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TABLE OF CONTENTS
Page
SCOPE AND OBJECTIVES 1
SUMMARY OF FINDINGS 2
ACTION REQUIRED 5
BACKGROUND 6
FINDINGS AND RECOMMENDATIONS
1. FIT PROGRAM MANAGEMENT 9
2 . AWARD FEE PROCESS 19
3 . EXCESSIVE SUPPORT CHARGES 28
4 . SITE INSPECTION VARIATIONS 47
5. OBTAINING REQUIRED PROFESSIONAL STAFFING 52
6 . IMPROVING TDD ADMINISTRATION 54
APPENDIX A - GLOSSARY OF ACRONYMS 58
APPENDIX B - AGENCY RESPONSE TO THE DRAFT AUDIT 59
APPENDIX C - DISTRIBUTION 60
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7 | 'UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
?* WASHINGTON, DC. 20460
OFFICE OF
THF INSPECTOR GENERAL
MEMORANDUM
SUBJECT: Audit Report Number E5eH7-03-0273-81966
Report of Audit on EPA's Utilization
of the Zone I Field Investigation Team
' j y
FROM: /^rnest E. Bradle^ III" " L <*&*-L<'
Inspector General for 'Audit
TO: J. Winston Porter
Assistant Administrator for Solid Waste
and Emergency Response
Charles L. Grizzle
Assistant Administrator for
Administration and Resources Management
SCOPE AND OBJECTIVES
We performed an audit on EPA's utilization of the Zone I
Field Investigation Team (FIT). EPA obtained these FIT services
under a contract with the NUS Corporation. The purpose of this
audit was to evaluate the Agency's policies and procedures for
using the FIT in Zone I, which encompasses EPA Regions I, II, III
and IV. We performed the audit in accordance with the Standards
for Audit of Governmental Organizations, Programs, Activities, and
Functions issued by the Comptroller General of the United States
as they apply to economy and efficiency and program results audits.
Our review included tests of the project files and other auditing
procedures we considered necessary.
Our audit work was performed in EPA Headquarters (HQ), the
EPA offices in Regions I through IV, and the NUS Corporation
offices in these regions. We also conducted reviews at the NUS
zone program management office in Arlington, Virginia. The audit
evaluated FIT operations from the award of the contract on
November 1, 1986 through December 31, 1987.
We did not perform a detailed financial and compliance audit
of the contract executed by EPA with NUS to procure the FIT services,
Our review evaluated the economy, efficiency and program results
expected only in relation to the policies and procedures employed
by the Agency for directing the efforts for FIT. We also evaluated
the administrative procedures the Agency used in relation to this
contract. This review disclosed several areas needing improvement
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which are discussed in this report. We did not perform a study and
evaluation of internal controls and accordingly did not include a
report on them. A glossary of frequently cited acronyms is in-
cluded as appendix A to this report.
The survey work for this review began August 3, 1987 and was
completed on October 23, 1987. As a result of this survey, we
started an in-depth audit on November 23, 1987. The field work for
this audit was completed on May 15, 1988. We reviewed documenta-
tion the Agency used to authorize the FIT to perform various pre-
remedial activities required by the Superfund Amendments and
Reauthorization Act (SARA). We examined project files including
correspondence at the locations visited.
SUMMARY OF FINDINGS
1. FIT PROGRAM MANAGEMENT
Agency management of the FIT program was deficient. The EPA
project officer did not provide the required oversight. As a
result, there were four somewhat diverse regional programs, rather
than a single uniform FIT program. Coupled with this lack of
centralized control, EPA HQ delayed taking action to correct
problems in Regions I and II for almost a year. This lack of
oversight contributed to a number of additional deficiencies in
EPA's management of the FIT program. This first finding discusses
the need for EPA HQ to exercise more effective managerial over-
sight. The conditions found in Regions I and II demonstrate this
need. Findings two through six summarized below discuss the
additional deficiencies in EPA's management of the FIT program
disclosed during our audit. We recommend that the EPA HQ project
officer more aggressively manage and direct overall zone activities
under the FIT contract with NUS. This should include addressing
problems identified with contractor performance in a timely manner.
2. AWARD FEE PROCESS
EPA needs to improve implementation of the award fee process
in order to better assess the adequacy of the work performed by
NUS. In general, the process was not carried out uniformly among
the regions; however, the most serious deficiencies occurred in
Regions I and II. We reviewed performance packages submitted for
EPA evaluation over the first year of the contract and found that:
Rating packages generally covered the
minimum number of hours required by EPA
only by including large amounts of support
tasks.
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Ratings were overgenerous and did not comply
with EPA guidance.
NUS was paid award fees for deficient work,
as well as for work that was beyond the scope
of the pre-remedial program.
EPA HQ plans to allow the rollover of unawarded
fees. We believe this action is unwarranted
because it will increase the total fees available.
We recommend EPA: (1) increase the minimum reporting require-
ments for FIT hours from 60 to 80 percent; (2) assure that award
fees are principally reserved for work related to the FIT primary
mission; and (3) decide on a single rating evaluation system, and
employ that system uniformly throughout the four regions. In no
case should award fees be granted for deficient work. We also
recommend that the Agency assure that unearned award fees are not
rolled over and made available for use in subsequent periods.
3. EXCESSIVE SUPPORT CHARGES
Overall, Zone I statistics indicated that the FIT offices spent
less than half their time on their primary mission, i.e. prelimi-
nary assessments, site inspections, and Hazard Ranking System
(HRS) scores. Most of the non-primary mission charges related to
support activities such as training, equipment maintenance, program
management, general technical assistance, and quality assurance.
We concluded that some of the projects were of questionable value
to the Government, and that EPA must redirect the focus of the FIT
offices to their primary mission, the pre-remedial program.
EPA's original goal for support activities was 30 percent of
FIT professional hours. Between November 1986 and December 1987,
the four FIT offices charged EPA for 492,000 hours of professional
services. We found that they had not met the 30 percent goal,
because over 200,000, or almost 41 percent of the 492,000 hours,
were for support. We estimated the excess support cost EPA $1.6
million. At the end of the first year of the contract, EPA rede-
fined support activities and lowered the support goal from 30 to
20 percent. We reviewed support charges under the new goal and
found that, although all of the FIT offices exceeded the goal,
they nevertheless received praiseworthy ratings from EPA in the
succeeding award fee process. We recommend the Agency assure that
the regional project officers authorize no more than 20 percent of
FIT hours as support.
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4. SITE INSPECTION VARIATIONS
Disparities existed in the FY 1987 site inspections (Sis)
performed in the four regions of Zone I. The definition of what
constituted an SI, the methods used to select sites and the actual
format of the SI reports depended upon regional preference. SI
reports in two of the regions contained toxicological assessments,
while the other two regions considered such assessments to be
premature. Region I Sis were the most peculiar. Because FIT 1
did not actually visit 75 percent of the sites, the Sis did not
conform to either the FIT contract, or the National Contingency
Plan. Moreover, it took EPA HQ over a year to formally issue
guidance, during which time NUS charged the Agency an estimated
$4.7 million for 158,000 FIT hours spent on SI projects. To date,
Sis have not been performed in a uniform fashion. We recommend
that over the remainder of the contract EPA HQ require regional
project officers to follow a single pre-remedial strategy. This
is needed because each region uses the information obtained from
Sis to compute HRS scores.
5. OBTAINING REQUIRED PROFESSIONAL STAFFING
EPA needs to ensure that the personnel assigned to each FIT
office satisfy contract staffing requirements. We found that the
managers at two FIT offices did not have the experience required
by the contract. We recommend that EPA ensure that the personnel
assigned to each FIT office satisfy the education and experience
requirements of the contract. *
6. IMPROVING TDD ADMINISTRATION
Procedures for the preparation of Technical Directive Documents
(TDDs) need improvement. The four regions reviewed did not always
comply with contract requirements and EPA guidance concerning the
use of TDDs. We found several areas requiring improvement such
as: work initiated without TDDs; amendments to TDDs not processed;
and Acknowledgement of Completion forms not completed. It is
essential that TDDs are processed in accordance with contract
provisions to ensure that the contractor has a clear understanding
of the work requirements. In view of the significant value of
this contract, in excess of $125 million, it is also essential
that the services required are clearly defined and all other provi-
sions such as, due dates, priority, estimated costs and direction
on reporting requirements are clearly defined before work is ini-
tiated. Without clear and complete written work authorizations,
EPA is not in a position to hold the contractor accountable or to
establish a record of what it directed the contractor to perform.
Furthermore, the lack of clear and complete TDDs could "adversely
affect the recovery of cleanup costs under SARA. For these reasons
we recommend that the Agency should implement procedures to improve
TDD administration.
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Throughout the audit, we briefed EPA Headquarters (HQ),
regional, and NUS representatives on the issues discussed in
this report. We met with HQ officials and discussed the issues
contained in the draft report on July 6 and July 21, 1988. On
July 25, 1988 a draft report was issued to the Assistant Admini-
strator for Solid Waste and Emergency Response and the Assistant
Administrator for Administration and Resources Management. During
July, we met with personnel in Regions I, II, and III to discuss
the findings in the draft report.
Written comments to our draft report were provided by the
Assistant Administrator for Solid Waste and Emergency Response
on September 12, 1988. Included in the response were comments
by personnel from Regions I, II, III and the contractor. The
response disagreed with the tone and content of Finding Number
1 but stated that the recommendation has already been incor-
porated into the program's operation. The Agency disagreed
with Finding Number 2 and generally agreed with Findings Number
3, 4, 5, and 6. We evaluated the response received and modified
our report where appropriate. However, for the most part our
position remained unchanged.
On September 22, 1988 we held an exit conference with per-
sonnel from the Office of Solid Waste and Emergency Response and
the Office of Administration and Resources Management. During the
conference we explained various details concerning our findings.
To provide a balanced understanding of the issues, we
summarized the Agency's response after each finding. Also includ-
ed is our rebuttal to the response. Appendix B contains the
majority of the response received from the Office of Solid Waste
and Emergency Response. We did not include the entire response
because it was so voluminous. The entire document is on file in
our office and is available upon request.
The courtesies and cooperation extended by your staff during
this audit are very much appreciated.
ACTION REQUIRED
In accordance with EPA Order 2750, you are required to provide
this office with a written response to the audit report within 90
days of the audit report date. Since this report deals primarily
with the management of the FIT program, the Assistant Administrator
for Solid Waste and Emergency Response was designated the primary
action official. As such, he should take the lead in coordinating
the Agency's response.
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BACKGROUND
EPA utilizes various types of contracts to implement the
Superfund program. Policy and program implementation contracts
provide assistance in developing and implementing policies. Re-
moval program contracts provide support services during emergency
responses and other removal actions. Enforcement support contracts
assist EPA in cost recovery operations. Remedial contracts provide
EPA with technical assistance during various phases of remedial
actions such as remedial investigation/feasibility studies, remedial
designs and actual site cleanups. Two separate contracts were
awarded for pre-remedial field investigative services.
EPA awarded contract number 68-01-7346 to the NUS Corporation
to obtain FIT services in Zone I, which is comprised of Regions I
through IV. At the time of award the estimated cost of this con-
tract was $91.5 million for services over a five year period.
The contract has since been modified to an estimated cost of $125
million. EPA also awarded contract number 68-01-7347 to Ecology
and Environment Incorporated to obtain the same services within
Zone II, which is comprised of Regions V through X. The estimated
cost of this contract was $153 million.
The purpose of the FIT contracts is to provide the Federal
Government's primary investigative capability within the Superfund
program. The information obtained under these contracts establishes
the data base which- forms the foundation of the overall program.
FIT contractor personnel provide technical support to EPA by per-
forming investigative activities required prior to the remedial
phase. This involves collecting site data to compute an HRS
score to determine whether the site merits placement on the
National Priorities List (NPL).
In general, each FIT contractor provides the personnel,
materials and equipment to complete basic investigation activities
anticipated at uncontrolled hazardous substance disposal sites.
These activities include but are not limited to:
Site Discovery
Preliminary Assessments (PAs)
Site Inspections (Sis)
Expanded Site Inspections (ESIs)
Special Studies
Enforcement Support
To accomplish these activities each contractor established
an overall Zone Program Management Office in the Washington, DC
area as well as FIT offices within each region. For example, the
zone program manager and staff for NUS manages their overall FIT
efforts from an office in Arlington, Virginia. The regional FIT
offices are located in:
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- Bedford, Massachusetts (FIT 1)
- Edison, New Jersey (FIT 2) .
- Wayne, Pennsylvania (FIT 3)
- Tucker, Georgia (FIT 4)
The FIT staff located at these offices include professionals such
as geologists, geohydrologists, hydrogeologists, toxicologists,
chemists and assorted other specialists who perform the various
field investigations.
The management of the contract by EPA parallels that of the
contractor. HQ contracting officers and contract specialists
develop contract management policy, and assess the adequacy of the
amount and distribution of contractor resources. HQ project and
deputy project officers have overall management responsibility and
provide zone-wide oversight of the contractor. Regional project
officers provide day-to-day oversight of contractor work in the
field. They are to assure that program policy, procedures, goals,
and objectives are carried out and met by the contractor with
respect to specific assignments. Their responsibilities include
providing technical and managerial oversight of the FIT offices,
projecting regional work loads, and evaluating contractor performance,
The FIT contract is a cost-plus-award-fee contract. EPA pays
100 percent of costs incurred by NUS. This includes everything
from postage stamps to office rentals. In return, the contractor
provides a team of professionals who are to work only for EPA.
NUS receives a base fee, and earns an award fee based on EPA eval-
uation of contractor performance. . Total costs for the first year
of the contract were $15.7 million. Included in this amount were
$6.2 million for 528,528 hours of direct labor, $437,000 of base
fees, and $682,000 of award fees.
EPA issued a FIT Zone Contracts Management Guide that describes
the award fee process. Contractor performance is evaluated every
four months by use of Performance Event Reports (PERs). The event
could be work performed at a single site, or work performed on a
generic task. For example, a PER could address an SI performed at
one site, or all of the Sis performed during the period being
evaluated. Each PER is evaluated as either less than satisfactory
(LS), satisfactory (S), exceeds expectations (EE), or outstanding
(0). The evaluations translate into numerical scores from a scale
of zero to five.
The PERs are assembled and initially scored by NUS. The FIT
offices are free to choose which events are submitted for evaluation.
However, the FIT management guide requires that the events submitted
include 60 to 80 percent of the hours charged during the period
under evaluation. Regional personnel then review the PERs, adjust
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the scores if deemed necessary, and forward a summary PER package
to EPA HQ. There, a Performance Evaluation Board (PEB) reviews
both the FIT and regional ratings, and computes an overall per-
formance rating and award fee based on the following criteria:
RATING
& SCORE
Less Than
Satisfactory
(0-2.0)
Satisfactory
(2.5-3.0)
Exceeds
Expectations
(3.5-4.0)
Outstanding
(4.5-5.0)
FEE RANGE
PERCENTAGE
0-34
35-55
56-78
79-100
DESCRIPTION
OF PERFORMANCE
Substandard performance requiring
immediate corrective action. Some
good performance but significantly
offset by problem areas.
Performance level expected from a
good "fixed fee" contractor. Areas
requiring improvement offset by
good performance in other areas.
Superior performance exceeding the
satisfactory level. Monitors can
cite only minor areas requiring
improvement.
Demonstrates initiative, ingenuity
and creativity or excellent perfor-
mance under adverse circumstances.
In April of 1987, the Chairman of the PEB issued additional
guidance concerning the performance evaluation process. In part,
this guidance informed the regional project officers and the FIT
offices that:
The primary mission of the FIT contracts is
to conduct PAs and Sis, and that regions re-
porting a large percentage of hours devoted
to these tasks will receive recognition by
the PEB.
FIT offices which exceed the 70 percent goal
for field activities will receive special
recognition.
Routine tasks (i.e. PAs and Sis) can receive
above average ratings if the reports are sub-
mitted on or ahead of schedule; require little
or no rewriting; and make accurate, well docu-
mented recommendations.
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FINDINGS AND RECOMMENDATIONS
1. FIT PROGRAM MANAGEMENT
Agency management of the FIT program was deficient. To a
large extent the regional offices operated the FIT program in Zone
I during 1987. Although the contract indicated that EPA Head-
quarters (HQ) would run the program, in reality the regions were
virtually autonomous. Also, turnover among key EPA and NUS
personnel was widespread. Over a 17-month period there had been
six contracting officers, four contract specialists and changeover
of half the regional project officers and FIT office managers.
Moreover during this period, there was no formal written guidance
concerning the pre-remedial program except for the National
Contingency Plan (NCP). Because the regions were free to interpret
the NCP as they pleased, there were four somewhat diverse regional
programs, rather than a single uniform FIT program. Coupled with
this lack of centralized control, EPA HQ delayed taking action to
correct problems in Regions I and II for almost a year. These two
conditions contributed to a number of additional deficiencies in
EPA's management of the FIT program. This first finding discusses
the need for EPA HQ to exercise more effective managerial oversight,
The conditions found in Regions I and II demonstrate this need.
Findings two through six discuss the additional deficiencies in
EPA's management of the FIT program disclosed during our audit.
These deficiencies also resulted from EPA HQ lack of oversight.
They are:
NUMBER FINDING
2 - The award fee process was not implemented
properly.
3 - FIT hours charged to support activities
were excessive. Also, work was performed
outside the scope of the pre-remedial program.
4 - Site inspection (SI) procedures varied widely
among the regions.
5 - Two of the four FIT office managers did
not meet contract qualification require-
ments for their positions.
6 - Technical Directive Document (TDD) admin-
istration was deficient among the four
regions.
The FIT Zone Contracts User's Manual issued December 1986
and the FIT Zone Contracts Management Guide, dated September 1987
which superseded the User's Manual delineate the role of EPA con-
tracting officers, project officers, program managers, and FIT
office managers. These references indicate that the contracting
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officer has overall contract authorization and approval authority.
