ITEM: 4

SUBJECT: CONSIDERATION OF A PROPOSED RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO AMEND A SOLE SOURCE CONTRACT WITH SCIENTIFIC APPLICATIONS INTERNATIONAL CORPORATION (SAIC) TO COMPLETE THE ECONOMIC ANALYSES FOR THE POLICY FOR IMPLEMENTATION OF TOXICS STANDARDS FOR INLAND SURFACE WATERS, ENCLOSED BAYS, AND ESTUARIES OF CALIFORNIA, AND FOR THE CALIFORNIA OCEAN PLAN IN FISCAL YEAR (FY) 1998-99

DISCUSSION: Both the California Environmental Protection Agency (Cal/EPA) and the State Water Resources Control Board (SWRCB) have set a high priority on completing, as soon as possible, the Inland Surface Waters Plan and the Enclosed Bays and Estuaries Plan (ISWP/EBEP), and revisions to the California Ocean Plan.

Currently, the U.S. Environmental Protection Agency (U.S. EPA) is in the process of promulgating the California Toxics Rule (CTR), which will establish numeric water quality criteria for 126 toxic pollutants for California's rivers, lakes, enclosed bays, and estuaries. As part of their process, U.S. EPA is evaluating the costs, cost-effectiveness, and benefits of implementing the CTR in the State and has contracted with SAIC to do their economic analysis.

Simultaneously, the SWRCB is developing the proposed Policy for Implementation of Toxics Standards for Inland Surface Waters, Enclosed Bays, and Estuaries of California (Policy) which constitutes Phase 1 of the ISWP/EBEP. The Policy will establish an implementation program for the CTR criteria, as well as for existing National Toxics Rule criteria and priority pollutant objectives in basin plans which are not superseded by the CTR. The SWRCB is conducting an economic analysis for the Policy, which focuses on the incremental cost of implementing the CTR under the proposed Policy provisions compared with costs of implementing the CTR under existing Regional Water Quality Control Board (RWQCB) permitting practices (which is the case if the SWRCB does not adopt the Policy). The SWRCB contracted with U.S. EPA, Region 9 for this work; U.S. EPA, in turn, subcontracted the work to SAIC.

Subsequently, in FY 1997-98, the SWRCB entered into a sole source contract with SAIC in the amount of $74,800 to develop technical support documents to accompany the economic analysis for the Policy conducted under the U.S. EPA contract with SAIC, to prepare responses to public comments on drafts of the analysis, and to conduct an economic analysis of proposed amendments to the California Ocean Plan

Additional funds are needed for the economic analyses due to:

1. The level of effort needed to evaluate and respond to public comments;
2. The level of effort needed to survey RWQCBs and determine existing RWQCB permitting practices;
3. The need to run calculations to evaluate how alternative Policy provisions may affect facility permit limits and compliance costs ("sensitivity analyses");
4. The need to gather additional data to do adequate "sensitivity analyses" of costs of alternative Policy provisions;
5. U.S. EPA's decision to replace some, and add several more, sample facilities; and
6. The need to do any additional economic analyses that may be necessary to respond to public comments on the next draft of the proposed Policy and California Ocean Plan.

This contract amendment will allow SAIC to complete the economic analysis initiated in the Interagency Agreement with U.S. EPA and in the existing sole source contract with SAIC.

It is critical that SAIC completes the Policy work through continuation of the sole source contract because the analysis must be completed by the end of 1998; is interrelated with work SAIC has conducted to date; uses the same data, sample facilities, and costing assumptions/processes; and will, to a large degree, be completed simultaneously with the economic analyses being conducted for

U.S. EPA's CTR and for the SWRCB's Policy under the Interagency Agreement with U.S. EPA. It would not be possible to complete a Request for Proposal contracting process and complete the economics work for the next draft of the Policy by the end of 1998; nor would it be efficient or cost-effective to have two contractors working with the same data, having to agree on assumptions and formats, etc. Furthermore, some of the work that must be completed under this contract amendment involves responding to comments regarding SAIC's first draft economic analysis; clearly, SAIC is best able to draft answers to these questions.

Staff is requesting authorization to increase the sole source contract by $220,000. Completing the economic analysis for the next draft of the Policy, as well as to do additional work necessary to respond to comments on that draft, would require $185,000. The California Ocean Plan revisions would require $35,000. Given that the original sole source contract amount was $74,800, this amendment would increase the total amount of the sole source contract to $294,800.

