SUPERFUND PROCUREMENT OUTREACH PROGRAM
EVALUATION
DATE:
Please let us know what you thought about each session
DAY1
Introductory/Welcoming Remarks
Module 1 - Overview of the Procurement Process
Module 1 Exercise - Exploring Expectations
Module 2 - Pre-Solicitation Phase
Module 2 Exercise - Pre-Solicitation
Module 3 - The Solicitation
Module 3 Exercise - The Solicitation
1
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SUPERFUND PROCUREMENT OUTREACH PROGRAM
EVALUATION
DAY 2
Module 4 - Evaluation/Award Phase
Module 4 Exercise - Evaluation/Award
Module 5 - Contract Contents
Module 6 - Contract Administration
Module 7 - Change Orders and Claims
Module 7 Exercise- Change Orders and Claims
Wrap-up and Evaluation
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SUPERFUND PROCUREMENT OUTREACH PROGRAM
EVALUATION
POOR EXCELLENT
What is your overall evaluation of the Superfund
Procurement Outreach Program? 12345
How would you rate the overall match between the
program and your information needs? 1
Has the course helped you to better understand the procurement process? How?
Has the course helped you to understand better your responsibilities in the procurement process? _
Has the format of the course been effective in presenting and discovering the important issues
concerning procurement?
Do you have any suggestions for modifying the course?
changes in topics and/or content:
changes in procedures:
Please make any comments you think will be helpful in planning and delivery of this course in the
future.
Other comments:
How long have you been involved in the procurement process?
Name: (optional)
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MODULES OF THE
SUPERFUND PROCUREMENT OUTREACH PROGRAM
Introduction/Welcoming Remarks
Module 1 - - Overview of the Procurement Process
Module 2 - - Pre-Solicitation Phase
Module 3 - - The Solicitation
Module 4 - - Evaluation/Award Phase
Module 5 - - Contract Contents
Module 6 - - Contract Administration
Module 7 - - Change Orders and Claims
Wrap-up and Evaluation
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OVERVI
EW
OF
TH
SU
PER
FU
PROCU
EM
ENT
PROCESS
VIEWGRAPH #1
TITLE: Overview of the Superfund Procurement Process
KEY POINTS:
This overview presents a description of the Superfund non-Federal-lead
procurement process. EPA has established regulations for procurement
under CERCLA/S ARA, so that the process leads to the purchase of quality
services and products, while ensuring fair selection of contractors at
reasonable prices.
1.1
-------
OBJECTIVES OF THIS MODULE
Describe procurement regulations that apply
Present an overview of the procurement process
VIEWGRAPH #2
TITLE: Objectives of This Module
KEY POINTS:
One of the purposes of this module is to provide an understanding of how
crucial a fair and efficient procurement system is to the implementation of
a Cooperative Agreement.
* There are two procurement regulations that apply to Superfund
Cooperative Agreements. This module will review those regulations and
will refer to materials that provide guidance concerning procurement. The
purpose of this module is to give an overview of procurement procedures.
The following six modules will explore each step of the procurement
process in depth.
1.2
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ALTERNATIVES FOR OBTAINING SERVICES
Force Account
Intergovernmental Agreement
Procurement
VIEWGRAPH #3
TITLE: Alternatives for Obtaining Services
KEY POINTS:
There are three alternatives that recipients can use to obtain services.
These are through force accounts, intergovernmental agreements, or
procuring outside contractors.
Force account work is the use of the recipient's own employees or
equipment for construction, construction-related activities (including
architecture and engineering services), or repair or improvement to a
facility. When using force account work, the recipient must demonstrate
that the employees can complete the work as competently as, and more
economically than, contractors, or that an emergency necessitates the use
of the force account.
* To foster greater economy and efficiency, recipients are encouraged to
enter into State and local intergovernmental agreements for
procurement or use of common goods and services. An intergovernmental
agreement is a written agreement between governmental units under
which one public agency performs duties for or in concert with another
public agency using EPA assistance. This includes substate and
interagency agreements.
Contracting out (procurement) is the third option for obtaining services.
This is accomplished through procuring a contractor to provide goods
and/or services.
1.3
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WHAT IS PROCUREMENT?
The term procurement refers to the purchase of
Services
Construction Supplies/Equipment
VIEWGRAPH #4
TITLE: What is Procurement?
KEY POINTS:
Procurement refers to the purchase of services, construction, or
supplies/equipment. Examples of purchased services would be contracting
with an A/E firm to design the cleanup or to oversee the construction firm
that will conduct the cleanup.
Examples of procuring construction would be contracting with a
construction firm to build an on-site waste disposal unit or building a
fence to contain a hazardous waste site.
Examples of procuring supplies/equipment would be the purchase of a
vehicle, such as a bulldozer, that would be used for the cleanup, or daily
supplies needed at the site.
1.4
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PROCUREMENT REQUIREMENTS
40 CFR Part 35, Subpart O, Cooperative
Agreements and Superfund State Contracts for
Superfund Response Actions
40 CFR Part 31, Uniform Administrative
Requirements for Grants and Cooperative
Agreements to State and Local Governments
Other State/recipient rules which don't conflict
with EPA rules
VIEWGRAPH #5
TITLE: Procurement Requirements
KEY POINTS:
40 CFR Part 31, and Part 35, Subpart O are the regulations that apply to
procurements under assistance agreements. They contain detailed
information concerning procurement system evaluation, procurement
requirements, requirements for remedial responses, contract provisions,
and bid protests. Recipients should first refer to and use Part 35, Subpart
O, because this regulation references applicable Part 31 requirements.
40 CFR Part 31, the Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments, superceded
Parts 30 and 33 as of October 1,1988. Part 31 is intended to establish
uniformity in administrative, including procurement, rules among all
Federal agencies that award Federal grants and Cooperative Agreements to
State and local governments, and Federally-recognized Indian Tribes.
Due to statutory cost recovery requirements and the need to carefully track
all costs, Superfund recipients must comply with administrative
requirements sufficient to meet these provisions of the law. Therefore, the
requirements of 40 CFR Part 35, Subpart O, Sections 35.6500 - .6610
supplement the Part 31 procurement requirements. These additional
requirements are crucial for effective cost recovery from parties
responsible for a release.
1.5
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VIEWGRAPH #5 (cont.)
TITLE: Procurement Requirements
KEY POINTS:
Other recipient procurement practices that do not conflict with EPA
procurement rules.
In addition to reading the actual Federal regulations for information on
procurement, recipients can also refer to EPA!s Guidance: Procurement
nder Suoerfund Remedial Cooperative Agreements.
1.6
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DIFFERENCES BETWEEN
PART 31 AND PART 35, SUBPART O
SUBJECT
PART 31
State Govt.
Indian & Local Govt,
PART 35, Subpart O
State, Indian & Local
Financial
Management
System
Standards
State
Standards
Federal
Standards
Federal
Standards
Procurement
System
Standards
State
Standards
Federal
Standards
Federal
Standards
Small
Purchase
State
Standards
$25,000
$25,000
Records
Retention
3 years
3 years
10 years or more
VIEWGRAPH #6
TITLE: Differences Between Part 31 and Part 35, Subpart O
KEY POINTS:
One of the main differences between the procurement regulations outlined
in 40 CFR Part 31 and Part 35, Subpart O is that under Subpart O, States,
Federally-recognized Indian Tribes and local governments must all
comply with the Federal standards for Superfund procurements. Part 31
does not require States to comply Federal standards for procurements.
In addition, Part 35, Subpart O requires the recipient and the recipient's
contractor to retain all records for ten years following submission of the
final Financial Status Report for the site. If any litigation, claim,
negotiation, audit, cost recovery, or other action involving the records has
been started before the expiration of the ten-year period, the records must
be retained until completion of the action and resolution of all issues
which arise from it, or until the end of the ten-year period, whichever is
later. Also, the recipient and the recipient's contractor must obtain written
approval from the EPA award official before destroying any records. (40
CFR 35.6705(b))
Microform copies may be substituted for the original records, though the
recipient must have written EPA approval before destroying original
records. The microform copying must be performed in accordance with
the technical regulations concerning micrographics of Federal Government
records (36 CFR 1230 et seq.) and EPA records management procedures
(EPA Order 2160). (40 CFR 35.6705(c))
1.7
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-------
PURPOSE OF PROCUREMENT REGULATIONS
Ensure Fair Procedures
Promote Competition
Ensure Cost Effectiveness
Foster Efficient Process
VIEWGRAPH #7
TITLE: Purpose of Procurement Regulations
KEY POINTS:
Ensure that the selection process is fair and objective.
Ensure that the recipient gets the best services or products at the best price
Promote competition. The procedures are designed so that they do not
unduly restrict or eliminate competition by, for example, not allowing
sufficient time for response to a solicitation.
Ensure efficient responses. Adequate examination of the scope of work
and costs before the recipient starts the procurement will foster higher
quality procurements, effective cleanups, and a minimization of delays.
1.8
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TO BE OR NOT TO BE CERTIFIED
Procurement System
Certification
Limited EPA
Procurement
Oversight
Non-Procurement
System Certification
EPA May Review All
Contracts
VIEWGRAPH #8
TITLE: To Be or Not To Be Certified
KEY POINTS:
Under 40 CFR Part 35, Subpart O, recipients may use their own
procurement policies and procedures when conducting procurements for
Superfund responses.
To certify its system, a recipient must evaluate its own procurement
system to determine if the system meets the intent of the requirements of
40 CFR Part 35, Subpart O. After evaluating its procurement system, the
applicant or recipient must complete the "Procurement System
Certification" (EPA Form 5700-48) and submit the form to EPA with its
application. (40 CFR 35.6550 (a))
If the recipient certifies that its procurement system meets the full intent of
40 CFR Part 35, Subpart O, EPA will have limited oversight
responsibilities. (40 CFR 35.6550)
If the recipient's system is not certified, the recipient must follow the
requirements set up in 40 CFR Part 35, Subpart O and must allow EPA
pre-award review of all proposed procurement actions under the
Cooperative Agreement.
EPA oversight of procurement includes reviewing the recipient's
evaluation of a contractor's capability to perform the work for which they
were contracted, the recipient's solicitation process, and compliance with
procurement requirements, such as using minority- and women-owned
business enterprises.
1.9
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VIEWGRAPH #8 (cont)
TITLE: To Be or Not To Be Certified
KEY POINTS:
A recipient must certify its system once every two years, unless the
assistance agreement specifies a longer project duration.
Recipients are encouraged to seek assistance from EPA at all stages of the
procurement process. It is particularly important that recipients consult
with EPA when a procurement may be controversial. The Region plays
an important role in providing this assistance by offering appropriate
technical, financial, administrative, or legal experts who can address the
issues.
1.10
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EPA
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. DC 20460
PROCUREMENT SYSTEM CERTIFICATION
Form
OMB No 200C 0453
e*ptres '3 31
APPLICANTS NAME
ASSISTANCE APPLICATION NUMBER
APPLICANT S ADDRESS
SECTION I - INSTRUCTIONS
The applicant must complete and submit a copy of this form with each application for EPA Assistance If the
applicant has certified its procurement system to EPA within the past 2 years and the system has not been
substantially revised, complete Part A m Section II. then sign and date the form. If the system has not been
certified within the past 2 years, complete Part B. then sign and date the form.
SECTION II - CERTIFICATION
A I affirm that the applicant has w|thin;hiB pafst2 years certified
system compliesjwith 40 CFR Part planH that the system mi
CFR Part
to EPA that its procurement
meets the requirements in 40
he date of the applicant's latest certification is
MONTH/YEAR
B Based upon my evaluation of the applicant's procurement system. I, as authorized representative of the
applicant (Check one of the following:)
Di
CERTIFY that the applicant's procurement system will meet all of the requirements of 40 CFfl Part-IB
before undertaking any procurement action with EPA assistance
Please furnish citations 10 applicable procurement ordinances and regulations
DO NOT CERTIFY THE APPLICANT'S PROCUREMENT SYSTEM. The applicant agrees to
follow the requirements of 40 CFR Part ill. including the procedures in Appendix A. and
allow EPA oreaward review of proposed procurement actions that will use EPA assistance.
TYPED NAME AND TITLE
SIGNATURE
DATE
EPA Form 5700*48 (Rev. 5-84) Previous edition is obsolete
l.lOfa)
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COMPETITION
Restrictions on competition
Non-competitive pricing
practices
Written specifications
Public notice
Prequalified lists
VIEWGRAPH #9
TITLE: Competition
KEY POINTS:
The recipient must conduct all procurement transactions in a manner
providing maximum full and open competition. Some inappropriate
restrictions on competition include the following:
- placing unreasonable requirements on firms in order for them to
qualify to do business
- requiring unnecessary experience and excessive bonding requirements
- noncompetitive awards to consultants that are on retainer contracts
- organizational conflicts of interest
- specifying only a "brand name" product, instead of allowing an
"equal" product to be offered and describing the performance of other
relevant requirements of the procurement
- any arbitrary action in the procurement process
- State or local laws, ordinances, regulations, or procedures that give
local or in-State bidders or proposers preference over other bidders or
proposers. (40 CFR 35.6555 (a) & (b))
1.11
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VIEWGRAPH #9 (cont.)
TITLE: Competition
KEY POINTS:
Recipients should look for and be aware of noncompetiti ve pricing
practices between firms or between affiliated companies, such as bid
collusion or bid rigging. Contractors must include in their bid or proposal
a certification of independent price determination. (40 CFR 35.6550
The recipient's written specifications must include a clear and accurate
description of the technical requirements and the qualitative nature of the
material, product or service to be procured. This description must not
contain features which unduly restrict competition, unless the features are
necessary to:
- test or demonstrate a specific thing
- provide for necessary interchangeability of parts and equipment
- promote innovative technologies.
The recipient must avoid the use of restrictive specifications if at all
possible. (40 CFR 35.6555 (c))
When soliciting bids or proposals, the recipient must give adequate public
notice of the proposed projects, generally 30 days before receipt of bids or
proposals. The recipient must publish the public notice in professional
journals, newspapers, or publications of general circulation over a
reasonable area. (40 CFR 35.6555 (d))
Recipients may use prequalified lists of persons, firms, or products to
acquire goods and services. The list must be current and include enough
qualified sources to ensure maximum open and free competition.
Recipients must not preclude potential bidders from qualifying during the
solicitation period. (40 CFR 35.6555 (e))
1.12
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MBE/WBE AND SMALL BUSINESS
Fair share objectives
Affirmative steps:
- Place them on the solicitation list
- Solicit these firms whenever they are
potential sources
- Divide requirements into smaller tasks or
quantities, if economically feasible
- Establish delivery schedules which
encourage their participation, if economically
feasible
. Use services and assistance of the Small
Business Administration and the Minority
Business Development Agency
- Reauire crime contractors to take the above
VIEWGRAPH #10
TITLE: MBE/WBE and Small Business
KEY POINTS:
Each recipient must negotiate an annual "fair share" objective for awards
to MBE/WBEs. These fair share objectives must be negotiated before the
recipient awards any contracts. (40 CFR 35.6580 (c))
Recipients must take the above six affirmative steps to ensure that
Minority Business Enterprises (MBEs), Women Business Enterprises
(WBEs), and small business enterprises are used whenever possible as
sources of supplies, construction, and services. (40 CFR 31.36 (e)(2))
Recipients are also encouraged to engage labor surplus area business
enterprises in Superfund work by using the steps outlined above, and by
advertising procurement actions in MBE, WBE and small business
publications. (40 CFR 35.6580 (b))
1.13
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ROLES OF RECIPIENT
Resolve all contract and administrative
issues
Award contracts to responsible
contractors
Ensure contractors perform in
accordance with the contract
VIEWGRAPH #11
TITLE: Roles of Recipient
KEY POINTS:
The recipient is responsible for resolving all contract and administrative
issues associated with procurements under the Cooperative Agreement,
since EPA is not a party to any contract. (40 CFR 35.6550 (a)(6))
The recipient may award contracts under the Cooperative Agreement only
to responsible contractors, and the recipient must ensure that those
contractors perform in accordance with all provisions of the contracts. (40
CFR 35.6550 (a) (8))
The recipient is responsible for enforcing contract provisions.
1.14
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ROLES OF EPA
Oversee recipient's
procurement
May provide recipients
technical assistance
Limited participation on
selection panel
VIEWGR APR #12
TITLE: Roles of EPA
KEY POINTS:
EPA's role is to conduct necessary oversight reviews to ensure recipients
procurement practices comply with applicable statutes, regulations and
policies.
EPA may offer recipients technical assistance and respond to requests
from recipients for technical assistance related to the implementation of
the Federal regulations on procurement.
EPA staff participating on recipient selection panels:
- shall constitute a minority of the contractor selection panel (limited to
making recommendations on qualified offers and acceptable proposals
based on published evaluation criteria) for the contractor selection
process
- are not permitted to participate in the negotiation and award of
contracts
are not permitted to use EPA contractors to provide any support
related to procuring a recipient contractor
- can use the COE for review of recipient bidding documents
(biddability/constructability), requests for proposals, and bids and
proposals received.
1.15
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STEPS IN THE PROCUREMENT PROCESS
Identify
Procurement
Need
Prepare
Procurement
Paperwork
Prepare
Solicitation
and Public
Notice
Administer
Contract
Evaluate Bids
and
Proposals
and Award
Contract
Issue
Solicitation
Administer
any Change
Orders or
Claims
Complete
Finaf
Payment
VIEWGRAPH #13
TITLE: Steps in the Procurement Process
KEY POINTS:
Eight steps are combined into four distinct phases in the procurement
process:
- pre-solicitation phase
solicitation phase
- evaluation/award phase
contract administration.
Note: each of these phases, and the steps performed within each phase,
will vary according to the type of procurement method chosen. The above
diagram portrays the typical steps a recipient will take in procuring
services through sealed bidding or competitive negotiation.
The pre-solicitation phase involves identifying the procurement need,
making sure funding is available, determining the type of contract,
choosing the procurement method, and preparing the solicitation.
In the solicitation phase, die recipient must prepare and issue the public
notice, and issue the solicitation.
1.16
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VIEWGRAPH #13 (cont.)
TITLE: Steps in the Procurement Process
KEY POINTS:
The evaluation/award phase consists of evaluating the bids and proposals
according to the criteria set forth in the solicitation and awarding the
contract. This phase includes price, cost, profit, and technical analyses.
Contract administration is one of the most important parts of the
procurement process. This phase consists of reviewing reports;
maintaining procurement records; and modifying, terminating, and closing
out the contract. Claims and change orders may or may not be a phase of
the procurement process. This will depend on circumstances at the site
and the recipient and its contractor.
* The above steps in the procurement process will be covered as follows:
- Module 2 - pre-solicitation phase
- Module 3 - the solicitation
Module 4 - evaluation/award phase
- Module 6 - contract administration
Module 7 - change orders and claims.
In addition, Module 5 will discuss what provisions and clauses should be
included in a contract.
1.17
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PRE-SOLIC1TATION
PHASE
VIEWGRAPH #1
TITLE: Pre-Solicitation Phase
KEY POINTS:
Prior to starting procurement, it is essential that recipients perform a
comprehensive evaluation of their needs to determine the appropriate
procurement method. In addition, the recipient needs to determine the
type of contract to use, which, in itself, may be dictated by the type of
services or products being procured and the method being used.
2.1
-------
OBJECTIVES OF THIS MODULE
Explain the steps prior to producing the
procurement document
Explain the procurement methods and cite
examples of their use
Describe and give examples of contract types
VIEWGRAPH #2
TITLE: Objectives of This Module
KEY POINTS:
The main purpose of this module is to give participants a working
knowledge of the steps which take place prior to soliciting contractor
support. This includes identifying which procurement method should be
used and which type of contract will be used.
2.2
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PRE-PROCUREMENT DECISIONS
Identify needs for goods or services
Identify the project scope of work
Develop an in-house estimate
Verify that funds are available
Determine which procurement method and
contract type to use
VIEWGRAPH #3
TITLE: Pre-Procurernent Decisions
KEY POINTS:
The recipient must first identify which goods or services it needs to clean
up a site. This includes identifying the scope of work and the most cost
effective way to proceed. For instance, the scope of work could be
anywhere from just putting up a fence to contain a site, to building an
entire waste treatment plant to dispose of the waste.
The recipient must also develop an in-house estimate, taking into
consideration any unique problems at the site.
In addition to determining the procurement method, the recipient should
determine the type of contract. The procurement method used may have
an impact on the type of contract used.
2.3
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THE PROCUREMENT PROCESS
Requirement
Funding
Procurement
Request
Sealed
Bidding
(1FB)
t
Solicitation
Document
Negotiated
Process
(RFP)
THE PROCUREMENT TEAM
Procurement representative
* Technical representative
Cost analyst/auditor
Legal advisor
Evaluation
IFB
Award
Competitive
Range
Negotiations
Source
Selection
Contract
Administration
Completion
VIEWGRAPH #4
TITLE: The Procurement Process
KEY POINTS:
Recipients must be consistent in following their procurement procedures.
The recipient's procurement team should consist of a procurement
representative, technical representative, a cost analyst or auditor, and a
legal advisor.
At no point in the procurement process should any recipient staff member
answer any questions posed by offerors. To do so may give undue
advantage to an offeror. All questions concerning the procurement should
be answered by the recipient's contracting officer.
Once the solicitation has been distributed, the recipient may issue an
amendment to the solicitation that would identify questions offerors may
pose, and the answers to the questions. This amendment must be
distributed to all potential offerors who requested the original solicitation.
2.4
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SPECIFICATIONS, STATEMENTS/SCOPES
OF WORK
Specification
Statemen
of work
Specifications
- performance or
functional
- design specification
Statement of Work
- completion or end item
Scope of Work
- level of effort
VIEWGRAPH #5
TITLE: Specifications and Statements/Scopes of Work
KEY POINTS:
There are two types of specifications, performance or functional and
design specifications. A performance or functional specification tells the
contractor what the recipient wants, but not how to do the work. The
design specification tells the contractor both what the recipient wants and
how to do the work.
In a Statement of Work, the requirement(s) are sufficiently defined to
describe the service or product on a "completion" or "end item" basis.
In a Scope of Work, only the broad objective(s) of the requirement(s) are
defined and the product or service described on a level-of-effort (LOE)
basis over a specified period of time.
2.5
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Sample Statements and Scopes of Work
SAMPLE 1
The contractor shall assist the Agency in reviewing a variety of hazardous waste
practices including storage in containers, tanks, waste piles, and surface
impoundments; treatment in tanks, surface impoundments, incinerators and by
other physical, chemical thermal or biological treatment processes used by waste
treatment facilities. The contractor shall submit a final report that includes the
review findings and recommendations regarding waste treatment facilities handling
of hazardous waste.
B. The contractor shall review approximately four (4) waste treatment facilities in the
Kingston metropolitan area regarding their practice of storing hazardous waste in
containers and tanks, and the biological treatment process used. The contractor
shall submit a final report that includes the review findings and recommendations
regarding each facilities handling of hazardous waste.
The contractor shall review the Ace Waste Treatment (AWD facility located in
Kingston, USA, on their practice of storing hazardous waste in containers and
tanks, and the biological treatment process used. The contractor shall submit a final
report that includes the review findings and recommendations regarding AWTs
Dandling of hazardous waste.
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Sample Statements and Scones of Work
SAMPLE 2
A. Catesorv IT On-Site Visits
Conduct on-site visits within Region TV and perform as needed, waste sampling of
storage or disposal (TSD) facilities to collect data and/or verify information to assist
EPA and States in issuing or denying a RCRA permit
Activities shall include, but are not limited to. the collection, processing, and
evaluation of data related to:
site characteristics
wastes handled and their characteristics
* equipment and processes used
facility operation and maintenance procedures used
* equipment and systems for detecting and monitoring groundwater and
air quality.
B. Category TI: On-Site Visits
Conduct approximately 5 on-site visits within Region TV and perform at each site,
waste sampling, in accordance with the procedures set forth in the guidance
document of storage SL disposal (TSD) facilities and submit a report that shall verify
the following for each site:
»
site characteristics
wastes handled and their characteristics
equipment and processes used
facility operation and maintenance procedures used
equipment and systems for detecting and monitoring groundwater and
air quality.
C. Category D: On-Site Visits
A * ^^^h ^^B^fc V 4
perform at each site, waste sampling, in accordance with the guidance document of
storage QT disposal CTSD) facilities and submit a report that shall verify the
following for each site:
-
site characteristics
wastes handled and their ch
equipment and processes used
facility operation and maintenance procedures used
equipment and systems for detecting and monitoring groundwater and
air quality.
2.5 (b)
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SMALL PURCHASE
Obtain price or rate quotations from an
adequate number of qualified sources
Document actions
Make purchase
VIEWGRAPH #6
TITLE: Small Purchase
KEY POINTS:
Small purchase procedures are those relatively simple and informal
procurement methods for securing services, supplies, or other property that
do not cost more than $25,000 in the aggregate. (40 CFR 35.6565 (a))
If small purchase procurements are used, price or rate quotations will be
obtained from an adequate number of qualified sources.
Recipients may not divide procurement actions solely to get under the
$25,000 limit.
2.6
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NON-COMPETITIVE NEGOTIATION
Determine need and document reasons for
use and get award official approval, If
necessary
Negotiate with single firm or individual
Execute contract
VIEWGRAPH #7
TITLE: Non-Competitive Negotiation
KEY POINTS:
Noncompetitive negotiation is used only when the other three
procurement methods are inappropriate and one of the following
circumstances apply:
- the item is available only from a single source
- the public exigency or emergency will not permit a delay resulting
from competitive solicitation
- after solicitation of a number of sources, competition is determined
inadequate
- the EPA Award Official approves. (40 CFR 35.6565 (d))
Certified recipients may authorize non-competitive procurements in the
first three situations as stated above.
Cost analysis, i.e. verifying the proposal cost data, and the evaluation of
profit is required.
* Recipients may be required to submit the proposed procurement to EPA
for pre-award review.
2.7
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VIE\\GRAPH#7(cont.)
TITLE: Non-Competitive Negotiation
KEY POINTS:
Non-competitive negotiation is rarely appropriate for use in the Superfund
remedial program. Since EPA handles Superfund emergencies under the
removal program rather than the remedial program, an "emergency" is
generally not a basis for noncompetitive procurement. Furthermore, a
declaration of an emergency under State law or recipient standards does
not necessarily constitute an emergency under the EPA Superfund
program's criteria.
2.8
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COMPETITIVE NEGOTIATION
STANDARD METHOD
Public Notice
Issue request for proposal
(RFP)
Evaluate proposals
Develop competitive range
Request clarifications, if
necessary
Negotiate with offerers
Request best and final offers
Execute contract
VIEWGRAPH #8
TITLE: Competitive Negotiation - Standard Method
KEY POINTS:
Under the standard method of competitive negotiation, the recipient
provides public notice of its intent to hire a contractor and issues an RFP to
all interested parties. 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
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.
The recipient 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 contract to the firm determined by the evaluation to
be the most advantageous to the recipient. (40 CFR 35.6565 (c))
Examples of services generally procured under this method are:
- engineering services for Remedial Investigation/Feasibility Study and
Design
- construction management
- claims management
- public relations
- project management
- operations assistance
- biddability/constructability reviews
- legal services.
2.9
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COMPETITIVE NEGOTIATION
OPTIONAL METHOD FOR ONLY A/E SERVICES
Issue RFQ or use pro-qualified list
Develop "short list"
Issue RFP for technical proposals
Get proposals from the offerers
Evaluate proposals
Request cost proposal from highest ranked proposer
Negotiate with offerer of highest ranked proposal
Reach agreement with first offerer or negotiate with next offerer
Execute contract
VIEWGRAPH #9
TITLE: Competitive Negotiation - Optional Method for A/E Services
KEY POINTS:
Recipients may procure architectural/engineering services through a
qualifications-based process which involves locating the most highly
technically qualified firms and requesting them to submit technical
proposals. The recipient then selects the best technical proposal and
negotiates with the offeror for fair and reasonable compensation for a
specific scope of work.
This method can only be used in the procurement of A/E professional
services. The recipient may not use this method to purchase other types of
services even though A/E firms are a potential source to perform the
proposed effort. (40 CFR 35.6565 (c)(5))
The significant difference between the optional and standard methods for
procuring architectural/engineering services is that under the optional
method, price is not a selection factor. Under the standard method, the
recipient evaluates offerers taking price into consideration prior to
selecting the responsible offeror whose proposal is determined to be the
most advantageous to the recipient; using the optional method, the
recipient selects the best technical proposal and then negotiates a price for
the work.
2.10
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VIEWGRAPH #9 (cont.)
TITLE: Competitive Negotiation - Optional Method for A/E Services
KEY POINTS:
If the recipient is using the optional competitive negotiation method for
procurement of A/E services, the recipient may issue a Request for
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 response 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 the cost to perform
a project.
NOTE: An RFQ may be used to develop a prequalified list or for a
particular procurement. If it is used to develop a pre-qualified list, the list
must be kept current and include enough qualified sources to ensure
maximum open and free competition. Also potential bidders may not be
precluded from qualifying during the solicitation period. (40 CFR
35.6555 (e))
2.11
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SEALED BIDDING
Advertise for bids
(IFB)
Hold pre-bid
conference
Receive and open
bids
Evaluate bids
Issue notice of
award
Execute contract
ABC
CONTRACTOR
BID
VIEWGRAPH #10
TITLE: Sealed Bidding
KEY POINTS:
Sealed bidding requires the following conditions:
- complete, adequate and realistic specifications or purchase
descriptions
- two or more responsible bidders who are willing and able to compete
for the procurement contract
- a procurement that lends itself to the award of a fixed-price contract
- selection of a bidder principally on price.
Sealed bidding can be used to procure A/E and other services, though in
many circumstances it is not a practical approach.
2.12
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VIEWGRAPH #10 (cont.)
TITLE: Sealed Bidding
KEY POINTS:
Invitation for Bids (IFBs) are used in the sealed bidding method.
Information describing bidding procedures generally is contained in
several sections of the public notice of solicitation and the bidding
documents for the project. The public notice of the solicitation must state
when and how bidders may obtain and examine bidding documents.
In general, the bidding process includes the following elements:
- a statement giving adequate public notice of the solicitation, inviting
requests for the bids, describing the work required for the project, and
explaining when and how the documents may be obtained or examined
- requirements for using minority and women's business enterprises
- instructions to bidders
- the deadline (date and time) and place to submit bids
- the required bid form
- the date, time and place at which the bids will be publicly opened and
read
- bonding and insurance requirements
- representations and certifications required
names of persons to contact with questions
payment requirements
- conditions of the contract.
For complex contracts or where unique circumstances require, the
recipient 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.
2.13
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TWO-STEP SEALED BIDDING
Step One Step Two
Solicit technical Solicit sealed bids
proposals from acceptable
^ , proposers
Open proposals
- , . L. j . » j
Evaluate based on stated
criteria Award to lowest
responsive,
Obtain additional responsible bidder
information (if
necessary)
Evaluate revised
proposal(s)
Identify acceptable and
unacceptable proposals
VIEWGRAPH #11
TITLE: Two-Step Sealed Bidding
KEY POINTS:
Two-step sealed bidding is a method of contracting designed to obtain
competition when the specifications are not adequate for sealed bidding,
but the selection can be principally based on price. This method is
especially useful in procurements requiring technical proposals,
particularly those for complex projects.
The two-step sealed bidding method may be used when:
- adequate specifications are available to permit full and open
competition
- definite criteria exist for evaluating technical proposals
- more than one technically qualified source is expected to be available
- a fixed-price contract will be used.
2.14
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VIEWGRAPH #11 (cont.)
TITLE: Two-Step Sealed Bidding
KEY POINTS:
The first step is to solicit a "Request for Technical Proposals" requiring
the submission of an unpriced description of what the proposer will offer
to meet the performance specifications. Each offer is then reviewed. A
clarification of the proposal is requested from any offerer whose proposal
is susceptible of becoming acceptable. These proposals are then evaluated
and from the entire group, the recipient identifies all acceptable proposals.
The second step is an "invitation for bids", requesting prices from those
bidders whose proposal has been determined to be technically acceptable
under the criteria set forth in the first solicitation. These bids are then
opened, and an award is made to the lowest responsive, responsible
bidder.
2.15
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CONSTRUCTION
SPECIFIC REQUIREMENTS
Develop cost estimates
Conduct biddability/constructability
review
Prepare bidding documents
VIEWGRAPH #12
TITLE: Construction - Specific Requirements
KEY POINTS:
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 is
inadequate unless the project cost estimate is prepared to the same
standards.
Recipients should consider having their bid documents for remedial action
projects subjected to an independent biddability/constructability review,
after design is substantially complete. This is a way to help ensure that
the specifications are complete/accurate enough to submit a bid and help
prevent bid protests. Such technical assistance should should contribute to
the efficient and effective implementation of remedial activities.
After the construction cost estimates are made and
biddability/constructability review is done (if desired), the recipient can
prepare the bidding documents. These will be made available to
prospective bidders as part of the bid documents, along with the
solicitation for the project, and will provide specific information upon
which the construction firms can base their bids. After a contract has been
awarded, these documents become part of the contract.
2,16
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VIEWGRAPH #12 (cont.)
TITLE: Construction Specific Requirements
KEY POINTS:
A recipient must use sealed bidding to procure remedial action contractors
unless they first obtain concurrance from the Award Official. This
requirement does not apply to A/E services during construction or to post
removal site control activities. (40 CFR 35,6565(b))
2.16 (a)
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BIDDABILITY/CONSTRUCTABILITY REVIEWS
Independent review
Not required, but encouraged
May be required by EPA on some
projects
VIEWGRAPH #13
TITLE: Biddability/Constructability Reviews
KEY POINTS:
Generally, the purpose of a biddability/constructability review is to:
- review the accuracy of the construction specifications and cost
estimates
- determine whether currently accepted construction practices and
techniques are being used
- determine the adequacy of the proposed components of the quality
assurance project plan, the draft operation and maintenance plan, and
the site safety specifications
- determine whether the bid schedule included in the specifications will
enable the construction contractor to submit a fair and reasonable bid
- determine the accuracy of any estimated quantities of material
specified in the design
- determine that the responsibilities and liabilities of the construction
contractor and the recipient are clearly defined and detailed in the
design documents.
2.17
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VIEWGRAPH #13 (cont.)
TITLE: Biddability/Constructability Reviews
KEY POINTS:
The recipient 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
Corps of Engineers (COE).
As a condition of the cooperative agreement, EPA may also require the
COE to perform such a review for recipients whose projects EPA
considers to be technically complex or to have severe time constraints.
2.18
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SOLICITATION DOCUMENTS AND PROVISIONS
Must be technically adequate and
complete
Include all necessary documents
List contract provisions
Solicltit
Document
Specifications
Sample
Contract
VIEWGRAPH #14
TITLE: Solicitation Documents and Provisions
KEY POINTS:
Solicitation documents include plans, specifications, an explanation of the
procedures for bidding, evaluating bids, and awarding the contract, sample
contract, 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,
payment terms, and time allowed to complete the work specified.
The sample solicitation document provides a description of the terms and
conditions of the contract to be awarded.
Solicitation documents must include the following provisions:
-*
- labor standards
- conflict of interest
- bonding and insurance
- schedule requirements
- change order provisions
- report requirements
- record retention.
2.19
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SAMPLE CHECKLIST OF
CONSTRUCTION CONTRACT BID DOCUMENT CONTENTS
Index of Contract 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 Contract
Form of Contract
Performance Bond Form
Payment Bond Form
Certificate of Ability to Obtain Insurance
General Conditions of the Contract
Supplemental General Conditions of the Contract
Federal Requirements and Contract Provisions
Davis-Bacon Wage Rate Determination
General Contract 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
dose-out Requirements
Technical Specifications
Drawings and Plans (certified by a registered professional engineer)
Supplemental Data (e.g., geologic data, hydrologic data)
2.19(a)
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Project:
SAMPLE BID REVIEW CHECKLIST
FOR CONTRACTOR RESPONSIBILITY
Contractor
Bonding Company
Underwriter
Local Agency:
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
Debannents?
Present Workload
Owner
Contract List
(3 years)
Equipment list
Resumes, Supt:
Foreman
Descrippon
Enrineer (Referenced
Value ftt
2.19CW
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CONTRACT DEFINITION
A contract is:
- an agreement
- between two competent parties
- for a valid consideration
- to accomplish a lawful purpose
with terms clearly set forth in
writing
- in a legal form
VIEWGRAPH #15
TITLE: Contract Definition
KEY POINTS:
A contract must contain all six elements as stated above.
2.20
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TYPES OF CONTRACTS
Fixed-price
Cost reimbursement
Time and materials
Percentage-of-construction cost
Cost-plus-percentage-of-cost
VIEWGRAPH #16
TITLE: Types of Contracts
KEY POINTS:
For the Superfund program, EPA regulations and procedures specify that
some contract types are preferable in certain instances, while others are not
allowed, in any instance.
Superfund contracts are generally either fixed-price or cost reimbursement
contracts.
A fixed-price contract 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 contract also may be negotiated for
services whose scope can be defined clearly.
Cost reimbursement contracts should only be used when uncertainties
involved in performance do not permit costs to be estimated with
sufficient accuracy to use any type of fixed-price contract. The fee is fixed
at the inception of the contract and does not vary with actual costs
incurred. The extent of the performance is limited to the estimated cost.
This type of contract provides the contractor only a minimum incentive to
control costs.
The cost-plus-fixed-fee contract is the type of cost reimbursement contract
most commonly used for obtaining services other than construction on
Federally-assisted projects.
2.21
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VIEWGRAPH #16 (cont.)
TITLE: Types of Contracts
KEY POINTS:
The recipient may use time and material contracts only if no other type of
contract is suitable, and if the contract includes a ceiling price that the
contractor exceeds at its own risk. (40 CFR 35.6575 (c))
Used many years ago, percentage*of-construction-cost contracts
established the profit for a project as a percentage of the construction
costs. It is not allowed when Federal funds are involved in the contract,
Cost-plus-percentage-of-cost contracts apply a multiplier, including a
profit, to direct costs of a project to determine total costs. It is not allowed
when EPA funds are involved in the contract
2.22
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FIXED-PRICE CONTRACTS
Firm fixed-price
- requirements are known
- lump sum
Fixed price Indefinite quantities
- required quantity unknown
- unit prices
- hourly rates
- not to exceed limit
VIEWGRAPH #17
TITLE: Fixed-Price Contracts
KEY POINTS:
Under a fixed-price contract, the recipient and its contractor agree upon a
price for the supplies, services or construction to be provided. This price,
then, is fixed regardless of the final costs of the project. The total amount
of funds allotted to the contractor can be changed only if a change order is
negotiated.
2.23
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FIXED PRICE CONTRACT EXAMPLE
HOURLY RATES
LUMP SUM
Proposed
Fixed Hourly Rate: $36/hour
Not to Exceed:
Actual
$5,400
(150 Hours)
Contractor Provides: 95 hours
N/A
N/A
N/A
Contractor Receives: $3,420
($36 x 95)
$5,400
VIEWGRAPH #18
TITLE: Fixed Price Contract Example
KEY POINTS:
In this example we are using an hourly rate of $36.00. It is proposed that
the project will cost, at most, $5,400 or 150 hours of work. The actual
work, however, only cost $3,420 or 95 contractor hours. Thus, using the
fixed price (hourly rate) contract in this example was beneficial to the
recipient, since the actual cost was less than that anticipated at the start of
the project.
For a fixed-price (lump sum) contract, the price is fixed at $5,400 and this
is the amount that will be paid even if the actual costs for the project are
less. If the costs are actually higher than $5,400, only $5,400 will be paid,
unless an amendment is made to the contract.
2.24
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COST REIMBURSEMENT CONTRACT
Cost-plus-fixed-fee
+ EED - completion
- term
COST
The completion type contract is the preferred
method because the obligation is assumed
by the contractor.
VIEWGRAPH #19
TITLE: Cost Reimbursement Contract
KEY POINTS:
The cost-plus-fixed-fee completion contract describes a statement of work
and obligates the contractor to complete defined tasks and to deliver a
specific end product. This contract may require additional effort with an
increase in cost, but no increase in fee.
The cost-plus-fixed-fee term contract describes a scope of work in general
terms and obligates the contractor to devote a specified level of effort
(hours) for a stated period of time.
2.25
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COST-PLUS-FIXED-FEE CONTRACT EXAMPLE
Negotiated
Estimated Cost
Fixed Fee:
Cost-plus-fixed
fee:
$5000
500
$5500
Cost Example (A) Cost Example (B) Cost Example (C)
Cost:
$3500 Cost:
$5400 Cost:
$5400
Fixed Fee: 500 Fixed Fee: 500 Fixed Fee: 550
Contractor
Receives:
Contractor
Receives: $5900
Contractor
Receives: $5950
VIEWGRAPH #20
TITLE: Cost-Plus-Fixed-Fee Contract Example
KEY POINTS:
In examples (A) and (B), the recipient still pays the contractor the same
fee, even if the actual cost is above that anticipated at the beginning of the
project.
In example (B), the contract must be changed to allow for costs above the
original ceiling of $5,500. In this case, the statement of work stays the
same.
In example (C), the statement of work has been changed and the contractor
is entitled to an increased fee, which has been negotiated.
2.26
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EXAMPLES OF CONTRACT FIXED FEE LANGUAGE
NOTE: Examples 1 3 represent attempts to define the fixed-fee to be associated with the final contract.
However, they are actually somewhat ambiguous. Example 4, on the other hand, represents a
more precise way of wording the intent.
EXAMPLE 1
FIXED FEE: In fulfilling the terms of this CONTRACT, a fee shall be paid to the ENGINEE
plus 5%. Such costs shall not exceed those shown in the contract
EXAMPLE2
FIXED FEE: A negotiated fee in this CONTRACT shall equal seventeen thousand, nine hundred and
forty-two dollars ($17,942.00). This Fixed Fee is not subject to audit, and is not subject
to review or modification. In no case shall the Fixed Fee exceed ten percent (10%) of
estimated cost
EXAMPLES
COMPENSATION:
The fee which the Department agrees to pay and the Contracting Party agrees to receive for satisfactory
completion of the services to be rendered pursuant to this contract shall not exceed a total sum of One
Hundred Eight-One Thousand, Five Hundred Seventy-Eight Dollars ($181,578.00), see Appendix B
attached Travel and other allowable expenses shall constitute part of the maximum payable under the
terms of this contract
4
PAYMENT:
Payment to the Contracting Party for services rendered shall be made according to the following:
* A maximum of ninety percent (90%) of the total contract amount shall be available for progress
payments to the contractor prior to completion of the contract Invoices for progress payments
shall be based upon the percentage of work completed and shall be submitted monthly, setting
forth with specificity the services rendered at each site by work and task element number and
allowable cost charged in accordance with the authorized fees and charges provided in Appendix
B.
Final payment for the remaining ten percent (10%) of the total contract amount shall be made upon
completion of the project and approval of the final report of the Department.
Travel and other allowable expensed shall be reimbursed in accordance with the Division of
Administration's State General Travel Regulations, within die limits established for State
Employees, as defined in Division of Administration Policy and Procedure Memorandum No. 49
(Revised 8-82), Section 1, B.
2.26 (a)
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APPENDIX B
Cost Summary Breakdowns
Direct Labor Cost
Level
Professional 4 17.72 4,005
Professional 3 12.50 9,125
Professional 2 9.62 14,622
Professional 1 7.75 11,393
Clerical 6.63 1.485
Total Direct Cost 40,630
Travel Costs
Transportation
Subsistence
Total Travel Costs
Ea uiDment and S unclies
Drillers Subcontract
Subtotal
Total Costs
EXAMPLE4
ESTIMATED COST AND FIXED
Indirect Costs
Rate Base
200% 40,630 8
Total Indirect Costs
.260
8 1 ,260
10,000
5.000
15,000
10,000
2QJ2QQ
166,890
Profit (10% (Direct Cost + Indirect Cost)) 14.688
181,578
The estimated cost for performance under this contract is S . The fixed fee is $,
The total estimated cost and fixed fee for performance under this contract is $ .
(b)
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Sample Clauses for Term Type Contracts
Level of Effort
a. The Contractor shall perform all work and provide all required reports within the
level of effort specified below. The Government will order 161,000 direct labor
hours for the base period which represents the Government's best estimate of the
level of effort required to fulfill these requirements.
b. Direct labor includes personnel such as engineers, scientists, draftsmen,
technicians, statisticians, and programmers and not support personnel such as
company management, typists, and key punch operators even though such support
personnel are normally treated as direct labor by the Contractor. The level of effort
specified in paragraph (A) includes Contractor, subcontractor, and consultant labor
hours.
c. If the Contractor provides less than 90 percent of the level of effort specified for the
base period or any optional period ordered, an equitable downward adjustment of
the fixed fee for that period will be made. The Government may require the
Contractor to provide additional effort up to 110 percent of the level of effort for
any period until the estimated cost for that period has been reached. However, this
additional effort shall not result in any increase in the fixed fee.
d. If the level of effort specified to be ordered during a given base or option period is
not ordered during that period, that level of effort may not be accumulated and
ordered during a subsequent period.
e. These terms and conditions do not supersede the requirements of either the
"Limitation of Cost" or "Limitation of Funds" clauses.
Work Assignments
a. The contractor shall perform work under this contract as specified in written work
assignments issued by the Contracting Officer.
b. Each work assignment will include: (1) a numerical designation; (2) the estimate
of required labor hours; (3) the period of performance and schedule of
deliverables; and (4) the description of the work.
c. The Contractor shall acknowledge receipt of each work assignment by returning to
the Contracting Officer a signed copy of the work assignment within 10 calendar
days after receipt. The Contractor shall begin work immediately upon receipt of a
work assignment.
d. This clause does not change the requirements of the "Level of Effort" clause, nor
the notification requirements of the "Limitation of Cost" clause.
e. Work assignments shall not allow for any change to the terms or conditions of the
contract. Where any language in the work assignment may suggest a change to the
terms or conditions, the Contractor shall immediately notify the Contracting Officer,
2.26(c)
-------
Technical Direction
a. The Project Officer will provide technical direction on contract performance.
Technical direction includes;
(1) Direction to the Contractor which assists him in accomplishing the
Statement of Work;
(2) Comments on and approval of reports or other deliverables.
*
b. Technical direction must be within the contract Statement of Work. The Project
Officer does not have the authority to issue technical direction which (1) institutes
additional work outside the scope of the contract; (2) constitutes a change as
defined in the "Changes" clause; (3) causes an increase or decrease in the estimate
cost of the contract; (4) alters the period of performance; or (5) changes any of
the other express terms or conditions of the contract
c. Technical direction will be issued in writing by the Project Officer or confirmed by
him/her in writing within five (5) calendar days after verbal issuance.
2.26(d)
-------
TABLE A1 - BASE PERIOD ONLY
LEVEL OF EXPERTISE
AREA OF
EXPERTISE
PROFESSIONAL
LEVEL OF EXPERTISE
TECHNICAL
LEVEL OF EXPERTISE
ALL PERIODS
Air Pollution
Biology/Ecology
Radiation Science
Hydrology
Environ Engr
Environ Science
Chemical Engr
Chemistry
Geology
Public Health
Meteroi'ogy
Statistics
Civil/Mech Engr
Planning
Economics
Subtotal
Management 4
Clerical Support
Subtotal
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^tfM^h^M^^BA^^H
TOTA1
*
200
30
170
485
420
280
470
280
200
30
30
50
135
60
60
2,900
11,650
0
11.650
14 550
^
1,250
400
2.300
6,750
5.800
3,800
6,600
3,700
3,800
400
400
800
2,400
800
800
40,000
0
0
0
MV^^^^M^VH
40 000
l
350
350
1,950
5.750
5,050
3,200
5,600
3,200
4,150
350
350
700
2,000
700
700
34,400
0
0
0
^^^^^^^^^M
34 400
1
200
200
1.200
2.250
6,450
850
2,450
2,000
2.500
200
200
400
1.300
400
400
21.000
0
2.400
2.400
{^^^^^^^^^^^
23 400
3
300
300
1.800
5,250
4,600
2.900
5.100
2,900
3,800
300
300
650
1.900
650
650
31,400
0
0
0
^^^^^M^W
31.400
2
130
120
1.000
3.000
2,650
1.700
2.950
1.700
2,100
125
125
250
1.100
250
250
17.450
0
0
0
M^H^^^H^^V
17.450
1
130
130
2,450
2,200
900
1,500
2,100
1.200
1,300
130
130
180
1.400
450
250
14.450
0
0
0
^^^^^M^^H
14,450
ALLHUUhO
2,560
1,530
10,870
25,685
25.870
14.230
25,270
14,980
17,850
1.535
1,535
3,030
10.235
3.310
3.110
161.600
11.650
2.400
14.050
175,650
2.26(e)
-------
SAMPLE DEFINITIONS FOR COMMONLY USED LABOR
CLASSIFICATIONS FOR SUPERFUNDWORK
I. Professional Level
i
a. Level 4 (Expert Professional)
Qualifications of Level 4 personnel are as follows:
Bachelor's Degree and ten years experience, or a Master's Degree and eight years
experience, or PhD and six years pertinent professional experience in hazardous
waste management, pollution control, or other disciplines directly related to the
requirement of this contract
Personnel offered as program/project leaders shall be at expert level and possess
additional expertise directly related to task requirements of this contract; for example,
program/project management leaders shall have at least three years experience in
management of multi-disciplined projects and experience in the management of
subcontracting professional and technical personnel and/or organizations.
b. Level 3 (Senior Professional)
Qualifications of Level 3 personnel arc as follows:
1. Air Pollution Specialist (Senior Professional)
*
* A Bachelor of Science Degree and five years of professional experience, or a
Master of Science Degree and three years of professional experience in chemical
engineering.
Two years of professional experience in source and ambient air monitoring.
* Familiarity with industrial processes that generate hazardous air pollutants from
RCRA combustion of RCRA Hazardous Waste.
2. Biologist/Ecologist (Senior Professional)
A Master of Science Degree and three years of professional experience in
biology, aquatic biology, or ecology.
Three years experience in assessing ecological effects of environment
contamination.
Familiarity with environmental standards and contemporary literature on the
environmental effects of pollutants.
2.26(f)
-------
SAMPLE DEFINITIONS FOR COMMONLY USED LABOR
CLASSIFICATIONSFQR SUPERFUND WORK (com.)
3. Radioloeica] Specialist (Senior Professional)
A Master of Science Degree and three years of professional experience in health
physics, radiological health or radiation biology.
4
Three years experience in assessing public health impacts.
Familiarity with contemporary radiological standards and literature on
environmental effects from radioactive pollutants.
4. Hvdroloeist (Senior
A Bachelor of Science Degree and five years of professional experience, or a
Master of Science Degree and three years of professional experience in
hydrology, hydroecology, geology, or geological engineering.
At least three years professional experience in analyzing ground water movement
and other physical and chemical characteristics of groundwater.
Experience in design of studies and sampling plans to assess the physical
character of ground water and leachate movement
5. Environmental Engineer/Scientist (Senior Professional)
A Bachelor of Science Degree and five years of professional experience, or a
Master of Science Degree and three years of professional experience in sanitary or
environmental engineering or other discipline directly related to the requirements
of this contract
Three years professional experience in assessing environmental impact, water
pollution problems, industrial solid waste pollution problems or in
designing/operating industrial solid waste management facilities.
6. Chemical Engineer (Senior Professional)
* A Bachelor of Science Degree and five years of professional experience, or a
Master of Science Degree and three years of professional experience in chemical
engineering.
Two years professional experience in wastewater pollution control or industrial
solid waste management
Experience with industrial processes that generate chemical wastes.
2.26(g)
-------
SAMPLE DEFINITIONS FOR COMMONS Y USED LABOR
CLASSIFICATIONS FOR SUPERFUND WORK (com.)
7. Geological Engineer/Geologist fSenior Professional)
A Bachelor of Science Degree and five years of professional experience, or a
Master of Science Degree and three years of professional experience in geological
engineering or geology."
Two years experience in industrial site characterization projects.
8. Public Health Specialist (Senior Professional)
* A Master of Science Degree and three years of professional experience in public
and/or industrial health.
Three years experience in assessing public health impacts from chemical
contaminants in the environment
Thorough familiarity with contemporary literature, and how to assess such
literature, on the public health effects of environmental contaminants.
Familiarity with use of medical records and public health statistics to assess public
health risks.
9. Chemist (Senior Professional^
A Master of Science Degree in chemistry and three years of professional
experience in chemistry.
Two years experience in analyzing organic contaminants in water, waste water or
soils, sediments and sludges.
Two years experience on analyzing hazardous wastes under RCRA.
10. Meteorologist (Senior Professi
A Bachelor's of Science Degree and five years of professional experience, or a
Master of Science Degree and two years of professional experience in
meteorology.
j
Two years experience in micrometeorological modeling in air pollution.
Familiarity with the effects of terrain, weather, obstructions, etc., on diffusion
modeling results.
2.26(h)
-------
SAMPLE DEFINITIONS FOR COMMONLY USED LABO
CLASSIFICATIONS FOR SUPERFUND WORK
11. Statistician (Senior Professional)
A Bachelor's of Science Degree and five years of professional experience, or a
Master of Science Degree and three years of professional experience in
environmental sciences.
