NCD980602163_19810831_Warren County PCB Landfill_SERB C_Draft Interim Guidance - Cooperative Agreements with States Under CERCLA-OCR

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/C[_ <;t/JT.
INTERIM GUIDANCE
COOPERATIVE AGREEMENTS WITH STATES
LINDER THE
Co _ oP ftb/ltt./'lf./,IT
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION,
A.ND LIABILITY ACT OF 1980 (P .L. 96-510)
..:
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF EMERGENCY AND REMEDIAL RESP ONSE
AUGUST 3, 1981
TABLE OF CONTE NTS
I . Purpose
/
II. Cooperative Agreements - General
A. Preapplication Procedures
l. Initial Clearinghouse Review
2. Preapplication Assistance
B. Completir.g the As sistance Application
C. Submitting the Completed Application
0. EPA Review of the Applicatio~
E. Executing the Cooperative Agreement
F. Required Conditions
G. Special Conditions
l . I n t. er i m Pro g re s s Re po rt s
2. Expenditures
H. .l\rnendment~
III. Superfund Cooperative Agreements
A. General
B. Preapplication Procedures
l. Initial Clearinghouse Review
· 2. Preapplication Assistance
3. National Contingency Pl a.n
4. Co~ t Recovery
5. Access to the Site and Permits
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6. ()ff-Site Treatment, Storage, or Disposal ;:-acilities
7. Safety Pl ans
8. National Environmental Policy Act (NEPA)
9. ·Community Relations Plan
l 0. Laboratory Quality Assurance
11 . Evaluatio•! of Potential for Response by Others
12 . Cost-Sharing Assurances
a. Privately Owned Sites
b. Publicly Owned Sites
13 . Operation and Maintenance
0. Completing the Assistance Application
E. Submitting the Completed Appliccttion
F. EPA Review of the Application
G. Executing the Cooperative Agreement
H. Special Conditions
l. Interim Progress Reports
2. Expenditures
I. Amendments
J . Co n cl us i o n
IV. State Costs Eligible for Payment by the Funrl
A. El igib1e State Costs
l . CERCLA
2. EPA General Grant Regulations (40 CFR 30)
3. 0MB Circular A-87: Cost Principles for State and
Local Governments
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V. State
B.
C.
D.
Direct Costs
1. Contract Services
2. Response by State Employees
3 . Enforcement
4. Materials and Supplies
5. Equipment
Indirect Costs
Documentation of Direct Costs
l. Personnel
2. Contract Services
3. Travel
4. Materials
5. Equipment
6. Reconciliation
7. Project Close-Out
Agreements
A.
B.
EPA Responsibilities in a State Agreement
State Responsibilities in a State Agreement
VI. List of References
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UST OF TABLES
Sample Work Pl~ns
Applicatio~ Appr0val Process for Superfund
Cooperative Agreements
Timing of Agreements and Assurances
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I. PURPOSE
Section 104 of the Comprehensive Environmental Response, Compen-
sation, and Liability Act (CERCLA) of 1980 (P.L. 96-510) authorizes
the President to enter into a Cooperative Agreement or a Contract with
a State to allow appropriate response --removal or remedial action --
to a release within that State consistent with the National Contingency
Plan (NCP). By Executive Order, the President has delegated this authority
to the Environmental Protection Agency (EPA).
This document instructs the Regional Offices in how to use
Cooperative Agreements with the States for planning and implementing
planned removals and remedial actions under CERCLA (commonly called
"Superfund"). It does not address emergency actions (i.e., immediate
removals). Guidance on this type of response will be provided at a
later date. This document also provides guidance on agreements with States
when EPA has the lead responsibility for the response action.
A Cooperative Agreement may be site-specific or may cover responses
at more than one site; however, careful fiscal reporting will be necessary
to distinguish costs by site. This guidance covers procedures for site-
specific Cooperative Agreements only, but procedures for multiple-site
Cooperative Agreements will be basically the same.
When following the procedures described, the Regional Offices
should consult with their grants administration offices to ensure that
the Cooperative Agreement satisfies all requirements of the EPA General
Grant Regulations, 40 CFR 30.
The Federal Grant and Cooperative Agreement Action of 1977 and
the guidelines for its implementation prescribe which funding instrument
is to be used based on the nature and extent of the Federal/non-Federal
relationship. Under the Act, when a Federal agency is providing assistance
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(i.e ., transferring money, services, etc.) to a State or political sub-
division, and substantial Federal involvement is anticipated, a Coopera-
tive Agreement is the appropriate funding instrument . Generally, there
is substantial Federal involvement when there is :
o Joint operational involvement, participation, or collaboration
between the Federal agency and the State; or
o Intense monitoring by the Federal agency; or
o Federal agency review or approval of project phases within the
scope of the agreement; or
o Federal involvement as defined by special conditions in the
Cooperative Agreement.
Because of the anticipated high level of Federal involvement in
Superfund activities, the award official --either the Regional
Administrator (RA) or the Assistant Administrator for Solid Waste
and Emergency Response should execute a Coopere.tive Agreement
rather than a contract during this period of joint EPA/State parti-
cipation. (Oelegation of this authority is pending.) The legislative
history of CERCLA, Section 104 of the Act, and the existing NCP permit
EPA to execute Cooperative Agreements before the revised NCP is published
in final form.
The Cooperative Agreement assigns to the State and EPA preci s e
and clear responsibilities for each phase of the respo~se action. It
must describe the State's plan for the response action and EPA's
involvement in the action.
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Under a Cooperative Agreement, fund~ are generally transfe r red
to a State through a letter of credit. (See Section II-S.) For
Superfund Cooperative Agreements, the letter of· credit will be used for
projects budgeted at $1 million or less. To ensure accurate fiscal
management of the Trust Fund, EPA is seeking an exception from the
Office of Management and Budget to switch from letter of credit to
the advanced method of payment or cost reimbursement method of payment
for projects greater than $1 million .
