i
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OSWER Directive 9835.5
OCT 5 .337
HBMOBAJIDOM
SUBJECT
PROM:
TO:
EPA Interim Guidance on Indemnification of Super fund
Respo/ise ActVooContractors Under Section 119 of SARA
J.
Off^
6">&±>
ton Porter,
2
an
Office of
Assistant Administrator
Emergency Response
stant Administrator
on and Resources Management
Regional Administrator, Regions I-x
Regional Counsel, Regions I-X
Director, Waste Management Division
Regions I, IV, v, vii, and VIII
Director, Emergency and Remedial Response Division
Region II
Director, Hazardous Waste Management Division
Region III and VI
Director, Toxics and Waste Management Division
Region IX
Director, Hazardous Waste Division
Region X
Director, Environmental Services Division
Regions I, VI, and VII
Purpose)
Subject to certain restrictions. Section 119 of the
Superfund Amendments and Reauthorization Act of 1986 (SARA)
authorizes the Environmental Protection Agency (EPA)1 to provide
indemnification2 to response action contractors (RACs) working at
Superfund sites for States, potentially responsible parties
(PRPs), and EPA (including RACs working for the O.S. Army Corps).
1 Under Executive Order 12580, the President has also
authorized other Federal agencies to indemnify RACs working for
-hose agencies.
2 "Indemnification" is an agreement whereby one party
agrees to reimburse a second party for losses (in this case
liability losses) suffered by the second party.
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2 OSWER Directive 9835.5
of Enginee
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OSHBR Directive 9835.5
Section: 119 of SARA responds to many of the concerns of the
RAC community by:
o Establishing a standard of negligence for actions brought
against RACs under Federal law/4
o Authorizing EPA to provide to RACs, on a discretionary
basis, limited indemnification against pollution liability
arising from RAC negligence; and
o Providing express statutory authority for indemnification
and a funding mechanism.
The approach taken in Section 119 provisions is baaed on the
following key points:
o A Federal liability standard of negligence, combined with
RAC indemnification which is subject to limits and
•deductible*, provides adequate performance incentives for
RACs working in the Superfund program;
o RAC indemnification provides an adequate substitute for
insurance;
o Discretionary indemnification is an interim vehicle that
will keep the Superfund program operative until the
insurance industry returns to the RAC liability insurance
market; and
o Discretionary indemnification does not create a Federally
intrusive insurance program that interferes with private
sector efforts to develop RAC liability insurance coverage.
4 The Federal standard of negligence under Section 119
applies only to Federal law. It does not preclude States from
applying their own statutory law or common law liability
standards, which may in some cases be strict liability. Response
action contractors sued in Federal courts are under a "standard
of care" defined by Federal law as negligence. However, if an
action is brought under state law, a strict liability standard
could apply.
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4 OSWER Directive 9835.5
BPA T««k r«te» on RAG indemnification
To avoid program delays, a Task Force was established to
determine how-EPA will provide indemnification to RACs working in
the Superfund program. The Task Force is composed of
representatives from EPA's Office of Waste Programs Enforcement
(OWPE), Office of Emergency and Remedial Response (OERR), Office
of Solid Waste (OSW), office of General Counsel (OGC), Office of
the Comptroller
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5 OSWER Directive 9835.5
comment. MMawbile, EPA is providing contractors with Section
119 coverafsV on an interim basis, using procedures outlined in
this memorandum. Ultimately, this coverage will be amended to
reflect guida.nct and regulations that will be developed in
conformance with Section 119 requirements.
As further described in this memorandum, authorization to
provide indemnification will be made by OSWER with concurrence
from the Office of the Comptroller (OC). Authorization to
indemnify will be made upon receipt of a recommendation from the
Task Force. The OC will provide concurrence (or non-concurrence)
with recommendations to indemnify within seven calendar days of
receipt of a recommendation. Execution of indemnity agreements
will be made by appropriate Agency administrative offices.
Section 119(c)(4) mandates that RACs must meet the following
requirements before they can receive Federal indemnification for
potential pollution liability associated with Superfund response
action activities:
o The RAC must make diligent efforts to obtain insurance
coverage from non-Federal sources to cover pollution
liability; and
o In the case of a RAC contract covering more than one
facility, the RAC agrees to continue to make such diligent
efforts each time the RAC begins work under the contract at
a new facility.
Section 119(c)(4) also requires that the following
circumstances must exist before a RAC can receive Federal
indemnification for potential pollution liability associated with
Superfund response action activities:
o At the time the response action contract is entered into,
insurance is not available, at a "fair and reasonable
price", in sufficient quantity to offset potential RAC
pollution liability risk; and
o Adequate insurance to cover such liability is not generally
available at the time the response action contract is
entered into.
In future guidance (i.e., the guidance which is to be
published for public comment), EPA plans to include guidelines
for determining whether insurance is "generally available" or is
"fairly and reasonably priced". For the purpose of this interim
guidance, EPA has determined, based on information currently
available, that Superfund RACs are unable to obtain reasonably
priced pollution liability insurance. Therefore, RACs are
eligible to receive indemnification under Section 119 from DOE of
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6 OSWER Directive 9835:5
SARA. However, EPA will require that RACa seeking Federal
indemnification meet the following requirements:
o Within 30-days of signing an indemnification agreement with
EPA, RACs must submit* to EPA (or to the appropriate State
Contracting Officer) written documentation concerning the
efforts they have made to date to secure pollution liability
insurance coverage (e.g., a RAC could submit a written
statement from an insurance broker stating that the RAC has
attempted to secure pollution liability coverage from
insurance carriers in the past six months).
o If the RAC has secured pollution liability coverage, it must
submit to EPA (or to the State Contracting Officer) a copy
of the policy and declaration page; and
o Every twelve months (or more frequently, if EPA determines
that there has been a significant change in circumstances
concerning the availability of pollution liability
insurance) the RAC must submit to EPA (or to the State
Contracting Officer) written documentation addressing the
additional efforts the RAC has made to secure pollution
liability insurance coverage including:
Copies of applications submitted to three known
underwriters of pollution liability insurance;
If pollution liability coverage was denied by an
underwriter, a summary of the reasons why such coverage
was denied;
A status report of any pollution liability insurance
obtained. The report would include: 1) type of
coverage; 2) premium charged; 3) limits of coverage; 4)
deductible levels, and any other major terms and
conditions of the insurance coverage. A copy of the
actual policy and declaration page could be provided in
lieu of a written status report;
If pollution liability coverage was offered by an
underwriter, but not accepted by the RAC, a report on
the insurance offered (such as the "status report"
required above), and a summary of the reasons why such
coverage was not accepted; and
A status report concerning the alternative pollution
liability risk transfer mechanisms the RAC has pursued
other than commercial pollution liability insurance
(e.g., risk retention groups, purchasing groups,
association captives).
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7 OSWER Directive 9835.5
This Information should be forwarded to the appropriate EPA
official ffcr State Contracting Officer). This information will
be reviewed by the Task Force as needed.
As required under the interim guidelines listed above, EPA
expects RACs to demonstrate the extent to which they have
attempted to secure pollution liability insurance coverage. EPA
also expects that RACs will continue to monitor the market for
pollution liability insurance, and continue to seek and secure
such insurance coverage (however limited) from commercial
insurance carriers or through alternative risk transfer
mechanisms (e.g., self-insurance pools).
