TSCA-HQ-2004-0016, et. al. Third Quarter 2006 Progress Report October 23, 2006



### Page 1 of 5 

### 3rd Quarter 2006 Progress Report July 1, 2006 to September 30, 2006 Biodegradation Supplemental En vironmental Project (SEP A)

Pursuant to Section V.l.a. of the SEP, DuPont is re quired to submit a quarterly report within thirty days after the end of each calendar-year quarter. This report which is due October 31, 2006 satisfies said requirement.

1. Description of Activities Undertaken

A. Progress Toward a Purification Procedure Agreement

Section I.E.2.a. of SEP A provides that “On or befo re February 1, 2006, DuPont and EPA will agree on the procedure(s) that DuPont will use to purify the Fluorotelomer Products to produce Purified Fluorotelomer Products, taking into consideration the need to optimize various factors, including the appropriate duration of extracti on and re-dispersion processes, the desired purity of the Purified Fluorotelomer Products, the schedule for delivery of the Purified Fluorotelomer Products to the laboratories for characterization, testing, and th e overall schedule for completing this biodegradation

SEP.”

The time for the parties to reach agreement on the pu rification procedure was first extended to March 02, 2006 (CD-2006-05) and then extende d a second time on March 01, 2006 to April 17, 2006 (CD-2006-14). On March 23, 2006 after additional experimentation, DuPont and EPA, teleconferenced to discussed the progress toward the purification of the Fluorotel omer-based Commercial Products using the “Mabury Method”. On March 27, 2006, EPA provided DuPont with a request for additional information. On April 7, 2006 DuPont provided a response (CD-2006-18) to the March 27, 2006 request from the EPA. The response included the following: 1) DuPont’s response to specific questions posed by the EPA, 2) copies of available DuPont analytical methods used to m easure target compounds and 3) requested analytical

data.

Between February 7, 2006 and Ap ril 12, 2006 a series of progress reports were submitted outlining the progress DuPont made with the exploratory studies on the applicability of the “Mabury Method” for the purification of Fluorotelomers-based Commercial Pr oducts (CD-2006-14, 16, 17 and 20). Based upon evaluation of the results from the first three pur ification progress reports (C D-2006-14, 16 and 17), on March 27, 2006, the EPA proposed additional expe riments to conduct on two test substances.

The EPA determined that two additional experiment s may provide further relevant information on the appropriate purification procedure. As such, a third extension of time was necessary for the experiments to be conducted and for the parties to reach agreement on the purification procedure. Section II.L.3. of SEP A provides that extensions of time beyond a first extension are subject to EPA’s discretion and are granted for good cause shown.

Progress toward establishing a purification method was presented to show that good cause existed for the granting of the third extension of time. The time period for the third extension was based upon the length of time needed to conduct additional experiments. A request for a third extension was submitted to the EPA on April 12, 2006 (CD-2006-21). On April 14, th e EPA granted an extension for agreement on the Purification Procedure to June 30, 2006 and request ed a conference call to discuss the details of the additional experiments.TSCA-HQ-2004-0016, et. al. Third Quarter 2006 Progress Report October 23, 2006



### Page 2 of 5 On May 03, 2006, EPA and DuPont teleconferenced to discuss the details of the two additional experiments. As part of the path forward experime nts, EPA required DuPont to collect the off gas during the two additional sparging experiments. DuPont work ed with the EPA to identify and outside laboratory capable of developing methods for the analysis of th e air cartridges (Exygen) and a vendor to fabricate the air sampling cartridges (SKC, Inc.). Details which include the Exygen and SKC quotes were included in the June 26, 2006 (CD-2006-24) DuPont submission entitled “Path Forward Agreement from May 03, 2006 Meeting”.

Pending the approval of the path forward agreemen t which was submitted to EPA on June 26, 2006 (CD2006-24) but prior to the June 30 deadline, DuPont submitted a forth request for extension for the purification procedure agreement (CD-2006-25). The request for extension by DuPont from June 30, 2006 to September 30, 2006 was taken under consideration by the EPA pending consideration of the timeline of the path forward agreement.