Two years of professional experience in statistical design of ambient monitoring
Familiarity with statistical design for air and water for both point and ambient
environmental pollutants, (desired)
12. Civil/Mechanical Enein
A Bachelor's of Science Degree and five years of professional experience, or a
Master of Science Degree and three years of professional experience in
civil/mechanical engineering.
Two years of experience in design, operation or maintenance of waste
treatment/disposal facilities of related equipment.
13. Management Specialist (Senior Professional)
^^^^^^^^"^***1****^^^^^^"*^^^"**^^^^**"^^"***"1^^^^ i
A Bachelor's of Science Degree and five years of professional experience, or a
Master of Science Degree and three years of professional experience.
Experience must include management of large multi-disciplinary projects
involving other contractors.
14. Environmental Planner (Senior Professional^
A Bachelor's of Science Degree and five years of professional experience, or a
Master of Science Degree and three years of professional experience,
* Two years of professional experience in environmental planning related to
location of industrial/municipal treatment facilities, and solid/hazardous waste
treatment, storage or disposal facilities, or other disciplines directly related to this
contract
15.
* A Bachelor's of Arts or equivalent degree and at least five yean of professional
experience, or a Master of Science Degree and three years of professional
experience in economic aspects of environmental quality management and/or
protection.
Personnel offered as Task Leaders will be senior professional level
2.26(i)
-------
SAMPLE DEFINITIONS FOR COMMONLY USED LABOR
CLASSIFICATIONS FOR SUPERFUND WORK (conO
c. Level 2 (Mid-Range Professional)
Qualifications of Level 2 (Mid-Range Professional) are the same as for Level 3 (Senior
Professional) except for the following:
Normal qualifications are a Bachelors degree in one of the disciplines listed in I - b
above.
At least two years of experience in one of the disciplines listed in I-b above.
d. Level 1 (JuniorProfessional)
Qualifications of Level 1 (Junior Professional) are the same as for Level 2 (Mid
Range Professional) except there is no experience requirement
II. Environmental Technician
a. Level 3 (Senior Environmental Tcchni
Qualifications of Level 3 (Senior Environmental Technician) are as follows:
Bachelor's or Associate's Degree in one of the disciplines listed in I-b above, or other
disciplines directly related to the requirements of this contract
Three years experience (e.g. Level 3 Chemical Technicians will have experience in
analyzing organic contaminants in environmental samples; experience shall include a
detailed knowledge of established sample handling, preparation, analytical, and
reporting procedures).
Familiarity with principles/precautions needed for sampling/handling/analysis of
hazardous materials/wastes.
Experience in supervising a group of technical personnel
b. Level 2 (Junior
Qualifications of Level 2 (Junior Technician) are as follows:
A Bachelor of Science or Associate Degree or equivalent in one of the disciplines
listed in I-b above, (e.g. Chemist - Bachelors Degree in Chemistry).
Two years experience (e.g. Chemical Technicians will have familiarity with State-of-
the-Art technologies).
2.26(1)
-------
SAMPLE DEFINITIONS FOR COMMONTLY USED LABOR
CLASSIFICATIONS FOR SUPERFUND WORK (com.)
c. Level 1 (Technician)
Qualifications of Level 1 (Technician) are as follows:
High School or Technical School Diploma or equivalent (e.g. Laboratory
Technician).
Practical knowledge of fundamental concepts (e.g.. Laboratory Technician - concepts
of qualitative and quantitative analytical techniques).
Knowledge of basic discipline area, (e.g., familiarity or training in sampling/handling
of hazardous wastes).
2.26(k)
-------
CONTRACT TYPE
SPECTRUM OF RISK
Cost Reimbursement and Fixed Price
High Risk to
Recipient
Low Risk to
Recipient
Cost Reimbursement
Fixed Price
Low Risk to
Contractor
High Risk to
Contractor
VIEWGRAPH #21
TITLE: Contract Type - Spectrum of Risk
KEY POINTS:
This diagram shows the elements of risk for the contractor and recipient
when either a cost reimbursement or fixed price contract is used.
For example, if a cost reimbursement contract is used, contractors will not
lose money since they are being reimbursed for their costs. (Note: the
contractor is entitled to all costs incurred and considered to be allowable
and applicable to performance.) It is more risky to the recipient, since
costs may have to be increased to complete performance, and if it is a term
type cost reimbursement contract, no end product is guaranteed.
A fixed price contract is more risky for contractors, since they will only be
paid the price that was decided on at the beginning of the contract, even
though the actual cost may be more. This is better for recipients, since
they know at the beginning of the project what the cost will be.
2.27
-------
PROHIBITED CONTRACT EXAMPLE
Cost-Plus-Percentage-of-Cost
Proposed
III
Estimated Cost: $1,
Fee (10%): 100
Cost Plus Fee: $1,100
Actual Cost Experience
Incurred Cost: $1,200
Fee (10%): 120
Cost Plus Fee: $1,320
VIEWGRAPH #22
TITLE: Prohibited Contract Example
KEY POINTS:
Cost-plus-percentage-of-cost and percentage-of-construction-cost are
prohibited types of contracts. These contracts include a fixed percentage
for the fee that is multiplied times the actual cost incurred. (40 CFR
35.6575 (a))
As shown in the above example, the proposed cost plus estimated fee was
$1,100. However, as shown by the actual cost experience, the incurred
cost was $200 higher than anticipated, thus the fee was higher. The total
cost of the project was, therefore, $220 higher than originally proposed.
2.28
-------
THE
SOLICITATION
VIEWGRAPH #1
TITLE: The Solicitation
KEY POINTS:
This module describes the solicitation and public notice. It is necessary
that the recipient prepare and distribute an accurate and complete
solicitation that effectively addresses the issues specific to the project so
that the proposals and bids received are responsive to the recipient's needs.
3.1
-------
OBJECTIVES OF THIS MODULE
Describe the important aspects of a public notice
Identify the important elements of a solicitation
(RFP/IFB)
VIEWGRAPH #2
TITLE: Objectives of This Module
KEY POINTS:
One of the purposes of this module is to describe some of the important
aspects of a public notice and some of the important elements of a
solicitation.
In addition, this module covers the documentation which must be in a
solicitation, and possible awarding agency review of the solicitation.
3.2
-------
PUBLIC NOTICE OF PROCUREMENT
PUBLIC NOTICE****
Adequate notice of the
proposed project
Contents of the public
notice
Specific provisions for
A/E follow-on services
Participation by
MBEs/WBEs
VIEWGRAPH #3
TITLE: Public Notice of Procurement
KEY POINTS:
When soliciting bids or proposals, the recipient must allow sufficient time
(generally 30 calendar days) between public notice of the project and
deadline for receipt of bids or proposals. The recipient must publish the
public notice in professional journals, newspapers, or publications of
general circulation over a reasonable area, (40 CFR 35.6555 (d))
* The public notice must specify when, where and how prospective
bidders/offerers may obtain the solicitation and other relevant documents.
The recipient may use the engineer procured to conduct any or all of the
remedial investigation (RI), the feasibility study (FS), or design to perform
follow-on engineering activities under the remedial response without
going through the public notice and evaluation procedures if:
The public notice clearly stated that the firm or individual selected
could be awarded a contract for follow-on services, and
The initial procurement complied with the procurement regulations.
(40 CFR 35.6570)
3.3
-------
VIEWGRAPH #3 (cont)
TITLE: Public Notice of Procurement
KEY POINTS:
The recipient may also use the same engineer during subsequent phases of
the project in the following cases:
- where the recipient conducted the RI, FS, or design activities without
EPA assistance but is using EPA funds for follow-on activities,
provided the recipient certifies:
that it complied with the procurement requirements in
40 CFR 35.6565 and the code of conduct requirements
described in 40 CFR 31.36(b)(3) when it selected the
engineer
* that any EPA-funded contract between the engineer
and the recipient meets all of the other provisions as
described in the procurement requirements in 40 CFR
35, Subpart O.
- where EPA conducted the RI, FS, or design activities but the recipient
will assume the responsibility for subsequent phases of remedial
response under a cooperative agreement, the recipient may use, with
the award official's approval, EPA's engineer contractor without
further public notice or evaluation, provided the recipient follows the
rest of the procurement requirements of 40 CFR Part 35, Subpart O to
award the contract.
The public notice and solicitation should encourage the participation of
MBE/WBE firms.
3.4
-------
ELEMENTS OF A SOLICITATION
(RFP/IFB)
Written specification or scope/statement of
work
Evaluation criteria (RFP)
* Level of effort and staffing (when
applicable)
* Deadline and place to submit
proposals/bids
* Sample contract
* Required clauses
* Cut off date for receipt of questions
VIEWGRAPH #4
TITLE: Elements of a Solicitation (RFP/IFB)
KEY POINTS:
Each solicitation must contain a description of the work which is required.
The actual description can be in the form of a scope of work, statement of
work or written specification. These will depend on the method of
procurement being used.
- The Scope of Work is a general outline of activities, tasks, and
subtasks to be undertaken.
- The Statement of Work (SOW) specifies in detail the activities, tasks,
subtasks, and objectives to be performed pursuant to that solicitation.
- In developing technical written specifications for proposed remedial
action projects, the recipient must incorporate a clear and accurate
description of the technical requirements for any necessary materials,
products, or services, along with the required performance schedule.
Recipients are required to avoid the use of restrictive specifications if at all
possible. If the recipient 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. In the technical specifications, the salient
requirements of the named brand which must be met by offerers must be
described.
3.5
-------
VIEWGRAPH #4 (cont)
TITLE: Elements of a Solicitation (RFP/IFB)
KEY POINTS:
In addition, the solicitation must contain the date and place to submit
proposals/bids, a sample contract and required clauses. Contract
provisions and sample clauses will be discussed in greater detail in
Module 5, Contract Contents.
In RFP procurements, the solicitation must contain a clear explanation of
the criteria to be used in evaluating the proposals and the relative
importance of each criterion. The criteria should relate to "whatfs needed"
to perform. The recipients criterion 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 and history of performance
- availability of personnel, equipment, and facilities needed to complete
the work
- plans for MBE/WBE utilization,
In an IFB procurement, there is no evaluation criteria, the award is made
to the lowest, responsive, responsible bidder.
3.6
-------
DOCUMENTATION
Recipients must maintain detailed documentation
on all procurement actions
VIEWGRAPH #5
TITLE: Documentation
KEY POINTS:
Some of the documentation, associated with the solicitation, which
recipients must maintain includes:
- basis for contractor screening and selection
- justification for the procurement method used
- justification for any specification or requirement that does not
encourage free and open competition
- justification for the type of contract to be awarded
- evidence of advertising
- evidence of solicitation of small, minority and disadvantaged business
enterprises.
As a general policy, recipients should document in writing any other
matters that have to do with the procurement and should maintain such
records for review during audit. These records will enable the recipient to
prove that all Federal and other requirements have been met in conducting
the procurement.
3.7
-------
EPA REVIEW
IF APPLICABLE
Pre-solicitation review of
specification
Pre-award review
VIEWGRAPH #6
TITLE: EPA Review (if applicable)
KEY POINTS:
* Recipients must, on request, make available for EPA pre-award review
procurement documents, such as RFPs or IFBs, independent cost
estimates, etc., when a recipient's procurement system is not certified.
* All recipients must make available, upon EPA request, technical
specifications on proposed procurements where EPA believes such review
is needed to ensure that the item and/or service specified is the one being
proposed for purchase. This review generally will take place prior to the
time the specification is incorporated into a solicitation document.
However, if the recipient desires to have the review accomplished after a
solicitation has been developed, EPA may still review the specifications.
(Such review is usually limited to the technical aspects of the proposed
purchase.)
3.8
-------
MODULE 3 - THE SOLICITATION
Case Study #2. Exercise 1
March 17,1988
PUBLIC NOTICE
The County Water District (CWD) invites all interested and qualified firms to
submit their bid and any supporting information for the proposed remedial action. All
offerors must submit ten copies for consideration to provide remedial action construction
work for the ABC facility in Smalltown, U.S.A.
The scope of work shall consist of construction of a granular activated carbon
(GAC) water treatment system; modification of the GAC system, if necessary, to include
an air stripping facility to treat vinyl chloride; replacement of existing well pumps and
motors; installation of transmission piping; and construction of laboratory and office space
to ensure that the remedy operates effectively.
All qualified persons or firms interested are urged to attend a general information
meeting to be held in the CWD's auditorium, 123 Madison Parkway, Smalltown, U.S.A.
on April 12,1988 at 9:00 a.m. Those not attending may submit their bids to the address
given above, attention John Thomas. Qualified MBE/WBE firms are encouraged to submit
a bid.
All formal responses to this matter must be received by the CWD, at the address
provided above, no later than May 10,1988,5:00 p.m. Any questions may be directed to
John Thomas at 222/345-6789.
Questions
1. Evaluate the above public notice. Does this include all of the necessary elements?
2. Is there adequate public notice of the proposed project? How much time is
generally considered to be adequate notice?
3. What, if any, additional information should be included?
-------
I11 nl|' I ' I IT'
-------
EVALUATION/AWARD
PHASE
VIEWGRAPH #1
TITLE: Evaluation/Award Phase
KEY POINTS:
The recipient must evaluate the responses received to a solicitation to
determine which respondents are capable of performing the proposed
requirement. In addition, the recipient must be able to choose a contractor
from the group of respondents determined to have submitted acceptable
proposals. This module describes the process for selecting contractors.
4.1
-------
OBJECTIVES OF THIS MODULE
To explain the process of evaluating
bids/proposals
To describe the differences between price, cost
and technical analyses
To identify procedures which should be followed
if none of the bids/proposals is adequate
VIEWGRAPH #2
TITLE: Objectives of This Module
KEY POINTS:
The main purpose of this module is to explain the procedures for
evaluating bids/proposals. This includes a description of the differences
between price, cost, profit, and technical analyses.
In addition, this module will describe reasons why none of the
bids/proposals may be adequate and what procedures should be followed
in this case.
4.2
-------
RESPONSIVE VERSUS RESPONSIBLE
PROCUREMENT
METHOD
RESPONSIBLE
RESPONSIVE
SEALED BIDDING
COMPETITIVE
NON-COMPETITIVE
SMALL PURCHASE
VIEWGRAPH #3
TITLE: Responsive Versus Responsible
KEY POINTS:
* A responsive bid is one that, on its face, meets the specifications and the
material terms of the IFB. Material terms are those that affect price,
quantity, quality, or delivery. Other terms of the solicitation include
public policy matters that may be made matters of responsiveness
provided that they are clearly identified by the solicitation.
The recipient determines the responsiveness of the bid based solely on the
information the bidder submits with the bid. It cannot be clarified with
extraneous information outside the bid. Responsiveness is determined at
the time of bid opening. Supplemental information needed to clarify the
bid or make it responsive cannot be accepted after bid opening.
Responsible means the apparent ability of a bidder to successfully carry
out the requirements of a contract. Aspects of responsibility include:
- financial resources
- technical resources
- organization and facilities
- compliance with civil rights laws and other legal requirements
- exclusion from prohibited lists by the State or Federal Government:
master list of debarred or suspended contractors
violating facilities.
Responsibility is determined after bid opening but before the recipient
awards the contract.
4.3
-------
ANALYSIS FOR SELECTION
PROCUREMENT
METHOD
Small Purchase
PRICE/COST PROPOSAL
NO
TECHNICAL
PROPOSAL
1 Sealed Bidding
I 2+ Bids
1 1 Bid
1 Competitive
1 Non-Competitive
Price
NO
YES
YES
YES
Cost
NO
YES
YES
YES
Profit
NO
YES
YES
YES
Reasonable
YES
YES
YES
YES
NO 1
(except 2 step) 1
NO 1
(except 2 step) 1
YES 1
YES 1
NO
NO
YES
NO
VIEWGRAPH #4
TITLE: Analysis for Selection
KEY POINTS;
A bid/proposal can be divided into two sections for analysis purposes, the
cost proposal and the technical proposal. The cost proposal can in turn be
analyzed in four ways - price, cost, profit, and reasonableness.
Recipients must conduct and document a cost or price analysis in
connection with every procurement action. The method and degree of
analysis is dependent on the particular procurement situation.
In all cases recipients must determine that the proposed price/cost is
reasonable.
4.4
-------
PRICE ANALYSIS
To perform a price analysis compare total bid
prices to:
Other bid prices received
Prior quotations or contracts
Published price lists
Market price comparisons
Independent in-house price
estimates
VIEWGRAPH #5
TITLE: Price Analysis
KEY POINTS:
In all instances other than those described for cost analyses, the recipient
must perform a price analysis to determine the reasonableness of the
proposed contract price.
A price analysis is the process of evaluating a contractor's proposed price
for a project, without regard to the separate costs elements or profit.
Price analysis determines the reasonableness of the proposed contract
price based on adequate price competition, previous prices for similar
work, and established catalog or market price.
4.5
-------
PRICE ANALYSIS FLOWCHART
Is there effective
price competition?
No
Is price reasonable
compared to market
or catalog prices?
Is
No
price reasonable
i
compared to
past prices?
Yes
Yes
Yes
No
Is price reasonable
compared to
recipient's independent
estimate?
No
Obtain cost or pricing
data and perform
cost analysis.
Yes
4.5(a)
-------
COST ANALYSIS
(FAR Part 31.2 Cost Principles)
Verification of cost or pricing data and
evaluation of proposed cost elements,
including:
Purchased Subcontracts
materials
Other direct costs
Labor
Special tooling or
Fringe benefits equipment
Overhead General &
- engineering administrative (G&A)
- manufacturing expense
Consultants Profit or fee
VIEWGRAPH #6
TITLE: Cost Analysis (FAR Part 31.2 Cost Principles)
KEY POINTS:
Cost analysis, including a determination of a reasonable fee, must be
performed prior to award of any cost-plus-fixed-fee contract.
The recipient must conduct and document a cost analysis for all negotiated
contracts over $25,000 and all negotiated change orders regardless of cost.
A cost analysis is not required when adequate price competition exists and
the recipient can establish price reasonableness for the award of a fixed
price contract. (Note: the recipient must base its determination of price
reasonableness on adequate price competition, a catalog or market price of
a commercial product sold in substantial quantities to the general public,
or on prices set by law or regulation.) (40 CFR 35.6585)
A cost analysis includes a comparison of the offerer's current cost
estimates with: cost previously incurred by the offerer for similar items,
audited payroll and indirect cost rates, and prior estimates of historical
costs from other contractors for the same or similar items.
Questions may arise regarding whether legal services should be subject to
a cost analysis, since legal firms do not maintain their financial systems in
a manner to permit cost analysis. The regulation states that where there
are an adequate number of sources available and the price or unit price can
be determined as being reasonable through price analysis, a cost analysis
is not required. Otherwise, a cost analysis is required.
4.6
-------
COST OR PRICE SUMMARY
fSee accompanying instructions before comletin
^-i^ j_^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
^^"^^^^^^^^^^^^^^^^^^^^^^^^^PB^^^^^^^B^^^^^^^^^M^^B
PART I - GENERAL
form
OMB No 2030-0011
this form)
2 ASSISTANCE IDENTIFICATION N
1 RECIPIEN
3 NAME OF CONTRACTOR o* SUBCONTRACTOR
DATE OF PROPOSAL
5 ADDRESS OF CONTRACTOR OR SUBCONTRACTOR f/nc/yoe ZIP Ctrttj
£ TYPE OF SERVICE TO BE FURNISHED
TELEPHONE NUMBER
COST SUMMARY
ESTIMATED
COST
HOURLY
HATE
TOTALS
7 DIRECT LABOR
HOURS
TOTAL
ESTIMATED
COST
6 INDIRECT COSTS
eoxtpoon;
INDIRECT COSTS TOTAL
DIRECT COSTS
ESTIMATED
TRAVEL
ESTIMATED
e SUBCONTRACTS
SUBCOMTRACTS SUBTOTAL
ESTIMATED
e OTHER
OTHER SUBTOTAL
i^^^BS^^BPSII^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
OTHER DIRECT COSTS TOTAL
1C TOTAL ESTIMATED COST
EPA Form 5700-4T (R»v. 4-S4J Pr»viou* Mil ions may be uft*0 until tuopltes »ft
4.6(a)
-------
PART III -
PRICE SUMMARY
1 3 COMPETITOR'S CATALOG USTINGS, IN-HOUSE ESTIMATES. PRIOR QUOTES
(indicate ots/s for price comparison}
\ '
PART IV-
MARKET
PRICE(S)
PROPOSED
PRICE
$
CERTIFICATIONS
14 CONTRACTOR
I4a HAS A FEDERAL AGENCY OR A FEDERALLY CERTIFIED STATE OR LOCAL AGENCY PERFORMED ANY REVIEW OF YOUR ACCOUNTS OR
RECORDS IN CONNECTION WITH ANY OTHER FEDERAL ASSISTANCE AGREEMENT OR CONTRACT WITHIN THE PAST 12 MONTHS?
LJ YES LJ NO f/f "*Ye»" give n»me. eddress. end telephone number of renewing office
14b THIS SUMMARY CONFORMS WTTH TWE FOLLOWING COST PRINCIPLES
I4c This proposal is submitted for use in connection with and in response to
ni
This is to certify to the best of my knowledge and belief that the cost and pricing data summarized herein are
complete, current, and accurate as of
I further certify that a financial management capability exists to fully and accurately account for the financial transactions under this
proved I further certify that I understand that the subagreement price mey be subject to downward renegotiation and/or recoupment
where the above cou and pricing data have been determined, as a result of audit, not to have been complete, current and accurate a* of the
date above
(3) TITLE OF PROPOSER
SIGNATURE OF REVIEWER
DATE OF EXECUTION
15 RECIPIENT REVIEWER
I certify that I have reviewed the cost/price summary set forth herein and the proposed costs/price appear acceptable for subagreement
award
(3J TITLE OF PROPOSER
SIGNATURE OF REVIEWER
DATE OF EXECUTION
16 EPA REVIEWER
(3) TITLE OF PROPOSER
SIGNATURE Of REVIEWER
DATE OF EXECUTION
EPA Form 5700-41 (R«>. 4*64}
4.6(b)
-------
PURPOSE AND APPLICABLITY
-» v
I
he purpose of this form is to provide a simple form for the display of cost and price data 40 CPR 33.290 requires the
recipient to perform cos; or price analysis for every procurement action, including subagreement modifications This
form ts not required by EPA. but may be used at the recipient's option, if the recipient currently uses a cost and price
analysis form which acomplishes the same objectives as this form, the recipient may use its own form
INSTRUCTIONS
if this form ts used. CAREFULLY READ AND FOLLOW ALL INSTRUC-
TIONS Many items are not saH-exp»ane.tofv. Attach additional sheets
Us* only the eppltcabie portions of this torm
Pen I it applicable to all subegreeme>ntt
Part II is applicable to all sub-agreements requiring a ooct analytic
pursuant to EPA procuramant regulation!
Pan III it applicable to all subagreements where review it based on
price comparison (i a., prtea analysts)
Pan IV certifications will b« executed at required by tha msnruc-
tions for each block
PARTI-GENERAL
Item l Enter the name of tha recipient at thown on the attittanca
agreement
item II Enter the assistance identification number shown on the
assistance agreement (or assigned to the project, rf no assistance
agreement has yet been executed}
Item 3 Enter the name of the contractor or subcontractor with
wnom the tubagre*ment ts proposed to be executed
Item 4 Inter the date of the contractor's or subcontractor's proposal
to the recipient
Item 6 Enter the full mailing adores* of the contractor or tub-
contractor
Item 6 Give a br*1 Description of the work, to be performed under
the proposed subagreemeni
Part II - COST SUMMARY
This portion of the form it to be completed by the contractor (or his/her
subcontractor} with whom a subegreement is proposed to be exe-
cuted, unless that subagreemeni ts formally advemsed. competi-
tively bid, fixed price contract.
Nothing in the following discussions thould be interpreted as recom-
mending the inclusion at direct costs any items normally ueeted at
overhead costs in the form s accounting or estimating system 4OCFR
Pan 30 identifies general con principles applicable to tubegreernents
under EPA assistance Pursuant to thai Part, all subagreements
awarded to profit-making organizations are subject to the cost princi-
ples of 41 CFR31.2 Architect engineer and construction contracts are
atso subbed to 41 CFR 31.105
Item 7 Direct Labor
Dtrecr lebor costs normelry include seieries et a reyuler time rare
O vertime premiums should be identified seperetefy on en ettechment.
tncurrenct of ynam/crparetf overtime com requires if* epprovel of
the recipient et rn* time o1 mcurrence. If significant overtime a Xno*m
to b# n*+o*<3 91 ih9 r/me of comp/ei'on of th* cost review form fh*
ntsons thtrtfore. lioor caieTor/ti, rafes »ndhourt sAoutdo* fdtnft-
trod on an anacnmenr Also included is r/te cosi of pinntrs' or psinci-
f/me wh*n /A*r «/ directly *npao«0 m nrytcus ro
undtr the sutnyrttmtnt. In c*s* the tu/ttime oftny employee ts not to
be devoted to wor* ro oe performed under the subaareement only the
cost ofeciuetttme to be eppited should be included The compensation
of e penner o* pnncipet ihett be included es direct cost onty for the
Ume thet the/he it expected to be enoioed direct r> m the performance
of MrerA under the fubeoreement end only if a ts the firm's normef
preciice to chorye such time directly to ell/obs The rete of compense -
lion of a penner or princtpel then be commensurete wrth the cost of
omnfoying mother quelrfiod person to do such wort, but the seiery
potion shell not exceed the ectuei seiery rete of the indtvtdu*/ con-
cerned Distnbtjiion of profits shelf not be included in the rete of
compensetion.
Enter in block 7 the categories of professional or technical personnel
necesary to perform each major element of work under the tubagree-
ment scope of services Estimate hours worked for each category and
extend them by the wege rates to be paid during the actual perfor-
mance of the work Current rates, adjusted for projected increases, if
any. should be used for the actuat categories of labor contemplated Alt
projected increases should be supponed by recent experience or
established personnel policy
Enter in the far right column the total estimated direct labor cost.
Supporting records to be maintained by the contractor and which
mutt be submitted or made available to the recipient or EPA upon
request include
The method of estimating proposed hours worked
The computation technique used m arriving at proposed labor
rates
e. The tpecrf tc documents, books, or other records used as factual
source material to develop proposed hours worked and labor
rates
d Detailed rate computations which were used m computing the
information submitted on the form
If m block 14a. the contractor has checked "No " a brief narrative
description ol the methods used tn arriving at items a through d above
shall be included on an attached sheet.
Kern 8 Indirect Coats
Indirect costs mey consist of one or more poofs of expenses which ere
grouped on the bests of the benefits eccrumy to the cost objectives
represented by the dmrtout/on bese or beses to which they ere elto-
ceted Since occountmo, precttces very, the use of pemcuier groupings
is not regwred. Neither is the use of eny perticuter ollocetion oese
mendetofj However, it is mendetory thet the method used resufts in
en eguitebte eliocetton of indirect costs to cost ob/ecttves wnich they
*uppon.
Normetry. the firm's ec count my system end ettimeting practices witf
determine the method used to eHocet* overheed costs The firm s
estebhshed prectices. if in eccord wrth generally eceepted accounting
prtncipies ond PROVIDED THEY MODl/Cf EQUfTASU RESULTS IN
a
b
EPA Form 570O-41 (Rev. 4-84)
Page 3 of 5
4.6(c)
-------
THE CIRCUMSTANCES, w/// genera!!, be accepted Proposed
head mies should represenr the firm's best estimate of the rites to be
experienced during the subagreement period They should be based
upon recent experience end be adfusted for known factors which will
influence experienced trends
Common overhead groupings overhead on direct labor and
and administrative expenses The firs: grouping usually includes
employment taxes, fringe banafrts holidays. vacation, idle time.
bonuses, etc.. applicable to direct tabor "The second generally includes
the remaining costs which because of their tncurrence for common or
loint objectives are nor readily subject totraatment as direct com. ft is
expected, however, that propos af groupings wiJJ correspond with the
firm $ norm*/ method for accumulating indirect costs. fUnder some
accounting systems, the first grouping would be tncludod instead
unoer rtam 7.) No specie/ categorization ts required provided th*
re suf^s are realistic and ? unable
Dtrect salaries are the normal distribution base for overhead costs, but
in some circumstances other bases produce more agurtable risufts
Asm the case of overhead COSTS groupings. the method to be used will
depend upon the firm's normal practices and the equity of the results
produced in the circumstances.
In the case of mu/tibranch firms, joint ventures, or affiliates, a is
expected that overhead costs applicable to the specific locotionfs)
where wort is to be based on cost data from the most recent fiscal
periods updated to reflect changes in volume of business or
operations
Enter in block 8 the indirect cost pools normally used by the firm for
allocation of indirect costs Enter me indirect cost ratt for each pool
and extend each one by the rata base to which it applies to arrive at the
estimated indirect costs to b« incurred durmg the actual performance
of the work If the direct labor total from block 7 is not used as the rate
base for any of the indirect cost poo Is, 'the rate base used muit be
explained on an attached sheet
A brief narrative statement outlining the firm's policies and practice*
for accumiatmg indirect costs Enter the indirect cost rate costs and
the method used to compute the proposed rata or rates shall accom-
pany the form include comment on the firm's policies regarding the
pricing and coring of principals' time The normal accounting treat-
ment of principals' salaries, the annual amounts, and the hourly
charge rate, if used, should be dtacusMd
Enter in the far right column the total estimated indirtct costs
«
Supporting records to be maintained by the contractor and which mutt
be submitted or made available to the recipient or EPA upon request
include
a Detailed cost data showing overhead accounts, allocation
bases, and rate computations for the preceding fiscal period tf
more than six months of the current fiscal period have elapsed.
cost data tor this period should be included as one of the three
periods)
b Company budgets, budgetary cost data, and overhead rate
computations for future periodts}
He*n 9 Othe* Direct Cora
The following rtems are iHusiretrve of costs norma/ry included in this
category of costs.
a Travof costs, including transportation, lodging, subsist a nc*.
and incidental expenses incurred by personnel or consuftants
white in a trava/ si at us in connect ion wrth tha p+rform*nc9 of
services require* by the contract. Tho cost principles
EPA Form 6700-41 (4-84)
require the use of less than first class air accommodations and
also limit the cost of private aircraft
Equipment. Materials, and Supplies
(1) Longdistance telephone, telegraph, end cao/e expenses
to be incurred m connection with the performance of
sorvtcas required in connection with the contract
(2) Reproduction costs including blueprints, biac* and white
prints, oialid prints. photographs, photostats, negatives;
and express' charges. '
Cofnmorciol printing, binding, artwork. ond
Special equipment.
CIS.
d Othor. Direct costs, if any, not included above
Enter in blocks 9a*d aft other direct costs proposed Travel COSTS
enterad must be supported by an attachment which identifies the
number of staff trips proposed and the estimated cost per staff trip for
both local and long distance transportation. The number of days and
the rate per day must be provided to support the per diem shown Each
subcontract and consultant agreement must be identified separately
in block 9c.
Enter in the far right column on line 9e the toui of jli other direct costs
Supporting data to be maintained by the contractor and which must
be submitted or made available to the recipient or EPA upon request
include
a, basis for other direct costs proposed.
b. factual sources of costs, rates, etc.. used m computing proposed
amount of each cost element.
Ks*n 10 Total Estimated Coat
Enter the total of all direct labor, indirect costs, and other direct costs
from items 7. 6. and 9.
He*rt 1 1 » Ptofit
A (ajir *nd re»*on«6/e provision for profit cannot be made by simply
apprymg a certain pr*o;etermin*d percentage to tha total estimated
cost Rtthir. profit will 6* estimated as 9 dollar tmount arter
d+grae of rt$*.
nature of tha wort ro to performed:
«it»nt of firm's jr»**rm*fft
subcontracting of wort, ajnd
r othot cntont.
Th* Federal Acquisition Regulation cost principles applicable to sub'
agream+rns wrth pfoln -making organizations (41 Cffl 37.2 and
3 J ^05; disallow certain rypei of costs which ore somotimis fncurrtd
by firms tn tho norm*! conduct of ihotr business. £xamples of costs
whtch are not allowable under th+s* cost principles include, out are
not Itmnod to. entertainment tntarasi on borrowed caprtaf. §nd bad
debts Because tho Gowrnmont consider* "pro/it" to bo tho oxcoss of
4.6(d)
-------
price or»r a//ow«6/f costs, such competition can tndiciti a
profit estimate thit the firm s txptrnnceti profit ts *t customirtry
computes n The contractor m*ystp*r9t*fY
-------
EPA
COST OR PRICE SUMMARY
accomanyin instructions before comleting rht$ form)
OM5/Vo 2030-00 M
10-31-86
PART I - GENERAL
1 RECIPIENT
O
2 ASSISTANCE IDENTIFICATION NO
3 NAME OP CONTRACTOR OR SUBCONTRACTOR
- * i 4- M T? ^ ^ ^ ""i >*
^ fT
4 DATE OF PROPOSAL
5 ADDRESS OP CONTRACTOR OR SUBCONTRACTOR (indue* ZIP
100 Main Street
Big City, Illinois
TELEPHONE NUMBER
6 TYPE OF SERVICE TO BE FURNISHED
Remedial Investigation
PART ti - COST SUMMARY
HOURLY
IUTH
ESTIMATED
COST
TOTALS
Pi
10000* 10.50
105,000
7.500
D-3
no
1. 150
30
8 .00
2 . 400
T2
10 .on
.000
oo
ROO
0(«CCTLAiO(« TOTAL
P
ESTIMATED
COST
Hnl 1
INDIRECT COSTS TOTAL
DIRECT COSTS
ESTIMATED
COST
i TRAVEL
13,000
THAVEL SUBTOTAL
ESTIMATED
COST
b EQUIPMENT MATERIALS SU**UES t$fi*c*r
1 .700
SU1TOTAL
ESTIMATED
COST
c SUBCONTRACTS
SUBCONTRACTS SUBTOTAL
ESTIMATED
COST
OTHER
OTMC*
OTHER DIRECT COSTS TOTAL
TOTAL ESTIMATED COST
EPA Form £700-41 (R»v 4-84} PT«V»OU» dilionft m«v b« uMd until »uool>*l »r«
-------
PART III PRICE SUMMARY |
13 COMPETITOR'S CATALOG USTiNGS, IN-HOUSE ESTIMATES. PRIOR QUOTES
flr>aic*t» o«j/j tof p/JCf comparison)
MARKET PROPOSED A
PfltCE(S) PRICE
^^^^^^^^^^^^^"^^''^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^''^^^^^^^^^^^^^^^a^
1
f
PART IV - CERTIFICATIONS I
14 CONTRACTOR '
Ma HAS A FEDERAL AGENCY OR A FEDERAUY CERTIFIED STATE OR LOCAL AGENCY PERFORMED AW REVIEW OF YOUR ACCOUNTS OR
RECORDS IN CONNECTION WITH ANY OTHER FEDERAL ASSISTANCE AGREEMENT OR CONTRACT WITHIN THE PAST 1 2 MONTHS?
D
YES
NO fff TM" gtvt flame.
and fe/ep/ione numbtr of rtriewnn? office
14b THIS SUMMARY CONFORMS WITH THE FOLLOWING COST PRINCIPLES
48 CFR Chapter 1, Part 31.1 & 31.2
14c This proposal i* submitted for us* m connection with and m response to
This is to certify to the b«st of my knowf*6o.« »nn b«li«( that the con and pricing data summarized h«rtm are
complete, current, and accurate as of
DATE
I further certify thai a (manciat management capability exists to fully and accurately account lor the financial transactions unOer this
protect. I further certify That I understand tftat the subagreemem price may be subject to downward renegotiation and/or recoupment
wnere the above cost and pricing data have been determined, as a result of audit, not to haw b*en complete, current and accurate as of the
date above
(31 TITLE OF PROPOSER
President
SIGNATURE OF REVIEWER
DATH OF EXECUTION
1 5 RECIPIENT REVIEWER
I certify that I have reviewed the cost/prtca summary set forth herein and the proposed costs/price appear acceptable for subagreemem
award
PROPOSER
SIGNATURE OF REVIEWER
DATE OF EXECUTION
1C EPA REVIEWER
TTTL£ OF PROPOSER
SIGNATURE OF REVIEWER
DATE OF EXECUTION
EPA Form 6700-41 (Rev. 4*S4)
-------
TRUST ME ENGINEERING
Overhead Summary
for
Fiscal Year 1986
Salarv Overhead Rate Summarv
₯
Category
Payroll Taxes
Paid Leaves
Group Insurances
Pension Plans
Total
Percent of Direct Labor
9.23
10.87
8.41
.54
G & A Overhead Rate Summary
Category
Indirect Salaries
Buildings &. Equipment
Licenses & Insurance
Professional Services
Travel & Subsistence
Supplies
Miscellaneous
Total
50.82
»
12.59
3.12
6.70
4.19
10.93
25.42
113,71
Total Overhead for salary and G & A equal 147.31%
4.6(h)
-------
COST OR PRICE SUMMARY
(Sec 8CcomD9nvmQ instructions before completing thts form)
PART I - GENERAL
form
OMB No 2030-0011
10-31-S
I " " ^ ^ ^ ^ ' ^ ^^ ^ i i-^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^VHH^^^^^^^M^^^V^^^B^^^^^BPVIV^^^^^^H^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ^^^^^^^^^^^V
1 RECIPIENT 2 ASSISTANCE IDENTIFICATION *8^
C* s+- o fC L
W- ^ t * ^- ^ f ^ ^ _»
3 NAME OF CONTRACTOR OR SUBCONTRACTOR 4 DATE OF PROPOSAL
Pe^iab"1^* r_nr: ^^^^ -^ r T^r_ V^^OT^KO>- t IQ?^
5 ADDRESS OF CONTRACTOR 0? SUBCONTRACTOR //nc/ufle ZIP CtxstJ
\
1 P.O. Box
Middleton, U.S.A.
i ^
1 TELEPHONE NUMBER (Indu49 -*/* Cv-o^ec4- Di^ec^or
E*
nrp n^pr
1 K^'^^ononlrir".*
1 Secretary
1 omecTuAiOP TOTAL
6 iNDi«£C* COSTS /5p#e/^ ***9d cott oo&ti
\ Overhead Ra^e (Bs^^c OP
DI" ^ect- I.ahrjr DM 1 ^r^^ 1-
ESTBMTtO
HOU*S
1000
4000
4nno
4non
1000
RATE
-7 . ^7'
HOURLY
HATE
» 24.00
?0 . 00
1 R _ 00
i ft on
6 -00
tASE
I
24f,rnon
ESTIMATED
COST
24 .000
RO r 000
T> j onn
fi^ nnn
fi 000
ESTIMATED
COST
t
^1 ^r ^"^0
TOTALS
« 246.000
t
COSTS TOTAL
31
COSTS
(See Attachment)
TRAVEL SUBTOTAL
r-c
SUBTOTAL
OTY
COST
c SUSCONTHACTS
SUBCONTRACTS SUBTOTAL
OTXE* SUBTOTAL
^i^BH^^W^^^B^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
t OTNE* DIRECT COSTS TOTAL
^Mi^BHM
10 TOTAL ESTIMATED COST
«M
n
M
II
EPA Form 5700-41 (R»v 4-(4) Prtviout Mitions may b« uMd until
ESTIMATED
COST
2,000
- 300
ESTIMATED
COST
000
900
500
0 0
ESTIMATED
COST
ESTIMATED
COST
56
0
M art xh*tm*d
-------
PART lit - PRICE SUMMARY |
13 COMPETITOR'S CATALOG LISTINGS IN-HOUSE ESTIMATES. PRIOR QUOTES
ftntttCMtg 6*SJt for flfict comi>*risonj
MARKET PROPOSED
PRICES) PRICE
!
i
1
t 1
PART IV - CERTIFICATIONS !
14 CONTRACTOR
HAS A FEDERAL AGENCY OR A FEDERALLY CERTIFIED STATE OR LOCAL AGENCY PERFORMED ANY REVIEW OF YOUR ACCOUNTS OR
RECORDS IN CONNECTION WITH ANY OTHER FEDERAL ASSISTANCE AGREEMENT OR CONTRACT WITHIN THE PAST 12 MONTHS?
LJ NO fff ~Yis~ fftv0 name, adoYt jj. »nd tidphon* nt/moer of rtwwrn? offic*
YES
US EPA Office of Inspector General
10 West Jackson
Chicago, Illinois 60604
(312) 353-2486
THIS SUMMARY CONFORMS WITH THE FOLLOWING COST PRINCIPLES
48 CFR Chapter 1, Part "31.1 & 31.2
14c Thts proposal u submitted for use m connection witn and m response to.
This is to cann * to ih« best of my knowt*dg« *rxi b*h«f lhat th« cost and pf »cing data summaruod h«r»in art
comptcu. current, and accuratt as of
DATE
I funh«r ctrtify that a financial manag«m«nt capabthtY tusts to fully and accurataly account tor tht financial Uansacuons undor this
project I (unher certify that I understand that lh« subagr*«m«nt pric« may b« subject to Oownwird reneoottatton and/or recoup me m
whera th« above cost and pricing data have been determined, as a result of audit, not to have been complete, current, and accurate as of the
date above
(3! TITLE OF PRO POSER
President
SIGNATURE OF REVIEWER
DATE OF EXECUTION
RECIPIENT REVIEWER
I certify that I have, reviewed the cost/poet summary set forth herein and the proposed
award.
appear acceptable for subagreement
f3j T1TU OF PROPOSER
SIGNATURE OF REVIEWER
DATE OF EXECUTION
16 EPA REVIEWER
TITLE OF PROPOSER
SIGNATURE OF REVIEWER
DATE OF EXECUTION
EPA Form 6700-41 (Rev. 4-84}
-------
Reliable Engineering
Overhead Rate Schedule
For Fiscal Year - 1986
Overhead
* Total
Costs
Allowable
Costs
Unallowable
Costs
Indirect Salaries
Vacation Pay
Sick Pay
Deferred Compensation
Buildings &. Equipment
Licenses & Insurance
Professional Services
Travel &. Subsistence
Supplies
Interest
Professional Education
Advertising
Printing
Contributions
Bad Debts
State Income Tax
TOTALS
$1,710,000
148,000
85,000
75,000
450,300
156,500
240,000
150,000
391,200
28,000
32,400
100,000
120,000
17,200
50,000
$1.000
$ 3.814.600
$1,710,000
148,000
85,000
75,000
450,300
111,500
240,000
150,000
391,200
32,400
60,600
120,000
61.000
$ 3.635.000
45,000
28,000
39,400
17,200
50,000
$ 179^00
Total Allowable Overhead Rate = S 3.635.000
* 2,995,000
* These elements are provided by the contractor.
= 127.37%
4.6(k)
-------
Other Direct Costs
Travel
1) Transportation
10 Monthly Trips for Project Manager @ S200.00 per trip $2,000
(Itinerary for each trip should be shown)
2) Per Diem
20 Nights @ $65/day L2QQ
Total
2) Reproduction
, 50 x 300 Pages x $.06/page
3) Shipping
50 Reports x $10/report
Total
Supplies
1) Color Graphics
50 Reports @ $ 100/rcport , $5'00°
900
S6.400
4.60)
-------
PROFIT/FEE ANALYSIS
Contractor's input to total performance
Contractor's assumption of contract
cost risk
Contractor's record of previous
performance
VIEWGRAPH #7
TITLE: Profit/Fee Analysis
KEY POINTS:
The recipient must ensure that it pays only a fair and reasonable profit/fee
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 recipient must negotiate
a profit as a separate element of cost. To determine a reasonable
profit/fee, the recipient must consider the complexity of the work
performed, the risk borne by the contractor, the level of subcontracting,
and the contractor's past performance record.
When considering the contractor's input to total performance, the recipient
should look at the following:
- direct materials, including subcontracts
- equipment
- direct labor (professional and/or technical)
- overhead (professional and technical)
- consultants
- other direct costs
- general and administrative (G&A) expense.
4.7
-------
VIEWGRAPH #7 (cont.)
TITLE: Profit/Fee Analysis
KEY POINTS:
In considering a contractor's assumption of cost risk, the recipients should
look at the following:
- degree of risk/type of contract (fixed-price versus cost-plus-fixed-fee
contracts)
- reliability of cost estimates
- difficulty of the contractor's task.
Finally, in conducting a profit/fee analysis, the recipient should take into
consideration the contractor's previous record of performance including:
- cost efficiency
- management
- extent of contractors investment
- reliability of cost estimates
- inventive and developmental contributions
- timely performance
- socio-economic program participation
- extent of recipient (government) assistance.
4.8
-------
SAMPLE PROFIT/FEE OBJECTIVE
FORM
PROFIT/FEE OBJECTIVES
CONTRACTOR INF
COST CATEGORY
ACQUISITION OF:
DIRECT
MATERIALS
EQUIPMENT
PROFESSIONAL
TECHNICAL
PURCHASES
SUBCONTRACTORS
DIRECT LABOR
OVERHEAD
DIRECT LABOR
OVERHEAD
1. CONTRACTOR
ABC COMPANY
LIT TO TOTAL PERFORMANCE
RECIPIENT'S COST
(a)
S 2,500
50.000
CONSULTANTS
OTHER DIRECT COSTS: TRAVEL; REPORTSs
125,000
125.000
60,000
60,000
9,000
2. RFP OR CONTRACT NO.
01-111
I ^fM~*
WEIGHT I ASSIGNED I WEIGHTED PROFIT/FEE
RANGE (b) WEIGHT (c) ((a) x (c)) = (d)
I%to4% I 15%IS 63
I%to5%
I%to2%
6% to 9%
5% to 9%
4% to 7%
2% to 5%
I%to3%
3.5%
8% to 15% I 12.5%
7.5%
5.5%
2.0%
1,750
15.625
9,375
4,500
3.300
180
COMPUTER TIME
EXPENDABLE SUPPLIES; ETC
SUBCONTRACTS
GENERAL AND ADMINISTRATIVE
3.A. RECIPIENT'S TOTAL COST OBJECTIVE
FACTOR
COST RISK
PERFORMANCE
4.A. TOTAL
5. TOTAL PROFIT/FEE (toes 3 A. (d) + 4 A. (d))
$
50,000
4,500
486,000
1% to 5%
5% to 8%
OTHER FACTORS
6.5%
$
1,500
293
36.586
MEASUREMENT BASE
(a)
$486,000
$486,000
WEIGHT
RANGE (b)
0% to 6%
-2% to +2%
ASSIGNED
WEIGHT_(c)
0%
1%
WEIGHTED PROFIT/FEE
(3A.(a)x(c))
$
0
4,860
4.860
41.446
REMARKS
THE TYPE CONTRACT WILL BE A COST-PLUS-FIXED-FEE CONTRACT WITH MINIMAL COST
RISK TO THE CONTRACTOR.
PREPARED BY (Name and title)
Helen Jones, Negotiator
SIGNATURE
DATE
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EPA ACQUISITION REGULATION (EPAAR)
PROFIT AND FEE
4.8(c)
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Subpazt 1515.9Prof it
1515.300 Scope of gubpart.
This tubpart implements FAR Subpart 15.9 and prescribe* the EPA
structured approach for determining profit or fee prenegotiation
objective*.
1515.902 Policy,
* *
*
(a) IPX structured approach. PAR 15.902 require* that agencies use a
structured approach for determining the profit or fee objective in
those acquisitions that require cost analysis. The structured approach
prescribed in 1515.970 shall be used by EPA Contracting Officers in
developing a prenegotiation profit or fee objective except as provided
in paragraph (b)(l) of this section. The purpose of the structured
approach is:
(1) To provide a standard method of evaluation;
(2) To ensure consideration of all relative factors;
(3) To provide a basis for documentation and explanation of the
profit negotiation objective;
(4) To allow Contractors to earn profits commensurate with the
assumption of risk; *
*
9
(5) To reward Contractors who provide their own facilities, financing
and personnel; and
(6) To reward Contractors who undertake more difficult work requiring
higher risks.
(b)(l) Other methods. Contracting Officers may use methods other
than those prescribed in 1515.970 for establishing profit or fee
objectives under the following circumstances.
(i) Architect-engineering contracts;
(ii) Personal or professional service contracts;
(iii) Hanagement contracts, e.g., for maintenance or operation of
Government facilities;
(iv) Termination settlements;
f
(v) Engineering services, labor-hour, time and materials contracts
which provide for payment on a man-hour, nan~day, or man-month basis,
and where the contribution by the Contractor constitutes the furnishing
of personnel rather than the output of an integrated research, engi-
neering, or manufacturing operation;
ENVIRONHENTAL PROTECTION AGENCY ACQUISITION REGULATION (EPAAR)
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(vfj Construction contracts; and
(vii) Cost-plus-award-Cee contracts.
(2) Generally, it is expected that such methods will:
(i) Provide the Contracting Officer with a technique that will ensure
consideration of the relative value of the appropriate profit factors
described under "Profit factors," and
*
(ii) Strvt as a basis for documentation of the objective.
(c) Onder unusual circumstances, the Bead of the Contracting Activity
(HCA) nay specifically waive the requirement for the use of tht guide*
lines. Such exceptions snail be justified in writing and authorized
only in situations where the guidelines method is determined to be
unsuitable.
(d) Limitations. In the event that any of the methods used would
result in establishing a fee objective in violation of limitations
established by statute (see FAR IS .903(4)), tht maximum fee objective
shall be the percentage allowed pursuant to such limitations. Ho
administrative ceilings on profits or fees shall be established.
b
1515.905 Prof it-analysis factors.
Profit-analysis factors prescribed in tht EPX structured approach in
analyzing profit or fee include those prescribed by FAR 15,905-1 and
additional factors authorized by FAR 15.905-2 to foster achievement of
program objectives. These profit or fee factors are prescribed in
1515.970-1,
4
1515.970 EPA structured approach for developing profit or tee
objectives.
1515.970-1 General.
(a) It is the policy of the Agency to utilizt profit to attract
Contractors who possess talents and skills necessary to tht accom-
plishment of the objectives of the EPX and to stimulate efficient
contract performance. In negotiating profit/fee, it is necessary that
allr-wlativt factors be considered, and that fair and reasonable
amounts be negotiated which give the Contractor a profit objective
contnsuratt with tht naturt of tht work to bt done, tht Contractor's
input to tht total ptrformanct, and tht risks assumed by tht Contractor.
(b) to proptrly reflect differences among contracts and tht circum-
stances relating thereto and to select an appropriate relative
profit/fee in consideration of thtst difftrtncts and circumstances,
weightings have been developed for application by tht Contracting
Officer to standard measurement basts representative of tht prescribed
profit factors cited in FAR 15.905 and paragraph 1S15.970-2U)(1).
ENVIRONH2NTAL PROTECTION AGENCT ACQUISITION REGULATION (EPAAR)
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Each^rofit factor or subfactor, or cocpontnt thereof, has been
assi'gned weights relative to their value to the contract1! overall
effort and the range of weights to be applied to each profit factor.
1515.970-2 EPA structured system.
(a) (1) Profit factors. The factors set forth below and the weighted
ranges listed after each factor shall be used in all instances where
the profit is to be specifically negotiated.
CONTRACTOR'S INPUT TO TOTAL PERFORMANCE
Weight Ranee
(Percent)
Direct Materials:
Purchase* 1 to 4
Subcontracts 1 to 5
Equipment *... 1 to 2
Engineering labor , 8 to 15
Engineering overhead 6 to 9
Manufacturing labor 5 to 9
Manufacturing overhead 4 to 7
Consultants 2 to 5
Other direct costs * 1 to 3
General and administrative expenses 5 to 8
Contractor's assumptions of contract cost risk 0 to 6
Record of contractor's performance -2 to +2
Cost efficiency
Management
Extent of investment
Reliability of cost estimates*
Inventive and developmental contributions
Timely performance
Small business participation
Labor surplus area participation
Extent of Government assistance
Effect of competition
*
(2) The Contracting Officer shall first measure the 'Contractor's
Input to Total Performance' by the assignment of a profit percentage
witfcth the designated weight ranges to each element of contract cost
recognized by the Contracting Officer. Such costs are multiplied by
the specific percentages to arrive at specific dollar profits. The
amount calculated for facilities capital cost of money shall not be
included as part of the cost base foe the computation of profit or
fee. A complete discussion of how facilities capital cost of money is
determined and how it is applied and administered is set forth in PAR
31.205-10.-
ENVIRONMENTAL PROTECTION ACENCT ACQUISITION REGULATION (EPKAR)
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(3) After computing a total dollar profit for tht Contractor's Input
to Tfftal Performance, tht Contracting Officer thai! calculate the
pacific profit dollars assigned for coat risk and performance. This
is accompliihed by multiplying the total Government cost objective,
exclusive of any facilities capital cost of money, by the specific
weight assigned to cost risk and performance. The Contracting Officer
shall then determine the profit or fee objective by adding the total
profit dollars for the Contractor's Input to Total Performance to the
specific dollar profits assigned to cost risk and performance. The
profit or fee objective shall then be reduced by an amount equal to the
amount of facilities capital cost of money allowed. 'EPA Form 1900-2
shall be used to facilitate the calculation of this profit or fee
objective.
(4) The weight factors shown are designed for arriving at profit or
fee objectives for other than nonprofit and not-for-profit organiza-
tions. Adjustments as explained below are to be made to reflect
differences between profit and nonprofit organizations.