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II. COOPERATIVE AGREEMENTS--GENERAL
The EPA General Grant Regulations and Implementation Guidelines
for the Federal Grant and Cooperative Agreement Act of 1977 are
always followed when entering into a Cooperative Agreement. The
following procedures apply to ill_ EPA Cooperative Agreements. When
entering into a Superfund Cooperative Agreement, however, the procedures
set out in Section III of this guidance (which are substantially the
same as these procedures with certain Superfund-specific modifications )
must be adhered to as well.
A. Preapplication Procedures
1. Initial Clearinghouse Review
0MB Circular A-95 requires potential applicants for Federal
assistance to notify clearinghouses in the jurisdiction in .which the
project is to be located of their intent to apply for assistance.
There may be two types of planning and development clearinghouses,
depending on the geographical location of the project within a State:
o State clearinghouses, which are designated by the Governor
and are usually State comprehensive planning agencies. In
some cases, however, State clearinghouses are State budget
or administrative offices.
o Areawide clearinghouses, which are normally comprehensive
planning agencies covering one or more counties .
The purpose of the notification of intent to app l y for Federal
assistance is to identify potential duplication and 1&ck of coordination
with other Federal or State projects, and to expedite clearinghouse
review of the completed assistance application package.
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The notice of intent consists of a completed EPA form
5700-30 and a summary description of the project, which should
include:
o The identity of the applicant agency, organization,
or individual.
o The geographic location, and a map if appropriate, of
the proposed project.
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o A brief description of the proposed project, including
type, purpose, general size or scale, estimated cost,
beneficiaries, etc.
o A statement as to whether the applicant has been advised
by EPA that environmental impact information must be
submitted.
o The Public Law (P.L. 96-510) under which assistance will
be sought. (After Superfund programs are assigned numbers
in the Catalogue of Federal Domestic Assistance, one of those
numbers should be used instead.)
o The estimated date the applicant expects to formally file
an application.
An applicant who does not notify the clearinghouses of his intent
to apply for EPA assistance must submit the completed assistance appli-
cation to the clearinghouses at the same time he submits it to the EPA.
Since clearinghouse reviews can take 30 to 60 days and funds cannot
be awarded until such reviews are completed, applicants are encouraged
to follow the initial clearinghouse review procedures described.
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2. Preapplication Assistance
General guidelines on preappl ication assistance appear in
40 CFR 30.300. After notifying the clearinghouses of intent to
apply for EPA assistance, the applicant must complete EPA form
5700-33 . Tnis is the standard assistance application form that
describes the intended project, budget, and cost-sharing terms .
Generally, the Regional Offices should work very closely with
the State in completing the application, thus reducing the time
and effort required to reach a mutually acceptable agreement.
B. Completing the Assistance Application
The assistance application should include, in addition to
EPA form 5700-33, a Statement of Work comprised of a work plan
narrative and the work plan itself .
The work plan narrative serves as the applicant's performance
commitment for the project .. It should include the milestones, tasks,
ongoing efforts and costs leading to accomplishment of the project
goals.
The work plan identifies specific activities required to
successfully complete the project, as well as the discrete tasks,
outputs, schedules, and budget for each activity.
C. Submitting the Completed Application
The State is required to submit the completed application
simultaneously to the appropriate clearinghouses snd the Regional
Office. If the State notified the clearinghouses of its intent to
seek assistance from the EPA and recei"ed c:omfllents on the prop·osed
project, a copy of the clearinghouse comments should be included
with the application package.
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D. EPA Review of the Application
The Regional staff reviews the application for legal and
administrative compliance and for technical quality and completeness .
If the State intends to award subagreements under the Cooperative
Agreement, the Regional staff must determine that the State has the
administrative capability to direct a contractor. At a minimum, States
are expected to follow the EPA General Grant Regulations and thei~
normal competitive procedures in awarding subagreements.
If the Regional staff determines that the State is capable
of accomplishing the activities specified in the application, a
recommendation to fund is made to the award official. The recommen-
dation takes the form of a Decision Memorandum transmitting the
assistance application ta the award official. This memorandum is
signed by the Superfund Coordinator or other appropriate line manager
(recommending official). The Decision Memorandum, which includes
a technical evaluation and recommendation to fund the project,
should designate a Project Officer for each Cooperative Agreement
to ensure continuity of Regional involvement.
E. Executing the Cooperative Agreement
If the decision is made to fund the project, the Regional
staff prepares a Grant Funding Order for the project budget period,
and a Commitment Notice guaranteeing that funds are available. This
package is then sent to the award official, who executes a Cooperative
Agreement. The Cooperative Agreement pac kage consists of:
o EPA Form 57OO-ZOA plus a Special Conditions Section;
o Grant Funding Order;
o Commitment Notice.
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Under a Cooperative Agreement, funds generally are transferred
to a State through a letter of credit. Under this method of financing,
the State agrees to abide by the following conditions:
o Cash drawdown will occur only when needed for its disburse-
ments.
o Cash disbursements and balances will be reported as required
by the EPA Letter of Credit Users Mariual.
o The same standards of timing and reporting wi11 be imposed
on secondary recipients, if any.
Award funds are transferred by EPA to the Las Vegas Accounting
Operations Office via a letter of credit after the Cooperative
Agreement has been signed. The Las Vegas Accounting Operations
Office will process accounting information and forward funds to
a local bank carrying the recipient's account. The State Project
Officer should make sure awarded funds are in the proper account.
If the State fails to comply with the above conditions, the
unobligated portions of the letter of credit may be revoked and the
financing method changed to a reimbursable basis.
F. Required Conditions
All Cooperative Agreements impose some requirements on the
recipient. For instance, the state will be asked to comply with
all applicable EPA assistance r ~gulations. (These regulations require
compliance with several Federal statutes incorporated by reference
in CERCLA, including the Davis Bacon Act, Contract Work Hours and
Safety Standards .Act, Solid Waste Disposal Act, National Envirbnmental
Policy Act, Civil Rights Act of 1964, National Historic Preservation
Act, Copeland Act, Federal Water Pollution Control Act, Disaster Relief
Act, and Motor Carrier Act.)
