| UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
12 1993
OFFICE OF
SOLID WASTE AND EMERGENCY RESPONSE
OSWER Directive 9200.9-02
MEMORANDUM
SUBJECT: Procedures To Ensure That CLP Laboratories Are Not Paid
For Non-Compliant Or Unuseable Dai
FROM: Henry L. Longest II, Director
Office of Emergency and
Betty L. Bailey, Director
Office of Acquisition Manageme
TO: Director, Environmental Services Division
Regions I, II, III, IV, VI, VII, VIII, X
Director, Environmental Sciences Division
Region V
Deputy Director, Office of Policy and Management
Region IX
Director, Waste Management Division
Regions I, IV, V, VII
Director, Emergency and Remedial Response Division
Region II
Director, Hazardous Waste Management Division
Regions III, VI, VIII, IX
Director, Hazardous Waste Division
Region X
PURPOSE
The purpose of OSWER Directive 9200.9-02 is to review and
emphasize the procedures for ensuring that Superfund Contract
Laboratory Program (CLP) laboratories are not paid for non-
compliant or unuseable data. To ensure that these procedures are
followed, the Regions are directed to develop relevant standard
operating procedures (SOPs). In addition, the Regions must
notify Headquarters upon the acceptance and rejection of CLP
laboratory-generated data within the Government inspection
period. Another purpose of OSWER Directive 9200.9-02 is to
emphasize proper procedures for the request, use and review of
Special Analytical Services (SAS), so that the Agency is able to
withhold payment for non-compliant or unuseable SAS data.
Printed OH nKfdfa Paper
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BACKGROUND
In March 1991, an Agency-wide Task Force, under the
leadership of the Office of Administration and Resources
Management, began a Federal Managers' Financial Integrity Act
(FMFIA) review of the CLP. The FMFIA review resulted in a
determination that certain material weaknesses existed in the
CLP. The CLP FMFIA Task Force developed recommendations which
were designed to correct these material weaknesses, and included
them in an October 18, 1991 report entitled, "Report-on Contract
Laboratory Program Review."
One of these recommendations requires the Office of
Emergency and Remedial Response (OERR) to "Develop A Process To
Ensure That Laboratories Are Not Paid For Data Which Are In Error
Or Are Otherwise Unuseable." In order to address this
recommendation, several key milestones were developed as follows:
1) Evaluate the effectiveness of the existing system; 2) Obtain
data on non-compliance, defects, reduced value, and non-payment;
3) Issue a directive to the Regions; and 4) Implement changes to
the present system.
Since a process was already in place for assessing damages
on Routine Analytical Services (RAS) and SAS laboratories for
non-compliant or unuseable data, the various mechanisms in the -
existing process were reviewed and data gathered on the extent to
which each mechanism has been exercised. It was found that some
mechanisms for assessing damages were used regularly, but other
available mechanisms have been used rarely or not at all. Brief
descriptions of the mechanisms which were reviewed are shown
below.
On September 21, 1992, a draft of OSWER Directive 9200.9-02
was sent to you for review. We appreciate your comments and have
incorporated them in OSWER Directive 9200.9-02 to the extent f
possible.
contractual Mechanisms
Specific clauses of the RAS contract require that EPA
perform its inspection responsibilities within a stated timeframe
and authorize EPA to take various actions for data which are
determined to be non-compliant with RAS contract requirements.
Under the .Inspection and Acceptance clause, EPA must inspect
and accept (or reject) all deliverables within 30 days of receipt
of compliant data or within 30 days after the end of the 10-day
resolutioVi period which is allowed for correction of defects.
When data which are non-compliant to the extent of being
unuseable are provided to the Agency, the data can be rejected
(in total or by subunits). This results in the non-payment of
the laboratory for the services. As with a determination for
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reduced value (described below), the rejection must be due to
substantial contractual non-compliances or deficiencies. If data
are rejected and the laboratory is not paid for the analyses, the
data must be returned to the laboratory. EPA may not use data
which the Agency has elected not to accept. From 1988 to 1992,
EPA has rejected unuseable data in 80 cases, amounting to about
$100,000. In this same time period, EPA, through its prime
contractor, has rejected unuseable data of SAS laboratories in 63
cases.
Under the Inspection of Services clause, when defects cannot
be corrected by re-analysis, the Government may accept the
deliverables (in their non-compliant state) but negotiate a
reduced value commensurate with the services/products actually
delivered. The reduced value represents a reduction in sample
price paid for data which are non-compliant, but still useable.
Although the reduced value process is authorized by RAS
contracts, the Regions have often determined that the liquidated
damages withheld from the Contract Compliance Screening (CCS)
inspection are sufficient and consider it a poor use of resources
to make a reduced value determination. This is because the
average amount withheld in liquidated damages of the non-
compliant samples is about 50 percent of the sample price. Under
SAS, EPA, through its prime contractor, has often reduced the
value of data deemed to be useable for limited purposes by as
much as 75 percent of the sample price. Since 1988, the SAS
reduced value mechanism has been successfully used in over 120
cases. Because of the specialized nature of SAS with non-uniform
deliverables, a routine CCS procedure cannot be performed.
