be removed with
known technology.  The officials said this change saved between $2.3
million and $7 million, depending on which remedial action
alternative would have been selected. 
\13 The National Priorities List is EPA's list of highest priorities
for further study and cleanup. 
---------------------------------------------------------- Letter :5.3
New and more cost-effective technology may offer cost reduction
potential for cleaning up groundwater, unexploded ordnance, and other
contaminants.  The Congressional Budget Office has reported that (1)
DOD could reduce costs by delaying expensive remediation projects
when contamination posed no imminent threat and cost-effective
technology was lacking and (2) in the long run, new cleanup
technologies represented the best hope of addressing environmental
problems with available DOD funds.\14 The replacement of many of the
current remediation technologies with more cost-effective methods of
environmental cleanup could have a significant effect on reducing the
cost of cleanup. 
However, although new technologies may offer significant cost
reduction potential, there are programmatic tradeoffs or risks
involved with awaiting for the emergence of more cost-effective
technology.  First, because many BRAC bases are being cleaned up
under accelerated schedules, many new technologies now under
development may not be available for widespread use for years after
the technology is needed.  Awaiting for new technology would thus
delay program progress.  Second, newer technology may not be more
cost- effective than existing technology.  Third, the outlook for DOD
research and development funding of new technology may not be as
optimistic as in previous years, as DOD's budget has been drastically
reduced for this activity in the last 2 fiscal years.  Last,
contractors and regulators who have become comfortable with certain
cleanup methods may be reluctant to adopt new technologies and
unwilling to risk using an unfamiliar cleanup technology. 
Our discussions with interested parties showed a wide range of views
on environmental technology issues.  The likelihood that entirely new
technologies will quickly and inexpensively solve major contamination
site problems is slim, according to Air Force and Navy environmental
program managers.  They said more gains could be made by improving
and refining cleanup standards and existing technologies.  Army
officials told us that, with the exception of unexploded ordnance,
they had the technology needed for addressing most contamination at
their BRAC bases.  EPA officials told us that new technology could
reduce the costs of cleanup and that deferring cleanup until new
technology becomes available might be an option in certain
situations.  One state regulator said that new technology was needed
for many contaminants because no cost-effective treatment was
available and some prevalent problems were not being addressed. 
Another state official said that, except for unexploded ordnance and
groundwater contamination, the services had the necessary technology
and should not delay cleanups. 
\14 Statement for the Joint Hearing on the Defense Environmental
Program before the House National Security Committee (Mar.  24, 1995)
and Statement on Environmental Cleanup Programs in the Departments of
Defense and Energy before the Subcommittees on Military Procurement
and Military Readiness, House Committee on National Security (Mar. 
21, 1996). 
---------------------------------------------------------- Letter :5.4
Allowing the receiving party, or transferee, to pay fully or in part
for environmental cleanup would reduce DOD's costs, but there are
several barriers to achieving cost reduction in this manner. 
Existing legislation to encourage sharing costs has not been
effective, in part, because of unknown future liabilities and
difficulty establishing the value of the property.  According to DOD
officials, communities have not expressed an interest in assuming the
cost of cleanup to receive property more quickly because there is
apparently little incentive to do so. 
Current legislation allows DOD to transfer property without cleaning
it up, provided that the recipient agrees to do so.  Specifically,
section 2908 of the National Defense Authorization Act for Fiscal
Year 1994
(P.L.  103-160) authorizes DOD to enter into an agreement to transfer
by deed real property or facilities with any person who agrees to
perform all environmental restoration, waste management, and all
environmental compliance activities that are required under federal
and state laws, administrative decisions, agreements, and
concurrences.  However, this transfer may be made only if DOD
certifies to the Congress that cleanup costs are equal to or greater
than the fair market value of the property or facilities.  If,
however, the cleanup costs are lower, the recipient must pay the
difference between the fair market value and such costs.  Although
less revenue would be received from the property transfer, DOD would
not incur the cost of cleanup. 
Officials we talked to were unaware of any instances in which
property had been transferred under the above provision.  They cited
a number of reasons for this situation, including (1) difficulty in
determining the fair market value of property to be transferred, (2)
little incentive for investors to assume the risks of unknown
liabilities, and (3) stipulations that the transferee gives up the
right for future indemnification if further contamination is found. 
------------------------------------------------------------ Letter :6
We requested written comments on a draft of this report from DOD, but
none were received.  However, officials from the Office of the Deputy
Under Secretary of Defense (Environmental Security), Under Secretary
of Defense (Comptroller), and the Navy provided us with oral
DOD concurred with the findings and the general tone of the report. 
The officials, however, offered a number of technical clarifications
to improve the accuracy of the report.  We considered their comments
and have made changes as necessary in the appropriate sections of
this report.  For example, DOD commented that our use of specific
environmental terminology was inconsistent throughout the report.  We
agree and have clarified our use of the terms. 
