Superfund
vvEPA Guidance:
Procurement Under Superfund
Remedial Cooperative
Agreements
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PROCUREMENT UNDER
SUPERFUND REMEDIAL COOPERATIVE AGREEMENTS
OSWER Directive 9375.1-11
June 1988
".-.i Agency
..0^1! 1070
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Hazardous Site Control Division
Washington, D. C. 20460
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OSWER Directive 9375.1-11
NOTICE
Development of this document was funded, wholly or in part, by
the United States Environmental Protection Agency under contract
No. 68-01-7376 to Booze, Allen & Hamilton. It has been subjected
to the Agency's review process and approved for publication as an
EPA document.
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9375.1-11
FOREWORD
This document, Procurement Under Superfund Remedial
Cooperative Agreements, provides guidance on procuring services
during remedial response activities under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980
(CERCLA), or Superfund, as amended by the Superfund Amendments
and Reauthorization Act of 1986 (SARA). Specifically, it
addresses the program requirements that must be met to comply
with current regulations as published in 40 CFR Part 30,
General Regulation Under Assistance Agreements;
40 CFR Part 300, the National Oil and Hazardous Substances
Pollution Contingency Plan.
This document was originally presented as Volume II of the
State Participation in the Superfund Program manual, U.S.
Environmental Protection Agency, March 1986, OSWER Directive
Number 9375.1-5. This document has been updated to reflect the
changes brought about by CERCLA, as amended, and to address the
need for additional guidance due to increased State involvement
in the Superfund program. Revisions to this manual are minimal
except for three new appendices, which describe: the two-step
formal advertising process; minority business reporting
requirements under Superfund; and architectural/engineering
firm retention for follow-on remedial response activities.
This manual may be revised again in response to additional
modifications to EPA assistance regulations in the future.
The topics covered in this guidance include procurement
requirements; procurement of engineering services, including
types of services provided; procurement of construction
contractors; and subagreement administration. Clarification on
this guidance can be obtained from Regional EPA offices.
Additional assistance on these topics may be obtained from the
Superfund guidance documents referenced in Appendix E of this
manual.
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9375.1-11
TABLE OF CONTENTS
Section Paae
LIST OF ACRONYMS AND ABBREVIATIONS x
I. INTRODUCTION 1-1
A. SUPERFUND PROCUREMENT CONCERNS 1-1
B. ORGANIZATION OF THIS MANUAL 1-3
II. PROCUREMENT REQUIREMENTS II-l
A. REGULATIONS APPLICABLE TO PROCUREMENT. . II-2
B. FEDERAL AND STATE ROLES IN PROCUREMENT . II-2
C. PROCUREMENT SYSTEM CERTIFICATION .... II-5
D. METHODS OF PROCUREMENT 11-8
E. TYPES OF SUBAGREEMENTS II-9
E.I Fixed-Price Subagreements II-9
E.2 Cost-Plus-Fixed-Fee Subagreements . 11-11
E.3 Percentage-of-Construction Cost
Subagreements 11-11
E.4 Cost-Plus-Percentage-of-Cost
Subagreements 11-11
E.5 Other Subagreement Types 11-12
F. PROMOTING COMPETITION 11-12
G. MINORITY, WOMEN'S, SMALL, AND LABOR
SURPLUS AREA BUSINESES 11-13
H. DOCUMENTATION 11-15
I. CONFLICTS OF INTEREST AND CODE OF
CONDUCT 11-17
J. UNFAIR LABOR PRACTICES 11-20
K. COST AND PRICE ANALYSIS 11-22
K.I Cost Analysis 11-22
K.2 Price Analysis 11-22
L. PROFIT ANALYSIS 11-25
M. CONTRACTOR INDEMNIFICATION 11-25
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9375.1-11
TABLE OF CONTENTS
(Continued)
Section Page
III. PROCUREMENT OF ENGINEERING SERVICES III-l
A. GENERAL REQUIREMENTS FOR PROCURING
ENGINEERING SERVICES III-l
B. STANDARD METHOD OF COMPETITIVE
NEGOTIATION III-2
B.I Request for Proposals III-4
B.2 Evaluating Proposals III-4
B.3 Negotiation and Subagreement Award. III-5
C. OPTIONAL METHOD OF COMPETITIVE
NEGOTIATION III-5
C.I Soliciting Statements of
Qualifications III-6
C.2 Evaluating Statements of
Qualifications III-8
C.3 Soliciting and Evaluating
Proposals III-8
C.4 Negotiation and Award of
Subagreement III-9
D. EXPEDITING PROCUREMENT OF ENGINEERING
SERVICES 111-10
IV. ENGINEERING SERVICES DURING REMEDIAL
RESPONSE IV-1
A. REMEDIAL INVESTIGATION/FEASIBILITY
STUDY IV-3
B. REMEDIAL DESIGN IV-5
C. BIDDABILITY AND CONSTRUCTABILITY
REVIEW IV-6
D. BID-PHASE SERVICES IV-8
E. CONSTRUCTION OVERSIGHT SERVICES IV-9
F. CLAIMS IV-11
G. PLANNING FOR OPERATION AND MAINTENANCE
DURING REMEDIAL ACTION IV-11
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9375.1-11
TABLE OF CONTENTS
(Continued)
Section Page
V. PROCUREMENT OF CONSTRUCTION CONTRACTORS . . V-l
A. DEVELOPMENT OF COST ESTIMATES
FOR CONSTRUCTION V-3
B. PREPARATION OF SUBAGREEMENT DOCUMENTS. . V-4
B.I Subagreement Provisions V-5
B.2 Specifications V-7
B.3 Bonds and Insurance V-7
B.S.a Bonds V-7
B.3.b Insurance V-8
B.4 Payment Terms V-10
B.5 Project Control V-ll
B.6 Schedule Requirements V-12
B.7 Change Order Provisions V-13
B.8 Health and Safety Issues V-14
B.9 Subagreement Close-Out Require-
ments V-15
C. BIDDABILITY AND CONSTRUCTABILITY
REVIEW V-16
D. SOLICITATION OF BIDS V-17
E. EVALUATION OF BIDS V-18
E.I Bids Exceeding the Project
Budget V-21
E.2 Bids Significantly Less Than
the Project Budget V-24
F. BID PROTESTS V-25
G. SUBAGREEMENT AWARD V-26
VI. SUBAGREEMENT ADMINISTRATION VI-1
A. PRELIMINARY PERFORMANCE PLANNING
CONFERENCE VI-1
B. MONITORING WORK PROGRESS - PERIODIC
PROGRESS REVIEW VI-2
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9375.1-11
TABLE OF CONTENTS
(Continued)
Section Page
C. CHANGE ORDER ADMINISTRATION VI-5
C.I Conditions That Warrant a
Change Order VI-6
C.2 Evaluating Change Order Requests. . VI-8
C.3 Superfund Requirements for
Change Order Management VI-11
C.4 Change Orders Requiring
Amendments to the Superfund
Cooperative Agreement VI-12
C.5 Preparation of the Change Order . . VI-13
D. CLAIMS VI-13
D.I Causes of Claims VI-14
D.2 Claims Prevention VI-15
D.3 Types of Claims VI-16
D.4 Claims Resolution VI-18
D.5 Funding of Claims Resolution. . . . VI-19
D.6 Claims Negotiation VI-19
D.7 Settlement of Claims VI-20
APPENDICES
APPENDIX A - TWO-STEP FORMAL ADVERTISING A-l
APPENDIX B - REPORTING OF MINORITY BUSINESS UNDER
SUPERFUND ACTIVITIES B-l
APPENDIX C - RETAINING ARCHITECTURAL/ENGINEERING
FIRMS FOR FOLLOW-ON REMEDIAL RESPONSE
ACTIVITIES C-l
APPENDIX D - GLOSSARY OF TERMS D-l
APPENDIX E - REFERENCES E-l
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9375.1-11
INDEX OF EXHIBITS
Exhibit
Number Page
II-l SUMMARY OF REQUIREMENTS FOR PROCUREMENT
UNDER ASSISTANCE AGREEMENTS
(40 CFR Part 33) II-3
II-2 SUMMARY OF PROCUREMENT METHODS AND
PROCEDURES 11-10
II-3 COST AND PRICE SUMMARY (EPA Form
5700-41) 11-23
III-l STANDARD METHOD FOR PROCUREMENT OF
ENGINEERING SERVICES 111-3
II1-2 OPTIONAL METHOD FOR PROCUREMENT OF
ENGINEERING SERVICES 111-7
III-3 METHODS FOR EXPEDITING PROCUREMENT III-ll
IV-1 TYPES OF ENGINEERING SERVICES TYPICALLY
USED DURING REMEDIAL RESPONSE ACTIVITIES. . . IV-2
V-l CONSTRUCTION CONTRACTOR PROCUREMENT
PROCEDURES V-2
V-2 SAMPLE CHECKLIST OF CONSTRUCTION
SUBAGREEMENT BID DOCUMENT CONTENTS V-6
V-3 SAMPLE BID TABULATION CHECKLIST V-20
V-4 SAMPLE BID REVIEW CHECKLIST FOR
CONTRACTOR RESPONSIBILITY V-22
VI-1 SAMPLE MONTHLY PROGRESS REPORT VI-4
VI-2 SAMPLE CHECKLIST FOR STATE CHANGE
ORDER APPROVAL VI-9
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9375.1-11
LIST OF ACRONYMS AND ABBREVIATIONS
A number of acronyms and abbreviations are used
throughout the text; each is identified in the text, where
possible. To assist the reader in understanding any
acronym or abbreviation that may not be explained, and to
provide a quick reference, a list of acronyms and
abbreviations is included here.
AA Assistant Administrator
A/E Architectural/Engineering
CERCLA Comprehensive Environmental Response, Compensa-
tion, and Liability Act of 1980 (PL 96-510)
CFR Code of Federal Regulations
COE U.S. Army Corps of Engineers
EPA Environmental Protection Agency
FS Feasibility Study
FY Fiscal Year
GAD Grants Administration Division
IFB Invitation for Bids
MBE Minority Business Enterprise
NCP National Oil and Hazardous Substances Pollution
Contingency Plan (40 CFR Part 300)
NIOSH National Institute for Occupational Safety and
Health
NPL National Priorities List
OERR Office of Emergency and Remedial Response
OGC Office of General Counsel
O&M Operation and Maintenance
OMB Office of Management and Budget
ORC Office of Regional Counsel
OSDBU Office of Small and Disadvantaged Business
Utilization
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9375.1-11
OSHA Occupational Safety and Health Administration
OSWER Office of Solid Waste and Emergency Response
QAPP Quality Assurance Program Plan
RA Remedial Action or Regional Administrator
RD Remedial Design
RFP Request for Proposals
RFQ Request for Qualifications
RI Remedial Investigation
ROD Record of Decision
RPM Remedial Project Manager
SAP Sampling Analysis Plan
SARA Superfund Amendments and Reauthorization Act of
1986 (P.L. 99-499)
SEE Small Business Enterprise
SCAP Superfund Comprehensive Accomplishments Plan
SOQ Statement of Qualifications
SOW Statement of Work
USCG United States Coast Guard
WBE Women's Business Enterprise
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9375.1-11
I. INTRODUCTION
Section I04(d)(l) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (CERCLA), or Superfund, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (SARA),
authorizes the Environmental Protection Agency (EPA) to
allow a State, political subdivision thereof, or Indian
Tribe,* to conduct remedial response at a hazardous waste
site. When a State elects to manage a remedial response
at a site, it enters into a Cooperative Agreement with
EPA. A Superfund Cooperative Agreement award is the
assistance vehicle that transfers funds for response to
the State and documents both EPA and State
responsibilities for the project.
When a Cooperative Agreement is awarded, the
recipient agrees to oversee the project, to ensure that
the general assistance and Superfund program provisions of
the agreement are met, and to manage the remedial funds.
All Superfund Cooperative Agreements require recipients to
comply with the provisions of 40 CFR Part 33, Procurement
Under Assistance Agreements, as well as other general and
specific program provisions. This manual presents
guidance on this particular general assistance regulation
and its relationship to State-managed Superfund remedial
response activities.
A. SUPERFUND PROCUREMENT CONCERNS
Even if recipients fully satisfy EPA's
procurement requirements, problems may arise that can
seriously complicate or delay remedial response. Bid
protests, change orders, and claims are three major areas
of concern in the State Superfund remedial program.
*The term "State," as defined in the revised National
Contingency Plan (NCP), includes Indian tribes meeting
certain requirements who wish to be treated as States with
respect to certain provisions of CERCLA. Although the
term "State" is used throughout this document, procedures
in this guidance for procurement also are applicable to
political subdivisions and to Indian Tribes that have
entered into remedial Cooperative Agreements with EPA.
Separate guidance on Cooperative Agreements with political
subdivisions and Indian Tribes is contained in the State
Participation in the Superfund Program manual.
1-1
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9375.1-11
Bid protests are written complaints filed by a party
or parties with a direct financial interest affected by a
State's procurement action. Change orders are written
orders issued by the State (or its designated agent) to
the State's contractor, authorizing an addition to,
deletion from, or revision of a subagreement, usually
initiated at the contractor's request. Claims consist of
requests for changes submitted by the State's contractor
(e.g., additional time and/or costs) which initially have
been rejected by the State.
Bid protests, change orders, and claims are actually a
series of problems that can occur at various stages in the
procurement process. EPA, therefore, recommends that
States institute a coordinated program that addresses
these issues at the points at which they are likely to
occur. Further, EPA will offer States assistance in this
effort during remedial response; this will entail the
following:
Prevention of Bid Protests: States should
conduct a biddability/constructability review
before a construction contractor is procured.
The State may choose to conduct this review
itself, may procure the services of an
independent third party, or may request that EPA
perform the review. If EPA agrees to perform a
biddability/constructability review, it will
obtain the services of the U.S. Army Corps of
Engineers (COE).* EPA reserves the right to
perform this review, regardless of the option
selected by the State, when the Agency considers
the remedial action project to be highly complex
or when there are overriding scheduling concerns.
Management of Change Orders: The Cooperative
Agreement funding remedial construction usually
will include a construction contingency fund.
States may not approve a change order that
exceeds 20 percent of the contingency fund, nor
may they approve a change when the aggregate of
change orders exceeds 75 percent of the entire
contingency fund. To do so, they first must
obtain EPA approval, which is dependent upon
State performance of administrative and technical
reviews. These reviews will ascertain the effect
*The Agency may also utilize services of other Federal
agencies in lieu of the U.S. Army Corps of Engineers, as
needed.
1-2
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9375.1-11
that the change order(s) has on the project scope
and the availability of funds to complete the
response in the event that the change is
initiated. When a remedial response is highly
complex or when there are overriding scheduling
concerns, EPA will provide the State with
technical assistance in change order management
through the COE or will supply funds to the State
to secure the services of an independent
construction management firm.
Claims: EPA shares in the costs associated with
claims at the same percentage rate used for the
remedial action (i.e., 90/10 or at least 50/50).
Before the Agency will consider funding these
costs, however, EPA requires the State to conduct
an administrative and technical review of each
claim.
The following chapters of this manual provide more
detailed information on these subjects.
B. ORGANIZATION OF THIS MANUAL
This manual, Procurement Under Superfund Remedial
Cooperative Agreements, contains six chapters and
supplementary appendices. It is organized as follows:
Chapter I - Introduction, which explains the
rationale for the organization of this manual and
outlines EPA policies designed to assist States
in the prevention and/or resolution of certain
cost and scheduling issues
Chapter II - Regulatory Retirements, which
summarizes the requirements of 40 CFR Parts 30
and 33, EPA's regulations governing assistance
agreements and procurement under assistance
agreements, and outlines Federal and state roles
Chapter III - Procurement of Engineering
Services, which explains procurement of
architectural and engineering (A/E) services
Chapter IV - Engineering Services During Remedial
Response, which contains a detailed explanation
of the types of services an A/E firm can provide
during all phases of remedial response
1-3
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9375.1-11
Chapter V - Procurement of Construction
Contractors, which outlines the process that is
used to procure a construction firm and provides
guidance on contents of bid documents and other
requirements
Chapter VI - Subagreement Administration, which
highlights management and administration
techniques for implementation and monitoring of
work, distinguishes between change orders and
claims, and provides detailed procedures for
administering them.
Appendices to this manual contain further discusion on
selected topics pertaining to procurement, and are
organized as follows:
Appendix A - Two-Step Formal Advertising, which
describes the appropriate uses and procedures for
using the two-step method for procurement of
construction subagreements, as an alternative to
traditional formal advertising.
Appendix B - Reporting of Minority Business Under
Superfund Activities, which details the reporting
requirements of State agencies receiving
Superfund monies regarding the use of minority
contractors and efforts made to encourage
participation of minority firms in the Superfund
program.
Appendix C - Class Deviation from 40 CFR Part 33,
which summarizes the approved deviation from
public notice (Part 33.510) and evaluation
procedures (Part 33.515) requirements for
recipients of Superfund Cooperative Agreements
who wish to use the same A/E firm that provided
services during the remedial investigation
(RI)/feasibiity study (FS) phase to perform
follow-on activities.
Appendix D - Glossary of Terms, which provides a
brief explanation of key terms used in this
document.
Appendix E - References, which are grouped
according to the following activities:
Procurement-General; Procurement of
Architectural/Engineering Services; Preparation
of Contract Documents; Contract Law; Insurance
and Bonds; Negotiation/Economic Decision-Making;
Construction Management; Change Orders; Claims;
and EPA Office of Emergency and Remedial Response
Guidance.
1-4
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9375.1-11
This organization of the subject matter is intended to
provide as much background information on procurement as
possible before discussing actual procurement of A/E and
construction firms and subsequent potential complications
with the-process.
With the increasing number of remedial actions and the
concomitant award of more subagreements by States, States
must practice good procurement procedures and management
to minimize the costs of remedial response and to meet
cleanup schedules. EPA's requirements are intended to
promote competition, and to ensure that all work is
performed properly, that only reasonable and necessary
costs are incurred, and that work performed complies with
contractual and regulatory requirements. This manual
outlines EPA procurement requirements as they relate to
the Superfund program. The following chapter provides
general information on EPA procurement requirements.
1-5
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9375.1-11
II. PROCUREMENT REQUIREMENTS
This chapter briefly outlines the salient points of
EPA's regulations that apply to all procurement under
Superfund Cooperative Agreements: 40 CFR Part 300, the
National Oil and Hazardous Substances Pollution
Contingency Plan; 40 CFR Part 30, EPA's General Regulation
for Assistance Programs; and 40 CFR Part 33, Procurement
Under Assistance Agreements.* The chapter also addresses
specific procurement topics:
Federal and State roles in procurement
Procurement system certification
Methods available for procuring assistance
Methods for promoting competition
Types of subagreements
Minority, women's, small, and labor surplus area
businesses
Document retention requirements for subagreements
Conflicts of interest and code of conduct
Avoidance of unfair labor practices
Cost and price analysis
Profit analysis.
States may elect to have EPA conduct response
activities at a site. Under Federal-lead response
agreements, EPA requires States to pay cash to meet
their cost-sharing obligations for remedial activities
under a Superfund State Contract. If a State elects
to contribute services as part of its cost-sharing
obligation at a Federal-lead site, they must first
enter into a Cooperative Agreement with EPA. If a
State exercises this option, it must comply with the
provisions of 40 CFR Parts 30 and 33.
II-l
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9375.1-11
These are addressed in the following sections and apply to
procurement of both engineering services and construction
contractors.
A. REGULATIONS APPLICABLE TO PROCUREMENT
A State must meet the requirements of several EPA
regulations when implementing an executed Superfund
Cooperative Agreement. These include the following:
National Oil and Hazardous Substances Pollution
Contingency Plan (NCP) (40 CFR Part 300),
General Regulation for Assistance Programs (40
CFR Part 30)
Procurement Under Assistance Agreements (40 CFR
Part 33).
In addition, specific provisions of other regulations, as
they affect those cited above, apply (e.g., 40 CFR Part
32, Debarment and Suspension). The State also must
consider the applicability of other State and Federal
environmental and public health statutes, depending on
conditions at the site and the cleanup approach to be
taken.
Procurement Under Assistance Agreements, 40 CFR Part
33, is EPA's regulation governing procurement of supplies,
services, and construction by assistance recipients, and,
therefore, applies to States entering into Superfund
Cooperative Agreements with EPA. Key points of this
regulation are summarized in Exhibit II-l on the following
page. Under this regulation, a State may use its own
procurement policies and procedures when conducting
procurements using EPA funds if the State first certifies
that its system fulfills the intent of 40 CFR Part 33. If
the State's procurement policies and procedures do not
meet all EPA requirements, the State must use the
procedures set forth in the regulation, must follow the
requirements in 40 CFR Part 33, Appendix A, and must allow
EPA pre-award review of all proposed procurement actions
that will use EPA funds.
B. FEDERAL AND STATE ROLES IN PROCUREMENT
As previously stated, a Superfund Cooperative
Agreement is the mechanism used to document EPA and State
responsibilities and assurances concerning a remedial
response project. The provisions that are incorporated
into Superfund Cooperative Agreements to delineate these
responsibilities are discussed in the State Participation
II-2
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9375.1-11
in the Superfund Program manual. EPA's role during
implementation of the Agreement is one of oversight to
ensure that the State complies with applicable statutes,
regulations, and policies. The Agency also ensures that
work conducted under the Cooperative Agreement meets the
requirements for implementing any enforcement or cost
recovery actions and that the State uses the obligated
remedial funds for approved tasks.
The State is responsible for resolving all
subagreement and administrative issues associated with
procurements under the Cooperative Agreement, since EPA is
not a party to any subagreements (40 CFR 33.245). The
State may award subagreements under the Cooperative
Agreement only to responsible contractors, as defined by
40 CFR 33.220, and the State must ensure that these
contractors perform in accordance with all provisions of
the subagreements (40 CFR 33.210(a) and (b)). In
enforcing provisions of such subagreements, the State may
request technical and legal assistance from EPA, but EPA
is not responsible for enforcing subagreement provisions
(40 CFR 33.210(g» .
EPA may offer States technical assistance and respond
to requests from States for technical assistance related
to the implementation of 40 CFR Part 33. EPA technical
assistance for remedial response may include:
Recommendations on qualified offers and
acceptable proposals based on published
evaluation criteria. EPA's technical assistance
should not be used to evaluate price or
contractor responsibility. Although EPA may use
its own contractors to provide some types of
technical assistance, any support related to
procuring a State contractor must be provided by
Federal employees, not EPA contractor staff.
Recommendations, either directly or through the
U.S. Army Corps of Engineers (COE), on bids for
remedial action (RA) in accordance with the
methods and criteria in the bidding documents.
EPA's technical assistance should not, however,
be used to determine contractor responsibility.
All work assignments that could result in a perception
that the EPA contractors are either making or unduly
influencing EPA recommendations or State decisions must be
avoided. Contractor personnel must not be used to assist
in reviewing technical proposals. This will avoid the
perception that EPA contractors are influencing the
II-4
-------
9375.1-11
selection of other contractors. Further, it avoids the
problem of allowing EPA contractors the opportunity to
review technical proposals submitted by their competitors.
EPA staff providing such technical assistance:
Shall constitute a minority of the selection
panel (limited to making recommendations on
qualified offers and acceptable proposals based
on published evaluation criteria) for the
contractor selection process
Must have fulfilled the training experience and
workload limitation requirements in the EPA
Contracts Management Manual
Are not permitted to participate in the
negotiation and award of subagreements
Are not permitted to use EPA contracts to provide
any support related to procuring a State
contractor
Can use the COE for review of State bidding
documents, requests for proposals/ and bids and
proposals received.
