NCD980602163_20000107_Warren County PCB Landfill_SERB C_Phase III Design - Proposal to Expedite the Warren Co PCB Landfill Detoxification-OCR

1/MACTEC
January 7, 2000
Mr. Mike Kelly
North Carolina Department of Environment
and Natural Resources
1601 Mail Service Center
Raleigh, N.C. 27699-1601
SUBJECT: Proposal to Expedite the Warren County PCB Landfill Detoxification
Dear Mr. Kelly:
As requested by Dollie Burwell and as we have discussed with you and Pat Backus, the
following is a proposal outlining how and why the State should expedite implementation
of the Warren County PCB Landfill Detoxification.
The proposal summarizes the tremendous benefits of proceeding under a phase funded
approach. It is the opinion ofMactec ETG and BFA that such an approach comes closest
to meeting the needs of all project stakeholders.
We formally request your timely consideration of the approach outlined in the document
as a means of meeting the detoxification goal.
RJB:eas
Cc: Pat Backus, NCDENR
Dollie Burwell, CAB
Sincerely,
Mactec .BTG
/./~~'
//Ro~. ~asckai
President
! ~.., _ __.-v/ --cpf_({_Qj
Patric . .
President
5205 Militia Hill Road, Plymouth Meeting, PA 19462
610.941.9700, (Fax) 610.941.9707, (Home Page) www.mactec.com
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PROPOSAL TO EXPEDITE THE
WARREN COUNTY PCB LANDFILL DETOXIFICATION
CONSTRUCTION AND REDEVELOPMENT
Prepared for:
North Carolina Department of Environment
And Natural Resources
And
Warren County Citizens Advisory Board
Submitted by:
Mactec ETG
&
Barnes, Ferland and Associates, Inc.
January 11, 2000
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PROPOSAL TO EXPEDITE THE
WARREN COUNTY PCB LANDFILL DETOXIFICATION
CONSTRUCTION AND REDEVELOPMENT
1.0 INTRODUCTION
2.0 PURPOSE
3.0 CONSTRUCTION TEAM STRUCTURE
4.0 CONSTRUCTION IMPLEMENTATION
4.1 Justification for Expedited Construction Implementation
4.2 Negotiated Award Justification
5.0 CONTRACT STRUCTURE
6.0 COMMUNITY OUTREACH
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1.0 Introduction
The State of North Carolina owns and maintains a closed landfill containing soils
contaminated with elevated levels of polychlorinated biphenyls (PCBs) and
dioxins/furans in Warren County, North Carolina. The PCB landfill was constructed in
the early 1980 's despite strenuous local opposition to locating the facility in Warren
County. The site became the cornerstone of the environmental justice (EJ) movement
concerning the location of waste treatment facilities in poor, minority communities. The
State (Governor Jim Hunt) promised to detoxify the contents of the landfill when
technology became commercially available to do so. The State established/funded a Joint
Warren County/State PCB Landfill Working Group to evaluate technologies which could
be utilized to detoxify the contents of the PCB landfill. This Working Group was a blue-
ribbon panel which consisted of State environmental officials, members of the
community, political representatives, and two independent technical science advisors.
The Working Group performed a thorough technical/commercial evaluation of
numerous remediation technologies that could meet the detoxification objectives
established by the Working Group. Two technologies were selected by the Working
Group for further evaluation: Base-Catalyzed Decomposition (BCD) and Gas-Phase
Chemical Reduction (GPCR). Requests for Proposals (RFPs) were issued for companies
to perform bench/pilot scale studies for both of these technologies. Proposals were
received and based on a competitive bidding process, two companies were selected to
perform these studies: ETG Environmental, Inc. (ETG) for BCD and Eli Eco-Logic for
GPCR. The Working Group thoroughly evaluated the results of these studies and
determined that BCD met the objectives established and was the preferred technology for
detoxification of the PCB landfill. The North Carolina General Assembly subsequently
passed legislation requiring the utilization of BCD technology for detoxification of the
PCB landfill. The legislation also specified material treatment standards for the PCB
contaminated materials in the landfill. BCD is a US Environmental Protection Agency
(USEPA) patented technology and has been licensed by ETG.
