United States
Environmental Protection
Agency
Office of
Solid Waste and
Emergency Response
a EPA
DIRECTIVE NUMBER
9201.0-01
TITLE:
Implementation of the Superfund Alternative Remedial
Contracting Strategy (ARCS); Report of the Administrator's
Task Force; Implementation Plan
APPROVAL DATE: 13/00/01 •
EFFECTIVE DATE: la/oo/oi
ORIGINATING OFFICE:
0 FINAL
D DRAFT
LEVEL OF DRAFT
Q A — Signed by AA or DAA
Q B — Signed by Office Director
n C — Review & Comment
REFERENCE (other documents):
OSWER OSWER OSWER
DIRECTIVE DIRECTIVE
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Q CPA Washington. OC 20460
<*trR OSWER Directive Initiation Rec
2. Originator Information
Name of Contact Parson i Mail Code jOffice
Superfund Document Coordinator ! OS-245 ' OERR
1 urective N'-.Tser
jUeSI 9201 0-01
Telephone Code
(202) 260-9760
3. Title
Implementation of the Superfund Alternative Remedial Contracting Strategy (ARCS); Report of the Administrator's
Task Force; Implementation Plan
4. Summary of Directive (include bnet statement of purpose)
Contains results of Task Force analysis of the criticism the EPA received about the management of the Superfund
contracting program. EPA was accused of allowing Superfund contractors to spend an inordinate amount of public
funds on activities other than the direct clean-up of contaminated sites. This document provides a summary of
recommendations, s»rategies and proposed milestones to implement
5. Keywords
ARCS
5a. Ooes This Directive Supersede Previous Directrve(s)? I 1 1 I
LJN° |_JYe9
0. Ooes it Supplement Previous Oirectrve(s)? | 1
L INO | 1 Y«
7 Draft Level
A - Signed by AA'OAA B - Signed by Office Director C - Fo
^ ^ ^ •_ .__^_^«BM.
What directive (number, title)
What directive (number, title)
r Review & Comment D - in Development
8.
Document
to
be
distributed
to
States by Headquarters? F~l YM
No
This Request M««u OSWER Directive* System Format Standards.
9. Signature of Lead Office Directives Coordinator
Betty Van Epps
10. Name and Title of Approving Official
Kenneth W. Ayers, Chief / Design and Construction Management Branch
Date
Date
12/09/91
EPA Form 1315-17 (Rev. 5-»7) Previous editions are obsolete.
OSWER Of'VER OSWER O
YE DIRECTIVE DIRECTIVE DIRECTIVE
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OSWER Directive 19201.0-01
IMPLEMENTATION OF THE SUPERFUND ALTERNATIVE
REMEDIAL CONTRTACTING STRATEGY (ARCS)
Report of the Administrator's Task Force
IMPLEMENTATION PLAN
November 27, 1991
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IMPLEMENTATION OP THE SUPERFUND ALTERNATIVE REMEDIAL
CONTRACTING STRATEGY (ARCS)
Report of the Administrator's Task Force
IMPLEMENTATION PLAN
Table of Contents
A. BACKGROUND 1
B. GENERAL CONCLUSIONS 2
C. SUMMARY OF RECOMMENDATIONS
I. Program Management 3
II. ARCS Capacity and Utilization 3
III. ARCS Contract Controls 4
IV. ARCS Financial Audits and Reviews 4
V. .Award Fee Process 4
VI. EPA Management Processes and Organizations 4
D. STRATEGY 5
E. RECOMMENDATIONS AND PROPOSED MILESTONES TO IMPLEMENT
I. Program Management 5
II. ARCS Capacity and Utilization 9
III. ARCS Contract Controls 13
s IV. ARCS Financial Audits and Reviews 17
V. Award Fee Process 19
VI. EPA Management Processes and Organizations 22
APPENDIX
List of Abbreviations
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IMPLEMENTATION OP THE SUPERFUND ALTERNATIVE
REMEDIAL CONTRACTING STRATEGY (ARCS)
IMPLEMENTATION PLAN FOR THE ARCS TASK FORCE REPORT
A. BACKGROUND
During the summer of 1991 thre Environmental Protection
Agency (EPA) was the subject of criticism for its management of
the Superfund contracting program. EPA was accused of allowing
Superfund contractors to spend an inordinate amount of public
funds on activities other than the direct clean-up of
contaminated sites.
Three particular charges were leveled against EPA:
Contractors operating under EPA's Alternative Remedial
Contracting Strategy (ARCS) were charging EPA for
inappropriate and unnecessary administrative items like
business cards, parking fees, and potted plants.
.EPA paid contractors to open and operate offices before
the contractors were assigned any clean-up work.