Indemnification of RACs Working for IPA
Pre-SARA indemnification terms will apply to work performed
at a site after the date of enactment (DOE) of SARA if response
work at the site was initiated under an EPA contract prior to the
DOE of SARA.
EPA will enter into new indemnification agreements (See
Attachment A), subject to Section 119 authority, with:
o RACs who are currently working under contract with EPA, for
work they will initiate at-a new site after DOE of SARA; and
o RACs receiving new contracts (or new cooperative agreements,
in the case of Site Demonstration projects) with EPA after
DOE of SARA for Superfund response action activities.
RACs currently under contract with EPA have been alerted to
the changes that will be forthcoming to their indemnification
agreements with EPA. EPA headquarters personnel in the
Procurement and Contract* Management-Division of the Office of
Administration have been trained on the use of Section 119 and,
with the assistance of the Task Force, will administer Section
119 indemnification interim procedures for EPA contractors.
Requests for indemnification of EPA contractors will be subject
to the approval of OSWER and concurrence of OC.
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OSWER Directive 9835.5
indemnification of 1AC* Working for State*
Sectid* 119(c)(2) authorizes the indemnification of RACs
working for States or political subdivisions of States (pursuant
to a Section 104(d)(l) agreement with EPA) for new work initiated
at Super fund sites from OOE of SARA. EPA may indemnify RACs
performing response action activities for a State at a State-lead
Superfund site after OOE of SARA. EPA will offer indemnification
to RACs working for a State only if:
o The RAC's response action is part of new site work initiated
at a Superfund site after DOE of SARA and it is related
directly to cleanup of the site;
o RACs working for a State must meet all of the circumstances
and issuance requirements set forth by Section 119(c)(4), as
listed above; and
o RACs working for a State must meet all of EPA's interim
,uideline requirements, as listed previously on pages five
and, six.
EPA will not offer indemnification to RACs for site work they
perforraed~For States prior to DOE of SARA. Any EPA
indemnification provided to a RAC(s) working for a State(s) will
be subject to limits, deductibles, and other restrictions as
required by Section 119(c)(5).
Until EPA issues final guidance and regulations, all
requests for EPA indemnification of a RAC working for a State at
a Superfund site will be processed via the Task Force. States
should submit requests to both the Indemnification Task Force,
c/o Director, Office of Emergency and Remedial Response (OERR),
and to the Regional Superfund Branch Chief. Requests should
identify the Regional Site Coordinator and State contact, and
should include pertinent information regarding Section 119(c)(4)
requirements as discussed previously. If the Task Force
recommends approval of the indemnification request, the Office of
the Comptroller will provide concurrence (or non-concurrence)
within seven calendar days of receipt of the recommendation.
Final approval for EPA indemnification of a State RAC will be
made by the Director of the Office of Emergency and Remedial
Response. If approval is authorized, then the Grants
Administration Division will implement the approval through a
special condition to be included in the State/EPA cooperative
agreement (See Attachment A).
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9 OSWER Directive 9835.5
Indemnification of RAC« working for Other Federal Agenciea
Section 119(c)(2) authorizes the indemnification of RACs
working for o_ther Federal agencies at Superfund sites from DOE of
SARA. A delegation of authority from the President authorizing
other Federal Agencies to use Section 119 provisions was issued
on January 26, 1987. Other Federal agencies follow all EPA
guidance and regulations with respect to Section 119. Other
Federal agencies that use Section 119 authority must provide
their own source of funds (e.g.,their agency appropriation) to
pay all indemnification costs (e.g., claims and legal defense
costs).
At some Superfund sites, the O.S. Army Corps of Engineers
manages response actions pursuant to an interagency agreement
with EPA. For Section 119 indemnification purposes, any RAC
working as a contractor for the Corps of Engineers at such sites
(and where, for remedial actions, the site is listed on the NPL)
is considered to be working for EPA rather than for some "other
Federal agency". EPA will offer the same indemnification to
contractors procured by the Corps of Engineers that it offers to
contractors procured by EPA.
Indemnification of RACtt Working for PRPa
Under Section 119(c)(2) authority, EPA can, in limited
circumstances and subject to strict financial tests, indemnify
RACs performing response action activities for PRPs subject to a
consent order or decree at Superfund sites after DOE of SARA.
EPA will use its authority to indemnify RACs working for PRPs
only in extremely limited cases, e.g., where EPA indemnification
of the PRP RAC is the solution of last resort. EPA will offer
indemnification to RACs working foi PRPs only if:
o The PRPs are unable to provide adequate indemnification, and
as a result, are unable to obtain the services of a
qualified RAC;
o The RAC's response action is part of new site work initiated
at a Superfund site after DOE of SARA, and the action is
related specifically to the cleanup of the site;
o RACs working for PRPs meet all of the issuance requirements
set forth by Section 119(c)(4);
o The circumstances set forth in Section 119(c) (4) exist; and
o RACs working for PRPs meet all of EPA1s interim guideline
requi cements.
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10 OSWER Directive 9835.5
EPA will not offer indemnification to RACs for work
performed for PRPs prior to DOE of SARA, nor for any PRP RAC
response activity that is not related specifically to a remedy at
a Superfund site.
Further, Section 119 (c) (5) (C) of SARA requires that,
before EPA can enter into an indemnification agreement with a RAC
performing work under contract with a PRP(s) at a Superfund
site(s) , EPA must determine the amount which the PRP(s) is able
to indemnify the RAC. In making such a determination, EPA must
determine the amount which the PRP(s) is able to indemnify the
RAC. In making such a determination, EPA shall take into account
the total net assets and resources of the PRP(s) with respect to
the facility at the time of such determinations. If EPA
determines that the amount which the PRP(s) is able to indemnify
the RAC is inadequate, then EPA may enter into an indemnification
agreement with the RAC to meet the anticipated shortfall. EPA
will consider the combined capabilities of all the PRPs at a site
to determine, whether, as a group, they are capable of providing
adequate coverage. In general, the Agency expects to use this
provision only in cases where PRPs are small firms with few
assets. Therefore, Regions should not make requests for Federal
indemnification where PRPs are large corporations with
substantial assets or where the PRPs, as a group, have
substantial assets. As a result, EPA does not expect requests
for Federal indemnification to become an integral part of
settlement negotiations.
EPA plans to provide additional guidance in the future
concerning the determinations that need to be made as a
prerequisite to indemnifying RACs working for PRPs (such as
defining "net assets and resources" of the PRPs, and whether the
PRPs are "unable to provide adequate indemnification"). Until
EPA distributes this guidance, all such determinations will be
made by the Task Force.
EPA indemnification of a RAC working for a PRP is a measure
of last resort. If EPA does provide indemnification in these
cases, the consent decree (or order) should specify terms and
conditions, using the model EPA indemnification agreement for
RACs working for PRPs shown in Attachment A. If EPA enters into
an indemnification agreement with a RAC working for a PRP(s), the
RAC must:
o Retain financial responsibility for a deductible amount if
commercial pollution liability insurance is unavailable or
unreasonably priced; and
o Exhaust all administrative, judicial, and common law claims
for indemnification against all PRPs participating in the
cleanup of the facility before EPA can pay a claim.