(i) For purposes of this subparagraph, nonprofit and not-for-profit
organizations are defined as those business entities organized and
operated exclusively for charitable, scientific or educational
purposes, no part of the net earnings of which inure to the benefit of
any private shareholder or individual, no substantial part of the
activities of which is carrying on propaganda or otherwise attempting
to influence legislation or participating in any political campaign on
behalf of any candidate for public office, and which are exempt from
Federal income taxation under section 51 of the Internal Revenue Code,
*
(ii) For contracts with nonprofit and not-for-profit organizations
where fees are involved, the following adjustments are required:
*
(A) A special factor of -3 percent shall be assigned in all cases.
A
(B) The weighted ranges from 'Record of Contractor's Performance'
shall be halved, i.e., -1 percent to +1 percent rather than -2 percent
to +2 percent.
(b) Assignment of values to specific factors(1) General. In making
his/her judgment of the value of each factor, the Contracting Office;
should be governed by the definition, description, and purpose of the
factors together with considerations for evaluating them as set forth
hertflh.
(2) Contractor's input to total performance. This factor is a
measure of how much the Contractor itself is expected to contribute to
the overall effort necessary to meet the contract performance require-
ments in an efficient manner* This factor, which is apart from the
Contractor's responsibility for contract performance, takes into
account what resources are necessary and what the Contractor itself
must do to accomplish a conversion of ideas and materials into the
final item called for in the contract. This is a recognition that
ENVIRONMENTAL PROTECTION AGENCY ACQUISITION REGULATION (EPAAR)
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within a givtn performance output, or within a given sales dollar
figate, necessary efforts on the part of individual contractors can
vary widely in both value and quantity, and that the profit objective
should reflect the extent and nature of the Contractor's contribution
to total performance. Greater profit opportunity should be provided
under contracts requiring a high degree of professional and managerial
skill and to prospective contractors whose skills, facilities, and
technical assets can be expected to lead to efficient and economical
contract performance. The evaluation of this factor requires an
analysis of the ccst content of the proposed contract, as follows:
(i) Direct materials (purchased parts, subcontracted items, and other
material). Analysis of these cost items shall include an evaluation of
the managerial and technical effort necessary to obtain the required
purchased parts, subcontracted items, and other materials. This evalu-
ation shall include consideration of the number of orders and suppli-
ers, and whether established sources are available or new sources must
be developed. The Contracting Officer shall also determine whether the
Contractor will, for example, obtain the materials by routine orders or
readily available supplies (particularly those of substantial value in
relation to the total contract costs), or by detailed subcontracts for
which the prime Contractor will be required to develop complex specifi-
cations involving creative design or close tolerance manufacturing
requirements. Consideration should be given to the managerial and
technical efforts necessary for the prime Contractor to'administer
subcontracts, and select subcontractors, including efforts to break out
subcontracts from sole sources, through the introduction of competi-
tion. These determinations should be made for purchases of raw
materials or basic commodities, purchases of processed material
including all types of components of standard or near-standard
characteristics, and purchases of pieces, assemblies, subassemblies,
special tooling, and other products special to the end-item. In the
application of this criterion, it should be recognized that the
contribution of the prime Contractor to its purchasing program might be
substantial. This might be applicable in the management of subcon-
tracting programs involving many sources, involving new complex
components and instrumentation, incomplete specifications, and close
surveillance by the prime Contractor's representative. Recognized
costs proposed as direct material costs such as scrap charges shall be
treated as material for profit evaluation. If intracompany transfers
are accepted at price, in accordance with FAR 31.20S-26(e), they should
be excluded from the fee computation. Other intracompany transfers
shair~be evaluated by individual components of cost, i.e., material,
laboc*. and overhead. Normally, the lowest weight for direct material
is 2 percent. A weighting of less than 2 percent would be appropriate
only in unusual circumstances when there is a minimal contribution by
the Contractor in relation to the total cost of the material.
(ii) Equipment. It is the policy of the Agency to contract with
individuals or firms who have special capabilities relative to the
needs of the EPA. These capabilities include personnel with particular
skills, or talents, and facilities (plant and equipment) necessary to
ENVIRONMENTAL PROTECTION AGENC* ACQUISITION REGULATION (EPAAR)
Part IS (March 8, 1984}
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compltte the contract objectives. For the purpose of profit/fee
ana3ry*is, equipment includes purchased items which are not to be an
integral part of the final product. It would generally consist of
production or test equipment. Where the EPA has to provide equipment
to the Contractor either as Government-furnished equipment or
Contractor-acquired equipment, appropriate profit/fee adjustments are
necessary. Generally/ a low weight range shall be assigned to the cost
of such equipment (1 to 2 percent).
*
(iii) Engineering labor and manufacturing labor. Analysis of the
engineering labor and manufacturing labor items of the cost content of
the contract should include evaluation of the comparative quality and
level of the engineering talents, manufacturing skills, and experience
to be employed. In evaluating engineering labor foe the purpose of
assigning profit dollars, consideration should be given to the amount
of notable scientific talent or unusual or scarce engineering talent
needed in contrast to journeyman engineering effort or supporting
personnel. The diversity, or lack thereof, of scientific and
engineering specialties required for contract performance and the
corresponding need for engineering supervision and coordination should
be evaluated. Similarly, the variety of manufacturing labor skills
required and the Contractor's manpower resources for meeting these
requirements should be considered. For the purpose of profit/fee
computation, manufacturing labor includes all nonprofessional labor,
e.g., secretaries, technicians and carpenters, etc. *
(iv) Engineering overhead, manufacturing overhead, and general and
administrative expenses. (A) Where practicable, analysis of these
overhead items of cost should include the evaluation of the make up of
the expenses and how much they contribute to contract performance.
This analysis should include a determination of the amount of labor
within these overhead pools and how this labor would be treated if it
were considered as direct labor under the contract. The allocable
labor elements should be given the same profit consideration that they
would receive if they were treated as direct labor. The other elements
of these overhead pools should be evaluated to determine whether they
are routine expenses such as utilities, depreciation, and maintenance,
and hence given lesser profit consideration given the pools as a whole.
(B) It is not necessary that the Contractor's accounting system break
down its overhead expenses within the classification of engineering
overhead, nanufacturing overhead, and general and administrative
expenses. The Contractor whose accounting system only reflects one
overhead rate on All direct labor need not change its system to
correspond with all the above classifications. Where practicable, the
Contracting Officer in his/her evaluation of such a Contractor's
overhead rate should break out the applicable sections of the composite
rate which could be classified as engineering overhead, manufacturing
overhead, and general and administrative expenses and follow the
appropriate evaluation technique. When it is not practicable to
evaluate the elements of the burden pool, the following rates should
usually apply:
ENVIRONMENTAL PROTECTION AGENCY ACQUISITION REGULATION (EPAAR)
Part 15 (Match 8, 1984)
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Percent
Engineering overhead ......................... . 7,5
Manufacturing overhead ....................... . 5.5
Composite overhead ........... , ....... . ........ 6.5
GiA ........................................... 6.5
(C) It is not necessary for the Contracting Officer to stake a
separate profit evaluation of overhead expenses in connection with each
procurement action for substantially the same product with the same
contractor. Once an analysis of the profit weight* to* be assigned the
overhead pool has been made, the weight assigned may be used for future
procurements with the same contractor until there is a change in the
cost composition of the overhead pool or the contract circumstances.
Consultants. Consultant costs, whether related to an individual
consultant or consulting firm should be analyzed from the standpoint of
what talents and skills the consultants have and how they will be used
on the contract* The analysis should consider if the Contractor
normally should be expected to have people with comparable expertise
employed as full-time staff or if the contract requires skills not
normally available on an employer-employee relationship. Where the
Contractor is using consultants to perform services which could
normally be expected to be done in-house, the rating factor should be
generally below 2 to 3 percent. Where noted experts are retained for
consultation on the contract, the rating will generally be higher*
4
(vi) Other direct costs. Items of costs, such as- travel,
subsistence, printing, and computers should generally be assigned a
rating of 1 to 3 percent. The analysis of these costs should' be
similar to the analysis of direct materials,
(3) Contractor's assumption of contract cost risk, (i) It is the
policy of the Administration to shift the risk of contract costs to the
fullest extent practicable to contractors and to compensate them for
the assumption of this risk. Evaluation of this risk requires a
determination of (X) the degree of cost responsibility the Contractor
assumes, (B) the reliability of the cost estimates in relation to the
task assumed, and (C) the chance of the Contractor's success or
failure. This factor is specially limited to the risk of contract
costs. Thus, such risks of losing potential profits in other fields
are not within the scope of this factor*
(ii) The first and basic determination of the degree of cost respons-
ibility assumed by the Contractor is related to the sharing of total
risk of contract cost by the Government and the Contractor through the
selection of contract type. The extremes are a cost-plus-fixed-fee
contract requiring only that the Contractor use its best efforts to
perform a task, and a firm-fixed-price contract for a complex item.
Such cost-plus-fixed-fee contract would reflect * minimum assumption of
cost responsibility, whereas such firm-fixed-price contract would
ENVIRONKENTAL PROTECTION ACENCT ACQUISITION REGULATION IEPAAR}
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reflect a complttt assumption of cost responsibility* Therefore* in
tht first step of determining what value is to be given for the
Contractor's assumption of contract cost risk, a zero rating shall be
given to a proposed cost-plus-fixed-fee best efforts contract, and a
higher rating shall be given to a closely priced fir»-fixed-price
contract for a new, complex item.
(iii) The second determination is that of the reliability of the cost
estimates. Sound price negotiation requires well-defined contract
objectives and reliable cost estimates. An excessive cost estimate
reduces the possibility that the coat of performance.will exceed the
contract price, thereby reducing the Contractor's assumption of
contract cost risk.
(iv) The third determination is that of the difficulty of the
Contractor's task. The Contractor's task can be difficult or easy,
regardless of the type of contract*
(v) Contractors are likely to assume greater cost risks only if the
Contracting Officers objectively analyze the risk incident to proposed
contracts and are willing to compensate Contractors for it. Generally,
a cost-plus-fixed-fee contract would not justify a reward for risk in
excess of 1 percent, nor would a firm-fixed-price contract justify a
reward of less than 4 percent* Where proper contract type selection
has been made, the reward for risk by contract type would usually fall
into the following percentage ranges:
Type of Contract - Percentage Range
*
Cost-plus-fixed-fee 0 to 1
Cost-plus-incentive-fee including
cost incentives only 1 to 2
Cost-plus-incentive-fee including cost*
performance, and delivery incentives *.,«*. 2 1/2 to 3
Pixed-price-incentive including cost
incentives only .*, * 2 to 4
fixed-price-incentive Including coat,
performance, and delivery incentives 3 to 5
Prospective price determination 4 to 5
Pir»-fixed-pric« 4 to
(A) These ranges may not be appropriate for all procurement situa-
tion*. Por instance, a fixed-price-incentive contract which is closely
priced with a low ceiling price and a high incentive share may be
tantamount to a firA-fixed-price contract* Xn this situation, the
Contracting Officer might determine that a basis exists for high
confidence in the reasonableness of the estimate, and that little
opportunity exists for coit reduction without extraordinary efforts.
The Contractor's willingness to accept ceilings on their burden rates
should be considered as a risk factor for cost-plus-fixed-fee contracts.
ENVIRONMENTAL PROTECTION AGENCY ACQUISITION REGULATION (EPAAR)
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(B) In making a contract cost tisk evaluation in a procurement action
involves definitization of a letter contract, consideration should
be given to the effect on total contract cost risk as a result of
having partial performance under a letter contract. Under some
circumstances, it may be reasoned that the total amount of cost risk
has been effectively reduced by the existence of a letter contract.
Under other circumstances, it may be apparent that the Contractor's
cost risk remained substantially as great as though a letter contract
had not been used, Where a Contractor has begun work under an
anticipatory cost letter, the risk assumed is greater than the normal
situation. To be equitable the determination of a profit'weight for
application to the total of all recognized costs, both those incurred
and those yet to be expended, must be made with consideraton to all
attendant circumstances, not just to the portion of costs incurred or
percentage of work completed, prior to definitization,
(4) Record of contract performance, (i) The purpose of this factor
is to motivate Contractors to improve their performance by rewarding
them for excellent past performance and penalizing them for poor
performance. Effective use of this factor requires that (X) reports on
the various aspects of past performance be obtained and evaluated; and
(B) this information be used in such a way as to motivate Contractors
to improve their performance.
(ii) The evaluation of a particular Contractor's past performance and
the importance placed upon the various subfactors listed below should
be done in such a way as to motivate the Contractor to improve its
performance. For instance, it might be pointless/ in evaluating the
performance of an autonomous division of a multidivisional contractor,
to place emphasis on the performance of anoth'er autonomous division.
Under such circumstances, the management of the division being
evaluated might have no means of controlling the performance of the
other division; therefore, emphasis on this performance by assigning a
plus or minus rating to this factor might have a negative effect upon
motivation to improve.
(iii) The weight to be assigned to this factor is arrived at on a
judgment basis rather than an arithmetical averaging of weights
assigned to ail factors, depending upon the particular procurement
situation, and the relative importance of the various factors. For
example, an evaluation of a particular Contractor may indicate that its
performance was satisfactory in most areas, except that it showed a
preference for doing all work in-house and a disinclination to support
Government small business objectives. In such a case the Contracting
Of-C-icer may feel that the importance of these factors might justify the
assignment of a lower overall rating for the record of past performance
(iv) xs stated above, the purpose of this factor is to reward a
Contractor for excellent past performance and penalize it for poor
performance. Therefore, performance which is rated as merely
satisfactory should generally be assigned a weight of zero. However, a
Contractor who has consistently met contractual requirements may be
awarded a plus.
ENVIRONMENTAL PROTECTION AGENCY ACQUISITION REGULATION (EPAAR)
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(v) The following factors art to be considered in evaluating a Con-
tractor1* performance record:
(A) Cost efficiency. Low co«t performance reflecting economic uae of
facilities and manpower, sound purchasing methods and subcontracting
procedures, and effective inventory control are criteria for considera-
tion. Improvement in efficiency through investment in plant
modernization, past efficiencies, or lac* thereof, effectiveness of the
Contractor's aake-or-buy program, purchasing and subcontracting system
and inventory control should be evaluated*
.
(B) Management* Stability and competence of management personnel,
their willingness and ability to adjust company resources to meet
peculiarly difficult and changing control requirements are criteria for
consideration. The degree of cooperation by the Contractor with the
objectives of the Government should be considered.
(C) Extent of the contractor's investment. The extent of a
Contractor's total investment (i.e.* both equity and borrowed capital)
in the performance of the contract will be taken into consideration in
determining the amount of the fee or profits.
Reliability of cost estimates. Accuracy and reliability of
previous cost estimates should be considered. Where substantial
overruns have occurred, the Contracting Officer should attempt to
determine the reasons.
(E) Inventive and developmental contributions, -txterft and nature -of
Contractor-initiated and financed research, development, design work,
product engineering, quality control, and manufacturing processes and
techniques in the areas of concern to the EPA should be analyzed.
(F) Timely performance. The Contractor's performance record,
considering excusable delays and the Contractor's efforts to overcome
delays, should be analyzed.
(G) Small business participation. The Contractor's policies and
procedures which energetically support Government small business
programs pursuant to FAR Subpart 19.7 should be given favorable
consideration. Any unusual effort which the Contractor displays in
subcontracting with small concerns, particularly for development type
work likely to result in later production opportunities, and overall
effectiveness of the Contractor in subcontracting with and furnishing
assistance to small concerns should be considered. Conversely, failure
or-unwillingness on the part of the Contractor to support Government
small business policies should be viewed as evidence of poor
performance for the purpose of establishing a profit objective.
(H) Labor surplus area participation. A similar review and
evaluation (as required in paragraph (b)(4){v)JG) of this section)
should be given to the Contractor's policies and procedures supporting
the Government's labor surplus area program pursuant to FAR Part 20.
ENVIRONMENTAL PROTECTION AGENCY ACQUISITION REGULATION (EPAAA)
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Particular favorable consideration should bt given to a Contractor who
(a) mafcef_a significant effort to help find Jobs and provide training
for the hardcore unemployed, or (b) promotes maximum subcontractor
utilization of certified-«ligible concerns, as defined in FAR 20.101.
(I) Extent of Government assistance. The Government encourages its
Contractors to perform their contracts with the minimum of financial,
facilities, or other assistance from the Government* Where extra*
ordinary financial, facilities, or other assistance must.be furnished
to a Contractor by the Government* such extraordinary assistance should
have a modifying effect in determining what constitutes, a {air and
reasonable profit or fee*
(J) Effect of competition. When competition is effective and
proposals are on a firm-fixed-price basis, the Contracting Officer
normally need not consider in detail the amount of estimated profit
included in a price. When effective competition is lacking, and in all
cases where cost analysis is performed in accordance with FAR Subpart
15.8, the estimate for profit, target .profit or fee, or the proposed
fixed fee should be analyzed in the same manner as all other elements
of price.
1515.970-3 Documentation.
i
Determination of the profit or fee objective, in accordance with this
subpart shall be fully documented. Since the profit objective is the
Contracting Officer's pre-negotiation evaluation of a total profit
allowance for the proposed contract*' the amounts developed for each
category of cost will probably change in the course of negotiation.
Furthermore, the negotiated profit will probably vary from the profit
objective and from the prenegotiation detailed application of the
weights to each element of the Contractor's input to total
performance. Since the profit objective ii viewed as a whole rather
than as its component parts, insignificant variations from the
prenegotiation profit objective, as a result of changes to the Con-
tractor's input to total performance, need not be documented in detail.
Conversely, significant deviations from the profit objective
necessary to reach a final agreement on profit or fee shall be
explained in the record of negotiation prepared in accordance with FAR
15.808.
ENVIRONMENTAL PROTECTION AGENCY. ACQUISITION REGULATION (tPAAR)
Part 15 (April 1, 1985)
4.8(n)
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TECHNICAL PROPOSAL
Panel evaluation of proposals
Panelist Points for Evaluation Consensus
Criteria 1 After Discussion
A 50
B 90
20
160
45*
* Evaluation must be based on consensus not averaging
VIEWGRAPH #8
TITLE: Technical Proposal
KEY POINTS:
Panel evaluation of proposals must be based on the evaluation criteria
published in the RFP.
The final evaluation must be based on a consensus and not an averaging of
scores.
4.9
-------
SAMPLE RFP EVALUATION CRITERIA AND
THEIR RELATIVE IMPORTANCE
EXAMPLE 1
1. SPECIAL INSTRUCTION
A contract resulting from this request shall be awarded in response to a proposal providing the
lowest and best proposal to the State. An evaluation of the offerer's proposal will be based on
the following categories and respective weight criteria:
A. The Total Cost 45%
B. Experience/Expertise 40%
C. Implementation Plan or Approach 15%
2. COST INSTRUCTION
The offeror shall provide a firm, fixed hourly price for all services required by the Scope of
Work. This price shall be shown on the Request for Proposal document which must be
returned with the proposal.
A. The hourly rate shall include all expenses. The State shall not be invoiced separately for
travel expenses. ,
3.
FFEROR'S EXPERIEN
*
A. The offeror should provide a list of previous and current contracts, if any, awarded by a
governmental agency or public utility to the offeror which are considered identical or
similar to the Scope of Work described herein.
B. The offeror should provide a list of previous and current contracts which were awarded to
the offeror by a public utility that is under the jurisdiction of the State Public Service
Commission or operates in the State.
C. The offeror may provide a list cf other services, if any, performed by the offeror which
were not listed above.
D. The offeror should include in each list described above, the following:
1. Contract duration, including dates
2. Geographic area served
3. A brief, written description of the problem solved and methodology employed
4. Name, address and telephone number of contracting agency which may be contacted
for verification of all data submitted
E. The above information should be shown on the form attached as Exhibit A to this proposal
or in a similar manner.
4.9(a)
-------
SAMPLE RFP EVALUATION CRITERIA AND
THEIR RELATIVE IMPORTANCE (com.)
4. EXPERTISE OF OFFEROR'S PERSONNEL
A. The offerer should provide an organizational chart showing the staffing and lines of
authority for the key personnel to be used in the project. The relationship of the project
leader to management and 10 support personnel should be clearly illustrated.
B. The offerer should provide a resume and data related to previous work assignments as may
relate to this RFP for each key personnel to be assigned to the project Exhibit B is
furnished for the offerer's convenience in presenting such data.
5. APPROACH TO THE SCOPE OF WORK
A. The offerer should present a proposed method of satisfying the requirements of the Scope
of Work as specified herein.
B. The offerer may utilize a written narrative or any other printed technique to demonstrate his
ability to satisfy the Scope of Work. This narrative should describe a logical progression
of tasks and effort starting with the initial steps or tasks to be accomplished and continuing
until all proposed tasks are fully described The language of the narrative should be
straightforward and limited to the facts; solutions to problems; and plans of proposed
action. The use of technical language should be minimized and used only to describe a
technical process. Exhibit C is attached for the offerer's convenience in presenting a
narrative plan of action.
* *
C. The offerer should not limit his written narrative or other technique to demonstrate his
ability to satisfy the Scope of Work to a mere restatement of the items listed under Part
Two: Scope of Work; 1. General Requirements; 1.1. Furthermore, the offerer should not
feel restrained to limit himself or herself to those items listed as the scope of work.
4.9(b)
-------
SAMPLE RFP EVALUATION CRITERIA AND
THEIR RELATIVE IMPORTANCE (com.)
EXAMPLE 2
EVALUATION CRITERIA
1. Transmittal Letter
2 . Technical Proficiency of the Firm
a. Project Examples
b. Five Case Histories
c . Facilities and Equipment
3 .
Personnel Capability
a. Qualifications and Experience
b. Staffing Pattern
4. Administration and Management
a. EEO, WBE, SEE, MBE
b. Financial Stability (separate submittal)
c . Project Management
d. QA/QC, Safety, Chain-of-Custody
5 . Technical Approach
a. Comprehension of Objectives
b. Investigative Technique
c. Feasibility Method
Totals
Max
Points
0
20
10
5
15
5
2
5
5
3
10
15
5
100
Page
.im
1
20
15
30
71
4.9(c)
-------
TECHNICAL ANALYSIS OF COST PROPOSAL
Quantity and kinds of materials proposed
Necessity for the number and kinds of labor
hours and the labor skill mix
Special tooling, equipment or facilities
Other data pertinent to the cost or price
analysis
VIEWGRAPH #9
TITLE: Technical Analysis of Cost Proposal
KEY POINTS:
In evaluating the cost proposal, the recipient should consider the proposed
technical approach for accomplishing the objectives. The recipient should
consider factors such as:
- the quantity and kinds of materials proposed
- the necessity for the number and kinds of labor hours and the labor
skill mix
- any special tooling, equipment or facilities
- any other data pertinent to the cost or price analysis.
4.10
-------
REPRESENTATIONS & CERTIFICATIONS
ABC COMPANY
I CERTIFY THAT.
Bonding and insurance
Conflict of interest (PRP)
Master list of debarred, suspended
or voluntarily excluded personnel
Independent price determination
Drug Free
VIEWGRAPH #10
TITLE: Representations & Certifications
KEY POINTS:
When evaluating bids and proposals, the recipient must ensure that the
required representations and certifications are included. If an award is
over $100,000, construction contractors must comply with the minimum
requirements for bonding outlined in 40 CFR 3L36(h). In addition, the
contractor must offer sufficient certification that all contractual insurance
requirements, which are to be outlined in the contract documents, have
been fulfilled. (40 CFR 35.6590)
The recipient must evaluate information provided by potential contractors
and determine that they do not have any conflicts of interest, which might
impair their performance. Each prospective contractor must provide with
its bid or proposal:
- information on its financial and business relationships with all
Potentially Responsible Parties (PRPs) at the site, and with their
parent companies, subsidiaries, affiliates, subcontractors, or current
clients. (This disclosure requirement encompasses past and
anticipated financial business relationships, including services related
to any proposed or pending litigation, with such parties);
- certification that, to the best of its knowledge and belief, it has
disclosed such information or no such information exists;
4,11
-------
VIEWGRAPH #10 (cont.)
TITLE: Representations & Certifications
KEY POINTS:
- a statement that it will disclose immediately any such
information discovered after submission of its bid or proposal
or after award. (40 CFR 35.6550 (b)(l)and (2))
The recipients must also consult the most current "List of Parties
Excluded from Federal Procurement and Nonprocurement Programs."
Recipients must not award a contract or permit any award of a
subcontract to any party which is debarred, suspended, or otherwise
excluded from participation in Federal assistance programs. (Note:
for a copy of the most current list, contact the Regional Counsel's
office.) (40 CFR 35.6560).
The contractor must submit with their application for assistance EPA
Form 5700-49 certifying that they re not debarred or suspended.
The recipient must submit with their application a cerrtification that
they will provide a drug-free workplace*
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. (40 CFR 35.6550 (b)(3))
4.12
-------
RFP & RFQ - CONTRACT NEGOTIATION
Best and final offers (RFP)
Negotiating elements and process
(RFQ)
VIEWGRAPH#11
TITLE: RFP & RFQ - Contract Negotiation
KEY POINTS:
The recipient may make an award based solely on the original proposals
submitted if the solicitation so states. Otherwise the recipient must
negotiate with the firms which are within the competitive range to obtain
best and final offers. If any single offerer is allowed to alter its proposal,
all offerers within the competitive range must be afforded the same
opportunity. The recipient then evaluates the final offers and decides
which proposal is most advantageous to the recipient. The firm chosen to
receive the contract award should be notified in writing, and all
unsuccessful offerers must be informed of their rejection.
Specific elements that could be established during these negotiations
include:
- project schedule
- staffing requirements
- level of effort
- scope of services and deliverables
- areas of responsibility and liability
- fee structure, amount of compensation, and method of payment.
4.13
-------
VIEWGRAPHtfll (cont.)
TITLE: RFP & RFQ - Contract Negotiation
KEY POINTS:
During the negotiation process, the recipient and potential contractor 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.
4.14
-------
BIDS/PROPOSALS EXCEED
IN-HOUSE ESTIMATE
W-HOUSE
ESTIMATE
OFFEROP
SI.
OFFEROR 2
52 OM
OFFEROP
SI
6M
Reject all bids/proposals, revise the
documents and rebid the work
Take deductive alternatives as
outlined in the solicitation
Augment available funds with
non-EPA funds
Request additional EPA financial
assistance
VIEWGRAPH #12
TITLE: Bids/Proposals Exceed In-House Estimate
KEY POINTS:
Bids/proposals in excess of the project budget may result from one or
more of the following causes:
- contract documents may be incomplete, inaccurate, or ambiguous, thus
forcing the offeror to add contingencies to the bid/proposal 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) 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/proposal 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.
- inadequate in-house estimate
4.15
-------
VIEWGRAPH #12 (cont.)
TITLE: Bids/Proposals Exceed In-House Estimate
KEY POINTS:
If the lowest responsive bid/proposal received exceeds the amount
anticipated in the project budget, the recipient may reject all the
bids/proposals and revise the documents (correcting any problems or
reducing the project scope) and rebid the work. If the recipient rejects any
or all of the bids/proposals, they must document their reasons in the files.
They recipient should notify the bidders/offerers why the bids/offers were
rejected.
The recipient may choose to take deductive alternatives, i.e., eliminate
optional scope of work items clearly identified as an alternative in the
EFB. If the recipient chooses this alternative, it must ensure that all
responsive bids are reviewed under the revised bid formulation and that
deductive alternatives have been taken in the exact order shown in the
IFB. The recipient also must ensure that only sufficient deductive
alternatives have been taken and that the scope of the project remains
consistent with the original project description.
* If the low bid/proposal still exceeds the amount of available funds, the
recipient 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.
If the recipient decides to request additional EPA funding, then the
recipient must provide EPA with documentation supporting the need for
additional funding. 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 recipient cannot reasonably
provide the additional funds required.
4.16
-------
BIDS/PROPOSALS SIGNIFICANTLY
LESS THAN IN-HOUSE ESTIMATE
Recipient accepts lowest bid/proposal
Bidder corrects or withdraws bid/proposal
OKKkHOH 1
I1OO.OO
Oht-tHOH 2
J/b.OOO
Ot-l-hHOH .'
SI JO.OO
VIEWGRAPH #13
TITLE: Bids/Proposals Significantly Less Than In-House Estimate
KEY POINTS:
* Bids/proposals significantly less than the project budget or out of line with
other bids/proposals can result from any of the following causes:
- contract 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/proposal or may have significantly underestimated the scope
of the project
- the solicitation may be ambiguous on how the bid/proposal is to be
prepared
- the low bidder may have purposely submitted an unreasonably low
bid/proposal in an attempt to "buy-in".
If the lowest bid/proposal is significantly less than the project budget, and
the recipient has reasonably determined the bidder to be responsive,
responsible, and the price reasonable, the contract should be awarded.
However, recipients should be alert to the possibility of a "buy-in" and
should be prepared to administer the contract in a manner that adequately
controls change order costs.
4.17
-------
VIEWGRAPH #13 (cont.)
TITLE: Bids/Proposals Significantly Less Than In-House Estimate
KEY POINTS:
If a bid/proposal mistake is discovered or suspected, the recipient must
request written verification of the bid/proposal amount in question from
the bidder, allowing the bidder adequate time to respond. The bidder
either may confirm the bid/proposal amount by denying any error or may
confirm a mistake and request that the bid/proposal be either corrected or
withdrawn. To be allowed to correct a bid/proposal, the bidder must
demonstrate by clear and convincing evidence of the error, its nature, how
it occurred, and the intended amount. To withdraw a bid/proposal, the
bidder must confirm the existence of the error and how it occurred, and
must request that the bid/proposal be withdrawn.
4.18
-------
BID PROTEST
Recipient protest procedures
Review of protest by EPA
tPPOTESTftlt
mm
-»*:-' :*:-:*:
m&m
VIEWGRAPH #14
TITLE: Bid Protest
KEY POINTS:
Bid protests are written complaints filed by parties with a direct financial
interest affected by the recipient's procurement action. Complaints
typically concern the solicitation (e.g., content or wording of, or
deficiencies in, the IFB or RFP and in specifications), evaluation and
selection process, or the actual award of contracts.
A recipient is required to establish procedures to promptly consider and
resolve bid protests when they are filed (40 CFR 31.36 (12)). Although
not required to do so, a recipient generally should defer award of the
contract and delay initiation of remedial activities until a determination of
the protest can be made. If the recipient 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.
A protestor may request that EPA review a recipient's protest decision
only after the recipient has acted on the bid protest and the protestor has
exhausted all available administrative remedies at the recipient's level.
EPA's review of protest appeals is limited to:
- violations of Federal law or regulations and the standards of 40 CFR
31.36
- violations of the recipient's protest procedures for failure to review a
complaint or protest.
4.19
-------
VIEWGRAPH #14 (cont.)
TITLE: Bid Protest
KEY POINTS:
A prime contractor may request EPA review of a recipient's protest
decision, if the protest concerns any procurement requirement of 40 CFR
Part 35, Subpart O.
A prime contractor's subcontractor may request an EPA review only if the
protest concerns the procurement requirements of 40 CFR 35.6610.
Protests received by EPA other than those specified above will be referred
to the recipient.
4.20
-------
MODULE 4 - EVALUATION/AWARD PHASE
Case Study #3. Exercise 1
For this case, assume you are the recipient and have filled out the cost or price
summary forms. Evaluate the forms using the questions below.
Questions
1. Examine the Cost/Price Summary. Does this document contain all the necessary
information to make a proper evaluation of this bid? If not, what other information
should be included?
2. What are some considerations in evaluating the legitimacy of direct labor costs?
3. What documents or information could you examine to determine the validity of
equipment, material, and supply costs?
4. Compare the in-house cost estimate ($6,500,000) with the cost estimate provided
by XYZ Construction. Does the XYZ estimate seem reasonable? What factors did
you consider to make this determination?
5. Has a Federal agency conducted any review of the contractor's accounts or records
in connection with any other Federal Assistance Agreement within the last 12
months? What action is necessary if an audit has not occurred within this time
period?
Note: The Cost or Price Summary is a document used by EPA. It is being used with this
exercise to familiarize participants with the types of information to examine when
doing a proposal evaluation.
-------
Module 4 Exercise
AEPA
COST OR PRICE SUMMARY
instructions btfort complttmo tht$ form
I - GENERAL
1 R£C Pi£S
:; strict
3 NAME 0* CONTRACTOR OR SUBCONTRACTOR
r
'0 jr
2 ASSISTANCE DENTlf ICAT1CN SC
4 DATE Of
5 AOORESS o* CONTRACTOR OR SUBCONTRACTOR CMC/W**
P.O. 3cx
IItcwn, U.S.A.
NUMBER
202/777-1234
OF S6RVICE TO SC
Remedial Action/
Construction
ii - COST SUMMARY
HOURLY
RAT|
ISTIMATID
COST
TOTALS
proiect Manaqer
000
35.00
35.000.00
Construction Project Director
500
33.00
82.500.00
;i1 Engineer
nlc2^ st
000
.10. nn
fin.nnn on
Secretary
500
.15. no
OIRICT LABOR TOT At
C05TS
CSTIMAT£D
COST
Ovemead Rate (Based on Direct Labor
25.20»260.000.0C
125.520 no
Dollars)
COSTS TOTAL
325 52
^^^c W-^^^^^^^^^^
9 0*«« SiREC* COSTS
COST
Attachment A)
2.000.00
OHM
1.500.00
TRAVfLSUBTOTAL
MATERIALS $VJ»»\.liS
Land
Transmission Systenureplace well pumps
Office Buildina and Lab 8000 S.F.)
GAG Euipment (Piin. Instrumentatinn
SUBTOTAL
A cnn nn
OTY
COST
CSTUMATfO
COST
200,000.00
2,709,980.00
K5QCLOOO.QO
2.500.000.00
e SUBCONTRACTS
ISTtMATlO
COST
SUBCONTRACTS SUBTOTAL
QTM(R
OT>41R SUBTOTAL
CSTtMATtD
COST
OTMIR OIRICT COSTS TOTAL
10 TQTAt tSTlMATIQ COST
1 1 »«0*'T
k
4-S4)
-------
:3 COMPETITOR S CATALOG UST1NGS.
PART III - PRICE SUMMARY
IN. HOUSE ESTIMATES, PRIOR QUOTES
> -* ' -^^^^^^^^^^^^«^^~^^^^
.^ «_*_ _ ^ ^ MM^ ^^^^flMW^^^H^V^^^HIHHM^^M
____^^^_^^^^^^^^HP^^^MH«M^^BI^H^^^H^W«MlP^V4H^^^^^^^^^^^^^^M^H^"V^^^^^B^^^^^BV4^^B^^HHH^^^^^^^^^H^H^W^^^^^^^^^^tal^^^^^^^^^^^^^^^^^^^H
^
^ "^^^^ ^^^^^^^^^^^^^» ^»^^^^^^^^nfc-^-^^^^^^«
MAflKrT PROPOSED
^^M^HW^i^h^^^^^^^iH^^^^^^^v^^^ ;
^^^^^^i^^^B^AHH^HV^H^^^^^^^^^^^^^^^HB^^^^^^
» 1
PART IV - CERTIFICATION!
U CONTRACTOR
'4* MAS A FEDERAL AGENCY OR A FEDERALLY CERTIFIED STATE OR LOCAL AGENCY PERFORMED AhY REVIEW OF YOUR ACCOUNTS OR
RECORDS IN CONNECTION WITH ANY OTHER FEDERAL ASSISTANCE AGREEMENT OR CONTIUCT WTTHIN THE PAST 1 2 MONTHS?
YES
NO fff
of
U.S. EPA Office of Inspector General
P.O. Box
Smalltown, U.S.A. 22222
313/621-1234
40 THIS SUMMARY CONFORMS WITH THE FOLLOWING COST PRINCIPLES
CFR Chapter l.Part 31.1 & 31.2
1 4c This propout »
for uM in connection with end m rtsponM to
Th>» it 10 ctrtity to tn« b«»i of my knowftdgt *n ba
w*ara tha abova cost and pricing data hava ba*n datarmmad. aa a ra*vlt ol audit
data
nt for tha financial
i. currant
(3} TITLE OF PROPOSER
President
OF nevtcww
DATE Of EXECUTION
' ^
V
15 RECIPIENT
i canify thai I hava ravi«w«d tha coavprtca lumman/ tai fonh haram and tha
award
aocaptaUa for aubagra«m*ni
TITLE OF PROPOSER
SIGNATURE OF REVIEWER
DATE OF EXECUTION
18 EPA REVIEWER
(3) TTUE OF PROPOSER
SIGNATURE OF REVIEWER
DATE OF EXECUTION
EPA Form 5700-41 (Rtv 4-M}
-------
Module 4 Exercise, Attachment
Other Direct Costs
Travel
1) Transportation
10 monthly trips for Project Manager @ $300.00 per trip $3,000.00
2) PerDiem
20 Nights @ $75/day 1,500.00
Total
$4,500.00
-------
Ill
-------
CONTRACT
CONTENTS
VIEWGRAPH #1
TITLE: Contract Contents
KEY POINTS:
This module will describe the relevant clauses and provisions a contract
must contain.
5.1
-------
OBJECTIVE OF THIS MODULE
Identify major contract provisions
Discuss recipients' and
contractdors' conflict of interest
Discuss which procurement
provisions apply to subcontracts
VIEWGRAPH #2
TITLE: Objective of This Module
KEY POINTS:
The main purpose of this module is to identify and explain the minimum
provisions each contract should contain. This includes specific EPA
contract provisions and model clauses for all contracts.
In addition this module will discuss which of EPA's procurement
requirements apply to recipient's contractor's award of subcontracts.
5.2
-------
CONTRACT PROVISIONS
GENERAL
CONTRAC
GENERAL
Nature, scope and extent of
the work
Timeframe for performance
Total cost of the contract
Payment provisions
VIEWGRAPH #3
TITLE: Contract Provisions - General
KEY POINTS:
Each contract must be a sound and complete agreement and include, as a
minimum, the following provisions:
- the nature, scope and extent of the work to be performed
- delivery schedule or performance period
- the total cost of the contract
- the provisions for invoicing and payment
- shipping and marking instructions
- inspection and acceptance
- delivery destination. (40 CFR 35.6595 (a))
5.3
-------
CONFLICT OF INTEREST
CONTRACT
CONFLICT OF
INTEREST
Recipient code of conduct
Contractor disclosure and
conflict of interest
requirements
- Provide contract data
- Restrict employment
VIEWGRAPH #4
TITLE: Conflict of Interest
KEY POINTS:
EPA's policy is to prevent personal or organizational conflicts of interest
in the award and administration of EPA assistance, including contracts.
To prevent this, EPA requires that recipients maintain a written code or
standard of conduct to govern the performance of its employees engaged
in the award and/or administration of contracts supported by Superfund.
This code must provide that no recipient employee shall participate in the
selection, award, or administration of a contract supported by Superfund if
a real or apparent conflict of interest exists. (40 CFR 31.36 (b) (3))
The contractor shall not provide to any party other than the recipient, EPA,
or its authorized agents data generated or otherwise obtained in the
performance of contractor responsibilities under a contract for the life of
the contract and 5 years after.
The contractor shall not accept employment from any party other than the
recipient or Federal agencies for work directly related to the site(s)
covered under the contract for five years after the contract has terminated.
The recipient agency may exempt the contractor from this requirement
through a written release. This release must include EPA concurrence.
5.4
-------
CONTRACT PROVISIONS
CONTRAC
OTHER
Energy efficiency
Violating facilities
Patents, inventions and copyrights
Labor standards
Reporting requirements
Bonding and insurance
VIEWGRAPH #5
TITLE: Contract Provisions
KEY POINTS:
A contract must comply with mandatory standards and policies on energy
efficiency contained in the State!s energy conservation plan which is
issued in compliance with the Energy Policy and Conservation Act (Pub.
L. 94-163). (40 CFR 35.6595 (b)(l))
Contracts in excess of $100,000 must contain a provision which requires
contractors' compliance with all applicable standards and which prohibit
the use of facilities included on the EPA List of Violating Facilities under
nonexempt Federal contracts, grants or loans. (40 CFR 35.6595 (b)(2))
All contracts must include notice of EPA requirements and regulations
pertaining to reporting and patent rights under any contract involving
research, developmental, experimental or demonstration work with respect
to any discovery or invention which arises or is developed while
conducting work under a contract. This notice shall also include EPA
requirements and regulations pertaining to copyrights and rights to data.
(40 CFR 35.6595 (b)(3))
The recipient must include a copy of EPA form 5720-4 ("Labor Standards
Provisions for Federally Assisted Construction Contracts") in each
contract for construction. The form contains the Davis-Bacon Act
requirements (40 U.S.C. 276a-276a-7), the Copeland Regulations (29 CFR
Part 3), the Contract Work Hours and Safety Standards Act Overtime.
5.5
-------
VIEWGRAPH #5 (cont.)
TITLE: Contract Provisions
KEY POINTS:
Compensation (940 U.S.C. 327-333), and the nondiscrimination
provisions in Executive Order 11246, as amended.
The contract must contain notice of awarding agency requirements and
regulations pertaining to reporting. (40 CFR 35.6550 - .6670) (See
Module 6, Contract Administration, for more detail on reporting
requirements.)
Record retention requirements must also be contained in the contract. (40
CFR 35.6705) (See Module 6, Contract Administration, for more detail
on record retention requirements.)
Bonding requirements:
If the contract is for less than $100,000 the recipient follows
its own bonding requirements.
If the contract is $100,000 or more the recipient must follow
the following bonding requirements, unless EPA makes a
determination that reduce bonding adequately protects the
Federal interest:
5% bid bond
100% performance bond
100% payment bond
Insurance requirements: Recipients must require contractors to provide
insurance to protect against:
Accidents; and
Catastrophic loss.
5.6
-------
CONTRACT CLAUSES
CLAUSE 1
CLAUSE 2
CLAUSE 3
Value engineering
Supersession
Privity of contract
Suspension of work
Termination
Remedies
Different site
conditions
Chanaes
VIEWGRAPH #6
TITLE: Contract Clauses
KEY POINTS:
Each contract must contain certain model clauses as outlined in 40 CFR
33.1030 (1987). In addition, other clauses are recommended. These are
described in more detail below.
* Value engineering is a systematic and creative analysis of each contract
item or task to ensure that it is essential. The recipient is encouraged to
include value engineering clauses in contracts for construction projects of
sufficient size to offer reasonable opportunities for cost reduction.
The recipient must comply with the requirements regarding model
contract clauses described in 40 CFR 33.1030 (1987) and ensure that these
clauses supercede any conflicting provisions of the contract.
Some of the model clauses in 40 CFR 33.1030 (1987) are as follows:
Though the contract is expected to be funded in part with funds from EPA,
neither EPA nor the United States shall be party to any contract nor to any
solicitation or request for proposals.
5.7
-------
VIEWGRAPH #6 (cont.)
TITLE: Contract Clauses
KEY POINTS:
All construction contracts must contain a clause regarding suspension of
work by either the recipient or the contractor. For instance, the recipient
may order the contractor in writing to suspend, delay or interrupt all or
any part of the work for such a period of time as the recipient may
determine to be appropriate. If this occurs, the recipient must consider
making an adjustment for an increase in cost.
The contract should contain a clause regarding termination for cause and
for convenience by the recipient, including the manner by which it will be
effected and the basis for settlement.
Unless otherwise provided in the contract, all claims, counter-claims,
disputes and other matters in question between the recipient and the
contractor arising out of, or relating to, the contract or the breach of it will
be decided by arbitration or other administrative process if the parties
mutually agree, or in a court of competent jurisdiction within the State in
which the recipient is located.
5.8
-------
CONTRACT CLAUSES (cont.)
CLAUSE 8
CLAUSE 9
CLAUSE 10
Audit; access to records
Covenant against contingent
fees
Gratuities
Responsibility of the
contractor
Final payment
VIEWGRAPH #7
TITLE: Contract Clauses (cont.)
KEY POINTS:
The contractor shall maintain books, records, documents and other
evidence directly pertinent to performance on EPA funded work under the
contract for a ten year period.
The recipient must comply with the requirements regarding records access
described in 40 CFR 31.42 (e). This states that EPA, and the Comptroller
General of the United States, or any of their authorized representatives
shall have access to any pertinent books, documents, papers, or other
records of recipients or contractors which are pertinent to the grant, in
order to make audits, examinations, excerpts, and transcripts. This right
of access is not limited to the required retention period, but lasts as long as
the records are retained. (40 CFR 35.6710 (a))
The recipient must ensure that all files are available to the public, with the
exception of certain policy, deliberative, and enforcement documents
which are held confidential. (40 CFR 35.6710 (b))
The contractor must assure that no person or selling agency was employed
or retained to solicit or secure the contract upon an agreement or
understanding for a commission, percentage, brokerage or contingent fee.
Bona fide employees or bona fide established commercial or selling
agencies maintained by the contractor for the purpose of securing business
are exempt.
5.9
-------
VIEWGRAPH #7 (cont.)
TITLE: Contract Clauses (cont.)
KEY POINTS:
The contract must contain a clause regarding the termination of a contract
if it is discovered that the contractor or any of the contractor's agents or
representatives offered or gave gratuities (in the form of entertainment,
gifts or otherwise) to any official, employee or agent of the recipient, the
State or EPA, in an attempt to secure a contract or favorable treatment in
awarding, amending or making any determinations related to the
performance of the contract.
The contract should contain clauses which apply to contractor
responsibilities. Note: there are specific clauses which apply to
construction contractor responsibilities and service firm responsibilities.
The contract must contain a clause regarding final payment upon
satisfactory completion of the work performed under the contract.
5.10
-------
SUBCONTRACTS AWARDED BY A CONTRACTOR
Contractors must comply with specific provisions
when awarding subcontracts:
- debarred, suspended and voluntarily
excluded persons
- minority, women's and small business
enterprises
- Federal cost principles
- prohibited types of contracts
cost, price, and profits analysis
- specifications
VIEWGRAPH #8
TITLE: Subcontracts Awarded by a Contractor
KEY POINTS:
A contractor must comply with the provisions of 40 CFR 35.6610 in the
award of contracts (i.e. subcontracts). (This section does not apply to a
supplier's procurement of materials to produce equipment, materials or
catalog off-the-shelf, or manufactured items.) The provisions are as
follows:
- the requirements regarding debarred, suspended, and voluntarily
excluded persons in 40 CFR 35.6560
- the limitations on contract award in 40 CFR 35.6550 (a) (8)
- the requirements regarding minority and women's business enterprises,
and small business enterprises in 40 CFR 35.6580
- the Federal cost principles in 40 CFR 31.22
- the prohibited types of contracts in 40 CFR 35.6575 (a)
- the cost, price and profit analysis requirements in 40 CFR 35.6585
- the requirements regarding specifications in 40 CFR 35.6555 (a) (6)
and(c)
- the applicable contract provisions and model clauses in 40 CFR
35.6595 (b) and (c).
5.11
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I IT111
f i
|1 Mi
i ,
i
I T
-------
CONTRACT
ADMINISTRATION
VIEWGRAPH #1
TITLE: Contract Administration
KEY POINTS:
Major components of good contract administration are discussed in this
module.
6.1
-------
POST AWARD CONFERENCE
Explain contract requirements and
administrative procedures
Promote efficient cost-effective
mobilization of the work
VIEWGRAPH #3
TITLE: Post Award Conference
KEY POINTS:
After award of a contract, the recipient should arrange a conference with
key contractor personnel to explain contract requirements and
administrative procedures. For construction contracts, this meeting
typically is known as a pre-construction conference. For engineering
services associated with remedial design, 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 recipient
and contractor personnel
- identifying the responsibilities and authorities of each party
- identifying interrelationships of contractors, consultants, the recipient,
the municipality, EPA, the U.S. Army Corps of Engineers (COE), and
other involved parties.
63
-------
COST MONITORING
Track expenditures against progress
Review contractor's progress
- approaching contract ceiling?
- potential cost overruns/underruns?
VIEWGRAPH #4
TITLE: Cost Monitoring
KEY POINTS:
Recipient cost monitoring of a contractor includes tracking expenditures
against technical progress.
When reviewing progress, the recipient should check whether the
contractor is approaching the contract ceiling, or whether there are
potential cost overruns or underruns.
Contractor progress reports would help the recipient in preparing reports
which EPA requires.
6.4
-------
TECHNICAL PERFORMANCE MONITORING
Become familiar with the contract
Organize project files
Monitor contractor performance
- review contractor's progress reports
- verify contents of progress reports
- inspect contractor deliverables
VIEWGRAPH #5
TITLE: Technical Performance Monitoring
KEY POINTS:
* When monitoring technical performance of a contractor, the recipient
should first become familiar with the contract and have organized project
files.
* In addition the recipient should review progress reports submitted by the
contractor, verify the contents of these progress reports, and inspect
contractor deliverables.
* These technical reports, as well as the Project Officer's Evaluation of
Contractor Performance (EPA Form 1900-27), should help the recipient in
preparing technical reports required by EPA.
6.5
-------
PROJECT OFFICER'S EVALUATION OF CONTRACTOR PERFORMANCE
(Read instructions on reverse before completing form)
1. FROM
2. TO
3. FORWARD (ortgtntl onty) TO:
Qualfty Awuranc* Section (PM-214)
Washington, DC 20460
4. CONTRACT NO.
6. ACTIVITY
6. CONTRACTOR'S NAME AND ADDRESS
7. PROJECT OFFICER'S NAME
8. TECHNICAL PROGRAM
9. BASIC CONTRACT COST
10. FINAL CONTRACT COST
11. CONTRACTOR PROJECT OFFICER'S NAME
12. PROJECT TTTLE
13. EVALUATED CONTRACTOR'S TECHNICAL ADHERENCE TO SCOPE OF WORK AND COMMITMENT OF PERSONNEL (Ctrcto on*
of tho following ond grto /wr»r/v» of rotingj E VQ A P U
14 EVALUATE CONTRACTOR'S TECHNICAL PERFORMANCE AND TECHNICAL APPROACH TO THE PROJECT (Circlo o/* of tho following
give narratn* of rating) E VQ A P U
S. EVALUATE CONTRACTOR'S SUBMISSION/DELIVERY OF PROGRESS REPORT. FINANCIAL REPORT. FINAL REPORT, EQUIPMENT (Ctrch
on* of the following and give narrative of rating) E VQ A P U
1 6. EVALUATE CONTRACTOR'S DELIVERED END PRODUCT
C VQ A P U
£
-------
INSTRUCTIONS
Prepare in duplicate and distribute as follows:
Original to be forwarded to Headquarters, Quality Assurance Section (PM-214), Washington, DC 20460.
Copy to be forwarded to Contract Administrator for contract file.
The following guidelines are to be used by the Project Officer responsible for the project in the preparation of the form z
the completion of the technical phase and/or acceptance of the final end product of the contract. The information must D<
accurate, as it will provide other program staff personnel or anyone else in the agency an orderly and uniform method"o
determining and recording the effectiveness of contractors in meeting their contractual commitments for futun
consideration in contract awards. The information will be filed in the contract file, and with the contractor's bidden
application file. The Project Officer's technical rating of the contractor and the contracting officer's business rating will b<
entered in the contractor performance evaluation system maintained by the Quality Assurance Section. All items hav<
been numbered to identify specific instructions as they pertain to individual items.
Rate Contractor in areas listed in items 13, 14, 15, 16, and 21 by circling one of the following on the form:
E (Excellent); VG (Very Good); A (Average); P (Poor); or U (Unsatisfactory)
*
Provide a detailed narrative of background material to support the rating. Attach additional sheets, if necessary.
FOLLOWING ITEMS TO BE FILLED IN BY THE CONTRACT ADMINISTRATOR
RESPONSIBLE FOR THE CONTRACT.
ITEM(S)
1 thru 4 Self-explanatory
5 Activity responsible for the project such as Washington, DC, RTP, Cincinnati, Region No. or Laboratory
6 and 7 Self-explanatory
8 Name of Section or Division ^within the Program responsible for the project,
»
9 and 10 Self-explanatory.
11 Self-explanatory.
12 Self-explanatory.
FOLLOWING ITEMS TO BE FILLED IN BY COGNIZANT PROJECT OFFICER
13 Has contractor fulfilled the requirements of the scope of work as specified in the contract? Did th<
Contractor adhere to his proposal, including his proposed commitment of personnel?
14 Indicate degree of creative contribution (level of technology) made by the contractor in response to thei
understanding of EPA's mission. If engaged in study contract or consulting contract, contractor
understanding of Federal Laws affecting the work (e.g., for a consultant on impact statements, under
standing of NEPA and all related guidelines and significant court decisions).
15 Did the contractor submit the report or equipment as per contract schedule? If not give reason.
16 Is the report or equipment delivered of high value and/or good Quality? Did the report require man
corrections, and did the contractor balk at making the corrections without additional cost?
17 Information desired is: give number of overruns and reasons for this (do not consider scope chang
where contractor had to submit a proposal for the additional work); ratio of additional funding unde
limitation of cost provision to original estimated costs. Was underrun achieved by reducing the scope c
work or through the development of new methods?
EPA Form 19OO-27.(R*v. 4-S4) ft
6.5(b)
-------
EPA Project No.
Project Tide
Contract No.