Under the Subunits clause of the contract, EPA may reject
data on a fractional or subunit basis as stipulated in the
clause. This constitutes the determination of a reduced value as
provided for in the Inspection of Services clause when the
services cannot be corrected by re-analysis. To invoke the v
remedy provided by this clause, the fraction or subunit must be
rejected in total.
Under the Liquidated Damages clause, monies are assessed if
the contractor fails to deliver or perform the services within
the schedule as specified in the contract. The damages are
assessed automatically (no Regional action is required) at the
fixed, agreed to rates set forth in the contract. These damages
reflect the administrative costs that EPA incurs for processing
non-compliant data. From 1989 to 1992, liquidated damages for
non-compliant CLP data have averaged about $2.5 million per year.
From 1986-1988, these assessments, then called negative
considerations, averaged about $2.7 million per year. Under SAS,
the Agency, through its prime contractor, assessed liquidated
damages for lateness from 1987 to 1992 averaging about $1 million
per year.
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Under the Risk of Loss to. Government Samples clause, when
samples are destroyed, not analyzed, or otherwise damaged, or
when data have been totally rejected and returned, actual damages
may be assessed to recover the costs associated with re-sampling
and/or re-analyses. These damages may also include costs
associated with travel, per diem, equipment costs, or other
administrative costs. However, documentation must be provided to
support the actual amount of damages, i.e., original sampling
costs, re-sampling costs, etc. Decisions to pursue these types
of damages must be made promptly and the resulting documentation
provided within a reasonable timeframe (i.e., within 30 days from
notification) in order for the Agency to successfully pursue a
settlement. Since 1980, the Regions have requested that actual
damages be recovered from laboratories in only four cases. Two
cases, involving RAS, resulted in the recovery of $34,000 to
cover costs for re-sampling. A third case involved SAS re-
sampling and re-analysis costs amounting to $22,685. The fourth
case was a result of the Regional request being made over one
year after the expiration of the laboratory's contract;
consequently, the Agency was unable to make an actual damages
assessment against the laboratory.
Under the Warranty of Services clause, EPA's acceptance of
RAS data can be revoked within a 90-day period after the initial
Inspection and Acceptance period has passed. A reduced value can
be determined as described above, or data now may be rejected if
acceptance is revoked by the Contracting Officer for certain
appropriate reasons, which are described below:
• Latent Defects are non-compliances that could not
reasonably have been detected during the initial 30-day
Inspection and Acceptance period.
• Contractor Fraud occurs as a result of intentional
deceit or falsehood.
f
• Gross Mistakes are defined as errors or miscalculations
so large in scope as to amount to fraud.
• Un-met Warranties are warranties provided by the
contractor that were not met, i.e., any further
identified non-compliances.
Criminal statute Mechanisms
Under relevant criminal statutes, criminal fines are
assessed against and civil settlements are negotiated with CLP
laboratories as a result of improper activities. - The
determination of laboratory improprieties in the CLP is a result
of the Agency's comprehensive quality assurance and data
authenticity programs. These programs involve detailed
laboratory, data, and magnetic tap»^*|dits, as well as other
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requirements and activities designed to assure the quality and
authenticity of CLP analytical data. To date, EPA has recovered
over $6 million in fines from and settlements with RAS
laboratories.
As is evident from the above discussion, proper and
sufficient mechanisms do exist to ensure that CLP laboratories
are not paid for non-compliant or unuseable data. However, EPA
has not always utilized these mechanisms. For example, Regions
have rarely attempted to recover actual damages from
laboratories, even though the Agency has rejected data and made
no payment to RAS and SAS laboratories in over 143 cases. In
addition, while the EPA has used civil settlements to collect
damages for laboratory fraud, it could have instead, exercised
its right to revoke the acceptance of data under the Warranty of
Services clause and to recover the monies paid. The Agency has
never chosen to pursue this remedy, even though instances of
laboratory fraud have occurred where this action would v.. ve been
appropriate. It, therefore, remains for OERR, the Contracts
Management Division (CMD) and the Regions to continue giving
their attention to these mechanisms and to utilize them to their
maximum advantage.
It should also be noted that OSWER Directive 9200.9-02 is
linked to CLP FMFIA Recommendation 6b, "Investigate Requiring
Laboratories To Post Performance Bonds As One Means To Increase
Their Accountability.1* A review conducted by CMD indicated that
performance bonds are used primarily in construction contracts
and are not appropriate for analytical service contracts.
However, CMD also stated that the remedies provided in the RAS
contracts and reviewed in OSWER Directive 9200.9-02 already
provide adequate measures to hold CLP laboratories accountable
fbr data defects and contract non-compliance. In particular, the
Warranty of Services clause in RAS .contracts serves the same
purpose as a performance bond in assuring that costs can be
recovered from laboratories for latent defects, contractor fraud,
gross mistakes, and warranties not met. CMD further stated that
it believes the problem in paying for unuseable data is the
Agency's current inability to take timely and effective action in
exercising its existing rights.
