ENVIRONMENTAL NEWS Contractors look elsewhere as Superfund faces cuts, turmoil
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ongressional zeal to cut environmental programs and the uncertain future of EPA's Superfund program are prompting a growing number of remediation companies to look for work outside the federal government. The movement may lead to less expertise in the country's hazardous waste cleanup industry, warned industry observers. At least 3000 and as many as 10,000 workers employed by Superfund contractors were sent home without pay for one week because of the last government shutdown in December and early January. And under the EPA continuing budget resolution passed in January, Superfund is appropriated $1.16 billion, almost 30% less than in fiscal year 1995. The cuts have caused a general reduction in Superfund work, EPA officials said. Projects led by responsible parties are continuing, as are cleanups at sites operating under 1995 money, according to EPA. However, top agency officials speaking at a Feb. 26 hearing warned that even these programs, which do not rely on federal funds, are likely to stumble. At some 500 sites that do rely on federal Superfund trust fund money, work has slowed, report EPA's regional offices. These projects include sites on the National Priorities List (NPL) and non-NPL sites earmarked for recovery actions, both of which draw money from the trust fund. "We haven't started any new fund-led projects," said Robin Robinson, a high-ranking Superfund official. "We have a couple of key sites that we have funded, but it's not at our normal pace." For the contractors, the December shutdown confirmed what had been suspected for months. "It was a tremendous wake-up call to contractors and
to the people who work for them that the road wasn't paved with gold," said David Freeman, spokesperson for the Hazardous Waste Action Coalition, which represents nearly 100 firms with cleanup contracts. The shutdown may just speed up a general trend in the evershrinking hazardous waste remediation industry, said Joan Berkowitz of Farkas-Berkowitz, a Washington, D C , market research firm. The remediation market has always been finite, she noted, but with the Republican-led Congress eager to reduce federal funding, the end of the line for new cleanups "may come sooner rather than later."
Budget cuts, furloughs, and failure to move bills or continue the trust fund lead contractors to fear Superfund is in trouble.
"Companies in our industry are finding that the federal marketplace for construction and engineering firms presents a pretty grim picture," said William Birkhofer of the Sverdrup Corporation, a 6000-employee engineering firm with many Superfund contracts. Consequently officials in contracting firms say they are already looking for work in the private sector, where contracts are easier to obtain and the work can proceed more quickly. They also are turning toward the departments of Energy and Defense, according to Birkhofer. EPA has a history of enforcing
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punitive rules against its Superfund contractors, contractors say, and the agency has been unwilling to share risks with contractors as other government agencies do. However, the movement away from EPA is driven in large part by the changes on Capitol Hill, said Tom Dobbins, director of government programs for the American Consulting Engineers Council. Not only are companies feeling a financial pinch from the government shutdown, but they see that Congress has failed to reauthorize or reform Superfund and has not extended taxes on the chemical, oil, and large manufacturing firms that support the Superfund trust fund. The tax expired in December. The House Commerce Committee is revising the House Superfund reform bill, approved last year by a subcommittee. In the Senate, a bill was introduced but no votes were taken. Congressional sources expect the bills will remain tangled in the debate over retroactive liability (ES&T, Nov. 1995, 498A). Some contractors have also criticized EPA's management of the Superfund program, charging that the agency takes contractors for granted. They cite a letter sent in February by EPA Administrator Carol Browner to the congressional budget subcommittees in which Browner said the agency would implement budget cuts by reducing contracting services rather than furloughing agency employees. "We don't think a policy of essentially insulating the civil servants is fair," said Bert Conklin, president of the Professional Services Council. EPA's handling of the furlough has also been hit by some Republicans on Capitol Hill, who charge that agency officials closed Superfund sites in January to stir up budget support. Rep. Tom Davis (R-Va.) believes that EPA stopwork orders issued in early January were unnecessary because contractors were operating with
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leftover funding, according to a Davis aide. EPA officials "wanted to maximize the impact on the environment," and thus shut down the cleanups, said Chip Highsmith, Davis' legislative director. EPA decried the charges. "There are general contracting rules for the entire government," an EPA spokesperson said; these rules are applied to the Superfund contractors. In most cases, it would be illegal to require agencypaid personnel to remain at work when government pay was suspended, the official added. The budget belt-tightening is bound to encourage EPA and other government entities to retool their programs, industry observers said, and in some cases the trend may turn out positively. In the case of Superfund, the current climate might push forward liability reform so that less money is put into settling lawsuits and more into cleanups. "I would prefer an increase in funding, but the fact is that a drop in funding is a reality," said Dobbins. "We've got to take the lemons and make lemonade."
