oversight

Chemical Safety Board: Status of Implementation Efforts

Published by the Government Accountability Office on 1999-04-29.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                    United States General Accounting Office

GAO                 Testimony
                    Before the Subcommittee on Veterans Affairs, Housing and
                    Urban Development, and Independent Agencies,
                    Committee on Appropriations, U.S. Senate


To Be Released

At 5:30 p.m., EDT   CHEMICAL SAFETY
                    BOARD
Thursday,

April 29, 1999




                    Status of Implementation
                    Efforts
                    Statement for the Record
                    David G. Wood, Associate Director
                    Environmental Protection Issues
                    Resources, Community, and Economic Development
                    Division




GAO/T-RCED-99-167
Mr. Chairman and Members of the Subcommittee:

We appreciate this opportunity to provide a statement for the record for
use in the Subcommittee’s hearing on the fiscal year 2000 budget request
for the Chemical Safety and Hazard Investigation Board (the Board). The
Board recommends steps to enhance industrial safety based on its
investigations of accidental release of toxic and hazardous chemicals and
its other activities. The Board was funded at $4 million in fiscal year 1998,
its first year of operation, and $6.5 million in fiscal year 1999. The Board is
required to submit its budget request concurrently to the Office of
Management and Budget (OMB) and the Congress. For fiscal year 2000, the
Board has requested $12.5 million while the President’s budget, after OMB’s
review, has requested $7.5 million for the Board.

You expressed concern that the new organization’s operational costs,
especially salaries, might grow too quickly and become excessive. At your
request, we reviewed the status of the Board’s efforts to carry out its
mission. Specifically, we are providing information on the status of the
Board’s (1) investigations and recommendations, (2) pay structure and use
of staff, and (3) contracting activities. We are also providing information
on our concerns about the Board’s actions.

In summary, we found the following:

• The Board has undertaken 11 full-scale investigations of chemical
  incidents and issued reports with recommendations on 2 of them. In
  addition, draft reports are in process for the remaining investigations.
  The Board’s recommendations have aimed at encouraging industry and
  government agencies to upgrade their procedures, training, and
  communication of hazards.
• As of February 1, 1999, the Board had 20 employees widely distributed
  among its offices, such as investigations, general counsel, and external
  relations, and 4 Board members. The average compensation is about
  $89,000 in salary and benefits. The Board expects this average
  compensation to be reduced to about $68,000 if it receives approval to
  hire up to 60 employees.
• We identified eight contracts between the Board and other entities that
  cost $100,000 or more. The total cost of the 8 contracts was about $3
  million. About one-third of this amount directly supported the Board’s
  investigations. The balance involved acquiring such goods and services
  as the development of a web site, the establishment of a chemical
  incident data base, and the production of an informational video.



Page 1                                                        GAO/T-RCED-99-167
             • We have two main concerns about the Board’s actions to date. First, the
               Board has not updated its August 1997 Business Plan to reflect the
               unanticipated backlog of ongoing investigations. Critical to any
               effective plan for addressing this backlog is an examination of how the
               Board chooses cases to investigate and how it allocates its existing and
               future resources. Second, the Board has not instituted formal, written
               procedures for its staff to follow in awarding and managing contracts.
               Such procedures can help ensure adequate internal controls and help
               avoid some contracting problems encountered by the Board.



Background   The Board was created as an independent agency under the Clean Air Act
             Amendments of 1990. 1 However, the Board did not become operational
             until 1998 because of funding constraints. The act directed the Board to (1)
             investigate and report on the circumstances and probable causes of any
             accidental release of toxic or hazardous chemicals resulting in a fatality,
             serious injury, or substantial property damages; (2) recommend measures
             to reduce the likelihood or the consequences of accidental releases and
             propose corrective measures; and (3) establish regulations for the
             reporting of accidental releases. The act authorized the Board to conduct
             research and studies with respect to the potential for accidental releases
             and to issue reports concerning the prevention of chemical accidents to the
             Environmental Protection Agency (EPA) and Occupational Safety and
             Health Administration (OSHA). Furthermore, the Board is to coordinate its
             activities with other federal agencies such as the National Transportation
             Safety Board (NTSB) and OSHA.

             According to relevant legislative committee reports, the Board is modeled
             after the NTSB, which retained the lead role in investigating transportation-
             related chemical incidents. The Board has no enforcement authority and a
             very limited regulatory role. Because the EPA and OSHA also have
             responsibilities in responding to chemical incidents, the Board has
             developed memorandums of understanding with these agencies to
             coordinate efforts and minimize potential duplication if they are
             investigating the same incident.

             Chemical incidents occur regularly and often have serious consequences.
             According to a Board report, during the period 1987 to 1996, about 605,000


             1
                 42 U.S.C. § 7412(r)(6).