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In addition, the State will be asked to use small businesses and
small disadvantaged firms as sources of supplies and services whenever
practicable and consistent with the Statement of Work covered by the
Cooperative Agreement. The State should include a plan in the Statement
of Work, and submit it for EPA's review and concurrence. The plan should
provide these sources with the maximum oppor ·tunity practicable to
compete for subagreements or contracts to be performed using _EPA
monies .
G. Special Conditions
Special Conditions describe the involvement, participation,
and collaboration between the EPA and the State that is required
to accomplish their mutual objectives. Special Conditions define
the nature, character, and extent of anticipated EPA review or
approval of project phases within the scope of the agreement; the
degree of monitoring and oversight; and specific program requirements
that are not generally applicable.
l. Interim Progress Reports ...:
An important source of information for EPA is the State's
Interim Progress Report (40 CFR 30.635 .l), which must be submitted
to the Project Officer no more frequently than quaterly. This
requirement and mutually acceptable delivery dates should be included
as a Special Condition in the Cooperative Agreement. The report should
cover areas such as:
o Progress to date in accomplishing the activities the State
agreed to perform.
o Expenditures.
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o Any personnel pro bl ems .
o Equipment reeds.
o Any need for work plan, budgPt, or other changes.
Between the required performance reporting dates, the State
shall promptly notify the Project Officer, in accordance with 40
CFR 30.900(b), of events having significant impact upon the project .
2. Ex pend i tu res
Expenditures reports should include the information required
in the EPA Letter of Credit Users Manual (form SF-272) such as cash
on hand at the beginning of the reporting period, letter of credit
withdrawals, total receipts, total cash disbursements, gross dis-
bursements, Federal share of program income, net disbursements,
adjustments of prior periods, and cash on hanrl at the end of the
reporting period. The State's accounting and financial management
system must be able to track and report expenditures consistent
with the requirements of 40 CFR 30 and 0MB Circulars A-87 and A-102.
This requirement should be included as a Special Condition. (Specific
information required by EPA to manage the Superfund program is
discu s sed in Section III-H.)
H, Amendments
During the course of the project, the EPA or the State may seek
modifications through an Assistance Amendment under EPA's General
Grant Regulations (40 CFR 30.900.1). Project changes require a
forma 1 amendment if they:
o Alter the cost or time of performance of the project
or major part of the project, or
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o Substantially alter the objective or scope of the
project, or
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o Substantially reduce the time or effort key personnel
devote to the project .
Administrative changes do not require formal amendments; however,
such changes require prior written approval from the Regional Project
Officer.
Procedures for making formal assistance amendments are found
in the EPA General Grant regulations. Amenc!merts are made on EPA
form 5700-20B .
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III. SUPERFUND COOPERATIVE AGREEMENTS
A. General
Superfund Cooperative Agreements may be negotiated with
States that are willing and able to assume a managment role
for response actions. Such agreements must follow interim
program guidance provided to date and satisfy all the require-
ments described in Section II.
B. Preapplication Procedures
l . Initial Clearinghouse Review
When the Interim List of Priority Sites is published, potential
applicants should notify each clearinghouse of their intent to seek
Superfund assistance. Since EPA and the States will develop plans
for responses at these sites, States should notify clearinghouses
(as discussed in Section II-A) of the response actions. Clearinghouse
review is required at the time an application is formally submitted
to EPA. Review is usually not required when changes are made to an
exising Cooperative Agreement if such changes do not substantially
alter the scope and purpose of the proposed action.
2. Preapplication Assistance
The Regional Offices and the States must work together to reach
a mutually acceptable Superfund Cooperative Agreement delineating
Federal, State, and joint responsibilities. The more issues that can
be settled in the preapplication stage, the smoother the later stages
will be. Preliminary work to develop detailed Statements of Work,
refine costs estimates, and assign responsibilities should commence
as soon as possible.
The following paragraphs discuss briefly the requirements that
should be addressed during preapplication assistance with the State.
The States and EPA must agree mutually upon the activities to be funded.
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Responsibilities that cannot be scoped out in the work plan
(see attached sample work plans) should be addressed by Special
Conditions.
3. National Contingency Plan
The activities covered by Superfund Cooperative Agreements
must be consistent with the existing NCP, dated March 19, 1980, and
the changes required by the provisions of Section 105 of CERCLA
as interpreted by interim guidance.
4. Cost Recovery
EPA will use State documentation in its cost recovery actions.
Therefore, the State must have procedures in place to assure the legal
chain of custody of samples and materials taken from the site. In
addition, the State must have a system that will document, with great
detail, those cost incurred at the site. Additional guidance on cost
recovery is being developed by the Policy and Planning Unit, Office
of Waste Programs Enforcement.
5. Access to the Site and Permits
The State must secure the necessary rights-of-way, easements,
or other authorities necessary to allow project activities to be
carried out at the site as specified by the Statement of Work, and
all permits required by State or Federal statutes to conduct project
activities at the site.
6. Off-Site Treatment, Storage, or Disposal Facilities
The State must when EPA determines it to be necessary, assure
the availability of an off-site treatment, storage, or disposal
facility acceptable to EPA and in compliance with the requirements
of Subtitle C of the Solid Waste Disposal Act, as amended.
