Re: [CPEO-BIF] EPA's Inspector General reviews AllAppropriate Inquiries reports

[Robert Elliott <RElliott@dtsc.ca.gov>]

Ben,

I think you do have the answer.  EDUCATION, EDUCATION, EDUCATION!

Doing a Phase I is like buying insurance.  If you want a low premium
cost then you have to realize the deductible will be a lot higher. 
People should be told if they want to save money up front, they should
understand that it could cost you a lot later when it is too late to
revisit your decision about getting a cheap Phase I.  Even minor
remediation projects cost tens and even hundreds of thousands of dollars
today (and then there's groundwater sites that I won't try to estimate).
 Of course, there is always risk, but to pinch pennies in the due
diligence stage, where you have no liability yet, is not what I would
recommend to any client.  That's my personal opinion as a regulatory
attorney and in no way do I speak for my department or the State of
California.

Thanks,
Bob

>>> Ben Neal <bennealsemail@gmail.com> 2/16/2011 9:46 AM >>>
Larry - "the industry" is hardly a monolith. As in pretty much any
human
commercial endeavor, in the consulting world there are those who seek
to
gain business
by cutting cost and quality as a strategy for increasing their revenue;
at
least in the short term. The legal profession, I'm quite confident, is
not
immune.

I can assure you that there are many firms in the environmental
consulting
industry who do Phase I work only reluctantly, and only for carefully
selected clients;
if they do it at all.  Not just because it's a low-margin service, but
because the risk is so profoundly inconsistent with any reward.  And
--
because of the presence
of low-margin low-quality consultants -- the price expectations of
many
clients and their legal counsel are poorly calibrated.

Rather than pointing fingers, perhaps we should brainstorm solutions.
One
solution is education.  If you expect to pay $3,000 or $5,000 for a
Phase I
study, you should know that you have a high probability of getting a
very
poor quality product.  Wouldn't it be nice if clients knew that?  It
would
also be nice if the attorneys, who inevitably are involved in these
kinds of
transactions, advised their clients of that.  Some do.  I know a few. 
I
value them like gold.

I don't know what to do about the fly-by-night low-cost commodity Phase
I
consultant shops.  Maybe if there were fewer clients willing to buy a
$5,000
Phase I there would be fewer consultants offering it.  I think we all
have a
role in educating clients. How best to do that? I'm open for
suggestions.

Another solution might be to tighten the requirements of who is allowed
to
do Phase I work, with real consequences for those who fail to meet
expectations. I don't agree with Lenny's suggestion that Phase I
reports
should routinely be disclosed to government regulators.  Many Phase I
projects are done for tentative reasons: speculation or anticipatory
due
diligence. In my opinion, those should be able to remain confidential.

It's a tough question.  How do we counteract the price pressure on a
service
the market considers to be a commodity, when in reality with each
incremental decrease in fee, the risk to the buyer increases?

I don't have the answers.  But I know the source of the problem is not
solely an industry that "does all it can to commoditize their work."
The
reality is more complex than that.

Ben Neal

------------------------------
>
> ------------------------------------------
> Re: [CPEO-BIF] EPA's Inspector General reviews
AllAppropriateInquiries
> reports
> brownfields-bounces@lists.cpeo.org <mailto:
> brownfields-bounces@lists.cpeo.org>
[brownfields-bounces@lists.cpeo.org<mailto:
> brownfields-bounces@lists.cpeo.org>] on behalf of Larry Schnapf [
> larry@schnapflaw.com <mailto:larry@schnapflaw.com>]
> Sent:   Tuesday, February 15, 2011 5:49 PM
> To:
> 'R CHAPIN' [rwc27q@verizon.net] <
>
https://legacy.ch2m.com/owa/?ae=Item&t=IPM.Note&a=New&to=rwc27q%40verizon.net&nm=%27R+CHAPIN%27>;
> 'Jerry Kubal' [jerry@kubalassoc.com] <
>
https://legacy.ch2m.com/owa/?ae=Item&t=IPM.Note&a=New&to=jerry%40kubalassoc.com&nm=%27Jerry+Kubal%27