Contractor
SAMPLE MONTHLY PROGRESS REPORT
Report Date
Project Phase
(Contract
RI/FS
Bid
Services Offered
Reporting Period
CASH FLOW
From:
A. Original Contract Amount $
B. Approved Change Orders $
C. Current Total
$
D. Cumulative Payments to Date $
E. Percent of Current Amount
Paid
F. Estimate of Percent Work
Complete
Design Constructability/Biddability
Construction __ O&M _______
(OTHER)
To:
A. Original Contract Duration
days
B. Original Contract Completion
Date
C. Approved Time Extensions
days
D. Approved Contract Duration
days
E. Approved Contract Completion
Date _____
F. Duration to Date
days
G. Percent of Time Expended
(Explain Variance Between E & F) Below)
FINANCIAL IMPACTS
(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
6.5 (c)
-------
PROCUREMENT REPORTS
Report for the Department of Labor
Minority and women's business
enterprises
VIEWGRAPH #6
TITLE: Procurement Reports
KEY POINTS:
The recipient must notify the Department of Labor (DOL) Regional Office
of Compliance, in writing, of each construction contract which has or is
expected to have an aggregate value of over $10,000 within a 12-month
period. The report must include the following:
- construction contractor's name, address, telephone number, and
employee identification number
- award amount
- estimated start and completion dates
- project number, name and site location.
The recipient must notify the DOL Office of Compliance within 10
calendar days after the award of each such construction contract The
recipient must also submit a copy of the report to the EPA Project Officer.
(40 CFR 35.6665 (a))
6.6
-------
VIEWGRAPH #6 (cont.)
TITLE: Procurement Reports
KEY POINTS:
The recipient must report on its use of MBE and WBE firms by
submitting a completed Minority and Women's Business Utilization
Report (SF-334) to the Award Official. This report must be submitted
within 30 days after the end of each Federal fiscal quarter, regardless of
whether the recipient awards a contract during that quarter. Reporting
commences with the recipient's award of its first contract and continues
until they and their contractors have awarded their last contract for the
activities or tasks identified in the cooperative agreement. (40 CFR
35.6665 (c))
The recipient must also report on its efforts to encourage MBE
participation. These reports are required in the last report the recipient
submits for the Federal fiscal year (generally the 4th quarter report). EPA
consolidates these reports and submits an annual report to Congress.
(CERCLA 105(f))
6.7
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON D C 20460
« 07
r.i L I
w t
MEMORANDUM
SUBJECT: Reporting of Minority Business Under Superfund Activities
* /
£r^f./f'/-'V:;
FROM: John M. Ropes, Director
Office of Small and
Business Utilization A-i
II
Henry L. Longest, II, Dl^ctor Afj^M
Office of Emergency and Remedial Respons/V*H^5As)
TO: Waste Management Division Directors
Regions I - X
As you are probably aware, Section 105(f) of P.L. 99-499 requires
annual reporting vlth respect to the utilization of minority contractors.
This requirement states that " ... In awarding contracts under this Act,
the President shall consider the availabiity 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."
This requires the Agency to report on an annual basis not only the
awards executed during the calendar year, but also what efforts have been
nade by the Agency to eacourage or promote minority business participation.
To comply with this statutory requirement it will be necessary for all
State agencies receiving Superfund monies to complete EPA Fora 6005*1 Recipient's
Report. These reports mist be filed on a quarterly basis through your Regional
MBE/WBE Coordinator for consolidation and subsequent transmittal to Headquarters,
Office of Small and Disadvantaged Business Utilization (OSDBU)-(A-149C). It
should be noted that the Superfund reporting is on a calendar year basis and
not on a Federal fiscal year. Because of this, special instructions mist be
provided to assure that the States fully recognize that the standard reporting
system currently in place must continue in force, including any Superfund
activity so that we may report such data to the D.S. Department of Coaaerce.
Additionally, a second report on Superfund activities is required on a calendar
year basis, i.e., January 1 to December 31 for our report to Congress.
6.7(a)
-------
- 2 -
A second part of the annual report requires the Agency to report on the
efforts made to encourage the participation of minority firms in the Superfund
program. Consequently you must, in narrative fora, describe the actions you
have taken such as seminars or procurement conferences, counseling and outreach
efforts etc., to encourage the participation and utilization of minority firms.
In closing we would want to emphasize that this constitutes an integral
part of the Agency's Superfund report to Congress as required by CERCLA Section
301(h)(l). As such, it vlll require the commitment of everyone concerned and a
dedication to the Agency's minority business "fair share* policy.
cc: HBE Coordinators .
6.7(b)
-------
OMB NQS. 9999*0001 AND 0640*0017
EXPIRES: APRIL 30, 1990
MBE/WBE* UTILIZATION UNDER FEDERAL GRANTS, COOPERATIVE
AGREEMENTS, AND OTHER FEDERAL FINANCIAL ASSISTANCE
PART 1. (NEGATIVE REPORTS MAY BE REQUIRED)
19
18 REPORTING QUARTER (CheCK aooroonate oox)
st fOct-Oec.). Q 2nd (Jan -Mar.).
3rd (Aor -Jun.j.
*tn (Jui-Seo i
FEDERAL c-NANCiAL ASSISTANCE AGENCY
!U Agency. Sureau-Aammisienng O^ce. Aaaress)
3. REPORTING RECIPIENT (Name ana Aocress;
2A REPORTING CONTACT
PHONE.
3A. REPORTING CONTACT
PHONE.
4A FINANCIAL ASSISTANCE AGREEMENT ID NUMBER
FEDERAL FINANCIAL ASSISTANCE PROGRAM
4C TYPE OF FEDERAL ASSISTANCE AGREEMENT
GRANT Q] COOPERATIVE AGREEMENT
OTHER FEDERAL FINANCIAL ASSISTANCE
5A PERfOD WH£N PROCUREMENT UNDER THIS AWARD WILL
OCCUR
START DATE
END DATE
SB AMOUNT OF TOTAL PROJECT
DOLLARS PLANNED FOR
PROCUREMENT THIS FISCAL YEAR
5C. RECIPIENTS MBE/WBE GOALS (Percent of total procurement ooiiars (St>| tor eacni
MBE
WBE
5D MBE.V/8E PROCUREMENT ACCOMPLISHED THIS QUARTER
MBES
WBES
3£. NEGATIVE REPORT
SEE INSTRUCTIONS
6.
COMMENTS.
8
NAME Qf AUTHORIZED REPRESENTATIVE
TTTLE
SIGNATURE OF AUTHORIZED REPRESENTATIVE
DATE
* opt
I tM
of
fTANOA*0
6.7 (c)
-------
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6.7(d)
-------
INSTRUCTIONS
MBEWBE UTILIZATION UNDER FEDERAL GRANTS,
COOPERATIVE AGREEMENTS,
AND OTHER FEDERAL FINANCIAL ASSISTANCE
Standard Form 334
A. General Instructions:
MBEWBE utilization is based on Executive Orders
11625, 12138 and 12432 and OMB Circular A-102.
Standard Form 334. must be completed by recipients
of Federal grants, cooperative agreements, or other
Federal financial assistance valued at $500.000* or
more and which involve procurement of supplies.
equipment, construction or services to accomplish
Federal assistance programs.
Recipients are required to report to agency award
officials within one month following the end of each
Federal fiscal year quarter (i.e. January 31, Apnt 30,
July 31 and October 31) during which any procure-
ment in excess of $10.000 is actually executed un-
der this assistance agreement.
B. Definitions:
Procurement is the acquisition through order,
purchase, lease or barter of supplies, equipment,
construction or services needed to accomplish Fed-
eral assistance programs.
A minority business enterprise (MBE) is a business
concern that is (1) at least 51 percent owned by one
or more mtnonty individuals, or, in the case of a
publicly owned business, at least 51 percent of the
stock is owned by one or more minority individuals;
and (2) whose daily business operations are man-
aged and directed by one or more of the minonty
owners.
There i$ no standard definition of minonty individuals
used by all Federal financial assistance agencies.
however, recipients shall presume that minority in-
dividuals include Black Americans, Hispanic Ameri-
cans. Native Americans, Asian Pacific Amencans. or
other groups whose members are found to be dis-
advantaged by the Small Business Act or by the
Secretary of Commerce under section 5 of Execu-
tive Order 11625. The reporting contact at your
Federal financial assistance agency can provide ad-
ditional information.
no
thf
I* I
A woman business enterprise (W8E) is a business
concern that is. (1) at least 51 percent owned Dy
one or more women, or. in the case of a puoncty
owned business, at least 51 percent of the stock is
owned by one or more women; anof. (2) whose caily
business operations are managed and directed Dy
one or more of the women owners.
Business firms which are 51 percent owned by mi-
norities or women, but are in fact managed and
operated by non-minority individuals do not qualify
for meeting MBE-WBE procurement goals.
The following affirmative steps for utilizing MBEs and
WBEs are suggested:
1 .
2.
3.
4.
5.
6.
Inclusion of MBEs/WBEs on solicitation
lists.
Assure MBEs/WBEs are solicited once they
are identified.
Where feasible, divide total requirements
into smaller tasks to permit maximum
MBE/WBE participation.
Where feasible, establish delivery sched-
ules which will encourage MBEWBE par-
ticipation.
Encourage use of the services of the U.S.
Department of Commerce's Minority Busi-
ness Development Agency (MBDA) and the
U.S. Small Business Administration to iden-
tify MBEs/WBEs.
Require that each party to a subgrant, sub-
agreement or contract award take the
affirmative steps outlined here.
C. Instructions for Part I:
1 .
2.
ot
*«'
IS
o' f*G vn 91 tin cw
Complete Federal fiscal year and check ap-
plicable reporting quarter. (Federal fiscal
year runs from October 1 through Septem-
ber 30.)
Identify the Federal financial assistance de-
partment or agency including the bureau.
office or other subactwity which administers
vour financial assistance agreement.
6.7(e)
-------
3. identify the agency, state, authority, univer-
sity or other organization which is the re-
cipient of the Federal financial assistance
and the person* to contact concerning this
report.
4a. Assistance agreement number assigned by
reaerai financial assistance agency.
4b if aooroonate. identify specific deoartment
or agency Federal financial assistance pro-
gram unaer which this project is awarded.
4c. Check type of Federal assistance.
5a. Period during which contracts and other
purchases under this award will actually be
executed.
Sb. Includes procurement using Federal funds
plus recipient matching funds and funas
from other sources.
5c. Portion of total procurement dollars recipi-
ent plans to spend with MBEs or WBEs
this fiscal year. With the concurrence of the
Federal financial assistance agency* a fair
share goal shall be determined by each
recipient.
5d. Dollar amount of all MBEWBE contracts
awarded under this assistance agreement
this quarter.
5e. Check only if one or more procurements in
excess of $10,000 were executed this re-
porting quarter but no MBE/WBE procure-
ments occurred. Sign and date form and
return it to Federal financial assistance
agency.
6.
7.
8.
Additional comments or explanations
Please refer to specific item numoeris
appropriate.
Name and title of official administrator cr
designated reporting official.
Signature and month, day. year recor
mined.
D. Instructions for Part II:
For each MBEWBE procurement over SiO.COO
made under this assistance agreement during the
reporting quarter, provide the following information
(Recipients may also report on individual MBEWBE
procurements of less than $10,000 if they want
these credited toward their MBEWBE goals, how-
ever, reporting on smaller procurements is not re-
quired.)
1. Check whether this is a first tier procure-
ment made directly by Federal financial
assistance recipient or other second tier
procurement made by recipient's subgran-
tee or pnme contractor. Include all qualify-
ing second tier purchases executed this
quarter regardless of when the first tier
procurement occurred.
2. Check MBE or WBE.
3. Dollar value of procurement.
4. Date of award, shown as month, day, year.
5. Using codes at the bottom of the form.
identify type of product or service acquired
through this procurement (eg., enter 1 if
agriculture, 2 if mining, etc.)*
6. Name and address of MBEWBE firm.
6.7(f)
-------
OBJECTIVES OF THIS MODULE
To describe recipient monitoring of contractors
To identify the procurement reports recipients
are required to submit
VIEWGRAPH #2
TITLE: Objectives of This Module
KEY POINTS:
The main purpose of this module is to identify and explain the elements of
good contract administration. These include describing recipient
monitoring of contractors; and identifying the procurement reports
recipients are required to submit.
In addition, this module will describe reasons why a post award
conference may be necessary.
6.2
-------
CHANGE ORDERS
AND CLAIMS
VIEWGRAPH #1
TITLE: Change Orders and Claims
KEY POINTS:
* Contracts must be administered carefully to minimize unnecessary change
orders and avoid claims. Changes orders and claims are most likely to
occur as part of construction, but may happen at any phase of remedial
response.
7.1
-------
OBJECTIVE OF THIS MODULE
To describe the procedures for handling change
orders and claims
VIEWGRAPH #2
TITLE: Objective of This Module
KEY POINTS:
The main purpose of this module is to describe the procedures for
handling change orders and claims.
7.2
-------
CONDITIONS WARRANTING A CHANGE ORDER
Differing site
conditions
Errors and omissions
in plans and
specifications
Modifications of
regulatory
requirements
Design changes
DiwtoXXXXX
n Adjustment
oftOOOi*
Emergency conditions
Overruns/underruns in
quantities
Factors affecting time
of completion
Changes in contract
administration
procedures
VIEWGRAPH #3
TITLE: Conditions Warranting a Change Order
KEY POINTS:
A change order is a written order issued by the recipient to its contractor
authorizing an addition to, deletion from, or revision to the terms of the
contract. A change order is issued after execution of the contract to
modify, within the scope of the project, the original contract terms and
conditions. Change orders may occur during any phase of remedial
responses, but are most likely to arise during construction, when there is a
greater chance of encountering unforeseen site conditions, changes in
estimated quantities, and other potential project delays.
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 contract
- 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 contract.
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.
7.3
-------
VIEWGRAPH #3 (cont.)
TITLE: Conditions Warranting a Change Order
KEY POINTS:
Changes instituted by modifications or regulatory requirements, such as
- changes in requirements for protecting historical or archaeological
objects
- revisions to building codes
- revisions to zoning and land use plans
- 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. (These usually
originate as proposals volunteered by the construction contractor,
recommended by the engineer, or requested by the recipient.)
Factors affecting time of completion, such as directed acceleration.
Emergency conditions, such as acts of God or civil disturbance.
7.4
-------
CHANGE ORDER LIMITATIONS
Construction
- specifications
- time, method or manner of performance
- recipient furnished facilities, equipment,
materials, services, or site
- acceleration of work
Services
- services or work (same as construction)
Supplies
- place of delivery
- method of shipment
- drawings, designs or specifications
VIEWGRAPH #4
TITLE: Change Order Limitations
KEY POINTS:
Limitations for change orders for construction include:
- specifications (including drawings and designs)
- time, method or manner of performance
- recipient-furnished facilities, equipment, materials, services, or site
- acceleration of work
- any other order (including direction, instruction, interpretation or
determination) from the recipient which causes any change, provided
the contractor gives the recipient written notice stating the date,
circumstances and source of the order and that the contractor regards
the order as a change order.
Limitations for change orders for services include services or work (same
as construction).
Limitations for change orders for supplies include:
- drawings, designs or specifications where supplies to be furnished are
specifically manufactured for recipient
- place of delivery
- method of shipment or packing.
7.5
-------
EVALUATING CHANGE ORDER REQUESTS
Determine whether a change order is
warranted
- recipient error/omission
- cardinal change
Recipient responsibilities
Contractor responsibilities
CHAN
ORDER
VIEWGRAPH #5
TITLE: Evaluating Change Order Requests
KEY POINTS:
In reviewing a contractor's request for a change order, the recipient must
evaluate the contract documents and the contractor's compliance with the
contract requirements. If the request for a change order was the result of
errors and/or omissions in the plans and specifications, the recipient 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.
In determining whether to approve a major change to a contract, recipients
must first ascertain whether it is a cardinal change. A "cardinal change" is
for work outside the scope of the contract. Such a change may be unfair
to other potential contractors because they have no opportunity to compete
for the additional work. This may be a violation of EPA regulations
requiring competition on all procurements.
7.6
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VIEWGRAPH #5 (cont.)
TITLE: Evaluating Change Order Requests
KEY POINTS:
Ultimate responsibility for administering change orders rests with the
recipient. Specifically the recipient is responsible for:
- determining whether a contract change order is warranted, based on
the terms of the existing contract and a review of the circumstances
responsible for the alleged change
- negotiating a fair and reasonable price for each required contract
change
- maintaining accurate and complete cost records for the change,
including records of negotiation
- adequately documenting a description of the agreed change and reason
for this change
- maintaining current and accurate fiscal projections of contract and
project completion costs
- executing contract 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
- assessing the impact of change orders on progress toward project
completion and acting to mitigate resulting project delays.
To expedite recipient 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 contract documents and enter into meaningful negotiations
on a necessary contract change
- furnish and certify the accuracy and completeness of the cost or price
data submitted.
7.7
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-------
EQUITABLE ADJUSTMENTS
Four basic principles should be followed for equitable
adjustments:
Both parties should be made
whole as a result of the
adjustment
Neither party should gain an
advantage or suffer a loss
Profitable contracts should remain
equally profitable
CONTRACTOR
Existing losses should not be
borne by the recipient
VIEWGRAPH #6
TITLE: Equitable Adjustments
KEY POINTS:
A contractor must submit a change order proposal within 30 days.
However, this period may be extended by the recipient.
The claim for equitable adjustment must be made before final payment.
Four basic principles should be followed when determining the
adjustment:
- both parties should be made whole as a result of the adjustment
- neither party should gain an advantage or suffer a loss
- profitable contracts should remain equally profitable
- existing losses should not be borne by the recipient.
7.8
-------
CHANGE ORDER MANAGEMENT
UNDER SUPERFUND
Technical and administrative
analysis
Project contingency fund
Preparation of the change order
VIEWGRAPH #7
TITLE: Change Order Management Under Superfund
KEY POINTS:
To ensure that adequate 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.
The recipient must conduct a cost or price analysis, before any change
order may be approved, Superfund program procedures also require the
recipient to perform a technical and administrative analysis to determine:
- 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.
The recipient should forward its analysis to EPA with its quarterly
progress 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 recipient's
performance in managing the contract to determine the allowability of
costs under the cooperative agreement.
7.9
-------
VIEWGRAPH #7 (cont.)
TITLE: Change Order Management Under Superfund
KEY POINTS:
After evaluating the change order request and arranging for payment for
the extra work, the recipient must prepare and issue a change order. To do
so, the recipient 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 contract price
- alteration of the contract schedule, if applicable
- effect of the change on other work elements
- recipient and contractor approval of the change order.
If required, the change order also should provide for EPA review and
comment.
7.10
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CAUSES OF CLAIMS
(EXAMPLES)
Defects in plans, specifications, or
statements of work
Differing site conditions
Failure to address contractor grievances
promptly and fairly
Failure to mitigate effects of delay
Recipient decision to stop or suspend
work
Failure to make payment according to the
terms of the contract
VIEWGRAPH #8
TITLE: Causes of Claims (Examples)
KEY POINTS:
Claims consist of demands or written assertions by a contractor seeking,
as a matter of right, changes to the contract (e.g., additional time and/or
costs) which the recipient has originally rejected through the change order
process. Claims may arise at any phase of remedial response. A voucher,
invoice, or other routine request 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.
Recipients may encounter claims in contracts 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, or inadequate statements of work
- differing site conditions
- inadequate construction inspection and management
- failure to address contractor grievances promptly and fairly, requests
for time extensions or other problems
7.11
-------
VIEWGRAPH #8 (cont.)
TITLE: Causes of Claims (Examples)
KEY POINTS:
failure to enforce contract 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 recipient 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.
7.L>
-------
TYPES OF CLAIMS
Constructive changes
Defective specifications
Impossibility of performance
Acceleration
Delay
VIEWGRAPH #9
TITLE: Types of Claims
KEY POINTS:
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 recipient, 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 recipient does not recognize or authorize a change order. A contractor
can assert that a constructive change has been directed if work performed
according to the contract terms is not accepted by the recipient; 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 a
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 contract 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.
7.13
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VIEWGRAPH #9 (cont.)
TITLE: Types of Claims
KEY POINTS:
Claims may result from an impossibility of performance if restrictive
contract 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 recipients require contract 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 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 contract by a period of
time equivalent to the delay. Failure to recognize and accommodate
effects on the contractor's process may result in claims.
7.14
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PREVENTION OF CLAIMS
Change order language in contract
document
Effective project management practices
including:
- realistic and adequate project schedule
- full and complete documentation
- timely responses to contractor requests
- accurate and complete plans and
specifications
- open and effective communication
VIEWGRAPH #10
TITLE: Prevention of Claims
KEY POINTS:
It is critical that all contract documents include precise language on
requirements for administering changes. 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. Recipients
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 contract;
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 extra
work.
To avoid significant cost and schedule increases, EPA strongly encourages
the recipient to exercise effective project management practices that wilt
reduce the occurrence of claims. The recipient must ensure that such
practices are employed throughout the project cycle. 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 schedule provisions; and requiring periodic updates to show
the adjusted project progress and completion date
7.15
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VIEWGRAPH #10 (cont.)
TITLE: Prevention of Claims
KEY POINTS:
- 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 recipient costs incurred in implementing these practices.
7.16
-------
CLAIMS RESOLUTION
EPA participation in administrative
costs associated with claims
Claims negotiation
Settlement of claims
RECIPIENT
CONTRACTOR
VIEWGRAPH#11
TITLE: Claims Resolution
KEY POINTS:
The recipient may request EPA to amend its cooperative agreement to
fund a portion of the legal, technical, and administrative costs that the
recipient incurs in analyzing the merits of claims and the costs associated
with negotiating settlements of, or defending itself against, these claims.
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 recipient; and the Award
Official must determine that there is significant Federal interest in the
issues of the claim.
If EPA decides to fund the costs of claims negotiation or defense, it will
execute a formal amendment to the cooperative agreement Claims
negotiation or defense may commence upon execution of the amendment.
If the recipient 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 recipient's application for
the costs of claims negotiation or defense; such a ruling would make the
recipient accountable for all such costs.
7.17
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VIEWGRAPH #11 (cont.)
TITLE: Claims Resolution
KEY POINTS:
The following suggested actions will aid the recipient 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.
To secure EPA review, the recipient 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 statement of
work
- recipient 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 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.
7.18
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MODULE 7 - CHANGE ORDERS AND CLAIMS
Exercise 1, Sample Change Order
1. Discuss the changes requested in the sample and determine the type of change requested
(design, errors/omissions in specifications, etc.) and whether they are legitimate reasons
for a Change Order.
2. Would you consider any of the changes requested in the sample to be a "cardinal
change*1? If so, why?
3. Using the Sample Checklist for Change Order Approval, determine whether all required
information is provided in the sample Change Order.
4. What supporting documents would you, as the recipient, look for?
5. What issues associated with this Change Order request might require negotiation?
6. Assume that the change order request was denied. What action would you, as the
contractor, take and why?
Exercise 2 (optional)
1. What are some of the circumstances not covered by the sample that might warrant a Change
Order, and during what phase of remedial response are they most likely to occur?
2. What issues should be determined by technical and administrative analyses (conducted
prior to Change Order approval)?
3. What steps can the recipient take to prevent claims?
4. If a claim was submitted by a contractor, what involvement would EPA have, if any?
-------
Module 7, Attachment A
CHANGE ORDER
Date: January 12. 1989 Order No. _J.
Base Contract Date: June 17.1988
Name of Project: ABC Facility
Recipient: County Water District
Contractor: XYZ Construction Company
The following changes are hereby made to the Contract Documents:
A, On page 3, change the manufacturer of Item No. 6 (gauge controls) from Spartan
Controls to Smith Hayes, Inc.
B, Provide air stripping facility.
Justification:
A. The change in gauge control manufacturers was requested by the contractor to
increase their MBE participation.
B. An air stripping facility is required to treat vinyl chloride.
Original Contract Price $ 7.500.000.00
Current Contract Price adjusted by previous $ 7.500.000.00
change orders
The Contract Price due to this change order
will be (increased) (decreased) by:
A. $ 0.00
B. 500.000.00
Total Increase due to Change Order No. 1 $ 500,000.00
The new Contract Price, including this
Change Order is: $ 8.000.000.00
The contract time will be changed by 60 calendar days.
APPROVALS REQUIRED:
To be effective, this Change Order must be approved by the Recipient.
Requested by: Date: June 20.1989
(XYZ Construction)
Accepted by: Date:
(County Water District)
-------
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ASON FOR CHANGE
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I r
-------
PROCUREMENT REVIEW CHECKLIST
PART 1 - PROCUREMENT METHOD
Check the procurement method selected by
the recipient: Small purchase (§§35.6565 (a)
Sealed bids (complete Parts n & IV)
(§§35.6565 (b))
Competitive negotiation (complete Parts HI & IV)
(§§35.6565 (c))
Noncompetitive negotiation (complete Parts HI & IV)
(§§35.6565 (d)
Optional A/E selection procedures (complete Parts ffl
& IV) (§§35.6565 (c)(5))
PART H - SEALED BIDS (check ves or no)
YES NO
1. Can the procurement be awarded on a fixed price basis to the lowest
responsive responsible bidder based principally on price?
2. Is (are) the specification(s)/purchase description(s) clear, unambiguous,
accurate and complete?
3. Can recipient identify at least two known sources of supply which are willing
and able to compete for the proposed procurement?
4. Is there adequate time for the recipient to announce, solicit and evaluate bids?
5. Did the recipient allow 30 days for public notice before the bids were
released?
6. Was the notice published:
a. in the newspapers of general circulation?
b. in trade and professional journals?
c. in other publications of general circulation?
7. Did the recipient document its compliance with the affirmative steps to solicit:
a. small businesses?
b. minority businesses?
c. women's businesses?
d. labor surplus area businesses?
8. Does the recipient's bid solicitation document(s) (IFB) include the following:
a. a complete statement of the work to be performed, including any
design drawings and specifications?
b. terms and conditions of the contract to be awarded, including:
payment?
delivery schedules?
point(s) of delivery?
acceptance criteria?
1
-------
PROCUREMENT REVIEW CHECKLIST (cont.)
PART II - SEALED BIDS cont. (check yes or no)
YES NO
c. a clear explanation of the recipient's
method of bidding?
method of evaluating bid prices?
method and basis for awarding the contract?
d. all evaluation requirements the recipient will use to evaluate bidders?
e. identification of which Department of Labor, Davis-Bacon wage
determination will be used, if applicable?
f. the exact date, time and place bids shall be submitted?
g. copies of 40 CFR 33.1030 (model clauses), and if appropriate, EPA
5720-4 "Labor Standards Provisions11?
9. Did the requirements in the IFB unduly restrict competition, e.g., use
unnecessary experience or bonding requirements, or use in-State or local
bidders preference?
10. Did the recipient publicly open the bids received at the time and place
identified in the IFB?
11. Were fewer than 2 bids received?
12. Was a price analysis performed, if fewer than 2 bidders were received?
a. Did the price analysis compare prices among bids received in
response to the IFB?
b. Did the price analysis compare the bid price(s) to prior quotations
and/or prior contract prices for the same or similar end items?
c. Did the recipient use rough yardsticks (e.g., price per pound, per
gallon, per horsepower, etc.) to highlight significant inconsistencies
that wairant additional pricing inquiry?
d. Did the recipient compare the bid price(s) with competitively
published price list(s), published market prices or commodity similar
indexes, and discount or rebate arrangements?
e. Did the recipient compare the bid price(s) with its own independent
cost or price estimate?
13. Was only one bid received?
a. Was a price analysis performed on this bid, including an analysis of
profit?
b. Is the profit considered reasonable?
-------
PROCUREMENT REVIEW CHECKLIST (cont)
PART H - SEALED BIDS cont. (check yes or no)
YES NO
14. Has the recipient determined, in writing, the proposed awardee's bid to be:
a. responsive?
b. responsible?
c. reasonable in price?
15. Is the recipient proposing to award to the lowest responsive, responsible
bidder?
16. Is the award decision documented in writing?
-------
PROCUREMENT REVIEW CHECKLIST
PART III - Competitive and Non-Competitive Negotiation (check Yes, No, or N/A1)
YES NO N/A
. Has the recipient determined that sealed bidding is not appropriate for this
procurement?
2. Is the proposed procurement for construction?
a. If yes, did the recipient get the Award Official's prior written
approval to use other than sealed bidding?
3. Is the proposed procurement non-competitive?
a. If yes, did the recipient adequately document the reasons for the
procurement method?
4. Check the type of contract proposed by the recipient:
a. fixed price - lump sum
b. fixed price - unit prices
c. cost reimbursement - no fee
d. cost-plus-fixed fee
e. time and materials
f. labor hour
g. indefinite/delivery order
h. cost-plus-percentage-of-cost (prohibited)
i. percentage-of-construction cost (prohibited).
5. Is this a cost reimbursement type contract?
a. If yes, has the recipient determined, in writing, the contractor's
accounting system to be adequate for the accumulation and allocation
of costs?
6. Did the recipient submit copies of:
a. public notices or announcements?
b. request for proposals (RFP's)?
c. its in-house estimate(s)?
d. justification(s) for using the negotiated procurement method?
e. summary(ies) of negotiations?
f. technical evaluation^)?
g. cost analysis(es)?
h. justification(s) for selection of type(s) of contract?
i. the proposed contract(s)?
7. Does the recipient's public notice or announcement sufficiently identify the
services or products to be procured?
8. Was the public notice or announcement:
a. published in a newspaper of general circulation?
b. published in appropriate trade or professional journals?
c. published at least 30 days before the RFP(s) was (were) issued?
9. Did the public notice or announcement:
d. specify the place(s) and date(s) for obtaining the RFP(s)?
e. specify how to obtain associated documents, Section 33.1030 (model
clauses), and a copy of EPA FORM 5720-4?
-------
PROCUREMENT REVIEW CHECKLIST (cont.)
PART III - Competitive and Non-Competitive Negotiation com, (check Yes, No, or N/A)
YES NO
10. Is the procurement for A/E services?
a. Has the recipient used the optional procedures to select and negotiate
the contract?
Did the recipient use a pre-qualified list to select the best
technically qualified A/E?
Is the recipient's pre-qualified list updated at least every six
months?
Did the recipient give adequate public notice of its pre-
qualification procedures?
Did the recipient review and act on each request for
prequalification made more than 30 days before the
closing date for receipt of proposals or the
opening date for sealed bids?
b. Did the recipient satisfy the requirement of 40 CFR 35.6565 (c)(5)
(optional selection procedures?
11. Do you and/or the technical engineering staff consider the RFP to
unnecessarily restrict competition?
12. Do you and/or the technical engineering staff consider the statement/scope of
work (specifications) to be clear and accurate?
13. Do you and/or the technical staff consider the recipient's in-house estimate(s)
to be realistic and reasonable?
14. Did the recipient include in its RFP(s) the following;
a. technical evaluation criteria?
b. relative weight of each criterion?
c. relative importance of cost or price vis a vis technical?
d. any special proposal instructions or award evaluation criteria?
15. Has the recipient complied with the affirmative steps (see 40 CFR 31.36
(e)(2)) to solicit proposals from the following:
a. small businesses?
b. minority businesses?
c. women's businesses?
d. labor surplus businesses?
16. Using only the criteria listed in the RFP, did the recipient perform;
a. technical evaluations of the proposals?
b. cost analyses of all proposed contracts over $25,000?
17. Did the recipient submit a completed EPA Form 5700-41 (Cost or Price
Summary) or another form providing equivalent information?
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PROCUREMENT REVIEW CHECKLIST (cont)
PART El - Competitive and Non-Competitive Negotiation cont. (check Yes, No, or N/A
YES
NO
18 Is the proposed award being made based on initial evaluation of proposal(s)
without any discussion?
19. Did the RFP state that the award may be made on initial offers alone, without
any discussion?
20, Was a competitive range determined by the recipient?
a. Is the competitive range determination documented in writing?
b. Does the documentation adequately support the determination?
c. Were meaningful discussions (negotiations) conducted with all
offerers determined to be within the competitive range?
21. Are all negotiations documented in writing?
a. Does the documentation describe all issues (including technical, cost
or price, and business) negotiated?
b. Does the documentation describe the resolution of all issues
negotiated?
c. Did the recipient use good procurement, business and technical
judgement in resolving the negotiation issues?
22. Is the proposed award justification documented in writing?
23. Is that written documentation adequate?
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PROCUREMENT REVIEW CHECKLIST
PART IV - Award (check Yes, No, or N/A)
YES NO N/A
1. Does the contract document contain the required conflict of interest
provisions?
2. Does the recipient certify that the proposed awardee is not on the list of
suspended or debarred contractors issued under 40 CFR Part 32?
a. If no, has the recipient obtained the approval to award the contract
from the Director, Grants Division, EPA Headquarters?
3. Does the recipient certify that none of the work on contracts exceeding
$25,000 will be performed at a facility on EPA!s list of Violating Facilities
(40 CFR Part 15)?
4. Has the recipient received from the contractor (for construction contracts over
$25,000):
a. bid guarantee(s) in the amount of 5% of the bid price?
b. performance bond(s) equal to 100% of the contract price?
c. payment bond(s) equal to 100% of the contract price?
5. Does the recipient have a procedure to notify the award official within 10
calendar days after the award of each construction contract which has or is
expected to have an aggregate value over $25,000 within a 12 month period?
6. Does the procedure provide the following information:
a. name, address, telephone number, and employer ID number of the
construction contractor?
b. amount of the award?
c. estimated starting and completion dates?
d. project number, name and site location of the project?
7. Does the recipient have a procedure to send copies of the bid tabulation or
abstract of offerers to the appropriate EPA Office of Inspector General?
8. Has the recipient included the following (or equivalent) clauses into the
contract document (see 40 CFR 33.1030):
a. supersession?
b. privity of contract?
c. changes?
paragraph (a) applies to contracts for contractors
paragraph (b) applies to contracts for services
paragraph (c) applies to contracts for supplies
d. differing site conditions (construction contracts only)?
e. suspension of work?
f. termination?
g- *
h. price reduction for defective cost or pricing data (for negotiated
contracts or change orders exceeding $100,000)?
i. audit, access to records?
j. covenant against contingent fees?
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PROCUREMENT REVIEW CHECKLIST (cont.)
PART IV - Award cont. (check Yes, No, or N/A)
YES NO
8. (continued)
k, gratuities?
1. responsibility of the contractor?
clause 13 (a) if contract is for services
clause 13 (b) if contract is for construction
m. final payment?
9. Has the recipient included in the contract the appropriate clauses in §§35.6595
(b)?
8
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PROCUREMENT REVIEW CHECKLIST
PART V - Monitoring; the Contract (check Yes, No, or N/A)
YES NO N/A
1. Has the Award Official sent the information on contracts, required in Part IV.
Item #6 to the appropriate Department of Labor office?
2. Have the bid tabs, required in Part IV. #6 (5). been sent to the appropriate
EPA Inspector General's office?
3. Was this award made to a minority or women's business enterprise?
4. Has the recipient reported this award on an Standard Form 334, "MBE/WBE
Utilization Under Federal Grants, Cooperative Agreements, and Other Federal
Financial Assistance?"
5. Have there been any change orders? If yes:
a. Did the recipient perform a cost analysis of each proposed change?
b. Is (are) the proposed change(s) necessary?
c. Is (are) the cost(s) of the proposed change(s) reasonable and realistic?
d. Did the recipient use EPA Form 5700-41 or an equivalent form to
show the proposed cost(s)?
6. Are financial reports:
a. submitted when required?
b. in accordance with the contract requirements?
7. Are there any:
a. overruns?
If yes, why and how resolved?
b. undemms?
If yes, why and how resolved?
8. Are there contract ceilings?
9. Are progress reports submitted when required?
a. If yes, in accordance with contract requirements?
b. If yes, with adequacy/completeness of information?
10. Is technical performance:
a. acceptable?
b. timely?
c. need remedial action?
d. have any unresolved problems?
11. Are deliverables:
a. acceptable?
b. timely?
12. Is the justification/approval for property use in a file?
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PROCUREMENT REVIEW CHECKLIST (cont.)
PART V - Monitorinethe Contract cont. (check Yes, No, or N/A)
YES NO
13. Has prior approval of the Award Official, if required, been granted?
14. Is there a copy of the contract in a file?
15. Is the cost/price reasonableness determination in a file?
16. Are change orders/modifications:
a. appropriate?
b. within the scope of the contract?
17. Has the reasonableness of the change order/modification been determined?
18. Is there sufficient documentation backup for clear audit trail?
10
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Thursday
March 8, 1990
Part II
Environmental
*- " *
Protection Agency
. . _ V. . .
40 CFR Part 300
National OR and Hazardous Substances
Pollution Contingency PJan; Final Rifle
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h
T
U.S.C. 1321(c)(2). In Executive Order
(E.G.) 12580 (52 FR 2923, January 29.
1987], the President delegated to the
Environmental Protection Agency (EPA)
the responsibility for the amendment of
the NCP. Amendments to the NCP are
coordinated with members of the
National Response Team (NRT) prior to
publication for notice and comment.
This includes coordination with the
Federal Emergency Management
Agency and the Nuclear Regulatory
Commission in order to avoid
inconsistent or duplicative requirements
in the emergency planning
responsibilities of those agencies. The
NCP is applicable to response actions
taken pursuant to the authorities under
CERCLA and section 311 of the CWA.
§300.3 Scope.
(a) The NCP applies to and is in effect
for:
(1) Discharges of oil into or upon the
navigable waters of the United States
and adjoining shorelines, the waters of
the contiguous zone, and the high seas
beyond the contiguous zone in
connection with activities under the
Outer Continental Shelf Lands Act or
the Deepwater Port Act of 1974, or
which may affect natural resources
belonging to, appertaining to, or under
the exclusive management authority of
the United States (including resources
under the Magnuson Fishery
Conservation and Management Act).
(See sections 311(b)(l) and 502(7) of the
CWA.)
(2) Releases into the environment of
hazardous substances, and pollutants or
contaminants which may present an
imminent and substantial danger to
public health or welfare.
(b) The NCP provides for efficient,
coordinated, and effective response to
discharges of oil and releases of
hazardous substances, pollutants, and
contaminants in accordance with the
authorities of CERCLA and the CWA. It
provides for.
(1) The national response organization
that may 0e activated in response
actions. It specifies responsibilities
among the federal, state, and local
governments and describes resources
that are available for response.
(2) The establishment of requirements
for federal regional and on-scene
coordinator (OSC) contingency plans. It
also summarizes state and local
emergency planning requirements under
SARA Title III.
(3) Procedures for undertaking
removal actions pursuant lo section 311
of the CWA.
(4) Procedures for undertaking
response actions pursuant to CERCLA.
(5) Procedures for involving state
governments in the initiation,
development, selection, and
implementation of response actions.
(6) Designation of federal trustees for
natural resources for purposes of
CERCLA and the CWA.
(7) Procedures for the participation of
other persons in response actions.
(8) Procedures for compiling and
making available an administrative
record for response actions.
(9) National procedures for the use of
dispersants and other chemicals in
removals under the CWA and response
actions under CERCLA.
(c) In implementing the NCP.
consideration shall be given to
international assistance plans and
agreements, security regulations and
responsibilities based on international
agreements, federal statutes, and
executive orders. Actions taken
pursuant to the NCP shall conform to the
provisions of international joint
contingency plans, where they are
applicable. The Department of State
shall be consulted, as appropriate, prior
to taking any action which may affect its
activities.
§300.4 Abbreviations.
(a) Department and Agency Title
Abbreviations:
ATSDRAgency for Toxic Substances
and Disease Registry
DOCDepartment of Commerce
DOE)Department of Defense
DOEDepartment of Energy
DOIDepartment of the Interior
DOJDepartment of Justice
DOLDepartment of Labor
DOSDepartment of State
DOTDepartment of Transportation
EPAEnvironmental Protection Agency
FEMAFederal Emergency
Management Agency
HHSDepartment of Health and
Human Services
NIOSHNational Institute for
Occupational Safety and Health
NOAANational Oceanic and
Atmospheric Administration
RSPAResearch and Special Programs
Administration
USCGUnited States Coast Guard
USDAUnited States Department of
Agriculture
Note: Reference is made in the NCP to both
the Nuclear Regulatory Commission and the
National Response Center, In order to avoid
confusion, the NCP will spell out Nuclear
Regulatory Commission and use the
abbreviation "NRC" only with respect to the
National Response Center.
(b) Operational Abbreviations:
ARARsApplicable or Relevant and
Appropriate Requirements
CERCLISCERCLA Information System
CRCCommunity Relations
Coordinator
CRPCommunity Relations Plan
ERTEnvironmental Response Team
FCOFederal Coordinating Officer
FSFeasibility Study
HRSHazard Ranking System
LEPCLocal Emergency Planning
Committee
NCPNational Contingency Plan
NPLNational Priorities List
NRCNational Response Center
NRTNational Response Team
NSFNational Strike Force
O&MOperation and Maintenance
OSCOn-Scene Coordinator
PAPreliminary Assessment
PIATPublic Information Assist Team
RARemedial Action
RATRadiological Assistance Team
RCPRegional Contingency Plan
RDRemedial Design
RIRemedial Investigation
RODRecord of Decision
RPMRemedial Project Manager
RRCRegional Response Center
RRTRegional Response Team
SACSupport Agency Coordinator
SERCState Emergency Response
Commission
SISite Inspection
SMOASuperfund Memorandum of
Agreement
SSCScientific Support Coordinator
§300.5 Definitions.
Terms not defined in this section have
the meaning given by CERCLA or the
CWA.
Activation means notification by
telephone or other expeditious manner
or, when required, the assembly of some
or all appropriate members of the RRT
or NRT.
Alternative water supplies as defined
by section 101(34) of CERCLA, includes,
but is not limited to, drinking water and
household water supplies.
Applicable requirements means those
cleanup standards, standards of control,
and ether substantive requirements,
criteria, or limitations promulgated
under federal environmental or state
environmental or facility siting laws that
specifically address a hazardous
substance, pollutant, contaminant,
remedial action, location, or other
circumstance found at a CERCLA site.
Only those state standards that are
identified by a state in a timely manner
and that are more stringent than federal
requirements may be applicable.
Biological additives means
microbiological cultures, enzymes, or
nutrient additives that are deliberately
introduced into an oil discharge for the
specific purpose of encouraging
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Federal Register / Vol. 55. No. 46 / Thursday, March 8. 1990 / Rules and Regulations
biodegradation to mitigate the effects of
[he discharge.
Burning agents means tho^e additives
that, through physical or chemical
means, improve the combustibility of the
materials to which they are applied.
CERCLA is the Comprehensive
Environmental Response,
Compensation, and Liability Act of 1980.
as amended by the Superfund
Amendments and Reauthorizetion Act
of 1986.
CERCUS is the abbreviation of the
CERCLA Information System, EPA's
comprehensive data base and
management system that inventories
and tracks releases addressed or
needing to be addressed by the
Superfund program. CERCLIS contains
the official inventory of CERCLA sites
and supports EPA's site planning and
tracking functions. Sites that EPA
decides do not warrant moving further
in the site evaluation process are given a
"No Further Response Action Planned"
(NFRAP) designation in CERCLIS. This
means that no additional federal steps
under CERCLA will be taken at the site
unless future information so warrants.
Sites are not removed from the data
base after completion of evaluations in
order to document that these
evaluations took place and to preclude
the possibility that they be needlessly
repeated, Inclusion of a specific site or
area in the CERCLIS data base does not
represent a determination of any party's
liability, nor does it represent a finding
that any response action is necessary.
Sites that are deleted from the NPL are
not designated NFRAP sites. Deleted
sites are listed in a separate category in
the CERCLIS data base.
Chemical agents means those
elements, compounds, or mixtures that
coagulate, disperse, dissolve, emulsify.
foam, neutralize, precipitate, reduce,
solubiiize, oxidize, concentrate, congeal.
entrap, fix, make the pollutant mass
more rigid or viscous, or otherwise
facilitate the mitigation of deleterious
effects or the removal of the pollutant
from the water.
Claim as defined by section 101(4) of
CERCLA, means a demand in writing for
a sum certain.
Coastal waters for the purposes of
classifying the size of discharges, means
the waters of the coastal zone except for
the Great Lakes and specified ports and
harbors on, inland rivers.
Coastal zone as defined for the
purpose of the NCP, means all United
States waters subject to the tide. United
States waters of the Great Lakes,
specified ports and harbors on inland
rivers, waters of the contiguous zone,
other waters of the high seas subject to
the NCP, and the land surface or land
substrata, ground waters, and ambient
air proximal to those waters. The term
coastal zone delineates an area of
federal responsibility for response
action. Precise boundaries are
determined by EPA/USCG agreements
and identified in federal regional
contingency plans.
Community relations means EPA's
program to inform and encourage public
participation in the Superfund process
and to respond to community concerns.
The term "public" includes citizens
directly affected by the site, other
interested citizens or parties, organized
groups, elected officials, and potentially
responsible parties,
Community relations coordinator
means lead agency staff who work with
the OSC/RPM to involve and inform the
public about the Superfund process and
response actions in accordance with the
interactive community relations
requirements set forth in the NCP.
Contiguous zone means the zone of
the high seas, established by the United
States under Article 24 of the
Convention on the Territorial Sea and
Contiguous Zone, which is contiguous to
the territorial sea and which extends
nine miles seaward from the outer limit
of the territorial sea.
Cooperative agreement is a legal
instrument EPA uses to transfer money,
property, services, or anything of value
to a recipient to accomplish a public
purpose in which substantial EPA
involvement is anticipated during the
performance of the project.
Discharge as defined by section
311(a)(2) of the CWA, includes, but is
not limited to, any spilling, leaking,
pumping, pouring, emitting, emptying, or
dumping of oil. but excludes discharges
in compliance with a permit under
section 402 of the CWA, discharges
resulting from circumstances identified
and reviewed and made a part of the
public record with respect to a permit
issued or modified under section 402 of
the CWA, and subject to a condition in
such permit, or continuous or
anticipated intermittent discharges from
a poin* source, identified in a permit or
permit application under section 402 of
the CWA, that are caused by events
occurring within the scope of relevant
operating or treatment systems. For
purposes of the NCP, discharge also
means threat of discharge,
Dispersants means those chemical
agents that emulsify, disperse, or
solubilize oil into the water column or
promote the surface spreading of oil
slicks to facilitate dispersal of the oil
into the water column.
Drinking water supply as defined by
section 101(7) of CERCLA, means any
raw or finished water source that is or
may be used by a public water system
(as defined in the Safe Drinking Water
Act) or as drinking water by one or more
individuals.
Environment as defined by section
101(8) of CERCLA. means the navigable
waters, the waters of the contiguous
zone, and the ocean waters of which the
natural resources are under the
exclusive management authority of the
United States under the Magnuson
Fishery Conservation and Management
Act; and any other surface water,
ground water, drinking water supply.
land surface or subsurface strata, or,
ambient air within the United States or
under the jurisdiction of the United
States.
Facility as defined by section 101(9) of
CERCLA, means any building, structure,
installation, equipment, pipe or pipeline
(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 any
site or area, where a hazardous
substance has been deposited, stored,
disposed of, or placed, or otherwise
come to be located; but does not include
any consumer product in consumer use
or any vessel.
Feasibility study (FS) means a study
undertaken by the lead agency 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), using data gathered during the Rl.
The Rl data are used to define the
objectives of the response action, to
develop remedial action alternatives,
and to undertake an initial screening
and detailed analysis of the alternatives.
The term also refers to a report that
describes the results of the study.
First federal official means the first
federal representative of a participating
agency of the National Response Team
to arrive at the scene of a discharge or a
release. This official coordinates
activities under the NCP and may
initiate, in consultation with the OSC,
any-necessary actions until the arrival
of the predesignated OSC. A state with
primary jurisdiction over a site covered
by a cooperative agreement will act in
the stead of the first federal official for
any incident at the site.
Fund or Trust Fund means the
Hazardous Substance Superfund
established by section 9507 of the
Internal Revenue Code of 1986.
Ground water as defined by section
101(12) of CERCLA, mean* water in a
saturated zone or stratum beneath the
surface of land or water.
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t
Hazard Ranking System (MRS) means
the method used by EPA to evaluate the
relative potential of hazardous
substance releases to cause health or
safety problems, or ecological or
environmental damage.
Hazardous substance as defined by
section 101(14} of CERCLA, means: Any
substance designated pursuant to
section 311(b)(2)(A) of th* """' \: any
element, compound, mixture, solution, or
substance designated pursuant to
section 102 of CERCLA; any hazardous
waste havinp the characteristics
identified under or listed pursuant to
section 3001 of the Solid Waste Disposal
Act (but not including any waste the
regulation of which under the Solid
Waste Disposal Act has been suspended
by Act of Congress); any toxic pollutant
listed under section 307(a) of the CWA;
any hazardous air pollutant listed under
section 112 of the Clean Air Act; and
any imminently hazardous chemical
substance or mixture with respect to
which the EPA Administrator has taken
action pursuant to section 7 of the Toxic
Substances Control Act. The term does
not include petroleum, including crude
oil or any fraction thereof which is not
otherwise specifically listed or
designated as a hazardous substance in
the first sentence of this paragraph, and
the term does not include natural gas,
natural gas liquids, liquefied natural gas,
or synthetic gas usable for fuel (or
mixtures of natural gas and such
synthetic gas),
Indian tribe as defined by section
101(36) of CERCLA, means any Indian
tribe, band, nation, or other organized
group or community, including any
Alaska Native village but not including
any Alaska Native regional or village
corporation, which is recognized as
eligible for the special programs and
services provided by the United States
to Indians because of their status as
Indians.
Inland waters, for the purposes of
classifying the size of discharges, means
those waters of the United States in the
inland zone, waters of the Great Lakes,
and specified ports and harbors on
inland rivers.
Inland zone means the environment
inland of the coastal zone excluding the
Great Lakes and specified ports and
harbors on inland rivers. The term
inland zone delineates an area of
federal responsibility for response
action. Precise boundaries are
determined by EPA/USCG agreements
and identified in federal regional
contingency plans.
Lead agency means the agency that
provides the OSC/RPM to plan and
implement response action under the
r JCP. EPA, the USCG, another federal
agency, or a state (or political
subdivision of a state) operating
pursuant to a contract or cooperative
agreement executed pursuant to section
104(d)(l) of CERCLA, or designated
pursuant to a Superfund Memorandum
of Agreement (SMOA1 entered into
pursuant to subpart F of the NCP or
other agreements may be the lead
agency for a response action. In the case
of a release of a hazardous substance,
pollutant, or contaminant, where the
release is on, or the sole source of the
release is from, any facility or vessel
under the jurisdiction, custody, or
control of Department of Defense (DOD)
or Department of Energy (DOE), then
DOD or DOE will be the lead agency.
Where the release is on, or the sole
source of the release is from, any facility
or vessel under the jurisdiction, custody,
or control of a federal agency other than
EPA, the USCG, DOD, or DOE, then that
agency will be the lead agency for
remedial actions and removal actions
other than emergencies. The federal
agency maintains its lead agency
responsibilities whether the remedy is
selected by the federal agency for non-
NPL sites or by EPA and the federal
agency or by EPA alone under CERCLA
section 120. The lead agency will consult
with the support agency, if one exists,
throughout the response process.
Management of migration means
actions that are taken to minimize and
mitigate the migration of hazardous
substances or pollutants or
contaminants and the effects of such
migration. Measures may include, but
are not limited to, management of a
plume of contamination, restoration of a
drinking water aquifer, or surface water
restoration.
Miscellaneous oil spill control agent
is any product, other than a dispersant,
sinking agent, surface collecting agent,
biological additive, or burning agent,
that can be used to enhance oil spill
cleanup, removal, treatment, or
mitigation.
National Priorities List (NPL) means
the list, compiled by EPA pursuant to
CERCLA section 105, of uncontrolled
hazardous substance releases in the
United States that are priorities for long-
term remedial evaluation and response.
Natural resources means land, fish,
wildlife, biota, air, water, ground water,
drinking water supplies, and other such
resources belonging to, managed by,
held in trust by, appertaining to, or
otherwise controlled by the United
States (including the resources of the
exclusive economic zone defined by the
Magnuson Fishery Conservation and
Management Act of 1976), any state or
local government, any foreign
government, any Indian tribe, or, if such
resources are subject to a trust
restriction on alienation, any member nf
an Indian tribe.
Navigable waters, as defined by 40
CFR 110.1. means the waters of the
United States including the territorial
seas. The term includes:
(a) Ail waters that are currently used,
were used in the past, or may be
susceptible to use in interstate or foreign
commerce, including all waters that are
subject to the ebb and flow of the tide;
(b) Interstate waters, including
interstate wetlands;
(c) All other waters such as intrastate
lakes, rivers, streams (including
intermittent streams), mudflats,
sandflats. and wetlands, the use,
degradation, or destruction of which
would affect or could affect interstate or
foreign commerce including any such
waters:
(1) That are or could be used by
interstate or foreign travelers for
recreational or other purposes;
(2) From which fish or shellfish are or
could be taken and sold in interstate or
foreign commerce;
(3) That are used or could be used for -
industrial purposes by industries in
interstate commerce;
(d) All impoundments of waters
otherwise defined as navigable waters
under this section;
(e) Tributaries of waters identified in
paragraphs (a) through (d) of this
definition, including adjacent wetlands;
and
(f) Wetlands adjacent to waters
identified in paragraphs (a) through (e)
of this definition: Provided, that waste
treatment systems (other than cooling
ponds meeting the criteria of this
paragraph) are not waters of the United
States,
Offshore facility as defined by section
101(17) of CERCLA and section
311(a)(ll) of the CWA, means any
facility of any kind located in, on, or
under any of the navigable waters of the
United States and any facility of any
kind which is subject to the jurisdiction
of the United States and is located in,
on, or under any other waters, other
than a vessel or a public vessel.
