c/EPA
United States
Environmental Protection
Agency
Office of
Toxic Substances
Washington, DC 20460
r>60 12 79-005
October 1979
Toxic Substances
Estimated Costs
of Preparation
and Submission
of Reproposed
Premanufacture Notice Form
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ESTIMATED COSTS FOR PREPARATION AND SUBMISSION
OF REPROPOSED PREMANUFACTURE NOTICE FORM
Prepared for
Office of Toxic Substances
U.S. Environmental Protection Agency
EPA Report Number: EPA 560/12-79-005
EPA Contract No. 68-01-4717, Task 7
September, 1979
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PREFACE
This document is a contractor's study prepared with the supervision and
review of the Office of Toxic Substances of the U.S. Environmental
Protection Agency (EPA). The purpose of the study is to estimate the
cost to the chemicals industry for preparation and submission of the
reproposed Premanufacture Notice (PMN) form. This reproposed form was
prepared by the EPA Office of Toxic Substances as part of the imple-
mentation of Section 5 of the Toxic Substances Control Act.
This report forms the basis in substance and detail for the summary of
costs presented in Section I-B.4 of the Preamble to the reproposed form
(40 CFR Part 720).
This report was submitted in fulfillment of Contract No. 68-01-4717,
Task 7, by Arthur D. Little, Inc. Work was completed as of September,
1979.
This report is being released and circulated at the same time as
publication in the Federal Register of a notice of proposed rule-
making under Section 5 of TSCA. The study is not an official EPA
publication. It will be considered along with any comments received
by EPA before or during the proposed rulemaking proceedings in estab-
lishing final regulations. Prior to final promulgation of the pre-
manufacture notice form, the accompanying study shall have standing in
any EPA proceeding or court proceeding only to the extent that it
represents the views of the contractor who performed the study. It
cannot be cited, referenced, or represented in any respect in any
such proceedings as a statement of EPA's views regarding the subject
industry or the cost of preparing and submitting a PMN form.
111
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TABLE OF CONTENTS
Page
I. EXECUTIVE SUMMARY 1
A. Introduction 1
B. Findings 2
II. BACKGROUND 5
III. APPROACH 7
IV. ASSUMPTIONS AND UNCERTAINTIES IN NOTIFICATION COSTS n
A. Assumptions Related to Company Organization and Structure 12
B. Chemical Specific Assumptions 16
C. Regulatory Assumptions 19
D. Uncertainties in Notification Costs 21
V. SKILLS APPLICABLE TO PREPARING PREMANUFACTURE 25
NOTICE FORM
VI. ARTHUR D. LITTLE, INC. ESTIMATES OF COSTS FOR PREPARATION 27
AND SUBMISSION OF PREMANUFACTURE NOTICE FORM
A. Process and Assumptions 27
B. Results 31
C. Discussion of Cost Estimates 39
D. Confidentiality 44
VII. SELECTED CHEMICAL COMPANY ESTIMATES OF COSTS FOR 55
PREPARATION AND SUBMISSION OF PREMANUFACTURE NOTICE FORM
A. Process 55
B. Estimates 57
C. Discussion 59
APPENDIX A: Cost Estimates for Chemical Manufacturers' Association 61
(CMA) Premanufacture Notification -form of March 26,
1979
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LIST OF TABLES
Page
1 Information and Professional Skills Applicable to 26
Premanufacture Notice Form
2 Projected Steps to Complete PMN Form 28
3 Time Estimates to Complete Premanufacture Notice Form 32
4 Summary of Time and Cost Estimates for Preparation and 38
Submission of Premanufacture Notice Form
5 Changes in PMN Forms from June 28, 1979 56
6 Company Estimates for Time/Cost to Complete PMN Forms 58
A-l Information and Professional Skills Applicable to 62
Preparation of Manufacturing Chemists Association
Premanufacture Notice Form
A-2 Time and Cost Estimates for Preparation and Submission 64
of CMA Form
A-3 Time Estimates to Prepare CMA Premanufacture 65
Notice Form
vii
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I. EXECUTIVE SUMMARY
A. INTRODUCTION
In connection with reproposal of the Premanufacture Notification (PMN)
form by the Environmental Protection Agency (EPA), Arthur D. Little, Inc.
has estimated the range of costs that may be incurred by U.S. chemical
companies for preparation and submission of the reproposed PMN form for
a new chemical.
The purpose of this report is to present estimates of the direct costs
to a manufacturer for the initial preparation of a premanufacturing
notice. It does not consider the costs associated with supplemental
reporting requirements. Also, it is not intended to be an analysis of
the economic impact of premanufacture notification. These items will
be the subject of a future report.
The process for cost estimation included: (1) the identification of
important variables affecting notification costs and the development
of specific assumptions regarding their impact; (2) the determination
of skills required to complete the PMN form; (3) the estimation of the
level of effort and costs associated with completion of the PMN form;
and (4) interactions with EPA staff to insure mutual understanding of
the form and its instructions, and to review the cost estimates.
Independently, specific time and cost estimates for preparing and sub-
mitting the PMN form were obtained from eight chemical companies.
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B. FINDINGS
We estimate that completion of the reproposed PMN form will generally
range from approximately $1,200 to $8,900. These estimates are for
completion of the PMN form in the absence of claims for confidentiality.
The range of cost estimates is associated with the wide variety of
companies which comprise the U.S. chemical industry and assumes that
the cost of submitting a PMN form will vary depending upon the company's
approach to the PMN process.
Assumptions were developed which relate various factors to the cost of
submitting a PMN form. We assumed that companies will make a good
faith effort to comply with the intent of EPA-PMN requirements. In
addition, we have assumed that large companies will have more information
available than small companies and will consequently bear a higher cost
for reporting that information. Also, we have assumed that the cost of
submitting a PMN is directly proportional to the complexity of a chemical
process.
Our time estimates represent a manufacturer's effort at an early stage
in the PMN program. It is possible that the costs may change as ex-
perience is gained in preparing and submitting PMN forms. Depending
on the validity of these and other assumptions used in this report,
as they apply to specific companies, actual costs may be either greater
or less than the estimates we have presented.
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The results of our estimates are shown below. The wide range of hours
estimated for completing Part II of the PMN form is related to significant
variations in the complexity of chemical processes as well as the number
of manufacturing and processing sites associated with the new chemical.
Clerical Technical Managerial Total
Part I: General Information 2-10 hrs 7-59 hrs 2-13 hrs 11-82 hrs
Part II: Human Exposure and
Environmental Release 4-20 7-144 2-10 13-174
Part III: List of Attachments 1-8 12-56 3-12 16-76
Part IV: Federal Register
Notice 1-2 1^8 1-2 3-12
Total Time 8-40 hrs 27-267 hrs 8-37 hrs 43-344 hrs
Cost per hour $10 $25 $50 -
Total Cost $80-400 $675-6675 $400-1850 $1155-8925
If confidentiality of PMN information is claimed, we estimate the addi-
tional costs for asserting and substantiating these claims to range from
approximately $900 to $6400. The actual cost will be more dependent upon
the importance of confidentiality to a manufacturer's business than on
company organization and structure or the proposed format for asserting
and substantiating claims of confidentiality. Since confidentiality
may not apply to all chemicals or companies, it is appropriate to
consider this cost only for those companies making confidentiality
claims.
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Because of the large number of interacting variables that may influence
company costs for completion of the PMN form and the uncertainty in de-
termining how these interactions will operate, the results of our
analysis should be treated as broad estimates rather than precise ones.
Estimates of the costs to prepare and submit a PMN form obtained from
eight chemical companies, selected to include a range of company sizes
and products, range from approximately $900 to $43,000 (exclusive of
costs for asserting and substantiating claims for confidentiality).
Six of the company's estimates cluster in the $2,000 to $4,000 range;
however, there is no assurance that sampling another group of companies
would result in the same clustering. The range of cost estimates
provided by this sample of chemical companies reflects, to some extent,
these companies' perceptions and uncertainties regarding the specific
information needs for individual PMN submissions as well as their
inexperience and unfamiliarity with the PMN form itself.
Estimates for asserting and substantiating claims for confidentiality
obtained from two chemical companies range from $600 to $6,000; six
other companies contacted were unable to provide estimates of these
costs.
This sample of chemical companies is not statistically representative of
either the chemical industry as a whole, or producers of new chemicals.
Therefore, company estimates presented in this report should be
considered only as generally indicative of possible company responses.
