US Army Corps
of Engineers
US Environmental
Protection Agency
EPA 540-R-00-002
OSWER 9355.0-75
www.epa.gov/superfund
July 2000
A Guide to Developing and Documenting
Cost Estimates During the Feasibility Study
O&M
Capital
Present
Value
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EPA 540-R-00-002
OSWER 9355.0-75
www.epa.gov/superfund
July 2000
A Guide to Developing and Documenting Cost Estimates
During the Feasibility Study
U.S. Army Corps of Engineers
Hazardous, Toxic, and Radioactive Waste
Center of Expertise
Omaha, Nebraska
U.S. Environmental Protection Agency
Office of Emergency and Remedial Response
Washington, D.C.
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NOTICE
This document provides guidance to EPA and State staff. It also provides guidance to the public
and to the regulated community on how EPA intends to exercise its discretion in implementing
its regulations. The guidance is designed to implement national policy on these issues. The
document does not, however, substitute for statutes EPA administers or their implementing
regulations, nor is it a regulation itself. Thus, it does not impose legally binding requirements on
EPA, States, or the regulated community, and may not apply to a particular situation based upon
the specific circumstances. EPA may change this guidance in the future, as appropriate.
ADDITIONAL COPIES
This document is available on the Internet at http://www.epa.gov/superfund/.
EPA employees can obtain copies of this guidance, or copies of documents referenced in this
guidance, by calling the Superfund Docket at 703-603-9232.
Non-EPA employees or members of the public can order a limited number of paper copies of
EPA documents at no fee from EPA's National Service Center for Environmental Publications
(NSCEP) by calling (800) 490-9198 or by placing a request at http://www.epa.gov/ncepihom/.
When free copies are not available, NSCEP will refer the requestor to the National Technical
Information Service (NTIS), which offers documents for a fee. NTIS can be reached by calling
1-800-553-6847 or by placing a request at http://www.ntis.gov/. Fees for these documents are
determined by NTIS.
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ABSTRACT
This guidance document addresses cost estimates of remedial alternatives developed during the
remedial investigation/feasibility study. The goals of this guidance are to improve the
consistency, completeness, and accuracy of cost estimates developed to support the Superfund
remedy selection process. To help achieve these goals, the document presents clear procedures
and expectations, a checklist of cost elements, and example formats. It also identifies resources
for estimating costs during the feasibility study. This guide is designed to help those with
varying levels of cost estimating expertise, including cost estimators, design engineers, technical
support contractors, remedial project managers, and program managers.
This document updates and clarifies previous USEPA guidance for developing and documenting
remedial alternative cost estimates during the feasibility study. Previous guidance superceded by
this document are Chapter 3 ofRemedial Action Costing Procedures Manual, October 1987
(EPA/600/8-87/049), and Section 6.2.3.7 of Guidance for Conducting Remedial Investigations
and Feasibility Studies under CERCLA - Interim Final, October 1988 (EPA/540/G-89/004).
ACKNOWLEDGEMENTS
This document was produced through a joint effort of the United States Environmental
Protection Agency (USEPA) Office of Emergency and Remedial Response (OERR) and the
United States Army Corps of Engineers (USAGE) Hazardous, Toxic, and Radioactive Waste
(HTRW) Center of Expertise (CX). Technical assistance was provided under USAGE Contract
No. DACA45-97-D-0019 by URS Greiner Woodward Clyde Federal Services (URS).
The project management team consisted of Mike Goldstein, USEPA OERR; Stan Hanson,
USAGE HTRW CX; and Jon Ritterling, URS. Active members of the project workgroup were
John Abraham, USEPA Office of Research and Development, National Risk Management
Research Laboratory; Keith Hemmer, Project Time & Cost, Inc.; Miguel Jumilla, USAGE
Headquarters Cost Engineering Branch; Leslie Voss, URS; and Sid Wolf, Environmental
Management Support, Inc. In addition, numerous others provided careful review and
constructive comments, contributing to the overall quality of the document.
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Table of Contents
Acronyms vi
Chapter 1 Introduction 1-1
1.1 Purpose of Guide 1-2
1.2 Scope of Guide 1-2
1.3 How to Use the Guide 1-3
Chapter 2 Background 2-1
2.1 Overview of Superfund Process 2-1
2.2 Role of Project Definition in Cost Estimates 2-2
2.3 Cost Estimating During the Superfund Process 2-3
2.4 Cost Estimating During the Feasibility Study 2-4
Chapter 3 Capital and O&M Costs 3-1
3.1 Definitions 3-1
3.2 Relationship of Capital and O&M Costs to Superfund Phases 3-2
3.3 Cost Element Checklists 3-3
Chapter 4 Present Value Analysis 4-1
4.1 Define the Period of Analysis 4-1
4.2 Calculate Annual Cash Outflows 4-3
4.3 Select a Discount Rate 4-4
4.4 Calculate the Present Value 4-6
Chapter 5 How to Develop the Cost Estimate 5-1
5.1 Describe the Alternative 5-1
5.2 Identify Cost Element Structure 5-3
5.3 Estimate Construction/O&M Activities Costs 5-5
5.4 Apply Contingency 5-9
5.5 Estimate Professional/Technical Services Costs 5-12
5.6 Institutional Controls 5-14
5.7 Present Value Analysis 5-15
5.8 Sensitivity Analysis 5-15
5.9 Review Estimate 5-17
Chapter 6 How to Document the Cost Estimate 6-1
6.1 Detailed Cost Backup 6-1
6.2 Individual Cost Summary 6-1
6.3 Comparative Cost Summary 6-1
6.4 Cost Estimate of Proposed or Selected Remedy 6-2
Chapter? References 7-1
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Table of Contents
List of Appendices
Appendix A Internet Resources A-l
Appendix B Cost Adjustment Factors B-l
Appendix C Example Cost Templates C-l
Appendix D Glossary D-l
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Table of Contents
List of Exhibits
Exhibit 2-1 The Superfund Pipeline 2-2
Exhibit 2-2 Relationship of Project Definition to Cost Estimate for a Remedial Action
Project 2-3
Exhibit 2-3 Expected Cost Estimate Accuracy Along the Superfund Pipeline 2-4
Exhibit 3-1 Relationship of Capital and O&M Costs to Superfund Phases 3-2
Exhibit 3-2 Capital Cost Element Checklist 3-5
Exhibit 3-3 Annual O&M Cost Element Checklist 3-12
Exhibit 3-4 Periodic Cost Element Checklist 3-15
Exhibit 4-1 Non-Discounted vs. Discounted Costs for an Example Project with a 100
Year Duration 4-3
Exhibit 4-2 Example Array of Constant Dollar Costs for Present Value Analysis 4-4
Exhibit 4-3 Comparison of Present Value of Six Remedial Alternatives 4-6
Exhibit 4-4 Annual Discount Factors at 7% 4-7
Exhibit 4-5 Example Present Value Calculation for a Remedial Alternative 4-8
Exhibit 4-6 Multi-Year Discount Factors at 7% 4-9
Exhibit 5-1 Steps to Develop a Basic Cost Estimate for a Remedial Alternative 5-2
Exhibit 5-2 Example Cost Element Structure 5-4
Exhibit 5-3 Example Calculation of Sub-Element Unit Cost 5-8
Exhibit 5-4 Example Estimation of Cost Element 5-9
Exhibit 5-5 Relationship of Scope, Bid, and Total Contingency 5-10
Exhibit 5-6 Example FS-Level Scope Contingency Percentages 5-11
Exhibit 5-7 Example Contingency Application 5-12
Exhibit 5-8 Example Percentages for Professional/Technical Services Capital Costs 5-13
Exhibit 5-9 Example Estimation of Professional/Technical Services Costs 5-14
Exhibit 5-10 Example Estimation of Institutional Controls Costs 5-15
Exhibit 5-11 Example Present Value Analysis 5-15
Exhibit 5-12 Example Sensitivity Analysis 5-17
Exhibit 5-13 Key Questions to Ask when Reviewing a Remedial Alternative Cost
Estimate 5-18
Exhibit 6-1 Example Cost Worksheet 6-4
Exhibit 6-2 Example Remedial Alternative Cost Summary 6-5
Exhibit 6-3 Example Comparative Cost Summary 6-7
Exhibit A-l Internet Resources - Government A-2
Exhibit A-2 Internet Resources -Non-Government A-11
Exhibit B-l ENR Building Cost Index B-l
ExhibitB-2 US ACE Area Cost Factors as of March 10,2000 B-2
Exhibit B-3 HTRW Productivity Factors - Light Work B-4
Exhibit B-4 HTRW Productivity Factors - Heavy Work B-5
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Acronyms
AACE Association for the Advancement of Cost Engineering
CERCLA Comprehensive Environmental Response, Compensation, and Liability Act
CFR Code of Federal Regulations
EC2 Environmental Cost Engineering Committee
FR Federal Register
FRTR Federal Remediation Technologies Roundtable
FS Feasibility Study
G&A General and Administrative
HCAS Historical Cost Analysis System
HTRW Hazardous, Toxic, or Radioactive Waste
ICEG Interagency Cost Estimating Group
MCACES Micro Computer Aided Cost Engineering System
NCP National Oil and Hazardous Substances Pollution Contingency Plan
NRRB National Remedy Review Board
O&M Operation and Maintenance
OMB Office of Management and Budget
OSWER Office of Solid Waste and Emergency Response
PRP Potentially Responsible Party
PV Present Value
QA/QC Quality Assurance/Quality Control
RA Remedial Action
RACER Remedial Action Cost Engineering and Requirements
RCRA Resource Conservation and Recovery Act
RD Remedial Design
RI Remedial Investigation
RI/FS Remedial Investigation/Feasibility Study
ROD Record of Decision
SARA Superfund Amendments and Reauthorization Act
USAGE United States Army Corps of Engineers
USDOE United States Department of Energy
USEPA United States Environmental Protection Agency
UPB Unit Price Book
WBS Work Breakdown Structure
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E3
Chapter One
Introduction
In the Superfund program,1 the remedial investigation/feasibility study (RI/FS) process is
used to characterize the nature and extent of risks posed by hazardous waste sites and to
evaluate potential remedial options. During
the feasibility study (FS) phase of this
process, cost estimates are developed for
Key Issues for Cost Estimates
in Feasibility Study Reports
each remedial action alternative being
evaluated.
The U.S. Environmental Protection Agency
(USEPA) first published guidance for
developing and documenting remedial
alternative cost estimates during the FS as
part of the Remedial Action Costing
Procedures Manual (USEPA 1987). That
document provided the basis for the
discussion of cost estimating in Guidance for
Conducting Remedial Investigations and
Feasibility Studies under CERCLA (USEPA
1988). Since these documents were
published, remedial alternative cost estimates
prepared during feasibility studies generally
have followed this basic guidance, but have
typically varied in approach and content.
Additionally, the number of available cost
estimating resources has increased during this
time. To take advantage of lessons learned
and help improve the consistency,
completeness, and accuracy of remedy cost
estimates during the FS, this guide was
prepared to update and clarify previous
USEPA guidance in this policy area.
Specific guidance superceded by this guide
are Chapter 3 of Remedial Action Costing
Procedures Manual (USEPA 1987) and
Section 6.2.3.7 of Guidance for Conducting
Remedial Investigations and Feasibility Studies under CERCLA (USEPA 1988).
Cost estimates of remedial alternatives provided
in feasibility study reports should clearly present
the following information:
Expected accuracy range of the cost estimate
(e.g., -30 to +50 percent for detailed analysis
of alternatives)
Source references for quantity and unit cost
information
Contingency to account for possible cost
overruns
Basis for applied contingency
Costs for professional and technical services
Period of present value analysis (e.g., 50
years)
Basis for period of present value analysis
(e.g., time required to achieve remedial
action objectives)
Discount rate used in present value analysis
(e.g., 7 percent)
Basis for discount rate used in present value
analysis (e.g., per USEPA policy)
Major assumptions and sources of
uncertainty in the overall estimate
Analysis of sensitivity of cost estimate to
uncertain factors
Logical and organized presentation of cost
estimate summaries and detailed backup
information
1 As used by this guide, "Superfund" refers to the program operated under the authority of the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA) of 1980 and the Superfund Amendments and
Reauthorization Act (SARA) of 1986.
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1.1 Purpose of Guide
The purpose of this guide is to provide a current reference for developing and documenting
cost estimates of remedial action alternatives during the FS. The goals of this guide include
improving the consistency, completeness, and accuracy of cost estimates prepared during the
FS. To help achieve these goals, the guide presents clear procedures and expectations,
presents a checklist of cost elements and example formats, and points out resources for cost
estimating.
This guide is designed to help those with varying levels of cost estimating expertise,
including cost estimators, design engineers, technical support contractors, remedial project
managers, and program managers.
1.2 Scope of Guide
This guide addresses cost estimates of remedial alternatives developed during the FS in
support of the Superfund remedy selection process. Therefore, Superfund terms are
primarily used to describe the concepts presented. However, many of these cost engineering
concepts are universal in nature and could be applied to other environmental cleanup projects
or programs.
While cost estimates are developed at different stages of the Superfund process (Chapter 2),
this guide specifically addresses the FS phase. Cost estimates are developed during the FS
primarily for the purpose of comparing remedial alternatives during the remedy selection
process, not for establishing project budgets or negotiating Superfund enforcement
settlements.3 During remedy selection, the cost estimate of the preferred alternative is
typically carried over from the FS to the proposed plan for public comment. The subsequent
cost estimate included in the record of decision (ROD) reflects any changes to the remedial
alternative that occurs during the remedy selection process as a result of new information or
public comment.
Finally, this guide does not address how to use cost estimates in making a remedy selection
decision or how to make a cost-effectiveness determination in the Superfund program.
USEPA guidance that addresses this issue can be found in The Role of Cost in the Superfund
Remedy Selection Process (USEPA 1996).
2 Examples include Superfund removal actions, Superfund enforcement settlements, Resource Conservation and Recovery
Act (RCRA) corrective actions, Federal facilities cleanups, brownfields cleanups, underground storage tank remediation,
installation restoration program, base realignment and closure, formerly used defense sites, and cleanup programs under
State authorities.
3 The FS remedial alternative cost estimate can be used as starting point for budgeting purposes, but adjustments may be
needed based on individual agency requirements. For example, estimates may need to be revised based on project scope
requirements, escalation factors may need to be added, or discount factors may need to be removed.
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1.3 How to Use the Guide
This guide is intended to provide the user with the basic information necessary to develop
and document cost estimates for remedial action alternatives during the FS. This guide is not
meant to contain all of the information necessary to complete the cost estimate, but to be a
primary reference, pointing to other resources as necessary. The objectives of each chapter
and appendix are listed below:
Chapter 1: Introduce the guide, including its purpose, scope, and use.
Chapter 2: Provide background information on applicable regulatory and cost
engineering concepts, including the Superfund process, role of project definition in cost
estimates, cost estimating within Superfund, and cost estimating during the FS.
Chapter 3: Provide a cost element checklist to help identify capital, annual operation and
maintenance (O&M), and periodic costs to include in the cost estimate for a remedial
action alternative.
Chapter 4: Provide guidelines for conducting a present value analysis, including period
of analysis and discount rate.
Chapter 5: Provide steps to develop the basic cost estimate for a remedial action
alternative, including alternative description, identification of cost element structure,
estimation of cost elements, application of contingency, present value analysis, sensitivity
analysis, and review of estimate.
Chapter 6: Provide information on how to document the cost estimates of remedial
action alternatives developed during the FS, including an example cost summary.
Chapter 7: Provide a list of references used in the document.
Appendix A: Provide a list of government and non-government resources on the Internet
that can be used to help develop remedial alternative cost estimates during the FS.
Appendix B: Provide information on how to adjust costs for geographic location,
escalation, and for impacts of health and safety requirements on productivity.
Appendix C: Provide example templates for cost estimate summaries and backup
information.
Appendix D: Provide a glossary of key terms used in the document.
Rules of thumb for cost estimating during the FS, identified by the ^ symbol, are highlighted
periodically within the document text. These rules of thumb, many of which provide typical
cost percentages, are based on engineering judgement and not on detailed analysis of
historical cost data. Also, highlight boxes throughout the document provide information on
topics that are important, but not necessarily central to the discussion at hand. Web site
addresses cited in the document were current at the time of publication.
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Chapter Two
Background
Estimating the cost of remedial action alternatives during the FS requires a basic
understanding of applicable regulatory and cost engineering concepts. Therefore, this
chapter provides background information on these subjects, including an overview of the
Superfund process, discussion of the role of project definition in cost estimates, cost
estimating within the Superfund process, and cost estimating during the FS.
2.1 Overview of Superfund Process
The Superfund "pipeline" (Exhibit 2-1)
illustrates the major phases and decision
points of the Superfund remedial response
program.
The RI/FS process is used to gather the
information necessary to select a remedy that
will meet the statutory and regulatory
requirements of the Superfund cleanup
program. The remedial investigation (RI)
includes sampling and analysis to
characterize the nature and extent of
contamination; baseline risk assessment to
assess current and potential future risks to
human health and the environment; and
treatability studies, as appropriate, to
evaluate the effectiveness of treatment or
recovery technologies to reduce the toxicity,
mobility, or volume of hazardous substances
or contaminated media.
The FS consists of two main phases:
(1) development and screening of remedial
action alternatives; and (2) comparison of
each alternative that passes screening in a
detailed analysis. A range of remedial action
alternatives is developed during the FS as
data become available from the RI site
characterization, with treatability studies
helping to reduce uncertainties concerning
cost and performance of treatment
alternatives.
For Further Information
For further information on the Superfund remedy
selection process, see the following publications:
National Oil and Hazardous Substances
Pollution Contingency Plan (NCP),
Subpart E - Hazardous Substance Response,
Section 300.430 - Remedial Investigation/
Feasibility Study and Selection of Remedy
(40 CFR Part 300)
(http://www.epa.gov/docs/epacfr40/chapt-
I. info/sub ch-J/)
Guidance for Conducting Remedial
Investigations and Feasibility Studies Under
CERCLA, Interim Final (USEPA 1988)
A Guide to Selecting Superfund Remedial
Actions (USEPA 1990)
The Role of Cost in the Superfund Remedy
Selection Process (USEPA 1996)
(http://www.epa.gov/superfund/resources/cos
t_dir/index. htm)
Rules of Thumb for Superfund Remedy
Selection (USEPA 1997)
(http://www.epa.gov/superfund/resources/rul
es/index.htm)
A Guide to Preparing Superfund Proposed
Plans, Records of Decision, and Other
Remedy Selection Decision Documents
(USEPA 1999)
(http://www.epa.gov/superfund/resources/re
medy/rods/index. htm)
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During remedy selection, a preferred alternative is identified, presented in a proposed plan,
and documented in a ROD following evaluation of public comment.l Plans, specifications,
and other documents necessary to construct or implement the remedy are developed during
remedial design (RD). Remedial action (RA) is the actual implementation of the remedy.
Operation and maintenance (O&M) is used to maintain the effectiveness of the remedial
action. More information on the differences between the RA and O&M phases and how they
relate to estimating the cost of remedial action alternatives is provided in Chapter 3.
Exhibit 2-1
The Superf und Pipeline
Major P
Phases: ^
Remeda nvestgaton/ _ . A r, ., r, A r, ., .
Feas b tv Study & Remedy 1 Remed a Des gn 1 Remed a Act on
(R/FS) Seed on J (RD) J (RA)
i i
] ]
Key Documents or R|/FS Report Final Design
Decision Points: Record of Decision
Remedial Remedial Design Remedial Action
Investigation/ • Develop Plans "Construct/
Feasibility Study and Implement
• Scoping Specifications Remedy
• Site Investigation • Design Analysis • Remedy
• Treatability • Construction Operating Costs
Investigations Cost Estimate (Short-Term)
• Development and
Screening of
Alternatives
• Detailed Analysis of
Alternatives
Remedy Selection
• Identification of
Preferred Alternative
in Proposed Plan
• Public Comment
• Decision
)Dperat on & Ma ntenance 1
(O&M) J
i '
, i
RA Report 5-Year Review
Reports
Operation and
Maintenance
• Operate /
Maintain
Remedy
(Long-Tenn)
2.2 Role of Project Definition in Cost Estimates
The Association for the Advancement of Cost Engineering (AACE) International defines a
cost estimate as "an evaluation of all the costs of the elements of a project or effort as defined
by an agreed-upon scope" (AACE 1990). The total estimated cost of a project is primarily
dependent on how well, or to what degree, the project is defined (i.e., "scope" or
completeness of design).
1 Cost is one of nine criteria established by USEPA to guide remedy selection decision making and is a critical factor in the
process of identifying a preferred remedy. In addition, CERCLA and the NCP require that every remedy selected must be
cost-effective. See The Role of Cost in the Superfund Remedy Selection Process (USEPA 1996) for a more complete
discussion.
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A change (A) in project definition will result in a change (A) in the project cost estimate.
This relationship, including factors that may affect a change in project definition and,
therefore, a change in the cost estimate for a remedial action project, is illustrated in
Exhibit 2-2.