Oil as defined by section 311(a)(l) of
the CWA, means oil of any kind or in
any form, including, but not limited to,
petroleum, fuel oil, sludge, oil refuse,
and oil mixed with wastes other than
dredged spoil.
Oil pollution fund means the fund
established by section 311(k) of the
CWA.
On-scene coordinator (OSC) means
the federal official predesignated by
EPA or the USCG to coordinate and
direct federal response5 under subpart
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8817
pr the official designated by the lead
cy to coordinate and direct removal
w 'ons under subpart E of the NCP.
'Onshore facility as defined by section
101(18) of CERCLA, means any facility
(including, but not limited to, motor
vehicles and rolling stock) of any kind
located in, on, or under any land or non-
navigable waters within the United
States; and, as defined by section
311(a)(10) of the CWA, means any
facility (including, but not limited to,
motor vehicles and rolling stock) of any
kind located in, on, or under any land
within the United States other than
submerged land.
On-site means the area! extent of
contamination and all suitable areas in
very close proximity to the
contamination necessary for
implementation of the response action.
Operable unit means a discrete action
that comprises an incremental step
toward comprehensively addressing site
problems. This discrete portion of a
remedial response manages migration,
or eliminates or mitigates a release,
threat of a release, or pathway of
exposure. The cleanup of a site can be
divided into a number of operable units,
depending on the complexity of the
problems associated with the site.
Operable units may address
eographical portions of a site, specific
problems, or initial phases of an
ion, or may consist of any set of
ctions performed over time or any
actions that are concurrent but located
in different parts of a site.
Operation and maintenance (O&M)
means measures required to maintain
the effectiveness of response actions.
Person as defined by section 101(21)
of CERCLA, means an individual, firm,
corporation, association, partnership.
consortium, joint venture, commercial
entity, United States government, state.
municipality, commission, political
subdivision of a state, or any interstate
body.
Pollutant or contaminant as defined
by section 101(33) of CERCLA, shall
include, but not be limited to, any
element, substance, compound, or
mixture, including disease-causing
agents, which after release into the
environment and upon exposure,
ingestion, inhalation, or assimilation
into any organism, either directly from
the environment or indirectly by
ingestion through food chains, will or
may reasonably be anticipated to cause
death, disease, behavioral
abnormalities, cancer, genetic mutation,
physiological malfunctions (including
malfunctions in reproduction) or
hysical deformations, in such
ganisms or their offspring. The term
bes not include petroleum, including
crude oil or any fraction thereof which is
not otherwise specifically listed or
designated as a hazardous substance
under section 101(14) (A) through (F)of
CERCLA, nor does it include natural
gas, liquified natural gas, or synthetic
gas of pipeline quality (or mixtures of
natural gas and such synthetic gas). For
purposes of the NCP, the term pollutant
or contaminant means any pollutant or
contaminant that may present an
imminent and substantial danger to
public health or welfare.
Post-removal site control means those
activities that are necessary to sustain
the integrity of a Fund-financed removal
action following its conclusion. Post-
removal site control may be a removal
or remedial action under CERCLA. The
term includes, without being limited to,
activities such as relighting gas flares,
replacing filters, and collecting leachate.
Preliminary assessment (PA) means
review of existing information and an
off-site reconnaissance, if appropriate,
to determine if a release may require
additional investigation or action. A PA
may include an on-site reconnaissance,
if appropriate.
Public participation, see the definition
for community relations.
Public vessel as defined by section
311(a)(4) of the CWA, means a vessel
owned or bareboat-chartered and
operated by the United States, or by a
state or political subdivision thereof, or
by a foreign nation, except when such
vessel is engaged in commerce.
Quality assurance project plan
(QAPP) is a written document,
associated with all remedial site
sampling activities, which presents in
specific terms the organization (where
applicable), objectives, functional
activities, and specific quality assurance
(QA) and quality control (QC) activities
designed to achieve the data quality
objectives of a specific project(s) or
continuing operation(s). The QAPP is
prepared for each specific project or
continuing operation (or group of similar
projects or continuing operations). The
QAPP will be prepared by the
responsible program office, regional
office, laboratory, contractor, recipient
of an assistance agreement, or other
organization. For an enforcement action,
potentially responsible parties may
prepare a QAPP subject to lead agency
approval.
Release as defined by section 101(22)
of CERCLA, means any spilling, leaking,
pumping, pouring, emitting, emptying,
discharging, injecting, escaping,
leaching, dumping, or disposing into the
environment (including the
abandonment or discarding of barrels,
containers, and other closed receptacles
containing any hazardous substance or
pollutant or contaminant), but excludes:
Any release which results in exposure to
persons solely within a workplace, with
respect to a claim which such persons
may assert against the employer of such
persons; emissions from the engine
exhaust of a motor vehicle, rolling stock,
aircraft, vessel, or pipeline pumping
station engine; release of source,
byproduct, or special nuclear material
from a nuclear incident, as those terms
are defined in the Atomic Energy Act of
1954, if such release is subject to
requirements with respect to financial
protection established by the Nuclear
Regulatory Commission under section
170 of such Act, or, for the purposes of
section 104 of CERCLA or any other
response action, any release of source,
byproduct, or special nuclear material
from any processing site designated
under section lG2(a)(l) or 302(a) of the
Uranium Mill Tailings Radiation Control
Act of 1978; and the normal application
of fertilizer. For purposes of the NCP,
release also means threat of release.
Relevant and appropriate
requirements means those cleanup
standards, standards of control, and
other substantive requirements, criteria,
or limitations promulgated under federal
environmental or state environmental or
facility siting laws that while not
"applicable" to a hazardous substance,
pollutant, contaminant remedial action.
location, or other circumstance «t a
CERCLA site, address problems or
situations sufficiently similar to those
encountered at the CERCLA rite that
their use is well suited to the particular
site. Only those state standards that are
identified hi a timely manner and are
more stringent than federal
requirements may be relevant and
appropriate. * - -
/&?/7^/o/] mean* the
technical analysis and procedures which
follow the selection of remedy fora site
and result hi a detailed set of plans and
specifications for implementation of the
remedial action.
Remedial investigation (RI) is a
process undertaken by the lead agency
to determine the nature and extent of
the problem presented by the release.
The Rl emphasizes data collection and
site characterization, and Is generally
performed concurrently and in an
interactive fashion with the feasibility
study. The Rl 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 project manager (RPMJ
means the official designated by the
lead agency to coordinate, monitor, or
>*
V-
:*
M J
,
.*'"
* .
U J "*
,
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Federal Register / Vol. 55, No. 46 / Thursday, March 8, 1990 / Rules and Regulations
direct remedial or other response
actions under subpart E of the NCR
Remedy or remedial action (RA)
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 at 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, any monitoring
reasonably required to assure that such
actions protect the public health and
welfare and the environment and, where
appropriate, post-removal site control
activities. 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 EPA 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. For the purpose
of the NCP, the term also includes
enforcement activities related thereto.
Remove or removal as defined by
section 311(a)(8) of the CWA, refers to
removal of oil or hazardous substances
from the water and shorelines or the
taking of such other actions as may be
necessary to minimize or mitigate
damage to the public health or welfare
or to the environment. As defined by
section 101(23) of CERCLA. remove or
removal means the cleanup or removal
of released hazardous substances from
the environment; such actions as may be
necessary taken in the event of the
threat of release of hazardous
substances into the environment; such
actions as may be necessary to monitor,
assess, and evaluate the release or
threat of release of hazardous
substances; the disposal of removed
material; or the taking of such other
actions as may be necessary to prevent,
minimize, or mitigate damage to the
public health or welfare or to the
environment, which may otherwise
result from a release or threat of release.
The term includes, in addition, without
being limited to, security fencing or
other measures to limit access, provision
of alternative water supplies, temporary
evacuation and housing of threatened
individuals not otherwise provided for,
action taken under section 104(b) of
CERCLA, post-removal site control
where appropriate, and any emergency
assistance which may be provided
under the Disaster Relief Act of 1974.
For the purpose of the NCP, the term
also includes enforcement activities
related thereto.
Respond or response as defined by
section 101(25) of CERCLA, means
remove, removal, remedy, or remedial
action, including enforcement activities
related thereto.
SARA is the Supexfund Amendments
and Reauthorization Act of 1986. In
addition to certain free-standing
provisions of law, it includes
amendments to CERCLA, the Solid
Waste Disposal Act, and the Internal
Revenue Code. Among the free-standing
provisions of law is Title HI of SARA,
also known as the "Emergency Planning
and Community Right-to-Know Act of
1986" and Title IV of SARA, also known
as the "Radon Gas and Indoor Air
Quality Research Act of 1986." Title V of
SARA amending the Internal Revenue
Code is also known as the "Superfund
Revenue Act of 1986."
Sinking agents means those additives
applied to oil discharges to sink floating
pollutants below the water surface.
Site inspection (SI) means an on-site
investigation to determine whether there
is a release or potential release and the
nature of the associated threats. The
purpose is to augment the data collected
in the preliminary assessment and to
generate, if necessary, sampling and
other field data to determine if further
action or investigation is appropriate.
Size classes of discharges refers to
the following size classes of oil
discharges which are provided as
guidance to the OSC and serve as the
criteria for the actions delineated in
subpart D. They are not meant to imply
associated degrees of hazard to public
health or welfare, nor are they a
measure of environmental injury. Any
oil discharge that poses a substantial
threat to public health or welfare or the
environment or results in significant
public concern shall be classified as a
major discharge regardless of the
following quantitative measures:
(a) Minor discharge means a
discharge to the inland waters of less
than 1,000 gallons of oil or a discharge to
the coastal waters of less than 10,000
gallons of oil.
(b) Medium discharge means a
discharge of 1,000 to 10,000 gallons of oil
to the inland waters or a discharge of
10,000 to 100,000 gallons of oil to the
coastal waters.
(c) Major discharge means a discharge
of more than 10,000 gallons of oil to the
inland waters or more than 100,000
gallons of oil to the coastal waters.
Size classes of releases refers to the
following size classifications which are
provided as guidance to the OSC for
meeting pollution reporting requirements
in subpart B. The final determination of
the appropriate classification of a
release will be made by the OSC based
on consideration of the particular
release (e.gM size, location, impact, etc.):
(a) Minor release means a release of a
quantity of hazardous substance(s),
pollutant(s), or contaminant(s) that
poses minimal threat to public health or
welfare or the environment.
(b) Medium release means a release
not meeting the criteria for classification
as a minor or major release.
(c) Major release means a release of
any quantity of hazardous substance(s),
pollutant(s), or contaminant(s) that
poses a substantial threat to public
health or welfare or the environment or
results in significant public concern.
Source control action is the
construction or installation and start-up
of those actions necessary to prevent
the continued release of hazardous
substances or pollutants or
contaminants (primarily from a source
on top of or within the ground, or in
buildings or other structures) into the
environment.
Source control maintenance measures
are those measures intended to maintain
the effectiveness of source control
actions once such actions are operating
and functioning properly, such as the
maintenance of landfill caps and
leachate collection systems.
Specified ports and harbors means
those ports and harbor areas on inland
rivers, and land areas immediately
adjacent to those waters, where the
USCG acts as predesignated on-scene
coordinator. Precise locations are
determined by EPA/USCG regional
agreements and identified in federal
regional contingency plans.
I
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Federal Register / Vol. 55. No. 46 / Thursday. March_ 8, 1990 / Rules and Regulations
8819
to
Oil
irge
on
;n
Slate means the several slates of the
Tailed Sl-j!es, the District of CulumbM,
Iho Commonwealth of Puerto Rico.
Cuam, American Samoa, the Virgin
Islands, the Commonwealth of Norih^rn
Mari-jnas. and any other territory or
possession over which the United S'nf,r-s
has jurisdiction. For purposes of the
NCR the term includes Indian tribes as
defined in the NCP except where
snet.ificallj noted. Section 126 cf
CERCLA proudes that the governing
body of an Indian tribe shall be afforded
substantially the same treatment as a
s:;ile wi'h respect to certain prevision
of CERCLA. Section 300.515{b) of th«*
NCP describes the requirements
pertaining to Indian tribes that wish to
be treated as stales.
Superfiwd Memorandum of
Agmewent (SMOA) means a
r.onbinding, written document executed
by an EPA Regional Administrator and
the head of a state agency that mav
establish the nature and extent of HPA
«):id state interaction during the rerr.uvsl,
pip-remed;j!« remedial, and/or
enforcement response process The
SMOA is nut a site-specific dolmen!
a:though attachments may address
specific sites. The SMOA generally
defines the role and responsibilities of
both the lead and the support agencies.
Superfitnd state contract is a joint,
It gaily binding agreement between EPA
and a state to obtain the necessa-y
assurances before a fedoral-lead
remedial action can begin at a site. In
the rase of a politico! subdivision-lead
rrm°di^! response, a three-party
S.-perfund state contract among EPA,
the state, and political subdivision
thereof, is required before a political
Kj'hdivib'cn takes the l.;ad for uny uhttse
of remedial response to ensure sU'«
involvement pursuant to section 121(fj(l}
o: CERCLA. The Superfand state
(.ontracl p>ay be amended to provide the
slate's CHKCLA section 104 assurances
Ir, fore a political subdivision ran take
the lead for icrppdial action.
S'jpff'-'l Cheney means the agency or
r.aencies that provide the support
iieencv n»ird;nator to furnish neeess.irv
O <* *
d'iia to !h,' K-ad agonry, review
response1 daiJ and aorumcnis, and
provide o'r^r assistance as requested by
the OSC or RPM. EPA, the USCG,
another federal agency, or a state m«iv
bi; support agencies for a response
action if operating pursuant to a
contract executed under section
104[d)(I) of CERCLA or designated
pursuant to a Superfuad MentorandiU:*
of Agreement entered into pursuan! to
sub[vart F of Ihe NCP or other
agreement. The support agency rr.,n also
ronrur on decision dociiiV.ents.
Support agency coordinator (SAC)
means the official designated by the
support agency, as appropriate, to
interact and coordinate with the leviJ
agency in response actions under
subpart E of this part,
Surface collecting agents means those
chemical agents that form a surface film
to control the layer thickness of oil,
Threat of discharge or release. see
definitions for discharge and release.
Threat of release, see definition for
V
release.
Treatment technology means any unit
operation or series of unit operations
that alters the composition of a
hazardous substance or pollutant or
contaminant through chemical,
biological, or physical moans so as to
reduce toxicity. mobility, or volume of
the contaminated materials being
treated. Treatment technologies are an
alternative to land disposal of
hazardous wastes without treatment,
Trustee means an official of a federal
natural resources management agency
designated in subpart G of the NCP or a
c esignated state official or Indian tribe
vsho may pursue claims for damages
under section 107(f) of CERCLA.
United States when used in relation to
section 31l(a)(5) of the CWA, means the
states, the District of Columbia, the
Commonwealth of Puerto Rico, the
Northern Mariana Islands, Guam,
American Samoa, the United States
Virgin Islands, and the Pacific Island
Governments. United States, when used
in relation to section 101(27) of CERCLA,
includes the several stetes of the United
States, the District of Columbia, the
Commonwealth of Puerto Rico, Guam,
American Samoa, the United States
Virgin Islands, the Commonwealth of
the Northern Marianas, and any other
territory or possession over which the
United States has jurisdiction.
Vessel as defined by section 101(28)
of CERCLA. means every description of
watercraft or other artificial contrivance
used, or capable of being used, as a
means of transportation on water; and,
as defined by section 31J(a)f3j of the
CWA, means every descriptor* of
walercraft or other artificial contrivance
used, or capable of being used, as a
means of transportation on water other
than a public vessel.
Volunteer means any individual
accepted to perform services by the lead
agency which has authority to accept
volunteer services (examples: See 16
U.S.C. 742f(c)). A volunteer is subject to
the provisions of the authorizing statute
and the NCP.
words in the masculine gender also
include the feminine and vice versa, ys
the case may require.
§ 300.7 Computation of time.
In computing any period of time
prescribed or allowed in these rules of
practice, except as otherwise provided,
the dciy of the event from which the
designated period begins to run shall not
be included. Saturdays, Sundays, and
federal legal holidays shall be included.
When a stated time expires on a
Saturday, Sunday, or legal holiday, the
stated time period shall be extended to
include the next business day.
Subpart BResponsibility and
Organization for Response
§ 300.100 Duties of President delegated to
federal agencies.
In Executive Order 11735 and
Executive Order 12580, the President
delegated certain functions and
responsibilities vested in him by tho
CWA and CERCLA. respectively.
§ 300,105 General organization concepts.
(a) Federal agencies should:
(1) Plan for emergencies and develop
procedures for addressing oil discharges
and releases of hazardous substances,
pollutants, or contaminants;
(2) Coordinate their planning,
preparedness, and response activities
with one another;
(3) Coordinate their planning,
preparedness, and response activities
with affected states and local
governments and private entities; and
(4) Make available those facilities or
resources that may be useful in a
response situation, consistent with
agency authorities and capabilities.
(bj Three fundamental kinds of
activities are performed pursuant to the
NCP:
(1) Preparedness planning and
coordination for response to a discharge
of oil or release of a hazardous
substance, pollutant, or contaminant;
(2) Notification and communications;
300.6 Use of number and gender.
As used in this regulation, words in
thf* singular also incl.idfi thi* plural ar.d
(3) Response operations at the scene
of a discharge or release.
(c) The organizational elements
created to perform these activities are:
(1) The National Response Team
(NRT), responsible for national response
and preparedness planning, for
coordinating regional planning, and for
providing policy guidance and support
to the Regional Response Teams. NRT
membership consists of representatives
from the agencies specified in § 300.175.
(2) Regional Response Teams (RRTs),
responsible for regional planning and
preparedness activities before response
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Tuesday
June 5, 1990
Part II
Environmental
Protection Agency
40 CFR Part 35
Cooperative Agreements and Superfund
State Contracts for Superfund Response
Actions; Final Rule
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Federal Register / Vol. 55, No. 108 / Tuesday, June 5, 1990 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
Office of Administration
40 CFR, Part 35
[FRL-3727-1J
RIN2010-AA11
Cooperative Agreements and
Superfund State Contracts for
Superfund Response Actions
AGENCY; Environmental Protection
Agency (EPA).
ACTION: Final rule.
SUMMARY: This rule establishes the
administrative requirements for
CERCLA-funded Cooperative
Agreements and Superfund State
Contracts. The rule establishes these
requirements for States, political
subdivisions thereof, and Federally
recognized Indian Tribes.
EFFECTIVE DATE: This rule becomes
effective July 5,1990.
COMPLIANCE DATE: This rule is effective
for all CERCLA-funded Cooperative
Agreements and Superfund State
Contracts awarded on or after July 5,
1990.
EFFECTIVE DATE. This rule also applies
to amendments to existing agreements
when the response Statement of Work is
changed.
ADDRESSES: Copies of materials
relevant to this rule-making are
contained in the Superfund docket
located in room M2447 at the U.S.
Environmental Protection Agency. 401 M
Street SW., Washington DC 20460. The
docket is available for inspection by
appointment only between the hours: of
9 a.m. and 4 p.m. Monday through
Friday, excluding Federal holidays. The
docket phone number is (202) 382-3046.
As provided in 40 CFR part 2, a
reasonable fee may be charged for
copying services.
FOR FURTHER INFORMATION CONTACT:
Richard A. Johnson, Office of
Administration, PM-216F, U.S.
Environmental Protection Agency, 499
South Capitol Street SW., Washington,
DC 20460 at (202) 382-5296, or Vincent S.
Martin of the same office at (202) 382-
5294.
SUPPLEMENTARY INFORMATION: The
contents of this preamble are as follows;
I. Background
II Description of Major Issues
III. Section by Section Analysis
IV. Supporting Information
V. Impact Analyses
I. Background
The Comprehensive Environmental
Response, Compensation and Liability
Act (CERCLA) was enacted in 1980 and
launched the nation's first centralized
and substantial commitment to clean up
hazardous waste sites. CERCLA, or
Superfund, provided Federal authority
and resources to respond directly to
releases (or threatened releases) of
hazardous substances, pollutants or
contaminants that could endanger
human health or the environment. The
law also authorized enforcement action
and cost recovery from those
responsible for a release of a hazardous
substance. The Superfund Amendments
and Reauthorization Act (SARA) was
enacted on October 17,1986 and
continued the program initiated by
CERCLA by reauthorizing CERCLA for
an additional five years. SARA
strengthened and expanded the cleanup
program, authorizing the Hazardous
Substance Superfund (the "Trust Fund")
with $8.5 billion. SARA also
strengthened the statutory mandate for
State involvement in CERCLA response
activities.
Two types of Superfund response
agreements are essential to State
participation in CERCLA
implementation. The first, Superfund
Cooperative Agreements, is the vehicle
through which EPA can provide funds to
States, political subdivisions thereof,
and Indian Tribes to assume
responsibility as lead or support
agencies for response. Core Program
Cooperative Agreements may also be
used for non-site-specific activities that
support involvement by States and
Indian Tribes.
The second, Superfund State
Contracts (SSCs), is necessary to ensure
State involvement as mandated under
section 121 of CERCLA and to obtain
State assurances required under section
104 of CERCLA prior to remedial action.
When EPA assumes the lead role for
response, EPA and the State must
document these assurances in a two-
party SSC. When EPA assumes the lead
role for a response on Indian Tribal
lands, the Indian Tribe may be required
to provide the real property acquisition
assurance in a two-party SSC.
Whenever a political subdivision takes
the lead for response actions, a three-
party SSC is required among EPA, the
State, and the political subdivision to
document State involvement and must
be amended to provide the State's
assurances prior to remedial action.
The Office of Management and Budget
(OMB) revised OMB Circular A-102 by
establishing a government-wide
"common rule" which prescribes
administrative requirements for Federal
assistance awards to States, political
subdivisions thereof, and Federally
recognized Indian Tribes. EPA has
implemented the common rule through
40 CFR part 31, "Uniform Administrative
Requirements for Grants and
Cooperative Agreements to State and
Local Governments." However, as
provided in 40 CFR 31.4, part 31
authorizes EPA, among other things, to
impose additional administrative
requirements in codified regulations
published in the Federal Register where
necessary to implement statutory
provisions.
Consistent with this 40 CFR part 31
authority, EPA is promulgating this final
rule as 40 CFR part 35, subpart O, to
implement the administrative
requirements for the Superfund program.
Some comments received on the Interim
Final Rule expressed the opinion that
subpart O is unnecessary, too broad in
scope, and that it places an excessive
burden on States. Prior to subpart O, the
requirements for Cooperative
Agreements and SSCs were documented
in administrative regulations that
applied to all EPA programs, and in
numerous specific Superfund guidance
materials. The rule now brings together
the necessary information to ensure
national consistency in the
implementation of the program, and to
ensure that the provisions of CERCLA
are carried out. This rule incorporates
specifically by reference those 40 CFR
part 31 requirements that are applicable
to recipients of Federal funds.
Subpart O establishes specific
uniform requirements for recipients of
CERCLA funds. These requirements
supplement those in part 31 for
Superfund Cooperative Agreements and
SSCs in two ways. First, this subpart
provides requirements specific to
CERCLA, as amended, which were not
addressed in part 31. The regulation
adds requirements for States to follow
for non-State-lead responses pursuant to
an SSC, clarifies the role of Indian
Tribes, describes Core Program and
support agency Cooperative
Agreements, and clarifies the
requirements for quarterly reports and
record documentation and retention.
Second, this subpart modifies
requirements which, although addressed
in part 31, do not meet the minimum
standards necessary for cost recovery
as mandated under section 107 of
CERCLA. For example, although part 31
does address procurement procedures,
recipients must follow the procurement
requirements in 55 35.6550 through
35.6610 of this subpart when procuring
goods or services under Superfund
Cooperative Agreements. Those sections
of part 31 that subpart O references that
are applicable for CERCLA-funded
Cooperative Agreements and/or
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Federal Register / Vol. 55. No. 108 / Tuesday. June 5, 1990 / Rules and Regulations
Superfund State Contracts are listed
below:
31.3 Definitions.
31.6 Additions and exceptions, selected
sections.
31.12 Special grant or subgrant conditions
for "high-risk" grantees.
31.13 Principal statutory provisions
applicable to EPA assistance awards
31.20 Standards for financial management
systems: source documentation and
awarding agency review.
31.21 Payment. Basic standard.
reimbursement, effect of program
income, refunds, audit recoveries on
payment, withholding payments, and
cash depositories.
31.22 Allowable costs
31.23 Period of availability of funds
31.24 Matching or cost sharing
qualifications and exceptions, and
valuation of third party in-kind
contributions.
31.25 Program income.
31.26 Non-Federal audit,
31.30 Changes.
31.31 Real property.
31.34 Copyrights
31.35 Subawards to debarred and
suspended parties.
31.36 Procurement Selected sections from
procurement standards, contracting with
MBEs/WBEs and small businesses,
bonding requirements, and payment to
consultants.
31.40 Monitoring by grantees.
31.41 Financial reporting.
31.42 Starting dates for records retention
penod and requirements for records
access
31.43 Enforcement
31.44 Termination for convenience.
31.45 Quality assurance.
31.50 Closeout
31.51 Later disallowances and adjustments
31.52 Collection of amounts due.
31.70 Disputes,
The requirements in this subpart do
not apply to Technical Assistance
Grants or CERCLA research and
development grants, including
Superfund Innovative Technology
Evaluation (SITE) Demonstration
Cooperative Agreements.
II. Description of Major Issues
A. The National Oil and Hazardous
Substances Pollution Contingency Plan
(NCP)
Subpart O references specific sections
of CERCLA, as amended, in prescribing
requirements. Although CERCLA, as
amended, is the legislative initiative that
provides for the cleanup of hazardous
waste, the National Oil and Hazardous
Substances Pollution Contingency Plan
(the NCP, 40 CFR part 300) describes the
guidelines and procedures for
implementing CERCLA. The NCP has
been revised to include the statutory
*
requirements established by SARA. The
Agency intends for requirements in the
NCP and subpart O to be consistent
with one another. Although some terms
may be defined somewhat differently in
the NCP and subpart O, these
definitions are consistent with one
another. Any terms not defined in
subpart O shall have the meanings set
forth in section 101 of CERCLA, 40 CFR
part 31, and the NCP.
B. Indian Tribes
The definition of the term "Indian
Tribe" in this subpart is the same as that
found in CERCLA. CERCLA requires
EPA to afford to Federally recognized
Indian Tribes (as defined in CERCLA
and this subpart) substantially the same
treatment it does to States. However, to
clarify the Superfund administrative
requirements with which Indian Tribes
must comply and those with which they
need not comply, this Final Rule is
careful to indicate the respective
applicability of its requirements to
States and Indian Tribes. Where a
requirement applies only to a State, the
term "State" is used, and where a
requirement applies only to an Indian
Tribe, the term "Indian Tribe" is used.
Applicability of a requirement to both
States and Indian Tribes is either stated
as such, or is indicated by cross-
reference.
Indian Tribes may be the lead or
support agency for a response, and are
eligible for both site-specific funding
and non-site-specific funding. However,
under the terms of CERCLA, Indian
Tribes need not provide the section
104(c)(3) assurances. Consistent with the
NCP (§ 300.510(e)(2)). this rule does not
address whether Indian Tribes are
States for the purpose of CERCLA
section 104(c)(9). Although some Indian
Tribes may lack the legal authority to do
so, in general Indian Tribes are required
to provide the real property acquisition
assurance pursuant to CERCLA section
C. Records Retention
Length of Retention
' 40 CFR part 31 establishes a three-
year records retention requirement for
the recipients of assistance agreements
(40 CFR 31.42). In addition, part 31
specifies that if any litigation, claim,
negotiation, audit or other action
involving records for the project has
been started before the expiration of the
three-year period, the records must be
retained until completion of the action
and resolution of all issues which arise
from it, or until the end of the regular
three-year period, whichever is later.
Subpart O requires that recipients
retain all records for ten years after the
date of completion of all response
~^
actions at a site, or until any litigation,
claim, negotiation, audit, cost recovery,
or other action involving the records has
been completed and all issues resolved,
whichever is later. This requirement
ensures that response action
information remains available for a
sufficient period to support government
cost recovery cases. The ten-year
requirement supersedes all Superfund
guidance documents that specify a
three-year retention period, including
State Superfund Financial Management
and Recordkeeping Guidance, dated
January 1988. Subpart O also requires
the recipient to obtain written approval
from its EPA award official before
disposing of any CERCLA records.
The recipient of a site-specific
Cooperative Agreement must retain the
supporting documentation for all
activities undertaken pursuant to
CERCLA, and must organize this
documentation in a manner that
satisfies cost recovery requirements.
Site-specific costs of records retention
activities (including organization,
maintenance, storage and retrieval)
should be charged to a site-specific
Cooperative Agreement. To enable
prompt close-out of site-specific
Cooperative Agreements, the
deobligation of unused funds, and the
timely commencement of enforcement
actions for cost recovery, a recipient of
a Core Program Cooperative Agreement
may charge record retention expenses
following completion of site-specific
response activities to the Core Program
Cooperative Agreement.
Method of Retention
Recipients may substitute microform
copies for original supporting
documentation for response actions
(including financial and cost accounting
records) undertaken pursuant to
CERCLA. The microform copying must
be performed in accordance with the
technical regulations concerning
micrographics of Federal Government
records (36 CFR part 1230) and EPA
records management procedures (EPA
Order 2160). If the recipient decides to
use microform copies, then the recipient
must also perform microform copying of
original documents periodically in the
regular course of business, and may
dispose of these records only upon
approval. Subpart O requires the
recipient to obtain written approval
from EPA before disposing of the
original records that were used to
the microform copy. Records reten
requirements specified in this subpart
are applicable to microform.
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Federal Register / Vol. 55, No. 108 / Tuesday, June 5, 1990 / Rules and Regulations
D. Cost Accounting
The recipient of CERCLA funds is
required to account for costs as
stipulated in the Cooperative
Agreement: by site, activity, and
operable unit, as applicable. The
recipient is not required to track
expenses by site for pre-remedial or
Core Program Cooperative Agreement
activities. However, for pre-remedial
activities (i.e. preliminary assessments
and site inspections), the recipient is
required to track expenses by a single
Superfund account number designated
specifically for the pre-remedial activity.
In addition, the recipient is required to
report estimated site-specific technical
hours spent for the pre-remedial activity.
For Core Program activities, the
recipient is required to track expenses
by the Superfund account number(s)
designated specifically for Core Program
activities.
E. Financial Status Report
Although the Financial Status Report
form (SF-269) does not request
information by site, activity, and
operable unit, the recipient must
continue to provide this financial
information, as applicable, in order to
support cost recovery.
F. Credit for NPL Sites
This regulation addresses
requirements for obtaining CERCLA
credit in | 35.62B5(c), This section
describes the requirements for
expenditures incurred before a site is
listed on the NPL and for those incurred
after a site is listed on the NPL. Section
104(c)(5)(A) of CERCLA, as amended,
allows credit for amounts expended by
a State for remedial action at an NPL
site pursuant to a contract or
Cooperative Agreement. In addition,
section 104(c)(5)(B) allows credit for
expenses for remedial action at a site
incurred before the site is listed on the
NPL if the site is subsequently listed on
the NPL and the expenses are
determined to be creditable.
G. Purchase of Personal Property
Although subpart O provides the
recipient with an option for obtaining
equipment with CERCLA funds, it is not
EPA's intent to use the Hazardous
Substance Superfund to finance large
purchases of equipment
indiscriminantly. Therefore, the
recipient must meet stringent
requirements before EPA will allow the
purchase of equipment with CERCLA
funds. EPA encourages the recipient to
use its own funds to purchase
equipment, and charge the Cooperative
Agreement for its use. Although EPA
must approve this usage rate, the
recipient does not then have to comply
with the other property standards or
disposition requirements of this
regulation.
H. Twenty-year Waste Capacity
This regulation includes the
requirement that States must provide the
assurance regarding availability of
hazardous waste treatment and disposal
facilities as required by CERCLA
section 104(c)[9) and | 300.510(e) of the
NCP. EPA has also issued guidance on
this assurance.
/. Removals
Because there must be sufficient time
to award a Cooperative Agreement
before a State, political subdivision, or
Indian Tribe may take the lead,
generally only those removal actions
with a planning period of more than six
months will be eligible for Cooperative
Agreements. Removals with a planning
period of more than six months are
those where, based on the site
evaluation, the lead agency determines
that a removal action is appropriate and
that there is at least six months before
on-site activities must begin. The
general coordination of administrative
and/or management activities
associated with such removals is
eligible for Core Program funding
/. Support Agency Cooperative
Agreements
Under a support agency Cooperative
Agreement, States, political subdivisions
and Indian Tribes may receive funding
to perform site-specific activities to
support an EPA-lead response. An
example of support agency activities
that may be funded under a Cooperative
Agreement is the review and comment
on technical data and reports relating to
implementation of the remedy. States,
political subdivisions and Indian Tribes
are encouraged to use support agency
Cooperative Agreements to fund their
Bite-specific support activities, and must
not fund such activities under the Core
Program. This regulation codifies the
requirements for recipients of support
agency Cooperative Agreements in
$ $ 35.6240 through 35.6255 of this
subpart.
K. Core Program Cooperative
Agreements
States and Indian Tribes are eligible
to receive Core Program Cooperative
Agreements in order to conduct
CERCLA implementation activities that
are not directly assignable to specific
sites, but are intended to support a
State's or Indian Tribe's ability to
participate in the CERCLA response
program. Although §§ 35.6215 through
35.6235 are dedicated to Core Program
Cooperative Agreements, whenever
possible this Final Rule integrates the
requirements of the Core Program, and
indicates activities eligible for funding.
throughout the regulation.
L Superfund State Contracts (SSCsj
This subpart establishes the
requirements for both two-party and
three-party SSCs that are required to
obtain CERCLA section 104 assurances
before an EPA-lead remedial action can
begin and to ensure State and Indian
Tribal involvement in response
activities.
HI. Section by Section Analysts
During the period of public comment
on the Interim Final Rule, EPA received
numerous comments on specific sections
of 40 CFR part 35, subpart O. The
following Section by Section Analysis
includes a presentation of each issue
raised by public comment and an
explanation of EPA's response.
Each public comment is presented at
the appropriate Interim Final Rule
section listing under the heading "Issue"
and EPA's response is provided under
the heading "Final Rule." To facilitate
public review, the section listings in this
Section by Section Analysis follow the
organization of the Interim Final Rule.
However, when EPA's response has
resulted in a revision to the rule
(including an organizational change
resulting in a new section, paragraph, or
subparagraph). the revision is indicated
under the "Final Rule" heading.
The revisions discussed below are not
all the result of public comment on the
Interim Final Rule. Many result from
EPA's own administrative experience to
date or from policy changes. When the
revision is not the result of an "issue"
per se, the entire discussion of the
revision is found at the "Final Rule"
heading. EPA also corrected several
typographical errors found in the Interim
Final Rule, and made several editorial
changes. Significant editorial changes in
a section are presented under the "Final
Rule" heading.
Sect/on 35.6005 Purpose and Scope
Final Rule: A new paragraph (d) is
added to this section of the rule to
clarify that, except as provided for in
CERCLA section lll(e)(3), Superfund
monies for remedial action cannot be
used by recipients for remedial action
with respect to federally-owned
facilities. When a cleanup is undertaken
by another Federal entity, the State,
political subdivision or Indian Tribe
may pursue funding for its involvement
-------
in response activities from the
appropriate Federal entity.
Section 35.6015 Definitions
Section 35.6015(a)(l) Activity
Issue: In order to better understand
the reporting requirements of subpart O.
several respondents requested
clarification of the definition of
"activity."
Final Rule: This definition is revised
to clarify that tasks which make up an
"activity" pursuant to this rule are
CERCLA-funded tasks, and that such
tasks include those eligible for funding
under the Core Program, as well as
those for site-specific response.
Section 35.6015(a)(ll) Construction
Issue: One respondent objected to the
definition of "construction" on the
grounds that it specifically excludes
dismantling or demolition of buildings
and other structures from remedial
actions. The respondent noted that there
are a number of remedial actions where
demolition and off-site disposal of
structures is an integral part of the effort
and questioned whether this definition
might adversely impact allowable costs
in ways that EPA does not anticipate.
Final Rule: The definition of
"construction" is not intended to
exclude dismantling or demolition of
buildings and other structures from
remedial actions, and should not be read
that way. Remedial action includes all
tasks identified in a remedial action
Cooperative Agreement. EPA did change
I 35.6595(b)(4) by deleting subparagraph
(ii). Subparagraph (i) remains unchanged
in the Final Rule and references the
Department of Labor regulations on the
Davis-Bacon Act and other labor
tandards provisions.
Questions have been raised
concerning the applicability of the
Davis-Bacon Act to the excavation and
incineration of toils (or other forms of
treatment). The Davis-Bacon Act applies
to that portion of the cleanup work (as
defined in the remedy (election
document] which calls for excavation, *
substantial earth moving, removal of
contaminated soil, and the actual
mobilization of the incinerator followed
by restoration of the landscape,
regardless of whether such activities are
performed with any other construction
activities done on any buildings or other
structures at the cleanup site. The
operation of the incinerator, including
materials handling, may be classified as
ervice type work.
The term "landscaping" includes not
only such activities as planting trees.
shrubs, and lawns when performed in
conjunction with other construction
work (e.g.. the erection of a building or
other structure), but also elaborate
landscaping activities such as
substantial earth moving and/or
rearrangement or reclamation of the
terrain.
Site clearing, when performed as part
of demolition work or the dismantling of
buildings or other structures, is subject
to the Davis-Bacon Act if the clearing of
the site is to be followed by the
construction of a public building or
public work at the same location, if no
further work at the site is contemplated,
the Davis-Bacon Act does not apply to
such demolition or dismantling.
Section 35.60151 a)(24)
Intergovernmental Agreement
Final Rule: In order to clarify that
such an agreement is not a "contract" as
defined in this rule, EPA recognized the
need to include in the rule a definition of
the term "intergovernmental
agreement." Therefore, a definition of
"intergovernmental agreement" has
been added to the rule.
Section 35.6015(o)(28) Operable Unit
Issue: EPA now requires recipients to
budget and account for funds by
operable unit, as applicable.
Final Rule: EPA added a definition of
the term "operable unit" to the rule, and
has made reference to operable units
throughout the rule where applicable.
The definition found in the rule is
consistent with that found in the NCP.
Section 35.601 S(a)(29) Operation and
Maintenance (Q&M)
Issue: EPA received several comments
asking for clarification of this definition.
The respondents noted that although
O&M is not included in the definition of
"activity." the definition in the Interim
Final Rule implies that it is an activity.
One respondent suggested adding O&M
to the definition of activity to address
this issue. Others requested clarification
as to when O&M begins and what
measures it involves.
Final Rule: EPA is responding to the
above comments by clarifying the
definitions of both "activity" and
"O&M." At | 35.6015(a)(l), the definition
of activity has been revised to
emphasize that a set of tasks constitutes
an activity only if those tasks are funded
by CERCLA. Since O&M is the
responsibility of the State and is not
funded by CERCLA, the definition of
O&M has been revised to remove any
reference to activities. O&M is financed
by CERCLA on behalf of an Indian
Tribe, thus the removal of the sentence
"O&M is the sole responsibility of the
State" from the definition.
Except ior ground water and surface
water restoration, as provided in
CERCLA section 104[c)(6), O&M, as a
final step in the remedial process, begins
when a remedy is declared "operational
and functional." A remedy becomes
operational and functional either one
year after construction is complete, or
when the remedy is determined
concurrently by EPA and the State to be
functioning properly and performing as
designed, whichever is earliest. This is a
technical determination based on
individual site characteristics and the
specifications in the Record of Decision
(ROD), and should not be addressed in
an administrative regulation. For a more
detailed explanation of O&M, including
a discussion of EPA's policy on source
control maintenance measures, see the
preamble of the NCP. Final Rule (55 FR
8666), addressing 40 CFR 300.435(f).
Section 35.6015(a)(39) Quality
Assurance Project Plan
Final Rule: EPA has revised the
definition of "Quality Assurance Project
Plan" to be consistent with the NCP.
Section 35.6015(a)(42) Services
Final Rule: This definition was
revised to delete language specifying
conditions under which "services" were
subject to the Davis-Bacon Act. (See the
discussion at | 35.6015(a)(ll) above).
Section 35.6Q15(a)(47) Superfund State
Contract (SSC)
Issue: One respondent stated that EPA
should acknowledge Superfund Tribal
Contracts in addition to Superfund State
Contracts (SSCs).
Final Rule: When an SSC is signed
between EPA and an Indian Tribe, it
may be referred to as a "Superfund
Tribal Contract." However, this
definition has not been changed.
Section 35.6015(a)(49) Support Agency
Issue: One respondent recommended
that this definition be expanded to
recognize that EPA assumes a primary
role as a support agency during a State-
lead response.
Final Rule: We agree. EPA may serve
as the support agency during a State-
lead response. The definition of
"support agency" has been revised to
acknowledge this role.
Section 35M15(o)(50) Task
Issue: One respondent said that there
has been some confusion as to what
level of detail EPA expects in the
quarterly reports. Since the level of
detail in quarterly reports is determined
by the objectives and milestones (i.e..
the tasks) enumerated in the Statement
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22998
of Work, this comment is addressed
under this subparagraph.
Final Rule: To clarify its meaning, and
to ensure consistency with the definition
of "activity," the term "task" has been
reworded as "an element of a Superfuna
response activity identified in the
Statement of Work of a Superfund
Cooperative Agreement or a Superfund
State Contract." The tasks enumerated
in a Statement of Work are negotiated
by EPA and the assistance recipients]
Using the revised definition of "task,1
the assistance recipient must report
technical and financial progress on the
objectives and milestones identified in
the Statement of Work. Since these are
negotiated objectives and milestones
reporting progress on their
accomplishment should not be
unexpected.
Section 35.6015(b) Definitions
Issue: This paragraph of the Interim
Final Rule did not include a reference to
definitions found in CERCLA, as
amended, or the NCP.
Final Rule: This paragraph has been
revised to state that if a term is not
defined in § 35.6015, it is to be
understood as defined in section 101 of
CERCLA, as amended, 40 CFR part 31
and 40 CFR part 300 (the NCP).
Pre-remedial Response Cooperative
Agreements
Section 35.6050 Eligibility for Pre-
remedial Cooperative Agreements
Issue: CERCLA § 104(d)(I) gives EPA
the authority to enter into Cooperative
Agreements with political subdivisions.
However, before funds can be obligated
a three-party SSC must be signed
between the State, EPA, and the
political subdivision. At the preremedia'
stage, this is an unnecessary
administrative burden and should
preclude most political subdivisions
from any formal involvement with EPA
Moreover, the preliminary* assessment/
site investigation (PA/SI) may show that
further action is not needed, or that site
conditions do not require listing on the
NPL. Given these circumstances,
efficiency in the Superfund program
would be maintained only if political
subdivisions were not eligible for pre-
remedial Cooperative Agreements
Nonetheless, under those
circumstances where the involvement of
a political subdivision would be more
economical, efficient, and appropriate
than that of a State, based upon the
number of sites to be addressed and the
political subdivision's past program
involvement, it may be more productive
to allow the local government to earn-
out preliminary- actions. In
instances, a pre-remedial Cooperative
Agreement should be awarded;
however, an SSC is not required at this
stage. If the PA/SI shows that listing on
the NPL is necessary, the political
subdivision mus* enter into a three-party
SSC before any remedial activities
begin.
Final Rule: This section has been
revised to state that political
subdivisions may also apply for pre-
remedial response Cooperative
Agreements.
Section 35.6055 State-lead Pre-
remedial, Cooperative Agreements
Final Rule: Executive Order 12549 and
40 CFR part 32 require applicants for
Federal assistance agreements to certify
that they are not debarred or suspended
from participating in government
procurement and nonprocurement
programs. The Drug-Free Work Place
Act of 1966 requires applicants to certify
that they will maintain a drug-free
workplace. Finally, section 319 of Public
Law 101-121 requires applicants for any
Federal award in excess of $100,000, to
certify that no appropriated funds will
be used to pay for lobbying efforts
directed toward the government. EPA
recognized the need to include in the
Final Rule a revised list of all items,
including these certifications, which
must accompany an application for
CERCLA-funded Cooperative
Agreements. Paragraph $ 35.6055(a) is
revised to list the items that must be
submitted with an application for a pre-
remedial Cooperative Agreement. The
requirement in the Interim Final Rule
with respect to intergovernmental
review has been removed since it is a
standard part of the "Application for
Federal Assistance" (SF-424), and
therefore does not require specific
mention.
Remedial Response Cooperative
Agreements
Section 35.6105(a) Remedial
Application Requirements
Final Rule: EPA has revised the Final
Rule to include a list of all items,
including the certifications discussed at
| 35.6055 above, which must accompany
an application for a remedial
Cooperative Agreement. The
requirement in the Interim Final Rule
with respect to intergovernmental
review has been removed since it is a
standard part of the "Application for
Federal Assistance" (SF-424), and
therefore does not require specific
mention
Section 35.6105(a)(l)(i) Budget Sheets
Issue: EPA recently made a policy
decision that, as negotiated in a
Cooperative Agreement, all cost
accounting is to be done not only by site
and activity, but by operable unit as
well.
Final Rule: This subparagraph is
renumbered $ 35.6105(a)(l) and is
revised to account for operable units.
Similar changes have been made at the
following sections: 45 35.6270(a)(l),
35.6270(a)(6)(i);35.6270(a)(6)(ii);
35.6260[b)(l); 35.6300(a)(3)(i];
35.6315(c)(2)(iii);35.6315(cK3)(ii);
35.6320(a); 35.6320(b); 35.6660(a)(l)(iii),
35.6700(a); and 35.6700(c)(7).
Section 35.6105(a)(l)(ii) A site-specific
Statement of Work
Issue: One respondent stated that the
task-specific cost reporting requirements
in the Interim Final Rule at
{{ 35.6105(a)(l)(ii), 35.6650(b)(3] and
35.6910 (which cross-references
tS 35.6105(a)(l)(ii) and 35.6650(b)(3))
add a burdensome additional level of
detail to the financial recordkeeping
requirements of the Superfund program.
Final Rule: (This subparagraph is
renumbered § 35.6105(a)(2)(ii).} EPA
does not agree with the above comment.
The estimate by task required in a
Statement of Work occurs at the
application stage of a Cooperative
Agreement and provides an outline of
the costs expected at a particular site. It
is not used to track actual costs that
accrue during a response activity.
Quarterly progress reports serve as
internal mechanisms that allow EPA to
keep recipients "on track" with respect
to expenditures by task. EPA believes
that the estimates by task in the
Statement of Work and in Quarterly
Progress Reports are good project
management practices. Therefore,
although i 35.6105(a) has been
reorganized, the task-specific cost
reporting requirements have not been
changed.
Section 35.6105(o)(5)
Issue: One respondent requested that
EPA allow States to approve contractor
prepared site-specific quality assurance
project plans, as long as the recipient's
quality assurance standards and review
procedures comply with the quality
assurance requirements described in
EPA policy and guidance.
Final Rule: (This subparagraph is
renumbered 5 35.6105(a)(2)(vi)). Except
for minor wording changes, the rule has
not been changed This is to ensure
consistency with the NCP. which
generally provides for EPA review and
approval of site-specific quality
-------
assurance project plans. However, as
noted in the preamble of the NCP (see
preamble of the NCP, Final Rule,
addressing 40 CFR 30Q.420(c)(4)),
portions of the quality assurance project
plan may incorporate by reference non-
site-specific standardized portions (i.e.,
standard operating procedures] of
previously approved plans, making it
unnecessary to reproduce non-site-
specific quality assurance procedures
for every site.
Section 35.6W5(b) CERCLA
Assurances
Section 35.6105(b)(3) Off-site Storage,
Treatment, or Disposal
Final Rule: This subparagraph has
been clarified and renumbered
§ 35.6105(b)(4).
Section 35.6105(b)(4) Real Property
Acquisition
Issue: EPA received several comments
suggesting that the property acquisition
assurance be clarified.
Final Rule: (This subparagraph is
renumbered $ 35.6105(b)(5).) EPA
revised this subparagraph to better
explain when and by whom real
property will be acquired with CERCLA
funds. This subparagraph has also been
revised to indicate that the recipient
must ensure the continuation of any
institutional controls which restrict the
use of the property.
Section 35.6310 Indian Tribe-lead
Remedial Cooperative Agreements
Section 35.6110(b)(2)
Issue: One respondent stated that an
Indian Tribe whose lands are held in
trust by the Federal government may not
be in a position to provide this
assurance, or may require the approval
of the Department of the Interior to do
so.
Final Rule: EPA recognizes that under
certain circumstances obtaining the real
property acquisition assurance from an
Indian Tribe may not be possible. For
this reason, the words "to the extent of
its legal authority" qualify the
requirement of this assurance wherever
it applies to Indian Tribes in the Final
Rule. EPA will address on an individual
basis the proper application of he
CERCLA section 104(j) assurance in the
extreme case wherein an Indian Tribe
lacks such authority. This subparagraph
has also been revised to indicate that
the recipient must ensure the
continuation of any institutional
controls which restrict the use of the
property.
Section 35.6115 Political Subdivision-
lead Remedial Cooperative Agreements
Section 35.6115(a] General
Final Rule: EPA recognized the need
to indicate in this paragraph that a
political subdivision may enter into a
Cooperative Agreement to assume the
lead responsibility for all, or a portion,
of the remedial activity at a site. This
paragraph has been revised accordingly.
Section 35.6115(0.) Three-party
Superfund State Contract Requirements
Final Rule: (This paragraph is
renumbered 5 35.6115(b).) EPA
recognized the need to clarify that the
CERCLA section 104 assurances must be
provided in the SSC before a
Cooperative Agreement is awarded to a
political subdivision. This paragraph has
been revised accordingly.
Section 35.6115(c) Political
Subdivision Cooperative Agreement
Requirements
Final Rule: EPA recognized the need
to clarify the application and
administrative requirements set forth in
this paragraph. This paragraph has been
revised accordingly.
Section 35.6120 Twenty-year Waste
Capacity
Issue: This section of the Interim Final
Rule describes the 20-year waste
capacity assurance that must be
provided before EPA will enter into a
Cooperative Agreement for remedial
action pursuant to CERCLA section
104(cU9). EPA received several
comments on this section. One
respondent said that the rule should
clarify that the 20-year capacity is dated
from the signing of the "State capacity
assurance Cooperative Agreement*1
(sic), not the "site-specific Cooperative
Agreement."
Final Rule: The 20-year waste
capacity requirement is incorporated
into I 35.6105(b)(3) and other sections of
the Final Rule, as appropriate. This
assurance is site-specific for each
remedial action. The State must provide
this assurance in a Cooperative
Agreement before initiating the remedial
action. Where CERCLA section 104(c)(9)
states that "the President shall not
provide any remedial actions pursuant
to this section unless the State in which
the release occurs first enters into a
contract or Cooperative Agreement with
the President providing [the 20-year
waste capacity assurance] * * *," the
referenced contract or Cooperative
Agreement is either a Superfund State
Contract or a Superfund Cooperative
Agreement.
The 20-year waste capacity assurance
must be provided for each remedial
action Cooperative Agreement or
Superfund State Contract signed before
remedial action begins at an NPL site.
This assurance may be provided through
reference to a State's Waste Capacity
Plan, development of which can be
funded through a Core Program
Cooperative Agreement, and which
should be developed in compliance with
EPA policy (See OSWER Directive
9010.00A, "Agency Review of SARA
Capacity Assurance Plans") and
{ 300.510 of the NCP. EPA will
determine whether the State's assurance
is adequate.
Final Rule: Notification of the out-of-
state or out-oMndian Tribal jurisdiction
transfer of CERCLA wastes. Section
35.6120 of this Final Rule contains the
new requirement of a written
notification of the out-of-State transfer
of CERCLA waste. Based upon its
experience to date, EPA believes that
remedial and non-time-critical removal
actions involving out-of-State transfer of
CERCLA waste may present special
concerns for the particular State
designated to receive such waste. EPA
further recognizes that the safe and
timely accomplishment of these out-of-
State actions may require direct
assistance from State or local
authorities.
For these reasons, as soon as
practicable following the award of a
contract for the out-of-State transfer of
CERCLA waste that exceeds 10 cubic
yards in total volume, the recipient of a
remedial Cooperative Agreement is now
required to notify the designated
receiving State (i.e., the State Superfund
program office, State environmental
agency director] of the name and
location of the facility to which the
CERCLA waste is to be shipped, the
type and quantity of CERCLA waste to
be shipped, the expected schedule for
the shipments, and the method of
transportation. Such notification must
be in writing, and will enable the
receiving State to obtain from its
permitted facilities any other
information it may need in order to
support the out-of-State action.
