Danger Zone Dispatches

On the morning of April 8, 2011, an explosion shook a self-storage warehouse in Waipahu, Hawaii. A cave-like magazine containing illegal Chinese fireworks seized by federal agents blew up, ending five lives and injuring six. All were employees of a subcontractor working with a Virginia-based company on contract with the Treasury Department to safely dispose of hazardous inventory. Though agencies such as the Occupational Safety and Health Administration and the Environmental Protection Agency would be called to investigate this tragedy and others like it—including the fatal explosion that rocked West, Texas, recently—a lesser known body would conduct its own painstaking investigation. The Chemical Safety Board, an independent agency led by a five-member panel, since 1998 has probed the effectiveness of workplace regulators and rules for handling dangerous materials. The agency made national news in April when it responded to the fertilizer facility explosion in Texas, in which 15 people died and more than 150 were injured. The board dispatched a dozen staff members to investigate—its highest deployment ever.

 After staff investigated the Hawaii case, the board voted unanimously to take the unusual step of going beyond proposed remedies by calling for changes in the Federal Acquisition Regulation.

“This was a completely preventable tragedy, because the contractors were not vetted, and the workers were not trained,” board member Beth Rosenberg says. “Board members are deployed when there is an incident—when we get called in, there are corpses.”

The agency’s report explained how the three fireworks shipments were seized as contraband; though labeled as consumer grade, they were consistent with the more hazardous commercial grade. The prime contractor, VSE Corp., was not required under federal regulations to review the safety record of the Oahu-based subcontractor, Donaldson Enterprises Inc., the January report says. 

The accident and the deaths “occurred under a federal contract and a subcontract awarded by VSE, without performing a proper responsibility determination, or at least due diligence,” says Richard Loeb, the Chemical Board’s general counsel and a former acting deputy administrator of the Office of Federal Procurement Policy. “DEI had two problems: the inability to do the work, and that it didn’t have an adequate disposal plan.”

The report by investigators and engineers on the agency’s 49-person staff described the subcontractors’ disposal methods, which involved soaking the fireworks tubes in 55-gallon diesel-filled steel drums, with a plan to transport them to a local shooting range and burn them. The board criticized the two companies and several agencies for allowing assignment of work to employees with insufficient technical expertise. DEI had offered the “lowest-cost and most time-efficient bid,” the report said.

The board said contracting regulations lack sufficient attention to safety risks, noting there are virtually no national standards for fireworks disposal.

The remedial actions the board went on to recommend cast a wide net. If accepted, they would affect Treasury’s acquisition regulation, and its procurement and asset forfeiture functions. Also tapped to consider reforms were EPA and the Bureau of Alcohol, Tobacco, Firearms and Explosives, as well as VSE Corp. and the National Fire Protection Association.

Of the recommendations, the most daunting could be amending the FAR. “This is the board’s first foray into dealing with the contracting issue and the FAR Council,” says Loeb. “We have no regulatory power, so we use the bully pulpit. We have a reputation for calling things the way we see them, so we’re probably more independent than the FAR Council is used to dealing with.”

The Senate-confirmed Chemical Board currently has two vacancies. President Obama has nominated Richard Engler, founder and director of the New Jersey Work Environment Council for one of them. The three incumbents “come from the Work Environment Department of the University of Massachusetts at Lowell,” notes Rosenberg, “so we’re completely focused on improving worker health and safety.” The acceptance rate for the board’s recommendations is 70 percent or more, she says. 

“We’re a nonregulatory agency, like the National Transportation Safety Board,” Loeb says. “We’re seen by the private sector as a nonregulatory alternative, well-respected.”

Still, the board is not without critics. In April, the nonprofit Center for Public Integrity reported that EPA’s inspector general was examining the board’s audit process to learn why its probes take as long as they do. The center cited investigations of two disasters in April 2010 that are still pending: the explosion at the Tesoro Corp. oil refinery in Anacortes, Wash., which killed five and injured two, and the explosion of the Deepwater Horizon drilling rig in the Gulf of Mexico, which caused 11 deaths and a major oil spill. 

“It is unacceptable that after three long years, the CSB has failed to complete its investigation of the tragic Tesoro refinery accident,” Sen. Patty Murray, D-Wash., told the center. “The families of the seven victims and the Anacortes community deserve better, and the CSB must be held accountable for this ridiculous delay.”

Board Chairman Rafael Moure-Eraso and Managing Director Daniel Horowitz say the staff is spread thin. 

Loeb is optimistic that agencies will accept the board’s recommendations in the wake of the Hawaii fireworks explosion. But as of April, the White House-run FAR Council had not responded.

The council may be concerned about the reaction from industry, which “doesn’t like to have a strike called on them after the fact,” Loeb says. “There’s a belief in the contractor community that compliance issues are something they prefer to not deal with.”

A 2001 FAR rule, since repealed, “made compliance with law and regulation one of the so-called responsibility standards required when agencies award a federal contract. But it was controversial,” Loeb says, and some in the contracting industry call it blacklisting. 

Michael Fischetti, executive director of the National Contract Management Association, believes the FAR is already clear about prime contractors bearing responsibility for the capabilities of their subcontractors. “If the government expected this contract involved unique safety issues otherwise  not regulated, those circumstances could have been identified within the contract statement of work,” he says. “The contract could have included guidance promulgated by the Chemical Safety Board.”

Loeb says FAR changes can be contentious. “Usually they involve money issues—some contractor got paid too much for something that didn’t have value. But in this case, the lack of contractor due diligence for something that was so hazardous, resulting in five deaths, was more compelling than a case in which a company has a long record of poor labor relations or is stiffing the government,” he says. “This is more than shenanigans. These families will never recover.”