Exhibit 2-2
Relationship of Project Definition to Cost Estimate for a Remedial Action Project
Definition of Remedial
Technology and
Associated Uncertainty
Quality of Site
Characterization
Data
Modification
of Remedial
Approach or
Technology
A Project
Definition
A Project
Cost Estimate
New or Revised
Information
Modification of
Remedial Action
Objectives
2.3 Cost Estimating During the Superfund Process
As a project moves from the planning stage into the design and implementation stage, the
level of project definition increases, thus allowing for a more accurate cost estimate. An
"early" estimate of the project's life cycle costs is made during the FS to make a remedy
selection decision.2
At the FS stage, the design for the remedial action project is still conceptual, not detailed, and
the cost estimate is considered to be "order-of-magnitude." The cost engineer must make
assumptions about the detailed design in order to prepare the cost estimate. As a project
progresses, the design becomes more complete and the cost estimate becomes more
"definitive," thus increasing the accuracy of the cost estimate. This process is depicted in
Exhibit 2-3 for remedial action projects in the Superfund program.3
The term "life cycle cost" refers to the total project cost across the life span of a project, including design, construction,
operation and maintenance, and closeout activities. The cost estimate developed during the FS is a projection of the life
cycle cost of a remedial action project, not including the RI/FS or earlier phases.
The accuracy range curves shown in Exhibit 2-3, representing both construction and operation costs, are for illustrative
purposes only. The specific percentages correlate with generally accepted rules of thumb for cost estimating accuracy
and are not meant to imply that these goals will be precisely achieved.
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Exhibit 2-3
Expected Cost Estimate Accuracy Along the Superf und Pipeline
) Remedial Investigation/ , Remedy 1 RemoHiai ne=inn 1
Feasibility Study & Selection I Remedial Design I
Remedial Action
+100%
-50%
Screening of
Alternatives
Low
Operation & Maintenance
-10%
Final
Design
RA
Complete
O&M
Complete
Detailed Analysis
of Alternatives/
Conceptual Design
• Level of Project Definition •
High
2.4 Cost Estimating During the Feasibility Study
During the FS, cost estimates are developed for each remedial action alternative for
comparison purposes. The accuracy of these estimates is linked to the quality of the RI data,
which helps define the scope of each alternative. Because the RI/FS cannot remove all
uncertainty no matter how good the data may be, the expected accuracy of cost estimates
during the FS is less than that of estimates developed during later stages of the Superfund
process.
Cost estimates are developed at both the "screening of alternatives" and "detailed analysis of
alternatives" phases of the FS, with expected accuracy ranges of-50 to +100 percent and -30
to +50 percent, respectively, as shown in Exhibit 2-3.4 Cost estimates developed during
these two phases are further described in the following paragraphs.
4 If the number of viable alternatives developed during the FS process is limited, the "screening of alternatives" step is not
always performed, nor is it required (Section 4.1.2.1 of RI/FS guidance [USEPA 1988]). However, the "detailed analysis
of alternatives" is performed regardless to evaluate each alternative against the NCP evaluation criteria.
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Screening of Alternatives
Screening-level cost estimates are used to screen out disproportionately expensive
alternatives in determining what alternatives should be retained for detailed analysis. The
National Oil and Hazardous Substances Contingency Plan (NCP) includes the following
language in its description of the cost criterion for screening of alternatives:
"The costs of construction and any long-term costs to operate and maintain the
alternatives shall be considered." (40 CFR 300.430(e)(7)(iii))
Screening-level cost estimates should focus
comparative estimates so that decisions
between alternatives can be appropriately
considered as the accuracy of the cost
estimates improves beyond the screening
process. The procedures used to develop
these estimates are similar to those used
for the detailed analysis, except that
alternatives are not as well refined and
cost components are not as well
developed. The screening-level accuracy
range of-50 to +100 percent means that,
for an estimate of $100,000, the actual
cost of an alternative is expected to be
between $50,000 and $200,000.
The basis for a screening-level cost
estimate can include a variety of sources,
including cost curves, generic unit costs,
vendor information, standard cost
estimating guides, historical cost data, and
estimates for similar projects, as modified
for the specific site. Both capital and
O&M costs should be considered, where
appropriate, at the screening level.
Detailed Analysis of Alternatives
Cost estimates developed during the
detailed analysis phase are used to
compare alternatives and support remedy
selection. The NCP includes the
following language in its description of
the cost criterion for the detailed analysis
and remedy selection:
on relative accuracy in order to make
Direct and Indirect Cost Terminology
There may be some variability in the use of the
terms "direct cost" and "indirect cost." This is
due to a difference in perspective. To the
"owner" of the project (e.g., government or
potentially responsible party [PRP]), the "direct
costs" of cleanup are the equipment, labor, and
material costs necessary to construct the remedial
action (including contractor markups, such as
overhead and profit). From this perspective, the
"indirect costs" are all other costs not part of the
actual construction project but necessary to
implement the remedial action (e.g., engineering,
legal, construction management, and other
technical and professional services). However, to
the "implementor" of the project (e.g.,
construction contractor), the "direct costs" of
cleanup are those costs that can be attributed to a
single task of construction work, while the
"indirect costs" are those that cannot be assigned
to a specific activity (e.g., contractor markups).
Due to the potential for confusion caused by these
differences in perspective, the specific terms
"direct cost" and "indirect cost" are not used in
the remainder of this guide. Rather, a distinction
is made between costs associated with specific
construction or O&M activities and costs for
professional/technical services necessary to
support those activities. Contractor markups
would be included along with the labor,
equipment, and material costs for specific
construction or O&M activities. This terminol-
ogy should avoid confusion, while still addressing
both aspects of cost that are identified in the NCP
for the Superfund remedy selection process.
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"The types of costs that shall be assessed include the following: (1) Capital costs,
including both direct and indirect costs (2) Annual operations and maintenance costs; and
(3) Net present value of capital and O&M costs." (40 CFR 300.430 (e)(9)(iii)(G))
Remedial action alternative cost estimates for the detailed analysis are intended to provide a
measure of total resource costs over time (i.e., "life cycle costs") associated with any given
alternative.5 As such, these estimates generally are based on more detailed information and
should achieve a greater level of accuracy than screening-level estimates. The detailed
analysis level accuracy range of-30 to +50 percent means that, for an estimate of $100,000,
the actual cost of an alternative is expected to be between $70,000 and $150,000.
5 These life cycle estimates should not include costs that would be incurred by the site owner or government independent of
the remedial action (e.g., U.S. Department of Energy program management costs, unrelated facility or site maintenance
costs). Nor should these estimates include other "external costs" not associated with the implementation of the remedial
action (e.g., economic impacts to residents or businesses as a result of remediation activity).
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Chapter Three
Capital and O&M Costs
The NCP states that the types of costs to be assessed in the FS include capital and annual
O&M costs. This chapter provides definitions and checklists that can be used to identify
capital and O&M costs for remedial action alternatives.
3.1 Definitions
Included under the general categories of capital and O&M costs identified in the NCP are
capital, annual O&M, and periodic costs (capital or O&M), as defined below. These
definitions are consistent with past USEPA guidance and do not change the intent of the
NCP.
Capital Costs
Capital costs are those expenditures that are required to construct a remedial action. They are
exclusive of costs required to operate or maintain the action throughout its lifetime. Capital
costs consist primarily of expenditures initially incurred to build or install the remedial action
(e.g., construction of a groundwater treatment system and related site work).
Capital costs include all labor, equipment, and material costs, including contractor markups
such as overhead and profit, associated with activities such as mobilization/demobilization;
monitoring; site work; installation of extraction, containment, or treatment systems; and
disposal. Capital costs also include expenditures for professional/technical services that are
necessary to support construction of the remedial action.
Annual O&M Costs
Operation and maintenance (O&M) costs are those post-construction costs necessary to
ensure or verify the continued effectiveness of a remedial action. These costs are estimated
mostly on an annual basis.
Annual O&M costs include all labor, equipment, and material costs, including contractor
markups such as overhead and profit, associated with activities such as monitoring; operating
and maintaining extraction, containment, or treatment systems; and disposal. Annual O&M
costs also include expenditures for professional/technical services necessary to support O&M
activities.
Periodic Costs
Periodic costs are those costs that occur only once every few years (e.g., five-year reviews,
equipment replacement) or expenditures that occur only once during the entire O&M period
or remedial timeframe (e.g., site closeout, remedy failure/replacement). These costs may be
either capital or O&M costs, but because of their periodic nature, it is more practical to
consider them separately from other capital or O&M costs in the estimating process.
-------
Regulatory Definitions for RA and O&M
3.2 Relationship of Capital and O&M Costs to Superfund Phases
A Superfund response action can occur in two phases: (1) remedial action and (2) O&M. In
general, remedial action is defined by CERCLA to include activities required to prevent or
mitigate the migration of contaminants into the environment. As such, a "remedial action"
may not be complete when construction is complete, as in the case of a pump and treat
remedy that may require many years of
operation. In these cases, remedial action may
include tasks that are traditionally considered to
be O&M (see "Regulatory Definitions" to right
for further explanation). Per CERCLA, O&M
typically occurs after the remedial action has
been completed and may include the tasks
necessary to continue preventing or mitigating
the migration of contaminants into the
environment (e.g., long term surveillance and
monitoring). Therefore, the RA phase of the
Superfund pipeline can include both
construction and short-term O&M activities,
while the O&M phase consists primarily of
long-term O&M (Exhibit 3-1).
For remedial alternative cost estimates
developed during the FS, the conventional
distinctions between capital and O&M costs
should be used. As shown in Exhibit 3-1 on the
"standard cost definitions" line, capital costs
considered during the FS include design and
construction while O&M costs include both short-term and long-term O&M. Periodic costs
(e.g., replacement or repair costs, five-year review costs) can occur at any time during the
O&M period (both short-term and long-term).
Under the Superfund program, O&M typically
begins only after the remedial action has achieved
remedial action objectives and remediation goals
stated in the ROD and is determined to be
operational and functional (40 CFR 300.435(f)(l)).
A remedy becomes "operational and functional"
normally within one year after construction is
completed.
For Fund-financed remedial actions to treat or
restore groundwater or surface water quality to a
level protective of human health and the environ-
ment, the operation of the remedy is considered
part of the remedial action phase for a period of up
to 10 years after the remedial action becomes
operational and functional (40 CFR 300.435(f)(3)).
Activities necessary to maintain the effectiveness
of the remedy past this period are considered to be
O&M, thereby shifting financial responsibility
from the Federal government to the government of
the State in which the site is located.
Exmmts-i
Relationship of Capital and O&M Costs to Superfund Phases
2. /"
•£| 1
fl) Q) I
Q. ^ 1
"K \.
O V)
||
m Q
] Remedial Design I
Design Costs (Capital) Construction (
(Capital)
Remedial Action I Operation & Maintenance I
RA
Completion
Dosts Remedial Action Post RA Operations and Maintenance
Operating Costs (Long-Term O&M)
(Short-Term O&M)
Periodic Costs (Capital or O&M)
-------
3.3 Cost Element Checklists
Checklists can be used to help evaluate capital and O&M costs for each remedial action
alternative and to reduce the possible exclusion of key cost elements. A cost estimate
generally will be more "complete" if as many cost elements as possible are accounted for,
even though uncertainty may remain about their quantity or unit cost. Checklists also
promote consistency between estimates.
Checklists are provided in Exhibits 3-2, 3-3,
and 3-4 for capital, annual O&M, and
periodic cost elements, respectively. The
checklists are designed to be flexible, and by
design, do not follow any standard work
breakdown structure (WBS) or numbering
system. The checklists are not all-inclusive
and, therefore, the listed cost elements should
not be assumed to apply to every remedial
action alternative. Rather, the checklists can
be used to identify applicable cost elements,
which can be added to or modified as needed.
Exhibits 3-2, 3-3, and 3-4 provide
descriptions of cost elements, as well as
example sub-elements.
Capital Cost Elements
Capital cost elements from the checklist in
Exhibit 3-2 are listed below:
Construction Activities
Mobilization / Demobilization
Monitoring, Sampling, Testing, and
Analysis
Site Work
Surface Water Collection or Containment
Groundwater Extraction or Containment
Gas/Vapor Collection or Control
Soil Excavation
Sediment/Sludge Removal or Containment
Demolition and Removal
Cap or Cover
On-Site Treatment (specify treatment technology)
Off-Site Treatment / Disposal
Contingency
Work Breakdown Structures
Cost estimates for Federal hazardous, toxic, or
radioactive waste (HTRW) cleanup projects
typically use a work breakdown structure (WBS)
to identify cost elements. The Environmental
Cost Engineering Committee (EC2), formerly
known as the Interagency Cost Estimating Group
(ICEG), has played a key role in WBS develop-
ment. EC2 is comprised of cost professionals
from the USEPA, U.S. Department of Energy
(USDOE), U.S. Army Corps of Engineers
(USACE), U.S. Navy, and U.S. Air Force.
Several work breakdown structures have been
developed, each of which can be useful for
identifying potential cost elements to include in a
remedial alternative FS cost estimate. These
include:
HTRW Remedial Action (RA) / Operation &
Maintenance (O&M) WBS, February 1996
(http://www.frtr.gov/cost/ec2/wbsl.html)
Phased Based HTRW WBS, April 1998
(http://www.frtr.gov/cost/ec2/wbs2.html)
Environmental Cost Element Structure
(ECES), September 1999
(http://www.em.doe.gov/aceteam/eces.htmt)
While the 1996 HTRW WBS (required by
USACE) focuses on the RA and O&M phases,
the ECES is more comprehensive and covers cost
elements from initial studies through long term
monitoring.
-------
Example Capital Cost Element Structure
Professional/Technical Services
Project Management
Remedial Design
Construction Management
Institutional Controls
The elements listed as construction activities
would be incurred as part of the physical
construction of the remedial action.
Contingency covers unknowns or
unanticipated conditions associated with
construction activities. Project management,
remedial design, and construction manage-
ment are professional/technical services to
support construction of the remedial action.
Institutional controls, which are legal or
administrative measures used to limit or
restrict site access or human exposure to
contamination, can be a major component of
a remedial alternative and therefore warrant
separate consideration.
The terminology for each cost element
should be made as alternative-specific as
possible (i.e., terminology from the checklist
should not necessarily be used directly). For
example, "Sediment/Sludge Removal or
Containment" could simply be "Contami-
nated Sludge Removal" if only removal of
sludge, not sediment, is to occur. For on-site
treatment, the applicable treatment
technology (e.g., "Soil Vapor Extraction")
should be specified (see "Example" to right).
Costs of construction activities are typically
estimated on an element-by-element basis.
Contractor markups such as overhead and
profit should generally be included in these
cost elements, rather than listed separately in
the capital cost summary. Contingency is
typically added as a percentage to the total
cost of construction activities. Professional/technical services are typically estimated as a
percentage of the total cost of construction activities plus contingency. A more detailed
discussion of contingency is provided in Chapter 5. Institutional controls are typically
estimated on an element-by-element basis. The development and documentation of capital
costs are further described in Chapters 5 and 6, respectively.
An example of how capital cost elements and
sub-elements might be structured for a remedial
alternative that uses air sparging (AS), soil vapor
extraction (SVE), and a passive treatment wall
(i.e., permeable reactive barrier) to treat
contaminated soil and groundwater is as follows:
Mobilization/Demobilization
Construction Equipment
Submittals/Implementation Plans
Temporary Facilities & Utilities
Post-Construction Submittals
Monitoring, Sampling, Testing, and Analysis
SVE Monitoring Wells
Treatment Wall Monitoring Wells
Site Work
Clearing and Grubbing
Seeding/Mulch/Fertilizer
Air Sparging / Soil Vapor Extraction
Mobilize SVE System
AS Injection Wells
AS Blower
AS Piping
SVE System
SVE Extraction Wells
SVE Piping
Electrical Hookup
Startup and Testing
Passive Treatment Wall
Construct Slurry Trench
Install Reactive Media
Off-Site Treatment/Disposal
Off-Site Transport of Soil Cuttings
Off-Site Disposal of Soil Cuttings
Wastewater Discharge/Testing
Project Management
Remedial Design
Construction Management
Institutional Controls
Institutional Controls Plan
Groundwater Use Restriction
Site Information Database
-------
Exhihit3-2
Capital Cost Element Checklist
Cost Element Description
Construction Activities
Mobilization/ Bringing equipment
Demobilization and personnel to the
site (mobilization) or
removing equipment
and personnel
(demobilization) for
purposes of
constructing or
installing the
remedial action.
Includes
setup/construction
and/or removal of
temporary facilities
and utilities. Does
not include
mobilization or
demobilization
specific to
constructing or
installing an on-site
treatment facility.
Example Sub-Elements
D Construction Equipment
D Submittals/Implementation Plans
Air Monitoring Plan
Construction Quality Control Plan
Construction Schedule
Environmental Protection Plan
Materials Handling/Transportation/Disposal Plan
Permits
Sampling and Analysis Plan
_ Site Safety and Health Plan
_ Site Security Plan
_ Site Work Plan
Storm Water Pollution Prevention Plan
Training & Medical Certifications
D Temporary Facilities
Office Trailers
Storage Facilities
Security Fencing & Signs
Roads and Parking
Decontamination Facilities
D Temporary Utilities
D Temporary Relocation of Roads/Structures/Utilities
D Post-Construction Submittals
As-Built Drawings
_ O&M Manuals
QA/QC Documentation
D Site Security Personnel
a
a
-------
Exhibit 3-2 tcontJ
Capital Cost Element Checklist
Cost Element
Description
Example Sub-Elements
Construction Activities (cont.)
Monitoring, Sampling,
Testing, and Analysis
Site Work
Sampling, testing, on- or
off-site analysis, data
management, and quality
assurance/ quality control.
Includes monitoring to
evaluate remedy
performance and/or
compliance with
regulations.
Activities to establish the
infrastructure necessary for
the project (i.e., site
preparation). Also
includes permanent site
improvements and
restoration of areas or site
features disturbed during
site remediation. Site work
is generally assumed to be
"clean work," meaning that
there is no contact with
contaminated media or
materials. Excludes all site
work specific to
constructing or installing
an on-site treatment
facility.
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
a
Meteorological Monitoring
Air Monitoring and Sampling
Radiation Monitoring
Health and Safety Monitoring
Personal Protective Equipment
Monitoring Wells
Geotechnical Instrumentation
Soil Sampling
Sediment Sampling
Surface Water Sampling
Groundwater Sampling
Radioactive Waste Sampling
Asbestos Sampling
Laboratory Chemical Analysis
On-Site Chemical Analysis
Radioactive Waste Analysis
Geotechnical Testing
Chemical Data Management
D Demolition
D Clearing and Grubbing
D Earthwork
Stripping
Stockpiling
Excavation
Borrow
Grading
_ Backfill
Topsoil
D Roads/Parking/Curbs/Walks
D Vegetation and Planting
Topsoil
Seeding/Mulch/Fertilizer
Sodding
Erosion Control Fabric
Shrubs/Trees/Ground Cover
D Fencing/Signs/Gates
D Utilities
Electrical
Telephone/Communications
_ Water/Sewer/Gas
D Storm Drainage/Subdrainage
D Sediment Barriers
D
a
-------
Exhinit 3-2 lcont.J
Capital Cost Element Checklist
Cost Element
Construction Activities (cont.)
Surface Water Collection
or Containment
Groundwater Extraction
or Containment
Gas/Vapor Collection /
Control
Description
Collection or contain-
ment of contaminated
surface water.
Excludes treatment, off-
site transportation, or
off-site treatment/
disposal of contami-
nated surface water.
Extraction or
containment of
contaminated
groundwater. Excludes
treatment, off-site
transportation, or off-
site treatment/disposal
of contaminated
groundwater.
Collection or control of
off-gas or air emissions
from contaminated
sources.
Example Sub-Elements
D Pumping
D Draining
D Channel/Waterway
D Berm/Dike
D Lagoon/Basin/Tank
a
a
D Extraction/Injection Well
Vertical
Horizontal
D Extraction Trench
D Pumps
D Piping
D Lagoon/Basin/Tank
D Subsurface Drains
D Subsurface Barrier
_ Slurry Wall
Grout Curtain
_ Sheet Piling
a
a
D Collection Well System
D Collection Trench System
D Collection System at Lagoon
D Fugitive Dust Control
Cover
D Vapor/Gas Emissions Control
Soil Excavation
Excavation and
handling of contami-
nated soil. Excludes
treatment, off-site
transportation, or off-
site treatment/disposal
of contaminated soil.
a
a
D Excavation
D Hauling
D Stockpiling
a
a
-------
Exhibit 3-2 tconU
Capital Cost Element Checklist
Cost Element
Description
Example Sub-Elements
Construction Activities (cont.)
Sediment / Sludge
Removal or Containment
Demolition and Removal
Cap or Cover
Removal or containment
of contaminated sediment
or sludge. Excludes
treatment, off-site
transportation, or off-site
treatment/disposal of
contaminated sediment or
sludge.
Demolition/removal of
contaminated or
hazardous materials or
structures. Excludes
treatment, off-site
transportation, or off-site
disposal of contaminated
or hazardous materials or
structures.
Construction of a multi-
layered cap or cover over
contaminated materials or
media (e.g., soil,
sediment, sludge) to
prevent or reduce
exposure and minimize
infiltration of surface
water and production of
leachate.
D Excavation
D Dredging
D Vacuuming
D Lagoon/Basin/Tank
D
a
D Drum Removal
D Tank Removal
D Piping Removal
D Structure Removal
D Asbestos Abatement
D Contaminated Paint Removal
D Ordnance Removal and Destruction
D
a
D Subgrade Preparation
D Gas Collection Layer
D Low Permeability Clay Layer
D Bentonite
D Geosynthetic Clay Layer
D Geotextile
D Geomembrane
D Granular Drainage Layer
D Geonet
D Waste Placement (Cut/Fill)
D Protective Soil Layer
D Asphalt/Concrete Pavement
D Topsoil
D Erosion Control Fabric
D Seeding/Mulch/Fertilizer
D
a
-------
Exhiait 3-2 leant.)