In these ways, EPA staff ensure that the Agency's role
remains one of oversight and assistance, but that States
maintain responsibility for implementing activities under
40 CFR Part 33.
C. PROCUREMENT SYSTEM CERTIFICATION
States should develop their own procurement procedures
and policies to satisfy the minimum requirements of 40 CFR
Part 33, and to certify their procurement procedures to
EPA in accordance with 40 CFR Part 33, Subpart A. If the
State does not have a procurement system that meets the
minimum requirements of 40 CFR Part 33, the State must
follow the requirements in EPA's regulation and give the
Agency the opportunity to review all proposed
subagreements and associated procurement actions prior to
subagreement award (40 CFR 33.110(b)(2)). States that
provide certification will not receive this level of
procurement oversight by EPA; however, EPA reserves the
right to review any State procurement action funded wholly
or in part by EPA. (Additional information on procurement
system certification can be found in the State
Participation in the Superfund Program manual.)
II-5
-------
9375.1-11
States are encouraged to seek advice from EPA at any
stage of any procurement action. EPA staff members are
experienced in the technical, legal, and administrative
aspects of procurement under Superfund and can constitute
an invaluable resource to States. States should consult
with EPA legal staff members prior to awarding
subagreements that any party may potentially construe as
controversial and that eventually may result in a protest
of the procurement action. This will mitigate the
possibility of a successful bid protest being lodged.
EPA may review the award of subagreements procured
under a Cooperative Agreement when States do not certify
their procurement systems (40 CFR Part 33, Subpart A), and
may exercise this authority for complex remedial
activities even if a State is self-certified. In either
case, EPA's oversight of a procurement action will include:
A review of the State's award recommendation for
adequate evidence of the selected engineer's or
construction contractor's capability to perform
the work properly
A review of the State's compliance with
guidelines for using minority (MBEs) and women's
business enterprises (WBEs)
Obtaining evidence from the State that the public
solicitation process conforms with Federal,
State, and local procurement regulations
Obtaining evidence from the State that all
solicitation and/or bidding disputes have been
resolved, or obtaining details of any unresolved
disputes.
If a State has not certified its procurement system, the
State must submit the offer or the tabulation of bid
results before awarding the subagreement. EPA may review
both the bid tabulation and the State's selection
procedures. EPA also may choose to exercise this
authority for complex remedial activities when States are
self-certified.
Even if a State certifies its procurement system, EPA
retains the authority to perform any of the following
activities:
II-6
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9375.1-11
Receive all bids or offer tabulations after award
and notify the EPA Award Official of all
construction subagreement awards over $10,000*
(40 CFR 33.211)
Authorize and approve noncompetitive awards under
40 CFR 33.605(d)
Authorize the use of innovative procurement
methods (40 CFR 33.210(h))
Approve the use of a procurement method other
than formal advertising for Superfund remedial
action construction awards (40 CFR 33.910)
Resolve bid protest appeals (40 CFR 33,
Subpart G).
EPA also reserves the right to review a State's certified
procurement system or procurement actions under an
assistance agreement. If EPA determines that the State is
not following procurement procedures as certified, EPA
will revoke the State's certification and will require it
to follow the procedures of 40 CFR Part 33, including
Appendix A; further, EPA may impose sanctions as detailed
in 40 CFR Part 30, including termination of the
Cooperative Agreement. States are cautioned to evaluate
their procurement systems carefully prior to
self-certification to ensure that they fully comply with
40 CFR Part 33.
A State must certify its system to EPA only once every
two years unless the assistance agreement specifies a
longer project period. If the State has previously
provided its required certification, a responsible
official must complete Part A of the Certification Form,
EPA Form 5700-48, indicating the month and year in which
this certification was submitted.
The $10,000 limit for small purchases will be raised
to $25,000 for Cooperative Agreements awarded on or
after October 1, 1988, pursuant to 53 F.R. 8034
(March 11, 1988).
II-7
-------
9375.1-11
D. METHODS OF PROCUREMENT
Under 40 CFR Part 33, States must award subagreements
using the appropriate method from those outlined below:
Formal advertising (40 CFR 33.405-33.430)/ which
requires/ at a minimum, that all of the following
conditions be met:
A complete, adequate, and realistic
specification or purchase description of
what is required
Two or more responsible bidders who are
willing and able to compete effectively for
the recipient's business
A procurement that lends itself to the award
of a fixed-price subagreement
The selection of the successful bidder be
made principally on the basis of price (40
CFR 33.405(b».
Competitive negotiation, the requirements for
which are defined in 40 CFR 33.505-33.525. This
method may be used only if conditions are not
appropriate for formal advertising. (Optional
selection procedures for architectural and
engineering (A/E) firms are described in 40 CFR
33.525.)
Small purchase, which may be used only for
procurement actions not exceeding $10,000,
following procedures described in 40 CFR
33.305-33.315.
Noncompetitive negotiation, the procedures for
which are described in 40 CFR 33.605 and are used
only if the other three procurement methods are
inappropriate due to the specified reasons.
A State may use procurement methods or procedures
other than those specified only if it first obtains
written approval from the EPA Award Official. A State may
not use a method other than formal advertising, however,
to procure construction contractors during remedial action
unless it has first obtained concurrence from the EPA
Award Official. (This requirement does not apply to A/E
services during remedial action.) Formal advertising
cannot be waived in the Superfund remedial program on the
basis of a claimed emergency situation, since EPA handles
II-8
-------
9375.1-11
Superfund emergencies under the removal rather than the
remedial program. Furthermore, a declaration of an
emergency under State law does not necessarily constitute
an emergency under the EPA Superfund program's criteria.
When complete, adequate, and realistic specifications
of what is required are not available, an alternate type
of formal advertising may be used, called the two-step
formal advertising method. The requirements for this
method are described in Chapter V and in Appendix A.
A summary table of the primary procurement methods and
procedures is presented in Exhibit II-2, on the following
page.
E. TYPES OF SUBAGREEMENTS
There are several types of subagreements possible
under EPA assistance awards. For the Superfund program,
EPA regulations and procedures specify that some
subagreement types are preferable in certain instances,
while some are not allowed. This section outlines these
subagreements and provides information on their use. In
addition to following these guidelines, States must ensure
that all subcontracts awarded by a contractor comply with
40 CFR 33.295, "Subagreements Awarded by a Contractor."
E.I Fixed-Price Subaqreements
Under a fixed-price (lump sum, unit price, or a
combination of the two) subagreement, the State and its
contractor agree upon a price for the supplies, services,
or construction to be provided. This price, then, is
fixed no matter what the final costs of the project are.
The total cost to the State is changed only if a change
order is negotiated.
A fixed-price subagreement is awarded in instances
when a project scope of work can be defined precisely,
such as in the procurement of construction contractors
using bidding documents that include construction drawings
and specifications. A fixed-price subagreement also may
be negotiated for services whose scope can be defined
clearly. For other than construction, however, this type
of subagreement is used less frequently than the
cost-plus-fixed-fee type (discussed below), primarily due
to the difficulty inherent in defining the scope and
limitations of the work to be performed under a
cost-plus-fixed-fee subagreement. Where a fixed-price
subagreement is found to be appropriate, it is the easiest
type to administer.
II-9
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9375.1-11
E.2 Cost-Plus-Fixed-Fee Subagreements
The cost-plus-fixed-fee subagreement is the type most
commonly used for obtaining services other than
construction on Federally assisted projects.
Cost-plus-fixed-fee subagreements most often are used when
it is difficult to define accurately and clearly the scope
and extent of the work to be performed.
With a cost-plus-fixed-fee subagreement, both a cost
ceiling, made up of direct and indirect costs for the
project, and a fixed contractor fee for the work are
established. The State then pays only for the costs of
the work performed, plus the fixed fee. For example, if
the cost ceiling is negotiated at $200, ($100 direct costs
and $100 indirect costs) and the fixed fee is $30, the
State would pay $230 for the project. If the actual
project costs are $80 direct costs and $80 indirect costs,
however, the State would pay $190 for the project (actual
direct and indirect costs plus the full fixed fee of $30).
On the other hand, if project costs are expected to
exceed the agreed-upon ceiling, the contractor must so
inform the State. The State either can complete the
original subagreement after approving the increased cost
ceiling, if increases are found to be justified, or can
terminate the subagreement. For projects where costs are
expected to exceed the ceiling, the contractor is not
required to incur costs in excess of the ceiling, nor to
complete the project as negotiated unless the State first
negotiates and authorizes a new cost ceiling. The
contractor does not receive an increased fee for projects
where increased costs are for additional work within the
original scope of services. If the additional work is
beyond the scope of the original subagreement and the
contractor is authorized to implement that work, the
contractor may claim an additional fee.
E.3 Percentage-of-Construction-Cost Subaareements
Used many years ago, this type of subagreement
established the price of a project as a percentage of the
construction costs. It is not allowed when Federal funds
are involved in a project.
E.4 Cost-Plus-Percentaae-of-Cost Subaoreements
This type of contract applies a multiplier, including
a profit, to direct costs of a project to determine total
costs. It is not acceptable when EPA funds are involved
in a project.
11-11
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9375.1-11
E.5 Other Subaareetnent Types
Other types of subagreements exist. Some are
acceptable for use on EPA-assisted activities/ some are
less desirable. States employing firms that have
previously performed EPA-assisted work, particularly under
the CERCLA program, should request assistance from their
contractors in determining appropriate subagreement types;
such firms should be familiar with acceptable forms of
subagreements. States also may contact the EPA Regional
office to answer questions concerning forms of
subagreements.
F. PROMOTING COMPETITION
EPA procurement regulations prohibit the use of
practices that unduly restrict or eliminate competition
(40 CFR 33.230). Examples of practices that are
considered unduly restrictive include:
Noncompetitive practices between firms
Organizational conflicts of interest
Unnecessary experience and bonding requirements
State or local laws, ordinances, regulations, or
procedures that give local or in-State bidders or
proposers preference over other bidders or
proposers in evaluating bids or proposals
Placing unreasonable requirements on firms in
order for them to qualify to do business
Unduly restrictive specifications as described by
40 CFR 33.255.
Under the Superfund program, States must take
appropriate actions to promote competition. These include:
Publishing solicitations in daily newspapers with
significant (Statewide) circulation and in trade
publications (e.g., Engineering News Record,
Public Works Magazine, Consulting Engineer
Magazine) with regional and national circulation
Encouraging participation by MBEs, WBEs, and
small and labor surplus area businesses by
including qualified firms on solicitation lists
and by regular notification of Federal, State,
and local agencies that promote the interests of
these businesses
11-12
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9375.1-11
Providing adequate time between the date of the
solicitation and the date on which proposals or
bids will be accepted (for engineering services,
this is usually four to six weeks; for
construction projects/ this is usually four to
eight weeks/ depending on the subagreement size
and complexity)
Developing, implementing/ and publishing model
codes of procurement to provide a consistent
basis for obtaining A/E services and construction
contractors
Developing and publishing model codes of ethics
to be honored by the State employees who are
involved in the procurement process
Developing accurate and complete requests for
qualifications and/or proposals and bidding
documents to be used in obtaining A/E services
and construction contractors
Refraining from noncompetitive (sole-source)
procurement, except in instances where an item or
service is available only from a single source,
an emergency requires immediate action/
competition is not adequate (see 40 CFR
33.605(c)), or EPA approval is granted
Not using construction specifications which are
proprietary/ exclusionary, or discriminatory in
nature
Whenever possible, using performance
specifications for equipment and materials based
upon accepted, nationally known standards.
Additional actions States may take are maintaining lists
of qualified offerers and bidders who may be sent direct
solicitations to perform A/E services and construction,
and providing trade associations, engineering
organizations, plan reading rooms, etc., with copies of
solicitations, requests for proposals, or other bidding
information.
G. MINORITY. WOMEN'S. SMALL. AND LABOR SURPLUS AREA
BUSINESSES
As specified in EPA's procurement regulation, States
procuring services under EPA assistance agreements must
take the following six affirmative steps to ensure that
MBEs, WBEs/ and small businesses are used whenever
11-13
-------
9375.1-11
possible as sources of supplies, construction, and
services (40 CFR 33.240):
Place qualified MBEs, WBEs, and small businesses
on solicitation lists
Assure that MBEs, WBEs, and small businesses are
solicited whenever they are potential sources
Divide remedial response tasks into separate
subagreements, when economically feasible, to
permit maximum participation by MBEs, WBEs, and
small businesses
Establish delivery schedules, where the
requirements of the work permit, that encourage
competition by MBEs, WBEs, and small businesses
Use the services and assistance of the Department
of Labor, the Small Business Administration, and
the Office of Minority Business Enterprise of the
U.S. Department of Commerce
Require prime contractors to take the above steps
if they subcontract and to document that they
have fulfilled these steps.
States are encouraged to engage labor surplus area
businesses in Superfund work by using the steps outlined
above and to advertise procurement actions in MBE, WBE,
and small business publications. States also must
maintain records on participation by MBEs, WBEs, and small
businesses.
Further, for MBEs and WBEs, but not for small
businesses, EPA requires all assistance recipients to
report on their utilization of such firms by submitting
Department of Commerce Standard Form 334, "MBE/WBE
Utilization Under Federal Grants, Cooperative Agreements,
and Other Financial Assistance" within one month after the
end of each Federal fiscal quarter. This form must be
submitted regardless of whether the recipient awards a
subagreement during a particular Federal fiscal quarter.
Recipients must comply with this reporting requirement
after they award their first subagreement and until they
and their contractors have awarded their last subagreement
for the activities or tasks identified in the assistance
agreement.
Section 105(f) of CERCLA, as amended, requires that
EPA report annually to Congress on minority subagreements
for response activities. Regions must collect these data
11-14
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9375.1-11
using information obtained from assistance recipients for
inclusion in the Annual Report on Superfund prepared for
Congress. The Regional MBE/WBE coordinator can provide
additional guidance on MBE/WBE reporting requirements.
(See Appendix B for additional information on these
requirements.)
Each EPA program is required to establish an annual
"fair share" objective for MBE and WBE utilization. To
this end, each Region is requested to negotiate a fair
share agreement with each State within its jurisdiction.
When a Superfund Cooperative Agreement is awarded to a
State with which a "fair share" agreement has not been
negotiated, the recipient must agree that it will not
award any subagreements under the Superfund Cooperative
Agreement until it has negotiated a fair share objective
with EPA.
Generally, it is not necessary to negotiate an MBE/WBE
fair share for each assistance agreement. When a dollar
objective is agreed upon for a specific Superfund
Cooperative Agreement, however, that dollar objective
should be stated specifically in the MBE/WBE reporting
provision of the Cooperative Agreement.
Additional details on utilizing MBEs and WBEs for
Superfund State-lead remedial response, and a provision on
the subject to incorporate into Superfund Cooperative
Agreement applications, are found in the State
Participation in the Superfund Program manual.
H. DOCUMENTATION
States must maintain detailed documentation on all
procurement actions in accordance with relevant and
applicable sections of 40 CFR Parts 30 and 33 and existing
EPA guidance and administrative manuals. Such
documentation includes:
Basis for contractor screening and selection (40
CFR 33.250)
Justification for the procurement method used (40
CFR 33.250)
Justification for any specification or
requirement that does not encourage free and open
competition (40 CFR 33.250)
Justification for the type of subagreement to be
awarded (40 CFR 33.250)
11-15
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9375.1-11
Evidence of advertising (40 CFR 33.250)
Evidence of solicitation of small, minority, and
disadvantaged business enterprises (40 CFR 33.240)
Actual bids submitted (40 CFR 33.250)
Basis of award, including a copy of the cost or
price analysis and documentation of negotiations
(40 CFR 33.250)
Basis and justification for rejection of any or
all bids (40 CFR 33.250)
Bid tabulations (40 CFR 33.275)
Payment files, including envelopes in which
invoices were received (40 CFR 30.500(b))
Thorough documentation of all project costs for
possible cost recovery action (40 CFR 30.500);
for multi-site Cooperative Agreements, costs need
to be accounted for by site as well as by
assistance agreement number, and by the following
remedial activities:
Remedial investigation/feasibility study
Remedial design
Remedial action
Operation and maintenance
Protest files (40 CFR Part 33, Subpart G)
Contracting documents, including the
subagreement, work orders, change orders, and
related documentation
Records pertaining to subcontractors used by the
prime contractors (40 CFR 30.500(b))
Correspondence
Logs of telephone and personal conversations
Minutes of meetings, including pre-bid
conferences, bid openings, and consultant
interviews
Technical and financial progress reports (40 CFR
30.505)
11-16
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9375.1-11
Records for claims, disputes, and noncompliance
actions (40 CFR 30.500(b))
Other technical documentation such as site visit
reports and any other matters of consequence
relevant to the project, its funding, design, or
performance.
Specific details on document retention and regulatory
references may be found in the State Participation in the
Superfund Program manual. As a general policy, States
should document in writing any other matters that have to
do with procurement and should maintain such records for
review during Federal audit. These records will enable
the State to prove that all Federal and State requirements
have been met in conducting the procurement action for the
remedial response.
The State's contractors must maintain records
pertinent to the project (40 CFR 30.500(b)), including:
Bid records
Subagreement documents
Work orders received
Change orders and supporting records
Progress reports
Payment vouchers
Stop-work orders
Claims and disputes, with complete back-up
evidence.
The State's prime contractors also must maintain such
records for all subcontractors used on the project.
I. CONFLICTS OF INTEREST AND CODE OF CONDUCT
States must conduct all procurement actions in a
manner above reproach, with complete impartiality, and
with preferential treatment to none. This means that no
State employee may solicit or accept any gratuities,
gifts, favors, loans, or anything of monetary value from
anyone who has obtained, is obtaining, or may possibly
seek to obtain subagreements from the State; from anyone
who conducts activities that are regulated by the
employee's State agency; or from anyone who has interests
that may be substantially affected by the performance or
nonperformance of the employee's duties. States must
avoid conflicts in which a State employee has a share in,
or in any manner may possibly benefit from, any
subagreements under State administration.
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9375.1-11
In addition, States must take steps to avoid
organizational conflicts of interest in Superfund
procurement actions. An organizational conflict of
interest exists when the nature of the work to be
performed under a subagreement may result in an unfair
competitive advantage to a contractor or may impair the
contractor's objectivity in performing the work. Examples
of organizational conflicts include the following:
A contractor who provides engineering and/or
other technical direction for a system/ who
determines the system's basic concept, and who
supervises its execution by other contractors
should not be in a position to favor his/her own
products or capabilities
A contractor who prepares specifications covering
items to be used in a competitive acquisition
should not be allowed to furnish these items,
either as a prime contractor or as a subcontractor
A contractor who gains access to proprietary
information should agree to protect against
unauthorized use or disclosure of the information
and should refrain from using the information for
any purpose other than that for which it is
intended
A contractor who obtains a subagreement to
perform a remedial response action under which it
would be paid to clean up a site for which it
ultimately could be found liable for the original
hazard
A contractor who, when performing a remedial
response action, discovers evidence establishing
its own liability for the site.
The various steps that a State may take to ensure against
such situations are described below.
EPA's policy is to prevent personal or organizational
conflicts of interest or the appearance of such conflicts
of interest in the award and administration of EPA
assistance, including subagreements (40 CFR 30.613). To
prevent this, EPA's procurement regulation requires that
States maintain a written code or standard of conduct to
govern the performance of its employees engaged in the
award and/or administration of subagreements supported by
Superfund (40 CFR 33.270). This code must provide that no
State employee shall participate in the selection, award,
or administration of a subagreement supported by Superfund
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9375.1-11
if a real or apparent conflict of interest exists. Such a
conflict would arise when any State employee, any member
of a State employee's immediate family, or any partner of
the employee, has a financial or other interest in the
firm selected for the award; a conflict also would arise
if an organization which may receive or has received a
subagreement hires the State employee or any immediate
family member or partner of the employee. While State
employees may neither solicit nor accept gratuities,
favors, nor anything of monetary value from contractors,
States may set rules to determine situations where
financial interest is not considered to be substantial or
a gift is an unsolicited item of nominal intrinsic value.
At a minimum, States also must incorporate the
following provisions, or their equivalents, into all
subagreements awarded using Superfund monies (to be
included in revisions to 40 CFR 33.1030):
The contractor shall not provide data generated
or otherwise obtained in the performance of his
responsibilities under a subagreement to any
party other than State or Federal agencies and
their authorized agents.
The contractor shall not accept employment from
any party other than State or Federal agencies
for work directly related to the site(s) covered
under a subagreement for a period of three years
from termination of the subagreement, or until
any cost recovery action related to the site(s)
is completed, whichever is longer, unless he has
received a written release from this restriction
from the contracting State agency, which includes
an EPA concurrence.
The contractor shall provide witnesses and
documentation of activities performed and costs
incurred under a subagreement upon request to
State or Federal agencies during the period of
three years from termination of the subagreement,
or until any cost recovery action related to the
site(s) is completed, whichever is longer. The
contractor shall be entitled to fair and just
compensation for any such activities performed.
The contractor agrees to notify the contracting
officer of any actual, apparent, or potential
conflict of interest with regard to any
individual working on a work assignment or having
access to information regarding the
subagreement. Notification of any conflict of
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9375.1-11
interest shall include both organizational
conflicts of interest and personal conflicts of
interest (which are defined as the same types of
relationships as organizational conflicts of
interest, but applicable to an individual). In
the event that a personal conflict of interest
exists, the individual who is affected shall be
disqualified from taking part in any way in the
performance of the assigned work that created the
conflict of interest situation.
Although States must require contractors to comply with
these provisions at a minimum, States may choose to
include additional or more stringent conflict-of-interest
statements in their subagreements.
In some instances, construction contractors who are
Potentially Responsible Parties (PRPs) at a site may have
conflicts of interest that would prevent them from serving
the best interest of the State and/or the Federal
government. To protect the interests of the State and
Federal governments under such circumstances, the State
must include appropriate language in the bid solicitation
requiring potential contractors to provide information on
their status, and that of their parent companies,
affiliates, and subcontractors as PRPs at the site. The
potential contractors must be required to certify that
they have disclosed such information or that no such
information exists, and that any such information
discovered after submission of their bids, proposals or
the contract award will be disclosed immediately.
Prior to contract award, the State must evaluate
information provided by the potential contractor and
subcontractors and determine that they do not have
conflicts of interest, which in the EPA's opinion might
impair their performance. In the event that a member of
the low bidder contract team might have such a conflict,
the bid may be declared nonresponsible in accordance with
appropriate acquisition regulations and the contract
awarded to the next eligible low bidder.
J. UNFAIR LABOR PRACTICES
Unfair labor practices are illegal and prohibited
under Superfund. Examples of unfair labor practices
include kickbacks from subagreement award and antitrust
violations.
Kickbacks are payments made to influence the award of
subagreements. The principal deterrent to kickbacks is
the Anti-Kickback Act (41 U.S.C. 51-54), which:
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9375.1-11
Prohibits payments by, or on behalf of, a
subcontractor in any tier under any Federally
funded, negotiated subagreement, as an inducement
to award a subcontract
Provides for recovery of payments by court action
or by withholding compensation otherwise due the
subcontractor
Imposes criminal penalties on any person who
knowingly makes or receives such payments.
Antitrust laws are intended to ensure that markets
operate competitively; violations of antitrust laws
include:
The existence of industry price lists or price
agreements
Simultaneous price increases or
"follow-the-leader" pricing
Rotation of bids or proposals so that each
competitor takes a turn in the sequence as low
bidder, or so that certain competitors bid low
only on some sizes of subagreements and high on
others
Division of the market so that certain
competitors bid low only for subagreements in
certain geographical areas or on certain
projects, and bid high on other projects
Establishment by competitors of a collusive
pricing system
The filing of a joint bid or offer by two or more
competitors when at least one of the competitors
has sufficient technical capability and
productive capacity for subagreement performance
Any evidence of direct collusion among
competitors, such as the appearance of identical
calculations or spelling errors in two or more
bids or offers.