EPA's procedures for ensuring effective contract
administration and management had not been fully
implemented, thus allowing public funds to be wasted.
In response to these allegations, EPA Administrator William
K. Reilly established a Task Force comprised of senior EPA
managers and analysts to address the following questions:
Are the allegations of waste by ARCS contractors fair
and accurate?
Has EPA taken the necessary steps to assure that any
problems are corrected? Is EPA's oversight of ARCS
contractors adequate? If not, how could such oversight
be improved?
Given that responsible parties are cleaning up many
more Superfund sites than was anticipated when ARCS was
created, is ARCS still an appropriate approach to
Superfund contracting? Should the number, size, or
length of ARCS contracts be adjusted?
The Task Force reviewed ARCS operations in all ten regional
offices, as well as at EPA headquarters. Besides interviewing
EPA employees and contractor representatives, the Task Force
reviewed internal EPA contract management practices and a variety
of reports related to Superfund contracting, including reports cy
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ARCS Implementation Plan
November 27, 1991
the General Accounting Office (GAO) and EPA's Office of the
Inspector General (OIG).
On October 2, 1991, Administrator Reilly announced key
reforms to revitalize the Superfund program, including the
appointment of a National Superfund Director to consolidate
management accountability for the program. In addition, he
announced the results of the ARCS Task Force and the Superfund
30-Day Task Force reports. Shortly thereafter a steering
committee was established to develop the implementation plan for
the ARCS Task Force report's recommendations and divide
responsibility for implementing the recommendations and develop
activity milestones. The steering committee was composed of
Office of Solid Waste and Emergency Response (OSWER), Office of
Administration and Resources Management (OARM), and regional
representatives.
This plan includes a summary of the general conclusions and
recommendations reached by the Task Force, a description of the
role and strategy of the steering committee overseeing
implementation activities and a detailed listing of the specific
Task Force recommendations and corresponding milestones.
B. GENERAL CONCLUSIONS
The recommendations presented in the report reflect the
collective thinking of the Task Force about the ARCS approach to
Superfund site clean-ups. Although it is clear that a number of
contract management improvements are required, the Task Force
concluded that the ARCS design is basically sound and should be
continued.
The Task Force confirmed that EPA has been charged by ARCS
contractors for business cards, parking fees, and office plants,
among other charges identified as inappropriate or excessive.
These unnecessary charges, however, have been relatively small in
volume and frequency and are not representative of costs
generally billed under ARCS. The Task Force also recognized that
they could not determine whether these charges are inconsistent
with or unallowable under government contract law, federal
acquisition regulations, or the ARCS contracts. Reasonableness
and allowability can only be answered after completion of
comprehensive audits. Several recommendations were made in the
report to assist EPA region's in eliminating charges which, even
if legal, are not essential to implement and support clean-up
actions at Superfund sites.
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ARCS Implementation Plan
November 27, 1991
The Task Force also confirmed that during the early stages
of the new ARCS contracts, program management costs were high
relative to the charges for actual site clean-up work. This was
due in part to a conscious strategy of early capital investment
to avoid subsequent delays in starting site work. As the amount
of clean-up work performed by ARCS contractors increased, the
proportion of program management«costs to clean-up costs
decreased. To help reinforce this trend the report included a
series of recommendations to assist EPA regions in further
monitoring and controlling program management costs.
Finally, the Task Force concluded that EPA is not conducting
effective contract administration and oversight. The report
documented weaknesses in the way EPA assigned work to
contractors, monitored contractor performance and costs, prepared
independent cost estimates, and conducted audits. The Task Force
report recommended a more effective use of oversight systems
already in place, or required under the ARCS contracts, to
improve management of the ARCS contracts in the future.
The Task Force recognized that EPA must improve oversight
without overwhelming its field staff and ARCS contractors with
administrative paperwork. The Task Force included
recommendations to attempt to balance EPA's management
responsibilities for the ARCS contracts.
C. SUMMARY OF RECOMMENDATIONS
The Task Force report grouped issues and recommendations
into six categories:
I. Program Management — contractor activities related to
administration and technical support, as opposed to direct
clean-up activities at Superfund sites. Recommendations
include:
Establish a national target to limit program management
costs to 20% or less of total contract expenditures.
• Provide policy and guidance to regional managers on
cost controls.
Complete allocation of program management costs to
specific sites by December 1991.
II. ARCS capacity and Utilization — the extent of
contractor capacity acquired under the ARCS contracts and
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ARCS Implementation Plan
November 27, 1991
its ultimate utilization at Superfund sites.
Recommendations include:
Make more effective use, of ARCS contracts by using them
for large design projects .and remedial construction
projects up to $15 million.
