UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
X
OFFICE OF
SOLID WASTE AND EMERGENCY RESPONSE
OSWER Directive No. 9360.0-20
MEMORANDUM
SUBJECT: Required Use of the Removal Cost Management System for all
Removal Actions
FROM: Henry L. Longest II, Director
Office of Emergency and Remedial
TO: Director, Waste Management Division
Regions I, IV, V, VII, VIII
Director, Emergency & Remedial Response Division
Region II
Director, Hazardous Waste Management Division
Regions III, VI
Director, Toxics and Waste Management Division
Region IX
Director, Hazardous Waste Division
Region X
Director, Environmental Services Division
Regions I, VI, VII
PURPOSE
The purpose of this memorandum is to improve Superfund cos.t management
by requiring use of the Removal Cost Management System (RCMS), a computerized
cost tracking system, for all future removal actions.
BACKGROUND
Cost management, which includes cost projection, cost tracking, invoice
verification, and cost recovery activities, must be conducted for every
removal action. In the past, the removal program has experienced problems
conducting cost management activities manually. Documentation of cost data
has been irregular and inconsistent; internal and external program reviews
have noted "inadequate cost accounting systems" in the Superfund program. As
a result, cost management data quality, consistency, and availability varies.
This variability impairs program management,
-------
OSWER Directive No. 9360.0-20
-2-
enforcement, cost recovery, and contract management. For example, current
cost management tools are often insufficient to keep On-Scene Coordinators
(OSCs) aware that spending is approaching the project ceiling, causing
frequent last minute requests for site ceiling increases.
In addition, maintaining only hand-written cost records poses several
problems for the removal program. Paper records are time consuming to search
through (e.g., for invoice verification), and difficult to manipulate (to
create reports .or access cost data from previous sites).
To remedy these shortcomings, the Office of Emergency and Remedial
Response (OERR) developed a computerized cost management system and dis-
tributed it to all Regions and Technical Assistance Team (TAT) contractors
and Emergency Response Cleanup Services (ERGS) contractors on March 8, 1988.
An update of this system was distributed during January 1989.
FUNCTIONS OF RCMS
The RCMS has three main functions: daily cost tracking, cost projection,
and site summary reporting. Each function resides in a separate component, or
module, of the system.
The cost tracking module is designed to actively track daily costs of
the removal action, including all extramural and intramural costs. Cleanup
contractor costs may be entered using the data entry section of the program,
or loaded into the program from a contractor prepared transfer diski The
software produces a standard EPA Form 1900-55 (Contractor'-s Cost Report) .
All other costs (intramural, other federal agencies, state and local govern-
ments, TAT and other support contractors) are entered into the system from
their respective contracts or policy directives and documented on daily cost
summary and cumulative project cost reports. These reports also track
spending against the total project ceiling, or individual delivery order
ceilings. Daily cost information is recorded onto a separate archive disk
(and backup archive disk) for security. The system will maintain a complete
and consistent database of site information, providing a site history of the
usage and costs of equipment, materials and personnel.
When the OSC comes into the Regional office from the field, the OSC
needs to reconcile, on a monthly basis, paid costs tracked in RCMS with paid
costs in the Financial Management System (FMS). FMS is the program's
official accounting system for removal actions and the OSC should use FMS
cost data to verify paid costs of the ceiling estimates in RCMS, and to ensure
that the site ceiling is adequate for the remaining work. FMS data serves as
the final cost data for all cost recovery cases.
-------
OSWER Directive No. 9360.0-20
-3-
The cost projection module can be used to prepare an accurate estimate
of anticipated removal action costs prior to the start of a removal. This
estimate is used as the project ceiling of the Action Memorandum. The module
can also be used to estimate resources needed to complete a removal once the
cleanup is in progress.
The site summary module allows OSCs to develop various reports, using
the cost data stored on the archive disk. These may be used to evaluate use
and cost of personnel, equipment, and materials, and to manage the site more
efficiently.
