QBteeOfThe
Environmental Protection Administrator
21T-2001
October 1991
Implementation of the
Superf und • Alternative
Remedial Contracting
Strategy (ARCS)
Report of the
Administrator's Task Force
1991
7,
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IMPLEMENTATION OF SUPERFUND
ALTERNATIVE REMEDIAL CONTRACTING STRATEGY (ARCS)
REPORT OF THE ADMINISTRATOR'S TASK FORCE -- 1991
LIST OF TABLES ....................... ii
LIST OF FIGURES ...................... iii
LIST OF ABBREVIATIONS ................ iv
EXECUTIVE SUMMARY ................. ix
TASK FORCE MEMBERSHIP .............. xxv
I. INTRODUCTION ....................... 1
II. BACKGROUND ........................ 5
A. Superfund Program Description ............ 5
B. Remedial Contracting History ............. 19
C. ARCS Contract Characterization ............ 21
D. Future of Superfund Contracting ............ 28
III. MAJOR ISSUES ....................... 29
A. ARCS Program Management .............. 31
B. ARCS Capacity and Utilization ............ 40
C. ARCS Contract Controls ................. 56
D. ARCS Financial Audits and Reviews ......... 70
E. ARCS Award Fee Process ................ 78
F. EPA Management Processes and Organization ... 92
IV. APPENDIX .......................... 103
i US EPA Headquarters Library
Mail code 3404T
HEADQUARTERS LIBRARY 1200 Pennsylvania .Avenue iNW
ENVIRONMENTAL PROTECTION AGENCY WasWS!
WASHINGTON, D.C. 20460
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LIST OF TABLES
1. Percent of PRP Project Starts by Activity 13
2. State-Lead Project Starts by Activity
and Fiscal Year 15
3. Historical Summary: Superfund Remedial
Contracts 20
4. Contract Sizes 25
5. Distribution of Small and Large Contracts
by Region/Zone 25
6. Number and Distribution of ARCS Prime Contracts 27
7. Distribution of ARCS Prime and Team
Subcontractors 27
8. OSWER Distribution Policy for RD/RA Projects 45
9. Historical Workload Distribution
for Federal-Lead RD/RA Projects 46
10. Distribution of Federal-Lead Remedial Actions by Size .... 53
11. Common Issues From Regional Vulnerability
Assessments 61
12. ARCS Audits and Reviews 72
13. Extramural Funding - FY90 100
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LIST OF FIGURES
1. Superfund Screening Status 8
2. Superfund Remedial Status 10
3. Cumulative Value of PRP Response Settlements 14
4. Superfund Progress 17
5. Dollars Spent for PM and Remedial Planning 36
6. National Average Ratio of Program Management to
Total Contract Outlays 37
7. ARCS LOE Capacity Analysis 48
8. Optional Distribution Policies for RD/RA Projects 50
9. Award Fee Process 81
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ABBREVIATIONS
AA
ACTS
A-E
ARCS
BUREC
CA
CERCLA
CIS
CLEANLAN
CLP
CO
CORAS
Corps
CPAF
CPFF
DCAA
DOD
DOE
EPA
ERCS
Assistant Administrator
ARCS Contract Tracking System
Architectural and Engineering
Alternative Remedial Contracting Strategy
Bureau of Reclamation
Cooperative Agreement
Comprehensive Environmental Response,
Compensation, and Liability Act of 1980
Contracts Information System
Clean Local Area Network
Contract Laboratory Program
Contracting Officer
Contract Operations Review and Assessment Staff
United States Army Corps of Engineers
Cost Plus Award Fee
Cost Plus Fixed Fee
Defense Contract Audit Agency
Department of Defense
Department of Energy
United States Environmental Protection Agency
Emergency Response Contract Strategy
IV
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FACO
FACTS
FAR
FIT
FMFIA
FMR
FS
FY
G&A
GAO
GAD
HRS
HSCD
IAG
LOE
LTCS
MOU
NCP
NPL
OA
OARM
Financial Administrative Contracting Officer
Financial ARCS Computerized Tracking System
Federal Acquisition Regulations
Field Investigation Team
Federal Managers' Financial Integrity Act
Financial Monitoring Review
Feasibility Study
Fiscal Year
General and Administrative
General Accounting Office
Grants Administration Division
Hazard Ranking System
Hazardous Site Control Division
Interagency Agreement
Level of Effort
Long-Term Contracting Strategy
Memorandum of Understanding
National Contingency Plan
National Priorities List
Office of the Administrator
Office of Administration and Resources
Management
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ODCs
OE
OERR
OGC
OIG
OMB
OPTS
ORD
OROSLR
OSC
OSWER
OWPE
PCMD
PM
PO
PRP
RA
RA
RAC
RD
RD/RA
Other Direct Costs
Office of Enforcement
Office of Emergency and Remedial Response
(Superfund)
Office of General Counsel
Office of the Inspector General
Office of Management and Budget
Office of Pesticides and Toxic Substances
Office of Research and Development
Office of Regional Operations and State/Local
Relations
On-Scene Coordinator
Office of Solid Waste and Emergency Response
Office of Waste Programs Enforcement
Procurement and Contracts Management Division
Program Management
Project Officer
Potentially Responsible Party
Regional Administrator
Remedial Action
Remedial Action Contract
Remedial Design
Remedial Design/Remedial Action
VI
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REM Remedial Contract
RI Remedial Investigation
RI/FS Remedial Investigation/Feasibility Study
ROD Record of Decision
RPM Remedial Project Manager
SARA Superfund Amendments and Reauthorization Act of
1986
SCAP Superfund Comprehensive Accomplishments Plan
SMR Superfund Management Review
TAT Technical Assistance Team
TES Technical Enforcement Support
TQM Total Quality Management
WAM Work Assignment Manager
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EXECUTIVE SUMMARY
INTRODUCTION
Over the past several months the Environmental Protection
Agency (EPA) has been subjected to serious and public criticism for its
management of the Superfund program. EPA has been accused of
allowing certain Superfund contractors to spend an inordinate amount of
public funds on activities other than the direct clean-up of contaminated
sites.
Three particular charges have been leveled against EPA:
• Contractors operating under EPA's Alternative Remedial
Contracting Strategy (ARCS) have been charging EPA for
inappropriate and unnecessary administrative items like
business cards, parking fees, and potted plants for
contractor offices.
• EPA has paid contractors to open and operate offices
before the contractors have been assigned any clean-up
work.
• EPA's procedures for ensuring effective contract
administration and management have not been fully
implemented, thus allowing public funds to be wasted.
In response to these allegations, EPA Administrator William
Reilly established a task force comprised of senior EPA managers and
analysts from EPA's headquarters and regional offices. The task force
was asked to address the following questions:
• Are the allegations of waste by ARCS contractors fair and
accurate?
• Has EPA taken the necessary steps to assure that any
problems are corrected? Is EPA's oversight of ARCS
contractors adequate? If not, how could such oversight be
improved?
• Given that responsible parties are cleaning up many more
Superfund sites than was anticipated when ARCS was
created, is ARCS still an appropriate approach to
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Superfund contracting? Should the number, size, or length
of ARCS contracts be adjusted?
For the past three months the task force has reviewed ARCS
operations in all ten EPA regional offices, as well as at EPA
headquarters. Besides interviewing EPA employees and ARCS
contractor representatives, the task force reviewed internal EPA
contract management practices and a variety of reports related to
Superfund contracting, including reports by the General Accounting
Office (GAO) and EPA's Office of the Inspector General (OIG). This
report presents the results of the task force review.
BACKGROUND
EPA's Superfund program was created by the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA)
of 1980. Among other things, CERCLA gave EPA the responsibility
to clean up sites contaminated by toxic chemicals stored or abandoned
there.
Superfund was originally intended to be a short-term solution to
a limited problem. Within a few years, however, it became clear that
as many as 30,000 sites in the United States were contaminated to
some extent by toxic chemicals. EPA identified over 1200 sites for
priority clean-up. As a result, in 1986 Congress reauthorized
Superfund, expanded its funding, and gave new impetus to the nation's
long-term clean-up efforts. The Superfund program was reauthorized
again in 1990.
After Superfund was reauthorized in 1986, EPA realized that —
for several reasons ~ it had to improve its ability to contract for and
manage clean-up services. During the first few years of Superfund's
existence, only a handful of private contractors had developed the
capability to clean up contaminated sites. After Superfund
reauthorization in 1986, EPA had to be prepared to manage more
extensive clean-up activities at more sites than it had once expected.
Consequently, the Agency believed that it had to expand the Clumber of
contractors available, improve their technical capabilities, and Ithus
lower the cost of Superfund clean-ups.
Moreover, EPA wanted to decentralize the management of its
Superfund contracts. By managing Superfund contracts through its
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regional offices, EPA believed it would be better able to link specific
clean-up sites with the specific capabilities of particular contractors.
Decentralization would allow projects to be initiated and completed
more quickly by an expanded pool of contractors. Decentralization also
would improve EPA's ability to reward good performance and penalize
poor performance by its Superfund contractors.
Thus, in 1988 EPA established its Alternative Remedial
Contracting Strategy (ARCS). Under ARCS, EPA awarded a total of
45 long-term contracts to 23 separate contracting firms to assist EPA in
cleaning up the country's worst hazardous waste sites. The contracts,
awarded between January 1988 and June 1989, were intended to remain
in force for up to 10 years, and they carried a potential full-term value
of approximately $6.6 billion. As each contract was awarded, the
contractor was directed to incur costs for staff, facilities, and equipment
in order to avoid lengthy start-up delays when site work was assigned -
- a problem that had plagued Superfund during its early years.
The 45 ARCS contracts were distributed among the ten EPA
regions based on projections of their anticipated contractor needs. Each
region or, in some cases, zone of multiple regions was allocated
between five and eight contracts. Contract administration and
management responsibilities, including the responsibility to assign and
oversee specific work assignments, were left with the regions.
At approximately the same time that ARCS was being
established, EPA was defining its "Enforcement First" strategy for
Superfund. That strategy, announced in the Superfund Management
Review of May 1989, intended - whenever possible - to force the
parties responsible for site contamination to manage and pay for site
clean-up. That strategy has been remarkably successful. Clean-up at
about 60 percent of active Superfund sites now is being carried out by
potentially responsible parties (PRPs) - not by EPA.
The success of the "Enforcement First" strategy reduced the
number of projects that could be assigned to EPA's ARCS contractors.
Although ARCS contractors had incurred sizeable start-up costs under
the long-term contracts they had signed with EPA, some of the site
work they had expected to perform was being carried out by PRPs.
This shift of site clean-up work from EPA to PRPs was one major
reason that, during the early years of the ARCS contracts,
administrative costs were a relatively high percentage of the total costs
billed to EPA by its ARCS contractors.
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However, as each year passes and ARCS contractors undertake
more work at Superfund sites, the ratio of administrative costs to
overall costs under the ARCS contracts steadily declines. In fiscal year
(FY) 1988 70 percent of total ARCS contract outlays was spent on
administrative activities. In FY89 administrative costs were 42 percent
of total outlays, and in FY90 they were 28 percent of total outlays. It
is expected that administrative costs in FY91 will be approximately 20
percent of the total contract outlays of EPA's ARCS contractors.
GENERAL CONCLUSIONS
The task force confirms that EPA in fact has been charged by
ARCS contractors for business cards, parking fees, and office plants.
EPA has been charged for office rental costs by contractors who were
starting up but had not yet performed any work related to a Superfund
site. The task force has identified other charges made by ARCS
contractors that appear inappropriate or excessive.
A critical question is whether any of these charges are
inconsistent with or unallowable under government contract law, federal
acquisition regulations, or the ARCS contracts. This question can be
answered in absolute terms only after completion of comprehensive
audits specifically designed to assess the reasonableness and allowability
of direct and indirect costs charged to the government under the ARCS
contracts.
Regardless of whether all the charged costs are allowable in
strictly legal terms, some of the charges clearly do not support clean-up
activities at Superfund sites. Although such charges are a very small
part of the total costs billed under the ARCS contracts, they are an
inappropriate use of federal funds. Thus, this report includes several
recommendations to assist EPA's regions in eliminating those charges
which, even if legal, are not essential to implement and support clean-
up actions at Superfund sites.
The task force also confirms that during the early stages of the
new ARCS contracts, program management costs were high relative to
the charges for site clean-up work. As mentioned above, this is due in
part to a conscious strategy of early investment to avoid subsequent
delays in starting site work. The variations among EPA regions and
ARCS contractors in the amount and percentage of this initial
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investment, however, suggest an absence of effective planning and
control in some cases. As the amount of clean-up work performed by
ARCS contractors has increased, the proportion of program management
costs to clean-up costs has decreased. To help reinforce this trend, this
report includes a series of recommendations to assist EPA's regions in
further monitoring and controlling program management costs.
Finally, the task force concludes that EPA is not conducting
effective contract administration and oversight. This report documents
weaknesses in the way EPA assigns work to contractors, monitors
contractor performance and costs, prepares independent cost estimates,
and conducts audits. The more effective use of oversight systems
already in place, or required under the ARCS contracts, can improve
management of such contracts in the future. This report includes
several recommendations to improve the use of existing EPA
management systems.
At the same time, the task force recognizes that EPA has to
improve its oversight without overwhelming its field staff and ARCS
contractors with administrative paperwork. Just as too little EPA
management can lead to higher project costs if contractors have to redo
their site work, too much EPA management can lead to higher project
costs if contractors and EPA staff are burdened with excessive project-
related paperwork. This report includes recommendations that attempt
to balance EPA's management responsibilities so the costs of both
rework and micromanagement are minimized.
SPECIFIC FINDINGS AND RECOMMENDATIONS
Based upon extensive task force review and analysis, this report
identifies a series of issues and recommendations that are grouped into
six categories:
Program Management - contractor activities related to
administration and technical support, as opposed to direct
clean-up activities at Superfund sites.
ARCS Capacity and Utilization - the extent of contractor
capacity acquired under ARCS contracts and its ultimate
utilization at Superfund sites.
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ARCS Contract Controls - the provisions of ARCS
contracts that permit effective EPA oversight of contractor
activities.
ARCS Financial Audits and Reviews -- the processes used
to ensure that charges under ARCS contracts are accurate
and allowable.
Award Fee Process - the mechanism by which EPA
evaluates and rewards contractor performance.
EPA Management Processes and Organization - the
organization, procedures, and staffing used by EPA to
manage the work performed under ARCS contracts.
The task force urges the EPA Administrator to assign specific
EPA offices the responsibility for implementing the following
recommendations. Those offices should provide the Administrator with
quarterly status reports and a thorough evaluation at the end of one
year. Specific assignments of responsibilities and detailed
recommendations for future actions are contained in the full task force
report.
Program Management
Findings
For several reasons, costs for program management during the
first few years of the ARCS contracts were a large percentage of
overall contract costs. Administrative costs usually tend to be higher at
the beginning of long-term contracts because of one-time start-up costs.
This problem was exacerbated in the case of the ARCS contracts
because the site-specific workload was smaller than expected due to the
success of EPA's "Enforcement First" policy.
Over time, however, program management costs as a proportion
of total ARCS outlays have declined from 70 percent to 20 percent.
Because program management costs within some contracts and at some
specific sites are still relatively high, EPA needs to review them with
particular care. Data tracking and cost evaluation systems, which
currently are not maintained at a national level, are needed to assure
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cost control and maintain EPA's ability to aggregate and report
nationwide data.
Recommendations
1. EPA should establish a national target of 20 percent or
less as the ratio of program management expenditures to
total contract expenditures under ARCS contracts.
2. EPA regional offices should continue to pursue program
management cost reductions and improve cost controls.
Contractor effectiveness in controlling costs should be
given special weight when contractor performance is
evaluated.
3. Within 120 days, EPA should develop guidance to support
cost management activities. As part of that guidance,
EPA should:
• Describe program management activities mandated
by contract;
• Clarify contract requirements related to staffing;
• Discuss factors that promote efficiency when clean-
up activities slow down; and
• Develop various indicators of administrative cost
control.
4. To track costs more accurately, within 120 days EPA
should develop guidance for dividing program management
costs into two parts: administrative costs and technical
support costs.
5. By December 1991, EPA should complete guidance for
allocating program management costs to specific sites so
that costs can be recovered more accurately.
6. EPA should revise the program management concept so
that start-up costs, administrative costs, and other clean-up
support costs are classified separately in future Superfund
contracts.
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ARCS Capacity and Utilization
Findings
As originally designed, the ARCS contracts provided a large
amount of contractor capacity for planning, engineering design, and
clean-up activities at Superfund sites. The actual use of this capacity
has been lower than expected due to:
• The success of the EPA's "Enforcement First" policy,
thanks to which private parties now are cleaning up about
60 percent of Superfund sites;
• The continued use of the U.S. Army Corps of Engineers
(Corps) for both the design and construction of remedies
at major Superfund sites; and
• Budget policy decisions that shifted emphasis from
remedial investigations and field studies to design and
construction.
Because of these unforeseen changes in Superfund operations,
ARCS contractors have more capacity for site-specific construction and
clean-up activities than the current Superfund program needs. Yet a
decline in ARCS contractor involvement in construction work will not
necessarily result in a proportionate reduction in ARCS program
management costs, unless EPA acts to ensure that this occurs.
A balanced use of ARCS contractors and the Corps would
emphasize the unique strengths and capabilities of each. Moreover,
greater utilization of ARCS contractors for remedial design could speed
the completion of site clean-ups under Superfund.
Recommendations
1. To encourage more effective use of available ARCS
resources, within 60 days EPA should revise Superfund
policy to allow the regions to select ARCS contractors to
do design work at any site, and to carry out remedial
actions with a value up to $15 million. Under current
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policy, ARCS cannot be selected to carry out remedial
actions with a value over $5 million.
2. To facilitate implementation of this revised policy, within
90 days EPA should issue guidance to the regions to help
them make assignments to ARCS contractors and the
Corps. This guidance should include:
• Site-specific technical, quality, and performance
criteria;
• Emphasis on the Corps' ability to review the design
and construction activities of ARCS contractors; and
• Requirements that the Corps review the remedial
designs of ARCS contractors when the Corps will
carry out the clean-up phase.
3. EPA should negotiate an approximately $2 billion
reduction in the construction capacity of ARCS contracts
to reflect the reduction in currently projected needs.
4. To ensure a balanced construction management system,
EPA should work with the Corps to improve Corps
responsiveness to regional needs during project design,
maintain effective communications between EPA and the
Corps, and ensure a substantial and predictable workload
for the Corps to facilitate workload planning.
5. In order to assess the accuracy of current workload
assumptions, EPA should continue to monitor the extent to
which ARCS contractor capacity is utilized. If actual
utilization differs substantially from the projections, EPA
should take action to correct under- or over-capacity
problems.
6. EPA should assess the apparent excess capacity of ARCS
contractors in the western zone. The Agency should
consider selective terminations and assess the feasibility of
making excess capacity available to other regions that may
have a capacity shortfall.
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ARCS Contract Controls
Findings
Defined within each ARCS contract are a series of procedures
and controls intended to assure effective EPA oversight of contractors.
These contract controls are augmented by defined procedures to be
followed by EPA staff engaged in contract administration and program
management.
Overall, the defined procedures and controls appear to be
comprehensive. But specific weaknesses have been identified in the
implementation of these procedures. Administrative weaknesses in the
areas of work assignment management, invoice review, technical
performance management, and independent government cost estimates
provide inadequate safeguards against waste and mismanagement.
These shortcomings should be reported under the Federal Managers'
Financial Integrity Act (FMFTA) to ensure senior management
accountability for and attention to corrective actions.
The ARCS contracts provide for contractors to purchase
necessary equipment on behalf of the Federal government. This
equipment is maintained and utilized by the contractor during the life
of the contract, but it is owned by the government. The task force
found no evidence of violation of EPA controls over equipment
purchases by contractors. Other reviews have identified instances when
ARCS contractors have not utilized available government-furnished
equipment. EPA currently is conducting a comprehensive review of its
equipment control policies and procedures.
Recommendations
1. EPA should report ARCS contract management as a
material weakness in its FY91 FMFIA submission. In
addition, the EPA office responsible for this report should:
• Implement corrective actions;
• Establish a formal tracking system that projects
action dates and monitors whether actions are taken
as scheduled;
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• Report quarterly to EPA's Senior Council on
Management Controls on the status of
implementation; and
• Convene a regional work group to evaluate regional
issues.
2. EPA should act immediately to establish a regional
capacity for providing independent government cost
estimates to ARCS contract managers.
3. EPA should take immediate steps to strengthen ARCS
administrative process controls in those areas identified in
regional vulnerability assessments. Two areas that deserve
immediate attention are the need to assure the optimal
scope of work assignments and the invoice review process.
4. EPA should implement the recommendations resulting
from its ongoing study of the Agency's administrative
controls over the government-owned equipment used by
contractors at Superfund sites.
5. EPA should evaluate the feasibility of establishing
regional, government-owned, contractor-operated
warehouses where all equipment not required on a regular
basis can be stored and accessed by ARCS contractors.
ARCS Financial Audits and Reviews
Findings
Financial audits of contractor records are the government's final
means for determining the allowability, allocability, and accuracy of
contractor charges under cost-reimbursement contracts. Due to the
relatively short time that the ARCS contracts have been in place, the
timing of audit cycles, and the division of audit responsibilities between
EPA's Office of the Inspector General (OIG) and the Defense Contract
Audit Agency (DCAA), no final audits have been completed on ARCS
contracts. Selected special audits have been completed when EPA
contract administrators have suspected problems. EPA also conducts
periodic reviews of contractor financial management systems to assure
compliance with contract requirements.
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Because OIG operates under an independent appropriation, the
EPA Administrator does not have independent authority to provide
funds to the OIG. Consequently, the Administrator has requested that
Congress provide additional resources so the OIG can become the lead
audit agency for several additional ARCS contractors, and accelerate
audits at contractors for which the OIG already is the lead auditor.
The OIG recently assigned a high priority to auditing Superfund
contracts in FY92.
Recommendations
1. The OIG should develop a strategy to complete financial
audits in accordance with existing requirements.
Specifically, the OIG should:
• Define a full audit program for the six contractors
for which the OIG is the lead auditor;
• Continue to negotiate with DCAA on audit
coverage for the remaining 17 ARCS contractors
and other EPA contractors; and
• Evaluate audit coverage in order to consolidate the
number, type, and frequency of audits while still
preserving audit integrity.
2. EPA should strengthen its financial monitoring review
program by:
• Reviewing contractors on a one- to two-year cycle;
and
• Resolving problems identified during previous
reviews.
3. EPA should periodically spot check contractors' financial
records, vouchers, and other supporting documentation.
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Award Fee Process
Findings
The compensation structure in ARCS contracts was designed to
promote contractor effectiveness by awarding higher fees for better
performance and reducing fees for lower quality work. Moreover,
under ARCS the quality of a contractor's performance is supposed to
be a major consideration in the assignment of future work. This dual
incentive concept is central to the Superfund contracting strategy.
However, EPA's success in using the quality of contractor
performance as the basis for issuing new work assignments is uneven
at best. Some regions have used the strategy effectively; others have
not. The national pattern of performance ratings suggests that the use
of the performance rating systems among regions is also uneven.
Overall, fees awarded to ARCS contractors are significantly
lower than the maximum levels permitted by contract. On average,
they are also lower than the rates established under other contract
forms (e.g., cost plus fixed fee).
Recommendations
1. EPA should reinforce its policy on the use of award fees
to influence contractor performance by:
• Suspending the issuance of new site assignments to
contracts who have performed unsatisfactorily on
prior assignments;
• Imposing appropriate sanctions, including
termination, on contractors who persist in their
failure to correct deficiencies; and
• Assigning new site work in FY92 to contractors
who have performed well in the past.
2. Contractors should be evaluated on the quality of both
their administrative and remedial work. The ability of
contractors to reduce program management costs and meet
national targets should receive significant consideration in
the award fee process.
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3. Key EPA supervisors should assist the staff charged with
the routine operation of the award fee process in their
evaluations of ARCS contractor performance.
4. EPA should establish teams to evaluate and report within
120 days on ways to streamline the award fee system,
reduce the paperwork burden, and resolve issues of
national consistency. These teams also should examine
the Performance Index Rating Score to determine if it is
the best tool for evaluating performance, and then translate
the index into a criterion for the assignment of new work.
EPA Management Processes and Organization
Findings
As EPA's mission has increased in scope and complexity, so has
its dependence on outside parties. In FY90, more than three-quarters
of EPA's budget was applied to contracts, grants, loans, cooperative
agreements, and interagency agreements. However, EPA's system of
managing these functions has not changed in more than two decades,
and management responsibilities are divided among different EPA
offices.
The Superfund program relies upon a complex mix of these
extramural techniques to accomplish its mission. However, no focal
point for coordinated management of these techniques exists within
EPA.
Overall, the decentralized contracting process is working; over
900 active work assignments are underway. Yet ARCS contracting
activities are not viewed systematically within EPA. Ineffective
information flows, inadequate coordination, and the need for improved
staff training and development characterize EPA's management of
ARCS contracts.
Recommendations
1. EPA should establish a Superfund Acquisition Program
Manager who reports directly to the Assistant
Administrator responsible for overseeing Superfund
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acquisition decisions and activities. The initial major
responsibility of the new manager should be to address
problems related to the management of ARCS contracts.
2. EPA should examine the division of headquarters and
regional management responsibilities to identify the steps
needed to create an effective mechanism for monitoring,
evaluation, and formulating ARCS policy. An
implementation plan based on the results of this
examination should be submitted to the Administrator
within the next 120 days.
3. Total Quality Management (TQM) concepts should be
employed to establish an ARCS Council consisting of
headquarters and regional personnel and ARCS contractor
representatives. This council should meet regularly to
identify and implement improvements in ARCS contract
management.
4. EPA should support successful ARCS contract
management by creating regional management teams
consisting of contracting officers, technical staff, and
supervisors. These teams should be encouraged to report
back to the ARCS Council with recommendations for
increased efficiencies in ARCS contract management.
5. EPA should establish a coordinated ARCS management
information program to serve regions and headquarters.
This program should utilize information systems already
existing or designed.
6. EPA should direct the newly created Superfund
Acquisition Program Manager to design and deliver to
each region a tailored employee development/training
program for ARCS personnel. This program should
provide specific skills and knowledge that the ARCS
contracting officers, project officers, and remedial project
managers must have to operate effectively and efficiently.
7. Following the Region V model for utilizing the TQM
process as a training tool, Regional Administrators should
form ARCS regional and contractor personnel into teams
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that address ARCS issues from a unified, strategic, quality
improvement perspective.
8. Within 60 days EPA should evaluate the feasibility of
establishing an Office of Acquisition Management.
Responsibilities of this office would include:
• Policy leadership, monitoring, operations, systems
evaluation, and human resources development
related to procurement, financial assistance, and
interagency agreements; and
• Policy leadership on major systems acquisition for
the Agency.