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11 OSWER Directive 9835 „ 5
If a RAC has received partial indemnification from a PRP(s) ,
EPA may also provide indemnification in cases where the PRP
indemnification is deemed insuff icient, and in mixed funding
cases. EPA may provide indemnification above the PRP
indemnification. The consent decree should specify the terms and
conditions using the model EPA indemnification agreement shown in
Attachment A.
All requests for EPA indemnification of a RAC working for a
PRP(s) at a Super fund site should be submitted to both the
Indemnification Task Force, c/o Director, Office of Waste
Programs Enforcement (OWPE) , and to the Regional Superfund
Enforcement Branch Chief. Please identify the Regional Site
Coordinator and the Regional Counsel 's Site Representative „
Include pertinent information regarding the number of PRPs,
financial profile of the PRPs, type of work to be performed ,
etc. , such that the Task Force can make determinations per
Section 119 (c) (4) and Section 119 (c) (5).
Upon determining that a RAC meets all of the circumstances
and requirements set forth in Section 119 and in EPA interim
guidelines, the Task Force will evaluate an amount to which th©
PRP(s) is able to indemnify the RAC and,. an amount to which EPA
will indemnify the RAC in excess of the' PRP indemnification
amount. Any EPA indemnification provided to a RAC(s) working for
PRP(s) will be subject to limits, deductitoles, and other
limitations as required by Section 119 (c) (5). If the Task Force
recommends approval of the indemnification request, the Office of
the Comptroller will provide concurrence (or non-concurrence)
within seven calendar days of receipt of the recommendation.
Final approval for EPA indemnification of a PRP RAC will be made
by the Director of OWPE.
gor giaigs ffiifcangnmfc ESP&
Those RACs working for PRPs at Super fund sites who do not
receive indemnification from EPA may either receive no
indemnification at all, or may receive indemnification from PRPs
only. For those RACs working with no indemnification, PRPs
should demonstrate that the RAC is qualified to perform the work
adequately, has sufficient financial capability to complete the
projected work, and demonstrates financial responsibility for
potential third party liability costs. This can be ensured
through a combination of adequate competition in the contract
procurement process and a demonstration of financial
responsibility. Such a demonstration can consist of purchase of
performance bonds, letters of credit, insurance, maintenance of a
trust fund, etc. A consent decree should specify the
aforementioned .
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12 OSWER Directive 9835.5
For those RACS receiving indemnification from PRPs only (and
where EPA deems the indemnification to be adequate) , RACs should
be qualified to perform work adequately. This can be ensured
throuqh a combination of adequate competition in the contract
procurement process, and through a demonstration of financial
responsibility. The PRP indemnification is sufficient
demonstration of financial responsibility; therefore, performance
bonds, letters of credit, etc., are not required. The consent
decree should specify the aforementioned as well as the
indemnification terms and conditions.
Publicly Owned Treatment Works
Section 119(c) (5) (D) specifically prohibits EPA from
indemnifying an owner or operator of a facility regulated under
the Solid Waste Disposal Act. Therefore, publicly owned
treatment works subject to permit-by-rule provisions cannot be
indemnified (nor can any other permit-by rule facility, such as
an underground injection facility) . The intent of this provision
is to prohibit EPA from offering indemnification to off-site
treaters or disposers of Superfund hazardous waste. Therefore,
while POTWs not subject to RCRA regulation (i.e., POTWs without a
permit-by-rule) are not explicitly prohibited from EPA
indemnification authority under Section 119, the Agency has
determined that an extension of indemnification authority to any
POTW would not be consistent with Congressional intent in Section
119. Therefore, EPA will not provide indemnification to POTWs
under Section 119 authority.
Summary
This memorandum describes the current Federal
indemnification provisions for response action contractors
working in the Superfund program as provided in Section 119 of
SARA. The statute gives the Federal government the discretionary
authority to indemnify RACs for liability arising out of
negligence. Acts of gross negligence and willful misconduct are
expressly excluded from the indemnity provision. The Section 119
indemnity provision does not preempt the rights of States to
enforce a standard of strict liability.
Federal indemnification is meant to be an interim vehicle
which will keep the Superfund program operative until the
insurance industry returns to the market. It is not intended to
create a Federally intrusive program that will interfere with
private sector efforts to develop RAC liability insurance
coverage.
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13 OSWER Directive 9835.5
Please direct all questions and comments to Robert Mason at
FTS 382-4015 or Tom Gillis at PTS 382-4524
•
Attachments
A. Modelrndemnification Agreements
B. CERCLA (as amended) Section 119
cc: Administrator
Deputy Administrator
General Counsel
Regional Grants Office, Regions I-X
Regional Financial Management Office, Regions I-X
Regional Superfund Branch Chiefs, Regions I-X
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Attachment A
MODEL INDEMNIFICATION AGREEMENTS
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This attapehacnt contains model EPA indemnification
agreement* fflfea«« by EPA, States, and PRPs when RACs seek
indemnificatfVta from EPA. Any deviation from the model language
must be approved by the EPA Indemnification Task Force. Pour
models are attached:
I. Model EPA/RAC Indemnification Agreement
II. Model State Cooperative Agreement Indemnification Special
Condition
III. Model EPA/RAC Indemnification Agreement for RACs under
Contract with PRPs
IV. Model EPA/ SITES Program Technology Vendor Indemnification
Agreement
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MODEL EPA/RAC INDEMNIFICATION AGREEMENT
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H. Insurance — Liability to Third Persons —
Commercial Organizations
(EPAAR 1552". 228-70) (APR 1984) (with deviation)
(a) This Clause H "ill bc modified by the
mutual agreement of the parties hereto within 180 days of the
EPA's promulgation of final guidelines for carrying out the
provisions of Section 119 of the Comprehensive Environmental
Response/ Compensation, and Liability Act of 1980, as amended
(CERCLA).
(b) The Contractor shall procure and maintain such
insurance aa is required by law or regulation/ including that
required by PAR Part 28, in effect as of the date of execution of
this contract, and any such insurance as the Contracting officer
may, from time to time, require with respect to performance of
this contract.
(c) At a minimum, the Contractor shall procure and maintain
the following types of insurance.
(1) Workmen's compensation and occupational disease
insurance in amounts to satisfy State law;
(2) Employer's liability insurance in the minimum amount of
$100,000 per occurrence;
(3) Comprehensive general liability insurance for bodily
injury, death or loss of or damage to property of third persons
in the minimum amount of $1,000,000 per occurrence;
(4) When vessels are used in the performance of the
contract, vessel collision liability anc indemnity liability
insurance in such amounts aa the Contracting Officer may require
or approve: provided, that the Contractor may, with the* approval
of the Contracting Officer, maintain a self'insurance program.
All insurance required pursuant to the provisions of this
paragraph shall be in such form and for such periods of time as
the Contracting Officer may,.from time to time, require or
approve and with insurers approved by the Contracting Officer.
(d) The Contractor further agrees that it will make
diligent efforts throughout contract performance in accordance
with EPA guidelines to obtain adequate pollution liability
insurance.
(e) The Contractor agrees, to the extent and in the manner
required by the Contracting Officer, to submit for the approval
of the Contracting Officer all insurance maintained by the
Contractor in connection with the performance of this contract
and for which the Contractor seeks reimbursement hereunder. The
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Contractor's submission shall include documentation demonstrating
its diligent efforts to obtain pollution liability insurance.