Each contractor must include in its bid or proposal a
certification of independent price determination. This
document certifies that no collusion, as defined by
Federal and State antitrust laws, occurred during bid
preparation. In addition, the State may terminate a
subagreement if it is discovered that a person or agency
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9375.1-11
was employed or retained by the contractor solely to
secure the subagreement for a commission, percentage,
brokerage, or contingent fee. The State also may
terminate the subagreement if the contractor, by offering
or giving gratuities (in the form of entertainment, gifts,
or otherwise), tries to elicit from any employee of the
State or EPA aid in obtaining favorable treatment.
K. COST AND PRICE ANALYSIS
States must conduct a cost or price analysis, as
appropriate, on every procurement action, including change
orders to existing subagreements. Where the State
conducts a cost or price analysis, contractors and
subcontractors must submit supporting data to the State.
This information may be provided on EPA Form 5700-41,
"Cost and Price Summary" (see Exhibit II-3, on the
following pages). This report may also be made in another
format that provides similar information.
This section provides a further discussion of cost and
price analyses.
K.1 Cost Analysis
The State must conduct a cost analysis on all
negotiated subagreements estimated to exceed $10,000, and
on all negotiated change orders regardless of cost (40 CFR
33.290). A cost analysis is defined as the review and
evaluation of each cost element to determine the
reasonableness, allocability, and allowability of the
cost. This evaluation includes a comparison of the
offerer's current cost estimates with: costs previously
incurred by the offeror, the offerer's last prior cost
estimate for similar items, current cost estimates from
the State or other sources, and prior estimates of
historical costs from other contractors for the same or
similar items.
K.2 Price Analysis
A price analysis is required an all formally
advertised procurements estimated to exceed $10,000 if
there are fewer than three bidders. If there are three or
more bidders on a formally advertised procurement, the
State can assume, unless evidence demonstrates otherwise,
that adequate price competition has taken place.
A price analysis is the process of evaluating a
contractor's prospective price for a project, without
regard to the contractor's separate cost elements and
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EXHIBIT II-3
COST AND PRICE SUMMARY
9375.1-11
A -DA COST OR PRICE SUMMARY SS^'SSSooM
& C r M ($M fccomotnving instructions b»fort completing this form! Appro** »*i*r»t 10-31-86
PANT 1 - GENERAL
1 RECIPIENT 2. ASSISTANCE IDENTIFICATION NO
3. NAME OF CONTRACTOR OH SUBCONTRACTOR 4 DATE OF PROPOSAL
S ADDRESS OF CONTRACTOR OR SUBCONTRACTOR (Ineludf ZIP Cadtl
TELEPHONE NUMBER V//te/ud» Art* Cod»>
TYPE OF SERVICE TO BE FURNISHED
PART II - COST SUMMARY
7 DIRECT LABOR fSpttiff Itttr cM*#arx«
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EPA Form 6700-41 (R«v. 4-B4) Previous dmon* may b« uMd until luppliM ir* «h»utt»d.
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9375.1-11
EXHIBIT
II-3 (Continued)
PART til - PRICE SUMMARY
13 COMPETITOR'S CATALOG LISTINGS. IN-HOUSE ESTIMATES. PRIOR QUOTES MARKf
llndicM bttit for pricf compinson) PRICE)
PART IV - CERTIFICATION*
14
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CONTRACTOR
:T PROPOSED
5) PRICE
»
HAS A FEDERAL AGENCY OR A FEDERALLY CERTIFIED STATE OR LOCAL AGENCY PERFORMED ANY REVIEW OF YOUR ACCOUNTS OR
LJ YES 1 1 NO fit "Yft" givt n*mt. tddrm. ind re/ep/io/ie numbtr of rtviewing oHic*
THIS SUMMARY CONFORMS WITH THE FOLLOWING COST PRINCIPLES
This proposal is submitted for use in connection with and in response to
in
This is to certify to the best of my knowledge and belief that the cost and pricing dels summarized herein
complete, current, and accurate as of
are 12) DATE
1 further certify that a financial management capability exitti to fully end accurately account for the financtel transactions under this
project 1 further certify that 1 understand that the subagreement price may be subject to downward renegotiation end/or recoupment
where the above colt and pricing date heve been determined, es a result of audit, not to have been complete, current, and accurate as of the
date above
(31 TITLE OF PROPOSER SIGNATURE OF REVIEWER
15
RECIPIENT REVIEWER
DATE OF EXECUTION
1 certify that 1 have reviewed the cost/price summery set forth herein and the proposed costs/ price appear acceptable for subegreement
award.
f3> TITLE OF PROPOSER SIGNATURE OF REVIEWER
16.
EPA REVIEWER
(31 TITLE OF PROPOSER SIGNATURE OF REVIEWER
DATE OF EXECUTION
DATE OF EXECUTION
EPA Form 6700-41 (Rev. 4-84)
Pege 2 of 5
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9375.1-11
proposed profit. Price analysis determines the
reasonableness of the proposed subagreement price based on
adequate price competition, previous experience with
similar work, established catalog or market price, and law
or regulation.
L. PROFIT ANALYSIS
The State must ensure that it pays only a fair and
reasonable profit to its contractors. In a procurement
action where there is no competition (e.g., a change
order) and where price is based on a cost analysis (e.g.,
competitive and noncompetitive negotiation), the State
must negotiate profit as a separate element of cost. To
determine a reasonable profit, the State must consider the
complexity of the work to be performed, the risk borne by
the contractor, the contractor's investment, the level of
subcontracting, the contractor's past performance record,
and industry profit rates in the surrounding geographical
area for similar work.
M. CONTRACTOR INDEMNIFICATION
Section 119 of CERCLA, as amended, authorizes the
Federal government to indemnify response contractors for
liability related to damage from releases of hazardous
substances arising out of the contractor's negligent
performance when adequate pollution liability insurance is
not available to the contractor. This does not include
liability as a result of gross negligence or intentional
misconduct. Detailed guidance will be forthcoming to
address what constitutes adequate liability insurance and
when contractors for State-lead response can be
indemnified by the Federal government. (Interim guidance
on contractor indemnification is provided in the
appropriate guidance document referenced in Appendix E.)
All State requests for indemnification and questions on
indemnification should be addressed to the Agency's
Indemnification Task Force, Office of Waste Programs
Enforcement.
Within this framework, the State must procure
contractors to conduct remedial response at a site. The
specific procedures that it will employ depend on whether
the State is seeking to acquire the services of an A/E
firm to conduct remedial planning activities or
construction oversight, or to obtain a construction firm
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9375.1-11
to implement the remedial action. Because procedures
differ, they are discussed in separate chapters of this
document. See Chapter III - Procurement of Engineering
Services for procedures appropriate for A/E firms, and
Chapter V - Procurement of Construction Contractors for
procedures to be used when obtaining a construction firm.
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9375.1-11
III. PROCUREMENT OF ENGINEERING SERVICES
This chapter outlines the general requirements for
procuring the services of an architectural and engineering
(A/E) firm during any phase of remedial response. States
may procure the services of A/E firms either through
formal advertising or competitive negotiation. Formal
advertising, in certain circumstances, is not always a
practical approach, and thus competitive negotiation,
which results in a cost-plus-fixed-fee contract, often is
used. This chapter provides specific procedures for the
two methods of competitive negotiation: the standard
method and the optional method. In addition, it contains
guidance that States may use to expedite procurement of
A/E firms under either of the two competitive negotiation
methods specifically described.
A. GENERAL REQUIREMENTS FOR PROCURING ENGINEERING SERVICES
States may employ the services of reputable A/E firms
at almost any stage of remedial response. EPA's
regulation governing procurement under assistance
agreements, 40 CFR Part 33, allows the use of either
formal advertising or competitive negotiation for
obtaining an A/E firm. Further, the regulation provides
two methods of competitive negotiation for obtaining such
engineering services; either method may be used under
Superfund Cooperative Agreements. The "standard method"
involves selection of an engineering firm, taking into
account both technical capabilities and the proposed cost
to complete the work, and is discussed in Section B
below. Selection using the "optional method" is based
primarily upon the firm's technical capabilities, and is
discussed in Section C.
Before the State initiates either procurement method,
however, it is essential that the State perform a
comprehensive evaluation of its needs to determine the
appropriate procurement method, thus avoiding unnecessary
delays. States should take the following steps to develop
basic information for the procurement process:
Determine, in general terms, the need, purpose,
and objectives of the desired engineering services
Identify the project scope of work
Set the timetable for procurement and performance
of A/E services
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9375.1-11
Identify unique project considerations
Determine the total project budget.
Once the State has developed this information, it can
begin the procurement process.
If the State is using the standard competitive
negotiation method, as defined by 40 CFR 33.505-33.520,
the first procurement action is to issue a Request for
Proposals (RFP). The RFP describes the project, lists
proposal evaluation criteria and their relative
importance, and gives the deadline and location for
submission of proposals from interested firms. The
aspiring A/E contractor's response to an RFP is a proposal
detailing both the methods that it will use to perform the
work required for the project and the estimated costs for
these services.
If the State is using the optional method of
procurement, as defined by 40 CFR 33.525, the first
procurement action is the issuance of a Request for
Statements of Qualifications (RFQ). The RFQ describes the
project and the proposed scope of services, explains the
evaluation criteria to be used and their relative
importance, provides the names of persons that firms can
contact to answer questions, and specifies the deadline
and location for submission of the statements of
qualifications (SOQs). In responding to an RFQ, a firm
supplies general information about its qualifications to
perform the proposed project and its experience in
handling similar projects; it does not address specific
scopes of work or costs to perform the project.
A more detailed discussion of these two methods for
procuring A/E services under the Superfund program is
provided in the following two sections.
B. STANDARD METHOD OF COMPETITIVE NEGOTIATION
Under the standard method of competitive negotiation
for procuring A/E services, the State gives public notice
of its intent to hire an A/E firm by publishing an RFP.
It then evaluates the proposals received, negotiates with
offerers judged to be within the competitive range to
obtain their best and final offers, and awards the
subagreement to the firm determined by the evaluation to
be the most advantageous to the State. Exhibit III-l, on
the following page, is a graphic representation of the
process for obtaining A/E services by the standard method,
as defined by 40 CFR 33.505-33.520.
III-2
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9375.1-11
B.1 Request For Proposals
Proper development of the State's RFP is key to
soliciting engineering services successfully. It is
necessary that the State prepare an accurate and complete
RFP that effectively addresses the issues specific to the
project. Thus, the proposals received should be
responsive to the State's needs. The RFP must be in
writing, must contain sufficient information to enable a
prospective offerer to prepare a proposal, must present
all evaluation criteria and the relative importance
attached to each, and must clearly state the deadline and
location to submit proposals (40 CFR 33.5lO(c)).
When soliciting proposals, the State should:
Accurately and completely describe the proposed
project and engineering services required
Provide project schedule requirements
Describe any unique project requirements
Include the names of persons to contact with
questions on the selection process
Determine the required content of the proposals,
including, for example:
The availability of personnel, equipment,
and facilities needed to complete the work
- Recommendations and opinions from previous
clients, as they relate to the specific
project under consideration
Provide a detailed cost estimate for the project.
State solicitations also should contain a minority and
women's business enterprise (MBE/WBE) utilization plan.
B.2 Evaluating Proposals
Engineering firms expressing an interest in performing
the work will offer proposals that, at a minimum, include
a letter of interest, a statement that demonstrates the
firm's understanding of the project, evidence of the
firm's financial stability and its ability to perform the
work, and a detailed cost proposal. The State then will
use the evaluation criteria included in the RFP to analyze
the submissions and determine the best proposal.
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9375.1-11
Using the standard method of procurement, the State
may take either of two courses of action. It may begin
negotiations with those firms within the competitive range
best able to perform the work, to obtain their best and
final cost proposal, as described in the following
section, or, if the RFP states that the award may be based
on initial offers alone, it may accept the best proposal
without further negotiation. During the evaluation
procedure, the State must consult the most current EPA
"Master List of Debarred, Suspended, and Voluntarily
Excluded Persons" (40 CFR 32.400) to ensure that the firms
submitting proposals are not prohibited by EPA from
participation in the assistance program. The Master List
is updated weekly and is available from the EPA Office of
Regional Counsel in each Region.
B.3 Negotiation and Subaqreement Award
If the State does not choose a firm based solely on
the original proposals submitted, the State begins
negotiations with the firms within the competitive range
to obtain best and final offers. If any single offeror is
allowed to alter its proposal, all best-qualified offerers
within the competitive range must be afforded the same
opportunity (40 CFR 33.520(a)). At no time during
negotiations may the State disclose the identities of
competing offerers. The State also must not reveal any
information contained within competing proposals (40 CFR
33.520(a». To bring discussions to an end, the State
must establish a common cut-off date which allows the
offerors ample time to prepare and submit best and final
offers.
The State then evaluates the final offers and decides
which proposal is most advantageous to the recipient
(40 CFR 33.520(b)). Price and other evaluation criteria
in the RFP, including effective utilization of MBEs and
WBEs, must be considered in making this determination.
All factors used in determining the best-qualified offers
within the competitive range must be fully documented.
The firm chosen to receive the subagreement award must be
notified immediately in writing, and all unsuccessful
offerors must be informed of their rejection (40 CFR
33.520).
C. OPTIONAL METHOD OF COMPETITIVE NEGOTIATION
States may procure engineering services through a
process by which the most highly qualified firms are
located and requested to submit technical proposals. The
State then selects the best technical proposal and
negotiates with that offeror for fair and reasonable
compensation for a specific scope of work (40 CFR
III-5
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9375.1-11
33.525). Should the State and offerer of the best
proposal not be able to reach agreement, negotiations with
that offerer must be terminated and the State negotiates
with the offerer of the second-best technical proposal.
This process continues until the State reaches agreement
on the scope of services and corresponding compensation
with a qualified offerer submitting an acceptable
technical proposal.
Exhibit III-2, on the following page, is a graphic
representation of the optional method for obtaining
engineering services. The significant difference between
the optional and standard methods for procuring
engineering services is that, using the standard method,
as defined by regulation, the State evaluates offerers
taking price into consideration prior to selecting the
responsible offerer whose proposal is determined to be the
most advantageous to the State; using the optional method,
the State selects the best technical proposal and then
negotiates a price for the work.
C.1 Soliciting Statements of Qualifications
The optional method selection process begins with the
State issuing a request to firms to submit SOQs and
summaries of their experience in performing engineering
services related to a specific project. The request may
be made through a public solicitation (40 CFR 33.510) or
by direct requests to engineering firms that have been
identified by the State (prequalified) in the required
disciplines (40 CFR 33.230(c)). States that maintain
lists of prequalified engineering firms are required to
update their lists at least every six months, to review
and act on each request for prequalification made more
than thirty days before the closing date for receipt of
proposals, and to give adequate public notice of their
prequalification procedures in accordance with the public
notice requirements of 40 CFR 33.510.
State RFQs must include at least the following items:
The requested scope of services
A clear explanation of the criteria to be used in
evaluating the SOQs and the relative importance
of each criterion
An MBE/WBE utilization plan
The deadline (date and time) for submitting SOQs
The names of persons to contact with questions.
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9375.1-11
The State's criteria for evaluating and ranking offerers
may include:
Education, experience, and expertise of the
offerer's principals and key staff members
The offerer's general experience, financial
stability, and history of performance
Availability of personnel, equipment, and
facilities needed to complete the work
Plans for MBE/WBE utilization
Recommendations and opinions from each offerer's
previous clients as these relate to the specific
project under consideration.
Other criteria may be used, depending upon the specific
requirements of the project.
C.2 Evaluating Statements of Qualifications
The State must evaluate the responses received to
eliminate all respondents who are obviously unqualified or
otherwise incapable of performing the required work. The
State then must develop a "short list" that includes three
or more of the most highly qualified offerers, based upon
the evaluation criteria listed in the RFQ. In developing
this list, the State must consult the most recent EPA
"Master List of Debarred, Suspended, and Voluntarily
Excluded Persons" (40 CFR 32.400) to ensure that the firms
selected are not excluded from the assistance program.
The Master List is updated weekly and is available from
the Office of Regional Counsel in each EPA Region.
Ranking of the firms must be based on qualifications,
anticipated quality of work, and prospects for
satisfactory completion of the project. It also should
ensure that each offerer's submittals meet the criteria
set forth in the RFQ.
C.3 Soliciting and Evaluating Proposals
After selecting the most qualified offerers, States
must request technical proposals from the offerers and
must inform them of the evaluation criteria the State will
use to rank the technical proposals (40 CFR 33.525(c)).
The RFP should specify that each proposal submitted must
define the offerer's intended concept and approach to the
planning, organization, and management of the project.
Upon receipt, the technical proposals are evaluated
carefully. At this point, the State may wish to meet
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9375.1-11
individually with the short-listed offerers to obtain
additional information to be used in determining which
offerer is most qualified. Once the State has made its
determination, it must provide written notification to the
offerer of the best technical proposal (40 CFR 33.525(d)>
and then may begin subagreement negotiation.
C.4 Negotiation and Award of Subagreement
After the offerer of the best technical proposal is
notified, the State may initiate negotiations to develop
the details of the scope of work and corresponding
compensation. Specific elements that must be established
during these negotiations include:
Project schedule
Manpower requirements
Level of effort
Scope of services and deliverables
Areas of responsibility and liability
Fee structure, amount of compensation, and method
of payment.
The offerer must submit a comprehensive cost proposal
addressing the above items in detail, to be used as the
basis for the State's cost analysis and negotiations.
During the negotiation process, the State and offerer must
reach a complete and mutual understanding of the scope of
professional services to be provided and the level of
performance desired. The negotiation process offers both
parties the opportunity to refine, amend, and clearly
define the services to be rendered for the compensation to
be paid, as well as the areas of responsibility and
liability for those services.
When the State and the offerer agree on the scope of
work and adequate compensation, the State may execute a
subagreement and issue a notice to proceed with the work,
provided the State has certified its procurement system to
EPA. (See Chapter II for subsequent action when States
are not self-certified.) If it is not possible for the
State and offerer to reach an agreement, the State must
terminate negotiations with that offerer and reinstitute
the process with the offerer of the next-best technical
proposal (40 CFR 33.525(f)). The procedure is repeated
until an agreement is reached.
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D. EXPEDITING PROCUREMENT OF ENGINEERING SERVICES
The State may choose to use different firms for
conducting the remedial investigation/feasibility study
(RI/FS) and overseeing the engineering design/
construction, thus performing two separate procurements.
This situation, however, may delay the entire remedial
response process at the site.
To minimize such delays, the State may include the
RI/FS and engineering design/construction oversight within
a single procurement. To leave this option open, the
State's original RFP for engineering services must
indicate that the RI/FS is the initial activity that will
be authorized and that the State may execute an option for
design and construction oversight services through a
separate notice to proceed, subject to the availability of
funding to amend the Cooperative Agreement and the
negotiation of an acceptable cost. In this manner, the
State could choose to use a single A/E firm if the design
and construction project(s) is funded and the firm is able
to perform the work. This method of procurement should
improve the continuity of technical activities, accelerate
project schedules, and reduce State administrative costs
associated with procuring technical services. In those
instances where the lead for response activities at a site
shifts from EPA- to State-lead, the State may use EPA's
A/E contractor without further public notice or
evaluation, provided the State has EPA's approval and
follows the rest of the requirements in 40 CFR Part 33 to
award the subagreement. See Appendix C for further
information.
When undertaking the lead for remedial planning the
State also is encouraged to expedite necessary procurement
within the framework presented in this chapter. Under
normal circumstances, procurement actions for remedial
planning may require several months to complete and thus
may delay the remedial response. Exhibit II1-3, on the
following page, describes four suggested alternatives for
expediting the initiation of remedial planning. These
should be considered on a case-by-case basis, as
appropriate.
The next chapter Chapter IV - Engineering Services
During Remedial Response presents a brief description
of the various services that an A/E firm can provide to
the State during remedial response activities at
uncontrolled hazardous waste sites, both in the course of
remedial planning and during the remedial action phase.
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EXHIBIT III-3
Type
METHODS FOR EXPEDITING PROCUREMENT*
Summary
Options Contract
for Site Remedial
Planning Activities
Pre-Award Procurement
Procurement for
Multiple Site Planning
Procurement Using
Prequalifications
The State includes both remedial planning and
remedial action in the initial Cooperative
Agreement application. Following completion
of the RI/FS and selection of a remedy,
remedial design and remedial action are funded
by amendment. The State's request for
proposals (or similar documents) for
engineering services also covers all remedial
phases, but indicates that only RI/FS
activities will be funded, with an option to
conduct the design and remedial action
engineering services subject to the
availability of funds.
The State starts procurement activities such
as issuing requests for proposals,
negotiations, and selection of a qualified
firm before the award of the Cooperative
Agreement. A procurement subagreement then
can be signed immediately after the award of
funds. State personnel costs prior to award
are not allowable; however, these costs should
not be significant.
States with numerous sites and available
funding for cost-sharing may issue a level-of-
effort type subagreement similar to EPA's
remedial contracts. Once in place, site
planning activities could be started
immediately following the award of an
individual Cooperative Agreement, without the
need for site-specific procurement actions.
The State compiles a list of available
contractors by requesting qualifications from
firms capable of performing remedial planning
activities. The list of prequalified firms
then is used to solicit site-specific
proposals. However, prequalification
procedures must ensure adequate competition.
*A11 methods shown must be consistent with EPA's procurement
regulation, 40 CFR Part 33. See Appendix C for information on
retaining the same architectural/engineering firms for follow-on
remedial response activities.
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IV. ENGINEERING SERVICES DURING REMEDIAL RESPONSE
Architectural and engineering (A/E) firms can provide
assistance to States during all phases of remedial
response. Traditionally, A/E firms have conducted the
remedial investigation/feasibility study (RI/FS) and the
remedial design (RD). In addition, the State can utilize
A/E firms to provide other types of assistance, including
conducting biddability/constructability reviews of designs
developed by other A/E firms, assisting in the procurement
of a construction contractor, managing the construction,
managing change orders, and assisting the State in
resolving claims. In the latter case, if there is an
apparant conflict of interest between the planning/design
of a remedy and its construction, the A/E firm that
developed the design cannot provide assistance during
claims negotiation. Exhibit IV-1, on the following page,
presents a graphic representation of points during
remedial response at which engineering services may be
used.
Since A/E firms can provide such varied services, this
chapter discusses the nature of the assistance that they
can lend to States throughout remedial response.
Specifically, the sections below consider the following
subjects:
Section A - RI/FS
Section B - RD
Section C - Biddability and constructability
reviews
Section D - Bid-phase services
Section E - Construction oversight services
Section F - Claims
Section G - Operation and maintenance (O&M).
To provide additional assistance, each section includes a
generalized scope of work for the types of activities that
an A/E firm may be requested to perform at each of these
points in remedial response. Additional Superfund
guidance documents on these topics are referenced in
Appendix E.
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In using this chapter, States are reminded that A/E
firms are only one option available to perform the types
of work described in Sections C through F. Alternatively,
at various points States may choose either to perform the
work themselves, to seek assistance from EPA which will
obtain the services of the U.S. Army Corps of Engineers
(COE) or to utilize an independent management consulting
firm to accomplish this work. Since A/E firms are such a
valuable resource, however, this chapter considers their
services separately. Other options cited above and
technical requirements for the aspects of remedial
response detailed below in Sections C through F are
discussed in Chapter V, which describes in full the
construction firm procurement process.