> >
> Cc:
> 'Brownfields Internet Forum' [brownfields@lists.cpeo.org] <
>
https://legacy.ch2m.com/owa/?ae=Item&t=IPM.Note&a=New&to=brownfields%40lists.cpeo.org&nm=%27Brownfields+Internet+Forum%27

> >
> Attachments:
> ATT00001.txtâ (224 Bâ) <
>
https://legacy.ch2m.com/owa/attachment.ashx?attach=1&id=RgAAAACl2eHLflTREZ7oAIBf1MitBwBx4o3TQErREZ7lAIBf1MitAAAABdxGAADiYAlsyYsEQrntj1VTAh9LAANrlN9qAAAJ&attid0=EAD5yEvY5t3mSagCOCOi%2bvvm&attcnt=1

> >
>
>
> We cant really blame clients without sophisticated environmental
knowledge
>  being unable to discern the value of well-prepared reports when the
> industry does all it can to commoditize their work
>
>
> Lawrence Schnapf
>
> Schnapf Law Office
>
> 55 East 87th Street #8B
>
> New York, New York 10128
>
> 212-756-2205 (p)
>
> 212-646-8483 (c)
>
> Larry@SchnapfLaw.com <
>
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> >
>
> www.SchnapfLaw.com <http://www.schnapflaw.com/> <
>
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> >
>
>
> Named to Chambers USA 2009-10 Client Guide of Americaâs Leading
Lawyers for
> Business.
>
> AV Preeminent Rating from Martindale-Hubbell
>
>
> Listed in 2010 New York Super Lawyers-Metro Edition
>
>
> Blog: Visit Schnapf Judgment on the commonground community at
> http://commonground.edrnet.com/resources/9d51c3f88e/summary <
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>
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> >
>
>
------------------------------------------------------------------------
>
>
> From: R CHAPIN [mailto:rwc27q@verizon.net
<mailto:rwc27q@verizon.net>]
> Sent: Tuesday, February 15, 2011 4:47 PM
> To: Jerry Kubal; larry@schnapflaw.com <mailto:larry@schnapflaw.com>
> Cc: Brownfields Internet Forum
> Subject: Re: [CPEO-BIF] EPA's Inspector General reviews
> AllAppropriateInquiries reports
>
>
> I strongly agree with Jerry.  When the client selects low bid they
> typically what they paid for.
>
> ________________________________________________
> Richard W. Chapin, M.S., P.E., BCEE
> President, Chapin Engineering
> 27 Quincy Road, Basking Ridge, NJ 07920
> 908-647-8407 908 625 5697 (cell) 908-647-6959 (fax)
>
>
>
>
> ----- Original Message -----
>
>    From: Jerry Kubal
>    <
>
https://legacy.ch2m.com/owa/redir.aspx?C=d8d51f5696e141e2b0bb462801bc9b3c&URL=mailto%3ajerry%40kubalassoc.com

> >
>
>
>    To: larry@schnapflaw.com 
>    <
>
https://legacy.ch2m.com/owa/redir.aspx?C=d8d51f5696e141e2b0bb462801bc9b3c&URL=mailto%3alarry%40schnapflaw.com

> >
>
>
>    Cc: Brownfields Internet Forum
>    <
>
https://legacy.ch2m.com/owa/redir.aspx?C=d8d51f5696e141e2b0bb462801bc9b3c&URL=mailto%3abrownfields%40lists.cpeo.org

