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
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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

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 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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