Monthly Archives: October 2014

CCRs, Fraking Create Engineering Market Sweet Spots

Surface impoundment retrofitting/closure and landfill design will be sweet spots for environmental engineering firms and waste haulers in the next few years for two reasons: coal ash and fraking.

A market resulting from implementation of new coal ash regs is imminent (the consent decree requires EPA to take final action on these regulations before the end of 2014).  Regardless of whether the much-anticipated EPA final action on coal combustion residuals (CCR’s) goes with a Subtitle C or a Subtitle D approach, the regs will create new opportunities for environmental engineering firms and waste haulers in the next few years as utility companies comply with fairly massive new requirements.

Coal ash is the second largest industrial waste stream in the country; around 140 million tons of coal waste is produced by electric utility companies annually according to EPA. CCRs are currently disposed of in 45 states, though the preponderance of sites are located in the eastern US with Kentucky, Texas and Indiana having the dubious distinctions of generating the most CCRs.  EPA estimates there are approximately 300 CCR landfills and 584 CCR surface impoundments at 495 coal-fired power plants.  Many units have exceeded their designed life spans. The majority of these sites are owned by private utilities.

If EPA chooses to regulate coal ash as a hazardous waste under Subpart C, the market is expected to be $1,474 million a year including industry compliance and regulatory oversight and enforcement.  Because EPA would have enforcement authority, hypothetically 100% of regulated sites would comply. The timing of the market will vary from state to state as authorized states adopt the rule.  The retrofit requirements and compliance rate makes the market under Subtitle C three times larger than under Subtitle D.

If EPA chooses to regulate these materials as solid waste under Subpart D, the market is expected to be $587 million per year and the regulations would go into effect six months after promulgation.  Compliance responsibility would rest with individual states.

The economic regulatory impact (aka market size) sounds like a lot until you consider that the Kingston, TN coal ash spill has cost TVA more than $1 billion to remediate and the Tennessee Department of Environment and Conservation spent $200 million for oversight according to the Tennessean newspaper in December 2013.

From the perspective of  engineers and haulers, what kind of work will be involved under each option?  A quick comparison of the provisions in the two options tells the tale:

http://www.epa.gov/wastes/nonhaz/industrial/special/fossil/ccr-rule/ccr-table.htm

Key Differences Between Subtitle C and Subtitle D Options
  SUBTITLE C SUBTITLE D
Effective Date Timing will vary from state to state, as each state must adopt the rule individually, can take 1–2 years or more Six months after final rule is promulgated for most provisions: certain provisions have a longer effective date
Enforcement State and Federal enforcement Enforcement through citizen suits; states can act as citizens
Corrective Action Monitored by authorized states and EPA Self-implementing
Financial Assurance Yes Considering subsequent rule using CERCLA 108 (b) Authority
Permit Issuance Federal requirement for permit issuance by states No
Requirements for Storage, Including Containers, Tanks, and Containment Buildings Yes No
Surface Impoundments Built Before Rule is Finalized Remove solids and meet land disposal restrictions; retrofit with a liner within 5 years of effective date. Would effectively phase out use of existing surface impoundments Must remove solids and retrofit with a composite liner or cease receiving CCRs within 5 years of effective date and close the unit
Surface Impoundments Built After Rule is Finalized Must meet Land Disposal Restrictions and liner requirements. Would effectively phase out use of new surface impoundments Must install composite liners. No Land Disposal Restrictions
Landfills Built Before Rule is Finalized No liner requirements, but require groundwater monitoring No liner requirements, but require groundwater monitoring
Landfills Built After Rule is Finalized Liner requirements and groundwater monitoring Liner requirements and groundwater monitoring
Requirements for Closure and Post-Closure Care Yes; monitored by states and EPA Yes; self-implementing

 

Some utilities will choose an off-site disposal.  Waste Management Inc. currently handles 100 million tons of trash every year according to an August WasteDive.com interview.  With an additional 140 million tons of regulated waste as a result of these new regulations, Waste Management and other haulers could see a significant increase in sales.