OBJECTIVES
Data Review and Data Useability
A major objective of OSWER Directive 9200.9-02 is to make
certain that Superfund CLP laboratories (RAS and SAS) are never
paid full price for non-compliant data and never paid at all for
data determined to be unuseable as a result of contractual non-
compliance. The Analytical Operations Branch (AOB) has
established national procedures for assessing liquidated damages,
reduced 'value, non-payment for rejection of data, and actual
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damages for RAS and SAS data. .To ensure that this objective is
met, OSWER Directive 9200.9-02 requires the Regions to follow
these procedures, develop appropriate SOPs for the data review
and validation process for the purpose of timely decisions on
data useability, and to notify AOB when data from RAS and SAS
laboratories are accepted or rejected. Regions should also
document occurrences where contractually compliant data could not
be used for decision-making. To begin addressing the
recommendation which was cited in the CLP FMFIA review, AOB has
developed draft procedures for revoking acceptance due to latent
defects, contractor fraud, gross mistakes, and warranties not
met. These procedures have been incorporated into the SOP for
data rejection/reduced value for RAS data (see Appendix A).
For RAS data, the decision to accept, reject, or reduce the
value of data must be made within the Inspection and Acceptance
period specified by the contract. The negotiations with the
laboratory cor<*~rning the reduction in sample price considering
the data's reduced value do not have to be concluded within the
30-day period. However, the decision to accept, reject or reduce
the value of data must have been made within the 30-day
Inspection and Acceptance period. Documentation to support the
reduced value must be forthcoming in a reasonable period of time
(i.e., within 30 days from notification). For SAS data, these .
decisions must be made within 45 days of Regional data receipt.
Acceptance or rejection decisions are a direct result of the
technical data review and validation process performed by the
Regions. If the Region does not notify AOB of the need to pursue
one of the available remedies within the prescribed timeframes,
the Agency loses its ability to reduce the value of or reject
non-compliant or unuseable data and recover costs associated with
re-sampling. OSWER Directive 9200.9-02 also requires that a
signed document that formally accepts or rejects data within the
prescribed review period be forwarded to AOB, so that AOB can
jointly work with CMD, as needed, to ensure appropriate contract
action is taken. J"
Special Analytical Services Requests
Another major objective of OSWER Directive 9200.9-02 is to
emphasize proper procedures for the request and use of SAS.
Occasionally,.SAS is not always being used for its intended
purpose. Because of the specialized nature of SAS, untested
methods are sometimes being used, untested quality control
criteria and other requirements are sometimes being requested,
methods designed for one matrix are occasionally inappropriately
applied to other matrices, and SAS is sometimes being used in
place of RAS. In. addition, some SAS requests are not reviewed
adequately by the Regions for technical acceptability. These
practices can result in poorly written SAS requests with
consequent payment for unuseable data, since it may be difficult
to enforce a poorly written contract.
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Also, inappropriate methods are sometimes used on Superfund
projects. Because methods specified in RAS contracts are well
characterized and based on EPA program methods, the use of
modified RAS methods in SAS subcontracts maximizes the ability to
enforce the subcontracts. Consequently, the Regions should use
available RAS methods in SAS requests whenever possible and
appropriate.
OSWER Directive 9200.9-02 also requires that the Regions
develop an SOP to ensure that SAS requests are technically and
contractually appropriate and enforceable. This, in turn,
assures the Agency does not have to pay for data it cannot use
because of inappropriate requirements. As you know, Headquarters
and the Regions have been involved in a two-stage SAS Improvement
Workgroup to improve the SAS Client Request Form and SAS
procurement process. The SAS Improvement Workgroup prepared a
generic SOP for the development of SAS Client Request Forms and
distributed it to the Regions in April 1993. It should be u^ed
by the Regions as a model upon which to base their own SOPs for
SAS Client Request Form development and review.
IMPLEMENTATION
OSWER Directive 9200.9-02 requires the following actions to
be taken:
Training
All users of the CLP shall be reminded of and adhere to the
contractual agreements and procedural remedies for ensuring that
laboratories' are not paid for non-compliant or unuseable RAS and
SAS data. Appendix B contains a more detailed description of
this information.
Please make certain that all users of the CLP on your staff
are familiar with this information. As a result of this
educational process, technical staff should understand their
obligations for ensuring that these procedures are followed. In
addition, site managers should be familiar with the process so
that they can initiate contract action when they determine data
to be unuseable for decision-making.
Data R«vi«w and Data Useability
Each Region shall develop an SOP for the data review process
that ensures the data review process occurs within the Government
acceptance period (30 days for RAS data and 45 days for SAS
data), and includes procedures for applying the warranty
provisions of the RAS contract. This SOP should be developed by
August 31, 1993, and be implemented by September 30, 1993. In
order to prepare the SOP, the Regions are requested to undertake
a comprehensive review of their data inspection process, with a
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focus toward streamlining the process and implementing controls
which will ensure that EPA will be able to take timely action
regarding data which do not conform to the requirements of the
contract. Findings from this review should be incorporated, as
appropriate, into the aforementioned SOP.
