U.S. Hits State Handling of Superfund Cleanup Pacts

SACRAMENTO —  The U.S. Environmental Protection Agency has strongly 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 inspector general’s office, in a blistering report, recommended that the state be stripped of its authority under the federal Superfund cleanup program to write contracts on its own, without first obtaining federal approval.

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 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 that in others, the information could not 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 office’s findings and decide whether to follow the auditors’ recommendations.

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, state officials said they bypassed competitive bidding in some cases because of an immediate public health threat that required quick action. They complained that the federal bureaucracy was inflexible.

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

Although 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.

Hauling Liquids

To prevent toxic wastes at Stringfellow from contaminating the underground water supply for 500,000 Southern Californians, state officials began pumping water from beneath 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 bidding 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 Department of Health Services memo of Sept. 7, 1983, 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 state officials were also aware that 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.

Papac contended in an interview Tuesday that his firm’s practice of temporarily storing wastes before final disposal was not an infraction of state rules, as officials have alleged.

He also disputed the allegation that he was operating at a loss.

“I don’t know how they came up with that. . . . We made money on it,” Papac said.

The auditors contended that under federal rules, Papac should have been disqualified from the competition and should not have been awarded the contract.

At McColl, a dump for refinery wastes now partly covered by a golf course in a largely residential neighborhood, state officials in 1984 awarded a $1.4-million cleanup planning contract to Radian Corp. without competitive bidding.

The auditors contended that federal rules require 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. The cleanup work at McColl has been halted by a suit filed by officials from Kern County, where the wastes would be hauled.

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 $288,000 but lost the contract after an interview process, despite objections by the state’s attorneys and the EPA that the interviews were “subjective.”