             Page 2                                                       GAO/T-RCED-99-167
                           known chemical incidents occurred, including about 250,000 chemical
                           incidents that occurred at fixed locations occupied by industrial and
                           commercial businesses and about 260,000 incidents related to the
                           transportation of chemicals. 2 On average, 127 incidents per year involved
                           fatalities.



Status of Investigations   To carry out its mission of enhancing industrial safety, the Board conducts
                           full-scale investigations and limited investigations (called reviews) of
and Recommendations        chemical incidents and makes recommendations. The status of these
                           activities is discussed in the following sections.


Investigations             By statute, the Board investigates accidental chemical releases resulting in
                           a fatality, serious injury, or substantial property damage. These
                           investigations often involve extensive site visits, evidence collection, and
                           analytical work. Because of limited resources, the Board decides where to
                           initiate investigations. In these decisions, it weighs such factors as the
                           expected impact of its work and the potential for similar incidents at other
                           locations. The Board uses in-house and contractor staff, but assigns
                           leadership to its own staff. The lead investigator is expected to direct the
                           work, visit the site as necessary, and manage the report writing process.
                           While the Board currently follows the Department of Energy protocols for
                           accident investigations, it is now developing its procedures and expects to
                           complete them by next year.

                           The Board started five full-scale investigations in 1998 and, through March
                           30, six in 1999.3 Of the 11 investigations, 2 from 1998 have been closed and
                           in each case, a report was issued. The first investigation took about 9
                           months and the second about 11 months from start to finish. Draft reports
                           are in process for the remaining three investigations begun in 1998 and the
                           six investigations begun in 1999.


Reviews                    The Board conducts reviews when resources are not available to perform a
                           field investigation, but knowledge about an incident could still provide
                           valuable information for preventing future incidents. A review is

                           2
                               The 600K Report – Commercial Chemical Incidents in the United States, 1987-1996   . February 1999.

                           3
                               Unless otherwise noted, all references to years will be fiscal years.




                           Page 3                                                                            GAO/T-RCED-99-167
                  performed within the Board’s offices and relies mainly on documents and
                  reports from other federal agencies and state agencies, as well as the
                  companies’ internal investigations. According to the Board, it takes about
                  40 days to gather and analyze information, which may not be available until
                  6 months after the incident, and additional time may be used to verify the
                  facts and resolve legal and technical issues.

                  The Board started 14 reviews in 1998 and 9 in 1999. The Board has not
                  issued any reports stemming from its reviews. As of March 30, 1999, it had
                  closed 6 reviews with no report, was preparing a draft report for 3 ongoing
                  reviews, and had yet to begin drafting a report for 14 ongoing reviews.
                  According to an agency document, the six reviews were closed without
                  reporting because, among other reasons, information was insufficient or
                  conflicting, and some cases had limited application. Board officials told us,
                  however, that the draft reports for the ongoing reviews are expected to
                  result in valuable information for preventing future incidents.



Recommendations   As of March 30, 1999, the Board made a total of 22 recommendations in its
                  two issued reports. The first report, dated September 1998, involved an
                  accident at the Sierra Chemical Company in Nevada, where four workers
                  were killed. The report contained 16 recommendations. The Board
                  directed 10 recommendations to Sierra Chemical and other explosive
                  manufacturers, 3 to the Institute of Makers of Explosives, 2 to the
                  Department of Defense, and 1 to the Nevada Occupational Safety and
                  Health Enforcement Section. The recipients of the first report have agreed
                  to take corrective actions on 3 recommendations and are considering
                  whether to take actions on the remaining 13.

                  The second report, dated February 1999, involved an accident at a Union
                  Carbide plant in Louisiana, where 1 worker was killed. The report
                  contained six recommendations. The Board directed two
                  recommendations to Union Carbide and one each to the National Institute
                  for Occupational Safety and Health, OSHA, the Center for Chemical
                  Process Safety, and the Compressed Gas Association. The Board has
                  received a formal response from Union Carbide and is aware of actions
                  being considered by two other recipients of the recommendations. The
                  company identified new safety policies that it would follow.

                  The Board’s recommendations have aimed at encouraging industry and
                  government agencies to upgrade their procedures, training, and
                  communication of hazards. For example, the Board suggested that



                  Page 4                                                       GAO/T-RCED-99-167
                             explosive manufacturers evaluate their safety programs to ensure that (1)
                             written operating procedures are specific to the process being controlled;
                             and (2) procedures and chemical hazards are communicated in the
                             languages understood by personnel. It also suggested that the Institute of
                             Makers of Explosives develop safety training guidelines and distribute the
                             Board’s report to its member companies. A listing of each recommendation
                             and its status is provided in appendix I.

                             To obtain recipients’ reactions to the Board’s recommendations, we
                             contacted the Department of the Army and OSHA. Officials from both
                             agencies told us that the reports were on target. An Army official indicated
                             that his agency was considering the recommendations, and an OSHA
                             official confirmed that the agency intended to implement the
                             recommendation.

