PayForPerformance in Oklahoma The Oklahoma Experience Presented by
Pay-For-Performance in Oklahoma The Oklahoma Experience Presented by: Richard Mc. Kay Petroleum Storage Tank Division
Do you have a stalled cleanup ?
We realized we had many…. and here’s how!
Conducted $100, 000 Case Reviews n n The Football Field analogy. Paying out money with little or no environmental results. Reviewed our accountability. We looked at Pay. For-Performance.
ACCOUNTABILITY As a Regulatory Agency we have a fiduciary responsibility: n To safeguard public health, safety & the environment. n To safeguard public money.
Why We Chose Pay-For-Performance n n n Needed a way to guarantee environmental results and move away from time & materials projects. Wanted a method to impose cost control so total costs would not exceed the $1. MM cap per site. Wanted a way to reduce disallowances. Wanted a way to focus on results. . . not paperwork. Wanted a way to shorten time to pay claims. Needed way to better relations between the tank owner, consultant and regulatory/fund.
We Began to Sign P-F-P Contracts n We took a voluntary approach beginning in 1996 with Consultants willing to take a risk and willing to guarantee environmental results. – Committed to 3 year contracts with a 2 warranty. – Payments are made based on attaining milestone contamination reductions. n Tank Owners supported P-F-P because: – Site restoration money was encumbered. – They wanted Consultants who were willing to take a risk and guarantee their work.
Results of P-F-P: Win-Win n Our difficult sites are being cleaned because: – – n Better designed RA systems are being installed. Consultants are guaranteeing results. Site costs are coming down because: – Emphasis is on closing the site to make money rather than keeping site open to make money. n n n Attained cost control by using Tank RACER 99 to negotiate a fixed price to remediate a site. Site remediation costs are encumbered. Funds are paid only when milestones are achieved.
P-F-P Program Results (cont’d) n n n n Consultant disallowances reduced to almost zero. Tank owners do not have disallowances. Paperwork has been substantially reduced. Time to pay has reduced to a few days. Achieved collaboration between all parties. The Consultant can make a reasonable profit and take pride in a job well done. The Tank Owner is happy - He knows the cost and when he can get back to work.
Other Results … Not Counted On Pre-approval process became mandatory. n UST Advisory Council composed of Consultants n n and Tank Owners adopted: – Unit Costs for all work through site delineation. – Tank RACER 99 to price site remediation. Pre-approvals requested faster than money comes in. Hold cooperative Consultant/State training sessions. Technical staff has more time to visit sites and track site remediation progress.
How does the P-F-P process work? n n n n n Set clean-up levels based on Tier I or Tier II report. Submit Remediation Technology Report. Submit final Remedial Action Plan. Submit Pay- For-Performance proposal. Look at clean-up cost in $ / yd 3. Compare to similar sized systems & technology. Run Tank RACER 99 to determine reasonable cost. Negotiate the final set contract price and terms. Sign the Pay-For-Performance contract.
P-F-P Process Cont’d. n n Next. . . the Consultant installs the RA system. Baseline groundwater samples are collected from pre -selected “Key Monitoring Wells” 2 weeks prior to system start-up. Payments are made to the Consultant when decreases in groundwater contamination called “Milestones” are achieved. Once all Milestones are achieved and contamination levels remains below “clean-up levels” for 6 months in all site wells the final payment is made.
Progress & Results
AS / SVE System Progress
Potential Financial Savings
Summary of Why We Chose Pay-For-Performance ACCOUNTABILITY HAS BEEN ESTABLISHED. n ENVIRONMENTAL RESULTS ARE GUARANTEED AND ARE BEING ACHIEVED. n REMEDIATION COSTS ARE REASONABLE. n TANK OWNERS ARE WANTING IT. n THANK YOU
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