United States           Office of Acquisition          April 2001
Environmental           Management
Protection Agency
         CONTRACTING OFFICER
           REPRESENTATIVES
      SUPPLEMENTAL COURSE TEXT

             Pilot Presentation
Note: Completion of the COR Mentor Program is
prerequisite to taking this class.

-------
                    Presented by:
        Office of Acquisition Management
        Acquisition Training and Oversight
              Service Center (3802R)

    The Overall Course Objective is to:
Supplement the basic training received in the COR Mentor Program by
presenting an overview of U.S. EPA contracting policies, procedures, and
vulnerabilities.
                       Date:
                       Instructor:.

                       Location:

-------
IV

-------
                    ADMINISTRATIVE INFORMATION

1.  Students must preregister to attend this course. At Headquarters, registrations are
processed through the Acquisition Training Service Center, OAM. Local Training Officers
process registrations for courses in RTP, Cincinnati, the regions, headquarters field
components and regional field components.

2.  Attendance is mandatory per Chapter 7 of the Contracts Management Manual.

            A student cannot miss more than  1  hour of  instruction  and receive  a
            certificate.

3.     This is a three day course. Hours are 9:00 a.m. to 4:00 p.m. unless the instructor
      indicates otherwise.

            •    Lunch -1 hour

            •    Breaks (At the discretion of the instructor)

            •    All students are expected to return to the classroom on time from
                  lunch and breaks.

4.     There is a final exam on the afternoon of the 3rd day. A passing score of 75% is
      required to receive a certificate.

5.     CLASS DISCUSSION:

            •    All students have the privilege to debate with discretion on any
                  topic related to the course. Therefore, each student, within the
                  bounds of courtesy and propriety,  is encouraged to participate
                  freely in class discussions.

            •    Statements in class will be treated as privileged information not to
                  be attributed to a specific individual when outside the class.

6.     STUDENT EVALUATION OF COURSE:

                  Student critiques are used to evaluate and update the course
                  content. Evaluations will be collected at the conclusion of the class.
                  The importance of the course evaluation, by each student, cannot
                  be overemphasized.

-------
VI

-------
              INTRANET ACCESS TO OAM ACQUISITION GUIDANCE


The following information is available on the EPA INTRANET at
http://intranet.epa.gov/oamintra


Acquisition Policy Memoranda


Acquisition Training


Areas of expertise - points of contact on specific topics


Best Practices Guide for Conferences


Best Practices Guide for Multiple Award Task Order Contracting


Contracts Management Manual including the following chapters:

1 .    Acquisition and Contract Management Planning
2.    Procurement initiation and Related Documentation
3.    Unsolicited Proposals
4.    Blanket Purchase Orders
5.    Providing Government Property
6.    Invoice Review Process
7.    Contracting Officer Representatives
8.    Contracting Officer Warrant Program
9.    Accounting for Appropriations in Contracts
10.    Procurement Systems Evaluation
11.    Safeguarding Bids and Proposals
12.    Ratification of Unauthorized Commitments
13.    Affirmative Procurement Program
14.    Quality Contracting Teams
15.    Use of Cost-Plus-Award-Fee Contracts
16.    Multiple Award Contracts
17.    Reserved
18.    Prohibition on Directed Subcontracting
19.    Reserved
20.    Shutdown Procedures

EPA Acquisition Regulation (EPAAR)


EPA Order 1900.1 A Use of Contractor Services to Avoid Improper Contractor
Relationships

Government-Wide Contracts - contracts for various information technology supplies and
services issued for use by other federal agencies, but available for use by EPA.
                                          Vll

-------
•  A Guide to Best Practices for Past Performance
•  Interim Acquisition Rules for Comment
•  Policy Hot Tips - updated regularly
•  Procurement Policy Notices
•  Purchase Card Guidance
•  Simplified Acquisitions Made Easy
•  Virtual Acquisition Research Center
 FORMS, FORMS,  FORMS
U.S. Government Standard Forms (SF) or Optional Forms (OF) are available to
download, fill, and print via the Internet at http://www.gsa.gov/forms.
EPA Forms can be printed from the Intranet at http://intranet.epa.gov/nrmptforms.
EPA "fill and print" forms are available in E-Forms-if it has been implemented in your
office. The E-Forms Help Desk can be reached on 703-734-2338.
Forms Tax -on-demand" are available through 202-564-FORM.
Hard copies are available from the National Center for Environmental Publications and
Information (NCEPI). To order forms, submit EPA Form 2360-1 to:
Forms Distribution Office           To contact NCEPL
U.S. EPA-NCEPI                  (513) 489-8190 (phone)
Forms Distribution Office           (513) 489-8695 (FAX)
P.O. Box 42419                   ncepi.mail@epamail.epa.gov
Cincinnati, OH 45242
                                 Vlll

-------
 1. www.faionline.com
INTERNET SITES

     COR Mentor Program
     Bask training required for all Agency CORs
2- www.hvdra.gsa.gov/staffyv/faipage.htm Federal Acquisition Institute
                                      Information on Government wide career
                                      management for the acquisition workforce, such as
                                      COs and CORs.
3. www.gsa.gov

4. www.arnet.gov/far
5. www.fss.gsa.gov/customers.cfm
6. www.usoge.gov



7. www.arnet.gov/



8. Web2.deskbook.osd.mil/defaulLasp

9. www.dau.mil

10. www.gao.gov
     General Services Administration (GSA)
     Homepage
     Federal Acquisition Regulations
     Links to solicitations and schedules for all
     multiple award schedules for services offered by
     GSA HQ and regional offices

     U.S. Office of Government Ethics
     Ethics regulations & guidance OGE Form 450,
     Confidential Financial Disclosure

     Acquisition Reform Network
     Information on acquisition best practices,
     suspended & debarred list, etc.

     Acquisition reform information

     Defense Acquisition University

     General Accounting Office Home Page
                                        IX

-------

-------
                      COR Supplemental Course Agenda

Class will run until 4:00 each day

Day1
Day 2
Day 3
         9:00 -  9:15    Registration

         9:15  -  9:45   Introduction and Overview

         9:45  -  11:30  Contract Vulnerabilities

         11:30 -  12:30  Lunch

         12:30 -  4:00   Preparing WA/DO/TO
                         SOW/IGE Exercises
         9:00  -  10:00  Wrap-Up of WA/DO/TO
                         Exercises

         10:30 -  11:30  Reviewing the Contractor's
                         Proposal

         11:30-  12:30  Lunch

         12:30 -  2:00   Reviewing the Contractor's
                         Proposal (continued)

          2:00 -  4:00    Technical Monitoring
9:00 - 11:30  Financial Monitoring

11:30- 12:30  Lunch

12:30-  2:00  Records and File
              Management, Miscel

2:00 -   4:00  Final Exam
                                           Lin Pinskey

                                           Lin Pinskey

                                           Marilyn Chambers



                                           Lin Pinskey



                                           Lin Pinskey


                                           Tom Sullivan
Tom Sullivan


Marilyn Chambers


Tom Sullivan



Lin Pinskey
                                     XI

-------
Xll

-------
                                 Table of Contents
             Subject

Module 1     Introduction
             Purpose of the Course
             Objectives of the Course
             Organization of the Course
             Updating the Participant Manual

Module 2     The Basics of Contracts
             Introduction
             Objectives
             Procurement Authority, Funding Authorizations and
                Appropriations
                Contracting Authority
                   Definition of a Contract
                   Procurement Authority
                   Funding Authorizations and Appropriations
                      The Anti-Deficiency Act
                   Government Performance and Results Act
                   Other Delegations
                The Statement of Work
                   Contents of a Statement of Work
                Types of Contracts
                Micro-Purchases, Simplified Acquisitions and
                   Large Contracts
                   Micro-purchases
                   Simplified Acquisitions
                   Other Contracts
                      Fixed Price
                      Cost Reimbursement
                      Time & Materials/Labor Hour
                      Indefinite Delivery Contracts
             Special Requirements when Acquiring Advisory and
                Assistance Services
             Government-Wide Acquisition Contracts and Alternative
                Contractual Vehicles
                   Government-Wide Acquisition Contracts
                   Multiple Award Schedule Contracts
                   Multi-Agency Contracts
                   Blanket Purchase Agreements
      Key Players in the Contracting Process: Roles and Responsibilities
             Contracting Officer
             Contracting Officer's Representative
1-1
1-1
1-2
1-3
2-1
2-1
2-1

2-1
2-1
2-2
2-2
2-3
2-9
2-10
2-10
2- 12
2-13
2-13

2- 13
2-13
2- 14
2-14
2-15
2- 17
2-18
2-20

2-21

2-21
2-21
2-22
2-22
2-23
2-23
2-24
                                       -Kill-

-------
                            Table of Contents (Continued)
       Subject
Module 2 (Cont)
             Types of CORs
             Contract CORs
             Delivery Order, Task Order or Work Assignment CORs
       Roles and Responsibilities Matrix

Module 3     Pervasive Contract Issues
             Introduction
             Objectives
             Issues Involving Contractor Services
                Personal Services
                   Definition and Examples
                   Appropriate Interaction with Contractors
                   Safeguards when Interacting with On-Site Contractors
                   Other Areas of Special Concern
                Inherently Governmental Functions and Vulnerable/
                   Sensitive Services
                   Inherently Governmental Functions
                   Sensitive/Vulnerable Services
                      Approval Levels for Contracts
                Handling Confidential Business Information
                   Confidential Business Information (CBI)
                   When the Contractor will have Access to CBI
                Conflict of Interest (COI)
                   Types of COI
                   Agency Policy on COI
                   Examples of COI
                   COI Responsibilities
                Directed Subcontracting
                   Policy
                   Interaction with Subcontractors
                Exhibit 3 -1 Checklist
                Exhibit 3 -  2 Checklist for COI
                Practical Exercise # 1
                Practical Exercise # 2

Module 4     The Prcaward Process (To be added later)

Module 5     Preparation of Work Assignments. Delivery and Task Orders
             Introduction
             Objectives
             The Flow of the Work Preparation Process
2-25
2-25
2-27
2-29
3-1
3-1
3-2
3-2
3-2
3-3
3-5
3-5
3-6

3-6
3-9
3-9
3-12
3- 12
3-13
3-15
3-15
3-15
3-16
3-16
3-17
3- 17
3-17
3-19
3-22
3-23
3-24
5-1
5-1
5-2
                                       -xiv-

-------
                           Table of Contents (Continued)

      Subject                                                        Page

Module 5 (Cont)  Selecting the Appropriate Contract to Use                  5-3
                Delivery Orders, Task Orders and Work Assignments        5-4
                   Delivery and Task Orders                            5-4
                   Work Assignments                                  5-5
                The Process of Obtaining Work Using a WA, DO or TO      5-6
                   Planning for the W A, DO or TO                       5-6
                   Defining the Project Objectives                       5-6
                   Analyzing the Government's Requirements              5-7
                   Exhibit 5 - 1: Planning Worksheet                     5-11
                   Writing the SOW for the TO, DO or WA               5-13
                   Exhibit 5-2: Sample Background Statements            5-16
                   Exhibit 5-3: Sample SOW for a WA                  5-18
                   Exhibit 5 - 4: SOW Review Checklist                  5 - 26
                   Student Exercise No. 1                               5-28
                Developing the Government Cost Estimate                 5-29
                   Introduction and Purpose                            5-29
                   Elements that Make up a Contractor's Costs             5-30
                Methods of Developing the Government Cost Estimate       5-33
                   Delivery/Task Orders vs Work Assignments             5-34
                   Exhibit 5 - 5:Example of a Planning Worksheet          5-37
                               Estimating Labor Hours (Base Method)
                   Exhibit 5-6: Sample Cost Estimating Worksheet         5-38
                               Overall Loaded Labor Rate Method
                   Exhibit 5-7: Sample Planning Worksheet               5-42
                               Other Direct Costs
                   Exhibit 5-8: Sample Cost Estimating Worksheet         5-45
                               Full Costing Method
                   Student Exercise No. 2                               5-48
                Preparing Other Elements of the Work Package             5-49
                   Exhibit 5 - 9: The Workflow and Management Process     5-51

Module 6    Reviewing the Contractor's Work Plan
                Introduction                                          6-1
                Objectives                                            6-1
                Proposals Submitted by a Contractor                      6-1
                   Work Assignments                                  6-1
                   Task Orders and Deli very Orders                      6-2
                   Reviewing the Contractor's Proposal                    6-2
                      Time Period Allowed for Review                   6-3
                      Items Included in the Review                      6-4
                                      -xv-

-------
                           Table of Contents (Continued)
      Subject
Module 6 (Cont)
   Items of Special Importance to Review
      Exhibit 6-1: Checklist for Evaluating a Contractor's
                   Response/Work Plan
   Negotiating Changes
   Negotiating with the Contractor
   Negotiating Strategies
   Planning for Negotiations
   Conducting the Negotiations
      Exhibit 6-2: Sample Memorandum for Documenting
                   Negotiations on Work Plan
   Amending/Modifying the WA/TO/DO
Contract Situations Where Performance is Authorized Before
   Approval of a Contractor's Proposal/Work Plan
      Exhibit 6-3: Sample Task Directive
      Student Exercise No. 1
Module 7    Establishing and Maintaining Project Files
            Introduction
            Objectives
            Importance of Maintaining Records
                Effectively Monitoring Progress
                Responding to Inquiries
                Federal and Agency Recordkeeping Management
                   Requirements
                   Definition of a Record
                   Statutory Authority
                   EPA Responsibilities for Records
                   Guidance for Maintaining and Disposing of Agency
                      Records
                   Importance of Comprehensive Records Management
                   Types of Records that Should be Maintained
                   Selecting a Filing System
                   Retaining Project Records
                   Exhibit 7-1: Sample File Plan A
                   Exhibit 7 - 2: Checklist for Evaluating DO/TO/WA Files

Module 8    Monitoring the Contractor's Performance
            Introduction
            Objectives
            Technical Monitoring
                Importance of Effective Technical Monitoring
6-5
6-9

6-11
6-11
6-13
6-13
6-14
6-17

6-18
6-19

6-21
6-24
                                                    7-1
                                                    7-1
                                                    7-1
                                                    7-2
                                                    7-2
                                                    7-3

                                                    7-3
                                                    7-4
                                                    7-5
                                                    7-6

                                                    7-7
                                                    7-8
                                                    7-13
                                                    7-13
                                                    7-16
                                                    7-18
                                                    8-1
                                                    8-2
                                                    8-2
                                                    8-2
                                      -XVJ-

-------
                            Table of Contents (Continued)
      Subject
Module 8 (Cont)
                   Background
                   Caveats for Environmentally- Related Measurements
                   Technical Direction Contract Clause
                   Appropriate Technical Direction
                   Exhibit 8-1: Sample Technical Direction Worksheet
                   Exhibit 8-2: Sample Service Request Form
                Unauthorized Commitments
                   Student Exercise No. 1
                Reviewing Deliverables
                   Exhibit 8 - 3: Review of Deliverables Checklist
                Meeting With the Contractor and Site Visits to the
                   Contractor's Facility/Office
                 .  Exhibit 8-4: Sample Meeting Documentation Memo
                Reviewing Performance
                Subcontractor Performance
             Reviewing the Monthly Progress Report
                   Student Exercise No. 2
             Monthly Progress Report Contract Clause
Page

8-2
8-3
8-3
8-4
8-6
8-7
8-8
8-10
8-11
8-12
8-13

8-15
8-16
8-18
8-19
8-23
8-24
Module 9     Financial Monitoring and Invoice Review
                                                               A - 1 to A - 12
                                                               B- 1 toB- 16
                                                               C - 1 to C - 12
Appendix A   EPA Order 1901.1A
Appendix B   GWACS and Other Alternative Contractual Vehicles
Appendix C   Procurement Policy Notice 95-04
                Procedures for Handling Post Award COI
Appendix D   Procurement Policy Notice 97-01
                Required Practices Concerning Subcontractors
Appendix E   Procurement Policy Notice 99 - 03
                Issuance of Orders Under GSA's Management,
                Organization, and Business Improvement Services
Appendix F   Procurement Policy Notice 01-01
                Providing Government Furnished Property at
                Superfund Sites under EPA Class Deviation
Appendix G   Procurement Policy Notice 01-02
                Guidance for Use of Higher-Level Contract
                Quality Requirements in Acquisitions
Appendix H   Chapter 5 Contracts Management Manual
                Contracting Officer/Project Officer Guide for the
                Management of Government Property Under EPA Contracts
Appendix I   Draft Chapter 7 Contracts Management Manual          I - 1 to I - 32
                Contracting Officer's Representatives
                                                               D - 1 to D - 14
                                                               E-ltoE-18
                                                               F - 1 to F - 12
                                                               G - 1 to G - 20
                                                               H - 1 to H - 36
                                       -xvii-

-------
                            Table of Contents (Continued)

      Subject

Appendix J   Chapter 9 Contracts Management Manual                J -1 to J - 6
                Accounting for Appropriations in Contracts
Appendix K   Chapter 12 Contracts Management Manual               K -1 to K - 6
                Ratification of Unauthorized Commitments
Appendix L   Chapter 18 Contracts Management Manual               L - 1 to L - 8
                Prohibition on Directed Contracting
                                       -XVlll-

-------
                            MODULE 1  INTRODUCTION

PURPOSE OF THE COURSE

This course is designed to supplement the Federal Acquisition Institute's (FAI) OnLine COR
Mentor Course and provide practical application and analysis that will enable Contracting
Officer's Representatives (COR) at the Environmental Protection Agency (EPA) to perform their
contract management roles effectively as Project Officers (PO), Work Assignment Managers
(WAM), Delivery Order Project Officers (DOPO), and Task Order Project Officers (TOPO).
The course consists of 9 modules. The focus of this course is the post-award, contract
administration phase of contracts management. At the completion of the course, CORs should be
able to understand the nuts and bolts of contract management and be better able to use
contractors to accomplish EPA's mission without squandering critical and finite tax dollars. This
course should assist Supervisors of CORs in grasping the concepts and understanding of the
critical role CORs play in the acquisition process.

Completion of FAI's OnLine University COR Mentor course is a prerequisite to enrolling in this
course. Additionally, both this course and the COR Mentor course work off the assumption that
enrollees understand the fundamentals of the Federal Acquisition Process as it relates to the
Federal Acquisition Process.  Attendees must understand the "law of agency,"what the Federal
Acquisition Regulation is and the source of contract law, the fundamentals of the Federal budget
process, the roles of the 3 branches of government in the budget process, goals and the
components of the acquisition process including the political arena,  related statutory provisions
implementing competition and socio-economic goals, and the fundamentals of contract type,
contract elements including dollar thresholds (i.e.: micro-purchases, simplified acquisitions), and
roles of the principal players in the process.

The course text is intended to support the classroom instruction and to serve as a desk reference
once CORs are on the job.  The four building blocks of competency are : knowledge,
comprehension, application, and analysis. The course takes the knowledge and comprehension
gained in the Contracting Orientation and COR Mentor courses taken at FAI OnLine University
and provides the application and analysis practical exercises necessary to obtain competence.

OBJECTIVES OF THE COURSE

The Goal is to provide CORs with the tools to function effectively. To this end the course will
increase your knowledge of applicable laws and regulations, make CORs aware of the critical
and vulnerable areas that are of special attention, as well as provide the basics  of successful
contract administration. EPA spends much of its budget on the extramural activities of
assistance and acquisition: grants, cooperative agreements and contracts. Errors on the part of
government personnel can be very costly so the effective management of contracts is every bit as
important a function to government agencies with heavy use of contract support as is the internal
administration of agency staff. It's a complex process.
                                         1-1

-------
Upon completion of this course, all CORs should be able to:

   •  Describe the process of tasking a contractor through some form of contract vehicle such
       as a work assignment, technical direction directive, task or delivery order

   •  Describe the roles and responsibilities of the key individuals in the process

   •  Identify potential contracting improprieties and vulnerabilities and determine ways to
       avoid or mitigate them.  These include issues associated with personal services,
       inherently governmental functions, conflict of interest and other contract administration
       issues.

   •  Identify applicable laws and regulations in order to avoid personal or Federal liability
       Describe methods, procedures and issues in performing the range of contract
       administrative management tasks. These include:

       -   Write a completion-oriented Statement of Work

       -   Develop an independent Government price/cost estimate

       -   Determine and document quality assurance requirements

          Establish and maintain project files

       -   Review and evaluate a Contractor's work/staffing/management plan

       -   Monitor a Contractor's technical performance, including providing technical direction

       -   Monitor a Contractor's financial performance

       -   Initiate amendments/modifications to the Contractor's tasking document

       -   Complete performance event reports

       -   Close out the tasking document
                                          1-2

-------
ORGANIZATION AND CONTENTS OF COURSE

This text consists of 10 modules. They are:

Module 1               Introduction
Module 2               Contract Basics
Module 3               Pervasive Contract Issues
Module 4               The Preaward Process (Reserved)
Module 5               Preparation of Work Assignments, Delivery and Task Orders
Module 6               Reviewing the Contractor's Proposal
Module 7               Establishing and Maintaining Files
Module 8               Monitoring Contractor Technical Performance
Module 9               Financial Monitoring and Invoice Review
Module 10             Termination, Close-Out, Miscellaneous Issues (Reserved)

The modules are organized in a common format, including the purpose of the module,
instructional objectives, and detailed descriptions of the various roles, procedures, guidelines,
and issues and problems associated with the various contract administration management tasks.
Checklists, worksheets and samples completed forms are included as appropriate. The text is
intended to be read in advance of class attendance.  The bulk of classroom hours are to be
devoted to hands-on exercises to apply and analyze  the various principles, practices and issues
involved in contract, work assignment, task order and delivery order management.

UPDATING  THE PARTICIPANT MANUAL

The contract administration process is a highly dynamic one. This document is intended to be
not only a student text but also a convenient-to-use  reference manual. The Acquisition Training
Service Center intends to update this course periodically in order to incorporate any changes at
the Federal, Agency, or Office of Acquisition Management level that affect the contract
management process.  The Manual will be available on the OAM Intranet page as a "read only"
pdf file at http://intranet.epa.gov/oamintra/training.  Updated pages will be added as necessary so
that graduates of this course can insert updated pages to this manual so that it can be a current,
handly reference guide.
                                         1-3

-------
1-4

-------
                     MODULE 2 - THE BASICS OF CONTRACTS

A. INTRODUCTION

This Module provides an overview of the fundamentals of contracts, statements of work (SOW)
funds requirements, types of contracts including micro-purchases and simplified acquisitions, the
various tasking documents, and identifies the key players in the process as well as their roles and
responsibilities. It addresses the types of contracts and the methods of getting work to the
contractor based upon the type of contract used. It relates the basic information to the overall
contract management function, and describes and contrasts the roles of the Contracting Officer's
Representatives and other parties in the process. Subsequent modules present detailed
procedures for performing the various elements of contract management tasks related to work
done by a contractor whether on a delivery order (DO), task order (TO), work assignment (WA)
or contract.

B. OBJECTIVES

   At the completion of this Module, you will be able to:

   • Define what a contract is and the elements involved

   • Understand the Agency's authorizations, appropriations, and funding issues

   • Understand the levels and types of SOWs, their importance to the process, their format
      and content

   • Understand the various types and pricing arrangements of contracts

   • Be aware of the special requirements when contracting for advisory and assistance (AAS)

   • Identify the key players in the process and their respective roles and responsibilities

C. PROCUREMENT AUTHORITY, FUNDING AUTHORIZATIONS, AND
   APPROPRIATIONS

   I. Contracting Authority

      a.  Definition of a Contract

          A contract is a legally binding agreement between two entities that must contain the
          following elements in order to be valid: competent parties, consideration, lawful
          purpose, clearly set forth terms, and, in a format  required by law.  This definition
          applies whether discussing private party agreements, commercial  agreements, or
          agreements between the Federal government and another party. Contracts can be

                                        2 -  1

-------
   between the Federal government and other governmental agencies (e.g., Federal, State
   or Local), private industry, individuals, educational institutions, or non-profit
   organizations. A contract between the Federal government and another entity binds
   the government to pay for the supplies and services and to not unreasonably interfere
   with or delay performance.
b.  Procurement Authority

   The authority for all Federal government contracts arises from the inherent powers
   granted by United States Constitution and is delegated from the head of the Executive
   Branch to the heads of all Departments and Independent Agencies. Because of the
   immense power and legal burden placed on the Federal government involved in
   entering into these agreements, there has to be a clear, delineated line of delegated
   authority.  All authority for contractual actions derives from delegations of
   procurement authority from the President of the United States to the Administrator of
   the EPA. From there the delegation is to the Procurement Executive, Director of the
   Office of Acquisition Management (OAM), on down to designated personnel within
   OAM or specially designated individuals outside of OAM. Contracting authority can
   be either limited or unlimited.  Each individual with delegated procurement authority
   has a written delegation of procurement authority (DPA) that sets forth the dollar
   limitations to which they are authorized to bind the government.  They also are given
   a warrant signed by the Director of OAM or his/her designee on a Standard Form
   1402 that must be publically displayed.

   Individuals with this delegation of authority are the agents of the Federal government.
   These agents are called Contracting Officers (CO) and have the authority to enter into
   a mutually binding relationship that obligates the seller to furnish supplies and/or
   services and the buyer to reimburse the seller for those supplies and/or services. All
   authority must be delegated in writing and must be actual. Individuals acting as if
   they had written delegated authority and presenting themselves to the other party to
   the contract as having the authority to order the party to perform are acting with
   "apparent" authority.  The law will not bind the Federal government in cases where
   the person appears to have the authority to act but in fact did not. The CO has
   authority to enter into, administer, modify, or terminate a contract and they are the
   only individuals authorized to do so on behalf of the Federal government. And the
   CO can only bind the government up to the limits of his/her delegation. COs can
   never enter into any agreement that is prohibited by law or in excess of their delegated
   authority.

c.  Funding Authorizations and Appropriations

   The control of funds in the Federal Government is governed by statutes and is
                                   2 - 2

-------
implemented by directives from the Office of Management and Budget (OMB), the
General Accounting Office (GAO), the U.S. Treasury and the Congress.  The
Congress, and the House in Representatives in particular, enact legislation that
appropriated public monies to cover both the intermural (salary, benefits, etc.) and
extramural (contracts, grants, interagency agreements) Agency activities.

There are two parts to funding with the Agency: appropriations and authorizations.
The authorizing legislation and the appropriation go hand in hand to establish a
mandate for environmental action followed by the funds to carry out the mandate.

Congress controls the purse strings in three ways: purpose, time, and amount. The
areas of concern regarding whether appropriated funds are legally available for
something depends upon the following three tests:
1.  The purpose of the obligation or expenditure must be authorized;

2.  The obligation must occur within the time limits applicable to the appropriation;
   and

3.  The obligation and expenditure must be within the amounts Congress has
   established.

   (a) Purpose

       Public funds may be authorized only for the purpose or purposes for which
       they were appropriated by the Congress unless the expenditure is otherwise
       provided by law.  While certain funding levels and limitations may be
       included in authorizing legislation, appropriation legislation will generally
       control the funding uses. However, the authorizing act and appropriations act
       should be harmonized to the greatest extent possible. The authorizing
       legislation and the appropriation go hand in hand to establish a mandate for
       environmental action followed by the funds to carry out the mandate.

   (b) Amount

       The second area relates to any restrictions relating to the amount of an
       appropriation. In other words, a COR needs to understand that he/she needs to
       know for what an appropriation can be spent, when it can be spent and how
       much is available.

       (1) The Anti-deficiency Act.


                               2 - 3

-------
    A key concept and legal constraint that is unique to Federal contracts is
    that no actions can be taken prior to determining that Federal funds are
    available: The Anti-Deficiency Act requires people with contracting
    authority must first ascertain that adequate funds are available to make
    reimbursement for any obligation the Federal government incurs. And
    those tax-payer funds from as appropriated by Congress meet the bona-
    fide (real) needs for which they were appropriated, the Anti-deficiency
    Act.

    The "Anti-deficiency Act" is one of the major laws where Congress
    exercises its constitutional control of the public funds.  It's considered the
    cornerstone of Congressional efforts to bind the Executive branch of
    government to the limits on  expenditure of appropriated funds.

    Briefly, in its current form, the Anti-deficiency Act prohibits:

       (i) obligation or expenditure in excess of appropriations;
       (ii) obligation or expenditure in advance of appropriations unless
          authorized by law;
       (iii)   accepting voluntary services for the United States exceeding
             that authorized by law; and,
       (iv) obligations or expenditure in excess of apportionments or
          administrative divisions of apportionments.

    Violations of the Anti-deficiency Act involves both civil and criminal
    penalties. A CO will never sign any contractually binding document
    without first making sure the funds are available to avoid any violation of
    the Anti-deficiency Act

(2)  Authorizations

    Over the years since the EPA was established, Congress has enacted
    various legislation that authorizes the EPA to undertake actions, write
    regulations fundamental to the EPA environmental mission.  These
    authorizations or "enabling legislation" have no funding. They are not
    appropriations of funds, but they are the authority or basis for the
    Agency's budget submissions to OMB. For EPA, authorizing legislation
    establishes the Agency's environmental mission that may be undertaken
    with funds provided by subsequent appropriations legislation. Authorizing
    legislation provides zero funding in and of itself.

       The various legislative Acts are:
                        2  - 4

-------
              Clean Air Act (CAA)
              Federal Water Pollution Control Act of 1948
                 Clean Water Act (CWA)
                 Water Quality Act (WQA)
              Safe Drinking Water Act (SDWA)
              Solid Waste Disposal Act
                 Resource Conservation and Recovery Act (RCRA)
                 Hazardous and Solid Waste Amendments
              Comprehensive Environmental Response, Compensation and
              Liability Act (CERCLA or "Superfund")
                 Super-fund Amendments and Reauthorization Act
                 Emergency Planning and Community Right-to-Know Act
              Pollution Prevention Act
              The National Environmental Policy Act
              Federal Insecticide, Fungicide and Rodenticide Act (FIFRA)
              Food Quality Protection Act
              Toxic Substances Control Act
              Radon Abatement Act
              Oil Pollution Act
          For a detailed explanation of the Acts and their purposes, go to
          http://intranet.epa.gov/fmdvallv/polidies/direct/2520.htm

(c) Availability

   Congress provides appropriations to EPA for three basic periods of
   availability: annual, multi-year, and no-year.

   (1) Annual Appropriations

      Annual appropriations (also called one-year appropriations) are provided
      for a specific fiscal year and are available for obligation only during that
      fiscal year. The federal government's fiscal year begins on October 1 and
      ends on September 30 on the  following year.  Annual appropriations are
      available only to meet a bona fide need of the fiscal year for which they
      were appropriated. The bona fide needs rule provides that a fiscal year
      appropriation may be obligated only to meet a legitimate, or bona fide,
      need arising in, or in some cases arising prior to but continuing to exist in,
      the time period for which the  appropriation was made.
                           2 - 5

-------
(2) Multi-Year Appropriations

   These appropriations are available for obligation for a definite period in
   excess of one fiscal year.  The appropriation legislation passed by
   Congress actually provides a date for funds expiration, just as do the
   annual appropriations EPA's multi-year appropriations are two-year
   appropriations, but each year Congress passes legislation appropriating
   funds which are valid for two years, beginning with the start of the fiscal
   year of October 1 and are available for obligation for two years. Because
   of the extended period of availability, multi-year appropriations may have
   unobligated balances which "carry over" from one year to the next and are
   available for obligation following reapportionment by OMB.

(3) No-Year Appropriations are available for obligation without fiscal year
   limitation. They remain available until expended, rescinded or otherwise
   withdrawn. In order for an appropriation to be no-year, it must be
   expressly stated as such in the appropriating language.

   EPA receives 9 appropriations: They are

   Annual Appropriation:

       •  Office of the Inspector General.

   EPA's two-year appropriations are:

       •  Environmental Program and Management (EPM)

          The EPM account covers a broad range of pollution control efforts
          for all media except Superfund, LUST, Office of Inspector
          General, and Oil Spill activities. Almost one-half of the funds in
          this account are provided by EPA in the form of grants and
          cooperative agreements to support state program activities.  In
          addition to program costs, this account funds personnel
          compensation, benefits, travel, and administrative costs associated
          with the operating programs for the Agency (e.g. administrative
          contracts and administrative expenses object classes). This account
          also provides support for executive direction, management, and
          direct implementation of the Agency's environmental programs at
          headquarters, the ten regional offices, and all field operations
          (except for Superfund, LUST, Oil Spills, and the Office of
          Inspector General).
                         2 - 6

-------
    •  Science and Technology (S&T)

       EPA's Science and Technology Program is designed to produce the
       scientific knowledge and tools necessary to support decisions on
       preventing, regulating, and abating environmental pollution and to
       advance the base of understanding on environmental sciences. The
       Agency's  science and technology efforts are conducted through
       contracts, grants, and cooperative agreements with universities,
       industries, other private commercial firms, nonprofit organizations,
       State and local government, and Federal agencies, as well as
       through work performed at EPA's 12 laboratories and various field
       stations and field offices. This account also provides S&T
       operating expenses such as personnel salary & benefits, laboratory
       supplies and materials, operation and maintenance of lab facilities,
       equipment, ADP support, human resource development, and
       printing. Beginning in FY  1996, this account also funds Hazardous
       Substance research formerly appropriated in the Superfund
       account.

EPA's no-year appropriations are:

•   Hazardous Substance Response Trust Fund (Superfund)

    The Superfund appropriation is provided to carry out the legislated
    mandates of CERCLA as amended by SARA by addressing the
    problems of uncontrolled hazardous waste sites and spills. Essentially,
    the legislation mandates that EPA (1) provide emergency response to
    hazardous waste spills; (2) take emergency action at hazardous waste
    sites that pose an imminent hazard to public health or environmentally
    sensitive ecosystems; (3) engage in long-term planning, remedial
    design, and construction to clean up hazardous waste sites where no
    financially responsible party can be found; (4) take enforcement
    actions to require responsible private parties to clean up hazardous
    waste sites; and (5) take enforcement actions to recover costs where
    the fund has been used for cleanup. In addition to program costs, this
    account funds Program Control and Benefits (PC&B), travel, and
    administrative costs associated with the Agency's Superfund program.

•   Leaking Underground Storage Tanks Trust Fund (LUST)

    The LUST appropriation is provided to carry out the legislated
    mandates of SARA by conducting corrective action for releases from
    leaking underground storage tanks containing petroleum and other
                     2 -  7

-------
   hazardous substances. EPA implements the LUST program through
   State cooperative agreements which enable States to conduct
   corrective actions to protect human health and the environment. The
   trust fund is also used for enforcement by forcing responsible parties to
   finance corrective actions and to recover expended funds from the
   cleanup of abandoned tasks. In addition to program costs, this account
   funds PC&B, travel, and administrative costs associated with the
   Agency's LUST program.

•  Buildings and Facilities (B&F)

   EPA receives the Buildings and Facilities appropriation each year to
   cover the necessary major repairs and improvements to existing
   installations which house the Agency.  This appropriation also covers
   new construction projects when authorized.

•  Oil Spill Liability Trust Fund

   This appropriation, authorized by the Federal Water Pollution Act and
   amended by the Oil Pollution Act of 1990, provides funds for
   preventing and responding to releases  of oil and other petroleum
   products  in navigable waterways. EPA is responsible for directing all
   cleanup and removal activities posing a threat to public health and the
   environment; conducting inspections,  including inducing responsible
   parties to undertake cleanup actions; reviewing containment plans at
   facilities; reviewing area contingency plans; pursuing cost recovery of
   fund-financed cleanups; and conducting research and oil cleanup
   techniques. Funds are provided through the Oil Spill Liability Trust
   Fund established by the Oil Pollution Act and managed by the Coast
   Guard. In addition to program costs, this account funds PC&B, travel,
   and administrative costs associated with the Agency's Oil Spill
   program.

 • State and Tribal Assistance Grants (STAG)

   The STAG appropriation includes two components:

       State Revolving Funds (SRFs)
       State and Tribal Assistance Grants (STAG)

   SRFs comprise the majority of the appropriation with the funds going
   towards major environmental capitalization infrastructure projects for
   cities and towns.
                     2 - 8

-------
d. Government Performance and Results Act (GPRA) 1993

   Since 1993, the Agency has tied its budget request, and the appropriations it receives
   from Congress, to the GPRA strategic plan.  The GPRA requires the Agency to
   develop a strategic plan for its program activities and tie the budget requests to the
   plan. The plan must have:

       1.  a comprehensive mission statement covering the major functions and
          operations of the agency;

       2.  general goals and objectives, including outcome-related goals and objectives,
          for the major functions and operations of the agency;

       3.  a description of how  the goals and objectives are to be achieved, including a
          description of the operational processes, skills and technology, and the human,
          capital, information,  and other resources required to meet those goals and
          objectives;

       4.  a description of how  the performance goals included in the plan shall be
          related to the general goals and objectives in the strategic plan;

       5.  an identification of those key factors external to the agency and beyond its
          control that could significantly affect the achievement of the general goals and
          objectives; and

       6.  a description of the program evaluations used in establishing or revising
          general goals and objectives, with a schedule for future program evaluations.

   The funding that is made available to the COR for her/his WA, contract, TO or DO is
   tied to the GPRA operating plan goals for the office.

   For more detailed explantion about accounting for resources and the GPRA structure
   as it relates to the funds process, go to
   http://www.intranet.epa.gov/fmdvally/gpra/gpra.htm

   CORs need to pay for the work with the funds received for the work. The old
   accounting procedure of FIFO - first in, first out - is no longer applicable when
   dealing with contract funding. This area of invoices and payments will be covered in
   the Module on Financial Monitoring.
                                   2 - 9

-------
   e. Other Delegations

      Contracting Officers have extensive knowledge of acquisition rules and regulations,
      but often must rely on others with specific knowledge to assist them in the awarding
      and management of contracts. To do this, the CO delegates authority for certain
      functions individuals such as:

      •   Property specialists
      •   Technical Experts
      •   Cost Analysts
      •   Auditors
      •   Legal Counsel

0. The Statement of Work

   The SOW is the key document and heart of any acquisition. It's the critical step in the
   acquisition process because it is closely related to the extent of competition and
   procurement technique used. The SOW is also a basis for determining the type of
   contract. The  degree of specificity used in the SOW will be the primary criterion used by
   the CO in determining which contract type is best among the various contract types set
   forth in the next section.

   A contract-level SOW is a written description of the Governments requirements for
   supplies or services. SOWs come in two broad types.  The work required under them can
   be either completion or level-of-effort (term) forms. Most of the Agency's contracts have
   two levels of SOWs. There is the contract SOW that defines the overall purpose of the
   contract, delineates the contract-level deliverables such as monthly financial and technical
   reports, and the general standards that the Government will use to determine that the
   requirements have been met. A completion SOW for one ultimate objective may have
   only one SOW. A level-of-effort/tenn SOW will describe the  requirement hi general
   terminology and have as its  objective the deli very of hours of effort. With these later
   SOWs, the specifics are delineated hi the SOWs of tasking documents issued under the
   terms of the contract. Module 3 will go into greater detail on SOWs for work
   assignments, delivery and task orders (WA, TO, DO).

   The completion SOW describes the scope of work by stating a definite goal or target and
   specifying an end product. This SOW form normally requires the contractor to complete
   and deliver the specified end product or series of end products (e.g., a final report of
   research accomplishing the  goal or target) within the agreed upon price as a condition for
   payment. Partial payments can be made based as the contractor meets certain milestones.
   The contractor is responsible for completing the work and delivering the end product(s)
   within the agreed upon price and time. The government's responsibility is to pay that
   agreed upon price for the supplies and/or services rendered. This fixed price is not


                                     2 - 10

-------
 subject to adjustment regardless of the contractor's costs which could be higher or lower
 than the agreed upon fixed price.

 The term form SOW describes the work in general terms and obligates the contractor to
 devote a specified level of effort for a stated time period, on work that can be stated only
 in general terms. Under this form, if the performance is considered satisfactory by the
 Government, the agreed upon price is payable at the expiration of the agreed-upon period,
 and upon contractor statement that the level of effort specified in the contract has been
 expended in performing the contract work. Renewal for further periods of performance is
 a new acquisition that involves new arrangements.

    "5ฐ NOTE: Because of the differences hi obligation assumed by the contractor, the
        completion form is preferred over the term form whenever the work, or specific
        milestones for the work, can be defined well enough to permit development of
        estimates within which the contractor can be expected to complete the work.  The
        term or level-of-effort form must obligate the other party to provide a specific
        level of effort within a definite time period in order to be valid.

 The SOW at either the contract or tasking level is the basis for preparation of the
 independent Government cost estimate (IGCE). The IGCE is developed by the program
 office and is based on the individual elements of cost estimated for each of the
 components and sub-components of the SOW. The IGCE is one of the tools used by the
 CO to determine if the contractors proposed price/cost is fair and reasonable.

 The contractor develops and prepares their proposal from the SOW. The contractor must
 understand the SOW requirements sufficiently to develop its technical, management and
 price/cost proposals. The SOW must provide enough information without need for
 further explanation from the Government. The SOW establishes a uniform basis for
 judging accountability and responsiveness of all prospective contractor proposals
 received, and  aids the Government in evaluating and selecting the best contractor.

 After contract award, the SOW is used as the basis for ordering work and measuring
 contractor performance.  For example, is the contractor meeting the milestones  set forth
 in the SOW?  Do the final reports contain all the necessary data?  The SOW, along with
 the rest of the contract document, becomes the basis for the  contractor's performance and
 the Government's measuring standards against which the contractor's performance is
 judged. The SOW is the contract's description of the requirement(s) that the contractor is
 required to follow and deliver.  Accordingly, it must clearly describe what is being
 procured and  contain any special considerations or constraints that apply.

 SOWs can be written as performance-based, as a functional description, a design
. description, or any combination of all three. The preferred format is performance-based
 work statement (PBWS). A PBWS structures all aspects of an acquisition around the
                                   2 - 11

-------
purpose of the work to be performed instead of around the way to do the work or other
imprecise, vague descriptions. PBWS is a concept designed to ensure that the
performance levels are achieved and the compensation paid to the contractor is based
upon the degree to which the contract meets stated standards.  The SOW is based on
required results and objectives to be achieved. It's the "what" instead of the "how" the
effort in terms of expected results or performance standards. The use of a PBWS also
necessarily requires inclusion of the methodology to be used to measure the contractor's
performance and compliance with the objectives or expected outcomes. Included are
financial incentives for performance above average and financial deductions for below
par performance.  The FAR provides the policies and procedures for use of a PBWS and
the Office of Federal Procurement Policy (OFPP) has issued guidance and Policy Letters
on the subject. All of the various documents can be found at the Office of Acquisition
Management web page http://intranet.epa.gov/oamintra under Procurement Policy
Information at the Virtual Acquisition Research Center.  The OFPP guide contains
templates for several PBWSs and week long training sessions are offered on the
development of a PBWS by many different sources. Due to the limited time constraints
of this course,  this subject won't be dealt will not be covered.

a.  Contents of a SOW

   All SOWs, whether for the contract as a whole, or for a tasking document, should
   contain, as a minimum the following elements:

   •  General Information to include title/introduction, background, scope, purpose, and
       applicable documents

   •  Work requirements to include list and description of tasks

   •  Deliverables, including acceptance criteria

   •  Schedule for overall project and for each deliverable

   •  Name of COR

   •  Management controls (if SOW involves advisory and  assistance services,
       sensitive or vulnerable services closely related to inherent Government functions
       as set forth in FAR Part 7)

   The background and objectives are frequently combined, as are the deliverables and
   the schedule. Also, quality assurance requirements should be included in the tasks
   and deliverables (or in a separate section) when a performance-based SOW is
   contemplated or for projects involving environmental data collection for which
   standard-operaiing-procedures (SOP) have been established.
                                  2 - 12

-------
ffl. Types of Contracts

   a.  Micro-purchases, Simplified Acquisitions, and Large Contracts

       Contract type and the SOW are directly related and what type to use is dependent on
       the amount of detail in a SOW. Further constraints on selection of contract type is set
       forth by laws enacted by Congress and signed by the President. This United States
       Code (USC) is converted into acquisition regulation (the FAR) which divides contract
       types into several broad categories that are first characterized by certain dollar
       thresholds. They are further defined by the pricing arrangements that range from
       fixed price to some form of cost reimbursement. Under current law, all acquisitions
       under the simplied acquisition threshold (SAT) must be fixed price. Over that
       threshold, the CO has flexibility.

       1.  Micro-purchases

          Micro-purchases are item(s) that have a total value of $2,500 or less. The
          Government-wide commercial "purchase card" means a purchase card, similar in
          appearance to a commercial credit card, issued to authorized agency personnel to
          use to acquire and to pay for supplies and  services. Each card holder takes one
          day of training and can receive a delegation of procurement authority with a
          maximum dollar limit of $2,500 per purchase. This dollar limit may be lower
          depending on individual program office policies within the Agency.  Any Agency
          employee with a demonstrated need can obtain a purchase card. The concept is to
          empower the individual employee to get what he/she needs whenever she/he
          needs it with little paperwork burden.

       2. Simplified Acquisitions

          A simplified acquisition is one with a dollar value in excess of the micropurchase
          dollar threshold of $2,500 but not more than established Simplified Acquisition
          Threshold (SAT) which is currently $100,000. The SAT for commercial off-the-
          shelf items is $5,000,000.  This process is a streamlined one that requires only a
          minimum of 3 sources which can be solicited orally, maximizes the use of
          electronic commerce where possible, can  be completed far more quickly that
          formal  solicitation procedures because the Contracting Officer can establish
          deadlines for responses that give potential offerers a reasonable amount of time
          rather than a regulatory number of days such as 30 or 45 when acquiring supplies
          and services in excess of $100,000 (except that the dollar threshold for
          commercial items is $5,000,000.) Only designated personnel within OAM, or
          specially designated individuals outside of OAM with delegated procurement
          authority, can use the simplified acquisition process. By regulation, all
          acquisitions at the micropurchase and simplified acquisition thresholds must be
          fixed price. The acquisition of commercial supplies and services must also  be
          fixed price.
                                      2 - 13

-------
3.    Other Contracts

   All other procurement actions with a total estimated value in excess of the
   simplified acquisition threshold (SAT) of $100,000 or which require more
   government technical involvement are accomplished using a more complex
   document with terms and conditions embodied in clauses.  Selecting the contract
   type is a subject of negotiation and sound judgement where type and prices are
   closely related. The best contract type is one that will result in reasonable
   contractor risk and provide the contractor with the greatest incentive for efficient
   and economical performance. The final decision on contract type is directly
   related to the definitiveness of statement of work.

   Contracts can generally be defined by their pricing arrangements.  The specific
   contract types fall into four major categories. The two most commonly used are
   fixed price and cost reimbursement. A third type is divided into two subtypes:
   Time and Materials (T&M) and Labor Hours (LH). A LH contract is almost the
   same as a T&M contract, differing only in mat materials (often referred to as
   Other Direct Costs) are not supplied by the contractor. The last type are Indefinite
   Quantity contracts which can have pricing arrangements that are cost
   reimbursement, fixed price, time and materials/labor hours or a combination of all
   three. Contract types range from Firm Fixed Price (FFP), in which the contractor
   has full responsibility for the performance costs and resulting profit (or loss) (and
   the Government pays the Contractor the agreed upon price on delivery of
   acceptable product or service,) to Cost Reimbursement (CR), in which the
   contractor has minimal responsibility for the performance costs and the
   Government reimburses the Contractor for all of its allowable, allocable and
   reasonable costs. In between these two "poles" are incentive type contracts in
   which the contractor's responsibility for the performance costs and profit or fee
   incentives are tailored to the uncertainties involved in contract performance.
               : Elements of a Contractor's costs will be dealt with in Module 4.

   (a) Fixed Price

      In a fixed price contract, the government pays a set amount of money for
      services or supplies delivered.  A firm-fixed-price contract best utilizes the
      basic profit motive of business enterprise. A firm-fixed-price contract
      provides for a price that is not subject to any adjustment on the basis of the
      contractor's cost experience in performing the contract. This contract type
      places upon the contractor maximum risk and full responsibility for all costs
      and resulting profit or loss. It provides maximum incentive for the contractor
      to control costs and perform effectively and imposes a minimum
      administrative burden upon the contracting parties.  Therefore it is the
      preferred contract type.
                              2 - 14

-------
   Within the family of fixed price contracts there are variations such as:

   Fixed-Price with Economic Price Adjustment (FPw/EPA)
   Fixed-Price Incentive (FPI)
   Fixed-Price Level of Effort (FP LOE)
   Fixed-Price Award Fee (FPAF)

   A FP w/EPA allows the fixed price to be adjusted (both upward and
   downward) subject to a mutually agree upon pricing index stated in the
   contract. This type is used when buying materials with volatile swings in the
   market price such as oil, lumber and precious  metals.  All the circumstances
   for price adjustment or price revision are explicitly written into the contract
   and agreed upon at the time of contract award.

   The other types of contracts such as FPI, FP LOE, FPAF  are described in
   depth in the FAR in Part 16.  In this family of FP contracts, EPA uses FFP
   contracts almost exclusively.

   •   Generally, the contract SOW itself is the tasking document in the FP
       environment and no other ordering mechanism is necessary.  Also,
       because all terms and conditions and the Government's requirements are
       agreed to at the time of contract award, there is no technical direction
       involved since it could possibly be the basis for a request for  a price
       adjustment if the Contractor makes adjustments to its performance based
       on input from the Government.

(b) Cost Reimbursement (CR)

   As with FP contracts, within the regulation, there is a family of cost contracts.
   There are straight CR contracts and CR with some form of fee  (profit).  By
   law, fee cannot exceed  10% of the total negotiated cost. Each can be level-of-
   effort (LOE), completion, or a combination of both.

   A CR contract form is suitable for use only when the uncertainties involved in
   contract performance do not allow costs to be determined in advance with
   sufficient accuracy.  It requires much more surveillance by the  Government to
   ensure efficient methods and effective cost controls are used. Contractors are
   reimbursed for their reasonable (those amounts that would be incurred by an
   ordinarily prudent business person hi a competitive business and consistent
   with normal operating practices), allowable (as determined by the FAR and
   cost accounting standards), and allocable (can be shown to be either directly
   incurred as part of the effort devoted to performance of the SOW or as an
   indirect benefit to the contract effort).
                           2 - 15

-------
Cost (with no Fee)
Cost-Sharing with or without Fee
Cost-Plus-Fixed-Fee (CPFF)
Cost-Plus-Award-Fee (CPAF)
Cost-Pius-Incentive-Fee (CPIF)

Cost contracts at EPA fall into three major subcategories: CR, CPFF and
CPAF.
In a CR contract, usually an agreement between the Agency and another
Federal Agency, a non-profit organization, or a university/college, there is no
fee/profit, but the costs incurred are reimbursed.

With a CPFF contract, not only are the costs incurred reimbursed, but also the
contractor is paid a fee that is part of a negotiation between the Government
and the contractor.  That fee, which is most often a percentage of a
contractor's proposed costs, is converted into a fixed dollar amount when the
contract is awarded. The fee doesn't vary with costs, but could be adjusted if
the Government makes changes to the SOW.

CPAF

A cost-plus-award-fee contract is a CR contract that provides for a fee divided
into two parts: a base amount (which may be zero) which negotiated and
converted into a fixed dollar amount at the inception of the contract; and an
award fee amount, converted into a fixed maximum dollar amount, that the
contractor may earn in whole or in part during performance. The dollar value
of the award fee needs to be sufficient enough to motivate the contractor to
strive for excellence in such areas as quality, timeliness, technical ingenuity,
and cost-effective management.  The amount the contractor earns and is paid
is determined by the Government's unilateral decision based upon review and
evaluation of the contractor's  performance. The performance is evaluated
over a specific period of time, and should be frequent enough to give the
contractor time to improve if necessary.  A recent court decision found that the
Government's decision on award fee could be disputed, reversing the previous
Federal position that award fee was not subject to the Disputes clause.

All other CR types of contracts, Cost Sharing and CPIF, are described in depth
in the FAR in Part  16. In this family of cost reimbursement vehicles, EPA
uses primarily CPFF, followed in usage by CPAF and, in limited areas, cost
contracts.

    **•  Before the text moves on, it should be noted that all incentive or award
        fee type of contracts create a greater amount of work for the COR
        involving monitoring and documenting contractor performance against
        the established criteria/elements contained in the contract's fee plan;
                        2 -  16

-------
          more so than any other type of contract.  This additional
          administrative cost and effort must weighed against the expected
          benefits when considering these types of contracts. Their use has to be
          justified by a cost savings versus the administrative costs.  A pre-
          award COR needs to work with the CO and consider all factors
          including the resources and  willingness of program personnel to
          support this type of contract.

          Because of the more general nature of the contract SOW, the CO
          delegates responsibility for technical guidance to the COR.

          If the contract is a LOE/term form multiple-year CR contract, the
          contract itself orders nothing other than hours of effort and work is
          ordered from the contractor using a technical  direction document
          called a work assignment (WA) or Technical  Direction Directive
          (TDD).

c.  Time and Materials and Labor Hour (T&M, LH)

   Both types of contract pricing are based upon the same formula with the only
   difference being that labor hour contracts  do not include materials.  The two
   terms are often used, incorrectly, as synonymous.  These types of contract are
   the least preferred, and can only be used when no other type of contract is
   suitable. Both T&M and LH contracts may be used only after the CO executes
   a determination and findings that no other contract type is suitable,  and only if
   the contract includes a ceiling price that the contractor exceeds at its own risk-
   It requires the COR, more than any other contract type, to devote an
   appropriate amount of oversight to  see that the contractor is using efficient
   methods and making efforts to control costs.

   T&M

   With a T&M priced contract, the Government pays a fixed rate for each hour
   of direct labor, at specified fixed hourly rates for a particular labor category
   such as budget analyst or technical  writer. These labor hour rates are
   "loaded," i.e.. they include salary, overhead, general and administrative
   (G&A) expense and profit. Materials costs, as well  as other direct costs such
   as travel are billed at actual cost; in some  cases,  they may include a handling
   cost, such as General and Administrative  (G&A) expense. This type of
   contract may be used only when it is not possible at the time of placing the
   contract to estimate accurately the extent or duration of the work, or to
   anticipate costs with any  reasonable degree of confidence. The direct labor
   category is an average composite of all individuals who meet the


                            2 -  17

-------
   education/experience for that labor group. Because of this and because each
   hour is all inclusive, T & M pricing provides no profit incentive to the
   contractor for cost control or labor efficiency.

   Labor Hour

   As explained earlier in the text, a LH pricing arrangement is the same as a T &
   M contract except that no materials are supplied by the contractor. Since each
   hour is all inclusive, it also provides no positive profit incentive to the
   contractor for cost control or labor efficiency.

       •3" NOTE: Depending on the contract SOW, the contract itself may be the
          ordering document or individual ordering documents such as W A or
          TDDs may be required.

       "S" These contract SOWs can be either completion or level-of-effort.  Both
          have a stated ceiling cost. Usually the CO delegated authority for
          technical guidance to the COR, but the COR needs to be very careful
          that actions do not cause a change in the labor categories used or the
          overall costs to be exceeded.

(d) Indefinite Delivery Contracts

   This type of contract is used when the exact times and/or exact quantities of a
   product or service to be delivered is not known at the time of award. There
   are 3 types of this form of contract and may use any of several pricing formats,
   including:

   Fixed-Price
   Cost Reimbursement
   Time and Materials/Labor Hours

   The FAR differentiates between orders for supplies/produces) and services.

   A "delivery order contract" means a contract for supplies that does not
   procure or specify a firm quantity of supplies (other than a minimum or
   maximum quantity) and  that provides for the issuance of orders for the
   delivery of supplies during the period of the contract.

   A "task order contract" means a contract for services that does not procure or
   specify a firm quantity of services (other than a minimum or maximum
   quantity) and that provides for the issuance of orders for the performance of
   tasks during the period of the contract.


                           2 -  18

-------
The 3 types of indefinite delivery contracts are:

(1) Definite-Quantity Contracts

   A definite-quantity arrangement provides for the delivery of a definite
   quantity of specific supplies or services for a fixed period, with deliveries
   or performance at designated locations upon order.  This type of contract
   may be used when it can be determined in advance that  (1) a definite
   quantity of supplies or services will be required during the contract period,
   and (2) the supplies or services are regularly available, or will be available
   after a short lead time. Supplies are ordered via delivery orders and
   services are ordered via task orders. For both delivery and task orders, the
   Contractor must provide the minimum quantity plus additional quantities
   up to a ceiling specified in the contract. The contract guarantees that the
   Government will order at least the minimum quantity of supplies or
   services.

(2) Requirements Contracts

   This arrangement provides for delivery of all requirements of supplies or
   services during a specified contract period, with deliveries or performance
   to be scheduled by placing orders with that contractor. Whenever
   possible, the contract shall state the maximum limit of the contractor's
   obligation to deliver and the Government's obligation to order. Also, the
   contract may specify maximum or minimum quantities that the
   Government may order under each individual order and the maximum that
   it may order during a specified period of time.  This type of contract may
   be appropriate for acquiring supplies or services when the Government
   anticipates recurring requirements, but cannot predetermine the precise
   quantities needed during a definite period.

(3) Indefinite-Quantity Contracts

   An indefinite-quantity arrangement provides for the delivery of an
   indefinite quantity, within stated limits, of specific supplies or services to
   be furnished during a fixed period, with deliveries or performance to be
   scheduled by placing orders with the contractor. This arrangement permits
   the ordering of supplies or services after requirements materialize, with
   flexibility in both quantities and delivery scheduling. The contract
   requires the Government to order and the contractor to furnish at least the
   stated minimum quantity of supplies or services.  The contract limits the
   Government's obligation to the minimum quantity specified in the
   contract.  Quantity limits may be expressed in terms of numbers of units or


                         2 -  19

-------
                 as dollar values. The minimum quantity must be more than nominal, but it
                 should not exceed the amount the Government is fairly certain to order. In
                 addition, if ordered, the contractor shall furnish any additional quantities,
                 not to exceed the contract's stated maximum. The contract may also
                 specify maximum and minimum quantities that the Government may order
                 under each TO, WA, or DO and the maximum that it may order during a
                 specific period of time.

                 An indefinite-quantity contract  may be used when the Government cannot
                 predetermine, above a specified minimum, the precise quantities required
                 during the contract period. This type of contract should be used only when
                 a recurring need is anticipated.

                 The FAR states a preference for mulitple awards using a single solicitation
                 (RFP) when using indefinite-quantity contracts.  Multiple awards should
                 not be made if there is only one contractor capable of providing the supply
                 or service; or the Government would receive more favorable terms and
                 conditions, including pricing, if a single award was made; or the cost of
                 administration may outweigh the benefits; or the tasks to be ordered  are
                 integrally related and only one contractor can perform the work; or the
                 total estimated value of the contract is less than the simplified acquisition
                 threshold; or multiple awards would not be in the best interest of the
                 Government.

IV Special Requirements when Acquiring Advisory and Assistance Services

   When acquiring advisory and assistance services (AAS), the CO is required to make
   multiple awards whenever the requirement, including all optional periods of performance
   or quantities, exceeds three years and $10,000,000, unless the CO makes a written
   determination that (1) only one source can provide the services at the required quality
   level, (2) only one source can reasonably perform the work because the the SOW is
   unique or highly specialized or the tasks are integrally related, (3) only one offer is
   received although multiple sources were sought.

   FAR Subpart 37.201 defines AAS as: "Services provided under contract by
   nongovernmental sources to support or improve: organizational policy development;
   decision-making; management and administration; program and/or project management
   and administration; or research and development activities.  It can also mean the
   furnishing of professional advice or assistance rendered to improve the effectiveness of
   Federal management processes or procedures (including those of an engineering and
   technical nature)."
                                     2 -  20

-------
   At EPA, Indefinite Delivery form is combined with the Indefinite Quantity form to create
   an Indefinite Delivery/Indefinite Quantity form of contract.

   Orders (task orders for services and delivery orders for supplies/product) must be covered
   by contract's overall SOW, period of performance and be within the contract's stated
   maximum dollar value. Performance-based SOWs are required to be used whenever
   possible if the contract is for services.

V. Government-Wide Acquisition Contracts and Other Alternative Contractual Vehicles

   The Federal Acquisition Reform Act of 1996 and the Information Technology
   Management Reform Act of 1996 established relatively new contractual vehicles.  These
   contract vehicles offer more sources to satisfy requirements with shorter acquisition lead-
   times and more competitive prices. They offer a variety of products and services
   including information technology (IT) (formerly known as ADP), management assistance,
   and professional services.  So, besides EPA contracts, which should be a program
   office's first source for obtaining supplies and services, the following are  brief
   explanations of the other contract vehicles to consider.

   a.  Government-Wide Acquisition Contracts

       Government-wide Acquisition Contracts or GWACs are indefinite delivery/indefinite
       quantity (EDIQ) contracts for various IT resources negotiated, awarded and
       administered by one particular agency but available to other Federal agencies for
       purchases. Currently, only five agencies have the authority to establish a GWAC for
       IT.   GWACs are not subject to the requirements and limitations of the Economy Act,
       31 U.S.C., particularly the requirement to enter into an Inter- Agency  Agreement
       (IAG) before accessing one of them. Prior to accessing one of these contracts, the CO
       has to ensure that the subject GWAC is authentic, i.e., one administered by an agency
       with the required authority.

   b.  Multiple Award Schedule Contracts (Federal Supply Schedules)

       The General Services Administration (GSA) directs and manages the  Federal Supply
       Schedule program thereby providing agencies with a simplified process for obtaining
       commonly used commercial supplies and services at prices associated with volume
       buying. Nearly every commercial product and major service provider is available
       under a GSA schedule at volume buying prices. These MAS contracts essentially
       allow GSA to negotiate a single fair and reasonable price for a product or service
       thereby allowing any other Federal agency to merely issue a purchase order for that
       product or service. Orders placed against a MAS,  using the procedures outlined  in
       FAR Subpart 8.4 are considered to be issued using full and open competition.
       Accordingly, ordering offices need not  seek further competition, synopsize the
       requirement, make a separate determination of fair and reasonable pricing nor

                                      2  - 21

-------
    consider small business programs.  These contracts are accessible on the Internet by
    accessing GSA's Advantage Website at: http://www.fss.gsa.gov or through the
    Federal Technology Service website at: http://www.fts.gsa.gov/programs.html An
    IAG need not be established to use these contracts. GSA is adding new multiple
    award schedule services frequently, and continues to award new contracts under each
    schedule. Ordering information and a complete listing of GSA's schedules is located
    at GSA's Schedules E-Library at http://www.fss.gsa.gov/customers.dfm.  Ordering
    procedures for these schedule contracts are described in Procurement Policy Notice
    99-03 which is available at http://epawww.epa.gov/oamintra/policv/ppn.pdf.  No IAG
    is needed to use these contracts since Agency COs will place and administer the
    individual orders. The same operational divisions in Headquarters, Research Triangle
    Park or Cincinnati that provide the contract support for a particular program will also
    place the orders against the schedule contracts.
c.  Multi-Agency Contracts (MAC)

   A multi-agency contract or MAC is a task or delivery order contract established by
   one agency for use by other Government agencies to obtain supplies and services.
   These, however, are subject to the Economy Act and do require an IAG. The ability
   to use these vehicles are more limited than GWACs and MAS/FSS contracts.

d.  Blanket Purchase Agreements (BPA)

   A BPA is a simplified method of filling anticipated repetitive needs for supplies or
   services by establishing "charge accounts" with qualified sources of supply, i.e., MAS
   contracts. Although the negotiation of a BPA can be a relatively simple process, each
   BPA must contain:

   1.  A description of the supplier's agreement to furnish supplies or services.

   2.  A statement that the Government is obligated only to the extent of authorized
       purchases actually made under the BPA.

   3.  A statement that specifies the dollar limitation for each individual purchase under
       the BPA.

   4.  A statement that a list of individuals authorized to purchase under the BPA shall
       be furnished to the supplier by the CO.

   5.  A requirement that all shipments under the agreement shall be accompanied by
       delivery or sales slips containing specified minimum information; and

   6.  A statement relating to invoice procedures.

                                  2  - 22

-------
       CORs can access all EPA, GWAC, and MAS contracts at the OAM website. Access to
       the individual contracts or, where a hyperlink isn't available, the names and phone
       numbers of the individuals to contact can be found at the website. CORs can read in
       depth about GWACS and Other Alternative Contractual Vehicles at
       http://intranet.epa.gov/oamintra/policy

          Some specific EPA contract sites are:

          http://epawww.epa.gov/oamintra/hpod/iiasc
          http://epawww.epa.gov/oamintra/hpod/moses
          http://www.epa.gov/oamhopdl/oppts grD/0010150/index.htm
D. Key Players hi the Contracting Process: Their Roles and Responsibilities

   Contracting Officer (CO)
   Contracting Officer's Representative (COR)
   Auditor
   Contracting Officer

   I.   Contracting Officer

       The CO acts as an agent of the Federal Government with delegated procurement authority
       to enter into, administer, or terminate acquisitions and to make related determinations and
       findings. As such, a CO is the only individual to COs are the only people with
       authorization to make legally binding contractual agreements. A CO is the only
       individual who can:

          Sign a contract

       • Obligate Government funds

       • Issue WAs, TOs, orDOs

       • Modify or amend the terms of a contract, WA, TO,or DO

       • Terminate a contract, WA, TO or DO

       • Issue a stop-work order

       COs rely on the contribution of numerous audits, legal, and technical experts to assist
       them. Most COs choose to delegate limited authority for certain contract-related
                                         2 -  23

-------
decisions to designated individuals through the appointment process described in this
chapter. The Government-wide term for these individuals is a "Contracting Officer's
Representative," abbreviated as "COR."

Contracting Officer's Representative (COR)

The title "COR" is used to refer to personnel in acquisition positions, including, but not
limited to,  project officers (PO), task order project officers (TOPO), delivery order
project officers (DOPO), work assignment managers (WAM), and task monitors (TM).

A COR is an individual, appointed by the CO, with expertise in the area of the contracted
effort who possesses the necessary background to perform the basic duties established by
the Federal Acquisition Institute, as listed in the COR Workbook (The Workbook can be
read or downloaded at http://www.gsa.gOv/staff/v/training.htm.) For a more detailed
Agency-specific look at COR duties, see Chapter 7 of the Contracts Management Manual
at http://intranet.epa.gov/oamintra/policv. Generally, these duties include preparing
acquisition requirements, participating hi contractor selection, monitoring contract
performance or performing other specialized functions. Over the years, EPA has
developed a wide range of Agency-unique titles for CORs, such a PO, DOPO, TOPO,
WAM, etc. Regardless of the title or their varying roles, all these individuals are CORs.
The basic differences, which will be discussed later in this chapter, center on the
acquisition instrument the COR manages, whether it is a basic contract, a WA, TO or
DO.

COR duties are inherently governmental functions. For this reason, CORs must be
Federal Government employees. Senior Environmental Enrollees (SEE) and special
Government employees cannot function  as CORs.

CORs may perform only those functions delegated to them, and must not sign or modify
contracts or take any action reserved for  the CO, such as:

    Promise or authorize the contractor to perform work that is additional to or outside
    the scope of the contract, WA, DO, or TO.

    Conduct negotiations or bind the Government by making any written or oral
    agreements with contractors;

•  Directly or indirectly change the following:

    •   Pricing, cost or fee;

    •   Scope of the acquisition (contract, purchase order, W A, DO or TO)
                                  2 - 24

-------
   •   Delivery schedule or period of performance;

   •   Labor mix or level of effort; or

   •   Any terms or conditions of the acquisition.

• Redelegate or reassign their COR authority

• Authorize Government-furnished property, or its disposition; or

• Direct the contractor to start work or issue stop work orders.

a.  Types of CORs

    1.  Contract CORs (Project Officers)

       Traditionally, EPA has a multi-tiered structure for CORs.  The title "project
       officer," abbreviated as "PO" was used in the past to denote the CO's primary
       representative on a basic contract. Chapter 7 now changes the reference to the
       contract COR. As the CO's primary representative, the contract COR oversees the
       DOPO, TOPO, or WAM CORs. In some cases the contract COR may be
       responsible for both pre-award and post-award contract functions. Contract CORs
       may be located hi Headquarters, regional offices, laboratories or field offices. For
       contracts which cover more than one Agency organization or geographical
       location, the cognizant program office may elect to have contract CORs who
       perform contract-level oversight functions for a specific Agency component or
       location, such as Deputy, Zone, or Regional contract CORs. In some Agency
       organizations a "deputy contract COR" is actually an alternate contract COR.

       Bฎ" NOTE:   Assistance agreements also have POs. This role is unique from
                     that of the contract PO or contract COR. Questions concerning the
                     training requirements and the duties of assistance agreement POs
                     should be referred to the Office of Grants and Debarment.

       Due to the complexity and high dollar value of most Agency contracts, the
       contract COR function is extensive and complex. Contract CORs monitor the
       overall contract and oversee the work of CORs who are managing work ordered
       under the contract. For this reason, it is crucial that contract CORs be employees
       in good standing who have the requisite knowledge, skills, and abilities to perform
       their role and assist other CORs. A fundamental part of the COR function is to
       serve as a technical liaison for the CO, bridging the gap between
       acquisition/administrative and technical issues. In the case of Contract CORs, a
       large portion of their acquisition work may be managing the contract rather than
                                  2 - 25

-------
performing specialized, technical or scientific oversight.  For this reason, Contract
CORs are not required to be technical experts in science, engineering, etc.
However, Contract CORs must seek the advice of professionals when needed,
while keeping in mind that COR duties are inherently governmental functions and
decisions must not be made by contractors or parties outside the Government.

Some contract CORs responsibilities are for pre-award activities and others only
take on the function at the time of contract award and are contract COR
administrators. Chapter 7 of the Contracts Management Manual, Attachment A
describes in detail the possible contract COR duties.

A sample of pre-award duties include, but are not limited to:

•   Forecasting requirements

•   Putting together the Procurement Initiation Notice (PIN) package

•   Chairing the source selection panel to evaluate offers from contractors and
    make recommendations to the CO

•   Ensure available funding

•   Justifying the need for providing Government property

A sample of post-award duties include, but aren't limited to:

•   Post-award orientation including a kick-off or post-award conference

•   Establishing a filing system  to contain relevant documents including the
    contract, list of designated CORs, correspondence, technical direction (if
    allowed by the contract), deliverables reviewed and received, payment files,
    and staffing plan reviews submitted by the contractor in response to a WA,
    TO, or DO.

•   Many of the responsibilities of a contract COR remain the same no matter
    what the contract type. All contract CORs are responsible for the overall
    running of the contract, overseeing the procurement packages submitted for
    WAs, DOs, or TOs to make sure the package is current, accurate, and
    complete before forwarding them to the CO for action, and tracking orders
    placed under the contract.

Where the responsibilities of a contract COR differs based on the contract type
are:


                           2  - 26

-------
    •   A fixed-price contract, delivery or task order has no authority to give technical
       direction since the contract SOW covers the effort expected of the contractor
       and the Government pays the agreed upon fixed price upon delivery of the
       acceptable product or service.

    •   With a cost-reimbursement contract, the COR is responsible for
       recommending approval to reimburse the contractor, usually on a monthly
       basis, for the direct labor effort, indirect labor costs and other direct costs
       incurred the previous month based upon the COR's determination that
       sufficient progress has been made. If it's a completion form, the cost
       reimbursement is predicated on successful completion at the agreed upon cost
       and fee.  If it's a level-of-effort, then the contractor is paid based upon
       expending a certain amount of effort with no guarantee of product and fee is
       paid based upon hours delivered as a ratio of total hours promised for a
       particular period of performance. Because the SOW is more general in nature,
       authority to clarify ambiguities and provide technical input to the contractor is
       delegated to the COR by the CO.

    •   Under an IDIQ contract with work ordered using delivery or task orders, the
       contractor bills the Government for work by the order and not by the contract.
       The authority for any technical direction and approval of contractor
       reimbursement rests with the DOPO or TOPO COR.

    Depending on  the contract type and size, individuals require contractor
    performance after contract award using DOs, TOs, or WAs, and oversee the
    specific portion of work. These individuals are designated by the CO and the
    Agency as WAM, DOPO, or TOPO CORs. The DOPO, TOPO, or WAM COR
    works with the contract COR. A COR appointed to an indefinite-delivery type
    contract where contractor supplies are ordered uses DOs awarded by the CO.

2.  Delivery Order, Task Order or Assignment CORs.

    DOPO, WAM, or TOPO CORs are generally involved in post-award activities,
    overseeing a specific portion of work ordered under a contract, such as a delivery
    order, task order, or work assignment. Typically, the DOPO, TOPO, or WAM
    COR works  with the contract COR.  Over the years, the titles used for individuals
    performing contract administration functions have grown. Chapter 7 of the
    Contracts Management Manual has standardized the titles.

    DOPO, WAM, and TOPO CORs must be technically proficient in the work the
    contractor is performing. Being "technically proficient"  means having sufficient
    knowledge and experience to review deliverables, understand the labor categories
    involved in the work and the amount of hours needed to complete the work, for
                              2 - 27

-------
example. OAM recommends DOPO, WAM or TOPO CORs receive on-the-job
mentoring from senior CORs before monitoring an order or WA on their own.

   (a) Delivery Order Project Officer COR

      This is a COR appointed to an indefinite-delivery type contract where
      contractor supplies are ordered through "delivery orders" awarded by the
         CO.

   (b) Task Order Project Officer COR

      This is a COR appointed to an indefinite-delivery type contract where
      contractor tasks or services are ordered through "task orders" awarded by
      the CO.

   (c). Work Assignment Manager COR

      This is a COR appointed to a cost-reimbursement type contract where
      contractor services are ordered through "work assignments" issued by the
      CO.
                         2 - 28

-------
                                          EXHIBIT 2 -1

                          ROLES AND RESPONSIBILITIES MATRIX
      TASK
  DOPO/TOPO/WAM
           COR
  CONTRACT COR
   (Project Officer)
 CONTRACTING
     OFFICER
 1. Prepare Work
   Package
 2. Establish and
   Maintain
 Project Files
 3. Review
 Contractor's
   Technical and
 Cost Proposal or
   Work Plan
 4. Perform
 Technical
   Monitoring
Plan work
Prepare SOW
Develop cost estimate
Prepare forms
i.e., QAQP form)
Obtain necessary approvals
Acquire documents from PO
Set up files
Review Proposal/Work Plan
Recommend
approval/disapproval to
contract COR
Participate, as requested, in
negotiations with CO and
Contractor

Review progress reports
Review deliverables;
Recommend
approval/disapproval to
contract COR
Provide technical direction
Conduct progress meetings
with Contractor
Identify and discuss problems
with Contractor; alert contract
COR and CO
Review/edit SOW
Review cost estimate
Prepare COR designation
form and PR (as necessary)

Add accounting and other
data (as necessary)
Assemble WA/DO/TO
package and submit to CO
Provide documents to
WAM/DOPO/TOPO
Set up files; coordinate
 responsibilities for record-
keeping

Review Proposal/Work Plan
Recommend
approval/disapproval
to CO
Participate, as requested, in
negotiations with CO and
Contractor

Review progress reports
Approve deliverables
Provide technical direction
Discuss problems with
TOPO/DOPO/WAM and
Contractor; alert CO
Review package
Issue WA/
DO/TO
Obligate funds
Issue contract
modification (as
necessary)
Provide documents to
contract COR
Set up files; coordinate
responsibilities for
record-keeping

Formally approve
Proposal/Work Plan
Notify Contractor of
approval
Discuss problems with
contract COR and
Contractor as necessary
In some contracts, the Contracting Officer has delegated authority for approving a Contractor work plan to the Project Officer. In such cases the
Project Officer will notify the Contractor of approval.
                                              2  - 29

-------
                                 EXHIBIT 2 -1 (continues)
     TASK
  DOPO/TOPO/WAM
          COR
CONTRACT COR
 (Project Officer)
 CONTRACTING
     OFFICER
5. Perform
Financial
  Monitoring
6. Initiate
Amendments
and Modifications
7. IF AWARD
FEE CONTRACT
Prepare
Performance
Event Report
(PER)
Review financial progress
reports for WA/DO/TO
Review invoices; identify
questionable items. Attempt
to resolve questioned items
with Contractor. If
TOPO/DOPO approve
invoice. If suspending costs,
complete 1900-68 if
suspending costs.  Submit to
FMC-RTP.
If WAM, recommend
approval/ disapproval to
Contract COR
Identify and discuss need for
corrective actions  with
Contractor and contract COR
Forecast carryover funds
Determine need for
amendment to
W A/modification to TO/DO
for any increase/decrease of
hours, tasks, deliverables, or
change to schedule
Complete Performance Event
Report evaluating Contractor
performance for individual
TO/WA
Review financial progress
reports for WA/DO/TO
and overall contract (ceilings
on hours and costs)
If CR contract w/W As
Approve or take exception to
invoices.  Attempt to resolve
questioned items with
Contractor.  If unresolved,
complete 1900-68 if
suspending costs.  Indicate
account numbers and submit
to FMC-RTP.
Identify and discuss need for
corrective actions with
WAM/DOPO/TOPO and
Contractor
Submit request  for carryover
funds to
CO

Evaluate need for
amendment/modification;
submit request to CO
Determine need for
modification to overall
contract (addition of funds,
 change in key personnel);
submit request to CO
Compile Performance Event
Reports and prepare
summary for Performance
Evaluation Board (PEB)
Review financial
progress reports for
overall contract
Review all exceptions to
invoices; determine final
payment after
reviewing all data
Discuss need for
corrective actions as
necessary with contract
COR and second tier
CORs. Discuss any
need for corrective
action with Contractor
Transfer carryover
funds to
contract for next fiscal
year
Review amendment or
modification request;
Issue amendment or
DO/TO modification
Determine award fee
pool
Present PEB report to
Fee Determination
Official
Notify Contractor of
award fee amount
through contract
modification
                                            2 - 30

-------
                                EXHIBIT 2 -1 (continued)
     TASK
  DOPO/TOPO/WAM
          COR
 CONTRACT COR
   (Project Officer)
  CONTRACTING
     OFFICER
8. Monitor GFP
9. Close Out Work
  Assignment/Task
Order/Delivery
Order
Prepare Justification of Need
Ensure that (equipment is being
used in accordance with terms
of W A/DO/TO
Ensure return of GFP; notify
contract COR
Develop procedures for shared
equipment
Determine need to closeout
WA/TO/DO, i.e.; all tasks and
deliverables completed);
alert contract COR
Initiate new TO/WA/DO to
conclude activities begun under
WAfTO/DO from a prior year,
as necessary
                                               Review Justification of
                                               Need.
                                               Ensure that equipment is
                                               being used in accordance
                                               with terms of TO/DO/
                                               WA and contract
                                               Coordinate with Contractor,
                                               COand Property
                                               Management personnel on
                                               changes to GFP (i.e.,
                                               return or exchange of GFP)
                                               Develop procedures for
                                               shared
                                               equipment
Ensure all tasks and
deliverables have been
completed
Transfer remaining funds as
necessary
Initiate new WA/TO/DO to
conclude activities begun
under a WA/TO/DO from
a previous year, as
necessary
                         Issue contract
                         modification,
                         authorizing GFP
                         Coordinate with
                         Contractor, contract
                         COR and Property
                         Management personnel
                         in processing
                         changes to GFP
Process new
WA/TO/DO to conclude
activities begun under a
WA/TO/DOfrom a prior
    year, as necessary
                                           2  -  31

-------
2-32,

-------
                    MODULE 3: PERVASIVE CONTRACT ISSUES
A. INTRODUCTION

   Before the course covers the ordering of work under any contract, all CORs need to be aware
   of the issues that transcend all aspects of contracting, whether working on the basic contract
   itself or individual tasking documents such as work assignments (WA), Task Orders (TO), or
   Delivery Order (DO). These issues are Personal Services, Inherently Governmental
   Functions, and Conflict of Interest, Confidential Business Information, and Directed
   Subcontracting.  Because they impact almost all of the various levels of contract award and
   post-award administration, they are called "pervasive" issues.  Some of them involve
   activities which are explicitly prohibited by Federal regulations, while others involve
   situations which may give the appearance though not necessarily the fact of inappropriate
   actions.

   These pervasive issues were first identified in the early 1990's  when EPA's contract
   management practices came under intensive Congressional scrutiny. Among the continuing
   contract management problems Congress uncovered were personal services, contractors
   performing inherently governmental functions, conflicts of interest, and inadequate
   monitoring of contractor performance. Also, over the years, the EPA Office of the Inspector
   General (OIG) reviews have focused on these issues whih continue to crop up. This module
   will concentrate on personal services, inherently governmental functions, and conflicts of
   interest.  It will also address ways to avoid or mitigate these problems. Monitoring of
   contractor performance will be handled in in a later module. In addition, this module will
   cover issues of personal conflicts of interest, confidential business information, and
   protection of procurement information.

B. OBJECTIVES

   At the completion of this module, you will be able to:

   • Describe potential improprieties and vulnerabilities associated with personal services,
       inherently governmental functions, and conflicts of interest.

   • Identify ways to avoid or mitigate contracting improprieties and vulnerabilities associated
       with pervasive issues.

   • Identify potential personal conflicts of interest, how to handle confidential business
       information, and how to identify and protect procurement sensitive information.
                                         3  -  1

-------
C.  ISSUES INVOLVING CONTRACTOR SERVICES

   In this era of smaller government, the Agency has to rely on contractor support to accomplish
   its mission.  The rules that apply to Federal workers are very different from those which
   apply to contractor personnel.  Civil Service laws, established by Congress, govern the hiring,
   promoting, and supervision of Federal employees. Congress has separately enacted laws
   concerning the acquisition of contract services.

   I.  Personal Services

      a.  Definition and Examples

          Contract services can be either personal or nonpersonal. In a personal services
          contract there is an employer-employee relationship between the contractor's
          personnel and the Government. Personal services can only be awarded when
          specifically authorized by Congress, and the EPA has no authority to award these
          types of contracts.

          Personal services contract can result, however, when the Government assumes the
          right to instruct, supervise, or control contractor employees in how they perform their
          work. Even if the contract was awarded for nonpersonal services, the COR's actions
          in overseeing the contractor's work can give the appearance of personal services.
          Some examples of situations that create a personal services situation are:

          1.  EPA staff interviewing prospective contractor personnel or reviewing resumes
             before the contractor hires someone.

          2.  EPA staff providing daily instruction on how to conduct a task.

          3.  EPA staff evaluating the performance of contractor personnel.

          4.  EPA staff directing the hiring of a particular individual, consultant or
             subcontractor.

          5.  EPA staff telling the contractor how to accomplish the work rather than what
             work needs to be done.

          6.  The FAR and EPA Order 1901.1A provide six descriptive elements which can be
             used as a guide in assessing whether or not a contract, work assignment, task or
             delivery order involves personal services. These are:

             (a) Performance of work in a Government facility
                                         3  -  2

-------
      (b) Principal tools and equipment are furnished by the Government

      (c) Services are applied directly to the integral effort of the Agency's mission

      (d) Comparable services, meeting comparable needs, are performed by civil
          service employees

      (e) The need for the services can be reasonably expected to last beyond one year

      (f) The inherent nature of the service or manner in which it is provided
          reasonably requires, directly or indirectly, Government supervision of
          contractor employees in order to:

          •  Adequately protect the Government's interest;

          •  Retain control of the function involved; or

          •  Retain full personal responsibility for the function in a duly authorized
             Federal officer or employee.

   All of these elements need not be present to create an improper personal services
   situation; nor does having all of these elements present mean that an improper
   personal services relationship exists.  The fact that these elements are present does not
   create an illegal contractual relationship. In fact, the contractor may be working at a
   separate facility but the situation my still be one of personal services. The key
   element is whether the Government exercises continuous supervision and control over
   the contractor personnel on the  task. The importance of this issue is the fact that
   personal services contracts, work assignments, delivery or task orders are illegal and
   violate the laws and regulations covering the hiring, retaining, and paying of Federal
   employees. These contracts or tasking documents may give the appearance of
   violating the EPA's Federal personnel ceilings.  The best way to avoid the real or
   perceived personal services situations is to avoid:

   • Supervision/direction of contractor personnel
   • Shared office space and equipment
   • Involvement in contractor staffing, hiring, promoting, and firing

b. Appropriate Interaction with Contractors

   The heart of all contracts and tasking documents is the statement of work (SOW).
   The better written the SOW is in describing the key activities the contractor is to
   perform, the time frames or due dates for deliverables and key activities, and clearly
   defined evaluation criteria against which the contractor performance will be measured
                                   3  - 3

-------
(quality, timeliness, etc.), the less likely there will be a need for interaction with the
contractor personnel.  Interaction with the contractor must come from the individuals
who are clearly authorized in contract and tasking documents: the CO and the COR.
Other EPA employees have no authority to assign tasks, monitor performance, or
direct the contractor. The COR provides technical direction or direction to the
contractor's identified point of contact.  The CO is the only individual authorized to
provide guidance and make final decisions on contractual and legal issues; issue work
assignments, task and delivery orders, and any changes to the contract, work
assignment, task or delivery order.  If the COR believes that a change is needed to a
contract, task order, delivery order or work assignment, the COR must notify the CO
immediately. If the CO agrees and determines it appropriate, the CO is the one who
can modify contract, task or delivery order; or amend the work assignment.

It's very important for Agency employees to maintain an "arms length" relationship
with contractor personnel, and conduct interaction on a business or professional basis.

When conducting contract management activities, a COR must avoid:

1.   Intervening in a contractor's hiring, firing, or promoting of contractor staff;
    requesting particular contractor employees be staffed on projects; or rewarding
    individual contractor personnel. Evaluation of performance, whether positive or
    negative, must be handled through the COR to the contractor point(s) of contact.
   That evaluation must be based upon the timeliness or quality of the services or
   deliverables and not on the performance of contractor personnel.

2.  Asking contractors to hire in a "holding pattern," candidates for Agency positions,
   pending completion of the competitive civil service procedures.

3.  Requiring or permitting contractors to purchaser supplies or services for the use of
    Agency personnel unless specifically authorized by the contract or individuals
    with the  designated authority to authorize such purchases.

4.   Inviting contractor staff to serve on Agency committees,  attend Agency staff
    meetings and holiday parties.

5.   Allowing contractor personnel to attend Agency meetings or conferences
    (including conference calls) unless their attendance is required for contract
    performance.  If mandated by the SOW, attendance must be restricted to specific
    tasks as defined in the SOW and limited to the portion of the session in which the
   contractor's performance is directly required.  Contractor personnel are generally
   used in areas of conference support from manning registration tables to recording
   minutes of general and break-out sessions.
                               3  - 4

-------
   6.  Allowing contractor personnel to be official representatives of the Agency.
       Contractor participation is generally appropriate when the contractor is serving
       an advisory or resource capacity, or as facilitators for EPA meetings.
in
c.  Safeguards When Interacting With On-Site Contractors

   Whenever possible the Agency tries to physically locate on-site contractors in areas
   separate from Agency personnel whenever possible. Those areas should be clearly
   identified as occupied by contractor personnel.

   Contractor personnel should have distinctive identification badges to distinguish them
   at a glance as contractor support personnel. All contracts that require on-site
   contractor support should include requirements for contractor personnel to identify
   themselves as such when answering telephones, using Agency electronic mail,
   attending meetings, performing on-site tasks, etc., in order to clarify situations where
   contractor personnel could be mistaken for Agency employees.

   If Agency and Contractor personnel need to share equipment for economic and/or
   space reasons, Agency personnel need to set schedules and priorities for its use.

   Ensure that contractor personnel do not have unlimited access to Agency office areas.

d.  Other Areas of Special Concern

   The Agency should never pay for training for contractor personnel at commercially
   available courses. A contractor is responsible for providing competent, well-trained
   staff with up-to-date knowledge in the common software programs necessary for
   performance to meet the expertise required by its contract. Contractors generally have
   a training program  as part of their employee compensation and retention fringe benefit
   program and these costs are charged to an overhead account. The only exception for
   paid training should be for specialized, Agency-specific training which cannot be
   obtained from a commercial source.  Prior CO approval is mandatory in all cases of
   Agency paid-for training.

   Agency employees should not provide access to facsimile machines, photocopiers,
   computers, or file rooms where the Agency receives, copies, or stores sensitive or
   confidential information unless appropriate safeguards are in place to ensure adequate
   protection of the information. Contractors shouldn't have access to confidential or
   proprietary business information, Privacy Act protected material or other sensitive
   data under any circumstances unless there is authority for such disclosures and
   management controls are in place and have been followed. Nor should contractors be
   routinely provided  with copies of internal Agency administrative documents or other
   correspondence, except when it affects the conditions in which on-site  contractor
   personnel are working (e.g., repair work or building closings), or are necessary for
   contract performance (e.g., hotline support).

                                    3  - 5

-------
Inherently Governmental Functions and Vulnerable/Sensitive Services

a.  Background

   In 1990, as a direct result of Congressional Hearings, the Agency agreed to define
   those functions which were considered an integral, inherent part of the Agency
   mission and therefore must be performed by Agency personnel. In 1991, the Agency
   promulgated an EPA Order that defined 17 functions as inherently Governmental and
   others that, while not required to be performed by civil servants, were so tied to
   Agency functions that they were deemed to create a situation where the contractor's
   work could be seen as inherently Governmental in nature unless the Agency could
   demonstrate management controls that inserted Agency personnel in the final
   decision-making process.  These later functions were called sensitive and vulnerable
   services. The EPA Order was later used by the Office of Federal Procurement Policy
   (OFPP) as the basis of its own policy letter. The OFPP policy letter was broader
   because it covered all Executive Departments and Agencies.  The policy was
   subsequently formalized into the FAR at Part 7.

b. Inherently Governmental Functions

   FAR 37.102(b) states that in no event may a contract be awarded for the performance
   of an inherently governmental function. FAR Part 7 defines inherently governmental
   functions  as those "being so intimately related to the public interest as to mandate
   performance only by Federal employees." When contracting for services, CORs must
   ensure any final Agency action reflects the informed, independent judgement of
   Agency officials. Contractors must not perform Inherently Governmental Functions,
   involving:

    1.  exercising discretion in applying Government Authority,

   2.  making of value judgements in making decisions for the Government, or

   3.  interpreting and executing of the laws of the United States.

   The following list of inherently governmental functions is from FAR 7.503.
   Contractors must not  perform any of these functions. CORs  must carefully
   review every contract, DO, TO, or WA SOW to ensure that no inherently
   governmental functions are included or contracted out. (NOTE: The numbering
   system is directly from the FAR.)

       (1)    The direct conduct of criminal investigations.

       (2)    The control, prosecutions and performance of adjudicatory functions other
                                  3 - 6

-------
       than those relating to arbitration or other methods of alternate dispute
       resolution.

(3)     The command military forces, especially the leadership of military
       personnel who are members of combat, combat support or combat service
       support role.

(4)     The conduct of foreign relations and the determination of foreign policy.

(5)     The determination of Agency policy, such as determining the content and
       application of regulations, among other things.

(6)     The determination of Federal program priorities for budget requests.

(7)     The direction and control of Federal employees.

(8)     The direction and control of intelligence and counterintelligence
       operations.

(9)     The selection or non-selection of individuals for Federal Government
       employment, including interviewing or hiring of individuals.

(10)   The approval of position descriptions and performance standards for
       Federal employees.

(11)   The determination of what Government property is to be disposed of and
       on what terms (although an agency may give contractors authority to
       dispose of property at prices within specified ranges and subject to other
       reasonable conditions deemed appropriate by the agency);

(12)   In Federal procurement activities with respect to prime contracts—

       (i)    Determining what supplies or services are to be acquired by the
             Government (although an agency may give contractors authority to
             acquire supplies at prices within specified ranges and subject to
             other reasonable conditions deemed appropriate by the agency),

       (ii)   Participating as a voting member on a Technical Evaluation Panel
             (TEP) or attending TEPs,

       (iii)   Approving any contractual documents, to include documents
             defining requirements, incentive plans, and evaluation criteria.
              Includes preparing statements of work, work assignments,
                            3 - 7

-------
              technical direction documents, delivery orders, or any other work
              issuance document under a contract that the contractor is
              performing or may perform,

       (iv)    Awarding contracts,

       (v)    Administering contracts (including ordering changes in contract
              performance or contract quantities, taking action based on
              evaluations of contractor performance, and accepting or rejecting
              contractor products or services),

       (vi)    Terminating contracts,

       (vii)   Determining whether contractor costs are reasonable, allocable,
              and allowable, including reviewing vouchers and invoices to
              determine reasonableness of costs, hours, and work performed,
              and,

       (viii)  Participating as a voting member on a Performance Evaluation
              Board (PEB), participating in and/or attending PEBs. Includes the
              actual preparation of Award Fee Plans and preparing Award Fee
              Letters (including typing).

(13)   The approval of Agency responses to Freedom of Information Act (FOIA)
       requests (other than routine responses that, because of statute, regulation,
       or other Agency policy, do not require the exercise of judgement in
       determining whether documents are to be released or withheld), and the
       approval of Agency responses to the administrative appeals of denials of
       FOIA requests.

(14)   The conduct of administrative hearings to determine the eligibility of any
       person for a security clearance, or involving actions that affect matters of
       personal reputation or eligibility to participate in Government programs.

(IS)   The approval of Federal licensing actions and inspections.

(16)   The determination of budget policy, guidance and strategy.

(17)   The collection, control, and disbursemer' of fees, royalties, duties, fines,
       taxes and other public funds, unless authorized by statute, such as 31
       U.S.C. 952 (relating to private collection contractors) and 31 U.S.C. 3718
       (relating to private attorney collection services), but not including-
                            3 - 8

-------
              (i) Collection of fees, fines, penalties, costs or other charges from visitors
                 or patrons of mess halls, post or base exchange concessions, national
                 parks, and similar entities or activities, or from the persons, where the
                 amount to be collected is easily calculated or predetermined and the
                 funds collected can be easily controlled using standard cash
                 management techniques; and

              (ii) Routine voucher and invoice examination.

       (18)   The control of the treasury accounts.

       (19)   The administration of public trusts.

       (20)   The drafting of Congressional testimony, responses to Congressional
              correspondence, (includes briefing materials to congressional staffers) or
              Agency responses to audit reports from the Inspector General, General
              Accounting Office, or other auditing entities.

c  Sensitive/Vulnerable Services

   "Sensitive/vulnerable services" is the term the Government uses to denote services
   which may approach being in the inherently governmental category because of the
   nature of the function, the manner in which the contractor performs the contract, or
   the manner in which the Agency administers the contract. Unlike inherently
   governmental functions, contractors may perform sensitive/vulnerable services
   provided the appropriate management controls are in place.

    1.  Approval Levels for Contracts

       Contracts involving the sensitive/vulnerable services require special approval as
       indicated below:

       Estimated Cost             Approving Official

       $25 million and above       Deputy Assistant Administrator, OARM

       $5 million to $24,999,999   Director, OAM

       $ 100,001 to $4,999,999     OAM Division Director

       $ 100,000 and under        In accordance with program office procedures
                                   3  - 9

-------
    Generally, approval is obtained for the contract as a whole at the pre-award stage.
    However, if the approval was not provided at that time, or if the need for these
    activities occurs after the contract is awarded, then the approval must be obtained
    for an individual work assignment requiring these services.

2.  Sensitive/vulnerable services (Note: The numbering system is directly from FAR
    7.503.)

    The following list, while not considered to be inherently Governmental, are
    services and actions that approach being in the category because of the nature of
    the function, the manner in which the Contractor performs, or the manner in
    which the Government administers Contractor performance.

       (1)    Services that involve or relate to budget preparation, including
              workload modeling, fact finding, efficiency studies, and should-cost
              analyses, etc.

       (2)    Services that involve or relate to reorganization and planning activities.

       (3)    Services that involve or relate to analyses, feasibility studies, and
              strategy options to be used by Agency personnel in developing policy.

       (4)    Services that involve or relate to the development of regulations.

       (5)    Services that involve or relate to the evaluation of another contractor's
              performance.

       (6)    Services in support of acquisition planning.

       (7)    Contractors providing assistance in contract management (such as
              where the contractor might influence official evaluations of other
              contractors).

       (8)    Contractors providing technical evaluation of contract proposals.

       (9)    Contractors providing assistance in the development of Statements  of
              Work.

       (10)    Contractors providing support in preparing responses to Freedom of
              Information Act requests.

       (11)    Contractors working in any situation that permits or might permit them
              to gain access to confidential business information and/or any other
              sensitive information (other than situations covered by the Defense
              Industrial Security Program described in FAR 4.402 (b)).

                               3 - 10

-------
   (12)   Contractors providing information regarding agency policies or
          regulations, such as attending conferences on behalf of an agency,
          conducting community relations campaigns, or conducting agency
          training courses.

   (13)   Contractors participating in any situation where it might be assumed
          that they are Agency employees or representatives.

   (14)   Contractors participating as technical advisors to a source selection
          board or participating as voting or nonvoting members of a source
          evaluation board.

   (15)   Contractors serving as arbitrators or providing alternative methods of
          dispute resolution.

   (16)   Contractors constructing buildings or structures intended to be secure
          from electronic eavesdropping or other penetration by foreign
          governments.

   (17)   Contractors providing inspection services.

   (18)   Contractors providing legal advice and interpretations of regulations
          and statutes to Government officials.

   (19)   Contractors providing special non-law enforcement, security activities
          that do not directly involve criminal investigations, such as prisoner
          detention or transport and non-military national security details.

These functions require close scrutiny from the COR and appropriate written
management controls to ensure adequate Government oversight of contractor
services. Management controls for sensitive/vulnerable services must include
appropriate contract clauses addressing conflict of interest, confidential business
information and proper identification of contractor employees. Attachment D to
Chapter 2 of the Contracts Management Manual discusses management controls.

Even if only preliminary research or data gathering is performed by the contractor,
it must be carefully examined by EPA personnel for any contractor partiality,
favoritism, and conflict of interest, before its incorporation in Agency matters. In
all cases, CORs must maintain a clear record of their review the contractor's work
and that final decisions were made by Agency personnel. Such records of review
could include notes from reviews of draft and final documents by Agency
personnel, minutes from progress meetings with contractors, reports from Agency
peer and board reviews, and so forth. The COR has final responsibility for the
implementation and oversight of these controls.

                            3 - 11

-------
         In areas relating to policy development, possible management controls are listed
         in Office of Federal Procurement Policy Letter 92-1, including having the
         contractor:

         •  Submit reports that contain recommendations and explain and rank policy or
             action alternatives, if any;

         •  Describe what procedures they used to arrive at their recommendations;

         •  Summarize the substance of their deliberations;

         •  Report any dissenting views;

         •  List sources relied upon;

         •  Ensure that the methods and considerations upon which recommendations are
             based are clear, and

         •  Mark all contractor data, documents or reports as contractor products.

m. HANDLING CONFIDENTIAL BUSINESS INFORMATION

   a. Confidential Business Information (CBI)

       1. CBI is defined as:

          a.  any information that pertains to the interests of a business,

         b. developed or acquired by that business,

          c. that was submitted by an individual, partnership, corporation, association, or
             other public or private organization or legal entity,

          d. which constitutes a "trade secret," or,

          e. which constitutes commercial and financial information that is privileged or
             confidential.

                 ซ• The definition of a "trade secret," under the Freedom of Information
                    Act, is a secret, commercially valuable plan, formula, process, or
                    devise that is used for the making, preparing, compounding, or
                    processing of trade commodities where there is a direct relationship
                    between the trade secret and the productive process.
                                     3 - 12

-------
2. Some examples of CBI include (but are not limited to):

   a.  Identities of chemicals;

   b.  Identities of pesticide inerts;

   c.  The fact that a company is manufacturing, importing, processing, etc. a
       particular chemical;

   d.  Production volumes of chemicals or amount stored at a company facility; and

   e.  Industrial process information, etc.

3. CBI contained in contract proposals and contracts includes (but is not limited to):

   a.  Any financial data regarding a company, e.g., accounting methods, financial
       structure, assets, profits, taxes, etc.;

   b.  Technical proposals, plans to manage the contract, or work plans;

   c.  Contractor experience, expertise, and past performance;

   d.  Contractor employee identities, experience and salaries;
   e.  Identity of consultants or subcontractors; and

    f.  Invoices and monthly progress reports, including:

       (1) Direct labor rates,
       (2) Indirect rates, overhead, general and administrative, fringe benefits,
       (3) Other contractor charges, and
       (4) Fee or profit.

    Once a business confidentiality claim is made, EPA cannot release the
    information and must protect the information from unauthorized disclosure. The
    Trade Secrets Act prohibits disclosure of trade secrets or other confidential
    information.  Unauthorized disclosure of CBI is a criminal offence punishable
    by a fine, incarceration, and administrative personnel action.

 4.  When the Contractor will Have Access to CBI

    In some instances an Agency contractor may need access to CBI for contract
    performance.  Prior to contract award, the CO and COR must decide if this will be
    the case. If so, then the appropriate clauses must be inserted into the contract.
    During contract administration, the COR must ensure the release of sensitive

                               3  -  13

-------
information to the contractor is authorized and accomplished in accordance with
all relevant contract clauses and legal requirements.

Before you allow a contractor to have access to CBI, the COR, whether contract,
TOPO, DOPO or WAM COR, must make sure that:

(a) The contract has the required CBI clauses;

(b) The information is being collected under an appropriate statutory authority,
   e.g., the Toxic Substances Control Act;

(c) The Program Office has a written determination that the contractor's access to
   CBI is necessary for contract performance; and

(d) The Agency has notified all entities whose CBI will be seen by another
   Contractor by publishing a notice in the Federal Register, or, if it is during the
   pre-award phase and the Agency is using a contractor to assist in the
   evaluation, that the name of the assisting contractor is clearly stated in the
   Request for Proposals/solicitation.

(e) Appropriate safeguards are in place to track and protect CBI in the
   contractor's possession. These safeguards may include requiring the
   contractor to:

   (1) Follow Agency CBI security procedures (e.g., the FDFRA Information
      Security Manual);

   (2) Submit a CBI security plan to be approved by the COR;

   (3) Brief contract employees on Agency requirements for handling CBI; and

   (4) Submit non-disclosure statements from contractor employees who access
      CBL

      •*• NOTE: Several Agency program offices have instituted procedures for
      the protection of CBI pursuant to statutes they administer, including:

      (i)     Clear Air Act
      (ii)    Emergency Planning and Community Right-to-Know Act
             (EPCRA)
      (iii)   Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
      (iv)    Resource Conservation and Recovery Act (RCRA)
      (v)    Toxic Substances Control Act (TSCA)
                          3 -  14

-------
          It's a good idea to know who in your office who oversees the collection and
          release of CBI and to seek help from this person on CBI-related issues.

IV.    Conflict of Interest (COI)

   There are two types of COI:

   a.  A personal COI may occur when in an individual is in a position of trust which
       requires the exercise of judgement on behalf of others (businesses, institutions, or
       individuals) and also has interests or obligations which may interfere with that
       judgement. In these cases a person must openly either acknowledge the conflict or
       avoid it. For example, if an engineer, who works part-time for a design firm, is hired
       as a consultant by a city to review design plans submitted to the municipality for
       approval, it would be a conflict for her to review plans submitted to the city by her
       part-time employer.

   b.  In contracts on the Federal level, the scenario would be the same.  Thus, EPA must
       ensure its contractors do not have any actual or apparent conflicts of interest.
       According to the Federal Acquisition Regulation (FAR), an organizational conflict of
       interest (OCI) means that, because of other activities or relationships:

       1. a firm is unable or potentially unable to render impartial advice or assistance to
          the Government,

       2. a firm's objectivity in performing the contract work is or might be otherwise
          impaired; or

       3. a firm has an unfair competitive advantage.

    c.  Agency Policy on COI

       Agency policy is to avoid, neutralize, or mitigate organizational conflicts of interest.
       A*COI situation may arise for a firm while performing the contract or when the nature
       of the work to be performed on the contract creates an actual or potential COI on a
       future acquisition. If EPA is unable to neutralize or mitigate the effects of a potential
       conflict of interest, the Agency will disqualify the prospective contractor before
       contract award or will terminate the contract when potential or actual conflicts are
       identified after award.

    d. Examples of how COI may arise

        1.  A firm develops a treatment plan for a waste site and gets the contract to
           implement the plan.
                                       3 - 15

-------
   2.  A firm, which is a subsidiary of a software company,  supports the technical
       evaluation process for an Agency information technology contract.

   3.  A firm performs quality assurance reviews on laboratory support contractors and
       later competes against those firms.

   4.  A firm writes a software program for the Agency then operates and maintains the
       program.

   5.  A firm performing Superfund response action work also supports Superfund
       policy development.

   6.  A firm is working both for a potentially responsible party (polluter) and for EPA
       at the waste site.

   7.  An affiliate of the firm has a EPA contract reviewing pesticide permits while the
       parent company is a pesticide manufacturer.

   In some cases, a firm with one of the conflicts listed above may not be eligible to be
   awarded an Agency contract. In other cases measures may be taken to avoid,
   neutralize or mitigate the conflict to a point where the contractor will be able to
   perform the services. The course of action will ultimately be the CO's decision.

e.  COI Responsibilities

   Refer questions about the enforcement of COI provisions and clauses to the CO.
   CO's are the final decision-makers on whether a COI exists and how, or  if, the COI
   can be avoided, neutralized or mitigated. The CO will coordinate with the
   appropriate parties to resolve any issues. The COR can assist the CO with
   understanding the work the contractor is performing and other practical issues relating
   to a possible conflict.

   Most Agency service contracts contain COI clauses that require the Contractor to
   notify the CO  of a COI prior to beginning work. In addition, Contractors may be
   required by a contract clause to certify within 20 days of work assignment issuance
   that there are no potential COIs. While these provisions are in place, a lot of
   information about potential COIs comes from program office personnel who are
   familiar with the contractor's operations.  CORs should trust their instincts (they're
   historically right) and report any questionable areas to the CO.
                                  3 - 16

-------
V. DIRECTED SUBCONTRACTING

   a.  Policy

       To the maximum extent practicable, the prime contractor should compete
       subcontracts. Agency employees must not interfere in this process by directing the
       prime on when or to whom it should subcontract.  Directing the prime contractor to
       use a certain subcontractor or directing that any portion of the contract work should
       be performed by subcontracting is the improper practice.

       CORs must not draft specifications or statements of work which contain unnecessary
       restrictions intended to direct or force the prime to use a particular subcontractor. The
       FAR requires us to promote full and open competition and to only include restrictive
       conditions to the extent necessary to satisfy the needs of the Government. Violation
       of this regulation can result in disciplinary action against the employee responsible.

       Before awarding a subcontract, prime contractors must obtain the consent of the CO.
       The CO reviews the contractor's request and supporting data and considers a variety
       of factors listed in FAR 44.202-2 before giving consent to subcontract. The COR also
       reviews the contractor's request and comments to the CO on the technical need and
       appropriateness of the supplies or services, the reasonableness of the subcontract
       estimate in terms of the level of effort, and types and quantities of proposed other
       direct costs; location, duration, number of travelers and purpose of proposed travel;
       skill level, labor mix, and direct labor hours to be expended; and the capabilities of
       the proposed subcontractor.  The  COR must document the file when reviewing the
       prime contractor's request to subcontract.

          •s"  A "Team Subcontractor" is a subcontractor that was either approved by the
              CO at the time of contract award or later became part of the team by specific
              written  CO consent.  Once consented to, prime contractors need no further
              approval to use the team subcontractor for that specific contract,  work
              assignment, delivery  or task order. (Some contracts may have specific work
              plan approval procedures  involving subcontractors which must be followed.
              The COR must read the contract to ascertain the proper procedures.)

       Additional information on the proper use of subcontractors can be found in Chapter
       18 of the Contracts  Management  Manual.

   b.  Interaction with Subcontractors

       On many Agency contracts the contractor (the "prime contractor") will subcontract
       work to one or more subcontractors or consultants. When administering contracts
       involving subcontractors it is important to remember there is no legal relationship
       ("privity of contract") between the Agency and subcontractors. Chapter  18 of the

                                     3 -  17

-------
Contracts Management Manual forbids:

1. Directing the prime contractor to use a certain subcontractor or consultant. The
   mere suggestion of a firm is improper.

2. Directing that any portion of the work should be performed by subcontracting,
   rather than by the prime contractor.

3. Providing technical direction to a subcontractor without the knowledge of the
   prime contractor.

4. Directly monitoring a subcontractor's technical performance and financial
   expenditures to the exclusion of the prime contractor. Any technical or financial
   subcontract problem must be brought to the prime contractor's attention and
   documented in the contract file. The prime contractor is responsible for resolving
   these problems.

5. Directing the contractor to subcontract beyond the available appropriation (e.g., if
   funds expire October 1st, directing the contractor to work until January 1st) or at
   the end of the contract period of performance (e.g.,  if the contract ends September
   30*, directing the contractor to work until December 31st).
                               3  -  18

-------
                                    Exhibit 3-1

 CHECKLIST FOR AVOIDING THE EXISTENCE OR APPEARANCE OF PERSONAL
             SERVICES, INHERENT GOVERNMENT FUNCTIONS, OR
                      SENSITIVE/VULNERABLE SERVICES
A. Supervision/Direction of Contractors

1. The WA/TO/DO SOW is specific, completion oriented, with clearly        (   )
   defined tasks and deliverables. They do not simply parrot
   the language of the statement of work of the overall contract.

 2. Contractor work plans are detailed, indicating how the work would         (   )
   be accomplished.

 3. Staff assigned to monitor the WA/TO/DO is formally certified             (   )
   as a COR.

 4. Technical direction is given to the Contractor only by the                  (   )
   authorized COR.

 5. Technical direction given verbally is subsequently documented.            (   )

 6. Technical direction is given only to the Contractor Project Manager        (   )
   or other authorized point(s) of contact.

 7. Where technical directives are used in lieu of WAs, TOs or DOs,            (   )
   they require that work plans be submitted. Such work plans are
   forwarded to the Contracting Office.

 8. Contractor staff do not serve as members of EPA committees.              (    )
 9. Contractor staff do not regularly attend EPA planning and staff             (   )
    meetings; attendance is by invitation only and for specific purposes,
    such as to give a presentation.

 10. Contractor staff do not "represent" EPA organizations or staff.              (   )

 11. Contractor and EPA staff do not serve on mixed "science teams."           (   )
                                       3 - 19

-------
                                Exhibit 3-1 (Continued)

12. EPA staff do not request Contractor staff to purchase supplies or            (   )
   services for use by EPA employees, unless specifically required
   by the contract.

13. EPA staff prepare appropriate documentation on meetings, trips and         (   )
   telephone conversations related to the contract.

B. Identification of Contractor Staff

1. Contractor and EPA staff wear their badges visibly, clearly                  (   )
   identifying their organization.

2. Contractor staff identify the selves as Contractor employees when           (   )
   they answer the phone at EPA sites.

3. Contractor staff identify their organization when they place                 (   )
   calls to an EPA office or laboratory or other establishment
   when conducting business related to the contract

C. Shared Office Space and Equipment

1. Contractor office space is segregated from EPA office space and            (   )
   is properly labeled.

2. To the extent practical, Contractor and EPA staff do not use shared          (   )
   laboratory space or equipment in the same time period. Schedules and
   priorities are established for the use of common space and equipment.

3. Contractor staff do not directly assist principal investigators                 (   )
   in conducting research at an Agency laboratory or research facility.
   (An example would be assigning specific technicians to support
   specific ORD researchers.)

D. EPA Involvement in Contractor Staff Selection and Appraisal

1. EPA staff do not forward resumes received by EPA to the Contractor        (   )
   for potential employment.

2. EPA staff do not make hiring, firing or promotion recommendations         (   )
   to the Contractor.
                                        3 - 20

-------
                                 Exhibit 3-1 (continued)

3. EPA staff do not notify the Contractor of cash awards to EPA personnel.      (    )

4. EPA staff do not provide feedback to the Contractor on the                  (    )
   performance of individual Contractor employees.

5. The award fee process is the primary vehicle used to provide feedback        (    )
   to the Contractor on CPAF contracts. On other contracts, feedback is
   given by the contract COR to the individual designated by the Contractor,
   and it focuses on the quality of services and deliverables, not individual
   employees.

6. EPA staff do not direct the Contractor to use particular staff                 (    )
   in conducting the work.

7. EPA staff do not direct the Contractor to retain or to use a                   (    )
   particular subcontractor or consultant in conducting the work.

8. EPA staff do not hold open seminars at which prospective Contractor         (    )
   researchers give presentations as a basis for hiring.  EPA staff
   do not provide  feedback to Contractor on such candidates.

9. EPA staff do not direct the Contractor to hire hi a holding pattern,            (    )
   candidates for Agency positions, pending completion of competitive
   civil service procedures.

E. Provision  of Administrative Support Services

1. EPA staff do not give administrative assignments (e-g.., typing,               (    )
   editing) directly to individual Contractor support staff.

2. Work request forms are used for requesting administrative support           (    )
   services from the Contractor.

3. Written protocols are established for the use of administrative               (    )
   support services.
                                         3  -  21

-------
                                       Exhibit 3-2
        CHECKLIST FOR RECOGNIZING POTENTIAL CONFLICTS OF INTEREST

Consider the following circumstances when planning or managing a contract. If the answer to
any of these is "yes," discuss the situation with your CO or, if this is after contract award, the
contract COR.
YES   NO
( )    (  )    Can the potential contractor perform under the contract in such a way as to devise
             solutions or make recommendations that would influence the award of future
             contracts to that contractor?
( )    (  )    If the requirement is for support services (such as engineering or technical
              support), were any of the potential offerers involved in developing the system
              design specifications or in the production of the system?
( )    ( )    Has the potential offerer participated in earlier work involving the same program
              or activity that is the subject of the present contract wherein the offerer had access
              to source selection or proprietary information not available to other offerers
              competing for the contract?
( )    ( )    Will the contractor be evaluating a competitor's work?
( )    ( )    Does me contract allow the contractor to accept its own products or activities on
              behalf of the Government?
(  )    (  )    Will the work, under this contract, put the contractor in a position to influence
              Government decision-making, e.g., developing regulations, that will affect the
              contractor's current or future business?
(  )    ( )    Will the work under this contract affect the interests of the contractor's other
              clients?
(  )    ( )    Are any of the potential offerers, or their personnel who will perform the contract,
              former Agency officials who - while employed by the Agency - personally and
              substantially participated in (a) the development of the requirement for, or (b) the
              procurement of, these services?
                                         3 - 22

-------
                               Practical Exercise # 1
Based on the guidance in this chapter, decide whether the listed activities are 1) forbidden by
statute, regulation or policy or 2) an area of vulnerability needing management control.  If
applicable, specify the control(s) needed.  Assume the "you" in each case is the cognizant
COR.
     1.   You show one of the contractor employee's resumes to your husband who is
         starting a new business.

     2.   Under your work assignment, the contractor has access to EPA data bases
         containing CBI of other Contractors.

     3.   Your contractor is writing construction specifications for a state of the art water
         treatment facility which EPA will fund through a grant.
     4.   After contract award, you release the results of the Technical Evaluation Panel to
         one of the unsuccessful firms.
     5.   On your deli very order the contractor provides support on developing regulations
         that will affect the interests of the contractor's other clients.
     6.   You provide the contractor Agency funding levels and other budget information so
         that the firm can determine budget priorities for your program office.

     7.   Under a hotline support contract, your contractor will answer questions from the
         public on methane recovery from ruminant livestock.
                                      3 - 23

-------
                                 Practical Exercise # 2
Review the following SOW and identify any areas indicating personal services language,
inherent Government functions, sensitive and vulnerable services, potential conflict of interest,
directed subcontracting, inappropriate technical direction, and confidential business information:
                                TASK ORDER #01-03

Title:   Workshop on Effects of Dietary Metal Ingestion by Fish and Other Acquatic Organisms

Period of Performance: March 1,20xx to August 31,20xx

EPA Contract COR: Marilyn Snow (202) 555-1234
            E-Mail: snow.marilyn@epa.gov

EPA Task Order Project Officer Tom Sleet (202) 555-5678
            E-Mail: sleet.tom@epa.gov

Statement of Work

1.  Background

    The purpose of this task order is to have the Contractor conduct a two-day workshop,
    including all logistical support, on the subject of dietary exposure of metals on fish and other
    acquatic organisms. The workshop is in support of the Agency's efforts to develop water and
    sediment quality criteria, under the authority of the Clean Water Act, that are protective of
    aquatic life. The Agency is required to issue a revised regulation on water and sediment
    quality criteria by a court-ordered date of November 30,2004.  This workshop will bring
    together EPA personnel with a small group (10-12) noted technical experts currently
    involved in research on the potential effects of dietary exposure to the most common cationic
    metals on fish and other acquatic organisms.  It will consist of presentations and follow-up
    discussions.

2.  Tasks

    The contractor shall provide personnel and supplies required to conduct a two-day workshop
    on May  5-6,20xx to define the current understanding of the effects of dietary exposure to
    metals on fish and other acquatic organisms.  The workshop shall be held at a Disney World
    Hotel in Orlando, Florida. The workshop shall be performed in accordance with the contract
    clause H.20 of the contract "EPA Sponsored Meetings, Workshops, and Conferences, except,
    where there is a conflict between the contract clause and this task order, the requirements of
    the task order shall override.
                                        3  - 24

-------
A. The Contractor shall conduct a small technical workshop of scientists whose expertise
   and/or current research is relevant to the evaluation of dietary metal exposure as a
   significant risk to fish and other aquatic organisms. The term "metals" is considered to
   include most common cationic metals (e.g., copper, cadmium, lead, zinc, nickel) but to
   specifically exclude mercury and selenium for which risks from the dietary pathway is
   already documented.  EPA will provide the Contractor with a list of speakers to invite to
   the workshop. The Contractor will determine the availability of each individual on the
   list and provide that information to the TOPO. After the TOPO has approved the list, the
   contractor will enter into consultant agreements with each of the designated invitees and
   bill their time and travel against the contract.

B. The Contractor shall arrange for their travel to/from the workshop and accommodations
   at the workshop.  The Contractor shall identify and prepare meeting space, coordinate
   transportation of all Federal and non-Federal attendees to/from the airport, hotel, and
   between hotel and meeting location if the meeting is in a different location than the hotel
   accommodation.  The technical program shall include brief presentations by the attendees
   of relevant research and data to define what is known about the potential effects of dietary
   metal exposure. Discussion sessions to follow shall focus on key areas of uncertainty
   pertaining to dietary metal exposure and the types of research data that shall be necessary
   to resolve these areas of uncertainty. The Contractor shall coordinate documentation of
   workshop presentations and discussions. The Contractor shall request that discussion
   leaders and facilitators assist in taking the minutes at the meeting.  In addition to any EPA
   employees that may be identified as technical experts, the workshop should reserve
   capacity for up to 10 attendees from EPA.

C. The Contractor shall ensure that the workshop presentations are documented and
   summaries of all sessions are prepared.  The Contractor shall arrange for the audio-taping
   of all presentations and discussions.

D. The Contractor shall arrange for a  catered lunch on each of the two-day sessions. In all
   reports and any other documentation such as e-mails, the Contractor shall refer to the
   lunch time as a "working lunch."  Mid-morning juice, danish, cofee and tea shall be
   available from 9 until 11 on both days. Cookies, chips, soft drinks and wine shall be
   available from 2 until the end of the session on both days.

D. The Contractor shall determine what audio/visual equipment is required by each
   presenter, and make arrangements  with the hotel.  The Contractor shall arrange for the
   operation of all audio/visual equipment (microphones, tape recorders, VCRs and
   monitors, screens, etc.), flip chart stands, paper supplies, markers, tent cards, and other
   supplies to facilitate the workshop. The contractor shall provide all name-tag badges for
   participants.
                                      3  - 25

-------
E. The Contractor shall arrange for a reception the evening of May 4th, for all attendees, and
   for a social hour after the 1st day of the workshop. If possible, both shall be held at the
   same location as the workshop. If the reception and social hour is at a different location,
   the Contractor shall arrange for transportation for all attendees between the workshop, the
   between the reception and social hour and attendees hotel accommodations.

F. The Contractor shall arrange for all photocopying of material for use by presenters and
   participants.  The Contractor shall obtain in advance copies of vu-graphs, papers, research
   data, and any other material to be presented at the workshop, make copies for all
   attendees plus 25 extra sets for EPA personnel unable to attend the workshop.  The
   contractor shall put together a folder and insert all material to be handed out to each
   attendee.

G. The Contractor shall arrange for EPA senior staff to act as facilitators for all workshop
   sessions and make the travel arrangements  for them.

H. The Contractor shall be in daily contact with the TOPO to report on the progress of the
   workshop planning, and be responsible for writing up the notes of all communications
   between the Contractor and the TOPO for insertion in the official file records.

L  The Contractor shall write a policy memorandum, testimony and briefing materials for
   use by the Director, DOE for testimony before the Congressional Committee on
   Government Oversight in August, 20xx. The Director will contact the Contractor's
   Program Manager and provide the PM with what is needed in terms of materials for
   Congresspersons. The Contractor will provide copies of all materials prepared for the
   Division Director to the TOPO for official task order file records.

J.  Based upon the research findings of the workshop, any additional direction received  from
   the Congressional Committee Chairperson, and the record of the court proceedings, the
   Contractor shall write the proposed regulation on water and sediment quality criteria for
   the EPA to publish in the Federal Register by September 15,20xx.
                                      3 - 26

-------
             MODULES - PREPARATION OF WORK ASSIGNMENTS,
                           DELIVERY AND TASK ORDERS

A. INTRODUCTION

   This module deals with the process of obtaining work from a contractor. How the work is
   given to the contractor depends on the type of contract.  Acquisition personnel define
   contract type in terms of how payment is made to the contractor, while program personnel
   often use the term "contract type" to mean what's the purpose of the contract's statement of
   work.

   If the contract is a cost-reimbursement for level-of-effort services, work gets to the contractor
   in the form of a work assignment. If it is an indefinite delivery/indefinite quantity form of
   contract, the type of order depends on what is being ordered. Delivery orders are used for
   supplies while orders for services are issued as task orders to the contractor.

   AJLpackages whether for work assignments or delivery/task orders contain certain basic
   elements: a statement of work (SOW), an independent Government Estimate (IGE), and an
   original or a signed copy of the Contracting Officer's Representative Nomination Form EPA
   1900-65A.  Please note that there may be individual office, division or other required
   elements depending upon where you work
B.  OBJECTIVES

    At the completion of this Module, you will be able to:

    • Describe the major steps in planning a work package.

    • List and describe required elements in preparing a completion-oriented statement of
       work.

    • Identify considerations in determining and documenting quality assurance requirements.

    • Evaluate the adequacy of a statement of work and identify needed changes.

    • Describe considerations and procedures for developing an independent Government
       estimate (IGE).

    • Identify and describe the contents of other elements of the work package.

    • Identify potential contracting improprieties and vulnerabilities related to work package
       preparation.

                                         5-1

-------
C. THE FLOW OF THE WORK PREPARATION PROCESS

   Whether a COR is using an IDIQ T&M/LH, FP or CR contract, The basics of putting
   together are the same. If an CR LOE contract is the vehicle used, the method of obtaining
   work from the Contractor is either a WA or a Technical Direction Directive (TDD), the
   former being the method in the majority of Agency contracts. In the case of IDIQs with TOs
   and DOs, the order itself is the means of obtaining work.  However, they all start off with a
   package that contain most of the same basic elements. A description of these steps and
   related key issues is presented in the following sections.

   •  Identify the project and determine the objectives
   •  Select the appropriate vehicle to use - acquisition vs assistance
   •  Plan the work assignment (WA), delivery order (DO), or task order (TO)
          •   Write the SOW
          •   Determine the Quality Assurance (Q A) requirements
          •   Develop the Government cost/price estimate (ICE)
   •  Assemble the Package and submit to the CO through the Contract COR

      •** NOTE: For the purposes of this module, the term COR will be used to represent
          Work Assignment Managers (WAM), Delivery Order Project Officers (DOPO) and/or
          Task Order Project Officers (TOPO). When the text is referring to the contract COR
          it will identify them as such.

   Although the items are listed sequentially, often the COR would work on the SOW and the
   IGE simultaneously. For example, after the COR does a rough draft of the SOW, the COR
   does an estimate of the labor categories, hours and other direct costs associated with the
   project. Working on the SOW will help identify the deliverables the COR expects to receive
   as the end products of the WA, DO or TO. Identifying the deliverables brings to mind the
   various ways to determine the acceptance criteria and the quality assurance requirements.
   Also, working on the IGE will usually necessitate a revisiting of and adjustment to the SOW.
   The QA requirements would be incorporated into the SOW.

   L  Selecting the Appropriate Vehicle to Obtain Work

      The first decision a COR has to make is what the primary purpose of the objective  is. For
      many projects the  choice of the appropriate extramural vehicle to use will have already
      been made by management. However, other vehicles, (e.g.. cooperative agreements,
      interagency agreements, GWAC or MAS contracts) may be appropriate to accomplish
      certain types of projects. Each of these has very specific intended uses. In particular, the
      COR should be aware of the differences between contracts and cooperative agreements
      as he/she plans the project.
                                        5-2

-------
Guidance on the proper use of contracts and cooperative agreements is given in: EPA
Order 5700.1, "Policy for Distinguishing Between Acquisition and Assistance", dated
March 22, 1994. In addition, your AAship may have its own supplemental procedures
manual.

Under Section 4 of the Federal Grant and Cooperative Agreement Act (FGCA), 3 1 U.S.C.
6303, a contract must be used if the principal purpose is to acquire property or services
for the direct benefit or use of the Federal Government.

Conversely, under Sections 5 and 6 of the FGCA, 31 U.S.C. 6304 and 6305, an Agency
may use an assistance agreement (cooperative agreement or grant), only if the
principal purpose is to transfer a thing of value to an eligible recipient to carry out a
public purpose of support or stimulation authorized by law.  Among grants and
cooperative agreements, if substantial involvement by the executive agency with the
recipient is expected, a cooperative agreement must be used.

Therefore, the primary criterion in choosing a contract versus a grant/cooperative
agreement is what the principal purpose is. If the principal  purpose is to obtain a
product or service to support a Federal agency, a contract must be used, even if the
project also benefits the recipient, other non-Federal organizations or the public.

More detail on the various types and uses of cooperative agreements is provided in the
above referenced guidance,  if CORs have  any questions on the type of extramural
vehicle to use, they should review this guidance and discuss the issue with laboratory,
center or office management.

If the decision is acquisition, then the choices are:

a.  Existing Agency contract
b.  GSA Multiple Award Schedule contracts
c.  EPABPAs
d.  Government-wide Acquisition contracts
e.  Multi- Agency contracts

For the purposes of this course, the text assumes your requirement's principal purpose is
to support the EPA's mission, and that an existing Agency contract will be used.  What
follows are the next steps in the process based upon that assumption. For guidance on
how to access the other vehicles, talk to the CO that supports you program office.

Selecting the Appropriate Contract to Use

In most cases, all of the pre-award contract activity has already happened and a contract is
in place, so the choice is readily apparent to the COR. However, in some instances,
                                   5-3

-------
   especially for new requirements or management initiatives, the choice may not be
   obvious. In such cases the COR should consult with the contract COR s for the candidate
   contracts to determine if COR's requirement falls within the scope/statement of work
   (SOW) of an existing contract. The COR can also ask to review the various contract
   SOWs in order to decide. The decision to use a particular contract is often made by the
   COR's supervisor or other management personnel, but the COR does have input  into this
   decision.

   •** Note that if your office/branch/division, laboratory, or center desires to use a contract
       of another organization, the COR needs to check with that contract COR for that
       contract as to whether there is available capacity in hours and dollars. The term
       "capacity" refers to the annual ceiling in hours or dollars in a contract. If there is
       insufficient capacity (i.e.. if hours and funds are  already committed for other projects),
       the COR will need to find another contract or initiate the process for a new contract.
       It's important to emphasize that the COR's proposed project must fit within the
       contract's SOW belonging to the other organization.

HI Delivery Orders, Task Orders and Work Assignments

   a.  Deli very Orders and Task Orders

       Deli very Orders are issued by a CO under an umbrella Indefinite Delivery/Indefinite
       Quantity contract (IDIQ) and are used when the primary purpose is to obtain supplies
       on a fixed-price basis. When the primary objective is to obtain services using a
       T&M, LH or cost-reimbursement basis, a task order is issued, also under an umbrella
       IDIQ contract.

       Task and delivery orders are used:

       •   To place orders using the General Services Administration's Multiple Award and
          Federal Supply Schedule contracts.

       •   To place orders under Agency IDIQ contracts, both EPA service contracts for FT
          and other resources and for single IDIQ contracts to cover work for a particular
          office.

       •   To place orders against another Agency's Government-wide contracts (GWAC).
       Since 1994, the use of IDIQ contracts has increased since the acquisition reform
       legislation made multiple awards a preferred method of awarding contracts. Not all
       IDIQ contracts are multiple award contracts. However, all contracts awarded by any
       Executive Department Agency acquiring advisory and assistance services (AAS) (the
                                       5-4

-------
    bulk of EPA contracts are for AAS) that have a maximum potential value of $10M
    and are for a period of 36 months or more are required to be made as multiple awards
    from one solicitation/Request for Proposal (RFP).  The simplest method to handle
    having 2 or more contracts with the same basic SOW is to make them IDIQ contracts
    where the obligation of the Government is only to order the minimum guaranteed
    quantity.

    When multiple awards are made, the requirements for competition were met when the
    original  solicitation/request for proposals (RFP) were issued. Orders placed under
    ID/IQ contracts do not need to be synopsized and the competition, if any, is among
    the Contractors awarded one of the IDIQ contracts. The FAR requires that the CO
    give each awardee a "fair opportuntity" to be considered for each order in excess of
    the micropurchase threshold of $2,500.00. For orders placed against GSA's multiple
    award schedule, the CO needs to get offers from a minimum of three contractors
    unless one of the exceptions applies.  For orders placed against other Agency
    contracts, the terms and conditions of that contract determine the amount of
    competition.

    The FAR exceptions to "fair opportunity" are:

    1.  The Agency need is so urgent that providing fair opportunity to all awardees
       would result in unacceptable delays.

    2.  Only one contractor is capable of providing the supplies or services at the level of
       quality required because the supplies or services are unique or highly specialized.

    3.  The order should be issued on a sole-source basis in the interests of economy or
       efficiency as a logical follow-on to an earlier order that was competed among
       awardees.

    4.  The order is being placed to satisfy the minimum guarantee which is a
       requirement of all IDIQ contracts.

b.  Work Assignments (WA)

    Many of the Agency contracts contain broad SOWs and the requirement is for a
    Contractor to promise to deliver a fixed number of direct labor hours spread across
    many different kinds of professional and technical categories. Because the contract
    requirement is given in broad, general terms, all the Government can require
    contractually from a Contractor is to provide its best effort. The uncertainty makes a
    CR pricing format the most reasonable type of contract to use. The Government
    orders all of the level-of-effort (LOE) hours and agrees to issue work orders to the
    Contractor describing what specific work it desires. The most frequently used format
                                   5-5

-------
       is a document called a work assignment (WA).  Other CR LOE contracts use
       Technical Direction Documents (TDD) to accomplish the same objective.

   All work ordered from a contractor, whether using a TO, a DO, a W A or a TDD requires
   planning by the COR needing the Contractor effort. Whatever the vehicle, the same
   certain elements are required: a SOW, an independent Government estimate, a COR
   nomination and appointment form, and other necessary documentation.

IV. The Process of Obtaining Work Using WAs, DOs, or TOs

   a.  Planning for the W A, DO or TO

       Before starting to write the statement of work, the COR needs to define the objectives
       and Contractor's requirements for the project While some experienced CORs may
       be able to do this as they are preparing the SOW, it is generally advantageous to
       sketch out the work requirements in advance by outlining the process using a work
       breakdown structure. The planning stage is also the time for the COR to determine
       whether the proposed work falls within the scope of existing office contracts, and
       whether the work duplicates previous or current efforts.

       The major planning steps performed by the COR are described below.

       1.  Defining the Project Objectives

          The project objectives describe the principal goal or result to be achieved by the
          project. Project objectives should always define a specific end product or service.
          Some examples of work objectives are:

          Example 1: Provide laboratory support to analyze soil samples in order  to
          characterize the sediment in terms of silt-clay content, contaminants, and carbon
          concentration.

          Example 2: Provide facilitation support to the Agency in community relations
          meetings on the Brownfields project.

          Example 3: Develop training to present to Agency personnel on writing
          performance-based SOWs

          Example 4: Perform an audit on a contractor's accounting system to determine
          compliance with Cost Accounting Standards and acceptable, allowable indirect
          pool cost accumulation.
                                     5-6

-------
2. Analyzing Government's Requirements

   Once the objectives have been defined, the next step is to analyze the project
   requirements. Project objectives should always define a specific end product or
   service. These objectives should be looked at in terms of:

   •  Tasks or actions required to achieve the objectives

   •  Deliverables and acceptance critieria

   •  Schedules

   •  Contractor qualifications

   (a) Project Tasks

       The COR should divide the project into the major tasks that will be needed to
       accomplish the project objective.  This is often called a "work breakdown
       structure"  (WBS)." The tasks can be expressed either as major areas of work
       or sequential steps to achieve the objective.

       For example, the performance based SOW training work
       assignment/task/delivery order could be divided into ten or more major tasks
       (the example WBS is not the only solution):

       •  Task  1 Prepare project work plan.

       •  Task 2 Obtain an Agency level-of-effort SOW, and analyze it for items
                 that          meet criteria for performance specifications and
                 those that don't

       •  Task 3 Identify and enumerate the expected outcomes and the deliverables

       •  Task 4 Identify the quality assurance measures to be used

       •  Task 5 Obtain copies of any Agency guidance and OFPP Best Practices
                 Guide

       •  Task 6 Prepare draft and final class room materials to accompany the
                 SOW        and guidance documents.

       •  Task 7 Develop registration and student evaluation form
                                5-7

-------
   •  Task 8 Develop classroom exercises for group activity to convert existing
                  SOW into one that is performance-based

   •  Task 9 Register students, and prepare enough copies of materials for
             attendees.

   •  Task 10 Conduct the class and have students complete evaluation

   •  Task 11 Summarize student evaluations and write final report to COR

      •s*Note that the example includes a task to prepare a project work plan.
      While this is a normal requirement of almost every contract, it is  useful to
      list it as a separate task and deliverable in the work
      assignment/task/delivery order to ensure that it is not overlooked.

(b)  Identify Deliverables and Delivery Schedule

   The COR should define the specific deliverables and associated schedules to
   meet the project objectives. Many EPA work assignments/task or delivery
   orders, especially those performed on-site, are issued for a one year duration at
   a time; however, the Government will normally have certain important
   requirements which need to be met over that period of performance.  Key
   factors the COR needs to consider are:

   •  What internal EPA products and milestones exist which are supported by
      deliverables of the work assignment/task/delivery order, e-g^ a budget
      submission, a peer review of a research project, an international
      conference.

   •  What specific contractor deliverables are required?

    •  Who will review the deliverables?

    •   What are the criteria by which the acceptability of the deliverables will be
      judged?

    •   How much time will be needed for review?

    •   When does the overall project need to be completed?

    •   When does each deliverable need to be submitted in order to complete the
       overall project on time?
                             5-8

-------
   In developing schedules for each deliverable, the COR  must take into account
   the following:

   •  The need for both draft and final submissions.

   •  The possible multiple levels of review. In addition  to the COR,
      deliverables may be reviewed by the COR's supervisor; technical
      specialists within the office, division, laboratory, center or branch;
      members of a quality action team; or scientists outside the Agency as part
      of a peer review process. Certain products may even require AAship-wide
      review by management, scientific, or administrative personnel.  These
      multiple reviews may add substantial time to the schedule.

   •  Holiday periods and end of fiscal year activities, which may necessitate
      extending turnaround times.

   •  All days should be consistent. The FAR uses calendar days now
      uniformly when setting time frames. It is probably a good standard for a
      COR to use in their tasks as well.

Acceptance criteria should be specified for each deliverable or category of
deliverable. The particular criteria will depend on the type of deliverable, e-g.., a
report, a journal article, a data analysis, etc. The following are examples of
acceptance criteria:

    •   The journal article is of publishable quality, Le., can pass the peer review
       process in scientific journals.

    •   The report contains, at a minimum, the following items:

           ฃD The data collected are adequately documented and characterized to
              ensure that a knowledgeable user can interpret and, if necessary,
              reconstruct and reinterpret the data set at a later time.

           &> The draft briefing is well organized, contains  the appropriate
              content (as specified in the SOW), and is written in plain English.
              It must be clear and easily readable by a non-technical person.

           ฃD Sampling is performed in accordance with  standard operating
              procedures as  described in the Federal Response Plan.
                             5-9

-------
(c) Contractor Personnel Qualifications

    Once the tasks and deliverables are defined, the COR should consider the
    qualifications of Contractor personnel to perform the work. Addressing this
    issue in the planning stage serves two purposes:

    •   It provides the basis for the specification of particular skill requirements in
       the work assignment/task/delivery order. While the COR cannot direct a
       Contractor to use a particular staff member, he/she can indicate personnel
       qualifications and evaluate resumes against these.

    •   Along with the description of tasks, it assists in determining whether a
       particular contract is an appropriate fit for the WA, TO or DO.

    As an example, under the training requirement, the COR  may determine that a
    particular skill requirement is that the Contractor have a certain number of
    years as a contracting officer, a specific academic degree, and possess proven
    writing skills

(d) Selecting References and Background Information

    The COR should identify reference materials for use by the Contractor in
    responding to the work package. This could include the section of the
    Regulation, United States Code or other project that this requirement is
    supporting.  It could also include technical manuals, deliverables from prior
    work assignments/tasks/delivery orders, or relevant Agency, or other
    Government reports, directives or guidelines.

(e) Ensuring that the Project Does Not Duplicate Other Work

    The COR should make every attempt to be sure that his/her project is not
    duplicating prior or ongoing effort in another part of the organization or
    Agency.  So the COR should discuss the requirement with his/her supervisor
    and other personnel in the organization as a double check for duplicate prior
    or current work.

(f)  Planning Worksheet

    Exhibit 1 presents a worksheet which the COR can use to outline the major
    features of the task order (TO), delivery order (DO) or work assignment
    (WA). The completed worksheet can be used as a reference hi writing the
    SOW.
                            5-10

-------
                                     Exhibit 5 -1

                  PLANNING WORKSHEET: DEFINING THE WORK
1.   What are the objectives of the project?
    Does the project duplicate previous or current work?
    How do these objectives relate to the Program or Project Plan?
2.   What tasks must be accomplished to achieve these objectives?

    Task Number        Description
3.  What deliverables are required? (Reports, articles, briefings, databases, measurements,
    meeting agendas, etc.) How will you evaluate the acceptability of deliverables?

    Deliverable                           Acceptance Criteria
                                        5-11

-------
                                Exhibit 5-1 (continued)

    Who will review the deliverables?



    How much time should the review require?



4.  When does the overall project need to be completed?
5.  When does each deliverable need to be submitted in order to meet the final completion
    date? (Allow sufficient time for Government review and Contractor response to review
    comments.)

    Deliverable                                 Date Required
6.  What skills, experience and levels of personnel are needed to perform the work?
7. What references and background information will the contractor need to understand the
   requirement and perform the work? (Program Plan, Technical Manuals, Agency reports,
   regulations, directives, guidelines, etc.)
                                        5-12

-------
b.  Writing the SOW for the TO, DO, or WA

    1.  Defining the importance of the SOW - The statement of work is the most critical
       element of the WA, TO, or DO Package. As laid out in Module 2, a well written
       SOW accomplishes the following:

       (a) It facilitates the development of a sound cost estimate.

       (b) It helps ensure a common understanding of project requirements by the
          Contractor and the Government.

       (c) It assists the COR in monitoring the project and evaluating deliverables.

       (d) In contrast, a poorly-written statement of work can contribute to contracting
          improprieties and vulnerabilities such as personal services. It can also
          contribute to misunderstanding of project requirements and inadequate
          Contractor performance.

    2.  A SOW usually contains the following elements:

       (a) Title

       (b) Background for the work assignment/task or delivery order

       (c) Purpose (objectives)

       (d) List and description of tasks

       (e) Deliverables, including acceptance criteria

       (f) Schedule for overall project and for each deliverable

       (g) Name of COR

       (h) If any tasks involve advisory and assistance services and/or sensitive or
          vulnerable services, the SOW should identify the management controls

       The background and objectives are frequently combined, as are the deliverables
       and the schedule. Also, quality assurance requirements should be included in the
       tasks and  deliverables (or in a separate section) for projects involving
       environmental data collection.
                                   5-13

-------
3.  Additional elements in a SOW

    Depending on the needs of a particular TO, DO or WA, and the terms of the
    overall contract, additional items added to a SOW may be:

    (a) Required personnel qualifications

    (b) Required additional reports, e.g.. special financial progress reports

    (c) Suggested skill mix, e.g.. estimated hours by labor category or professional
       level; however the Government's IGE is never provided to the Contractor.

    (d) Required format for deliverables, e.g.. format for word processing software

    (e) List of Government-furnished data or property (individual or class deviation
     .  required for this)

    (f)  Special requirements or restrictions, e.g.. prior approval by Government on
       use of data analysis software

4.  The following section discusses these required and optional elements in further
detail.

    (a) Title - the COR should select an appropriate title for the TO, DO, or WA.

    (b) Background/Objectives - The background statement should describe the
       factors that have led to the project This may include:

       (1)  Current Agency/laboratory/center/offlce/division management initiatives.

       (2)  Relationship of this project to previous or other current efforts. If this is a
           follow-on to an earlier task/delivery order/work assignment, identify it by
           number and title.

       (3)  Reference to Agency GPRA/laboratory/center/office/division research
           program or project plan that identifies the requirement. This should
           include the relevant project description or task description title and
           number. If appropriate, the relevant sections of the actual project
           description or task description can be included as an attachment to the
           SOW.

       The objectives should indicate the nature of the Contractor supplies or
       services desired.  Usually the work is for services, and the specifics of these
                               5-14

-------
    services are then described in the succeeding task and deliverable statements.
    Exhibit 2 presents one example of background/objective descriptions for an
    ORD work assignment.

(c) Task Descriptions

    This section lists and describes the specific tasks to be performed by the
    Contractor. These may either be sequential steps in completion of an overall
    project or major areas of work. It is essential that the project be divided into
    tasks; the absence of this is a frequent cause of rejection of the work
    assignment by the Contracting Office. The tasks should be presented in
    sufficient detail such that: (1) the scope of the Contractor's requirements is
    clear; (2) the Contractor can proceed without substantial direction from the
    Government; and (3) both the Government and the Contractor can develop a
    sound cost estimate. Thus, for example, reports or other information to be
    made available to the Contractor for use in conducting the project should be
    clearly indicated.

Many times the requirement deals with research and development, or analysis
related to pending legislation. So it's not always possible to specify in advance
what the outcome of a project will be. This element of uncertainty adds difficulty
to the COR's task of writing a clear, completion oriented statement of work.

The question becomes how can a COR deal with a requirement in which the
outcome will only become apparent as the work proceeds? One effective
approach is to organize the work incrementally, issuing technical direction (TD)
to definitize the work  as the requirements become clearer. Each TD would build
on the results of the previous one. Alternatively, the COR could divide the work
up into options to be exercises for successive work. A third alternative would be
to do successive TOs, DOs, or WAs, but this  is the least preferable approach
because it involves much more administrative processing and effort.
                            5-15

-------
                            Exhibit 5-2

         SAMPLE BACKGROUND/OBJECTIVE STATEMENTS
Laboratory Research Support Project

During the summer of 1993, the Environmental Monitoring and Assessment Program
(EMAP) conducted a Demonstration Project to determine the effectiveness of selected
physical, chemical, and biological parameters in describing the health of estuarine
ecosystems extending from the mouth of Chesapeake Bay to Cape Henry.
Approximately 225 sampling sites were visited over a 100-day period during the
Demonstration Project.

Many of the biological, chemical, and sediment samples collected have yet to be
analyzed.  Analysis of these samples is important to adequately assess the design of the
estuarine component of EMAP and to properly describe the status of estuarine
resources within the  Virginia Province. Of particular importance is the analysis of
sediment samples.

The objective of this work assignment is to obtain Contractor laboratory support to
process sediment samples taken at each test station. This support involves taking
measurements and analyzing sediment samples to characterize bottom dwelling
(benthic) animal communities hi terms of their abundance, biomass, and taxonomic
diversity.  This also requires measurements to characterize the sediments themselves in
terms of grain size, silt-clay content, and carbon concentration.

Management Support Work Assignment

Within the Office of Research and Development (ORD), the National Health and
Environmental Effects Research Laboratory (NHEERL) has been assigned primary
responsibility for the Environmental Monitoring and Assessment Program (EMAP).
EMAP is a complex and ambitious program to document and establish a long-term
monitoring regime for the nation's ecological resources. EMAP is intended  to serve the
needs of decision makers at EPA and other Federal agencies, scientists and researchers,
and a variety of other user communities.

Management systems for EMAP are extraordinarily complex because the program is a
new,technologically challenging monitoring activity, with a nation-wide sphere of
operations. Also, EMAP has been established as a matrix-managed program, which
places it somewhat outside the direct control of the traditional lines of authority in the
                                5-16

-------
                       Exhibit 5 - 2 (Continued)

         SAMPLE BACKGROUND/OBJECTIVE STATEMENTS
ORD laboratory structure.  As an EPA research program EMAP must function within
ORD. Therefore, EMAP must develop innovative management systems that allow it to
function as a matrix-managed program and are consistent with the line management
structure of ORD.  These management challenges require special attention, analysis,
and support.

 The objective of this work assignment is to obtain Contractor assistance to develop
 and revise documents describing EMAP organizational responsibilities,
 communications guidelines and administrative procedures, based on information
 provided by an EMAP Management Task Group.
                               5-17

-------
                                   Exhibits-3
            SAMPLE STATEMENT OF WORK FOR A WORK ASSIGNMENT

                              STATEMENT OF WORK
                      JFK Inc., Contract #68-W99-099 WA 1-01

TITLE:  Web Page Revisions


 COR Work Assignment Manager           Alternate COR Work Assignment
 Jane Doe
 Public Outreach Branch                     John Smith
 Innovative Strategies Divison                 Public Outreach Branch
 TeL (202) 260-9999     Fax (202) 260-8888   Innovative Strategies Division
 Email: doe.jane@epa.gov                   TeL (202) 260-7777    Fax (202) 260-8888
                                           Email: smith.john@epa.gov

 Mail:    U.S. EPA (7406), Ariel Rios Bldg, 1200 Pennsylvania Ave, Washington DC 20460
 Courier: Room E233, 401 M St. SW, Washington DC 20460

PURPOSE

Revise an existing EPA public internet web site to incorporate new information in support of the
Agency's pollution prevention public outreach activities and to ensure web site is 508 compliant.
The existing web site consists of five web pages originally designed by JFK, Inc under contract
68-W98-999.

TASKS

Taskl.  WnHcpian and monปh*v p"*yess report Submit a workplan that describes tasks,
planned approach, schedule, estimated direct labor hours by task and labor level, budget with
costs broken down by line item, and names, hours, and project role of Level 2, 3, and 4 staff.

Task 2. Web page revision.  Prepare new web pages to incorporate pollution prevention
information and digitized photos that will be supplied by the EPA Work Assignment Manager.
Edit and format the information to create attractive pages suitable for the general public. Revise
existing web pages to provide links to the new pages.  For the purpose of estimating the
workplan budget, assume that  ten new web pages will be requested at the rate of approximately
one  per month. Deliver the revised web pages on zip disk(s) Adobe Acrobat format.
                                       5-18

-------
                                 Exhibit 5 - 3 (Continued)
             SAMPLE STATEMENT OF WORK FOR A WORK ASSIGNMENT
SCHEDULE OF DELIVERABLES
 Task # & Deliverable
 1. Work plan
 2. Draft web pages
    Final web pages
Due date
15 days after WA receipt
1 week from receipt of information to be added
1 week from receipt of EPA WAM comments on draft pages
              (d)  Deliverables and Project Schedule

                 All deliverables should be listed along with their schedule. Due dates should
                 normally be listed in terms of elapsed months, weeks or days from the
                 issuance of the work assignment. If there are critical deadlines, actual dates
                 may be specified, recognizing that a delay in issuing the work assignment may
                 require that these be changed. Both draft and final deliverables should be
                 identified, where appropriate. While this is often implied in the work
                 statement, it is better to make this explicit, as it will have time and cost
                 implications.

                 Although it is listed usually at the beginning of the SOW or on a cover sheet
                 (if applicable) of the TO, DO or WA, the end date of the overall project
                 should be specified for completeness when a separate section lists the
                 deliverables.

              If this is a WA, usually a Contractor's first task is to submit a WP. The WP
              should be listed as a separate deliverable. The due date is specified in the contract
              under the standard WA or Ordering clause, and is generally two or three weeks
              after the CO issues the WA. If this is a TO or DO issued unilaterally by the CO
              without first issuing an RFQ, the contractor's staffing and management plan is the
              first deliverable after receipt of the TO or DO.

              Deliverable acceptance criteria should be specified for each deliverable or
              category of deliverable.
                                          5- 19

-------
             For work assignments involving Information Technology (IT)
             services, the COR should include in the acceptance criteria
             requirements for conformance to design and documentation
             standards established by the Office of Environmental Information,
             Office of Policy and Planning Division for IT hardware and
             software related effort.

(e)  Management Controls (as required)

    If sufficient management controls are not provided in the contract or in the
    Justification for Sensitive and/or Vulnerable Services, such controls should be
    included in the SOW.  Such controls may be specified to ensure that (1) the
    Contractor's products are appropriately reviewed before use by EPA, (2) the
    Contractor's analyses are based upon information and guidance supplied by the
    COR and other EPA staff, and (3) the Contractor's data sources and
    assumptions in performing analyses are documented. This is particularly
    important in TOs, DO, or WAs requiring products which are to be used by the
    Agency in decision making or which involve sensitive  services. Note that
    even if such controls are already included elsewhere (e.g..  in the contract), the
    COR may elect to include these in the SOW for reinforcement. Project
    objectives should always define a specific end product or service

    An example of a statement on management controls is:

       "The Contractor's analyses shall be based on information provided to the
       Contractor through the W AM COR by OPPT staff and other EPA
       organizations. The Contractor shall document specifically all data sources
       and assumptions in performing analyses and preparing reports.  The work
       products are for use by OPPT/OPPTS staff in selecting operational
       improvements.  The COR will coordinate review of all products by OPPT
       and other designated EPA organizations, and OPPT management will
       approve all products before use.  OPPT reviews will be at several levels
       besides the COR .  Final decisions on report content will be made by
       OPPT and communicated to the Contractor by the WAM COR."

    Depending on the type of contract and clauses in the contract, these items may
    or may not be listed on a TO, DO or WA cover sheet or hi a memorandum.
    The total estimated hours or a ceiling price may be given to the Contractor,
    depending on the contract's terms and conditions. The WAM COR needs to
    consult the contract COR and the contract.  The name, address and telephone
    number of the COR needs to be included in the SOW as well.
                           5-20

-------
(f) Quality Assurance Requirements

   For projects involving environmental data collection, quality assurance
   requirements should be specified. These can be provided in a separate section
   or as part of the tasks and deliverables.  The Office of Environmental
   Information (OEI) is in charge of setting the Agency's quality assurance
   requirements.

   The contract under which the requirement is issued should already have a
   Quality Assurance Program Plan in place. That plan describes the structure
   and functional responsibilities for quality assurance within the Contractor's
   organization. The COR needs to be familiar with the QA requirements of the
   contract in order to plan for QA at the DO/TO/WA level if necessary.

   The COR should contact his/her Quality Assurance Manager or the Quality
   Assurance Division of OEI to discuss any questions or issues pertaining to
   QA.

   •  Whether the work assignment will require quality assurance activities

   •  The nature of the QA/QC activities.

   The various regional, centers, laboratories and assistant administratorships
   have often developed their own QAR forms, which contain similar
   information.

   Different levels of detail are required in QA Project Plans, depending  on the
   category of project, e.g., enforcement support, technology development. The
   QAR form indicates the project category.

   It is the responsibility of the COR to specify the standards for the data in the
   SOW. For example, the contract may specify that the combined monthly
   technical/ financial progress report will include QA/QC information.  The
   COR and QA Manager, based on evaluation of the QA needs of the task
   order/delivery order/work assignment, might conclude that the need exists for
   more specific quality control audit information for this particular project. The
   COR may thus need to write additional QA requirements into the SOW.

   The Agency is in the process of making major changes in the area of QA/QC
   including the reorganization and creation of the Office of Environmental
   Information (OEI). All CORs need to check with management on any new or
   revised changes to the QA/QC areas.
                            5-21

-------
(g)  Additional (Optional) Elements

   (1) Personnel Qualifications

       Although the Government cannot tell a Contractor which staff to assign to
       the tasks, it can specify certain staff qualifications. While it is not
       standard practice, the SOW can also require that resumes be provided of
       proposed staff for certain specialized tasks. The qualifications must
       complement the qualifications stated hi the basic contract.  For example,
       when the contract requires investigators to have at least a Master's Degree
       in Chemistry and a minimum of six years of practical experience in the
       area of chemical analysis, the COR can specify personnel qualifications
       such as:

          "The principal investigator must have an advanced degree in Organic
          Chemistry and a minimum of six years of documented experience
          working with chemical analyses and characterization of organic
          compounds."

    (2) Required Additional Reports

       The DOPO, TOPO, or WAM COR may specify additional progress
       reports beyond the standard monthly combined technical/financial
       progress reports called for in the contract.  These may include, for
       example:

       •  Weekly oral reports or brief bi-weekly written reports

       •  More detailed financial reports, e.g.. list of hours by staff member

       •  Requirement to notify the Government when a certain percentage of
          the funds for the task/delivery order/work assignment has been
          expended: 40%, 70%, 80%.

       The WAM, DOPO, or TOPO COR should review any additional reporting
       requirements with the contract COR. The TOPO, DOPO, or WAM COR
       must balance the additional benefits to be gained by such reports with the
       additional Contractor costs they'll entail. Additional reports will add to
       the workload of the COR for review and file documentation. Frequently,
       such requirements are established for the contract as a whole, through a
       modification to the contract.

    (3) Suggested Skill Mix

       As a general rule, the COR should NOT suggest the labor mix. The TO,
       DO, or WA should be the document that states the Government's need

                            5-22

-------
   (the what), and the plan written by the contractor is the document that
   states the how and by whom.  To give the contractor anything on labor mix
   and hours would only be done for certain, very specialized requirements
   where there would be no other way for the contractor to determine whom
   to assign to the project.

(4) Required Format for Deliverables

   The COR must specify the software for any deliverables when electronic
   format is the method the contractor is using to submit deliverables.
   Specifying the software and type of disks, CDS, etc. is crucial and
   frequently overlooked. Any submission must be compatible with Agency
   hardware and software. This requirement can be expressed in the sections
   on deliverables or tasks or as a separate item.

   An example of such a requirement is as follows:

       "Unless otherwise specified, any deliverables that are produced on
       personal computers will use the following software and conventions:

       Word Processor:  WordPerfect Office 2000 or higher
       Data Bases: dBase IV, Lotus 3.01 or FOXPRO 2.6
       Diskettes: 3 Vz" High Density"

   "^NOTE: Contractors are PROHIBITED from printing and have page
             limits on the amount of photocopying a Contractor can do. All
             Agency contracts have a clause that sets out the limitations.
             Before a COR  requires a Contractor to provide copies, the
             COR needs to clear any large photocopying requirements with
             the Office of Administration and Resources Management
             (OARM), Facilities Management Services Division (FMSD),
             Document Production, Recycling, and Mail Management
             Branch for the  latest policies or copies of mail management
             circulars in Adobe Acrobat format.

(5) Government-furnished Data and Property

   It is the policy of the EPA that the contractor furnishes all data and
   property to accomplish the task.  Sometimes EPA has to provide access to
   certain Government data.  All CORs are advised to consult Chapter 5 of
   the Contracts Management Manual and Part 45 of the FAR and follow the
   procedures outlined there. Anytime the Government either furnishes
   property or reimburses the Contractor for property acquired in the course
   of the contract, DO, TO, or WA, the FAR requires a deviation. If this was
   not done at the contract level, the DOPO, TOPO, or WAM COR will have
   to write a justification and request that the CO do an individual

                        5-23

-------
   Determination and Findings for a FAR deviation. If the need for
   GFP/C AP was not identified at the time of contract award but instead
   became an issue later in the effort, the CO will usually do a deviation at
   the contract level and modify the contract as a whole.

(6)  Areas of Special Concerns

   Although these topics were covered in Module 3, it's important to put a
   reminder in at this point.

   (i)  Avoiding Contracting Improprieties and Vulnerabilities

       In preparing the SOW, the COR needs be careful to avoid SOWs that
       could be construed as personal services, inherent Government
       functions  or sensitive/vulnerable services. (See Module 3 for detailed
       coverage.)

       If the DO, TO, or WA is broadly worded, without specific and clearly
       defined tasks and deliverables, this may require the COR to provide
       extensive  direction to the Contractor to perform the work.  Even if
       such direction is documented through technical direction, the
       additional and frequent interaction may create the appearance of
       supervision and thus personal services.

       Tasks which call for the Contractor to "assist" the Government in
       performing a function may create the appearance of personal  services,
       unless the specific Contractor responsibilities (tasks and deliverables)
       are made clear. For example, a task which called for a Contractor to
       "assist an  office in revising a "Training Manual" would be
       unacceptable as stated.  The task would need to describe specifically
       the responsibilities of the Contractor.  The task description might be
       phrased as follows:

          "Based on review of current training manuals and with input from
          the Office Contracts Advisory Group, the Contractor shall prepare
          draft revisions of Chapters n, DI, and IV of the 'Performance-
          Based Statement-of-Work Writing Training Manual'."  Following
          review and receipt of written comments by the Government, the
          Contractor shall submit a camera ready copy of the relevant
          chapters plus one additional copy in WordPerfect Office 2000 on a
          CD-ROM read and write disc."

   (ii)  Inherent Government Functions and Sensitive and Vulnerable Services

       The TO/DO/WA SOW should not ask the Contractor for assistance in
       preparing  its own SOW. This includes asking the Contractor for

                        5-24

-------
    estimates of the costs to perform the a portion or all of a TO, DO or
    WA.

    If the services are in the sensitive or vulnerable category, the COR and
    contract COR to confirm that a justification has been prepared and
    approval obtained from the appropriate official (depending on the
    dollar value of the WA/DO/TO.  This approval is normally done for
    the contract as a whole before contract award.

(iii) Conflict of Interest

    The WAM, TOPO, or DOPO COR should confirm that the
    performance of the work doesn't represent an organizational conflict of
    interest for the chosen Contractor. If there are any doubts on this issue,
    the COR should check with the contact COR and CO.

The COR can use the checklists in Module 3 or Exhibit 4 of this Module
when reviewing the TO/DO/WA SOW to ensure that the statement of
work does not create the existence or appearance of personal services or
prohibited Contractor services.
                    5-25

-------
                                      Exhibits-4
                   STATEMENT OF WORK REVIEW CHECKLIST
 1.  Requirements arc consistent with the scope of work of the contract               (   )
     (requires coordination with Project Officer). Indicate relevant
     section(s) of contract SOW	
 2.  Background statement provides sufficient information to enable                  (   )
     understanding of context of the project.
 3.  Objective(s) are clearly stated.                                                (   )
 4.  References (e.g.. to Project Plan) are included, as appropriate.                   (   )
 5.  Tasks or task areas are listed and described and are consistent                    (   )
     with the background/objectives.
     • Scope of Contractor requirements is clear.                                   (   )
     • Responsibilities of Contractor and Government are clear.                      (   )
     • Information to be made available to Contractor is indicated.                   (   )
 6.  Deliverables are listed and described.                                         (   )
     • Schedule (due dates) for each  deliverable are specified and realistic.            (   )
     • Draft and final deliverables are listed, as appropriate.                          (   )
     • Acceptance criteria are specified, as appropriate.                              (   )
     • Electronic format is specified, as appropriate                                 (   )
     • Copying requirements do not exceed the printing limitations,                  (   )
       by deliverable.
 7.  Overall period of performance is provided. This does not exceed                 (   )
     period of overall contract
 8.  Management controls are described, indicating how EPA will ensure              (   )
     adequate input to and review of Contractor work.
 9.  Staff requirements are specified,  as appropriate.                                 (   )
10.  Quality assurance requirements (e.g.. data quality objectives,                     (   )
     audit requirements) are provided, as appropriate.
                                         5-26

-------
                              Exhibit 5 - 4 (Continued)

                  STATEMENT OF WORK REVIEW CHECKLIST
11.  Special requirements (e.g.. additional reports) are specified,                     (   )
    as appropriate.

12.  Services do not create appearance of personal services.                         (   )

13.  Services do not include inherently governmental functions.                     (   )

14.  Services do not represent organizational conflict of interest for                  (   )
    proposed Contractor.
                                        5-27

-------
                     Student Exercise No. 1
Outline for Writing a Work Assignment/Task Order

The students will be divided into groups.  Each group working together and, using the worksheet
in Exhibit X, will be asked to identify the tasks the contractor will be expected to perform and to
develop a work-breakdown outline for the task order or the work assignment the group has been
assigned.  At the completion of the group exercise, each group will, using flip chart paper,
present their outline work breakdown structure and explain the rationale the group used to
develop the outline.

1. Your office has a contract with XYZ, Inc. to set up workshops, forums, and seminars
   attended by experts in the areas of toxicology, biology, and ecology whose expertise and
   current research is relevant to the area being studied. Your office uses these workshops,
   seminars and forums to implement the policy and goals under the Government Performance
   Results Act (GPRA) portion of your office's budget submission. The office is working on
   revising a regulation on waer and sediment quality criteria to make it more protective of
   aquatic life. In qrder to do this, your office has decided to set up a workshop to bring
   together a small group (10 -12) of noted technical experts currently involved in research
   relevant to the evaluation of dietary metal exposure as a significant risk to fish and other
   aquatic organisms. The metal exposure being studied are the most cationic metals (i.e.:
   copper, cadmium, lead, zinz, nickel, etc., but excluding mercury and selenium where the
   dietary pathway risks is already documented. The workshop will be over two days and is
   tentatively scheduled for June 6-7,20xx. Presenters will include four EPA expert employees
   and approximately 10 other EPA employees will attend as part of the audience. It is now the
   middle of February and you need to write a statement of work for a work assignment for this
   workshop.


2. Your office has a contract with EcolCon, Co. to conduct hazardous substance safety training.
   The basic training text material has already been developed and delivered to the EPA on
   Compact Disks. The material consists of an Instructor's Manual, Student Text Material, a
   Pie-Test, A Post-Test, but no Student Practical Exercises. The hands-on practical exercises
   must be part of the training which has been programed to last for five days. The division has
   requested that this training be given to the all new employees hired in the last six months.
   The estimate is that each class will seat no more than 25 employees. You've been provided
   with enough funding for the Contractor to conduct two classes for the employees in the
   AAship. Your first task is to write a statement of work for this work assignment.
                                         5-28

-------
c.   Developing the Government Cost Estimate

    1.  Introduction - Purpose of the Government Cost Estimate

       The COR must provide, with the SOW, an estimate of the total Contractor costs to
       perform the project.  This is often called the Independent Government Estimate
       (IGE) and is required for all TOs, DOs and WAs over the simplified acquisition
       threshold (currently $100,000.00). However, the CO has the authority to ask for
       an IGE at any time and for any dollar amount if the CO deems it necessary to
       determine a fair and reasonable price.

       The Government estimate serves several purposes:

       •  It supports budgeting for the division, branch, project, laboratory, center, or
          office.

       •  It provides a basis for reviewing the Contractor's technical work plan and cost
          estimate.

       •  It supports an audit trail of the factors that went into the planning of the
          project.

       Without an independent Government estimate, the COR is placed in the position
       of having the Contractor's cost proposal define the budget for the project.  The
       Contractor may be proposing a substantially greater effort or more costly mix of
       personnel than the COR believes are needed for the project.  The higher cost, in
       conjunction with the costs of other work assignments, may cause the total  ceiling
       of the contract or the overall contract budget for the branch or section to be
       exceeded. The Contractor's cost estimate may in fact be reasonable, but without a
       basis for comparison, judging reasonableness may be difficult.

       Also, the absence of independent Government cost estimates for some TO, DO, or
       WAs has been found to be a vulnerability in the Acquisition Management
       Improvement Reviews. Thus, it is essential that the COR develop this
       estimate.

       At this point, the type of contract pricing determines the approach a WAM,
       TOPO, or DOPO COR takes in developing her/his IGE. If the prices are already
       set for line items, tasks or labor categories, the COR uses those for the cost per
       hour or price per item.  The COR's most important task is to determine the
       number of hours that are appropriate for each of the tasks or subtasks in the
       COR's WBS, and then to compute a rough estimate of the ODCs (the number of
       trips if travel is involved, the number of people to make the trip, long distance
       telephone calls, etc.) If the BDIQ contract is for commercial items or supplies, the
       IGE will be constituted of the fixed prices for the items listed in Schedule B of the
       contract. If the contract is a CR LOE one, putting together the IGCE is less
                                   5-29

-------
   precise since the direct labor costs used are composites from the Contractor's
   original cost proposal or an average hourly rate based on all previous labor costs
   on previous WAs, which may not reflect the actual expenditure of effort for the
   WAM CORs current requirement.

   In order to put together a realistic IGE for a WA, DO or TO, a COR needs to
   understand the elements that make up a Contractor's costs.

2. Elements that Make up a Contractor's Costs

   A cost proposal submitted by a Contractor is make up of both direct and indirect
   costs of doing business.  Part 31  of the FAR addresses these elements in much
   more detail. For the purposes of this text and the task of compiling an estimate, a
   short description of the elements follows:

   (a) Direct Costs - direct costs are directly identifiable to a specific project and
       include labor and other costs that are passed through and billed to the
       Government.

       (1) Direct Labor represents the actual wages paid to the Contractor's
          employees for their work on the contract. Most contracts specify various
          labor categories which are expected to be required on the contract. For
          example, a contract scope of work  might specify the following categories:

          Professional Level 4 - Project manager or senior environmental scientist
          with a Ph.D. or equivalent and 10 or more years of experience.

          Professional Level 3 - Environmental scientist with an M.S. degree or
          equivalent and 6 to 12 years of experience.

          Professional Level 2 - Environmental associate with a B.S. degree or
          equivalent and 3 to 8 years of experience.

          Professional Level 1 - Junior associate with a B.S. degree or equivalent
          and 3 years or less experience.

          Technical Level 3 - Senior environmental technician with 3 to 6 years of
          experience.

          OR

          Senior Economist - An individual with a Ph.D. in economics and ten or
          more years of experience doing economic impact analyses, risk
          management in the area of economics. This person has written dozens of
          articles that have been published in recognized scientific journals and has
          participated in peer review panels for several Government Agencies

                               5-30

-------
   including EPA. May have a Bachelor's or additional degree in business
   management or mathematics.

   Junior Economist -  An individual with a Master's Degree in economics
   and four or more years of experience in economic methodology, economic
   analyses, economic areas of risk management.  Has had some published
   articles in recognized scientific journals.

   Economist - An individual in an entry-level position with a Bachelor's
   degree in economics possibly including a minor in business or
   mathematics or English. This person has at least one-year of experience
   gained in summer jobs or intern programs.

   Writer/Editor - An individual with a Master's Degree in English and at
   least five years of experience developing, writing, and editing material for
   reports, manuals, instruction books and related technical and technical
   publications.

   Statistician - An individual with at least a Master's Degree in Mathematics
   and at least five years of experience in conducting sampling research,
   developing statistical surveys, analyzing statistical impacts resulting from
   testing data.

   Researcher - An individual with a bachelor's degree and 4 plus years of
   experience doing research of verbal or statistical data to prepare reports
   and studies for use by professional workers in a variety of areas of
   economics.

(2)  Other Direct Costs are costs, other than labor, that can be attributed
directly to
   the project.  Examples are travel, equipment, copying, subcontractors,
   telephone and computer time.  This category could also be where
   consultant costs are listed rather than as direct labor. Remember, the
   Contractor must be consistent in the way it charges costs on all work under
   the Contractor. The most common elements of a Contractor's ODC's are:

       Travel - long distance and local
       Copying
       Telephone/facsimile
       Computer time
       Equipment and supplies
       Postage/express mail
       Other (e.g., messenger, training)
                         5-31

-------
(b) Indirect Costs

   Indirect costs are the costs of operating the business. They are not associated
   with one particular contract but apply to a Contractor's multiple Government
   contracts. Indirect costs include fringe benefits, overhead, and general and
   administrative expense. The classification of costs as overhead or G&A may
   vary somewhat by company.

   A Contractor that does both Government and commercial contracting will
   usually segregate his indirect cost pools into Government and non-government
   because many of the normal costs of doing business in the private sector (i.e.;
   interest on business loans, alcohol for company picnics) are unallowable and
   prohibited on Government contracts.

   The most common indirect costs are:

   (1) Fringe benefit costs are costs associated with sick leave, annual leave,
       tuition reimbursement, insurance contributions, and other "fringe benefits"
       for the Contractor's employees.  Fringe benefits are generally calculated in
       the form of a percentage of direct labor costs.

   (2) Direct labor overhead includes costs such as rent, furniture, supplies,
       business equipment, marketing costs, and non-direct secretarial support
       costs.

   (3) General and Administrative Expenses (G&A) usually includes the
       administrative costs of operating the business. This typically includes the
       costs of the company's president or other senior officers, as well as labor
       and other costs for financial, personnel, legal and other administrative
       support. G&A is expressed as a percentage of the sum of labor costs,
       fringe costs, overhead costs, and ODCs.  Some companies combine
       overhead and G&A costs into one rate.

   The direct labor overhead and fringe benefit rates are usually expressed as a
   percentage of the direct labor costs. Many companies combine fringe and
   direct labor overhead costs into one rate.

   •^NOTE: What goes into a Contractor's various indirect cost pools is
   different for each contractor. Some companies will charge photocopier costs
   to an indirect pool while others make a direct charge to a contract for each
   copy made. Comparing indirect rates between contractors is like comparing a
   sedan and an SUV - both are modes of transportation but the seats, engines,
   wheel size varies greatly.
                            5-32

-------
               : Many large companies who do business with the Government have
       to submit the cost elements being accumulated in each of their indirect pools
       to an auditor for approval. The Cost Accounting Principles require a
       Contractor to be consistent across all Government contracts. In other words,
       Contractor ABC cannot charge clerical support to an indirect cost pool for
       Department of Energy contracts and charge it directly to all EPA contracts.

       Many companies have separate overhead rates for Government and private
       sector work, as well as different Government overhead rates, based on whether
       the work is performed at the Contractor (off-site) or Government (on-site)
       location. The on-site rate will most likely be lower, since office space,
       furniture and equipment will be furnished by the Government.

   c.  Fee

       Fee is the amount the Contractor earns above its costs on a contract. The fee
       is the Contractor's profit. The fee percentage is applied to the sum of all of the
       above costs. As indicated in Module 2, fee is usually one figure, but on CPAF
       contracts, it consists of two parts: a base fee and an award fee. By law, fee is
       limited (except for R&D effort) to 10% of the total costs.  Although in the
       initial cost proposal, the contractor proposes fee as a percentage of total
       proposed costs,  once the CO negotiates fee, that percentage is converted into a
       fixed dollar amount and is no longer a percentage of the Contractor's costs. A
       cost plus a percentage of cost is an illegal contract In a CR, the CO
       determines that  dollar value of each hour delivered, and the fee paid on each
       invoice is based upon the number of hours delivered. This is the ratio of the
       direct labor hours performed in a given period (usually a month) to the total
       direct labor hours authorized for the contract period.

3. Methods of Developing the Government Cost Estimate

   There are several methods a COR can  use to estimate the cost of a project. These
   methods involve varying levels of complexity. The method should be selected
   based on consideration of such factors as the mix of personnel, differences in
   labor rates for different personnel categories, amount of other direct costs, the type
   of pricing used for the contract, whether the work is being done on-site or off-site,
   etc.
                 In selecting the cost-estimating method, the COR must check to
       determine if the contract's CO has established any specific requirements or
       guidelines. CORs may also wish to review the student text independent
       Government cost estimating guide available on the OAM intranet website at
       http://intranet.epa.gov/oamintra/policv
                               5-33

-------
(a)  Delivery Orders/Task Orders vs Work Assignments

    Delivery Orders and Task Orders differ from Work Assignments in several
    ways.  A contract with work assignments (WA) or Technical Direction
    Directives (TDD) is usually either a CR or a T&M/LH form of contract. The
    WA or TDD is used as the instruments for ordering work from a contractor.
    At the time the contract is issued by the CO, all of the hours or effort has been
    ordered but the actual work the Contractor is to perform has not been defined.
    The COR and CO use the W A or TDDs to define and put into more exact
    detail the effort the Contractor is expected to put forth. All of the funds for
    the effort are placed upon the contract itself. The WA or TDD is not separate
    from the main overall contract and have no actual funds on them, the
    document itself only references the funding on the contract. The CO issues
    the WA or TDD prior to the Contractor submitting a technical and cost
    proposal.

    If the contract is an IDIQ with negotiated fixed prices for each line item for a
    particular unit of supply, the DOPO COR uses those fixed unit prices to place
    a fixed price delivery order. The Contractor delivers the goods within the
    stated period for delivery or submits an alternate delivery schedule and the
    rationale as to why the required delivery date can't be met. The Contractor
    risks a breach of contract and termination for default by not adhering to the
    scheduled number of days for delivery as negotiated in the overall contract.
    The CO generally issues the DO on a unilateral basis.

    If the contract is an IDIQ with either CR or T & M/ LH pricing, the TOPO
    COR can approach an order in two ways.

    The COR can request that the CO place the order unilaterally.  For contracts
    with T&M/LH pricing, the TOPO or DOPO COR uses the fully loaded labor
    rates (direct labor, direct labor overhead, fringe benefits, G&A, and fee) listed
    in Section B of the contract. Then, after determining the appropriate labor
    categories necessary, determines the number of hours needed for each labor
    category for each of the tasks and subtasks in the SOW. The hours are
    multiplied against the loaded rate to obtain the total labor cost. The
    Contractor is required to respond to the TO with a staffing and management
    plan, and indicate whether the Contractor agrees with the number of hours and
    labor categories used for the TO, and the dollar amount used for the ODCs.
    The TO is issued before the Contractor submits a technical and cost proposal.

    Another method would be to request that the CO send the SOW to the
    Contractor as a Request for Quotation (RFQ).  The Contractor would then
    submit a technical and a cost proposal prior to the CO issuing the TO. The
    TO wouldn't be issued by the CO until all of the costs, technical issues, terms
    and conditions had been agreed upon. As a general rule, the CO would issue
    the TO as a bilateral order signed by both parties.

                            5-34

-------
       In both situations the TOPO COR still evaluate the technical proposal and
       advise the CO on whether it is acceptable as written, unacceptable and in need
       of negotiated changes, or somewhere in-between.  The CO asks the TOPO
       COR to look over the proposed labor mix and costs and advise on that as well.
       The CO would make a determination as to whether the proposed costs were
       fair and reasonable.

       If the contract is one of several the Government awarded using the multiple
       awards feature of the FAR, i.e.; making multiple contract awards with the
       same SOWs from one solicitation (RFP), each Contractor would be asked to
       submit a proposal (technical and cost or maybe only cost) as a fair opportunity
       to compete.  The TO would be issued by the CO to the Contractor that was
       evaluated as providing the best value to the Government, unless it was
       necessary to place the order with one of the Contractors to meet the minimum
       order quantity. The evaluation process by the COR would be the same as with
       the BDIQ single award above. The difference here would be that the cost and
       technical proposal is received prior to issuing the TO.

4.  Developing the Independent Government Estimate

   The IGE is a required element of all work packages prior to ordering work from a
   Contractor. Whether dealing with CR, T&M or LH pricing, the first and the most
   important step is to estimate the direct labor hours required. Procedures for
   developing the labor hour estimate are presented below. Following this
   discussion, three alternative methods of estimating costs are presented, in
   increasing order of complexity.

   (a) Estimating Direct Labor Hours

       In this step, the COR estimates the labor hours by  personnel category and total
       to perform the TO, DO or WA.  The procedures are as follows:

       • Identify and list the major tasks across the top  of the page.  These tasks
          should be the same as in the TO, DO or WA SOW, but should be
          expanded into subtasks to accurately estimate hours.

       • List the staff categories expected to be required down the first column.
          These may be obtained from the contract COR or from reviewing the
          contract. Reviewing previous TOs or WAs for similar effort are also an
          excellent source.

       • Estimate the hours required by each personnel category to perform each
          task. As an aid to developing this estimate, you may wish to indicate the
          length in weeks or months of each task on a chart. In doing this, consider:
                               5-35

-------
    -   The length of the task

    -   The particular work activities required

    -   The number of people, full-time or part-time, expected to be required

•  Sum the labor hours by task to estimate the total labor hours by staff
    category and for the whole requirement.

The above process is not a simple activity. It requires careful thought as to
what work will be required and how it will be approached. There are several
ways, however, that this process can be shortened. For example:

•  If the project is very similar to one that was conducted in the past, you may
    estimate the total hours based on the prior effort with minor adjustments
    based on new requirements.

•  If the number of staff categories is few you may estimate the total hours by
    task (or overall), and then apportion the total by staff category based upon
    experience.

•  If the project will involve a fairly level concentrated effort, especially if
    the project is on-site, you may estimate the number of people required for
    a given period (e.g., 6 months), adjusting for full- or part-time staff. For
    example, you may judge that the project requires a project leader half-time
    for 6 months, a senior scientist full-time for 6 months and a technician
    full-time for 6 months.
                         5-36

-------
Contract No.:
WA or TO No.:
                                       Exhibit 5 - 5

                                PLANNING WORKSHEET:
                              ESTIMATING LABOR HOURS
                                    (BASE METHOD)
Contractor:
            Title:
Labor Hours by Task
Task
Labor Category
Program Manager
Senior Economist
Junior Economist
Researcher
Writer/Editor
Clerical
Total
1
20
10

0
25
12
67
2
10
40
120
200
80
16
466
3
40
120
240
310
200
32
942
4
40
120
240
250
140
32
822
5
40
80
200
225
100
24
669
6
25
80
80
120
40
16
361
Total
175
450
880
1105
585
132
3,327
    •  If the estimate is based primarily on the length of time a staff category is expected to be required,
       assume an average of 160 hours per month for a full-time effort. This takes into account time off
       for leave and holidays. (Note:  The actual effective available hours is typically closer to 155
       hours per month, but 160 hours may be used for simplicity and is a more conservative figure.)
                                           5-37

-------
                (1) Estimating Direct Labor Costs Using the Overall Loaded Labor Rate
                   Method

                   Using loaded labor rates is the simplest method of estimating total costs.
                   In this method, the TOPO, DOPO or WAM COR would multiply the total
                   labor hours estimated to be required by a single overall "loaded" labor rate
                   for the contract. This rate (compiled just as a T&M/LH rate is compiled)
                   includes the Contractor's fringe, overhead, G&A, and fee, but also added
                   in are the other direct costs computed by taking the total hours and
                   dividing that number into the estimated ODCs to get an ODC rate per
                   labor hour. It does not distinguish among different labor categories.
                   Thus, for example, if the total estimated labor hours for a TO or WA were
                   800 hours and the overall loaded labor rate were $65.50,  then the total
                   estimated cost for the effort would be $52,400, which could be rounded to
                   $53,000.

                   If the expected labor mix is substantially different from other work (e.g..
                   much greater involvement of senior versus junior staff) or if there are
                   substantial travel costs or other ODCs, then another method should be
                   used or an adjustment should be made to the estimate to reflect these
                   special cases.
                                     Exhibits-6

                        COST ESTIMATING WORKSHEET:
                   OVERALL LOADED LABOR RATE METHOD
Contract No:	           Contractor:	
WA, DO or TO No.:	          DO, TO or WA Title:.
Step 1  -   Estimate total labor hours for effort or task                     	2,272
          (from Direct Labor Hours Worksheet)


Step 2  -   Determine overall loaded hourly labor rate                     	$63.25


Step 3  -   Multiply total labor hours by overall loaded                    	$143.704
          labor rate = Total Estimated Costs
                                        5-38

-------
The COR may obtain the overall loaded labor rate from several sources:

•   From the contract COR

•   From the financial portion of the monthly progress report for similar
    work performed by the Contractor or for the total contract. This
    report should indicate:

    -   Total cumulative charges in each DO, TO or WA, and the total
       contract

       Total professional/technical hours

    -   Cumulative charges per professional/technical hour

•   From the Contractor's cost proposal. This would require slightly more
    analysis. The COR would need to divide the total estimated cost and
    fee for the contract by the proposed number of direct labor hours. This
    could be done for the whole contract (including all option years and
    option quantities) or on the base quantity for a given year. It is
    preferable that the costs for the current year be used for estimating.
    The COR needs to ensure that subcontractor hours are included in the
    hour total. Depending  on the accepted accounting practices of the
    Contractor clerical hours may or may not be included in the direct
    labor hour figure. The TOPO or WAM COR needs to read the contract
    or consult with the contract COR for how clerical hours are accounted
    for by the Contractor.

While this method is rather general, it may give a reasonable "ballpark"
estimate. This method may be desirable under the following circumstance:

•   The labor mix is expected to be similar to the mix for other similar
    WAs or TOs  on which the loaded rate was based.

•   The level of ODCs is expected to be fairly modest, e.^, less than
    10 percent of the total project cost or comparable to the ODCs for
    other similar work assignments.

Estimating Costs - Average Category Loaded Labor Rate Method

This method is more detailed than the overall loaded rate approach. In this
method loaded labor rates  are established for each personnel category
including clerical. These rates reflect salaries, overhead, G&A and fee.
These rates do not include ODCs; ODCs are estimated separately and
added to the loaded labor costs.
                      5-39

-------
The procedures for estimating costs in this method are as follows:

•  Estimate direct labor hours for each personnel category (from Direct
   Labor Hours Worksheet). Clerical hours can be estimated at 5-15
   percent of professional/technical hours.

•  Determine average loaded labor rates for each personnel category
   (sources of these rates are indicated below).

•  Multiply direct labor hours for each personnel category by the average
   loaded labor rate for that category.

•  Add the loaded labor costs for each category to determine the total
   loaded labor costs for the work.

•  Estimate ODCs (procedures for estimating ODCs are described
   below).

•  Add the loaded labor costs and the ODCs to determine the total costs
   for the work.

   ซ*• NOTE: Some contracts allow for G&A and fee to be applied to the
              ODCs, others only allow G&A on ODCs. The
              TOPO/WAM COR

In this method, labor costs for subcontractors are generally included in the
loaded labor costs as opposed to ODCs. If loaded labor rates for
subcontractors are not listed separately in the contract, then a
subcontractor "handling factor" should be added to the labor costs if the
work is envisioned as being performed by a subcontractor. Contractors
vary in the markup applied to subcontractors.  Some apply full G&A,
some no G&A, and others apply a handling factor which is less than the
full G&A. Most Contractors apply fee to subcontractor costs. The
contract COR can provide this factor.  However, for simplicity, it might be
best to assume that the work will be done by the prime Contractor, unless
the subcontractor's costs are substantially different.

The COR may obtain average category loaded labor rates from the
following sources:

•  From the contract COR

•  For time and materials pricing, directly from the contract (loaded labor
    rates are listed for each personnel category.)

•  From the Contractor's cost proposal, invoices or other financial reports.
    For CR contracts (including LOE contracts) loaded labor rates are not

                      5-40

-------
listed.  Instead, the WAM/TOPO COR or contract COR would need to
compute this figure, as follows:

    Identify the average salary rate for each personnel category. This is
    usually listed in the cost proposal. Remember to use the current
    year rate. This can be estimated by multiplying the salary rate for
    the base  year by the appropriate escalation factor. For example, if
    the average hourly salary rate for a mid-level economist was
    $27.00, and the contract is in the first option year, and the
    escalation rate is 5 percent, then the average salary rate for the
    current year would be $27.00 x 1.05 = $28.35.

    Multiply the salary rate by a load factor, which includes fringe,
    overhead, G&A, and fee. These rates are given in the cost
    proposal. The result is the loaded labor cost for the personnel
    category.

For example, if the fringe were 30 percent, the overhead were
40 percent, the G&A were 12 percent and the fee were 8 percent, then
the load factor would be 1  x 1.3 x 1.4 x 1.12 x 1.08 = 2.2. If the
average salary rate for a mid-level economist with a MS degree was
$27, then the loaded labor cost would be $27 x 2.2 = $59.40. If the
Contractor had a separate overhead rate of 20 percent for on-site work,
then the loaded rate for on-site would be less. For this example,
assume it would be less by -1.89. If the Contractor had only one
burden rate (including fringe, overhead and G&A) of 95 percent, then
the load factor would be 1  x 1.95 x 1.08 = 2.11.

Other Direct Costs may be estimated by applying a factor to the total
loaded labor costs based on the estimate included in the cost proposal
or the cost experience on the contract. For most TOs and WAs, ODCs
(except subcontractor costs) will generally not exceed  10 percent of
loaded labor costs, unless there are special circumstances, such as
heavy travel or lease of equipment. The factor for on-site contracts
would probably be less.

A more rigorous method of estimating ODCs is shown in the next
Exhibit.
                  5-41

-------
Contract No.:
                                  Exhibits  -7
               PLANNING WORKSHEET: OTHER DIRECT COSTS
    Contractor:
WA, DO, or TO No.:
WA, DO, or TO Title:	
                 Task
ODC Category
Travel
Long Distance
Local
Copying
Telephone/Facsimile
Computer Time
Equipment/Supplies

Postage/Express Mail
Other
Total ODCs
1




1,500


2







3
2,000
100





4

50





5

50





6
2,000
400






Total
4,000
300
600
450
300
1,500
450

7,600
                  In estimating long distance travel costs, the COR should consider the
                  anticipated number of trips, the average air fare, and the number of days
                  and rates of per diem and car rental. For example, if the Contractor is
                                     5-42

-------
   estimated to make 6 plane trips of 2 days each, then the long distance
   travel might be estimated as follows:

   6 trips at $500 air fare       =   $ 3,000.00
   6 trips at $ 50 local travel    =       300.00
   12 days per diem at $ 100/day =     1,200.00
   12 days car rental at $40/day =       480.00
       Total travel estimate     =   $ 4,980.00

   In lieu of a breakdown by task, certain ODCs such as local travel, copying,
   telephone and postage are often estimated by using an average total
   cost/month for the work assignment, e.g.. $200 - $600/month. Thus, for a
   6 month work assignment, these charges might total $1,200 - $3,600.
   Such charges would either not exist or would be much lower for on-site
   contracts.

   For many WAs,  TOs, or DOs, the application of a percentage factor for
   ODCs (e.g.. 5-10%) is sufficient. The COR needs to determine when to
   use the more detailed approach.

   In general, the average category loaded labor rate method is useful in the
   following circumstances:

   •  Average category loaded labor rates are listed explicitly in the contract
       or are otherwise readily available. This is generally the case for
       time-and-materials, delivery order contracts.

   •  Significant amounts of ODCs are envisioned.

   •  The labor mix is expected to be substantially different from the mix  on
       prior work assignments with the Contractor.

(3) Estimating Costs - Full Costing Method

   This method is the most detailed approach to cost estimating. In this
   method, individual cost factors including labor costs, fringe benefits,
   overhead, ODCs, G&A and fee are applied explicitly to estimate total
   work assignment costs.

   The method involves the following steps:

    •  Step 1  - Estimate direct labor hours for each personnel category (from
       Direct Labor Hours Worksheet)
                         5-43

-------
•  Step 2 - Determine average salary rates for each personnel category.

•  Step 3 - Multiply direct labor hours for each personnel category by the
   average salary rate for that category.  This gives total direct labor costs.

•  Step 4 - Multiply total direct labor costs by the fringe rate. This gives
   fringe costs.

•  Step 5 - Multiply total direct labor costs and fringe costs by the
   overhead rate. This gives total overhead costs.

•  Step 6 - Add ODCs to the sum of labor, fringe and overhead costs.

•  Step 7 - Multiply the above total by the G&A rate. This gives G&A
   costs.

•  Step 8 - Add labor, fringe, overhead, ODCs and G&A costs.  This
   gives total costs.

•  Step 9 - Multiply total costs by the fee percentage. In a CPFF contract,
   this is the fixed fee.  to a CPAF contract, the fee for estimating should
   be the sum of the base fee and the maximum award fee.

•  Step  10 - Add the total costs and the fee amount.  The result is the total
   estimated cost and fee for the requirement.

If the Contractor does not have a separate fringe or G&A rate (e^, fringe
and overhead or overhead and G&A are combined), then the
corresponding steps are omitted.
                      5-44

-------
                                    Exhibits-8

                        COST ESTIMATING WORKSHEET:
                            FULL COSTING METHOD
Contract No:	 Contractor:
Step 1 ~ Determine labor hours by personnel category (from Direct Labor Hours Worksheet)

Step 2 — Determine average salary rate for each personnel category

Step 3 — Determine total direct labor costs

                                               Unloaded
Labor Category   Hours                       Labor Rate            Labor Cost

 Senior Editor      456             X            40.00         =       18.240

 Junior Editor      896             X            27.00         =       24.192

 Staff Assistant     920             X             16.00         =       14.720

 Secretary           120             X             15.00         =        1.800
                                   X
Step 4 — Multiply total direct labor costs by fringe rate

             Total Direct Labor Costs               58.952

             X Fringe Rate                      	J
             = Fringe Costs                        17.686	

Step 5 - Multiply sum of total direct labor costs and fringe costs by overhead rate

             Labor Costs + Fringe Costs              76.638	

             X Overhead Rate                         -4	

             = Overhead Costs                     30.655	


                                       5-45

-------
Step 6 —  Add total ODCs (from ODC Worksheet) to sum of labor, fringe and overhead costs

             Labor + Fringe + Overhead Costs         107.293

             + ODCs                               7.600

             = Total Costs before G&A               114.893


Step 7 -  Multiply total costs before G&A by G&A rate

             Total Costs before G&A                114.893

             X G&A Rate                             .12

             = G&A Costs                         13.787

Step 8 -  Add total costs before G&A and G&A costs

             Total Costs Before G&A                114.893

             + G&A Costs                         13.787

             = Total Costs                          128.680

Step 9 -  Multiply total costs by fee percentage

             Total Costs                           128.680

             X Fee Percentage                        -08

             = Fee Amount                         10-294

Step 10 - Add Fee Amount to Total Costs.  Result is Total Estimated Cost Plus Fee

             Total Estimated Cost Plus Fee          S138.974
                The TOPO/WAM COR may obtain the average salary rates; fringe, overhead
                and G&A rates; and fee percentage from the following sources:
                                       5-46

-------
•  From the contract COR.

•  From the Contractor's cost proposal, invoices, work plan cost estimates, or
   other financial reports.

The full costing method is useful in the following circumstances:

•  Information on the various cost factors is readily available to the COR.
   Individual loaded labor rates are not provided.

•  Significant amounts of ODCs are envisioned.

•  The labor mix is expected to be substantially different from the mix on
   prior work assignments with the Contractor.

It should be recognized that if the average category loaded labor rates in the
second method are not  readily available and have to be computed, then the
second and third methods are very similar.
                         5-47

-------
                                 Student Exercise No. 2
The same groups will take the outline work breakdown structure developed in Exercise No. 1 and
use it to develop an Independent Government Estimate for the task order or work assignment.
1. Take the outline work breakdown structure developed in Exercise No. 1 and now use it to
   develop your Independent Government Estimate.

2. Using the labor information provided, identify the types of contractor employees by
   education and experience that will be needed to perform all the tasks you've outlined and
   assign them to a labor category: i.e. program manager, senior instructor, junior instructor,
   researcher, technical writer, administrative assistant, meeting moderator, quality assurance
   officer, etc.

3. Using the following worksheet, estimate the number of hours for each labor category that will
   be needed to perform all the tasks related to conducting this training.

4. Total up the hours by labor category and subtask as part of an IGE.
                                          5-48

-------
d.  PREPARING OTHER ELEMENTS OF THE WORK PACKAGE AND
   ASSEMBLING FT

   The work package is the collection of documents and forms which the DOPO, TOPO
   or WAM COR submits to the contract COR. The contract COR reviews the package
   prior to sending it the CO who will issue the TO, DO, or WA. The SOW is the most
   important element of the package. The IGE, including any assumptions made, is also
   a required part of the package. In addition, there are several other elements of the
   which the COR needs to prepare. Not all of these are required on every project.  In
   some offices, the contract COR may prepare some of these items. The COR should
   coordinate with the COR PO to ensure that all of the necessary forms and documents
   are completed.  A complete package would include most of the follwing:

   •  Cover Sheet or Memo WA, TO, or DO Form

   •  Procurement Request (EPA Form 1900-8)

   •  Contracting Officer Representative's Nomination Form (EPA Form 1900-65A)

   •  Copy of the Certificate of Training or a Deferment Request and Approval

   •  Quality Assurance Review Form

   •  Non-duplication of Effort Statement (required by some Contracting Offices)

   •  OIRM approval for IT services (as needed)

   •  FMD approval for use of multiple appropriations (as needed)

   •  Intra-agency funding request and approval (as needed)

   •  Individual Deviation to FAR Part 45 for Government-Furnished  Property (if class
       deviation has not already obtained)

    •  OMB approval of Information Collection Request when requesting information
       from 10 or more individuals or corporations (as needed and if not obtained at the
       contract level.)

    •  Justification and Approval for Sensitive and/or Vulnerable Services (as needed)
                                 5-49

-------
A Short Note Regarding Funding for the various types of contracts.  CR contracts
are funded at the contract level. In a IDIQ form of contract, delivery orders and
task orders are separately funded documents. They fit under the umbrella of the
IDIQ document, but they are obligating and tasking documents that stand on their
own. The typical CR LOE contract orders all the hours but not the work the hours
are to be devoted to. The EDIQ contract itself orders nothing, not even hours,
from the contractor and guarantees it only a minimum of work.  The bulk of the
work a Contractor receives is dependent on requirements placed as orders by the
Government with nothing that  can be counted on except the minimum amount the
Government must order. The  Module on Invoice Review and Financial
Monitoring with delve into this topic in greater detail.
                           5-50

-------
                         Exhibits-9
      THE WORK FLOW AND MANAGEMENT PROCESS
   Prepare
WA, DO, or TO
   Package
      2
    Review
 Contractor's
Technical/Manag
 ement/Staffing
 and Cost Plan
  Establish
WA/TO/DO File
    Plan
     4
  Perform
 Technical
Monitoring
       5
    Perform
   Financial
  Monitoring
Monitor Use
 of GFP/CAP
   if any
                                               7
                                             Complete
                                            Performance
                                             Reports
                                               8
                                             Close out
                                            WA/DO/TO
                                             Contract
                           5-51

-------
5-52.

-------
           MODULE 6: REVIEWING THE CONTRACTOR'S WORK PLAN
A. INTRODUCTION

   This Module describes methods for reviewing the Contractor's work plan (WP) in response
   to a CO issued work assignment (WA), and to a Request for Quotation (RFQ) for a TO or
   DO. Procedures for reviewing the technical and cost portions are discussed, along with ideas
   on developing approaches for the CO to use to negotiate any changes necessary.

B. OBJECTIVES

   At the completion of this Module, you will be able to:

   •  Identify the elements required in a Contractor work plan.

   •  Describe methods for reviewing the technical portion of a Contractor's proposal

   •  Describe methods for reviewing the cost portion of a Contractor's proposal

   •  Review the proposed action plan against a the SOW of the WA, TO, DO, or contract and
       identify discrepancies, needed changes and potential vulnerabilities.

   •  Describe methods for resolving differences with the Contractor and implementing
       changes through negotiations.

C. PROPOSALS SUBMITTED BY A CONTRACTOR

   Depending on the contract type, the response to a tasking document varies.

   I.  Work Assignments

       The predominate type of Cost-Reimbursement (CR) contract at the Agency are level-of-
       effort/term types with general statements of work (SOW) that contain a variety of task
       descriptions which the contractor may or may not be asked to perform.  The contract itself
       orders all of the hours for a specific period of performance, usually  12 months. Work is
       actually obtained from the contractor using a WA as the tasking document issued under
       the Agency cost-reimbursement (CR) contract. It's the overall contract itself that orders
       all of the hours.

       Generally, all EPA CR WA contracts require a Contractor to submit a work plan (WP) in
       response to individual work assignments. The submission of a WP is the first task and
       deliverable required by the WA. The amount of time a Contractor has to respond

                                        6-1

-------
   depends on the WA clause in the contract. As a general rule, WAM CORs should include
   the requirement for a WP in the WA SOW.

   There are two clauses in the main contract that govern the required detailed information
   the Contractor must submit: 1552.210-70 "Reports," and 1552.210-71 "Work
   Assignments." Although these contract clauses may or may not specify a particular
   format for the WP, in general the overall contract usually requires a detailed technical
   approach, a staffing plan for key or critical Contractor staff, and a detailed cost estimate.
   The WAM COR can require additional details and specific content, but none of these
   added details can supercede the terms and conditions of the main contract.

n Task Orders and Delivery Orders

   For some TOs and DOs, the Contractor submits a proposal (technical and cost) in
   response to a Request for Quotation (RFQ) and the review is done prior to the CO issuing
   the TO. Negotiations about the technical aspects and elements of the costs proposed are
   dealt with before the Contractor starts work.  This is especially true if it was a multiple
   award situation.

   For other TO and DO placement, the CO issues the TO or DO to the Contractor based
   upon the package submitted by the TOPO/DOPO COR. The Contractor is allowed to
   start working (sometimes working only on the technical and cost plan) while the technical
   and cost work plans are being reviewed.

Whether a WA or a TO/DO, the COR needs to be familiar with the content of the reporting
requirements of the contract to  ensure that the COR is not asking for information that
conflicts with the contract. The COR cannot use a WA, TO or DO to eliminate any of the
reporting requirements embedded in the contract, either. However, if after determining what
the contract requires and balancing that need against the needs of the individual COR, the
COR may indicate more specific reporting requirements in the WA, DO or TO.

      NOTE: COR's need to keep in mind that requiring additional information, over and
      above what the basic contract requires, from a Contractor will add to the cost of the
      work.

ffl. Reviewing the Contractor's Proposal

   In all of the following discussions, the text assumes that the TO, DO, or WA was issued
   by the CO prior to receiving any technical and cost response from the Contactor.

   To facilitate review and ensure both EPA and the Contractor have a common
   understanding of the WA, TO or DO work plans usually include the following elements:
   (NOTE: not all WPs contain each of these elements.)
                                    6-2

-------
   Statement of project objectives

   Detailed technical approach for accomplishing the work, including a list and
   description of tasks/action steps

   List and description of each deliverable

   Schedule for overall project and for individual tasks/deliverables

   Management and staffing plan ~ how the Contractor proposes to organize and staff
   the project

   Responsibilities of various staff

   Names of proposed personnel, including subcontractor staff or consultants

   Anticipated problems, if any

   Suggested changes to the work assignment requirements, if appropriate.

   Detailed cost proposal

       Hours by professional level staff (PL) or labor categories
       Total direct labor costs
       Other direct costs by line item (i.e., travel, copying, subcontractor)
       Indirect costs
       Consultants
       Fee
       Total cost and fee

Although resumes are typically not submitted, the TOPO/DOPO/WAM COR can request
them in the TO/WA/DO by requiring the Contractor to submit resumes outlining the
qualifications of staff to perform the  work. This would generally be done only on
selected projects requiring very specialized skills.  Other information the
TOPO/DOPO/WAM COR may require includes:

• Person loading chart, indicating estimated hours by staff category by task
• Cost estimate by task

a. Time Period Allowed for Review

   The amount of time a contractor  has to submit a Proposal or WP and the amount of
   time the COR has to review it and recommend approval/disapproval is clearly stated
                                  6-3

-------
   in the WA or the Ordering clause of the contract. If it's a WA, that clause also states
   that the Contractor must stop working at the end of a certain number of calendar days
   unless the CO has approved the WP or extended the time period for review.  If it's a
   TO or DO, issued unilaterally, the Contractor must respond within a certain number
   of days if the Contractor disagrees with any of the elements in the TO or DO. No
   submittal by the Contractor assumes that the Contractor agrees with the SOW,
   staffing, and costs. Also, if the CO disapproves a work plan, the Contractor must stop
   work until the problem causing the disapproval is resolved. (Note: In some pilot
   projects between OAM and the program offices, OAM has delegated  the approval
   authority to the contract COR.)

   The WAM, TOPO or DOPO COR can recommend approval, disapproval or partial
   approval of the WP/proposal to the CO through the contract COR.  Therefore, to
   allow sufficient time for notification to the contract COR and the CO, the
   TOPO/WAM/DO COR should complete his/her review in less calendar days than are
   required for CO approval. Failure to perform the review and notify the Contractor of
   the approval of the Contractor's proposed work plan/technical plan/management
   plan/staffing plan within the stated period of review constitutes a "constructive
   rejection." This means that the absence of action by the two levels of CORs and the
   CO is construed as a rejection of the work plan (unless otherwise specified in the
   contract).

   Also, note that while most of these Agency CR LOE contracts authorize the
   Contractor to start work immediately upon receipt of a WA issued by the CO, some
   contracts only authorize the contractor to work on the planning associated with
   responding to the WA with a WP (technical approach, staffing plan and cost
   proposal). Only after the the Contractor's response has been submitted and approved
   by the CO, does the contractor work on the rest of the tasks in the WA/DO/TO.  This
   delay in starting other tasks may be desirable where funds are tight or the requirement
   is very complex, and the COR wants to make sure that there is common
   understanding between the Government and the Contractor before too many labor
   hours and costs have been expended.  A TOPO/WAM/DOPO COR may wish to put
   that kind or other kinds of limits in the individual SOW if time permits. This further
   demonstrates the need for timely review of the work plan by the COR WAM. The
   COR WAM should discuss with the contract COR the specific review and approval
   and/or disapproval requirements for the particular contract.

b.  Items Included in the  Review

   The TOPO/DOPO/WAM COR needs to review the response from the Contractor to
   determine if the Contractor's understanding and approach are consistent with the
   SOW of the WA/DO/TO. The Contractor's technical approach and the cost proposal
   should be reviewed concurrently, since the two are interrelated (i.e., the Contractor's
                                 6-4

-------
    management and staffing plan is described in the technical proposal, and the proposed
    hours by staff level are shown in the cost proposal).

    A sample checklist for evaluating the Contractor's response is included in the Module
    as Exhibit 6 - 1.  For convenience, the checklist presents the review elements for the
    technical and cost proposals separately.

    The various items in the checklist are largely self explanatory. Regarding the use of
    Government-furnished property (GFP), the COR needs to ensure that a the contract
    includes a deviation to the FAR if the COR believes it necessary and in the
    Government's best interests to either furnish Government property or to allow the
    Contractor to purchase and the Government reimburse the direct costs of acquiring
    the property (CAP = Contractor Acquired Property.) If there is a contract level
    deviation, then the COR needs to write up a justification of need (JON) for the
    WA/DO/TO and submit the 7-point document through the contract COR to the CO.
    The JON is usually part of the package described in Module 5. When the justification
    is determined to be acceptable, the CO will issue a modification to the contract
    authorizing the use of GFP or the Government paid for acquiring of property by the
    Contractor. Until the modification has been signed by the CO, the COR is not
    authorized to provide GFP to the Contractor, or to give the go-ahead to the Contractor
    to acquire property.  If an individual deviation is required because there is none at the
    contract level, the process will take several weeks and requires much more
    paperwork.

c.   Items of Special Importance to Review

    In reviewing the work plan against the items in the checklist, several points are of
    special importance.

    •  Look for additions, deletions or changes in the task descriptions, as well as any
       renumbering of the tasks in the SOW. This is not necessarily a problem, as long
       as any changes have been explained.

          For example, the Contractor may change the order of tasks outlined in the
          SOW to create a more logical flow of the work. Or the Contractor may divide
          a task into two tasks in order to describe the work more clearly.  These
          changes are most probably acceptable.  On the other hand, the Contractor may
          propose adding a task which was not specified in the SOW nor contemplated
          by the COR  This may be judged appropriate to accomplish the objective, or
          it may reflect an activity which the Government does not wish to undertake at
          the time. All such cases should be identified and analyzed.

    •  Note any additions or deletions to changes to the schedule of deliverables. If
       some deliverables have been omitted, this should be flagged. If the schedule for

                                  6-5

-------
 completion of certain deliverables differs from the dates in the SOW, assess
 whether the revised schedule is reasonable. The COR should note any proposed
 format for specialized reports.

 Determine whether the Contractor has presented a detailed technical approach to
 accomplishing the work. A simple restatement of the SOW tasks is not
 acceptable. The Contractor's technical approach should include, for example,
 potential topics to include in the final report, data bases to be reviewed, analytical
 methods to be used, or individuals to be interviewed. The technical portion of the
 WP has to provide enough detail to ensure that the Contractor's understanding of
 the requirements is consistent with that of the COR.

 Compare the hours proposed with the independent Government estimate (IGE). If
 the hours vary by either labor categories used (same number of hours as the
 Government estimate but a different mix of skill levels) or total hours to be
 expended from what was calculated for the Government estimate, this may
 indicate a lack of a meeting of the minds. This disparity can be higher or lower,
 and these is no magic percentage rule of thumb for deciding if the difference is
 significant or not. It is determined individual assignment/order by
 assignment/order. When the Contractor's estimate of labor hours and other costs
 exceeds the IGE, this may indicate a need to scale back the tasks to a level that
 can be sustained by the COR's budget for the work.  Compare the Contractor's
 total estimated cost with the Government's cost estimate. If the Contractor's cost
 exceeds the Government estimate, this may also be a strong indicator that the
 scope of work, technical approach or staffing plan may need to be adjusted.

 Analyze the Contractor's proposed travel and training costs, if any. Contractor
 training costs are of particular concern to the Agency.  As indicated in a February
 28,1992 memorandum from the Assistant Administrator, OARM, and in a May
 27,1994 memorandum from the Director, OAM, the Government should not be
 paying to train Contractor staff to provide the basic services called for in the
 contract.   For example, the Contractor has a responsibility to make sure its
 personnel are provided with and know how to operate the common commercial
 software used in the workplace. If using certain computer software is part of the
 contract-SOW that the Contractor competed for and won, the Contractor is
 expected to train its employees at its own expense and provide fully qualified staff
  for employment on the contract. The Government should only be paving for
  specialized, non-commericial training associated with  using a new method, a
  piece of equipment or an Agency-unique software program not available through
  any other venue.

•  The COR needs to pay particular attention to the proposed use of subcontractors
  and the proposed plan of the prime Contractor to manage then- subcontractors.
                             6-6

-------
•  Analyze whether the contractor has indicated any anticipated problems, work
   dependent on information the Contractor has identified as being required from the
   Government but wasn't included in the COR's estimate of the effort, or areas the
   Contractor has indicated need clarification or modification.

       NOTE: The Contractor must submit a revised WP or staffing plan when there
       is a change in the SOW, labor hours or categories, or period of performance in
       an on-going WA/TO/DO.

a.  Questions to Consider when Reviewing the Technical Approach of a Contractor's
   Proposed Plan of Action/Workplan

   •  Does Contractor demonstrate complete understanding of the project?  Is it
       demonstrated for all of the elements or just some of them?

   •  Are the milestones the Contractor proposes appropriate/too generous/too
       ambitious/too conservative?

   •  Can the Contractor's effort be reasonably accomplished within the hours
       proposed? Are the number of hours inflated or unrealistically low (Contractor
       is in essense buying in and assuming addtional dollars and hours will be found
       later on)?

   •  Is the proposed staffing plan appropriate and reasonable? Is it consistent with
       the technical approach?

   •  Is the Contractor proposing qualified personnel?  Is the Contractor proposing
       to use over-qualified staff for routine tasks?

   •  Is the Contractor identifying any GFP needed? Is this a new requirement?
       Has the use of GFP been authorized in the contract or is this going to require a
       deviation to the FAR for this WA/TO/DO?

   •  Has the Contractor identified any questions, areas of concern, or indicated
       areas which need to be resolved?

b. Questions to Consider when Reviewing the Cost Proposal Portion

    •  Are the hours appropriate?

    •  Are the direct labor rates reasonable for the amount of work being done?

    •  Is the labor mix appropriate for the type of work being done?
                               6-7

-------
•  Are the indirect cost percentages (fringe, direct labor overhead, general and
   administrative) consistent with those negotiated and stated in the overall
   contract?

•  Are the proposed costs for any subcontracted effort reasonable?

•  Is the proposed amount of travel acceptable? Do the travel costs appear
   reasonable?

'•  Did the Contractor provide enough of a detailed breakdown of the other direct
   costs? Is each component reasonable?

•  Is the Contractor proposing acquiring property (CAP requires the same
   deviation and JON if the Contractor is going to bill the Government for all the
   costs associated with its acquisition since, if the Government pays for an item
   directly, it becomes Government property.)

•  Is the Contractor using subcontractors or consultants that are already
   consented to by the CO and listed in the overall contract? (If the Contractor is
   proposing to use a new subcontractor, this will take extra time for the CO to
   review any subcontract agreement between the prime and its sub and consent
   to it.)
                           6-8

-------
                                     Exhibit 6-1

    CHECKLIST FOR EVALUATING CONTRACTOR'S RESPONSE/ WORK PLAN

                  TECHNICAL APPROACH AND STAFFING PLAN

Does the proposed approach and plan contain the following elements?:

   Statement of objectives                                                (   )

   List and description of tasks                                           (   )

   List and description of deliverables                                     (   )

   Schedule for overall project and deliverables                             (   )

   Management and staffing plan                                         (   )

   List of proposed personnel and their labor categories and roles              (   )

Does the Contractor demonstrate a complete understanding of the              (   )
   requirements?

Is the approach to the W A/TO/DO reasonable and specific?                    (   )

Does the approach demonstrate a state-of-the-art understanding of              (   )
   the work?

Does the list of tasks and deliverables differ from the SOW?                   (   )
   If so, do these differences appear justified?

Does the proposed schedule differ from the TO/DO/WA SOW?                (   )
   If so, is the proposed schedule reasonable and acceptable?

Is the staffing plan reasonable in terms of qualifications and                   (   )
   distribution of responsibilities?

Is there a significant variance between the Contractor's estimated              (    )
   hours and the Government estimate? If so, does the difference
    appear j ustified?

Is the labor mix appropriate for the work? Is the mix of senior                 (   )
    and junior staff appropriate for the expected effort?
                                       6-9

-------
                                Exhibit 6-1 (continued)
            TECHNICAL APPROACH AND STAFFING PLAN (Continued)

Is the planned use of subcontractors appropriate? Does the Contractor           (   )
   have an acceptable management plan for its subcontractors? Have
   proposed subcontractors or consultants received CO approval?

Is the Contractor proposing the use of GFP or CAP? IstheGFP/CAP           (   )
   necessary for effort? Is use of GFP/CAP approved in the contract
   or is it necessary to get a FAR deviation?

Has the Contractor identified any issues which need to be resolved?             (   )
                                 COST PROPOSAL

Does the Cost Proposal contain the following elements?:

   Labor hours by staff level or labor category                               (   )

   Total labor costs                                                      (   )

   Breakdown of other direct costs                                         (   )

   Total estimated costs and fee                                            (   )

Is the total cost per professional/technical labor hour reasonable                 (   )
   and broken down by task and subtask?

Are other direct costs (ODCS) reasonable and broken out in sufficient           (   )
   detail by task?

   Is proposed travel reasonable?                                           (   )

   Are proposed training costs appropriate and reasonable?                    (   )
   (CO prior approvals normally required)

   Are other ODC elements reasonable?                                     (   )

How does the Contractor's estimated cost compare to the IGE? If it exceeds      (   )
   it, does the increase appear justified? If it is less, is it an indication of
   the Contractor's underestimation of the effort involved or a lack of
   understanding of the requirement. NOTE: an underestimate can be as
   large a problem since once the approved LOE and dollar amount are
   reached, the WAM COR may be confronted with a choice of obtaining
   additional funding or not getting a completed project.)


                                      6-10

-------
4. Negotiating Changes

   Based on the WAM, DOPO, or TOPO COR's review of the Contractor's proposal, the
   DOPO, TOPO, or WAM COR should recommend to the contract COR one of three
   actions-

   a.  To accept the work plan as presented
   b.  To negotiate changes to the work plan with the Contractor
   c.  To amend the statement of work fbr the work assignment. This may involve
       adding or deleting tasks or deliverables, changing the period of performance, or
       changing the labor hour estimate.

   The third action, amending the SOW of the WA/TO/DO, frequently is done in
   conjunction with negotiations with the Contractor.
                : At any time the DOPO/TOPO/WAM COR can recommend partial
       approval of a Contractor's technical approach for some tasks but not others. The
       CO would then sign off accepting those portions of the technical approach.  Or the
       staffing plan and the labor costs associated with them could be approved while
       negotiating the technical portion.

5.  Negotiating with the Contractor

    It is very important for the TOPO/DOPO/WAM COR to remember that Contractor's
    proposals can be negotiated. However, the only individual with negotiation authority
    is the CO. The TOPO/DOPO/WAM COR plays an important role in identifying the
    areas of difference between the Contractor and the Government, for example:

       •   The Contractor's approach is unacceptable and shows a lack of understanding
           of the requirement.

       •   The skill mix is inappropriate because the Contractor is using overqualified
           individuals for routine staff work.

       •   The Contractor has included tasks  that are unnecessary and bloat the direct
           labor hours and costs.

       •   The hours and labor costs are not commensurate with the ambition of the
           technical approach and past history on projects of this complexity
           demonstrates that many more hours and much more cost will be required in
           order to ensure the project is completed by the required date.
                                  6-11

-------
   •  The Contractor didn't include all of the deliverables as required by the SOW.
   •  The Contractor's approach is good and the costs reasonable, but the
       Contractor's proposed schedule is not acceptable.

Whenever a COR becomes aware of potential problems or areas of dissonance, the
COR needs to notify the contract COR of his/her concerns, and preferably in writing.
The CORs should meet to discuss discrepancies or questions, and plan a negotiation
strategy.  The contract COR in the course of meeting with the TOPO/DOPO/WAM
COR may also have identified problems or questions that need answers.

The next step is to contact the CO on the contract to set up a negotiation session with
the Contractor. The actual negotiations can be done in person or via a teleconference.
The CO is the only one authorized to conduct discussions with the Contractor, but it
is advisable for the contract COR and TOPO/DOPO/WAM COR to participate since
the CO relies on their expertise in the technical area to reach an acceptable agreement.

   NOTE: There is a difference between negotiation and clarification. The
   TOPO/DOPO/WAM COR, with proper notification of the contract COR, can act
   within his/her authority to contact the Contractor's Program Manager, for
   clarification of aspects of the technical, staffing or cost portions of the proposal.
   However, if there is going to be give and take on the contents that will result in
   the Contractor's submitting a revised proposal, or verbally saying the Contractor
   will change something, this becomes more of an area of negotiation and the CO
   must be involved in that process.

All CORs need to remember that some things are not negotiable. No one has the
authority to dictate how a Contractor conducts business or makes its business
decisions. The Government cannot compel the Contractor to use a particular
individual or subcontractor/consultant. The Government cannot tell the Contractor
how to perform the work in great detail or in terms of specifying the methods the
Contractor will use to divide the work and staff responsibilities. At no time can the
Government direct the contractor in a way that constitutes or gives the appearance of
personal services (See Module 3 of the text).

The WAM/DOPO/TOPO COR can request resumes of proposed staff and review
them to make sure they have the necessary qualifications of education and/or
experience which were included in the SOW issued by the CO. The COR has the
right to reject staff that don't meet those qualifications.

If the Contractor, CO and CORs can't resolve differences in either technical or cost
areas, or both, the CO would disapprove the Contractor's proposed WP.

Other areas that will require the involvement of the CO are:
                             6-12

-------
   9  Use of a subcontractor or consultant not previously consented to under the overall
       contract.

   •  Use of a subcontractor that would require an adjustment to the hours above the
       negotiated and approved ceiling for that subcontractor.

   These issues are addressed by the CO and the contract COR, however, the
   WAM/DOPO/TOPO COR needs to be aware of how they can affect the timeframe for
   approval of the Contractor's proposal involving modifications to the contract which
   take a longer period of time than that normally involved in the approval process.

   The important thing to remember is that the DOPO/TOPO/WAM COR should always
   keep both the contract COR and the CO informed when serious issues arise.

6. Negotiating Strategies

   The whole purpose of negotiating with the Contractor is to produce an acceptable
   plan. An acceptable plan makes sure the Government gets the deliverables and
   services it needs and the Contractor has a clear picture of the effort required. The
   Government wants to get as much work as possible for the funding available, and the
   Contractor wants to be sure there are sufficient hours and funds to complete the work.
   The Contractor needs work to keep its workforce employed and direct billed to the
   contract. If the Contractor has employees who are not being utilized, it has the choice
   of cutting its losses by laying these people off or, in order to maintain the expertise for
   future work, of continuing their employment and charging their salary to the indirect
   Labor Overhead. The priority of the Government and of the Contractor don't have to
   be in conflict. It's possible for the Contractor to produce  high quality work at a
   reasonable cost. That will benefit both parties. The WAM/TOPO/DOPOCOR needs
   to be sure that:

   •  The Contractor throughly understands the  requirements
   •  That the appropriate staff are being utilized for the requirement
   •  That the work can be accomplished within the schedule and budget.

   In order to accomplish those goals, the Government may  need to adjust the SOW or
   schedule of deliverables and negotiate changes to the Contractor's Technical, Staffing
   and Cost proposals.

7. Planning for negotiations

   The first and most important step in planning  is for the CORs and CO to put together
   an agenda for the negotiation and establish the roles each will play.  In order to
   develop this agenda, the CO will ask the CORs to:
                                 6-13

-------
   a.  Identify issues and potential changes needed.  The contract/WAM/DOPO/TOPO
       COR needs to identify the "bottom-line" Government requirements, i.e.; the most
       critical tasks and deadlines that must be met.  In order to accomplish this, the
       COR should use a checklist such as the one in Exhibit 6-1 or some other similar
       device.

   b.  Identify non-negotiable items, such as the limits of available funding which may
       be insufficient to support the Contractor's cost estimate.

   c.  Identify negotiable items -.- possible concessions that could be made without
       impairing the ability to achieve the key objectives, such as extending certain
       deliverable schedules that wouldn't negatively impact the Government's delivery
       of reports or writing regulation or policy.

   d.  Assist with developing an agenda by listing questions to ask the Contractor, such
       as questioning the qualifications of some of the proposed staff to perform certain
       tasks.  However, the Government can't tell the Contractor who to use. The
       Government can require to the contractor to use staff that meet the education and
       experience qualifications of the contract and any specified in the WA.

8.  Conducting the negotiations

   It is not possible to lay out a step-by-step approach on how the Government conducts
   a negotiation since each negotiation is unique and depends on the issues involved, the
   Government's flexibility, and the reactions of the Contractor to the issues raised.
   Developing a sense of -the flow of a negotiation and the timing involved, such as
   knowing when to ask a question, offer a solution, make a demand, or raise a new
   issue, takes practice. The CO will be relying on the technical expertise of the COR.
   Some general guidelines for any negotiation session are:

   a.  Ask questions first before suggesting changes. The place to start is with the
       questions identified by a checklist.  This ensures the COR and CO quickly gather
       all of the information needed.

   b.  Couplenon-negotiable items with positive suggestions. During the  negotiations,
       the Contractor may request a concession that is one of those nonnegotiable items
       the COR has identified.  When this happens, the COR can explain why something
       is not negotiable, and suggest some areas that can be negotiated.

          For example, the COR might respond to a Contractor's insistence that to do
          the job correctly, more money is needed for the work assignment, by saying:
          "Unfortunately, all remaining funds in our contract budget have  already been
                                 6-14

-------
             committed, so the Government doesn't have any extra money for the effort.
             However, we could talk about reducing the scope or look at some ways to
             reduce costs." By using this approach, the Contractor knows the request for
             additional funding can't be provided (the Government is either unable or
             unwilling). Suggesting one or two alternatives lets the Contractor know that
             there are other ways to address the concern of "not enough hours to complete
             all of the work."

      c.  Stick to the agenda. If you think the negotiation discussions are going off on a
          tangent, don't be afraid to say, "I would like to get back to discussing	."

      d.  Aim for a win-win situation by using non-confrontational language.

      e.  The Contractor should be consulted for possible solutions. This puts the onus on
          the Contractor to come up with solutions instead of criticizing the COR's
          proposed solutions. Should the Contractor keep shooting down suggestions
          without offering an alternative, the negotiator could ask:

             "What do you suggest as an option with the understanding that the
             Government has no additional funds?"

      f.  Offer your proposed solutions and be willing to suggest possible solutions for the
          identified problems. This can help avoid or reduce the adversarial tone.

      g.  Try to pose questions that are open-ended and use words that are not emotionally
          charged
CONFRONTATIONAL LANGUAGE
Why are these ODC costs so high?
Can't you get this Hone sooner?
Your proposed labor mix is using too
    many overqualified personnel for
    this project.

    9.  Summary of Negotiations
  CONSTRUCTIVE
  LANGUAGE

Tell me more about the basis for
your travel and copying costs.

Is there a way that we could
advance the schedule for delivery
of the data base?

You could reduce costs if you used
   more junior people for this task.
                                     6-15

-------
At the end of any session, the parties must summarize the agreements reached.  This
can be done verbally with a follow-up written account that both parties sign-off on.
This summarizing at the end ensures that all parties, the CO, the COR and the
Contractor, have the same understanding about any agreement. Ultimately, the
outcome will become an official record for the file.  The written documents should
contain, at a minimum:

a.  Date of negotiation session
b.  Names of participants for both the Government and the Contractor
c.  The issues discussed and the agreements reached
d.  Any unresolved issues

The CO or, if delegated authority, the COR will draft a letter to the Contractor that
identifies changes,  if any,  needed to the Contractor's cost or technical proposal.
Depending on the way the contract operates, the letter may be sent to the Contractor
by either the CO or the COR.
                              6-16

-------
                                     Exhibit 6-2

         SAMPLE MEMORANDUM FOR DOCUMENTING NEGOTIATIONS
                                 ON WORK PLAN
MEMORANDUM

SUBJECT:   Negotiations with XYZ Company, November 5,2001

FROM:   J. Jones, Work Assignment Manager

TO:      The Record

On November 2, 1999 negotiations were held with XYZ Company to discuss Work Assignment
Number 95 on Contract 68-D3-0660. Attending for the Government were:

S. Smith, Project Officer
J. Jones, Work Assignment Manager
B. Johnson, Contractor Program Manager

The key issues raised were:

The Contractor included a task which was not explicitly required in the SOW.

The Contractor's estimate of labor hours exceeded the amount deemed reasonable by the
Government.  As a result, the Contractor's cost estimate contained $35,000 more than the
Government deemed reasonable.

At the meeting it was decided that EPA did not believe there was enough information known at
this point to determine whether the additional task was necessary. Therefore the agreement was:

   The Contractor would revise the WA SOW plan to delete the additional task. The Contractor
   would adjust the labor hours and cost estimate accordingly.

   EPA will review the status of work after the completion of Task 3 and the submission of
   Deliverable 2. If the proposed new task appears justified at that point, an amendment to the
   work assignment will be prepared.

cc: S. Smith, contract COR
                                      6-17

-------
10. Amending/Modifying the W A/DO/TO

   When a change is necessary, the WA has to be amended by the CO or the DO/TO has
   to be modified by the CO. In most cases, the issues raised by the
   WAM/TOPO/DOPO COR when reviewing the Contractor's proposed technical
   approach, staffing plan and cost proposal can be resolved through negotiations with
   the Contractor and by the Contractor's submission of revised portions of the plan
   after conclusion of negotiations. There are no uniform Agency guidelines on when to
   request an amendmen/modification. If the parties have agreed, for example, to delete
   tasks, add tasks, add or delete or change deliverables, change the dates for final
   deliverables, then these changes require  a WA amendment or a TO/DO modification.

   If the TOPO/DOPO/WAM COR or contract COR have questions on whether an
   amendment/modification is required, they should consult the CO.

   The procedure for preparing an amendment/modification request is discussed between
   the CORs and the CO. The body of the  amendment/modification may be written by
   the COR, but only the CO has the authority to issue it. The WAM/TOPO/DOPO
   COR should prepare a memorandum to the contract COR addressing the need for the
   amendment/modification and providing  appropriate background information.  An
   example of such a communication is:

      "I have  reviewed the Contractor's technical approach of its proposal and would
      like to request a modification to my  task order.  The purpose of this modification
      is:

          •  To modify the SOW in the task order to add a task (or tasks.)  Attached is
             a description of the additional or revised task(s.)

          •  To modify the SOW to delete a task (or tasks). Attached is a revised SOW
             with the deleted task (s) removed.

          •  To modify the SOW to revise a task (or tasks). Attached is the SOW with
             task(s) revisions.

          •  To revise the period of performance (shorten or lengthen).  Attached is a
             revised schedule."
                                 6-18

-------
      NOTE: Some Contracting Officers use an amendment to a WA to approve a WP.
      Other COs will use a memorandum; while others signify the approval by their
      signature on a standard office WA form used by some program offices.  Although
      the format may change, the COR needs to prepare whatever memo, cover sheet,
      etc, the CO and the contract requires. The COR will indicate that the technical
      approach, professional/ technical staffing plan, labor mix, estimated labor hours,
      other direct costs, total costs and completion date (as originally proposed or
      revised through negotiations) are acceptable. The COR then submits it to the CO
      through the contract COR. Whenever a new COR starts to place work with a
      Contractor, he/she should check with the CO and contract COR to determine how
      the process works for that particular contract.

11. Contract Situations Where Performance is Authorized Before Approval of a
   Contractor's Proposal/Work Plan

   Work Assignments, Delivery and Task Orders

   The biggest difference between WAs and DO/TOs is that, with a CR LOE contract,
   the CO issues the WA prior to the Contractor assembling its proposal/WP; wheras
   with a TO or DO, it can be handled either way.  Some of EPA's IDIQ contracts have
   an order that covers all of the proposal costs for a Contractor to respond to an Request
   For Quotation (RFQ), others issue the RFQ to all Contractor awardees, evaluate the
   responses, and then award the DO or TO to the Contractor that presents the  best
   overall value to the Government, both technical and price/cost considered.
   (a) CR Contracts

      Most CR contracts authorize the Contractor to start work as soon as the CO issues
      the WA or TDD. There are others that limit the Contractor's work to just the WP.
      The WAM COR can always limit the Contractor to working only on the WP or set
      a limit on the number of hours the Contractor can utilize prior to approval of the
      Contractor's proposal. However, usually the contract itself will specify a point at
      which work is to stop if the WP approval has not been received, or if the WP is
      rejected: Therefore, timely review of these documents is critical to ensure that the
      work is completed on time. Delays on the part of the Government can excuse a
      contractor, under the terms of the contract, from continuing performance

   (b) IDIQ Contracts

      Depending on the contract's terms and conditions and the pricing arrangement,
      the CO may unilaterally issue the TO or DO and require a response from the
      Contractor within a specified number of days. If the  contract is for commercial
      supply items, no written response is required from the Contractor unless the

                                6-19

-------
Contractor desires to offer an alternate delivery schedule. If the SOW for the TO
or DO is performance-based, the Contractor has been given the "what" and
"when," and the Contractor may be required to respond with the "how."  IDIQ
contracts with T&M/LH pricing may be issued unilaterally, or the CO may go out
with an RFQ with an attached SOW. The Contractor responds with a technical
and cost proposal (or possibly just a technical proposal) and everything is
negotiated before the TO or DO is issued. IDIQ contracts with CR pricing can
also be issued unilaterally as a TO with negotiations taking place on the
Contractor's response and the CO giving approval to the Contractor's technical
and cost proposal by sending an e-mail, by affixing his/her signature on a form, or
by a phone call followed by a written memorandum sent by fax and mail.  If the
IDIQ contract is part of a multiple award scenario, proposals are solicited from the
awardees prior to the issuance of a TO or DO.

Because of the variations, the TOPO, DOPO or WAM COR needs to consult with
the contract COR as to what is standard operating procedure and what would be
the best way to handle the tasking. If there is nothing to preclude the unilateral
issuing of a tasking document, often it is the deadlines and other time constraints
that dictate whether the CO issues the ordering/tasking document before obtaining
a technical and cost estimate from the Contractor.
                          6-20

-------
                                Exhibit 6 - 3
                                  Sample
                             TASK DIRECTIVE
CONTRACTOR:
CONTRACT NO:
WORK ASSIGNMENT NO:
TASK NO:
DATE OF DIRECTIVE:
  Technics Incorporated
  68-03-58-33
  8

  01/20/02
TD NO.    2
MAXIMUM HOURS
AUTHORIZED:          30
ESTIMATED COST:   $3,500.00
DUE DATE:           02/20/02
TASK TITLE:
DESCRIPTION OF TASK:    Review and comment on revisions in second draft of NCP and
 preamble
SPECIFIC TASK ACTIVITIES/DELIVERABLES
1 . Review second draft, determine consistency of revisions with
pertinent statutes (CERCLA as amended), existing National Contin-
gency Plan and preamble.
2. Meet with EPA staff to discuss revisions and the differences between
first and second drafts. At meeting discuss possible further revisions.
3 Prepare comments sheet with proposed language changes for final
draft.

{ } ADDITIONAL SCOPE ATTACHED
DEADLINES


02/10/02

02/14/02

02/20/02


COMMENTS:


 AUTHORIZING:
 Task Manager COR	
 Work Assignment COR:
 Contract COR:	
 Received By:
SIGNATURE
            {} Accepted     {} Rejected    {} Accepted with Exceptions (Attached
 Contractor:
                                  6-21

-------
                                  Exhibit 6 - 3 (Continued)
                          TASK PLAN FOR TASK DIRECTIVE #8-1-2
                                  (Review of NCP Draft #2)

                       CONTRACT NO. 68-03-5833 Technics Incorporated

PURPOSE

   This Task Plan represents Technics Inc.'s approach to performing the work described in EPA's Task
Directive #2 issued on January 20,2002. The objective of the task is to review and comment on
revisions incorporated into the second draft of the National Contingency Plan and preamble, based on
comments received from work group members and other internal and external reviewers, and propose
further revisions as pertinent in light of the statutory requirements of CERCLA, its Amendments and the
existing NCP.

TASK APPROACH

   This task involves comparing the revisions made and incorporated into the second draft of the NCP
with the language and requirements of CERCLA and its amendments, and the existing NCP. If any
inconsistency is identified, Technics will note those discrepancies on its comments sheet for discussion
with EPA staff. Teenies will also include comments on the apparent seriousness of the discrepancies
noted.

   After discussion with EPA staff, Technics will propose additional language changes to resolve any
discrepancies, or prepare, in its comments, a. justification  for the discrepancy as represented by EPA's
decision to maintain the proposed language.

    The attached is a summary of these activities, deliverables and due dates.
                                          6-22

-------
                                      EXHIBIT 6 - 3 (Continued)

                       SCHEDULE OF ACTIVITIES/DELIVERABLES/DUE DATES
    Activity
1.   Review second draft, conduct
    research as needed to determine
    consistency of revisions with CERCLA
    and its amendments, and with existing
    NCP and preamble.  Prepare comments.

2.   Meet with EPA staff to discuss questions
    raised/inconsistencies found as a result of
    revisions, and possible solutions.

3.   Draft proposed language changes and
    incorporate them into comments sheet

PROPOSED STAFFING AND BUDGET
Proposed staff for the task include:

Program Manager
Management Analyst
Program Analyst
Deliverable

Comments Sheet
Comments sheet with
language changes
    Rob Lockett
    June Lilly
    Roger Lite
   Due Date

   02/10/02
                           02/14/02
   02/20/02
 5 hours
15 hours
10 hours
                                           TOTAL
                        30 hours
Technics estimates that the project will require approximately 30 hours at a total labor cost of $3,000. There
are no anticipated direct costs.

SPECIAL REPORTING AND COORDINATION
None
 ISSUES AND ANTICIPATF.D PRQ.BLEMS
 None
                                           6-23

-------
Student Practical Exercise No. 1
           6-24

-------
        MODULE 7: ESTABLISHING AND MAINTAINING PROJECT FILES


A. INTRODUCTION

   The maintenance of complete and accurate project files is essential to managing all contractor
   work. This module elaborates on the major reasons for maintaining complete project files,
   describes the major categories of documents that the Contract COR and other CORs should
   maintain, and lists the individual items within each category. Potential file plans and a
   checklist for evaluating existing files are presented as models which a COR could adapt to
   his or her recordkeeping needs.  The module concludes with a discussion of the appropriate
   retention and disposition of project records.

B OBJECTIVES

   At the completion of this Module, you will be able to:

   Explain why complete records of all contract documents are important.

   Understand Federal and Agency policy on records management.

   Identify records which should be maintained by the various levels of CORs.

   Describe and  select a filing plan for maintaining those records.

   Describe the appropriate retention and disposition of contract file documentation records.

C IMPORTANCE OF MAINTAINING RECORDS

   Complete and accurate records enable the COR to meet several important objectives. These
   include:

   •  Effectively monitoring the technical and financial progress on the contract, work
       assignment (WA), task or delivery order (TO, DO).

   •  Responding to inquiries from within and outside of EPA concerning the contract, WA,
       TO or DO.

    •  Complying with Federal and Agency recordkeeping requirements.

    •  Providing an audit trail for the contract, WA, TO or DO.
                                         7-1

-------
I.  Effectively Monitoring Progress

   Effective technical and financial monitoring requires detailed documentation of:

   •   The Government's requirements involving objectives, tasks, deliverables, and
       schedules

   •   The Government's cost estimate for accomplishing the work.

   •   The Contractor's plan for performing the work

   •   The actual activities and products of the Contractor.

   •   For Cost Reimbursement or Time &Materials/Labor Hours for level-of-effort work,
       either  WAS or TOs the actual expenditures incurred on the project.

   •   Issues and problem areas arising on the project and efforts to resolve them.

   Complete project documentation, including everything related to the WA, TO, DO or
   contract and all amendments/modifications, plus technical directives, work plans,
   management plans, progress reports, all draft and final deliverables and memoranda on
   key issues, is essential to effectively track the technical and financial status of the project
   or contract

n. Responding to Inquiries

   Inquiries concerning the project may come  from within and outside of EPA such as:

   •   Sources within the program office including the contract COR (for TO, WAM and
       DO CORs), the COR's supervisor, the division, the laboratory or Regional office's
       center, or the office's program operations staffer Extramural Management Specialist
       (EMS); as well as senior management, such as Office Director, and the Senior
       Resource Official (SRO).

   •   Sources inside the EPA,  including the Contracting Officer, other parts of the Office of
       Acquisition Management (OAM), the Office of the Administrator (e.g., Freedom of
       Information Act (FOIA)  unit), the Office of Inspector General (OIG), the Office of
       General Counsel (OGC), and the Financial Management Center - Research Triangle
       Park (FMC-RTP).

   •   Organizations outside the Agency, such as the General Accounting Office, the Office
       of Management and Budget, or the Congress
                                      7-2

-------
   In order to respond in an accurate and timely manner, the COR needs to have complete
   records which:

   •  Document the contract's, WA's, TO's or DO's requirements, the Contractor's
      progress, and the Government's oversight of the project.

   •  Are organized in a manner which makes retrieval of specific information rapid and
      easy

   The CO and contract COR are ultimately responsible for the accuracy and completeness
   of the contract files. However, in practice, using the contract and tasking documents, the
   CO delegates much of this function to the contract COR, and the CORs who work as
   WAMs, TOPOs and DOPOs handle much of the day to-day responsibility for the records
   associated with their projects. For example, to avoid duplication, the WAM, TOPO or
   DOPO COR may be the holder of all draft and final deliverables and miscellaneous
   memoranda, while both they and the contract COR typically maintain copies of the
   tasking document (WA, TO, DO), work plans, progress reports, invoices and technical
   directives.  Inquiries from the internal and external organizations usually are directed to
   the contract COR, who in turn usually calls upon the second tier CORs to supply the
   necessary information. Thus, both tiers of CORs must maintain the necessary records to
   assist the CO in responding to the range of inquiries.

HI. Federal and Agency Recordkeeping Management Requirements

   Documents created or acquired in the conduct of Government business are considered
   official Agency records.  Such documents:

   •   Become the property of the U.S. Government.
   •   Provide a legal and historical record of the functions, accomplishments, and decisions
       of the Agency.
   •   Records of contracts, WAs, TOs, and DOs, are considered official Agency records.
       As such, they should not be haphazardly stored and then casually discarded.

    a.  Definition of a Record

       Records include all books, papers, maps, photographs, machine readable materials, or
       other documentary materials, regardless of physical form or characteristics, made or
       received by an agency of the United States Government under Federal law or in
       connection with the transaction of public business and preserved or appropriate for
       preservation by that agency or its legitimate successor as evidence of the organization,
       functions, policies, decisions, procedures, operations, or other activities of the
       Government or because of the informational value in them. (Taken from 44 U.S.C.
       Chapter 33, Sec. 3301)


                                       7-3

-------
   Several key terms, phrases, and concepts in the statutory definition of records are
   defined as follows:

   1.  Documentary materials is a collective term for records, nonrecord materials, and
      personal papers that refers to all media containing recorded information,
      regardless of the nature of the media or the method(s) or circumstance(s) of
      recording.

   2.  Regardless of physical form or characteristics means that the medium may be
      paper, film, disk, or other physical type or form; and that the method of recording
      may be manual, mechanical, photographic, electronic, or any other
      combination of these or other technologies.

   3.  Made means the act of creating and recording information by agency personnel in
      the course of their official duties, regardless of the method(s) or the medium
      involved. The act of recording is generally identifiable by the circulation of the
      information to others or by placing it hi files accessible to others.

   4.  Received means the acceptance or collection of documentary materials by agency
      personnel in the course of their official duties regardless of their origin (for
      example, other units of their agency, private citizens, public officials, other
      agencies, contractors, Government grantees) and regardless of how transmitted (in
      person or by messenger, mail, electronic means, or by any other method). In this
      context, the term does not refer to misdirected materials. It may or may not refer
      to loaned or seized materials depending on the conditions under which such
      materials came into agency custody or were used by the agency. Advice of legal
      counsel should be sought regarding the ^record" status of loaned or seized
      materials.

   5.  Preserved means the filing, storing, or any other method of systematically
      maintaining documentary materials by the agency. This term covers materials not
      only actually filed or otherwise systematically maintained but also those
      temporarily removed from existing filing systems.

   6.  Appropriate for preservation means documentary materials made or received
      which hi the judgment of the agency should be filed, stored, or otherwise
      systematically maintained by an agency because of the evidence of agency
      activities or information they contain, even though the materials may not be
      covered by its current filing or maintenance procedures.

b. Statutory Authority

   Some of the legal authorities are:
                                   7-4

-------
   1.  The Freedom of Information Act as amended.

   2.  The Privacy Act of 1974.

   3.  Administrative Procedures Act.

   4.  Destruction of Records.

   5.  The Electronic Communications Privacy Act of 1986.

   6.  Budget and Accounting Procedures Act of 1921.

   7.  Records Management by the Archivist of the United States and the Administrator
      of General Services.

   8.  Paperwork Reduction Act of 1980, as amended, and its Reauthorization in 1995.

   9.  OMB Circular A-130, Management of Federal Information Resources.

    10. Applicable Federal Information Processing Standards (FTPS) publications.

c.  EPA Responsibilities for Records

   For the Agency, the Administrator has delegated the responsibility for the setting
   overall policy and general oversight of the records management to the Assistant
   Administrator for Environmental Information (who also serves as the Designated
   Senior Official for IRM), Office of Environmental Information (OEI). However,
   every person who works for the Agency is responsible for Agency Records.  Some
   people just spend more time at it than others, because they are in charge of a specific
    series of records.  If you create a document using a word processor, enter information
    into a database, file a document in a folder, answer an inquiry from the public,
    respond to a FOIA request, or do anything else that documents your activities for the
    EPA, you are a records custodian. You are responsible for ensuring the safety, timely
    availability, and proper retention and/or transfer of information in your custody.

    If you are in charge of managing a specific series of records, you are responsible for
    organizing, maintaining and retiring those records. Some of these responsibilities are
    laid out in Directive  2100, the Information Resources Management Policy
    Manual, Chapter 10, Section 6 and are:

    •   Agency managers are responsible for ensuring that their programs are properly
       documented and that records created by their programs are managed according to
       relevant regulations and policies.
                                   7-5

-------
   •   Information system managers (program managers) are responsible for overseeing
       the creation and use of electronic records in keeping with federal regulations and
       Agency policy. This includes coordination with the records officer to establish
       recordkeeping requirements including a retention period and to implement
       authorized disposition instructions for system information and documentation.
       Systems managers also coordinate with records officers to develop specific
       information resource management plans to meet future system information needs.

   •   ADP or Information Technology Managers are responsible for managing ADP
       resources, as well as notifying the systems managers and records officers of
       technology changes that would affect access, retention, or disposition of system
       records.

   •   All Agency staff and agents of EPA shall:

       1.  Conduct work in accordance with Federal records management regulations
          and the Agency's records management policy and procedures.

       2.  Create and manage the records necessary to document their official activities.
          This includes creating appropriate records documenting meetings,
          conversations, electronic mail messages, telephone calls and other forms of
          communication that affect the conduct of official Agency business.

       3.  Only destroy records in accordance with approved records disposition
          schedules and never remove records from the Agency without authorization.

       4.  File personal papers and nonrecord materials separately from official Agency
          records.

d. Guidance for maintaining and disposing of Agency records

   CORs can find policy and guidance both electronically and in hard copy publications.
   A comprehensive guide to records management can be found on the Agency Intranet
   website arhttp://intranct.epa.gov/records.  The schedules and records management
   policy are those that are approved by the National Archives and Records
   Administration. Drafts of proposed policy and records schedules are only available
   on the Intranet Established National Records Management Program (NRMP) is
   accessible on the Internet at http://www.epa.gov/records. The Intranet site can only be
   accessed from Agency computers.

   The NRMP policy applies to all records of the Environmental Protection Agency
   (EPA), as defined under the Federal Records Act (44 U.S.C. 3101), regardless of
   medium (including paper, microform, electronic, audiovisual, and record copies of

                                    7-6

-------
   Agency publications), which are created, collected, processed, used, stored, and/or
   disposed of by EPA organizations, employees, and facilities, as well as those acting as
   its agents, such as States, Indian tribes, contractors, or grantees. The publications
   referred to on the Inter and Intranet are:

   •  EPA Records Management Manual (EPA 2160)
          The EPA Records Management Manual, published in 1984, describes Agency
          policy and guidelines for organizing and maintaining paper and electronic
          media files.  A draft revision to the Manual can be read and reviewed on the
          Internet.

   •  IRM Policy Manual, Chapter 10  (EPA 2100)
          The IRM Policy Manual, Chapter 10, revised in 1996, presents the most
          current Agency policy, definitions and overall responsibilities for records
          management.

   •  Using the Federal Records Center - A Guide for Headquarters Staff
          This document, revised in 1995, provides more current guidance than the
          Records Management Manual for EPA headquarters staff for labeling and
          packing records for shipment to the Federal Records Center (FRC).

   •  Managing Electronic Records
          The fourth document, published in 1990 by the National Archives and
          Records Administration, provides guidance to Federal Agencies in
          maintaining electronic records.

   •  EPA Records Control Schedules
          The EPA Records Control Schedules, published in 1985, are currently under
          revision. The original schedules provided retention and disposition of contract
          management records by EPA program office. Also, there were separate
          schedules for these records for headquarters offices and laboratories. The new
          schedules will address retention and disposition of contract (and other
          extramural management) records on an Agency-wide basis.

e.  Importance of Comprehensive Records Management

   Records are a valuable information resource whose uses go beyond facilitating
   immediate operational needs. Records serve a number of broader purposes including:
   longer-term administrative and program planning needs, evidence of Agency activity,
   use by other Programs in the Agency, protection of the legal and financial rights of
   the Government and its citizens, effective oversight by Congress and other authorized
   agencies, and the retention of an official record for historical purposes.  Records serve
   as the Agency's memory; they are of critical importance in ensuring that the
   organization continues to function effectively and efficiently.

                                   7-7

-------
   Contracts and individual WAs, TOs, and DOs can be audited on a scheduled or
   unscheduled basis by OAM, the OIG, the GAO, or other organizations.  Occasionally
   more than one audit may be performed in the course of a contract. From the
   beginning of a contract, the COR's records on the project should provide an adequate
   audit trail to document:

   1.  The Government's requirements (as reflected by the SOW and all
      amendments/modifications,and technical direction)

   2.  The Contractor's plan and performance (as reflected by the work plan,
      management plan, staffing plan, progress reports and deliverables)

   3.  The Government's oversight of the work (as reflected by comments on
      deliverables, records of approvals, and other memoranda)

   An audit trail is particularly important when there are cost or performance issues
   associated with the work assignment. For example, there may be a question of
   whether the Contractor exceeded the scope of the contract, WA, TO or DO. A good
   audit trail can assist in addressing this issue by matching what work the Contractor
   did against what was requested.

   Also, by documenting all technical direction and reviewing Contractor reports against
   that direction, the COR can identify and avoid instances of unauthorized procurement
   actions (described in more detail in another Module).

f .  Types of Records That Should Be Maintained

   The types of records that the WAM should maintain may be grouped into five
   categories:

   •  Planning records

   •  Performance records

   •  Deliverables

   •  Miscellaneous correspondence

   •  Administrative records

   There is naturally some overlap in these categories. For example, Technical Direction
   may be considered a planning record, since it helps definitize the requirements for a
   work assignment, or correspondence, because it transmits important written guidance
   to the Contractor.

                                   7-8

-------
"3* NOTE:    To defmitize means to make clear and distinct the parameters of the
              project in terms of final costs/prices/end products/expected outcomes,
              etc. It is a limiting agreement between the Government and the
              Contractor.

1.  Planning Records

   These include records which document the requirements of and management
   responsibilities for the work. These records describe the specification of the work
   (including changes) to be performed by the Contractor, and the basis for these
   specifications. They include the following:

   (a) Statement of work and related information such as Contractor reporting
       requirements for the overall contract.

   (b) Quality Assurance Program Plan for the overall contract (if applicable).

   (c) Contract, WA, TO or DO package, which can include the following:

       (1)  Statement of work*

       (2)  Independent Government cost estimate and associated work sheets*

       (3)  Standard cover sheet/form (if applicable)

       (4)  Procurement Request (PR) (EPA Form 1900-8)

       (5)  COR Nomination form (EPA Form 1900-65A) or copy of form from
            contract file

       (6)  Training Deferment Request (as needed)

       (7)  COR Appointment Memo or other correspondence from CO outlining
            duties and responsibilities

       (8)  PC Site Coodrinator or SIRMO approval for IT services (as needed)

       (9)  Quality Assurance Review form (if required)

       (10) OPEI and OMB Information Collection Request and approval (if public
            survey is involved)

        (11) Justification of Need (JON) for GFP (as needed and if a deviation is


                                 7-9

-------
            obtained first)

       (12)  Intra-agency funding request and approval (as needed)

       (13)  Justification and approval of Sensitive and/or Vulnerable Services (as
            needed, if not approved as a part of the pre-award process)

       (14)  Non-duplication of effort statement (required by some Contracting
            Offices - indicates that the WA, DO or TP does not duplicate other
            work)

       (15)  Quality Assurance requirements for the WA, TO or DO, in accordance
            with the FAR or as defined by Office of Environmental Quality

       (16)  Contractor's plan to accomplish the effort (initial/revised) and the
            Government's notice of approval if required

       (17)  Amendments to the WA/Modifications to the TO or DO*

       (18)  Technical direction

2. Contractor Performance Records

   These include records which document the Contractor's technical and financial
   performance on the work assignment. These include:

   (a) Monthly combined technical/financial progress reports

   (b) Contractor invoices - "Public Voucher for Purchases and Services other than
       Personal," and  "Public Voucher,  Continuation Sheet" (SF 1034 and SF 1035)

   (c) Government reviews of invoices, using checklists or other documentation

   (d) Special technical or financial reports prepared by the Contractor as
       appropriate, e.g., detailed labor distribution or report of other direct costs.

   (e) Financial tracking reports produced from automated or manual systems, e.g.,
       spreadsheets showing expenditures vs. budget, or payments vs. appropriations.

   (f) Forecast of carryover funds

   (g) Performance Event Reports (EPA Form 1900-41B or equivalent) for CPAF
       contracts
                               7-10

-------
   (h) Other locally generated forms or reports which the COR WAM, TOPO, or
       DOPO uses to provide input to the contract COR and CO concerning the
       Contractor's technical and cost performance

   (i)  Inventory (list and description) of GFP

   Several of the above records are used together in monitoring the Contractor's
   performance. For example, careful review of the combined technical/financial
   progress reports, together with invoices and other special reports, can assist the
   COR in identifying inappropriate charges, the need for amendments/modifications
   and warn of potential cost overruns.  Reports from several months are often
   needed for this purpose.  An up-to-date and well organized file system ensures
   that these records are easily obtained when needed.

3.  Deliverables

   The COR's files should include:

   (a) Draft(s) and final versions of each deliverable submitted to the Government

   (b) Government review comments on the deliverable (presented either in separate
       memoranda or in "marked-up" drafts)

   (c) Any evaluation form(s) used in the review

   If the SOW calls for draft and final versions of a deliverable, it is essential that
   both versions be retained. There is the natural tendency to discard the draft, but
   this is an item which an auditor will often ask for.  Also, the retention of
   marked-up draft deliverables serves to document the actual exercise of contract
   oversight by EPA.

   On some WAs, TOs, and DOs, deliverables are prepared for a "user" in  the
   laboratory or office other than the COR. In such cases, a Contractor might submit
   the deliverable to the end user,  and not to the COR, while noting the submittal in
   the monthly progress report. It is essential, however, that the  COR receive and
   maintain copies of all deliverables.

   When the COR is coordinating a peer review of a deliverable, his/her files should
   indicate that the COR arranged for the review and consolidated and reconciled the
   responses.

   In cases where deliverables are other than written documents  (e.g., samples, water
   or air samples), which are not easily maintained, evidence of receipt of the
   deliverable can be maintained through transmittal memoranda or notations in the

                                7-11

-------
   monthly progress reports.

   Questions have been raised on whether copies of deliverables must routinely be
   sent to the CO. There is no universal Agency requirement for this, although some
   contracts may specify that the Contractor do this. Also, some contracts may
   require the Contractor to send a copy of a final report to the EPA library; however,
   this is not a common requirement.

4. Miscellaneous Correspondence

   Correspondence includes TO, DO or WA related:

   (a) Letters

   (b) Records of meetings and telephone discussions

   (c) Memoranda for the record

   (d) Technical Direction (This may also be considered part of Planning Records or
       Performance Records)

   (e) Communication records maintained in these files may be:

       (1)   Between the COR WAM, TOPO, or DOPO and the contract COR or
            other Government personnel at the Agency

       (2)   Between the CORs and the Contractor

5. Administrative Records

   These are documents which do not pertain to  an individual WA, TO, or DO, but
   apply to the contract management responsibilities of the COR. Examples of these
   records are:

   (a) Confidential Financial Disclosure Statement (SF-450)

   (b) Pertinent Office/Agency regulations, orders or memoranda, such as EPA
       Order 1901.1 A on Personal Services, OFPP Policy Letters, various EPA
       Ethics advisories, or FMD funding policy transmittals.

   (c) OAM or Agency reports on contract management, such an OIG survey or
       FAO audit reports.

   (d) Contract Management Plan for the overall contract, including associated

                               7-12

-------
          management controls for addressing potential vulnerabilities. (See Chapter 2
          of the Contracts Management Manual and Module 3 for dollar thresholds.)

          *& NOTE:  The Financial Disclosure Statement is typically maintained by
                      the Deputy Ethics Official (the Laboratory, Center or Office
                      Director, or, if delegated, the Division Director). The COR may
                      wish to retain a copy for his/her records.

g. Selecting a Filing System

   There is no single preferred system for filing work assignment records.  The
   effectiveness of a system depends less on its specific categories than on dedication of
   the person maintaining it.  A filing system is easiest to use if its categories are logical
   and meet the needs of its user. The previous sections discussed the types of
   documents which the COR should maintain.  The National Records Management
   Program Internet website has very good samples of filing systems at
   http://www.epa.gov/records/tools. You can also find the Agency approved record
   schedules with titles there to assist you in setting up your filing system. The file
   guidance samples are only a suggested format. The two most important things to
   remember are: (1) the COR should select a system that meets  his or her needs; and,
   (2) that whatever system is used, that it be used consistently.  The idea should be to
   make document retrieval as easy as possible The plan chosen should also fit the
   personal organizational approach of the COR.
h.  Retaining Project Records

    1.  Responsibility for Maintaining Records

       As indicated earlier, the CO has the ultimate responsibility for maintaining
       contract records.  He or she may delegate the responsibility for some records to
       the contract COR who may, in rum, delegate responsibility for maintaining certain
       records to the CORs for the WAs, TOs, or DOs issued under the contract.

       Close coordination between the all of the CORs on the contract is necessary to
       ensure that all appropriate records are maintained.

       Upon completion of the project, the WAM, TOPO, or DOPO should coordinate
       with the contract COR Officer for storage of the files, i.e., where the files should
       be stored and who should maintain them. Since the an employee may be
       reassigned during or after a WA, TO or DO, the files should be identified and
       remain with the office, service center, or laboratory, as the case may be, rather
       than with an individual.
                                    7-13

-------
2. Length of Time Records Should be Maintained
      •'o
   The current records schedule for acquisition management, revised January 31,
   2001, requires the Agency to maintain individual records 6 years and 3 months
   after final payment, then they can be destroyed when no longer needed unless
   related to Superfund contract management. (See Agency-wide Guidance at
   website). During this time period of retention, the schedules permit the records to
   be stored either in the program office or the Federal Records Center; however,
   since the FRC requires a destruction date, the records may be retired to the FRC
   only after contract close-out, or after a destruction date has been estimated. Thus,
   records for contract-related work performed early in the life of a five-year
   contract, would need to be retained for over 11 years plus the time for contract
   close-out.

   Contract records which are Superfund Site-Specific (i.e., related to cost recovery)
   have a longer retention period. Such records are to be kept, in the program office
   or the FRC, for 30 years from the expiration of the project.

   The WAM, TOPO or DOPO COR and the contract COR need to be able to access
   contract records quickly to respond to inquiries and audits. While such records
   should be able to be retrieved easily from the  FRC or a central storage facility, it
   would be desirable to have the records close at hand. Thus, it is recommended
   that the contract COR, in conjunction with the DOPO, TOPO or WAM COR
   maintain records in a location near their office at least three years after completion
   of the DO, TO or WA.  Then the records may be moved to another storage
   location in the building if desired.

   You can find the time frame for retention of different types of records by going to
   the Internet website.  For example, final products and deliverables are covered in
   EPA 258. Programmatic or mission-related deliverables (final versions) are to be
   retained (either in the program office or at the FRC) for 20 years after the end of
   the project and then transferred to the National Archives for permanent retention.
   Non-programmatic or administrative deliverables are to be retained for seven
   years and then may be destroyed. The seven year retention period for supporting
   documentation is to make it consistent with the statute of limitations on claims
   against the Agency.

3. Electronic Mail and Official Records

   E-mail messages should be treated the same way as paper correspondence. An e-
   mail is a record if it documents the EPA mission or provides evidence of an EPA
   business transaction and if the COR would need to retrieve the message to find
   out what had been done or to use it in other official actions. The National
                               7-14

-------
Records Management Program website has a several pages of common questions
and answers about e-mail at http://www.epa.gov/records/tools/emailq&a.htm
which should answer most of the questions about retaining and maintaining
electronic records.

The EPA Records Management Manual provides guidance on requesting
micrographic conversion of paper records. If this option is chosen, the COR
should recognize the need to:  (1) provide for the conversion of electronically
stored records to accommodate new hardware or software as required; (2) prevent
unauthorized access to the records. Also, the National Archives  has very stringent
requirements on the transfer of electronically stored records. The Office of
Environmental Information is working with other Federal Agencies on this issue.
Security is a major concern.

Questions regarding records retention requirements or other records management
issues should be directed to the NRMP Help Desk at 202-260-5926 or via e-mail
to nrmp@epa.gov.
                            7-15

-------
                                      Exhibitl-I
                               SAMPLE FILE PLAN A
1.  Statement of work and related information such as Contractor reporting requirements for the
    contract1

2.  Quality Assurance Program Plan for the contract1

3.  WA, TO or DO package

       - Independent Government estimate and worksheets

       - Statement of Work

       — COR Nomination and Appointment Form (EPA 1900-65A)

       - COR Appointment Letter

       - Training Deferment Request and Approval

       - Procurement Request

       - Office of Environmental Information, Office of Policy and Planning Division for IT
          hardware and software related effort.

       - Office of Policy, Economics, and Innovation Review and Approval if public
          information collection (ICR) from 10 or more individuals is involved

       - Office of Environmental Information for Quality Assurance Review forms (as
          needed)

       - Justification of Need for GFP and copy of Deviation

       — Intra-age'hcy funding request and approval

       - Justification and approval for Sensitive and/or Vulnerable Services (if needed)

       - Non-duplication of effort statement

1 Although these items pertain to the overall contract, as opposed to an individual requirement,
the COR should retain these in his/her files. If the COR manages multiple tasking/ordering
projects under a given contract, these items might be kept in a separate file instead of the
individual WA, DO or TO file.

                                        7-16

-------
                                 Exhibit 1 (Continued)
                          SAMPLE FILE PLAN A (Continued)
4.  Contractor's staffing, management, cost proposal and any required Government notice of
    approval

5.  Amendments to the work assignment/Modifications to the Task/Delivery Order

6.  Technical direction documents

7.  Combined Monthly Technical/Financial Progress Reports

8.  Invoices and invoice reviews

9.  Other special technical/financial reports

10.  Financial tracking reports

11.  Deliverables and related correspondence (approvals, rejections, comments)

         Draft deliverables

         Final deliverables

12.  Inventory of GFP (list and description)

14.  Correspondence

         Letters

         Records of meetings and telephone discussions

         Memoranda for the record

15.  Evaluations of Contractor performance

         Performance Event Reports (EPA 1900 - 4 IB)

    —   Past Performance Evaluation input for database

    -   Other reports  as required

16.  Administrative information (applies to all work assignments)

         Confidential Financial Disclosure Statement

    -   Agency/program regulations/orders, directives, memoranda

    —   Agency/program reports on contract management

    -   Contract Management plan for the overall contract, including Management Controls


                                         7-17

-------
                            Exhibit  ^-2,



     CHECKLIST FOR EVALUATING DO, TO, or WA FILES


Documents are grouped into logical categories

Documents are filed in labeled folders (in chronological order within the folder)

Each file contains the following documents (those with * are mandatory)

   	  Statement of Work for Contract*

   	  Quality Assurance Plan for Contract

   	  DO, TO or WA Package

          	  Statement of Work*

          	  Independent Government estimate and worksheets*

          	  Procurement Request (EPA 1900-8)

          	  COR Nomination and Appointment Form (1900-65 A) original
                or a copy of signed form from contract file*

          	  COR Appointment Letter or other written instructions regarding
                COR's delegated duties and responsibilities*

          	  Training Certificate or Deferment Approval

          	  Office of Environmental Information, Office of Policy and
                Planning Division approval for IT hardware and software related
                effort (or a copy if approved at the contract level)

          	  Office of Policy, Economics, and Innovation Review and
                Approval if public information collection (ICR) from 10 or more
                individuals is involved (mandatory if this is what is required by
                the WA, TO or DO or a copy of approval if granted at the
                contract level)

          	  Justification of Need for GFP and copy of Deviation

          	  Justification and approval for Sensitive and/or Vulnerable
                Services or a copy of approval obtained at the contract level)

          	  Conflict of Interest Determination

          	  Contractor's staffing, management, cost proposal and any
                required Government notice of approval*
                            7-18

-------
       Exhibit 2 (Continued)



Amendments to WA/Modifications to DO or TO*

Technical Direction Documents*

Technical Progress Reports (in chronological order)

Financial Progress Reports (in chronological order)


Invoices (in chronological order) with Checklists and Review
Comments

Deliverables (Drafts, Finals, Government Comments)*

Past Performance Evaluation*

Other Evaluation Forms

CPAF Evaluation Forms

Peer Reviews
            7-19

-------

-------
        MODULE 8: MONITORING THE CONTRACTOR'S PERFORMANCE


A. INTRODUCTION

   Performance monitoring is crucial in assuring that the Contractor understands the work
   requirements and performs in a manner to produce quality results within the time required.
   Once the task order, delivery order or work assignment has been issued, and any plan
   submitted by the Contractor for performing the effort including staffing and costs (if
   applicable) is approved, it is up to the COR to monitor the Contractor's performance to
   ensure that EPA obtains a quality product, on-time, and within cost. Before commencing
   monitoring activities, it is essential that the COR be throughly familiar with the requirements
   of both the basic contract and the tasking document.

   The fundamental tenant is READ THE CONTRACT. Become thoroughly familiar with the
   specific obligations of both the Contractor and the Government. The contract may require
   EPA to provide property or data to the Contractor. If the property or data is not provided on
   time, the Contractor may have an excuse for delaying performance or for a monetary claim
   against the Government. CORs must be very careful to guard against such potential delays
   caused by the Government, and should develop some type of schedule, coordinating with
   other EPA offices, if appropriate, for the timely fulfillment of these obligations.

   The COR needs to use Contractor's approved plan as a guide to the technical approach and
   staffing the Contractor will use.  One of the COR's duties should be to make a list of each of
   the major tasks and all associated deliverables,  reporting requirements, and deadlines, plus
   any specific inspection requirements and duties of the Government. This list should be kept
   up-to-date by the COR, and used as a tool for monitoring progress and determining the extent
   of contract completion.

   Basically there are three areas in which the COR monitors the Contractor's performance:

   •  Technical progress, quality of deliverables or services

   •  Schedule compliance (meeting due dates)

   •  If a T&M, LH, or CR contract, staying within cost estimates

   This Module will cover monitoring technical and  schedule issues.  (Another next module
   addresses monitoring cost issues.)  Under the broad category of "technical monitoring," the
   course will cover:

   •  Giving technical direction

   •  Avoiding vulnerabilities related to technical monitoring,

                                        8-1

-------
    •  Reviewing deliverables

    •  Conducting meetings

    •  Reviewing monthly progress reports

B.  OBJECTIVES

    At the completion of this Module, you will be able to:

    •  Define appropriate technical direction.

    •  Identify what an unauthorized commitment is and its implications.

    •  Describe general procedures for reviewing Contractor deliverables.

    •  Describe how meeting or site visits may be used to monitor Contractor performance.

    •  Describe the information provided in a monthly progress report and how it is reviewed.

C.  TECHNICAL MONITORING

    I.  Importance of Effective Technical Monitoring

       a.  Background

          Most Agency contracts are either cost reimbursement or fixed price.  However, within
          certain programs, straight T&M contracts or IDIQ contracts with T&M or LH pricing
          are the more common type of contract.  In each of these contracts with T&M pricing,
          orders are placed using the loaded fixed rates in the contract and each tasking
          document has a ceiling price. This type of pricing arrangement is used both with
          Agency and with Inter-Agency contracts between the EPA and GSA, EPA and
          NASA, and EPA and other Government agencies where we are authorized to order
          work on Government-wide contracts. Both CR and T&M types of contracts  involve a
          lot of uncertainties. The Government is unable to precisely define the work product,
          including the extent and duration of work needed. Their largest drawback is the lack
          of any positive incentive for the Contractor to use labor efficiently and controls costs.

          Note that under a fixed price contract where the statement of work is more definitive,
          if the services do not conform to the contract requirements, the Government may
          request that the Contractor reperform the services at no increase in contract amount.
          Under cost reimbursement contracts, if services do not conform with contract
          requirements, the Government may require the Contractor to perform the services
          again in conformity with contract requirements./™- no additional fee; however, the
          Government may be required to reimburse some or all  of the Contractor's costs for

                                       8-2

-------
   reperformance. Under T&M or LH contracts or task orders for services, whether the
   SOW is completion or level-of-effort will determine the extent of the Government's
   liability for reperformance costs.

   This is why it is so important for the COR to closely monitor the Contractor's efforts
   in order to ensure the Government gets a quality product, on time, and within budget.
   When the Government starts with a less precise statement of work, the COR will be
   responsible for providing guidance to the Contractor in performing the work—this is
   called technical direction.  A great deal of time and effort are required by the COR to
   guide the Contractor's performance and effectively monitor the Contractor's progress.
b. Caveats for Environmentally-Related Measurements

   If your TO, DO or WA involves environmentally-related measurements which are
   funded by the Agency or which generate data mandated by the Agency, you must
   perform technical assessments of the Contractor's quality assurance activities to
   ensure the Agency receives data which is scientifically valid, defensible, and of
   known precision and accuracy. All contracts involving environmentally-related
   measurements must be approved by the Program Office Quality Assurance Officer.
   For more information see EPA Order 5360.1, Policy and Program Requirements to
   Implement the Quality Assurance Program, or contact the Office of Environmental
   Information for Quality Assurance Review for correct procedures.

c. Technical Direction Contract Clause

   The basic contract clause included in any Agency contract that authorizes technical
   direction is included here. The clause defines what technical direction is, who is
   authorized to give it, and what it cannot do.  Included are comments in italics which
   are not part of the clause.

   Technical  Direction - Dev (EPAAR 1552.237-71)(Apr 84)

   (a) The Project Officer is the primary representative of the Contracting Officer
   authorized to provide technical direction on contract performance. Generally, the
   contract COR will monitor the overall contract, while the COR TOPO, DOPO or
   WAM monitors her/his specific tasking document.

   (b) Individuals other than the Project Officer may be authorized to provide technical
   direction. If individuals other than the Project Officer are authorized to provide
   technical direction, their names will be specified in the contract, delivery order, work
   assignment or technical direction document as appropriate.  A Delivery Order Project
   Officer, Work Assignment Manager or Task Manager is authorized to provide
   technical direction, subject to the limitations set forth below, only on his/her delivery
   order, work assignment or technical direction document.
                                  8-3

-------
    (c) Technical direction includes:

       (1) Direction to the Contractor which assists the Contractor in accomplishing the
          Statement of Work.

       (2) Comments on and approval of reports or other deliverables.

    (d) Technical direction must be within the contract and the delivery order, work
    assignment or technical direction document statement of work.  The Project Officer or
    any other technical representative of the Contracting Officer does not have the
    authority to issue technical direction which (1) institutes additional work outside the
    scope of the contract, delivery order, work assignment or technical direction
    document; (2) constitutes a change as defined hi the "Changes" clause; for example,
    changing specifications, place of delivery; (3) causes an increase or decrease in the
    estimated cost of the contract, delivery order, work assignment or technical direction
    document; (4) alters the period of performance; or (5) changes any of the other
    express terms or conditions of the contract, delivery order, work assignment or
    technical direction document.

    (e) Technical direction will be issued in writing or confirmed hi writing within five
    (5) calendar days after verbal issuance. One copy of the technical direction
    memorandum will be forwarded to the Contracting Officer and the Project Officer.

d.  Appropriate Technical Direction

    The Module on Pervasive Contracting Issues addressed how to appropriately use
    Contractor services, including the use of technical direction. It's important to
    remember several points made in that module. First, only the COR can provide
    technical direction, not his supervisor or a co-worker.  Only individuals nominated
    and appointed by the CO are authorized to give it. This direction  must be given from
    the COR to the Contractor project manager, not to individual Contractor employees.

    Note the limitations on technical direction listed in paragraph (d) of the Technical
    Directions clause. If technical direction crosses into one of the areas listed, you will
    have crossed the line between monitoring the contract into changing the contract.
    Remember, only the CO has the authority to make changes to the contract. When
    CORs overstep their authority by directing changes which may have a cost impact, the
    result is called a constructive change.

    Appropriate technical direction is guidance within the statement of work.  Some
    examples of technical direction include:

    1.  Directing the Contractor to provide both positive and negative responses in an
       industry survey.
                                  8-4

-------
2.  Directing the Contractor to modify the algorithm used in an emission estimation
   model as a result of review by the COR of the results of a test of the model.

3.  Providing comments on a deliverable by means of a memorandum summarizing
   strengths, weaknesses, and desired changes or returning of a "marked-up" draft.

4.  Issuing revised, standard laboratory operating procedures for the Contractor to use
   in analyzing air quality samples.

5.  Steering scientific research away from specific lines of inquiry toward others
   based on the needs of the Agency.

Appropriate technical direction does not change the SOW. For a guide in deciding
whether an action constitutes technical direction or a constructive change, the COR
should ask herself/himself whether the action changes what was agreed upon in the
Contractor's approved plan. If it causes a change, then it probably is a constructive
change, which would be illegal.

In certain circumstances, a COR could be found to be personally liable for costs
associated with direction to the Contractor that cause an increase in the Contractor's
costs. Although specific incidents of personal liability at the Agency are few, this in
no way diminishes the risk of personal liability. Even without a finding of financial
liability, an IG, internal or external GAO report that finds a COR involved in
inappropriate technical direction can have a major impact on a COR's professional
career.

Always document technical direction. An example of a Technical Direction
Memorandum is presented in Exhibit 8-1. Exhibit 8-2 is a service request form
which may be used request specific services under work assignments with on-site
Contractors. Check with the CO or contract COR to determine if there is a
standardized format under your contract.
                               8-5

-------
                                             Exhibit 8-1
                                              SAMPLE
                  Environmental Protection Agency
                     TECHNICAL DIRECTION
                                                                Contract No.
                                                                Contractor:
                                                                Work Assignment WA
  Contract COR:
                     Phone:
  THIS TECHNICAL DIRECTIVE DOCUMENTS REFERENCED
   A meeting? _   Voice/E-mail Message	
              Phone conversation

   memo or deliverable?	
If so, when_
If so, when_
with whom_
with whom
Name of Deliverable:
  Work Assignment Task Number:
 I CERTIFY THAT THIS TECHNICAL DIRECTIVE DOES NOT REQUEST SERVICES THAT ARE INHERENTLY GOVERNMENTAL
 FUNCTIONS AND THAT IT DOES NOT ALTER THE (1) STATEMENT OF WORK, (2) LEVEL OF EFFORT, (3) COST OF PERFORMING THE
 AUTHORIZED WORK, (4) NUMBER OF DELIVERABLES, OR (5) THE DUE DATES OF DELTVERABLES FOR THE ABOVE REFERENCED
 WORK ASSIGNMENT.
 COR Signature
        Date
Original to Contractor

cc: WAM COR file    Contract COR    Contracting Officer
                                               8-6

-------
                                          Exhibit 8 - 2
                            SAMPLE SERVICE REQUEST FORM
Contractor:    _

Contract No:

Date Requested:
       Task Order No:
       Date Needed:
                               Work Category: (see below):   X
Description of Work
    1.       Take small subsamples and analyze "low lead (Pb)" brass value alloy received
            for lead (Pb), copper (Cu), zinc (Zn), bismuth (Bi), tin (Sn) and phosphorous (P).
    2.       Similarly analyze three values for prior leaching tests as above.
    3.      Perform analyses in accordance with EPA-approved protocol for analyses of alloy
            materials as described in WA 95-8.
Work Categories

      1.  Routine analytical support
      2.  Method implementation on instrument
      3.  Method testing
      4.  QA/QC evaluation/reporting
      5.  Experimental data analysis
6. X-ray diffraction qualitative analysis
7. Instrument interfacing
8. Control sampling system development
9. Special analysis
Task Order Project Officer:

Contract COR: 	
Contractor PM Acknowledgment:
                     Date:
                     Date:
                     Date:
                                             8-7

-------
D. UNAUTHORIZED COMMITMENTS

   In certain instances, inappropriate technical direction may constitute an unauthorized
   commitment.  To create an unauthorized commitment situation means that a COR or other
   Federal employee gave direction to the Contractor that that individual had no authority to
   give.

   •  Example 1 - A Federal employee told the Contractor to start work before the CO had
       signed the TO or issued the WA. Only CO can instruct the Contractor to start work prior
       to the actual signing of a tasking document.  If the circumstances warrant, the COR
       should contact the CO and explain why the effort has to begin immediately.

   •  Example 2 - The Contractor needs an extension of a period of performance of a TO, DO
       or WA, and sends in a request for the extension to the CO and COR.  If the COR tells the
       Contractor to keep working past the ending performance date, the COR has taken an
       action for which she/he has no delegated authority.

   In each example, the COR has taken an action that is not binding solely because the
   Government representative who made it lacked the authority to enter into that agreement on
   behalf of the Government, i.e., the employee is not a CO with delegated procurement
   authority.

   In both of the above examples, if the direction had been given by a person with delegated
   procurement authority, i.e., the CO, it would be legally binding. Neither were illegal or
   prohibited actions, so these actions could be "ratified." A "ratification" is the act of an
   official with the authority whereby the official approves and makes valid the unauthorized
   commitment. It can only occur if the action would have been valid if it had been made by the
   CO.

   An action may be ratified if:

       I.     Supplies or services have been provided to and accepted by the Government, or
             the Government otherwise has obtained or will obtain a benefit resulting from
             performance of the unauthorized commitment;

       n.     The resulting contract would otherwise have been proper if made by an
             appropriate contracting officer;

       EL   The contracting officer reviewing the unauthorized commitment determines the
             price to be fair and reasonable;

       IV.   The contracting officer recommends payment and legal counsel concurs in the
             recommendation, unless agency procedures expressly do not require such
             concurrence; and

       V.    Funds are available and were available at the time the unauthorized commitment
             was made.
                                        8-8

-------
At EPA, all ratifications with a dollar value over the micro-purchase threshold (currently
$2,500.00) must be forwarded from the program office's Division Director to the CO's
Division Director. The small dollar ($2,500.00 or less) value ratifications can be done by
the Service Center Managers, Regional Contracting Officer's Supervisors

Not all unauthorized commitments can be ratified. For example, a COR directing a
Contractor to use a particular subcontractor cannot be ratified because no one, not even a
CO, and direct that action. Another example would be requesting a Contractor to
determine the application of a regulation because the FAR defines that type of action to
be an inherent Government function.

Cases that are not ratifiable under may be subject to resolution as recommended by the
General Accounting Office under its claim procedure (GAO Policy and Procedures
Manual for Guidance of Federal Agencies, Title 4, Chapter 2), or as authorized by FAR
Part 50. Legal advice should be obtained in these cases.

Federal Government policy mandates that Agencies take positive action to preclude, to
the maximum extent possible, the need for ratification actions. Consenting to an
unauthorized procurement action is a serious matter.  Obtaining approval of a request for
ratification can be a long and complex process. It could result in personal liabilities for
the individual involved, if the ratification is not approved, and disciplinary action, even
if approved.  Therefore, considerable caution must be exercised to avoid such a situation.

For the more information on unauthorized commitments or the procedures followed for
ratification,  see the EPAAR or Appendix K - Chapter 12 of the Contracts Management
Manual.
                                   8-9

-------
                             STUDENT EXERCISE NO. 1
Please review the situations listed below and indicate whether these constitute appropriate use of
technical direction. Mark "A" for appropriate or T' for inappropriate.


   Situation                                                      Appropriate?

   1.  The W AM and Contractor PM meet after the work assignment           (   )
       is issued to discuss and clarify what is meant by certain tasks.


   2.  The TOPO requests the Contractor PM to prepare a draft as well as           (    )
       a final version of each of four although the SOW didn't specify drafts.


    3. The DOPO meets  with the Contractor PM and a statistical analyst for         (    )
       the Contractor on a fixed-price completion order.  The purpose is to
       discuss alternative approaches for dealing with data gaps in the model
       for groundwater management.


   4.  The COR requests that the Contractor prepare 40 copies of a 60-page         (    )
       report for distribution to all the labs and offices. The task order didn't
       specify the number of copies.

   5.  An Agency scientist asks the Contractor's senior analyst to include           (    )
       chlorides and sulfates in the list of substances to be analyzed in 500
       samples.

   6.  The DOPO requests the Contractor use a specific subcontractor             (    )
       for analysis of data collected in an industry survey because the expert
       in the field is a consultant affiliated with the subcontractor.

    7. In response to a question from the Contractor, the TOPO tells the            (    )
       Contractor not to worry about a particular task in the TO because the
       priorities have changed since the CO issued the TO.

    8. The WAM asks the Contractor PM to use express mail for a deliverable      (   )
       to the Science Advisory Board members to facilitate a peer review.
                                        8-10

-------
E. REVIEWING DELIVERABLES

   One of the most crucial duties of a COR is the review of deliverables. When performing this
   function, the COR must remember to:

   I.   Perform reviews within contract time frames. In some contracts a deliverable must be
       reviewed and accepted or rejected within two weeks of receipt. A COR needs to check
       the contract for specific standards. Acceptance may be implied if the time frame has been
       exceeded.  Also, it is important to ensure that deliverables supporting key milestones are
       reviewed to prevent cumulative delays.

   n.  Perform detailed reviews, providing specific feedback to the Contractor on revisions
       required.  Contractors are motivated to produce a quality product if the Contractor knows
       that EPA cares enough about the item to perform a thorough review of it.

   HI. Seek other technical experts to review the deliverable, as necessary. Keep in mind that
       requesting revisions constitutes technical direction and can only be done by the COR, so
       all deliverable comments must come through the COR before going to the Contractor.

       •  If specified in the contract, TO, DO or WA, a peer review of a deliverable may be
          conducted. To understand the issues involved in the use of peer review, a COR can
          read ORD's Peer Review Handbook at www.epa.gov/ordntrnt/QRD/spc/prhandbk.

   IV. Always document  review of deliverables using either a deliverable review form, a
       memorandum to the Contractor providing comments, or annotation of the draft. This is
       particularly important if you are involved in sensitive/vulnerable activities as discussed in
       module 3.

   Exhibit 8-3 presents a sample form for review of deliverables.
                                         8-11

-------
                               Exhibits-3
                                 SAMPLE
                      REVIEW OF DELIVERABLES
Contractor:
Contract Number:
Task Order Number:
Task Order COR:
Deliverable Due Date:
Date of Receipt:
Deb'verable Number and Title:
(From TO/Work Plan):
Description of Deliverable:
Decision: Accepted  (   )  Rejected (   )  Modification Proposed (   )

Comments:

1.   Were all specifications met to the desired level of quality?  If not, what was missing?
2.  Was deliverable timely? If not, did delay make deliverable of reduced value to EPA?
    Why was it not timely?
3.  What, if any, changes are needed to meet the specifications or improve quality or
    usefulness?
4.   Will any changes necessitate a task order modification?
Reviewer	  Date Reviewed:.
                                 8-12

-------
F. MEETINGS WITH THE CONTRACTOR AND SITE VISITS TO THE
   CONTRACTOR'S FACILITY/OFFICE

   Meetings and site visits can be used as a tool to monitor the Contractor's performance. How
   to use this tool will depend on the nature of the work, the location of the Contractor, the
   quality of performance, the extent of any problems and what type of contract and SOW is
   involved. The COR needs to keep in mind that fixed-price efforts allow virtually no
   flexibility regarding technical direction, and that in a performance-based SOW, the
   Contractor is measured on meeting the objectives within certain stated measurements and not
   on the how the Contractor got there.

   Periodic meetings or telephone discussions with the Contractor PM may help the COR more
   effectively monitor the Contractor's progress.  For example, on a complex cost-
   reimbursement task order covering several months, the TOPO may request verbal progress
   reports in addition to written progress reports.  This requirement would be specified in the
   task order statement of work. If not overused or mismanaged, meetings can be excellent
   method of resolving issues impacting a variety of people. Meetings could be in person or by
   phone.

   The TOPO, DOPO, or WAM COR should generally inform the contract COR of meetings
   with the Contractor, so the contract COR can attend if desired. Meetings to discuss particular
   issues or problem areas should always be attended by the contract COR.  Other suggestions
   for the COR WAM, DOPO or TOPO in conducting progress meetings with Contractors
   include:

   •  Develop an agenda.   Know what you want to accomplish.

   •  If there are significant issues to discuss or resolve, notify the Contractor PM in advance
       so he or she can be in a better position to respond.

       Bฎ1 NOTE: Meetings cost money. Unless the contract has included preplanned meetings
          with the Contractor,  they should be held to a minimum and should focus  on problem
          resolution. Be aware of the costs incurred by the Contractor when unscheduled
          meetings are requested. In cost-type contracts, the Government will have to pay the
          costs associated with the meetings, including time for travel to and from  the meeting,
           mileage reimbursement, and parking costs to name several specific costs that
          routinely are involved. In fixed price contracts, the Contractor may balk at attending
           meetings that weren't priced out and included in the SOW of the contract.

   For off-site contracts the COR may conduct site visits to the Contractor's office to examine
   the facility (if applicable) and discuss technical issues with the Contractor's PM and technical
   staff. This can also be a  good opportunity to perform a review of any Government-furnished
   property to ensure it is properly maintained and secured.

       isr  Lack of travel funds may make site visits difficult. Also, it would not be practical for
           every COR on a large contract to visit the Contractor's site. Any decision to perform
           an off-site visit should be coordinated with the contract COR.
                                        8-13

-------
Whether meeting at the Agency, at a Contractor's facility, or using teleconferencing, all
meetings must be documented.  EPA Order 1900.1A calls for the preparation of such
documentation. The absence of such records has been noted in OIG audits. Meeting minutes
generally document:

   Attendees,
   Situation, problems, or reason for calling a meeting,
   Discussions,
   Recommendations or conclusions, and
   Action items and who will handle them.

Minutes can be written by anyone attending the meeting. Although it might seem to make
the COR's job easier, COR's need to keep in mind that having the contractor perform this
function can cause contract costs to mount and mean less money and hours for the central
purpose of the WA, TO or DO.  If the Contractor performs the function, the COR needs to
read them very carefully prior to approving or signing off on the minutes.  Copies of the
meeting minutes should be provided to all attendees and included in the contract file. Exhibit
8 - 4 is a sample meeting report.
                                    8-14

-------
                                     Exhibit 8 - 4

                                      SAMPLE
                       MEETING DOCUMENTATION MEMO

MEMORANDUM

SUBJECT:      Meeting with ABC Company on Status of WA 00-X

FROM:         Work Assignment Manager

TO:             The Record

DATE:

       I met with (Project Manager) and (Program Manager) of ABC Company on	
to discuss the status of W A 00-X.

Task 1 -    Data Base Development
            All questionnaires have been received, edited and entered.  Listings have been
            produced and are ready for validation. One issue is when we want to conduct the
            validation and whether we want to ask for additional data from the labs. I will
            follow up with Division Director.

Task 2 -    Budgeting Manual
            Contractor provided me an outline of the manual. It looks  fine to me, but I will
            have our branch chiefs review it before approving the outline. Contractors will
            proceed with the first two chapters in the interim.

Task 3 -    Support to Steering  Committee
            Contractor has developed draft agenda and concept paper for first meeting of
            Steering Committee.  Contractor needs to know what graphics will be required. I
            discussed topics for graphics with the Contractor; Contractor will get back to me in
            three days with draft charts.  I indicated changes on the agenda and concept paper;
            Contractor will finalize.

cc:    Div. Director
       Project Officer
       Project Manager, ABC Company
                                        8-15

-------
G. REVIEWING PERFORMANCE

   The importance of timely and specific feedback can't be emphasized enough when the COR
   is working with a T&M or CR LOE type of SOW.  This type of SOW is imprecise and is
   highly dependent on technical direction.  With a CR type of SOW, the Government agrees to
   pay the Contractor for all of its allowable, allocable and reasonable costs, and delay in
   providing feedback can cost the Government not only in real dollars but also time, which has
   a monetary consequence as well.  In a T&M pricing arrangement, the Government is paying
   average hourly rates by labor category. Inappropriate use of a labor category or the use of
   less experienced individuals within a labor category allows the Contractor to increase profits
   while being reimbursed for all of its indirect costs for each direct labor hour used.  COR
   oversight is critical.  It is also why this type of pricing arrangement in a contract is the least
   preferable. Even with a FP effort requires timely review.  Delay by the Government can
   mean the Contractor has a legitimate request for time extensions or adjustments in the fixed
   price.

   I.  Timely feedback will support correction of a problem before it becomes serious. Specific
       feedback, i.e.. addressing particular aspects of a deliverable or a service which are not
       acceptable, will help the Contractor focus on the areas that need improvement.
       Additionally, the COR should:

       a.  Provide regular, direct feedback throughout the course of the  effort - the COR should
          periodically offer comments on the Contractor's work as the work progresses.
          Regular progress meetings and telephone discussions with the Contractor are a good
          means to do this.  Regular feedback can help ensure the quality of a deliverable by
          preventing misdirected efforts. For example, even with a FP  DO for a complex end
          product, a Contractor can head off in the wrong direction. COR review of the
          monthly progress reports can avert a delay and claim  for price adjustment.  Don't let
          problems fester!

       b.  Accentuate the positive. - Providing positive feedback on a deliverable or service will
          provide a strong motivating force to the Contractor to sustain a high quality effort.
          Even if there are problems, by approaching the "good news" first, it makes any "bad
          news" easier to handle.

       c.  Focus  feedback on the quality and timeliness of services and  deliverables, as opposed
          to the performance of individual Contractor employees. Concentrating on individual
          staff performance may create the appearance of a personal services relationship.
          However, point out to the Contractor instances where he is not following the staffing
          plan set forth in the work plan, e.g., if he is using highly skilled employees on a
          routine job or vice versa.

       d.  Be Objective, fair, and professional - Pinpoint the cause of the problem without finger
          pointing or getting sidetracked. Consider all viewpoints of the problem, potential
          solutions, and work toward developing a reasonable plan of action. Examples of
          confrontational versus constructive language are:
                                        8-16

-------
CONFRONTATIONAL LANGUAGE
                                       CONSTRUCTIVE LANGUAGE
You have completely ignored the
directions I gave you on the statistical
approach
                                           I was surprised at the statistical
                                           directions you took, given our
                                            discussions. Can you explain the
                                           reasoning you used?
This deliverable is totally unacceptable;
it will have to be completely redone.
You clearly didn't understand my instructions.
These revisions will have to be covered by
the existing money in the task/WA.
 f.
 g-
                                           I would like to discuss some changes
                                           To the deliverable. They are fairly
                                           extensive, but I think they are
                                           they are necessary to make the
                                           product more targeted to our needs.

                                           Let's discuss how this happened so
                                           we can prevent future
                                           misunderstandings.

                                           Unfortunately, we don't have any
                                            additional funds for the task.
                                           How can we get these revisions
                                           completed while staying within
                                           budget?
e.  Know when to get help - for technical issues you are not familiar with, invite an
    individual with technical expertise to participate in a meeting with the Contractor to
    discuss performance. Although Chapter 7 of the Contracts Management Manual
    requires the TO, DO or WAM COR to be technically proficient in the work the
    Contractor is performing (having sufficient knowledge and experience to review
    deliverables, understand the labor categories involved in the work and the amount of
    hours needed to complete the work), there will be times when the COR needs the
    assistance of another individual. Whenever a quick resolution of the problem doesn't
    materialize, the COR needs to notify the contract COR or the CO, as appropriate.  The
    COR should always notify the CO if performance problems will impact the schedule
    or funding.
Document performance problems - identify the problem(s), the proposed remedy,
schedule impact, cost impact, and discussions with the Contractor.

Understand the contractual limits - Under LOE SOWs, the Contractor guarantees
only "best efforts," and the Government pays for reperformance. If additional funds
are not available, it may be necessary for the CO to negotiate an
                                  8-17

-------
   amendment/modification to the SOW and the schedule. The COR provides essential
   technical advise and analysis to the CO, but, the CO is the only individual with
   authority to make changes to a contract, WA, DO or TO.
Subcontractor Performance

Discuss subcontractor performance with the prime Contractor. Remember the prime is
responsible for oversight of its subcontractors. Feedback on subcontractor performance
must be routed to the subcontractor Project Manager through the prime Contractor. If a
subcontractor presents a problem directly to EPA, the COR should inform the
subcontractor that the COR cannot mediate the problem. The subcontractor needs to
seek a solution with the prime. However, the COR can also raise the issue with the
prime, without directing the prime to a solution, by suggesting that the two parties meet
to resolve their differences.

Prime Contractors and their subcontractors occasionally have disputes on work effort or
product.  This can involve:

• Subcontractors receiving less work than expected or indicated in the prime
   Contractor's proposal in response to the RFP.

• Subcontractors not being paid promptly by the prime Contractor.

• Products prepared by the subcontractor being delayed because of extensive review
   time by the prime Contractor.

The issue is what the COR can do about these disputes. Because EPA has no privity of
contract with a subcontractor, it cannot mediate such disputes.  Privity of contract refers
to the legal contractual relationship between parties. There is a contractual relationship
between Government and the prime Contractor and another, separate one between the
prime Contractor and a subcontractor, but no legal, binding agreement between the
Government and any subcontractor. In a disagreement between a prime and its
subcontractor, CORs can take the following actions:

• CORs can review the management hours being applied by a prime Contractor to work
   performed primarily by a subcontractor. While it is difficult to provide a rule of
   thumb, the COR should assess the reasonableness of the management hours in terms
   of their specific purpose, e.g.. administrative processing of vouchers and work plans,
   substantive review of products, etc.

• CORs should review the causes of delays in delivery of work products with the prime
   Contractor. If delays are due to the time needed by the prime Contractor for review,
   the COR can discuss how to accelerate this process in order to meet EPA's needs.
                                8-18

-------
      •  CORs should examine how the prime Contractor utilizing staffing.  If the majority or
          all of the work is being performed by a subcontractor and if the key personnel for the
          subcontractor are not being used, this should be flagged as unacceptable.  The prime
          Contractor is responsible for business decisions on whether to subcontract the work or
          to keep the work in-house.  However, it's the responsibility of the COR to review the
          proposed technical and staffing plan. If the prime Contractor is proposing to use staff
          without the experience or educational requirements of the Government, the COR can
          emphasize the importance to the prime of providing personnel with the required
          qualifications to accomplish the work.  While EPA cannot direct the prime Contractor
          who to use on a particular project, it can insist upon reviewing the qualifications of
          personnel proposed for the work.

I.  REVIEWING THE MONTHLY PROGRESS REPORT

   I.  The Monthly Progress Report (MPR)

      Almost all EPA contracts require that Contractors submit a combined monthly
      technical/financial progress report with the monthly invoice. The MPR serves the
      following purposes:

      a.  Assists the COR in monitoring technical progress.

      b.  For CR contracts, it assists the COR in reviewing invoices and monitoring the
          financial status of the project by comparing hours and costs against the technical
          activity, i.e., a "snap shot" of the work in progress. For FP contracts, it assists the
          COR in monitoring the physical progress by comparing the costs being invoiced
          against the overall milestones projected by the Contractor and fixed price of the
          effort. For T&M contracts, it assists the COR in monitoring the hours used by labor
          category and comparing it against the technical activity and costs being invoiced.

       c.  The MPR supports an audit trail of work performed.

       d.  CORs need to remember that the MPR provides the Contractor's assessment of
          performance.

       Changes to the content of the MPR (e.g.. requesting additional information), due date, or
       frequency (e.g..  semimonthly) must be done by the CO through a contract modification
       covering all WAs, TOs, or DOs . The  benefit of the more frequent or additional
       information provided must be weighed against the cost to provide the information and the
       time to review it.

       The information required in the MPR will vary depending on the contract type.  The
       standard clauses for MPRs are included at the end of this module. The COR needs to
       read the contract to determine what the requirements are for her/his specific contract. As
       a general rule, the MPR must address:
                                        8-19

-------
a.  Estimated percentage of work completed during the reporting period.

b.  Any difficulties encountered during that time and remedial actions taken.

c.  Anticipated activity with a schedule of deliverables for the subsequent reporting
    period.

d.  Outstanding actions awaiting C O authorization, such as work plan,
    subcontractor/consultant consents, or overtime, approvals.

e.  Financial status-amount claimed for current period.

f.  A cumulative display including:

    1.  Amount shown on workplan or latest amendment,
    2.  Amount currently claimed,
    3.  Amount suspended,
    4.  Amount disallowed,
    5.  Remaining approved amount.

g.  Labor Hours including:

    1.  A list of employees, their labor categories, and  the number of hours worked for
       the reporting period.

    2.  For the current reporting period, display the expended direct labor hours (by EPA
       contract labor hour category and the total loaded direct labor hours.

    3.  For the cumulative reporting period and cumulative contract period display: the
       negotiated and expended direct labor hours (by EPA contract labor hour category)
       and the total loaded direct labor costs.

    4.  Display the estimated direct labor hours and costs to be expended during the next
       reporting period.

    5.  Display the estimates of remaining direct labor  hours and costs required to
       complete the TO, WA, or DO.

h.  Unbilled allowable costs.  Display the total costs incurred but unbilled for the current
    reporting period and cumulative for the WA, TO or DO (e.g., subcontract costs for
    CR or T&M contracts).

i. Average cost per labor hour. For the current period, compare the actual total cost per
    hour of the approved workplans.

j.  A list of deliverables for each TO, DO or WA during the reporting period.


                                 8-20

-------
Review of the MPR

As stated above, the MPR is the Contractor's assessment of the firm's performance. The
COR needs to use his/her knowledge and technical expertise to analyze and verify the
information contained in the report.

All the information required by the MPR clause must be in the monthly report. CORs
need to pay particular attention to the following:

a. Estimated percentage of work completed - Note how this number is computed. Is the
   reported progress reasonable and is it supported by the MPR narrative? Is the
   percentage of completion commensurate with the costs incurred on the work
   assignment? If 25% of the work assignment budget has been spent, has 25% of the
   work been completed? A significant variance in this area warrants further
   investigation.

b. Any difficulties encountered during that time and remedial actions taken: The
   Contractor should report problems which impact timely and efficient performance.
   CORs should be especially aware of any indication in the report of Government
   actions or delays that the Contractor states is  inhibiting its progress, such as when the
   Contractor is waiting for data or review of a draft deliverable from the COR. If the
   Contractor has run into a problem, the Contractor needs to state how it plans to handle
   it.  The report should state what remedial actions have been taken. The COR must
   evaluate the proposed remedial plan of actions and ensure it's acceptable. The COR
   needs to note whether problems are going to impact the delivery schedule, and, if so,
   then the CO must be notified and the COR should make a recommendation on
   whether the TO or DO needs to be modified or the WA amended. If the COR
   doesn't recommend an adjustment, the COR needs to provide ideas for other courses
   of action  and a negotiation position to the CO. The COR should consider what
   consideration would be acceptable in exchange for the adjustment. The COR should
    always compare the progress with the Contractor's projected milestones. In some
   cases, the Contractor may not want to be the "bearer of bad tidings." A Contractor
    may avoid or gloss over problems areas. Or the Contractor may have a plan for
    catching up and meeting the delivery schedule, but the COR needs to query the
    Contractor when there are discrepancies between actual progress and projected
    milestones. The COR needs to be aware of what's not addressed in the MPR as well
    as what is.

c. The MPR not only addresses activity completed, but also anticipated activity for
    upcoming months and a schedule of deliverables for the subsequent reporting period.
    Did the Contractor submit the deliverables required for this period? If so, the COR
    needs to know what their review status is.  If not, any changes to deliverable due
    dates in the TO, DO or WA require  a formal modification/amendment by the CO.
                                  8-21

-------
d.  The MPR must also list any outstanding actions awaiting C O authorization: In some
   cases the Contractor cannot proceed until the CO formally approves the action, such
   as request for consent to a proposed subcontractor. This, in turn, may affect the
   Contractor's ability to meet due dates. The COR needs to read this section carefully
   and follow-up with the responsible party on any pending actions.

e.  Labor Use (applicable for commercial non-supply items) - Compare this information
   to the negotiated work or staffing plan. Especially if there was a difference between
   the original submission by the Contractor and the final agreed upon labor mix. The
   COR needs to ensure that the Contractor is using the appropriate skill mix to
   accomplish the  work, or, if there is a disparity between the agreed upon mix and the
   actual usage, the COR needs to question the Contractor's PM about the reasons for
   the different usage. The COR should evaluate the "burn rate" or usage of the labor
   hours compared with the technical progress reported.  The number of hours expended
   need to correlate with the amount of work completed. In an LOE SOW, the issue is
   whether there are enough labor hours remaining to accomplished the activities
   planned for the  next month, until the end of the period of performance, or to
   accomplish all of the tasks in the SOW.  Any adjustment to the labor hours requires
   CO action.

       •sr NOTE: Many Agency contracts have a Key Personnel Clause which lists labor
                categories and individuals who have been determined to be "key" to
                the performance of the contract. If the Contractor wants to replace a
                person designated hi the key personnel clause, then the Contractor
                must provide a detailed explanation of the circumstances necessitating
                the proposed substitutions, provide resumes for the proposed
                substitutes, and any additional information requested by the CO.
                Proposed substitutes must have comparable qualifications to those of
                the persons being replaced.  The contract COR and the CO have the
                joint primary responsibility for reviewing and recommending approval
                or disapproval of changes to key personnel. CO approval, through a
                contract modification, is required before the Contractor can make
                substitutions to the key personnel.

While it is the Contractor's responsibility to notify the CO of changes, the WAM, TOPO
or DOPO should review the progress reports and monitor any apparent staff changes to
ensure that the requirements for key personnel are met. The contract COR needs to
provide the TOPO, DOPO or WAM with access to the list of the names of all key
personnel  on the contract.

It is good practice for a COR to annotate the Contractor's MPR, not only to indicate the
exercise of contract management oversight, but also to indicate questions that arise during
the review. The Contractor's response to the inquiries should also be listed. These
annotations support a complete audit trail. This is especially important if there are
questions on whether the Contractor exceeded the scope of the SOW.
                                 8-22

-------
             STUDENT EXERCISE NO. 2  - TECHNICAL MONITORING
    You are the WAM COR on a work assignment involving the development of sampling
    plans, assessment methods, QA manuals and implementation plans. The great majority of
    the work is being done by one of three subcontractors under the prime Contractor. The first
    two deliverables on this six-month work assignment - a detailed work plan and a draft
    sampling plan have each been two weeks late and have required substantial revisions.  Of
    the four subcontractor staff working on the project, you are dissatisfied with the
    performance of the project leader and one of the other staff. You do not feel that project
    leader has the technical knowledge required for the task; your concern on the other staff
    member is that she is abusive and has alienated certain EPA personnel. It is now the
    beginning of the third month of the project. You are concerned about the quality of the
    other deliverables and also the budget, although the technical/financial progress reports
    indicate no problems. What actions should you  take?
f.   You are the TOPO on the task order for the workshop on the Effects of Dietary Metal
    Ingestion planned for June, and this is the week of May 24th.  You are having your bi-
    weekly teleconferencing with Ms. Carolyn Key, the XYZ Program Manager. She has
    submitted a list of expert participants for approval and you are reviewing this list with her.
    Of the 12 identified experts in the field, three are from the same affiliations and 2 of the
    most prominent in the field, that the Ms. Key and you both agree are critical to the success
    of the workshop, are not available the week of June 6 & 7.  Another of the proposed experts
    is working on a study funded primarily by grants from the American Fisheries Society and
    the Chemical Manufacturers Association. You express concerns about conflict of interest
    and not having enough variety of viewpoints.  Ms. Key is concerned about trying to find
    replacements on short notice.  How do you handle this situation?
                                       8-23

-------
Monthly Progress Report - Dev (EPAAR 1552.21 l-72XJun 96)
 (a) The Contractor shall furnish	copies of the combined monthly technical and financial
progress report stating the progress made, including the percentage of the project completed, and
a description of the work accomplished to support the cost.  If the work is ordered using work
assignments or deli very orders, include the estimated percentage of task completed during the
reporting period for each work assignment or delivery order.

 (b) Specific discussions shall include difficulties encountered and remedial action taken during
the reporting period, and anticipated activity with a schedule of deliverables for the subsequent
reporting period.

 (c) The Contractor shall provide a list of outstanding actions awaiting Contracting Officer
authorization, noted with the corresponding work assignment, such as subcontractor, overtime
approvals, and work plan approvals.

 (d) The report shall specify financial status at the contract level as follows:

    (1) For the current reporting period, display the amount claimed.

    (2) For the cumulative period and the cumulative contract life display: the amount
obligated, amount originally invoiced, amount paid, amount suspended, amount disallowed, and
remaining approved amount. The remaining approved amount is defined as the total obligated
amount, less the total amount originally invoiced, plus total amount disallowed.

    (3) Labor hours.

      (I) A list of employees, their labor categories, and the numbers of hours worked for the
reporting period.

      (ii) For the current reporting period, display the expended direct labor hours (by EPA
contract labor category), and the total loaded direct labor costs.

      (iii) For the cumulative contract period display: the negotiated and expended direct labor
hours (by EPA labor category) and the total loaded direct labor costs.

      (iv) Display the estimated direct labor hours and costs to be expended during the next
reporting period.

    (4) Display the current dollar ceilings in the contract, net amount invoiced, and remaining
amounts for the following categories: Direct labor hours, total estimated cost, award fee pool (if
applicable), subcontracts by individual subcontractor, travel, program management, and Other
Direct Costs (ODCs).
                                        8-24

-------
     (5) Unbilled allowable costs. Display the total costs incurred but unbilled for the current
reporting period and cumulative for the contract.

     (6) Average total cost per labor hour. For the current contract period, compare the actual
total cost per hour to date with the average total  cost per hour of the approved workplans.
                                          8-25

-------
Monthly Progress Report - Dev flEPAAR 1552.211-72)(.Tun 96) (continued)

 (e) The report shall specify financial status at the work assignment or delivery order level as
follows:

    (1) For the current period, display the amount claimed.

    (2) For the cumulative period display:  amount shown on workplan, or latest work
assignment/delivery order amendment amount (whichever is later); amount currently claimed;
amount paid; amount suspended; amount disallowed; and remaining approved amount. The
remaining approved amount is defined as:  the workplan amount or latest work assignment or
delivery order amount (whichever is later), less total amounts originally invoiced, plus total
amount disallowed.

    (3) Labor hours.

      (I)  A list of employees, their labor categories, and the number of hours worked for the
reporting period.

      (ii) For the current reporting period, display the expended direct labor hours (by EPA
contract labor hour category) and the total loaded direct labor hours.

      (iii) For the cumulative reporting period and cumulative contract period display: the
negotiated and expended direct labor hours (by EPA contract labor hour category) and the total
loaded direct labor costs.

      (iv) Display the estimated direct labor hours and costs to be expended during the next
reporting period.

      (v) Display the estimates of remaining direct labor hours and costs required to complete
the work  assignment or deli very order.

    (4) Unbilled allowable costs. Display the total costs incurred but unbilled for the current
reporting period and cumulative for the work assignment.

    (5) Average cost per labor hour. For the current period, compare the actual total cost per
hour of the approved workplans.

    (6) A list of deliverables for each work assignment or delivery order during the reporting
period.

 (f) This  submission does not change the notification requirements of the "Limitation of Cost" or
"Limitation of Funds" clauses requiring separate written notice to the  Contracting Officer.
                                       8-26

-------
 (g) The reports shall be submitted to the following addresses on or before the	of each
month following the first complete reporting period of the contract. See EPAAR 1552.232-70,
Submission of Invoices, paragraph (e), for details on the timing of submittals. Distribute reports
as follows:
                                        8-27

-------
8-28

-------
         APPENDIX A

       EPA ORDER 1901.IA

USE OF CONTRACTOR SERVICES TO
 AVOID IMPROPER CONTRACTOR
        RELATIONSHIPS
              A-l

-------
A-2

-------
EPA ORDER

Classification No.:     1901.1A

Approval Date:          4/14/94

                  USE OF CONTRACTOR SERVICES TO
             AVOID IMPROPER  CONTRACTOR RELATIONSHIPS

1.  PURPOSE.   This Order is designed to assist Agency employees to
avoid  improper contractor  relationships in  performing contract
management activities.

2.  BACKGROUND.   Past contract management problems identified by
the Office of the Inspector  General and  the General Accounting
Office have indicated that Agency  contracts were not always
administered in accordance with  applicable laws, regulations, and
policies.  They also identified  cases in which insufficient
controls were established to preclude fraud, waste and abuse, and
conflicts of interest,  and to safeguard  Agency assets.

     The Federal Acquisition Regulation  (FAR) prohibits personal
services contracts unless specifically authorized by statute.
Personal services contracts  circumvent civil service laws, which
require the government  to obtain its employees by direct hire in
accordance with Office  of Management and Budget ceilings, and
inappropriately augment Agency staff without proper legislative
review.

3.  RESPONSIBILITIES.   Contracting Officers  (COs), Project
Officers (POs), Delivery Order Officers  (DOOs), Delivery Order
Project Officers  (DOPOs), Work Assignment Managers (WAMs),
Remedial Project Managers  (RPMs),  On-Scene Coordinators  (OSCs),
Task Managers  (TMs), and all other EPA employees are responsible
for ensuring that personal services relationships between
Government employees and contractor personnel are avoided.

4.  DEFINITION. , A personal  services contract is a contract
which, by its terms or  as administered,  results in contractor
personnel being subject to relatively continuous supervision and
direct control by a Government official  or employee.  A personal
services contract is characterized by the employer-employee
relationship it creates between  the Government and the
contractor's personnel. These contracts make the contractor
personnel appear, in effect, to  be Government employees.

     Attached  is  a list of examples of personal services, which
are provided to further clarify  some of  these prohibited
activities.   (Appendix  A)
                             A - 3

-------
EPA Order                                         1900.1A
                                                  4/14/94

5.  ASSESSING THE NATURE OF A CONTRACT.  FAR Part 37.104(d)
provides the following descriptive elements to be used as a guide
in assessing whether a proposed contract is personal in nature.
These elements can also be used as a guide to determine if the
way in which a contract is administered creates a personal
services contract.

     An improper contract relationship may exist if:

     a.  Contractor performance is done on site.

     b.  Contractor's principal tools and equipment are furnished
by the Government.

     c.  Contractor's services are applied directly to the
integral effort of agencies or an organizational subpart in
furtherance of an assigned function or mission.

     d.  Comparable services, meeting comparable needs, are
performed in the same or similar agencies using civil service
personnel.

     e.  The need for the type of service provided by the
contractor can reasonably be expected to last beyond one year.

     f.  The inherent nature of the service or the manner in
which it is provided reasonably requires, directly or indirectly,
Government direction or supervision of contractor employees in
order to--

          (1)  Adequately protect the Government's interest;

          (2)  Retain control of the function involved; or

          (3)  Retain full personal responsibility for the
function in a duly authorized Federal officer or employee.

     Note:   all of these elements need not be present to have an
improper personal services contract.  Additionally, having all of
these elements present does not necessarily mean that an improper
personal services contract exists.  The key element is whether
the Government exercises continuous supervision and control over
the contractor personnel performing the contract.  Each situation
must be reviewed and a determination made on a case-by-case
basis.
                             A - 4

-------
EPA Order                                         1900.1A
                                                  4/14/94

     As in any contract situation, Agency employees should
contact the CO for advice and guidance whenever they have
questions regarding relationships with contractor personnel.
Agency employees may also contact the Contracts Law Branch,
Office of General Counsel  (OGC) for further guidance.  Agency
employees who believe that a personal services contract exists
should immediately notify the CO.

6.  PRINCIPLES FOR MANAGING A CONTRACT.

     a.  The CO is responsible for determining, prior to award,
that the contract does not involve the procurement of personal
services.  Even though supervision by Government employees is not
directly required by the terms of the contract, a personal
services contract may evolve through improper contract
management.  Agency employees who believe that, through improper
contract management, a contract has evolved into a personal
services contract should immediately notify the CO.  The CO will
investigate these situations and take appropriate action to
ensure that contracts are managed to maintain proper contractual
relationships.

     b.  Technical management of a contractor's performance
generally relates to the manner in which authorized EPA employees
provide work direction to the contractor.  Exchange of
information of a technical nature is not prohibited.  Appropriate
technical direction is the clarification of ambiguous technical
requirements to ensure efficient and effective contractor
performance.  Proper technical direction is not supervision or
assignment of tasks to contractor personnel.  In managing the
contract, the following principles should be observed:

           (1)  Interaction with Contractor Personnel

                (a)  All contractors:

                     (i)     The contract shall govern contract
performance.  This can best be accomplished with a well-defined
statement of work  (SOW), including SOWs in work assignments
(WAs),  technical direction documents  (TDDs), or delivery orders
(Dos),  which reference the authority of the contract.

                     (ii)    The PO shall notify the CO
immediately if there is a need to change the contract so that the
CO can issue a contract modification.
                               A - 5

-------
 EPA Order                                          1900.1A
                                                   4/14/94

                     (iii)    Unless otherwise provided in the
 contract,  all  work will  be initiated by the issuance of  WAs or
 DOs signed by  the CO or  if provided,  by TDDs signed by the PO.
 These will be  issued to  the contractor's official point(s)  of
 contact  as shown in the  contract,  e.g.,  Project or Program
 Manager  (PM) or  Site Manager (SM).   Any communication to the
 contractor's point of contact  shall come from the EPA CO,  PO,  or
 his/her  authorized designees,  e.g.,  WAMs,  DOOs,  DOPOs, RPMs,
 OSCs, or TMs.  Other EPA employees may not assign tasks  unless
 they have  specific authority to  do so.   Note:   TDDs may  only be
 used to  initiate work in contracts requiring a fully-dedicated
 contractor team  and as limited by  the contract.

                     (iv)     Technical direction shall be issued
 in  writing from  the PO or  authorized designee  (with a copy to the
 CO)  to the contractor's  point(s) of contact.   If provided orally,
 the technical  direction  must be  confirmed  in writing within five
 (5)  calendar days.   Technical  direction shall  not be used to
 initiate work  or to change  WAs or  TDDs  or  the  contract.   Agency
 employees  shall  not give instructions separately to individual
 contractor personnel.

                     (v)      The  PO or designee may authorize
 meetings with  the contractor's point(s)  of  contact for the
 purposes of exchanging technical information among contractor
 personnel  and  EPA employees or assisting in contract performance,
 e.g., to discuss the  status or progress  of  effort under  a WA  or
 DO.

     Exceptions  to the prohibition against  direct interaction
 between an Agency employee  and contractor personnel  include:   1)
 a Government employee's  contacts to the  various  Agency hotlines
 and helplines  to request and receive  information and literature
 regarding  the Agency's media programs, 2) requests by Government
 employees  for  technical  assistance  and ADP  user  support  services
 where the  technical assistance is mandated  and monitored under an
 existing contract,  and 3) participation  in  discussions at
professional meetings attended by both Government  employees and
 contractor personnel, which are  not in connection with the
performance of a  contract.

     Examples of ADP user support services  are Personal
Computer/Local Area Network  (PC/LAN)  troubleshooting  support,
software support,  PC training,  data recovery assistance, and disk
archiving and other similar  automated data  processing  (ADP)
 support as defined  in a specific contract.  These  technical
                             A - 6

-------
EPA Order                                         1900.1A
                                                  4/14/94

services are rendered and the contract administered through
established ADP support offices such as the Washington
Information Center  (WIC).

                     (vi)    Agency employees must not intervene
in a contractor's hiring, firing, or promoting of contractor
personnel; assigning particular employees to specific tasks; or
rewarding individual contractor personnel.  Evaluation of
contractor performance, whether positive or negative, shall be
provided through the award  fee process, if applicable, or through
the EPA PO to the contractor point(s) of contact.  Evaluation
shall relate to the timeliness or quality of deliverables or
services provided, and shall not be directed at the performance
of individual contractor personnel.

                     (vii)   Agency employees shall not ask
contractors to hire in a "holding pattern," individuals who may
be candidates for Agency positions, pending completion of
competitive civil service procedures.

                     (viii)  Agency contracts shall not require or
permit contractors to purchase supplies or services for use by
EPA employees unless specifically required by a contract for its
performance.

                     (ix)    All requests for corrective or
follow-up actions by contractors shall be directed from the EPA
PO or authorized designee to the contractor point(s) of contact.
Similarly, contractor personnel must operate through the
contractor's point of contact to obtain any information needed to
complete the work.

                     (x)     Agency employees shall prepare
appropriate documentation for the record of meetings, trips, and
telephone conversations relating to the contract.

                (b)  Contractors working in EPA facilities only:

                     (i)     Agency employees must avoid situa-
tions in which one EPA on-site contractor provides support to-
another EPA on-site contractor, except when the contract requires
such support to be furnished  (e.g., janitorial services or
security services).  Similarly, Agency employees shall avoid
situations in which one EPA on-site contractor provides oversight
for another EPA on-site contractor.
                               A - 7

-------
EPA Order                                         1900.1A
                                                  4/14/94

                     (ii)    Agency employees shall not routinely
provide contractor personnel with copies of EPA internal admini-
strative or other correspondence, except when it affects the
conditions of the facility in which the contractor's personnel
are working  (e.g., scheduled repair work to be performed or
building closings).

                     (iii)   Agency employees shall not provide
contractor personnel with access to facsimile machines, photo-
copiers, computers, or file rooms where the Agency receives,
copies, or stores sensitive or confidential information unless
appropriate safeguards are in place to ensure adequate protection
of this information.  These safeguards include security
clearances, signed confidentiality statements, and others.
Sensitive or confidential information includes information
protected under the Trade Secrets Act or Privacy Act,
confidential business information, management sensitive
information, and enforcement sensitive information.  An example
of acceptable access after the appropriate safeguards are in
place is the EPA Secure Telecommunications Center, which
processes cables to the EPA from the State Department secure
network, for which contractor personnel have security clearances.
CBI may not be given to contractor personnel under any
circumstances unless there is authority for such disclosure and
the procedures under 40 C.F.R. Part 2, Subpart B have been
followed.

           (2)  Identification of Contractor Personnel

               (a)  All contractors:

                     (i)     At all times, it shall be readily
apparent which organization employs an individual.  Agency
security offices must require contractor personnel to display
appropriate badges that identify them as contractor personnel.
The employing organization should also be identified.  These
requirements shall be included in all contracts that may create
situations in which contractor personnel could be mistaken for
EPA employees, e.g., advisory and assistance services contracts,
hotline/helpline contracts, community meeting tasks, or field
work tasks under Superfund contracts.

                     (ii)    In all points of contact, e.g.,
during meetings,  on Agency systems such as voicemail or
                               A - 8

-------
EPA Order                                         1900.1A
                                                  4/14/94

electronic mail  (d-mail or e-mail), Agency officials must require
contractor personnel to identify themselves as such and their
employing organization.

                     (iii)   Agency security offices shall ensure
that contractor personnel do not have unlimited access to EPA
office areas.

                (b)  Contractors working in EPA facilities only:

                     (i)     In official telephone directories and
listings, contractor listings shall be shown in a type-face
different from that used for Agency employees, in separate
listings, with special codes, designated by use of asterisks or
parentheses, or  in some other manner that distinguishes
contractor personnel from EPA employees.

                     (ii)    Contractor personnel subject to the
Service Contract Act shall wear company-issued uniforms, in
accordance with  their company policies, e.g., moving contractors,
security guards, janitorial workers, etc.

           (3)   Attendance at EPA Functions and Meetings

               All contractors:

                (a)    Agency employees shall not allow
contractor personnel to attend EPA functions, staff meetings,
committees, or activities, including holiday parties, except as
described in  (b) below.

                (b)    Agency employees shall not allow contractor
personnel to attend  EPA meetings or conferences  (including
conference calls) unless required  for contract performance, as
documented in the contract's statement of work or in a specific
WA, TDD, or DO.

                (c)    The CO, PO,  or authorized designee shall
notify the contractor point(s) of  contact through authorized
technical direction  of the need for attendance by contractor
personnel.  Attendance must be restricted to specific  tasks as
defined  in the  SOW and limited to  the portion of the session in
which the contractor's performance is directly required.
Contractor personnel shall never  attend meetings as the official
representative  of an EPA organization.  Contractor participation
                               A - 9

-------
EPA Order                                         1900.1A
                                                  4/14/94

is generally appropriate when the contractor is serving in an
advisory or resource capacity, such as performing research or
data gathering.  Contractors may also act as facilitators for EPA
Quality Action Team sessions under contracts for Total Quality
Management implementation.

           (4)  Contractor Employee Conduct

               All contractors:

               (a)  Agency employees shall not be responsible for
resolving contractor personnel's business or personnel matters.
Contractor personnel must be directed to their point(s) of
contact for resolution of these issues in accordance with the
contractor's policies.

               (b)  Agency employees shall not provide contractor
personnel with direction for performance of work products or
assignments.  Contractor personnel must operate through their
point(s) of contact to obtain any direction needed to complete
work products or assignments.

           (5)  Space

               Contractors working in EPA facilities only:

               (a)  To the extent possible, EPA employees shall
be physically located in separate areas from contractor
personnel; the contractor's areas shall be identified as such.

               (b)  In cases in which both EPA employees and
contractor personnel must occupy or use a general area, there
must be physical separation and identification of space.

               (c)  EPA shall arrange schedules and set
priorities for the use of any common equipment by both contractor
personnel and Agency employees.

               (d)  EPA may provide furniture, PCS, software,
documentation,  telephones, voicemail and other equipment to
contractor personnel working in EPA facilities when specified in
the contract.
                                8


                              A - 10

-------
EPA Order                                         1900.1A
                                                  4/14/94

7.   ADDITIONAL GUIDANCE.

     a.  As in any contract situation, Agency employees should
contact the CO and Contracts Law Branch, OGC for advice and
guidance as required on a case-by-case basis.

     b.  For further information on this subject, Agency
employees should contact the Procurement Policy Branch, Office of
Acquisition Management.
                              /S/
                       Jonathan  Z.  Cannon
                       Assistant Administrator
                          for Administration  and
                          Resources  Management
                               A - 11

-------
EPA Order                                         1900.1A
                                                  4/14/94

                            APPENDIX A

             Examples  of  Prohibited Personal  Services

1.  An EPA employee routinely gives instructions and directions
directly to contractor personnel.

2.  An EPA employee recommends/requests/refuses to have specific
contractor personnel assigned to work on a delivery order or work
assignment.

3.  There is a change in the fields of a database to be main-
tained by the contractor.  An EPA employee instructs a contractor
employee on how to perform the changes, rather than having a
contract-authorized official issue a written technical direction
and/or contract modification for the changes.  This would be sent
to the contractor point(s) of contact for subsequent instruction
to the contractor personnel.

4.  An EPA employee suggests promotion, a bonus or other
performance award for certain contractor personnel.

5.  An EPA employee sits in on an interview for potential
contractor employees and offers suggestions on whom to hire.

6.  An EPA employee invites contractor personnel to attend an EPA
staff meeting or other EPA session not related to contract work
performance.

7.  An EPA employee enters a contractor's work area when no
contractor supervisor is present.  The EPA employee has specific
requirements he/she wants accomplished and directs contractor
personnel to redirect efforts to the new assignment.

8.  An EPA employee directly requests contractor personnel to
prepare a special report  (not otherwise required by the contract)
from a database that the contractor employee maintains.

9.  A contractor employee participates as a member of the EPA
committee planning an EPA award ceremony.

10.  An EPA employee  is an EEO counselor.  A contractor employee
complains of mistreatment from contractor management.  The EEO
counselor pursues the complaint.
                               A-l


                              A - 12

-------
           APPENDIX B

        GWACS AND OTHER
ALTERNATIVE CONTRACTUAL VEHICLES
               B-l

-------
B-2

-------
GWACS AND OTHER ALTERNATIVE
     CONTRACTUAL VEHICLES
                     Prepared by:
                     The Policy Service Center
                     January 2001
                 B - 3

-------
                       TABLE OF CONTENTS


SECTION                 TITLE                         PAGE

I.         PURPOSE AND BACKGROUND                       1

H.         ALTERNATIVE CONTRACTUAL VEHICLES               2

HI.        HOW TO ACCESS EPA AGENCY-WIDE CONTRACTS,        5
         GWACS AND MAS CONTRACTS
                               i
                              B - 4

-------
       I.  PURPOSE AND BACKGROUND.

       The purpose of this paper is to familiarize program and acquisition personnel with relatively new
contractual vehicles that have been developed as a result of the Federal Acquisition Reform Act of
1996 (FARA) and the Information Technology Management Reform Act of 1996 (TTMRA), now
jointly known as the Clinger-Cohen Act. These new contractual vehicles, specifically Government-
wide Acquisition Contracts (GWACs) and Multiple Acquisition Schedule (MAS) contracts offer
program personnel significantly more sources to satisfy their requirements, shorter acquisition lead-
times, and more competitive prices. These contracts also offer a wide variety of products and services
including information technology, management assistance, environmental services, and laboratory testing
and analyses. Furthermore, these contracts count toward meeting EPA's socio-economic goals.

        By using these new alternative contractual vehicles, ordering offices need not seek further
competition outside the GWACs or MAS contracts, synopsize the requirement, nor make a separate
determination of fair and reasonable pricing. Moreover, there is no longer a maximum order limitation
on most of these alternative contracts, hi addition, program personnel can utilize the expertise of EPA
contracting officers (COs) to provide assistance in selecting and managing the most appropriate
contractual vehicle to satisfy program requirements. On many of the GWACs and MAS contracts,
EPA COs can be delegated procurement authority to place task orders, to ensure appropriate
management controls are in place, and to negotiate lower prices/administrative fees. In fact, if
procurement authority is delegated to an EPA CO, the host agency's administrative fee may often
decrease from between 4% and 8% to 1%.

        EPA maintains a number of its own contractual vehicles to provide commonly required
services.  These contractual vehicles should be utilized whenever practicable.  Accordingly, program
offices should consult with an EPA CO to first review existing EPA contracts before  attempting to
access another agency's contract that may meet the program office's requirement.

        EPA COs can assist program offices in preparing a new Agency contract or in locating a
 contract from Ihe list set forth in this paper to satisfy a program office's requirement  This collateral
 effort will both ensure that an interagency agreement (IAG) is prepared when required and that
 appropriate management control clauses are included in task orders requiring the contractor to take
 certain actions; for e.g., safeguarding confidential information or sensitive data, and addressing potential
 conflict of interest (COT) issues. These management controls avoid placing EPA in a vulnerable
 position when contracting for services by ensuring close collaboration between procurement personnel
 and program officials in order to develop clear and precise statements of work. Moreover, these
 controls ensure that the Government retains inherently governmental decision making authority and that
 services are obtained in the most cost effective manner, without barriers to competition, and free of any
 potential conflicts of interest
                                            B - 5

-------
H. ALTERNATIVE CONTRACTUAL VEHICLES.

       At the outset it should be noted that, due to misinformation posted on various agency websites,
a great deal of contusion has arisen regarding the accessabihty to and concomitant requirements of
GWACS, MAS contracts, and Blanket Purchase Agreements (BPAs). The following discussion is
intended to dispel any further confusion on me part of EPA program and contracting personnel wilh
regard to access to and use of GWACs, MAS contracts and BPAs.

             A.  GOVERNMENT-WIDE ACQUISITION CONTRACTS.

       Government-wide Acquisition Contracts or GWACs are indefinite delivery/indefinite quantity
(IDIQ) contracts for various information technology (IT) resources negotiated, awarded and
administered by one particular agency but available to other Federal agencies for purchases. GWACs
are not subject to the requirements and limitations of me Economy Act, 31 U.S.C. ง 1535, particularly
the requirement to enter into an LAG before accessing a GWAC. In accordance with Section 5112(e)
of the Information Technology Management Reform Act (TTMRA), 40 U.S.C. ง 1412(e), "the
Director [of OMB] may designate one or more heads of Executive agencies as executive agents for
Government-wide acquisitions of information technology." Accordingly, when a "host" or servicing
agency possesses ง 5112(e) authority, a CO does not need to enter into an IAG with that servicing
agency to access its GWAC. See Section D of this paper for a full discussion of the requirements and
limitations of the Economy Act

       The Office of Federal Procurement Policy (OFPP), however, has advised this office that the
Director of OMB has provided the aforementioned ง 5112(e) authority to only five agencies:
(1) the General Services Administration; (2) the National Institutes of Health; (3) the Department of
Transportation; (4) the Department of Commerce; and (5) the National Aeronautics and Space
Administration. Morever, mis authority only applies to certain contracts administered by these five
agencies.  Therefore, prior to accessing a GWAC, it is a CO's responsibility to ensure that the subject
GWAC is, in feet, an "authentic" GWAC, Le., one administered by an agency with the requisite ง
5112(e) authority.  Section IV(B) of mis paper contains a list of ง 5112(e)GWACs.

             B.  MULTIPLE AWARD SCHEDULE CONTRACTS (FEDERAL SUPPLY
                    SCHEDULES).

       The General Services Administration (GSA) directs and manages the Federal Supply Schedule
program thereby providing agencies with a simplified process for obtaining commonly used commercial
supplies and services at prices associated with volume buying.  FAR8.401(a). In fact, nearly every
commercial product and major service provider is available under a GSA schedule at volume buying
prices. These MAS contracts essentially allow GSA to negotiate a single fair and reasonable price for
a product or service thereby allowing any other Federal agency to merely issue a purchase order for
that product or service. Orders placed against a MAS, using the procedures outlined in FAR Subpart
                                      B - 6

-------
8.4 are considered to be issued using full and open competition. Accordingly, ordering offices need not
seek further competition, synopsize the requirement, make a separate determination of fair and
reasonable pricing nor consider small business programs. These contracts are accessible on the
Internet by accessing GSA's Advantage Website at: http://www.fss.gsa.gov or through the Federal
Technology Service website at: http://www.fis.gsa.gov/programs.html  An LAG need not be established
to use these contracts.

              C. MULTI-AGENCY CONTRACTS.

       A multi-agency contract or MAC is a task or delivery order contract established by one agency
for use by other Government agencies to obtain supplies and services. The broad term MAC includes
contracts for information technology established pursuant to ง 5124(a)(2) of ITMRA and contracts for
other supplies and services. When using a MAC, remember that the requirements and limitations of the
Economy Act apply.  Accordingly, an LAG would be required and the procedures addressed by FAR
ง 17.503  must be followed. Prior to placing an order under a MAC, fully discuss the requirements for
use with the contracting agency.

              D. BLANKET PURCHASE AGREEMENTS.

       A Blanket Purchase Agreement or BP A is a simplified method of filling anticipated repetitive
needs for supplies or services by establishing "charge accounts" with qualified sources of supply, i.e.,
MAS contracts. See FAR 13.303. Although the negotiation of a BPA can be a relatively simple
process, each BPA must contain the following information: (1) a description of the supplier's agreement
to furnish supplies or services: (2) a statement that the Government is obligated only to the extent of
authorized purchases actually made under the BPA; (3) a statement that specifies the dollar limitation
for each individual purchase under the BPA; (4) a statement that a list of individuals authorized to
purchase under the BPA shall be  furnished to the supplier by the CO; (5) a requirement that all
shipments under me agreement shall be accompanied by delivery or sales slips containing specified
minimum information; and (6) a statement relating to invoice procedures. See FAR 13.303-3.

              E. THE REQUIREMENTS AND LIMITATIONS OF
                THE ECONOMY ACT.

       As stated in Section LI(A) of this paper, unlike GWACs which are governed by Section
5112(e) of ITMRA, multi-agency contracts are subject to Section 5124(a)(2) of ITMRA, 40 U.S.C. ง
1424(aX2), which essentially allows an agency to procure IT resources without obtaining specific
authority from OMB. Of significance however, is the fact that any action taken pursuant to Section
5124(aX2) of ITMRA must be in accordance with the requirements and limitations of the Economy
Act, 31 U.S.C. ง1535.
                                          B  - 7

-------
       The Economy Act, 31 U.S.C. ง 1535, provides authority for the head of an agency or major
organizational unit within an agency to place an order with another agency for goods or services only if
the following conditions are met

      (1)  amounts are available;

      (2)  the head of theoidering agency or unit decides theoider is in the best interest of the
       United States Government;

      (3)  the agency or unit to fill the order is able to provideor get by contract the ordered
       goods or services; and

      (4)  flie head of the agency decides ordered goods or services cannot be provided by
       contract as conveniently or cheaply by a commercial enterprise.

       FAR ง 17.503, entitled "Determinations and finding requirements", implements the requirements
of the Economy Act and sets forth the Mowing requirements that a CO must meet in order to access a
multi-agency contract

       (a) Each Economy Act order shall be supported by a Determination and Finding
           (D&F). The D&F shall state that -

           (1) Use of an interagency acquisition is in the best interest of the Government; and

           (2) The supplies or services cannot be obtained as conveniently or economically
                by contracting directry with a private source.

       (b) If the Economy Act orderrequires contracting action by the servicing agency,
           the D&F shall also include a statement that at least one of the following
           circumstances is applicable -

              (1) The acquisition will appropriately be made under an existing contract of the
                  servicing agency, entered into before placement of the order, to meet the
                  requirements of the servicing agency for fee same or similar supplies or
                  services;

              (2) The servicing agency has capabilities or expertise to enter into a contract for
                  such supplies or services which is not available within the requesting agency,
                  or
                                              4

                                             B  -8

-------
             (3) The servicing agency is specifically authorized bylaw or regulation to
                 purchase such supplies or services on behalf of other agencies.

       (c) The D&F shall be approved by a contracting officer of the requesting agency with the
           authority to contract for the supplies or services to be ordered, or by another official
           designated by the agency head .

       In light of the above, prior to accessing an alternative contractual vehicle in accordance with
Section 5124(a)(2) of ETMRA, specifically a multi-agency contract, contracting personnel must ensure
that all of the requirements of FAR 17.503 are met

       m. HOW TO ACCESS EPA AGENCY-WIDE CONTRACTS,
           GWACS AND MAS CONTRACTS.

       All EPA Agency-Wide Contracts, Government-wide Acquisition Contracts (GWACs), and
Multiple-Award Schedule Contracts are accessible through OAM's Intranet Web Site under "GWACS
and Other Alternate Contract Vehicles" under Procurement Policy Information at
http:intranetepa.gov/oamintra.

       A. EPA AGENCY-WIDE CONTRACTS.

       Generally, EPA's own contracts are a program office's first source for procuring supplies and
services. There are a number of EPA contracts already in place that can accommodate a variety of
program office needs as evidenced by the following:

       1. Information Technology Services

       a. Information Infrastructure & Architectural Support Contract (IIASQ. This contract
provides a full range of technical services to support all aspects of planning, designing, analyzing,
improving, monitoring, and implementing information technology solutions. For further information
contact Mary Rogers, Contracting Officer, at (202) 564-4729. Complete ordering information is
available at ht^://epawww.epa.gov/oamintra/hpod/iiasc

       b. Mission Oriented Systems Engineering Support Contract H (MOSES n). MOSES II
provides  a wide range of systems development and maintenance, information engineering, and database
management support For further information contact Sherry Lutz, Contracting Officer, at (202) 564-
4513. Oaring mfiirmarinn is available at: http://epawwwepa.pov/oamintra/hpod/moses/

       c. Information Management Center Services Contract. This contract provides information
management services for the agency's libraries, Public Information Center and record centers at EPA
Headquarters and locations at any of the regions and laboratories. For further information contact Paul
                                         B - 9

-------
Dawson, Contracting Officer, at (202) 564-4473. Ordering infonnation is available at:
http://www.epa.gov/oamhpodl /oppts grp/0010150/index.htm
       d. Washington Telecommunications and Computing Services (WTACS) Contract.
WTACs  provides a full range of telecommunications, desktop support, LAN management, web page
development and technical services to EPA's Headquarters. Program offices requiring LAN system
administrators, desktop support, system analysts, web development services, and support for office
moves and renovations order these services through the Agency's Working Capital Fund For further
information, contact the Contracting Officer, Jennifer Johnson at (202) 564-4733 or the Project Officer,
Dwight Rodgers at (202) 260-2082

       e. National Telecommunications and Computing Services Contract (NT ACS). NT ACS
is designed to meet EPA's computing and telecommunications service requirements at its National
Computer Center (NCQ in Research Triangle Park, N.C., the National Environmental Supercomputing
Center (NESQ in Research Triangle Park, N.C., and at various EPA sites nationwide. Contract
administration responsibilities for this contract are handled by Dana Lloyd, Manager, Office of
Administration and Resources Management-RTP Service Center at (919) 541-4364 and Larry Simon,
Project Officer at (919) 541-2297.

       f.  National Telecommunications Contract This contract provides EPA with a broad range
of telecommunications support services in the Washington, D.C. metropolitan  area, at Research
Triangle Park, N.C. and at regional, laboratory, and field sites located throughout EPA. The services
include: (1) routine ongoing and ad hoc telecommunications operations, including installation and
maintenance work; (2) design, configuration and installation and/or operation of all types of wide-area,
metropolitan area, and premise telecommunications systems; (3) consolidation of a centralized Federal
Telecommunications Service (FTS) telecommunications infrastructure support and the Voice/Video
Technology and Engineering Center (VTEC) and; (4) other areas pertaining to analysis, development
and implementation of telecommunications service and equipment selections. For further infonnation
contact the CO, Jennifer Johnson at (202) 564-4733.
       2. Information Technology Hardware/Software BPAs

       EPA has recently awarded a number of BPAs with several vendors to supply virtually the same
supplies (personal computers, printers, scanners, and servers) as those found in NIH's and NASA's
GWACs -at a lower price and in a more timely manner. A list of BPAs and complete ordering
infonnation is available at http://epawww.epa.gov/oamintrayhpod/bpagen.pdf
                                         B  - 10

-------
       3. Alternative Dispute Resolution Services Contract

       This contract offers a vehicle for (1) convening, facilitating, conducting and evaluating regulatory
negotiations, policy dialogues, workshops and other dispute resolution and collaborative problem solving
processes and; (2) conducting alternate dispute resolution proceedings (mediation, arbitration) for site or
facility specific cases. This contract is available for use by all of EPA, including the regions and
laboratories. For further information contact Phil Osborne, Contracting Officer, at (202) 564-4782.

       4. National News Agency Blanket Purchase Agreement

       This BPA provides subscriptions to various newspapers and magazines. Check first with your
OAM service center for the terms and conditions before using this BPA..

       B.  GOVERNMENT-WIDE ACQUISITION CONTRACTS.

       The most commonly utilized GWACs within EPA are those with the National Institutes of Health
(NIH) and the National Aeronautics and Space Administration (NASA). These contracts provide
information technology hardware and software as their primary focus and, because they are 5112(e)
GWACS, they are not subject to the Economy Act. EPA COs have been delegated procurement
authority to order under these GWACs contracts. In addition, EPA has recently awarded a number of
BPAs with several vendors to supply virtually the same supplies contained in the NIH and NASA
contracts. In most cases EPA is able to negotiate a lower price than those found through the GWACs
and the procurement may be processed in a more timely manner.  Summary information for the five
GWACs is provided below with hypertext links to each contract. These contracts provide for IT
hardware and services.  Surcharges vary from contract to contract and the method for accessing each
contract varies as well.  Please contact Tom Caffiey, Manager, ADP Contract Management Service
Center at (202) 564-4498 for information regarding the utilization of these vehicles.

       Since each of the GWACs listed below have unique ordering requirements and administrative
fees, orders placed under these contracts should be coordinated with Alan Trail, Contracting Officer, at
(202) 564-4726. Generally, the project officer with assistance from the contracting officer, will prepare
a statement of work, funding documentation, independent government cost estimate, and evaluation
factors. The award will be made based on best value where tradeoffs between technical and price
factors, or to the lowest priced, technically acceptable (LPTA) contractor.

       OMB has delegated GWAC authority to only the following five (5) agencies for specific
contracts described below, despite numerous internet sites and teaching materials claiming GWAC
authority.
                                              B -  11

-------
National Aeronautics and Space Administration

       Outsourcing Desktop Initiative (ODIN) at :http://outsource. gsfc.nasa.gov/ provides
       hardware and software acquisition, as well as maintenance, helpdesk, and other ancillary
       support services.

       Scientific and Engineering Workstation Procurement (SEWPII) at
       hflp:/Avww.sewp.pasa^gnv/ has multiple contracts that offer a vast selection and wide
       range of advanced technology UNIX and NT workstations, peripherals, network
       equipment, and other services to all Federal Agencies.

General Services Administration

       Applications and Support for Widely-diverse End User Requirements (ANSW|
-------
Integrated services and the required components can be acquired.  The services offered
encompass the management, operation, and maintenance of the desktop, portable
desktop servers, communications, printers, peripherals, and their associated network
infrastructure and components as a unified service.

Virtual Data Center Contract at http://www.fedcac.gsa.govAnDCS.stm provides a full
 range of primary data processing and support services for hardware and software,
 including: all essential components and resources to service and maintain data center
 computing; system back-up and disaster recovery services; operations and systems
 support; systems and application software support; and migration support and
 acceptance testing support.
Telecommunications Integrator Services (Telis^) Contract at
http://www.fedcac.gsa.gov/Telis.stm provides telecommunications integrated solutions
across voice, video and data technologies. Services offered include: personnel support
for design, documenting, programming, implementing, managing, maintaining and
supporting LANs and WANs; video equipment and systems; switched voice
communication networks; and hardware and software.

Smart Card Contract at http://www.fedcac.gsa.gov/smartcard.stmincludes supplies and
services necessary to support a common, interoperable, multi-application smart card.
The smart ID card will contain information carried on a chip to be used by agencies
commonly across applications. The smart card can be used to provide basic visual
identification, identification authentication, physical and logical access control, and other
value-added features.

IT Solutions 8(a) Multiple Award Contracts at
http://www.fastgsa,gov/iti/fast/Fast^                              provides a
broad range of high quality, IT, non-complex integration services from 8(a) contractors
through a small business set-aside multiple award contract under the Federal Acquisition
Services for Technology (FAST) program. These services can range from simple
connection of personal computers to peripherals, through construction LANs, up
through installation of WANs.

Federal Computer Acquisition Center fFEDCAC at httn://fedcac.gsa.gov/ has is a
solutions development center that awards, and administers IT contracts, and will  develop
solutions on behalf of a specific client or for Government-wide use.
 http://fedsim.gsa.gov/ will analyze your needs, determine the best acquisition strategy,
 and provide the private sector solution mat best meets your needs.
                            B - 13

-------
Department of Transportation

        TROY Systems Inc.Contract at http://wvsw.troy.com/about .html has core
       competencies in information assurance, network engineering and development, life cycle
       programming and analysis, mtemet/intranet systems design and development,
       instructional systems design and development, training, and program management
       services.

       Information Technology Omnibus Procurement ( ITOP) Contract at
       http://vww.itr*>fov.gsa^^                          provides a wide range of
       information technology related support services including: (1) information systems

       engineering support services, (2) systems/facilities management and maintenance support
       services, and (3) information systems security support services.

       National Institute of Health

       ELECTRONIC COMPUTER STORE n (ECS ID Contract at
       htto:/Aiitaacjiih.gov/Nhome/ECS%20n/e<^2hc^nerrame.htrnl has 47 prime contractors
       available to meet your desktop computing information technology needs.
       CIO-SP Contract at hflp^ynitaacjiikgov/^ome/QO/dohc^efraiTie^iTp) 20 prime
       contractors and multiple subcontractors available to provide information technology
       hardware, software, systems, and services in support of IT solutions.

       IMAGE WORLD Contract at http://nitaar. nih gov/Nhome/rW/iwhcnieffarne.htm has 23
       prime contractors and more than 200 subcontractors available to provide document
       management and imaging systems products and services .

Department of Commerce

       COMMerce Information Technology Solutions (COMMITS) Program at
       http://www.commits.doc.gov/  is a GWAC vehicle to satisfy information technology
       requirements that are appropriate to be performed by small, small disadvantaged, 8(a),
       and women-owned small businesses capable of meeting federal agency's FT
       requirements. The COMMITS program has 58 diverse small business partners
       providing information technology solutions in three major functional areas: information
       systems engineering support solutions; information system security support solutions, and
       systems operations and maintenance support solutions.

   NOTE: Orders placed under the COMMITS program, other GWACS, and multiple award
   schedule contracts count toward meeting EPA's socio-economic goals.

                                    10

                                   B  -  14

-------
       C. MULIPLE AWARD SCHEDULE CONTRACTS.

          Ordering information and a complete listing of GSA's schedules is located at GSA's
Schedules E- Library.at http://www.fss.gsa.gov/customers.cfrn.  Enter the special item number (SIN)
listed below, for.example, 70 is the designation for General Purpose Commercial Information
Technology Equipment, Software and Services or 874 is the designation for MOBIS. Enter this SIN
number in the box titled "Go Directly to Federal Supply Schedule." Ordering procedures from GSA
Schedule Contracts are described in Procurement Policy Notice 99-03 which is available at
http://epawww.epa.gov/oamintra/policy/ppn.pdf. No LAG is needed to use these contracts since EPA
COS will place and administer the individual orders.

          The same operational divisions in Headquarters, Research Triangle Park or Cincinnati
currently providing contract support to program offices will provide support for the Schedule purchases.
EPA contracting officers working with project officers will ensure effective management oversight of the
service contracts listed below by including management control clauses in task orders to require the
contractor to take certain actions, e.g., safeguarding confidential information or sensitive data. Some of
the more commonly used schedules utilized by EPA are as follows:

          Schedule 70 - General Purpose Commercial Information Technology Equipment, Software
and Services. Please contact Susan Kantrowitz, Manager, ADP Contract Placement Service Center on
202-564-4317 for further information.

          Schedule 873 - Laboratory Testing and Analysis Services

              873-1 Mechanical Testing, Evaluation and Analysis
              873- 2  Chemical Testing, Evaluation and Analysis
              873- 3  Electrical Testing, Evaluation and Analysis
              873- 4  Geo-Technical/rhermal Testing, Evaluation and Analysis
              873-9  New Technology

              Schedule 874 - Management Organisation and Business Improvement Services
              (TVIOBIS^

              874-1 Consultation Services
              874-2 Facilitation Services
              874-3 Survey Services
              874-4 Training Services
              874-5 Support Products
              874-6 Privatization Support Services and Documentation (A76)
              874-7 Program Integration and Project Management Services
              874-8 Alternative Dispute Resolution (ADR) Services

                                            11
                                           B - 15

-------
               Schedule 899- Environmental Services

               899-1 Environmental Planning Services & Documentation
               899-2 Environmental Compliance Services
               899-3 Environmental/Occupational Training Services
               899-4 Waste Management Services
               899-5 Hazardous Materials Management Advisory Services
               899-6 Telephone Advisory Services

        Multi-Agency Contracts

        There are many multi-agency contracts from other agencies that may be available for EPA's use.
 However, there is no centralized listing or place to go to obtain these products or services. To address
 this problem the Office of Federal Procurement Policy (OFPP) requested information from agencies and
 is planning to launch a Web site listing products and services available on multi-agency contracts, but
 there is no schedule when this effort will be finalized According to OFPP, 15 agencies have reported
 643 contracts for products and services which are available to other agencies.  However, since some
 agencies have been granted extensions, the number of contracts available to other agencies could be
 greater.

           If you have a need for products or services which might be available through another
 agency, please contact your CO. The CO will assist you in making inquiries about the availability of
 multi-agency contracts, ordering procedures which are subject to the requirements and limitations of the
 Economy Act, and unique administrative fees per order. Remember, that if you use another agency's
 CO to place the order, rather than getting delegated procurement authority for EPA's CO to place and
 administer its orders, you will most likely need to establish an IAG through EPA's Office of Grants and
 Debarment  Fully discuss the requirements for use with the contracting agency and the EPA CO before
 placing an order.

       An mteragency Agreement (IAG) signed by both the EPA Decision Official (program office
 designee) on behalf of the EPA Program Office and the EPA Grants Operation Branch Award Official
 rmy be reqiiired to utilize muM-agoi(^(X)ntracts.  The IAG must define the project period, budget
 period, scope of work, commitment verification, statutory authority for the transfer of funds, and
 accounting data. Signatures are also required from bom the decision official on behalf of the EPA
 Program Office, and Award Official from the Grants Operations Branch on behalf of the EPA.  Without
this information work performed by a contractor may coiistitute an unauthorized cominitment and the
invoice will be rejected by EPA's paying office. For information on placing an IAG, please call Sandy
Williams, Grants Administration Branch, at 202-564-5369.
                                            12


                                         B -  16

-------
        APPENDIX C

PROCUREMENT POLICY NOTICE
          95-04

 PROCEDURES FOR HANDLING
       POST AWARD
 ORGANIZATIONAL CONFLICTS
        OF INTEREST
            C-l

-------
C -  2

-------
                   PROCUREMENT POLICY NOTICE
                           NO.  95 - 04

SUBJECT:  Procedures  for Handling Post Award Organizational
          Conflicts of Interest  (COI)

FROM:     Betty L. Bailey, Director
          Office of Acquisition Management

TO:       OAM Division Directors
          Senior Resource Officials
          Regional Contracting Officer Supervisors
          Ray Spears, OGC
          Devereaux  (Dev) Barnes, OSWER

                             SYNOPSIS

SUMMARY:  This Procurement Policy Notice (PPN)  provides EPA
Contracting Officers and program personnel with guidance on
procedures for handling organizational conflicts of interest
issues that arise after contract award.

EFFECTIVE DATE:  Date of issuance (shown above).

EXPIRATION DATE: Upon cancellation or until superseded.

FOR FURTHER INFORMATION CONTACT:  Cal McWhirter on (202)  260-9165
or Suzanne Matsumoto on (202) 260-6329.
                                C - 3

-------
                               PETAIL

BACKGROUND

      EPA uses contractor support  in  the development and
enforcement of environmental standards and regulations, as well  as
control  of  toxic  substances and cleanup of hazardous wastes and
oil.   Our contractors  often work  for or have financial interests
in the industries for  which they  are providing regulatory support
to EPA.   Contractors are involved in the manufacture of equipment
or the marketing  of software systems that may be the subject of
evaluation  under  a resultant contract.  Also, potential conflicts
exist when  contractors are involved in the manufacture of
chemicals for which product and residue chemistry data may be
reviewed and evaluated.   Consequently, the objectivity of the
contractors'  work product for EPA and the integrity of EPA's
regulations and standards could be called into question by the
public.   Further,  it may be difficult to identify conflict of
interest (COI)  issues  at  the pre-award stage and contractors'
financial and business relationships are constantly changing.
Therefore,  while  no potential COIs may have existed at contract
award, conflicts  may arise during the period of performance of a
contract.

      EPA's  Superfund cleanup contractors may also work for
Potentially Responsible  Parties (PRPs) responsible for pollution
at Superfund sites where  the contractors are working for EPA.  The
objectivity or integrity of the work contractors perform for EPA
may be called into question as a result of their relationships
with  PRPs.   This  may prejudice EPA enforcement actions and
jeopardize  successful  cost recovery.  Due to changing cleanup
priorities,  multiple sites, and ongoing identification of PRPs,  it
is often impossible to identify work at the pre-award stage that
may pose COI.

      Attachment 1 is an  example of a method developed and used by
the Region  III Office of Acquisition and Assistance Management to
evaluate whether  a COI exists.   These procedures can also be used
when  considering  Limitation of Future Contracting (LOFC) requests.
A parallel  procedure for non-Superfund programs would be to
identify the  appropriate Key Indicators for the program being
evaluated.

POLICY

     The  Federal Acquisition Regulation (FAR) Section 9.501
defines COI as a situation in which ".. .because of other
activities or relationships with other persons,  a person is unable
or potentially unable to render impartial assistance or advice to
the Government, or the person's objectivity in performing the
contract work is or might be otherwise impaired, or a person has
an unfair competitive advantage."
                               C - 4

-------
                            The FAR, the EPA Acquisition
Regulation  (EPAAR),  and EPA contract clauses make it clear that a
COI determination is a Contracting Officer's (CO's)
responsibility.   However,  all EPA employees should be sensitive to
identifying and  avoiding COI.

     The CO should evaluate COI on a case by case basis.   Before
making a determination regarding whether a potential COI exists,
the CO must thoroughly evaluate the facts based on program, legal,
and public interest concerns, taking into consideration the best
interests of the Government.   In evaluating a potential COI, the
CO performs a risk analysis to determine whether a significant
potential COI exists.   If one exists,  the CO evaluates whether and
how the COI can  be avoided, neutralized or mitigated and may
request supplemental information from the contractor to aid in
making a determination.   The exercise of common sense, good
judgment, and sound discretion is required to make a determination
and to develop an appropriate means for resolving the issue.  Some
cases may be clear cut so that a CO can evaluate the facts and
make a quick decision based on common sense and knowledge.
However, the majority of COI determinations are more complex.
Often, a CO does not initially have enough information to make an
informed decision.

     Pjcc^p^ua_QJlfjLc-e.sjL  AS part of the CO' s decision-making
process, COs should coordinate with the program and seek program
office advice.   Program personnel are in the best position to
provide technical advice regarding the nature and/or relationships
of the applicable work.  Also, they may be aware of other  issues
COs should consider in evaluating whether an actual or potential
COI exists.

     nf_f j_cjr^.o_f_General Counsel  (OGC) and Quality Assurance_Branch
ICjABlj.  OGC and QAB staff are available to provide advice  and
assistance to the CO in evaluating and making COI determinations.
OGC and QAB review of a COI determination is required only in the
following situation:  When a work assignment/delivery
order/technical direction document  (WA/DO/TDD)  has been issued to
a contractor and a COI is later identified which cannot be
avoided, neutralized, or mitigated, the CO must consult with OGC
and QAB before canceling the work and issuing it to another
contractor.  This requirement does not apply to situations where
contractors have been issued  a WA/DO/TDD which is specifically for
preliminary COI  screening only.  OGC and QAB consultation  is jioi
required in any  other COI determinations.

     COs may find it helpful  to obtain advice from QAB regarding
remedies when a  COI exists.   OGC review should be requested if
legal issues are raised by  the CO, the contractor,  or the
                               C - 5

-------
contractor's  attorney.   The Office of Regional Counsel  also has
attorneys  available for consultation on COI matters.

     nฃฃ.i_c_e_nf_FtnfQrc;6ment and Compliance Assurance  (OECA) :
Potential  COI may impede successful cost recovery negotiations.
OECA can provide advice on how a potential COI may impact or
prejudice  an enforcement and/or cost recovery action.
Therefore, enforcement staff input is especially helpful where the
CO is basing his/her determination on the Government's potential
use of the contractor as an expert witness in cost recovery  or
other litigation.

                            TO REQUEST FROM TffB
     The  following are examples of the kinds of information a CO
may find  helpful to evaluate a post-award COI issue.  There may be
additional information you need to consider in evaluating a COI
situation.  The purpose of requesting this type of information is
to assess the magnitude of a contractor's relationship with
another party when evaluating potential COI.

• Is the  work to be performed at the same site or a contiguous
site where a contractor performed work, is performing work, or
will perform work for a PRP?  If yes, what are the details?

• Is the  work to be performed for EPA similar or related to the
work performed, being performed/to be performed by the contractor
for a PRP?  A commercial client?  An industry?  Explain.

• Does the contractor have any. contracts to perform work for any
applicable PRP(s) and what are the terms of the contract (s)?

• Does the contractor's contract with a PRP contain any
confidentiality or testimony clauses?

• Request that the contractor provide a copy of any relevant
information regarding the contractor's relationship to a PRP.

• How much work was performed in the last three years for the
PRP (s) /commercial client (s) that pose potential COIs?

• How much work  (in dollars, percentage of business, and/or gross
revenue)  has the contractor performed or is in the process of
performing for the PRP(s)? Commercial client (s)? Industries?  What
is the contractor's gross revenue for each of the past three
years?

• When did the contractor perform the applicable work for the
PRP(s)? Commercial client(s)? Industries?
                                C - 6

-------
• Is work currently being performed for the PRP(s)? Commercial
client (s)?  Industries?   If yes,  what work and how long is the
work expected to continue?

• If the work in question involves an organizational relationship,
what is the relationship  between the parties?  Does the work
involve a parent,  subsidiary,  affiliate,  etc.?

• Is the contractor under contract or does it have some other
arrangement with any  relevant  public or private clients to begin
providing services /work efforts that may represent a potential
COI?

• Does the contractor own  or have any financial interest in^ a
specific technology, equipment, system, or software which will be
evaluated under this contract?

• Request that the contractor provide any other pertinent
information bearing on the COI of which the contractor may be
aware  that has not been specifically requested by EPA.

                      ^
 •  What  is  the value  of the WA/DO/TDD?  Is it a significant amount?
 (Note — While this  is useful information, often the dollar value
 is not  as  relevant to COI decisions as the type of work to be
 performed) .

 •  Does  the work performed or to be performed for EPA relate to an
 existing or potential cost recovery and/or enforcement action?
      •  Will  the  contractor /subcontractor testify on behalf of the
      United States  in the litigation?
      •  What  are  the  concerns in  this  regard if the
      contractor/subcontractor were to testify?
      •  Will  the  contractor testify  for  the PRP?

 •  Has a consent  decree or an administrative order been signed?  If
 so  what are the  terms of the agreement? (For example, is the
 party with whom  the  contractor has a  relationship a signatory of
 the consent  decree,  and  if so, what are  the terms?)

 • Will  the work be used  to support  an Agency regulation  or
 standard?  If  so,  does the contractor have any clients that would
 directly benefit from the Agency regulation or standard?

 • Is the work non-discretionary in  nature or does  it  involve  some
 degree  of  judgment or discretion on the contractor's part?
                                C - 7

-------

     The Agency is committed to providing  timely responses on COI
issues to contractors.  As a general rule, CDs  should strive to
resolve COI issues within 10 working days  of  receipt  of  all
relevant information.  Failure to deal with COIs in a timely
manner could cause contractors to lose business and delay
implementation and work on EPA programs and projects.  COs should
coordinate with contractors and programs to establish specific
response/decision timef rames for individual COI issues .
     COs should maintain records of COI decisions  and related
correspondence in the official contract file.   COs should forward
an information copy of all COI decisions to  the QAB.   QAB will
analyze the COI decisions to ensure consistency across the Agency
and as a basis for developing and scheduling additional COI
training .
     If a determination is made  that a conflict  cannot be avoided,
neutralized,  or mitigated but  it is in the best  interest of the
Government to award/ continue the WA/DO/TDD, a request for waiver
must be approved by the Head of  the Contracting  Activity (HCA) .
COI waivers are not required under initial time-critical response
actions under the Emergency Response Cleanup Services (ERGS) or
the Emergency and Rapid Response Services  (ERRS) programs.
However, the emergency response  contractor would still be required
to disclose the COI in accordance with the timeframes stated in
the contract.

Attachment
                              C - 8

-------
                                              Attachment 1

                       COT  EVALUATTON EXAMPLE

                  RED LIGHT/GREEN LIGHT PROCEDURE

     Determine which indicators are applicable and pertinent for
the specific COI issue to be evaluated.  The sample indicators
provided below are a beginning point and will normally be useful
in the majority of Superfund COI cases.

     Score each  "COI Indicator" by color coding the indicator RED
for those indicators that present a high risk, or GREEN for those
indicators that present a low risk.  HUH: If you are unsure
whether to mark an indicator either red or green, consider marking
it half green and half red, or YELLOW.  After each indicator has
been evaluated and color coded, a visual picture will emerge to
help in evaluating whether or not a conflict exists.  If all of
the indicators are green,  the probability will be low that a
conflict exists.  If all of the indicators are red, the
probability will be very high that a conflict does exist.  If the
indicator colors are a mixture of red  and green, or yellow, the
indicators in red must be  given more careful consideration before
making the decision.   Be aware that some indicators may be more
important than other indicators, depending on the facts involved
in a particular  situation.  Thus, in a circumstance where there
may be only one  red indicator and all  the other  indicators are
green, the COI may be  of sufficient seriousness  that a conflict
would still exist and  the  contractor should not  perform the work.

     NOTE: This  "red light /green  light" process  will not
necessarily provide the best response  for the Agency for all COI
cases.  Therefore, this method should  not be  considered the
definitive answer or procedure to use  when evaluating and making
COI decisions, but rather  used as a tool  to  improve consistency
and timeliness in evaluating COI  issues.
      Same Site
      • Is the work to be performed at the same site or a
      contiguous site where the Contractor performed/is
      performing/will perform work for a PRP?
 II.  Related Services
      • Is the type of work to be performed for EPA similar to the
      type of work performed for the PRP?
      • Does the work to be performed for EPA impact the manner in
      which the contractor may already be performing related tasks?
                                  C - 9

-------
III. WA. Value ($)

     • What is the value of the WA?
     • Is the value of the WA a significant amount?
       (NOTE: Even if the $ value is low, if COI is an issue, the
     work product from the WA could be "tainted," that is, its
     credibility could be in question.  Also, since it is possible
     that the work product or, at least data/information from the
     WA will be used later in the process (of site decision-
     making/cleanup), it could potentially affect other work.)

IV.  Financial ($) Relationships

     • How much work  [in dollars  ($) and/or percentage  (%) of
     company revenue/gross] has the contractor performed for the
     PRP(s)/commercial client(s)/industry?
     • Is the amount of work such that the contractor's
     credibility and bias could be 'questioned or challenged?
     • Have any Confidential Clients been identified?  If so,
     hasthe contractor disclosed any information other than it
     only has a confidential client?  If not, obtain as much
     information as is possible to make a determination or
     decision without violating the contractors confidentiality
     agreements.

V.   Past, Present,  and/or Future Relationship(s) ($)

     • When did/will the contractor perform the work for the
     PRP(s)/commercial client(s)?
     • Is work currently being performed for the PRP(s)/
     commercial client (s)? And if so, what work?
     • How much work was performed for the PRP(s) in the last
     three years?
     • Does the contractor have any contracts or other
     arrangements to perform work for any applicable PRP(s)?

VI.  Sensitivity/Visibility

     • Are there any extenuating circumstances that would cause
     this work to be considered sensitive or highly visible?
       i.e. a Superfund Accelerated Cleanup Model cleanup, press
     coverage, special Congressional interest, etc.
     • Could release of sensitive information endanger  the
     Agency's cost recovery and/or enforcement actions?
                                C - 10

-------
VTI. Other

     • Add any  other  factors  that  are  applicable  and require
     evaluation, but  are not  included  above,  i.e.:

          •  If  the work in  question  involves  an organizational
          relationship, what  is  the  relationship  between  the_
          parties?  Is  it a parent,  subsidiary, affiliate,  sister-
          organization, etc.
          •  Has a consent decree been  signed?  If so, who signed
          and what are  the  terms?

     After completing the evaluation of  each  COI  indicator, before
a decision is made, consider  whether litigation has, is,  or will
occur, and whether the  work involved will or  will not result in
any enforcement action(s).
                              C - 11

-------
c-

-------
        APPENDIX D

PROCUREMENT POLICY NOTICE
          97-01

    REQUIRED PRACTICES
       CONCERNING
     SUBCONTRACTORS
            D-l

-------
D  -  2

-------
                            January 8,  1997
                     PROCUREMENT POLICY NOTICE
                             NO. 97-01

SUBJECT:  Required Practices Concerning Subcontracts

                      /S/
FROM:     Betty L. Bailey, Director
          Office of Acquisition Management

TO:       OAM Division Directors
          Regional Contracting  Officer Supervisors
          Howard Corcoran, OGC
                              SYNOPSIS

SUMMARY:  This  Procurement  Policy Notice  (PPN)  provides  guidance
on required procedures when consenting to subcontracts.  This
guidance addresses issues pertinent to both preaward and postaward
subcontracts.

EFFECTIVE DATE: Date of issuance (shown above).

EXPIRATION DATE: Upon cancellation or until superseded.

FOR FURTHER INFORMATION CONTACT: Paul Schaffer  on  (202)260-9032,
or GroupWise Schaffer-Paul.
                                D - 3

-------
                                 2

                               DETAIL

 BACKGROUND

      In response  to  an Office  of Inspector General  (DIG)  audit  of
 subcontract awards by EPA prime contractors and EPA's oversight of
 prime contractors' use and control of these subcontracts, the
 Office  of Acquisition Management (OAM) agreed to issue guidance
 reminding contracting officers (COs) of required practices when
 consenting to subcontract.  This guidance addresses issues
 pertinent to the preaward and postaward review of subcontracts.

      Subcontracts represent a unique contractual instrument  in
 which the Government has no direct legal relationship with
 subcontractors, sometimes referred to as no "privity of contract"
 (defined as that relationship which exists between two contracting
 parties).  There is essentially no relationship between the
 Government and its subcontractors.   The prime contractor  is
 selected for its technical and management abilities, including  the
 right to manage the contract and subcontractors used in the
 performance of the contract.

      Prime contractors are responsible for planning, awarding,
 and administering subcontracts.  However, COs play a key  role in
 subcontract oversight, since they are responsible for the overall
 prime contract price and performance.  COs are responsible for
 assessing the need for subcontracts, and the additional cost of
 subcontracting before granting consent.   Before granting  consent
 to a  subcontract, COs review the adequacy of the prime
 contractor's cost and price analysis, and determine whether the
 proposed subcontract costs are realistic for the work to  be done.

      Finally this PPN addresses consenting to subcontracts.
 Specifically, this PPN clarifies and supersedes three practices
 identified in a June 8,  1994,  OAM memorandum concerning
 subcontracting: consenting by letter, ceilings, and increasing  the
 estimated amount of subcontracts.

      In  addition, two other practices regarding subcontracting
 consent are discussed: the role of the procuring contracting
 officer  (PCO)  and the administrative contracting officer  (ACO)  in
 the consent process,  and the review of the proposed subcontract
 document.

     COs should refer to FAR Part 44 and this PPN for policies  and
procedures before granting consent to subcontract.
                                 D - 4

-------
     Before consenting to  a  subcontract,  the CO reviews the
request and supporting data  and considers such factors as:
technical need for services,  compliance with the prime contract's
goals for subcontracting with small  disadvantaged business  and
women-owned business  concerns,  adequacy of competition,
responsibility of the proposed subcontractor,  proposed type and
terms and conditions  of the  subcontract,  and adequacy and
reasonableness of cost or  price analysis performed.

     The project officer  (PO)  reviews the prime contractor's
request for subcontract consent,  and provides comments to the
CO on the technical need and appropriateness of the supplies or
services, the reasonableness of the  subcontract estimate in terms
of level of effort, and types and quantities of proposed other
direct costs; location, duration,  number of travelers and purpose
of proposed travel; skill  level,  labor mix, and direct labor hours
to be expended; and the capabilities of the proposed
subcontractor .

I.  REVIEW OF PREAWARD SUBCONTRACTS
     Preaward team subcontractors are competed as part of the
original prime contractor's proposal, which is subject to the
competitive evaluation process.  During preaward competition,  the
technical capability and costs of each prime and its subcontract
teams are evaluated as a combined entity, which is evaluated
against other prime offerers' contract teams.  Selection for award
is based on the management abilities of the prime contractor,  and
the combined technical capabilities and price of the prime and its
subcontract teams.  The CO does not need to comply with FAR
Subpart 44.2 at the time of contract award, since team
subcontracts are competed for subcontract consent purposes as part
of the contractor's proposal, which is subject to the competitive
evaluation process prior to award.
      COs must  be  alert  for  restrictive bidding patterns where
 contractors may have agreements with other contractors not to
 compete or bid against  each other for a prime contract to be
 awarded.  In return, the  contractor submitting a prime proposal
 may include other contractors as team subcontractors.  For
                          D - 5

-------
 example,  EPA contractors who are technically qualified to  bid on
 the prime contract may choose to be proposed as a team
 subcontractor,  perhaps at higher rates, and avoid the preparation
 of expensive prime proposals .

       Restrictive competition reduces the Agency's assurance  that
 it is obtaining the most technically qualified prime contractor at
 the best  price  to the Government.   Whenever such an arrangement is
 suspected,  it should be referred to the OIG, since such practices
 may be a  violation of the Antitrust Act.

 II.   REVIEW OF  POSTAWARD SUBCONTRACTS

 Consent

      In general ,  unless consent requirements are waived as a
 result of the approval of the contractor's purchasing system
 pursuant  to  FAR Subpart 44.3 or otherwise exempted under the
 applicable FAR subcontract clause,  subcontracts awarded after
 prime contract award require CO consent, and are subject to the
 requirements of FAR Part 44, "Subcontracting Policies and
 Procedures . '

      FAR  44.202-2  lists several factors the CO must review and
 evaluate before granting consent.  Reviewing the proposed
 subcontract  is necessary to assure the following:

      •   Was adequate price competition obtained or its absence
          properly justified?

      •   Has the  contractor performed adequate cost or price
          analysis?

      •   Is there a sound basis for selecting and determining the
          responsibility of a particular subcontractor?

      •   Does the subcontract contain required flowdown clauses?
     COs responsible for subcontract consent shall confirm with
the PO on whether the technical skills provided by the
subcontractor are needed,  or are already provided under the
contract by the prime or a team subcontractor.   COs are
responsible for reviewing the reasonableness of rates proposed by
post-award subcontractors before granting consent to subcontract;
                           D - 6

-------
prime contractors are accountable for performing cost or price
analyses of proposed subcontractors.
     If included in the contract, prime contractors must adhere to
FAR Clause 52.244-5, "Competition in Subcontracting," where the
contractor shall select subcontractors on a competitive basis to
the maximum practical extent consistent with the objectives and
requirements of the contract.

     COs may only accept justifications for sole source awards if
the prime contractor provides substantive evidence that no other
responsible party exists, or there are circumstances of unusual
and compelling urgency.  Statements of uniqueness,  including
requirements for geographical location, site specific experience,
or that the offerer is the only available source, are not an
acceptable justification for sole source subcontracting unless
adequate documentation is submitted by the prime contractor .   In
addition, EPA experience or incumbent contractor status rarely
should qualify as uniqueness under such sole source awards, absent
other supporting factors.  Further, lack of planning is not an
adequate justification for sole source awards.  COs are
encouraged to work with the PO to allow prime contractors
sufficient time to compete post-award subcontracts, if the prime
contractor chooses to subcontract .

Subcontract Consent Documentation

     One practice affirmed in the June 8, 1994, 0AM memorandum,
"Required Practices Concerning Subcontracts," was to identify each
subcontract in the contract .   For some contracts this is not
administratively feasible.  Because of the volume in Superfund
contracts,  for example, non-team subcontracts are usually
consented to by letter.  In recognition of these circumstances,
COs may provide consent by letter for non-team subcontractors
under any contract.

     Another practice required under the June 8, 1994, memorandum
was to identify the ceiling amount in the contract for each listed
subcontract.  Some COs instead establish an aggregate ceiling for
all subcontracts, rather than identify a ceiling for each
subcontract.  This raised the broader question of the necessity of
establishing subcontract ceilings in Agency subcontracts.  Since
the estimated amount of the subcontract is covered by the CO's
consent, the identification of a ceiling is technically redundant.
                              D - 7

-------
Therefore,  COs are no longer required to identify subcontract
ceiling amounts in contracts.

      This PPN impacts yet another practice in the June  8,  1994,
memorandum,  of requiring a formal contract modification when
consenting to an increase in the estimated amount of a
subcontract.   Accordingly,  COs may now consent to increases in the
estimated amount of subcontracts by letter or by contract
modification.

      However,  there are circumstances where it may be appropriate
for  the PCO to forward the contract file to the AGO without  taking
action  on the  request for subcontract consent. In cases where
action  is not  taken, the PCO shall annotate the file on the
consent request.  An example could be the unavailability of  an
approved indirect cost rate for a subcontractor.  Given the  time
incident to obtaining an audited rate,  it would be more
appropriate for the PCO to transfer the file to the AGO without
taking  further action.  Another example is when the proposed
subcontract will not be available for PCO review within a
reasonable period of time after contract award.  In such cases the
PCO  shall annotate the file as to why no action was taken on the
c ons ent r eques t .

      If practicable, the PCO should consent to team
subcontractors.  Having already evaluated the team subcontracts
from a  technical and financial standpoint,  the PCO is clearly the
most  appropriate individual to provide or deny subcontract consent
in the  initial  contract,  if the proposed subcontract has been
included in the proposal .

      COs should not consent to subcontracts without reviewing the
request  and supporting data.  The review of the subcontract  is
necessary to assure that the proposed rates,  fee,  and estimated
cost  or  fixed price amount have been incorporated; the required
flowdown  clauses have been included; and the payment terms are
appropriate.  Further, FAR 44.202-2 sets forth factors COs must
consider before consenting to subcontracts,  some of which require
review of the subcontract itself.
     Government personnel are prohibited from directing prime
contractors to contract with specific firms,  or to assist a prime
contractor in selecting subcontractors,  or personnel to be used on
a subcontract.  The underlying reason is that prime contractors
                               D -  8

-------
are selected, in part,  for their management  abilities,  including
subcontract selection and management.   CDs,  with PO assistance,
are required to review  prime  contractor consent  requests,
including the statement of work, for evidence  of directed
subcontracting and to decline consent where  such evidence exists.
If evidence exists of directed subcontracting, the CO  is
responsible for denying the prime  contractor's request to
subcontract.

Checklist

      In order to assist the CO in  evaluating a subcontract
consent request,  a Subcontract Consent Review Checklist
(Attachment 1)  is provided as  suggested  guidance  for use by the
CO.  The checklist contains many issues  the CO  should consider
before consenting to subcontract.

Attachment
                               D - 9

-------
                                               Attachment  1
                SUBCONTRACT CONSENT REVIEW CHECKLIST

Prime Contractor:	Contract  #: —
Proposed Subcontractor:	.	
Type of Subcontract:	
Maximum Subcontract Value:.
Period of Performance:	
NoJtjeti Subcontract consent nay not be required depending on
contract type and whether the contractor has an  approved
purchasing system. (See FAR Subparts 44.2 and 44.3)
                                          YES    KLQ  N/A  Comments.

1. Is the subcontract for special test      	   	  	
equipment or facilities that are
available from Government sources?

2. Is the selection of the particular       	   	  	
supplies, equipment, or services
technically justified?

3. Are the subcontractor skills needed?     	    	  	

4. Are the rates proposed for             	    	  	
subcontractors reasonable?

5. Will the subcontractor assist the      	    	  	
prime contractor in complying with
its goals contained in the prime
contractor's small business and
small disadvantaged business
subcontracting plan?

6. Has the contractor obtained adequate     	   	  	
price competition or justified its
absence?
                               D - 10

-------
          SUBCONTRACT CONSENT REVIEW CHECKLIST  (Continued)

                                          YES   NQ  N/A  Comments

7. Does the contractor have a sound,         	   	  	
documented basis for selecting and
determining the responsibility of
the subcontractor?

8. Did the contractor adequately assess   	    	  	
and dispose of the subcontractor's
alternate proposals, if offered?

9. Is the proposed subcontract type         	   	  	
appropriate for the risks involved and
consistent with the FAR?

10. Has the contractor performed          	    	  	
adequate cost or price analysis,
and obtained current cost or
pricing data (if applicable),
including the required certificates?

11. Has adequate consideration been       	    	  	
obtained for any proposed subcontract
that will involve Government-furnished
facilities not previously authorized
in the contract?

12. Has the contractor adequately and       	   	  	
reasonably translated prime contract
technical requirements into subcontract
requirements?

13. Does the contractor comply with         	   	  	
applicable cost accounting standards
for awarding the subcontract?

14. Is the subcontractor on GSA's         	    	  	
List of Parties Excluded From
Federal Procurement and
Non-Procurement Programs?
                            D - 11

-------
       SUBCONTRACT CONSENT REVIEW CHECKLIST  (Continued)

                                           YES  NQ  N/A   Comments
 15 . Have  the  required  flow-down clauses
 been included in the subcontract?

 16. For a cost type subcontract, is the
 fee within the fee limitations set forth
 in FAR 16.301-3?

 17 . Is the subcontract providing for
 payment of fee on a cost-plus-
 percentage-of-cost basis?

 18. Is the decision to subcontract
 consistent with the contractor's
 approved  make'-or-buy program?

 19. Does  the  proposed  subcontractor
 contain all required Representations
 and Certifications (either the FAR clause
 or the prime  contractor's format)?

 20. Is the Statement of Work  (SOW)
 for the proposed subcontract so
 restrictive as to limit competition?

 21. Does  the  SOW conform to requirements
 concerning personal services, inherently
 governmental  functions, and prohibited
 services?
22. General comments:.
NOTE: Additional comments may be included as  an attachment to the
      checklist.
                            D - 12

-------
       SUBCONTRACT CONSENT REVIEW CHECKLIST (Continued)
In accordance with this review, consent to award the subcontract
is hereby recommended.

Recommend:
Contract Specialist                                    Date


Approved:
Contracting Officer                                    Date
                            D - 13

-------
U-IH

-------
            APPENDIX E

   PROCUREMENT POLICY NOTICE
              99-03

  ISSUANCE OF ORDERS UNDER GSA'S
  MANAGEMENT, ORGANIZATIONAL
AND BUSINESS IMPROVEMENT SERVICES
             (MOBIS)
                E-l

-------
E -  2

-------
                                 April 12,1999

                       PROCUREMENT POLICY  NOTICE
                                   NO.  99-03

SUBJECT:  Issuance of Orders Under GSA's Management, Organizational and
            Business Improvement Services (MOBIS) - Federal Supply Schedule

FROM:     Betty L. Bailey, Director /s/
            Office of Acquisition Management

TO:         Senior Resource Officials
            OAM Division Directors
            Regional Contracting Officer Supervisors
            Bruce Binder, OGC

EFFECTIVE DATE:   Date of issuance (shown above)

EXPIRATION DATE:  Upon cancellation or until superseded.

FOR FURTHER INFORMATION CONTACT: Paul Schaffer on 202-564-4366 or
GroupWise SCHAFFER.PAUL
                                    DETAIL
                                      E - 3

-------
 BACKGROUND: FAR Part 8.4 contains policies and procedures for acquiring services and
 products under Federal Supply Schedules (FSS), such as MOBIS. The policies and procedures of
 FAR Part 13 (Simplified Acquisition Procedures) do not apply when placing MOBIS orders.
 Ordering officers need not seek further competition outside of the Schedule contractors,
 synopsize the requirement, or make a separate determination of fair and reasonable pricing.
 Furthermore, there is no longer a maximum order limitation. The lead time for awarding a
 MOBIS task order, after preparation  of the statement of work, could range from a few days to a
 few weeks depending on the particular circumstances of the requirement.

 Services Included in the Scope of the MOBIS Schedule -  The services covered by this schedule
 support agencies in the implementation and continuation of management, organizational and
 business improvement efforts. Examples include but are not limited to: quality management;
 business process reengineering; strategic and business planning; bench marking; strategic
 sourcing; Industry Standard Organization (ISO) 9000 and ISO 14000; activity-based costing;
 financial management analysis related to an improvement effort; statistical process control;
 surveys; individual and organizational assessments and evaluations; process improvements;
 process modeling and simulation; performance measurement; organizational design; change
 management; development of leadership/management skills; and training in improving customer
 service and satisfaction.

 Services Outside the Scope of the MOBIS Schedule -  Examples of services which are not
 appropriate for purchase under this schedule include, but are not limited to: financial audits;
 performance of operational activities; purchase of automated data processing (ADP) hardware
 and purchase of ADP software development not specifically related to an improvement effort.
 This schedule is not intended to be used by EPA to do isolated or independent management and
 technical studies when the contractor is asked to produce a final report or product with little or no
 involvement of the Agency management or its staff.

 POLICY:  The same operational divisions in Headquarters, Research Triangle Park or Cincinnati
 currently providing contract support to program offices will also provide MOBIS Schedule
 support. MOBIS orders must be placed by EPA contracting officers  (COs).

       When developing requirements for service contracts, project officers (POs) are responsible
for accurately describing the need to be filled or problem to be resolved through service
contracting  with assistance from COs.  While effective management oversight is required for all
types of service contracts, some require more  oversight than others. For example, services
that support or gather data for Government decision-making, policy development, or program
management are more susceptible  to abuse. These, therefore require  a greater level of scrutiny.
      POs and COs should use the series of questions in OFPP Policy Letter 93-1 (Attachment


                                           2

                                        E - 4

-------
1) to review requirements for service contracts to ensure effective management oversight. If the
response to any of the questions in the policy letter is affirmative, POs and COs should review the
management controls listed in Attachment 2 and include management control clauses in the task
order that require the contractor to take certain actions,  e.g., safeguarding confidential
information or sensitive data. In addition, conflicts of interest (COI) shall be addressed for all
orders issued under MOBIS FSS contractors consistent  with the procedures in FAR 9.5 and PPN
91-06.  Other management controls for services should be documented elsewhere in the task
order file to avoid placing EPA in a vulnerable position. The level of management control should
be proportionate to the level of vulnerability of the task order.

       A description of MOBIS services and products is provided as Attachment 3. MOBIS
contractors are updated continually.  For the most current MOBIS contractors check the
following Internet site: http://www.northwest.gsa.gov/fss/services/mobis.htm.

DEFINITIONS:

Task Request - An Agency request to provide products  or services, similar to those described in
the MOBIS contract, tailored to meet the agency's requirement. The task request will, at a
minimum, include a performance-based work statement [see FAR 37.602-l(b)] for a particular
requirement or project from an ordering agency that clearly specifies all tasks to be performed and
products to be delivered under the task order; and asks for written or oral proposals from MOBIS
FSS contract awardees.

Task Order Proposal - The contractor's bona-fide proposal describing how it intends to provide
the products or services, stated in the task request, at the negotiated price.

Task Order - A task order is the written order issued by EPA that provides the necessary funding
and specifies tasks to be performed.  This order will contain a performance-based statement of
work as described in FAR 37.602-l(b).

Task Order Project Officer (TOPO) - An individual who serves as the Contracting Officer's
Representative (COR) and is technically proficient in the task order subject matter to monitor task
order performance. TOPOs are required to meet the training and certification requirements as set
forth in the Contracts Management Manual Chapter 7 for Delivery Order Project Officers.  EPA
Form 1900-65 A is required for the nomination of all TOPOs ^nd must be submitted to the
contracting officer for each MOBIS task order.

 Best Value - The Agency can obtain best value in negotiated acquisitions by using any one or a
combination of source selection approaches. In different types of acquisitions, the relative
importance of cost or price may vary. For example, in acquisitions where the requirement is
clearly definable and the risk of unsuccessful contract performance is minimal, cost or price may
play a dominant role in source selection.  The less definitive the requirement, the more
development work required, or the greater the performance risk, the more technical or past


                                            3
                                           E  -  5

-------
performance considerations may play a dominant role in source selection.

Best value is the result of the appropriate combination of:

0      Acquisition strategy (prudent risk management instead of risk avoidance);

0      Choice of contracting method;

0      Evaluation factors and subfactors (including, in most cases, consideration of past
       performance);

0      Source Selection methodology; and

0      Timeliness and efficiency of the process used to fulfill the customer's specific requirement
       for goods and services.

ORDERING PROCEDURES:

For orders equal to or less than S2.500:

EPA can obtain services or supplies simply by placing an order with the MOBIS FSS contractor
of the agency's choice.

For orders over S2.5QO:

a) At a minimum, the Agency should prepare a performance-based statement of work (SOW),
which includes the following information:

       - Detailed Description of all Tasks to be Performed or Supplies to be Delivered.
       — Deliverable Schedule.
       — Applicable Standards.
       — Acceptance Criteria.
       — Period of Performance (including any options).
       — Location of Work.
       - Any Special Requirements (i.e., security clearances, travel, special knowledge, etc.)-

b) The requiring activity prepares an independent Government estimate that is broken out by
work breakdown structure for hours, labor categories, and well defined other direct costs.

c)  The Agency should develop a written task request. The task request is not an actual task
order, but rather, a request for proposals from selected MOBIS FSS contractors. The task
request
may be transmitted electronically. The task request should include:


                                            4
                                         E  - 6

-------
       1) The performance-based SOW (see paragraph a) above);

       2) A request for task order proposals by a certain date;

       3) A request for technical proposals explaining how a schedule contractor plans to meet
       the requirements in the statement of work. How technical proposals will be presented
       (oral, written, or a combination of both) will be at the discretion of the contracting officer;

       4) A request for the contractor to submit either a firm-fixed price (preferred method) or a
       labor hour quote to provide the services outlined in the SOW;

       5) A draft format to standandardize the price portion of the contractor's task order
       proposal submission; and

       6) Evaluation criteria and their relative importance.

The task order proposal should be split into two parts:  Technical and Price.  All criteria used to
evaluate either portion of the potential contractor's task order proposal must be identified in the
agency task request.

d)  EPA should review the MOBIS FSS catalogs/pricelists to identify those contractors who are
able to meet their requirements. The most current MOBIS contractor listing is available at the
following Internet site:  http://www.northwest.gsa.gov/fss/services/mobis.htm. The written
task request and SOW should be transmitted to at least three well-qualified MOBIS FSS
contractors. Ordering offices  may consider reasonably available information about  the services or
supplies offered by individual MOBIS contractors in determining who will receive the written task
request and SOW.  This may include contacting MOBIS FSS contractors for additional
information.

e) The following checklist represents some commonly used criteria for the evaluation of the
technical portion of a MOBIS FSS contractor's  task order proposal:

       ~ The contractor's understanding of the requirements.

       — A description of the contractor's technical and management approach to accomplish the
       requirements within the specified time frame.

       — A listing of milestones or a breakdown of when certain facets of the required task will
       be completed.

       — A description of the skill categories to be utilized.

       — A description and/or listing of which portions of the effort will be subcontracted, if
                                         E -  7

-------
       any.

       — A description of the number of hours required to accomplish the work effort for each
       requirement, milestone, or breakdown of the work structure.

       — Corporate experience.

       — Past performance.

f) Unless otherwise specified, pricing shall be firm-fixed price.  The firm-fixed price shall be based
on the hourly rates in the schedule contract or the hourly rates negotiated by the ordering, agency.
Note: EPA may negotiate price reductions and the schedule contractors are no longer required to
extend the reduced prices to other Federal customers. Pricing shall consider the mix of labor
categories and level of effort required to perform the services described in the SOW.

The firm-fixed price of the order should also include any travel costs or other incidental costs
related to the performance of the services ordered unless the order provides for reimbursement of
travel costs at the rates provided in the Federal Travel or Joint Federal Travel Regulations.

g) If the contracting officer makes a determination that it is not possible to accurately estimate
the extent or duration of the work or to anticipate costs with any reasonable degree of accuracy at
the time of placing the order, a labor hour or time and-materials proposal may be requested. A
ceiling price must be established for labor-hour and time-and-materials orders.

h) The contract maximum order level is not a ceiling. Rather, it is a suggested target from which
EPA may seek further price reductions. If the order exceeds the maximum order threshold and/or
the contractor agrees to offer further price reductions, the order should still be placed against the
schedule contract.  Contractors are no longer required to pass on price reductions given to one
Federal customer to other Federal clients. EPA may seek price reductions on task orders of any
dollar value.

i)  The following checklist represents information agencies commonly request MOBIS FSS
contractors to provide in the price portion of their task order proposals:

       — List all tasks to be performed and the number of hours required for completion.

       — Identify the skill levels required to perform each task, the number of hours needed for
       each skill level, and the associated labor rate for each skill level.

      — Summarize the total number of hours and the extended price required to complete each
      task.

      — Summarize the extended price by labor hour category.
                                        E - 8

-------
       —  Provide a total price for all tasks.

j)  The prospective MOBIS FSS contractors shall submit a task order proposal, or notify the
ordering agency if they wish to decline the request, within the time frame specified by the ordering
agency in the task request.

k) EPA will review and evaluate each task order proposal submitted by the contractors. The
technical proposal should be evaluated in accordance with the evaluation criteria and the method
of award specified in the task request.  All prospective awardees must be treated fairly. EPA may
make award upon receipt and evaluation of task order proposals or EPA may conduct
negotiations. If negotiations are conducted, they will occur at the time and place designated by
the ordering contracting officer. Following the completion of negotiations, the contractor shall
submit a finalized task order proposal, as directed by the ordering contracting officer.  EPA will
then select the contractor that represents the best value based on the revised proposals.  In
accordance with FAR 8.4, EPA is not required to develop formal evaluation plans or scoring
schemes.  Award  shall be made on a best value basis.

1)  A task order is issued by the ordering contracting officer. The task order will reflect the final
revision, if any, of the technical and price portions of the task order proposal  and include a firm
milestone schedule.  Any changes to a task order will be issued in writing by the ordering
contracting officer. Only the ordering contracting officer may modify the terms and conditions
of the task order.  A task order may not increase the scope nor modify the terms and conditions of
the MOBIS FSS Schedule.

GENERAL GUIDELINES:

a) Ordering offices should give preference to small business concerns when two or more MOBIS
FSS contractors can provide the services or supplies at the same price.

b) When the ordering office's requirement includes both products and services, the ordering
office should total the prices for the products and the services and select the  contractor that
represents the greatest value in terms of meeting the agency's total needs.

c) The ordering office, at a minimum, should document orders by identifying the contractor from
whom the services or supplies were purchased,  the services or supplies purchased, and the
amount paid. If other than a firm-fixed price order is placed, the documentation should include
the basis for the determination to use a labor-hour or time-and-materials order. For Agency
requirements in excess of $2,500, the  order file should document the evaluation of the
contractors' proposals and the rationale for any trade-offs made in making  the selection.


d) The Agency may establish Blanket Purchase Agreements (BPAs) for recurring services under
the MOBIS FSS contract provided that the following procedures are used. The BPA must:
                                          E -  9

-------
       — Define the services that may be ordered under the agreement.

       — Specify the delivery or performance time frames.

       — Establish billing procedures.

       — Estimate, but not guarantee, the volume of purchases that will be made through the
       agreement. (Contractors  may be open to progressive discounts as the volume of orders
       placed under the BPA increases.)

       — Identify the offices able to place orders against the BPA.

The Agency shall identify its intention to use a single BPA or multiple BPAs to meet the
requirements of the SOW in the task request that is forwarded to contractors for consideration.
The task request must also indicate the basis that will be used for selecting the contractors to be
awarded BPAs.

Established BPAs must be reviewed annually to ensure that the agreements still represent the best
value (considering price, special qualifications, etc.) in meeting the Agency's needs.
                                       E  - 10

-------
                                                                         Attachment 1
              OFFICE OF FEDERAL PROCUREMENT POLICY (OFPP)

                                POLICY LETTER 93-1

                                     Appendix A

                     Management Oversight of Service Contracting
The following is a series of questions to help agencies analyze and review requirements for service
contracts.

A. INHERENTLY GOVERNMENTAL FUNCTIONS

If the response to the first question is affirmative, the contract requirement is for an inherently
Governmental function that must be performed by Government officials; if the response to the
second question is affirmative, the contract requirement may be for an inherently governmental
function:

  (1)  Is the requirement for a function that is listed in Appendix A of OFPP Policy Letter 92-1,
Inherently Governmental Functions?

  (2)  If the function is not listed in Appendix A, do any of the factors in the "totality of the
circumstances" analysis discussed in section 7(b) of Policy Letter 92- 1 indicate that the function
may be inherently governmental?

B. COST EFFECTIVENESS

If the response to any of the following questions is affirmative, the agency may not have a valid
requirement or not be obtaining the requirement in the most cost effective manner:

  (1)  Is the statement of work so broadly written that it does not support the need for a specific
service?

  (2)  Is the statement of work so broadly written that it does not permit adequate evaluation of
contractor versus in-house cost and performance?

  (3)  Is the choice of contract type, quality assurance plan, competition strategy, or other
related acquisition strategies and procedures in the acquisition plan inappropriate to ensure good
contractor performance to meet the user's needs?


                                           9

                                        E -  11

-------
   (4)   If a cost reimbursement contract is contemplated, is the acquisition plan inadequate to
 address the proper type of cost reimbursement to ensure that the contractor will have the
 incentive to control costs under the contract?

   (5)   Is the acquisition plan inadequate to address the cost effectiveness of using contractor
 support (either long- term or short-term) versus in-house performance?

   (6)   Is the cost estimate, or other supporting cost information, inadequate to enable the
 contracting office to effectively determine whether costs are reasonable?

   (7)   Is the statement of work inadequate to describe the requirement in terms of "what" is to
 be performed as opposed to "how" the work is be accomplished?

   (8)   Is the acquisition plan inadequate to ensure that there is proper consideration given to
 "quality" and "best value"?

 C. CONTROL

 If the response to any of the following questions is affirmative, there may be a control problem:

   (1)   Are there insufficient resources to evaluate contractor performance when the statement
 of work requires the contractor to provide advice, analysis and evaluation, opinions, alternatives,
 or recommendations that could significantly influence agency policy development or
 decision-making?

   (2)   Is the quality assurance plan too general to monitor adequately contractor performance?

   (3)   Is the statement of work so broadly written that it does not specify a contract deliverable
 or require progress reporting on contractor performance?

   (4)   Is there concern that the agency lacks the expertise to evaluate independently the
 contractor's approach, methodology, results, options, conclusions, or recommendations?

   (5)   Is the requirement for a function or service listed in Appendix B of OFPP Policy Letter
 92-1, or similar to a function or service on that list, such that greater management scrutiny is
 required of the contract terms and the manner of its performance?

 D. CONFLICTS OF INTERESTS

If the response to any of the following questions is affirmative, there may be a conflict of interest:

   (1)  Can the potential offerer perform under the contract in such a way as to devise solutions
                                           10

                                          E -  12

-------
or make recommendations that would influence the award of future contracts to that contractor?

   (2)  If the requirement is for support services (such as system engineering or technical
direction), were any of the potential offerers involved in developing the system design
specifications or in the production of the system?

   (3)  Has the potential offeror participated in earlier work involving the same program or
activity that is the subject of the present contract wherein the offeror had access to source
selection or proprietary information not available to other offerers competing for the contract?

   (4)  Will the contractor be evaluating a competitor's work?

   (5)  Does the contract allow the contractor to accept its own products or activities on behalf
of the Government?

   (6)  Will the work, under this contract, put the contractor in a position to influence
Government decision-making, e.g., developing regulations, that will affect the contractor's current
or future business?

   (7)  Will the work under this contract affect the interests of the contractor's other clients?

   (8)  Are any of the potential offerers, or their personnel  who will perform the contract, former
agency officials who — while employed by the agency — personally and substantially participated
in (a) the development of the requirement for, or (b) the procurement of, these services within the
past two years?

E.  COMPETITION

If the response to any of the following questions is affirmative, competition may be unnecessarily
limited:

   (1)  Is the statement of work narrowly defined with overly restrictive specifications or
performance standards?

   (2)  Is the contract formulated in such a way as to create a continuous and dependent
arrangement with the same contractor?

   (3)  Is the use of an  indefinite quantity or term contract arrangement inappropriate to obtain
the required services?

   (4)  Will the requirement be obtained through the use of other than full and open competition?
                                                                            Attachment 2
                                             11

                                          E  - 13

-------
                   DISCUSSION OF MANAGEMENT CONTROLS

COs may use the following discussion to assist POs in drafting management controls for then-
individual acquisitions.

ADVISORY AND ASSISTANCE SERVICES

Services are considered advisory and assistance services if they may rise to the level of inherently
Governmental functions without adequate controls. Generally, advisory and assistance services
are services which support or improve Agency policy development, decision-making, management
and administration, or research and development activities.  Examples of advisory and assistance
services include, but are not limited to, the areas listed in the Contracts Management Manual,
Chapter 2, Attachment B.  Exclusions or exemptions from the definition of advisory and
assistance services are found at FAR 37.202.  When advisory and assistance services are involved,
the project officer prepares and submits a discussion of management controls for acceptance by
the contracting office.

CONFLICTS OF INTEREST

Order language should be included to address the means of identifying and avoiding or mitigating
or neutralizing actual or potential conflicts of interest. These controls might include: (1)
requirements for reporting of prior and current work and clients that might create conflicts; (2)
limits or advance approval by the Agency on future work that might pose potential or actual
conflicts with current contract work; or (3) procedures for ensuring that the contractor will not
gain an unfair advantage in future requirements.

CONFIDENTIAL INFORMATION OR SENSITIVE DATA

For performance on a MOBIS order, the contractor may require access to many types of
confidential information or sensitive data that EPA obtains and maintains. Confidential
information includes confidential business information and Privacy Act information.

Confidential business information includes trade secrets, proprietary, commercial, financial, and
other information that is afforded protection from disclosure under certain circumstances as
described in the Trade Secrets Act and Office of Management and Budget Circular A-130.

Privacy Act information includes groups of records about individuals under the control of an
agency from which information is retrieved by the name of the individual or by some identifying
number, symbol, or other identifier-assigned to the individual. The conditions of disclosure of
Privacy Act information is described in the Privacy Act.

Sensitive data includes enforcement-sensitive information and EPA internal management-sensitive
information.  Enforcement sensitive information includes privileged records or information
                                          12

                                        E -  14

-------
compiled for law enforcement purposes (whether administrative, civil or criminal) that, if
disclosed, could reasonably result in disruption to the legal process, enforcement action or would
reveal enforcement techniques. EPA internal management- sensitive information includes
information used within the Agency that, if not afforded protection from disclosure, could result
in unfair contracting practices or may adversely affect Agency personnel or property.

The CO and PO should first ensure that access to confidential business information by
contractor/subcontractor personnel will, in fact, be authorized. Then, special clauses might be
added to ensure there is no improper contractor access to confidential business information,
Privacy Act protected information, or other sensitive information, such as management or
enforcement-sensitive information.  The controls should clearly identify the procedures or
processes that must take place prior to release of any protected information to the contractor,
requirements  for confidentiality agreements, and limits on use and disclosure of the data by
contractor personnel.

During administration, COs and POs should review the order to determine if contractor access to
confidential information or sensitive data is required for performance. If so, they must ensure that
the release of this data  is authorized by the order and ensure that the conditions of disclosure are
met prior to the CO's approving the order and the program's providing contractor access to this
information.

PERSONAL SERVICES

Controls may be needed to ensure the order as administered does not lead to inappropriate
personal services relationships.  There are formal procedures, forms, and prescribed criteria for
issuing work requirements to help preclude improper personal services relationships from
developing. Additionally, there may be a need to perform work in phases with Agency review
points and acceptance criteria, in addition to Agency-provided guidelines and procedures.

To avoid any likelihood that contractor personnel could be confused with EPA employees or
improperly representing EPA, contractors must be required to properly identify themselves as
contractor employees.  This includes requirements for contractors to always identify themselves
orally by their name and organization, and to physically display through their dress or
 identification cards their name and organization.

 As part of contract administration, COs must perform on-site visits periodically on all on-site
 contracts and, if weaknesses are identified, COs will perform annual visits. COs must discuss
 personal  services issues with POs for individual on-site contracts on an annual basis.
 INHERENTLY GOVERNMENTAL FUNCTIONS



                                             13


                                           E - 15

-------
To ensure there is no appearance or likelihood that Agency policies or decisions are made by non-
EPA employees or that Agency policy-makers and decision-makers are not improperly influenced
by recommendations presented as contract deliverables, one management control is to require
contractors when submitting reports that contain recommendations to: (a) explain and rank policy
or action alternatives, if any, (b) describe procedures used to arrive at recommendations, (c)
summarize the substance of deliberations, (d) report any dissenting views, (e) list sources relied
upon, and/or (f) otherwise make clear the methods and considerations upon which
recommendations are based.

Additionally, by providing Agency-guidelines (for preparation of deliverables) or scripts (for
helplines and hotlines) and identifying mechanisms for contractors to gain additional information
when the unanticipated occurs, there will be reduced risk of contractors interpreting or appearing
to interpret Agency policy, regulations or otherwise performing inherently Governmental
functions.

FAR 7.503 contains a list of functions considered to be inherently Governmental functions or
which shall be treated as such.

MISCELLANEOUS

Additional management controls may be needed to ensure contractor compliance with printing
requirements, survey requirements or ADP requirements.  In addition to standard Agency clauses
regarding printing restrictions, Paperwork Reduction Act clearances,  and OIRM requirements, the
CO may need to prepare order language to supplement these requirements.
                                                                    Attachment 3
                                           14
                                        E  - 16

-------
                          MOBIS SERVICES AND PRODUCTS
SIN 874-1   CONSULTATION SERVICES - (Advisory and Assistance Services)

Contractors shall provide expert advice, assistance, guidance or counseling in support of agencies'
management, organizational and business improvement efforts. This may also include studies,
analyses and reports documenting any proposed developmental, consultative or implementation
efforts. Examples of consultation include but are not limited to:  strategic, business and action
planning; systems alignment; cycle time; high performance work; leadership systems; performance
measures and indicators; process and productivity improvement; organizational assessments,
program audits, and evaluations.

SIN 874-2   FACILITATION SERVICES

Contractors shall provide facilitation and related decision support services to agencies engaging in
collaboration efforts, working groups, or integrated product, process, or self-directed teams.
Agencies bringing together diverse teams and/or groups with common and divergent interests may
require a neutral party to assist them in:  the use of problem solving techniques; defining and
refining the agenda; convening and leading large and small group briefings and discussions;
resolving disputes,  disagreements, and divergent views; recording discussion content and
focusing decision-making; providing a draft for the permanent record; debriefing and in overall
planning.

SIN 874-3   SURVEY SERVICES

Contractors shall provide expert consultation, assistance, and deliverables associated with all
aspects of surveying within the context of MOBIS.  Contractors shall assist with, and/or perform
all phases of the survey process to include, but not limited to: planning survey design; sampling;
survey development; pretest/pilot surveying; assessing reliability and validity; administering
surveys using the various types of data collection methods as appropriate (e.g., computer-assisted
surveying, focus groups, written questionnaires, in-person and telephone interviewing);
database administration; and analyses of quantitative and qualitative survey data.  Production of
reports to include, but not limited to: description and summary of results with associated graphs,
charts, and tables; description of data collection and survey administration methods; discussion of
sample characteristics and representativeness of data; analysis of nonresponse; and briefings
of results to  include discussion of recommendations and follow-up actions. Contractors shall
provide assistance with action planning and implementation of recommendations as necessary.

SIN 874-4   TRAINING SERVICES


                                            15

                                        E  - 17

-------
Contractors may provide off-the-shelf training packages as well as off-the-shelf training packages
customized to the agency's specific needs related to management, organizational and business
improvement services, such as but not limited to: customer service; team building; performance
measurement; business process reengineering; strategic planning; ISO 9000 and ISO 14000;
statistical process control; quality management; benchmarking; and process improvement;
performance problem-solving; and change management. Customization of off-the-shelf training
may include but is not limited to: workbooks; training manuals; slides; videotapes; overhead
transparencies; advanced presentation media; and state-of-the-art computer based training.

SIN 874-5 SUPPORT PRODUCTS

Support products are those items used in support of services offered in SINs 874-1 through 874^
only. They include workbooks, training manuals, slides, audio cassette tapes, videotapes,
overhead transparencies, cd roms, advanced presentation media, state-of-the-art computer
based training, and assessment/survey instruments. Two categories of support products may be
priced in this solicitation: (1) off-the-shelf and (2) custom-designed off-the-shelf (no
administrative material such as notebooks, tabs, etc. shall be separately priced in conjunction
with customized support products, as all associated costs of the materials shall be included in one
overall price).

All Support Products, training materials, etc. shall be properly packed and packaged so as to
avoid any damage in transit.  All pricing for deliveries is based on the terms of FOB Destination,
applicable to delivery within the Continental United States (CONUS). The contract only covers
routine shipping (normally UPS ground shipment) and any agency requiring expedited shipment is
responsible for the difference between normal UPS and expedited shipping rates.  Payment for
shipment of any deliveries outside of CONUS will be at the expense of the ordering agency.
                                           16

                                          E  - 18

-------
           APPENDIX F

   PROCUREMENT POLICY NOTICE
              01-01

PROVIDING GOVERNMENT FURNISHED
   PROPERTY AT SUPERFUND SITES
   UNDER EPA CLASS DEVIATION
      DATED OCTOBER 20,2000
               F-l

-------
F  -  2

-------
                                    December 22, 2000

                            PROCUREMENT POLICY NOTICE
                                          01 -01
SUBJECT:    Providing Government Furnished Property at Superfund Sites Under EPA Class
              Deviation Dated October 20, 2000

FROM:       Judy S. Davis, Acting Director /s/ John C. Gherardini for
              Office of Acquisition Management

TO:           OAM Division Directors
              Regional Contracting Officer Supervisors
              Office of General Counsel

                                       SYNOPSIS

SUMMARY: This Procurement Policy Notice (PPN) provides instruction for the use of EPA Class
Deviation dated October 20,2000. The deviation is specific to contracts being performed at
Superfund sites, and its use is limited to the following situations:

       a) when the property is required for a period of time that exceeds a contract of shorter
       duration, and the property will continue to be operated by EPA or a contractor performing on
       EPA's behalf, and the property is either permanently installed or costly to remove and rebuild,
       or;

       b) when there is an agreement in place which requires that the property will be transferred to a
       successor operator for operation and maintenance. The agreement may be in the form of a
                                          F - 3

-------
       Record of Decision, Action Memorandum, or State Superfund Contract, or may be an
       independent agreement between EPA and the successor operator, or;
       c) when there is a reasonable expectation that one or both of the circumstances outlined in a) or
       b) above will apply, but a formal plan or agreement is not yet in place to document the decision.

EFFECTIVE DATE: Date of issuance as shown above

EXPIRATION DATE: Upon cancellation or until superseded, or upon expiration of the class
deviation.

FOR FURTHER INFORMATION CONTACT:  Larry Wyborski on (202) 564^369 or Leigh
Pomponio on (202) 564-4364

                                        DETAIL

BACKGROUND: On May 1,1996, OAM issued Procurement Policy Notice 96 - 03 to set forth
Agency policy on the provision of Government property to contractors in compliance with Part 45 of
the Federal Acquisition Regulation (FAR). That policy limited the provision of Government property to
circumstances meeting the exceptions of either FAR 45.302-1, or the EPA Class Deviation dated May
31,1996.

       During the review and comment period of the 1996 guidance, the issue of how to disposition
property constructed as part of the remediation action at a Superfund site became an issue. To
administratively facilitate the disposal of such, it was determined that it should be transferred to the
internal Personal Property Accountability System (PPAS) and treated as Agency-held property in lieu
of contractor held property for disposal purposes.

       Although this direction was intended to change the custody of property from contractor to
Agency for disposal purposes only, property management reviews during the ensuing years have
revealed mat EPA continued to provide certain property items to contractors at Superfund sites under
an incorrect assumption that property that was part of a constructed remediation facility was exempt
from FAR Part 45 and PPN 96-03. The rationale has been that such property, treated as internal
Agency-used property for disposal, is not technically provided to the contractor for use in performance
of their contract  This practice has served to highlight the fact it is necessary for EPA to provide
property in situations not covered by the exceptions in FAR 45.302-1 and the Class Deviation dated
May 31,1996. Therefore, EPA has secured an additional Class Deviation, dated Oct. 20,2000, to
authorize providing Government property in specific situations.  The covered situations are detailed in
the class deviation, which is included as an attachment hereto.

       In addition to the provision of property, the class deviation addressed the inclusion of costs
associated with the procurement of Government property by the contractor in the calculation of profit
or fee.  FAR 45.302-3(c) prohibits payment of profit or fee on costs associated with a contractor's

                                            -2-

                                         F  - 4

-------
acquisition of Government property. Because the deviation authorizes the provision of property which
is non-routine, and frequently involves the management of complex subcontracts by the contractor, it is
considered appropriate to deviate from FAR 45.302-3(c). To require a contractor to acquire the type
of facilities covered by this class deviation, and to exclude associated costs from the calculation of profit
and fee, would unfairly penalize a contractor.

                                          POLICY

       Contracting Officers may use the class deviation, dated October 20,2000, as authority to
provide property items which are attached or installed on the remediation site when one of the three
conditions of the deviation are satisfied.  The deviation is not intended to apply to all property at
Super-fund locations.  Any property not qualifying under the October 20,2000 class deviation, the June
1996 class deviation, or the exceptions in FAR 45.302-1, must be provided by the contractor.

       Additionally, when use of the class deviation is appropriate, COs are permitted to include the
cost of Government property, which is to be acquired by the contractor under authority of this class
deviation, in the calculations of fee on the contract Any property provided under an authority other
than this class deviation is subject to FAR 45.302-3(c), and the costs of such property should be
excluded from the fee calculation.

       EXCEPTION (a):

       The first permissible situation covered by the class deviation is when property is required for a
period of time that exceeds a contract of shorter duration, and the property will continue to be operated
by EPA or a contractor performing on EPA's behalf, and the property is either attached or installed on
the Superfund site in such a manner that costs associated with deconstruction and reconstruction would
exceed the cost benefit of contractor ownership. For economic reasons, it may not be practical to
require multiple successive contractors to construct and tear down similar or identical remedies.  As
stated in the deviation, utilization of this authority requires the contracting officer to perform an
economic analysis to determine whether substantial economic benefits would accrue to the Agency as a
result of providing Government property.  In the case of a water treatment facility, or other similar
attached or installed facility, the savings are apparent, and a detailed analysis is not required.  This
analysis has been performed at the Agency level and it has been determined that the costs and down-
time associated with repetitive construction, tear down, and removal justifies utilization of this authority.
COs should document their contract file accordingly, stating applicability of this particular analysis to
their current situation, and reference or include a copy of the class deviation.

       A Superfund remediation action may also require the use of portable, mobile, or easily
removable property items.  These items are not automatically qualifying under the class deviation, as it is
not readily apparent that the Agency will benefit substantially by providing such property.  Trailers,
pumps, measuring and monitoring devices, and fencing are a few examples of property items which,
although part of the remedy, might be more appropriately provided by the contractor.  If exception (a)

                                              -3-

                                            F  - 5

-------
of the class deviation is used as authority to provide such items, the CO must perform a detailed cost
analysis to indicate that Government provision of these items results in substantial cost savings. The CO
should compare what the Government would be charged under a cost type contract if the contractor
provided the property, to the costs associated with Government ownership and provision. It is
important to remember that the cost charged to a Government contract is not the acquisition cost, but a
reasonable cost of use, whether through depreciation or a usage rate. Further guidance on this topic is
available in PPN 98-04, Charging Government Contracts for Contractor Provided Property.

       While the costs of contractor ownership are relatively easy to establish as those that are
appropriately reimbursable under a cost type contract, it will not always be easy to assign a monetary
figure to Government ownership costs. COs should, nonetheless, consider such costs in their analysis.
For example, the Government incurs ownership expenses in the form of increased administration by
Government and contractor personnel, outside assistance costs for property management services from
the Defense Contract Management Agency (DCMA), disposal costs, and storage costs.   In general
terms, these items should be addressed in the analysis; their existence cannot be ignored. The property
specialists located in-the Cost and Rate Negotiation Service Center (CRNSC) are available to provide
assistance in estimating some of these costs.

       EXCEPTION (b):

       The second qualifying exception under the class deviation is when there is an agreement in place
which requires that the property will be transferred to a successor operator for operation and
maintenance. The agreement may be in the form of a Record of Decision, Action Memorandum, or
State Superfund Contract, or may be an independent agreement between EPA and the successor
operator. As required by the Comprehensive Environmental Response Compensation and Liability Act
(CERCLA), EPA may be required to pass a working remedy to a third party for continued operation.
When such a condition exists, and a formal agreement is in place to provide for the transfer, COs may
utilize the authority in paragraph l(b) of the class deviation.  The file should be documented to include
reference to the existing formal agreement and to the class deviation, and the applicability of the
agreement to their current situation.

       EXCEPTION (c):

       The final qualifying exception under the class deviation is derived from exceptions (a) and (b),
but permits more latitude in applying the criteria when the future status of a Superfund site, or the use of
a facility item is uncertain. For this reason, use of exception (c) requires careful consideration, and
justification. Exception (c) permits provision of property when there is a reasonable expectation that
one or both of the circumstances outlined in the first two exceptions may apply, but a formal plan or
agreement is not yet in place to document the decision. Occasionally, at time of award, it is uncertain
whether multiple contractors will perform and utilize Ihe same equipment over time at a site, or whether
EPA will be required under CERCLA to provide a facility to a successor operator. In these situations,
when determining whether to provide property, EPA must consider the possibility that either or both of
the circumstances may come to  pass.  In determining the reasonable expectation of the future status of a
                                             -4-
                                          F - 6

-------
site or an item of property, COs should obtain detailed written projections from the cognizant program
office.  The projections should include a discussion of the current status of decisions relative to future
use and operation of the Superfund site and a reasonable basis upon which to conclude that the
qualifying criteria in exceptions (a) and (b) deviation will eventually be met.

        CORRECTIVE ACTION:

        Notwithstanding the current need to provide property in the situations outlined in the deviation
and this guidance, it is recognized that our need to deviate stems,  at least in part, from the way in which
we contract. While Superfund clean-up activity is unique, it is possible and preferable to make
adjustments to our contracting methods which will satisfy both our mission goals and the FAR. Toward
this end, OAM will have the opportunity to use the 5 years duration of the class deviation to make
improvements in our contracting methods which may make future deviations of this nature unnecessary,
or required in fewer instances.  The Policy Service Center will begin the rulemaking process for a new
Environmental Protection Agency Acquisition Regulation (EPAAR) clause. The clause will permit the
Agency to acquire, from contractors, property which they originally provided, either during or at
completion of the contract, should it become necessary, for any reason, for the Agency to own an item
of property. Consistent with FAR principles that it is generally in the Government's best interest for a
contractor to provide the property necessary for contract performance, this new clause will provide
EPA with the option to acquire property when necessary to carry out our mission.

        During the effective period of the deviation, it is also expected that COs will explore alternate
methods of acquiring property which the Agency needs for its own use, or to eventually pass to third
parties under the provisions of CERCLA. While FAR prohibits the provision of Government property
to contractors for use in performance of a contract, there are no such limitations on the acquisition of
property for Agency use.  The acquisition of remedies, such as water treatment plants, as line item
deliverables under fixed price contracts, is appropriate and permissible, when the Agency requires the
deliverable for its own use.  Likewise, it is permissible to hire contractors to maintain Agency facilities;
the Part 45 prohibition is against providing property for use in performance of a contract. When a
contractor is merely maintaining property, the property is considered to be the object of the contract.
Consideration when drafting statements of work as to how an Agency-owned facility is used by the
contractor could go far in lessening our reliance on FAR deviations.  Further guidance on determining
whether property is utilized by a contractor in performance of a contractor, or is merely the object of
the contract (such as in maintenance contracts), is provided in PPN 96-03.
Attachment
                                              -5-
                                          F  - 7

-------
                                                             ATTACHMENT
                    U.S. ENVIRONMENTAL PROTECTION AGENCY
                               CLASS DEVIATION FROM
                         FAR 45.302-l(a) and (d), and 45.302-3(c)
                   FOR CERTAIN SPECIFIED SUPERFUND PROPERTY
                                       FINDINGS

1.  The Federal Acquisition Regulation (FAR) 45.102 states that contractors are ordinarily required to
furnish all property necessary for contract performance.  FAR 45.302-l(a) requires contractors to
provide the property for use in performing Government contracts unless one of the exceptions to the
general policy applies. The exceptions to the policy are not generally available for use at EPA, and are
not applicable to the circumstances described herein.

2.  The Comprehensive Environmental Response Compensation and Liability Act (CERCLA)
authorizes environmental response actions under removal and remedial authorities. The nature of the
work requires the design, fabrication, and construction of containment and treatment facilities, and
installation of a wide range of property items for me purpose of limiting exposures to hazardous
materials or removing hazardous materials from the air, surface water, ground water, and soil. The type
of facilities required tend to be specially designed and constructed, and are required to remain operating
on site until the clean-up effort is completed. Response actions progress through phases including
assessment and characterization, engineering design, construction or installation, and post construction
operation and maintenance.  Superfund field contracts are for the stated purpose of environmental
cleanup under Superfund removal and remedial authority. The period of performance for site cleanup
through the phases noted above usually surpasses the period of performance under any one site
contract, and several different contractors may be involved in the assessment, design, construction, and
operation and maintenance of the particular Superfund response action during its life span.

3.  There are instances where response actions (e.g., pump and treat facilities constructed to restore
ground or surface water to acceptable levels of contamination) are required under a particular contract
and which also require continued operation that transcends that contract's performance period.  EPA
may, over the course of several years, contract with two or more contractors for essentially the same
effort at the same site, and both contractors will require the same items of property for performance.
Economic factors indicate that costs associated with the tear down and rebuilding of facilities between

                                           -6-
                                         F - 8

-------
contractors is significant for those items of property which are either permanently installed or immobile.
Delays in performance, and unacceptable breaks in service may also result from the tear down and
rebuilding.

4. CERCLA also specifies that environmental clean up is to be a joint Federal and State effort, and
requires partnerships between EPA and State governments to accomplish the cleanup, hi accordance
with the Act, when serving as the lead for a response action, EPA has the responsibility for establishing
a working remedy. States assume responsibility for long-term operation and maintenance once a
response action has been determined to be operational and functional. Local governments also may
assume responsibility for long term operation of response actions on behalf of a State, or in a direct
agreement with EPA.  For source control response actions, (e.g. a landfill cover with leachate and gas
control systems) the state usually assumes operation and maintenance no later than one year after
completion of construction. For response actions involving ground water or surface water restoration,
EPA's responsibility for operation  and maintenance of the response action extends up to 10 years.
EPA relies upon outside contractors to assist in the construction, startup, and operation of the response
action.

5.  EPA must secure a formal agreement from the State, or where appropriate, a local government, to
assume the operation and maintenance of the selected remedy once the response action is operational
and functional, or at a period in time not to exceed ten years from the date of the establishment of the
remedy.  EPA has the responsibility and obligation, under CERCLA, to provide a fully operational
remedy to the successor operator.  Because of this responsibility and obligation, EPA must be able to
control the disposition of the property. It is important that the EPA contractor performing at a site, or
multiple EPA contractors who may have performed at the site over the course of EPA's cleanup effort,
not hold title to any of the property which constitutes part of the remedy when there is an agreement,
pursuant to CERCLA, for continued operation by a successor.  It is in EPA's best interest to hold title
to the property, and thereby retain the rights to control future disposition.

6. Requirements for a response action, including the type of action to be taken, cleanup levels to be
achieved, and the estimated time to complete the action, are generally set forth in Records of Decisions
(RODs) and Action Memos.  Obligations of States, or, where appropriate, local governments,
including cost share and responsibility for long term operation and maintenance are generally set forth in
a State Superfund Contract (SSC)  or other appropriate document. These are public records designed
to inform the public about future plans and responsibilities at Superfund sites. When a response action
requires that a State or local government will  eventually assume operation and maintenance of a
Superfund cleanup operation, it is necessary for EPA to provide and retain title to property currently

                                             -7-
                                         F  - 9

-------
required by Agency contractors performing at the site, so that EPA will be in a position to legally pass
title to the successor.  In some instances it is necessary for EPA, through outside contractors, to begin
construction of a remedy prior to the issuance of a ROD, and/or prior to a formal agreement with a
successor operator.

7. FAR 45.302-l(d) places further restrictions on furnishing property to contractors, where the unit
cost of the property is less than 510,000. Some of the items of property discussed herein are valued at
less than $10,000 per unit The rationale set forth above applies equally, regardless of the estimated
cost.

8. FAR 45.302-3(c) prohibits the application of fee or profit on the cost of facilities when purchased
by a contractor on behalf of the Government  This policy is consistent with FAR profit policy at
15.404-4 when the contractor is merely purchasing facilities as a pass-through to the Government,
experiencing little effort or risk. As set forth in the preceding paragraphs, EPA necessarily acquires
facilities through a contractor. The facilities acquired by the Government under Superfund contracts are
frequently permanent structures acquired on behalf of the Government by a prime contractor through a
managed, construction subcontract. When the facilities fall into this category, it is appropriate, in
accordance with FAR 15.404-4 to include the proposed cost for the constructed facilities in the
structured determination of applicable fee or profit, because the contractor should be rewarded for
assuming the risk of subcontract management, and for capable performance of subcontract
management
                                            -8-

                                            F  -  10

-------
                                    DETERMINATION

       Based on the above findings, and the authority of FAR 1.404,1 grant the following class
deviation to FAR 45.302-1 (a) and (d), and to 45.302-3(c).

1.  This deviation permits EPA contracting officers to provide specified Government property, either
Government-furnished or contractor-acquired, to contractors performing at Superfund cleanup sites:

       (a) when the property is required for a period of time that exceeds a contract of shorter
       duration, and the property will continue to be operated by EPA or a contractor performing on
       EPA's behalf, and the property is either permanently installed or costly to remove and rebuild,
       or;

       (b) when there is an agreement in place which requires that the property will be transferred to a
       successor operator for operation and maintenance. The agreement may be in the form of a
       Record of Decision, Action Memorandum, or State Superfund Contract, or may be an
       independent agreement between EPA and the successor operator, or;

       (c) when there is a reasonable expectation that one or both of the circumstances outlined in (a)
       or (b) above will apply, but a formal plan or agreement is not yet in place to document the
       decision.

2. Utilization of the authority in l(a) requires contracting officers to evaluate the provision of property
from an economic perspective. It is understood that substantial savings will result from Government
ownership of major items of property which are expensive to tear down, remove, and rebuild.
Benefits of Government ownership of portable, mobile, or easily removable items of property are not
readily apparent and such items are specifically excluded from the authority of this class deviation unless
the CO prepares a separate economic analysis to support their inclusion.

3. The authority in l(b) is limited to those items of property which are a part of the remedy and which
are required, by agreement, to be passed to a successor for operation and maintenance. It specifically
excludes all ancillary equipment which, although necessary for contract performance, is not required to
be passed on to a successor operator. It also does not cover the replacement of any property which is
not required to be passed to a successor operator, regardless of whether EPA originally provided such
property.
                                             -9-
                                          F -  11

-------
4. The authority in l(c) above is limited by the restrictions in Determination paragraphs 2 and 3.
Further, it requires that the reasonable expectation of the probable future management of the Superfund
site, and hence the need for EPA to own property, be documented in the contract file.

5. Notwithstanding the requirements of FAR 45.302-l(a) and (d), EPA's mission requires the
provision of Government property to contractors for use in performance of work under a class of
Superfund cleanup contracts.

6. Notwithstanding the prohibition in 45.302-3(c) against die payment of profit or fee on Government
facilities acquired by a contractor, EPA may pay profit or fee on the cost of managed construction
subcontracts which result in the construction of a superfund facility.  This applies only to the constructed
facility, and specifically excludes all ancillary equipment not acquired under a construction subcontract.

7. This deviation is effective for a period of 5 years unless otherwise canceled or superceded.
   /s/ Signed Judy S. Davis                                       10/20/00
Judy S. Davis, Acting Director                              Date
Office of Acquisition Management
                                             F -  12
                                            -10-

-------
          APPENDIX G

  PROCUREMENT POLICY NOTICE
             01-02

     GUIDANCE FOR USE OF
HIGHER-LEVEL CONTRACT QUALITY
 REQUIREMENTS IN ACQUISITIONS
              G-l

-------
G -  2

-------
                         PROCUREMENT POLICY NOTICE
                                     No. 01-02
SUBJECT:   Guidance for Use of Higher-Level Contract Quality Requirements in Acquisitions

FROM:      Judy S. Davis, Acting Director
             Office of Acquisition Management

TO:         OAM Division Directors
             Regional Contracting Officer Supervisors
             Office of General Counsel

EFFECTIVE DATE: March 20, 2001

EXPIRATION DATE: Upon cancellation or until superseded by a.revision to Chapter 2 of the EPA
Contracts Management Manual.

FOR FURTHER INFORMATION CONTACT:  Linda Avellar on (202) 564- 4356 or E-Mail:
Avellar.Linda@epa.gov.

                                     PURPOSE

       This Procurement Policy Notice establishes guidance for program personnel and Contracting
Officers regarding the inclusion of higher-level contract quality requirements in applicable solicitations
and contracts, and supplements the procedures and requirements contained in FAR 46.202-4 and FAR
52.246-11 (Higher-Level Contract Quality Requirement, Feb 1999). It also contains instructions
                                    G  - 3

-------
for the use of the requisite FAR clause (FAR 52.246-11) for higher-level contract quality requirements
(Attachments 1,2, and 3) and provides a variety of "tailored" clauses that can be incorporated into
solicitations and contracts (Attachment 4). The FAR clause at 52.246-11 allows acceptable quality
standards to be "tailored" to meet specific Agency needs.

                                     BACKGROUND

       The FAR was recently amended to address contract quality systems requirements on a
government-wide basis.  The new FAR contract clause at 52.246-11, Higher-Level Contract Quality
Requirement (Feb 1999), as prescribed by FAR 46.311, allows a Federal agency to select a voluntary
consensus standaid as the basis for its quality requirements for contracts and identifies ANSI/ASQC
E4-1994, Specifications and Guidelines for Quality Systems for Environmental Data Collection
and Environmental Technology Programs, as an acceptable standard. The FAR contract clause
also allows tailoring of the standard to more effectively address specific agency needs or purposes and
FAR 46.202-4 contains guidance on when to use higher-level contract quality standards. Based on
these FAR provisions, the Environmental Protection Agency (EPA) has selected ANSI/ASQC E4-
1994 to normally be the basis for its environmental quality requirements, and, as permitted by the FAR
clauses, has tailored this standard to ensure that Agency needs are met.

       Due to these FAR changes, EPAAR 1546.2, Contract Quality Requirements (Mar 1984),
which is a quality regulation that applies only to EPA, was determined to be unnecessary and will be
removed along with the clauses prescribed by this Subpart (1552.246-70, 71, and 72).  A Direct Final
Rule to this effect was published in the Federal Register (65 FR 79781, December 20,2000) and will
become effective on March 20,2001. The rule contains useful background information that contracting
personnel are encouraged to read.  The tailoring language allowed by FAR 52.246-11 and pertinent
requirements from EPAAR 1546.2 will be included in the EPA Directive 1900, Contracts
Management Manual (CMM). This procurement policy notice is being issued pending changes to the
CMM to ensure an orderly transition from EPAAR 1546.2 to the CMM. It contains sample clauses
which include the tailoring language to the ANSI/ASQC E4 standard, as allowed by FAR 52.246-11.
This procurement policy notice is in effect until revisions to the CMM are completed

                                         POLICY

       This procurement policy notice applies to all solicitations and contracts (including simplified
acquisitions other than Purchase Orders, and Task Orders, Work Assignments, and Delivery Orders
when required) that involve environmentally-related measurements (i.e., the collection, generation, or
use of environmental data1, and the design, construction, and operation of environmental technologies).
       'Environmental data are defined as any measurements or information that describe environmental processes, location,
or conditions; ecological or health effects and consequences; or the performance of environmental technology. For EPA,
environmental data include information collected directly from measurements, produced from models, and compiled from other
sources such as data bases or the literature.

                                            -2-

                                         G  - 4

-------
See Attachment 5 for examples of environmentally-related measurements.  This work is usually
included in one of the following cost categories as set forth in the accounting and object classification
structure:

       •      25.32 Programmatic Research and Development Contracts,
       •      25.05 Program Contracts, and
       •      25.63 Programmatic Occupational Health Monitoring.

       Consistent with EPA Order 5360 Al (May 2000), EPA requires that all recipients of funds for
work involving environmentally-related measurements comply with the American National Standard
ANSI/ASQC E4-1994. This will be implemented for EPA acquisitions using the clause contained in
FAR 52.246-11 as tailored.  To demonstrate conformance to this standard, contractors, as required by
the terms of a solicitation and contract, will generally provide two forms of documentation:

        1.     Documentation of the organization quality system (usually called a Quality Management
              Plan), and

       2.     Documentation of the application of quality assurance (Q A) and quality control
              activities to a project-specific effort (usually called a Quality Assurance Project Plan).

The requirements for this documentation will be set forth in the solicitation and contract through FAR
52.246-11, as tailored  Existing quality system documentation, such as that required by the ISO 9000
family of quality standards, may be used in certain instances to fulfill the requirements listed above.

       For contracts consisting of a single project or task, these two documents may be combined into
a single document that describes the organization's quality system and the application of this system to
the work performed under the contract The decision to use a single document can only be made by
the Contracting Officer's Representative with the  permission of the EPA QA Manager who will identify
which elements should be addressed in this combined document

        Some contracts may cover activities of a  program that are to be conducted at multiple locations
or over a long period of time; for example, a large monitoring program that uses the same methodology'
at different locations. In this case, a Programmatic Quality Assurance Project Plan may be used to
describe, in a single document, the general, common activities that are not site-specific or time-specific
but are applied throughout the program. Project-specific information is then added to the approved
Programmatic Quality Assurance Project Plan on a project-specific basis.

                                        PROCESS

       Directions for Contracting Officer's Representatives are contained in Attachments 1
and 2. The Contracting Officer's Representatives  (i.e., Project Officers, Deputy Project Officers,
Regional Project Officers, Zone Project Officers, Delivery Order Project Officers, Work Assignment

                                            -3-

                                            G -  5

-------
Managers, Task Order Managers, Technical Program Managers) will identify the quality requirements
necessary for an acquisition and provide this information to the Contracting Officer. The Contracting
Officer's Representative will use the directions in Attachment 1 to complete the form in Attachment 2
and provide this form to the Contracting Officer.

       Directions for Contracting Officers are contained in Attachments 3 and 4. The
Contracting Officer will incorporate the quality requirements for the acquisition into the solicitation and
contract using the form provided by the Contracting Officer's Representative in Attachment 2, the
directions provided in Attachment 3, and the FAR clause 52246-11 and EPA's tailoring language in
Attachment 4.  The clause is contained in the Integrated Contract Management System (ICMS)
database.

Attachments
                                            -4-
                                          G -  6

-------
                                        Attachment 1
                    Directions for Contracting Officer's Representatives

STEP 1.       After consultation with the QA Manager (or the appropriate QA personnel1), complete
              the QA Review Form and obtain a concurrence signature of the QA Manager as part
              of the acquisition package. If QA requirements are not applicable to the procurement
              (indicated on the QA Review Form), the remaining Steps do not apply.

STEP 2.       With the assistance of the QA Manager, determine what quality standards apply.
              Generally, ANSI/ASQC E4-1994 applies to the majority of EPA's work requiring
              higher-level contract quality requirements; however, standards other than ANSFASQC
              E4-1994 may also apply depending on the nature of the work (for example, ISO 9001,
              ANSI/ASME NQA-1, etc.).  If ANSI/ASQC E4-1994 does not apply, proceed to
              Step 5.

STEP 3.       If ANSI/ASQC E4-1994 applies, identify (with the assistance of the QA Manager)
              whether the contract work will consist of:

              A.      a single project - a contract in which there is one statement of work issued for a
                      project that will occur only once;
              B.      multiple projects with different activities - a contract in which the statement of
                      work contains multiple projects covering many different activities or tasks; for
                      example, a contract to perform monitoring, sampling and analysis, data analysis,
                      training, or other activities; or
              C.      multiple projects with similar activities - a contract in which the statement of
                      work contains multiple projects covering similar activities or tasks; for example,
                      a contract to perform monitoring that uses the same methodology at different
                      locations.

              A.      If the contract consists of a single project, you must require one of the
                      following:

                      1.   Before Award: A Quality Management Plan
                          After Award:   A Quality Assurance Project Plan for the contract
                          (Note: These are the default requirements.)

                      2.   Before Award: QA Manager-specified documentation2
        'Appropriate QA personnel are defined in each EPA organization's Agency-approved Quality Management Plan. For
simplicity, the use of the term QA Manager will refer to both the QA Manager and other approved QA personnel.

        2QA Manager-specified documentation is defined in an EPA organization's Agency approved Quality Management
Plan. This documentation must be consistent with Agency requirements defined in EPA Order 5360 Al (May 2000).
                                              G -  7

-------
          After Award:   A Quality Management Plan and a Quality Assurance
                        Project Plan for the contract

       3.  Before Award: QA Manager-specified documentation2
          After Award:   A Joint Quality Management Plan/Quality Assurance
                        Project Plan for the contract

       4.  Before Award: A Joint Quality Management Plan/Quality Assurance
                        Project Plan for the contract
          After Award:   None

B.     If the contract consists of multiple projects with different activities, you
       must require one of Ihe following:

       1.  Before Award: A Quality Management Plan
          After Award:   A Quality Assurance Project Plan for each applicable
                        project
          (Note: These are the default requirements.)

       2.  Before Award: QA Manager-specified documentation2
          After Award:   A Quality Management Plan and a Quality Assurance
                        Project Plan for each applicable project

C.     If the contract consists of multiple projects with similar activities, you must
       require one of the following:

       1.  Before Award: A Quality Management Plan
          After Award:   A Quality Assurance Project Plan for each applicable
                        project
          (Note: These are the default requirements.)

       2.  Before Award: A Quality Management Plan
          After Award:   A Programmatic Quality Assurance Project Plan for the
                        entire program (contract) and a project-specific
                        supplement to the Programmatic Quality Assurance
                        Project Plan for each applicable project

       3.  Before Award: A Quality Management Plan and a Programmatic Quality
                        Assurance Project Plan for the entire program (contract)
          After Award:   A project-specific supplement to the Programmatic
                        Quality Assurance Project Plan for each applicable
                        project

                             -2-

                             G - 8

-------
                     4.  Before Award:  QA Manager-specified documentation2
                        After Award:   A Quality Management Plan and a Quality Assurance
                                       Project Plan for each applicable project

                     5.  Before Award:  QA Manager-specified documentation2
                        After Award:   A Quality Management Plan, a Programmatic Quality
                                       Assurance Project Plan for the entire program (contract),
                                       and a project-specific supplement to the Programmatic
                                       Quality Assurance Project Plan for each applicable
                                       project

              For each of the three cases (single project, multiple projects with different activities, or
              multiple projects with similar activities), the default requirements are listed as the first
              option (1). These requirements should be used unless the QA Manager agrees to
              different requirements.

STEP 4.       For each type of documentation selected in STEP 3, identify (with the assistance of the
              QA Manager) whether the documentation should be prepared in accordance with the
              standard EPA requirements [i.e., EPA Requirements for Quality Management Plans
              (QA/R-2) andEP.4 Requirements for Quality Assurance Project Plans (QA/R-5)}
              or whether other EPA-approved requirements will be used. The standard EPA
              requirements should be used unless the QA Manager agrees to different requirements.

STEP 5.       If additional standards were  identified in Step 2, identify (with the assistance of the QA
              Manager) what documentation is required to determine conformance to these
              standards.

STEP 6.       Provide the Contracting Officer with a list of the documentation required before and
              after award. Such information may be detailed in Attachment 2. It is recommended
              that you complete Attachment 2 and provide it to the Contracting Officer with the QA
              Review Form from STEP 1.

STEP 7.       After award of the contract, if the work consists of multiple projects (cases B and C in
              STEP 3), complete a QA Review Form and Section 2 of Attachment 2 for each
              project and attach it to the project's statement  of work (e.g., work assignment, delivery
              order, task order).

              If a project requires quality documentation (for example, a project-specific supplement
              to the Programmatic Quality Assurance Project Plan), incorporate the requirement to
              develop this documentation  and to implement the EPA-approved documentation into
              the project's statement of work.  If the project will be based on previously prepared
                                            -3-

                                           G -  9

-------
                and current EPA-approved quality documentation3, incorporate the requirement to
                implement this documentation into the project's statement of work and note this on the
                QA Review Form.
        For policy on approval procedures and requirements for ensuring quality documentation is current, see Sections 5.2.1
and 5.2.2 of EPA Order 5360 Al (May 2000) and your organization's Quality Management Plan.

                                               -4-

                                           G -  10

-------
                                       Attachment 2
                        Contracting Officer's Representatives Form
                        for Defining Contract Quality Requirements

Use this form to provide direction to the Contracting Officer on the quality assurance activities that are
required in the solicitation and contract.
1.
a.     Select all documentation required before award of the contract:

D
D
D
D
Documentation
Quality Management Plan
Joint Quality Management
Plan/Quality Assurance Project
Plan
Programmatic Quality Assurance
Project Plan for the entire
program (contract)
Other Equivalent:

Specifications
EPA Requirements for Oualitv Management Plans
(OAJR-2) [dated 03/20/01]

EPA Requirements for Oualitv Management Plans
(OA/R-2) [dated 03/20/01] and EPA
Requirements for Oualitv Assurance Project Plans
(OA/R-S) [dated 03/20/01]
EPA Requirements for Oualitv Assurance Project
Plans rOA/R-5) [dated 03/20/01]

{Insert specification]

       b.     If the standard specifications do not apply, identify equivalent specifications:
2.
a.
Select all documentation required after award of the contract or upon issuance of the
specific work to be performed under the contract:

n
Documentation
Quality Management Plan
Specifications
EPA Requirements for Oualitv
Management Plans (OA/R-2)
[dated 03/20/01]
Due After
Award of
contract
                                         G -  11

-------
         D
Joint Quality Management
Plan/Quality Assurance
Project Plan
EPA Requirements fnr Quality
Management Plans (QA/R-2)
[dated 03/20/01] and EPA
Requirements for Oualitv Assurance
                                        Project Plans COA/R-5^ [dated
                                        03/20/01]
Award of
contract
             Contract Quality Assurance
             Project Plan
                           EPA Requirements for Quality
                           Assurance Project Plans fOA/R-Sl
                           [dated 03/20/01]
                                   Award of
                                   contract
         D
Programmatic Quality
Assurance Project Plan for
the entire program (contract)
EPA Requirements fnr Quality
Assurance Project Plans (OA/R-5)
[dated 03/20/01]
Award of
contract
             Quality Assurance Project
             Plan for each applicable
             project
                           EPA Requirements for Quality
                           Assurance Project Plans (OA/R-S)
                           [dated 03/20/01]
                                   Issuance of
                                   statement of
                                   work
             Project-specific supplement
             to Programmatic Quality
             Assurance Project Plan
                           EPA Requiremerits for Quality
                           Assurance Project Plans (OA/R-S")
                           [dated 03/20/01]
                                   Issuance of
                                   statement of
                                   work
         D
Other Equivalent
[Insert specification]
[Select one]
D award of
  contract
d issuance of
 statement of
 work
       b.     If the standard specifications do not apply, identify equivalent specifications:
3.     List any additional quality standards besides Specifications and Guidelines for Quality
       Systems for Environmental Data Collection and Environmental Technology Programs
       (ANSUASQC E-4) that apply:

       Title:          	
       Numbering:    	
       Date:          	
       Documentation required to determine conformance:	
                                           -2-

                                          G  - 12

-------
                                       Attachment 3
                             Directions for Contracting Officers

STEP 1:       Review the QA Review Form (see Chapter 2 of the CMM for a sample QA Review
              Form) and the quality assurance requirements (Attachment 2) provided by the
              Contracting Officer's Representative (COR).  Use Table 1 below to verify that the
              information provided by the COR is valid; if the COR has not provided any
              information, proceed to STEP 2.

STEP 2:       If the procurement requires higher-level quality assurance requirements, insert the
              appropriate text from Attachment 4 [which contains FAR 52.246-11, Higher-Level
              Contract Quality Requirement (Feb 1999) and appropriate tailoring language] into
              the simplified acquisition, solicitation, and contract, and select the appropriate
              documentation.  Note:  Attachment 4 must be included in all solicitations and contracts
              that require higher-level quality assurance activities.  Items listed as 'Before Award' in
              Table 1  are incorporated into paragraph A of Attachment 4, and items listed as 'After
              Award' in Table 1 are incorporated into paragraph B of Attachment 4.

              If higher-level quality assurance activities are needed but the COR has not provided
              any information, use Option 1 in Table 1 (Le., select a Quality Management Plan in
              paragraph A of Attachment 4 and a Quality Assurance Project Plan for each applicable
              project in paragraph B  of Attachment 4; then insert both paragraphs into the solicitation
              and contract).

STEP 3:       If standards other than ANSI/ASQC E4-1994 are identified by the COR, insert these
              additional standards (and any tailoring) into the contract clause (using the table in
              Attachment 4 which specifies the higher-level quality standard selected). Also,
              incorporate the following statement addressing the requirements for conforming to these
              additional standards:

              "The following quality  requirements apply to this work:	"
STEP 4:      Incorporate all approved documentation submitted before award into the contract.
              Note: EPA may require that the Contractor revise the quality documentation after
              award of the contract, so verify with the COR that the documentation has been
              approved before incorporating it into the contract.

STEP 5:      After award of the contract, review the QA Review Form and any quality assurance
              requirements and information provided by the COR for each statement of work to be
              performed under the contract Ensure that the statement of work includes all required
              documentation and that this documentation is consistent with the quality requirements of
              the contract.
                                             G  - 13

-------
Table 1. Valid Options for Higher-Level Quality Documentation
Option
1
2
3
4
5
6
7
8
9
Quality Documentation
Before Award:
After Award:
Before Award:
After Award:
Before Award:
After Award:
Before Award:
After Award:
Before Award:
After Award:
Before Award:
After Award:
Before Award:
After Award:
Before Award:
After Award:
Before Award:
After Award:
A Quality Management Plan
A Quality Assurance Project Plan for each applicable
project
This condition is the default condition.
A Quality Management Plan
A Quality Assurance Project Plan for the contract
QA Manager-specified documentation
A Quality Management Plan and a Quality Assurance
Project Plan for the contract
QA Manager-specified documentation
A Joint Quality Management Plan/Quality Assurance
Project Plan for the contract
A Joint Quality Management Plan/Quality Assurance
Project Plan for the contract
None
QA Manager-specified documentation
A Quality Management Plan and a Quality Assurance
Project Plan for each applicable project
A Quality Management Plan
A Programmatic Quality Assurance Project Plan for
the entire program (contract) and a project-specific
supplement to the Programmatic Quality Assurance
Project Plan for each applicable project
A Quality Management Plan and a Programmatic
Quality Assurance Project Plan for the entire program
(contract)
A project-specific supplement to the Programmatic
Quality Assurance Project Plan for each applicable
project
QA Manager-specified documentation
A Quality Management Plan, a Programmatic Quality
Assurance Project Plan for the entire program
(contract), and project-specific supplement to the
Programmatic Quality Assurance Project Plan for each
applicable project
 -2-
G -  14

-------
                                      Attachment 4
                         Contracts Clause and Tailoring Language

Do not incorporate the instructions in brackets [] into the solicitation and contract.

Higher-Level Contract Quality Requirement (FAR 52.246-11) (Feb 1999).

[Contracting Officer (CO) to incorporate the following language into all solicitations and
contracts that require higher-level quality standards. Include any additional quality standards
identified by the Contracting Officer's Representative (COR).]

The Contractor shall comply with the higher-level quality standard selected below.

0

D
D
Title
Specifications and Guidelines for
Quality Systems for Environmental
Data Collection and Environmental
Technology Programs


Numbering
ANSI/ASQC E4



Date
1994



Tailoring
See below.



As authorized by FAR 52.246-11, the higher-level quality standard ANSI/ASQC E4 is tailored as
follows:

       The solicitation and contract require the offerer/contractor to demonstrate conformance to
       ANSI/ASQC E4 by submitting the quality documentation described below.

       hi addition, after award of the contract, the Contractor shall revise, when applicable, quality
       documentation submitted before award to address specific comments provided by EPA and
       submit the revised documentation to the Contracting Officer's Representative.

       After award of the contract, the Contractor shall also implement all quality documentation
       approved by the Government.

A.    [PRE-AWARD TAILORING LANGUAGE: CO, insert the following paragraph into the
       solicitation and contract using information provided by the COR.]

       Pre-award Documentation: The offerer must submit the following quality system
       documentation as a separate and identifiable part of its technical proposal: (CO, select one or
       more)
                                           G  - 15

-------

D
D
D
D
Documentation
Quality Management Plan
Joint Quality Management
Plan/Quality Assurance Project
Plan for the contract
Programmatic Quality Assurance
Project Plan for the entire program
(contract)
Other Equivalent [CO, insert the
QA Manager-specified
documentation]
Specifications
EPA Requirements for Quality Management
Plans (OAJR.-2) [dated 03/20/01]

EPA Requirements for Quality Management
Plans (OA/R-2) [dated 03/20/01] and EPA
Requirements for Quality Assurance Project
Plans fOA/R-5^ [dated 03/20/01]
EPA Requirements for Quality Assurance Project
Plans rOA/R-5^ [dated 03/20/01]

[CO, insert specification]

       This documentation will be prepared in accordance with the specifications identified above, or
       equivalent specifications defined by EPA,	(CO, insert
       specifications). Work involving environmental data generation or use shall not commence until
       the Government has approved this documentation and incorporated it into the contract.

B.     fPOST-A WARD TAILORING LANGUAGE: CO, insert the following three paragraphs
       into the solicitation and contract using information provided by the COR.]

       Post-award Documentation: The Contractor shall submit the following quality system
       documentation to the Contracting Officer's Representative at the time frames identified below:
       (CO, select one or more)

D
D
Documentation
Quality Management Plan
Joint Quality Management
Plan/Quality Assurance
Project Plan for the
contract
Specifications
EPA RwiiiT^ments for Quality
Management Plans (OA/R-2)
[dated 03/20/01]
EPA RequinerrientS for Quality
Management Plans ( QA/R-2)
[dated 03/20/01] and EPA
Requirements for Duality Assurance
Proiect Plans fOA/R-51 [dated
03/20/01]
Due After
Award of
contract
Award of
contract
                                          -2-
                                         G  - 16

-------
 D
Quality Assurance Project
Plan for the contract
EPA Requirements for Quality
Assurance Project Plans (OA/R-5)
[dated 03/20/01]
Award of
contract
 D
Programmatic Quality
Assurance Project Plan for
the entire program
(contract)
EPA Requirements for Quality
Assurance Project Plans (QA/R-5^
[dated 03/20/01]
Award of
contract
      Quality Assurance Project
      Plan for each applicable
      project
                           EPA Reo1uirements for Quality
                           Assurance Project Plans (OA/R-5)
                           [dated 03/20/01]
                                   Issuance of
                                   statement of
                                   work for the
                                   project
 D
Project-specific supplement
to Programmatic Quality
Assurance Project Plan for
each applicable project
EPA Requirements for Quality
Assurance Project Plans COA/R-5)
                                 [dated 03/20/01]
Issuance of
statement of
work for the
project
      Other Equivalent: [CO,
      insert QA Manager-
      specified documentation]
                           [CO, insert specification]
                                   [CO, select
                                   one]
                                   D award of
                                     contract
                                   D issuance of
                                     statement of
                                     work for the
                                     project
This documentation will be prepared in accordance with the specifications identified above or
equivalent specifications defined by EPA,	(CO, insert equivalent
specifications).

The Government will review and return the quality documentation, with comments, and
indicating approval or disapproval. If necessary, the contractor shall revise the documentation
to address all comments and shall submit the revised documentation to the government for
approval.

The Contractor shall not commence work involving environmental data generation or use until
the  Government has approved the quality documentation.

(Note: Statement of work includes statements of work to perform projects under work
assignments, task orders, delivery orders, etc.)
                                     -3-
                                    G -  17

-------
                                        Attachment 5
          Examples of Activities involving Environmentally-Related Measurements

       The following are some examples of activities that involve environmentally-related
measurements that may be subject to higher-level contract quality requirements and the ANSI/ASQC
E4 standard:

       •      Activities that collect data to establish/determine the states/conditions of environmental
              or ecological systems and the health of human populations;

       •      Activities that collect data to establish the ambient conditions in air, water, sediments,
              and soil in terms of physical, chemical, radiological, or biological characteristics;

       •      Activities that collect data to establish/categorize radioactive, hazardous, toxic, and
              mixed wastes in the environment and to establish their relationships with and/or impact
              on human health and ecological systems;

       •      Activities that monitor and quantify the waste and effluent discharges to me environment
              from processes and operations (e.g., energy generation, metallurgical processes,
              chemicals production), during either normal or upset conditions (i.e., operating
              conditions that cause pollutant or contaminant discharges);

       •      Activities that use environmental data to develop environmental technology for waste
              treatment, storage, remediation, and disposal; pollution prevention; and pollution
              control;

       •      Activities that use environmental data in mapping environmental process and conditions,
              and/or human health risk data, etc. (e.g., geological information system);

       •      Activities that generate data from the evaluation of environmental technology used for
              waste treatment, storage, remediation, and disposal; pollution prevention; and pollution
              control;

       •       Activities that generate/collect data to support enforcement and/or compliance
              monitoring efforts;

              Activities that collect/generate data for the evaluation and/or demonstration of
              environmental technology (e.g., treatabiUty and pilot studies);

       •       Activities that investigate and collect data to determine chemical, biological, physical, or
              radioactive constituents in environmental and ecological systems, and their behavior and
              associated interfaces in those systems,  including exposure assessment, transport, and
              rate;

       •       Activities that collect and/or generate data from the development and evaluation of
              methods for use in 1he collection, analysis, and use of environmental data;

                                              G  -  18

-------
Activities that involve the development, evaluation, and use of computers or
mathematical models (and their input data) to characterize environmental processes or
conditions;

Activities that use secondary data (i.e., environmental data that were collected for other
purposes or obtained from other sources, including literature, industry surveys,
compilations from computerized data bases and information systems) for the
development and/or evaluation of computerized or mathematical models of
environmental processes and conditions, and collect/generate data from the process;
and

Activities that collect and/or use environmental data for monitoring/addressing concerns
over the occupational health and safety of personnel in EPA facilities (e.g., indoor air
quality measurements) and in the field (e.g., chemical dosimetry, radiation dosimetry).
                               -2-

                            G  - 19

-------
G-Zo

-------
            APPENDIX H

  CONTRACTS MANAGEMENT MANUAL
            CHAPTER 5

CONTRACTING OFFICER/PROJECT OFFICER
   GUIDE FOR THE MANAGEMENT OF
    GOVERNMENT PROPERTY UNDER
          EPA CONTRACTS
                H- 1

-------
H  -  2

-------
                    CONTRACTS MANAGEMENT MANUAL
       CHAPTER 5 - CONTRACTING OFFICER/PROJECT OFFICER GUIDE
            FOR THE MANAGEMENT OF GOVERNMENT PROPERTY
                          UNDER EPA CONTRACTS

                               Table of Contents

PARAGRAPH                                                      PAGE
TITLES                                                          NUMBERS

      Acronym Guide	     5-0

5.2    Purpose	 5-1

5.3    Statement of Policy	5-1

5.4    Background	 5-1

5.5    EPA Policy	 5-2

5.6    Applicability	 5-4

5.7    EPA Personnel	 5-4

5.8    Non EPA Participants	  5-5

5.9    Contract Property Management Database	 5-5

5.10   Providing Government Property	5-5

5.11   Administration of Government Property	5-10


TITLE                                                      ATTACHMENT

EPA FAR Class Deviation	 A

Government Property Analysis Worksheet	 B

EPA Letter of Delegation for Partial Contract Administration	 C

Required Data Elements	D

EPA Report of Government-Owned/Contractor-Held Property	 E
                                    H - 3

-------
Acronyms
CAP
CO
CINN
CP
CPC
DCMC
DOE
D&F
EPA
EPAAR
FAR
FMSD
GFP
GOCO
GPAW
GSA
HPOD
IAG
LDD
PA
PAR
PLCO
PMO
PO
RCRA
RTF
SRRPOD

Contractor-Acquired Property
Contracting Officer
Cincinnati (OAM)
Contact Point
Contract Property Coordinator
Defense Contract Management Command
Department of Energy
Determination and Findings
Environmental Protection Agency
Environmental Protection Agency Acquisition Regulation
Federal Acquisition Regulation
Facilities Management and Services Division (OA)
Government-Furnished Property
Government-Owned, Contractor-Operated
Government Property Analysis Worksheet
General Services Administration
Headquarters Procurement Operations Division
Interagency Agreement
Lost Damaged or Destroyed
Property Administrator
Property Administration Requirements
Plant Clearance Officer
Property Management Officer
Project Officer
Resource Conservation and Recovery Act
Research Triangle Park (OAM)
Superfund/RCRA Regional Procurement Operations Division

  H - 4

-------
           CONTRACTING OFFICER/PROJECT OFFICER GUIDE
        FOR THE MANAGEMENT OF GOVERNMENT PROPERTY
                          UNDER EPA CONTRACTS

5.2   PURPOSE

The purpose of this document is to provide guidance to EPA contracting officers (CO) and
project officers (PO) in their responsibilities relative to the provision and management of
Government property.

5.3   STATEMENT OF POLICY

In accordance with the Federal Acquisition Regulation (FAR) 45.302-1, contractors shall
furnish all facilities required for performing Government contracts.

FAR 45.302-l(a), sets forth the general policy that contractors should provide all necessary
facilities for performing Government contracts. The term "facilities," as defined by the FAR,
is very broad and, in addition to real property, means property used  for production,
maintenance, research and development, or testing, and  specifically includes such items as
personal computers, office equipment, lawn mowers, automobiles, fork lifts, furniture, and
video recorders.

In accordance with FAR 45.303, EPA also  discourages the provision of material to contractors
for performance under agency contracts.

5.4   BACKGROUND

On May 1, 1996, the Office of Acquisition Management (OAM ) issued Procurement Policy
Notice (PPN) 96-03 which set forth a FAR  compliant agency policy on Government-furnished
and contractor-acquired property. The policy represented a change in what had been standard
practice at EPA to routinely provide Government property to contractors.

Several other changes have impacted contract property management, including the organizational
shift of cognizance for Government property in the possession of contractors from the Office of
Administration, Facilities Management and Services Division (FMSD), to OAM.  Further, in
August 1993, EPA entered into an interagency agreement (LAG) with the  Defense Logistics
Agency, Defense Contract Management Command (DCMC), for the administration of
Government property in the possession of EPA contractors.  The IAG permits COs to delegate
individual contracts to DCMC for property  administration and plant clearance. (Plant clearance is
DCMC's term for disposal.) While COs remain the overall responsible party for property matters
under their contracts, reliance  should be placed on the DCMC property administrators (PA) and
                                        5-1

                                       H - 5

-------
plant clearance officers (PLCO) in property administration and disposition. DCMC can neither
issue modifications to, nor change any terms of, EPA contracts.

5.5    EPA POLICY

In accordance with FAR 45.302-1, it is EPA's policy that the contractor provide all facilities
required for performing Government contracts. FAR 45.302-1 and EPA's class deviation, which
is included as Attachment A hereto, permit the furnishing of property in certain limited situations.
Agency officials should always bear in mind that while the FAR and the class deviation do permit
facilities to be provided in limited circumstances, they do not require the Agency to provide
facilities in those cases.  The CD's decision to use the FAR exceptions or the FAR class deviation
should be based on sound business judgement.

Therefore, EPA will rarely provide facilities. Facilities may be provided when the criteria at FAR
45.302-1 are met, or the circumstances are covered by EPA's class deviation to the FAR.  For any
instance not covered by the FAR exceptions or the EPA class deviation, the CO may seek an
individual deviation in accordance with FAR Subpart 1.4.  Individual deviations will be granted
only when strong supporting justification is presented.

The FAR 45.302-1 (a) exceptions are summarized below. Generally, these are not applicable to
EPA's requirements:

       • for use in a Government-owned, contractor-operated (GOCO) plant operated on a cost-
       plus-fee basis;

       • for support of industrial preparedness programs;

       • as components for special test equipment or special tooling, acquired or fabricated at
       Government expense;

       • when a prospective contractor states in writing that the company is unable to obtain the
       property needed to perform the contract, and the agency head or designee signs a
       Determination & Findings (D&F) statement that stipulates that the contract cannot be
       fulfilled by any other practical means or that it is in the public interest to provide the
       equipment; or

       • as otherwise authorized by law or regulation.

Should one of the above exceptions apply, the FAR further prohibits the Government from
authorizing contractor acquisition of facilities with a cost of less than $10,000, unless the
contractor:

       • is performing on a Government establishment or center,

                                          5-2
                                         H  -  6

-------
       • is operating a GOCO plant on a cost-plus-fee basis,

       • is a nonprofit institution of higher education or nonprofit organization that conducts
       scientific research,

       • is performing a contract that specifies that the contractor may acquire or fabricate special
       test equipment or special tooling and related components after obtaining CO approval, or

       • cannot obtain the equipment from other than Government sources.

In addition to the FAR exceptions, the EPA FAR class deviation, dated May 31, 1996, permits
the Agency to continue to provide existing Government property and to provide Government
property at specific EPA laboratory sites for use in the performance of technical or scientific
contracts.  The deviation also permits the provision of property in certain emergency cases.
Please refer to the EPA class deviation and supporting documentation for details.

While motor vehicles are considered facilities, there are additional regulatory and statutory
restrictions on their procurement, and their provision to contractors, that warrant special
consideration.  First, as a general matter, Federal agencies may only acquire or lease motor
vehicles through the General Services Administration (GSA).  Second, unless provided with
specific statutory authority, Federal agencies are statutorily barred from purchasing or leasing
passenger motor vehicles.  Congress has provided EPA with authority only to lease, but not
purchase, passenger motor vehicles. Accordingly, EPA may not purchase passenger motor
vehicles for Agency  or contractor use.

       Before requesting GSA to acquire non-passenger vehicles for EPA, a CO must
       satisfy  the requirements at FAR 45.302-1  outlined above, as well as the additional
       requirements of FAR 45.304.  To satisfy those additional requirements, a CO must
       determine that:

              •       the number of required vehicles is predictable and expected to remain
                     constant,

              •       the contract will bear the entire cost of the vehicle program,

              •      the vehicles will not be used on any contract other than that for which the
                    vehicles were provided,
                    prospective contractors would not be expected to have an existing and
                    continuing capability for providing the vehicles from their own resources,
                    and
                                           5-3

                                         H - 7

-------
             •      substantial savings are expected.

       If a CO has any questions concerning the provision of motor vehicles under an
       EPA contract, please consult with the Office of General Counsel (OGC).

5.6    APPLICABILITY

This policy addresses the limited instances in which EPA provides Government property to
contractors.  It addresses the roles of the CO, PO, PA and PLCO in the areas of property
provision, property administration, and property disposition.

5.7  EPA PERSONNEL

       a.  Contract Property Coordinator: A contract property coordinator (CPC) is an industrial
property management specialist assigned to OAM's Policy, Training and Oversight Division
(PTOD), Cost and Rate Negotiation Service Center (CRNSC), to provide technical expertise and
assistance to COs and POs relative to contract property management under EPA contracts. Part
of the CPC's responsibility is to be aware of changing Government and EPA property
management policies, procedures and regulations, and to update EPA policies and procedures as
necessary for compliance. The CPC is also available to answer technical questions when required.
This includes questions from contractors, DCMC, COs and POs or any other entity when the
CO/PO believes that the CPC's technical expertise is required.  While the CPC is a focal point for
technical expertise on property management, the CPC has no signatory authority on EPA
contracts.

       b.  Contract Property Contact Point: A contract property contact point (CP) has been
assigned in Headquarters Procurement Operations Division (HPOD), Superfund/RCRA Regional
Procurement Operations Division (SRRPOD), Research Triangle Park (RTP) and Cincinnati
(CINN). In the regions, the regional contracting officer supervisors perform the function.  The
CP serves as a liaison between contracting personnel and the CPCs, and is responsible for
gathering and disbursing property related information at the divisional/regional level.

       c.  Property Management Officer: Property Management Officer (PMO) refers to either
Headquarters personnel assigned to FMSD, or to personnel in RTP, CINN, and the regions who
are responsible for management of EPA owned property that is not provided to a contractor. The
PMO's participation  in the management of contract property is generally limited to
1) verification that property to be provided to a contractor is not available from in-house
inventory, and 2) receipt of contractor property that is no longer needed for performance under a
contract, and is returned to the agency.

5.8    NON-EPA PARTICIPANTS
                                         5-4

                                        H  - 8

-------
       a.  Property Administrator: The PA is a DCMC employee delegated responsibility and
authority to perform property administration functions on behalf of the CO. The CO functions as
the PA when property administration is not delegated to DCMC.  Section 5.11 details the PA's
role and responsibility.

       b.  Plant Clearance Officer. The PLCO is a DCMC employee delegated responsibility to
dispose of EPA property on behalf of the CO. A PLCO is a warranted individual with authority
outside of the CO's delegation to obligate the Government in property disposal matters. Section
5.1 l.d details the role and responsibility of the PLCO.

5.9    CONTRACT PROPERTY MANAGEMENT DATABASE

The EPA contract property management database is an automated system designed to maintain
pertinent data on Agency contracts which provide property to contractors. The database contains
information on the contractor, the administrative CO, the PA,  and the property accountable to
that contract.  The CO is responsible for maintaining accurate  records in the property database.
Due to limited access, COs in various locations maintain their records in different manners.
Regional COs provide hard copies of contractors' annual reports to the CPCs for entry into the
database. COs at RTP and CINN make changes to their local databases, and provide electronic
copies of their databases to the CPCs who merge the data.  COs in headquarters divisions, with
access to the local server, make updates directly to the database. The  database serves as a
valuable management tool and as a mechanism to capture data on contractor-held property
required for financial reporting.

The contract property management database should be updated whenever there is activity on a
contract which affects property management, such as award of a contract which provides
property, receipt of an annual property report, delegation of a  contract to DCMC, change in CO
or PA, etc. While the CO is responsible for maintaining the database for then- contracts, some
divisions/regions have elected to have one individual perform all data input.  Check with your CP
to find out the procedures in your particular area.  The CPs and CPCs are also available to
provide database instruction, if necessary.

5.10   PROVIDING GOVERNMENT PROPERTY - Government-furnished property
       (GFP) and contractor-acquired property (CAP)

       a.  Request For Government Property. Generally, the process of providing
Government property will be prompted by a request from the  contractor. The contractor is
required, by contractual terms, to request property in accordance with the EPA Property
Administration Requirements (PAR). The PAR has been a component of various EP clauses in
the past, and is currently brought into contracts via EP  52.245-100. In accordance with the PAR,
the contractor shall include a statement that the item(s) is required for contract performance and
provide justification that the request:
                                          5-5
                                         H  -  9

-------
             (1) meets one of the exceptions outlined in FAR 45.302-l(a)(l-5), or

             (2) qualifies under the terms of EPA's class deviation, or

             (3) provides the basis for an individual FAR deviation.

Upon receipt of a request for property, the CO will prepare a Government Property Analysis
Worksheet (GPAW) to aid in determining whether or not the Government should provide the
property. (The GPAW form is provided at Attachment B.)

      b.  Determination to Provide Government Property

             (1) Contracting Officer Review. The CO shall perform an initial cursory review of
             the contractor's request for property. The review shall include verification that the
             request meets at least one of the following exceptions, and that the request
             includes enough supporting information to permit commencement of a review.

                    (a) the exceptions of FAR 45.302-1.

                    (b) the exceptions of EPA's FAR class deviation.

                    (c) the circumstances for an individual deviation.

                    (d) for material, the exceptions at FAR 45.303-1.

             If, after completing the above analysis, the CO believes that the request deserves
             further consideration, the CO will forward the contractor's request and the GPAW
             to the PO.  The CO may reject a request that is incomplete, or may decide to
             proceed with a review pending receipt of additional information from the
             contractor. No requests for facilities should be forwarded to the PO unless the CO
             has determined that providing the property is permissible under FAR 45.302-1 (a)
             and (d), FAR 45.303-1, EPA's class deviation, or that approval of an individual
             FAR deviation is likely.

             (2) Project Officer Review. The PO is responsible for verifying the technical
             requirement for the property and, in the case of proposed CAP, for obtaining the
             PMO certification that the requested items or suitable like items are not available
             from EPA excess.  The PO shall specifically ensure that the contractor's request
             does not exceed the minimum  requirements for performance under the contract,
             and that the quantity requested is reasonable.  If the PO is aware of existing
             property which is available to be provided to the contractor, that information
             should also be provided to the  CO. The PO shall promptly return the GPAW to
             the CO.
                                         5-6
                                        H - 10

-------
             (3) Property Management Officer Review. In the case of proposed CAP, the
             PMO shall verify that there is no like item(s) in EPA's excess system which may be
             utilized.

NOTE: If a request to provide property is initiated by the program office in lieu of the
contractor, the PO is responsible for providing the CO with all applicable information
required on the GPAW form. Upon receipt of a request from the PO, the CO shall perform
the same analysis as required of a contractor request, except that the original PO request
shall be considered PO approval.  That is, the PO's signature does not have to appear in
block B of the GPAW form when the PO initiates a request for Government property.
Requests for CAP continue to require the PO to obtain PMO certification.

             (4) Contracting Officer Approval. Upon receipt of the PO's endorsement and the
             PMO's certification, the CO must make a determination whether Government
             property is authorized.  At this time, the CO must undertake a more thorough
             examination of the contractor's request and the information provided by the PO
             and PMO.  The level of analysis required will be dependent upon the circumstances
             of the request, and determined by the CO on a case-by-case basis. Some decisions
             may be readily apparent on the basis of the GPAW form itself.  Others may require
             varying degrees of cost analysis, contractor-lease vs.  Government-purchase
             analysis, supporting arguments, etc. COs should ensure that their decision-making
             rationale is fully supported by attachments to the GPAW form.

             After completing the analysis, the CO may.

                    (a)  Provide written direction to the contractor, with a copy to the
                    cognizant PMO, authorizing the use of existing Government property.

                    (b)  Approve in writing, the contractor's request allowing for acquisition of
                    property. If the CO authorizes acquisition of property, the contractor shall
                    be informed that such authorization does not necessarily constitute
                    acceptance of the cost of the property. Contractors are responsible for
                    following standard procurement requirements in the procurement of
                    property and for securing fair and reasonable prices. The costs for
                    property are subject to final audit.

                    (c)  Reject the contractor's or program office's request, in writing, giving
                    the  reasons for the rejection.

             (5) Additional File Documentation.  If the acquisition of new property or
             property acquired from excess is a result of meeting the exception at FAR 45.302-
             l(a)(4), the CO must prepare a D&F which must be approved by the Chief of the
             Contracting Office, as defined at EPAAR  1502.100.
                                          5-7

                                         H -  11

-------
             If the acquisition of new property or property acquired from excess is a result of
             meeting the EPA class deviation dated May 31, 1996, the CO must document the
             file accordingly.

             If the acquisition of new property or property acquired from excess requires an
             individual FAR deviation, the request must be prepared by the CO and approved
             by the Head of the Contracting Activity, as defined at EPAAR 1502.100.

             If this is an initial approval of Government property on a specific contract, the CO
             shall complete a "Letter of Delegation for Partial Contract Administration"
             (Attachment C) (hereinafter referred to as the delegation letter) for this contract
             and forward it to DCMC in accordance with the Delegation of Property
             Administration section, 5.1 La, of this guide.

NOTE: The CO may reject the request even if the  request meets the exceptions of FAR
and/or the EPA class deviation. The CO may determine that it would not be in the best
interest of the Government to provide the property, despite the fact that such an action
may be permissible.

             (6) Other considerations. Absent compelling reasons for EPA to provide
             property, regardless of the availability of a FAR deviation or a FAR exception,
             contractors should be required to provide the property necessary for contract
             performance. In considering whether to provide Government property to
             contractors, COs must always consider  the alternatives of the  contractor
             purchasing or leasing the property. If a decision is made not to provide a
             contractor with Government property, the CO must still  evaluate whether the
             contractor's choice of lease vs. purchase is proper. Please note that this is a
             different consideration than comparing a Government purchase against a
             contractor lease.  The latter is performed to help in arriving at a decision whether
             or not to provide Government property. A contractor lease vs. a contractor
             purchase should be considered after a decision has been  made NOT to provide
             Government property, in order to ensure that the method of property acquisition
             results in a reasonable cost to our contract. Technically, this is not a property
             issue as the Government does not take title to property which the contractor buys
             or leases.  However, it is appropriate that this section include a brief discussion of
             contractor lease vs. contractor purchase decisions to ensure that the policy of
             requiring contractors to provide the property necessary to perform Government
             contracts is not interpreted to mean that the Government will pay unreasonable
             costs for the contractor to provide the property.

             If a contractor leases property for use under an EPA contract, it is not
             Government property. EPA does not have title to such property, even if we
             reimburse the contractor directly for the lease charges. Therefore, contractor
                                          5-8
                                         H  - 12

-------
leased property is not addressed in the agency property policy, and it does not fall
under the regulation of FAR Part 45. However, that does not mean that
contractors may automatically lease property, and be reimbursed under a contract.
A lease vs. purchase analysis must be performed by the contractor and the decision
to lease must be a sound business decision and must result in a reasonable cost.  If
the contractor determines that leasing a piece of equipment is the best method of
acquisition, an analysis of various leasing arrangements is appropriate. A lease
must be the reasonable method to acquire the property in order for the lease
charges to be eligible for reimbursement under the contract, and the particular
lease chosen must be the best from among the various options.  The fact that EPA
does not provide the contractor with property does not mean that the contractor
may choose to lease the property and be assured of reimbursement under the
contract. Only reasonable costs are reimbursed under Government cost-type
contracts, and depending upon the circumstances, a lease or a purchase may result
in an unreasonable cost.

The decision to lease or purchase must be the result of a thorough analysis as to
which method yields the better value. Many factors will affect the decision,
particularly the length of time the property is needed, and the useful life of the
equipment. Contractors are required to perform this analysis and make then-
decisions accordingly. When requested by the CO, contractors are also required to
submit cost information to support proposals for lease or purchase of property.
This may be at the time of initial proposal submission  or any time during contract
performance  when a property requirement arises.  The CO, with assistance from a
cost analyst if necessary, shall make a determination whether a lease or purchase is
in the best interest of the Government, dependent upon the individual
circumstances of the case.

As a general  rule, COs and POs should be able to rely upon the contractor's
accounting and purchasing systems to ensure that the contract is being properly
charged. Nonetheless, COs and POs have a continuing responsibility, beyond the
decision whether or not  to provide Government property, to ensure that
contractors provide then" property in a manner that results in reasonable contract
costs.

It is very difficult to make generalizations about what circumstances would qualify
leasing or purchase costs as reasonable, but analysis should always include
consideration of the length of time the property will be required, useful life of the
equipment (as opposed to length of contract), the purchase price, and the lease
charge. Additional guidance on cost evaluation may be found in the Contract
Pricing Reference Guides, which are available on the internet at
www.gsa.gov.staff/v/volumes.htm. Additionally, OAM has issued separate
guidance on evaluation of lease vs. purchase decisions and equipment usage rates.


                              5-9
                            H -  13

-------
       c.  Transfer of Government Property.  In order to provide existing facilities to
another EPA contract, regardless of whether the contract is new or follow-on, the CO and PO
requirements for providing Government property, as stated above, must be completed.
Government property shall only be provided to a contractor where a bona fide requirement exists
on the contract on which it will be used.

When the contractor receives GFP, the contractor shall receive, from the transferor, all of the
minimum data elements (Attachment D) required to establish and maintain the required records.
Normally, this information is provided on the Property Receipt and Transfer Document (EPA
1700-7) or equivalent, hi other cases, this information may be included in the basic contract, or
modifications thereto, which authorize the GFP. If this information has not been obtained by the
time of receipt of the property, in accordance with the EPA PAR, the contractor  must request it
from the CO. The CO will attempt to obtain the data from the previous property holder, or, if
data does not exist, will assist the current property holder in estimating the elements.  Upon return
of the property to EPA, the same data must be provided to the CO.

5.11    ADMINISTRATION OF GOVERNMENT PROPERTY

       a.  Delegation of Property Administration.  Most cost-type contracts awarded by
EPA should be delegated to DCMC for property administration. Fixed-price contracts should
only be delegated to DCMC for property administration where EPA has or will furnish property
to the contractor. The appropriate DCMC Office, to which delegation should be assigned,  is the
DCMC Office which covers the area in which the contractor address, listed on the face of the
contract, is located.  The CO shall forward the "Letter of Delegation for Partial Contract
Administration" and one copy of the entire contract to DCMC. The CO must also provide  the PA
wilh copies of any modifications issued during the life of the contract which may impact property
or the period of performance. The CO must ensure that the EPA contract property database is
updated to reflect the information required for the contract. One copy of the delegation letter
shall be filed in the official contract file. DCMC will respond in writing to the CO, accepting the
delegation and advising which PA has been assigned the contract.

Some of the functions that DCMC will perform on behalf of EPA include those listed below.
When the CO elects to retain property administration, the CO is responsible for performing these
functions and ensuring that the contractor performs those functions required by FAR. (All
references to days in this section, 5.11, are calendar days.)

             (1) The PA will perform a property system analysis which determines the
             satisfactory or unsatisfactory condition of the contractor's property management
             system. As part of the system analysis performed by DCMC, the PA will examine
             15 areas. The areas examined (if applicable) are property management,
             acquisition, receiving, identification, records, movement, storage, physical
                                         5-10
                                        H  - 14

-------
inventories, reports, consumption, utilization, maintenance, subcontractor control,
disposition, and contract closeout.

(2) The PA will perform an investigation into reports from the contractor of lost,
damaged or destroyed (LDD) Government property.

       a.  If, in the PA's judgment, insufficient justification exists for holding the
       contractor liable, the PA will relieve the contractor of liability for LDD in
       accordance with the appropriate FAR clause.

       a.  If the PA believes that there is justification for liability, the PA will
       recommend to the CO that the contractor be held liable and provide
       rationale.

(3) The PA will review and approve, or withhold approval of a contractor's
Government property management procedures.  The PA will also require changes
to the contractor's procedures when required by law, regulation, or changes in
work statements.

(4) The PA will request the CO to withdraw approval of a contractor's property
management system if the system is found unsatisfactory, and the contractor fails
to correct the system in a timely manner (usually 90 days). The DCMC process
provides for the PA to give the contractor 10 days to forward a written corrective
action plan to the PA. All corrections are usually required to be completed within
60 days from the date of the PA's exit briefing.  If the contractor has not made
corrective action, or at least shown adequate progress, the PA will notify the CO,
who shall notify the contractor that they have 30 days to effect correction or face
possible withdrawal of approval of their Government property management
system. It is important to impress upon the contractor that withdrawal of their
system can have serious consequences.  A contractor may be held liable for any
and all losses that occur while under a property management system where
approval has been withdrawn.  A withdrawn approval of a property management
system should be considered in a pre-award survey or during past performance
evaluation, and may have a negative effect on other possible awards to a
contractor.

(5) The PLCO will receive inventory schedules reporting excess from the
contractor. The PLCO will check the schedules for completeness, and either
accept them or require that the contractor make corrections. Once accepted, the
PLCO will assign a plant clearance case number and provide the number to the
contractor. The PLCO uses this number to track the case throughout  the disposal
process.  Any inquiry concerning this plant clearance case must reference this
number.  Once accepted, the PLCO will forward the schedule to the CO for a 20


                             5-11
                            H  -  15

-------
             day Agency screening. At the end of the 20 days, if the PLCO has not heard from
             the CO that EPA wants to retain the property, the PLCO will automatically
             continue with the screening and disposition process. It is imperative that the CO
             respond to the PLCO in a timely manner.  Upon completion of the plant clearance
             process, the PLCO will forward the completed case file to the CO for inclusion in
             the contract file.

NOTE: COs and POs should report untimely or unsatisfactory performance by DCMC to the
CPC. The CPC will use this information in the management and administration of the Interagency
Agreement with DCMC. Poor performance may be cause for withholding payment.

       b. Selected Administration Requirements.  The following lists significant
administrative requirements set forth in FAR Part 45, some of which are supplemented by EPA.

             (1) The contractor-maintained official Government property record must contain
             the appropriate required data elements (Attachment D) for all Government
             property regardless of cost.

             (2) The contractor must identify Superfund property both on the item and in the
             official Government property records.

             (3) The contractor must conduct a complete physical inventory of EPA property
             at least once per year. Reconciliation of that inventory must be completed within
             30 calendar days of inventory completion. The contractor will report the results of
             that inventory (a detailed inventory listing is not required) to the PA upon
             completion.

             (4) The contractor must investigate and report to the PA, all instances of LDD  of
             Government property as soon as the facts become known. All pertinent
             documentation should be included with the report.

             (5) The contractor must comply with the General Services Administration (GSA)
             and Department of Energy (DOE) record keeping and reporting requirements for
             motor vehicles.  A statement of these requirements will be provided by the
             Headquarters, FMSD, concurrent with receipt of each vehicle.

             (6) The contractor will notify the PA, in writing, when all work has been
             completed under the contract and all Government property accountable to the
             contract has been disposed. The PA will forward this closure statement, as well as
             the working file that the PA has maintained during administration, to the CO.

      c. Reports of Government Property. In accordance with FAR 45.505-14, EPA
requires an annual summary report, by contract, of Government property in the contractor's


                                        5-12
                                        H  -  16

-------
possession as of September 30 each year.  The contractor may utilize EPA's Report of
Government-Owned/Contractor-Held Property format (Attachment E) or an equivalent.

This report is to be submitted no later than October 31 of each year.  Contractors are required to
provide the original to the CO, and one copy to the PA. The copy provided to the PA will be
forwarded to the CO, for inclusion in the contract file, after the PA verifies the information, and
indicates the status of the contractor's property management system.  The original will be used by
the CO to update the EPA contract property management database. The database update must be
completed by November 15 of each year to meet Agency reporting requirements.

Contractors are also obligated to provide detailed reports on an as-needed basis, as requested by
the CO. COs may request any special purpose property reports necessary for routine
administration or for the resolution of specific problems that arise during contract performance.

GSA and DOE have special reporting requirements on motor vehicles which EPA provides to
contractors. The contractor must comply with the reporting requirements which are supplied by
FMSD with all motor vehicles provided.

       d. Property Disposal. The following procedures outline the responsibilities of the
contractor, the CO and the PO in regard to the identification and subsequent disposition of
Government property accountable to an EPA contract. These procedures also explain the PMO's
role in the reutilization process.  The disposition procedures for property purchased with funds
from a Superfund account differ slightly from the procedures for other property in that the
Superfund account must be reimbursed for the fair market value of any Superfund property excess
to Superfund requirements.

The disposition process begins with the contractor identifying Government property that is excess
to its contract requirements.  Effective contractor property control systems provide for disclosing
excesses as they occur. Government property must be promptly reported by the contractor for
disposition in accordance with FAR Subpart 45.6, other contractual requirements, or direction
from the CO.  Government property with minimal activity over a specified period of time should
be reviewed and its continued need justified. Once inactive Government property has been
determined to be excess to the contract to which it is accountable, it should be screened by the
contractor against its other EPA  contracts to determine if the excess property can fill a justifiable
requirement on another EPA contract.  The contractor must continually review property that has
been reported as excess against new requirements for possible reutilization up to the point that
final disposition takes place. Government property will be transferred to another contract only
when the receiving contract authorizes such a transfer, either originally or through contract
modification,  and a contractual requirement has been established.  The CO shall complete a
GPAW to indicate that authorization exists for the contract to receive transferred property.

       1.  The contractor shall screen the excess property against the requirements of its other
       EPA contracts to determine if there is a need under another EPA contract. At the
       completion of the screening, the contractor shall:
                                          5-13

                                         H -  17

-------
              (a)  Report the excess Government property in accordance with FAR Subpart
              45.6, on inventory schedules to the PLCO with a copy to the CO.

              (b)  Dispose of the excess Government property as directed by the CO or the
              PLCO. The CO, in writing, may direct the contractor to treat excess property in
              any of the three options identified below.  The PLCO is responsible for all other
              disposition actions of excess Government property either by transfer within the
              Government, donation, sale, or abandonment.

                     1.  Retain the excess Government property under the current contract for
                     possible future requirements. The contractor should retain, as part of his
                     support documentation, the CO's written decision as justification for
                     retention of the excess Government property.

                     2.  Transfer accountability to another Government contract.  (The
                     contractor must receive written authorization from both the disposing
                     contract CO and the receiving contract CO.)

                     3.  Ship the Government property to another location. The costs
                     associated with shipment shall normally be paid by the receiver of the
                     property.  When the property is being shipped solely for disposal purposes,
                     the accountable contract shall bear the shipping cost.

              (c)  Update the official property record, in accordance with the contractor's
              written procedures for the control of Government property, to show that the
              property record for the item(s) dispositioned has been properly closed.

 When the contractor receives direction to dispose of excess Government property by shipping
 such property to an outside location, the contractor is responsible for providing the necessary data
 elements for each item.  The contractor must also obtain a signed receipt for delivery of the
 excess property at its destination. If the property is being returned to EPA inventory, the
 contractor must provide the CO with a copy of the EPA receipt.
Superfund property may not be transferred without reimbursement for its fair market value (to be
provided by the contractor in accordance with the PAR) unless it is to be used, wholly or in part,
for Superfund purposes.  The contractor is responsible for clearly indicating on the report of
excess to the PLCO that the Government property is Superfund property and that reimbursement
is required.

EPA has a 30-day screening period for excess Government properly once it has been reported to
plant clearance as excess. This period is set by GSA to ensure that Agency decisions are made

                                          5-14

                                          H - 18

-------
promptly and that excess property is made available to other Agencies and organizations in a
timely manner. This 30 day period is broken down into the following segments. The CO has six
(6) days (day 1-6) to review the inventory schedule and forward it to the PO.  The PO has nine
(9) days (day 7-16) to review the inventory schedule and request that the CO direct the contractor
to retain the Government property on the current contract, redirect or transfer the Government
property to another contract or contractor (with receiving CO authorization) or forward the
inventory schedule, highlighting any Government property for which a requirement no longer
exists, to the cognizant PMO.  The cognizant PMO has fourteen (14) days (day 17-30) to screen
other areas of EPA and respond back to the CO with transfer information. Inasmuch as the
contractor is required to provide the CO with a copy of the inventory schedules concurrent with
submission to the PLCO, the CO may effectively increase the 30 day agency screening period by
initiating the process upon receipt of the initial copy.  Officially the process does not begin until
the PLCO has accepted the inventory schedules. The detailed duties of the CO and the PO are
outlined below.

NOTE: Any transfer of Government property to another contract or contractor constitutes
providing equipment to the receiving contract or contractor. Therefore all reutilizations
must meet the requirements for providing Government property to contractors, i.e.,
GPAW, class deviation, prior to transfer of the property.

              2. The CO shall:

                    (a) Review, within six days (day 1-6) of receipt, the inventory schedules
                    received from the PLCO and make the following written request to the PO.

                    (b) Request the PO to advise, in writing, within nine days (day 7-16),
                    whether there is a current or upcoming requirement to justify retention of
                    the Government property on the current EPA contract or any other EPA
                    contract with the same contractor.  If a requirement exists, the CO shall:

                           (1) Direct the  contractor, in writing, to retain the Government
                           property in place and to request withdrawal of those items retained
                           from the inventory schedules submitted to the PLCO, or

                           (2) In coordination with the receiving CO, direct the contractor, in
                           writing, to transfer the Government property to another EPA
                           contract with the same contractor and to request withdrawal of
                           those items transferred from the inventory schedules submitted to
                           the PLCO.

                    (c) Request the project office to respond in writing, within nine days
                    (day 7-16), if there is another valid requirement for the Government
                    property on another EPA contract  within the sponsoring program office.  If
                    a requirement exists the CO shall,  in coordination with the receiving CO,
                    direct the contractor, in writing, to transfer the Government property to

                                          5-15

                                         H  -  19

-------
                    another EPA contract within the same program office, and to request
                    withdrawal of those items transferred from the inventory schedules
                    submitted to the PLCO.

                    (d) When the nine day screening period for the program office has expired,
                    regardless of whether a response has been received from the PO, the CO
                    will forward the report to the cognizant PMO for Agency-wide screening.
                    The PMO has 14 days (day 17-30) to notify the CO in writing if there is a
                    valid requirement elsewhere in EPA. If a requirement exists, the CO will
                    direct the contractor, in writing, to transfer the Government property either
                    to another EPA contractor or to the PMO for Agency use, and to request
                    withdrawal of the items from the inventory schedules submitted to the
                    PLCO.

If no requirement exists, no further action is required by the CO at this time. The PLCO will
provide direction to the contractor regarding disposition.

Superfund property may not be transferred without reimbursement for its fair market value (to be
provided by the contractor in accordance with the PAR) unless it is to be used, wholly or in part,
for Superfund purposes. Proceeds from the sale of Superfund property should be credited to the
contract to which the property was accountable, when possible.  The credit may be applied to the
contract by the CO, or at the CO's direction, by the contractor. If it is not possible to credit the
contract, the funds must be credited to the Superfund trust account.

Non-Superfund excess Government property/scrap may be transferred, donated or sold as
directed by the PLCO, and any proceeds credited as directed by the PLCO or the CO.

NOTE: The contractor is not relieved of responsibility for Government property until
shipment or transfer of the property, in accordance with disposal instructions provided by
the CO or PLCO, is completed. The accountable contract should not be modified to
remove the property until it has been verified that disposal of the property has been
completed. If final disposition takes place concurrent with contract close-out, no
modification is required.

      3. The PO shall, within nine days of receipt of the excess property report from the CO,
      review and respond to the request, in writing, with a determination whether a valid current
      or future requirement for the Government property exists on the current contract or on
      another EPA contract being performed by the same contractor.

             (a) If a current or future requirement to the current contract exists, the PO will
             notify the CO, in writing, that a requirement exists on the current contract so that
             the CO may inform the contractor to 1) retain the Government property and 2)
             request withdrawal of those items from the inventory schedule submitted to the
             PLCO.
                                         5-16

                                       H - 20

-------
             (b) If a requirement exists on another EPA contract, the PO will notify both COs,
             in writing, that Government property is excess on one contract and that a
             requirement exists on the other EPA contract. A GPAW is required for the
             gaining contract.  The COs may transfer the Government property from one
             contract to the other.  Both the losing and receiving COs must authorize the
             transfer, in writing. This should be by modification.

             (c) If no requirement is found, the PO will notify the CO, in writing, that there is
             no known current or future requirement for the Government property on the
             current contract or on any other EPA contract within the program office.

If the contractor is directed by the CO to transfer the excess Government property to the EPA
Financial Accounting System property module, the PO will assist the contractor in obtaining any
missing data elements (see Attachment D) necessary to satisfy the reporting requirements.

The PLCO has a total of 90 days to complete the disposition process, which includes the 30 day
agency screening period. COs and POs should report known cases of longer disposition periods
to the CPCs. This is particularly important when the delay causes EPA to incur costs.  DCMC is
paid to perform disposition for the agency. Adjustments must be made for poor or late
performance. It is important that the CPCs be made aware of such cases.
                                          5-17

                                         H -  21

-------
                                                                           Attachment A
                    U.S. ENVIRONMENTAL PROTECTION AGENCY
                    CLASS DEVIATION FOR FAR 45.302-l(a) AND (d)

                                       FINDINGS
 1.     GAO, in auditing the property management program at NASA, was very critical of
       NASA's practice of routinely authorizing contractors to acquire general purpose
       equipment (facilities) under their contracts. The GAO findings prompted an internal
       review of EPA property management practices. This review raised significant concerns.
       Of particular concern was a finding that EPA contracting officers may also routinely
       authorize facilities under Agency contracts. This practice is in conflict with Federal
       Acquisition Regulation (FAR) 45.302-l(a), which sets forth the general policy that
       contractors should provide the facilities necessary to perform on Government contracts.

 2.     The Office of Acquisition Management has reexamined EPA's property management
       policies and procedures in order to ensure compliance with FAR policy. EPA has a large
       number of existing contracts which authorize the furnishing of facilities to contractors
       either as Government furnished property (GFP) or contractor acquired property (CAP).
       In addition, a significant number of procurements in process would furnish facilities to
       contractors.  EPA also has a large inventory of existing facilities previously acquired under
       Agency contracts. These facilities have limited utility within the Agency, but are necessary
       for the performance of existing, new, or follow-on contracts.

 3.     In the case of existing EPA contracts, the Agency has balanced the utility of immediate
       FAR compliance with disruption to the Agency mission. Immediate compliance with
       FAR policy would require EPA to remove and dispose of existing facilities, and incur a
       considerable administrative burden associated with renegotiating contractual provisions
       under these existing contracts. These actions would likely result in a significant period of
       time where facilities would be unavailable for performance of Agency contracts.
       Programmatically, this  would jeopardize contractor performance and accomplishment of
       the Agency's mission. Because EPA already owns much of the facilities that are at issue,
       requiring immediate compliance for existing contracts would likely have significant cost
       implications  in that EPA may incur duplicate charges caused by the contractor
       repurchasing essentially the same facilities.

4.      In addition to furnishing existing facilities to its contractors, many existing EPA contracts
       authorize contractors to purchase new facilities. While EPA is correcting its practices for
       new procurements, it is administratively impractical to bring all of the Agency's existing
       contracts into immediate compliance.  However, the tasks necessary to bring these
       contracts into compliance are not so burdensome so as to justify continuing these practices
       indefinitely. Accordingly, EPA contracting officers shall begin to bring Agency contracts
       into compliance with FAR Part 45 (except as otherwise provided in this class deviation).


                                         5-A-l

                                        H - 22

-------
        Compliance must be complete within one (1) year of the effective date of this class
        deviation. However, in the case of contracts (including all option periods) that will expire
        within two years of the effective date of this class deviation, the benefits of corrective
        action do not justify the associated administrative tasks and cost impact. Therefore,
        contracting officers are not required to correct such contracts.

 5.     EPA also has a significant number of procurements that are at various stages of the pre-
        award process. The majority of these procurements are time-sensitive.  In balancing
        immediate FAR compliance with the Agency's need to make timely awards, EPA has
        determined that procurements where best and final offers have been requested as of the
        effective date of this class deviation, but contract awards have not yet been made, shall be
        treated in the same manner as EPA's existing contracts discussed in paragraph 4 above.
        At this stage in the competitive process, negotiations with the competitive range offerers
        have concluded.  To amend these solicitations to become FAR compliant would result in
        resubmission and reevaluation of proposals. This would delay contract awards and deny
        vital services to the Agency.  However, contracting officers are required to bring the
        resulting contracts  into compliance with FAR Part 45 within one (1) year from the date of
        contract award.

 6.     Procurements in earlier stages of the procurement process may be similarly impacted if
        amendments eliminating facilities are required. Accordingly, as of the effective date of this
        class deviation, for procurements where proposals have been received but best and final
        offers have not yet been requested, contracting officers may determine that it is impractical
        to amend the solicitation and/or eliminate proposed facilities through negotiations without
        a material impact on the competitive process.  In supporting this determination,
        contracting officers should examine such factors as anticipated delays in the acquisition
        process, the likely ability of offerers to provide their own facilities, any detrimental effect
        on the competition obtained, the cost impact on offerers, etc. This determination must be
        documented in the  pre-award file.  Contracting officers are not required to generate a
        separate document, but may include this determination in one of the required pre-award
        documents (i.e., competitive range determination, pre-negotiation memorandum, post-
        negotiation memorandum, etc.). If a separate document is prepared, it does not have to
        be approved above the contracting officer level. Contracting officers are required to  bring
        the contracts into compliance with FAR Part 45 within one (1) year from the date of
        contract award.

 7.     As of the effective date of this class deviation, procurements at a  stage of the pre-award
        process prior to proposal submission will be FAR compliant except as provided elsewhere
        in this deviation.

- 8.     EPA has a large number of scientific laboratories in support of its mission. These are
        characterized by both  a Federal and contractor presence. In fact,  many of these
        laboratories have the features of a Government-owned, contractor-operated (GOCO),
        plant but because the EPA presence involves more than mere oversight, none can be  truly
        characterized as a GOCO. We have identified three conditions common to these
        laboratories which support the furnishing of facilities to contractors.

                                           5-A-2

                                          H - 23

-------
       a)     To assure comparability of data, EPA must be able to compare test results on the
              same item of equipment over time. If multiple contractors were required to furnish
              their own equipment, the reliability of test data would be jeopardized.

       b)     The movement and replacement of equipment by various contractors may cause
              unacceptable breaks in service which could severely impact the Agency's mission.
              For example, some mass spectrometers require up to six months in preparation
              time before thev are fiillv onerational.
time before they are fully operational.
       c)     Invariably, each laboratory has equipment which is shared by EPA and contractor
              employees. It is inefficient in terms of cost and space for the contractor to furnish
              their own equipment when the combined use of the existing equipment totals less
              than 100 percent.

       The combination of these circumstances in the unique environment of an Agency
       laboratory examining data fundamental to the protection of human health and the
       environment supports exempting scientific laboratories from the requirements of FAR,
       Part 45.

9.     There are circumstances where there are imminent threats to public health or welfare of
       the United States, or the environment. In those cases, it may be necessary to furnish
       facilities to contractors in order that they may address such threats.

10.    Finally, EPA has a large inventory of existing facilities as surplus or under current
       contracts.  These facilities have limited utility within the Agency but are necessary for the
       performance of existing, new, or follow-on contracts.  When contract performance
       requires such facilities, it is prudent for EPA to make the facilities available in order to
       avoid duplicate charges. Otherwise, EPA may pay for the contractor's purchase through
       reimbursement of their indirect costs. Further, withholding such facilities from contractors
       would expose EPA to costs for storage and disposal, which are factors underlying the
       FAR policy for not furnishing facilities to contractors.  Furnishing existing facilities to
       contractors is the most cost effective use of these facilities.

11.     If an  exception under FAR  45.302-l(a) applies, FAR 45.302-l(d) places further
       restrictions on furnishing facilities to contractors where the facilities have a unit cost of
       less than $ 10,000. A majority of the equipment discussed in the preceding paragraphs is
       valued at less than $10,000 per unit. The rationale in the paragraphs set forth above
       applies equally to all items regardless of their estimated cost.
                                         5-A-3

                                         H  - 24

-------
                                      DETERMINATION

Based on the above findings, and the authority of FAR 1.404(a) and EPA Acquisition Regulation
(EPAAR) 1501.404,1 grant the following deviation to the FAR:

1.      Notwithstanding FAR 45.302-l(a) and (d), EPA may furnish facilities under existing
       contracts in accordance with the terms of those contracts for a period not to exceed one
       (1) year from the effective date of this class deviation.

2.      Notwithstanding FAR 45.302-l(a) and (d), in the case of contracts (including all option
       periods) that will expire within two years of the effective date of this class deviation, EPA
       may continue to furnish facilities in accordance with the terms of those contracts.

3.      Notwithstanding FAR 45.302-l(a) and (d), EPA may continue the procurement process
       including award, without amending the solicitation, and may furnish facilities under such
       resultant contracts consistent with determination number 1 above, in current procurements
       where best and final offers have been requested but award has not yet been made,
       provided the resultant contracts are brought into compliance with FAR Part 45 within one
       (1) year from the date of contract award.

4.      Notwithstanding FAR 45.302-l(a) and (d), as of the effective date of this class deviation,
       where proposals have been received but best and final offers have not yet been requested,
       EPA may continue the  procurement process including award, without amending the
       solicitation, and may furnish facilities under such resultant contracts consistent with
       determination number 1 above, provided the contracting officer determines that it is
       impractical to amend the solicitation and/or eliminate proposed facilities through
       negotiations without a material impact on the competitive process. The resultant
       contracts must be brought into compliance with FAR Part 45 within one (1) year from the
       date of contract award.

5.     Notwithstanding FAR 45.302-l(a) and (d), for procurements for scientific or technical
       services on site at the following EPA laboratories, EPA may continue to provide facilities
       to these contractors.  This exemption only applies to scientific and technical services at
       these sites and not to contracts for other services such as janitorial and guard services.
       However, contracting officers must still consider whether some facilities are more
       appropriately supplied  by the contractor.  The sites covered by this paragraph are:

       Atmospheric Modeling Division,         RTP.NC         Office of Research & Development
       Atmospheric Processes Research Div.            RTP.NC         Office of Research & Development
       Air Measurements Research Div.               RTP.NC         Office of Research & Development
       Air Exposure Research Div.                   RTP.NC         Office of Research* Development
       Aquatic Research Division                   Cincinnati, OH      Office of Research & Development
       Characterization Research Division             Las Vegas, NV      Office of Research & Development
       Ecosystems Research Division                 Athens, GA        Office of Research & Development
       Water Supply and Water Resources Div.          Cincinnati, OH      Office of Research & Development
       Land Remediation and Pollution Control Division    Cincinnati, OH      Office of Research & Development
       Sustainable Technology Division               Cincinnati, OH      Office of Research & Development
       Subsurface Protection and Remediation Division     Ada, OK         Office of Research & Development
       Air Pollution Prevention and Control Division       RTP.NC         Office of Research & Development
       Reproductive Toxicology Division              RTP.NC         Office of Research & Development
       Experimental Tox.cology Division              RTP.NC         Office of Research & Development

                                              5-A-4

                                             H - 25

-------
6.
RTP,NC
RTP,NC
RTP.NC
Gulf Breeze, FL
Duhith,MN
GrosseIle,MI
Corvallis,OR
Nanagansett, RI
Cincinnati, OH
Arm Arbor, MI
Montgomery, Al
Las Vegas, NV
Office of Research & Development
Office of Research & Development
Office of Research & Development
Office of Research & Development
Office of Research & Development
Office of Research & Development
Office of Research & Development
Office of Research & Development
Office of Water
Office of Air and Radiation
Office of Air and Radiation
Office of Air and Radiation
Edison, NJ Office of Sol. Waste & Emer. Response
Lexington, MA
Edison, NJ Region 2
Annapolis, MD
Athens, GA
Chicago, IL
Houston, TX
Kansas City, KS
Denver, CO
Richmond. CA
Port Orchard, WA
Region 1

Regions
Region 4
Region 5
Region 6
Region 7
Region 8
Region 9
Region 10
Environmental Carcinogenesis Division
Neurotoxicology Division
Human Studies Division
Gulf Ecology Division
Mid-Continent Ecology Division
Community-Based Science Support Staff Activity
Western Ecology Division
Atlantic Ecology Division
Technical Services Division
National Motor Vehicle Emissions Laboratory
National Air and Radiation Environmental Lab.
Office of Radiation Programs
Environmental Response Branch
Central Regional Laboratory
Central Regional Laboratory
Central Regional Laboratory
Central Regional Laboratory
Central Regional Laboratory
Central Regional Laboratory
Central Regional Laboratory
Central Regional Laboratory
Central Regional Laboratory
Central Regional Laboratory


Notwithstanding FAR 45.302-l(a) and (d), contracting officers may authorize the

furnishing of facilities to contractors in emergency situations when there is an imminent

threat to public health, the welfare of the United States, or the environment. Where

facilities are furnished under these circumstances, the contracting officer must document

the file within seven (7) working days. This deviation is restricted to the period of the

emergency.


Notwithstanding FAR 45.302-l(a) and (d), and determination numbers 1-6 above, EPA

may furnish existing facilities on existing, new, or follow-on contracts, until the inventory

of existing facilities is exhausted  This does not authorize the acquisition of facilities in

any manner with the intent to subsequently make them available to contractors.


This deviation  does not authorize EPA to furnish facilities except as otherwise provided

herein.
Betty L Bailey, Director
Office of Acquisition Management
                                                                    Date
                                                5-A-5

                                                H  - 26

-------
                                                                                    Attachment B
                    GOVERNMENT PROPERTY ANALYSIS WORKSHEET

Contractor:	     Contract No:	Date of Request:__/__/	

A. Contracting Officer Preliminary Analysis

        1. Does the request meet:  (request must meet at least one or CO must reject)             Yes    No
               a. the exceptions of FAR 45.302-1?                     Cite exemption:	.
               b. the exceptions of EPA's FAR class deviation?          Cite exemption:	.
               c. the definition of property that is the object of the contract?
               c. the circumstances for an individual deviation?
               d. if for material, the exceptions of FAR 303?

        2. Has the contractor submitted a complete request for Government property in accordance with the Property
        Administration Requirements (PAR).                                         Yes    No

B. Project Officer Endorsement

        1. I have reviewed the request and determined that it does not exceed the minimum contract requirements and
        that the quantity is reasonable. (If you do not concur, please explain on the back.)

        2. Existing property is available to fulfill this request.                                  Yes    No

               Project Officer	Date:	

C. Property Management Officer Certification

        There is no like item(s) in EPA's excess system which may be used. (If like items exist, please explain on the
        back.)

        Property Management Officer	Date:	
D. Contracting Officer Analysis   (Select one of the following conclusions (check one). The conclusion should be
supported by attachments to this form, i.e. cost analysis, narrative rationale.)

        1. As supported by A., B., and C., above, and the attached analysis:

        	  a.  The property requested is existing EPA property and it is my determination that it is in EPA's
               best interest to provide it to the contractor. (GFP)

        	  b.  The property requested is not existing EPA property, but it is my determination that it is in EPA's
               best interest to authorize the contractor to acquire property on behalf of the Government. (CAP)

        	  c.  The Agency may provide the requested property to the contractor, but it is my determination that
               it is not in EPA's best interest to do so.
        2. Other:.
        Contracting Officer	Date:-



                                                 5-B-l

                                                H  -  27

-------
EPA
U.S. Environmental
Letter of Delegation
For Partial Contract
Administration
3.TO:
5.PRTME CONTRACTOR AND PLACE
OF PERFORMANCE


1. Receiving Office
Control No.CMQ
Attachment C

4.FROM:
6.CONTRACT NO. AND
DATE
8.CONTRACT TYPE
7.FACE VALUE
9.COMPLETION DATE
10.LOCATION OF PROPERTY AND RECORDS IF DIFFERENT FROM BLOCK 5.
11.
You are hereby authorized to act as my representative in the administration of this contract,
copy attached. The functions delegated to you for administration are:

 a. Property Administration
 b. Plant Clearance.

You are further authorized, within the limits of the contract, to redelegate the functions delegated
to you above unless specifically withheld by EPA.  Please notify the office in block 4 above if this
contract is redelegated to or support administration is sought from a DCMC Office other than the
one specified in block 3.

Special EPA requirements and considerations in the performance of this delegation are specified
in the Special Instructions for Property Administration and Plant Clearance.

You are requested to provide the EPA Contracting Officer with copies of all communications
relating to the administration of this contract that you consider significant

Please acknowledge acceptance of this delegation, in writing, to the EPA Contracting Officer
within 30 days of receipt
12. TYPED NAME OF CONTRACTING
OFFICER  (Tkuc md.de ปreปc**cr)
                                   13. CONTRACTING OFFICER
                                   SIGNATURE
                                                                               14. DATE
15. EPA PERSONNEL TO CONTACT WHEN NECESSARY IF DIFFERENT FROM BLOCK 4.

Function                        Contact Name            Code              Phone


Property Surveillance

Plant Clearance
 NOTE: A copy of the contract and any pertinent mods should accompany this delegation. If the documents are not included
       please inform the Contracting Officer.	
                                              H -  28

-------
EPA
Vฃ. Environmental
Prelection Agency
Contract
Administration
Delegation, Special
Instructions
1. Receiving Office
Control No. 
-------
EPA
U-S. Environment!)
Protection Agency
Contract
Administration
Delegation, Special
Instructions
1. Receiving Office
Control No. (DCMQ
2. Cage Code IDCMQ
This letter is to be used to provide special instructions to the Property Administrator.
3.   FUNCTIONAL AREA (Enter applicable functional area in this space, such as Contract Administration, Property
    Administration, Plant Clearance, etc. Use a separate letter for each functional area delegated.)
       PROPERTY ADMINISTRATION

PAGE 2 OF 3
4. SPECIAL INSTRUCTIONS

     (8)    Ensure discoveries of unrecorded property are investigated, documented, and reported to identify
           both the causes and necessary actions to prevent recurrence of the discrepancies, FAR 45.502(1).

     (9)    Ensure the Contractor does not categorize any Plant Equipment used for general testing purposes,
           FAR 45.101(a) as Special Test Equipment (STE).

     (10)   Include enough floor-to-records samples in system analysis to ensure proper tagging and recording of
           Government Property belonging to EPA.

     (11)  Government owned motor vehicles must be reviewed as a separate sampling and must be a 100%
          review. The review of motor vehicles shall not be waived during an analysis. The PA will ensure the
          contractors procedures include the requirements for motor vehicle reporting.  The data elements to be
          reported are (1) a master record report, (2) a status change report, and (3) an operating summary
          report of each vehicle. These reports are to be submitted, by October 1 of each year, to;

          EPA Facilities Management and Services Division
          Transportation Management Section 3204
          401 M Street S.W.
          Washington B.C. 20460

          Instruction regarding the completion of these reports is provided to the contractor with the initial
          authorization/approval for the acquisition of the vehicle.

     (12)  Ensure the Contractor prepares and submits to DCMC, one copy of a report of Government-Owned/
          Contractor-Held  Property by Oct. 31 for forwarding, by Nov. 20, to the EPA organization cited in the
          delegation. Negative reports are required.

     (13)  Ensure the contractor's procedures require an original of a report of Government-
          Owned/Contractor-Held Property to be forwarded, by Oct. 31, to the contracting officer assigned in
          block 4 of the first page of this document
5. EPA CONTACT DESIGNATED FOR THIS FUNCTION IF DIFFERENT FROM DELEGATION LETTER
  a. NAME                    b. PHONE
                                                H -  30

-------
EPA
U.S. Environmental
Protection Agency
Contract
Administration
Delegation, Special
Instructions
1. Receiving Office
Control No. 
-------
EPA
U.S. Environmental
Protection Agency
Contract
Administration
Delegation, Special
Instructions
1. Receiving Office
Control No. (DCMQ
2. Cage Code 
-------
                                                                                   Attachment D
                                 Required Data Elements.

Where applicable (all elements are not applicable to material), the contractor is required to maintain, at a
minimum, the information related to the following data elements for EPA Government property:

         Contractor Identification/Tag Number
         Description
         Manufacturer
         Model
         Serial Number
         Acquisition Date
         Date received
         Acquisition Cost *
         Acquisition Document Number
         Location
         Contract Number
         Account Number (if supplied)
         Superfund (Yes/No)
         Inventory Performance Date
         Disposition Date

* Acquisition cost shall include the price of the item plus all taxes, transportation and installation
charges allocable to that item.

NOTE:  For items comprising a system, which is defined as "a group of interacting items functioning as a
complex whole," the contractor may maintain the record as a system noting all components of the system
under the main component or maintain individual records for each item.  However, for the Annual Report
of Government Property, the components must be reported as a system with one total dollar amount for
the system if that system total is $25,000 or more.
                                         H - 33

-------
                              United States Environmental Protection
                                                                         Agency
                        REPORT OF GOVERNMENT-OWNED/CONTRACTOR-HELD PROPERTY
                                                            REPORT AS OF
                                                            30 SEP	
                                                                OR
                                                              REPORT
                                                              CONTROL
                                                              NUMBER
                                                              (OPTIONAL)
 1.  TO (Enter name and address of Administrative Contracting Officer)
                                   2.  FROM (Enter full name, address and CAGE code of Contractor)
 3.  COPY TO  (Enter name and address of property administrator)
                                   4.  Address of Primary Property Location
 5. CONTRACT NUMBER
6. CONTRACT
   PURPOSE
7. BUSINESS TYPE
8. No. of Subcontractor/Alternate Locations
 a. PROPERTY CLASSIFICATION
  (See FAR 45 for classification definitions)
b.BALANCE BEGINNING OF PERIOD
                             (1)  Acquisition
                                  Cost
                                (In Dollars)
                (2)  Quantity
                   (in units)
                 c. ADDITIONS

                 (In Whole Dollars)
              d. DELETIONS

              (In Whole Dollars)
                                                                e. BALANCE END OF PERIOD
(1) Acquisition
     Cost
   (in dollars)
(2) Quantity
  (in units)
  or acres)
9. LAND
 10. OTHER REAL PROPERTY
11. FACILITIES
  items costing $25,000 or more

  items costing Under $25,000
12. SPECIAL TEST EQUIPMENT
  items costing $25,000 or more

  items costing Under $25,000
13. SPECIAL TOOLING
items costing $25,000 or more

  items costing Under $25,000
14. AGENCY PECULIAR
  items costing $25,000 or more

  items costing Under $25,000
15. MATERIAL
16. Contractor Representative
a. Typed Name (Last, First, Middle Initial)
                             b. Signature
                                                         C. Date Signed
d. Telephone Number
17. DCMC Property Administrator
                   System Status      Satisfactory _
                                                                                         Unsatisfactory.
a. Typed Name (Last, First, Middle Initial)
                             b. Signature
                                                         C.  Date Signed
d. Telephone Number
                             6. Date of Last (Re)Analysis_
                                                         f Type_
                                                         H - 34

-------
                                      REPORTING  INSTRUCTIONS
GENERAL. The prime contractor shall report all Government
property , accountable to a contract. One form is to be used for
each contract. Property shall be broken down by the classifications
as indicated.  The report is to include Government property in the
prime contractor's possession or in that of its subcontractors as of
September 30 of the reporting year. The report is to be forwarded
to the Administrative Contracting Officer specified in item 1, with a
copy to the DCMC PA (if assigned) to be received by those offices
no later than October 31 of each year.  Report zero end of period
balances when no Government property remains accountable to the
contract

REPORT AS OF 30 SEPTEMBER. Fill in the appropriate year (or
other date for final reports).

FINAL REPORT. A final report clearly marked "FINAL" shall be
submitted within 30 days after disposition of all property  subject to
reporting, if the contract performance is complete.

ITEM 1 - TO. Enter the name of the Administrative Contracting
Officer designated in the contract. Include the full mailing address
(including City, State and ZIP).

ITEM 2 - FROM. Enter the full name and address of the reporting
contractor. Enter the name as it appears on the contract, or if
modified, the current contractor name. Also enter the Commercial
and Government Entity (CAGE) Code (if applicable).

ITEM 3. COPY TO Enter the name and address of the
 Government Property Administrator (if assigned).  Include the mailing
 address (including City, State, and ZIP)

ITEM 4 - ADDRESS OF PRIMARY PROPERTY LOCATION.
Enter the primary location of the property if different from block 2.

ITEM 5 - CONTRACT NO.  Enter the contract number under
which the Government property is accountable.

 ITEM 6 - CONTRACT PURPOSE. Enter one of the following
 1-character alphabetic codes to identify the general purposes of the
 contract:

       a.  RDT&E

       b.  Supplies (deliverable end items)

       c.  Services, except ford.

       d. Operation of a Government-Owned Plant or Facilities
            including test sites, ranges, installations.

       e. Contract for storage of Government Property.

       f.  Others
ITEM 7 - TYPE OF BUSINESS.  Enter a 1-character alphabetic
code indicating the type of business concern:
    L = Large
                     S = Small
N = Non-profit
    (See FAR Part 19 for definition of Small Business and FAR
    31.701 for definition of Non-profit Organizations).

ITEM 8 - NUMBER OF SUBCONTRACTOR/ALTERNATE
LOCATIONS. Number of locations of subcontract property and/or
property at alternate sites of the prime contractor (one total for all).
ITEMS 9- 15.b.m • ACQUISITION COST (BALANCE AT
THE BEGINNING OF THE FISCAL YEAR). Enter the acquisition
 cost for each classification of property. The amounts reported must
 agree with the amounts reported in the previous year for BALANCE
 AT END  OF PERIOD.

ITEMS 9. 11 - 14.b.f2l - QUANTITY (BALANCE AT BEGINNING
 OF THE FISCAL YEAR). Enter the quantity for all classifications
 of Government property except for Land, Other Real Property, and
 Material on hand. The amounts reported must agree with the
 amounts reported in the previous year for BALANCE AT  END OF
 PERIOD.

ITEMS 9 - 14.c. - ADDITIONS (in dollars). For the property
classifications indicated, enter the acquisition cost for the total
additions to the contract from any source during the fiscal year. Do
not enter for Material.

ITEMS 9 • 14.d. - DELETIONS (in dollars). For the property
classifications indicated, enter the acquisition cost for the total
deletions from the contract during the fiscal year. Do not enter for
Material.

 ITEMS 9 - 15-e.m - ACQUISITION COST (BALANCE AT THE
 END OF THE FISCAL YEAR).  Enter the acquisition cost for each
 classification of property.
 ITEMS 9. 11 - -M.e.rci - QUANTITY f BALANCE AT END OF
 FISCAL YEAR). Enter the quantity for all classifications of
 Government Property except for Land, Other Real Property and
 Material on hand. These will be carried forward to reflect the
 balance at the beginning of the following year.

 ITEM 16 - CONTRACTOR REPRESENTATIVE. Type the name
 of the contractor representative authorized by the property control
 system to sign this report. Include that individual's commercial area
 code and telephone number, signature and date.

 Item 17 to be completed bv DCMC Property Administrator.

 ITEM 17 - PROPERTY ADMINISTRATOR. Type the name of the
 Government Property Administrator or other authorized property
 representative.  Include that individual's commercial area code,
 telephone number, signature and date. Items e and f are self
 explanatory with the exception of type. For type indicate initial,
 limited without visit, limited with visit, or standard. (PA take special
 note of items e and f these must be completed on each form).
                                                           E  -  35

-------

-------
          APPENDIX I

CONTRACTS MANAGEMENT MANUAL

       DRAFT CHAPTER 7

    CONTRACTING OFFICER'S
       REPRESENTATIVES
              i-1

-------
1-2

-------
CONTRACTS MANAGEMENT MANUAL                                DRAFT



           CHAPTER 7 - CONTRACTING OFFICER'S REPRESENTATIVES

                                Table of Contents

  SECTION                                                        PAGE
  TITLE                                                     NUMBER

1.  Background	7-1
2.  Purpose	7-2
3.  Applicability	7-2
4.  The Contracting Officer (CO)	7-2
5.  The COR (in General)	7-2
6.  Contract CORs	7-5
7.   Delivery Order, Task Order or Work Assignment CORs	7-6
8.   Alternate CORs	7-7
9.   Required Training	7-7
10. Recommended Training and Mentoring	7-7
11. Course Scheduling 	7-8
12. Deferment of Training Requirements	7-8
13. Nomination and Appointment of CORs	7-8
14. Rescission of Appointment	7-9
15. Removal and Reinstatement from all Agency Acquisitions	7-9


                                   Attachments

A - Duties Performed by Contract CORs	7-11

B - Duties Performed by Delivery Order, Task Order or Work Assignment CORs	7-14

C - EPA Form 1900-65	7'18

D - Sample COR Appointment Letter	7-19
                                    1-3

                                       7-i

-------
CONTRACTS MANAGEMENT MANUAL                                   DRAFT
            CHAPTER 7 - CONTRACTING OFFICER'S REPRESENTATIVES
 1. Background.

       a.  The Federal Government has conducted acquisition-related studies and commissions
 (including the First and Second Hoover Commissions in 1949 and 1955, the Fitzhugh
 Commission in  1970, the Commission on Government Procurement in 1972, and the Packard
 Commission in  1986) for over many years.  All of these studies recommended improvements in
 acquisition. The great majority of reform efforts focused on changes in acquisition policies and
 procedures. In 1996, Congress passed the Federal Acquisition Reform Act of 1996 (FARA),
 aimed at improving the acquisition workforce. The same year, Congress also enacted the
 Information Technology Management Reform Act (ITMRA). FARA became Division D and
 ITMRA became Division E of the FY 1996 Defense Authorization Act (Public Law 104-106).
 The two Acts were renamed as the "Clinger-Cohen Act" (the "Act") in Section 808 of the
 Omnibus Consolidated Appropriations Act (Public Law  104-208).

       b.  The Act establishes minimum education, training, and experience requirements to be
 met by individuals filling "acquisition positions." The Act covers "acquisition positions" rather
 than "acquisition personnel" in recognition of the fact that acquisition is a multi-disciplinary or
 multi-functional career field.  Some employees, such as General Schedule 1102 contract
 specialists, are involved in acquisition by virtue of their career field.  For other employees, the
 determination of whether or not they are in "acquisition positions" is dependent on whether or
 not they are performing acquisition functions. Examples of the latter include individuals who
 develop procurement initiation notices, evaluate contractor proposals, monitor contractor
 performance and the like. Employees who perform these functions are found hi diverse job
 series such as: program or management analysts, environmental protection specialists,
 information management specialists, and so forth. The Act attempts to ensure that, when
 assigned to perform functions integral to the acquisition  process, personnel in these functions or
 career fields are appropriately trained, educated, and experienced in acquisition matters.

       c.  The Act also amends section 6(d) of the Office of Federal Procurement Policy Act
 (41 U.S.C. 405) to make the Administrator, Office of Federal Procurement Policy, responsible
 for directing the activities of the Federal Acquisition Institute (FAI), in order to, among other
 things:

             (1) foster and promote the development of a professional acquisition workforce
 Government-wide;

             (2) periodically analyze acquisition career fields to identify critical competencies,
 duties, tasks, and related academic prerequisites, skills, and knowledge; and

             (3) develop instructional materials for acquisition personnel.

       d.  In addition to the examination of acquisition on a Governmentwide level, EPA has
 been the subject of several congressional hearings concerning Agency contract management
 practices. Among the problems uncovered was the improper use of contractor services (personal

                                         7-1   1-4

-------
CONTRACTS MANAGEMENT MANUAL                                    DRAFT


services, inherently governmental functions, etc.), poor financial monitoring, as well as
acquisition officials exceeding their authority and the scope of the contract. This resulted in
diverse Agency initiatives to improve contract management and administration, including written
guidance and internal management controls.

2. Purpose.  This chapter describes the requirements of the Clinger-Cohen Act and Agency
guidelines as they relate to employees in acquisition positions.  Additionally, this chapter
standardizes titles used at EPA for employees who manage contracts to match titles used
throughout the Federal Government and to avoid confusion with titles used for employees who
manage assistance agreements.

3. Applicability.

       a.  This chapter applies to all personnel in acquisition positions, including those appointed
as contracting officer's representatives (CORs), their supervisors, and any Federal Government
employees monitoring Agency contracts. It establishes the responsibilities and limitations of
employees responsible, directly or indirectly, for pre-award or post-award duties under Agency
contracts. It may apply to simplified acquisitions and orders placed under other agencies'
contracts, such as General Services Administration Multiple Award Schedule Contracts and
Governmentwide Acquisition Contracts (GWACs), if the CO determines it is in the Agency's
best interest to appoint a COR under the circumstances.

       b.  In this chapter the title "COR" is used to refer to personnel in acquisition positions,
including, but not limited to, project officers, task order project officers, delivery order project
officers, work assignment managers, and task monitors.

       c.  The Director, Office of Acquisition Management (OAM), or her designated
representative, may waive the requirements of this chapter in part or in its entirety. The
justification and approval for any waiver shall be documented in writing by the originator of the
waiver request.

       d.  Guidance concerning employees appointed as contracting officers, including ordering
officers and warranted On-Scene Coordinators, can be found in Chapter 8 of this manual.

4. The Contracting Officer (CO).

       a.  Subpart 1.6 of the Federal Acquisition Regulation (FAR) and Chapter 8 of this Manual
provide guidance on the selection, authority, and responsibilities of Agency COs. Briefly, the
CO acts as an agent of the Federal Government with authority to enter into, administer, or
terminate contracts and to make related determinations and findings.

       b.  Due to the size and complexity of Agency acquisitions, COs rely on the contribution
of numerous financial, legal, and technical experts to assist them. For specific contracts, the CO
may choose to appoint a representative to perform specified contract-related duties.  The
Government-wide term for these individuals is a "Contracting Officer's Representative,"
abbreviated as "COR."
                                           1-5
                                           7-2

-------
CONTRACTS MANAGEMENT MANUAL                                   DRAFT
5. The COR (in General)

       a. A COR is an individual, appointed by the CO who possesses the necessary knowledge,
skills, and abilities to perform the basic duties established by FAI, as listed in the COR
Workbook (The Workbook can be read or downloaded at
http://www.gsa.gov/stafi7v/training.htm.) and the Agency-specific duties listed in Attachments A
or B of this Chapter, as appropriate.  Generally, these duties include preparing acquisition
requirements, participating in contractor selection, monitoring contract performance or
performing other specialized functions. Over the years, EPA has developed a wide range of
Agency-unique titles for CORs, such a project officer, work assignment manager, delivery order
project officer, task order project officer and so forth. Regardless of the title or their varying
roles, all these individuals are CORs. The basic differences, which will be discussed later in this
chapter, center on the acquisition instrument the COR manages, whether it is a basic contract, a
work assignment, task order or delivery order.

       b.  COR duties are inherently governmental functions. For this reason, CORs must be
Federal Government employees. Senior Environmental Enrollees (SEE) and special Government
employees cannot function as CORs.

       c. CO appointment of a COR does not grant the COR authority to obligate funds on
behalf of the Agency, e.g., contracting or purchasing authority. CORs may perform only those
functions delegated to them, and must not sign or modify contracts or take any action reserved
for the CO, such as:

              (1) Promise or authorize the contractor to perform work that is additional to or
outside the scope of the contract, work assignment, delivery or task order, etc.;

              (2) Conduct negotiations or bind the Government by making any written or oral
agreements with contractors;

              (3) Directly or indirectly change the following:

                    - Pricing, cost or fee;
                    - Scope of the acquisition (contract, purchase order, work assignment,
                    delivery or task order);
                    - Delivery schedule or period of performance;
                    - Labor mix or level of effort; or
                    - Any terms or conditions of the acquisition.

             (4) Redelegate or reassign their COR authority;

             (5) Authorize Government-furnished property, or its disposition; or

             (6) Direct the contractor to start work or  issue stop work orders.

       d. Standards of Conduct and Government-Contractor Relationships.  CORs must be
Government employees in good standing, who follow the ethical and contractual principles that
are pertinent to relationships between Government personnel and contractor employees. These

                                         7-3   1-6

-------
 CONTRACTS MANAGEMENT MANUAL                                    DRAFT


 principles are set forth in a number of sources including, the Standards of Ethical Conduct for
 Employees of the Executive Branch at 5 C.F.R. Part 2635, the  Federal Acquisition Regulation
 (FAR) 3.101 and 9.5, and EPA Acquisition Regulation (EPAAR) 1509.5. Because their duties
 involve the exercise of discretion in the sensitive area of acquisition, CORs must file Office
 of Government Ethics Form 450, Confidential Financial Disclosure Report, with their
 respective organization's designated ethics official.

              (1) FAR 3.101 prescribes policies and procedures for avoiding improper
 business practices and personal conflicts of interest and for dealing with their apparent or actual
 occurrence (See FAR 3.000). In this regard, FAR 3.101-1, Standards of Conduct-General, states
 that:
          Government business shall be conducted in a manner above reproach and,
          except as authorized by statute or regulation, with complete
          impartiality and with preferential treatment for none.  Transactions
          relating to the expenditure of public funds require the highest degree
          of public trust and an impeccable standard of conduct. The general
          rule is to avoid strictly any conflict of interest or even the
          appearance of a conflict of interest in Government-contractor
          relationships. ..

 It is important to remember that statutory financial conflicts (participation in "particular matters"
 affecting one's own financial interest, or the financial interest of certain others such as spouses,
 minor children, and those with whom the employee is negotiating for employment) and the listed
 "covered relationships" in 5 C.F.R. Part 2635 Subpart E "impartiality" provisions (financial
 relationships, employers of spouses and minor children, recent former employers, and
 organizations in which employees are active participants) are not the only situations where ethics
 concerns may exist.  The standards of conduct could also be implicated in situations where
 Government personnel have a personal relationship with a contractor employee. See 5 C.F.R.
 2635.501(a) and 5 C.F.R. 2635.101(b). Because of this, Government employees who work with
 contractors should recognize that establishing or maintaining a personal relationship with a
 contractor employee  could raise, or potentially raises, impartiality concerns, and, as noted in 5
 C.F.R. 2635.106 and FAR 3.101-3(a)(2), could result in disciplinary measures if there is a
 violation of the standards of conduct.  Thus, Government employees should be sensitive to the
conflict of interest, or loss of impartiality, that such a personal relationship could create, and are
encouraged to seek the guidance of the Deputy Ethics Official, as set forth in the Standards of
Ethical Conduct,  5 C.F.R. 2635.501 and 2635.502, in this regard.  In this manner, issues related
to any such conflict of interest, or loss of impartiality, can be addressed and resolved in a manner
that protects both the employees' and the Government's interests.

              (2)    Upon learning the facts and circumstances, the employee's Deputy
Ethics Official may determine that  "a reasonable person with knowledge of the relevant facts"
would question the employee's impartiality and advise the employee not to participate in the
particular matter involving the personal relationship that caused the issue to be raised. Or, the
Deputy Ethics Official could conclude that there is no problem and advise the employee to
continue performing  normal duties without any change in procedure. The Deputy Ethics Official
could also conclude that there is an impartiality concern, but that, all things considered, the
Agency's interest in the employee's participation outweighs  the concern (5 C.F.R. 2635.502(c)
and (d)).  Such ethics advice is authoritative and protects employees from disciplinary action

                                           7-4       T~7

-------
CONTRACTS MANAGEMENT MANUAL                                   DRAFT
based on violations of the Standards of Ethical Conduct based on good faith reliance on the
advice of an Ethics Official after "full disclosure of all relevant circumstances."  Note that
employees have no attorney-client relationship with Ethics Officials; such officials would likely
consult with contracting officials in making determinations in the contracting area.

              (3) A relationship between a Government employee and a contractor employee
could also raise concerns under FAR 9.5, Organizational Conflicts of Interest, and applicable
EPA acquisition regulations and contract clauses, including EPAAR 1552.209-71 and
 1552.209-73, which deal with organizational and contractor employee personal conflicts of
interest, respectively.  Such concerns could exist, for example, if the relationship affects, or
potentially affects, the ability of the contractor to render impartial advice or assistance to the
Government, or impairs the objectivity of the contractor employee  in performing the contract
work.  If a COR discovers or otherwise learns of a situation that  raises such conflict of interest
concerns, he or she should consult with the CO regarding actions that could be taken to avoid,
neutralize, or mitigate the conflict of interest or potential conflict of interest.

              (4) CORs are encouraged to seek the guidance of the local Deputy Ethics
Official, or the Designated/Alternate Agency Ethics Official in the Office of General Counsel, on
any questions concerning the Standards of Conduct.  A copy of  the "Standards of Ethical
Conduct for Employees of the Executive Branch" as well as a list of Agency ethics officials is
available on the Agency Intranet at http://intranet.epa.gov/ogc/ethics.htm.

       e. Performance Oversight.  Agency Human Resource policy requires managers and
employees who have responsibility for managing financial resources to have performance
standards for those responsibilities. CORs and their managers are in this category and therefore
must be rated on their responsibilities. Supervisors should consult their local human resources
official for guidance on implementing employee performance plans.

6. Contract CORs

       a. Traditionally, EPA has a multi-tiered structure for CORs.  The title "project officer,"
abbreviated as "PO," was used to denote the CO's primary representative on a basic contract. In
this chapter the PO becomes the contract COR. As the CO's primary representative, the contract
COR usually oversees the delivery order, task order, or work assignment CORs described in the
next section of this chapter. In some cases the contract COR may be responsible for both pre-
award and post-award contract functions.  Attachment A to this chapter lists the duties a contract
COR may perform.

              (1) Assistance agreements also have POs. This role is unique from that of the
contract PO or contract COR.  Questions concerning the training requirements and the duties of
assistance agreement POs should be referred to the Office of Grants and Debarment.

       b. Contract CORs may be located in Headquarters, regional offices, laboratories or field
offices. For contracts which cover more than one Agency organization or geographical location,
the cognizant program office may elect to have contract CORs who perform contract-level
oversight functions for a specific Agency component or location, such as Deputy, Zone, or
Regional contract CORs. (In some Agency organizations a "deputy contract COR" is actually an
 alternate contract COR. See paragraph 8 of this chapter concerning the policy on alternate

                                           7-5  1-8

-------
CONTRACTS MANAGEMENT MANUAL                                   DRAFT


CORs.)

       c.  Requirements for becoming a Contract COR.  Due to the complexity and high dollar
value of most Agency contracts, the contract COR function is extensive and complex. Contract
CORs usually monitor the overall contract and oversee the work of CORs who are managing
work ordered under the contract. For this reason, it is crucial that contract CORs be employees
in good standing who have the requisite knowledge, skills, and abilities to perform their role and
assist other CORs.

              (1)  If a contract COR's function will involve managing the overall contract and
day-to-day contractor oversight will be performed by work assignment, delivery or task order
CORs, then the contract COR need not possess specialized technical expertise in science,
engineering, etc. However, if the basic contract does not have a separate tasking mechanism
(e.g., work assignments, delivery or task orders), or, if the contract COR will manage any orders
under the contract himself, then the contract COR must posses the technical expertise to perform
this function.

                     (i) Contract CORs, particularly those without specialized technical
expertise, may seek the advice their work assignment, delivery or task order CORs, or other
Government  professionals when needed to resolve contract issues. However, contract CORs
must be mindful that COR duties are inherently governmental functions and decisions must not
be made by contractors or parties outside the Government.

              (2) Contract CORs must have six months contract management experience in any
one of the following:  (i) serving as a COR on a delivery order, task order, or work assignment,
(ii) having GS-1102 experience, (iii) serving as a COR at another Federal agency, or
(iv) mentoring with an experienced COR.

7.  Delivery Order. Task Order or Work Assignment CORs.

        a. Delivery order, task order or work assignment CORs are generally involved in post-
award activities, overseeing a specific portion of work ordered under a contract, such as a
delivery order, task order, or work assignment. Attachment B to this chapter lists duties the
delivery, task order or work assignment COR may perform. Typically, the delivery, task order or
work assignment COR works with the contract COR.

              (1) As stated previously, this chapter will standardize the wide variety of ever-
 orowing titles EPA uses for CORs. These include, but are not limited to: delivery order project
 officer, task order project officer, work assignment manager, and task monitor. Definitions of
 standardized titles follow.

                     (i) Delivery Order COR - A COR appointed to an indefinite-delivery type
 contract where contractor supplies are ordered through  "delivery orders" awarded by the CO.

                     (ii)  Task Order COR - A COR appointed to an indefinite-delivery type
 contract where contractor tasks or services are ordered through "task orders" awarded by the
 CO.

                                          1-9
                                           7-6

-------
CONTRACTS MANAGEMENT MANUAL                                   DRAFT
                    (iii)  Work Assignment COR - A COR appointed to a cost-
reimbursement type contract where contractor services are ordered through "work
assignments" issued by the CO.

       b. A delivery/task order or work assignment COR must be technically proficient in the
work the contractor is performing. Being "technically proficient" means, for example, having
sufficient knowledge and experience to review deliverables, understand the labor categories
involved in the work, and the amount of hours needed to complete the work.  OAM recommends
delivery/task order or work assignment CORs receive on-the-job mentoring from senior CORs
before monitoring an order on their own.

8. Alternate Contracting Officer's Representative.

       a. Only a CO can appoint CORs. CORs cannot redelegate or assign their acquisition
duties to another person. Also, one COR cannot sign for another COR since the COR's authority
is contract-specific. The program office may nominate and the CO may appoint an alternate
COR to act in the absence of the COR, such as when the COR is on leave or travel. The training
and experience requirements for the alternate COR are identical to those of the COR, e.g., an
alternate Contract COR must meet all the training and experience requirements established in
this Chapter for the Contract COR.

       b. To ensure that the Agency meets the 30-day turnaround period on invoice approval,
the program office must nominate and the CO must appoint an alternate Contract COR for each
basic contract.

       c. The COR's supervisor does not have the authority to "fill-in" for the COR, to perform
COR duties, to oversee, or to direct the contractor. Only a COR who is appointed by the
cognizant contract CO may perform these functions.
 9. RpgnireH Training.  There are three required training courses for CORs: two courses provide
 basic training and one course provides refresher training.  Employees who are not current in their
 training requirements, cannot serve as CORs.

              (1) The COR Mentor Course. The COR Mentor Course was developed by FAI to
 cover the critical competencies, duties, and tasks of Federal Government CORs. This Internet-
 based course consists of 18 modules covering each COR duty.  FAI estimates it will take 24
 hours to complete the course. Since the course is taken individually on the Internet, students may
 complete the course at any pace which feels comfortable, e.g., one module a day, etc. All CORs
 must take this course.  It replaces both the three-day Contract Administration and Acquisition
 Training for Project Officers Courses. There is no individual charge for taking the course which
 can be found on the Internet at http://www.faionUne.com.

              (2) The COR Supplemental Course. While the online course familiarizes students
 with basic, Federal contract administration concepts and practices, the three-day COR
 Supplemental Course was designed by OAM staff to augment the online course. The COR
 Supplemental Course covers policies and procedures specifically related to administering Agency
 contracts. Employees who have never served as an EPA COR must complete this course after
 completing the COR Mentor Course.
                                        I - 10
                                         7-7

-------
CONTRACTS MANAGEMENT MANUAL                                    DRAFT


              (3) The Recertification Course covers the most recent issues and problem areas in
acquisition. All CORs must take the one-day Recertification Course every three years after
completing the COR Mentor Course or the COR Supplemental Course, whichever was later.

10. Recommended Training and Mentoring

       a-  Contract Administration for Supervisors Course. Supervisors play a critical role in
overseeing the performance of Agency CORs. To assist them with this job, OAM has developed
a one-day Contract Administration  for Supervisors Course. This course helps supervisors
understand the requisite duties and  responsibilities of the COR as they pertain to the numerous
Federal and EPA regulations and policy directives governing contracts. It also focuses on
problem areas (e.g., personal services, inherent governmental functions, recent General
Accounting Office and Office of Inspector General audit findings).

       b.  Mentoring. FAI and OAM courses are designed to assist the student in gaining basic
knowledge and skills in contracting fundamentals. Attending a course alone is not enough to
ensure a transfer of learning into performance results. Supervisors and other program office staff
can help by encouraging CORs to practice new skills and providing specific feedback. As part of
their mandate, the FAI developed the COR Workbook to help CORs apply and reinforce skills
learned in class through on-the-job  assignments. (The Workbook can be downloaded from the
Internet at http://www.gsa.gOv/staff/v/homepages/corbook.htm.)  For each COR area of
responsibility (duty), FAI has listed detailed steps for accomplishing that duty.  A mentor, such
as a supervisor, team leader,  or more senior COR, may assign these on-the-job tasks, oversee,
evaluate, and document a new COR's performance. This mentoring process also allows program
offices to familiarize CORs with office-specific policies and procedures.  OAM highly
recommends that all new CORs be  mentored.

11. Course Scheduling.

       a.  The Acquisition Training Service Center (ATSC) within OAM is responsible for
scheduling and presenting OAM acquisition training courses, as well as maintaining a data base
of all Agency employees who have  completed OAM acquisition training courses within  the past
five years.  Organizations interested in scheduling the required or specialized acquisition
courses should contact the Manager of ATSC for course availability and additional details.

       b.  ATSC publishes the latest, Agency wide acquisition training schedule on the Agency
Intranet at http://intranet.epa.gov/oamintra/training/index.htm.

12. Deferment of Training Requirements.

       a.  If extenuating circumstances exist, the COR's immediate supervisor may request a
deferment of the required acquisition courses. The request must be in writing to the  ATSC
Manager and must  be routed  through the respective CO for concurrence. The deferment request
must address:

              (1)  the nominee's experience in contract administration,
              (2)  the acquisition training the nominee has completed to date,
              (3)  why there is an immediate need to appoint this individual as a COR, and

                                          7-9        I -  11

-------
CONTRACTS MANAGEMENT MANUAL                                  DRAFT
             (4) plans to fulfill the training requirement.

       b. The CO will review the request. If the CO agrees to deferring the training requirement.
he or she will indicate concurrence and forward the request to the ATSC Manager for review and
approval.  Deferments of training will only be granted for a limited period until training can be
completed.

 13. Nomination and Appointment of CORs.

       a.  The cognizant CO is responsible for appointing CORs to represent the CO under a
specific acquisition. The first step in the appointment process is for the potential COR's
immediate supervisor to submit EPA Form 1900-65, Nomination of the Contracting Officer's
Representatives (Attachment C to this chapter), to the CO. The supervisor need only submit one
 1900-65 per COR under the contract.  Once a COR is appointed under a specific contract, there i:
no need to submit additional forms for each work assignment, delivery order, or task order under
is
 that contract.

       b. The decision as to who is the most appropriate candidate to serve as a COR on a
 specific acquisition is ultimately made by the CO, since that COR is a representative of the CO.
 Through the nomination process, the potential COR's immediate supervisor recommends the
 employee. When appointing a COR, the CO shall consider the requirements of this chapter as
 well as the complexity and dollar value of the acquisition. The CO will respond to the
 nomination in writing by either appointing the nominee as a COR or stating why the nominee
 was not appointed.

       c. If the nominee is appointed, the CO shall provide written instructions regarding the
 COR's responsibilities under the contract to both the COR and his or her supervisor.  For the
 COR function to be successfully performed it is imperative that the COR understands the part he
 or she plays and effectively carries out his or her responsibilities.  The COR appointment
 memorandum is the first step in delineating what is expected of the COR. When used
 effectively, the appointment memorandum can be a beneficial working document used as a basis
 for monitoring COR performance and providing ongoing feedback, both positive and negative,
 instead of paperwork that is filed and forgotten. A sample appointment memorandum for a work
 assignment COR is contained in Attachment D. Appointment memoranda for other types of
 CORs will be similar hi format. The CO must tailor this sample to list any duties,
 responsibilities, or limitations specific to the acquisition at hand.

 14. Rescission of Appointment.

       a. In some cases it may be necessary to rescind a COR's appointment for administrative
 reasons, such as when the contract has been closed out or administration of the contract is being
 moved to a different organization or location.  In these cases the CO may unilaterally rescind the
 COR's appointment by notifying the COR and his or her supervisor in writing. Likewise, the
 COR's immediate supervisor may remove the COR simply by notifying the CO of the need to
 replace the COR and nominating a successor COR.

       b. With level higher approval, the CO may rescind a COR's appointment under a specific
 contract for the following reasons:
                                        1-12
                                         7-10

-------
 CONTRACTS MANAGEMENT MANUAL                                   DRAFT


              (1) the COR has violated Agency or Federal acquisition regulations and/or
 policies;

              (2) the COR has demonstrated an inability or unwillingness to carry out delegated
 functions thus jeopardizing the Government's contractual interests; or

              (3) the Deputy Ethics Official determines there is an actual violation of the
 Standards of Ethical Conduct, an appearance of impropriety, or other ethical issues which
 preclude the employee from serving as a COR.

 In these cases, the CO will send a memorandum, through a level above the CO,  to the COR and
 his or her immediate supervisor indicating the COR's appointment to the contract is rescinded
 and specifying the reasons for the rescission.

       c. CORs who are adversely affected by the rescission of their appointment may appeal
 through procedures such as the Equal Opportunity Complaint process, or grievance under the
 Agency's administrative grievance procedure, as appropriate. The decision of the CO is final and
 binding during the time  the COR pursues his or her rights of appeal.

       d. If the program office wants to re-nominate the COR to the contract, they must provide
 documentation of how the situation has been remedied, e.g., through formal training, on-the-job
 training, counseling, or closer supervision. The CO must obtain level higher concurrence before
 reappointing the COR to the contract.

 15. Removal and Reinstatement from all Agency Acquisitions.

       a. This section concerns the removal of a COR for cause on all Agency contracts. The
 Director, OAM may remove a COR's eligibility to serve on all Agency acquisitions for:

              (1)    violation of Federal or Agency acquisition regulations and/or policies; or

              (2)    failure to comply with the Principles of Ethical Conduct, Executive Order
                    (E.G.) 11222, E.G.  12674, as modified by E.G. 12731, 3 C.F.R., 1990
                    Comp., pp. 306-311; 5 C.F.R. ง 2635.101.

       b. Requests to remove an employee's eligibility to be a COR may be initiated by the CO,
a program office official or the Inspector General. Such requests shall address the grounds for
requesting removal in a memorandum to the Director, OAM. In coordination with the COR's
Senior Resource Official, the Director will investigate the grounds for removal. If a
determination is made to remove the COR, the Director of OAM will issue a memorandum to the
SRO with a copy to the COR. As the Agency's Senior Procurement Executive, the Director of
OAM is the deciding official as to whether an employee may continue to perform contract
management functions.

       c. Employees who are adversely affected by the withdrawal of their COR responsibilities
may appeal through procedures such as the equal opportunity complaint process, or grievance
under the Agency's administrative grievance procedure, as appropriate. The decision of the
Director of OAM is final and binding during the time the COR pursues his or her rights of

                                         7-11      1-13

-------
CONTRACTS MANAGEMENT MANUAL                                    DRAFT
appeal.

   d.  The Director, OAM may reinstate individuals u. ho have had their COR responsibilities
withdrawn upon the written recommendation of the employee's Senior Resource Official. The
recommendation for reinstatement shall contain:

              (1) a brief description of the circumstances of the withdrawal,
              (2) steps taken or being taken to remedv the deficiency, and
              (3) an action plan to ensure that the deficiency does not occur again.

 If the individual is reinstated, the SRO must advise the Director of OAM, within one year of the
reinstatement, if the action plan listed in item (3) above was effective in resolving the deficiency.
                                      1-14
                                          7-12

-------
 CONTRACTS MANAGEMENT MANUAL                                   DRAFT



                                   ATTACHMENT A

                     DUTIES PERFORMED BY CONTRACT CORs

       As stated in section 5 of this chapter, the Federal Acquisition Institute (FAI) has
 established the basic duties CORs perform. FAI's COR Workbook details the duties and
 contains extensive documentation of the steps to be taken in performing each duty which are not
 repeated here. (The Workbook can be read or downloaded at
 http://www.gsa. gov/staff/v/training.htm.l In this attachment, for each FAI-established duty,
 Agency-unique steps are listed and applicable Agency guidance is referenced. This list is not
 intended to be a standard operating procedure for contract management functions.  These
 duties must be tailored to the specific program and contractual needs.

 1. PREPARE A REQUIREMENTS PACKAGE

       a. Forecasting Requirements-Estimate Program Office lead time, available funding, and
 total acquisition costs, as part of the planning, programming and budgeting process as required in
 Chapter 1 of this manual.

       b. Acquisition Planning—Provide the CO backup information to be used in drafting the
 written acquisition plans as required by the Federal Acquisition Regulation, Part 7, and Chapter 1
 of this manual. Ensure program office small and disadvantaged business utilization goals are
 met.

       c. Procurement Initiation Notice (PIN)-Following the procedures outlined in Chapter 2
 of this manual, prepare key documents to initiate the acquisition. When requested by the CO,
 provide applicable PIN documents for simplified acquisitions, or orders under other agencies'
 contracts, e.g., GWACs or GSA schedules. Prepare an acquisition statement of work in
 accordance with Chapter 21 of this manual.

       d. Ordering Work under the Contract—Review procurement packages submitted for work
 assignments, delivery orders, or task orders to ensure the package is current, accurate, and
 complete before forwarding to the CO for action. Ensure that the procurement package identifies
 vulnerable and sensitive services, potential conflicts of interest, as well as appropriate
 management controls.  Track orders placed under the contract.

 2. GOVERNMENT PROPERTY

       In accordance with Chapters 2 and 5 of this manual, identify and justify the use of
Government property under the contract.

3. TECHNICAL ASSISTANCE

       a. In accordance with EPAAR Part 1515 and Chapter 2 of this manual develop technical
evaluation criteria, chair the technical evaluation panel, evaluate offers, coordinate the consensus
documentation, and prepare the technical evaluation panel report justifying the panel's findings.
Draft questions for fact finding, discussions,  and prenegotiation positions on technical proposals.

                                         7-13     1-15

-------
CONTRACTS MANAGEMENT MANUAL                                  DRAFT



                                  ATTACHMENT A

                    DUTIES PERFORMED BY CONTRACT CORs

       As stated in section 5 of this chapter, the Federal Acquisition Institute (FAI) has
established the basic duties CORs perform. FAI's COR Workbook details the duties and
contains extensive documentation of the steps to be taken in performing each duty which are not
repeated here.  (The Workbook can be read or downloaded at
http://www.gsa.gOv/staff/v/training.htm.) In this attachment, for each FAI-established duty,
Agency-unique steps are listed and applicable Agency guidance is referenced. This list is not
intended to be a standard operating procedure for contract management functions. These
duties must be tailored to the specific program and contractual needs.

1. PREPARE A REQUIREMENTS PACKAGE

       a. Forecasting Requirements—Estimate Program Office lead time, available funding, and
total acquisition costs, as part of the planning, programming and budgeting process as required in
Chapter 1 of this manual.

       b. Acquisition Planning—Provide the CO backup information to be used in drafting the
written acquisition plans as required by the Federal Acquisition Regulation, Part 7, and Chapter 1
of this manual. Ensure program office small and disadvantaged business utilization goals are
met.

       c. Procurement Initiation Notice (PIN)-Following the procedures outlined in Chapter 2
of this manual, prepare key documents to initiate the acquisition. When requested by the CO,
provide applicable PIN documents for simplified acquisitions, or orders under other agencies'
contracts, e.g., GWACs or GSA schedules. Prepare an acquisition statement of work in
accordance with Chapter 21 of this manual.

       d. Ordering Work under the Contract-Review procurement packages submitted for work
assignments, delivery orders, or task orders to ensure the package is current, accurate, and
complete before forwarding to the CO for action. Ensure that the procurement package identifies
vulnerable and sensitive services, potential conflicts of interest, as well as appropriate
management controls. Track orders placed under the contract.

2. GOVERNMENT PROPERTY

       In accordance with Chapters 2 and 5 of this manual, identify and justify the use of
Government property under the contract.

3. TECHNICAL ASSISTANCE

       a. In accordance with EPAAR Part 1515 and Chapter 2 of this manual develop technical
evaluation criteria, chair the technical evaluation panel, evaluate offers, coordinate the consensus
documentation, and prepare the technical evaluation panel report justifying the panel's findings.
Draft questions for fact finding, discussions, and prenegotiation positions on technical proposals.

                                         7-13

-------
CONTRACTS MANAGEMENT MANUAL                                  DRAFT
       b.  Technical Evaluation of Work Plans and Delivery Order Staffing Plans-Prepare
detailed findings and recommendations on the reasonableness of the proposed tasks, labor hours
and mix, materials and quantities, etc., based on comparison with the SOW and the independent
Government cost estimate. In accordance with Chapter 16 of this manual, conduct evaluations of
offers received under multiple award contracts.

4. COR WORKPLAN

       a.  Set-up a file system containing all relevant documentation including the basic contract,
list of designated CORs, all correspondence and meetings related to the contract, technical
direction,  contract deliverables received and reviewed, payment file and other items that will
provide an audit trail of the contract COR's actions under the contract. Maintain files in
accordance with Agency National Records Management Program policy.

       b.  Protect information that is prohibited from disclosure by law, such as trade secrets and
privileged or confidential commercial or financial information, certain interagency and
intra-agency predecisional deliberative communications. Protect information about individuals
when disclosure would constitute a clearly unwarranted invasion of personal privacy. Protect
records or information compiled for law enforcement purposes, if certain interests would be
harmed by release, including when disclosure could reasonably be expected to interfere with
enforcement proceedings or to constitute an unwarranted invasion of personal privacy.

5. POST  AWARD ORIENTATION

       a.  Be familiar with the terms and conditions of the contract and the SOW.  Know who
the key players are (CO, CORs, contractor's Project Manager) and understand their roles,
responsibilities, and delegated authority. Know the proper method for ordering work (work
assignment, delivery order, or task order) under the contract.

        b. Coach delivery/task order or work assignment CORs in appropriate administrative
processes and practices for ordering and overseeing work under the contract.

 6. ADMINISTERING GOVERNMENT PROPERTY

        In accordance with Chapter 5 of this manual, properly transfer, monitor the use of, and
 disposal of Government Property under the contract.

 7. MONITORING CONTRACTOR  PERFORMANCE

        a  In accordance with EPA Order 1900.1 A, Proper Use of Contractor Services, provide
 and document technical direction to the contractor, if permitted by the contract. Guard against
 inappropriate contractor services, such as personal services and inherently governmental
 functions.

        b  Review monthly technical and financial progress reports. Compare progress to
 contractor invoice charges. Consult with the CO on any potential problems identified through

                                          7-14      1-17

-------
CONTRACTS MANAGEMENT MANUAL                                   DRAFT
such reviews.
       c.  Know the standards of conduct that apply to employees of the executive branch. Treat
contractors fairly and impartially.  Avoid personal conflicts of interest, and prohibited activities,
such as unauthorized commitments, directed subcontracting, and personal services.

8. INSPECTION AND ACCEPTANCE

       Track, inspect, accept or reject contract deliverables.

9. PAST PERFORMANCE

       a.  Complete contractor performance evaluations electronically by use of the National
Institutes of Health Contractor Performance System as specified in Subpart 1509 of the EPAAR.

       b.  For award fee contracts, accurately and promptly complete Performance Evaluation
Reports, participate on award fee panels; apply award fee factors.

       c.  In conjunction with the CO, provide documentation to the Office of Grants and
Debannent concerning performance and related problems. Report indicators of fraud  and other
misconduct to the CO, the Inspector General, and the Office of Grants and Debannent.

10. MODIFICATIONS

       Prepare purchase requests for modifications including appropriate documentation, such as
a revised SOW and cost estimate.  Document evaluation of the contractor's proposal (e.g., of the
labor hours, materials, etc., incurred or proposed  for the modification).

11. OPTIONS

       Determine the need for contract options when planning an acquisition. Recommend
whether to exercise an option or not at least 120 days prior to the required date of preliminary
notice in the contract. Obtain the necessary commitment of funds.  In a timely manner, provide
the CO with a written recommendation indicating if the option should be exercised and
supporting this decision in accordance with FAR 17.207.

12. DELAYS

      Notify the CO about a delay in the delivery or performance schedule under the contract
and the technical impact of this delay. Assist the CO in evaluating the contractor's response.

13. STOP WORK

      Identify potential conditions to stop work. If appropriate, recommend the CO issue a stop
work order. Assist in discussions with the contractor and recommend to the CO when work can
be resumed.

                                  1-18
                                         7-15

-------
CONTRACTS MANAGEMENT MANUAL                                   DRAFT
14. CLAIMS

       Notify the CO of potential disputes under the contract. Assist the CO in resolving
disputes and in processing formal claims

15. REMEDIES

       Notify the CO of performance failures and provide technical assistance to the CO, as
appropriate.

16. TERMINATION

       Identify events that may lead to contract termination.  Provide sufficient information to
support pursuing the appropriate termination procedure.

17. PAYMENT

       a.  As detailed in Chapter 6 of this manual, review contractor invoices and approve for
payment.  If appropriate, suspend costs using EPA Form 1900.68.

       b.  Track funds expended against contract ceilings.

       c.  Maintain records on current billing/final indirect cost rates under the contract. Ensure
contractor invoices reflect the appropriate rates.

18. CLOSEOUT

       As detailed in Unit 2 of the Acquisition Handbook, notify the CO when contractor
performance is completed under the contract. Assist with closeout procedures.
                                         1-19
                                         7-16

-------
CONTRACTS MANAGEMENT MANUAL                                  DRAFT
                                 ATTACHMENT B
           DUTIES PERFORMED BY DELIVERY ORDER, TASK ORDER,
                         OR WORK ASSIGNMENT CORS
       As stated in section 5 of this chapter, the Federal Acquisition Institute (FAI) has
established the basic duties CORs perform.  FAI's COR Workbook details the duties and
contains extensive documentation of the steps to perform each duty which is not repeated here.
(The Workbook can be read or downloaded at httpV/www.gsa.gov/staff/v/training.htm.) In this
attachment, for each FAI-established duty, Agency-unique steps are listed and applicable Agency
guidance is referenced. The duties described below are meant to provide an overview of the
types of functions performed by delivery/task order or work assignment CORs. This list is not
intended to be a standard operating procedure for contract management functions. These
duties must be tailored to the specific program and contractual needs.

1. PREPARE A REQUIREMENTS PACKAGE

       Prepare a procurement request with supporting documentation (SOW, cost estimate, etc.)
to ordering work under the contract. Identify vulnerable, sensitive services, potential conflicts of
interest, as well as appropriate management controls.

2. GOVERNMENT PROPERTY

       In accordance with Chapters 2 and 5 of this manual, identify and justify the use of
Government property under the work assignment, delivery or task order.

3. TECHNICAL ASSISTANCE

       Technical Evaluation of Work Plans and Task Order Staffing Plans—Prepare detailed
findings and recommendations on the reasonableness of the proposed work, labor hours and mix,
materials and quantities, etc., based on comparison with the SOW and the independent
Government cost estimate. In accordance with Chapter 16  of this manual, conduct evaluations of
offers received under multiple award contracts

4. COR WORKPLAN

       a. Set-up a file system containing all relevant documentation including the basic contract,
internal correspondence, technical direction, contract deliverables received and reviewed,
payment file and other items that will provide an audit trail of the actions on the acquisition.
Maintain files in accordance with Agency National Records Management Program policy.
                                    1-20
                                       7-17

-------
CONTRACTS MANAGEMENT MANUAL                                  DRAFT


       b. Protect information that is prohibited from disclosure by law, such as trade secrets and
privileged or confidential commercial or financial information, certain interagency and
intra-agency predecisional deliberative communications.  Protect information about individuals
when disclosure would constitute a clearly unwarranted invasion of personal privacy.  Protect
records or information compiled for law enforcement purposes, if certain interests would be
harmed by release, including when disclosure could reasonably be expected to interfere with
enforcement proceedings or to constitute an unwarranted invasion of personal privacy.

5. POST AWARD ORIENTATION

       Be familiar with the terms and conditions of the contract and the SOW.  Know who the
key players are (CO, CORs, contractor's Project Manager) and understand their roles,
responsibilities, and delegated authority. Know the proper method for ordering work (work
assignment, delivery order, or task order) under the contract.

6. ADMINISTERING GOVERNMENT PROPERTY

       In accordance with Chapter 5 of this manual, properly transfer, monitor the use of, and
disposal of Government Property under the contract.

7. MONITORING CONTRACTOR PERFORMANCE

       a.  In accordance with EPA Order 1900.1 A, Proper Use of Contractor Services, and the
terms of the acquisition, provide and document technical direction to the contractor. Guard
against inappropriate contractor services, such as  personal services and inherently governmental
functions.

       b.  Progress Reports—Review monthly technical and financial progress reports. Compare
progress to contractor invoice charges. Consult with the contract COR on any potential problems
identified through such reviews.

       c.  Know the standards of conduct that apply to  employees of the executive branch. Treat
contractors fairly and impartially. Avoid personal conflicts of interest, and prohibited activities,
such as unauthorized commitments, directed subcontracting, and personal services.

8. INSPECTION AND ACCEPTANCE

       Track, inspect, accept or reject contractor  deliverables.

9. PAST PERFORMANCE

       a.  Assist the contract COR with compiling a record of the contractor's past performance.

       b.  For award fee contracts, accurately and promptly complete Performance Evaluation
Reports, participate on award fee panels, and apply award fee factors.


                                         7-18    I  ~ 21

-------
 CONTRACTS MANAGEMENT MANUAL                                  DRAFT
       c. In conjunction with the CO and contract COR, provide documentation to the Office of
 Grants and Debarment concerning performance and related problems, as appropriate. Report
 indicators of fraud and other misconduct to the contract COR, CO, the Inspector General, and
 Office of Grants and Debarment.

 10.  MODIFICATIONS

       Prepare purchase request for modifications or amendments to the work assignment,
 delivery order, or task order, including appropriate documentation, such as revised SOW and
 cost estimate.  Document evaluation of the contractor's proposal (e.g., of the labor hours,
 materials, etc., incurred or proposed for the modification).

 11.  OPTIONS  Usually reserved for the Contract COR.

 12.  DELAYS

       Notify the contract COR about a delay in the delivery or performance schedule under the
 contract and the technical impact of this delay. Assist the contract COR in evaluating the
 contractor's response.

 13.  STOP WORK

       Identify potential conditions to stop work. If appropriate, recommend the CO and
 Contract COR issue a stop work order.  Assist in discussions with the contractor and recommend
 to the CO and Contract COR when work can be resumed.

 14. CLAIMS

       Notify the contract COR of potential disputes under the contract. Assist the CO and
 Contract COR in resolving disputes and in processing formal claims.

 15. REMEDIES

      Notify the contract COR of performance failures and provide technical assistance to the
CO and contract COR, as appropriate.

 16. TERMINATION  Usually reserved for the Contract COR.

 17. PAYMENT

      a. As detailed in Chapter 6 of this manual, review contractor invoices and approve for
payment. If appropriate, recommend suspension of costs using EPA Form 1900.68.

      b. Track funds expended versus funds  remaining on the work assignment, delivery order,
or task order.  Notify the contract COR if additional funds will be required.

                                 I - 227-19

-------
CONTRACTS MANAGEMENT MANUAL                                 DRAFT
18. CLOSEOUT

      As detailed in Unit 2 of the Acquisition Handbook, notify the contract COR when
contractor performance is completed under the work assignment, delivery order, or task order.
Assist with closeout procedures.
                                      1-23
                                       7-20

-------
         CONTRACTS MANAGEMENT MANUAL
                                                    DRAFT
Attachment C - Draft COR Nomination Form
NOMINATION OF THE CONTRACTING OFFICER'S REPRESENTATIVE (COR)
Submit this form to the cognizant contracting officer within the Office of Acquisition Management or Regional contracting office. The contracting
officer will respond to this nomination, in writing, to both the nominee and the nominee's immediate supervisor.
la. Name of Nominee
c. Mailing Address:
Organization (AAship):
Office:
Mail Code:
Street Address:
City, State & Zip Code:
2. The nomination is for:
a Contract COR
D Delivery Order COR
0 Task Order COR
0 Work Assignment COR
D Other or alternate (specify}:
t Inder Contract Number

b. Title, Series, and Grade
d. E-mail address:
C. Phone Number
f. Fax Number
3. Training completed Date Completed
1. COR Mentor Course

3. Recertification Course

4. Briefly describe the nominee's experience in performing COR duties and technical expertise in the subject matter of the acquisition.
 5. I understand that my eligibility to be a COR is dependent on adequately performing my COR duties, following ethical standards of conduct for
 employees of the Executive Branch, and maintaining my training. If any of these conditions are not met, I may be removed from this contract.

 I cannot redelegate my COR duties. In the event that I am unable to continue performing my COR duties, I will contact the contracting officer
 immediately.

 I have filed Office of Government Ethics Form 450, Confidential Financial Disclosure Report,  with the cognizant Deputy Ethics Official.
 Signature of Nominee
                                                                            Date
 6. If there is a need to remove the COR, for any reason, I will notify the contracting officer immediately.
 Signature of Nominee's Immediate Supervisor


 Print Name and Title:
Date
           Phone number	

              E-mail address:
Draft Form 1900-65. Previous Editions Obsolete
                                                            1-24
                                                             7-21

-------
 CONTRACTS MANAGEMENT MANUAL                                  DRAFT
Attachment D Sample COR Appointment Memorandum
                                                             [Date]

MEMORANDUM

SUBJECT:   Appointment as a Work Assignment Contracting Officer's Representative
              under Contract Number      '	

FROM:      CO /s/
              Contracting Officer

TO:          Newly Appointed
              Work Assignment Contracting Officer's Representative

       I hereby appoint you as a work assignment contracting officer's representative (COR)
under the subject contract. This appointment is effective as of the date of this memorandum and
shall expire: 1) when (the) work assignment(s) is/are completed, 2) when you are relieved of your
COR responsibilities, or 3) when rescinded in writing by myself or any successor contracting
officer (CO). You may not delegate your COR responsibilities.  The alternate COR, if one has
been appointed, may act ONLY if you are on leave or travel.

       As a work assignment COR you are a key player in protecting the Government's interests
and carrying out the Government's obligations under the contract. To do so effectively, it is
imperative that you are familiar with the contract terms and conditions as well as your
responsibilities and limitations as a COR. You are hereby authorized and put under obligation to
carry out those responsibilities set forth in Attachment 1. You are not authorized to take any
action which is not set forth herein and are specifically directed not to take any of the prohibited
actions set forth in Attachment 2. Further clarification of these responsibilities and prohibitions
may be obtained from the CO. Any act on your part which is not within the scope of this
appointment may lead to your personal financial liability to the contractor.

The Contract COR (project officer) is	, if you have any
questions concerning your delegated authority, please do not hesitate to call him/her on 000-000-
0000 or me on xxx-xxx-xxxx or to e-mail me at yourco.epa.gov.

Attachments

cc:     COR's immediate supervisor
                                         7-22
                                       1-25

-------
CONTRACTS MANAGEMENT MANUAL                                  DRAFT


 Attachment 1 to the COR Appointment Memorandum
As a Work Assignment Contracting Officer's Representative under Contract
	,  you responsible for the following:

1.     MAINTAINING YOUR COR ELIGIBILITY

       a. Remain current on all training prescribed for CORs in Chapter 7 of the Contracts
Management Manual. (The CMM can be found on the Agency Intranet at
http://epawww.epa.gov/oamintra/policv/cmm.pdf.) Specifically, you are required to complete the
Recertification Course every three years after completing either the COR Mentor Course or the
COR Supplement Course, whichever was completed later. If your training lapses, you are no
longer eligible to be a COR under this contract.

       b. If your training lapses or if there is a need  to relieve you of your COR responsibilities,
notify the CO immediately. Until another COR is appointed, you remain responsible for
performing your COR functions. Promptly turn over all records regarding this contract to the
successor COR.

       c. Know the terms and conditions of the contract and the work assignment, including the
statement of work and the approved work plan.

       d. Be informed about Agency and Federal acquisition policies and procedures. This
information is available on the Office of Acquisition Management's Intranet site at
http://nitranet.epa.gov/oamintra/. The Federal Acquisition Institute's COR Workbook provides
a generic list of COR functions and the steps involved in performing these  functions. The COR
Workbook can be downloaded at http://hvdra.gsa.gov/staff/v/homepages/corbook.htm. Chapter
7 of the Contracts Management Manual (CMM) contains a list of Agency-specific COR
functions.
       e. Comply with the standards of conduct that apply to employees of the executive branch.
Treat contractors fairly and impartially.  Avoid personal conflicts of interest, and prohibited
activities, such as unauthorized commitments, directed subcontracting, and personal services.
While you are a COR, you must file Office of Government Ethics Form 450, Confidential
Financial Disclosure Report with your organization's Deputy Ethics Official.
                                      1-26
                                       7-23

-------
 CONTRACTS MANAGEMENT MANUAL                                   DRAFT


 2- PROCUREMENT PACKAGF.

       To order work under the contract, prepare a procurement request with supporting
 documentation ( SOW, cost estimate, etc.).  Identify vulnerable, sensitive services, potential
 conflicts of interest, as well as appropriate management controls.

 3. GOVERNMENT PROPERTY

       In accordance with Chapters 2 and 5 of this manual, identify and justify the use of
 Government property under the work assignment.  In accordance with Chapter 5 of this manual,
 properly transfer, monitor the use of, and disposal of Government Property under the contract.
 Coordinate Government property issues with the CO and DCMA Property Administrator.

 4. TECHNICAL ASSISTANCE

       a.  Review contractor work plans for approval/disapproval. When requested, prepare
 detailed findings and recommendations on reasonableness of the proposed work, labor hours and
 mix, materials and quantities, etc., based on comparison with the SOW and the independent
 Government cost estimate.  In accordance with Chapter 16 of this manual, conduct evaluations of
 offers received under multiple award contracts.

       b.  Inform the CO of any potential or real conflicts of interest which may arise under the
 contract. Recommend possible mitigation or avoidance strategies

 5. RECORD KEEPING

       a.  Establish and maintain a separate file for documents and correspondence pertaining to
 the work assignment. Place in this file correspondence to and from the contractor, work
 associates, and Contracting  Officer; comments and approval of deliverables; documentation of
 verbal communication with the contractor; technical direction; voucher reviews and
disapprovals/approvals; contractor evaluations; and other documents pertaining to the contract.
Document actions, conversations, meetings, technical directions, etc., as they occur and include
these in the file.  Upon completion of the contract, forward this file to the CO for inclusion in the
official work assignment file.

       b. Protect information  that is prohibited from disclosure by law, such as trade secrets and
privileged or confidential commercial or financial information, certain interagency and
intra-agency predecisional deliberative communications, information about individuals when
disclosure would constitute  a clearly unwarranted invasion of personal privacy, and records or
information compiled for law enforcement purposes, if certain interests would be harmed by

                                         7-24
                                         1-27

-------
CONTRACTS MANAGEMENT MANUAL                                   DRAFT


release, including when disclosure could reasonably be expected to interfere with enforcement
proceedings or to constitute an unwarranted invasion of personal privacy.

6. MONITORING CONTRACTOR PERFORMANCE

       a.  In accordance with EPA Order 1900.1 A, Proper Use of Contractor Services, and the
terms of the acquisition, provide and document technical direction to the contractor. Guard
against inappropriate contractor services, such as personal services and inherently governmental
functions.

       b.  Assist the contractor in interpreting technical requirements. Differences of
understanding or opinion of technical requirements between the Government and the contractor
which cannot be resolved shall be referred to the CO for resolution.

       c.  Monitor and oversee the contractor's technical effort and ensure that performance
strictly conforms with the terms and conditions of the contract. Promptly inform both the
contractor and the CO of any unsatisfactory performance or noncompliance with the contract or
work assignment statement of work and terms and conditions.

       d.  Maintain reasonable contact with the contractor so as to become aware of and gain an
understanding of any problems or potential problems regarding contract performance. Report
these to the CO.

       e.  Review and provide input/recommendations and concurrence to the CO regarding the
contractor's proposed use of consultants and subcontractors.

       f.  Perform on-site surveillance of contractor performance, as necessary, to ensure
compliance with the technical provisions of the contract.

       g.  Ensure that the Contractor uses the levels of personnel  contracted for and necessary for
performance of contractual requirements and that the level of personnel contracted for is not
diluted by the excessive use of lower caliber personnel.

       h.  Spot check to see that contractor personnel are on the job and accomplishing their
assigned tasks.

       i.  Determine causative factors for any slippage in performance schedule and provide a
report of such to the CO. If the contractor is responsible for the slippage, the COR shall
recommend to the CO and  subsequently monitor corrective action.


                                          1-28
                                         7-25

-------
CONTRACTS MANAGEMENT MANUAL                                  DRAFT
7- INSPECTION AND ACCEPTANCE OF DELIVERABLES

       a. Ensure the timeliness and acceptability of all deliverables and/or reports submitted by
the contractor.

       b.  Perform inspection of completed work and/or services and certify acceptance or
nonacceptance of work.

8. PAST PERFORMANCE

       Complete a contractor evaluation form for each work assignment at the end of each
period of performance (base or option periods), and forward it to the contract COR.

10. MODIFICATIONS

       a.  Prepare purchase request for amendments to the work assignment, including
appropriate documentation, such a revised SOW and cost estimate. Document evaluation of the
contractor's proposal (e.g., of the labor hours, materials, etc., incurred or proposed for the
modification).

       b.  Ensure  that the work assignment is formally modified or amended before the
contractor proceeds with any changes in the work, terms or conditions of performance.

11. PAYMENT

       a.  As detailed in Chapter 6 of this manual, review contractor invoices and recommend
approval or disapproval, as appropriate, to the contract COR.  Such review shall be completed in
a manner so as to allow timely payment under the Prompt Payment Act.

       b.  Track funds expended versus funds remaining on .the work assignment. Ensure that
costs do not exceed available funding. Notify the contract COR if additional funds will be
required. Prepare funding requests.

       b.  Progress Reports—Review monthly technical and financial progress reports. Compare
progress to contractor invoice charges. Resolve errors or deficiencies in the reports. Consult with
the contract COR on any potential problems identified through such reviews. Monitor contractor
costs and promptly report, in writing, wasteful contractor practices to the contract COR.
                                        1-29
                                        7-26

-------
CONTRACTS MANAGEMENT MANUAL                               DRAFT
18.  CLOSEOUT

      Notify the contract COR when contractor performance is completed under the work
assignment, delivery order, or task order.  Assist with closeout procedures.
                                    1-30
                                     7-27

-------
CONTRACTS MANAGEMENT MANUAL                                   DRAFT



 Attachment 2 to the COR Appointment Memorandum

                                    PROHIBITIONS

As a Contracting Officer's Representative:

1)     DO NOT solicit proposals for enhancements to the contract;

2)     DO NOT modify the stated terms of the contract;

3)     DO NOT sign supplemental agreements (i.e., contract modifications);

4)     DO NOT issue instructions to the contractor to start or stop work unless you are
       specifically authorized by the CO in writing;

5)     DO NOT request that the contractor perform work outside the scope of the contract or
       work assignment, or perform any work without a valid work assignment or delivery order
       if work is initiated under the contract through these means;

6)     DO NOT direct changes to:
                     - what items are included in the delivery schedule,
                     - time of delivery,
                     - place of delivery,
                     - method of shipment,
                     - packing of deliverables,
                     - quantity, or level-of-effort,
                     - scope of work, drawings, designs, specifications, or statement of work.

7)     DO NOT give guidance to the contractor, either orally or in writing, which might be
       interpreted^ a change in the expressed scope, specifications, terms or conditions of the
       contract or work assignment;

8)    DO NOT make any changes that will affect the duration (period of performance) of the
       contract or work assignment;

9)    DO NOT make any changes that will affect the cost of the contract or work assignment;

 10)   DO NOT authorize the contractor to incur costs in excess of the estimated costs or other
       limitation on costs or funds set forth in this contract or work assignment;

                                          7-28

                                          1-31

-------
CONTRACTS MANAGEMENT MANUAL                                  DRAFT


11)   DO NOT approve items of cost not specifically authorized by the contract or work
      assignment;

12)   DO NOT render a decision on any dispute or any question of fact under the Disputes
      Clause of the contract;

13)   DO NOT take any action with respect to termination of the contract, except to notify the
      CO of circumstances which would appear to warrant such action;

14)   DO NOT authorize delivery or disposition of Government-furnished property;

15)   DO NOT discuss procurement plans or any other advance information that might provide
      preferential treatment to one firm over another;

16)   DO NOT make commitments or promises to any contractor relating to the award of a
      contract.
                                       1-32
                                       7-29

-------
          APPENDIX J

CONTRACTS MANAGEMENT MANUAL

          CHAPTER 9

ACCOUNTING FOR APPROPRIATIONS
         IN CONTRACTS
              j-i

-------
J  -  2

-------
CHAPTER 9 - ACCOUNTING FOR APPROPRIATIONS IN CONTRACTS

Table of Contents

PARAGRAPH                                                 PAGE
TITLES                                                  NUMBERS

9 .2  Purpose	 9-1

9.3  Applicability	 9-1

9.4  Background	 9-1

9.5  Policy	 9-1

9 .6  Cost-Reimbursement Term Contracts	 9-1
     (with work Assignments)

9.7  Indefinite Delivery/Indefinite Quality Contracts.... 9-3

9 . 8  Other Contract Types	 9-4

CHAPTER 9 - ACCOUNTING FOR APPROPRIATIONS IN CONTRACTS

9.2   PURPOSE

      This document establishes policies and procedures to assure
proper accounting for appropriations in contracts.

9.3  APPLICABILITY

      These policies and procedures apply to all funded
procurement requests submitted on or after April 1, 1984.
Procurement requests for modifications to contracts where the
contracts were awarded prior to the above date are not subject to
these procedures.

9.4   BACKGROUND

      31 U.S.C. 1534 permits an agency to charge an available
appropriation at any time during a fiscal year for the benefit of
another appropriation available to the agency.  31 U.S.C 1534
requires that amounts must be available in both the appropriation
to be charged and the appropriation to be benefited.  The statute
requires that final adjustments must be made during or as of the
close of the fiscal year to the appropriation benefited  (debit)
the appropriation initially charged (credit).

9.5   POLICY

      Generally,  each contract shall be funded from one
appropriation.  However, for those contracts which do benefit more
than one appropriation, the applicability procedures in paragraphs
9.6 through 9.8 apply.
                                 J - 3

-------
9.6   COST-REIMBURSEMENT TERM CONTRACTS  (WITH WORK ASSIGNMENTS)

      a.  The Contracting Officer shall  include in all cost-
reimbursement term  contracts  (with work  assignments) a provision
requiring the Contractor to summarize in its voucher the amounts
claimed for each work assignment.

      b.  The Project Officer shall indicate on the cover of each
work assignment the account number and document control number
 (from the contract) against which payments are to be made.  The
Project officer shall ensure that:

           (1)  The  account number and document control number on
the work assignment are the same as those cited on the contract;
and

           (2)  The  aggregate of funds on work assignments does not
exceed the amount obligated on the contracts for a particular
account number and  document control number.

      c.  The Contracting Officer shall  send a copy of each work
assignment to the finance office concurrently with issuance to the
contractor.

      d.  In general, a work assignment  should only benefit a
single appropriation.

      e.  The following procedures apply when cost-reimbursement
term contracts  (with work assignments) are to be funded from more
than one appropriation:

           (1)  The  Project Officer must  document the rationale for
use of multiple appropriations and include in the rationale an
estimate of the costs to be charged each appropriation and the
method for distributing the costs to the benefiting
appropriations.  All program offices contributing funds to the
procurement must indicate on the rationale their concurrence with
this estimate.  The Director,  Headquarters Financial Management
Division,  or designee must approve the method of distributing
costs to the various appropriations in the rationale.  The Project
Officer must include a copy of the approved rationale with the
procurement request submitted to the contracts office.

          (2)  If more than one account  number and document
control number appear on the work assignment, the Project Officer
shall indicate on the cover of the work  assignment the total funds
to be charged against each account number and document control
number.   The Project Officer shall also  provide a basis (such as
percentages or ratios)  for the finance office to follow to charge
vouchered costs to  each account number and document control
number.

          (3)   The  finance office shall  use the information from
the work assignment and the Contractor voucher to determine the
                               J - 4

-------
account number(s) and document control number(s) against which to
charge amounts claimed by the Contractor.

          (4)  The Project Officer shall continuously monitor
Contractor activity under each work assignment to ensure the costs
incurred do not exceed the total dollar value of the work
assignment,  as well as each appropriation account number included
in that work assignment.  This shall be done  in a manner
sufficient to anticipate needs for increased  overrun authority or
reprogramming actions.  Costs may initially be recorded against a
carrier appropriation/account number; however, prior to fiscal
year-end closing, appropriate adjustments must be made to
associate all costs with the benefiting appropriation/account
number.  The Project Officer shall ensure that any required
adjustments are made and shall coordinate the adjustments with the
servicing finance office.

          (5)  The Project Officer shall notify the Contracting
Officer when increases in the total contract value are expected.

          (6)  Prior to the end of each fiscal year covered by the
contract, the Project Officer shall review the contract's funding
to determine whether the ratio of obligated funds, including any
previous adjustments, coincides with the value of the work
benefitting each appropriation.  The Project Officer shall inform
the finance office in writing of any adjustments that should be
made to the established ratios.  The procedures in subparagraph
9.6e(4) apply when making these adjustments,  as well as when, at
any time during the performance, the Project  Officer anticipates a
need for an adjustment.  These adjustments must be made no later
than the end of the fiscal year in accordance with the actual or
best estimate of the benefit to each appropriation.

9.7   INDEFINITE DELIVERY/INDEFINITE QUANTITY CONTRACTS

      a.  The Contracting Officer shall include in all indefinite
delivery/indefinite quantity contracts a provision requiring the
Contractor to summarize in its voucher the amounts claimed for
each delivery order.

      b.  Generally a delivery order should only benefit a single
appropriation.

      c.  The following procedures apply when indefinite
delivery/indefinite quantity contracts are to be funded from more
than one appropriation.

          (1) Under an indefinite delivery/indefinite quantity
contract, the minimum amount is obligated on  the contract at the
time of award.  The procedures in subparagraph 9.6e(l) apply when
multiple appropriations are used to fund the minimum.  For
delivery orders issued within this minimum, the Project Officer:

              (a)   Shall  indicate  to  the  Contracting  Officer,  for
                                J - 5

-------
inclusion in the order:

                1.  The account number(s)  and document control
number(s) against which payments are to be made, and

                2.  The basis  for the finance office to charge
vouchered costs to each account number and document  control  number
if more than one account number and document control number  appear
on the order.

              (b)   Shall ensure that:

                1.  The account number(s)  and document control
number(s) on the delivery order are the same as those cited  on the
contract, and

                2.  The aggregate of  funds  on delivery orders  does
not exceed amounts obligated  on the contract for a particular
account number and document control number.

          (2)  The finance office shall use the information
provided in accordance with subparagraph 9.7c(l) and the
Contractor's voucher  to determine the account number(s) and
document control number(s) against which to charge amounts claimed
by the Contractor for the minimum.  The procedures in subparagraph
9.6e(4) apply when adjustments must be made to account numbers and
document control numbers obligated for the minimum amount.

          (3)  The procedures in subparagraph 9.6e(l) apply  for
funding each delivery beyond  the minimum with multiple
appropriations.  In these cases, the finance office  shall use the
ratio of funds obligated for  each account number on  the delivery
order as the basis for distributing invoice payments.

          (4)  The procedures in subparagraphs 9.6e(4) and 9.6e(6)
are applicable that the ratio of obligated funds coincides with
the value of the work benefiting each appropriation.

9.8   OTHER CONTRACT  TYPES.

The procedures below  apply to contracts other than those discussed
in paragraphs 9.6 and 9.7 where the work in the contract benefits
more than one appropriation:

      a.   The Project Officer and finance office shall follow the
procedures in subparagraphs 9.6e(1)  and 9.6e(6).

      b.   The finance office  shall use the ratio of  funds
obligated for each account number as the basis for distributing
invoice payments.

      c.   The procedures in subparagraphs 9.6e(4) and 9.6e(6) are
applicable to ensure that the ratio of obligated funds coincides
with the value of the work benefiting each appropriation.
                                  J - 6

-------
          APPENDIX K

CONTRACTS MANAGEMENT MANUAL

          CHAPTER 12

 RATIFICATION OF UNAUTHORIZED
         COMMITMENTS
              K-l

-------
K -  2

-------
CHAPTER 12 - RATIFICATION OF UNAUTHORIZED COMMITMENTS

                          TABLE OF CONTENTS

PARAGRAPH                                            PAGE
TITLE                                               NUMBER

12 .2  Purpose	 12-1

12 .3  Definition  	 12-1

12 . 4  Background	 12-1

12 . 5  Applicability  	 12-2

12 . 6  Policy 	 12-2

CHAPTER 12 - RATIFICATION OF UNAUTHORIZED COMMITMENTS

12.2   PURPOSE

     This chapter establishes policy  for use  in ratifying
unauthorized commitments. The procedures, approvals, and
documentation needed to ratify unauthorized commitments are set
forth in the EPA Acquisition Regulation, Chapter 15, Subchapter A,
Section 1501.602-3.

12.3   DEFINITION

     An unauthorized commitment  is  an illegal contract action,
taken by an EPA employee  who does not have Contracting Officer
authority, which commits  the Government for the expenditure of
funds in exchange for goods or services.

12.4   BACKGROUND

     a.  Unauthorized commitments constitute  violationsof
procurement regulations and may  result in adverse actions against
the individual involved,  and may contribute to the waste and abuse
of Agency resources.  Unauthorized  commitments also undermine the
roles and responsibilities of the Agency's Contracting Officers
and Project Officers.

      b.  EPA personnel should be aware that  unauthorized
commitments may only be ratified if the following conditions in
Section 1.602-3(c) of the Federal Acquisition Regulation are met:

          (1)  Supplies or services  have been  provided to and
accepted by the Government, or the  Government otherwise has
obtained or will obtain a benefit resulting from performance of
the unauthorized commitment;

          (2)  The ratifying official  could have granted authority
                              K - 3

-------
 to enter or could have entered into a contractual commitment at
 the time it was made and still has the authority to do so;

          (3)  The resulting contract would have otherwise been
 proper if made by an appropriate contracting officer;

          (4)  The contracting officer reviewing the unauthorized
 commitment determine the price to be fair and reasonable;

          (5)  The contracting officer recommends payment and legal
 counsel concurs in the recommendation, unless Agency procedures
 expressly do not  require such concurrence;

          (6)  Funds are available and were available at the time
 the unauthorized  commitment was made; and

          (7)  The ratification is in accordance with any other
 limitations prescribed under Agency procedures.

      c.  EPA personnel may have personal liability for
 unauthorized commitments that are not ratified.
 12.5.  APPLICABILITY

     This  chapter applies to all EPA personnel who, without
 authority  to do so, commit the Government to pay for items or
 services,  whether oral or written and without regard to dollar
 value.

 12.6   POLICY

      a. The policy of the EPA is to discourage unauthorized
 commitments to the maximum extent possible. Actions that
 contractually bind the Agency should only be made by officials
 with a proper warrant of contracting officer authority.

      b. Officials with contracting authority employed within the
 servicing  purchasing/contracting office in Headquarters, regions,
 laboratories or other field components should be consulted prior
 to any acquisition.  If there is an indication of intent by an
 individual to knowingly place an unauthorized commitment, rather
 than a lack of knowledge or understanding of regulations, or
 absent extenuating circumstances, the ratifying official  will
 inform the Inspector General in accordance with the EPA
Acquisition Regulation.  The Contracting Officer may recommend
 that the unauthorized commitment not be ratified if the violation
 is intentional or if it is a repeat violation by the same
 individual.  However,  the Contracting Officer shall take into
 consideration whether the contractor acted in good faith before
making the  recommendation.

     c.  Individuals responsible for unauthorized commitments may
                              K - 4

-------
have their certifications  of  authority  as  Project Officer, Work
Assignment Manager, Delivery  Order Officer, or Ordering Officer on
Blanket Purchase Agreements and Government Bankcard purchases
revoked by the Director, PCMD,  in accordance with Chapter 7 of the
CMM.  The Director, PCMD,  shall forward the names of individuals
whose certifications are so revoked to  the Office of the Inspector
General, and to the Division  Director to whom the individual
reports.  Individuals may  face  corrective  action, as detailed in
the Agency's Conduct and Discipline Manual (EPA Order 3120.1),
ranging from oral reprimand to  removal  based on the severity of
their offense.

      d. The Contracting Officer may recommend ratification of the
unauthorized commitment only  in the amount of the price which is
determined to be fair and  reasonable.   A cost and price analysis
may be used as a tool to determine whether the price is fair and
reasonable, or whether the Government could have received a better
price for the unauthorized commitments  through negotiation or
competition.  Any additional  amounts may be the responsibility of
the individual responsible for  the unauthorized commitment.
                                K - 5

-------

-------
          APPENDIX L

CONTRACTS MANAGEMENT MANUAL

          CHAPTER 18

        PROHIBITION ON
   DIRECTED SUBCONTRACTING
              L-l

-------
L -  2

-------
CONTRACTS MANAGEMENT MANUAL                      1900 CHG 17
                                                 11/06/97
       CHAPTER 18  -  PROHIBITION ON DIRECTED  SUBCONTRACTING
 Par
  #                  Title                               Page

18.1       Purpose 	18-1

18.2       Background 	18-1

18.3       Definition 	18-1

18.4       Roles  and Responsibilities 	18-2

18.5       Policy Against Directed Subcontracting 	18-3

18.6       Prohibited Actions 	18-3
                                18-i
                                L - 3

-------
CONTRACTS MANAGEMENT MANUAL                      1900 CHG 17
                                                 11/06/97

       CHAPTER 18 - PROHIBITION ON DIRECTED SUBCONTRACTING

18.1  PURPOSE

     This chapter provides policy regarding subcontracts under
EPA prime contracts.

18.2  BACKGROUND

     The prime contractor is paid by the Government to manage its
subcontracts and cannot abrogate this responsibility.  The
Government cannot intervene or interfere in how the prime manages
its subcontractor(s) .  Since EPA prime contractors have overall
authority and responsibility for all contract work, including
subcontract performance, no contractual relationship exists
between the Government and subcontractors,  i.e., no "Privity of
Contract."

18.3  DEFINITIONS

Allowable Technical Direction - is the clarification of ambiguous
or uncertain technical requirements to ensure efficient and
effective contractor performance within a contract's statement of
work which includes: providing guidance of a general nature to
the contractor necessary to perform the Statement of Work; and
commenting on and approving reports and other deliverables.
Technical direction will be issued in writing or confirmed in
writing within five (5) calendar days after verbal issuance.

Directed Subcontracting - is the improper practice of requiring
the prime contractor to use specific subcontractors, or the mere
suggestion of a specific subcontractor or task, unless otherwise
authorized in the contract, or by applicable Federal statutes,
rules and/or regulations.

Prime Contractor - is the total contractor organization or a
separate entity of it, such as an affiliate, division, or plant,
that performs its own purchasing.


Subcontractor - is any supplier,  distributor, vendor, or firm
that furnishes supplies or services to or for a prime contractor
or another subcontractor.

Team Subcontractor - is a subcontractor that was either submitted


                               18-1

                               L  - 4

-------
CONTRACTS MANAGEMENT MANUAL                      1900 CHG 17
                                                 11/06/97

by the prime contractor with the  initial proposal and approved by
the contracting officer in the award, or later became part of the
team by specific written contracting officer approval.
Subcontractors proposed after the initial award must be evaluated
and approved as specified in FAR  44.202.  Once approved, they are
considered to be a  "team subcontractor" and the prime contractor
needs no further approval  (contracts may have specific work plan
approval procedures that must be  followed) to propose and use the
team subcontractor  for that specific contract, work assignment,
or delivery order.

Unallowable Technical Direction - is the improper practice of:
changing the terms  and conditions agreed to in the contract,
work assignment, or delivery order which includes, but is not
limited to: increasing or decreasing the cost of the contract,
work assignment or  delivery order; adding or deleting work from a
contract, work assignment or delivery order; changing the period
of performance; creating an illegal contractual relationship such
as a personal services situation; authorizing the contractor to
start work prior to the contracting officer's issuance of the
work assignment, delivery order or contract; requiring work be
assigned directly to subcontractors/consultants; stopping work or
terminating the effort by the contractor.

18.4  ROLES AND RESPONSIBILITIES

     The contracting officer  (CO), before consenting to a
subcontract, reviews the request  and supporting data and
considers all factors listed in FAR 44.202-2, including:
whether the proposed subcontractor is on the debarred or
suspended list, technical need for services, compliance with the
prime contract's goals for subcontracting with small
disadvantaged business and women-owned business concerns,


adequacy of competition, responsibility of the proposed
subcontractor, proposed type, terms and conditions of the
subcontract, and adequacy and reasonableness of cost or price
analysis performed.

     The project officer  (PO) reviews the prime contractor's
request for subcontract consent and provides comments to the CO
on the technical need and appropriateness of the supplies or
services, the reasonableness of the subcontract estimate in terms
of the level of effort, and types and quantities of proposed


                               18-2

                              L - 5

-------
CONTRACTS MANAGEMENT MANUAL                      1900 CH6 17
                                                 11/06/97

other direct costs; location, duration, number of travelers and
purpose of proposed travel; skill level, labor mix, and direct
labor hours to be expended; and the capabilities of the proposed
subcontractor.

      See Chapter 7 of the Contracts Management Manual for a
description of the functions of COs and POs.

18.5  POLICY AGAINST DIRECTED SUBCONTRACTING

     Federal Acquisition Regulation (FAR) clause 52.244-5,
Competition in Subcontracting (Dec 1996), requires subcontracts
be awarded competitively, to the maximum extent practicable,  for
negotiated contracts above the simplified acquisition threshold.
Directed subcontracting encroaches upon the prime contractor's
responsibility to select and manage subcontractors.

     Directed subcontracting undermines the competitive
procurement process by denying the Government needed services at
the highest quality and best price, which is achieved through
competition.

     In addition, directed subcontracting may create an improper
personal services relationship between the Government and a
contractor in violation of FAR 37.104 and EPA Order 1901.1A.

18.6   PROHIBITED ACTIONS

     The Government's only direct contractual relationship is
with the prime contractor.  In addition to FAR 44.203, the
following activities by Agency personnnel involved in contract
management are prohibited:

     o Directing the prime contractor to subcontract with a
specific firm.  The mere suggestion of a particular firm is
improper,  unless otherwise authorized in the contract.

     o Directing that any portion of work should be performed by
subcontracting,  rather than the prime contractor, unless
otherwise authorized in the contract.

     o Providing technical direction to a subcontractor
without the knowledge of the prime contractor, unless otherwise
authorized in the contract.
                               18-3
                              L -  6

-------
CONTRACTS MANAGEMENT MANUAL                      1900 CHG 17
                                                 11/06/97

     o Directly monitoring a  subcontractor's technical
performance and financial expenditures to the exclusion of the
prime contractor.  Any technical or  financial subcontract problem
shall be brought to the attention of the prime contractor, who is
responsible for subcontract oversight, and documented in the
contract file.

     o Directing the contractor to subcontract beyond the
available appropriation or the end of the contract period of
performance.
                               L - 7
                               18-4

-------

-------