He develops policy to address contractual issues such as, changes
in the Award Fee Performance Evaluation Plan, and subcontracting
pool allocations. The contracting officer also assesses the ade-
quacy of contractor resources both within and across the zones
e.g., personnel, funding, and equipment. The HQ project officer
has overall responsibility for managing and directing the actual
FIT activities under each FIT contract. Other key project officer
responsibilities include:
o Coordinating the HQ Award Fee Performance
Evaluation Process.
o Implementing guidance and policy decisions.
o Reviewing regional work load projections.
o Communicating FIT program and contract manage-
ment policy, procedures, and technical guidance
to the regions.
Region I
A morale problem arose almost immediately in FIT 1 after the
signing of the new contract. Contractor personnel wanted to
continue performing Sis in the same manner as under the previous
contract. This included visiting the site and taking samples to
better determine site characteristics. This was the method des-
cribed in the NCP, as well as the method routinely followed by
Regions II, III, and IV. However, Region I adopted a new philos-
ophy that differed from that followed by the rest of the zone.
During this period the Hazard Ranking System (HRS) model used to
score potential NPL sites was undergoing revision into a new
model called HRS 2. In order to meet fiscal year quotas for
SI and HRS reports, and to avoid possible repetition of SI work
under HRS 2 the region decided to scale down the traditional
"full scale" SI into a much smaller version known as a "junior"
SI. This new version did not require any site visits or samples.
Data was to be extracted from state agency files, or from consul-
tants working for the parties potentially responsible for the
conditions at the sites. (The adequacy of the "junior" Sis is
addressed in Finding Number 4).
NUS HQ monthly status reports and Performance Event Reports
(PERs) indicated that the new SI philosophy and the heavy emphasis
on assembling HRS packages caused serious problems for FIT 1 per-
sonnel. The contract was signed in November 1986. In December
1986 NUS complained that FIT morale was a major problem due to a
lack of work. Over the next nine months NUS informed EPA HQ that:
10
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Employee morale was affected since almost
all FIT activity was office work.
A series of "mock field exercises" were
conducted outside the FIT office to maintain SI
expertise.
Obtaining SI data was time consuming because of
difficulties encountered gaining access to state
agency files.
FIT project managers became extremely frustrated
when sites assigned as HRS candidates "bumped"
other work, but were dropped at the last minute
because they fell under the jurisdiction of the
Resource Conservation and Recovery Act, rather
than Superfund.
The FIT 1 office manager and senior project manager resigned
at the end of the first year of the contract. As a defense mech-
anism NUS allowed other FIT 1 staff to transfer to a satellite
office and work on a state contract recently awarded to NUS. The
net effect of these actions was a 41 percent reduction in the
professional level staff, with FIT 1 losing over half its top
managers. Furthermore, EPA had a significant educational invest-
ment in the professional employees who left FIT as they had
attended an aggregate of 176 training courses funded by EPA.
Also, as seen in the following chart, many of the employees who
left were highly experienced.
FIT 1 RESIGNATIONS AND TRANSFERS
TITLE DISCIPLINE DEGREE EXPERIENCE
Office Geohydrologist MS 10 years
Manager
Senior Geologist MS 8 years
Project
Manager
Assistant Geohydrologist • BS 12 years
Manager
Assistant Hydrologist MS 5 years
Manager
Lab Screening Analytical BS 7 years
Manager Chemist
Assistant Geologist BA 3 years
Health &
Safety
Manager
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FIT 1 RESIGNATIONS AND TRANSFERS
TITLE DISCIPLINE DEGREE EXPERIENCE
Instrument Analytical BS 3 years
Calibration Chemist
Manager
Lead Toxicologist BS 3 years
Toxicologist
FIT 1 performance declined at the time of the resignations
and transfers. Region I personnel comments on the third per-
formance evaluation included:
Performance slipped to average, and produced
disappointment and a general lack of confidence
in FIT'S ability to produce high quality, timely
products.
Minor administrative and clerical problems such
as typographical errors and incorrect TDD numbers
became common place. Word processing problems
caused the late delivery of products.
- EPA comments and changes to policy papers were
ignored in successive draft documents despite
the fact that meetings were held with FIT.1
personnel to discuss the drafts.
The overall rating for the period was "satisfactory," a drop from
the previous "outstanding" rating received for the second period.
The HQ project officer explained that he was only able to
convince Region I to assign field work when it became apparent
that the HRS 2 would be further delayed. During a discussion
the project officer indicated that he considered the lack of
field work between January and November to be a "short period,"
but maintained that EPA had no right to prevent NUS from trans-
ferring FIT personnel to the state contract. The Regional Project
Officer (RPO) in Region I complained that he received no prior
warning from NUS of the transfer, and only became aware when he
attempted to assign a task to FIT 1 that was a potential conflict
of interest because of the state contract. Despite the fact that
he had received the monthly status reports, the RPO informed us
that he was unaware of the complaints contained in the reports
concerning the lack of field work.
The situation described above is another indication of
EPA's lack of managerial oversight concerning this contract.
The frequent turnover of contracting officers obviously affected
EPA's control over NUS. Indeed, EPA may have inadvertently helped
NUS obtain the state contract as the Agency already paid all FIT
recruiting and training costs.
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We disagree with the HQ project officer's position that the
FIT was denied field work for a "short period of time." It was
in fact more than 11 months and except for "mock exercises" FIT
1 spent most of the first year of the contract in the office.
NUS monthly status reports indicated that the lack of field work
adversely affected employee morale. Ultimately 41 percent of the
professional staff, including over half the top managers, resigned
or transferred. FIT 1 also missed the opportunity to conduct
sampling under more ideal weather conditions. EPA paid for the
recruitment and training not only of these individuals, but also
their replacements. As explained in Finding Number 3, FIT 1 spent
over half its hours on support activities such as training during
the first year of the contract. Apparently, the loss of personnel
and lack of field work increased training requirements. Commenting
on site sampling conducted during December 1987, the new FIT
office manager complained of poor weather conditions and noted the
need for intensive training, because about half the field crew
had never participated in any field activity. The training was
necessary in part due to the newness of the employees, and in part
due to the lack of sampling activities in the past year.
It would appear that the site inspection policy of Region I,
and heavy emphasis on attaining fiscal year goals were the immedi-
ate causes of the problem discussed above. However, EPA HQ shares
blame for the situation in FIT 1 because it failed to get Region
I to assign field work. We believe that EPA HQ should have taken
a far more aggressive role in order to remedy the problem in a
more timely fashion.
Region II
EPA HQ also delayed taking aggressive corrective action in
Region II. Problems with the FIT office that surfaced in the ini-
tial performance evaluation period were allowed to persist for
almost a year. During the first performance period of November 1,
1986 to February 15, 1987 the FIT charged 39,198 hours for services
rendered. The RPO in her evaluation letter to the HQ project
officer noted that the FIT'S mobilization and training effort got
off to a relatively slow start. The RPO also indicated that
although she was briefed periodically on the status of the team's
mobilization, she usually had to prod the FIT office for this
information. The HQ Performance Evaluation Board (PEB) concluded
that better communication and status briefings were needed. FIT
2 received a "satisfactory" rating for the period and was awarded
a fee of $28,261.
The FIT charged 39,828 hours for the second performance period
which ended on June 15, 1987. The RPO reported that weekly meetings
were held with the FIT as recommended. However, the RPO noted that:
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. . . there continues to be a problem with who is
briefing whom. The EPA-RPO should not have to
prod the FIT Team Leader for information on rou-
tine as well as high priority activities. It
appears the FIT Team Leader is merely providing
EPA with nothing more than lip service. Obviously,
there are still some serious deficiencies in the
area of communications which need improvement.
The PEB noted that the NUS zone program manager was aware of
the situation and would work with Region II personnel to affect
corrective action. Because of improvement in other areas the FIT
received an "exceeds expectations" rating/ and was awarded a fee
of $62,405.
The FIT charged 37,569 hours for the third performance period
which ended October 15, 1987. The RPO reported that:
The quality of FIT deliverables has been suffering.
FIT continues to demonstrate a downward slide in
their quality of writing and technical accuracy as
discussed in a number of the attached PERs. Major
portions of PAs, Sis, and ESI Workplans were poorly
written, contained conflicting statements, and often
were confusing and difficult to read. This poor
performance has placed a tremendous burden on EPA
staff to act as technical writers/editors in order
to obtain reports consistent with EPA standards.
For the first time since the inception of the FIT,
the paperwork which accompanies samples collected
in the field has become shoddy. For example,
sample chain of custody forms and traffic reports
have been improperly filled out and on occasion
have not been sent to the lab with the samples
to be analyzed. All of these issues have
been repeatedly discussed with the FIT Office
Manager in great detail but performance continues
to decline.
The RPO concluded that the weekly meetings established to
solve the communications problem highlighted in the two prior
performance periods were ineffective. She insisted that the FIT
office manager still did not seem to know what was happening, and
was unable to provide acceptable updates on the status of current
projects. Noting that this was the third performance period, the
RPO recommended that severe action be taken to prevent further
deterioration of what was once a high quality, productive team.
The PEB noted the continued existence of the communications
problem in spite of the weekly meetings. The Board also stated
that repeated discussion with FIT management concerning the poor
quality of deliverables had not produced the expected results.
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The FIT ultimately received a "less than satisfactory" rating
for the third performance period, but was awarded a fee of $30,913.
On November 20, 1987, the FIT 2 office manager was transferred to
work on another EPA contract in Region III. The corrective
action was evidently a success as the RPO reported in March of
1988 that:
Communication problems which have plagued this
office since the beginning of this contract have
miraculously ceased. Weekly meetings are once
again constructive. I am no longer kept in the
dark concerning the status of ongoing projects
and most importantly there is again a free flow-
ing exchange of information between FIT and this
office.
While we realize that rating contractor performance is a
subjective process, we believe that EPA HQ should have taken more
decisive action. It was obvious from the very beginning of the
contract that the region seriously questioned the adequacy of the
FIT 2 office manager. These criticisms continued for almost a
year before EPA HQ took effective corrective action. Moreover,
communications were not the only problem. As seen in Finding
Number 2 the region also questioned the FIT'S technical abilities.
Finally, it should be pointed out that during this period FIT 2
worked 116,595 hours, for which EPA reimbursed costs of $3,883,659,
plus base fees of $116,510, and gave NUS additional award fees of
$121,579. The award fees were based on the services provided by
FIT 2. -
Conclusion
As can be seen from our reviews in Regions I and II, the EPA
Headquarters project officer did not provide the required oversight,
In both regions adverse situations persisted for almost a year
before effective corrective action was taken. We feel that these
problems should have been resolved in a more timely fashion. To
allow these situations to exist for that length of time while
expending millions of dollars to obtain FIT services does not
seem reasonable. For this reason we are recommending that EPA
Headquarters exercise more aggressive control over FIT operations.
Recommendation
We recommend that the Assistant Administrator for Solid Waste
and Emergency Response assure that the EPA HQ project officer more
aggressively manage and direct overall zone activities under the
FIT contract with NUS. This should include instructing the
project officer to more closely monitor regional FIT operations,
and initiate corrective measures to rectify problems as they arise.
15
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Agency Response
The language depicting Agency management as "deficient" is
overly strong and inappropriate. While we agree that differences
in operation existed between the four regions in Zone I, this does
not equate to mismanagement. Certain differences among regions
should be expected because of the different situations that exist
in each region. Considerable effort has been expended in the
last two years to provide the regions with consistent policy and
guidance. The FIT Zone Contracts Management Guide, which was
distributed to the regional project officers within one month
of contract signing, is an excellent example, providing detailed
information, guidance, goals, restrictions, and requirements.
Additional examples of major or key guidance, policy, and
directives (16 are listed) are discussed in more detail in the
attachment. Specific clarification of the problems cited in
Regions I and II is also attached. Significant progress has been
made in the months since completion of the audit and the regions
are now in compliance with the requirements and goals established
after contract award. Therefore, this recommendation has already
been incorporated into the program's operation.
The draft report discusses the contractor's morale problem
in Region I. Many unrelated events are grouped into this discus-
sion and information is provided out of context. Below are several
comments germane to this issue. Although we do not dispute that
FIT personnel preferred to work in the field, there were several
factors that contributed to the lowered level of field sampling,
that were'not reflected in your report. The draft report does not
accurately reflect the impact of the winter season on the ability
to conduct field activities. The lower morale did not cause the
FIT Office Manager to resign out of frustration with events in
Region I. The draft report has misconstrued this event.
The draft report also incorrectly depicts a performance
problem existing in the entire FIT office in Region II. The
problems that existed throughout the first year of the contract
were solely attributable to the FIT 2 Office Manager not the
entire office staff. The problems which surfaced in the first
performance period resulted in a corrective action plan. However,
at the region's insistence, Headquarters agreed to allow the region
the opportunity to resolve the problem on its own. Also, over
the first two periods discussed in the draft report, the FIT'S
technical performance as documented in the PERs was not considered
a problem. Furthermore, the problems identified in period three
specifically cited the FIT Office Manager in delineating problems.
This is important to note, because the Agency received good pro-
ducts and support services during this period.
16
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Inspector General's Comments
The primary issue related to the absence of formal written
pre-remedial guidance concerns the disparities between FY 1987
Sis. Our audit shows that the definition of what constituted an
SI, the methods by which sites were selected, and the actual
format of the SI reports depended upon regional preference. As
a result, three regions conducted field visits; one region did
not. Two regions performed toxicological studies; two others
did not. The response asserts that our recommendation has been
incorporated into the program's operation. However, the response
also infers that EPA HQ provided the regions with "consistent
policy and guidance", and lists 16 examples of "major or key
guidance, policy, and directives". We would point out that
during the audit the project officer confirmed that no formal
written guidance existed until February 1988 when EPA issued its
Pre-Remedial Strategy for Implementing SARA. We would also point
out that most of the guidance cited in the Agency's response was
not available during the first year of the contract, and that none
of the guidance cited appears to have settled the question of what
exactly constitutes an SI. A further indication that better over-
sight is warranted is evidenced by the Region I response. The
response refers to the absence of EPA HQ guidance, and notes that
the FIT Zone Contracts Management Guide was published 10 months
after the contract was signed. The response also indicates that
Region I was unaware of the support activity goals for several
months and, for most of the first year of the contract, was
unaware that non-TDD charges were no longer allowable.
The response also asserted that the completion of HRS packages
precluded the FIT from performing field site inspections. We
would point out that NUS statistics indicated that only 10 percent
of FIT'S time was spent on HRS packages. Furthermore, our audit
report showed that over 50 percent of the FIT'S time was spent
on support activities such as "mock field activities". We accept
the premise that HRS work was assigned a higher priority. However,
we still believe that hours could have been made available to
allow FIT 1 to perform site inspections that complied with the
NCP which stated that samples will be routinely collected.
We did not conclude that NUS personnel resigned because of
morale problems, but received this information from conversations
with NUS managers. In any event we believe that comments contained
in NUS status reports clearly indicate that the lack of field work
affected morale over the first year of the contract. For example,
the December 1986 status report informed EPA that the assignment
of more PAs, Sis and ESIs would alleviate staff morale problems.
The May 1987 report noted that the low level of field work in the
spring and summer months had a moderately negative effect on staff
17
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morale. NUS also warned that further delay of ESI start-ups would
result in major field work during the late fall and winter months,
which would increase the cost and duration of activities such as
drilling. The June report noted that nearly all FIT'S work to
date had been office work, while the August report noted the lack
of field work over the past year necessitated a need for "mock
field exercises". It was not until November that NUS reported a
significant increase of field work. As discussed in our audit
report, FIT 1 complained about December weather conditions, and
the January 1988 status report noted that field work was curtailed
due to heavy snow.
To a certain extent we agree with the response by Region II.
We concur that a corrective action plan was implemented after the
first period, and that the RPO was not critical of the FIT'S
second period technical performance. However, as discussed else-
where in our report, the RPO did severely criticize the FIT'S
technical performance at the Lipari Landfill site in the first
period. Also, our finding indicates that the corrective action
plan failed. The RPO complained that during the second perfor-
mance period the office manager had to be prodded to supply
information, and merely provided EPA with nothing more than lip
service. Finally, we disagree that the Agency received good
products and support services during the third period. Our
report clearly indicates that this was not the case. The RPO
criticized almost 90 percent of the FIT'S performance with
comments such as, "poorly written", "technically inaccurate",
and "pathetic".
During the first year of the contract the Agency paid NUS
approximately $4 million for 116,000 FIT 2 hours. The deficien-
cies disclosed in our report appear to be attributable to more
than just the office manager. We still believe that EPA Head-
quarters should have exercised more effective managerial oversight
and taken swifter action to remedy the problem, especially when
it became apparent that the corrective action plan was a failure.
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2. AWARD FEE PROCESS
EPA needs to improve implementation of the award fee process
in order to better assess the adequacy of the work performed by
NUS. In general, the process was not carried out uniformly among
the regions, however the most serious deficiencies occurred in
Regions I and II. Region III fared considerably better, and we
considered Region IV most in compliance with EPA guidance. We
reviewed performance packages submitted for EPA evaluation over
the first year of the contract and found that:
Rating packages generally covered the
minimum number of hours required for
evaluation by EPA only by including
large amounts of support tasks such
as program management and equipment
maintenance.
Ratings were overgenerous, and did not
comply with EPA guidance. NUS was paid
award fees for deficient work, as well
as, for work that was beyond the scope
of the pre-remedial program.
Although Region III was the only region
with an elaborate procedure for reviewing
FIT rating packages, the system's results
were not used to compute the ratings.
Overall, we gained the impression that EPA was too lenient
in evaluating NUS performance. For example, FIT 1 received lauda-
tory ratings and award fees of over $90,000 despite the fact that
the FIT charged over half its time to support tasks, did not per-
form field work, and without the region's knowledge NUS transferred
a large segment of the supposedly "dedicated" team to work on a
state contract. FIT 2 received over $120,000 in award fees despite
the fact that the RPO seriously questioned the FIT office manager's
competency during most of the year. Even more confusing was EPA's
response to these situations. Rather than criticize or penalize
NUS, the Agency awarded the Zone Program Management Office with
fees of $149,000, which using EPA evaluation criteria equates to
an outstanding performance.
Finally, we understand that EPA Headquarters plans to allow
the rollover of unawarded fees. We believe that this action is
unwarranted.
