Hello Rockjoint:
It appears to me that you have some procedure in doing this work based on your statement made."frequently need to excavate..." Hence, I am sure that you do not just go in and excavate. There is no particular rule of thumb for this type of activity. Dik has given you information on his experience in his locale. Others can give the same depending on their experiences.
I can also suggest that if the building is residential and has a basement then you can exacvate as close as possible to the basement wall but you should not go below the footing level. For commercial buildings if they are founded on piles the same could apply. However, the above is not always correct unless one understands the foundation elements of the prevailing structure and soil conditions.
I am curious on what information you obtain on the structure and site before deciding on your methodology and equipment in undertaking the exercise.
Remember, that sandy soils could be problematic and that lateral soil movement could result in settlement of the existing structure. For a depth of 20 ft below the foundation level, I am not sure that this is shallow, or maybe the depth is based on some other reference point -existing ground level. It all depends of course on how close you would like to get to the existing structure in taking out the contaminated material.
Unless you have money to offset liability issues then this type of decision should be, as Dik said, left to the local geotekkies to provide advice. You may be lucky most of the time but it only takes one mishap to cause you grief and your pocketbook.
The answer to this type of question lies in the understanding of fundamental soil behaviour, type of soil, ground water conditions, the concept of the zone of influence used in determining the bearing capacity of the foundation, the equipment to be used for excavation and others.
I am sure that you do not just dig on any site without having the utility companies locate their facilities. Well, the same thinking should result in the geotechs being solicited for input unless of course that you are confident in digging, examining the soil yourself and making the decisions.
Am I misreading the intent of the query?.