U.S. Environmental Protection Agency
                   Office of Inspector General

                   At   a   Glance
                                                           11-P-0217
                                                         May 4, 2011
                                                                 Catalyst for Improving the Environment
Why We Did This Review

We received a Hotline complaint
regarding a U.S. Environmental
Protection Agency (EPA)
contract with ASW Associates,
Inc. (ASW). The allegations were
that EPA replaced Superfund
appropriations with American
Recovery and Reinvestment Act
of 2009 (Recovery Act) funds
and that EPA unfairly terminated
the ASW contract.
Background
EPA awarded ASW a Superfund
contract for environmental
remediation services in
September 2008. In January
2009, the U.S. Department of
Energy (DOE) suspended ASW
from contracting with
government agencies for
submitting to them invoices with
false certifications. EPA awarded
a second contract to a different
contractor to obtain the same
services, as EPA did not know
when DOE would lift the
suspension. The Federal
Acquisition Regulation prohibits
agencies from renewing with a
suspended  contractor unless the
agency head agrees.

For further  information,
contact our Office of
Congressional, Public Affairs and
Management at (202) 566-2391.

The full report is at:
www.epa.qov/oiq/reports/20117
20110504-11-P-0217.pdf
Hotline Allegations Unsubstantiated, but Region  7
Contract Administration and Award Issues Identified
 What We Found
The complainant's allegations were not substantiated. No funds were replaced
on the ASW contract. The contract was solely funded with Superfund
appropriations and no Recovery Act appropriations were obligated on the ASW
contract. Secondly, the ASW contract was not terminated for convenience as
alleged; EPA simply elected not to exercise the second option.

EPA could have awarded a less risky contract type. EPA awarded a time and
materials (T&M) contract to ASW, but could have awarded a lower-risk
fixed-price type contract. According to the contracting officer, Region 7
awarded a T&M contract because the program office was reluctant to use a
fixed-price type contract due to the environmental unknowns surrounding the
site to be cleaned up.

EPA did not perform some required contract administration functions. The
contracting officer did not conduct required annual invoice reviews even
though DOE suspended ASW during the base period of the contract for
submitting invoices with false certifications. Also, EPA did not conduct an
interim contractor performance evaluation despite several performance issues
that EPA staff identified. The contracting officer cited not having time to
perform the annual invoice reviews or the interim performance evaluations. As
a result, Region 7 does not have assurances that the contractor and EPA project
staff were fulfilling their roles, and other potential clients were not made aware
of ASW's performance on this contract.
 What We Recommend
We recommend that Region 7(1) revise the Region 7 peer review checklist to
require review of the pre-award file to ensure proper documentation and
support for the contract type selected, (2) provide clarification to contracting
officers on T&M contracts and annual invoice reviews, (3) implement a
process to ensure annual invoice reviews are completed by contracting officers,
and (4) prepare and submit a contractor performance evaluation for the ASW
contract in the Contractor Performance Assessment Reporting System as
required. EPA Region 7 generally agreed with the recommendations in the
draft report and provided corrective actions or acceptable alternatives. The
completed and planned actions address the intent of the recommendations in
the report.

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