[Federal Register Volume 70, Number 97 (Friday, May 20, 2005)]
[Notices]
[Pages 29280-29281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10162]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration


Damage Assessment and Restoration Program; Indirect Cost Rates 
(2003 FY)

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

ACTION: Notice of Indirect Cost Rates for the Damage Assessment and 
Restoration Program for Fiscal Year 2003.

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SUMMARY: The National Oceanic and Atmospheric 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) 2003. 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 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

[[Page 29281]]

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: http://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 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 
the DARP in the areas of injury assessment, natural resource economics, 
restoration planning and implementation, and policy analysis. A third 
federal notice specifying the DARP indirect rates for FY 2002 was 
published on October 6, 2003 (68 FR 57672). Cotton's reports on the FY 
2002 DARP indirect rates can also be found on the DARP Web site at: 
http://www.darp.noaa.gov.
    Cotton reaffirmed that the Direct Labor Cost Base is the most 
appropriate indirect allocation method for the development of the FY 
2003 indirect cost rates.

The DARP's Indirect Cost Rates and Policies

    The DARP will apply the indirect cost rates for FY 2003 as 
recommended by Cotton for each of the DARP component organizations as 
provided in the following table:

------------------------------------------------------------------------
                                                                FY 2003
                                                                indirect
                 DARP component organization                      rate
                                                               (percent)
------------------------------------------------------------------------
Damage Assessment Center (DAC)...............................     261.96
Restoration Center (RC)......................................     223.74
General Counsel for Natural Resources (GCNR).................     206.47
------------------------------------------------------------------------

These rates are based on the Direct Labor Cost Base allocation 
methodology.

    The FY 2003 rates will be applied to all damage assessment and 
restoration case costs incurred between October 1, 2003 and September 
30, 2004. DARP will use the FY 2003 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), on December 2, 
2002 (67 FR 71537), and October 6, 2003 (68 FR 57672) remain in effect 
except as updated by this notice.

    Dated: May 16, 2005.
Mitchell Luxenberg,
Acting Director, Management and Budget, National Ocean Service, 
National Oceanic and Atmospheric Administration.
[FR Doc. 05-10162 Filed 5-19-05; 8:45 am]
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