- * •'' •
Reduce ARCS construction capacity by approximately $2
billion.
Issue new guidance to regional officials on balancing
the use of ARCS contracts with a continuing role of the
U.S. Army Corps of Engineers in the remedial program.
III. ARCS Contract Controls — the provisions of ARCS
contract management that permit effective EPA oversight of
contractor activities. Recommendations include:
Strengthen regional administrative processes and
controls to improve contract administration and assure
appropriate work assignments and invoice review.
Establish regional capabilities for developing
independent government cost estimates.
IV. ARCS Financial Audits and Reviews -- the processes
used to ensure that charges under ARCS contracts are
accurate and allowable. Recommendations include:
Support the EPA Office of the Inspector General (OIG)
in establishing a more rigorous contract audit program.
Increase EPA oversight on contractor financial systems.
Develop a process for regional officials to
periodically spot check contractor financial records
and documentation supporting monthly billing.
V. Award P«« Process — the mechanism by which EPA
evaluates and rewards contractor performance.
Recommendations include:
Use the award fee process to reward superior contractor
performance and penalize poor performance, including
possible terminations.
VI. EPA Management Processes and Organizations —- the
organization, procedures, and staffing used by EPA to manage
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ARCS Implementation Plan
November 27, 1991
the work performed under ARCS contracts. Recommendations
include:
Establish a Superfund Acquisition Program Manager to
oversee acquisition decisions and activities.
D. STRATEGY
Implementation will be initiated via a steering committee
composed of representatives from OSWER, OARM and the lead
regions. The steering committee will ensure distribution and
accountability for specific recommendations and in turn, brief
senior management as to the progress in achieving the milestones
set forth in this plan. After the Superfund Acquisition Program
Manager is selected and the ARCS Council is established, they
will assume responsibility for the implementation and the
steering committee will be dissolved.
E. RECOMMENDATIONS AND PROPOSED MILESTONES TO IMPLEMENT
I. PROGRAM MANAGEMENT
1. EPA should establish a national target of 15 percent or less
as the ratio of program management expenditures to total
contract expenditures under ARCS contracts. To accomplish
this, contract-specific cost expenditure targets and
contractor-specific targets should be developed by the
regions with OSWER/OARM help.
Discussion: The report originally recommended 20%, but the
House-Senate Conference Committee for the FY 92
Appropriations Bill reduced this target. The
Bill states that "EPA spend no more than 15% of
the total ARCS budget on program management."
The conferees requested that both ARCS program
and program management costs be reported to the
Committees on Appropriations on a quarterly
basis.
Designated Lead: Hazardous Site Control Division (HSCD)
Proposed/Milestones:
a. Prepare policy letter to December 1991
regions establishing national
target and directing
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ARCS Implementation Plan
November 27, 1991
development of regional
targets.
b. Review contract and contractor January 1992
specific targets established
by the regions.
c. Develop standard program January 1992
management tracking reports.
d. Evaluate actual costs versus Quarterly commencing
targets. . in April 1992
2. EPA regional offices should continue to pursue program
management cost reductions and strengthen cost controls.
Contractor effectiveness in controlling costs should be
considered a significant factor in the award fee evaluation
process.
Discussion: Regional implementation is dependent upon
guidance developed by the Procurement and
Contract Management Division (PCMD) under
recommendations three and four below. Once the
guidance is developed, the regions will
establish individual implementation plans
including target dates. Regional Management
Teams, working with the Superfund Acquisition
Program Manager and ARCS Council, will include
their routine monitoring methods in the
implementation plans.
Designated Lead: Regions
Proposed Milestones:
a. Regional implementation of April 1992
control measures.
b. Regions issue report on award April 1992
fee and establish
implementation dates.
c. Superfund Acquisition Program within 90 days of
Manager, ARCS Council and ARCS Council
Regional Management Teams formation
develop plan to monitor
program cost reductions and
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ARCS Implementation Plan
November 27, 1991
cost controls during routine
regional visits and formal
reviews.
3. Within 120 days EPA should develop guidance to support cost
management activities. As- part of that guidance, EPA
should:
Describe program management activities mandated by
contract;
Clarify contract requirements related to staffing;
Discuss factors that promote efficiency when cleanup
activities slow down;
Develop various indicators of administrative cost
control; and
Reiterate EPA requirements for exercising program
' options.
Discussion: HSCD and the regions will coordinate as
appropriate.
Designated Lead: PCMD
Proposed Milestones:
a. Complete data collection and December 1991
coordination activities with
program and regional
information sources.
b. Complete development of draft January 1992
guidance.
c. Issue final guidance. February 3, 1992
4. To track costs more accurately, within 120 days EPA should
develop guidance for dividing program management costs into
two parts: administrative costs and technical support
costs.
