BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

TESTIMONY OF UNITED SCIENCE INDUSTRIES, INC. REGARDING THE

REGULATION OF FEES AND RATES FOR PROFESSIONAL CONSULTING SERVICES:

My name is Jay Koch. I am President & CEO of United Science Industries, Inc. (USI)

located in Woodlawn, Illinois. Before offering USI’s testimony regarding Subdocket B, I would

First, on behalf of our organization, our employees and our clients I thank the Illinois

Pollution Control Board. We are all grateful that the Illinois Pollution Control Board exists as

an independent review board. We are grateful that you listened to our testimony, our comments,

and our pleas; analyzed the facts and recognized and acted upon the serious flaws in the

professional services portion of the proposed rule that was being considered last year. Your

actions are appreciated and respected. Thank you!

Second, I would like to express regret. In preparing this testimony I spent a considerable

amount of time reviewing the record in this proceeding pertaining to the regulation of

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professional consulting services. Specifically, I spent time reviewing the Board’s Opinion and

Orders, at both First Notice and Second Notice. I also spent a considerable amount of time re-

visiting the text of USI’s July 27, 2005 testimony. Months have passed since July 2005 and in

reviewing that testimony from a historical perspective it was easy to sense the anger and

aggressive tone of that testimony. What I regret, without pointing blame at anyone, is the way

in which the relationship between the Agency and many of the participants in this rulemaking

has unnecessarily deteriorated over the years. I regret that relationships have deteriorated to the

point that an angry and aggressive tone towards a long time colleague in our collective mission

of restoring the environment, the Agency, felt warranted in order to protect our business, our

clients and the environmental consulting industry.

Third, I want the Board, all of those that have participated in this proceeding and

especially the Agency to know that I am hopeful. I am hopeful that the parties to this proceeding

will use subdocket B as an opportunity to reconcile their differences and coalesce to build a

better UST program in Illinois. I am hopeful that USI, the Agency, PIPE and the other

participants in this process will use the opportunities afforded by subdocket B to put an end to

the impasse regarding this rule, focus on the future, and get to work on the task of developing a

professional services rule. I am hopeful that the product of these efforts will be a

model rule; a rule that will streamline the reimbursement process and leave little doubt as to the

level of costs that are reasonable for a particular task; a rule that will provide the Agency, Board

and the regulated community with a solid tool to use to truly account for and define costs at the

task level and to identify abuses of the system; and most importantly, a rule that is objective and

straightforward so that it can be implemented, administered and interpreted in an impartial and

consistent fashion. I am hopeful that by genuinely focusing on this task and what is best for the

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UST program and then laboring together to achieve the same; the parties to this proceeding will

re-acquaint themselves and eventually regain the mutual trust and respect that has been so sorely

lacking for the last several years and which is so fundamental to the development of a workable

Finally, you may hear from others an opinion that professional consulting services should

always be reimbursed on a time and materials basis and that lump sum payments for professional

services should not be implemented now or at any point in the future. I am confident that lump

sum payments should not be implemented on a per task basis until accurate cost data for

standardized and well-defined tasks can be properly collected and carefully analyzed. However,

instincts tell me that so long as tasks are properly created and the scopes of work are well defined

and standardized and once the corresponding costs data is collected and analyzed; the data will

show that numerous professional consulting tasks can be safely converted to lump sum payment

amounts. I believe that this change, when implemented under the confines of a sound, well

thought-out, statistically reliable and objective rule, is entirely appropriate and is in the best

interest of UST owners/operators, the taxpayers of this state and the environment. As the

president of USI, I am supportive of this effort and willing to commit our organization to assist

the Board, the Agency and the other participants in the development of a “

will achieve the goals of expediting the reimbursement process, reducing the incidence of abuse

and broadening the effectiveness of the LUST Fund as a tool for financing clean-ups in this state.

In today’s testimony USI intends to do three things:

First, USI will attempt to clarify some portions of its July 27, 2005 testimony. After reading

the Board’s January 5, 2006 Opinion and Order, it is apparent that some portions of USI’s July

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27, 2005 testimony and proposal were not clearly communicated or were interpreted in a manner

other than that intended. Therefore, USI will attempt to clarify its position. In staying consistent

with the Board’s desire to limit the scope of this hearing to only those issues discussed in the

Board’s January 5, 2006 Opinion and Order, USI will only clarify those portions of its July 27,

2005 testimony that were referenced in the Board’s January 5, 2006 Opinion and Order.

Second, USI will answer the questions posed by the Board and make comments on issues

where the Board has solicited input from the participants. These questions generally pertain to

the adequacy of the scope of work and the adequacy of the lump sum payment amounts.

Finally, USI will offer suggested modifications to the list of tasks and associated scopes of

work presented in rough draft format as part the Board’s January 5, 2006 Opinion and Order.

CLARIFICATION OF USI’S JULY 27, 2005 TESTIMONY:

Listed below are excerpts from the Board’s January 5, 2006 Opinion and Order regarding

USI’s July 27, 2005 testimony along with USI’s clarification and/or rebuttal in relation thereto.

USI addresses the issue of scope of work by creating a standardized task list,

which explicitly references the regulations themselves, and a schedule of standard product and

services along with the scope of services and reasonable quantity guidance

addresses all the tasks involved with the UST remediation under Parts 732 and 734, including

tasks related to professional consulting services.

Since this docket is limited to issues

concerning payment of professional consultant services, USI’s proposal pertaining to such

services will be discussed in this section

(January 5, 2006 Opinion & Order Page 3).

: The language in bold above leads USI to believe that

the Board’s perception may have been that USI’s intent was for the scope of work for

professional consulting services to be defined broadly only at the phase level. This is not the

case. The text in the Scope of Work section of page 532 of USI’s proposal which reads:

Professional Consulting Services include all labor, equipment, materials, supplies and

subcontractors necessary and associated with the design, oversight, analysis, management,

administration and documentation of investigative and remedial activities during a corrective

action project as well as the professional consulting and associated services necessary to

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perform all Agency required planning, budgeting, certification, reporting, correspondence.

Professional consulting services also include all services necessary and associated with the cost

This language should be interpreted in concert with the language found in section

734.845 d. of USI’s proposed rule which requires that all professional consulting costs be tracked

and reported to the Agency on a per task basis. It should also be interpreted in concert with the

provision on the bottom of page 532 of USI’s testimony that requires all work activities to be

justified (at the task level). In USI’s July 2005 proposal the tasks conventions are the same as

the regulations. USI envisioned that this approach would require all work activities to be

justified as reasonable and necessary in order to comply with the specific requirements of the

regulations. Finally, the statement on page 532 of USI’s testimony that Professional Consulting

Services are anticipated to be provided in relation to each of the Tasks specified in Appendix D

should be considered. This statement, on page 532, is based upon the premise that

environmental professionals direct, guide and oversee all aspects of a UST remediation project

so they should track and justify their time in accordance with the detailed activities that they are

required to perform each task. This includes planning or oversight time for those tasks that are

primarily field services oriented such as tank removal or abandonment.

USI believes that by using this approach, the parties will begin to gain a complete

understanding of the true total costs for each task. Some tasks may have both professional

services and field services components while others may only have a professional services

For example, a review of the language found at the bottom of page 521 of USI’s

testimony indicates that USI anticipated that professionals would post and be required to justify

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their time during tank removal oversight activities. The language contained on the bottom of

Professional oversight of these Field Services is appropriate. An environmental professional

should be on site at all times during tank removal activities. The hours necessary for the

environmental professional to travel from his or her office to and from the job site prior to and

subsequent to tank removal or abandonment services is reasonable as are associated per diems,

lodging and mileage. An engineer, technician, or geologist would typically be expected to staff

this field oversight activity. Instrumentation and equipment that would typically be expected to

be associated with this professional oversight (tasks) include, but are not limited to the

following: Combustible Gas Indicator, Photo-Ionization Detector, Disposable Camera,

Headspace Analysis Containers, Utility Vehicle.

