[Federal Register Volume 72, Number 27 (Friday, February 9, 2007)]
[Notices]
[Pages 6221-6222]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-2203]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration


Notice of Indirect Cost Rates for the Damage Assessment, 
Remediation, and Restoration Program for Fiscal Year 2005.

SUMMARY: The National Oceanic and Atmospheric Administration's (NOAA's) 
Damage Assessment, Remediation, and Restoration Program (DARRP) 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) 2005. The 
indirect cost rates for this fiscal year and dates of implementation 
are provided in this notice. More information on these rates and the 
DARRP policy can be found at the DARRP Web site at www.darrp.noaa.gov.

FOR FURTHER INFORMATION CONTACT: For further information, contact Brian 
Julius at 301-713-4248, ext. 199, by fax at 301-713-4389, or e-mail at 
[email protected].

SUPPLEMENTARY INFORMATION: The mission of the DARRP 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 
DARRP consists of three component organizations: the Office of Response 
and Restoration (ORR) 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 
DARRP 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 ORR 
underwent a reorganization and the former Damage Assessment and 
Restoration Program was renamed DARRP. Previous notices reported 
indirect rates for the Damage Assessment Center (DAC), which was a 
division of ORR prior to the reorganization. This notice reports an 
indirect rate for the larger ORR.
    Consistent with Federal accounting requirements, the DARRP is 
required to

[[Page 6222]]

account for and report the full costs of its programs and activities. 
Further, the DARRP 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 DARRP 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 DARRP's Indirect Cost Effort

    In December 1998, the DARRP 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 DARRP. A Federal Register notice 
on R&M's effort, their assessment of the DARRP'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 DARRP Web site at http://www.darrp.noaa.gov.
    R&M continued its assessment of DARRP's indirect cost rate system 
and structure for FYs 2000 and 2001. A second federal notice specifying 
the DARRP indirect rates for FYs 2000 and 2001 was published on 
December 2, 2002 (67 FR 71537).
    In October 2002, DARRP hired the accounting firm of Cotton and 
Company LLP (Cotton) to review and certify DARRP 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 DARRP 
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 DARRP 
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) 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 provided on-site 
support to the DARRP in the areas of injury assessment, natural 
resource economics, restoration planning and implementation, and policy 
analysis. IMSG continues to provide on-site support to the DARRP. A 
third federal notice specifying the DARRP indirect rates for FY 2002 
was published on October 6, 2003 (68 FR 57672), a fourth notice for the 
FY 2003 indirect cost rates appeared on May 20, 2005 (70 FR 29280), and 
a fifth notice for the FY 2004 indirect cost rates was published on 
March 16, 2006 (71 FR 13356). Cotton's reports on these indirect rates 
can also be found on the DARRP Web site at http://www.darrp.noaa.gov.
    Cotton reaffirmed that the Direct Labor Cost Base is the most 
appropriate indirect allocation method for the development of the FY 
2005 indirect cost rates.

The DARRP's Indirect Cost Rates and Policies

    The DARRP will apply the indirect cost rates for FY 2005 as 
recommended by Cotton for each of the DARRP component organizations as 
provided in the following table:

------------------------------------------------------------------------
                                                              FY 2005
              DARRP component  organization                indirect rate
                                                             (percent)
------------------------------------------------------------------------
Office of Response and Restoration (ORR)................          180.42
Restoration Center (RC).................................          166.70
General Counsel for Natural Resources (GCNR)............          169.59
------------------------------------------------------------------------

    These rates are based on the Direct Labor Cost Base allocation 
methodology.
    The FY 2005 rates will be applied to all damage assessment and 
restoration case costs incurred between October 1, 2005 and September 
30, 2006. DARRP will use the FY 2005 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 DARRP 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 DARRP 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), October 6, 2003 (68 FR 57672), May 20, 2005 (70 FR 
29280), and March 16, 2006(71 FR 13356) remain in effect except as 
updated by this notice.

    Dated: February 5, 2007.
Captain Ken Barton,
Director, Office of Response and Restoration, National Ocean Service, 
National Oceanic and Atmospheric Administration.
[FR Doc. E7-2203 Filed 2-8-07; 8:45 am]
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