Discussion: PCMD will work with the regions and HSCD as
appropriate.
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ARCS Implementation Plan
November 27, 1991
Designated Lead: PCMD
Proposed Milestones:
a. Complete data collection and December 1991
coordination activities with
program and regional - «e '
information sources.
b. Complete development of draft. January 1992
c. issue final guidance. February 3, 1992
5. By December I/ 1991, EPA should complete guidance for
allocating program management costs to site-specific work
assignments for purposes of cost recovery.
Discussion: This guidance has been prepared by the
Financial Management Division (FMD). PCMD has
developed implementation instructions which
will be sent to the regions.
Designated Lead: FMD/PCMD
Proposed Milestones:
a. FMD Completes guidance. September 13, 1991
Completed
b. PCMD issues implementation November 5, 1991
instructions. Completed
c. Regional contracting officers December 1991
issue contract modifications.
6. EPA should revise the program management concept so that
start-up costs, administrative costs, and other clean-up
support costs are classified separately in future Superfund
contracts.
Discussion: HSCD will develop a position paper for use by
the Response Action Contract Strategy (RACS)
work group. HSCD will look to the Contract
Operations Review and Assessment Staff (CORAS)
and PCMD for assistance in the development and
will share the information with the Long-Term
8
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ARCS Implementation Plan
November 27, 1991
Contracting Strategy Advisory Committee.
Designated Lead: HSCD
Proposed Milestones:
a. Evaluate and analyze -program January 1992
management structure under
other contracts.
b. Prepare option paper for February 1992
review.
c. Develop position paper. March 1992
d. Brief Long-Term Contracting April 1992
Strategy Advisory Committee on
optimal program management
structure.
II. ARCS CAPACITY AMD UTILIZATION
To encourage more effective use of available ARCS resources,
within 60 days EPA should revise Superfund (policy to allow
regions to select ARCS or U.S. Army Corps of Engineers
(Corps) contractors to do design work at any site, and to
select ARCS or Corps to perform remedial actions with a
value up to $15 million. Under current policy ARCS cannot
be selected to carry out remedial actions with a value over
$5 million.
Discussion: HSCD will prepare a policy letter for Office of
Emergency and Remedial Response (OERR)
signature to the regions revising the policy of
assigning Superfund projects to the Corps.
HSCD will meet with the Corps to discuss this
issue and its impact.
Designated Lead: HSCD
Proposed Milestones:
a. Issue policy memorandum to December 2, 1991
regions.
b. Meet with headquarters office December 1991
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ARCS Implementation Plan
November 27, 1991
of the Corps to discuss
redistribution of workload.
2. To facilitate implementation of this revised policy, within
90 days EPA should issue guidance to the regions to help
them make assignments to ARC
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ARCS Implementation Plan
November 27, 1991
Discussion: PCMD will lead this effort with HSCD and
regional input.
Designated Lead: PCMD
Proposed Milestones:
• *> "•
a. Regions complete capacity March 1992
analysis.
b. Complete draft guidance. May 1992
c. Issue final guidance and June 1992
sample modification.
d. Regional contracting officers September 1992
will issue modification.
To ensure a balanced construction management system, EPA
should work with the regions and Corps to improve Corps
responsiveness to regional needs during project design,
maintain effective communications between EPA and the Corps,
and ensure a substantial and predictable workload for the
Corps to facilitate workload planning.
Discussion: HSCD will include this task in their Corps
management and support work plan. HSCD will
report highlights as warranted.
Designated Lead: HSCD
Proposed Milestones:
a. Establish an interagency work January 1992
group comprised of EPA
regional and Corps District
staff, chaired by the
EPA/Corps headquarters'
liaison, to develop and
implement a project plan to
improve responsiveness,
communication, and workload
planning for the support to
Superfund provided by the
Corps of Engineers to EPA.
b. Develop implementation plan April 1992
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ARCS Implementation Plan
November 27, 1991
and schedule for the project.
5. In order to assess the accuracy of current workload
assumptions, EPA should continue to monitor the extent to
which ARCS contractor capacity is utilized annually. If
actual utilization differs, substantially from the
projections, EPA should take action to correct under- or
over-capacity problems.
Discussion: HSCD will continue to monitor ARCS "level of
effort" (LOE) capacity. A primary source of
information will be PCMD's ACT system.
