U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Materials Relating to
Resolution of Evaluation
Report No. 13-P-0209
Concerning Agency's $1.5
Million Payment to a
Contractor
June 9, 2014
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D C. 20460
mum
MEMORANDUM
SUBJECT; Resolution of Office of Inspector General Report No. 13-P-0209,
Opportunities for EPA-Wide Improvements Identified During Review
of a Regional Time and Materials Contract, Issued April 4,2013
FROM: Arthur A. Elkins Jr. /' A
TO:
Robert Perciasepe, Deputy Administrator
In the above-referenced report, the Office of Inspector General (OIG) determined that the
U.S. Environmental Protection Agency (EPA) improperly paid a contractor approximately
$1.5 million, and recommended that the EPA modify the contract and recover the payment.
The agency has not concurred with that recommendation. As provided by EPA Manual. 2750,
OIG representatives met with the acting Chief Financial Officer and agency representatives on
March 12,2014, in an effort to resolve the dispute. That meeting, and a subsequent meeting of
OIG and EPA Office of General Counsel attorneys, did not result in resolution. The EPA Manual
2750 dispute resolution process provides that this matter should now come to you to make a final
determination on behalf of the agency as to whether to accept or reject the OIG recommendation.
In this memorandum, the OIG summarizes the legal positions taken by the OIG and the agency
during the course of the EPA Manual 2750 dispute resolution, and frames the matters now before
you for determination of the final agency position. The two Office of General Counsel legal
memorandums and three OIG legal memorandums that were prepared in connection with this
dispute resolution are attached at Attachments A through E and will assist you in your analysis.
The factual background for the OIG evaluation report issue that is in dispute can be simply
stated. The EPA awarded a remedial action contract to CH2M Hill on September 24,2008. The
contractor agreed to provide architect/engineer, technical and management services to the EPA
for its project. The remedial action contract included a time and materials (T&M) pricing
arrangement Under the contract, the agency agreed to pay the contractor a 4 percent profit for
work performed by a group of subcontractors. That profit totaled $1,524,196.44 (that figure, as
of April 27,2012, is presumably higher now).
The OIG legal position is based on the Federal Acquisition Regulation (FAR), to which the EPA
is subject The FAR at Subsection 32.111(a)(7) states that the FAR clause at Section 52.232-7
"shall" be inserted "when a time-and-materials or labor-hour contract is contemplated." See
Attachments B, D and E. The clause states that "the Government will not pay profit or fee to the
OIG Legal Position
'nrfniiM Auilmss itJMl » • wvm
Rocycled/Rocyclnblo • * ''Wfd M, 1 |fik4, " '*»' ' f *• t *>«¦>, , <*; C I f t- > . y 5
-------
prime Contractor on materials," Id. FAR Subsection 16.601(a) defines "materials," among other
things, as "(subcontracts for supplies and incidental services for which there is not a labor
category specified in the contract." Id.
The remedial action contract referenced here is a T&M contract. However, the agency, for
reasons that it has not persuasively explained to the OIG, did not include the requisite FAR
clause that forbade payment of profit to a prime contractor for materials. Instead, the agency, in
contravention of the clause, paid profit to the prime contractor for work by a group of
subcontractors. (The subcontracting work fit the FAR definition of "materials" because it was
described in the contract as precisely the same types of work that are listed in the FAR as
"incidental services" in an architect/engineering contract, and the services were not charged
consistent with labor rates set out in the contract. See Attachment E.) In short, the agency
overpaid the contractor and violated the FAR because it chose to pay profit on certain
subcontracting work in a T&M contract. Therefore, the OIG has recommended that the agency
revise the contract and recover the $1,524,196,44 (plus) in overpayment.
Agency Legal Positions and OIG Responses
In response to the OIG's recommendation and legal position, the agency has forwarded a series
of legal arguments over time. Because there was no apparent resolution of any of the arguments,
all of the positions and OIG responses are summarized here.
First, the agency argued that EPA did include in the remedial action contract an agency
EPA Acquisition Regulation (EPAAR) procurement clause that was similar to (and therefore an
allowable substitute for) the missing FAR clause. The agency asserted that, because the EPAAR
clause did not include the prohibition on profit, there was no procurement violation. See
Attachments A and C. However, the FAR at Subsection 1.304(b)(2) specifies that an agency
acquisition clause, except as required by law or when a deviation is authorized, "shall not"
conflict with or be inconsistent with the FAR. See Attachments B and D. The EPAAR clause,
because of the obvious conflict with the similar FAR clause, cannot control. The agency has
asserted, without evidence, that it obtained a deviation from the FAR clause. See Attachment C.
That assertion makes no sense. The purpose of the FAR clause prohibition is to ensure that the
government does not pay double profit in a T&M contract; so, why would a deviation be
justified given that it might lead to the possibility that EPA would pay double profit (as it did in
the remedial action contract)? See Attachments B and D. In all likelihood, the 1984 EPAAR
clause was simply not updated to reflect the 2007 FAR clause and its prohibition. As such, the
agency cannot now invoke its own clause as a substitute for the legally required FAR clause.
Second, the agency asserted that the missing FAR clause was not required in the contract.
See Attachment E, Attachment 1. However, the agency has not provided legal support for this
position, nor has it ever provided an adequate reason for why it failed to include a key clause that
was clearly required by law.
Third, the agency argued that even if it had included the FAR clause (which was required by
law) in the remedial action contract, the clause would not have been applicable to the facts of the
contract. See Attachments C and E, Attachment 1. In Attachment E, Attachment 1, the agency
?
-------
most recently asserted, without support, that the subcontracting services for which a profit was
paid did not correspond to the FAR definition of "materials" ("[subcontracts for supplies and
services for which there is not a labor category specified in the contract") because the
subcontracted "construction services" did not fit the FAR definition of incidental services and
there were labor categories for the subcontracting work. Id. However, the facts show just the
opposite. The remedial action contract language evidences that the services rendered by the
subcontractors (for which a profit was paid) fit almost perfectly the agency-recommended FAR
definition of "incidental services" in an architect/engineering contract. See Attachment E. Also,
there is no evidence in the remedial action contract that the subcontracting work was charged
consistent with the contract's labor categories; to the contrary, contractual language and invoices
show that the subcontracting work was categorized as "Non-Labor." See Attachment E,
especially Attachment 3. Thus, the agency assertion that the "legal" precepts do not apply
because the "facts" dictate differently fails; the evidence demonstrates this to be exactly a
circumstance where the missing FAR clause was required and applicable to a government
contract.
Fourth, the agency argued that the "profit" paid by the government to the prime contractor for
services by a group of subcontractors really was a "premium" and therefore it did not violate the
missing FAR clause. Factual evidence demonstrates that this is a purely semantic distinction.
The contract referred to the payment as "profit"; the invoices referred to the payment as "profit";
and the contractor, based on interviews, perceived the payment to be "profit." See Attachments B
and D. Further, and perhaps most importantly, the payment functioned as a "profit." Id.
Fifth, the agency contends that even if it accepted the OIG's legal position that the FAR required
the missing clause, the agency would not be able to act. The agency asserted that a failure to
include a legally required clause renders the agency legally unable to demand repayment from
the prime contractor because the contractor did not enter into a contract that included the
prohibitive FAR clause. See Attachments A and C. To begin, the agency has refused to request
repayment of the wrongfully paid profit, and so it does not know whether a contractor that
charged approximately $102 million for a government contract would voluntarily return the
$1,524,196.44 (plus) overpayment that occurred due to the government's error. Indeed, federal
case law has stated that contractors are presumed to have constructive knowledge of federal
procurement regulations and so this contractor cannot claim surprise if asked to return money
that should not have been paid to it because of absence of a requisite FAR clause. See
Attachment D, page 3. As such, the agency is not prevented, legally or otherwise, from
requesting that the contractor voluntarily repay the profit because of the agency's error. If the
agency were to request repayment and the contractor refused, the agency has available to it as a
litigation guide (should it decide to litigate) case law where the government successfully
recovered money under circumstances similar to those here. In the Christian case and the federal
cases that followed it {see Attachments B and D), federal courts have held that the government
should not suffer negative consequences arising from failure to insert critical clauses; those
courts read the clauses back into federal contracts as a matter of law and required repayment
from contractors. Id. Nothing precludes the agency from requesting voluntary repayment, and if
it decides to litigate the agency can turn to the "Christian Doctrine" for legal support.
3
-------
In sum, the agency has not presented any legal or factual basis for the OIG to simply ignore what
the OIG found during the course of this program evaluation regarding the missing FAR clause
and the applicability of the clause to the remedial action contract. The OIG has no authority to
compromise a debt owed to the United States. Therefore, the OIG recommends, on behalf of
United States taxpayers, that EPA modify the contract and request return of an overpayment
amounting to at least $1,524,196.44,
If you have any questions regarding this memorandum, please contact Carolyn Copper, assistant
inspector general for the Office of Program Evaluation, at (202) 566-0829 or
fCopper.Carolvn@epa.gov'); or Eric Lewis, product line director, at (202) 566-2664
(Tewis.Eric@,epa. gov).
