PRE-REFERRAL NEGOTATION RE: THE SMS INSTRUMENTS, INC. SUPERFUND SITE; LIITIGATION REPORT SENT AUGUST 8, 1995. BACKGROUND:FROM APPROXIMATELY 1965 UNTIL 1992, SMS CONDUCTED OPERATIONS AT THE SITE, WHICH CONSISTED OF OVERHAULING MILITARY AIRCRAFT, INCLUDING PAINTING, DEGREASING, REFUR- BISHING, METAL MACHINING, AND TESTING. IN CONNECTION WITH THOSE OPERATIONS, HAZARDOUS SUBSTANCES WERE DISPOSED OF AT THE SITE. UNTIL JAN. 1980, WASTEWATER FROM RINSING AND PAINTING OPERATIONS WITHIN THE BUILDING AT SMS DISCHARGED DIRECTLY INTO AN UNDERGROUND LEACHING POOL AT THE SITE. FROM 1987 TO 1989, EPA CONDUCTED A RI/FS OF THE SITE THAT FOUND THE SOIL AND GROUNDWATER WERE CONTAMINATED WITH HAZARDOUS SUBSTANCES, INCLUDING SEVERAL METALS AND AROMATIC HYDROCARBONS. IN 1989 EPA ISSUED A ROD THAT SELECTED THE REMEDY FOR THE SITE. EPA IS IN THE PROCESS OF COMPLETING THE EXTRACTION, TREATMENT, AND REINJECTION OF THE GROUNDWATER. EPA EXPECTS THE GROUNDWATER TREATMENT TO CONTINUE FOR APPROXIMATELY FIVE MORE YEARS. EPA IS FUNDING 90% OF SUCH REMEDIAL ACTION COSTS AND THE STATE OF NY IS PAYING THE OTHER 10%. EPA HAS PERFECTEDA LIEN ON THE REAL PROPERTY AT THE SITE, PURSUANT TO SECT. 107(1) OF CERCLA, BUT OTHERWISE WE HAVE TAKEN NO ENFORCEMENT ACTION UNDER CERCLA WITH RESPECT TO THE SITE TO DATE. EPA BEGAN PHYSICAL ON-SITE CONSTRUCT