&EPA
United States
Environmental Protection
Agency
0«ice of
Soi«d Waste ana
Emergency Response
DIRECTIVE NUMBER:
9375.1-5
March 10,
March 10, 198fi
OERR
TITLE: State Participation in the Superfund Program Manual
Volume II: State Procurement Under Superfund
Remedial Cooperative Agreements
APPROVAL DATE:
EFFECTIVE DATE:
ORIGINATING OFFICE:
*& FINAL
D DRAFT
STATUS.
REFERENCE (other documents):
9375.1-2A State Participation in the Superfund Remedial
Program, February 1984 edition with changes
1 through 7 (August 1985 re-issue)
OSWER OSWER OSWER
ME DIRECTIVE DIRECTIVE Dl
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EPA
United States Environmental Protection Agency
Washington. DC 20460
OSWER Directive Initiation Request
Interim Directive Numosr
^375.1-5
Originator Information
Name of Contact Person
Swi ch k ow
Mail Code
HH-54RE
Telephone Numoer
3 fi ? - ?. 4 5 3
Lead Office
D OERR
D OSW
D OUST
D OWPE
CD AA-OSWER
Approved for Review
Signature of Office Director
Date
Title
Volume II, State Procurement Under Supprfund Remedial
Cooperative Agreements
Summary of Direcuve
Explains salient points of EPA's general regulations that apply
to all State procurement, under Superfund Cooperative Agreement;
discusses the procurement of A/E services, and the types of
activities these firms can manage on hehalf of the state throughout
response (P I/FS,RD,RA,OflM); provides discussion of the procurpment
of construction services, suhagreempnt administration, and claims
management.
Type of Direcjive /Manual. Policy Directive. Announcement, etc.)
Attachment to State Participation manual
• Status
I
O
Draft
I _ I
Revision
Does this Directive Supersede Previous Directiveis)? | | Yes [.• ) No Does It Supplement Previous Directive(s)? [ j Yes (/••] No
If "Yes" to Either Question. What Directive (number, titlel
Review Plan
Lj AA-OSWER
Q OERR
D OSW
D OUST
D OWPE
I—I Regions
D OECM
D OGC
D OPPE
D
Other /Specify/
This Request Meets OSWER Directives System Format
Signature of Lead Office Directives Officer
Signature of OSW£R Directives Cjflicer
Date
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
K
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vvEPA
United States
Environmental Protection
Agency
401 M St., S.W.
Washington, D.C. 20460
Emergency and Remedial Response
State Participation in the
Superfund Program
VOLUME II
State Procurement Under
Superfund Remedial
Cooperative Agreements
March 1986
OSWER DIRECTIVE
9375.1-5
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9375.1-5
STATE PARTICIPATION IN THE
SUPERFUND PROGRAM
VOLUME II
STATE PROCUREMENT UNDER
SUPERFUND REMEDIAL COOPERATIVE AGREEMENTS
MARCH 1986
OSWER DIRECTIVE
9375.1-5
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9375.1-5
FOREWORD
In February 1984, the Environmental Protection
Agency's (EPA) Office of Emergency and Remedial Response
(OERR) issued the document State Participation in the
Superfund Remedial Program. This manual provides
comprehensive administrative and procedural guidance to
State and EPA personnel engaged in remedial response
implemented under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (CERCLA)
or Superfund. The primary audience for this document is
State Project Officers (SPOs), EPA Remedial Project
Managers (RPMs) or officials with similar functions, as
well as concerned EPA Headguarters staff members. Thus,
the document contains information of interest to a wide
range of users.
This volume, State Procurement Under Superfund
Remedial Cooperative Agreements, is designed to stand
alone. The major reasons for this are twofold. First,
State procurement of assistance for CERCLA remedial
response is a topic that has a more limited audience than
does the general guidance document, and would not
necessarily be of interest to all personnel who use that
manual. Second, this document is more technical in scope
than Volume I of State Participation in the Superfund
Program. Volume II, however, is designed to be used in
conjunction with Volume I; all personnel using it are
directed to follow the procedures contained in both, as
appropriate, during CERCLA remedial response. Additional
assistance may be obtained from other Superfund guidance
documents: Guidance on Remedial Investigations Under
CERCLA, OERR, June 1985; Guidance on Feasibility Studies
Under CERCLA, OERR, June 1985; and Superfund Remedial
Design and Remedial Action Guidance, OERR, February 1985.
-i-
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TABLE OF CONTENTS
Section Page
LIST OF ACRONYMS AND ABBREVIATIONS a
I. INTRODUCTION 1-1
A. SUPERFUND PROCUREMENT CONCERNS . . 1-1
B. ORGANIZATION OF THIS VOLUME. ... 1-3
II. PROCUREMENT REQUIREMENTS II-l
A. REGULATIONS APPLICABLE TO PROCURE-
MENT 11-2
B. FEDERAL AND STATE ROLES IN PRO-
CUREMENT 11-4
C. PROCUREMENT SYSTEM CERTIFICATION . II-4
D. METHODS FOR PROCURING ASSISTANCE . I1-6
E. TYPES OF SUBAGREEMENTS 11-9
E.I Fixed Price Subagreements . . II-9
E.2 Cost-Plus-Fixed-Fee
Subagreements I1-9
E.3 Percentage of Construction
Cost Subagreements 11-10
E.4 Cost-Plus-Percentage-of-
Cost Subagreements 11-10
E.5 Other Subagreement Types. . . 11-10
F. PROMOTING COMPETITION 11-11
G. MINORITY, WOMEN'S, SMALL, AND LABOR
SURPLUS AREA BUSINESS 11-12
H. DOCUMENTATION 11-14
I. CONFLICTS OF INTEREST AND CODE OF
CONDUCT 11-16
J. UNFAIR LABOR PRACTICES 11-19
-11-
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9375.1-5
TABLE OF CONTENTS
(Continued)
Section
K. COST AND PRICE ANALYSIS ' 11-21
K.I Cost Analysis 11-21
K.2 Price Analysis 11-21
L. PROFIT ANALYSIS 11-24
III. PROCUREMENT OF ENGINEERING SERVICES ... III-l
A. GENERAL REQUIREMENTS FOR PROCURING
ENGINEERING SERVICES III-l
B. STANDARD METHOD OF COMPETITIVE
NEGOTIATION 111-2
B.I Request for Proposals 111-3
B.2 Evaluating Proposals .... III-5
B.3 Negotiation and Subagreement
Award 111-5
C. OPTIONAL METHOD OF COMPETITIVE
NEGOTIATION 111-6
C.I Soliciting Statements of
Qualifications III-6
C.2 Evaluating Statements of
Qualifications III-9
C.3 Soliciting and Evaluating
Proposals III-9
C.4 Negotiation and Award of
Subagreement II1-9
D. EXPEDITING PROCUREMENT OF ENGINEERING
SERVICES 111-10
IV. ENGINEERING SERVICES DURING REMEDIAL
RESPONSE IV-1
A. REMEDIAL INVESTIGATION/FEASIBILITY
STUDY IV-3
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9375.1-5
TABLE OF CONTENTS
(Continued)
Section
B. REMEDIAL DESIGN IV-5
C. TECHNICAL BIDDABILITY AND
CONSTRUCTABILITY REVIEW IV-7
D. BID PHASE SERVICES IV-8
E. CONSTRUCTION OVERSIGHT SERVICES . . IV-10
F. CLAIMS IV-11
G. OPERATION AND MAINTENANCE IV-12
V. PROCUREMENT OF CONSTRUCTION SERVICES. . . V-l
A. DEVELOPMENT OF COST ESTIMATES
FOR CONSTRUCTION V-3
B. PREPARATION OF SUBAGREEMENT
DOCUMENTS V-4
B.I Subagreement Provisions .... V-5
B.2 Specifications V-7
B.3 Bonds and Insurance V-7
B. 3. a Bonds V-8
B.3.b Insurance V-9
B.4 Payment Terms V-10
B.5 Project Control Matters .... V-12
B.6 Schedule Requirements V-13
B.7 Change Order Provisions .... V-14
B.8 Health and Safety Issues . . . V-14
B.9 Subagreement Close-Out Require-
ments V-l 5
C. TECHNICAL BIDDABILITY AND CONSTRUCT-
ABILITY REVIEW V-16
D. SOLICITATION OF BIDS V-18
E. EVALUATION OF BIDS V-19
E.l Bids Exceeding the Project
Budget V-21
-iv-
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9375.1-5
TABLE OF CONTENTS
(Continued)
Section
E.2 Bids Significantly Less Than
the Project Budget V-25
F. BID PROTESTS V-26
G. SUBAGREEMENT AWARD V-27
VI. SUBAGREEMENT ADMINISTRATION VI-1
A. PRELIMINARY PERFORMANCE PLANNING
CONFERENCE VI-1
B. MONITORING WORK PROGRESS - PERIODIC
PROGRESS REVIEW VI-2
C. CHANGE ORDER ADMINISTRATION VI-5
C.I Conditions That Warrant a
Change Order VI-6
C.2 Evaluating Change Order Requests VI-8
C.3 Superfund Requirements for
Change Order Management .... VI-ll
C.4 Change Orders Requiring
Amendments to the Superfund
Cooperative Agreement VII-12
C.5 Preparation of the Change Order VII-13
D. CLAIMS VI-14
D.I Causes of Claims VI-14
D.2 Claims Prevention VI-16
D.3 Types of Claims VI-17
D.4 Claims Resolution VI-19
D.5 Funding of Claims Resolution. . VI-20
D.6 Claims Negotiation VI-20
D.7 Settlement of Claims VI-22
APPENDICES
APPENDIX A - GLOSSARY OF TERMS A-l
APPENDIX B - REFERENCES B-l
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9375.1-5
INDEX OF EXHIBITS
Exhibit
Number
II/II-l SUMMARY OF REQUIREMENTS FOR PROCUREMENT
Paqe
II/II-2
II/II-3
II/III-l
II/III-2
II/III-3
II/IV-1
II/V-1
II/V-2
II/V-3
II/V-4
II/VI-1
II/VI-2
UNDER ASSISTANCE AGREEMENTS
(40 CFR Part 33)
SUMMARY OF PROCUREMENT METHODS AND
PROCEDURES
COST AND PRICE SUMMARY (EPA Form
5700-41)
STANDARD METHOD FOR PROCUREMENT OF
ENGINEERING SERVICES
OPTIONAL METHOD FOR PROCUREMENT OF
ENGINEERING SERVICES
METHODS FOR EXPEDITING PROCUREMENT. . . .
TYPES OF ENGINEERING SERVICES TYPICALLY
USED DURING REMEDIAL RESPONSE ACTIVITIES
CONSTRUCTION CONTRACTOR PROCUREMENT
PROCEDURES
SAMPLE CHECKLIST OF CONSTRUCTION
SUBAGREEMENT BID DOCUMENT CONTENTS . . .
SAMPLE BID TABULATION CHECKLIST
SAMPLE BID REVIEW CHECKLIST FOR
CONTRACTOR RESPONSIBILITY
SAMPLE MONTHLY PROGRESS REPORT
SAMPLE CHECKLIST FOR STATE CHANGE
II-3
II-8
11-22
III-4
III-7
111-12
IV-2
V-2
V-6
V-20
V-2 2
VI-4
ORDER APPROVAL.
VI-9
-vi-
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9375.1-5
LIST OF ACRONYMS AND ABBREVIATIONS
A number of acronyms and abbreviations are used
throughout the text; each is identified in the text, where
possible. To assist the reader in understanding any
acronym or abbreviation that may not be explained, and to
provide a quick reference, a list of acronyms and
abbreviations is included here.
AA Assistant Administrator
CERCLA Comprehensive Environmental Response, Compensa-
tion, and Liability Act of 1980 (PL 96-510)
CFR Code of Federal Regulations
COE U.S. Army Corps of Engineers
EPA Environmental Protection Agency
FS Feasibility Study
FY Fiscal Year
GAD Grants Administration Division
IFB Invitation for Bids
MBE Minority Business Enterprise
NCP National Oil and Hazardous Substances Pollution
Contingency Plan (40 CFR Part 300)
NPL National Priorities List
OERR Office of Emergency and Remedial Response
OGC Office of General Counsel
O&M Operation and Maintenance
OMB Office of Management and Budget
ORC Office of Regional Counsel
OSWER Office of Solid Waste and Emergency Response
Volume II/a
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9375.1-5
QA/QC Quality Assurance/Quality Control
RA Remedial Action or Regional Administrator
RD Remedial Design
RFP Reguest for Proposals
RFQ Reguest for Qualifications
RI Remedial Investigation
ROD Record of Decision
RPM Remedial Project Manager
SEE Small Business Enterprise
SCAP Superfund Comprehensive Accomplishments Plan
SOQ Statement of Qualifications
SOW Statement of Work
SPO State Project Officer
WBE Women's Business Enterprise
Volume Il/b
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9375.1-5
2/7/86
I. INTRODUCTION
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9375.1-5
I. INTRODUCTION
Sections 104(c)(3) and 104(d)(l) of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (CERCLA), or Superfund, authorize the use of either a
Cooperative Agreement or a contract as the instrument for
delineating EPA and State responsibilities for remedial
response at a hazardous waste site, for obtaining required
State assurances, and for committing the necessary funds
for remedial response. When a State elects to manage a
remedial response at a site, it enters into a Cooperative
Agreement with EPA. A Superfund Cooperative Agreement
award is the assistance vehicle that transfers funds for
response to the State and documents both EPA and State
responsibilities for the project.
When a Cooperative Agreement is awarded, the recipient
State agency agrees to oversee the project, to ensure that
the general assistance and Superfund program provisions of
the agreement are met, and to manage the remedial funds.
All Superfund Cooperative Agreements require States (or
political subdivisions thereof) to comply with the provi-
sions of 40 CFR Part 33, Procurement Under Assistance
Agreements, as well as other general and specific program
provisions. This volume presents guidance on this parti-
cular general assistance regulation and its relationship
to State-managed Superfund remedial response activities.
(See Volume I, Chapter III, "Development of Cooperative
Agreement Application Packages," for a full explanation of
other requirements.)
A. SUPERFUND PROCUREMENT CONCERNS
Even if recipients fully satisfy EPA's procurement
requirements, problems may arise that can seriously com-
plicate or delay remedial response. Bid protests, change
orders, and claims are three major areas of concern in the
State Superfund remedial program.
Bid protests are written complaints filed by a party
or parties with a direct financial interest affected by a
State's procurement action. Change orders are written
orders issued by the State (or its designated agent) to
Volume II/I-l
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9375.1-5
the State's contractor, authorizing an addition to, dele-
tion from, or revision of a subagreement, usually ini-
tiated at the contractor's request. Claims consist of
requests for changes submitted by the State's contractor
(e.g., additional time and/or costs) which initially have
been rejected by the State.
Bid protests, change orders, and claims are actually a
series of problems that can occur at various stages in the
procurement process. EPA, therefore, recommends that
States institute a coordinated program that addresses
these issues at the points at which they are likely to
occur. Further, EPA will offer States assistance in this
effort during remedial response; this will entail the
following:
Prevention of Bid Protests: States must conduct
a biddability/constructability review before the
services of a construction contractor are
procured. The State may choose to conduct this
review itself, may procure the services of an
independent third party, or may request that EPA
perform the review. If EPA agrees to perform a
biddability/constructability review, it will
obtain the services of the U.S. Army Corps of
Engineers (COE). EPA reserves the right to per-
form this review, regardless of the option
selected by the State, when the Agency considers
the remedial action project to be highly complex
or when there are overriding scheduling concerns.
Management of Change Orders: The Cooperative
Agreement funding remedial construction usually
will include a construction contingency fund.
States may not approve a change order that
exceeds 20 percent of the contingency fund, nor
may they approve a change when the aggregate of
change orders exceeds 75 percent of the entire
contingency fund. To do so, they first must ob-
tain EPA approval, which is dependent upon State
performance of administrative and technical
reviews. These reviews will ascertain the effect
that the change order(s) have on the project
scope of work and schedule, the cost-effective
remedy selected in the Record of Decision for the
site, and the availability of funds to complete
Volume II/I-2
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9375.1-5
the response in the event that the change is ini-
tiated. When a remedial response is highly com-
plex or when there are overriding scheduling con-
cerns, EPA will provide the State with technical
assistance in change order management through the
COE or will supply funds to the State to secure
the services of an independent construction
management firm.
Claims: EPA shares in the costs associated with
claims at the same percentage rate used for the
remedial action (i.e., 90/10 or 50/50). Before
the Agency will consider funding these costs,
however, EPA requires the State to conduct an
administrative and technical review of each claim.
The following chapters of this manual provide more de-
tailed information on these subjects.
B. ORGANIZATION OF THIS VOLUME
This manual, Volume II of State Participation in the
Superfund Program, contains six chapters and supplementary
appendices. It is organized as follows:
Chapter I - Introduction, which explains the
rationale for the organization of this volume and
outlines EPA policies designed to assist States
in the prevention and/or resolution of certain
cost and scheduling issues
Chapter II - Regulatory Requirements, which sum-
marizes the requirements of 40 CFR Parts 30 and
33, EPA's regulations governing assistance agree-
ments and procurement under assistance
agreements, and outlines Federal and State roles
Chapter III - Procurement of Engineering Ser-
vices, which explains procurement of architec-
tural and engineering (A/E) services
Chapter IV - Engineering Services During Remedial
Response, which contains a detailed explanation
of the types of services an A/E firm can provide
during all phases of remedial response
Volume II/I-3
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9375.1-5
Chapter V - Procurement of Construction Services,
which outlines the process that is used to pro-
cure the services of a construction firm and pro-
vides guidance on contents of bid documents and
other requirements
Chapter VI - Subaqreement Administration, which
highlights management and administration tech-
niques for implementation and monitoring of work,
distinguishes between change orders and claims,
and provides detailed procedures for administer-
ing them.
Appendices to this volume contain a glossary of terms and
references.
This organization of the subject matter is intended to
provide as much background information on procurement as
possible before discussing actual procurement of A/E and
construction firms and subsequent potential complications
with the process.
With the increasing number of remedial actions and the
concomitant award of more subagreements by States, States
must practice good procurement procedures and management
to minimize the costs of remedial response and to meet
cleanup schedules. EPA's requirements are intended to
promote competition, and ensure that all work is performed
properly, that only reasonable and necessary costs are
incurred, and that work performed complies with
contractual and regulatory requirements. This manual out-
lines EPA procurement requirements as they relate to the
Superfund program. The following chapter provides general
information on EPA procurement requirements.
Volume II/I-4
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9375.1-5
II. PROCUREMENT REQUIREMENTS
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9375.1-5
II. PROCUREMENT REQUIREMENTS
This chapter briefly outlines the salient points of
EPA's general regulations that apply to all State procure-
ment under Superfund Cooperative Agreements: 40 CFR Part
300, the National Oil and Hazardous Substances Pollution
Contingency Plan; 40 CFR Part 30, EPA's General Regulation
for Assistance Programs; and 40 CFR Part 33, Procurement
Under Assistance Agreements.* The chapter also addresses
specific procurement topics:
Federal and State roles in procurement
Procurement system certification
Methods available for procuring assistance
Methods for promoting competition
Types of subagreements
Minority, women's, small, and labor surplus area
businesses
Document retention requirements for subagreements
Conflicts of interest and code of conduct
Avoidance of unfair labor practices
States may elect to have EPA conduct response activi-
ties at a site; Federal-lead response agreements are
discussed in Chapters IV and V of Volume I. Under
Federal-lead response agreements, EPA allows States to
contribute services as part of their cost-sharing ob-
ligations for remedial activities. If a State exer-
cises this option, it must comply with the provisions
of 40 CFR Parts 30 and 33.
Volume II/II-l
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9375.1-5
Cost and price analysis
Profit analysis.
These are addressed in the following sections and apply to
procurement of both engineering and construction services.
A. REGULATIONS APPLICABLE TO PROCUREMENT
A State must meet the requirements of several EPA reg-
ulations when implementing an executed Superfund Coopera-
tive Agreement. These include the following:
National Oil and Hazardous Substances Pollution
Contingency Plan (NCP) (40 CFR Part 300),
General Regulation for Assistance Programs (40
CFR Part 30)
Procurement Under Assistance Agreements (40 CFR
Part 33).
In addition, specific provisions of other regulations, as
they affect those cited above, apply (e.g., 40 CFR Part
32, Debarment and Suspension). The State also must con-
sider the applicability of other State and Federal envi-
ronmental and public health statutes, depending on condi-
tions at the site and the cleanup approach to be taken.
Procurement Under Assistance Agreements, 40 CFR Part
33, is EPA's regulation governing procurement of supplies,
services, and construction by assistance recipients, and,
therefore, applies to States entering into Superfund Co-
operative Agreements with EPA. Key points of this regula-
tion are summarized in Exhibit II/II-l on the following
page. Under this regulation, a State may use its own pro-
curement policies and procedures when conducting procure-
ments using EPA funds if the State first certifies that
its system fulfills the intent of 40 CFR Part 33. If the
State's"procurement policies and procedures do not meet
all EPA requirements, the State must use the procedures
set forth in the regulation, must follow the requirements
in 40 CFR Part 33 Appendix A, and must allow EPA pre-award
review of all proposed procurement actions that will use
EPA funds.
Volume II/II-2
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EXHIBIT II/II-l
SUMMARY OF REQUIREMENTS FOR PROCUREMENT UNDER
ASSISTANCE AGREEMENTS (40 CFR Part 33)
9375.1-5
TITLE
SUMMARY OF REQUIREMENT
SECTION
I
u
Recipient Responsibility
Submission of Information
Limitation on Subagreement Award
Competition
Profit
Small, Minority, Women's, and Labor
Surplus Area Businesses
Documentation
Specifications
Bonding and Insurance
Code of Conduct
Federal Cost Principles
Prohibited Types of Subagreements
Cost and Price Considerations
Lower Tier Subagreements
Small Purchase
Formal Advertising
Competitive Negotiation
Noncompetitive Negotiation
Requirements for Recipients of
Remedial Action Cooperative
Agreements Under CERCLA
Subagreement Provisions
Protests
System must ensure that contractors perform in accordance with all applicable requirements 33.210
Recipient must inform Award Official of construction Subagreements over $10,000 per year 33.211
System must consider listed factors in determining contractor responsibility 33.220
System must have procurement transaction procedures which provide maximum open and free competition 33.230
System procedures must allow only fair and reasonable profits to contractors 33.235
System should award a fair share of Subagreements to such businesses by following the six 33.240
affirmative steps specified
System must require that procurement records and files for purchases over $10,000 include items 33.250
specified
System procedures for establishing specifications must meet the requirements listed 33.255
System procurements must meet the specified requirements 33.265
System must have a written code or standard of conduct for State officials during Subagreement 33.270
award
System procedures for determining allowable costs must meet the specified principles 33.275
System may not allow cost-plus-percentage-of-cost (where multiplier includes profit) or percentage- 33.285
of-construction-cost types of Subagreements
System procedures must allow for analysis of cost and price, as specified 33.290
System must require that prime contractors comply with all provisions specified 33.295
System small purchase method must meet specified requirements 33.305-315
System procedures relating to formal advertising, including those for bid documents and 33.405-430
Subagreement awards, must meet the specified requirements
System procedures for competitive negotiation must meet the specified requirements 33.505-535
System procedures for noncompetitive negotiation must meet the specified requirements 33.605
Subpart requires use of formal advertising for remedial action construction procurements unless Subpart E
the Award Official determines that it is not appropriate (not applicable for remedial planning
or for engineering services)
Subpart includes the clauses that must be contained in Subagreements for procurement Subpart F
Subpart describes procedures to request EPA review of a receipient's protest determination Subpart G
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9375.1-5
B. FEDERAL AND STATE ROLES IN PROCUREMENT
As previously stated, a Superfund Cooperative Agree-
ment is the mechanism used to document EPA and State
responsibilities and assurances concerning a remedial re-
sponse project. The provisions that are incorporated into
Superfund Cooperative Agreements to delineate these re-
sponsibilities are discussed in Chapter III and Appendix F
of Volume I of this manual. EPA's role during implementa-
tion of the Agreement is one of oversight to ensure that
the State complies with applicable statutes, regulations,
and policies. The Agency also ensures that work conducted
under the Cooperative Agreement meets requirements for
implementing any enforcement or cost recovery actions and
that the State uses the obligated remedial funds for ap-
proved tasks.