Attachments (5)
cc: Avi Garbo, General Counsel, Office of General Counsel
Kenneth Redden, Associate General Counsel, Civil Rights and Finance Law Office, Office
of General Counsel
Maryann Froehlich, Acting Chief Financial Officer, Office of the Chief Financial Officer
Craig Hooks, Assistant Administrator, Office of Administration and Resources Management
John R. Bashista, Director, Office of Acquisition Management
Jared Blumenfeld, Regional Administrator, Region 9
Kathy O'Brien, Director, Office of Planning, Analysis, and Accountability, Office of the
Chief Financial Officer
Amir Ingram, Special Assistant, Office of the Deputy Administrator
4
-------
Attachment A
-------
st% \
UNITED STATES EriVlROMMEMTAl. PROTECTION AGENCY
WASHINGTON, P. T. 2046..)
Z-'-IOl Or
N'cfiAS. CCVNS£t«
lyLEjyipRANDUjyi
To; John Bashista, Director, Office of Acquisition Management
From: Jonathan S, Baker, Office of General Counsel
/
f
Re: OIG Audit OPE-FY12-0008 - Possible Recovery of Costs
Date: June 21, 2013
You have asked for our opinion on possible bases for a Government claim to recover funds paid
to the prime contractor, CH2M Hill, Inc. (Hill) under Contract No. EPS-9-0S04- Region 9's remedial
action contract (the RAC contract or Contract). As discussed below, under the facts as we understand
them, we cannot identify a basts under which to pursue recovery of costs as suggested by the Office of
Inspector General (OlG)'s recommendation in audit number OPE-FY12-OOOS (the OIG audit).
EPA Region 9 awarded the RAC contract to Hill on September 24, 2008. Under the contract, Hitl
provides professional architect and engineering (A&E) services, technical, and management services to
EPA to support activities under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (CERCLA). The base period was E years with award terms for up to an additional 7 years.
EPA exercised the first award term, extending performance to September 23, 2013. The contract is a
fixed-rate indefinite delivery/indefinite quantity (ID/IQ) vehicle with a ceiling of $116,250,000.
The contract was procured under FAR Part 36 Brooks Act procedures. Under the Brooks Act,
EPA first performed a technical evaluation of the offerors and ranked them. At that point, cost
negotiations commenced with the most highly ranked firm -- Hill. In addition to providing A&E services,
the statement of work includes prime contractor oversight and management of construction projects,
and requires the prime contractor to subcontract all construction work on a competitive basis. During
cost negotiations, Hill demonstrated that the market for A&E services and construction
management/oversight are different — namely, that construction managemem/oversigiit is riskier and
that such additional risk needs to be reflected in the contract's cost structure. Rather than capture that
additional risk through a higher fixed rate for every hour that Hill performed under the contract, the
Contracting Officer negotiated a four (4) percent "premium" to be paid to Hill only in performing
construction management/oversight. While this premium rate structure could have been reflected by
creating two separate fixed rates in the contract - one for ASH work and one for construction
Background
temmot AtJdiois iUir»i » hap cp,! gov
Siocycto^RocvJlotite « r-^ted v.:r Vegetable 0.i 3araa litte on 100V PoswonumHi*. Piresw Chloiw F«=j Hne/axU Paps'
-------
management/oversight — this premium rate for construction management/oversight was captured by
adding a 4 percent premium (labeled as "profit") applicable to construction subcontracts only.1
Hill has been performing the contract since the September 24, 2008 award dste. Hill has billed
and EPA has paid over $1.5 million under the subcontract management/oversight premium: In its audit
report, the OIG has questioned this premium payment to Hill and has recommended that EPA pursue
recovery of these funds from Hill.
Discussion
in order to pursue recovery of funds from a contractor, EPA must have a basis to do so. Broadly-
stated, possible bases would be: (1) the payment is prohibited by law and/oris an unallowable cost
under FAR Parts 31 and 32; (2) performance-based issues (such as breach of contract, excess
reprocurement costs, defective performance costs, recovery for payments made on undelivered goods
or services); or (3) recovery of overpayments provisionally paid to the contractor. See Cibinic & Nosh,
Administration of Government Contracts (3'd ed 1995} pp. 1277-1230. We do not believe any of these
bases are applicable here.
in the first place, we do not believe that this 4 percent premium (labeled as "profit") is
prohibited by law or is otherwise unallowable. While it would have been clearer to have established
two separate rates under the contract for A&E work and for construction management/oversight, the
purpose of the premium was to compensate Hill for the additional risk specifically associated with
construction management/oversight without spreading that risk over every hour performed on both
A&£ work and construction management/oversight by generally increasing the contract's fixed rates.
Moreover, the premium does not constitute a prohibited cost plus a percentage of cost arrangement.
See 41 U.S.C. § 254(b); Muscany v, United States, 324 U.5.49,61-62 (1944). A cost plus percentage of
cost situation arises when an element of cost is paid as a percentage of cost on a cost element that can
increase during performance. Here, while the premium was stated as a percentage of subcontract costs,
the contract required Hill to compete construction subcontracts, which resulted in fixed-price or firm
fixed-rate subcontracts. As a result, the subcontracts costs could not increase during performance;
therefore, the premium paid to Hill was a fixed sum that could not increase as the subcontracts were
performed. Accordingly, it does not fall within the cost plus percentage of cost prohibition.
Furthermore, while the OIG contends that FAR 52.232-7 prohibits the payment of profit on
subcontracts, that clause was not included in the contract and does not appear to be the type of
mandatory procurement clause that should be read into this contract as a matter of law. See
C.L.Christian & Associates v. United States, 161 Ct. CI. 1, 312 F.2d 418,180 Ct. Cl. 58, 320 F.2d 345, cert,
denied, 375 U.S. 954 (1963), 170 Ct. CI. 902, cert, denied382 U.S. 821 (1965). In contrast, the Hill
contract contains EPAAR 1552,232-73, Payments - Fixed Rate contract, which does not prohibit the
payment of this premium on subcontracts. In addition, we have found no other cost principle that
categorizes this payment as an unallowable cost
1 As stated in OARM's January 24, 2013 response to the audit, Region 9 has committed to including a
comprehensive set of rates in future contracts that segregates those functions associated with ASS work from
those associated with construction oversight services, in addition, OAtvl surveyed other similar headquarters and
regional contracts and determined that the pricing method at issue here was unique to this one Region 9 RAC
contract.
2
-------
Another basis for recovery of costs paid to a contractor would arise from the contractor's
performance, including breach of contract or failure to perform/deliver some or all of the construction
management/oversight work for which it had been paid by EPA, There is nothing to suggest that Hill
breached the contract or otherwise did not perform/deliver the construction management/oversight
work at issue here.
Finally, as a result of finalizing indirect cost rates during contract closeout, an agency could
pursue recovery of overpayment of costs provisionally paid to a contractor during performance. This
situation would arise under cost-reimbursement contracts that utilize provisional indirect billing rates.
Because the Hill contract is not a cost-reimbursement instrument, this basis for cost recovery does not
apply.
Conciusion
Based on our understanding of the facts of this contracting issue, we cannot identify a basis
under which to seek repayment of the construction management/oversight premium agreed to by Hill
and EPA under its RAC contract. If you would like to discuss this matter further, please let me know.
cc: Ken Pakula, OGC
3
-------
Attachment B
-------
P % UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
I * WASHINGTON D C 20460
~ W S'
Sop! ember 3, 2013
OfMi'F Of
MEMORANDUM ^,-f ck». oi wka,
SUBJECT: Resolution of Office of Inspector General Report No. 13-P-02Q9,
Opportunities for EPA-Wide Improvements Identified During
Review of a Regional Time and Materials Contract, April 4,2013
FROM: Steven M. Alderton, Senior Associate Counsel
TO: Carolyn Copper, Assistant Inspector General
Office of Program Evaluation
You requested that the OIG Office of Counsel respond to an EPA Office of General Counsel legal
memorandum, dated June 21,2013, addressing recovery of funds paid to an EPA contractor. The legal
question is whether a Federal Acquisition Regulation clause that prohibits the additional payment of a
profit in a time and materials eonlract is applicable to an EPA contract with CH2M Hill, Inc. OGC took
the position that the FAR clause is not applicable because it was omitted from the contract We conclude
that the clause is still applicable and that the EPA violated the FAR when it agreed to pay additional
profit to CH2M Hill.
Background
The remedial action contract in question (EPS90804) was awarded by EPA to CH2M Hill on
September 24,2008. The contractor agreed to provide architect/engineer, technical and management
services to the EPA to support activities under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980. The base performance period was for 3 years, with options for
up to 7 additional years.
The CI I2M Hill contract provides for a fixed rate indefinite delivery/indefinite quantity with time and
materials pricing. The government orders work through task orders, including fixed rate time and
materials type task orders. The time and materials task orders arc used to acquire services based on
direct labor hours, at specified fixed hourly rates, and actual cost for materials. The fixed hourly rate
included wages, overhead, general and administrative expenses, profit, and the actual cost of materials
(with certain exceptions not relevant here).
In addition to the fixed hourly rate (which includes the profit to which the contractor is entitled)
discussed above, EPA agreed to a 4 percent payment on subcontracts. The contract referred to the
payment as a "profit," The OGC legal memorandum referred to the additional payment as a "premium''
that was necessary to compensate the prime contractor for the additional risk associated with the
construction management/oversight. OGC seemed to suggest that the use of the label "profit" in the
contract was a misleading error, and that it would have been more accurate to have called it a
-------
2
"premium." However, the contractor reported to the EPA acquisition manager thai It considered the
extra payment to be profit; the contractor also referred to the payment as a "fee." Further, while,
negotiating this item, the EPA acquisition manager used EPA Acquisition Regulation Subsection
1515.404-471 - the EPA structured approach for developing profit or fee objectives. Regardless of what
it is termed, the 4 percent payment clearly constituted an additional government payment to the prime
contractor on top of the already negotiated fixed rate, which included the contractor's profit.
