UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON. DC. 20460

                   uol
                                    OERR Directive Mo. 9242.6-04
MEMORANDUM
SUBJECT:  OERR Organizational Conflict of Interest Review and
          Approval Program  (Super fund Management Review:
          Recommendation No. 46. C)
FROM:     Henry L. Longest II, Director '
          Office of Emergency and Remedi,

To:       OERR Division Directors
tponse
Purpose;

     To transmit new procedures regarding the avoidance of
organizational conflicts of interest for work assignments under
the Superfund Headquarters support contracts.

Background.;

     Superfund has been criticized for the appearance of actual or
perceived conflicts of interest regarding contractors providing
both response action activities and Headquarters support
activities.  The Federal Acquisition Regulations define
organizational conflicts of interest (OCI) as existing "...when
the nature of the work to be performed under a proposed Government
contract may, without some restriction on future activities,
(a) result in an unfair competitive advantage to the contractor or
(b) impair the contractor's objectivity in performing the contract
work.11  The Superfund Management Review contains several
recommendations concerning the avoidance of real or perceived
conflicts of interest relating to our Headquarters support
contracts.  These recommendations include 1) precluding Response
Action Contractors (RACS) from competing on future Headquarters
support work, 2) voluntary disclosure of potential conflicts of
interest by contractors and 3) the exercise of appropriate care by
the Superfund program in issuing work assignments.  OERR has been
tasked with implementation of the third recommendation.

-------
                              - 2 -
      Three  of  the  four management support contractors in OERR are
 currently RACS (ICF, CH2vM Hill and Roy F. Weston).  Internal and
 external  critics have expressed three major concerns related to
 potential conflicts of interest situations created in our use of
 these contractors:

      o Concern that information provided by these contractors as
        they assist us in compiling policy and guidance documents
        may be biased toward more work for the contractor, rather
        than streamlining the program;

      o Concern that the use of these contractors in support of
        the Agency's deliberative process may actually influence
        and help determine policy decisions;

      o Contractor involvement with PRP work while simultaneously
        working with the agency may lead to the contractor's
        either deliberately or inadvertently influencing agency
        policy, as well as allowing the contractor to provide
        advice to PRPs on Agency strategy.

      Internal  Agency review of current work assignments suggests
 specific  instances cited by critics are often matters of
 perception  rather than reality, where sloppily written work
 assignments suggest that contractors play a heavier role in
 supporting  agency decisions than in fact occurs.  In addition,
 sensitivity to concerns of OCI may lead us to make different
 decisions as to which contractors receive what kind of work
 assignments, and may, as resources allow, ask us  to make
 different decisions regarding which work is conducted in-house or
 by contractors.

 Objective:

     To eliminate actual organizational conflicts of interest  in
 work assignments under Superfund Headquarters support contracts
 and to take appropriate steps to mitigate the perception of
 conflict wherever possible.

 Implementation t
                   /
     Given  tAt perception that Headquarters support work may
 provide icr, CB2M Hill or Weston with an unfair competitive
 advantage and/or affect the objectivity of their  work, we need to
 improve our sensitivity to the conflict of interest issue and
establish procedures to ensure adequate review of all new work
assignments.

-------
     As of November 1, 1989, all new work assignments will require
signature by Division Directors.  In addition, the attached OCI
Checklist will be required as part of each new work assignment
package.  This Checklist is designed to ask OERR managers to
review work assignments and determine whether or not a real or
perceived conflict of interest has been identified, and to take
such steps as may be appropriate to mitigate this potential OCI.
Mitigative steps are to be documented for the work assignment
record.

     Admittedly, the determination of a conflict of interest or
the potential for conflict is a very subjective area.  There are
no set rules and regulations that address OCI, other than the FAR
definition.  Therefore, to assist in the review and preparation of
the Checklist, attached are guidelines and examples that attempt
to further define OCI.

     These procedures will apply to all new work assignments and
amendments to those work assignments that add or change the scope
of work issued to any of the Headquarters support contracts that
are also RACS.  Amendments to work assignments issued prior to
the effective date are not covered by this directive.  However,
you are expected to assure to the best of your ability that no
conflicts exist regardless of when the assignments are issued.
We will be revising the work assignment forms to accommodate these
new requirements.