Designated Lead: HSCD
Proposed Milestones:
a. Verify FY 91 ARCS LOE capacity December 1991
projections.
b. 'Revise/refine FY 92 ARCS LOE January 1992
capacity projection model.
c. Expand and refine ARCS March 1992
capacity projection model to
include remedial LOE dollars,
program management dollars and
sub-pool dollars.
d. Monitor ARCS capacity to Quarterly commencing
confirm accuracy of in April 1992
projections.
6. EPA should assess the apparent excess "level of effort"
capacity of ARCS contractors in the Region 9/10 western
zone. The Agency should consider selective terminations and
assess the feasibility of making excess capacity available
to other regions that may have a shortfall.
Discussion: HSCD will work with Regions 9 and 10 to
complete their ARCS capacity analysis. Close
coordination with PCMD will be necessary.
Designated Lead: HSCD
Proposed Milestones:
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ARCS Implementation Plan
November 27, 1991
Interview with Region 9/10 January 1992
during regional visit.
Complete Region 9/10 capacity February 1992
analysis.
Explore feasibility of, •> • March 1992
capacity adjustment and assess
making capacity available to
other regions.
III. ARCS CONTRACT CONTROLS
1. OSWER should report ARCS contract management as a material
weakness in its FY 1991 Federal Managers' Financial
Integrity Act (FMFIA) submission. In addition, the EPA
office responsible for this report should:
Implement corrective actions;
Establish a format tracking system that projects action
dates and monitors whether actions are taken as
scheduled;
Report quarterly to EPA Senior Council on Management
Controls on the status of implementation; and
Convene a work group to evaluate regional issues,
vulnerability assessments and previous reviews. Work
group efforts will meet the FMFIA corrective action and
follow-up requirements.
Discussion: OSWER will continue to identify ARCS contract
management as a material weakness under FMFIA.
Designated Lead: HSCD
Proposed Milestones:
a. OSWER identifies Process December 1991
Owner. (Senior Manager
responsible for ARCS program)
b. Convene ARCS Council to January 1992
evaluate issues raised in
'vulnerability assessments for
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ARCS Implementation Plan
November 27, 1991
additional corrective actions.
c. Develop tracking system to January 1992
follow-up on corrective
actions.
d. Establish target dates^fo-r April 1992
implementing corrective
actions from vulnerability
assessment.
e. Prepare reports documenting Quarterly commencing
implementation status. April 1992
2. Regional Administrators should act immediately to establish
a regional capacity for providing independent government
cost estimates to ARCS contract managers.
Discussion: While the regions must implement this
recommendation, headquarters staff will take
specific actions to initiate the process.
CORAS will prepare a policy letter to the
regions stating the need for independent
government estimates. HSCD will continue work
on the remedial design scoping guidance and
continue to improve existing cost estimating
tools.
Designated L««d: Regions/CORAS/HSCD
Proposed Milestones:
a. Issue OERR directive December 1991
emphasizing requirement for
independent government cost
estimates for ARCS work
assignments.
b. Regions implement requirements January 1992
for independent government
cost estimates.
c. OERR will assess existing cost January 1992
estimating tools for regional
usability.
d. OERR will issue design scoping August 1992
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ARCS Implementation Plan
November 27, 1991
guidance and revised cost
estimating tools.
e. Regional implementation of September 1992
revised cost estimating tools.
f. Superfund Acquisition.grogram Within 90 days of
Manager and ARCS Council, in ARCS Council
conjunction with Regional formation
Management Teams, will develop
monitoring plan to ensure
compliance.
3. EPA should take immediate steps to strengthen ARCS
administrative process controls in those areas identified in
regional vulnerability assessment. Two areas that deserve
immediate attention are the need to assure the optimal scope
of work and the invoice review process.
Discussion: Regions must implement this recommendation with
direction from headquarters. HSCD has the lead
on scope of work and CORAS/PCMD have the lead
on invoice review.
Designated Lead: Regions
Proposed Milestones:
a. Issue OERR directive requiring December 1991
invoice reviews for ARCS work
assignments.
b. Regions review their January 1992
vulnerability assessments.
c. Regional Management Teams will January 1992
review existing guidance on
the administrative process.
d. Regional Management Teams will March 1992
ensure proper management
controls are in place and
used.
e. Superfund Acquisition Program Within 90 days of
manager and ARCS Council, in ARCS Council
conjunction with Regional formation
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ARCS Implementation Plan
November 27, 1991
Management Teams, will develop
monitoring plan to ensure
compliance.
4. EPA should implement the recommendations resulting from its
ongoing study of the Agency^s administrative controls over
the government-owned equipment used by contractors at
Superfund sites.
Discussion: PCMD will review the findings of the Office of
Administration and Resources Management (OARM)
property system review when it becomes
available. Based on that analysis and
evaluation of the Region 9 property utilization
pilot, PCMD will make recommendations
concerning Superfund property management.