We reviewed the three PER packages submitted for the first
year of the contract, and noted the following deficiencies in the
implementation of the award fee evaluation process in Regions I,
II, and III.
19
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Using Support to Meet Reporting Goals
Only FIT 3 and FIT 4 even approached the 80 percent goal,
and to their credit, did so mainly by reporting on field activi-
ties. FIT 1 and FIT 2, on the other hand, usually reported
sizeable amounts of support hours to reach the minimum goal.
EPA simply accepted for evaluation the hours submitted by
the FIT offices. Also, EPA never required NUS to increase the
percentages reported in order to attain the 80 percent goal. This
omission is extremely important because contractually EPA is bound
to pay 100 percent of NUS costs whether the work is good or not.
Therefore, we believe that the Performance Evaluation Board (PEB)
should insist that the minimum goals always be reached without
including large amounts of support. Furthermore, emphasis should
be placed on achieving the 80 percent mark, and on evaluating
work related to the primary FIT mission rather than on support
tasks.
Overgenerous Ratings
Performance ratings were overgenerous. For example, the PERs
submitted by FIT 1 for the first performance period covered 9,168
of the 17,761 hours billed to EPA. Details follow.
ACTIVITY HOURS
Contract Mobilization 1,610
Training 2,329
Technical Assistance 951
PAs 362
Sis 1,319
ESIs ' 912
HRS Support 459
RSCC Support 1,226
9,168
RATING ACTIVITY TYPE
4.0 Support
4.0 Support
4.0 Support
3.5 Pre-remedial
3.5 Pre-remedial
3.5 Pre-remedial
4.5 Pre-remedial
4.5 Remedial
In its rating, the PEB noted no weaknesses in FIT 1 perfor-
mance. The Board praised Hazard Ranking System (HRS) support
activities such as the "Strawman" project and the Regional Sample
Control Center (RSCC), noting that these two events represented
"20 percent of the reported hours." Overall FIT 1 received an
"exceeds expectations rating," and was awarded a fee of $24,288.
However, both Region I and the PEB failed to note that:
- Relatively minor effort had actually been
devoted to the primary FIT mission, i.e.,
the pre-remedial program. Over half of the
hours evaluated were for support activities.
- The PERs submitted covered 52 percent of the
hours billed EPA. Although we did not determine
precisely what the remaining 8,600 hours were
for, we understand they represented additional
support.
20
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- Only 17 percent of the total hours charged
were for FIT primary mission work, and
these hours received the lowest ratings of
all events evaluated.
- The RSCC support work was beyond the scope
of the pre-remedial program. (See Finding
Number 3 for additional details.)
- Finally, the PEB erroneously placed too much
emphasis on the HRS "Strawman" project, as
the actual hours expended represented only
2.4 percent of the PERs evaluated, and 1.2
percent of the total hours charged.
Ratings also did not comply with EPA guidance. For example,
the Regional Project Officer (RPO) evaluation of FIT 2 performance
during the third period was extremely negative. The only praise
FIT 2 received was for 393 hours of "exceptional" special studies,
and 2,169 hours of "satisfactory" remedial work that was outside
the scope of the pre-remedial program. The remaining events were
evaluated as follows:
EVENT RATING
Sis 2.5
HOURS
11,620
ESIs
2.5
3,993
GTA
2.5
4,566
PAs
2.5
880
COMMENTS
Overall quality of the SI reports
went from fair to poor; majority
were poorly written, technically
inaccurate, and had to be repeat-
edly returned for correction..
Overall performance was less than
satisfactory. One workplan was so
deficient that had it been issued
it may have caused undue concern
among the general public.
The activities referenced by FIT
comprised only a small portion of
general technical assistance (GTA),
FIT exceeded EPA estimates by more
than 1,700 hours. "Style guide"
developed to improve poor writing
by NUS should not be billable.
Overall performance was less than
satisfactory in most categories.
Overall quality of the PA reports
went from poor to pathetic.
21
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The RPO obviously considered the FIT'S performance to be
very poor, as she severely criticized almost 90 percent of the
work evaluated. According to EPA guidance, such substandard
performance could have received a zero rating, and thus zero
award fee. Instead, FIT received a 2.6 rating, and $30,913 in
award fees. The rationale used by the RPO was that FIT 2 was
already the lowest rated office within the zone, and that any
score below 3.0 was considered unsatisfactory. However, EPA's
FIT Zone Contracts Management Guide provides that a 2.5-3.0 is
satisfactory.
Fees for Deficient Work
NUS received award fees for deficient work. The Lipari Land-
fill is the number one Superfund site in the country. During the
first performance period, Region II tasked the FIT to: hire and
supervise a subcontractor to conduct air quality modeling; review
air monitoring data collected by another contractor; prepare a
final report; provide a breakdown of costs on the meteorological
monitoring program; and provide a preliminary estimation of the
public health risk associated with the landfill. In her evaluation
of the 1,289 professional hours charged to the project during the
performance period, the RPO noted that:
1. Poor planning .led to a last-minute deter-
mination that the air monitoring data was
inadequate to support the air modeling
effort. This conclusion, which could have
been made months earlier, resulted in the
expenditure of $8,000 on useless air model- .
ing, and loss of time that could have been
used to draft important sections of the
report.
2. The report was delivered on time, but only
after two major reductions in scope were
approved by EPA. These concessions resulted
in a report only barely adequate to meet the
objectives, as one of the scope reductions
included the public health assessment.
3. A lack of cost control and planning were
evident as over $5,500 was spent on a con-
tinuously inoperable data logge'r.
FIT 2 rated the work at the Lipari site as outstanding and
scored the PER at 4.5. The RPO considered the work less than
satisfactory, and changed the score to 1.5. The PEB, citing the
unnecessary costs and useless data, agreed with the 1.5 score, and
awarded NUS a nominal fee for the work at Lipari. We do not agree.
We believe that EPA was too lenient, and that a score of zero was
warranted. EPA had no recourse but to pay an estimated $50,000
22
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for this work. However, EPA was not obligated to also pay an
award fee for deficient work. The contract requires EPA to pay
all costs and base fees no matter how bad the work product. The
award fee is the only leverage the Agency has to penalize the
contractor for deficient performance. We believe that EPA should
have used this leverage to the maximum in this case, especially in
light of the fact that Lipari is the highest priority site on the
National Priorities List.
PER Review Procedures
The FIT management guide allows each region to set up its own
PER evaluation system. In Regions I, II and IV, the PERs submitted
by the FIT offices were reviewed by the RPOs who solicited comments
from other regional personnel involved in the pre-remedial program.
Beyond the PERs there was little documentation to support the
overall scores unless the ratings were less than satisfactory.
The evaluation system in Region III was more elaborate than
in the other regions. The RPO circulated PER evaluation forms to
allow regional pre-remedial personnel to score and comment on FIT
performance on specific projects. In theory this system was fine,
however in practice it was flawed, because personnel either ne-
glected to return the forms, or returned the forms incomplete.
As a result, the PER packages we reviewed did not always support
the ratings assigned by the RPO. For example, the PER package for
the third performance period covered- 5,3'07 FIT hours spent on 105
draft and 69 final PA reports. The FIT scored the event at 5.0.
The RPO praised the work as outstanding, but lowered the score to
4.5. Our review of the evaluation sheets completed by the regional
personnel indicated that the work may have been little better than
satisfactory.
The Region III file contained 86 evaluations of draft PAs
(final reports were not evaluated in any of the performance periods
reviewed). All the evaluations were numerically scored. Moreover,
18 of the evaluations also contained written comments, and as
shown below eight of the comments were critical of FIT performance.
The report was very confusing.
FIT went to the wrong site, and must do
another PA.
The report really did not support the
recommendations.
Parts of the report were not clear, a section
was missing, data was inconsistent and the
site address was wrong.
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English could have been better.
The report did not include a field trip report.
Appendices were not enclosed.
The report did not contain a section describing
the site summary.
The overall score for the 86 drafts averaged out to 3.2, or
a little more than satisfactory when compared with PEB rating
criteria. We were informed that the score was increased to 4.5
by the RPO based on his or her overall knowledge of FIT performance.
The Region III system was elaborate; the systems employed by
the other three regions were not. We believe that EPA HQ should
decide on a single evaluation system, and require all of the
regions to use this system in a uniform fashion.
Fee Rollover
The contract stipulated that fees not awarded for one per-
formance period could not again be made available for award in
subsequent periods. The FIT management guide reinforced this
policy by stating that each period would be evaluated as a unique
and separate entity, with previous evaluations having little impact
on the period being evaluated. Consequently, the contract provided
NUS a single opportunity to earn each period's award fee, while
the management guide protected the contractor from being penalized
in the future for deficient past performance.
NUS obtained $682,000 of the $970,000 award fees available
for the first year of the contract. The award fee pool contained
an additional $3.3 million to cover the contract's remaining four
years. However, after completion of our audit field work we learned
of Agency plans to change the award fee process. A January 7,
1988 memorandum from EPA HQ indicated that the Agency planned to
rollover the unearned fees in order to increase the amount available
to reward future outstanding performance. We disagree with this
plan. Rolling over unearned fees drastically changes the award
fee process stipulated in the contract, which presumably was the
process described by EPA when contractor proposals were originally
solicited. Such a change would now give NUS additional opportuni-
ties to obtain fees originally withheld.
Recommendation
We recommend that the Assistant Administrator for Solid Waste
and Emergency Response instruct the HQ project officer to:
1. Increase the minimum reporting requirement for
FIT hours from 60 to 80 percent.
24
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2. Assure that RPOs rate contractor performance
in accordance with EPA guidance. Furthermore,
award fees should be principally reserved for
work related to the FIT primary mission. In
no case should award fees be granted for
deficient work.
3. Decide on a single rating evaluation system,
and employ that system uniformly throughout
the four regions.
We recommend that the Assistant Administrator for Administra-
tion and Resources Management not permit unearned award fees to be
"rolled over" for possible award in subsequent periods.
Agency Response
There are some misconceptions in the draft report regarding
the award fee process:
- The award fee plan is not part of the contract.
It is appended to the contract and is subject
to change upon agreement of the Performance
Evaluation Board (PEB) and advance notice to
the contractor;
- NUS is not required to participate or submit
evaluations of performance. EPA has invited
NUS to submit information reflecting their
perspective of work quality;
- Rating packages have always satisfied or ex-
ceeded the minimum number of hours required
by EPA. The first period required only 50%
of total hours to be reported, subsequent
periods required 60%;
- The Performance Evaluation Board (PEB) for
the NUS contract is comprised of senior
Agency officials with considerable contract
management and award fee experience. Four
regions (2 from each zone) are represented,
as well as the Office of the Comptroller,
Procurement and Contracts Management Division
and other Superfund program offices (Remedial
and Enforcement), to bring objectivity and
detached observation to the process. Three
times per year these individuals meet to
evaluate considerable information on the
performance of each FIT team and reach
25
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decisions on award fee following extensive
deliberation and consultation. The PEB
members take their responsibility as
stewards of the taxpayer's money very
seriously, and are neither over-generous,
nor unfair.
- The additional award (roll over fee) is
made available only after outstanding
performance has been demonstrated. The
final amount of the additional award is
dependent upon performance in the follow-
ing period. The opportunity to acquire
additional fee is earned through the
contractor's performance in the
preceding period.
At no time has fee been awarded that has been unearned or for
deficient work or for work that is out of the scope of the contract,
NUS has been evaluated in a consistent, fair, and objective manner.
We disagree with this finding and are attaching detailed comments
for consideration and inclusion in the final report.
Inspector General's Comments
We revised our report to reflect your comments that FIT
offices, during the first performance period, were required to
report only 50 percent of the total hours worked. Your comments
that the award fee plan is not part of the contract and regarding
work outside the scope of the contract were also noted. Our
position regarding the remainder of this finding remains
unchanged. Our rebuttal to your general and detailed comments
are as follows.
We agree that the FIT offices satisfied or exceeded the
minimum number of hours required to be reported. However, as our
finding documented this was accomplished only by including large
amounts of support hours. We do not believe this is appropriate.
Award fees should be based primarily on the main thrust of the
contractor's efforts.
The Agency's response indicated that our finding appears to
be based upon a review of inadequate information. It must be
noted that we reviewed the very same documents made available to
the PEB. In addition, we reviewed documents in the regional
26
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offices not provided to the FEB. Furthermore, we conducted
numerous interviews with the regional project officers and FIT
office managers. As a result, we strongly disagree that our
report was based upon inadequate information when, in fact, we
reviewed more pertinent data than the FEB.
It is noteworthy to mention that the evaluation comments
contained in our report such as "poor to pathetic", "poorly |
written" and "workplan was so deficient" were the Agency's words, \
not ours. Using these words to describe the contractor's efforts /
and then providing award fees is inconsistent. We realize that 7
the award fees were mathematically calculated properly in accor-
dance with the guidance. However, the fact remains that the
evaluations were extremely critical, yet the contractor was
granted award fees. We believe the contractor was over-compensated
when award fees were provided along with the regular compensation
for work that the Agency personnel described so critically.
We were aware of your proposed action to roll over the
unearned fees to increase the amount available to reward future
outstanding performances. We believe that each rating period
should stand alone as provided for in the contract. The award x^
fees provided in each period are more than adequate to obtain ^
outstanding work. Additional incentives truly do not appear
necessary or appropriate.
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3. EXCESSIVE SUPPORT CHARGES
Overall Zone I statistics indicate that the FIT offices
spent less than half their time on their primary mission: pre-
liminary assessments (PAs), site inspections (Sis), and Hazard
Ranking System (HRS) scores. Most of the non-primary mission
charges related to support activities such as training, equipment
maintenance, program management, general technical assistance,
and quality assurance. We concluded that some of the projects
were of questionable value to the Government, and that EPA must
redirect the focus of the FIT offices to their primary mission,
the pre-remedial program.
EPA's original goal for support activities was 30 percent
of FIT professional hours. Between November 1986 and December
1987, the four FIT offices charged EPA 492,000 hours for pro-
fessional services. A status report submitted by NUS at the end
of this period indicated that the FITs had met EPA's 30 percent
support goal. We found that they had not met the goal, because
over 200,000, or almost 41 percent of the 492,000 hours were for
support. We estimated the excess support cost EPA $1.6 million.
All of the individual FIT offices exceeded the support goal,
and one office actually charged over half its time to support
activities. Moreover, since NUS charged an additional 35,000
hours for zone program management and headquarters support, the
actual ratio for support during the period was 45 percent of the
total hours charged by NUS, or $8.2 million of the $18.2 million
invoiced to date.
At the end of the first year of the contract, EPA redefined
support activities and lowered the support goal from 30 to 20
percent. We reviewed support charges under the new goal and found
that, although all of the FIT offices exceeded the goal, they
nevertheless received praiseworthy ratings from EPA in the succeed-
ing award fee process.
Background
The contract's broad scope allowed the regions to assign the
FITs a myriad of pre-remedial tasks. EPA, however, initially set
a 30 percent goal for support activities, and a 70 percent goal
for field work. The chairman of the Performance Evaluation Board
indicated that FIT offices which exceeded the field work goal would
receive higher award fees. There were five categories of support
making up the 30 percent goal.
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CATEGORY GOAL DESCRIPTION
Program 10% FIT office management, planning and
Management coordination with the region.
Training 5% Training of FIT members; training
support to EPA, States, and
other contractors; FIT attendance
at conferences.
General 6% Standard operating procedures
Technical development; subcontracting for
Assistance analytical support; computer
programming; and graphics support.
Quality 6% Data validation of site samples;
Assurance and the internal, administrative
review of FIT performance and work
products.
Equipment 3% Routine vehicle maintenance; in-
Maintenance strument calibration; health and
safety equipment maintenance; and
inventory control.
The enactment of the Superfund Amendments and Reauthorization
Act (SARA) on October 17, 1986 modified certain portions of the
pre-remedial program. Basically, EPA was tasked to complete PAs
by January 1, 1988; Sis by January 1, 1989; and HRS scores by
October 17, 1990. After a detailed analysis, the Agency admitted
that it could not complete all the Sis, or the HRS scores required
by SARA. In order to improve FIT utilization and maximize compli-
ance with SARA, EPA issued a pre-remedial strategy. This strategy
entailed a 25 percent increase of total available FIT hours, but a
decrease in the support goal from 30 to 20 percent.
Support Goals
The Zone I statistics presented by NUS for the period November
1986 through December 1987 indicated that overall FIT support
charges were compatible with EPA's goal. Details follow.
SUPPORT ACTIVITY EPA GOAL HOURS REPORTED
Project Management 10% 9%
Training 5% 7%
Equipment Maintenance 3% 5%
Technical Assistance 6% 6%
Quality Assurance 6% 3%
30% 30%
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These percentages however, failed to give an accurate picture of
the actual FIT support charges. They did not take into considera- f
tion a category of hours identified by NUS as "non-TDD" charges.
Also, they did not indicate the severity by which individual FIT
offices exceeded the 30 percent goal.
Non-TDD Charges
The EPA project officer and NUS managers informed us that
non-TDD charges were simply support hours not authorized by any
specific TDD. Evidently under the previous NUS contract EPA had
neglected to issue TDDs to keep track of support hours. Under the
current FIT contract there were to be no non-TDD hours. All work
was now required to be initiated under TDDs. In actuality, they
remained; albeit to a lesser extent. Since no TDDs authorized
these charges, NUS did not record or track them separately.
Consequently, we were unable to verify which specific support
activities these charges actually represented. Likewise, EPA had
no way of determining what these charges were actually for, beyond
the NUS assertion that they represented support.
Between November 1986 and December 1987, NUS reported 149,877
hours for support, or slightly over 30 percent of the total 492,412
FIT professional hours charged. However, the FIT offices also
charged 50,820 non-TDD hours during the same period, which raised
FIT support to over 40 percent (200,697/492,412). This was almost
11 percent higher than EPA's goal. Moreover, as seen in the follow-
ing chart the non-TDD hours represented sizeable portions of the
total hours of several FIT offices.