To assist you in developing this SOP, we have attached
Appendix B which contains a general discussion of the inspection
process. Appendix A contains useful background information in
the form of SOPs for exercising contractual remedies for
defective data. Also, for a description of the procedures used
to stop payment activities until laboratories correct data
deficiencies, refer to AOB Guidance 002-92, "Resolving Non-
Compliance with the Complete Sample Delivery Group File1* which
was issued in November 1992.
An appropriate Regional data review official or designee is
required to sign a document that formally accepts or rejects RAS
data within the 30-day Inspection and Acceptance period. An
appropriate Regional official or designee is required to sign a
document that formally accepts or rejects SAS data within the 45-
day inspection period. Appendix C contains the forms to be used
for formal acceptance or rejection of RAS and SAS data.
Written documentation describing the reasons why data were
not useable is to be provided to the Quality Assurance
Coordinator in AOB for occurrences where contractually compliant
data cannot be used for decision-making.
Special Analytical Service* Requests
t
Each Region is required to develop an SOP for the
preparation of the SAS Client Request that ensures the Agency's
acceptance criteria and corrective actions are achievable and
clearly defined. This SOP should be developed by August 31,
1993, and implemented by September 30, 1993.
If you have any questions or comments, please have your
staff call Larry Reed, Director, Hazardous Site Evaluation
Division, on (703) 603-8850, Hans Crump, Chief, Analytical
Operations Branch, on (703) 603-8821, or Janet Simmons, Chief,
CLP Acquisition and Management Branch, RTP, on (919) 541-4081.
Attachments
cc: Bruce Diamond, OWPE
. Timothy Fields, OSWER/SRO
William Hooks, OARM/RTP
John Sandy, OC/RMD
Dave Bennett, OERR/HSCD
Michael Bower, CMD/RTP
Debbie Dietrich, OERR/ERD
>
8
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Larry Reed, OERR/HSED
Thomas Sheckells, OERR/OPM
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APPENDIX A
REGIONAL STANDARD OPERATING PROCEDURE
RAS DATA REJECTION/DATA FOR REDUCED VALUE
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REGIONAL STANDARD OPERATING PROCEDURE
FOR
RAS DATA REJECTION/DATA FOR REDUCED VALUE
JANUARY 1990
7/90 REV.
10/90 REV.
7/91 REV.
7/92 REV.
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REGIONAL STANDARD OPERATING PROCEDURE
RAS DATA REJECTION/DATA FOR REDUCED VALUE
Introduction
The National Contract Laboratory Program (CLP) provides
laboratory support for the majority of Superfund programs within
the USEPA. Most EPA Regions have a process for performing a
technical review of the standardized data packages generated by
the CLP laboratories. This review process sometimes reveals that
the data contains problems that seriously compromise the
technical accuracy and is, therefore, judged by the EPA Regions
to be unuseable or to have reduced value. The amount of
unuseable data may range from a few compounds or elements in some
of the samples to an entire Sample Delivery Group (SD6). This
Standard Operating Procedure (SOP) is intended to ensure
consistency in the Regional process of data rejection and reduced
value consideration for Routine Analytical Services (RAS) data.
For additional guidance on procedures to hold payment actions
while laboratories address data deficiencies, refer to AOB
Guidance 002-92, "Resolving Non-Compliance with the Complete
Sample Delivery Group1*, which was issued in November 1992.
The decision not to use data is the sole decision of the
Region. If the Region recommends that the data be rejected, the
resultant being non-payment, the rejection must be based on
contractual requirements. Similarly, reduced value
recommendations must also be based on contractual requirements.
There are two clauses in the CLP contract that allow for
reduced value and data rejection determinations as follows: the
Inspection of Services clause and the Warranty of Services
clause. Each of these clauses is discussed separately below. *.
Actions Under the Inspection of Services Clause
Reduced value and data rejection determinations are made
primarily under the Inspection of Services clause. This clause
allows the Government to reduce the contract price to reflect the
value of the services performed (including non-payment for total
data rejection), and results from a proactive review process that
includes an initial electronic and manual data screen and a
thorough 30-day data inspection and useability evaluation. The
Regional Technical Project Officer's (TPO) recommendation for the
reduced value of the data should attempt to answer the question,
"If this is the quality of the data I ordered, what would I have
paid for it?" The reduced value recommendation must be resolved
by EPA and the laboratory before the laboratory can be paid.
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Data Rejection
Three possible data rejection scenarios are as follows:
1. All data of an SDG are rejected, e.g., all organic or
all inorganic;
2. One or more sample(s) within an SDG are rejected;
3. One or more fractions are rejected, but not the entire
sample(s), e.g., volatiles fraction for sample VWXYZ,
all semi-volatiles, etc.
Totally rejected data should be returned to the Sample
Management Office (SMO) to the attention of the Section Manager,
RAS Invoice Processing Section. Data should be returned only
when a complete SDG, complete sample, or a complete fraction is
rejected. Only that portion of data being rejected sh.---.cl be
returned. If only individual target analyte or element data are
rejected, and the remaining data are used, then the package must
not be returned (scenario 3 above).