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TASK FORCE MEMBERSHIP
Chairman: Thomas P. Dunne
Acting Associate Administrator
Office of Regional Operations and State/Local Relations
Allyn M. Davis, Director
Hazardous Waste Division, Region VI
Scott Fulton, Senior Enforcement Counsel
Office of Enforcement
Richard Guimond, Deputy Assistant Administrator
Office of Solid Waste and Emergency Response
Edward J. Hanley, Deputy Assistant Administrator
Office of Administration and Resources Management
Bernard (Chip) Landman, Special Assistant
Office of the Administrator
Patricia L. Meaney, Assistant Regional Administrator
Planning and Management, Region I
Patrick M. Tobin, Deputy Regional Administrator
Region IV
Anna H. Virbick, Deputy Inspector General
Office of the Inspector General
Gerald H. Yamada, Principal Deputy General Counsel
Office of General Counsel
ex officio: Henry L. Longest II, Director
Office of Emergency and Remedial Response,
Office of Solid Waste and Emergency Response
David J. O'Connor, Director
Procurement and Contracts Management Division,
Office of Administration and Resources Management
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Thomas L. Hadd
Stephen E. Martin
Jessica Barren
Inez L. Artico
Anthony Audia
Fredella F. Baylor
Eve Boss
Celestina J. Browne
John Comstock
Robert G. Courson
Bernadine Davis
Bettina B. Fletcher
Carl S. Gagliardi
Linda L. Garczynski
Frederick C. Garman
Ulrike A. Joiner
Paul A. Martin
Barbara S. McDonough
Paul F. Nadeau
Thomas L. Super
Carolyn Thompson
Chris C. Tirpak
William R. Topping
Betty Waldron
Mark H. Walker
Alan L. Wehmeyer
Nancy W. Wentworth
Steven E. Young
Avital G. Zemel
David Zeni
PROJECT STAFF
Project Coordinator
Office of Research and Development
Deputy Project Coordinator
Office of Research and Development
Principal Editor
Office of Administration and Resources
Management, Cincinnati
Office of Regional Operations and State/Local
Relations (OROSLR)
Region V Planning and Management Division
OROSLR
Region VI Hazardous Waste Division
OROSLR
Office of Solid Waste and Emergency Response
(OSWER)
Region X Environmental Services Division
Office of Administration and Resources
Management (OARM)
OROSLR
Office of Communications and Public Affairs
OSWER
OARM
OARM
OARM
OSWER
OSWER
Office of the Administrator
Region IV Waste Management Division
Office of Pesticides and Toxic Substances
(OPTS)
OARM
Office of Research and Development (ORD)
OARM
Region VII Waste Management Division
ORD
OPTS
Office of General Counsel
Region I Planning and Management Division
We would like to acknowledge the extensive support received by the task
force from the EPA regional offices, headquarters offices and the Washington
Information Center.
xxvi
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SECTION I
INTRODUCTION
In June 1991, a task force was established to address allegations
about the U.S. Environmental Protection Agency's management of
contracts developed under the Alternative Remedial Contracting Strategy
(ARCS), a contract strategy designed to correct deficiencies in an
earlier generation of Superfund contracts (see Section II —
Background). The allegations suggested that excessive program
management costs had been incurred during the life of the ARCS
contracts; that the capacity built into these contracts predisposed them
toward certain abuses; that control and audit functions designed into the
system to protect against fraud, waste, and abuse had been either
misapplied or under-utilized; and that the award fee mechanism
structured into these contracts to reward superior performance was not
working to realize this goal.
The task force was directed to address the following questions:
1. Are the allegations of waste which have been
reported fair and accurate? Is a fuller, more
detailed inquiry warranted?
2. To the extent that any alleged problems were or are
evident, has the Agency taken the necessary steps
to assure that the problems are fully addressed? Is
the oversight and monitoring of ARCS adequate?
If not, what steps does the task force recommend?
3. Given the success of EPA's "enforcement first"
strategy and the corresponding increase in
responsible party performance of Superfund
cleanups, is ARCS still an appropriate approach for
the Superfund program? Are adjustments to the
size of the program appropriate?
The organization established to respond to these questions
consisted of a task force of ten senior career Agency officials
representing headquarters and the regions and a project staff of
professional career personnel from across the Agency.
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The pertinent issues were assessed to determine what information
was needed for the Agency's response. The issues fell into three
primary categories:
• Processes used to manage and oversee the contracts
and the contractors;
• Relative distribution of expenditures to:
a. contractor program management;
b. level of effort (LOE) assigned to
remedial work; and
c. use of subcontracting; and
• Alternative approaches to providing the support
currently provided by the ARCS contractors.
Because the task force members wanted to perform a thorough
review of the issues related to the ARCS contracts, they briefed the
relevant Congressional committees on the concerns that had been
identified and solicited additional issues to be incorporated into the
study design. The task force also met with senior officials at the
General Accounting Office (GAO) to learn about the results of their
reviews of the Superfund contracting program and any issues that GAO
felt should be addressed in this study.
The task force recognized that the information needed to respond
to many of the identified issues would be found in the EPA regions,
and arrangements were made for project staff to visit each of the
regional offices. Prior to the regional visits, the project staff developed
an interview guide that outlined the information necessary for a
response to the issues, including definitions of roles and responsibilities
and processes for managing administration and utilization of these
contracts.
The project staff scheduled interviews with regional personnel
who play significant roles in management and oversight of the ARCS
contracts. In each region, meetings were held with:
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• The Regional Administrator, Deputy Regional
Administrator, and Associate Regional Administrator
(the senior Agency decision-makers);
• The Hazardous Waste Division director and
Superfund branch chief (who are responsible for the
region's implementation of the Superfund program
and the ARCS contracts);
• The contracting officers (who are responsible for
contract administration):
• The project officers (who are responsible for the
technical management of the contract):
• Work assignment managers (generally remedial
project managers, who are responsible for the site-
specific remedial projects and have major
interactions with the ARCS contractors); and
• Selected ARCS contractors.
Across the country, the project staff met with over 100 regional
personnel and 12 of the ARCS contractors.
The discussions with the regional staff were designed to obtain
information that would respond to the interview guide questions in an
interactive manner; the guide was not used as a questionnaire but as a
framework for the interviews, the goal being to keep the interview
structure flexible enough to capture important information on program
management controls and innovations that were not directly addressed
by the guide.
The regional visits yielded a wealth of information on how
ARCS contracts were designed and are being implemented across the
country. Discussions were also held with personnel in the Office of
Emergency and Remedial Response (OERR) and the Procurement and
Contracts Management Division (PCMD), Office of Administration and
Resources Management to learn about the processes they had
established for national oversight of the ARCS program. The
information gained from these exchanges reveals the complexity of the
system of ARCS contracts and points up the need for thorough analysis
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of ARCS contract design and evaluation of management processes
supporting the program.
This report is organized to present the context of ARCS, to
address each of the issues in detail, to highlight the findings, and to
propose recommendations. Section II describes the background of
ARCS and places this contract strategy in the context of the entire
Superfund program. Section III addresses each of the substantive
issues identified in the task force review. The subsections are devoted
to program management, capacity and utilization, controls, financial
audits and reviews, award fee process, and management processes and
organization. Findings and recommendations are highlighted. Section
IV, the Appendix, provides data used by the task force.
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SECTION II
BACKGROUND
A. SUPERFUND PROGRAM DESCRIPTION
Statutory Authority
The Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) gives the U.S. Environmental Protection
Agency (EPA) the authority and necessary tools to respond directly to
releases or threatened releases of hazardous substances that may
endanger public health, welfare or the environment or to take legal
action to compel parties responsible for causing the contamination to
clean up those sites or reimburse the Superfund for the costs of clean-
up. If those responsible for site contamination cannot be found or are
unwilling or unable to clean up a site, EPA can use monies from the
Superfund trust fund to clean it up.
The law authorizes two kinds of response actions:
• Short-term removals where actions may be taken to
address releases or threats of releases requiring prompt
response; and
• Long-term remedial responses that permanently and
significantly reduce the danger associated with releases of
hazardous substances that are serious but not immediately
life threatening.
Remedial and removal responses include, but are not limited to:
• Destroying, detoxifying or immobilizing the hazardous
substances on the site through incineration or other
treatment technologies;
• Containing the substances on site so that they can safely
remain there and present no future threat;
• Removing the materials from the site to an EPA-approved,
licensed hazardous waste facility for treatment,
containment, or destruction; and
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• Identifying and restoring contaminated ground water,
halting further spread of the contaminants, or, in some
circumstances, providing an alternate source of drinking
water.
When CERCLA was passed, it was intended as a direct and
limited effort to clean up the nation's hazardous waste sites. Congress
recognized that EPA could not address all sites, and therefore directed
it to set priorities for federal action under Superfund. At the time, it
was expected that the $1.6 billion Superfund was sufficient to clean up
the priority sites. Few realized the size of the problem until EPA
began the process of site discovery and site evaluation. Not hundreds,
but thousands of potential hazardous waste sites existed, and they
presented some of the most complex pollution problems the nation had
ever faced.
As site discoveries grew, cost estimates rose. Realizing the
long-term nature of the problem and the enormous job ahead, Congress
reauthorized the program in 1986 for another five years, adding $8.5
billion to the Fund. The law, amended by the Superfund Amendments
and Reauthorization Act (SARA), was stricter, broader in scope, and
required that "to the maximum extent practicable" solutions make use
of alternative or resource recovery technologies and be permanent.
SARA:
• Expanded EPA's enforcement authority for compelling
participation by potentially responsible parties;
• Strengthened the partnership between the federal
government and state and local authorities, establishing a
minimum level of state participation in all phases of
CERCLA responses;
• Added a section dealing with release of hazardous
substances at federal facilities, clarifying that Superfund
applies to federal agencies;
• Established goals for the various components of the
Superfund program; and
• Required remedies at Superfund sites to comply with other
environmental laws and requirements.
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Superfund was again reauthorized without substantial changes in
1990, extending funding through 1994.
Identifying Hazardous Waste Sites and Setting Priorities
Short-term threats from hazardous substances are often
emergencies, ranging from accidental spills to serious public health or
environmental threats posed by long-standing hazardous waste problems.
EPA established and maintains response capabilities to these threats
under the Superfund removal program. The program may entail
removing contaminants from the area for treatment or disposal in a
safe, approved manner or reducing or eliminating immediate threats
from contamination of the ah", soil, and water; it may also involve
reducing the cost of any necessary long-term clean-up by controlling
the migration of contaminants. To date EPA has performed more than
2,400 emergency clean-ups.
In addition to responding to emergencies, pursuant to CERCLA,
EPA established a National Priorities List (NPL) to identify the worst
sites and set priorities for clean-up. Although the Superfund program
responds to hazardous substance emergencies wherever they occur, only
sites listed on the NPL are eligible for clean-up under the Superfund
remedial program.
The NPL sets clean-up priorities from among the approximately
34,000 potential hazardous waste sites identified to date by EPA, states,
communities and citizens. Once a site is discovered, it enters the
Superfund screening process for evaluation and, if warranted, action.
Historically about 2,000 new sites are added to the evaluation inventory
each year. The screening process, the status of which is shown in
Figure 1, begins with a preliminary assessment and if needed (about 40
percent of the sites are eliminated from further consideration at this
point) progresses to a more detailed site investigation. This can result,
again if warranted, in a package of data used to "score" the site with
the Hazard Ranking System, EPA's method of ranking the relative
hazard at sites for placement on the NPL. Relatively few (about 5
percent of the 21,000 sites that have been fully assessed to date) make
it onto the NPL and move forward into the long-term clean-up
program.
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CD
8
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The Remedial Process
Figure 2 shows the remedial process that ensues when a site is
listed on the NPL. (See Appendix for a regional profile.) In the first
phase, called the Remedial Investigation/Feasibility Study (RI/FS),
detailed investigations are conducted to assess what contaminants are
present, how serious the contamination is, and what potential risks there
are to the community. Studies are also done to determine which clean-
up methods may be most effective. This process can take 18 to 39
months, and the average cost of a study is about $1 million. Before
beginning the RI/FS, EPA negotiates with potentially responsible parties
(PRPs) to encourage them to perform the RI/FS under EPA oversight.
Based upon the RI/FS, EPA considers alternatives and develops
a proposed plan in which clean-up alternatives are described and
compared. Once the studies are complete there is a public comment
period on EPA's proposed clean-up plan. The remedy is then selected
by EPA and documented in the Record of Decision (ROD).
The period following the signing of the ROD is one of
negotiation with PRPs regarding who will conduct the remedy at the
site. EPA issues Special Notice letters to PRPs at this time, beginning
a formal period of negotiation with the PRPs for site clean-up. The
special notice letter establishes a 60- to 120-day moratorium during
which EPA will not begin cleaning up the site. If PRPs decline to
participate, or the time for negotiating a settlement runs out, EPA may
issue a unilateral administrative order for clean-up or begin cleaning up
the site using trust fund money.
After negotiations with the PRPs, a remedial design (RD) is
prepared outlining the plans and specifications to implement the clean-
up technology chosen in the ROD. Development of this design takes
12 to 18 months and costs an average of $1 million. Actual clean-up,
called remedial action (RA), follows. Depending on the method used,
construction, shakedown and operation may take from one to six years.
Restoring ground water may take longer.
Even after clean-up, many sites require the maintenance of in-
place technologies, e.g., caps or leachate treatment systems. Deletion
from the NPL is the final step in the remedial process. In a
requirement separate from NPL deletion, certain sites are reviewed after
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Figure 2
SUPERFUND REMEDIAL STATUS
National Priorities List: 1207*
(NPL Sites)
Engineering Studies Started: 1096
(Remedial Investigation/Feasibility Study)
Remedies Selected: 590
(Record of Decision Signed)
Remedial Designs Started: 478
Construction Started: 320
Remedial Action Projects Completed: 149
Total Construction Work at NPL Sites Completed: 6 3
* Proposed and Final Sites
Source: OSWER National Perspective: Superfund 3/91
10
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five years to ensure that the clean-up technologies applied to them
continue to meet objectives. EPA attempts to recover all expenditures
at a site at the completion of clean-up activities.
The federal government has historically been criticized for not
involving the public in many of the projects it has undertaken;
therefore, Congress included requirements for public participation in
most steps of the Superfund program. Tentative decisions regarding a
site are issued for public comment and many are made in concert with
the communities surrounding a site.
Managing the Superfund Program
EPA's organizational structure for dealing with Superfund
involves a headquarters office in Washington to establish policy and
provide national program direction; the implementation of the program
is delegated to EPA's ten regions. During the first years of the
program, the majority of decisions were made at headquarters or
required headquarters concurrence. As the program matured and more
sites made their way into the Superfund pipeline, the workload
increased. The decision was then made to delegate more authority to
the regions in order to speed up the program; e.g., Records of Decision
could be signed by the Regional Administrator, eliminating what was
sometimes a lengthy headquarters review. Delegation of more authority
to the regions also placed implementation decisions in the hands of
staff involved in day-to-day site activities.
Options for Remedial Project Implementation
Option 1: Potentially Responsible Parties
CERCLA (Section 104) authorized that potentially responsible
parties perform remedial projects as part of the comprehensive
liability/enforcement provisions. Specific language authorizes the
President to take action "unless ... remedial action will be done
properly" by an PRP. These provisions were initially implemented for
remedial design and remedial action (RD/RA) projects based on the
Agency's selection of remedy decision. The approach was
subsequently expanded to include the RI/FS phase, with the Agency
retaining selection of remedy authority. This approach was further
endorsed by SARA (Section 12.2 - Settlements), which requires the
11
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President to "act to facilitate settlements" with PRPs. SARA
introduced special notice procedures and formal moratorium periods for
negotiations with PRPs before initiating Fund-financed RI/FS and
RD/RA projects, as well as other tools to encourage PRP participation.
The Agency's stance in implementing this approach was
manifested in the Superfund Management Review (SMR), also called
the 90-day Study (prepared in 1989), which strongly emphasizes
enforcement to induce PRPs to conduct more clean-ups. The SMR
also establishes a "One Superfund Program" philosophy, in which PRP
commitments are sought first but Fund dollars are spent if the PRPs
are unwilling or unable to perform the work. Finally, the SMR
encourages the use of the tools provided in SARA to encourage
settlements without compromising environmental goals.
Responsibility for monitoring PRP projects is split in
headquarters between the Office of Waste Programs Enforcement
(OWPE) and the Office of Emergency and Remedial Response
(OERR). OWPE oversees projects from the RI/FS phase through the
selection of remedy. OWPE, in consultation with the Office of
Enforcement, is also responsible for all enforcement policy and for
monitoring all negotiations, including those for RD/RA settlements.
OERR is responsible for oversight and compliance monitoring of
RD/RA projects. This split was made in 1988 to centralize
construction management expertise in one organization. This distinction
does not exist in the regions, where management of Fund and PRP
projects is vested in the same division, and often with the same
remedial project managers (RPMs).
PRPs perform projects under several types of agreement that
define scopes of work, EPA and PRP roles and responsibilities, and
other provisions. Generally, projects are actually performed by
contractors (consultants, Architectural and Engineering (A-E) firms, and
constructors) under the direction of the PRPs. Oversight of the PRP
work is required by SARA (Section 104) and is performed by regional
offices. Oversight support is available from Technical Enforcement
Support (TES) contracts during the RI/FS phase and from ARCS or the
US Army Corps of Engineers (Corps) during the RD/RA phase.
Monitoring may include on-site examination of the work, review of all
reports, and parallel sampling and analysis to ensure accuracy. OWPE
and OERR have each issued guidance on oversight requirements for the
regions.
12
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The value of work performed by PRPs has increased annually
since the enactment of SARA. Figure 3 shows the value of PRP
settlements achieved annually for fiscal year (FY) 87 through FY90.
Table 1 shows the percent of projects that PRPs have initiated by type
of project and fiscal year. Expected accomplishments for FY91 should
show PRP starts in the 60-70 percent range for each activity. This
probably reflects a steady state that can be expected over the next
several years.
TABLE 1. PERCENT OF PRP PROJECT STARTS BY ACTIVITY
ACTIVITY
RI/FS
RD
RA
FY87
30%
27%
38%
88
43%
31%
32%
89
52%
65%
46%
90
49%
62%
57%
(From: CERCLIS: MGMNT 06; Federal Facility and Other Sites Excluded)
Option 2: States
The Superfund statute mandates a direct role for the States in the
remedial process. CERCLA (Section 104(c)) required three state
assurances as a precondition for Fund-financed remedial action. SARA
(Section 121(f)) expanded the CERCLA requirements to include a
"...substantial and meaningful involvement by each State in initiation,
development, and selection of remedial actions to be undertaken in that
State." States can also assume the lead for conducting RI/FS and
RD/RA projects. Most requests for state lead are approved by the
regions, and support mechanisms have been implemented to help states
build participation in the remedial process.
The majority of NPL sites are discovered by state officials and
states have a vested interest in seeing that sites in their locale are
cleaned up. Many sites that do not make the NPL are addressed by
states. In addition, states are financially tied to Superfund, because the
law requires them to contribute at least 10 percent of EPA's costs for
remedial action at NPL sites within their borders. States also conduct
the operation and maintenance required after a site is remediated and
play a crucial role in identifying clean-up standards and reviewing
13
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proposed remedies. Some states have developed either their own
Superfund programs or sufficient capability to expand their role in the
Superfund process. As a result, EPA expects that states will continue
to enhance their participation in the Superfund program.
State-lead projects are performed under a cooperative agreement
(CA) which is jointly executed with EPA. The CA describes the work
to be performed by the state, the project budget and schedule, and a
series of special conditions that guide the performance of the work.
Projects are executed by contractors retained by the state, generally for
that specific site. Oversight is maintained by the cognizant regional
office to ensure conformance with the CA and consistency with
program policy and guidance. EPA retains the responsibility for the
selection of remedy decision, although states can assist with preparation
of the Record of Decision and provide a recommendation for EPA
concurrence.
The number of state-lead projects has fluctuated since the
enactment of CERCLA. Table 2 reflects the post-SARA data, which
indicate a gradual decrease in state-lead projects. These trends are
supported by anecdotal information suggesting that the states are
increasingly focusing their resources on non-NPL sites or state
enforcement sites where there is less overlap with EPA activities.
Efforts are underway to define which long-term state roles affect the
level of state-lead activity.
TABLE 2. STATE-LEAD PROJECT STARTS BY ACTIVITY AND FISCAL YEAR
ACTIVITY
RI/FS
RD
RA
' Projections only
FY87
22
22
11
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16
15
9
89
11
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12
90
10
4
7
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5
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Option 3: EPA-Lead Projects
EPA-lead has become the project delivery option "of last resort"
after providing opportunities for potentially responsible parties and
states to assume a project lead. However, it has been the most
frequently used option for remedial projects to date. EPA-lead projects
15
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are conducted through contracts managed directly by the Agency, and
through interagency agreements with other federal agencies. These
vehicles are discussed in detail in subsequent sections of this report.
EPA also has experimented with performing remedial projects with in-
house employees. Efforts to date have focused primarily on the RI/FS
phase of the process. Although very resource intensive, these projects
have served as a useful training opportunity for Agency remedial
project managers.
Superfund Progress
In the early days of Superfund, progress was slow, as policies
and procedures were developed and the identification and
characterization of sites began. Expertise in hazardous waste clean-up
was limited, and clean-up technologies were virtually non-existent.
After he was appointed the head of the Superfund program in 1984,
Lee Thomas made key decisions to speed up the program. Delays in
CERCLA's reauthorization by Congress severely curtailed Superfund
activities in 1985 and 1986, as taxing authority ran out and remaining
funds were carefully rationed.
Following reauthorization in October 1986, EPA faced a growing
list of increasingly complex sites in a situation characterized by
incomplete knowledge, immature technology, and relentless pressure on
limited resources. However, earlier efforts began to deliver results.
Figure 4 indicates that more clean-ups were started in 1987, after the
Superfund law was amended, than in any previous year and that it
takes approximately ten years for a site to go from discovery through
the clean-up phase. Although interim steps have been completed, it is
only within the last few years that sites have come out the other end
of the "pipeline" of NPL sites awaiting final clean-up.
In 1989, EPA Administrator William K. Reilly commissioned an
evaluation of Superfund which became known as the 90-day Study. It
established a new Superfund strategy, including the use of "enforcement
first" to compel private-party responses, make sites safer by controlling
acute threats immediately, make sites cleaner by addressing the worst
sites and worst problems first, and develop new technologies for more
effective clean-ups.
16
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The new strategy has resulted in the following:
• All Superfund sites have been assessed for immediate risk,
and action has been taken where necessary.
• Work has begun at almost 90 percent of over 1,200
Superfund sites on the National Priorities List (NPL).
• Almost 700 construction projects at 500 NPL sites are
being readied for start-up. Each year, 150 projects
representing 100 sites join the construction pipeline.
• Roughly 350 clean-up projects are being designed.
• PRPs are now doing about 60 percent of new clean-ups,
under EPA supervision.
• Treatment technologies are being employed in over 70
percent of the projects to control hazardous waste sources.
Overall, work has accelerated and the pipeline is full.
As Superfund enters the nineties, the challenges facing it include:
• Forecasting and planning the investigation and clean-up
workload in the Superfund pipeline to maintain a steady
program;
• Finding the right technologies to address site
contamination;
• Continuing to refine and institutionalize the clean-up
process in order to perform work as efficiently as
possible;
• Reducing overall time required for site investigation and
remediation by two to three years;
• Using the first ten years of Superfund experience to
achieve more in the next ten; and
18
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Improving public communication on the scope and
administration of the program.
B. REMEDIAL CONTRACTING HISTORY
Contractors have conducted the bulk of the pre-remedial,
remedial and removal projects that comprise the Superfund pipeline.
The decision to rely on contractors for project execution was made in
1981 and was predicated on the belief that Superfund would be a short-
term program (it was authorized for five years initially) that did not
warrant the buildup of a large federal workforce. Private contractors
are used for several reasons. First, they provide a flexible workforce
that can be adjusted to meet changing needs, both technically and in
size. Second, contracts make accessible expertise unavailable within
the government workforce; e.g., a specialized firm may have the know-
how needed to implement a particular technology at a hazardous waste
site. Third, using contractors to perform work may be less expensive
than using an in-house workforce; e.g., a contractor may already have
made capital expenditures, thereby reducing the cost of doing business,
whereas EPA would need to make such capital expenditures before
performing the work itself.
Specific Superfund contract programs include: the Field
Investigation Team (FIT) for conducting pre-remedial preliminary
assessments and site inspections; Technical Assistance Teams (TAT) for
removal assessment and oversight support; Emergency Response
Contract Strategy (ERCS) for removal actions; Technical Enforcement
Support (TES) for enforcement support and oversight of potentially
responsible parties; Contract Laboratory Program (CLP) for analyzing
samples; and the Remedial (REM) and Alternative Remedial
Contracting Strategy (ARCS) for remedial projects.
Remedial (REM) Contracts
In 1981, the first three Interim Remedial Contracts were awarded
in order to conduct RI/FSs and provide limited remedial design support
pending a decision on a long-term contracting approach and on the
involvement of the Corps. Each contract was assigned to a specific
group of regions or zones. Specifics on these contracts are provided in
Table 3.
19
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The two REM/FIT contracts awarded in 1982 were the first
major contracts to support the remedial program. These combined the
remedial (REM) and pre-remedial (FIT) components to generate
"economies of scale" and to promote a smooth transition between pre-
remedial and remedial projects. These contracts proved effective;
however, as the program grew it became unwieldy to combine both
functions within single contracts, and a decision was made to split the
remedial and FIT requirements for purposes of recompetition.
In 1984, the REM contracts followed and REM 2 was awarded
to meet a capacity shortfall on the remedial side of the REM/FIT
contracts. This contract was designed to work in all ten regions. The
REM 3 and 4 contracts were awarded in 1985 and replaced the
remedial portion of the REM/FIT contracts. Follow-on FIT contracts
were awarded in 1986. The three large REM contracts were
augmented by two small contracts (REM 5 and 6), which were
awarded to minority business enterprises.
REM contracts were designed principally to investigate and
characterize hazardous waste sites and examine viable clean-up
alternatives (conduct the RI/FS). They also included limited capability
for preparing design specifications (RDs) and implementing construction
(RAs) of selected remedies. RD/RA capability was limited, as most of
the program's RD/RA work was performed by the Corps. EPA
anticipated using REMs for RD/RA only in emergencies, e.g. for
installation of a water main for residents whose well water had been
contaminated.
C. ARCS CONTRACT CHARACTERIZATION
Purpose and Program Objectives
The ARCS represents a new approach designed to mitigate
problems experienced under the REMs and to improve project and
program management.
The following principal goals were incorporated into the ARCS
contract structure:
1. Provide full service capability to allow project
continuity from RI/FS through RA;
21
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2. Increase competition for contract awards and
involve more firms in the program;
3. Delegate contract responsibility and authority to the
regions; and
4. Establish incentives to foster superior performance.
These four goals are described in the following subsections.
Project Continuity
The REM approach required a transfer of projects from EPA
contractors to Corps contractors, resulting in clean-up delays that were
attributable to the need of follow-on contractors to familiarize
themselves with previous work performed. The ARCS contracts were
designed to correct this problem by limiting hand-offs from contractor
to contractor and reinforcing accountability. ARCS contracts offer a
full-service capability from RI/FS through RD and construction
management.
Competition for Contract Award
The REM contracts were among the largest in EPA's history.
Each had a potential value between 100 million and 200 million dollars
and required extensive geographical coverage. Given the magnitude of
these contracts, only large engineering firms with extensive capability
could handle them.
From FY83 through FY88, the remedial program obtained
engineering support from five REM contracts held by four contractors
and the Corps. Continual expansion of sites on the NPL, together with
the passage of the Superfund Amendments and Reauthorization Act in
FY87, caused the program to experience a severe contract capacity
shortage and a need to broaden its base of firms which could perform
hazardous waste remediation.
The ARCS contracts addressed this situation in several ways.
First, where possible, contracts were awarded on a regional basis. In
those regions where the projected workload was not sufficient to
support dedicated contracts, regions were combined to form zones.
Second, within each region or zone, multiple contracts were awarded.
22
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Since the strategy looked toward removing contractors from the
program for deficient performance, contracts were awarded in excess of
projected workload needs. This approach was also thought to be a
potential palliative to future capacity shortages. Third, to effectively
increase competition, two different size contracts were offered, one for
small to mid-size firms and one for large firms. Further, all firms
were instructed to propose on only one contract size per region or
zone. Thus, no contractor could receive more than one contract in a
given region or zone. Finally, the evaluation criteria for contractor
selection were structured to minimize the advantages of incumbency,
yet obtain qualified contractors.
Delegation to the Regions
Management of the REMs was centralized at EPA headquarters,
where contract management oversight responsibilities were retained.
Among these were the authority to assign and fund all work, approve
all subcontracts, issue contract modifications, determine the quality of
contractor performance through the award fee evaluation process, and
balance competing regional needs for additional contract capacity.
Even though regional offices were involved in these activities to some
degree, they did not possess contracting officer or project officer
authority. The regions primarily managed site-specific contractor
performance and reported its quality to headquarters. This approach
required constant coordination between regional, headquarters, and
contractor staff, forced contractors to be accountable to two clients, and
distanced decision making and responsibility from the source of
information and the end user respectively.
The ARCS contracts were predicated on the complete delegation
of contract management authority and responsibility to the regional
offices. Specifically, each regional office or zone would receive
contracting officer and project officer authority, would be responsible
for all aspects of contract management, and would determine the
quality of contractor performance.