After much negotiation and engaging discussion between June 26, 2006 and August 21, 2006, a path forward agreement was finalized by the EPA a nd communicated to DuPont on August 23, 2006 (email from Ilana Saltzbart, 08/23/2006, 4:46 PM) with at tachment entitled “Final Purification Path Forward Agreement 8-23-06.pdf. Along with the path forwar d agreement, EPA proposed a new Purification Procedural Agreement deadline of November 27, 2006.

Since August 23, 2006, DuPont has been working w ith Exygen Research to develop methods, establish protocol and reach interlaboratory equivalency. Periodic progress repor ts will be submitted to the EPA in compliance with the path forw ard agreement described above.

B. Panel Administrator Contract Negotiation

Section V.E.2 of the SEP provides that by March 15, 2006, DuPont must provide EPA with a final draft of the proposed contract that DuPont and the Pane l Administrator have nego tiated. Since the Panel Administrator was not chosen and agreed upon by th e EPA and DuPont until February 22, 2006, a first request for extension (CD-2006-15) was requested by DuPont on March 13, 2006 and granted by the

EPA. The deadline for Panel Administrator Contract submission to the EPA was extended to April 14,

2006.

On February 27, 2006, contract negotiations began be tween International Life Sciences Institute (ISLI) and DuPont and concluded successfully on April 10, 2006. The first draft of the negotiated Panel Administrator Contract, both CBI (CD-2006-19) and public versions (CD-2006-19a ) was submitted to the EPA for review on April 12, 2006.

Since April 12, 2006, EPA and DuPont have met by teleconference numerous times (May 12, 2006, May 17, 2006, May 22, 2006, May 25, 2006, June 08, 2006, July 13, 2006, July 27, 2006, August 20, 2006, August 23, 2006, September 20, 20 06, September 21, 2006, Septembe r 25 and October 12, 2006) to address questions regarding the contract documents. The discussion was somewhat extended due to a request for a Biodegradation Consultant by ILSI. A Biodegradation Consultant Contract will be included as part of the original contract documents subm itted to the EPA on April 12, 2006 (CD-2006-19).

As of October 12, 2006, all Panel Administrator Contract documents have been reviewed by EPA, DuPont and ILSI. Once the documents are acceptable to the EPA, EPA will request DuPont to submit the

contract documents in final form as a formal submis sion for final EPA approval. The date of submission of the ILSI contract is anticipated before the end of October 2006.TSCA-HQ-2004-0016, et. al. Third Quarter 2006 Progress Report October 23, 2006



### Page 3 of 5 C. Submission of Second Quarter 2006 Progress Report Describing Progress from April 01, 2005 to June 30, 2006

Section V.I.a. of the CAFO provides that “Within thir ty days after the end of each calendar-year quarter (i.e., by April 30, July 31, October 30 and Janua ry 30) after execution of this Consent Agreement pursuant to Paragraph IX.9., respondent shall subm it in writing a quarterly report for the preceding quarter that shall include a discussion of the Re spondent’s progress in satisfying its obligations in connection with each SEP including a minimum, a narrative description of activities undertaken, compliance with the schedules or milestones set forth in the applicable appendix, and a summary of costs incurred since the previous report.”

On July 14, 2006, the second quarter 2006 progress re port covering the time period from April 01, 2005 to June 30, 2006 was submitte d to the EPA (CD-2006-26).

D. Additional Progress

Appendix A - Table 1 shows the progress DuPont has ma de toward the synthesis of the nine Commercial Fluorotelomer-based Products, nine Lab Synthesized Commercial Fluorotelomer-based Products and the nine Lab Synthesized Fluorotelomer-based Commercia l Products made from high purity raw material. Appendix A - Table 1 also shows the quantities of th e material required and the material currently

available. All test substances have been synthesized and are available for shipment.

2. Pending Issues and Document Reviews

A. Requests for Proposals to the EPA for Approval

Section III. B. of the SEP provides that “By February 1, 2006, DuPont shall su bmit to EPA one or more draft Requests for Proposals (RFPs) to be sent to all of the laboratories identified in Attachment G to solicit proposals for (1) characterizing the Fluorotelomer Products and any Corresponding Polymers, and (2) conducting the OECD Guideline 303A and SCAS studies on the Fluorotelomer Products and any Corresponding Polymers (including pilot testing).” On January 27, 2006, DuPont requested and was granted a first extension (CD-2006-05) to March 2, 2006.