NOTE: If only a portion of target analytes (e.g., 4 volatile
target analytes out of 33 volatile analytes) within a fraction :•
are rejected, and the other analyte values within the fraction
are useable, then a reduced value determination nay be
considered.
The returned data must be accompanied by a REJECTION/REDUCED
VALUE COVER SHEET and a signed memo from the TPO justifying the
rejection and recommending that non-payment may be appropriate.
The recommendation must include sufficient documentation and
rationale for the cited deficiencies by referencing the contract
sections. While the Regions may not use data based on many
combinations of contractual non-compliance and non-contractualf
problems, the recommendation to reject the data for non-payment
is made through the Headquarters Administrative Project Officer
(APO) to the Contracting Officer (CO). The TPO will be notified
in writing of the CO's decision regarding payment (NOTE: If the
entire data package sample(s) or an entire fraction is rejected,
and the APO. concurs with the Region's recommendation, the entire
data package- is transmitted to SMO. The data package will not be
transmitted to the CO.)
It is important to remember that if an entire fraction or
SDG is not used due to contractual non-compliance, is rejected,
and- is returned to SMO for non-payment, then the rejected data
will not be used for any purpose by EPA. Data not used due to
non-contractual problems, but for which payment was made, may
still be used by EPA. This data should not be returned to SMO.
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Data cannot be rejected once acceptance has been made,
except in accordance with the Warranty of Services clause.
Reduced Value
In certain instances the Region may believe that the data
should not be totally rejected, but should have reduced value
considerations. Again, this recommendation may be due to a
combination of reasons. For reduced value determinations, the
final payment decision is, generally, a negotiated settlement
between the CO and the laboratory.
Like rejected data, recommendations for reduced value must
be sent from the Region to SMO. The recommendation must be
accompanied by a REJECTION/REDUCED VALUE COVER SHEET and a signed
memorandum from the Regional TPO justifying the recommendation
for reduced value. The TPO calls SMO to request a Sample Value
Report for the required case number, affected SDG, or sample
number. SMO compiles and faxes the Sample Value Report to the
TPO. If the TPO decides to reduce the sample value further than
what has been deducted due to liquidated damages then the
memorandum should clearly state the total percentage amount for
reduction. This percentage is not to be in addition to
liquidated damages, but in lieu of liquidated damages. The
recommendation should also include sufficient documentation and
rationale for the cited deficiencies by referencing the contract
sections. The TPO's recommendation for the reduced value of the
data should attempt to answer the question, "If this is the
quality of the data I ordered, what would I have paid for it?"
SMO will flag the associated samples for non-payment pending
resolution by EPA. SMO will then compile the appropriate reduced
value information and send it to the APO for concurrence. If the
APO concurs with the recommendation, the APO will present the
case to the CO for resolution with the laboratory. If the APO,
does not concur with the recommendation, SMO should be notified
and the pending non-payment status placed on the associated
samples will be removed.
The Regional TPO will be notified if the APO has concurred
with the reduced value recommendation. Reduced value
considerations are made in conjunction with liquidated damages.
If liquidated damages have been determined, any reduced value
recommendation should be based on consideration of the amount of
payment minus such damages, and whether the data are of such
utility as to support payment of this remaining amount. However,
if liquidated damages have been assessed and payment has been
made, the^ Government cannot then pursue a reduced value under the
Inspection of Services clause, but still may pursue reduced value
in accordance with the Warranty of Services clause.
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Actions Under the Warranty of Services Clause
The Warranty of Services clause is intended to provide
protection against problems with non-compliant data found after
acceptance has occurred. Specifically, this clause allows for
reduced value or data rejection determinations to be made and
damages assessed by revoking acceptance of data for any of the
following: latent defects (i.e., defects that could not
reasonably be discovered using normal inspection techniques),
contractor fraud, gross mistakes, or warranties not met by the
contractor*. The major difference between assessing damages
under this clause versus under the Inspection of Services clause
as described above, is that data rejection and reduced value
assessments are allowed under the Warranty of Services clause,
even though acceptance and payment has already been made.
Revocation of acceptance must be accomplished within 90 days
following the original acceptance of the data. Acceptance, rnd
the beginning of the 90-day Warranty of Services period occurs
when the TPO, having considered the results of both the Contract
Compliance Screening (CCS) and the Regional data review, formally
accepts the data for the Agency by signing a data acceptance
form.
The chronological order of -activities relating data
rejection/reduced value under the Inspection of Services and
Warranty of Services clauses follows.
Time Line
It is ipportant to note that a data package's original
receipt date, as logged in by the Sample Management Office (SMO),
starts the 30-day Inspection of Services period. Regional review
and the Contract Compliance Screen (CCS) are begun concurrently
at this time. This period may subsequently be extended if
noncompliances are identified which result in the 10-day '
resolution period for correction of nonconformities being
required. Such defects can be addressed by the CLP laboratory
during this 10-day period. Final acceptance will occur within 30
days after delivery of fully compliant data, or within 30 days
after the end of the 10-day resolution period. Resolution by the
laboratory^ ii^ occur any time during the 10-day period, but no
later thanM3Mt end of the 10-day period, i.e., the Agency's
decision to accept or reject the data should not wait for
corrections from the laboratory beyond the 10-day period. Upon
resolution (i.e., anytime within the 10-day resolution period
when corrections are received by SMO), a CCS report is
immediately issued by SMO to the Region, the contents of which
serve notice to the Region that the date of resolution is the new
start date for the 30-day Inspection of Services period.