     I would also like to point out that we have met with ICF and
CH2M Hill regarding steps that can be taken on their part to
mitigate conflict of interest problems.  We will be meeting with
weston in the near future.  With regard to ICF, work under the
Headquarters support contract will not be performed by their
engineering staff (ICF Technology, Inc.) who support the response
action contracts.  If they require technical review of documents,
they are to notify the EPA work assignment manager to receive
approval on who may perform this review (EPA staff, another
contractor, or another outside source).  Headquarters support work
done by CH2M Hill will be limited to technical analysis and
associated reports only.  They will no longer prepare draft
guidance documents, .draft EPA reports or other follow-on work
resulting from the technical analysis.  Work assignment managers
should eitJier perform this work in-house or direct it to another
support contractor.

-------
                              - 4 -
     These procedures should be considered to be pilot procedures
We will work with a team of Division managers and work: assignment
managers to evaluate the process and develop improvements.  Any
questions regarding this directive or the attached procedures
should be directed to Debbie Dietrich or John Comstock of the
CORAS Staff at 475-9349.

Attachments

cc:  Jon Cannon
     Thad Juszczak
     Bruce Diamond
     Dave O'Connor
     Jeff Byron
     Janet Grubbs
     Nancy Livingstone
     Fran Hanavan

-------
Contract Number	
Work Assignment Number
                                                     ATTACHMENT
                          OCI   CHECKLIST

 (See attached instruction sheet for example responses  to  these
questions,)
l.  Contractor assigned ( v  check)
2. What is subject area?.

3. what is type of work?.
                                     ICF
                                     Roy F.  Weston
                                     CH2M Hill
                                                       YES  NO
   Will the work to be performed under this work
   assignment in any way impact, influence or
   impair the contractor's objectivity in performing
   the work under their response action contracts?
   If yes, provide an explanation.
5. Will the work being performed under the
   contractor's response action contracts in
   any way impact, influence or impair the
   contractor's objectivity in performing
   the work under this work assignment?
   if yes, provide an explanation.
6. Does the contractor plan to subcontract all
   or part of the work required?  if yes, who
   is the subcontractor and will they have any
   real or perceived conflicts?

-------
                              - 2 -
                                                       YES   NO
 7.
will the work to be performed  under this work
assignment involve Confidential Business
information?  if yes,  explain  safeguards
to avoid actual or perceived conflicts of
interest.
   Are you aware of any other factors which could
   place the contractor in a position in which its
   judgment could be biased in relation to its
   work under this work assignment?  If yes, provide
   an explanation.
9. Are any of the above questions answered in the
   affirmative or, are there other issues that
   create perception issues if the work
   assignment is issued?  If yes, some of the
   options to mitigate the conflict or
   perception would be to:
   (a)  Issue the work assignment to another
        contractor where the conflict can be
        avoided or lessened.

   (b)  Bring the work in-house,  if resource
        shortages prohibit accomplishment with
        la-House FTl, possibly other in-house
        •fforts would lend themselves better to
        contracting out and create less of a
        conflict issue.

   (c)  Consider eliminating those portions of the
        work assignment that create the conflict.

   (d)  Perform a technical review by EPA staff to
        ensure that potential biases in work
        products are identified and eliminated.

-------
BASED UPON THg RESPONSES;

   I/We feel that the issuance of this work assignment  (  )  will,
   (  )  will not create a real conflict of interest.

   I/We feel that the issuance of this work assignment  (  )  will,
   (  )  will not cause a perception of a conflict  of  interest.

   If the issuance will cause a perception problem,  the
   following steps have been taken to mitigate that  perception:
   In consideration of the above findings, I recos«end approval:
        Work Assignment Manager
Date
   I have reviewed the above findings and hereby determine that,
   in my opinion, all reasonable steps have been taken to
   •itigate any perceptions of conflict of interest and that the
   need for the work reflected in the work assignment is greater
   than any regaining perception issues:
             Division Director
 Date

-------
                         PCI  CHECKLIST
                           INSTRUCTIONS
 1.   Self explanatory. Check the appropriate contractor.

 2.   Examples  of  "Subject Area" would be:

        o Emergency; Removal

        o Pre-remedial Site Studies/Investigations

        o NPL  Listing

        o Remedial Investigation/Feasibility Study

        o Clean-up standards

        o Technical Specialization (eg., ground water, air, etc.)

        o Technology

        o PRP  Searches

        o  Other Enforcement

        o  Remedial Design

        o  Construction

        o  Resource Planning

        o  Other Appropriate Designation
3.  Examples of "Type of Work1* would be
                                  o Data collection
                                  o Report compilation
                                  o Alternatives analysis
                                  o impact analysis
                                  o Case study development
                                  o Issue paper development
    o Data analysis
    o Option analysis
    o Option development
    o Model development
    o Record consolidation
    o Create data base
    o Any otner appropriate
       designation

4. Some examples would be:

   Example 1.  Analysis of alternatives to streamline analytical
               data reviews (to be performed by an ESAT
               contractor).