Capital Cost Element Checklist
Cost Element
Construction Activities (cont.)
On-Site Treatment1
Off-Site Treatment /
Disposal
Contingency
Description
Construction or
installation of a
complete and usable
on-site facility for
treatment of
contaminated media
(e.g., soil, solids,
sediment, sludge,
surface water,
groundwater),
including in situ and
ex situ techniques.
Includes all
mobilization and site
work required for the
treatment facility.
Final placement of
contaminated media,
material, or treatment
residuals at off-site
commercial facilities,
such as solid or
hazardous waste
landfills and
incinerators, that
charge fees to accept
waste based on certain
criteria.
Costs added to cover
unknowns, unforeseen
circumstances, or
unanticipated
conditions related to
construction or
installation of the
remedial action.
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
Example Sub-Elements
Mobilization/Demobilization
Site Work
Structures
Process Equipment and Appurtenances
Non-Process Equipment
Startup and Testing
Equipment Upgrade/Replacement
Material Handling/Loading
Transportation to Off-Site Facility
Treatment/Disposal Fees
Scope Contingency
Bid Contingency
1 Specify treatment technology. Examples include solidification/stabilization, biopile, low temperature thermal
desorption, soil vapor extraction, passive treatment wall, air stripping, carbon adsorption, constructed
wetland, etc. More than one technology may be associated with an individual alternative, depending on
approach and media to be treated.
-------
Exhibit 3-2 leant J
Capital Cost Element Checklist
Cost Element
Professional/Technical
Services
Project Management
Remedial Design
Construction
Management
Institutional Controls
Description
Services to support
construction or
installation of remedial
action not specific to
remedial design or
construction
management.
Services to design the
remedial action,
including pre-design
activities to collect the
necessary data.
Services to manage
construction or
installation of remedial
action, excluding any
similar services
provided as part of
construction activities.
Non-engineering (i.e.,
administrative or legal)
measures to reduce or
minimize potential for
exposure to site
contamination or
hazards (i.e., limit site
access or restrict site
access).
Example Sub-Elements
D Planning
D Community Relations
D Bid/Contract Administration
D Cost and Performance Reporting
D Permitting
D Legal
D Construction Completion Report
a
a
D Field Data Collection and Analysis
D Design Survey
D Treatability Study
Bench-Scale
_ Pilot-Scale
Field-Scale
D Preliminary /Intermediate/Final Design
Design Analysis
Plans & Specifications
Construction Cost Estimate
Construction Schedule
a
a
D Submittal Review
D Change Order Review
D Design Modifications
D Construction Observation
D Construction Survey
D Construction Schedule Tracking
D QA/QC Documentation
D O&M Manual
D Record Drawings
a
a
D Institutional Controls Plan
D Restrictive Covenants
D Zoning
D Property Easements
D Deed Notice
D Advisories
D Groundwater Use Restrictions
D Site Information Database
a
a
-------
Annual O&M Cost Elements
Annual operation and maintenance cost elements from the checklist in Exhibit 3-3 are listed
below:
O&M Activities
Monitoring, Sampling, Testing, and
Analysis
Extraction, Containment, or Treatment
Systems
Off-Site Treatment / Disposal
Contingency
Professional/Technical Services
Project Management
Technical Support
Institutional Controls
The elements listed as O&M activities are
incurred as part of physical operation and
maintenance activities. Contingency covers
unknowns or unanticipated conditions.
Project management and technical support
are professional/technical services to
support O&M activities. Institutional
controls may require annual update or
maintenance to ensure potential for
exposure to site contamination or hazards is
reduced or minimized.
As with capital costs, the terminology for
each element should be made alternative-
specific, as applicable (see "Example" above).
Annual O&M costs can vary and may be estimated for different time periods, depending on
the operating conditions and requirements. For example, the first five years of a groundwater
monitoring program may require semiannual sampling, while the next twenty years may only
require annual sampling. Likewise, an installed cap or cover may require more frequent
inspections during the first year of O&M than during subsequent years.
Costs of O&M activities are typically estimated on an element-by-element basis. Contractor
markups such as overhead and profit should generally be included in these cost elements,
rather than listed separately. Contingency (Chapter 5) is typically added as a percentage to
the total cost of O&M activities. Professional/technical services are typically estimated as a
percentage of the total cost of O&M activities plus contingency. Chapters 5 and 6 provide
more information on development and documentation of annual O&M costs.
Example Annual O&M Cost Element
Structure
An example of how annual O&M cost elements
and sub-elements might be structured for a
remedial alternative that uses air sparging (AS),
soil vapor extraction (SVE), and a passive
treatment wall to treat contaminated soil and
groundwater is as follows:
Performance Monitoring
SVE Vapor Monitoring
SVE Emissions Monitoring
Treatment Wall - Groundwater Sampling
Treatment Wall - Groundwater Analysis
Site Monitoring
Groundwater Sampling
Groundwater Laboratory Analysis
Air Sparging / Soil Vapor Extraction
Operations Labor
Maintenance Labor
Equipment Repair
Utilities
Off-Site Treatment/Disposal
Wastewater Discharge/Testing
Project Management
Technical Support
Institutional Controls
Site Information Database
-------
Exinmts-s
Annual O&M Cost Element Checklist
Cost Element
O&M Activities
Monitoring,
Sampling, Testing,
and Analysis1
Extraction,
Containment, or
Treatment
Systems2
Description
Sampling, testing, on- or
off-site analysis, data
management, and quality
assurance/quality control
during the O&M period.
Can include monitoring to
evaluate remedy
performance, compliance
with regulations, or
monitoring to track
migration of contaminant
plume.
Operation and maintenance
of on-site systems to
extract, contain, or treat
contaminated media (e.g.,
soil, sediment, sludge,
surface water,
groundwater).
Example Sub-Elements
D Meteorological Monitoring
D Air Monitoring and Sampling
D Radiation Monitoring
D Health and Safety Monitoring
D Personal Protective Equipment
D Monitoring Wells
D Soil Sampling
D Sediment Sampling
D Surface Water Sampling
D Groundwater Sampling
D Process Water Sampling
D Process Air Sampling
D Laboratory Chemical Analysis
D On-Site Chemical Analysis
D Chemical Data Management
a
a
D Operations Labor
D Maintenance Labor
D Equipment Upgrade/Replacement/Repair
D Spare Parts
D Equipment Ownership/Rental/Lease
D Consumable Supplies
D Bulk Chemicals
D Raw/Process Materials
D Utilities
a
a
Site monitoring, performance monitoring, or compliance monitoring.
Specify extraction, containment, or treatment system. Examples include groundwater extraction
system, engineered cap or cover, soil vapor extraction system, groundwater treatment facility, etc.
More than one system may be associated with an individual alternative.
-------
Exhihit3-3(cont.)
Annual O&M Cost Element Checklist
Cost Element
O&M Activities (cont.)
Off-Site Treatment /
Disposal
Contingency
Professional/Technical
Services
Project Management
Technical Support
Institutional Controls
Description
Treatment and/or disposal
of wastes generated during
operation and maintenance
(e.g., on-site treatment
residuals, monitoring
wastes) at off-site
commercial facilities, such
as solid or hazardous waste
landfills and incinerators.
Costs to cover unknowns,
unforeseen circumstances,
or unanticipated conditions
associated with annual
O&M of the remedial
action.
Services to manage O&M
activities not specific to
technical support listed
below.
Services to monitor,
evaluate, and report
progress of remedial action.
Annual update or
maintenance of non-
engineering measures to
reduce or minimize
potential for exposure to site
contamination or hazards.
Example Sub-Elements
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
Material Handling/Loading
Transportation to Off-Site Facility
Treatment/Disposal Fees
Scope Contingency
Bid Contingency
Planning
Community Relations
Cost and Performance Reporting
Permitting
Legal
O&M Manual Updates
O&M Oversight
Progress Reports
Institutional Controls Plan
Restrictive Covenants
Zoning
Property Easements
Deed Notice
Advisories
Groundwater Use Restrictions
Site Information Database
-------
Periodic Cost Elements
Periodic cost elements from the checklist in Exhibit 3-4 are listed below:
Construction / O&M Activities
Remedy Failure or Replacement
Demobilization of On-Site Extraction,
Containment, or Treatment Systems
Contingency
Professional/Technical Services
Five Year Reviews
Groundwater Performance and Optimization
Study
Remedial Action Report
Institutional Controls
Example Periodic Cost Element
Structure
An example of periodic cost elements and sub-
elements that might apply for a remedial
alternative that uses air sparging (AS), soil
vapor extraction (SVE), and a passive
treatment wall is as follows:
Five Year Reviews
Demobilization of AS/SVE System
Well Abandonment
Remedial Action Report
Update Institutional Controls Plan
Contingency is typically applied to the total of
construction/O&M activities cost elements for the year in which they occur.
Professional/technical services are typically estimated on an element-by-element basis, rather
than as a percentage, for periodic costs. Chapters 5 and 6 provide more information on
development and documentation of periodic costs.
-------
Exhibit 3-4
Periodic Cost Element Checklist
Cost Element
Construction/O&M
Activities
Remedy Failure
or Replacement
Demobilization of
On-Site
Extraction,
Containment, or
Treatment
Systems1
Contingency
Professional/Technical
Services
Five Year Reviews
Groundwater
Performance and
Optimization
Study
Description
Construction activity to
replace an installed remedy
or key components of the
remedy.
Construction activity to
dismantle or take down
extraction, containment, or
treatment facilities or
equipment upon
completion of remedial
action.
Costs to cover unknowns,
unforeseen circumstances,
or unanticipated conditions
associated with
construction/O&M
activities.
Services to prepare five-
year review reports (if
hazardous substances,
pollutants, or contaminants
remain on-site above levels
that allow for unrestricted
use and unlimited
exposure).
Services to analyze and
optimize on-going
groundwater pump and
treat systems.
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
Example Sub-Elements
Mobilization/Demobilization
Site Work
Structures
Process Equipment and Appurtenances
Non-Process Equipment
Startup and Testing
Demolition and Removal
Well Abandonment
Scope Contingency
Bid Contingency
Site Visit
Field Data Collection
Data Review and Analysis
Report Preparation
Site Visit
Field Data Collection
Data Review and Analysis
Report Preparation
Specify extraction, containment, or treatment system. Examples include groundwater extraction
system, soil vapor extraction system, groundwater treatment facility, etc. More than one system may
be associated with an individual alternative.
-------
Exhiait 3-4 leant)
Periodic Cost Element Checklist
Cost Element Description
Professional/Technical
Services (cont.)
Remedial Action Services to prepare
Report remedial action report
upon completion of
remedial action.
Institutional Controls Periodic update or
maintenance of non-
engineering measures to
reduce or minimize
potential for exposure to
site contamination or
hazards.
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
a
Example Sub-Elements
Site Visit
Field Data Collection
Data Review and Analysis
Report Preparation
Institutional Controls Plan
Restrictive Covenants
Zoning
Property Easements
Deed Notice
Advisories
Groundwater Use Restrictions
Site Information Database
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Chapter Four
Present Value Analysis
Remedial action projects typically involve construction costs that are expended at the
beginning of a project (e.g., capital costs) and costs in subsequent years that are required to
implement and maintain the remedy after the initial construction period (e.g., annual O&M
costs, periodic costs). Present value
analysis is a method to evaluate
expenditures, either capital or O&M, which
occur over different time periods. This
standard methodology allows for cost
comparisons of different remedial
alternatives on the basis of a single cost
figure for each alternative. This single
number, referred to as the present value, is
the amount needed to be set aside at the
initial point in time (base year) to assure
that funds will be available in the future as
they are needed, assuming certain economic
conditions (see "Present Value Basics" to
right).1
A present value analysis of a remedial
alternative involves four basic steps:
1. Define the period of analysis.
2. Calculate the cash outflows (payments)
for each year of the project.
3. Select a discount rate to use in the
present value calculation.
4. Calculate the present value.
The following chapter sections describe the
general requirements for each of these
steps.
4.1 Define the Period of Analysis
The period of analysis is the period of time
over which present value is calculated. In
general, the period of analysis should be
Present Value Basics
The present value (PV) of a future payment is
calculated using the following equation:
PV = -^-
where xt is the payment in year t(t=0 for present
or base year) and /' is the discount rate. For
example, suppose one needs to make a $1,000
payment in Year 5. Using a discount rate of 5%,
the present value would be:
$1,000
1 + 0.05)5
• = $783
Therefore, $783 would need to be set aside or
invested in Year 0, at a discount or interest rate of
5%, in order to have $1,000 in Year 5.
For a stream or series of future payments, the
total present value from 1 to n years would be
calculated as:
total
If a $1,000 payment is needed for each of the next
five years, then the total present value of these
payments, at a discount rate of 5%, would be:
t=5
$1,000
t=i (1 + 0.05)'
- = $4,329
Therefore, $4,329 would need to be set aside in
Year 0 to make a $1,000 payment in each of the
next five years.
1 This guide uses primarily "present value," although "net present value" and "present worth" are other commonly used
terms.
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equivalent to the project duration, resulting in a complete life cycle cost estimate for
implementing the remedial alternative. The project duration generally begins with the
planning, design, and construction of the remedial alternative, continues through short- and
long-term O&M, and ends with project completion and closeout. Each remedial alternative
may have a different project duration. For example, one alternative may have a two-year
construction period and no future O&M. Another alternative may have no construction
period and many years of O&M.
Past USEPA guidance recommended the general use of a 30-year period of analysis for
estimating present value costs of remedial alternatives during the FS (USEPA 1988). While
this may be appropriate in some circumstances, and is a commonly made simplifying
assumption, the blanket use of a 30-year period of analysis is not recommended. Site-
specific justification should be provided for the period of analysis selected, especially when
the project duration (i.e., time required for design, construction, O&M, and closeout) exceeds
the selected period of analysis.2
For long-term projects (e.g., project duration exceeding 30 years), it is recommended that the
present value analysis include a "no discounting" scenario. A non-discounted constant dollar
cash flow over time demonstrates the impact of a discount rate on the total present value cost
and the relative amounts of future annual expenditures. Non-discounted constant dollar costs
are presented for comparison purposes only and should not be used in place of present value
costs in the Superfund remedy selection process. Exhibit 4-1 illustrates the impact of
discounting for an example with a $1,800,000 initial capital cost and a $50,000 annual O&M
cost spread out over 100 years at a discount rate of 7 percent. Section 4.4 provides more
information on how the period of analysis is used in calculating present value.
^ The period of present value analysis should not necessarily be limited to the commonly-
used assumption of 30 years. Explanation should be provided whenever the period of
analysis is less than the estimated project duration.
For example, a radioactive waste containment facility may require a 10,000-year design life (i.e., project duration) in
order to protect human health and the environment, but the period of analysis for the cost estimate may be bounded at
1,000 years for calculation purposes.
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Exhibit 4-1
Non-Discounted vs. Discounted Costs for an Example Project with a 100 Year Duration
8.00
7.00
6.00
5.00
§"
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Annual cash outflows for FS present value analyses should be estimated in constant dollars,
denominated in terms of the base year (i.e., Year 0). Constant dollars, also called "real
dollars," are not affected by general price inflation (i.e., they represent "units of stable
purchasing power"). Thus, the cost of a particular good or service would be the same in
Year 0, Year 1, Year 2, etc.
^ Constant dollars, or "real dollars," are used for the present value analysis (le., no
adjustment is made for inflation).
The results of this step in the present value analysis should be an array of all costs in constant
dollars for each year of the project, as shown by the example in Exhibit 4-2.
Exhibit 4-2
Example Array of Constant Dollar Costs for Present Value Analysis
Year
0
1
2
3
4
5
6
7
8
9
10
Capital Costs ($)
1,800,000
0
0
0
0
0
0
0
0
0
0
Annual O&M
Costs ($)
0
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
Periodic Costs ($)
0
0
0
0
0
10,000
0
0
0
0
50,000
Total Cost ($)
1,800,000
50,000
50,000
50,000
50,000
60,000
50,000
50,000
50,000
50,000
100,000
4.3 Select a Discount Rate
The third step in the present value analysis is to select a discount rate. A discount rate, which
is similar to an interest rate, is used to account for the time value of money. A dollar is worth
more today than in the future because, if invested in an alternative use today, the dollar could
earn a return (i.e., interest). Thus, discounting reflects the productivity of capital. If the
capital were not employed in a specific use, it would have productive value in alternative
uses. The choice of a discount rate is important because the selected rate directly impacts the
present value of a cost estimate, which is then used in making a remedy selection decision.
The higher the discount rate, the lower the present value of the cost estimate.
USEPA policy on the use of discount rates for RI/FS cost analyses is stated in the preamble
to the NCP (55 FR 8722) and in Office of Solid Waste and Emergency Response (OSWER)
Directive 9355.3-20 entitled "Revisions to OMB Circular A-9 4 on Guidelines and Discount
Rates for Benefit-Cost Analysis" (USEPA 1993). Based on the NCP and this directive, a
discount rate of 7% should be used in developing present value cost estimates for remedial
action alternatives during the FS. This specified rate of 7% represents a "real" discount rate
in that it approximates the marginal pretax rate of return on an average investment in the
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The Office of Management and Budget (OMB)
Circular A-94, Guidelines and Discount Rates for
Benefit-Cost Analyses of Federal Programs,
provides guidance for the use of discount rates in
economic analyses performed by the Federal
government. The circular is available at
http://www.whitehouse.gov/OMB/circulars/a094/
a094.html or by contacting the OMB publications
office at (202) 395-7332.
Appendix C of OMB Circular A-94, which
contains discount rates that may be applicable to
Federal facility sites, is updated annually in
January/February.
private sector in recent years and has been adjusted to eliminate the effect of expected
inflation. Therefore, this rate should be used with "constant" or "real" dollars that have not
been adjusted for inflation (i.e., a dollar spent in future years is worth the same as a dollar
spent in the present year), which is the
typical situation for RI/FS cost analyses.
OMB Circular A-94
The 7% discount rate was established
through an economic analysis performed
by the Office of Management and Budget
(OMB). USEPA's policy regarding the
use of discount rates in present value
calculations performed during the FS will
be reevaluated periodically or when OMB
updates Circular A-94.3 Any changes to
this policy will be contained in an update
of OSWER Directive 9355.3-20, which
can be found at
http://www. epa.gov/superfund/.
There may be circumstances in which it
would be appropriate to consider the use
of a lower or higher discount rate than 7% for the FS present value analysis. If a different
discount rate is selected for the analysis, a specific explanation should be provided. For cost
estimates that have large future year expenditures or where the discount rate assumption is a
sensitive cost factor, a sensitivity analysis can be performed to evaluate the impacts of the
discount rate assumption on the present value cost. See Chapter 5 for a more complete
discussion of sensitivity analyses.
For Federal facility sites being cleaned up using Superfund authority, it is generally
appropriate to apply the real discount rates found in Appendix C of OMB Circular A-94.
These rates, which are also used in the President's annual budget submission to Congress, are
based on interest rates from Treasury notes and bonds. Because the Federal government has
a different "cost of capital" than the private sector, these rates are appropriate to use for
adjusting future year expenditures in a present value calculation for Federal facility
remediation projects. Although an analogous situation exists for Federal-lead sites that will
be cleaned up by USEPA using the Superfund trust fund (i.e., Fund-lead sites), there is
always a chance that the site will actually be remediated by a private, or "potentially-
responsible," party (i.e., PRP-lead cleanup). Therefore, the 7% discount rate should
generally be used in calculating net present value costs for all non-Federal facility sites.
^ A real discount rate of 7 percent should generally be used for all non-Federal facility
sites. Real discount rates from Appendix C of OMB Circular A-94 should generally be
used for all Federal facility sites.
Appendix C of OMB Circular A-94 is updated on an annual basis around the time of the President's budget submission to
Congress (i.e., January/February timeframe). However, the 7% discount rate contained in the main portion of the circular
is not updated on an annual basis.
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For FS cost analyses, the same discount rate should be used in evaluating all remedial
alternatives for a site, even if the period of analysis differs from one to another. Exhibit 4-3
shows a present value comparison of six remedial alternatives with varying amounts of initial
capital costs, annual O&M costs, and years of analysis. Alternative F has the second highest
total cost in base year dollars, but the lowest present value cost. This is because much of its
total costs are in the future, which become quite small after the discount rate is applied. The
cost of Alternative C is less than that of alternative D, but its present value is higher, since it
has large upfront capital costs. This example illustrates the effect of varying initial capital
cost, annual O&M costs, and period of analysis on the present value cost of alternatives.
^ The same discount rate should be used for all remedial alternatives, even if the period
of analysis varies from one to another.
Exhibit 4-3
Comparison of Present Value of Six Remedial Alternatives
Remedial
Alternative
Alternative A
Alternative B
Alternative C
Alternative D
Alternative E
Alternative F
* In this example
Initial Annual
Capital Cost O&M Cost
($000) ($000)
0
3,650
10,800
2,850
5,500
2,000
, the period
0
583
548
696
230
120
of analysis is the
Period of
Analysis*
(Years)
0
15
30
50
80
220
Total Cost
($000)
0
12,400
27,200
37,700
23,900
28,400
Present Value
at 7%
($000)
0
8,960
17,600
12,500
8,770
3,710
same as project duration.
4.4 Calculate the Present Value
The last step is to calculate the present value. The present value of a remedial alternative
represents the sum of the present values of all future payments associated with the project.