Enhanced Performance Incentives
In July 1988, the GAO completed an extensive review of the
REM contracts. GAO's findings demonstrated a need for EPA to
exercise better control over costs and improve the award fee process to
maximize contractor performance. Long before release of this report,
23
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Agency managers were aware of GAO's findings based upon auditor
inquiries and requests for documentation and explanations.
ARCS contracts were designed to address these problems. One
primary objective of the ARCS was the establishment of a dual-track
incentive program which is effected through an award fee process that
documents the quality and efficiency of contractor performance and
exercises options for additional work based on high performance. The
ARCS program also transferred the award-fee decision process to the
regions in order to facilitate a more accurate determination of the
quality and value of contractor services.
ARCS Contract Structure
ARCS contracts contain two principal areas of activity: program
management and remedial activities. Program management constitutes
those technical and administrative functions which are required to
support the delivery of the technical hours. Remedial activities are
those associated with site management, remedial investigations/
feasibility studies, and all engineering services in design and execution
of a remedy. These areas will be discussed specifically in Section III.
A summary of the planned expenditures under the ARCS contracts is
shown in the Appendix.
Contract Sizes
One of the primary goals of ARCS was to enhance competition
and increase the number of remedial action contractors available to the
Agency. Given the regional nature of the ARCS procurements, the
Agency sought to enhance the opportunity of smaller, regionally based
A-E firms to participate in the competitive process. Thus, each
solicitation requested that offerers propose on smaller and larger
contracts. The actual sizes of these in terms of level-of-effort (LOE)
hours to be procured varied among the solicitations depending on the
individual annual LOE needs of each region/zone.
The smaller contract provided for a minimum delivery amount in
LOE hours that was half of the minimum delivery amount provided in
the matching large contract. The annual maximum LOE delivery rate
for the small contract varied by region/zone from one quarter to one
half of the annual delivery for the matching large contract. Finally, the
24
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total maximum LOE amount to be delivered under the small contract
varied by region/zone from about one half to one quarter of the total
maximum LOE amount under the matching large contract.
Table 4 indicates the actual sizes of the small and large contracts
procured in each region/zone. The variance in region/zone needs is
reflected in the two sizes of "small" contracts and the three sizes of
"large" contracts procured. Table 5 shows the distribution of small and
large contracts procured in each region/zone and the maximum annual
delivery rate of LOE hours available to each region/zone.
TABLE 4. CONTRACT SIZES
Region/
Zone
IV
V
ARCS-Central
ARCS-West
Small
Contract In LOE Hours
MinVAnnual max/Total max
25,000 25,000 145,000
25,000 25,000 145,000
25,000 25,000 145,000
25,000 25,000 145,000
25,000 25,000 145,000
25,000 25,000 145,000
35,000 35,000 200,000
Large
Contract In LOE Hours
MinJAnnual max/Total max
50,000 50,000 300,000
50,000 100,000 560,000
50,000 100,000 560,000
50,000 50,000 300,000
50,000 100,000 560,000
50,000 50,000 300,000
70,000 140,000 780,000
TABLE 5. DISTRIBUTION OF SMALL AND LARGE CONTRACTS BY REGION/ZONE
No. of
Region/Zone
I
IV
V
ARCS-Central
ARCS-West
TOTALS
No. of
Large Contracts
3
3
2
5
5
7
4
29
Total Annual Max
Small Contracts
4
3
3
1
2
1
2
16
Base
Capacity (LOE)
250,000 HOURS
375,000 HOURS
275,000 HOURS
275,000 HOURS
550,000 HOURS
375,000 HOURS
630,000 HOURS
2,730,000 HOURS
25
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ARCS Procurement Cycles
The ARCS were procured in three individual cycles from the
issuance of the first solicitation in May 1987 to the award of the final
ARCS contract in June 1989.
Cycle I included solicitations for Regions III and V. The
solicitations were issued on May 8, 1987 and offers were received on
June 8, 1987. In Region III, five ARCS contracts were awarded
between January 1, 1988 and June 29, 1988. In Region V, seven
ARCS contracts were awarded between February 1, 1988 and June 29,
1988.
Cycle II included solicitations for Regions I and II and the zone
of Regions VI, VII and VIII (ARCS-Central). These were issued on
October 23, 1987 and offers were received on November 23, 1987. In
Region I, seven ARCS contracts were awarded between September 16,
1988 and April 15, 1989. In Region II, six contracts were awarded
between September 6, 1988 and May 26, 1989. In ARCS-Central,
eight contracts were awarded between September 13, 1988 and May 26,
1989.
Cycle III included solicitations for Region IV and the zone of
Regions IX and X (ARCS-West). These were issued on April 8, 1988
and offers were received on May 8, 1988. In Region IV, six contracts
were awarded between May 25, 1989 and June 22, 1989. In ARCS-
West, six contracts were awarded between March 10, 1989 and June
28, 1989.
Completion of the three cycles of ARCS procurements resulted
in the award of 45 contracts to 23 prime contractors. The prime
contracts provided for the potential participation of 115 team
subcontractors, 49 of which were small businesses or small
disadvantaged business enterprises.
Table 6 identifies the ARCS prime contractors and indicates the
number and distribution of prime contracts by region/zone. Table 7
shows the number and distribution of ARCS prime contractors and
potential team subcontractors by region/zone and identifies the number
of large businesses, small businesses and small disadvantaged business
enterprises participating as team subcontractors.
26
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TABLE 6. NUMBER AND DISTRIBUTION OF ARCS PRIME CONTRACTORS
No. of
ARCS Prime Contractors Contracts
1. COM Federal Programs 4
2. Ebasco Services, Inc. 3
3. Arthur D. Little 1
4. Metcalf & Eddy 1
5. NUS Corporation 2
6. TRC Companies 1
7. Roy F. Weston 6
8. ICF Technology 2
9. Malcolm Pirnie 1
10. TAMS Consultants 1
11. Black & Veatch, Inc. 3
12. CH2M Hill, Inc. 5
13. Ecology & Environment 3
14. Tetra Tech, Inc. 1
15. Bechtel Environmental 2
16. Donohue & Associates 1
17. PRC Corporation 1
18. WW Engineering 1
19. Fluor Daniel, Inc. 1
20. Jacobs Engineering 1
21. Morrison Knudson 1
22. Sverdrup 1
23. URS Consultants 2
Dist. By Region/Zone
, II, IV. ARCS-Central
, II, IV
II, IV, V, ARCS-Central, ARCS-West
ARCS-West
III, IV, V
III, IV, V, ARCS-Central, ARCS-West
III, V, ARCS-West
III
IV, ARCS-West
V
V
V
ARCS-Central
ARCS-Cenlral
ARCS-Central
ARCS-Central
ARCS-Central, ARCS-West
TOTAL ARCS PRIME CONTRACTORS: 23, TOTAL ARCS CONTRACTS: 45
TABLE 7. DISTRIBUTION OF ARCS PRIME AND TEAM SUBCONTRACTORS
Region/Zone
II
III
IV
V
ARCS-Central
ARCS-West
TOTAL
No. of ARCS
Prime Contractors
7
6
5
6
7
8
6
45
No. of
Team Subcontractors
25 (15LB/9SB/1SDBE)[*]
17 (10LB/6SB/1SDBE)
4 (2LB/2SB/OSDBE)
18 (12LB/4SB/2SDBE)
14 (7LB/6SB/1SDBE)
25 (14LB/10SB/1SDBE)
12 (6LB/6SB/OSDBE)
115
* (Large Business/Small Business/Small Disadvantaged Business)
27
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The Appendix identifies all ARCS prime contractors and
potential team subcontractors by region/zone and provides the size of
each concern in terms of large business, small business or small
disadvantaged business enterprise. It also contains a list of awarded
ARCS contracts which identifies each ARCS prime contractor and
provides information regarding individual contract numbers, potential
contract values, and performance periods.
D. FUTURE OF SUPERFUND CONTRACTING
As Superfund approached its tenth year, managers began looking
into the next decade to plan the future of Superfund contracting. EPA
completed a Long-Term Contract Strategy (LTCS) which provides the
framework for Superfund contracting through the 1990s. The LTCS
was formulated with the recognition that the day-to-day activities of
Superfund have been delegated to the regions and thus the majority of
Superfund contracts should be regional contracts designed to meet
regional needs and managed and overseen by regional staff. In
addition, the LTCS addressed potential vulnerabilities caused by the
lack of flexibility in the current contract structure, changes in program
direction, and the level of competition for Superfund contracts.
The LTCS Task Force delivered a final strategy document in
September 1990, and in December 1990 a joint strategy for
implementation was jointly issued by the key affected offices.
Comprehensive implementation plans are being developed for each
contract component. The implementation plans demonstrate an acute
awareness of the need to carefully plan the new contracts and reduce
vulnerabilities. Actions are specified by the implementation plans to
strengthen Superfund contracting in the areas of: training; definition of
roles and responsibilities; provision of policy, guidance and oversight;
automated information management; and contracting-specific issues
(e.g., award fee, size, number and types of contracts, program
management structure and costs, etc.). A headquarters and regional
advisory committee is monitoring the implementation progress.
28
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SECTION m
MAJOR ISSUES
INTRODUCTION
This section addresses each of the issue areas in a separate
subsection, presents findings and conclusions, and lays the background
for task force recommendations.
Subsection A, "ARCS Program Management," defines the
activities and appropriate costs that fall within this major category of
the ARCS contracts. It describes contractual obligations, invoicing, and
base and option funding. It projects the long-term trend of program
management costs within ARCS contracts as compared to similar costs
in earlier Superfund contracts.
Subsection B, "ARCS Capacity and Utilization," describes the
context of the decision to build excess capacity into the ARCS
contracts, analyzes the capacity of the subcontract pool, and explains
the options built into the contract vehicle.
Subsection C, "ARCS Contract Controls," deals with contract
management and administration in the decentralized ARCS setting, with
cost and technical performance monitoring, with the Federal Managers'
Financial Integrity Act (FMFTA), with management of government
property, and with appropriate roles and responsibilities for all who are
involved with the contract vehicle.
Subsection D, "ARCS Financial Audits and Reviews," defines
appropriate audits and reviews for the ARCS setting, describes how and
why ARCS has caused a growth in audit responsibility, and indicates
mechanisms for addressing this expanded responsibility.
Subsection E, "Award Fee Process," describes cost-plus-award-
fee contracts and their function in ARCS, the roles and responsibilities
of each participant in the contractor performance evaluation process, the
major components of performance evaluation, and the effectiveness of
this contract type.
Subsection F, "EPA Management Processes and Organization,"
describes the effect of decentralization on the exercise of
responsibilities under ARCS, the skill mix, training, and communication
29
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necessary for effective administration of ARCS, and ARCS in the
broader context of acquisition management within the Agency.
The Assistant Administrators for OSWER and OARM should be
directed to develop a detailed implementation plan for the
recommendations outlined in each subsection below and report quarterly
to the Administrator on the status of implementation.
30
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A. ARCS PROGRAM MANAGEMENT
Background
Each ARCS contract contains two elements for definition of
work to be provided by the contractors and to be used for the billing
of direct and indirect costs. These elements are "Program
Management" and "Remedial Planning." The program management
element was created to support the site-specific remedial work and
capture all costs that applied to multiple sites.
The program management component of the ARCS contracts
provides all support functions necessary to perform remedial site
activities under the contract on an ongoing basis for the duration of the
contract. Program management, as a contract element, is intended to
promote quicker turnaround on work assignments, encourage efficient
resolution of overall contract and site-specific problems, focus priorities,
and maximize resource sharing over all the work assignments.
The multi-site support costs incurred under program management
are to be allocated back to site-specific work assignments for purposes
of Superfund cost recovery. Because all appropriate clean-up costs
need to be recovered from responsible parties, the ARCS contracts
require contractors to review costs incurred under program management
annually and submit an allocation of appropriate costs to individual
sites. Allocation will allow cost recovery to include an equitable
portion of support costs as well as the site-specific clean-up costs.
Program management costs are invoiced as direct costs, e.g.,
labor, travel, and supplies, and as indirect costs, e.g., fringe benefits
and proportional corporate costs. The ARCS contracts generally
identify two types of indirect costs: overhead and G&A (general and
administrative). The rates and bases for applying the rates are
specified in each contract. Indirect costs are billed under each of the
ARCS contract elements.
The task force addressed two issues related to program
management:
31
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Issue 1
The term program management implies that all expenditures
billed to the program management cost category under the ARCS
contracts are for administrative or "overhead" activities.
Discussion
Program management constitutes an account under which all
costs not directly incurred on a remedial work assignment are
accumulated, billed and reported, allowing distribution of routine
remedial activity support costs over more than one site. These costs
can be segregated into contract administration support and technical
support. The contract administration activities are often referred to as
management costs in the private sector. The technical support activities
under ARCS contracts are actions that support Superfund remedial site
work but that benefit several sites rather than just one site.
ARCS contract administration support activities are basically
managerial and administrative in nature, including:
• Progress reporting;
• Invoicing and cost documentation;
• Required conflict of interest reviews;
• Management of team subcontractors;
• Records management to support cost recovery; and
• Subcontracting support; e.g., establishing prequalified
bidders lists for specialty services such as well drilling,
surveying, security, small business and minority business
participation.
The following are examples of ARCS technical support actions
that benefit remedial site work and apply to multiple sites:
• Quality assurance project reviews and audits;
• Equipment purchases, maintenance, storage and inventory;
32
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• Health and safety training and medical monitoring of
employees;
• Standard operating procedures to direct remedial activities;
and
• Pollution liability insurance.
ARCS contracts require contractors to review program
management costs annually to determine reasonableness and
appropriateness for allocation back to the remedial sites. EPA requested
the deferment of annual allocation submissions from the ARCS
contractors to allow for the revision of the contract clause that addresses
allocation. Revision of the clause was necessary to improve both the
accounting policies and the documentation concerning program
management costs.
Finding
In ARCS contracts, program management refers to a cost
accounting center that includes administrative and technical costs and was
established to support Superfund cost recovery and to focus management
attention on keeping such costs to a minimum.
Recommendations
• To provide for more accurate tracking of costs,
within 120 days, OSWER, in concert with OARM
and the regions, should develop guidance on
division of program management costs into
administrative and technical support.
• OARM should take the necessary actions to
complete, by December 1, 1991, guidance required
to allocate program management costs to site-
specific work assignments for purposes of cost
recovery.
• The Agency should revise the program
management concept for future contracts. Future
contracts should provide for separate accounting
33
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of start-up costs, contract administrative costs,
and other remedial support costs.
Issue 2
The amounts expended by contractors under program management
are high compared to current remedial work load and total contract
expenditures.
Discussion
Program management expenditures will be billed throughout the
life of these contracts and are incurred before and during remedial site
work. Initial program management expenditures compared to the
remedial planning expenditures were expected to be high while
contractors were preparing for remedial work assignments, to decline
after contract start-up, and then to fluctuate as the amount of remedial
work conducted varied. However, major equipment purchases or
purchase of pollution liability insurance can skew the anticipated trend
toward reduced costs.
The contractors had to be ready to perform shortly after contract
award. Therefore, start-up costs were incurred for the following
purposes:
• Organization and staffing;
• Standard plans for management, quality assurance, and
health and safety;
• Insurance and indemnification procedures;
• Negotiation and award of subcontracts;
• Development of field equipment needs and inventory
control guidelines; and
• Purchase of baseline equipment.
Actual expenditures for program management activities were
compiled nationally for this review. (See Appendix). The data were
34
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compiled as of May 31, 1991, and although the data base may be
incomplete, the general trends and overall conclusions suggested by the
data are considered to be valid.
The ARCS contracts were negotiated with a guaranteed base
amount of technical LOE hours in the remedial planning contract
element. It was expected that the base LOE hours would be delivered
within two years. An estimated level of program management
expenditures, calculated to support delivery of the base LOE hours, is
contained in the Appendix. By May 31, 1991, almost every contract
had been in place for two years or more, yet only about half of the
contracts had met the base LOE. This discrepancy is explained by the
lower-than- anticipated amount of work given to ARCS. The program
management expenditures show a reduction below base value estimates
(36 percent), but not a full corresponding 50 percent. This may be due
in large measure to start-up costs. The base value for program
management did not consider the front end start-up costs.
As stated previously, the funds needed for program management
are expected to decline after start-up and then to fluctuate with LOE
activity. This is demonstrated by billing data and is displayed in
Figure 5, which shows expected curves of program management and
remedial costs incurred over time for a typical contract. The value of
program management dollars spent per total contract dollars spent may
be the most useful indicator of successful cost control. Figure 6 shows
the ratio of program management costs to total contract costs declining
rapidly as ARCS contract program management costs per year decline
and remedial activity increases.
The Appendix shows contract-specific curves by region,
displaying the change in the ratio of program management to total
contract outlays over time. These charts and Figure 6 illustrate the
ratio based on yearly costs. If the same ratio of program management
cost to total contract outlay is calculated for cumulative costs, the
FY91 value changes from 20 to 28. The cumulative ratio is
"burdened" with the front-end costs. It will take steady reduction in
program management costs and increase in remedial work to bring the
cumulative ratio down.
For purposes of analysis, the following indicators were also
evaluated: program management dollar per remedial dollar and
program management direct labor dollar per remedial direct labor dollar
(see Appendix). Data collected by the task force indicate that the
35
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program management expenditure ratios have decreased for most
individual contracts. This finding is consistent with expectations. The
trend should level off or decline slowly as routine is established in
program management activities and remedial activity increases.
Although costs have been reduced significantly, further reductions
in program management expenses are desirable. Several contractors
have more than one ARCS contract, and significant savings may be
realized by merging some program management functions by contractor
instead of maintaining separate activities for each contract.
Additionally, program management is structured with estimated
base amounts of expenditures in years one and two and multiple
options in each following year. The award of options will be based on
EPA's assessment of the need for additional support. Establishing clear
expenditure objectives with expenditure targets for program management
activities is critical for further cost control.
Under REM, contractors were often called upon to provide
program analysis and technical support on behalf of the Agency.
These activities are not a component of ARCS contracts. Much of the
management responsibility addressed by REM contractors will be taken
on by the Agency, in particular, by the regions. It is anticipated that
the ARCS contracts will, upon completion, incur less program
management per total outlays than the REM contracts (See the
Appendix for specific cost comparison information). Finally, it is noted
that the ARCS program management/total contract outlays ratio will be
significantly affected by the use or lack of use of the subcontracting
pool in the remedial planning portion of the contract. The initial
ARCS total contract estimate, based on full use of the subcontracting
pool, was that program management would total 11 percent of overall
costs. The current cumulative ratio is 28 percent, reflecting both start-
up costs and low use of the subcontracting pool.
Finding
Costs for program management during start-up were high in
comparison to costs for assigned remedial work. Front-end start-up
costs and a lower than expected remedial workload contributed to this
problem. Program management costs have generally declined as a
proportion of costs for remedial work, but specific outliers need
management review. Data tracking and cost evaluation systems are not
38
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currently maintained at a national level and are needed to assure
maximum cost control and national reporting ability.
Recommendations
• A national target of 20 percent or less for program
management expenditures compared to total contract
expenditures for ARCS contracts should be adopted by
OSWER and OARM. To accomplish this level,
contract-specific cost expenditure targets, and
contractor-specific targets where a contractor has more
than one contract, should be developed by regions with
the assistance of OSWER and OARM.
• Regions should continue to pursue cost reductions for
program management and strengthen cost controls.
Contractor effectiveness in controlling costs should be
routinely considered as a significant factor in the
award fee evaluation process.
OSWER, with OARM and the regions, should within
120 days develop guidance to support cost management
activities, including:
a. description of program management activities
mandated by contract requirements;
b. clarification of requirements on the contractor
related to staffing levels or positions;
c. reiteration of requirements on EPA for
exercising options for funding program
management activity;
d. discussion of factors for consideration in
promoting efficiency during periods of relatively
low remedial work activity; and
e. development of various indicators of
administrative cost control.
39
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B. ARCS CAPACITY AND UTILIZATION
Background
Federal-lead remedial planning, design and construction projects
are conducted through contracts managed directly by EPA and through
interagency agreements (lAGs) with other federal agencies with EPA
oversight. The decision to use EPA contracts and lAGs was made in
1981, and recognized the Agency's lack of experience in construction
management. The scenario called for Agency contracts (REM and
ARCS) to perform the environmental studies (RI/FSs) leading up to the
remedy selection decision, and use of the U.S. Army Corps of
Engineers (Corps) to conduct the design and construction projects to
implement the selected remedies. This approach had the dual benefit
of allowing EPA to focus on the environmental issues while taking
advantage of the existing engineering design and construction
management experience and infrastructure residing in the Corps.
Specific advantages with involving the Corps in Superfund
include the Corps' ability to act as a "Federal Agent" to oversee the
expenditure of federal funds on large design and construction projects;
the availability of a cadre of experienced resident engineers to maintain
an on-site Federal presence to monitor the execution of the work; and a
comprehensive infrastructure that includes real estate acquisition, dispute
resolution mechanisms for construction change orders and claims, and
other expertise to help ensure the successful completion of projects.
The ARCS program includes a total of 45 contracts awarded to
23 different firms across the ten regions. The contracts provide a
potential capacity of over 15 million LOE hours to perform RI/FS and
RD studies, construction management, oversight of remedial work
performed by responsible parties, and other technical support. The
contracts also provide a subcontract pool capacity of $4.2 billion to
support field investigations (e.g. well drilling, soil borings, and
analytical support) and to perform remedial action projects.
ARCS LOE and subcontract pool capacity needs projections were
developed for each region during 1986-87. The projections were
predicated on a Fund-financed program that included over 100 RI/FS
starts per year. From this base, estimates were developed on the
number of design and construction projects that would likely flow to
the ARCS contracts rather than the other alternatives — potentially
responsible parties, the states, or the Corps. Additional LOE hours and
40
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subcontract pool capacity were included to cover sites and projects
transitioning from the expiring REM contracts, potentially responsible
party oversight projects, and community relations and other technical
support activities. Finally, contingencies were added to accommodate
potential program growth and to ensure adequate excess capacity to
allow for the termination of contractors in the event of poor
performance. A target LOE capacity was then specified for each
region, and multiple contracts were awarded to achieve the target level.
(Subcontract pool capacity was not a factor in establishing the number
of contracts to be awarded in each region.)
The utilization pattern for ARCS envisioned starting new RI/FS
projects and follow-on RD/RA projects from the REM contracts during
years one through four following award. The remaining capacity would
be reserved to conduct RD/RA projects emanating from the RI/FS s
during years five through ten. New contracts would be competed as
needed to commence about year five to pick up new RI/FS starts.
As contracts were being awarded from January 1988 through
June 1989, the nature of the program was changing. A sharp increase
in the number of projects being performed by potentially responsible
parties, budget constraints resulting from an increased emphasis on
RD/RA work, and continued use of the Corps resulted in a reduced
workload for ARCS. The primary impact was on the number of RI/FS
starts, which traditionally provided the primary ARCS workload. RI/FS
starts were reduced to 78 in FY90, and the target for FY91 is 13
(actual FY91 performance may exceed this target). RD/RA work for
ARCS increased slightly to 34 in FY90, but this small increase did not
offset the workload impact of the RI/FS reduction on use of the ARCS
contracts.
To compensate for these changes, a number of adjustments to
the ARCS utilization plan are being implemented. First, as a result of
the Superfund Long-Term Contract Strategy, pre-remedial activities
done under the FIT contracts and oversight of potentially responsible
party RI/FS projects done under the TES contracts will be transferred
to ARCS. The pre-remedial work will be done for a two-year
transition period pending the development of a new contract structure,
while the RI/FS oversight work will be phased in permanently as the
TES contracts expire. Second, the program plans to use the ARCS
contracts for RI/FS starts beyond year four commensurate with
available capacity, thereby delaying action to add new contracts until
41
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additional capacity is needed. The results of these adjustments are
summarized below under LOE Capacity Analysis.
US Army Corps of Engineers (Corps)
As stated above, the primary mechanism chosen for
implementation of remedial design and construction projects was the
Corps. The decision to involve the Corps in the remedial program was
made by the incumbent Administrator in 1981. The agreement was
consummated in a memorandum of understanding (MOU), which was
subsequently amended in 1984. Decisions were made to issue work
assignments to the Corps through site-specific lAGs, and at the
direction of the Office of Management and Budget (OMB), the Corps
was to contract out all design and construction projects (the latter to
appease the concerns of interested contractors that the Corps would
perform the work, particularly the remedial design, with in-house
forces). The Corps receives staff resources directly from OMB based
on the projected Superfund workload, while both intramural and
extramural costs are reimbursed by EPA.
The pre-SARA years were marked by considerable tension
between EPA and the Corps. From the Corps perspective, the RD/RA
workload did not materialize to the levels projected, which caused staff-
size planning problems. Further, the Corps was never comfortable with
the high level of oversight exerted by the EPA regions, preferring a
"Mission Assignment" approach with minimal oversight and occasional
reporting. Finally, the Corps believed the accounting and paperwork
burdens imposed by the demands for cost recovery to be excessive.
Conversely, the EPA regions wanted to maintain control over the
projects for which they felt accountable. Also, the regions were
concerned with the logistical problems resulting from the Corps
decision to centralize all design work in the Omaha and Kansas City
district offices, with the Corps' perceived reluctance to share project
information, and with the excessive delays to initiate engineering design
activities resulting from the Corps' site-specific contracting approach.
Finally, the regions raised concerns about the Corps' minimal
experience base with hazardous waste problems, which caused start-up
difficulties in some sites.
One of the primary underlying causes of tension was a lack of
mutual understanding of the two agencies' needs and operating
42
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procedures (e.g. procurement procedures, terminology, schedule
constraints and public expectations), particularly at a project level.
These strained relations were largely responsible for the large
construction capacity built into the ARCS program to ensure a backup
capability should the MOU be terminated or curtailed.
Post-SARA relations between the two agencies improved through
the direct intervention of senior management within the Department of
Army and the Corps. The rallying point for improved relations became
EPA's goal of meeting the SARA-mandated target of initiating 175
remedial action projects over the three-year period from October 1986
to October 1989. The Corps implemented oversight procedures and
more innovative contracting strategies to ensure the timely completion
of Corps assigned projects. They also expanded their service base to
include new support functions (e.g. real estate acquisition) needed by
the regions. EPA supported the development of the Clean local area
network (CLEANLAN) system, which allows the Corps to interact with
the official EPA management system. Once fully operational,
CLEANLAN should allow the Corps to develop workload planning
projections while allowing EPA to monitor the status of individual
Corps projects. Also, EPA revised procedures for payment of Corps
invoices to ensure prompt reimbursement of Corps costs, and provided
guidance and support for record-keeping requirements. Both agencies
focused on team-building initiatives including a series of retreats which
served to air issues, improve mutual understanding of the other
agency's needs, and identify action items to resolve problems. Finally,
the Corps has begun to decentralize design support activities to other
qualified districts (e.g. New England and Seattle) to improve
communications with the regions. These actions have been successful,
but issues remain to be addressed.
Ongoing performance can be divided into two areas. First,
remedial design support continues to be an area of concern. One of
the primary irritants to the regions is the amount of time needed for
the site-specific procurement of contractors to perform the remedial
design. This process can take several months to complete, and on
occasion has resulted in the selection of a contractor already available
to the region under the ARCS program. The Corps has awarded
indefinite delivery contracts for remedial design, but these contracts
also can experience delays while negotiating fixed-price work
assignments. Traditionally, the Corps has maintained a strong
preference to use site-specific contracts, particularly where project
schedules appear to allow sufficient time or where specialized design
43
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expertise may be required. Several regions have countered this
problem by using ARCS to perform the remedial design, with the
intention of assigning the construction phase to the Corps. This
approach has proven successful when proper coordination and Corps
involvement are maintained during design. Corps future performance
may change, as the Corps now agrees that there is a need for more
responsive contract mechanisms for both EPA and Department of
Defense projects.
The second area of performance is the remedial action phase.
This appears to be a strong point in the relationship, as the regions
continue to provide generally positive feedback on Corps performance.