Acceptance of the data is required to occur within this 30-day
period under the Inspection and Acceptance clause of the
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contract. Acceptance occurs any time during the 30-day period
when the TPO, after having considered the results of the CCS and
the Regional data review, officially signs a data acceptance
form. At this point, the Warranty of Services clause begins.
Under the Prompt Payment Act the Agency has established a 30-day
period following data acceptance in which payment for the data
must occur; otherwise, interest on the unpaid balance will begin
to accrue. Reduced value, as well as data rejection
recommendations, must be made before payment occurs under the
Inspection and Acceptance clause, but may be made after data
acceptance and payment of the laboratory under the Warranty of
Services clause. SMO must be notified of reduced value/data
rejection recommendations so that the samples can be flagged for
non-payment pending resolution of data deficiencies.
The following time line highlights events associated with
rejection or reduced value recommendations:
Arrival of complete and
compliant data at EPA
Regional review of data
Region initiates
appropriate action
(acceptance, reduced
value, rejection) under
the Inspection of
Services Clause
Laboratory is paid
Region recommends
revocation of acceptance,
and appropriate action
(reduced .value, reject)
under the Warranty of
Services Clause
Day 1 (the original date of
arrival is considered Day 1,
unless subsequent CCS findings
indicate otherwise)
Within 30 days of arrival at
EPA
Within 30 days after initial
delivery of compliant data, or
within 30 days after the end
of the 10-day resolution
period
Within 30 days after
acceptance
Within 90 days of Acceptance ...
(i.e., from date that TPO
signs formal data acceptance
form)
An actual damages situation would occur when the laboratory
does not deliver the anticipated data because it did not analyze
the samples. Reasons for this may include that the laboratory
has. lost the sample, damaged or destroyed the sample, or missed
holding times, such that the sample is no longer viable. In such
cases, when the Government does not receive the data, it may
pursue actual damages under the authority of the Risk of Loss to
Government Samples.
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The Government will, in effect, make a claim against the
contractor for actual damages. Such damages may include re-
sampling costs and/or original sampling costs if re-sampling
cannot occur and the original costs can be documented, such as
SMO costs, etc. The Region must make the request for damages in
writing to the APO and must include copies of the documentation
supporting the costs claimed. The APO will forward the request
and documentation to the CO who will then negotiate with the CLP
laboratory.
Role of Headquarters
As stated previously, recommendations for rejection of data
(for non-payment) and for reduced value considerations are sent
from the Region through the APO to the CO. The Region should
send the required material to the Section Leader, Invoice
Processing Section of SMO. A Rejected Data Summary Form will be
generated and SMO will send all the supporting information to the
APO. The APO will indicate the reasons for the rejection or
reduced value on the supplied forms and return the package to
SMO. For rejection of data, SMO will process the information
supplied by the APO and forward the request to the APO for
approval and signature. For reduced value considerations, the
APO will prepare a memorandum to the CO recommending the reduced
value. The TPO will be provided with copies of all
correspondence.
As above, requests for actual damages under the Risk of Loss
clause should go through the APO for signature approval before
being sent to the CO.
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APPENDIX B
INFORMATION FOR PREPARING REGION-SPECIFIC STANDARD OPERATING
PROCEDURES FOR CONDUCTING TIMELY DATA REVIEWS
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Information for Preparing Region-Specific Standard Operating
Procedures for Conducting Timely Data Reviews
Provided below is detailed information on the remedies for
non-compliant data, including when and where they occur in the
process. The process by which data are reviewed and assessed for
contract compliance and useability is discussed under the two
major periods in which it occurs: the Inspection and Acceptance
Period and the Warranty Period (also see Figure 1).
Inspection and Acceptance Period
During the Inspection and Acceptance Period two review
processes occur simultaneously. The Contract Compliance
Screening (CCS) is conducted by the Contract Laboratory Program's
(CLP) Sample Management Office. (SMO) and generally involves a
checklist review of the data deliverables, usually taking about
13 days to complete. The Regional Data Review is an indepth
review of the data for compliance and useability. Each process
is discussed separately below.
Contract Compliance Screening
CCS is a review process for both the diskette and hardcopy
data deliverables from the CLP laboratory. CCS is designed to
assess conformity of the data deliverables with a specified set
of contract requirements, the results of which will help
determine the amount of payment that the Agency will make to the
laboratory for the analysis, and determines the date on which the
Data Review and Validation process is considered to have
officially begun.
Review of Diskette:
The CCS initial assessment begins when CLP data are
initially delivered to the Agency, and is conducted by SMO under
the direction of the Analytical Operations Branch (AOB). The
first opportunity to remedy non-compliant or unuseable data
occurs during this phase of the CCS process. The Agency expects
CLP laboratories to produce compliant data upon initial delivery.
