[Federal Register Volume 65, Number 236 (Thursday, December 7, 2000)]
[Notices]
[Pages 76611-76612]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31021]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmostpheric Administration


Notice of Indirect Cost Rates for the Damage Assessment and 
Restoration Program

AGENCY: National Oceanic and Atmospheric Administration (NOAA), DOC.

ACTION: Notice.

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SUMMARY: NOAA's Damage Assessment and Restoration Program (DARP) is 
announcing new indirect cost rates and a policy on the recovery of 
indirect costs for its component organizations invovled in natural 
resource damage assesment and restoration activities. These new rates 
and the DARP policy are effective as of October 1, 2000. More 
information on these rates and the DARP policy can be found at the DARP 
web site (www.darp.noaa.gov), or from the address provided below.

EFFECTIVE DATE: October 1, 2000.

FOR FURTHER INFORMATION CONTACT: Eli Reinharz, 301-713-3038, ext. 193; 
(FAX: 301-713-4387; e-mail: [email protected]), or Linda 
Burlington, 301-713-1217 (FAX: 301-713-1229; e-mail: 
[email protected]).

SUPPLEMENTARY INFORMATION: The mission of the DARP is to restore 
natural resource injuries caused by releases of hazardous substances or 
oil under the Comprehensive Environmental Response, Compensation, and 
Liability Act (CERCLA) (42 U.S.C. 9601 et seq.), the Oil Pollution Act 
of 1990 (OPA) (33 U.S.C. 2701 et seq.), or physical injuries in 
Naitonal Marine Sanctuaries under the National Marine Sanctuaries Act 
(NMSA) (16 U.S.C. 1431 et seq.). The NOAA DARP consists of three 
component organizations: The Damage Assessment Center (DAC) within the 
National Ocean Service; the Restoration Center within the National 
Marine Fisheries Services; and the Office of the General Counsel for 
Natural Resources (GCNR). The DARP conducts Natural Resource Damage 
Assessments (NRDAs) as a basis for recovering damages from responsible 
parties, and uses the funds recovered to restore injured natural 
resources.
    When addressing NRDA incidents, the costs of the damage assessment 
are recoverable from responsible parties who are potentially liable for 
an incident. Costs include direct and indirect costs. Direct costs are 
costs for activities that are clearly and readily attributable to a 
specific output. In the context of the DARP, outputs may be associated 
with damage assessment cases, or may be represented by other program 
products such as damage assessment regulations. In contrast, indirect 
costs reflect the costs for activities that collectively support the 
DARP's mission and operations. For example, indirect costs include 
general administrative support and traditional overheads. Although 
these costs may not be readily traced back to a specific direct 
activity, indirect costs may be allocated to direct activities using an 
indirect cost distribution rate.
    Consistent with Federal accounting requirements, the DARP is 
required to account for and report the full costs of its programs and 
activities. Further, the DARP is authorized by law to recover

[[Page 76612]]

reasonable costs of damage assessment and restoration activities under 
CERCLA, OPA, and the NMSA. Within the constraints of these legal 
provisions and their regulatory applications, the DARP has the 
discretion to develop indirect cost rates for its component 
organizations and formulate policies on the recovery of indirect cost 
rates subject to its requirements.

The DARP's Indirect Cost Effort

    In December 1998, the DARP hired the public account firm Rubino & 
McGeehin, Chartered (R&M), to: (1) Evaluate the cost accounting system 
and allocation practices; (2) recommend the appropriate indirect cost 
allocation methodology; and, (3) determine the indirect cost rates for 
the three organizations that comprise the DARP.
    The DARP requested an anlysis of its indirect costs for fiscal 
years (FY) where cost information was considered adequate to conduct 
such an analysis. Consequently, indirect cost rates were developed for 
the DAC and GCNR for FYs 1993 through 1999, and for the RC for FYs 1997 
through 1999 (see Table below). The goal was to develop the most 
appropriate indirct cost rate allocation methodology and rates for each 
of the DARP component organizations.
    R&M concluded that the cost accounting system and allocation 
practices of the DARP component organizations are consistent with 
Federal accounting requirements. R&M also determined that the most 
appropriate indirect allocation method was the Direct Labor Cost Base 
for all three DARP component organizations. The Direct Labor Cost Base 
is computed by allocating total indirect cost over the sum of direct 
labor dollars plus the application of NOAA's leave surcharge and 
benefits rates to direct labor. The indirect costs rates that R&M 
computed for each of the three DARP component organizations were 
further assessed as being fair and equitable. A report on R&M's effort, 
their assessment of the DARP's cost accounting system and practice, and 
their determination respecting the most appropriate indirect cost 
methodology and rates can be found on the DARP web site at: 
www.darp.noaa.gov. The report is entitled ``Indirect Cost Rates 
Incurred by the National Oceanic and Atmospheric Administration Damage 
Assessment and Restoration Program.''

The DARP's Indirect Cost Policy

    The DARP will include the costs of program policy work and 
techniques and methods development in indirect cost pools of its 
component organizations, but will monitor these activities annually to 
control costs. The indirect cost pools also include the cost of general 
management and administrative support and preparedness for spill 
response work.
    The DARP will apply the revised rates recommended by R&M for the 
respective fiscal years for each of the DARP component organizations as 
provided in the following table:

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                                                            Fiscal years (FY) (in percent)
             DARP unit              ----------------------------------------------------------------------------
                                        FY93       FY94       FY95       FY96       FY97       FY98       FY99
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DAC................................     226.63     247.83     285.33     306.58     250.08     249.81     161.33
RC.................................        N/A        N/A        N/A        N/A     139.70     142.82     203.24
GCNR...............................     107.10     107.24     147.05     286.82     173.30     191.12    239.08
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N/A--Not applicable. Rates were not calculated for these years.

    The revised rates identified in this policy will be applied to all 
damage assessment and restoration case costs as of October 1, 2000, 
using the Direct Labor Cost Base allocation methodology. For cases that 
have settled and for cost claims paid prior to October 1, 2000, the 
DARP will not re-open any resolved matters for the purpose of applying 
the revised rates in this policy. For cases not settled and not cost 
claims not paid prior to October 1, 2000, costs will be recalculated 
using the revised rates in this policy. The DARP will use the FY 1999 
rates for future fiscal years until year-specific rates can be 
developed.

    Dated: December 1, 2000.
Margaret Davidson,
Assistant Administrator for Ocean Services and Coastal Zone Managmenet.
[FR Doc. 00-31021 Filed 12-6-00; 8:45 am]
BILLING CODE 3510-JE-M