If you’d like to do some homework before visiting a potential utility client, check out two public databases maintained by EPA.  The first contains utility responses to Information Requests that went out in March, April and December 2009 and covered 240 facilities and 676 surface impoundments and similar management units,http://www.epa.gov/osw/nonhaz/industrial/special/fossil/surveys/index.htm

The second database, of Coal Combustion Residuals Impoundment Assessment Reports, contains hazard rankings of the structural integrity of surface impoundments, and action plans by company.  http://www.epa.gov/osw/nonhaz/industrial/special/fossil/surveys2/index.htm

EarthJustice also publishes two datasets that are helpful:  http://earthjustice.org/sites/default/files/Coal-Plant-CCW-Disposal-Units-from-ICR.pdf lists plant, city, state, pond id, lined/unlined, leachate collected, and status.  In September 2014,  Earthjustice also published a spreadsheet provided by EPA in response to a FOIA request listing by site, and by units within sites, such details as monitoring status and contaminants exceeding mcl’s at each location which can be downloaded at http://earthjustice.org/library/coal%20ash.  Great background information if you are going to talk with your utility clients about their CCR programs.

The regulatory process behind these CCR regulations has been long and laborious.  The news coverage of surface impoundment failures at fraking facilities is escalating.  I cannot believe it will be long before surface impoundments at fraking stations come under state enforcement attention.  A wise fraking operator would build new surface impoundments that limit liability not only from leakage and failure, but also are ahead of the future regulatory action curve as well.

If you are pursuing the market from the enforcement angle, it will be work for state DEQ contract holders if a Subtitle D approach is chosen.  If Subtitle C is chosen, Nelly bar the door.  Obviously they don’t have a procurement strategy at this point.  The difference in site density between regions argues for a regional procurement strategy OR possibly OASIS. I do know that if I held an OASIS contract I’d already be meeting with RCRA folks and talking about how quickly my firm could provide support under this new, flexible mechanism.

Happy Hunting

Aussie Rescue and Placement Helpline Direct Mail Campaign 2014

For almost 15 years I have written the annual direct mail campaign for this nonprofit animal welfare organization.  In 2013 the campaign returned 740% on investment and accounted for 25% of the philanthropic donations received by ARPH that year.

ARPH is the official rescue organization of the Australian Shepherd Club of America. It’s website is at http://www.aussierescue.org/   The piece is four pages long (11×17, folded in half then  Z-folded, header out) and fits in a #10 envelope with response devise.  Pages 2 and 3 are omitted from the graphic below.  They contain the private addresses of the representatives in the organization and are omitted here for privacy reasons.

A Team By Any Other Name Is A …Subcontract?

On September 9, 2014, the GSA IG released its final report (A130009): Audit of Contractor Team Arrangement Use. Based on the review of multiple MACs and BPAs awarded between 2011-2013, the IG found “teaming arrangement data provided was incomplete, inaccurate and unverifiable.” Imagine that.  GSA is pursuing formal rulemaking with new regs expected by April 2016.  Interim guidance already posted clarifies the distinction between a team and a subcontract and provides direction to contracting officers utilizing an FPDS not yet able to handle multiple vendors per order.  Before getting into what it all means for contractors, let’s clarify when a team is not a team – it’s a subcontract.  GSA lays it all out at: www.gsa.gov/contractorteamarrangements