                             A Board official said the Board plans to have a system in place to track
                             recommendations by the spring of 1999. According to a draft directive, this
                             system will be called the Safety Recommendation Tracking System and will
                             track recommendations from the time they are issued until they are closed.
                             The system will be used to follow-up on open recommendations and keep a
                             permanent record of all recommendations.



Current and Planned          The Board established a single-location organization with a central
                             management office and five program functions, located in Washington, D.C.
Staffing Levels,
Responsibilities, and
Salaries

Current Staffing Level and   As of February 1, 1999, the Board had 24 employees, including 4 of the 5
Responsibilities             Board members. It expects to grow from 24 to 30 employees, including an
                             additional board member, by the end of fiscal year 1999 and to 60
                             employees by the end of 2000 if its budget request of $12.5 million is
                             approved. According to its August 1997 Business Plan, the Board planned
                             to grow to 88 employees in 2000, but it has now extended its timeline for
                             this level of staffing to the end of 2001.

                             Table 1 identifies the allocation of staff, both current and planned, and
                             assigned responsibilities in the agency organizational structure.




                             Page 5                                                       GAO/T-RCED-99-167
Table 1: The Board’s Staffing Levels, Current and Planned, and Responsibilities, by Organizational Unit

                    Current    End Of 1999          End Of 2000
                    Staffing       Staffing             Staffing
Office              (2/1/99)     (Planned)            (Planned)      Responsibilities
Board member                                                         Reviews and approves reports, recommendations, and
                           3              4                   4      regulations
Chairman/Chief                                                       Provides daily program supervision and ongoing operational
executive officer                                                    planning and evaluation; provides budgeting, technical
and                                                                  writing, and overall support to the organization
management                 4              7                   9
General counsel                                                      Provides full range of administrative and programmatic legal
                           3              3                   9      services
Safety programs                                                      Directs design of safety policies and programs for the Board;
                           1              2                   7      oversees recommendations
Investigations                                                       Conducts accident investigations and reviews; prepares
                           5              6                  13      reports
External                                                             Disseminates public and media information; acts as liaison
relations                                                            with business and academia; conducts governmental
                           4              4                   9      relations and international activities
Information                                                          Oversees information technology systems and operational
technology                 4              4                   9      programs; conducts administrative operations
Total                     24             30                  60
                                           Note: The head of the Office of General Counsel also acts as head of the Office of Safety Programs.
                                           Source: The Chemical Safety Board.




Salaries                                   As of February 1, 1999, the Board had one GS-7 staff member, one GS-12,
                                           two GS-13s, 16 GS-14s or above, and 4 Board members. With this grade
                                           structure in place, the average annual salary is $81,146, excluding benefits,
                                           for on-board employees. (See app. II for more details.) Combining salaries
                                           and benefits, the average annual compensation per employee will be an
                                           estimated $89,100 at the end of 1999. Board officials said that the 1999
                                           average salary will decrease as the Board hires more employees and the
                                           personnel base on which the average salary is computed increases. In fact,
                                           the Board is requesting $4.1 million in personnel compensation and
                                           benefits in 2000 for 60 positions; that would result in an average annual
                                           compensation package, combining salaries and benefits, of $68,183 per
                                           employee in 2000.

                                           In a proposal to the Office of Personnel Management, the Board asked
                                           approval for six senior executive positions. After consulting with OMB, the
                                           Office of Personnel Management approved one permanent and two



                                           Page 6                                                                        GAO/T-RCED-99-167
                         temporary positions. The Office said that it was awaiting the completion of
                         this ongoing GAO study and it was obligated to maintain a reduced number
                         of senior executives in the government. The Office of Personnel
                         Management told the Board that its request would be re-evaluated during
                         the fall, 2000-2001 biennial assessment period.



Contracting Activities   The Board contracted with outside entities to help carry out its mission
                         during 1998 and 1999. Excluding the contract for renting office space, we
                         identified eight contracts costing $100,000 or more. 4 The total cost of these
                         contracts was about $3 million. Table 2 provides information on these
                         contracts.




                         4
                             We excluded the contract for leasing office space because of its nondiscretionary nature.




                         Page 7                                                                                GAO/T-RCED-99-167
Table 2: Board Contracts of $100,000 or More, 1998 and 1999