The State is responsible for resolving all subagree-
ment and administrative issues associated with procure-
ments under the Cooperative Agreement, since EPA is not a
party to any subagreements (40 CFR 33.245). The State may
award subagreements under the Cooperative Agreement only
to responsible contractors, as defined by 40 CFR 33.220,
and the State must ensure that these contractors perform
in accordance with all provisions of the subagreements (40
CFR 33.210(a) and (b)). In enforcing provisions of such
subagreements, the State may request technical and legal
assistance from EPA, but EPA is not responsible for en-
forcing subagreement provisions (40 CFR 33.210(g)).
C. PROCUREMENT SYSTEM CERTIFICATION
States should develop their own procurement procedures
and policies to satisfy the minimum requirements of 40 CFR
Part 33, and to certify their procurement procedures to
EPA in accordance with 40 CFR Part 33 Subpart A. If the
State does not have a procurement system that meets the
minimum requirements of 40 CFR Part 33, the State must
follow the requirements in EPA's regulation and give the
Agency the opportunity to review all proposed subagree-
ments and associated procurement actions prior to sub-
agreement award (40 CFR 33.110(b)(2)). States that pro-
vide certification will not receive this level of procure-
ment oversight by EPA; however, EPA reserves the right to
review any State procurement action funded wholly or in
part by EPA. (Additional information on procurement sys-
tem certification can be found in Chapter III of Volume I
of this manual.)
Volume II/II-4
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9375.1-5
States are encouraged to seek advice from EPA at any
stage of any procurement action. EPA staff members are
experienced in the technical, legal, and administrative
aspects of procurement under Superfund and can constitute
an invaluable resource to States. States should consult
with EPA legal staff members prior to awarding subagree-
ments which any party may potentially construe as contro-
versial and which, thus, eventually may result in a pro-
test of the procurement action. This will mitigate the
possibility of a successful bid protest being lodged.
EPA may review and approve the award of subagree-
ments procured under a Cooperative Agreement when States
do not certify their procurement systems (40 CFR Part 33
Subpart A), and may exercise this authority for complex
remedial activities even if a State is self-certified. In
either case, EPA's oversight of a procurement action will
include:
A review of the State's award recommendation for
adequate evidence of the selected engineer's or
construction contractor's capability to perform
the work properly
A review of the State's compliance with guide-
lines for using minority (MBEs) and women's busi-
ness enterprises (WBEs)
Obtaining evidence from the State that the public
solicitation process conforms with Federal,
State, and local procurement regulations
Obtaining evidence from the State that all solic-
itation and/or bidding disputes have been re-
solved, or obtaining details of any unresolved
disputes.
In procurement actions awarding subagreements for con-
struction and/or engineering services, EPA will receive
and may review both the tabulation of bid results and the
selection ranking, respectively, developed by States that
are not self-certified. EPA also may choose to exercise
this authority for complex remedial activities when States
are self-certified.
Even if a State certifies its procurement system, EPA
retains the authority to perform any of the following
activities:
Volume II/II-5
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9375.1-5
Receive all bid or offer tabulations after award
and notify the Award Official of all construction
subagreement awards over $10,000 (40 CFR 33.211)
Authorize and approve noncompetitive awards under
40 CFR 33.605(d)
Authorize the use of innovative procurement
methods (40 CFR 33.210(h))
Approve the use of a procurement method other
than formal advertising for Superfund remedial
action construction awards (40 CFR 33.910)
Resolve bid protest appeals (40 CFR 33 Subpart G) .
EPA also reserves the right to review a State's certified
procurement system or procurement actions under an assis-
tance agreement. If EPA determines that the State is not
following procurement procedures as certified, EPA will
revoke the State's certification and will require it to
follow the procedures of 40 CFR Part 33, including Appen-
dix A; further, EPA may impose sanctions as detailed in 40
CFR Part 30, including termination of the Cooperative
Agreement. States are cautioned to evaluate their pro-
curement systems carefully prior to self-certification to
ensure that they fully comply with 40 CFR Part 33.
A State must certify its system to EPA only once every
two years unless the assistance agreement specifies a
longer project period. If the State previously has pro-
vided its required certification, a responsible official
must complete Part A of the Certification Form, EPA Form
5700-48, indicating the month and year in which this cer-
tification was submitted.
D. METHODS FOR PROCURING ASSISTANCE
Under 40 CFR Part 33, States must award subagreements
using the appropriate method from the four outlined below:
Formal advertising (40 CFR 33.405-33.430), which
requires, at a minimum, that all of the following
conditions be met:
A complete, adequate, and realistic specifi-
cation or purchase description of what is
required
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9375.1-5
- Two or more responsible bidders who are
willing and able to compete effectively for
the recipient's business
A procurement that lends itself to the award
of a fixed-price subagreement
The selection of the successful bidder, made
principally on the basis of price (40 CFR
33.405(b)).
Competitive negotiation, the requirements for
which are defined in 40 CFR 33.505-33.525. This
method may be used only if conditions are not
appropriate for formal advertising. (Optional
selection procedures for architectural and engi-
neering (A/E) firms are described in 40 CFR
33.525.)
Small purchase, which may be used only for pro-
curement actions not exceeding $10,000, following
procedures described in 40 CFR 33.305-33.315.
Noncompetitive negotiation, the procedures for
which are described in 40 CFR 33.605 and are used
only if the other three procurement methods are
inappropriate due to the specified reasons.
A State may use procurement methods or procedures
other than those specified only if it first obtains writ-
ten approval from the EPA Award Official. However, a
State may not use a method other than formal advertising
to procure construction services during remedial action
unless it has first obtained concurrence from the EPA
Award Official. (This requirement does not apply to A/E
services during remedial action.) Formal advertising can-
not be waived in the Superfund remedial program on the
basis of a claimed emergency situation since EPA handles
Superfund emergencies under the removal rather than the
remedial program. Furthermore, a declaration of an emer-
gency under State law does not necessarily constitute an
emergency under the EPA Superfund program's criteria.
A summary table of procurement methods and procedures
is presented in Exhibit II/I1-2, on the following page.
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EXHIBIT II/II-2
SUMMARY OF PROCUREMENT METHODS AND PROCEDURES
PROCUREMENT METHOD
EXAMPLES
PROCUREMENT PROCEDURES
Formal Advertising
Competitive
Negotiation
o
Construction
(Remedial Action)
Engineering Services for
RI/FS and Design
Construction Management
Claims Management
Public Relations
Project Management
Operations Assistance
Biddability/Constructability
Review
Advertise for Bids
. Hold Pre-Bid Conference
. Receive and Open Bids
Evaluate Bids
. Issue Letter of Intent
Issue Notice of Award
Execute Subagreement
Issue Notice to Proceed (See Exhibit II/V-1 for Detailed Flow Chart of Procurement
Procedures for Construction Services)
Basic Procedures
Issue Request for Proposals
Evaluate Proposals
Develop "Short List" of Best-Qualified Offerors with Acceptable Proposals in the
Competitive Range
Conduct Interviews if Desired
Negotiate with All Offerors Within the Competitive Range
Execute Subagreement
CO
Small Purchase
Noncompetitive
Negotiation*
Equipment/Materials/
Supplies under $10,000
Products or Services
Available Only from a
Single Source
Emergency
Inadequate Competition
Award Official Approves
Optional Procedures for Engineering Services Only
Issue Request for Qualifications or Refer to Pre-Qualifled List
Develop "Short List" of Best-Qualified Offerors
Ask for Proposals from the Best-Qualified Offerors
Evaluate Proposals
Negotiate with Offerer with Highest Ranked Proposal
Reach Agreement or Negotiate with Offerer of Next Highest Hanked Proposal
Execute Subagreement (See Exhibit II/III-l for Detailed Flow Chart of Procurement
for Engineering Services)
Obtain Price or Rate Quotations from an Adequate Number of Qualified Sources
Make Purchase
Determine Need and Document Reasons for Use and Get Award Official Approval, if
Necessary
Negotiate with Single Firra or Individual
Execute Subagreement
*Note: Noncompetitive negotiation rarely is approved by EPA for use in the Superfund "remedial program.
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9375.1-5
E. TYPES OF SUBAGREEMENTS
There are several types of subagreements possible un-
der EPA assistance awards. For the Superfund program, EPA
regulations and procedures specify that some subagreement
types are preferable in certain instances, while some are
not allowed. This section outlines these subagreements
and provides information on their use. In addition to
following these guidelines, States must ensure that all
subcontracts awarded by a contractor comply with 40 CFR
33.295, "Subagreements Awarded by a Contractor."
E.1 Fixed Price Subaqreements
Under a fixed price subagreement, the State and its
contractor agree upon a price for the services to be pro-
vided. This price, then, is fixed no matter what the
final costs of the project are. The total cost to the
State is changed only if a change order is negotiated.
A fixed price contract is awarded in instances when a
project scope of work can be defined precisely, such as in
the procurement of construction contractors using bidding
documents that include construction drawings and specifi-
cations. A fixed price subagreement also may be negoti-
ated for other services whose scope can be defined
clearly. For services other than construction, however,
this type of subagreement is used less frequently than the
cost-plus-fixed-fee type (discussed below), primarily due
to the difficulty inherent in defining the scope and limi-
tations of the work to be performed under a fixed fee sub-
agreement. Where a fixed price subagreement is found to
be appropriate, it is the easiest type to administer.
E.2 Cost-Plus-Fixed-Fee Subaqreements
The cost-plus-fixed-fee subagreement is the type most
commonly used for obtaining services other than con-
struction on Federally assisted projects. Cost-plus-
fixed-fee subagreements most often are used when it is
difficult to define accurately and clearly the scope and
extent of the work to be performed.
With a cost-plus-fixed-fee subagreement, both a cost
ceiling, made up of direct and indirect costs for the
project, and a fixed contractor fee for the work are es-
tablished. The State, then, pays only for the costs of
the work performed, plus the fixed fee. For example, if
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9375.1-5
the cost ceiling is negotiated at $200, ($100 direct costs
and $100 indirect costs) and the fixed fee is $30, the
State would pay $230 for the project. If the actual
project costs are $80 direct costs and $80 indirect costs,
however, the State would pay $190 for the project (actual
direct and indirect costs plus the full fixed fee of $30).
On the other hand, if project costs are expected to
exceed the agreed-upon ceiling, the contractor must so
inform the State. The State either can complete the
original subagreement after approving the increased cost
ceiling, if increases are found to be justified, or can
terminate the subagreement. For projects where costs are
expected to exceed the ceiling, the contractor is not
required to incur costs in excess of the ceiling, nor to
complete the project as negotiated, unless the State first
negotiates and authorizes a new cost ceiling. The
contractor does not receive an increased fee for projects
where increased costs are for additional work within the
original scope of services. If the additional work is
beyond the scope of the original subagreement and the
contractor is authorized to implement that work, the
contractor may claim an additional fee.
E.3 Percentage of Construction Cost Subaqreements
Used many years ago, this type of subagreement estab-
lished the price of .a project as a percentage of the
construction costs. It is not allowed when Federal funds
are involved in a project.
E.4 Cost-Plus-Percentage-of-Cost Subagreements
This type of contract applies a multiplier, including
a profit, to direct costs of a project to determine total
costs. It is not acceptable when EPA funds are involved
in a project.
E.5 Other Subagreement Types
Other types of subagreements exist. Some are accept-
able for use on EPA-assisted activities, some are less
desireable. States employing firms that previously have
performed EPA-assisted work, particularly under the CERCLA
program, should request assistance from their contractors
in determining appropriate subagreement types; such firms
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9375.1-5
should be familiar with acceptable forms of subagree-
ments. States also may contact the EPA Regional office to
answer questions concerning forms of subagreements.
F. PROMOTING COMPETITION
EPA procurement regulations prohibit the use of prac-
tices that unduly restrict or eliminate competition (40
CFR 33.230). Examples of practices that are considered
unduly restrictive include:
Noncompetitive practices between firms
Organizational conflicts of interest
Unnecessary experience and bonding requirements
State or local laws, ordinances, regulations, or
procedures that give local or in-State bidders or
proposers preference over other bidders or pro-
posers in evaluating bids or proposals
Placing unreasonable requirements on firms in
order for them to qualify to do business
Unduly restrictive specifications as described by
40 CFR 33.255.
Under the Superfund program, States must take appro-
priate actions to promote competition. These include:
Publishing solicitations in daily newspapers with
significant (State-wide) circulation and in trade
publications (e.g., Engineering News Record, Pub-
lic Works Magazine, Consulting Engineer Magazine)
with regional and national circulations
Encouraging participation by MBEs, WBEs, and
small and labor surplus area businesses by in-
cluding qualified firms on solicitation lists and
by regular notification of Federal, State, and
local agencies that promote the interests of
these businesses
Providing adequate time between the date of the
solicitation and the date on which proposals or
bids will be accepted (for engineering services,
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9375.1-5
this is usually four to six weeks; for construc-
tion projects, this is usually four to eight
weeks, depending on the subagreement size and
complexity)
Developing, implementing, and publishing model
codes of procurement to provide a consistent
basis for obtaining A/E and construction services
Developing and publishing model codes of ethics
to be honored by the State employees who are in-
volved in the procurement process
Developing accurate and complete requests for
qualifications and/or proposals and bidding docu-
ments to be used in obtaining A/E and construc-
tion services
Refraining from noncompetitive (sole-source) pro-
curement, except in instances where an item or
service is available only from a single source,
an emergency requires immediate action, competi-
tion is not adequate (see 40 CFR 33.605(c)), or
EPA approval is granted
Not using construction specifications which are
proprietary, exclusionary, or discriminatory in
nature
Whenever possible, using performance specifica-
tions for equipment and materials based upon ac-
cepted, nationally known standards.
Additional actions States may take are maintaining lists
of qualified offerers and bidders who may be sent direct
solicitations to perform A/E and construction services,
and providing trade associations, engineering organiza-
tions, plan reading rooms, etc., with copies of solicita-
tions, requests for proposals, or other bidding
information.
G. MINORITY, WOMEN'S, SMALL, AND LABOR SURPLUS AREA
BUSINESSES
As specified in EPA's procurement regulation, States
procuring services under EPA assistance agreements must
take the following six affirmative steps to ensure that
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9375.1-5
MBEs, WBEs, and small businesses are'used whenever possi-
ble as sources of supplies, construction, and services (40
CFR 33.240):
Place qualified MBEs, WBEs, and small businesses
on solicitation lists
Assure that MBEs, WBEs, and small businesses are
solicited whenever they are potential sources
Divide remedial response tasks into separate sub-
agreements, when economically feasible, to permit
maximum participation by MBEs, WBEs, and small
businesses
Establish delivery schedules, where the require-
ments of the work permit, that encourage competi-
tion by MBEs, WBEs, and small businesses
Use the services and assistance of the Department
of Labor, the Small Business Administration, and
the Minority Business Development Agency of the
U.S. Department of Commerce
Require prime contractors to take the above steps
if they subcontract and to document that they
have fulfilled these steps.
States are encouraged to engage labor surplus area busi-
nesses in Superfund work by using the steps outlined above
and to advertise procurement actions in MBE, WBE, and
small business publications. States also must maintain
records on participation by MBEs, WBEs, and small
businesses.
Further, for MBEs and WBEs, but not for small busi-
nesses, EPA requires all assistance recipients to report
on their utilization of such firms by submitting EPA Form
6005-1 "U.S. EPA Recipient Report on Minority and Women's
Business Utilization" within 15 days after the end of each
Federal fiscal quarter. This form must be submitted re-
gardless of whether the recipient awards a subagreement to
an MBE or WBE during a particular Federal fiscal quarter.
Recipients must comply with this reporting requirement
during each Federal fiscal quarter that they or their con-
tractors award subagreements for the activities or tasks
identified in the assistance agreement.
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9375.1-5
Each EPA program is required to establish an annual
"fair share" objective for MBE and WBE utilization. To
this end, each Region is requested to negotiate a fair
share agreement with each State within its jurisdiction.
When a Superfund Cooperative Agreement is awarded to a
State with which a "fair share" agreement has not been
negotiated, the recipient must agree that it will not
award any subagreements under the Superfund Cooperative
Agreement until it has negotiated a fair share objective
with EPA.
Generally, it is not necessary to negotiate an MBE/WBE
fair share for each assistance agreement. When a dollar
objective is agreed upon for a specific Superfund
Cooperative Agreement, however, that dollar objective
should be stated specifically in the MBE/WBE reporting
provision of the Cooperative Agreement.
Additional details on utilizing MBEs and WBEs for
Superfund State-lead remedial response, and a provision on
the subject to incorporate into Superfund Cooperative
Agreement applications, are found in Chapter III and
Appendix F of Volume I, respectively.
H. DOCUMENTATION
States must maintain detailed documentation on all
procurement actions in accordance with relevant and appli-
cable sections of 40 CFR Parts 30 .and 33 and existing EPA
guidance and administrative manuals. Such documentation
includes:
Basis for contractor screening and selection (40
CFR 33.250)
Justification for the procurement method used (40
CFR 33.250)
Justification for any specification or require-
ment that does not encourage free and open com-
petition (40 CFR 33.250)
Justification for the type of subagreement to be
awarded (40 CFR 33.250)
Evidence of advertising (40 CFR 33.250)
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9375.1-5
Evidence of solicitation of small, minority, and
disadvantaged business enterprises (40 CFR 33.240)
Actual bids submitted (40 CFR 33.250)
Basis of award, including a copy of the cost or
price analysis and documentation of negotiations
(40 CFR 33.250)
Basis and justification for rejection of any or
all bids (40 CFR 33.250)
Bid tabulations (40 CFR 33.275)
Payment files, including envelopes in which in-
voices were received (40 CFR 30.500(b))
Thorough documentation of all project costs for
possible cost recovery action (40 CFR 30.500);
for multi-site Cooperative Agreements, costs need
to be accounted for by site as well as by assis-
tance agreement number, and by the following re-
medial activities:
Remedial investigation/feasibility study
Remedial design
- Remedial action
Operation and maintenance
Protest files (40 CFR 33.1110)
Contracting documents, including the subagree-
ment, work orders, change orders, and related
documentation
Records pertaining to subcontractors used by the
prime contractors (40 CFR 30.500(b))
Correspondence
Logs of telephone and personal conversations
Minutes of meetings, including pre-bid confer-
ences, bid openings, and consultant interviews
Technical and financial progress reports (40 CFR
30.505)
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9375.1-5
Records for claims, disputes, and noneompnance
actions (40 CFR 30.500(b))
Other technical documentation such as site visit
reports and any other matters of consequence
relevant to the project, its funding, design, or
performance.
Specific details on document retention and regulatory
references may be found in Appendix U of Volume I. As a
general policy, States should document in writing any
other matters that have to do with procurement and should
maintain such records for review during Federal audit.
These records will enable the State to prove that all
Federal and State requirements have been met in conducting
the procurement action for the remedial response.
The State's contractors must maintain records per-
tinent to the project (40 CFR 30.500(b)), including:
Bid records
Subagreement documents
Work orders received
Change orders and supporting records
Progress reports
Payment vouchers
Stop-work orders
Claims and disputes, with complete back-up
evidence.
The State's prime contractors also must maintain such
records for all subcontractors used on the project.
I. CONFLICTS OF INTEREST AND CODE OF CONDUCT
States must conduct all procurement actions in a man-
ner above reproach, with complete impartiality, and with
preferential treatment to none. This means that no State
employee may solicit or accept any gratuities, gifts,
favors, loans, or anything of monetary value: from anyone
who has obtained, is obtaining, or may possibly seek to
obtain subagreements from the State; from anyone who con-
ducts activities that are regulated by the employee's
State agency; or from anyone who has interests that may be
affected substantially by the performance or non-
performance of the employee's duties. States also should
avoid conflicts in which a State employee has a share in,
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9375 1-5
or in any manner may possibly benefit from, any subagree-
ments under State administration.
In addition, States must take steps to avoid organiza-
tional conflicts of interest in Superfund procurement ac-
tions. An organizational conflict of interest exists when
the nature of the work to be performed under a subagree-
ment may result in an unfair competitive advantage to a
contractor or may impair the contractor's objectivity in
performing the work. Examples of organizational conflicts
include the following:
A contractor who provides engineering and/or
other technical direction for a system, who de-
termines the system's basic concept, and who su-
pervises its execution by other contractors
should not be in a position to favor his/her own
products or capabilities
A contractor who prepares specifications covering
items to be used in a competitive acquisition
should not be allowed to furnish these items,
either as a prime contractor or as a subcontractor
A contractor who gains access to proprietary in-
formation should agree to protect against un-
authorized use or disclosure of the information
and should refrain from using the information for
any purpose other than that for which it is
intended
A contractor who obtains a subagreement to per-
form a remedial response action under which it
would be paid to clean up a site for which it
ultimately could be found to be liable for the
original hazard
A contractor who, when performing a remedial re-
sponse action, discovers evidence establishing
its own liability for the site.
Situations which constitute conflicts of interest also are
discussed in Volume I, Appendix F.
EPA's policy is to prevent personal or organizational
conflicts of interest or the appearance of such conflicts
of interest in the award and administration of EPA assis-
tance, including subagreements (40 CFR 30.613). To pre-
vent this, EPA's procurement regulation requires that
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9375.1-5
States maintain a written code or standard of conduct to
govern the performance of its employees engaged in the
award and/or administration of subagreements supported by
Superfund (40 CFR 33.270). This code must provide that no
State employee shall participate in the selection, award,
or administration of a subagreement supported by Superfund
if a real or apparent conflict of interest exists. Such a
conflict would arise when any State employee, any member
of a State employee's immediate family, or partner of the
employee, have a financial or other interest in the firm
selected for the award; a conflict also would arise if an
organization which may receive or has received a subagree-
ment hires the State employee or any immediate family mem-
ber or partner of the employee. While State employees may
neither solicit nor accept gratuities, favors, nor any-
thing of monetary value from contractors, States may set
rules to determine situations where financial interest is
not considered to be substantial or a gift is an unsolic-
ited item of nominal intrinsic value.