The nomenclature is irrelevant.
Legal Position
We conclude that the additional 4 percent payment to CH2M Hill on subcontracts is prohibited by the
FAR. FAR Subsection 32.111 (a)(7) states that the FAR clause at 52.232-7 "shall" be inserted "when a
timc-and-malerials or labor-hour contract is contemplated." EPA failed to include the clause, FAR
Subsection 52.232-7(b)(7), which was required by federal regulation to have been inserted into the
contract, states that, except for a few exceptions not relevant here, "the Government will not pay profit
or fee to the prime Contractor on materials." FAR Subsection 16.601 (a) defines "materials" as including
subcontracts. Hence, EPA's payment to CH2M Hill of 4 percent of the amount charged for work
performed by subcontractors was in violation of the FAR,
The consequence of EPA's failure to include and then act in accordance with the requisite FAR clause
regarding profit on materials (again, defined as including subcontracts) is significant. Through April 27,
2012, CH2M Hill billed the agency the cumulative amount of $38,104,278.36 for subcontracts - plus a
total of $1,524,196,44- for the 4 percent profit/fee. That latter amount was not allowable and should not
have been paid under the law.
OGC presents two bases for allowing the additional payments. First, OGC noted that the CH2M Hill
contract did not include the FAR clause referenced above, so the clause does not apply here. That is,
even though it is the law of the land, the EPA was not bound by it because it was omitted from the
contract. OGC cited to the Christian Doctrine and argued that this is not the sort of clause that must be
read into the contract as a matter of law. In G.L. Christian & Associates v. United States, 312 F.2d 418,
reh 'g denied, 320 F.2d 345, cert, denied, 375 U.S. 954 (1963), the Court of Claims established what has
come to be known as the Christian Doctrine. In Christian, the government terminated a construction
contract for convenience - even though the contract did not include the termination clause (312 F.2d at
424). The contractor sued for breach of contract. The court denied the claim, concluding that the
termination clause was required by applicable federal procurement regulations and therefore
incorporated the missing termination for convenience clause (Id. at 424,427).
Generally, the Christian Doctrine holds that a court may insert a clause into a government contract as a
matter of law if that clause is required by relevant federal regulations. However, as the court noted in
General Engineering & Machine Works v. O'Keefe, 991 F.2d 775 (Fed. Cir. 1993), the Christian Doctrine
"does not permit the automatic incorporation of every required contract clause" (Id. at 779). Rather, the
doctrine only specifically requires incorporation of missing, mandatory clauses that "express a
significant or deeply ingrained strand of public procurement policy" (Id.). Therefore, in the Christian
case, the court incorporated a clause that allowed for the cancellation of a defense contract that was
no longer needed. In the General Engineering case, the court incorporated a clause that was required by
procurement regulations to be included in a time and materials contract because the clause prevented the
government from having to make double payments that would be a waste of government funds (Id. at
780). The General Engineering court also noted that government contractors are "presumed to have
-------
3
constructive knowledge of the federal procurement regulations," and therefore it should have come as no
surprise that the mandatory incorporated clause would be included or read into the fixed price service
contract (Id,).
Here, the clause at FAR Subsection 52.232-7(b)(7) is required by law to be included in a time and
materials contract. The FAR prohibits payment of a profit/Fee for materials - in this case, subcontracts.
The history of the clause, as set out in the Federal Register, states that the prohibition is "consistent with
the historical intent of the clause and the concept of a T&M contract. The recovery of profit or fee is
accomplished as part of the labor hour portion of the T&M/LH contract" {FAR Case 2004-015,
Payments Under Time-and-Materials and Labor-Hour Contract, 71 Fed. Reg. 74,655, 74,657 (Dec. 12,
2006)). As pointed out by the FAR Councils, when the government pays a separate profit or fee in the
context of a time and materials contract, it is making a double payment because profit is already part of
the fixed hourly rate. This rationale is similar to the explanation for the clause discussed by the General
Engineering court. As noted above, CH2M Hill's legitimate and allowable profit was included in its
hourly rates. Most certainly the clause in question, which is designed to prevent the federal government
from paying double in the context of a time and materials contract, grows out of a significant or deeply
ingrained strand of federal procurement policy that prohibits governmental waste of fends. Hence, under
the Christian Doctrine, the FAR clause at Subsection 52.232-7(b)(7) is exactly the sort of mandatory
clause that should and must be incorporated even if it is left out of a government contract,
The second basis presented by OGC for allowing the additional payment is that the CH2M Hill contract
included an agency procurement clause (EPAAR 1552.232-73) that addressed payments for fixed rale
services contracts but did not prohibit an additional profit/fee. That cannot and does not override or
negate a FAR requirement. The FAR at Subsection 1.304(b)(2) specifies that agency acquisition
regulations, except as required by law or when a deviation is authorized, "shall not" conflict or be
inconsistent with FAR content Further, the agency procurement regulations at EPAAR Section
1501.000 note that they are designed only to "implement and supplement" the FAR. Finally, there is no
evidence that the agency acquisition manager sought approval from the EPA head of the contracting
activity as required by EPAAR Subsection 1501.403 for a deviation from the FAR.
Conclusion
The FAR mandates that the CH2M Hill contract include a clause prohibiting a profit/fee in the CH2M
Hill contract. The clause was not included but it should be read into the contract under the Christian
Doctrine as a matter of law because iL is designed to prevent double payment and therefore is the sort of
clause that grows out of a significant and deeply ingrained federal procurement policy. Any agency
procurement regulation that was included in the contract and that conflicts with or is inconsistent with
this FAR clause does not override or negate the FAR. EPA paid CH2M Hill a significant sum
($1,524,196.44) for profit or fees on materials (i.e., the subcontracts) in violation of the FAR That
money must therefore be returned to the government.
-------
Attachment C
-------
c
UNITED STATES EMVIRONMEN I At. PROTECTION AGifMC'v
'A'AS H! 1 •.'*3TO '¦ •!, Z .0.
CONTAINS PROCUREMENT SENSITIVE/CONFIDENTIAL BUSINESS INFORMATION
GEN£S?/J. COUNSEL
MEMORANDUM
To: John Bashista, Director, Office of Acquisition Management
From: Jonathan S, Baker, Office of General Counsel
Re: Office of Inspector General Report Mo. 13-P-0209 - Region 9 Response Action Contract (RACJ
No. EPS-9-0804
Date: September 19, 2013
In response to OGC's June 21,2013 memorandum, "Resolution of Office of Inspector General
Report No. 13-P-0209, Opportunities for EPA-Wide Improvements Identified During Review of a Regional
Time and Materials Contract, April 4, 2013," Steven M. Alderton, Senior Associate Counsel, OIG Office of
Counsel issued a September 3,2013 opinion concluding that FAR S2.232-7, Payments under Time-and-
Materials and Labor-Hours Contracts, was required to be included in Region 9's RAC contract and that
under that clause, EPA improperly paid the prime contractor, CH2M Hill, Inc. (Hill) additional "profit" for
subcontracted construction work. The OIG concludes that EPA should pursue reimbursement of the
additional profit paid to Hill. As discussed in our previous memorandum as well as below, we believe
that the OIG is incorrect. EPA's payments to Hill were in accordance with lav/; FAR 52,232-7 was not
required to be read into the contract, and even if it was, it does not prohibit the payments made to Hill.
EPA Region 9 awarded the RAC contract to Hill on September 24,2008. Under the contract, Hill
provides professional architect and engineering (A&E) services, technical, and management services to
EPA to support activities under the Comprehensive Environmental Response, Compensation and liability
Act of 1980 (CERCLA). The base period was 3 years with award terms for up to an additional 7 years.
EPA exercised the first award term, extending performance to September 23, 2013, The contract is a
fixed-rate indefinite delivery/indefinite quantity (ID/IQ) vehicle with a ceiling of $116,250,000.
The contract was procured under FAR Part 36 Brooks Act procedures. Under the Brooks Act,
EPA first performed a technical evaluation of the offerors and ranked them. At that point, cost
negotiations commenced with the most highly ranked firm -- Hill, tn addition to providing A&E services,
the statement of work includes prime contractor oversight and management of construction projects,
and requires the prime contractor to subcontract all construction work on a competitive basts. In its
cost proposal, Hill originally proposed a 10 percent profit element built into its fixed labor rates for A&E
services and an additional 10 percent premium (profit) for oversight on subcontracted construction
services. See Summary of Acquisition Pre/Post Negotiation Memorandum {September 23,2008}. During
Background
!n:t*rn«l Address (URL) • hKo-'/wvv ooa
v/in Vegetable Cm into on 100*^ Posicon&trrar, C'"anm Ftee ReeyDsS
-------
cost negotiations, Hill demonstrated that that the market for A&E services and construction
management/oversight are different - namely, that construction management/oversight is riskier and
that such additional risk needed to be reflected in the contract's cost structure. Hill's proposed 10
percent premium (or profit) on overseeing subcontracted construction work reflected the existing
market differential between A&E and construction oversight services. That additional risk could be
captured either through higher fixed rates for every hour performed by Hill - regardless of whether they
were performed doing A&E or construction oversight-or the additional construction oversight risk
could be captured by a premium associated with only those tasks.
