[Federal Register Volume 68, Number 193 (Monday, October 6, 2003)]
[Notices]
[Pages 57672-57673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-25237]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration


Notice of Indirect Cost Rates for the Damage Assessment and 
Restoration Program for Fiscal Year 2002

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

ACTION: Notice.

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SUMMARY: The National Oceanic Administration's (NOAA) Damage Assessment 
and Restoration Program (DARP) is announcing new indirect cost rates on 
the recovery of indirect costs for its component organizations involved 
in natural resource damage assessment and restoration activities for 
fiscal year (FY) 2002. The indirect cost rates for this fiscal year and 
dates of implementation are provided in this notice. More information 
on these rates and the DARP policy can be found at the DARP Web site 
at: www.darp.noaa.gov.

FOR FURTHER INFORMATION: For further information, contact Brian Julius 
at 301-713-3038, ext. 199, by fax at 301-713-4387, or e-mail at 
[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.), and support restoration of 
physical injuries to National Marine Sanctuary resources under the 
National Marine Sanctuaries Act (NMSA) (16 U.S.C. 1431 et seq.). The 
DARP consists of three component organizations: the Damage Assessment 
Center (DAC) within the National Ocean Service; the Restoration Center 
within the National Marine Fisheries Service; 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.
    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 
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 accounting firm Rubino 
& McGeehin, Chartered (R&M), to: Evaluate the cost accounting system 
and allocation practices; recommend the appropriate indirect cost 
allocation methodology; and determine the indirect cost rates for the 
three organizations that comprise the DARP. A Federal Register notice 
on R&M's effort, their assessment of the DARP's cost accounting system 
and practice, and their determination regarding the most appropriate 
indirect cost methodology and rates for FYs 1993 through 1999 was 
published on December 7, 2000 (65 FR 76611). The notice and report by 
R&M can also be found on the DARP Web site at: www.darp.noaa.gov.
    R&M continued its assessment of DARP's indirect cost rate system 
and structure for FYs 2000 and 2001. A second federal notice specifying 
the DARP indirect rates for FYs 2000 and 2001 was published on December 
2, 2002 (67 FR 71537).
    In October 2002, DARP hired the accounting firm of Cotton and 
Company LLP (Cotton) to review and certify DARP costs incurred on cases 
for purposes of cost recovery and to develop indirect rates for FY 2002 
and subsequent years. As in the prior years, Cotton concluded that the 
cost accounting system and allocation practices of the DARP component 
organizations are consistent with Federal accounting requirements. 
Consistent with R&M's previous analyses, Cotton also determined that 
the most appropriate indirect allocation method continues to be the 
Direct Labor Cost Base for all three DARP component organizations. The 
Direct Labor Cost Base is computed by allocating total

[[Page 57673]]

indirect cost over the sum of direct labor dollars plus the application 
of NOAA's leave surcharge and benefits rates to direct labor. Direct 
labor costs for contractors from the Oak Ridge Institute for Science 
and Education (ORISE) also were included in the direct labor base 
because Cotton determined that these costs have the same relationship 
to the indirect cost pool as NOAA direct labor costs. ORISE provides 
on-site support to DARP in the areas of injury assessment, natural 
resource economics, restoration planning and implementation, and policy 
analysis. Cotton's reports on the FY 2002 DARP indirect rates can also 
be found on the DARP Web site at: www.darp.noaa.gov.

The DARP's Indirect Cost Rates and Policies

    The DARP will apply the indirect cost rates for FY 2002 as 
recommended by Cotton for each of the DARP component organizations as 
provided in the following table:

------------------------------------------------------------------------
                                                              FY 2002
              DARP component  organization                 indirect rate
                                                           (in percent)
------------------------------------------------------------------------
Damage Assessment Center (DAC)..........................          254.17
Restoration Center (RC).................................          218.36
General Counsel for Natural Resources (GCNR)............          251.75
------------------------------------------------------------------------

    These rates are based on the Direct Labor Cost Base allocation 
methodology.
    The FY 2002 rates will be applied to all damage assessment and 
restoration case costs incurred between October 1, 2002, and September 
30, 2003. DARP will use the FY 2002 indirect cost rates for future 
fiscal years until subsequent year-specific rates can be developed.
    For cases that have settled and for cost claims paid prior to the 
effective date of the fiscal year in question, the DARP will not re-
open any resolved matters for the purpose of applying the revised rates 
in this policy for these fiscal years. For cases not settled and cost 
claims not paid prior to the effective date of the fiscal year in 
question, costs will be recalculated using the revised rates in this 
policy for these fiscal years. Where a responsible party has agreed to 
pay costs using previous year's indirect rates, but has not yet made 
the payment because the settlement documents are not finalized, the 
costs will not be recalculated.
    The DARP indirect cost rate policies and procedures published in 
the Federal Register on December 7, 2000 (65 FR 76611), and on December 
2, 2002 (67 FR 71537), remain in effect except as updated by this 
notice.

    Dated: September 29, 2003.
Jamison S. Hawkins,
Deputy Assistant Administrator for Ocean Services and Coastal Zone 
Management, National Ocean Service.
[FR Doc. 03-25237 Filed 10-3-03; 8:45 am]
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