FIT TOTAL NON-TDD
OFFICE HOURS HOURS RATIO
1 86,049 6,023 7%
2 153,941 15,394 10%
3 119,867 22,775 "19%
4 132,555 6,628 5%
Totals 492,412 50,820
The EPA project officer maintained that because the non-TDD
ratios drastically declined in January and February of 1988, the
non-TDD problem was now under control. In response we would point
out that:
Contractually, no provision for any such
hours existed whatsoever. In fact the
contract specified that there would be
none.
30
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It took 15 months to effect the drastic
decline.
EPA in effect allowed NUS to report 10
percent of the FIT hours under a nebulous
account. Moreover, FIT 3 charged 19
percent of its hours into this same account.
As seen in the following charts, adding the non-TDD hours to
the support hours already identified by NUS, places all four FIT
offices well over EPA's 30 percent goal.
REPORTED HOURS
WITHOUT NON-TDD HOURS
FIT
OFFICE
1
2
3
4
Totals
TOTAL
HOURS
86,049
153,941
119,867
132,555
492,412
SUPPORT
HOURS PERCENTAGE
37,860
43,103
25,171
43,743
149,877
44%
28%
21%
33%
30%
ACTUAL HOURS
INCLUDING NON-TDD HOURS
FIT
OFFICE
1
2
3
4
Totals
TOTAL
HOURS
86,049
153,941
119,867
132,555
492,412
SUPPORT
HOURS PERCENTAGE
43,883
58,497
47,946
50,371
200,697
51%
38%
40%
38%
41%
Beyond the 200,697 FIT support hours, NUS charged an additional
35,444 hours for the Zone Program Management Office (ZPMO), and a
Headquarters Support Team (HST). The ZPMO provides general overall
management support to the FIT offices, and interacts with EPA HQ
officials. The HST supports EPA HQ on specific tasks such as
formulating Superfund brochures, or revisions to the HRS model.
We did not review these hours, because we wished to concentrate on
FIT utilization, and the ZPMO and HST hours were not counted against
the 30 percent support goal. However, we would point out that
31
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addition of these hours to the FIT levels raises NUS actual
support to 236,051 hours or 45 percent of the total hours charged
as of December 31, 1987. Thus, we estimate that NUS support
amounted to $8.2 million of the $18.2 million invoiced for the
period.
Review of FIT Support
We were unable to actually review the non-TDD charges because
the FIT offices had no documentation available to show what the
charges represented. We examined in detail the support charged
by FIT 1 and FIT 2 under TDDs. Our review of FIT 3 was limited
because almost half the support was charged as non-TDD, while the
files for the remaining support hours usually contained little
information beyond the TDD document itself. The files in FIT 4
were similar to the files in FIT 3. As a result, our review of
these files was also limited. The examples discussed below indi-
cate that EPA contract monies were not always spent judiciously,
and that some projects were of questionable value to the Government,
Support Activity 1; Training
The contract allowed NUS to charge EPA for FIT training costs.
As of December 31, 1987, NUS had reported that 36,624 hours were
charged for training.
FIT TRAINING HOURS
FIT REPORTED PERCENTAGE EPA GOAL
1 9,465 11% 5%
2 9,236 6% 5%
3 5,993 5% 5%
4 11,930 9% 5%
Total 36,624
We estimate that this training cost EPA more than $1.1 million.
Moreover, this does not include the non-TDD hours expended for
training. In addition to being costly we believe the number of
hours charged were excessive, and in some cases wasteful. Also,
in at least one instance the contracting officer believed that
conference attendance bordered on being prohibited personal ser-
vices. Furthermore, EPA has inadequate records to indicate what
was received for the $1.1 million.
Three of the FIT offices issued generic TDDs to cover general
staff training and training management. FIT 4 on the other hand,
issued a single TDD, which covered 97 percent of all training
hours. We were unable to completely reconcile any of these TDD's
to the available FIT records to determine the actual number of
hours charged to specific training courses. For example:
32
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TDD 8701-40 originally authorized FIT 1 to
charge 1,400 hours to training and training
management during fiscal year (FY) 1987. The
TDD was coded high priority and approved for
overtime. The RPO increased the authorization
to 4,500 hours because the FIT expected to hire
10 to 20 people during the summer, and train the
entire staff in the new HRS 2 model. Despite
the fact that only four people were actually
hired, and the HRS 2 model was not issued,
FIT 1 charged 4,440 hours, with an estimated
value of $133,000, to the TDD. We were unable
to reconstruct exactly what the charges were
for, as we could reconcile less than 900 of
the hours to actual training courses. We noted
that the replacement TDD was also coded high
priority, approved for overtime, and authorized
FIT 1 to charge 6,000 hours during FY 1988.
Some of the FIT 1 training may have been wasted, because the
team members did not get to reinforce the training with actual
field work. For example:
TDD 8701-48 authorized the FIT to implement
an internal hydrogeology program related to
studying subsurface conditions at hazardous
waste sites. Basically a manager and four
"technical coordinators" worked on the project
for 695 hours. TDD 8701-26 authorized in-house
refresher training for the 41 member FIT staff
in anticipation of field work. We question the
value of these services which cost EPA approx-
imately $40,000. As seen elsewhere in this
report, FIT 1 rarely visited any hazardous waste
sites, and 41 percent of the professional staff,
including the hydrogeology program manager and
the four technical coordinators, left FIT 1 by
the end of the contract's first year.
Different FIT offices charged health and safety training
hours under various support categories. For example, FIT 2 charged
such hours under program management. Furthermore, FIT 3 charges
appear excessive in comparison to the other FITs. FIT 1 averaged
29 hours per employee for health and safety training. FIT 2 ex-
pended about 36 hours while FIT 3 averaged at least 63 hours per
employee. However, this 63 hours does not include FIT 3 training
hours incurred between November 1986 and March 1987 because they
were charged as non-TDD hours. In addition there were 3,143 hours
charged by FIT 3 under two overall training TDDs, an unknown por-
tion of which were health and safety hours.
33
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Some of the tasks performed by the FITs were not too technical
in nature, and according to the contracting officer appeared to
border on personal services, which should have been performed by
EPA employees. For example:
TDD 8612-02 authorized 1,200 hours for FIT 1
to plan, coordinate and assist EPA in conduct-
ing pre-remedial seminars. Region I was the
only region within the zone to request such
services. The TDD was coded high priority and
approved for overtime. During FY 1987 FIT 1
charged 480 professional hours to arrange two
seminars. According to a close out memorandum
from the FIT office manager, approximately 35
EPA HQ, Region I, FIT, and State personnel
attended the meetings, which were held in
Vermont and Massachusetts. The memorandum also
stated that the FIT acted as an intermediary
for EPA. We believe that such actions could be
interpreted as personal services, and as such,
unallowable under the contract. The TDD was re-
placed in FY 1988 by TDD 8710-11. However,
instead of training it was listed as general
technical assistance. It also was for 1,200
hours, coded high priority, and approved for
overtime. Although at the time of our visit no
hours had been charged, we later learned that a
meeting in Maine must have subsequently been held.
A performance event report used to calculate award
fees explained that suspected food poisoning dis-
abled over half the conference attendees, but
that FIT acted as a "clearinghouse" to coordinate
and compile information regarding the symptoms so
that the data could be used by the Maine Department
of Health.
To a certain extent, all four regions allowed FIT staff to
attend conferences. For example, FIT 2 staff attended conferences
in Pittsburgh, Pennsylvania and Pensacola, Florida. FIT 3 staff
attended conferences in Las Vegas, Nevada and Atlantic City, New
Jersey. FIT 4 attendance at conferences was minimal. Charging
980 hours, FIT 1 staff probably attended the most conferences.
One TDD authorized up to 1,000 hours for the FIT 1 team members
hired as of November 1986 to each attend one conference during
FY 1987.
One contracting officer was uneasy about EPA paying for NUS
employees to attend conferences. He apparently had reservations
about NUS attendance at a "Second International Conference on New
Frontiers." In a September 23, 1987 memorandum to the project
officer, the contracting officer expressed the following thoughts.
34
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Although the contract could be interpreted
loosely enough to allow conference attendance,
there was a need to look at the general issue
more closely.
There was no problem if NUS conducted
training at conferences, but, from a
business standpoint, he was uncomfortable
paying NUS to simply attend a conference,
especially if it involved paying overtime.
The contracting officer believed NUS should want
to pay for its employees to attend conferences
to improve its chances at obtaining future
contracts.
He also believed that attendance at the
"New Frontiers" conference bordered on
personal services, because it appeared
NUS was asked to attend because EPA could not.
Finally, the contracting officer believed that
paying for NUS to merely attend a conference
did not look like a pre-remedial activity; did
not necessarily reflect well on the Agency;
and might not hold up too well under any type
of scrutiny—Congressional, Inspector General,
or otherwise.
The contracting officer requested written justifications for
any future conference attendance by NUS. The justification should
specifically explain why EPA employees could not attend, and clearly
show that the attendance was not personal services. The contracting
officer also thought that it would be better if NUS did not charge
the conference time directly against the contract as professional
FIT hours. A subsequent memorandum from the ZPMO to the FIT
offices indicated that in the future NUS would charge conference
registration fees as an indirect expense, but labor hours, travel
and living costs would still be direct charges against the contract.
Support Activity 2; Equipment Maintenance
As of December 31, 1987 NUS had charged EPA 23,675 hours for
equipment maintenance. Three of the four FIT offices exceeded the
EPA goal for this support function.
35
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FIT EQUIPMENT MAINTENANCE HOURS
FIT REPORTED PERCENTAGE EPA GOAL
1 4,302 5% 3%
2 7,697 5% 3%
3 2,397 2% 3%
4 9,279 7% 3%
We concentrated our review of equipment maintenance on FIT 1
charges because, although the files in the other three FIT offices
were basically only the TDD documents, these FITs did perform a
sizeable amount of field work. FIT 1 charged 10 percent of its
support charges to field equipment maintenance (4,000 hours) and
calibration (300 hours). Their field equipment inventory, valued
at $282,000, consisted of items ranging from an $8 extension cord
to eight vehicles valued at $104,000.
TDD 8611-47 authorized 1,100 hours for field
equipment maintenance during FY 1987 based on
similar charges under the previous contract.
The TDD was coded high priority and approved
for overtime. By June 1987 however, having
already exceeded the authorization by 900 hours,
FIT 1 requested an increase to 3,000 hours "to
account for hours utilized for equipment mobili-
zation and increased tracking and documentation
procedures not required under the last FIT con-
tract." The regional project officer granted
the increase, but FIT 1 again exceeded the
authorization as the TDD was eventually closed
out at 3,477 hours.
We believe these maintenance charges were excessive. As seen
elsewhere in this report, FIT 1 rarely engaged in field work.
Moreover, FIT 1 personnel were unable to explain exactly why
virtually unused equipment required three times more maintenance
than equipment actually used in the field under the old contract.
Support Activity 3; Program Management
As of December 31, 1987 NUS charged EPA 46,095 hours for
program management. This included items such as FIT office
management as well as planning and coordination with the region.
36
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FIT PROGRAM MANAGEMENT HOURS
FIT REPORTED PERCENTAGE EPA GOAL
1 12,047 14% 10%
2 13,855 9% 10%
3 9,589 8% 10%
4 10,604 8% 10%
Thus, it would appear that only FIT 1 exceeded the EPA goal.
However, we were informed that some of the program management time
was actually charged as non-TDD hours, especially by FIT 3, which
charged almost half its support time under the non-TDD heading.
As previously stated, we were unable to review such charges,
because NUS did not maintain files for non-TDD accounts. We were
also unable to review in any great detail the FIT program management
hours in FITs 2, 3, and 4, because most of these hours were charged
to a few generic management TDDs, and the supporting files rarely
contained anything beyond the TDD.
As seen above, FIT 1 was the only office to report program
management hours in excess of the 10 percent EPA goal. This was
somewhat surprising in that FIT 1 was the smallest office and
serviced the smallest region. Although the FIT 1 files were
almost equally barren as those in the other three offices, they
did vary to a certain degree. For example, FIT 1 received 17
program management TDDs, which was more than that received by any
of the other FIT offices. During our review of these TDDs we
noted the following.
TDD 8702-03 authorized 3,200 general management
hours for the FIT office manager and assistants
during FY 1987. The TDD was coded high priority
and approved for overtime. The project was
closed out at 3,835 hours without amendment
or comment by regional personnel. The project
file contained items such as PERs, letters to
schools, records of interviews, and records of
conversations with EPA personnel. The FY 1988
replacement TDD was also coded high priority
and approved for overtime, but the authorization
was increased to 5,000 hours.
TDD 8703-49 authorized 700 hours for the FIT
office manager to respond to ad hoc requests
and perform miscellaneous tasks between March
and September 1987. The project file contained
37
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no information to explain what services were
provided. The project was closed out at 1,645
hours, without amendment or comment by regional -
personnel. A replacement TDD authorized 2,600
hours for FY 1988. The project file contained
no explanation for the.488 hours charged as of
November 28, 1987. Moreover, at this rate of
expenditure, FIT 1 will end up charging the
new TDD over 4,200 hours, which is a sixfold
increase over the hours authorized under the
original TDD.
TDD 8611-43 authorized 2,000 hours for FIT 1
group leaders to track FY 1987 PA, SI, tech-
nical assistance/technical oversight, field
investigation and special study projects.
However, after expenditure of 1,587 hours
the TDD was replaced by four individual TDDs
under which an additional 2,100 hours were
authorized. Actual charges under the five
TDDs were 3,130 hours, or 1,130 hours more
than authorized under the original TDD.
Support Activity 4; Quality Assurance
NUS charged 16,406 hours to quality assurance as of December
31, 1987. All four of the FIT offices complied with the six percent
goal established by EPA. However, FIT 1 performed services related
to the remedial program rather than the pre-remedial tasks author-
ized by this contract.
FIT QUALITY ASSURANCE HOURS
FIT REPORTED PERCENTAGE EPA GOAL
1 4,302 5% 6%
2 3,079 2% 6%
3 2,397 2% 6%
4 6,628 5% 6%
Generally, quality assurance charges fell under two categories
data validation and peer review of technical deliverables. For
the most part, FIT 2 and FIT 3 worked on peer reviews. Basically,
these two offices assured that their work products, i.e., reports
and files, conformed to the NUS quality assurance manual. FIT 4
devoted most of its quality assurance hours to validation of
sampling data results related to specific Superfund sites. FIT I
split its quality assurance time between peer reviews and providing
support to the Regional Sample Control Center (RSCC). The latter
services were beyond the scope of the pre-remedial program.
38
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TDD 8611-45 authorized 1,500 hours for FIT 1
FY 1987 support to the RSCC. The TDD was coded
high priority and approved for overtime.
Tasks performed by the FIT included: training
EPA, FIT and other contractors in data vali-
dation; scheduling and tracking FIT and other
contractors' Contract Lab Program (CLP)
samples; and fulfilling EPA ad hoc requests
such as validating other contractor CLP data,
or revising their CLP tracking systems. The
TDD authorization was increased to 1,750 hours,
but actual FIT charges reached 1,909 hours. Two
new TDDs authorized 3,500 hours in FY 1988.
We believe that this was not a pre-remedial task. Usage of the
CLP by FIT 1 was minimal due to the rarity of field sampling.
The contractors assisted by the FIT were affiliated with the
enforcement or remedial programs. Moreover, the CLP maintains
an ongoing $64 million sample management office contract that
coordinates the sampling program by distributing and tracking
samples. We have no problem with the adequacy of the work per-
formed under this TDD. However, since most of the work was
remedial, it was outside the scope of the pre-remedial program.
To order these services under the FIT contract was inappropriate
for two reasons. First, EPA has other means to obtain these very
same services. Second, the Agency admitted that it cannot meet
all of the pre-remedial tasks required by SARA.
Support Activity 5; General Technical Assistance
NUS charged 27,077 hours to general technical assistance as
of December 31, 1987. These services included such items as
maintaining computer tracking systems, developing a toxicological
data base, and coordinating pre-remedial seminars. With the
exception of FIT 1 all of the FIT offices met the EPA goal.
FIT GENERAL TECHNICAL ASSISTANCE HOURS
FIT REPORTED PERCENTAGE EPA GOAL
1 7,744 9% 6%
2 9,236 6% 6%
3 4,795 4% 6%
4 5,302 4% 6%
FIT 2, in addition to specific projects, charged an estimated
6,500 hours or 70 percent of its general technical assistance time
to ad hoc services. Neither we nor EPA were able to determine
what actual services were supplied for the bulk of these hours.
For example:
39
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TDD 8612-04 authorized 2,500 hours for ad hoc
services. The TDD was coded high priority
and approved for overtime. NUS accounting
records indicated that 1,067 hours had been
charged to the TDD, however the FIT project
file contained nothing to explain what services
were provided. TDD 8703-31 replacing 8612-04
authorized another 2,500 hours for ad hoc
services. It also was coded high priority
and approved for overtime. NUS accounting
records indicated that 1,214 hours had
been charged, and the only performance
indicated by the project file was the
receipt of "new and readable congressional
district maps. . . for New York and New Jersey."
TDD 8706-31, replacing 8703-31, authorized
1,500 hours for ad hoc services. It also was
coded high priority and approved for overtime.
At the time of our review the TDD had been
completed for one month, but there was as
yet no Acknowledgement of Completion (AOC)
form. NUS accounting records indicated charges
of 3,535 hours, or more than double the amount
authorized. In a performance evaluation for
the period, the RPO criticized the FIT for
not properly categorizing general technical
assistance work, and inferred that severe
management problems were responsible for the
extensive overruns.
The RPO also criticized FIT 2 for billing EPA 225 general
technical assistance hours for an editorial style manual. In a
November 3, 1987, memorandum, she informed the HQ project officer
that:
I have been aware that an Editorial Style Guide
was being developed in response to numerous
complaints from this office regarding persistent
editorial/technical writing problems. However, I
learned only after inquiring about FIT'S self
evaluation for General Technical Assistance that
this style guide was prepared for the Environ-
mental Services Division of EPA. This document
was never reviewed and/or commented on by this
office and was not prepared for EPA. It was my
belief that the sole intent of this style guide
was to correct internal NUS/FIT Quality Control
problems. Furthermore, it is the strong opinion
of this office that a persistent problem such
as poor quality of the deliverables is an in-
ternal NUS problem and corrective measures such
as this Editorial Style Guide should not be a
billable item.