ETG was subsequently selected to perform a Phase II preliminary engineering design
for detoxification of the PCB landfill. This study determined that $24 million would be
required for detoxification of the PCB landfill. ETG teamed with Barnes, Ferland and
Associates, Inc. (BF A) and was subsequently selected to perform the Phase III final
design services for detoxification of the landfill. BF A was one of the two independent
science advisors that served on the Working Group. The final design is in progress and is
expected to be completed in January 2000. Total funding in the amount of $8 million is
currently available from the State of North Carolina. Activities to procure additional
funding from numerous sources including the federal government are currently
underway. The Working Group has accomplished its mission and has been reformed as
the Citizens Advisory Board (CAB). This group is similar to the Working Group and the
only difference is that there are no science advisors on the CAB.
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2.0 Purpose
The purpose of this proposal is to provide justification and a plan of action to
expedite the construction activities (Phase IV) associated with the detoxification and
redevelopment of the Warren County PCB landfill. This proposal will illustrate that a
negotiated award of the Phase IV contract is necessary to accomplish expedited
detoxification of the landfill, and a negotiated award is technically and commercially
justifiable. This proposal will detail the team members and their capabilities, as well as a
contract structure and associated benefits of that structure.
The citizens of Warren County have long been saddled with the economic
disincentive associated with the location of the PCB landfill in their backyard. This
proposal will not only address the detoxification construction team structure and their
capabilities, but will discuss why the team will be best suited to provide economic
development, career training and development, and environmental education
opportunities for the citizens of Warren County.
As described by the summary of activities at the PCB landfill contained in Section
1.0, the State of North Carolina has established a unique model for consensus
management of a technically, politically, and commercially difficult environmental and
redevelopment project. This approach could and should serve as a model for other states
(and the federal government) to duplicate. This proposal will present a mechanism to
complete this model and the detoxification project.
Governor Hunt has personally promised the citizens of Warren County that
detoxification of the landfill will be performed once feasible technology has been
identified. Clearly, the Phase I and Phase II reports indicate that feasible detoxification
technology exists (the BCD technology). Governor Hunt has indicated that he would like
to see his promise fulfilled by the end of his current term, December 31 , 2000. In order to
start construction prior to that date, negotiations with a contractor must begin. This is the
primary issue requiring and justifying that the implementation of construction activities
be expedited. Numerous other issues including the economic disincentive to Warren
County listed above, the potential for natural disasters (the current floods in the State are
an example) to negatively impact human health and the surrounding environment by
compromising the integrity of the landfill, and resolution of the USEP A Region IV
notification of non-compliance of the landfill also support the need to expedite
construction activities.
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3.0 Construction Team Structure
The team ofMactec ETG (ETG) and Barnes, Ferland and Associates, Inc. (BFA)
represent the companies that comprise the construction team to perform the detoxification
activities associated with the Warren County PCB landfill. Please note that as of
10/15/99, ETG has assigned all of the personnel and substantially all of the assets that
ETG has used in connection with its environmental remediation business utilizing
thermal desorption and chemical dechlorination (BCD) technologies to Mactec, Inc. The
company is today the technology division of Mactec and is referred to as Mactec ETG ( or
ETG) in this proposal.
ETG provides comprehensive hazardous waste environmental services emphasizing
thermal desorption and chemical dechlorination (BCD) technologies. ETG has a 40-year
operating history performing a wide variety of hazardous waste remediation and waste
processing/recycling projects. ETG has been involved with the development of the BCSD
technology for the last 10 years and is the only USEP A licensee of the process who is
actively marketing the technology and has utilized the technology at the full-scale level in
the US. ETG has been involved in the Warren County project for the past 3 years and has
performed the Phase I (pilot scale BCD study) and Phase II (preliminary design)
contracts for the State. ETG is also performing the Phase III (final design services)
contract for the State.
BF A is an environmental engineering and hydro geological consulting company
emphasizing water supply, wastewater treatment systems, and hazardous waste
contaminated site assessment services. BF A and its principals have provided responsive,
reliable, cost-effective and high quality services to its large and small clients for over 15
years. BF A has been involved with the Warren County project as a science advisor for
approximately 4 years, and is currently performing as the lead design subcontractor for
ETG under the Phase III contract. As an African American owned business enterprise
dedicated to fostering the development of minorities in engineering, BF A is uniquely
qualified to provide a diverse range of services associated with the detoxification and
redevelopment of the PCB landfill in this EJ community. Their commitment to the
project was most recently demonstrated when they established a Warrenton office.
