CEMP-E/CECW-E
EI 01D010
1 September 1997
at the 30% design stage and beyond, in lieu of using a
10-6. Distribution of Overhead
flat percent-age overhead rate. Some of the checklist
items unique to HTRW projects includes the
The prime contractor's overhead costs, which
following:
have been costed in an organized format, should be
summed and distributed to the various bid items. A
b. Pollution liability insurance. HTRW con-
proportionate distribution is commonly made by
tractors must generally insure themselves against
percentage ratio of total direct costs to those direct
causing increased pollution as a result of their
costs in each item. When additive or split-bid items
construction activities. This requires that they
are included, only those overhead costs which relate
procure adequate protection in the form of pollution
directly to the additive work should be distributed to
liability insurance. However, on some HTRW jobs
those additive items. Those overhead costs which the
funded by Environmental Protection Agency (EPA),
contractor will incur regardless of additive or
pollution liability insurance coverage may not be
deductive items should be distributed to base bid
required if EPA indemnifies the contract. Indemni-
schedule items only. Selective distribution ensures
fication basically holds the contractor harmless
re-coupment of costs if only the basic contract scope
against liability resulting from release of a hazardous
is awarded. Regardless of the method of distribution,
substance as a result of the construction activities for
the estimates should clearly demonstrate the
a period of 10 years. If the contract is not
procedures and cost principles applied. For
modification estimates, overhead requirements should
must be included in the estimate (unless the
be itemized and costed to reflect the actual net change
premiums are reimbursed by EPA to the contractor)
in cost of overhead, that is, costs before and after the
to cover that portion of the project that may be subject
modification work. As a refinement to distribution,
to pollution liability. Rates for pollution liability
the cost engineer may reasonably and justifiably
insurance are generally on a sliding scale with
reduce the prime overhead distribution on subcontract
smaller insurance policies requiring a greater
work items. The balance of the total prime overhead
premium percentage. Table 10-1 serves as an
should then be distributed as discussed above to the
example of pollution liability premium costs:
remaining prime items of work.
10-7. Civil Works Program Specific
Table 10-1. Pollution liability insurance cost
Requirements
Contract Amount
Pollution Liability
For large cost civil works projects, the various tasks
Insurance Cost
for overhead should be developed for each project,
(% of Contract Amount)
rather than using flat overhead percentage rates. Flat
_________________
rates may be used during the preliminary studies, or
Up to
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,000,000
2.0%
when alternatives must be prepared if design is
limited or not available.
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,000,000 to ,000,000
1.2%
10-8. HTRW Program Specific
,000,000 to ,000,000
0.8%
Requirements
Over ,000,000
0.7%
a. A detailed checklist of overhead (general
Coverage amounts and rates periodically change and
requirements) costs for HTRW projects is located
should be verified by obtaining quotes from insurance
under the second level 33 22 of the HTRW RAWBS
companies.
document. Due to the importance of overhead costs
in a HTRW estimate, a detailed listing of overhead
c. Decontamination facilities. HTRW projects
should be developed for all remedial action estimates
generally require decontamination of personnel and
10-3
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