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Background Environmental cleanups have traditionally been conducted on a time and materials (T&M) basis, meaning that a contractor bills the client based upon hours worked and cost of materials used to complete the job. Because there are no performance standards or time limits, cleanups can go on longer than necessary and the best technologies are not utilized, therefore driving up the costs. A new methodology that incorporates performance standards and best available technologies is slowly coming into use and performing successfully in a few states. This method is called Pay-For-Performance (PFP). Set into motion by James Bearzi at the New Mexico Underground Storage Tank Bureau, a PFP cleanup agreement pays contractors a fixed price. As measurable environmental goals are attained, the contractor receives payment. By linking the contractor's payment to contamination reduction, public health and environmental objectives can be achieved in a financially prudent and efficient manner. PFP agreements can stimulate contractors to make better use of cutting-edge cleanup technology, trigger market competition that drives down cleanup prices, and reduce administrative costs for both contractors and state governments. PFP has proven itself to the states of Florida, South Carolina, and Oklahoma, which report that PFP contracting has resulted in faster and more effective underground storage tank cleanups. Other states using PFP in leaking underground storage tank programs include Vermont, New Hampshire, Rhode Island, Pennsylvania, West Virginia, Georgia, Utah, California, Nebraska, Mississippi, and Michigan. Conceptually, a PFP agreement can be used in any type of cleanup--removing contaminants from the water supply or cleaning up a brownfield or Superfund site. In September 2001, the NGA Center for Best Practices held a workshop in Chicago, IL to familiarize states with the PFP methodology and to give state officials a forum to discuss the applicability of PFP to brownfield cleanups. Presentations from the workshop can be accessed via the AGENDA. State Contacts: Arthur Shrader, Director
South Carolina Dept. of Health and Environmental Control
Bureau of Underground Storage Tank Management
Assessment and Corrective Action Division Brian Dougherty, Environmental Administrator
Florida Dept. of Environmental Protection Richard McKay, Supervisor
Special Projects, Programs, and Operations
Oklahoma Corporation Commission
Petroleum Storage Tank Division
Chuck Schwer, Section Chief
Vermont Dept. of Environmental Conservation
Waste Management Division Randy Taylor, Division of Environmental Response and Remediation
Utah Department of Environmental Quality
Leaking Underground Storage Tank (LUST) Division Federal Contact: Joseph Vescio
U.S. Environmental Protection Agency
Office of Underground Storage Tanks
Pay-for-Performance Program
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