Application Theory & Practice of Pay-for-Performance Remediation
Mark Vigneri, EBSI, Wayne, NJ

Case Studies in Performance Based Technology Substitutions
Ron Adams, EBSI, Ponte Vedra, FL

Pay-for-Performance Subcontract Stimulates Innovation and Reduces Cost During Remediation of a VOC Groundwater Plume at NAS North Island
Richard Wong, R.G., CHG, Shaw Environmental, Inc., San Diego, CA

Pay-for-Performance Contracting and Implementation of Embedded Technology Strategies
Frank Van Ryn, Reiss Remediation, Wichita, KS

Management of UST Remediation via Pay-for-Performance
Rich Werner, P.G., ECI, Norristown, PA
Mark Vigneri, EBSI, Wayne, NJ

Pay-for-Performance Free Product Remediation Technologies
Vince Barlock, Pelorus Laboratories, Inc., Evergreen, CO  

Application Theory & Practice of Pay-for-Performance Remediation

Mark Vigneri, EBSI, 1127 Crossing Way, Wayne, NJ, 07470, Tel: 973-633-5011

Pay-for Performance remediation contracting requires in-house access to multiple technology sets and a long line of projected circumstances to: 1) construct a project, 2) related sets of projects, and 3) an organization to complete all projects.  Multiple dependent matrices need to be established for technical design, requiring layers of "if/then/or" planning.  Technical designs lead to economic designs.  Economic designs require an understanding of parameters and limits drawn form a client's goals and resources.  Once all of the fixed variables are confirmed, then specialized economic theory can be applied to determine many different price structure options.

Environmental Business Solutions International, Inc.’s (EBSI) On-Contact Remediation Process® family of in-situ technologies used a four component design to interlink many interchangeable remediation technologies. The Physical, Preparation, Conversion and Restoration Stages are logical divisions used in engineering designs.  Cubic volumes are assigned in stages with assumptions of changes and failure.  The work product is a proprietary set of designs to create access to contamination and chemical variations to treat contaminants to goals.

Economical principals for pricing are very complex and depend on derivatives of postulates fixed to the use of each technology.  Each physical device is seen as an independent project with a correlation to related devices.  Since EBSI performs most remediation projects on a "not-to-stop" pay-for-performance methodology, the largest variable is T-being time.  Time has a large cost associated with it, as continuous operations with milestones for payment continually change internal margins and funding for projects.  This negates common practices used in common best-efforts remediations and requires an actuarial database of experiences to extrapolate quotable client costs.

The benefit of this extreme level of work product is an ability to actually smoothly perform on a large array of different types of remediation and contracting vehicles without danger to EBSI or the client.  The presentation will illustrate that to do otherwise, even with accepted industry practices, is legal gambling and not of long term services to a vendor of projects.

EBSI has been using these academic methos to create commercially available pay-for-performance remediation projects for five years.  Our case studies range from DOD sites, industrial plants, land development, emergency responses, active gas stations, commercial real estate and many other types of sites.

Case Studies in Performance Based Technology Substitutions

Ron Adams, P.E., EBSI, Inc., 830-13 A1A North, #371, Ponte Vedra, FL  32082, Tel: 904-280-2596, Fax: 904-280-2597, Email: radams@ebsi-inc.com

Performance based contracting requires that the cleanup company has the ability to implement multiple remediation techniques to address various contaminant classes and site conditions.   Further, the cleanup company must be able judge the effectiveness of the techniques being used at a site in order to understand: (1) how to adjust the current technique to boost its effectiveness; (2) when to substitute another technique for the one in current use; and, (3) which replacement techniques to substitute into use at the site.

This paper will provide an overview of remediation techniques and their relative effectiveness under differing conditions, monitoring approaches to gather meaningful real-time data to analyze effectiveness, decision making rationale for technology substitutions, and selection of technology replacements.  Lastly, the paper will discuss case studies for sites at which these techniques were used.