The Corps has successfully addressed several complex issues related to
bond requirements, bid protests, change orders, and claims, in support
of EPA. The Corps' resident engineer also has proven effective in
maintaining an on-site government presence to monitor the conduct of
the work. However, the Corps can not manage all aspects of the RA
projects assigned to it; the regions are finding a need to stay involved
during the RA to assist the Corps on environmental issues and with
interpretations of the Record of Decision, and to serve as an
intermediary with external organizations (e.g. states) and the local
citizens. A similar level of regional involvement is required on
responsible party and ARCS construction projects.
Although use of the Corps remains the primary vehicle for
implementing remedial design and construction, some adjustments have
been made. First, as mentioned above, RD/RA capability has been
built into the EPA contracts. Each ARCS contract has a subcontract
pool to finance a variety of project activities, including remedial
construction. The size of the pool ranges from $40 million in the
small contracts to $150 million in the largest contracts. The
cumulative value of the subcontract pools, $4.2 billion, is 64 percent of
the total value of all the ARCS contracts. The ARCS construction
capability was established for several reasons: (1) to provide capability
to supplement that available from the Corps; (2) to provide added
flexibility to accelerate the implementation of smaller projects; and (3)
to build an experience base in construction management within the
regions. Second, the Bureau of Reclamation (BUREC) was added to
the program in 1987, to provide additional construction management
capability in the western regions and to provide technical assistance.
To take best advantage of each mechanism and to provide for national
consistency, a distribution policy for RD/RA projects was issued in
December 1987. The policy is summarized in Table 8.
44
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TABLE 8. OSWER DISTRIBUTION POLICY FOR RD/RA PROJECTS
RA Value Less Than ARCS or CORPS/BUREC
$5 Million performs RD and RA
RA Value between ARCS or CORPS/BUREC
$5-15 Million performs RD; CORPS/BUREC
must perform RA
RA Value more than CORPS/BUREC must perform
$15 Million RD and RA
This policy has resulted in the majority of the RA budget being
assigned to the Corps. Current data illustrating the distribution of
RD/RA work between the Corps and ARCS are provided in Table 9.
Using FY90 as an example, the Corps received approximately $190
million of RD/RA work, while the ARCS contracts received about $43
million. The dollar value of construction projects proposed for ARCS
over FY91 and 92 ranges from $100,000 to $10 million. Included are
projects for which headquarters concurrence was given to exceed the
policy threshold of $5 million. The dollar value of Corps projects over
the same years ranges from $1 million to $78 million. Several of the
small Corps projects are actually segments of larger projects. Trends
indicate that ARCS is receiving the majority of remedial design
assignments and nearly half the construction projects, while the Corps
continues to receive the large construction projects, as evidenced by a
$15 million average cost in FY92.
Issue
It is a commonly held perception that the ARCS contracts
contain excess capacity, given the current and projected remedial
workload. This situation is the result of (1) the decision to build
excess capacity into ARCS; (2) the subsequent decision to continue our
relationship with the Corps in the area of remedial design and
construction management; (3) the subsequent decision to adopt an
"enforcement first" strategy as a key component of Superfund
implementation; and (4) budget policy decisions shifting more resources
to remedial design and construction accounts. These decisions have
reduced the volume of work available for ARCS. The apparent effect
of these decisions has led to questions about whether the contracts are
being used efficiently, whether the Agency is maintaining essentially
duplicate capability in the area of design and construction, and whether
the ARCS program management costs are excessively high.
45
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Discussion
LOE Capacity Analysis
OERR, working with PCMD and the regions, has completed an
analysis of ARCS Level of Effort capacity versus expected program
needs. The purpose of the analysis was to (1) revise the original
workload projections to reflect current program expectations and include
the new pre-remedial and RI/FS oversight work, and (2) compare the
projections against the current available ARCS capacity. The analysis
was based on the following assumptions:
• All level of effort hours available in the ARCS contracts
were considered in the analysis. (This assumes that all
level of effort options available in the ARCS contracts
will be exercised.)
• FIT level of effort was based on the annual pre-remedial
budget, with phase-in work beginning in FY91, and full
pre-remedial work accommodated in FY92 and 93. A
phase-out allocation in FY94 was not calculated but is
likely to require some additional hours. Annual level of
effort equals 384,000 hours during FY91, and 591,000
hours during FY92 and 93.
• RI/FS oversight was assumed to phase in beginning in
FY92, with all work transitioned by FY94. Level of
effort estimates were provided by the Office of Waste
Programs Enforcement based on the number of expected
responsible party RI/FS starts. Annual level of effort
equals 119,000 hours during FY92, 238,000 hours during
FY93, and 357,000 hours during FY94 and beyond.
• Traditional remedial workload was estimated by escalating
the actual FY90 ordering rate by 30 percent. The 30
percent escalation was based on a higher average level of
effort delivery rate noted early during FY91 as compared
with FY90. The FY91 workload was used for each
subsequent year. Annual level of effort equals 1,574,000
hours during FY91 and beyond.
The results of the analysis are shown in Figure 7. The length of
the bar for each region depicts the last year during which new projects
47
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48
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could be assigned to ARCS. The results show that the zone of
Regions VI, VII, and VIII (ARCS-Central) will run out of capacity
during FY94, while Region IV and the zone of Regions IX and X
(ARCS-West) will not use all the available LOE capacity during the
ten-year period of performance. Based on this analysis, follow-up
actions can be planned with each region. For example, Region IV
currently is taking action to terminate two ARCS contracts, which will
reduce available capacity, so that it likely will be consumed by FY97.
With the exception of ARCS-West, the remaining regions appear to
have an acceptable capacity balance, and contract terminations solely to
reduce capacity do not appear warranted. Follow-up will be required in
ARCS-West to determine an appropriate course of action. In addition,
OERR plans to monitor actual utilization against the planned workload
over the next several years and adjust the projections as appropriate.
Such monitoring will be important if changes are made in the actual
use of the ARCS contracts.
Subcontract Pool Capacity Analysis
As noted above, the cumulative value of the ARCS
subcontracting pool ($4.2 billion) represents 64 percent of the total
value of the ARCS contracts. Over the first three years of ARCS, this
resource has been significantly underutilized, as a result of the success
of the enforcement first policy and the current RD/RA distribution
policy which shifts a majority of the construction work to the Corps.
Minimal use of the subcontract pool capacity has contributed to the
higher than originally planned ratio of program management costs to
total costs for the ARCS contracts. Because many of the program
management costs are fixed costs that continue to be incurred
regardless of the level of work performed, the lower the use of the
LOE and subcontract pool, the higher becomes the proportion of
program management cost to total contract cost. Further, the regions
have argued for additional flexibility in making design and construction
assignments to ARCS and the Corps. As a result, the Task Force
developed three options to the current RD/RA workload distribution
policy. The options are shown on Figure 8 and described below.
49
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The first option involves maintaining the current policy for RAs,
but removing the restrictions on RDs. This would allow the regions to
use ARCS for any design regardless of the estimated RA value (which
has been the primary area of concern with Corps performance), while
maintaining a strong Corps role in construction management.
However, this option would not increase the use of the ARCS sub-
contracting pool.
The second option involves raising the current ceiling for RAs to
$15 million while also removing the restrictions on RDs. This option
allows for larger projects to be done under ARCS to take better
advantage of the available capacity and to maintain project continuity
as envisioned in the ARCS strategy, while retaining a threshold that
ensures a substantive and predictable construction workload for the
Corps. However, there are two potential drawbacks with increasing the
ARCS RA distribution ceiling. First, the Agency does not have
extensive experience or infrastructure in managing large-scale RA
contracts. The second concern is that if any claims arise that can not
be settled by the regional contracting officer, they are referred to the
state court system for resolution. Regional performance would need to
be monitored and assistance provided as needed.
The third option further increases the construction ceiling to $30
million while retaining the concept of no ceiling on the design phase.
Option 3 provides more flexibility to the regions to make workload
allocation decisions based on the needs of the project and the resources
available to the region. It allows large RA projects (up to $30 million)
to be performed under ARCS where the capability and capacity exists
to complete the work. Also, it maintains the option to use the Corps
when the proposed remedy is complex or where there is a high degree
of uncertainty (e.g. where there are highly-variable subsurface
conditions) and the backup of the Corps infrastructure (e.g. claims
resolution) or Federal on-site presence (e.g. resident engineer) is
warranted. Because of the high proposed construction ceiling for
ARCS, guidelines integrating specific project needs, and quality and
performance considerations would be developed to assist the regions in
making assignments between ARCS and the Corps. Examples of
appropriate criteria would include:
• Evaluation of site characteristics:
a. size of site;
b. location of site;
51
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c. proximity to industrial, commercial and residential
populations;
d. proximity to ecologically sensitive areas; and
e. level of uncertainty in extent of soil and
groundwater contamination and waste quantities;
• Evaluation of selected remedy:
a. amount of soil excavation required;
b. need for major earth construction such as slurry
walls and clay caps;
c. on-site soil treatment or stabilization;
d. groundwater treatment or plume containment;
e. use of innovative technologies and uncertainties in
technical performance; and
f. need for continuous federal on-site presence;
• Evaluation of local/public interest:
a. citizen/environmental group activity; and
b. state/local government concerns;
• Evaluation of federal ability to manage site with defined
characteristics:
a. EPA experience and capability; and
b. Corps district office experience and capability;
• Evaluation of ARCS contractors' and potential Corps
contractors' ability to manage and perform construction at
site with defined characteristics; and
• Site needs for unique Corps construction management
procedures:
a. exposure to significant change orders and claims;
b. need for long-term continuity at site;
c. real estate acquisition needs; and
d. special contract administration issues.
Implementation of these options will have an impact on ARCS
capacity. Table 10 summarizes the affect of these options on the FY92
RD/RA workload. Each option would result in an increase in LOE use
as more RD projects are assigned to ARCS. The likely impact would
be approximately 100,000 hours per year. Options 2 and 3 also could
affect use of the subcontract pool if the regions decide to move more
52
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construction to ARCS. Construction obligations likely would exceed
$100 million per year, which would consume $1 billion, or 25 percent,
of the total subcontract pool capacity.
Option 2 provides a useful compromise by allowing more work
to flow to the ARCS contracts while retaining a strong role for the
Corps on the larger projects. Quality criteria similar to the examples
provided under option 3, which focus on the specific needs of a
project, should be developed to assist the regions in making project
assignments.
Recommendations
• To provide for more effective use of available
ARCS resources, within 60 days OSWER should
revise the Fund-lead remedial design/remedial
action (RD/RA) distribution policy to allow the
regions to select the Corps or ARCS contracts to
perform remedial designs for RAs of any value
and allow the regions to select Corps or ARCS
contractors to perform remedial actions of up to
$15 million in value.
• To facilitate implementation of the revised
RD/RA policy, within 90 days OSWER should
issue guidelines to the regions to assist in
making RD/RA assignments to ARCS and Corps.
The guidelines should include:
a. technical, quality, and performance
criteria focusing on the specific
needs of the site;
b. recognition of the Corps' capabilities
in construction oversight and
constructability and biddability
reviews of ARCS designs; and
c. requirements to ensure a substantive
Corps role during ARCS RD
projects where the Corps will take
the lead for the RA phase.
54
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OSWER should monitor implementation of the
guidelines by the regions.
OSWER and PCMD should take action to
reduce approximately $2 billion in contract
capacity from the ARCS construction sub-pool to
reflect current projections of need.
To ensure a balanced construction management system
that capitalizes on the strengths of both the Corps and
ARCS, OSWER should continue to work with the
regions and Corps to address performance issues.
Discussions should focus on improving the
responsiveness of the Corps during the design phase to
better serve the needs of the regions, maintaining
effective communications with the Corps, and ensuring
a substantive and predictable workload for the Corps
to facilitate workload planning.
OSWER should continue to monitor capacity
utilization under ARCS annually to assess the
accuracy of the current workload assumptions.
If actual utilization differs substantially from the
projections, OSWER should take the necessary
actions with OARM and the affected region(s) to
correct under or over-capacity problems.
OSWER should initiate discussions with regions
IX and X and OARM regarding the apparent
excess capacity in the ARCS-West zone. Options
should include selected terminations and
assessing the feasibility of making excess capacity
available to other regions (e.g., the ARCS-
Central zone) that may have a capacity shortfall.
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C. ARCS CONTRACT CONTROLS
Background
Contract administration includes all functions from the award of
the contract until final payment and close out. The Federal Acquisition
Regulations (FAR) identify 66 contract administrative functions which
can be placed in 15 separate categories (See Appendix). Effective
contract administration requires coordination by a team comprised of
the contracting officer (CO), the project officer (PO), and the work
assignment manager (WAM). Each team member should have well-
defined, specific roles and responsibilities in the process.
ARCS contracts are a form of cost-reimbursement contract in
which the contractor assumes the performance risk and the government
assumes the cost risk. This type of contract requires a great deal of
government control over and involvement with the contractor and
results in significant administrative costs in recordkeeping and reporting.
The basic obligation of the government is to pay the contractor
reasonable and allowable costs incurred during performance as well as
appropriate fees. The contractor is required to demonstrate "best
efforts" to perform as the government desires.
Roles and Responsibilities
The regions manage ARCS contracts and are entirely responsible
for assigning and overseeing work. Headquarters guides, directs,
supports, monitors and evaluates implementation. The Appendix
displays the organizational alignment.
The CO verifies that contracting activities are performed as
authorized by laws, regulations, and the terms and conditions of the
contract. Specific responsibilities include reviewing and signing the
initial work assignment and any subsequent action that affects total
scope or budget of the basic contract; determining award fee; and
resolving disputes regarding performance or costs.
The PO manages and directs activities performed under the
contract. Specific responsibilities include contract surveillance;
recordkeeping; work assignment distribution; and invoice approval and
certification.
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The WAM is typically a remedial project manager, the EPA
official who monitors and directs all ARCS contractor activities
conducted at project sites. The WAM assists the PO in contract
management activities.
Although the government's contract administration roles and
responsibilities tend to be emphasized, the contractor also has equally
important contract administration responsibilities. Whereas the
government monitors, reviews, approves and certifies, the contractor
"implements." That is, the government requires and pays for the
contractor to establish and maintain an internal system for planning,
scheduling, budgeting, accounting, cost estimating, work authorization,
cost accumulation and performance measurement. Under ARCS, the
design and maintenance of the multi-site management control systems
are part of the program management component. EPA audits these
management control systems to determine whether they are in place
and evaluates whether they are functioning as intended.
Cost Monitoring
Under ARCS contracts, the contractor is reimbursed for all
reasonable and allowable costs incurred. Because most of the risk that
work will be performed adequately is borne by the government, a great
deal of oversight is required. Each month the contractor submits a
combined monthly technical and financial progress report and an
invoice/voucher. These reports form the basis for the PO to review
costs and certify the invoice for payment. Payments made under
ARCS are provisional — subject to final audit to determine their
allowability, allocability, and reasonableness.
Technical Performance Monitoring
Under ARCS, diligent contract monitoring is important and
timely government action is crucial. Documentation of contract
monitoring is extremely important, as it forms the basis for discussing
deficiencies and taking appropriate action, possibly disallowing costs, as
well as reinforcing positive performance.
The technical monitoring roles of the PO and WAM are
important in assuring that the contractor understands the work
requirements and produces quality results within the time required.
Once the work assignment is issued and the work plan submitted and
57
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approved, it is up to the PO and WAM to monitor the contractor to
ensure that EPA obtains the agreed-to performance.
Issuance of Work Assignments
Work under an ARCS contract is specified in written work
assignments prepared by the WAM and PO and issued by the CO. The
key elements of a work assignment are the period of performance; level
of effort (estimated number of person-hours required to perform the
assignment); the statement of work (a clear, detailed description of the
work to be performed); and an independent government cost estimate.
The WAM/PO may choose to set an expenditure limit for work
assignments, which allows for their phasing, management, and
execution.
The CO forwards the work assignment and a contract
modification to the contractor. After accepting the modification, the
contractor develops a Work Plan Memorandum, which describes the
contractor's approach to the overall work plan for the assignment. The
Memorandum is intended to save time by granting the PO interim
authorization to allow the contractor to begin work, and therefore incur
costs, before the work plan is approved. The work plan must include a
budget description, an estimated number of person-hours required to
perform the assignment, and staffing and methodology for completing
all tasks in the statement of work. It must contain enough detail to
allow the PO to determine whether the approach and costs are realistic
and reasonable.
Federal Managers' Financial Integrity Act
The Federal Managers' Financial Integrity Act (FMFTA) requires
that executive agencies evaluate their systems of internal administrative
controls annually and submit annual statements to the President and the
Congress on the status of these internal control systems. OMB
Circular A-123, Internal Control Systems, prescribes policies and
procedures to be followed in establishing, maintaining, evaluating,
improving, and reporting on internal controls.
Issue
EPA management of ARCS contracts is vulnerable in areas of
invoice review, technical performance monitoring, independent
government cost estimates, and work assignment issuance. Not
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recognizing the need to examine ARCS contract administration as a
discrete process and not identifying a process owner has contributed to
ARCS management weakness.
Discussion
Reviews
Since the award of the first ARCS contract in January 1988,
four major reports have addressed the need to improve contract
administration-Superfund Contracts: EPA needs to Control Contractor
Costs. My 1988, GAO/RCED - 88182; Contracts Management : The
People and the Process. November 1988, EPA, Office of Administration
and Resources Management, Office of Administration, Management and
Organization Division; Civilian Agency Procurement. September 1989,
GAO/RCED - 89109; and Region II Alternative Remedial Contracting
Strategy Contracts. April 1991 (Draft), GAO. In addition to these, the
EPA Office of the Inspector General (OIG) has issued a report which
addresses ARCS contract administration, Survey of the Alternative
Remedial Contracting Strategy: Contract Bidding and Award Process.
April 1990, EPA/OIG - EISGB9-11-0021-100274. All of these reports
have alluded to a need to improve contract management. Regarding
ARCS, weaknesses were noted in invoice reviews and independent
government cost estimates.
EPA's own study, Contracts Management: the People and the
Process, noted that the Agency's culture needs to be changed to
emphasize sound contract management; senior managers are only
minimally involved with contract management in their organizations;
technical skills of POs and WAMs need to be balanced with essential
administrative skills; project officer and contract administration courses
need to be revamped to emphasize day-to-day management issues such
as cost estimating and financial and workload tracking; central
databases are needed; and contract managers need to know how to deal
with contractors who perform poorly.
Within the Office of Emergency and Remedial Response, the
Hazardous Site Control Division (HSCD) and the Contract Operations
Review and Assessment Staff (CORAS) provide oversight and
assessment of Superfund contracts. (See Appendix.) In April, 1989,
CORAS performed an ARCS assessment in response to the Superfund
90-Day Study. It was based on a review at Regions III and V, which
concluded that contract management resources are potentially not being
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allotted for proper oversight; contractor selection based on performance
documentation needs to be more clearly defined and applied; and there
is a specific need for guidance on how to prepare independent
government cost estimates and a general need for additional training
and guidance.
In response to the need for additional guidance, the CORAS
Bulletin was developed. From September 1988 through December
1990, CORAS published ten issues that cover a range of contract
administration topics-e.g. guidance for organizing ARCS contract files,
invoice review, contractor work plan review and contractor financial
reports review.
PCMD conducts ARCS Contract Management Reviews at the
regional contracting offices, which may cover a full range of contract
administration responsibilities, including compliance with contract
clauses. From November 1989 to August 1990, PCMD conducted its
first round of reviews. These covered only file documentation
associated with the issuance of work assignments and approval of work
plans and documentation related to the award fee process. Problems
were noted at all ten regions in the areas of file documentation and
contractors working beyond the 45-day stop work provision without
work plan approval. PCMD is conducting another round of regional
reviews, the scope of which is similar to the first one. The results of
these reviews are currently not available.
FMFIA Submissions
No reference was made to ARCS contract administration controls
in the FY88-90 OARM and OSWER FMFIA submissions. However,
both OARM and OSWER submissions referred to scheduling reviews
of contract management.
Regional Visits
The following themes developed from the interviews with
regional personnel in contract administration:
a. Invoice format and review ~ not enough time to review
invoices in detail; want standard invoice format;
inadequate review performed; no consistency across
contractors;
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b. Timing of invoices and progress reports — invoice out of
phase with reports;
c. Cost estimating ~ done poorly because of lack of
experience; need guidance;
d. Effectiveness of work plans - takes long time to get work
plan approved; many iterations; not experienced enough to
review;
e. Work assignment scoping -- micromanaging; paying for
rework; function of type of contract;
f. Roles and responsibilities - not completely clear; overlap;
friction; not working as a team; and
g. Technical reviews - level of review depends on
individual WAM; technical reviews spotty; weak
negotiating skills.
Regional Vulnerability Assessments
Each Regional Administrator was asked to prepare an assessment
to identify potential risks in ARCS contract administration that require
corrective action or further investigation. Table 11 below is a
compendium of the responses, summarized by major issues.
TABLE 11. COMMON ISSUES FROM REGIONAL VULNERABILITY ASSESSMENTS
Number of Regions
Summary of Issues Identifying Issue
Invoice detail, format, timing with
monthly progress report 7
EPA project management and oversight 6
Financial contract audits 6
Equipment purchase and utilization 5
Independent Government cost estimates 4
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The regions have devoted much time, effort and energy to
managing the ARCS administrative process. They have developed
policies and procedures, training modules and guidance.
Notwithstanding these efforts, EPA can still improve the ARCS contract
administration process.
When ARCS was first developed, OARM and OSWER focused
on creating a contract vehicle, awarding contracts, and ensuring the
availability of clean-up contractors. However, because this was a major
acquisition system and because decentralizing the contract
administration functions was a new concept, the associated risk was
high. An early indicator of this was the unsuccessful effort to hire
regional contracting officers who had in-depth cost-reimbursement
contract experience as well as experience in environmental clean-up
programs.
The system of internal controls in the ARCS contract
administration process does not provide reasonable assurance that
Superfund contracting program resources are protected against waste
and inefficiency. Documented weaknesses in cost monitoring, technical
performance monitoring, independent government cost estimate
preparation and work assignment issuance have been present since the
inception of the ARCS program. The continuing nature of these
problems, coupled with the inadequate financial contract audit coverage,
support identifying ARCS contract management as a material weakness
in the FY91 FMFIA submission.
To date the FMFIA process has not adequately functioned as the
mechanism for surfacing ARCS contract management weaknesses. This
may be due to a lack of recognition on the part of OARM and
OSWER that ARCS contract administration is a process with shared
responsibilities. Each organization has focused on its part of the
process, because the FMFIA implementation guidance EPA gives its
managers segments the organization into assessable units that follow
organizational subdivisions. Each manager is then asked to perform a
vulnerability assessment of a particular unit. OMB Circular A-123,
which prescribes the guidelines for FMFIA implementation, allows for
segmentation into administrative activities.
The following issues warrant attention, as they represent a
compilation of the results from the prior reports of review, regional
interviews, regional vulnerability assessments and concerns expressed by
Agency management.
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Work Administration/Processing -- Work assignment issuance,
work assignment amendments, work plan negotiation, and work plan
approval are time and resource intensive. Both rework of a work
assignment and attempts to exeft tighter control through
micromanagement may drive up administration and support costs.
Invoicing — Regions have differing invoice back-up formats in
their contracts; some are highly detailed; some are inadequate.
Reconciliation to monthly reports is not always possible, and
determining "reasonableness" of charges is often difficult.
Some contractors are not providing the necessary voucher back-
up information required by the contract or requested by the PO, making
determinations of reasonableness difficult.
POs lack knowledge to determine the appropriateness of costs.
This can lead to mistaken determinations on invoices, which may cause
an increase in overall contract costs. They may also lack training in
ways to evaluate "reasonable" contractor charges. This may lead to
approval of inappropriate charges, causing unnecessary increased costs
to the contract.
Undefined roles and responsibilities in financial oversight for
COs, POs, and WAMs leads to overlapping reviews of financial
information, causing inefficient use of resources.
Management of Work Assignment Costs - The work ordering
and amendment process is resource intensive and cumbersome, leading
to multiple modifications and potential increases in costs. This is due
to the use of the work assignment/work plan approval process as a
management tool for monitoring and control of the contractor.
Personnel are not fully knowledgeable of methods and details required
for scoping work for the ordering process.
Training of POs and WAMs - Current contract administration
training programs do not adequately provide detailed instruction in
specific Superfund contract management requirements or roles and
responsibilities, leading to a weak management structure for contracts
and inconsistent application of contract management techniques.
POs and WAMs are not adequately trained in negotiation tactics
and skills, which places them at a disadvantage when negotiating with
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contractors. This leads to unnecessary technical and cost tradeoffs
caused by more effective contractor negotiation training.
POs and WAMs need specialized training in numerous areas
such as paperwork management, independent cost estimation, workplan
review and approval, project management, U.S. Army Corps of
Engineers and Bureau of Reclamation processes, and confidentiality of
information. This lack of training hinders POs and RPMs from
optimum performance, which is reflected as less than maximum
efficiency and effectiveness in contract administration.
ARCS Contract Management Reviews -- PCMD and OERR,
jointly, are not conducting completely adequate oversight reviews of the
regional contract administration activities.
Each of the Regional Administrators identified areas within their
organization that need strengthening. For those that have not already
been addressed, we recommend that they take immediate steps to
address those concerns. Documentation of the assessments and any
subsequent corrective actions and implementation plans should be
included as part of the regional FMFIA process.
Other government clean-up contracting programs have grown
substantially since the inception of ARCS. In particular, the
Department of Defense (DOD) and the Department of Energy (DOE)
learned from EPA when they designed their programs, and, in fact,
their programs parallel EPA's. They have, however, incorporated
changes which resulted in improvements.
In implementing the Superfund Long-Term Contracting Strategy,
EPA should review DOE's, DOD's, and other government contract
strategies. Through such review, EPA's managers will be exposed to
new ways of doing things which may permit the Agency to adapt the
characteristics of successful approaches for improving EPA's contract
system effectiveness.
The Interagency Committee on Hazardous Waste Clean-Up
Contracting Strategy was formed as an outgrowth of EPA's Long-Term
Contracting Strategy. This committee, whose members include
representatives from EPA, DOE, DOD, the Corps, Navy, and Air
Force, is working toward establishing a more consistent government-
wide approach to hazardous waste clean-up contracting.
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Finding
Defined within each contract are a series of procedures and
control points intended to permit effective EPA oversight and control of
contractor activity. These contract controls are augmented by defined
resource management procedures to be followed by EPA staff engaged
in contract administration and program management.
Overall, the defined procedures and controls appear to be
comprehensive. However, specific potential weaknesses have been
identified in implementing these procedures. Significant weaknesses in
administrative contract controls in areas of work assignment
management, invoice review, technical performance management, and
independent government cost estimates, provide inadequate safeguards
against waste and mismanagement, and should be reported as a material
weakness under the FMFTA.
Recommendations
• ARCS contract management should be identified
by OSWER as a material weakness to be
reported in the Fiscal Year 91 FMFIA
submission (due by December 31). In addition,
an ARCS contract management process owner
should be designated upon the recommendation
of the Assistant Administrators for OARM and
OSWER, accountable for preparing the FMFIA
submission. The process owner should develop a
structured ongoing vulnerability identification
and assessment process for ARCS.
The process owner should be instructed to:
a. implement corrective actions;
b. establish a formal follow-up system that records
and tracks actions, projected action dates, and
monitors whether the changes are made as
scheduled; and
c. report quarterly to the Senior Council on
Management Controls on status of
implementation.
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The Regional Administrators should act
immediately to establish a capacity for providing
independent government cost estimates to ARCS
managers.
The Regional Administrators should take
immediate steps to strengthen ARCS
administrative process controls for those areas
identified in regional vulnerability assessments.
Two areas that deserve immediate attention are
the need to assure the optimal scope of work
assignments and the invoice review process.
The process owner, with assistance from OARM,
OSWER and the regions, should convene a work
group to evaluate the issues raised in the
regional interviews, vulnerability assessments and
previous reviews. The results of this work
group effort will meet the FMFIA corrective
action and follow-up requirements.
