Logistics, and Technology). The Army will also publish a Conventional Ammunition End Item/Component at Risk List, which identifies ammunition items that could be restricted.

Section 806 adds a new level of oversight over the PEO and PM community and redirects focus on industrial base issues. Since every munitions program must be reviewed, following Section 806, in theory, assists in deterring weapon systems program offices from using price as the overriding factor in procurements.

Before the effect of Section 806 could be felt, the Department of Defense attempted to radically change Section 806 to make it weaker. In early 2000, the Department of Defense sought to have Section 806 amended so that the SMCA would only be able to control procurements of ammunition and components that the SMCA actually buys for the armed services, which is approximately 25 percent of all conventional ammunition. This would have removed an important industrial base review process from 75 percent of the ammunition bought in the United States. With such a small piece of the ammunition budget, it would be difficult for the SMCA to comply with its responsibility to "maintain a facility, producer, manufacturer, or other supplier available for furnishing an essential item of ammunition or ammunition component in cases of national emergency or to achieve industrial mobilization."

Regulatory Issues Affecting the HPE and HPEC Industries

Survey respondents stated overwhelmingly that environmental and safety regulations have greatly affected their HPE and HPEC operations. Respondents claimed environmental and worker safety regulations are inflexible. The added costs incurred makes these operations less competitive than international producers that may have less stringent regulations -- a fact that the Department of Defense should take into account when making procurement decisions.

Environmental Regulations

The manufacture and use of high performance explosives creates an assortment of potential problems for the environment. In many instances, the precursor ingredients are hazardous materials, as are the final products themselves.

Manufacturing HPEs creates airborne and/or water-borne wastes, and the use or detonation of the material can contaminate the air, ground, and/or ground water. To create a pound of HPE, several times that amount of waste are created in the form of spent acids and wastewater contaminated with HPES along with other hazardous materials.

The history of these industries is not one of strong environmental stewardship. Wastes were frequently pumped into man-made ponds so they would evaporate into the atmosphere, leading to ground water contamination. Many facilities that have manufactured energetic materials are on the EPA's Superfund National Priority List.

These damaging practices occurred because there were few regulations controlling manufacturing practices. Since the 1960s, however, increasingly stringent environmental regulations have been imposed to curtail air emissions and releases of contaminants (See Chart 12 below). Today, regulations seek to prevent hazardous material releases through the ground, air, and water.

HSAAP not only produces HPES, but also produces the precursor chemicals needed to make the HPEs. As a result, it generates of wastes that are regulated by the

Environmental Protection Agency. The Energetic Materials Environmental (EME)

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study published in 1999 included the totals from HSAAP's most recent EPA Toxic Release Inventory (See Table 15 below).

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The Strategic Environmental Research and Development Program (SERDP) published an extensive report, Energetic Materials Environmental Study (EME study) that details the current state of the energetic materials community. SERDP is a Department of Defense organization that works with the Department of Energy and the Environmental Protection Agency to conduct environmental R&D. Its goal is to "minimize or remove major negative environmental impacts on DoD's ability to conduct [its] mission." For more information please see http://www.SERDP.org

The EME study covered the entire energetic materials community (explosives, propellants, and pyrotechnics). The objective of this November 1999 report was to provide SERDP and other organizations with a comprehensive description of the present environmental state of the energetics community and to provide background information for an assessment of how conditions might change in the future. This report focused on operations at government-owned facilities; however, commercial operations were also examined.

Table 15: Holston Army Ammunition Plant 1996 Toxic Release Inventory

HPEC facilities engaged in load, assemble, and pack operations also create waste materials in the process of loading HPEs into warheads. Waste is generated from scrap explosives, open burning, open detonation, and other sources, such as solvents for machine cleaning and lubrication oil, according to the EME study.

As time goes on, U.S. HPE and HPEC plants may have to reduce emissions further. Activities tolerated at HSAAP and other facilities under current regulations today may not be acceptable in the future.

The EME study found that, “generally speaking, the commercial industry sector of the energetic community has been more responsive in addressing environmental issues. The DoD industrial base has not begun to fully address these issues and tends to approach them [largely] by a reactive, last minute manner."

The HPE and HPEC industries, including both government and private producers, may benefit from emulating some of the best management practices now being employed by manufacturers such as DuPont and Department of Energy national laboratories. These organizations are working to create production systems that minimize the release of pollution from the beginning of the process rather than depending on end-process waste stream clean-up systems.

At the same time, HPE producers should be looking at new manufacturing processes that can dramatically reduce production wastes and associated environmental management requirements. Specifically, the EME study urged that the industry pursue greater use of chemical modeling tools for designing new HPE production processes. "Such technology should be considered a logical and necessary step in the strategic development of new energetic materials," said the report.

BXA Survey Environmental Data

According to BXA survey respondents, the environmental regulation that most frequently affects their operations is the Clean Air Act. Originally enacted in 1970, the Clean Air Act has steadily been expanded. Unintended consequences of the law have been increased operating costs and decreased competitiveness of U.S. manufacturers of HPEs and HPECS.

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Twenty-four organizations reported spending an average of $15.6 million a year from 1995 to 1999 on environmental, OSHA, and other federal and state regulations. These respondents devote approximately 1.5 percent of their workforce to environmental compliance and safety functions.

Survey participants also reported that environmental regulations have reduced the flexibility of their operations. The most frequent example (three mentions) of curtailed or restricted activities was the burning of scrap explosives in a "burn pit." This scrap is now treated as hazardous waste and the cost for disposal is much higher, according to respondents.

Differences in State Regulations

Five respondents noted that there were significant variances in regulations across the states. Even where regulations are not dramatically different, their interpretation can differ greatly. One firm reported that in some states, its waste products are classified as hazardous wastes, but in others, it is able to dispose of waste material differently and at reduced costs.

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The BXA survey asked respondents for the total amount of money spent on " meeting federal, state, environmental, OSHA and other regulations over the past five years." Therefore, the environmental numbers alone could not be extracted.