The construction team will utilize subcontractors as required to complete the
detoxification project. Specifically, the team will look to supplement its capabilities with
firms experienced in air quality monitoring, modeling, and engineering. Many services
associated with the construction project will also be subcontracted. As further
summarized in Section 6 of this proposal and in detail in the Phase III final design
Community Outreach Plan, the team will have as a primary objective utilization of local
firms for subcontracting opportunities. We also consider the CAB, the Warren Family
Institute and Warren County all critical components of our team and we have established
relationships to facilitate this involvement.
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4.0 Construction Implementation
4.1 Justification for Expedited Construction Implemention
As previously described, Governor Hunt has expressed a strong desire to begin
construction implementation of the detoxification at the Warren County PCB landfill by
the end of his current term in office, or 12/31/00. In order to accomplish this, the contract
for the construction implementation (Phase IV) MUST be awarded now. The primary
reason for this is the lead time required to perform the following activities prior to actual
construction implementation: 1) prepare the site, 2) design, fabricate, deliver and install
equipment at the site, and 3) permitting activities. These activities are currently estimated
to take approximately 9 months prior to actual construction implementation. There is an o/~-~
added sense of urgency in that the exact nature of the required permitting activities are I z -N
somewhat unknown. The earlier those activities can commence, the better. 'rna-,,.::t,1-...i)
4.2 Negotiated Award Justification
After discussing scheduling issues with numerous State personnel, the ETG/BF A
team has concluded (with the concurrence of certain Working Group/CAB personnel),
that in order for the above listed schedule objectives to be met, the construction
implementation contract (Phase IV) MUST be awarded immediately. Thus, there is no
way that an RFP process could occur and still meet the schedule objectives. There are
additional technical and commercial reasons that a negotiated award of the Phase IV
contract to the ETG/BF A team offers the best value for the State. These reasons are listed
as follows:
Technical:
1. ETG is the only USEP A licensee of the BCD process who is actively
marketing the technology and has full scale operating experience for BCD
applications in the US. Any other company who would express interest would
have to "learn on the job", which would not be in the best interest of the
Warren County stakeholders, including the State.
2. The BCD process was already competitively bid for phases I/II, and ETG was
the only bidder for BCD.
3. ETG has extensive experience on large hazardous waste remediation projects.
Numerous State personnel were recently escorted on a site visit of a federal
Superfund project (the Southern Maryland Wood Treatment Site or SMWTS in
Hollywood, MD) where ETG demonstrated experience with equipment that
could be utilized at Warren County ( or equipment of similar design
manufactured new for Warren County). The SWMTS site has 250,000 tons of
soil/sediment/sludge contaminated with pentachlorophenol (PCP) and
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dioxins/furans. ETG has successfully processed approximately 150,000 tons of
material under contract to ICF Kaiser and the USEPA-Region 3, at a contract
value of approximately $19 MM.
Commercial:
1. The State will save time and money by eliminating the RFP process. The
USEP A saved approximately $1 MM in RFP preparation and bid evaluation by
negotiating the SMWTS contract with ETG. In addition, the time savings
would result in added benefit to the community and elected officials.
2. The cost plus incentive fee contract structure described in Section 5.0 provides
the potential for the State to achieve substantial savings for the Phase IV
contract. By partnering with ETG/BF A, the State could realize as much as
$5MM in savings while realizing the benefits of a firm fixed price contract.
The cost plus approach will incorporate a guaranteed maximum ceiling price,
providing the State all of the benefits of a firm price contract.
3. The cost plus incentive fee contract works for a phased funded project. The
current cost estimate for the project is $24MM, while $1 lMM in funding has
been allocated. The remainder will be obtained from a number of possible
sources. It is our understanding that the State will have difficulty conducting a
firm fixed price RFP without the full funding allocated. There is no such
difficulty with a cost plus contract mechanism, as ETG/BF A will be paid for
performance for the initial $I IMM, with the balance of the project completed
as additional funds are allocated in subsequent fiscal years. The SMWTS was
phased funded ($7MM initial allocation, projected $50MM total project cost).