POLICY ISSUE: Should the SWRCB adopt a proposed resolution authorizing the Executive Director or his designee to amend a multi-year sole source contract with SAIC to complete the economic analyses for the Policy for Implementation of Toxics Standards for Inland Surface Waters, Enclosed Bays, and Estuaries of California ($185,000), and for the California Ocean Plan ($35,000) for an amount not to exceed $220,000 from the General Fund in FY 1998-99?

FISCAL IMPACT: This FY 1998-99 contract amendment will not exceed the current year budget allocation amount of $220,000 from the General Fund.

RWQCB IMPACT: None.

STAFF RECOMMENDATION: That the SWRCB adopt a resolution authorizing the Executive Director or his designee to amend a sole source contract with SAIC to complete economic analyses for the Policy for Implementation of Toxics Standards for Inland Surface Waters, Enclosed Bays, and Estuaries of California ($185,000), and for the California Ocean Plan ($35,000) for an amount not to exceed $220,000 from the General Fund in FY 1998-99.

SEPTEMBER 28, 1998 DRAFT

WHEREAS:

1. The California Environmental Protection Agency (Cal/EPA) and the State Water Resources Control Board (SWRCB) have set a high priority on completing, as soon as possible, development of the Inland Surface Waters Plan (ISWP) and the Enclosed Bays and Estuaries Plan (EBEP), and revisions to the California Ocean Plan.

2. The U.S. Environmental Protection Agency (U.S. EPA) is currently in the process of promulgating the California Toxics Rule (CTR), which will establish numeric water quality criteria for 126 toxic pollutants for California's rivers, lakes, enclosed bays, and estuaries, and has contracted with SAIC to conduct the economic analysis for the CTR.

3. Simultaneously, the SWRCB is developing the proposed Policy for Implementation of Toxics Standards for Inland Surface Waters, Enclosed Bays, and Estuaries of California (Policy), which constitutes Phase 1 of the ISWP and EBEP, and has contracted with U.S. EPA, Region 9, who, in turn, subcontracted with SAIC, to conduct the economic analysis for the Policy.

4. The SWRCB currently has a sole source contract with SAIC to develop technical documents to accompany the economic analysis for the Policy, prepare responses to public comments on drafts of the Policy analysis, and conduct an economic analysis of California Ocean Plan amendments.

5. The SWRCB cannot complete the work through existing contracts due to: (a) the level of effort needed to evaluate and respond to public comments; (b) the level of effort needed to survey the Regional Water Quality Control Boards (RWQCB) and determine existing RWQCB permitting practices; (c) the need to run calculations to evaluate how alternative Policy provisions may affect facility permit limits and compliance costs ("sensitivity analyses"); (d) the need to gather additional data to do adequate "sensitivity analyses" of costs of alternative Policy provisions; (e) U.S. EPA's decision to replace some, and add several more, sample facilities; and (f) the need to do any additional economic analyses that may be necessary to respond to public comments on the next draft of the Policy, and the California Ocean Plan.

6. It is critical that SAIC complete the Policy work through continuation of the sole source contract because the analysis must be completed by the end of 1998; is interrelated with work SAIC has conducted to date; uses the same data, sample facilities, and costing assumptions/processes; and will, to a large degree, be completed simultaneously with the economic analysis being conducted for the U.S. EPA's CTR and for the SWRCB's Policy under the Interagency Agreement with U.S. EPA.

7. SAIC has qualified personnel, facilities, and experience to conduct the economic analyses.

THEREFORE BE IT RESOLVED THAT:

The SWRCB authorizes the Executive Director, or his designee, to amend a sole source contract with SAIC to complete economic analyses for the Policy for Implementation of Toxics Standards for Inland Surface Waters, Enclosed Bays, and Estuaries of California ($185,000), and for the California Ocean Plan ($35,000) for an amount not to exceed $220,000 from the General Fund in FY 1998-99.

The undersigned, Administrative Assistant to the Board, does hereby certify that the foregoing is a full, true, and correct copy of a resolution duly and regularly adopted at a meeting of the State Water Resources Control Board held on October 22, 1998.

Maureen Marché

Administrative Assistant to the Board