Designated Lead: PCMD
Proposed Milestones:
a. Complete analysis of the OARM March 1992
property system review.
b. Complete recommendations June 1992
concerning organizational and
resource issues.
c. Incorporate findings of September 1992
Region 9 pilot in final
recommendation.
5. EPA should evaluate the feasibility of establishing
regional, government-owned, contractor-operated warehouses
where all equipment not required on a regular basis can be
stored and accessed by ARCS contractors.
Discussion: PCMD will make recommendations based on OARM
property system review and the Region 9
Superfund property utilization pilot.
Designated Lead: PCMD/Region 9
Proposed Milestones:
a. Initiate pilot. October 1, 1991
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ARCS Implementation Plan
November 27, 1991
Completed
b. Complete interim evaluation of June 1992
pilot.
c. Region 9 issues September 1992
recommendations. PCMD* ••• -
incorporates findings of OARM
study in final recommendation.
IV. ARCS FINANCIAL AUDITS AND REVIEWS
1. The EPA Office of the Inspector General (OIG) should develop
a strategy to complete financial audits in accordance with
existing requirements. Specifically, the OIG should:
Define a full audit program for the six contractors for
which the OIG is the lead auditor;
• Continue to negotiate with Defense Contract Audit
Agency (DCAA) on audit coverage for the remaining
seventeen ARCS contractors and other EPA contractors;
and
Evaluate audit coverage in order to consolidate the
number, type, and frequency of audits while still
preserving audit integrity.
Discussion: PCMD and OIG will coordinate with DCAA
concerning auditing. A memorandum from
Assistant Administrator, OSWER, requesting
audits on all Superfund contracts has been sent
to OIG. PCMD and OIG are meeting frequently to
resolve ongoing issues.
Designated L«ad: 0ERR/PCMD
Proposed Milestones:
Bi-Monthly
a. Field audit divisions commencing in
prepare contractor status October 1991
report.
b. Field audit divisions Quarterly commencing
implement Chapter 37 and new October 1991
audit request and report
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ARCS Implementation Plan
November 27, 1991
distribution procedures.
c. Field audit divisions develop December 1991
Fiscal 1992 audit plan for
each cognizant contractor.
d. Audit Operations Staff *(AOS) September 1992
and field audit divisions-
identify new firms for audit
cognizance, inform DCAA
headquarters, and begin
transition of audit
responsibility.
e. AOS and field audit divisions September 1992
determine contractors which
require a resident office.
f. Field audit divisions conduct As requested
.Monitoring Reviews.
EPA should strengthen its financial monitoring review
program by:
Reviewing contractors on a one- to two-year cycle; and
Resolving problems identified during previous reviews.
Discussion: Procedures are being established.
Designated Lead: PCMD
Proposed Milestones:
a. PCMD will establish work group November 1991
to consider options.
b. Prepare issue paper on February 1992
financial monitoring process
and circulate for review and
comment.
c. Consider alternatives and April 1992
begin implementation.
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ARCS Implementation Plan
November 27, 1991
3. Regional Administrators, working with PCMD and the OIG,
should periodically spot check contractors' financial
records, vouchers, and other supporting documentation.
Discussion: PCMD will send'guidance to regional contracting
officers concerning areas of vulnerability,
specifically, .Other Direct Costs (ODC). A
Superfund Bulletin Board will be considered as
a means to report areas of vulnerability as
they are identified, such as ODC, disallowance
information.
Designated Lead: PCMD
Proposed Milestones:
a. Issue draft guidance. December 1991
b. Receive comments. January 1992
• c. Issue final guidance. March 1992
d. Superfund Acquisition Program Within 90 days of
Manager and ARCS Council, in ARCS Council
conjunction with Regional formation
Management Teams, will develop
monitoring plan to ensure
compliance.
V. AWARD FEE PROCESS
EPA should establish teams to evaluate and report within 120
days on ways to streamline the award fee system, reduce the
paperwork burden, and resolve issues of national
consistency. .These teams also should examine the
Performance Index Rating Score to determine if it is the
best tool for evaluating performance, and then translate the
index into a criterion for the assignment of new work.
Discussion: Each region or zone will establish a management
team. The Superfund lead region will act. as
the liaison between headquarters and the
regions to enhance communications and
dissemination of information. Regional
Management Team assessment of the award fee
process will be needed prior to preparing any
15
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ARCS Implementation Plan
November 27, 1991
guidance as recommended by the Task Force in
recommendations two and three of this section.
The Superfund lead region will coordinate the
preparation and compilation of the Regional
Management Teams' recommendations.
