9373.1-4-W
               APPBIPIX
GUIDAMCB FOR STATg-LEAD REMOVAL ACTIONS
            OSWER DIRECTIVE
              9375.1-4-W

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                                   PREFACE
     This--guidance  sets  forth  the policy and procedures  toe  awarding  to
 States  the  authority  and  funds  necessary to lead a CERCLA-funded  removal
 action.  _Jt is  intended to provide Regions with a new management  tool Cor
 handling  their  workload and as  a mechanism for further  delegating program
 responsibilities to States.   Under this program. States nay lead
 non-time-critical  removal actions at NPt. and non-NPL sites. Authority  to
 enter into  a Cooperative Agreement with interested States rests with the
 Regional Administrator  as set forth in Delegation 14-1-B  (Superfund  State
 Contracts and Cooperative Agreements for Removal Actions).

     Provisions of  this  guidance may be subject to revision  given  CTBCIA
 Reauthorization, proposed revisions to the National Contingency Plan and
 removal program policy/guidance development activities.  In addition, it is
 anticipated that revisions to the operating procedures  see  forth  in  the)
 guidance may be necessary once  Regions have obtained expedience in
 implementing Cooperative Agreements with States.

    This guidance has been developed by OSHER's Emergency Response Division
 (ERD) in cooperation with the Hazardous Site Control Division.  Regional
 staff participating in  the implementation of State-lead removal actions
 should contact their appropriate Regional grant personnel or HQ EBO Regional
Coordinator if questions or problems arise when executing a Cooperative
Agreement.

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                                                                   9373.1-4-W
                                  APPENDIX W

                   GUIDANCE FOR STATE-LEAD REMOVAL ACTIONS


I.  SCOPE OF STATE-LEAD REMOVAL ACTIONS

    A.   Types of Cooperative Agreements

         A State must enter into a Cooperative Agreement with EPA before
    beginning a response action using CERCLA funds.  A Cooperative Agrees
    is  the mechanism  established by  the Federal Grant.anc
    Agreement Act  that  a  Federal  agency uses to provide  States or political
    subdivisions with funding  assistance while retaining significant
    involvement  in the  project.   The Cooperative Agreement documents the
    respective responsibilities of the recipient of Federal funds and the
    agency providing  the  assistance.  Cooperative Agreements are aised to:

              Transfer  funds for  specific project(s)                        \

              Document  the State's statutory and regulatory responsibilities
              and  assurances

              Approve project-specific budgets and scopes  of work

              Identify  any special program requirements  related to the
              project

              Document  the Federal agency's role and responsibilities-during
              the  project.

   There are  two  types of Cooperative Agreements:   1) a site-specific
   Cooperative Agreement: and 2) a multi-site Cooperative Agreement
    (MSCA).  State-lead removal actions may be executed via  a site-specific
   or multi-aite Cooperative Agreement.

        1.  Site-specific Cooperative Agreements are appropriate mechanisms
        to fund response activities required at a single site.  These
        agreements cover one removal action at one site and can be amended
        to include subsequent removal activities and to provide funds
        necessary to complete the action at that site.         •     		

        2.  A multi-site Cooperative Agreement is  an "umbrella" Cooperative
        Agreement that, under one funding document, may include several
        response activities at more than one site  within a  State.  MSCAs
        should be used in situations where sites are within close
        proximity.  States requesting to lead removal actions at more than
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                                                               9375.1-4-W
     ana site nay choose to develop a MSCA or an existing MSCA may be
     amended to include a Staca-lead removal.  If the State agency
     Identified to lead Superfund response actions is different from the
     agency certified under an existing agreement with EPA. the State
     must submit to EPA a letter (signed by the Governor or Attorney
     General) indicating it has the authority to accept Federal funds
     -and make the required assurances.

B.  Types of Actions

     1.  State-lead removal actions initially will be limited to
     non-time-critieal removals at NPL and non-MPL sitea.  All
     time-critical removal actions will be Federal-lead, including
     actions that are initially categorized as non-tima-critical,  but
     due to extenuating circumstances,  the Regional Administrator  (RA)
     has determined to be more appropriate for a Federal-lead response
     (e.g., a time-critical response becomes necessary,  required
     response is more extensive than anticipated and exceeds State
     capabilities).   Cooperative Agreements must contain a special      '
     condition to this effect.

          (a)   Non-eime-critical removals  appropriate for State-lead are
          actions where initiation of cleanup or stabilization efforts
          may be delayed for approximately six months or more from tha
          time  the threat is discovered.

          (b)   (Ion-time-critical removals  include  all activities
          formerly categorized as  initial  remedial  measures  (IRMs)  under
          the  remedial program and longer  term removals  that can ba
          planned in  advance.