(f) The Contractor shall be reimbursed, for the portion
allocable to this contract, the reasonable cost of insurance
(including reserves for self-insurance) as required or approved
pursuant to the provisions of this contract clause.
(g)(l) Pursuant to Section 119 of CERCLA, the EPA will hold
harmless and indemnify the Contractor against any liability
(including the expenses of litigation or settlement) for
negligence arising out of the Contractor's performance under this
contract in carrying out response action activities. Such
indemnification shall apply only to liability not compensated by
insurance or otherwise and shall apply only to liability which
results from a release of any hazardous substance or pollutant or
contaminant if such release arises out of the response action
activities_pf this contract. Further, any liability within the
deductible amounts of the Contractor's insurance will not be
covered under this contract clause H .
(2) For purposes of this clause (g), if the Contracting
Officer has determined that the insurance identified in paragraph
(d) is not available at a reasonable cost, the Government will
hold harmless and indemnify the Contractor for liability to the
extent such liability exceeds $100,000.00.
(3) The Contractor shall not be reimbursed for liabilities
as defined in (g) (including the expenses of litigation or
settlement) that were caused by the conduct of the Contractor
(including any conduct of its directors, managers, staff,
representatives or employees) which was grossly negligent,
constituted intentional misconduct, or demonstrated a lack of
good faith. Further, the Contractor shall not be indemnified for
liability arising under strict tort liability, or any other basis
of liability other than negligence.
(h) The Government may discharge its liability under this
contract clause by making payments directly to the Contractor or
directly to parties to whom the Contractor may be liable.
(i) With prior written approval of the Contracting Officer,
the Contractor may include in any subcontract under this contract
the same provisions in this clause whereby the Contractor shall
indemnify the subcontractor. Such a subcontract shall provide
the same rights and duties and the same provisions for notice,
furnishings of evidence or proof, and the like, between the
Contractor and the subcontractor as are established by this
clause. Similar indemnification may be provided for
subcontractors at any time upon the same terms and conditions.
Subcontracts providing for indemnification within the purview of
this contract clause shall provide for prompt notification to the
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Contractor wlrich is covered by this contract clause, and shall
entitle the Government, at its election, to control, or assist in
the settlement or defense of. any such claim or action. The
Government will indemnify the Contractor with respect to his
obligation to subcontractors under such subcontract provisions.
The Government may discharge its obligations under this paragraph
by making payments directly to subcontractors or to parties to
whom the subcontractors may be liable.
(j) If insurance coverage required or approved by the
Contracting Officer is reduced without the Contracting Officer's
approval, the liability of the Government under this contract
clause will not be increased by reason of such reduction.
(k) The Contractor shall:
(1) Promptly notify the Contracting Officer of any claim or
action against the Contractor or any subcontractor which
reasonably may be expected to involve indemnification under this
contract clause;
(2) Furnish evidence or proof of any claim covered by this
contract clause in the manner and form required by the
Government; and
(3) Immediately furnish the Government copies of all
pertinent papers received by the Contractor. The Government may
direct, control, or assist the settlement or defense of any such
claim or action. The Contractor shall comply with the
Government's directions, and execute any authorizations required
in regard to such settlement or defense.
(1) Reimbursement for any liabilities under this contract
clause will not exceed appropriations available from CERCLA's
Hazardous Substance Superfund (except to the extent that Congress
may make appropriations to. specifically fund any deficiencies) at
the time .such liabilities are represented by final judgments or
by settlements approved in writing by the Government.
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II
MODEL STATE COOPERATIVE AGREEMENT
INDEMNIFICATION SPECIAL CONDITION
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EPA INDBMNIFWkTION
EPA will provide indemnification pursuant to Section 119 of
CERCLA, as amended, to contractors carrying out response actions
under this agreement provided that the State certifies to EPA
that:
1. The contracts awarded under this agreement are defined in
section 119(e) of CERCLA, as amended;
2. The contracts awarded under this agreement include the
following clause that exclusively governs EPA
indemnification:
(see attached clause)
3. At the end of each calendar year and at the end of each
project period, all statements and materials related to
pollution liability insurance submitted by the Contractors
to the State Contracting Officer will be transferred to EPA.
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Attachment
(1) Pursuant to Section 119 of CERCLA? th© EPA will hold
harmless and inSetanify the Contractor against any third party
liability (including th© expenses of litigation or settleraent )
foe negligence arising out of the Contractor "a performance under
this contract in carrying out response action activities. Such
indeanif ieation shall apply only to liability net compensated by
insurance or otherwise and shall apply only t© liability which
results froa a release of any hazardous substance oe pollutant or
contaminant if such release arises out of tho response action
activities of thi© contract- Further, any liability within the
deductible asounts of the Contractor's insaeaaeo eoqjiaieed by this
contract will not be covered by this clause,, This Clause will be
modified by the mutual agreement of the paetioo raoEofe© within ISO
days of the EPA°s promulgation of final guidelines f©e
out the provisions of Section 119 (C
(A) The Contractor shall subtait t© the Sfeato Contracting
Officer within 30 days of award a wEifefeon statQaQnt
frora an insurance broker stating that tfae Centracter
has. att©rapted to s©cur© pollution liability
froa insurance carriers in the fast Qi2
(E) If th© Contractor has secured pollution liability
coverage^ it raust subrait a copy ©2 tho policy 'and
declaration page to the Stat© Contracting Officer? and
(C) Every twelv© raonths? or as directed by the EPA? th©
Contractor shall submit to the State Contracting
Officer writt©n documentation of the additional efforts
made by th© contractor to secur© pollution liability
insurance coverage? including?
o Copies of applications t© three known underwriters
of pollution liability insurance?
o A status report of any pollution liability
insurance obtained,, to include type of coverage,
presaiua charged? limits of coverage,, deductibles
and fiajor terms and conditions of coverage (e.g.?
a copy of the actual declaration page could be
provided in lieu of a status report) ?
o If pollution liability coverage was offered by in
underwriter? but not accepted by th© RAG?- a report
on the insurance offered (such as th© "status
report" required above)? and a summary of the
reasons why such coverage was not accepted;
o If pollution liability coverag© was rejected by
the underwriter? a summary of the reasons why such
coverage was denied; and
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o ' A status report on what alternative pollution
liability risk transfer mechanisms the contractor
has pursued other than commercial pollution
liability insurance (e.g., captives, letters of
credit, group purchasing of insurance, etc.).
(2) For purposes of this clause, the EPA will hold harmless
and indemnify the Contractor for liability described herein to
the extent such liability exceeds $100,000.00.
(3) The Contractor shall not be reimbursed for liabilities
as defined herein (including the expenses of litigation or
settlement) that were caused by the conduct of the Contractor
(including any conduct of its directors, managers, staff,
representatives or employees) which was grossly negligent,
constituted intentional misconduct, or demonstrated a lack of
good faith. Further, the Contractor shall not be indemnified for
liability arising under strict tort liability, or any other basis
of liability other than negligence.
(4) The EPA may discharge its liability under this contract
clause by making payments directly to the Contractor or directly
to parties to whom the Contractor may be liable.
(5) With prior written approval of the State Contracting
Officer, the Contractor may include in any subcontract under this
contract the same provisions in this clause whereby the
Contractor shall indemnify the subcontractor. Such a subcontract
shall provide the same rights and duties and the same provisions
for notice, furnishings of evidence or proof, and the like,
between the Contractor and the subcontractor as are established
by this clause. Similar indemnification may be provided for
subcontractors at any time upon the same terms and conditions.
