United States
Environmental Protection
Agency
Office of
Solid Waste and
Emergency Response
£EPA
DIRECTIVE NUMBER: 9832.5
TITLE: Policy on Recovering Indirect Cost in CERCLA
Section 107 Cost Recovery Actions
APPROVAL DATE: June 27, 1986
EFFECTIVE DATE: June 27, 1986
ORIGINATING OFFICE: OBCM/OWPE
B FINAL
D DRAFT
LEVEL OF DRAFT
DA — Signed by AA or OAA
D B — Signed by Office Director
DC — Review & Comment
REFERENCE (other documents):
WE Ft OS WER OS WER
DIRECTIVE DIRECTIVE Dl
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United States Envirc—:--
&EPA
OSWER Directive initiation Request
1. Directive Number
9832.5
2. Originator Information
pme of Contact Person
avid Van Slyke
Mail Cod«
LE134S
OECM /OWPE
jmber
13. Title
Policy on Recovering Indirect Cost in CERCLA Section 107 Cost Recovery Actions
14. Summary of Directive (Include brief statement of purpose/ , ,. ^^.jj,,^
I This memorandum is a clarification of the Agency's policy regarding
recovery of indirect costs in CERCLA cost recovery actions..
15. Keywords
Indirect Cost, Cost Recovery Actions, Superfund Site Cleanup
|6a. Does this Directive Supersede Previous Directive^)? F] Yes Q No What directive (number, title)
|b. Does It Supplement Previous Directive(s)? Q Yes [£] No What Directive (number, title)
[/..Draft Level
LJ A — Signed by AA/DAA
B — Signed by Office Director
DC-
For Review & Comment
Dm
Development
[This Request Meets OSWER Directives System Format
|o. Signature of Lead Office Directives Coordinator
. Name and Title of Approving Official!
Date
Date
3S WER OS WER OS WER
DIRECTIVE DIRECTIVE L
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9832.5
Attachment XXXII
Policy on Recovering Indirect Cost
in CERCLA §107 Cost Recovery Actions
6/27/86
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UNITED STATES ENVIRONMENTAL PROTECTION AGEiN^. GOTO
' WASHINGTON. D.C. 20460 7OJt r
'JUN 27 iSSe
MEMORANDUM
SUBJECT: Policy on Recovering Indirect Costs
in CERCLA Section 107 Cost Recovery Actions
FROM: Frederick F.
Associate Enforcement Counse
John J. Stanton, Director
CERCLA Enforcement Divisi
TO: Regional Counsels
Regional Waste Management Division Directors
This memorandum is a clarification of the Agency's
policy regarding the recovery of indirect costs in CERCLA
cost recovery actions. Previous memoranda from the Financial
Management Division transmitting yearly indirect cost
multipliers have indicated that indirect costs must be claimed
in all cost recovery actions ("Recovering Indirect Costs
Related to Superfund Site Cleanup," Vincette Goerl to Regional
Financial Management Officers/Regions I - X, December 12, 1985;
"Superfund Indirect _Cost Manual for Cost Recovery Purposes -
FY 1983 through FY 1986 .""Morgan Kinghorn, March 1986). However,
to avoid disruption of ongoing settlement negotiations with
PRPs in existing CERCLA Section 107 actions, and to avoid
placing the Aeency in an apparently inequitable posture before
the court adjudicating the claim, it may not be appropriate to .
seek indirect costs in all on-going cases.
The decision whether or not to seek indirect costs in
existing cases will be made by the Regions after consultation
with DOJ and with the concurrence of OECM and OWPE. The
decision, which will be made on a case-by-case basis, will
depend upon whether EPA has disclosed the overall cost figure
in either negotiations or formal discovery and whether that
figure has been the basis of the parties' settlement
negotiations. For those cases where no negotiations have
occurred (and therefore the parties have not relied upon a
specific cost figure) , but a cost figure has been produced
during discovery, the litigation team should supplement the
pertinent discovery and seek indirect costs so long as the
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complaint (particularly the prayer for relief regarding costs)
is broad enough to include indirect c os t s . / *
For those cases where indirect costs for past activities
will not be sought (i.e., those cases that meet the criteria
delineated aoove), the Region should notify the defendants at
the next appropriate opportunity, but no later than July 30,
1986, that indirect costs associated with Agency activities
undertaken after that date will be included in the Agency's
demands. The defendants should also be notified, where
appropriate, that all indirect costs will be sought if the case
proceeds to trial.
Of course, all new .CERCLA Section 107 referrals must seek
indirect costs. Accordingly, cost recovery complaints filed in
new cases should include indirect costs as part of the total
amount sought and CERCLA demand letters must include indirect
costs as a portion of the total demand made upon potentially
responsible parties.
If you have any questions on this policy, contact
David Van Slyke (OECM-Waste) at FTS 382-3082 or Janet Farella
(OWPE) at FTS 382-2034 .
cc: Vincette Goerl , FMD
David Buente, DOJ
Depending upon the posture of the case, it may be possible to
amend the complaint to include a request for indirect costs.
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