At a minimum, States also must incorporate the follow-
ing provisions, or their equivalents, into all subagree-
ments awarded using Superfund monies (to be included in
revisions to 40 CFR 33.1030):
The contractor shall not provide data generated
or otherwise obtained in the performance of his
responsibilities under a subagreement to any
party other than State or Federal agencies and
their authorized agents.
The contractor shall not accept employment from
any party other than State or Federal agencies
for work directly related to the site(s) covered
under a subagreement for a period of three years
from termination of the subagreement, or until
any cost recovery action related to the site(s)
is completed, whichever is longer, unless he has
received a written release from this restriction
from the contracting State agency, which includes
an EPA concurrence.
The contractor shall provide witnesses and docu-
mentation of activities performed and costs in-
curred under a subagreement upon request to State
or Federal agencies during the period of three
years from termination of the subagreement, or
until any cost recovery action related to the
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9375.1-5
site(s) is completed, whichever is longer. The
contractor shall be entitled to fair and just
compensation for any such activities performed.
The contractor agrees to notify the contracting
officer of any actual, apparent, or potential
conflict of interest with regard to any individ-
ual working on a work assignment or having access
to information regarding the subagreement. Noti-
fication of any conflict of interest shall in-
clude both organizational conflicts of interest
and personal conflicts of interest (which are
defined as the same types of relationships as
organizational conflicts of interest, but appli-
cable to an individual). In the event that a
personal conflict of interest exists, the indi-
vidual who is affected shall be disqualified from
taking part in any way in the performance of the
assigned work that created the conflict of inter-
est situation.
Additional discussion of conflict of interest provisions
can be found in Appendix F of Volume I.
J. UNFAIR LABOR PRACTICES
Unfair labor practices are illegal and prohibited un-
der Superfund. Examples of unfair labor practices include
kickbacks from subagreement award and antitrust violations.
Kickbacks are payments made to influence the award of
subagreements. The principal deterrent to kickbacks is
the Anti-Kickback Act (41 U.S.C. 51-54), which:
Prohibits payments by, or on behalf of, a subcon-
tractor in any tier under any Federally funded,
negotiated subagreement, as an inducement to
award a subcontract
Provides for recovery of payments by court action
or by withholding compensation otherwise due the
subcontractor
Imposes criminal penalties on any person who
knowingly makes or receives these payments.
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9375.1-5
Antitrust laws are intended to ensure that markets
operate competitively; violations of antitrust laws
include:
The existence of industry price lists or price
agreements
Simultaneous price increases or "follow-the-
leader" pricing
Rotation of bids or proposals so that each com-
petitor takes a turn in the sequence as low bid-
der, or so that certain competitors bid low only
on some sizes of subagreements and high on others
Division of the market so that certain competi-
tors bid low only for subagreements in certain
geographical areas or on certain projects, and
bid high on other projects
Establishment by competitors of a collusive pric-
ing system
The filing of a joint bid or offer by two or more
competitors when at least one of the competitors
has sufficient technical capability and produc-
tive capacity for subagreement performance
Any evidence of direct collusion among competi-
tors, such as the appearance of identical calcu-
lations or spelling errors in two or more bids or
offers.
Each contractor must include in its bid or proposal a cer-
tification of independent price determination in accor-
dance with the revisions to 40 CFR 33.420. This document
certifies that no collusion, as defined by Federal and
State antitrust laws, occurred during bid preparation. In
addition, the State may terminate a subagreement if it is
discovered that a person or agency was employed or re-
tained by the contractor solely to secure the subagreement
for a commission, percentage, brokerage, or contingent
fee. The State also may terminate the subagreement if the
contractor, by offering or giving gratuities (in the form
of entertainment, gifts, or otherwise), tries to elicit
from any employee of the State or EPA aid in obtaining
favorable treatment.
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9375.1-5
K. COST AND PRICE ANALYSIS
States must conduct a cost or price analysis, as ap-
propriate, on every procurement action, including change
orders to existing subagreements. Where the State con-
ducts a cost or price analysis, contractors and subcon-
tractors must submit supporting data to the State. This
information must be displayed on EPA Form 5700-41, "Cost
and Price Summary" (see Exhibit II/II-3, on the following
pages), or in another format which provides similar
information.
This section provides a further discussion of cost and
price analyses.
K.1 Cost Analysis
The State must conduct a cost analysis on all negoti-
ated subagreements estimated to exceed $10,000, and on all
negotiated change orders (40 CFR 33.290).
A cost analysis is defined as the review and evalua-
tion of each cost element to determine the reasonableness,
allocability, and allowability of the cost. This evalua-
tion includes a comparison of the offerer's current cost
estimates with: costs previously incurred by the offerer,
the offerer's last prior cost estimate for similar items,
current cost estimates from the State or other sources,
and prior estimates of historical costs from other con-
tractors for the same or similar items.
K.2 Price Analysis
A price analysis is required an all formally adver-
tised procurements estimated to exceed $10,000 if there
are fewer than three bidders. If there are three or more
bidders on a formally advertised procurement, the State
can assume, unless evidence demonstrates otherwise, that
adequate price competition has taken place.
A price analysis is the process of evaluating a con-
tractor's prospective price for a project, without regard
to the contractor's separate cost elements and proposed
profit. Price analysis determines the reasonableness of
the proposed subagreement price based on adequate price
competition, previous experience with similar work, estab-
lished catalog or market price, and law or regulation.
Volume II/II-21
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EXHIBIT II/II-3
COST AND PRICE SUMMARY
9375.1-5
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EPA Form 6700-41 (R*v. 4-84) Previous editions m»y b* used until supplies ere exheusted.
Volume II/II-22
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9375.1-5
EXHIBIT II/II-3 (Continued)
PART III - PRICE SUMMARY
1 3. COMPETITOR'S CATALOG LISTINGS. IN-HOUSE ESTIMATES, PRIOR QUOTES M
(Indicate btti* tor price comparison) Pf
4RKET PROPOSED
ICE(S) PRICE
$
PART IV - CERTIFICATIONS
14. CONTRACTOR
LJ YES LJ NO (H "Yes" givt name, address, and telephone number of reviewing office
1 4b. THIS SUMMARY CONFORMS WITH THE FOLLOWING COST PRINCIPLES
14c. This proposal is submitted for use in connection with and in response to:
HI
This is to certify to the best of my knowledge and belief that the cost and pricing data summarized he
complete, current, and accurate as of:
rein are 121 DATE
1 further certify that a financial management capability exists to fully and accurately account for the financial transactions under this
project. 1 further certify that 1 understand that the subagreement price may be subject to downward renegotiation and/or recoupment
where the above cost and pricing data have been determined, as a result of audit, not to have been complete, current, and accurate as of the
date above.
131 TITLE OF PROPOSER
1 5. RECIPIENT REVIEWER
SIGNATURE OF REVIEWER
DATE OF EXECUTION
1 certify that 1 have reviewed the cost/price summary set forth herein and the proposed costs/price appear acceptable for subagreement
award.
(31 TITLE OF PROPOSER
16. EPA REVIEWER
13) TITLE OF PROPOSER
SIGNATURE OF REVIEWER
SIGNATURE OF REVIEWER
DATE OF EXECUTION
DATE OF EXECUTION
EPA Form 6700-41 (Rev. 4-84)
Page 2 of 5
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9375.1-5
L. PROFIT ANALYSIS
The State must ensure that it pays only a fair and
reasonable profit to its contractors. In a procurement
action where there is no competition (e.g., a change or-
der) and where price is based on a cost analysis (e.g.,
competitive and noncompetitive negotiation), the State
must negotiate profit as a separate element of cost. To
determine a reasonable profit, the State must consider the
complexity of the work to be performed, the risk borne by
the contractor, the contractor's investment, the level of
subcontracting, the contractor's past performance record,
and industry profit rates in the surrounding geographical
area for similar work.
Within this framework, the State must procure contrac-
tors to conduct remedial response at a site. The specific
procedures that it will employ depend on whether the State
is seeking to acquire the services of an A/E firm to con-
duct remedial planning activities or construction over-
sight, or to obtain the services of a construction firm to
implement the remedial action. Because procedures differ,
they are discussed in separate chapters of this document.
See Chapter III - Procurement of Engineering Services for
procedures appropriate for A/E firms, and Chapter V -
Procurement of Construction Services for procedures to be
used when obtaining the services of a construction firm.
Volume II/II-24
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9375.1-5
III. PROCUREMENT OF ENGINEERING SERVICES
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9375.1-5
III. PROCUREMENT OF ENGINEERING SERVICES
This chapter outlines the general requirements for
procuring the services of an architectural and engineering
(A/E) firm during any phase of remedial response. States
may procure the services of A/E firms either through for-
mal advertising or competitive negotiation. Formal adver-
tising, in certain circumstances, is not always a prac-
tical approach, and thus competitive negotiation, which
results in a cost-plus-fixed-fee contract, often is used.
This chapter provides specific procedures for the two
methods of competitive negotiation: the standard^ method
and the optional method. In addition, it contains gui-
dance that States may use to expedite procurement of A/E
firms within the framework provided by either of the two
competitive negotiation methods specifically described.
A. GENERAL REQUIREMENTS FOR PROCURING ENGINEERING SERVICES
States may employ the services of reputable A/E firms
at almost any stage of remedial response. EPA's regula-
tion governing procurement under assistance agreements, 40
CFR Part 33, allows the use of either formal advertising
or competitive negotiation for obtaining an A/E firm.
Further, the regulation provides two methods of competi-
tive negotiation for obtaining such engineering services;
either method may be used under Superfund Cooperative
Agreements. The "standard method" involves selection of
an engineering firm, taking into account both technical
capabilities and the proposed cost to complete the work,
and is discussed in Section B below. Selection using the
"optional method" is based primarily upon the firm's tech-
nical capabilities, and is discussed in Section C.
Before the State initiates either procurement method,
however,- it is essential that the State perform a compre-
hensive evaluation of its needs to determine the appro-
priate procurement method, thus avoiding unnecessary
delays. States should take the following steps to develop
basic information for the procurement process:
Determine, in general terms, the need, purpose,
and objectives of the desired engineering services
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9375.1-5
Identify the project scope of work
Set the timetable for procurement and performance
of A/E services
Identify unique project considerations
Determine the total project budget.
Once the State has developed this information, it can
begin the procurement process.
If the State is using the standard competitive nego-
tiation method, as defined by 40 CFR 33.505-33.520, the
first procurement action is to issue a Request for
Proposals (RFP). The RFP describes the project, lists
proposal evaluation criteria and their relative impor-
tance, and gives the deadline and location for submission
of proposals from interested firms. The aspiring A/E con-
tractor's response to an RFP is a proposal detailing both
the methods that it will use to perform the work required
for the project and the estimated costs for these services
If the State is using the optional method of procure-
ment, as defined by 40 CFR 33.525, the first procurement
action is the issuance of a Request for Statements of
Qualifications (RFQ). The RFQ describes the project and
the proposed scope of services, explains the evaluation
criteria to be used and their relative importance,
provides the names of persons that firms can contact to
answer questions, and specifies the deadline and location
for submission of the statements of qualifications
(SOQs). In responding to ah RFQ, a firm supplies general
information about its qualifications to perform the pro-
posed project and its experience in handling similar proj-
ects; it does not address specific scopes of work or costs
to perform the project.
A more detailed discussion of these two methods for
procuring A/E services under the Superfund program is
provided in the following two sections.
B. STANDARD METHOD OF COMPETITIVE NEGOTIATION
Under the standard method of competitive negotiation
for procuring A/E services, the State gives public notice
of its intent to hire an A/E firm by publishing an RFP.
It then evaluates the proposals received, negotiates with
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9375.1-5
offerers judged to be within the competitive range to ob-
tain their best and final offers, and awards the subagree-
ment to the firm determined by the evaluation to be the
most advantageous to the State. Exhibit II/III-l, on the
following page, is a graphic representation of the process
for obtaining A/E services by the standard method, as
defined by 40 CFR 33.505-33.520.
B.1 Request For Proposals
Proper development of the State's RFP is key to suc-
cessfully soliciting engineering services. It is neces-
sary that the State prepare an accurate and complete RFP
that effectively addresses the issues specific to the
project. Thus, the proposals received should be respon-
sive to the State's needs. The RFP must be in writing,
must contain sufficient information to enable a prospec-
tive offeror to prepare a proposal, must present all
evaluation criteria and the relative importance attached
to each, and must clearly state the deadline and location
to submit proposals (40 CFR 33.510(c)).
When soliciting proposals, the State should:
Accurately and completely describe the proposed
project and engineering services required
Provide project schedule requirements
Describe any unique project requirements
Include the names of persons to contact with
questions on the selection process
Determine the required content of the proposals,
including, for example:
The availability of personnel, equipment,
and facilities needed to complete the work
- Recommendations and opinions from previous
clients,, as they relate to the specific
project under consideration
Provide a detailed cost estimate for the project.
State solicitations also should contain a minority and
women's business enterprise (MBE/WBE) utilization plan.
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9375.1-5
EXHIBIT M/lll-1
STANDARD METHOD FOR PROCUREMENT OF ENGINEERING SERVICES
START \
Donnnpuwr] ^
PROCEDURES/
^^
DEVELOP PROJECT
SCOPE OF WORK.
SCHEDULE. AND
BUDGET
k.
ISSUE
REQUEST FDR
PROPOSALS (RFPs)
40 CFR 33.510
RECEIVE
AND
tVALUAlb
PROPOSALS
40 CFR 33^15
DETERMNE WHICH
ACCEPTABLE
PROPOSALS
ARE WITHIN
COMPETmVE RANGE
40CFH3aS20(«)
o
(D
YES
NEGOTIATE WTTH
OFFERORST008TAM
•BEST AND FMAL-
OFFERS
40CFR3aS20(a)
EPA REVIEW
OF AWARD
RECOMOCATPN
40CFR33.110(bX2)
-------
9375.1-5
B.2 Evaluating Proposals
Engineering firms expressing an interest in performing
the work will offer proposals that, at a minimum, include
a letter of interest, a statement that demonstrates the
firm's understanding of the project, evidence of the
firm's financial stability and its ability to perform the
work, and a detailed cost proposal. The State then will
use the evaluation criteria included in the RFP to analyze
the submissions and determine the best proposal.
Using the standard method of procurement, the State
may take either of two courses of action. First, it may
begin negotiations with those firms within the competitive
range best able to perform the work, to obtain their best
and final cost proposal, as described in the following
section, or, if the RFP states that the award may be based
on initial offers alone, it may accept the best proposal
without further negotiation. During the evaluation proce-
dure, the State must consult the most current EPA "Master
List of Debarred, Suspended, and Voluntarily Excluded
Persons" (40 CFR 32.400) to ensure that the firms sub-
mitting proposals are not prohibited by EPA from partici-
pation in the assistance program. The Master List is
updated weekly and is available from EPA Office of
Regional Counsel in each Region.
B.3 Negotiation and Subagreement Award
If the State does not choose a firm based solely on
the original proposals submitted, the State begins nego-
tiations with the firms within the competitive range to
obtain best and final offers. If any single offerer is
allowed to alter its proposal, all best-qualified offerers
within the competitive range must be afforded the same
opportunity (40 CFR 33.520(a)). At no time during nego-
tiations may the State disclose the identities of com-
peting offerers. The State also must not reveal any in-
formation contained within competing proposals (40 CFR
33.520(a)). To bring discussions to an end, the State
must establish a common cut-off date which allows the
offerers ample time to prepare and submit best and final
offers.
The State then evaluates the final offers and decides
which proposal is most advantageous (40 CFR 33.520(b)).
Price and other evaluation criteria in the RFP, including
effective utilization of MBEs and WBEs, must be considered
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9375.1-5
in making this determination. All factors used in deter-
mining the best-qualified offers within the competitive
range must be documented fully. The firm chosen to
receive the subagreement award must be notified imme-
diately in writing, and all unsuccessful offerers must be
informed, of their rejection (40 CFR 33.520).
C. OPTIONAL METHOD OF COMPETITIVE NEGOTIATION
States may procure engineering services through a
process by which the most highly qualified firms are
located and requested to submit technical proposals. The
State then selects the best technical proposal and nego-
tiates with that offerer for fair and reasonable compen-
sation for a specific scope of work (40 CFR 33.525).
Should the State and offerer of the best proposal not be
able to reach agreement, negotiations with that offerer
must be terminated and the State negotiates with the
offerer of the second-best technical proposal. This
process continues until the State reaches agreement on the
scope of services and corresponding compensation with a
qualified offerer submitting an acceptable technical
proposal.
Exhibit II/III-2, on the following page, is a graphic
representation of the optional method for obtaining en-
gineering services. The significant difference between
the optional and standard methods for procuring engineer-
ing services is that, using the standard method, as
defined by regulation, the State evaluates offerors taking
price into consideration prior to selecting the respon-
sible offerer whose proposal is determined to be the most
advantageous to the State; using the optional method, the
State selects the best technical proposal and then
negotiates a price for the work.
C.1 Soliciting Statements of Qualifications
The optional method selection process begins with the
State issuing a request to firms to submit SOQs and
summaries of their experience in performing engineering
services related to a specific project. The request may
be made through a public solicitation (40 CFR 33.510) or
by direct requests to engineering firms that have been
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9375.1-5
EXHIBIT II/III-2
OPTIONAL METHOD FOR PROCUREMENT OF ENGINEERING SERVICES
I
-4
SCOOT COMPREHENSIVE
COST PROPOSAL FROM
CFFEROR UNDER
CONTRACT
NEGOTIATIONS
40 CFR 33.525 («)
-------
9375.1-5
identified by the State (prequalified) in the disciplines
required (40 CFR 33.230(c». States that maintain lists
of prequalified engineering firms are required to update
their lists at least every six months, to review and act
on each request for prequalification made more than thirty
days before the closing date for receipt of proposals, and
to give adequate public notice of their prequalification
procedures in accordance with the public notice require-
ments of 40 CFR 33.510.
State RFQs must include at least the following items:
The requested scope of services
A clear explanation of the criteria to be used in
evaluating the SOQs and the relative importance
of each criterion
An MBE/WBE utilization plan
The deadline (date and time) for submitting SOQs
The names of persons to contact with questions.
The State's criteria for evaluating and ranking offerers
may include:
Education, experience, and expertise of the
offerer's principals and key staff members
The offerer's general experience, financial
stability, and history of performance
Availability of personnel, equipment, and
facilities needed to complete the work
Plans for MBE/WBE utilization
Recommendations and opinions from each offerer's
previous clients as these relate to the specific
project under consideration.
Other criteria may be used, depending upon the specific
requirements of the project.
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9375.1-5
C.2 Evaluating Statements of Qualifications
The State must evaluate the responses received to
eliminate all respondents who are obviously unqualified or
otherwise incapable of performing the required work. The
State then must develop a "short list" that includes three
or more of the most highly qualified offerers, based upon
the evaluation criteria listed in the RFQ. In developing
this list, the State must consult the most recent EPA
"Master List of Debarred, Suspended, and Voluntarily
Excluded Persons" (40 CFR 32.400) to ensure that the firms
selected are not excluded from the assistance program.
The Master List is updated weekly and is available from
the Office of Regional Counsel in each EPA Region.
Ranking of the firms must be based on qualifications,
anticipated quality of work, and prospects for satisfac-
tory completion of the project. It also should ensure
that each offerer's submittals meet the criteria set forth
in the RFQ.
C.3 Soliciting and Evaluating Proposals
After selecting the most qualified offerers, States
must request technical proposals from the offerers and
must inform them of the evaluation criteria the State will
use to rank the technical proposals (40 CFR 33.525(c)).
The RFP should specify that each proposal submitted must
define the offerer's intended concept and approach to the
planning, organization, and management of the project.
Upon receipt, the technical proposals are evaluated care-
fully. At this point, the State may wish to meet with the
short-listed offerers individually to obtain additional
information to be used in determining which offerer is
most qualified. Once the State has made its determina-
tion, it must notify in writing the offerer of the best
technical proposal (40 CFR 33.525(d)) and then may begin
subagreement negotiation.
C.4 Negotiation and Award of Subagreement
After the offerer of the best technical proposal is
notified, the State may initiate negotiations to develop
the details of the scope of work and corresponding compen-
sation. Specific elements that must be established during
these negotiations include:
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9375.1-5
Project schedule
Manpower requirements
Level of effort
Scope of services and deliverables
Areas of responsibility and liability
Fee structure, amount of compensation, and method
of payment.
The offeror must submit a comprehensive cost proposal
addressing the above items in detail, to be used as the
basis for the State's cost analysis and negotiations.
During the negotiation process, the State and offeror must
reach a complete and mutual understanding of the scope of
professional services to be provided and the level of per-
formance desired. The negotiation process offers both
parties the opportunity to refine, amend, and clearly
define the services to be rendered for the compensation to
be paid, as well as the areas of responsibility and
liability for those services.
When the State and the offeror agree on the scope of
work and adequate compensation, the State may execute a
subagreement and issue a notice to proceed with the work,
provided the State has certified its procurement system to
EPA. (See Chapter II for subsequent action when States
are not self-certified.) If it is not possible for the
State and offeror to reach an agreement, the State must
terminate negotiations with that offeror and reinstitute
the process with the offeror of the next-best technical
proposal (40 CFR 33.525(f)>. The procedure is repeated
until an agreement is reached.
D. EXPEDITING PROCUREMENT OF ENGINEERING SERVICES
The State may choose to use different firms for con-
ducting remedial investigation/feasibility study the
(RI/FS) and overseeing the engineering design/construc-
tion, thus performing two separate procurements. This
situation, however, may delay the entire remedial response
process at the site. To minimize such delays, the State
may include the RI/FS and engineering design/construction
oversight within a single procurement. To leave this
option open, the State's original RFP for engineering
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9375.1-5
services must indicate that the RI/FS is the initial
activity that will be authorized and that the State,
through a separate notice to proceed, may execute an
option for design and construction oversight services,
subject to the availability of funding to amend the
Cooperative Agreement and the negotiation of an acceptable
cost. In this manner, the State could choose to use a
single A/E firm if the design and construction project(s)
is funded and the firm is able to perform the work. This
method of procurement should improve the continuity of
technical activities, accelerate project schedules, and
reduce State administrative costs associated with
procuring technical services.