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II. BACKGROUND
An important component of the implementation of the Toxic Substances
Control Act (TSCA) is the requirement for each person who intends to
manufacture or import a new chemical substance for commerical purposes
to submit a notice to EPA at least 90 days before manufacture or import
commences. As a result of this requirement, all chemical substances
not included in the inventory published by EPA are designated as new
chemical substances and will require the submission of a Premanufacture
Notice (PMN) form.*
On January 10, 1979, EPA published a proposed PMN form with instructions
(44 Federal Register 2242). Included with this publication of proposed
rules and notification forms were estimates of the range of costs
manufacturers might incur in completing the forms. These estimates
were developed for EPA by Arthur D. Little, Inc. as a component of the
preliminary economic impact study that was prepared in late 1978
(Impact of TSCA Proposed Premanufacture Notification Requirements,
EPA Report Number EPA 230/2-12/78-005). In addition, EPA published
. >*.
in January 1979 an "Explanatory Appendix—Premanufacture Notice Forms."
In the comment period which followed publication of the proposed PMN
form, many companies and organizations, including the Chemical Manu-
*Many chemicals were submitted after the December 1978 closing date for
publishing the inventory and are not included in this initial printing
(May 1979). Chemicals submitted by manufacturers after this closing
date, but before June 30, 1979, will be included in the inventory and
the manufacturer will not be required to complete a PMN form.
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facturers Association (CMA, formerly the Manufacturing Chemists Asso-
\
ciation) submitted modified or alternative forms to EPA. In response
to these comments and as a consequence of EPA policy decisions, several
PMN form drafts were prepared by EPA staff in the period from March
1979 until August 1979. The revised mandatory parts of the PMN form,
to which this study is addressed, represent the outcome of EPA's
deliberations.
The principal purpose of this report is to estimate the direct costs to
a manufacturer for the initial preparation of a premanufacturing notice
using the EPA Premanufacture Notice form as reproposed.* This study is
not intended to be an analysis of the economic impact of premanufacture
notification. A secondary purpose of this report is to estimate the
direct costs to a manufacturer for the initial preparation of a pre-
manufacturing notice using the CMA (MCA) proposed Premanufacture Notice
form of March 26, 1979. This cost estimate is contained in Appendix A.
*The importer and exporter PMN forms are also expected to be reproposed.
The cost of preparing and submitting these two forms has not been esti-
mated in this report.
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III. APPROACH
The cost estimates presented in this report were developed through a
series of steps which included estimating the time required to complete
each section of the two forms. These time estimates provided the basis
for estimating the total labor costs. The steps used in this analysis
included:
• Discussion with EPA staff responsible for developing the
form to insure understanding of the form and instructions.
• Development of a set of assumptions on the nature of chemical
company organizations and the internal processes involved in
the manufacturers1 preparation of a PMN form.
• Identification of specific elements of information requested
in forms.
• Design of worksheets to be used in obtaining estimates of
time requirements. These worksheets were based on the pre-
viously identified information elements; each line on the
worksheet corresponded to a major item of technical infor-
mation or data requested in the PMN Form.
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• Completion of the worksheets by six staff professionals
experienced in chemical marketing, chemical and environ-
mental engineering, chemistry, data analysis, or toxi-
cology. Through staff discussions and an iterative
process, estimates of the ranges of time (in person
hours) expected to be required to complete the forms
were developed for three labor categories, clerical,
technical, and managerial.
• Collation of information from worksheets to develop a
composite estimate of ranges of time required to com-
plete the forms.
• Calculation of the range of total direct labor costs
associated with completion of a PMN form by multiplying
time estimates by assumed labor rates for the three
labor categories.
• Discussions of time estimates with EPA personnel to con-
firm mutual agreement on the meaning of the items in the
forms.
t Interviews with eight chemical companies to obtain their
time and cost estimates for completing the PMN form. Com-
panies were selected to include a range of company sizes,
product lines, markets, research and development capabilities,
8
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and patterns of new chemical introduction. Interviews were
conducted at the companies' sites with persons who will
be responsible for completing or coordinating work on the
PMN form. Company representatives were asked to review
the draft PMN form in advance of or during the interview
and then to estimate the cost of completing various parts
of the draft form. In connection with these estimates,
company representatives were asked to describe the avail-
ability of data from within the company (e.g., libraries,
laboratories, specialists) and to assess their ability
to obtain data from outside the company (e.g., from
customers) in making a "reasonable" effort to answer
questions on the PMN form.
• Comparison of chemical company time and cost estimates
with the Arthur D. Little, Inc. time and cost estimates;
however, no revisions to the estimates were made on the
basis of this comparison.
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IV. ASSUMPTIONS AND UNCERTAINTIES IN NOTIFICATION"COSTS
To estimate the costs of preparing and submitting a PMN form under
Section 5 of TSCA, it was necessary to make a number of assumptions re-
lated to the way specific circumstances may affect the cost of each
individual PMN submission. These case-specific assumptions, which are
described in greater detail below, can be grouped into three major
categories: those that relate to company organization and structure,
those that are chemical specific, and those that pertain to the pro-
posed PMN regulations. These assumptions were developed primarily as
a result of our staff experience with the chemical industry, supple-
mented by review of public comments on the January 10, 1979 proposed
PMN form, and discussions with EPA Office of Toxic Substances staff.
Information from companies contacted for this study indicate that these
assumptions are realistic.
Moreover, underlying this analysis is the assumption that companies
submitting a PMN form will make a good-faith effort to comply with EPA
requests. This response would include making a "reasonable" effort
to obtain information both from within and outside the company, and
including all available information with the expectation that the PMN
would not be declared invalid. Finally, it is recognized that the
specific cost of preparing a PMN form will depend on the collection,
analysis, and organization of various data elements to respond to the
structure of the form.
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A. ASSUMPTIONS RELATED TO COMPANY ORGANIZATION AND STRUCTURE
Company size, operational style, existing information storage and re-
trieval methods, and information availability can affect the notification
costs experienced by individual companies.
( 1 ) A Jt&JLQzn company -66 at>&ume.d to have, heady
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companies that are dispersed both managerially and geographically.
While there are large companies operating with a highly centralized
organizational structure that will be able to take advantage of the
data-gathering efficiencies, we have generally assumed for this analysis
that larger companies would be less centrally controlled than smaller
companies.
(3) The. pie^ence. o& an active. tieAejaAjcJn and development depajit-
ment in any company -06 a&Aumed to >i.wcAeaAe tke. amount o£
a.va
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The diversity of data requested in a PMN form could utilize many dif-
ferent skills, and thus implies input from a substantial number of
persons in some companies. (See Chapter V for details.) Although
smaller companies would not be expected to have specialists in each
skill area, we have assumed that company officers would utilize their
knowledge, as well as that of their staff, to complete the PMN form
to the best of their ability. Moreover, it is assumed that their
"best-effort" answers, which may include several "don't know" responses,
will constitute valid completion of the PMN form. This assumption does
not imply that all companies will complete the form, or are expected to
complete the form, in equal detail.
(5) In AmaJUtzn. cfiem-teoC. cjompayuxA, jut i& a&Auiwd tiie. PMN
Fo/un wUUL be. completed by Aeyu.ox. management and tsjch-
wuuJi pesuonne£.
Although the PMN form may be completed through the combined use of
clerical, technical (or staff), and management input, smaller chemical
companies may not have staff experienced or available to devote to
completing the PMN form. Therefore, this task could fall largely to
company management, with clerical support. In such cases, the average
labor cost per person hour would be higher than in larger chemical com-
panies which would be expected to utilize technical and support staff
to prepare and present much of the data used in the PMN.
14
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(6) T/i/Lee genetod bibon. cjaJL^onJiejt and fabon. Mute* wete
in ptizpasuMQ thue.
In developing specific cost estimates, we used three labor categories
and standard labor costs per person hour as follows: clerical — $10 per
hour; technical --$25 per hour; and management (or legal )~$50 per hour.
These costs include direct salaries and benefits but do not include
corporate overhead. Each labor category is defined below:
t Management-- This term is used to describe a salary category
that could include corporate officers and corporate counsel
as well as, in larger organizations, department heads, heads
of research divisions, plant managers, senior design engineers,
heads of marketing and sales divisions.
• Technical --This describes a salary category that could in-
clude staff professionals in various skill areas, such as
chemistry, toxicology, engineering, risk analysis, and
environmental science, as well as information and data
handling specialists. (See Chapter V for details.)
• Clerical— This category includes clerks, secretaries,
junior level professionals and technicians.
Me have assumed that these categories and rates are representative of
the types of people in the chemical industry who would be responsible
for preparation and submission of the PMN form.
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B. CHEMICAL SPECIFIC ASSUMPTIONS
The characteristics of the specific chemical for which a PMN is being
submitted, including its identity, by-products, amount manufactured,
uses, occupational and consumer exposure, toxicity, disposal routes
and amounts, environmental and health effects, and sales and profit
potential, can all impact the cost of completing a PMN.