Under EPAAR 1515 404-71, the targpt range for profit on subcontracted work ranges from 1-4
percent, During cost negotiations, rather than capture additional construction oversight risk through a
higher fixed rate for every hour that Hill performed under the contract, the Contracting Officer
negotiated a four {4) percent "premium" to be paid to Hill only in performing construction
management/oversight (reduced from the proposed 10 percent premium), as well as a reduction in the
overall profit rate on Hill's fixed rates to 9.5 percent. While this premium rate structure could have been
reflected by creating two separate fixed rates in the contract-one for A&E work and one for
construction management/oversight - this premium rate for construction management/oversight was
captured by adding a 4 percent premium (labeled as "profit") applicable to construction subcontracts
only.1
Hill has been performing the contract since the September 24, 2008 award date. Hill has billed
and EPA has paid over S1.5 million under the subcontract management/oversight premium. In its audit
report, the DIG has questioned this premium payment to Hill and has recommended that EPA pursue
recovery of these funds from Hill,
Discussion
1. The Region 9 RAC Contract included a Proper Mandatory Payments Clause and EPA's
Payments to Hill Were Proper
As we have previously discussed, we do not believe that the 4 percent premium for construction
management/oversight on subcontractor labor (labeled as "profit") is prohibited by law or is otherwise
unallowable. While it would have been clearer to have established two separate rates under the
contract for A&E work and for construction management/oversight, the purpose of the premium was to
compensate Hill for the additional risk specifically associated with construction management/oversight
without spreading that risk over every hour performed on both A&E work and construction
management/oversight by generally increasing the contract's fixed rates. The additional four percent
premium on subcontracted construction services is consistent with Agency guidelines. See EPAAR
1515,404-71; see also FAR 15,404*4.
Moreover, contrary to the OIG's suggestion, EPA included a proper payment clause in the Region 9
RAC contract, EPAAR 1552,232-73, "Payments - Fixed-Rate Contract," is a mandatory clause that is
1 As stated in OARM's January 24,2013 response to the audit. Region 9 has committed to including a
comprehensive set of rates in future contracts that segregates those functions associated with A&E work from
those associated with construction oversight services. In addition, OAM surveyed other similar headquarters and
regional contracts and determined that the pricing method at issue here was unique to this one Region 9 RAC
contract.
2
-------
required to be used in EPA fixed-rate contracts. This clause was codified in the Code of Federal
Regulations (CFR) on March 8,1984, and has been amended twice since then - On October 3,2000, and
on February 4, 2002.
EPAAR 1552.232-73 was properly added as a FAR supplemental clause in accordance with
procedures set forth at FAR 1.3,1.4, and 1.5. As a general matter, it is the Administrator of the General
Services Administration (GSA), the Secretary of Defense and the Administrator of the National
Aeronautics and Space Administration (NASA) th3t are statutorily required to "jointly issue and maintain
... a single Government-wide procurement regulation ... the Federal Acquisition Regulation." 41 U.S.C.
§ 1303(a)(1). Other executive agencies may only issue federal procurement related regulations that are
"essential to implement Government-wide policies and procedures within the agency; and [are]
additional policies and procedures required to satisfy the specific and unique needs of the agency." 41
U.S.C. § 1303(a)(2)(A) & (B). It remains the responsibility of the GSA Administrator to ensure consistency
of agency procurement regulations with the FAR. 41 U.S.C. § 1303(a)(3).
The general authority for agencies to issue or authorize regulations that supplement the FAR is
found in Subpart 1.3. Agency acquisition regulations are limited to those necessary to implement FAR
policies and procedures within the agency or to additional policies, procedures, solicitation provisions or
contract clauses that supplement the FAR to satisfy the specific needs of the agency. FAR 1.302. All
agency-wide acquisition regulations are published in the Federal Register for comment and then
codified in 48 CFR. FAR 1.303.
in addition to supplemental clauses to meet specific agency needs, agencies may promulgate
deviations to the FAR under FAR Subpart 1.4. Deviations are policies, procedures, solicitation provisions,
or contract clauses that are inconsistent with the FAR, but are necessary to meet an agency's specific
needs or requirements. FAR 1.401, 1.402. Deviations may be issued on an individual or class basis. FAR
1.403, 1.404.
Under FAR Subpart 1.5, prior to publishing a proposed FAR supplemental regulation or
deviation, an agency makes an internal determination that the proposed revision would alter the
substantive meaning of any FAR coverage beyond the internal operating procedures of the agency. If so,
then the proposed FAR supplement or deviation is processed for inclusion in the Federal Register,
thereby providing the public with an opportunity to provide comments on the proposed FAR
supplement or deviation. FAR L.501-503.
Here, EPAAR 1552.232-73 was added to 48 CFR in 1984 and was amended through the public
notice and comment process twice since its initial publication. EPAAR 1532.111 mandates its inclusion
in indefinite delivery/indefinite quantity contracts like the Region 9 RAC contract
2 The OIG's Reliance on FAR 52.232-7, "Payments under Time-and-MateriaJs and Labor-Hours
Contracts'" Is Misplaced.
In its September 3, 2013 opinion, OIG counsel opines that FAR 52.232-7, "Payments underTime-
and-Materialsand Labor-Hours Contracts/' is a mandatory clause that should have been included in the
RAC contract instead of EPAAR 1552.232-73. The opinion further argues that this FAR clause should be
read into the contract under the "Christian Doctrine." See G.LChristian & Associates v. United States,
161 Ct. CI. 1, 312 F.2d 418.160 Ct. CI. 58,320 F,2d 345, cert, denied, 375 U.S. 954 (1953J, 170 Ct. CI 902,
cert, denied, 382 U.S. 821 (1965). In the OIG's view, this FAR clause's prohibition on payment of profit
3
-------
on "materials" prohibited the premium payment made to Hill for construction oversight, and that EPAAR
1552.232-73's silence on this matter renders it inconsistent with the FAR clause and that its inclusion in
the RAC contract without being labeled as a "deviation" renders it ineffective. As discussed below, the
OIG is incorrect in several ways: (1) The Christian Doctrine does not require FAR 52.232-7 to be included
in the contract; and {2} even if ft did, the profit payment prohibition in that clause is inapplicable to the
subcontracted construction services at issue here. As a result, EPAAR 1552.232-73 is not inconsistent
with FAR 52.232-7, its inclusion in the contract was appropriate, and EPA's payment of a 4 percent
premium to Hill for overseeing subcontracted construction services was not prohibited.
A. The "Christian Doctrine" Does Not Require EPA To Read FAR 52,232-7 Into The Region 9
RAC Contract
As a general matter, under the Christian Doctrine, a court may insert a clause into a government
contract as a matter of law if that clause is required by federal regulation and underlying statutory
authority. As noted in General Engineering & Machine Works v. O'Keefe, 991 F.2d 775 (Fed. Cir. 1993),
the Christian Doctrine "does not permit the automatic incorporation of every required contract clause."
Rather, the doctrine only requires incorporation of missing, mandatory clauses that "express a
significant or deeply ingrained strand of public procurement policy." Id, at 779. However, the Christian
Doctrine has also been used over the years to incorporate "less fundamental or significant mandatory
procurement contract clauses such as a clause permitting correction of mistakes in bid (Chris Berg, Inc.
v. United States, 426 F.2d 314,317 (Ct. Ct. 1970), a regulation requiring a reasonable cancellation ceiling
on a multiyear contract (Applied Devices Corp. v. United States, 591 F.2d 635, 640 (Ct. CI. 1979), and a
statute containing pricing rules (Rough Diamond Co. y. United States, 351 F.2d 635, 642-43 (Ct. CI. 1965),
cert, denied, 383 U.S. 957 (1966),
The General Engineering Court announced a three-step process for application of the Christian
Doctrine: 1. is the clause mandatory; 2. does the clause express a significant or deeply Ingrained strand
of public procurement policy; and 3. is the clause written to benefit the party seeking incorporation.
However, it did not provide definitive guidance on the second prong of that test, in a subsequent case,
5J. Amoroso Construction Co. v. United States, 12 F.3d 1072 (Fed, Or. 1993). the Federal Circuit affirmed
the Claims Court's decision to read the correct Buy American Act clause into a construction contract and
denied the contractor's claim for the costs of complying with that clause. The Court concluded that the
Buy American Act, in and of itself, evidences a significant and deeply Ingrained strand of public policy,
was significant because it had been in effect for many years, and that it was irrelevant whether the use
of the wrong clause was intentional or inadvertent.
Of particular interest in this case is Judge Plager's concurring opinion which points out some of
the troubling aspects of the Christian Doctrine and argues for very limited use thereof. He notes that
the G.L Christian case itself had a unique set of facts which led that court to fashion a special remedy.
Amoroso> 12 F.3d at 1079. In the absence of such special circumstances:
[tjhere are weil established doctrines available to a court for equitably adjusting
the rights and duties of contracting parties... permitting} a court to construe a contract
in light of the behavior and presumed intent of the contracting parties. The so-called
Christian doctrine is not among these recognized techniques and should be limited to
the special circumstances that called it forth for three reasons...
4
-------
First, unlike traditional contract doctrines, the Christian doctrine is not tied to
intent of the parties... [which]... provides contracting parties with a modicum of
predictability {in interpreting contracts}, instead, the Christian doctrine would have
courts interpret cases by invoking an abstract notion of a "significant or deeply
ingrained strand of procurement policy" ... a standard that can be tied to anything or
nothing, and is therefore inherently unpredictable.