When undertaking the lead for remedial planning the
State also is encouraged to expedite necessary procurement
within the framework presented in this chapter. Under
normal circumstances, procurement actions for remedial
planning may require several months to complete and thus
may delay the remedial response. Exhibit II/II1-3, on the
following page, describes four suggested alternatives for
expediting the initiation of remedial planning. These
should be considered on a case-by-case basis, as appro-
priate. Additional information on expediting procurement
is provided in "Guidance for State Contracting of Remedial
Planning Activities," Office of Solid Waste and Emergency
Response, February 22, 1983, and "Class Deviation From
40 CFR 33,510 and 33.515 for Certain Activities Conducted
Under the Authority of CERCLA," Grants Administration
Division, November 18, 1983.
The next chapter — Chapter IV - Engineering Services
During Remedial Response — presents a brief description
of the various services that an A/E firm can provide to
the State during remedial response activities at uncon-
trolled hazardous waste sites, both in the course of reme-
dial planning and during the remedial action phase.
Volume II/III-ll
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9375.1-5
Type
EXHIBIT II/III-3
METHODS FOR EXPEDITING PROCUREMENT*
Summary
Options Contract
for Site Remedial
Planning Activities
Pre-Award Procurement
Procurement for
Multiple Site Planning
Procurement Using
Pregualifications
The State includes both remedial planning and
remedial action in the initial Cooperative
Agreement application. Following completion
of the RI/FS and selection of a remedy,
remedial design and remedial action are funded
by amendment. The State's request for
proposals (or similar documents) for
engineering services also covers all remedial
phases, but indicates that only RI/FS
activities will be funded, with an option to
conduct the design and remedial action
engineering services subject to the
availability of funds.
The State starts procurement activities such
as issuing requests for proposals,
negotiations, and selection of a qualified
firm before the award of the Cooperative
Agreement. A procurement subagreement then
can be signed immediately after the award of
funds. State personnel costs prior to award
are not allowable; however, these costs should
not be significant.
States with numerous sites and available
funding for cost-sharing may issue a level-of-
effort type subagreement similar to EPA's
remedial contracts. Once in place, site
planning activities could be started
immediately following the award of an
individual Cooperative Agreement, without the
need for site-specific procurement actions.
The State compiles a list of available
contractors by requesting qualifications from
firms capable of performing remedial planning
activities. The list of pregualified firms
then is used to solicit site-specific
proposals. However, prequalification
procedures must ensure adequate competition.
*A11 methods shown must be consistent with EPA's procurement
regulation, 40 CFR Part 33.
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9375.1-5
IV. ENGINEERING SERVICES DURING REMEDIAL RESPONSE
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9375.1-5
IV. ENGINEERING SERVICES DURING REMEDIAL RESPONSE
Architectural and engineering (A/E) firms can provide
assistance to States during all phases of remedial re-
sponse. Traditionally, A/E firms have conducted the reme-
dial investigation/feasibility study (RI/FS) and the reme-
dial design (RD). In addition, the State can utilize A/E
firms to provide other types of assistance, including con-
ducting biddability/constructability reviews of designs
developed by other A/E firms, assisting in the procurement
of a construction contractor, managing the construction,
managing change orders, and assisting the State in resolv-
ing claims. In the latter case, if there is an apparant
conflict of interest between the planning/design of a
remedy and its construction, however, the A/E firm that
developed the design cannot provide assistance during
claims negotiation. Exhibit II/IV-1, on the following
page, presents a graphic representation of points during
remedial response at which engineering services may be
used.
Since A/E firms can provide such varied services, this
chapter discusses the nature of the assistance that they
can lend to States throughout remedial response. Specifi-
cally, the sections below consider the following subjects:
Section A - RI/FS
Section B - RD
Section C - Biddability and constructability
reviews
Section D - Bid phase services
Section E - Construction oversight services
Section F - Claims
Section G - Operation and maintenance (O&M).
To provide additional assistance, each section includes a
generalized scope of work for the types of activities that
an A/E firm may be reguested to perform at each of these
Volume II/IV-l
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9375.1-5
EXHIBIT ll/IV-1
TYPES OF ENGINEERING SERVICES TYPICALLY USED
DURING REMEDIAL RESPONSE ACTIVITIES
PERFORMANCE
OF
REMEDIAL INVESTIGATION
AND FEASIBILFTY STUDY
DESIGN
OF
REMEDIAL RESPONSE
EXECUTION
OF
BIDDABILtTY/
CONSTRUCTABILITY
REVIEW
»-
AID DURING
PROCUREMENT
OF
CONSTRUCTION
CONTRACTOR
to
f
to
CONSTRUCTION
MANAGEMENT
CHANGE ORDER
MANAGEMENT
AND
CLAIMS RESOLUTION
FINAL INSPECTION-
PROJECT CLOSEOUT
OPERATION
AND
MAINTENANCE
OF REMEDIAL ACTION
-------
9375.1-5
points in remedial response. Guidance specific to the
above subjects can be found in relevant portions of the
following documents: Guidance on Remedial Investigations
Under CERCLA, Office of Emergency and Remedial Response
(OERR), June 1985; Guidance on Feasibility Studies Under
CERCLA, OERR, June 1985; and Superfund Remedial Design and
Remedial Action Guidance, OERR, February 1985.
In using this chapter, States are reminded that A/E
firms are only one option available to perform the types
of work described in Sections C through F. Alternatively,
at various points States may choose either to perform the
work themselves, to seek assistance from EPA which will
obtain the services of the U.S. Army Corps of Engineers
(COE), or to utilize an independent management consulting
firm to accomplish this work. Since A/E firms are such a
valuable resource, however, this chapter considers their
services separately. Other options cited above and tech-
nical requirements for the aspects of remedial response
detailed below in Sections C through F are discussed in
Chapter V, which describes in full the construction firm
procurement process.
A. REMEDIAL INVESTIGATION/FEASIBILITY STUDY
After an A/E firm is hired and before the RI/FS is
initiated, a detailed scope of work for the project is
prepared. The scope of work describes the current
situation at the site and includes a compilation of all
available existing information. It also includes plans
for quality assurance/quality control (QA/QC), health and
safety, sampling and analysis, site management, data
management, and community relations.
Once the scope of work is approved, the RI is per-
formed to define the problems and dangers associated with
the site. The site is mapped and investigated thoroughly
by sampling the area, ground water, surface water, soils,
vegetation, animals, and other appropriate elements to
determine the extent of the hazard. The wastes present in
drums, tanks, pits, lagoons, or other locations or con-
tainers also are characterized by sampling and analysis.
After the data are gathered, the danger presented by the
site is assessed and treatability studies, in the form of
pilot or bench scale treatment processes, are performed to
determine an appropriate remedial action to control or
remove the hazard. All data are gathered and analyzed,
and the RI report is issued.
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9375.1-5
The FS identifies and analyzes the various remedial
technologies available to eliminate the hazards associated
with the site. Alternatives are evaluated for their ef-
fects upon, and ability to protect, the environment and
public health. In addition, the alternatives are examined
in terms of the regulations and procedures established by
each governmental agency controlling site remediation and
a cost analysis of each alternative is performed. The
results of these investigations and studies are used by
the State and EPA to develop the Record of Decision (ROD)
for the site. They also are used by the A/E firm to pre-
pare a Pre-design Report which includes conceptual site
plans, outline specifications, and a preliminary schedule
and projected cost estimate for remedial action.
Activities that an A/E firm may be called upon to per-
form during the RI/FS may vary considerably, depending
upon the conditions at the site. They may include the
following:
Compile existing site information
Prepare project operations plans, including the
health and safety, sampling and analysis, site
management, and community relations plans
Incorporate the existing information and project
operations plans into the detailed scope of work
for the RI/FS
Prepare complete and detailed site maps
Characterize wastes present on-site in drums,
tanks, pits, lagoons, etc.
Conduct a sampling and analysis program to define
the extent of the contamination present at the
site and its environs
Perform an endangerment assessment
Perform pilot and bench scale treatability studies
Issue an RI Report
Identify available remedial technology alternatives
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9375.1-5
Analyze alternatives for technical feasibility,
exposure and risk, environmental effects, compli-
ance with government regulations, and cost
Issue an FS Report
Assist in preparation of the ROD
Prepare the Pre-Design Report, including concep-
tual site plans, outline specifications, prelimi-
nary schedule, and projected cost estimates.
A model SOW for an RI/FS and additional discussion can be
found in Appendix E of Volume I of this manual. Guidance
on RIs and FSs is provided in the Superfund program's
documents Guidance on Remedial Investigations Under
CERCLA, OERR, June 1985, and Guidance on Feasibility
Studies Under CERCLA, OERR, June 1985.
B. REMEDIAL DESIGN
After the RI/FS is completed and the ROD is issued,
the remedial action can be designed. To conduct this
design, the State may use the same A/E firm, as described
in Section D of the previous chapter, or may procure the
services of a different A/E firm. If the State chooses
the latter option, it must conduct the necessary procure-
ment action using the procedures outlined in Chapter III
of this document.
All available information gathered during the RI/FS is
used to develop the preliminary design. Preparation of
the design then is begun and an evaluation is performed to
determine whether any additional data are needed to move
into the final design phase. A design memorandum is sub-
mitted to the State to provide a summary of the design
parameters, the facilities to be designed, and the esti-
mated construction costs. This informs the State of the
direction the engineer intends to take in developing the
design. The products of an engineering design include
detailed construction drawings and precise and complete
technical specifications. The engineering firm should
utilize some form of internal technical review to ensure
the constructability/operability of the design and to
conduct value engineering screens of potential remedies
for the site. In addition, the A/E firm conducting the
design can play a major role in obtaining any permits
necessary to implement the remedial response.
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9375.1-5
Specific types of services that the A/E firm perform-
ing the design may be required to provide will vary con-
siderably, depending on the project at hand. Tasks as-
signed to the design firm may include the following:
Develop preliminary design and performance cri-
teria (if laboratory services are required, QA/QC
procedures must be established and followed; see
Appendix L of Volume I)
Conduct subsurface investigations and/or a sam-
pling program, if necessary to supplement data
gathered during the RI/FS
Conduct site surveys
Prepare the design memorandum
Prepare detailed construction drawings and techni-
cal specifications
Conduct pilot and bench scale treatability studies
Determine bidding and subagreement administration
requirements
Prepare a probable estimate of construction costs
Perform value engineering
Conduct initial constructability/operability re-
views of the design
Prepare an initial O&M plan
Assist in obtaining permits
Attend progress meetings and prepare progress
reports
Develop the preliminary construction schedule
Participate in the public information/community
relations program.
Additional guidance on specific procedures for RDs may be
found in Superfund Remedial Design and Remedial Action
Guidance, OERR, February 1985.
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9375.1-5
C. TECHNICAL BIDDABILITY AND CONSTRUCTABILITY REVIEW
After the design documents have been substantially
completed, the State can begin to develop the subagreement
bid documents to procure the construction contractor, as
described in Section V.B of this volume. Bid documents
include the solicitation itself as well as the subagree-
ment documents. These are highly technical in nature,
outlining all requirements for the proposed project, and
provide the basis for the contractors' bids for the
project.
It is vital, therefore, that the State subject its bid
documents to a rigorous biddability/constructability re-
view prior to initiating the procurement action. This
will help to avoid bid protests and also should reduce the
need for change orders and the potential for claims.
Biddability/constructability reviews should examine the
accuracy and adequacy of the construction specifications,
schedule, estimates of quantities and types of materials,
and cost estimates; they also should ensure that the sub-
agreement bid documents present project requirements in a
clear, coherent manner.
The State" has several options for performing this type
of review: it may choose to do so itself, may request the
assistance of the COE through EPA (both of which are dis-
cussed in Section V.C of this document), or may secure the
services of an A/E firm. If the State uses an A/E firm,
it must procure a firm other than the contractor that de-
veloped the design, since this review must be independent.
Specific services that the State may request an A/E
firm to provide in conducting a biddability/construct-
ability review may include the following:
Review construction administration procedures,
such as for payments, construction document con-
trol, change orders, shop drawings, and submittal
of O&M data
Review technical drawings and specifications for
coordination, accuracy, adequacy, and clarity
Review estimated construction schedule and duration
Volume II/IV-7
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9375.1-5
Review start-up and operational testing
requirements
Review overall control of work and coordination
with subagreement provisions
Review cost estimates
Prepare summary of recommended changes to sub-
agreement documents, together with estimates of
affects on costs
Review adequacy of occupancy and acceptance
procedures
Review bidding documents
Review instructions to bidders for accuracy, com-
pleteness, and compliance
Review construction subagreement documents for
compliance with applicable regulations.
Specific procedures that States may use to request EPA
assistance to conduct biddability/constructability reviews
may be found in Section C of the following chapter. Addi-
tional guidance may be found in Superfund Remedial Design
and Remedial Action Guidance, OERR, February 1985.
D. BID PHASE S
Use of an A/E firm during procurement of a construc-
tion contractor can provide the State with the experience
necessary to ensure that all tasks associated with the
bidding are performed properly. The State may use an A/E
firm to prepare the text of the solicitation for bids; to
ensure that as many steps as possible are taken to conduct
competitive bidding to include women's and minority busi-
ness enterprises (WBEs/MBEs) and other qualified firms; to
conduct a pre-bid conference; to prepare and issue any
necessary addenda to the bid documents; to direct the bid
opening; to assist the State in evaluating the apparent
low bidder and recommending contract award; and to assist
in the resolution of any bid protests.
Specific tasks that the State may request the A/E firm
to perform during oversight of construction contractor
procurement include the following:
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9375.1-5
Prepare the text for solicitation for bids
(advertisement)
Conduct the final biddability/constructability
review of the design prepared by another A/E firm,
including the plans and technical specifications
Conduct claims mitigation review of construction
subagreement documents
Develop and assemble the final subagreement
documents
Issue the solicitation for bids by public notice
and to the reference list of qualified bidders,
MBEs, and WBEs
Advise MBE/WBE agencies and construction trade
agencies of the solicitation
Distribute bidding and subagreement documents to
prospective bidders
Distribute lists of prospective bidders to all
plan holders
Conduct a pre-bid conference
Attend progress meetings and prepare progress
reports
Review requests for clarification of documents;
prepare and issue modifications to documents by
addenda
Conduct the bid opening and tabulate the bids
Evaluate the qualifications, financial stability,
and responsiveness of the apparent low bidder
Prepare the recommendation for award of the
subagreement
Assist in the resolution of any bid protests
Participate in the public information/community
relations program.
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9375.1-5
Procedures for solicitation and evaluation of any bids
received are found in Sections D through F of the follow-
ing chapter. See Superfund Remedial Design and Remedial
Action Guidance, OERR, February 1985, for additional
information.
E. CONSTRUCTION OVERSIGHT SERVICES
During construction, the State may use an A/E firm to
act as the State's designated agent to administer the con-
struction subagreement. The A/E firm may provide a var-
iety of services during this phase of remedial response.
Among these may be full-time, on-site inspection, coordin-
ation of materials testing, and review of shop drawings to
ensure that materials and equipment used comply with the
requirements in the subagreements. A/E firms also may
administer change orders to the subagreement, monitor con-
struction progress compared to the construction contrac-
tor's schedule, conduct regular progress meetings, respond
to questions from the construction contractor concerning
the intent of the subagreement documents, and provide
other services to minimize conflicts between the parties
of the subagreement and avoid or resolve claims.
Among the specific tasks that the State may request
its A/E firm to perform as part of construction oversight
are the following:
Prepare construction subagreement documents for
execution
Conduct a pre-construction conference
Conduct periodic site investigations during con-
struction or provide full-time, on-site inspection
Review shop drawings
Administer the construction subagreement and any
change orders
Coordinate materials testing
Review and certify construction contractor re-
quests for payment
Conduct substantial completion and final comple-
tion inspections
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9375.1-5
Conduct periodic progress meetings
Prepare record documents
Monitor the construction contractor's schedule of
construction progress
Maintain complete project records
Respond to requests for information or clarifica-
tion of construction subagreement documents from
the construction contractor
Coordinate construction activities with Federal,
State, and local agencies
Attend progress meetings and prepare monthly pro-
gress reports on the construction
Assist the State in managing change orders
Evaluate claims
Participate in the public information/community
relations program
Prepare the final technical report at the conclu-
sion of the remedial action.
Additional guidance can be found in the document Superfund
Remedial Design and Remedial Action Guidance, OERR,
February 1985.
F. CLAIMS
Occasionally, despite careful project management,
claims will arise that the State cannot resolve easily. If
negotiation does not bring about a settlement, the claim
must be carried into either mediation, arbitration, or
litigation. The State can use an A/E firm to help evalu-
ate the merits of claims and to provide technical exper-
tise during the formal resolution process. In many cases,
claims involve matters of law which require evaluation by
an attorney. In this case, States should seek expert
legal advice; it is not advisable for States to defend
themselves against claims brought by contractors who are
represented by legal counsel without the benefit of legal
assistance.
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9375.1-5
Specific tasks that A/E firms may conduct in assisting
States in claims defense include:
Develop an as-built construction schedule and
evaluate it against the planned schedule
Evaluate subagreement language to determine the
design intent as compared to claimed extra work
Evaluate direct costs of claimed extra work
Evaluate the construction contractor's accounting
of overhead costs and the allocation of such costs
to the project
Issue written recommendations concerning the
merits of any claims filed, except when there is
an apparant conflict of interest
Develop a negotiating strategy for claims mitiga-
tion or defense, except when there is an apparant
conflict of interest
Represent the State as an "expert witness," if
required.
A more comprehensive discussion of claims can be found in
Chapter VI of this document.
G. OPERATION AND MAINTENANCE
The State may procure the services of a firm to
implement O&M, consistent with the terms and conditions of
the Cooperative Agreement and 40 CFR Part 33 at the
conclusion of remedial action. The State also may obtain
an A/E firm at this time to conduct the following:
Review and revise the preliminary O&M plan
Evaluate operating staff members' needs
Develop instructional materials and conduct
on-site training programs
Develop maintenance management programs
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9375.1-5
Assist during initial start-up and operational
testing ' " I
' ', ' '•
Develop sampling and analysis programs
: i
Develop records management systems • "
(.\ • ' •• :1
Prepare detailed O&M manuals
Assist in-developing initial O&M budgets
Assist in developing safety and emergency response
programs
Participate in the public information/community
relations program
Assist in the procurement of a firm to conduct O&M*
Prepare the final technical report at the conclu-
sion of the cost-sharing period for O&M
Attend progress meetings and submit progress
reports.
Specific tasks may differ, depending on the requirements
of the site. Additional guidance on O&M plans is provided
in Chapter III, Volume I of this document, and in
Superfund Remedial Design and Remedial Action Guidance,
OERR, February 1985.
Subagreements for construction management must be pro-
perly coordinated with subagreements for the construction
services. The following chapter — Chapter V - Procure-
ment of Construction Services — provides guidance for
If the State wishes to retain a firm to conduct O&M
after Federal assistance ends, it may do so under the
terms of its own State procurement requirements, since
EPA does not share in the costs of O&M beyond the
one-year period.
Volume II/IV-13
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9375.1-5
procuring the use of such construction contractors; it
shows where the A/E oversight firms fit into the construc-
tion procurement process and details how this integration
can occur. In addition, after the State has awarded a
subagreement for either remedial planning activities or
construction management, as discussed in this chapter, it
must exercise proper administration procedures to ensure
that the work is implemented in a timely manner and to
help reduce the likelihood of any procurement problems,
such as change orders and claims. Chapter VI - Subagree-
ment Administration provides guidance for proper subagree-
ment administration.
«•«•
ss
Bashing*011
U.S. GOVERNMENT PRINTING OFFICE : 1986 O - 151-911
-------
9375.1-5
V. PROCUREMENT OF CONSTRUCTION SERVICES
-------
9375.1-5
V. PROCUREMENT OF CONSTRUCTION SERVICES
The required method of procuring construction services
during Superfund remedial response is formal advertising
(40 CFR 33.405-33.430). Formal advertising involves the
public solicitation of sealed bids and the award of a
subagreement based on a fixed fee (lump sum, unit price,
or a combination of the two) to the lowest, responsive,
responsible bidder. Formal advertising also requires the
recipient to give adequate public notice of the solicita-
tion inviting bids and to state when and how prospective
bidders may obtain and examine the bidding documents, in-
cluding the subagreement documents. A graphic representa-
tion of this process is presented on the following page as
Exhibit II/V-1.
This chapter provides guidance on the formal ad-
vertising method as it applies to procuring Superfund con-
struction contractors, especially during remedial im-
plementation. Within this framework, it specifically
discusses each of the steps that constitute procurement of
construction services, and potential complications for
this process, in a separate section:
Section A - Development of cost estimates for
construction
Section B - Preparation of subagreement documents
Section C - Technical biddability/constructa-
bility review of the subagreement documents
Section D - Solicitation of bids
Section E - Evaluation of bids
Section F - Bid protests
Section G - Subagreement award.
To provide the maximum benefit to manual users, Section B
contains a detailed discussion of the technical components
of subagreement documents, as well as the process for
preparing them.
Volume II/V-l
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EXHIBIT M/V-1
CONSTRUCTION CONTRACTOR PROCUREMENT PROCEDURES
9375.1-5
I
Is)
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9375.1-5
While the State retains ultimate responsibility for
ensuring that the procurement is conducted properly, it
has several options for preparing and reviewing the
necessary documentation, evaluating the bids, and over-
seeing the procurement process. It may choose to retain
sole responsibility for procurement while consulting with
EPA as necessary; it may request EPA to obtain the assis-
tance of the U.S. Army Corps of Engineers (COE) at appro-
priate points in the procurement process; it may retain
the services of a management firm; or it may use an archi-
tectural and engineering (A/E) firm to oversee procure-
ment. In any case, the procedures contained in this
chapter apply. Details on the types of services that an
A/E firm can be requested to provide during remedial con-
struction are discussed in Chapter IV of this document.
A. DEVELOPMENT OF COST ESTIMATES FOR CONSTRUCTION
The first step in obtaining a construction contractor
is the development of an accurate total cost estimate for
the project. This is essential to ensure adequate funding
for a remedial action. Preparation of a set of high
quality construction plans and specifications for the
project, discussed in the following section of this
chapter, is inadequate unless the project cost estimate is
prepared to the same standards. For most projects, the
final project cost estimate should be within +15 percent
to -10 percent of the actual cost. The total costs should
factor in supervision and administration, and engineering
and design costs during construction; these are calculated
as a percentage of the actual estimated project costs and
together should range between 7 and 9.5 percent (see
Section III.A.2 of Volume I).
The State also should establish a contingency fund for
each site-specific remedial action project to cover un-
foreseen cost variances which may occur prior to or during
construction. Contingencies should be included as part of
the total costs. Contingency funding for State-lead reme-
dial action projects is actually a two-stage process.
First, the State should establish a bid contingency to
cover variances in cost that may arise before construction
commences. This bid contingency should be included in the
Cooperative Agreement funding the project, and is usually
equal to 15 percent of the actual project cost estimate.
Any amount of the bid contingency not needed to cover var-
iances prior to construction then could be moved to a con-
struction contingency, used to cover variances caused by
Volume II/V-3
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9375.1-5
change orders approved during the course of the remedial
action.