A. REMEDIAL INVESTIGATION/FEASIBILITY STUDY
After an A/E firm is hired and before the RI/FS is
initiated, a detailed scope of work for the project is
prepared. The scope of work describes the current
situation at the site and includes a compilation of all
available existing information. It also includes plans
for the quality assurance program and sampling analysis
(QAPP/SAP), health and safety, site management, data
management, and community relations.
Once the scope of work is approved, the RI is
performed to assess the problems and dangers associated
with the site. The site is mapped and investigated by
sampling the ground water, surface water, soils, and other
appropriate elements to determine the probable extent of
the hazard. The wastes present in drums, tanks, pits,
lagoons, or other locations or containers also are
characterized by sampling and analysis. After the data
are gathered, the danger presented by the site is assessed
and treatability studies, in the form of pilot or bench
scale treatment processes, are performed to determine an
appropriate remedial action to control or remove the
hazard. All data are gathered and analyzed, and the RI
report is issued.
The FS is initiated in parallel with the RI and
identifies and analyzes the various remedial technologies
available to eliminate or control the hazards associated
with the site. As specified in section 121 of CERCLA, as
amended, alternative remedies must be evaluated for their
ability to protect human health and the environment; to
attain Federal and State applicable or relevant and
appropriate requirements; utilization of permanent
solutions and alternative treatment technologies; and
cost-effectiveness. The criteria upon which to base this
evaluation and remedy selection effort are described in
CERCLA, section 121(b), as amended.
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The results of these investigations and studies are
used by the State and EPA to develop the Record of
Decision (ROD) for the site. They also are used by the
A/E firm to prepare a Pre-design Report which includes
conceptual site plans, outline specifications, and a
preliminary schedule and projected cost estimate for
remedial action.
Activities that an A/E firm may be called upon to
perform during the RI/FS may vary considerably, depending
upon the conditions at the site. They may include the
following:
Compile existing site information
Prepare project operations plans, including the
health and safety, sampling and analysis, site
management, and community relations plans
Incorporate the existing information and project
operations plans into the detailed scope of work
for the RI/FS
Prepare complete and detailed site maps
Characterize wastes present on-site in drums,
tanks, pits, lagoons, etc.
Conduct a sampling and analysis program to define
the extent of the contamination present at the
site and its environs
Perform an endangerment assessment
Perform pilot and bench-scale treatability studies
Issue an RI Report
Identify available remedial technology alternatives
Analyze alternatives for technical feasibility,
exposure and risk, environmental effects,
compliance with government regulations, and cost
Issue an FS Report
Assist in preparation of the ROD
Prepare the Pre-design Report, including
conceptual site plans, outline specifications,
preliminary schedule, and projected cost estimates.
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A model SOW for an RI/FS and additional discussion can be
found in the State Participation in the Superfund Program
manual. Guidance on RIs and FSs is provided in the
appropriate Superfund program guidance documents
referenced in Appendix E.
B. REMEDIAL DESIGN
After the RI/FS is completed and the ROD is issued,
the remedial action can be designed. To conduct this
design, the State may use the same A/E firm, as described
in Section D of the previous chapter, or may procure the
services of a different A/E firm. If the State chooses
the latter option, it must conduct the necessary
procurement action using the procedures outlined in
Chapter III of this document.
All available information gathered during the RI/FS is
used to develop the preliminary design. Preparation of
the design then is begun and an evaluation is performed to
determine whether any additional data are needed to move
into the final design phase. A design memorandum is
submitted to the State to provide a summary of the design
parameters, the facilities to be designed, and the
estimated construction costs. This informs the State of
the direction the engineer intends to take in developing
the design. The products of an engineering design include
detailed construction drawings and precise and complete
technical specifications. The engineering firm should
utilize some form of internal technical review to ensure
the constructability/operability of the design and to
conduct value engineering screens of potential remedies
for the site. In addition, the A/E firm conducting the
design can play a major role in obtaining any permits
necessary to implement the remedial response.
Specific types of services that the A/E firm
performing the design may be required to provide will vary
considerably, depending on the project at hand. Tasks
assigned to the design firm may include the following:
Develop preliminary design and performance
criteria (if laboratory services are required,
quality assurance/quality control procedures must
be established and followed; see the State
Participation in the Superfund Program manual)
Conduct subsurface investigations and/or a
sampling program, if necessary to supplement data
gathered during the RI/FS
Conduct site surveys
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Prepare the design memorandum
Prepare detailed construction drawings and
technical specifications
Conduct pilot and bench scale treatability studies
Determine bidding and subagreement administration
requirements
Prepare a probable estimate of construction costs
Perform value engineering
Conduct initial constructability/operability
reviews of the design
Prepare an initial O&M plan
Assist in obtaining permits
Attend progress meetings and prepare progress
reports
Develop the preliminary construction schedule
Participate in the public information/community
relations program.
Additional guidance on specific procedures for RDs may be
found in the appropriate guidance document referenced in
Appendix E.
C. BIDDABILITY AND CONSTRUCTABILITY REVIEW
After the design documents have been substantially
completed, the State can begin to develop the subagreement
bid documents to procure the construction contractor, as
described in Section V.B of this manual. Bid documents
include the solicitation itself as well as the
subagreement documents. These are highly technical in
nature, outlining all requirements for the proposed
project, and provide the basis for the contractors' bids
for the project.
Therefore, the State should subject its bid documents
to a rigorous biddability/constructability review prior to
initiating the procurement action. This will help to
avoid bid protests and also should reduce the need for
change orders and the potential for claims.
Biddability/constructability reviews should examine the
accuracy and adequacy of the construction specifications,
schedule, estimates of quantities and types of materials,
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and cost estimates; they also should ensure that the
subagreement bid documents present project requirements in
a clear, coherent manner.
The State has several options for performing this type
of review: it may choose to do so itself, may request the
assistance of the COE through EPA (both of which are
discussed in Section V.C of this document), or may secure
the services of an A/E firm. If the State uses an A/E
firm, it must procure a firm other than the contractor
that developed the design, since this review must be
independent.
Specific services that the State may request an A/E
firm to provide in conducting a biddability/
constructability review may include the following:
Review construction administration procedures,
such as for payments, construction document
control, change orders, shop drawings, and
submittal of O&M data
Review technical drawings and specifications for
coordination, accuracy, adequacy, and clarity
Review estimated construction schedule and duration
Review start-up and operational testing
requirements
Review overall control of work and coordination
with subagreement provisions
Review cost estimates
Prepare summary of recommended changes to
subagreement documents, together with estimates of
affects on costs
Review adequacy of occupancy and acceptance
procedures
Review bidding documents
Review instructions to bidders for accuracy,
completeness, and compliance
Review construction subagreement documents for
compliance with applicable regulations.
Specific procedures that States may use to request EPA
assistance to conduct biddability/constructability reviews
may be found in Section C of the following chapter.
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Additional guidance may be found in the appropriate
Superfund guidance document referenced in Appendix E.
D. BID-PHASE SERVICES
Use of an A/E firm during procurement of a
construction contractor can provide the State with the
experience necessary to ensure that all tasks associated
with the bidding are performed properly. The State may
use an A/E firm to prepare the text of the solicitation
for bids; to ensure that as many steps as possible are
taken to conduct competitive bidding to include women's
and minority business enterprises (WBEs/MBEs) and other
qualified firms; to conduct a pre-bid conference; to
prepare and issue any necessary addenda to the bid
documents; to direct the bid opening; to assist the State
in evaluating the apparent low bidder and recommending
contract award; and to assist in the resolution of any bid
protests.
Specific tasks that the State may request the A/E firm
to perform during oversight of construction contractor
procurement include the following:
Prepare the text for solicitation for bids
(advertisement)
Conduct the final biddability/constructability
review of the design prepared by another A/E firm,
including the plans and technical specifications
Conduct claims mitigation review of construction
subagreement documents
Develop and assemble the final subagreement
documents
Issue the solicitation for bids by public notice
and to the reference list of qualified bidders,
MBEs, and WBEs
Advise MBE/WBE agencies and construction trade
agencies of the solicitation
Distribute bidding and subagreement documents to
prospective bidders
Distribute lists of prospective bidders to all
plan holders
Conduct a pre-bid conference
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Attend progress meetings and prepare progress
reports
Review requests for clarification of documents;
prepare and issue modifications to documents by
addenda
Conduct the bid opening and tabulate the bids
Evaluate the qualifications, financial stability,
and responsiveness of the apparent low bidder
Prepare the recommendation for award of the
subagreement
Assist in the resolution of any bid protests
Participate in the public information/community
relations program.
Procedures for solicitation and evaluation of any bids
received are found in Sections D through F of the
following chapter. See the appropriate Superfund guidance
document referenced in Appendix E for additional
information.
E. CONSTRUCTION OVERSIGHT SERVICES
During construction, the State may use an A/E firm to
act as the State's designated agent to administer the
construction subagreement. The A/E firm may provide a
variety of services during this phase of remedial
response. Among these may be full-time, on-site
inspection, coordination of materials testing, and review
of shop drawings to ensure that materials and equipment
used comply with the requirements in the subagreements.
A/E firms also may administer change orders to the
subagreement, monitor construction progress compared to
the construction contractor's schedule, conduct regular
progress meetings, respond to questions from the
construction contractor concerning the intent of the
subagreement documents, and provide other services to
minimize conflicts between the parties of the subagreement
and avoid or resolve claims.
Among the specific tasks that the State may request
its A/E firm to perform as part of construction oversight
are the following:
Prepare construction subagreement documents for
execution
Conduct a pre-construction conference
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Conduct periodic site investigations during
construction or provide full-time, on-site
inspection
Review shop drawings
Administer the construction subagreement and any
change orders
Coordinate materials testing
Review and certify construction contractor
requests for payment
Conduct substantial completion and final
completion inspections
Conduct periodic progress meetings
Prepare record documents
Monitor the construction contractor's schedule of
construction progress
Maintain complete project records
Respond to requests for information or
clarification of construction subagreement
documents from the construction contractor
Coordinate construction activities with Federal,
State, and local agencies
Attend progress meetings and prepare monthly
progress reports on the construction
Assist the State in managing change orders
Evaluate claims
Participate in the public information/community
relations program
Prepare the final technical report at the
conclusion of the remedial action
Assist the State in other activities, as
appropriate.
Additional guidance can be found in the appropriate
Superfund guidance document referenced in Appendix D.
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F. CLAIMS
Occasionally, despite careful project management,
claims will arise that the State cannot resolve easily.
If negotiation does not bring about a settlement, the
claim must be carried into either mediation, arbitration,
or litigation. The State can use an A/E firm to help
evaluate the merits of claims and to provide technical
expertise during the formal resolution process. In many
cases, claims involve matters of law that require
evaluation by an attorney. In this case, States should
seek expert legal advice; States are discouraged from
defending themselves against claims brought by contractors
who are represented by legal counsel without the benefit
of legal assistance.
Specific tasks that A/E firms may conduct in assisting
States in claims defense include:
Develop an as-built construction schedule and
evaluate it against the planned schedule
Evaluate subagreement language to determine the
design intent as compared to claimed extra work
Evaluate direct costs of claimed extra work
Evaluate the construction contractor's accounting
of overhead costs and the allocation of such costs
to the project
Issue written recommendations concerning the
merits of any claims filed, except when there is
an apparent conflict of interest
Develop a negotiating strategy for claims
mitigation or defense, except when there is an
apparent conflict of interest
Represent the State as an "expert witness," if
required.
A more comprehensive discussion of claims can be found in
Chapter VI of this document.
G. PLANNING FOR OPERATION AND MAINTENANCE DURING REMEDIAL
ACTION
Under CERCLA, States are fully responsible for O&M of
remedial activities at Superfund sites; however, planning
for the assumption of O&M responsibilities is an inherent
part of the remedial action design and implementation.
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9375.1-11
Therefore, EPA may continue to share in costs for
activities during the phase of remedial action that
ensures a remedy is operational and functional.
During this period, which is not to exceed one year,
costs continue to be shared at the same percentages as
during implementation of the RA. In the case of remedial
action to restore contaminated ground or surface water,
however, CERCLA, as amended, provides that activities may
be considered remedial action and cost sharing may occur
for a period up to ten years after the construction or
installation and commencement of operation of the
restoration activities or until a protective level as
defined in the ROD is obtained, whichever occurs first.
In planning for the assumption of O&M
responsibilities, States may procure the services of an
A/E firm to do the following:
Review and revise the preliminary O&M plan
Evaluate operating staff members' needs
Develop instructional materials and conduct
on-site training programs
Develop maintenance management programs
Assist during initial start-up and operational
testing
Develop sampling and analysis programs
Develop records management systems
Prepare detailed O&M manuals
Assist in developing initial O&M budgets
Assist in developing safety and emergency response
programs
Participate in the public information/community
relations program
If the State wishes to retain a firm to conduct O&M
after Federal assistance ends, it may do so under the
terms of its own State procurement requirements, since
EPA does not share in the costs of O&M beyond the
phase of remedial action that ensures the remedy is
operational and functional.
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Assist in the procurement of a firm to conduct O&M*
Prepare the final technical report at the
conclusion of the cost-sharing period
Attend progress meetings and submit progress
reports.
Specific tasks may differ, depending on the requirements
of the site. Additional guidance on planning for O&M is
provided in the appropriate Superfund guidance document
referenced in Appendix E.
Subagreements for construction management must be
properly coordinated with subagreements for construction.
The following chapter Chapter V - Procurement of
Construction Contractors provides guidance for
procuring the use of such construction contractors; it
shows where the A/E oversight firms fit into the
construction procurement process and details how this
integration can occur. In addition, after the State has
awarded a subagreement for either remedial planning
activities or construction management, as discussed in
this chapter, it must exercise proper administration
procedures to ensure that the work is implemented in a
timely manner and to help reduce the likelihood of any
procurement problems, such as change orders and claims.
Chapter VI - Subaareement Administration provides guidance
for proper subagreement administration.
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V. PROCUREMENT OF CONSTRUCTION CONTRACTORS
The required method of procuring construction
contractors during Superfund remedial response is formal
advertising (40 CFR 33.405-33.430). Formal advertising
involves the public solicitation of sealed bids and the
award of a subagreement based on a fixed fee (lump sum,
unit price, or a combination of the two) to the lowest,
responsive, responsible bidder. Formal advertising also
requires the recipient to give adequate public notice of
the solicitation inviting bids and to state when and how
prospective bidders may obtain and examine the bidding
documents, including the subagreement documents. A
graphic representation of this process is presented on the
following page as Exhibit V-l.
In special cases, a variation of the formal
advertising procurement method, called two-step formal
advertising, may be utilized. This method may be used
when it is possible to prepare performance-based
specifications but impractical to prepare detailed
specifications to support an award based on price. The
procedures and requirements for implementing two-step
formal advertising are different from traditional formal
advertising, and therefore, are presented separately in
Appendix A.
This chapter provides guidance on the formal
advertising method as it applies to procuring Superfund
construction contractors, especially during remedial
implementation. Within this framework, it specifically
discusses each of the steps that constitute procurement of
construction contractors, and potential complications for
this process, in the following sections:
Section A - Development of cost estimates for
construction
Section B - Preparation of subagreement documents
Section C - Biddability/constructability review
of the subagreement documents
Section D - Solicitation of bids
Section E - Evaluation of bids
Section F - Bid protests
Section G - Subagreement award.
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To provide the maximum benefit to manual users/ Section B
contains a detailed discussion of the technical components
of subagreement documents, as well as the process for
preparing them.
While the State retains ultimate responsibility for
ensuring that the procurement is conducted properly, it
has several options for preparing and reviewing the
necessary documentation, evaluating the bids, and
overseeing the procurement process. It may choose to
retain sole responsibility for procurement while
consulting with EPA as necessary; it may request EPA to
obtain the assistance of the U.S. Army Corps of Engineers
(COE) at appropriate points in the procurement process; it
may retain the services of a management firm; or it may
use an architectural and engineering (A/E) firm to oversee
procurement. In any case, the procedures contained in
this chapter apply. Details on the types of services that
an A/E firm can be requested to provide during remedial
construction are discussed in Chapter IV of this document.
A. DEVELOPMENT OF COST ESTIMATES FOR CONSTRUCTION
The first step in obtaining a construction contractor
is the development of an accurate total cost estimate for
the project. This is essential to ensure adequate funding
for a remedial action. Preparation of a set of
high-quality construction plans and specifications for the
project, discussed in the following section of this
chapter, is inadequate unless the project cost estimate is
prepared to the same standards. For most projects, the
final project cost estimate should be within +15 percent
to -10 percent of the actual cost. The total costs should
factor in supervision and administration, and engineering
and design costs during construction; these are calculated
as a percentage of the actual estimated project costs and
together should range between 7 and 9.5 percent.
The State also should establish a contingency fund for
each site-specific remedial action project to cover
unforeseen cost variances which may occur prior to or
during construction. Contingencies should be included as
part of the total costs. Contingency funding for
State-lead remedial action projects is actually a
two-stage process. First, the State should establish a
bid contingency to cover variances in cost that may arise
before construction commences. This bid contingency
should be included in the Cooperative Agreement funding
the project, and is usually equal to 15 percent of the
actual project cost estimate. Any amount of the bid
contingency not needed to cover variances prior to
construction then could be moved to a construction
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9375.1-11
contingency/ used to cover variances caused by change
orders approved during the course of the remedial action.
In addition, the Region's Superfund Comprehensive
Accomplishments Plan (SCAP) contingency will retain a
construction contingency/ equal to 8 to 10 percent of the
project cost, for each remedial action project. If/ at
the conclusion of the construction contract bidding
process the State does not have sufficient funds to
establish a construction contingency fund within the 8 to
10 percent range/ the State may request the Region to
amend the Cooperative Agreement to add funds for this
purpose from the Regional SCAP contingency. A more
detailed discussion of this subject can be found in the
appropriate Superfund guidance document referenced in
Appendix E.
B. PREPARATION OF SUBAGREEMENT DOCUMENTS
After the construction cost estimates are made, the
State can prepare the subagreement documents. These will
be made available to prospective bidders as part of the
bid documents, along with the solicitations for the
project, and will provide specific information upon which
the construction firms can base their bids. After a
subagreement has been awarded, these subagreement
documents will be signed to execute the subagreement. A
State can expedite the procurement process and minimize or
avoid bid protests, change orders, and claims by
developing high-quality, unambiguous subagreement
documents that contain a clear and accurate description of
the technical requirements of the remedial action project,
as detailed in 40 CFR 33.255 and 33.420.
Subagreement documents include plans, specifications,
form of subagreement, and all other documents upon which
the remedial action contractor relies to form his bid.
They designate the quality, quantity, and arrangement of
materials and equipment, and specify the methods by which
these materials and equipment are to be assembled at the
job site. They contain a statement of the price to be
paid, payment terms/ and time allowed to complete the work
specified. Subagreement documents also provide a
description of the terms and conditions of the
subagreement to be awarded and an explanation of the
procedures for bidding, evaluating bids, and awarding the
remedial action subagreement. As such, they must provide
complete/ accurate information on all requirements that
will be placed on a construction firm in the course of
remedial action.
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Subagreement documents must be technically adequate
and complete to promote cost-competitive bids while
ensuring on-time completion of the project within budget.
Failure to adequately prepare construction bid documents
increases the possibility for bid protests, change orders,
and claims for additional compensation. Therefore, it is
especially important that States be aware of the necessary
contents for these documents. To provide States with a
tool to help ensure that the bid documents are complete,
Exhibit V-2, on the following page, is a sample checklist
of contents for adequate construction subagreement
documents.
The State has two options in preparing construction
subagreement documents. It may choose to prepare them
itself, in which case it may request assistance from EPA
and, through EPA, from the COE. If the State chooses the
other option, it either may use the services of the A/E
firm that developed the design or may obtain an
independent A/E firm to prepare the documents. This
latter option is described in Section B of the previous
chapter. To date, these documents typically have been
prepared by the A/E firm that developed the remedial
design.
This section provides detailed guidance on the
contents of high quality, complete subagreement
documents. It is equally applicable whether the State
prepares such documents or retains an A/E firm to do so.
B.1 Subagreement Provisions
The construction subagreement documents must display
the provisions that will be in the subagreement upon its
execution. Several specific requirements apply to the
necessary contents of the subagreement documents. First,
States, in each subagreement, must include clauses that
meet the intent of 40 CFR 33.1015-33.1021. These sections
contain requirements for:
Subagreement provisions (33.1015)
Labor standards (33.1016)
Patents data and copyrights (33.1019)
Violating facilities (33.1020)
Energy efficiency (33.1021).
Second, States must include the appropriate clauses from
40 CFR 33.1030, or their equivalent, in all
subagreements. These clauses contain State and contractor
responsibilities for:
Changes
Differing site conditions
V-5
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EXHIBIT V-2
SAMPLE CHECKLIST OF
CONSTRUCTION SUBAGREEMENT BID DOCUMENT CONTENTS
Index of Subagreement Bid Documents
Advertisement for Bids
Instructions to Bidders
Bid Form
Addenda Acknowledgement
Bid Bond or Bid Security Form
Certificate of Surety
Acknowledgement of Principal Form
Non-Collusion Affidavit
Certification of Nondiscrimination in Employment
Certification of Nonsegregated Facilities
Authority to Execute Subagreement
Form of Subagreement
Performance Bond Form
Payment Bond Form
Certificate of Ability to Obtain Insurance
General Conditions of the Subagreement
Supplemental General Conditions of the Subagreement
Federal Requirements and Subagreement Provisions
Davis-Bacon Wage Rate Determination
General Subagreement Requirements
Scope of Work
Control of Materials
Utility Coordination Requirements
Project Supervision Requirements
On-Site Inspection Procedures
Safety Requirements and Responsibilities
Emergency Procedures
Progress Schedule and Report Requirements
Payment Procedures (Measurement and Payment)
Change Order Administration Procedures
Correspondence Distribution
Submittal, Processing Procedures
Material and Equipment Storage Requirements
Close-out Requirements
Technical Specifications
Drawings and Plans (certified by a registered professional
engineer)
Supplemental Data (e.g., geologic data, hydrologic data)
V-6
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Suspension of work
Remedies
Price reduction for defective cost or pricing data
Audit and access to records
Covenant against contingent fees
Gratuities
Contractor responsibilities
Termination
Final payment
Supersession
Privity of subagreement.
States must be sure to include all subagreement provisions
that will be applicable to the project.
B.2 Specifications
In developing technical specifications for proposed
remedial action projects, the State must incorporate a
clear and accurate description of the technical
requirements for any necessary materials, products, or
services, along with the required performance schedule.
States are required to avoid the use of detailed product
specifications if at all possible. If the State judges it
to be impractical or uneconomical to clearly and
accurately describe technical requirements, it may use a
"brand name or equal" description to define expected
performance or other technical requirements. The State
must clearly describe, in the technical specifications for
projects for which it is requesting bids, the salient
requirements of the named brand which must be met by
offerers (40 CFR 33.255(c)>.
B.3 Bonds and Insurance
In accordance with 40 CFR 33.265, States must require
remedial action contractors to furnish bonds as a
guarantee of faithful subagreement performance. Remedial
contractors also must provide insurance for accidents and
catastrophic loss to manage any risk inherent in
completing the project. Therefore, bonds and insurance
requirements must be clearly and accurately stated in the
subagreement bid documents, including the amounts of
security and coverage that bidders will be required to
provide.