Background on Government Property Management
ARCS contracts contain a "Designation of Property Administrator"
clause. A Property Administrator located in EPA headquarters, Office
of Administration and Resources Management, Facilities Management
Services Division, is responsible for the management and control of
Government property under a contract. The contract also includes other
clauses by reference that address government property:
Federal Acquisition Regulations (FAR) (48 CFR Chapter 1)
Number Date Title
52.245.1 April 1984 Property Records
52.245-5 January 1986 Government Property
52.245-19 April 1984 Government Property
Furnished "As Is"
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After award of a contract, the Property Administrator forwards a
"Guide for Control of Government Property by Contractor" to each
contractor. Contractors are required to follow the same policies and
procedures as EPA personnel with regard to property classification,
(i.e., nonexpendable, noncapitalized, or supplies) annual inventories,
property records, decals, utilization, and disposal and transfer.
The contractor is required to maintain written control procedures
that communicate the organization's standards, techniques, and
instructions to operational personnel for uniform application. The
Property Administrator reviews and approves these procedures.
Contractor records of government property established and maintained
under the contract are the government's official property records.
According to the FAR, duplicate official records shall not be
maintained by government personnel. Further, the contractor is
required to review and provide justification for retaining government
property not currently in use.
Issue
Government property is allegedly under-utilized and mismanaged.
Discussion
As a follow-up to the allegations of under-utilized property,
compliance reviews were conducted by the OARM Facilities
Management and Services Division of the contractors' property control
systems. The reviews disclosed a low utilization rate of field
equipment. The equipment was purchased anticipating that a sufficient
number of work assignments would be issued to justify the purchases.
The project officers will review equipment utilization based upon
projected workload and make appropriate recommendations.
Equipment is purchased under the contract and billed either as a
part of program management or remedial planning (site-specific). The
equipment billed under program management is equipment that will be
utilized across numerous work assignments. Equipment billed as part
of remedial planning was purchased specifically for a particular work
assignment. At the conclusion of the work assignment, a decision will
be made on the disposition of the equipment. Under the contract, the
assumption was made that the majority of the equipment would be
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purchased under program management. The contractor would be
responsible to track and monitor the equipment among the various sites.
Based on information supplied by PCMD, as of May 31, 1991,
the contractors have billed for equipment in the total amount of
approximately $9.6 million. Of that amount, approximately $8.2
million was billed under program management and $1.4 million was
billed under remedial planning. (See Appendix).
All charges to the contract for acquisition of equipment and
material must have been previously authorized within the contract.
Acquisition of nonexpendable property in excess of $1,000 and
sensitive items in excess of $300 must be individually itemized on EPA
form 1730-1, "Report of Nonexpendable Government Property Acquired
by Contractor," to show the required personal property management
infoirnation. The Project Officer approves contractor-acquired
government property with the review of the reimbursement vouchers.
The Property Administrator performs an annual Compliance
Review on all contractors' property systems that have inventories
valued greater than $500,000. These reviews include a physical
inventory, reconciling the inventory with contractor's acquisition
records, an assessment of equipment utilization records, and
recommendations.
The ARCS equipment is currently managed independently under
each of the contracts. There is no central property warehouse or
national distribution system. Several regions have discussed the
feasibility of maintaining an ARCS equipment warehouse to store,
maintain, and distribute equipment. If feasible, central equipment
management could reduce equipment costs and increase utilization of
the equipment.
Finding
The ARCS contracts provide for contractors to purchase
necessary equipment on behalf of the government. This equipment is
maintained and utilized by the contractor during the life of the contract,
but it is owned by the government. The task force found no evidence
of violation of EPA controls for prior approval of all equipment
purchases by contractors. Other reviews have identified instances of
under-utilization of government-furnished equipment by ARCS
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contractors. OARM is currently conducting a comprehensive review of
EPA equipment control policies and procedures.
Recommendations
• ARCS-related recommendations resulting from
the OARM property system review should be
immediately adopted by OARM and OSWER.
OSWER, in conjunction with OARM, should
evaluate the feasibility of establishing a
government-owned, contractor-operated depot or
warehouse where all equipment not required on
a regular basis can be stored and accessed by
the ARCS contractors.
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D. ARCS FINANCIAL AUDITS AND REVIEWS
Background
Payments made under the ARCS cost-reimbursement contracts
are provisional, subject to final audit to determine the allowability,
allocability, and reasonableness of the costs paid. Based on audit
results, payments made to a contractor may be reduced by amounts that
do not constitute allowable costs or adjusted for prior overpayments or
underpayments. EPA's financial audit and review program provides
EPA management with assurance that contractor's costs are allowable
and that contract dollars are safeguarded against waste, loss and abuse.
EPA's current financial audit and review program with respect to
the ARCS contracts is built around the following framework:
1. Monthly review and certification of vouchers;
2. Financial Monitoring Review;
3. Interim Direct Cost Audit;
4. Incurred Cost Audit; and
5. Close Out Audit.
The ARCS contractors perform work for other federal agencies
in addition to EPA. The FAR prescribes policies and procedures for
obtaining and providing interagency audit services to avoid or eliminate
overlap and duplication of government efforts and to provide more
consistent treatment of contractors. OMB Circular No. A-73, Audit of
Federal Operations and Programs, states executive branch policy on
audit cross-servicing arrangements. Multiple reviews, inspections and
examinations of a contractor by several agencies are to be eliminated to
the maximum practicable extent through the use of cross-servicing
arrangements. These arrangements identify the "cognizant" agency
responsible for providing audit services.
The Appendix identifies the cognizant audit agency for each of
the ARCS contracts and the dollar amount billed as of May 31, 1991,
for each contractor and regional contract.
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Audit and Review Types
Financial Monitoring Reviews (FMRs) are performed by the
PCMD Financial Analysis Staff on individual active contracts in excess
of $5 million. Current PCMD policy stipulates that the reviews should
be scheduled for each appropriate contract after at least 6 months of
performance has been completed. Reviews should be scheduled for
each contract at least once every two years of performance thereafter.
The FMR is a review of contractor billings associated with an
individual contract to ensure compliance with contract requirements and
to ensure that billed costs are adequately supported by appropriate
systems and records. It is not the objective of this review to determine
the allowability of costs incurred. Reports are issued to the CO and
the Financial Administrative Contracting Officer (FACO) for resolution
of findings. The CO is responsible for resolving contract-specific
issues while the FACO is responsible for resolving cross-cutting issues
affecting multiple EPA contracts (to assure consistent treatment on all
contracts). The reviews are also provided to the EPA OIG for their
information.
An Interim Direct Cost Audit may be conducted for a specific
contract during the performance period of the contract. This audit may
be requested by PCMD or the EPA OIG, based upon concern about the
reliability of the costs claimed, a suspicion that there may be problems
with contract performance, or upon completion and determination of
need as a result of an FMR. The audit is performed by the EPA OIG
or the cognizant agency and is conducted to assess, at a minimum, the
allowability of costs claimed or reported under the contract and to
ensure compliance with applicable statutes, regulations, and terms and
conditions of the award. Generally, the audit effort involves verifying
that the amounts billed agree with the contractor's records and are
allowable to the contract under its terms and conditions.
The Annual Incurred Cost Audit is a comprehensive audit of a
contractor. The review includes an audit of direct and indirect costs
for all government contracts and is performed for each of the
contractor's fiscal years. Each contractor must submit an incurred cost
report within 90 days of the end of the contractor's fiscal year.
Timely submission should be monitored by PCMD. Upon receipt of
the submission, the EPA OIG will arrange for an audit by the
cognizant audit agency. The audit report is used by PCMD's Indirect
Cost Rate negotiator to negotiate the final indirect rates. Audit results
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on direct costs are furnished to the CO for resolution of any questioned
or unsupported costs.
A close-out audit is an audit of the total costs, direct and
indirect, of a specific contract and is performed at the end of the
contract performance period. This evaluation is conducted to assess the
allowability of costs claimed or reported under the contract and to
ensure compliance with applicable statutes, regulations, and terms and
conditions of the award. Generally, the effort involves verifying that
the amounts billed agree with the contractor's records, are allowable
under existing regulations, are reasonable, and are allocable to the
contract. Such an audit does not generally involve new audit effort. It
usually consists of a recap of audit findings from the annual incurred
cost audits. Thus, no close-out audit can be completed until after com-
pletion of the incurred cost audit. Accordingly, the cycle of close-out
audits will be at least two years behind actual contract performance.
The close-out audit is used to establish the final price of cost-
reimbursement type contracts. For the ten-year ARCS program, close-
out audits will be requested annually after receipt of the contractor's
submission, and the contract costs will be settled on an annual basis.
This audit is requested by the CO upon receipt of all necessary
documentation. When the audit report is received, PCMD provides the
report and any added recommendations to the CO for final settlement
with the contractor.
Table 12 summarizes the universe of Government audits
currently required by the ARCS contract, FAR, or Agency policy.
Additional information on these audits is shown in the Appendix.
TABLE 12. ARCS AUDITS AND REVIEWS
Type
Financial Monitoring Review
Interim Direct Cost/Special
Incurred Cost
Close Out
Cognizance
EPA PCMD
EPA DIG or
DCAA
EPA OIG or
DCAA
EPA OIG or
DCAA
Cycle
2-yr Performance
Period
Upon Request
Contractor's
Fiscal Year
Annual Performance
Period
Audit
Scope1
Contract
Contract
Contractor
Contract
123 ARCS contractors; 45 ARCS contracts.
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Discussion
Financial Monitoring Reviews
To determine whether PCMD conducted FMRs in accordance
with the prescribed guidance and whether PCMD resolved identified
deficiencies with contractor billed costs in a timely manner, the report
entitled "Status of Financial Monitoring Reports" was examined. This
report is maintained by PCMD and identifies, by contract and review
report date, issues noted from the reviews and whether the issues
currently are open or closed.
PCMD conducted FMRs on 36 of the 45 ARCS contracts after
an average of 15 months of performance had been completed. The
guidance establishes a goal of conducting reviews on all contracts after
a six-month performance period. The nine contracts that did not
receive an initial review were EBASCO Environmental (Regions I and
IV); Metcalf and Eddy, Inc., (Region I); ICF Technology, Inc.,
(Regions II and IX-X); NUS Corporation (Region III); Black and
Veatch, Inc., (Region IV); Morrison-Knudson Environmental Services
(Regions VI-VIII); and Ecology & Environment, Inc., (Regions IX-X).
PCMD is currently conducting the second round of FMRs which
should occur when a contract has completed 30 months of performance.
Overall, PCMD is not meeting the schedule goal for these reviews. As
of this date, eight contracts have been completed, 18 contracts have
reports in process, seven contracts have been scheduled during
September 1991, and 12 contracts are pending. One of the pending
contracts, ICF Technology, Inc., did not have an initial FMR. This
contract is in its twenty-sixth month of performance with approximately
$2.4 million of billed costs.
The initial round of FMRs identified problems with each of the
36 contracts reviewed. Problems were disclosed in the areas of
timekeeping (20 of 36); timesheets and travel (21 of 36); indirect rates
and costs (29 of 36); other direct costs (22 of 36); billing systems (14
of 35); and accounting systems (6 of 36). These deficiencies and
weaknesses reduce EPA's level of assurance that contract dollars are
safeguarded against waste, loss or abuse. Further, a portion of
identified problems still remain unresolved. PCMD's internal FMR
tracking and monitoring system indicates that over half of the
deficiencies and weaknesses are still being reported as open.
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Preliminary results from the eight contracts that have undergone a
second review identify recurring problems.
Financial Cost Audits
Using the results from the initial round of FMRs, PCMD
requested the EPA OIG to initiate nine interim direct cost audits
(Ecology & Environment, Inc., Donohue & Associates, Jacobs
Engineering Group, Inc., EBASCO Environmental, Roy F. Weston, Inc.,
WW Engineering & Science, Black and Veatch (two contracts) and
CH2M Hill) and one "special audit," CH2M Hill. Audit reports are
available on six of the interim direct cost audits. The range of elapsed
time to produce an audit report from the date of request was two to
fourteen months, with an average of eight months. The EPA OIG has
audit cognizance for Ecology & Environment, Inc., Donohue &
Associates, WW Engineering & Science, and CH2M Hill. The
EBASCO Environmental and Roy F. Weston, Inc., requests are
outstanding (the Defense Contract Audit Agency (DCAA) has audit
cognizance for both contractors) and CH2M Hill's interim and special
audits are outstanding (EPA OIG has audit cognizance).
Based on a review of the six audit reports, the interim direct
cost audits adequately addressed the referred issues from the FMRs. In
most instances, the issues appear to be resolved. However, some
additional follow-up action is required by PCMD.
As of this date, no incurred cost audits or annual close-out audits
have been completed on the ARCS contracts, which account for total
aggregate billings of $248.1 million as of May 31, 1991. PCMD has
requested the cognizant audit agencies to perform incurred cost audits
on ARCS contractors. However, given the slow start-up of the ARCS
contracts and the almost two-year cycle to initiate and complete
incurred cost audits, the cognizant agencies should only now be
completing work on the $3.2 million of costs incurred in FY88.
PCMD has not issued detailed procedures to guide contractor
submission of their annual completion claims. Such procedures will be
required to allow audit of annual claims, once the incurred cost audits
are completed.
Of the 23 contractors and 45 contracts under ARCS, EPA OIG
has audit cognizance for six of the contractors and 13 of the contracts.
These 13 contracts account for 30 percent of the current total billings.
EPA OIG has had audit cognizance for one of the contractors, CH2M
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Hill, since the inception of ARCS and acquired the audit cognizance
for the other five from DC A A since March 1991.
A substantial growth in audit responsibility and workload resulted
from implementation of ARCS. Under the REM contracts audit
requirements were an annual incurred cost audit for each of the three
contracts and a final close-out audit at the end of each contract
performance period. EPA currently estimates an annual need for 23
incurred cost audits, 45 annual close-out audits and potentially eight-ten
annual interim direct cost audits.
Findings
The DCAA and the EPA OIG, cognizant audit agencies for
ARCS contracts, have provided little or no financial audit coverage of
these contracts. Without this independent audit coverage, EPA is
unable to give reasonable assurances that contractor billings are
appropriate and that contract dollars are safeguarded against waste, loss
or abuse.
The EPA OIG has developed a strategy that would allow it to
provide audit coverage for its six ARCS contractors. In addition, EPA
OIG has entered into negotiations with DCAA in an effort to accelerate
the audits for the other 17 contractors. Part of that strategy would
have DCAA transfer audit cognizance for six of the 17 ARCS
contractors to the EPA OIG. With the additional six contractors, the
EPA OIG would have audit cognizance for 12 contractors and 28
contracts. These 28 contracts would account for approximately 60
percent of the current total billings.
However, implementation of the strategy is contingent on the
EPA OIG receiving additional resources in FY92 and 93. The EPA
OIG's total funding needs are $3.6 million and 6 positions for both
fiscal years. This would permit them to have audit cognizance for 12
contractors and to eliminate audit backlog and be current on audit
requests.
Increased annual audit coverage of the twenty-three ARCS
contractors offers better assurance that the costs billed by the
contractors are "accurate." Increasing audit coverage will also provide
reasonable assurance that contract dollars are safeguarded against waste,
loss or abuse.
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Because financial audit coverage is limited and because any new
coverage is likely to be slow in developing, PCMD's FMRs become an
important capability and deterrent. Absent any contract audit presence,
FMRs provide needed financial oversight. As acceptable audit
coverage is provided in accordance with contract requirements, PCMD
should reevaluate the FMR review cycle.
Regions, depending on capability, have an opportunity to further
strengthen financial controls by undertaking periodic surveillance
reviews of contractors' financial records and back-up documents to the
monthly vouchers. This added control will provide an additional
deterrent and the results of these reviews should be forwarded to
PCMD and the EPA OIG. Regional Administrators, working with
PCMD and EPA OIG, should ensure that this process does not
duplicate others or interfere with ongoing audit efforts.
Recommendations
The EPA OIG should develop a strategy to
conduct incurred cost and close out audits in
accordance with contract requirements.
Specifically, he should:
a. finalize a program to address the six
contractors for which the EPA OIG
has audit cognizance;
b. continue to negotiate with DCAA on
audit coverage for the remaining 17
ARCS contractors and other Agency
contractors; and
c. in conjunction with PCMD, evaluate
audit coverage with a view towards
consolidating number, type and
frequency of audits while still
preserving audit integrity.
• PCMD should strengthen the Financial
Monitoring Review program to:
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a. Conduct reviews of the contracts on
a one to two year cycle; and
b. Resolve identified weaknesses
disclosed from previous reviews.
Regional Administrators, working with PCMD
and EPA OIG, should develop a process to
periodically spot check contractor's financial
records and monthly voucher supporting
documentation.
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E. ARCS AWARD FEE PROCESS
Background
ARCS called for the use of a cost-plus-award-fee contract type.
Under this type of contract, the fee is comprised of a base fee portion
and an award fee portion. To provide added incentive for high-quality
contractor performance, the amount of the award fee is keyed to merit.
The base fee, on the other hand, does not vary with quality of
performance, and compensates the contractor for risk, allows for those
charges not accommodated under standard government contracts, such
as financing costs, and provides (possibly) a minimal margin of profit.
A formal performance evaluation procedure has been established
to implement the incentive concept. The procedure requires the work
assignment-responsible RPMs/WAMs and the contractor-responsible POs
to write performance reviews and determine performance quality ratings
for specific categories of contractor performance. The merit ranking
system that accompanies the performance review process is a
consideration in allocating additional work. More assignments are
intended to go to highly-rated contractors, all other things being equal.
The potential financial rewards thus provide a double incentive to
excellence. The contractor also prepares a self-evaluation describing
overall program management performance and technical performance
summaries for each site.
Roles and Responsibilities
The regional contract administration team is comprised of the
RPMs/WAMs, POs, and COs who each monitor contract performance.
Each has a slightly different role. In addition, the team's supervisors
and members of the Performance Evaluation Board and the Fee
Determination Official all participate in this process.
The effectiveness of the contractor performance evaluation
process is dependent upon adequate staffing and a full recognition by
all parties of their roles and responsibilities within the process. The
ability of all parties to serve as a team is crucial to the success of the
management of the cost-plus-award-fee contract.
Every RPM/WAM directs and monitors a contractor's technical
performance on individual assignments. The RPM/WAM maintains
day-to-day contact with the contractor, providing regular feedback on
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performance. At the end of each performance evaluation period, on
notice from the responsible PO, each RPM/WAM prepares a rating
report covering the contractor's work, addressing both strengths and
weaknesses, using standard forms. The WAM/RPM reviews this
information with both his supervisor and the PO.
The PO is specifically responsible for:
• Organizing the ARCS contracts management team, providing
technical oversight, and providing feedback to the contractor and
the RPM/WAM on the award fee process;
• Monitoring performance and preparing a rating report covering
the contractors' program management operation;
• Calling for RPM/WAMs and contractors to prepare technical
reviews;
• Reviewing the RPM/WAMs' and contractor's evaluations and
conferring with the RPM/WAMs to resolve performance
differences;
• Preparing a summary report on the contractors' site-related
performance, seeking fair grades for the general and specific
areas of performance at different sites from different
RPMs/WAMs;
• Integrating the RPM/WAMs', contractors' and the PO's own
evaluations;
• Determining recommended performance ratings for the contractor;
• Assembling and indexing the performance exhibits by contractor;
• Preparing the final Performance Index Rating Scores following
the Performance Evaluation Board meeting; and
• Summarizing the Board decisions in an Award Fee
Recommendation Report with the concurrence of Board
members.
As the legally responsible manager for the contract, the CO's
duties in performance evaluation include:
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• Collaboration with the PO on the program management
evaluation;
• Preparation of the draft and final award fee matrices for
Performance Evaluation Board deliberations on actual fee
amounts;
• Issuance of the fee award letter and award fee package for the
Fee Determination Official's consideration;
• Notification to the contractors of the amount of award; and
• Issuance of the contract modifications to allow the contractors to
bill EPA for the amount of the award fee.
The Performance Evaluation Board is comprised of Waste
Management Division staff working at the section chief, branch chief or
division director level, along with representatives of the Assistant
Regional Administrator or Management Division. The function of the
Board is to assist the Fee Determination Official by establishing the
basis for the award fee finalization. The Board reviews and critiques
exhibits assembled and presented by the POs and agrees on
performance quality ratings for each contractor across all of the
contractor's sites within the region or zone.
The National Fee Determination Official, located in PCMD
headquarters, is responsible for the ultimate fee decision. From the
Award Fee Recommendation Report, the Fee Determination Official
determines the soundness of the decisions and may overrule the
recommendations for reasons of bias, arbitrariness, inconsistency,
procedural irregularities, false or irrelevant data, incomplete information
or other issues contrary to professional practice or to the terms and
conditions of the contract. The decision of the Fee Determination
Official is independent, final, and may not be appealed.
Performance Evaluation Process
The contractor's performance is evaluated against a set of criteria
which have been defined within each region or zone. The typical
process used to evaluate contractor performance is shown in Figure 9.
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Figure 9
Award Fee Process
ARCS Contract
Contract Requirements
On-going Reviews by Remedial Project Managers (RPMs)
Project Officer (PO) Call for Technical and
Program Management (PM) Reviews
Contractor
Self Evaluation
RPM/WAM
Appraisal
Contracting Officer (CO)
Program Management
Appraisal
PO & CO Finalize
PM Appraisal
Project Officer
Preparation and Distribution
of PEB Packages to Membership
Waste Management
Division Director
Branch or Section Chiefs Contracting Officer
Performance Evaluation
Board Meeting
Performance Evaluation Board's Determinations
T
Award Fee Recommendation Report
Performance Index Rating Score
Award Fee Matrix
National Fee Determination Official
Award Fee Decisions
Contracting Officers
Issue Contract Modifications
Contractors Invoice
EPA for Award Fee
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RATINGS. A five-tier rating system is established whereby the quality
of performance is scored on a scale of one to five as follows:
5 -- Outstanding
4 — Exceeds Expectations
3 -- Satisfactory
2 — Marginal
1 - Unsatisfactory
These scores translate into recommended award amounts drawn
from the available award fee pool; a rating of one or less results in no
award fee and a score of five may result in the maximum amount of
award fee. The setting of the score is an exercise in consistency.
Often the burden of establishing consistency and uniformity falls to the
PO, who works with a number of WAM/RPMs overseeing more than
one contractor.
PERFORMANCE CRITERIA. Technical or remedial performance
categories or criteria to which quality grades are to be assigned include
project planning; technical competence; effectiveness and innovation;
schedule, cost and quality control; reporting; communications; resource
utilization/operational efficiency; and effort.
Program management focuses on the extent to which the
contractor has structured and initiated effective project management
systems, resource identification and deployment systems, sub-contracting
and consultant procurement procedures, regional coordination
procedures, assembly and organization of a responsive program
management team, screening for organizational conflict of interest,
development and adherence to a management plan and quality
assurance plan, establishment and utilization of an effective
management information system and cost/schedule control system,
adherence to contract specified goals, and development of a realistic
equipment and materials list with effective control and deployment
procedures. The individual grades for these criteria are combined to
obtain an overall score for the contractor for each work assignment and
for program management.
Award fee determinations are made under ARCS on a trimester
or semester (after October 1990) basis in the two distinct areas of
contractor performance, program management and remedial planning.
The fees for program management consist of a base fee of three
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percent of the program management costs incurred plus an award fee of
up to seven percent of the program management costs incurred.
The fee structure for remedial planning activities also consists of
a base fee of up to three percent and an award fee of up to seven
percent. However, the award fee pool for remedial planning is not
based on cost incurred but rather upon LOE hours delivered. For
example, if a contract provides for 100 hours of effort at an estimated
cost of $1,000 with a maximum available award fee of $70, then for
each hour of effort delivered, the contractor is eligible to receive a
maximum award fee of 70 cents per LOE hour.
The total award fee pool for remedial planning is further divided
into two phases, Phase I and Phase II. Phase I award fee consists of
40 percent of the available award fee pool for an evaluation period and
is determined by the Performance Evaluation Board's evaluation of the
contractor's remedial planning performance for ongoing work, with the
approval of the Fee Determination Official. This Phase II award fee is
granted when a work assignment is completed and represents the
remaining 60 percent of the total available award fee pool. Since most
work assignments have not been completed to date, listed values for
remedial award fees do not yet include any significant Phase II award
fee portions.
The award fee is calculated using the performance score and the
LOE to which the performance applies. As of the end of May 1991,
the total fees (base plus award) paid over the life of the ARCS
contracts have been approximately five percent of the total costs, well
under the ten percent maximum fee possible under the contracts. The
total fee which could have been earned by the contractors, based on the
work performed (base fee plus award fee pool) would have been
approximately eight percent. The five percent fee paid is significantly
less than the six to seven percent fee typically paid under EPA's cost-
plus-fixed fee contracts.
Critics of this form of contract have characterized the award fee
as a bonus. While any definition is arguable, it is the clear intent of
these contracts that the award fee be a performance-driven incentive
which is to be earned by the contractor.
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Issue
In the implementation of the award fee process across regions
and zones, the systems are highly variable and performance has become
only one among a number of criteria for the allocation of assignments
for work on new sites. There is no clear indication that the award fee
or the performance based assignment of new work is demonstrating the
ability to directly leverage superior performance from remedial
contractors.
Discussion
As much as four years into the ARCS contracts, we have
examined potential theoretical indicators of the success of the award
fees. Dollar values associated with award fees over all work
assignments for a given contractor are not extremely high. However,
when considered in the aggregate across multiple regions or zones, the
dollars earned in award fees over the life of the contracts to date are
considerable, averaging approximately $520,000. For one contractor,
award fees to date have reached over $2 million. (See Appendix.)
These dollars are believed by regional interviewees to be of greater
importance to the corporate offices than to the contractor staff directly
involved in site work. Both contractors and regional staff expressed
the belief that the qualitative narrative ratings used to describe
contractor performance offered more leverage than the dollars in the
award. Contractors are sensitive to the impact which their reputation
with EPA may have with other potential clients.
Numeric ratings are developed within the region or zone for
each work assignment for each contractor in a document known as the
Regional Evaluation Summary. Ratings from all active work
assignments by a contractor within a region are aggregated and divided
by the number of LOE hours for that period to provide relative ratings
of performance expressed as a percent known as the Rating Period
Performance Index Rating Score. The Performance Index Rating
Scores from one fiscal year are combined and similarly weighted
against the number of LOE hours to determine the Year-End
Performance Index Rating Scores, which should control the allocation
of work assignments over the subsequent year. Program management
was designed to have been included in work assignment distribution as
well by a method determined by the PO.
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Under this system, contractors performing unsatisfactorily should
receive no new work assignments for the year under review and should
be considered for future work assignments only if performance on
existing work improves. Conversely, contractors who perform in a
superior manner should receive a proportionately larger share of the
work assignments for the new year.
An examination of the relationship between the Performance
Index Rating Score over one rating period and the percentage of work
assignments received by contractors in the subsequent rating period
provided no clear positive correlation. Because of the small number of
performance periods to date, it was infeasible to look for annual
relationships. Rather, data were examined across a number of regions
for a cause-effect relationship between the Performance Index Rating
Scores for one rating period and the percentage of the overall work
assigned, which was received by the specific contractor. (See
Appendix.) In other words, while we would expect to be able to find
a direct relationship between score and percentage of available work
assigned, it could not be established from the available data.
Interviews in all regions and zones indicated that performance is a
strong element of the consideration for the assignment of new work
assignments. However, other criteria such as a test of conflict of
interest, location of the contractor's office in relation to the site,
capacity available under the theoretical maximum yearly usage rate, and
demonstrated expertise on similar sites clearly are strong controlling
factors as well.
Performance Index Rating Scores (see Appendix) show examples
of similar frequency distribution patterns across the regions and zones
with a series of generally bell-shaped curves centering at about the
sixtieth percentile with a general absence of extreme values. Since the
Performance Index Rating Score is composed of a series of averages,
the numbers which are assigned on a given work assignment reflecting
either poor or superior performance are rapidly averaged out. This
seems to be a general problem with using the Performance Index
Rating Score as a gauge of performance. It is insensitive to small or
short-term changes in contractor performance. The Performance Index
Rating Score reflects the performance of the contractor overall rather
than on individual work assignments. The score is not designed to be
radically changed by performance on a single site.