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I-' +' SAMPLE-SAMPLE WORK PLAN: REMED[AL INVESTIGA'fIO,~ (Sample work plans for all remedial/removal activities are under development.) Activity: REMEDIAL INVESTIGATION Project(s): (Name of Site) Activi~y Number: I Workyears: f'unds(xl03): ----------------=~-~-~==~~~============~-~-~--============irx=, -··-.;.=..; --· 7--=z:::s =::z· = --~ '.:!:'.:7~'ik I nc~u:ription of l'l;_mn,_:i_l~ (example,.;) _f\!<J. . -------I. !Comprehensively determine the nature and extent of the problem and gather data to support conceptual designs and cost estimates of alternative remedial actions. I-1. !Develop safety manual for Remedial investlg;-itlon t,isks. I-2. ~onduct appropriate community relations activities. I-3. I-4. I-5. I-6. I-7. I-8. I-9. onduct geophysical investigations. onduct geological and hydrogeological investigations. onduct soil sampling and analysis. onduct hazardous waste characterization. onduct ground water monitoring, sampling and analysis. onduct surface water monitoring, sampling and analysis. onduct air monitoring, sampling, and analysis (stability and security of site). I-10. \Identify physical site condition (stability and security). I-11. ttdentify critical environmental area (flood plain, etc.). I-12. ~etermine pathways of contamination. I-13. Submit draft report to EPA for review and approval. I-14. rubmit final report (incorpora~ing all comments) to EPA for approval. (~lJ~~ Schcclul I.! V eport Target Date: anual By: (date) everal By: (date) urvey By:(date) nvestigation By: (date) esults of By:(date) analysis urvey By:(date) esults of By: (date) analysis esults of I By: (date) analysis esults of By: (date) analysis eport By: (date) eport I By: (date) eport I By:(date) raft Report I By: (date) inal Report By: (date) C Al )> .,, -I
t--' V1 SAMPLE SAMPLE WORK PLAN: COMMUNITY RELATIONS (Sample work plans for all remedial/removal activities are under development.) Activity: Community Relations Project(s): (Name of Site) Activity Number: II Workyears: Ta~ I -r:J'~ ~9:j_ption oE Pl;m11rxl 'l';is~:s (examples) II. !Conduct community relations activities to ensure that actions taken at (sitel are undertaken with the support of the local public II-1. !Analyze level of citizen concern and identify constituency II-1-a,Interviews II-1-b Review previous press coverage II-1-c Review information on history of site II-2. !Develop fact sheets about the site II-3. !Conduct citizen's advisory committee meetings coincide with major activities at the site II-4. !Prepare newsletters on progress and results to coincide with major activities at the site II-5. !Press conferences II-6. !Workshops for concerned citizens I I-7. I Public meetings to I I-8. Responsiveness summaries for all meetings/hearings I Funds(xl03): ~~Lput Schedule Plan I Target Date: Report & I By:(date) mailing lis Fact sheets Meetings Newsletters Press conferences Workshop materials Meetings Report I By: (date) By: (date) By: (date) By: (date) By: (date) Before remedy is selected and before construction begins. At conclusion of remedial action. C Al )> .,, -I
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7. Safety Plans
The State needs safety plans for each work plan_ activity (e.g.,
field investigation, feasibility study, design, and construction)
to protect the health and safety of personnel involved in response
actions. The State safety plan must be consistent with:
o Section lll(c)(6) of CERCLA.
o EPA Order 1440.2 --Health and Safety Requirements for
Employees Engaged in Field Activities.
o EPA Order 1440.l --Respiratory Protection.
o EPA Occupational Health and Safety Manlal.
o Other EPA guidance as provided.
8. National Environmental Policy Act (NEPA)
The requirements of NEPA must be addressed through project
activities described in the Statement of Work. Interim guidance
an compliance with NEPA dated May 18, 1981, should be followed.
9. Community Relations Plan
A Community Relations Plan should be developed for and conducted
concurrently with the response action. Plans should be consistent
with interim program guidance on Community Relations Plans.
10. Laboratory Quality Assurance
States choosing to assume full responsibility for sample analysis
must assure EPA that they can provide high quality in-house analytical
services, capable of producing scientifically and legally defensible
results. Except in cases where enforcement actions are not contemplated
because a financially viable, responsible party cannot be identified,
the following areas should be covered in preapplication negotiations:
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o Intact chain of custody procedures;
o Adequacy of laboratory facilities to perform the work;
o An existing quality assurance/quality control (QA/QC) program;
o Participation in EPA laboratory intercomparison study and
data audits;
o Adequate use of blanks, duplicates, spikes, and surrogates;
and
o Use of "in process" controls to alert laboratory personnel
to internal problems.
EPA's Hazardous Response Support Division, in cooperation with the
Environmental Monitoring System Laboratory in Las Vegas, is developing
alternative approaches to obtaining good analytical results. Guidance
on using these approaches is forthcoming.
States lacking adequate analytical expertise or laboratory equip-
ment may use EPA's existing National Analytical Contract through their
Regional Project Officers. If this option is used, details for
obtaining such services should be included in the Cooperative Agreement.
(Regional Surveillance and Analysis Divisions are responsible for
coordinating the use of the National Analytical Contract.)
11. Evaluation of Potential for Response by Others
Identifying and evaluating a potential for response by others
are activities that the State and/or EPA may conduct.Interim guidance
on this ·issue is being prepared by the Policy and Planning Unit of the
Office of Waste Programs Enforcement.
12. Cost-Sharing Assurances
As part of the Cooperative Agreement the State must provide
the cost-sharing assurances required in Section lO4(c)(3) of CERCLA.
The State should specify how it intends to satisfy these requirements
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and provide a schedule of actions that need to be accomplished . These
assurances may be written as a Special Condition in the Superfund
Cooperative Agreement.
The State must provide a firm commit ment to contribute, or ma ke
available when needed, its share of the cost of the project (10%
or 50 %) before the final design activity begins. However, the
State~ requirement to contribute begins at the time of construction.
This commitment should be made to the awarding official by the official
who has the authority to guarantee that the State's contribution
(including costs for all future operation and maintenance) will be
provided before construction begins. Regional counsel should be
consulted to determine what constitutes a firm commitment (for example,
a letter from the Governor, State Attorney General, or otner appropriate
official). Timing of agreements, assurJnce s , and commitments is dis-
played in the table at the end of Section V.