( 1 ) It iA a&Aumed that zompanLeA pfiodtjuung a WM chemteaJL
&ttu£tJLy fan. an Andu&ttUjaJt applMiatLon wUUi have, peA-
fatumed fieiaeJi teAtA and have. tu& avaMabte.
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In general, complex products and processes have associated with them a
possibility for the existence of by-products, co-products, and impurities
These situations will require more time (and greater cost) on the part
of the submitter of the PMN than for a simple one step batch process.
However, where several new products resulting from the same process
require a PMN, the cost of a PMN submission for the related chemicals
is likely to be substantially less than the cost of submission for the
same number of new chemicals from independent processes.
(3) Fo>t potpo6e4 o£ tiruA awtyt>H&t JUt Jut> aA&iwzd that
not be. Aubje&t to TSCA, Secttow 4, Testing Re.quAAeme.nt& .
For purposes of this analysis, we have assumed that chemicals will not
be included in a class of chemicals subject to TSCA, Section 4 test
rules and therefore additional test data will not need to be generated
or reported. There is uncertainty regarding both what kind and how
many new chemicals may be subject to Section 4 test rules.
(4) AA tii
a&&ume.d tke. company wWL peft.ee/cue the. ne.ed to &wppty
mole, defatted data, with Xhe. PMN.
Although the agency has issued no formal guidelines for testing, it is
assumed that companies will perceive a need to provide additional data
. • - • •*'•
to support a PMN submission as the toxicity of the chemical product in
creases. This need may arise from a company's perception that the
17
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Agency will view apparent toxicity as a major reason to delay the PMN
process by requesting additional tests. Thus, companies will supply
data during their initial submission in an effort both to avoid a fu-
ture delay and to support a position that the benefits of the new chemi-
cal outweigh the risks. Furthermore, for new chemicals which are re-
lated to known toxic chemicals, considerable data may be available
that the company could submit with a PMN.
(5) ConjpoKate. Atnategy dec/u^owa with. Jt.eApe.ct to tine, expen-
& time. and fand* to compete, and submit, a PMN
one. oAAumed to be. duiexLtLy fieJiated to tinx,
pated AaJteA and/ 'on. pnjo^JUt potzntiat o£ the. nesa
In cases where the anticipated sales of a new chemical are significant,
a company may decide to invest a high level of effort in PMN submission,
perhaps by developing and submitting large amounts of data. Conversely,
for a chemical with more limited sales potential, a low level of effort
would be devoted to PMN submission. Similarly, the potential profit
margin for a given chemical may also influence the magnitude of work
and expenditures that would be committed to PMN preparation. Our esti-
mates of the cost for preparation and submission of the PMN form re-
flect a likely range of effort by chemical companies but do not re-
flect situations under which extremely high (or low) levels of effort
might be considered appropriate by companies.
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C. REGULATORY ASSUMPTIONS
A number of specific elements of the TSCA PMN regulation, as proposed
on January 10, 1979, have the potential to exert a strong influence on
the total process of premanufacture notification. However, since the
purpose of this report is to assess the cost of an initial PMN sub-
mission, only the costs associated with completing the form itself and
with asserting and substantiating confidentiality claims are considered
in this report. Other regulatory factors, including those that impact
later stages of the PMN process, such as invalid notice, follow-up
reporting, extension of notification period, supplemental reporting,
and notice of continuing review, have not been considered in the pre-
paration of this cost analysis but will be considered in a subsequent
report. In addition, the statutory exemptions to the PMN submission
such as the R&D and test-marketing exemptions, have not been considered
as part of this analysis.
(1) T/ie p/tocfc44 OfJ a&AWtinQ and Aub&tanticuting cJtaim&
wnAMentlaJLLty Jik oAAumzd to have. a. mo/at a^ect on
tke. (Wie.ct o.o&tt> o& a. PUN
Not every company will claim information provided on the PMN form as
confidential. However, for those companies that do make such a claim,
the issue of confidentiality may be extremely important to the company
and it is reasonable to expect that considerable time and effort will
be devoted to substantiating the confidentiality claims. Since the
19
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need for confidentiality is not applicable to every PMN situation, the
cost of developing and substantiating claims is not included in the
base cost estimates. The issue of confidentiality is discussed sepa-
rately in Chapter VI, Section D.
(2) MontijJac&w.eA4
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D. UNCERTAINTIES IN NOTIFICATION COSTS
As for any analysis based on limited data, there are several uncertainties
that should be considered in interpreting the findings of this report.
One uncertainty is the way in which EPA and chemical companies view the
requirements of th'e PMN process. The uncertainty currently surrounding
these requirements may be reduced as acceptable levels of detail evolve
for PMN forms.
Moreover, even if Agency and company response patterns were better un-
derstood, the cost estimates presented in this report would only approxi-
mate actual expenditures within a wide range because of the multiple
factors that influence each individual PMN submission. Therefore, the
estimates define a likely range of values that may be exceeded or re-
duced in any specific situation.
Several other specific uncertainties that impact on the cost estimates
presented in this report are highlighted below.
(1) TSCA, SacJtAjOYi 4, Testing
The applicability of TSCA, Section 4, Testing Requirements, to a new
chemical may result in the performance of substantial testing even
before a PMN is submitted. If a new chemical is subject to a Section 4
test rule, the company proposing to manufacture the new chemical must
conduct testing as required or obtain a testing exemption from EPA.
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Currently, it is uncertain what kind or how many new chemicals will be
subject to Section 4 test rules.*
The costs incurred by a company for obtaining test data on,a new chemical
could be substantial and could be attributable to either Section 4 or
Section 5 of TSCA. In addition, the costs of preparation and submission
of these data could add substantially to the cost of PMN. We have not
included these costs in our estimates.
(2) Lock o£ &pe.cJ,&Lc. tz&ting gtudetunu undw. TSCA, Sec^ton 5.
The Agency does not request specific testing under Section 5 of TSCA
to support a PMN form, although the Agency is considering recommendation
of testing guidelines. The current absence of guidelines may increase
the uncertainty on the part of companies planning to submit forms for
new chemicals. As a result, we anticipate some chemical companies may
elect to expend testing resources in excess of those they might other-
wise consider necessary in the absence of either PMN or testing guide-
lines. Conversely, in the absence of regulatory guidance on testing
protocols, other chemical companies may consider submitting only a
minimum amount of information in a PMN form, thus keeping initial
notification costs very low. This lack of specificity regarding TSCA
Section 5 testing guidelines allows companies to develop different
strategies for approaching PMN, thus making cost estimates uncertain.
*This subject is more properly considered under rulemaking for Section 4
of TSCA. It is only mentioned here to demonstrate the uncertainty of its
application to new chemicals.
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(3)
"Reasonably ascertainable" is a legal term. Application of this term
to the PMN process will only be clearly understood following consider-
able experience. Although what is "reasonably ascertainable" to a
$1 billion company may not be considered "reasonably ascertainable"
for a $10 million company, further clarification is not available at
this time.
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V. SKILLS APPLICABLE TO PREPARING PREMANUFACTURE NOTICE FORM
In large companies with extensive technical and marketing staffs, a sub-
stantial number of individuals would be expected to participate in the
preparation of a PMN, each providing the information and guidance for
specific technical or business items in the form. The following skill
table (Table 1) pertains to the reproposed PMN form and reflects the
ability of a company of sufficient size to support a cadre of professionals
in a wide spectrum of areas.
In contrast, many chemical companies (possibly the majority), including
those with sales of as much as $20 million, do not have extensive and
diverse personnel resources to participate in preparation of the PMN
form. Therefore, it is likely that the PMN form in these companies will
be completed largely by the senior technical person(s) and/or the head
of the company who, in many cases, is also the primary marketing, re-
search, and sales person(s). In such cases, one would expect the depth
of information and analysis to be substantially less than in larger
companies and to be reflected in less detailed reporting or possibly
no reporting in certain areas of the PMN. (These and other assumptions
are detailed in Chapter IV.)
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TABLE 1
INFORMATION AND PROFESSIONAL SKILLS APPLICABLE TO PREMANUFACTURE NOTICE FORM
PROFESSIONAL SKILLS
TYPES OF INFORMATION MANAGERIAL
Confidentiality X
SALES &
LEGAL MARKETING CHEMISTRY TOXICOLOGY
X XX
ENGINEERING
X
OCCUPATIONAL ENVIRONMENTAL RISK
HYGIENE SCIENCES STATISTICS ANALYSIS
TRANS-
PORTATION
SYSTEMS
Manufacturer Identification X
Chemical Identity
Impurities
Production Volume X
Category of Use X
Contact with Drinking Water X
Manufacturing History X
Hazard Warnings
Transport
Risk Assessment X
Process Information
By-products, Co-products, etc.