The Analytical Laboratory Request for Proposal ( both CBI and Public versions, CD-2006-12, CD 2006- 12a and CD-2006 12b) was submitted to the EPA on Fe bruary 22, 2006. Similarly, the Biodegradation Laboratory Request for Proposal (both CBI and Pu blic versions, CD-2006- 11 and CD 2006-11a) was submitted to the EPA on March 1, 2006. The Biod egradation Laboratory and Analytical Laboratory RFPs are under review by the EPA.

B. Panel Administrator Contract Status

Section V.E.2 of the SEP provides that by March 15, 2006, DuPont must provide EPA with a final draft of the proposed contract that DuPont and the Pane l Administrator have nego tiated. Since the Panel Administrator was not chosen and agreed upon by the EPA and DuPont until February 22, 2006, the

deadline for Panel Administrator Contract submission to the EPA was extended to April 14, 2006. The first draft of the negotiated Panel Administrator C ontract (both CBI and public versions, CD-2006-19 andTSCA-HQ-2004-0016, et. al. Third Quarter 2006 Progress Report October 23, 2006



### Page 4 of 5 CD-2006-19a) was submitted to the EPA for review on April 12, 2006. The panel administrator contract while under review by EPA, has been discussed on num erous teleconferences between EPA, ILSI and

DuPont.

As of October 12, 2006, the Panel Administrator Contract documents have been reviewed by EPA, DuPont and ILSI. Once the documents are acceptable to the EPA, EPA will request DuPont to initiate a formal submission for final approval. The submissi on is anticipated before the end of October 2006. There is no pending deadline for this submission.

C. Agreement on the Mabury Method of Purification

Pending the approval from EPA on the path forward ag reement for two additiona l sparging experiments

which was submitted to EPA on June 26, 2006, DuPont submitted a fourth request for extension for the purification procedure agreement.

After much negotiation and engaging discussion between June 26, 2006 and August 21, 2006, a path forward agreement was finalized by the EPA a nd communicated to DuPont on August 23, 2006 (email from Ilana Saltzbart, 08/23/2006, 4:46 PM) with at tachment entitled “Final Purification Path Forward Agreement 8-23-06.pdf. Along with the path forwar d agreement, EPA proposed a new Purification Procedural Agreement deadline of November 27, 2006.

DuPont is currently working with Exygen Researc h to develop methods and reach interlaboratory equivalency. Periodic progress reports will be submi tted to the EPA in compliance with the path forward agreement described above.



### 3. Compliance with Schedules or Milestones

This section outlines the various requests for extensi on granted between July 01, 2006 and September 30, 2006. All deadlines in the third quarter were met. Pending deadlines and open issues are described below.

A. Purification Procedure

The deadline to reach agreement on the purification procedure was extended a forth time on August 23, 2006 (CD-2006-25) to November 27, 2006 pending comp letion of the path forward experiments.

B. Panel Administrator Contract Submission to the EPA

The first draft of the negotiated Panel Administrato r Contract (both CBI and public versions, CD-2006-19 and CD-2006-19a) was submitted to the EPA for review on April 12, 2006. Between April 12, 2006 and October 12, 2006, ILSI, DuPont and EPA met on num erous occasions to discuss the conditions of the

Panel Administrator Contract.

As of October 12, 2006, the Panel Administrator Cont ract documents have under gone complete review by EPA, DuPont and ILSI. Once the documents are a cceptable to the EPA, EPA will request DuPont to initiate a formal submission for final EPA approval. The submission of the final ILSI contract documents is anticipated before the end of October 2006.

C. Quarterly Progress ReportsTSCA-HQ-2004-0016, et. al. Third Quarter 2006 Progress Report October 23, 2006



### Page 5 of 5 On July 14, 2006, the second quarter 2006 progress re port covering the time period from April 1, 2006 to Jun 30, 2006 was submitted to the EPA (CD-2006-26).

D. Pending Deadline Summary

All deadlines were met in the third quarter of 2006. The only pending deadline is for the Agreement of the Purification Method which is now November 27, 2006.