The methods the State use to meet the cost-sharing commitments will
vary . Acceptable methods may include "up front" cash payments, certain
in-kind services, the credit from Section l04(c)(3)(C)(ii), or a firm
intent (with schedule and milestones) to seek funds. (See Section IV.)
a Privately Owned Sites
When the site was privately owned at the time of disposal of
hazardous substances and the Statement of Work includes final design
and construction activities, the State must assure the following cost-
sharing provisions of Section l04(c)(3) to EPA before the design activity
commences:
o The State must agree to contribute (10 %) of the cost of
remedial action, including operation and maintenance (O&M)
at the site.
o The State must agree to operate and maintain the
response action for the expected life of that action
as designated in the Statement of Work.
b .Publicly Owned Sites
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When the .site was publicly owned at the time of disposal of
hazardous substances, the State must assure the following cost-
sharing provisions of Section 104(c)(3) to EPA before EPA can
approve any response actions:
o The State must agree to contribute at least (50%) of
the cost of all response actions, including O&M, at
the site.
o The State must agree to operate and maintain the response
for the expected life of that response as designated in
the Statement of Work.
13. Operation and Maintenance (O&M)
The Cooperative Agreement should specify if possible the terms
and conditions for annual funding of O&M costs by the EPA and the
State. The State and EPA should mutually agree on the minimum admini-
strative and operational mechanisms that will be required during O&M .
The Cooperative Agreement should include a schedule of milestone dates
for implementation of the O&M process, and assurances for the following
State requirements:
o Identification of the State's financial mechanism for annual
funding O&M activities (for example, from special user fees,
State or local taxes, court judgments, general revenues, bonds,
special appropriations, or legislative authority).·
o Identification of the organizational unit responsible for
administering O&M activities. This may be an existing State
or local agency or a special authority set up for this purpose
(sewer or water districts, for example).
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Interim guidance an how to calculate annua l estimates of O&M
costs will be provided at a later date .
D. Completing the Assistance Applicati on
In addition to EPA form 5700-33, the applicant must include
a Statement of Work comprised of a work plan narrative and the work
plan itself. As many of the major Superfund issues (described in
C above) as possible should be incorporated in the Statement of Work;
the rest should be included as Special Conditions .
E. Submitting the Completed Application
The State must submit the completed application simultaneousl y
to the clearinghouses and the Regional Office for review. If the
State notified the clearinghouses of its intent to seek assistance from
the EPA, final clearinghouse reviews can be facilitated.
F. EPA Review of the Application
EPA's review of the application is the same as that described
in Section II-0. The Regional staff reviews the application for
technical quality and completeness, and submits it to the award
official with a recommendation for funding .
G. Executing the Cooperative Agreement
if:
The award official will execute a Superfund Cooperative Agree ment
o The Cooperative Agreement is complete and technically
satisfactory.
o The award official determines that the State is capable of
accomplishing the activities specified in the applicati on.
o Fund monies are available.
Requirements for transferrin1 fLnds to the State via letter of
credit are applicable to Superfund Cooperative Agreements. (See
Section II-E.)
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H. Special Conditions
As discussed in Section II-Fand G, some conditions are
required pursuant to 40 CFR 30. For each State, depending on the
problems at the site, some programmatic special conditions may also
be required. As stated in this Section, Superfund issues that are
not incorporated into the work plan may be included as Special
Conditions.
1. Interim Progress Reports
Quarterly progress reports (see Section II-H) should include the
following information for each site activity covered by the Cooperative
Agreement:
o Expenditures to date and expenditures since the previous
report.
o Estimates of work completed (as a percentage of the total
work to be done on that activity), with a description of the
basis for the estimates.
o Estimated variance (cost and time) expected at project
completion, based on current project status.
2. Expenditures
Section II-H discusses expenditures. However, the exigencies
of Fund management may require a review of all Superfund Cooperative
Agreements more frequently than quarterly. To ensure consistency in
reporting, the state should report quarterly its total expenditures
incurred at each site. Expenditures against each Cooperative Agree-
ment should be itemized within the categories identified on the
Federal Cash Tr3nsactions Report (form SF-272) which is used by States
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operating on a letter of credit. In addition, the quarterly
report should itemize the following expenditures:
0 Personnel.
0 Fringe Benefits.
0 Travel.
0 Equipment.
0 Supplies.
0 Contracts.
0 Construction.
0 Direct Charges.
0 Indirect Charges.
0 Total Charges.
DRAFT
Between the required performance reporting dates, the State shall
promptly notify the Project Officer of any events, such as project
overruns and underruns,having significant impact on the project.
I. Amendments
Administrative or formal amendments are likely to be required as each
activity is completed and more is learned about conditions on the site.
For example, if the initial activity covered by the Cooperative Agree-
ment is the feasibility study, amendments typically will be needed prior
to design and prior to construction. The procedures described in
Section ·II-H should be followed when amending Superfund Cooperative
Agreements.
J. Conclusion
The following figure displays the Superfund Cooperative.Agreeme nt
process discussed in this Section.
22
APPLICATION APPROVAL PROCESS FOR
SUPERFUND COOPERATIVE AG~EEMENTS
Sequence of Events Actions Required By
EPA
Preapplication Phase
1 -EPA ranks sites:
o Interim priority list X
o National priority list
2 -STATE notifies
Clearinghouse(s) of intent
to seek assistance:
o Form 5700-30
o Summary description
of project
3 -EPA allocates funds for
response actions at ranked
sites. X
4 -EPA/STATE negotiate
Statement of Work (including
Superfund requirements):
o Work plan narrative
o Work plan
o Schedules
o Budgets
o Use of State employees and equipment
or
o Subagreement/contract.
Review Phase
5 -STATE:
o Prepares assistance
application package
-Form 5700-33
-Statement of Work
o Designates project
manager.
22a
STATE EPA/STATE
X
X
X
EPA STATE EPA/STATE
Review Phase (con't)
6 -STATE forwards completed
application package to EPA
and Clearinghouses. X
7 -EPA:
0 Reviews St ate assistance
application for
-Technical quality X
-Completeness
0 Evaluates State's
capability to award and
direct contracts.