Pollution Control
Gross Mass Balance
Occupational Exposure
Environmental Release & Disposal
Detection Methods
Consumer Exposure
Federal Register Notice
Attachments ' X
X
X X
X
X
X
XX X X
X XX
X
X
X
X X
X
X
XXX
X XX
XX X X
X
X
X
X
X
X
X
X
X
X
X
X
X X
XX X
X X
X
X
X X
X
X
X X
X X
X XXX
X
X
X
X
X
Source: Arthur D. Little, Inc., estimates.
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VI. ARTHUR D. LITTLE, INC. ESTIMATES OF COSTS
FOR PREPARATION AND SUBMISSION OF PREMANUFACTURE NOTICE FORM
A. PROCESS AND ASSUMPTIONS
Our staff developed cost estimates for preparing and submitting
the PMN form by estimating the time needed to complete individual
items on the form. The cost estimates were developed using PMN
form drafts of June 28 and July 23, 1979; however, they have been re-
vised to be consistent with our understanding of the PMN form as it
will be reproposed. These estimates are based on a projection of steps
that will ordinarily be followed in the preparation of a PMN form
(Table 2). These projected steps are general and are independent of
the specific requirements of any individual form. Although a step for
asserting and substantiating claims for confidentiality is included in
Table 2, this step is not included in the base estimates presented in
Section B of this chapter, but rather is discussed separately in
Section D.
Estimates of the cost for preparing the notice form are based on our
estimate of the likely responses of a prudent firm—one that will sub-
mit the form with the expectation that it will be acceptable in terms
of both the sufficiency arid nature of the data supplied. The costs and
increased market risks resulting from delayed review prior to manufacture
will be an incentive for many companies to try to satisfy EPA expecta-
tions with the initial notification.
27
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TABLE 2
PROJECTED STEPS TO COMPLETE PMN FORM
ANALYSIS OF DATA REQUIREMENTS
- Administrative
- Legal
- Technical
COLLECTION AND ORGANIZATION OF INFORMATION
- Data retrieval (computer, local manual, distant post or telex)
- Analysis and verification
- Organization of information to comply with EPA format
COMPLETION AND SUBMISSION OF FORM
- Clerical work
- Legal and Management review
- Submission of completed PMN form
DEVELOPMENT AND SUBSTANTIATION OF CLAIMS FOR CONFIDENTIALITY
- Strategy Development
- Development of Substantiation
- Form Preparation
- Management Review
28
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Company organization and structure, specific chemical-related data and
regulatory factors can also influence the costs of preparing and sub-
mitting a PMN form, as has been discussed in Chapter IV, and have been
considered in a general way in preparing these cost estimates.
In addition, several other assumptions have a bearing on this analysis
of the premanufacture notification costs.
(1) The. time. eAtimateA given in thi& fiepotit one. a&Aumed to
fivprumnt a. manu.6actust.esi'& .-.
c&uded in thi& anaty&i&.
At the outset, the time required for companies to complete the PMN form
will reflect their unfamiliarity with the form itself and with the re-
sponses from the Agency to the submitted forms. It is expected that
the administrative costs will decrease as companies become familiar
with the Premanufacture Notice form and with the responses from the
Agency to the submitted forms. For example, with experience, companies
may find it to their advantage to arrange their data collection and
recovery protocols to fit with Agency requirements. However, these
and other learning curve effects have not been included in this analysis;
the estimates presented represent a manufacturer's effort in an early
stage of the learning process.
29
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(2) It JA owumed that data, frequented -en the. PMN ^ofrm hot
not pfreuiou&ty been frequented by othefr Fedefrat ofr &tate.
ogenote*.
No allowance was made in this analysis for the possibility that data
developed for other Federal agencies or for the satisfaction of state
or local requirements would also be appropriate for use in completion
of the Premanufacture Notice form. Although similar data may be re-
quired by other agencies, it is expected that the different needs of
these organizations, in comparison to the requirements of EPA, may
necessitate a unique effort to complete a satisfactory Premanufacture
Notice form and result in little cost savings.
(3) It 4A an&umed. tinaJL the. avaM&bULLty o£ the. vafrioun typen
o& data, frequented on tke. PMN &onm \#UUL vasiy among com-
panies, and that 4ome PAW ^ofm& wUUL be. submitted with
lowest teveZA o& detaM. than, othesu.
The range of cost estimates provided in this report acknowledges the
varying levels of knowledge, expertise and sophistication found in
the chemical industry. The range also relates to the "reasonably
ascertainable" issue which was discussed in Chapter IV of this report.
30
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B. RESULTS
Time estimates to complete the Premanufacture Notification form, assuming
no claims for confidentiality are made, are shown in Table 3. Estimates
were prepared in accordance with the methodology described in Chapter III,
Approach. Following the derivation of these time estimates, they were
reviewed with representatives of EPA to ensure that there was mutual
agreement as to the Agency's intent in the formulation of the questions
and data requirements.
The time estimates lead to a range of costs from $1155 to $8925 to com-
plete the form (Table 4). The ranges detailed in Table 3 and Table 4
are likely values for different types of companies and are not intended
to represent extreme (maximum or minimum) points. Clerical time is not
detailed in Table 3, but was estimated separately and ranges from 8 to
40 hours for all parts of the PMN form.
31
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Table 3
TIME ESTIMATES TO
COMPLETE PREMANUFACTURE NOTICE FORM1
(Assuming no claims for confidentiality by filing company)
Technical
(hours)
Managerial
(hours)
PART I. General Information
CO
ro
SECTION A. Manufacturer Identification
1. Person Filing Notice
2. Technical Contact
3. Parent Company
4. Intended Manufacture Year
5. Prenotice Communication Number
SECTION B. Chemical Identity
1. Class I Chemical Substance3
a. CAS Registry No.
b. Specific Chemical Name
c. Molecular Formula
d. Synonyms
e. Trademarks
f. Structural Diagram
2. Class II Chemical Substance3
a. CAS Registry No.
b. Specific Chemical Name
c. Synonyms
d. Trademarks
e. List of Precursor(s)
1-82
1-4
1-4
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Table 3 (Cont.)
Technical
(hours)
Managerial
(hours)
PART I. General Information (continued)
00
c*>
SECTION B. (continued)
3. Polymers3
a. Monomers and CAS Registry No.
Range of Composition, Maximum Residual
b. Minimum Molecular Weight
4. Impurities (Identify, quantify)
SECTION C. Generic Names
SECTION D. Production and Marketing Data
1. Production Volume
a. First Year
b. Second Year
c. Third Year
2. Category of Use
a. List Categories of Use(s)
b. Other Use(s)
c. Contact with Drinking Water
3. Previous Manufacture
4. Hazard Warnings
5. Customers
1-5
1-8
0-4
1-4
1-8
0-8
0-1
1-2
-------
Table 3 (Cont.)
Technical
(hours)
Managerial
(hours)
PART I. General Information (continued)
SECTION E. Transport
1. Shipping Name/Hazard Class
2. Mode of Transport
SECTION F. Risk Assessment
0-16
0-2
SECTION G. Detection Methods
1. In workplace air
2. In effluent streams
3. In materials requiring disposal
4. In end products
1-4
PART II. Human Exposure and Environmental Release
SECTION A. Industrial Sites Controlled by Submitter
1. Process Information
1.1 Identity of Site
1.2 Type of Site
1.3 Hours of Operation
1.4 Amount Manufactured
2. Block Diagram
a. Major chemical reactions
b. Mass of all feed materials, by-product
materials and products
c. Release points
1-4
1-24
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Table 3 (Cont.)
Technical
(hours)
Managerial
(hours)
PART II. Human Exposure and Environmental Release (continued)
CO
cr
SECTION A. (continued)
3. Occupational Exposure
3.1 Identity of Site
3.2 Occupational Exposure at Site
3.3 Direct Exposure
3.4 Physical State
3.5 Other Substances'*
4. Environmental Release and Disposal
4.1 Identity of Site
4.2 Quantity, Duration, Media
4.3 Composition
4.4 Pollution Control Equipment
SECTION B. Industrial Sites Controlled by Others
1. Process Information - Identity of Site
2. Process Description
3. Occupational Exposure
3.1 Identity of Site
3.2 Occupational Exposure at Site
3.3 Direct Exposure
3.4 Physical State
2-16
2-16
1-12
0-2
0-14
0-20
2-6
0-2
0-2
-------
Table 3 (Cont.)