B.S.a Bonds
Bonds are a form of surety that includes bid
guarantees, performance bonds, and payment bonds. For
construction under $100,000, States must follow their own
requirements for bonding. For construction subagreements
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9375.1-11
over $100,000, States must meet the intent of the EPA
bonding requirements, articulated in 40 CFR Part 33.265.
The EPA Award Official may accept the State's bonding
policy, however, if it is equivalent to the EPA
requirements.
In accordance with 40 CFR 33.265, States must require
construction contractors to furnish bonds as a guarantee
of faithful performance of the subagreement. These bond
requirements must be stated clearly in the construction
subagreement documents, as follows:
Each bidder shall provide a bid guarantee
equivalent to five percent of the bid price. The
bid guarantee shall consist of a firm commitment
such as a bid bond, certified check, or other
negotiable instrument, accompanying a bid as
assurance that the bidder, upon acceptance of the
bid, will execute such contractual documents as
the State may require within the time specified.
The contractor shall provide a performance bond
equivalent to the subagreement price. The
performance bond is required to secure
fulfillment of all the contractor's obligations
under the subagreement.
The contractor also shall provide a payment bond
of 100 percent of the subagreement price. The
contractor executes the payment bond in
connection with the subagreement to assure
payment, as required by law, to all persons
supplying labor and materials in execution of the
work provided for in the subagreement.
Whenever bonds are required, bidders and contractors shall
obtain them from companies holding certificates of
authority as acceptable sureties (31 CFR Part 223).
B.3.b Insurance
The State should not execute a subagreement until the
contractor has offered sufficient certification that all
contractual insurance requirements have been fulfilled.
Contractors must be aware of the insurance requirements
that pertain to the remedial action construction project
for which they are submitting a bid; the construction
subagreement documents, therefore, must coherently present
the specific types of insurance needed.
V-8
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Insurance normally required for remedial action
activities includes the following:
Insurance coverage needed by a contractor
engineering or construction to protect itself
from direct losses/ including:
Property damage
Burglary, robbery, and theft
Dishonesty of employees through forgery or
embezzlement
Builder's risk (with the State as the named
insured)
Insurance coverage needed by a contractor
engineering or construction to protect itself
against claims by third parties, including:
Contractor's public liability
Contractor's protective liability
Contractual liability
Completed operation/premises liability
Worker's compensation liability
Comprehensive general liability, bodily injury,
and third party property damage
Vehicle liability when vehicles are used in
the performance of the subagreement for
collision liability and protection and indemnity
liability
Insurance provided by a contractor to protect the
State, including the State's protective liability
and coverage for damage to State property not
otherwise protected.
In addition, for work within a special flood hazard area,
the State and contractor must comply with the Flood
Disaster Protection Act of 1973. If the site is within a
special flood hazard area, the construction contractor
must be covered by flood insurance.
Most insurance coverages can be combined so that all
contemplated risks of each classification are covered
under one comprehensive policy. States should seek expert
advice in identifying the required types and amounts of
insurance for each remedial response subagreement.
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When the State requires a contractor to provide
insurance, the policies should contain an endorsement that
any cancellation or significant change will not be allowed
unless the insurer and the contractor provide written
notice to the State.
Generally, under the Superfund program, contractors
are reimbursed for the reasonable portion of their
insurance allocable to the subagreement work. (See 48 CFR
31.2 for additional information on such insurance
requirements.) Insurance requirements eligible for
funding must be specified in the Cooperative Agreement;
this includes Environmental Impairment Liability
Insurance. The Agency recognizes that in some instances
requirements for Environmental Impairment Liability
Insurance may limit competition on remedial response
projects. Those firms that can spread the cost of the
associated premiums over several projects may be more able
to keep costs reasonable, while firms that cannot do this
must include the full cost of such insurance in their bid
packages and thus in many cases are not the lowest bidder.
B.4 Payment Terms
EPA and State commitments for transfer of funds under
a Cooperative Agreement and for the drawdown and use of
these funds are detailed in the the State Participation in
the Superfund Program manual. States are required to
develop budgets to ensure that sufficient funds are
allocated for the project and that they meet EPA financial
management needs.
Individual subagreement documents must detail the
payment terms that will govern provision of compensation
to State contractors. States usually choose to compensate
contractors using progress payments, whereby the State
provides money to its contractor as portions of the work
are completed. Procedures governing progress payments and
State retainage of progress payments are determined by
individual State laws. In general, progress payments may
be made for the amount and value of services and/or
construction work performed; for materials and equipment
delivered to, or stored near, the project site; and for
undelivered items or materials specifically manufactured
for the subagreement, provided that the appropriate
insurance, security, and protection of Federal and State
interests are included in accordance with the agreement
documents.
Any State or EPA requirements for documentation to
accompany contractor payment requests must be clearly
described in the subagreement documents. Specific
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9375.1-11
documentation requested by the State may include progress
reports of services performed as of the date of the
request for payment (usually required for engineering
services), periodic construction progress reports (usually
prepared by the on-site representative on a remedial
action project), and updated construction schedules
(usually developed and maintained by construction
contractors).
In addition, subagreement documents must specifically
describe terms for final payment. These should include
the following items:
Definition of satisfactory completion of all
services and deliverables for engineering
subagreements
Requirements for final inspections,
certifications, and warranties, as well as for
transfer of responsibility and liability for
construction subagreements (see the State
Participation in the Superfund Program manual for
a discussion of final inspection and
certification)
Requirements for release of retainages, including
those that are contingent upon EPA audit, if any
Means for resolving disputes and claims under the
terms of the subagreement
Final accounting of all payments, including
modifications to the subagreement price as a
result of change order agreements.
These are requirements of the final payment subagreement
clause, contained in 40 CFR 33.1030.
B.5 Project Control
To properly administer a remedial response project,
the subagreement documents must specify the procedures
that the State will use to monitor performance under the
subagreement. Such procedures and requirements should be
detailed in the general requirements section of the
subagreement, and may include the following:
Project meetings, including pre-planning,
predesign, and pre-construction conferences and
periodic progress meetings
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9375.1-11
Progress schedule development and periodic update
reports
Submittal review procedures
Procedures for payment
Change order administration procedures
Testing and laboratory services requirements
Instructions for preparing record documents
Subagreement closeout procedures
Roles and limitations of responsibility of
contracting parties.
Descriptions of these procedures and requirements in the
subagreement documents help ensure that the contractor is
advised of administrative needs. Contractors thus can
provide an adequate allowance in the proposed fee or bid
price for the costs and potential schedule effects
resulting from these requirements.
B.6 Schedule Requirements
The subagreement documents should require the selected
contractor to prepare, submit, and update a progress
schedule for the proposed project. An accurate/ updated
construction schedule plan is critical to the State's
ability to monitor contractor progress, to evaluate
requests for additional time and money to complete any
work beyond the original subagreement terms, and to
forecast the financial (i.e., cash flow) needs of the
project. Specifically, the schedule can be used to:
Define the contractor's proposed work plan,
showing the order in which the contractor intends
to perform the work
Identify the dates upon which the contractor
intends to start and complete each of the major
components of the work
Identify the dates for submittals and reviews of
submittals
Identify schedules for procurement of materials
and equipment to be used in the work
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9375.1-11
Assist in determining rates of progress in
completing the work to determine when to make
periodic progress payments.
Subagreement documents should include, as a minimum:
A description of the type of schedule that the
contractor will be required to provide (e.g., bar
chart, Gantt chart, critical path method)
Requirements for updating the schedule, including
periodic analyses of progress, to be submitted in
conjunction with, and as a condition of, the
contractor's applications for payment
A description of the relationship of the schedule
to such considerations as pending or authorized
change orders and claims, and threatened or
pending suspension and/or termination of the work
of the subagreement.
The State may choose to include additional requirements,
as necessary. Potential contractors will factor time and
resource requirements for schedule development and updates
into their bids for the construction subagreement.
B.7 Change Order Provisions
An important consideration to be addressed in these
documents is administrative requirements for changes in
the subagreement scope of work. Thorough, expert
preparation of subagreement language concerning change
orders is of critical importance in controlling project
costs, promoting satisfactory project progress, and
reducing the potential for claims and litigation. The
subagreement documents must:
Clearly describe how additions, deletions, or
revisions in the work may be made without
invalidating the subagreement
Define exactly what is meant by a change order;
for example, by specifying conditions that would
warrant a change order
Describe the procedures to be followed in
preparing change order documents, including the
form and content of the initial request for
changes in the work, as well as required
documentation of the accepted change
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9375.1-11
Include a statement covering subsequent recourse
should the contracting parties not be able to
reach agreement on a proposed change.
The documents also must specify any required limitations
to increases in the subagreement price and/or extensions
of the subagreement period of performance.
B.8 Health and Safety Issues
Much of the work performed under remedial
subagreements, both engineering and construction, may be
inherently hazardous. States, therefore, must require
their contractors to satisfy all Federal, State, and local
statutes, regulations, and ordinances related to health
and safety practices. Contractors also must be required
to develop and submit to the State for review, a health
and safety plan for the specific project work. This key
subagreement requirement can be enforced by including in
the subagreement a provision specifying that payment will
be contingent upon the contractor's satisfactory
compliance with all applicable health and safety
requirements.
States are required to have site health and safety
plans in place before field activities can commence. A
health and safety plan provides for the protection of
on-site personnel and area residents during hazardous
waste operations. Normally, States will engage a
contractor for technical services to develop their health
and safety plans.
Plans must be consistent with site conditions and must
comply with the following:
CERCLA sections 104(f) and lll(c)(6)
State Health and Safety Statutes
Hazardous Waste Operations and Emergency
Response. Occupational Safety and Health
Administration (OSHA) interim final rule, 29 CFR
1910.120, December 19, 1986. This rule
references EPA order 1440.2, "Health and Safety
Requirements for Employees Engaged in Field
Activities," July 12, 1981 and the
NIOSH/OSHA/USCG/US EPA Occupational Safety and
Health Guidance Manual for Hazardous Waste Site
Activities. October 1985.
A health and safety plan must be included in all
subagreements awarded under the Cooperative Agreement and
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9375.1-11
must be tailored to meet site conditions. The OSHA rule
states that each employer shall develop and implement a
safety and health program for its employees involved in
hazardous waste operations. Service contractors are
equally covered by the law, and their employees who will
be involved in hazardous waste operations must meet the
training and medical surveillance requirements of 29 CFR
1910.120. Each site-specific safety plan must be
submitted to the EPA remedial project manager (RPM) for
review. Review assistance is available to the EPA RPM
from EPA-certified On-Scene Coordinators or from the
National Response Team, Edison, New Jersey. See the
appropriate Superfund guidance document referenced in
Appendix D for further information.
B.9 Subaoreement Close-Out Requirements
The subagreement documents should contain a concise
description of how the State will determine that work has
been completed satisfactorily in accordance with the terms
of the subagreement. The documents must specify such
items as:
The manner in which the project will be
determined to be substantially complete
A description of the contractor's liabilities and
responsibilities at the time of substantial
completion, including any operation and
maintenance (O&M) procedures to be performed by
the contractor at the site
The State's liabilities and responsibilities at
the time of substantial completion of the
project, including any site O&M procedures to be
performed by the State
Requirements for final inspection
Requirements for submission of a final technical
report
Procedures for applying for and receiving final
payment
A description of the contractor's continuing
obligations subsequent to subagreement
completion; this may include, for example,
warranties, guarantees, and, often for remedial
action projects, a one-year warranty and
maintenance of the surety bond to guarantee
adequate performance of the project's facilities.
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9375.1-11
States are required to submit a close out report at
the completion of each operable unit to document that the
work was completed. As a provision in the subagreement
documents, a State should require the construction
contractor to provide the information necessary to prepare
the close out reports for EPA. At the conclusion of the
remedial action, a final close out report must be prepared
which documents that the criteria established in the
feasibility study (FS) and the Record of Decision (ROD)
have been met. The final close out report must provide
sufficient information to ensure deletion of the site from
the National Priorities List. Further guidance on
developing the final close out report will be forthcoming.
C. BIDDABILITY AND CONSTRUCTABILITY REVIEW
States should consider having their bid documents for
remedial action projects subjected to an independent
biddability/constructability review, after design is
substantially complete, as a method of preventing bid
protests. Such technical assistance should contribute to
the efficient, effective implementation of remedial
activities.
A biddability/constructability review for remedial
action generally:
Reviews the accuracy of the construction
specifications and cost estimates
Determines whether currently accepted construction
practices and techniques are being used
Determines the adequacy of the proposed components
of the quality assurance project plan, the draft
O&M Plan, and the site safety specifications
Determines whether the bid schedule included in
the specifications will enable the construction
contractor to submit a fair and reasonable bid
Determines the accuracy of any estimated
quantities of material specified in the design
Determines that the responsibilities and
liabilities of the construction contractor and
the State are clearly defined and detailed in the
design documents.
Tasks that may be required during biddability/
constructability review are detailed in Section D of the
previous chapter and in the appropriate Superfund guidance
document referenced in Appendix E.
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9375.1-11
The State may perform this review itself, may obtain
the service of an A/E firm to do so, or may request EPA to
secure the assistance of the COE to conduct biddability/
constructability reviews. COE reviews will occur
concurrently with any internal review the State may choose
to conduct and should not result in delays to the remedial
action procurement process. Because the COE routinely
performs remedial activities for Federal-lead remedial
sites, they are well qualified to perform biddability/
constructability reviews for Superfund remedial action
projects and their technical expertise should prove
extremely useful to a State. As a condition of the
Cooperative Agreement, EPA also may require the COE to
perform such a review for States whose projects EPA
considers to be technically complex or to have severe time
constraints.
A State may request COE review by contacting its
Regional program office. EPA will request such a review
under EPA's technical assistance Inter-Agency Agreement
with the COE. The EPA Regional Office should consider the
cost of such a review and incorporate it into the Region's
SCAP estimates at the beginning of the fiscal year.
Should it prove impossible to include the required costs
in the SCAP, the EPA Region may request use of funds from
the Regional SCAP contingency fund for remedial planning
activities. The Headquarters SCAP contingency fund for
remedial action activities also can be used if all other
options have been considered and will not provide
sufficient assistance.
Internal State reviews should use the same general
criteria as those performed by the COE. Biddability/
constructability review by an independent A/E firm is
discussed in Section IV.C of this document.
D. SOLICITATION OF BIDS
When soliciting bids, States are required to give
adequate public notice of a proposed project. To
accomplish this the State should publish notifications in
daily newspapers and periodicals of sufficient circulation
to promote effective competition, such as newspapers with
a State-wide circulation and trade journals.
Information describing bidding procedures generally is
contained in several sections of the public notice of
solicitation and the bidding documents for the project.
States must ensure that the bidding documents are clearly
written, explicit, and internally consistent as described
above. The documents must include the following elements:
V-17
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9375.1-11
A statement giving adequate public notice of the
solicitation, inviting bids, describing the work
required for the project, and explaining when and
how the subagreement documents may be obtained or
examined (40 CFR 33.410)
The requested scope of services
Requirements for using minority and women's
business enterprises
Instructions to bidders
A clear explanation of the recipient's methods of
bidding and of evaluating bid prices, and the
State's basis and method for awarding the
subagreement (40 CFR 30.420(c))
The deadline (date and time) and place to submit
bids (40 CFR 33.420(f))
The required bid form (or proposal)
The date, time, and place at which the bids will
be publicly opened and read (40 CFR 33.425)
Representations and certifications
Names of persons to contact with questions
Measurement and payment requirements
General (and supplementary) conditions of the
subagreement.
For complex subagreements or where unique circumstances
require, the State may wish to conduct a pre-bid
conference. At the pre-bid conference, bidding procedures
are explained and prospective bidders are given the
opportunity to raise questions about the project.
E. EVALUATION OF BIDS
Bids are received in sealed envelopes from prospective
contractors and are opened publicly at the date and time
specified in the solicitation (40 CFR 33.425). Bids are
reviewed for general responsiveness to the bid
solicitation and the name and amount of each bid is read
aloud.
The State must uniformly and objectively evaluate all
bids submitted in response to a solicitation, to award the
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9375.1-11
subagreement to the lowest, responsive, responsible bidder
(40 CFR 33.430). In doing so, the State must use the
methods and criteria described in the subagreement
documents (40 CFR 33.420). This evaluation is intended to
fulfill two purposes. First, it confirms the bidder's
responsiveness to the contractual requirements of the
solicitation for bids. To be responsive, a bid must
constitute a definite and unqualified offer to meet all
material terms of the Invitation for Bids (IFB). Material
items are those that affect price, quality, quantity, or
delivery, or those that must be complied with at the risk
of rejection for nonresponsiveness. Exhibit V-3, on the
following page, provides a sample bid tabulation checklist
for confirming bidder responsiveness.
Second, the bid evaluation establishes the
responsibility, qualifications, and financial stability of
a bidder to perform the work of the project in accordance
with the subagreement documents, to the State's
satisfaction, and within the prescribed time. An
evaluation of a bidder's responsibility must include
consideration of the following items:
Past (completed) project performance record and
current workload
A list of major equipment available for use, and
the extent of ownership interest in each item
Credit references from materials suppliers
Bank references
Insurance references
Bonding company references, including present
bond capacity
Qualifications of proposed subcontractors
Experience of the proposed job superintendent and
foremen
Verification that the contractor or its employees
have not been banned from assistance program
participation by EPA (i.e., review the U.S. EPA
Master List of Debarred, Suspended, and
Voluntarily Excluded Persons, available from
Regional grants offices and the Office of
Regional Counsel) (40 CFR 32.400).
V-19
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PROJECT: EXHIBIT V-3
CONTRACT NO.: SAMPLE BID TABULATION CHECKLIST
BID DATE:
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V-20
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9375.1-11
Exhibit V-4, on the following page, depicts a sample bid
review checklist for evaluating a bidder's
responsibility. The State may obtain assistance from an
A/E firm in evaluating the bids, as described in Chapter
IV, but the State has full responsibility for ensuring
that the evaluation is conducted properly.
Two potential problems may be encountered in bid
reviews: bids may exceed the project budget stated in the
subagreement documents and solicitation, or bids may be
significantly less than the project budget. Both of these
are discussed below.
E.I Bids Exceeding the Project Budget
Bids in excess of the project budget may result from
one or more of the following causes:
Subagreement documents may be incomplete,
inaccurate, or ambiguous, thus forcing the bidder
to add contingencies to the bid to cover the
uncertainty of expected performance.
An unreasonable period of time for completion of
the work may require an accelerated rate of
production at a higher project cost.
Construction specifications may be unduly
restrictive, for example, by imposing
unreasonable or unfair conditions on the
contractor or by unnecessarily restricting
methods of construction and selection of
materials and products.
An insufficient period of time between the
solicitation for bids (advertisement or request
for proposals (RFP)) and bid opening may prevent
careful analysis and preparation of bids or
proposals.
The responsibility for incomplete or uncertain
data affecting the work may have been placed on
the contractor, who then must include
contingencies in the bid to cover the cost of the
worst possible conditions. For example,
specifications that place unreasonable or
technically impossible performance criteria upon
the contractor may result in bids that include
undesirable contingencies, such as for differing
site conditions. States are reminded of the
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9375.1-11
EXHIBIT V-4
SAMPLE BID REVIEW CHECKLIST
FOR CONTRACTOR RESPONSIBILITY
Project: Contractor
Bonding Company
Underwriter:
Local Agent:
Address:
Contact:
Telephone:
Years Affiliated:
Bond Capacity:
Bank
Name:
Address:
Contact:
Telephone:
Years Affiliated:
Insurance Company
Name:
Address:
Contact:
Telephone:
Years Affiliated:
Credit Reference (Materials Supplier);
Past Contracts;
Debarment - Is contractor, or a member of the contractor's firm, included on
EPA Master List of debarments?
Present Workload
Owner
Contract List
(3 years)
Equipment List
Resumes, Supt:
Foreman:
Description
Engineer (Reference)
Value ($)
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9375.1-11
requirement to include model subagreement clauses
in each subagreement (40 CFR 33.1030); the model
subagreement clause for differing site conditions
does not allow States to shift risk associated
with differing site conditions to contractors.
The original project budget may be in error
compared with the true market cost of completing
the work.
The State should consult with its A/E design firm when
bid prices significantly exceed estimates. If the lowest,
responsive bid received exceeds the amount anticipated in
the project budget, the State may, at its option,
implement one of the following actions:
Reject all bids and revise the documents
(correcting any problems such as those noted
above and/or reducing the project scope) and
rebid the work
Augment the available project funds with non-EPA
funds
Request additional EPA financial assistance
(after pursuing other options).
If the State chooses to take deductive alternates (defined
as optional scope of work items clearly identified as such
in the bidding documents), it must ensure that all
responsive bids are reviewed under the revised bid
formulation and that deductive alternates have been taken
in the exact order shown in the IFB. The State also must
ensure that only sufficient deductive alternates have been
taken to reduce at least one of the bids to or below the
amount of funds available and the scope of the project
remains consistent with the original project description.
If the low bid still exceeds the amount of available
funds, the State may:
Augment the available project funds with non-EPA
funds
Reject all bids and ask the design engineer to
redesign the project, within the scope of the
ROD, to reduce the total project cost
Request additional EPA funding.
The last option requires the State to provide EPA with
documentation supporting the need for additional funding.
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9375.1-11
Such documentation must include written confirmation that
redesign of the project within the approved scope and
project schedule cannot reasonably be expected to
sufficiently reduce the cost of the project, and a
certification that the State cannot reasonably provide the
additional funds required.
E.2 Bids Significantly Less Than the Project Budget
Bids significantly less than the project budget or out
of line with other bids can result from any of the
following causes:
Subagreement documents may be technically
incomplete or may not adequately describe the
scope of the project
The project budget may be overstated (overly
conservative)
The low bidder may have made a mathematical error
in the preparation of the bid or may have
significantly underestimated the scope of the
project
The subagreement documents may be
administratively ambiguous on the subject of how
the bid is to be prepared
The low bidder may have purposely submitted an
unreasonably low bid in an attempt to "buy-in".
Buying-in means intentionally submitting an offer below
calculated costs, while anticipating an increase in the
subagreement amount after award (e.g., through unnecessary
or excessively priced change orders), or expecting to
receive follow-on subagreements that would result in the
recovery of losses incurred on a buy-in subagreement.
Preparation of complete, accurate RFPs and bid documents
that clearly describe the scope of services or work
required can minimize buying-in benefits and control
additional costs after award.
If a bid mistake is discovered or suspected, the State
must request written verification of the bid amount in
question from the bidder, allowing the bidder adequate
time to respond. The bidder either may confirm the bid
amount by denying the error or may confirm the mistake and
request that the bid be either corrected or withdrawn. To
be allowed to correct a bid, the bidder must demonstrate
by clear and convincing evidence the existence of the
error, its nature, how it occurred, and the intended
V-24
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9375.1-11
amount. To withdraw a bid, the bidder must confirm the
existence of the error and how it occurred/ and must
request that the bid be withdrawn. Procedures for bid
correction and withdrawal normally are included under an
"Instructions to Bidders" section of the bidding documents.
States must carefully consider and document each
request for bid correction or withdrawal to ensure that
the integrity and legality of the bidding process is not
compromised and that the correction or withdrawal is not
unfair to other bidders. In many cases, if consistent
with State law, a State must waive minor informalities and
irregularities in the bid if doing so does not give a
bidder an identifiable advantage or benefit not enjoyed by
other bidders which would prejudice the subagreement award.
If the lowest bid is significantly less than the
project budget and the State has reasonably determined the
bidder to be responsive and responsible, the subagreement
should be awarded and the remaining funds used as a
contingency during construction. In this case, however,
States should be alert to the possibility of a "buy-in"
and should be prepared to administer the subagreement in a
manner that adequately controls change order costs.