8 -STATE forwards Clearinghouse
review(s) to EPA. X
9 -EPA decides:
0 To fund (must have
clearinghouse review) or
0 Not to fund -STOP-X
10 -EPA prepares ( i f project to
be funded):
0 Grant Funding Order
0 Commitment notice X
0 Special conditions
Award Phase
1 1 -EPA:
0 Executes award
--Form 57 00-20A
--Special Conditions X
0 Designates project officer
0 Sends award to State
12 -STATE:
0 Accepts terms and
conditions
0 Si g n s agreement (Form X
5700-20A)
0 Sends signed agreement
to EPA
13 -EPA transfers funds to X
St ate Vi a letter-of-credit
2 2 b
Action Phase
14 - S.TATE:
o Negotiat~s subagreements
o Lets contracts
o Begins activities
authorized in Statement
of Work
15 -EPA/STATE review, concur,
approve outputs in work plan
through completion of project.
16 -STATE submits quarterly
reports:
o Progress at site
o Expenditures ·
17 -EPA reviews quarterly
reports to ensure
consistency with
Statement of Work.
18 -STATE submits final report
for budget period.
19 -EPA reviews and accepts
final report.
20 -EPA/STATE:
o Closeout or
o Amend Cooperative
Agreement
2 2 C
EPA STATE EPA/STATE
X
X
X
X
X
X
X
DRAFT
IV. STATE COSTS ELIGIBLE FOR PAYMENT BY THE FUND
A. Eligible State Costs
Eligible State costs are those that are authorized by Section
l ll of CERCLA .·
State costs paid from the Fund m11st also be :
o Directly allocable to a particular response;
o Reasonable;
o Within the scope of the response action and necessary
for the accomplishment of the response; and
o Allowable in accordance with 0MB Circular A-87 and EPA
Policy.
Cost incurred by a State in carrying out the following activities
mny be paid by the fund if authorized in a Cooperative Agreement. For
example, under a Cooperative Agreement, activities that have been
mutually agreed upon would be eligible under CERCLA, but not all
costs incurred in executing the Cooperative Agreement would be allowable .
The technical preparation of a contract scope of work and the technical
management of that contract would be allowable for the following eligible
activities:
o Remedial Investi(Jation
o Feasibility Study
o Final Remedial Design
o Remedial Implementation
o Operation and Maintenance
o Enforcement/Litigation
o Planned Removal
2 3
DRAF T
B. Direct Costs
Costs incurred in carrying out an activity at a site approved
via a Cooperative Agreement are listed below. In all cases, costs
must be eligible according to CERCLA and allowable, allocable, and
reasonable in accordance with 0MB Circular A-87 and EPA general policy.
1. Contract Services
When a State is managing a response action using subagreements,
the Cooperative Agreement may cover the costs of the time (including
base salary) a State employee devotes to functioning as Project
Officer conducting technical review and managing a contract. The
Cooperative Agreement may include necessary travel associated with
carrying out a response action, as well as the costs the Project
Officer incurs in preparing technical contract specifications in the
Request for Proposal (RFP) or directive of work. Other costs not
directly part of preparing the technical contract specification or
of directing, reviewing, and managing the contract ---such as the
costs of nontechnical aspects of procurement, maintenance of the
State accounting system, and costs of staff supervising the Project
Officer --are covered as indirect costs subject to the requirements
of 0MB Circular A-87 . These costs may not be charged as direct costs.
2. Response by State Employees
Where a State is taking a response action using State employees,
the Cooperative Agreement may cover the costs of the time State
employees devote to working directly on the response action and the
portion of the ti me their first-level supervisor devotes on scene to
managing their work. The Cooperative Agreement may include necessary
24
DRAF T
travel of the Project Officer. Other costs, such as second-level
supervisory time, payroll, and accounting, are covered as indirect
costs and are subject to the requirements of 0MB Circular A-87 and
may not be charged as direct costs.
3. Enforcement
Where a State is providing enforcement actions, the Cooperative
Agreement may cover the time a State attorney or technical staff
member devote s directly to the case and any litigation costs directly
allocable to the enforcement case. This includes expert witnesses
and court costs. The Cooperative Agreement may also include all
necessary travel costs of staff working directly on the case.
Supervisory time, accounting, etc. are covered as indirect costs
subject to the requirements of 0MB Circular A-87.
4. Materials and Supplies
Where a State is providing materials and supplies, the Cooperative
Agreement may cover the direct cost and materials and supplies necessary
for carrying out the response action.
5. Equipment
Where the State is providing equipment, the Cooperative Agree-
ment may cover the direct costs of equipment (subtracted from its
residual value) necessary for carrying out the response action.
C. Indirect Costs
Indirect costs are those costs:
o Incurred for a common or joint purpose ben ef iting more
than one cost objective; and
o Not readily assignable to the cost objective specifically
benefited, without effort disproportionate to the results
achieved.
25
DRAF T
The Fund will pay indirect State costs computed according to
the principles in 0MB Circular A-87 for determing the allowable
indirect costs of programs administered by State or local govern-
ments . The principles are designed to provide that Federally
assisted programs bear their fair share of direct and indirect costs.
As part of negotiating the Cooperative Agreement, EPA and the
State will develop a fi xed rate for computing indirect costs relative
to the direct cost base consistent with the requirements of 0MB
Circular A-87.
D. Documentation of Direct Costs
For all direct costs, various logs, records, and files should
be maintained by the State to establish an audit trail. The trail
should begin with the site-specific financial documents such as
contractor vouchers, lead to standard quarterl y reports to EPA, and
continue up to and through the project period of the Cooperative
Agreement. Such documentation (for example, project logs, purchasing
and contracting files, methods of equipment usage and /or depreciation,
and periodic reconciliation of such records) should cover expenses
incurred at the site from January 1978, to enactment of CERCLA
(December 11, 1980). The following paragraphs describe in more
detail the documentation required for different categories of costs.
1 . Personne 1
Compensation for employees directly employed on a response action
or enforcement case may be included as a direct cost. Compensation
includes all remun eration, paid currently or accrued, for se~vices
rendered during the period of performance under the Cooperative Agree-
ment. Compensation includes wages and salaries.