Subcontracts providing for indemnification within the purview of
this contract clause shall provide for prompt notification to the
Contractor which is covered by this contract clause, and shall
entitle the EPA, at its election, to control, or assist in the
settlement or defense of any such claim or action. The EPA will
indemnify the Contractor with respect to his obligation to
subcontractors under such subcontract provisions. The EPA may
discharge its obligations under this paragraph by making payments
directly to subcontractors or to parties to whom the
subcontractors may be liable.
(6) If insurance coverage required or approved by the State
Contracting Officer is reduced without the State Contracting
Officer's approval, the liability of the EPA under this contract
clause will not be increased by reason of such reduction.
(7) The Contractor shall:
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o Promptly notify the Assistant Administrator,
OSWER, EPA of any claim or action against the
Contractor or any subcontractor which reasonably
may be expected to involve indemnification under
this contract clause.
o Furnish evidence or proof of any claim covered by
this contract clause in the manner and form
required by the EPA.
o Immediately furnish the EPA copies of all
pertinent papers received by the Contractor. The
EPA may direct, control, or assist the settlement
or defense of any such claim or action. The
Contractor shall comply with the EPA's directions,
and execute any authorizations required in regard
to such settlement or defense.
_o Submit any disagreements concerning EPA
indemnification to the Assistant Administrator,
OSWER, EPA for resolution. Decision by the
Assistant Administrator will constitute final
Agency action.
(8) Reimbursement for any liabilities under this contract
clause is available exclusively from the EPA and will not exceed
appropriations available from CERCLA's Hazardous Substance
Superfund (except to the extent that Congress may make
appropriations to specifically fund any deficiencies) at the time
such liabilities are represented by final judgement or by
settlements approved in writing by the EPA.
(9) Nothing in this clause shall be construed as an
indemnification agreement between the State and the Contractor.
(10) Nothing in this contract shall be construed to create,
either expressly or by implication, any contractual relationship
between EPA and the Contractor except as specifically provided in
this clause. EPA is not authorized to represent or act on behalf
of the State in any manner relating to this contract and has no
responsibility with regard to the mutual obligations of the State
and the Contractor as provided herein.
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Ill
MODEL EPA/RAC INDEMNIFICATION AGREEMENT
FOR RACS UNDER CONTRACT WITH PRPS
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MODEL CLAUSES FOR PRP CONTRACTS
Sec. Pollution Liability Insurance and Contractor
Indemnification
A. Pollution Liability Insurance
(1) The Contractor shall obtain such pollution liability
insurance (hereinafter insurance) as the EPA determines is
available at a fair and reasonable price at the time of contract
award. The cost of such insurance is an allowable contract cost.
(2) The Contractor shall report to EPA on its efforts to
obtain pollution liability insurance.
(A) Within 30 days of signing this agreement, the
Contractor shall submit to the EPA a written statement
from an insurance broker stating that the Contractor
lias attempted to secure pollution liability coverage
from insurance carriers in the past six months;
(B) If the Contractor has secured pollution liability
coverage, it must submit a copy of the policy and
declaration page to EPA; and
(C) Every twelve months, or as directed by the EPA, the
Contractor shall submit to the EPA written
documentation of the additional efforts made by the.
contractor to secure pollution liability insurance
coverage including:
o Copies of applications to three known underwriters
of pollution liability insurance;
o A status report of any pollution liability
insurance obtained, to include type of coverage,
premium charged, limits of coverage, deductibles
and major terms and conditions of coverage (e.g.,
a copy of the actual declaration page could be
provided in lieu of a status report);
o If pollution liability coverage was offered by an
underwriter, but not accepted by the RAC, a report
on the insurance offered (such as the "status
report" required above), and a summary of, the
reasons why such coverage was not accepted;
o If pollution liability coverage was rejected by
the underwriter, a summary of the reasons why such
coverage was denied; and
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o A status report on what alternative pollution
liability risk transfer mechanisms the contractor
h-as pursued other than commercial pollution
liability insurance (e.g., captives, letters of
credit, group purchasing of insurance, etc.).
(3) If, during the period of this contract, EPA determines
that insurance or additional insurance is available, the
contractor shall obtain such insurance.
8. PRP Indemnification
(The following are minimum clauses. PRPs may include
additional, non-conflicting terms.]
(1) The PRPs will hold harmless and indemnify the Contractor
against any third party liability (including the expense of
litigation or settlement) for negligence arising out of the
Contractor's performance of this contract in carrying out
response action activities. Such indemnification shall apply
only to liability which results from a release of a hazardous
substance, pollutant, or contaminant if such release arises out
of the response action activities in this contract.
Indemnification under this paragraph will apply only to liability
not compensated by insurance, not within the deductible amounts
of the Contractor's insurance in paragraph A, above, nor within
the deductible in paragraph D, below. Indemnification provided
under this paragraph shall not exceed $ (amount
determined by EPA).
(2) Any liability subject to indemnification shall be
presented first under this paragraph.
(3) The PRPs are individually and, collectively responsible
for the indemnification under this paragraph, unless otherwise
specifically provided within.
(4) If the PRPs fail to satisfy the indemnification claim
within 60 aays of its presentation, the Contractor will notify
the EPA of such failure.
C. EPA Indemnification
(1) Pursuant to Section 119 of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980,
as amended (CERCLA), the EPA will hold harmless and indemnify the
Contractor against any third party liability (including the
expenses of litigation or settlement) for negligence arising out
of the Contractor's performance under this contract in carrying
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out reaponoo fiction activities. Such indemnification shall apply
only to liability not compensated by innuranco, indemnification
provided in accordance with paragraph B, abovo, or otherwise and
shall apply only to liability which results from a release of any
hazardous substance or pollutant or contaminant if such release
arises out of the response action activities of this contract.
Further, any liability within the deductible amounts of the
Contractor's insurance in paragraph A, above/ or tho deductible
in paragraph D, below, will not be covered by this paragraph.
(2) This paragraph will be modified by tho mutual agreement
of the parties hereto within 180 days of tho EPA'a promulgation
of final guidelines for carrying out tho provioiono of
Section 119 of CERCLA.
(3) The Contractor shall not be reimbursed for liabilities
as defined herein (including the exponooo of litigation or
settlement) that were caused by the conduct of tho Contractor
(including any conduct of its directors, managers* staff,
representatives or employees) which was groooly negligent,
constituted intentional misconduct, or demonstrated a lack of
good faith. Further, the Contractor shall not bo indemnified for
liability arising under strict tort liability, or any other baois
of liability other than negligence.
(4) The EPA may discharge its liability under thio contract
paragraph by making payments directly to the Contractor or
directly to parties to whom the Contractor may bo liable.
(5) With prior written approval of the EPA, the Contractor
may include in any subcontract under this contract the same
provisions in this clause whereby the Contractor shall indemnify
the subcontractor. Such a subcontract shall provide the sane
rights and duties and the same provisions for notice, furnishings
of evidence or proof, and tho like, between tho Contractor and
the subcontractor as are establisheo by this paragraph. Similar
indemnification may bo provided for subcontractors at any time
upon the sano tormo and conditions. Subcontracts providing for
indemnification within the purview of this paragraph shall
provide for prompt notification to the Contractor which is
covered by this paragraph, and shall entitle the EPA, at its
election, to control, or assist in the settlement or defense of
any such claim or action. The EPA will indemnify the Contractor
with respect to his obligation to subcontractors under such
subcontract provisions. The EPA may discharge its obligations
under this paragraph by making payments directly to
subcontractors or to parties to whom the subcontractors may be
liable.
