United States
Environmental Protection
Agency
Office of
Solid Waste and
Emergency Response
Publication: 9200.2-15FS
March 1993
v>EPA An Overview of the Outyear
Liability Model (OLM)
Office of Emergency and Remedial Response
Office of Program Management 5201G
Quick Reference Fact Sheet
In 1980, Congress passed a law called the Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA), commonly called Superfund. The Superfund Amendments and Reauthorization Act (SARA) was passed
by Congress in 1986 to update and improve the Superfund law. In 1991, Congress extended Superfund's authority
through 1994. The law authorizes the Federal government to respond directly to releases, or threatened releases, of
hazardous substances that may endanger public health, welfare or the environment. Legal actions can be taken to force
parties responsible for causing the contamination to clean up those sites or reimburse the Superfund Program for the costs
of cleanup. If those responsible for site contamination cannot be found or are unwilling to clean up a site, EPA can use
monies from the Superfund Program for clean-up activity.
The name "Superfund" refers to the trust fund that was set up under CERCLA to finance these clean up actions. CERCLA
established a $1.6 billion fund which would be collected from taxes on crude oil and commercial chemicals. When
Superfund was reauthorized by Congress in 1986, the fund was increasedby $8.5 billion throughFY 1991. These monies
are made available to the Superfund directly from excise taxes on petroleum and feedstock chemicals, a tax on certain
imported chemical derivatives, an environmental tax on corporations, appropriations made by Congress from general
tax revenues, and any monies recovered or collected from parties responsible for site contamination. Reauthorization
of the Superfund was incorporated into the 1991 Budget legislation passed by Congress and signed by the President on
November 5,1990. This authority continues funding under the existing Program structure through September 30,1994.
EPA has placed 1,275 sites on the National Priority List (NPL). These NPL sites are targeted for cleanup under the
Superfund. However, this is not a complete list. Site discoveries continue, and EPA estimates that, while some sites will
be deleted after lengthy cleanups, the NPL will continue to grow. The average Remedial Action (RA) cost is $ 13.2 million
per operable unit and the average number of operable units per site is 1.8. The lead distribution for non-federal facility
Remedial Investigation/Feasibility Studies (RI/FSs) is 65% for Responsible Party (RP) leads and 35% for Fund-leads.
The lead distribution for non-federal facility RAs is 70% for RP-leads and 30% for Fund-leads. The average cost for
adding a Fund-lead site to the NPL is $27 million.
INTRODUCTION
The Outyear Liability Model (OLM) was developed to
assist the Environmental Protection Agency (EPA) Office
of Emergency and Remedial Response (OERR) in
projecting activity levels, costs, and resource needs
associated with the Superfund Program. Developed for
an IBM PC or PC-compatible computer using Lotus 1-2-
3, Version 3.1, the model is a sophisticated management
tool which interfaces with other EPA planning systems to
project these costs and resources. Designed with a high
degree of flexibility, the OLM permits the user to vary
assumptions and assess the impact of policy changes on
total Program obligations and resource needs.
The OLM combines historical trends and Program activity
levels with expected Program conditions to develop a
comprehensive analysis of Superfund Program resource
and funding needs. Superfund events currently planned
are incorporated into the model through its interface with
the Comprehensive Environmental Response,
Compensation, and Liability Information System
(CERCLIS), the planning and tracking system for the
Superfund Program. Other events not yet planned are
projected, using planning assumptions about the NPL size
and the rate at which RI/FS projects will be initiated.
The OLM incorporates the major factors affecting site-
level NPL response costs, based on modeled sequences of
events related to NPL sites and assumptions for
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approximately 100 variables (e.g., activity costs, activity
durations, etc.) for which default values are supplied. The
model allows users to modify these assumptions, either
individually or in combination, to see how such changes
may affect NPL costs and accomplishments. Thus, while
the OLM does not estimate all costs automatically, the
many variables give the user considerable flexibility to
explore a number of possible funding scenarios.
Using the model's default variables produces a "baseline"
liability estimate. In general, this baseline estimate reflects
the estimated cost of implementing Superfund
Comprehensive Accomplishment Plan (SCAP) planning
guidelines and past RA cost behavior. After creating this
baseline estimate, the user can modify selected variables
to approximate general programmatic changes to see how
they may affect outyear liabilities. For example, the user
can use the OLM to change:
Overall planned Superfund budget amounts;
The number of planned activities;
Program policies (e.g., more treatment, more
enforcement, etc.).
