Last month, details of a federal probe into alleged environmental data fraud by a Texas laboratory were splashed across the front pages of the national press (ENR October 2 issue p. 12). Prosecutors said the possible faulty data by Intertek Testing Services Environmental Laboratories Inc. could affect thousands of waste sites.

The story didn't have any particular impact on me. I don't own a lab company, and I don't work for one. But as a long-time business consultant in the environmental services industry, it pains me to see some of the ill-informed or wrong-headed reactions to this incident.

Some impressions left are wildly inaccurate, while others are sadly laughable. In particular is the notion that labs are simply falsifying data to make money. Hardly anyone has made any money in this industry over the past 10 years. In fact, the business has hovered near death for much of the last decade.

KEY LINK. The small environmental lab business is a critical first link in the environmental management chain. In the U.S., we spend multiple billions of dollars a year on waste management and cleanup.

Understanding environmental problems and designing solutions depends upon the analytical data these labs provide. The harsh glare of the headlines masks the story of a small and struggling business, and two messages it has been trying to send for years.

One is that good environmental solutions rest upon good environmental data. The other is that environmental data may not always be cheap, but good data are a lot cheaper than the consequences of bad data.

Unfortunately, the lab industry has been marginalized at the bottom of the food chain for so long that it has developed an inferiority complex; its service has come to be viewed as a commodity.

In fact, nothing could be further from the truth. Most labs offer thousands of different and highly complex analytical procedures conducted with varying methodologies and varying sensitivities. Deliverables require different turnaround times, and have differing levels of customer- specified quality control and quality assurance. That's hardly the description of a commodity.

But this implicit commodity mindset has helped to create a "price only" atmosphere that can lead to problems like Intertek's.

Labs compete on three key things–data quality, turnaround time, and price. While the first is clearly most important, day-to-day pressures on customers often make the latter two seem more critical. For example, idle construction crews in the field need data quickly, and engineering consultants are under severe pressure to hold down subcontractor costs.

As the gallows humor has it, the marketing slogan in this business has often been "quality, turnaround, and price–choose any two of the above." Joking aside, labs have simply not been able to convince cost-conscious clients that gener-ation of quality data takes time and costs money to produce.

This incident will probably lead to a cry for greater government oversight and control. The feds have been watching over environmental laboratories for years. But what is not widely known is that their regulatory tactics have seemed anything but fair-handed. The idea of "innocent until proven guilty" has often been absent. Indeed, many labs have found themselves assumed guilty, and often sentenced to economic death, without ever having a chance to even state their case in a fair court of opinion.

I know of several situations where federal investigators have intimidated lab personnel, showing up late at night at the homes of low-level employees, and inducing them to squeal on superiors. Or there are cases where heavily armed federal marshals have swooped down to "invade" unsuspecting laboratories.

Overly aggressive government chemists turned private eyes have seemingly sought to make a name for themselves by randomly going after individual labs with little cause. And the merest shadow of a suspicion that the US Environmental Protection Agency might "investigate" has been enough to put responsible companies out of business overnight. I know of several firms that have suffered exactly this fate.

NO PUBLICITY. Ironically, laboratories operated by EPA itself have also suffered from identical data quality problems, a fact the agency has not gone out of its way to publicize. No one would dispute that the bad operators need to be weeded out.

But an honest mistake or a single instance of poor judgment does not justify running an entire company out of business. Unfortunately today, the fear of EPA retribution is so great that most lab owners won't even publicly comment on this whole topic simply out of fear they might draw the agency's attention.

Hopefully, events like this will help the industry get a better handle on things. I think the Intertek mess should best be viewed as an opportunity for both labs and their clientele, specifically the engineering community, to focus on the critical point here. Quality data result from organizations with quality systems and quality people.

In turn, good systems and good people cost money, costs that to some extent have to be borne by the client. In short, customers must realize that they need good data and must support the lab industry's efforts to generate it. The lab industry, its customers and its regulators should use this incident to generate not just heat, but also a little light that needs to be shined in the direction of these critical issues.

Steve Maxwell is managing director of TechKNOWLEDGEy Strategic Group,
an environmental business consulting firm based in Boulder, Colo.
He may be e-mailed at