Contractor Team Arrangement (CTA) Prime Contractor / Subcontractor Arrangement
Each team member must have a GSA Schedule contract. Only the prime contractor must have a GSA Schedule contract.
Each team member is responsible for duties addressed in the CTA document. The prime contractor cannot delegate responsibility for performance to subcontractors.
Each team member has privity of contract with the government and can interact directly with the government. Only the prime contractor has privity of contract with the government and can interact with the government.  The prime contractor is responsible for its subcontracting activities. (Ordering activities are encouraged to specify in the Request for Quotation (RFQ) that the use of subcontractors requires prior approval by the ordering activities.)
The ordering activity is invoiced at each team member’s unit prices or hourly rates as agreed in the task or delivery order or GSA Schedule BPA. The ordering activity is invoiced in accordance with the prime contractor’s GSA Schedule contract, including any applicable price reductions.
Total solutions, otherwise impossible under individual GSA Schedule contracts, can be put together quickly and easily. The prime contractor is limited to the supplies and/or services awarded on its GSA Schedule contract.

I’ve been involved in forming hundreds of teams – we called them teams – and 99% of them didn’t strictly meet GSA’s “team” definition. I suspect there are very few true teams out there in the environmental services market outside of formal joint ventures. For the purposes of this blog, I’ll use the term CTA to mean a true team and subcontract to mean a prime/subcontract arrangement. Back to the real question: What does all this mean for environmental and engineering firms? In the case of a CTA, in the fullness of time I expect:

  • these rules will apply to ID/IQs as well as GSA contracts
  • a copy of the CTA will become a required submittal at the RFQ stage
  • teams will be asked to submit copies of CTA’s for existing contracts and task orders
  • all team members will undergo excluded parties checks
  • each teammate will be assigned a data identifier within AABS and will be treated as a prime contractor
  • performance ratings will accrue only to the firm doing the work
  • billing and payment will increasingly be made directly between the ordering agency and each team member
  • there will be more procurements like OASIS that exclude CTAs at the schedule level
  • resistance to markups on teammates and subcontractors is going to increase.  Count on it.
  • FPDS will be modified to allow tracking multiple contractors per order

What I wish small businesses all knew: When someone says you must have a GSA schedule contract to “team” with a GSA prime contractor…that’s true, BUT you can still subcontract to a GSA schedule holder without a schedule contract of your own and the hurdles are much lower. It’s true for prime contracts outside the GSA system as well.  Philosophically, a prime can subcontract to whomever it wants (in compliance with the terms of its subcontracting plan, the OK of the CO and excluding some set-aside scenarios); it’s the prime who is on the hook. Of course there are downsides to being a subcontractor.  It is good to know there are existing regulations that provide subcontractors with some recourse in two circumstances:  1) if they don’t get paid, and 2) if their qualifications were considered during the source selection process but they never received work under the contract.  If you find yourself in either circumstance and you are hitting a brick wall with your prime, you can and should contact the OCO or CO directly. What’s the procedure for a prime to start utilizing a subcontractor? If the prime is trying to meet subcontracting plan goals or to fill a technical gap, the CO/OCO will usually approve the request, even if the subcontractor in question wasn’t named in the proposal.

  • The SBA has a Subcontracting Assistance Program manual online if you want to dig into the details (or glean a few insights into developing the kind of subcontracting plan that will make source selection committees, and eventually auditors, really happy).
  • To talk all this through with someone, call your SBA Commercial Market Representative (CMR).  CMRs specifically counsel small businesses on how to obtain subcontracts, conduct matchmaking activities to facilitate subcontracting to small business, and provide orientation and training on the Subcontracting Assistance Program for both large and small businesses.  Most importantly, you can reach them by phone.  My CMR for Virginia, Anita Perkins, returns phone messages and has the patience of a saint. The Government Contracting Field Staff Directory lists names and numbers for CMRs nationwide.
  • You can also take advantage of online training.  On October 27, 2014, GSA is hosting a free webinar: GSA Contracting for Vendors Without a GSA Schedule.  This webinar gets repeated every few months.  To sign up, click the webinar link.  (Note: The date on the website still says October 20th, but the webinar has been rescheduled for the 27th).