In addition, the Region's Superfund Comprehensive
Accomplishments Plan (SCAP) contingency will retain a
construction contingency, equal to 8 to 10 percent of the
project cost, for each remedial action project. If, at
the conclusion of the construction contract bidding
process the State does not have sufficient funds to es-
tablish a construction contingency fund within the 8 to 10
percent range, the State may request the Region to amend
the Cooperative Agreement to add funds for this purpose
from the Regional SCAP contingency. A more detailed dis-
cussion of this subject can be found in Chapter 2 of the
document, Superfund Remedial Design and Remedial Action
Guidance, Office of Emergency and Remedial Response
(OERR), February 1985.
B. PREPARATION OF SUBAGREEMENT DOCUMENTS
After the construction cost estimates are made, the
State can prepare the subagreement documents. These will
be made available to prospective bidders as part of the
bid documents, along with the solicitations for the proj-
ect, and will provide specific information upon which the
construction firms can base their bids. After a sub-
agreement has been awarded, these subagreement documents
will be signed to execute the subagreement. A State can
expedite the procurement process and minimize or avoid bid
protests, change orders, and claims by developing high
quality, unambiguous subagreement documents that contain a
clear and accurate description of the technical require-
ments of the remedial action project, as detailed in 40
CFR 33.255 and 33.420.
Subagreement documents include plans, specifications,
form of subagreement, and. all other documents upon which
the remedial action contractor relies to form his bid.
They designate the quality, quantity, and arrangement of
materials and equipment, and specify the methods by which
these materials and equipment are to be assembled at the
job site. They contain a statement of the price to be
paid, payment terms, and time allowed to complete the work
specified. Subagreement documents also provide a descrip-
tion of the terms and conditions of the subagreement to be
awarded and an explanation of the procedures for bidding,
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9375.1-5
evaluating bids, and awarding the remedial action sub-
agreement. As such, they must provide complete, accurate
information on all requirements that will be placed on a
construction firm in the course of remedial action.
Subagreement documents must be technically adequate
and complete to promote cost-competitive bids while en-
suring on-time completion of the project within budget.
Failure to adequately prepare construction bid documents
increases the possibility for bid protests, change orders,
and claims for additional compensation. Therefore, it is
especially important that States be aware of the necessary
contents for these documents. To provide States with a
tool to help ensure that the bid documents are complete,
Exhibit II/V-2, on the following page, is a sample check-
list of contents for adequate construction subagreement
documents.
The State has two options in preparing construction
subagreement documents. It may choose to prepare them
itself, in which case it may request assistance from EPA
and, through EPA, from the COE. If the State chooses the
other option, it either may use the services of the A/E
firm that developed the design or may obtain an inde-
pendent A/E firm to prepare the documents. This latter
option is described in Section B of the previous chapter.
To date, these documents typically have been prepared by
the A/E firm that developed the remedial design.
This section provides detailed guidance on the con-
tents of high quality, complete subagreement documents.
It is equally applicable whether the State prepares such
documents or retains an A/E firm to do so.
B.l Subagreement Provisions
The construction subagreement documents must display
the provisions that will be in the subagreement upon its
execution. Several specific requirements apply to the
necessary contents of the subagreement documents. First,
States, in each subagreement, must include clauses that
meet the intent of 40 CFR 33.1015-33.1021. These sections
contain requirements for:
Subagreement provisions (33.1015)
Labor standards (33.1016)
Patents data and copyrights (33.1019)
Violating facilities (33.1020)
Energy efficiency (33.1021).
Volume II/V-5
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9375.1-5
EXHIBIT II/V-2
SAMPLE CHECKLIST OF
CONSTRUCTION SUBAGREEMENT BID DOCUMENT CONTENTS
Index of Subagreement Bid Documents
Advertisement for Bids
Instructions to Bidders
Bid Form
Addenda Acknowledgement
Bid Bond or Bid Security Form
Certificate of Surety
Acknowledgement of Principal Form
Non-Collusion Affidavit
Certification of Nondiscrimination in Employment
Certification of Nonsegregated Facilities
Authority to Execute Subagreement
Form of Subagreement
Performance Bond Form
Payment Bond Form
Certificate of Ability to Obtain Insurance
General Conditions of the Subagreement
Supplemental General Conditions of the Subagreement
Federal Requirements and Subagreement Provisions
Davis-Bacon Wage Rate Determination
General Subagreement Requirements
Scope of Work
Control of Materials
Utility Coordination Requirements
Project Supervision Requirements
On-Site Inspection Procedures
Safety Requirements and Responsibilities
Emergency Procedures
Progress Schedule and Report Requirements
Payment Procedures (Measurement and Payment)
Change Order Administration Procedures
Correspondence Distribution
Submittal, Processing Procedures
Material and Equipment Storage Requirements
Technical Specifications
Drawings and Plans (certified by a registered professional
engineer)
Supplemental Data (e.g., geologic data, hydrologic data)
Volume II/V-6
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9375.1-5
Second, States must include the appropriate clauses from
40 CFR 33.1030, or their equivalent, in all subagree-
ments. These clauses contain State and contractor
responsibilities for:
Changes
Differing site conditions
Suspension of work
Remedies
Price reduction for defective cost or pricing data
Audit and access to records
Covenant against contingent fees
Gratuities
Contractor responsibilities
Termination
Final payment
Supersession
Privity of subagreement.
States must be sure to include all subagreement provisions
that will be applicable to the project.
B.2 Specifications
In developing technical specifications for proposed
remedial action projects, the State must incorporate a
clear and accurate description of the technical require-
ments for any necessary materials, products, or services,
along with the required performance schedule. States are
required to avoid the use of detailed product specifi-
cations if at all possible. If the State judges it to be
impractical or uneconomical to clearly and accurately de-
scribe technical requirements, it may use a "brand name or
equal" description to define expected performance or other
technical requirements. The State must clearly describe,
in the technical specifications for projects for which it
is requesting bids, the salient requirements of the named
brand which must be met by offerers (40 CFR 33.255).
B.3 Bonds and Insurance
In accordance with 40 CFR 33.265, States must require
remedial action contractors to furnish bonds as a guaran-
tee of faithful subagreement performance. Remedial con-
tractors also must provide insurance for accidents and
catastrophic loss to manage any risk inherent in com-
pleting the project. Therefore, bonds and insurance re-
quirements must be clearly and accurately stated in the
Volume II/V-7
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9375.1-5
subagreement bid documents, including the amounts of
security and coverage that bidders will be required to
provide.
B.3.a Bonds
Bonds are a form of surety that includes bid bonds,
performance bonds, and payment bonds. For construction
under $100,000, States must follow their own requirements
for bonding. For construction subagreements over
$100,000, States must meet the intent of the EPA bonding
requirements, articulated in 40 CFR Part 33. The EPA
Award Official may accept the State's bonding policy,
however, if it is equivalent to the EPA requirements.
In accordance with 40 CFR 33.265, States must require
construction contractors to furnish bonds as a guarantee
of faithful performance of the subagreement. These bond
requirements must be stated clearly in the construction
subagreement documents, as follows:
Each bidder shall provide a bid guarantee
equivalent to five percent of the bid price. The
bid guarantee shall consist of a firm commitment
such as a bid bond, certified check, or other
negotiable instrument, accompanying a bid as
assurance that the bidder, upon acceptance of the
bid, will execute such contractual documents as
the State may require within the time specified.
The contractor shall provide a performance bond
equivalent to the subagreement price. The per-
formance bond is required to secure fulfillment
of all the contractor's obligations under the
subagreement.
The contractor also shall provide a payment bond
of 100 percent of the subagreement price. The
contractor executes the payment bond in
connection with the subagreement to assure
payment, as required by law, to all persons
supplying labor and materials in execution of the
work provided for in the subagreement.
Whenever bonds are required, bidders and contractors shall
obtain them from companies holding certificates of
authority as acceptable sureties (31 CFR Part 223).
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9375.1-5
B.3.b Insurance
The State should not execute a subagreement until the
contractor has offered sufficient certification that all
contractual insurance requirements have been fulfilled.
Contractors must be aware of the insurance requirements
that pertain to the remedial action construction project
for which they are submitting a bid; the construction
subagreement documents, therefore, must coherently present
the specific types of insurance needed.
Insurance normally required for remedial action
activities includes the following:
Insurance coverage needed by a contractor —
engineering or construction — to protect itself
from direct losses, including:
Property damage
Burglary, robbery, and theft
- Dishonesty of employees through forgery or
embezzlement
Builder's risk (with the State as the named
insured)
Insurance coverage needed by a contractor —
engineering or construction — to protect itself
against claims by third parties, including:
Contractor's public liability
Contractor's protective liability
- Contractual liability
Completed operation/premises liability
- Worker's compensation liability
Comprehensive general liability, bodily injury,
and third party property damage
Vehicle liability — when vehicles are used in the
performance of the subagreement — for collision
liability and protection and indemnity liability
Insurance provided by a contractor to protect the
State, including the State's protective liability
and coverage for damage to State property not
otherwise protected.
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9375.1-5
In addition, for work within a special flood hazard area,
the State and contractor must comply with the Flood
Disaster Protection Act of 1973. If the site is within a
special flood hazard area, the construction contractor
must be covered by flood insurance.
Most insurance coverages can be combined so that all
contemplated risks of each classification are covered
under one comprehensive policy. States should seek expert
advice in identifying the required types and amounts of
insurance for each remedial response subagreement.
When the State requires a contractor to provide insur-
ance, the policies should contain an endorsement that any
cancellation or significant change will not be allowed
unless the insurer and the contractor provide written
notice to the State.
Generally, under the Superfund program, contractors
are reimbursed for the reasonable portion of their in-
surance allowable to the subagreement work. (See 48 CFR
31.2 for additional information on such insurance require-
ments.) Insurance requirements eligible for funding must
be specified in the Cooperative Agreement; this includes
Environmental Impairment Liability Insurance. The Agency
recognizes that in some instances requirements for
Environmental Impairment Liability Insurance may limit
competition on remedial response projects. Those firms
that can spread the cost of the associated premiums over
several projects may be more able to keep costs reason-
able, while firms that cannot do this must include the
full cost of such insurance in their bid packages and thus
in many cases are not the lowest bidder. EPA currently is
investigating this issue and will amend this section to
provide additional guidance.
B.4 Payment Terms
EPA and State commitments for transfer of funds under
a Cooperative Agreement and for the drawdown and use of
these funds are detailed in Chapters III and VII of Volume
I of this manual. States are required to develop budgets
to ensure that sufficient funds are allocated for the
project and that they meet EPA financial management needs.
Individual subagreement documents must detail the
payment terms that will govern provision of compensation
Volume II/V-10
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9375.1-5
to State contractors. States usually choose to compensate
contractors using progress payments, whereby the State
provides money to its contractor as portions of the work
are completed. Procedures governing progress payments and
State retainage of progress payments are determined by
individual State laws. In general, progress payments may
be made for the amount and value of services and/or con-
struction work performed; for materials and equipment de-
livered to, or stored near, the project site; and for
undelivered items or materials specifically manufactured
for the subagreement, provided that the appropriate in-
surance, security, and protection of Federal and State
interests are included in accordance with the agreement
documents.
Any State or EPA requirements for documentation to
accompany contractor payment requests must be clearly
described in the subagreement documents. Specific docu-
mentation requested by the State may include progress
reports of services performed as of the date of the re-
quest for payment (usually required for engineering
services), periodic construction progress reports (usually
prepared by the on-site representative on a remedial
action project), and updated construction schedules
(usually developed and maintained by construction
contractors).
In addition, subagreement documents must specifically
describe terms for final payment. These should include
the following items:
Definition of satisfactory completion of all
services and deliverables for engineering sub-
agreements
Requirements for final inspections, certifica-
tions, and warranties, as well as for transfer of
responsibility and liability for construction
subagreements (see Appendix F of Volume I for a
discussion of final inspection and certification)
Requirements for release of retainages, including
those that are contingent upon EPA audit, if any
Means for resolving disputes and claims under the
terms of the subagreement
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9375.1-5
Final accounting of all payments, including modi-
fications to the subagreement price as a result of
change order agreements.
These are requirements of the final payment subagreement
clause, contained in 40 CFR 33.1030.
B.5 Project Control Matters
To properly administer a remedial response project,
the subagreement documents must specify the procedures
that the State will use to monitor performance under the
subagreement. Such procedures and requirements should be
detailed in the general requirements section of the sub-
agreement, and may include the following:
Project meetings, including pre-planning, pre-
design, and pre-construction conferences and
periodic progress meetings
Progress schedule development and periodic update
reports
Submittal review procedures
Procedures for payment
Change order administration procedures
Testing and laboratory services requirements
Instructions for preparing record documents
Subagreement closeout procedures
Roles and limitations of responsibility of
contracting parties.
Descriptions of these procedures and requirements in the
subagreement documents help ensure that the contractor is
advised of administrative needs. Contractors thus can
provide an adequate allowance in the proposed fee or bid
price for the costs and potential schedule effects re-
sulting from these requirements.
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9375.1-5
B.6 Schedule Requirements
The subagreement documents should require the selected
contractor to prepare, submit, and update a progress sched-
ule for the proposed project. An accurate, updated con-
struction schedule plan is critical to the State's ability
to monitor contractor progress, to evaluate requests for
additional time and money to complete any work beyond the
original subagreement terms, and to forecast the financial
(i.e., cash flow) needs of the project. Specifically, the
schedule can be used to:
Define the contractor's proposed work plan,
showing the order in which the contractor intends
to perform the work
Identify the dates upon which the contractor
intends to start and complete each of the major
components of the work
Identify the dates for submittals and reviews of
submittals
Identify schedules for procurement of materials
and equipment to be used in the work
Assist in determining rates of progress in
completing the work to determine when to make
periodic progress payments.
Subagreement documents should include, as a minimum:
A description of the type of schedule that the
contractor will be required to provide (e.g., bar
chart, Gantt chart, critical path method)
Requirements for updating the schedule, including
periodic analyses of progress, to be submitted in
conjunction with, and as a condition of, the con-
tractor's applications for payment
A description of the relationship of the schedule
to such considerations as pending or authorized
change orders and claims, and threatened or
pending suspension and/or termination of the work
of the subagreement.
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9375.1-5
The State may choose to include additional requirements,
as necessary. Potential contractors will factor time and
resource requirements for schedule development and updates
into their bids for the construction subagreement.
B.7 Change Order Provisions
An important consideration to be addressed in these
documents is administrative requirements for changes in
the subagreement scope of work. Thorough, expert pre-
paration of subagreement language concerning change orders
is of critical importance in controlling project costs,
promoting satisfactory project progress, and reducing the
potential for claims and litigation. The subagreement
documents must:
Clearly describe how additions, deletions, or
revisions in the work may be made without in-
validating the subagreement
Define exactly what is meant by a change order;
for example, by specifying conditions that would
warrant a change order
Describe the procedures to be followed in pre-
paring change order documents, including the form
and content of the initial request for changes in
the work, as well as required documentation of the
accepted change
Include a statement covering subsequent recourse
should the contracting parties not be able to
reach agreement on a proposed change.
The documents also must specify any required limitations
to increases in the subagreement price and/or extensions
of the subagreement period of performance.
B.8 Health and Safety Issues
Much of the work performed under remedial sub-
agreements, both engineering and construction, may be
inherently hazardous. States, therefore, must require
their contractors to satisfy all Federal, State, and local
statutes, regulations, and ordinances related to health
and safety practices. Contractors also must be required
to develop and submit to the State for review, a health
and safety plan for the specific project work. This key
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9375.1-5
subagreement requirement can be enforced by including in
the subagreement a provision specifying that payment will
be contingent upon the contractor's satisfactory com-
pliance with all applicable health and safety requirements.
States are required to have site health and safety
plans in place before field activities can commence;
specific discussion of this requirement is contained in
Appendix M of Volume I of this manual. Normally, States
will engage a contractor for technical services to develop
their health and safety plans.
B.9 Subagreement Close-Out Requirements
The subagreement documents should contain a concise
description of how the State will determine that work has
been completed satisfactorily in accordance with the terms
of the subagreement. The documents must specify such
items as:
The manner in which the project will be determined
to be substantially complete
A description of the contractor's liabilities and
responsibilities at the time of substantial com-
pletion, including any operation and maintenance
(O&M) procedures to be performed by the contractor
at the site
The State's liabilities and responsibilities at
the time of substantial completion of the project,
including any site O&M procedures to be performed
by the State
Requirements for final inspection
Requirements for submission of a final technical
report
Procedures for applying for and receiving final
payment
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9375.1-5
A description of the contractor's continuing
obligations subsequent to subagreement completion;
this may include, for example, warranties, guaran-
tees, and, often for remedial action projects, a
one-year warranty and maintenance of the surety
bond to guarantee adequate performance of the
project's facilities.
Under Cooperative Agreements, States are required to
submit a remedial action report which documents that the
criteria established in the feasibility study (FS) and the
Record of Decision (ROD) have been met. States generally
will rely on the A/E firm that it has engaged to develop
this report. Therefore, as a provision in the
subagreement documents, a State should require the
construction contractor to provide the information
necessary to prepare the remedial action report for EPA.
A State must carefully and clearly define its requirements
for developing this report. This is especially
significant for future deletion of the site from the
National Priorities List; if EPA does not delete a site
due to inadequacies in the State's remedial action report,
the State may have to reinitiate procurement to correct
the problem.
C. TECHNICAL BIDDABILITY AND CONSTRUCTABILITY REVIEW
States should consider having their bid documents for
remedial action projects subjected to an independent
biddability/constructability review, after design is
substantially complete, as a method of preventing bid
protests. Such technical assistance should contribute to
the efficient, effective implementation of remedial
activities.
A biddability/constructability review for remedial
action generally:
Reviews the accuracy of the construction speci-
fications and cost estimates
Determines whether currently accepted construction
practices and techniques are being used
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9375.1-5
Determines the adequacy of the proposed components
of the quality assurance project plan, the draft
O&M Plan, and the site safety specifications
Determines whether the bid schedule included in
the specifications will enable the construction
contractor to submit a fair and reasonable bid
Determines the accuracy of any estimated quan-
tities of material specified in the design
Determines that the responsibilities and liabili-
ties of the construction contractor and the State
are clearly defined and detailed in the design
documents.
Tasks that may be required during biddability/con-
structability review are detailed in Section D of the
previous chapter and in the document Superfund Remedial
Design and Remedial Action Guidance, OERR, February 1985.
The State may perform this review itself, may obtain
the service of an A/E firm to do so, or may request EPA to
secure the assistance of the COE to conduct biddability/
constructability reviews. COE reviews will occur con-
currently with any internal review the State may choose to
conduct and should not result in delays to the remedial
action procurement process. Because the COE routinely
performs remedial activities for Federal-lead remedial
sites, they are well qualified to perform biddability/
constructability reviews for Superfund remedial action
projects and their technical expertise should prove
extremely useful to a State. As a condition of the
Cooperative Agreement, EPA also may require the COE to
perform such a review for States whose projects EPA
considers to be technically complex or to have severe time
constraints.
A State may request COE review by contacting its
Regional- program office. The appropriate Remedial Project
Manager (RPM) will prepare a request for such a review
under EPA's technical assistance Inter-Agency Agreement
with the COE. The RPM should consider the cost of such a
review and incorporate it into the Region's SCAP estimates
at the beginning of the fiscal year. Should it prove
impossible to include the required costs in the SCAP, the
RPM ,may request use of funds from the Regional SCAP
contingency fund for remedial planning activities. The
Volume II/V-17
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9375.1-5
Headquarters SCAP contingency fund for remedial action
activities also can be used if all other options have been
considered and will not provide sufficient assistance.
Internal State reviews should use the same general
criteria as those performed by the COE. Biddability/
constructability review by an independent A/E firm is
discussed in Section IV.C of this volume.
D. SOLICITATION OF BIDS
When soliciting bids, States are required to give
adequate public notice of a proposed project. To
accomplish this the State should publish notifications in
daily newspapers and periodicals of sufficient circulation
to promote effective competition, such as newspapers with
a State-wide circulation and trade journals.
Information describing bidding procedures generally is
contained in several sections of the public notice of
solicitation and the bidding documents for the project.
States must ensure that the bidding documents are clearly
written, explicit, and internally consistent as described
above. The documents must include the following elements:
A statement giving adequate public notice of the
solicitation, inviting bids, describing the work
required for the project, and explaining when and
how the subagreement documents may be obtained or
examined (40 CFR 33.410)
The requested scope of services
Requirements for using minority and women's
business enterprises
Instructions to bidders
A clear explanation of the recipient's methods of
bidding and of evaluating bid prices, and the
State's basis and method for awarding the
subagreement (40 CFR 30.420(c))
The deadline (date and time) and place to submit
bids (40 CFR 33.420(f))
The required bid form (or proposal)
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9375.1-5
The date, time, and place at which the bids will
be publicly opened and read (40 CFR 33.425)
Representations and certifications
Names of persons to contact with questions
Measurement and payment requirements
General (and supplementary) conditions of the
subagreement.
For complex subagreements or where unique circumstances
require, the State may wish to conduct a pre-bid
conference. At the pre-bid conference, bidding procedures
are explained and prospective bidders are given the
opportunity to raise questions about the project.
E. EVALUATION OF BIDS
Bids are received in sealed envelopes from prospective
contractors and are opened publicly at the date and time
specified in the solicitation (40 CFR 33.425). Bids are
reviewed for general responsiveness to the bid solici-
tation and the name and amount of each bid is read aloud.
The State must uniformly and objectively evaluate all
bids submitted in response to a solicitation, to award the
subagreement to the lowest, responsive, responsible bidder
(40 CFR 33.430). In doing so, the State must use the
methods and criteria described in the subagreement docu-
ments (40 CFR 33.515). This evaluation is intended to
fulfill two purposes. First, it confirms the bidder's
responsiveness to the contractual requirements of the
solicitation for bids. To be responsive, a bid must
constitute a definite and unqualified offer to meet all
material terms of the Invitation for Bids (IFB). Material
items are those that affect price, quality, quantity, or
delivery, or those that must be complied with at the risk
of rejection for nonresponsiveness. Exhibit II/V-3, on
the following page, provides a sample bid tabulation
checklist for confirming bidder responsiveness.
Second, the bid evaluation establishes the
responsibility, qualifications, and financial stability of
a bidder to perform the work of the project in accordance
with the subagreement documents, to the State's satis-
faction, and within the prescribed time. An evaluation of
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9375.1-5
PROJECT:
CONTRACT NO.:
BID DATE:
EXHIBIT ll/V-3
SAMPLE BID TABULATION CHECKLIST
Contractor
Total Bid Amount
State
Registration No.
Addenda
Acknowledged
Signature
•o
1
2
m
Compliance
Statement
Non-Collusion
Statement
u
Non-Discrimation
Statement
Experience
Statement
Power of
Attorney/Bond
Surety Co.