26
DRAF T
State employees assigned to Superfund projects should be
classified and paid according to the prescribed State personnel
structure and procedures. Similarly, time records or other project
documentation ·prepared at the time of the actual work and verified
by the supervisor should establish clearly that the employees claimed
under the project actually worked on the project for this time.
Furthermore, the State payroll system should be capable of tracking
the amount of employee's time spent on activities covered by the
Cooperative Agreement, as well as on other projects, thus separating
allowable personnel costs.
2. contract Services
To properly document costs of contract service, a State agency
should maintain a file of procurement requests and proposals to show
that is properly procured the services at reasonable prices. For
example, records should be available to show that procurement was
made in accordance with established State procedures, that costs
were claimed in accordance with contract provisions, and that
contractors were paid.
In addition, contractor vouchers or similar documents should
identify the specific site-by-site work performed and should enumerate
personnel hours and travel incurred, materials and supplies consumed,
and equipment used site-by-site.
3. Travel
Allowable travel and per diem of State employees directly employed
on a response action should be recorded by site or by enforcement case
on the document enabling the travel. Such documents include, for
example, car rental receipts, preauthorized travel vouchers, per diem
2 7
DRAF T
requests for State employees, requests for reimbursement of car
mileage, and out-of-pocket expenses such as tolls or lodging.
4. Materials
The State should maintain inventory logs indicating when the
materials were ordered and procured, and project logs recording
when the materials were delivered and used on the site . Purchasing
records should justify that the costs were charged based on actual
prices less all discounts, rebates, and allowances. Withdrawals
from general stores or stockrooms should be charged according to
recognized methods of transfer pricing or inventory accounting --
such as first in first out (FIFO) or average cost --if the cost is
different from actual procurement cost.
5 . E g u i pme n t
To properly document equipment costs, State purchasing logs
must record when the equipment was procured and the cost paid in
accordance with State procurement standards. The project log
should indicate when the equipment was used on the project. If
equipment costs are based on usage rates, the State should use a
standard depreciation or usage method and document the initial
costs, expected life, and residual value of the equipment. (See 0MB
Circular A-102, Attachment N.)
6. Reconciliation
The State should have an overall accounting method and system
for reconciling the records noted above. Such a method should
reconcile tracking of payroll and travel; pruchasing of equipment
and materials and supplies; and reporting of contract-related costs
(including requests for funds from the EPA). Such an accounting
system should meet the specifications included in the requirements
for approval of the letter-of-credit financing mechanism.
7 . Project Close-Out
Close-out should be consistent with instructions in EPA
Letter of Credit Users Manual, which require a final report on
expenditures and disposition of equipment.
29
DRAFT
DRAF T
V. STATE AGREEMENTS
A State agreement is developed when EPA has the lead respon-
sibility for managing a response action. This type of agreement is
a tool to exchange information, coordinate decision-making with key
State and local officials, and integrate Federal and State programs to
the maximum extent possible. The goal is to facilitate eventual
delegation of Superfund responsibilities to the States.
A State agreement is appropriate when:
o There is no Cooperative Agreement.
o The State does not have the technical, legal, or
administrative capabilities to manage Superfund
activities.
0
A.
The State prefers not to assume site management
responsibilities.
EPA Responsibilities in a State Agreement
When EPA has the lead responsibility for managing a response
action, it will provide overall management and direction for activities
at a site usually via one of its architectural and engineering (A&E)
zone contracts. At the mini mum, EPA wi 11 :
o Ensure that the proper contracting mechanism is put into
effect and be responsible for coordinating all contractual
matters relating to the project.
o Designate a Regional Project Officer who will provide overall
coordination and management of the activities covered by
the agreement.
o Coordinate the development and implementation of the Statement
of Work and associated schedule.
o Develop necessary cost estimates.
30
o Develop and implement a Community Relations Plan.
o Coordinate enforcement efforts and issue demand
letters when appropriate.
o Manqge daily operations to the extent necessary and
seek advice of the Regional Response Team (RRT) and
State at key decision points .
DRAFT
o Obtain any Federal permits that may be required to facilitate
the response action.
B. State Responsibilities in a State Agreement
A State agreement may be used to cover EPA activities up to
and including conceptual design of a response action. The State must
enter into a Cooperative Agreement when it is required to contribute
a share of the costs of the response action and desires to use in-kind
services as part of its contribution .
Activities covered by the State agreement must be consistent with
the NCP, and the State should participate fully in deliberations of
the RRT. At the minimum, the State should agree to:
o Designate a State Project Coordinator who will serve as
the State's representative throughout the project and provide
the coordination and direction desired by the State.
o Participate in the development and implementation of State-
ments of Work and project schedules.
o Review progress at the site with EPA as activities are
performed.
o Participate in development and implementation of the
Community Relations Plan and assist in coordinating the
activities covered by the plan with other State and local
officials.
3 1
o Provide iccess to necessary file information.
o Ensure inter-departmental coordination.
o Provide legal capabilities necessary to ensure site
access and acquire ~ny necessary State permits .
These requirements apply to all sites. Some requirements
vary according to ownership of the site. When:
o A site was privately owned at the time of disposal
DRAF T
of hazardous substances, the State Agreement must
describe how the State will assure that it will contri-
bute the required 10% of the cost of remedial action,
including O&M.
o A site was publicly owned at the time of disposRl of
hazardous substances, the State agreement must describe
how the State will assure that it will contribute the
re(]uired 50% of all response actions, including O&M.
See the attached chart for timing of agreements and assurances.
