[Federal Register Volume 81, Number 162 (Monday, August 22, 2016)]
[Notices]
[Pages 56580-56582]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19953]


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DEPARTMENT OF COMMERCE


Indirect Cost Rates for the Damage Assessment, Remediation, and 
Restoration Program for Fiscal Year 2015

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

ACTION: Notice.

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[[Page 56581]]

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) 2015. The 
indirect cost rates for this fiscal year and date 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 
LaTonya Burgess at 301-713-4248, ext. 211, by fax at 301-713-4389, or 
email 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.) and the Oil Pollution 
Act of 1990 (OPA) (33 U.S.C. 2701 et seq.), and to 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 Natural Resources Section (GCNRS). 
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.
    Consistent with federal accounting requirements, the DARRP is 
required to 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 the DARRP 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).
    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 ERT, Inc. (ERT), 
Freestone Environmental Services, Inc. (Freestone), and Genwest 
Systems, Inc. (Genwest) 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. ERT, Freestone, and 
Genwest provided on-site support to the DARRP in the areas of injury 
assessment, natural resource economics, restoration planning and 
implementation, and policy analysis. Subsequent federal notices have 
been published in the Federal Register as follows:

 FY 2002, published on October 6, 2003 (68 FR 57672)
 FY 2003, published on May 20, 2005 (70 FR 29280)
 FY 2004, published on March 16, 2006 (71 FR 13356)
 FY 2005, published on February 9, 2007 (72 FR 6221)
 FY 2006, published on June 3, 2008 (73 FR 31679)
 FY 2007 and FY 2008, published on November 16, 2009 (74 FR 
58948)
 FY 2009 and FY 2010, published on October 20, 2011 (76 FR 
65182)
 FY 2011, published on September 17, 2012 (77 FR 57074)
 FY 2012, published on August 29, 2013 (78 FR 53425)
 FY 2013, published on October 14, 2014 (79 FR 61617)
 FY 2014, published on December 17, 2015 (80 FR 78718)
Cotton's recent reports on these indirect rates can be found on the 
DARRP Web site at 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 
2015 indirect cost rates.

The DARRP's Indirect Cost Rates and Policies

    The DARRP will apply the indirect cost rates for FY 2015 as 
recommended by Cotton for each of the DARRP component organizations as 
provided in the following table:

------------------------------------------------------------------------
                                                              FY 2015
              DARRP Component  organization                Indirect rate
                                                                 %
------------------------------------------------------------------------
Office of Response and Restoration (ORR)................          151.18
Restoration Center (RC).................................           60.91
General Counsel, Natural Resources Section (GCNRS)......           32.75
------------------------------------------------------------------------

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

    The FY 2015 rates will be applied to all damage assessment and 
restoration case costs incurred between October 1, 2014 and September 
30, 2015. DARRP will use the FY 2015 indirect cost rates for future 
fiscal years, beginning with FY 2016, 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.


[[Page 56582]]


    Dated: August 5, 2016.
David Westerholm,
Director, Office of Response and Restoration.
[FR Doc. 2016-19953 Filed 8-19-16; 8:45 am]
 BILLING CODE 3510-JE-P