-------
   Example 2.
           Create a data base of the ratio of travel dollars
           to labor hours on Superfund's response contracts
           (to be performed by a TAT contractor).
5. Some examples would be:
   Example l
   Example 2.
6.
           Development of an issue paper to determine
           alternatives to minimize construction claims in the
           RO/RA phase of clean up (to be performed by an
           ARCS contractor).

           Identify weaknesses in conducting public meetings
           regarding clean up strategies (to be performed by a
           response action contractor that supports public
           meetings).
Self explanatory. Be aware of one support contractor
subcontracting to another support contractor.  There may
be a more efficient method to obtain the services.
8,

9-
"Confidential Business Information"  means any
information which pertains to the interests of any
business, which was developed or acquired by that
business, and (except where the context otherwise
requires) which is possessed by the EPA in recorded form
(CFR 40 Part 2).  It is our responsibility to protect
such information from disclosure.  Therefore, safeguards
must be in place to avoid such disclosure.  Confidential
Business Information, such as indirect cost rates,
released to a competing firm could create a conflict of
interest.

Self explanatory.

Self explanatory.

-------
  ?a*e No.
  10/27/89
                    HEADQUARTERS  SUPPORT CONTRACTORS WHO ALSO
                         HAVE  RESPONSE ACTION CONTRACTS
  :C'N'7?ACT NO.
                    DESCRIPTION
                                         AWARDED  EXPIRED
* *
•5 3
6 -.
lf\ *<

- „' 1
-#j
- W9
63-WS
65
68
63
-WS
-W8
-WS
::M H:L:
-"251
- Ci 0 4 9
-0031
-0112
-0095
-0040
-0090

?E,f
AFCS
ARCS
ARCS
TECH
ARCS
ARCS

IV.
REG
REG
REG

RE
4
9
6
sapp
REG
REG
5
3

G 5-10

. 10 f



CH2M )
-8 (HILL)
(HILL
(HILL
(HILL
TECH )
)
)

11/19/35
05/25/39
03/24/89
08/13/88
07/27/88
02/01/88
06/03/88

05
05
03

/ 3 0
/24
/31
10/01
06
/30
01/31
06

/9u

/39
/98
/91
/98
/02/99
**  ICF TECHNOLOGY. INC.
 68-01-7456   ESAT ZONE II, Rege 4  ,6-10 & HQ
 6-S-W8-0124   ARCS REG 2 (ICF)
 68-W9-0059   ARCS REG 9. 10
«*  ICF.  INC.
 68-01-7389
 68-01-7481
        POLICY/ANALYTICAL SU PPORT (ICF)
        ANAL.  TECH  &  MGMT SVCS FOR OSWEB
**  ROY F.  WESTCN. INC.
 68-W9-
 68-01-
 68-01-
 68-03-
 68-03-
 58-W9-
 63-W9-
 63-W9-
 68-W9-
 68-W8-
•0015
•7367
7443
3450
3482
0018
0022
0046
0057
0089
                     2,3.45
ARCS REGS 6-8 (RFW)
TAT ZONE I, REG  1-5
ESAT ZONE I. Rece  1
OHMSETT OPERATIONS
RESPONSE ANALYTIC & ENGINEERING  (REAC)
ARCS REG 1
           (WESTON)
          , 10 (WEST ON)
ARCS REG 2
ARCS REG 9
ARCS REG 4
ARCS REG 5
                                                 09/30/87 09/29/91
                                                 09/30/88 09/29/98
                                                 06/28/89 06/30/99
           fWESTON)
                                          04/22/87
                                          10/01/87
02/10/89
12/16/86
07/27/87
06/10/87
09/02/87
02/22/89
03/10/89
05/01/89
06/16/89
06/01/88
                                                  04/14/91
                                                  03/31/91
12/31/55
09/30/30
07/26/91
09/30/91
08/31/92
02/22/99
03/09/99
04/30/99
06/15/99
05/31/96

-------