          (c)   To  date.  State  experience in leading non-time-critical
          actions  has  been limited to IBM-type  activities  previously
          conducted under the  remedial program.  Examples  of State-lead
          IRM-type responses include fence  construction,  erosion control
         and off-sita disposal  of  hazardous waste.   Additional examples
         are provided in Exhibit  1.

     2.  Tha Superfund Comprehensive Accomplishments  Plan  (SCAP) process
     will ba used as a planning/management  tool for identifying removal
     actions appropriate  for State-lead.  Only  removals  that are listed	
     oa tha approved or  revised  SCAP can ba State-lead.
         (a)  Funds may not be obligated for State-lead removal actions
         that do not appear on the approved SCAP.  Removal actions
         under consideration for State-lead must ba listed on tha SCAP
         at least one quarter in advance.  However, these actions may
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                              EXHIBIT 1
EXAMPLES OF STATE-LEAD IRM PROJECTS CONDUCTED UNDER THE REMEDIAL
                             PROGRAM
        Excavation and off-site disposal of surface and buried waste materials and
        contaminated soil

        Fence construction

        Bank stabilization

        Water supply treatment of municipal well

        Installation of carbon filters on private wells

        Construction of lagoon perimeter dike

        Temporary cap for lagoons

        Posting of cautionary signs along creek

        Storm water control

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                                                               9375.1-4-W
          be  projected on the SCAP for more than one quarter in advance
          since, by definition, non-tame-critical removals are action*
          where initiation of cleanup or stabilization efforts nay be
          delayed for approximately six months or more from the tin* the
          threat is discovered.

          (b)  Removal action* identified for State-lead oust be on the
          SCAP before the Action Memorandum and Cooperative Agreement
          can be approved.  Preparation of the Action Memorandum and
          Cooperative Agreement application can begin, however, before
          the removal action is placed on the .SCAP.

          (c)  Revisions to the approved SCAP require coordination with
          EPA Headquarters.  Regional Oil and Hazardous Materials (GHM)
          Coordinators are responsible for initiating any necessary SCAP
          updates/revisions to ensure that sites identified for
          State-lead are placed on the SCAP, as required.  OHM
          Coordinators should contact their designated Emergency
          Response Division (ERD)  Regional Coordinator in EPA           \
          Headquarters when updates/revisions to the SCAP are required.

C.  Scope of Activities

     1.  All CERCLA-funded preliminary assessment and section 104(b)
     activities undertaken to assess  the extent of contamination and to
     determine whether the incident meets the NCP and CflRCLA criteria
     for removal  action will  be Federal-lead.   This  does  not preclude
     States  from leading pro-remedial activities under a  remedial
     Cooperative  Agreement.

     2.  All Engineering Evaluations/Cost Analyses  (EE/CAs)  necessary to
     meet the requirements of the  National Environmental  Policy Act
     (NEPA)  will  be  Federal-lead.

     3.  All enforcement activities,  including Potentially Responsible
     Party (PRP)  search,  and  notification and negotiation with  PRPs will
     be Federal-lead.   State-lead  enforcement activities  for removal
     actions may  be  considered once the  program has  been  implemented.

     4.  Only those  activities authorized in the initial  or  amended
     Action  Memorandum will be State-lead,  including any  post removal
     sit* control  (formerly operation and maintenance or  O&M) that is
     CERCLA-funded.

          (a)   States  will procure and lead all contractor cleanup and
          stabilization activities, including operation and  maintenance
          activities authorized in the Action Memorandum.
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                                                               9373.1-4-W
          (b)  Ones response begins, no party other than the State may
          direct the response activities being performed either by the
          State or its contractors).  However, at the discretion of the
          RA. a response may be determined to be more appropriate for
          Federal-lead (see section 1.3.1 of this guidance).

D.  Approval of State-Lead Removals

     1.  The RA will determine, on a case-by-case basis, removal action*
     appropriate for State-lead.  Factors the RA should consider when
     evaluating a State's request to lead a CERCLA-fundad removal
     include, but are not limited to:

               State experience in leading activities conducted under
               the remedial program (e.g., IRM-type actions) that are
               similar to the response actions required to clean up or
               to stabilize the release at the site under evaluation for
               State-lead.
                                                                        \
               State experience in responding to hazardous substance
               spills/incidents independent of Federal involvement/fund*.

               Existence  of a State Contingency Plan for hazardous
               substance  release response.

     2.  A Removal Action Memorandum and Cooperative Agreement  are
     required for all  State-lead removal actions,   the Action Memorandum
     will be an integral  part of the Cooperative Agreement and  must be
     approved before an Agreement can be awarded to the State.   A copy
     of the  approved Action Memorandum will  be made available to the
     State and will be provided when the Agreement  13 awarded,  if not
     before.   All Cooperative Agreements,  and amendments to the
     Agreement,  will be negotiated at the  Regional  level and approved by
     the Regional Administrator.   OSCs or RPMs.  as  appropriate, will be
     the State's primary  EPA contact for developing and negotiating
     Cooperative Agreements.