The reasonable quantity guidance provided by USI at the task level (for example, at the

bottom of page 521 of USI’s testimony) was simply intended to serve as a guide/barometer for

Agency reviewers to determine the reasonableness of professional service time proposed at the

USI recognizes that its intent may not have been clear. USI would be happy to answer

“Finally, USI proposes scope of service for professional consulting service under

Section 732/734 Appendix F as follows. Professional products and services include all labor,

equipment, materials, supplies and subcontractors necessary and associated with the

oversight, analysis, management, administration and documentation of investigative and

remedial activities during a corrective action project as well as the professional consulting and

associated services necessary to perform all

Agency required planning, budgeting, certification,

and correspondence. Professional consulting services also include all necessary

requesting payment from the fund. PC 60 at 136 and PC 67 at

USI’s approach to addressing scope of work deviates significantly from the

3M. While proposals from ACECI, PIPE and CW3M

prescribe detailed scope of work for each task for which lump sum payments are specified under

Sections 732.845 and 734.845, USI’s proposal takes a broader approach of defining scope of

service as including all labor, equipment, materials, supplies and subcontractors necessary and

associated remedial activities during a corrective action project (January 5, 2006 Opinion and

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USI clarifies that the activities conducted by a professional consultant on a UST

remediation project include design, oversight, analysis, management, administration and

documentation of investigative and remedial activities all in accordance with the specific

regulatory requirements as set forth in parts 732 and 734, as appropriate. In addition the

activities include all Agency required planning, budgeting, certification, reporting and

correspondence. USI’s use of the phrase “…

include all labor, equipment, materials, supplies

and subcontractors necessary and associated with…”

but only serves to define the types of resources that the consultant is expected to use in the

performance of those services. It also establishes that the consultant is responsible to provide

those resources in order to complete the scope of work. This method of broadly defining the

resources that are to be provided by the consultant (or a contractor in the case of construction or

remedial work) in the performance of activities that are necessary to complete a specific scope of

work is very common and nearly a default industry standard on both professional contracts for

services and construction contracts. This is especially true in instances where lump sum

payment amounts are involved. To support its point, USI refers the Board to two different

resources. The first is the American Institute of Architects Standard Form Agreement between

the Owner and Architect. The first sentence of Division 0: Bidding and Contract

Requirements, Section 00300-Bid Proposal Form of these documents provides “I, having

reviewed the contract documents and familiarized myself with all conditions affecting the scope

to perform the required Work on the above noted project.” In this instance it is clear that the

scope of work and the resources that are promised to be provided by the architect in order to

provision those services are distinct concepts. The second reference is a simple, but commonly

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available proposal form published by Cardinal Brands Inc. of Lawrence, Kansas. Cardinal

Brands, Inc. uses the trade name Adams business forms. These form proposals are readily

available at most office supply stores and are routinely used by contractors and other small

businesses when preparing lump sum quotes. This widely accepted proposal from prominently

includes the following language at the top of the scope of work section of the form, “We hereby

form then leaves a space for the contractor to insert a general narrative of the scope of work.

Beneath that portion of the form is the following language: “All material is guaranteed to be as

, and the above work to be performed in accordance with the

submitted for above work, and completed in a substantial workmanlike manner for

the sum of _____(BLANK)_______ Dollars.” The Cardinal Brands form is clearly consistent

with the approach used by AIA. Both refer to the categories of resources necessary to engage in

the activities necessary to complete the work and both clarify that the scope of work and the

resources are not the same. The Cardinal Brands forms goes even further by clarifying that the

detailed requirements of the scope of work are provided in the plans and specifications. The

plans and specifications, then, provide the detailed requirement of the scope of work. It makes

since that the AIA forms between the owner and the architect would not include this reference to

a specification because the architect is presumably being hired to develop detailed plans and

USI believes that the proposals made by ACECI, PIPE and CW3M and USI are all

generally consistent with the concepts outlined above in that each proposal desired specificity in

the scope of work. If one compares the primary work activities listed in USI’s scope of services

found on page 532 of its July 27, 2005 testimony to those tier 1 work activities proposed by

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ACECI, PIPE and CW3M, one finds that the activities are very, very similar. The list of

activities shown in Attachment A illustrates this point.

Additionally, if one evaluates the detailed sub-tier activities and specifications contained

within the scope of work proposed by ACECI, PIPE and CW3M, as modified by the Board for

presentation in the January 5, 2006 draft rule, one finds a striking similarity between those

detailed sub-tier work activities and the specific UST regulations and associated forms/guidance

documents. USI’s use of the regulations as the task identity was intentional. In USI’s proposal,

the scope of work for each task was to include all of the general activities underlined in Excerpt

2 above in addition to the specific requirements of each regulation (task) as specified in the

technical regulations. USI did not specifically list in Section 734.845 the details of each sub-tier

technical because it felt that doing so was unnecessary since those specifics were already

USI recognizes that the ACECI, PIPE & CW3M proposals create new tasks conventions

solely for purposes of cost containment (734.845) and that these new task conventions do not

completely track with the requirements of the technical regulations. USI believes that this

approach is different than what it proposed but USI believes that the creation of new tasks in

Section 734.845 adds unnecessary levels of complexity. USI will comment more on that subject

In summary, the USI, ACECI, PIPE and CW3M proposals are all similar in that they are

all ultimately based on the regulations and are intended to provide high levels of specificity in

“…the scope of work in USI’s proposal is similar to the one proposed by the

Agency and adopted by the Board for first notice, i.e. the scope of work includes all work

necessary to comply with the requirements of the regulations.”

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USI’s intention was for the scope of work included in its proposal to include all

work necessary to comply with regulations. However, USI feels that its proposal was not similar

to the Agency’s proposal adopted by the Board at First Notice. The key distinctions are that the

Agency’s proposal contained newly created tasks that were created solely for use in Section

734.845. The Agency did not provide any detail or specificity as to where or how costs

associated with professional service activities that are rendered per the requirements of the

technical regulations in sections other than Subpart H should be accounted for under the newly

created Subpart H tasks (maximum payment amounts). Additionally, and not withstanding the

above, the Agency used the “included but not limited to” language as a qualifier in relation to the

tasks created in Subpart H. The use of the delimiting word “includes” is consistent with creating

or defining a “scope” or extent. However, the addition of the all-encompassing phrase “but not

limited to” broadens the level of work required to an unknown level and violates the entire

concept of defining a “scope” of work and satisfying the participants desire for specificity. On

the other hand, USI’s proposal was intended to specify in detail the requirements for each task.

Recognizing that the technical regulations found in Subparts other than Subpart H are very

detailed and provide the specifics of what is required of a UST owner/operator and their

consultant in order to comply with the Act; USI simply used the regulations to serve as the basis

for its task list. The detailed sub-tier regulations contained within each regulation used to denote

a specific task provides ample information and specificity which clearly outline the deliverables

that are required in order for each considered task to be completed. USI believes that there is a

subtle but very significant difference between the Agency’s proposal and its proposal.

USI concurs with the Agency when they assert that the tasks should be based upon the

regulations. They should be based upon the regulations/tasks that have been in place for years

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that the industry is already familiar with and not upon new conventions that were arbitrarily

created and first introduced to the regulated community as part of the 734.845 proposed in

Subpart H. USI also believes that its proposal provides an appropriate level of specificity without

increasing complexity. A program that is based upon task identities that are already familiar will

be simpler and easier to communicate to the regulated community, more readily adopted and

help to keep program administrative costs to a minimum. USI will provide more information

“In addition, USI proposed reasonable quantity guidance for personnel hours

based on each phase of remediation (Exh.109). The personnel time estimates proposed by the

participants for various tasks are summarized in the table below.”

USI desires to clarify that the reasonable quantity guidance provided by USI is

not an estimate as are the figures provided by the

quantity guidance provided by USI on a per phase basis are the statistically valid ninetieth

percentile of professional consulting costs actually incurred at Illinois UST sites. This is based

upon USI’s review and evaluation of professional consulting costs at 69 randomly selected

LUST sites in Illinois. The details of this analysis were provided at hearing on July 27, 2005.

“…according to the Agency, the average cost of professional consulting services

based upon USI’s estimate would be significantly higher than the average total amount paid for

sites closed during 1997 through 2001”

(January 5, 2006 Opinion and Order, page 10).

The Agency has taken USI’s testimony out of context. USI’s testimony focused

on an 80% coverage at 95% confidence interval which would cover approximately the ninetieth

percentile of charges assessed on a per site basis across the state. USI selected this coverage

range and confidence interval because in its earlier testimony the Agency had claimed the

maximum lump sum payment amounts they proposed in Subdocket A would cover

approximately ninety percent (90%) of the sites in the state. A proper means of comparing the

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figures presented by USI relating to professional consulting service charges to the total amount

reimbursed for professional and field (contracting) services would be to utilize the statistical

ninetieth percentile of total costs (80% coverage at 95% confidence interval) of remediation to

the statistical ninetieth percentile of professional consulting costs presented by USI. USI is

confident that a proper comparison will not support the Agency’s implication and instead support

the facts as presented by USI at the July 2005 hearing. USI does not find any merit in the

Agency’s attempt to rebut USI’s testimony.

RESPONSES TO QUESTIONS AND INQUIRIES POSED BY THE ILLINOIS

In its January 5, 2006 Opinion & Order, the Board asked a series of questions and/or

solicited input from the participants on a number of issues pertaining to the adequacy of the

proposed scope of work and the maximum lump sum payment amounts for professional services.