A fourth module is being developed to aid OSCs in invoice verification.
This module will produce facsimiles of contractor invoices based on archive
data and automatically compare contractor invoices with the archive data, to
highlight discrepancies.
RCMS currently provides the following benefits to the removal program:
o Use of the RCMS to produce required cost tracking forms (1900-55 and a
daily cumulative cost summary) is significantly quicker than hand-
writing these documents each day.
o The RCMS will produce uniform, consistent documentation for all sites.
o Easy access to cost projections and cost data from previous sites will
allow OSCs to make more accurate cost projections for projected removal
actions.
When complete, more benefits will accrue:
o The RCMS life cycle management plan calculates that automated invoice
verification will save each OSC an estimated sixteen hours each month.
o The Procurement and Contracts Management Division (PCMD) will be able
to use the data archived by the RCMS in their contract definitization
process. Availability of archived site data, together with the
automated invoice reconciliation, will minimize time spent on contract
definitization.
-------
OSWER Directive No. 9360.0-20
-4-
o ROMS site data will be compiled in Regional and national databases,
providing a readily accessible, nationally uniform, financial record of
the Superfund removal program. The OSC needs to reconcile, on a monthly
basis, paid costs tracked in RCMS with paid costs in FMS. The FMS is
the program's official accounting system for removal actions. The OSC
should use FMS cost data to reconcile RCMS estimates of paid costs, and
to ensure that there is adequate ceiling for the remaining work.
o Finally, the RCMS life cycle management plan describes a benefit/cost
ratio of approximately 6:1 for the RCMS. Total net benefits (cost
savings) for EPA are estimated to be $14 million over an eight year
period.
COST MANAGEMENT POLICY
In order for the emergency response program to realize these benefits,
the cost tracking (1900-55 and Daily Cost Summary) module of the Removal Cost
Management System shall be used for cost management at all removal actions
that start on or after April 3, 1989. (It should be noted that in certain
circumstances, such as classic emergencies, RCMS may not be utilized on-site
but applied back in the office.)
IMPLEMENTATION
RCMS shall be used to produce the required 1900-55 form and Daily Cost
Summary for each day of the removal action. The other modules may be used to
produce cost projections and site summary reports as needed.
All existing Zone and Regional ERGS contracts are being modified by PCMD
to require the cleanup contractor to either 1) use RCMS to create 1900-55
forms, or 2) produce a 1900-55 disk which can be transferred into RCMS.
Interface programs which translate data from the contractor's accounting
system into RCMS are already in use in ERCS Zones 1, 2, and 4. RCMS provides
a function to incorporate the data from the contractor disk.
Running the program requires an MS-DOS microcomputer with at least one
floppy disk drive, a fixed disk drive, and a. serial and/or parallel interface.
There are nearly enough microcomputers available in the Regions to handle cost
management for all current removal sites; TAT computers may also be used. If
neither EPA nor TAT computers are available for a removal action, a computer
may be ordered as a contract equipment item on all ERCS contracts.
-------
OSWER Directive No. 9360.0-20
-5-
Each Region has received at least one training session in the use of
RCMS, a copy of the user manual (OSWER Dir. No. 9360.0-02B), and a copy of the
program disks. Each Region should designate an RCMS coordinator to serve as
contact with the cleanup contractor and with RCMS program management in OERR.
User support is provided through the Environmental Response Team-TAT at 201-
225-6266. For further information about the program, user manual, or
training, contact Robert Cibulskis at FTS 340-6746.
cc: Tim Fields
Hans Crump
Joe Lafornara
Bruce Englebert
John Riley
Robert Cibulskis
Pat Patterson, PCMD
Linda Boomazian, OWPE
Oil and Hazardous Materials Coordinators, Regions I-X
Superfund Branch Chiefs, Regions I-X
ERGS Contracts Deputy Project Officers, Regions I-X
TAT Contracts Deputy Project Officers, Regions I-X
Willis Greenstreet, OARM
Sallyanne Harper, PCMD
------- |