Contaminated Sites Worth the Risk?

A client asks you to bid on grading for a trio of office buildings on property that was once a cyanide plant. A local chain wants help removing old tanks from six gas stations. You’re referred to a job where the property owner needs two building pads regraded for a parking lot, and he’s in a hurry. While you’re working, demolition crews will be tearing down two factory buildings that date back to the 1950s. All of this looks like solid work-what’s the problem?

Plenty. If you take any of these jobs, you’re playing with fire unless your employees are trained to handle what they might encounter on a hazardous materials site and are properly equipped with personal protective gear; you’re carrying pollution liability insurance; you’ve checked with federal, state, and local regulatory agencies and made your way through the maze of hazmat regulations; and you’ve checked about required coverage under the state’s workman’s compensation laws. Not only could you or your workers be exposed to potentially dangerous contamination, you could also be subject to a maximum of $7,000 in fines just from OSHA alone, and you might be opening yourself up to a long chain of liability that could take many years and lots of dollars to sort out.

Not that there isn’t money to be made for grading and excavation contractors who want to work on sites containing hazardous wastes (remediation companies, which specialize in cleaning up hazmat sites and petroleum contamination, don’t typically do their own grading). But this is only if you’re fully prepared and have invested the necessary time and money. Being careful doesn’t cut it. When it comes to pushing dirt around on a known contaminated site or one that has the potential to be contaminated, being prepared is the name of the game.

“With this kind of work, you probably want to work as an apprentice to somebody for several years,” advises Gus Rodriguez, senior project manager for HDR Engineering in Tampa, FL. “It’s nothing to fool around with.” There can also be some difficulty interpreting the hazardous materials-handling regulations that contractors must abide by when working with hazardous materials or petroleum contamination. For example, regulations that apply to federal or state projects, such as Superfund cleanup sites, differ for private projects. While material was collected for this article from various regulatory agencies, the same disclaimer routinely came up: it depends. It depends on the nature and scope of the job, the types of materials a contractor will be handling, what state he is located in, and how many employees are on payroll. And along with “it depends” comes the caveat that it’s the employer’s responsibility to determine which aspects of the various regulations apply to him and his set of circumstances. Rodriguez’s position as a hazardous materials specialist is testimony to the level and complexity of information on which contractors must be up to speed. For contractors thinking of the hazmat business, having someone on salary or a consultant ready to help sort out legal responsibilities makes good sense and will pay for itself in time, money, and aggravation.

“There’s really nothing out there in the way of hazardous contamination that can’t be dealt with one way or the other,” states Rodriguez, “either by cleaning it up, remediating it, encapsulating it, or even sometimes avoiding it. But if you start moving this stuff around haphazardly, you’re going to have all kinds of problems with the regulatory agencies, and it could end up costing you a fortune. If you follow the rules and do what the regulators tell you to do, if you follow a systematic approach, and if you hire only specialized licensed people, it’s definitely going to minimize your efforts, your costs, and your worries.”

Find Out What’s Onsite

The first thing a smart contractor will do before he considers a job he suspects might contain hazardous materials (anything from toxic waste to asbestos) is take a cue from civil engineering firms that routinely work in the hazmat field, as well as remediation specialists, and ask the client whether a Level One survey has been conducted on the site. A Level One survey, the first of three levels of inquiry that can be applied to hazmat sites, is a review of how the property has been used. The goal is to identify any past or present sources of contamination. A Level One survey typically applies when property is transferred from one owner to another and, in many cases, is required by banks before they’ll lend on the property. It is also the first step in whatever efforts are made to clean up a piece of contaminated property. A Level One insures the grading contractor from getting in over his head.

“As a contractor, if you’re doing any clearing or excavation, I would ask the owner straight out if he has a Level One on the property,” suggests Rodriguez. “In the business, we call it ‘due diligence.’ If he says yes, then ask to see it. You’ll want to know if the property was declared clean or if the survey contained any recommendations about further Level Two testing-soil and groundwater samples, for example.” Any further testing must be done before the contractor sets foot on-site; otherwise he has no idea of what kind of contamination he might be dealing with and how to protect himself and his employees. Contractors should not only know what types of contamination were uncovered but also what was done about them. The reason the process is referred to as due diligence is because it provides property owners recourse under the federal Resource Conservation and Recovery Act that delineates responsibility for contaminated sites. Basically, federal law states that if a new property owner makes a prudent effort, is duly diligent about possible site contamination, and ends up finding contamination, he or she can look back to the previous owner for cleanup.

If the client admits a Level One study has not been conducted on the site or he was unaware that it should be done, the contractor should recommend that he have it done. On a single piece of property, the process should take about a week. (Many civil engineering firms offer this service. It’s not advised that the contractor take on a Level One survey unless he has experience. Grading and excavation contractors might consider offering it, but only after they have acquired the appropriate knowledge and experience, Rodriguez advises.)