In the CCS initial assessment, the electronic data package,
sent as a computer diskette deliverable by the CLP laboratory, is
inspected for timeliness, completeness and correctness of a
subset of Statement of Work (SOW)-specified variables and proper
data/electronic format. A diskette delivered in the required
timeframe is nevertheless considered not delivered if it does not
meet this initial assessment. The CCS initial assessment also
ensures that the electronic data can be successfully entered into
the CLP Analytical Results Database.
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After the initial assessment is completed, the computer
diskette is subjected to a full assessment where the data are
reviewed more thoroughly. In the full assessment, adherence of
the electronic data to most contract requirements is examined.
Review of Hardcopy:
The hardcopy deliverable is inspected for four major
contract-specified components as follows:
• A certification statement and narrative cover page,
signed by the Laboratory Manager and dated.
• The presence of all applicable raw data, including all
header information.
• The presence of all applicable quantitation reports, or
hardcopy printouts, including all header information.
• The presence of Traffic Reports/Chain-of-Custody
Records.
.Results:
As stated above, when a data diskette is delivered within
the allowable timeframe, but contains certain contractual non-
compliances, it is considered to be late. Late delivery is
assessed liquidated damages on a per sample per day basis. CLP
laboratories have a period of 10 days in which to correct defects
in the data identified by CCS. If the laboratory corrects the
defects within this 10-day reconciliation period, an additional
one-time liquidated damage assessment is made. If it does not
correct the defects and the Government still accepts the data, a
larger one-time liquidated damage assessment per non-compliant
sample is assessed.
Liquidated damages are applicable in the same manner for
late, or for timely but non-compliant hardcopy data deliverables.
However, it must be noted that for a given set of data,
liquidated damages are assessed on the total deliverable which
includes the diskette and the hardcopy data package. Liquidated
damages do not apply separately to the diskette and hardcopy data
package.
As a result of the CCS process, a CCS report is generated
that explains any contractual defects identified within the data
package. To assist Regions in performing timely .data reviews,
AOB has directed SMO to provide a copy of the CCS report to the
Region. The Region should ensure that the CCS report is used
during the data review process. As you may know, CLP Federal
Managers Financial Integrity Act,.Recommendation #4 is in the
process of being implemented to (JattejiBe whether CCS reports can
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be tailored to meet individual,Regional needs.
Regional Data Review and Validation of Results
The hardcopy data package is delivered to the Regional
client simultaniously with the delivery of the electronic and
hardcopy data package to SMO. The date that SMO logs in the data
deliverable is considered to be the official Agency receipt date,
as well as the start date for the concurrent CCS and Regional
Data Review and Validation Period. Unless the electronic and
limited manual review of the CCS detects data flaws or contract
non-compliance, the Regional client has 30 days from the original
date of receipt to perform a technical review and evaluate the
Sample Delivery Group for acceptance. If defects are found by
the CCS, the 30-day period for acceptance begins immediately upon
correction of the defects if within the 10-day period allowed, or
at the end of the 10-day period if corrected data have not been
submitted. Data review is based on the National Functi-.uil
Guidelines for Data Review, which are issued by AOB. If contract
compliance problems arising from this review cause the data in
whole, or in part, to be unuseable, the Region may reject the
data, send the data to SNO for return to the CLP laboratory, and
request non-payment for that unused portion of the data. The
Region may also determine that the data are useable, but due to
contractual non-compliances, they are not as valuable or useful
as they would have otherwise been. In this instance, the Region
may request a reduced value payment for the non-compliant portion
of the data deliverable. Reduced value for non-compliant, but
useable, data and non-payment for rejected data are also
authorized by the SAS subcontracts, and the Government acceptance
period for these data is 45 days after delivery to the Agency.
\ -
It is important to emphasize that data compliance must be
judged entirely on the basis of variance from contract
requirements. For example, if a Region could not use data
because it sampled in the wrong location, the Agency must pay for
these data if the laboratory followed the contract. In this
case, data will be generated which the Region may judge to be
unuseable, but not because of contractual non-compliance, and
payment will, therefore, have to be made.
It ia the Region's responsibility to review CLP data within
the 30-day Inspection and Acceptance period. Unless specified
otherwise, all data are considered to be accepted at the end of
the inspection period, and full payment (minus any liquidated
damages) will be made to the laboratory. These strict time
limitations are placed on the data review process, by the
Inspection and Acceptance Clause of the contract which states,
"Final acceptance will occur within 30 days after initial
delivery of fully compliant data, or within 30 days after the end
of the 10-day period the Government has allowed the contractor
for correction of non-conformities." This process will ensure
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that laboratories are not paid.before the Region can make its
recommendation for data rejection or reduced value to AOB. It
has been determined for RAS that supporting documentation should
be submitted within 30 days following the recommendation. For
SAS, the Region must submit documentation supporting data
rejection or reduced value to the SNO within 45 days of data
receipt. The documentation required is described in "Regional
Standard Operating Procedure for RAS Data Rejection/Data for
Reduced Value" and "Guidance to Clients for SAS Data
Reject ion/.Reduced Value Requests."