40
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Other Support Activities
The contract allowed NUS to charge other categories of support
such as enforcement and special studies. These categories were not
counted against the 30 percent EPA support goal. As of December 31,
1987, NUS had charged 26,474 enforcement support hours, and 27,219
hours to special studies. The contract described enforcement as
support for governmental proceedings against parties potentially
responsible for hazardous site conditions. Such proceedings could
include obtaining an injunction against continued use of the site,
issuing an order to undertake remedial action to clean up the
site, or recovery of costs incurred by the Government in under-
taking such actions.
FIT ENFORCEMENT SUPPORT HOURS
FIT REPORTED PERCENTAGE
10 0%
2 21,552 14%
3 3,596 3%
4 1,326 1%
As depicted in the above chart, FIT 2 charged the most hours
to enforcement support. However, we found that 17,664, or 82 per-
cent of the hours were unrelated to enforcement, or any other type
of pre-remedial work. These hours were charged for a remedial
investigation/feasibility study. Consequently, FIT 2 spent over
11 percent of its total effort during the first year of the pre-
remedial contract on remedial work.
Amended Support Goal
In September 1987, concerned over regional utilization of the
FIT offices, EPA HQ drafted a pre-remedial strategy for implementing
SARA. This strategy instructed RPOs to minimize FIT support of
programs other than the pre-remedial program. It also emphasized
that the primary mission of the FIT offices was to conduct PA, SI,
and HRS related activities. The pre-remedial goal for support was
reduced from 30 to 20 percent, and HQ planned to increase overall
FIT hours by 25 percent. The HQ project officer and his deputy
informed us that the reduction would be accomplished by shifting
QA from support to site specific TDDs, and by eliminating general
technical assistance. The new pre-remedial goals set by the HQ
project officer are shown in the following chart.
41
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COMPARISON OF PRE-REMEDIAL GOALS
CATEGORY FORMER GOAL NEW GOAL
Project Management 10% 10%
Training 5% 5%
Equipment Maintenance 3% 4%
Quality Assurance 6% 0%
General Technical Assistance 6% 0%
Non-TDD 0% 0%
Enforcement 0% 0%
Special Studies 0% 0%
Fudge Factor NA 1%
Total Support 30% 20%
Primary Mission (PA,SI etc.) 70%
Total FIT 100%
In effect, FIT allowances under the new definition of support have
increased by two percent. Although the allowable categories add
up to 19 percent, the project officer added a one percent "fudge
factor" to arrive at the 20 percent goal. Also, the equipment
maintenance allowance was increased by one percent.
We reviewed statistics supplied by NUS since the new support
goal took effect, and found that none of the FIT offices had met
either the support or primary mission goals.
FIT PERCENTAGES JANUARY-FEBRUARY 1988
CATEGORY GOAL 1234
Project 10% 14% 10% 13% 7%
Management
Training 5% 11% 4% 8% 7%
Equipment
Maintenance 4% 5% 5% 4% 6%
General
Technical
Assistance 0% 4% 7% - 5% 2%
Non-TDD 0% 0% 2% 3% 2%
Enforcement 0% 0% 13% 0% 1%
42
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FIT PERCENTAGES JANUARY-FEBRUARY 1988
CATEGORY GOAL 1 2 3
Special
Studies 0% 12% 10% 5% 3%
Fudge Factor 1%
Total Support 20%
Primary Mission 80%
Total FIT 100%
Despite the fact that none of the FIT offices met their pre-
remedial goals all of the offices received "exceeds expectations"
or "outstanding" ratings, in the award fee performance evaluations
for the period ended February 1988.
Conclusion
Invoices were not reconcilable to individual TDDs. Proper
internal controls dictate that hours billed on invoices be rec-
oncilable to TDDs. Basically, EPA relied on NUS to charge the
FIT hours in accordance with the contract. EPA and NUS officials
repeatedly told us that, since the FITs are fully dedicated to EPA
work, the Government is obligated to pay all costs. Therefore, it
is better to keep the FITs occupied as much as possible. Based on
our review we concluded that better utilization of the Zone I FIT
offices is warranted, and that more of the FITs' efforts should be
expended on the pre-remedial program, which is the primary reason
the contract with NUS was awarded.
Recommendation
We recommend that the Assistant Administrator for Solid Waste
and Emergency Response instruct the HQ project officer to:
1. Assure that regional project officers
authorize no more than 20 percent of
FIT hours as support.
2. Eliminate all non-TDD charges and assure
that contract invoices are reconcilable
to individual TDDs.
3. Direct NUS to charge FIT support hours
in a uniform fashion. For example,
training hours should be charged against
specific training TDDs, and not against
program management, or general technical
assistance.
43
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4. Require NUS to document support project
files to the extent that hours charged
are reconcilable to services provided.
5. Minimize work performed outside the scope
of the pre-remedial program.
Agency Response
Because the contract scope is very broad, the priorities for
the use of the contract are established by EPA program managers.
It is our present position that the FIT contracts should focus on
basic pre-remedial activities. This has been our directive to the
regions since contract inception. The goals mentioned for the
various contract activities were established at the beginning of
the contract and have been modified once; we have worked with the
regions on implementation. We agree that regional compliance was
not achieved as quickly as originally hoped. However, this com-
pliance has been accomplished since January/February 1988. The
reasons that regional compliance in this area lagged include:
- In the previous FIT contracts, the regions
only issued Technical Directive Documents
(TDDs) for technical work activities. Thus,
it was difficult to get regions accustomed
to issuing TDDs for program support or for
work other than basic field activities.
Since January, however, this situation
has rapidly improved, and non-TDD hours
are now nearly non-existent;
- It is not unusual to find support hours
higher in the mobilization stages of a
contract. Note that in the period of the
study (the first year), the FIT contracts
were awarded, mobilized, and experienced
two substantial expansions through exer-
cising of options. Please note that the
information attached (Tables 8-12) show
that no more than 20% of FIT hours have
been used for support since last January.
The IG's recommendations have been
implemented.
The work activities mentioned in the draft report (i.e.,
Ciba Geigy and Regional Sample Control Center support), while
not related to the pre-remedial program, are within the scope
of the contract. Also, we do not believe that we need to direct
NUS to document support project files so that all hours charged
are reconcilable, because this is already being done.
44
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In addition to the comments above, the Agency's response
contained detailed comments concerning the nature and value of
support hours.
Inspector General's Comments
We revised our report to reflect your assertion that the
RSCC and Remedial Investigation/Feasibility Study (RI/FS) were
within the scope of the contract. However, we still maintain
that this work is outside the scope of the pre-remedial program.
It is also noteworthy that the reasons this issue was discussed
in our report, are still quite valid. Performing this type of
work is still inappropriate for the two reasons originally dis-
cussed on page 39. First, EPA has other means to obtain these
very same services. Second, the Agency admitted that it cannot
meet all of the pre-remedial tasks required by SARA.
In your response you agree that the regions did not meet the
support goals specified by Headquarters during the first year of
the contract. The response offered several reasons why compliance
was not achieved. Furthermore, you contend that compliance was
attained since the completion of our review.
We disagree--wl'tEHEEe" reasons provided for incurring excessive
support hours. First, contrary to the statement the^response
provided,/non-TDD hours are contractually unallowable.) Second,
the contractor -was__.already providing similar services- under a
previous contract. Consequently, mobilization cost should have
been minimal during the first year of the contract.
We also do not agree that the amount of support decreased to
an acceptable level during the period subsequent to our review.
During the first eight months of the contract's second year, the
contractor expended 27 percent of their hours on support while the
goal was 20 percent. These hours cost the Agency approximately
$2.6 million. FIT I alone spent 34 percent of their hours on
support, costing approximately $500,000.
Our conclusion that support hours are still excessive disagrees
with the opinion as stated in the response. This occurred because
of our differing interpretations of what constitutes support. The
Agency personnel now are not categorizing GTA as support. GTA was
considered support during the first year of the contract and we
believe it should still be support. GTA is work related to or
described as: developing standard operating procedures, computer
program development and implementation. TDDs for GTA authorized
tasks such as: providing general technical assistance in support
of a computer tracking system, attending the 1987 Superfund con-
ference, performing health and safety activities in support of the
overall FIT program, and assisting EPA to conduct a pre-remedial
seminar. This included evaluating locations and facilities, along
45
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with providing audio visual aids and supplies. Clearly these
items were not related to the FIT primary mission and should be
support. By including GTA in the calculation of support, the
contractor expended 27 percent of their hours for support type
work.
FIT PERCENTAGES NOVEMBER 1987 - JUNE 1988
CATEGORY GOAL
PM 10%
TR 5%
EM 4%
Non-TDD 0%
GTA 0%
Fudge Factor 1%
Total Support 20%
2
8%
4%
4%
2%
7%
34%
25%
11%
8%
3%
2%
9%
33%
4
6%
6%
5%
2%
2%
ZONE
9%
6%
4%
2%
6%
21%
27%
We agree that support services are essential as your response
indicated. However, we believe support should be kept to a minimum
and the vast majority of the FIT effort expended for work related
to the FIT primary mission of performing PAs, Sis, ESIs, and HRS.
We noted that the contractor expended 27 percent of its effort for
support and GTA during the second year of the contract. Also NUS
expended an additional 9 percent for enforcement support and
special studies. This equates to 36 percent of their effort not
spent on PAs, Sis, ESIs, and HRS.
We did note in our report that ZPMO and HST are support type
hours. However, these categories were not counted against the
support goal. We merely indicated how many hours were expended
during the first year of the contract for these items.
We still believe there is a need to direct the contractor to
document support project files so that all hours charged are recon-
cilable. Our objective in reviewing the non-TDD issue was to
determine which services the contractor performed for over 50,000
hours, costing approximately $1.5 million, during the first year
of the contract. We were informed that all the hours represent
support and that a further breakdown of these hours was not
available. We believe it is essential to basic management that
both the regional EPA offices and the regional FITs know which
services were provided for the non-TDD hours expended. If the
contractor's zone office maintains such extensive non-TDD records,
we recommend they share the information with EPA and their own
regional FIT offices.
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4. SITE INSPECTION VARIATIONS
Disparities existed in the FY 1987 site inspections (Sis)
performed in the four regions of Zone I. The definition of what
constituted an SI, the methods by which sites were selected and
the actual format of the SI reports depended upon regional
preference. SI reports in two of the regions contained toxi-
cological assessments, while the other two regions considered
such assessments to be premature. Region I Sis were the most
peculiar, since 75 percent of them were not performed in accordance
with either the FIT contract, or the National Contingency Plan,
because site visits were not performed. Moreover, it took EPA HQ
over a year to formally issue guidance, during which time NUS
charged the Agency an estimated $4.7 million for 158,000 FIT
hours spent on SI projects. To date, Sis have not been performed
in a uniform fashion. We recommend that over the remainder of the
contract EPA HQ require regional project officers to follow a
single pre-remedial strategy. This is needed because each region
uses the information obtained from Sis to compute HRS scores.
Background
The National Contingency Plan (NCP) contained in 40 CFR
300.66 implemented Superfund. It describes an SI as a visual
inspection of the site that routinely includes collection of
samples. The purposes of an SI are:
(1) To establish whether the site is an actual or
a potential threat.
(2) To determine if the threat is an immediate one.
(3) To collect data, where appropriate, to determine
if the site merits placement on the National
Priorities List (NPL).
The FIT contract stipulates that an SI always involves a site
visit, and that analytical data is a presumed output of the SI.
The scope of the inspection can vary from a relatively minor
sampling and reconnaissance visit to a detailed hydrological
assessment. The information obtained is to be submitted on an EPA
standard form which has the HRS as its primary focus. The contract
also requires the submission of a written narrative which reports
the results of the inspection, and the conclusions drawn by the
FIT.
Region I Site Inspections
Until February 1988, the NCP and the FIT contract constituted
the only written instruction pertaining to Sis. The project officer
maintained that EPA HQ verbally instructed the regions to initially
select the worst sites as SI candidates, and add any lower priority
sites that could be covered during the same field visit. Basically,
three regions adhered to this selection scheme, while one did not.
47
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Region I assigned Sis on the basis of geography instead of
priority, and rarely authorized the FIT to conduct field visits
or collect site samples. Regional Superfund officials believed
that FIT resources might be wasted if the new HRS, mandated by
SARA for release on October 1, 1988 required the sites be re-
visited and resampled.
In February 1987, Region I instituted "junior" Sis, which
eliminated field visits, sampling, and the preparation of large
reports. As a result, SI budgets fell from 400 to 160 hours. The
purpose of these Sis remained the same as that of the previous
"full scale" Sis, i.e.,to generate HRS data. However, the
"junior" Sis focused primarily on using information obtainable
from potentially responsible parties, or from state agency files,
rather than actually going into the field and taking site samples.
Thus, in effect the "field" investigation team became a "file"
investigation team. During FY 1987, the region issued 80 SI tasks
to the FIT. NUS tracking records indicated the following status
for these Sis.
FY 1987 REGION I Sis
SITES FIELD WORK STATUS
6 Performed under prior contract
10 Performed under current contract
4 Planned in the future
60 None performed
The lack of field work and the region's SI selection methods
resulted in:
75 percent (60 of 80) of the Sis not being
performed in accordance with either the NCP,
or the FIT contract.
Severe FIT morale problems which led to employee
turnover, and the holding of "mock" exercises in
a yard adjacent to the FIT office, in order to
maintain proficiency in field sampling.
FIT complaints about time wasted when sites
assigned fell under the Resource Conservation
and Recovery Act, rather than Superfund.
Increased SI hours when the FIT experienced
difficulty in gaining access to state files.
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Overall, about half of the Sis with no field work exceeded
the 160 hour budget. Five of these Sis even exceeded the 400 hour
budget previously allotted for the "full scale" Sis. The RPO
supplied us with the report for one of the five sites as an example
of a "junior" SI. The Gracelawn Landfill report consisted of a 14
page EPA form 2070-13, and a 17 page preliminary HRS package. NUS
records indicated that the SI took 310 hours, during which time
the FIT visited the site, and reviewed state as well as Potentially
Responsible Party (PRP) data. We found that the visit actually
occurred during a preliminary assessment conducted seven months
prior, under the previous contract. FIT 1 updated the PA infor-
mation, combined it with additional information obtained from the
state and the PRP's consultant, and assembled the "junior" SI
report. NUS tracking records indicated that a subsequent TDD
authorized a site reconnaissance to calculate an HRS score.
Charges to this TDD at the time of our review amounted to 280
hours. Consequently, even without sampling, FIT 1 expended 590
hours exceeding the budgetary levels for both "junior" and "full
scale" Sis.
The HQ project officer and the NUS zone program manager
insisted that they unsuccessfully tried to persuade Region I to
perform Sis in the same fashion as the rest of the zone. However,
the region opposed this suggestion and awaited the issuance of the
revised HRS. Region I was the only one of the four regions to
advance this argument. Regions II, III,,and IV continued to visit
sites and take samples. Ironically, the most geographically com-
pact region refused to authorize field visits, while Region IV,
with the greatest territory to cover, constantly deployed its'FIT
to the field.
EPA extended the release date for the revised HRS to April
1989. The Agency issued a Pre-Remedial Strategy for Implementing
SARA (Directive 9345.2-01) in February 1988. Stressing that EPA
could ill afford losing momentum by waiting for the new HRS, the
strategy suggested that the regions use the existing HRS and asso-
ciated SI procedures. The strategy provided two alternative methods
of selecting SI candidates.
(1) Focusing on medium priority sites that have
some potential, but not a high likelihood,
of making the NPL, and
(2) Focusing on high priority sites that are
likely to make the NPL.
Region I opposed this pre-remedial strategy, when it was issued
for comment in August of 1987. However, the HQ project officer
informed us that he had finally convinced Region I Superfund
personnel that they should no longer wait for the revised HRS.
We would point out that it took EPA HQ a full year to convince
Region I to perform the Sis in accordance with the NCP.
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Toxicological Assessments
Region III SI reports contained a Toxicological Assessment.
This assessment was a formal report by a NUS toxicologist, which
discussed the properties and possible health hazards posed by
substances detected on site during the SI. We noted that these
assessments contributed to delays in issuing SI reports under the
prior contract. Region IV SI reports contained similar, but less
formal reviews entitled Public Health Assessments. We discussed
the value of such assessments during our visits to the regions and
the FIT offices. Both EPA and NUS employees expressed reservations
about these reviews. For example, employees questioned whether
the assessments were not in fact premature, and others believed SI
sampling too limited to draw such conclusions. We believe that
EPA HQ should judge the merits of these assessments, and require
the regions to abide by this decision.
Recommendation
We recommend that the Assistant Administrator for Solid Waste
and Emergency Response:
1. Assure that regions select SI candidates in
accordance with the Agency's Pre-Remedial
Strategy for Implementing SARA.
2. Direct the regions to have Sis performed in
accordance with the NCP.
3. Decide whether Sis should include Toxicological
Assessments.
Agency Response
Although a certain degree of consistency is desirable, varia-
tions among regions should be expected. This generally reflects
the preference of one region for additional information not
considered necessary by another region and the realities of in-
specting different types of waste sites in various parts of the
country. The singular and most notable variation occurred in
Region I during the period studied. While Region I should have
continued to conduct routine site inspections, their approach
neither violated the contract nor the the NCP as indicated in
the draft report. Some degree of regional variation must be
permitted in conducting field activities; no two hazardous waste
sites are alike and geological differences exist from region to
region. Headquarters staff worked with the region during this
period to correct this situation.
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The variations in SI procedures from one region to another
will not result in sites being inaccurately placed on the NPL
Before a site is proposed for listing, quality assurance is per-
formed on all data necessary to support listing. In fact, the
stringent data requirements of the HRS often necessitate different
data collection efforts at different sites. Additional information
on this issue is provided in the detailed discussion attached.
Lastly, the regions have been conducting site inspections in
a manner more consistent with the IG's concerns and OSWER guidance
since this spring. This is the result of increased Headquarters
program emphasis on consistency, primarily aimed at controlling
the budget.