In this section USI will address each of the Board’s questions and/or requests for input.

the Board invites the participants to comment on whether scope of work

(January 5, 2006 Opinion and Order page 6)

USI believes that all technical regulations that could potentially be subject to a

maximum lump sum payment amount should have a defined scope of work. USI would like to

emphasize two points with regard to the Board’s inquiry. First, USI notes that the Board referred

to these regulatory requirements as tasks. Whether the Board categorized these requirements as

“tasks” consciously or subconsciously USI does not know. In either case, USI agrees with this

categorization (identifying the regulations as a task) and believes that the regulatory

requirements themselves (at an appropriate tier) should be considered to be the tasks for purposes

of cost containment rather than to establish an entirely new task structure solely for the purpose

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of administering cost containment. Creating an entirely new structure of tasks solely for the

purpose of administering cost containment is not necessary and will add complexities and costs

to the administration of the program. Second, USI notes that the scope of work for the task of

preparing the report required pursuant to Section 734.210 (h) (3) is clearly specified in sub-tier

regulations 734.210 (h) (3) (A), (B) and (C). Please see USI’s proposed task 734.210 (h) (3) in

The Board directs the participants to review the proposed scopes of work to see

if they adequately address the specific tasks or if revisions are necessary

Please see Section V. below of USI’s testimony.

The Board asks where Scope of Work should be set forth (i.e. in Board rules or in

Agency implementation rules and solicits comments and testimony from the participants and the

Agency. Specifically the Board states that “…

the Board believes that it is important to address

the issue of scope of work in this rulemaking to ensure that the maximum lump sum payment for

each task reflect the scope of work for that task and the time required to perform the work.

Upon the resolution of issues concerning the maximum lump sum payments, the Board will

decide the appropriate vehicle for specifying the scope of work. In this regard, the Board

welcomes additional comments and testimony from the participants and the Agency

As is readily evident in the record, the inclusion of a well-defined scope of work

is critical to the participants in this proceeding and it is critical to the development of maximum

lump sum payment amounts that can be applied impartially and consistently. The Agency’s

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long standing position with regard to scope of work is summarized in testimony made by Doug

Clay on August 9, 2004 which is as follows:

3 “The Agency does not believe that a detailed and

4 defined scope of work for each aspect of the

5 leaking underground storage tank cleanup is

6 necessary, nor does it -- should it be included

Some of the participants in these proceedings have suggested that development of a scope

of work can be handled by the Agency and LUST Advisory Committee or just the LUST

Advisory Committee. CW3M has suggested that the final task list and scopes of work for each

should be developed by the Agency and the LUST Advisory Committee and published

periodically outside of the Board rules (January 5, 2006 Opinion & Order page 7). CSD asks

that the Board direct the LUST Advisory Committee to develop the scope of work and make it

available on the Agency’s website (January 5, 2006 Opinion and Order, page 7). USI is of the

opinion that the proper delineation of tasks and associated scopes of work are so critical that they

Should professional consulting services be reimbursed on a time and materials

January 5, 2006 Opinion and Order, page 8).

As stated in the introduction section of USI’s testimony, USI is of the opinion

that some tasks can and eventually should be converted to lump sum payment amounts. USI

supports the standards, approach and implementation steps set forth by PIPE in its Policy &

Position Statement which was submitted to the Board as PIPE’s testimony. PIPE’s approach

outlines that all professional consulting services should continue to be reimbursed on a time and

materials basis during phases one and two of the implementation process proposed by PIPE for

the eventual conversion to maximum lump sum payment amounts. During phase three of

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PIPE’s proposed implementation process, some tasks could be converted to maximum lump sum

payment amounts. Until that point in time, USI’s position is that all professional services should

continue to be reimbursed on a time and materials basis.

The Board would like to hear from the Agency and the participants as to whether

adequate information is available in the Agency’s database to determine lump sum payments for

the various professional consulting tasks that reflect reasonable costs incurred in performing the

(January 5, 2006 Opinion and Order page 8).

USI is extremely confident, from both its experience in working with the UST

program for more than fifteen years, and from data analyzed in USI’s review of the 69 LUST

incident files that it reviewed in preparation for its July 27, 2005 testimony, that adequate data is

not available in the Agency’s files to establish credible costs on a per task basis. Please see

USI’s July 27, 2005 testimony for additional details.

Specifically, the Board would like the participants to provide reasonable

personnel time estimates for all the tasks for which the scope of work has been proposed in

(January 5, 2006 Opinion and Order, page 10).

USI concurs with PIPE on this matter. The many problems inherent in using

estimates for a maximum lump sum payment were clearly shown by USI at the July 27, 2005

hearing. USI determined that the personnel time estimates made by the

and PIPE which are presented in the table on page 9 of the Board’s January 5, 2006 Opinion and

Order are based upon estimates. USI’s figures which are provided in that same table are based

upon actual professional consulting costs incurred under the LUST program. USI’s costs are

representative of 80% coverage with a 95% confidence interval which is approximately the

Work Group estimated a total of 264 professional

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consulting hours would be necessary for all phases of work on a UST project including

preparation and submission of claims for reimbursement. PIPE estimated that 480 hours of

professional consulting services would be necessary for all phases of work on a UST project

including preparation and submission of claims for reimbursement. The actual professional

consulting hours that are required to cover approximately ninety percent of UST sites based upon

USI’s statistical review (80% coverage at a 95% confidence interval) are 1,240. The

work groups estimate was only 21% of the actual number of hours and PIPE’s estimate was only

39% of the actual number of hours. USI respectfully declines to provide an estimate of hours

for professional consulting services for the listed tasks. USI also urges the Board to refrain from

basing maximum lump sum payment amounts on estimates. Finally, USI notes that the Board’s

Opinion and Order states that the scope of work included in the regulations is a “…starting

point…” (January 5, 2006 Opinion and Order, page 5) and the Board directs the participants to

review the proposed scopes of work to see if they adequately address the specific tasks or if

revisions are necessary.” (January 5, 2006 Opinion and Order, page 7). As outlined in Section

V. below, USI believes that work still needs to be performed in order to adequately define a

scope of work for each of the proposed tasks and that the task structure should be revisited in

order to maximize clarity and understanding by the consulting community. In evaluating the

proposed task list and associated draft scopes of work, the specific regulatory requirements are

not explicit. In short, USI believes that the scope of work proposed is not completely defined,

so even if the Board does receive estimates from other participants it should do so only after

“…the Board invites the Agency and participants to comment on the implication

of “one size fits all” maximum lump sum payments for all UST sites.

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USI believes that maximum lump sum payment amounts are applicable for some

tasks. This is the case if the listed tasks and associated scopes of work are clearly-defined,

standards-based, well-communicated and impartially and consistently administered. While

maximum lump sum payment amounts may be workable for some tasks, they are not likely to

work for all tasks or in all project situations. The Board has already ordered that “

also allow for payments based on time and materials for any work performed beyond the

specified scope of work that is required to meet the applicable regulatory requirement

(December 1, 2006 Opinion and Order, page 60). Therefore, the establishment of “one size fits

all” maximum lump sum payment amounts will no longer require the owner/operator or their

consultant to show the existence of an “unusual or extraordinary circumstance” in order to be

reimbursed in an amount in excess of a lump sum payment amount. This change reduces some,

but not all, of the risks posed by “maximum lump sum payment amounts” as originally proposed

in Subdocket A and may be one of the reasons that in its more recent decisions, the Board

frequently refers to “lump sum payment amounts” as opposed to “maximum lump sum payment

amounts.” Instead of requiring the owner/operator or their consultant to show the existence of

“unusual or extraordinary circumstances,” to be reimbursed in an amount in excess of the lump

sum payment amount, the owner/operator or their consultant must now only demonstrate that

work was performed beyond the specified “scope of work” in order to meet the applicable

regulatory requirement. USI believes that this is an appropriate and fair approach if properly

administered. The administrative implications, however, are many if the rule and its

corresponding program are to be interpreted, applied and implemented impartially and

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The Board asked the participants to comment on the implications of this approach.

USI believes it is in a unique position from the other participants in this proceeding to comment

on these implications. Whereas, many of the participants in this proceeding are small consulting

firms with fewer than twenty employees, and few levels of management, USI is a much larger

operation with a significant number of employees and multiple layers of management. USI

manages substantially more sites and interacts with a substantially larger number of

owners/operators than the other firms. In short, USI’s operations are more similar in scope to

the operations of the Agency than others in this proceeding. Although USI is still smaller than

the Agency, like the Agency, USI is large enough that its operations require communication,

management and administration of its operations by “programs” or “systems.” Because of this,

we believe that we are in a better position than any other participant in this proceeding to provide

insight into the likely programmatic and administrative implications of one-sized fits all

maximum payment amounts. Described below are some of the implications that are envisioned.

Lump Sums Drive the Need for Clearly Specified & Easily Understood

Scopes of Work with Objective Deliverables

: In order to interpret, apply, implement and

administer the lump sum payment amounts in an impartial and consistent fashion, it will be

critical that the scope of work and deliverables be clearly specified both qualitatively and

quantitatively so that all those that have responsibility to implement and administer the rules

at the Agency have a full comprehension of the requirements and are able to administer the

same consistently and with a limited need for re-training.