                                                                                                                                    Amount
Contractors          Purpose/description of contracts                                                                              obligated
Oak Ridge National   Investigative support. The contractor assists the Board by conducting several investigations and
Laboratory (ORNL)    preparing reports, including managing investigations, collecting evidence, and conducting
                     interviews. Strategic Plan. The contractor assists the Board in the development of a 5-year
                     information technology plan. ORNL is a Department of Energy laboratory that provides support
                     to various federal agencies. The $758,000 listed here is the cost of requested services during                $758,000
                     1998; as of March 1999, the Board has requested an additional $915,000 of services.                            915,000
Battelle Memorial    Investigative support. The contractor assisted the Board in conducting the Sierra Chemical
Institute            investigation in Nevada, including labor and material for technical services and preparing a
                     written report of the chemical incident.                                                                       410,000
Tri-Data             Establishment of chemical incident baseline and database. The contractor analyzed and
                     prepared a summary report on 10 years of data from five federal government agencies’ data
                     bases to establish a chemical incident baseline. Currently, the Board is designing a chemical
                     incident data base that will be located at the Board and populated with data from at least the five
                     government data bases. The data base is to be used to help show where, when, and how often
                     incidents are occurring in a particular area. The information will form the basis for
                     recommendations on programs, regulations, and other actions to help reduce chemical
                     incidents. The report is scheduled for completion by May 31, 1999.                                             350,000
Bell-Atlantic        Internet and Intranet web site development. The contractor is expected to create and maintain a
                     web site with documentation that includes file structures, database table structure, site
                     architecture, and security information. A technical person from the contractor is dedicated full-
                     time to the Board. The cost is not to exceed $231,000 through September 1999.                                  231,000
Rowland              Informational video. In August 1998, the Board contracted with Rowland to produce a video that
Productions          portrays what the agency does. The intended audience for the video includes the general public,
                     industry, employee and environmental groups, and government officials. Five companies
                     competed for the contract. The selected vendor’s offer includes plans for video insets tailored for
                     specific audiences. Work was temporarily suspended on the video because of the press of other
                     business in early 1999.                                                                                        160,000
Federal Emergency    Internet service. The Board contracted with FEMA to host, update, and administer the Board’s
Management           web site and e-mail at a cost up to $100,000 in 1998. National Emergency Coordination Center.
Agency (FEMA)        During 1998 and 1999, FEMA provides the Board with a 24-hours-a-day, 7–days-a-week
                     communications center that supports the Board at a cost of $50,000 per year. (The 1998 charge
                     was prorated.)                                                                                                 137,000
Bell-Atlantic        Helpdesk support. This is a 1999 award that covers helpdesk support and local area network
                     support.                                                                                                       130,000




                                              Page 8                                                                       GAO/T-RCED-99-167
                                                                                                                                     Amount
Contractors           Purpose/description of contracts                                                                              obligated
National Ground       Software development. In July 1998, the Board contracted with the National Ground Intelligence
Intelligence Center   Center, an organization within the Department of Defense, to develop a civilian version of military
                      intelligence software that will help a facility determine where its safety systems are prone to
                      failure and how to best address the problems. The Center would develop a prototype initially
                      then build toward a full operational capability that the Board plans to make available to
                      companies for their confidential use. Software development would continue for a number of
                      years. The total cost is not yet known, but the Board obligated $100,000 in 1998 funds for this
                      purpose and expects to spend another $200,000 each year from 2000 through 2002, if funds are
                      made available.                                                                                                100,000
Total                                                                                                                             $3,191,000
                                               Note: Dollar amounts are rounded to the nearest thousand.
                                               Source: The Chemical Safety Board.




Concerns About the                             On the basis of our review of the Board’s actions to date, we have two main
                                               concerns. First, the Board has not updated its Business Plan to reflect the
Board’s Actions                                unanticipated backlog of ongoing investigations. Second, the Board has no
                                               written procedures for its staff to follow in awarding and managing
                                               contracts with outside entities.


Updated Business Plan                          In its August 1997 Business Plan and support for its 1999 budget
                                               submission, the Board set forth its expectations that it would be able to
                                               complete its investigations within 6 months and conduct from 5 to 10
                                               investigations during 1998 and from 13 to 19 investigations during 1999.
                                               However, the Board has completed and reported the results for two
                                               investigations since commencing operations in January 1998. These
                                               investigations took 9 and 11 months from start to finish. Actual in-the-field
                                               investigations have been concluded for another seven investigations, and
                                               draft reports have been in process since as long as April 1998. The Board
                                               has also yet to issue any reports based on its reviews. It closed 6 reviews
                                               without a report and, as of March 30, 1999, has 17 open reviews. Draft
                                               reports are in process for 3 of the 17 open reviews. Board officials told us
                                               that their expectations for conducting investigations in 1999 were based on
                                               getting requested funding. Also, their agency was not yet fully operating,
                                               and existing investigation resources were needed to complete the backlog
                                               of open investigations and reviews. As a result, the Board could undertake
                                               no new investigations from mid-March 1999 through the end of the fiscal
                                               year in September. On March 29, the Board wrote to this Subcommittee
                                               confirming its freeze on new investigations.




                                               Page 9                                                                       GAO/T-RCED-99-167
                                      In our view, the unanticipated backlog and the slower-than-expected
                                      progress in completing ongoing investigations and reviews raise questions
                                      about how the Board decides which incidents to look into and how it
                                      allocates its staffing and financial resources. The Board does not intend to
                                      update its August 1997 Business Plan but is working with OMB to develop a
                                      strategic plan by February 2000 that complies with the Government
                                      Performance and Results Act. The Board intends to identify the criteria for
                                      selecting incidents in this strategic plan and reallocate resources as a
                                      management decision after addressing the backlog.