The Level One survey provides a complete record of the property’s prior ownership and use, going back as far as possible. In addition to whatever was manufactured, processed, or produced on the site, the survey should include a rundown of what raw materials were used and how they were transported on and off the site. It should also describe any current manufacturing processes and the present operation’s record of hazardous materials violations, if any. Common sources of information include environmental databases, such as storage-tank tracking surveys, insurance company records, aerial photographs available through the United States Geological Survey and the Army Corps of Engineers, local zoning agencies, property deeds (which provide information on deed restrictions), fire department and tax assessor records, and federal and state lists of known contaminated sites. The US Farm Bureau and individual state pesticide control boards are sources for information on agricultural properties. Some Level One surveys go as far as checking with employees of ongoing operations for clues to the property’s history, as well as employees of operations on neighboring properties. Knowing what’s been going on within a 1-mi. radius of the property in question is also recommended.

Other signs of potential contamination are easily observed on the site, such as unhealthy-looking vegetation, unusual depressions in the surface of the soil, any unusual grading that might suggest dumping, and soil that’s discolored. Also be on the lookout for debris, such as tanks and other kinds of storage containers, located on the surface. For contractors who are new to this kind of investigation and want to have something to help them evaluate the results of an owner’s Level One, the American Society of Testing and Materials has a 23-question checklist, the Transaction Screening Questionnaire, that can be a helpful guide.

The Level One survey should also examine plans or specifications for any demolition scheduled for the site in order to confirm the presence or absence of asbestos and lead in paint or lead pipe. The survey should also investigate the presence of any underground tanks, any suspicious drums that might have previously turned up on the property, or any evidence of hydrocarbon or chemical contamination. “If there is any lead or asbestos present, it should all be taken down and removed before the contractor gets started,” Rodriguez points out. “Neither the contractor nor any of his crew should ever come in contact with it.” Grading contractors should think of this Level One investigation as a risk assessment-an evaluation of what employees might be exposed to when they bring their equipment on-site. With a Level One study in place, the contractor can decide whether he’s prepared to take the job or not.

If the owner admits that the Level One investigation turned up contamination, the next step is to find out what was done about it: how it was identified and how it was handled-removed, cleaned up, capped, etc. Unless the contractor is familiar with hazardous substances and their health effects, it might be worth bringing in a consultant at this stage. Occasionally, cleanup will cost more than the site is worth, and owners end up abandoning development of the property. “It’s best to be informed about the materials you will be working with and how you will handle them,” says Rodriguez. “Don’t be too eager to underbid a job of this nature.”

OSHA Steps in

Contractors who decide that a job is worth doing despite the fact that the site is or might be contaminated must complete OSHA-specified training. State laws often supersede federal requirements, so contractors should check with the department of public health, labor, or commerce and industry in individual states to ascertain whether the state has its own OSHA-approved plan by which they must abide. Beatrice Arceo, who answered questions about California’s workers’ comp requirements, says that although California does not require additional coverage for hazmat sites, some states do. She advises that companies check before bidding a job, especially if they have employees in more than one state. OSHA representatives were generally vague about what level of training a grading and excavation contractor must certify that his or her employees have completed. They recommend employers first consult the federal Hazardous Waste Operations and Emergency Response Standard 29CFR1910.120. (Check the Web at or For EPA regulations, call the hotline at 800/424-9346 or check the Web site at

According to Karen Heckmann at OSHA in Des Plaines, IL, the 24-hour course is likely to be appropriate for grading and excavating employees who aren’t necessarily anticipating finding hazardous materials on a site. However, she stresses that the decision about whether a 40- or 24-hour course is required is up to the employer. Heckmann also cautions that contractors should be aware of state standards. “This is not something people should take lightly,” she warns. “Operators should plan for this.” Fines for noncompliance with OSHA regulations can go as high as $7,000; Heckmann calls a $5,000 fine “conservative.” Although contractors are not likely to get nabbed in one of OSHA’s random inspections, which are generally focused on fixed workplaces and installations, Heckmann explains that violators have been identified on a “drive-by” basis. “We also get referrals from other agencies. It could be a fire marshal in the case of someone who is doing tank removal, or it could be the state or local EPA, depending on what permitting is involved.”

OSHA doesn’t supply the training it requires but leaves it to the private sector and continuing education programs at universities. The catalog for one OSHA contract site describes the 24-hour program as a three-day course covering environmental regulations, hazard awareness, health and safety plans, personal protective clothing and equipment, and monitoring and waste management. The four-day, 40-hour course covers hazard identification, minimization of risks through engineering controls, work practices, personal protective gear, and monitoring. According to this catalog, the 24-hour course is $375 and the 40-hour course is $650.