On the other hand, the OLM cannot estimate directly or
adjust for NPL site-level activities or changes in public
attitudes or concerns. To approximate factors such as
these within the realm of the model, the user must modify
related variables that are contained within the model.
The OLM system concept is illustrated in Exhibit 1. As
can be seen in the exhibit, the concept discusses three
components: inputs to the Model, the Model's
computational logic, and outputs from the Model. These
components are briefly discussed below.
INPUTS TO THE MODEL
The inputs that provide the basic foundation of the Model
are: CERCLIS, Superfund Budget Projections, SCAP,
and user input variables.
CERCLIS: CERCLIS is a major source of data
for the OLM. It provides information about
planned and actual activities at hazardous
substance release sites, including lead for each
activity and planned starts, completions, and
obligations forRI/FSs, Remedial Designs (RDs),
and RAs.
Superfund Budget Projections: As part of the
annual EPA budgetprocess, the Agency estimates
its overall expected costs and Full-Time
Equivalents (FTEs) for the Superfund Program
for the budget year. The OLM uses certain
planning assumptions from the budget process,
including expected activity outputs (e.g., number
of RA starts), pricing factors, and FTE pricing
factors. The Superfund budget projections also
include planned funding for other EPA offices
(such as the Office for Research and
Development) and other Federal agencies and
departments (such as the Coast Guard) that
provide assistance to the Superfund Program.
SCAP: The Superfund Comprehensive
Accomplishments Plan (SCAP) contains the basic
planning assumptions for coming fiscal year
activities, including project durations and costs.
It is a central planning tool used by EPA's
Headquarters and Regional offices to schedule
and estimate NPL site events. Given that these
factors represent EPA's best estimates for
Superfund events, they also have been
incorporated into the OLM to provide a baseline
estimate for the Program.
User Inputs: These site condition variables
provide the flexibility in the OLM that allows the
user to model possible Program scenarios. These
variables include:
- Activity Durations and Pricing Factors
(Exhibit 2);
- NPL Additions and Activity Start Ceilings;
- Distribution of Activity (Exhibit 3).
MODEL LOGIC
Using these data inputs, the OLM reflects the chain of
events that occur during the course of a site's evaluation
and cleanup under the Superfund
Program. To accomplish this, the
Model was designed with two
primary components: activity
flows and unit activity costs.
Working with these components,
the user can apply different cost,
FTE, and policy assumptions to
see how such changes affect
Superfund costs. The activity
flows and unit activity costs are
outlined below.
Activity Flows: Superfund activities have been
broken down into basic chronologies called
"activity flows," which track all remedial,
enforcement, and removal activities that can
occur at a site. The distribution of these activity
flows is dependent on the lead distribution
variables. The Model assumes, at the beginning
of the Superfund pipeline, that RI/FSs are
conducted with a 35% Fund and 65% PRP lead
division; meanwhile, at the end of the pipeline,
RAs are conducted with a 30% Fund and 70%
PRP lead distribution. These flows result in
project counts for each quarter tracked by the
Model.
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EXHIBIT 1
Outyear Liability Model System Concept
MODEL INPUTS
ACTIVITY STARTS
ACTIVITY FY90 FY91
NPL ADD.
VFUNDRI/FS
25
78
Q.
3
L _
SITE PROFILES
ACTIVITY DURATIONS
LEAD DISTRUBITION
SUBSEQUENT OU %
BUDGET PRICING
FACTORS
EVENT
RI/FS FTE $$$
VRD
BUDGET
PROJECTIONS
OTHER FEDERAL
AGENCIES &
EPA OFFICES
SCENARIO AND LIABILITY REPORTS
LIABILITY
MODEL
LIABILITY TO
COMPLETE
EXISTING SITES
SCENARIO(S)
SYSTEM LOGIC
COMPUTE OBLIGATIONS BY
YEAR TO COMPLETE CURRENT
SITES
COMPUTE OBLIGATIONS BY
YEAR TO COMPLETE
ADDITIONAL SITES (VARYING
BUDGET PRICING FACTORS
POSSIBLE)
COMPUTE ADDITIONAL
OBLIGATIONS (Removal,
preremedlal, enforcement, other
Federal agencies, etc.)