Second, the Government whpn contracting with the private sector for goods
and services enjoys the same contractual rights and remedies as do all others. In
addition, by virtue of its dominant role in the marketplace, the Government routinely
grants itself privileges - like the right to terminate a contract for the Government's
convenience without penalty -that are not available to other contracting parties... I see
no reason for gratuitously granting the Government an even more favored position in its
contract activity, and one based on abstract notions of "public policy;"" to do so smacks
more of autocratic rule than freedom of contract.
Third, the Christian doctrine in effect grants the Government authority, without
liability, to change its mind post-performance about what a contract was intended to
require on the grounds that some provision, which was omitted intentionally or
negligently, would, if present, have granted the Government valuable contract rights....
Absent predictable contract rights, the market will either refuse to participate or, more
likely, simply increase the price of participation. The Government may save some
money in the short run under this principle of "1 know my contract rights when I see
them," but in the long run, the public who pays the costs will be the losers.
Id. at 1079-80.
Effective February 12, 2007, FAR 52.232-7 was amended to add a prohibition on paying profit or
fee to a prime contractor on materials, in doing so, the FAR Council noted that this change was
consistent with the "historical intent of the clause and the concept of a T&M contract." However, this
change is not rooted in statute, and the FAR Council's comment does not clearly demonstrate that this
change expresses a "significant or deeply ingrained strand of public procurement policy." In light of
that, coupled with the fact that premium rates for different types of services under a fixed-rate contract
is not prohibited, and profit is not completely excluded on subcontracted services (see FAR 15.404-4 and
EPAAR 1515.404-71), the Agency should not conduct a post-performance change to what this contract
was intended to reflect - namely, a higher rate for construction oversight services than for architect and
engineering services.
B. Even Assuming For the Sake of Argument That FAR S2.232-7 Should Be Read Into The RAC
Contract, The Profit Prohibition Does Not Apply To the Subcontracted Work Under The
Contract.
Even assuming that the Christian Doctrine requires that FAR 52.232-7 be read Into the Region 9
RAC contract, we do not believe that the profit prohibition in that clause applies to this contract.
5
-------
As discussed above, effective February 12,2007, FAR 52.232*7 was amended to add the
following provision: "Except as provided for in 3l.2Q5-26(e) and (f), the Government will not pay profit
or fee to the prime Contractor on materials." FAR 52.232-7(b){7). Contrary to the OIG's suggestion,
"materials" in this prohibition do not include all subcontracts, but rather, are limited to "subcontracts
for supplies and incidental services for which there is not a labor category specified in the contract ."
FAR 16.601 (a) and 52.232-7(b)(l){ii) (emphasis supplied).
The subcontracts at issue here simply do not fit within this limited definition of "materials."
They were for construction services, not supplies. Moreover, the subcontracted construction services
for which Hill was paid an oversight premium were a significant portion of the work performed under
the RAC contract. Approximately $38 million of the $110 million spent under this contract (34.5
percent) was for subcontracted services. Such a high percentage of subcontracted services can hardiy
be considered "incidental." Accordingly, even if FAR 52.232-7 was read into the contract as a matter of
law, its profit prohibition on subcontracted supplies and incidental services simply does not apply in this
case.
Conclusion
Based on our understanding of the facts of this contracting issue, we do not believe that the
payment of a premium rate {labeled profit) to Hill for construction oversight work was improper. The
contract reflected the agreement between the parties that A&E work and construction oversight work
involved different risks and markets, and the contract included a properly promulgated EPA-speciftc
payment clause that is required to be included in EPA fixed-rate 10/IQ contracts. We do not believe that
the Christian Doctrine requires EPA to read FAR $2,232-7 into this contract, in any event, we also
believe that the OIG is misreading that clause to prohibit prime contractor profit on significant
subcontracted services. If you would like to discuss this matter further, please contact me at 202-564-
1703 until October 4,2013, or Ken Pakula at 202-564-4706.
cc: Ken Pakula, OGC
&
-------
Attachment D
-------
M' IJNill 1) SI A i 1 '¦> KNVIh'ONMt N I A! 1 'K'() i I CIMN A(,I NCV
o \\,s / I WASHINGTON. ! i C 204(50
% p-
¦W. . 15
w
December 18, 2013
< jr rrt^i
iH,«;E*r -on ,t mi ka-;
MEMORANDUM
SUBJECT: Resolution of Office of Inspector General Report No. 13-P-0209,
Opportunities for EPA-Wide Improvements Identified During
Review of a Regional Time and Materials Contract, April 4, 2013
FROM: Steven M. Alderton, Senior Associate Counsel
TO: Carolyn Copper, Assistant Inspector General
Office of Program Evaluation
You requested that the Office of Inspector General (OIG) Office of Counsel respond to a second U.S.
Environmental Protection Agency (EPA) Office of General Counsel (OGC) legal memorandum related
to the above-referenced matter. The OGC memorandum is dated September 19,2013, and was
forwarded to the OIG on November 11, 2013. As discussed below, we are not persuaded by OGC's
arguments.
By way of procedural background, this office issued a memorandum on September 3, 2013; that
document analyzed an earlier OGC legal document dated June 21, 2013. In our September
memorandum, we concluded that the Federal Acquisition Regulation (FAR) mandated that the CH2M
Hill contract, a contract with a time and materials pricing arrangement, should have included a clause
prohibiting a profit/fee (FAR Section 52.232-7(b)(7)). The contracting officer failed to include the
mandatory clause. We opined that the mandatory clause should be read into the contract under the
Christian Doctrine as a matter of law because the clause is designed to further a deeply engrained
procurement principle-that being the prohibition of double payment of a profit/fee. We further opined
that a related EPA Acquisition Regulation (EPAAR) clause did not override the FAR clause. We
concluded that the $1,524,196.44 paid by the EPA for profit/fee to the contractor, CH2M Hill, was paid
in violation of the FAR and that it should be returned to the government. (The factual background
related to this matter was detailed in our September memorandum, and so it will not be included in this
discussion.)
OGC's legal positions set out in its September 19 memorandum are discussed below. With the exception
of one new argument, the memorandum reiterates the same positions as in its first document. No
position taken in the second OGC memorandum warrants a revision to our conclusion that the FAR
clause in question is applicable to the CH2M Hill contract, and that the EPA seemingly violated the
FAR when it agreed to pay additional profit/fee to the contractor.
SfttAULd-
iritrfntf AfMjrcK.fi fUNi > * '•,?!:< v ¦-
km v v> : fH*- * s-niUMt! H'! J*^;. I'.
-------
Analysis of Second OGC Memorandum
First, OGC reasserted its claim that the profit/fee in question was intended to be a "premium" rather than
a profit/fee, and that therefore it was not in violation of the FAR clause. We are not persuaded by this
position. Regardless of what one calls it, the payment functioned as profit/fee-on top of the negotiated
fixed rate, and the parties perceived it as such. The contractor considered the 4 percent payment to be a
profit/fee. The EPA contracting officer used the term "profit" in the contract.
Second, OGC restated its position that an EPAAR clause included in the CH2M Hill contract-that did
not forbid a pro fit/fee—negated the mandatory FAR clause. But, as we stated in our September
memorandum, the FAR at Subsection 1.304(b)(2) specifies that agency acquisition regulations, except
as required by law or when a deviation is authorized, "shall not" conflict or be inconsistent with FAR
content Without the legal requirement or waiver, the EPAAR clause in the CH2M Hill contract cannot
trump the FAR.
OGC now appears to be making the argument that the codification and amendments of the EPAAR
clause-all of which took place before 2003-essentially constituted a deviation from the FAR clause in
question. The weakness in this argument is that the FAR clause in question was not in existence when
the EPAAR clause was codified and amended; the much earlier EPAAR clause cannot constitute a
deviation from the later FAR clause.
Third, OGC again argued that the FAR clause should not be read into the contract as a matter of law
under the Christian Doctrine. OGC quoted generously from a concurring opinion (not the majority
opinion) in a federal case wherein the court used the Christian Doctrine to incorporate a clause into a
government contract. The concurring judge suggested that the Christian Doctrine should be reserved for
special circumstances. A concurring opinion, however, does not disturb the authority of majority
opinions nor establish precedent concerning application of the doctrine.
The FAR at Subsection 32.111(a)(7) states that the FAR clause at 52.232-7(b)(7) "shall" be inserted
"when a time-and-materials contract is contemplated." The contracting officer for the CH2M Hill
contract, however, failed to follow the FAR requirement. The failure to include the requisite FAR clause
leads to the fundamental question of whether the government should suffer negative consequences
arising from the mistake. As detailed in our September memorandum, the Christian Doctrine holds that a
procurement requirement mandated by law should be read into a contract as a matter of law if the
requirement grows out of a deeply engrained procurement principle. We quoted from legislative history
of the clause that shows the FAR Councils believed the clause to grow out of the historical intent and
concepts relating to time and materials contracts. Further, and most importantly, the Councils stated that
the intent behind the clause was to avoid the payment of profit/fee on top of the profit that was
negotiated as part of the labor rate. In short, the key procurement principle at the core here is that the
government must avoid double payment of profit.
