Impact of hazardous waste risks and liabilities on the contracting process

Hazardous waste risks include the following: (1) An emerging environmental cleanup industry that differs significantly from traditional engineering; (2) The inability to predict and control the subsurface environment; (3) The implementation of new and often untested technologies; (4) The statutory imposition of strict, joint and several, as well as retroactive, liability; (5) The lack of insurance and other risk-transfer mechanisms to protect against losses; (6) Costly and time consuming litigation to determine liability; and (7) Others. The liabilities associated with the risks inherent in hazardous waste cleanup directly impact hazardous waste contracting. Contract negotiations become onerous during discussions of liability, indemnification, and issues surrounding scope of work and other clauses. Other impacts include (1) Defensive engineering; (2) Lack of incentive to implement innovative technologies; (3) Increased costs to cover risks. Required client indemnification is a necessary and responsible risks management practice, regardless of whether the client is a federal or private client. Federal government indemnification authorities, as well as private contract indemnification mechanisms, will be explained and analyzed. Conflict of interest concerns are also of critical importance in the hazardous waste market, particularly due to concerns over the complexity of the litigation surrounding hazardous waste sites and the need to ensure unbiased results. Other examples of hazardous waste risk management impacts on contracting in the following market sectors will also be provided: (1) U.S. Environmental Protection Agency; (2) Department of Defense; (3) Department of Energy; and (4) Private sector contracts