Statement
Surety Certificate
Comments
<
o
(D
ro
o
-------
9375.1-5
a bidder's responsibility must include consideration of
the following items:
Past (completed) project performance record and
current workload
A list of major equipment available for use, and
the extent of ownership interest in each item
Credit references from materials suppliers
Bank references
Insurance references
Bonding company references, including present
bond capacity
Qualifications of proposed subcontractors
Experience of the proposed job superintendent and
foremen
Verification that the contractor or its employees
have not been banned from assistance program
participation by EPA (i.e., review the U.S. EPA
Master List of Debarred, Suspended, and
Voluntarily Excluded Persons, available from
Regional grants offices and the Office of
Regional Counsel) (40 CFR 32.400).
Exhibit II/V-4, on the following page, depicts a sample
bid review checklist for evaluating a bidder's responsi-
bility. The State may obtain assistance from an A/E firm
in evaluating the bids, as described in Chapter IV, but
the State has full responsibility for ensuring that the
evaluation is conducted properly.
Two potential problems may be encountered in bid
reviews: bids may exceed the project budget stated in the
subagreement documents and solicitation, or bids may be
significantly less than the project budget. Both of these
are discussed below.
E.1 Bids Exceeding the Project Budget
Bids in excess of the project budget may result from
one or more of the following causes:
Volume II/V-21
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9375.1-5
EXHIBIT II/V-4
SAMPLE BID REVIEW CHECKLIST
FOR CONTRACTOR RESPONSIBILITY
Project: Contractor:
Bonding Company
Underwriter:
Local Agent:
Address:
Contact:
Telephone:
Years Affiliated:
Bond Capacity:
Bank
Name:
Address:
Contact:
Telephone:
Years Affiliated:
Insurance Company
Name:
Address:
Contact:
Telephone:
Years Affiliated:
Credit Reference (Materials Supplier);
Past Contracts;
Debarment - Is contractor, or a member of the contractor's firm,
included on EPA Master List of debarments?
Present Workload
Owner Description Engineer (Reference) Value ($)
Contract List
(3 years)
Equipment List
Resumes, Supt:
Foreman:
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9375.1-5
Subagre^ment documents may be incomplete, in-
accurate, or ambiguous, thus forcing the bidder
to add contingencies to the bid to cover the
uncertainty of expected performance.
An unreasonable period of time for completion of
the work may require an accelerated rate of
production at a higher project cost.
Construction specifications may be unduly re-
strictive, for example, by imposing unreasonable
or unfair conditions on the contractor or by
unnecessarily restricting methods of construction
and selection of materials and products.
An insufficient period of time between the
solicitation for bids (advertisement or request
for proposals (RFP)) and bid opening may prevent
careful analysis and preparation of bids or
proposals.
The responsibility for incomplete or uncertain
data affecting the work may have been placed on
the contractor, who then must include con-
tingencies in the bid to cover the cost of the
worst possible conditions. For example, speci-
fications that place unreasonable or technically
impossible performance criteria upon the con-
'%$$a$9f may result in bids that include un-
de^lrahle contingencies, such as for differing
^l^^i^nditions. States are reminded of the
requirement to include model subagreement clauses
in each subagreement (40 CFR 33.1030); the model
subagreement clause for differing site conditions
does not allow States to shift risk associated
with differing site conditions to contractors.
The original project budget may be in error com-
pared with the true market cost of completing the
work.
The State should consult with its A/E design firm when
bid prices significantly exceed estimates. If the lowest,
responsive bid received exceeds the amount anticipated in
the project budget, the State may, at its option, im-
plement one of the following actions:
Volume II/V-23
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9375.1-5
Reject all bids and revise the documents
(correcting any problems such as those noted
above and/or reducing the project scope) and
rebid the work
Augment the available project funds with non-EPA
funds
Request additional EPA financial assistance
(after pursuing other options).
If the State chooses to take deductive alternates (defined
as optional scope of work items clearly identified as such
in the bidding documents), it must ensure that all respon-
sive bids are reviewed under the revised bid formulation
and that deductive alternates have been taken in the exact
order shown in the IFB. The State also must ensure that
only sufficient deductive alternates have been taken to
reduce at least one of the bids to or below the amount of
funds available and the scope of the project remains
consistent with the original project description.
If the low bid still exceeds the amount of available
funds, the State may:
Augment the available project funds with non-EPA
funds
Reject all bids and ask the design engineer to
redesign the project, within the scope of the
ROD, to reduce the total project cost
Request additional EPA funding.
The last option requires the State to provide EPA with
documentation supporting the need for additional funding.
Such documentation must include written confirmation that
redesign of the project within the approved scope and
project schedule cannot reasonably be expected to suf-
ficiently reduce the cost of the project, and a certifica-
tion that the State cannot reasonably provide the addi-
tional funds required.
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9375.1-5
E.2 Bids Significantly Less Than the Project Budget
Bids significantly less than the project budget or out
of line with other bids can result from any of the
following causes:
Subagreement documents may be technically in-
complete or may not adequately describe the scope
of the project
The project budget may be overstated (overly
conservative)
The low bidder may have made a mathematical error
in the preparation of the bid or may have signi-
ficantly underestimated the scope of the project
The subagreement documents may be administra-
tively ambiguous on the subject of how the bid is
to be prepared
The low bidder may have purposely submitted an
unreasonably low bid in an attempt to "buy-in".
Buying-in means intentionally submitting an offer below
calculated costs, while anticipating an increase in the
subagreement amount after award (e.g., through unnecessary
or excessively priced change orders), or expecting to
receive follow-on subagreements that would result in the
recovery of losses incurred on a buy-in subagreement.
Preparation- of complete, accurate RFPs and bid.documents
that clearly describe the-scope of-services or work
require*'owr-rainirnize- buying-in benefits* and'tjantrol
additional costs after award.
If a bid mistake is discovered or suspected, the State
must request written verification of the bid amount in
question from the bidder, allowing the bidder adequate
time to respond. The bidder either may confirm the bid
amount by denying the error or may confirm the mistake and
request that the bid be either corrected or withdrawn. To
be allowed to correct a bid, the bidder must demonstrate
by clear and convincing evidence the existence of the
error, its nature, how it occurred, and the intended
amount. To withdraw a bid, the bidder must confirm the
existence of the error and how it occurred, and must re-
quest that the bid be withdrawn. Procedures for bid cor-
rection and withdrawal normally are included under an
"Instructions to Bidders" section of the bidding documents
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9375.1-5
States must carefully consider and document each
request for bid correction or withdrawal to ensure that
the integrity and legality of the bidding process is not
compromised and that the correction or withdrawal is not
unfair to other bidders. In many cases, if consistent
with State law, a State must waive minor informalities and
irregularities in the bid if doing so does not give a
bidder an identifiable advantage or benefit not enjoyed by
other bidders which would prejudice the subagreement award.
If the lowest bid is significantly less than the
project budget and the State has reasonably determined the
bidder to be responsive and responsible, the subagreement
should be awarded and the remaining funds used as a
contingency during construction. In this case, however,
States should be alert to the possibility of a "buy-in"
and should be prepared to administer the subagreement in a
manner that adequately controls change order costs.
F. BID PROTESTS
Bid protests are written complaints filed by parties
with a direct financial interest affected by the State's
procurement action. Complaints typically concern the
solicitation (e.g., content or wording of, or deficiencies
in, the IFB or RFP and in specifications) or the actual
award of subagreements. Bid protests may significantly
delay the initiation of a remedial project. Thus, in
order to reduce the likelihood of bid protests, it is
vital to ensure that solicitations for bids or proposals
be clear and unambiguous, and accurately present the
State's needs without unduly restricting competition.
A State is required to establish procedures to
promptly consider and resolve bid protests when they are
filed (40 CFR 33.1110). Although not required to do so, a
State generally should defer award of the subagreement and
delay initiation of remedial activities until it can make
a determination on the protest. If the State does not
defer the procurement, it assumes the risk that the EPA
Award Official may disallow the cost of the procurement
action(s) in question, in the event that a protest appeal
is filed and upheld. Upon the State's resolution of the
bid protest, all affected parties have seven calendar days
to file a protest appeal with the appropriate EPA counsel.
A protestor may file an appeal with EPA only after the
State has acted on the bid protest and the protestor has
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9375.1-5
exhausted all available administrative remedies at the
State level. Further, the protestor may file an appeal
only when the State's procurement action has adversely
affected the protestor's direct financial interests. A
subcontractor may file a protest appeal only for issues
relating to a contractor's award of a subcontract. The
administrative process for EPA's resolution of bid protest
appeals is contained in 40 CFR 33.1105-33.1145.
When EPA receives a protest appeal, the Agency will
request the State to defer award of the disputed sub-
agreement (40 CFR 33.1140). If the protestor does not
agree to a request from the State for a reasonable ex-
tension of the bid or bid bond period while the protest or
appeal is pending, the State or EPA can summarily dismiss
the protest or appeal.
EPA's review of protest appeals is limited to issues
arising under the provisions of 40 CFR Part 33 and from
alleged violations of State and local laws or ordinances
when EPA has determined that there is an overriding
Federal concern. EPA reviews the record considered by the
State and any additional information regarding the basis
of the appeal and renders a final decision (40 CFR
33.1130-33.1145). EPA's decision concerning a protest
appeal is the final EPA action on the subject. If a State
does not comply with EPA's determination, EPA may take
action against the State under 40 CFR Parts 30 and 32 (40
CFR 33.1145(1)).
G. SUBAGREEMENT AWARD
If the State has self-certified its procurement
methods to EPA and EPA has not exercised its authority to
review and approve the award prior to its being made (40
CFR 33 Subpart A), the State can issue a formal Notice of
Award to the contractor immediately after its selection as
a result of the bid evaluation. If the State is not
self-certified, EPA must be given the opportunity to
review the procurement actions taken by the State before
formal Notice of Award can be given. In addition to the
Notice of Award, the State must issue instructions to the
contractor regarding the execution of the subagreement and
the filing of insurance required for construction, as
detailed in the subagreement bid documents. At the time
of award, it is customary to provide each bidder with a
copy of the bid tabulation.
-------
9375.1-5
The State must properly administer the subagreement
for construction after its award to minimize the need for
change orders and to avoid claims. Procedures for effec-
tive subagreement administration are found in the fol-
lowing chapter, Chapter VI - Subaqreement Administration.
To provide assistance in overseeing the conduct of the
remedial action, the State may obtain the services of an
A/E firm, as detailed in Chapter IV - Engineering Services
During Remedial Response.
Volume II/V-28
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9325.1-5
VI. SUBAGREEMENT ADMINISTRATION
-------
9325.1-5
VI. SUBAGREEMENT ADMINISTRATION
Subagreements must be administered carefully to mini-
mize unnecessary change orders and avoid claims. Change
orders and claims are most likely to occur as part of
construction, but may happen at any phase of remedial
response. Major components of a good subagreement admin-
istration process are discussed in this chapter. Section
A provides guidance on holding a preliminary performance
planning conference after subagreement award, to inform
all key personnel of the roles and responsibilities of
each of the interested parties. Section B discusses the
submission of periodic progress reports to enable the
State to closely monitor the project and to be advised of
any problems that may develop. Section C considers issues
relating to change orders, including conditions that war-
rant change orders, change order evaluation, and change
order preparation. Finally, Section D addresses issues
relating to contractor claims.
A. PRELIMINARY PERFORMANCE PLANNING CONFERENCE
After award of a subagreement, the State should
arrange a conference with key contractor personnel to
explain subagreement requirements and administrative pro-
cedures. For construction subagreements, this meeting
typically is known as a pre-construction conference. For
engineering services associated with remedial design (RD),
this meeting usually is called a pre-design meeting.
Similar meetings should be held for the other phases of
remedial response.
These meetings are intended to promote efficient,
cost-effective mobilization of the work by:
Emphasizing applicable regulatory requirements
Setting the ground rules for working relation-
ships between State and contractor personnel
Identifying the responsibilities and authorities
of each party
Identifying interrelationships of contractors,
consultants, the State, the municipality, EPA,
the U.S. Army Corps of Engineers (COE), and other
involved parties
Volume II/VI-l
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9325.1-5
Highlighting critical subagreement requirements
Discussing project completion schedules or inter-
mediate milestones and any required coordination
between contractors
Discussing progress reporting and subagreement
payment procedures
Emphasizing requirements for such issues as com-
pliance with Federal, State, and local laws and
regulations, such as equal employment opportun-
ity, and for the use of minority, women's, small,
or disadvantaged business enterprises
Detailing subagreement change order procedures,
insurance bonding, and safety requirements.
Discussion of these items at an early stage of all sub-
agreements is critical to efficient and effective project
administration.
B. MONITORING WORK PROGRESS - PERIODIC PROGRESS REVIEW
EPA conducts an ongoing review of technical progress
to ensure that the State carries out its Cooperative
Agreement commitments. Therefore, all contractors using
EPA funds, providing engineering or construction services,
or performing some other service for the State, should
prepare reports on their activities. The State Project
Officer (SPO), then, can use these reports to keep EPA
informed about progress at the site. Monthly contractor
reports should advise the State of any anticipated prob-
lems in completing work within the terms (scope, time, and
amount) of each subagreement to ensure that the State and
EPA are involved early in their resolution.
The report should be brief and, at a minimum, should
include the following elements:
Project/Subagreement Identification Information:
project title; subagreement number; date of the
report; contractor's name; project phase/sub-
agreement type (whether the contractor is per-
forming services during the RD, biddability/
constructability review, bid, construction, or
operation and maintenance (O&M) phase of the
remedial activities); services offered (e.g.,
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9325.1-5
engineering, sample testing, well drilling, con-
struction, claims analysis/defense); and report-
ing period.
Cash Flow: original subagreement value; amount
of approved change orders; current subagreement
total; cumulative payments to the contractor to
date. The percentage of the current subagreement
amount paid to the contractor should be computed
and listed, and an estimate of the percentage of
the work that has been completed should be pro-
vided.
Schedule: original subagreement duration, in
days; original subagreement completion date;
number of days of approved time extensions; cur-
rent total days of approved subagreement duration
(including extensions); approved subagreement
completion date; days elapsed to date; percentage
of subagreement time expended.
Financial Impacts: the contractor should report
any issues pending or identified in the last
reporting period that may affect the subagreement
amount. This includes any pending change orders
or potential claims. The contractor should dis-
cuss the nature of the problems, proposed actions
for resolution or mitigation, and their eligibil-
ity for compensation under the State's Coopera-
tive Agreement.
Affect on Progress: the contractor should iden-
tify any activities that have fallen behind
schedule or any problems observed or expected
that may delay timely subagreement completion.
The contractor should discuss the nature of the
problems reported, proposed actions for their
resolution or mitigation, and their eligibility
for compensation under the State's Cooperative
Agreement.
Monthly progress reports should contain the specific in-
formation in the sample presented in Exhibit II/VI-1, on
the following page.
Contractor reports should form the basis of States'
quarterly reports to EPA required by the Cooperative
Agreement (discussed in further detail in Appendix F of
Volume I). States may wish to include copies of contrac-
tors' monthly reports as addenda to State quarterly
Volume II/VI-3
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EPA Project No.
Project Title
Subagreement No.
Contractor
Project Phase
(Subagreement)
EXHIBIT II/VI-1
SAMPLE MONTHLY PROGRESS REPORT
Report Date
9325.1-5
RI/FS
Bid
Design Constructability/Biddability
Construction O&M
(OTHER)
Services Offered
Reporting Period
CASH FLOW
From:
To:
A. Original Subagreement Amount $
B. Approved Change Orders $
C. Current Total
D. Cumulative Payments to
Date
E. Percent of Current
Subagreements Amount Paid
F. Estimate of Percent Work
Complete
$
SCHEDULE
A. Original Subagreement Duration
days
B. Original Subagreement
Completion Date
C. Approved Time Extensions
days
D. Approved Subagreements Duration
days
E. Approved Subagreement Completion
Date
F. Duration to Date
days
(Explain Variance Between E & F Below)
FINANCIAL IMPACTS
6. Percent of Time Expended
(e.g. Pending Change Orders - Amounts & Eligibility & Possible Claims)
AFFECTS ON PROGRESS
(e.g. Activities Behind Schedule & Observed Problems)
(Additional Comments on Back)
Contractor's Project Manager
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9325.1-5
reports to EPA. This is particularly appropriate for
complex remedial planning or action projects or when a
problem on a project, which will significantly affect
project cost or progress, exists or arises. The State
should not wait until the next quarterly report to inform
EPA of significant changes in project cost or work pro-
gress, but should do so immediately.
The State's quarterly reports to EPA will help the EPA
Remedial Project Manager (RPM) to monitor the progress and
conduct of the remedial activity. The content of these
reports must be sufficient to present a chronological
record of all site work and should include the following
elements:
An estimate of the percentage of the project
completed and the total project cost to date
Summaries of the following items for the report-
ing period:
Work performed on the site
- Community relations activities including
community contacts, citizen concerns, and
efforts to resolve any concerns
- Summary of change orders made to the sub-
agreement to date and their total costs, and
technical and administrative analyses to
document the need for such changes (see
Section C.3 of this chapter)
Problems or potential problems encountered
Status of the contingency fund to date (amount
used and the amount remaining)
Projected work for the next reporting period.
The report may include other elements, as necessary and
appropriate.
C. CHANGE ORDER ADMINISTRATION
A change order is a written order issued by the State
or its designated agent to its contractor authorizing an
addition to, deletion from, or revision of a subagreement
for either engineering or construction services. A change
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9325.1-5
order is issued after execution of the subagreement to
modify, within the scope of the project, the subagreement
cost or scope of work; to interrupt or terminate the proj-
ect; to revise the completion date; or, in general, to
implement any deviation from the original subagreement
terms and conditions. Change orders may occur during any
phase of remedial response, but are most likely to arise
during construction, when there is a greater chance of
encountering unforeseen site condition, changes in esti-
mated quantities, and other potential project delays.
Proper change order management is a key element to
avoiding delays in remedial response, increased costs, and
potential contractor claims. During remedial action,
States may manage construction subagreements directly, may
authorize the architectural/engineering (A/E) firm to do
so, or may secure the services of an independent con-
struction oversight firm. EPA also will consider funding,
as part of the Cooperative Agreement with the State, the
services of a firm specializing in change order manage-
ment. For the Superfund program to date, the design
engineering firm frequently has provided construction
oversight services. Administrative requirements for
management of change orders, including timing, form, and
provisions for construction subagreement adjustments,
appear in the model subagreement clauses of 40 CFR
33.1030. This section outlines change order procedures
specific to the Superfund program.
C.1 Conditions That Warrant a Change Order
Change orders may be required for the following condi-
tions:
Differing site conditions, such as:
- Subsurface or latent physical conditions at
the site differing materially from those
indicated in the subagreement
Unknown physical conditions at the site,
conditions of an unusual nature, or condi-
tions differing materially from those or-
dinarily encountered and generally recog-
nized as inherent to work of the type pro-
vided for in the subagreement.
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9325.1-5
Errors and omissions in plans and specifications;
errors are items that are described incorrectly
in the plans or specifications, whereas omissions
are items that are neither shown nor specified.
Changes instituted by modifications of regulatory
requirements, such as:
Changes in requirements for protecting his-
torical or archeological objects
- Revisions to building codes
- Revisions to zoning and land use plans
- Revisions to Federal regulations and policies
- New congressional legislation.
Design changes, such as modifications to the
existing design which will offer a savings in
excess of all costs associated with the change
order, including future operation and maintenance
costs.
Overruns/underruns in quantities.
Factors affecting time of completion, such as:
Temporary suspension of work
- Directed acceleration
- Time extension for delay beyond the con-
tractor 's control
- Constructive acceleration.
Changes in subagreement administration proce-
dures , such as:
- Progress payment terms
- Retainage release
- Occupancy
Testing
- Acceptance
- Warranties.
Resolution of claims.
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9325.1-5
Emergency conditions, such as acts of God or
civil disturbance.
Design changes usually originate as proposals volunteered
by the construction contractor, recommended by the engi-
neer, or requested by the State. Overruns or underruns in
quantities occur only in subagreements that are formulated
as a series of unit prices bid for each unit required
(e.g., cubic yards of earth moved), and are developed when
there is a difference between the quantities estimated in
the bid schedule and the quantities actually required to
complete the bid item.
C.2 Evaluating Change Order Requests
In reviewing a contractor's request for a change or-
der, the State must evaluate the subagreement documents
and the contractor's compliance with the subagreement
requirements. A sample checklist for the State to use in
evaluating change orders is presented in Exhibit II/VI-2,
on the following page. If the request for a change order
was the result of errors and/or omissions in the plans and
specifications, the State must determine the nature of the
error or omission, the pertinent references in the plans
and specifications, the original intent of the references,
and whether the error or omission led to increased con-
tractor costs. At times, the need to comply with changes
in laws or regulations may require the State to issue a
change order. Similarly, the State should evaluate other
requests for change orders such as design changes or
underruns/overruns in quantities of materials.
Ultimate responsibility for administering change or-
ders rests with the State. Specifically, the State is
responsible for:
Determining whether a subagreement change order
is warranted, based on the terms of the existing
subagreement and a review of the circumstances
responsible for the alleged change
Negotiating a fair and reasonable price for each
required subagreement change
Maintaining accurate and complete cost records
for the change, including records of negotiation
Volume II/VI-8
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9325.1-5
EXHIBIT II/VI-2
SAMPLE CHECKLIST FOR STATE CHANGE ORDER APPROVAL
SCREENING .- to determine whether the information and documentation provided are sufficient for detailed review.
provided, the documentation should be returned to the contractor for additional information.)
(If insufficient information is
^
n
I
1. IDENTIFICATION
Project name
Subagreement number
EPA project number
State project number
Change order number
Subagreement date
Change order date
Name, address, and telephone number of contractor
2. PRIOR APPROVAL
Required from EPA
Obtained from EPA
3. DESCRIPTION OF CHANGE
Clear, unambiguous scope
Revised plan and specification sneets referenced
and attached
Design data and calculations attached
Change is within project scope
Design is adequate (construction subagreements)
Increases/reduces time and/or cost of project
Affect on operation and maintenance costs
4. REASON FOR CHANGE
Clear, understandable statement
Cause of remedial change
Reason why not in original Subagreement
References and attached substantiating documentation
Applicable Subagreement provisions cited
5.
CHANGE TO SUBAGREEMENT PRICE
Dollar amount of change shown (zero for no change)
Contractor's cost breakdown adequately documented
Profit entered separately
Independent estimate from State or its agent including
verification of costs for new items
Documentation referenced, attached
Unit prices in accordance with Subagreement documents and
regulatory requirements
Arithmetic correct
6. CHANGE TO SUBAGREEMENT TIME
Statement of number of days (or zero days)
Documentation (schedule analysis) referenced and attacned
7. APPROVALS
Proper approval signatures entered and dated
8. ATTACHMENTS LISTED AND INCLUDED
Memorandum of Negotiations
Cost and pricing data attached and certified by
contractor
Change Order and Notice to Proceed
B.