We do not believe that it is in our best interests to mandate
Toxicological Assessments for every SI. The FIT core FTE for each
region includes a Toxicologist, so regions have the capability to
do toxicological assessment if that seems useful. The IG has not
suggested a reason for mandating these assessments.
Inspector General's Comments
The response above, as well as, the response provided to Find-
ing Number 1 indicates that Headquarters believed that Region I
should have conducted field visits. However, your response indicates
that the region should perform field visits for reasons other than
the ones we cited in the report, such as complying with the NCP.
We still believe that the reasons we provided were correct. Be
that as it may, the primary issue appears resolved. The regions,
as you state, are now conducting site inspections in a manner more
consistent with our concerns about compliance with national policy.
However, we do not agree that the decision by the region not to
visit the site was within their discretion. We believe that proper
oversight by Headquarters would have highlighted this issue to
Agency management for resolution.
Regarding Toxicological Assessments, our report does not
mandate that every SI requires one. We recommended that the
Agency decide whether Sis should include Toxicological Assessments .x
Your response did not address this recommendation. Hopefully your
response to our final report will resolve this issue.
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5. OBTAINING REQUIRED PROFESSIONAL STAFFING
EPA needs to ensure that the personnel assigned to each FIT
office satisfy contract staffing requirements. We found that the
managers at two FIT offices did not have the experience required
by the contract.
The contract categorized FIT staff under numeric professional
levels which ranged from one to four (PL-1 to PL-4). FIT office
managers must qualify under the PL-4 category. The EPA FIT Zone
Contracts Management Guide updated this requirement and also estab-
lished the educational and experience levels required for the four
professional levels used under this contract. The requirements of
a PL-4 were either a Ph.D. degree with 10 years experience, or a
M.S. degree with 12 years experience or a B.S. degree with 14 or
more years experience.
The FIT 1 office manager was a PL-3 with an M.S. degree and
only 7.3 years experience. This person needed an additional 4.7
years experience to qualify as a PL-4. The FIT 2 office manager
was a PL-4 and had a B.S degree and 12.6 years experience. This
employee did not have the required 14 years experience to qualify
as a PL-4. In this situation EPA reimbursed the contractor for
the services of a PL-4, but received the services of a person
qualified only as a PL-3. While it is important that all con-
tractor personnel satisfy staffing requirements, it is essential
that the office managers have the necessary experience. These
office managers are responsible for the successful performance of
the contractor's efforts. They supervise the operation of the
FIT, directing field and support activities. Office managers
plan, conduct and supervise projects of major significance. They
need to exhibit proven managerial skills and knowledge at hazardous
waste sites.
Recommendation
We recommend that the Assistant Administrator for Administra-
tion and Resources Management instruct the contracting officer to
obtain the resumes of all current and future FIT office managers
to assure that they satisfy the educational and experience require-
ments of the contract.
Agency Response
We agree with the finding that two FIT Office Managers did not
appear to meet the strict experience requirements laid out in the
contract. However, the requirements established by the Agency (for
its protection) can be waived when a highly qualified candidate is
nominated for a key position. In both cases, the Region I and
Region II Office Managers have many years of direct FIT experience
via previous contract work. Qualifications of both candidates were
thoroughly reviewed by the region, the project officer, and the
contracting officer and found to be entirely acceptable. Resumes
and approval letters are on file.
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Inspector General's Comments
The response provided indicates the two managers did not
appear to meet the experience requirements of the contract.
However, in fact, they did not meet these requirements. We were
always aware that these requirements could be waived and during
this audit we asked for documentation supporting a waiver.
However, documentation supporting a waiver was not provided
during the audit.
During the exit conference personnel from the Office of
Administration and Resources Management stated that the required
approval letters would be provided. Our review of these letters
disclosed no specific discussion of experience levels. As a
result, we believe the letters provided do not adequately
document a waiver.
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6. IMPROVING TDD ADMINISTRATION
Procedures for the preparation of Technical Directive Docu-
ments (TDDs) need improvement. The four regions reviewed did not
always comply with contract requirements and EPA guidance concerning
the use of TDDs. We found several deficiencies such as:
Work initiated without TDDs
- Amendments to TDDs not processed
Acknowledgement of Completions (AOCs)
not completed
It is essential that TDDs are processed in accordance with contract
provisions to ensure that the contractor has a clear understanding
of the work requirements. In view of the significant value of
this contract, in excess of $125 million, it is also essential the
services required are clearly defined and all other provisions
such as due dates, priority, estimated costs and direction on
reporting requirements are clearly defined before work is initiated.
The EPA FIT Zone Contracts Management Guide provides pro-
cedures for carrying out the terms of the contracts. This Guide
established that TDDs should provide the FIT contractor with such
items as a specific scope of work to be performed, a schedule of
deliverables, an estimate of the resources required (labor and
subcontracts) and directions on reporting requirements. TDDs
should be issued to cover all hours worked by the contractor and
each TDD should specify a single program or work activity such as
PAs, Sis, enforcement 'support or special studies to name a few of
the 11 possible work activities. All planned FIT activities such
as general technical assistance, program management, equipment
maintenance and calibration, training and quality assurance should
be initiated by TDDs with a time period spanning a trimester.
Amendments to TDDs are required if the scope of work changes or if
administrative elements such as estimated hours or the priority
level changes. Upon completion of a TDD assignment, the contractor
should prepare an AOC and forward it with the final deliverable to
the RPO within 14 days.
At the time of our field work approximately 2,500 TDDs were
issued under this contract by the four EPA regions in Zone I. We
reviewed all of the 166 TDDs issued for support services. Our
review disclosed numerous deficiencies with the administration of
these TDDs.
First, 57 TDDs were signed by EPA after the project start
date shown on the TDD. These projects included training courses,
comments on draft HRS plans, attending meetings and performing
management activities. The TDDs for these projects were signed
from one to 65 days after the project start dates. Details follow:
54
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NUMBER OF DAYS
TDD WAS SIGNED NUMBER
AFTER PROJECT OF
INITIATED TDDs
1-10 30
11-30 7
31-65 20.
Total 5T_
For eight of these TDDs the projects were actually completed
before the TDD was signed by EPA personnel. For example, in one
region, a TDD provided 2,000 hours of training in support of the
overall FIT program from July 4, 1987 through October 30, 1987.
This TDD was signed by EPA on August 14, 1987 or 41 days after the
TDD start date. A subsequent TDD for the period October 31, 1987
through February 26, 1988 provided an additional 3,000 hours for
training. This TDD was not signed until January 4, 1988, which
was 65 days late. It is noteworthy that, over 1,000 hours of
training was provided before EPA signed this TDD and the TDD
required NUS to notify the RPO of the date and type of any
specialized training prior to each course. Further, the EPA
files for both TDDs did not contain any other information other
than the TDD itself. As a result, EPA reimbursed the contractor
an estimated $150,000 for over 5,000 hours and yet had no inform-
ation to show what training was obtained.
Second, we also found that 21 TDDs were not amended when the
estimated hours, that NUS was authorized to expend, were exceeded.
The 21 TDDs exceeded the amount authorized by as many as 2,035
hours or an average of 445 hours each. For example, one TDD
authorized 2,500 hours for program management. This included
administrative and general non-project management and the prepa-
ration of performance evaluation reports. NUS expended 3,860
hours and EPA did not initiate an amendment.
Third, AOCs were not prepared for 32 TDDs. The AOCs for
these were not issued for as many as 12 months after the completion
date. For example, one TDD for an estimated 1,800 hours actually
had 2,526 hours expended. This TDD with a start date of March 9,
1987, and a completion date of June 30, 1987, still did not have
an AOC completed at the time of our review in December 1987.
In addition to the discrepancies discussed above we noted
that FIT 1 and FIT 4 did not issue their support TDDs on a
quarterly basis as required. FIT 1 TDDs were issued for each
fiscal year while FIT 4 issued them for the entire contract.
FIT 4 TDDs contained no estimated hours or completion dates.
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As a result of the conditions described above the contractor
initiated, and in some cases completed, projects without written
instructions from EPA. Without clear and complete written work
authorizations, EPA is not in a position to hold the contractor
accountable or to establish a record of what it directed the
contractor to perform. Furthermore, the lack of clear and com-
plete TDDs could adversely affect the recovery of cleanup costs
under SARA. For these reasons we are recommending that the
Agency should implement procedures to improve TDD administration.
Recommendation
We recommend the Assistant Administrator for Solid Waste and
Emergency Response instruct the HQ project officer to assure
that TDDs are administered in accordance with the EPA FIT Zone
Contracts Management Guide.
Agency Response
We agree that "it is essential that TDDs are processed in
accordance with contract provisions to insure that the contractor
has a clear understanding of work requirements." The Technical
Directive Document (TDD) was designed clearly to define work scope
and related provisions such as due dates, priority, estimated
hours and costs, reporting requirements, and dates. The initiation
and administration of the TDD and acknowledgement of completion
(AOC) forms are clearly delineated in the FIT Zone Contracts
Management Guide issued to each region, and have been thoroughly
discussed in presentations made at each annual National FIT contracu
management meeting as well as in routine communication with the
project and deputy project officers. In addition, TDD administra-
tion is carefully reviewed during FIT regional reviews conducted
by Headquarters personnel -.— guidance and emphasis has been placed
on TDD administration.
Unfortunately a very small percentage of TDDs (approximately
2%) did not fully comply with our guidance during the period of
the audit. This is not unusual considering that over 2,500 TDDs
are issued annually. These situations occurred primarily for
support function areas, in which we requested regions retroactively
to issue TDDs in order to eliminate non-TDD hours. This was a new
requirement for the regions, and we believe that regions now are
in full compliance.
Inspector General's Comments
We disagree that TDD administration problems occurred primarily
for the support function areas. Although we only performed an in-
depth review of support TDDs, problems with other types of TDDs were
56
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also noted. The problems identified were similar to those found
for support TDDs. However, just the support TDDs alone document
a significant expenditure of Agency resources. Consequently, it
is essential that administrative problems for these and all TDDs
are eliminated or reduced to a minimum level.
It appears that your statement suggesting that the TDDs
reviewed were retroactively issued is without merit. These
documents reviewed were signed and dated by EPA and contractor
personnel at various times during the first year of the contract.
This would indicate that TDDs were not signed as a result of a
specific HQ request.
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APPENDIX A
GLOSSARY OF ACRONYMS
AOC Acknowledgement of Completion
CLP Contract Laboratory Program
EPA Environmental Protection Agency
ESI Expanded Site Inspection
FIT Field Investigation Team
FS Feasibility Studies
FY Fiscal Year
HQ EPA Headquarters
HRS Hazard Ranking System
HST Headquarters Support Team
NCP National Contingency Plan
NPL National Priorities List
PA Preliminary Assessment
PEB Performance Evaluation Board
PER Award Fee Performance Event Report
PRP Potentially Responsible Parties
RI Remedial Investigation
RPO Regional Project Officer
RSCC Regional Sample Control Center
SARA Superfund Amendments and Reauthorization Act
SI Site Inspection
TDD Technical Directive Document
ZPMO Zone Program Management Office
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APPENDIX B
AGENCY RESPONSE TO THE DRAFT REPORT
NOTE: Several documents which accompanied the Agency's
response to the draft report were not attached to our
report because it was so voluminous. The entire
document is on file in our office and is available
upon request. Portions omitted are:
Exhibit 1 - FIT Zone Contracts Management Guide
Tab 1 - Region I comments to the draft report
Tab 2 - Region II comments to the draft report
Tab 3 - Region III comments to the draft report
Tab 4 - NUS response to the draft report
Tab 5 - Statistics concerning Zone I SI activities
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,1*0 ST,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
Appendix B
of 35
SEP I 2 1987
OFFICE OF
SOLIDWASTE AND EMERGENCY RESPONSE
MEMORANDUM
SUBJECT:
FROM:
TO:
Report of Audit on EPA's Utilization of the Zone I
Field Investigation Team (FIT),, (Audit No E5eh7-03-0273
J. Winston Porter
Assistant Administl:
Ernest E.
Assistant
Bradley I
Inspector
General for Audit
The Office of Solid Waste and Emergency Response and the
Office of Administration and Resources Management have reviewed
the subject draft audit report. As requested, we have reviewed
the factual accuracy of the data presented in the report and have
attached detailed comments on the first four findings. General
comments on the report itself, as well as the six findings/
recommendations are provided below.
The draft report demonstrates a generally good understanding
of the FIT contract by the audit team and contains useful
recommendations. However, the report presents a negative view of
the Agency's use and management of this contract. This appears
to be due to misconceptions, or a misunderstanding, by the audit
team of the differences between programmatic goals versus contract
requirements of the FIT contract and the roles of Headquarters
and Regional offices in managing it.
Our other comment pertains to the timing of the audit
(specifically the audit covered the first 13 months of a five
year contract), and the fact that major Headquarters' policies,
guidances, and accomplishments related to the contract's use in
the pre-remedial program were not evident to the audit team. In
fact, major accomplishments of Regional compliance with Headquarters'
policies initiated after contract award were achieved near the
end of the first year. Also, a number of Headquarters' policies
and guidances related to the contract and its use in the pre-
remedial program were not considered. Some of these policies and
guidances were, in fact, completed toward the end of the audit
period and the contents and effects were not visible to the audit
team. Major accomplishments have occurred but have not been
reflected in the audit report.
SEP 15 1988
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Appendix B
Page 2 of 35
- 2 -
We appreciate the opportunity to provide you with information
on the report's findings and recommendations.
Summary of Findings/Recommendations and Responses
1. FIT Program Management
Findings/Recommendation
In its first finding, the IG states that "Agency management
of the FIT program was deficient" resulting in "four somewhat
diverse Regional programs, rather than a single uniform FIT
program." The IG recommends that EPA Headquarters project officer
more aggressively manage and direct overall zone activities.
Response
The language depiciting Agency management as "deficient" is
overly strong and inappropriate. While we agree that differences
in operation existed between the four Regions in Zone I, this
does not equate to mismanagement. Certain differences among
Regions should be expected because of the difference situations
that exist in each Region. Considerable effort has been expended
in the last two years to provide the Regions with consistent
policy and guidance. The FIT Zone Contacts Management Guide,
which was distributed to the Regional Project Officers within one
month of contract signing, is an excellent example, providing
detailed information, guidance, goals, restrictions, and requirements.
Additional examples of major or key guidance, policy, and directives
(16 are listed) are discussed in more detail in the attachment.
Specific clarification of the problems cited in Regions I and II
is also attached. Significant progress has been made in the
months since completion of the audit and the Regions are now in
compliance with the requirements and goals established after
contract award. Therefore, this recommendation has already been
incorporated into the program's operation.
2. Award Fee Process
Findings/Recommendations
The second finding states that EPA needs to improve implementation
of the award fee process in order to better assess the adequacy
of work performed. The IG recommends that the AA/OSWER instruct
the Headquarters' project officer to: increase the minimum reporting
requirements for FIT hours from 60 to 80% — and adhere to the
current 60% requirement; ensure that RPOs rate contractor performance
in accord with EPA guidance; and decide on a single rating evaluation
system to be employed uniformly throughout the four Regions. It
was also recommended that the AA/OARM not permit unearned award
fees to be "rolled over" for possible award in subsequent periods.
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Appendix B
Page 3 of 35
- 3 -
Response
There are some misconceptions in the draft report regarding
the award fee process:
- the award fee plan is not part of the contract. It is
appended to the contract and is subject to change upon
agreement of the Performance Evaluation Board (PEB) and
advance notice to the contractor;
- NUS is not required to participate or submit
evaluations of performance. EPA has invited NUS to
submit information reflecting their perspective of work
quality;
- rating packages have always satisfied or exceeded the
minimum number of hours required by EPA. The first
period required only 50% of total hours to be reported,
subsequent periods required 60%;
- the work activities mentioned in the draft report
(i.e., Ciba Geigy and Regional Sample Control Center
(RSCC) support), while not related to the pre-remedial
program, are within the scope of the contract;
- the Performance Evaluation Board (PEB) for the NUS
contract is comprised of senior Agency officials with
considerable contract management and award fee experience.
Four Regions (2 from each Zone) are represented, as well
a& the Office of the Comptroller, Procurement and Contracts
Management Division and other Superfund program offices
(Remedial and Enforcement), to bring objectivity and
detached observation to the process. Three times per year
these individuals meet to evaluate considerable information
on the performance of each FIT team and reach decisions on
award fee following extensive deliberation and consul-
tation. The PEB members take their responsibility as
stewards of the taxpayer's money very seriously, and are
neither over-generous, nor unfair.
- the additional award (roll over of fee) is made available
only after outstanding performance has been demonstrated.
The final amount of the additional award is dependent upon
performance in the following period. The opportunity to
acquire additional fee is earned through the contractor's
performance in the preceding period.
At no time has fee been awarded that has been unearned or
for deficient work or for work that is out of the scope of the
contract. NUS has been evaluated in a consistent, fair, and
objective manner. We disagree with this finding and are attaching
detailed comments for consideration and inclusion in the final
report.
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Appendix B
Page 4 of 35
- 4 -
3. Excessive Support Charges
Findings/Recommendations
The report stated that FIT offices spent less than half of
their time on their primary mission -- PAs, Sis, and the development
of HRS scores and that most of the non-primary mission charges
related to support activities were for training, equipment maintenance,
program management, and general technical assistance. The report
also States that EPA must redirect the focus of the FIT offices to
their primary mission, the preremedial program. The IG recommends
that the AA/OSWER instruct the Headquarters project officer to:
ensure that RPOs authorize no more than 20% of FIT hours as support;
eliminate all non-TDD charges and ensure that invoices are reconcilable
to individual TDDs; direct NUS to charge FIT support hours in a
uniform fashion; require NUS to document support project files so
that hours charged are reconcilable to services provided; and
eliminate all work outside the scope of the contract.
Response
Because the contract scope is very broad, the priorities for
the use of the contract are established by EPA program managers.