          (a)   EPA will prepare the Action Memoranda in accordance with
          current program procedures,  and in close  cooperation/
          consultation with the State.   EPA  will always select  the
          response/activities to be taken at the site in consultation 	
          with the State.   The Action Memorandum must document  that the
          removal will  be State-lead and identify what cleanup  or
          stabilization actions must be  taken within a specified cost
          and  duration.   The  Action Memorandum must also identify
          activities that will be Federal-lead (e.g.,  enforcement
          activities).
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                                                               9373.1-4-W
                     In accordance with program policy and procedures,
                     the AA, OSWER must approve all Action Memoranda for
                     removal actions initially or ultimately expected to
                     exceed the statutory limitation on coat: otherwise.
                     the RA will approve the Action Memoranda, including
                     exemptions to the limitation on time, with OSWER
                     concurrence required on proposed precedent-setting
                     non-NPL removals.

                    Changes in project scope and exemptions to the
                     statutory limitations on cost and duration oust be
                    documented and approved in accordance virth euiteul
                     removal program procedures before the Cooperative)
                    Agreement is amended.  In order to expedite the)
                    approval process.  State Project Officers (SPOe)
                    should contact the assigned OSC/RFM as soon as it is
                    known that an amendment to the Action Memorandum is
                    necessary.

          These procedures are discussed briefly in Section III of this
          guidance and in more detail  in the Superfund Removal
          Procedures manual.

          (b)  States are responsible  for preparing the Cooperative
          Agreement package,  which must include a Cooperative Agreement
          Application, EPA Form 5700-33,  and the attachments discussed
          in section II (Development of Cooperative Agreement
          Application Packages)  of this guidance.

E.  Funding Mechanism

     1.   State-lead removal actions will  be funded via a Letter of
     Credit.

          (a)   Under this method,  CERCLA  funds  are provided to a State
          through an existing  Letter of Credit  established  at a Federal .
          Reserve Bank chosen  by the State.   The  State uses — or "draws
          down" — funds  from  the  credit  account  to cover its immediate
          cash needs.

          (b)   Under a Letter  of Credit,  funds  are obligated when the  RA  ..
          signs the Cooperative Agreement and sends it as an offer of
          award to the State;  funds  become  accessible  to  the  State on  aa
          as-needed basis  upon execution  of the Cooperative Agreement.

     The  State Participation Manual  provides  additional  information on
     the  Letter of Credit  funding  method.
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                                                                937S.1-4-W
 F.    Procurement  Methods/Condi tiona
      Under a  removal Cooperative Agreement, States must award a fixed
 price subagraement  (lump  sun. unit price or a combination of the two)
 when procuring contractor support, regardless of the procurement method
 selected,  unless  it receives the Award Official's prior written approval.

      1.  Methods  of procurement that States may use include small
      purchase, formal advertisement, competitive negotiation, or
      non-competitive negotiation, as appropriate.
     2.  All procurement subagreements oust adhere to »ny ^HT "**"4 "7
     Evaluations/Cost Analyses that may have been conducted by EPA for
     the project covered in the Cooperative Agreement.  A special
     condition to this effect should be included in the Cooperative
     Agreement .

     3.  To conduct procurement activities under the Superfund program.
     a State must either have an internal procurement system that
     complies with the requirements of 40 CFR Part 33 (Procurement under '
     Assistance Agreements) or must use Part 33 as its procurement
     regulation and allow EPA preaward review of proposed procurement
     actions.  Additional information on this requirement is provided ia
     section II. 2 (a) of this guidance and Volume II of the State
     Participation Manual.

G.  State Assurances

     In order to  enter into a Cooperative Agreement for a removal
action, EPA policy requires States  to provide assurances for (1)  sharing
in the cost of cleanup at publicly  operated sites,  (2)  providing a
facility in compliance with the Resource Conservation and Recovery Act
for off-site treatment, storage,  or disposal of substances taken from a
site, and (3) assuming responsibility for post removal  site control
(formerly termed  operation and maintenance or OSM) .   OSCs/RPMs are
responsible for monitoring State  compliance with these  requirements.

     1.  States are  not required  to share in the cost of a removal
     action, unless  that removal  is conducted at an NPL sits  that was
     publicly operated (either by a State or a political subdivision
     thereof) at  the time of a release and a remedial action  is    _______
     ultimately undertaken  at the site.   In these situations.  States  are
     required to  pay 50 percent of  all removal costs.   A State is not
     reouired to  pay its cost share for the removal until the  remedial
     action is  funded by EPA.
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                                                                    9375.1-4-W
          2.   States ara atatutorily required  to  ensure  the availability of a
          hazardous waste treatment,  storage or disposal  facility,  if a
          remedial action requires  off-site treatment, storage,  or  disposal
          of  hazardous  substances.   Such  facilities must  be in compliance
          with Subtitle C of RCRA and a RCRA compliance  inspection  must  haw
          been completed at the  facility  within the six-month period prior to
          the receipt of wastes.  According to current EPA policy on off-site
          disposal (OSWER Directive 09330.2-3), non-tima-critical removal
          actions  are subject to  these requirements.  SPOs should contact
          their EPA-designated OSC/RPM or Regional RCRA Off-sitt Contact
          (RROC) for assistance  in  identifying disposal facilities  and
          resolving issues pertaining to  off-sita disposal.