This notification requirement applies
f f
to States, Indian Tribes and political
subdivisions that have the lead for a
remedial action. When EPA has the lead
for a response action, EPA will notify
the appropriate official(s) consistent
with OSWER directive 9320.07,
"Notification of Out-of-State Shipment
of Superfund Site Wastes/1 Depende
upon State involvement as a support
agency, the State may provide the
notification on behalf of EPA.
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Federal Register / Vol. 55, No. 108 / Tuesday, June 5, 1990 / Rules and Regulations
Enforcement Cooperative Agreements
Section 35.6150 Eligibility for
Enforcement Cooperative Agreements
Issue: One respondent asserted that
Indian Tribes should be eligible for
enforcement Cooperative Agreements,
pursuant to CERCLA section
Final Rule: (This paragraph is
renumbered § 35,6145.) In the Interim
Final Rule at 40 CFR part 35, subpart O,
EPA did not provide for political
subdivision- or Indian Tribal-lead
involvement in CERCLA enforcement
actions through enforcement
Cooperative Agreements. However,
political subdivisions and Indian Tribes
were afforded the opportunity to
participate in EPA negotiations with
potentially responsible parties for
actions that relate to land under the
jurisdiction of the local (political
subdivision) or Tribal government, or
that directly impact such land; in these
cases, the political subdivision or Indian
Tribe could receive funding through a
support agency Cooperative Agreement.
In addition, political subdivisions or
Indian Tribes could apply for funding
through an enforcement Cooperative
Agreement under an official deviation
from the rule.
Under CERCLA section 104(d)(l)(A).
political subdivisions and Indian Tribes
may apply for enforcement Cooperative
Agreements, and enter into such
agreements if the local government or
Tribe is capable of carrying out
enforcement actions. EPA has modified
the Final Rule to clarify this. However,
before entering such an agreement, EPA
must determine an applicant's eligibility
fo enter into an enforcement
Cooperative Agreement. The Final Rule
at § 35.6145 requires a description and
demonstration of authorities,
jurisdiction, and implementation
capabilities. The full extent of these
requirements will depend upon the
scope of the enforcement Cooperative
Agreement,
For example, if the State were to seek
an enforcement Cooperative Agreement
for an action to compel remedial action,
EPA would consider the liability scheme
(parties liable, strict and joint and
several liability, limited defenses, the
absence of a requirement for a showing
of irreparable injury, administrative
record review on an arbitrary and
capricious standard, etc.), past State
actions, State technical and legal
capabilities, the relationship of the site
or operable unit to other sites or
operable units, other implementation
concerns, as well as the priority of
funding this action in light of other
potential expenditures If the
enforcement Cooperative Agreement
were designed to enable the State to
obtain access to a site, different and
more narrow requirements would be
considered. The eligibility criteria for all
future enforcement Cooperative
Agreements (including those entered
into by political subdivisions and Indian
Tribes) are very similar to those set
forth for States in OSWER Directive
9831.6, "CERCLA Funding of State
Enforcement Actions at National
Priorities List Sites."
This section has been renumbered
S 35.6145 and has been revised to
indicate that States, political
subdivisions and Indian Tribes may
apply for enforcement Cooperative
Agreements.
EPA added a new section at 5 35.6150
of the Final Rule, "Activities eligible for
funding under Enforcement Cooperative
Agreements," to indicate the activities
eligible for funding under enforcement
Cooperative Agreements. Fundable
tasks that comprise the enforcement
activities listed in § 35.6150(a) are set
forth in current EPA enforcement policy.
Issue: The issue arose whether States
may receive enforcement Cooperative
Agreements to interact with Federal
facilities.
Final Rule: This rule does not address
whether States may receive enforcement
Cooperative Agreements to interact with
Federal facilities. The eligibility of State
involvement with Federal facilities will
be addressed in future guidance.
Removal Response Cooperative
Agreements
Section 35.6200 Eligibility for Removal
Cooperative Agreements
Final Rule: EPA has clarified language
to differentiate removals based on the
planning period, rather than on a "time
critical" vs. "non-time-critical" basis.
The policy regarding roles States and
Indian Tribes may assume during a
removal has not changed.
Section 35.6205 Remo val Cooperative
Agreements
Final Rule: EPA has revised this
section to indicate that, when a removal
action is necessary and involves the out-
of-State shipment of CERCLA wastes,
and when, based on the site evaluation,
the lead agency determines that a
planning period of more than six months
is available before the removal activities
must begin, the lead agency must
comply with the out-of-State notification
requirement set forth for States at
§ 35 6120.
Financial Administration Requirements
Under a Cooperative Agreement
Section 35.6250 Standards for
Financial Management Systems
Issue: One respondent stated that EPA
should expand site- and activity-specific
obligations, drawdowns, and reports to
include operable units. Since the EPA
Regions must provide information by
operable unit to EPA Headquarters,
assistance recipients should also
provide information to the Regions in
this manner. Another respondent stated
that reporting and tracking of funds at
the operable unit level would be
burdensome to the recipient and the
EPA grants processing office, since
formal amendments would be required
to transfer funds from one operable unit
to another.
Final Rule: (This section is
renumbered § 35.6270.) Recipients of
Federal funds are accountable for the
use of these monies and must provide
EPA with regular reports on the
associated expenditures. With the
promulgation of this Final Rule, the
recipient and EPA Region, in negotiating
a Cooperative Agreement, must agree to
track costs and activities by site,
activity, and operable unit, as
negotiated in the Cooperative
Agreement. The level of detail in reports
should be comparable to the tasks
specified in the Statement of Work and
funds obligated for these tasks through
the Superfund Cooperative Agreement.
This section is revised to incorporate
references to operable units, where
applicable, and to reflect the removal of
recipient contractor requirements to
J 35.6550(b)(4).
Whenever appropriate, EPA
integrated the requirements of the Core
Program throughout the regulation,
rather than include all requirements in a
specific section on the Core Program.
Subparagraph f 35.6270(a)(4) is added to
state the financial management
requirements for the Core Program.
Section 35.6250(b)(l) Recordkeeping
System Standards
Issue: EPA received comments from
some recipients who consider this rule's
recordkeeping requirements too
restrictive.
Final Rule: (This subparagraph is
renumbered § 35.6270(b)(l).) Given
CERCLA's mandate to ensure (he proper
management of the Trust Fund and to
support cost recovery efforts, EPA does
not believe that its cost documentation
requirements are excessive.
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Section 35.6250(b)(2) Recordkeeping
System Standards
Issue: One respondent stated that 30
days may not be enough time to retrieve
some records, such as employee time
records, since such information is not
filed by site.
Final Rule: (This subparagraph is
renumbered § 35.6270(b)(2).)
Documentation of costs incurred and
technical progress at a site is required
by EPA to present to attorneys for a
Potentially Responsible Party. This
documentation is required within a
specified time period following the
formal filing of litigation to recover
costs. Assistance recipients must
provide the necessary site-specific
documentation to EPA upon request to
support the cost recovery activities
mandated by CERCLA. A State or
Indian Tribe may apply for a Core
Program Cooperative Agreement to fund
the development of recordkeeping
systems that enable the prompt delivery
of site documentation. We realize that
the 30 day period may not be sufficient
time for a recipient to provide the
necessary cost documentation.
Therefore, we changed the requirement
to state that, if both EPA and the State
agree, the 30 day time period may be
changed as long as the agreed upon time
frame is in the Cooperative Agreement.
Sect/on 35.6255 Period of A variability
of Funds
Issue: One respondent said that a
State should be reimbursed expenses
even if the State entered into a
Cooperative Agreement after incurring
costs at a si'e (i.e. pre-award costs). The
respondent noted that the planning
activity often begins long before the
Cooperative Agreement is finalized, and
suggested that the actual expenses
should be reimbursed through a
deviation of Subpart O when the
Cooperative Agreement is complete.
Final Rule: (This section is
renumbered § 35.6275.) This section
does not provide for the reimbursement
of pre-award costs. This helps EPA to
ensure that all remedial activities
carried out at a site are consistent with
EPA's clean-up standards. However, this
section is revised to allow recipients to
incur costs between the date the award
official signs the assistance agreement
and the date the recipient signs the
agreement, provided the costs are
identified in the agreement and the
recipient does not change the
agreement.
Section 35.6260 Cost Sharing
Final Rule: This section has been
deleted from the rule. Cost sharing
requirements have been incorporated in
other sections of the rule, as
appropriate.
Section 35,6265 Payments
Section 35.6265(b) Payment Method
Issue: One respondent said that
because some recipients are not eligible
for payment by Letter of Credit, these
recipients should be allowed to use the
"working capital" advances allowed by
40CFRpart31.
Final Rule: (This paragraph is
renumbered § 35.6280(b).) EPA agrees
with the above comment and has added
subparagraph § 35.6280(b)(3) "Working
Capital Advances" to this section,
Section 35.6265(b)(l) Letter of Credit
Issue: One respondent asked whether
recipients should be able to drawdown
funds in an enforcement Cooperative
Agreement for PRP searches and
issuance of notice letters on a non-site-
specific basis and provide site-specific
reports on such drawdowns at a later
date. A second respondent asserted that
it is not appropriate to require recipients
to report drawdowns by site and
activity for cost recovery purposes,
since the Financial Status Reports
(FSRs) and Letters of Credit provide
EPA with the assurance that funds were
expended appropriately.
Final Rule: (This subparagraph is
renumbered { 35.6260(b)(l).) In all cases,
funds must be drawn down in the
manner negotiated and stipulated in the
Cooperative Agreement. For cost
recovery purposes, it is necessary that
funds be drawn down on a site, activity,
or operable unit-specific basis (pre-
remedial and Core Program costs can be
drawn down on an activity-specific
basis).
Section 35.6270 Recipient Payment of
Response Costs
Final Rule: EPA recognized the need
to clarify that CERCLA credits earned
on a site-specific basis may not be used
to meet cost-share requirements for non-
site-specific funding through the Core
Program. This section is renumbered
and subparagraph § 35.6265(c)(3) is
revised accordingly.
Section 35.6270(d) Over Match
Final Rule: EPA recognized the need
to clarify how the rule will handle "over
match" funds. This section is
renumbered $ 35.6285 and paragraph
$ 35.6285(d) is added to the rule to
clarify EPA's requirements accordingly.
Section 35.6270(e) Advance Match
Final Rule: EPA recognized the need
to clarify how the rule will handle
advance match funds, and to indicate
i
that advance match may not be ui
credit against cost-share obligations
under the Core Program. This paragraph
is renumbered § 35.6265(f) and is revised
accordingly.
Personal Property Requirements Under a
Cooperative Agreement
Section 35.6300 General Personal
Property Acquisition and Use
Requirements
Section 35.6300(a}(2) General
Issue: One respondent recommended
that the wording of this subparagraph be
changed to state that the property must
be "requisitioned" during the approved
project period, not "acquired," The
respondent said that the bid and
procurement procedures stipulated by
the regulation are so time-consuming
that sometimes the property is received
after the project period has expired.
Final Rule: Use of the term
"requisitioned" would allow property to
be ordered, but not necessarily received,
during the project period. But equipment
ordered as part of a remedial response
must be equipment that is necessary to
complete the project. If a piece of
property has not arrived by the end of
the project, this indicates that the
remedial action is not complete.
so, the recipient should amend thJ
agreement to provide for a no-cost
extension to the period of performance.
This subparagraph has not been
changed.
Section 35.6315 Alternative Methods for
Obtaining Property
Section 35.6315(a) Purchase Equipment
With Recipient Funds
Issue: One respondent stated that the
option of the recipient using its own
funds to purchase equipment and then
charging the Cooperative Agreement a
usage rate is not practical in that States
often lack the necessary discretionary
funds to purchase property. The
respondent said the regulation should be
more lenient about equipment
purchased with Federal funds. Another
respondent said that States should be
allowed to purchase equipment with
Core Program funds and charge costs to
specific sites via a usage rate.
Final Rule: The purchase of
equipment with State funds is an option,
not a requirement of this regulation.
Some States may prefer to acquire
equipment in this manner because they
do not have to follow EPA procurement,
property management, and disposition
requirements for property purchi
with recipient funds.
Core Program Cooperative
Agreements may not be used to
-------
purchase equipment to be used on a site-
specific basis, although the use of the
equipment for non-site-specific CERCLA
implementation activities can be
charged to the Core Program. This
paragraph has not been changed.
Section 35.6315(c)(3)(iii) Purchase
Equipment With CERCLA Funds
Issue: One respondent stated that, in
some cases, the purchase of a
transportable or mobile treatment
system may be the most cost effective
means of waste treatment. The
respondent suggested that, if a
justification can be shown, the purchase
of such systems should be allowed.
Final Rule: EPA contends that
CERCLA is not a source of capital to
purchase large-scale waste treatment
equipment. If there is a clear advantage
to the purchase of a dedicated mobile
treatment system, the purchase of such a
system could be pursued under an
official deviation from subpart O. This
subparagraph has not been changed in
response to this issue. However, EPA
added a subparagraph to discuss
equipment purchases under the Core
program.
Section 35.6320 Usage Rate
Section 35.6320(a) Usage Rate
Approval and (b) Usage Rate
Application
Issue: EPA recognized that these
paragraphs of the Interim Final Rule
regulate a recipient's contractors as well
as the recipient.
Final Rule: These paragraphs are
revised to delete references to
recipients' contractors. The
requirements recipients' contractors
must follow are found in § 35.6550. EPA
also revised these paragraphs to add
references to operable units.
Section 35.6325 Title and EPA Interest
in CER CLA -funded Property
Section 35.6325fb)(2)fj) Fixed in-place
Equipment
Issue: This subparagraph required
EPA to relinquish its interest in the title
to fixed-in-place equipment only after
the remedy was certified operational
and functional.
Final Rule. This subparagraph is
revised to provide that EPA no longer
has an interest in fixed-in-place
equipment once the equipment is
installed. Similar revisions have been
made in § 35.6815(b).
Section 35.6335 Property Management
Standards
Issue: One respondent stated that the
interests of cost recovery should not
make Superfund property management
procedures more stringent on States
than other programs and that recipients
should be able to follow their own
property management standards.
Final Rule: Superfund is a unique
Federal program due to the statutory
mandate for cost recovery. This aspect
of the program requires that the Agency
carefully control the purchase of, and
accounting for, property. Therefore, EPA
is establishing management standards
for all CERCLA-funded purchases of
property to ensure that minimum
requirements are met. If it is able, a
State may purchase the property with its
own funds and avoid EPA property
purchase, management, and disposition
requirements.
This section is revised to delete the
reference to recipients' contractors. The
requirements for recipients' contractors
are found in § 35.6550.
Section 35.6340 Disposal of CERCLA-
funded Property
Issue: One respondent stated that the
property disposition procedure outlined
in the regulation "is time-consuming and
costly. The government must be
receptive to providing staff funding to
comply with this procedure."
Final Rule: Reasonable and necessary
expenses incurred in the effort to
comply with Superfund property
disposition requirements are allowed.
This funding can be obtained through a
site-specific Cooperative Agreement or a
multi-site Cooperative Agreement.
When such expenses are incurred for
property purchased non-site-specifically,
funding can be obtained through a Core
Program Cooperative Agreement.
Therefore, this section of the rule has
not been changed.
Section 35.6340(a)(2)(i)(B) Equipment
and Section 35.6340(b)(lJ Supplies
Issue: One respondent said that the
requirement to control disposal of
CERCLA-funded property should apply
only to an individual piece of equipment
or supplies costing over $5.000 because,
in most cases, individual items costing
less than $5,000 have little or no residual
value
Final Rule: EPA is responsible for
ensuring appropriate use of Trust Fund
monies. Expenses for equipment and
supplies contribute to the total cost-
share amount and impact the costs
sought from responsible parties.
Recipients of Fund monies must
reimburse the Fund and satisfy the
requirements of § 35.6340 as it stands.
These subparagraphs have not been
changed.
Real Property Requirements under a
Cooperative Agreement
Section § 35.6400 Acquisition and
Transfer of Interest
Section 35.6400(a)(2)
Issue: One respondent stated that this
subparagraph is in conflict with
CERCLA section 104[j)(2) where a State
is required to "accept transfer of the
[acquired] interest following completion
of the remedial action,11 not, as is stated
at § 35.6400(a)(2), "on or before the
completion of the response action
(emphasis added)." Another stated that
EPA should not acquire interest in real
property without the prior approval of
the State that will have to accept title to
such property,
Final Rule: The language at this
subparagraph of the rule was written to
achieve consistency with 40 CFR part
300 (the NCP). The term "response
action" is used in the NCP and this rule
because the term "remedial action" at
CERCLA section 104(j)(2) does not
account for removal activities.
EPA believes that it is not going
beyond the statutory language of
CERCLA to require a State*to accept
title to real property acquired by EPA as
part of a response action "on or before"
completion of that response action,
since the option is left open for the State
to accept title to the property on
completion of the response action.
Furthermore, since the State participates
in the drafting of the Record of Decision
(ROD) and signs the Cooperative
Agreement, the State will know at that
point what properties are to be acquired
by EPA as part of the response action. In
addition, while the State must either
acquire the interest itself or accept
transfer of the interest from EPA, the
State may pass title of that interest to
another entity (e.g., a political
subdivision) if the State so chooses
pursuant to { 35.6105(b)(5). This may
occur during implementation of the
response action or thereafter. For a more
detailed discussion of this issue see the
preamble of the NCP (55 FR 8666) where
{ 300.510(f) is discussed. This
subparagraph has not been changed in
response to the above comments.
Section 35.6550 Procurement System
Standards
Section 35.6550(a)(3)(ii)
Final Rule: EPA decided to clarify
how much time the recipient must allow
between the end of the public notice of
the project and the deadline for receipt
of bids or proposals. Subparagraph
35.6550(a)(3)(ii) has been deleted. This
change makes all recipients subject to
-------
the public notice requirements in
| 35.6555(d) which provides, in part, that
if its procurement system is not certified,
the recipient must allow sufficient time
(generally 30 calendar days) between
public notice of the project and the
deadline for receipt of bids or proposals.
Section 35.6550(a)(6) Completion of
Contractual and Administrative Issues
Final Rule: To better present the
contractual and administrative
requirements for which the recipient is
responsible, EPA listed each
requirement separately in this
subparagraph. No new requirements
were added to this section.
Section 35.6550(a)(ll)
Intergovernmental Agreements
Issue: One respondent requested that
EPA specifically include Indian Tribal
governments in this subparagraph which
encourages intergovernmental
agreements for procurement and use of
common goods and services. EPA also
identified the need to clarify when
procurements under intergovernmental
agreements are subject to these
requirements.
Final Rule: Applicability of this
subparagraph to Indian Tribes has been
clarified in the Final Rule by removing
the exclusive reference to "State and
local intergovernmental agreements."
This subparagraph also is revised to
make it clear that the intergovernmental
agreement itself is not subject to the
procurement requirements in this
subpart, but that any funds expended
under the intergovernmental agreement
{i.e., pass through funds) are subject to
these procurement requirements. This
subparagraph also is revised to indicate
the circumstances under which EPA
procurement requirements do not apply.
Section 35.6550fb) Contractor
Standards
Final Rule: Section 35.6550(b) has
been revised to reflect changes in EPA
procurement procedures, which are the
result of findings in the report entitled
"A Management Review of the
Superfund Program ' commissioned by
EPA Administrator William K. Reilly in
June of 1989.
Section 35.6550(b)(l) Disclosure
Requirements Regarding Potentially
Responsible Party Relationships
Final Rule: This subparagraph has
been revised to read: "The recipient
must require each prospective
contractor to provide with its bid or
proposal:
(i) Information on its financial and
business relationship with all PRPs at
the site and with the contractor's parent
companies, subsidiaries, affiliates,
subcontractors, and current clients at
the site. Prospective contractors under a
Core Program Cooperative Agreement
must provide comparable information
for all sites within the recipient's
jurisdiction. (This disclosure
requirement encompasses past financial
and business relationships, including
services related to any proposed or
pending litigation, with such parties.)"
Section 35.6550(b)(2)(i) Conflict of
Interest Notification
Final Rule: Because EPA does not
have a contractual relationship with the
recipient's contractors, this
subparagraph is revised to clarify that
the recipient is responsible for its
contractor's compliance with this
requirement.
Section 35.6550(b)(2)(ii) Contract
Provisions
Issue: One respondent suggested that
the words "or more stringent
requirements" be added to the language
stipulating clauses to be contained in a
contract.
Final Rule: The recipient may include
in a contract requirements more
stringent than those set forth in this
subparagraph. However, EPA will not
pay for any additional costs to comply
with requirements that go beyond those
found in this regulation. EPA has not
changed the rule in this respect.
Section 35.6550(b)(4)
Final Rule: This subsection specifies
sections of the regulation for which the
recipient is responsible for contractor
compliance.
Section 35.6555 Competition
Section 35.6555(b)(2) Indian Tribes
Issue: One respondent urged EPA to
clarify the phrase "if the project benefits
Indians" included in this subparagraph
to indicate when it is necessary to
comply with the Indian Self-
Determination and Education
Assistance Act of 1975.
Final Rule: The phrase "if the project
benefits Indians" found at
§ 35.6555(b)(2) of subpart O follows
closely the language used in section 7(b)
of the Indian Self-Determination and
Education Assistance Act. While EPA
will implement subpart O consistent
with this Federal statute, subpart O is
not the appropriate place to discuss in
detail the requirements of this Act.
Recipients of CERCLA funds should
work closely with the appropriate EPA
Regional officials to determine the
applicability of the Indian Self-
Determination and Education
Assistance Act to a specific contract or
grant. This subparagraph has not bee
changed in response to this comment
Section 35.6555(d) Public Notice
Final Rule: The first sentence of this
paragraph has been revised to clarify
the amount of time that recipients must
allow between public notice of the
project and the deadline for receipt of
bids or proposals. The public notice
requirements are now trie-same for both
certified and non-certified recipients.
Section 35.6565 Procurement Methods
Issue: One respondent suggested that
it may be appropriate to include in this
section an allowance for the use of
innovative procurement methods or
procedures if a recipient receives the
award official's prior written approval,
since this allowance was originally
provided for in Agency guidance on
Procurement Under Superfund Remedial
Cooperative Agreements and in 40 CFR
33.210(h).
Final Rule: The requirements of the
directive cited above and the regulation
at 40 CFR part 33 have been superseded
by the provisions of 40 CFR 31.36(d).
which establishes the allowable
methods of procurement. The current
regulation identifies only the four
procurement methods and does not
include innovative approaches
discussed in the earlier rule. A recipi
who wishes to use a method of
procurement that is not identified in 40
CFR 35.6565 should apply to EPA for an
official deviation from 40 CFR part 35.
subpart O.
Section 35.6580 Contracting With
Minority and Women's Business
Enterprises (MBE/WBE). Small
Businesses, and Labor Surplus Area
Firms
Final Rule: This section is revised to
encourage recipients to use Core
program funds to finance non-site
specific activities necessary to comply
with the MBE/WBE requirements.
Section 35.6585 Cost and Price
Analysis
Section 35.6585(a)(l) Cost Analysis
Issue: One respondent suggested that
a recipient should be allowed to conduct
a price analysis instead of a cost
analysis for all change orders regardless
of price.
Final Rule: In this subparagraph,
subpart O is implementing the
requirements of 40 CFR 31.36(f)(l). A
cost analysis is required for change
orders because change orders are
essentially non-competitive
procurements. Therefore, a break do
of the costs and evaluation of profit is
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Federal Register / Vol. 55, No. 108 / Tuesday, June 5, 1990 / Rules and Regulations
necessary to ensure that the final cost is
i
reasonable. This subparagraph has not
been changed.
Section 35.6590 Bonding and Insurance
Section 35.6590(b) Indemnification
Issue: One respondent asserted that
EPA should provide contractor
indemnification even if a State has its
own indemnification policy
Final Rule: EPA will agree to
indemnify a Response Action Contractor
(RAC) working for a State, political
subdivision or Federally recognized
Indian Tribe, even if that entity has
agreed to indemnify the RAC. The
proposed contractor indemnification
policy, published in the Federal Register
(54 FR 46012) on October 31,1989
addresses this issue.
Section 35.6590(c) Accidents and
Catastrophic Loss
Final Rule: This paragraph has been
revised to clarify that the recipient is
responsible for its contractors'
compliance with this requirement.
Section 35.6595(b)(4)(ii) Labor
Standards
Final Rule: See discussion at
J 35.6015(a)(ll).
Section 35.6650 Quarterly Progress
Reports
Issue: One respondent asserted that
the requirement to provide quarterly
reports that include fiscal information
adds a major workload to the Superfund
program. The respondent suggested that
EPA do away with the requirement to
provide fiscal information in quarterly
reports, and said that EPA's fiscal
information needs could be satisfied by
referencing the Letter of Credit
drawdowns.
Final Rule: The quarterly report
provisions require only estimated funds
spent without specifying the method of
estimation. These estimates do not have
to be certified by an accounting system
The purpose of requiring this
information is to document project
progress and associated spending levels
for comparison with the approved
project plan. The source of quarterly
report information should be primarily
the State project manager.
Effective project management
depends on knowing the level of project
completion and the costs associated
with that completion level. Monitoring
Letter of Credit drawdowns does not
provide EPA with the information on
technical progress and related expenses
needed to monitor progress against the
Statement of Work This section has not
been changed in response to this issue,
but EPA did revise this section to make
it clear that the quarterly progress
reports must address the . nvities as
listed in the Statement of Work.
Section 35.6650(b)(lJ Content for Pre-
remedial. Remedial, Enforcement, and
Removal Progress Reports
Final Rule: This subparagraph has
been revised to address the quarterly
progress reporting requirements for all
activities and for Core program and
support agency Cooperative
Agreements.
Section 35.6665 Procurement Reports
Section 35.6665(a) Reports for the
Department of Labor (DOL)
Issue: One respondent stated that
reporting each construction contract
award that has, or is expected to have,
an aggregate value of over $10,000
within a 12-month period to the
Department of Labor Regional Office of
Compliance is a burdensome
requirement.
Final Rule: The procurement reports
required by § 35.6665(a) are mandated
by the Department of Labor. EPA does
not have the authority to remove such a
requirement from the rule. This
paragraph has not been changed.
Section 35.6665(c) Minority and
Women's Business Enterprises (MBE/
WBEs]
Issue: One respondent recommended
that EPA add the provisions of CERCLA
section 105(f) to subpart O.
Final Rule: (This paragraph is
renumbered 5 35.6665(b).) The
requirements of CERCLA section 105(f)
establish that the President must
consider the availability of qualified
minority firms in the award of contracts
and shall include information on the
participation of minorities in such
contracts in any annual reports to
Congress. The first intention of CERCLA
section 105(f) is met by the requirement
in § 35.6580 regarding the use of MBE
firms. The second intention is
implemented in the revised
subparagraph $ 35.6665(b)(l) and the
new subparagraph $ 35.6665(b)(2) of this
Final Rule.
Section 35.6670 Financial Reports
Section 35.6670(b)(2)fi) Reporting
Frequency
Issue. One respondent suggested that
subpart O should allow flexibility
regarding the filing dates for annual
Financial Status Reports (FSRs).
Final Rule: This subparagraph has
been revised to clarify when FSRs are
due. The substance of the requirement
has not changed.
Records Requirements under a
Cooperative Agreement
Section 35.6700 Project Records
Final Rule: EPA realizes that the
relationship between the project records
addressed in this section and the
administrative record required by
section 113 of CERCLA was not clearly
defined in the Interim Final Rule. To
distinguish between the official
administrative record and the project
record requirements in this subpart. EPA
added a sentence to this section to
clarify that subpart O does not address
the official administrative record. This
paragraph also has been changed to
address maintaining records by
operable unit, as applicable.
Section 35.6700(c) Property Records
Issue: One respondent asserted that
the requirements of this paragraph
exceed the requirements in 40 CFR part
31, and are not necessary for cost
recovery.
Final Rule: The property record
requirements in this subpart, although
they do exceed the requirements in part
31, are necessary to ensure the proper
administration of the Trust Fund and to
facilitate cost recovery. Development of
property records systems to comply with
these requirements are a fundable cost
under a Core Program Cooperative
Agreement.
Section 35.6705 Records Retention
Issue: Several respondents asserted
that EPA should pay for record storage
costs, and that other storage media
should be addressed, e.g., laser storage.
Others said that if EPA is going to allow
microfilming of records, recipients
hould not have to get EPA approval to
destroy records.
Final Rule: EPA recognizes that the
cost of maintaining records can be very
high. While the project is underway, the
recipient may charge site-specific
storage costs to the site. Recipients may
use Core program funds to finance
records storage after the project is
complete. Recipients should consider
adding these costs to their indirect cost
rates. Even though microform is
available, EPA still needs to approve the
destruction of any original records. This
is necessary so as not to jeopardize cost
recovery activity. This section has not
been changed in response to the above
comments.
Section 35.6705(b) Length of Retention
Period
Issue: One respondent stated that the
ten-year record retention requirement is
excessive, and that recipients should be
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allowed to give records to EPA when the
recipient no longer needs them Another
respondent recommended that EPA add
a time frame to the rule within which
audits must take place after submission
of final FSRs; otherwise, EPA could
effectively increase the retention period.
Final Rule: EPA revised this
paragraph to state that the 10-year
record retention period is required
unless the EPA Award Official
determines otherwise. This allows for
circumstances when EPA knows that no
PRP is forthcoming and that records
retention is not necessary.
Superfund State Contracts
Section 35.6800 General
Issue: One respondent stated that
requiring executed SSCs before EPA
initiates a remedial action delays the
h
start of such actions up to two months
Final Rule: When the Stale is not the
lead agency for a response action, the
State must still provide its CERCLA
section 104(c) assurances in an SSC
before EPA can obligate Trust Fund
monies for the remedial action. Delays
while an SSC is being developed are a
management problem that should be
addressed earlier in the process
Procurement activities through the bid
process and up to the contract award
may be considered part of remedial
design rather than remedial action.
Therefore, all such actions can proceed
before the SSC is in place. This section
has not been changed in response to this
comment
Section 35.6805 Contents of an SSC
Issue: Subpart O stresses that the
cost-share provisions of the SSC must
include an estimate of the total project
costs and payment terms as negotiated
by the signatories of the SSC. One
respondent noted that, m some cases,
the SSC may need to be amended during
remedial action to reflect actual costs
(See 5 35.6805(j)(3)). The respondent
recommended the inclusion of a
reconciliation clause in this section to
ensure that the SSC reflects actual costs.
One respondent objected to the
language in subparagraph $ 35.6805(i)(4)
and asserted that EPA should be
responsible for securing and controlling
site access.
Fjnal Rule: Section 35.6805 has been
expanded and revised to clarify the
requirements under an SSC, and now
contains at § 35.6605(k) a requirement
for a reconciliation provision
In addition, J 35.6805(j) "Cost-share
conditions" has been revised to clarify
State cost-share requirements. Previous
negotiations of State cost-share
obligations sometimes included EPA's
own intramural costs as part of the total
project cost to be shared by the State.
However, it was never EPA's intention
that States share project costs to the
same extent as PRPs (for whom the term
"total project cost" means all costs
incurred at the site, including EPA's
intramural costs). States are heretofore
required to cost-share only those direcl,
extramural costs incurred at the site.
Finally. EPA's policy has been that
States are expected to obtain access to
sites for both State-lead and Federal-
lead activities in order to expedite the
response process. EPA will acquire site
access only if the State cannot do so.
Section 104(e)(3) of CERCLA authorizes
EPA and its representatives, including
contractors for CERCLA-funded
response activities, to enter "any vessel
facility, establishment, or other place or
property where any hazardous
substance" may be or has been found, or
where entry is needed to determine the
need for response or to effectuate a
response action under CERCLA.
Consistent with section I04(c) of
CERCLA, it has been EPA's policy that
States acting under a Superfund
Cooperative Agreement or an SSC may
also use this authority. States may seek
this authority through either a lead or
support agency Cooperative Agreement.
in the absence of such agreements.
Slates must use their own authorities to
gain access.
Section 35.6615 Aministrative
Requirements
Section 35.6815(d)(2) Political
Subdivis ion -lead
Issue: Some States have requested
that the rule require political
subdivisions that have the lead in a
remedial action to provide the State
with a copy of all reports which the
political subdivision is required to
submit to EPA in accordance with the
requirements of the Cooperative
Agreement.
Final Rule: EPA concurs. The first
sentence of this subparagraph has been
revised to require the political
subdivision to submit to the State a copy
of all reports that the political
subdivision is required to submit to
EPA.
Core Program Cooperative Agreements
Section 35.6850 Eligibility for Core
Program Cooperative Agreements
Issue: Some respondents requested
clarification of the terms of eligibility for
Core Program Cooperative Agreements.
Final Rule: (This section is
renumbered $ 35.6215.) States and
Indian Tribes that qualify as States
pursuant to the requirements of the NCP
(40 CFR part 300) may apply for funding
for non-site-specific activities through
Core Program Cooperative Agreements.
EPA will enter into only one Core
Program Cooperative Agreement per
State or Indian Tribe, and only with the
single agency for CERCLA response
designated by the State Governor or by
the governing body for the Indian Tribe.
To involve other essential parties to
CERCLA response, the recipient may
enter into intergovernmental agreements
with other State agencies or non-State
entities. Examples of these parties
include the State Attorney General,
which may provide legal and
enforcement support during CERCLA
implementation, or political
subdivisions, which may ultimately
assume responsibility for CERCLA
implementation on behalf of the State.
The recipient is responsible for
disbursing funds to others who may
receive benefits from the award.
Intergovernmental agreements are not
subject to EPA approval but
procurements under these agreements
must comply with the requirements of 40
CFR part 31 and this subpart.
This section is revised to clarify
terms of eligibility for Core Pro;
Cooperative Agreements.
Section 35.6655 General
Issue: Several respondents requested
clarification both on the activities that
are eligible for Core Program funding
and on the funding levels for awards.
Some respondents felt that the previous
limitations on awards were arbitrary*.
Final Rule: (This section is
renumbered § 35.6220.) The Core
Program provides a valuable tool with
which EPA can support CERCLA
implementation activities performed by
States and Indian Tribes. EPA agrees
that additional detail is needed on the
implementation of the Core Program.
Therefore, EPA is clarifying each section
in the rule, where appropriate, to
address the Core Program, and { 35.6225
it being added to provide more
information on activities that are eligible
for funding.
EPA intends that the larger, more
flexible Core Program offered by this
Final rule will help the States to
progress toward fully operational
programs of their own. As noted above,
each State Core Program CA will be
negotiated separately with the Region.
However. States requesting increased
funding must demonstrate ti
continual improvement in thei
hazardous substance response
activities. That is. Core Program funding
should supplement, not supplant. States*
financial commitment to their own
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_ ^_^_^__^^^___^^^___- * _ ' L^^_ __ _ ^ . __ _ ^^^_^^^_^-_.^^^^^^^J- -~ _^^ . _ _
hazardous substance response
programs.
In the original EPA guidance issued on
Core Program funding in 1987, several
criteria were provided for determining
the level of awards. Since then, EPA and
the States have gained experience in
implementing the Core Program. As a
result, the Agency is revising the award
criteria to establish clearer priorities for
funding and to assist States and Indian
Tribes in assuming responsibility for
CERCLA response.
All non-site-specific activities that are
necessary to support a recipient's
Superfund program are eligible for Core
Program funding Activities will be
funded based on the availability of
funds and coordination of priorities
between EPA and the State or Indian
Tribe. A Core Program Cooperative
Agreement must be a separate
agreement and may not be written as
part of a pre-remedial, site-specific, or
support apt'ncy Cooperative Agreemen;
Section 35,686C> Application
Requirements
Final Rule: (This section is
renumbered § 35.6230.) This section has
been revised to make the application
requirements for Core Program
Cooperative Agreements consistent,
where appropriate, with those for other
Cooperative Agreements.
Section 35.6860(c) A Schedule of
Proposed Project and Budget Periods
Issue: Recipients of Core Program
Cooperative Agreements have
expressed frustration with the annual
budget periods and have requested that
EPA lengthen the allowed budget period
to provide for multi-year awards.
Respondents have asserted that a multi-
year approach would maximize
resources and increase the ability to
to
manage Superfund activities
Final Rule. (This paragraph i*
renumbered § 35.6230(c).) EPA
ecogmzes that one-year budget periods
may limit the recipient's ability to
maximize its resources and may not
encourage sufficiently long-term
planning for CERCLA implementation
activities. In an independent information
gathering effort. EPA has also identified
State difficulties in using Core Program
Cooperative Agreements to hire and
train staff given the annual project and
budget periods. Although multi-year
project periods have been allowed.
multi-year budget periods have no!
As a result, the Agency is broadening
the scope of the regulatory requirements
in § 35.6230 of this rule to'allow both
multi-year project and budget periods \\
s EPA's intent that this revision will
»ncourage the drveloprnpiv of longer
term strategies and planning by
recipients for their CERCLA
involvement. In developing applications
for Core Program Cooperative
Agreements, recipients should begin the
planning process well in advance of the
funding needs for both one-year and
multi-year awards. In particular, the
development of the Statement of Work
for multi-year projects should be
addressed during annual consultations
conducted between recipients and EPA
pursuant to { 300.515(h)(l) of the NCP.
These discussions provide an
appropriate forum for the coordination
of EPA and recipient priorities that can
facilitate longer term planning and can
enable participation in remedial
response and enforcement actions.
Once a State has entered into a Core
Program Cooperative Agreement with
EPA, the agreement may be amended
each Federal fiscal year to add funds
and to cover subsequent work under the
State's Core Program. If Core Program
funds remain at the end of a budget
period, the funds can be carried over to
the immediately succeeding budget
period.
Section 35.6665 Quarterly Progress
Reports
Final Rule: Requirements for quarterly
progress reports under the Core Program
have been incorporated into reporting
discussions throughout the rule, as
applicable. Therefore, the Final Rule
does not include a separate section for
quarterly progress reports under the
Core Program.
Section 35.6670 Cost Sharing
Issue: In implementing the Core
Program to date, EPA has received
comment from recipients that increased
funding for non-site-specific activities
could substantially increase their
involvement in all phases of CERCLA
response activities. One comment on the
Intenm Final Rule expressed concern
that the original funding level for Core
Program Cooperative Agreements was
arbitrary.
Final Rule: (This section is
renumbered S 35.6235.) The rationale for
Core Program funding levels provided to
date was contained in existing Agency
guidance and was based on the
estimated costs to address basic
program functions discussed in the
guidance. The Agency agrees, however,
that increased funding through the Core
Program could facilitate the recipient's
abilities to support a Superfund program
and to assume increased responsibility
for CERCLA co-implementation. As a
result. EPA is not establishing a limit on
Core Program Cooperative Agreement
awards in this rule so that higher levels
of funding can be awarded based on the
availability of funds and the recipient's
program needs.
In response to comments on the
Interim Final Rule, EPA has decided to
raise the cost sharing requirements for
Core Program CAs from 5 to 10 percent.
and has revised § 35.6235 accordingly.
This increase in the State match is
consistent with the 10 percent State
match required at CERLA section
104(c)(3). As with other Cooperative
Agreement cost sharing requirements.
the State may use in-kind services to
meet its share of payments under the
Core Program.
Similar to States, Indian Tribes must
provide the 10 percent cost sharing
match for Core Program Cooperative
Agreements. According to CERCLA.
Indian Tribes are exempt from making
any of the CERCLA section 104(c)(3)
assurances, which includes cost sharing.
However, the cost sharing requirements
described in the statute refer explicitly
to remedial action only. Since the Core
Program does not include funding for
any site-specific activities or remedial
actions, it is not included as an
exemption as part of the CERCLA
section 104(c)(3) assurances.
Section 35.6920 Support Agency
Cooperative Agreement Requirements
Issue: Some States have attempted to
provide the assurances required by
§ 35.6810 in a support agency
Cooperative Agreement.
Final Rule: (This section is
renumbered i 35.6250.) The support
agency Cooperative Agreement is not
the appropriate mechanism for
documenting CERCLA section 104
assurances prior to remedial action at a
site. Pursuant to 40 CFR 35.6600 and
35.6805, the Superfund State Contract is
the required mechanism for
documenting assurances prior to the
initiation of a Federal- or political
subdivision-lead remedial action These
assurances may not be provided in a
support agency Cooperative Agreement
The SSC should reference the support
agency Cooperative Agreement which is
in place concurrently with the SSC to
facilitate tracking of expenditures and
payments.
This section defines the requirements
regarding the administration of a
support agency Cooperative Agreement
The Interim Final Rule included an
editorial error in a cross-reference to the
reporting requirements that the recipient
of a support agency Cooperative
Agreement must follow. The Final Rule
has been revised accordingly
Issue: EPA requires the recipient to
attribute costs to specific sites and
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Core Program Cooperative Agreements
35.6215 Eligibility for Core Program
Cooperative Agreements
356220 General
35 6225 Activities eligible for funding under
Core Program Cooperative Agreements
35.6230 Application requirements
356235 Cost sharing
Support Agency Cooperative Agreements
35.6240 Eligibility for support agency
Cooperative Agreements
35.6245 Allowable activities
35.6250 Support agenc> Cooperative
Agreement requirements
35.6255 Cost sharing
Financial Administration Requirements
Under a Cooperative Agreement
35.6270 Standards for financial management
systems
35.6275 Period of availability of funds
35.6280 Payments
35.6285 Recipient payment of response
costs
35.6290 Program income
Persona] Property Requirements Under a
Cooperative Agreement
35.6300 General personal property
acquisition and use requirements
356305 Obtaining supplies
35.6310 Obtaining equipment
35.6315 Alternative methods for obtaining
property
35.6320 Usage rate
35.6325 Title and EPA interest in CERCLA-
funded property
35 6330 Title to federally owned properK
35.6335 Property management standards
35.6340 Disposal of CERCLA-funded
property
35.6345 Equipment disposal options
35.6350 Disposal of federally owned
property
Real Property Requirements Under i-
Cooperative Agreement
35 6400 Acquisition and transfer of interest
35.6405 Use.
Copyright Requirements Under a
Coo. ative Agreement
35.6450 General requirements
Use of Recipient Employees ("Force
Account") Under a Cooperative Agreement
35.6500 General requirements
Procunnent Requirements Under a
Cooperative Agreement
35.6550 Procurement system standards
35.6555 Competition
35.6560 Master list of debarred, suspended
and voluntarily excluded persons
35.6565 Procurement methods
35.6570 Use of the same engineer during
subsequent phases of the response
35.6575 Restrictions on types of contracts
35.6580 Contracting with minority and
women's business enterprises (MBE/
WBE). small businesses, and labor
surplus area firms
35.6585 Cost and price analysis
35.6590 Bonding and insurance
356595 Contract provisions
35.6600 Contractor claims
35 6605 Privity of contract
356610 Contracts awarded b> a contractor
Reports Required Under a Cooperative
Agreement
35.6650 Quarterly progress reports
35.6655 Notification of significant
developments
35.6660 Property inventory reports.
35.6665 Procurement reports
35.6670 Financial reports
Records Requirements Under a Cooperative
Agreement
35.6700 Project records
35.6705 Records retention.
35.6710 Records access.
Other Administrative Requirements for
Cooperative Agreements
35.6750 Modifications
35 6755 Monitoring program performance
35.6760 Enforcement and termination for
convenience.
35.6765 Non-Federal audit.
35.6770 Disputes.
35.6775 Exclusion of third-party benefits
35.6780 Closeout.
35.6785 Collection of amounts due.
35.6790 High risk recipients.
Requirements for Administering a Superfund
State Contract (SSC)
35.6800 General.
35.6805 Contents of an SSC.
35.6815 Administrative requirements.
35.6820 Conclusion of the SSC
Subpart oCooperative Agreements
and Superfund State Contracts for
Superfund Response Actions
Authority: 42 U.S.C. 9801 et seg
General
§35.6000 Authority.
This regulation is issued under section
104 of the Comprehensive
Environmental Response,
Compensation, and Liability Act of 1980
(42 U.S.C. 9601 et seq.. Pub. L. 96-510,
December 11, I960, otherwise referred to
as "CERCLA"), as amended by the
Superfund Amendments and
Reauthorization Act of 1966 (Pub. L. 99-
499, October 17,1986; 100 Stat. 1613.
otherwise referred to as "SARA").
AJ1 references to CERCLA within this
regulation are meant to indicate
CERCLA, as amended by SARA.
§ 35.6005 Purpose and scope.
(a] This regulation codifies recipient
requirements for administering
CERCLA-funded Cooperative
Agreements. This regulation also
codifies requirements for administering
Superfund State Contracts (SSCs) for
non-State-lead remedial responses
undertaken pursuant to section 104 of
CERCLA
(b) The requirements in this regulati
do not apply to Technical Assistance
Grants (TAGs) or to CERCLA research
and development grants, including the
Superfund Innovative Technology
Evaluation (SITE) Demonstration
Program.
(c) 40 CFR part 31. "Uniform
Administrative Requirements for Grants
and Cooperative Agreements to State
and Local Governments," establishes
consistency and uniformity among
Federal agencies in the administration
of grants and Cooperative Agreements
to State, local, and Indian Tribal
governments. For CERCLA-funded
Cooperative Agreements, this subpart
supplements the requirements contained
in part 31 for States, political
subdivisions thereof, and Indian Tribes.
This regulation references those sections
of part 31 that are applicable to
CERCLA-funded Cooperative
Agreements
(d) Superfund monies for remedial
actions cannot be used by recipients for
Federal facility cleanup activities. When
a cleanup is undertaken by another
Federal entity, the State, political
subdivision or Indian Tribe can pursue
funding for its involvement in response
activities from the appropriate Federal
entity.
{35.6010 Eligibility.
This regulation applies to States.
political subdivisions and Indian Tribes.
Indian Tribes are only eligible to receive
Superfund Cooperative Agreements or
Superfund State Contracts when they
are Federally recognized, and when they
meet the criteria set forth in § 300.515(b)
of the NCP. Although section 126 of
CERCLA provides that the governing
body of an Indian Tribe shall be
afforded substantially the same
treatment as a State, in this subpart
Indian Tribes are not included in the
definition of State in order to clarify
those requirements with which Indian
Tribes must comply and those with
which they need not comply.
(35.6015 Definitions.
(a) As used in this subpart, the
following words and terms shall have
the meanings set forth below:
(1) Activity. A set of CERCLA-funded
tasks that makes up 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. These
include Core Program, pre-remedial (i.e.
preliminary assessments and site
inspections), support agency, remedia
investigation/feasibility studies,
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Federal Register / Vol. 55, No. 108 / Tuesday, June 5, 1990 / Rules and Regulations
23007
activities for Letter of Credit drawdown
purposes. Often recipients do not know
beforehand the cost of support agency
activities at a particular site, making it
extremely difficult to determine
accurately the funds needed for the
Cooperative Agreement budget estimate.
Some recipients would prefer to be able
to budget the funds non-site-specifically
and then draw down and report the
expenditure of these funds on a site-
specific basis.
Fwal Rule: With award official
approval, and with the exception of
remedial action Cooperative
Agreements, applicants may submit
non-site-specific budget estimates, so
long as actual expenditures are drawn
down site-specifically and provide
sufficient documentation for cost
recovery actions.
Also, EPA has revised § 35.6155 to
include a reference to Indian Tribes and
political subdivisions, and to indicate
that some subparagraphs of § 35.6105(a)
do not apply to enforcement
Cooperative Agreements. EPA has
added § 35.6155(c) to indicate the
assurances that the applicant for an
enforcement Cooperative Agreement
must provide before its application can
qualify for review by EPA.
IV. Supporting Information
List of Subjects in 40 CFR Part 35
Accounting, Administrative practice
and procedures, Financial
administration, Grant programs
(Cooperative Agreements and
Superfund State Contracts), Government
procurement requirements, Property
requirements, Reporting and
recordkeeping requirements, Superfund.
V. Impact Analyses
A, Executive Order 12291
Executive Order No. 12291 requires
that regulations be classified as "major"
or "non-major" for purposes of review
by the Office of Management and
Budget (OMB). According to Executive
Order No. 12291, "major" rules are
regulations that are likely to result in:
(1) An annual adverse (cost) effect on
the economy of $100 million or more; or
(2) A major increase in costs or prices
for consumers, individual industries,
Federal, State, or local government, or
geographical regions; or
(3) Significant adverse effects on the
competition, employment, investment,
productivity, innovation, or the ability of
United States-based enterprises to
compete with foreign-based enterprises
in domestic or export markets.
This rule does not affect the amount
of funds provided in the Superfund
program, but rather modifies and
updates administrative and procedural
requirements. EPA does not believe that
the rule will have an annual economic
impact of $100 million or more, will
increase costs or prices, or will
adversely affect competition,
employment, investment, productivity,
innovation, or the ability of United
States-based enterprises to compete
with foreign-based enterprises in
domestic or export markets. For this
reason, EPA has determined that this is
not a major rule within the meaning of
the Order, and therefore no formal
Regulatory Impact Analysis is
necessary. This final rule was submitted
to the Office of Management and Budget
for its review as required by Executive
Order 12291.
B, Regulatory Flexibility Act of 1980
The Regulatory Flexibility Act (5
U.S.C. 605(b)) requires that, for each rule
with "significant economic impact on a
substantial number of small entities," an
analysis be prepared describing the
rule's impact on small entities and
identifying any significant alternatives
to the rule that would minimize the
economic impact on small entities. EPA
certifies that this rule will not have a
significant economic impact on a
substantial number of small entities
because the requirements in this
regulation apply only to States, political
subdivisions thereof, and Indian Tribes
for administering Superfund response
actions.
C. Paperwork Reduction Act
Sections 35.6055; 35,6105; 35.6120;
35.6270; 35.6300; 35.6315; 35.6320; 35.6340;
35.6550; 35.6585; 35.6650; 35.6655; 35.6660;
35.6665; 35.6670; 35.6700; 35.6705; 35.6710;
35.6805; 35.6815; and 35.6230 of this rule
contain collection-of-information
requirements. The information collection
requirements in this final rule have been
approved by the Office of Management
and Budget (OMB) under the
"Paperwork Reduction Act," 44 U.S.C.
3501 et seq. and assigned OMB control
numbers 2010-0020. An Information
Collection Request document has been
prepared by EPA (ICR No. 1487), and a
copy may be obtained from Sandy
Farmer, Information Policy Branch; EPA;
401 M St. SW. (PM-223); Washington,
DC 20460, or by calling (202) 382-2740.
Public reporting burden for this
collection of information is estimated to
average 81 hours per response, including
time for reviewing instructions,
searching existing data sources,
gathering and maintaining the data
needed, and completing and reviewing
the collection of information.
Send comments regarding the burden
estimate or any other aspect of this
collection of information, including
suggestions for reducing this burden to
Chief. Information Policy Branch, EPA,
PM-223, 401 M St. SW, Washington. DC
20460 and to the Office of Information
and Regulatory Affairs, Office of
Management and Budget, Washington,
DC 20503, marked "Attention: Desk
Officer for EPA."
Dated: May 23.1990
William K. Reilly,
Administrator.
Accordingly, the Administrator
amends chapter I, part 35 of title 40 of
the Code of Federal Regulations by
revising subpart O to read as follows:
PART 35-STATE AND LOCAL
ASSISTANCE
Subpart QCooperative Agraamanta and
Suparfund State Contracts for Suparfund
Response Actions
General
35.6000 Authority.
35.6005 Purpose and scope.
35.6010 Eligibility.
35.6015 Definitions,
35.6020 Other statutory- provisions.
35.6025 Deviation from this subpart.
Pre-Remedial Response Cooperative
Agreements
35.6050 Eligibility for pre-remedial
Cooperative Agreements.
35.6055 State-lead pre-remedial Cooperative
Agreements.
35.6060 Political subdivision-lead pre-
remedial Cooperative Agreements.
35.6070 Indian Tribe-lead pre-remedial
Cooperative Agreements.
Remedial Response Cooperative Agreements
35.6100 Eligibility for remedial Cooperative
Agreements.
35.6105 State-lead remedial Cooperative
Agreements.
35.6110 Indian Tribe-lead remedial
Cooperative Agreements.
35.6115 Political subdivision-lead remedial
Cooperative Agreements.
35.6120 Notification of the out-of-State or
out-oMndian Tribal jurisdiction transfer
of CERCLA waste.
Enforcement Cooperative Agreements
35.6145 Eligibility for enforcement
Cooperative Agreements.
35.6150 Activities eligible for funding under
enforcement Cooperative Agreements
35.6155 State, political subdivision or Indian
Tribe-lead enforcement Cooperative
Agreements.
Removal Response Cooperative Agreements
35.6200 Eligibility for removal Cooperative
Agreements
35.6205 Removal Cooperative Agreements.
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Federal Register / Vol. 55, No. 108 / Tuesday. June 5, 1990 / Rules and Regulations
23009
remedial design, remedial action,
removal, and enforcement activities.
(2) Allowable costs. Those project
costs that are: Eligible, reasonable.
necessary, and allocable to the project;
permitted by the appropriate Federal
cost principles; and approved by EPA in
the Cooperative Agreement and/or
Superfund State Contract.
(3) Architectural or engineering (A/E)
services. Consultation, investigations.
reports, or services for design-type
projects within the scope of the practice
of architecture or professional
engineering as defined by the laws of
the State or territory in which the
recipient is located.