(6) If insurance coverage required in paragraph A, above,
is reduced without the EPA's approval, the liability of the EPA
-------
under this paragraph will not be increased by reason of such
reduction.
(7) The Contractor shall:
o Promptly notify the Assistant Administrator,
OSWER, EPA of any claim or action against the
Contractor or any subcontractor which reasonably
may be expected to involve indemnification under
this paragraph.
o Furnish evidence or proof of any claim covered by
this paragraph in the manner and form required by
the EPA.
o Immediately furnish the EPA copies of all
pertinent papers received by the Contractor. The
EPA may direct, control, or assist the settlement
or defense of any such claim or action. The
Contractor shall comply with the EPA's directions,
and execute any authorizations required in regard
to such settlement or defense.
o Submit any disagreements concerning EPA
indemnification to the Assistant Administrator,
OSWER, EPA for resolution. Decision by the
Assistant Administrator will constitute final
Agency action.
(8) The Contractor may present a claim for indemnification
under this paragraph only after compliance with the provisions in
paragraphs B, above, and C, below.
(9) If the PRPs fail to indemnity the Contractor in the
amount provided in paragraph B, above, no indemnification for
that amount will be paid under this paragraph until the
Contractor demonstrates to EPA's satisfaction that it has
exhausted all administrative and judicial claims for
indemnification under paragraph B, above, and any common law
claims for indemnification that it has against the PRPs.
Evidence of exhaustion of claims may include a judicial order
dismissing the Contractor's claims, documentation of the
Contractor's unsuccessful efforts to enforce a judgement against
the PRPs, or documentation of the Contractor's unsuccessful
claims in a bankruptcy proceeding involving the PRPs.
(10) Reimbursement for any liabilities under this paragraph
will not exceed appropriations available from CERCLA's Hazardous
Substance Superfund (except to the extent that Congress may make
appropriations- to specifically fund any deficiencies) at the time
such liabilities are represented by final judgement or by
settlements approved in writing by the EPA.
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(11) Nothing in this contract shall be construed to create,
either expressly or by implication/ any contractual relationship
between EPA and the Contractor except as specifically provided in
this section. EPA is not authorized to represent or act on
behalf of the (PRPs) in any manner relating to this contract and
has no responsibility with regard to the mutual obligations of
the (PRPs) and the Contractor as provided herein.
D. Contractor Deductible
The Contractor shall pay the first $100,000.00 of any
liability subject to indemnification under this contract before
seeking indemnification under paragraphs B and C, above.
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IV
MODEL EPA/ SITES PROGRAM TECHNOLOGY VENDOR
INDEMNIFICATION .AGREEMENT
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EPA Indemnification
(1) Pursuant to Section 119 of CERCLA, the EPA will hold
harmless and indemnify the Recipient against any liability
(including the expenses of litigation or settlement) for
negligence arising out of the Recipient's performance under this
cooperative agreement in carrying out response action activities
through the Superfund Innovative Technology Evaluation program
under Section 311 (b) of CERCLA. Such indemnification shall apply
only to liability not compensated by insurance or otherwise and
shall apply only to liability which results from a release of any
hazardous substance or pollutant or contaminant if such release
arises out of the response action activities of this cooperative
agreement. Further, any liability within the deductible amounts
of the Recipient's insurance will not be covered under this
clause. If the recipient has secured pollution liability
coverage, it must submit a copy of the policy and the declaration
page to EP.A.
(2) Every twelve months, or as directed by the EPA, the
Recipient shall submit to the Contracting Officer written
documentation of the additional efforts made by the recipient to
secure pollution liability insurance coverage, including:
o Copies of applications to three known underwriters
of pollution liability insurance;
o A status report of any pollution liability
insurance obtained, to include type of coverage,
premium charged, limits of coverage, deductibles
and major terms and conditions of coverage (e.g.,
a copy of the actual declaration page could be
provided in lieu of a status report);
o If pollution liability coverage was rejected by
the underwriter, a summary of the reasons why such
coverage was denied; and
(3) For purposes of this clause, the Government will hold
harmless and indemnify the Recipient for liability to the extent
such liability exceeds $100,000.00.
(4) The Recipient shall not be reimbursed for liabilities
as defined herein (including the expenses of 1itigation -or
settlement) that were caused by the conduct of the Recipient
(including any conduct of its directors, managers, staff,
representatives or employees) which was grossly negligent,
constituted intentional misconduct, or demonstrated a lack of
good faith. Further, the Recipient shall not be indemnified for
liability arising under strict tort liability, or any other basis
of liability other than negligence.
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(5) The Government may discharge its liability under this
cooperative agreement clause by making payments directly to the
Recipient or directly to parties to whom the Recipient may be
liable.
(6) With prior written approval of the Contracting Officer,
the Recipient may include in any subcontract under this
cooperative agreement the same provisions in this clause whereby
the Recipient shall indemnify the subcontractor. Such a
subcontract shall provide the sane rights and duties and the same
provisions for notice between the Recipient and the subcontractor
as are established by this clause. Similar indemnification may
be provided for subcontractors at any time upon the same terms
and conditions. Subcontracts providing for indemnification
within the purview of this cooperative agreement clause shall
provide for prompt notification to the Recipient which is covered
by this cooperative agreement clause, and shall entitle the
Government, at its election, to control, or assist in the
settlement or defense of any such claim or action. The
Government will indemnify the Recipient with respect to his
obligation to subcontractors under such subcontract provisions.
The Government may discharge its obligations under this paragraph
by making payments directly to subcontractors or to parties to
whom the subcontractors may be liable.
(7) if insurance coverage required or approved by the
Contracting Officer is reduced without the Contracting Officer's
approval, the liability of the Government under this cooperative
agreement clause will not be increased by reason of such
reduction.
(8) The Recipient shall:
(a) Promptly notify the Assistant Administrator, OSHER, EPA
of any claim or action against the Recipient or any subcontractor
which reasonably may be expected to involve indemnification under
this cooperative agreement clause;
(b) Furnish evidence or proof of any claim covered by this
cooperative agreement clause in the manner and form required by
the Government;
(c) Immediately furnish the Government copies of all
pertinent papers received by the Recipient. The Government may
direct, control, or assist the settlement or defense of any such
claim or action. The Recipient shall comply with the
Government's directions, and execute any authorizations required
in regard to such settlement or defense; and
i
(d) Submit any disagreements concerning EPA indemnification
to the Assistant Administrator, OSWER, EPA for resolution.
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Decision by eft* Assistant Administrator will constitute final
Agency action.
(9) Reimbursement for any liabilities under this
cooperative agreement clause will not exceed appropriations
available from CERCLA's Hazardous Substance Superfund (except to
the extent that Congress may make appropriations to specifically
fund any deficiencies) at the time such liabilities are
represented by final judgement or by settlements approved in
writing by the Government.
(10) This Clause will be modified by the mutual agreement
of the parties hereto within 180 days of the BPA's promulgation
of final guidelines for carrying out the provisions of Section
119 of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended (CERCLA).