          3.   Removal program policy  allows for payment of post  removal  sit*
          control  within the twelve months time limit for the entire
          removal.   The  State must  assume responsibility  for post removal
          site  control  at  the conclusion of the removal action.  EPA may
          include  funds  for  post  removal site control for the project period
          covered  in the Action Memorandum.  However, a State must assume
          responsibility  for post removal site control after the completion
          of  the CZRCLA-financed action.   The Cooperative  Agreement
          Application or a  special  condition must provide  an assuranca that
          the State  will assume responsibility for all post  removal site
          control as  long  as  necessary once the action is  complete.

II.  DEVELOPMENT OF COOPERATIVE AGREEMENT APPLICATION PACKAGES

    The State  is resgonsibile for developing the Cooperative Agreement
Application package.  While  the OSC/RPM will be the State's  primary EPA
contact for developing and negotiating Cooperative Agreements for removals.
Regions may elect to assign administrative responsibilities  to Regional
staff other than the OSC/RPM.  State officials responsible  for response
agreements, usually State Project Officers (SPOs)*.  should work closely with
an EPA-designated OSC/RPM when developing the Cooperative Agreement.
Additional support to the CSC/RPM will  be available through the ERD Regional
Coordinators  in EPA Headquarters.  OSCa/RPMs  and OHM Coordinators are
responsible for reviewing the Cooperative Agreement Application for accuracy
and completeness.     ':

    A.   The Cooperative Agreement Application

         The  Cooperative Agreement  Application package  must include EPA Fora
    5700-33 and several attachments. The application fora and the  required
    attachments are briefly discussed below.   Additional information is
    provided  in EPA's manual entitled State  Participation in the Sugerfund
    Program.
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                                                                9373.1-4-W
      1.   When applying for CZRCLA  funds, a Skate must  complete  EPA Fora
      5700-33. Application for  Federal Assistance —  State and Local
      Nonconstruceion  Programs.  This form consists of  five parts:

                Part I  - General Summary Information
                Part II -  Project Approval Information
                Part III - Budget Information
                Part IV -  Project Narrative Statement
                Part V  - Assurances.

      General  instructions for  completing each part arc included in the
      application form.  The State  should ensure that costs included in
      the  application are  allowable for payment under CZBCLA.  To b«
      allowable, proposed  costs must be consistent with section  111 of
      CZRCLA and with Federal cost principles outlined  in the  OMB
      Circular A-37, "Cost  Principles for State and Local Governments."
      the  State  may seek assistance from the OSC/RPM  in determining which
      costs may be allowable.   Final determination of the reasonableness
      of the cost estimates  in  the application will be  made by the  EPA
      Award Official.   Exhibit  2 presents the content and Exhibit 3  the
      appropriate level  of detail required for completing Cooperative
      Agreement budget  information.

      2.   Attachments to the Cooperative Agreement AppIi cation

          A Cooperative Agreement Application for removal  actions must
      include  the following attachments:

               State certification letter
               Procurement System Certification, EPA Form 5700-43
               Intergovernmental review comments
               Communir.y  relations plan,  if applicable
               Quality assurance/quality control (QA/QC)  plan
               Site safety plan

     These attachments are briefly discussed below.   More detailed
      information is provided in the State Participation Manual.
While the term State Project Officer is used throughout the guidance to
denote a State's counterpart to an EPA OSC/RPM, it is recognized that
different terminology may be used among the States.
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                                     "EXHIBIT 2
         OBJECT CLASS CATEGORIES CONTENT REQUIRED FOR COMPLETING
                    COOPERATIVE AGREEMENT BUDGET SHEETS
  CATEGORY
     CONTENT - THE STATE MAY INCLUDE:
 Personnel
     Costs of wages paid D State employees who are
     engaged in response activities. (Calcalated either as
     a percentage of tune or level of effort (LOE) basis.)
 Fringe Benefits
    Fringe benefits for State employees. Mlni\»*rt as
    a fixed pfiim
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                              EXHIBfT3
                     'OBJECT CLASS CATEGORIES
              APPROPRIATE LEVEL OF DETAIL FOR ITEMIZED
            COOPERATIVE AGREEMENT APPLICATION BUDGET
   CATEGORY
       INFORMATION
Fringe Benefits
Travel
Materials and Supplies
Contractual Services
 Positions of staff
 Number of hours
 Salary of staff (annual or hourly rate)
 Estimates of personnel costs, by position