------------------------------------------------------------ Letter :7
To determine the amount of money devoted to the BRAC environmental
program, we interviewed DOD and military service comptroller
officials and reviewed documentation that tracked BRAC financial
information.  We analyzed data to determine the relative growth over
time in the amounts of money allocated, obligated, and expended for
cleanup efforts.  We inquired as to the rationale underlying
financial growth trends.  To determine the estimated total cost for
the BRAC environmental program, we aggregated (1) actual DOD fund
allocations through fiscal year 1995 for all BRAC rounds, (2)
estimated base program completion costs reported in the Defense
Environmental Restoration Program Annual Report to Congress for
Fiscal Year 1995, and (3) estimated program management costs through
To find out how funds are being used and gain insight as to why
cleanup efforts are so costly, we visited six closing bases,
interviewed DOD headquarters and base-level BRAC officials, discussed
cleanup actions with selected state and community representatives,
reviewed base cleanup documentation, and observed site cleanup
actions underway.  Our base-level visits were intended to get a mix
of military services' 1988, 1991, and 1993 BRAC round bases that had
obligated significant funds for environmental cleanup.  We did not
visit 1995 BRAC round bases because, at the time our review, DOD was
in the early stages of the closure process at these bases and had not
obligated significant BRAC funds for environmental efforts.  We
visited the following BRAC bases:  Norton Air Force Base, California;
Pease Air Force Base, New Hampshire; Army Material Technology
Laboratory, Massachusetts; Fort Ord, California; Charleston Naval
Shipyard, South Carolina; and Mare Island Naval Shipyard, California. 
We also visited the following military service agencies involved in
the award and management of contracts associated with environmental
study and cleanup actions:  Air Force Center for Environmental
Excellence, Texas; Army Environmental Center, Maryland; Army Corps of
Engineers, Sacramento District, California; and Naval Facilities
Engineering Command, Engineering Field Activity (West), California. 
To identify potential opportunities and tradeoffs for reducing
environmental costs, we analyzed a number of cost reduction proposals
that have surfaced in recent years.  We reviewed documentation to
include past work by us, DOD, the Congressional Budget Office, and
the Congressional Research Service, along with congressional efforts
to revise existing environmental legislation.  We discussed cost and
programmatic tradeoffs with affected parties, including BRAC
officials; EPA officials; community environmental representatives;
and state environmental officials overseeing BRAC issues in
California, New York, South Carolina, and Texas. 
We performed our work between April 1995 and May 1996 in accordance
with generally accepted government auditing standards. 
---------------------------------------------------------- Letter :7.1
Unless you publicly announce its contents earlier, we plan no further
distribution of this report until 10 days after its issue date.  At
that time, we will send copies to other congressional committees; the
Secretaries of Defense, the Air Force, the Army, and the Navy; the
Director, Office of Management and Budget; the Administrator, EPA;
and other interested parties.  We will also make copies available to
others on request. 
If you have any questions, please call me on (202) 512-8412.  Major
contributors to this report are listed in appendix III. 
Sincerely yours,
David R.  Warren, Director
Defense Management Issues
=========================================================== Appendix I
Title                                   Summary
--------------------------------------  ----------------------------------------
Primary sources of authority
Base Closure and Realignment Act of     Requires the Department of Defense (DOD)
1988 (P.L. 100-526, 102 Stat. 2623)     to comply with a variety of laws--
and the Defense Base Closure and        including the Comprehensive
Realignment Act of 1990 (P.L. 101-      Environmental Response, Compensation,
510, 104 Stat. 1808),                   and Liability Act (CERCLA) and National
10 U.S.C. 2687                          Environmental Policy Act--to effect
                                        federal real property disposal at most
                                        base realignment and closure (BRAC)
CERCLA, section 120, 42 U.S.C. 9620     Defines the roles for the Environmental
                                        Protection Agency (EPA), state agencies,
                                        and DOD components. CERCLA section 120
                                        compliance is required for all federal
                                        facilities, including BRAC bases.
                                        Requires for property transfer that all
                                        remedial action necessary to protect
                                        human health and the environment has
                                        been taken. Also requires the federal
                                        government to assume financial
                                        responsibility for any additional
                                        cleanup of DOD-caused pollution
                                        discovered in the future.
National Oil and Hazardous Substances   Sets criteria for an installation's
Pollution Contingency Plan, 42 U.S.C.   inclusion on the National Priorities
9605                                    List (NPL).
Executive Order 12580                   Authorizes DOD components to conduct
                                        site investigations and cleanups.
