[Federal Register Volume 71, Number 50 (Wednesday, March 15, 2006)]
[Notices]
[Pages 13356-13357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2477]


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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 2004

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

ACTION: Notice of indirect cost rates for the Damage Assessment and 
Restoration Program for Fiscal Year 2004.

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SUMMARY: The National Oceanic and Atmospheric Administration's (NOAA's) 
Damage 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) 2004. 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 http://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. 96012 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. During FY 2005, the DARP expanded to include 
a fourth component organization, the Coastal Protection and Restoration 
Division (CPRD) within the National Ocean Service. With this addition, 
DARP changed its name to the Damage Assessment, Remediation, and 
Restoration Program (DARRP). Since this notice announces the indirect 
cost rates for FY 2004, which is prior to DARP's expansion, the acronym 
``DARP'' will be used throughout.
    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 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 us 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) and I.M. Systems Group (IMSG) 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 and IMSG provide 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

[[Page 13357]]

57672), and a fourth notice fore the FY 2003 indirect cost rates 
appeared on May 20, 2005 (70 FR 29280). Cotton's reports on these 
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 
2004 indirect cost rates.

The DARP's Indirect Cost Rates and Policies

    The DARP will apply the indirect cost rates fro FY 2004 as 
recommended by Cotton for each of the DARP component organizations as 
provided in the following table:

------------------------------------------------------------------------
                                                              FY 2004
              DARP component  organization                 indirect rate
                                                             (percent)
------------------------------------------------------------------------
Damage Assessment Center (DAC)..........................          213.03
Restoration Center (RC).................................          181.46
General Counsel for Natural Resources (GCNR)............          165.39
------------------------------------------------------------------------

These rates are based on the Direct Labor Cost Base allocation 
methodology.
    The FY 2004 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 2004 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 polices and procedures published in the 
Federal Register on December 7, 2000 (65 FR 76611), on December 2, 2002 
(67 FR 71537), October 6, 2003 (68 FR 57672), and May 20, 2005 (70 FR 
29280) remain in effect except as updated by this notice.

    Dated: March 9, 2006.
David M. Kennedy,
Director, Office of Response and Restoration, National Ocean Service, 
National Oceanic and Atmospheric Administration.
[FR Doc. 06-2477 Filed 3-14-06; 8:45 am]
BILLING CODE 3510-JE-M