### 4. Summary of Costs Incurred

DuPont has established a system to capture all costs incurred for this SEP. Cost is broken down into two accounts, the “SEP Biodegradation Main” account (VZ789011724) and the “SEP Biodegradation Synthesis” account (VZ78101073). The SEP Biodegrada tion Main account is used for all eligible SEP costs while the SEP Biodegradatio n Synthesis account is used for DuPont costs resulting from preparation, purification, synthesis and characteriz ation of the test substances as supplied to the SEP.

The cost of the SEP from July 01, 2006 to Sept ember 30, 2006 as it was accounted on cost ledger is

shown in Attachment B. The table shows the cost s from both accounts and breaks the cost distribution down into salaries, overheads, travel, operating suppli es and analytical costs. The year to date (YTD) costs are $206,250 and $107,107 for the SEP Biodegrad ation Main and the SEP Biodegradation Synthesis accounts, respectively. Attachment B also shows cost corrections for the first and second quarters of 2006. Adjustments were made in October and justif ications for the adjustments are described at the

bottom of the cost tables in Attachment B.

Attachment B Page 2, shows the breakdown of staff hours for the third quarter from July 01, 2006 to September 30, 2006. Barley Mill and Chambers Works are staff locations.

The Agilent Costs to perform the analysis required by the two additional experiments will total per quote Q2319E to $164,800 (min) to $204,400 (max). A ra nge of cost was quoted to allow for flexibility associated with the range of experiments that may be required. Exygen began analyses in September 2006, a fee of $82,833 was charged in September to cover the method development and validation costs. Going forward the analyses will be changed on a monthl y basis to the SEP accounts. It is anticipated that

the remainder of the costs associated with the Exygen Research quote will be spent in the forth quarter

2006.

5. Attachments

Title Number of Pages Attachment A. Synthesis Status of Test Substances 1

Attachment B. SEP Cost Summary for 3Q 2006 2TSCA-HQ-2004-0016, et. al.Third Quarter 2006 Progress ReportOctober 23, 2006Attachment AActual Quantity Made and AvailableTable 1.Quantity of Test Substance Calculated and Actual for Each Test SubstancePilot TestGroupTest Sequence Order% activeCalculatedTestQuantity (L)*CommentsCommercialProductLab MadeCommercialLab MadeS1PurifiedControl19630 L4.5 L4.5 LA1Group 1 Substance 239.5-42.54.5based on 39.5%A2Group 1 Substance 312.0-13.08.5based on12 %36 L10 L10.5 LA3Group 1 Substance 132.0 - 34.04.5based on 32%33 L5.3 L5.5 LBGroup 2 Substance 110.0 - 20.09.3based on 10%32.5 L11 L10.5 LC1Group 3 Substance 321.5 - 22.55.5based on 21.5%34 L7.0 L5.5 LC2Group 3 Substance 217 - 186.5based on 17%34 L6.5 L6.5 LC3Group 3 Substance 118 - 196.5based on 18%34 L6.5 L6.5 LD1Group 4 Substance 117 - 206.5based on 17%34 L7 L7 LD2Group 4 Substance 229 - 304.2based on 29%34 L4.6 L4.3 L* rounded up to the nearest 1/2 LTSCA-HQ-2004-0016, et.al. Third Quarterly 2006 ProgressOctober 23, 2006RED or YELLOW indicates excluded or correctedfromprevious Progress ReportsSEP Biodegradation: Synthesis Account - VZ78101073 SEP Biodegradation: Synthesis Account - VZ78101073 SEP Biodegradation: Synthesis Account - VZ78101073JANFEB MAR YTD April MayJune YTD JulyAugust Sept YTDSalaries Salaries SalariesChambers Works5293,0556,50210,086 Chambers Works 11,962 8,987 19,886 50,921 Chambers Works 7,700 1,155 3,290 63,066Barley Mill1,288 205 1,493Barley Mill245 291 0 2,029 Barley Mill2,029TravelTravel0000Travel0Operating Supplies0 Operating Supplies#360 0 0 360 Operating Supplies#1,633 1,993RAS Analytical945 1527916,224 RAS Analytical6,331 2,940 420 25,915 RAS Analytical25,915OverheadsOverheads Overheads 0Chambers Works 126 444 694 1,264Chambers Works 1,168 997 3,365 6,794 Chambers Works 5,789 428 858 13,869Barley Mill147 24 171BMP 30 34 0 235 BMP 235TOTAL 5,879 22,704 29,238 TOTAL 20,096 13,249 23,671 86,254 TOTAL 15,122 1,583 4,148 107,107SEP Biodegradation: Main Account - VZ78911724 SEP Biodegradation: Main Account - VZ78911724 SEP Biodegradation: Main Account - VZ78911724JANFEB MAR YTD April MayJune YTD JulyAugust Sept YTDSalaries Salaries SalariesChambers Works 12,341 11,080 9,052 32,473 Chambers Works 21,569 882 12,890 67,814 Chambers Works 9,809 8,310 9,069 95,002Barley Mill1399^ 3,373 405# 3,373Barley Mill518 0 882 4,773 Barley Mill2,594 115 171 7,653Travel#Travel866 Travel866Franchina219 219Stephans$ 437 437Bryndza210 210Operating SuppliesOperating Supplies0 0 0 61 Operating Supplies0 2,693 1,050 3,804Stephans 61 61 ExygenExygen82,833 82,833OverheadsOverheads Overheads 0Chambers Works 3,860 3,800 3,288 10,948Chambers Works 604 765 1,575 13,892 Chambers Works 398 337 368 14,995Barley Mill189 201 61 451BMP 80 0 128 659 BMP 395 16 27 1,097TOTAL 16,390 19,381 12,401 48,172 TOTAL 22,771 1,647 15,475 88,065 TOTAL 13,196 11,471 93,518 206,250YTD totals include 1Q corrected data i.e., Jan though June# Costs for Shipping Documents to EPA, cost for purchasingO^1,399 was 3,373, # 405 was 610Feb $945 RAS charges not billed June salary charge included $16224 of RAS charges. $945 should have been billedMarch RAS charges of $15279 included in the salary line in February, $15,279 was already included in the March bill (as salaries)June - Barley Mill salary and benefits billed in error to both accounts - should have beenbilled to 911724Cost Analysis for July 1, 2006 to Sept 30, 2006Cost Corrections for 1Q 2006 January 1, 2006 to March 31, 2006AttachmentBCost Corrections for 2Q 2006 April 1, 2006 to June 30, 2006TSCA-HQ-2006-0016, et. al. Third Quarter 2006 Progress Report October 20, 2006