Criteria for Selecting Incidents to   According to Board officials, about 200 chemical incidents are reported to
Investigate and Review                the Board each day. Fatalities, serious injuries, and significant property
                                      damage often occur, and the Board does not have the resources to conduct
                                      an on-site, full-scale investigation of every incident with serious
                                      consequences or even a limited review of such incidents. In deciding
                                      which incidents to investigate and review, the Board uses criteria weighted
                                      toward accidents in which fatalities occur. Some judgment is still, of
                                      course, involved, and the Board uses factors such as a high level of interest
                                      that should make it easier to implement recommendations and the
                                      potential for similar incidents at other locations. The Board would have to
                                      weigh the various consequences of revising the criteria in ways that would
                                      either “raise or lower the bar”—in other words, be more or less selective in
                                      choosing which cases to pursue. By raising the bar, workload would be
                                      limited. Although factors such as complexity of the incident and the extent
                                      of cooperation by company officials affect how quickly cases can be
                                      completed, a more limited workload would help to speed up the closure of
                                      existing cases. By lowering the bar, workload would be increased and
                                      existing cases would tend to take longer to close or additional resources
                                      would need to be allocated to investigations, helping the Board to complete
                                      these cases more quickly.

Allocation of Resources               The Board’s Business Plan, in setting expectations for the new
                                      organization, assumed a $4 million budget in 1998 and a $7 million budget
                                      in 1999. In its formal budget request, the Board asked for $8.2 million for
                                      1999. In its actual appropriations, the Board received the full $4 million in
                                      its first year and $6.5 million in 1999. According to the Board, it spent 30
                                      percent of its $4 million budget in 1998 on incident prevention (primarily
                                      investigations and reviews). The Board expects to spend 37 percent of its
                                      1999 budget and 44 percent of its 2000 request for this purpose.

                                      Regardless of what the Board expected its funding levels to be, the Board
                                      has encountered difficulties in handling its workload. An examination of



                                      Page 10                                                      GAO/T-RCED-99-167
how the Board would allocate its existing resources and spend future
funds—assuming differing levels of funding in 2000 and beyond—is critical
to any effective plan for addressing the backlog of ongoing investigations
and reviews.

One area for review is the Board’s staffing allocation. According to the
plan, the Board would establish a flat organization. To the maximum
extent possible, it would buy services when and as needed, thereby keeping
staffing levels and overhead costs low, and permitting the bulk of resources
to be devoted to its mission. As of February 1, 1999, the Board employed
four in-house investigators; one began work in July 1998, two in September
1998, and the other one in November 1998. The investigators have a
caseload of two to three investigations and five to six reviews. At times,
the Board also uses noninvestigative staff, such as program analysts, to
assist with investigations and reviews. The Board also allocated four staff
members to its external relations and three to its general counsel offices. If
its budget request for 2000 is approved, the Board intends to have 13 (or 22
percent) of its 60 total personnel in its investigations unit compared with 9
each in its external relations and general counsel units (together equaling
30 percent of total staffing). The Board would allocate the remaining 29
staff (48 percent) to other offices, such as the Chairman’s staff, safety
programs, and information technology.

For comparison purposes, we obtained resource allocation information
from NTSB—the agency considered in the legislative history as the model
for the Chemical Safety Board. NTSB investigators comprise 40 percent of
the organization’s staffing while personnel in its legal and public affairs
offices together comprise about 5 percent. 5 Like the Board, NTSB
investigators work on multiple investigations at a time and use contractors
to support their work. Unlike the Board, NTSB can obtain voluntary
services—labor hours that are not reimbursed—from outside entities. The
Board has recommended to the Congress that it be authorized to obtain
these voluntary services.

To deal with the existing backlog of cases and expected new cases, the
Board could also review its use of funds now spent on contracting. About
two-thirds of these funds are not related directly to investigations but


5
  Of the 402 personnel on board in April 1999, NTSB has 162 investigators, 11 employees in its Office of
General Counsel, and 11 staff members (excluding those performing the function of working with
affected families after an accident) in its Office of Government, Public, and Family Affairs. NTSB also
has other staff, such as Administrative Law Judges, performing legal-related work.




Page 11                                                                             GAO/T-RCED-99-167
                          support accomplishment of its mission in other ways. An updated Business
                          Plan would help the Board to determine the appropriate balance, at
                          different levels of funding, between using more of its resources to do
                          investigations versus investing in other mission-related activities.


Controls Over Contracts   In its Business Plan and other key documents, the Board stated that its
                          approach to doing business would emphasize contracting out or
                          “outsourcing.” The Board contended that doing so would enable it to avoid
                          the expense associated with establishing a large permanent administrative
                          infrastructure and having to make a long-term commitment of funds for
                          such items as space and equipment.

