Versar Inc. is so eager to hire more employes that it is offering a reward: $150 to employes who bring in qualified people to meet the Springfield environmental services company's rapidly growing needs. Last Monday, Versar hired 15 people, and company officials hope to add 60 more employes to its work force of 800.
Versar is in a growth industry.
Tough new federal environmental protection laws have created opportunities for companies -- many of them in the Washington area -- that offer technical and engineering assistance for toxic waste cleanup and environmental risk assessment for the federal government and private industry.
Versar's rapid expansion -- the company's annual revenue has doubled to $38 million in the past two years and could double again in the next 20 months, according to company officials -- is not unusual in the burgeoning waste management industry.
"Right now, environmental firms are sexy in the same way that biotech firms were sexy two years ago," said Robert Ouellette, a Versar vice president.
Versar helps companies and government agencies comply with strict rules that Congress has passed in the past decade to govern the treatment and disposal of hazardous wastes.
For example, legislation passed last year calls for a gradual phasing out of the use of land sites for toxic waste disposal. Versar has a $39 million contract with the Environmental Protection Agency to look at recycling, incineration and biotechnological disposal.
Opportunities for Versar and other companies increased last year when Superfund legislation changed the legal climate for corporations that produce hazardous wastes.
"What's different now is that the Superfund statute can make people liable for things done in the past, even though those things were once perfectly legal," said Roger Feldman, a lawyer specializing in environmental issues at Nixon, Hargrave, Devans and Doyle, a Washington law firm. "Because it has that retrospective reach, it's a kind of cloud of liability that hangs over people's balance sheets."
"Five years ago, if someone had talked about environmental crime, people would have giggled. But now the FBI is pursuing people and EPA is referring cases to the Justice Department," Ouellette said.
The result is that corporations are increasingly nervous about waste disposal and are asking companies like Versar to analyze risks and set in motion cleanup operations.
Last year, Congress boosted the pool of money to be spent by EPA on cleaning up the country's most serious hazardous waste problems from $1.6 billion to $9 billion. That money, as one waste engineer put it, is "Gramm-Rudman proof," because it comes from a special tax on industry, not from taxpayers.
Industry experts predict that EPA is going to spend increasing amounts of money to clean up hazardous wastes. The total cost of cleaning up the 1,000 sites on the priority list is about $100 billion. An additional 20,000 waste sites nationwide eventually have to be cleaned up as well, at a cost of several million dollars each.
The rise in federal spending for hazardous waste cleanup has made the Washington area a mecca of sorts for the environmental services industry. Most of the country's major cleanup firms have set up offices here to drum up government business, and a number of longtime Washington area defense and professional services government contractors have moved into the field as well.
ERC International Inc. of Fairfax, for instance, has made three major acquisitions of environmental firms in the past two years, and environmental service work now accounts for one-third of the company's $120 million annual revenue.
"The bottom line is that this is a growth market," said Mark Elliot, president of ERC's energy and environment group.
While Versar does other environmental work, most of its business has close ties to federal programs and regulation. In the basement of the firm's offices in Springfield, for example, the company has $5 million worth of laboratory equipment to help EPA deal with its expanding workload. The company tests such things as acid rain and samples from the contaminated Love Canal area in Niagara Falls, N.Y. When "spy dust" was discovered at the U.S. embassy in Moscow two years ago, Versar's labs analyzed the dust to see if it was toxic.
Versar engineers also are cashing in on the Pentagon's commitment to spending between $5 billion and $10 billion during the next 10 years on defense-related environmental problems. The company is in the midst of a multimillion-dollar worldwide inspection of Air Force buildings for radon contamination.
"People talk about whether we're going to have a recession soon, but this business is state-of-the-economy independent," said Phil Angell, executive vice president of William D. Ruckelhaus Associates, a consulting firm formed by the former head of EPA. "So much of these problems have to be dealt with whether the economy is up or down. Garbage always has to be picked up and disposed of."
"Over the next five to 10 years, this is the best business to be in," said Dick Guay, head of government relations for Jacobs Engineering Group Inc., a large Pasadena, Calif.-based engineering and environmental services firm that set up an office in Washington two years ago. "The social conscience of the country has just taken off. People are getting tired of living next to dumps."
Not everything about the environmental service field is optimistic, however. The industry has been dogged in recent years by liability problems, as insurance companies have refused to cover companies involved in potentially dangerous cleanups. Firms that clean up hazardous sites can be paid between $8 million and $80 million. But they also face lawsuits if the public is exposed to a spill or dangerous emissions.
Critics have attacked EPA's handling of the contract process, which requires strict conformance with the agency's accounting procedures and other rules. "It's very convoluted," said Sue Ellen Pirages, managing director for the newly formed National Solid Waste Management Association in Washington. "Half of our member companies have chosen not to work for the government because of it."
Versar, for instance, hopes to expand its business beyond government contract work to handle more lucrative commercial waste cleanup work. "Contracts are an excellent way of building the company at the beginning," said Versar President, Michael Markels. "They're a good way of getting a very large and stable source of income and building technological capability. But once you get them, you don't make as much money as you would in the private sector."
Versar got its start with an EPA contract in 1973; since then, it has relied heavily on the federal government. Last year, government work accounted for almost 75 percent of its total revenue, and company officials say that is too high.
Versar is expanding its scope and seeking commercial business by opening or acquiring field offices around the nation. Last year, the firm bought Arix Corp., a Colorado firm with offices in Utah, Arizona, Wyoming and Pennsylvania. That acquisition left the company with 18 offices in 11 states.
"Projects are getting bigger and much more demanding," Markels said. "We have to provide broad geographical coverage. The commercial client likes you to be able to jump in the car and come over."
"In the next few years, there's going to be a industrywide realignment, and the rich are going to get richer," Ouellette said. "We're going to be one of those firms.