Implementation of Lump Sum Payment Amounts Drives a Need for

- Just as the Agency personnel must understand the

specifications and the required deliverables from qualitative and quantitative perspectives, so

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too should the consultant. The consultant’s “deliverable” or work product should meet the

requirements set forth in the specifications from both qualitative and quantitative

perspectives. Because these specifications and deliverables will be set forth by the Agency

it will be necessary for consultants to be trained on the requirements. The level of re-

training required can be minimized by utilizing a task structure that is already well

understood and accepted. The use of the regulations themselves as tasks with the associated

sub-tiered regulations, Agency forms and guidance documents, serving as the scope of work

specifications for each task is logical and would minimize the need for retraining.

Implementation of Lump Sums Drives a Need for Specification

Clarification and Increased Levels of Communication

means of consistently and pro-actively communicating the details of the specifications for

each of the tasks be available and utilized at both the project and program levels. This

communication can take place via the web, e-mail, regular mail, or other forms, but the

ability to timely communicate and answer questions about the scope of work in a consistent

and impartial fashion is critical. Even the most simple, straightforward and clearly specified

scopes of work are subject to differing interpretations. This is evidenced by the need for pre-

bid walkthroughs on lump sum bid construction projects and the numerous questions that

government contracting officers and architects receive from contractors asking for

clarifications regarding bid specifications and plans. These requests for clarification are

normal occurrences in the construction and contract administration fields. This is especially

the case when newly published or unexplained lump sum payment amounts are involved

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Implementation of Lump Sum Payment Amounts Increases the Need for

Detailed Tracking of Costs at the “Activity” Level

on a time and materials basis for any work performed beyond the specified scope of work

that is required to meet the applicable regulatory requirements implicates two things from a

consultant’s perspective. First, it implies that the consultant fully understand the scope of

work that is required by the specifications. Second, it requires that the consultant keep track

of the time that it spends on all activities associated with a UST project whether those

activities are included in, above and beyond or unrelated to those specified in the scope of

work. In relation to the standard set by the Board in its December 1, 2005 Opinion and

Order the following administrative rules would apply to each increment of work activity

documented: 1.) If the work activity is necessary to meet the scope of work specified in the

regulations then it would be subject to and limited by the lump sum payment amount. 2.) If

the activity is necessary to comply with the Act, but not included in the specified scope of

work, it would be reimbursed on a time and materials basis (synonymous to a time and

materials change order in the contractor’s world.) and 3.) If the work activity is not

necessary to meet the applicable regulatory requirements it would not be reimbursed on any

Implementation of Lump Sum Payment Amounts Drives a need for a

procedure to track and report deviations from the specified scope of work and administer

Because there will certainly be instances in which work activities above

and beyond the specified scope of services will be necessary in order to meet the

requirements of the regulations, it is important that a provision be made for administering

payments required pursuant to these changed conditions. It is also important to track and

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document the costs and activities that are above and beyond the specified scope of work.

This need exists both for the owner/operator and consultants (to request payment and be

paid) and the Agency (to receive requests for payment, process payments and monitor

conditions that are causing change orders).

Implementation of Lump Sum Payments Drive a Need for a Database

PIPE, USI and other participants in these proceedings agree that lump sum

payment amounts should only be applied to tasks where statistically valid data shows a

normalized distribution of costs associated with professional service tasks. The most

feasible and efficient way to establish and maintain a method of evaluating costs distribution

and cost trends on a per task basis is via database technology.

The above is only a partial list of the implications of a “one-size-fits all” approach. USI

wants to clarify that it offers the above only as constructive input into some of the likely

implications of a “one size fits all” maximum payment approach. USI believes that these

implications are accurate and that the management effort needed to address each implication is

realistic and within the scope of the Agency’s Strategic Management Directions one of which is

to “Foster innovation, systems improvement and human resource development.” (Purpose of the

IEPA, Mission Statement, Strategic Management Directions- IEPA website- February 25, 2006)

USI is certainly willing to provide answers to questions or comments regarding any of the

The Board invites comments from the participants as to whether it is

feasible to take the multiple rate approach

” (January 5, 2006 Opinion & Order, page 10).

: USI is of the opinion that the best approach is to collect rates based upon

actual market data and market-based staffing rather than trying to develop an estimated index

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rate. Basing rates on the collection of market data is consistent with the standards, approach

and implementation steps outlined by PIPE and the Board’s earlier statement that the

maximum payment amount should be based upon data from Illinois UST sites. If, in the

interim, the Agency feels that proposed staffing for a particular task is not appropriate the

Agency can always suggest that the consultant staff the task in a different fashion.

ADEQUACY OF THE PR ADEQUACY OF THE PROPOSED TASK LIST &

The Board has asked the participants to comment on the adequacy of the proposed scopes of

work. Specifically, the Board “directs the participants to review the proposed scopes of work to

see if they adequately address the specific tasks or if revisions are necessary” (January 5, 2006

Opinion and Order, page 7). As a preface to its testimony regarding the adequacy of scopes of

work, USI notes that the Board has indicated that it used the

the “starting point” for building the task list and the associated scopes of work in Subdocket B.

It is also important to keep in mind that the

basis of the task list that has been used since the inception of the Subdocket A proceedings. For

ease of review, this section has been divided into three subsections. These are a background

information section, a section describing inadequacies in the task list and scopes of work in

Subdocket B and a section describing ways of correcting inadequacies.

In the context of maximum lump sum payment amounts for professional consulting services,

overall regulatory framework, individual tasks and scopes of work for each task are completely

, each specific regulatory requirement of the entire UST

regulatory framework (i.e. Part 732 or 734 as applicable) must be assigned to a specific task,

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irrespective of whether the task is a lump sum task, a time and materials task or otherwise, in

order for any of the lump sum payment amount tasks to be adequate.

unassigned specific regulatory requirements contained within the regulatory framework

cannot be administered on a consistent or impartial basis. Implications of inclusion alone are

not adequate to facilitate administration, application and interpretation on an impartial and

because implications are by their very nature highly subject to arbitrary and

USI understands that the Agency coordinated with ACECI (

the various activities (tasks) conducted by a consultant in order to complete each step of the UST

remediation process and the estimated personnel time (hours) required for completing each

activity within a task. This is included in the Testimony of Harry A. Chappel P.E. which was

filed with the Board on March 8, 2004. The Board has acknowledged that, “

Vice President of ACECI, testified that while the general structure of the reimbursement

limitations in the Agency’s proposed Subpart H is consistent with the recommendations of the Ad

Hoc Group, the most important problem with the Agency’s proposal from the viewpoint of the

professional consulting firms is the lack of clear delineation of the scope of services that may be

included in each of the phases of the project for which reimbursement limits are set forth in

” (Board’s January 5, 2006 Opinion and Order, page 2).

Mr. Goodwin’s testimony is highly important for two reasons. First, it clearly supports that

professional consulting firms greatly desire a

secondly, and even more importantly, it seems to verify that the intentions of the

Group were to develop a task list and scopes of service that were inclusive of all phases of

remediation (i.e. inclusive of all specific regulatory requirements contained within the regulatory

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framework) under Part 732 and 734. Mr. Chappel’s testimony filed with the Board on March 8,

2004 serves to validate this point. In that testimony, Mr. Chappel specifically states that “

Illinois EPA has coordinated with the Consulting Engineers Council of Illinois (CECI)

develop the activities that are conducted by the consultant in each step of the process and the

estimated personnel time (hours) required for each activity within a task

Testimony filed with the Board on March 8, 2004, pages 5-6.) It appears that “the process” that

Mr. Chappel is referring to is the entire corrective action process and his statement regarding

“each activity within a task” is a reference to the scope of work for the individual tasks within

the overall corrective action process. In other words, the initial intentions of both ACECI and

the Agency were to develop a task list and scope of work that covered all of the specific

regulatory requirements of the complete regulatory framework for the applicable rules (i.e. Part

USI in no way intends to be disrespectful towards the participants in the

Group, Mr. Goodwin or the Agency, but the task list that was created by the

Group and the Agency, which is now serving as the “starting point” for the task list in Subdocket

B, simply falls substantially short of meeting the standards set by both Mr. Chappel and Mr.

Goodwin in each of their respective testimonies. Perhaps this helps explain one of the reasons

Work Group’s estimate of the number of professional consulting hours that are

necessary during a corrective action are only twenty one percent (21%) of the actual number of

B. Inadequacies in Subdocket B “Starting Point” Task List & Scopes of Work

The task list and associated scopes of work provided in Subdocket B do not explicitly assign

many of the specific regulatory requirements to the listed tasks or scopes of work. This lack of

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explicit assignment and specificity creates numerous uncertainties and results in an overall

structure that will be nearly impossible to administer and interpret on an impartial and consistent

basis. Although very detailed, the scopes of work that are provided within the proposed Sections

732.845 and 734.845 of Subdocket B are not inclusive of all of the detailed requirements

contained within the applicable regulatory framework (i.e. Part 732 or Part 734.) Please see

Attachment C for an overview of some of the regulations that are not explicitly covered by the

proposed tasks and associated scopes of work. The tasks and scopes of work provided in

Subdocket B are also lacking the explicit specificity to make the specific requirements of the

scope of work clear. For example, consider the list of questions presented in Attachment D.

