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Q. 11: A critical feature of improved environmental management is establishing 

 priorities among programs on the basis of risks to public health and the environ- 

 ment. There have to be adequate scientific bases on which these priorities are de- 

 termined. What will a new Department of the Environment do to undertake this 

 critical activity? 



A. 11: The new Department will take the actions recommended in the 1990 report, 

 Reducing Risk: Setting Priorities and Strategies for Environmental Protection to 

 ensure that this nation uses all the tools at its disposal in an integrated, targeted 

 approach to protecting human health, welfare, and the ecosystem. A new Depart- 

 ment of the Environment will maintain and improve information on the nature, 

 extent and control of health and environmental hazards such as: toxicity of individ- 

 ual pollutants; exposures to harmful pollutants; and carcinogenic and other health 

 effects. The new Department would continue to refine cancer risk assessment meth- 

 odologies and to better understand and assess the effects of threshold (non-cancer) 

 toxicants on human health. Programs such as the Environmental Monitoring As- 

 sessment Program and other ecological research programs would develop informa- 

 tion on ecological risks and strengthen the Department's capability to assess the 

 health and functions of ecosystems and the options that are available for mitigating 

 ecological risks. These efforts will inform the public and Congress about what is 

 knowTi and what is not known about particular environmental risks and offer them 

 guidance on ways to reduce health and environmental risks. 



The Department would also use scientific methods to estimate which hazards 

 appear to pose the greatest risks to society and use this information as a key compo- 

 nent in developing environmental national environmental protection goals and pri- 

 orities with Congress and the public. The challenge for EPA will be to use this infor- 

 mation more effectively in its planning, budgeting and performance measurement 

 systems. Another challenge is to better communicate this information to state and 

 local environmental decision makers, given their role in managing environmental 

 risks. 



Q. 12: One of the greatest management weaknesses in EPA is the Superfund pro- 

 gram. GAO's report to us in January indicated that EPA has continually failed to 

 utilize basic cost control techniques including invoice reviews, audits, and inde- 

 pendent cost estimates. What specifically will you do about these weaknesses, 

 which EPA itself characterized as material weaknesses in its 1991 Federal Manag- 

 ers' Financial Integrity Act report? 



A. 12: Along with GAO, several EPA groups, including the Standing Committee on 

 Contract Management (SCCM) and the Administrator's Task Force on Superfund Al- 

 ternative Remedial Contracting Strategy (ARCS) Contracts, have made recommenda- 

 tions as to how basic cost control techniques may be strengthened. In response to 

 these recommendations, the following actions have been taken: 



1) Invoice Review: An OSWER directive, issued 01/31/92, requiring standard 

 review of cleanup contractor invoices is expected to result in improved cost con- 

 trol through withdrawal of unreasonable costs. In addition, in 1992, all Super- 

 fund managers were trained in contract cost control techniques. 



2) Audits: EPA's Office of Inspector General (OIG) has developed a strategy and 

 schedule to complete pending financial audits by 10/30/93. To increase control 

 over the scheduling of audits, those firms having EPA as their largest single 

 client will have audit responsibility transferred from the Defense Contracting 

 Audit Agency (DCAA) to EPA's OIG. 



3) Independent Government Cost Estimates: An OSWER Directive issued 01/ 

 31/92 requires use of independent government cost estimates on all projects 

 valued over $25,000. Superfund has also trained all of the Agency's Cost Estima- 

 tors in use of state-of-the-art cost estimating software. Finally, to ensure consist- 

 ency, Superfund has developed a cost estimating guidance for use by cleanup 

 project managers and support personnel. 



Continuing the implementation of these and subsequent recommendations of the 

 ARCS Task Force and SCCM will remain one of the program's highest priorities. 



Q. 13: GAO also notes that EPA's indemnification of its Superfund contractors 

 has been virtually unlimited, even though the law intended there be some limita- 

 tion and it is certain that Superfund contractors would work for much lower 

 limits. What do you intend to reduce Superfund's exposure to the unlimited liabil- 

 ities implied in these indemnifications? „ .,,. 1 i:. J 



A. 13: On January 25, 1993, EPA published Indemnification Guidelines in the Fed- 

 eral Register The Guidelines provide that: . , 



• No indemnification will be offered in new solicitations unless it can be shown 

 that the lack of indemnification was a prime cause of insufficient competition. 