SEP Main Account

Nam e Function Locatio n Time (hours)
L. Wrightso n Sourcn g BMP 3 L. Stephans SEP Manage r J L 128
J. Quinn Finance JL 1 E. King Finance-DCS E BMP 2

M

onth Total Char g ed to SEP Main Account 13 4

SEP-S y nthesis Account

Nam e Function Locatio n Time (hours)
P. Fitzgerald DCSE-R& D J L 18

J. Bowers DCSE-R& D J L 90

M

onth Total Char g ed to DuPont SEP S y nthesis Account 108

SEP Main Account

Nam e Function Locatio n Time (hours)
L. Wrightso n Sourcn g BMP 1
J. Quinn Finance JL 1 E. King Finance-DCS E BMP 1 L. Stephans SEP Manage r J L 120

M

onth Total Char g ed to SEP Main Account 123

SEP-S y nthesis Account

Nam e Function Locatio n Time (hours)

J. Sworen DCSE-R& D J L 4 L. Stephans DCSE-SEP Manage r J L 10

F. D'amic o DCSE-R& D J L 16

M

onth Total Char g ed to DuPont SEP S y nthesis Account 30

SEP Main Account

Nam e Function Locatio n Time (hours)
L. Stephans SEP Manage r J L 120
J. Quinn Finance JL 2

L. Kin g DCSE Finance BMP 3

M

onth Total Char g ed to SEP Main Account 12 5

SEP-S y nthesis Account

Nam e Function Locatio n Time (hours)
L. Stephans DCSE-SEP Manage r J L 20

M

onth Total Char g ed to DuPont SEP S y nthesis Account 20 June 2006 SEP Time Summar y Third Quarterl y 2006 Pro g ress Report, Hours Summar y Attachment B Page 2 of 2

A p ril 2006 SEP Time Summar y

Ma y 2006 SEP Time Summar y