Superfund Amendments and                Used as the basis for the Defense
Reauthorization Act,                    Environmental Restoration Program.
section 211, 10 U.S.C. 2701             Authorizes removal of unexploded
                                        ordnance and unsafe buildings and debris
                                        on BRAC bases.
National Environmental Policy Act, 42   Defines the process for examining
U.S.C 4331                              potential impacts to the environment
                                        that may result from disposition of BRAC
                                        installation property. Requires that
                                        reuse alternatives are identified and
                                        characterized and that the environmental
                                        impacts associated with each are
State laws and other statutes           CERCLA section 120(a)(4) states that
                                        "State laws concerning removal and
                                        remedial actions, including State laws
                                        regarding enforcement, shall apply to
                                        removal and remedial action at
                                        facilities owned or operated by a
                                        department, agency, or instrumentality
                                        of the United States when such
                                        facilities are not included in the
                                        National Priorities List."
Other relevant federal environmental laws
Resource Conservation and Recovery Act  Establishes the framework for managing
(RCRA),                                 solid wastes, including hazardous
42 U.S.C. 6901, et seq.                 substances. Applies to both NPL and non-
                                        NPL installations.
Toxic Substances Control Act,           Regulates specific chemical substances,
15 U.S.C. 2601, et seq.                 including polychlorinated biphenyls and
Federal Water Pollution Control Act     Regulates discharges of pollutants into
("Clean Water Act"),                    waters. Requires the establishment of
33 U.S.C. 1251, et seq.                 criteria and standards to protect water
                                        quality. Requires federal permits for
                                        dredge and fill operations.
Safe Drinking Water Act, 42 U.S.C.      Establishes regulations to protect human
300f, et seq.                           health from contaminants in drinking
Clean Air Act, 42 U.S.C. 7418           Regulates releases of pollutants into
                                        the air.
Federal Insecticide, Fungicide, and     Establishes a registration program for
Rodenticide Act,                        pesticides. Governs disposal of
7 U.S.C. 135, et seq.                   pesticides.
Other selected federal laws impacting land use
American Indian Religious Freedom Act,  Protects and preserves access to
42 U.S.C. 1996                          religious sites of Native Americans.
Archaeological and Historic             Protects historic or archaeological
Preservation Act,                       resources threatened by federal dams or
16 U.S.C. 469                           construction projects.
Bald and Golden Eagle Protection Act,   Governs activities and facilities that
16 U.S.C. 668                           may threaten protected birds.
Coastal Zone Management Act, 16 U.S.C.  Requires federal agencies to observe
1451-1464                               state Coastal Zone Management Plans for
                                        activities near shorelines.
Endangered Species Act, 16 U.S.C.       Protects the habitat of threatened or
1531-1544                               endangered species by controlling land
                                        use and regulating construction.
Fish and Wildlife Coordination Act, 16  Requires federal agencies to consider
U.S.C. 663                              the effect of their land and water use
                                        activities on fish and wildlife.
National Historic Preservation Act, 16  Establishes a program for the
U.S.C. 470                              preservation of designated historic
                                        properties throughout the nation.
Water Resources Development Acts,       Establishes a national goal of no net
33 U.S.C. 2283 and 2317                 loss of wetlands. Provides for
                                        mitigation of negative effects of water
                                        resource projects on fish and wildlife.
Wild and Scenic Rivers Act, 16 U.S.C.   Preserves and protects the free-flowing
1271                                    condition of designated rivers.
========================================================== Appendix II
                              (Dollars in thousands)
                    1988          1991          1993          1995         Total
----------  ------------  ------------  ------------  ------------  ============
Air Force
Allocated       $397,850      $583,928      $276,444       $56,398    $1,314,620
Obligated        394,974       458,497       172,082         7,784     1,033,337
Expended         273,604       264,189        61,785            66       599,644
Allocated        527,462       341,247        39,331        48,582       956,622
Obligated        522,954       227,380        26,328         4,496       781,158
Expended         302,474       135,421        13,033           145       451,073
Allocated         54,807       466,604       488,154        70,955     1,077,520
Obligated         48,998       414,643       453,938        31,588       949,167
Expended          24,594       276,524       225,490         1,606       528,214
Defense agencies
Allocated              0             0        11,748         1,666        13,414
Obligated              0             0         8,427             0         8,427
Expended               0             0         2,689             0         2,689
Allocated       $980,119    $1,391,779      $812,677      $177,601    $3,362,176
Obligated       $966,926    $1,100,520      $660,775       $43,868    $2,772,089
Expended        $600,672      $676,134      $302,997        $1,817    $1,581,620
Note:  Data are as of March 31, 1996. 
Source:  Our analysis of DOD data. 
========================================================= Appendix III
James F.  Wiggins
John J.  Klotz
James R.  Reifsnyder
David F.  Keefer
Lionel C.  Cooper, Jr. 
*** End of document. ***

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