Technical
(hours)
Manager1al
(hours)
PART II. Human Exposure and Environmental Release (continued)
SECTION B. (continued) '
4. Environmental Release and Disposal
4.1 Identity of Site
4.2 Quantity, Duration and Media
4.3 By-product material requiring disposal
•CTION C. Consumer and Commercial User Exposure
CO
en
1. Table - Route, Frequency and Number Exposed
2. Exposure Levels
3. Product Aspect Affecting Consumer Exposure
4. By-products of Use
0-8
0-16
0-4
0-4
0-4
0-2
PART III. List of Attachments
a. Physical and chemical properties data
b. Health and environmental effects data
c. Notice attachments5
d. Confidentiality attachments6
e, Voluntary attachments7
4-16
8-40
1-4
2-8
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Table 3 (Cont.)
Technical
(hours)
Managerial
(hours)
PART IV. Federal Register Notice
A. Chemical Identity
B. Manufacturer Identification
C. Use Data
D. Test Data
1-8
1-2
00
•VJ
NOTES:
Clerical time estimated for the PMN form to be between 8 and 40 hours.
2Includes time for final technical, management and legal review of the entire completed form.
30nly one of these subsections (1, 2 or 3) will be completed for any individual chemical. Thus, only
the time and cost estimates of only one item are included in the totals.
^Includes by-products, co-products, feedstocks, and intermediates.
5Time estimates for attachments have been included in the estimates above.
6See Chapter VI, Section D for development of cost estimates for asserting and substantiating claims.
7No time was estimated for voluntary attachments.
SOURCE: Arthur D. Little, Inc. estimates.
-------
Table 4
SUMMARY OF TIME AND COST ESTIMATES FOR ,
PREPARATION AND SUBMISSION OF PREMANUFACTURE NOTICE FORM1
Clerical Technical Managerial Total
Part I: General Information 2-10 hrs 7-59 hrs 2-13 hrs 11-82 hrs
Part II: Human Exposure and Environmental 4-20 7-144 2-10 13-174
Release
Part III: List of Attachments 1-8 12-56 3-12 16-76
Part IV: Federal Register Notice 1-2 1-8 1-2 3-12
oo Total Time 8-40 hrs 27-267 hrs 8-37 hrs 43-344 hrs
Cost per hour $10 $25 $50 —
Total Cost $80-400 $675-6675 $400-1850 $1155-8925
Assumes no claim for confidentiality made by filing company.
SOURCE: Arthur D. Little, Inc., estimates.
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C. DISCUSSION OF COST ESTIMATES
This discussion is intended to provide an understanding of the specific
estimates presented above.
The sections in Part I of the form cover items of general information
required by TSCA.- The time range estimated for completion of Section A
includes the attention given to final management and legal review of the
completed form and represents, at the low end (one hour), a modest re-
view of a simple form containing minimal information. At the upper end,
eight hours would allow for a detailed review by one or more senior man-
agement personnel (e.g., president, director of research, corporate
counsel, etc.).
The time estimates for chemical identity (Section B) would be expected
to cover a range of activities including transcription of existing
:f-;
data for chemicals for which notice is planned, and input from litera-
ture specialists and chemists to search and validate chemical structure
data bases. The time estimates for acquiring and transcribing data on
impurities, which might be required in the case of a complex mixture
of substances, would involve similar activities. The derivation of
generic names (Section C) would be required only if confidentiality
were claimed, thus a low estimate of no time is indicated for this
item.
In Section D, a maximum of 12 hours may be expended to assess production
volumes and items concerned with information on use. Under some cir-
39
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cumstances, such as making a chemical for speculative sale, manufacturers
would have available neither production nor use data, and a lower estimate
of one hour for each category appears to be suitable.
For chemicals destined as intermediates within the same chemical complex,
no transportation would be required, thus requiring no time for Section E.
In contrast, a chemical shipped to many customers by different modes of
transport would require multiple pieces of information, or about one day's
effort in completing this section.
If a risk assessment evaluation (Section F) is available, it must be
included. Thus, for companies that have not prepared a risk assessment,
this section would require no time. For those that have prepared a risk
assessment, a range of costs would depend on the complexity of the risk
assessment document and on the effort necessary to prepare a submission
suitable to EPA from an internal company document(s). An upper time
estimate of 16 hours is reasonable for consideration of a new chemical
for which a company has prepared a detailed internal risk assessment.
In general, one would expect such detailed assessments in the larger
companies that have adequate professional staff to prepare these docu-
ments.
Section G requests information on detection methods. Because it is
likely that a company has considered this aspect of the manufacturing
operation an upper bound of four hours would seem sufficient to summarize
this information even for complex chemicals or processes.
40
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Part II of the form requests information on human exposure and en-
vironmental release. The time estimates for the components of Section A
which deal with information on industrial sites controlled by the sub-
mitter represent a rather wide range. Reporting process information
will be influenced by a number of factors, including the number of steps
in the process, the complexity of the process, a number of locations of
manufacture, and final disposition of product and by-products. As each
of these items increases in magnitude and/or complexity, the costs would
be expected to increase. Further, the capabilities of a company in pro-
cess engineering and design (as may be reflected by company size and
mode of operation) would also influence the time and costs to complete
this section of the PMN form.
Similarly, these factors will also influence the time expended in dealing
with the other components of Part II (occupational exposure and environ-
mental release and disposal). In general, simple processes with few
starting materials resulting in few or no by-products will require a
minimum time for reporting the information.
Section B of Part II requests information on industrial sites con-
trolled by others. As in Section A, the details of the process will
play a large role in determining the amount of time necessary to com-
plete this part of the PMN form. At a minimum, no time would be in-
volved if the chemical in question is utilized only within the company
of the submitter, or if the manufacturer had no information nor could
obtain any on the processing and use of the chemical in customer operations.
41
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An intermediate in a synthesis sequence or a material incorporated di-
rectly into an industrial or consumer use product by the manufacturer
would be examples of substances not requiring consideration in Section B.
In contrast, a chemical substance that is widely sold or distributed
could result insubstantial costs to the manufacturer if a large effort
is expended to obtain information from customers or if the manufacturer
possesses detailed information on customer processing, use, or disposal
of the new chemical. It is assumed that companies will make a reason-
able effort to get this information from customers, if they do not
already have it, in order to respond to the PMN request for data on
this subject. The Agency has not developed final guidelines with respect
to the depth and thoroughness of information that will be considered
"reasonably ascertainable" under this section to fulfill expectations
for a valid PMN notice. Moreover, the acquisition of data from cus-
tomers will depend in large measure on the relations between suppliers
and customers and on industry practice in certain product areas.
areas.
Similarly, in Section C, which deals with consumer and commercial user
exposure, chemicals for which no consumer or commercial sales are en-
visioned would not require completion*of this, section. One difficulty
in acquiring information for Sections B and C of Part II may be the
reluctance of customers to reveal use or processing data in order to
maintain a proprietary position. Thus, varying amounts of information
are likely depending in large part on the working relationships between
manufacturers and customers.
42
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The time estimates to provide the attachments for physical and chemical
properties and health and safety data as requested in Part III are
necessarily of a wide range. This range reflects the amount of infor-
mation that may be available in different companies, as well as the
detail in which these data will be submitted. For example, a complex
organic chemical is likely to be produced in a complex chemical process
in conjunction with by-products, co-products, and intermediates, many
of which may not be on EPA's chemical inventory. This would necessitate
submittal of any test data which exists for these related chemicals.
In addition, if the chemical is sold into consumer markets, the manu-
facturer is likely to have test data in several areas (possibly in-
cluding acute toxicity, consumer exposure, worker exposure, and safety
and handling), which must be supplied to EPA in a PMN form. Conversely,
for a simple inorganic compound, proposed for industrial use, a company
is likely to have more limited test data to submit in the PMN. '^
The data for Part IV, Federal Register Notice, would generally be avail-
able from other parts of the PMN notice. However, since this item is
communicated to the public immediately, companies will be likely to
complete and review this section with considerable care. Thus, a maxi-
mum of eight hours technical time and two hours managerial time should
be sufficient to complete this part.
43
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D. CONFIDENTIALITY
Background
The costs of asserting and substantiating claims of confidentiality are
discussed in this section independent of the costs of preparing and sub-
mitting a PMN form. These costs should be viewed as incremental to the
costs for PMN submission.
The costs associated with asserting and substantiating claims of con-
fidentiality are likely to vary widely from company to company within
.the chemical industry, depending on a number of factors, including the
importance of confidentiality to a company's overall competitive strategy.
Although some companies will not claim any of the information submitted
tin a PMN as confidential, many companies are expected to have strong
needs to protect their products, processes, and customers. Thus, de-
pending on each company's need for confidentiality on a specific product,
the amount of time and effort devoted to making and substantiating these
claims will vary.