F. BID PROTESTS
Bid protests are written complaints filed by parties
with a direct financial interest affected by the State's
procurement action. Complaints typically concern the
solicitation (e.g., content or wording of, or deficiencies
in, the IFB or RFP and in specifications) or the actual
award of subagreements. Bid protests may significantly
delay the initiation of a remedial project. Thus, in
order to reduce the likelihood of bid protests, it is
vital to ensure that solicitations for bids or proposals
be clear and unambiguous, and accurately present the
State's needs without unduly restricting competition.
A State is required to establish procedures to
promptly consider and resolve bid protests when they are
filed (40 CFR 33.1110). Although not required to do so, a
State generally should defer award of the subagreement and
delay initiation of remedial activities until it can make
a determination on the protest. If the State does not
defer the procurement, it assumes the risk that the EPA
Award Official may disallow the cost of the procurement
action(s) in question, in the event that a protest appeal
is filed and upheld. Upon the State's resolution of the
bid protest, all affected parties have seven calendar days
to file a protest appeal with the appropriate EPA counsel.
V-25
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9375.1-11
A protestor may file an appeal with EPA only after the
State has acted on the bid protest and the protestor has
exhausted all available administrative remedies at the
State level. Further, the protestor may file an appeal
only when the State's procurement action has adversely
affected the protestor's direct financial interests. A
subcontractor may file a protest appeal only for issues
relating to a contractor's award of a subcontract. The
administrative process for EPA's resolution of bid protest
appeals is contained in 40 CFR 33.1105-33.1145.
When EPA receives a protest appeal, the Agency will
request the State to defer award of the disputed
subagreement (40 CFR 33.1140). If the protestor does not
agree to a request from the State for a reasonable
extension of the bid or bid bond period while the protest
or appeal is pending, the State or EPA can summarily
dismiss the protest or appeal.
EPA's review of protest appeals is limited to issues
arising under the provisions of 40 CFR Part 33 and from
alleged violations of State and local laws or ordinances
when EPA has determined that there is an overriding
Federal concern. EPA reviews the record considered by the
State and any additional information regarding the basis
of the appeal and renders a final decision (40 CFR
33.1130-33.1145). EPA's decision concerning a protest
appeal is the final EPA action on the subject. If a State
does not comply with EPA's determination, EPA may take
action against the State under 40 CFR Parts 30 and 32 (40
CFR 33.1145(i)).
G. SUBAGREEMENT AWARD
If the State has self-certified its procurement
methods to EPA and EPA has not exercised its authority to
review and approve the award prior to its being made (40
CFR 33, Subpart A), the State can issue a formal Notice of
Award to the contractor immediately after its selection as
a result of the bid evaluation. If the State is not
self-certified, EPA must be given the opportunity to
review the procurement actions taken by the State before
formal Notice of Award can be given. In addition to the
Notice of Award, the State must issue instructions to the
contractor regarding the execution of the subagreement and
the filing of insurance required for construction, as
detailed in the subagreement bid documents. At the time
of award, it is customary to provide each bidder with a
copy of the bid tabulation.
V-26
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9375.1-11
*****
The State must properly administer the subagreement
for construction after its award to minimize the need for
change orders and to avoid claims. Procedures for
effective subagreement administration are found in the
following chapter/ Chapter VI - Subaqreement
Administration. To provide assistance in overseeing the
conduct of the remedial action, the State may obtain the
services of an A/E firm, as detailed in Chapter IV -
Engineering Services During Remedial Response.
V-27
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9325.1-11
VI. SUBAGREEMENT ADMINISTRATION
Subagreements must be administered carefully to
minimize unnecessary change orders and avoid claims.
Change orders and claims are most likely to occur as part
of construction, but may happen at any phase of remedial
response. Major components of a good subagreement
administration process are discussed in this chapter.
Section A provides guidance on holding a preliminary
performance planning conference after subagreement award,
to inform all key personnel of the roles and
responsibilities of each of the interested parties.
Section B discusses the submission of periodic progress
reports to enable the State to closely monitor the project
and to be advised of any problems that may develop.
Section C considers issues relating to change orders,
including conditions that warrant change orders, change
order evaluation, and change order preparation. Finally,
Section D addresses issues relating to contractor claims.
A. PRELIMINARY PERFORMANCE PLANNING CONFERENCE
After award of a subagreement, the State should
arrange a conference with key contractor personnel to
explain subagreement requirements and administrative
procedures. For construction subagreements, this meeting
typically is known as a pre-construction conference. For
engineering services associated with remedial design (RD),
this meeting usually is called a pre-design meeting.
Similar meetings should be held for the other phases of
remedial response.
These meetings are intended to promote efficient,
cost-effective mobilization of the work by:
Emphasizing applicable regulatory requirements
Setting the ground rules for working
relationships between State and contractor
personnel
Identifying the responsibilities and authorities
of each party
Identifying interrelationships of contractors,
consultants, the State, the municipality, EPA,
the U.S. Army Corps of Engineers (COE), and other
involved parties
VI-1
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9325.1-11
Highlighting critical subagreement requirements
Discussing project completion schedules or
intermediate milestones and any required
coordination between contractors
Discussing progress reporting and subagreement
payment procedures
Emphasizing requirements for such issues as
compliance with Federal, State, and local laws
and regulations, such as equal employment
opportunity, and for the use of minority,
women's, small, or disadvantaged business
enterprises
Detailing subagreement change order procedures,
insurance bonding, and safety requirements.
Discussion of these items at an early stage of all
subagreements is critical to efficient and effective
project administration.
B. MONITORING WORK PROGRESS - PERIODIC PROGRESS REVIEW
EPA conducts an ongoing review of technical progress
to ensure that the State carries out its Cooperative
Agreement commitments. Therefore, all contractors using
EPA funds, providing engineering services or construction,
or performing some other service for the State, should
prepare reports on their activities. The State, then, can
use these reports to keep EPA informed about progress at
the site. Monthly contractor reports should advise the
State of any anticipated problems in completing work
within the terms (scope, time, and amount) of each
subagreement to ensure that the State and EPA are involved
early in their resolution.
The report should be brief and, at a minimum, should
include the following elements:
Project/Subagreement Identification Information:
project title; subagreement number; date of the
report; contractor's name; project
phase/subagreement type (whether the contractor
is performing services during the RD,
biddability/constructability review, bid,
construction, or operation and maintenance (O&M)
phase of the remedial activities); services
offered (e.g., engineering, sample testing, well
drilling, construction, claims analysis/defense);
and reporting period.
VI-2
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9325.1-11
Cash Flow: original subagreement value; amount
of approved change orders; current subagreement
total; cumulative payments to the contractor to
date. The percentage of the current subagreement
amount paid to the contractor should be computed
and listed, and an estimate of the percentage of
the work that has been completed should be
provided.
Schedule: original subagreement duration, in
days; original subagreement completion date;
number of days of approved time extensions;
current total days of approved subagreement
duration (including extensions); approved
subagreement completion date; days elapsed to
date; percentage of subagreement time expended.
Financial Impacts: the contractor should report
any issues pending or identified in the last
reporting period that may affect the subagreement
amount. This includes any pending change orders
or potential claims. The contractor should
discuss the nature of the problems, proposed
actions for resolution or mitigation, and their
eligibility for compensation under the State's
Cooperative Agreement.
Affect on Progress: the contractor should
identify any activities that have fallen behind
schedule or any problems observed or expected
that may delay timely subagreement completion.
The contractor should discuss the nature of the
problems reported, proposed actions for their
resolution or mitigation, and their eligibility
for compensation under the State's Cooperative
Agreement.
Monthly progress reports should contain the specific
information in the sample presented in Exhibit VI-l, on
the following page.
Contractor reports should form the basis of States'
quarterly reports to EPA required by the Cooperative
Agreement. States may wish to include copies of
contractors' monthly reports as addenda to State quarterly
reports to EPA. This is particularly appropriate for
complex remedial planning or action projects or when a
problem on a project, which will significantly affect
project cost or progress, exists or arises. The State
should not wait until the next quarterly report to inform
EPA of significant changes in project cost or work
progress, but should do so immediately.
VI-3
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9375.1-11
EPA Project No.
Project Title
Subagreement No.
Contractor
Project Phase
(Subagreement)
EXHIBIT VI-1
SAMPLE MONTHLY PROGRESS REPORT
Report Date
RI/FS
Bid
Design Constructability/Biddability
Construction O&M
(OTHER)
Services Offered
Reporting Period From:
CASH FLOW
A. Original Subagreement Amount $
B. Approved Change Orders $
C. Current Total
To:
$
$
D. Cumulative Payments to
Date
E. Percent of Current
Subagreement Amount Paid
F. Estimate of Percent Work
Complete
(Explain Variance Between E & F Below)
FINANCIAL IMPACTS
SCHEDULE
A. Original Subagreement Duration
days
B. Original Subagreement
Completion Date
C. Approved Time Extensions
days
D. Approved Subagreements Duration
days
E. Approved Subagreement Completion
Date
F. Duration to Date
days
G. Percent of Time Expended
(e.g.. Pending Change Orders - Amounts & Eligibility & Possible Claims)
AFFECTS ON PROGRESS
(e.g.. Activities Behind Schedule & Observed Problems)
(Additional Comments on Back)
Contractor's Project Manager
VI-4
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9325.1-11
The State's quarterly reports to EPA will help EPA to
monitor the progress and conduct of the remedial
activity. The content of these reports must be sufficient
to present a chronological record of all site work and
should include the following elements:
An estimate of the percentage of the project
completed and the total project cost to date
Summaries of the following items for the
reporting period:
Work performed on the site
Community relations activities including
community contacts, citizen concerns, and
efforts to resolve any concerns
- Summary of change orders made to the
subagreement to date and their total costs,
and technical and administrative analyses to
document the need for such changes (see
Section C.3 of this chapter)
Problems or potential problems encountered
Status of the contingency fund to date (amount
used and the amount remaining)
Projected work for the next reporting period.
The report may include other elements, as necessary and
appropriate.
C. CHANGE ORDER ADMINISTRATION
A change order is a written order issued by the State
or its designated agent to its contractor authorizing an
addition to, deletion from, or revision of a subagreement
for either engineering services or construction. A change
order is issued after execution of the subagreement to
modify, within the scope of the project, the subagreement
cost or scope of work; to interrupt or terminate the
project; to revise the completion date; or, in general, to
implement any deviation from the original subagreement
terms and conditions. Change orders may occur during any
phase of remedial response, but are most likely to arise
during construction, when there is a greater chance of
encountering unforeseen site condition, changes in
estimated quantities, and other potential project delays.
VI-5
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9325. 1-11
Proper change order management is a key element to
avoiding delays in remedial response, increased costs, and
potential contractor claims. During remedial action,
States may manage construction subagreements directly, may
authorize the architectural/engineering (A/E) firm to do
so, or may secure the services of an independent
construction oversight firm. EPA also will consider
funding, as part of the Cooperative Agreement with the
State, the services of a firm specializing in change order
management. For the Superfund program to date, the design
engineering firm frequently has provided construction
oversight services. Administrative requirements for
management of change orders, including timing, form, and
provisions for construction subagreement adjustments,
appear in the model subagreement clauses of 40 CFR
33.1030. This section outlines change order procedures
specific to the Superfund program.
C.1 Conditions That Warrant a Change Order
Change orders may be required for the following
conditions:
Differing site conditions, such as:
- Subsurface or latent physical conditions at
the site differing materially from those
indicated in the subagreement
Unknown physical conditions at the site,
conditions of an unusual nature, or
conditions differing materially from those
ordinarily encountered and generally
recognized as inherent to work of the type
provided for in the subagreement.
Errors and omissions in plans and specifications;
errors are items that are described incorrectly
in the plans or specifications, whereas omissions
are items that are neither shown nor specified.
Changes instituted by modifications of regulatory
requirements, such as:
Changes in requirements for protecting
historical or archeological objects
- Revisions to building codes
- Revisions to zoning and land use plans
VI-6
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9325.1-11
- Revisions to Federal regulations and policies
- New congressional legislation.
Design changes, such as modifications to the
existing design which will offer a savings in
excess of all costs associated with the change
order, including future operation and maintenance
costs.
Overruns/underruns in quantities.
Factors affecting time of completion, such as:
- Temporary suspension of work
- Directed acceleration
- Time extension for delay beyond the
contractor's control
Constructive acceleration.
Changes in subagreement administration
procedures, such as:
Progress payment terms
Retainage release
- Occupancy
Testing
- Acceptance
- Warranties.
Resolution of claims.
Emergency conditions, such as acts of God or
civil disturbance.
Design changes usually originate as proposals volunteered
by the construction contractor, recommended by the
engineer, or requested by the State. Overruns or
underruns in quantities occur only in subagreements that
are formulated as a series of unit prices bid for each
unit required (e.g., cubic yards of earth moved), and are
developed when there is a difference between the
quantities estimated in the bid schedule and the
quantities actually required to complete the bid item.
VI-7
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9325.1-11
C.2 Evaluating Change Order Requests
In reviewing a contractor's request for a change
order, the State must evaluate the subagreement documents
and the contractor's compliance with the subagreement
requirements. A sample checklist for the State to use in
evaluating change orders is presented in Exhibit VI-2, on
the following page. If the request for a change order was
the result of errors and/or omissions in the plans and
specifications, the State must determine the nature of the
error or omission, the pertinent references in the plans
and specifications, the original intent of the references,
and whether the error or omission led to increased
contractor costs. At times, the need to comply with
changes in laws or regulations may require the State to
issue a change order. Similarly, the State should
evaluate other requests for change orders such as design
changes or underruns/overruns in quantities of materials.
Ultimate responsibility for administering change
orders rests with the State. Specifically, the State is
responsible for:
Determining whether a subagreement change order
is warranted, based on the terms of the existing
subagreement and a review of the circumstances
responsible for the alleged change
Negotiating a fair and reasonable price for each
required subagreement change
Maintaining accurate and complete cost records
for the change, including records of negotiation
Adequately documenting, for future reference, a
description of the agreed change and reason for
this change
Maintaining current and accurate fiscal
projections of subagreement and project
completion costs
Executing subagreement change order documents
efficiently and in a timely manner
Resolving disputes that may arise as a result of
a proposal for a change
Notifying EPA in writing of events or proposed
changes that may require a Cooperative Agreement
amendment
VI-8
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9325.1-11
Assessing the impact of change orders on progress
toward project completion and acting to mitigate
resulting project delays.
To expedite State review and approval of change orders,
contractors must:
Adequately describe the reason for each change
request
Submit change order proposals in accordance with
the procedures set forth in the subagreement
documents and enter into meaningful negotiations
on a necessary subagreement change
Furnish and certify the accuracy and completeness
of cost and pricing data to allow the State to
determine the necessity and reasonableness of the
cost proposed, and to enable EPA to determine the
eligibility and allowability of the extra work
performed at the cost proposed.
Project delays and disputes resulting from change
orders can be limited by effective and frequent
communication between States and contractors. When a
request for a change order is submitted, the State should
request and obtain from the contractor a detailed proposal
containing a thorough description of, and outlining
reasons for, the change, and a detailed explanation of
claimed extra costs. The change order request also must
reference the original subagreement documents and must
explain the specific circumstances associated with the
change.
When the State receives a change order request, it
must promptly investigate the circumstances for the
request, reach a decision on the merits of the change, and
notify the contractor of that decision. All negotiated
change orders must have a State-conducted cost analysis
(40 CFR 33.290(a) and Chapter II of this manual).
Upon reaching agreement with a contractor on the
description and cost of each change order, the State
should promptly execute a change order document which
modifies the base subagreement to include agreements
reached.
VI-lO
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9325.1-11
C.3 Superfund Requirements for Change Order Management
To ensure that adequate change order funds are
available during the remedial action, the Cooperative
Agreement funding the action will include a construction
contingency. This contingency fund usually is expressed
as a percentage of the total project costs, and is usually
in the range of eight to ten percent. (For additional
guidance on estimating construction costs and
contigencies, see the appropriate Superfund guidance
document referenced in Appendix D.
The State, under the terms of the Cooperative
Agreement, may be delegated the authority to approve any
change order which totals up to 20 percent of the project
contingency fund. Any change order that exceeds this 20
percent limit requires EPA approval. The State may
continue to approve such change orders until 75 percent of
the total contingency fund has been depleted. Thereafter,
the State must request EPA to provide additional funds
through an amendment to the Cooperative Agreement; this
amendment is not required, however, if the project is near
completion and no additional change orders are
anticipated. Depending upon the circumstances, the Region
may award funds from its Superfund Comprehensive
Accomplishments Plan (SCAP) contingency, may request funds
from the Headquarters SCAP contingency fund, or may
request that the Regional SCAP be amended to add new funds
for this purpose. In any case, the State must receive
written approval from EPA to exceed 75 percent of the
project contingency fund. A special condition regarding
the drawdown of the construction contingency fund is
routinely included in Cooperative Agreements funding
construction activities. (See the State Participation in
the Superfund Program manual.)
The EPA will monitor closely the expenditure of the
contingency fund to compare the remaining construction
contingency fund against the change orders to date and the
progress of the project, determining whether funds will be
sufficient to complete the project. Assistance is
available from the COE for this purpose. If it appears
that these funds will be exhausted before the project is
completed, the EPA Regional Office should seek additional
money either by requesting the funds from the Headquarters
SCAP contingency fund or by preparing an estimate of costs
for the following fiscal year's SCAP budget.
Before any change order may be approved, the State
must conduct a cost or price analysis (see 40 CFR 33.290).
Superfund program procedures also require the State to
perform a technical and administrative analysis to
determine:
VI-ll
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9325.1-11
The technical accuracy of the alleged differences
in quantities and technical requirements
The allowability of the proposed amounts
Compliance with contractual and regulatory
requirements
Conformance with the approved Cooperative
Agreement statement of work (SOW).
The State should forward its analysis to EPA with its
quarterly report and with any requests to (1) exceed 20
percent of the construction contingency fund for an
individual request, (2) exceed 75 percent of the
construction contingency for the total of all requests to
date, and/or (3) amend the Cooperative Agreement to add
funds. EPA will take this analysis into consideration
when reviewing the State's performance in managing the
contract to determine the allowability of costs under the
Cooperative Agreement.
C.4 Change Orders Requiring Amendments to the Superfund
Cooperative Agreement
States may rebudget existing subagreement funds in the
Cooperative Agreement to pay for necessary changes (see 40
CFR 30.700 for limitations on rebudgeting). State
approval of a change order, however, does not obligate EPA
to increase the amount of a Cooperative Agreement.
If EPA determines that a necessary change is
substantial and is within the scope of the project, the
State must request EPA to execute a formal amendment to
the Cooperative Agreement (40 CFR 30.700(d>). Change
orders requiring amendment of the Cooperative Agreement
include:
Significantly changed site conditions, to the
extent that project costs are significantly
affected
Changes increasing or decreasing the funds needed
to complete the project
Significant delay or acceleration of the project
schedule
Changes to the approved remedy.
These are the most common situations that necessitate a
change order; however, additional circumstances also may
require such an action.
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In determining whether to approve a major change to a
subagreement, States must first ascertain whether it is a
cardinal change. A cardinal change is one in which (1)
the altered subagreement attempts to purchase an item
essentially different from the one originally called for,
or (2) the cost of the changed subagreement greatly
exceeds the original subagreement cost. Such a change may
be unfair to other potential contractors because they may
have had no opportunity to compete for the subagreement;
this is a violation of EPA regulations requiring
competition on all procurement of supplies and services.
Although it may appear that the State should terminate the
subagreement and rebid the remaining work, including the
change, under a new subagreement, such a decision should
not be made at a site on the National Priorities List
(NPL) without first consulting EPA.
C.5 Preparation of the Change Order
After evaluating the change order request and
arranging for payment for the extra work, the State must
prepare and issue a change order. To do so, the State
should develop a formal, written document that contains
the following elements:
Identification of the change
Description of the change
Reason for the change
Difference in the unit price, if applicable
Difference in the subagreement price
Alteration of the subagreement schedule, if
applicable
Effect of the change on other work elements
State and contractor approval of the change order.
If necessary, the change order also should provide for EPA
review and comment.
D. CLAIMS
Claims consist of demands or written assertions by a
contractor seeking, as a matter of right, changes to the
subagreement (e.g., additional time and/or costs) which
the State has originally rejected through the change order
process. Claims may arise at any phase of remedial
response. A voucher, invoice, or other routine request
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for payment that is not in dispute when submitted is not a
claim. Such a submission, however, may be converted to a
claim if it is disputed as to liability or amount.
State failure to prevent or successfully resolve
contractor claims in a timely manner may greatly increase
project costs with no corresponding benefit. This is of
particular importance to States because EPA may not
participate in certain costs associated with contractor
claims. When EPA does, the share is the same as for
remedial action (either 90/10 or 50/50). States must
institute a vigorous program for claims prevention and, in
those cases where claims cannot be prevented, must take
action to ensure timely and effective claims resolution.
D.1 Causes of Claims
States may encounter claims in subagreements for
services, supplies, or construction, even when the project
has been conducted in a thoroughly satisfactory manner.
Claims may result from the contractor asserting the
following:
Defects in plans or specifications
Differing site conditions
Inadequate construction inspection and management
Failure to address contractor grievances promptly
and fairly, requests for time extensions, or
other problems
Failure to enforce subagreement provisions on
scheduling and completion time
Failure to negotiate time extensions and/or delay
costs, if any, associated with change orders
Failure to mitigate effects of delay
Unusually severe weather conditions
Strikes
Acts of God
A State decision to stop or suspend work or to
otherwise prevent the contractor from completing
work according to a previously approved schedule,
for reasons beyond the control of the contractor,
and not the fault or due to the negligence of the
contractor
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Subagreement termination for reasons beyond the
control of the contractor, and not the fault or
due to the negligence of the contractor
Failure to make payment according to the terms of
the subagreement; examples include:
Making arbitrary, unsubstantiated reductions
in progress payments at substantial or final
completion of the project
Making partial payments that, in addition to
failing to comply with the subagreement,
affect the contractor's ability to make
legitimate payments to subcontractors,
materials suppliers, and equipment vendors
Failure to release retainage
Delay in actual disbursement of approved
payments beyond the normally accepted
industry standard.
States should take every reasonable action to make prompt
payment on all subagreements, since, according to State
law or their subagreements, contractors may be entitled to
interest on earned but unpaid monies. Such interest
payments are not allowable costs under the Cooperative
Agreement and will have to be fully borne by the State.
D.2 Claims Prevention
It is critical that all subagreement documents that
States prepare include precise language on requirements
for administering changes in the SOW. Many claims can be
avoided if acceptable change order language is used to
resolve disputes between the contracting parties that
arise during the course of the work. States can reduce
the probability of receiving claims, to the maximum extent
possible, by avoiding initiating changes in the work.
Changes should be directed only if they are essential to
successful completion of the subagreement; if the expected
costs of a proposed change, including indirect effect and
delay costs, are less than the expected costs of
authorizing no change in the work; or if there is no
feasible alternative to performing the proposed extra work
(e.g., awarding a separate subagreement for the proposed
extra work at a future date).
To avoid significant cost and schedule increases, EPA
strongly encourages the State to exercise effective
project management practices that will reduce the
occurrence of claims. The State must ensure that such
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practices are employed throughout the project cycle.
Although the State may retain the services of other
parties for certain management tasks, the State is fully
responsible for the satisfactory completion of the work.
Therefore, the State must require any contractors for
construction management services to give immediate notice
of any and all unresolved change orders and disputes.