DETAILED REVIEW - for approval (or disapproval) of change order. After the recipient determines that a change order file is complete and in
order, the State subjects the change order to a detailed evaluation and review. The result of this evaluation is a ruling to approve the change
order, to deny the change order, or to deny the change order pending receipt of additional information.
-------
9325.1-5
Adequately documenting, for future reference, a
description of the agreed change and reason for
this change
Maintaining current and accurate fiscal projec-
tions of subagreement and project completion costs
Executing subagreement change order documents
efficiently and in a timely manner
Resolving disputes that may arise as a result of
a proposal for a change
Notifying EPA in writing of events or proposed
changes that may require a Cooperative Agreement
amendment
Assessing the impact of change orders on progress
toward project completion and acting to mitigate
resulting project delays.
To expedite State review and approval of change orders,
contractors must:
Adequately describe the reason for each change
request
Submit change order proposals in accordance with
the procedures set forth in the subagreement
documents and enter into meaningful negotiations
on a necessary subagreement change
Furnish and certify the accuracy and completeness
of cost and pricing data to allow the State to
determine the necessity and reasonableness of the
cost proposed, and to enable EPA to determine the
eligibility and allowability of the extra work
performed at the cost proposed.
Proj-ect delays and disputes resulting from change
orders can be limited by effective and frequent communica-
tion between States and contractors. When a request for a
change order is submitted, the State should request and
obtain from the contractor a detailed proposal containing
a thorough description of, and outlining reasons for, the
change, and a detailed explanation of claimed extra
costs. The change order request also must reference the
original subagreement documents and must explain the
specific circumstances associated with the change.
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9325.1-5
When the State receives a change order request, it
must investigate promptly the circumstances for the re-
guest, reach a"decision on the merits of the change, and
notify the contractor of that decision. All negotiated
change orders exceeding $10,000 must have a State-
conducted cost analysis (40 CFR 33.290(a) and Chapter II
of this volume).
Upon reaching agreement with a contractor on the
description and cost of each change order, the State
should execute promptly a change order document which
modifies the base subagreement to include agreements
reached.
C.3 Superfund Requirements for Change Order Management
To ensure that adequate change order funds are avail-
able during the remedial action, the Cooperative Agreement
funding the action will include a construction contin-
gency. This contingency fund is usually expressed as a
percentage of the total project costs, and is usually in
the range of eight to ten percent. (For additional gui-
dance on estimating construction costs and contigencies,
see Superfund Remedial Design and Remedial Action Gui-
dance, Office of Emergency and Remedial Response (OERR),
February 1985, and Section V.A of this document).
The SPO may be delegated the authority to approve any
change order which totals up to 20 percent of the project
contingency fund. Any change order that exceeds this 20
percent limit requires EPA approval. The SPO may continue
to approve such change orders until 75 percent of the
total contingency fund has been depleted. Thereafter, the
State must request EPA to provide additional funds through
an amendment to the Cooperative Agreement; this amendment
is not required, however, if the project is near comple-
tion and no additional change orders are anticipated.
Depending upon the circumstances, the Region may award
funds from its Superfund Comprehensive Accomplishments
Plan (SCAP) contingency, may request funds from the Head-
quarters SCAP contingency fund, or may request that the
Regional SCAP be amended to add new funds for this pur-
pose. In any case, the State must receive written
approval from EPA to exceed 75 percent of the project
contingency fund. A special condition regarding the draw-
down of the construction contingency fund is routinely
included in Cooperative Agreements funding construction
activities. (See Appendix F of Volume I for a sample
special condition.)
Volume H/VI-ll
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9325.1-5
The RPM also is responsible for overseeing expenditure
of the contingency fund. To do so, the RPM should monitor
closely the expenditure of the contingency to compare the
remaining construction contingency fund against the change
orders to date and the progress of the project, determin-
ing whether funds will be sufficient to complete the proj-
ect. Assistance is available from the COE for this pur-
pose. If it appears that these funds will be exhausted
before the project is completed, the RPM should seek
additional money either by requesting the funds from the
Headquarters SCAP contingency fund or by preparing an
estimate of costs for the following fiscal year's SCAP
budget.
Before any change order may be approved, the State
must conduct a cost or price analysis (see 40 CFR 33. 290).
Superfund program procedures also require the State to
perform a technical and administrative analysis to
determine:
The technical accuracy of the alleged differences
in quantities and technical requirements
The allowability of the proposed amounts
Compliance with contractual and regulatory
requirements
Conformance with the approved Cooperative Agree-
ment statement of work (SOW).
The State should forward its analysis to EPA with its
quarterly report and with any requests to 1) exceed 20
percent of the construction contingency fund for an
individual request, 2) exceed 75 percent of the construc-
tion contingency for the total of all requests to date,
and/or 3) amend the Cooperative Agreement to add funds.
EPA will take this analysis into consideration when
reviewing the State's performance in managing the contract
to determine the allowability of costs under the Coopera-
tive Agreement.
C.4 Change Orders Requiring Amendments to the Superfund
Cooperative Agreement
States may rebudget existing subagreement funds in the
Cooperative Agreement to pay for necessary changes (see 40
CFR 30.700 for limitations on rebudgeting). However,
State approval of a change order does not obligate EPA to
increase the amount of a Cooperative Agreement.
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9325.1-5
If EPA determines that a necessary change is substan-
tial and is within the scope of the project, the State
must request EPA to formally amend the Cooperative Agree-
ment (40 CFR 30.700(d)). Change orders requiring amend-
ment of the Cooperative Agreement include:
Significantly changed site conditions, to the
extent that project costs are significantly
affected
Changes substantially increasing or decreasing
the funds needed to complete the project
Significant delay or acceleration of the project
schedule
Changes to the approved remedy.
Cooperative Agreement amendment procedures are found in
Chapter VIII of Volume I of this manual.
In determining whether to approve a major change to a
subagreement, States must first ascertain whether it is a
cardinal change. A cardinal change is one in which (l)
the altered subagreement attempts to purchase an item
essentially different from the one originally called for,
or (2) the cost of the changed subagreement greatly ex-
ceeds the original subagreement cost. Such a change may
be unfair to other potential contractors because they may
have had no opportunity to compete for the subagreement;
this is a violation of EPA regulations requiring competi-
tion on all procurement of supplies and services. Al-
though it may appear that the State should terminate the
subagreement and rebid the remaining work, including the
change, under a new subagreement, such a decision should
now be made at a site on the National Priorities List
(NPL) without first consulting EPA.
C.5 Preparation of the Change Order
After evaluating the change order request and arrang-
ing for payment for the extra work, the State must prepare
and issue a change order. To do so, the State should
develop a formal, written document that contains the fol-
lowing elements:
Identification of the change
Description of the change
Reason for the change
Volume II/VI-13
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9325.1-5
Difference in the unit price, if applicable
Difference in the subagreement price
Alteration of the subagreement schedule, if ap-
plicable
Effect of the change on other work elements
State and contractor approval of the change order.
If necessary, the change order also should provide for EPA
review and comment.
D. CLAIMS
Claims consist of demands or written assertions by a
contractor seeking, as a matter of right, changes to the
subagreement (e.g., additional time and/or costs) which
the State has originally rejected through the change order
process. Claims may arise at any phase of remedial re-
sponse. A voucher, invoice, or other routine request for
payment that is not in dispute when submitted is not a
claim. Such a submission, however, may be converted to a
claim if it is disputed as to liability or amount.
State failure to prevent or successfully resolve con-
tractor claims in a timely manner may greatly increase
project costs with no corresponding benefit. This is of
particular importance to States because EPA may not par-
ticipate in certain costs associated with contractor
claims. When EPA does, the share is the same as for re-
medial action (either 90/10 or 50/50). States must insti-
tute a vigorous program for claims prevention and, in
those cases where claims cannot be prevented, must take
action to ensure timely and effective claims resolution.
D.1 Causes of Claims
States may encounter claims in subagreements for ser-
vices, supplies, or construction, even when the project
has been conducted in a thoroughly satisfactory manner.
Claims may result from the contractor asserting the fol-
lowing:
Defects in plans or specifications
Differing site conditions
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9325.1-5
Inadequate construction inspection and management
Failure to promptly and fairly address contractor
grievances, requests for time extensions, or
other problems
Failure to enforce subagreement provisions on
scheduling and completion time
Failure to negotiate time extensions and/or delay
costs, if any, associated with change orders
Failure to mitigate effects of delay
Unusually severe weather conditions
Strikes
Acts of God
A State decision to stop or suspend work or
otherwise prevent the contractor from completing
work according to a previously approved schedule,
for reasons beyond the control of the contractor,
and not the fault or due to the negligence of the
contractor
Subagreement termination for reasons beyond the
control of the contractor, and not the fault or
due to the negligence of the contractor
Failure to make payment according to the terms of
the subagreement; examples include:
Making arbitrary, unsubstantiated reductions
in progress payments at substantial or final
completion of the project
- Making partial payments which, in addition
to failing to comply with the subagreement,
affect the contractor's ability to make
legitimate payments to subcontractors, ma-
terials suppliers, and equipment vendors
- Failure to release retainage
Delay in actual disbursement of approved
payments beyond the normally accepted indus-
try standard.
Volume II/VI-15
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9325.1-5
States should take every reasonable action to ensure
prompt payment on all subagreements, since, according to
State law or their subagreements, contractors may be en-
titled to interest on earned but unpaid monies. Such
interest payments are not allowable costs under the Co-
operative Agreement and will have to be fully borne by the
State. Thus, States should take every reasonable action
to ensure prompt payment on all subagreements.
D.2 Claims Prevention
It is critical that all subagreement documents that
States prepare include precise language on requirements
for administering changes in the SOW. Many claims can be
avoided if acceptable change order language is used to
resolve disputes between the contracting parties that
arise during the course of the work. States can reduce
the probability of receiving claims, to the maximum extent
possible, by avoiding initiating changes in the work.
Changes should be directed only if they are essential to
successful completion of the subagreement; if the expected
costs of a proposed change, including indirect effect and
delay costs, are less than the expected costs of authoriz-
ing no change in the work; or if there is no feasible
alternative to performing the proposed extra work (e.g.,
awarding a separate subagreement for the proposed extra
work at a future date).
To avoid significant cost and schedule increases, EPA
strongly encourages the State to exercise effective proj-
ect management practices that will reduce the occurrence
of claims. The State must ensure that such practices are
employed throughout the project cycle. Although the State
may retain the services of other parties for certain man-
agement tasks, the State is fully responsible for the
satisfactory completion of the work. Therefore, the State
must require any contractors for construction management
services to give immediate notice of any and all unre-
solved change orders and disputes.
Some elements of effective project management which
will help prevent claims include:
Recognizing the importance of scheduling as a key
management tool by specifying that the contractor
provide a realistic and adequate project schedule
commensurate with the complexity of the project;
enforcing the schedule provisions; and requiring
periodic updates to show the adjusted project
progress and completion date
Volume II/VI-16
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9325.1-5
Maintaining a fully and completely documented
record of all aspects of the work, such as photo-
graphs and a daily log of work progress, person-
nel, and equipment on-site
Demonstrating a knowledge and understanding of
common sources of disputes and of situations
likely to result in claims during construction,
and exercising effective techniques to avoid such
situations
Providing timely responses to contractor requests
for direction, clarification, and adjustment
Instituting measures to ensure accurate and com-
plete plans and specifications (e.g., biddability/
constructability reviews) and holding pre-bid
conferences
Maintaining open and effective communication with
all contractors throughout the course of the re-
medial activities.
EPA, as a routine aspect of Cooperative Agreement manage-
ment, will consider funding State costs incurred in imple-
menting these practices.
D.3 Types of Claims
States must recognize that any action that changes the
subagreement scope or schedule increases the likelihood of
claims. Several types of claims are relevant to this
chapter and are discussed below; these include:
Constructive changes
Defective specifications
Inconsistent administration of warranty provisions
Impossibility of performance
Acceleration
Delay.
States also should be aware that they cannot order a
change which is beyond the scope of the subagreement,
known as a cardinal change, without EPA review and
approval. The contractor is not bound to perform a car-
dinal change unless the subagreement for remedial work is
formally revised.
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9325.1-5
Changes resulting from written or oral orders not
designated as change orders are known as constructive
changes. Any such order that causes a change, whether or
not designated a change order by the State, can be treated
as a change order by the contractor after giving proper
notice of its intent to seek additional compensation under
the change order provisions. Claims often arise when
constructive changes are directed in the work but the
State does not recognize or authorize a change order. A
contractor can assert that a constructive change has been
directed if work performed according to subagreement terms
is not accepted by the State; claims can thus result.
Defective specifications, also known as errors and
omissions, can result in claims if the contractor incurs
additional costs that are not reimbursed by change order.
The contractor is liable for all damages caused by con-
tractor negligence or unacceptable performance of work
under the contract, except for errors, omissions, or other
deficiencies attributable to the subagreement documents or
to another party. The contractot, therefore, is responsi-
ble for correcting or revising any errors, omissions, or
other deficiencies on his/her part, without being provided
compensation.
If States administer any warranty provisions of sub-
agreements in a manner inconsistent with subagreement
terms, claims may arise.
Claims may result from an impossibility of performance
if restrictive subagreement language results in a situa-
tion where it is impossible for the contractor to complete
the work and the problem cannot be resolved by issuing a
change order.
If States require subagreement work to be completed on
a schedule of shorter duration than originally agreed upon
in the contract documents, or if significant change order
work is directed to be completed within the original proj-
ect schedule, additional costs will accrue to the contrac-
tor. This is known as acceleration of work and a claim
may develop if additional compensation is not paid to the
contractor by change order.
When contractors are delayed in the completion of
their work for reasons that are beyond their control and
not brought about through their own fault or negligence,
it is reasonable to extend the subagreement by a period of
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9325.1-5
time equivalent to the delay. Failure to recognize and
accommodate effects on the contractor's progress may re-
sult in claims.
D.4 Claims Resolution
When claims arise, States should implement a fair and
timely claims negotiation process in order to avoid
lengthy and costly arbitration and/or litigation. In
general, States should develop a thorough assessment
process to evaluate the merits of claims filed with the
State and the relative vulnerabilities of the parties
involved.
In pricing a claim, contractors may submit:
Unit prices
A lump sum proposal
Cost plus fee, including labor, materials, equip-
ment, travel and subsistence, job site overhead,
home office overhead, and interest on claimed
costs unpaid (the State is required to pay rea-
sonable interest, but EPA is prohibited from
sharing in these costs under CERCLA Cooperative
Agreements).
Claims for delay may be quantified in terms of:
Labor cost escalation
Materials cost escalation
Idle labor and equipment
Extended overhead
Availability charges.
In resolving claims, States should review contractor pro-
posals for adequacy and completeness, in the same manner
as detailed previously for change orders, to determine
whether the claim is reasonable.
Due to the complexity of issues usually involved in
contractor claims, States may choose to engage the ser-
vices of consultants specializing in claims management.
This is an allowable cost under a Cooperative Agreement.
However, the State must submit to EPA a request for fund-
ing claims management before it expends funds for that
purpose.
Volume II/VI-19
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9325.1-5
D.5 Funding of Claims Resolution
The State may request EPA to amend its Cooperative
Agreement to fund a portion of the legal, technical, and
administrative costs that the State incurs in analyzing
the merits of claims and the costs associated with negoti-
ating settlements of, or defending itself against, these
claims (costs associated with analyzing a claim prior to
litigation are considered to be part of negotiation
costs). For these costs to be eligible under the Coopera-
tive Agreement, the claim must arise from work within the
scope of the Agreement; the costs must not be incurred to
prepare documentation that the claiming contractor
developed to support the claim against the State; and the
Award Official must determine that there is significant
Federal interest in the issues of the claim.
A formal amendment to the Cooperative Agreement, spe-
cifically covering the claims defense costs, must be exe-
cuted before such costs can be incurred. To obtain an
amendment, the State must request the Award Official to
provide funding for claims negotiation and defense prior
to expending any money to resolve the claim(s). This
request should include a schedule, budget, and scope of
work required for claims management. EPA will review the
documents that the State provides and will assess whether
the claims resulted from poor project management by the
State or from other factors beyond the control of the
State or its contractor. This determination is the basis
for EPA's decision whether to fund claims negotiation and
defense costs.
If EPA decides to utilize Superfund monies for this
purpose, the Remedial Project Manager (RPM) must determine
whether funds are available in the Regional allowance to
award an amendment to the Cooperative Agreement. The
Regional SCAP contingency fund may be used to fund claims
negotiation and defense costs associated with remedial
planning. For claims negotiation and defense costs asso-
ciated with remedial action, the Region may request funds
from the Headquarters SCAP contingency fund. If possible,
the EPA Region may choose to include these costs in the
following fiscal year's SCAP budget.
D.6 Claims Negotiation
If EPA decides to fund the costs of claims negotiation
or defense, it will execute a formal amendment to the
Cooperative Agreement; procedures for amending Superfund
Volume II/VI-20
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9325.1-5
Cooperative Agreements are found in Chapter VIII of Volume
I of this manual. Claims negotiation or defense may com-
mence upon execution of the amendment. If the State be-
gins any negotiation or defense before the amendment is
executed, the associated costs will not be eligible for
reimbursement by EPA. In addition, EPA may decide against
the State's application for the costs of claims negoti-
ation or defense; such a ruling would make the State ac-
countable for all such costs.
Because a claim can be a large potential liability,
States must take full control of the situation using their
legal and technical staffs to provide advice and assis-
tance, enabling the State to mount a well-organized,
thoroughly prepared resolution effort. The following
suggested actions will aid the State in resolving claims:
Take immediate steps to mitigate further costs
being incurred by the contractor, or by any other
party, due to the claims issue(s)
Perform a timely, complete, and thorough review
of the issues raised by the claim to determine
the degree of merit that each issue may have
Negotiate with the contractor on the issues in a
good faith attempt to resolve each issue
Make a renewed effort to negotiate a fair and
reasonable settlement of the meritorious issues
and a reduction or elimination of the issues
found to be without merit
Maintain a full and completely documented record
of the claim negotiation process
Provide a high degree of attention to dispute
resolution (40 CFR 33.1030 (clause 7)).
During the claim(s) resolution process, the State may
choose to consult the EPA Region for technical and legal
advice. Because the State is responsible for paying all
meritorious contractor claims, EPA must carefully evaluate
the extent of EPA's interest in awarding to the State the
costs of negotiating or defending against claims.
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D.7 Settlement of Claims
Should the State decide that the contractor's claim is
meritorious and thus negotiate a settlement, the State may
request EPA to amend its Cooperative Agreement to fund the
settlement. The costs of meritorious claims are allowable
for an increase to the Cooperative Agreement, provided
that the costs are within the scope of the project; are
not caused by the State's mismanagement; and are not
caused by the State's vicarious liability for the improper
actions of others. Should the State wish to exercise this
option, the Region must determine whether the costs asso-
ciated with the claim are: (1) allowable (40 CFR 30.200),
(2) within the scope of work agreed upon, and (3) consis-
tent with the Record of Decision (ROD). Claims that alter
the cost-effectiveness analysis and selection of the
remedy may require the RPM to prepare a supplemental ROD
(see Appendix 0 to Volume I of this manual). Approval of
such a supplemental ROD must precede award of funds for a
Cooperative Agreement amendment.
To secure EPA review, the State should submit its
claims settlement proposal to the EPA Region. The RPM,
with the assistance of Regional Counsel, then will review
the proposal from several aspects:
Technical accuracy of the alleged differences in
quantities and technical requirements
Allowability of the proposed amounts
Compliance with contractual, regulatory, and
statutory requirements, including the timeliness
and format of the contractor's change order re-
quest
Conformance with the approved Cooperative Agree-
ment SOW
State performance in managing the contractor; any
costs incurred due to failure to properly manage
the contractor are not allowable under the Co-
operative Agreement.
This review should determine the reasonableness of the
proposed settlement and the allowability of the costs
under the Cooperative Agreement. The RPM may request
technical assistance from the COE or EPA's own remedial
Volume II/VI-22
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9325.1-5
contractor to conduct this review. EPA review and con-
currence is not necessary for the settlement itself; how-
ever, the review will determine whether money should be
added to the Cooperative Agreement for claims settlement.
If it is determined that EPA will fund the claim, the
RPM must evaluate the availability of necessary funds in
the Region's SCAP. If allowable claims are associated
with remedial planning, the Region may choose to use its
SCAP contingency. For claims resulting from remedial
action, the Region may request funds from the Headquarters
contingency fund. If possible, the RPM may include the
funds for such claims in the following fiscal year's SCAP
budget.
This document, State Procurement Under Superfund
Cooperative Agreements, Volume II of the manual State
Participation in the Superfund Program, has provided
guidance on various aspects of a State procurement
program. Subjects addressed include regulatory re-
quirements, procurement of engineering services, types of
engineering services provided during remedial response,
procurement of construction services, and subagreement
administration. Guidance on other portions of the Super-
fund remedial program may be found in Volume I of this
manual. Definitions of terms used in this manual and
additional references may be found in the appendices to
this volume, which follow.
Volume II/VI-23
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9375.1-5
APPENDICES
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APPENDIX A
GLOSSARY OF TERMS
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9375.1-5
APPENDIX A
GLOSSARY OF TERMS
This appendix provides definitions of selected terms
used throughout the text. It is not intended to be com-
prehensive in nature; rather, it attempts to highlight
some of the terms commonly used in the Superfund remedial
program. Statutory definitions have been quoted for those
terms defined in CERCLA while other definitions have been
taken from appropriate EPA regulations, guidance, and pub-
lications .
Activity: A set of tasks that comprise a segment of the
sequence of events undertaken in determining, planning,
and conducting a response to a release or potential re-
lease of a hazardous substance. For accounting purposes,
five activities have been defined:
Pre-remedial Activities
Remedial Investigation/Feasiblity Study
Remedial Design
Remedial Implementation
Operation and Maintenance.
Allowable Costs: Those project costs that are eligible,
reasonable, necessary, and allocable to the project; are
permitted by the appropriate Federal cost principles; and
are approved by EPA in the assistance agreement.
Amendment: A written revision to, or an expansion of,
terms included under a Cooperative Agreement, Memorandum
of Understanding, or Superfund State Contract signed by
both the Award Official and an authorized representative
of the State; other EPA-lead remedial response agreements
do not require formal amendments. An amendment is neces-
sary when the scope or dollar amount of an agreement is
significantly changed (see 40 CFR 30.200 for other situa-
tions which require amendments). The original agreement
should define situations in which amendments must be nego-
tiated.
"As-Built" Construction Schedule: The "as-built" con-
struction schedule provides the actual initiation and com-
pletion dates of all tasks performed throughout the dura-
tion of a construction project. This is compared to the
planned schedule to evalute the effects of delays or ac-
celerations on task completions.