For example, if the project will entail capital and O&M costs each year for 12 years, the
present value is the sum of the present values of each of the 12 payments, or expenditures.
The present value of a future payment is the actual value that will be disbursed, discounted at
an appropriate rate of interest. Present value for payment xt in year t at a discount rate of/ is
calculated as follows:
PV =
1
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The first operand in this equation, 1/(!+//, can be referred to as a "discount factor." Exhibit
4-4 provides annual discount factors at a rate of 7% for up to 200 years. Exhibit 4-5
illustrates the use of these factors for a remedial alternative with construction costs of
$1,800,000 in Year 0, annual O&M costs of $50,000 for ten years, and periodic costs of
$10,000 in Years 5 and 10 and $40,000 in Year 10.4
Exhibit 4-4
Annual Discount Factors at 7%
Year Factor
1 0.935
2 0.873
3 0.816
4 0.763
5 0.713
6 0.666
7 0.623
8 0.582
9 0.544
10 0.508
11 0.475
12 0.444
13 0.415
14 0.388
15 0.362
16 0.339
17 0.317
18 0.296
19 0.277
20 0.258
21 0.242
22 0.226
Year Factor
23 0.211
24 0.197
25 0.184
26 0.172
27 0.161
28 0.150
29 0.141
30 0.131
31 0.123
32 0.115
33 0.107
34 0.100
35 0.0937
36 0.0875
37 0.0818
38 0.0765
39 0.0715
40 0.0668
41 0.0624
42 0.0583
43 0.0545
44 0.0509
Year Factor
45 0.0476
46 0.0445
47 0.0416
48 0.0389
49 0.0363
50 0.0339
51 0.0317
52 0.0297
53 0.0277
54 0.0259
55 0.0242
56 0.0226
57 0.0211
58 0.0198
59 0.0185
60 0.0173
61 0.0161
62 0.0151
63 0.0141
64 0.0132
65 0.0123
66 0.0115
1
Annual discount factor — , . where /- 0.07 and f- year (i.e., the present VE
(! + /)
Year Factor
67 0.0107
68 0.0100
69 0.00939
70 0.00877
71 0.00820
72 0.00766
73 0.00716
74 0.00669
75 0.00625
76 0.00585
77 0.00546
78 0.00511
79 0.00477
80 0.00446
81 0.00417
82 0.00390
83 0.00364
84 0.00340
85 0.00318
86 0.00297
87 0.00278
88 0.00260
Year Factor
89 0.00243
90 0.00227
91 0.00212
92 0.00198
93 0.00185
94 0.00173
95 0.00162
96 0.00151
97 0.00141
98 0.00132
99 0.00123
100 0.00115
110 0.000586
120 0.000298
130 0.000151
140 0.0000770
150 0.0000391
160 0.0000199
170 0.0000101
180 0.00000514
190 0.00000261
200 0.00000133
lue of one dollar paid in year t at 7%)
4 For present value analyses during the FS, distinction is generally not made as to what time of the year the total cost for
each year is incurred (e.g., beginning, middle, or end). This simplifying assumption would not necessarily be used for
budgeting purposes, but is appropriate for FS cost estimating purposes.
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Exllillit4-5
Example Present Value Calculation for a Remedial Alternative
Year
0
1
2
3
4
5
6
7
8
9
10
Total
Capital
Costs ($)
1,800,000
0
0
0
0
0
0
0
0
0
0
1,800,000
Annual
O&M Costs
($)
0
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
560,000
Periodic
Costs ($)
0
0
0
0
0
10,000
0
0
0
0
50,000
Total Cost
($)
1,800,000
50,000
50,000
50,000
50,000
60,000
50,000
50,000
50,000
50,000
100,000
2,360,000
Discount
Factor at
7%
1.000
0.935
0.873
0.816
0.763
0.713
0.666
0.623
0.582
0.544
0.508
-
Total Present
Value Cost at
7% ($)
1,800,000
46,800
43,700
40,800
38,200
42,800
33,300
31,200
29,100
27,200
50,800
2,180,000
For a stream or series of payments from 1 to n years, the total present value is:
PVtotal = ' " —^— x.
When the annual cost, xt, is constant over a period of years, beginning at Year 1, the
calculations can be simplified by using a multi-year discount factor, which is the sum of the
first operand in the above equation. Exhibit 4-6 provides multi-year discount factors at a rate
of 7% for up to 200 years, as well as the formula to calculate multi-year discount factors at
discount rates other than 7%. For example, the factor for 30 years at 7% is 12.409. Thus, the
present value of $1,000 per year for 30 years is $1,000 x 12.409 = $12,400.
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Exhibit 4-6
Multi-Year Discount Factors at 7%
Years Factor
1 0.935
2 1.808
3 2.624
4 3.387
5 4.100
6 4.767
7 5.389
8 5.971
9 6.515
10 7.024
11 7.499
12 7.943
13 8.358
14 8.745
15 9.108
16 9.447
17 9.763
18 10.059
19 10.336
20 10.594
21 10.836
22 11.061
23 11.272
24 11.469
25 11.654
26 11.826
27 11.987
28 12.137
Years Factor
29 12.278
30 12.409
31 12.532
32 12.647
33 12.754
34 12.854
35 12.948
36 13.035
37 13.117
38 13.193
39 13.265
40 13.332
41 13.394
42 13.452
43 13.507
44 13.558
45 13.606
46 13.650
47 13.692
48 13.730
49 13.767
50 13.801
51 13.832
52 13.862
53 13.890
54 13.916
55 13.940
56 13.963
Years Factor
57 13.984
58 14.003
59 14.022
60 14.039
61 14.055
62 14.070
63 14.084
64 14.098
65 14.110
66 14.121
67 14.132
68 14.142
69 14.152
70 14.160
71 14.169
72 14.176
73 14.183
74 14.190
75 14.196
76 14.202
77 14.208
78 14.213
79 14.218
80 14.222
81 14.226
82 14.230
83 14.234
84 14.237
Years Factor
85 14.240
86 14.243
87 14.246
88 14.249
89 14.251
90 14.253
91 14.255
92 14.257
93 14.259
94 14.261
95 14.263
96 14.264
97 14.266
98 14.267
99 14.268
100 14.269
110 14.277
120 14.281
130 14.284
140 14.285
150 14.285
160 14.285
170 14.286
180 14.286
190 14.286
200 14.286
'=" 1 (! + /)"-! t
*=i (! + /') i(l + i)"
(i.e., the present value of one dollar paid per year from 1 to n years at 7%)
NOTE: These factors only apply when annual costs are constant.
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Multi-year factors shown in Exhibit 4-6 cannot be used when periodic costs are added to the
annual O&M cost for the years in which they occur. In cases like these, when future
expenditures are not constant from year to year, discount factors taken from Exhibit 4-4 (or
other list of factors if 7% is not used) should be applied to each future year's expenditure to
convert into present value.
As Exhibits 4-4 and 4-6 indicate, discounted values of even large costs incurred far in the
future tend to be negligible. For example, for a 200-year project with constant annual costs
of $500,000 at 7%, 99.9% of the discounted O&M costs are incurred in the first 100 years,
97% in the first 50 years, and 88% in the first 30 years. The period of present value analysis,
however, should not be shortened to less than the project duration (Section 4.1), particularly
when O&M costs are significant, or when major costs, such as replacement or corrective
maintenance, are expected to occur in the future. In addition, evaluation of a "no
discounting" scenario would be recommended pursuant to discussion in Section 4.1.
In addition to calculating discount factors as shown in Exhibits 4-4 and 4-6, present value can
be calculated using functions found in many spreadsheet software programs. For example,
the PV function in Excel can be used to calculate the present value of a series of future
payments by providing the interest rate, total number of payments, and payment made each
period. When using spreadsheet functions or formulas, it is important that calculations be
independently checked to ensure that the functions are being applied correctly.
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Chapter Five
How to Develop the Cost Estimate
This chapter presents steps to develop a basic cost estimate for a remedial alternative during
the FS. Although a variety of estimating methods or tools may be utilized, these steps follow
a general activity-based approach, where the cost estimate is divided into discrete,
quantifiable activities or elements for each
alternative. The steps are as follows:
1. Describe the alternative.
2. Identify the cost element structure for
capital, annual O&M, and periodic costs.
3. Estimate constructon/O&M activities
costs.
4. Apply contingency.
5. Estimate professional/technical services
costs.
6. Estimate institutional controls costs, if
applicable.
7. Conduct present value analysis.
8. If appropriate, conduct a sensitivity
analysis.
9. Review estimate.
These steps are presented as a flowchart in
Exhibit 5-1 and described in further detail in
the following chapter sections.
5.1 Describe the Alternative
As the first step in development of the cost
estimate, the remedial alternative should be
described in general terms. An example of a descriptive narrative for an alternative that
utilizes the technologies of air sparging, soil vapor extraction, and passive treatment wall is
as follows:
"Alternative 3 consists of air sparging and soil vapor extraction to treat soil and
groundwater contaminated with volatile organic compounds in the source area. Also
includes a passive treatment wall along the leading edge of the plume to treat
groundwater migrating off-site. Capital costs occur in Year 0. Annual O&M costs
occur in Years 1-15. Periodic costs occur in Years 5, 10, and 15."
Types of Cost Estimating Methods
Two main types of methods used to estimate the
cost of remedial alternatives are the detailed and
parametric approach.
The detailed approach estimates costs on an item-
by-item basis. Detailed methods typically rely on
quantity take-offs and compiled sources of unit
cost data for each item, taken from either a built-
in database (if part of a software package, for
example) or other sources (e.g., cost estimating
references). This method, also known as "bottom
up" estimating, is used when design information
is available.
The parametric approach relies on relationships
between cost and design parameters. These
relationships are usually "statistically-based" or
"model-based." Statistically-based approaches
rely on "scaled-up" or "scaled-down" versions of
projects where historical cost data is available.
Model-based approaches utilize a generic design
that is linked to a cost database and adjusted by
the user for site-specific information. This
method, also known as "top down" estimating, is
used when design information is not available.
Some resources that utilize these methods can be
found in Appendix A.
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Exhibit 5-1
Steps to Develop a Basic Cost Estimate for a Remedial Alternative
1. Describe the Alternative
Identify Cost Element Structure for
for Capital, Annual O&M, and
Periodic Costs
Construction or O&M Activities
Professional/Technical Services
Institutional Controls (If Applicable)
Estimate Construction / O&M
Activities Costs
Estimate Quantity
Select Cost Data
Calculate Sub-Element Cost
Total Sub-Element Cost
4. Apply Contingency
5. Estimate Professional/Technical Services Costs
6. Estimate Institutional Controls Costs (If Applicable)
I Source of
Cost Data
Assessment of Cost
Growth Potential
Is there sufficient
uncertainty for key
factors to warrant a
sensitivity analysis?
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In addition to the above, the name and location of the site, phase of project (e.g., FS), and
date of estimate preparation should be noted. The remedial alternative, as part of the
alternative development process, will typically be described in greater detail in the body of
the FS report. This detail should state remedial action objectives, including cleanup goals.
At the time the estimate is developed, a conceptual design of the remedial alternative should
have been completed or should be in progress. The identification of the cost element
structure (Step 2), as well as estimation of quantities (included in Step 3), is directly related
to the conceptual design of the alternative (i.e., level of project definition). The narrative, as
shown in the above example, is not meant to describe every detail of the alternative, but
provide a point of reference for developing the cost estimate.
5.2 Identify Cost Element Structure
Following the description, the second step is to identify the cost element structure for the
alternative. A separate structure should be identified for capital, annual O&M, and periodic
costs. This can be done with the help of checklists presented in Chapter 3 or standard work
breakdown structures. For capital, annual O&M, and periodic cost element structures, the
following steps apply:
1. Identify construction or O&M activities cost elements.
2. Identify professional/technical services cost elements.
3. Identify institutional controls cost elements, if applicable.
Construction or O&M activities include labor, equipment, and material costs for the
contractor constructing the remedial action or for the contractor operating, maintaining,
and/or monitoring the remedial action. Sub-elements should be identified, as required, to
adequately describe each construction or O&M activity.
Professional/technical services support construction or operation and maintenance of the
remedial action. Sub-elements for professional/technical services costs may be identified, as
appropriate. Institutional controls can be a one-time (e.g., capital) or recurring cost (e.g.,
annual O&M, periodic). Sub-elements should generally be identified for institutional
controls, as appropriate.
An example cost element structure for a remedial alternative that utilizes the technologies of
air sparging (AS), soil vapor extraction (SVE), and a passive treatment wall is shown in
Exhibit 5-2.
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Exhibit 5-2
Example Cost Element Structure
Capital Costs
Annual O&M Costs
Mobilization / Demobilization
Construction Equipment and Facilities
Submittals/Implementation Plans
Temporary Facilities & Utilities
Post-Construction Submittals
Monitoring, Sampling, Testing, and Analysis
SVE Monitoring Wells
Treatment Wall Monitoring Wells
Site Work
Clearing and Grubbing
Seeding/Mulch/Fertilizer
Air Sparging / Soil Vapor Extraction
Mobilize SVE System
AS Injection Wells
AS Blower
AS Piping
SVE System
SVE Extraction Wells
SVE Piping
Electrical Hookup
Startup and Testing
Passive Treatment Wall
Construct Slurry Trench
Install Reactive Media
Off-Site Treatment/Disposal
Off-Site Transport of Soil Cuttings
Off-Site Disposal of Soil Cuttings
Wastewater Discharge/Testing
Project Management
Remedial Design
Construction Management
Institutional Controls
Institutional Controls Plan
Groundwater Use Restriction
Site Information Database
Performance Monitoring
SVE Vapor Monitoring
SVE Emissions Monitoring
Treatment Wall - Groundwater Sampling
Treatment Wall - Groundwater Analysis
Site Monitoring
Groundwater Sampling
Groundwater Laboratory Analysis
Air Sparging / Soil Vapor Extraction
Operations Labor
Maintenance Labor
Equipment Repair
Utilities
Off-Site Treatment/Disposal
Wastewater Discharge/Testing
Project Management
Technical Support
Institutional Controls
Site Information Database
Periodic Costs
Five Year Reviews
Demobilization of AS/SVE System
Well Abandonment
Remedial Action Report
Update Institutional Controls Plan
-------
5.3 Estimate Construction/O&M Activities Costs
Following the description and identification of cost element structure, the cost of each
construction or O&M activity is estimated. If the cost element is broken down into sub-
elements, the cost of each sub-element should be estimated and then added for a cost element
subtotal. The steps in this process include:
1. Estimate quantity.
2. Select cost data.
3. Calculate sub-element cost, including adjustments and application of markups.
4. Total sub-element costs.
These steps are described in more detail below.
Estimate Quantity
The estimation of quantities is directly related to the quality and quantity of site
characterization data. For example, the estimated quantity of soil or groundwater
contaminated above a cleanup goal or action level (i.e., quantity to be "cleaned up") is
dependent upon data collected during the RI to determine nature and extent of contamination.
Likewise, the estimated soil vapor extraction rate or groundwater pumping rate is dependent
on the methods used to estimate air permeability or hydraulic conductivity (e.g., estimated
values based on soil type, field pumping tests), as well as the operating capacity of the
equipment (e.g., sizing of pumps, blowers, etc.). Other factors can affect the quantity
estimate, such as the expected "swell" or "fluff in volume of excavated material for an
ex situ soil cleanup and the anticipated number of aquifer volumes to remove for an ex situ
groundwater cleanup.
Quantity calculations used to support a cost estimate should be adequately documented.
Supporting information can include boring logs, chemical analysis results, and scaled
drawings to show lateral and vertical extent of contamination and to estimate physical
characteristics such as porosity and dry unit weight which affect the quantity estimate.
Assumptions used to estimate quantities should be clearly presented.
Using the example cost element structure shown in Exhibit 5-2, example quantities for
capital costs would be the number of SVE monitoring wells, acres of clearing and grubbing,
lineal feet of SVE piping, cubic yards of reactive media, etc. Example quantities for annual
O&M costs would be the number of groundwater sampling events for site monitoring,
number of months of operations labor for the AS/SVE system, etc.
Select Cost Data
Cost data can be selected from a variety of sources, including:
Cost estimating guides/references
Vendor or contractor quotes
-------
Experience with similar projects
Cost estimating software/databases
Cost estimating guides or references (e.g., unit price books) can provide costs for a wide
variety of construction activities, including those related to remedial actions. Some guides
are specifically tailored to estimate costs for environmental remediation projects. Cost data
in these references are sometimes broken down into labor, equipment, and material
categories, and may or may not include contractor markups. Generally, each cost is
associated with a specific labor and equipment crew and production rate. Costs are typically
provided on a national average basis for the year of publication of the reference. Some of
these guides or references are listed in Appendix A.
Quotes from vendors or construction contractors can provide costs that are more site-specific
in nature than costs taken from standard guides and references. These quotes usually include
contractor markups and are usually provided as a total cost rather than categorized as labor,
equipment, or materials. If possible, more than one vendor quote should be obtained.
Quotes from multiple sources can be averaged, or the highest quote can be used in the cost
estimate if the collected quotes seem to be at the low end of the industry range. Vendors or
contractors can also be an important source of design-related information, including
operating capacity, production rates, operating life, and maintenance schedules that may have
implications for O&M costs.
Experience with similar projects, including both estimates and actual costs, can also be used
as a source of cost data. Engineering judgement should be exercised where cost data taken
from another project needs to be adjusted to take into account site- or technology-specific
parameters. Sources of actual cost data from government remediation projects are
maintained by various Federal agencies. These sources include the Historical Cost Analysis
System (HCAS) (http://www.frtr.gov/cost/ec2/mdex.html) and Federal Remediation
Technologies Roundtable (FRTR) cost and performance reports (http://www.frtr.gov/cost/).
HCAS and the FRTR reports are two initiatives that are currently being used to collect and
record treatment technology costs in a standardized format. Some of these sources of
historical cost data are listed in Appendix A.
Cost estimating software and databases can also be used as sources of cost data. The
majority of available software tools are designed to estimate the cost for all or selected cost
elements of an alternative. Government-sponsored software tools include Micro
Computer Aided Cost Engineering System (MCACES), which is used by the U.S.
Army Corps of Engineers and is linked to the Unit Price Book (UPB) database
(http://www.hnd.usace.army.mil/traces/), and the Remedial Action Cost Engineering and
Requirements (RACER), which is sponsored by the U.S. Air Force
(http://www.talpart.com/products/racer/mdex.html). Some of these software or databases,
both private and publicly sponsored, are listed in Appendix A.
-------
Health and Safety Impacts
Factors that may affect both capital and O&M
cost elements due to health and safety precautions
include:
Decontamination facilities and operations
Protective equipment cost and disposal
Additional labor for health and safety
personnel
Rest periods required to prevent heat stress
or cold weather impacts
Time to suit-up, decontaminate, and change
air tanks
Personnel training
Health and safety briefings and meetings
Some of these costs can be accounted for in
overhead or specific cost elements. How to
account for the impacts of health and safety level
of protection on labor and equipment productivity
is described in Appendix B.
Calculate Sub-Element Cost
Calculating the cost of each sub-element
consists of calculating a unit cost from a
source of cost data, including adjustments for
site- or project-specific factors, and
multiplying by the estimated quantity.
Adjustments may include the following:
Apply productivity factors per health and
safety level of protection
Escalate costs to base year of estimate
Apply area cost factors
Add contractor markups
As the level of health and safety protection
(e.g., personal protective equipment,
monitoring requirements) is increased,
productivity is decreased and costs are
increased. For applicable cost elements,
factors that reflect decreased productivity due
to required health and safety levels of
protection should be applied to labor and
equipment costs. More information on productivity factors and how to apply them is
provided in Appendix B.
Unit costs that are obtained from sources that are one year old or more need to be updated or
escalated to the base year, which is usually the current year. This can be done using
escalation factors as described in Appendix B.
Area cost factors should be applied to unit costs from sources based on a national average
(e.g., standard cost guides) or from other geographic locations (e.g., similar projects). Area
cost factors are further described in Appendix B.
Contractor markups, or overhead and profit, which may vary between sub-elements, should
be added. Markups include overhead and profit for the prime contractor and any
subcontractors. Markups should generally be applied to individual cost elements or
sub-elements, but, alternatively, can be applied to the total of those elements, if the source of
cost data for each is the same. Markups should not be duplicated or applied to elements that
have already been "marked up."
The source of cost data can dictate how, or if, markups should be applied. For example, a
vendor or contractor quote may include overhead and profit (i.e., "burdened"), whereas a unit
price taken from a standard cost estimating guide may not (i.e., "non-burdened"). Typically,
costs taken from pricing guides need to have overhead and profit added.
-------
Overhead includes two main types: (1) job or field office overhead, also known as general
conditions, and (2) home office overhead, also known as general and administrative (G&A)
costs. Field office overhead can include costs for field supervision and office personnel,
temporary facilities and utilities, telephone and communications, permits and licenses, travel
and per diem, personal protective equipment, quality control, insurance, bond, and taxes.
Home office overhead is the contractor's overall cost of doing business, as shared by the
project. Profit is the return on the contractor's investment in the project.
^ Field office overhead can range front about 5 to 25 percent of total project costs that
range from greater than $500,000 to less than $50,000, respectively. Home office
overhead is usually about 5 percent of total project cost.
^ Profit typically ranges from 8 to 10 percent of total project cost.
An example of how a unit cost for a sub-element might be calculated is shown in Exhibit 5-3
for construction cost of a soil vapor extraction well.