 Basis (percentage or other) upon which
 fringe benefits are ralnilatrri
 Estimates of fringe benefit costs, by position

 Purpose and estimated number of trips
 Starting point and destination
 Transportation method
 Per Diem while on travel
 Number of persons traveling
 Estimated cost of trips

 Number and type(s) of equipment to
 be purchased
 Price of each piece

 Type(s) of materials and supplies to be
 furnished
Total prices

Estimated number of personal services
or nonconstruction contracts
Nature of contract services
Estimated total cost for each contract*
  *  Estimates should allow for bid and activity contingencies.

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                                                      9373.1-4-W
 (a)   A certification letter muse ba  included in the
 Cooperative Agreement Application package.   This letter must
 be signed by the  Governor or Attorney General  and must
 indicate  that the agency entering into Che  agreement has both
 the  authority to  do so and to make the assurances required by
 EPA  as discussed  in section I.G of this guidance.  This letter
 may  be a  generic, one-tiae statement that covers all sites
 within the State, or it may be site-specific.   If a State
 chooses to submit certification letters on  a site-specific
 basis,  a  certification letter must be provided for each site
 covered under a multi-site Cooperative Agreement.

 (b)   In order to  conduct procurement activities under the
 Super-fund program,  a State either must have an internal
 procurement system that meets the intent of EPA's regulations.
 Procurement Under Assistance Agreements (40 CTR Part 33), or
 it must follow Part 33 when it conducts procurement and allow
 SPA  pre-award review.  The procurement certification fora, EPA
 Form 5700-43  (Procurement System Certification),  demonstrates  •
 whether or not the  State's procurement system  is  equivalent to
 EPA  requirements.   The certification is valid  for two years or
 for  the length of the project period established in the
 assistance agreement, which ever is greater.   It*  the Statt has
 previously provided this certification to EPA.  the State needs
 only to indicate  in Part A of the fora the  date  the
 certification was originally submitted.

 (c)   In accordance  with Executive Order 12372, State- '*»1
 removal proposals are subject to intergovernmental revie-
 before  EPA will obligate funds.   Intergovernmental cev*ew is
 implemented under 40 CFR Part 29,  Intergovernmental Review of
 EPA  Programs  and  Activities.   Under this regulation, if the
 State has  an  established review process that includes the
 project in question, an applicant must formally notify its
 designated single point of contact,  as well as any directly
 affected governmental entities and areawide or regional
 planning agencies that it is  seeking Federal assistance and
 comply with the State's review process.   A copy of the
 notification  should be sent to the appropriate EPA Regional
 office.  Any  comments received in response to this
notification  must be attached to the Cooperative Agreement
Application.   Funds will not  ba obligated to the State until
 representatives of the State  have had an opportunity to
comment on  the proposed project(s).   The intergovernmental
 review process should be initiated at least one quarter prior
 to obligation of funds for response  at a site.  This lead time
 is necessary  to meet the required 60-day State review period
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                                                      9375.1-4-W
 and Co allow time  for  EPA  to respond to State  and local
 comments.   EPA must  accommodata. or arplain why it cannot
 accommodate,  any comment received during the formal process
 before it  can award  funds  to the State.

 (d)   Section 300.67(b) of  the National Contingency Plan  (NCP)
 requires a formal  coonunity relations plan  (CRP)  for all
 removal actions that last  longer than 45 days  (Note:  proposed
 revisions  to  the NCP change this requirement to 120 days).
 States are therefore required to develop and implement a CBP
 for  all removal action* that are expected to extend b«youd
 this designated time frame.  Additional information on CSPs
 and  guidance  for developing these plans is  provided in the
 Superfund  Removal  Procedures manual and in  EPA's  manual
 entitled Community Relations in Superfundt   A  Handbook.
 Statas may submit  the CRP  separately from the  Cooperative
 Agreement  Application package.   In that event,  either the
 Cooperative Agreement Application or a special  condition oust
 provide that  the State will submit the CUP  prior  to beginning
 on-sita activities.  The CRP is subject to  EPA  review and
 approval.

 (a)  A* required by 40 CFR Part 30.302(d)(2), a State must
 submit within 30 days of receiving its Cooperative  Agreement
 the  QA/QC  procedures it intends to use in environmental
monitoring.  These include any sample collect-ion and analysis
activities that may be necessary during the  reason**.-.   On*
generic QA/QC plan is sufficient for an MSCA.   In addition.
however. States are required to develop a site-specifir
Quality Assurance Project Plan (QAPP)  to describe the
measurement systems it intends  to use on a site,  when
preparing the QA/QC plan and QAPP,  States must  meet Superfund
program data requirements,  including the following:

          Data produced must be able to withstand the scrutiny
          of litigative proceedings,  thus requiring
          appropriate chain-of-custody,  document control and
       •;   QA/QC documentation.

