With the affirmative cost recovery (ACR) program, the Environmental Law Division can assist installations in recovering funds spent on environmental cleanup. The Army is involved in the cleanup of numerous past or presently-owned military facilities, representing billions of dollars in expended and projected cleanup costs. The mission of the ACR program is to recover cleanup costs from contractors or other responsible entities for contamination on Army property, and to avoid expending funds to cleanup contamination caused by a third-party.
In 1998, the Department of Defense (DoD) issued policy guidance concerning cost-recovery and cost-sharing activities at DoD environmental cleanup sites.1 This guidance requires DoD components to identify all opportunities for the potential recovery or sharing of costs associated with environmental restoration from other potentially responsible parties (PRPs), such as contractors or adjacent landowners. All potential ACR claims must be pursued “if such activity appears to be potentially cost-effective.”2 The Army directly benefits from cost recovery actions because amounts recovered by the ACR Program are credited to the Army’s Environmental Restoration Account (ERA), rather than the Department of Treasury’s general account fund; this provides a distinct advantage to the Army, since ERA exists solely to fund environmental remediation.
The primary method for recovery is through the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. §§ 9601 et seq. The CERCLA was created to fund the cleanup of hazardous waste sites while providing for both the recovery of damages for injury to natural resources as well as the reimbursement to the parties undertaking the cleanup of contamination. In some instances, cost recovery claims cannot be pursued under CERCLA because the statute of limitations has lapsed or the statute does not cover the hazardous contamination, e.g. petroleum discharge. In those instances, the Army may still be able to pursue a cost recovery claim under an applicable state environmental program or through contract dispute resolution. Comprehensive Environmental Response, Compensation, and Liability Act settlements and contract compromise settlements are often pursued as a precursor to any litigation. However, because PRPs frequently deny liability, litigation is a necessary option to pursue cost recovery for clean-up responses.
An aggressive ACR program is more important than ever, given the complex uncertainty of fiscal constraints facing the Army. For the Army’s ACR program to be fully successful, it must identify and investigate all opportunities for potential cost recovery from third parties. TAL
1. U.S. Dep’t of Def., Under Secretary of Defense for Acquisition, Technology, and Logistics Memorandum, “Policy Covering Cost Recovery/Cost Sharing Under the Defense Environmental Restoration Program (DERP),” (27 Feb. 1998), implemented by U.S. Dep’t of Def., 4715.20-M, Defense Environmental Restoration Program Management (9 Mar. 2012) [hereinafter DoD 4715.20-M].
2. DoD 4715.20-M at 71.