While it is understood that it may take the Regions longer
than the 30-day Inspection and Acceptance period to complete
their data reviews, it must also be understood that adherence to
the time constraints placed on this review period is critical if
the Agency is to exercise its authority to assess damages for
non-compliant or unuseable data. Timely notification to AOB by
the Regions re-u-ding data defects and other non-compliance
problems is critical to the successful utilization of contractual
mechanisms for assessing damages to CLP laboratories. Further,
comparable notification for the acceptance of data by the Regions
is an important formality that has not heretofore existed.
Therefore, a Regional Data Acceptance Form has been developed
(see Appendix C) to complement the existing Data Rejection Form*
This form requires the signature of the Regional CLP Technical :
Project Officer (TPO) or designee, and must be submitted to SNO
within the 30-day Inspection and Acceptance period. The form
must also be signed by an appropriate Regional official for the
acceptance of SAS data. This procedure adds increased emphasis
on the acceptance of data within the contractually alloted review
period by making it a deliberate step in the process, rather than
a default action. It should also be noted that the Regional Data
Rejection/Reduced Value Form (see Appendix C) has been modified
to make it applicable to SAS, as well as RAS data.
Warranty Period
A Warranty Period of 90 days, beginning at the point of
formal acceptance (i.e., when TPO, or designee signs formal data
acceptance form), is authorized by the CLP contracts. During
this Warranty Period, acceptance may be revoked and the
Contracting Officer may negotiate cost recovery with the CLP
laboratory if the deliverable is found to contain: 1) Latent
defects (non-compliances that could not reasonably have been
detected during the initial 30-day Inspection and Acceptance
period); 2) Contractor fraud (intentional deceit or falsehood);
3) Gross mistakes (errors or miscalculations so large in scope as
to amount to fraud); or 4) Un-met warranties (warranties provided
by the contractor that were not met).
Provisions for ensuring that the Regions take advantage of
the warranty clause when needed should be included in the SOP
4
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described in the accompanying directive for the data review
process. Timely notification regarding latent defects or other
non-compliance issues found during the Warranty Period is
critical.
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•.j '.m
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Figure 1
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A21 001 74
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APPENDIX C
DATA ACCEPTANCE AND REJECTION FORMS
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REGIONAL DATA ACCEPTANCE FORM
This form is used to identify Regional responses to technical data reviews where data appear
acceptable for payment purposes (ie. data that is not rejected or recommended for reduced value)
according to the Region's inspection process. Applicable liquidated damages as outlined in the
laboratory's contract are applied as appropriate.
Response Date USEPA Region.
(Check one please) RAS SAS
Case/SAS Number SDG Number
Appropriate Regional Official (or Designee)
Signature
Data Reviewers)
Laboratory Name
Affected Sample Numbers-
Data Accepted for. (check appropriate sections)
All Organic '• ' AH Inorganics
Volatile* Metals
Semi- Cyanide
Volatile*
Pesticides .,
Other (Specify)
This form must be sent to Sample Management Office for all accepted CLP RAS data (IPS
Manager) and SAS data (SAS Technical Operations Section Manager) in the following timcfra
1) within 30 days of arrival of complete and compliant or reconciled data at SMO (for RAS <
or
2) within 45 days of arrival at the Region (for SAS data).
WP\21 \OOI\055
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REGIONAL DATA REJECTION/REDUCED VALUE FORJ^ fv,,ti ..
~.»*rrj>*?»i~,.:
Response Date,
USEPA Region.
TJii nr• -.
(Check one please) RAS.
: "' '• :'• * ,'•
Casc/SAS Number
SAS_
SDG Number
Appropriate RjtftoMl Official (or Desjgnee).
Data. Reviewers)
Affected SDG's and Sample Numbers.
Laboratory Name
Affected Sample Numbers,
Data Rejected for: (check appropriate sections)
All Organic - ^... All Inorganics
Volassles _..''. Metals
Semi-Volatile* _••: Cyanide
Pesticides
Other (Specify) • ; - "^••-•^-
'tta.iSI
"eai.^-e
THIS IS A COVER SHEET ONLY. It is vast to identify die Regiooal KapoQae to the.tectak*! data review where
"'""
o» considered to h«ve reduced value.
.
"'"''"'"'
-t . ,« ,-.•-.
1. If dUft MO rejected th» .cct'ej: Aeet must be aiot to SMO, IPS Secfioo Manager (RAS) or S AS Tcchnic*!
a. A ilined
from o Regiooajl ,<^ffice deembing the rejection of the data and all acconqianying
^ '^*
b. AH rejected data.
2. Ifttedtetawe
DATATOSMO.
a. SMO will check
CCS (RAS only).
b. For SAS, Regional Łtffici»lmuft
tuaict be accogg^e^Jb^
from
for reduced value consideration aaaiot$ the results from
-v • .WH^ ;or x*^>W &x' .;-j&&&j-sigi.. ^t
tioo (percentage or dollar amount)
^.v-«
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