It is our present position that the FIT contracts should focus on
basic pre-remedial activities. This has been our directive to
the Regions since contract inception. The goals mentioned for
the various contract activities were established at the beginning
of the contract and have been modified once; we have worked with
the Regions on implementation. We agree that Regional compliance
was not achieved as quickly as originally hoped. However, this
compliance has been accomplished since January/February 1988 (see
detailed information below).
The reasons that Regional compliance in this area lagged
i nclude:
- in the previous FIT contracts, the Regions only issued
Technical Directive Documents (TDDs) for technical work
activities. Thus, it was difficult to get Regions
accustomed to issuing TDDs for program support or for work
other than basic field activities. Since January, however,
this situation has rapidly improved, and non-TDD hours are
now nearly non-existent;
- it is not unusually to find support hours higher in the
mobilization stages of a contract. Note that in the
period of the study (the first year), the FIT contracts
were awarded, mobilized, and experienced two substantial
-------
Appendix B
Page 5 of 35
- 5 -
expansions through exercising of options. Please note that the
information attached (Tables 8-12) show that no more than 20% of
FIT hours have been used for support since last January. The
IG's recommendations have been implemented.
We do not believe that we need to direct NUS to document
Support project files so that all hours changed are reconcilable,
because this is already being done. At Tab 4 is additional
details on this.
4. Site Inspection Variations
Findings/Recommendations
The report states that disparities existed in the FY 1987
site inspections (Sis) performed in the four Regions in Zone I;
the definition of an SI, methods to select sites, and format of
reports depended on Regional preference; and Sis to date have not
been performed in a uniform fashion. The IG recommends that the
AA/OSWER: ensure tha't Regions select SI candidates in accordance
with the Pre-Remedial Strategy for Implementing SARA; direct
Regions to have Sis performed in accordance with the NCP; and
decide whether Sis should include Toxicological Assessments.
Response
Although a certain degree of consistency is desirable,
variations among Regions should be expected. This generally
reflects the preference of one Region for additional information
not considered necessary by another Region and the realities of
inspecting different types of waste sites in various parts of the
country. The singular and most notable variation occurred in
Region I during the period studied. While Region I should have
continued to conduct routine site inspections, their approach
neither violated the contract nor the National Contingency Plan
(NCP) as indicated in the draft report. Some degree of Regional
variation must be permitted in conducting field activities; no
two hazardous waste sites are alike and geological differences
exist from Region to Region. Headquarters staff worked with the
Region during this period to correct this situation.
The variations in SI procedures from one Region to another
will not result in sites being inaccurately placed on the National
Priorities List (NPL). Before a site is proposed for listing,
quality assurance (QA) is performed on all data necessary to
support listing. In fact, the stringent data requirements of
the HRS often necessitate different data collection efforts at
different sites. Additional information on this issue is provided
in the detailed discussion attached.
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Appendix B
Page 6 of 35
- 6 -
Lastly, the Regions have been conducting site inspections in
a manner more consistent with the IG's concerns and OSWER
guidance since this spring. This is the result of increased
Headquarters program emphasis on consistency, primarily aimed
at controlling the budget.
We do not believe that it is in our best interests to
mandate Toxicological Assessments for every SI. The FIT core
FTE for each Region includes a Toxicologist, so Regions have
the capability to do toxicological assessment if that seems
useful. The IG has not suggested a reason for mandating
these assessments.
5. Obtaining Required Professional Staffing
Findings/Recommendation
The report states that EPA needs to ensure that the
personnel assigned to each FIT Office satisfy contract staffing
requirements. The IG recommends that the AA/OARM instruct
the contracting officer to obtain resumes of all current and
future FIT office managers.
Response
We agree with the finding that two FIT Office Managers
did not appear to meet the strict experience requirements
laid out in the contract. However, the requirements established
by the Agency (for its protection) can be waived when a highly
qualified candidate is nominated for a key position. In both
cases, the Region I and Region II Office Managers have many
years of direct FIT experience via previous contract work.
Qualifications of both candidates were thoroughly reviewed by
the Region, the Project Officer, and the Contracting Officer
and found to be entirely acceptable. Resumes and approval
letters are on file.
6. Improving TDD Administration
Findings/Recommendations
Lastly, the draft report states that the four Regions
did not always comply with contract requirements and EPA
guidance concerning the use of TDDs. The IG recommends that
the AA/OSWER: ensure that Regions select SI candidates in
accordance with the Pre-Remedial Strategy for Implementing SARA;
direct Regions to have Sis performed in accordance with the
NCP; and decide whether Sis should include Toxicological Assessments
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Appendix B
Page 7 of 35
- 7 -
Response
We agree that "it is essential that TDDS are processed in
accordance with contract provisions to insure that the contractor
has a clear understanding of work requirements." The Technical
Directive Document (TDD) was designed clearly to define work
scope and related provisions such as due dates, priority, estimated
hours and costs, reporting requirements, and dates. The initiation
and administration of the TDD and acknowledgement of completion
(AOC) forms are clearly delineated in the FIT Zone Contracts
Management Guide issued to each Region, and have been thoroughly
discussed in presentations made at each annual National FIT
contract management meeting as well as in routine communication
with the project and deputy project officers. In addition, TDD
administration is carefully reviewed during FIT Regional reviews
conducted by Headquarters personnel — guidance and emphasis has
been placed on TDD administration.
Unfortunately a very small percentage of TDDs (approximately
2%) did not fully comply with our guidance during the period of
the audit. This is not unusual considering that over 2,500
TDDs are issued annually These situations occurred primarily
for support function areas, in which we requested Regions retroactively
to issue TDDS in order to eliminate non-TDD hours. This was a
new requirement for the Regions, and we believe that Regions now
are in full compliance.
Attachments
Attachments 1-3 Regions I, II and III responses/comments
Attachment 4 Ltr report from NUS on non-TDD hours
Attachment 5 Section 4.0 Site Inspections FY 1987
(pages 4-1 to 4-16)
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Appendix B
Page 8 of 35
7
Detailed Comments on Findings and Recommendations
The following comments are provided to enable you to correct
portions of statements and findings presented in the draft report.
These comments are provided by page number to readily identify the
point in the draft document which needs correction. These comments
do not refute opinion or observations and only provide facts for
the purpose of accuracy. Comments are provided for findings 1-4
only.
Finding 11 - FIT Program Management
Pg. #9 - Paragraph *1: The draft report states that Agency
management of the FIT program was deficient, and that Headquarters
did not participate in the management of the contract and that no
formal written guidance concerning the pre-remedial program was
available (during a 17 month period) except for the National
Contingency Plan. Please note that considerable direction was
provided to the Regions on the FIT contracts and the pre-remedial
program during the study period. The major guidance and policy
documents are listed below:
1) FIT Zone Contract Users Guide - December 9, 1986.
This manual, distributed within one month of contract
award, contained over 140 pages of specific
information, guidance, restrictions and requirements
on the administration of the contracts. The manual
was created to assist and guide Regions in their day
to day activities and provide overall goals and
objectives to maximize the contract's value to EPA.
The table of contents, list of appendices and list of
exhibits from this manual is attached as Exhibit #1.
2) Policy memorandum (from H. Snyder) - Distribution of
L.O.E. Hours for the First Option in the FIT
Contracts, December 24, 1986. This memo directs the
Regions to address the SARA goals for Preliminary
Assessments (PAs) and Site Inspections (Sis). It
discusses and emphasizes basic pre-remedial activities
and appropriate FIT resource distribution and use.
3) First Annual FIT/Pre-remedial Conference - February
1987. Major conference themes: Redirect/streamline
FIT resources so as to minimize all non PA/SI/ESI
hours; strengthen new PAs; reduce backlog of sites
needing further investigation; new Sis for HRS II;
clear out recently completed Sis for October 1987 NPL
Update. Agenda and briefing materials are available
upon request.
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Appendix B
Page 9 of 35
8
4) Policy memorandum (from Henry Longest) - Resource Use
committed to Expanded Site Inspections, May 1, 1987.
Policy on FIT resource usage during ESIs.
5) Policy memorandum (from Stephen Lingle) - Completing
Preliminary Assessments to Comply with SARA
Requirements, July 10, 1987. Pre-remedial program
policy and directive for completing PAs.
6) FIT Zone Contract Management Guide, - September, 1987.
Comprehensive, detailed manual (3-ring binder) for FIT
contract administration (an update of 1986 users
manual). Established goals and targets beyond
contract requirements.
*7) Expanded Site Inspection - Transitional Guidance for
Fiscal Year 1988, October 1987. OSWER Directive
#9345.1-02 (self explanatory). Note, this guidance
was issued to the Regions in draft form in October
1987.
8) SI/HRS Information Bulletin. Vol. 1, No. 1, November
1987. Guidance and policy on conduct on Sis under old
HRS and potential new HRS data collection
requirements.
*9) Memorandum (from Scott Fredericks) - Implementation of
EPA's Field Analytical Screening Program, December 4,
1987. This memo describes FIT's objectives in the
pre-remedial program and the use of field screening in
the site inspection process to complement the Contract
Laboratory Program (CLP).
10) Preliminary Assessment Guidance - Fiscal Year 1988,
January 1988. OSWER Directive #9345.0-01 (self
explanatory). Note, this guidance was issued to the
Regions in draft form on October 16, 1987.
11) Pre-remedial Planning, January 1988. Briefing
document emphasizes conduct of creditable effort on SI
goal; pre-remedial assistance to shorten RI/FS
process; to integrate the EPI; and discusses pre-
remedial output capacity. Used in meetings and
Regional reviews.
12) Memorandum (from Stephen Lingle) - Distribution of
Additional L.O.E. Hours, FIT Zone Contracts, January
15, 1988. Policy on use of FIT resources, and
allocation of FIT resources based on workload.
13) Pre-Remedial Strategy for Implementing SARA, February
12, 1988. OSWER Directive #9345.201. Overall
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Appendix B
Page 10 of 3i
(revised) pre-remedial program policy and strategy.
This directive was distributed to the Regions for
review and assessment on August 14, 1987.
*14J Second Annual FIT/Pre-remedial Conference - February
10-12. Discussion topics: overview of first contract
year; implementation of pre-remedial program strategy;
PA reassessments; FIT transition from FY 87 to FY 88;
Regional contract management and oversight; SSA and
HRS studies and program. As with the first conference
over 80 attendees representing all Regions and pre-
remedial program offices. Agenda and related
materials available.
15) Memorandum (from Henry Longest) - Pre-Remedial
Priorities, April 4, 1988. Transmitted OERR policy on
pre-remedial activity priorities for FY 88 and FY 89.
This memo directed the Regions in the use of the FIT
contract and reiterated information previously
supplied to the Regions in the FIT Zone Contracts
Management Guide., at the annual FIT/Pre-remedial
Conference and in numerous discussions and memoranda.
16) CERCLA Pre-Remedial Program Manual: Policies,
Procedures and Guidance, Vol. tl Site Assessment.
December, 1987. This manual was created to hold all
policies, procedures, and guidance issued in the pre-
remedial program. All documents listed above with an
asterisk (*) were included. This document also
contained a directory of key contracts within each
Region and Headquarters.
Headquarters also created a Pre-remedial Guidance Workgroup
early 1967. This group, composed of Regional and State
^.rsonnel. reviewed and proposed guidance and policy on pre-
remedial activities. They corresponded regularly, and conducted
three 2-day meetings during the 17 month period addressed by the
draft report.
in
pe
1. October 28-29, 1987
2. December 9-10, 1987
3. April 13-14, 1988
Agendas and minutes of these full 2-day meetings are available.
The above information demonstrates that Headquarters has
taken a proactive role in managing the FIT contracts and directing
the Region's I pre-remedial program. The written policy and
guidance documents, contract management manuals, workgroup
meetings,: National conferences and Regional reviews demonstrate a
responsible effort on the part of Headquarters to direct the
Regions in program policy and in the use of the FIT contracts.
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Appendix B
Page 11 of 3
10
Note that our guidance recognizes that Regions need
flexibility to exercise professional judgement to address varying
field situations and to respond to shifting priorities. This should
not be construed as virtual autonomy. In addition to specific
guidance supplied by Headquarters, the Regions also must
ultimately satisfy the needs and requirements of the HRS. These
constraints function to further direct Regional operations.
Finding #1 - Region I issues
Pg. #10 - The draft report discusses a morale problem in
Region I. Many unrelated events are grouped into this discussion
and information is provided out of context. Below are several
comments germane to this issue. In addition., a detailed account
of this issue from Region I is attached (Attachment 11). The
Region I response also discusses other issues raised in the draft
report. Our general comments are as follows:
o Although we do not dispute that FIT personnel preferred to
work in the field, there were several factors that
contributed to the lowered level of field sampling, that
were not reflected in your report.
o With the advent of the new HRS, Regions were instructed
they could do one last update under the old HRS. Region !•
had a large number of sites with completed site
inspections they wanted to include in this update. One of
the FIT tasks was to prepare HRS packages on these sites.
This intensive effort was explained to the Headquarters
project officer as one of the reasons for the reduction in
field sampling.
o The Region also indicated the PA reassessment effort
established as a priority by Headquarters further diverted
field activities.
o The draft report does not accurately reflect the impact of
the winter season on the ability of the Region to conduct-
field activities.
o The draft report does not reflect the fact that many site
inspections were completed using existing sampling data.
o We do not disagree that the "junior" SI concept adopted by
Region I also contributed substantially to the reduction
in field work. Headquarters made its position on that
approach clear to the Region. The decision of the Region
to continue with that approach was within their
discretion.
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Appendix B
Page 12 of 3:
11
Pg. |13 - The "short period of time" statement credited to
the project officer was not made regarding the 11 month period
discussed in the draft report, nor was it intended to apply to a
lack of field work over such a period. This statement is out of
context and unfairly represents the position of the project
officer.
Pg. #13 - The FIT Office Manager did not resign out of
frustration with events in Region I. In conversations with EPA
personnel, he stated he was looking for opportunity for
advancement in the Boston area which was not available with NUS.
The draft report has misconstrued this event.
Pg. #13 - The 7 employees (who left to take advantage of
career opportunities) represents only 17% of the Region I office
work force and not 41% as implied in the draft report (7 out of 41
LOE FTE). Note that 1 of these employees has since returned to the
FIT office. Of the other 6, 4 left their new jobs for other
employment within 6 months - indicating they were probably looking
anyway. The draft report assumes they left for morale reasons, and
erroneously depicts a serious situation in the Region I office.
o Refer to the attached response from Region I, regarding
issues pertaining to that Region.
Finding fl - Region II Issues
Pg. #14 - The draft report incorrectly depicts a problem
situation in Region II which can be readily corrected through
confirmation discussions with Regional personnel of the following
points:
o EPA Headquarters was aware of the Region's concerns when
they were reported in the initial performance evaluation
period.
o Immediate discussions with Region II resulted in a
corrective action plan which involved close scrutiny of
the situation, but at the Region's insistence,
Headquarters agreed to allow the Region the opportunity to
resolve the problem on their own.
o Headquarters worked with Region II directly during this
entire period. Until the third period, the only problem
reported by the Region regarding the FIT pertained to
communication difficulties with the FIT Office Manager.
o The Region gave the FIT Office Manager the opportunity
over two full reporting periods to rectify the situation.
This was a reasonable and fair time.
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Appendix B
Page 13 of 3f
12
o In period three, the Region acknowledged they could not
resolve the situation and documented problems justifying a
personnel action. Prior to the award fee meeting, the
Region informed Headquarters of their performance report
and requested assistance from the project officer.
o Working with the Zone Program Manager the project officer
effected a change in FIT Office Manager within 2 weeks.
This occurred prior to the Performance Evaluation Board
(PEB) meeting on November 30, 1987. The Region submitted
a memo to the project officer (November 30, 1987)
commending this immediate response and indicating a
turnaround of the management problem cited in the award
fee package.
o Contrary to the draft report, the project officer affected
an immediate change upon request for assistance by the
Region. These facts may not have been understood at the
time the draft report was prepared and should be
considered in order to present an accurate account of
events.
Note that the Region cited problems with the Office Manager
only in their cover memo to the Regional Evaluation Package. The
performance event reports (PERs).which document the value of the
overall team's performance to the Agency did not reflect any
problems. Over the first two periods discussed in the draft
report the FIT'S technical performance as documented in the PERs
was not considered a problem. Furthermore, the problems
identified in period three specifically cited the FIT Office
Manager in delineating problems. This is important to note,
because the Agency received good products and support services
during this period. During the period of the draft report,
performance was first rated satisfactory, then as exceeds
expectations, before deteriorating to less-than-satisfactory.
This latter rating was necessary to document a problem in order to
effect a change. It does not imply all work by the entire team was
less than satisfactory. The award fee discussion which follows
reflects the fact that the Performance Evaluation Board, in
weighing the good with the bad, still felt some fees were
warranted. It should also be noted that a Regional EPA Manager
from Edison, who is intimately familiar with FIT performance, sits
on the Board and provided an accurate assessment of overall
performance for the Board's consideration. Refer to Attachments #2
and #3 for comments submitted by Region II and III respectively.
These comments address additional issues relative to each Region.
In summary, the Agency has and continues to work towards
achieving the goals it has established for the conduct of the FIT
contract. The draft report recommends that the EPA Project
Officer aggressively manage and direct overall zone activities.
This is also our objective. As reflected in our response, we
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Appendix B
Page 14 of 3f
13
believe that contract management has not been deficient and that
there are no serious problems in the operations of the contract.
Indeed, the contract has been continually refined from the date of
award. Significant guidance has been provided to the Regions over
the past year, and the Regions are now in compliance with the
goals, policies and objectives established in that guidance.
Thus, your specific recommendations have been achieved. Please
note that these contracts provide considerable value and essential
support to the Agency.
Finding #2 - Award Fee Process
The draft report indicates the Agency needs to improve
implementation of the award fee process in order to better assess
the adequacy of work performed by the contractor. EPA believes
that the award fee process is sound, and continues to institute
improvements in the process. It is our opinion that the award fee
process has been thorough, fair, and without deficiencies.