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ATTACHMENT B
CERCLA (AS AMENDED)
SECTION 119
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"(3) OPERATION OF CENTER.—
"(A) NONPROFIT ENTITY.—For the purposes
of operating the Center, the Administrator is
authorized to enter into contracts and cooperative
agreement with, end make grants to, a nonprofit
private entity as defined in section 201 (i) of Public
Law 96-517 which entity shall agree to provide the
basic technical and management personnel. Such
nonprofit private entity shall also agree to provide
at least two permanent research facilities, one of
which shall be located in Benlon County,
Washington, and one of which shall be located in
Clallam County, Washington.
"(B) AUTHORITIES.—The Center shall be
authorized to make grants, accept contributions, and
enter into agreements with universities located in the
States of Washington, Oregon, Idaho, and Montana
in order to carry out the purposes of the Center.
"(4) HAZARDOUS WASTE RESEARCH AT THE
HANFORD SITE,—
"(A) INTERAGENCY AGREEMENTS.—The
Administrator and the Secretary of Energy are
authorized to enter into interagency agreements with
one anotiter for the purpose of providing for
research, evaluation, testing, development, and
demonstration into alternative or innovative
technologies to characterize and assess the nature and
extent of hazardous waste (including radioactive mix-
ed waste) contamination at the Hanford site, in the
State of Washington.
"(B) FUNDING.—There is authorized to be ap-
propriated to the Secretary of Energy for purposes
of carrying out this paragraph for fiscal years begin-
ning after September 30, 1986, not more than
$5,000,000. All sums appropriated under this sub-
paragraph shall be provided to the Administrator by
the Secretary of Energy, pursuant to the interagen-
cy agreement entered into under subparagraph (A),
for the purpose of the Administrator entering into
contracts and cooperative agreements with, and mak-
ing grants to, the Center in order to carry out the
research, evaluation, testing, development, and
demonstration described in paragraph (I).
"(5) A UTHORIZA TION OF APPROPRIA TIONS.—
There is authorized to be appropriated to the Administrator
for purposes of carrying out this subsection (other than
paragraph (4)) for fiscal years beginning after September
30, 1986, not more than $5,000,000. <
ol.D. NCP/HRS/NPL
SARA § 118(p)
"(p) SILVER CREEK TAILINGS.—Effective with the date
of enactment of this Act, the facility listed in Group 7 in EPA
National Priorities List Update tt4 (50 Federal Register 37956,
September 18, 1985), the site in Park City, Utah, which is located
on tailings from noncoal mining operations, shall be deemed
removed from the list of sites recommended for inclusion on the
National Priorities List, unless the President determines upon site
specific data not used in the proposed listing of such facility, that
the facility meets requirements of the Hazard Ranking System
or any revised Hazard Ranking System. < "
' So in original. Probably should be "dioxin."
o-II.C. Response Action Contractors
SARA § 119
§ 9619. [CERCLA § 119]
RESPONSE ACTION CONTRACTORS.
(a) LIABILITY OF RESPONSE ACTION
CONTRACTORS.-
(1) RESPONSE ACTION CONTRACTORS.—
A person who is a response action contractor with
respect to any release or threatened release of a hazar-
dous substance or pollutant or contaminant from a
vessel or facility shall not be liable under this sub-
chapter or under any other Federal law to any per-
son for injuries, costs, damages, expenses, or other
liability (including but not limited to claims for in-
demnification or contribution and claims by third
parties for death, personal injury, illness or loss of
or damage to property or economic loss) which
results from such release or threatened release.
(2) NEGLIGENCE, ETC.—Paragraph (I) shall not
apply in the case of a release that is caused by con-
duct of the response action contractor which is
negligent, grossly negligent, or which constitutes in-
tentional misconduct.
(3) EFFECT ON WARRANTIES; EMPLOYER
LIABILITY.—Nothing in this subsection shall affect
the liability of any person under any warranty under
Federal, State, or common law. Nothing in this
subsection shall affect the liability of an employer
who is a response action contractor to any employee
of such employer under any provision of law, in-
cluding any provision of any law relating to worker's
compensation.
(4) GOVERNMENTAL EMPLOYEES.—A state
employee or an employee of a political subdivision
who provides services relating to response action
while acting within the scops of his authority as a
governmental employee shall have the same exemp-
tion from liability (subject to the other provisions of
this subsection) as is provided to the response action
contractor under this section.
(b) SA VINGS PROVISIONS.—
(1) LIABILITY OF OTHER PERSONS,—The
defense provided by section 9607(b)(3) shall not be
available to any potentially responsible party with
respect to any costs or damages caused by any act
or omission of a response action contractor. Except
as provided in subsection (a)(4) and the preceding
sentence, nothing in this section shall affect the
liability under this chapter or under any other Federal
or State law of any person, other than a response ac-
tion contractor.
(2) BURDEN OF PLAINTIFF.—Nothing in this
section shall affect the plaintiff's burden of
establishing liability under this subchapter.
(c) INDEMNIFICA TION.—
(1) IN GENERAL.—The President may agree to
hold harmless and indemnify any response action
contractor meeting the requirements of this subsec-
tion against any liability (including the expenses of
litigation or settlement) for negligence arising out of
the contractor's performance in carrying out response
action activities under this subchapter, unless such
liability was caused by conduct of the contractor
which was grossly negligent or which constituted in-
tentional misconduct.
(2) APPLICABILITY.—This subsection shall app-
ly only with respect to a response action carried out
under written agreement with—
(A) the President;
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(B) any Federal agency;
(C) a State or political subdivision which has
entered into a contract or cooperative agree-
ment in accordance with section 9604(d)(I) of
this title; or
(D) any potentially responsible party carry-
ing out any agreement under section 9622
(relating to settlements) or section 9606 (relating
to abatement).
(3)'SOURCE OF FUNDING.—This subsection
shall not be subject to section 1301 or 1341 of title
31 of the United States Code or sect ion 3732 of the
Revised Statutes (41 U.S.C. 11) or to section 3 of the
Superfund Amendments and Reauthorization Act of
1986. For purposes of section 9611, amounts expend-
ed pursuant to this subsection for indemnification of
any response action contractor (except with respect
to federally owned or operated facilities) shall be con-
sidered governmental response costs incurred pur-
suant to section 9604. If sufficient funds are
unavailable in the Hazardous Substance Superfund
established under subchapter A of chapter 98 of the
Internal Revenue Code of 1954 to make payments
pursuant to such indemnification or if the Fund is
repealed, there are authorized to be appropriated
such amounts as may be necessary to make such
payments.
(4) REQUIREMENTS.—An indemnification
agreement may be provided under this subsection on-
ly if the President determines that each of the follow-
ing requirements are met:
(A) The liability covered by the indemnifica-
tion agreement exceeds or is not covered'by in-
surance available, at a fair and reasonable
price, to the contractor at the time the contrac-
tor enters into the contract to provide response
action, and adequate insurance to cover such
liability is not generally available at the time the
response action contract is entered into.
(B) The response action contractor has made
diligent efforts to obtain insurance coverage
from non-Federal sources to cover such
liability.
(C) In the case of a response action contract
covering more than one facility, the response
action contractor agrees to continue to make
such diligent efforts each time the contractor
begins work under the contract at a new
facility.