Some elements of effective project management which
will help prevent claims include:
Recognizing the importance of scheduling as a key
management tool by specifying that the contractor
provide a realistic and adequate project schedule
commensurate with the complexity of the project;
enforcing the schedule provisions; and requiring
periodic updates to show the adjusted project
progress and completion date
Maintaining a fully and completely documented
record of all aspects of the work, such as
photographs and a daily log of work progress,
personnel, and equipment on-site
Demonstrating a knowledge and understanding of
common sources of disputes and of situations
likely to result in claims during construction,
and exercising effective techniques to avoid such
situations
Providing timely responses to contractor requests
for direction, clarification, and adjustment
Instituting measures to ensure accurate and
complete plans and specifications (e.g.,
biddability/constructability reviews) and holding
pre-bid conferences
Maintaining open and effective communication with
all contractors throughout the course of the
remedial activities.
EPA, as a routine aspect of Cooperative Agreement
management, will consider funding State costs incurred in
implementing these practices.
D.3 Types of Claims
States must recognize that any action that changes the
subagreement scope or schedule increases the likelihood of
claims. Several types of claims are relevant to this
chapter and are discussed below. These include:
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Constructive changes
Defective specifications
Inconsistent administration of warranty provisions
Impossibility of performance
Acceleration
Delay.
States also should be aware that they cannot order a
change that is beyond the scope of the subagreement, known
as a cardinal change, without EPA review and approval.
The contractor is not bound to perform a cardinal change
unless the subagreement for remedial work is formally
revised.
Changes resulting from written or oral orders not
designated as change orders are known as constructive
changes. Any such order that causes a change, whether or
not designated a change order by the State, can be treated
as a change order by the contractor after giving proper
notice of its intent to seek additional compensation under
the change order provisions. Claims often arise when
constructive changes are directed in the work but the
State does not recognize or authorize a change order. A
contractor can assert that a constructive change has been
directed if work performed according to subagreement terms
is not accepted by the State; claims can thus result.
Defective specifications, also known as errors and
omissions, can result in claims if the contractor incurs
additional costs that are not reimbursed by change order.
The contractor is liable for all damages caused by
contractor negligence or unacceptable performance of work
under the contract, except for errors, omissions, or other
deficiencies attributable to the subagreement documents or
to another party. The contractor, therefore, is
responsible for correcting or revising any errors,
omissions, or other deficiencies on his/her part, without
being provided compensation.
If States administer any warranty provisions of
subagreements in a manner inconsistent with subagreement
terms, claims may arise.
Claims may result from an impossibility of performance
if restrictive subagreement language results in a
situation where it is impossible for the contractor to
complete the work and the problem cannot be resolved by
issuing a change order.
If States require subagreement work to be completed on
a schedule of shorter duration than originally agreed upon
in the contract documents, or if significant change order
work is directed to be completed within the original
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project schedule, additional costs will accrue to the
contractor. This is known as acceleration of work and a
claim may develop if additional compensation is not paid
to the contractor by change order.
When contractors are delayed in the completion of
their work for reasons that are beyond their control and
not brought about through their own fault or negligence,
it is reasonable to extend the subagreement by a period of
time equivalent to the delay. Failure to recognize and
accommodate effects on the contractor's progress may
result in claims.
D.4 Claims Resolution
When claims arise, States should implement a fair and
timely claims negotiation process in order to avoid
lengthy and costly arbitration and/or litigation. In
general, States should develop a thorough assessment
process to evaluate the merits of claims filed with the
State and the relative vulnerabilities of the parties
involved.
In pricing a claim, contractors may submit:
Unit prices
A lump-sum proposal
Cost plus fee, including labor, materials,
equipment, travel and subsistence, job site
overhead, home office overhead, and interest on
claimed costs unpaid (the State is required to
pay reasonable interest, but EPA is prohibited
from sharing in these costs under CERCLA
Cooperative Agreements).
Claims for delay may be quantified in terms of:
Labor cost escalation
Materials cost escalation
Idle labor and equipment
Extended overhead
Availability charges.
In resolving claims, States should review contractor
proposals for adequacy and completeness, in the same
manner as detailed previously for change orders, to
determine whether the claim is reasonable.
Due to the complexity of issues usually involved in
contractor claims, States may choose to engage the
services of consultants specializing in claims
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management. This is an allowable cost under a Cooperative
Agreement. The State must submit to EPA a request for
funding claims management, however, before it expends
funds for that purpose.
D.5 Funding of Claims Resolution
The State may request EPA to amend its Cooperative
Agreement to fund a portion of the legal, technical, and
administrative costs that the State incurs in analyzing
the merits of claims and the costs associated with
negotiating settlements of, or defending itself against,
these claims. (Costs associated with analyzing a claim
prior to litigation are considered to be part of
negotiation costs.) For these costs to be eligible under
the Cooperative Agreement, the claim must arise from work
within the scope of the Agreement; the costs must not be
incurred to prepare documentation that the claiming
contractor developed to support the claim against the
State; and the Award Official must determine that there is
significant Federal interest in the issues of the claim.
A formal amendment to the Cooperative Agreement,
specifically covering the claims defense costs, must be
executed before such costs can be incurred. To obtain an
amendment, the State must request the Award Official to
provide funding for claims negotiation and defense prior
to expending any money to resolve the claim(s). This
request should include a schedule, budget, and scope of
work required for claims management. EPA will review the
documents that the State provides and will assess whether
the claims resulted from poor project management by the
State or from other factors beyond the control of the
State or its contractor. This determination is the basis
for EPA's decision whether to fund claims negotiation and
defense costs.
If EPA decides to use Superfund monies for this
purpose, the EPA Regional Office must determine whether
funds are available in the Regional allowance to award an
amendment to the Cooperative Agreement. The Regional SCAP
contingency fund may be used to fund claims negotiation
and defense costs associated with remedial planning. For
claims negotiation and defense costs associated with
remedial action, the Region may request funds from the
Headquarters SCAP contingency fund. If possible, the EPA
Region may choose to include these costs in the following
fiscal year's SCAP budget.
D.6 Claims Negotiation
If EPA decides to fund the costs of claims negotiation
or defense, it will execute a formal amendment to the
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Cooperative Agreement. Claims negotiation or defense may
commence upon execution of the amendment. If the State
begins any negotiation or defense before the amendment is
executed, the associated costs will not be eligible for
reimbursement by EPA. In addition, EPA may decide against
the State's application for the costs of claims
negotiation or defense; such a ruling would make the State
accountable for all such costs.
Because a claim can be a large potential liability,
States must take full control of the situation using their
legal and technical staffs to provide advice and
assistance, enabling the State to mount a well-organized,
thoroughly prepared resolution effort. The following
suggested actions will aid the State in resolving claims:
Take immediate steps to mitigate further costs
being incurred by the contractor, or by any other
party, due to the claims issue(s)
Perform a timely, complete, and thorough review
of the issues raised by the claim to determine
the degree of merit that each issue may have
Negotiate with the contractor on the issues in a
good faith attempt to resolve each issue
Make a renewed effort to negotiate a fair and
reasonable settlement of the meritorious issues
and a reduction or elimination of the issues
found to be without merit
Maintain a full and completely documented record
of the claim negotiation process
Provide a high degree of attention to dispute
resolution (40 CFR 33.1030, clause 7).
During the claim(s) resolution process, the State may
choose to consult the EPA Region for technical and legal
advice. Because the State is responsible for paying all
meritorious contractor claims, EPA must carefully evaluate
the extent of EPA's interest in awarding to the State the
costs of negotiating or defending against claims.
D.7 Settlement of Claims
Should the State decide that the contractor's claim is
meritorious and thus negotiate a settlement, the State may
request EPA to amend its Cooperative Agreement to fund the
settlement. The costs of meritorious claims are allowable
for an increase to the Cooperative Agreement, provided
that the costs are within the scope of the project; are
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not caused by the State's mismanagement; and are not
caused by the State's vicarious liability, for the improper
actions of others. Should the State wish to exercise this
option, the Region must determine whether the costs
associated with the claim are: (1) allowable (40 CFR
30.200), (2) within the scope of work agreed upon, and (3)
consistent with the Record of Decision (ROD). Claims that
alter the cost-effectiveness analysis and selection of the
remedy may require EPA to prepare a supplemental ROD.
Approval of such a supplemental ROD must precede award of
funds for a Cooperative Agreement amendment.
To secure EPA review, the State should submit its
claims settlement proposal to the EPA Region. The EPA
Regional Office, with the assistance of Regional Counsel,
then will review the proposal from several aspects:
Technical accuracy of the alleged differences in
quantities and technical requirements
Allowability of the proposed amounts
Compliance with contractual, regulatory, and
statutory requirements, including the timeliness
and format of the contractor's change order
request
Conformance with the approved Cooperative
Agreement SOW
State performance in managing the contractor; any
costs incurred due to failure to properly manage
the contractor are not allowable under the
Cooperative Agreement.
This review should determine the reasonableness of the
proposed settlement and the allowability of the costs
under the Cooperative Agreement. EPA may request
technical assistance from the COE or EPA's own remedial
contractor to conduct this review. EPA review and
concurrence is not necessary for the settlement itself;
however, the review will determine whether money should be
added to the Cooperative Agreement for claims settlement.
If it is determined that EPA will fund the claim, the
EPA Regional Office must evaluate the availability of
necessary funds in the Region's SCAP. If allowable claims
are associated with remedial planning, the Region may
choose to use its SCAP contingency. For claims resulting
from remedial action, the Region may request funds from
the Headquarters contingency fund. If possible, the EPA
Regional Office may include the funds for such claims in
the following fiscal year's SCAP budget.
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This document, Procurement Under Superfund Remedial
Cooperative Agreements, has provided guidance on various
aspects of a State procurement program. Subjects
addressed include regulatory requirements, procurement of
engineering services, types of engineering services
provided during remedial response, procurement of
construction contractors, and subagreement
administration. Definitions of terms used in this manual
and additional references may be found in the appendices
which follow.
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APPENDICES
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APPENDIX A
TWO-STEP FORMAL ADVERTISING
The Agency's regulation governing procurement under
Superfund Cooperative Agreements with the States, 40 CFR
Part 33, requires the use of the formal advertising method
for procurement of construction subagreements. The
traditional formal advertising method requires a complete,
adequate and realistic specification. That is, both the
technical requirements and the means of satisfying those
requirements can be specified.
As the Superfund program moves into the use of
complex, innovative and alternative technologies, a method
of procurement other than traditional formal advertising
may be appropriate. An acceptable method is "two-step
formal advertising." The two-step method may be used when
it is possible to prepare a performance-based
specification to describe the requirements but impractical
initially to prepare detailed specifications to support an
award based on price.
Two-step formal advertising is a method of contracting
designed to obtain the benefits of formal advertising when
adequate specifications are not available. An objective
is to permit the development of a sufficiently descriptive
and not unduly restrictive statement of the recipients's
requirements, including an adequate technical data
package, so that subsequent procurements may be made by
conventional formal advertising. This method is
especially useful in procurements requiring technical
proposals, particularly those for complex projects. This
appendix describes both when the two-step formal
advertising procurement method may be used and the
procedures for implementing it.
A. APPROPRIATE USE OF TWO-STEP FORMAL ADVERTISING
when :
The two-step formal advertising method may be used
Complete, adequate and realistic specifications
are not available without technical evaluation or
may be too restrictive to permit full and free
competition
Definite criteria exist for evaluating technical
proposals
More than one technically qualified source is
expected to be available
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A fixed-price subagreement will be used.
By utilizing two-step formal advertising in these
situations, the use of formal advertising may be possible
in future procurements.
B. PROCEDURES FOR USING TWO-STEP FORMAL ADVERTISING
The procedures for implementing two-step formal
advertising consist of two steps. The first step is to
solicit a "Request for Technical Proposals" requiring the
submission of an unpriced description of what the bidder
will offer to meet the performance specifications. Each
offer is then reviewed, possibly discussed with the
offeror, and evaluated. The second step is an "invitation
for bids" requesting prices from those bidders whose
proposals have been determined to be technically
acceptable under the criteria set forth in the first
solicitation. Each of these steps is described in more
detail below.
Step one consists of the request for, submission,
evaluation, and (if necessary) discussion of a technical
proposal. No pricing is involved. The objective is to
determine the acceptability of the offer. In this
context, the word "technical" has a broad connotation and
includes, among other things, the engineering approach and
special testing techniques. This step is the appropriate
time for bidders to clarify questions relating to
technical requirements of the project. Implementation of
step one requires the following activities:
Preparing a public notice and solicit a request
for technical proposals.
Including in the request:
A statement of the intent to use the
two-step formal advertising method
Description of the work required
The requirements of the technical proposal
The criteria and relative weight of each for
evaluating technical proposals
A statement that the technical proposals
shall not include prices or pricing
information.
The date and hour by which the proposals
must be submitted
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- A statement that only those offerers whose
technical proposals are acceptable either
initially or as a result of discussions will
be considered
A statement that:
(1) a. The recipient may make a final
determination regarding the
proposal's acceptability solely on
the basis of the proposal as
submitted; and
b. May proceed with the second step
without requesting further
information from any offerer; or
(2) The recipient may request additional
information from offerers
A statement that offerers with unacceptable
proposals will be notified
A statement whether offerers may submit more
than one technical proposal
Any other information on requirements for
performing the work that may assist offerers
in determining whether to submit a proposal.
Upon receipt of proposals, the recipient must:
Remove any reference to cost or price, and
- Safeguard the proposals from unauthorized
disclosure.
Setting a deadline for offerers to submit
additional information.
Setting a deadline for completing the evaluation
of proposals.
Evaluating the proposals based on the criteria
stated in the request. Categorize proposals as:
acceptable, unacceptable or reasonably
susceptible of being made acceptable if
clarifying or supplementing information was
requested.
Proceeding with step two if there are sufficient
acceptable proposals to ensure adequate price
competition, or request offerers whose proposals
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were categorized as "reasonably susceptible of
being made acceptable" to submit additional
clarifying or supplementing information.
(Identify the nature of the deficiencies in the
proposal or the nature of the additional
information required and arrange discussions if
necessary.)
Notifying offerers of proposals that are
determined unacceptable and the basis for that
determination.
Once the technical proposals are obtained and evaluated,
cost issues can be addressed.
Step two involves the submission of sealed bids by
those who submitted acceptable technical proposals in step
one. Bids submitted in step two are evaluated and the
awards made in accordance with 40 CFR 33.430. In step two
the procedures for formal advertising are followed except
that:
Invitations for bids are issued only to those
offerers submitting acceptable technical
proposals in step one; and
The invitation for bids prominently states that
the bidder shall comply with the specifications
and the bidder's technical proposal.
By following these steps and utilizing two-step formal
advertising when appropriate, it may be possible to use
the traditional formal advertising method for future
procurements at the site.
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APPENDIX B
REPORTING OF MINORITY BUSINESS
UNDER SUPERFUND ACTIVITIES
As part of the Agency's Superfund report to Congress,
as required by CERCLA section 301(h)(l), the Agency is
required to report annually not only the awards executed
during the calendar year, but also what efforts it has
made to encourage or promote minority business
participation. In particular, section 105(f) of CERCLA,
as amended by SARA, requires annual reporting on use of
minority contractors. This requirement states that "...In
awarding contracts under this Act, the President shall
consider the availability of qualified minority firms...as
part of the annual report submitted...under this Act, the
participation of minority firms in contracts carried out
under this Act. Such report shall contain a brief
description of the contracts which have been awarded to
minority firms under this Act and of efforts made...to
encourage the participation of such firms in programs
carried out under this Act."
To comply with this statutory requirement, EPA
requires that all State agencies receiving Superfund
monies must complete the Department of Commerce Standard
Form 334, "MBE/WBE Utilization Under Federal Grants,
Cooperative Agreements, and Other Financial Assistance."
These reports must be filed on a quarterly basis through
the Regional MBE/WBE Coordinator for consolidation and
subsequent transmittal to Headquarters, Office of Small
and Disadvantaged Business Utilization (OSDBU)-(A-149C).
Superfund reporting is on a calendar-year basis and
not on a Federal fiscal year. Because of this, the
Regions must provide special instructions to the States to
assure that States fully recognize the standard reporting
system currently in place must continue in force,
including any Superfund activity, so that the Agency may
report such data to the U.S. Department of Commerce.
Additionally, a second report on Superfund activities is
required on a calendar year basis, i.e., January l to
December 31, for the Agency's report to Congress.
A second part of the annual report requires the Agency
to report on the efforts made to encourage participation
of minority firms in the Superfund program. Consequently,
each Region must, in narrative form, describe the actions
it has taken, (for example, seminars or procurement
conferences, counseling and outreach efforts etc.) to
encourage the participation and utilization of minority
firms. These activities and reports are a critical
element in the Agency's minority business "fair share"
policy and are carefully reviewed.
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APPENDIX C
RETAINING ARCHITECTURAL/ENGINEERING FIRMS FOR
FOLLOW-ON REMEDIAL RESPONSE ACTIVITIES
In many cases, recipients of Superfund Cooperative
Agreements want to retain the architectural and
engineering (A/E) firm that provided services during the
remedial investigation (RD/feasibility study (FS) phase
to perform follow-on activities during the construction
phase of remedial action. The Agency's procurement
regulations that apply to Superfund Cooperative Agreements
with the States, 40 CFR Part 33, require recipients to
readvertise and reevaluate subagreement awards and to
follow the public notice and evaulation requirements in 40
CFR 33.510 and 33.515 for competitively negotiated
subagreements whenever:
The initial subagreement did not include the
subsequent A/E services for the construction phase
State policies do not permit procurement for
activities where funding is not guaranteed.
States may, however, be granted an individual deviation
from this requirement by the Director of the Grants
Administration Division.
To permit timely and cost-effective response at
Superfund sites, the Agency approved a class deviation to
permit States to use the A/E firm procured to conduct any
or all of the RI, FS, or design to perform follow-on RI,
FS, design, or engineering activities without subsequently
going through the public notice and evaluation procedures
in 40 CFR 33.510 and 33.515. Recipients of Superfund
Cooperative Agreements must, however, comply with all
other requirements in Part 33 when awarding the follow-on
subagreements and must have followed all of the
requirements in Part 33 (including the public notice and
evaluation required in 40 CFR 33.510 and 33.515) for the
initial procurement of the A/E firm, or EPA must have
conducted the initial procurement.
This class deviation is documented in a memorandum
issued on November 18, 1983 by the Grants Administration
Division to EPA Regional Administrators on "Class
Deviation from 40 CFR 33.510 and 33.515 for Certain
Activities Conducted Under the Authority of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980." (also 48 Federal Register 56044,
December 19, 1983) This class deviation applies in the
following cases:
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Where the recipient conducted the RI/and/or FS
activities without EPA assistance but is using
EPA funds for follow-on activities. The
recipient may use the A/E firm for subsequent
work, provided that the recipient attests that:
It complied with the following requirements
when it selected the A/E firm:
Section 33.230 "Competition,"
Section 33.250(a)(l), (a)(2) (a)(3),
and (b) "Documentation,"
Sections 33.505 through 33.525
"Competitive negotiation,"
- It complied with the following conditions:
No employee, officer, or agent of the
recipient, any member of their
immediate families, or their partners
have financial or other interest in the
firm selected for award; and
None of the recipient's officers,
employees, or agents solicited or
accepted gratuities, favors, or
anything of monetary value from
contractors or other parties to
subagreements.
- If the recipient uses the procedures in this
paragraph to retain an architect or
engineer, any EPA-funded subagreement
between the A/E firm and the recipient must
meet all of the other provisions in Part 33.
Where the recipient conducted the RI, FS, or
design activities with EPA assistance but the
original subagreement did not include the
follow-on activities and the recipient wishes to
use the same A/E for follow-on Superfund remedial
activities, the recipient does not have to follow
the public notice and evaluation requirements in
33.510 and 33.515 for subsequent activities
provided that the recipient follows the rest of
the procedures in 40 CFR Part 33.
Where EPA conducted the RI, FS, or design
activities under a direct procurement contract
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but the recipient will assume the responsibility
for subsequent phases of remedial response under
a Cooperative Agreement, the recipient may use,
with EPA's approval, EPA's A/E contractor without
further public notice or evaluation, provided
that the recipient follows the rest of the
Part 33 requirements to award the subagreement.
Where the recipient awards a subagreement after
the effective date of this class deviation, the
initial request for proposals or bid
solicitations must clearly state the possibility
that the firm or individual selected could be
awarded a subagreement for follow-on services.
This class deviation saves time by eliminating the
requirement for separate procurement actions between the
various activities in the remedial action process and
provides continuity in A/E services. In addition, the
time required to conduct subsequent activites is reduced,
since the A/E firm is familair with the site conditions
and will have had the opportunity to develop any specific
expertise required to deal with the problems. This
deviation does not unduly restrict open and free
competition, because States are required to ensure
adequate competition for the initial procurement of A/E
firms.
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APPENDIX D
GLOSSARY OF TERMS
This appendix provides definitions of selected terms
used throughout the text. It is not intended to be
comprehensive in nature; rather, it attempts to highlight
some of the terms commonly used in the Superfund remedial
program. Statutory definitions have been quoted for those
terms defined in CERCLA while other definitions have been
taken from appropriate EPA regulations, guidance, and
publications.
Activity: A set of tasks that comprise a segment of the
sequence of events undertaken in determining, planning,
and conducting a response to a release or potential
release of a hazardous substance. For accounting
purposes, five activities have been defined:
Pre-remedial Activities
Remedial Investigation/Feasiblity Study
Remedial Design
Remedial Action
Operation and Maintenance.
Allowable Costs: Those project costs that are eligible,
reasonable, necessary, and allocable to the project; are
permitted by the appropriate Federal cost principles; and
are approved by EPA in the assistance agreement.
Amendment: A written revision to, or an expansion of,
terms included under a Cooperative Agreement, Memorandum
of Understanding, or Superfund State Contract signed by
both the Award Official and an authorized representative
of the State; other Federal-lead remedial response
agreements do not require formal amendments. An amendment
is necessary when the scope or dollar amount of an
agreement is significantly changed (see 40 CFR 30.200 for
other situations which require amendments). The original
agreement should define situations in which amendments
must be negotiated.
"As-Built" Construction Schedule: The "as-built"
construction schedule provides the actual initiation and
completion dates of all tasks performed throughout the
duration of a construction project. This is compared to
the planned schedule to evalute the effects of delays or
accelerations on task completions.
Award Official: The EPA official delegated the authority
to execute assistance agreements (grant or Cooperative
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Agreement) on behalf of the Federal government. This is
the Regional Administrator for Regional Cooperative
Agreements; the Chief, Grants Operations Branch is the
Award Official for Headquarters Cooperative Agreements
that have not been delegated to the Regions.
Biddability/Constructability: Determination of the
ability of a construction contractor to prepare a fair and
reasonable bid based upon the remedial design and
specifications, and then to construct the project using
currently accepted construction practices and techniques
without submitting change orders or claims.
Bid Protest: A written complaint filed by a party or
parties with a direct financial interest affected by a
procurement action.
Bond: An agreement pledging surety for financial loss
caused by an act or default of the bonded party or by some
contingency.
CERCLA: The Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 was enacted by
Congress to provide for liability, compensation, cleanup,
and emergency response for hazardous substances released
into the environment and the cleanup of inactive hazardous
waste disposal sites. It also is known as Superfund since
the act established a trust fund (Hazardous Substance
Response Fund) to financially support cleanup activities.
Change Order: A written order issued by a State, or its
designated agent, to its contractor authorizing an
addition to, deletion from, or revision of, a
subagreement, usually initiated at the contractor's
request.
Claim: A demand or written assertion by a contractor
seeking, as a matter of right, changes in subagreement
duration, costs, etc., which originally have been rejected
by the State. Claims usually are filed after the
completion of a subagreement.