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Award Official: The EPA official delegated the authority
to execute assistance agreements (grant or Cooperative
Agreement) on behalf of the Federal government. This is
the Regional Administrator for Regional Cooperative Agree-
ments; the Chief, Grants Operations Branch is the Award
Official for Headquarters Cooperative Agreements which
have not been delegated to the Regions.
Biddabi1ity/Constructabi1ity: Determination of the abil-
ity of a construction contractor to prepare a fair and
reasonable bid based upon the remedial design and speci-
fications, and then to construct the project using cur-
rently accepted construction practices and techniques
without submitting change orders or claims.
Bid Protest: A written complaint filed by a party or
parties with a direct financial interest affected by a
procurement action.
Bond: An agreement pledging surety for financial loss
caused by an act or default of the bonded party or by some
contingency.
CERCLA: The Comprehensive Environmental Response, Com-
pensation, and Liability Act of 1980 was enacted by
Congress to provide for liability, compensation, cleanup,
and emergency response for hazardous substances released
into the environment and the cleanup of inactive hazardous
waste disposal sites. It also is known as Superfund since
the act established a trust fund (Hazardous Substance Re-
sponse Fund) to financially support cleanup activities.
Change Order: A written order issued by a State, or its
designated agent, to its contractor authorizing an addi-
tion to, deletion from, or revision of, a subagreement,
usually initiated at the contractor's request.
Claim: A demand or written assertion by a contractor
seeking, as a matter of right, changes in subagreement
duration, costs, etc., which originally have been rejected
by the State. Claims usually are filed after the
completion of a subagreement.
Contract: The term used to describe a variety of agree-
ments or orders to acquire supplies or services for the
direct benefit of EPA (see "Subagreement").
Contractor: Any party to whom a recipient awards a sub-
agreement .
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9375.1-5
Cooperative Agreement (CA): An assistance agreement
whereby EPA transfers money, property, services, or any-
thing of value to a State for the accomplishment of cer-
tain remedial activities or tasks, as authorized by
CERCLA. It assumes a substantial Federal involvement in
the State's performance of these activities. The remedial
Cooperative Agreement provides general information about
the project, such as the approved budget, and any specific
conditions applicable to the project. It also documents
any required CERCLA section 104(c)(3) assurances.
Cost Analysis: The review and evaluation of each element
of subagreement cost to determine reasonableness, alloca-
bility, and allowability.
Cost Share: The portion of allowable project costs that
the State contributes toward completing its project using
non-Federal funds. The cost share may include services as
well as cash contributions. (Sometimes referred to as
"non-Federal share" or "matching share.")
Debarment: An action taken by the Director, Grants
Administration Division under 40 CFR 32.206 to deny an
individual, organization, or unit of government the
opportunity to participate in EPA assistance or to receive
subagreements.
Deletion: The procedure by which a site is removed from
the National Priorities List (NPL). A final technical
report is submitted by the State documenting that the cri-
teria established in the feasibility study and Record of
Decision for the site cleanup have been met, and that the
remedy is performing adequately. This final technical
report is used to determine whether the hazard associated
with the site has been reduced or eliminated to a degree
allowing its removal from the NPL.
Deviation: Official EPA permission to differ on a cer-
tain, specific point of regulation. EPA may issue a
deviation from any of its assistance-related regulations,
except for those that implement statutory and executive
order requirements. A deviation request may be made by
the State or by an EPA program office and must comply with
the requirements set forth in 40 CFR 30.1003. The
Director, Grants Administration Division, in EPA Head-
quarters, approves or disapproves deviation requests.
Direct Cost: Those costs that can be identified specif-
ically with a particular cost objective and are so
charged. (Also see "Indirect Costs.")
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9375.1-5
Eligible Costs: Those costs in which Federal participa-
tion is authorized by applicable statutes. (See
"Allowable Costs".)
Facility (statutory definition): (A) any building, struc-
ture, installation, equipment, pipe or pipeline (including
any pipe into a sewer or publicly owned treatment works),
well, pit, pond, lagoon, impoundment, ditch, landfill,
storage container, motor vehicle, rolling stock, or air-
craft; or (B) any site or area where a hazardous substance
has been deposited, stored, disposed of, placed, or other-
wise come to be located; [this] does not include any con-
sumer product in consumer use or any vessel.
Feasibility Study (FS): The portion of an activity in
remedial planning involving a study to (a) evaluate alter-
native remedial actions from a technical, environmental,
and cost-effectiveness perspective; (b) recommend the most
cost-effective remedial action; and (c) prepare a con-
ceptual design, cost estimates for budgetary purposes, and
a preliminary implementation schedule for that action.
(The entire activity is known as a "remedial investiga-
tion/feasibility study.")
Force Account Work: The use of the State's own employees
or equipment for construction or construction-related
activities (including architectural and engineering
services, or for repair of, or improvement to, a facility),
Geotechnical Investigation: A study of the soils — sur-
face and subsurface — found at a site. This involves
sampling of the soils to determine characteristics such as
plasticity, gradation, moisture content, load capacity,
etc., as well as chemical analyses to evaluate the extent
of contamination of the site with hazardous wastes.
Indirect Cost: Any costs that are incurred for common
objectives and which cannot be charged directly to any
single cost objective. These costs are allocated to the
cost objectives benefited, based on a fair method of
approximation. Indirect costs also are referred to as
"overhead" or "burden costs".
Master List: EPA's central list containing the names of
individuals and other entities ineligible to participate
in EPA assistance programs because they are suspended,
debarred, or under a voluntary exclusion.
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9375.1-5
Minority Business Enterprise: A minority business enter-
prise is a business which is: (a) certified as socially
and economically disadvantaged by the Small Business
Administration, (b) certified as a minority business
enterprise by a State or Federal agency, or (c) an inde-
pendent business concern which is at least 51 percent
owned and controlled by a minority group member(s).
National Contingency Plan (NCP): Officially known as the
National Oil and Hazardous Substances Pollution Contin-
gency Plan (40 CFR Part 300), this regulation outlines
responsibilities and authorities for responding to
releases into the environment of hazardous substances and
other pollutants and contaminants under the statutory
authority of CERCLA and section 311 of the Clean Water Act,
National Priorities List (NPL): A list of the highest
priority releases or potential releases of hazardous sub-
stances, based upon State and EPA Regional submissions of
candiate sites and the criteria and methodology contained
in the Hazard Ranking System, for the purpose of allo-
cating funds for remedial response. Published by EPA, the
NPL is updated periodically.
Price Analysis: The process of evaluating a prospective
price without regard to the contractor's separate cost
elements and proposed profit. Price analysis determines
the reasonableness of the proposed subagreement price
based on adeguate price competition, previous experience
with similar work, established catalog or market price,
law, or regulation.
Procurement System Certification: The certification the
State signs after it has reviewed its procurement system
and compared that system to the minimum requirements of 40
CFR Part 33. The State either certifies that its procure-
ment system meets EPA's minimum standards, or that the
State's system does not meet the requirements in Part 33
and that the State will allow an EPA preaward review of
proposed procurement actions.
Profit: The net proceeds obtained by deducting all allow-
able costs (direct and indirect) from the price. (This
definition may vary from many firms' definitions of profit
because it is based on applicable Federal cost principles;
it instead may correspond to those firms' definitions of
"fee.")
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9375.1-5
Project: A group of remedial response activities at a
site intended to study and/or remedy a verified or poten-
tial release of a hazardous substance which poses an
actual or potential significant threat to human health,
the environment, or real or personal property. Remedial
projects usually involve groupings of one or more of the
following activities: remedial investigation/feasibility
study, remedial design, remedial action, and/or operation
and maintenance.
Record of Decision (ROD): The ROD is a document developed
for obtaining and officially recording the selection of a
specific remedial alternative, and contains an explanation
and justification for selection of the particular alter-
native.
Remedial Action (RA): An activity in remedial response
involving actual implementation, following design, of the
selected source control and/or off-site remedial measure.
States are required to share in the costs of all RAs.
Remedial Design (RD): An activity in remedial response
where the selected remedy is clearly defined and/or speci-
fied in accordance with engineering criteria (i.e., a site
action plan, a relocation plan, or engineering drawings
and specifications) in a bid package, enabling immediate
implementation of the remedy.
Remedial Investigation (RI): The portion of an activity
in remedial planning involving an investigation to gather
the data necessary to: (a) determine the nature and
extent of problems at a site; (b) establish remedial re-
sponse criteria for the site; (c) identify preliminary
alternative remedial actions; and (d) support the tech-
nical and cost analyses of the alternatives. (The entire
activity is known as "remedial investigation/feasibility
study.")
Remedial Planning: A phase in remedial response initiated
at a site prior to implementing the remedial action.
Remedial planning encompasses the activities of remedial
investigation/feasibility study and remedial design.
States are not required to share in costs of remedial
planning at privately owned sites; at publicly owned sites
they must share in remedial planning costs only :Lf and
when a remedial action is undertaken.
Volume II/A-6
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9375.1-5
Remedial Project Manager (RPM): The designated EPA Re-
gional official who coordinates, manages, and monitors
site activities covered in both EPA- and State-lead re-
sponse agreements.
Remedial Response: A series of cleanup activities
intended to provide permanent resolution of a release or
potential release of a hazardous substance from a site.
Remedial response generally includes the following
sequence of activities: remedial investigation/feasi-
bility study, remedial design, remedial action, and opera-
tion and maintenance.
Scope of Work: The element of a remedial planning agree-
ment that generally outlines the activities, tasks, and
subtasks to be undertaken at a site. The scope of work
also provides general information on the objectives of the
project.
Services: A contractor's labor, time, or efforts which do
not involve the delivery of a specific end item, other
than documents (e.g., reports, design drawings, specifi-
cations). This term does not include employee agreements
or collective bargaining agreements.
Short List: The list of firms, selected by a State, who
are judged to be qualified to perform services for a
specific scope of work. The short-listed firms are
selected based on an evaluation of statements of qual,ifi-
cations and experience received from interested firms j.n
response to a solicitation for services issued by the
State. Short-listed firms are allowed to continue
participating in the selection process.
Site Survey: A topographic study of a site. Depending on
the location and circumstances, surveying required may be
aerial, ground, or a combination of the two.
Small Business: A business as defined in section 3 of the
Small Business Act, as amended (15 USC 632).
State Project Officer (SPO): The designated State
official responsible for direct management of the activi-
ties covered in a Cooperative Agreement or for ensuring
that the State carries out responsibilities defined in an
EPA-lead remedial response agreement.
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9375.1-5
Statement of Work (SOW): The element of a remedial re-
sponse agreement that specifies in detail the activities,
tasks, subtasks, and objectives to be performed pursuant
to that agreement. The SOW should contain salient points
regarding the background of the release or potential
release, problem definition, purpose of the work, and a
description of the services to be performed either by the
State or by an EPA contractor.
Subagreement: A written agreement between an EPA recip-
ient and another party (other than another public agency)
or between the recipient's contractor and the contractor's
first tier subcontractor.
Superfund Comprehensive Accomplishments Plan (SCAP): A
document prepared by the EPA Regional office incorporating
cost estimates for the remedial activities to be accom-
plished throughout a given fiscal year.
Suspension: An action taken by the Director, Grants
Administration Division under 40 CFR 32.300 to temporarily
disqualify an individual, organization, or unit of govern-
ment from receiving any EPA assistance or subagreement.
Task: A discrete piece of work that addresses a single
objective specified by a statement of work for planning,
evaluating, or implemeting a response action: e.g. ,
hydrogeological study, hazardous waste characterization,
alternative analysis, construction of a fence, or instal-
lation of a leachate control system.
Voluntary Exclusion: A term of settlement, in lieu of a
finding for debarment, under which a person or entity
agrees to abstain voluntarily from participation in
EPA-assisted projects.
Women's Business Enterprise (WBE): A business which is
certified as such by a State or Federal agency, or which
meets the following definition: A WBE is an independent
business concern which is at least 51 percent owned by a
woman or women who also control and operate it. Deter-
mination of whether a business is at least 51 percent
owned by a woman or women shall be made without regard to
community property laws. For example, an otherwise quali-
fied WBE which is 51 percent owned by a married woman in a
community property State will not be disqualified because
her husband has a 50 percent interest in her share. Simi-
larly, a business which is 51 percent owned by a married
Volume II/A-8
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9375.1-5
man and 49 percent owned by an unmarried woman will not
become a qualified WBE by virtue of his wife's 50 per-
cent interest in his share of the business (40 CFR 33.005
(b)).
Work Plan: The detailed listing of all activities and
tasks to be conducted under a remedial response agree-
ment. It should also include a schedule for completion of
the work and show the outputs anticipated.
Volume II/A-9
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9375.1-5
APPENDIX B
REFERENCES
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9375.1-5
APPENDIX B
REFERENCES
A. PROCUREMENT - GENERAL
Federal Acquisition Regulation, issued by Department of
Defense, General Services Administration, and National
Aeronautics and Space Administration, April 1, 1984.
Code of Federal Regulations, Title 40 - Protection of the
Environment.
Schnitzer, Paul A., U.S. Government Contract Bidding, 2nd
ed., Federal Publications Inc., 1982.
B. PROCUREMENT OF ARCHITECTURAL/ENGINEERING SERVICES
Acret, James, Architects & Engineers: Their Professional
Responsibilities, Shepard's Inc., Division of McGraw-
Hill, 1977.
American Consulting Engineers Council, A Guide to the
Procurement of Architectural and Engineering Services,
American Consulting Engineers Council, Washington, D.C.,
1979.
American Consulting Engineers Council, A Manual of
Practice for Consulting Engineering, American Consulting
Engineers Council, Washington, D.C., 1977.
American Society of Civil Engineers, Consulting
Engineering - A Guide for the Engagement of Engineering
Services, American Society of Civil Engineers, New York,
NY, 1975.
NSPE/PEPP, Guidelines for Development of Architect/
Engineer Quality Control Manual, NSPE, 1977.
U.S. EPA, Guidance on Feasibility Studies Under CERCLA,
U.S. EPA, Washington, D.C., June 1985.
U.S. EPA, Guidance on Remedial Investigations Under CERCLA,
U.S. EPA, Washington, D.C., June 1985.
Volume II/B-1
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C. PREPARATION OF CONTRACT DOCUMENTS
Abbett, Robert W., Engineering Contracts and
Specifications, 4th ed., John Wiley & Sons, Inc., New
York, NY, 1963.
Ayers, Chesley, Specifications for Architecture,
Engineering, and Construction, McGraw-Hill, USA, 1975.
Construction Specifications Institute, Manual of Practice,
CSI, various dates, looseleaf.
Dunham, Clarence and Robert Young, Contracts,
Specifications and Law for Engineers, McGraw-Hill, New
York, NY, 1971.
Edwards, H. Griffith, Specifications, 2nd ed., D. Van
Nostrand Company, Inc., Princeton, NJ, 1961.
Engineers' Joint Contract Documents Committee, Standard
Forms of Agreement, published jointly by National Soci-
ety of Professional Engineers, American Consulting Engi-
neers Council, and American Society of Civil Engineers,
Washington, D.C., 1983:
o Standard Form of Agreement Between Owner and Engineer
for Professional Service (1979 ed.)
o Suggested Listing of Duties, Responsibilities, and
Limitations of Authority of Resident Project Represen-
tative (1983 ed.)
o Standard Form of Letter Agreement Between Owner and
Engineer for Professional Services (1979 ed.)
o Standard General Conditions of the Construction Con-
tract (1983 ed.)
o Standard Form of Agreement Between Owner and Contrac-
tor on the Basis of a Stipulated Price
(1983 ed.)
o Standard Form of Agreement Between Owner and Contrac-
tor on the Basis of Cost-Pius (1983 ed.)
o Change Order (1983 ed.)
o Application for Payment (1983 ed.)
Volume II/B-2
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9375.1-5
o Work Directive Change (1983 ed.)
o Commentary on Agreements for Engineering Services and
Contract Documents by John R. Clark, Esq. (1981 ed.)
o Commentary on 1983 Edition of Construction Related
Documents by John R. Clark, Esq. (1983 ed.)
o Standard Form of Agreement Between Engineer and Archi-
tect for Professional Services (1980 ed.)
o Cross Reference Between EJCDC Standard General Condi-
tions of the Construction Contract (1910-8, 1983 ed.)
and AIA General Conditions of the Contract for Con-
struction (No. A201, Aug. 1976 ed.) (1983 ed.)
o Standard Form of Agreement Between Owner and Project
Manager for Professional Services (1977 ed.)
o Guide to the Preparaton of Supplementary Conditions
(1983 ed.)
o Suggested Bid Form and Commentary for Use (1983 ed.)
o Standard Form of Agreement Between Owner and Engineer
for Study and Report Professional Services (1980 ed.)
o Standard Form of Procurement Agreement Between Owner
and Contractor (1981 ed.)
o Procurement General Conditions (1981 ed.)
o Guide to the Preparation of Procurement Supplemental
Conditions (1981 ed.)
o Instruction to Bidders for Procurement Contracts
(1981 ed.)
o Commentary on Procurement Documents by John R. Clark,
Esq. (1981 ed.)
o Guide to Preparation of Instructions to Bidder
(1983 ed.).
Meier, Hans W. , Construction Specifications Handbook, 2nd
ed., Prentice-Hall, 1978, looseleaf.
Volume II/B-3
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Rosen, Harold J., Construction Specifications Writing,
Wiley-Interscience, New York, NY, 1974.
U.S. EPA, Superfund Remedial Design and Remedial Action
Guidance, Washington, B.C., February 1985.
D. CONTRACT LAW
Cohen, Henry A., Public Construction Contracts and the
Law, McGraw-Hill, New York, NY, 1961.
Dunham, Clarence W., Robert D. Young, and Joseph T.
Bockrath, Contracts, Specifications, and Law for Engi-
neers, 3rd ed., McGraw-Hill, 1979.
Hohns, H. Murray, Preventing and Solving Construction
Contract Disputes, Van Nostrand Reinhold Co., New York,
NY, 1979.
Howell, Edward B. and Richard P. Howell, Untangling the
Web of Professional Liability, Risk Analysis and Re-
search Corp., 1976.
Jabine, William, Case Histories in Construction Law,
Cahners Books International, Inc., Boston, MA, 1973.
Jessup, W. Edgar, Jr. and Walter E. Jessup, Law and
Specifications for Engineers and Scientists, Prentice-
Hall, Inc., Englewood Cliffs, NJ, 1963.
Jones, Harry W., E. Allan Farnsworth, and William F.
Young, Jr., Cases and Materials on Contracts, the Foun-
dation Press, Inc., Brooklyn, NY, 1965.
Pierce, Jotham D., Jr., Construction Contracts 1977 Course
Handbook, Practicing Law Institute, 1977.
Pierce, Jotham D., Jr., Construction Contracts in the
80's, Practicing Law Institute, 1980.
Simon, Michael S., Construction Contracts and Claims,
McGraw-Hill, 1979.
Stokes, McNeil1, Legal Considerations of Construction
Subcontracts, Stokes, Boyd, and Shapiro, 1975.
Stokes, McNeill, Construction Law in Contractors'
Language, McGraw-Hill, 1977.
Volume II/B-4
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Sweet, Justin, Legal Aspects of Architecture, Engineering,
and the Construction Process, 2nd ed., West, 1977.
Tomson, Bernard and Norman Coplan, Architectural and
Engineering Law, 2nd ed., Van Nostrand Reinhold Co., New
York, NY, 1967.
Vaughn, Richard C.. , Legal Aspects of Engineering, 3rd ed. ,
Kendall-Hunt, 1975.
Walker, Nathan, Edward N. Walker, and Theodor K.
Rohdenburg, Legal Pitfalls in Architecture, Engineering,
and Building Construction, 2nd ed., McGraw-Hill, 1979.
Legal Briefs for Architects, Engineers, and Contractors,
McGraw-Hill, Biweekly.
E. INSURANCE AND BONDS
Derk, Walter T., Insurance for Contractors, 4th ed., Fred
S. Jones Co., 1980.
Rothschilf, Bernard, Construction Bonds and Insurance
Guide, American Institute of Architects, Washington,
D.C., 1973.
F. NEGOTIATION/ECONOM1C DECISION-MAKING
Taylor, George A., Managerial and Engineering Economy:
Economic Decision-Making, 2nd ed., D. Van Nostrand Com-
pany, New York, NY, 1975.
G. CONSTRUCTION MANAGEMENT
Clough, Richard H., Construction Contracting, John W.
Wiley, 1981.
Clough, Richard H. and Glenn A. Sears, Construction
Project Management, John W. Wiley, 1978.
Cushman, Robert F., ed., McGraw-Hill Construction Business
Handbook, McGraw-Hill, 1978.
Cushman, Robert F., Michael S. Simon, and McNeill Stokes,
The Construction Industry Formbook, Shepard's Inc., Di-
vision of McGraw-Hill, 1979.
Volume II/B-5
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9375.1-5
Douglas, Clarence, Construction Management, Prentice-Hall,
Englewood Cliffs, NJ, 1969.
Fisk, Edward R., Construction Project Administration, 2nd
ed., John W. Wiley, 1978.
Gorman, James E., Simplified Guide to Construction
Management for Architects and Engineers, Cahners Books
International, Inc., 1976.
Kavanagh, T.C., J.J. O'Brien, and F. Muller, Construction
Management - A Professional Approach, McGraw-Hill, USA.
McMahon, Leonard A., 1985 Dodge Guide to Public Works and
Heavy Construction Costs, McGraw-Hill, 1984.
O'Brien, James J., CPM in Construction Management, 3rd
ed., McGraw-Hill, USA.
O'Brien, James J., and Robert G. Zilly, ed., Contractor's
Management Handbook, McGraw-Hill, New York, NY.
Parker, A.D., D.S. Barrie, and R.M. Synder, Planning and
Estimating Heavy Construction, McGraw-Hill, USA, 1984.
Peurifoy, R.L., Construction Planning, Eguipment, and
Methods, 2nd ed., McGraw-Hill, USA, 1970.
U.S. General Services Administration, Using Construction
Management for Public and Institutional Facilities, Pub-
lic Technology Inc., Washington, D.C., March 1976.
The Construction Contractor, Federal Publications Inc.,
biweekly.
H. CHANGE ORDERS
New Jersey Department of Environmental Protection, U.S.
Army Corps of Engineers - New York District, U.S. EPA -
Region II, Guide for Preparation and Processing of Con-
tract Modifications.
U.S. EPA - Office of Water Programs Operations, Management
of Construction Change Orders, U.S. EPA, Washington,
D.C., 1983.
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I. CLAIMS
Engineering News Record, 1984 Spring Conference on
Construction Claims and Disputes for Owners, Contrac-
tors, Architects, and Engineers, Construction Education
Management Corp. and Engineering News Record, 1984.
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tions, Inc., 1982.
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Risks and Litigation, Cahners Books International, Inc.,
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Richter, Irv and Roy S. Mitchell, Handbook of Construction
Law and Claims, Reston Publishing Company, Inc., Reston,
VA, 1982.
Rubins, R.A., S.D. Guy, A.C. Maevis, and V. Fairweather,
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Volume II/B-7
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