Personal Protective Equipment

Employees must also be equipped with the required personal protective equipment (PPE), again selected by the employer, to safeguard against specific hazards they might encounter during their work on a particular site. OSHA documents remind employers that selection of the appropriate PPE is a complex process that should take into consideration such key factors as identification of the hazards (or suspected hazards), their routes of potential contamination (inhalation, skin absorption, ingestion, and eye or skin contact), and the efficacy of the protective materials to provide a barrier against those hazards. The greatest level of skin, respiratory, and eye protection is Level A. This includes a full-face, self-contained breathing apparatus, a totally encapsulating chemical-protective suit, coveralls and long underwear (optional), chemical-resistant gloves and boots, and a hard hat. Level B applies when the highest level of respiratory protection is necessary but with a lesser level of skin protection. It includes the breathing apparatus, hooded chemical-resistant clothing (overalls and long-sleeved jacket, coveralls, a one- or two-piece chemical-splash suit, disposable chemical-resistant overalls), and the rest of the Level A paraphernalia with the addition of an optional face shield. Level D is the lowest level of projected exposure and specifies only a work uniform; boots; outer, chemical-resistant (disposable) boots; and safety glasses or chemical splash goggles as applicable.

Confused? There’s more. The regulations include a full range of descriptions on all the situations in which these various levels of gear should be worn, the idea being to help an employer match the circumstances he expects to encounter with the OSHA models.

Rodriguez answers the next logical question of whether or not your employees can come back to you if they become ill. “Yes, I’m sure they can,” he speculates. “We had a case like that in St. Petersburg, Florida, when they built the stadium for the Sun Devils. The owners didn’t do a real thorough Level One when they bought the property, and it turned out that back in the ’30s there was a coal gasification plant located on the site. They started digging, found the contamination, and had to stop the project. Some $1.4 million later, they finally got the site cleaned up to the point where they could continue with the work, but there were lawsuits that arose from some of the workers. The workers didn’t win, but they did take the city and county government to court saying that they had had ill health because of the contamination.” And whether the employer wins or not, it still costs money.Grading and excavation contractors who opt to work on contaminated sites must also be covered with the appropriate level of pollution liability insurance. Although environmental laws are designed to impose liability on property owners and operators, experts familiar with environmental case law warn that in some circumstances, courts have also held contractors liable. Their advice is that, at a minimum, contractors should enter into a written agreement with their client that clearly delineates the contractor’s responsibilities and specifies that any decisions on the disposal of any pollution or contaminates found during the course of excavation falls on the property owner. Civil engineering firms that work in this area also suggest that a contractor document in writing whatever he does in case any kind of claim is made against him. They point out that insurance companies are fond of this kind of documentation by their customers.

While all of this might sound formidable, one environmental attorney suggests that as long as a contractor takes reasonable precautions and does a reasonable and professional job, his chances of being called on the carpet are minimal. The problem comes when an operator makes conditions worse: spreads the contamination or increases costs associated with the job through activities that make him liable under legal provisions covering professional incompetence. While insurance is essential for even occasional work on hazardous sites, some attorneys counsel that it is not foolproof protection, given the still fluctuating state of environmental case law.

Alex Liu of AIS in Los Angeles, CA, reports that his company routinely writes contractor’s pollution policies, which can provide a contractor with up to 30 million dollars’ worth of protection. The coverage includes any sort of pollution that might occur as a result of a contractor’s operations on a site and protects him from liability for cleanup, bodily injury, or property damage.

“A typical scenario,” describes Liu, “is when, in the process of doing some environmental work on a site, someone ruptures a pipe, and the pipe releases hazardous materials-or anything considered a pollutant-into the ground. Let’s say that the pollution that was released continues to not only contaminate that piece of property but also begins to migrate off-site. Now you not only have the property owner coming back at you, but also anybody else off the property who has been contaminated.”

Liu explains that the cost of a pollution liability policy is typically based on a company’s revenues and the kind of work it does. Someone who’s doing the entire job of remediation will be faced with a somewhat more expensive policy than someone who’s doing demolition or grading. “Typically we write annual policies, and we can tailor them for individual projects if needed,” says Liu. “However, these policies are still subject to a minimum [annual] premium of $5,000.” He issues a word of caution: “Smaller companies don’t think they have exposure in these types of situations, but they do.”

Enough Is Enough

“If you don’t have all of this in place, don’t take the job,” Rodriguez counsels. Fair enough, but is all of this worth it? Rodriguez thinks so. “There’s plenty of work out there, especially for contractors who want to specialize in Level One surveys.” And what if a contractor prefers to stick with what he knows best but accidentally finds himself on a contaminated site or his dozer blade or shovel bucket hits a buried tank? No question about it: Stop and get off the job. Get off the site, and call 911 or the local fire department if you think any employees were exposed or are sick or passing out. Also call the local health department and the local regulatory agencies and, obviously, alert the owner. Do not try to deal with the contamination yourself.

Although the regulatory agencies and even industry experts might not be as clear as some would like about the murky waters of working on contaminated sites, one dogmatic piece of advice stands out: If you don’t know what you’re doing, admit it and don’t take the job.