         'Data collection must  be cost-effective.  Costs of
          generating the data cannot significantly exceed
          costs associated with similar analyses provided by
          the EPA Contract  Laboratory Program (CLP).

          Data turnaround times must meet project needs.
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                                                                    9375.1-4-W
               The QA/QC plan muse  be  reviewed by the EPA  Regional  QA  Officer
               and the  RPM/OSC and  must be approved by  the Award Official
               before any sampling  can begin for a project.

               (f)   States are required to have a site  safety plan  in  place
               before field activities can commence.  A site-specific  plan
               must be  developed  for each removal action.   Each safety plan
               must provide for the protection of on-site  personnel and area
               residents.   Plans  must  be consistent with site condition* and
               must cover  all  phases of incident operations.   Site  safety
               plans must  also comply  with all applicable  Federal,  State and
               local Occupational Safety and Health (OSH)  laws and
               Occupational Safety  and Health Administration  (OSHA)
               standards.   Each sita-specific safety plan  must be submitted
               to the OSC/RPM  for review to ensure removal  program
               requirements are met.   Additional information  on site safety
               plans is provided  in the Superfund Removal  Procedures manual.
               Site  safety plans may be submitted to EPA after the
               Cooperative  Agreement has been signed providing that the
               application or  a special condition provides  that the plan will
               be submitted for EPA review before on-sita activities begin.

III.  ADMINISTERING COOPERATIVE AGREEMENTS

    OSCa/RPMs  and SPOs are  responsible for ensuring that response activities
are conducted  according to  the agreed-upon scope of work,  budget, and
schedule included  in the Cooperative Agreement and Action Memorandum.   The
State official responsible  for directing response activities, usually the
SPO, must ensure that all on-site activities are consistent with CEUCLA, the
NCP and removal program policies and procedures.   Daily on-site presence by
SPOs is therefore required when response activities are underway.   The
OSC/RPM and SPO should maintain close communication at all times to monitor
progress effectively.   This can include meetings,  phone calls, written
correspondence, and review of contractor monthly progress  reports.   In
addition, the OSC/RPM and SPO must notify each other immediately of any
unscheduled or unanticipated events (e.g.,  a fire  or explosion on site that
may require an emergency response by EPA)  that may have a  direct impact on
the project and/or on the terms of the response agreement.

    This section briefly discusses State reporting and cost documentation
requirements, monitoring State financial commitments  and procedures for	.....
agreement adjustments.   Additional  information on response agreement
administration and reporting and cost documentation requirements is provided
in the State Participation Manual.
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                                                               9373.1-4-W
A.  Reporting Requirements
     When entering into a Cooperative Agreement.  States are subject to a
number of reporting requirements,  including submittal of technical
progress reports, financial status reports  and other reports as required
in the Cooperative Agreement.   These reporting requirements are
discussed briefly below.

     1.  For removal actions.  States must submit  quarterly technical
     progress reports within 30 days of  the «nd of  each Federal fiscal
     quarter and at the end of each response.   These reports are
     submitted to the Region and present information on activities
     performed during the quarter  and on total work to data.  Exhibit 4
     lists the minimum elements that State  technical progress reports
     should contain for removal actions.

          (a)   The OSC/RPM is  responsible for  reviewing technical
          progress reports and providing any necessary direction or
          assistance to the State,  as  required.  The contant of State
          reports should be tailored to  specific requirements of the
          response activities  as covered in the Action Memorandum  and
          tha  provisions of the Cooperative Agreement.   All  information
          should be site-specific and  tha OSC/RPM and SPO should reach
          an initial  agreement on the  content  and format of  these
          reports during negotiation of  the Cooperative Agreement.  For
          certain removal  actions,  EPA may  require daily communication
          from the State,  including submission of contractor progress
          reports.   A special  condition  to  this effect  should be
          included in the  Cooperative Agreement at the  time  the
          agreement  is  negotiated and may include a  provision that  the
          State  require  from its contractor submission  of  daily and/or
          weekly progress  reports.

          (b)   In addition,  the State must prepare and  submit  a  final
          technical progress report  to the OSC/RPM within  90  days after
          the  completion of  the  removal action.  Removal act ions are
          complete when  the  scope of work in the Action Memorandum has
          been completed and the State has demobilized.  The Cooperative
         Agreement is closed out when all administrative/financial
          reporting requirements are completed.  See section  IV of this
         guidance.		