Pay-for-Performance Subcontract Stimulates Innovation and Reduces Cost During Remediation of a VOC Groundwater Plume at NAS North Island

Richard Wong, R.G., CHG, Shaw Environmental, Inc., 1230 Columbia Street, Suite 1200, San Diego, CA 92101-8517, Tel: 619-437-6326, ext. 314, Fax: 619-437-6368, Email: richard.wong@shawgrp.com
Mark Bonsavage, P.E., Southwest Division, Naval Facilities Engineering Command, South Bay, AFT, 2585 Callaghan Highway, Building 99, San Diego, California 92136-5198, Tel: 619-556-7315, Fax: 619-556-8929, Email: bonsavagemj@efdsw.navfac.navy.mil
Richard G. Mach Jr., P.E., Naval Facilities Engineering Command, Washington Navy Yard, 1322 Patterson Avenue, Suite 1000, Washington DC 20374-5065, Tel: 202-685-9299, Fax:  202-685-1670, Email: machrg@navfac.navy.mil
Ron Adams, P.E., EBSI, Inc., 830-13 A1A North, #371, Ponte Vedra, FL  32082, Tel: 904-280-2596, Fax: 904-280-2597, Email: radams@ebsi-inc.com

With the DoD direction  to control rising O&M costs by evaluating means for optimizing overall performance and effectiveness of remedies¹, NAVFAC is aggressively developing policy and guidance to ensure optimization of all site remedies.  This Navy policy will address all aspects of the remedy screening, evaluation, selection, design, installation, operation, and long term management for each site.  There will be a requirement for “exit strategies” for every site , which will be based on site-specific lifecycle design analysis.  This Navy policy is expected to be completed by Fall 2003.

Successful project teams will scope projects with optimization and exit strategies in mind, manage stakeholder expectations, manage risk, and demonstrate continuous optimization².  The DoD encourages prime contractors with cost type contracts to use performance-based payments (PBP) on fixed-price subcontracts and issued a guidance document that outlines the advantages and strategies for successful PBP contacting³.  NAVFAC’s acquisition strategy ensures that each Engineering Field Division/Activity (EFD/A) has a variety of contractual vehicles to optimally meet the needs of each site.

When the NAS North Island Site 5 removal action was initiated in 2000, the selected remedy, in-situ chemical oxidation, was an emerging technology with much promise but with many uncertainties regarding its effectiveness. To manage these uncertainties, the NAVFAC SWDIV South Bay Area Focus Team and its contractor, Shaw Environmental, embraced the NAVFAC and DoD initiatives and developed, competed, awarded and effectively implemented a “performance-based” subcontract for the in-situ chemical oxidation treatment of a VOC groundwater plume adjacent to the Pacific Ocean.  The amount of subcontractor (Environmental Business Solutions International) compensation was based on the level of contaminant reduction achieved.  The drive to maximize contaminant reduction improved team partnering efforts and resulted in several technical innovations and optimization of the remedial effort with no change orders. The NAS North Island performance-based procurement model is an example of an effective partnering and optimization strategy to reduce costs and to manage stakeholder expectations and risk.

¹ Management Guidance for the Defense Environmental Restoration Program, Office of the Deputy Under Secretary of Defense, Installations and Environment, September, 2001.

²  Special Report SR-2101-ENV, Guidance for Optimizing Remedial Action Operation (RAO), Naval Facilities Engineering Command, Department of the Navy RAO/LTM Optimization Working Group, Interim Final, April 2001

³   User’s Guide To Performance Based Payments, Office of the Under Secretary of Defense (Acquisition, Technology and Logistics), November 2001 

Pay-for-Performance Contracting and Implementation of Embedded Technology Strategies

Frank R. Van Ryn, Reiss Remediation, Inc., 4111 E. 37^th St. N, Wichita, KS 67220, Tel: 316-828-2146, Fax: 316-828-4034

A significant amount of environmental investigations and cleanup work are performed using time and material type contracting arrangements.  Utilization of risk-based remediation approaches provides flexibility in obtaining No Further Action approval letters.  This flexibility provides an opportunity to utilize pay-for-performance contracting mechanisms.  The pay-for-performance contract aligns the contractor’s incentives with the company purchasing the service.  Performance can be based on cleanup goals, achieving plume stabilization, or reducing the extent/concentration of the plume to conform to a risk-based closure strategy.  Various contracting mechanisms are available to embed technologies into the contract to provide an incentive to the contractor to complete the cleanup in the most cost-effective manner.  