In our September memorandum, we cited to a directly applicable Federal Circuit case {General
Engineering and Machine Works v. O'Keefe, 991 F.2d 775 (Fed. Cir. 1993)) where the court stated that
to not incorporate a missing provision into a contract when the law mandates incorporation and where a
significant procurement principle is at stake would be to thwart congressional legislative policy {Id. at
779-80). In that case, like here, the Federal Circuit Court supported the government's decision to
incorporate into a time and materials contract a mandatory, missing procurement clause that was
designed to deter double payments and thus discourage "unnecessary and wasteful spending of
2
-------
government money" (Id. at 780). The court added that a contractor is not disadvantaged when a missing
clause is incorporated as a matter of law because government contractors "are presumed to have
constructive knowledge of federal procurement regulations" (Id.). The facts of the General Engineering
case are very similar to the fact pattern here; OGC has not provided applicable case law to support its
position that the clause should not be incorporated. As we previously opined, we believe that avoidance
of double payment reflects a deeply ingrained and significant procurement policy. Because of the
important principle underlying the mandatory FAR clause at Section 52.232-7, the clause should be
incorporated by law into the CH2M Hill contract.
Fourth, OGC raised a new argument. OGC contended that-even if the mandatory FAR clause were read
into the contract under the Christian Doctrine as a matter of law—the clause does not apply to the facts in
the CH2M Hill contract. The clause in question is applicable to a time and materials contract. OGC
contends that the subcontracts for services at issue in this case did not fit within the definition of
materials. The FAR definition of materials, included at Section 16.601(a), is, in part, as follows:
"subcontracts for supplies and incidental services for which there is not a labor category specified in the
contract." OGC concluded that the subcontracted services in the CH2M Hill contract do not fit the FAR
definition because they constituted approximately one third of the total value of the contract and
therefore they were not incidental. OGC did not provide a legal authority that supports its position.
Our research has not found legislative history or case law to help ascertain what the drafters of the
definition of "materials" meant by "incidental services." But, Black's Law Dictionary (9th Edition)
defines "incidental," as: "subordinate to something of greater importance; having a minor role." Using
that legal definition, the percentage of services performed by the CH2M Hill subcontractors here is
incidental to (read subordinate to) the work performed by the prime contractor. The major role
(approximately two thirds of the value of the contract) was performed by the CH2M Hill prime
contractor, and the minor role was performed by its subcontractors. Further, and importantly, the CH2M
Hill subcontracted services fit the FAR definition of materials because there is no labor category in the
contract that would cover them. Hence, one could reasonably argue-in line with a legal definition-that
costs for subcontractor services here were incidental to total prime contractor costs.
Finally, it does not make sense that the FAR would allow for the payment of double profit when
subcontracts for services are high in value; that would defeat the purpose underlying the mandated
clause. Indeed, because the value of the CH2M Hill subcontractor incidental services here was relatively
high, so also then was the degree of violation of a FAR clause that was designed to restrict a double
profit/fee.
Conclusion
The OIG legal position is fairly straightforward. The CH2M Hill contract is a time and materials pricing
arrangement. The FAR states that a clause prohibiting the payment of a profit/fee "shall" be included in
all time and materials contracts. The FAR prohibition seemingly applies to subcontracting services, like
those found in the contract in question, that are incidental or subordinate to work provided by the prime
contractor. The contracting officer failed to follow the FAR and include the mandatory clause in the
CH2M Hill contract. Case law directly supports the position that the FAR clause in question, because it
is intended to preclude the government from paying double for pro fit/fee, is a critical procurement
clause that grows out of an essential procurement policy. As such, the clause should be read into the
contract as a matter of law pursuant to the Christian Doctrine. The contracting officer's mistake should
not result in the wrongful government payment of $1,524,196.44 to a contractor for prohibited pro fit/fee.
That money must be recaptured.
3
-------
Attachment E
(The correct date for the memorandum attached hereto is March 25, 2014. Also, the correct date for
Attachment 1 is March 18 through 20, 2014.)
-------
UNI 1S D SI All S I.NVIUONM! NiAi PRO I I T. i ION AG I NCY
WASH! NG10 N. I") G ?04B0
March 25, 2013
offiu or
AWt'.'')Pi;| Mf MAI
MEMORANDUM
SUBJECT: Resolution of Office of Inspector General Report No, 13-P-0209,
Opportunities for EPA-Wide Improvements Identified During Review
of a Regional Time and Materials Contract, April 4, 2013
FROM: Steven M. Alderton, Senior Associate Counsel'
TO: Carolyn Copper, Assistant Inspector General
Office of Program Evaluation
This memorandum is in response to additional material provided to OIG by the EPA Office of .
General Counsel subsequent to the March 12 meeting between the IG and the CFO, in emails
dated March 18 through 20, 2013. See Attachment 1. On March 20, OGC wrote that the legal
issues in this matter appeared to center around two points: "1. The EPAAR clause in the
contract was legally permissible and FAR 52.232.7 was not required in the contract; 2. Even if
we can't agree to No. 1 above, a correct reading of FAR 52.232-7 and FAR's definition of
incidental services, results in the conclusion that profit or fee on the subcontracted services here
is not prohibited."
With regard to OGC's first legal position, OIG repeatedly stated in the evaluation report and in
the prior two legal memoranda on this topic that the FAR clause at Section 52.232-7 was
required by law to have been included in the Remedial Action contract. Specifically, the FAR at
Subsection 32.111(a)(7) states that the FAR 52.232-7 "shall" be inserted "when a time-and-
materials or iabor-hour contract is contemplated." Given that the RA contract is a time and
materials contract, we continue to disagree with the OGC position that FAR 52.232-7 "was not
required in the contract." Further, the OIG has evidenced that the outdated EPAAR clause that
was included in the RA contract, and that did not require the prohibition set out in the similar
FAR clause, cannot be used by the agency to negate the FAR clause.
With regard to its second legal position listed above, OGC contends that the subcontracting
work in the RA contract for which the government paid a four percent profit does not fit the FAR
definition of "materials" and therefore the work was not covered by FAR 52.232-7. The FAR
clause states that the government is prohibited from paying a profit to the prime contractor on
"materials." In the case of the RA contract, the government paid profit on work performed by a
subcategory of subcontractors. The FAR definition of "materials" at Section 16.601(a) includes
"[subcontracts for supplies and incidental services for which there is not a labor category
specified in the contract." OGC most recently argued in the attached emails, in a variation from
an earlier position, that the subcontractors' work should not be considered "incidental services"
because it did not fit the FAR definition of incidental services in an architecture and engineering
(A&E) contract, and also because there were labor categories for the subcontracting work in the
RA contract
I
%
¦uletnet AiMruss. iUKI i » Nip ."-nv/.v 1 'iov
l,v. V |i«t'l-v, V 1.IN> • ""intci %v!'i Vt-rHltNi* Oil B.yvii I'.t. .jc i' • r< '¦rsirnv i* ifr.t
-------
2
The first question is whether the subcontracting.activities listed in the RA contract fit the
definition of "incidental services" for A&E contracts. OGC noted, with citations, that the FAR
examples of services incidental to an A&E contract include: studies, investigations, surveying
and mapping, tests, evaluations, consultations, comprehensive planning, program management,
conceptual designs, plans and specifications, construction phase services and other related
services. OGC indicated that this list of activities is different from the "construction" work
performed by the RA contract subcontractors. However, the RA contract at clause B,5(d), a
clause that covered the description of special subcontracting work for which a four percent profit
was charged to the government, states that the work "include[s], but [is] not limited to: well-
drilling, analytical services (when not provided by the government), special consultants to
support technical projects or to serve as expert witnesses, aerial mapping, surveying, fencing,
or construction activities associated with a Remedial Action," See Attachment 2. Contrary to
OGC's characterization of the subcontracting work as simply "construction," the RA contract
envisioned that the subcontractors would perform work related to the sort of activities outlined in
the FAR as services incidental to an A&E contract. In short, the special subcontracting services
fit the FAR definition.
The second question is whether there were in fact labor categories for the profit-related
subcontracting activities in the RA contract. OGC asserted, without evidence, that there "are
labor categories for construction labor" in the RA contract and that the subcontracting work had
been charged in a manner consistent with those rates. However, a review of the RA contract
language and actual invoices does not support OGC's position. RA contract clause 13.5(d)
indicates that the special category of subcontracting work for which a four percent profit was to
be charged was to be treated as "separate and distinct from the amounts that may be
negotiated for subcontractors which constitute part of the prime contractor's permanent contract
team." A separate CLIN was established for the profit-related subcontracting work. (As noted in
the clause, there were other subcontractors that were part of the prime contractor's team; they
are not the focus of this discussion, however, because there was no charge for profit connected
to their work.) The RAC subcontract-specific clause does not apply established labor rates to
the separately treated subcontractors.
The invoice at Attachment 3 evidences how the special subcontract work was charged. Half
way down the invoice is the category "Subpool;" this captures work performed by the
subcontractors in question. Below that category is "Subpool Profit" - with the four percent profit
calculations. Importantly, this information is treated as separate from the labor categories which
were applied to the prime contractor and its team as listed at the top of the page. The
evaluators did not find in the sample of invoices they reviewed that the "Subpool" work was
charged by labor category. Supporting documents for "Subpool" work did not even break out
labor from supplies; it simply used the initials "LS" for "lump sum." There is no evidence in the
RA contract and related invoices that the subcontracting work for which a profit was attached
had been charged to the government consistent with contractually established labor rates; to the
contrary, all evidence points to the fact the work was treated as a separate lump sum charge
with no apparent connection to labor rates. Hence, the RA contract clause and the related
invoices indicate that in fact there were no labor categories associated with the specially
subcontracted work.
In sum, OIG Office of Counsel continues to conclude that the FAR clause prohibiting profit on
materials to a prime contractor should have been, by law, included in the RA contract. EPA did
not include the clause. Instead, it included an outdated EPAAR clause that contradicted the
-------
3
FAR clause, and that cannot be used to supplant the FAR. It also appears to be the case that
the RA contract subcontracting work for which a four percent profit was charged {in
contravention of the FAR), fits the FAR definition of "materials" because it is the sort of work that
is incidental to an A&E contract, and it apparently was not charged consistent with contractually
established labor rates.