    2.  Once  a  removal  action has been completed. States must submit a
    final Financial Status Report  (FSR), Standard Fora 269, and any
    ancillary reports.  Ancillary  reports include statistical or
    monitoring data, operation and maintenance manuals and other
    reports as  required in the Cooperative  Agreement.  The State should
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                      EXfflBTT 4
   CONTENT OF STATE TECHNICAL PROGRESS REPORTS
 Description of activities and tasks completed to date, by site

 Estimates (percentages) of wui cmupteual for CA.li activity, by site,
 including a basis for the estimates

 Itemization of expenditures by object ^"Tt fo^ farti iwu""*
Cooperative Agreement, f"HiKK"g h^rii*^friF<;"""' for the quarter and the
cumulative expenditures to date

         variances ^^ cost and ome to comnJete t&e Txoiect
Narrative explanation of any trends observed

Description of any actions taken or planned to resolve problems or delays
encountered

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        <                                                       9373.1-4-W


     aubmit a final FSR and all ancillary reports to the OSC/RPM within
     90 calendar days after completion of the removal action.

           (a)  The State must provide EPA with the opportunity to verify
           that the removal has been successfully completed.  At the
           conclusion of the removal, joint EPA/State final inspection
           may be required to confirm that the removal action has been
           implemented properly and that all outstanding action item* are
           resolved.  The State and EPA will jointly inspect the project
           to confirm that all outstanding action items are resolved.
           The State shall prepare a final inspection report describing
           any outstanding items and their resolutions.  A copy of this
           report shall be submitted to the EPA OSC/RPM.

           (b)  In addition, a Final OSC Report must be prepared by the
           State at the conclusion of each removal action in accordance
           with the NC? and removal program policy and procedures.   This
           report will be prepared by the SPO.  in consultation with the
          OSC/RPM,  and must be signed by the SPO.  The Final OSC Report  ;
           is subject to the approval of the OSC/RPM and therefore  must
          be signed by the OSC/RPM.

B.   Cost Documentation Requirements

     When entering into a Cooperative Agreement,  States must also  adhere
to certain cost documentation requirements as  set forth in 40 CFR
Parts 30 and 33 and all additional Superfund-specific requirements or
procedures for documenting State expenditure of CSRCLA funds.

     1.    For removal  actions.  State accounting and recordkeeping
          activities  must be  detailed on a site-specific basis to  ensure
          effective cost recovery.  States must also track and report
          expenditures by object class category.   Superfund procedures
          include  documentation and recordkaeping measures intended to
          protect  the  integrity of sits data,  such as:

          (a)   Notifying EPA  of archive research  by third parties  unless
               authorized in  writing by EPA

          (b)   Requiring all  microform copying of original documentation
               to be done in  accordance with,  or  in a manner equivalent	
               to,  the technical requirements  for copying Federal
               government records (36 CFR section 1230  et seg.).

     2.    In addition,  the Superfund program adheres to the general
          Agency-wide  policy  that, when requested by EPA,  States must
          provide documentation to support cost recovery litigation  and
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                                                                9373.1-4-W
           related efforts.   Documentation must  be  available  for  use  as
           evidence to answer questions  such as  what  work was authorized.
           what work was completed,  what charges were incurred for  the
           work, and what payments were  made for the  work.

 C.    Monitoring Financial Commitments

      OSCs/RPMs are responsible  for  ensuring that State  expenditure of
 CSSCLA funds  corresponds to  technical progress  at  the site and is  within
 the  cost  ceiling in the Action  Memorandum and Cooperative Agreement.
 Costs incurred by the State  may not exceed the  amount obligated  for  the
 response  in the Cooperative  Agreement.

      1.   The  OSC/RPM should  review  State drawdowns on a monthly  basis,
      using drawdown information available from  the Regional  financial
      management office.   Key documents  for this  review  include the
      Financial  Management System (FMS)  Outlay Report  and the  State's
      quarterly reports.

      2.   Funds  awarded under a  Cooperative Agreement  are assigned an
      activity (e.g.,  removal  action) and site code.   The OSC/RPM should
      ensure that  the  State is drawing funds from the  proper account for
      the  site  and  for the action funded.  The account from which
      drawdowns  are made,  identified ia  the FMS Outlay Report  and the)
      State quarterly  reports, must match the action being conducted.

      3.   Under  a multi-site Cooperative Agreement, when  a removal at a
      particular site  has  been completed, remaining funds may be  used to
      fund removal activities  at another site covered by  the same
      Agreement.  Such  funds,  however,  must be officially transferred to
      the  appropriate account.  A transfer of funds between 3it.es under a
     MSCA requires a  formal amendment to the Cooperative Agreement to
     move the funds from one  account to another.  Funds  remaining in a
      site account at  the completion of a removal should be deobligated
     and  returned to EPA unless the State requires additional funds to
     support other removal actions covered in the same Cooperative
     Agreement. .All amendments to Cooperative Agreements will be
     negotiated at the Regional level.   This requirement will ensure
     that the statutory limitation on cost is  adhered to when there is a
     need to transfer funds.