Designated Lead: Regions K „
Proposed Milestones:
a. Establish Regional Management December 1991
Teams.
b. Regional Management Teams January 1992
evaluate regional award fee
system to include performance
index rating scoring.
c. Regional Management Teams January 1992
transmit recommendations to
the Superfund lead region.
d. Superfund lead region presents February 3, 1992
consolidated recommendations
to the Fee Determination
Official (FDO), the Superfund
Acquisition Program Manager
and the ARCS Council.
2. EPA should reinforce its policy on the use of award fees to
influence contractor performance by:
Suspending the issuance of new site assignments to
contractors with unresolved unsatisfactory performance
on prior work assignments;
Imposing appropriate sanctions, including termination,
on contractors who persist in their failure to correct
deficiencies; and
Assigning new site work in FY 1992 to contractors in
relation to their overall performance.
Discussion: HSCD with PCMD assistance will develop guidance
for the regions to utilize contractor
performance in their consideration of work
assignments. Development of the guidance is
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ARCS Implementation Plan
November 27, 1991
dependent on the revisions and modifications
made to the award fee process by the Fee
Determination Official (FDO) in consultation
with the Superfund Acquisition Program Manager
and the ARCS Council. These changes would be
based on the Regional Management Teams review
and recommendations resulting for
recommendation number one of this section.
Designated Lead: HSCD/PCMD
Proposed Milestones: Milestones for this recommendation are
incorporated into recommendation number three of this
section.
3. Contractors should be evaluated on the quality of both their
program management and remedial work. The ability of
contractors to reduce program management costs and meet
national targets should receive significant consideration in
the award fee process.
Discussion: See discussion in recommendation number two of
this section.
Designated Lead: HSCD/PCMD
Proposed Milestones:
a. Draft guidance to make award May 1992
fee process consistent across
regions in regard to
performance evaluation,
assignment of future work, and
utilization of award fee to
influence performance.
b. Issue guidance to Remedial June 1992
Project Managers/Work
Assignment Managers, Project
Officers, and Contracting
Officers.
c. Superfund Acquisition Program within 90 days of
Manager and ARCS Council, in ARCS Council
conjunction with Regional formation
Management Teams, will develop
monitoring plan to ensure
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ARCS Implementation Plan
November 27, 1991
compliance.
Key EPA supervisors should be held accountable and fully
participate in the implementation and oversight of the award
fee process.
. *
Discussion: CORAS will prepare OERR/PCMD policy letter
assuring delegation of Performance Evaluation
Board responsibilities only to qualified
regional staff.
Designated Lead: CORAS
Proposed Milestones:
a. Issue guidance to regions December 1991
regarding delegation of
Performance Evaluation Board
responsibilities.
b. Superfund Acquisition Program Within 90 days of
Manager and ARCS Council, in ARCS Council
conjunction with Regional formation
Management Teams, will develop
monitoring plan to ensure
compliance.
VI. EPA MANAGEMENT PROCESSES AND ORGANIZATION
1. EPA should establish a Superfund Acquisition Program Manager
who reports directly to the Assistant Administrator
responsible for overseeing Superfund acquisition activities
and decisions. The initial major responsibility of the new
manager should be to address problems related to the
management: of ARCS contracts.
Discussion: Selection of this official will be made by
OSWER.
Designated Lead: OSWER
Proposed Milestones:
a. Name Superfund Acquisition December 13, 1991
Program Manager.
»
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ARCS Implementation Plan
November 27, 1991
2. EPA should examine the division of headquarters and regional
management responsibilities to identify steps needed to
create an effective central..mechanism for monitoring,
evaluating, and formulating- ARCS policy. An implementation
plan based on the results of this examination should be
submitted to the Administrator--within the next 120 days.
Discussion: HSCD will create a flow diagram of the process.
HSCD will apply Total Quality Management (TQM)
techniques in the determination of headquarters
and regional management roles and
responsibilities.
Designated Lead: HSCD
Proposed Milestones:
a. Examine current division of December 1991
headquarters and regional
management responsibilities
'with CORAS, PCMD, and lead
regions.
b. Identify weakness and strength December 1991
of current division.
c. Draft recommendations. January 1992
d. Final implementation plan. February 3, 1992
3. Total Quality Management (TQM) concepts should be employed
to establish an ARCS Council consisting of headquarters and
regional personnel. This council, chaired by the Superfund
Acquisition Program Manager, should meet regularly to
identify and implement improvements in ARCS contract
management.
Discussion: HSCD will take the lead in forming this group.
The ARCS Council will be established without
ARCS contractor representation. ARCS
contractor comments and recommendations will be
sought by the Council. ARCS contractor
representatives will be invited to Council
meetings as the need arises.