                          The Board pursued this approach within a week of its commencing
                          operations when it asked an outside entity to investigate an accident. A
                          chemical incident causing four fatalities occurred at Sierra Chemical
                          Company’s plant in Mustang, Nevada, on January 7, 1998. Two days later,
                          the Board wrote a letter to Battelle authorizing the contractor to begin
                          incurring labor and travel costs starting January 8 and before a formal
                          contract had been signed. According to the statement of work, Battelle
                          would provide labor and materials to assist the Board in the investigation
                          and would also provide a written report delineating the explosion. The
                          Board estimated the contract would be in the $250,000 range. The Board
                          believed that it was entering into a “work for others” arrangement with the
                          Pacific Northwest National Laboratory, which is owned by the Department
                          of Energy (DOE) and run by Battelle. Under a work for others
                          arrangement, a DOE laboratory may conduct work for other federal
                          agencies on a cost-reimbursable basis.

                          On the basis of our file reviews and interviews with Board officials, we
                          found that concerns surfaced almost immediately about the growing costs
                          of Battelle’s work. The Board was surprised to learn that it was using
                          Battelle directly rather than working through DOE’s Pacific Northwest
                          National Laboratory, with Battelle as a subcontractor. As a result, the
                          Board noted that it was being charged higher rates under a noncompetitive
                          arrangement with Battelle. According to Board officials, they attempted to
                          control costs by asking Battelle to take people off of the investigation and
                          proposing contract terms that put Battelle in the position of working
                          through the federal laboratory. The Board ultimately signed an agreement
                          with Battelle directly, dated March 17, 1998, to pay $410,000, including a
                          fixed fee of $54,000, for its services. On that day, a Board official wrote a




                          Page 12                                                      GAO/T-RCED-99-167
memorandum to the file that the Board was still trying to get information
from Battelle that would support the contract cost

The Board has taken some steps to ensure that a repeat of the problems
described earlier would not recur. First, it has decided not to use Battelle
directly again in a noncompetitive arrangement. Second, the Board has
employed a more structured approach for acquiring support for its
investigations. In an agreement with DOE’s Oak Ridge National
Laboratory, the Board identifies tasks, the laboratory estimates the costs
for performing those tasks, and the Board provides authorization and
reimbursement for services provided by the laboratory as appropriate.
The Board also receives a monthly report from the laboratory on progress,
accomplishments, status, and planned work for the next month. We
believe these are prudent steps for protecting the government’s interests.

In the Battelle case, formal, written contracting procedures--based on the
Federal Acquisition Regulation but tailored to the Board’s needs--were not
available to the staff. The Board told us that these procedures are now
being developed. However, more than a year has elapsed since it signed the
agreement with Battelle for which the Board expressed such concern. The
importance of instituting formal procedures is even greater given the
Board’s reliance on contracted support for not only investigations but also
other mission-related tasks.

Under the Federal Acquisition Regulation, contracting officers are
responsible for ensuring that applicable procedures have been followed
before an agency enters into a contract. For the major contracts we
reviewed, we found that the contracting officer has been the Board’s
Program Officer, the second-in-command in the organization, who has
multiple responsibilities. We asked the Board about its need for a full-time
contracting officer. The Board told us that there were only seven full-time-
equivalent employees in 1998, and the Board did not award enough
contracts to justify establishing and filling a contracting officer position.
The Board did not comment on its reasons for not establishing such a
position in 1999. In the Battelle case, even with a limited staff, such an
officer could have informed the Board of the proper procedures for
obtaining work-for-others-type assistance. If the Board does not consider it
cost-effective to establish a contracting officer position in-house,
alternatives such as the use of technical support from the General Services
Administration or another federal agency could be explored.




Page 13                                                      GAO/T-RCED-99-167
Scope and         To review the status of the Board’s efforts to carry out its mission, we
                  reviewed documents supplied by the Board related to its planning,
Methodology       budgeting, and programs; personnel data such as salary information; and
                  contract files. We interviewed officials from the Board; other federal
                  agencies, including the NTSB, OSHA, the Department of the Army, and
                  OMB. We conducted our work between January through April 1999 in
                  accordance with generally accepted government auditing standards.



Agency Comments   We provided a draft of this statement to the Board for its review and
                  comment. We met with the Chairman and other Board officials. They
                  generally agreed with the information contained in this statement but
                  provided clarifications and corrections, which we incorporated as
                  appropriate.