4. The Warren County community has been extremely active in the execution of
the project to date. It is anticipated that community input going forward is
essential to the ultimate success of the project. The community has indicated
that economic benefit to the community is a critical component of the project.
The ETG/BF A team is uniquely qualified to ensure that this economic benefit
to the community is optimized. We have committed an overall $3-5MM direct
economic benefit to the Warren County area through jobs, subcontracts and
vendor utilization. If the project went the RFP route, none of the bidders could
ensure that economic benefit to the community would be achieved.
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5.0 Contract Structure
Section 4.0 provides the justification for proceeding with the construction
implementation (Phase IV) for the detoxification of the Warren County PCB landfill on
an expedited basis. The justification of a negotiated award of the Phase IV contract to the
ETG/BFA team has also been presented in Section 4.0.
The Phase IV contract to ETG/BF A could be structured as a cost plus incentive fee
contract with a guaranteed maximum ceiling price. ETG/BF A would develop a budget
and schedule for project execution. The budget is currently anticipated to be $24MM as
presented in the Phase II report. Any costs over this maximum would be absorbed by
ETG/BF A. Actual costs for execution of the contract that are under the budget would be
shared equally between the State and ETG/BF A. (The State could provide a portion of
their share of the savings to the community for redevelopment of the site). This approach
would provide significant incentive for ETG/BFA to manage the project cost effectively.
As an example, if the contract was completed for $23MM, ETG/BFA would receive
$500,000 as an incentive fee and the State would realize an additional $500,000 in
savings. A performance bond ($5MM) could be provided to the State as financial
assurance of the contract execution by ETG/BF A.
As part of the contract, ETG/BFA would submit monthly invoices for actual costs
incurred/work performed. As such, the State would only pay for work that is performed
and would have the ability to analyze the progress made towards completion of the
project on a monthly basis. Any questions regarding the monthly invoice could be
promptly addressed, reducing the probability of contractual disagreements. The monthly
invoice would have two cost categories: direct labor for personnel and other direct costs
which would include all other cost items. The direct labor costs would be multiplied by
ETG/BF A actual fringe and overhead rates to reach the subtotal labor costs. Other direct
costs would be added to the subtotal labor costs and multiplied by the company G&A and
profit rates to obtain the final billing for that period. A sample calculation is attached. In
addition to the regular monthly invoice, invoices for major equipment purchases or
subcontracts may be submitted separately. ETG was awarded the SMWTS contract on
this basis.
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SAMPLE COST REIMBURSABLE INVOICE BUILDUP
Direct Labor $ 100,000
Fringe and Overhead(105%) 105 ,000
Subtotal Labor with Fringe & Overhead 205,000
Other Direct Costs (ODCs) 350,000
Subtotal Labor & ODCs 555 ,000
G&A(9%) 49,950
Total Cost 604,950
Profit (10%) 60,495
TOTAL INVOICE $ 665,445
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6.0 Community Outreach
The need to maximize community involvement in an environmental project of this
magnitude has long been recognized by the EPA and is a major component of the
environmental justice movement. This project has established an example of joint
State/community cooperation for the execution of the Landfill detoxification. If the
project is to continue down this path, community involvement during the detoxification
construction is mandatory.
The construction team of ETG/BF A is uniquely qualified to successfully execute
this community outreach. As an African American owned business, BF A is dedicated to
the development of minorities in environmental engineering. BF A has served the
community as an independent science advisor prior to teaming up with ETG to perform
the final design. BF A has provided an extensive community involvement plan as part of
the final design services. As a part of this effort they have met with and interviewed all
primary community stakeholders. They posses a keen understanding of the desires of the
community as it relates to this project. The Community Outreach and Involvement plan
will provide the foundation for successful participation of local residents and businesses
in the detoxification effort. This experience ( over 4 years on the project), combined with
the ETG community involvement, results in an overwhelming advantage to ETG/BF A to
achieve the community involvement objectives. It simply would not be possible for
another construction team to understand the needs of the community better than
ETG/BFA.
By combining these advantages with the justification (both technical and
commercial) described in Section 4.0 of this document, the logical conclusion would be
for the State to proceed with an expedited procurement negotiation to award the
detoxification construction to the ETG/BF A team. We would be pleased to begin this
process immediately.
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