A Quick Step-By-Step Approach To PFP Implementation
State underground storage tank (UST) agencies using Pay For Performance (PFP) contracting in their cleanup programs report to EPA that PFP produces faster, lower-priced cleanups with much less paperwork than the traditional time-and-materials contracts. A PFP cleanup has a firm fixed price and a time limit for reaching its environmental goal. The cleanup contractor gets paid incrementally as contamination levels decline to levels specified in the contract. Reasonable escape clauses in the contract protect legitimate interests of the state, the contractor, and the responsible party. A state PFP pilot program including 15 - 20 cleanup sites and several contractors is a good introduction to PFP for UST cleanup stakeholders. Starting a PFP program entails taking the following steps:
- Find a PFP champion.
- Review the Readiness Factors to determine whether there are any legal or regulatory barriers to doing PFP.
- Decide which sites to try PFP on--considering existing sites for conversion to PFP or new cleanup sites.
- Identify all appropriate stakeholders and meet with them to promote the concept of PFP contracting, perhaps via a PFP startup workshop (see State PFP Contracting Presentations).
- Review the site characterization and determine cleanup milestones for payment.
- Determine how to price the PFP cleanups-whether to bid or negotiate the contract.
- Draft and issue the solicitation notice (*document is in MS Word Format*).
- Choose the contractor and sign the contract.
- Monitor concentration levels to ensure the contractor reaches cleanup goals by the contract deadline.
- Pay PFP invoices quickly as contamination reduction milestones are met.
- Confirm contamination reduction results after the goal is reached.