3 2
SITE RESPONSE PHASES Requirements before RESPONSE ACTIONS Other Than Planned Removals (e.g., Remedial Investi-gation, Feasibility Study) Requirements before Starting FINAL DESIGN Requirements tie fore Starting CONSTRUCTION DRAFT STATE AGREEMENTS AND ASSURANCES STATE LEAD Privatelt Owned Sites o Must have Cooperative Agreement o State assures: -10\ share of remedial costs including O&M -off-site disposal. o State provides firm _ commitment of 10\ share of remedial costs and O&M for operable units. o State conlr1hutes annual share 6f implementation cost for oper8ble units Publiclt Owned Sites o Must have Cooperative Agreement o State assures: -50% share of all response costs and O&H -off-site disposal. -State contributes annual share of response cost o State provides firm commitment of 50% share of remedial cost and O&M for operable unite o State contributes SO% share of all response costs (design) o State contributes annual share of all remedial costs for operable units EPA LEAD Privatelt Owned Sites o Hust have State Agreement o State assures: -l O \ s ha re of remedial costs including O&M. -off-site dispo-sa 1 • o State provides firm commitment of 10% share of remedial costs and O&M for operable units o State contributes annua 1 share of implementation costs for operable units. Publiclt Owned Sites o Must have State Agreement o State assures: -50% share of costs including O&H -off-site disposal -State contributes annual share of response cost o State provides firm commitment of 50% share of remedial cost and O&M for operable units o State contributes 50% share of all response costs o State contributes annual share of all remedial costs for operable unite
equirements before tart1ng O&M equirements before tarting PLANNED EMUVAL {when pplicable) o State contr1butes annual share of O&M costs. o Hust have Cooperative Agreement when: -$1 million or 6 months expires and -there is O&H (State contributes 10% share) (Planned removal action must be consistent with reined ial act ion) o State contributes annual share of O&M costs. o Must have Cooperative Agreement. o State contributes 50\ share of all response costs; including O&M. (Planned removal action must be consistent with remedial action) o Must have Cooperative Agreement. o State contributes annual share of O&M costs. o May have State Agreement, o Hust have Cooperative Agreement when: -$1 million or 6 months expires and -there is O&H (State contributes 10% share) (Planned removal action must be consistent with remedial action) DRAFT o Must have Cooperative Agreement. o State contributes i1nnual share of O&M costs. • o Hay have State Agreement o Hust have Cooperative Agreement If there Is O&H. o State contributes 50\ share of cost of al 1 response costs, including O&M. (Planned removal action must be consistent with remedial action)
., DR AF T
VI. LIST OF REFERENCES
The following documents, which should be available through Regional
grants administration offices, have been referenced in this interim
guidance.
EPA General Grant Regulations (40 CFR 30)
Federal Grant and Cooperative Agreement Act of 1977
EPA Implementation Guidelines for the Federal Grant and
Cooperative Agreement Act of 1977
0MB Circular A-95 (Federal Register, January 13, 1976)
EPA Form 5700-30
Application for Federal Assistance, EPA Form 5700-33
Cooperative Agreement, EPA Form 5700-20A
Grant Funding Order, EPA Form 5700-14
Commitment Notice, EPA Form 2550-9
EPA Letter of Credit Users Manual
0MB Circular A-102, Attachment N&O
Assistance Amendment, EPA Form 5700-20B
0MB Circular A-87
..
GLOSSARY OF TERMS
To assist users of this guidance document, some terms are
defined here. The definitions may differ slightly from those used
in other guidance documents issued by the Office of Emergency and
Remedial Response. These differences will be resolved as implementa-
tion of CERCLA proceeds and the revised National Contingency Plan is
published.
Response action: A broad term covering immediate removal, planned
removal, and remedial actions taken under CERCLA in response to
DRAFT
a release. Restoration or rehabilitation of natural resources is
not covered.
Immediate removal: An emergency response required within hours or days
to deal with an actual or potential significant threat to human health,
the environment, or real or personal off-site property. An immediate
removal is meant to stablize the situation and to avert the threat of
immediate harm.
Planned removal: A response that may allow several days or weeks for
planning but still requires expeditious attention to reduce imminent
and substantial dangers to public health or the environment. Planned
removals may involve complete cleanup or measures that may be part of
a subsequent remedial action.
Remedial action: An action intended to provide a permanent resolution to
the release. The action probably will require a longer time and
possibly more expensive efforts to implement. A remedial action
seeks to prevent or minimize the release or threatened release of
hazardous substances so that they do not migrate to cause substantial
danger to present or future public health, welfare, and the environment .
Remedial planning: An early phase of a remedial response action, which
may include remedial investigations, feasibility studies, and final
remedial design.
Remedial investigation: An investigation intended to gather the data
necessary to l) determine the nature and extent of problems at the
site; 2) establish cleanup criteria for the site; 3) identify pre-
liminary alternative remedial actions; and 4) support the technical
and cost analyses of the alternatives.
Feasibility study: A study intended to l) evaluate alternative remedial
actions from a technical, environmental, and cost-effectiveness pre-
spective; 2) recommend the cost-eff ective remedial action; and 3) prepare
a conceptual design, cost estimate for bu dgetary purposes, and a pre-
liminary construction schedule.
Final Remedial Design: A phase of a remedial action where the selected
remedy is clearly defined (that is, site cleanup plan, relocation
plan, or engineering drawings and specificactions) in a bid package
so that the remedy can be implemented in the field.
35
DRA FT
Remedial implementation: All activities --for example, construction,
provision of new water supplies, or relocation of inhabitants --
required to meet the stated objective of the approved remedial action.
Cost recovery: The process by which Federal costs of response actions
and damages to natural resources are recovered from responsible persons.
Operable unit: A portion of a response action that, by itself, stops or
mitigates a release or threat of release and needs no additional
action to perform its function. The phrase is used in defining a
planned removal. Examples of operable units: a secure fence, a
dike, removal of drums containing explosive waste, and provision
of alternative water supplies.
State Project Officer: Designated official responsible for direct mana gement
of the activities covered in a Cooperati ve Agreement.
State Project Coordinator: Designated offical who represents the State
during an EPA response action not covered by a Cooperative Agre ement.
Regional Project Officer: Designated official who coordinates and manages
the activities covered in a Cooperative Agreement. Also, manages and
coordinates an EPA response action addressed in a State agreement.
36