This list of questions demonstrates how the proposed tasks lists and scopes of work do not

provide the specificity necessary to make the task requirements clear. Both the standard AIA

form proposal and Cardinal Brands form described in Section III above indicate that in order for

a lump sum payment amount to be effective the scope of work must be clear and must be

familiar. The Cardinals Brands form uses the phrases “guaranteed as specified.” This type of

language is fairly common in standard lump sum contracts. A reasonable business person would

only “guarantee” something if they were confident that they clearly understood the requirements

of the scope of work. In the case of Cardinals Brand form the clear understanding is gained

from information provided in the “drawings and specifications” which serve to define the scope

of work. The AIA form proposal is similar in that it states that “I having reviewed the contract

documents and familiarized myself with all conditions affecting the scope of work…” It is

evident from this language that a clear comprehension of the scope of work is necessary in order

to propose a lump sum payment amount. These observations made by USI are supported by an

abstract of a work by authors Peter R. Dumont, Member, ASCE, (Proj. Engr., S&B Engrs. &

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Constructors Ltd., 7825 Park Place Blvd., Houston, TX 77087.), G. Edward Gibson, Jr.,

Member, ASCE, (Assoc. Prof., Dept. of Civ. Engrg., ECJ 5.2, Univ. of Texas at Austin, Austin,

TX 78712-1076.), and John R. Fish, (Dir., Proj. Quality Controls, Procurement and Service,

Process Services Inc., P.O. Box 86810, Baton Rouge, LA 70879.) which was published in the

Journal of Management in Engineering Vol.13, No. 5 September/October 1997, pp. 54-60. An

excerpt from the abstract on this article reads:

“It is widely accepted that poor scope definition is one of the leading causes of project

failure in the U.S. construction industry. Many owner and contractor companies understand this;

however, they share the misconception that it is not economically feasible to spend the time or

money necessary to adequately define the scope of work early in a project’s life cycle. In other

cases project participants are ignorant about the requirements for an adequately defined scope

A second inadequacy with the Subdocket B tasks and scopes of work are the absence of

specific “deliverables” for each task. The term deliverable has been used in previous sections of

this testimony. The concept of a deliverable is highly important to the development of a lump

sum payment amount so the term is worth defining. A deliverable is defined as a tangible

. If a deliverable is not able to be measured then a task does not

exist. This is important because many of the “tasks” listed in Subdocket B do not have a tangible

measurable product therefore they should either be categorized as “activities” and not “tasks” or

a deliverable should be defined in order for them to be properly considered a task. The concept

of deliverables, have not been discussed to date in this proceeding but they are critical to the

establishment and administration of a workable rule that involves maximum lump sum payment

amounts. These observations made by USI are supported by an abstract of a work by author:

Georgetown University- University Information Services-

http://uis.georgetown.edu/departments/eets/dw/GLOSSARY0816.html

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Thomas J. Willoughby, Member, ASCE, (Sr. Proj. Mgr., Parsons Brinckerhoff Quade &

Douglas, Inc., 1230 Columbia St., Ste. 640, San Diego, CA 92101) in his work which was

21-25. An excerpt from this abstract reads:

Pre-establishing a comprehensive list of deliverables that are time sensitive with a

budget allocation that matches closely the anticipated expenditure curve is essential.

Reaching mutual agreement between all participating parties, especially the client,

on this deliverable list is a special challenge to a project manager’s negotiation

The third, and much less serious inadequacy, is that the currently proposed scopes of

work provide few measurable deliverables but many activities. Since the proposed tasks were

created arbitrarily for the sole purpose of inclusion in the proposed Sections 732.845 and

734.845, and do not follow the deliverable oriented technical regulations, the scopes of work for

the tasks tend to list activities that a consultant might perform on a daily basis but that are not

truly part of the deliverable. Activities such as project management, correspondence, report

preparation, etc. are “givens” for professional consulting work. To repeatedly list those activities

in the various task structures is not necessary and analogous to specifying that one of the tasks

that a carpenter engages in is swinging a hammer. This approach focuses on the activity and not

on the real task. The end result of a true task is the completion of the deliverable. In the case of

the carpenter the deliverable that results from all the swinging of the hammer might be the

completion of a wall. Tracking all of the hammer swinging is not necessary. Focusing on the

deliverables is the more appropriate approach because the deliverable is typically the item for

which payment is tendered. Too much focus on activities tends to waste money because one can

engage in a flurry of activity and still not accomplish the task’s deliverable. (i.e. activities can

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only costs money, the completion of deliverables yields value). Some consultants may want to

focus on activities; those that are truly interested in cost containment and program improvement

will be willing to focus on deliverables. As a shrewd business person would establish the task

structure and scopes of work to focus on deliverables. The Board and the Agency should make

certain that the tasks structures and scopes of work under the UST program are designed to yield

value through the timely and cost effective completion of deliverables. The existing Subdocket B

tasks and scope of work structures are laden with “activities” and are not properly centered on

“deliverables”. This is an inadequacy from a cost control perspective.

The fourth notable inadequacy is the level of reporting and administrative complexity that

could be created by inclusion of detailed “activities” in the scope of work. The Board and the

Agency must determine how much detailed “activity tracking” is appropriate for the program.

Tracking time at the “activity” level could add substantial complexity and costs to the

administration of the UST program. The currently proposed task structure begs the question, at

what level should time be reported by the professional?

For the above reasons, the overall task structure, as it is currently presented in Subdocket B is

inadequate. There are two logical ways in which this structural inadequacy can be mitigated.

For ease of review this subsection has been divided into two sections. The first section

describes a way to attempt to resolve the inadequacies with the current Subdocket B task list and

associated scopes of work. This section also discusses the disadvantages of attempting to do so.

The second section provides an alternative approach to establishing tasks and associated scopes

Inadequacies in Subdocket Task List and Scopes of Work.

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The problems with the task list and scopes of work found in Subdocket B could be remedied by

supplementing the existing task list and associated scopes of work (as currently proposed in

Subdocket B) with detailed information that will explicitly list the specific regulatory

requirements that are necessary to complete the deliverable for each task. Since the task listed in

Subdocket B do not currently include clearly defined deliverables for each task this approach

would also require that an objective deliverable be identified and assigned for each task.

The tactic of supplementing the existing task structure and associated scopes of work is

somewhat handicapped by several different factors. First, the tasks listed in Subdocket B are not

specifically linked to the regulations. Supplementation efforts will require a fairly extensive

level of effort to develop specific regulatory assignments for each task and to create the new

tasks necessary to accommodate specific regulatory requirements that are not intended to be

associated with tasks in the currently proposed list. As a result the tasks structures could

become unwieldy. Second, since the tasks were not originally established to track with the

regulations it may be difficult to identify a logical place to incorporate specific regulatory

assignments into the task and scope of work structure. Third, since the tasks and scopes of work

do not define deliverables it will be necessary to do so. Fourth, because the task structure and

associated scopes of work are laden with “activities” it may be necessary to remove these

unnecessary activities in order to make specific regulatory assignments and provide

identification of deliverables. Finally, if the appropriate regulatory assignments are made and

the deliverables are identified and the unnecessary activities are not removed from the scopes of

work, the administration of the program could become unwieldy.

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Alternative Approach to Establishing Tasks and Scopes of Work

The second approach, which may be a refreshing alternative and a means of resolving the on-

going debate that has centered around the regulation of professional consulting services since the

very onset of Subdocket A would be to do the following:

1. Abandon the existing task list and scopes of work altogether. This task list was created

somewhat arbitrarily and has been shown to be incomplete. Continued attempts to force

fit the incomplete and arbitrarily created tasks and associated scopes of work originally

form are highly laborious, controversial and

2. Adopt a simple task structure based upon the general regulatory framework. (one task

structure for Part 732 and another for Part 734);

3. Adopt the specific regulatory requirements along with appropriate guidance documents,

forms, model documents, etc. as the detailed work specifications and establish an

objective and measurable deliverable(s) for each task.

4. Allow the combination of the specific regulatory requirements, guidance documents,

forms, model documents along with the deliverable associated with each task to define

5. Designate repetitive “activities” such as project management, correspondence,

distribution, planning, reporting, preparation, records gathering, resource coordination,

technical evaluation, waste disposal, oversight, documentation, designing, certification,

etc. as eligible costs in Section 732.605 and 734.625 and remove them from the scope of

work altogether since they are activities that are inherent in the performance of

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6. Standardize all of the procedures in items 2 through 5 above and require all consultants

across the state to bill pursuant to the new tasks structure and scopes of work as a pre-

7. Implement a standardized program of tracking costs.

8. Collect a sufficient amount of data, analyze cost trends and ranges of costs for each task

and then propose appropriate task for conversion to lump sum payment amounts.

is a list of task based on the alternative method outlined above.

is a listing of each of those tasks along with a scope of work that

specifies the specific regulatory language (specifications) and the deliverable(s) for each task.