Management of UST Remediation via Pay-for-Performance

Rich Werner, P.G., ECI, 500 East Washington Avenue, Suite 375, Norristown, PA
Mark Vigneri, EBSI, 1127 Crossing Way, Wayne, New Jersey

Conducting multiple concurrent site remediations is a challenge under any circumstance. Managing many simultaneous pay-for-performance insitu chemical remediation efforts at former and active underground storage tank sites is an even higher level challenge.  Petroleum contaminated sites each have unique configurations of release size, impacted zone characteristics and response to active remediation.   When remediating sets of sites, on a performance basis, costs and timelines for testing and reporting can become an extended overhead for a client, if not managed carefully with “if/then/or” planning logic.

Environmental Consulting, Inc. (ECI) has extensively used Environmental Business Solutions International, Inc.’s (EBSI) On-Contact Remediation Process® family of in-situ technologies to configure methods to detect contamination real-time and then chemically treat the soil and ground water.   While these methods are proven to be large cost savers for remediation, estimating time to completion and consulting costs need to be flexible. 

The object of the planning is to either accelerate closure or manage costs over a timeline.

Analysis and decisions require an understanding of all costs to date, savings over other remediation solutions, technical progress and projection of sampling and reporting schedules.  Accelerated projects depend on an ability to enter closure testing as soon as possible.  More difficult sites require extensions of timelines and minimized reporting to allow for the remediation to be field engineered to completion.  The matrix of site management will justify costs and progress.

The entire set of project steps move along like one continuous mobilization for the customer and these methods have been extremely effective.  Because of the way pay-for-performance contracting guarantees progress towards closure goals to qualify for payment, management of the smaller variable overheads costs will insure a project is successfully completed.  Remediation efforts that stay on course will close at the minimum cost and time.  Remediation requiring field changes and additional time will be completed with only the additional costs of monitoring.  This is a tremendous cost saving over common place best effort / failed remediation replacement cycles that many clients have experienced.  Site owners can realize a cap on site spending and achieve site closure by implementing ECI for no-stop / pay-for-performance remediation services.   

Related case studies include live gas stations, under buildings, near live tanks, small / high traffic businesses and other difficult settings.  

Pay-for-Performance Free Product Remediation Technologies

Vince Barlock, P.G., Pelorus, Inc., 3528 Evergreen Parkway, Almquist Building, 2^nd Floor, Evergreen CO  80439, Tel: 303-670-2875, Fax: 303-670-5139, Email: vbarlock@pelorusenbiotech.com

Pay for Performance remediation of free product sites requires both an understanding of the behavior of free product in the subsurface and the effectiveness and limitations of remedial options available for site cleanup.  Free product behavior in the subsurface is a complicated by the interactions of multiphase flow of vapors and liquids of different viscosities in porous media. Various factors, such as product type (gasoline versus no. 6 oil), soil types (gravel versus clay or bedrock), age of the release, depth to groundwater, and seasonal/historical fluctuations of groundwater all play important roles in the vertical and lateral distribution of free product.  Because the multiphase flow of the system is complex, remediation is also complicated.  Important factors for site remediation that effect pay for performance cleanup are: removal of continuing sources, the thoroughness of site investigations, setting realistic cleanup goals, esoteric limitations imposed by current property use, and the variety of techniques that may be available to the cleanup contractor.

This paper provides a general overview of free product behavior in the subsurface.  It also reviews the key factors effecting pay for performance contracting.  The discussion concludes with a review of proven technologies which can be used as site conditions change during the remediation process.

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