Exllillit5-3
Example Calculation of Sub-Element Unit Cost
Costs per extraction well:
DESCRIPTION
Mob/demob
Setup & Decon
Drill & Install
Wellhead Completion
IDW Handling
Drilling Oversight
SUBTOTAL
Prime Contractor Overhead
SUBTOTAL
Prime Contractor Profit
TOTAL UNIT COST
QTY
1
1
15
1
1
7
UNIT LABOR EQUIP
LS
HR
FT
LS
HR
HR 110
UNIT
MTRL TOTAL
100
125
55
950
175
110
15%
10%
L
TOTAL
100
125
825
950
175
770
2,945
442
3,387
339
$3,725 |
In this example, costs are based on a quote from a local drilling subcontractor, itemized by
activity. The assumed health and safety level of protection is built into the quote; therefore,
no outside adjustment is made for health and safety productivity. Likewise, no costs are
escalated, since the base year is the current year, and no area cost factor is applied, since the
quote is local. Subcontractor overhead and profit are included in the quote. Prime contractor
overhead and profit are added. Unit prices taken from standard cost estimating guides
typically are broken down into labor, equipment, and materials categories. However, since
these were not provided in the quote, these are not shown except for oversight, which is
based on typical labor rates in the area for a geologist and technician.
Using the above example, if eight soil vapor extraction wells are to be installed, then the total
cost of this sub-element would be 8 x $3,725 = $29,800.
-------
Total Sub-Element Costs
After the cost for each sub-element has been calculated, then the cost of the associated cost
element can be calculated by totaling the sub-element costs. An example is shown in Exhibit
5-4 for construction cost of an air sparging / soil vapor extraction system.
Exhibit 5-4
Example Estimation of Cost Element
Air Sparging / Soil Vapor Extraction
Mobilize SVE System
Impermeable Surface Cover
SVE Extraction Wells
AS Injection Wells
SVE System
AS Blower
SVE Piping
AS Piping
Electrical Hookup
Startup and Testing
SUBTOTAL
1
105,000
8
2
1
1
400
100
1
1
EA
SF
EA
EA
EA
EA
LF
LF
LS
LS
$1,534
$0.84
$3,725
$4,645
$93,510
$5,712
$8.66
$5.03
$9,898
$10,936
$1,534
$88,200
$29,803
$9,290
$93,510
$5,712
$3,464
$503
$9,898
$10,936
$252,851
This example includes the sub-element "SVE Extraction Well" from Exhibit 5-3.
5.4 Apply Contingency
Contingency is factored into a cost estimate to cover unknowns, unforeseen circumstances, or
unanticipated conditions that are not possible to evaluate from the data on hand at the time
the estimate is prepared. It is used to reduce the risk of possible cost overruns.
For the purposes of the FS, contingency is typically applied as a percentage of the total cost
of construction or O&M activities costs, rather than applied to individual cost elements. The
contingency percentage is based on either a qualitative or quantitative assessment of "cost
growth," or "cost risk," potential.1 Detailed quantitative methods used to evaluate cost
growth potential include element by element risk scoring and weighting techniques and risk
analysis software such as CostRisk, which is currently under development for use by
USAGE. A more common approach for the FS, however, is to assign a contingency
percentage based on engineering judgement.
The two main types of contingency are scope and bid. Scope contingency covers unknown
costs due to scope changes that may occur during design. Bid contingency covers unknown
costs associated with constructing or implementing a given project scope. The relationship
of scope, bid, and total contingency as a project moves through its various phases is
illustrated in Exhibit 5-5.
1 Factors that affect the potential for cost growth in remediation projects include the project definition and the complexity
of the media, waste, and technical aspects of the project.
-------
Exhibit 5-5
Relationship of Scope, Bid, and Total Contingency
a:
o
o
o
Total = Scope + Bid
Feasibility Study / Intermediate Design Final Design / Start End of Construction / EndofO&M
Conceptual Design of Construction Start of O&M
PHASE OF PROJECT
Scope Contingency
Scope contingency represents project risks associated with an incomplete design. This type
of contingency represents costs, unforeseeable at the time of estimate preparation, which are
likely to become known as the remedial design proceeds (Exhibit 5-5). For this reason,
scope contingency is sometimes referred to as "design" contingency, which is the term
commonly used by the USAGE. In general, scope contingency should decrease as design
progresses and should be 0% at the 100% design stage.
At the early stages of remedial design (e.g., FS which represents 0%-10% design
completion), concepts are not typically developed enough to identify all project components
or quantities. Contributing factors include limited experience with certain technologies,
potential requirements due to regulatory or policy changes, and inaccuracies in defining
quantities or characteristics. Scope contingency would be expected to be higher for newer or
emerging remedial technologies than for more well-documented systems. For these reasons,
scope contingency may vary between alternatives.
v Scope contingency typically ranges from 10 to 25 percent. Higher values may be
justified for alternatives with greater levels of cost growth potential.
Exhibit 5-6 shows example rule-of-thumb percentage ranges to use for scope contingency
during the FS, based on type of remedial technology. A low percentage for scope
contingency indicates an opinion that the project scope will undergo minimal change during
-------
design. A high percentage indicates an opinion that the project scope may change
considerably between the FS and final design.
Exhibit 5-6
Example FS-Leuel Scope Contingency Percentages
Remedial Technology
Soil Excavation
Groundwater Treatment (Multiple)
On-Site Incineration
Extraction Wells
Vertical Barriers
Synthetic Cap
Sludge Stabilization
Off-Site Disposal
Off-Site Incineration
Drum Processing
Bulk Liquid Processing
Groundwater Treatment (Single)
Clay Cap
Surface Grading/Diking
Revegetation
Scope Contingency (%)
15-55
15-35
15-35
10-30
10-30
10-20
10-20
5-15
5-15
5-15
5-15
5-10
5-10
5-10
5-10
While not accounting for every type of remedial technology, this exhibit provides a range of
values to consider for scope contingency. Engineering judgement should be used whenever
selecting a scope contingency percentage and the value used should be clearly identified in
the cost estimate. The values in Exhibit 5-6 may be weighted by cost element, either
qualitatively or quantitatively, to derive a single value to apply to the total of construction or
O&M activities costs.
Bid Contingency
Bid contingency represents costs, unforeseeable at the time of estimate preparation, which
are likely to become known as the remedial action construction or O&M proceeds (Exhibit 5-
5). For this reason, bid contingency is sometimes referred to as "construction" contingency,
which is the term commonly used by the USAGE.
Bid contingency accounts for changes that occur after the construction contract is awarded.
This contingency represents a reserve for quantity overruns, modifications, change orders,
and/or claims during construction. Considerations include the technological, geotechnical,
and other unknowns applicable to the construction phase. Examples include changes due to
adverse weather, material or supply shortages, or new regulations.
^ Bid contingency typically ranges from 10 to 20 percent
Bid and scope contingency may be added together and applied to the total of construction or
O&M activities costs as shown in the example in Exhibit 5-7 for capital costs.
-------
Exhibit 5-7
Example Contingency Application
Capital Costs:
Mobilization / Demobilization
Monitoring, Sampling, Testing, and Analysis
Site Work
Air Sparging / Soil Vapor Extraction
Passive Treatment Wall
Off-Site Treatment / Disposal
SUBTOTAL
Contingency (10% scope + 15% bid)
$106,723
$60,838
$12,940
$252,851
$2,028,564
$1,550
$2,463,465
615,866
In general, for a cost estimate developed during the FS, the same level of risk associated with
remedial design for capital costs can be carried over to annual O&M costs. In addition, the
relative number of unknowns associated with operating and maintaining a remedial action
would be expected to be at least the same or greater than those associated with construction.
^ The total contingency value (bid + scope) that is applied to annual O&M costs is
typically equal to or greater than the contingency applied to capital costs.
Using the example in Exhibit 5-6, the total contingency to apply to the total of "O&M
activities" costs might be 30 percent (10% scope + 20% bid), or slightly greater than that for
capital "construction activities" costs.
5.5 Estimate Professional/Technical Services Costs
Professional/technical services cost elements can be broken down into sub-elements and
estimated in similar fashion to construction or O&M activities costs (Section 5.3). However,
these costs are most often estimated by applying a percentage to the total of construction or
O&M activities costs plus contingency. The total capital, annual O&M, or periodic cost,
therefore, is the total of construction or O&M activities costs, contingency, and
professional/technical services. Professional/technical services cost elements include:
Project Management
Remedial Design
Construction Management
Technical Support
For professional/technical services capital costs, Exhibit 5-8 shows rule-of-thumb
percentages that can be used for project management, remedial design, and construction
management as a percentage of total construction cost. The percentages shown apply to the
average remediation project and are provided as a guide. These values may be adjusted up
-------
for more complex projects or down for less complex projects, based on engineering
judgement, which might consider actual cost data from similar projects.
Exhihit5-8
Example Percentages for Professional/Technical Services Capital Costs
Capital Cost Element
Project Management
Remedial Design
Construction
Management
< S100K
(%)
10
20
15
$100K-$500K
(%)
8
15
10
$500K-$2M
(%)
6
12
8
$2M-$10M
(%)
5
8
6
>$10M
(%)
5
6
6
Professional/technical services costs are further described below.
Project Management
Project management, which can apply to either capital or O&M cost, includes services that
are not specific to remedial design, construction management, or technical support of O&M
activities. Project management includes planning and reporting, community relations support
during construction or O&M, bid or contract administration, permitting (not already provided
by the construction or O&M contractor), and legal services outside of institutional controls
(e.g., licensing).
^ For capital costs, project management can be estimated using Exhibit 5-8. For O&M
costs, project management generally ranges from 5 to 10 percent of total annual O&M
cost.
Remedial Design
Remedial design applies to capital cost and includes services to design the remedial action.
Activities that are part of remedial design include pre-design collection and analysis of field
data, engineering survey for design, treatability study (e.g., pilot-scale), and the various
design components such as design analysis, plans, specifications, cost estimate, and schedule
at the preliminary, intermediate, and final design phases.
^ The percentage of total capital cost for remedial design can be estimated using
Exhibit 5-8.
Construction Management
Construction management applies to capital cost and includes services to manage
construction or installation of the remedial action, except any similar services provided as
part of regular construction activities. Activities include review of submittals, design
modifications, construction observation or oversight, engineering survey for construction,
preparation of O&M manual, documentation of quality control/quality assurance, and record
drawings.
-------
^ The percentage of total capital cost for construction management can be estimated
using Exhibit 5-8.
Technical Support
Technical support during O&M includes services to monitor, evaluate, and report progress of
remedial action (i.e., all O&M professional/technical services not provided under project
management). This includes oversight of O&M activities, update of O&M manual, and
progress reporting.
^ O&M technical support generally ranges from 10 to 20 percent of total annual O&M
cost.
An example of how professional/technical services cost elements would be estimated using
percentages and added to the total of construction cost elements plus contingency is shown in
Exhibit 5-9 for capital costs.
Exhibit 5-9
Example Estimation of Professional/Technical Services Costs
CONSTRUCTION SUBTOTAL
Contingency (10% scope + 15% bid)
SUBTOTAL
Project Management (5%)
Remedial Design (8%)
Construction Management (6%)
TOTAL
$2,463,465
615,866
$3,079,331
153,967
246,346
184,760
$3,664,404
5.6 Institutional Controls
Institutional controls, which can have one-time or recurring costs (capital, annual O&M, or
periodic), are non-engineering or legal/administrative measures to reduce or minimize the
potential for exposure to site contamination or hazards by limiting or restricting site access.
Examples include institutional controls plan, restrictive covenants, property easements,
zoning, deed notices, advisories, groundwater use restrictions, and site information database.
An institutional controls plan would describe the controls for a site and how to implement
them. A site information database would provide a system for managing data necessary to
characterize the current nature and extent of contamination.
Institutional controls are project-specific costs that can be an important component of a
remedial alternative and, as such, should generally be estimated separately from other costs,
usually on a sub-element basis. Institutional controls may need to be updated or maintained,
either annually or periodically. Contingency is generally not applied to institutional control
-------
cost elements. An example of how institutional controls cost elements would be estimated as
for capital costs is shown in Exhibit 5-10.
Exhibit 5-10
Example Estimation of Institutional Controls Costs
Institutional Controls
Institutional Controls Plan
Groundwater Use Restriction
Site Information Database
SUBTOTAL
EA
LS
LS
$5,000
$3,200
$4,800
$5,000
$3,200
$4,800
$13,000
5.7 Present Value Analysis
To allow for comparison of different alternatives on the basis of a single cost figure, the
present value of capital, annual O&M, and periodic costs should be analyzed according to the
procedures in Chapter 4. Discount factors, either single-year or multi-year, should be
carefully selected depending on the period of analysis to which they are applied. An example
present value analysis of the different types of cost for a remedial alternative is shown in
Exhibit 5-11.
ExhilJit5-11
Example Present Value Analysis
COST TYPE
Capital Cost
Annual O&M Cost
Periodic Cost
Periodic Cost
Periodic Cost
YEAR
0
1-15
5
10
15
TOTAL
COST
$3,677,404
$4,590,763
$14,800
$14,800
$48,458
$8,346,000
TOTAL COST
PER YEAR
$3,677,404
$306,051
$14,800
$14,800
$48,458
DISCOUNT
FACTOR (7%)
1.000
9.108
0.713
0.508
0.362
I
PRESENT
VALUE
$3,677,404
$2,787,511
$10,552
$7,518
$17,542
$6,501,000
I
5.8 Sensitivity Analysis
Sensitivity analysis is a type of uncertainty analysis that measures the project impact of
changing one or more input values. In the development of a remedial alternative cost
estimate, a sensitivity analysis should be considered for those factors that have a relatively-
high degree of uncertainty and that, with only a small change in their value, could
significantly affect the overall cost of the alternative. This type of analysis is considered
separate from a "cost growth" or "cost risk" analysis used to determine the amount of
-------
contingency to apply to the cost estimate (Section 5.4). However, a sensitivity analysis could
be used to support a contingency analysis (e.g., to help select site-specific contingency
factors).
Factors to consider in a cost sensitivity analysis for a remedial alternative include:
Nature and Extent of Contamination - Estimated volumes of contaminated media or
material and degree of contamination (i.e., concentrations) are dependent on assumptions
about site conditions.
Remedy Failure / Effective Life of Technology - The potential failure of a remedy or
components thereof would require substantial additional costs for replacement of the
remedy or its components. Particularly relevant for technologies or processes that are
unproven and lack sufficient performance history.
Project Duration - The time required for a remedial action, or components thereof, to
achieve remedial action objectives can be a major factor, particularly for those actions
requiring many years of O&M.
Discount Rate - Although a rate of 7% should normally be used to compare alternatives,
a range of values both below and above 7% can be used to investigate uncertainty
concerning future economic conditions.
A sensitivity analysis might vary the values for these factors (e.g., low, medium, high), while
keeping the values for other factors the same, and noting the impact on the total estimated
cost. Advantages of a sensitivity analysis include:
Helps identify critical factors where additional data collection resources may need to be
spent during subsequent phases of remedial design.
Provides potential answers to "what if scenarios.
Does not require the use of probabilities as do other methods, such as Monte Carlo
analysis.
The results of a sensitivity analysis should be reported in terms of total present value for each
scenario. The baseline, or original estimate, should be included for comparison. An example
of how the results of a sensitivity analysis might be presented is shown in Exhibit 5-12.
Scenario 1 is the baseline. In Scenario 2, the project duration is extended by ten years. In
Scenario 3, a major capital expenditure is required in Year 8 (e.g., replacement of reactive
iron in a treatment wall).
-------
fxMMt5-12
Example Sensitivity Analysis
PRESENT VALUE COST
YEAR
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
TOTAL
1 . Baseline
1
$3,677,404
$286,029
$267,317
$249,829
$233,485
$228,762
$203,935
$190,593
$178,124
$166,471
$163,104
$145,403
$135,890
$127,000
$118,692
$128,490
$6,501,000
- original estimate.
2. Project duration is increased by
3. Reactive iron for treatment wall
2
$3,677,404
$286,029
$267,317
$249,829
$233,485
$228,762
$203,935
$190,593
$178,124
$166,471
$163,104
$145,403
$135,890
$127,000
$118,692
$116,291
$103,670
$96,888
$90,549
$84,626
$82,914
$73,915
$69,080
$64,560
$60,337
$65,318
$7,280,000
10 years.
is replaced in Year 8.
3
$3,677,404
$286,029
$267,317
$249,829
$233,485
$228,762
$203,935
$190,593
$1,358,767
$166,471
$163,104
$145,403
$135,890
$127,000
$118,692
$128,490
$7,681,000
5.9 Review Estimate
The last step in the process is to review the estimate for completeness. Exhibit 5-13 is a
checklist to help review the cost estimate for a remedial alternative.
-------
Exhibits-is
Key Questions to Ask when Reviewing a Remedial Alternative Cost Estimate
1. Has a description of the alternative been provided?
- If so, are key processes or technologies identified per the development process and
conceptual design of alternative?
- Have the site, location, and project phase been noted?
2. Have the capital, annual O&M, and periodic cost element structures been fully developed?
- Have all applicable construction or O&M activities costs elements been identified?
- Have all applicable professional/technical services cost elements been identified?
- Have all applicable institutional controls cost elements been identified?
3. Have quantities for construction and O&M activities cost elements been estimated with
sufficient backup?
- Have calculation sheets, drawings, vendor information, or similar supporting data been
included?
- Have assumptions used to estimate quantities been clearly identified?
4. Have unit costs for construction and O&M activities cost elements been estimated with
sufficient backup?
- Is the source of cost data identified? Is the source appropriate?
- Are sub-elements described in sufficient detail with assumptions clearly identified?
- Have all assumptions been taken into account?
- Have labor, equipment, and materials been included?
- Has crew production rate or cost been adjusted to account for inefficiency associated with
health and safety level of protection?
- If a cost has been taken from another estimate or a published cost reference, has it been
adjusted it to account for different location (area cost factor) and for different time
(escalation to base year)?
- Has subcontractor, if applicable, and prime contractor markups (i.e., overhead, profit)
been added?
- Are the percentages used for overhead and profit appropriate?
- Have any markups been duplicated?
- Are quotations from suppliers and subcontractors documented in the backup?
5. Has contingency been applied to the total of construction or O&M activities costs?
- Have both scope and bid contingency been considered?
— Are the values used for percentages appropriate, considering the technologies utilized by
the alternative?
-------
Exhibit 5-13 tcontJ
Key Questions to Ask when Reviewing a Remedial Alternative Cost Estimate
6. Have the applicable professional/technical services costs been added?
- If estimated on a percentage basis, are the values used appropriate, considering the total
project cost and complexity?
7. If applicable, have the costs associated with implementing and maintaining institutional
controls been estimated?
8. Were guidelines followed for the present value analysis?
- Is the period of present value analysis different than the anticipated project duration (i.e.,
time required for design, construction, O&M, and closeout)? If so, is explanation
provided?
- Are all capital, annual O&M, and periodic costs included in the present value analysis?
- Is the discount rate used consistent with USEPA policy (e.g., 7%)? If not, is explanation
provided?
- Is the same discount rate used across all of the alternatives analyzed?
- If discount factors were used, have the appropriate single-year or multi-year factors been
applied, considering the period of analysis for each type of cost (i.e., capital, annual
O&M, periodic)?
9. Is there sufficient uncertainty for key factors to warrant a sensitivity analysis? If a sensitivity
analysis was done, are results presented clearly in terms of total present value of the
alternative?
-------
-------
Chapter Six
How to Document the Cost Estimate
Cost estimates of remedial alternatives developed during the FS should be documented
within the FS report such that costs and underlying assumptions are clearly presented and
understood. Documentation for the FS should be structured using the following three
components:
Detailed cost backup
Cost summary of individual remedial alternatives
Comparative cost summary of all remedial alternatives
These components are described further in the following three chapter sections. The fourth
section provides information on post-RI/FS documentation of the cost estimate of the
proposed or selected remedy.
6.1 Detailed Cost Backup
Detailed cost backup for remedial alternative cost estimates should be provided in an
appendix to the FS report. This material can include cost calculation sheets, quantity
calculation sheets, records of communication for vendor quotes, and conceptual design
calculations. If cost estimating software is used to estimate all or part of the costs for
remedial alternatives, input/output from these software applications should be provided as
part of the detailed backup.
For each cost element or sub-element, a standard worksheet can be used to document the
calculation of the total unit cost as shown in Exhibit 6-1 for the example of an SVE
extraction well. This type of cost worksheet, together with quantity calculation sheets and
other supporting information, can be used to trace each cost shown in the cost summary of an
alternative to its underlying assumptions.
6.2 Individual Cost Summary
The cost estimate of each remedial alternative should be presented in a one- to two-page cost
summary table such as the example shown in Exhibit 6-2. The individual cost summary
should present all capital costs, annual O&M costs, any periodic costs, and present value
analysis for the remedial alternative. The cost summary should be an activity-based format
that identifies all cost elements and sub-elements of the alternative. Individual cost
summaries should be provided within the individual analysis section of the FS report or
within a cost estimate appendix to the FS report.
6.3 Comparative Cost Summary
The total estimated cost for all remedial alternatives should be presented within the
comparative analysis section of the FS report in a summary table such as the example shown
in Exhibit 6-3. Alternatively, costs for remedial alternatives can be compared as part of the
-------
detailed analysis table, typically provided in FS reports to compare the alternatives against
each of the nine NCP criteria. The total cost presented for each alternative should include
total capital cost, annual O&M cost, total periodic cost (if any), and total present value. The
project duration in years should be noted as this impacts the present value analysis. It should
also be noted when the period of present value analysis differs from the project duration. If
there are different annual O&M costs for different periods of time, this may need to be
broken out in the comparative cost summary.
6.4 Cost Estimate of Proposed or Selected Remedy
Following the RI/FS, as part of the remedy selection process, the cost estimate of the selected
remedy is summarized in the record of decision (ROD). In addition, cost information for
proposed remedies that meet certain cost-based criteria is submitted to the National Remedy
Review Board (NRRB) for review. The following paragraphs, primarily intended for the
audience of remedial project managers and program managers, provide more detail on these
two topics.
Standard Cost Estimate Disclaimer
Language
Record of Decision
The same type of one- to two-page format shown in Exhibit 6-2 for remedial alternative cost
estimates developed during the FS can be used to present the cost summary of the selected
remedy in the ROD. During remedy selection, the preferred alternative presented in the
proposed plan can undergo changes as a result of
public comment or new information such as
additional site characterization data. Any
changes to the selected remedy should be
reflected in the cost summary presented in the
ROD. In addition, if the remedy selection
process has spanned a considerable amount of
time (e.g., more than 1 year), the estimated costs
should be escalated to a new base year. Standard
cost estimate disclaimer language should be
added to acknowledge the uncertainty associated
with cost estimates (see highlight box to right).
For more information on the presentation of
estimated remedy costs in the ROD, see A Guide
to Preparing Super/and Proposed Plans, Records
of Decision, and Other Remedy Selection
Documents (USEPA 1999).
"The information in this cost estimate summary
table is based on the best available information
regarding the anticipated scope of the remedial
alternative. Changes in the cost elements are
likely to occur as a result of new information and
data collected during the engineering design of
the remedial alternative. Major changes may be
documented in the form of a memorandum in the
administrative record file, an explanation of
significant differences, or a ROD amendment.
This is an order-of-magnitude engineering cost
estimate that is expected to be within -30 to +50
percent of the actual project cost."
Source: A Guide to Preparing Super/and
Proposed Plans, Records of Decision, and Other
Remedy Selection Decision Documents (USEPA
1999)
National Remedy Review Board
The NRRB is a peer review group comprised of
USEPA managers and senior technical policy
experts that reviews proposed Superfund cleanup decisions meeting cost-based review
criteria to assure that they are consistent with Superfund law, regulations, and guidance. In
general, the NRRB reviews those cleanup decisions that exceed specific cost criteria. For
-------
more information on the NRRB, its procedures, and cost criteria that trigger reviews, visit
http://www.epa.gov/superfund/programs/nrrb/.
The following provides guidance for submitting remedy cost estimate information to the
NRRB that should accompany briefing materials to allow the NRRB to more accurately
assess the cost-effectiveness of the proposed remedy:
1. The summary materials should contain sufficient information to provide an estimate of
total resource costs over time (i.e., life cycle costs). Pursuant to the NCP, this estimate
should include the capital costs, annual operations and maintenance costs, and net
present value of capital and O&M costs. Cost information should be provided for the
preferred alternative, as well as each alternative evaluated in the detailed analysis of the
FS (or which will be listed in the proposed plan).
2. Cost estimate summaries should address the following:
a. The key cost components/elements for both RA and O&M activities;
b. The major sources of uncertainty in the cost estimate;
c. The discount rate used;
d. The time expected to achieve remedial action objectives and remediation goals;
e. Periodic capital and/or O&M costs anticipated in future years of the project (e.g.,
remedy replacement or rebuild);
f. The methods and resources used for preparing the cost estimate (e.g., estimating
guides, vendor quotes, computer cost models).
3. For "contingency remedy decisions," the total project costs for implementing the
contingency should be provided in addition to the costs for the conditional action. This
estimate should include treatability study costs, if applicable.
4. The assumptions used to develop the cost estimate should be consistent with the stated
remedial action objectives and remediation goals (e.g., duration of the cost estimate
should match time to achieve cleanup objectives).
This kind of information is generally considered useful in other management-level review
settings as well.
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Exhibit 6-1
Example Cost Worksheet
Alternative 3
Capital Cost Sub-Element
SVE EXTRACTION WELL
COST WORKSHEET
Site: Former Industrial Site
Location: Any City, Any State
Phase: Feasibility Study (-30% to +50%)
Base Year: 2000
Prepared By: MPM
Date: 4/12/00
Checked By: JMR
Date: 4/12/00
Work Statement:
Install SVE extraction well to total depth of 15 feet with 10-foot factory-slotted screen. Installation includes drilling with hollow-stem auger,
continuous soil sampling, installation of 4-inch Schedule 40 PVC blank and screen with filter pack and grout seal, setup and decontamination,
containerization of investigation-derived waste (IDW), and wellhead completion (concrete, flush-mount vault with lock, tee with valve and flexible
coupling). Health and safety protection is Level D.
Cost Analysis:
Costs per extraction well:
DESCRIPTION
Mob/demob
Setup & Dec on
Drill & Install
Wellhead Completion
IDW Handling
Drilling Oversight
SUBTOTAL
Prime Contractor Overhead
SUBTOTAL
Prime Contractor Profit
TOTAL UNIT COST
QTY UNIT LABOR EQUIP MTRL
1
1
15
1
1
7
LS
HR
FT
LS
HR
HR
110
UNIT
TOTAL
100
125
55
950
175
110
TOTAL
100
125
825
950
175
770
2,945
442
3,387
% of mob/demob for all wells
Includes well materials
Includes vault, tee with fittings
Includes drums
$65/hr geo + $45/hr technician
Source of Cost Data:
3-20-00 quote from John Smith, ABC Drilling Services, tel. no. 999-999-9999. Rates for geologist and technician are based on typical labor rates for
area.
Cost Adjustment Checklist:
FACTOR:
I S | H&S Productivity (labor & equip only)
I ^ I Escalation to Base Year
| v^ | Area Cost Factor
I ^ | Subcontractor Overhead and Profit
~S Prime Contractor Overhead and Profit
NOTES:
Quote is for Level D.
Current year (2000) is base year.
Quote is from local vendor.
Included in quote.
Includes 15% overhead and 10% profit.
-------
Exhibits!
Example Remedial Alternative Cost Summary
Alternative 3
IN SITU TREATMENT
Site: Former Industrial Site
Location: Any City, Any State
Phase: Feasibility Study (-30% to +50%)
Base Year: 2000
Date: April 12, 2000
CAPITAL COSTS:
DESCRIPTION
Mobilization / Demobilization
Construction Equipment & Facilities
Submittals/ Implementation Plans
Temporary Facilities & Utilities
Post-Construction Submittals
SUBTOTAL
Monitoring, Sampling, Testing, and Analysis
Monitoring Wells - SVE
Monitoring Wells - Trtmt. Wall - Shallow
Monitoring Wells - Trtmt. Wall - Deep
Geotechnical Testing
SUBTOTAL
Site Work
Clearing and Grubbing
Seeding/Mulch/Fertilizer
SUBTOTAL
Air Sparging / Soil Vapor Extraction
Mobilize SVE System
Impermeable Surface Cover
SVE Extraction Wells
AS Injection Wells
SVE System
AS Blower
SVE Piping
AS Piping
Electrical Hookup
Startup and Testing
SUBTOTAL
Passive Treatment Wall
Construct Slurry Trench
Install Reactive Media
SUBTOTAL
Off-Site Treatment / Disposal
Off-Site Transport of Soil Cuttings
Disposal of Soil Cuttings
Wastewater Discharge/Testing
SUBTOTAL
SUBTOTAL
Contingency
SUBTOTAL
Project Management
Remedial Design
Construction Management
Institutional Controls
Institutional Controls Plan
Groundwater Use Restriction
Site Information Database
SUBTOTAL
TOTAL CAPITAL COST
COST ESTIMATE SUMMARY
Description:
QTY
1
1
1
1
7
5
5
17
5
5
1
105,000
8
2
1
1
400
100
1
1
1,800
1,800
25
25
300
25%
5%
8%
6%
1
1
1
Alternative 3 consists of air sparging in combination with soil vapor
extraction to treat soil and groundwater in the source area. Also includes
passive treatment wall along leading edge of plume to treat groundwater
migrating off-site. Capital costs occur in Year 0. Annual O&M costs
occur in Years 1-15. Periodic costs occur in Years 5, 10, and 15.
UNIT
LS
LS
LS
LS
EA
EA
EA
EA
AC
AC
EA
SF
EA
EA
EA
EA
LF
LF
LS
LS
CY
CY
EA
EA
GAL
EA
LS
LS
UNIT
COST
$8,829
$33,761
$49,664
$14,469
$1,577
$2,965
$6,212
$230
$1,161
$1,427
$1,534
$0.84
$3,725
$4,645
$93,510
$5,712
$8.66
$5.03
$9,898
$10,936
$187
$940
$15
$35
$1.00
$5,000
$3,200
$4,800
L
TOTAL
$8,829
$33,761
$49,664
$14,469
$106,723
$11,040
$14,826
$31,061
$3,910
$60,838
$5,804
$7,136
$12,940
$1,534
$88,200
$29,803
$9,290
$93,510
$5,712
$3,464
$503
$9,898
$10,936
$252,851
$337,194
$1,691,370
$2,028,564
$375
$875
$300
$1,550
$2,463,465
615,866
$3,079,331
153,967
246,346
184,760
$5,000
$3,200
$4,800
$13,000
$3,677,404 |
NOTES
Excavators, loaders, etc.
QAPP, SSHP, etc.
Fence, roads, signs, trailers, etc.
Post-const, reports
Install to water table depth
Shallow well at each of 5 clusters
Deep well at each of 5 clusters
MW screen interval soil samples
Work area
Revegetate work area
Mobile unit
Low density polyethylene liner
4" wells to water table depth
Well depth = midpoint of aquifer
Mobile unit (250 scfm)
Pipe, valves, fittings, etc.
Pipe, valves, fittings, etc.
Operate excavator/clamshell
Prepare & inject iron/guar gum slurry
Transport of drums to SWLF
SWLF drum disposal fee
City fee - development water
10% scope + 15% bid
Describe controls / implementation
Legal fees
Setup data management system
-------
Exhibit 6-2 [cont.J
Example Remedial Alternative Cost Summary
Alternative 3
IN SITU TREATMENT
DESCRIPTION
Performance Monitoring
SVE Vapor Monitoring
SVE Emissions Monitoring
Treatment Wall - Groundwater Sampling
Treatment Wall - Groundwater Lab Analysis
SUBTOTAL
Site Monitoring
Groundwater Sampling
Groundwater Laboratory Analysis
SUBTOTAL
Air Sparging / Soil Vapor Extraction
Operations Labor
Maintenance Labor
Equipment Repair
Utilities
SUBTOTAL
Off-Site Treatment / Disposal
Wastewater Discharge/Testing
SUBTOTAL
Contingency
SUBTOTAL
Project Management
Technical Support
Institutional Controls - Site Info Database
TOTAL ANNUAL O&M COST
PERIODIC COSTS:
DESCRIPTION YEAR
Five Year Review Report 5
Update Institutional Controls Plan 5
SUBTOTAL
Five Year Review Report 10
Update Institutional Controls Plan 10
SUBTOTAL
Demobilize AS/SVE System 15
Well Abandonment 1 5
Contingency (% of Sum)
Project Mgt. (% of Sum + Cont.)
Remedial Action Report 1 5
SUBTOTAL
PRESENT VALUE ANALYSIS:
TOTAL
COST TYPE YEAR COST
Capital Cost 0 $3,677,404
Annual O&M Cost 1-15 $4,590,763
Periodic Cost 5 $14,800
Periodic Cost 10 $14,800
Periodic Cost 15 $48,458
$8,346,000
TOTAL PRESENT VALUE OF ALTERNATIVE
COST ESTIMATE SUMMARY
QTY
96
12
4
4
4
4
12
12
1
12
1,600
30%
5%
10%
1
QTY
1
1
1
1
1
27
25%
5%
1
UNIT
EA
EA
QTR
QTR
QTR
QTR
MO
MO
LS
MO
GAL
LS
UNIT
EA
EA
EA
EA
LS
EA
EA
TOTAL COST
PER YEAR
$3,677,404
$306,051
$14,800
$14,800
$48,458
UNIT
COST
$308
$308
$2,449
$5,714
$1,820
$5,460
$6,120
$720
$500
$1,928
$1.00
$3,600
L
UNIT
COST
$12,000
$2,800
$12,000
$2,800
$21,375
$350
$8,000
DISCOUNT
FACTOR (7%)
1.000
9.108
0.713
0.508
0.362
L
TOTAL
$29,532
$3,692
$9,795
$22,856
$65,875
$7,280
$21,839
$29,119
$73,440
$8,640
$500
$23,134
$105,714
$1,600
$202,308
60,692
$263,001
13,150
26,300
$3,600
$306,051 |
TOTAL
$12,000
$2,800
$14,800
$12,000
$2,800
$14,800
$21,375
$9,450
7,706
1,927
$8,000
$48,458
PRESENT
VALUE
$3,677,404
$2,787,511
$10,552
$7,518
$17,542
$6,501,000
$6,501,000 |
NOTES
1 sample/month * 8 extraction wells
1 sample/month - SVE exhaust
Sample 10 wells/qtr
Analysis for above
Sample 8 wells/qtr VOCs, WQ, metals
Analysis for above
136 manhours per month
16 manhours per month
Electricity + fuel
City fee - purge & knockout water
10% scope + 20% bid
Update and maintain database
NOTES
1 report at end of Year 5
Update plan
1 report at end of Year 10
Update plan
Remove equipment and piping
% of construction activities
% of construction + contingency
NOTES
5-year review, update i.e. plan
5-year review, update i.e. plan
Demob, abandon, RA report
-------
Exhihit6-3
Example Comparative Cost Summary
COMPARISON OF TOTAL COST OF REMEDIAL ALTERNATIVES
Site: Former Industrial Site
Location: Any City, Any State
Phase: Feasibility Study (-30% to +50%)
DESCRIPTION
Total Project Duration (Years)
Capital Cost
Annual O&M Cost
Total Periodic Cost
Total Present Value of Alternative
Base Year: 2000
Date: April 12, 2000
Alternative 1
No
Action
0
$0
$0
$0
$0
Alternative 2
Limited Action/
Natural Attenuation
30
$147,000
$41,000
$68,000
$690,000
Alternative 3
In Situ
Treatment
15
$3,677,000
$306,000
$72,000
$6,501,000
Alternative 4
Ex Situ
Treatment
15
$5,300,000
$146,000
$43,000
$6,649,000
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-------
Chapter Seven
References
Association for the Advancement of Cost Engineering International. 1990. Standard 10S-
90. Standard Cost Engineering Terminology. (AACE 1990)
Code of Federal Regulations (CFR). Title 40, Part 300. National Oil and Hazardous
Substances Pollution Contingency Plan (NCP).
(http://www. epa.gov/docs/epacfr40/chapt-I. info/subch-J/)
United States Army Corps of Engineers. September 1, 1997. Engineering Instructions:
Construction Cost Estimates. EI01D010. (USACE 1997)
(http://www. hnd. usace. army, mil/techinfo/ei. htm)
United States Environmental Protection Agency. October 1987. Remedial Action Costing
Procedures Manual. EPA/600/8-87/049. (USEPA 1987)
United States Environmental Protection Agency. October 1988. Guidance for Conducting
Remedial Investigations and Feasibility Studies under CERCLA. Interim Final.
EPA/540/G-89/004. (USEPA 1988)
United States Environmental Protection Agency. April 1990. A Guide to Selecting
Superfund Remedial Actions. OSWER Publication 9335.0-27FS. (USEPA 1990)
United States Environmental Protection Agency. June 25, 1993. Memorandum: Revisions
to OMB Circular A-94 on Guidelines and Discount Rates for Benefit-Cost Analysis.
OSWER Directive No. 9355.3-20. (USEPA 1993) (http://www.epa.gov/superfund/}
United States Environmental Protection Agency. September 1996. The Role of Cost in the
Superfund Remedy Selection Process. Quick Reference Fact Sheet. (USEPA 1996)
(http://www.epa.gov/superfund/resources/cost dir/index. htm)
United States Environmental Protection Agency. August 1997. Rules of Thumb for
Superfund Remedy Selection. (USEPA 1997)
(http://www.epa.gov/superfund/resources/rules/index. htm)
United States Environmental Protection Agency. July 1999. A Guide to Preparing
Superfund Proposed Plans, Records of Decision, and Other Remedy Selection Decision
Documents. EPA/540/R-98/031. (USEPA 1999)
(http://www.epa.gov/superfund/resources/remedy/rods/index.htm)
-------
-------
FS I Appendix a
U I I
Internet Resources
This appendix provides a list of Internet resources that may be useful for the development of cost
estimates of remedial alternatives during the FS. USEPA and USAGE cannot endorse nor vouch
for the content of any web site other than their own. All listed web site addresses were current at
the time of appendix publication. In addition to description of content, the following icons are
used next to resource listings to indicate what type of information each contains:
[mj Policy
•§<: Technical
$ Cost
y Software/Database
B3 Publication
These identifiers are used separately or together, depending on the resource. Exhibit A-l
presents Internet resources that are sponsored and maintained by government agencies and
organizations. Exhibit A-2 presents private or non-government Internet resources. Major
resource categories in Exhibit A-l include:
* U.S. Environmental Protection Agency
* U.S. Army Corps of Engineers
* U.S. Department of Energy
* U.S. Department of Defense
* Other or Interagency
Major categories in Exhibit A-2 for non-government resources include:
* Private Firms/Companies
* Professional Societies/Organizations
-------
Exhibita-1
Internet Resources - Government
U.S. Environmental Protection Agency (USEPA)
http://www. epa.gov/
USEPA Superfund
http://www.epa.gov/superfund/
The USEPA administers the Superfund program through the Office of Solid Waste and Emergency Response
(OSWER) in cooperation with individual states and tribal governments. Superfund locates, investigates and
cleans up the nation's hazardous waste sites. The web site provides information on the technical resources,
initiatives, programs, and accomplishments of the Superfund program. Resources include:
* Rules of Thumb for Superfund Remedy Selection ID
http://www.epa.gov/superfund/resources/rules/index.htm
This guidance document outlines key principles and procedures that should be consulted during the
Superfund remedy selection process.
* Role of Cost in the Superfund Remedy Selection Process CO
http://www.epa.gov/superfund/resources/cost_dirAndex.htm
This document outlines the role of costs in the Superfund remedy selection process as established in the
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the National Oil and
Hazardous Substances Pollution Contingency Plan (NCP), and current EPA guidance documents.
* A Guide to Preparing Superfund Proposed Plans, Records of Decision, and Other Remedy Selection
Documents CQ http://www.epa.gov/superfund/resources/remedy/rods/index. htm
This document provides recommended formats and content for Superfund remedial action decision
documents, clarifies roles and responsibilities of regulatory agencies and stakeholders in the remedy
selection process, and explains how to address changes made to proposed and selected remedies.
* Revisions to OMB Circular A-94 on Guidelines and Discount Rates for Benefit-Cost Analysis
(OSWER Directive 9355.3-20) ^ IB http://www.epa.gov/superfund/
Contains USEPA policy on the use of discount rates for RI/FS cost analyses.
* Presumptive Remedies ^ CI3 $< http://www.epa.gov/superfund/resources/presump/index.htm
In an effort to streamline investigations and remedy selection, presumptive remedy guidance has been or will
be developed for volatile organic compounds in soil, municipal landfills, metals in soils, wood treaters, and
contaminated groundwater.
* National Oil and Hazardous Substances Pollution Contingency Plan (NCP) ^ CO
http://www. epa.gov/docs/epacfr40/chapt-I. info/subch-J/
Contains regulatory requirements for the RI/FS process (Title 40 Code of Federal Regulations, Part 300,
Subpart E, Section 300.430).
Symbol Key:
Policy
Technical
S Cost
Software/Database CO Publication
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ExhibitA-1 tcont.J
Internet Resources - Government
USEPA OSWER
http ://www. epa.gov/swerrims/
The Office of Solid Waste and Emergency Response (OSWER) develops guidelines and standards for the land
disposal of hazardous wastes and for underground storage tanks. OSWER furnishes technical assistance in the
development, management and operation of solid waste activities and analyzes the recovery of useful energy
from solid waste. In addition, OSWER has undertaken the development and implementation of a program to
respond to abandoned and active hazardous waste sites and accidental release (including some oil spills) as well
as the encouragement of innovative technologies for contaminated soil and groundwater. OSWER resources
include:
* Federal Facilities Restoration and Reuse
* Solid and Hazardous Waste S 03 K
* Brownfields ^ CJ <%
* Superfund & ffl #
* Technology Innovation ^ CO <%
* Underground Storage Tanks ^ CO 3<
http://www.epa.gov/swerffrr/
http://www.epa.gov/epaoswer/osw/index.htm
http://www. epa.gov/swerosps/bf/
http://www.epa.gov/superfund/index.htm
http://www.epa.gov/swertiol/index.htm
http:'//www. epa.gov/swerustl/
USEPA - Publications CO http://www.epa.gov/epahome/publications.htm
Provides access to USEPA technical and public information. Resources include:
* USEPA - National Service Center for Environmental Publications (NSCEP) IB
http://www. epa.gov/ncepihom
Formerly known as NCEPI, NSCEP is a central repository for all EPA documents with over 5,500 titles in
paper and/or electronic format, available for free distribution. The web site contains the National EPA
Publications Catalog where documents can be browsed and ordered online.