(4) Award official. The EPA official
with the authority to execute
Cooperative Agreements and Superfund
State Contracts (SSCs) and to take other
actions authorized by EPA Orders.
(5) Budget period. The length of time
EPA specifies in a Cooperative
Agreement during which the recipient
may expend or obligate Federal funds.
(6) CERCLA. The Comprehensive
Environmental Response,
Compensation, and Liability Act of 1980
(42 U.S.C. 9601-9657, Pub. L. 96-510, Dec.
11,1980). as amended by the Superfund
Amendments and Reauthorization Act
of 1986 (Pub. L 99-499, Oct. 17,1986,100
Stat. 1613).
(7) Change order. A written order
issued by a recipient, or its designated
agent, to its contractor authorizing an
addition to, deletion from, or revision of,
a contract, usually initiated at the
contractor's request.
(8) Claim. A demand or written
assertion by a contractor seeking, as a
matter of right, changes in contract
duration, costs, or other provisions,
which originally have been rejected by
the recipient.
(9) Closeout. The final EPA or
recipient actions taken to assure
satisfactory completion of project work
and to fulfill administrative
requirements, including financial
settlement, submission of acceptable
required final reports, and resolution of
any outstanding issues under the
Cooperative Agreement and/or
Superfund State Contract.
(10) Community Relations Plan (CRP).
A management and planning tool
outlining the specific community
relations activities to be undertaken
during the course of a response. It is
designed to provide for two-way
communication between the affected
community and the agencies responsible
for conducting a response action, and to
assure public input into the decision-
making process related to the affected
communities.
(11) Construction Erection, building.
alteration, repair, remodeling.
improvement, or extension of buildings,
structures or other property.
(12) Contract. A written agreement
between an EPA recipient and another
party (other than another public agency)
or between the recipient's contractor
and the contractor's first tier
subcontractor.
(13) Contractor. Any party to whom a
recipient awards a contract.
(14) Cooperative Agreement. A legal
instrument EPA uses to transfer money,
property, services, or anything of value
to a recipient to accomplish a public
purpose in which substantial EPA
involvement is anticipated during the
performance of the project.
(15) Core Program Cooperative
Agreement. A Cooperative Agreement
that provides funds to a State or Indian
Tribe to conduct CERCLA
implementation activities that are not
assignable to specific sites, but are
intended to support a State's ability to
participate in the CERCLA response
program.
(16) Cost analysis. The review and
evaluation of each element of contract
cost to determine reasonableness,
allocability. and allowability.
(17) Cost share. The portion of
allowable project costs that a recipient
contributes toward completing its
project (i.e., non-Federal share, matching
share).
(18) Equipment. Tangible,
nonexpendable, personal property
having a useful life of more than one
year and an acquisition cost of $5,000 or
more per unit.
(19) Excess property. Any propefv
under the control of a Federal ager.
that is not required for immediate or
foreseeable needs and thus is a
candidate for disposal.
(20) Fair market value. The amount at
which property would change hands
between a willing buyer and a willing
seller, neither being under any
compulsion to buy or sell and both
having reasonable knowledge of the
relevant facts. Fair market value is the
price in cash, or its equivalent, for which
the property would have been sold on
the open market.
(21) Health and safety plan. A plan
that specifies the procedures that are
sufficient to protect on-site personnel
and surrounding communities from the
physical, chemical, and/or biological
hazards of the site. The health and
safety plan outlines:
(i) Site hazards;
(ii) Work areas and site control
procedures;
(iii) Air surveillance procedures;
(iv) Levels of protection;
(v) Decontamination and site
emergency plans,
(vi) Arrangements for weather-related
problems; and
(vii) Responsibilities for implementing
the health and safety plan.
(22) In-hind contribution. The value of
a non-cash contribution (generally from
third parties) to meet a recipient's cost
sharing requirements. An in-kind
contribution may consist of charges for
real property and equipment or the
value of goods and services directly
benefiting the CERCLA-funded project.
(23) Indian Tribe. As defined by
section 101(36) of CERCLA, any Indian
Tribe, band, nation, or other organized
group or community, including any
Alaska Native village but not including
any Alaska Native regional or village
corporation, which is recognized as
eligible for the special programs and
services provided by the United States
to Indians because of their status as
Indians.
(24) Intergovernmental Agreement.
Any written agreement between units of
government under which one public
agency performs duties for or in concert
with another public agency using EPA
assistance. This includes substate and
interagency agreements.
(25) Lead agency. The Federal a.
State agency, political subdivision
Indian Tribe that has primary
responsibility for planning and
implementing a response action under
CERCLA.
(26) Minority Business Enterprise
(MBE). A business which is:
(i) Certified as socially and
economically disadvantaged by the
Small Business Administration;
(ii) Certified as a minority business
enterprise by a State or Federal agency;
or
(iii) An independent business concern
which is at least 51 percent owned and
controlled by minority group member(s).
A minority group member is an
individual who is a citizen of the United
States and one of the following:
(A] Black American;
(B) Hispanic American (with origins
from Puerto Rico, Mexico, Cuba, South
or Central America);
(C) Native American (American
Indian, Eskimo, Aleut, native Hawaiian);
or
(D) Asian-Pacific American (with
origins from Japan, China, the
Philippines, Vietnam, Korea, Samoa,
Guam, the U.S. Trust Territories of the
Pacific, Northern Marianas, Laos,
Cambodia, Taiwan or the Indian
subcontinent).
(27) National Priorities List (i
EPA's list of the most serious
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Federal Register / Vol. 55, No. 108 / Tuesday. June 5. 1990 / Rules and Regulations
uncontrolled or abandoned hazardous
waste sites identified for possible long-
term remedial action under Superfund
A site must be on the NPL to receive
money from the Trust Fund for remedial
action The list is based primarily on the
score a site receives from the Hazard
Ranking System.
(28) Operable unit. A discrete action
as described in the Cooperative
Agreement or SSC, that comprises an
incremental step toward
comprehensively addressing site
problems. The cleanup of a site can be
divided into a number of operable units
depending on the complexity of the
problems associated with the site
Operable units may address
geographical portions of a site, specific
site problems, or initial phases of an
action, or may consist of any set of
actions performed over time or any
actions that are concurrent but located
in different parts of a site.
(29) Operation and maintenance
(Q&M). Measures required to maintain
the effectiveness of response actions.
(30) Personal property. Property othei
than real property. It includes both
supplies and equipment.
(31) Political subdivision. The unit of
government that the State determines to
have met the State's legislative
definition of a political subdivision
(32) Potentially Responsible Party
(PRP). Any individual(s), or
company(ies) identified as potentially
liable under CERCLA for cleanup or
payment for costs of cleanup of
Hazardous Substance sites. PRPs ma>
include individual(s), or company(ies)
identified as having owned, operated, or
in some other manner contributed
wastes to Hazardous Substance sites
(33) Price analysis. The process of
evaluating a prospective price without
regard to the contractor's separate cos1
elements and proposed profit Price
analysis determines the reasonablenes.
of the proposed contract price based on
adequate price competition, previous
experience with similar work,
established catalog or market price, la«
or regulation.
(34) Profit. The net proceeds obtained
by deducting all allowable costs (direr1
and indirect) from the price. (Because
this definition of profit is based on
applicable Federal cost principles, it
may vary from many firms' definition of
profit, and may correspond to those
firms' definition of "fee.")
(35) Project. The activities or tasks
EPA identifies in the Cooperative
Agreement and/or Superfund Statp
Contract.
(36) Project manager. The recipient
official designated in the Cooperative
Agreement or SSC as the program
contact with EPA.
(37) Project officer. The EPA official
designated in the Cooperative
Agreement as EPA's program contact
with the recipient. Project officers are
responsible for monitoring the project.
(38) Project period. The length of time
EPA specifies in the Cooperative
Agreement and/or Superfund State
Contract for completion of all project
work. It may be composed of more than
one budget period.
(39) Quality Assurance Project Plan.
A written document, associated with
remedial site sampling, which presents
in specific terms the organization (where
applicable), objectives, functional
activities, and specific quality assurance
and quality control activities and
procedures designed to achieve the data
quality objectives of a specific project(s)
or continuing operation(s).
(40) Real property. Land, including
land improvements, structures, and
appurtenances thereto, excluding
movable machinery and equipment.
(41) Recipient. Any State, political
subdivision thereof, or Indian Tribe
which has been awarded and has
accepted an EPA Cooperative
Agreement.
(42) Services. A recipient's in-kind or
a contractor's labor, time, or efforts
which do not involve the delivery of a
specific end item, other than documents
(e.g., reports, design drawings,
specifications). This term does not
include employment agreements or
collective bargaining agreements.
(43) Small business. A business as
defined in section 3 of the Small
Business Act, as amended (15 U.S.C.
632).
(44) State. The several States of the
United States, the District of Columbia,
the Commonwealth of Puerto Rico,
Guam, American Samoa, the Virgin
Islands, the Commonwealth of Northern
Marianas, and any territory or
possession over which the United States
has jurisdiction.
(45) Statement of Work (SOW). The
portion of the Cooperative Agreement
application and/or Superfund State
Contract that describes the purpose and
scope of activities and tasks to be
carried out as a part of the proposed
project
(46) Subcontractor. Any first tier party
that has a contract with the recipient's
prime contractor.
(47) Superfund State Contract (SSC)
A joint, legally binding agreement
between EPA and another party(s) to
obtain the necessary assurances before
an EPA-lead remedial action or any
political subdivision-lead activities can
beg-.n at a site, and to ensure State or
Indian Tribe involvement as required
under CERCLA section 121(f)-
(48) Supplies. All tangible personal
property other than equipment as
defined in this subpart.
(49) Support agency. The agency that
furnishes necessary data to the lead
agency, reviews response data and
documents, and provides other
assistance to the lead agency.
(50) Task. An element of a Superfund
response activity identified in the
Statement of Work of a Superfund
Cooperative Agreement or a Superfund
State Contract.
(51) Title. The valid claim to property
which denotes ownership and the rights
of ownership, including the rights of
possession, control, and disposal of
property.
(52) Unit acquisition cost. The net
invoice unit price of the property
including the cost of modifications,
attachments, accessories, or auxiliary
apparatus necessary to make the
property usable for the purpose for
which it was acquired. Other charges.
such as the cost of installation,
transportation, taxes, duty, or protective
in-transit insurance, shall be included or
excluded from the unit acquisition cost
in accordance with the recipient's
regular accounting practices.
(53) Value engineering. A systematic
and creative analysis of each contract
term or task to ensure that its essential
function is provided at the overall
lowest cost.
(54) Women's Business Enterprise
(WBE). A business which is certified as
a Women's Business Enterprise by a
State or Federal agency, or which meets
the following definition. A Women's
Business Enterprise is an independent
business concern which 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 owned by a woman
or women shall be made without regard
to community property laws.
(b) Those terms not defined in this
section shall have the meanings set forth
in section 101 of CERCLA, 40 CFR part
31 and 40 CFR part 300 (the National
Contingency Plan).
§ 95.6020 Otter statutory provisions.
The recipient must comply with the
Federal laws described in 40 CFR 31.13,
Principal Environmental Statutory
Provisions; Public Law 98-473, as
implemented in the Department of
Interior, Bureau of Indian Affairs,
regulation at 25 CFR part 20; 25 CFR part
20 and with other applicable statutory
provisions.
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Federal Register / Vol. 55, No. 108 / Tuesday, June 5, 1990 / Rules and Regulations
23011
§ 35.6025 Deviation from thlt aubpart.
On a case-by-case basis, EPA will
consider requests for an official
deviation from the non-statutory
provisions of this regulation. Refer to the
requirements regarding additions and
exceptions described in 40 CFR 31.6 (b),
(c), and (d).
Pre-Remedial Response Cooperative
Agreements
§ 35.6050 Eligibility for pre-remedial
Cooperative Agreements.
States, political subdivisions, and
Indian Tribes may apply for pre-
remedial response Cooperative
Agreements.
§ 35.6055 State-lead pre-remedial
Cooperative Agreements.
(a) To receive a State-lead pre-
remedial Cooperative Agreement, the
applicant must submit an "Application
for Federal Assistance" (SF-424) for
non-construction programs. Applications
for additional funding need include only
the revised pages. The application must
include the following:
(1) Budget sheets (SF-424A);
(2) A Project narrative statement,
including the following:
(i) A list of sites at which the
applicant proposes to undertake pre-
remedial tasks. If the recipient proposes
to revise the list, the recipient may not
incur costs on a new site until the
project officer has approved the site;
(ii) A Statement of Work (SOW)
which must include a detailed
description, by task, of activities to be
conducted, the projected costs
associated with each task, the number
of products to be completed, and a
quarterly schedule indicating when
these products will be submitted to EPA;
(iii) A schedule of deliverables.
(3) Drug-Free Workplace
Certification. The applicant must certify
(40 CFR part 32, subpart F) that it is in
compliance with the Drug-Free
Workplace Act of 1988 (Pub. L. 100-690,
title V, subtitle D), which requires
applicants to certify in writing that they
will provide a drug-free workplace. The
applicant must follow the requirements
contained in the OMB notice entitled
"Government-wide Implementation of
the Drug-Free Workplace Act of 1988"
published January 31,1989.
(4) Certification Regarding
Debarment, Suspension, and Other
Responsibility Matters (EPA Form 570O-
49). The applicant must certify that it is
in compliance with Executive Order
12549 and 40 CFR part 32.
(5) Procurement Certification. The
applicant must evaluate its own
procurement system to determine if the
system meets the intent of the
requirements of this subpart. After
evaluating its procurement system, the
applicant or recipient must complete the
"Procurement System Certification"
(EPA Form 5700-48) and submit the form
to EPA with its application.
(6) Ann-Lobbying Certification. The
applicant must certify (40 CFR part 34,
appendix A] that no appropriated funds
will be expended to pay any person for
influencing or attempting to influence an
officer or employee of any agency, a
Member of Congress, an officer or
employee of Congress, or an employee
of a Member of Congress, in connection
with any Federal award in excess of
$100,000, in accordance with section 319
of Public Law 101-121. The applicant
must follow the requirements in the
Interim Final Rule entitled, "New
Restrictions on Lobbying" published on
February 26,1990.
(b) Pre-remedial Cooperative
Agreement requirements. The recipient
must comply with all terms and
conditions in the Cooperative
Agreement, and with the following
requirements:
(1) Health and safety plan, (i) Before
beginning field work, the recipient must
have a health and safety plan in place
providing for the protection of on-site
personnel and area residents. This plan
need not be submitted to EPA, but must
be made available to EPA upon request.
(ii) The recipient's health and safety
plan must comply with Occupational
Safety and Health Administration
(OSHA) 29 CFR 1910.120, entitled
"Hazardous Waste Operations and
Emergency Response," unless the
recipient is an Indian Tribe which is
exempt from OSHA requirements.
(2) Quality assurance, (i) The
recipient must comply with the quality
assurance requirements described in 40
CFR 31.45.
(ii) The recipient must have an EPA-
approved non-site-specific quality
assurance plan in place before
beginning field work. The recipient must
submit the plan to EPA in adequate time
(generally 45 days) for approval to be
granted before beginning field work.
(iii) The quality assurance plan must
comply with the requirements regarding
split sampling described in section
104(e)(4)(B) of CERCLA, as amended.
{35.6060 Pottttcal aubdM»lon toad prt-
remedlal Cooperative Agreements.
(a) If the Award Official determines
that a political subdivision's lead
involvement in pre-remedial activities
would be more efficient, economical and
appropriate than that of a State, based
on the number of sites to be addressed
and the political subdivision's history of
program involvement, a pre-remedial
Cooperative Agreement may be
awarded under this section.
(b) The political subdivision must
comply with all of the requirements
described in | 35.6055 of this subpart.
(c) The Award Official may require a
three-party Superfund State Contract for
pre-remedial activities.
(d) If the preliminary assessment/site
investigation (PA/SI) shows that listing
the site on the NPL is necessary, the
political subdivision must enter into a
three-party Superfund State Contract
before any remedial activities begin.
§ 35.6070 Indian Tribe-lead pre-remedial
Cooperative Agreements.
The Indian Tribe must comply with all
of the requirements described in
{ 35.6055 of this subpart, except for the
intergovernmental review requirements
included in the "Application for Federal
Assistance" (SF-424).
Remedial Response Cooperative
Agreements
( 35.6100 Eligibility for remedial
Cooperative Agreements.
States, Indian Tribes, and political
subdivisions may apply for remedial
response Cooperative Agreements.
(35.6105 State-toad remedial
Agreements.
To receive a State-lead remedial
Cooperative Agreement, the applicant
must submit the following items to EPA:
(a) Application form, as described in
S 35.6055(a) of this subpart,
accompanied by the following:
(1) Budget sheets (SF-424A)
displaying costs by site, activity and
operable unit, as applicable;
(2) A Project narrative statement,
including the following:
(i) A site description, including a
discussion of the location of each site.
the physical characteristics of each site
(site geology and proximity to drinking
water supplies), the nature of the release
(contaminant type and affected media),
past response actions at each site, and
response actions still required at each
site;
(ii) A site-specific Statement of Work
(SOW), including estimated costs per
task, and a standard task to ensure that
a sign is posted at the site providing the
appropriate contacts for obtaining
information on activities being
conducted at the site, and for reporting
suspected criminal activities;
(iii) A statement designating a lead
site project manager among appropriate
State offices. This statement m
demonstrate that the lead State
has conducted coordinated planning of
response activities with other State
-------
agencies. The statement must identify
the name and position of those
individuals who will be responsible for
coordinating the State offices;
(iv) A site-specific Community
Relations Plan or an assurance that field
work will not begin until one is in place
The Regional community relations
coordinator must approve the
Community Relations Plan before the
recipient begins field work. The
recipient must comply with the
community relations requirements
described in EPA policy and guidance,
and in the National Contingency Plan
(NCP);
(v) A site-specific health and safety
plan, or an assurance that the applicant
will have a final plan before starting
field work. Unless specifically waived
by the award official, the applicant must
have a site-specific health and safety
plan in place providing for the
protection of on-site personnel and area
residents. The site-specific health and
safety plan must comply with
Occupational Safety and Health
Administration (OSHA) 29 CFR
1910.120, entitled "Hazardous Waste
Operations and Emergency Response,"
unless the recipient is an Indian Tribe
exempt from OSHA requirements;
(vi) Quality assurance(A) General
If the project involves environmentally
related measurements or data
generation, the recipient must comply
with the requirements regarding quality
assurance described in 40 CFR 31.45.
(B) Quality assurance plan. The
applicant must have a separate quality
assurance project plan and/or sampling
plan for each site to be covered by the
Cooperative Agreement. The applicant
must submit the quality assurance
project plan and sampling plan, which
incorporates results of any site
investigation performed at that site, to
EPA with its Cooperative Agreement
application. However, at the option of
the EPA award official with program
concurrence, the applicant may submit
with its application a schedule for
developing the detailed site-specific
quality assurance plan (generally 45
days before beginning field work). Field
work may not begin until EPA approves
the site-specific quality assurance plan
(C) Split sampling. The quality
assurance plan must comply with the
requirements regarding split sampling
described in section 104(e)(4)(B) of
CERCLA, as amended.
(vii) A schedule of dehverobles to be
prepared during response activities
(3) Drug-Free Workplace
Certification The applicant must certif\
(40 CFR part 32. subpart F) that it is in "
compliance with the Drug-Free
Workplace Act of 1988 (Pub. L. 100-690
title V, subtitle D), which requires
applicants to certify in writing that they
will provide a drug-free workplace.
(4) Certification Regarding
Debarment, Suspension, and Other
Responsibility Matters (EPA Form 5700-
49) The applicant must certify that it is
in compliance with Executive Order
12549 and 40 CFR part 32.
(5) Procurement Certification. The
applicant must evaluate its own
procurement system to determine if the
system meets the intent of the
requirements of this subpart. After
evaluating its procurement system, the
applicant or recipient must complete the
"Procurement System Certification"
(EPA Form 5700-48) and submit the form
to EPA with its application.
(6) Ann-Lobbying Certification. The
applicant must certify (40 CFR part 34,
appendix A) that no appropriated funds
will be expended to pay any person for
influencing or attempting to influence an
officer or employee of any agency, a
Member of Congress, an officer or
employee of Congress, or an employee
of a Member of Congress, in connection
with any Federal award in excess of
$100,000, in accordance with section 319
of Public Law 101-121. The applicant
must follow the requirements in the
Interim Final Rule entitled, "New
Restrictions on Lobbying" published on
February 26,1990.
(b) CERCLA Assurances. Before a
Cooperative Agreement for remedial
action can be awarded, the State must
provide EPA with written assurances as
specified below.
(1) Operation and maintenance. The
State must provide an assurance that it
will assume responsibility for the
operation and maintenance (O&M) of
implemented CERCLA-funded remedial
actions for the expected life of each
such action. In addition, even if a
political subdivision is designated as
being responsible for O&M, the State
must guarantee that it will assume any
or all O&M activities in the event of
default by the political subdivision.
(2) Cost sharing. The State must
provide assurances for cost sharing as
follows:
(i) Ten percent. Where a facility was
privately operated, whether privately or
publicly owned, at the time of disposal,
the State must provide 10 percent of the
cost of the remedial action, if CERCLA-
funded.
(ii) Fifty percent. Where a facility was
publicly operated by a State or political
subdivision at the time of disposal of
hazardous substances at the facility, the
State must provide at least 50 percent of
the cost of removal, remedial planning,
and remedial action if the remedial
action is CERCLA-funded.
(3) Twenty-year waste capacity The
State must assure EPA of the
availability of hazardous waste
^
treatment or disposal facilities within
and/or outside the State that comply
with subtitle C of the Solid Waste
Disposal Act and that have adequate
capacity for the destruction, treatment,
or secure disposition of all hazardous
wastes that are reasonably expected to
be generated within the State during the
20-year period following the date of the
response agreement. A remedial
response action cannot be funded unless
this assurance is provided consistent
with § 300.510 of the NCP. EPA will
determine whether the State's assurance
is adequate.
(4) Off-site storage, treatment, or
disposal. If off-site storage, destruction,
treatment, or disposal is required, the
State must assure the availability of a
hazardous waste disposal facility that is
in compliance with subtitle C of the
Solid Waste Disposal Act and is
acceptable to EPA. The lead agency of
the State must provide the notification
required at § 35.6120, if applicable.
(5) Real property acquisition. If EPA
determines in the remedy selection
process that an interest in real property
must be acquired in order to conduct a
response action, such acquisition may
be funded under a Cooperative
Agreement. If the State, or a political
subdivision thereof, is unable to acquire
the real property interest, the State must
assure EPA that it will accept transfer of
such interest, including any interest in
real property that is acquired to ensure
the reliability of institutional controls
restricting the use of that property. The
State must provide this assurance even
if it intends to transfer this interest to a
third party. (See § 35.6400 of this subpart
for additional information on real
property acquisition requirements.)
35.6110 Indian Tribe-toad remedial
Cooperative Agreement*.
(a) Application requirements. The
Indian Tribe must comply with all of the
requirements described in § 35.6105(a)
and, if appropriate. § 35.6105(b)(5) of
this subpart. Indian Tribes are not
required to comply with the
intergovernmental review requirements
included in the "Application for Federal
Assistance" (SF-424). Consistent with
the NCP (§ 300.510(e)(2)). this rule does
not address whether Indian Tribes are
States for the purpose of CERCLA
section 104(c)(9).
(b) Cooperative Agreement
requirements. (1) The Indian Tribe must
comply with all terms and conditions in
the Cooperative Agreement.
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Federal Register / Vol. 55. No. 108 / Tuesday. June 5, 1990 / Rules and Regulations
(2) If EPA determines as part of the
remedy selection process that an
interest in real property must be
acquired in order to conduct the site-
specific response action, the Indian
Tribe will be required, to the extent of
its legal authority, to assure EPA that it
will take title to, acquire interest in, or
accept transfer of such interest in real
property acquired with CERCLA funds,
including any interest in property that is
acquired to ensure the reliability of
institutional controls restricting the use
of that property. (See § 35.6400 of this
subpart regarding information on
property title and interest requirements.}
(3) If it is designated the lead for
remedial action, the Indian Tribe must
provide the notification required at
§ 35.6120, substituting the term "Indian
Tribe" for the term "State" in that
section, and "out-of-jurisdiction" for
"out-of-State."
135.6115 Political subdivision-lead
remedial Cooperative Agreement*.
(a) General. If both the State and EPA
agree, a political subdivision with the
necessary capabilities and jurisdictional
authority may assume the lead
responsibility for the remedial activity,
or a portion thereof, at a site. The State
and political subdivision must enter into
a three-party Superfund State Contract
(SSC) with EPA before a political
subdivision can enter into a Cooperative
Agreement.
(b) Three-party Superfund State
Contract requirements. The three-party
SSC must specify the responsibilities of
the signatories. By signing the SSC, the
State and the political subdivision agree
to follow the appropriate administrative
requirements regarding SSCs described
in {$ 35.6805, 35.6815, and 35.6820 of this
subpart. Furthermore. EPA, the State,
and the political subdivision agree that
the SSC:
(1) Specifies the substantial and
meaningful involvement of the State as
required by section 121(011) of CERCLA,
as amended; and
(2) Includes the State's CERCLA
section 104 assurances, if the political
subdivision is designated the lead for
remedial action.
(c) Political subdivision Cooperative
Agreement requirements.(1)
Application requirements. To receive a
remedial Cooperative Agreement, the
political subdivision must prepare an
application which includes the
documentation described in § 35.6105
(a)(l) through (a](6).
(2) Cooperative Agreement
requirements. The political subdivision
must comply with all terms and
conditions in the Cooperative
Agreement. If it is designated the lead
for remedial action, the political
subdivision must provide the
notification required at | 35.6120,
substituting the term "political
subdivision" for the term "State" in that
section.
§ 35.61 20 Notification of the out-of-State
or out-of-lndlan Tribal jurisdiction transfer
Of CERCLA wastes.
(a) The recipient must provide written
notification of off-site shipments of
CERCLA waste from a site to an out-of-
State or out-of-Indian Tribal jurisdiction
waste management facility to:
(1) The appropriate State
environmental official for the State in
which the waste management facility is
located; and/or
(2) The appropriate Indian Tribal
official who has jurisdictional authority
in the area where the waste
management facility is located; and
(3) The EPA Award Official.
(b) The notification of off-site
shipments does not apply when the total
volume of all such shipments from the
site does not exceed 10 cubic yards.
(c) The notification must be in writing
and must provide the following
information, where available:
(1) The name and location of the
facility to which the CERCLA waste is
to be shipped;
(2) The type and quantity of CERCLA
waste to be shipped;
(3) The expected schedule for the
shipments of the CERCLA waste; and
(4) The method of transportation of
the CERCLA waste.
(d) The recipient must notify the State
or Indian Tribal government in which
the planned receiving facility is located
of major changes in the shipment plan,
such as a decision to ship the CERCLA
waste to another facility within the
same receiving State, or to a facility in
another State.
(e) The recipient must provide
relevant information on the off-site
shipments, including the information in
paragraph (c) above, as soon as possible
after the award of the contract and,
where practicable, before the CERCLA
waste is actually shipped.
Enforcement Cooperative Agreements
§35.6145 EHoWtty for enforcement
Pursuant to CERCLA section 104(d),
States, political subdivisions thereof,
and Indian Tribes may apply for
enforcement Cooperative Agreements.
To be eligible for an enforcement
Cooperative Agreement, the State,
political subdivision or Indian Tribe
must demonstrate that it has the
authority, jurisdiction, and the
necessary administrative capabilities to
take an enforcement action(s) to compe
PRP cleanup of the site, or recovery of
the cleanup costs. To accomplish this,
the State, political subdivision or Indian
Tribe, respectively, must submit the
following for EPA approval:
(a) A letter from the State Attorney
General, or comparable local official (of
a political subdivision) or comparable
Indian Tribal official, certifying that it
has the authority, jurisdiction, and
administrative capabilities that provide
a basis for pursuing enforcement actions
against a PRP to secure the necessary
response;
(b) A copy of the applicable State,
local (political subdivision) or Indian
Tribal statute(s) and a description of
how it is implemented;
(c) Any other documentation required
by EPA to demonstrate that the State,
local (political subdivision) or Indian
Tribal government has the statutory
authority, jurisdiction, and
administrative capabilities to perform
the enforcement activity(ies) to be
funded under the Cooperative
Agreement.
§35.6150 Activities eligible for funding
under enforcement Cooperatve
Agreements.
An enforcement Cooperative
Agreement application from a Stat
political subdivision or Indian Tribe
may request funding for the following
enforcement activities:
(a) PRP searches;
(b) Issuance of notice letters and
negotiation activities;
(c) Administrative and judicial
enforcement actions taken under State
or Indian Tribal law;
(d) Management assistance and
oversight of PRPs during Federal
enforcement response;
(e) Oversight of PRPs during a State,
political subdivision or Indian Tribe
enforcement response contingent on the
applicant having taken all necessary
action to compel PRPs to fund the
oversight of cleanup activities
negotiated under the recipients
enforcement authorities. If the State,
political subdivision, Indian Tribe or
EPA cannot obtain PRP commitment to
fund such oversight activities, then these
activities will be considered eligible for
CERCLA funding under an enforcement
Cooperative Agreement.
§35.6155 State, political tubcUvteton or
Indian Tribe-lead enforcement Cooperative
Agreements.
(a) The State, political subdivi
Indian Tribe must comply with
requirements described in § 35.6:
(a)(l) through (a)(6) of this subpart as
appropriate.
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(b) The CERCLA section 104
assurances described in § 35.6105(b) are
not applicable for enforcement
Cooperative Agreements.
(c) Before an enforcement Cooperative
Agreement is awarded, the State,
political subdivision or Indian Tribe
must:
(1) Assure EPA that it will notify and
consult with EPA promptly if the
recipient determines that its laws or
other restrictions prevent the recipient
from acting consistently with CERCLA;
and
(2) If the applicant is seeking funds for
oversight of PRP cleanup, the applicant
must:
(i) Demonstrate that the proposed
Statement of Work or cleanup plan
prepared by the PRP satisfies the
recipient's enforcement goals for those
instances in which the recipient is
seeking funding for oversight of PRP
cleanup activities negotiated under the
recipient's own enforcement authorities:
and
(ii] Demonstrate that the PRP has the
capability to attain the goals set forth in
the plan;
(iii) Demonstrate that it has taken all
necessary action to compel PRPs to fund
the oversight of cleanup activities
negotiated under the recipient's
enforcement authorities.
Removal Response Cooperative
Agreements
§ 35.6200 Eligibility for removal
Cooperative Agreements.
When a planning period of more than
six months is available, States, political
subdivisions and Indian Tribes may
apply for removal Cooperative
Agreements
§ 35.6205 Removal Cooperative
Agreements.
(a) The State must comply with the
requirements described in | 35.6105(a)
of this subpart. To the extent
practicable, the State must comply with
the notification requirement at § 35.6120
when a removal action is necessary and
involves out-of-State shipment of
CERCLA wastes, and when, based on
the site evaluation, EPA determines that
a planning period of more than six
months is available before the removal
activities must begin.
(b) Pursuant to CERCLA section
104(c)(3). the State is not required to
share in the cost of a CERCLA-funded
removal action, unless the removal is
conducted at a site that was publicly
operated by a State or political
subdivision at the time of disposal of
hazardous substances and a CERCLA-
funded remedial action is ultimately
»
undertaker, at the site In this situation,
the State must share at least 50 percent
in the cost of all removal, remedial
planning, and remedial action costs at
the time of the remedial action as stated
in | 35.6105(b](2)(ii] of this subpart.
(c) If both the State and EPA agree, a
political subdivision with the necessary
capabilities and jurisdictional authority
may assume the lead responsibility for
all, or a portion, of the removal activity
at a site. Political subdivisions must
comply with the requirements described
in § 35.6105(a) of this subpart. To the
extent practicable, political subdivisions
also must comply with the notification
requirement at § 35.6120 when a
removal action is necessary and
involves the shipment of CERCLA
wastes out of the State's jurisdiction,
and when, based on the site evaluation,
EPA determines that a planning period
of more than six months is available
before the removal activities must begin.
(d) The State must provide the cost
share assurance discussed in
§ 35.6205(b) above on behalf of a
political subdivision that is given the
lead for a removal action.
(e) Indian Tribes must comply with
the requirements described in
§ 35.6105(a) of this subpart. To the
extent practicable, Indian Tribes also
must comply with the notification
requirement at $35.6120 when a removal
action is necessary and involves the
shipment of CERCLA wastes out of the
Indian Tribe's jurisdiction, and when,
based on the site evaluation, EPA
determines that a planning period of
more than six months is available before
the removal activities must begin.
(f) Indian Tribes are not required to
share in the cost of a CERCLA-funded
removal action.
Core Program Cooperative Agreements
§ 35.6215 Eligibility for Core Program
Cooperative Agreements.
(a) States and Indian Tribes may-
apply for Core Program Cooperative
Agreements in order to conduct
CERCLA implementation activities that
are not directly assignable to specific
sites, but are intended to support a
State's or Indian Tribe's ability to
participate in the CERCLA; response
program.
(b) Only the State or Indian Tribal
government agency designated as the
single point of contact with EPA for
CERCLA implementation is eligible to
receive a Core Program Cooperative
Agreement.
(c) When it is more economical for a
government entity other than the
recipient (such as a political subdivision
or State Attorney General) to implement
tasks funded through a Core Program
Cooperative Agreement, benefits to such
entities must be provided for in an
intergovernmental agreement.
§35.6220 General.
The recipient of a Core Program
Cooperative Agreement must comply
with the requirements regarding
financial administration (§§ 35.6270
through 35.6290 of this subpart), property
(§§ 35.6300 through 35.6450),
procurement (§§ 35.6550 through
35.6610), reporting (§§ 35.6650 through
35.6670), records (§§ 35.6700 through
35.6710), and other administrative
requirements under a Cooperative
Agreement (§§ 35.6750 through 35.6790}
described in this subpart. Recipients
may not incur site-specific costs. Where
these sections entail site-specific
requirements, the recipient is not
required to comply on a site-specific
basis.
§ 35.6225 Activities eligible for funding
under Core Program Cooperative
Agreements.
To be eligible for funding under a
Core Program Cooperative Agreement,
activities must support a recipient's
abilities to implement CERCLA. Once
the recipient has in place.program
functions described in | 35.6225 (a)
through (d) below, EPA will evaluate the
recipient's program needs to sustain
interaction with EPA in CERCLA
implementation as described in
$ 35.6225(e). The amount of funding
provided under the Core Program will be
determined by EPA based on the
availability of funds and the recipient's
program needs in the areas described in
(a) through (d) below:
(a) Procedures for emergency
response actions and longer-term
remediation of environmental and
health risks at hazardous waste sites
(including but not limited to the
development of generic health and
safety plans, quality assurance project
plans, and community relation plans);
(b) Provisions for satisfying all
requirements and assurances (including
the development of a fund or other
financing mechanism(s) to pay for
studies and remediation activities):
(c) Legal authorities and enforcement
support associated with proper
administration of the recipient's
program and with efforts to compel
potentially responsible parties to
conduct or pay for studies and/or
remediation (including but not limited to
the development of statutory authorities;
access to legal assistance in identifying
applicable or relevant and appropriate
requirements of other laws; and
development and maintenance of the
-------
administrative, financial and
recordkeeping systems necessary for
cost recovery actions under CERCLA);
(d) Efforts necessary to hire and train
staff to manage publicly-funded
cleanups, oversee responsible party-lead
cleanups, and provide clerical support;
and
(e) Other activities deemed necessary
by EPA to support sustained EPA/
recipient interaction in CERCLA
implementation (including but not
limited to general program management
and supervision necessary for a
recipient to implement CERCLA
activities, and interagency coordination
on all phases of CERCLA response).
Continued funding of tasks in
subsequent years will be based on an
evaluation of demonstrated progress
towards the goals in the existing Core
Program Cooperative Agreement
Statement of Work.
§ 35.6230 Application requirements.
To receive a Core Program
Cooperative Agreement, the applicant
must submit an application form
("Application for Federal Assistance,"
SF-424, for non-construction programs)
to EPA. Applications for additional
funding need include only the revised
pages. The application must include the
following;
(a) A project narrative statement,
including the following;
(1) A Statement of Work (SOW)
which must include a detailed
description of the CERCLA-funded
activities and tasks to be conducted, the
projected costs associated with each
task, the number of products to be
completed, and a schedule for
implementation. Eligible activities under
Core Program Cooperative Agreements
are discussed in § 35.6225 of this
subpart;
(2) A background statement,
describing the current abilities and
authorities of the recipient's program for
implementing CERCLA, the program's
needs to sustain and increase recipient
involvement in CERCLA
implementation, and the impact of Core
Program Cooperative Agreement funds
on the recipient's involvement in site-
specific CERCLA response.
(b) Budget sheets (SF-424A);
(c) Proposed project and budget
periods for CERCLA-funded activities.
The project and budget periods may be
one or more years and may be extended
incrementally, up to 12 months at a time,
with EPA approval;
(d) Certifications for a drug-free
workplace: debarment, suspensions, and
other responsibility matters;
procurement, and lobbying, pursuant to
§ 35.6105(a) (3) through (6) of this
subpart.
§35.6235 Cost sharing.
The recipient of a Core Program
Cooperative Agreement must provide at
least ten percent of the direct and
indirect costs of all activities covered by
the Core Program Cooperative
Agreement. The recipient must provide
its cost share with non-Federal funds or
with Federal funds authorized by statute
to be used for matching purposes. Funds
used for matching purposes under any
other Federal grant or Cooperative
Agreement cannot be used for matching
purposes under a Core Program
Cooperative Agreement. The recipient
may provide its share using in-kind
contributions if such contributions are
provided for in the Cooperative
Agreement. The recipient may not use
CERCLA State credits to offset any part
of the recipient's required match for
Core Program Cooperative Agreements.
See § 35.6265 (c), (d), and (f) regarding
credit, over match, and advance match,
respectively.
Support Agency Cooperative
Agreements
§ 35.6240 Eligibility for support agency
Cooperative Agreements.
States, political subdivisions, and
Indian Tribes may apply for support
agency Cooperative Agreements to
ensure their meaningful and substantial
involvement in response activities, as
specified in sections 104 and 121(f)(l) of
CERCLA and the NCP. (See § 35.6800 (a)
and (b).)
§35.6245 Allowable activities.
Support agency activities are those
activities conducted by the recipient to
ensure its meaningful and substantial
involvement. The activities described in
section 121(f)(l) of CERCLA, as
amended, and in subpart F of the NCP,
are eligible for funding under a support
agency Cooperative Agreement.
§ 35.6250 Support agency Cooperative
Agreement requirements.
(a) Application requirements. The
applicant must comply with the
requirements described in § 35.6105(a)
(1), (4), (5) and (6), and other
requirements as negotiated with EPA.
(Indian Tribes are exempt from the
requirement of Intergovernmental
Review in part 29 of this chapter.) An
applicant may submit a non-site-specific
budget for support agency activities,
with the exception of remedial action
support agency activities, which require
cost share and must be applied for
within a site-specific budget. All support
agency activities are subject to t
applicable sections of this subpa
(b) Cooperative Agreement
requirements. The recipient must
comply with the requirements regarding
financial administration (§§ 35.6270
through 35.6290 of this subpart), property
(§§ 35.6300 through 35.6450),
procurement (§§ 35.6550 through
35.6610), reporting (§§ 35.6650 through
35.6670), records (§§ 35.6700 through
35.6710), and other administrative
requirements under a Cooperative
Agreement (§§ 35.6750 through 35.6790)
described in this subpart.
§35.6255 Cost sharing.
The requirements for cost sharing
under a support agency Cooperative
Agreement are the same as the cost
sharing requirements of § 35.6105(b)(2)
of this subpart. The State may use in-
kind services as part of its cost share.
(See | 35.6815(b) for SSC payment
requirements.)
Financial Administration Requirements
Under a Coopertive Agreement
§ 35.6270 Standards for financial
management systems.
(a) Accounting system standards. (1)
General. The recipient's system must
track expenses by site, activity,
operable unit, as applicable, ac
to object class. The system must
provide control, accountability, and an
assurance that funds, property, and
other assets are used only for their
authorized purposes. The recipient must
allow an EPA review of the adequacy of
the financial management system as
described in 40 CFR 31.20(c).
(2) Allowable costs. The recipient's
systems must comply with the
appropriate allowable cost principles
described in 40 CFR 31.22.
(3) Pre-remedial. The system need not
track expenses by site. However, all pre-
remedial costs must be documented
under a single Superfund account
number designated specifically for the
preremedial activity.
(4) Core Program. Since all costs
associated with Core Program
Cooperative Agreements are non-site-
specific, the systems need not track
expenses by site. However, all Core
Program costs must be documented
under the Superfund account number(s)
designated specifically for Core Program
activity.
(5) Support Agency. Unless otherwise
specified in the Cooperative Agreement
all support agency costs, with the
exception of remedial action support
agency costs, may be document^afeider
a single Superfund account nu
designated specifically for supp
-------
agency activities. Remedial action
support agency activities must be
documented site-specifically.
(6) Accounting system control
procedures. Except as provided for in
paragraph (a)[3) of this section,
accounting system control procedures
must ensure that accounting information
is:
(i) Accurate, charging only costs
attributable to the site, activity, and
operable unit, as applicable; and
(ii) Complete, recording and charging
to individual sites, activities, and
operable units, as applicable, all costs
attributable to the recipient's CERCLA
effort.
(7) Financial reporting. The recipient's
accounting system must use actual costs
as the basis for all reports of direct site
charges. The recipient must comply with
the requirements for financial reporting
contained in | 35.6670 of this subpart.
(b) Recordkeeping system standards.
(1) The recipient must maintain a
recordkeeping system that enables site-
specific costs to be tracked by site.
activity, and operable unit, as
applicable, and provides sufficient
documentation for cost recovery
purposes.
(2) The recipient must provide this
site-specific documentation to the EPA
Regional Office within 30 working days
of a request, unless another time frame
is specified in the Cooperative
Agreement.
(3) In addition, the recipient must
comply with the requirements regarding
records described in §§ 35.6700, 35.6705,
and 35.6710 of this subpart. The
recipient must comply with the
requirements regarding sourc e
documentation described in 40 CFR
31.20(b)(6)
(4) For pre-remedial and Core Program
activities, the recordkeeping system
must comply with the requirements
described in paragraphs (a){3) and
(a)(4). respectively, of this section
§ 35.6275 Period of availability of funds.
(a) The recipient must comply with
the requirements regarding the
availability of funds described in 40 CFR
31.23.
(b) Except as permitted in § 35.6285
the Award Official must sign the
assistance agreement before costs are
incurred. The recipient may incur costs
between the date the Award Official
signs the assistance agreement and the
date the recipient signs the agreement, if
the costs are identified in the agreement
and the recipient does not change the
agreement
§ 35.6280 Payments.
(a) General. In addition to the
following requirements, the recipient
must comply with the requirements
regarding payment described in 40 CFR
31.21(f) through (h).
(1) Assignment of payment. The
recipient cannot assign the right to
receive payments under the recipient's
Cooperative Agreement. EPA will make
payments only to the payee identified in
the Cooperative Agreement.
(2) Interest. If the recipient earns
interest on an advance of EPA funds, the
recipient must return the interest unless
the recipient is a State or State agency
as defined under section 203 of the
Intergovernmental Cooperation Act of
1968, or a Tribal organization as defined
under section 102, 103, or 104 of the
Indian Self-Determination and
Education Assistance Act of 1975 (Pub
L 93-638).
(b) Payment method (I) Letter of
credit. In order to receive payment by
the letter of credit method, the recipient
must comply with the requirements
regarding letter of credit described in 40
CFR 31.20 (b)(7) and 31.21(b). The
recipient must identify and charge costs
to specific sites, activities, and operable
units, as applicable, for drawdown
purposes as specified in the Cooperative
Agreement.
(2) Reimbursement. If the recipient is
unable to meet letter of credit
requirements, EPA will pay the recipient
by reimbursement. The recipient must
comply with the requirements regarding
reimbursement described in 40 CFR
(3) Working capital advances. If the
recipient is unable to meet the criteria
for payment by either letter of credit or
reimbursement, EPA may provide cash
on a working capital advance basis.
Under this procedure EPA shall advance
cash to the recipient to cover its
estimated disbursement needs for an
initial period generally geared to the
recipient's disbursing cycle. Thereafter,
EPA shall reimburse the recipient for its
actual cash disbursements. In such
cases, the recipient must comply with
the requirements regarding working
capital advances described in 40 CFR
31.21(e)
§ 35.6265 n»c*p*«nt payment of response
costs.
The recipient may pay for its share of
response costs using cash, services,
credits or any combination of these, as
follows:
(a) Cash. The recipient may pay for its
share of response costs in the form of
cash.
(b) Services. The recipient mav
provide equipment and services to
satisfy its cost share requirements under
Cooperative Agreements. The recipient
must comply with the requirements
regarding in-kind and donated services
described in 40 CFR 31.24.
(c) Credit (1) General credit
requirements. Credits are limited to
State site-specific expenses that EPA
determines to be reasonable,
documented, direct, out-of-pocket
expenditures of non-Federal funds for
remedial action. Credits are established
on a site-specific basis. Only a State
may claim credit.
(i) The State may claim credit for
response activity obligations or
expenditures incurred by the State or
political subdivision between January 1,
1978 and December 11,1980.
(ii) The State may claim credit for
remedial action expenditures incurred
by the State after October 7,1986.
(iii) The State may not claim credit for
removal actions taken after December
11,1980.
(2) Credit submission requirements, (i)
Expenditures incurred before a site is
listed on the NPL Although EPA may
require additional documentation, the
State must submit the following before
EPA will approve the use of the credit:
(A) Specific amounts claimed for
credit, by site (estimated amounts are
unacceptable), based on supporting cost
documentation;
(B) Units of government (State agency,
county, local) that incurred the costs, by
site;
(C) Description of the specific function
performed by each unit of government at
each site;
(D) Certification (signed by the State's
fiscal manager or the financial director
for each unit of government) that credit
costs have not been previously
reimbursed by the Federal government
or any other party, and have not been
used for matching purposes under any
other Federal program or grant; and
(E) Documentation, if requested by
EPA, to ensure the actions undertaken
at the site are cost eligible and
consistent with CERCLA, as amended,
and the NCP requirements. This
requirement does not apply for costs
incurred before December 11,1980.
(ii) Expenditures incurred after a site
is listed on the NPL. A State may
receive credit for remedial action
expenditures after October 17,1986,
only if the State entered into a
Cooperative Agreement before incurring
costs at the site.
(3) Use of credit. The State must first
apply credit at the site at which it was
earned. With the approval of EPA, the
State may use excess credit earned at
one site for its cost share at another site
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Federal Register / Vol. 55, No. 108 / Tuesday, June 5, 1990 / Rules and Regulations
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(See CERCLA section 104(c)(5)). Credits
must be applied on a site-specific basis,
and. therefore, may not be used to meet
State cost-share requirements for Core
Program Cooperative Agreements. EPA
will not reimburse excess credit
(4) Credit verification. Credits are
subject to verification by audit and
technical review of actions performed at
sites.
(d) Over match. The recipient may not
use contributions in excess of the
required cost-share at one site to meet
the cost-share obligation at another site
or the Core Program cost-share
obligation. Overmatch is not "credit"
pursuant to § 35.6285(c)(3).
(e) Cost sharing. The recipient must
comply with the requirements regarding
cost snaring described in 40 CFR 31.24.
Finally, the recipient cannot use costs
incurred under the Core Program to
offset cost-share requirements at a site.
(f) Advance match, (1) A Cooperative
Agreement for a site-specific response
entered into after October 17,1986
cannot authorize a State to contribute
funds during remedial planning and then
apply those contributions to the
remedial action cost share (advance
match).
(2) A State may seek reimbursement
for costs incurred under Cooperative
Agreements which authorize advance
match.
(3) Reimbursements are subject to the
availability of appropriated funds.
(4) If the State does not seek
reimbursement, EPA will apply the
advance match to off-set the State's
required cost share for remedial action
at the site. The State may not use
advance match for credit at anv other
*
site, nor may the State receive
reimbursement until the conclusion of
CERCLA-funded remedial response
activities. Also, the State may not use
advance ma'ch for credit against cost-
share obligations for Core Program
Cooperative Agreements.
(5) Claims for advance match are
subject to verification by audit.
§ 35.6290 Program Income.
The recipient must comply with the
requirements regarding program income
described in 40 CFR part 31.25.
Personal Property Requirements under a
ive Agreement
§ 35.6300 General personal property
acquisition end UM requirement*.
(a) General, (1) Property may be
acquired only when authorized in the
Cooperative Agreement.
(2) The recipient must acquire the
property during the approved project
period.
(3) The recipient must:
(i) Charge property costs by site,
activity, and operable unit, as
applicable;
(ii) Document the use of the property
by site, activity, and. operable unit, as
applicable; and
(iii) Solicit and follow EPA's
instructions on the disposal of any
property purchased with CERCLA funds
as specified in § 35.6340 and § 35.6345 of
this subpart.
(b) Exception. The recipient is not
required to charge property costs by site
under a pre-remedial or Core Program
Cooperative Agreement.
§ 35.6305 Obtaining supplies.
To obtain supplies, the recipient must
agree to comply with the requirements
in |§ 35.6300, 35.6315(b), 35.6325 through
35.6340, and 35.6350 of this subpart.
Supplies obtained with Core Program
funds must be for non-site-specific
purposes. All purchases of supplies
under the Core Program must comply
with the requirements in the above
listed sections, except where these
requirements are site-specific.
§ 35.6310 Obtaining equipment.
To obtain equipment, the recipient
must agree to comply with the
requirements in § 35.6300 and §§ 35.6315
through 35.6350 of this subpart.
§ 35.6315 Alternative methods for
obtaining property.
(a) Purchase equipment with recipient
funds. The recipient may purchase
equipment with the recipient's own
funds and may charge EPA a fee for
using equipment on a CERCLA-funded
project. The fee must be based on a
usage rate, subject to the usage rate
requirements in § 35.6320 of this subpart.
(b) Borrow federally owned property.
The recipient may borrow federally
owned property, with the exception of
motor vehicles, for use on CERCLA-
funded projects. The loan of the
federally owned property may only
extend through the project period. At the
end of the project period, or when the
federally owned property is no longer
needed for the project, the recipient
must return the property to the Federal
Government.
(c) Lease, use contractor services, or
purchase with CERCLA funds. To
acquire equipment through lease, use of
contractor services, or purchase with
CERCLA funds, the recipient must
conduct and document a cost
comparison analysis to determine which
of these methods of obtaining equipment
is the most cost effective. In order to
obtain the equipment, the recipient must
submit documentation of the cost
comparison analysis to EPA for
approval. The recipient must obtain
equipment through the most cost
effective method, subject to the
requirements listed below:
(1) Lease or rent equipment. If it is the
most cost effective method of
acquisition, the recipient may lease or
rent equipment, subject only to the
requirements in § 35.6300 of this subpart.
(2) Use contractor services (i) If it is
the most cost effective method of
acquisition, the recipient may hire the
services of a contractor.
(ii) The recipient must obtain award
official approval before authorizing the
contractor to purchase equipment with
CERCLA funds. (See § 35.6325 of this
subpart regarding the title and vested
interest of equipment purchased with
CERCLA funds.) This does not apply for
recipients who have used the sealed
bids method of procurement.
(iii) The recipient must require the
contractor to allocate the cost of the
contractor services by site, activity, and
operable unit, as applicable.
(3) Purchase equipment with CERCLA
funds. If equipment purchase is the most
cost-effective method of obtaining the
equipment, the recipient may purchase
the equipment with CERCLA fund
purchase equipment with CERC
funds, the recipient must comply
the following requirements:
(i) The recipient must include in the
Cooperative Agreement application a
list of all items of equipment to be
purchased with CERCLA funds, with the
price of each item.
(ii) If the equipment is to be used on
sites, the recipient must allocate the cost
of the equipment by site, activity, and
operable unit, as applicable, by applying
a usage rate subject to the usage rate
requirements in 5 35.6320 of this subpart.
(iii) The recipient may not use
CERCLA funds to purchase a
transportable or mobile treatment
system.
(iv) Equipment obtained with Core
Program funds must be for non-site-
specific purposes. All purchases of
equipment must comply with the
requirements in § 35.6300, and
§5 35.6310 through 35.6350 of this
subpart, except where these
requirements are site-specific.
(35.6320 Usage rate.
(a) Usage rate approval. To charge
EPA a fee for use of equipment
purchased with recipient funds or to
allocate the cost of equipment by site,
activity, and operable unit, as
applicable, the recipient must a
usage rate. The recipient must s
documentation of the usage rate
computation to EPA. The EPA-approved
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usag:,' rate must be included in the
Cooperative Agreement before the
recipient incurs these equipment costs.
(b) Usage rate application. The
recipient must record the use of the
equipment by site, activity, and operable
unit, as applicable, and must apply the
usage rate to calculate equipment
charges by site, activity, and operable
unit, as applicable. For Core Program
and pre-remedial activities, the recipient
is not required to apply a usage rate
§ 35.6325 Title and EPA inttrttt In
CERCLA-funded property.
