| Summary: | Approved for public release, distribution unlimited === The purpose of this thesis was to investigate the factors affecting the allowability determination of defense contractor environmental remediation costs. The primary objective of this thesis was to determine what policies and contracting cost principles the Department of Defense (DOD) should develop to address environmental costs in a consistent manner, providing a 'single face' to industry. A secondary objective was to develop an audit framework and questions to allow for consistent policy analysis and application to a contractor's proposed environmental remediation costs based upon the materiality of the situation. Background material was presented to show the amount and complexity of environmental regulations, the effects of current judicial decisions and DOD's efforts to develop a consistent policy. Research material was provided from Congress, the General Accounting Office, DOD, defense contractors, California, Washington, industry associations and environmental protection coalitions. The researcher's analysis of the material produced an environmental cost principle. This cost principle was applied to a current environmental claim, producing an audit framework and tailored list of cost and/or pricing data analysis, questions. Both the cost principle and audit framework are recommended for incorporation into DOD's final environmental cost allowability decision.
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