A company's strategy for preparing and substantiating claims of confi-
dentiality will be influenced by a number of other factors. For example,
both the provisions of the Freedom of Information Act and the Agency's
own general rules* governing the treatment of confidential information
i
are likely to influence a company's process for asserting and sub-
stantiating confidentiality claims for business information provided
*40 CFR, Part 2
44
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to EPA. Moreover, the nature of TSCA itself, in that it deals with
specific chemicals and chemical processes, is such that companies will
be required to submit business information which may be considered con-
fidential. The submission of confidential business information would
necessitate an assertion of a confidentiality claim even in the absence
of a standardized PMN form. In many cases such a claim may have to be
substantiated. It is recognized that some level of effort and cost
for asserting and substantiating confidentiality would be expended in
most instances in which confidential business information is submitted
under the PMN program.
Other factors influencing the cost of PMN submission were discussed in
Chapter IV, and include such characteristics as company size, the com-
pany's level of R&D or new chemical development activity, the degree of
corporate centralization, and others. These factors can also be ex-
pected to influence the Cost of claiming confidentiality, although the
overall role of confidentiality in a company's strategy appears to have
the foremost influence on the costs for asserting and substantiating
claims for confidentiality.
In addition to the company specific factors discussed above, the format
of the requirements for asserting and substantiating claims for con-
fideiytiality can influence the total cost. For example, a company's
freedom to determine the scope, depth, and timing of information pre-
sented would, all else being equal, affect the total cost of claiming
confidentiality.
45
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Because of the complex interrelationships among these factors, no attempt
has been made to separate the costs directly attributable to the reproposed
PMN form from those costs inherent in the submission of any confidential
business information.
Reproposed Confidentiality Provisions
The requirements for claiming confidentiality for elements of the re-
proposed PMN form differ from the requirements associated with the
January 10, 1979 proposal. Under the reproposed program, a company
is asked to provide substantiation for all confidentiality claims at
the time the initial PMN form is submitted to EPA. Additionally, the
reproposed PMN form provides specific questions for substantiation
of confidentiality, thus reducing the uncertainty associated with pre-
paration of a PMN confidentiality substantiation. The key elements
of the current proposed requirements are outlined below:
• Every item on the PMN form may be claimed confidential;
however, all claims must be substantiated at the time of
submission.
0 Six general categories of claims are recognized by EPA:
(A) Manufacturer's Identity,
(B) Chemical Identity,
(C) Production Volume,
(D) Use Data,
(E) Process Information, and
(F) Other.
46
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0 Detailed substantiations are required for the Chemical
Identity and "other" categories.
• Less detailed substantiations are required for the re-
maining four categories.
• Claims may be made by placing letter(s) in boxes on the
PMN form which correspond to the item(s) claimed. The
letters correspond to the six general categories outlined
above.
• In addition, a "sanitized" copy of the attachments to the
PMN form must be submitted with all confidential information
deleted.
0 Any items of information may be "linked" to any of the
first five general categories, and in such cases require
an explanation of the "linkage," assuming the main category
claims are substantiated.
• For certain categories of claims, generic information must
be provided:
- If chemical identity is claimed confidential, then a
generic name must be included.
- If physical/chemical properties are claimed confidential,
then generic physical/chemical information must be included.
47
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- If use is claimed confidential, a generic use must
be included.
- If manufacturer's identity is claimed confidential,
a generic manufacturer's description must be included.
EPA's revised approach was designed to minimize the burden to substantiate
claims of confidentiality for information which may be of significant
commercial value but which the Agency feels may not be as useful as other
data in assessing the potential risk of new chemicals. However, the greatest
substantiation is requested for data which the Agency considers necessary
to conduct an independent assessment of the potential risk of the new
chemical. This revised approach also was designed to discourage companies
from claiming all information on the PMN form as confidential.
The format changes were initiated by EPA to meet three objectives: to
provide the public with sufficient data to review premanufacture notices;
to provide the Agency with sufficient information to allow it to respond
promptly to Freedom of Information Act requests when received; and to
minimize the need for the company to repeatedly provide additional in-
formation to substantiate a claim of confidentiality.
Arthur D. Little, Inc. Estimates for the Cost to Assert and Substantiate
Conf identi ality C1aims
Although the exact level of effort required to develop and substantiate
claims for confidentiality may be influenced by a number of factors, re-
lated to both company/chemical characteristics as well as the format of
regulatory requirements, it is possible to identify a general process
48
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that is likely to be followed by most companies in approaching the issue
of confidentiality. The nature and sequence of these steps are largely
independent of the specific requirements posed by EPA for claiming con-
fidentiality. Instead, they relate primarily to the overall approach a
company might take in responding to any set of confidentiality require-
ments. Recognizing that this list is general in nature and that the de-
tails of the process will vary by company, it seems likely that most
companies will utilize some variation of the following generic process
for claiming confidentiality: ',.
(1) Strategy Development—Determine which element(s) of in-
formation on the PMN form to claim as confidential, in-
cluding categories of claims and linkages.
(2) Substantiation Development—Substantiate confidentiality
claims by developing responses to questions or require-
ments in each EPA category claimed confidential. Deter-
mine appropriate linkages. Obtain corporate management
certification of claims, as required.
(3) Form Preparation—Prepare "sanitized" attachments, ex-
cluding all confidential information. Make appropriate
annotations on the complete PMN form to indicate con-
fidentiality assertion(s).
•- r.t "•£#*
(4) Review—Review both the completed PMN form and the
"sanitized" attachments with appropriate in-house staff,
49
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and In some cases outside legal counsel, to Insure the
document's proper completion.
The level of effort required for the first step in this general process
is likely to vary according to the number of potential decision makers
involved. In small companies, a decision regarding which information
to claim confidential could probably be made by the top one or two com-
pany officers with approximately two hours of total effort. Some larger
companies are likely to enlist the advice of a wide range of interested
departments, such as engineering, marketing, sales, R&D, environmental
affairs, and legal. Such an effort may require about 24 hours. Thus,
the time required to develop an appropriate strategy for confidentiality
could range from approximately 2 to 24 hours.
The second step in the process, developing substantiations, may require
the most significant time investment of the four major steps. The pri-
mary factors influencing the amount of time required for this step appear
to be the importance of confidentiality in a company's strategy and the
format of EPA requirements for claiming confidentiality. Under the cur-
rently proposed confidentiality requirements, a company desiring to main-
tain only one category of the information supplied on the PMN form con-
fidential might be expected to spend up to approximately 12 hours both
responding to the questions supplied by EPA for that one category and
briefly reviewing those answers with a legal staff members. The Manu-
facturer's Identity category may require less time, depending on the
number of linkages. At the other extreme, a company that desires to
50
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Belong To:
^'lMt'tre£t,SV/(TC-7.93;
Washington, DC 20460
maintain essentially every element on the form confidential might invest
the equivalent of roughly 12 hours on each of the five categories de-
veloped by EPA, for a subtotal of 60 hours, and an additional 40 hours
in such tasks as developing and answering questions for the "other"
category, making appropriate linkages, and obtaining inputs from the
legal staff. Thus, in such a situation, the total time invested in the
second step of the confidentiality process might approximate 100 hours.*
The third step in the process—formating the responses and preparing the
form—would require largely clerical input. The time is estimated to
range from two hours, in a simple case, to 16 hours, in a case in which
most or all items are claimed confidential.
The time required for the fourth step—review—can be expected to vary
according to both the number of decision makers involved in the process
and the amount of information claimed confidential. In some situations
*In the absence of EPA's current requirements to claiming confidentiality,
individual companies would have more freedom to determine the scope and
depth of their substantiations. Under the guidelines for claiming con-
fidentiality that accompanied the proposed January 10, 1979 PMN form,
substantiation was not required at the time of submission for all items
claimed confidential. Thus, a company faced a wide range of options from
providing no substantiations for some items to providing extremely de-
tailed exhaustive substantiations for every item claimed confidential.
It is, therefore, reasonable to assume that greater company-by-company
variations in effort expended on the second step in the confidentiality
process—developing substantiations—would occur in the absence of EPA's
current confidentiality provisions. Under these conditions, the range
of time required could conceivably be much broader than the range esti-
mated above.
51
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in which only one item is claimed confidential and only a few people are
involved in the review process, a total of approximately two hours may
be invested. In other more complex situations, as much as 20 hours may
be required.
a
Our estimates for the level of effort required for claiming confidentiality
is summarized below:
Level of Effort
(1) Strategy Development 2-24 hours
(2) Substantiation Development 12-100 hours
(3) Format Preparation 2-16 hours
(4) Review 2-2Q hours
Totals 18-160 hours
This range of hours reflects the likely values for the entire confidentiality
process for different types of companies that choose to make a confidentially
assertion, and is not intended to represent extreme (maximum or minimum)
points. For example, a simple claim of Manufacturer's Identity without
any linkages may involve substantially less than 18 total hours.