(a) EPA's interest in CERCLA-funded
property. EPA has an interest (the
percentage of EPA's participation in the
total award) in both equipment and
supplies purchased with CERCLA funds.
(b) Title in CERCLA-funded property.
Title in both equipment and supplies
purchased with CERCLA funds vests in
the recipient.
(1) Right to transfer title. EPA retains
the right to transfer title of all property
purchased with CERCLA funds to the
Federal Government or a third party
within 120 calendar days after project
completion or at the time of disposal.
(2) Equipment used as all or part of
the remedy. The following requirements
apply to equipment used as all or part of
the remedy:
(i) Fixed in-place equipment. EPA no
longer has an interest in fixed in-place
equipment once the equipment is
installed.
(ii) Equipment that is an integral part
of services to individuals. EPA no longer
has an interest in equipment that is an
integral part of services to individuals
such as pipes, lines, or pumps providing
hookups for homeowners on an existing
water distribution system, once EPA
certifies that the remedy is operational
and functional
§ 35.6330 Title to federally owned
property.
Title to all federalK owned property
vests in the Federal Government.
§ 35.6335 Property management
Standard*.
The recipient must comply with the
following property management
standards for property purchased with
CERCLA funds. The recipient may use
its own property management system if
it meets the following standards
(a) Control The recipient must
maintain:
(1) Property records for CERCLA-
funded property which include the
contents specified in § ^5.67001;} of thib
subpart;
(2) A control system which ensures
adequate safeguards for prevention of
loss damage, or theft of the property
The recipient must make provisions for
the thorough investigation and
documentation of any loss, damage, or
theft;
(3) Procedures to ensure maintenance
of the property in good condition and
periodic calibration of the instruments
used for precision measurements;
(4) Soles procedures to ensure the
highest possible return, if the recipient is
authorized to sell the property;
(5) Provisions for financial control
and accounting in the financial
management system of all equipment;
and
(6) Identification of all federally
owned property.
(b) Inventory and reporting for
CERCLA-funded equipment.
(1) Physical inventory. The recipient
must conduct a physical inventory at
least once every two years for all
equipment except that which is part of
the in-place remedy. The recipient must
reconcile physical inventory results with
the equipment records.
(2) Inventory reports. The recipient
must comply with requirements for
inventory reports set forth in $ 35.6660
of this subpart.
(c) Inventory and reporting for
federally owned property.
(1) Physical inventory. The recipient
must conduct a physical inventory:
(i) Annually;
(ii) When the property is no longer
needed; and
(iii) Within 90 days after the end of
the project period.
(2) Inventory reports. The recipient
must comply with requirements for
inventory reports in $ 35.6660 of this
subpart.
§35.6340 Disposal of CERCLA-fundtd
property.
(a) Equipment. For equipment which is
no longer needed, or at the end of the
project period, whichever is earlier, the
recipient must:
(1) Analyze two alternatives: the cost
of leaving the equipment in place, and
the cost of removing the equipment and
disposing of it in another manner;
(2) Document the analysis of the two
alternatives in the inventory report. See
§ 35.6660 of this subpart regarding
requirements for the inventory report.
(i] If it is most cost-effective to remove
the equipment and dispose of it in
another manner:
(A) If the equipment has a residual
fair market value of $5,000 or more, the
recipient must request disposition
instructions from EPA in the inventory
report. See { 35.6345 of this subpart for
equipment disposal options.
(B) If the equipment has a residual fair
market value of less than $5,000, the
recipient may retain the equipment for
the recipient's use on another CERCLA
site. If, however, there is any remaining
residual value at the time of final
disposition, the recipient must reimburse
the Hazardous Substance Superfund for
EPA's vested interest in the current fair
market value of the equipment at the
time of disposition.
(ii) If it is most cost-effective to leave
the equipment in place, recommend in
the inventory report that the equipment
be left in place.
(3) Submit the inventory report to
EPA, even if EPA has stopped
supporting the project.
(b) Supplies. (1) If supplies have an
aggregate fair market value of $5,000 or
more at the end of the project period, the
recipient must take one of the following
actions at the direction of EPA:
(i) Use the supplies on another
CERCLA project and reimburse the
original project for the fair market value
of the supplies;
(ii) If both the recipient and EPA
concur, keep the supplies and reimburse
the Hazardous Substance Superfund for
EPA's interest in the current fair market
value of the supplies; or
(iii] Sell the supplies and reimburse
the Hazardous Substance Superfund for
EPA's interest in the current fair market
value of the supplies, less any
reasonable selling expenses.
(2) If the supplies remaining at the end
of the project period have an aggregate
fair market value of less than $5,000, the
recipient may keep the supplies to use
on another CERCLA project. If the
recipient cannot use the supplies on
another CERCLA project, then the
recipient may keep or sell the supplies
without reimbursing the Hazardous
Substance Superfund.
§ 35.6345 Equipment dttposal options.
The following disposal options are
available:
(a) Use the equipment on another
CERCLA project and reimburse the
original project for the fair market value
of the equipment;
(b) If both the recipient and EPA
concur, keep the equipment and
reimburse the Hazardous Substance
Superfund. for EPA's interest in the
current fair market value of the
equipment;
(c) Sell the equipment and reimburse
the Hazardous Substance Superfund for
EPA's interest in the current fair market
value of the equipment, less any
reasonable selling expenses; or
(d) Return the equipment to EPA and,
if applicable, EPA will reimburse the
recipient for the recipient's
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Federal Register / Vol. 55, No. 108 / Tuesday. June 5, 1990 / Rules and Regulations
proportionate share in the current fair
market value of the equipment,
§ 35.6350 Disposal of federally owned
property.
When federally owned property is no
longer needed, or at the end of the
project, the recipient must inform EPA
that the property is available for return
to the Federal Government. EPA will
send disposition instructions to the
recipient.
Real Property Requirements under a
Cooperative Agreement
§ 35.6400 Acquisition and transfer of
Interest.
(a) An interest in real property may be
acquired only with prior approval of
EPA.
(1) If the recipient acquires real
property in order to conduct the
response, the recipient with jurisdiction
over the real property, to the extent of
its legal authority, must agree to acquire
and hold the necessary real property
interest.
(2) If it is necessary for the Federal
Government to acquire the interest in
real property to permit conduct of the
response, the State or Indian Tribe, to
the extent of its legal authority, must
agree to accept transfer of the acquired
interest on or before the completion of
the response action. States and Indian
Tribes must follow the requirements in
S§ 35.6105(b)(5) and 35.6110(b)(2),
respectively, of this subpart.
(b) The recipient must comply with
applicable Federal regulations for real
property acquisition under assistance
agreements contained in part 4 of this
chapter, "Uniform Relocation
Assistance and Real Property
Acquisition for Federal and Federally-
Assisted Programs."
§ 35.6405 Use.
The recipient must comply with the
requirements regarding real property
described in 40 CFR 31.31.
Copyright Requirements under a
Cooperative Agreement
§ 35.6450 General requirements.
The recipient must comply with the
requirements regarding copyrights
described in 40 CFR 31.34. The recipient
must comply with the requirements
regarding contract copyright provisions
described in § 35.6595(b)(3) of this
subpart.
Use of Recipient Employees ("Force
Account") under a Cooperative
Agreement
§ 35.6500 General requirements.
(a) Force Account work is the use of
the recipient's own employees or
equipment for construction,
construction-related activities (including
architecture and engineering services),
or repair or improvement to a facility.
When using Force Account work, the
recipient must demonstrate that the
employees can complete the work as
competently as, and more economically
than, contractors, or that an emergency
necessitates the use of the Force
Account.
(b) Where the value of Force Account
services exceeds $25,000, the recipient
must receive written authorization for
use from the award official.
Procurement Requirements under a
Cooperative Agreement
§ 35.6550 Procurement system standards.
(a) Recipient standards(1)
Procurement system evaluation, (i) An
applicant or recipient must evaluate its
own procurement system to determine if
the system meets the intent of the
requirements of this subpart. After
evaluating its procurement system, the
applicant or recipient must complete the
"Procurement System Certification"
(EPA Form 5700-48) and submit the form
to EPA with its application.
(ii) The certification will be valid for
two years or for the length of the project
period specified in the Cooperative
Agreement, whichever is greater, unless
the recipient substantially revises its
procurement system or the award
official determines that the recipient is
not following the intent of the
requirements in this part. (See
subparagraph (a)(4) of this section
regarding EPA right to review.) If the
recipient substantially revises its
procurement system, the recipient must
re-evaluate its system and submit a
revised EPA Form 5700-48.
(2) Certified procurement system.
Even if the applicant or recipient has
certified that its procurement system
meets the intent of the requirements of
this subpart, the EPA award official
retains the authority as stated in:
(i) Section 35.6565(d)(l)(iii),
"Noncompetitive proposals," regarding
award official authorization of
noncompetitive proposals;
(ii) Section 35.6565(b), "Sealed bids
(formal advertising),11 regarding award
official approval for the use of a
procurement method other than sealed
bidding for a remedial action award
contract, except for Architectural/
^^^
Engineering services and post-removal
site control;
(iii) Section 35.6550(a)(9), "Protests,"
regarding EPA review of protests; and
(iv) 40 CFR 31.36(g)(2)(iv), "Awarding
Agency Review," regarding the review
of proposed awards over $25,000 which
are to be awarded to other than the
apparent low bidder under a sealed bid
procurement.
(3) Noncertifiedprocurement system.
If the applicant or recipient has not
certified that its procurement system
meets the intent of the requirements of
this subpart, then the recipient must
follow the requirements of this subpart
and allow EPA preaward review of
proposed procurement actions that will
use EPA funds. In addition, the
recipient's contractors and
subcontractors must submit their cost or
price data on EPA Form 5700^*1, "Cost
or Price Summary Format for
Subagreements Under U.S. EPA Grants,"
or in another format which provides
information similar to that required by
EPA Form 5700-41. This specific
requirement is an addition to the
requirements regarding cost and price
analysis described in § 35.6585 of this
subpart.
(4) EPA review. EPA reserves
to review any recipient's procurem
system or procurement action under a
Cooperative Agreement.
(5) Code of conduct. The recipient
must comply with the requirements of 40
CFR 31.36(b)(3), which describes
standards of conduct for employees,
officers, and agents of the recipient.
(6) Completion of contractual and
administrative issues, (i) The recipient
is responsible for the settlement and
satisfactory completion in accordance
with sound business judgement and
good administrative practice of all
contractual and administrative issues
arising out of procurements under the
Cooperative Agreement.
(ii) EPA will not substitute its
judgement for that of the recipient
unless the matter is primarily a Federal
concern.
(iii) Violations of law will be referred
to the local, State, Tribal, or Federal
authority having proper jurisdiction.
(7) Selection procedures. The recipient
must have written selection procedures
for procurement transactions.
(i) EPA may not participate in a
recipient's selection panel except to
provide technical assistance. EPA staff
providing such technical assista
(A) Shall constitute a minorit_
selection panel (limited to making
recommendations on qualified offers
and acceptable proposals based on
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published evaluation criteria) for the
contractor selection process; and
(B) Are not permitted to participate m
the negotiation and award of contracts.
(ii) When selecting a contractor.
recipients:
(A) May not use EPA contractors to
provide any support related to procuring
a State contractor.
(B) May use the Corps of Engineers for
review of State bidding documents,
requests for proposals and bids and
proposals received.
(8) Award The recipient may award a
contract only to a responsible
contractor, as described m 40 CFR
31.36(b)(8), and must ensure that each
contractor performs in accordance with
all the provisions of the contract. (See
also 35.6560 of this subpart regarding
debarred and suspended contracts.)
(9) Protest procedures. The recipient
must comply with the requirements
described in 40 CFR 31.36(b)(12)
regarding protest procedures.
(10) Reporting. The recipient must
comply with the requirements for
procurement reporting contained in
§ 35.6665 of this subpart.
(11) Intergovernmental agreements, (i)
To foster greater economy and
efficiency, recipients are encouraged to
enter into intergovernmental agreements
for procurement or use of common goods
and services.
(ii) Although intergovernmental
agreements are not subject to the
requirements set forth at §§ 35.6550
through 35.6610, all procurements under
intergovernmental agreements are
subject to these requirements except for
procurements that are:
(A) Incidental to the purpose of the
assistance agreement; and
(B) Made through a central public
procurement unit.
(12) Value engineering. The recipient
is encouraged to include value
engineering clauses in contracts for
construction projects of sufficient size to
offer reasonable opportunities for cost
reductions.
(b) Contractor standards(1)
Disclosure requirements regarding
Potentially Responsible Party
relationships. The recipient must require
each prospective contractor to provide
with its bid or proposal:
(i) Information on its financial and
business relationship with all PRPs at
the site and with the contractor's parent
companies, subsidiaries, affiliates,
subcontractors, or current clients at the
site. Prospective contractors under a
Core Program Cooperative Agreement
must provide comparable information
for all sites within the recipient's
jurisdiction (This disclosure
requirement encompasses past financial
and business relationships, including
services related to any proposed or
pending litigation, with such parties);
(ii) Certification that, to the best of its
knowledge and behef, it has disclosed
such information or no such information
exists; and
(iii) A statement that it shall disclose
immediately any such information
discovered after submission of its bid or
proposal or after award. The recipient
shall evaluate such information and if a
member of the contract team has a
conflict of interest which prevents the
team from serving the best interests of
the recipient, the prospective contractor
may be declared nonresponsible and the
contract awarded to the next eligible
bidder or offerer.
(2) Conflict of interest(i) Conflict of
interest notification. The recipient must
require the contractor to notify the
recipient of any actual, apparent, or
potential conflict of interest regarding
any individual working on a contract
assignment or having access to
information regarding the contract. This
notification shall include both
organizational conflicts of interest and
personal conflicts of interest. If 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.
(ii) Contract provisions. The recipient
must incorporate the following
provisions or their equivalents into all
contracts, except those for well-drilling,
fence erecting, plumbing, utility hook-
ups, security guard services, or electrical
services:
(A) Contractor data. The contractor
shall not provide data generated or
otherwise obtained in the performance
of contractor responsibilities under a
contract to any party other than the
recipient, EPA, or its authorized agents
for the life of the contract, and for a
period of five years after completion of
the contract.
(B) Employment. The contractor shall
not accept employment from any party
other than the recipient or Federal
agencies for work directly related to the
site(s) covered under the contract for
five years after the contract has
terminated. The recipient agency may
exempt the contractor from this
requirement through a written release.
This release must include EPA
concurrence.
(3) Certification of independent price
determination. The recipient must
require that each contractor 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.
(4) Recipient's Contractors The
recipient must require its contractor to
comply with the requirements in
|§ 35.6270(a) (1) and (2); 35.6320 (a) and
(b); 35.6335; 35.6700; and 35.6705. For
additional contractor requirements, see
also |§ 35.6710(c); 35.6590(c); and
35.6610.
§35.6555 Competition.
The recipient must conduct all
procurement transactions in a manner
providing maximum full and open
competition.
(a) Restrictions on competition.
Inappropriate restrictions on
compeMion include the following:
(1) Placing unreasonable requirements
on firms in order for them to qualify to
do business;
(2) Requiring unnecessary experience
and excessive bonding requirements;
(3) Noncompetitive pricing practices
between firms or between affiliated
companies;
(4) Noncompetitive awards to
consultants that are on retainer
contracts;
(5) Organizational conflicts of interest;
(6) Specifying only a "brand name"
product, instead of allowing "an equal"
product to be offered and describing the
performance of other relevant
requirements of the procurement; and
(7) Any arbitrary action in the
procurement process.
(b) Geographic and Indian Tribe
preferences(1) Geographic. When
conducting a procurement, the recipient
must prohibit the use of statutorily or
administratively imposed in-State or
local geographical preferences in
evaluating bids or proposals. However,
nothing in this section preempts State
licensing laws. In addition, when
contracting for architectural and
engineering (A/E) services, the recipient
may use geographic location as a
selection criterion, provided that when
geographic location is used, its
application leaves an appropriate
number of qualified firms, given the
nature and size of the project, to
compete for the contract.
(2) Indian Tribe. If the project benefits
Indians, the recipient must comply with
the Indian Self-Determination and
Education Assistance Act of 1975 (Pub.
L. 93-638).
(c) Written specifications. The
recipient's written specifications must
include a clear and accurate description
of the technical requirements and the
qualitative nature of the material,
product or service to be procured.
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Federal Register / Vol. 55. No. 108 / Tuesday. )une 5. 1990 / Rules and Regulations
(1) This description must not contain
features which undulv restrict
*
competition, unless the features are
necessary to:
(ij Test or demonstrate a specific
thing;
(ii) Provide for necessary
interchangeability of parts and
equipment; or
(iii) Promote innovative technologies.
(2) The recipient must avoid the use of
detailed product specifications if at ail
possible.
(d) Public notice. When soliciting bids
or proposals, the recipient must allow
sufficient time (generally 30 calendar
days) between public notice of the
proposed project and the deadline for
receipt of bids or proposals. The
recipient must publish the public notice
in professional journals, newspapers, or
publications of general circulation over
a reasonable area.
(e) Prequalified lists. Recipients may
use prequalified lists of persons, firms,
or products to acquire goods and
services. The list must be current and
include enough qualified sources to
ensure maximum open and free
competition. Recipients must not
preclude potential bidders from
qualifying during the solicitation period.
$35.6560 Matter fist of debarred,
suspended, and voluntarily excluded
persons.
While evaluating bids or proposals,
the recipient must consult the most
current "List of Parties Excluded from
Federal Procurement or
Nonprocurement Programs" to ensure
that the firms submitting proposals are
not prohibited from participation in
assistance programs. The recipient must
comply with the requirements regarding
subawards to debarred and suspended
parties described in 40 CFR 31.35.
£ 35.6565 Procurement methods.
The recipient must comply with the
requirements for payment to consultants
described in 40 CFR 31.36(j). In addition,
the recipient must comply with the
following requirements:
[a] Small purchase procedures. Small
purchase procedures are those relatively
simple and informal procurement
methods for securing services, supplies,
or other property that do not cost more
than $25,000 in the aggregate. If small
purchase procurements are used, the
recipient must obtain and document
price or rate quotations from an
adequate number of qualified sources.
(b) Sealed bids (formal advertising).
(For a remedial action award contract,
except for Architectural/Engineering
services and post-removal site control,
the recipient must obtain the award
official's approval to use a procurement
method other than the sealed bid
method.) Bids are publicly solicited and
a fixed-price contract (lump sum or unit
price) is awarded to the responsible
bidder whose bid, conforming with all
the material terms and conditions of the
invitation for bids, is the lowest in price.
(1) In order for the recipient to use the
sealed bid method, the following
conditions must be met:
(i) A complete, adequate, and realistic
specification or purchase description is
available;
(ii) Two or more responsible bidders
are willing and able to compete
effectively for the business; and
(iii) The procurement lends itself to a
fixed-price contract and the selection of
the successful bidder can be made
principally on the basis of price.
(2) If the recipient uses the sealed bid
method, the recipient must comply with
the following requirements:
(i) Publicly advertise the invitation for
bids and solicit bids from an adequate
number of known suppliers, providing
them sufficient time prior to the date set
for opening the bids;
(ii) The invitation for bids, which must
include any specifications and pertinent
attachments, must define the items or
services in order for the bidder to
properly respond;
(iii) Publicly open all bids at the time
and place prescribed in the invitation
for bids;
(iv) Award the fixed-price contract in
writing to the lowest responsive and
responsible bidder. Where specified in
bidding documents, the recipient shall
consider factors such as discounts,
transportation cost, and life cycle costs
in determining which bid is lowest. The
recipient may only use payment
discounts to determine the low bid when
prior experience indicates that such
discounts are usually taken advantage
of; and
(v) If there is a sound documented
reason, the recipient may reject any or
all bids.
(c) Competitive proposals. The
technique of competitive proposals is
normally conducted with more than one
source submitting an offer, and either a
fixed-price or cost-reimbursement type
contract is awarded. It is generally used
when conditions are not appropriate for
the use of sealed bids. If the recipient
uses the competitive proposal method,
the following requirements apply:
(1) Recipients must publicize requests
for proposals and all evaluation factors
and must identify their relative
importance. The recipient must honor
any response to publicized requests for
proposals to the maximum extent
practical;
(2) Recipients must solicit proposals
from an adequate number of qualified
sources;
(3) Recipients must have a method for
conducting technical evaluations of the
proposals received and for selecting
awardees;
(4) Recipients must award the
contract to the responsible firm whose
proposal is most advantageous to the
program, with price and other factors
considered; and
(5) Recipients may use competitive
proposal procedures for qualifications-
based procurement of architectural/
engineering (A/E) professional services
whereby competitor's qualifications are
evaluated and the most qualified
competitor, is selected, subject to
negotiation of fair and reasonable
compensation. This method, where price
is not used as a selection factor, may
only be used in the procurement of A/E
professional services. The recipient may
not use this method to purchase other
types of services even though A/E firms
are a potential source to perform the
proposed effort.
(d) Noncompetitive proposals. (I) The
recipient may procure by
noncompetitive proposals only wh
award of e contract is infeasible u
small purchase procedures, sealed
or competitive proposals, and one of the
following circumstances applies:
(i) The item is available only from a
single source;
(ii) The public exigency or emergency
for the requirement will not permit a
delay resulting from competitive
solicitation (a declaration of an
emergency under State law does not
necessarily constitute an emergency
under the EPA Superfund program's
criteria);
(iii) The award official authorized
noncompetitive proposals; or
(iv) After solicitation of a number of
sources, competition is determined to be
inadequate.
(2) When using noncompetitive
procurement, the recipient must conduct
a cost analysis in accordance with the
requirements described in { 35.6585 of
this subpart.
§ 35.6570 UM of tht Mmt engineer during
eubeequent phases of response.
(a) If the public notice clearly stated
the possibility that the firm or individual
selected could be awarded a contract
for follow-on services and initial
procurement complied with the
procurement requirements of this
subpart, the recipient of a CERC
remedial response Cooperative
Agreement may use the engineer
procured to conduct any or all of the
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follow-on engineering activities without
going through the public notice and
evaluation procedures.
(b) The recipient may also use the
same engineer during subsequent phases
of the project in the following cases
(1) Where the recipient conducted the
RI, FS, or design activities without EPA
assistance but is using CERCLA funds
for follow-on activities, the recipient
may use the engineer for subsequent
work provided the recipient certifies:
(i) That it complied with the
procurement requirements in § 35.6565
of this subpart when it selected the
engineer and the code of conduct
requirements described in 40 CFR
31.36(b)(3).
(ii) That any CERCLA-funded contract
between the engineer and the recipient
meets all of the other provisions as
described in the procurement
requirements in this subpart.
(2) Where EPA conducted the RI, FS,
or design activities but the recipient will
assume the responsibility for subsequent
phases of response under a Cooperative
Agreement, the recipient may use, with
the award official's approval, EPA's
engineer contractor without further
public notice or evaluation provided the
recipient follows the rest of the
procurement requirements of this
subpart to award the contract.
§ 35.6575 Restrictions on typas of
contracts.
(a) Prohibited contracts. The
recipient's procurement system must not
allow cost-plus-percentage-of-cost (e.g.,
a multiplier which includes profit) or
percentage-of-construction-cost types of
contracts.
(b) Removal. Under a removal
Cooperative Agreement, the recipient
must award a fixed price contract (lumj'
sum. unit price, or a combination of the
two) when procuring contractor suppon
regardless of the procurement method
selected, unless the recipient obtains the
award official's prior written approval
(c) Time and material contracts. The
recipient may use time and material
contracts only if no other type of
contract is suitable, and if the contract
includes a ceiling price that the
contractor exceeds at its own risk.
$ 35.6500 Contracting with minority and
woman'* business enterprises (MBE/WBEK
mall businesses, and labor surplus arts
firms.
(a) Procedures, The recipient must
comply with the six steps described in
40 CFR 31.36(e)(2) to ensure that MBEs,
WBEs, and small businesses are used
whenever possible as sources of
supplies, construction, and services.
Tasks to encourage small, minority, and
women's business utilization in the
Superfund program are eligible for
funding under Core Program
Cooperative Agreements.
(b) Labor surplus firms. EPA
encourages recipients to procure
supplies and services from labor surplus
area firms.
(c) "Fairshare"objectives. It is EPA's
policy that recipients award a fair share
of contracts to small, minority and
women's businesses. The policy requires
that fair share objectives for minority
and women-owned business enterprises
be negotiated with the States and/or
recipients, but does not require fair
share objectives be established for small
businesses.
(1) Each recipient must establish an
annual "fair share" objective for MBE
and WBE use. A recipient is not
required to attain a particular statistical
level of participation by race, ethnicity,
or gender of the contractor's owners or
managers.
(2) If the recipient is awarded more
than one Cooperative Agreement during
the year, the recipient may negotiate an
annual fair share for ail Cooperative
Agreements for that year. It is not
necessary to have a fair share for each
Cooperative Agreement. When a
Cooperative Agreement is awarded to a
recipient with which a "fair share"
agreement has not been negotiated, the
recipient must not award any contracts
under the Cooperative Agreement until
the recipient has negotiated a fair share
objective with EPA,
§35.6585 Coat and prtoa analysis.
(a) General, The recipient must
conduct and document a cost or price
analysis in connection with every
procurement action including contract
modification.
(1) Cost analysis. The recipient must
conduct and document a cost analysis
for all negotiated contracts over $25,000
and for all change orders regardless of
price. A cost analysis is not required
when adequate price competition exists
and the recipient can establish price
reasonableness. The recipient must base
its determination of price
reasonableness on a catalog or market
price of a commercial product sold in
substantial quantities to the general
public, or on prices set by law or
regulation.
(2) Price analysis. In all instances
other than those described in (a)(l) of
this section, the recipient must perform
a price analysis to determine the
reasonableness of the proposed contract
price.
(b) Profit analysis. For each contract
in which there is no price competition
and in all cases in which cost analysis is
performed, the recipient must negotiate
profit as a separate element of the price.
To establish a fair and reasonable profit,
consideration will be given to the
complexity of the work to be performed,
the risk borne by the contractor, the
contractor's investment, the amount of
subcontracting, the quality of its record
of past performance, and industry profit
rates in the surrounding geographical
area for similar work.
5 35.6590 Bonding and insurance.
(a) General. The recipient must meet
the requirements regarding bonding
described in 40 CFR 31.36(h). The
recipient must clearly and accurately
state in the contract documents the
bonds and insurance requirements,
including the amounts of security
coverage that a bidder or offeror must
provide.
(b) Indemnification. When adequate
pollution liability insurance is not
available to the contractor, EPA may
indemnify response contractors for
liability related to damage from releases
arising out of the contractor's negligent
performance. The recipient must comply
with the requirements regarding
indemnification described in section 119
of CERCLA.
(c) Accidents and catastrophic loss.
The recipient must require the
contractor to provide insurance against
accidents and catastrophic loss to
manage any risk inherent in completing
the project.
§ 35.6595 Contract provisions.
(a) General. Each contract must be a
sound and complete agreement, and
include the following provisions:
(1) Nature, scope, and extent of work
to be performed;
(2) Time frame for performance;
(3) Total cost of the contract; and
(4) Payment provisions.
(b) Other contract provisions.
Recipients' contracts must include the
following provisions:
(1) Energy efficiency. A contract must
comply with mandatory standards and
policies on energy efficiency contained
in the State's energy conservation plan
which is issued in compliance with the
Energy Policy and Conservation Act
(Pub. L 94-163).
(2) Violating facilities. Contracts in
excess of $100,000 must contain a
provision which requires contractor
compliance with all applicable
standards, orders or requirements
issued under section 306 of the Clean
Air Act (42 U.S.C. 1857(h)). section 508
of the Clean Water Act (33 U.S.C. 1368)
Executive Order 11738, and EPA
regulations (40 CFR part 15) which
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Federal Register / Vol. 55, No. 108 / Tuesday, June 5, 1990 / Rules and Regulations
23023
prohibit the use of facilities included on
the EPA List of Violating Facilities under
nonexempt Federal contracts, grants or
loans.
(3) Patents, inventions, and
copyrights. All contracts must include
notice of EPA requirements and
regulations pertaining to reporting and
patent rights under any contract
involving research, developmental,
experimental or demonstration work
with respect to any discovery or
invention which arises or is developed
while conducting work under a contract.
This notice shall also include EPA
requirements and regulations pertaining
to copyrights and rights to data
contained in 40 CFR 31.34.
(4) Labor standards. The recipient
must include a copy of EPA Form 5720-4
("Labor Standards Provisions for
Federally Assisted Construction
Contracts") in each contract for
construction (as defined by the
Secretary of Labor in 29 CFR part 5).
The form contains the Davis-Bacon Act
requirements (40 U.S.C. 276a-276a-7),
the Copeland Regulations (29 CFR part
3), the Contract Work Hours and Safety
Standards Act Overtime Compensation
(940 U.S.C. 327-333), and the
nondiscrimination provisions in
Executive Order 11246, as amended.
(5) Conflict of interest. The recipient
must include provisions pertaining to
conflict of interest as described in
§ 35.6550(b)[2)(ii) of this subpart.
(c) Model clauses. The recipient must
comply with the requirements regarding
model contract clauses described in 40
CFR 33.1030 (1987).
9 35.6600 Contractor claims.
(a) General. The recipient must
conduct an administrative and technical
review of each claim before EPA will
consider funding these costs.
(b) Claims settlement. The recipient
may incur costs (including legal,
technical and administrative) to assess
the merits of or to negotiate the
settlement of a claim by or against the
recipient under a contract, provided:
(1) The claim arises from work within
the scope of the Cooperative Agreement;
(2) A formal Cooperative Agreement
amendment is executed specifically
covering the costs before they are
incurred;
(3) The costs are not incurred to
prepare documentation that should be
prepared by the contractor to support a
claim against the recipient; and
(4) The award official determines that
there is a significant Federal interest in
the issues involved in the claim.
(c) Claims defense. The recipient may
incur costs (including legal, technical
and administrative) to defend against a
contractor claim for increased costs
under a contract or to prosecute a claim
to enforce a contract provided:
(1) The claim arises from work within
the scope of the Cooperative Agreement;
(2) A formal Cooperative Agreement
amendment is executed specifically
covering the costs before they are
incurred;
(3) Settlement of the claim cannot
occur without arbitration or litigation;
(4) The claim does not result from the
recipient's mismanagement;
(5) The award official determines that
there is a significant Federal interest in
the issues involved in the claim; and
(6) In the case of defending against a
contractor claim, the claim does not
result from the recipient's responsibility
for the improper action of others.
§35.6605 Privity of contract.
Neither EPA nor the United States
shall be a party to any contract nor to
any solicitation or request for proposals.
§ 35.6610 Contracts awarded by a
contractor.
The recipient must require its
contractor to comply with the following
provisions in the award of contracts (i.e.
subcontracts). (This section does not
apply to a supplier's procurement of
materials to produce equipment,
materials and catalog, off-the-shelf, or
manufactured items.)
(a) The requirements regarding
debarred, suspended, and voluntarily
excluded persons in 5 35.0560 of this
subpart.
(b) The limitations on contract award
in S 35,6550(a)(8) of this subpart.
(c) The requirements regarding
minority and women's business
enterprises, and small business in
$ 35.6580 of this subpart.
(d) The requirements regarding
specifications in $ 35.6555 (a)(6) and (c)
of this subpart.
(e) The Federal cost principles in 40
CFR 31.22.
(f) The prohibited types of contracts in
S 35.6575(a) of this subpart.
(g) The cost, price analysis, and profit
analysis requirements in i 35.6585 of
this subpart.
(h) The applicable provisions in
{ 35.6595 (b) and (c) of this subpart.
(i) The applicable provisions in
§ 35.6555(b)(2).
Reports Required Under a Cooperative
Agreement
f 35.6650 Quarterly progreaa reports.
(a) Reporting frequency. The recipient
must submit progress reports quarterly
on the activities delineated in the
Statement of Work. EPA may not
require submission of progress reports
more often than quarterly. The re
must be submitted within 30 days c
end of each Federal Fiscal quarter,
(b) Content. The quarterly progress
report must contain the following
information:
(1) An explanation of work
accomplished during the reporting
period, delays, or other problems, if any,
and a description of the corrective
measures that are planned. For pre-
remedial Cooperative Agreements, the
report must include a list of the site-
specific products completed and the
estimated number of technical hours
spent to complete each product.
(2) A comparison of the percentage of
the project completed to the project
schedule, and an explanation of
significant discrepancies.
(3) A comparison of the estimated
funds spent to date to planned
expenditures and an explanation of
significant discrepancies. For remedial.
enforcement, and removal reports, the
comparison must be on a per task basis.
(4) An estimate of the time and funds
needed to complete the work required in
the Cooperative Agreement, a
comparison of that estimate to the time
and funds remaining, and a justification
for any increase.
imcarl^r
$35.6655 Notfflcatton of efcn
developments.
Events may occur between the
scheduled performance reporting dates
which have significant impact upon the
Cooperative Agreement-supported
activity. In such cases, the recipient
must inform the EPA project officer as
soon as the following types of
conditions become known:
(a) Problems, delays, or adverse
conditions which will materially impair
the ability to meet the objective of the
award. This disclosure must include a
statement of the action taken, or
contemplated, and any assistance
needed to resolve the situation.
(b) Favorable developments which
enable meeting time schedules and
objectives sooner or at less cost than
anticipated or producing more beneficial
results than originally planned.
§ 35.6660 Property Inventory reporta.
(a) CERCLA-fundedproperty(I)
Content. The report must contain the
following information:
(i) Classification and value of
remaining supplies;
(ii) Description of all equipment
purchased with CERCLA funds^
including its current condition
(iii) Verification of the currerTWffe am
continued need for the equipment by
-------
site, activity, and operable unit, as
applicable;
(iv) Notification of any property which
has been stolen or vandalized; and
(v) A request for disposition
instructions for any equipment no longer
needed on the project.
(2) Reporting frequency. The recipient
must submit an inventory report to EPA
at the following times.
(i) Within 90 days after completing
any CERCLA-funded project or any
response activity at a site; and
(ii) When the equipment is no longer
needed for any CERCLA-funded project
or any response activity at a site.
(b) Federally owned property(1)
Content. The recipient must include the
following information for each federally
owned item in the inventory report
(i) Description;
(ii) Decal number,
(iii) Current condition; and
(iv) Request for disposition
instructions.
(2) Reporting frequency. The recipient
must submit an inventory' report to the
appropriate EPA property accountable
officer at the following times;
(i) Annually, due to EPA on the
anniversary date of the award;
(ii) When the property is no longer
needed; and
(iii) Within 90 days after the end of
the project period.
§ 35.6665 Procurement reports.
(a) Department of Labor (DOL)
Reports(1) Content. The recipient
must notify the DOL Regional Office of
Compliance, in writing, of each
construction contract which has or is
expected to have an aggregate value of
over $10,000 within a 12-month period.
The report must include the following:
(i) Construction contractor's name,
address, telephone number, and
employee identification number;
(ii) Award amount;
(iii) Estimated start and completion
dates; and
(iv) Project number, name, and site
location.
(2) Reporting frequency. The recipient
must notify the DOL Office of
Compliance within 10 calendar days
after the award of each such
construction contract. The recipient
must submit a copy of the report to the
EPA project officer.
(b) Minority and women's business
enterprise (MBE/WBE) Reports. (1) The
recipient must report on its use of MBE
and WBE firms by submitting a
completed Minority and Women's
Business Utilization Report (SF-334) to
the award official. Reporting
commences with the recipient's award
of its first contract and continues until it
and its contractors have awarded their
last contract for the activities or tasks
identified in the Cooperative Agreement
The recipient must submit the MBE/
WBE Utilization Report within 30 days
after the end of each Federal fiscal
quarter, regardless of whether the
recipient awards a contract to an MBE
or WBE during that quarter.
(2) The recipient must also report on
its efforts to encourage MBE
participation in the Superfund program
pursuant to CERCLA § 105(f)-
Information on the recipient's efforts to
encourage MBE participation in the
Superfund program may be included in
each SF-334 submitted quarterly, but is
required in the SF-334 submitted for the
fourth quarter, due November 1 of each
year.
§35.6670 Financial reports.
(a) General. The recipient must
comply with the requirements regarding
financial reporting described in 40 CFR
31.41.
(b) Financial Status Report(1)
Content, (i) The Financial Status Report
(SF-269) must include financial
information by site, activity, and
operable unit, as applicable.
(ii) A final Financial Status Report
(FSR) must have no unliquidated
obligations. If any obligations remain
unliquidated, the FSR is considered an
interim report and the recipient must
submit a final FSR to EPA after
liquidating all obligations.
(2) Reporting frequency* The recipient
must file a Financial Status Report as
follows;
(i) Annually due 90 days after the end
of the Federal fiscal year or as specified
in the Cooperative Agreement; or if
quarterly or semiannual reports are
required in accordance with 40 CFR
31.41(b)(3), due 30 days after the
reporting period;
(ii) Within 90 calendar days after
completing each CERCLA-funded
response activity at a site (submit the
FSR only for each completed activity);
and
(iii) Within 90 calendar days after
termination or closeout of the
Cooperative Agreement.
Records Requirements Under a
Cooperative Agreement
{35.6700 Protect records.
The lead agency for the response
action must compile and maintain an
administrative record consistent with
section 113 of CERCLA, the National
Contingency Plan, and relevant EPA
policy and guidance. In addition,
recipients of assistance (whether lead or
support agency) are responsible for
maintaining project files as described
below.
(a) Genera]. The recipient must
maintain project records by site,
activity, and operable unit, as
applicable.
(b) Financial records. The recipient
must maintain records which support
the following items:
(1) Amount of funds received and
expended; and
(2) Direct and indirect project cost
(c) Property records. The recipient
must maintain records which support
the following items:
(1) Description of the property,
(2) Manufacturer's serial number.
model number, or other identification
number;
(3) Source of the property, including
the assistance identification number;
(4) Information regarding whether the
title is vested in the recipient or EPA;
(51) Unit acquisition date and cost;
(6) Percentage of EPA's interest,
(7) Location, use and condition (by
site, activity, and operable unit, as
applicable) and the date this
information was recorded; and
(8) Ultimate disposition data.
including the sales price or the method
used to determine the price, or the
method used to determine the value of
EPA's interest for which the recipient
compensates EPA in accordance with
5§ 35.6340, 35.6345. and 35.6350 of this
subpart.
(d) Procurement records(1) General
The recipient must maintain records
which support the following items, and
must make them available to the public:
(i) The reasons for rejecting any or all
bids; and
(ii) The justification for a procurement
made on a noncompetitively negotiated
basis.
(2) Procurements in excess of $25,000.
The recipient's records and files for
procurements in excess of $25,000 must
include the following information, in
addition to the information required in
paragraph (d)(l) of this section:
(i) The basis for contractor selection;
(ii) A written justification for selecting
the procurement method;
(iii) A written justification for use of
any specification which does not
provide for maximum free and open
competition;
(iv) A written justification for the
choice of contract type; and
(v) The basis for award cost or price.
including a copy of the cost or price
analysis made in accordance with
f 35.6585 of this subpart and
documentation of negotiations
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Federal Register / Vol. 55, No. 108 / Tuesday. |une 5. 1990 / Rules and Regulations
23025
(e) Other records. The recipient must
maintain records which support the
following items1
(1) Time and attendance records and
supporting documentation;
(2) Documentation of compliance with
statutes and regulations that apply to
the project; and
(3) The number of site-specific
technical hours spent to complete each
pre-remedial product.
§ 35.6705 Record* retention.
(a) Applicability. This requirement
applies to all financial and
programmatic records, supporting
documents, statistical records, and other
records which are required to be
maintained by the terms of this subpart,
program regulations, or the Cooperative
Agreement, or are otherwise reasonably
considered as pertinent to program
regulations or the Cooperative
Agreement.
(b) Length of retention period. The
recipient must maintain all records for
10 years following submission of the
final Financial Status Report unless
otherwise directed by the EPA award
official, and must obtain written
approval from the EPA award official
before destroying any records. If any
litigation, claim, negotiation, audit, cost
recovery, or other action involving the
records has been started before the
expiration of the ten-year period, the
records must be retained until
completion of the action and resolution
of all issues which arise from it, or until
the end of the regular ten-year period,
whichever is later.
(c) Substitution of microform.
Microform copies may be substituted for
the original records. The recipient must
have written EPA approval before
destroying original records. The
microform copying must be performed in
accordance with the technical
regulations concerning micrographics of
Federal Government records (36 CFR
part 1230) and EPA records management
procedures (EPA Order 2160).
(d) Starting date of retention period.
The recipient must comply with the
requirements regarding the starting
dates for records retention described in
40CFR31.42(c)(l)and(2).
§ 35.6710 Records access,
(a) Recipient requirements. The
recipient must comply with the
requirements regarding records access
described in 40 CFR 3l.42(e).
(b) Availability of records. The
recipient must, with the exception of
certain policy, deliberative, and
enforcement documents which mav be
V
held confidential, ensure that all files
are available to the public
(c) Contractor requirements. The
recipient must require its contractor to
comply with the requirements regarding
records access described in 40 CFR
31.36(0(10).
Other Administrative Requirements for
Cooperative Agreements
§35.6750 Modifications.
The recipient must comply with the
requirements regarding changes to the
Cooperative Agreement described in 40
CFR 31.30.
§ 35.6755 Monitoring program
performance.
The recipient must comply with the
requirements regarding program
performance monitoring described in 40
CFR 31.40 (a) and (e).
§ 35.6760 Enforcement and termination
for convenience.
The recipient must comply with all
terms and conditions in the Cooperative
Agreement, and is subject to the
requirements regarding enforcement of
the terms of an award and termination
for convenience described in 40 CFR
31.43 and 31.44.
§35.6765 Non-Federal audit
The recipient must comply with the
requirements regarding non-Federal
audits described in 40 CFR 31.26.
§35.6770 Dispute*.
The recipient must comply with the
requirements regarding dispute
resolution procedures described in 40
CFR 31.70.
§35.6775 Exclusion of third-party
benefits.
The Cooperative Agreement benefits
only the signatories to the Cooperative
Agreement.
§35.6760 Ooeaout
(a) Closeout of a Cooperative
Agreement, or an activity under a
Cooperative Agreement, can take place
in the following situations:
(1) After the completion of all work
for a response activity at a site; or
(2) After all activities under a
Cooperative Agreement have been
completed; or
(3) Upon termination of the
Cooperative Agreement,
(b) The recipient must comply with
the closeout requirements described in
40 CFR 31.50 and 31.51.
§ 35.6765 CoHtctton of amounts due.
The recipient must comply with the
requirements described in 40 CFR 31.52
regarding collection of amounts due.
§ 35.6790 High risk recipients.
If EPA determines that a recipient is
not responsible, EPA may impose
restrictions on the award as described
in 40 CFR 31.12.
Requirements for Administering a
Superfund State Contract (SSC)
§35.6600 General.
An SSC is required when either EPA
or a political subdivision is the lead
agency for a CERCLA response. This
rule does not address whether Indian
Tribes are subject to the requirements in
§ 35.6805(i)(2) (See $ 35.610(a)).
(a) EPA-lead SSC (Two-party SSC).
(1) An SSC with a State or Indian Tribe
is required before EPA can obligate or
transfer funds for an EPA-lead remedial
action.
(2) The State must comply with the
requirements described in §§ 35.6805
and 35.6815 of this subpart. The Indian
Tribe must comply with the
requirements described in § 35.6805 (a)
through (h), (i)(4). (1) through (v);
§ 35.6815(b); and. if appropriate,
§ 35.6815 (c) and (d).
(b) Political subdivision-lead SSC
(Three-party SSC). (1) To ensure State
involvement as required under section
121(f) of CERCLA and subpart F
National Contingency Plan, an S!
required between EPA, the State a
political subdivision before a political
subdivision may take the lead for any
phase of remedial response. The SSC
must contain, or must be amended to
include, the State's assurances pursuant
to § 35.6805(i) of this subpart before EPA
obligates funds for remedial action set
forth in the Statement of Work of the
SSC.
(2) Both the State and the political
subdivision must comply with the
requirements described in §§ 35.6805,
35.6815, and 35.6820 of this subpart.
§ 35.6605 Contents of an SSC.
The SSC must include the following
provisions:
(a) General authorities, which
documents the relevant statutes and
regulations (of each government entity
that is a party to the contract) governing
the contract;
(b) Purpose of the SSC. which
describes the response activities to be
conducted and the benefits to be
derived;
(c) Negation of agency relationship
between the signatories, which states
that no signatory of the SSC can
represent or act on the behalf of any
other signatory in any matter asafllVted
with the SSC;
(d) A site description, pursuan
§ 35.6105(a)(2)(i) of this subpart;
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(e) A site-specific Statement of Work.
pursuant to § 35.6105(a)(2)(ii) of this
subpart and a statement of whether the
contract constitutes an initial SSC or an
amendment to an existing contract;
(f) A statement of intention to follow
EPA policy and guidance;
(g) A project schedule to be prepared
during response activities;
(h) A statement desinating a primary
contact for each party to the contract,
which designates representatives to act
on behalf of each signatory in the
implementation of the contract. This
statement must document the authority
of each project manager to approve
modifications to the project so long as
such changes are within the scope of the
contract and do not significantly impact
the SSC;
(i) The CERCLA assurances, as
appropriate, as described below:
(1) Operation and maintenance. The
State must provide an assurance
pursuant to § 35.6105(b)(l) of this
subpart.
(2) Twenty-year waste capacity. The
State must provide an assurance
pursuant to § 35.6105(b)(3) of this
subpart.
(3) Off-site storage, treatment, or
disposal. If off-site storage, destruction,
treatment, or disposal is required, the
State must provide an assurance
pursuant to § 35.6105(b)(4) of this
subpart; the political subdivision may
not provide this assurance,
(4) Real Property Acquisition, When
real property must be acquired, the State
must provide an assurance pursuant to
S 35.6105(b)(5) of this subpart. An Indian
Tribe must provide an assurance
pursuant to J 35.6110(b)(2]
(5) Provision of State cost share. The
State must provide assurances for cost
sharing pursuant to § 35.6105(b)(2). Even
if the political subdivision is providing
the actual cost share, the State must
guarantee payment of the cost share in
the event of default by the political
subdivision.
(j) Cost-share conditions which
include:
(1) An estimate of the response action
cost (excluding EPA's indirect costs)
that requires cost share;
(2) The basis for arriving at this figure
(See § 35.6285(c) for credit provisions);
and
(3) The payment schedule as
negotiated by the signatories, and
consistent with either a lump-sum or
incremental-payment option. Final
payment must be made by completion of
all activities in the site-specific
Statement of Work with the exception of
any change orders and claims handled
during reconciliation of the SSC,
(k) Reconciliation provision, which
states that the SSC remains in effect
until the financial settlement of project
costs and final reconciliation of
response costs (including all change
orders, claims, overpayments,
reimbursements, etc.) ensure that both
EPA and the State have satisfied the
cost share requirement contained in
section 104 of CERCLA, as amended.
Overpayments in an SSC may not be
used to meet the cost-sharing obligation
at another site. Reimbursements for any
overpayment will be made to the payer
identified in the SSC.
(1) Amendability of the SSC, which
provides that:
(1) Formal amendments are required
when alterations to CERCLA-funded
activities are necessary or when
alterations impact the State's
assurances pursuant to the National
Contingency Plan and CERCLA, as
amended. Such amendments must
include a Statement of Work for the
amendment as described in § 35.6805(e)
above;
(2) Any change(s) in the SSC must be
agreed to, in writing, by the signatories,
except as provided elsewhere in the
SSC, and must be reflected in all
response agreements affected by the
change(s);
(m) List of Support Agency
Cooperative Agreements that are also in
place for the site;
(n) Litigation, which describes EPA's
right to bring an action against any
party under section 106 of CERCLA to
compel cleanup, or for cost recovery
under section 107 of CERCLA.
(o) Sanctions for failure to comply
with SSC terms, which states that if the
signatories fail to comply with the terms
of the SSC, EPA may proceed under the
provisions of section 104(d)(2) of
CERCLA and may seek in the
appropriate court of competent
jurisdiction to enforce the SSC or to
recover any funds advanced or any
costs incurred due to a breach of the
SSC. Other signatories to the SSC may
seek remedies in the appropriate court
of competent jurisdiction.
(p) Site access. The State or political
subdivision or Indian Tribe is expected
to use its own authority to secure access
to the site and adjacent properties, as
well as all rights-of-way and easements
necessary to complete the response
actions undertaken pursuant to the SSC;
(q) Joint inspection of the remedy.
Following completion of the remedial
action, the State and EPA will jointly
inspect the project. The SSC must
include a statement indicating the
State's approval of the final remedial
action report submitted by EPA.
(r) Exclusion of third-party benefits,
which states that the SSC is intended to
benefit only the signatories of the SSC,
and extends no benefit or right to any
third party not a signatory to the SSC,
and
(s) Any other provision deemed
necessary by all parties to facilitate the
response activities covered by the SSC
(t) State review. The State or Indian
Tribe must review and comment on the
response actions pursuant to the SSC.
Unless otherwise stated in the SSC, all
time frames for review must follow
those prescribed in the NCP.
(u) Responsible party activities.
which states that if a Responsible Party-
takes over any activities at the site, the
SSC will be modified or terminated, as
appropriate.
(v) Out-of-State or out-of-Indian
Tribal jurisdiction transfers of CERCLA
waste, which states that, unless
otherwise provided for by EPA or a
political subdivision, the State or Indian
Tribe must provide the notification
requirements described in § 35.6120.
§ 35.6815 Administrative requirements.
In addition to the requirements
specified in § 35.6805, the State and/or
political subdivision must comply with
the following:
(a) Financial administration. The
State and/or political subdivision must
comply with the following requirements
regarding financial administration:
(1) Payment. The State may pay for its
share of the costs of the response
activities in cash or credit. As
appropriate, specific credit provisions
should be included in the SSC consistent
with the requirements described in
§ 35.6285(c) of this subpart. The State
may not pay for its cost share using in-
kind services, unless the State has
entered into a support agency
Cooperative Agreement with EPA. The
use of the support agency Cooperative
Agreement as a vehicle for providing
cost share must be documented in the
SSC. If the political subdivision agrees
to provide all or part of the State's cost
share pursuant to a political
subdivision-lead Cooperative
Agreement, the political subdivision
may pay for those costs in cash or in-
kind services under that agreement. The
use of a political subdivision-lead
Cooperative Agreement as a vehicle for
providing cost share must also be
documented in the SSC. The State or
political subdivision must make
payments during the course of the site-
specific project and must complete
payments by completion of activities in
the site-specific Statement of Work. (Sec
35.6255 of this subpart for
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Federal Register / Vol. 55. No. 108 / Tuesday. June 5, 1990 / Rules and Regulations
23027
requirements concerning cost sharing
under a support agency Cooperative
Agreement.) The specific payment terms
must be documented in the SSC
pursuant to § 35.6805 of this subpart.
(2) Collection of amounts due. The
State and/or political subdivision must
comply with the requirements described
in 40 CFR 3I.52(a) regarding collection
of amounts due.
(3) Failure to comply with negotiated
payment terms. Failure to comply with
negotiated payment terms may be
construed as default by the State on its
required assurances, even if the political
subdivision is responsible for providing
all or part of the cost share. (See
{ 35.6805(i)(5) of this subpart.)
(b) Personal Property. The State,
Indian Tribe, or political subdivision is
required to accept title The following
requirements apply to equipment used
as all or part of the remedy:
(1) Fixed in-place equipment. EPA no
longer has an interest in fixed in-place
equipment once the equipment is
installed.
(2) Equipment that is an integralpari
of services to individuals. EPA no longer
has an interest in equipment that is an
integral part of services to individuals,
such as pipes, lines, or pumps providing
hookups for homeowners on an existing
water distribution system, once EPA
certifies that the remedy is operational
and functional.
(c) Reports. The State and/or political
subdivision or Indian Tribe must comply
with the following requirements
regarding reports:
(I) EPA-iead. The nature and
frequency of reports between EPA and
the State or Indian Tribe will be
specified in the SSC.
(2) Political subdivision-lead. The
political subdivision must submit to the
State a copy of all reports which the
political subdivision is required to
submit to EPA in accordance with the
requirements of its Cooperative
Agreement. (See \ 35.6650 for
requirements regarding quarterly
progress reports.)
(d) Records. The State and political
subdivision or Indian Tribe must
maintain records on a site-specific basis
The State and political subdivision or
Indian Tribe must comply with the
requirements regarding record retention
described in § 35.6705 and the
requirements regarding record access
described in § 35.6710.
§ 35.6820 Conclusion of the SSC.
In order to conclude the SSC. the
signatories must:
(a) Satisfactorily complete the
response activities at the site and make
all payments based upon project costs
determined in § 35.6805(j);
(b) Produce a final accounting of all
project costs, including change orders
and outstanding contractor claims; and
(c) Submit all State cost-share
payments to EPA (see { 35.6805(i)(5)).
undertake responsibility for O&M, and,
if applicable, accept interest in real
property (see J 35.6805(i)(4)).
[FR Doc. 90-12715 Filed 6-4-90; 8:45 amj
HUJNO COOC IMP iO M
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U.S. ENVIRONMENTAL PROTECTION AGENC1
GRANTS ADMINISTRATION DIVISION
Washington, DC 20460
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