At hearing, USI will provide more details about the information contained in each of the above

This alternate approach to specifying the scope of services is intended to be entirely

consistent with the Standards, Approach and Implementation Steps set forth by PIPE in their

Policy & Position Paper presented to the Agency as PIPE’s testimony. In this Subdocket B USI

endorses the Standards, Approach and Implementation Steps offered by PIPE in its policy and

position statement and provides the detailed approach listed above for meeting the needs outlined

in Steps 1 and 2 of Phase One of PIPE’s implementation steps.

creates tasks and scopes of work that meet PIPE’s standards in the following ways:

- The UST rules are the basis of the work requirements across the entire

state. Using the rules themselves as the task list is the most fair and objective approach

available. (It is anticipated that others may disagree with this point. Others may suggest that the

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Agency does not apply the rules objectively. USI is willing to discuss and explain this point in

- The UST rules have been in place for years, their specific

requirements should be highly understood by the industry and the Agency.

that have been promulgated per the Administrative Procedures Act are by

Clearly and Convincingly Evident that they will achieve the Agency’s goals of expediting and

Using the specific regulatory requirements of the existing technical UST rules (part

732 and part 734) along with appropriate guidance documents, forms, model documents, etc. as

the detailed work specifications and establishing objective and measurable deliverable(s) for

each task is the most efficient and straightforward approach to achieving a rule that will

streamline and expedite. It is certainly much more efficient than introducing an entirely new task

structure into the program, which is the course that is being followed under the tasks that are

currently published in Subdocket B. The introduction of an entirely new task structure will

require much more, training and retooling and will not streamline the program.

PIPE’s Standards for Developing Scopes of Work

PIPE desires for task conventions to be based upon common standards that are widely known,

. The use of the regulations as the basis for a task list

PIPE also desires for the task list to be comprehensive in that every provision of the UST

regulations should be accounted for somewhere within the standardized task list or the scopes of

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work associated with the individual tasks

. Basing the task list on the technical regulations is the

best way to assure that this requirement is met.

- PIPE desires for the scope of work requirements and deliverable(s) for each

task to be clearly defined from both qualitative and quantitative perspectives. The alternate

approach proposed herein accomplishes both goals. The qualitative components of the scope of

work are specified by using appropriate the specific regulatory requirements, guidance

documents, forms, model documents, etc and the quantitative component of the scope of work is

established by setting forth the deliverable(s). USI will provide more explanations at hearing as

to how these standards are met by this proposed alternative approach.

- Since the regulations are inherently standardized, this requirement is easily met.

Task Conventions should not be too detailed or too broad

herein provides a total of forty (40) standardized tasks for work performed pursuant to part 734

and a total of fifty (50) standardized tasks for work performed pursuant to part 734. In either the

case, the maximum number of tasks that would be applicable in any phase of a project would be

sixteen. Comparatively, the task list proposed in Subdocket B for part 732 provides sixteen (16)

first tier tasks and a total of 542 tasks and or specifically identified activities in the task/scope of

Task conventions should be broad enough to facilitate streamlining, yet narrow enough to

The task list offered as part of this alternate approach meets

this goal. It should be noted that the tasks names that include the words “prepare and submit” or

“negotiate” will generally be conducted in an office setting (presumably, but not always, by more

senior level staff) whereas, tasks that include the words “perform” or “collect” will generally be

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conducted in the field as oversight activities. These activities would presumably, but not always,

be conducted by technicians. This distinction is made because the tasks were intentionally

named in this fashion to help segregate field oversight activities and costs from office activities

Task conventions and their associated scopes of work should avoid the use of repetitive

activities, means and methods of performing the work and other intricacies

accomplished by listing the activities listed in item “5” above in Section 732.605 or 734.625 as

appropriate as opposed to including those activities in the detailed specifications.

Published- The list of tasks, along with the accompanying scope of work for each task, the

deliverable(s) associated with each task, and any associated regulatory guidance, standards,

notes, directives, etc. should be published and readily available to the public.

accomplished. Utilizing the approach proposed herein much of the work is already complete

since the regulations are already published. USI will provide more information on this topic at

Flexible-The rules should be flexible so that tasks can be added and scopes of work and

deliverables(s) can be modified as regulatory requirements change over time.

approach specified herein is highly flexible in this regard. As regulations are added to the

overall regulatory framework they could be added to the task list by simply determining the

deliverable related to each regulation and authoring the detailed regulatory language in a fashion

that clearly specifies the qualitative and quantitative components of the deliverable.

In addition to meeting PIPE’s standards, the alternative approach outlined above is

consistent with the expressed desires of many of the participants in these proceedings.

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From the Agency’s perspective the alternative approach specified above meets the goals

and objectives of streamlining the program and reforming the reimbursement process by

organizing the task in a way that will help streamline the remediation process and will help to

identify and decrease perceived incidents of abuse. Because the alternative approach accounts

for every regulation that requires a work activity within the overall regulatory framework, the

Agency’s repeatedly stated desire which was conveyed by Doug Clay at the July 27, 2005

hearing when he said: “The scope of work is what you need to do to meet regulations.”

(Transcript of July 27, 2005 hearing, page 17 lines 21-22.) will be satisfactorily and fully

accomplished and more importantly in a fashion that is inclusive and explicitly specific.

Because the alternative approach would include in its specifications of the scope of work,

the specific regulatory requirements, deliverable(s), along with appropriate guidance documents,

forms, etc. the approach is consistent with the Board’s comments implicating the applicability of

currently existing guidance documents such as fact sheets, forms, model documents and answers

to FAQ’s to the tasks and scopes of work. It is also consistent with CSD’s suggestion that the

Board require the Agency to provide a comprehensive list of the tasks to be completed, including

number of maps, cross sections, etc. to be included in each report. ACECI’s needs as stated by

Dan Goodwin when he declared the need for a “

clear delineation of the scope of services that

may be included in each of the phases of the project”

Finally, since the alternative approach described above satisfies both the general and

scope of work standards set forth by PIPE, the alternate approach offered herein facilitates the

eventual conversion of task reimbursement to lump sum amounts in fashion that is completely

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Because the task structure proposed under this alternate approach is standardized and

based upon the regulations, any costs variations from site to site or that might result from

inconsistent interpretations of the regulations would be included in the data set for each task.

These variations may result in a wider range of costs for the particular task or an abnormal cost

distribution. In either case, the critical data would be available when determining the

appropriateness of a proposed lump sum payment amount.

Having the critical data would help to identify not only abuses of the system but also

inadequate quality on the part of a consultant or inconsistency in the application and

interpretation of the regulations by the regulatory authority. In short, it would provide a means

of facilitating a total quality management approach to the UST program; one that would

necessarily involve both consultants and the Agency.

In conclusion, USI would like to state that although it has pride of workmanship in what

it has offered above, it is most interested in developing a workable rule, so it is genuinely

interested in questions and constructive criticisms regarding its testimony and the alternative

approach to task and scopes of work. As was stated at the beginning of this testimony, USI

remains committed to the development of a workable rule and more importantly we are willing

to work to make sure that goal is accomplished.

Thank you again for the opportunity to provide input in these proceedings. I look

forward to any questions or comments that you may have.

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Attachment A- Similarities in Scope of Work

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210(h)(3) - Prepare & Submit EA Closure Report

3) If the most stringent Tier 1 remediation objectives of 35 Ill. Adm. Code 742 for the applicable indicator contaminants have been met, and if none of the criteria set forth in subsections (h)(4)(A)

through (C) are met, within 30 days after the completion of early action the owner or operator shall submit a report demonstrating compliance with those remediation objectives. The report must include,

A) A characterization of the site that demonstrates compliance with the most stringent Tier 1 remediation objectives of 35 Ill. Adm. Code 742 for the applicable indicator contaminants;

B) Supporting documentation, including, but not limited to, the following:

i) A site map meeting the requirements of Section 732.110(a)(1) of this Part that shows the locations of all samples collected pursuant to this subsection (h);

ii) Analytical results, chain of custody forms, and laboratory certifications for all samples collected pursuant to this subsection (h); and

iii) A table comparing the analytical results of all samples collected pursuant to this subsection (h) to the most stringent Tier 1 remediation objectives of 35 Ill. Adm. Code 742 for the applicable

C) A site map containing only the information required under Section 732.110(a)(1) of this Part.

Includes all labor, equipment, materials, supplies and subcontractors necessary to complete the deliverables listed below in

accordance with the regulatory requirements set forth in association with each deliverable.

Submission to the Agency a complete and fully executed

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Below are four (4) examples of items which are explicitly required by the regulations,

however, no explicit reference is made to them within the Scopes of Work listed within

the Board’s Opinion and Order dated January 5, 2006.