The above range of hours would correspond to an estimated cost range Of
$900 (for 18 hours of effort at $50 per hour) to $6400 (for 160 hours of
effort at $40 per hour). The differences in the hourly rates reflect a
higher management content in the 18 hour estimate and a higher proportion
of technical and staff participation in the 160 hour effort. At the low
end of the range, the 18 hours could represent either a detailed treatment
of a single category or a very general treatment of several categories.
52
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Chemical Industry Estimates of Confidentiality Costs
As a check on our estimates, eight chemical companies were contacted and
asked to estimate the time required to complete the revised confidentiality
form. Although most companies contacted were willing to comment on the
general importance of confidentiality in their company strategy, few
felt prepared to estimate the time that would be required for this pro-
cess. Those cost-related comments which were received are summarized
bel ow.
t A large company (with sales over $500 million) indicated that
all of their new chemicals would require some degree of con-
fidentiality protection. The costs associated with claiming
confidentiality would range from $600 for the minimum number
of claims to $6000 for numerous claims.
• A small private company indicated that most products would
not require any confidentiality claims, but those that did
would require extensive protection. This company estimated
that the process of asserting and substantiating claims for
confidentiality would require approximately $1650 in mana-
gerial and clerical time, with an additional $300 to $350
for an outside lawyer to examine each form, bringing the
total to approximately $2000.
53
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VII. SELECTED CHEMICAL COMPANY ESTIMATES OF COSTS FOR
PREPARATION AND SUBMISSION OF PREMANUFACTURE NOTICE FORM
A. PROCESS
In an effort to verify estimates prepared by Arthur D. Little, Inc.,
we contacted eight chemical companies and asked them to estimate the
time and cost for completing the PMN form, using the June 28 and July 23,
1979, drafts. These costs estimates have not been revised to reflect
changes in these drafts, but any revisions would be expected to be small.
In addition to incorporating the attachments as integral parts of the
PMN form, explicit differences between the reproposed form and the
June 28 form used by most of the chemical companies to estimate their
costs, are summarized in Table 5.
The companies selected had a range of sizes, markets and product lines.
Our staff met separately with representatives of these companies
and reviewed the PMN form with them, discussing the approach that
the company would take to submitting a PMN, the key persons responsible
for the PMN, as well as the time and cost for completing the form.
Specifically, companies were asked to make their own estimates of time
to complete each of the major sections of the PMN form, and then to es-
timate the average cost per hour for persons involved in the process.
Several questions were also directed at ascertaining current testing
practices, data availability within the company, and customer relation-
ships that might facilitate obtaining information on processing or use
of new chemicals.
55
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TABLE 5
CHANGES IN PMN FORMS FROM JUNE 28. 1979
en
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Part I.A. - Manufacturer Identification
Part I.B. - Chemical Identity
Part I.C. - Generic Names
Part I.D. - Production and Marketing Data
Part I.E. - Transport
Part I.F. - Risk Assessment
Part I.G. - Detection Methods
Part II.A. - Industrial Site Controlled by
the Submitter
Part II.B. - Industrial Sites Controlled
by Others
Part II.C. - Consumer Exposure
Part III - Attachments
Part IV - Federal Register Notice
Addition of Question 5 on Prenotlce Communication
None
None
Addition of two use categories (Industrial* commercial)
Addition of customer Information
None
New Section (if available)
Moved from Part II.A.4
Modification of Question 1 on process Information and
block diagram.
Removal of Question 3.B on environmental release and
disposal of by-product. Moved questions on release, pol-
lution control equipment and disposal operations from
process description to environmental release and disposal
section.
None
Addition of Question 4 on by-products
Attachments A-D and Tables 1 and 2 now incorporated in the
body of PMN form.
Was Part III, Section A; addition of Item 2 on
Manufacturer Identification
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B. ESTIMATES
The estimates that were obtained from staff members of the companies
visited are summarized in Table 6. In addition to the time and cost
estimates, the sizes of the companies in terms of annual sales volume
and work forces, as well as their primary product areas are given.
57
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TABLE 6
COMPANY ESTIMATES FOR TIME/COST TO COMPLETE PMN FORMS
COMPANY CHEMICAL SALES EMPLOYEES INDUSTRY SEGMENTS TIME TO COMPLETE FORM (HOURS) TOTAL TIME COST RANGE
($ Millions)
A 1,250
B 500
C 65
D 10
E 10
F 7.5
G 5
H 1.5
13,900
6,900
575
65
65
50
22
12
Plastics, Polymers
Industrial Chemicals
Inorganic/Organic
Chemicals
Hydraulic & Metal
Cutting Fluids
Pigments & Vehicles
Surfactants
Fragrances & Aromatic
Chemicals
Plastic Resins
Silicon Compounds
Part I
127-142
24-31
6-10074
4-16
8-16
3
3
16-41.
Part II
154-1, 0134
182-278
64
20-40
8-16
10
9
51-68
Part III
84-90
15
7
16-32
4-8(+40)]
3(+4)2
1(*4)2(+11)'
1-2
(Hours)
365-1,245
221-324
77-1,078
40-88
60-80
16-32
J 24-40
68-111
$
12,800-42,800
3,000-3,900
1,900-21,900
2,000-4,400
3,000-4,000
900-2,000
1,200-2,100
1,800-3,100
Additional time required to develop and substantiate claims for confidentiality and prepare "sanitized" copy of PMN form.
Clerical time.
3
For review and contact with EPA.
4
Includes analytical work which may be necessary to adequately complete PMN form.
SOURCE: Company estimates as reported to Arthur D. Little, Inc.
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C. DISCUSSION
For the most part, company estimates substantiated the estimates prepared
by Arthur D. Little, Inc. except that the range of costs as estimated
by the companies was wider. We believe these estimates reflect the im-
portance of the technical factors described earlier and that companies
have taken these factors into account when making their estimates. In
particular, the low end of the company-derived cost estimates reflects
an individual company's ability (or willingness) to submit only minimum
amounts of data and to indicate that they do not know and cannot reasonably
obtain additional information. The higher cost estimates reflect a com-
pany's concern over the PMN process and willingness to provide detailed
vSfl.
information, even though such data may not be explicitly required, in
the hope of insuring successful completion of the review process. As
discussed previously, we believe these cost estimates reflect some degree
of unfamiliarity and uncertainty regarding the PMN requirements and EPA's
response to PMN submissions.
As shown in Table 5, Company A has estimated their lower-bound cost es-
timate of completing a PMN form significantly above the other seven com-
panies' estimates. This is a result of Company A's higher cost estimate
for technical time ($35/hr) and also of their high estimate of time re-
quired for reporting on industrial sites controlled Jby others. Many of
their products are processed at hundreds of locations soon after • intro-
duction into the market; the company plans to obtain and report infor-
mation on many of these sites.
59
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In all cases, except Company E, the cost estimates do not include the time
and cost for asserting and substantiating claims of confidentiality. This
aspect of the PMN has been discussed previously in Chapter VI.
Although the companies selected for the interviews represent a wide
range of activity within the chemical industry, they are by no means a
statistical sample of the industry. Thus, it is impossible to draw any
conclusions from these data that would relate to the industry as a whole.
Even though the cost data appear to cluster in the $2000-$4000 range,
there is no assurance that sampling another group of companies would
result in the same clustering. Moreover, the complexity and number of
interacting variables that influence each individual company must be
recognized in any analysis of this type and the results should be treated
with appropriate caution.
60
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APPENDIX A
COST ESTIMATES FOR CHEMICAL MANUFACTURERS'ASSOCIATION (CMA)
PREMANUFACTURE NOTIFICATION FORM OF MARCH 26, 1979
EPA asked Arthur D. Little, Inc. to provide cost estimates for the PMN
form alternative provided by the Chemical Manufacturers'Association (CMA,
formerly the Manufacturing Chemists Association), this form is a re-
sponse from the CMA to the invitation of the Agency in January 10, 1979,
proposal to comment on the PMN form. The CMA form is divided into man-
datory and optional sections, similar to the proposed EPA form. Thus,
the cost estimates for preparing the CMA form should be compared to cost
estimates for the January 10, 1979 EPA form as well as the reproposed
EPA form.
The matrix detailing the skills relevant to completing the CMA form are
shown in Table A-l. This skill matrix is similar to the one for the re-
proposed PMN form presented in Chapter V. The time and cost estimates
to complete the sections of the CMA form are summarized in Table A-2
and a detailed breakdown of the time estimates is shown in Table A-3.