-------
Attachment 1
Alderton, Steven M.
Sent:
To:
Cc:
Subject:
From:
Alderton, Steven M.
Thursday, March 20, 2014 10:49 AM
Pakula, Kenneth; Redden, Kenneth
Larsen, Alan; Hanger, Eric; Lewis, Eric; Walker, Khadija; Baughman, Christine
RE; Proposed meeting re OIG Report No. 13-P-0209
Ken,
Thanks for your continued efforts to explain your position.
With regard to the first point set out below, we most certainly do not agree with your position. Of course it was "legally
permissible" to include the EPAAR clause. What is not "legally permissible" is to use an EPAAR clause-that fails to
include a specific prohibition set out in a requisite FAR clause—to supplant the FAR clause. As you know, a legally
mandated FAR clause with a specific prohibition cannot be negated by an EPAAR clause; it can only be supplemented by
it. As for whether the FAR clause was in fact required in the RAC contract, the FAR at Subsection 32.111(a)(7) states that
FAR clause 52.232-7 "shall" be inserted "when a time-and-materials or labor-hour contract Is contemplated." Given that
the RAC contract is a T&M contract, then your argument that the FAR clause "was not required" in the contract fails.
With regard to your second point, there seems to be more than a slight shift or addition of an argument. Jon Baker, in
his September 19 memorandum, acknowledged that the subcontracts fell generally into the category of "services for
which there is not a labor category specified in the contract." Seemingly he should have known whether that was
factually correct given that he worked on the RAC contract. His only point of contention was that the subcontracted
"construction services" were too high in value to be considered "incidental." Hence we focused on the definition of
"incidental." Below, if I understand you correctly, you now take the position that - by definition - the subcontracted
work flat out does not fit into the category of services, incidental or otherwise, "for which there is not a labor category
specified in the contract." That seems to be a significant shift in argument and interpretation of relevant facts.
We will focus on your material set out yesterday, and try to determine whether there is legal and/or factual merit before
the meeting on Wednesday.
Steve
From: Pakula, Kenneth
Sent: Thursday, March 20, 2014 9:04 AM
To: Alderton, Steven M.; Redden, Kenneth
Cc: Larsen, Alan; Hanger, Eric; Lewis, Eric
Subject: RE: Proposed meeting re OIG Report No. 13-P-0209
OGC isn't abandoning any arguments, we are just trying to shift the focus to where it can more easily lead to resolution
- which, in my opinion, centers on the following two points:
1. The EPAAR clause in the contract was legally permissible and FAR 52.232.7 was not required to be in the
Steve,-
contract;
l
-------
2. Even if we can't agree to No. 1 above, a correct reading of FAR 52.232-7 and the FAR's definition of incidental
services, results in the conclusion that profit or fee on the subcontracted construction services here is not
prohibited,
1 believe Jon Baker's reference to the percentage of subcontracted work as being too high to be "incidental" was simply
an additional argument provided if one were to use the commonly accepted definition of "incidental" Quite frankly, he
should have initially included the FAR and case law references 1 subsequently provided to the OIG which reveal that the
FAR and case law address the parameters of the term "incidental services," So, we really don't need to be focusing on
the common use of the term or Black's Law Dictionary's definition - both are irrelevant given the FAR and case law
guidance.
Ken Pakula
Assistant General Counsel
Procurement Law Practice Group
Office of General Counsel
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, D.C.
Phone; 202.564.4706
Fax: 202.565.2478
From: Alderton, Steven M.
Sent: Wednesday, March 19, 2014 5:53 PM
To; Pakula, Kenneth; Redden, Kenneth
Cc: Larsen, Alan; Hanger, Eric; Lewis, Eric
Subject: RE: Proposed meeting re OIG Report No. 13-P-0209
Ken,
I'll review your response in greater detail later. Also, this has to be forwarded to the evaluators because they are
intimately familiar with the contract in question.
But, generally, am I to now understand that you have decided to abandon OGC's argument re "incidental services" as set
out in the OGC September 19 memorandum? That document referred to the subcontracted work as "construction
services." Also, that document, without providing legal support, determined that the thirty percent figure of
subcontracted services was too large be considered "incidental services." We did not raise any of these points; OGC
did. So, for clarity sake, is the OGC "incidental services" set out in the September 19 memo no longer on the table?
Steve
From: Pakula, Kenneth
Sent: Wednesday, March 19, 2014 5:17 PM
To: Alderton, Steven M.; Redden, Kenneth
Cc: Larsen, Alan; Hanger, Eric; Pakula, Kenneth
Subject: RE: Proposed meeting re OIG Report No. 13-P-0209
Steve,
I think the way to look at this is not to focus on the amount of work done or the percentages of work done and/or
whether the work came after or subsequent to the work done under the prime contract. Rather, simply look at the
language of FAR 52.232-7:
2
-------
7) Except as provided for in 31.205-26(e) and (f), the Government will not pay profit or fee to the prime Contractor on
materials,
52.232-7 states that the government will not pay profit to the prime on materials. Scroll up within the same clause to
the definition of materials -
b) Materials,
(1) for the purposes of this clause—
(i) Direct materials means those materials that enter directly into the end product, or that are used or consumed
directly in connection with the furnishing of the end product or service.
(ii) Materials means—
(A) Direct materials, including supplies transferred between divisions, subsidiaries, or affiliates of the
Contractor under a common control;
(B) Subcontracts for supplies and incidental services for which there is not a labor category specified in the
contract;
(C) Other direct costs (e.g., incidental services for which there is not a labor category specified in the contract,
travel, computer usage charges, etc.); and
(D) Applicable indirect costs.
Subcontracted construction work is not "supplies" nor is it "incidental services for which there is not a labor category
specified in the contract" - My reference to FAR 36.6 and' 2.101 was to show that the FAR considers incidental services
to be services tangentially related to the main work being done, i.e., if the work is A/E work then, incidental work would
be mapping, surveying, etc. In addition, there are labor categories for construction labor, most likely non-professional
labor -1 believe often referred to as category P-4 labor. So, because the construction work we are talking about does
not fit within 52.232-7's definition of "materials," the fee prohibition does not apply to the subject work.
The above definition of incidental services as tangentially related is also well supported in GAO case law-see the Forest
Service case.
I hope this helps clarify OGC's position.
Ken
Ken Pakula
Assistant General Counsel
Procurement Law Practice Group
Office of General Counsel
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, D.C.
Phone: 202.564.4706
Fax: 202.565.2478
From: Aiderton, Steven M.
Sent: Tuesday, March 18, 2014 5:12 PM
To: Pakula, Kenneth; Redden, Kenneth
Cc: Larsen, Alan; Hanger, Eric
Subject: RE: Proposed meeting re OIG Report No. 13-P-0209
Ken,
3
-------
Thanks for the quick response. But, alas, I remain confused.
In the second OGC opinion In this matter, dated September 19, 2013, a new argument was introduced on pages five and
six. As I understand it, OGC contended in this new position that even if the requisite FAR clause in question had been
included in the contract, it would not have been applicable given certain facts related to the contract. OGC correctly
noted that the FAR clause prohibited payment of a profit to a prime contractor for materials charged in the context of a
time and materials contract. OGC then turned to the FAR definition of "materials." That definition at Section 16.601(a)
states, in part, that materials include "subcontracts for supplies and incidental services for which there is not a labor
category specified in the contract" The subcontracted work was for construction services. OGC then concluded that
the subcontracted services do not fit the definition of "materials" because they constituted approximately one third of
the total value of the contract. OGC did not provide legal support for its interpretation or definition of "incidental
services."
On December 18,2013, OIG forwarded its response to the September 19 OGC memorandum. In the discussion about
the argument above, we noted that we did not find case law or legislative history to help define what number-wise the
FAR meant by "incidental services" - as referenced in the definition of "materials." Hence, we turned to Black's Law
Dictionary which defined incidental as "subordinate to something of greater importance." By that definition, most
certainly the approximately one third of contracted subcontractor services constituted an incidental part of the total
contract. We also raised a second argument relating to the purpose of the FAR profit prohibition.
I expected OGC to forward legal support for the position that, in line with the FAR definition of "materials," thirty
percent of the value of a contract does not constitute "incidental services" because it is too high of an amount. But, the
material below does not seem to address when services are incidental (say 15%) or not incidental (say 50%). We
continue to take the position that the thirty percent figure fits into the general definition of "incidental" because it's
subordinate to the seventy percent of the remaining work that was done on the contract.
it is not clear to me how the material highlighted below supports the original OGC argument.. Perhaps you can briefly
walk me through your analysis based on the material below.
Steve
From: Pakula, Kenneth
Sent: Tuesday, March 18, 2014 1:07 PM
To." Alderton, Steven M.; Redden, Kenneth
Cc: Larsen, Alan; Hanger, Eric
Subject: RE: Proposed meeting re OIG Report No. 13-P-0209
Steve -
OGC's position was fully briefed in the meeting last week. In addition, when you and 1 spoke on the phone the week
prior, I provided you with all of the support for OGC's interpretation of "incidental services" that I relied on in last
week's meeting. In short, OGC's position regarding the definition of "incidental services" is based upon the language
contained in FAR Part 36.601-4(a)(3), FAR 2.101(a)(3), case law - including but not limited to 68 Comp Gen 555 (Matter
of Forest Service,) and even GSA's website (FAQ. #23).
FAR 36.601-4 Implementation.
(a) Contracting officers should consider the following services to be "architect-engineer services" subject to the
procedures of this subpart:
(1) Professional services of an architectural or engineering nature, as defined by applicable State law, which the
State law requires to be performed or approved by a registered architect or engineer.
4
-------
(2) Professional services of an architectural or engineering nature associated with design or construction of real
property.
(3) Other professional services of an architectural or engineering nature or services incidental thereto (including
studies,*,investigations, surveying and mapping, tests, evaluations, consultations, comprehensive planning, program
management/conceptual designs, plans arid specifications, value engineering, construction phas# services, soils
engineering,-drawing reviews, preparation-of operating and maintenance manuals and other related services) that
logically or justifiably require performance by registered architects or engineers or their employees
FAR 2.101 (a)(#) "Architect-engineer services," as defined in 40 U.S.C. 1102, means—
(1) Professional services of an architectural or engineering nature, as defined by State law, if applicable,
that are required to be performed or approved by a person licensed, registered, or certified to provide
those services;
(2) Professional services of an architectural or engineering nature performed by contract that are
associated with research, planning, development, design, construction, alteration, or repair of real
property; and
(3) ^se,otih.er'^ro^io|Ml s^^,ofraarchitecto]^prengi^rmg-natee,,0;in,^^i^Mi^c^,
ffiafcmembersblthe pipfes^pns.-(gmd individu^5^|^^an|»loy)?m8y
surveying '^^implgn^rfests,
and^specificationSj value engineering, constructionphase services, soils engineering, drawing reviews,
preparation of operating and maintenance manuals, and other related services.
Here is an excerpt from the above-referenced Forest Service case:
The second part of the definition of A-E services included "incidental services that members of these (A-E) professions and those in
their employ may logically or justifiably perform." 40 U.S.C. Sec. 541. interpreted this language as meaning that Brooks Act procedures
are;applieabie where the services may "logically or justifiably" be performed by A-E firms and where such sen/ices are "incidental" to
oth'er-prbfessionai A-E services. Thus, as stated above, we interpreted the Brooks Act as requiring incidental services to be procured
with Brooks Act procedures only when provided by an A-E firm in the course of providing other A-E services and as part of an A E
project AAA Engineering and Drafting, Inc., et al„ 66 Comp.Gen, at 440.
From GSA's website:
1, What services are subject to QBS procedures in FAR 36.6?
In accordance with FAR 36.601-4, contracting officers should consider the following services to be A/E services
and thus subject to QBS procedures;
1. Professional services of an architectural or engineering nature, as defined by applicable state law, which the state
law requires to be performed or approved by a registered architect or engineer;
2. Professional services of an architectural or engineering nature associated with design or construction of real
property;
3. Other professional services of an architectural or engineering nature or services Incidental .thereto (including
s^^WV^figaQons* surveying and •'mapping';-tests, evaluations, consultations, compcehehsiye-pianoing,
prdgram'manag6meht),'conceptuar'designs^plans ahd:speciflcations, value engineering, constructicjn;phase
services, soils engineering, drawing reviews, preparation of operating and maintenance manuals, and other
5
-------
related services) that logically or justifiably require performance by registered architects or engineers or their
employees; and
4. Professional surveying and mapping services of an architectural or engineering nature. Surveying is considered to
be an architectural and engineering service and shall be procured pursuant to FAR 36.601 from registered
surveyors or architects and engineers. Mapping associated with the research, planning, development, design,
construction, or alteration of real property is considered to be an architectural and engineering service and is to be
procured pursuant to FAR 36.601.
In light of the above, I don't believe that a formal memorandum is necessary.
Ken
Ken Pakula
Assistant General Counsel
Procurement Law Practice Group
Office of General Counsel
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, D.C.
Phone: 202.564.4706
Fax: 202.565.2478
From: Alderton, Steven M.
Sent; Tuesday, March 18, 2014 12:37 PM
To.* Redden, Kenneth; Pakula, Kenneth
Cc: Larsen, Alan; Hanger, Eric
Subject: Proposed meeting re OIG Report No. 13-P-0209
Thank you for the invitation to a meeting this week to discuss legal issues relating to the above-referenced report. We
would like to meet with you to discuss the issues. However, there is one legal issue that has not been fully briefed by-
OGC. The issue was raised at the end of OGC's September 19,2013, legal memorandum, and relates to the definition of
"incidental services." OGC did not provide legal support for its interpretation of that phrase, and so it was difficult to
fully respond to the issue in the OIG December 18, 2013, legal memorandum. Ken Pakula mentioned on the phone that
you have legal support for your position. Therefore, before we meet, we ask that you forward a written legal position
relating to your definition of "incidental services" so that we can have a potentially fruitful discussion.
Please contact me if you have questions.
Regards,
Steve Alderton, J.D., Ph.D.
Senior Associate Counsel
Office of Counsel
EPA Office of Inspector General
202-566-0841
6
-------
B.S SUBCONTRACTING CLIN
(a) This contract includes a specified cost ceiling designated exclusively for
work that is to be performed by subcontractor(s) and managed by the prime
contractor. The cost ceiling {the "Subcontracting CLIN") is: S30M
(b) Subcontracts issued under this clause shall be either performance-based or
fixed price. The Contractor must request and receive concurrence from the
Contracting Officer (CO) prior to entering into any subcontract other than
performance based or fixed price.
(c) All work expended in task orders for this work will be recorded and
reported to EPA as required in the Reports of Work (Attachment 4).
(d) This subcontracting CLIN is separate and distinct from amounts that maybe
negotiated for subcontractors which constitute part of the prime contractor's
permanent contract team. All subcontracting, above the micro purchase
threshold, which is to be accomplished through this subcontracting CLIN must
be competed by the prime contractor, unless written approval to the contrary
is obtained from the EPA CO. Specific activities which generally necessitate
utilization of the CLIN include, but are not limited to: well-drilling,
analytical services (when not provided by the Government), special consultants
to support technical projects or to serve as expert witnesses, aerial mapping,
surveying, fencing, or construction activities associated with a Remedial
Action (RA).
(c) The amount specified for the Subcontracting CLIN is an estimate only. The
estimated amount for Subcontracting CLIN may be greater than or less than the
amount specified as long as the maximum contract ceiling amount is not
exceeded.
(f) If the full subcontracting CLIN dollars are under-utilized, there may be a
unilateral decrease in the subcontracting CLIN representing the unused portion
of the subcontracting CLIN inclusive of associated costs.
-------
Attachment 3
Substitute for PUBLIC VOUCHER FOR PURCHASES
Form 1035 AND SERVICES OTHER THAN
PERSONAL
Region 9 Billing No.: 020
US ENVIRONMENTAL PROTECTION AGENCY Contract No. EP S9 08 04
RTP-FINANCIAL MANAGEMENT CENTER CH2M HILL, INC
MAIL DROP - D143-02 P. 0. BOX 27-100
RESEARCH TRIANGLE PARK, NC 27711 KANSAS CITY, MO 64180
Task Order No.: 050-RARA-0917
IMM SPRING CREEK RA-PART 2
Voucher No
15
Reporting Period From: 07/31/2010 To: 08/27/2010
MAJOR COST ELEMENTS; HOURS
AMOUNTS
Labor Cateaorv Current Cumulative
Current
Cumulative
Principal Engineer/Scientist/Specialist 193.0 6,141.0
$45,426.41
$1,442,481.83
Senior Engineer/Scientist/Specialist 51.0 4,025.0
$10,457.04
$822,427.80
Project Engineer/Scientist/Specialist 94.2 11,675.1
$14,774.33
$1,827,772.01
Staff Engineer/Scientist/Specialist 199.0 8,324.2
$22,481.03
$938,863.98
Junior Engineer/Scientist/Specialist 13.5 2,718.6
$1,139.81
$229,360.80
Senior Technician 13.6 968.9
$1,630.52
$115,896.27
Technician 2.5 217.7
$171.95
$14,973.41
Administrative and Clerical 105.8 3,834.4
$7,818.62
$282,911.42
TOTAL LABOR 672.6 37,904.9
$103,899.71
$5,674,687.52
Other ODCs *
$4,406.24
$247,148.10
Travel
$4,604.88
$264,632.44
Subpool
$184,771.73
$10,709,806.59
TOTAL NON-LABOR
$193,782.85
$11,221,587.13
Subpool Profit
$7,390.87
$428,392.27
TOTALS - CURRENT AND CUMULATIVE
$305,073.43
$17,324,666.92
AMOUNT DUE THIS VOUCHER
$305,073.43
CH2M HILL INC
$269,418.74
$14,992,776.22
CH2M Hill Affiliates
$29,784.19
$1,603,065.36
Team Subcontracts
CFEST INC
$0.00
$0.00
CLEAR CREEK HYDROLOGY INC
$0.00
$236,185.82
CRITIGEN LLC
$1,067.00
$219,505.80
DAHL ENVIRONMENTAL ASSOCIATES
$0.00
$0.00
E2 CONSULTING ENGINEERS INC
$4,803.50
$273,133.72
ENVIRONMENT INTERNATIONAL GOVERNMENT LTD
$0.00
$0.00
Total Team Subcontracts
$5,870.50
$728,825.34
TOTALS BY FIRM - CURRENT AND CUMULATIVE
$305,073.43
$17,324,666.92
*** This voucher contains confidential business information ***
Prj#
392063
------- |