SITE INFORMATION AND CORRESPONDENCE

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Mr. Phil Dawson August 26, 2009 Page 2 An August 25, 2009, conference call between all Parties identified that DLA required more time to review the State's proposal of a pump and treat remedial alternative necessitating that the informal dispute deadline be extended from August 28th to September 1, 2009. At that time, the Parties will then decide whether to initiate the formal dispute process if consensus is not reached on the preferred remedial alternative. Background On July 1, 2009 the State initiated informal dispute resolution for the DDJC-Tracy Northwest Corner Dieldrin Feasibility Study (FS), rejecting the FS due to discrepancies with the conceptual site model based on the aquifer pumping test results. On August 4th, 2009, tier 1, 2, and 3 representatives from DLA, DTSC, Water Board, and United States Environmental Protection Agency, Region IX, met to discuss the issues outlined in the State's correspondence. The meeting's outcome was that DLA would respond to the State's four shutoff criteria as part of a pump and treat system for the NWC dieldrin plume. On August 5, 2009, DLA's Project Manager sent the State an e-mail requesting that the State provide the design specifics (i.e. radius of influence, number of wells, well screen locations, etc.) for a conceptual pump and treat design. On August 6, 2009 the State responded to DLA stating that it would be willing to meet and discuss its interpretation of the conceptual site model to assist DLA and its contractor in developing a pump and treat system. During the conference call on August 10, 2009 between the State and DLA, DLA and its contractor were not willing to engage the State in its interpretations of site conceptual model, referring that the State did not have any new data to support its position, therefore, agreeing to disagree with the State's position. In the August 13, 2009 response letter DLA did not formally address the State's four pump and treat shutoff criteria stating that the criteria were "...contradictory, open-ended, and provided no clear end point or rationale." DLA's response letter also refuted several of the States technical assumptions without providing detailed justifications. The State is writing this letter to clarify the State's technical assumptions used in its evaluation of the observed data, followed by the perceived deficiencies in the remedial alternative analyses for selection of the preferred alternative. Below is a point by point response to DLAs assumptions presented in the August 13, 2009 letter.