SCDHEC Reasonable Rate Document Changes Stir a Hornets Nest
I attended a meeting in August of this year held by The South Carolina Department of Health and Environmental Control (SCDHEC) in Columbia, SC to discuss proposed State Underground Petroleum Environmental Response Bank SUPERB rate changes for Certified UST Site Rehabilitation Contractors.
Mr. Mihir Mehta of SCDHEC provided information on how SCDHEC arrived at the rates they proposed and the crowd was not pleased. In a nutshell, SCDHEC obtained the rates from a recent bid where only 12 of the 240+ certified contractors had actually submitted bids. The proposed rates were reportedly above the average of what these 12 contractors bid for various services, but in most cases, were less than half of what the previous rates had been. The new lower rates were scheduled to become effective on October 1, 2013.
According to unnamed sources (not in the Obama administration), most of the contractors who bid did not give real rates on items they did not intend to do, and instead listed the rates as either zero or an extremely low number for said items just to fill in the blanks. These numbers were reportedly averaged by SCDHEC and an above average rate was established for each item.
The discussions and questions at the meeting were quite spirited with many of the attendees just throwing up their hands in frustration. SCHDEC had not directly informed the contractors that this bid was going to be used to set the rates, because they expected that would cause a lot of elevated prices to be submitted causing substantial increases to the rates.
In September, SCDHEC announced that due to the amount of comments received about the rate changes, they were delaying the effective date of the changes until November 1, 2013. A group of certified contractors have reportedly hired attorneys and lobbyists to force SCDHEC to suspend these rate changes, but as of this writing SCDHEC has only made minor changes (mostly drilling rates) and the new SUPERB rates are in effect.