U.S Hit State Handling of Superfund Cleanup Pacts

The U.S. Environmental Protection Agency has criticized the Deukmejian Administration’s handling of $28.5 million in contracts to clean up three of the state’s most notorious hazardous waste dumps--Stringfellow Acid Pits near Riverside, McColl refinery dump in Fullerton and the Purity Oil site near Fresno.

Auditors from the agency’s Office of Inspector General, which released a blistering report this week, recommended that the state be stripped of its authority under the federal “superfund” cleanup program to write contracts without first obtaining federal approval.

The auditors also urged EPA officials to hold up or deny $2 million in payments due the state because of alleged improper contracting procedures that led to excessive costs.

The investigators charged that the state Department of Health Services toxic substances unit failed to follow federal and state contracting rules by ignoring competitive bidding requirements or by failing to negotiate for the lowest possible price when competitive bidding was not required. The auditors also described the state toxics program as being in disarray, with crucial documents “located in different offices, under desks, in files and in a room under lock and key.”

The federal inspectors complained that in some cases it took more than a month to find records and in others the information couldn’t be found at all.

State officials refused to comment on the findings Tuesday.

“We see this as a draft report,” said Department of Health Services spokesman Bob Borzelleri. “We are not commenting on it.”

The EPA’s San Francisco regional office has until Nov. 8 to consider the inspector general’s findings and decide whether to follow his auditors’ recommendations.

The report, dated Aug. 8, was obtained by The Times from the federal agency under the Freedom of Information Act after state officials refused to release it. The auditors looked at 11 contracts awarded by the state for studies and cleanup operations at the three key sites between March, 1983, and August, 1984.

The federal officials concluded that the state’s deficiencies “eliminated free and open competition . . . and raised questions about the reasonableness of the prices for over $28 million of contracts awarded.”

The report included comments by the department, agreeing with some criticisms and denying many others. For example, the state officials said they bypassed competitive bidding in some cases because of an immediate public health threat, which required quick action. They complained that the federal bureaucracy was simply too inflexible.

Despite the disagreements, health services officials told the auditors that they have changed their procedures to deal with the objections.

While the federal agency has never withheld payments to California for work completed under the federal “superfund” program, the EPA has been cracking down on the state’s failure to meet its goals under a separate program for regulating the storage, disposal and transportation of hazardous wastes. Last year, the state lost $440,500 in federal funds for not meeting its objectives.

To prevent toxic wastes at Stringfellow from contaminating the underground water supply for 500,000 Southern Californians, state officials began pumping water from underneath the former dump site in 1982.

The federal auditors were highly critical of the contracts the state awarded for hauling the liquids away.

In several cases, the state granted the contracts without competitive bidding at prices that were described by the auditors as “excessive” and “unreasonable.”

When the department did go to bid, in 1983, it awarded the contract to Andrew Papac and Sons, a firm already involved in a dispute with the state Department of Transportation over an unrelated hauling contract. The auditors quoted an internal Sept. 7, 1983, Department of Health Services memo that pointed out that the Papac contract “would probably generate some ‘political heat’ in the sense that the department could be accused of awarding the bid to a contractor who has no experience in hauling contaminated liquids and was not a registered hauler at the time the bid was received.”

The auditors said that state officials were also aware Papac had underbid the contract and would operate at a loss. Six months later, the state canceled the Papac contract amid allegations that the hauler had violated state rules for transporting the hazardous Stringfellow waste.

The federal auditors contended that under federal rules Papac should have been disqualified from the competition and never awarded the contract.

The EPA has taken over operation from the state of a $4.3-million emergency treatment plant built at the Stringfellow site to pump and treat contaminated water leaking from the acid pits. The plant will begin test treatment of the hazardous waste water on Oct. 21, authorities said.

Within two to three weeks, if tests show that the treated effluent meets drinking water requirements, about 40,000 gallons a day will be piped through Orange County sewer lines and out to sea, said Andrew Schlange, general manager of the Santa Ana River Watershed Project Authority, a joint powers agency formed to manage water quality in the tri-county river basin.

An agreement between that agency and the Orange County Sanitation Districts requires the effluent to be treated to drinking water standards, although it will be pumped out to sea as waste water.

At McColl, a dump for refinery wastes now partially covered by a golf course and surrounded on three sides by expensive homes, state officials in 1984 awarded a $1.4-million cleanup planning contract to Radian Corp. without competitive bidding.

The auditors contend that federal rules required an open competition.

The federal audit team also contended that a $17.9-million cleanup contract to Canonie Engineers Inc. in 1984 included an unnecessary requirement that would have cost the state an extra $500,000. McColl cleanup work has been halted by a suit filed by officials from Kern County, where the wastes would be hauled. A Superior Court judge has ordered the state to do a full environmental review of the project.

Mike Golden, senior project manager on McColl for the state toxics enforcement division, said Tuesday that an environmental impact study is under way and could take up to a year. In the meantime, the EPA is reassessing cleanup alternatives, including on-site treatment, because of escalating project costs.

At the Purity Oil site near Fresno, the state in 1983 awarded a $749,000 contract for cleanup planning to Harding Lawson Associates. The runner-up firm bid only $288,000--but lost the contract after an interview process, in spite of objections by the state’s own attorneys and the EPA that the interviews were “subjective.”