COMPUTE FTE AND
INTRAMURAL RESOURCE
NEEDS
COMPUTE TOTAL OBLIGATION
NEEDS BY FISCAL YEAR
WHAT IF
ANALYSES
ADDITIONAL SITES
INCREASE RP LEADS j
V REDUCE RA COST
ACTIVITY
SUMMARY
REPORTS
BUDGET REPORTS
BUD1
ACTIVITY FY94 FY95
PERSONNEL $ $
SPECIAL REPORTS
ANNUAL REPORT TO
CONGRESS
NOTE: The numbers in this exhibit are for illustrative purposes only. They may vary according to user input.
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Unit Activity Costs: The Model calculates total
costestimates by apply ing pricing andFTE factors
to all removal, pre-remedial, remedial, and
enforcement project counts that stem from the
activity flows. The only exception is for RAs,
where pricing factors are applied separately.
The sources of the pricing and FTE factors include empirical
analyses of cost data and SCAP guidelines outlined in the
current Program Management Manual. These factors are
applied to each project quarterly and by stage (i.e., start,
on-going, or complete).
MODEL OUTPUTS
The Model's output reports
consist of Liability,
Budgetary and Scenario
Reports. These reports are
generated in both graphical
and tabular forms.
Liability Reports: These reports contain the
OLM's estimates of the Superfund Program's
costs (e.g., annual costs, total costs to complete
existing NPL), duration (e.g., how long to
complete existing NPL), and number of site
activities (e.g., site cleanups by year or funding
level).
Budgetary Reports: These reports contain the
OLM's estimates of costs in the format of the
annual Superfund budget (e.g., BUD reports)
and provide support for development of OERR's
"Annual Report to Congress on Implementation
of the Superfund Program."
Scenario Reports: These reports contain the
OLM's analyses of "What If?" alternative budget,
liability, and policy scenarios, such as estimating
the Superfund costs if additional sites are added
to the NPL, or if the Program benefits from more
effective enforcement measures.
ONGOING ACTIVITIES
reflecting the Program over the short term. In
addition, while the model allows for user-inputs
on almost all Program conditions, Model users
often rely on default values for these inputs.
These default values, such as the value for RA
costs, are continuously analyzed and updated
where necessary to improve the Model's
predictive capabilities.
System Logic Enhancements: Changes in
Model user's needs can sometimes result in needed
enhancements in system logic. Recent
enhancements have included variable activity
durations and more extensive activity level
capping capabilities. Future enhancements might
include customized reporting capabilities,
increased graphical user interface capabilities,
and other enhancements that continue to increase
Model flexibility and user-friendliness.
This overview of the Outyear Liability Model (OLM) is
provided by the Office of Program Management (OPM).
If you have any questions on the enclosed information,
please feel free to contact the Program Development &
Budget Staff at (703) 603-8750.
of these steps include:
Maintaining the OLM as a
reliable and consistent
estimating tool requires a
continuous program of
updating and documenting
the system to respond to the
dynamic and changing
Superfund Program. Some
Model Data Analyses: As activity levels in
CERCLIS change, these changes are reflected
periodically in the OLM. These updates are
necessary to ensure that the model is accurately
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EXHIBIT 2
Activity Durations & Pricing Factors Default Values
ACTIVITY
DURATION (quarters) COST ($000)
PA
SI
ESI
NPL Proposed
NPL Final
REMOVAL
RI/FS
RD
RA
REMOVAL PRP SEARCH
REMOVAL NEGOTIATIONS
REMOVAL OVERSIGHT
PRP SEARCH (NPL) - start
PRP SEARCH (NPL) - ongoing
RI/FS NEGOTIATION
RP RI/FS OVERSIGHT - start
RP RI/FS OVERSIGHT - ongoing
RD/RA NEGOTIATIONS
RP RD OVERSIGHT
RP RA OVERSIGHT
100
600
750
700
13200
NOTE: The numbers in this exhibit are for illustrative purposes only. They may vary according to
user input.
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EXHIBIT 3
Distribution of Activity
BAND1
BAND 2
BAND 3
BAND 4
I RJNDPA | 10
RJNDRD 10
_L
ORPHAN SITE I 10 [| FIND Rlf S | 10
a\
NONORPWNSITES 90
KEY
»OFSITES
SEC.106REFERALS 50
RJNDRUFS 25
*\S I FPflA
FD/RANB30T. 90
PRPRI/FS 65
NOSEC.106REFERALS 40
NO SEC.106 SETTLEMENT 5
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