Pursuant to 734.210(a) there are activities that are required to be performed

within 24 hrs of the confirmation of the release. Pursuant to 734.625 (a)(1)

Early Action activities conducted pursuant to Subpart B are eligible for

reimbursement. However, Subpart H does not include a pay item inclusive of

Pursuant to 734.210(b) there are six (6) activities that are required to be

performed within 20 days of the notification of the release to IEMA. None of

the following tasks have associated pay items within Subpart H nor are they

found on within the Board’s Opinion and Order.

a. 734.210(b)(1) Remove petroleum to prevent further release

b. 734.210(b)(2) Visually inspect release and prevent further migration

c. 734.210(b)(3) Monitor/mitigate fire, explosion, & vapor hazards

d. 734.210(b)(4) Remedy hazards posed by excavated or exposed soils

e. 734.210(b)(5) Measure for the presence of a release

f. 734.210(b)(6) Determine the possible presence of free product

Pursuant to 734.845 costs associated with professional consulting services

must include project planning and oversight, field work, field oversight,

travel, per diem, mileage, transportation, vehicle charge, lodging, meals, and

the preparation, review, certification, and submission of all plans, budgets,

reports and applications for payment, and other documentation. Sections

734.845(a-f) include provisions for each of the above mentioned items with

the exception of costs associated with applications for payment pursuant to

734.625(a)(14). Neither Subpart H nor the scope of work provided in the

Board’s Opinion and Order include provisions for payment of this item during

Early Action, Site Classification/Investigation, or Corrective Action.

Pursuant to 734.345(b), an owner/operator as a minimum requirement must

conduct “best efforts” to obtain off-site access in accordance with 734.350.

However Subpart H nor the Board’s Opinion and Order include pay items

associated with obtaining off-site access.

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 1, 2006

PROPOSED TASK LIST BASED ON TECHNICAL REGULATIONS

601 - Prepare & Submit Application For Payment

308(b) - Abandonment of Soil Borings and Monitoring Wells

203(c) - Prepare & Submit Post 45day FP Removal Plan

203(d) - Prepare & Submit Post 45day FP Removal Budget

203(a)(5) - Prepare & Submit FP Removal Quarterly Report

203(g) - Prepare & Submit Amended FP Removal Plan & Budget

202(h)(3) - Prepare & Submit EA Closure Report

203(a)(4) - Prepare & Submit 45 Day FP Removal Report

204 - Prepare & Submit EA Application For Payment

202(a,b) - Perform Initial Response & Abatement

202(c,d,e) - Prepare & Submit 20 & 45 Day Reporting

305(a) - Prepare & Submit SCWP (Method 1 or 2)

305(e) - Prepare & Submit Amended SCWP and Budget

309 - Prepare & Submit SCCR (Method 1 or 2)

312(b) - Prepare & Submit SCWP (Exposure Pathway Exclusion)

312(e) - Prepare & Submit Site Classification Budget

312(k) - Prepare & Submit Amended SCWP & Budget

312(h) - Prepare & Submit SCCR (Exposure Pathway Exclusion)

307(c) - Perform Method 1 Soil Classification

307(d) - Perform Method 2 Soil Classification

307(f) - Perform Survey of Water Supply Wells

307(g) - Perform Investigation of Migration Pathways

307(h) - Perform Class III Groundwater Determination

307(i) - Perform Surface Water ID & Inspection

307(j) - Perform Groundwater Investigation

403(a) - Prepare & Submit Low Priority GWM Plan

403(c) - Prepare & Submit Low Priority GWM Budget

403(d) - Prepare & Submit Annual Low Priority GWM Report

403(e) - Prepare &Submit Low Priority GWM Completion Report

404(b)(1) - Prepare & Submit High Priority Investigation CAP

404(b)(2) - Prepare & Submit High Priority CAP

404(f) - Prepare & Submit High Priority CAP Budget

405(e, f) - Prepare & Submit Amended CAP & Budget

407(a) - Prepare & Submit Alt Tech Corrective Action Plan

407(b) - Prepare & Submit Alt Tech CAP Budget

407(d) - Perform Agency Required Remote Monitoring

404(g) - Prepare & Submit High Priority CACR

403(b) - Collect & Analyze Low Priority GW Samples

404(e) - Perform Corrective Action Investigation Activities

404(a) - Perform High Priority Corrective Action

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 1, 2006

PROPOSED TASK LIST BASED ON TECHNICAL REGULATIONS

215(c) - Prepare & Submit Post 45 Day FP Removal Plan

215(d) - Prepare & Submit Post 45 Day FP Removal Budget

215(a)(5) - Prepare & Submit FP Removal Quarterly Report

215(g) - Prepare & Submit Amended FP Removal Plan & Budget

210(a,b) - Perform Initial Response & Abatement

210(c,d,e,g) - Prepare & Submit 20 & 45 Day Reporting

210(h)(3) - Prepare & Submit EA Closure Report

215(a)(4) - Prepare & Submit 45 Day FP Removal Report

220 - Prepare & Submit EA Application For Payment

215(a)(1) - Perform 45 day Free Product Removal

605 - Prepare & Submit Application for Payment

445(c) - Agency Req Additional Water Supply Well Survey

315(b) - Prepare & Submit Stage 1 Work Plan

310(b)1 - Prepare & Submit Stage 1 Work Plan Budget

320(b) - Prepare & Submit Stage 2 Work Plan

310(b)2 - Prepare & Submit Stage 2 Work Plan Budget

325(b) - Prepare & Submit Stage 3 Work Plan

310(b)3 - Prepare & Submit Stage 3 Work Plan Budget

310(d) - Prepare & Submit Amended SI Work Plan & Budget

330 - Prepare & Submit SI Completion Report

335(a) - Prepare & Submit CT Corrective Action Work Plan

335(b) - Prepare & Submit CT Corrective Action Budget

335(e) - Prepare & Submit Amended CAP & Budget

340(a) - Prepare & Submit ALT Corrective Action Plan

340(b) - Prepare & Submit ALT Corrective Action Budget

340(d) - Perform Agency Required Remote Monitoring

355 - Prepare & Submit Corrective Action Status Report

345(a)(3) - Document Engineered Barriers and Controls

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 1, 2006

a) An owner or operator seeking to comply with the best efforts requirements of Section 732.404(c) of this Part must demonstrate compliance with the requirements of this Section.

b) In conducting best efforts to obtain off-site access, an owner or operator must, at a minimum, send a letter by certified mail to the owner of any off-site property to which access is required, stating:

1) Citation to Title XVI Section 57 of the Act stating the legal responsibility of the owner or operator to remediate the contamination caused by the release;

2) That, if the property owner denies access to the owner or operator, the owner or operator may seek to gain entry by a court order pursuant to Section 22.2c 22.2(c) of the Act;

3) That, in performing the requested investigation, the owner or operator will work so as to minimize any disruption on the property, will maintain, or its consultant will maintain, appropriate insurance

and will repair any damage caused by the investigation;

4) If contamination results from a release by the owner or operator, the owner or operator will conduct all associated remediation at its own expense;

5) That threats to human health and the environment and diminished property value may result from failure to remediate contamination from the release; and

6) A reasonable time to respond to the letter, not less than 30 days.

c) An owner or operator, in demonstrating that the requirements of this Section have been met, must provide to the Agency, as part of the corrective action completion report, the following

1) A sworn affidavit, signed by the owner or operator identifying the specific off-site property involved by address, the measures proposed in the corrective action plan that require off-site access, and

the efforts taken to obtain access, and stating that the owner or operator has been unable to obtain access despite the use of best efforts; and

2) A copy of the certified letter sent to the owner of the off-site property pursuant to subsection (b) of this Section.

d) In determining whether the efforts an owner or operator has made constitute best efforts to obtain access, the Agency must consider the following factors:

1) The physical and chemical characteristics, including toxicity, persistence and potential for migration, of applicable indicator contaminants at the property boundary line;

2) The hydrogeological characteristics of the site and the surrounding area, including the attenuation capacity and saturation limits of the soil at the property boundary line;

3) The nature and extent of known contamination at the site, including the levels of applicable indicator contaminants at the property boundary line;

4) The potential effects of residual contamination on nearby surface water and groundwater;

5) The proximity, quality and current and future uses of nearby surface water and groundwater, including setback zones and regulated recharge areas, wellhead protection areas, and setback zones of

6) Any known or suspected natural or man-made migration pathways existing in or near the suspected area of off-site contamination;

7) The nature and use of the part of the off-site property that is the suspected area of contamination;

8) Any existing on-site engineered barriers or institutional controls that might have an impact on the area of suspected off-site contamination, and the nature and extent of such impact; and

9) Any other applicable information assembled in compliance with this Part.

e) The Agency shall issue a No Further Remediation Letter to an owner or operator subject to this Section and otherwise entitled to such issuance only if the owner or operator has, in accordance with

this Section, either completed any requisite off-site corrective action or demonstrated to the Agency’s satisfaction an inability to obtain off-site access despite best efforts.

f) The owner or operator is not relieved of responsibility to clean up a release that has migrated beyond the property boundary even where off-site access is denied.