EPA personnel are very aware of the resources involved in
changing to a new contractor on a site. Not only are there the direct
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contract costs associated with a possible termination but also the less
tangible resources involved in bringing a new organization up to speed
on a complex array of conditions typical of a Superfund remedial
project. The PO and RPM/WAMs usually go to great lengths to work
with the contractors and bring about a mutually satisfactory result on
the sites. The EPA staff relate in interviews that they are more reliant
upon one-on-one interactions with contractor staff to bring about
resolution of issues than they are upon the formal contractual
mechanisms available to leverage the contractor as a consequence of
poor performance.
The importance of keeping good records throughout the rating
period cannot be overemphasized. By developing the score all along
through the trimester or semester one can avoid the possibility of
events later in the rating period skewing the final score for that work
assignment. Further, there is great value in providing timely feedback
to the contractors. Interviews with contractors, corroborated by
discussions with the regions, indicate that the contractor community
wants to do effective work on the sites. Prompt and effective feedback
of a consistent high quality and level of detail (e.g., Performance Event
Reports for good and flawed performances and meetings with the
contractors following the Performance Evaluation Board meetings) were
cited as significant levers for greater attention to issues and improved
performance by the contractors.
Finding
The process in the regions for the award of new work
assignments is highly variable. The regions stated during the
interviews that poor performance limits the award of new work to a
contractor. However, there is no clear evidence that there is a positive
relationship between good performance and the award of new work in
the subsequent rating period. Therefore, it is unlikely that the award
fee process, in its current implementation, is a significant lever for
superior performance from the contractors as had been the intent of the
designers of the ARCS.
Recommendation
The Assistant Administrators of the Office of Solid Waste
and Emergency Response and the Office of Administration
and Resource Management should issue an endorsement of
the Agency's policy on the use of award fee as a prime tool
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to leverage contractor performance by instituting a two
phased approach:
• Suspend the issuance of new site assignments to
contractors with unresolved unsatisfactory
performance on work assignments; and
• Take appropriate sanctions, including
termination, against contractors who persist in
their failure to correct deficiencies.
Issue
Because of the slow availability of remedial work under the
early phases of many of the ARCS contracts, a number of contracts
have still not received assignments for their base quantity of hours.
During this period, which was originally anticipated to have been two
years, work assignments were to have been made on a roughly
rotational basis with regard to criteria other than performance until all
contractors had received their base LOE hours. There is a highly
variable status and interpretation of this base period by the regions and
zones. In some cases, new site assignments are still made on the basis
of an even distribution without regard to contractor performance on
prior work. In others, performance has been considered throughout all
work assignments.
Discussion
The ARCS theory of allocation of work assignments across
contractors within regions or zones was based upon the distribution of
contract minimum or base LOE hours to contractors over the first two
years of the contract. This early period in the contract was designed to
allow contractors who were inexperienced in Superfund remedial work
to come up to speed and compete on an even footing with the larger
firms who had worked with the Agency under REM. Further, this
initial period was designed to provide the Agency, through regular
evaluations, with a track record on the contractors' performance for
future allocation of work. During the base period, ARCS guidance
called for work assignments to be allocated to the contractors on the
basis of the size of the contract awarded, the location of the
contractors' offices within the region or zone, potential conflict of
interest, and any unique experience or capability possessed by a given
contractor or site manager. ARCS guidance stated that, to the extent
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practical, the Agency would allocate initial work assignments to
contractors in proportion to the size of their contracts.
However, after the base LOE hours had been assigned to the
contractor, the number of new work assignments to be made to ARCS
contractors was to be based upon their relative technical and program
management performance.
In the execution of ARCS, expectations were not fully realized.
The LOE work did not materialize in the time frame expected. All of
the contracts have been in place for a minimum of thirty months.
Nonetheless, a number of contractors have not yet invoiced or obligated
their base LOE hours. (See Appendix.) The regions and zones have
developed detailed decision trees, matrices and algorithms to assist
them in their work assignment allocations and increase the
standardization of their processes across contractors. Examples of these
regional tools are shown on the Appendix. Almost all of the regions
utilize performance as one of the decision criteria in the assignment of
new work, regardless of their formal standing with respect to the base
period.
Finding
One firm contract stipulation appears to be the guarantee of a
base number of LOE hours to the contractors. Regions are likely to be
held to this requirement to some degree. However, the regions and
zones must move immediately to a performance-based system for the
allocation of new work assignments, if contractors are to be given
greater incentive for quality performance.
Recommendation
FY92 work assignments for new sites should be assigned to
contractors in relation to their overall performance within
the constraints of the contract.
Issue
Program management is not included as a consistent element
across all regions and zones in the development of the Performance
Index Rating Score. Therefore, the efficiency and effectiveness of the
contractors' program management activities are not routinely reflected
in these rating scores.
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Discussion
How program management is factored into the calculation of the
Performance Index Rating Score for the allocation of new work
assignments is variable across the regions. Only Region II and the
ARCS-Central zone currently include program management scores in
the calculation of their Performance Index Rating Scores. Since
program management is such a significant element of contractor
performance, it is logical that it should be a determining factor in the
allocation of new work.
Recommendation
Contractors' performance should be evaluated on the basis of
the quality of the work in both the program management
and remedial elements of their assignments across all regions
and zones. Contractors' accomplishments with regard to
lowering program management costs and adherence to
national targets should receive significant consideration in the
award fee process.
Issue
The principal players in the regional and zonal award fee process
include the RPM/WAM, the PO, the CO and the Performance
Evaluation Board. The challenges presented by the engineering,
contractual, legal and administrative aspects of this complex program
demand involvement from supervisory personnel who can add depth to
the knowledge of the immediate team and ensure full participation from
all parties.
Discussion
ARCS processes differ in each region. Some regions have
supervisory sign-off on the full evaluation paper trail associated with
ARCS. Others have only limited involvement of first line supervisors
except when problems arise. The highly complex nature of remedial
efforts on Superfund sites and the ARCS processes to support these
activities demand direct involvement of experienced personnel. As the
Superfund remedial program came on line, the pool of personnel
experienced in remedial site activities was extremely small. Both
Agency and contract firms drew from this limited pool. As a result,
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the remedial program required the hiring of numerous individuals to
reach the necessary staffing levels. Some of these individuals were
highly skilled in a related field and were able to quickly transfer their
knowledge. In other cases, as with many of the Remedial Project
Managers hired in accordance with the findings of the 90-Day Study,
staff were hired with academic credentials but limited experience. In
many cases, experienced project managers sought advancement from
site management to supervisory positions.
Finding
Supervisors in many cases represent the experienced site
managers from previous remedial projects. These individuals must
carry direct responsibility for detailed oversight. They should
participate fully in all aspects of the ARCS award fee process and be
directly accountable for its effective and knowledgeable implementation.
Recommendation
Key supervisory management personnel should be held
accountable as full participants in the implementation and
oversight of the ARCS performance evaluation process to
supplement the knowledge base available to the staff charged
with the routine operation of the award fee process.
Issue
The ARCS award fee process was designed to leverage superior
performance from the contractors. Two to four years into the
decentralized management of the ARCS, the multiple steps in this
labor-intensive process and the associated paperwork have been
described by some as excessive and beyond the requirements of other
related cost-plus-award-fee contracts.
Discussion
Regional and headquarters personnel identify the award fee
process as a labor intensive effort when viewed in the aggregate of all
steps across all of the players. As the processes vary significantly in
their intensity and levels of documentation, quantitative estimates of the
amount of time spent in each region or zone are difficult to establish.
A national program was established through guidelines offered by
OSWER and PCMD of the Office of Administration and Resources
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Management. The implementation of ARCS in this decentralized
program has been a regional decision. Some common threads come
from the guidance manual and periodic national meetings. However,
there are clearly at least seven different systems. For the benefit of
ARCS in its present and future configurations, findings of the
individual teams should be shared in a national forum.
The amount of effort required for the contractor to develop the
contractually-required self-assessment of performance is considerable.
The contractors interviewed felt it was a valuable exercise. The self-
evaluations are used by the POs to detect differences between the
RPMs and the contractors. The POs see the merit in these packages,
while they were largely questioned for their utility by the
RPMs/WAMs. EPA pays for the development of the self-assessments
and they seem to be a useful tool which provides balance to the
system. Nonetheless, the costs and benefits of this package should be
reviewed by each team and revised according to regional or zonal
needs.
Finding
The desire for continuous improvement drives the need to look
for the value-added elements of the award fee process and work to
eliminate those parts which are not considered worth the cost.
Recommendation
Regional Administrators, in cooperation with the Office of
Administration and Resources Management and the Office of
Solid Waste and Emergency Response, should establish
regional or zonal teams to evaluate and report within 120
days on recommendations to streamline the award fee system
with particular attention to the paperwork burden and issues
of national consistency. Teams should also be charged to
examine the Performance Index Rating Score to determine if
it is the best tool to capture performance and translate it
into a criterion for the assignment of new work.
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F. EPA MANAGEMENT PROCESSES AND ORGANIZATION
Introduction
The foregoing analysis focused in large measure on issues
specifically related to ARCS contract operations. However, a broader
set of management factors influences both how Superfund managers
and EPA as a whole respond to increasingly complex mission
responsibilities. These management factors range from ARCS-specific
processes, to the Superfund decision structure, to Agency-wide policy.
Due to their wide impact, the successful resolution of these issues will
contribute directly to resolving most of the previously discussed
problems. For ease of discussion, these issues have been grouped into
the following areas: Superfund acquisition structure, decentralization,
management information, workforce development, and Agency
acquisition structure.
Superfund Acquisition Structure
Issue
Individual acquisition decisions for major Superfund programs
are not handled as integral parts of a larger system.
Discussion
The ARCS contracts represent the largest system of contracts in
EPA and one of the largest in the civilian portion of the federal
government. Going further, the ARCS contracts are a subset of an
overall system of contracts for meeting Superfund mission needs. In
turn, the EPA-administered Superfund contracts are but one mechanism
within an even broader system for accomplishing the clean-up of
Superfund sites. Other components of the broader acquisition system
include states, other federal agencies, and PRPs.
Although Superfund acquisition is a system, the task force found
no evidence that it has been managed as one. No single focal point of
responsibility exists for managing acquisition; instead, responsibility is
fragmented among various components of the program office, PCMD,
other headquarters offices, and the regions. No individual is granted
authority, empowered with resources, and charged with accountability to
ensure that the Superfund contracts and other acquisition mechanisms
are best utilized to meet mission needs.
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Given the reliance of the Superfund program on the services of
outside parties, the management of the acquisition of those services is
of unique importance. A systems management approach takes an
integrated view of the human, information, and financial resources
required to support the program. The systems management approach
also takes an integrated view of the processes required to support the
program, including such diverse components as budget, financial
management, information management, and procurement.
The Agency should now recognize the unique importance of the
Superfund acquisition system and take the necessary measures to
establish a systems approach. The system management concept will
maximize confidence that mission needs are being met in a strategic,
fully integrated way, using a conscious decision process that addresses
the alternatives for acquisition.
Recommendation
The Assistant Administrator of OSWER should
establish a Superfund Acquisition Program
Manager reporting directly to the Assistant
Administrator responsible for overseeing
Superfund acquisition decisions and activities.
The initial major responsibility should be to
focus on the ARCS system and its related
activities.
Decentralization/Centralization
Issue
The balance of ARCS-related authorities and responsibilities as
distributed between headquarters and the regions and the exercise of
those responsibilities may not be operating in an optimal fashion.
Discussion
As the Agency established ARCS, it was recognized that this
program would operate more effectively if it were decentralized.
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The success of such decentralization presupposes that certain
minimum oversight authorities and responsibilities remain centralized.
These central oversight functions include: maintenance of national
monitoring systems, performance of program evaluation, and
formulation of national policy and guidance.
EPA's experience has shown that the difficulty with effective
decentralization usually stems from problems in identifying and
maintaining the proper balance between firm central oversight and
effective regional authority to make decisions. In the case of ARCS,
indications are that the Agency has successfully placed full authority in
the hands of appropriate regional officials. Each region exercises
programmatic and administrative responsibilities relatively independent
of the other regions, consulting with headquarters when a question
arises concerning a legal issue or consistency with national policy.
Headquarters does not oversee or coordinate these individual
regional decisions and, in general, has not maintained an aggressive
ongoing monitoring and evaluation system of both program and
administrative aspects of ARCS. Such a monitoring system is critical
to support policy formulation and therefore responsive program
adjustments.
Further impeding headquarters from guiding ARCS centrally is
the fact that ARCS was initially implemented without imposing major
structural changes to either the regional or the headquarters
organizations. The additional functions and responsibilities were
accompanied by resources which were absorbed largely within existing
organizations. Such an approach obscures the identification of ARCS
as a separate program requiring focused management attention and
resources.
Since ARCS is not uniformly recognized as a national program
requiring a focus of national management attention, it has not been
managed in headquarters or frequently in the regions as a system.
There needs to be a concerted effort to maintain an ongoing integrated
understanding of the status of the regional elements of ARCS and to
control the program nationally without damaging the regional flexibility
built into the decentralization model.
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Recommendations
The Assistant Administrator (AA) for OARM, in
concert with the AA for OSWER, should
examine the headquarters and regional
responsibility assignments to identify the actions
necessary for creating a strong, central program
monitoring, evaluation, and policy formulation
role for ARCS in order to support a controlled
evolution of program policy. An implementation
plan based on the results of that examination
should be submitted to the Administrator within
the next 120 days.
Total Quality Management (TQM) concepts
should be employed to establish an "ARCS
Council" consisting of headquarters and regional
personnel and ARCS contractor representatives,
to identify and implement improvements to
ARCS contract management on a continuous
basis. This team must include regional
management officials to assure the integration of
technical/program considerations and contracts
management issues and to provide the continuing
top level management ownership of and
involvement in the process.
Regional Administrators should ensure the
utilization of a team approach to ARCS
management, bringing together contracting
officers, technical staff and supervisors in the
regions and headquarters representatives, as
appropriate, to ensure successful contract
management. Regional teams should be
encouraged to report back to the ARCS Council
with recommendations for increased efficiencies
in ARCS contract management.
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Management Information Systems
Issue
The existing national and regional management information
systems are not optimally constructed or operated in a manner to best
support the administrative and programmatic aspects of the ARCS
program.
Discussion
A major program such as ARCS clearly has informational needs
in order to be under the effective control of headquarters and regional
management and to facilitate regional staff operation.
Headquarters requires information that represents a national
perspective with sufficient detail to identify problems, trends, and
successes, in order to support policy formulation and to satisfy national
information dissemination requests. (Not so much detail, however, that
headquarters staff is in the position of micromanaging — making
decisions that are better made at the regional level under the
decentralized model.) This applies to programmatic data as well as
contract management information.
The regions, on the other hand, have informational needs that
relate to decisions on individual contracts, sites, regional
resources/staffing, and work assignments. All levels of regional
management and staff have information needs to support them. Absent
central systems, local ones will be established.
Centrally, the ARCS Contract Tracking System (ACTS), an
automated contract tracking system, was developed by PCMD to
provide Regional Contracting Officers with a tool to monitor and
manage the 45 ARCS contracts. The system tracks the scheduled
submission and approval of work assignments/work plans, and invoices,
calculates award fee pools, and retrieves data through a variety of
reports.
In addition, OSWER designed the Financial ARCS Computerized
Tracking System (FACTS), a menu-driven national data base to meet
programmatic needs of ARCS, but deferred implementation due to the
creation of ACTS. FACTS was designed to provide informational
support primarily to the PO and WAMs in the regions and to the
96
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headquarters staff. The system was to consist of three related
databases: a contracts database containing general information about the
individual contracts; a technical support database containing work
assignment information including total, monthly, and budget LOE
hours; and a program management database containing cost information
relating to the program management categories.
The Contracts Information System (CIS), maintained and used
exclusively by PCMD, provides contracts management data nationally
but primarily focuses on the process leading up to and through award.
Those who would use ARCS data have concluded that current
systems are inadequate and a national system is needed that serves the
administrative, programmatic, and oversight needs of headquarters and
the operating needs of the regions.
Recommendation
• The Assistant Administrator for OARM, in
concert with OSWER, should commission an
effort to establish a coordinated management
information program for ARCS to serve regions
and headquarters, program and administration.
This should focus on utilizing existing and
designed systems (ACTS, FACTS, CIS, regional
systems, etc.).
Workforce Development/Distribution
Resource Distribution
Each region should have an appropriate mix of COs, POs, and
RPMs to handle the work load in the most efficient manner for that
particular region. That mix may vary according to number/size of
contracts and work assignments, geographic distribution of sites, type of
work being performed, skills/experience of regional staff, and regionally
unique structures, processes and procedures. Even with these
influencing factors, the mix should only vary within certain acceptable
ranges, or operation of the program may be hampered. The Appendix
contains information on the numbers of regional ARCS staff and
responsibilities.
97
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Issue -- Training
For EPA staff involved in ARCS, much of the training offered
or required is general ~ e.g., the contracts administration course.
Regional technical staff are faced with learning much about federal
contracts administration that does not apply to them and must sort out
that which is important to the performance of their function as POs or
RPMs. In addition, the team problem solving approach using TQM
provides an opportunity both to focus on particular problems/issues and
to establish a cooperative team rather than an individual office oriented
approach.
Discussion
Assuring that EPA staff had the appropriate experience and
training to oversee contractors has been a concern and has been
addressed in previous ARCS and contracts management studies. To
address high turnover of regional staff, the grades were raised to
journeyman level GS-13, training courses were designed for ARCS
staff, and other actions such as establishing user groups were taken.
While these actions have had some effect, there is still a relatively new
staff in the regions. The following is the proportion of regional staff
with less than three years of relevant experience:
RPMs 53% (271 of 511)
POs 61% (14 of 23)
COs 74% (17 of 23)
Additional information on the experience levels of the regional
ARCS workforce is contained in the Appendix.
To overcome the problems associated with relatively
inexperienced staff with responsibility for significant activities in a
"mission critical" program, both PCMD and OSWER have designed
training packages for ARCS regional staff.
PCMD conducts two courses for program staff (POs and RPMs):
• Project Officer Course - required for all staff
before they can qualify as POs; and the
• Contract Administration Course — required for all
staff before they can qualify as POs or WAMs.
98
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OSWER conducts courses for RPMs under the On-Scene
Coordinator (OSC)/RPM Basic Training Academy. These are delivered
in three two-week sessions and a week long session devoted to health
and safety. Additionally, the Superfund University Training Institutes
program conducts advanced training on current critical interest topics
designed to integrate academic technical knowledge and practical
experience.
Contracting Officers are required to complete a series of training
requirements and meet minimum experience levels to qualify for the
various contracting warrants.
To supplement these training activities, some regions have
designed and conducted other courses to meet special requirements.
For instance, Region V conducted a TQM course with its COs, POs,
and RPMs (and some contractor personnel) to address particular issues
identified as problem areas and to integrate the staff into a team using
cooperative approaches to problem solving. This proved so successful
that Region V has been asked by other regions to share the course
design.
Recommendations
The Assistant Administrator for OSWER, in
conjunction with OARM, should direct the newly
created Superfund Acquisition Program Manager
to design and deliver to each region a tailored
employee development/training program for
ARCS personnel which focuses on providing
specific skills/knowledge that the ARCS
Contracting Officers, Project Officers, and
Remedial Project Managers must have to
operate effectively and efficiently.
• Following the Region V model of utilizing the
TQM process as a training tool, Regional
Administrators should take the necessary steps to
mold the ARCS regional and contractor
personnel into "teams" that address ARCS issues
from a unified, strategic, quality improvement
perspective.
99
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Agency Acquisition Structure
Issue
Acquisition Management — i.e. policy and guidance on how EPA
gets its mission accomplished through a wide range of contracts,
construction grants, program support grants, and interagency agree-
ments - lacks a clear focal point within the Agency. Lack of
integrated management in this area can impede accomplishment of
EPA's multiple, complex missions.
Discussion
At its creation in 1970 and for the next decade, EPA was
oriented toward regulation development, delegation of operations and
enforcement to states, supporting state environmental activities through
program grants, and monitoring state operations with EPA regional
personnel. Major support for wastewater treatment facilities was
provided through project grants to localities.
In the 1980s, these activities continued, augmented by significant
new roles in toxics and pesticides control, direct design and
construction at Superfund sites, direct support to schools for asbestos
removal, and the conduct of extensive environmental research and
monitoring activities -- a radical expansion in responsibilities, with
continuing constraints on EPA staffing. For both policy and staffing
reasons, EPA is increasingly dependent upon extramural organizations
and financial arrangements (See Table 13).
TABLE 13. EXTRAMURAL FUNDING -- FY90
Assistance Awards
Grants, loans, cooperative agreements $853 million
Construction grants $1,953 million
Interagency Agreements $300 million
(disbursements)
Procurement Contracts $1,130 million
Total $4,236 million
Approximate Total EPA FY90 Budget $5,462 million
Overall, more than three-quarters of the financial resources
provided annually to EPA are deployed through extramural transactions/
100
-------
instruments. In addition, some individual multi-year major acquisitions
such as ARCS entail the planned expenditures of billions of dollars.
Procurement contracts, grants and interagency agreements each
operate under separate, distinct sets of rules that vary in specificity and
focus. Frequently, significant discretion is available to EPA managers
in the selection and use of the three instruments. At present, use of
those instruments is not managed within a common framework that
guides the efficient, effective and economical use of acquisition
mechanisms.
Organizational Arrangements
The present organizational structure was created in response to
conditions existing two decades ago, when the role of procurement was
of lesser importance in accomplishing Agency missions and the mix of
assistance activities was substantially less complicated. During the
intervening years, marginal adjustments have been made to respond to
new policy initiatives (e.g., government-wide suspension/debarment) or
new patterns of business (loans to schools for asbestos removal; large
interagency transfers to support Superfund; expanded procurements and
assistance support to the environmental research program).
The combination of these significant program changes and the
major realignment of procurement responsibilities reflected in
decentralization of contracting to the regions calls for a broad-gauged
reassessment of EPA's organization for acquisition management.
Operational functions for assistance/IAGs are distributed among twelve
offices, while procurement operations are performed at thirteen separate
centers. PCMD monitors selected contractor financial systems and
advises on indirect cost rates for both contracts and grants. The Grants
Administration Division (GAD) provides leadership on debarment and
suspension for both grants and contracts. Policy functions are divided
between PCMD and two branches in GAD. Quality assurance and
performance monitoring are the responsibility of several staffs that have
little interaction.
From a management perspective, the increasing complexity of
Agency operations is forcing greater management integration of
extramural activities in the regional offices, EPA laboratories and
many headquarters program offices. Similar integration of policy and
monitoring functions would be appropriate.
101
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Status of Acquisition Management
The organizational fragmentation and division/branch level status
of acquisition management functions is not congruent with the
significance of acquisition activities for the accomplishment of EPA
missions. At the Department of Energy, the acquisition management
function is directly supervised by the Deputy Secretary; at NASA, an
Assistant Administrator reporting directly to the Agency head is directly
responsible for the function. In contrast, at EPA the function is
divided into two organizations at the division level, three levels
removed from the Administrator. The presence of a high level office
to organize and interject acquisition issues into EPA policy
deliberations could be a significant positive force in designing program
strategies.
Recommendation
• The Administrator should direct the Assistant
Administrator for OARM to provide within 60
days an evaluation of the feasibility of
establishing an Office of Acquisition Management
reporting directly to the AA. Responsibilities of
the Office would include:
1. policy leadership, monitoring, operations,
evaluation and human resources development
related to procurement, assistance (grants,
cooperative agreements, loans) and interagency
acquisition transactions; and
2. policy leadership on major systems acquisition for
the Agency.
102
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APPENDIX
NPL Profile A-l
ARCS Planned Expenditures A-2
ARCS Contractors and Subcontractors by Region A-3
Summary of the ARCS Contracts by Region A-10
ARCS Invoice Analysis A-13
ARCS Contracts Overview by Region A-38
Ratios of Program Management to Total Contract Outlays .... A-44
Comparison of ARCS and REM III/IV Program
Management Costs A-53
Contract Administration Process A-54
Current ARCS Organizational Reporting Relationship A-55
ARCS Equipment Purchases A-56
ARCS Contractors Cognizant Audit Agencies A-57
ARCS Contractors Total Dollars Billed A-58
Audit Cycle A-61
Summation of Award Fees by Contractor A-62
Correlation Between Performance Index Rating Scores and
Subsequent Work Assignments Received by Contract
(Regions I, III, IV, and V) A-64
Performance Index Rating Scores (Regions I, II, III, IV, V, and
ARCS-Central) A-67
ARCS Award Fee Tracking System A-71
Work Assignment Decision Tree A-86
103
-------
ARCS Contractor Performance Criteria Matrix A-87
ARCS Contract Award Cycle A-88
Regional ARCS Workforce Survey A-89
Experience Levels of Regional Workforce A-90
104
-------
2-Oct-91
NPL Profile*
Chart displays the number of NPL sites in each stage of the pipeline.
An NPL site may be in more than one stage.
Region
I
II
III
IV
V
VI
VII
VIII
LX
X
Total
iNPL**
84
199
149
153
260
69
59
43
100
68
1184
J*re
RI/FS
14
3
4
15
34
2
1
2
7
11
93
RI/FS
40
113
91
80
132
23
32
27
65
45
648
RD
25
58
34
31
59
18
14
21
15
8
283
4
RA
11
47
27
26
39
28
11
16
13
10
228
* Source: CERCLIS (9/23/91)
** Final NPL sites only. Does not include proposed and deleted sites.
Federal Facilities included
Sites that have more than one type of remedial activity are counted once, and only
once, under each activity.
A-l
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A-2
-------
ARCS Contractors and Subcontractors by Region
Region I
Prime: CDM Federal Programs Corporation
Affiliate: Camp, Dresser & McKee, Inc.
Subs: Barry Lawson Associates, Inc.
Cambridge Analytical Associates, Inc.
Geotechnical Corporation
Gradient Corporation
Rizzo Associates, Inc.
Project Management Associates, Inc.
Prime: Authur D. Little, Inc.
Subs: Havens & Emerson, Inc.
Remediation Technologies, Inc.
Prime: Metcalf & Eddy
Subs: CompuChem Laboratories, Inc.
Enseco, Inc.
Guild Drilling Co., Inc.
ICF Technology, Inc.
New England Boring Contractors of CT
Prime: Ebasco Services, Inc.
Subs: SEA Consultants, Inc.
Weston Geophysical Corporation
Prime: NUS Corporation
Subs: Badger Engineers, Inc.
GHR Engineering Associates, Inc.
Prime: TRC Companies, Inc.
Affiliate: Alliance Technologies, Inc.
TRC Environmental Consultants, Inc.
Subs: Jordan Communications, Inc.
TAMS Consultants
PEI Associates, Inc.
Prime: Roy F. Weston, Inc.
Subs: ICAIR Life Systems, Inc.
Jordan Communications, Inc.
Size
L
L
SB
L
SB
SB
SB
SB
L
L
SB
L
L
L
L
L
SDB
L
L
L
L
L
L
L
L
L
SB
L
L
L
SB
SB
The size refers to the size of the business, i.e., L= Large,
SB= small business, SDB= small disadvantaged business.
A-3
-------
ARCS Contractors and Subcontractors
Region II
Size
Prime: TAMS Consultants, Inc. L
Subs: TRC Companies, Inc. L
Gradient Corporation L
Prime: Ebasco Services Incorporated L
Subs: IT Corporation L
Wehran Engineering L
Prime: CDM Federal Programs Corporation L
Affiliate: Camp, Dresser & McKee, Inc. L
Subs: Burns & Roe Industrial Services Company L
Dynamac Corporation L
Holt & Ross, Inc. SB
C. C. Johnson & Malhotra, P. C. SDB
Nanco Environmental Services SB
Project Management Associates SB
Prime: Roy F. Weston, Inc. L
Subs: Helen Neuhaus Associates SB
R. E. Saniera Associates SB
ICAIR Life Systems, Inc. SB
Prime: Malcom Pirnie L
Subs: CH2M Hill, Inc. L
Prime: ICF Technology L
Subs: Gibbs & Hill, Inc. L
Nanco Labs, Inc. L
The size refers to the size of the business, i.e., L= Large,
SB= small business, SDB= small disadvantaged business.
