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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
April 4, 2013
Why We Did This Review
The purpose of this review was to
determine whether, for time and
materials contracts, the U.S.
Environmental Protection Agency
(EPA) has a process to verify that
contractor personnel met the
qualifications specified in the
contract and received the level of
services for which it paid. We
focused our review on remedial
action contract EPS90804 awarded
by EPA Region 9. The government
should only use a time and
materials contract when it cannot
accurately estimate either the
extent or duration of the work, or
anticipate costs with any
reasonable degree of confidence.
Contract EPS90804 supports EPA
responses to releases of hazardous
substances and counter-terrorism.
Under this contract, the region pays
the contractor a fixed hourly rate for
labor plus other direct costs.
A Region 9 contracting officer and
contracting officer representatives
monitor the contractor's activity.
This report addresses the
following EPA Goal or
Cross-Cutting Strategy:
• Strengthening EPA's Workforce
and Capabilities
For further information, contact
our Office of Congressional and
Public Affairs at (202) 566-2391.
The full report is at:
Opportunities for EPA-Wide Improvements Identified
During Review of a Regional Time and Materials Contract
What We Found
EPA Region 9 did not require its contracting personnel to verify that personnel for
the contractor had the qualifications necessary to execute contract EPS90804. This
may be an EPA-wide problem in managing time and materials contracts. In
addition, Region 9 contracting personnel did not consistently:
•	Update the statement of work that identifies the work it expects the
contractor to perform so EPA can use the statement of work to monitor
•	Document the review of the qualifications of contractor personnel performing
the contract tasks.
•	Document the reviews of monthly progress, contractor performance, and
quality of deliverables.
•	Become familiar with the contract.
•	Issue memorandums appointing contracting officer representatives (CORs).
These practices put EPA at risk of not receiving the level or quality of service for
which it paid. As the services ordered under the contract were to restore the
environment after the releases of hazardous substances, services that do not meet
the standards EPA intended under the contract could increase risk that human
health and the environment were not adequately protected.
Additionally, EPA Region 9 personnel negotiated a prohibited profit clause in the
contract, resulting in EPA improperly paying the contractor over $1.5 million in
additional profit.
Recommendations and Planned Agency Corrective Actions
We recommend that the Regional Administrator for Region 9 direct the contracting
officer for EPS90804 to require CORs to document oversight according to
regulations and policies, which he agreed to do. We also recommend that the
Regional Administrator recover funds for the prohibited clause, as well as
determine if the clause is in other contracts and recover funds for those contracts.
Finally, we recommend that the Assistant Administrator for Administration and
Resources Management enforce the requirement for CORs to ensure contract staff
meet the qualifications, and review EPA's practices for paying contractors who
perform similar activities. For the latter recommendations, the EPA officials
provided alternative corrective action without completion dates or they disagreed.
EPA must provide a corrective action plan in its final response.