> >
>
>
>    Sent: Tuesday, February 15, 2011 4:24 PM
>
>    Subject: Re: [CPEO-BIF] EPA's Inspector General reviews All
>    AppropriateInquiries reports
>
>
>    These have become a commodity and are priced accordingly. Phase I
>    reports cannot be done properly for the amount of money paid to
>    conduct them. Expenses eat up more than half the cost and that
only
>    leaves time for junior, lower billiability rate staff to spend
any
>    time on interpretation.  These things are the equivalent of a
loss
>    leader. When you have junior staff do the work and a P.G. takes
15
>    minutes to review and sign them, there is a tendency to turn
these
>    into marketing reports by finding something that will result in a
>    Phase II follow-on so some of the actual cost incurred can be
>    recovered.
>
>
>    We won't do these types of investigations unless they're for an
>    existing client that understands what it takes to do one properly
>    and is willing to pay accordingly. Unfortunately, the big
consumer
>    of these reports is typically a financial institution that will
pick
>    the low bidder and then require ridiculous amounts of
professional
>    liability insurance to cover their rear ends because they know a
>    certain number of these are going to be substandard.
>
>
>    Same sorry state of affairs in the UST business. If you think
AAI's
>    are bad, pick up and read a typical UST report some day. That
will
>    really scare you.
>
>
>    I get tired of hearing all the complaints about the shoddy work
of
>    consultants when in most cases it's the end user that drives the
>    quality of the work product. When it's all said and done, you
>    typically get what you pay for. Professional services and work
>    products aren't exempt from this. General Electric's policy to
>    reverse auction professional services is probably one of the most
>    degrading experiences you can ever be subjected to as a
consultant.
>    And, over and over, they're getting exactly what they don't pay
for.
>
>
>    Jerry E. Kubal, P.G.
>
>    Kubal & Associates, Inc.
>
>    P.O. Box 273210
>
>    Tampa, FL  33688-3210
>
>    813-265-2338 (Office)
>
>    813-503-6493 (Cell)
>
>
>
>
>
>
>    On Feb 15, 2011, at 3:33 PM, larry@schnapflaw.com 
>    <
>
https://legacy.ch2m.com/owa/redir.aspx?C=d8d51f5696e141e2b0bb462801bc9b3c&URL=mailto%3alarry%40schnapflaw.com

> >
>    wrote:
>
>
>
>    I could speak hours on the volume of crappy and substandard phase
1
>    reports that are produced each year by so-called "commodity
shops".
>    They typically miss historical contamination and prior uses,
nearby
>    plumes that may be impacting a site, vapor intrusion, old tanks.
>    existence of prior bombing ranges- the list goes on.
>
>
>    The problem was always there but EPA's AAI facilitated this mess
by
>    diluting the definition of EP. We should have mandatory state
>    licensing for EPs who could then lose their licenses if they
>    continue to crank out (some would say spit out) these terrible
phase
>    1 reports.
>
>
>    Larry
>    Schnapf Law Offices     55 East 87th Street, Ste. 8B
>    New York, NY 10128
>    212-756-2205 (p)     646-468-8483 (c)
>    Larry@SchnapfLaw.com 
>    <
>
https://legacy.ch2m.com/owa/redir.aspx?C=d8d51f5696e141e2b0bb462801bc9b3c&URL=mailto%3aLarry%40SchnapfLaw.com

> >
>
>    http://www.SchnapfLaw.com/ <http://www.schnapflaw.com/>
>    <
>
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> >
>
>    Named to Chambers USA 2009-10 Client Guide of America?s Leading
>    Lawyers for Business.
>
>    AVÂ Preeminent Rating from Martindale-Hubbell
>
>    Listed in 2010 New York Super Lawyers-Metro Edition
>
>
>        -----Original Message-----
>        From: Trilling, Barry [mailto:BTrilling@wiggin.com 
>        <mailto:BTrilling@wiggin.com>]
>        Sent: Tuesday, February 15, 2011 02:50 PM
>        To: lsiegel@cpeo.org 
>        <
>
https://legacy.ch2m.com/owa/redir.aspx?C=d8d51f5696e141e2b0bb462801bc9b3c&URL=mailto%3alsiegel%40cpeo.org

> >,
>        'Brownfields Internet Forum'
>        Subject: Re: [CPEO-BIF] EPA's Inspector General reviews All
>        Appropriate Inquiries reports
>
>        Having seen this curse spread in both the public and private
>        sectors, I favor the enactment of legislation or promulgation
of
>        regulation that will give EPA and state agencies the
authority
>        to issue monetary sanctions and/or lift the license to
practice
>        of so-called environmental professionals who certify
compliance
>        with the regulatory standard when it is far from the truth to
do
>        so. Corporate officials who certify statements submitted to
EPA
>        are subject to criminal penalties; these folks who louse up
the
>        process for everyone else and endanger human health and the
>        environment by doing so should also be subject to punishment.
>        Barry J. Trilling  W I G G I N  A N D  D A N A -----Original
>        Message----- From: brownfields-bounces@lists.cpeo.org 
>        <
>
https://legacy.ch2m.com/owa/redir.aspx?C=d8d51f5696e141e2b0bb462801bc9b3c&URL=mailto%3abrownfields-bounces%40lists.cpeo.org