A-4
-------
ARCS Contractors and Subcontractors
Region III
Size
Prime: NUS Corporation L
Subs: Gannett Fleming Environmental Engineers,
Inc. L
Prime: CH2M Hill L
Subs: None
Prime: Ecology & Environment, Inc. L
Subs: None
Prime: Black & Veatch, Inc. L
Subs: Earth Technology Corporation L
Prime: Tetra Tech, Inc. L
Subs: GeoTrans, Inc. SB
Wapora, Inc. SB
The size refers to the size of the business, i.e., L= Large,
SB= small business, SDB= small disadvantaged business.
A-5
-------
ARCS Contractors and Subcontractors
Region IV
Prime:
Subs:
Prime:
Subs:
Prime:
Affiliate:
Subs:
Prime:
Subs:
Prime:
Subs:
Prime:
Subs:
CH2M Hill
None
Bechtel
ICF Technology, Inc.
COM Federal Programs Corporation
Camp, Dresser & McKee, Inc.
Lee Wan & Associates, Inc.
Project Management Associates, Inc.
S&ME, Inc.
Life Systems, Inc.
C. C. Johnson & Malhorta
Ebasco Services, Inc.
IT Corporation
Sinine Environmental
Roy F. Weston, Inc.
Life Systems, Inc.
Butler-Ackerman Public Relations
Black & Veatch
Radian Corp.
EDGe Group
Jammal & Associates
Ensafe
Size
L
L
L
L
L
SDB
SB
L
SB
SDB
L
L
L
L
SB
SB
L
L
L
L
L
The size refers to the size of the business, i.e., L= Large,
SB= small business, SDB= small disadvantaged business.
A-6
-------
ARCS Contractors and Subcontractors
Region V
Size
Prime: CH2M Hill L
Subs: none
Prime: WW Engineering & Science L
Subs: Limno Tech, Inc. SB
Akderink & Associates SB
Jay Goodman, Ph.D. SB
Prime: Black & Veatch, Inc. L
Subs: Warzyn Engineering, Inc. L
Prime: PRC Corporation L
Subs: ICF Technology, Inc. L
Prime: Donohue & Associates L
Subs: Ebasco Services, Inc. L
ICAIR Life Systems, Inc. SB
STS Consultants, Ltd. L
John Mathis & Associates, Inc. SB
Prime: Ecology & Environment, Inc. L
Subs: none
Prime: Roy F. Weston, Inc. L
Subs: Dames & Moore L
Engineers International, Inc. SDB
Hubbell Roth & Clark, Inc. L
Reed, Queeb, Allison, Wilcox & Associates,Inc. L
Sexton Associates L
ICAIR Life Systems, Inc. SB
The size refers to the size of the business, i.e., L= Large,
SB= small business, SDB= small disadvantaged business.
A-7
-------
ARCS Contractors and Subcontractors
Zone of Regions VI, VII and VIII
(ARCS-Central)
Prime: Morrison Kundsen Engineers
Subs: ICF Technology, Inc.
Prime: CH2M Hill, Inc.
Subs: none
Prime: Roy F. Weston, Inc.
Subs: HRD Engineering
ICAIR Life Systems, Inc.
Prime: Sverdrup Corporation
Subs: Camp, Dresser & McKee, Inc.
Los Alamos Technical Associates
ICAIR Life Systems, Inc.
Prime: Jacobs Engineering Group
Subs: Terracon
McClelland Engineers
Prime: CDM Federal Programs Corporation
Affiliate: Camp, Dresser & McKee, Inc.
Subs: Sverdrup Corporation
Los Alamos Technical Associates
Kellog Group
CC Johnson & Malhorta
Gradient Corporation
Prime: Fluor Daniel, Inc.
Subs: IT Corporation
PEI Associates, Inc.
ICAIR Life Systems, Inc.
Prime: URS Corporation
Subs: Brown & Caldwell
Harza Environmental
Donohue Associates
Shannon & Wilson Eugene
A. Hickock & Associates
Western Research Institute COHBI
Black & Veatch Architect-Engineers
Black & Veatch Waste Science
Med Tox
Size
L
L
L
L
SB
L
L
SB
SB
L
SB
L
L
L
L
SB
L
SDB
SB
L
L
L
SB
L
L
L
L
L
L
L
SB
SB
SB
The size refers to the size of the business, i.e., L= Large,
SB= small business, SDB= small disadvantaged business.
A-8
-------
ARCS Contractors and Subcontractors
Zone of Regions IX and X
(ARCS-West)
Size
Prime: ICF Technology L
Subs: Kaiser Engineers L
Prime: Ecology & Environment, Inc. L
Subs: none
Prime: CH2M Hill, Inc. L
Subs: none
Prime: URS Consultants, Inc. L
Subs: Black & Veatch Architect-Engineers SB
Black & Veatch Waste Management SB
Med Tox SB
Hanson L
Shannon & Wilson L
Prime: Bechtel Environmental, Inc. L
Subs: ICF Technology, Inc. L
Prime: Roy F. Weston, Inc. L
Subs: LSA Associates, Inc. SB
Dames & Moore, Inc. L
Life Systems, Inc. SB
HDR Engineering L
Hall & Associates, Inc. SB
The size refers to the size of the business, i.e., L= Large,
SB= small business, SDB= small disadvantaged business.
A-9
-------
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A-12
-------
ARCS Invoice Analysis
The following spreadsheets present contract-specific information
provided by the Procurement and Contracts Management Division
(PCMD). The invoice data were compiled for the ARCS task force
review. The contract-specific data were obtained as cumulative
values from the invoice vouchers and recorded by PCMD for FYs 88,
89,90 and 91. The FY91 data were cumulative as of May 31,1991.
The charts are organized by fiscal year and grouped by remedial and
program management categories of cost. Various abbreviations are
used in the charts:
K = Contract
PM = Program Management
REM = Remedial
G&A = General and Administrative
ODCs = Other Direct Costs
For the purposes of analysis by the task force, contract-specific data
were used in a variety of analyses. During the analysis process,
several errors in the data were identified and diligent attempts were
made to adjust analyses appropriately. The data have not been
audited, and the possibility exists that additional errors are present.
A-13
-------
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ARCS Contracts Overview - by Region
This chart presents contract specific information provided by the
Procurement and Contracts Management Division (PCMD) and
three ratios derived from the data. The ARCS contracts were
designed with a guaranteed base number of LOE hours — see "Base
LOE (Technical)." The base level of LOE hours was estimated to
require two years for delivery. The base period timeframe is given in
the columns, "Award Date" and "End of 2 Year Base Period."
For this review, PCMD calculated a value for the program
management base for each contract using the total contract program
management estimated value, including all options, divided by the
total LOE hours. The resulting PM/LOE value was multiplied by the
base LOE to derive an estimated value for the program management
base allocation — see "$ Value of Base for PM (w/o equip)."
The last three columns of the chart are calculated ratios to allow
analysis of expenditure data against initial contract estimates:
"Ratio of LOE hours to Base LOE hours" ~ indicates how
actual LOE relates to the established base LOE.
"Ratio of PM $ to PM Base $ (w/o equipment)" - indicates how
actual expenditures relate to an estimated value for
expenditures. (Equipment cost estimates were not included in
the calculation of base program management value, so
equipment was deleted from the actual program management
costs. Given the variability in reporting of equipment cost, this
comparison could have significant flaws.)
"Ratio of PM $ to Total Contract $" - indicates how much of
contract expenditures have been spent on program
management.
Data used to prepare Part A were provided by PCMD (see Appendix,
ARCS Invoice Analysis). Part B was provided by PCMD.
Discrepancies due to data transfer or calculation may exist.
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Ratios of Program Management to Total
Contract Outlays
Notes on the Charts:
The following charts depict the ratios of program management
outlays to total contract outlays for the contracts in each region or
zone, by fiscal year. The source data were provided by the
Procurement and Contracts Management Division and were current
through May 31,1991 (as of September 20,1991 dataset).
The software used to produce the charts automatically assigns y-axis
scales based on the data values. Thus, the scale for the Region 2 plot
is slightly different than the others. The scale for the national
average plot in the body of the report is also different.
Minor discrepancies may exist in the source data for a number of
reasons, including subsequent corrections, rounding, and so forth.
A-44
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COMPARISON OF ARCS AND REMIII/IV PROGRAM MANAGEMENT COSTS
ARCS Contract Summary
Total ARCS charges invoiced as of March 1991
Total Program Management (PM) costs through
March 1991
Total ARCS LOE hours delivered
as of March 1991
($31 PM/LOE hour)
REM III/IV Contract Summary
Total contract cost (with subpool)
Total contract cost (without subpool)
Total Program Management costs
Total REM LOE hours delivered
($27.50 PM/LOE hour)
$227.9 M (28.9% is PM)
$65.9 M
1.88 million hours
$383.2 M (19% is PM)
$308.5 M (24% is PM)
$72.6 M
2.64 million hours
Program Management Costs by Category
ARCS REM III/IV
S Million (% PM) S Million (% PM)
Overhead /Indirect
Direct Labor
Equipment
Fees (Base and Award)
Other Direct Costs
Subcontracts
Travel
26.4 (40%)
18.5 (28%)
7.9 (12%)
4.6 (7%)
3.9 (6%)
3.3 (5%)
1.3 (2%)
24.6 (34%)
17.5 (24%)
6.2 (9%)
4.4 (6%)
7.6 (10%)
9.8 (14%)
2.5 (3%)
Total
65.9 (100%)
72.6 (100%)
A-53
-------
CONTRACT ADMINISTRATION PROCESS
ASSIST IN CONTRACT
CUDSEOUT 15
PREPARE WORK
(WA OR DO)
RECOMMENDTHEUSE
OF SUBCCNTRACTORS
AND CONSULTANTS
3
CONDUCT POST-
AWARD
CONFERENCE
EVALUATE
PERFORMANCE
RECOMMEND
EXERCISE OF
OPTIONS^
RECOMMEND
CONTRACT
MODIFICATION
1 2
CONTRACT
ADMINISTRATION
REVIEW INVOICES/
APPROVAL OF PAYMENT
11
REVIEW
FINANCIAL
STATUS
MONITOR STATUS
OF HOURS & FUNDS
ISSUE
TECHNICAL
DIRECTION
MONITOR USE OF
GOVERNMENT
PROPERTY
REVIEW
CONTRACTORS
TECHNICAL
PROGRESS
REVIEW
KEY
PERSONNEL
CHANGES g
ACCEPT/
REJECT
WORK OR
DELIVERABLE
A-54
-------
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-------
ARCS CONTRACTORS
COGNIZANT AUDIT AGENCIES [1]
Number of
Contractor Contracts
1. Bechtel Environmental, Inc. 2
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
Black & Veatch, Inc.
CDM Federal Programs Corp.
CH2MH1U
Donohue & Associates
EBASCO Environmental
Ecology & Environment, Inc.
Fluor Daniel, Inc.
ICF Technology, Inc.
Jacobs Engineering Group, Inc.
Arthur D. Little
Malcolm Pirnie, Inc.
Metcalf & Eddv, Inc.
Morrison Knudson Env'l Services
NUS Corporation
PRC Env'l Management, Inc.
Sverdrup Corporation
TAMS Consultants, Inc.
Tetra Tech, Inc.
TRC Companies
URS Consultants, Inc.
Rov F. Weston, Inc.
WW Engineering & Science
3
4
5
1
3
3
1
2
1
1
1
1
1
2
1
1
1
1
1
2
6
1
Cognizant
Audit Agency
DCAA
DCAA
DCAA
EPA/OIG
EPA/OIG
DCAA
EPA/OIG
DCAA
EPA/OIG
DCAA
DCAA
DCAA
DCAA
DCAA
DCAA
EPA/OIG
DCAA
DCAA
DCAA
DCAA
DCAA
DCAA
EPA/OIG
TOTAL 45
[1] Information supplied by EPA Office of the Inspector General, as of September 20,1991.
DCAA
OIG
Defense Contract Audit Agency
Office of the Inspector General
A-57
-------
TABLE
ARCS CONTRACTORS
TOTAL DOLLARS BILLED
AS OF MAY 31, 1991
CONTRACTOR/ FY 88
REGIONAL TOTAL K $
CONTRACT AWARD DATE INVOICED
BECHTEL 4 22-Jun-89
BECHTEL 9-10 21-Jun-89
Subtotal 0
BLACK&V 3 29-Jun-88 23,764
BLACK&V 4 2-Jun-89
BLACK&V 5 1-Mar-88 360,467
Subtotal 384,231
COM 1 15-Apr-89
COM 2 15-Mar-89
COM 4 9-Jun-89
COM 6-8 23-Mar-89
Subtotal 0
CH2MHILL 3 3-Jun-88 180,087
CH2MHILL 4 25-May-89
CH2MHILL 5 1-Feb-88 525,810
CH2MHILL 6-8 13-Sep-88 5,642
CH2MHILL 9-10 24-Mar-89
Subtotal 711,539
DONOHOE 5 29-Jun-88 179,000
Subtotal 179,000
EBASCO 1 23-Mar-89
EBASCO 2 06-Sep-88
EBASCO 4 18-Jun-89
Subtotal 0
E&E 3 6-May-88 179,093
E&E 5 6-May-88 120,003
E&E 9-10 10-Mar-89
FY 89 FY 90
TOTAL K $ TOTAL K$
INVOICED INVOICED
144,135 1,031,180
322,138 2,080,168
466,273 3,111,348
1,490,204 11,485,895
21,228 543,718
2,006,734 2,153,445
3,518,166 14,183,058
315,241 890,501
1,045,436 3,850,315
174,361 1,179,757
1,086,035 5,807,307
2,621,073 11,727,880
2,250,118 2,625,615
134,168 1,011,235
4,389,358 3,021,518
2,163,275 3,601,511
376,226 5,123,611
9,313,145 15,383,490
1,770,077 2,701,478
1,770,077 2,701,478
198,916 1,895,226
3,912,104 5,100,153
263,860 997,452
4,374,880 7,992,831
2,047,935 3,735,485
923,574 1,049,192
491,547 1,037,310
FY 91
TOTAL K$
INVOICED
701,620
2,336,456
3,038,076
10,472,528
832,120
1,267,047
12,571,695
1,258,431
2,330,553
714,128
2,461,830
6,764,942
1,712,040
684,770
1,835,475
1,632,456
5,935,637
11,800,378
2,739,165
2,739,165
1,863,210
4,800,752
1,858,679
8,522,640
282,943
1,353,667
1,171,512
CUMULATIVE
SUBTOTALS
1,876,935
4,738,762
6,615,697
23,472,391
1,397,066
5,787,693
30,657,150
2,464,173
7,226,304
2,068,246
9,355,172
21,113,895
6,767,860
1,830,173
9,772,161
7,402,884
11,435,474
37,208,552
7,389,720
7,389,720
3,957,352
13,813,009
3,119,991
20,890,351
6,245,456
3,446,436
2,700,369
Subtotal
299,096 3,463,056 5,821,987 2,808,123 12,392,262
A-58
-------
TABLE
ARCS CONTRACTORS
TOTAL DOLLARS BILLED
AS OF MAY 31, 1991
CONTRACTOR/ FY 88 FY 89 FY 90 FY 91
REGIONAL TOTAL K $ TOTAL K $ TOTAL K$ TOTAL K$ CUMULATIVE
CONTRACT AWARD DATE INVOICED INVOICED INVOICED INVOICED SUBTOTALS
FLUOR 6-8 6-Jan-89 889.235 1,283,365 1,899,571 4,072,171
Subtotal
ICF 2 30-Sep-88
ICF 9-10 28-Jun-89
Subtotal
JACOBS 6-8 30-Sep-88
Subtotal
LITTLE 1 28-Sep-88
Subtotal
MALCOLM 2 26-May-89
Subtotal
METCALF 1 01-Apr-89
Subtotal
MK 6-8 31-Mar-89
Subtotal
NUS 1 16-Sep-88
NUS 3 1-Jan-88
Subtotal
PRC 5 28-Apr-88
Subtotal
SVERDRUP 6-8 24-Mar-89
Subtotal
0
0
0
0
0
0
0
893,310
893,310
181,706
181,706
0
889,235
881,567
142,296
1,023,863
1,646,092
1,646,092
928,254
928,254
508,530
508,530
202,752
202,752
417,807
417,807
1,108,533
5,018,480
6,127,013
2,370,756
2,370,756
540,071
540,071
1,283,365
1,299,330
1,238,726
2,538,056
5,020,773
5,020,773
1,339,559
1,339,559
3,681,385
3,681,385
1,962,139
1,962,139
1,308,915
1,308,915
2,805,766
6,229,584
9,035,350
3,176,028
3,176,028
1,155,498
1,155,498
1,899,571
1,620,315
1,046,707
2,667,022
711,491
711,491
1,005,129
1,005,129
3,096,926
3,096,926
3,449,698
3,449,698
1,676,125
1,676,125
1,814,244
2,987,621
4,801,865
1,992,288
1,992,288
1,333,159
1,333,159
4,072,171
3,801,212
2,427,729
6,228,941
7,378,356
7,378,356
3,272,942
3,272,942
7,286,841
7,286,841
5,614,589
5,614,589
3,402,847
3,402,847
5,728,543
15,128,995
20,857,538
7,720,778
7,720,778
3,028,728
3,028,728
A-59
-------
TABLE
ARCS CONTRACTORS
TOTAL DOLLARS BILLED
AS OF MAY 31, 1991
CONTRACTOR/ FY 88 FY 89
REGIONAL TOTAL K $ TOTAL K $
CONTRACT AWARD DATE
TAMS 2 01-Feb-89
Subtotal
TETRA TECH 3 22-Jun-88
Subtotal
TRC 1 24-Mar-89
Subtotal
URS 6-8 26-May-89
URS 9-10 9-Jun-89
Subtotal
WESTON 1 22-Feb-89
UESTON 2 10-Mar-89
WESTON 4 16-Jun-89
WESTON 5 1-Jun-88
WESTON 6-8 10-Feb-89
WESTON 9-10 1-May-89
Subtotal
W&W 5 31-Mar-88
Subtotal
INVOICED INVOICED
674,841
0 674,841
107,595 716,117
107,595 716,117
83,967
0 83,967
218,345
260,754
0 479,099
265,979
657,270
33,886
271,691 1,180,932
891,000
408,661
271,691 3,437,728
156,243 1,180,095
156,243 1,180,095
FY 90
TOTAL K$
INVOICED
2,130,634
2,130,634
999,969
999,969
602,802
602,802
3,325,253
1,614,207
4,939,460
490,806
941,229
77,703
1,671,185
2,017,924
1,796,621
6,995,468
1,552,101
1,552,101
FY 91
TOTAL K$ CUMULATIVE
INVOICED SUBTOTALS
2,159,207
2,159,207
1,922,231
1,922,231
1,125,681
1,125,681
2,714,723
2,194,212
4,908,935
453,672
356,028
660,566
1,537,895
1,675,018
3,039,598
7,722,777
755,330
755,330
4,964,682
4,964,682
3,745,912
3,745,912
1,812,450
1,812,450
6,258,321
4,069,173
10,327,494
1,210,457
1,954,527
772,155
4,661,703
4,583,942
5,244,880
18,427,664
3,643,769
3,643,769
GRAND TOTAL
248,053,330
A-60
-------
AUDIT CYCLE
Individual
Contract (45)
[1]
Financial Monitoring
Review
Interim Direct
Cost Audit (as needed)
• Financial Monitoring
Review
• Close Out Audit
• Interim Direct
Cost Audit (as needed)
Close Out Audit
• Financial Monitoring
Review
• Close Out Audit
• Interim Direct
Cost Audit (as needed)
Contract Award
JTyear of
performance
1 year of
performance
1.5 years of
performance
2 years of
performance
2.5 years of
performance
3 years of
performance
3.5 years of
performance
4 years of
performance
Individual
Contractor (23)
[2]
Example: End of
Contractor's fiscal year
Initiate incurred cost
audit
Incurred cost audit
Incurred cost audit
Incurred cost audit
[1] All reviews and audits based on individual
contract period of performance
[2] Audits based on annual
period of performance from
start of fiscal year
A-61
-------
SUMMATION OF AWARD FEES BY
CONTRACTOR
This table displays the summation of base and award fees for
program management and remedial elements for each contractor across
all regions and zones. These data are cumulative from the start of the
contracts through May 1991.
A-62
-------
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A-63
S§
0. O
-------
CORRELATION BETWEEN PERFORMANCE INDEX
RATING SCORES AND SUBSEQUENT WORK
ASSIGNMENTS RECEIVED BY CONTRACT (AS A
PERCENTAGE OF THE TOTAL WORK AVAILABLE
WITHIN A REGION/ZONE IN THE SUBSEQUENT
RATING PERIOD)
The following figures represent the correlation between PIRS
scores and award of work as a percentage of the total work available
within a region or zone in the subsequent rating period. Data were
examined across a number of regions/zones for a cause-effect
relationship between the Performance Index Rating Scores for one
rating period and the percentage of the overall work assigned which
was received by the specific contractor. The line drawn through the
plotted data points marked by crosses is the linear regression solution
of the relationship between score and subsequent award of work as a
percentage of the total work available across all contractors for that
time period in that region or zone. The line therefore illustrates the
best fit solution of this direct relationship. If there were a strong
correlation between the scores and the percentage of available work
awarded in a subsequent period, the crosses would be clustered around
the line and more evenly distributed above and below the line.
The limited amount of data available within a region or zone
due to the short period of time these contracts have been in place make
this analysis difficult. The limited number of rating periods precluded
the analysis of PIRS data from full one year and comparing it against
the work allocation in the subsequent year which would reflect the way
the awards are actually made. As time proceeds, the additional rating
periods will permit the examination of correlations on an inter-annual
basis.
A-64
-------
I
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60 -
50 -
30 -
REGION I
WER ALL PERIODS
24
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BO -
7Q -
60 -
50 -
40 -
30 -
20 -
10 -
•12
REGION I I I
ALL RATING PERIODS
24 2B
PIRS SCORES
A-65
-------
80
REGION IV
ALL RATING PERIODS
70 -
I
60 -
50 -
3
O
30 -
10
14 18
PIRS SCORES
26
30
80
REGION V
ALL RATING PERIODS
I
60 -
SO -
5
O
40 -
30 -
13 15
PIRS SCORES
17
19
21
A-66
-------
PERFORMANCE INDEX RATING SCORES
These figures look at the relative frequencies of the ranges of
scores e.g. 0-10, 11-20, 21-30, 31-40, 41-50, 51-60, 61-70, 71-80, 81-
90 and 91-100. Region for Regions I, II, III, IV, V and the Central
Zone. Western Zone Performance Index Rating Scores were not
available in the ARCS Award Fee Tracking System. Regional
frequencies are displayed beside the aggregate national frequencies for
purposes of comparison.
A-67
-------
PERFORMANCE INDEX RATING SCORES
60
REGIONS AS SHOWN
50 -
40 -
30 -
20 -
ID -
71
I/
A
X
Z^
0 10 20 30
FREQ. ALL REGIONS
40 50
SCORES
60
SO
REG
3D
100
PERFORMANCE INDEX RATING SCORES
REGIONS AS SHOWN
ou —
50 -
40 -
30 -
20 -
10 -
n
pn
m r/l
£
y
//
/
y
/
^
\i
7
/
V
/
/
'/
/
/
'/
/
/
/,
/
/
/
/
^
^
\
u l " l I l
0 10 20 30 40 50
SCORES
?n
/
y
y
/
/
/
\
/
/
/
y
/
^
\j
'/
/
y
y
y
/
f
/
y
/
V\
/
/
/
-^ / rTi
~i ^i r
60 10 80 90 -100
[771 FREQ. ALL REGIONS
FREQ. REG II
A-68
-------
PERFORMANCE INDEX RATING SCORES
60
REGIONS AS SHOWN
50 -
40 -
30 -
20 -
V\
\A
71
/\
10
20
30
40 50
SCORES
70
80
90
100
FREQ. ALL REGIONS
FREQ. REG III
PERFORMANCE INDEX RATING SCORES
REGIONS AS SHOWN
50 -
40 -
30 -
20 -
1D -
0 -
r/n
l/i\l r/j-^-,
7
y
/
/
y
/
iilt
•\i
\j
\|
7
y
y
/
y
/
/
/
/
/
y
/
/
/
/
/
X
\
V
N
0 10 20 30 40 50
SCORES
/
/
y
y
/
y
/
/
/
/
y
/
/
/
/
"~/\
VI
/
/
y
/
y
/
/
/
/
/
V\
/
y
/
-v, / rrj
60 70 80 90 100
[771 FREQ. ALL REGIONS
fV\l FREQ. REG IV
A-69
-------
PERFORMANCE INDEX RATING SCORES
REGIONS AS SHOWN
50 -
•40 -
30 -
20 -
in -
0 -
[7]
r7\ I/I
7
/
/
\i
7
4
^
^
^
/
/
/
/
^
^
0 10 20 30 40 50
SCORES
V7\ FREQ. ALL REGIONS
71
X
/
^
^
/
^
60
r-,
^
^
/
/
/
/
M
^^
\ /Xl I7l
i i
70 80 90 100
[V\] FREQ. REG V
PERFORMANCE INDEX RATING SCORES
REGIONS AS SHOWN
50 -
40 -
30 -
20 -
10 -
n
[71 \A
7
/
/
/
/
VI
7
/
/
/
y
/
y
y
^
/
y
/
/
//
/
\1
^1
/
/
y
y
y
/
y
y
y
y
/
/
/
/
/
/
^
^
^
/
y
y
y
y
/
y
/
/
/
/
/\
/\
XI /\
X /\
\ /\ F71
0 10 20
V~A FREQ. ALL REGIONS
30
40 50
SCORES
60
70
80
30
FREQ. CENTRAL ZONE
100
A-70
-------
ARCS AWARD FEE TRACKING SYSTEM
This table displays the Performance Index Rating Scores (PIRS)
available under the Procurement and Contracts Management Division
Tracking System. Data are displayed by region by contractor. Rating
periods started from the time the contract was issued. In some regions
not all contracts were issued at the same time. For purposes of data
analysis within a region, the rating periods with the same dates were
given the same number. Therefore, in many cases there may be no
entries for the first or second rating periods for any given contractor.
Most remedial projects have not yet been completed so there are few
remedial Phase II ratings listed. These data were used to develop the
PIRS frequency distributions provided for the Award Fee section.
A-71
-------
ARCS AWARD FEE TRACKING SYSTEM
REGION 1
RATING PERIOD
1. 09/16/88 - 03/31/89
2. 04/01/89 - 07/31/89
3. 08/01/89 - 11/30/89
4. 12/01/89 - 03/31/90
5. 04/01/90 - 07/31/90
6. 08/01/90 - 11/30/90
RATING PERIOD
1.
2. 03/24/89 - 07/31/89
3. 08/01/89 - 11/30/89
4. 12/01/89 - 03/31/90
5. 04/01/90 - 07/31/90
6. 08/01/90 - 11/30/90
RATING PERIOD
1.
2. 02/22/89 - 07/31/89
3. 08/01/89 - 11/30/89
4. 12/01/89 - 03/31/90
5. 04/01/90 - 07/31/90
6. 08/01/90 - 11/30/90
PM RATING
45.00%
47.00%
35.00%
70.00%
80.00%
73.00%
PM RATING
10.00%
45.00%
55.00%
45.00%
PM RATING
50.00%
50.00%
31.00%
0.00%
31.00%
RP RP
PHASE I PHASE II
100.00%
72.00%
41.00%
100.00%
100.00%
100.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
100.00%
PIRS
65.69%
49.56%
30.46%
62.99%
68.00%
68.00%
PIRS
46.30%
59.99%
56.00%
66.00%
PIRS
52.78%
60.45%
50.00%
39.60%
48.14%
A-72
-------
ARCS AWARD FEE TRACKING SYSTEM
REGION 1
RATING PERIOD
1.
2. 04/15/89 -
3. 08/01/89 -
4. 12/01/89 -
5. 04/01/90 -
6. 08/01/90 -
07/31/89
11/30/89
03/31/90
07/31/90
11/30/90
RATING PERIOD
1.