Includes all labor, equipment, materials, supplies and subcontractors necessary to complete the deliverables listed below in

accordance with the regulatory requirements set forth in association with each deliverable.

Appropriate documentation of off-site access negotiations

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 1, 2006

601 - Prepare & Submit Application For Payment

a) An owner or operator seeking payment from the Fund shall submit to the Agency an application for payment on forms prescribed and provided by the Agency and, if specified by the Agency by

written notice, in an electronic format. The owner or operator may submit an application for partial payment or final payment. Costs for which payment is sought must be approved in a budget plan,

provided, however, that no budget plan shall be required for early action activities conducted pursuant to Subpart B of this Part other than free product removal activities conducted more than 45 days

after confirmation of the presence of free product.

b) A complete application for payment shall consist of the following elements:

1) A certification from a Licensed Professional Engineer or a Licensed Professional Geologist acknowledged by the owner or operator that the work performed has been in accordance with a technical

plan approved by the Agency or, for early action activities, in accordance with Subpart B of this Part;

2) A statement of the amounts approved in the corresponding budget plan and the amounts actually sought for payment along with a certified statement by the owner or operator that the amounts so

sought have been expended in conformance with the elements of a budget plan approved by the Agency;

3) A copy of the OSFM or Agency eligibility and deductibility determination;

4) Proof that approval of the payment requested will not exceed the limitations set forth in the Act and Section 732.604 of this Part;

5) A federal taxpayer identification number and legal status disclosure certification;

8) Designation of the address to which payment and notice of final action on the application for payment are to be sent;

9) An accounting of all costs, including but not limited to, invoices, receipts, and supporting documentation showing the dates and descriptions of the work performed; and

10) Proof of payment of subcontractor costs for which handling charges are requested. Proof of payment may include cancelled checks, lien waivers, or affidavits from the subcontractor.

c) The address designated on the application for payment may be changed only by subsequent notification to the Agency, on a form provided by the Agency, of a change in address.

d) Applications for payment and change of address forms shall be mailed or delivered to the address designated by the Agency. The Agency's record of the date of receipt shall be deemed conclusive

unless a contrary date is proven by a dated, signed receipt from certified or registered mail.

e) Applications for partial or final payment may be submitted no more frequently than once every 90 days.

f) Except for applications for payment for costs of early action conducted pursuant to Subpart B of this Part, other than costs associated with free product removal activities conducted more than 45 days

after confirmation of the presence of free product, in no case shall the Agency review an application for payment unless there is an approved budget plan on file corresponding to the application for

g) In no case shall the Agency authorize payment to an owner or operator in amounts greater than the amounts approved by the Agency in a corresponding budget plan. Revised cost estimates or

increased costs resulting from revised procedures must be submitted to the Agency for review in accordance with Subpart E of this Part using amended budget plans as required under this Part.

h) Applications for payment of costs associated with site classification may not be submitted prior to approval or modification of the site classification completion report.

i) Applications for payment of costs associated with site classification, low priority groundwater monitoring, or high priority corrective action that was deferred pursuant to Section 732.306 or 732.406

of this Part may not be submitted prior to approval or modification of the corresponding site classification completion report, low priority groundwater monitoring completion report, or high priority

j) All applications for payment of corrective action costs must be submitted no later than one year after the date the Agency issues a No Further Remediation Letter pursuant to Subpart G of this Part.

For releases for which the Agency issued a No Further Remediation Letter prior to the effective date of this subsection (j), all applications for payment must be submitted no later than one year after the

Includes all labor, equipment, materials, supplies and subcontractors necessary to complete the deliverables listed below in

accordance with the regulatory requirements set forth in association with each deliverable.

Submission to the Agency of a complete and fully

the quantity of deliverables required for this task is dependent

on the schedule and duration of the clean-up activities

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 1, 2006

308(b) - Abandonment of Soil Borings and Monitoring Wells

b) Boreholes and monitoring wells shall be abandoned pursuant to regulations promulgated by the Illinois Department of Public Health at 77 Ill. Adm. Code 920.120.

Includes all labor, equipment, materials, supplies and subcontractors necessary to complete the deliverables listed below in

accordance with the regulatory requirements set forth in association with each deliverable.

Appropriate documentation of proper soil boring and

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 1, 2006

203(c) - Prepare & Submit Post 45day FP Removal Plan

c) If free product removal activities will be conducted more than 45 days after the confirmation of the presence of free product, the owner or operator must submit to the Agency for review a free product

removal plan. The plan must be submitted with the free product removal report required under subsection (a)(4) of this Section. Free product removal activities conducted more than 45 days after the

confirmation of the presence of free product must not be considered early action activities.

Includes all labor, equipment, materials, supplies and subcontractors necessary to complete the deliverables listed below in

accordance with the regulatory requirements set forth in association with each deliverable.

Submission to the Agency a complete and fully executed

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 1, 2006

203(d) - Prepare & Submit Post 45day FP Removal Budget

d) Any owner or operator intending to seek payment from the Fund must, prior to conducting free product removal activities more than 45 days after the confirmation of the presence of free product,

submit to the Agency a free product removal budget plan with the corresponding free product removal plan. The budget plan must include, but not be limited to, an estimate of all costs associated with

the development, implementation, and completion of the free product removal plan, excluding handling charges. The budget plan should be consistent with the eligible and ineligible costs listed in

Sections 732.605 and 732.606 of this Part and the maximum payment amounts set forth in Subpart H of this Part. As part of the budget plan the Agency may require a comparison between the costs of

the proposed method of free product removal and other methods of free product removal.

Includes all labor, equipment, materials, supplies and subcontractors necessary to complete the deliverables listed below in

accordance with the regulatory requirements set forth in association with each deliverable.

Submission to the Agency a complete and fully executed

Free Product Removal Budget Plan, corresponding to a

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 1, 2006

203(a)(5) - Prepare & Submit FP Removal Quarterly Report

5) If free product removal activities are conducted more than 45 days after the confirmation of the presence of free product, submit free product removal reports in accordance with a schedule established

Includes all labor, equipment, materials, supplies and subcontractors necessary to complete the deliverables listed below in

accordance with the regulatory requirements set forth in association with each deliverable.

Submission to the Agency a complete and fully executed

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 1, 2006

203(g) - Prepare & Submit Amended FP Removal Plan & Budget

g) If, following approval of any free product removal plan or associated budget plan, an owner or operator determines that a revised removal plan or budget plan is necessary in order to complete free

product removal, the owner or operator must submit, as applicable, an amended free product removal plan or associated budget plan to the Agency for review. The Agency must review and approve,

reject, or require modification of the removal amended plan or budget plan in accordance with Subpart E of this Part.

BOARD NOTE: Owners and operators are advised that the total payment from the Fund for all free product removal plans and associated budget plans submitted by an owner or operator must not

exceed the amounts set forth in Subpart H of this Part.

Includes all labor, equipment, materials, supplies and subcontractors necessary to complete the deliverables listed below in

accordance with the regulatory requirements set forth in association with each deliverable.

Submission to the Agency a complete and fully executed

Amended Free Product Removal Plan and corresponding

The quantity of deliverables required for this task is dependent

on the schedule and duration of the clean-up activities

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 1, 2006

e) Upon the Agency’s approval of a free product removal plan, or as otherwise directed by the Agency, the owner or operator must proceed with free product removal in accordance with the plan.

f) Notwithstanding any requirement under this Part for the submission of a free product removal plan or free product removal budget plan, an owner or operator may proceed with free product removal

in accordance with this Section prior to the submittal or approval of an otherwise required free product removal plan or budget plan. However, any such removal plan and budget plan must be submitted

to the Agency for review and approval, rejection, or modification in accordance with the procedures contained in Subpart E of this Part prior to payment for any related costs or the issuance of a No

BOARD NOTE: Owners or operators proceeding under subsection (f) of this Section are advised that they may not be entitled to full payment from the Fund. Furthermore, applications for payment must

be submitted no later than one year after the date the Agency issues a No Further Remediation Letter. See Subpart F of this Part.

Includes all labor, equipment, materials, supplies and subcontractors necessary to complete the deliverables listed below in

accordance with the regulatory requirements set forth in association with each deliverable.

Oversight and direction of Free Product Removal

Field documentation of Free Product Removal activities

ELECTRONIC FILING, RECEIVED, CLERK'S OFFICE, MARCH 1, 2006

202(h)(3) - Prepare & Submit EA Closure Report

3) If the most stringent Tier 1 remediation objectives of 35 Ill. Adm. Code 742 for the applicable indicator contaminants have been met, and if none of the criteria set forth in subsections (h)(4)(A)

through (C) are met, within 30 days after the completion of early action activities the owner or operator shall submit a report demonstrating compliance with those remediation objectives. The report

must include, but is not limited to, the following: