\ OFFICE OF INSPECTOR GENERAL
I REPORT OF AUDIT
COMPETITION IN CONTRACTING
AUDIT REPORT E1BMF3-24-0027-4100232
MARCH 31, 1994
Recycled/Recyclable
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al least 50% recycled fiber
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Inspector General Division Southern Audit Division
Conducting the Audit: Research Triangle Park, NC
Northern Audit Division
Chicago, IL
Headquarters Audit Division
Crystal City, VA
Region Covered: Agency-wide
Program Offices Involved: Office of Acquisition
Management, Wash., D.C.
Contracts Management
Division - Research Triangle
Park, N.C.
Contracts Management
Division - Cincinnati, Ohio
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
3 / /994
MEMORANDUM
SUBJECT: Competition in Contracting
Audit Report No. E1BMF3 -24-0027-4100232
OFFICE OF
THE INSPECTOR GENERAL
FROM: Elissa R. Karpf
Associate Assistant Inspector? General
for Acquisition and Assistance Audits
TO : Jonathan Cannon
Assistant Administrator
for Administration and Resources Management
Attached is the final report entitled "Competition In
Contracting." Our overall objective was to evaluate the adequacy
of competition for EPA's contracts that were awarded under full
and open competition procedures.
We found that the Agency generally awarded its competitive
procurements in accordance with applicable FAR requirements. For
the majority (72 percent) of EPA's competitively awarded
negotiated contracts that we reviewed, two or more proposals made
the competitive range. However, a significant percentage of
EPA' s contracts were awarded after receipt of only one
competitive proposal. For 140 contracts that we reviewed, 39
contract awards had only one proposal in the competitive range.
Repeat contracts in which the incumbent won the follow-on award
comprised a large majority of the total dollar value of these 39
contracts. As a result, EPA had less assurance that it received
the benefits of competition for a significant portion of its
competitively awarded contracts.
This audit report contains findings that describe problems
the Office of Inspector General (OIG) identified and the
corrective actions the OIG recommends. This report represents
the opinion of the OIG. Final determinations on matters in this
report will be made by EPA managers in accordance with
established EPA audit resolution procedures. Accordingly, the
findings described in this report do not necessarily represent
the final EPA position.
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Action Required
We have designated the Assistant Administrator for
Administration and Resources Management as the action official
for this audit. In response to the draft report, your office
provided responsive action plans and milestone dates for
correcting the findings. As a result, and in accordance with our
longstanding agreement outlined in EPA Order 2750, we find your
response to the draft report acceptable. Therefore, we are
closing this report in our tracking system as of this date.
Please track all action plans and milestone dates in the
Management Audit Tracking System.
Should you or your staff have any questions or need
additional information regarding this report, please contact
Mary M. Boyer, Divisional Inspector General for Audit, Southern
Division, at 404-347-3623 or John M. Bishop, Audit Manager, RTF
Regional Audit Office, Southern Division, at 919-541-1028.
Attachments
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EXECUTIVE SUMMARY
PURPOSE
Awarding an Environmental Protection Agency (EPA) contract under
competitive procedures does not always ensure that more than one
responsible offerer will compete for the award. The Agency has
consistently reported that it awarded most of its contracts through
full and open competition. EPA's Annual Report on Competition for
Fiscal Year (FY) 1992 reported that EPA obligated 96 percent of its
contract dollars through full and open competition. However, these
statistics address the procedures used and not the results of
procurement solicitations issued. We evaluated the results of these
solicitation actions to determine whether EPA's competitive process
actually resulted in competitively awarded contracts.
When contracts are awarded after receipt of only one competitive
proposal there is less assurance that the Government is receiving
the benefits of competition. These benefits include potentially
lower cost and higher quality service. We performed this audit to
determine if EPA was in fact achieving competition for its
competitively awarded contracts.
The objectives of the audit were to:
determine the extent of competition for EPA contracts
awarded under full and open competition procedures;
determine the reasons for any significant lack of
competition for EPA contracts; and
evaluate the activities of the Agency's competition
advocate program to promote competition for contracts
awarded under competitive procedures.
BACKGROUND
EPA and all other executive agencies are required by the Competition
in Contracting Act of 1984 (CICA) to conduct their procurements in a
way that obtains full and open competition. Federal Acquisition
Regulation (FAR) Part 6 prescribes the policies and procedures to
promote full and open competition in the acquisition process. Full
and open competition means that all responsible sources have an
opportunity to compete for the award of a contract. This can be
achieved with sealed bidding or by the acceptance of competitive
proposals (contracting by negotiation). Both FAR and CICA require
the sealed bid procurement method if four conditions exist. If -all
four conditions do not exist, an agency may use the negotiated
procurement process. EPA awards most of its contracts through the
negotiated process. According to the Federal Procurement Data
System report for FY 1992, EPA had awarded approximately 72 percent
of all its active contract dollars through the negotiated process.
CICA also requires all executive agencies to designate an advocate
for competition. EPA's Competition Advocate is organizationally
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located in the Office of Acquisition Management (OAM) and reports to
the Director of that Office. The Advocate's responsibilities as
mandated by CICA include (1) challenging barriers to and promoting
full and open competition in the agency's procurements, and (2)
reporting annually on his activities.
RESULTS-IN-BRIEF
We found that the Agency generally awarded its competitive
procurements in accordance with applicable FAR requirements. For
the majority (72 percent) of EPA's competitively awarded negotiated
contracts that we reviewed, two or more proposals made the
competitive range. However, a significant percentage of EPA's
contracts were awarded after receipt of only one competitive
proposal. For 140 contracts that we reviewed, 39 contract awards
had only one proposal in the competitive range. Repeat contracts in
which the incumbent won the follow-on award comprised a large
majority of the total dollar value of these 39 contracts. As a
result, EPA had less assurance that it received the benefits of
competition for a significant portion of its competitively awarded
contracts. The maximum potential value of the 39 contract awards in
which only one competitive proposal was received was approximately
$327 million or 22 percent of the total maximum potential value of
the contracts in our sample.
Our audit identified several factors that contributed to the
limiting of competition for some EPA contracts. Often, a lack of
competition for a particular solicitation could not be attributed to
any single factor. In some instances, several conditions apparently
existed in combination to limit the number of proposals received for
a particular solicitation. Many of these conditions favored
incumbent contractors. When these conditions were present, other
firms were reluctant to submit proposals since they perceived a
remote chance of winning the award which did not warrant the cost of
preparing a proposal. Some of these conditions included: large,
level of effort (LOE) contracts with diverse statements of work
(SOW); technical evaluation criteria that placed heavy emphasis on
personnel experience and availability; and industry perceptions that
an incumbent contractor perceived to be performing satisfactorily
could not be defeated.
When competition is limited, the Government may lose opportunities
to obtain lower prices and increase the productivity and the
effectiveness of its programs. The most important benefits of
competition can often be the improved ideas, designs, technology,
delivery, or quality of products and services that potential
contractors are motivated to produce or develop to obtain Government
contracts. The chance of winning a Government contract, or the
threat of losing a subsequent contract award similar to one being
performed, provides an incentive for greater efficiency and
effectiveness.
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The Agency has started several actions to eliminate or mitigate many
of the conditions cited in this report that contribute to a lack of
competition. Large contracts have been split into smaller
procurements in several instances in order to increase
competition. Some program offices, in order to increase responses
to their solicitations, are presenting information about their
future procurement needs to the contracting community. EPA plans to
start regularly publishing annual acquisition plans in the Commerce
Business Daily (CBD). In addition, during our fieldwork OAM
collected statistical data similar to that 'presented in this report
to assess the extent of competition for contracts awarded under full
and open competition procedures. Continuation of these actions with
increased emphasis on monitoring the results of contract award
activities can further increase the competitiveness of EPA's
procurement system. Increased competition for its contracts will
benefit the Agency by encouraging (1) reasonable prices for its
contracted services and (2) contractors to provide high quality
services and products.
PRINCIPAL FINDINGS
COMPETITION WAS OBTAINED FOR SUPERFUND AND OAOPS CONTRACTS
Solicitations for contract support to the Superfund program and
Office of Air Quality and Planning Standards (OAQPS) received
substantially more proposals than other solicitations we reviewed.
The Agency split some of the multi-tasked jobs for Superfund
Emergency Response Cleanup Services (ERCS) contracts into separate
tasks and awarded them as separate contracts. This action resulted
in an increase in the number of responses to the solicitations for
these Superfund contracts. We believe a major reason for the
increased competition for OAQPS contracts is the method of
solicitation used for some OAQPS contracts. For several of these
solicitations, multiple contracts were awarded from each
solicitation. In two of these solicitations, the SOWs were divided
into separate, distinct sections and, for each section, two
contracts were to be awarded. We believe these types of
solicitations generated more competition since potential offerers
knew that a strong incumbent contractor could not win all of the
work.
LARGE, DIVERSE STATEMENTS OF WORK MAY LIMIT COMPETITION
The type of contract frequently awarded by EPA may have contributed
to a lack of competition. EPA has long relied on large, LOE
contracts with diverse SOWs. One way large, diverse contracts can
limit competition is that small and medium sized firms can not alone
handle the sheer diversity or volume of work required by these
contracts. The process of trying to assemble a qualified team of
subcontractors can be difficult for non-incumbent firms. In some
situations, the incumbent contractor may have already assembled the
best qualified subcontractors available.
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TECHNICAL EVALUATION CRITERIA CONTAINED IN REQUESTS FOR PROPOSALS
CAN LIMIT COMPETITION
Some Requests for Proposals (RFP) contained technical evaluation
criteria and scoring plans which emphasized criteria that favored
incumbent contractors and made it difficult for non-incumbent firms
to compete. Non-incumbent firms were reluctant to submit proposals
when RFPs' technical evaluation scoring plans awarded a high
percentage of their total points for personnel experience and
availability of personnel. Non-incumbent firms believed incumbent
personnel's experience would be ranked higher than their own
experience. Other factors related to this criteria also contributed
to limited competition. These factors included RFPs that asked
offerers to provide identities of and commitment letters from a
large number of key personnel and sometimes non-key personnel.
INDUSTRY PERCEPTIONS ABOUT THE STATUS OF INCUMBENT CONTRACTORS
LIMITED COMPETITION
Industry perceptions regarding the status of incumbent contractors
played an important role in the degree of competition for EPA
contracts. These perceptions concerning incumbent status included
such issues as (1) performance of the incumbent contractor and (2)
EPA preference to retain incumbent contractors. Prospective
offerers were especially reluctant to compete against an incumbent
for a follow-on contract when they believed the incumbent's
performance on the existing contract was satisfactory or better.
Almost half of the potential contractors we spoke with who had
received solicitations issued by the Contracts Management Division
(CMD)-Cincinnati stated they would not submit a proposal against an
incumbent contractor. For potential contractors we interviewed who
had received solicitations issued by CMD-Research Triangle Park
(RTP) and were reportedly capable of performing the work solicited,
the most common reason given for not submitting a proposal, was the
strength of the incumbent contractor.
COMPOSITION OF TECHNICAL EVALUATION PANELS CREATES RISK OF
PARTIALITY IN EVALUATION RECOMMENDATIONS
Technical evaluation panels (TEP) evaluate and score proposals
submitted in response to EPA solicitations. The composition of the
TEPs created an appearance of partiality and the potential for bias
in the award of follow-on contracts. TEPs for follow-on contract
awards were often chaired by Project Officers (PO) who administered
the prior contracts and were comprised entirely of officials from
the program offices acquiring the contract services. When the
panels are comprised of personnel who worked extensively with the
incumbent contractor, there is at least a chance that panel members'
personal experiences with and knowledge of the incumbent contractor
could influence the scoring of technical proposals.
IV
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COMPETITION ADVOCACY PROGRAM NEEDS TO BE STRENGTHENED
The Agency's Competition Advocacy Program has been successful in
increasing competition for some types of contracts that had not
experienced competition in the past. However, a major priority of
the Program concentrated on the method of procurement instead of the
results of the procurement method. Program goals were established
and monitored to ensure that a high percentage of Agency contracts
were awarded through competitive procedures as opposed to non-
competitive procedures. Accordingly, the Program has been
successful in limiting the number of sole-source awards. However,
similar monitoring was not in place to determine the extent of
actual competition for contracts awarded under competitive
procedures. The Agency could make the Competition Advocacy Program
a more effective tool for improving EPA's competitive procurement
process by increasing its monitoring and evaluation of the results
of competitive procedures. Increased monitoring in this area could
help identify and mitigate the various factors that limit the number
of proposals received for competitively awarded contracts.
AGENCY ACTIONS TO DATE
In 1986 and 1992 reports, the Office of Inspector General (OIG)
reported limited competition on Superfund contracts. EPA initiated
several proactive measures and significantly increased vendor
responses to Superfund RFPs. Additionally, near the completion of
our fieldwork in September 1993, the Director, OAM issued a
memorandum that outlined reasons for limited responses to EPA
competitive solicitations and possible solutions to increase the
number of responses to these solicitations.
RECOMMENDATIONS
EPA needs to take several actions to increase the number of
competitive proposals received for its competitive solicitations.
Some of these actions will require coordinated efforts between the
program offices receiving the contract services and the contracting
offices awarding the contracts. These actions include conducting
evaluations of existing large contracts for possible splitting of
the services into smaller separate contracts and making program
offices' future contracting plans available to the contracting
community. EPA should also expand the focus of its Competition
Advocacy Program to evaluate, monitor, and increase the extent of
actual competition obtained for competitively awarded contracts.
AGENCY COMMENTS
The Agency generally agreed with the report's findings and
recommendations. The Agency's complete response is included as
Appendix I to the report and our specific comments to their response
is included as Appendix II.
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VI
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TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY i
CHAPTERS
1 INTRODUCTION 1
PURPOSE 1
BACKGROUND 1
SCOPE AND METHODOLOGY 3
PRIOR AUDIT COVERAGE 7
2 USE OF COMPETITIVE AWARD PROCEDURES DID NOT ALWAYS
RESULT IN COMPETITIVE AWARDS 9
COMPETITION WAS OBTAINED FOR SUPERFUND AND OAQPS
CONTRACTS 9
ABSENCE OF COMPETITION FOR SOME AGENCY CONTRACT
AWARDS 11
BARRIERS TO COMPETITION RESULT IN LIMITED NUMBER OF
PROPOSALS 14
EPA NOT ASSURED THAT IT RECEIVED THE BENEFITS OF
COMPETITION 15
CONCLUSION 15
RECOMMENDATIONS 16
AGENCY COMMENTS AND OIG EVALUATION 16
3 CONDITIONS THAT LIMIT COMPETITION EXIST IN THE
PROCUREMENT ENVIRONMENT 17
BACKGROUND 17
THE SIZE AND DIVERSITY OF LOE CONTRACT SOWs MAY
LIMIT COMPETITION 18
RFP EVALUATION AND SCORING CRITERIA CAN LIMIT
COMPETITION 24
INDUSTRY PERCEPTIONS ABOUT THE STATUS OF INCUMBENT
CONTRACTORS SOMETIMES LIMIT COMPETITION 34
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COMPOSITION OF TECHNICAL EVALUATION PANELS CREATES
RISK OF PARTIALITY IN EVALUATIONS 40
CHAPTER CONCLUSION 41
RECOMMENDATIONS 42
AGENCY COMMENTS AND OIG EVALUATION 43
4 COMPETITION ADVOCACY PROGRAM CAN BE STRENGTHENED TO
PROMOTE COMPETITION FOR CONTRACTS AWARDED UNDER FULL
AND OPEN COMPETITION PROCEDURES 45
BACKGROUND 45
EPA DID NOT IDENTIFY AND REPORT COMPETITIVELY
AWARDED CONTRACTS FOR WHICH ONLY ONE PROPOSAL
WAS RECEIVED 47
ASSOCIATE COMPETITION ADVOCATES' AND COMPETITION
COORDINATORS' ROLES NEED TO BE EXPANDED 48
EPA'S MARKET RESEARCH PROGRAM NEEDS IMPROVEMENT.... 50
SCOPE OF FUNCTIONAL REVIEWS SHOULD BE EXPANDED 53
POST-AWARD ACTIONS NEEDED WHEN ONLY ONE PROPOSAL
IS RECEIVED IN RESPONSE TO A SOLICITATION 54
AGENCY ACTIONS 56
CONCLUSION 57
RECOMMENDATIONS 58
AGENCY COMMENTS AND OIG EVALUATION 59
APPENDICES
APPENDIX I : AGENCY RESPONSE 61
APPENDIX II: OIG COMMENTS ON THE ASSISTANT
ADMINISTRATOR'S RESPONSE TO THE
DRAFT REPORT 93
APPENDIX III: GLOSSARY OF ACRONYMS AND
ABBREVIATIONS 97
APPENDIX IV: PRIOR OIG/GAO REVIEWS WITH CONTRACT
COMPETITION FINDINGS 99
APPENDIX V: SCHEDULE OF RTP FY 1991-92 CONTRACTS
REVIEWED 103
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APPENDIX VI: SCHEDULE OF CINCINNATI FY 1991-92
CONTRACTS REVIEWED 105
APPENDIX VII: SUPERFUND FY 1991 AND 1992 CONTRACTS
REVIEWED 109
APPENDIX VIII: COMPETITION HISTORY FOR RTP CONTRACTS
THAT RECEIVED ONLY ONE PROPOSAL Ill
APPENDIX IX: COMPETITION HISTORY FOR CINCINNATI
CONTRACTS THAT RECEIVED ONLY ONE
PROPOSAL 113
APPENDIX X: SUMMARY OF COMPANY INTERVIEW
RESULTS 115
APPENDIX XI : DISTRIBUTION 117
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CHAPTER 1
INTRODUCTION
PURPOSE
Since 1987, EPA has reported that it has awarded the vast majority
of its contracts through full and open competition procedures. For
example, in its Annual Report on Competition for Fiscal Year (FY)
1992, EPA reported that it obligated 96 percent of its contract
dollars through full and open competition. However, these
statistics address the procedures used (full and open v. sole source
acquisition) and not the results of those procedures. Awarding a
contract under competitive procedures does not always ensure that
more than one responsible offerer will compete for the award.
Recent Office of Inspector General (OIG) surveys and audits of
Office of Research and Development (ORD) contracting activities
found that often only one acceptable proposal was submitted for
services procured for ORD Laboratories. This lack of competition
for ORD services was prevalent when the services were procured under
a previous contract(s) and the services were being re-procured. We
performed this audit to determine whether this lack of competition
was an EPA-wide problem. The objectives of the audit were to:
determine the extent of competition for EPA contracts;
determine the reasons for lack of competition for EPA
contracts; and
evaluate the activities of the Agency's Competition
Advocacy Program to promote competition for contracts
awarded under competitive procedures.
BACKGROUND
EPA and all other executive agencies are required by the Competition
in Contracting Act of 1984 (CICA) to conduct their procurements in a
way that obtains full and open competition. Federal Acquisition
Regulation (FAR) Part 6 prescribes the policies and procedures to
promote full and open competition in the acquisition process. Full
and open competition means that all responsible sources have an
opportunity to compete for the award of a contract. The CICA
requires that agencies specify their needs in a manner designed to
achieve full and open competition for procurements. To ensure
competition, agencies must, among other things, give public notice
of intent to award contracts and not include unduly restrictive .
requirements in their solicitation requirements or statements of
work (SOW).
The CICA recognizes that noncompetitive awards may arise from
procurements that used competitive procedures. The CICA requires
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agencies to maintain and report information on procurements
resulting in the submission of a bid or proposal from only one
responsible source. These procurements are referred to as
"noncompetitive procurements using competitive procedures."
Moreover, the Environmental Protection Agency Acquisition Regulation
(EPAAR) recognized potential problems with the negotiated
procurement process when only one proposal makes the competitive
range. EPAAR 1515.609 (c) states:
When only one offer is determined to be in the competitive
range, the Contracting Officer shall review the
solicitation document to assure that it did not unduly
restrict competition. The competitive range determination
shall include a discussion of the relevant aspects of the
solicitation.
However, one acceptable proposal in the competitive range does not,
in our opinion, constitute adequate competition. Competition exists
when there is a "rivalry between two or more businesses striving for
the same customer or market.1" FAR 15.804-3(b)(1) recognizes
adequate price competition when:
(i) Offers are solicited; (ii) Two or more responsible
offerers that can satisfy the Government's requirements
submit priced offers responsive to the solicitation's
expressed requirements; and (iii) These offerers compete
independently for a contract to be awarded to the
responsible offerer submitting the lowest evaluated price.
The same criteria can be applied to competition, in general. In the
absence of at least two responsive proposals, the competitive
control over quality and price is diminished.
Two procurement methods used for meeting the requirement for full
and open competition are sealed bidding and competitive proposals
(contracting by negotiation). Both the CICA and FAR require sealed
bidding when four conditions are present. If sealed bidding is not
appropriate the Government may request competitive proposals. In
sealed bidding the Government evaluates the bids without discussion
and awards the contract to the responsible source whose bid conforms
to the requirements and is the most advantageous to the Government
considering only price and other price-related factors. In
contrast, contracting by negotiation permits bargaining, and usually
affords offerers an opportunity to revise their proposals before
award of the contract. Most contracts that we reviewed were awarded
through negotiated procedures as opposed to sealed bidding.
1 Definition obtained from Webster's II New Riverside
University Dictionary, Copyright 1984, 1988 by Houghton Mifflin
Company.
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The Negotiated Procurement Process
Contracting by negotiation involves several steps. First, EPA
determines its acquisition needs. The public is then notified of
the upcoming solicitation in the Commerce Business Daily (CBD). The
specifics of the procurement are communicated to potential offerers
through a Request for Proposal (RFP). The RFP includes instructions
to offerers on how to prepare their proposal (cost and technical
proposals) and the evaluation factors for the award. After
proposals are received, a technical evaluation panel (TEP) evaluates
the technical proposals against the stated RFP criteria and assigns
each proposal a score. Based on evaluations of the technical and
cost proposals, the contracting officer (CO) prepares a competitive
range determination that identifies those proposals that have a
reasonable chance for award. If necessary, for those proposals
determined to be in the competitive range, the contracting
specialist (CS) or CO will ask these companies questions (called
interrogatories) concerning their technical proposals. The TEP
reviews the answers and revises each company's technical score, if
warranted. EPA holds discussions with all firms remaining in the
competitive range and requests best and final offers. A source
selection board prepares a source selection document recommending
award to one company. The source selection official, a CO or higher
level official, then approves the selection and the CO awards the
contract.
Competition Advocate
To help ensure that competition in Government contacting is
achieved, the CICA requires that every executive agency designate an
advocate for competition. The competition advocate's duties
include: (1) challenging barriers to and promoting full and open
competition; (2) reviewing the procurement activities of their
agency; (3) identifying and reporting actions taken to achieve
competition and conditions that unnecessarily restrict competition;
and (4) preparing an annual report describing the advocate's
activities, new initiatives to promote competition, and barriers to
full and open competition that remain. According to the Agency's FY
1992 Annual Report on Competition, EPA obligated $1,307,843,000
contract dollars (excluding dollars not available for competition),
of which $1,260,565,000 (96 percent) were awarded using competitive
procedures.
SCOPE AND METHODOLOGY
We conducted our audit work between October 1992 and September 1993.
We reviewed contracts awarded by the Contract Management Division
(CMD) in Research Triangle Park (RTF), N.C. and the CMD in
Cincinnati, Ohio. We also reviewed Superfund contracts awarded by
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the Superfund/RCRA Procurement Operations Division in Washington,
D.C., and selected Regional Offices2.
To determine the extent of competition for contracts, we reviewed
contract files to identify the number of proposals received and the
number of proposals that made the competitive range for negotiated
procurements. Most contracts we reviewed were awarded in FY 1991
and 1992, although we also reviewed contracts awarded in FY 1990 and
1993. We only reviewed contracts awarded under full and open
competition procedures. We reviewed competitively awarded small
business set-aside contracts at CMD-Cincinnati. We did not review
Contract Laboratory Program contracts for analytical services
awarded at CMD-RTP since these contracts and that program have been
audited in several prior OIG audits. The majority of contracts that
we reviewed were awarded through the negotiated (competitive
proposals) procurement method.
CMD-RTP competitively awarded 79 contracts totaling almost $800
million in potential value in FY 1991 and 1992 (excluding
competitive small business set-asides and Contract Laboratory
Program contracts). We selected 453 of these 79 for review. We
randomly selected 43 contracts and judgmentally selected two other
contracts because of their large dollar value. The 45 contracts we
reviewed included 44 negotiated awards totaling $608,859,368 and 1
sealed bid award totaling $51,000. We also selected seven contracts
awarded in FY 1993 that represented the entire universe of RTF FY
1993 competitive awards at the time of our sample selection in April
1993. The seven FY 93 contracts totaled approximately $55 million
in maximum potential value. All seven FY 93 awards were negotiated
awards. Further, we reviewed four ORD contracts awarded by CMD-RTP
in FY 1990 that we identified during OIG Surveys of ORD Laboratory
Contracting Activities.
CMD-Cincinnati competitively awarded 102 contracts totaling almost
$334 million during FY 1991 and 1992. We reviewed all of these
contracts. The 102 FY 1991 and 1992 contracts included 78
negotiated awards totaling $328,696,116 and 24 sealed bid awards
totaling $5,224,512. We also reviewed five contracts totaling about
$41,000,000 awarded during the first quarter of FY 1993 by CMD-
2 The results of our review of Superfund contracts were
previously reported in Special Review Report No. E1SFF3-11-0020-
4100111 dated December 7, 1993.
3 We actually selected 46 contract awards for review, but
reviewed 45 since one file was not located. We were informed in
the response to the draft report that the missing contract file
was transferred to Region 6 on January 12, 1993, for
administration purposes.
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Cincinnati. The five FY 1993 contracts included 4 negotiated awards
totaling $40,883,622 and 1 sealed bid award totaling $183,710.
The Superfund/RCRA Procurement Operations Division and regional
offices awarded 52 contracts totaling approximately $1,065,820,000
in FY 1991 and 1992 and the first six months of FY 1993. This
includes non-competitively awarded contracts (e.g., sole-source
acquisitions). We reviewed a judgmental sample of 19 Superfund
contracts that were awarded under competitive procedures. These 19
contracts included 18 FY 1991 and 1992 negotiated awards totaling
approximately $533.1 million and one FY 1993 sealed bid award
totaling approximately $1.4 million.
We did not review contracts awarded by the Headquarters Procurement
Operations Division (HPOD). The Competition Advocate's analysis of
EPA competition conducted in August 1993 showed that for FY 1992 and
1993 to date, HPOD awarded 16 contracts and in two instances only
one proposal made the competitive range.
The following table shows the number and dollar value of FY 1991 and
1992 awards we reviewed by location.
Number and Value of FY 91-92 Contracts Reviewed
Location
RTP
Cincinnati
Superfund
Totals
Number Reviewed
45
102
18
165
Dollar Value
$608, 900, 000
$333, 900, 000
$533, 100, 000
$1,475, 900, 000
We also reviewed the CICA, the FAR, the EPAAR, Agency guidance, and
selected General Accounting Office (GAO) award decisions as they
related to full and open competition and the objectives of our
audit.
To identify reasons for lack of competition, we performed more
detailed reviews of those contract awards in which only one proposal
made the competitive range. This work was performed for contracts
awarded by the Cincinnati and RTP CMDs only. We did not perform
additional audit steps for Superfund contracts since these contracts
exhibited adequate competition. This additional work included
reviewing current award documents and prior award documents for
follow-on contracts. We reviewed contract SOWs, RFPs, TEP reports,
competitive range determinations/ source selection documents, Office
of General Counsel (OGC) review comments, and other correspondence
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in the contract file. We also interviewed COs, CSs, and project
officers (POs).
To determine reasons for limited competition we also contacted
officials from firms who chose not to submit proposals for CMD-RTP
and CMD-Cincinnati issued solicitations. We telephonically
interviewed 6G company representatives and conducted on-site
interviews with representatives from 20 companies. We judgementally
selected companies to interview from those who submitted
correspondence to EPA stating that they were not submitting a
proposal. We also selected companies who attended pre-proposal
conferences but did not submit proposals.
A primary internal control process for encouraging competition in
contracting is the Competition Advocacy Program. The Competition
Advocate reviews Agency contracting actions and reports annually on
the results of these reviews and other activities undertaken to
promote competition. To assess the Competition Advocacy Program and
related internal controls, we interviewed procurement officials in
the Office of Acquisition Management at Washington, D.C. and the
Contracts Management Divisions at RTP, NC and at Cincinnati, Ohio.
We reviewed recent Quality Assurance Reviews, Functional Reviews
completed by the Competition Advocate, Annual Reports on Competition
and the Federal Procurement Report.
We performed our audit in accordance with the Standards for Audit of
Governmental Organizations, Program, Activities, and Functions (1988
Revision), issued by the Comptroller General.
Certain data used in this report was extracted from EPA's Contract
Information System (CIS). The CIS data was not an integral part of
this audit and its reliability was not crucial to accomplishing the
objectives of this audit. Accordingly, no audit tests were
performed to evaluate the adequacy of manual or automated controls
for CIS or the validity of the data maintained by this system.
Therefore, we cannot and do not attest to the accuracy or integrity
of the CIS data used in this report.
However, we did complete audit steps to determine whether EPA
complied with certain Federal procurement reporting requirements.
This work included limited discussions with EPA officials to
determine whether CIS contained the data fields necessary to comply
with these reporting requirements.
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PRIOR AUDIT COVERAGE
Several prior OIG reviews have identified instances where little or
no competition was obtained for EPA contracts awarded under full and
open competition procedures. These include audits of Superfund
contracting activities as well as audits and reviews of ORD
contracting activities. These reviews identified a number of
factors that limited competition for certain agency contracts. The
large size of EPA contracts was often noted as a factor in limiting
competition. Factors related to RFP technical evaluation criteria
and scoring methods were also found to limit competition. These
factors included: (1) the excessive number of evaluation points
awarded in the area of personnel qualifications; (2) requests for
large numbers of key personnel; (3) requests for letters of
commitment to show availability of key personnel; and (4) the
extensive knowledge of EPA operations gained by incumbent
contractors in the performance of service contracts.
These prior OIG reviews and their pertinent findings are described
in Appendix IV to this report.
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CHAPTER 2
USE OF COMPETITIVE AWARD PROCEDURES DID NOT ALWAYS RESULT IN
COMPETITIVE CONTRACT AWARDS
The Agency reported awarding a majority of its FY 1991 and 1992
contracts through competitive procedures. We found that the Agency
generally awarded its competitive procurements in accordance with
applicable FAR requirements. In 72 percent of the FY 1991 and 1992
negotiated contract awards we reviewed, these procedures resulted in
the receipt of two or more competitive proposals in each award. In
28 percent of the FY 1991 and 1992 negotiated awards we reviewed,
only one proposal made the competitive range in each award. In 12
percent of the sealed bid awards we reviewed, only one bid was
submitted for the award.4 The limited response for some of EPA's
solicitations was attributable in part to conditions related to
these solicitations that favored incumbent contractors. These
conditions included: LOE contracts with large, wide-ranging SOWs;
technical evaluation criteria that placed heavy emphasis on
personnel experience and availability; the status of the incumbent
contractor; and technical evaluation panels comprised of program
officials who worked with the incumbent contractor. As a result,
EPA was not assured that it received the benefits of competition for
some of its contracts awarded under competitive procedures.
COMPETITION WAS OBTAINED FOR SUPERFUND AND OAQPS CONTRACTS
Competition was obtained for many contracts that we reviewed.
Solicitations for contract support to the Superfund program and
Office of Air Quality and Planning Standards (OAQPS) received
substantially more proposals than other solicitations we reviewed.
Prior OIG audits found that a small number of proposals were
submitted for Superfund's Emergency Response Cleanup Services (ERCS)
contracts. In response to these audits the Agency split some of the
multi-tasked jobs for these contracts into separate tasks and
awarded them as separate contracts. This action resulted in an
increase in the number of responses to the solicitations for these
Superfund contracts.
Special Review Report No. E1SFF3-11-0020-4100111 entitled
Competition in Superfund Contracting, dated December 7, 1993,
reported the results of our review of 19 competitively awarded
Superfund contracts. Eighteen were negotiated awards and one was a
sealed bid award. Two or more proposals made the competitive range
in 17 of the 18 negotiated awards.
4 Sealed bid awards are made to the lowest bidder.
competitive range is not determined for these awards.
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Our review noted that increased competition was obtained as a result
of the Superfund program's effort to remove restrictive requirements
from previous SOWs and evaluation criteria. In many instances,
multi-tasked ERCS contracts were divided into separate tasks and
awarded as separate contracts. For example, Region 4 recently
awarded five different mini-ERCS contracts valued at $120 million by
separating the tasks of the previous single, large contract.
We reviewed 13 contracts (12 FY 1991 and 1992 awards and one FY 1993
award) awarded by the CMD-RTP to support OAQPS. We noted that two
or more proposals made the competitive range for all 13 contracts.
The number of proposals received in response to OAQPS RFPs ranged
from 2 to 10 proposals. The number of proposals in the competitive
range ranged from two to seven proposals.
We believe a major reason for the increased competition for OAQPS
contracts was the method of solicitation used for some OAQPS
contracts. For three solicitations that we reviewed, multiple
contracts were awarded from each solicitation. In one case the
total hours required (after set-asides for small business) were
split into four equal parts. Ten firms submitted proposals for this
solicitation. Seven firms made the competitive range and four of
these firms were selected for award.
In two of the three solicitations, the SOWs were divided into
separate, distinct sections and, for each section, two contracts
were to be awarded. These solicitations contained clauses that
stated that one contractor could not win both contracts for the same
SOW section. Competitive range determinations were made for each
SOW section. At least three proposals made the competitive range
for each SOW section for these two solicitations. We believe these
types of solicitations generated more competition since potential
offerers knew that a strong incumbent contractor could not win all
of the work.
The use of multiple award solicitations with exclusion of sources
may have also helped generate competition for OAQPS work that was
awarded under the more traditional solicitation approach; i.e., one
RFP with one SOW resulting in one contract award. We reviewed six
of these "craditional" solicitations for OAQPS work. The number of
proposals received for each of these solicitations ranged from two
to five proposals and at least two proposals made the competitive
range for each solicitation. In addition, five of these
solicitations were for repeat service, and non-incumbent contractors
won two of these awards.
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ABSENCE OF COMPETITION FOR SOME AGENCY CONTRACT AWARDS
We found that in 28 percent of the FY 1991 and 1992 negotiated
contract awards we reviewed, only one proposal made the competitive
range in each award. The following table shows the extent of
competition for competitive negotiated contract awards for FY 1991
and 1992. Since RTF experienced substantially more competition for
OAQPS contracts than other program office contracts, we segregated
our RTF results into non-OAQPS contracts and OAQPS contracts for
illustration purposes. For contracts awarded by CMD-Cincinnati
there was no significant difference in competition among different
program offices.
Results Of Review Of FY 91-92 Negotiated Contract Awards
Location
RTF Non-
OAQPS
RTF
OAQPS
Only
Cine.
S/Fund
Totals
Contract
Awards
Reviewed
($ in
Millions)
No.
32
12
78
18
140
Dollar
Value
$462 .1
$146.8
$328.7
$533.1
$1470.7
Contract Awards With Only One
Proposal in the Competitive Range
($ in Millions)
No.
13
0
25
1
39
Percent
of Those
Reviewed
41%
0%
32%
6%
28%
Dollar
Value
$217.5
$0
$106 .1
$3.5
$327.1
Percent
of
Dollars
Reviewed
47%
0%
32%
1%
22%
Although negotiated awards represented the large majority of the
total contracts in our sample, both in number of awards and maximum
potential value of the awards, our sample included some sealed bid
contracts. We reviewed 25 FY 1991 and 1992 sealed bid awards.
These 25 contracts totaled approximately $5.3 million in maximum
potential value. In 3 of the 25 (12 percent) only one bid was
submitted in response to the solicitation. The total value of the 3
contracts in which only one bid was submitted was $343,000.
The following table shows the results of our review of sealed bid
awards.
11
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Results Of Review Of FY 91-92 Sealed Bid Contract Awards
Location
RTF
Cine .
S/Fund
Totals
Total Reviewed
($ in millions)
No.
1
24
0
25
Value
$.05
$5.22
$0
$5.27
Only One Bid Received
No.
0
3
0
3
Value
$0
$.34
$0
$.34
Appendices V, VI, and VII provide a complete list of all FY 1991 and
1992 CMD-RTP, CMD-Cincinnati, and Superfund contracts reviewed, the
number of proposals received and the number of proposals that made
the competitive range for each contract award.
Our review of FY 1993 awards was limited since few FY 1993 contracts
had been awarded at the time we performed our fieldwork. EPA
typically awards a large percentage of its contracts at or near the
end of the fiscal year. However, our limited sample and competition
statistics compiled by the Competition Advocate suggest that EPA
experienced similar levels of competition for the FY 1993 awards.
We reviewed a total of 11 negotiated FY 1993 contract awards. In
four of these contract awards only one proposal made the competitive
range in each award. Competition statistics obtained by the
Competition Advocate in August 1993 showed that for FY 1992 and FY
1993 to date, EPA competitively awarded 173 contracts and in 53 (31
percent) of the awards only one proposal made the competitive range.
Repeat Awards to Incumbent Contractors Accounted For The Majority of
Awards That Lacked Competition.
Our analysis of the 39 negotiated awards in which only one proposal
made the competitive range showed that, based on the dollar value of
the contracts, a large majority were repeat contracts in which the
incumbent won the follow-on award. The 39 contracts in which only
one proposal made the competitive range totaled approximately $327.1
million in maximum potential value. Nineteen of these contracts
were awarded to incumbent contractors. The maximum potential value
of these 19 contracts was approximately $307.2 million.
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The following table categorizes these 39 contracts as to repeat
contracts awarded to incumbents, those awarded to non-incumbent
contractors, or first-time contract awards.
Analysis of FY 1991 and 1992 Awards With Limited Competition
Location
RTF
Cine.
S/Fund
Totals
Awards With Only One Proposal in the Competitive
Range ($ = millions)
Total in
Our Sample
No.
13
25
1
39
Value
$217.5
$106.1
$3.5
$327.1
Repeat
Award Went
To the
Incumbent
No.
10
9
0
19
Value
$213 .3
$93 .9
$0
$307.2
Repeat
Award Went
To Non-
Incumbent
No.
0
1
1
2
Value
$0
$-9
$3.5
$4 .4
First-Time
Award
No.
3
15
0
18
Value
$4 .2
$11.3
$0
$15.5
The preceding table shows that in 19 cases the incumbent contractor
submitted the only proposal that made the competitive range and was
subsequently awarded the contract. (In 11 of these 19 awards the
incumbent contractor was the only company to submit a proposal.
These 11 contracts totaled approximately $216 million in maximum
potential value.)
Although the number of first-time awards that experienced a lack of
competition was relatively high, 18 out of 39 cases, the dollar-
value of these contracts was not large. Twelve of these 18
contracts had maximum potential values under $1 million.
We reviewed the extent of competition for predecessor contracts to
the 11 awards in which the incumbent contractor submitted the only
proposal. In some cases we found that fewer proposals were received
with each succeeding generation of a follow-on contract. For
example, on one Cincinnati contract we reviewed, the incumbent had
provided the requested services for more than 10 years. The
original award received three proposals. The first follow-on award
received two proposals. The most recent follow-on award received
one proposal -- from the incumbent. We also noted follow-on
contracts that had not experienced competition for a number of
years. One laboratory support follow-on contract at RTF had only
received one proposal (from the incumbent) for the last three
contract awards. The incumbent had performed these services for 18
years.
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Appendixes VIII and IX provide schedules of the procurement history
for those contract awards in our RTF and Cincinnati samples that
only received one proposal in response to the solicitation.
The FY 1991 and 1992 sealed bid awards we reviewed were primarily
first-time awards and generally were awarded after receipt of two or
more bids. Of the 25 sealed bid contract awards we reviewed, only
one award represented repeat contract services. The three sealed
bid awards in which only one bid was submitted were all first-time
awards and were relatively small contracts. The dollar value of
these three contracts ranged from $59,850 to $173,368.
BARRIERS TO COMPETITION RESULT IN LIMITED NUMBER OF PROPOSALS
Through discussions with over 80 potential offerers and review of
RTP and Cincinnati contract files we identified several conditions
that contributed to a lack of competition for some EPA
solicitations. These conditions varied from case to case and
sometimes existed in combination to limit the competition for a
particular solicitation. We identified three major conditions that
limited competition: (1) LOE contracts with large, diverse SOWs; (2)
RFP personnel requirements that placed heavy emphasis on experience
and availability; and (3) industry perceptions about the status of
incumbent contractors. We also noted that technical evaluation
panels were comprised of officials from the program offices that
were receiving the services. As a result, these panel members most
likely worked on a regular basis with the incumbent contractor.
Since these panel members evaluate all offerers' technical proposals
as part of the award process, this situation may increase the risk
of partiality in the selection process. These factors may combine
to limit the competition for some EPA contracts, especially
contracts for repeat services (See Chapter 3 for a detailed
discussion of these issues).
We also noted that, until recently, Agency Competition Advocate
efforts in promoting competition focused primarily on reducing the
number of sole source acquisitions. The Competition Advocate was
successful in this endeavor as shown by the high percentage of
contracts awarded under competitive procedures. However, the
Competition Advocate had not routinely evaluated the results of
these competitive procedures to determine whether they were
resulting in competition for Agency contracts. For example,
functional reviews of competition performed annually by the
Competition Advocate did not look at the actual level of competition
achieved for contracts awarded under full and open competition
procedures. The Agency also had no mechanism for tracking contracts
awarded under competitive procedures that resulted in the receipt of
only one competitive proposal. The Agency could make the
Competition Advocacy Program a more effective tool for improving
EPA's competitive procurement process by improving its evaluation of
the results of competitive procedures. This increased focus could
help identify and mitigate the various factors that limit the number
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of proposals received for some competitively awarded contracts (See
Chapter 4 for a detailed discussion of these issues).
EPA NOT ASSURED THAT IT RECEIVED THE BENEFITS OF COMPETITION
Giving everyone an opportunity to compete does not ensure that
potential contractors will submit offers and provide EPA with the
benefits of competition. In a significant portion of contracts we
reviewed, there was a lack of acceptable offers for those awards.
For FY 1991 and 1992 we identified 39 negotiated contract awards
totaling over $327 million in maximum potential value for which only
one proposal in each award made the competitive range. This
included 24 awards totaling almost $223 million for which only one
company submitted a proposal in each case.
The Government is best served when all potential contractors have
the opportunity to compete equally for its business. Contracts
should be awarded to those submitting the most advantageous offers
to the Government. Offering all contractors the opportunity to
compete equally helps to ensure that the Government pays fair and
reasonable prices.
In addition, the benefits of competition go beyond the short-term
price advantage. The most important benefits of competition can
often be the improved ideas, designs, technology, delivery, or
quality of products and services that competition motivates
potential contractors to produce or develop to obtain Government
contracts. The chance of winning a Government contract, or the
threat of losing a subsequent contract award similar to one being
performed, provides an incentive for greater efficiency and
effectiveness. When competition is restricted, the Government loses
the opportunity not only to obtain lower prices but also to increase
the productivity and the effectiveness of its programs.5
CONCLUSION
The Agency has received an inadequate number of responses to some of
its contract solicitations. In 28 percent of the FY 1991 and 1992
contract awards we reviewed, the Agency received only one
competitive proposal. Reasons for this limited competition were
varied. Our audit noted several factors in the procurement process
that favored incumbent contractors and thus limited competition for
repeat contracts. When a material portion of Agency contracts are
awarded without any significant degree of competition, the Agency
has less assurance that it has paid reasonable prices for those
services or that it has maximized program effectiveness and
productivity in those areas affected.
5 GAO report entitled Better Compliance With the Competition
in Contracting Act is Needed (GAO/NSIAD-87-145), issued August
1987.
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RECOMMENDATIONS
Chapters 3 and 4 contain detailed discussions of the specific causes
of limited competition that were summarized in this chapter.
Accordingly, recommendations to improve the competitiveness of EPA
procurements are made in those chapters.
AGENCY COMMENTS AND PIG EVALUATION
The Agency generally agreed with the findings presented in this
chapter. However, the Agency believed our discussion of price was
"inappropriate" since the vast majority of the Agency's contracts
are cost-reimbursement type contracts. Although the effects of
competition on price may be more pronounced for fixed-price
contracts, we believe cost-reimbursement contracts can still benefit
from the price effects of competition. FAR 15.803 (c) states that
price negotiation is intended to permit the CO and the offeror to
agree on a fair and reasonable price. The Government's negotiation
position can benefit from the presence of several competitive
proposals. In addition, companies may incur different labor costs
and G & A expenses and propose different rates for profit. Although
estimates of cost may not be valid indicators of final cost in all
cost-reimbursement contracts, in a competitive environment a company
would need to be concerned about controlling costs and avoiding
excessive overruns. A history of excessive overruns could
negatively effect a firm's chances for subsequent cost-reimbursement
contracts when competing against equally qualified companies that do
not have a history of excessive overruns.
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CHAPTER 3
CONDITIONS THAT LIMIT COMPETITION EXIST IN THE PROCUREMENT
ENVIRONMENT
Several conditions existed in the procurement environment that by
themselves or, in combination with other conditions, limited
competition for EPA contract awards. These conditions tended to
benefit incumbent contractors and include:
level of effort (LOE) type contracts with large, diverse,
contract SOWs;
RFP evaluation criteria that placed significant emphasis on
personnel experience and availability;
perceptions about the status of the incumbent contractor; and
TEP panels that were comprised of personnel from the office
receiving the contract services.
These conditions combined to reduce competition for some EPA
contracts. Our audit showed that repeat contracts that were awarded
to incumbent contractors made up the large majority of the dollar
value of those awards that lacked competition. In some of these
instances the incumbent contractor was the only company to submit a
proposal.
BACKGROUND
For those contracts in our sample that received only one competitive
proposal, we performed additional work to determine why there was an
absence of competitive proposals.
We reviewed documentation in contract files that included, but was
not limited to, RFP technical evaluation criteria, RFP SOWs, OGC
review comments, TEP Reports, competitive range determinations,
source selection memorandums, and correspondence from companies
explaining why they did not submit a proposal. For repeat contracts
where there was a lack of competition we also reviewed the contract
files for prior awards. We also interviewed COs and CSs, POs, CMD
Directors and Branch Chiefs, and the Competition Advocate.
In addition, to determine reasons for the lack of competition for
EPA contracts we interviewed over 80 potential offerers. For RTP
contract awards, we selected potential offerers for interview using
judgmental sampling techniques. First, we identified contracts in
which there was a lack of competition. For these contracts, we
selected companies from the following items contained in the
contract files: lists of pre-proposal conference attendees, letters
from companies stating that they would not submit a proposal to EPA,
letters from companies requesting copies of the RFP, and from EPA
solicitation mailing lists. We initially selected those companies
17
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that indicated an interest in the solicitation. We did this by
selecting those companies who attended pre-proposal conferences. We
also selected those companies who expressed some reason in their
letters for not submitting a proposal. Further, we selected
companies who expressed some interest in the procurement through a
written request for a copy of the RFP. After exhausting those
criteria, we selected firms who submitted letters stating they would
not propose, but did not express a specific reason for not
proposing. Lastly, we judgmentally selected companies from
solicitation mailing lists.
THE SIZE AND DIVERSITY OF LQE CONTRACT SOWS MAY LIMIT COMPETITION
The type of contract frequently awarded by EPA has contributed to a
lack of competition. EPA has long relied on large, LOE contracts
with diverse SOWs. The June 1992 Staff Report of the Standing
Committee on Contracts Management, reported three reasons for this
reliance on large, LOE contracts: (1) an Agency belief that flexible
contract vehicles were needed to accomplish its work; (2) the
Procurement Contracts Management Division (currently 0AM) encouraged
their use since they required less resources to award and manage;
and (3) the Agency's available full-time equivalents (FTE) were not
sufficient to accomplish the Agency's mission without contractor
support. Some firms we spoke with recognized the advantages of the
incumbent in these types of contracts and, consequently, did not
submit competing proposals.
The large, diverse contracts awarded by EPA appeared to favor the
incumbent in a number of ways including the following:
Small and medium firms alone could not handle the diversity
and/or volume of work required by the larger contracts.
General SOWs made it difficult for non-incumbent firms to
prepare technical proposals.
LOE contracts made it desirable to retain the incumbent
contractor for the sake of continuity and consistency in the
work and its results. (The discussion of this issue is
included in the subsection entitled "Perception That EPA
Favored the Incumbent Contractor" and starts on page 36.)
Large, Diverse SOWs May Limit Competition
During our discussions with prospective offerers, we asked them if
there were conditions in the EPA procurement system that limited
competition. The large size of EPA contracts was the second most
often stated condition. The diversity of tasks and the sheer number
of labor hours required in such contracts could deter medium and
small firms from submitting proposals. Some of these officials
expressed the opinion that EPA may not get the best services when
awarding large contracts. This was because medium sized firms that
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may be proficient in one specialized area under the general SOW but
do not have experience in the other areas of the SOW may not submit
proposals. The only way such a firm could submit a proposal was to
find other contractors to team with them as subcontractors. This
was difficult to arrange since the incumbent contractor may have
already secured the most qualified team.
The Agency has recognized the diminishing effect that large
contracts can have on competition. The FY 1992 Annual Report .on
Competition chronicled cases in which EPA was breaking up larger
contracts to enhance competition. For example, the report stated
that the Agency was breaking down Office of Policy, Planning and
Evaluation (CPPE) contracts into smaller contracts to encourage more
offers. The Competition Report also stated that the Agency was
dividing contracts supporting Superfund to increase competition. It
stated that several of these contracts were now being awarded on a
regional basis as opposed to a zonal basis (comprised of several
regions). The Agency hopes that the smaller contracts will generate
more proposals and competition. The annual report noted that CMD-
RTP had split large mission contracts into three separate contracts.
The Agency was considering awarding three contracts: one full and
open competition, one competitive small business set-aside, and one
SBA 8(a) set-aside. Moreover, RTP contracting officials told us
that the Environmental Service Assistance Teams (ESAT) contracts
that were previously awarded on a zonal basis will be awarded on a
regional basis.
One approach the Agency has used to reduce the size of contracts is
to make multiple awards from a single solicitation. As noted in
Chapter 2, contracts awarded to support OAQPS have been issued under
this approach. Other program offices have also used this method to
increase competition for their contracts. The Office of Water (OW)
used multiple awards to increase competition on a contract for
sampling and analysis services. The solicitation for the OW initial
contract only received one proposal. Likewise, the solicitation for
the first follow-on contract only received one proposal. The
solicitation for the second follow-on contract used a multiple award
approach. As a result, five companies submitted proposals and three
companies' proposals made the competitive range for the multiple
awards.
Although the Agency has reduced the size of many of its
procurements, large SOWs were still a factor in some contracts that
we reviewed during our audit. Some program offices maintained that
having one contractor perform under one large contract was more
efficient for accomplishing their work than using several smaller
contracts. Some program offices preferred these larger types of.
contracts because they required fewer POs to administer. Because of
the lack of Government employees available to accomplish the
program's tasks, program officials often used LOE contracts to
obtain essential program support.
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The following cases from our review are provided to illustrate
contracts in which large, diverse SOWs affected the degree of
competition obtained:
Case Example One-.... Contract Numbers 68D20155 and 68D20185
We reviewed two contracts awarded in FY 1992 to support the Office
of Radiation Programs.6 This support was previously provided under
one contract. The maximum potential value of the two 1992 awards
was approximately $52,000,000 and $28,000,000. The incumbent was
one of three contractors to submit proposals for the $52,000,000
contract and was the only contractor to submit a proposal for the
$28,000,000 contract. The incumbent contractor won both awards.
The number of labor hours required by these two contracts were
850,000 and 425,000, respectively.
We interviewed company officials of one firm who received the RFPs
for both competitive awards. These officials cited two factors
related to the size and diversity of the RFP SOWs that influenced
their decision not to submit proposals. These factors were the
large number of professionals with doctorate degrees required and
the diversity of experience that the solicitations required. Both
RFPs required a large number of health physicists with doctorate
degrees. These company officials explained that this was a
specialized area and that it was difficult to come up with that many
personnel with doctorate degrees in that specialty. They stated
that only a few firms already had the number of people required to
fill those positions. They also stated that the major work tasks
for the two RFPs were in distinctly different fields. They believed
that each of the two RFPs could have been split into three separate
contracts. Since the two RFPs contained work tasks in such
divergent fields, they would have had to put together a team of
contractors to provide the requested support. These officials
believed that EPA could have promoted competition by procuring the
different support services separately.
We also spoke with the PO for one of these contracts. His
explanation for the lack of competition supported what we were told
in our interview with firm's officials who did not submit a
proposal. The PO stated that the area of radiation program
activities in which the contracts were involved was very
specialized. He stated that this specialized activity required the
use of several subcontractors and that the incumbent contractor
already had these subcontractors in place.
6 Six contracts were awarded to support this Office. The
two contracts awarded under full and open competition provided
most of the support. Two competitive small business set-asides
and two SBA 8(a) set-asides were also awarded.
20
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We also reviewed prior contract awards for contract support to this
program office. This history of prior contract support revealed
that the incumbent contractor has provided most of the support to
one of this office's divisions and that support has increased
dramatically since 1984. In 1984, the current incumbent contractor
was awarded one contract to provide up to 63,000 labor hours of
support with a maximum potential value of $2,606,896. In 1987 the
incumbent won one contract to provide up to 270,000 labor hours with
a maximum potential value over $11,000,000. In 1989 the incumbent
won one contract to provide 600,000 labor hours of support with a
maximum potential value of $26,157,674. In 1992 the incumbent won
two contracts to provide up to 1,275,000 hours of support with
maximum potential values totaling $80,628,441.
The number of proposals submitted in response to solicitations for
contract support to this program office has decreased since 1989.
For the support contract awarded in 1987, four companies submitted
proposals. For the support contract awarded in 1989, five companies
submitted proposals. For the two contracts awarded in 1992, three
companies submitted proposals. The incumbent submitted proposals
for both solicitations while two other firms submitted proposals for
the largest of the two solicitations.
Case Example Two: Contract Number 68D20056
This contract was awarded in April 1992 with a maximum potential
value of $67,985,497 and up to 1,768,500 labor hours of support.
The contract provides technical support to ORD's Health Effects
Research Laboratory. The incumbent contractor was the only firm to
submit a proposal for the current contract award. The incumbent and
one other firm submitted proposals for the prior contract award.
The current contract SOW covers several different work areas. CMD
attempted to "set-aside" a portion of the current contract SOW for a
small business. However, Laboratory officials believed that the
contract's services would be more effectively provided under one
contract. These Laboratory officials stated that the procurement
represented an integrated requirement that involved close
coordination between different projects.
We spoke with the vice president of one company that received the
solicitation for the current contract award. He stated that the
contract was too large for his company to manage. His company has
an annual revenue of about $32 million and employs approximately 500
people. This official stated that he knew of only three other firms
that could handle the work required under this contract. This
official believed that the work could be split among the
Laboratory's organizational lines instead of procured under one
large contract.
Gradual increases in work tasks and labor hours in follow-on
contracts can further increase the incumbent advantage when
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competing for successive follow-on contracts. With each increase in
tasks the incumbent's experience advantage is increased. We
reviewed the current contract SOWs and prior contract SOWs for nine
RTF follow-on contract awards that had only one proposal make the
competitive range. Each of these contracts had maximum potential
values over $4 million. We reviewed these SOWs to determine if the
work required was expanding over time. In all nine contracts
additional tasks were added to the contract SOW which were not in
the previous SOW. In the most extreme example we noted that the
prior contract contained 6 work tasks while the follow-on contract
expanded to 19 work tasks. In five contracts the number of labor
hours increased from the prior contracts. In three of these follow-
on contracts the increase in labor hours ranged from 29 to 43
percent from the previous contract to the follow-on contract. In
two instances the increase in labor hours happened essentially
because the contract period of performance (including option years)
was increased from three years to four years and five years. In
addition, we noted that three contract SOWs contained non-technical
tasks; e.g., conference support, word processing support, and other
such tasks that could possibly be procured separately from the
technical work.
General Statements of Work
Another problem we found related to LOE contracts was the generally
worded SOWs that were common to these types of contracts. Prior OIG
reviews noted that SOWs for these contracts were general and did not
describe specific work tasks. A non-incumbent offerer can find it
difficult to write their technical proposal when they do not know
what specific tasks are required under the SOW. An incumbent
contractor would know the specific work required because of their
past work experience and could better tailor their technical
proposal to that work.
Some company officials we spoke with expressed concerns about
generally worded SOWs. One company official stated that this type
of contract does not promote full and open competition. This
official believed that such SOWs do not allow a company to
demonstrate superior productivity. Another company official stated
that he would like to see large, general LOE contracts broken down
into separate completion type contracts. He believed this would
promote competition and allow the Agency to obtain better expertise
by encouraging medium sized firms which specialize in one area to
compete for EPA contracts in those areas.
The Director of CMD-RTP told us that he believed generally worded
SOWs were a major problem in obtaining competition for Agency
contracts.
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Large Contracts With Extensive Subcontracts May Cost EPA More Than
Smaller Contracts That Do Not Use Subcontracts
The use of large, diverse, LOE contracts can limit competition for
these contracts. In addition, each of these contracts may cost more
than several smaller contracts and can present special contract
management problems when extensive subcontracting is used. These
contracts may require extensive subcontracting for two reasons.
First, because of the large number of personnel required, the prime
contractor may choose to subcontract rather than directly hire a
large number of employees. Secondly, the diversity of expertise
required by the contract may necessitate subcontracting since no one
contractor may have the diverse staff needed to perform the
statement of work.
When extensive subcontracting is required, this type of contract may
not be cost beneficial to EPA. Some Agency Determinations &
Findings (D & F) we reviewed argued that these contracts were not
economical. (D & Fs are contract documents prepared by the CO that
provide the Agency's justifications for taking certain contract
actions.) This was because the subcontractor's costs were passed
through the prime, who in turn, added its General and Administrative
(G & A) rate and profit to the subcontractor's costs. For example,
a D & F for splitting up an OAQPS contract stated that:
With an increase in the volume of work, the one contractor
will tend to propose with numerous subcontracts, which
pyramids indirect costs and profits. This is certainly
not cost effective for the Agency.
Using a 5 year LOE contract requiring 1,100,000 hours as an example,
the D & F estimated that breaking up the contract into four equal
contracts could save the Government anywhere from $2,268,750 to
$6,806,250 depending upon the prime contractor's
G & A rate.
Also, when extensive subcontractors are used, contract management
problems can be present which would not be a problem when a prime
contractor is performing the majority of the work. An issue paper
prepared by an Agency Quality Action Team (QAT) listed problems
associated with extensive subcontracts. Some of these problems
included the potential for directed subcontracting, (i.e., EPA tells
the prime which subcontractor to use for a specific work
assignment), the prime not using the same subcontractors who were
presented in their original proposal, and EPA personnel dealing
directly with the subcontractors instead of the prime contractor.
Conclusion
The type of contract awarded by EPA can be a significant factor in
limiting competition for some contracts. A large, diverse SOW can
limit competition since only a few firms may be capable of
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performing the variety of work required. When the work requires the
assembling of large subcontracting teams, the incumbent contractor
may have the best qualified expertise already on its staff.
Consequently, it could be difficult for a potential competitor to
put together a team that can successfully compete against the
incumbent and its team. As a result, competition may be limited for
such contracts.
RFP EVALUATION AND SCORING CRITERIA CM! LIMIT COMPETITION
We found that RFP technical evaluation criteria and its assigned
scoring weights favored the incumbent contractors in some instances.
This contributed to a lack of competition for some contracts. Some
prospective offerers we spoke with stated that the technical
evaluation criteria played an important role in deciding whether to
submit a proposal. If the technical evaluation scoring criteria
allotted a high percentage of points for areas that they believed
favored the incumbent contractor, they were reluctant to submit
proposals.
The FAR provides only broad guidance in the area of technical
evaluation criteria. FAR 15.605 (a) states:
The factors that will be considered in evaluating
proposals should be tailored to each acquisition and
include only those factors that will have an impact on the
source selection decision.
FAR 15.605(b) states:
The evaluation factors that apply to an acquisition and
the relative importance of those factors are within the
broad discretion of agency acquisition officials...
Quality also shall be addressed in every source selection.
In evaluation factors, quality may be expressed in terms
of technical excellence, management capability, personnel
qualifications, prior experience, past performance, and
schedule compliance. Any other relevant factors, such as
cost realism, may also be included.
We reviewed the technical evaluation criteria and scoring plans for
19 RFPs issued by CMD-RTP that resulted in the receipt of only one
proposal that made the competitive range. We reviewed the
evaluation criteria to determine whether it included factors that
may have favored the incumbent contractor. We also evaluated the
relative importance of various criteria to the total amount of
points available. We did this to determine whether the RFP appeared
to allot excessive points for certain criteria. We also interviewed
prospective offerers to obtain their opinions on RFP technical
evaluation criteria.
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Based on our review, we observed scoring criteria and related
elements that favored the incumbent contractor and made it difficult
for other potential offerers to compete against the incumbent. In
some cases several criteria which favored the incumbent contractor
were present in the RFP. We identified four such factors in our
review: (1) corporate experience that exceeded 15 percent of the
total available points; (2) personnel experience and availability
that equaled or exceeded 407 percent of the total available points;
(3) letters of commitment were requested to show availability of key
personnel; and (4) offerers were asked to name non-key personnel.
The following table summarizes our review results:
(See top of next page for table!
7 We do not suggest that 40 percent should be a definitive
cutoff point for all RFPs. Based on our review we believe this
is a percentage that represents a substantial portion of the
total evaluation points available and may benefit the incumbent
contractor to the point that it could limit competition. In the
Agency's recent guidance document for awarding LOE contracts, a
hypothetical scoring plan awards 35 percent of the total
available points in the area of personnel experience and
availability.
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Summary Results of Review of RFPs For Contract Awards In Which
Only One Proposal Made The Competitive Range
Contract
Number
68D10135*
68D20056*
68D00106
68D20155*
68D00110*
68D20172*
68D10003*
68D30013*
68D10009*
68D20175*
68D00114
68D20186*
68D30010*
68D10134
68D10105*
68D10149
68D20151*
68D30015*
68D10160
Totals
Corporate
Experience
Exceeded
15 percent
X
X
X
X
X
X
X
7
Personnel
Experience
&
Availability
Was 40
Percent or
More
X
X
X
X
X
X
X
X
8
Letters of
Intent
Required
For Key
Personnel
X
X
X
X
X
5
Offerers
Asked to
Name Non-
Key
Personnel
X
X
X
X
X
X
6
= Repeat contract and incumbent won the award
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Corporate Experience Exceeded Goals Established by the Competition
Advocate
Corporate experience is a rating criteria based on experience that
the proposing company has in a specified field(s). The Competition
Advocate's policy is that points for this category should not exceed
15 percent of the total evaluation points.
In 7 of the 19 RFPs we reviewed, the points available for corporate
experience exceeded 15 percent of the total. The percentage
allotted in those solicitations we reviewed ranged from 16 percent
to 38 percent of the total evaluation points. Four of these cases
were for contracts under $5,000,000 and consequently were not
reviewed by the Competition Advocate. The Competition Advocate only
reviews acquisition plans for procurements with a maximum potential
value of $5,000,000 or more. The other three cases were for
contracts over $5,000,000 and were reviewed by the Competition
Advocate. We found no evidence in the contract files concerning
actions taken by the Advocate related to corporate experience in
these cases. Corporate experience for these three latter cases
totaled 16, 17, and 20 percent of the total points available.
There is no written Agency policy specifying how much emphasis
should be placed on corporate experience. However, the Competition
Advocate stated he followed his guidance of 15 percent for several
years to prevent the incumbent from gaining an excessive advantage
for an award based on their prior EPA work experience. CMD-RTP's
Placement Branch Chief stated that CMD-RTP also used this benchmark
in reviewing RFPs.
We spoke with the CSs for two of the RFPs in which the amount of
points awarded for corporate experience exceeded 15 percent of the
total points. One CS stated that, at the time of the award, she was
unaware of any guidance restricting corporate experience to 15
percent. However, she said the Branch Chief had confirmed this
policy in a recent staff meeting, therefore she would see that
future RFPs adhered to this percentage. The other CS we spoke to
stated that he had also been unaware of this guidance.
Personnel Experience and Availability
In 8 of the 19 RFPs we reviewed, 40 percent or more of the available
evaluation points were based on experience and availability of
personnel. For three RFPs the percentage was over 50 percent with a
high of 66 percent. These three contracts had maximum potential
values of approximately $28 million, $4.3 million, and $1.2 million.
The evaluation points were allotted in such categories as:
demonstrated ability of personnel; personnel experience; and
availability of personnel. Availability referred to the likelihood
that the proposed personnel would work on the contract. These
factors were always applied to key personnel, and in some cases
applied to non-key personnel as well. These rating factors were
beneficial to incumbent contractors because they could cite
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personnel with extensive EPA experience that had been gained on the
predecessor contract. Incumbent contractors could also demonstrate
availability of personnel since their personnel were already working
on the contract.
The greater the percentage of points allotted to a particular
evaluation factor, the more beneficial a high score in that area
will be to an offerer in trying to win the award. Some company
officials we spoke with stated that when they see a high percentage
of points awarded for personnel experience and availability they
believe it will be difficult to defeat the incumbent contractor.
These officials believed that the incumbent's EPA -experience will
generally count more than their proposed personnel's experience.
We did not find RFPs which specifically stated EPA experience was
desired; however, the TEP reports sometimes indicated that EPA
experience was what the panel considered most beneficial. For
example, a TEP report's comments concerning a non-incumbent proposal
included the statement, "Their only ties to EPA appear to be with
the Superfund program, a program which is distinctly different from
our own."
One way a non-incumbent firm can try to avoid the problem of not
having experienced personnel is to propose to hire the incumbent's
staff. However, when the rating factor of availability is heavily
weighted it can hinder an offerer's ability to propose incumbent
staff. The manner in which offerer's are asked to show availability
of personnel can also favor the incumbent. In addition to
requesting information on the experience of proposed personnel, RFPs
often requested that the offerer show the availability of proposed
personnel. Some methods for demonstrating availability as stated in
the RFPs we reviewed included; showing the length of time the
proposed personnel have worked for the proposing company, showing
past projects the proposed personnel have worked on and future
projects they will work on, and providing letters of commitment if
the proposed personnel are not currently employed by the proposing
firm. The incumbent contractor can better demonstrate availability
of its staff since it can propose people who are currently working
on the contract.
Key .Personnel and Letters of Commitment
The availability of personnel rating factor becomes even more
beneficial to the incumbent contractor when the RFP requests that
availability be demonstrated with letters of commitment from
proposed personnel. In 5 of the 19 RFPs we reviewed, potential
offerers were asked to provide letters of commitment for key
personnel. This can be especially difficult for non-incumbent
contractors who plan on hiring incumbent staff. Potential offerer's
we spoke with indicated that incumbent contractor personnel were
typically reluctant to sign letters of intent stating that they
would work for their current company's competitor.
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An issue related to the requirement for letters of commitment for
key personnel was the number of key personnel required. We noted
that this requirement was not treated the same way for all Agency
RFPs. For example, the RFPs issued by CMD-RTP typically did not
specify which positions were considered key positions. Offerers
designated which positions they considered key in their proposals.
Final determinations of key personnel were decided during contract
negotiations. In contrast, prior OIG audits and surveys of ORD
laboratories noted that other (non-RTP) RFPs designated which
positions were considered key positions. These reviews noted that
competition was limited for some contract awards because of the
large number of positions that were designated as key positions.
We spoke with the manager of business development for a company that
had submitted a proposal in response to an RFP for an EPA laboratory
support contract awarded in 1990. He explained how the requirement
to obtain letters of commitment for key personnel and the number of
key personnel desired by EPA hindered his ability to compete against
the incumbent. This company submitted a proposal with five key
personnel designated. However, during negotiations with EPA he was
informed that 15 key personnel were needed, not five. This official
explained to us that the only way he could obtain 15 key personnel
was to hire incumbent staff. However, letters of commitment were
needed to demonstrate their availability and he was unable to get
the names of the incumbent's staff. His other alternative was to
hire non-incumbent key personnel. However, to do this his company
would incur excessive costs in relocating these people. In
addition, he did not believe these people would be rated as high as
incumbent staff in the experience category. He told us that he
contacted CMD officials and inquired as to whether the issue of key
personnel was to be treated similarly for the award of the follow-on
contract. He stated he was informed that it would be treated the
same and he, therefore, decided not to compete for the follow-on
contract.
We also interviewed the vice president of a company that had
submitted a proposal for the follow-on contract discussed in the
preceding paragraph. He stated that initially he contacted the key
personnel for the incumbent staff and that they verbally agreed to
work for his company if it won the award. However, when he
contacted these same employees to obtain letters of commitment for
his proposal they stated that they would not sign letters of
commitment. This official believed that the incumbent's staff were
promised future employment with the incumbent company regardless of
the award outcome, and that they, therefore, decided not to sign
letters of commitment with his company.
We found that the issue of commitment letters was not treated
consistently among RFPs and TEPs for different contract awards. For
example, we reviewed two contracts that were awarded at the same
time to support two ORD laboratories at RTP. Both RFPs contained a
section for evaluating the ability, experience, and availability of
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staff. However, the two RFPs differed in the stated factors to be
used in evaluating these sections. One RFP stated that if new
personnel were to be hired to fill positions, the offerer should
present a hiring plan and hiring procedures. This RFP did not ask
for letters of commitment. However, the other RFP stated that if
the offerer was to hire new staff they must show letters of
commitment or other such evidence which indicated that the
designated personnel would accept employment in the event of award.
The TEP reports and the competitive range determinations further
highlighted the differences in treatment of evaluation criteria.
The competitive range/source selection document for the RFP which
did not request commitment letters offered the following discussion
regarding the non-incumbent proposal:
...While it is normal, and acceptable, for an offerer who
is not the incumbent to be unable to get advance
commitments from the existing staff, one would expect to
see a demonstration of a well conceived, aggressive plan
to hire the incumbent staff. Additionally, one would
expect to see evidence of the likelihood of success, i.e.;
statistics of percentage of incumbent staff [company name
omitted] successfully recruited on prior "takeovers" of
this nature...
The line of reasoning outlined by that panel was very different from
the position taken by the TEP for the RFP that requested letters of
commitment. The "Narrowing of Competitive Range and Source
Selection" document for this award stated;
...The interrogatories explicitly stated that the EPA was
looking for letters of intent from incumbent personnel or
at least claims of verbal commitments; none was offered.
[company name omitted] basically re-argued that they have
a 95 plus percent success rate in hiring incumbent
contractor's personnel in the past and plan to do so this
time also...
The non-incumbent company also provided a hiring plan in addition to
their past hiring success rates. Both were factors which the other
TEP would have considered as a plus in their evaluation of this
element. In this example as in all cases, TEPs are required to
follow the scoring plan as outlined in their respective RFPs.
However, we believe the Agency's RFPs should be more consistent in
establishing the criteria used to evaluate and score similar
evaluation factors.
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Offerers Were Sometimes Asked to Name Non-Key Personnel To .Be Placed
on The Contract
RFPs that ask offerers to name non-key personnel can provide even
greater advantage to the incumbent contractor in the area of
personnel qualifications and availability. In 6 of the 19 RTF RFPs
we reviewed, potential offerers were asked to name personnel, other
than just key personnel, who would perform on the contract. In the
most extreme example we found, one RFP requested that offerers
specifically name all technical personnel to be placed on the
contract (see Case Example Six, below). Requirements to name key
personnel are common since these people are considered essential to
the performance of the contract SOW. However, asking offerers to
provide names of an excessive number of non-key technical personnel
appeared to place an excessive burden on non-incumbent potential
offerers. Since the incumbent already had people in place working
on the contract it was easy for them to name the people that would
be placed on the follow-on contract. It was difficult for non-
incumbent offerers to anticipate which employees would possibly be
assigned to a contract at the time the proposal was prepared.
We question whether an offerer should be evaluated on the experience
and availability of non-key personnel. If personnel were not
designated as key personnel then these personnel would not be
considered crucial to successful completion of the work. Their
prior work experience would not be as important as key personnel's
experience. In addition, these positions should be easier to fill
since they require less qualified personnel than those in key
positions. This rating factor provides a substantial advantage to
the incumbent. Rating offerers on the experience and availability
of personnel who are not: (1) key personnel; (2) the most important
technical personnel; or (3) being rated collectively as project
groups, may unduly restrict competition.
The following two examples illustrate some of the evaluation factors
discussed in this section.
Case Example Three: Contract Number 68D30013
The RFP for this contract contained several factors which favored
the incumbent contractor. The RFP placed 60 percent of the
technical evaluation criteria in two areas which favored the
incumbent. These areas were "Demonstrated Company Expertise" and
"Demonstrated Qualifications, Expertise, Experience, Education, and
Availability of Proposed Personnel." In order to show availability
of personnel, the RFP requested letters of commitment for new hires.
This included key and non-key personnel.
The RFP did not request that offerers specifically show EPA
experience; however, the experience advantage gained by the
incumbent in performing the contract work would have been hard to
overcome by any potential competitors. For example, the RFP
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evaluation criteria contained the following statement regarding
management experience, "Evidence of having successfully managed
projects (similar to those stated in the Statement of Work).." In
regard to technical experience it contained the following statement,
"Demonstrated technical expertise and experience including completed
and current projects related to the Statement of Work."
Although the RFP contained separate evaluation factors to cover both
corporate and personnel experience, experience was also factored
into the evaluation of an offerer's proposed technical approach.
The OGC reviewer questioned whether experience should be included in
the evaluation of technical approach. Despite the OGC reviewer's
comments, the RFP requested that:
Any recent experience in fields relating to this
procurement should be described. This description
should be adequately detailed to establish the
pertinence of the experience and what influence it
had on the proposed technical approach to this
requirement.
This contract was awarded to the incumbent after receipt of two
proposals. Only the incumbent's proposal made the competitive
range. The incumbent had held the four prior contracts, and in each
of these awards, was the only contractor to make the competitive
range.
Case Example, Four-. Contract Number 68D10009:
The RFP for this contract contained two evaluation factors which
appeared to limit competition. First, the RFP requested that
offerers specifically name all technical personnel to be placed on
the contract. Secondly, offerers were requested to travel to RTF to
conduct performance audits. Only one other company submitted a
proposal. However, this proposal was rated non-responsive and
received zero technical points.
The RFP's technical evaluation criteria allotted a certain number of
points for an offerer's ability to specifically name technical
personnel to be placed on the contract. The larger the percentage
of technical hours that an offerer provided specific names for, the
greater the number of technical points their proposal received. An
offerer could receive a maximum of 150 points by providing names for
90 percent of the technical hours. If an offerer provided names for
less than 75 percent of the total technical hours the offerer would
receive zero points for this rating element.
The OGC reviewer questioned the purpose of asking offerers to
provide names of their technical personnel. A memorandum from the
PO indicated that he believed having offerers name technical
personnel was necessary to show that the offerer had sufficient
people available to perform the work. A contracting official stated
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on the disposition of the legal review comments that the attorney's
comments regarding technical evaluation criteria were "discussed at
length" with the Competition Advocate and the PO and no changes were
made.
Additionally, the technical evaluation criteria awarded up to 500
points for demonstration of an offerer's knowledge and experience by
conducting performance audits of various pollutants. These
performance audits were to be conducted at RTF.
We interviewed a senior planner from one organization that had
received a copy of the RFP. This official stated that the naming of
employees was too restrictive. He said this would be impossible for
most large companies because they would not know who would be
available until the contract was awarded. He stated his company
conducted 1500 - 1800 projects annually and that this requirement
assumed companies had people standing around waiting for contract
work. He also stated that the requirement to visit EPA and conduct
performance audits was unusual. He believed that, in this case, any
potential offerers, in order to realistically compete, would have
had to be in the general area of RTP.
Agency Actions
EPA has issued recent guidance for developing technical evaluation
criteria. In November 1993, EPA issued The Cookbook, How To Get
Contracts Awarded In EPA. This document provides guidance to POs
for awarding LOE contracts. Chapter V of this document provides
guidance on the development and scoring of technical evaluation
criteria. The chapter states that criteria must not unduly favor
the incumbent contractor. It also states that generally, no more
than 15 percent of the total points available should be assigned to
the corporate experience criterion. Although maximum percentages
are not specifically suggested for other criterion, the chapter
contains a sample technical evaluation criteria for a hypothetical
solicitation. In this example, personnel experience and
availability only account for 35 percent of the total points
available.
Conclusion
EPA RFPs contain several evaluation scoring factors that have been
used in ways that favor incumbent contractors. These factors
include corporate experience and availability of personnel. The use
of experience as a criteria becomes more beneficial to the incumbent
contractor when EPA experience is considered more important than
non-EPA experience. Other factors that favor the incumbent
contractor are: requests for letters of commitment to show
availability of personnel; requests for offerers to name all
proposed technical personnel in addition to key personnel; and
requiring offerers to identify a large number of key personnel.
When potential offerers see these scoring factors in an RFP they are
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reluctant to prepare a proposal since they believe their chances of
winning the award are lessened. Potential offerers can also
interpret these factors as signals that the agency wants to reaward
the contract to the incumbent contractor.
Incumbents can gain a legitimate advantage through their past EPA
work experience. We do not advocate eliminating legitimate
experience advantages. However, we believe the Agency should
eliminate any unnecessary experience factors contained in evaluation
criteria. The Agency should also evaluate and implement methods
which will enable more firms to gain experience in various EPA
programs.
INDUSTRY PERCEPTIONS ABOUT THE STATUS OF INCUMBENT CONTRACTORS
SOMETIMES LIMIT COMPETITION
Industry perceptions regarding the status of the incumbent
contractor played an important role in the degree of competition for
contracts. Incumbent status included such factors as the
performance of the incumbent contractor and some contractors'
perceptions that EPA unduly favored incumbent contractors. These
perceptions were based on these companies' prior experiences and
observations of EPA's procurement process. A perceived lack of
information regarding EPA solicitations also contributed to the
belief by some contractors that EPA favored the incumbent
contractor. As a result, competition for many repeat contracts was
limited, especially when other contractors perceived that the
incumbent was performing well.
We contacted 52 companies who had received solicitations originating
from CMD-RTP but did not submit proposals. We asked these companies
why they did not submit proposals for specific solicitations in our
sample. For firms who were capable of performing the work, the most
common reason given for not submitting a proposal was the strength
of the incumbent contractor. Strength of the incumbent contractor
included such things as the extent of the contractor's facilities,
number of personnel, and extent of experience in performing the
contract services. We also solicited these official's opinions on
EPA's contracting process and areas which may limit competition for
EPA contracts. Twelve officials from different companies told us
that they could not comment on EPA contracting due to a lack of
experience with EPA. Of the remaining 40 companies, 7 stated that
EPA was closed to outsiders or favored incumbent contractors too
much. The other 33 respondents offered a variety of responses.
We also contacted 34 companies who had received solicitations
originating from CMD-Cincinnati. Forty seven percent (16 of 34).
stated that they would not submit a proposal against an incumbent
contractor. Strength of the incumbent contractor was the third most
common reason given for not submitting a proposal from those firms
who were capable of performing the work.
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Our analysis of repeat and first-time contract awards supports
company officials' contentions that they do not like to compete
against incumbent contractors. We analyzed the number of proposals
received for 32 contracts (excluding OAQPS contracts) awarded by
CMD-RTP in FY 1991 and 1992. Twenty-one of the contracts were
follow-on contracts. In 17 cases the incumbent contractor won the
repeat award. The average number of proposals submitted for the 17
contracts the incumbent won was 2.06 proposals. The average number
of proposals in the competitive range was 1.59 proposals. For
repeat awards that the incumbent did not win, the response to these
solicitations was greater. The four repeat awards in which a non-
incumbent won the contract averaged 3.75 proposals with 2.5
proposals in the competitive range. For first-time awards the
response was even greater. Our review of 11 first-time contract
awards showed that CMD-RTP received an average of 4.55 proposals and
placed an average of 2.91 proposals in the competitive range.
Performance of the Incumbent Contractor
Company officials indicated that the performance level of the
incumbent contractor can greatly influence their decision on whether
to compete for a follow-on contract award. Many companies were
hesitant to compete against an incumbent contractor if they knew or
believed that the incumbent was performing at an acceptable level.
Two contract awards we reviewed illustrate the importance of the
incumbent's performance in determining the amount of competition
received for a follow-on contract.
CMD-RTP simultaneously solicited and awarded two Environmental
Services Assistance Team contracts for different zones (several
regions comprised a zone). According to EPA documents, one
incumbent had performed well and the other incumbent had not
performed well. The re-compete for the zone in which the incumbent
was performing well only received a proposal from the incumbent.
The re-compete for the zone in which the incumbent was not
performing well received three proposals (including one from the
incumbent) and all three made the competitive range. The incumbent
did not win the award in this case. We discussed these contracts
with one non-incumbent firm who submitted a proposal. An official
from this firm told us that they proposed on the contract where they
knew the incumbent was doing poorly because they believed they had a
better chance of winning. This official told us he was aware of the
incumbent's poor performance by requesting the firm's award fee
letters for the previous contract through the Freedom of Information
Act.
An illustrative example of an offerer's evaluation of an incumbent's
status and how that effects the decision on whether to compete for a
contract award can be found in letter from an offerer to EPA. The
letter stated:
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... In order to assure that we were not wasting resources
in an attempt to unseat a firmly-placed incumbent, usually
a fruitless endeavor, we examined the incumbent contract,
the incumbent contractor, the new requirements, and the
array of probable competition.
The letter went on to explain why the company decided to submit a
proposal:
...this effort was to be comprised of approximately one-
third work that continued the incumbent contract work, and
two-thirds work support in areas not undertaken
previously. Specifically, it was stated that new support
in such areas as...in which...is very strong, were to
comprise the bulk of the effort...If the work to be
procured had been simply a follow-on to the previous
work...the limited scope would have made the risk of
success against such a firm [the incumbent] too great for
the expense involved.
The reasoning outlined in this letter also shows how adding
additional work to follow-on contracts can increase the incumbent
advantage as mentioned earlier in this Chapter. If the new work
tasks do not comprise most of the total effort, non-incumbent firms
may be reluctant to submit a proposal. Over several procurements,
the size of the SOW can gradually increase and offerers will not
compete for the repeat awards since the incumbent contractor already
has experience performing most of these tasks for EPA.
Perception That EPA Favored the Incumbent Contractor
Seven of 40 potential contractors from our RTF sample stated that
they believed that EPA, in general, favored the incumbent contractor
too much or was closed to "outsiders." Almost half of the companies
in our Cincinnati sample stated they would not submit a proposal
against an incumbent contractor. Some contractors we spoke with did
not believe EPA was biased as a rule but had experienced certain
acquisitions where they believed that competition was not wanted.
These officials obtained this perception from talking with other
industry sources and through their own personal contacts with EPA.
These officials identified actions that led them to this conclusion.
These actions included: seeming unwillingness of EPA to answer
questions concerning procurements during the pre-proposal stage;
lack of information concerning future and current EPA procurements;
and evaluation factors that favored the incumbent contractor.
One factor or- a combination of factors sometimes led company
officials to conclude that the Agency wanted to keep the incumbent
contractor and that competition was not really wanted.
For example, one company official told us that the Agency's
unwillingness to answer his written questions concerning a repeat
procurement convinced him that the program office wanted to keep the
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incumbent contractor. Consequently, this company did not submit a
proposal on the procurement. In addition, they elected not to
pursue another related procurement in the same program office
because of the experience with the other procurement. The incumbent
contractor won both procurements and was the only company to submit
a proposal for either solicitation.
Another company official told us that due to several factors he
believed two concurrent procurements for support to the same program
office were "wired" for the incumbent and consequently he did not
submit a proposal. This official believed the LOE contracts
required too many positions requiring doctorate degrees. This
requirement, coupled with the fact that there was no pre-proposal
conference, and that his request for certain prior contract
information was not received prior to the proposal submittal date
led him to believe that the incumbent contractor would win the
procurements. The incumbent was the only firm to submit a proposal
for one of the solicitations, while the incumbent and two other
firms submitted proposals for the other solicitation. The incumbent
contractor won both awards.
The following two examples illustrate how program offices sometimes
exhibit preferences for incumbent contractors performing on LOE
contracts. In one of these cases the prior contract's period of
performance had expired, but the incumbent contractor had not
finished studies that were a high priority to the program office.
In the other case the program office desired consistency and
continuity in the research data being collected under the contract.
Program offices' preferences to keep incumbent contractors may have
resulted in technical evaluation criteria that excessively favored
incumbent contractors (see discussion on page 24). A preference to
keep the incumbent contractor could also possibly affect the
impartiality of the TEP evaluation process (see discussion on page
38) .
Case Example Five: Contract No. 68D30013
We reviewed the current contract award and four of its predecessor
contract awards that had not experienced a high degree of
competition over the life of the procurements. The award of the
current follow-on contract was delayed past the end of the
performance date for the prior contract. The program office
requested an extension of the prior contract that required a
Justification for Other Than Full and Open Competition (JOFOC). The
JOFOC prepared by the program office stated:
This office has initiated 24 work assignments under
contract 68-D9-0166 with the expectation that they would
either be completed within the term of the contract,
September 30, 1992, or that they would achieve a
particular milestone by then while on a much longer
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planning scale that would be carried forward without
interruption in a follow-on procurement...
The current contractor,...must complete the work specified
because only...has been involved in efforts to date to
complete this work. It is necessary to extend the
existing contract while the process of procuring a
replacement contract is pending because the ongoing
necessary services cannot be interrupted and only...can
meet the government's needs within \he required time
frame...
It is impractical to solicit offers from other sources.
To do this would cause serious injury to the government in
that established milestones would almost certainly be
missed. Additionally, it would be extremely costly to
educate a new contractor to a level necessary to get the
job done. The start-up costs would be prohibitive.
The reasons expressed in the JOFOC for using a sole-source
acquisition to extend the prior contract explain why the program
office had an incentive to retain the incumbent contractor. For
work that carried over into the next procurement, the incumbent
contractor already had the experience and knowledge gained from
performing the first phases of the work.
Case Example Six: Contract Number 68D20134
EPA awarded this contract to continue and expand an existing
monitoring network that the Agency had operated under a prior 5 year
contract. In a memorandum justifying why a 5 year contract was
necessary, the PO outlined why it was desirable from a program
standpoint to retain one contractor for a long period. The
memorandum stated:
From the quality assurance point of view, consistency is a
major virtue. Thus, the longer one set of people are
involved in the data collection effort the better the
chance of the data being consistent.
We also want to keep the same contractor as long as
allowable because of the "learning curve." This will be a
large project that will start off big because it
incorporates the existing National Dry Deposition
Network... It will be beyond the first year of the new
contract before most participants have enough experience
to feel confident in carrying out their tasks.
New procedures and new sites are expected to be phased in
over a very long period of time. This means well into the
project, new measurements can be expected to be made and
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new sites started. Just as there is confidence in these,
even a five year contract will be over.
Both of these examples illustrate situations wherein program offices
wanted to retain the services of an incumbent contractor. Prior OIG
reviews have noted the close relationship between EPA personnel and
contractor personnel in LOE contracts and the effect that this may
have had in limiting competition for follow-on contracts. Since
program officials develop the technical criteria that contractor
proposals are evaluated against, we believe the desire to retain
incumbent contractors could have resulted in some technical
evaluation criteria that unduly favored the incumbent contractor
(see our discussion of technical evaluation criteria on page 24).
In addition, since TEPs are comprised of program officials who may
have worked with the incumbent and could work with the follow-on
contractor, these kinds of situations present the opportunity for
bias in the evaluation process (see our discussion of the
composition of technical evaluation panels on page 40).
Lack Of Information About Future And Current Procurements
Eleven company officials from our RTP sample told us that a lack of
information was a factor in limiting competition for EPA contracts.
These officials expressed concern over the lack of information for
future EPA procurements as well as information provided for
procurements which were in the process of being solicited. They
believed this lack of information improved the incumbent
contractor's position, since the incumbent had knowledge about EPA
that other contractors were unable to obtain. This lack of
information contributed to some officials' belief that EPA unduly
favored incumbent contractors.
Five company officials from our RTP sample stated that they would
like to see EPA use more advance notices of solicitations. They
stated that if a company does not find out about a procurement until
the FAR-required CBD notice, it is too late to prepare an adequate
proposal. Three officials from our RTP sample expressed concerns
over the lack of pre-proposal conferences while two officials
expressed concerns about their effectiveness. One company official
stated that pre-proposal conferences were not effective since EPA
was reluctant to divulge information at the conferences. Other
comments were that EPA should publicize future contracting
opportunities and also make available information about the program
offices. Some companies contacted from our Cincinnati sample also
expressed concerns that detailed information was not provided far
enough in advance to allow them to adequately plan resources and
prepare proposals. (See Chapter 4 for a detailed discussion of
issues related to this information).
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Conclusion
Several factors can work to the advantage of incumbent contractors
in trying to win the award of follow-on contracts. These include
large, diverse SOWs, and RFP criteria with heavy emphasis on
personnel experience and availability. The existence of these
factors in EPA procurements has lead some contractors to conclude
that the chance of winning an award over an incumbent contractor
does not justify the cost of preparing a proposal. Some companies
have the perception that there is an inherent bias toward incumbent
contractors in EPA's procurement system. A contributing factor to
this perception is the belief that there is a significant lack of
information regarding EPA procurements. Regardless of whether these
perceptions have any basis in fact, their existence contributes to a
lack of competition for EPA contracts.
COMPOSITION OF TECHNICAL EVALUATION PANELS CREATES RISK OF
PARTIALITY IN EVALUATIONS
EPA TEPs were comprised entirely of personnel from the program
office that received the procured services. In addition, the TEP
Chairperson was often the PO. For follow-on contracts, this meant
that the individuals evaluating the proposals typically worked
extensively with the incumbent contractor. This situation, at a
minimum, presented an appearance of potential partiality when
follow-on contracts were awarded.
EPAAR 1515.612 (a) states that the PO will serve as the Chairperson
of the TEP. The Chairperson is responsible for obtaining a
consensus on all TEP scores. As such, the Chairperson can exercise
considerable influence over the evaluation process. The PO is the
primary technical representative of the CO on a contract, and has
regular contact with the contractor. The PO also assesses the
contractor's performance. The PO's daily contacts with the
incumbent contractor's staff over a prolonged period of time can
result in the PO forming personal biases in regard to the incumbent
staff. Placing this person on the TEP in a major decision-making
role could compromise this process when incumbent contractor
proposals are involved. In 47 percent (24 of 51) of the follow-on
contracts we reviewed at Cincinnati and RTF, the prior contract PO
remained as the follow-on contract PO and chaired the TEP. In 41
percent (21 of 51) of the follow-on contracts reviewed the TEP
chairperson was the same for both the current and prior contract
awards.
The EPAAR also states that the TEP will consist of at least two
members in addition to the PO who are knowledgeable of the
procurement's technical aspects. It does not specify whether or not
these panel members should be from the requesting program office.
In 94 percent of the follow-on contracts awarded by CMD-Cincinnati
that we examined, the panel was composed entirely of personnel from
the requesting office. For CMD-RTP, in all of the 17 contracts we
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reviewed for this attribute, the panel was comprised entirely of
personnel from the requesting office. As in the case of the PO, if
these people have worked with the incumbent contractor they could
have formed personal biases with regard to the incumbent contractor.
These personal biases could compromise the objectivity of the
evaluation process.
In contrast, the National Institute of Health (NIH), when awarding
research contracts, is required by law to have panels comprised of
75 percent non-Government members. In addition, NIH policy has been
to exclude personnel who were or will be involved with actions in
the award and administration of the research contract from serving
on TEPs to "avoid conflicts of interest and undue influence and to
help ensure continuing objectivity" in the proposal evaluation
process.
The technical evaluation process is a subjective process and we did
not find conclusive evidence to suggest that a panel knowingly or
incorrectly favored one proposal over another. We did find examples
where TEP reports appeared to criticize non-incumbent proposals in
areas that were not explicitly covered in the RFPs technical
evaluation criteria. For example, in one case the TEP found
weaknesses in two non-incumbent proposals for not addressing the
program offices' goals and how these goals related to EPA. This was
not an area listed in the technical evaluation criteria.
A prior OIG audit identified this control weakness in the award of
ORD contracts. In response to that report, ORD established a policy
requiring that at least one member of their TEPs be from outside the
program office requesting the contract services. In addition, 0AM
officials told us that they plan to prepare an EPAAR class deviation
concerning the composition of the technical evaluation panels. This
deviation would require that at least one or two panel members are
from outside the procuring office. OAM officials told us they did
not plan on addressing the chairperson issue in this class
deviation.
Conclusion
TEPs staffed with officials who work closely with the incumbent
contractor's staff could result in bias in the scoring of proposals
for follow-on awards. The current composition practices, at a
minimum, present an appearance problem regarding the panel's
partiality.
CHAPTER CONCLUSION
The conditions discussed in this chapter can make it difficult for
potential contractors to compete successfully against incumbent
contractors. These conditions can exert varying degrees of
influence on the number of proposals received for a particular
solicitation. When several of these conditions exist in combination
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in a procurement action they can severely limit the number of
competitive proposals submitted. In some cases only the incumbent
contractor will submit a proposal. These conditions have
contributed to a belief among many company officials that we spoke
with that incumbents cannot be successfully competed against.
The Agency has initiated several actions to correct and mitigate
many of the conditions discussed in this report and has improved the
level of competition for many of its contract awards. Continuation
of these actions with increased emphasis on monitoring the results
can further increase the competitiveness of EPA's procurements.
This will benefit the Agency by helping to ensure that EPA pays
reasonable prices for its contracted services and its contractors
are motivated to provide high quality services and products.
RECOMMENDATIONS
Changes in the contracting process aimed at improving competition
will require the efforts of both program offices and the contracting
offices. We therefore, recommend that the Assistant Administrator
for Administration and Resources Management direct EPA contracting
offices, in coordination with the appropriate program offices, to:
1. Evaluate large, complex contracts for the possibility of
splitting them into smaller contracts. Use of multiple
contract awards should be considered, whenever feasible, to
accomplish this splitting and, thereby, encourage greater
competition.
2. Better publicize future EPA contracting opportunities to the
contracting community. This could include attendance at
industry trade shows and seminars, and publication of program
office long-range procurement plans.
We recommend that the Assistant Administrator for Administration and
Resources Management have the Director of OAM:
3. Monitor and evaluate RFP evaluation criteria to ensure that
incumbent contractors are not given an unfair competitive
advantage. This process should ensure that Agency RFPs:
a. Limit the evaluation of personnel experience and
availability to key personnel, the most important
technical positions, and project groups, as necessary.
b. Limit the use of letters of commitment and key personnel
to those positions that are essential to performing the
contract SOW. Allow for the use of other measures to show
availability of personnel, such as hiring plans and
evidence of successful hiring for other contracts.
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c. Do not provide for an excessive percentage of points that
can be awarded in the areas of corporate experience and
personnel experience and availability.
4. Revise EPA policy to require at least one member of a TEP to be
from an organization other than the procuring office and at
least two TEP members to be from outside the procuring office
when the TEP is comprised of five or more panel members.
AGENCY COMMENTS AND PIG EVALUATION
The Agency generally agreed with the findings presented in this
Chapter. The Agency had some reservations regarding our
recommendation to consider using multiple contract awards, where
feasible. They commented that in some cases it may be appropriate
to package requirements in a manner that results in large amounts of
labor and numerous disciplines. The Agency did not fully agree with
our draft report recommendation to develop policy regarding the
preparation of technical evaluation criteria. The Agency believed
further analysis was needed before such a policy was issued. The
Agency also did not agree with our draft report recommendation that
POs be prohibited from serving on the TEP for the award of the
follow-on contracts. They believed the inclusion of at least one
outside member to the TEP would prevent the appearance of favoritism
to the incumbent contractor.
We understand the Agency's reservations concerning the splitting of
contracts. We believe our recommendation as stated in the draft and
final reports allows the Agency the necessary latitude to make a
professional judgement as to when a contract should be split into
smaller procurements. We revised our recommendation regarding the
development of policy concerning technical evaluation criteria. We
believe continued monitoring and evaluation of technical evaluation
criteria as indicated in the Agency's response could achieve the
desired effect. We still have concerns about the impartiality of
TEPs when POs are involved in the evaluation and scoring of
proposals for follow-on contracts. However, given the Agency's
concerns with workload problems that our draft report recommendation
might cause, we are no longer recommending that POs be prohibited
from serving on TEPs for follow-on contracts. We agree that the
inclusion of one member from outside the office is a significant
change, but the inclusion of one member may not be sufficient for
larger TEPs. We note that one ORD office has implemented a policy
that at least two panel members be from outside the procuring office
when the panel is comprised of five or more members. Accordingly,
we have revised final report to recommend that EPA policy require at
least two outside members when the panel is comprised of five or.
more members.
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CHAPTER 4
COMPETITION ADVOCACY PROGRAM CAN BE STRENGTHENED TO PROMOTE
COMPETITION FOR CONTRACTS AWARDED UNDER FULL AND OPEN COMPETITION
PROCEDURES
The Agency's Competition Advocacy Program has primarily focused on
achieving adequate competition by limiting the number of
procurements awarded through sole-source means. As a result, the
Agency has been successful in limiting the number of contracts
awarded on a sole-source basis. Until recently, similar emphasis
had not been placed on improving competition for contracts awarded
under full and open competition procedures. EPA could improve the
level of competition for some of its competitively awarded contracts
by increasing its evaluation and monitoring of the results of its
competitive procedures.
0AM needs to strengthen its Competition Advocacy Program and related
internal controls to ensure that competition is achieved for
procurements awarded under full and open competition. The
Competition Advocacy Program can be improved by. (1) identifying and
monitoring contract awards where only one competitive proposal was
received; (2) expanding the roles of associate competition advocates
and competition coordinators; (3) strengthening the market research
program; (4) increasing the scope of Functional Reviews; and (5)
determining reasons for receipt of only one proposal for competitive
procurements.
BACKGROUND
CICA required that each executive agency establish an advocate for
competition. The CICA states that advocates for competition shall:
1) be responsible for challenging barriers to and promoting
full and open competition in procurements by their agency;
2) review the procurement activities of their agency;
3) identify and report to the senior procurement executive on
(a) activities taken to achieve full and open competition, and
(b) any condition or action that has the effect of
unnecessarily restricting competition;
4) prepare annual reports that describe (a) the advocate's
activities, (b) new initiatives to increase competition, and
(c) barriers to full and open competition that remain;
5} recommend to the senior procurement executive goals and
plans for increasing competition on a fiscal year basis;
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6) recommend to the senior procurement executive a system of
personnel and organizational accountability for competition;
and
7) describe other ways in which the agency has emphasized
competition in programs for procurement training and research.
The CICA also states that agencies shall provide Competition
Advocates with such staff as may be necessary to carry out the
duties and responsibilities of the advocate for competition.
Chapter 10 of the Contracts Management Manual established the
Procurement and Contracts Management Division's (now 0AM) Quality
Assurance Program for evaluating the performance of EPA acquisition
systems. The Chapter provides criteria for fostering competition
and includes techniques and strategies for enhancing competition.
The creation of a Competition Advocacy Program was cited as an
internal control technique in Chapter 10 to enhance competition.
Other related internal controls cited in the Chapter include: (1)
the establishment of an aggressive market research program; (2) a
determination of reasons when a single response was received for a
competitive solicitation; and (3) the establishment of a Management
Information System.
The term "Competition Advocacy Program" used in our report refers to
an Agency-wide program to improve competition for EPA contracts.
The term is not limited to the responsibilities of the Competition
Advocate. According to Chapter 10 of EPA's Contracts Management
Manual, the responsibility to implement an Agency-wide program is
shared by employees in the 0AM offices and the program offices. The
Competition Advocate is the official responsible for coordinating
the Competition Advocacy Program.
Actions to enhance the Competition Advocacy Program include steps
taken before the solicitation is issued to promote competition and
follow-up actions taken to increase competition for the follow-on
contract.
EPA's Competition Advocate is organizationally located in 0AM at
Washington D.C. Headquarters and reports directly to the Director of
0AM.
The Competition Advocate has been successful in meeting the goals
for awarding contracts under full and competition by limiting the
number of contracts awarded under sole-source means. According to
the Agency's FY 1992 Annual Report on Competition, the Agency
obligated 96 percent of its contract dollars through full and open
competition each year for FY 1990 through 1992. For FY 1992 the.
Agency set goals for awarding contracts under full and open
competition for all major programs. The goals ranged from 95 to 97
percent of the contract dollars obligated.
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To assess the Competition Advocacy Program's effectiveness and
related internal controls, we interviewed procurement officials in
OAM and the CMDs at RTF, NC, and Cincinnati, OH, and selected
competition coordinators in the program offices. We reviewed recent
Quality Assurance Reviews, Functional Reviews completed by the
Competition Advocate, Annual Reports on Competition and the Federal
Procurement Report. We also reviewed the contract files for the 11
solicitations in our CMD-RTP sample that received one proposal. We
identified several areas where the Competition Advocacy Program
could be strengthened to increase competition for contracts awarded
under full and open competition procedures.
EPA DID NOT IDENTIFY AND REPORT COMPETITIVELY AWARDED CONTRACTS FOR
WHICH ONLY ONE PROPOSAL WAS RECEIVED
EPA did not report to the General Services Administration (GSA),
contract actions awarded under competitive procedures that resulted
in EPA receiving only one proposal, as required. EPA's CIS, which
provides information to GSA, did not show the number of proposals
received for contracts awarded under full and open competition
procedures. As a result, EPA's input into Federal Procurement Data
System (FPDS) reports was not accurate and information that could be
used to improve the effectiveness of EPA's Competition Advocacy
Program was not available.
CICA established contract reporting requirements for executive
agencies. CICA (Public Law 98-369, Section 2732) required each
executive agency to establish and maintain a computer file
containing unclassified records of all procurements, other than
small purchases, by fiscal year for a five year period. This record
was supposed to contain certain identifying information for
procurements carried out using competitive procedures. Included in
this required record of information on competitive procurements, was
a separate category for those procurements resulting in the
submission of a bid or proposal from only one responsible source.
The term "responsible source" as defined in the CICA means a
prospective contractor who, among other things, has adequate
financial resources to perform the contract, is able to comply with
required delivery or performance schedules, and has a satisfactory
performance record, etc. The CICA states that this record of
information shall be designated "noncompetitive procurements using
competitive procedures" and is to be reported to GSA and entered in
the FPDS.
The GSA operates the FPDS. The FPDS was established to collect,
develop, and disseminate procurement data to the Congress, the
executive branch, and the private sector. According to the FPDS
Reporting Manual, the data is used to, among other things, measure
and assess the impact of (1) Federal procurement on the nation's
economy, and (2) full and open competition on the acquisition
process.
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EPA provides information from its CIS to GSA for inclusion into the
FPDS. The CIS provides general contract data for EPA contracts and
contract actions. The data is downloaded onto magnetic tape and
sent to GSA. The Acting Chief of 0AM's Systems and Information
Management Branch told us that the CIS does not have a field that
shows the number of proposals submitted for solicitations. He told
us that he assumed that in transmitting the data to GSA, EPA
automatically codes the entry for number of proposals received as
two or more offers received.
CMD-RTP enters its contract information into the Automated Contract
System (ACS). The ACS is used to develop RFPs and contract
documents as well as maintain basic contract related information.
RTP contract data is then transferred from the ACS into the CIS.
The ACS has a field for the number of proposals submitted for
solicitations. Edit checks within the system require that the
number of proposals received for a solicitation must be included.
We learned that CMD-RTP keys this information into the ACS but the
data is not transferred into the CIS.
The information for the CIS from CMD-Cincinnati is taken from the
Automated Procurement Data System (APDS). The APDS does not have
fields for the number of proposals received for a solicitation.
Thus, CMD-Cincinnati has been unable to submit this information to
the FPDS.
EPA plans to replace the CIS with the Integrated Contract Management
System (ICMS). According to EPA officials, ICMS will be operational
in FY 1996 and will include fields identifying the number of
proposals received in response to competitive solicitations.
By identifying and tracking cases where it received only one
proposal, EPA could improve the effectiveness of its Competition
Advocacy Program with regard to competitively awarded contracts, as
well as meet its CICA reporting requirements. This data could be
used to; (1) monitor the results of efforts to improve competition
for contracts awarded under competitive procedures; (2) target
future efforts in areas where the data shows that competition is
lacking; and (3) select contracts to review as part of the
Competition Advocate's reviews of competition.
ASSOCIATE COMPETITION ADVOCATES' AND COMPETITION COORDINATORS' ROLES
NEED TO BE EXPANDED
EPA has only one Competition Advocate who is responsible for
enhancing competition on Agency contracts. The Competition Advocate
has focused his efforts on contracts that were not awarded under.
full and open competition procedures. As a result, the Agency has
not placed sufficient emphasis on enhancing competition for
contracts awarded under full and open competition.
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According to EPA's FY 1992 Annual Report, of Competition, an
associate competition advocate was located at each major contracting
activity and a competition coordinator represented each major EPA
program. A General Accounting Office (GAO) report entitled Status
of EPA's Contract Management Improvement Program (GAO/RCED-87-68FS),
issued January 1987, discussed EPA's position of associate
competition advocate. This report stated that the associate
competition advocate and competition coordinator positions were
established to assist the Competition Advocate, in addition to their
usual duties, in removing barriers to competition. The positions
were created in response to recommendations in a GAO report entitled
The Environmental Protection Agency Should Better Manage Its Use of
Contractors (GAO/RCED-85-12), issued January 1985.
CICA established individual responsibilities for Agency procuring
activity competition advocates that were similar to those held by
associate competition advocates. Section 2732 of the Act states:
The advocate for competition for each procuring activity shall
be responsible for challenging barriers to and promoting full
and open competition in the procuring activity.
However, when we inquired about the identity of CMD-Cincinnati's and
RTP's Associate Competition Advocates, we learned that no one was
officially designated as the Associate Competition Advocate for
either CMD. The title was informally given to the CMD Directors in
the 1980's. According to CMD-RTP's Chief, Contracts Placement
Branch, the position was created to resolve questions about
competition between the Competition Advocate and CMD-RTP and to
resolve any local competition issues before referral to the
Competition Advocate.
The Competition Advocate stated that associate competition advocates
were not required under CICA because the contracting divisions in
RTP, Cincinnati, and Washington DC were not considered separate
procuring activities. However, prior to the creation of OAM in
1992, the contracting divisions at RTP and Cincinnati reported
organizationally to the respective OARM Directors at those
locations. Therefore, until 1992, these contracting divisions
functioned as separate procuring activities.
Though associate competition advocates are not required, we believe
that formal designations of associate competition advocates would
result in needed assistance to the competition advocate in his
efforts to improve competition for contracts awarded under full and
open competition. The Competition Advocate told us that he would
like to have associate advocates at each contracting location.
These associate advocates could assist him by reviewing competitive
range determinations for solicitations where only one competitive
proposal was received and by coordinating with the program offices
to promote competition.
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Competition coordinators are generally senior-level employees or
managers located within the major program offices. According to the
Staff Report of the Standing Committee on Contracts Management.
issued June 1992, Senior Procurement Officials would "subsume" the
role of the program competition coordinator. Competition
coordinators' responsibilities are generally related to the
acquisition or management of extramural resources. The Competition
Advocate and the competition coordinators work together to ensure
the goals for awarding contracts under full and open competition
procedures are met for each program office. The Competition
Advocate provides them with statistics on the percentage of
contracts awarded under full and open competition for their program
offices. According to the Competition Advocate, the competition
coordinators do not assist him in improving competition for
solicitations that are awarded under full and open competition. For
example, he does not provide them with statistics on the amount of
competition the program office received for their contracts awarded
under full and open competition.
The competition coordinators we interviewed have been involved in
efforts to enhance competition for contracts awarded under full and
open procedures for their program. Several program offices have
recently taken actions to improve competition. For example, in
1992, the Office of Policy Analysis in OPPE prepared a Five Year
Acquisition Strategy. Officials in the Office of Policy Analysis
and the Procurements and Contracts Management Division (now 0AM)
also held a conference with officials from the contracting community
to discuss the Five Year Acquisition Plan and possible changes in
the procurement process which would enhance competition. The Five
Year Acquisition Plan provided the contractor community a list and
description of future contracts that will be awarded to support the
Office of Public Analysis. The Competition Coordinators we
contacted in the Office of Air and Radiation, ORD and OPPE informed
us that their offices have taken actions to split large contracts in
an attempt to enhance competition.
Actions have been taken by some program offices to improve
competition for contracts awarded under full and open procedures.
However, we believe the competition coordinators could be more
effective if they would coordinate with the Competition Advocate in
efforts to improve the degree of competition obtained in full and
open competition actions. If the CIS is modified to identify
solicitations that receive only one proposal, the Competition
Advocate could establish and monitor program offices' success in
meeting contract competition goals.
EPA'S MARKET RESEARCH PROGRAM NEEDS IMPROVEMENT
The Agency has not provided any specific guidance on establishing a
market research program and has not prepared a market research
action plan. An aggressive market research program could increase
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the amount of competition by improving communications between the
Agency and the contracting community.
The Competition Advocate is responsible for promoting market
research to identify competition potential in support of acquisition
strategies. A market research program can be used by EPA to
determine whether sources capable of satisfying the Agency's needs
exist. Efforts include contacting knowledgeable experts within the
Government and industry regarding the Agency's requirements and
publishing announcements in pertinent publications such as the CBD
and technical journals and newspapers.
According to Chapter 10 of the Contracts Management Manual, the
Agency should develop a market research action plan, implement the
plan, evaluate its results and report its progress to the Agency's
procurement executive. However, the Agency has never completed a
comprehensive market research action plan. Further, the Agency does
not have any guidance on developing and implementing an effective
market research program.
Our review of actions taken by the CMDs and the program offices
disclosed that the Agency has completed some market research
actions. The CMDs complete market research actions on individual
solicitations by synopsizing solicitations in the CBD before the RFP
is issued. They have completed other market research actions such
as attending trade fairs. For example, CMD-RTP conducted a minority
business mini-trade fair and seminar. Some program offices have
completed market research actions such as publishing an acquisition
plan in the CBD and conducting conferences to discuss contracting
issues. As stated earlier, OPPE held a conference with officials
from the contracting community to discuss ways to improve
competition for their contracts.
Though market research actions are completed by some offices in the
Agency, EPA does not have a comprehensive Agency-wide plan that
includes all program offices. We believe the 0AM should develop a
market research action plan with specific guidance for the CMDs and
the program offices. By implementing the guidance the Agency would
be able to improve its communication with the contracting community.
The Competition Advocate should be responsible for tracking the
implementation of the plan by working with the associate competition
advocates and competition coordinators.
Competition could be increased if EPA would communicate its needs to
potential contractors sooner and in more detail. Steps that can be
taken by the CMDs and the program offices to improve communications
with the contracting community include: (1) publishing annual EPA
procurement plans and discussing the plans with the contracting
community; (2) publishing pre-solicitation notices in the CBD; and
(3) soliciting contractor comments on a draft of the RFP's SOW
during the pre-solicitation phase.
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All EPA program offices currently develop annual procurement plans.
These plans forecast each program's contracting requirements for the
next fiscal year. EPA uses this information to plan contracting
activity and to project small and disadvantaged business contracting
objectives. The Agency does make available the "Forecast of
Contract and Subcontract Opportunities for 8(a) and Small Business"
for each fiscal year. Although the annual procurement plans are not
made publicly available, they could serve to provide a long range
summary of EPA contracting plans to potential contractors. The
development of a Five Year Plan by OPPE and publishing the Plan in
the CBD is one example of using procurement plans to inform the
contracting community about a program office's needs. Many
companies we contacted suggested that more advance notice of EPA's
procurement plans, even in general terms, would increase their
interest and improve their ability to prepare acceptable proposals.
Pre-solicitation notices are another tool for advising the
contracting community of future solicitations. FAR 15.404 (a) states
that pre-solicitation notices are used in negotiated acquisitions
to: (1) develop or identify interested sources; (2) request
preliminary information based on a general description of supplies
or services involved; (3) explain complicated specifications and
requirements to interested sources; and (4) aid prospective
contractors in submitting proposals without undue expenditure of
effort, time, and money. Our review of 107 contracts awarded by the
CMD-Cincinnati indicated that they did not use pre-solicitation
notices to identify interested qualified sources. CMD-RTP used pre-
solicitation notices. For example, CMD-RTP used pre-solicitation
notices in two instances. The CMDs could better assist contractor
efforts to prepare proposals by using more pre-solicitation notices.
In addition, publishing pre-solicitation notices in the CBD and
making a draft RFP available to potential contractors upon request
could improve solicitations and encourage greater competition. For
most solicitations, the SOW is first made available to potential
contractors as part of the RFP. By then a timetable for completing
the procurement has been established. According to company
officials, they believe it is too late to submit a proposal if they
learn about a solicitation through the CBD announcement. For large,
complex solicitations that have not received adequate competition in
the past, providing a draft of the SOW to potential contractors
during the pre-solicitation phase would allow valuable contractor
feedback and clarification of SOW requirements. Involving
contractors earlier in the procurement process could encourage a
larger number of responsive proposals.
Our review of contracts at CMD-Cincinnati contracts did not identify
any instances where draft RFPs were published. Our review of the
contracts at CMD-RTP identified only one instance where a draft SOW
was published.
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We believe the Agency should provide more opportunities for
potential contractors to become familiar with the Agency's
requirements. Officials in the contracting community and the
Competition Advocate stated that the Agency needs to better inform
the contracting community about its contractor support needs.
During our interviews with company officials, the inability to
obtain knowledge about EPA's programs was frequently cited as a
problem in their efforts to compete for EPA contracts. Many
companies expressed concerns that detailed information was not
provided far enough in advance to allow them to adequately plan
resources and prepare proposals. The Competition Advocate
acknowledged that the Agency should provide the vendor community
more opportunities to become more familiar with contracting
opportunities at EPA. An improved market research program, that
includes establishing and implementing a market research action
plan, would provide such opportunities.
SCOPE OF FUNCTIONAL REVIEWS SHOULD BE EXPANDED
The Competition Advocate is responsible for completing annual
Functional Reviews to assess the adequacy of competition for EPA
contracts. Functional Reviews of Competition did not address the
extent' of competition for awards made under full and open
competition procedures. Until a study was completed by OAM in
August 1993, the Agency was not aware of the extent of the lack of
competition received for solicitations awarded under full and open
competition.
In accordance with CICA, the Agency must prepare an annual report on
competition. The report should include a statistical analysis and
summary of the adequacy of JOFOCs. The Competition Advocate
completes this analysis by conducting Functional Reviews on
Competition at the contracting offices at RTP, NC, Cincinnati, OH
and Washington, D.C.
The Functional Review of Competition is not the only internal
contract review performed within EPA. Procurement and Contracts
Quality Assurance Reviews (PCQAR) are also to be conducted in
accordance with guidance in Chapter 10 of the Contracts Management
Manual. PCQARs evaluate the acquisition system of a CMD and may
include one or more specific areas of evaluation. The evaluated
areas may include: (1) general management, (2) policies and
procedures, (3) contract placement, (4) small purchases, (5)
pricing, and (6) contract administration.
We reviewed the last three Functional Reviews (Reviews) of CMD-RTP.
The latest Functional Review covered the period October 1, 1990 .
through April 30, 1992. A Functional Review was not completed for
FY 1993. The Reviews did not address awards made through full and
open competition. The Reviews focused on JOFOCs for sole-source
contracts and approval of subcontractors. In addition, for those
awards where there was an absence of competitive proposals, these
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reviews did not address reasons for the low number of responses or
the adequacy of CMD actions to determine why there were low
responses.
The last PCQAR of CMD-RTP, conducted in January 1992, did not
address competition for competitively awarded contracts. Although
not required by policy, prior reviews had addressed this issue. A
January 1989 PCQAR of CMD-RTP noted the lack of proposals for RTF
procurements. In addition, a former member of the PCQAR review team
told us that, in a separate 1991 special review of CMD-RTP, they had
noted a problem with the low number of proposals received for
competitive awards at RTP.
While we were completing our fieldwork, the Director, OAM, asked the
Competition Advocate to determine the number of proposals received
for contracts awarded in 1992 and 1993 to assess the amount of
competition for contracts awarded under full and open competition.
The review included contracts awarded at all of the contracting
divisions. The results of OAM's review generally agreed with our
results. The review found that the Agency received two or more
acceptable proposals for 69 percent of the contracts awarded under
full and open competition procedures in 1992 and 1993.
The Agency regularly determines and assesses the percentage of its
contracts that it awards through full and open competition as
opposed to sole-source methods. Sole-source awards are reviewed to
ensure that they are adequately justified. Prime contractor awards
to subcontractors are reviewed to ensure that they are awarded
competitively. Reviews to evaluate the results of EPA's competitive
procedures would help ensure that EPA receives adequate competition
for its competitively awarded contracts.
POST-AWARD ACTIONS NEEDED WHEN ONLY ONE PROPOSAL IS RECEIVED IN
RESPONSE TO A SOLICITATION
The Agency has not consistently taken steps to analyze those
situations where only one proposal was received for contracts
awarded under full and open competition procedures. CMD personnel
did not regularly contact representatives from companies to
determine why the companies did not submit proposals. Also, CMD
officials were not always informed as to why companies did not
submit proposals for a particular solicitation. As a result,
appropriate actions to improve competition for succeeding contracts
could not be taken.
Chapter 10 of the Contracts Management Manual (1991 Edition) states
that contract awards based on receipt of one proposal should be
reviewed and the reasons for a single response documented. Follow-
up actions should be made to ensure appropriate steps are taken to
promote competition for future acquisitions of the same item or
service.
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EPAAR Subpart 1515.609 (c) (1990 Edition issued November 30, 1990)
states:
When only one offer is determined to be in the competitive
range, the Contracting Officer shall review the
solicitation document to assure that it did not unduly
restrict competition. The competitive range determination
shall include a discussion of the relevant aspects of the
solicitation.
We reviewed 11 procurements, 7 follow-on and 4 first-time
procurements, that were awarded after receipt of one proposal each.
The competitive range determinations included a discussion of the
lack of competition for ten of the 11 contracts we reviewed.
However, CMD-RTP personnel contacted prospective offerers to
determine why they did not submit proposals for only 2 of the 11
contract awards. In most cases, CMD officials only reviewed the
letters from companies that stated they were not submitting a
proposal. However, these letters may not always provide an accurate
description of why a company decided not to submit a proposal.
These letters often did not state why the firm decided not to submit
a proposal. If a reason was given, the existence of prior company
commitments was a common explanation given for not submitting a
proposal. In some cases, the reasons that these companies gave us
(during interviews) for not submitting proposals were not the
reason(s) stated in letters sent to CMD.
CMD-Cincinnati officials stated that while they periodically
performed follow-up discussions, they were not documented.
We interviewed 34 non-bidders for CMD-Cincinnati contracts to learn
if they were contacted by EPA to find out why they did not respond
to a solicitation. We found that 91 percent (31 of 34) said they
were never contacted by EPA. None of the non-bidders for CMD-RTP
contracts stated that they were contacted by EPA to determine why
they did not respond to solicitations. Non-bidders expressed a
hesitancy to initiate discussions with EPA over contracting concerns
for fear of negatively affecting future opportunities to obtain
contracts. Many non-bidders felt that the lack of follow-up
discussions left a perception that EPA did not want competition.
Some believed EPA was not interested in their views concerning the
procurement process or reasons for not responding to a solicitation.
The Competition Advocate agreed that more follow-up should be
completed and stated that he would like to review the COs'
explanations as to receipt of only one proposal in solicitations.
EPA could use the follow-up discussions to talk with offerers about
specific factors they believed limited their ability to make a
responsive proposal. This information could be used to develop
approaches to eliminate factors limiting competition.
As a result of OIG concerns, CMD-Cincinnati implemented formal
follow-up procedures for FY 1993 awards. A standard checklist is
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now used to contact a sample of non-bidders to obtain their feedback
on specific solicitations and the overall contracting process. In
addition, CMD-Cincinnati recently identified all
FY 1993 awards which were awarded based on a single responsive
proposal for extensive follow-up. In these cases, CMD-Cincinnati
sent a letter to every non-bidder for the award. Responses are
being summarized and forwarded to the appropriate CO and program
office for consideration in future solicitations. CMD-RTP had not
taken any similar action to establish similar procedures by the end
of our fieldwork. We believe procedures similar to the ones
established in CMD-Cincinnati should be developed by the OAM and
implemented by all contracting divisions.
AGENCY ACTIONS
On September 23, 1993, the Director, OAM issued a memorandum to OAM
Division Directors, Headquarters Senior Resource Officials, and
regional COs. This memorandum provided possible problems and
solutions related to competition. The memorandum stated that
managers and COs were expected to emphasize the procedures in
FY 1994.
The memorandum provided several possible solutions for increasing
the number of proposals received for EPA solicitations. This
included several steps related to strengthening EPA's market
research program. These steps included: (1) researching
technological and market trends to determine existing sources of
supply and to develop additional supplies to support the Agency's
acquisition needs; (2) conducting surveys of present contractors,
contractors who proposed and did not get an award, and future
sources of supply to solicit their ideas on how EPA could increase
competition for their contracts; (3) participating in industry
sponsored symposiums and meetings with members of the contracting
community; and (4) performing market surveys to identify potential
sources, counseling contractors and advertising in trade journals to
make them more aware of EPA's requirements.
The memorandum also outlined additional actions that could be taken
to address competitive solicitations where only one proposal was
received provided. Possible steps included: (1) having the
Competition Advocate review all solicitations that were awarded
based on only one proposal in the competitive range; and (2)
developing a questionnaire to be sent to anticipated offerers who
did not propose on the RFP to determine why they did not submit a
proposal.
OAM has taken steps to implement some of the solutions outlined in
the Memorandum. In November 1993, EPA issued The Cookbook, How to
Get, Contracts Awarded In EPA, a guidance document which was
developed by a QAT composed of officials from OAM and the major
program offices. The "Cookbook" was designed to be a guide for POs
in preparing all the paperwork that the OAM requires for awarding
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mission-support, LOE contracts. It includes steps to improve the
Agency's planning and to provide more information to the contracting
community. Effective in FY 1995, the "Cookbook" states that annual
acquisition plans developed by the program offices will be published
in the CBD in the first quarter of the FY. In April 1994, OAM plans
to issue a call letter for program offices to identify contracts
that will be recompeted in the next two years. The information will
be published in the CBD. The information will also be put in an
electronic bulletin board that can be directly accessed by the
contracting community. In addition, OAM is in the process of
revising Chapter 1 of the Contracts Management Manual which
addresses the Agency's planning process.
The Agency has also taken actions to review types of contracts
awarded and to improve the follow-up procedures for contracts
awarded after receipt of only one competitive proposal. OAM has
established a QAT to look at alternative contracting strategies such
as making more multiple awards from a single RFP. Another QAT is
reviewing "umbrella" contracts. OAM has also issued a draft
procurement notice that would require the Competition Advocate to
review and approve competitive range determinations when only one
proposal makes the competitive range for a solicitation.
CONCLUSION
Though the Competition Advocacy Program has limited the number of
contracts awarded under sole-source procedures, we identified
several internal control techniques that should be improved to
enhance competition for contracts awarded under full and open
competition. For example, the Agency needs to identify and report
to GSA those awards where only one proposal was received. The roles
of the associate competition advocates should be expanded to assist
the Competition Advocate in enhancing competition for solicitations
awarded under full and open competition. The role of competition
coordinators should also be expanded to assist the Competition
Advocate in the development of strategies to improve competition for
program offices throughout the Agency. A formal market research
program or plan to identify new sources should be developed.
Functional Reviews of Competition could be expanded to evaluate the
number of awards for which only one proposal made the competitive
range. Post-award contacts with non-bidding firms should be made to
determine why proposals were not submitted for solicitations that
received only one proposal.
Since we began our audit fieldwork in April 1993, EPA has initiated
many actions which should help to increase the number of acceptable
proposals received in response to full and open competition
solicitations. A guidance document for POs was issued in November
1993 that provides information on how to award LOE contracts and
includes steps which should increase competition when implemented.
QATs are studying various ways to increase competition and the role
of the Competition Advocate has been enhanced. Continuation of
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these actions should further improve the competitiveness of the
Agency's contract awards.
RECOMMENDATIONS
We recommend that the Assistant Administrator for Administration and
Resources Management have the Director of 0AM:
1. Evaluate the feasibility, including cost, of modifying the CIS
to include the number of proposals received and the number of
acceptable proposals received for each contract solicitation.
The information regarding the number of proposals received
should be communicated to the GSA. If it is not feasible to
modify CIS;
a. Officially notify GSA that EPA's reported data is not
accurate with regard to competitive actions that resulted in
the receipt of only one proposal, and
b. Request that CMDs report to the Competition Advocate, the
number of proposals received in response to every competitive
solicitation within 30 days of the award.
2. Use the data collected on the number of proposals received for
competitively awarded contracts to:
a. monitor the results of efforts to improve competition for
contracts awarded under competitive procedures;
b. target future efforts in areas where the data shows that
competition is lacking,- and
c. select contracts to review as part of the Functional Reviews
of Competition.
3. Expand the Competition Advocacy Program to include
associate competition advocates and competition coordinators
to assist in the competition advocate's efforts to enhance
competition for contracts awarded under full and open
competition. The Competition Advocate should work with the
competition coordinators to establish and monitor the
attainment of goals on the amount of competition received
for the program office's contracts.
4. Issue guidance and procedures to strengthen the market research
program and develop a market research plan that is evaluated
and updated annually.
5. Where appropriate, publish advance pre-solicitation notices in
the CBD and make available for comment draft RFPs for complex
solicitations that have had inadequate competition in the past.
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6. Report in the Functional Reviews and Annual Reports on
Competition an assessment of the amount of competition for
contracts awarded under full and open competition procedures.
7. Issue guidance instructing contracting offices to conduct post-
award efforts to determine reasons for the receipt of only one
proposal when it occurs. A plan to correct causes for the
absence of proposals should be prepared for the follow-on
contract award.
8. Evaluate the solutions outlined in the September 23, 1993,
memorandum to determine implementation and monitoring
responsibilities. Issue guidance where appropriate to clearly
delineate procedures and responsibilities for implementing
these actions.
AGENCY COMMENTS AND PIG EVALUATION
The Agency generally agreed with the findings and recommendations
presented in this chapter. The Agency noted that although
statistical analyses of competition had not been performed in the
past, the Agency has always been committed to the objective of
receiving the maximum number of proposals for its competitive
awards.
The Agency's comments were responsive to our findings and
recommendations. We believe their actions and planned actions
should help to encourage greater competition for EPA contracts.
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60
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Appendix I
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
MAR 2-j 1994
OFFICE OF
ADMINISTRATION
AND RESOURCES
MANAGEMENT
MEMORANDUM
SUBJECT: Competition in contracting Draft Audit
Report No. E1BMF3-24-0027-
FRON: Jonathan Z. Cannon
Assistant Administrator (1102)
TO: Elissa R. Karpf
Associate Assistant Inspector General
for Acquisition and Assistance Audits (2421)
Thank you for the opportunity to review the February 1, 1994
draft audit report entitled Competition in Contracting prepared
by the Office of the Inspector General. The Office of
Administration and Resources Management (OARM) is in general
agreement with the findings and recommendations of the report and
recognizes the need for improved competition for Environmental
Protection Agency's acquisitions. However, there are areas of
the report which may be misleading and recommendations with which
OARM does not fully agree. These specific concerns are discussed
in Attachment A. Also included as Attachment B is the January
1994 Annual Report on Competition issued by the Office of
Acquisition Management.
Please call Betty L. Bailey, Director of the Office of
Acquisition Management, at 260-5020 if you would like to discuss
these comments or need additional information.
Attachments
RtcycltcLftocyclabt*
Prtntw wttn Sov Caixw mk on paptr that
contwna « M«M SOX r*cyci*d nt>«r
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Appendix I
Attachment A
CHAPTER 1 - INTRODUCTION
BACKGROUND
In Chapter 1, the description of the acquisition process
seems to imply that it may sometimes be Agency practice to narrow
the competitive range based on a re-scoring of revised technical
proposals. The Agency does not narrow the competitive range
unless best and final offers (BAFOs) have been requested,
received and evaluated. If after evaluation of BAFOs, the Agency
decides that further negotiations are necessary, the competitive
Note 1 range may be narrowed before resuming negotiations and asking for
second BAFOs.
The section states that the source selection official (SSO)
is "usually a Contracts Management Division (CUD) Director or
equivalent level official." This is^dnaccurate since the SSO can
o be the Contracting Officer (CO) depending on the dollar value of
z the acquisition.
SCOPE AND METHODOLOGY
In the second paragraph of the scope and methodology section
and elsewhere in the report, inappropriate references are made to
competitively awarded "Small Business Administration (SBA)
set-aside contracts." The Office of the Inspector General (OIG)
may be referring to "small business set-asides" and not to SBA
Note 3 8(a) contracts. This should be clarified.
Footnote 3 at the bottom of Page 4 states that "... RTP
could not locate the contract file for one of the contracts in
our sample." This contract with Hewlett Packard (68D10005) was
transferred to Region 6 to be administered on January 12, 1993.
Note 4 OARM regrets that the OIG was not so informed at the time of the
review.
CHAPTER 2 - USE OF COMPETITIVE AWARD PROCEDURES DID NOT ALWAYS
RESULT IN COMPETITIVE CONTRACT AWARDS
OARM offers the following comments with regard to Chapter 2:
There is a sentence within the first paragraph on page 9
which states that, "The limited response for some of EPA's
solicitations was largely a result of conditions related to these
solicitations that favored incumbent contractors." While it may
be appropriate to conclude that the conditions probably
contributed to the lack of competition, OARM does not believe
Note 5 that the report supports this conclusion.
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Appendix I
BARRIERS TO COMPETITION RESULT IN LIMITED NUMBER OF PROPOSALS
The last sentence of the first paragraph in this section is
also conclusive. OARM suggests that the sentence be revised as
Note 6 follows: "These factors could be combined to limit the
competition for some EPA contracts...1*
EPA NOT ASSURED THAT IT RECEIVED THE BENEFITS OF COMPETITION
This discussion refers to the "prices" the Government pays.
Since the majority of the Agency's contracts (especially those
repetitive requirements with broad statements of work) are cost
reimbursement contracts, OARM believes that a discussion of
Note 7 "price" is inappropriate.
CHAPTER 3 - CONDITIONS THAT LIMIT COMPETITION EXIST IN THE
PROCUREMENT ENVIRONMENT
THE 8I2E AND DIVERSITY OF LOE CONTRACT SOWS MAY LIMIT COMPETITION
On page 23, two distinct factors may have contributed to the
extensive subcontracting discussed in this section. Contracts
which require a large level-of-effort, regardless of whether the
scope of work is broad, may lead to extensive subcontracting in
cases where contractors are not able to or choose not to directly
hire a large number of employees. A contract which involves a
broad, diverse scope of work, covering many areas of expertise,
may result in extensive subcontracting since no one contractor
Note 8 may have the required diversified staff.
Efforts to segment large level-of-effort contracts into
smaller contracts with fewer hours but the same statement of work
may not result in less subcontracting due to the diversity of
expertise required. In addition, such a practice creates
duplicate or "parallel" contracts which may lead to "contract
q shopping" where Project Officers/Work Assignment Managers can
N°te y choose the contractor they prefer for certain tasks.
RFP EVALUATION AND SCORING CRITERIA CAN LIMIT COMPETITION
The section on key personnel and letters of commitment
discusses how two Technical Evaluation Panels (TEPs) for two
different Requests for Proposals (RFPs) evaluated offerers'
hiring plans. While OARM agrees with the OIG that evaluation
criteria should not unduly favor incumbents, the TEP in each case
was required to score proposals based only on the criteria as set
forth in the RFP. The report should reflect not that both TEPs
should have considered a proposed hiring plan as a plus, but that
the criteria in both cases should have been more explicit on how
Note 10 hiring plans were being used in the evaluation.
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Appendix I
INDUSTRY PERCEPTIONS ABOUT THE STATUS OF INCUMBENT CONTRACTORS
SOMETIMES LIMIT COMPETITION
The section discussing the perception that EPA favored the
incumbent contractor mentions that "one company official told us
that the Agency's unwillingness to answer his written questions
concerning a repeat procurement convinced him that the program
office wanted to keep the incumbent contractor." The information
requested may not have been releasable under the Freedom of
Information Act. However, without specific details concerning the
Note 11 request, OARM cannot address the reasons for this reluctance.
RECOMMENDATIONS - CHAPTER 3
OARM offers the following comments on the recommendations in
this Chapter:
Recommendation 1; Evaluate large, complex contracts for the
possibility of splitting them into smaller contracts. Use of
multiple contract awards should be considered, whenever feasible,
to accomplish this splitting and, thereby, encourage greater
competition.
Response 1: OARM has some reservations about this recommendation
although in some instances this approach has increased competition
and broadened EPA's contractor base. OARM recommends that this
strategy be used when other mechanisms for enhancing competition
have been exhausted. It is sometimes more advantageous to package
EPA's requirements in a manner that may result in a contract with
numerous disciplines and large amounts of labor. Industry is
sometimes more receptive to larger acquisitions and will compete
more vigorously for these. It is also often necessary and
preferable from a programmatic objective to have one contractor
responsible for the total effort. OARM recommends that this be
Note 12 considered when developing EPA's requirements.
Re commendat i on 2; Better publicize future EPA contracting
opportunities to the contracting community. This could include
attendance at industry trade shows and seminars, and publication of
program office long-range procurement plans.
Response 2; OARM agrees with this recommendation. Relative to long
range plans being published, the Office of Acquisition Management
(0AM) has completed a Forecast of FY 94 contract requirements which
can be obtained by prospective offerers. Furthermore, each fiscal
year the Agency also makes available to industry the "Forecast of
Contract and Subcontract Opportunities for 8(a) and Small.
Business." Finally, the Agency will continue to attend industry
trade shows whenever possible.
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Appendix I
Second, the TEP Chairperson is responsible for convening the
TEP, making logistical arrangements, chairing the meetings, and
writing the report. The scores assigned to each offer must still
be reached by consensus of the TEP. For scoring proposals, each
TEP member is essentially equal in exerting influence over the
other members.
Third, prohibiting the Project Officer from serving as the
TEP Chairperson for a follow-on contract could hamper program
office use of its resources significantly. The Project Officer
is often the person most familiar with the technical requirements
of the acquisition. Furthermore, the number of staff able to
Note 14 serve as the Chairperson may be limited depending on the program
office workload at the time.
In summary, OARM considers that requiring a minimum of one
member of the TEP be from outside the program office will change
the composition of the TEPs considerably, and reduce the
appearance of favoritism for incumbents. The EPA policy revision
will be issued by June 1, 1994.
CHAPTER 4 - COMPETITION ADVOCACY PROGRAM CAN BE STRENGTHENED TO
PROMOTE COMPETITION FOR CONTRACTS AWARDED UNDER FULL AND OPEN
COMPETITION PROCEDURES
SCOPES OF FUNCTIONAL REVIEWS SHOULD BE EXPANDED
The third paragraph of page 53 states that the Agency was
not aware of the extent or lack of competition received for
solicitations under full and open competition until an analysis
was performed by the Competition Advocate in August 1993.
While a statistical analysis was not performed prior to that
time, all acquisition personnel at EPA were fully in compliance
with the Federal Acquisition Regulation (FAR) relative to
competition and had continually made efforts to enhance
competition. EPA has always been committed to receiving the
maximum amount of proposals in response to solicitations.
Acquisition plans will continue to specifically address the issue
of competition and how competition for the particular requirement
will be enhanced. The Agency has structured its statements of
work and evaluation criteria to accomplish this objective. The
Competition Advocate, in his January 1994 Annual Report on
Competition, discusses where competition has been enhanced. This
document is included as Attachment B.
The second paragraph on page 54 implies that Procurement and
Contracts Quality Assurance Reviews (PCQARs) are required to
address the extent of competition for full and open procurement
actions. However the Agency's Competition Advocate through his
functional reviews, approvals of acquisition plans and dialogue
Note 15 with Agency contract and program officials ensures that
competition will be enhanced to its fullest extent.
'65
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Appendix I
Recommendation 3; Develop and issue policy and guidance
concerning the preparation of technical evaluation criteria that:
a) Limits the evaluation of personnel experience and availability
to key personnel, the most important technical positions, and
project groups, as necessary, b) Limits the use of letters of
commitment and key personnel to those positions that are
essential to performing the contract SOW. Allows for the use of
other measures to show availability of personnel, such as hiring
plans and evidence of successful hiring for other contracts, c)
Establishes a policy for the percentage of points that can be
awarded in the area of corporate experience and personnel
experience and availability.
Response 3: in general, OARM agrees with the components of this
recommendation but suggests further analysis prior to the
issuance of policy directives. The Agency is reducing the use of
key personnel as an evaluation factor. The requirement of
numerous key personnel and letters of commitment give the
incumbent a competitive advantage which can and must be negated.
While OARM agrees that corporate experience should not be
weighted at greater than 15% of the technical evaluation
criteria, it does not necessarily agree that when the Agency is
buying the expertise of personnel through level of effort
contracts for professional services, no greater than 40% of the
points should be allotted for proposed personnel qualifications.
Under these types of level of effort contracts, the technical
expertise of personnel becomes of prime technical importance and
should be evaluated accordingly.
While OARM does not support a policy on the weighing of technical
evaluation criteria, it will continue to evaluate the criteria to
ensure that competition is enhanced to its maximum extent and the
incumbent is not given an unfair competitive advantage. Attempts
will be made to better define requirements which may help to
1-5 structure the technical evaluation criteria to enhance
1J competition.
Recommendation 4; Add additional provisions to the planned EPAAR
class deviation concerning the composition of TEPs. The
deviation should establish a requirement that prevents the
existing contract PO from serving as a member of the TEP for the
follow-on award, while allowing the PO to serve as a technical
advisor, when appropriate.
Response 4; OAK believes requiring a minimum of one member of the
TEP be from outside the program office will be sufficient to
address the appearance of favoritism for incumbents for the
following reasons. First, only a minority of the follow-on
contracts reviewed had the previous Project Officer as the
Chairperson of the TEP. More significantly, none of the TEP
members were from outside the requesting program offices.
66
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Appendix I
The Competition Advocate was misquoted by the OIG (the third
paragraph on page 54) as stating that PCQARs had previously
evaluated the extent of competition for competitively awarded
contracts. The Competition Advocate was referring to the annual
functional reviews performed by the Quality Assurance Branch
16 prior to the creation of PCQARs.
RECOMMENDATIONS - CHAPTER 4
OARM offers the following comments on the -recommendations in
this Chapter:
Recommendation l; Evaluate the feasibility, including cost, of
modifying the CIS to include the number of proposals received and
the number of acceptable proposals received for each contract
solicitation. The information regarding the number of proposals
received should be communicated to the GSA. If it is not
feasible to modify CIS; a) officially notify GSA that EPA's
reported data is not accurate with regard to competitive actions
that resulted in the receipt of only one proposal and b) request
that CMDs report to the Competition Advocate, the number of
proposals received in response to every competitive solicitation
within 30 days of the award.
Response 1; OARM will analyze the Contracts Information System
(CIS) to determine if it is feasible to modify it to include
fields for the number of proposals received from a competitive
solicitation, the number of proposals in the competitive range,
and whether the incumbent is to receive the award if the
requirement is a follow-on effort. Since the Agency's new
contracts information system, the Integrated Contract Management
System (ICMS), is scheduled to become operative in FY 96, this
may not be a cost effective endeavor. The ICMS will include
these fields. The Agency will consult with the General Services
Administration regarding the reporting requirements of the
Competition in Contracting Act. The Agency will need
clarification as to the need for data relative to "responsible"
sources and the suggestion of number of "acceptable" proposals.
OARM believes the intent is to gather information on a number of
proposals received and the number of proposals in the competitive
range. Data relative to whether the incumbent received a follow-
on award would also be of value. These discussions will occur by
Note 17 July l, 1994.
Recommendation 2; Use the data collected on the number of
proposals received for competitively awarded contracts to: a)
monitor the results of efforts to improve competition for
contracts awarded under competitive procedures; b) target future
efforts in areas where the data shows that competition is
lacking; and c) select contracts to review as part of the
Functional Reviews of Competition.
67
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Appendix I
Response 2; OAN will collect and analyze this data. Prior to
this, the Competition Advocate will perform a semi-annual
analysis similar to the August 1993 effort.
Recommendation 3; Expand the Competition Advocacy Program to
include associate competition advocates and competition
coordinators to assist in the Competition Advocate's efforts to
enhance competition for contracts awarded under full and open
competition. The Competition Advocate should work with the
competition coordinators to establish and monitor the attainment
of goals on the amount of competition received for the program
office's contracts.
Response 3; The Agency will formally designate Associate
Competition Advocates at each contract operations division within
OAM. Competition coordinators will continue to function in the
major program offices and will be formally designated by the
Agency. Once the ICMS is operative, there will be increased
opportunities to set goals for the amount of competition received
and increased dialogue between the Competition Advocate and the
competition coordinators. Currently the Competition Advocate in
conjunction with the competition coordinators set the goals.
These are monitored monthly relative to amount of dollars spent
through the competitive process. These formal designations will
be completed by July 1, 1994.
Recommendation 4; issue guidance and procedures to strengthen the
market research program and develop a market research plan that
is evaluated and updated annually.
Response 4; A "Forecast of FY 94 Contract Opportunities" is now
available for prospective contractors and will be issued for each
fiscal year. The Agency has also began to strengthen its
marketing program by revising Chapter 1 of the Contracts
Management Manual entitled "Acquisition and Contract Management
Planning." This planning system, available for FY 95, will
enable the Agency to better disburse to industry information on
the Agency's requirements and advertise these in the Commerce
Business Daily (CBD). The Agency always meets the FAR
requirement of CBD announcements for its requirements. It will
continue on an on-going basis to investigate methods to
aggressively provide information to prospective offerers when
appropriate.
Recommendation 5: Where appropriate, publish advance pre-
solicitation notices in the CBD and make available for comment
draft RFPs for complex solicitations that have had inadequate
competition in the past.
Response 5; The Agency has taken steps to obtain perspective
offerers' comments when competition has been lacking in the past.
Presolicitation notices have been used but are time consuming and
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Appendix I
labor intensive and contrary to any current Agency streamlining
efforts. The best method for obtaining advance comments is to
issue a draft RFP and synopsize this in the CBD allowing any
potential offerer to request a copy. The Agency will continue to
consider appropriate methods of enhancing competition for all
contract requirements.
6: Report in the Functional Reviews and Annual
Reports on Competition an assessment of the amount of competition
for contracts awarded under full and open competition procedures.
Response 6; OARM agrees that functional reviews should be
expanded to include amount of competition received for the
Agency's competitive acquisitions. The development of additional
data fields within I CMS will greatly enhance the Agency's ability
to gather statistics, set goals, and analyze trends.
7; Issue guidance instructing contracting offices
to conduct post-award efforts to determine reasons for the
receipt of only one proposal when it occurs. A plan to correct
causes for the absence of proposals should be prepared for the
follow-on contract award.
Response 7; OARM agrees that more follow-up steps could enhance
its ability to determine why more proposals were not received
from a competitive solicitation. It will investigate the
procedures implemented in the Cincinnati Contracts Management
Division for its use throughout the Agency. The Agency
acquisition regulations will be amended by May 1, 1994 to
strengthen the language required to justify why the solicitation
was not restrictive although only one proposal was in the
competitive range. Through this mechanism, the official contract
file will contain documentation that competition was maximized.
•Rec9fl""endation 8 ; Evaluate the solutions outlined in the
September 23 , 1993 memorandum to determine implementation and
monitoring responsibilities. Issue guidance where appropriate to
clearly delineate procedures and responsibilities for
implementing these actions.
Response 8; The Competition Advocate, along with the rest of OAM,
have taken steps to enhance competition. A December 1993 OIG
report, entitled Competition in Superfund Contracting.
(No. E15FF3-11-0020-4100111) , stated that the Agency has been
fairly successful in achieving competition for its Superfund
contracts. Due to the favorable findings, this report was issued
with no recommendations. Finally, on September .23, 1993, the OAM
Director issued a memorandum to the OAM Division Directors,
Headquarters Senior Resource Officials, and Regional Contracting
Officers, listing possible problems and solutions related to
competition. Appropriate guidance resulting from this memorandum
will continually be issued.
8
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[This page intentionally left blank.]
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Appendix I
Attachment B
Annual Report
on Competition
A report prepared pursuant to
The Competition in Contracting Act of 1984
(Public Law 98-369)
U.S. Environmental
Protection
January 1994
Office of Administration and Resources Management
Office of Acquisition Management
Agency Competition Advocate
Washington, O.C. 20460
7]
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Appendix I
ENVIRONMENTAL PROTECTION AGENCY
ANNUAL REPORT ON COMPETITION
JANUARY 1994
72
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Appendix I
TABLE OF CONTENTS
EXECUTIVE SUMMARY j
I. INTRODUCTION j.
II. EPA ORGANIZATION i
III. COMPETITION RESULTS SINCE THE ENACTMENT OF CICA 2
IV. PROMOTING COMPETITION 5
V. DOLLAR GOALS AND ACCOMPLISHMENTS FOR FY 93 6
VI. JUSTIFICATIOMS FOR OTHER THAN FULL
AND OPEN COMPETITION 7
VII. SPECIFIC AREAS IN WHICH COMPETITION 7
HAS BEEN ENHANCED
VIII. PLANS FOR INCREASING COMPETITION IN FY 94 14
ATTACHMENT (FY 93 COMPETITION STATISTICS) 17
73
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Appendix I
EXECUTIVE SUMMARY
FY 93 Accomplishments
The Agency established specific Fiscal Year (FY) 93
competition goals for all major programs. These goals were met
by all except one program who came within one percent of meeting
its goals. Overall, EPA obligated 97 percent of its contract
dollars on a.competitive basis during FY 93 which was a one
percent increase over FY 92. The EPA expended approximately 1.3
billion dollars during FY 93 through the acquisition process.
EPA obligated 99 percent of its contract dollars for
contracts in excess of $25,000 through full and open competition.
Of the small purchase dollars (actions of $25,000 or less), 69
percent were obligated competitively.
Promoting Competition
-Acquisition and program personnel at all levels continued to
challenge barriers to competition by utilizing innovative methods
of competing the Agency's requirements and breaking apart
requirements to allow industry to be more receptive to EPA's
competitive solicitations. Restructuring statements of work and
technical evaluation criteria are helping to reduce the
"incumbent advantage".
Specific Program Accomplishments
The Agency has continued to enhance competition througr. the
use of innovative procurement techniques. The "factory floor"
team approach where the same members of the program office,
contract office, general counsel, cost advisory office and the
competition advocate plan in advance and carry the acquisition
through until contract award has been utilized. Contract
personnel have continually emphasized minimizing the incumbent
advantage and breaking out statements of work to enhance
competition. Long term contracting strategies have been utilized
in the programs. Industry comments on proposed requirements have
been requested when time permits and industry conferences have
been attended to advertise EPA's requirements. Preproposal
conferences are held to communicate to industry EPA's serious
intentions for competition.
FY 94 Plans
EPA acquisition personnel and the ACA will continue to be
involved early in the acquisition cycle. Early planning is
essential to increasing and enhancing competition. Contract
74
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Appendix i
personnel will again emphasize clear statements of work and
unbiased technical evaluation criteria. Contracting Officers
will analyze program contracting needs on a total program
contracting strategy basis rather than on a contract by contract
basis. The ACA will monitor expenditure of program funds to
ensure that FY 94 competitive goals are met. Justifications for
Other than Full and Open Competition and Acquisition Plans will
continue to be critically reviewed prior to approval with the
goal of obtaining better competitions and reducing the incumbent
advantage in follow-on acquisitions. There will be more
proactive measures to increase competition and a greater emphasis
on documentation relative to why better competition was not
obtained on individual acquisitions.
11
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Appendix I
ANNUM, REPORT ON COMPETITION
I. INTRODUCTION
The Environmental Protection Agency (EPA) continues to be at
the forefront of efforts to increase competition in Government
contracting. The EPA has always emphasized competition in the
acquisition of its requirements, resulting in impressive savings
of taxpayer dollars and broadening the base of contractors with
which the Agency contracts. The EPA expended a total of
approximately 1.3 billion dollars for large and small purchases
though the acquisition process during FY 93. This report, which
is required by 41 U.S.C. 418, discusses FY 93 competition
results, the role of the Competition Advocate, and actions
underway to further increase competition and strengthen the
industrial base.
II. EPA OROANI2ATIOM
In December 1984, in accordance with the Competition in
.-ntracting Act of 1984, the Director of the Procurement and
Contracts Management Division appointed an Agency Competition
Advocate (ACA) to promote full and open competition in the award
of contracts. To aid the ACA, an associate competition advocate
is located at each major contract activity and a competition
coordinator represents each major EPA program. It is largely
through adoption of this organizational structure that EPA was
able to award 97 percent of its total contract dollars available
for competition (including small purchases) through the
competition process during FY 93, an increase of one percent from
FY 92. The ACA's primary responsibilities are to:
o Develop, direct and maintain the competition program to
ensure that competition initiatives are incorporated
and implemented at all levels.
o Assure that oversight mechanisms are established to
provide visibility on any problems or obstacles in
obtaining competition.
o Establish Agency competition goals on specific programs
and monitor progress towards those goals on a monthly
vasis. In furtherance of these goals, maintain active
.iaison with competition coordinators and associate
competition advocates.
o Ensure that competition is planned early in the
acquisition process to minimize factors inhibiting full
76
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Appendix I
and open competition. Consider all reasonable competi-
tive alternatives. Promote market research to identify
competition potential in support of acquisition
strategies before the procurement decision is
irrevocably made. Ensure that individual acquisition
plans are in concert with CICA and maximize
competition.
o Review and approve/disapprove Justifications for other
than Full and Open Competition for proposed prime
contracts exceeding $100,000 and Determinations and
Findings for exclusion of certain sources. JOFOCs of
$100,000 and less are reviewed through the functional
review process at the operational level.
o Serve as the EPA spokesperson for competition to
industry, other Government agencies, and EPA program
offices.
III. COMPETITION RESULTS SINCE THE ENACTMENT OF THE COMPETITION
IN CONTRACTING ACT OF 1984
The EPA has consistently maintained an outstanding
performance in its award of contracts by the competitive process.
Full and open competition has allowed the Agency to reduce
overall costs for its requirements and broaden its contractor
base. By having more qualified, interested firms participating
in the contracting program, the Agency will continue to maintain
an excellent competitive posture. EPA staff are convinced that
competition provides lower costs, better cost control, higher
quality, improved schedules, and a stronger industrial base. All
these contribute to efficient use of taxpayer resources. The
graphs on pages three and four of this report depict EPA's
percentages of actions and dollars awarded competitively since
FY 88. These percentages are based on EPA's data base as of
January 19, 1994. Final data will not result in any significant
changes in these graphs.
As in the past, these statistics are evidence that the
Agency has recognized the need for and successfully achieved
competition throughout EPA's programs. The Agency is
continuously investigating new methods to competitively award
contracts for its requirements and is obtaining greater response
from the contracting community to its solicitations. The section
on "Specific Areas in Which Competition has been Enhanced"
provides impressive examples of innovative acquisition
techniques.
77
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Appendix I
UJ
O
cc
UJ
Q.
COMPETITIVE AWARDS
FY88 - FY93
FY88 FY89 FY90 FY9I FY92 FY93
TOTAL $ OBLIGATED COMPETITIVELY
TOTAL ACTIONS AWARDED COMPETITIVELY
Based on statistics as of January 19,1994
-------
ui
o
DC
at
o
cc
01
o.
>\ppenaix a.
COMPETITIVE AWARDS $25,000 AND BELOW
FY88 - FY93
100
80
60
40
20-
81 82 81 81
- -
i'ff.
FY88 FY89 FY90 FY9I FY92 FY93
Q TOTALS OBLIGATED COTPETITIVELr
0 TOTAL ACTIONS AWARDED COMPETITIVELY
COMPETITIVE AWARDS OVER $25,000
FY88 - FY93
100
80-
60
40
20-
98 98
99 99
98 98
I
I
1
FY88 FY89 FY90 F*91 FY92 FY9I
Q TOTALS OBLIGATED COr3£TlTlvELv
^ TOTAL ACTIONS AWARDED COMPETITIVELY
Based on statistics as of January 19, 1994
79
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Appendix I
IV. PROMOTING COMPETITION
Acquisition and program personnel at ail levels continue to
challenge barriers to competition. Section VII delineates
specific areas in which competition has been enhanced in FY 93.
Contract and Program Specialists continue to emphasize
competition by:
o Analyzing major acquisitions involving a number of
separate tasks to determine the acquisition method best
suited to enhance competition. This includes examining
each task and determining whether to separate tasks or
combine them, depending on which method is most likely
to generate the most competition.
o Improving the quality of specifications and statements
of work, including in certain instances, publishing
proposed requirements for public comment prior to
issuance of a 'solicitation.
o Encouraging advance planning involving the contracting
officer and ACA. competition is best achieved when
planned for early in the acquisition cycle. In some
instances, all fiscal year requirements are being
reviewed at the beginning of the year to develop a
total contract strategy for a particular technical
program.
o Researching technological developments and market
trends to determine existing sources of supply and
develop additional sources in support of the entire
range of the Agency's acquisition needs.
o Taking proactive measures to increase the number of
proposals received. These include market surveys,
counseling contractors to make them more aware of EPA's
requirements, holding preproposal conferences to allow
dialogue between the Government's contract and program
personnel and the contractor community, conducting
post-award surveys of non-bidders and holding general
program requirements conferences.
o Coordinating the activities of various subject matter
specialists (engineers, attorneys, scientists,
financial analyst, contract specialists) as necessary
to carry out the plans and goals for increasing
competition throughout the Agency.
o Promoting competition at procurement conferences and
training seminars, to program personnel, contracting
operations, and small purchase activities.
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Appendix J.
Participants discuss results of the previous fiscal
year and goals and plans for the next fiscal year.
Question and answer sessions help to communicate the
Office's competition philosophy and the requirements of
the Federal Acquisition Regulation.
o Disseminating written policies and procedures
throughout the Agency. The ACA annually updates the
pamphlet describing EPA's competition program, which is
distributed to Agency personnel and to members of the
contract community.
o Stimulating greater competition in subcontracting. EPA
conducted contractor purchasing system reviews at six
major contractor facilities during FY 93.
Approximately 12 reviews are planned for FY 94. A
fundamental element of these reviews is the degree of
competition exercised by prime contractors in their
award of subcontracts. Contractor file documentation
is reviewed to assure that competition is emphasized.
Reviewers counsel contractors regarding the required
documentation to support a subcontract award.
V. DOLLAR GOALS AND ACCOMPLISHMENTS TOR TY 93
Overall, EPA obligated 97 percent of its contract and small
purchase dollars available for competition under full and open
competition.
The Agency established specific FY 93 competition goals for
all major programs. The ACA and the program competition
coordinators mutually agreed to a percentage of dollars, ranging
from 95 percent to 97 percent, that would be obligated for their
requirements through full and open competition. The ACA reported
progress toward these goals to each program monthly.
All except one program met their goals in FY 93. This
program came within one percent of meeting its goal. EPA
obligated 99 percent of its available dollars for contracts in
excess of $25,000 through full and open competition. The FY 93
percent remains exceptionally high and continues to reflect the
emphasis placed by EPA personnel on awarding contracts through
the competitive process.
Of the small purchase dollars (contract actions of $25,000
or less) available for competition in FY 93, 69 percent of these
dollars were obligated competitively. This percentage is
consistent with EPA's past record and is considered excellent for
the types of requirements purchased using this means.
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Appendix I
Attached to this report is a chart of FY 93 statistics. It
is presented in the format established by the Office of Federal
Procurement Policy in a December 9, 1985 memorandum.
VI. JUSTIFICATIONS TO* OTHER THMI TtJLL MID OPEN COMPETITION
Only three percent of the Agency's obligated contract
dollars were awarded without full and open competition. As in
the past, EPA limited approvals of Justifications for Other than
Full and Open Competition (JOFOCs) to those instances where, for
example, the Agency had no other choice but to award on a
noncompetitive basis. Situations when this occurs include if
scientific objectives and Congressional mandates were to be
achieved; when the public health and welfare was at stake; when
time was of the essence to alleviate an immediate danger; or to
allow additional tine for the award of a follow-on contract. EPA
will again strive to reduce noncompetitive situations in EPA
during FY 94.
VII. SPECIFIC AREAS IN WHICH COMPETITION HAS BEEN ENHANCED
The Agency has enhanced competition in many areas during
FY 93 including the following:
Headcruarters ADP Procurement Branch
In FY 93, a critical decision was made to break into two
parts what had been a singe contract effort, the Records
Management and Library Service contract. The follow-on
procurement will make a logical split in these functions and
provide for a greatly expanded environment for increased
competition. This is especially important to the small business
and small-business/disadvantaged business community. This
contract is targeted for award in FY 94.
A similar type of breakout was also made for the
requirements associated with the Office of Research and
Development. In this area, EPA will pursue two separate
contracts for different requirements. This approach also
mitigates the conflict of interest issues that historically grow
out of combinations of requirements under one prime contractor.
Another approach to increasing competition has been the
movement away from competitive proposals resulting from a request
for proposal to the sealed bid method in those instance where
there are standard commercial items and pricing. Using the
sealed bid method stimulates a wider field of offerers,
82
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Appendix I
especially in the snail business community. The simplification
of the sealed bid method saves small business time and money in
the procurement process, since the cost for proposal revisions
and negotiations need not be incurred.
Headquarters Administrative Procurement Branch (APB1
The Office of Policy, Planning, and Evaluation (OPPE)
experienced a lack of competition on some of their procurements
over the last few years. In order to increase competition, the
Administrative Placement Section and OPPE developed a procurement
strategy that divides the work up into more narrowly defined
technical areas to allow the smaller and more specialized firms
to effectively compete. An example of this is the procurement
for analytical support in the evaluation of the domestic and
international implications concerning the quality of land and
water resources.
The solicitation was issued with one statement of work to be
used for three contract awards. The solicitation included, in
effect, three different sets of technical evaluation criteria
each emphasizing a special work area. The purpose of this
approach was to allow firms with specialized expertise to compete
and do well based on technical evaluation criteria giving greater
weight to their area of expertise. In the past, firms with
expertise across the entire spectrum of work areas had a real
advantage and often received contract awards as a result of being
the only offerer. The result of this strategy has been a
significant increase in the number and quality of proposals.
Headquarters Purchasing and Contract Management Branch (PCMB1
The Purchasing and Contract Management Branch (PCHB) did not
undertake any major initiatives for increasing competition in
FY 93 in the small purchase arena. However, efforts aimed at
other problems have served to increase competition. In order to
improve EPA'a process of continuing ongoing maintenance of office
machinery (photocopy, fax, etc.), PCMB consolidated like items by
type, make and model into unified requirements. In several cases
competitive price reductions were obtained with this volume
buying. In another case, work among GSA mandatory schedule
holders was competed and resulted in a 5% price reduction off the
GSA schedule price of over one million dollars for office
furniture and equipment.
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Appendix I
Super fund/RCRA ^eqqquarters Operations Branch (SRHOB)
Contract Award
During FY 93 the SRHOB Placement Section awarded seven
contracts with a total value of $93,285,727. Of the seven
contract awards, two were 8 (a) procurements and the rest were
competitively let, including one small business set aside. It
should be noted that 99.5 percent of contract dollars were
awarded competitively.
A notable achievement was the competitive award of a small
business set-aside for support for the National Priorities List.
The three previous contracts for this requirement had been
awarded on a sole-source basis to the same contractor. Through
the successful use of a Commerce Business Daily (CBO) sources
sought synopsis, the Contracting Officer was able to determine
that adequate competition existed among the small business
community and a competitive small business set-aside was utilized
to meet the Agency's needs.
Ongoing Acquisition Planning
During FY 93 important decisions concerning competition were
reached during the early stages of acquisition planning on
several large, complex procurements. Statements of work (SOWS)
were examined and redrafted from the standpoint of breaking up
umbrella-type requirements into smaller, more discrete efforts
providing for greater competitive opportunities. In both SOWS
and technical evaluation criteria, Agency-specific experience was
minimized and generalized where possible to mitigate the
advantages of incumbency. Similarly, technical evaluation
criteria were scrutinized to ensure that comparable non-Agency
experience was given equally credit during the technical
evaluation of offers. Zonal requirements were designed to allow
for the participation of smaller, regionally-based firms in the
competition.
A benefit of the Agency's increasing sensitivity to issues
relating to organizational conflicts of interest has been an
increase in competitive opportunities for the private sectors.
In order to "ensure that contractor support is available to the
Agency in the event a contractor develops a specific conflict of
interest, individual requirements are frequently divided into
multiple awards further enhancing competitive opportunities.
Initiatives Taken to Enhance Competition Under the Suoerfund Long
Term Contracting Strategy (LTCS1
The Superfund LTCS encompasses five major contract classes
which will provide contractor support to the three primary
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Appendix 1
programs, being Enforcement, Remedial and Emergency response. It
is presently envisioned that each class of contracts will result
in awards on either a regional basis or a regional zone basis.
Specifically, the Response Action Contracts (RACs) , Enforcement
Support Services Contracts (ESS) , and Superfund Technical
Assessment and Response Team contracts (START) will be procured
on a regional basis and the Emergency ERRS and Regional Oversight
Contracts (ROCs) will be processed on a regional or zonal basis.
To date Requests for Proposals (RTFs) have been issued for
RAC and ESS contracts. Overall, we consider competition for
these procurement to be excellent for the following reasons:
• The geographical area of performance is limited to an EPA
region thereby enabling mid-sized firms that are not
nationally based companies to focus on a discrete geographic
area.
• A preproposal conference was held for each contract class to
allow offerers an opportunity to ask questions or obtain
clarifications regarding any aspect of the RFP. This
enables offerers to obtain a more thorough understanding of
the Agency's technical and business requirements.
• Finally, the period for proposal preparation and submission
has been expanded from the traditional thirty day response
time to forty-five days for ESS and sixty days for RACs.
Additional time for proposal preparation allows offerers the
time to establish teaming arrangements and develop a
comprehensive proposal which thoroughly addresses all
aspects of the evaluation criteria. Thus, more time ideally
translates into better planning and preparation.
Contracts MaffUfpt Divisio
Cincinnati Contracts Management Division (CCMD) has
conducted a number of presolicitation conferences in order to
increase contractor interest and enhance competition. Examples
of these types of presolicitation conferences were the
conference* for -seven special equipment buys (up to six million
dollars) in 'support of the Office of Air and Radiation's (OAR)
Office of Mobile Sources laboratory at Ann Arbor, Michigan.
These presolicitation conferences were also conducted on several
Office of Water (OH) programs. These include the EPA Standing
Committee on Improving Contract Management's "Factor Floor"
project for the development of Effluent Guideline's for the Metal
Industry and the seven solicitations that constitute the previous
single contract supporting the National Pollutant Discharge
Elimination System (NPDES) .
10
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appendix
CCMD issued draft statements of work (SOW), technical
evaluation criteria, conflict of interest provisions, estimated
level of effort (LOE) and skill mix to industry, on nine Office
of Hater solicitations, requesting their questions, comments and
responses to the proposed procurement packages. The responses
were incorporated into the final package prior to the actual
release of the solicitations requesting contractor's proposals.
When only one offer was received on competitive
solicitations, letters were sent to each company on the source
list that did not respond to the solicitation. The letters
requested reasons for not responding to the solicitation as well
as suggestions to make the solicitation more competitive in the
future. Responses were shared with the local Small and
Oisadvantaged Business Utilization Specialist (SADBU) and the
supported Program Office.
CCMD worked with the local SADBU and various program offices
to breakup large procurements which were perceived as inhibiting
competition. The single $92 million Office of Water (OW)
contract was broken into a total of eight contracts of various
sizes. Some were set aside for small business while others were
limited to 8(A) firms. The OW Factory Floor project which
consisted of 1 contract to support development of "Effluent
Guidelines for the Metal Industry" has been broken into three
solicitations. The Office of Solid-Waste and Emergency Response
(OSWER) Response, engineering and analytical contract was trimmed
from $188 million to just over $100 million. The services which
were trimmed out are being solicited under a number of new
smaller, narrower focused solicitations where greater competition
is expected.
In some cases where a new competitive strategy has not been
fully developed, CCMD awarded shorter "Bridge" contracts to cover
the period from the end of the expiring contract to the award of
a competitive follow-on contract. This was done for the Office
of Research and Development (ORD) for the on-site technical
support at Vint Hill, VA where a "Bridge" contract was awarded
for a period of only 18 months, rather than the customary 60
months, to allow time to further develop long range requirements
and a competitive strategy. The on-site technical support
contract for the Environmental Research Laboratory at Corvallis,
Oregon was also awarded as a "Bridge" contract for only 21 months
to allow additional time to further develop a long range
competitive strategy. Even the "Bridge" contract has already
been reduced by 40% of its original size and has been broken into
several smaller competitive solicitations.
CCMD has decreased the number of key personnel specified in
the technical evaluation criteria. An example of this is in the
on-site te .inical support ontract for the Environmental Research
11
-------
Appendix I
Laboratory at Corvallis, Oregon where the number of key personnel
on the previous competitive contract was 73 and has been reduced
on the current solicitation to just 4. CCMD has also changed the
number of points for various technical evaluation criteria. The
percentage of points for key personnel has been lowered to no
more than 15% while there has been an increased concentration on
the corporate and management plans. This has been done to
increase competition by reducing the inherent advantage of the
incumbent.
Research Triangle Part - Contracts Management Division
To enhance competition on small business set-asides for
requirements that historically had one small business offerer,
the incumbent was called and asked to provide names of potential
sources. The suggested sources were called to determine
capability and interest. Given favorable responses, the
procurement was advertised as a competitive business set-aside.
An example of this was RFP D30005M1, "General Support for the
Office of Environmental Engineering and Technology
Demonstration." The original RFP in 1991 resulted in one offer.
This most recent solicitation resulted in ten small business
offers.
Capabilities of current small business team subcontractors
have been reviewed to determine possibilities for scope of work
break-outs or small business set-asides for follow-on
acquisitions. This procedure resulted in five competing offers
under Acquisition No. D201848M1 as a small business set-aside.
No competition had been achieved against a large business
incumbent contractor under a prior acquisition handled as full
and open competition.
Scopes of work which were bundled were broken up into
separate, distinct requirements so that more than one contract
resulted. Acquisition No. D301463M1 was a follow-on effort where
the statement of work for the previous procurement had been
broken-up into six major areas. This acquisition included a
partial small business set-aside and resulted in seven contracts
supporting various air pollution control programs.
Sources were obtained from other federal agencies. For
example, the National Institute of Environmental Health Sciences
(NIEHS) has similar research and on-site support requirements and
is located at RTF. RTP conferred with NIEHS regularly to expand
the source list by adding companies which submitted offers to
NIEHS for similar acquisitions. (Example: Counseling contract,
RFP D300248M1)
12
87
-------
Appendix I
Statements of Work were reviewed and revised as necessary to
assure that they were clear, concise, and not restrictive or
biased towards a particular offerer or the incumbent. Each
procurement was also reviewed to assure that the technical
evaluation criteria were not restrictive.
Small business trade-fairs were attended. CMD-RTP also
sponsors and co-sponsors several small business events on an
on-going basis. The acquisition forecast for small businesses
and 8(a) contractors and the active contracts list were provided
to requestors, distributed to walk-in visitors, and made
available at trade fairs. These documents provided expiration
dates of existing contracts which enabled interested offerers to
explore in advance the resources, teaming arrangements, and
feasibility of submitting an offer on a follow-on contract.
The Small Business Administration (SBA) Procurement
Automated Source System (PASS) was searched for additional
sources. CMD-RTP has in-house capability to access the PASS.
Firms were added to solicitation source lists to generate
interest and encourage competition.
Pre-bid conferences were held when it was believed that they
would increase competition. During FY 93, RTP received two
proposals in response to a solicitation for Modeling, Monitoring
Systems and Quality Assurance. Cr. a subsequent solicitation,
D300119M1, with somewhat the same requirements, a pre-bid
conference generated additional interest which resulted in
attendance by fourteen firms and five offers.
Requirements of $10,000 - $25,000 were posted on a bid board
which is located in the lobby of the EPA-RTP Administration
Building. This posting allowed business representatives who
visited the facility an opportunity to obtain information on
small purchase requirements. Additionally, it allowed companies
who are not on the EPA source list to also have an opportunity to
submit an offer. Technical/programmatic reference materials are
also made available to offerers in the EPA library to assist them
in preparing proposals and to reduce the advantage of incumbency.
A determination and Finding (D&F) to exclude sources was
approved to award two contracts for Region I under Solicitation
No. D200158L1. This allowed for back-up contract support in
instances of organizational conflicts of interest and also helped
maintain a competitive base. A D&F to exclude sources was
prepared for Acquisition No. D300134M1. This is-, an attempt to
develop competition where there has been diminishing competition
in the past. Additionally, a partial small business set-aside
has been recommended for this acquisition.
13
88
-------
appendix j.
VIII. FLAMS TOR IMCRBA8IMG COXPETXTXOM IH 7T 94
EPA personnel will take the following actions to increase
competition in FY 94:
• Analyze major acquisitions involving a number of
separate tasks to determine the acquisition method best
suited to enhance competition.
o Break apart requirements where competition would
be enhanced by doing so.
o Award more than one contract to develop sources.
The Agency may receive improved quality and at
less costs to the government.
o Award smaller and in some instances site specific
contracts to spread EPA's requirements over a
broader base of contractors.
• Improve the quality of specifications and statements of
work including in certain instances publishing proposed
requirements for public comment prior to issuance of a
solicitation.
o Statements of work must be closely reviewed to
ensure that they are not restrictive and the
incumbent does not have an-unfair competitive
advantage above that inherent in being the current
contractor.
O Evaluation criteria must be scrutinized to ensure
that they are not favorable to any one contractor.
Do not assign too much weight on factors such as
corporate experience or past experience
specifically unique to the requirement if general
requirements will allow EPA to accomplish its
objectives.
• Encourage advance planning involving the contracting
officer, project officer, Office of Small and
Disadvantaged Business Utilization representative,
Agency Competition Advocate, and any other concerned
party.
O The Agency must develop a "user friendly" advance
planning system to forecast what is to be
contracted for in the upcoming years.
14
89
-------
Appendix I
o Competition is best achieved when planned for
early in the acquisition cycle.
o This system will also allow set asides for 8(a)
and small business participation.
o Advance planning documentation procedures are
presently being revised and will be available FY
95.
Research technological developments and market trends
to determine existing sources of supply and develop
additional sources to support the Agency's acquisition
needs.
o Package EPA requirements in a manner that will
have more appeal to industry's capabilities.
o Advertise EPA's acquisition in the Commerce
Business Daily and where applicable trade journals
and other media.
o Conduct surveys of present contractors,
contractors who proposed and did not get an award,
and future sources of supply to solicit their
ideas on how EPA may increase their competition.
Take proactive measures to increase the number of
proposals received.
o Perform market surveys, counsel contractors to
make them more aware of EPA's requirements and
hold preproposal conferences to allow dialogue
between the Government's contract and program
personnel and the contractor community.
o Attend industry sponsored symposiums and meetings
and participate in these forum to communicate EPAs
requirements to be contracted for in the
relatively near future.
Establish the requirement that a detailed explanation
must be incorporated into the official contract file
relative to how well the contracting officer considers
that competition was obtained.
o Develop a questionnaire to be routinely sent to
anticipated offerors who did not propose on a RFP
inquiring why they did not submit a proposal.
15
90
-------
Appendix 1
o if adequate competition is not obtained, review
all documentation, statements of work and
evaluation criteria to ensure we were not
restrictive in any way.
Continue the establishment of program goals relative to
how many dollars are to be spent competitively and
monitor these goals monthly.
o Goals should be discussed at a minimum at an
annual meeting where the advance planning
documents are discussed.
o The competition advocate will meet with program
officials and contract personnel to ensure that
competition goals are met and the Agency's
competition philosophy is being carried out.
Promote the values of competition at EPA procurement
conferences and training seminars, to program
personnel, contract operations, and small purchase
activities.
o Participants discuss results of the previous
fiscal year competition goals and plans for the
next fiscal year.
O Establish question and answer sessions to help
communicate the 0AM's competition philosophy and
the requirements of the Federal Acquisition
Regulation throughout the Agency.
o Trends for the type of competition we are getting
should be discussed and problems identified.
o Competition overall and competition in the
competitive range should be considered and it's
relative importance evaluated.
16
91
-------
Appendix I
FY 1993 COMPETITION STATISTICS1
CONTRACTS
PROCUREMENT
ACTIONS
OVER $25,000
I. Actions Available
for Competition
A. Actions Competed
B. Actions Not
Competed
c. Total Available
II. Actions Excluded2
III. Total Actions
NUMBER
OF
ACTIONS
8,193
170
8,363
761
9,124
PERCENTAGE
OF
AVAILABLE
ACTIONS
98
2
100
xxxx
xxxx
DOLLAR
OBLIGATIONS
($000)
1,083,892
15,468
1,099,360
63,394
1,162,754
PERCENTAGE
OF
AVAILABLE
DOLLARS
99
1
100
XXXX
xxxx
SMALL PURCHASES
PROCUREMENT
ACTIONS
$25,000 AND BELOW
I. Actions Available
for Competition
A. Actions Competed
B. Actions not Competed
c. Total Available
II. Actions Excluded3
III. Total Action*
NUMBER
OF
ACTIONS
10,576
6,639
17,215
26,503
43,718
PERCENTAGE
OF
AVAILABLE
ACTIONS
61
39
100
XXXX
xxxx
DOLLAR
OBLIGATIONS
($000)
54,527
24,564
79,091
7,793
86,884
PERCENTAGE
OF
AVAILABLE
DOLLARS
69
31
100
XXXX
xxxx
l. Based on preliminary statistics available as of January 19, 1994.
2. Includes awards made under the 8(a) set-aside program.
3. Represents open market purchases of $1,000 and below, which are not
required to be competed under the Federal Acquisition Regulations.
92
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Appendix II
Page 1 of 4
PIG COMMENTS ON THE ASSISTANT ADMINISTRATOR'S RESPONSE TO THE
DRAFT REPORT
The Assistant Administrator's response to the draft report is
shown in Appendix I. The following notes refer to specific
sections of the Assistant Administrator's response (the note
reference numbers below correspond with note reference numbers
which we have placed in the left margin of Appendix I).
Note 1 We eliminated the sentence that referred to the
narrowing of competitive ranges after receipt of
revised technical proposals.
Note 2 We changed the wording in the final report to state
that the source selection official is usually a
contracting officer or higher level official.
Note 3 We have changed the wording in the final report so that
the cited phrases read "small business set-asides."
Note 4 We have revised footnote 3 to reflect information
subsequently received that the missing contract file
was transferred to Region 6 on January 12, 1993, for
administration purposes.
Note 5 We have revised subject sentence to reflect that the
limited response was attributable, in part, to
conditions related to these solicitations.
Note 6 We have revised subject sentence to reflect that these
factors may combine to limit competition.
Note 7 Although the effects of competition on price may be
more pronounced for fixed-price contracts than cost-
reimbursement contracts, we believe cost-reimbursement
contracts can still benefit from the price effects of
competition. The FAR makes several references to fair
and reasonable prices for cost-reimbursement contracts.
For example, FAR 15.803(c) states that price
negotiation is intended to permit the CO and the
offerer to agree on a fair and reasonable price. The
Government's negotiation position would benefit from
the presence of several competitive proposals. In
addition, competing companies may incur and/or propose
different costs. A competitive environment may force
companies to cut overhead costs resulting in lower G &
A expenses. In addition, companies can propose lower
fees (profit) than their competitors.
93
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Appendix II
Page 2 of 4
Advance estimates of cost may not be valid indicators
of final cost in all cost-reimbursement contracts.
However, in a competitive environment a company would
need to be concerned about controlling costs and
avoiding excessive overruns on its cost-reimbursement
contracts. Office of Federal Procurement Policy Policy
Letter No. 92-5 establishes requirements for evaluating
contractor past performance and using past performance
information in the selection process. This letter
states that included in a contractor's past performance
is "...the contractor's record of containing and
forecasting costs on any previously performed cost
reimbursable contracts." Accordingly, a history of
excessive overruns should negatively effect a firm's
chances for subsequent cost-reimbursement contracts
when competing against equally qualified companies that
do not have a history of excessive overruns.
Over time, as knowledge about the work requirements of
some cost-reimbursement contracts increases, these
contracts could be converted to fixed-price. The
Standing Committee on Contracts Management (now called
the Resource Management Committee) recommended that EPA
use contract types other than cost-reimbursement
contracts where appropriate. In response to that
recommendation, the Agency plans to select a candidate
to pilot multiple awards which will include use of
hybrid contracts; i.e., LOE contracts with work
assignments issued on either a cost-reimbursement or
fixed-price basis.
Note 8 We agree that these two separate factors can increase
the use of subcontracting. We have added descriptions
of these factors in the final report.
Note 9 We agree that splitting contracts by simply creating
smaller contracts with fewer hours may not necessarily
reduce subcontracting. We also agree with the
Assistant Administrator's concerns about "parallel"
contracts. However, splitting can be accomplished
through other means than just breaking up the number of
labor hours required. For example, large contracts can
be split along geographical boundaries when applicable,
such as the Superfund program has done. In addition,
multiple contract awards do not have to exclusively be
"parallel" awards. We noted that OAQPS, on more than
one occasion, awarded multiple contracts based on a
single RFP in which the SOW was split into distinct
(not parallel) sections.
94
-------
Appendix II
Page 3 of 4
Note 10 We recognize that TEPs are required to follow the
evaluation and scoring plan as outlined in the RFP.
However, our point was that we believe the Agency
should be more consistent in the way that similar
evaluation criteria are treated for similar contract
awards. We have added language to our final report
that clarifies our position.
Note 11 In reviewing this contract file, we saw no indication
that the information requested was not releasable under
the Freedom of Information Act (FOIA). An amendment to
the RFP for this award indicated that some questions
were not answered because these questions "invited" EPA
to write the offerer's proposal for them. The
amendment stated that EPA was looking for creative
thought in the proposals. The amendment did not
mention releasability under FOIA as a reason for not
disclosing the information.
Note 12 We do not believe our recommendation is inconsistent
with the Assistant Administrator's preference to use
multiple contract awards as an option. Our
recommendation stated that "...multiple awards should
be considered, whenever feasible..." Accordingly, we
have not changed the wording of our recommendation in
the final report.
Note 13 We did not recommend that EPA institute a policy that
40 percent of the total points be used as a limit for
personnel qualifications. Our draft report indicated
that 40 percent was used for illustration purposes. We
believe the actions taken and planned by the Agency
will be adequate provided they concentrate on the
evaluation areas of key personnel, corporate
experience, and personnel experience and availability.
We revised the final report to recommend that EPA
monitor and evaluate these areas to ensure that
incumbent contractors are not given an unfair
advantage.
Note 14 We agree with the Agency's planned revision to require
that at least one member of a TEP to be from outside
the procuring office. We believe that in some
instances more than one TEP member should be from
outside the procuring office. ORD's Office of
Environmental Processes and Effects Research has issued
guidance requiring at least two members be from outside
the procuring office when panels are comprised of five
95
-------
Appendix II
Page 4 of 4
or more members. We believe EPA's policy should adopt
this approach. We have revised our recommendation in
the final report to reflect this position.
Note 15 The final report indicates that Procurement and
Contracts Quality Assurance Reviews (PCQAR) are not
required to address the extent of competition.
Note 16 We deleted this statement from our final report.
However, our review of PCQARs showed that past reviews
looked at the extent of competition for competitively
awarded contracts while a recent review did not.
Note 17 We agree that such clarification should be obtained.
Based on our review of reporting guidance issued by
GSA, they only require information based on the total
number of proposals received. However, we agree that
information on the number of proposals in the
competitive range is valuable information and that it
would be beneficial to include in EPA's planned ICMS,
whether or not this information is required for CICA
purposes.
96
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Appendix III
Page 1 of 1
GLOSSARY OF ACRONYMS AND ABBREVIATIONS
F -
ACS
APDS
CICA
CBD
CIS
CMD
CO
CS
D &
EPA
EPAAR -
FAR
FPDS -
FY
G & A -
GAO
GSA
ICMS -
JOFOC -
LOE
NIH
0AM
OAQPS -
OIG
OPPE -
ORD
PCQAR -
PO
QAT
RFP
RTP
SBA
SOW
TEP
Automated Contract System
Automated Procurement Data System
Competition In Contracting Act of 1984
Commerce Business Daily
Contract Information System
Contracts Management Division
Contracting Officer
Contracting Specialist
Determinations and Findings
Environmental Protection Agency
Environmental Protection Agency Acquisition Regulation
Federal Acquisition Regulation
Federal Procurement Data System
Fiscal Year
General and Administrative
General Accounting Office
General Services Administration
Integrated Contract Management System
Justification for Other Than Full and Open Competition
Level of Effort
National Institute of Health
Office of Acquisition Management
Office of Air Quality & Planning Standards
Office of Inspector General
Office of Planning, Policy and Evaluation
Office of Research and Development
Procurement and Contracts Quality Assurance Review
Project Officer
Quality Action Team
Request for Proposal
Research Triangle Park, NC
Small Business Administration
Statement of Work
Technical Evaluation Panel
97
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98
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Appendix IV
Page 1 of 3
PRIOR OIG/GAO REVIEWS WITH CONTRACT COMPETITION FINDINGS
1. Status of EPA's Contract Management Improvement Program,
GAO/RCED-87--68FS issued January 1987. EPA appointed an
Agency competition advocate. In addition, EPA assigned 5
associate competition advocates from its 3 major procurement
operations and 11 program competition coordinators from its
major programs to assist the agency competition advocate in
removing barriers to competition.
2. Report on Audit of EPA's Planning. Negotiating, Awarding and
Administering of ERGS Contracts. Report NO.E5E26-05-0101-
61508 issued September 1986. Better planning and more
aggressive actions by procurement officials were needed in
order to increase competition for these Superfund contracts.
EPA maintained two large multi-regional zone contracts that
were so demanding and large that very few companies could
compete.
3. Survey of the Alternative Remedial Contracting Strategy: -
Contract Bidding and Award Process, Report No. E1SGB9-11-
0021-0100274 issued April 1990. The ARCS program was
structured to ensure a much larger number of contracts than
existed under the previous system of three large contracts
(one nationwide and two zone contracts). EPA met an overall
goal of increased competition in awarding 45 ARCS contracts
to 23 firms.
4. Followup Audit of EPA's Negotiation, Award and Management of
Contractor-Owned Equipment on Emergency Response Cleanup
Services Contract. Report No. E1SHD1-06-5054-2100292 issued
March 1992. EPA downsized the scope of some of its
Generation II ERGS contracts. These smaller scope regional
and site-specific contracts did attract many new
contractors. However, competition was still limited on the
larger Generation II zone contracts.
5. Sample Management Office. Report No.ElSKFl-03-0065-2100666
issued September 1992. There was a lack of competition for
the most recent contracts to operate the Sample Management
Office. The current contractor was the only firm to submit
a proposal for the last solicitation. Only the incumbent
and one o.ther firm had submitted proposals for the two
previous solicitations. Continued increases to both the
contract term and the contractor's duties helped decrease
competition for these follow-on contracts.
99
-------
Appendix IV
Page 2 of 3
6. ORD Environmental Research Laboratory, Athens, Georgia.
Report No. E1XMG2-04-0102-3400007 issued November 1992.
Long-term on-site contractor relationships provided
incumbent contractors and their personnel a competitive
advantage through the experience they gained in certain
research projects. This close relationship created a
contractor monopoly that precluded, or at a minimum
inhibited future "open" competition for providing on-site
contract support.
7. Management of Extramural Resources. Office of Research and
Development Environmental Research Laboratory, Athens,
Georgia, Report No. E1JBF2-04-0300-3100156 issued March
1993. Several factors in the RFP evaluation criteria made
it extremely difficult for other firms to compete for the
Lab's on-site support contract. The technical evaluation
criteria of personnel qualifications made up 65 percent of
the available evaluation points. In addition, offerer's
were required to submit commitment letters for key personnel
and a start-up plan which would ensure full operations
within 30 days of award.
8. Survey Report on Contracting Activities at Environmental
Research Laboratory - Corvallis. Report No E1JBG2-10-0080-
3400019 issued February 1993. There was a lack of
competition for the Lab's on-site support contract. Over
150 RFPs were issued and only the incumbent contractor
submitted a proposal. Some potential offerers for the
current contract indicated that the RFP was in part unduly
restrictive because of the large number of specified key
positions (33 out of 113) which required resumes and letters
of commitment. The large number of employees located on-
site and the expert knowledge in the Lab's activities by the
incumbent contractor appeared to limit the competition since
no other offerer submitted a proposal. The incumbent
contractor's extensive involvement in technical and
administrative support may adversely affect the openness and
fairness of future competition.
9. Survey of Contracting Activities at Environmental Monitoring
Systems Laboratory Las Vegas, Nevada, Report No. E1JBG2-09-
0329-3400041 issued March 1993. Two of the Lab's major
support contracts were awarded to the same incumbent
contractor after receipt of only two proposals in each case.
For one contract it appeared that the diversity of required
contract services was one of the causes for the limited
number of proposals received in response to the RFP. This
contract required support for five major program areas. The
extensive number of key personnel specified in the RFP may
100
-------
Appendix IV
Page 3 of 3
have limited competition for the other major contract. At
the pre-proposal conference, prospective offerers raised
concerns about the number of key personnel specified in the
RFP. The number specified was reduced to 23 from 31 after
this conference. Apparently, the reduction in the number
required was not sufficient to encourage companies to submit
offers. Only two proposals were received for this award and
only the incumbent's proposal made the competitive range.
Some TEP members indicated that the key personnel
requirement limited competition for the contract.
10. Management of Extramural Resources at the Environmental
Research Laboratory. Narraqansett, Rhode Island, Report No.
E1JBF2-01-0275-3100236 issued June 1993. The designation of
key personnel favored the incumbent contractor in the award
of an operations and maintenance contract. The RFP's key
personnel clause listed all five of the contract's positions
as key positions. Two firms contacted by our auditor's
expressed reservations about the clause. The appearance of
favoritism to incumbent contractors in the award of other
laboratory contracts may have been a factor in the lack of
competition for other contracts awarded under full and open
competition.
101
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102
-------
SCHEDULE OF RTF FY 1991 -92 CONTRACTS REVIEWED
CONTRACT
NUMBER
DOLLAR VALUE
68D20134
68D101S5
68020066
68D20185
68D10117 (1)
68010158
68020010
68020155
68D20159 (2)
68020160 (2)
68010115 (1)
68020163
68010116 (1)
68020131
68D20172
68D10003
68010009
68020175
68010104
68D20186
68D20181
68010031
68020063
68010146
68020059
68010126
68020189
68020057
68010143
68010134
68D20182
68010125
68D10152
68D10105
68020148
68020190
68010149
68O10014 (3)
68020151
68020009
68D10142
68010160 (4)
68010133
68020179
68D20184 (5)
$75,607.960
$69,370,613
$67.387.498
$52^21.781
$37.009,257 SOW-A
SOW-C
$31.947.490
$30.644.944
$28.106,650
$1 9.636373 SOW-2
SOW-3
$19,286.170 SOW-2
SOW-S
$18.771.256 SOW-B
$17.691.953
$15.250,003 SOW-B
$15.155*97
$11.977.314
$10.919.677
$9,551.816
$8.699.226
$5.934.812
$5.630.885
$6.699.226
$5,397,090
$5.274.768
$4.888.608
$4.617,936
$3.751.730
$3.58^878
$3.226.490
$3.098.356
$2*20.873
$2,725,280
$1.579.750
$1.578.897
$1.188.522
$1,079,945
$855.133
$1,156,639
$692.906
$431.020
$399.624
$309,497
$145.000
$97.065
$60.450
$51.000
45
$608.910.368
NUMBER OF
PROPOSALS
SUBMITTED
2
1
1
3
7
4
3
2
1
6
7
(6)
(7)
5
10
<8)
4
3
2
2
1
5
1
5
3
6
2
3
6
4
5
3
3
2
2
7
1
10
4
1
2
1
9
4
1
4
2
5
3.67
NO. OF
PROPOSALS
(NTHE
COMP. RANGE
2
1
1
2
4
3
3
2
1
4
4
(6)
(7)
4
7
(8)
2
1
1
1
1
2
1
3
3
5
2
3
2
2
4
2
1
2
2
3
1
4
2
1
2
1
8
3
1
3
2
NA
£48
AWARD TO PROGRAM
INCUMBENT OFFICE
YES ORD-AREAL
YES OSWER
YES ORD-HERL
YES OAR-ORP
YES OAR-OAQPS
NO
YES
YES
NO
NO
NO
NO
YES
YES
YES
YES
YES
YES
YES
YES
NO
YES (9)
NA
YES
NA
NA
YES
NO
NO
YES
YES
NA
NO
NA
NA
YES
NA
NA
NA
YES
YES
NA
YES
NA
NO
NA
NA
OSWER
OPPTS
OAR-ORP
OAR-OAQPS
OAR-OAQPS
OAR-OAQPS
OAR-OAQPS
OAR-OAQPS
OAR-OAQPS
OAR-OAQPS
OAR-ORIA
OAR-OMS
OARM-NCPD
ORD-AREAL
OPPTS
OAR-OAQPS
ORD-AEERL
ORD-AEERL
ORD-AEERL
ORD-AEERL
ORD-AEERL
OAR-OAQPS
OTS-HERD
OAR-OAQPS
OPPTS-OPPT
OAR-OAQPS
OPP
OPPTS-OPPT
OAR-OAQPS
(10)
OARM
ORD-AEERL
ORD-AEERL
ORD-AEERL
OTS-HERD
OAR-OMS
ORD-AEERL
OAR-OAQPS
ORD-AREAL
OARM-NOPD
Region 10
OARM
FOOTNOTES:
(1) •= Multiple awards were made from one RFP. Two awards were made for each SOW section.
One contractor could not win both awards for the same SOW section.
(2) = Multiple awards were made from one RFP. Two awards were made for each SOW section.
One contractor could not win both awards for the same SOW section.
(3) = Technical score of challenger was signrfica/itfy lower than the Incumbent.
(4) «= Only 1 proposal was submitted but it did not contain a technical proposal.
However. EPA negotiated with this offerer and awarded them the contract
(5) = Sealed bid contract award.
(6) = See SOW-2 for Contract Number 68020159.
(7) = See SOW-3 for Contract Number 68D20159.
(8) = See SOW-B for Contract Number 68010115.
(9) «= This was contract was for phase 2 of a pilot project. We classified this as awarded
to the Incumbent sine* the contractor that performed phase 1 won phase 2.
(10) •= Provides support to several EPA Headquarters offices.
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104
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Appendix VI
Page 1 of 3
SCHEDULE OF CINCINNATI FY 1991-92 CONTRACTS REVIEWED
Contract
Number
Negotiated
68C20121
68C10005
68C20108
68C20134
68C10006
68C10024
68C10022
68C10008
68C20113
68C20145
68C10055
68C20102
68C20100
68C10040
68C10029
68C10078
68C10004
68C10047
68C10062
68C10030
68C10035
68C20103
68C20144
68C10045
68C10018
68C10059
68C10032
68C20112
68C20109
68C20101
68C10068
68C10011
68C10080
68C10079
68C20139
68C10002
68C10001
68C10044
68C20148
68C20132
68C10061
68C10034
68C20111
68C10033
Dollar
Value
43,101,822
37,200,541
24,709,683
23,496,380
18,582,680
16,833,253
16,007,547
15,231,067
13,630,970
9,796,841
5,854,715
5,383,150
4,942,834
4,469,886
4,468,776
4,435,950
4,225,626
3,941,050
3,903,467
3,681,710
3,607,190
3,379,876
3,257,109
3,246,166
3,234,585
2,954,873
2,893,330
2,647,744
2,603,102
2,554,490
2,549,719
2,516,214
2,480,684
2,315,958
2,254,775
2,061,036
1,925,486
1,870,480
1,850,503
1,809,148
1,716,000
1,521,822
1,440,450
886,617
Number of
Proposals
Submitted
4
2
4
2
1
2
3
1
2
2
2
3
2
8
5
4
2
8
5
2
8
5
2
8
8
2
2
4
4
4
3
4
7
1
6
4
5
2
3
5
11
1
4
1
Number of
Proposals
in the Award to
Comp.Range Incumbent
4
1
4
2
1
2
2
1
2
1
1
2
2
5
2
3
2
1
2
2
6
3
1
4
2
2
1
3
3
3
2
2
6
1
4
1
2
2
2
3
7
1
3
1
NA
Y
N
Y
Y
Y
Y
Y
NA
Y
Y
NA
N
NA
N
N
Y
NA
NA
Y
N
N
Y
N
NA
Y
Y
NA
NA
NA
N
Y
Y
NA
NA
NA
Y
Y
NA
N
NA
NA
NA
N
Program
Office
OW-OSWER
ORD-ERL-N
ORD-RREL
OW-OCPD
OW-OWRS-ITD
ORD-ERL-A
ORD-EMSL
OW-OMEP
OW-OGWDW
OAR-NVFEL
OAR-ECTD
OW-OWEC
OARM
ORD-CERI
ORD-EMSL-LV
ORD-ECAO
ORD-ECAO
OW-OSWER-ITD
OAR-MVEL
ORD-ECAO
OW-OWRS-ITD
ORD-EMSL-CIN
OAR-MVEL
ORD-EMSL-LV
ORD-CERI
OAR-STSB
OW-OGWDW
OW-ITD-OWRS
OW-ITD-OWRS
ORD-EMSL-LV
ORD-RREL
ORD-ERL-N
ORD-ERL-CIN
OAR-MVEL
OW
ORD-ERL-N
OW-ODW
ORD-ERL-ADA
ORD-RREL
OW-OGWDW
OAR-MVEL
ORD-ERL-D
OW-ITD-OWRS
OW-OWRS
105
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Appendix VI
Page 2 of 3
SCHEDULE OF CINCINNATI FY 1991-92 CONTRACTS REVIEWED
Contract
Number
68C10051
68C10050
68C20140
68C20125
68C10049
68C10036
68C10046
68C10014
68C10084
68C20106
68C10019
68C10042
68C20117
68C20152
68C20127
68C20131
68C10071
68C10013
68C20138
68C10073
68C10020
68C10028
68C20142
68C20114
68C10076
68C20146
68C20126
68C10053
68C20116
68C10081
68C20137
68C20135
68C10075
68C20118
Total $328,
Dollar
Value
770,130
736,720
695,601
617,046
610,200
380,000
344,043
318,476
287,709
238,000
225,000
212,868
207, 000
176,799
140,683
105,600
97,830
89,500
88,993
87,800
75,822
73,660
68,874
66,800
65,515
60,681
58,097
53,600
53,312
52,733
51,056
44,675
34,600
31,389
696,117
Number of
Proposals
Submitted
5
5
1
2
5
1
1
2
3
4
2
3
2
3
3
2
1
2
1
2
7
2
1
2
2
9
1
1
2
2
1
1
5
2
256
Number of
Proposals
in the
Comp . Range
3
3
1
2
3
1
1
2
3
1
2
1
1
3
3
2
1
2
1
2
2
2
1
2
2
9
1
1
2
2
1
1
5
2
178
Award to
Incumbent
NA
NA
Y
Y
Y
NA
Y
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
N
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
YES = 21
NO = 11
NA = 46
Program
Office
OW-OSWER
OW-OWRS
ORD-EMSL-CIN
OAR-MVEL-ECTD
OW
ORD-EMSL-LV
ORD-ERL-ADA
ORD-ERL-GB
OARM-EPAB-FMSD
OAR-NVFEL-AA
ORD-EMSL-CIN
ORD-ERL-A
ORD-EMSL-LV
ORD-ERL-ADA
ORD-EMSL-LV
ORD-ERL-A
OAR-MVEL
ORD-RREL
ORD-RREL
ORD-ERL-GB
ORD-EMSL-CIN
OAR-MVEL
ORD-ERL-COR
OAR-MVEL-AA
ORD-RREL
ORD-ERL-ADA
ORD-ERL-COR
ORD-ERL-GB
ORD-EMSL-LV
ORD-ERL-D
ORD-EMSL
ORD-ERL-C
ORD-EMSL-LV
ORD-ERL-A
Average (78 items)
3.28
2.28
106
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Appendix VI
Page 3 of 3
SCHEDULE OF CINCINNATI FY 1991-92 CONTRACTS REVIEWED
Contract
Number
Sealed Bid1
68C10083
68C20130
68C10085
68C20149
68C10052
68C20143
68C20133
68C10016
68C10003
68C10048
68C10021
68C20123
68C10009
68C10069
68C10015
68C10070
68C10026
68C20129
68C20124
68C10031
68C20147
68C10067
68C10007
68C10057
Dollar
Value
$1,101,951
763,683
763, 000
349,466
288, 000
263, 600
261,667
234, 000
173,368
116,075
114,488
109,375
83,322
78, 000
75,377
74,211
66,265
62,225
59,850
54,340
49,550
38,329
22,370
22, 000
Total
$5,224,512
Average (24 items)
Number of
Proposals
Submitted
5
3
4
19
2
2
4
5
1
2
9
1
3
4
2
14
4
2
1
4
2
2
2
12
109
4.54
Number of
Proposals
in the
Comp.Range
Award to
Incumbent
NA
NA
NA
NA
YES
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
YES = 1
NO = 0
NA = 23
Program
Office
OARM-FAC-ADA
ORD-ERL-D
OARM-FAC-GB
ORD-ERL-A
OAR-MVEL
ORD-ERL-D
ORD-ERL-D
OARM-EPAB-FMSD
OARM-EPAB-FMSD
OARM
OARM-EPAB-FMSD
OARM-EPAB-FMSD
OARM-EPAB-FMSD
OARM-EPAB-FMSD
OARM-EPAB-FMSD
OARM-EPAB-FMSD
OARM-FAC
ORD-ERL-A
ORD-ERL-D
OARM-FAC
OARM-EPAB-FMSD
OARM-EPAB-FMSD
OARM-EPAB-FMSD
OARM-EPAB-FMSD
1 Sealed Bid awards are based solely on price competition.
competitive range is not established.
Therefore, a
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Appendix VII
SUPERFUND FY1991 AND 1992 CONTRACTS REVIEWED
Contract
Number
68W10007
68W10008
68W10012
68W10016
68W10021
68W10022
68W10023
68W10035
68W20003
68W20005
68W20030
68S14001
68S14002
68S14003
68S14004
68S14005
68S29005
68S23002
Totals
Averages
Dollar Value
$18,200,000
$150,000
$56,900,000
$3,500,000
$7,500,000
$12,000,000
$9,900,000
$125,100,000
$6,200,000
$8,700,000
$16,500,000
$26,400,000
$22,300,000
$23,200,000
$24,100,000
$23,900,000
$685,000
$147.900.000
$533,135,000
Number of
Proposals
Submitted
3
3
3
4
3
12
7
3
7
0)
4
2
6
(2)
(2)
(2)
2
4
63
4.5
No. of
Proposals
In The
Comp. Range
3
2
2
1
3
6
4
2
4
0)
2
2
5
(2)
(2)
(2)
2
2
40
2.9
FOOTNOTES:
(1) = Single solicitation resulted in the award of contracts
68W10003 and 68W10005.
(2) = Single solicitation resulted in the award of contracts
68S14002, 68S14003, 68S140004, and 68S14005.
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Appendix VIII
COMPETITION HISTORY FOR RTP CONTRACTS THAT
RECEIVED ONLY ONE PROPOSAL (1)
Number of Proposals Received No. of Years
Contract
Number
68D10135
68D20056
68D20155
68D00110
68D20175
68D00114
68D20186
68D10105
68D10149
68D20151
68D10160
Contract Current
Value Contract
$69,370,613
$67,387,498
$28,106,650
$14,535,657
$8,699,226
$6,886,269
$5,630,885
$1,188,522
$1,156,639
$431,020
$145,000
1
1
1
1
1
1
1
1
1
1
1
Prior
Contract
5
2
5
1
3
N/A
N/A
1
N/A
3
N/A
Proceeding Incumbent
Contract Contractor In Place
N/A
2
4
1
2
N/A
N/A
1
N/A
1
N/A
6
15
9
18
4
N/A
N/A
19
N/A
7
N/A
$203.537.979
FOOTNOTE:
(1) = Schedule includes negotiated awards only.
ill
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Appendix IX
COMPETITION HISTORY FOR CINCINNATI CONTRACTS
THAT RECEIVED ONLY ONE PROPOSAL (1)
Number of Proposals Received
Contract
No.
68C10006
68C10008
68C10033
68C10046
68C20140
Contract Current
Value Contract
$18,582,680 1
$15,231,067 1
$886,619 1
$344,043 1
$659,599 1
$35.704.008
Prior Proceeding
Contract Contract
1 NA
2 3
4 NA
2 2
4 1(2)
No. Years
Incumbent
Contractor
In Place
6
10
5
7
4
FOOTNOTES:
(1)= Schedule includes negotiated awards only.
(2)= This was an 8(a) sole source procurement
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114
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Appendix X
Summary of Company Interview Results
Reasons For Not Submitting
Proposals for Sample RFPs
Number of Responses 17
RTP2/ Cincinnati 3/
Didn't have required expertise 10
Didnt do type of work requested 7
Incumbent too strong 6
Excessive personnel requirements (e.g., 5
experience, availability, number of key personnel)
Looking for subcontracting opportunities 5
Not enough time to submit a proposal 4
Believed EPA did not want competition 4
RFP requirements (non-personnel) 3
Not interested 3
SOW too large 2
Potential conflict of interest 2
Cost of preparing a proposal 3
Factors Which Limit Competition
Not enough information provided 9
SOWs too large 7
EPA preference for incumbents 7
No advance notices (i.e., prior to required CBD 5
synopsis)
Not enough time to submit proposals 4
Too much emphasis on experience 3
Lack of pre-proposal conferences 3
Pre-proposal conferences not effective 2
Too much emphasis on key personnel 2
Proposal requirements too voluminous 2
Award process too long 1
FOOTNOTES:
1/ = Some companies provided more than one reason or factor.
21 = Based on interviews with 52 companies.
3/ = Based on interviews with 34 companies.
4/ = 12 companies could not comment due to lack of experience with EPA.
9 companies stated that there were no problems.
7
8
6
5
4
2
6
4
2
5
2
1
RJJP4/ Cincinnati
5
11
20
10
8
6
4
0
6
5
6
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116
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Appendix XI
Page 1 of 1
REPORT DISTRIBUTION
Office of Inspector General
Inspector General (2410)
Chief, Resources Management Unit (2421)
Divisional Inspectors General for Audit (2421)
Headquarters Office
Director, Office of Acquisition Management (3801F)
Director, Office of Research Program Management (8102)
Director, Program Policy Coordination Office (3102)
Director, Cost Advisory and Financial Analysis Division (3804F)
Agency Followup Official (3304)
Audit Followup Coordinator (3304)
Attn: Management Controls Branch
Special Assistant to the Director, Office of Acquisition
Management (3801F)
Associate Administrator for Congressional and
Legislative Affairs (1301)
Associate Administrator for Communications and Public Affairs (1701)
Assistant Administrator for Research and Development (8101)
Assistant Administrator for Air and Radiation Programs (6101)
Liaison, Office of Administration and Resources Management (3102)
Liaison, Office of Acquisition Management (3801F)
Headquarters Library (PM-211A)
EPA Regional Office
Director, Contract Management Division - Cincinnati
Director, Contract Management Division - RTP
External
Liaison, General Accounting Office (3304)
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