Contract: The term used to describe a variety of
agreements or orders to acquire supplies or services for
the direct benefit of EPA (see "Subagreement").
Contractor: Any party to whom a recipient awards a
subagreement.
Cooperative Agreement (CA): An assistance agreement
whereby EPA transfers money, property, services, or
anything of value to a State for the accomplishment of
certain remedial activities or tasks, as authorized by
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CERCLA. It assumes a substantial Federal involvement in
the State's performance of these activities. The remedial
Cooperative Agreement provides general information about
the project, such as the approved budget, and any specific
conditions applicable to the project. It also documents
any required CERCLA section 104(c)(3) assurances.
Cost Analysis: The review and evaluation of each element
of subagreement cost to determine reasonableness,
allocability, and allowability.
Cost Share: The portion of allowable project costs that
the State contributes toward completing its project using
non-Federal funds. The cost share may include services as
well as cash contributions. (Sometimes referred to as
"non-Federal share" or "matching share.")
Debarment: An action taken by the Director, Grants
Administration Division under 40 CFR 32.206 to deny an
individual, organization, or unit of government the
opportunity to participate in EPA assistance or to receive
subagreements.
Deletion: The procedure by which a site is removed from
the National Priorities List (NPL). A final technical
report is submitted by the State documenting that the
criteria established in the feasibility study and Record
of Decision for the site cleanup have been met, and that
the remedy is performing adequately. This final technical
report is used to determine whether the hazard associated
with the site has been reduced or eliminated to a degree
allowing its removal from the NPL.
Deviation: Official EPA permission to differ on a
certain, specific point of regulation. EPA may issue a
deviation from any of its assistance-related regulations,
except for those that implement statutory and executive
order requirements. A deviation request may be made by
the State or by an EPA program office and must comply with
the requirements set forth in 40 CFR 30.1003. The
Director, Grants Administration Division, in EPA
Headquarters, approves or disapproves deviation requests.
Direct Cost: Those costs that can be identified
specifically with a particular cost objective and are so
charged. (Also see "Indirect Costs.")
Eligible Costs: Those costs in which Federal
participation is authorized by applicable statutes. (See
"Allowable Costs.")
Facility (statutory definition): (A) Any building,
structure, installation, equipment, pipe or pipeline
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(including any pipe into a sewer or publicly owned
treatment works), well, pit, pond, lagoon, impoundment,
ditch, landfill, storage container, motor vehicle, rolling
stock, or aircraft; or (B) any site or area where a
hazardous substance has been deposited, stored, disposed
of, placed, or otherwise come to be located; [this] does
not include any consumer product in consumer use or any
vessel.
Feasibility Study (FS): A study undertaken by the lead
agency (or responsible party if the responsible party will
be developing a cleanup proposal) to develop and evaluate
options for remedial action. The FS emphasizes data
analysis and is generally performed concurrently and in an
interactive fashion with the remedial investigation (RI).
The FS process uses data gathered during the RI. The RI
data are used to define the objectives of the response
action and to develop and screen remedial action
alternatives. Next, the FS involves a detailed analysis
of a limited number of alternatives and documentation in a
report.
Force Account Work; The use of the State's own employees
or equipment for construction or construction-related
activities (including architectural and engineering
services, or for repair of, or improvement to, a facility).
Geotechnical Investigation; A study of the soils
surface and subsurface found at a site. This involves
sampling of the soils to determine characteristics such as
plasticity, gradation, moisture content, load capacity,
etc., as well as chemical analyses to evaluate the extent
of contamination of the site with hazardous wastes.
Indirect Cost; Any costs that are incurred for common
objectives and that cannot be charged directly to any
single cost objective. These costs are allocated to the
cost objectives benefited, based on a fair method of
approximation. Indirect costs also are referred to as
"overhead" or "burden costs."
Master List; EPA's central list containing the names of
individuals and other entities ineligible to participate
in EPA assistance programs because they are suspended,
debarred, or under a voluntary exclusion.
Minority Business Enterprise (MBE); A minority business
enterprise is a business that is; (a) certified as
socially and economically disadvantaged by the Small
Business Administration; (b) certified as a minority
business enterprise by a State or Federal agency; or
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(c) an independent business concern that is at least 51
percent owned and controlled by a minority group member(s).
National Contingency Plan (NCP): Officially known as the
National Oil and Hazardous Substances Pollution
Contingency Plan (40 CFR Part 300), this regulation
outlines responsibilities and authorities for responding
to releases into the environment of hazardous substances
and other pollutants and contaminants under the statutory
authority of CERCLA and section 311 of the Clean Water Act.
National Priorities List (NPL): A list of the highest
priority releases or potential releases of hazardous
substances, based upon State and EPA Regional submissions
of candidate sites and the criteria and methodology
contained in the Hazard Ranking System, for the purpose of
allocating funds for remedial response. Published by EPA,
the NPL is updated periodically.
Price Analysis: The process of evaluating a prospective
price of a subagreement for goods or services without
regard to the contractor's separate cost elements and
proposed profit. The price analysis determines the
reasonableness of the proposed subagreement price based on
adequate price competition, previous experience with
similar work, established catalog or market price, law, or
regulation.
Procurement System Certification: The certification the
State signs after it has reviewed its procurement system
and compared that system to the minimum requirements of 40
CFR Part 33. The State either certifies that its
procurement system meets EPA's minimum standards, or that
the State's system does not meet the requirements in Part
33 and that the State will allow an EPA pre-award review
of proposed procurement actions.
Profit: The net proceeds obtained by deducting all
allowable costs (direct and indirect) from the price of a
subagreement. (This definition may vary from many firms'
definitions of profit because it is based on applicable
Federal cost principles; it instead may correspond to
those firms' definitions of "fee.")
Project: A group of remedial response activities at a
site intended to study and/or remedy a verified or
potential release of a hazardous substance that poses an
actual or potential significant threat to human health,
the environment, or real or personal property. Remedial
projects usually involve groupings of one or more of the
following activities: remedial investigation/feasibility
study, remedial design, remedial action, and/or operation
and maintenance.
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Record of Decision (ROD): The ROD is a document developed
for obtaining and officially recording the selection of a
specific remedial alternative, and contains an explanation
and justification for selection of the particular
alternative.
Remedy or Remedial Action (RA): As defined by section
101(24) of CERCLA, means those actions consistent with
permanent remedy taken instead of, or in addition to,
removal action in the event of a release or threatened
release of a hazardous substance into the environment, to
prevent or minimize the release of hazardous substances so
that they do not migrate to cause substantial danger to
present or future public health or welfare or the
environment. The term includes, but is not limited to,
such actions as the location of the release as storage,
confinement, perimeter protection using dikes, trenches,
or ditches, clay cover, neutralization, cleanup of
released hazardous substances and associated contaminated
materials, recycling or reuse, diversion, destruction,
segregation of reactive wastes, dredging or excavations,
repair or replacement of leaking containers, collection of
leachate and runoff, on-site treatment or incineration,
provision of alternative water supplies, and any
monitoring reasonably required to assure that such actions
protect the public health and welfare and the
environment. The term includes the costs of permanent
relocation of residents and businesses and community
facilities (including the cost of providing "alternative
land of equivalent value" to an Indian tribe pursuant to
CERCLA section 126(b)) where the President determines
that, alone or in combination with other measures, such
relocation is more cost-effective than and environmentally
preferable to the transportation, storage, treatment,
destruction, or secure disposition off-site of such
hazardous substances, or may otherwise be necessary to
protect the public health or welfare; the term includes
off-site transport and off-site storage, treatment,
destruction, or secure disposition of hazardous substances
and associated contaminated materials. The term also
includes enforcement activities related thereto.
Remedial Design (RD): The technical analysis and
procedures that follow the selection of remedy for a site
and result in a detailed set of plans and specifications
for implementation of the remedial action.
Remedial Investigation (RI): A process undertaken by the
lead agency (or responsible party if the responsible party
will be developing a cleanup proposal) that emphasizes
data collection and site characterization. The remedial
investigation is generally performed concurrently and in
an interdependent fashion with the feasibility study. A
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remedial investigation is undertaken to assess the nature
and extent of the problem presented by the release. This
includes sampling and monitoring, as necessary, and
includes the gathering of sufficient information to
determine the necessity for remedial action and to support
the evaluation of remedial alternatives.
Remedial Planning; A phase in remedial response initiated
at a site prior to implementing the remedial action.
Remedial planning encompasses the activities of remedial
investigation/feasibility study and remedial design.
States are not required to share in costs of remedial
planning at privately owned and operated sites; at
publicly operated sites they must share in remedial
planning costs only if and when a remedial action is
undertaken.
Remedial Project Manager (RPM); The official designated
by the lead agency to coordinate, monitor, or direct
remedial or other response actions.
Remedial Response; A series of cleanup activities
intended to provide permanent resolution of a release or
potential release of a hazardous substance from a site.
Remedial response generally includes the following
sequence of activities: remedial
investigation/feasibility study, remedial design, remedial
action, and operation and maintenance.
SARA; The Superfund Amendments and Reauthorization Act of
1986 was enacted by Congress to reauthorize CERCLA.
Scope of Work; The element of a remedial planning
agreement that generally outlines the activities, tasks,
and subtasks to be undertaken at a site. The scope of
work also provides general information on the objectives
of the project.
Services; A contractor's labor, time, or efforts that do
not involve the delivery of a specific end item, other
than documents (e.g., reports, design drawings,
specifications). This term does not include employee
agreements or collective bargaining agreements.
Short List: The list of firms, selected by a State, who
are judged to be qualified to perform services for a
specific scope of work. The short-listed firms are
selected based on an evaluation of statements of
qualifications and experience received from interested
firms in response to a solicitation for services issued by
the State. Short-listed firms are allowed to continue
participating in later phases of the procurement selection
process.
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9375.1-11
Site Survey: A topographic study of a site. Depending on
the location and circumstances, surveying required may be
aerial, ground, or a combination of the two.
Small Business: A business as defined in section 3 of the
Small Business Act, as amended (15 USC 632).
Statement of Work (SOW): The element of a remedial
response agreement that specifies in detail the
activities, tasks, subtasks, and objectives to be
performed pursuant to that agreement. The SOW should
contain salient points regarding the background of the
release or potential release, problem definition, purpose
of the work, and a description of the services to be
performed either by the State or by an EPA contractor.
Subagreement: A written agreement between an EPA
recipient and another party (other than another public
agency) and any lower tier agreement for services,
supplies, or construction necessary to complete the
project. Subagreements include contracts and subcontracts
for personal and professional services, agreements with
consultants, and purchase orders.
Superfund Comprehensive Accomplishments Plan (SCAP): A
document prepared by the EPA Regional office incorporating
cost estimates for the response activities to be
accomplished throughout a given fiscal year.
Suspension: An action taken by the Director, Grants
Administration Division under 40 CFR 32.300 to temporarily
disqualify an individual, organization, or unit of
government from receiving any EPA assistance or
subagreement.
Task: A discrete piece of work that addresses a single
objective specified by a statement of work for planning,
evaluating, or implemeting a response action: e.g. ,
hydrogeological study, hazardous waste characterization,
alternative analysis, construction of a fence, or
installation of a leachate control system.
Voluntary Exclusion: A term of settlement, in lieu of a
finding for debarment, under which a person or entity
agrees to abstain voluntarily from participation in
EPA-assisted projects.
Women's Business Enterprise (WBE): A business that is
certified as such by a State or Federal agency, or that
meets the following definition: A WBE is an independent
business concern that is at least 51 percent owned by a
woman or women who also control and operate it.
Determination of whether a business is at least 51 percent
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9375.1-11
owned by a woman or women shall be made without regard to
community property laws. For example, an otherwise
qualified WBE that is 51 percent owned by a married woman
in a community property State will not be disqualified
because her husband has a 50 percent interest in her
share. Similarly, a business that is 51 percent owned by
a married man and 49 percent owned by an unmarried woman
will not become a qualified WBE by virtue of his wife's 50
percent interest in his share of the business (40 CFR
33.005 (b)).
Work Plan: The detailed listing of all activities and
tasks to be conducted under a remedial response
agreement. It should also include a schedule for
completion of the work and show the outputs anticipated.
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APPENDIX E
REFERENCES
A. PROCUREMENT - GENERAL
Federal Acquisition Regulation, issued by Department of
Defense, General Services Administration, and National
Aeronautics and Space Administration, April 1, 1984.
Code of Federal Regulations, Title 40 - Protection of the
Environment.
Schnitzer, Paul A., U.S. Government Contract Bidding, 2nd
ed., Federal Publications Inc., 1982.
B. PROCUREMENT OF ARCHITECTURAL/ENGINEERING SERVICES
Acret, James, Architects & Engineers: Their Professional
Responsibilities, Shepard's Inc., Division of McGraw-
Hill, 1977.
American Consulting Engineers Council, A Guide to the
Procurement of Architectural and Engineering Services,
American Consulting Engineers Council, Washington,
D.C., 1979.
American Consulting Engineers Council, A Manual of
Practice for Consulting Engineering, American
Consulting Engineers Council, Washington, D.C., 1977.
American Society of Civil Engineers, Consulting
Engineering - A Guide for the Engagement of
Engineering Services, American Society of Civil
Engineers, New York, NY, 1975.
NSPE/PEPP, Guidelines for Development of Architect/
Engineer Quality Control Manual, NSPE, 1977.
C. PREPARATION OF CONTRACT DOCUMENTS
Abbett, Robert W., Engineering Contracts and
Specifications, 4th ed., John Wiley & Sons, Inc., New
York, NY, 1963.
Ayers, Chesley, Specifications for Architecture,
Engineering, and Construction, McGraw-Hill, USA, 1975.
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Construction Specifications Institute, Manual of Practice,
CSI, various dates, looseleaf.
Dunham, Clarence and Robert Young, Contracts,
Specifications and Law for Engineers, McGraw-Hill, New
York, NY, 1971.
Edwards, H. Griffith, Specifications, 2nd ed., D. Van
Nostrand Company, Inc., Princeton, NJ, 1961.
Engineers' Joint Contract Documents Committee, Standard
Forms of Agreement, published jointly by National Soci-
ety of Professional Engineers, American Consulting Engi-
neers Council, and American Society of Civil Engineers,
Washington, D.C., 1983:
o Standard Form of Agreement Between Owner and Engineer
for Professional Service (1979 ed.)
o Suggested Listing of Duties, Responsibilities, and
Limitations of Authority of Resident Project Represen-
tative (1983 ed.)
o Standard Form of Letter Agreement Between Owner and
Engineer for Professional Services (1979 ed.)
o Standard General Conditions of the Construction Con-
tract (1983 ed.)
o Standard Form of Agreement Between Owner and Contrac-
tor on the Basis of a Stipulated Price
(1983 ed.)
o Standard Form of Agreement Between Owner and Contrac-
tor on the Basis of Cost-Pius (1983 ed.)
o Change Order (1983 ed.)
o Application for Payment (1983 ed.)
o Work Directive Change (1983 ed.)
o Commentary on Agreements for Engineering Services and
Contract Documents by John R. Clark, Esq. (1981 ed.)
o Commentary on 1983 Edition of Construction Related
Documents by John R. Clark, Esq. (1983 ed.)
o Standard Form of Agreement Between Engineer and Archi-
tect for Professional Services (1980 ed.)
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9375.1-11
o Cross Reference Between EJCDC Standard General Condi-
tions of the Construction Contract (1910-8, 1983 ed. )
and AIA General Conditions of the Contract for Con-
struction (No. A201, Aug. 1976 ed.) (1983 ed.)
o Standard Form of Agreement Between Owner and Project
Manager for Professional Services (1977 ed.)
o Guide to the Preparaton of Supplementary Conditions
(1983 ed.)
o Suggested Bid Form and Commentary for Use (1983 ed.)
o Standard Form of Agreement Between Owner and Engineer
for Study and Report Professional Services (1980 ed.)
o Standard Form of Procurement Agreement Between Owner
and Contractor (1981 ed.)
o Procurement General Conditions (1981 ed.)
o Guide to the Preparation of Procurement Supplemental
Conditions (1981 ed.)
o Instruction to Bidders for Procurement Contracts
(1981 ed.)
o Commentary on Procurement Documents by John R. Clark,
Esq. (1981 ed.)
o Guide to Preparation of Instructions to Bidder
(1983 ed.).
Meier, Hans W., Construction Specifications Handbook, 2nd
ed., Prentice-Hall, 1978, looseleaf.
Rosen, Harold J., Construction Specifications Writing,
Wiley-Interscience, New York, NY, 1974.
D. CONTRACT LAW
Cohen, Henry A., Public Construction Contracts and the
Law, McGraw-Hill, New York, NY, 1961.
Dunham, Clarence W., Robert D. Young, and Joseph T.
Bockrath, Contracts, Specifications, and Law for Engi-
neers, 3rd ed., McGraw-Hill, 1979.
Hohns, H. Murray, Preventing and Solving Construction
Contract Disputes, Van Nostrand Reinhold Co., New York,
NY, 1979.
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9375.1-11
Howell, Edward B. and Richard P. Howell, Untangling the
Web of Professional Liability, Risk Analysis and Re-
search Corp., 1976.
Jabine, William, Case Histories in Construction Law,
Cahners Books International, Inc., Boston, MA, 1973.
Jessup, W. Edgar, Jr. and Walter E. Jessup, Law and
Specifications for Engineers and Scientists, Prentice-
Hall, Inc., Englewood Cliffs, NJ, 1963.
Jones, Harry W., E. Allan Farnsworth, and William F.
Young, Jr., Cases and Materials on Contracts, the Foun-
dation Press, Inc., Brooklyn, NY, 1965.
Pierce, Jotham D., Jr., Construction Contracts 1977 Course
Handbook, Practicing Law Institute, 1977.
Pierce, Jotham D., Jr., Construction Contracts in the
80 's, Practicing Law Institute, 1980.
Simon, Michael S., Construction Contracts and Claims,
McGraw-Hill, 1979.
Stokes, McNeill, Legal Considerations of Construction
Subcontracts, Stokes, Boyd, and Shapiro, 1975.
Stokes, McNeill, Construction Law in Contractors'
Language, McGraw-Hill, 1977.
Sweet, Justin, Legal Aspects of Architecture, Engineering,
and the Construction Process, 2nd ed., West, 1977.
Tomson, Bernard and Norman Coplan, Architectural and
Engineering Law, 2nd ed., Van Nostrand Reinhold Co., New
York, NY, 1967.
Vaughn, Richard C., Legal Aspects of Engineering, 3rd ed.,
Kendall-Hunt, 1975.
Walker, Nathan, Edward N. Walker, and Theodor K.
Rohdenburg, Legal Pitfalls in Architecture, Engineering,
and Building Construction, 2nd ed., McGraw-Hill, 1979.
Legal Briefs for Architects, Engineers, and Contractors,
McGraw-Hill, Biweekly.
E. INSURANCE AND BONDS
Derk, Walter T., Insurance for Contractors, 4th ed., Fred
S. Jones Co., 1980.
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9375.1-11
Rothschilf, Bernard, Construction Bonds and Insurance
Guide, American Institute of Architects, Washington,
D.C., 1973.
U.S. EPA, EPA Interim Guidance on Indemnification of
Superfund Response Action Contractors Under Section 119
of SARA, OSWER Directive Number 9835.5, U.S. EPA,
Washington, B.C., October 1987.
F. NEGOTIATION/ECONOMIC DECISION-MAKING
Taylor, George A., Managerial and Engineering Economy:
Economic Decision-Making, 2nd ed., D. Van Nostrand Com-
pany, New York, NY, 1975.
G. CONSTRUCTION MANAGEMENT
Clough, Richard H., Construction Contracting, John W.
Wiley, 1981.
Clough, Richard H. and Glenn A. Sears, Construction
Project Management, John W. Wiley, 1978.
Cushman, Robert F. , ed., McGraw-Hill Construction Business
Handbook, McGraw-Hill, 1978.
Cushman, Robert F., Michael S. Simon, and McNeill Stokes,
The Construction Industry Formbook, Shepard's Inc., Di-
vision of McGraw-Hill, 1979.
Douglas, Clarence, Construction Management, Prentice-Hall,
Englewood Cliffs, NJ, 1969.
Fisk, Edward R., Construction Project Administration, 2nd
ed., John W. Wiley, 1978.
Gorman, James E., Simplified Guide to Construction
Management for Architects and Engineers, Cahners Books
International, Inc., 1976.
Kavanagh, T.C., J.J. O'Brien, and F. Muller, Construction
Management - A Professional Approach, McGraw-Hill, USA.
McMahon, Leonard A. , 1985 Dodge Guide to Public Works anc1
Heavy Construction Costs, McGraw-Hill, 1984.
O'Brien, James J., CPM in Construction Management, 3rd
ed., McGraw-Hill, USA.
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O'Brien, James J., and Robert G. Zilly, ed., Contractor's
Management Handbook, McGraw-Hill, New York, NY.
Parker, A.D., D.S. Barrie, and R.M. Synder, Planning and
Estimating Heavy Construction, McGraw-Hill, USA, 1984.
Peurifoy, R.L., Construction Planning, Equipment, and
Methods, 2nd ed., McGraw-Hill, USA, 1970.
U.S. General Services Administration, Using Construction
Management for Public and Institutional Facilities, Pub-
lic Technology Inc., Washington, D.C., March 1976.
The Construction Contractor, Federal Publications Inc.,
biweekly.
H. CHANGE ORDERS
New Jersey Department of Environmental Protection, U.S.
Army Corps of Engineers - New York District, U.S. EPA -
Region II, Guide for Preparation and Processing of Con-
tract Modifications.
U.S. EPA - Office of Water Programs Operations, Management
of Construction Change Orders, U.S. EPA, Washington,
D.C., 1983.
I. CLAIMS
Engineering News Record, 1984 Spring Conference on
Construction Claims and Disputes for Owners, Contrac-
tors, Architects, and Engineers, Construction Education
Management Corp. and Engineering News Record, 1984.
Gavin, Donald G. and Joseph M. Zorc, Water Pollution
Construction Claims - Course Manual, Federal Publica-
tions, Inc., 1982.
O'Brien, James J., Construction Delay: Responsibilities,
Risks and Litigation, Cahners Books International, Inc.,
1976.
Richter, Irv and Roy S. Mitchell, Handbook of Construction
Law and Claims, Reston Publishing Company, Inc., Reston,
VA, 1982.
Rubins, R.A., S.D. Guy, A.C. Maevis, and V. Fairweather,
Construction Claims - Analysis, Presentation, Defense,
Van Nostrand Reinhold Co., New York, NY, 1983.
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Simon, Michael S., Construction Contracts and Claims,
McGraw-Hill, USA, 1979.
U.S. EPA - Region V, Prevention and Resolution of Claims
in EPA Funded Projects - Seminar Workbook, Project Man-
agement Associates, Inc., Ann Arbor, Michigan, 1983.
J. EPA OFFICE OF EMERGENCY AND REMEDIAL RESPONSE GUIDANCE
U.S. EPA, Guidance on Feasibility Studies Under CERCLA,
OSWER Directive Number 9355.0-05C, U.S. EPA, Washington,
D.C., June 1985.*
U.S. EPA, Guidance on Remedial Investigations Under CERCLA,
OSWER Directive Number 9355.0-06B, U.S. EPA, Washington,
D.C., June 1985.*
U.S. EPA, Superfund Remedial Design and Remedial Action
Guidance, OSWER Directive Number 9355.0-04A, U.S. EPA,
Washington, D.C., June 1986*.
These guidance documents are currently being revised,
or will be revised, to include new SARA provisions and
will be issued by OSWER when completed.
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