(5) LIMITATIONS.—
(A) LIABILITY COVERED.—
Indemnification under this subsection shall
apply only to response action contractor liabili-
ty which results from a release of any hazar-
dous substance or pollutant or contaminant if
such re/ease arises out of response action
activities.
(B) DEDUCTIBLES AND LIMITS.—An
indemnification agreement under this subsec-
tion shall include deductibles and shall place
limits on the amount of indemnification to be
made available.
(O CONTRA CTS WITH POTENTIALL Y
RESPONSIBLE PARTIES.—
0) DECISION TO INDEMNIFY.—In
deciding whether to enter into an indemnifica-
tion agreement with a response action contrac-
tor carrying out a written contract or agree-
ment with any potentially responsible party,
the President shall determine an amount
which the potentially responsible party is able
to indemnify the contractor. The President
may enter into such an indemnification agree-
ment only if the President determines that
such amount of indemnification is inadequate
to cover any reasonable potential liability of
the contractor arising out of the contractor's
negligence in performing the contract or
agreement with such party. The President
shall make the determinations in the preceding
sentences (with respect to the amount and the
adequacy of the amount) taking into account
the total net assets and resources of potentially
responsible parties with respect to the facility
at the time of such determinations.
(ii) CONDITIONS.—The President may
pay a claim under an indemnification agree-
ment referred to in clause (i) for the amount
determined under clause (i) only if the con-
tractor has exhausted all administrative,
judicial, and common law claims for indem-.
nification against all potentially responsible
parties participating in the clean-up of the
facility with respect to the liability of the con-
tractor arising out of the contractor's
negligence in performing the contract or
agreement with such party. Such indemnifica-
tion agreement shall require such contractor
to pay any deductible established under sub-
paragraph (B) before the contractor may
recover any amount from the potentially
responsible party or under the indemnification
agreement.
(D) RCRA FACILITIES.—No owner or
operator of a facility regulated under the Solid
Waste Disposal Act may be indemnified under
this subsection with respect to such facility.
(E) PERSONS RETAINED OR HIRED.—
A person retained or hired by a person describ-
ed in subsection (e)(2)(B) shall be eligible for
indemnification under this subsection only if
the President specifically approves of the retain-
ing or hiring of such person.
(6) COST RECOVERY.—For purposes of sect ion
9607, amounts expended pursuant to this subsection
for indemnification of any person \vho is a response
action contractor with respect to any release or
threatened release shall be considered c cost of
response incurred by the United States Government
with respect to such release.
(7) REGULATIONS.—The President shall pro-
mulgate regulations for carrying out the provisions
of this subsection. Before promulgation of the regula-
tions, the President shall develop guidelines to carry
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cui this section. Development of such guidelines shall
include reasonable opportunity for public comment.
(8) STUDY.—The Comptroller General shall con-
duct a study in the fiscal year ending September 30.
1989. on the application of this subsection, including
whether indemnification agreements under this
subsection are being used, the number of claims that
have been filed under such agreements, and the need
for this subsection. The Comptroller General shall
report the findings of the study to Congress no later
than September 30, 1989.
(d) EXCEPTION.—The exemption provided under
subsection (a) and the authority of the President to offer
indemnification under subsection (c) shall not apply to any
person covered by the provisions of paragraph (I), (2), (3),
or (4) of section 9607(a) with respect to the release or
threatened release concerned if such person would be
covered by such provisions even if such person had not
carried out any actions referred to in subsection (e) of this
section.
(e) DEFINITIONS.—For purposes of this section—
(1) RESPONSE ACTION CONTRACT.-The
term "response action contract" means any written
contract or agreement Altered into by a response ac-
tion contractor (as defined in paragraph (2)(A) of this
subsection) with—
(A) the President;
(B) any Federal agency;
(C) a State or political subdivision which has
entered into a contract or cooperative agree-
ment in accordance with section 9604(d)(l) of
this title; or
(D) any potentially responsible party carry-
ing out an agreement under section 9606 or
9622;
to provide any remedial action under this chapter at
a facility listed on the National Priorities List, or any
removal under this chapter, with respect to any
release or threatened release of a hazardous substance
or pollutant or contaminant from the facility or to
provide any evaluation, planning, engineering.
surveying and mapping, design, construction, equip-
ment, or any ancillary services thereto for such
facility.
(2) RESPONSE ACTION CONTRACTOR.-The
term "response action contractor" means—
(A) any—
(i) person who enters into a response action
contract with respect to any release or
threatened release of a hazardous substance
or pollutant or contaminant from a facility
and is carrying out such contract; and
(ii) person, public or nonprofit private en-
tity, conducting a field demonstration pur-
suant to section 9660(b); and
(B) any person who is retained or hired by
a person described in subparagraph (A) to pro-
vide any services relating to a response action.
(3) INSURANCE.—The term "insurance" means
liability insurance which is fair and reasonably pric-
ed, as determined by the President, and which is
made available at the time the contractor enters into
the response action contract to provide response
action.
(ft COMPETITION.—Response action contractors and
subcontractors for program management, construction
management, architectural and engineering, surveying and
mapping, and related services shall be selected in accor-
dance with title IX of the Federal Property and Ad-
ministrative Services Act of 1949. The Federal selection
procedures shall apply to appropriate contracts negotiated
by all Federal governmental agencies involved in carrying
out this chapter. Such procedures shall be followed by
response action contractors and subcontractors. -^
As added Pub.L. 99^99, Title I, § 119, Oct. 17, 1986.
M.O. Federal Facilities
SARA § 120(a)
§ 9620. [CERCLA § 120]
FEDERAL FACILITIES.
(a) APPLICATION OF CHAPTER TO FEDERAL
GOVERNMENT.—
(I) IN GENERAL.—Each department, agency,
and instrumentality of the United States (including
the executive, legislative, and judicial branches of
government) shall be subject to, and comply with,
this chapter in the same manner and to the same ex-
tent, both procedurally and substantively, as any
nongovernmental entity, including liability under sec-
tion 9607 of this title. Nothing in this section shall
be construed to affect the liability of any person or
entity under sections 9606 and 9607.
(2) APPLICATION OF REQUIREMENTS TO
FEDERAL FACILITIES.—All guidelines, rules,
regulations, and criteria which are applicable to
preliminary assessments carried out under this
chapter for facilities at which hazardous substances
are located, applicable to evaluations of such facilities
under the National Contingency Plan, applicable to
inclusion on the National Priorities List, or applicable
to, ^medial actions at such facilities shall also be ap-
plicable to facilities which are owned or operated by
a department, agency, or instrumentality of the
United States in the same manner and to the extent
as such guidelines, rules, regulations, and criteria are
applicable to other facilities. No department, agen-
cy, or instrumentality of the United States may adopt
or utilize any such guidelines, rules, regulations, or
criteria which are inconsistent with the guidelines,
rules, regulations, and criteria established by the Ad-
ministrator under this chapter.
(3) EXCEPTIONS.—This subsection shall not
apply to the extent otherwise provided in this section
with respect to applicable time periods. This subsec-
tion shall also not apply to any requirements relating
to bonding, insurance, or financial responsibility.
Nothing in this chapter shall be construed to require
a State to comply with section 9604(c)(3) in the case
of a facility which is owned or operated by any
department, agency, or instrumentality of the United
States.
(4) STATE LAWS.—State laws concerning
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