                  The Board also pointed to considerations that it believes, in the interest of
                  fairness, should be recognized. First, the Board has the unique status of
                  being a start-up agency. It did not have the advantages of having staff or
                  even office space and found itself putting an infrastructure in place to
                  provide services while at the same time beginning to provide those
                  services. The Board stated that our concerns about the unanticipated
                  backlog of investigations and absence of written procedures for
                  contracting should be viewed in the context of their being a new agency.
                  Second, the Board is expected to accomplish a broad and complex mission
                  but has only limited resources to do so. The Board said that while this
                  mission extends beyond investigations to other activities designed to
                  enhance industrial safety, the Board has had the equivalent of only 5 full-
                  time employees in 1998 and 24 in 1999.

                  We recognize in our statement that the Board is a start-up agency.
                  Accordingly, we believe the Board’s comments highlight the opportunity
                  the Board now has to consider its future allocation of staff and financial
                  resources. For example, the Board has greater flexibility as a start-up
                  agency to find the appropriate balance, at different levels of funding,
                  between using its resources to do investigations versus investing in other
                  mission-related activities.




                  Page 14                                                      GAO/T-RCED-99-167
Page 15   GAO/T-RCED-99-167
Appendix I

Status of Recommendations                                                                                                               AppIexndi




                                            Listing of the Board’s safety recommendations contained in the two
                                            investigation reports issued by the Board and the recipients’ responses to
                                            the recommendations—as of March 30, 1999



Table I.1: Investigation at the Sierra Chemical Company, Mustang, Nevada. Two explosions at an explosives manufacturing
facility killed four workers and injured six.

Recommendation
was directed to Recommendation                                         Aa   Db   Pc   Comments
Company and       Explosives manufacturers should evaluate the                        A bill pending in the Nevada state legislature
explosives        effectiveness of their explosives safety programs                   would require, among other things, that the
manufacturers     to ensure that:                                                     relevant state agency adopt regulations
                                                                                      establishing standards and procedures for
                                                                                      places of employment where explosives are
                                                                                      manufactured.

                                                                                      The company has not yet responded to the
                                                                                      Board’s recommendation letter. However, the
                                                                                      plant was destroyed in the blast and has not
                                                                                      been rebuilt. The Board will send a follow-up
                                                                                      letter to the company.
                  (1) Process hazard analyses include the                        X
                  examination of quantity-distance requirements,
                  building design, human factors, incident reports,
                  and lessons learned from explosives
                  manufacturers.
                  (2) Written operating procedures are specific to               X
                  the process being controlled and address all
                  phases of the operation.
                  (3) Procedures, chemical hazards, and process                  X    A bill pending in the state of Nevada would
                  safety information are communicated in the                          require that workers receive safety training in
                  language(s) understood by personnel involved in                     a language they understand.
                  manufacturing or handling of explosives.
                  (4) Explosives training and certification programs             X
                  for workers and line managers provide and require
                  the demonstration of a basic understanding of
                  explosives’ safety principles and job-specific
                  knowledge.
                  (5) Process changes, such as the construction or               X
                  modification of buildings, or changes in explosive
                  ingredients, equipment, or procedures are
                  analyzed and Process Safety Management
                  elements are updated to address these changes.
                  (6) Pre-startup safety reviews are performed to                X
                  verify operational readiness when changes are
                  made.




                                            Page 16                                                                GAO/T-RCED-99-167
                                               Appendix I
                                               Status of Recommendations




                    (7) All elements of OSHA’s Process Safety                       X
                    Management Standard are verified by performing
                    periodic assessments and audits of safety
                    programs.
                    (8) The employee participation program effectively              X
                    includes workers and resolves their safety issues.
                    (9) Explosive safety programs provide an                        X
                    understanding of the hazards and control of
                    detonation sources.
                    (10) The following issues are addressed in plant                X
                    design or modification:
                    • Operations in explosives manufacturing plants
                      are separated by adequate intraplant distances
                      to reduce the risk of propagation.
                    • Unrelated chemical or industrial operations or
                      facilities are separated from explosives facilities
                      using quantity-distance guidelines.
                    • Facilities are designed to reduce secondary
                      fragmentation that could result in the propagation
                      of explosions.
Institute of Makers (1) Develop and disseminate process and safety     X                 In February 1999, IME submitted a proposed
of Explosives (IME) training guidelines for personnel involved in the                    revision to OSHA’s explosives safety standard
                    manufacture of explosives that include methods for                   for the Board’s review. The proposed revision
                    the demonstration and maintenance of proficiency.                    includes a section on worker training. The
                                                                                         Board is studying the document and will
                                                                                         respond to IME.
                    (2) Distribute the Board’s report on the incident to    X
                    IME member companies.
                    (3) Develop safety guidelines for the screening of              X    IME will work on this recommendation at its
                    reclaimed explosive materials.                                       May meeting.
Nevada (OSHA)       (1) Increase the frequency of safety inspections of X                Nevada’s Governor signed an executive order
                    explosives manufacturing due to their potential for                  requiring inspections at least twice a year.
                    catastrophic incidents.
Department of       (1) Develop a program to ensure that reclaimed,                 X    Letter received from the Secretary of the Army
Defense             demilitarized explosives sold by the Department of                   stating that DOD will study the
                    Defense are free of foreign materials that can                       recommendation.
                    present hazards during subsequent manufacturing
                    of explosives.
                    (2) Provide access to explosives incident reports               X
                    and lessons learned information to managers and
                    workers involved in explosives manufacturing,
                    associations such as IME, government agencies,
                    and safety researchers.
Totals                                                                      3   0   13
                                               Source: Chemical Safety Board.