> >
>        [mailto:brownfields-bounces@lists.cpeo.org 
>        <mailto:brownfields-bounces@lists.cpeo.org>] On Behalf Of
Lenny
>        Siegel Sent: Tuesday, February 15, 2011 2:24 PM To:
Brownfields
>        Internet Forum Subject: [CPEO-BIF] EPA's Inspector General
>        reviews All Appropriate Inquiries reports [This new reports
>        finds that EPA does not normally review All Appropriate
>        Inquiries reports submitted by Brownfields Assessment
grantees,
>        and that those reports often do not meet the legal
requirements
>        under the AAI rule. What can and should be done to improve
the
>        quality of those reports? What can and should be done to
ensure
>        that AAI reports prepared for other purposes meet the legal
>        requirements? Does anyone have evidence of serious
on-the-ground
>        consequences of poor AAI documentation?- LS] EPA Must
Implement
>        Controls to Ensure Proper Investigations Are Conducted at
>        Brownfields Sites U.S. EPA Office of Inspector General Report
>        No. 11-P-0107 February 14, 2011 At a Glance What We Found EPA
>        does not review AAI [All Appropriate Inquiries] reports
>        submitted by grantees to assure that they comply with federal
>        requirements. Rather, EPA has relied on the environmental
>        professional conducting the AAI to self-certify that
>        requirements are met. Of the 35 AAI reports we reviewed, from
>        three EPA regions, none contained all the required
documentation
>        elements. This occurred because the Agency does not have
>        management controls requiring EPA project officers to conduct
>        oversight of AAI reports. Management controls regarding EPA
>        oversight of Brownfields grants funded by the American
Recovery
>        and Reinvestment Act of 2009 (ARRA) are also missing. EPA has
>        issued specific guidance and management controls for ARRA
grant
>        activities. However, the guidance and controls do not address
>        oversight of AAI reports. Because of EPA's lack of oversight
and
>        reliance on environmental professionals' self-certifications,
>        AAI investigations not meeting federal requirements may go
>        undetected by Agency staff. The Office of Inspector General
>        found instances of noncompliance that were not detected by
>        Agency staff. Improper AAI investigations introduce risk that
>        the environmental conditions of a property have not been
>        properly or adequately assessed, which may lead to improper
>        decisions about appropriate uses of brownfields properties.
>        Ultimately, threats to human health and the environment could
go
>        unrecognized. Noncompliant AAI investigations may result in
>        future grant denials and possible government reimbursement.
The
>        AAI reports the OIG reviewed were generated from $2.14
million
>        in grant awards. If conditions merit, EPA is authorized to
take
>        back funds from noncompliant grantees. The OIG questions the
>        value of the reports we reviewed. What We Recommend We
recommend
>        that EPA establish accountability for compliant AAI reports,
to
>        include those conducted under ARRA Brownfields grants; develop
a
>        plan to review AAI reports to determine the reports'
compliance
>        with AAI documentation requirements; and establish criteria
to
>        determine whether noncompliant grantees should return federal
>        grant money. The Agency did not clearly agree or disagree
with
>        OIG recommendations. In its final response to the report, the
>        Agency needs to agree or disagree with recommendations and,
as
>        appropriate, provide a corrective action plan to address the
>        recommendations. To download the full 19-page 140 KB report,
go
>        to http://www.epa.gov/oig/reports/2011/20110214-11-P-0107.pdf

>        <
>
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> >
>        -- Lenny Siegel Executive Director, Center for Public
>        Environmental Oversight a project of the Pacific Studies
Center
>        278-A Hope St., Mountain View, CA 94041 Voice: 650/961-8918
or
>        650/969-1545 Fax: 650/961-8918 http://www.cpeo.org 
>        <
>
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>        _______________________________________________ Brownfields
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-- 


Lenny Siegel
Executive Director, Center for Public Environmental Oversight
a project of the Pacific Studies Center
278-A Hope St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/961-8918
<lsiegel@cpeo.org>
http://www.cpeo.org

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