D.   Agreement Adjustments

     Agreement adjustments consist of  alterations in the amount,  terms,
conditions, project period,  project scope or some other administrative,
technical, or financial aspect of the  Action Memorandum or Cooperative
Agreement.  Depending upon the significance  of the change, adjustments

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                                                               9375.1-4-W
to the Agreement can be made, either through formal amendments or in
writing, between tha OSC/RFM and tha SPO.   Modifications to Action
Memoranda ara subject to currant removal procaduras and policy.  All
modifications to tha initial Action Memorandum (e.g., calling increases,
exemptions to tha statutory limits on cost and duration) must ba
documantad in an anandad Cooperative Agreement, but only a/tar the
Action Mamorandun requesting tha modification has baaa approvad.
Circumstances whara a Cooperative Agreement and Action Maaorandon mat
ba formally amandad ara presented below.

     1.  A Cooperative Agreement must ba amandad whan it requires a
     significant change.   These occur whan:

               Objectives and/or scopa of  tha projact,  as funded, ara
               altered

               Funds obligated under one accounting coda will ba used
               for a different activity or a  diffarant  sita

               There is any increase or substantial dacreasa in tha
               project period or budget

               A rebudgeting of funds occurs,  such  as a transfer between
               contractural services and another  object class category
               or a change in the amount of indirect costs

               Changes to special conditions  to tha Cooperative
               Agreement  award document.

          (a)   Formal  amendments  are not required for minor project
          changes  that ara consistent with tha project's  objectives.
          Minor  changes include  shifts  between object class categories
          (except  as indicated above) and adjustments to  the work plan
          within the scope and objectives of  the funded project.  Minor
          project  changes  should  be  approved  in writing by  the  OSC/RPM
          or the Regional  Administrator, as appropriate.

          (b)  Responsibility  for requesting and obtaining  approval of
         modifications to the Cooperative Agreement  rests  with the SPO
         and OSC/RPM.  Tha SPO or tha OSC/RFM identifies tha need for
         aa adjustment and the SPO  initiates the approval  process by	
         submitting a request to the Region.  The OSC/RPM  then
         determines whether a formal amendment is needed,  and  if so,
         transmits the request to the Regional Administrator.   If the —
         RA signs the amendment, it is sent to the State for acceptance
         and is executed  upon signature by an authorized State official.
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                                                                   9373.1-4-W
         2.  According to standard removal program policy and procedures,
         special requests, in the form of Action Memoranda, must be prepared
         when the following are required after approval of the initial
         Action Memorandum:

                   An increase in the project's established cost ceiling

                   Exemptions to the statutory limitations on cost and
                   duration

                   Changes in scope of work

                   Changes among cost categories where no change in total
                   project ceiling is required.  •

         Guidance on the procedures for requesting and obtaining approval
         for these changes is set forth in the Suoerfund Removal Procedure*
         manual.   OSCs/RPMs ara responsible for preparing these requests and
         obtaining the necessary concurrence,  as well as ensuring that the
         Cooperative Agreement is amended accordingly.

IV.  CLOSEOUT OF RESPONSE AGREEMENTS

    In order to close out a Cooperative Agreement,  EPA must determine that
the State has completed the removal action and complied with a:l  applicable
administrative requirements under the agreement.   The general  closeout
responsibilities  of the State and the OSC/RPM  are briefly discussed below.

    A.   State Responsibilities

         1.   A State must complete Che work specified in the Cooperative
         Agreement  and the Action Memorandum and produce the required
         reports  (e.g.,  final FSR and technical progress report),  manuals.
         plans and  other information.   The State  is responsible for ensuring
         that all products and reports necessary for closeout  are  submitted
         to  EPA, as  required.

         2.   The SPO is  responsible for the completion of the  final report
         as  described in the  Cooperative Agreement  including the  reports and
         activities  as  follows:
                  Draft  and final  technical  report
                  Final  FSR
                  Ancillary products  such as 0£M manuals
                  Property/equipment  report
                  Other  required reports.
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                                                                    9373.1-4-W

         p •
     B.   EPA OSC  Responsibilities

         ~1.  OSCs/RPMs are responsible for ensuring that the State  has
         provided all required reports and is in compliance with the
         provisions of the Cooperative Agreement and Action Memorandum.

         2.  Specific OSC/RPM responsibilities are as follows:

                   Reviews/inspects work in the project and arranges for
                   acceptance or correction

                   Reviews and approves required reports

                   Follows through on delinquencies or deficiencies

                   Ensures that all disputes and audit exceptions art
                   resolved

                   Transmits final determinations on any outstanding issues

                   Documents tha closure in the official file

                   Maintains the official records.

The State Participation Manual provides detailed guidance 01. closing out
response agreements.   OSCs/RPMs should refer to the State Participation
Manual for additional information on the requirements/procedure? for closing
out Cooperative Agreements.
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