                                               Page 17                                                               GAO/T-RCED-99-167
                                                      Appendix I
                                                      Status of Recommendations




Table I.2: Investigation at a Union Carbide Plant in Hahnville, Louisiana. One worker was killed and an independent contractor
was seriously injured due to asphyxiation from nitrogen in confined space.


    Recommendation
    was directed to           Recommendation                                              Aa     Db   Pa   Comments
    Company                   (1) Post signs containing the warning “Danger,              X                Union Carbide submitted new safety
                              Confined Space: Do Not Enter Without                                         policies that address the
                              Authorization” or similar wording at potential                               recommendation. The Board is
                              entryways when tanks, vessels, pipes, or other                               studying these documents.
                              similar chemical industry equipment are opened.
                              When nitrogen is added to a confined space, post
                              an additional sign that warns personnel of the
                              potential nitrogen hazard.

                              (2) Ensure that the plant safety program addresses          X                Union Carbide submitted new safety
                              the control of hazards created by erecting                                   policies that address the
                              temporary enclosures around equipment that may                               recommendation. The Board is
                              trap a dangerous atmosphere in the enclosure if the                          studying these documents.
                              equipment leaks or vents hazardous material.

    National Institute for    (1) Conduct a study concerning the                                      X    NIOSH’s preliminary response raised
    Occupational Safety       appropriateness and feasibility of odorizing nitrogen                        technical issues regarding the
    and Health (NIOSH)        in order to warn personnel of the presence of                                feasibility of the recommendation.
                              nitrogen when it is used in confined spaces.                                 These issues will be discussed with
                                                                                                           NIOSH’s technical departments at a
                                                                                                           meeting scheduled for late April
                                                                                                           1999.

    Occupational Safety       (1) Issue a safety alert that addresses the hazards                     X
    and Health                and provides safety guidelines for the use of
    Administration            temporary enclosures that are erected around
                              equipment containing hazardous substances.

    Center for Chemical       (1) Communicate the findings of this report to your                     X
    Process Safety            membership.

    Compressed Gas            (1) Communicate the findings of this report to your                     X    CGA plans to publish an article on
    Association (CGA)         membership.                                                                  the Board’s report in its newsletter.

    Totals                                                                                2      0    4
a
    A = The recipient acted on the recommendation, and the Board’s review of the action is pending.
bD = The recipient decided to take no action on the recommendation.
cP = The recipient is considering whether to act on the recommendation.
Source: Chemical Safety Board.




                                                      Page 18                                                                  GAO/T-RCED-99-167
Appendix II

Grade Structure and Salaries of Board
Employees of February 1, 1999                                                                                  ApIpexndi




Table II.1: Grade Structure and Salaries of Board Employees, as of February 1, 1999

Office                           Start date   Position title                       Grade              Salary
Board members                    11/97        Board member                         EX-4             $118,400
                                 11/98        Board member                         EX-4              118,400
                                 12/98        Board member                         EX-4              118,400
Chairman/CEO and                 11/97        Chairman/Board member                EX-4              118,400
management                       12/97        Program Officer                      GS-15              94,098
                                 7/98         Management Analyst                   GS-14              70,855
                                 11/98        Program Analyst                      GS-14              68,570
Investigations                   9/98         Senior Investigator                  GS-15              80,658
                                 7/98         Investigator                         GS-14              82,284
                                 9/98         Investigator                         GS-14              75,427
                                 10/98        Program Analyst                      GS-7               27,508
                                 11/98        Investigator                         GS-14              82,284
Safety program                   6/98          Program Analyst                     GS-14              68,570
General counsel                  2/98         Attorney                             GS-15              99,474
                                 7/98         Attorney                             GS-14              79,999
                                 10/98        Attorney                             GS-13              63,829
External relations               1/98         Public Affairs Specialist            GS-15              94,098
                                 2/98         Public Affairs Specialist            GS-14              70,855
                                 8/98         Intergov. Relations Mgr.             GS-14              70.855
                                 1/99         Constituent Relations Mgr.           GS-14              68,570
Information technology           12/97        Program Analyst                      GS-12              48,769
                                 6/98         Program Analyst                      GS-13              65,763
                                 7/98         Computer Specialist                  GS-15              86,034
                                 2/99         Program Analyst                      GS-14              75,427
 Average Salary                                                                                     $ 81,147
                                              Source: The Chemical Safety Board.




(160467)                 eL
                          rtet                Page 19                                      GAO/T-RCED-99-167
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