* National Environmental Publications Internet Site (NEPIS) CO
http://www.epa.gov/ncepihom/nepishom
EPA's largest electronic documents site allows you to search view and print, including full images of all
original pages and full-text, from a collection of over 7,000 archival and current documents. This collection
may include documents that are no longer available in print form.
USEPA SITE Program
http://www. epa.gov/ORD/SITE
USEPA's Superfund Innovative Technology Evaluation (SITE) Program encourages the development and
implementation of innovative treatment technologies for hazardous waste site monitoring and remediation. The
SITE program gathers engineering and cost data to assess the performance of treatment technologies. The
information provided is intended to assist in evaluating and screening potential remediation technologies and in
selecting a remedial alternative.
SITE Reports
http://www. epa.gov/ORD/SITE/reports
This page provides links to SITE Reports including general reports, demonstration program reports, and
emerging technology program reports.
Symbol Key:
Policy
Technical
S Cost
1 Software/Database
Publication
-------
ExhibitA-1 tcont.J
Internet Resources - Government
USEPA Office of Research and Development
http://www. epa.gov/ORD
The USEPA's web site for research and development provides information pertaining to environmental and
human health problems. The Office of Research and Development (ORD) focuses on the advancement of
scientific research and the implementation of cost-effective technologies. ORD labs include the National Risk
Management Research Lab, which includes:
Technology Transfer
http.VAvww. epa.gov/ttbnrmrl/
Technology Transfer contains publications including guides, handbooks, summary reports and seminars on
pollution prevention, monitoring, and treatment technologies.
USEPA - Office of Underground Storage Tanks
http://www.epa.gov/swerustl/index. htm
EPA's Office of Underground Storage Tank's (OUST) web site. OUST's goal is to provide current information
relevant to the Federal underground storage tank (UST) program. The web site offers compliance assistance,
UST publications, law/regulation information, and cleanup information. Resources include:
* USEPA - Cleanup of UST System Releases CO $< http://www.epa.gov/swerustl/cat/index.htm
This page contains UST cleanup resources, including general information, site characterization, remediation
technologies, sampling, and monitoring.
U.S. Army Corp of Engineers (USACE)
http.V/www.usace. army, mil/
USACE - HTRW Center of Expertise
http://www.environmental.usace.army.mil/
The Hazardous, Toxic, and Radioactive Waste Center of Expertise (HTRW CX) provides general information
regarding numerous technical areas including environmental regulations and laws, innovative technologies,
environmental risk assessments, and environmental engineering. HTRW CX also provides general assistance to
U.S. Army Corp of Engineer offices involved in environmental programs. The HTRW CX homepage contains
technical information and guidance for cleaning up sites contaminated with hazardous, toxic, or radioactive
waste. Technical resources include innovative technologies, process engineering, and costs. Resources include:
The TSDF Report
http.VAvww. environmental, usace. army, mi I/library/pub s/tsdf/tsdf. html
The Report on Treatment, Storage & Disposal Facilities (TSDF) for Hazardous, Toxic, and Radioactive
Waste is designed to provide information, including costs, regarding the disposal of RCRA Subtitle C
hazardous wastes and recycling of selected solid wastes.
* Environmental Lessons Learned Program CO <%
http://www.environmental.usace.army.mil/library/lessons/lessons.html
The Lessons Learned program was created to provide a means of identifying problem areas in the HTRW
program; collect ideas on solutions, new technology and better methods; and to distribute those lessons
learned.
* Environmental Guidance Documents CO $<
http://www.environmental.usace.army.mil/library/guide/guide.html
This page provides a link to environmental guidance documents including engineering manuals, pamphlets,
technical letters, regulations, and guidance specifications.
* Cost Engineering Resources ^ CO $<:
http://www.environmental.usace.army.mil/info/technical/cost/cost.html
This page contains information regarding cost engineering resources of the HTRW CX. Links are provided
to guidance, training materials, tools and databases, etc.
Symbol Key:
Policy
Technical
S Cost
1 Software/Database CO Publication
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ExhibitA-1 tcont.J
Internet Resources - Government
USACE - Cost Engineering Branch
$ http://www.hq.usace.army.mil/cemp/e/ec/ec_new.htm
This is the home web site for the Cost Engineering and Programs Formulation Branch of the USACE. This
branch is responsible for all aspects of cost engineering for the USACE. Links to various web sites related to
cost information and other initiatives can be found on this web page. Resources include:
* Economic Analysis for Military Construction $< E3 $
http://www.hq. usace. army, mil/cemp/e/ec/econ/econ. htm
This page contains links to economic analysis information including updated inflation and discount rates.
* Regulations and Guidance Documents ^ BJ $< http://www.hq.usace.army.miI/cemp/e/ec/ec-regs.htm
This page contains links to regulation and guidance documents including:
- Engineering and Design Cost Engineering Policy and General Requirements
- Area Cost Factor Index
- Military Construction Cost Index
- Programming Cost Estimates for Military Construction
- Economic Studies for Military Construction Design Applications
USACE - TRACES
http://www. hnd. usace. army, mil/traces/
TRACES is the Tri-Services umbrella linking all automated cost engineering systems and their associated
databases. Contained within this web site are links to information on various modules and other sources of cost
information. Check the following sites for more specific information:
* Micro Computer Assisted Cost Engineering System (MCACES) U K $
http://www.hnd. usace. army, mil/traces/mcaces. asp
MCACES is a multi-user software program used for the preparation of detailed construction cost estimates
for military, civil works, and HTRW programs.
Historical Analysis Generator (HAG)
http://www.hnd. usace. army, mil/traces/hag, asp
The Historical Analysis Generator (HAG) is a software tool for analyzing and reporting historical cost data
of past construction projects. The tool was developed by Building Systems Design, Inc. for the Tri-Service
Cost Engineer Committee.
Life Cycle Cost (LCC) 01
http://www. hnd usace. army, mil/traces/lcc. asp
The Life Cycle Cost (LCC) module is a DOS-based stand-alone program that provides cost engineers with
the capability of developing life cycle cost analyses.
USACE - Publications
http://www. usace. army, mil/inet/usace-docs/
The collection of publications on this web site is the repository for all official USACE engineering regulations,
circulars, manuals, and other documents originating from USACE headquarters. Many of the publications can be
downloaded in electronic format. These include:
* Engineering Instructions El 01D010: Construction Cost Estimates
http://www.hnd. usace. army, mil/techinfo/ei. htm
Symbol Key:
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Technical
S Cost
1 Software/Database CO Publication
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ExhibitA-1 tcont.J
Internet Resources - Government
U.S. Department of Energy (USDOE)
http://www. doe.gov/
USDOE - Environmental Management (EM)
http://www.em. doe.gov
In 1989, the Office of Environmental Restoration (ER) was created within the newly established Office of
Environmental Management (EM) to consolidate, centralize and promote the cleanup of contaminated waste sites
and surplus facilities within the DOE Complex. The DOE Environmental Restoration Program is involved in
assessment and cleanup activities at 132 sites throughout the United States and in Puerto Rico. Check the
following sites for more specific information:
* Pollution Prevention in the Environmental Restoration Program ID $<
http://www. em. doe.gov/p2/index.html
This web site offers tools, resources, and guidance to assist in environmental cleanup projects.
* Environmental Restoration Lessons Learned CJ $< http://www.em.doe.gov/lessons/index.html
The EM Lessons Learned program evaluates the lessons learned relevant to environmental management
business and functional areas to improve efficiencies and effectiveness, reduce risk and waste, and accelerate
remediation project closure.
Decommissioning of Facilities
http://www.em. doe.gov/dd/index. html
This page provides information on policy and guidance, a downloadable version of the Decommissioning
Benchmarking Study, and links to site-specific decommissioning pages and lessons learned.
Cost & Performance Document BJ 3< http://www.em.doe.gov/costperf/index.html
The purpose of this DOE document is to facilitate the use of consistent procedures to document cost and
performance information for environmental cleanup projects.
USDOE - EM - Applied Cost Engineering
http://www.em. doe.gov/aceteam/
The Environmental Restoration (ER) Applied Cost Engineering (ACE) Team was established to promote
continuous cost improvements through dissemination of cost engineering tools, methods, techniques, best
practices, and lessons learned. Resources include:
* Cost Engineering Links B3 $< http://www.em.doe.gov/aceteam/links.html
This page provides links to cost engineering resources on the Internet.
USDOE - EM - Remedial Action Program Information Center (RAPIC) K U UJ
http://www.em. doe.gov/rapic
RAPIC provides technical information support to the DOE Environmental Restoration (ER) Program.
Information includes decontamination and decommissioning (D&D) and remedial action (RA) activities,
technology development, and research at sites and facilities contaminated with radioactive and/or hazardous
materials. Resources include:
* Environmental Restoration Document Information System (ERDIS) CO
http://www. em. doe.gov/rapic/6erdis.html
The Environmental Restoration Document Information System (ERDIS), is an online document locator
resource sponsored by the USDOE Office of Environmental Restoration.
Symbol Key:
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Technical
S Cost
1 Software/Database CO Publication
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ExhibitA-1 tcont.J
Internet Resources - Government
USDOE -EM - Preferred Alternatives Matrices (PAMs)
http://www. em. doe.gov/defme
The DOE's Preferred Alternatives Matrices provide information, background and descriptions of commercially
available soil and groundwater remediation technologies. PAMs evaluate the available technologies ranking
them on the basis of performance, risk of technology failure, and cost. The goal of this effort is to implement
"the right technology, at the right time, at the right site."
USDOE - Environmental Technology Cost-Savings Analysis Plan
http://www. lanl.gov/projects/etcap/home. html
03
This web site contains information about the Environmental Technology Cost-Savings Analysis Project
(ETCAP), sponsored by Los Alamos National Laboratory (LANL). This compendium provides a representative
sample of cost information for environmental remediation technologies used in the treatment of hazardous,
radioactive, and mixed waste. Data was gathered from a variety of sources and summarized herein to provide
actual cost summaries or engineering cost estimates, site characteristics, and comments detailing remedial
projects.
USDOE - National Energy Technical Laboratory
http://www.netl.doe.gov/
The National Energy Technical Laboratory (NETL) performs, procures, and sponsors technical research,
development, and demonstration to advance technology into the commercial marketplace, thereby benefiting the
environment. Their web site contains links to information on environmental projects and innovative
technologies. The NETL was formerly known as the Federal Energy Technology Center (FETC).
U.S. Department of Defense
U.S. Air Force Civil Engineer Support Agency (AFCESA) ft $
http://www. afcesa. af.mil/
The Air Force Civil Engineer Support Agency provides tools, practices and professional support to maximize Air
Force civil engineer capabilities in base and contingency operations. AFCESA consists of four directorates:
Operations Support, Technical Support, Contingency Support; and Civil Engineer Maintenance, Inspection and
Repair Team - Field Support. The Civil Engineering division of the Technical Support Directorate provides
expertise in cost estimating; structural, water, wastewater, drainage and pavement systems; as well as in airfield
marking, arresting and barrier systems. Resources include:
* Cost Engineering Program <% $ IB 01
http://www. afcesa. afmil/Directorate/CES/Civil/CostEngr/CostEngr. htm
The AFCESA Cost Engineering Program develops and maintains methodologies, cost models, and
associated databases to estimate and analyze construction, environmental, and life cycle costs of Air Force
facilities. Links to automated tools and guides/handbooks are provided on the web site.
Symbol Key:
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Technical
S Cost
1 Software/Database 03 Publication
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ExhibitA-1 tcont.J
Internet Resources - Government
Other or Interagency
Federal Remediation Technologies Roundtable (FRTR)
http://www.frlr.gov/
The Federal Remediation Technologies Roundtable (FRTR) is an interagency working group seeking to build a
more collaborative atmosphere among the federal agencies involved in hazardous waste site remediation. By
providing such opportunities, the Roundtable hopes to identify and publicize more efficient, cost-effective
solutions to the Federal government's hazardous waste challenges. Members include major developers and users
of these technologies: Department of Defense, U.S. Army, U.S. Army Corps of Engineers, U.S. Navy, U.S. Air
Force, U.S. Department of Energy, Department of the Interior, and the U.S. Environmental Protection Agency.
Check the following sites for more specific information:
* Cost and Performance Reports CO $< $ http://www.frtr.gov/cost/
This page presents case studies and abstracts containing available cost and performance information for full-
scale remediation efforts and numerous large-scale demonstration projects.
* Environmental Cost Engineering Committee (EC2) CO 3< $ http://www.frtr.gov/cost/info/ec2.html
This page provides information on the work of the interagency EC2 group, including newsletters, listing of
projects, and work products. Includes links to the Historical Cost Analysis System (HCAS) and the HTRW
remedial action (RA) and operation and maintenance (O&M) work breakdown structures:
HCAS
HTRW RA and O&M WBS
http://www.frtr.gov/cost/ec2/HCAS_OVERVIEW.htm
http://www.frtr.gov/cost/ec2/wbsl.html
* Remediation Technology Infobase BJ 3< http://www.frtr.gov/publications/infobase98.html
This page contains a list of resources for information on Federal cleanup programs and remediation
technologies.
* Technology Demonstration B3 $< http://www.frtr.gov/demonstration.html
This page contains links to various technology demonstration projects.
* Technology Development CO http://www.frtr.gov/techdev/index.html
This page contains links to environmental technology resources on the Internet.
* Remediation Screening Matrix CO 3< $ http://www.frtr.gov/matrix2/top_page.html
The Treatment Technologies Screening Matrix is a comprehensive guide intended to screen and evaluate
candidate technologies for environmental cleanup projects and used to assist in selecting a remedial
alternative. The guide incorporates performance and cost data allowing the user to screen for potential
treatment technologies and to assign a relative probability of success. The guide can be accessed using a
table of contents, screening matrix, or a search engine.
* Sampling & Analysis Matrix CO $< $ http://www.frtr.gov/site/
The sampling and analysis matrix assists in choosing cost-effective site characterization technologies so that
the impact on human health and the environment can be properly evaluated.
* Publications UJ http://www.frtr.gov/pubs.html
This page provides a list of FRTR publications.
Symbol Key:
Policy
Technical
S Cost
1 Software/Database
Publication
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ExhibitA-1 tcont.J
Internet Resources - Government
Groundwater Remediation Technologies Analysis Center (GWRTAC) CO IX $ http://www.gwrtac.org
The Groundwater Remediation Technologies Analysis Center (GWRTAC) compiles, analyzes, and disseminates
information on innovative groundwater remediation technologies. The data contains information on past
performance, cost, and applicability. The information provided is intended to assist in evaluating and screening
potential remediation technologies and in selecting a remedial alternative. Resources include:
* Vendor Information B3 •§<: http://www.gwrtac.org/html/vendors.html
This page provides vendor information for groundwater remediation technologies.
* Technical Reports BJ $<: $ http://www.gwrtac.org/html/techdocs.html
This page contains groundwater and environmental technical reports available online.
Remedial Technologies Development Forum (RTDF)
http://www. rtdf.org
The purpose of the RTDF is to "identify what government and industry can do together to develop and improve
the environmental technologies needed to address their mutual cleanup problems in the safest, most cost-effective
manner." The RTDF consists of several action teams including:
The Bioremediation Consortium
The Lasagna Partnership
INERT Soils - Metal Team
Phytoremediation of Organics Team
Permeable Reactive Barriers Team
In-Situ Flushing Team
Sediments Remediation Team
Detailed information on each of these teams can be found on this web site, including technical documents,
processes, and other resources.
Global Network of Environment and Technology (GNET)
http://www.gnet. org
GNET provides daily news and up-to-date information on current environment and technology issues. Resources
include:
TechKnow
http://www.techknow.org
TechKnow is GNET's free interactive database of innovative remediation and environmentally sustainable
technologies.
Johnson Space Center - Cost Estimating Group
http://www.jsc. nasa.gov/bu2/index. html
This is NASA's cost estimating web site, containing resources, publications, software and tools pertaining to cost
estimating.
Symbol Key:
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Technical
S Cost
1 Software/Database CO Publication
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ExhibitA-1 tcont.J
Internet Resources - Government
Hazardous Waste Cleanup Information
http.V/www. clu-in. org/
This web site, maintained by the USEPA Technology Innovation Office (TIO), provides information on
hazardous waste innovative treatment technologies. It contains links to available products, software, remediation
technology descriptions, regulatory information, vendor information, and other online resources for hazardous
waste remediation. Check the following sites for more specific information:
* Site Remediation Technologies CO $< http://www.clu-in.org/remedl.htm
This page contains technical data, publications, and resources for site remediation technologies.
* TechDirect BJ 3< http://www.clu-in.org/techdrct/default.htm
TechDirect is a free information service providing information, new publications, and events of interest for
site remediation and site assessment professionals.
* Bio remediation in the Field Search System ID 121 http://www.clu-in.org/products/moreinfo/bfss.htm
The Bioremediation in the Field Search System is a database of information of waste sites where
bioremediation is being tested, implemented or has been completed.
* Site Characterization ID $< http://www.clu-in.org/charl.htm
This page contains technical data, publications, and resources for site characterization techniques.
* Regulatory Information ^ ID http://www.clu-in.org/regl.htm
This page contains technical data, publication, and resources on environmental regulatory information.
* Vendor Support CO $< http://www.clu-in.org/supplyl.htm
Vendor support contains information to direct technology vendors and developers to the appropriate funding
sources and to provide technical support for all stages of development.
Internet and Online Resources CO $<:
http.V/www. clu-in. org/resourcl.htm
This page contains links to technical resources available on the Internet.
U.S. Office of Management and Budget (OMB)
http://www.whitehouse.gov/OMB
OMB's predominant mission is to assist the President in overseeing the preparation of the Federal budget and to
supervise its administration in Executive Branch agencies. OMB ensures that agency reports, rules, testimony,
and proposed legislation are consistent with the President's budget and with Administration policies. In addition,
OMB oversees and coordinates the Administration's procurement, financial management, information, and
regulatory policies. Resources include:
OMB Circular No. A-94
http://www.whitehouse.gov/omb/circulars/a094/a094.html
OMB Circular No. A-94 presents guidelines on discount rates to be used in evaluating time-distributed costs
and benefits.
Symbol Key:
Policy
Technical
S Cost
1 Software/Database 03 Publication
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Exhibita-2
Internet Resources - Non-Government
Private Firms/Companies
Building Systems Design (BSD), Inc. $
http://www.bsdsoftlink. com/
BSD is a firm that develops software for the architectural, engineering, and construction industry. Links and
information are provided on BSD CostLink software, as well as products developed for government use such as
MCACES for Windows and the Life Cycle Cost (LCC) module.
Craftsman Book Company
http://www. craftsman-book, com/
Craftsman Book Company publishes estimator costbooks that include: National Construction Estimator, National
Repair & Remodeling Estimator, National Electrical Estimator, National Plumbing & HVAC Estimator, National
Painting Cost Estimator, and National Renovation & Insurance Estimator. Information about their National
Estimator software is also available.
D4Cost 2000
http ://www. d4cost. com/
This web page provides a description, online demonstrations, and other information for the D4Cost 2001
Building Cost Modeling Tool.
Decisioneering - Crystal Ball
http://www.decisioneering. com/crystal_ball/index. html
This web page provides information and demonstrations of Crystal Ball, an advanced modeling tool for risk
analysis.
Engineering News Record CO $
http://www.enr. com/
This is the online resource for the Engineering News Record periodical. This site provides various information
related to engineering, costs, and a comprehensive listing of companies, affiliated with ENR, and their profiles.
Check the following sites for more specific information:
ENR's Cost Indexes
http://www.enr.com/cost/costl.asp
ENR publishes both a Construction Cost Index and Building Cost index that are used in the construction
industry. This web site contains an explanation of the index methodology.
GLOBALtechs
http://www.globaltechs. com/index, html
GLOBALtechs is an online remediation technologies directory containing information on over 650 remediation
technologies available worldwide.
National Technology Transfer Center Web Site (Environmental) ^ E3
http.V/www. nttc. edu/environmental. html
The National Technology Transfer Center web site provides online resource for technology summaries. This
web site offers links to environmental resources.
Envirotrade
http://www.nttc.edu/env/
Envirotrade provides detailed summaries for numerous environmental technologies.
Estimating Systems Inc.
http://www.estimatingsystems. com/
Estimating Systems Inc. manufactures Pulsar, a PC-based construction cost-estimating package. Pulsar uses R.S.
Means Cost Data.
Symbol Key:
Policy
Technical
S Cost
1 Software/Database CO Publication
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ExhibitA-2 tcont.J
Internet Resources - Non-Government
G2 Estimator I
http.V/www.g2estimator. com/
G2 Estimator is a Windows-based estimating software package, produced by Valli Information Systems, Inc.
Information on G2 Estimator and other G2 products are found on this web site.
Independent Project Analysis, Inc.
http.V/www. ipaglobal. com/
Independent Project Analysis, Inc. (IPA) provides project evaluation and project system benchmarking services.
IP A has developed detailed, carefully normalized databases of projects executed around the world. The
databases cover the project life cycle from business idea through early production. IPA has used these databases
to develop statistical tools that allow for performance comparisons among projects.
Marshall & Swift
http.V/www.marshallswift. com/
Marshall & Swift publishes various cost books for construction, remodeling, and renovation. Information on
their products can be found on their web site.
Project Time and Cost, Inc.
http.V/www.ptcinc. com/
Project Time and Cost, Inc. (PT&C) is a national cost management firm, providing services to the design and
construction industry. Environmental cost management services offered by PT&C include feasibility studies,
activity-based cost estimating, risk analysis, and cost engineering.
Remedial Technologies Network
$
http ://www. enviroglobe. com/
RTN's web site, EnviroGlobe, contains information, news, support, and databases on environmental
technologies, including the RIMS2000 database. RIMS2000 is a large database of environmental technology
information. The information provided is intended to assist in evaluating and screening potential remediation
technologies and in selecting a remedial alternative.
R.S. Means, Inc.
http.V/www. rsmeans. com/
R.S. Means offers construction cost estimating and management resources. More information and links to cost
information and software is available on their web page.
Saylor Publications, Inc.
$
http.V/www.saylor. com/
The web page includes descriptions and ordering information for Saylor's Cost Manuals and software.
Additionally, a labor cost index is presented online.
Sweet's Group
http.V/www. sweets, com/
The Sweet's system consists of a variety of print and electronic products for architect, engineering and
construction (AEC) professionals. Does not contain cost data, but does list specific vendors of building products
that can be used to obtain quotes.
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ExhibitA-2 tcont.J
Internet Resources - Non-Government
Talisman Partners, Limited
http://www.talpart. com/
Talisman Partners, Limited is a consulting firm that provides services in the areas of facility management,
construction, operations and maintenance, and environmental restoration. Products include proprietary data,
tools and systems for analysis and decision making, management consulting services, and training. Check the
following sites for specific information:
* RACER Environmental Remediation Cost Estimating Software E3 $
http://www. talpart. com/pro ducts/racer/in dex.html
Remedial Action Cost Engineering and Requirements (RACER) is a Windows-based environmental
remediation cost estimating system.
* ECHOS Environmental Remediation Cost Data Books CO 121 $
http://www.talpart.com/products/echos/index.html
ECHOS Cost Data Books provide assemblies costs data and unit cost data for environmental remediation
projects.
* Environmental Remediation Estimating Procedures Handbook CO
http://www. talpart. com/products/handbook/index, html
Environmental Remediation Estimating Procedures Handbook is a step by step guide for estimating
environmental remediation cost.
Tank RACER
$
http://www.talpart. com/products/tankracer/index. html
Tank RACER is a Windows-based cost estimating system that was developed specifically to address storage
tank and petroleum-related assessment and remediation.
Tecolote Research, Inc.
http://www.tecolote. com/
The Tecolote Research web page contains useful links to the software and services they provide. Links to
detailed information on numerous software programs, including ACEIT, COETS, IFTS, PC-DATS, and
SCANS, are also included.
Thomas Register of American Manufacturers
http://www.thomasregister. com/
The Thomas Register is a series of manuals containing information for companies in the U.S. The Online
Catalog contains detailed buying information about a company's products or services. This site requires the a
membership to obtain information.
Timberline Software Corporation
http://www.timberline. com/
Timberline Software Corporation is an international supplier of accounting and cost estimating software for the
construction and property management industries. Their web site provides information about Timberline's
products, training, support and upcoming events.
TSD Central $
http://www.tsdcentral. com/
TSD Central is an online source of direct pricing for waste management, cleanup, and transportation services
from vendors across the country.
Symbol Key:
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ExhibitA-2 tcont.J
Internet Resources - Non-Government
U.S. Cost, Inc.
http://www. uscost. com/
U.S. COST has developed the estimating software Success. Success is US Cost's integrate estimating and cost
management program. Technical and ordering information is available on the following page:
* Success - Integrated Estimating & Cost Management
http://www.uscost.com/success4.htm
Professional Societies/Organizations
Association for the Advancement of Cost Engineering (AACE)
http://www.aacei. org/
The AACE International web page contains links to publications, online forums, software/data vendors,
professional organizations and other information for the cost engineer.
American Society of Professional Estimators (ASPE)
http://www. cmpi. com/aspe/
The American Society of Professional Estimators serves construction estimators by providing education,
fellowship, and professional development opportunities. Links to more information can be found on their web
site.
Environmental Technology Council (ETC)
$
http://www. etc. org/index. cfm
The ETC is a trade organization of commercial environmental firms that recycle, treat and dispose of industrial
and hazardous wastes; and firms involved in cleanup of contaminated sites. A compilation of low, average, and
high landfill and incinerator cost data for different types of wastes, based on a survey of ETC members, can be
found at:
Incinerator and Landfill Cost Data (January 2000) $
http://www.etc. org/costsurvey3. cfm
International Cost Engineering Council (ICEC)
http://www. icoste. org/
International Cost Engineering Council (ICEC) is a worldwide confederation of cost engineering, quantity
surveying, and project management societies. The web page provides links to many international resources for
cost and project management information and other technical papers.
The Society of Cost Estimating and Analysis (SCEA)
http://www.emls. com/scea/
SCEA is an organization dedicated to improving cost estimating and analysis in government and industry, and
enhancing the professional competence and achievements of its members. The web page contains links to
various cost resources.
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El I I
Appendix B
Cost Adjustment Factors
This appendix provides information on how to calculate and apply cost adjustment factors,
including those for escalation, area cost, and health and safety productivity.
Escalation
Costs that have been derived from sources that are one year old or more should be updated or
escalated to the base year. This can be done using the following equation:
Cb = C0(Fb/F0)
where Q, is the base year or current cost, C0 is the old cost,
factor, and F0 is the index factor for the old cost.
is the base year or current index
Escalation indexes are available from both private and public sources. Most are published on a
monthly or annual basis. An example index is Engineering News Record's (ENR) building cost
index, which is based on a 20-city average of labor rates for bricklayers, carpenters, and iron
workers plus material costs for structural steel, portland cement, and lumber using a certain
number of labor hours and material quantity. Monthly factors for this index, from January 1978
to July 2000, are shown in Exhibit B-l. The index is also available at
http://www. enr. com/ cost/ costbci. asp.
Exhibit B-1
ENR Building Cost Index
1609
1740
1895
2015
2184
2311
2402
2410
2440
2515
2574
2615
2664
2720
2784
2886
3071
3112
3127
3332
3363
3425
3503
1617
1740
1894
2016
2198
2348
2407
2414
2446
2510
2576
2608
2668
2716
2775
2886
3106
3111
3131
3333
3372
3417
3523
1620
1750
1915
2014
2192
2352
2412
2406
2447
2518
2586
2612
2673
2715
2799
2915
3116
3109
3135
3323
3368
3411
3536
1621
1749
1899
2064
2197
2347
2422
2405
2458
2523
2591
2615
2676
2709
2809
2976
3127
3100
3148
3364
3375
3421
3534
1652
1753
1888
2076
2199
2351
2419
2411
2479
2524
2592
2616
2691
2723
2828
3071
3125
3096
3161
3377
3374
3422
3558
1663
1809
1916
2080
2225
2388
2417
2429
2493
2525
2595
2623
2715
2733
2838
3066
3115
3095
3178
3396
3379
3433
3553
1696
1829
1950
2106
2258
2414
2418
2448
2499
2538
2598
2627
2716
2757
2845
3038
3107
3114
3190
3392
3382
3460
3545
1705
1849
1971
2131
2259
2428
2428
2442
2496
2557
2611
2637
2716
2792
2854
3014
3109
3121
3218
3385
3391
3474
1720
1900
1976
2154
2263
2430
2430
2441
2504
2564
2612
2660
2730
2785
2857
3009
3116
3109
3246
3378
3414
3504
1721
1900
1976
2151
2262
2416
2424
2441
2511
2569
2612
2662
2728
2786
2867
3016
3116
3117
3284
3372
3423
3505
1732
1901
2000
2181
2268
2419
2421
2446
2511
2564
2616
2665
2730
2791
2873
3029
3109
3131
3304
3350
3424
3498
1734
1909
2017
2178
2297
2406
2408
2439
2511
2589
2617
2669
2720
2784
2875
3046
3110
3128
3311
3370
3419
3497
1674
1819
1941
2097
2234
2384
2417
2428
2483
2541
2598
2634
2702
2751
2834
2996
3111
3112
3203
3364
3391
3456
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Area Cost Factors
Costs that are based on national averages or on geographic locations other than the site should be
adjusted for location using area cost factors (ACFs). This can be done using the following
equation:
CS = C0(FS/F0)
where Cs is the cost for the site location, C0 is the cost based on other location, Fs is the area cost
factor for the site, and F0 is the area cost factor for other location.
ACFs are available from both private and public sources. Most are updated yearly for their
publication. National and state averages for ACFs (current as of March 10, 2000), as maintained
by the USAGE for military construction use, are provided in Exhibit B-2 below, as an example.
These factors are based on local construction costs of labor, material, and equipment, and other
factors such as weather, climate, seismic, mobilization, overhead and profit, labor availability,
and labor productivity. The most current ACFs can be downloaded through the USAGE Cost
Engineering Branch website at http://www.hq.usace.army.miI/cemp/e/es/pax/321/321.pdf.
ExhihitB-2
USAGE Area Cost Factors as of March 10, 2000
Location
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Area Cost Factor
0.85
1.61
0.98
0.87
1.18
1.03
1.05
1.02
0.87
0.85
1.48
1.06
1.15
0.99
1.06
0.93
0.94
0.89
1.06
0.89
1.12
1.17
1.07
0.87
0.97
1.13
Location
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Washington, D.C.
National Average
Area Cost Factor
0.94
.14
.05
.18
.01
.23
0.85
1.04
0.99
0.87
1.10
1.03
1.06
0.87
0.95
0.87
0.82
1.03
0.92
0.92
1.07
0.95
1.14
0.99
0.95
1.00
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Health and Safety Productivity
Unless effects are already accounted for, factors that reflect decreased productivity due to
required health and safety levels of protection should be applied to costs for labor and
construction equipment used in a crew makeup. The levels of protection, which are determined
based on the hazards to workers that might be present at a hazardous waste site, are classified as
follows:
* Level A: Fully encapsulating vapor-tight suit with full-facepiece, self-contained breathing
apparatus (SCBA) or supplied-air respirator.
* Level B: Totally encapsulating suit, not necessarily vapor-tight, with full-facepiece SCBA
or supplied-air respirator.
* Level C: Chemical protective, full body suit with full-face, canister air-purifying respirator.
* Level D: Basic work uniform (i.e., coveralls, gloves, hardhat, boots, faceshield or goggles).
Modified Level D adds a chemical protective, full body suit (i.e., Level C without
respirator).
Factors associated with decreased productivity due to protective equipment and clothing as
described above include restricted mobility, heat stress requiring break time, and time for safety
meetings, suit-up, suit-down, decontamination, and air tank changes. All of these factors reduce
crew production rates.
As an example, the productivity factors used by the USAGE for Hazardous, Toxic, and
Radioactive Waste (HTRW) projects are shown in Exhibits B-3 and B-4, for light and heavy
work, respectively, as published in Construction Cost Estimates (USAGE 1997). The factors in
these exhibits are based on a productivity study conducted in 1994 and are applied to crew
production rates in the Unit Price Book (UPB), which are based on "clean" site conditions, to
develop adjusted rates based on the health and safety level of protection. The decreased
production rate has an impact on cost by either increasing the time required to complete the
activity or prompting the cost engineer to add crews.
As an approximate method (e.g., development of cost estimate during FS), the inverse of these
factors can be applied to the unadjusted cost of an element to reflect decreased productivity for
that item. This can be done using the following equation:
where C/ is the cost for the assumed level of protection, C0 is the cost unadjusted for level of
protection, and FI is the productivity factor from Exhibit B-3 or B-4.
The productivity factors do not apply to material costs, treatment equipment costs, or other costs
that do not include crew costs.
-------
BO ExhihitB-3
* HTRW Productivity Factors - Light Work
VARIABLES U/M
A. Standard Losses
B. Scheduled / Heat Stress Breaks
C. Dexterity Losses
D. Total Time Lost per 8 hrMD
E. Productive Time per 8 hr MD
F. Productive Time on Clean Site
Min
Min
Min
Min
Min
Min
G. HTRW Productivity Factor
LEVEL A
T<70
160
60
78
298
182
430
0.42
7085
160
120
60
340
140
430
0.33
LEVEL B
T<70
140
43
74
257
223
430
0.52
7085
140
86
64
290
191
430
0.44
LEVEL C
T<70
128
35
55
218
262
430
0.61
7085
128
101
44
273
207
430
0.48
LEVEL D MODIFIED
T<70
76
30
4
110
370
430
0.86
7085
76
63
3
142
338
430
0.79
LEVEL D
T<70
32
30
5
67
413
430
0.96
7085
32
44
5
81
399
430
0.93
Notes: 1. Standard Losses account for all time losses independent of temperature variations. They include safety meetings, instructions,
donning /doffing PPE, decontamination, switching air supply/filters, monitoring delays, and cleanup.
2. Scheduled / Heat Stress Breaks account for all paid rest periods per manday.
3. Dexterity Losses are based on subjective opinions of the percentage that PPE slows down a normal worker because of factors such as
discomfort, clumsiness, weight, and restricted breathing and communication. The number of minutes actually worked is reduced by the
percentage representing the average response for that particular PPE level.
4. Values for A, B, and C were derived by averaging the survey responses for each PPE level. Responses that varied greatly from the
average were subject to omission at the author's discretion.
5. Total Paid Time = 480 minutes
6. 50 min delay on clean site = 10 min. safety meeting & instructions + 10 min. cleanup + 30 min. breaks
7.
Calculations:
D=A+B+C
E = 480 - D
F = 480 - 50
G = E/F
U/M = Unit of Measure
MD = Man-Day
Min = Minutes
T = Temperature Farenheit
8. Level A protection is used in extreme emergency situations only. Productivity factors for Level A
should be used with caution because they were extrapolated from 2 data points.
Source: Engineering Instructions (El 01D0101) - Construction Cost Estimates (USAGE 1997)
-------
Exhibit B-4
HTRW Productivity Factors - Heavy Work
VARIABLES U/M
A. Standard Losses
B. Scheduled / Heat Stress Breaks
C. Dexterity Losses
D. Total Time Lost per 8 hr MD
E. Productive Time per 8 hr MD
F. Productive Time on Clean Site
Min
Min
Min
Min
Min
Min
G. HTRW Productivity Factor
LEVEL A
T<70
220
60
80
360
120
430
0.28
7085
220
150
44
414
66
430
0.15
LEVEL B
T<70
204
50
52
306
174
430
0.40
7085
204
123
35
362
118
430
0.27
LEVEL C
T<70
135
64
44
243
237
430
0.55
7085
135
178
26
339
141
430
0.33
LEVEL D MODIFIED
T<70
76
30
28
134
346
430
0.80
7085
76
165
18
259
221
430
0.51
LEVEL D
T<70
28
30
11
69
411
430
0.96
7085
28
60
10
98
382
430
0.89
Notes: 1. Standard Losses account for all time losses independent of temperature variations. They include safety meetings, instructions,
donning / doffing PPE, decontamination, switching air supply/filters, monitoring delays, and cleanup.
2. Scheduled / Heat Stress Breaks account for all paid rest periods per manday.
3. Dexterity Losses are based on subjective opinions of the percentage that PPE slows down a normal worker because of factors such as
discomfort, clumsiness, weight, and restricted breathing and communication. The number of minutes actually worked is reduced by the
percentage representing the average response for that particular PPE level.
4. Values for A, B, and C were derived by averaging the survey responses for each PPE level. Responses that varied greatly from the
average were subject to omission at the author's discretion.
5. Total Paid Time = 480 Minutes
6. Delay on clean site = 10 min. safety meeting & instructions + 10 min. cleanup + 30 min. breaks
7.
Calculations:
D=A+B+C
E = 480 - D
F = 480 - 50
G = E/F
U/M = Unit of Measure
MD = Man-Day
Min = Minutes
T = Temperature Farenheit
8. Level A protection is used in extreme emergency situations only. Productivity factors for Level A
should be used with caution because they were extrapolated from 2 data points.
Source: Engineering Instructions (El 01D0101) - Construction Cost Estimates (USAGE 1997)
-------
-------
Appendix C
Example Cost Templates
The following pages provide example summary sheets for capital costs, annual O&M costs,
periodic costs, present value analysis, and sensitivity analysis. Also provided is example cost
worksheet that can be used to calculate and provide backup for cost element or sub-element
unit costs used in an estimate.
-------
SET*™ CAPITAL COST SUMMARY
Site: Description:
Lo(
Phi
Bas
Dal
:ation:
ise:
e Year:
e:
DESCRIPTION
QUAN-
TITY
UNIT
UNIT
COST
TOTAL
NOTES
Sheet of
-------
SET*™ ANNUAL O&M COST SUMMARY
Site: Description:
Lo(
Phi
Bas
Dal
:ation:
ise:
e Year:
e:
DESCRIPTION
QUAN-
TITY
UNIT
UNIT
COST
TOTAL
NOTES
Sheet of
-------
N"™ PERIODIC COST SUMMARY
Site: Description:
Lo(
Phi
Bas
Dal
:ation:
ise:
e Year:
e:
DESCRIPTION
QUAN-
TITY
UNIT
UNIT
COST
TOTAL
NOTES
Sheet of
-------
SET*™ PRESENT VALUE ANALYSIS
Site:
Description:
Location:
Phase:
Base Year:
Date:
YEAR
CAPITAL
COST
ANNUAL
O&M COST
PERIODIC
COST
TOTAL
COST
DISCOUNT
FACTOR
PRESENT
VALUE
Sheet of
-------
SET*™ SENSITIVITY ANALYSIS
Site:
Location:
Phase:
Description:
Base Year:
Date:
YEAR
PRESENT VALUE COST (Per Factor Evaluated - See Below)
1
2
3
4
5
Factors Evaluated:
1.
2.
3.
4.
5.
Sheet of
-------
Alternative:
Element: COST WORKSHEET
Sub-Element:
Site:
Location:
Phase:
Base Year:
Wo
Co
Soi
Co
Prepared By:
Date:
Checked By:
Date:
rk Statement:
>t Analysis:
irceof Cost Data:
>t Adjustment Checklist:
FACTOR:
| | H&S Productivity (labor & equip only)
| | Escalation to Base Year
| | Area Cost Factor
| | Subcontractor Overhead and Profit
| | Prime Contractor Overhead and Profit
NOTES:
Sheet of
-------
-------
Appendix D
Glossary
Capital Costs: Expenditures required to construct a remedial action. They are exclusive of
costs required to operation or maintain the action.
Constant (Real) Dollars: Observed dollar values that are not affected by general price
inflation. Typically used during FS cost estimating to compare relative prices over time.
Contingency: An amount added to a cost estimate to cover costs associated with unknowns,
unforeseen circumstances, or unanticipated conditions that are not possible to evaluate from
the data on hand at the time the estimate is prepared. Can include both scope (design)
contingency, to cover costs due to scope changes during design, and bid (construction)
contingency, to cover unknown costs associated with constructing or implementing a given
project scope.
Cost Element: An activity identified for a remedial alternative that is used to estimate both
capital, annual O&M, or periodic costs and help define the project. Cost element categories
include construction activities, O&M activities, professional/technical services, and
institutional controls.
Cost Engineering: The practice of total cost management over the life cycle of a project,
facility, or manufacturing operation. Components include cost estimation, cost control,
project management, planning, scheduling, and profitability analysis.
Cost Estimate: An evaluation of all the costs of the elements of a project or effort as
defined by an agreed-upon scope.
Discount Rate: The interest rate used in calculating the present value of expected future
costs. A nominal discount rate is an interest rate that has not been adjusted for any change in
the general price level (inflation). Nominal interest rates are those that usually may be
observed in the market, such as the published rate on a savings account or a bond. Nominal
interest rates should be used to discount costs that are in current, or nominal, dollars. A real
discount rate is an interest rate that has been adjusted to account for the effect of expected or
actual inflation. Real interest rates can be approximated by subtracting the expected or actual
inflation rate from a nominal interest rate. Real interest rates should be used to discount
costs that are in constant, or real, dollars, which is the typical situation for FS present value
analyses.
Life Cycle Cost: The total cost across the life span of a project, including design,
construction, operation and maintenance, and closeout activities. Includes initial capital costs
plus any continuing costs of operation and maintenance. For the purposes of this guide,
excludes costs prior to design, such as investigation and study costs, and excludes
government or program management costs.
Nominal (Current) Dollars: Values as they are observed in the market when transactions
occur. Nominal dollars are real dollars that have been escalated to reflect the effects of
inflation.
-------
O&M Costs: Post-construction costs necessary to ensure continued effectiveness of a
remedial action. Includes both short-term O&M and long-term O&M costs. Most O&M
costs are estimated on an annual basis.
Periodic Costs: Capital or O&M costs that occur only once every few years or only once
during the entire project timeframe. Because of their periodic nature, these costs are usually
considered separately in the estimating process from initial capital or annual O&M costs.
Present Value: The present value of a future investment or payment that is calculated using
a particular discount or interest rate. Total present value is the amount of money, which, if
invested in the current year, would be sufficient to cover all the costs over time associated
with a project.
Sensitivity Analysis: A type of uncertainty analysis that measures the project impact of
changing one or more input values. For remedial alternative cost estimates, sensitivity
analyses are typically completed for those factors that have a relatively high degree of
uncertainty and that, with only a small change in their value, could significantly affect the
overall cost of the alternative.
Unit Cost: A cost per unit of measure that is usually multiplied by a quantity to estimate the
cost of an element or sub-element within the cost estimate of a remedial alternative. A unit
cost is typically adjusted for decreased crew productivity, escalation to base year, geographic
location, contractor markups (e.g., overhead, profit), and other factors, depending on the
source of cost data (e.g., quotes, cost references, historical data).
------- |