Designated Lead: HSCD
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ARCS Implementation Plan
November 27, 1991
Proposed Milestones:
a. Establish ARCS Council. December 1991
b. Convene ARCS Council to January 1992
formulate objectives.
,..« •' •
c. Establish TQM milestones. January 1992
d. Execute recommendations. July 1992
4. EPA should support successful ARCS contract management by
creating Regional Management Teams. These teams will report
back to the ARCS Council with recommendations for increased
efficiencies in ARCS contract management.
Discussion: An OSWER/OARM directive will be issued to
enable Regional Administrators to allocate
resources to support this implementation plan.
The teams will be composed of regional managers
from the Superfund program and regional
procurement and contract administration
offices.
Designated Lead: Regions
Proposed Milestones:
a. OSWER and OARM issue directive November 1991
to regions on establishment of
Regional Management Teams.
b. Regions establish management December 1991
teams.
c. Regional Management Teams Frequency to be
routinely report to ARCS established by ARCS
Council. Council
5. EPA should establish a coordinated ARCS management
information program to serve regions and headquarters. This
program should use information systems already existing or
designed.
Discussion: ARCS Contract Tracking (ACT) System Steering
Committee will be formed with regional
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ARCS Implementation Plan
November 21, 1991
contracting officers and project officers
involvement.
Designated Lead: PCMD
Proposed Milestones:
a. ACT System Steering Committee November 1991
established.
b. Project officers will identify December 1991
their data needs in Dallas at
the ARCS National Project
Officer/Contracting Officer
conference.
c. Memorandum on minimum March 1992
acceptable invoice data
requirement signed by PCMD and
OERR.
d. . ACT-HQ test model developed September 1992
and implemented.
6. EPA should direct the newly created Superfund Acquisition
Program Manager to design and deliver to each region a
tailored employee development/training program for ARCS
personnel. The program should provide specific skills and
knowledge that the ARCS contracting officers, project
officers, and remedial project managers must have to operate
effectively and efficiently.
Discussion: Existing training programs are being examined
to ensure regional needs are met. In addition
to this examination, training will be expanded
to include a one day contract management course
for Superfund managers. The target audience
for the course will be Superfund Branch Chiefs
and above.
Designated Lead: OSWER
Proposed Milestones:
a. Establish a work group to January 1992
develop training program.
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ARCS Implementation Plan
November 27, 1991
b. Present work group proposal to February 1992
Waste Management Division
Directors.
c. Work group establishes June 1992
training implementation
schedule. . * -
7. Following the Region 5 model for utilizing the TQM process
as a training tool, Regional Administrators should form ARCS
regional and contractor staff into teams that address ARCS
issues from a unified, strategic, quality improvement
perspective.
Discussion: Superfund lead region will assist in
facilitating the work group formation. Since
Region 5 has established the ground rules using
the TQM techniques, the work group formation
should be modeled after the Region 5 process.
Designated Lead: Regions
Proposed Milestones:
a. Distribute information January 1992
regarding Region 5 model to
other regions.
b. Regional teams established. June 1992
c. Regional teams report progress To be determined by
to Regional Management Team. Regional Management
Teams
26
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APPENDIX
List of Abbreviations
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ARCS Implementation Plan
November 27, 1991
AA
ACTS
ARCS
CERCLA
CO
CORAS
Corps
DCAA
EPA '
FMFIA
GAO
HSCD
IAG
LOE
OARM
ODCS
OERR
OIG
OSWER
PCMD
PM
LIST OF ABBREVIATIONS
Assistant Administrator
ARCS Contract-Tracking System
Alternative Remedial Contracting Strategy
Comprehensive Environmental Response,
Compensation and Liability Act of 1980
Contracting Officer
Contract Operations Review and Assessment Staff
United States Army Corps of Engineers
Defense Contract Audit Agency
United States Environmental Protection Agency
Federal Managers' Financial Integrity Act
General Accounting Office
Hazardous Site Control Division
Interagency Agreement
Level of Effort
Office of Administration and Resources
Management
Other Direct Costs
Office of Emergency and Remedial Response
Office of the Inspector General
Office of Solid Waste and Emergency Response
Procurement and Contracts Management Division
Program Management
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ARCS Implementation Plan
November 27, 1991
PO Project Officer
RA Regional Administrator
RA Remedial Action
RAG Response Actlo'h Contract
RD Remedial design
RD/RA Remedial Design/Remedial Action
REM Remedial Contract
RPM Remedial Project Manager
SARA Superfund Amendments and Reauthorization Act of
1986
TQM . Total Quality Management
WAM Work Assignment Manager
11
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