Already, companies that have worked on Superfund sites are looking at cleanups supported by government-industry partnerships, such as returning abandoned urban industrial sites to useable property.
"The shutdown was a tremendous wake-up call to contractors that the road wasn't paved with gold." — David Freeman, contractor spokesperson Some industry analysts worry that the drop in federal remediation money will harm the country's ability to protect human health and the environment. Dobbins said cuts in environmental programs across the board are having an impact on contracting firms in many areas, including those that construct drinking-water facilities and solid waste facilities or manufacture
industrial pollution control equipment. "Some of these folks are going to go out of business," he said. "With that, you are going to lose the expertise in the private sector." Firms that concentrate on offering innovative remediation technologies will be hurt because they will be forced to scale back, primarily because cleanups of the future are likely to favor "triedand-true technologies," Berkowitz said. And community activists who monitor local cleanups are also worried that Congress's budget cutting will mean fewer cleanup actions, said Charlotte Brody, organizing director for Citizens Clearinghouse for Hazardous Waste. Brody said meetings with EPA officials at local sites have been canceled; reports on alternative solutions have not been released; and 1996 construction dates have been pushed back. "I think we all fear that less money will translate into less cleanup and more reason for more delay," said Brody. —CATHERINE M. COONEY
Browner predicts damage to Superfund, environmental programs Stalled regulations, 40% fewer inspections, $63 million in uncollected fines, and a system of "environmental protection by triage" are the result of cuts to the EPA budget, said Administrator Carol Browner at a hearing held by House of Representatives Democrats on Feb. 26. Browner was particularly concerned about Superfund program cuts and testified that 68 major cleanup and recovery actions set to start this year will be halted because of budget cuts. An aide noted that another 20 cleanups were already stalled because of cuts made last summer by the rescission of unspent funds. "The longer cleanups are stalled," the aide said, "the more likely it is that cleanup plans must be redesigned. Meanwhile, the problems remain." The administrator discussed cuts to programs from drinking water to the air office, and she stressed how EPA reductions would influence aid to states. For instance, she said, cleanups at New Jersey's 81 Su-
perfund sites would be reduced by one-quarter; Massachusetts would lose $18 million in drinking-water and sewage treatment funds; and across the nation, communities would lose $712 million in water-related revolving funds. Overall, Browner said the agency staff was reduced by 10% (1500 employees) and the average age of departing staff was 34. In an interview following her testimony, Browner noted that 70% of cleanup activities are being paid for by private parties responsible for the pollution. But she warned that they were becoming increasingly cautious in their commitment. "They don't know what is going to happen. Their lawyers are telling them, 'Why should you be doing this right now when everything may be changing?' " She predicted a general slowdown in cleanup activities across the country and the creation of a backlog, which would require significant recovery time to get back on track. She compared today's confusion to
that of 1986 when Superfund reauthorization stalled in Congress. "It was an incredible era of uncertainty in which activities ground to a halt. It took the program two-and-one-half years to recover, and that is exactly what's about to happen again." Browner appeared with Bruce Babbitt, secretary of the interior, Lois Schiffer, assistant attorney general for environment and natural resources, Department of Justice, and community representatives who hammered the Republican-controlled Congress. The hearing was a Democratsonly affair and was held because the Republican majority refused to hold hearings on the budget cuts' impact, said Democratic staff. However, Republicans called the hearing a "mockery" and Sen. Christopher Bond (R-Mo.) called Browner "disingenuous" for saying she would work with Congress while taking part in "rhetorical grandstanding that has made compromise impossible." —JEFF JOHNSON
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