Clerical time has been estimated separately for each part, and is not
detailed in Table A-3. For sections of the CMA form considered as
mandatory (parts I and II), the total costs are estimated to be in the
range of $955 to $5500.
The preparation of the optional Parts III and IV could add $7,400 and
$4,100, respectively, to the cost of completing the form.
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TABLE A-1
INFORMATION AND PROFESSIONAL SKILLS APPLICABLE TO PREPARATION OF MANUFACTURING CHEMISTS ASSOCIATION PREMANUFACTURE NOTICE FORM
TYPES OF INFORMATION MANAGERIAL LEGAL
(Parts I and II)
PROFESSIONAL SKILLS
SALES & OCCUPATIONAL
MARKETING CHEMISTRY TOXICOLOGY ENGINEERING HYGIENE
TRANS-
ENVIRONMENTAL RISK PORTATION
SCIENCES STATISTICS ANALYSIS SYSTEMS
Submitter Identification X X
Chemical Identity
Impurities
Confidentiality X X
Production Volume ^
£ Categories of Use X
Federal Register Notice X
Attachments X X
Physical/Chemical Properties
Health/Environmental Effects
Occupational' Exposure
Environmental Release & Disposal
By-products
X
X X
X
X X
X
XX X
X X X X X
X X
X X
X X
X X
X
X
X
X XXX
X X
X
X X
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TABLE A-1 (Continued)
INFORMATION AND PROFESSSIONAL SKILLS APPLICABLE TO PREPARATION OF MANUFACTURING CHEMISTS ASSOCIATION PREMANUFACTURE NOTICE FORM
(Parts III and IV [optional])
PROFESSIONAL SKILLS
TYPES OF INFORMATION MANAGERIAL
Risk to Man/Environment
Data on Related Chemicals
Structure-Activity Relation-
ships
Industrial Hygiene Considera-
tions X
Occupational Exposure X
Workplace Safeguards
Environmental Release Safe-
guards X
Industrial Process Restriction
Data ' X
Process Chemistry
Manufacturing History X
Restrictions
Production Volume X
Transport
Benefits
By-products. Co-products, etc.
Pollution Control
Consumer Exposure
SALES &
LEGAL MARKETING CHEMISTRY
X
X
X
X X
X
X X
X
X
X
X
X X
X X
X
X
X
X X
TOXICOLOGY
X
X
X
X
X
X
X
X
OCCUPATIONAL ENVIRONMENTAL
ENGINEERING HYGIENE SCIENCES
X X
X X
X
X X
X X
X X
X
X X
X
X
X X
X X
X X
X
RISK
STATISTICS ANALYSIS
X X
X
X
X
X
X X
X
X
X
X
TRANS-
PORTATION
SYSTEMS
X
X
Source: Arthur D. Little, Inc., estimates.
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TABLE A-2
Time and Cost Estimates for Preparation and Submission of CMA Form
Mandatory
Total Time
Total Cost
Optional
Part III
Optional
Part IV
Part I (hrs.)
Part II (hrs.)
(hrs.)
Time (hrs.)
Cost
Time (hrs.)
Cost
CLERICAL
2-10
6-30
8-40
$80-400
0-40
$ 0-400
0-20
$ 0-200
TECHNICAL
6-44
15-108
21-152
$525-3800
0-204
$ 0-5100
0-128
$ 0-3200
MANAGERIAL
3-13
4-14
7-27
$350-1350
0-38
$ 0-1900
0-14
$ 0-700
TOTAL
11-67
25-152
36-219
$995^-5550
0-282
$ 0-7400
0-162
$ 0-4100
1
Hourly labor rate estimates: $10-clerical, $25-technical, $50-managerial.
Clerical time estimate developed separately for each part.
Source: Arthur D. Little, Inc., estimates.
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TABLE A-3
Time Estimates to Prepare CMA Premanufacture Notice Form
APPENDIX A
cn
PART I. General Information
SECTION A. Submitter Identification
1. Person Filing Notice \
2. Technical Contact !
SECTION B. Chemical Identity
1. Class I Chemical Substance**
a. CAS Registry No.
b. Specific Chemical Name
c. Molecular Formula
d. Synonyms
e. Trademarks
2. Class II Chemical Substance**
a. CAS Registry No.
b. Specific Chemical Name
c. Synonyms
d. Trademarks
e. List of Precursor(s)
3. Polymers**
4. Impurities
5. Confidentiality (generic name)
TECHNICAL
(hours)
1-4
'1-4
1-4
1-8
0-4
MANAGERIAL
(hours)
1-8*
0-1
**
Includes final technical management and legal review of completed form.
Only one of these subsections will be completed for any individual chemical.
Thus, the time and cost estimates of only one item are included in the totals.
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TABLE A-3 (cont.)
PART I. General Information (continued)
SECTION C. Production and Categories of Use
1. Total Production Volume
a. First Calendar Year
b. Second Calendar Year
c. Third Calendar Year
2. Production per Category of Use
SECTION D. Federal Register Notice
1. Generic Class
2. Use Data
3. Test Data
SECTION E. List of Attachments
PART II. Risk Assessment Data
SECTION A. Chemical, Environment, Human, Ecological Data
1. Physical/Chemical Properties
2. Health/Environmental Effects
SECTION B. Occupational Exposure, Disposal, By-products
1. Industrial Sites Controlled by the Submitter
a. Occupational Exposure
b. Disposal
c. By-products
TECHNICAL
(hours)
1-4
1-8
1-8
1-8
4-16
8-40
2-16
1-8
0-8
MANAGERIAL
(hours)
1-2
1-2
1-4
2-8
1-2
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TABLE A-3 (cont.)
PART II. Risk Assessment Data (continued)
2. Industrial Sites Not Controlled by Submitter
a. Workplace Exposure
b. Disposal
TECHNICAL
(hours)
0-16
0-4
MANAGERIAL
(hours)
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TABLE A-3 (cont.)
PART III. Optional Risk Analysis Information
SECTION A. Risk Analysis
1. Potential Risk to Man/Environment
2. Mitigating Data
3. Implications
SECTION B. Related Chemicals
1. Release/Human Exposure Data
2. Structure-Activity Relationships
SECTION C. General Industrial Hygiene Program
1. Industrial Hygiene Considerations
en 2. Control of Accidential Worker Exposure
3. Worker Health Considerations
4. Other
SECTION D. Specific Safeguards v
SECTION E. Industrial Process Restrictions Data
1. Exclusive Industrial Use Categories
2. Distribution from Manufacture Site
3. Distribution Data
4. Restricted Use/Exclusive Control Factors
SECTION F. Process Chemistry
SECTION G. Additional Production and Use
1. Previous Manufacture
2. Restrictions
3. Firm Orders/Percent Production Volume
4. Business Arrangements-Manufacturing/Import
TECHNICAL
(hours)
0-16
0-20
0-40
0-40
0-16
0-16
0-8
MANAGERIAL
(hours)
0-2
Or4
0-8
0-8
0-4
0-2
0-1
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TABLE A-3 (cont.)
TECHNICAL MANAGERIAL
(hours) (hours)
PART III. Optional Risk Analysis Information (continued)
SECTION H. Transport 0-8 0-1
1. DOT Hazard Class
2. Mode of Transport
3. For Each Mode:
a. Minimum Risk Handling Procedures
b. Maximum Single Transportation Unit
c. Safeguards
SECTION I. Non-Risk Factors: Economic and Non-Economic Benefits 0-40 0-8
1. Economic Changes
2. Environmental and Health Benefits
3. Other Benefits
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PART IV.
TABLE A-3 (cont.)
Optional Additional Information on Worker Exposure
and Environmental Release
SECTION A. Worker Exposure
1. Estimated Exposure During First 3 Years
2. Derivation of Exposure Estimates
3. Minimum Detectable Level in Air
4. Maximum Number of Workers Exposed
5. List Other Substances
SECTION B. Environmental Release
1. Annual Environmental Release
2. Receiving Waterbody or POTW
3. Percent Emission/Effluent Reduction
4. Derivation of Environmental Release Estimates
5. Degradation Prdducts
6. Minimum Detectable Level
7. List By-products, Co-products, Feedstocks and
Intermediates
SECTION C. Exposure From Processing and Use at Sites
Not Controlled by the Submitter
1. Worker Exposure
2. Environmental Release
SECTION D. Consumer Exposure
1. Anticipated Products, Use and Population Exposed
2. Maximum Consumer Exposure
3. Derivation of Estimate
4. Product Aspects Affecting Consumer Exposure
TECHNICAL
(hours)
0-16
0-40
0-16
0-40
0-16
MANAGERIAL
(hours)
0-2
0-4
0-2
0-4
0-2
Source: Arthur D. Little, Inc. estimates.
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