Bottom Line – What does this mean for small businesses trying to get federal contract work?  It means subcontracting is the fastest and least costly way to break into or increase your base of federal work.  Find a prime contractor that either needs your technical skills or needs to meet its goaling obligations (or both) and show them how you can help.  If they agree, the paperwork is doable and it is certainly easier than the whole proposal process.  How do you find that prime that needs you?  Stay tuned.  Follow this blog and I’ll be covering some tools to identify a likely prime and some strategies for what to do then. If you wish, follow me on Twitter at @FedEnvBD  Thank you!

CFE is a small, woman-owned business providing federal business development support to companies in the environmental, engineering, energy and water industries.

SBA IG to HUBZones Firms: Double-Check Your DSBS Profile

The SBA IG has released a report highlighting weaknesses in the data systems used to track government progress towards small business contracting goals (Sept 24, Report 14 18 Agencies Are Overstating Small Disadvantaged Business and HUBZone ).

Hidden among those findings is some practical information that is important for small businesses to know right now. Bottom line: it is the responsibility of each individual small business to make sure its profile in the Dynamic Small Business Search (DSBS) system is visible and up-to-date. That process is a little more involved than it sounds, partly due to the aforementioned system problems.

The IG report summarized what happens if a small business, particularly a HUBZone business, doesn’t show up in the Dynamic Small Business Search system:

“When a firm enters its profile into SAM to become eligible to receive federal contracts, SAM refers small businesses to DSBS to provide a profile in order to market themselves as small businesses. The SBA also instructs small businesses to utilize DSBS in order to market themselves because agency contracting officers use DSBS to conduct market research prior to awarding small business contracts. In addition, procuring agencies’ contracting officers are required to confirm HUBZone certification through DSBS prior to awarding HUBZone contracts, and can use this system as a check prior to awarding 8(a) contracts. However, we found that DSBS is not working as intended. As a result, certain small businesses are not getting the visibility in DSBS that is needed for contracting officers to make decisions, particularly regarding HUBZone firms and may impact federal agencies in meeting their HUBZone procurement goals. Furthermore, individual HUBZone firms that successfully navigate the certification process will suffer the most because if the firm is not visible to agency contracting officers, it decreases its chance to obtain HUBZone contracts.”

So, while SBA is fixing its bigger problems, every small business out there – and particularly HUBZone firms – should take a few minutes to make sure their System for Award Management (SAM), the official U.S. Government system that consolidates the capabilities of CCR/FedReg, ORCA, and EPLS, has been updated within the past twelve months and that their updated DSBS profile is visible and accurate.

1) Make sure you have entered your data into SAM and that DSBS has created an accurate and visible profile for your firm.

2) Whenever you update your SAM make sure DSBS accurately recognizes the updates and your profile is still visible (and updated) on the DSBS system. DSBS has been having trouble recognizing SAM updates and as a result sometimes hides recently updated profiles. Double-check the DSBS after every SAM update.

SBA publishes a SAM Users Guide.  The Federal Service Desk is a great resource as well.  They have a telephone support line (real humans!) as well as an option to submit questions via a web form. I’ve never had a particularly long wait time in the telephone queue and I have yet to reach someone who didn’t know what they were doing.  You may contact the Federal Service Desk for help with:

•System for Award Management (SAM)
•Catalog of Federal Domestic Assistance (CFDA)
•Electronic Subcontracting Reporting System (eSRS)
•Federal Business Opportunities (FBO)
•Federal Procurement Data System (FPDS-NG)
•FFATA Subaward Reporting System (FSRS)

3) Make sure your information is updated annually. If you don’t update your SAM profile annually it expires. Once your SAM profile expires, DSBS no longer considers your business to be active and, guess what, your DSBS profile disappears.

4) Don’t rely on Pro-Net to do your updates. Pro-Net doesn’t create an audit trail and SBA doesn’t consider it a viable solution to the problem. Use SAM.

DSBS is searchable by the public and has been called the government yellow pages. See you in the system!

CFE is a WOSB providing federal business development support for environmental, engineering, energy and water firms.