United States
Environmental Protection
Agency
Office of Solid
Waste and
Emergency Response
EPA542/F-92/013
August 1992
&EPA
Procuring Innovative
Technologies at Removal Sites:
Q's and Avs and Case Studies
Technology Innovation Office
Background - An innovative technology is a treatment technology for which cost orperformance information is incomplete, thus
hindering routine use at hazardous waste sites. The Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (CERCLA) as amended by the Superfund Amendments and Reauthorization Act of 19.86 (SARA), and the National
Contingency Plan (NCP) encourage the use of innovative treatment technology remedies if such remedies can be used: (1) at less
cost; (2) with less adverse impacts; or, (3) to treat a site more effectively than other methods. Contracting for such innovative
treatment technologies can be difficult due to the government's and industry's lack of experience. These technologies are
relatively new and have rarely been applied to large clean-up projects. Therefore, special considerations are needed in scoping
the procurement of innovative technologies.
Purpose - This fact sheet is designed to assist EPA On-Scene Coordinators (OSCs) and Contracting Officers (COs) with the
procurement of innovative treatment technologies. OSCs and COs were interviewed to obtain information on their experiences
in procuring innovative technologies. EPA's Technology Innovation Office (TIO) has documented case histories of previous
experiences with acquiring innovative technologies. Removal sites chosen for inclusion in this review were Fund-lead sites that
had started or completed the procurement of an innovative technology, including bioremediation, chemical treatment, soil
washing and chemical extraction. The results of these interviews are presented in a question and answer format. In addition,
specific detailed information on each site is presented in tabular form.
Q1. Why Do Innovative Technologies Need
Special Consideration During Procurement?
Al. Innovative technologies are new treatment methods that
have not been applied full scaleunderavarietyofsiteconditions.
Even though innovative technologies may be well designed
andcarefuUyplanned,theymaynotmeetcontractspecifications
on initial attempts and may require some modification and
reengineering. Equipment failures and waste processing
problems are not unusual for first time use. The Superfund
Start-Up Initiative (OS WER Directive 9380.0-17) encourages
regions to allow contract flexibility for selected remedial and
removal actions to assist vendors in establishing a pattern of
reliable operation that satisfies performance standards.
Q2. What Types Of Contracts Have Been Used To
Procure Innovative Technologies?
A2. Fixed price contracts have been used most often to
procure innovative technologies. Fixed price contracts can
include lump sums and/or fixed unit prices. A lump sum
contract sets put the total price for completing the work, while,
fixed unit prices determine the price paid for individual items
procured under the same fixed price contracting vehicle. In
order to incorporate flexibility into the fixed priced contracts
used to procure innovative technologies, performance
specifications and/or a combination of lump sums and fixed
unit prices for work that was still undetermined were written
into the contracts. Unit prices were used for such items as
excavation, cleaning, backfilling, well installation and
treatment. Excavation and treatment were most often based on /
cubic yards and not on weight due to problems in weighing soil, j
As noted in the sidebar on pages 2 and 3, there are other types j
of contracts that can be used toprocure an innovative technology.1
Q3. Do Construction Contracts Have To Be Used
To Procure Innovative Technologies?
A3. Although construction contracts have been used to procure
innovative technologies, much of the removal response
treatment work done using innovative technologies is service
oriented and a service contract could be considered. The
Davis-Bacon Act and the Service Contract Act require that all
work be analyzed to determine which elements are construction
and which are service. The contract is then awarded based on
the preponderance of the work. A service contract procures the
time and effort of a contractor whose primary purpose is to
perform an identifiable task. A construction contract is a
contract for. the construction, alteration, or repair (including
dredging, excavation arid painting) of buildings, structures, or
other real property.
1
Recycled/Recyclable
Primed on paper that contains
at least 50% racyded fitwr
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Q4. How Do Bonding Requirements Differ
Between Service And Construction
Contracts?
• " !
A4. Bonds are written instruments that ensure that the
contractor'sobligations aremet or that compensationis awarded
if the obligations are not met. There are different types of
bonds and .related documents. The Miller Act requires
performance and payment bonds for construction exceeding
$25,000. A bid bond assures that the bidder will not withdraw
a bid within the period specified for acceptance, and will
furnish required bonds within the time specified in the bid. A
performance bond secures the work that the contractor has
agreed to perform. A payment bond assures payment [to all
persons supplying labor or material in the performance of the
workprovidedbythecontracLltisimportantfortheContracring
Officer to discuss bonding requirements with the contractor
before the contract award so that bonding issues will not delay
site cleanup. For example, if the contractor pledges private
assets in lieu of obtaining a bond from a bonding company,
each asset must be evaluated, which will lengthen the
procurementprocess. However, contractors cannot be required
to obtain bonds from bonding companies, and are allowed to
pledgeprivate assets to meetcontractualbondingrequuements.
Although Uiecontractorisnotrequiredtopledgebonds through
a surety, the actual amount and means of pledging the bond
must be acceptable to the CO prior to the award of the contract
For service contracts, or any contracts other than construction
contracts, performance and payment bonds are generally not
required. However, if it is determined by the CO that a service
contract contains elements of construction activity that are
substantial and segregable, and the construction activity
exceeds $25,000, then the Miller Act applies to that portion of
the contract. The CO must make a determination as to the
required level of bonding for that portion of the contract
coveredby the Miller Act. For further information, please refer
to"Supe.rfundGuidanceontheApplicabilityandIncorporation
of the Davis Bacon Act/Service Contract Act and Related
Bonding."
Contracting and Solicitation Options/
Considerations
Solicitation Options: Contracts must be awarded
competitively unless it can be demonstrated there is
only one source. In the event there is only one source,
a written justification for other than full and open
competition (JOFOC) is required. The responsibility
for writing the JOFOC rests with the program office. If
the procurement is under $25,000, small purchase
procedures may be used. If the procurement is over
$25,000, solicitation procedures resulting in a contract
must be used. There are three solicitation options:
1) Invitation for Bid (IFB) if two or more offerers can
respond
2) Request for Proposals (RFP) if discussion with
the offerers is necessary
3) Two Step Formal Advertising allows technical
discussions with offerers to determine acceptable
technical proposals with cost proposal submitted
thereafter. The award must be made to the
lowest offeror whose technical proposal is
acceptable.
Types of Contracts: The different types of contracts
that can be used for removal response are:
1) Firm Rxed Price Contracts-thegovernment pays
, a fixed price or lump sums for a specified product
or service which is established before the award.
Fixed price contracts are usually used when the
design or performance specifications .are
reasonably definite. '
2) Indefinite Delivery/ Indefinite Quantity Contracts-
thegovernment places orders for supplies and/or
services against the contract after the award.
These types of contracts are used when the exact
time or place of delivery, or quantity required, is
(continued on page 3)
Index to Case Studies
Site
Southeastern Wood Presering
Scott Lumber
Norco Battery
Signo/Mt. Vemon
General Refining
Technology Page Number
Slurry-Phase Bioremediation and Soi! Washing A-1, A-2
Bioremediation (Land Treatment) A-3, A-4
Chemical Treatment A-5, A-6
Chemicaf Treatment (KPEG) A-7, A-8
Solvent Extraction (Basic Extractive Sludge A-9, A-10
Treatment Unit)
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Site:
Southeastern Wood
Preserving
Mississippi
Contact:
Ms. Sharyn Erickson, CO
(404) 347-2374
FTS 257-7292
Don Rigger, OSC
(404) 347-3931
FTS 257-3931
Technology:
Slurry-phase bioremediation
and soil washing
CONTBACTJNFORMATTON
Procurement Lead: EPA site-specific contract
Contractor(s): Prime: OHM Remediation Services Corporation •
Procurement Started/Completed: 1/90-9/90 (9 months)
Number of Bids: 12
Phase of Procurement: Contract Administration v
Method of Solicitation: Competitive-negotiated without technical proposal submission. Obtained EPAAR waiver to permit this type of
procurement.
Type of Contract: Rrm fixed price (lump sum)
Protests/Claims/Change Orders: None to date
Special Clauses Used In RFP/IFB/Contract: Payments clause, so that contractor would receive payment as work progressed. Payments
were based on the amount of work completed. Contract required a full-scale,demonstration be conducted at the vendor's expense and the
contract could be terminated if the demonstration failed. A clause was included to notify offerers that EPA intended to conduct a pro-award
survey to determine their capability to perform the requirements of the contract. An evaluation of offers dause was included to inform the
offerers that proposals would be evaluated on the basis of the low-priced responsive, responsible offer.
Prequalified Bidders: No
Bonding Requirements: None, procured as a service contract
Patent Issues: None
Type of Specifications: Performance
Sole Source Issues: Not applicable, competitive procurement
EXPERIENCES
ENCOUNTERED
: RESOLUTION
WHAT WORKED WEltfADVICE
Process took longer than usual
because three separate
pre-award surveys were
completed.
' Vendor that was deemed not
responsible complained to a
member of Congress; the
Congressman wrote to EPA
regarding this complaint.
' Had a small business referral,
whom CO found not
responsible (not technically
qualified).
• Pre-award surveys, while time
consuming, can save critical
time and money later by
determining the qualifications
of the bidders. '
• EPA responded to the
Congressman's letter and the
inquiry ended.
•Since the SBA did not
guarantee the vendor, EPA
did not have to award them
the contract.
• Include statement of the item and schedule, payments dause, notification that EPA can do pre-award
survey, and evaluation of offers clause in contract.
• Use of performance specifications allowed technology to be changed from land treatment to slurry-phase
bioremediation without a change order. Since a specific technology was not identified, performance
spedfications also allowed for bids from vendors proposing many different types of technologies.
• Write statement of work dearly, so that it cannot be misinterpreted.
1 Require a successful full-scale demonstration on small quantity prior to being able to proceed treating
entire site. Only allow progress payments after completion and allow immediate termination for failure of
demonstration phase.
• Use pre-award survey to determine the qualification of the offerers.
• Using a service contract, that does not require bonding, opens up competition. Howeverjhis CO added
a special clause that allowed EPA to recover costs for reprocuring the technology if the vendor failed to
meet the performance specifications.
1 Consider site factors, such as excessive rainfall, when procuring innovative technologies.
> Make sure performance standards are realistic.
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Site: Southeastern Wood Preserving (Region 4)
At the Southeastern Wood Preserving site in Mississippi (EPA Region 4), slurry-phase bioremediation and soil
washing were competitively procured through an EPA direct contract with OHM Remediation Services
Corporation. For this procurement, the CO was able to obtain a deviation from the EPA Acquisition Regulations
to allow a negotiated procurement without submission of technical proposals. Performance specifications were
used and the technology was not specified. Therefore, bidders submitted proposals for many different treatment
technologies. The determining factor for award was price.
As this CO correctly pointed out, most treatment technologies do not involve substantial construction, but rather
are service related in nature. Therefore, this CO used a service contract at this site. Service contracts do not
require bonds, which often make it difficult for new and undercapitalized vendors to compete. Also, the cost of
bonds is added to the price the government pays, i
At this site, to protect the government, a demonstration at the vendor's expense was required. In addition, if the
treatment technology was not successful, the contract also included a clause to terminate the contract to allow
EPA to collect the costs for reprocuring the technology. The procurement began in January 1990 and was
completed nine months later in September 1990. A pre-award survey was conducted to determine the capability
of the vendors to perform the requirements of the contract.
The procurement process took longer than usual because EPA conducted three separate pre-award surveys,
but there were no major problems in procuring the technologies for this site, and 12 offers were received. EPA
conducted pre-award surveys to determine the qualifications of offerers, and the results of these surveys were
used to determine whether the low offerer was technically and otherwise qualified. The entire project has been
completed so far without a single change order or claim.
In an effort to avoid potential problems, the solicitation for this site included four key items: (1) the statement of
the item to be provided, and the delivery schedule; (2) the payments clause, which indicates that the contractor
will not be paid until the technology is demonstrated; (3) a notification that EPA has the right to conduct a.
pre-award survey; and, (4) an evaluation of offers clause, which tells offerers that the solicitation will be
evaluated based on low price. !
Due to record rain levels in Mississippi, the technology was changed from slurry-phase bioremediation and land
farming to slurry-phase bioremediation and soil washing. Since performance specifications were used, the
change in technologies could be accomplished without using change orders. The CO noted that good
performance specifications also help avoid claims Unless actual site conditions are drastically different than
originally anticipated. j
i
EPA also included a payments clause in the contract so that the contractor would receive payment as the work
progressed. These payments were based on the amount of work completed. This clause was used as a
means of ensuring that the contractor would only get paid if the treatment technology was successful, and if the
work was completed. A fixed price (lump sum) contract was chosen for this site so that the contractor would
only receive payment if each stage of the cleanup was completed.
A-2
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Site:
Scott Lumber
Missouri
Contact:
Mr. Bruce Morrison
OSC
(913)551-5218
Technology:
Bioremediation
(Land Treatment)
Procurement Lead: Subcontract through prime contract
Contractors): Prime: Riedel; Subcontract: Remediation Technologies (Re-Tec)
Procurement Started/Completed: 5/88-6/89 (11 months)
Number of Bids: Information Unavailable
Phase of Procurement: Contract Administration
Method of Solicitation: Competitive - sealed bid
Type of Contract: Fixed unit price, and lump sum
Protests/Claims/Change Orders: Re-Tec found more contaminated soil than originally anticipated and submitted a
change order.
Special Clauses Used In RFP/IFB/Contract: Subcontractor required to notify EPA if site conditions or events caused
delay in their work. Bioremediation was specified in IFB as technology to be used. Required bidders to perform
treatability study at their expense.
Bonding Requirements: EPA CO waived full bonding requirements for Re-Tec. Re-Tec submitted letter-of-credit for
$100,000 performance bond.
Patent Issues: None
Prequalified Bidders: No
Type of Specifications: Performance
Sole Source Issues; Not applicable, competitive procurement
Re-Tec was bought by another company and wanted
to change their technical approach from what was
originally proposed, causing procurement to take 5
months longer than anticipated.
EPA was uncertain of the level of protective gear
which would be needed at the site, making it difficult
for bidders to price protective gear as part of lump
sum proposal.
Change order included many charges EPA found
unrelated to the increase in amount of contaminated
soil.
Re-Tec wrote a letter stating they were being
delayed, and claimed that they should be paid for
their down time.
Competition was
re-opened. Re-Tech once
again had lowest price and
was awarded the contract.
Separated personal gear
out from rest of contract
and had bidders price on
unit basis.
Only half of Re-Tec's
charges were approved.
• Since letter did not quantify
reasons for delay, EPA
denied claim for these
charges.
Require subcontractors to be responsible for air monitoring. This was
inadvertently left out of the Statement of Work and EPA had to
provide monitoring.
Measure amount of soil at sites by volume, instead of weight. This
contract utilized weights which was found to be difficult and
time-consuming.
Make contract broad enough to cover total amount of waste that could
possibly be found at the site. This contract, due to its lump sum
nature, had a ceiling of 131,000 tons which was exceeded. Change
orders to increase amount to be treated delayed clean-up by a month.
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Site: Scott Lumber (Region 7) ' i . . '
i
Bforomediatfon (land treatment) was procured at the Scott Lunjiber site in Missouri (EPA Region 7). The technology was procured as a
subcontract through an Emergency Response Cleanup Services (ERCS) contract Rtedel Environmental Services was the ERGS prime
contractor. Remediation Technologies (Re-Tec) was the subcontractor who provided the bioremediation technology. The procurement
process was Initiated In May 1988 and was completed 13 months later in June 1989.
The technology was competitively procured using sealed bids.j The bids were evaluated on technical and cost criteria. If the bids did not
meet the technical requirements, they were deemed unresponsive and were not evaluated further. There were some bidders that were
doomed unresponsive because they refused to estimate the cost of doing the work. These bidders viewed the work as risky, and wanted
to do some studies on site before submitting a cost proposal. < -
The OSC at the site noted that the reason why they issued a cisntract for the bioremediation technology was because they did not have the
necessary In-house expertise to perform the technology. The (ack of technical expertise also made it difficult to properly evaluate the bids.
A mlcroWoIoglst from the Emergency Response Team in Edison provided technical assistance in reviewing the bids.
Regional COs were just being established when this procurement was taking place. Therefore, the Headquarters CO retained
responsibility for ti>e site. Because of the geographical distance, the procurement was slightly more difficult than those now handled by Jhe
regional COs. ! •
The procurement took five months longer than anticipated. After Re-Tec was chosen as the subcontractor, they were bought by another
company. While Re-Tec would still honor the initial price, they Wanted to change their technical approach from what was originally
proposed. The OSC reopened the competition because of me change in their technical approach. Best and Final offers were obtained
from the three moot qualified bidders, and Re-Tec once again ijad the lowest price, and was awarded the contract
EPA wanted to avoid using a time and materials contract and Ranted to use performance specifications in a firm fixed price (lump sum)
contract However, EPA was not certain of the level of personal protective gear which would be needed at the site. This uncertainty made
it difficult for bidders to price the protective gear as part of a lump sum proposal. This was resolved by separating personal protective gear
from the rest of the contract and having the bidders price it on i man-day (unit price) basis.
i
The OSC at the site Indicated that with fixed price contracts, many change orders tend to be submitted because site conditions are often
different than originally anticipated. At this site, more contaminkted soil was found than originally anticipated, and the subcontractor
submitted a.change order. This OSC recommended reading change orders very carefully as they may often include extra charges which
are not related to the Increase In the amount of contaminated sbil. Not all charges have to be approved; partial payment is within EPA's
control and should be negotiated if problems exist i •
There was also a clause in the contract which stated that the subcontractor was required to notify EPA if there were site conditions or
events that caused a delay In their work. If a letter is submitted^ by a contractor, it must state why they are being delayed, and make a
daJm for their down time. If the letter does not indicate the reasons for the delay, and the contractor could have been doing work at the site
Which they were not prevented from doing due to site conditions by rearranging priorities to complete activities in a different order than
originally planned, then EPA can deny the daim for these changes.
The OSC recommends measuring the amount of soil that has b^en treated in cubic yards, instead of by weight He weighed the soil at this
site, which he felt was a mistake, since it took a lot of effort to wpigh each truckload two times to ensure accuracy. He said it would have
been more effective to survey the stockpile and base the amount of soil on volume.
It Is important to require the subcontractor to be responsible for|air monitoring. This requirement was not put in the subcontract at this site
and subsequently the OSC had no other choice than to perform the air monitoring himself.
In addition, the OSC suggests making the contract broad enough to cover the total amount of waste that could potentially exist at the site
At this site, they had set a ceiling on the amount of soil to be treated, and when it became apparent that the subcontractor would need to
exceed this celling, EPA had to work out an agreement to pay for the cost of additional tonnage.
It was also teamed that it is important to be very general in the requirements stated in the Statement of Work. The more specific a
statement of work fe, the more difficult it is to procure the innovative technology.
The EPA CO waived the full bonding requirement for Re-Tec. Re-Tec submitted a letter of credit for $100.000 performance bond. While
the OSC was concomed that Re-Tec was not fully bonded, bonding Issues did not hold up the contracting process.
! A-4
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SITE INFORMATION
Site:
Norco Battery
California
Contact:
Mr. Richard Martyn
OSC
(415)744-2288
Technology:
Chemical Treatment
> A ,f
Procurement Lead: Subcontract through prime contract • •>
Contractors): Prime: Riedel; Subcontract: QualTech
Procurement Started/Completed: 12/88-6/89 (7 months)
Number of Bids: 3
Phase of Procurement: Project completed
Method of Solicitation: Competitive-negotiated
Type of Contract: Fixed unit price and lump sum
Protests/Claims: Contractor which submitted lowest bid, but was not awarded the contract, protested. This contractor did not
meet technical requirements in RFP. Protest was resolved in September 1989, four months after contract was awarded, but did
not hold up contract award because of special provisions in the EPAAR for emergencies. Also, contractor filed a claim at end of
job. Contract required 300 tons of soil to be processed each day, using EPA scales. Contractor also weighed soil and claimed
their weight was higher that EPA's weight. EPA denied the claim.
Special Clauses Used in RFP/IFB/Contract: If subcontractor failed to meet the requirements in the contract, they would have to
reprocess the soil or haul it away at their expense. Required bidders to perform a treatability study at their own expense.
Bonding Requirements: None, QualTech was self insured
Patent Issues: None
Prequalifled Bidders: No
Type of Specifications: Performance
Sole Source Issues; Not Applicable, competitive procurement . .
RESOLUTION/
,"''
't «
A prime additive (fly
ash) was changed
without notifying EPA or
the prime contractor.
New vendor's fly ash
had not been tested for
other contaminants, and
had not been bench
scale or lab tested to
ensure conformance
with contract
specifications.
No guidelines to follow,
since no one had done
the same type of
procurement previously.
Color change in
soil treated with
new fly ash
alerted EPA and
prime contractor
to change in
vendor. First
vendor's fly ash
was brought
back on-site.
Set out in writing, before the RFP is is§ued, whether cost or technical issues will determine to whom contract
is awarded and emphasize the criteria in the RFP.
Specify in the RFP if the contractor must have prior experience.
Set standards which the contractor must meet in the contract and then document all problems.
Make sure that contract requires all materials to meet specifications or have successful bench, lab or pilot
tests conducted to ensure that performance specifications are met
Use performance specifications.
Meet with Contracting Officer to go over RFP and contract to ensure that requirements are not ambiguous.
Travel to location where technology has been tried before and discuss how effective technology was in
cleaning up the site.
Require vendors to perform treatability studies at their own expense.
If weight is to used instead of volume for unit price of treatment, specify whose scales will be used.
Specify any penalties for downtime in the contract.
For this type of technology, be very specific in the RFP regarding when and how to perform leach and
permeability-tests.
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Site: Norco Battery (Region 9) -'•
I
Procurement of a chemical treatment technology to adjust the pH of lead sulfate at the Norco Battery site in
California (EPA Region 9) began in December 1988 and was completed seven months later in June 1989. This
innovative technology was competitively procured as a subcontract through an ERGS contractor, Riedel.
Riedel sent the RFP to five bidders, and three bidders responded. The RFP required prior experience using
the technology, and also required vendors to demojnstrate that they could treat the soil. The vendors were not
compensated for these demonstrations. The biddei that won the award (QualTech) had previously done the
chemical treatment work successfully and was proposing the most moderate cost.
A bidder that had proposed the tow bid, but did not meet the requirement of the RFP that the bidders had to
have previous experience with the technology, protested to being eliminated from further consideration. This
could have held up award of the contract, but the General Accounting Office (GAO) cannot put a stay on the
funds for removal contracts since there is a specific provision in the Federal Acquisition Regulations (FAR)
which states that in an emergency situation, it is allowable to continue with the procurement process even if
there is a bid protest (as long as an investigation into the bid protest continues). EPA was able to minimize the
impact of the protest. The OSC recommended, to £void protests, that criteria - cost and/or technical -- which
will be used to decide which bidder will get the contract should be decided and documented prior to the release
of the RFP and should be emphasized and highlighted in the RFP.
The contract was a fixed price contract, with a cornbination of firm fixed prices (lump sums) and fixed unit
prices. Lump sums were used for all plans, site visits and reports. Fixed unit prices were used to pay per ton
for the soil treatment, since it was unclear how many tons of soil needed to be treated. Performance
specifications in the contract stated the cleanup goals to be met at the site, and that if the subcontractor failed
to meet the requirements in the contract, it would have to reprocess the soil or haul it away at its own expense.
The RFP also required vendors to demonstrate at their own expense that they could treat the soil, which
avoided,problems with nonperformance after awarding the contract.
The OSC recommended being very specific in the iRFP for this type of treatment regarding when and how to
perform leach tests and permeability tests. The contract should include a requirement that contractors use the
same materials that were successful in the bench, fab and pilot tests to ensure meeting performance
specifications. At the Norco Battery site, a prime additive (fly ash) was changed without notifying EPA or the
prime contractor. The new vendor's fly ash had not been tested for other contaminants, and had not been
bench scale or lab tested to ensure conformance With contract specifications. The color change in the soil
treated with the new fly ash alerted EPA and the prime contractor to the change in vendors. Although the small
amount of soil treated with the new fly ash did pass the contract specifications, it was decided to bring the first
vendor's fly ash back on-site. |
|
There was some difficulty with weighing the soil. Two scales were being utilized to weigh the soil- EPA's and
the vendor's. The vendor charged based on their sbales but EPA scales showed different weights. If planning
to use unit prices based on weight rather than volumes, this OSC advises specifying in the contract whose
scales will be used and also who pays for down time due to equipment malfunction.
A-6
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% ?, - %,
Site:
Signo/Mt. Vemon
New York
Contact:
Mr. Charles Fitzsimmons
OSC
(908)321-6608
FTS 340-6608
Technology:
Chemical Treatment
(KPEG)
Procurement Lead: Subcontract through prime contract
Contractors): Subcontract: Galson
Procurement Started/Completed: 9/87-11/87 (3 months)
Number of Bids: Not Applicable
Phase of Procurement: Completed project
Method of Solicitation: Sole source
Type of Contract: Lump sum
Special Clauses'used In RFP/IFB/Contract: Clause in subcontract releasing EPA from having Galson do the rest of
the work if pilot test failed and releasing EPA from paying for pilot test if it failed.
Patent Issues: None, Galson holds patent on KPEG
Prequallfled Bidders: Not Applicable, sole source arrangement
Type of Specifications: Performance ' *.. ^
Sole Source Issues: None, KPEG technology was procured through sole source arrangement; however, this work
was a small part of total work. Other work was procured competively. ,
At the time, Galson was the only vendor of this
technology.
Because of this, it was
easier to justify a
sole-source procurement.
Maintain contact with EPA CO to ensure that all necessary
requirements have been met.
ERGS purchasing mechanism facilitated procurement;
however, also required a 15% fee be paid to ERGS prime
contractor.
Procure innovative technologies using site-specific contracts to
eliminate General and Administrative costs.
-------
Site: SIgno/Mt. Vernon (Region 2)
!
Chemical treatment (KPEG) was procured to treat one dioxin contaminated drum at the Signo/Mt. Vemon site
in the Bronx, New York (EPA Region 2). Procurement began in September 1987 and was completed one
month later in November 1987. |
|
The technology was procured as a subcontract through an ERCS prime contractor. At the time, the easiest
and quickest way to procure innovative technologies at removal sites was through an ERCS contract.
However, General and Administrative costs for the ERCS prime contractor can add considerable costs to the
contract. :
i
The KPEG technology was procured by the prime contractor through a sole source arrangement with a
subcontractor, Galson Remediation. The sole source justification indicated that the technology was needed for
an emergency situation, and that there was no other vendor who could perform the work on the site. While a
lot of problems were avoided by procuring the technology through a sole source justification, it is now more
difficult to procure KPEG through a sole source arrangement, since more companies are now able to provide
the more generic form of the KPEG technology (i.e., APEG). However, at the time, Galson was the only vendor
and presently holds the patent on their process. ;
The subcontract required Galson to pull samples and run a pilot test to see if the KPEG process would work.
There was a clause in the subcontract which released EPA from having Galson do the rest of the work if the
pilot test failed. This clause also released EPA from paying for the pilot test if it failed.
A-8
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SITE INFORMATION
:>
CO
Site:
General Refining
Georgia
Contact:
Mr. Shane Hitchcock
OSC
(404) 347-3931
Technology:
Solvent extraction--
Basic Extractive Sludge
Treatment Unit (BEST)
.CONTRACT INFORMATION
Procurement Lead: Subcontract through prime contract
Contractor(s): Prime: Haztech; Subcontract: Resources Conservation Company (RCC)
Procurement Started/Completed: 8/85-4/86 (9 months)- delayed due to re-authorization of Superfund
Number of Bids: Not Applicable >
Phase of Procurement: Project Completed
Method of Solicitation: Sole Source
Type of Contract: Fixed unit price
Protests/Claims: None
Special Clauses Used In RFP/IFB/Contract: Prime contractor insisted on the inclusion of clauses in subcontract with
RCC in order to minimize their liability. Subcontractor was required to conduct a lab scale treatability study; a pilot test at
their own facility; and, a full scale pilot on site, at EPA's expense
Bonding Requirements: Yes
Patent Issues: None, RCC holds patent on BEST unit technology.
Prequallfled Bidders: Not Applicable
Type of Specifications: Performance
Sole Source Issues: EPA CO required RCC to substantiate price of doing the work, in order to prove that they were not
exceeding 10% profit margin. Needed EPA Headquarters approval to acquire solvent extraction through sole source
procurement as well as exemption to old rule that no more than $1 million can be spent in 6 months at one removal site.
Had to create a sole source justification without a model.
EXPERIENCES ENCOUNTERED
Under ERCS contracts, EPA cannot dictate what
should be subcontracted and there is no
incentive for prime to assist subcontractor.
Difficulty negotiating and monitoring
subcontract because EPA had to channel
everything through prime contractor.
Materials handling was not
tied to performance
specifications for RCC, and
Haztech did materials
handling under time and
materials contract, which
proved to be not very cost
efficient
1 Use site-specific contract, which minimizes risk to the
government even if the technology fails. Although additional
lead-time is required, it is made up by not having to definitize the costs
on the back end, which is required under the ERCS Delivery Order
contracts.
' Use SITE and Emergency Response Team resources to assist in
evaluating the technology.
Include a clause in the contract which indicates that if the '
contractor fails for nonperformance, they have to pay for EPA's
costs to reprocure the technology.
• Use performance specifications to measure how subcontractors
perform, and then pay for only what meets the specifications.
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Site: General Refining (Region 4)
j
At the General Refining site in Georgia (EPA Region 4), a type of chemical extraction technology known as
solvent extraction was procured for the first time by ERA as a subcontract through an ERGS prime contractor
(Haztech) through a sole source arrangement with Resource Conservation Company (RCC). The sole source
negotiations began in August 1985 and were completed nine months later in April 1986. The contract was
ready for award in February 1986, but was delayed because the authorization for the Superfund program
expired. t
i
The technology was procured through a sole source arrangement because RCC was the only company EPA
could identify that had a technology which could work on the site. In order to ensure that the technology would
work, EPA required RCC to conduct a lab scale treatability study, a pilot test study at their own facility, and a
full scale pilot test on site. These tests were funded by EPA, and were completed as part of the sole source
negotiations. i
!
EPA experienced a number of difficulties. In order to prove that they were not exceeding a 10% profit margin
on a sole source procurement, the EPA CO required RbC to substantiate the price of completing the work.
This "cost build-up" took three months, and was resource intensive. In addition, the On-Scene Coordinator
needed to get EPA Headquarters approval to acquire the solvent extraction technology through a sole source
procurement. An exemption to the rule that no more than $1 million can be spent in six months at one removal
site was also required. Compounding these difficulties; was the fact that there was no model for the sole source
justification. • :
i
Because this was one of the first innovative technologies to be applied to a site, EPA encountered a number of
contract management problems at this site. The major! problems which occurred were due to the fact that an
ERGS contract, and not a site-specific contract, which are now just beginning to be used, was used to procure
the subcontractor. Under an ERGS contract, EPA cannot dictate what should be subcontracted, and there is
little incentive for the prime contractor to assist the subcontractor. In this case, EPA wanted the prime
contractor to subcontract for the solvent extraction technology and for materials handling. However, the prime
contractor did not want to subcontract for both items. EPA was successful in convincing the prime contractor to
subcontract for the solvent extraction technology, but Was unsuccessful in persuading the prime to subcontract
for materials handling. Therefore, materials handling wjas not tied to performance specifications for RCC, and
Haztech did the materials handling under a time and materials contract. Because of the now recognized
difficulties in materials handling which produced a lot of down time, much larger charges occurred under the
time and materials contract. | -
In addition to the problems which were ERCS-contract specific, procurement was made more difficult because
the plan to have Regional COs had not yet been implemented. In addition, EPA had to channel all
communications to the subcontractor through the prime contractor, which limited EPA's authority over the
subcontract. |
I .
General Refining was the first site at which performance-based specifications were used to subcontract for an
innovative technology. Using performance specifications enabled EPA to pay for only the soil which was
treated to EPA specifications. Since the subcontract wi,th RCC was a fixed unit price contract, RCC was paid
on a cost per unit ton basis for all material that met perf0rmance specifications.
i
Patent infringement issues were not a problem, since RCC holds the patent on the specific type of solvent
extraction used at the site (the Basic Extractive Sludge [Treatment Unit).
A-1;0
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not known at the time of contract award.
Contracting and Solicitation Options/
Considerations (continued from page 2)
3) Time and Materials Contracts-the government
pays a fixed rate for each hour of direct labor
worked by the contractor, up to a negotiated
ceiling on the total price. This type of contract is
used for engineering and design services, repair,
maintenance or overhaul work, or in emergency
situations where there are generally unforeseen
circumstances.
4) Cost Reimbursement Contracts-the government
pays for reasonable, allowable and allocable
costs of the removal response plus a fixed fee or
an award fee. A fixed fee does not vary with
performance while an award fee is based upon
a government evaluation of contractor^
performance. Cost-type contracts are used when
the performance desired cannot be clearly
specified, and when accurate cost estimates are
impossible.
Superfund Removal Contracting Options: For
removal contracts, there are three choices:
1) Emergency Response Cleanup Services (ERGS)
Contracts. ERGS contracts provide emergency,
time-critical, and rapid remedial cleanup support
to Superfund in containing, recovering, or
disposing of hazardous substances and in sample
analysis and site restoration. ERGS contracts
provide expeditious response (i.e., within hours
ordays)toNPLandnon-NPLsites. Thecontracts
listthe necessary personnel, equipment, services,
and response times. The first generation of
ERGS contracts cove red large zones. Each zone
comprised anywhere from one to five regions.
The Long Term Contracting Strategy for
Superfund calls for future Removal contracts to
be smaller in size and to cover only one region.
Several regional contracts have already been
awarded and several more are soon to be
awarded.
2) State Cooperative Agreement- EPA provides
funds to states, political subdivisions, and Indian
tribes to assume lead responsibility in awarding
and managing contracts for removal response.
3) Site Specific Contract- EPA procures the work
directly from a contractor instead of using the
ERGS contracting vehicle.
4) Interagency Agreements with Other Federal
Agencies - The Department of Energy and the
Department of the Interior's Bureau of Reclamation
are currently procuring innovative treatment
technologies for EPA's removal program.
Q5. What Types Of Specifications Are Being
Used In Bid Packages For Innovative
Treatment Technologies?
A5. Design specifications precisely state how the contract is
to be performed. Performance specifications as defined in this
fact sheet specify the technology to be used and set goals to
attain, but allow flexibility in design. Performance
specifications work best in the procurement of innovative
technologies. Since performance specifications specify the
cleanup goals without specifying exactly how the site is to be
cleaned up, EPA has to pay only for what is cleaned up to these
performance standards. Also,if problems arise during contract
administration, the contractor's performance can be measured
against these standards, which facilitates documentation of
any problems. Performance specifications are especially
good to use when dealing with proprietary processes and/or
materials, because corporations will not have to release their
proprietary designs. An exception might be where a region is
concerned aboutthe by-products of treatmentwithatechnology.
Q6. What Are The Advantages/Disadvantages
Associated With Site Specific Contracts?
A6. Under a site specific contract, EPA procures the work on
a site directly from a contractor: Many OSCs who have
procuredinnovativetechnologies recommend usingsite specific
contracts. The goal of these contracts is to obtain the least cost
for the government in those situations where the time for
competition is available. While site specific contracts require
more work up front by EPA, they are favored because EPA can
exercise greater control over the award and administration of
the removal responsecontract. In addition, because the contract
is awarded competitively, costs do not have to be definitized as
under an ERCS contract and payment of an administrative fee
to the prime is also avoided.
Q7. What Are The Advantages/Disadvantages Of
Using An ERCS Contract?
A7. ERCS contracts provide emergency, time-critical, and
rapid remedial cleanup support to Superfund in containing,
recovering, or disposing of hazardous substances and in sample
analysis and site restoration. ERCS prime contractors can
perform clean-up services themselves or they can subcontract
for the clean-up of a removal site. If an ERCS contract is used,
it is up to the ERCS prime contractor to decide which portions
of the clean-up they will perform or will be performed by
subcontractors. Under ERCS, an administrative fee must be
paid to the prime contractor. In addition, costs incurred under
an ERCS contract must be definitized, which is very time
consuming.
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OS. Can A Bid Protest Stop Work At A Removal
SKe? I
A8. A bid protest cannot stop work at a removal site. The
Federal Acquisition Regulations state that in an emergency
situation, it is allowable to continue with the procurement
processevenifthereisabidprotest. However, an investigation
into the bid protest must continue. j
i
Q9. What Contract Clauses Or Requirements In j
The RFP/IFB Have Been Used To Facilitate :
Tho Procurement Of An Innovative Treatment
Technology?
i
A9. To facilitate the procurement of innovative technologies!
the following contract clauses have been used: j
• Contract clauses which indicate that the contract can bei
terminated for convenience if the contractor's pilot test
fails;
• Contract clauses which include optional years and high
enough ceilings in service contracts in order to clean-up
all of the waste that could possibly be found at a site; and
• Payments clauses which allow contractors to receive
payment as the work progresses based on the amount of
work completed. i
i
In addition, several KFPsflFBs required a demonstration that i
thetechnology would be effective at the site. This has resulted j
in bidders performing treatability studies at their own expense!
prior to bidding on the site. |
Often IFBs and RFPs will include special requirements, such
as treatability variances. All standards that the contractor must
meet should be set out in the contract. It is essential that the
EPA CO and the OSC both review the DFB/RFP and the
contract to ensure that the requirements are not ambiguous
from either a contractual or a technical perspective.
Pre-awardsurveyscanbeof use in determining theresponsibility
of the low bidder or selected offerer. These surveys are
completed before the award of the contract, and are used to
determine the financial capability as well as the physical and
technical resources of the low bidder or selected offerer.
Q10. Are Subcontractors Prohibited From Being
Awarded The Construction Contract At Sites
Where They Have Performed A Treatability
Study?
A10. 48 CFR Part 1536 of the EPA Acquisition Regulations
(EPAAR) clarifies the Federal Acquisition Regulations (FAR)
Part 36.209 by stating thatsubcontractors performing treatability
studies are not prohibited from being awarded the construction
contract for a project. Other subcontractors are also not
prohibited from being awarded the construction contract for a
project unless their work substantially affected the course of
the design. Prime contractors of the design and subcontractors
whose work substantially affected the course of the design
must receive prior approval by the responsible Associate
Director of the Procurement and Contracts Management
Division under EPA'sOfficeof Administration and Resources
Management before they can be awarded the contract.
For further Information on procuring Innovative technologies, please refer to the following documents EPA
•mploytw may request document* with SPA directive Cumbers by writing to: Superfund Document Center U S
Environmental Protection Agency (OS-245), 401M Street S.W., Washington, D.C. 20460, Fax: (202) 260-2596
* U.S. EPA/QSWIER, "Furthering the Use of Innovative Treatment Technologies in OSWER Programs " EPA/
$380.0-16, Jun* 10,1&9f- - ,[, „ , , ^ ' , f „
• U.S. EPA/PCMB, «Suptrf und Guidance on the Applicability and Incorporation of the Davis Bacon Act/Service
Contract Act «nd Related Bonding," January 1992 (this document may be obtained by calling Sue Anderson
In PCMD at (202) 260417* or by mailing a request t
• U,S,EPA/OSWKR/ltO,u|rmovativ*fr«atnMhtTe^hr(ologle8: Semi-Annual Status Report," EPA/540/2-91/001
wrmannual publication:on the statusol Implementation of Innovative technologies at Superfund sites
• U.S. EPA/QERH; OWPE, "Advancing the Us» of Treatment Technologies for Superfund Remedies * EPA/
S35S.O-26, February 2^1988.. v j
« 40 CFR 35, FifWl RUto, "Cooperative Agreements and Superfund State Contracts for Superfund Response
Actions." - -' I , ' r
* 48 CFR 1536, Final Role, "EPAAR Clarification pt Applicability to Subcontractors of the FAR Provisions on
Construction Contracts with ArehfteetfEnajnearlng Firms."
^"S?er^rals.uida"ca •ndinf°"na6on Itis not intended, nor can it be relied upon, to create any rights enforceable by any
The Agency also reserves the right to change this guidance at any time without public notice.
Government Printing office : 1992 - 617-003/67050
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vvEPA
United States
Environmental Protection Agency
Office of Solid Waste and Emergency Response
Technology Innovation Office (OS-110W)
Washington, DC 20460
Official Business, Penalty for Private Use
$300
EPA/542/F-92/013
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