2. 03/23/89 -
3. 08/01/89 -
4. 12/01/89 -
5. 04/01/90 -
6. 08/01/90 -
07/31/89
11/30/89
03/31/90
07/31/90
11/30/90
RATING PERIOD
1. 09/28/88 -
2. 04/01/89 -
3. 08/01/89 -
4. 12/01/89 -
5. 04/01/90 -
6. 08/01/90 -
03/31/89
07/31/89
11/30/89
03/31/90
07/31/90
11/30/90
RATING PERIOD
1.
2. 04/01/89 -
3. 08/01/89 -
4. 12/01/89 -
5. 04/01/90 -
6. 08/01/90 -
07/31/89
11/30/89
03/31/90
07/31/90
11/30/90
PM RATING
45.00%
61.00%
72.00%
61.00%
PM RATING
75.00%
80.00%
60.00%
66.00%
66.00%
PM RATING
31.00%
61.00%
70.00%
55.00%
65.00%
70.00%
PM RATING
NO FORMAL
75.00%
61.00%
75.00%
80.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
100.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
PIRS
51.53%
54.70%
60.93%
57.68%
PIRS
65.00%
57.80%
56.40%
61.05%
61.91%
PIRS
62.05%
64.51%
54.10%
50.96%
53.50%
55.00%
PIRS
74.90%
58.16%
52.93%
67.60%
68.25%
A-73
-------
ARCS AWARD FEE TRACKING SYSTEM
REGION II
RATING PERIOD
1.
2. 03/15/89 - 06/30/89
3. 07/01/89 - 10/31/89
4. 11/01/89 - 02/28/90
5. 03/01/90 - 06/30/90
6. 07/01/90 - 10/31/90
RATING PERIOD
1. 09/06/88 - 02/28/89
2. 03/01/89 - 06/30/89
3. 07/01/89 - 10/31/89
4. 11/01/89 - 02/28/90
5. 03/01/90 - 06/30/90
6. 07/01/90 - 10/31/90
RATING PERIOD
1. 09/30/88 - 02/28/89
2. 03/01/89 - 06/30/89
3. 07/01/89 - 10/31/89
4. 11/01/89 - 02/28/90
5. 03/01/90 - 06/30/90
6. 07/01/90 - 10/31/90
RATING PERIOD
1.
2.
3. 05/26/89 - 10/31/89
4. 11/01/89 - 02/28/90
5. 03/01/90 - 06/30/90
6. 07/01/90 - 10/31/90
PM RATING
40.00%
75.00%
77.00%
70.00%
70.00%
PM RATING
75.00%
83.00%
77.00%
90.00%
80.00%
70.00%
PM RATING
45.00%
40.00%
65.00%
55.00%
50.00%
60.00%
PM RATING
75.00%
55.00%
45.00%
60.00%
RP
PHASE I
100.00%
100.00%
100.00%
93.00%
100.00%
RP
PHASE I
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
RP
PHASE I
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
RP
PHASE I
100.00%
100.00%
100.00%
100.00%
RP
PHASE II
RP
PHASE II
RP
PHASE II
16.50%
RP
PHASE II
PIRS
57.00%
52.00%
PIRS
69.00%
58.00%
PIRS
59.00%
62.00%
PIRS
69.00%
58.00%
A-74
-------
ARCS AWARD FEE TRACKING SYSTEM
REGION II
RATING PERIOD PM RATING
RP
PHASE I
1.
2. 02/01/89 - 06/30/89 55.00% 100.00%
3. 07/01/89 - 10/31/89 55.00% 100.00%
4. 11/01/89 - 02/28/90 60.00% 100.00%
5. 03/01/90 - 06/30/90 55.00% 100.00%
6. 07/01/90 - 10/31/90 80.00% 100.00%
RP
PHASE II
PIRS
56.00%
66.00%
RATING PERIOD PM RATING
1.
2. 03/10/89 - 06/30/89 50.00%
3. 07/01/89 - 10/31/89 35.00%
4. 11/01/89 - 02/28/90 55.00%
5. 03/01/90 - 06/30/90 45.00%
6. 07/01/90 - 10/31/90
RP
PHASE I
RP
PHASE II
PIRS
100.00%
100.00%
100.00%
100.00%
80.00%
50.00%
60.00%
A-75
-------
ARCS AWARD FEE TRACKING SYSTEM
REGION III
RATING PERIOD
1. 06/29/88 - 10/31/88
2. 11/01/88 - 02/28/89
3. 03/01/89 - 06/30/89
4. 07/01/89 - 10/31/89
5. 11/01/89 - 02/28/90
6. 03/01/90 - 06/30/90
7. 07/01/90 - 10/31/90
RATING PERIOD
1.
2. 06/03/88
3. 11/01/88
4. 03/01/89
5. 07/01/89
6. 11/01/89
7. 03/01/90
8. 07/01/90
10/31/88
02/28/89
06/30/89
10/31/89
02/28/90
06/30/90
10/31/90
RATING PERIOD
1.
2. 05/06/88
3. 11/01/88
4. 03/01/89
5. 07/01/89
6. 11/01/89
7. 03/01/90
8. 07/01/90
10/31/88
02/28/89
06/30/89
10/31/89
02/28/90
06/30/90
10/31/90
PM RATING
50.00%
75.00%
65.00%
20.00%
40.00%
60.00%
80.00%
PM RATING
30.00%
90.00%
95.00%
35.00%
60.00%
60.00%
75.00%
PM RATING
RP RP
PHASE I PHASE
NO COSTS SUBMITTED
100.00%
85.00%
100.00%
100.00%
100.00%
100.00%
RP RP
PHASE I PHASE
50.00%
100.00%
100.00%
100.00%
100.00% 95
100.00%
100.00% 85
RP RP
PHASE I PHASE
II
II
.00%
.00%
II
55.00% 100.00%
75.00% 100.00%
[ALL SCORES DEFERRED UNTIL PD. #4]
75.00% 100.00%
67.00% 100.00%
60.00% 100.00%
35.00% 33.00%
PIRS
78.00%
79.00%
74.00%
78.00%
84.00%
83.00%
PIRS
30.00%
78.00%
81.00%
79.00%
80.00%
70.00%
PIRS
45.00%
71.00%
66.00%
65.00%
84.00%
71.00%
A-76
-------
ARCS AWARD FEE TRACKING SYSTEM
REGION III
RATING PERIOD
1. 01/01/88 - 06/30/88
2. 07/01/88 - 10/31/88
3. 11/01/88 - 02/28/89
4. 03/01/89 - 06/30/89
5. 07/01/89 - 10/31/89
6. 11/01/89 - 02/28/90
7. 03/01/90 - 06/30/90
8. 07/01/90 - 10/31/90
PM RATING
96.00%
70.00%
100.00%
75.00%
75.00%
80.00%
70.00%
60.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
100.00%
100.00% 95.00%
100.00% 100.00%
95.00%
PIRS
91.00%
81.00%
90.00%
78.00%
73.00%
64.00%
RATING PERIOD
1.
2.
3.
4.
5.
6.
7.
8.
06/22/88 -
11/01/88 -
03/01/89 -
07/01/89 -
11/01/89 -
03/01/90 -
07/01/90 -
10/31/88
02/28/89
06/30/89
10/31/89
02/28/90
06/30/90
10/31/90
PM RATING
50.00%
70.00%
60.00%
75.00%
60.00%
55.00%
80.00%
RP RP
PHASE I PHASE II
NO COSTS SUBMITTED
100.00%
100.00%
100.00%
100.00%
81.00%
75.00%
PIRS
76.00%
64.00%
67.00%
63.00%
64.00%
68.00%
A-77
-------
ARCS AWARD FEE TRACKING SYSTEM
REGION IV
1.
2.
3.
4.
1.
2.
3.
4.
RATING PERIOD
06/22/89 - 10/31/89
.11/01/89 - 02/28/90
03/01/90 - 06/30/90
07/01/90 - 10/31/90
RATING PERIOD
06/02/89 - 10/31/89
11/01/89 - 02/28/90
03/01/90 - 06/30/90
07/01/90 - 10/31/90
1.
2.
3.
4.
RATING PERIOD
06/09/89 - 10/31/89
11/01/89 - 02/28/90
03/01/90 - 06/30/90
07/01/90 - 10/31/90
1.
2.
3.
4.
RATING PERIOD
05/25/89 - 10/31/89
11/01/89 - 02/28/90
03/01/90 - 06/30/90
07/01/90 - 10/31/90
1.
2.
3.
4.
RATING PERIOD
06/18/89 - 10/31/89
11/01/89 - 02/28/90
03/01/90 - 06/30/90
07/01/90 - 10/31/90
PH RATING
60.00%
80.00%
80.00%
35.00%
PH RATING
100.00%
50.00%
80.00%
80.00%
PH RATING
50.00%
80.00%
80.00%
80.00%
PH RATING
31.00%
20.00%
0.00%
40.00%
PH RATING
60.00%
40.00%
0.00%
70.00%
RP
PHASE I
100.00%
100.00%
94.00%
77.00%
RP
PHASE I
100.00%
9.30%
100.00%
100.00%
RP
PHASE I
100.00%
100.00%
100.00%
100.00%
RP
PHASE I
100.00%
47.00%
11.00%
90.00%
RP
PHASE I
100.00%
95.00%
35.00%
98.00%
RP
PHASE II
RP
PHASE II
RP
PHASE II
RP
PHASE II
RP
PHASE II
PIRS
57.00%
54.00%
58.00%
43.00%
PIRS
53.00%
23.00%
45.00%
46.00%
PIRS
63.00%
57.00%
53.00%
57.00%
PIRS
66.00%
43.00%
35.00%
49.00%
PIRS
75.00%
47.00%
25.00%
52.00%
A-78
-------
ARCS AWARD FEE TRACKING SYSTEM
REGION IV
RP RP
RATING PERIOD PM RATING PHASE I PHASE II PIRS
1. 06/16/89 - 10/31/89 20.00% 100.00% 50.00%
2. 11/01/89 - 02/28/90 25.00% 63.07% 41.00%
3. 03/01/90 - 06/30/90 60.00% 100.00% 55.00%
4. 07/01/90 - 10/31/90 20.00% 100.00% 50.00%
A-79
-------
ARCS AWARD FEE TRACKING SYSTEM
REGION V
RATING PERIOD
1.
2.
3.
4.
5.
6.
7.
8.
05/06/88 -
11/01/88 -
03/01/89 -
07/01/89 -
11/01/89 -
03/01/90 -
07/01/90 -
10/31/88
02/28/89
06/30/89
10/31/89
02/28/90
06/30/90
10/31/90
RATING PERIOD
1.
2.
3.
4.
5.
6.
7.
8.
04/28/88 -
11/01/88 -
03/01/89 -
07/01/89 -
11/01/89 -
03/01/90 -
07/01/90 -
10/31/88
02/28/89
06/30/89
10/31/89
02/28/90
06/30/90
10/31/90
RATING PERIOD
1.
2.
3.
4.
5.
6.
7.
8.
06/01/88 -
11/01/88 -
03/01/89 -
07/01/89 -
11/01/89 -
03/01/90 -
07/01/90 -
10/31/88
02/28/89
06/30/89
10/31/89
02/28/90
06/30/90
10/31/90
PM RATING
45.00%
35.00%
40.00%
50.00%
50.00%
45.00%
50.00%
PM RATING
55.00%
60.00%
55.00%
60.00%
60.00%
50.00%
60.00%
PM RATING
20.00%
31.00%
45.00%
50.00%
40.00%
50.00%
31.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
73.00%
100.00%
100.00%
100.00%
100.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
100.00% 90.00%
100.00% 42.00%
100.00% 70.00%
RP RP
PHASE I PHASE II
N/A NO WORK ASSIGNED
100.00%
82.00%
100.00%
100.00%
100.00%
100.00% 15.00%
PIRS
60.00%
60.00%
47.10%
62.78%
50.00%
47.00%
48.00%
PIRS
66.00%
80.64%
84.08%
83.72%
64.00%
66.00%
64.00%
PIRS
N/A
61.04%
62.05%
64.74%
56.00%
54.00%
48.00%
RATING PERIOD
1.
2.
3.
4.
5.
6.
7.
8.
03/31/88
07/01/88
11/01/88
03/01/89
07/01/89
11/01/89
03/01/90
07/01/90
- 06/30/88
- 10/31/88
- 02/28/89
- 06/30/89
- 10/31/89
- 02/28/90
- 06/30/90
- 10/31/90
PM RATING
60.00%
80.00%
50.00%
80.00%
70.00%
60.00%
60.00%
65.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
PIRS
75.00%
77.20%
70.20%
65.60%
75.80%
50.00%
58.00%
71.00%
A-80
-------
ARCS AWARD FEE TRACKING SYSTEM
REGION V
1.
2.
3.
4.
5.
6.
7.
8.
RATING
03/01/88
07/01/88
11/01/88
03/01/89
07/01/89
11/01/89
03/01/90
07/01/90
PERIOD
- 06/30/88
- 10/31/88
- 02/28/89
- 06/30/89
- 10/31/89
- 02/28/90
- 06/30/90
- 10/31/90
PM RATING
60.00%
45.00%
55.00%
50.00%
50.00%
45.00%
55.00%
45.00%
RP RP
PHASE I PHASE II
100.00%
82.60%
100.00%
100.00%
81.30%
100.00%
100.00%
100.00% 65.00!
PIRS
75.00%
64.85%
77.60%
74.20%
68.42%
54.00%
55.00%
56.00%
RATING PERIOD
1.
2.
3.
4.
5.
6.
7.
8.
02/01/88 -
07/01/88 -
11/01/88 -
03/01/89 -
07/01/89 -
11/01/89 -
03/01/90 -
07/01/90 -
06/30/88
10/31/88
02/28/89
06/30/89
10/31/89
02/28/90
06/30/90
10/31/90
PM RATING
50.00%
70.00%
61.00%
55.00%
55.00%
55.00%
61.00%
55.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00% 57.00
PIRS
70.00%
71.00%
82.00%
72.50%
72.04%
70.00%
71.00%
60.00%
RATING PERIOD
PM RATING
RP
PHASE I
RP
PHASE II
PIRS
1.
2. 06/29/88 - 10/31/88 35.00%
3. 11/01/88 - 02/28/89 45.00%
4. 03/01/89 - 06/30/89 35.00%
5. 07/01/89 - 10/31/89 45.00%
6. 11/01/89 - 02/28/90 31.00%
7. 03/01/90 - 06/30/90 50.00%
8. 07/01/90 - 10/31/90 31.00%
N/A NO WORK ASSIGNED N/A
100.00% 60.28%
80.70% 54.80%
100.00% 63.85%
100.00% 53.00%
88.12% 88.12% 43.00%
77.00% 52.00%
A-81
-------
ARCS AWARD FEE TRACKING SYSTEM
REGIONS VI, VII, & VIII
RATING PERIOD
1.
2. 03/31/89
3. 07/01/89
4. 11/01/89
5. 03/01/90
6. 07/01/90
- 06/30/89
- 10/31/89
- 02/28/90
- 06/30/90
- 10/31/90
RATING PERIOD
1.
2. 03/24/89
3. 07/01/89
4. 11/01/89
5. 03/01/90
6. 07/01/90
- 06/30/89
- 10/31/89
- 02/28/90
- 06/30/90
- 10/31/90
RATING PERIOD
1.
2.
3. 05/26/89
4. 11/01/89
5. 03/01/90
6. 07/01/90
- 10/31/89
- 02/28/90
- 06/30/90
- 10/31/90
RATING PERIOD
1.
2. 02/10/89
3. 07/01/89
4. 11/01/89
5. 03/01/90
6. 07/01/90
- 06/30/89
- 10/31/89
- 02/28/90
- 06/30/90
- 10/31/90
PM RATING
31.00%
50.00%
50.00%
50.00%
56.00%
PM RATING
31.00%
90.00%
80.00%
84.00%
84.00%
PM RATING
56.00%
50.00%
61.00%
73.00%
PM RATING
31.00%
64.00%
50.00%
43.00%
50.00%
RP
PHASE I
100.00%
100.00%
100.00%
100.00%
77.60%
RP
PHASE I
0.00%
100.00%
100.00%
100.00%
100.00%
RP
PHASE I
0.00%
100.00%
100.00%
100.00%
RP
PHASE I
100.00%
100.00%
100.00%
100.00%
100.00%
RP
PHASE II PIRS
72.00%
53.00%
59.00%
55.00%
RP
PHASE II PIRS
45.00%
76.00%
81.00%
84.00%
RP
PHASE 11 PIRS
NO WORK ASSIGN 0.00%
76.00%
80.00%
RP
PHASE II PIRS
60.00%
65.00%
60.00%
58.20%
A-82
-------
ARCS AWARD FEE TRACKING SYSTEM
REGIONS VI, VII, & VIII
RATING PERIOD
1.
2. 03/23/89 - 06/30/89
3. 07/01/89 - 10/31/89
4. 11/01/89 - 02/28/90
5. 03/01/90 - 06/30/90
6. 07/01/90 - 10/31/90
RATING PERIOD
1. 09/13/88 - 01/31/89
2. 02/01/89 - 06/30/89
3. 07/01/89 - 10/31/89
4. 11/01/89 - 02/28/90
5. 03/01/90 - 06/30/90
6. 07/01/90 - 10/31/90
PM RATING
45.00%
64.00%
80.00%
82.00%
76.00%
PN RATING
60.00%
45.00%
80.00%
80.00%
80.00%
84.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
100.00%
RP RP
PHASE I PHASE II
100.00%
0.00%NO WORK
100.00%
100.00%
100.00%
100.00%
PIRS
63.00%
55.00%
81.00%
75.00%
PIRS
79.00%
45.00%
55.00%
65.00%
67.50%
RATING PERIOD
1.
2. 01/06/89 - 06/30/89
3. 07/01/89 - 10/31/89
4. 11/01/89 - 02/28/90
5. 03/01/90 - 06/30/90
6. 07/01/90 - 10/31/90
RATING PERIOD
1. 09/30/88 - 01/31/89
2. 02/01/89 - 06/30/89
3. 07/01/89 - 10/31/89
4. 11/01/89 - 02/28/90
5. 03/01/90 - 06/30/90
6. 07/01/90 - 10/31/90
PM RATING
0.00%
10.00%
50.00%
64.00%
67.00%
PM RATING
40.00%
18.00%
64.00%
80.00%
59.00%
70.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
100.00%
RP RP
PHASE I PHASE II
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
PIRS
56.00%
69.00%
76.00%
69.50%
PIRS
70.00%
70.00%
69.00%
73.00%
63.00%
A-83
-------
ARCS AWARD FEE TRACKING SYSTEM
REGIONS IX & X
RATING PERIOD
1.
2. 06/21/89 - 10/31/89
3. 11/01/89 - 02/28/90
4. 03/01/90 - 06/30/90
5. 07/01/90 - 10/31/90
RATING PERIOD
1.
2. 03/24/89 - 10/31/89
3. 11/01/89 - 02/28/90
4. 03/01/90 - 06/30/90
5. 07/01/90 - 10/31/90
RATING PERIOD
1. 03/10/89 - 06/30/89
2. 07/01/89 - 10/31/89
3. 11/01/89 - 02/28/90
4. 03/01/90 - 06/30/90
5. 07/01/90 - 10/31/90
RATING PERIOD
1.
2. 06/28/89 - 10/31/89
3. 11/01/89 - 02/28/90
4. 03/01/90 - 06/30/90
5. 07/01/90 - 10/31/90
PM RATING
53.00%
61.00%
65.00%
65.00%
PH RATING
65.00%
71.00%
75.00%
70.00%
PH RATING
62.00%
55.00%
75.00%
70.00%
50.00%
PH RATING
90.00%
75.00%
75.00%
70.00%
RP
PHASE I
100.00%
100.00%
100.00%
77.60%
RP
PHASE I
100.00%
100.00%
100.00%
100.00%
RP
PHASE I
100.00%
100.00%
100.00%
93.50%
79.30%
RP
PHASE I
0.00%
100.00%
100.00%
100.00%
RP
PHASE II
RP
PHASE II
RP
PHASE II
RP
PHASE II
NO WORK
PIRS
69.00%
PIRS
PIRS
70.30%
40.00%
PIRS
A-84
-------
ARCS AWARD FEE TRACKING SYSTEM
REGIONS IX & X
1.
2.
3.
4.
5.
RATING PERIOD
06/09/89 - 10/31/89
11/01/89 - 02/28/90
03/01/90 - 06/30/90
07/01/90 - 10/31/90
PM RATING
50.00%
65.00%
50.00%
75.00%
RP
PHASE I
RP
PHASE II
PIRS
0.00%
100.00%
48.00%
100.00%
NO WORK ASSIGN
1.
2.
3.
4.
5.
RATING PERIOD
05/01/89 - 10/31/89
11/01/89 - 02/28/90
03/01/90 - 06/30/90
07/01/90 - 10/31/90
PM RATING
RP
PHASE I
RP
PHASE II
PIRS
0.00%
35.00%
31.00%
25.00%
100.00%
65.00%
63.00%
63.00%
A-85
-------
WORK ASSIGNMENT
DECISION TREE
AWARD,
WA
If
all else
is equal,
'proportional
distribution
should be made
among good
performers.
ROTATIONAL
How does the site
location compare with
the contractors location
of his people and equipment'
Has the minimum base
LOE been ordered?
What are the problems and needs
of the site vs. the contractors
available technical disciplines and
areas of expertise?
If any contractors previously performed
any work at the site for EPA, what is the
value of continuing with them?
Relative technical and PM performance
based on PIRS.
Does contract have enough capacity?
Does contractor have capacity to perform
the additional work assignment?
Have any contractors or their subs
worked on the site for responsible parties?
Have any contractors or their subs worked for
LOCATION
BASE HOURS EXPENDED/
ORDERED
SPECIFIC TECHNICAL
EXPERTISE
CONTINUITY
DEMONSTRATED
PERFORMANCE
CAPACITY
CONFLICT OF
NTEREST
new
WA
to be
issued
At Start-up of New Contract and
Throughout Contract Period of Performance
A-86
-------
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A-87
-------
ARCS Award Cycle
June 1987 through June 1989
NUMBER OF
CYCLE REGION CONTRACTS
First Cycle III 5
June 1987-June 1988 V 7
Second Cycle I 7
October 1987 - May 1989 II 6
ARCS Central 8
Third Cycle IV 6
April 1988 - March 1989 ARCS West 6
In total, 45 prime contracts were issued to 23 contractors.
A-88
-------
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«*
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r>s
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CM
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in
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^
CM
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I NUMBER OF ACTIVE WAs
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IARCS CONTRACTS MANAGED
in
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I* For zones, based on sites and PO
|RPM=Remedial Program Manage]
WA=Work Assignment
WAM=Work Assignment Manage
A-89
-------
Region 1
ARCS Contracting Officers
ARCS Contract Specialists
ARCS Project Officers
ARCS Deputy Project Officers
Total Population of RPMs in Region
RPMs who are ARCS WAMs
ARCS WAMs who are not RPMs
Region 2
ARCS Contracting Officers
ARCS Contract Specialists
ARCS Project Officers
ARCS Deputy Project Officers
Total Population of RPMs in Region
RPMs who are ARCS WAMs
ARCS WAMs who are not RPMs
Region 3
ARCS Contracting Officers
ARCS Contract Specialists
ARCS Project Officers
ARCS Deputy Project Officers
Total Population of RPMs in Region
RPMs who are ARCS WAMs
ARCS WAMs who are not RPMs
Region 4
ARCS Contracting Officers
ARCS Contract Specialists
ARCS Project Officers
ARCS Deputy Project Officers
Total Population of RPMs in Region
RPMs who are ARCS WAMs
ARCS WAMs who are not RPMs
Region 5
ARCS Contracting Officers
ARCS Contract Specialists
ARCS Project Officers
ARCS Deputy Project Officers
Total Population of RPMs in Region
RPMs who are ARCS WAMs
ARCS WAMs who are not RPMs
Region 6
ARCS Contracting Officers
ARCS Contract Specialists
ARCS Project Officers
ARCS Deputy Project Officers
Total Population of RPMs in Region
RPMs who are ARCS WAMs
ARCS WAMs who are not RPMs
Region 7
ARCS Contracting Officers
ARCS Contract Specialists
ARCS Project Officers
ARCS Deputy Project Officers
Total Population of RPMs in Region
RPMs who are ARCS WAMs
ARCS WAMs who are not RPMs
Region 8
ARCS Contracting Officers
ARCS Contract Specialists
ARCS Project Officers
ARCS Deputy Project Officers
Total Population of RPMs in Region
RPMs who are ARCS WAMs
ARCS WAMs who are not RFMs
< 1 yr exp.
5
5
1
1
5
1
1
1
2
14
7
2
2
2
1
1
1
1
2
2
c
3
EXPERIENCE LEVEL OF THE REGIONAL ARCS WORKFORCE
1-3 yrs. exp
3
1
2
20
18
2
3
1
2
47
39
1
25
24
1
2
2
19
12
2
4
43
39
4
1
1
12
6
1
1
10
8
1
1
1
2
20
15
1
>3-5 yrs ext
1
7
7
3
25
18
25
15
5
4
18
14
3
1
10
6
1
8
7
(
(
1
> 5 vis exp.
1
7
7
1
1
10
10
1
2
2
2
6
6
12
9
17
17
1
4
4
t
12
c
i
6
4
0
2
2
39
37
5
Total
4
0
3
3
87
68
3
Total
2
2
2
0
57
45
0
Total
1
4
2
0
50
32
0
Total
2
2
4
0
80
72
8
Total
2
0
1
0
27
16
6
Total
2
0
1
0
32
26
1
Total
1
1
il
0
43
32
i
Experience in Years —
Weighted Average (*)
2.50
4.50
2.00
3.06
3.12
3.20
Weighted Average (*)
3.25
3.17
1.50
3.06
3.24
3.17
Weighted Average (*)
7.00
7.00
7.00
3.38
3.33
Weighted Average (»)
2.00
1.25
2.00
2.98
3.33
Weighted Average (*)
2.00
0.50
2.00
3.48
3.53
3.38
Weighted Average (»)
3.00
2.00
3.43
4.0C
4.58
Weighted Average (*)
1.25
0.50
4.28
4.15
2.00
Weighted Average (*)
2.00
2.00
2.00
3.29
3.41
3.00
Regional Staff
ixpenence as
% of National
Average
88%
118%
96%
89%
88%
82%
114%
83%
72%
89%
91%
81%
246%
286%
183%
98%
94%
70%
39%
52%
87%
94%
70%
20%
52%
101%
99%
86%
105%
52%
100%
113%
117%
44%
13%
125%
117%
51%
70%
82%
52%
96%
96%
76%
A-90
-------
Region 9
ARCS Contracting Officers
ARCS Contract Specialists
ARCS Project Officers
ARCS Deputy Project Officers
Total Population of RPMs in Region
RPMs who are ARCS WAMs
ARCS WAMs who are not RPMs
Region 10
ARCS Contracting Officers
ARCS Contract Specialists
ARCS Project Officers
ARCS Deputy Project Officers
Total Population of RPMs in Region
RPMs who are ARCS WAMs
ARCS WAMs who are not RPMs
National Summary
ARCS Contracting Officers
ARCS Contract Specialists
ARCS Project Officers
ARCS Deputy Project Officers
Total Population of RPMs in Region
RPMs who are ARCS WAMs
ARCS WAMs who are not RPMs
10
4
3
1
1
1
4
2
1
48
24
3
3
1
20
18
1
1
7
2
16
3
12
4
223
181
11
1
IS
14
1
9
5
3
0
0
1
131
99
»
1
15
12
5
3
17
10
3
2
9
0
109
90
10
Total
3
0
3
1
60
48
6
Total
2
0
3
0
36
18
1
Total
23
9
23
6
511
394
32
Weighted Average (*)
2.00
5.33
4.00
3.50
3.71
6.17
Weighted Average (*)
3.00
7.00
4.74
5.25
0.50
Weighted Average (»)
2.85
2.44
3.83
2.08
3.44
3.55
3.92
* Weighted average calculated by counting <1 vr as .5; 1-3 as 2; 3-5 as 4; and >5 as 7
70%
139%
192%
102%
104%
157%
105%
183%
138%
148%
13%
U.S. Government Printing Office 1991 -312-014/40013
A-91
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