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Underground Storage Tanks
Pay for Performance in the UST Program


EPA Region 4 UST Section is proud to announce the construction of this web page to keep state agencies and other interested parties up to date with progress reports, updates and news associated with Pay for Performance (PfP) programs in each of our states. Currently, Region 4 can boast as having the most states actively engaged in PfP contracting with a great deal of success in site closures and cost containment. If you are new to the concepts of PfP, this web page will assist with understand some of the basics of the program. If you wish to find out about a particular state PfP program, please contact that state and request additional information.

The Basic Elements of PfP Contracting

Points to consider before beginning a PfP program

Frequently Asked Questions:

Q. What guarantees are in place that could or would minimize the potential for a consultant or contractor to "walk" after receiving the bulk of the payments?
A. Several mechanisms are available such as requiring a performance bond for the price of the project or having a policy that would ban future work for that particular entity.

Q. If a performance bond is required, will the state allow the cost of the bond to be included in the fixed price?
A. South Carolina currently has this provision and does allow the bid to contain the price for the performance bond. This depends on procedural methods each state's contract office may have in place.

Q. What are the criteria for selecting Key Monitoring Wells?
A. There is no "set number" of wells to consider. Select wells that represent the expanse or spatial distribution of the plume.

Q. What are the criteria for baseline analytical data.
A. Baseline analytical data is the basis for which the PfP contract will be written. This is the concentration level starting point for establishing and measuring reduction of the plume. The data needs to be current, within six months before start of the active remediation.

Q. What wells should be used for baseline sampling?
A. At a minimum, the Key wells plus several non-detect wells upgradient and downgradient. If a PfP contract is written where there is a potential for on-site migration of contamination from an off-site source, make sure a well is positioned between this source and the on-site source.

Q. Should PfP be used for all sites?
A. No, sites that have complex geology, bedrock fracture zones, Karst formation, or other situations where delineation of the plume is marginal, PfP may not be an alternative. However, PfP can be used to perform specific scopes of work where a fixed price (lump sum) contract may be prepared.

Q. What site qualifies for PfP?
A. The key component for a site to be eligible for PfP contracting would be the complete assessment and delineation of the dissolved phase or free product plumes. Size of the plume or accumulation of free product does not hinder contractors from initiating the remediation processes.

Q. How will smaller companies compete with the larger firms that have better cash flow reserves?
A. Actually, larger companies have to compete with smaller firms simply based on overhead costs. The potential hindrance may be bonding requirements if a smaller company is bidding or working on numerous sites.

Q. Why should consultants be saddled with any risk when the owner/operator caused the release?
A. Actually, consultants do not take on any additional risks with the exception of setting a fixed price and living up to the contract requirements. Lets face it, petroleum cleanup projects have been ongoing from over 15 years and the technology has greatly increased the capabilities for achieving cleanup goals. Risk Based Decision making rules have also assisted with attaining cleanup goals. The risk the consultant must take now is in their workmanship to simply reduce the contamination levels and then receive payment.

 

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For information about the contents of this page please contact Linda Williams


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