EPA HQ provided the Inspector General with Regional
performance evaluation packages submitted to EPA HQ for the first
year of the contract. Award fee letter reports, which document
the findings of tne Performance Evaluation Board were also
provided for the first three periods of review. These are
additional sources of 'information that should be reviewed for
purpose of the audit. The award fee letter- reports in particular
do not provide sufficient insight into the Board's deliberations,
because they are a brief summary of the Board's findings, and do
not present a point by point discussion of the information
available to the board. As such they are not a sufficient base for
conclusions of this audit.
In order to aid in the production of an accurate final
report, the following information is provided. This should provide
a clearer understanding of the award fee process and the findings
of the FIT Performance Evaluation Board.
Characterization of the Award Fee Process
The Audit Report executive summary characterizes the award
fee process, from initiation in the Regions to completion at EPA
HQ (Pg. #7 - paragraph 12).
This summary of the Regional performance evaluation process
is misleading. The FIT Offices are free to choose which events to
include in the self-evaluation, and are often able to complete
this task in advance of the EPA Regional office. The implication
that Regional personnel simply review the contractor's PERs,
adjust the scores if necessary, and forward a summary to EPA HQ is
incorrect. It should be noted that until the first Performance
Evaluation Board met, the award fee process operated under
guidelines provided in the FIT Zone Contracts Users' Manual. As
-------
Appendix B
Page 15 of 3.
14
stated earlier, this document was distributed to all Regional
Project Officers early in the second month of the contract.
Chapter VII of the Users' Manual outlines procedures followed by
EPA during the first performance period. As stated in the Users'
manual:
o The evaluation process begins in the Regional offices
which are charged with monitoring the day to day
activities of the contractor. Regional Performance
Monitors review projects, tasks, and activities performed
by the contractor and complete Award Fee Performance
Event Reports (PERs). In addition to the Region's PERs,
the contractor is invited to submit self-evaluations
which cover the same event. For each event reviewed, the
Regional Evaluation Package should include the Region's
PER and the contractor's self-evaluation as an
attachment. The RPO gathers PERs from performance
monitors and assesses and validates the reports to assure
that they are accurate.
Contractor self-evaluations not accompanied by a Regional PER
are discarded by EPA HQ. Regional project officers (RPOs) are
responsible for ensuring that each complete PER is included in the
Regional Performance Evaluation package submitted to EPA HQ. The
obligation to review and report on performance rests with the RPO,
not the contractor. The contractor has the option of submitting,
or withholding self-evaluations, although it is clearly in their
interest to submit a self-evaluation.
No required minimum percentage of hours to be reviewed is
cited in the FIT Zone Contracts Users' Manual. Chapter VII does
state that tne process is similar to the CPAF Performance
Evaluation plan used for the FIT portions of the Zone I and II
REM/FIT contracts, which indicated that review of 51% of the total
nours worked was an acceptable level. For the previous four (4)
years tue FIT contracts used 51% as their reporting requirement.
Tne requirement that Regional Evaluation Packages include review of
60 - 80% of the total hours wor*t:a was not established until after
the firsc performance period.
The Inspector General's underlying concern that hours not
reviewed may include substandard performance is one that EPA HQ
has addressed. Specifically, RPOs are instructed to always review
performance which stands out from the norm. All tasks which are
perfotiufeQ in a less-than-satisfactory manner are reported. When
awarding fee, the t-*=i.Lormance Evaluation Board operates under the
assumption that those hours not formally reviewed are either on a
par with those presented, or at worst, represent satisfactory
performance. Under no circumstances does less-than-satisra^tory
performance go unreported.
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Appendix B
Page 16 of
15
Appropriateness of Awards
Finding
Performance ratings, (and by inference awards) were
overgenerous and did not comply with EPA guidance. The contractor
was awarded fees for deficient work, as well as work that was
beyond the scope of the contract.
Response
This finding appears to be based upon a review of inadequate
information (cited earlier). In an attempt to provide some
insight into the Performance Evaluation Board's decisions, the
following information is provided.
The calculation and alignment of an award range was carried
out at the first meeting of the Performance Evaluation Board per
standard procedure for cost plus award fee (CPAF) contracts. This
meeting was neld on April 2, 1987, five months into the first
contract year. At that time the Board modified the existing
performance evaluation criteria (a memorandum from then Board
Chairman Walt Kovalick outlines these modifications in full). The
Board established that for purposes of the award fee process, the
primary mission of the FIT contract is the conduct of PAs and Sis,
and as such, Regions reporting a large percentage of hours devoted
to such activities would receive special recognition from the
Board. In addition, FITs which exceed the goal of dedicating 70%
of their total level of effort (LOE) hours to field activities will
also receive special recognition. However, FIT performance on
tasks categorized as part of the FIT primary mission is not the
sole criteria for awarding fee. The Board also recognized that
efficiency of operations and quality of work are primary
performance criteria. All other criteria are viewed by the Board
as subelements of efficient work efforts which result in quality
deliverables.
The Performance Evaluation Board during its initial meeting,
decided to award only 45% of the available award fee for fully
satisfactory performance. In effect, the contractor would now
have to consistently perform at a higher level to earn an
equivalent amount of fee as on a fixed fee type contract. The
Board's intention was to increase the contractor's incentive to
perform in an above satisfactory manner.
It is the prerogative of the PEB to establish the level of
award for average performance and to set the range of recommended
award for a given level of performance. The range of award for a
given level of performance was set by the Board as follows:
-------
Appendix B
Page 17 of 3:
Adjectival
Rating
% Range of
Award
16
Description of Performance
Less than
Satisfactory
0-34
Satisfactory 35 - 55
Exceeds 56 - 78
Expectations
Outstanding 79 - 100
Substandard performance requiring
immediate corrective action. Some
good performance but significantly
offset by problem areas.
Expected performance.
Areas requiring improvement offset
by good performance in other
areas.
Superior performance exceeding the
satisfactory level. Monitors can
cite only minor areas requiring
improvement.
Demonstrates initiative, ingenuity
and creativity or excellent
performance under adverse
ci rcumstances.
We believe that this range reflects a conservative approach by
the board.. It is also important to note that fee is not awarded
for performance on individual tasks, but rather for the
contractor's work during a period as a whole. Fee is not allocated
or distributed per individual task. The merit of each individual
task is weighed by each member of the Board. The weight indicated
in each Regional evaluation package is based solely on the LOE
hours dedicated to a particular task,, and gives no indication of
the value of that task to the Agency. While the Board can award
zero fee for any one specific major failing, in the instances of
"deficient" performance cited in your draft report, the Board
decided (based upon positive aspects of performance) that a less
dramatic reduction in award would be more appropriate. At no time
was the contractor awarded fee for work that was completely without
merit.
A series of graphs and tables (tables 1-7) based upon review
of the first five periods of performance has been prepared
summarizing the findings of the Performance Evaluation Board to
date. Comparison of fees available with those awarded indicate
that as appropriate, the contractor was penalized for deficient
performance. Referring to table 12, it can be seen that after
three periods, the contractor was awarded 66% of the available
award fee (70% of total fee; award plus base). This performance
was rated as exceeds expectations. In comparison,, an equivalent
cost plus fixed fee (CPFF) contract of this type provides fee
between 8-10% of total costs', regardless of the quality of
performance.
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Appendix B
Page 18 of 3:
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Appendix B
Page 25 of 3.
17
Factual Errors Concerning the Award of Fee
The assertion (pg. #17) that the contractor should be
penalized for transferring a large segment of the supposedly
"dedicated" team to work on a State contract, without the Region's
knowledge is incorrect. As noted in the Region I response
(Attachment #1), NUS1 acceptance of a contract with the State
(MWRA) in no way violated the FIT contract. To penalize the
contractor on this point would be inappropriate.
Pg. #18 Table #2: the draft report's grouping of activities
is inaccurate. Technical assistance is not considered support
work within the grouping of program management, training, and
equipment maintenance. Neither is RSCC Support necessarily
remedial work (QA/QC of FIT's own pre-remedial data in support of
the RSCC is clearly not remedial work).
Pg. #19. paragraph #1, Subelement #4: The draft report's
classification of remedial support work as beyond the scope of the
contract is incorrect. Such work is contrary to EPA HQs* stated
policy for the preferred utilization of the FIT contract, but it is
not outside the scope of the contract.
Pg. #20, paragraph #2: Region II FIT received $30,913 in
award fees for the third performance period. $99,720 were
available, thus 31% of the available fee was awarded. According
to the award fee scale, 31% falls into the "less than
satisfactory" range of award, not "satisfactory" as stated in the
draft report.
Pg. #22, paragraph #4: "A January 1988 memorandum from EPA
HQ indicated that the Agency planned to roll over the unearned fees
in order to increase the amount available to reward future
outstanding performance. . . Such a change would now give NUS
additional opportunities to obtain fees originally withneld."
This represents a misunderstanding of the award fee rollover
plan. Additional award (roll over of fee) is made available only
after outstanding performance has been demonstrated. The final
amount of the additional award is dependent upon performance in the
following period. The opportunity to acquire additional fee is
earned through the contractor's performance in the preceding
period, and in effect, awarded by the Board. In this manner EPA HQ
increases the incentive for consistently outstanding performance.
The award fee plan is appended to contract, but is actually
not part of the official contract. It is provided simply for the
edification of the contractor. Design and execution of the Award
Fee Plan is the prerogative of EPA. Changes in award fee policy
such as outlined above, are subject to approval of the Performance
Evaluation Board and the Agency's Procurement and Contracts
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Appendix B
Page 26 of 3f
18
Management Division, and would not necessitate a change in the
contract.
General Recommendations
EPA HQ accepts and agrees with the Inspector General's
recommendations that Regions be required to review a minimum
percentage of the total hours worked in a given period, and that a
uniform system of evaluating contractor performance be employed
throughout the Zone.
EPA HQ, and the Performance Evaluation Board respectfully do
not accept the recommendation that the roll over of fee which
remains following periods of outstanding performance be
disallowed.
Finding #3 - Excessive Support Charges
The draft report embodies several misconceptions regarding
the nature and value of support hours provided by the contracts.
The discussion of the issue of support hours reflects a
misunderstanding of what is and what is not considered a support
function by EPA and the fact that the FIT contract is comprised of
dedicated teams. The following information i.s provided for
consideration:
o Until the EPA Project Officer issued the FIT Zone
Contracts User's Manual, on December 9, 1987, there was no
provision, contractually or otherwise, to track FIT
activities by TDD category. An EPA HQ initiative
commencing in March of 1987, required the contractor to
report the monthly expenditure of total FIT LOE for the
five "support" activities defined by Headquarters. The
activities and goals were:
Program Management 10%
Training 5%
Equipment Maintenance 3%
Quality Assurance 6%
General Technical Assistance 6%
o Upon review and analysis Headquarters decided to modify
these activity goals because quality assurance (QA) and
general technical assistance (GTAJ were considered to be
task activities rather than support activities.
o In November 1987,- NUS was instructed to report LOE
utilization according to the following:
Program Support
Program Management
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Appendix B
Page 27 of 3S
19
Training
Equipment Maintenance
Total Goal 20%
Basic Activities
Preliminary Assessment
Site Inspections
Expanded Site Inspections
Hazard Ranking Scoring
Quality Assurance 70% encouraged
Other Activities
General Technical Assistance
Enforcement Support
Special Studies
o While EPA recommended goals for the individual elements
comprising program support (i.e. program management 10%)
it felt only the achievement of an overall 20% goal was
important.
o Similarly EPA recognized that the "other activities" were
critical to the Agency's mission (thus included in the
contract scope and tracking systems) but could not be
assigned a pre-remedial hourly goal.
Pg. 124 - Paragraph #2: "Support" hours are essential to
running a program as complex as the FIT program. There are a
myriad of generic tasks which transcend the "primary" activities.
All support activities listed by the draft report (i.e. training,
equipment maintenance program management, general technical
assistance and quality assurance) are necessary and valuable. In
fact, PAs, Sis and HRS work cannot be performed without the
program support activities providing the structure and direction
for the contract.
Note that the goals established are not always possible to
immediately achieve. This was especially true in the first year
of the contract which involved mobilization and expansion. This
growth coupled with attrition necessitated considerable training
and management oversight and involvement. Leasing of office
space, field and office equipment procurement, and supervision and
review of products of new employees is resource intensive. These
factors contributed to the higher than preferred program support
hours .
The Agency agrees with the recommendation to expend most of
FIT's efforts on the basic pre-remedial program. This has been
our goal since contract inception. There have been a variety of
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Appendix B
Page 28 of 3:
20
legitimate reasons it was difficult to achieve this goal in the
formative period of the program/contract. Some of these are as
follows:
- The hoars for training included technical training on
Regional EPA procedures, specialized equipment,
instrumentation, attending EPA-sponsored training within
the Region, conducting training for EPA or State personnel
and attending occasional technical conferences as approved
by the RPOs and Headquarters.
- Federally-mandated occupational safety training includes
initial health and safety training, annual refresher
training, six month respiratory protection training and
Hazard Communication training for substances (sample
preservatives, etc.) used in FIT operations. The NUS
Health, Safety and Training Manual was a required report
of work under the contract and outlines the training
program.
- Technical and operational training, as well as the
documentation thereof, are essential to ensuring the
defensibility of data collected during site work. This
type of training is fundamental to a sound QA program. •
- Equipment maintenance also includes the time required to
purchase authorized capital equipment in accordance with
the FAR requirements referenced in the contract and
audited by EPA.
- The implementation of a work activity tracking program for
TDDs was not specified in the contract. (Refer to
Attachment F - the TDD format in the contract).
Implementation of this system required changes in
reporting and tracking and significant education of both
Regional EPA and FIT personnel alike.
In farther clarification of support hours we offer the
following points which differ from the assumptions in the draft
report:
- Zone Program Management Office (ZPMO) and Headquarters
Support Team (HST) hours are not part of support hours.
- General Technical Assistance (GTA) is not a support
activity within the context of the program.
- Special studies (defined on page 9 of the FIT contract
statement of work) includes assistance to REM
contractors. Special studies are not a support activity.
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Appendix B
Page 29 of 3
21
- Enforcement support is not a support activity. In fact/
the FIT contract statement of work lists both special
studies and enforcement support as basic investigation
activities.
- Quality assurance (QA) is not a support activity.
o In conclusion, the Agency has successfully achieved the
goals it established for the FIT contract since the draft
report was completed. The following.five (5) tables
illustrate this point.
Table 8 - Program Support Activities only (PM, EM and
trai ning)
Table 9 - Program Support Activities and non-TDD hours
Table 10 - Basic Activities (PA, Sis, ESls, HRS ana QA)
Table 11 - Basic Activities and other activities (GTA, ES,
SS)
Table 12 - Total Non-TDD hours since contract inception
Pg. #24- - EPA takes exception to the statement that "EPA in
effect allowed NUS to report 10% of FIT hours under a nebulous
account." As indicated previously, assigning all hours to a TDD
was a new requirement to the FIT contracts and was not required by
the contract itself. The Project officer requested a specific
report dealing with non-TDD hours which is appended (Attachment 14)
for your information.
4. Site Inspection Variations
Tr.e Agency accepts the recommendation of the draft report
notxng t^at several valid points and observations were made
concerning site inspection activities. The following aspects of
the FIT Contracts should be considered in i^rmulating a final
report:
o The FIT contract design specifies that the Regions are
allocated FIT resources (LOE hours) designated as core and
supplemental disciplines. After the core employees are
mr^d. the balance of supplemental personnel on the team
can be made up oi various disciplines. The Regions have
always had the flexibility to nej.p shape the remainder of
the FIT personnel to address specific or unique needs.
Similarly each site inspection work scope and final report
is tailored to the specific site being evaluated. This
variation in team disciplines and in SI work scope is
necessary and desirable. All si work is done in a manner
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Appendix- B
Page 35 of
22
consistent with national program guidance and Regional
needs.
o Guidance issued on site inspections specifies that
specific data must be acquired in order to be able to make
certain decisions. These decisions are basically:
What is the apparent HRS score?
What is the nature of the problem?
Is further action warranted at this site?
In providing guidance we indicated that Sis should average
about 400-500 hours. Because of the vast differences in sites
(e.g. travel time; size; type of waste; location of waste;
geology; amount of existing data; etc.) Sis have averaged between
286 hours and 471 hours in the four Regions during FY 87. The Sis
ranged between 151 hours and 1,813 hours on a Zone basis,
averaging 357 hours.
o Attached (Attachment #5) is a detailed data compilation
for site inspections conducted in Zone 1 during FY 87.
This information is from a Zone wide analysis on PAs, Sis
and ESIs for FY 87 (report dated March 1988). This report
is part of the overall effort of Headquarters to evaluate
and manage FIT operations, as well as plan and budget pre-
remedial operations.
It can be seen from this data that "typical" Sis do not exist
anymore than there are "typical" waste sites. What is important,
is that sound decisions are made in a cost-effective manner. The
statement that non-uniform Sis (p. 40) may result in inaccurately
placing sites on the NPL does not consider or understand the NPL
listing process. HRS scoring packages have specific data
requirements. The completed packages require extensive
documentation and undergo many levels of review. Sites are not
approved until final Headquarters QA is conducted. The Agency has
an extensive rule-making process in proposing sites. This process
has been effective and adjusts for the flexibility needed earlier
in the program.
In conclusion, the draft report recommendations reflect the
same goals the pre-rernedial program has promoted since contract
inception. More importantly; in the eight months since the draft
report was completed Regional compliance with these
recommendations has been achieved. The Agency will continue to
closely monitor and promote the strategy and guidance it has issued,
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REPORT DISTRIBUTION APPENDIX C
Recipient
Office of the Inspector General
Inspector General (A-109)
Headquarters Office
Assistant Administrator for Solid Waste and
Emergency Response (WH-562A)
Assistant Administrator for Administration
and Resources Management (PM-208)
Comptroller (PM-225)
Agency Followup Official (PM-225), Attn:
Director, Resource Management Division
Audit Followup Coordinator (PM-208), Attn:
Program Operations Support Staff
Associate Administrator for Regional
Operations (A-101)
Office of Congressional Liaison (A-103)
Office of Public Affairs (A-107)
Regional Office
Regional Administrators - Regions I,
II, III, and IV
Office of Public Affairs - Regions I,
II, III, and IV
60
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