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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Audit of American Recovery
and Reinvestment Act-Funded
Cooperative Agreement
2S-96099601 Awarded to the
Idaho Department of
Environmental Quality
Report No. 13-R-0206
March 28, 2013
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Abbreviations
ARRA
American Recovery and Reinvestment Act of 2009
CA
Cooperative Agreement
CFR
Code of Federal Regulations
CIPD
Certification of Independent Price Determination
EPA
U.S. Environmental Protection Agency
IDEQ
Idaho Department of Environmental Quality
IPA
Independent Public Accounting
RFQ
Request for Quotes
Hotline
To report fraud, waste, or abuse, contact us through one of the following methods:
e-mail: OIG Hotline@epa.gov write: EPA Inspector General Hotline
phone: 1-888-546-8740 1200 Pennsylvania Avenue, NW
fax: 202-566-2599 Mailcode 2431T
online: http://www.epa.gov/oiq/hotline.htm Washington, DC 20460
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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
13-R-0206
March 28, 2013
Why We Did This Review
The U.S. Environmental
Protection Agency awarded
American Recovery and
Reinvestment Act Cooperative
Agreement 2S-96099601 to the
Idaho Department of
Environmental Quality. The
Office of Inspector General
wanted to determine whether
IDEQ's procurements and use
of force account under the
cooperative agreement
complied with Code of Federal
Regulations requirements
under 40 CFR Part 35
Subpart O, and whether the
objectives of the cooperative
agreement were met. To do so,
the OIG contracted with Ollie
Green & Company, an
Independent Public Accounting
firm, to audit the agreement.
This report addressed the
following EPA Goals and
Cross-Cutting Strategies:
• Cleaning up communities
and advancing sustainable
development.
For further information, contact
our Office of Congressional and
Public Affairs at (202) 566-2391.
The full report is at:
www.epa.aov/oia/reports/2013/
20130328-13-R-0206.pdf
Audit of American Recovery and Reinvestment Act-
Funded Cooperative Agreement 2S-96099601 Awarded
to the Idaho Department of Environmental Quality
What the IPA Auditors Found
Ollie Green & Company, the IPA firm hired by the OIG to conduct the audit, found
that IDEQ complied with Idaho's state procurement policies and procedures, as
required by 40 CFR §35.6550(a), which referenced 40 CFR §31.36(a). The IPA
contractor also found substantial compliance with 40 CFR Part 35 Subpart O.
However, the IPA contractor found that IDEQ did not require its contractors to
include Certification of Independent Price Determination language in its bid
proposals as required by 40 CFR §35.6550(b)(3). The IPA contractor also found
that IDEQ did not require its contractors to have accident and catastrophic loss
insurance coverage as required by 40 CFR §35.6590(b). Finally, the IPA
contractor found that IDEQ did not require its contractors to retain its records for
10 years after submitting its final federal financial status report as required by
40 CFR §35.6705.
The IPA contractor is responsible for the content of the audit report. The OIG
performed the procedures necessary to obtain reasonable assurance about the
IPA's independence, objectivity, qualifications, technical approach and audit
results.
Recommendations and Corrective Actions
The IPA contractor's report recommends that the Region 10 regional
administrator require IDEQ to review and gain an understanding of the
requirements of 40 CFR §35.6550(b)(3) and ensure that all current and future bid
proposals contain CIPD language. The report also recommends that the regional
administrator require IDEQ to ensure that all contracts issued under this
cooperative agreement include a 10-year record retention period as required by
40 CFR §35.6705. The report also recommends that the regional administrator
require IDEQ to ensure that current and future contractors are covered by
accident and catastrophic loss insurance as required by 40 CFR §35.6590(b). In
addition, the report recommends that the regional administrator require IDEQ to
update its policies and procedures to ensure that they address CIPD, 10-year
record retention, and accident and catastrophic loss insurance requirements.
IDEQ agreed with three of the four findings but did not directly address the
recommendations in its draft report response. IDEQ has updated its procurement
manual to address the CIPD and record retention requirements. Region 10 had
no objections to the findings and agrees that IDEQ needs to address the
recommendations.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
March 28, 2013
MEMORANDUM
SUBJECT:
FROM:
Audit of American Recovery and Reinvestment Act-Funded
Cooperative Agreement 2S-96099601 Awarded to the
Idaho Department of Environmental Quality
Report No. 13-R-0206
Arthur A. Elkins Jr.
TO:
Dennis McLerran, Regional Administrator
Region 10
This memorandum transmits the final report for the audit of American Recovery and
Reinvestment Act cooperative agreement 2S-96099601 awarded to the Idaho Department of
Environmental Quality.
The independent public accounting firm Ollie Green & Company conducted this audit on behalf
of the Office of Inspector General. The audit was required to be conducted in accordance with
Government Auditing Standards, issued by the comptroller general of the United States. The IPA
firm is responsible for the audit report and the conclusions expressed in that report. The OIG
performed the procedures necessary to obtain a reasonable assurance about the IPA's
independence, objectivity, qualifications, technical approach and audit results in order to accept
the conclusions and recommendations.
A status of recommendations table is also provided at the end of this report that summarizes the
findings which the IPA firm has identified and the corrective actions it recommends. The
recommendations represent the opinion of the IPA and the OIG and do not necessarily represent
the final position of the U.S. Environmental Protection Agency. EPA managers, in accordance
with established audit resolution procedures, will make final determination on matters in this
report.
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Action Required
In accordance with EPA Manual 2750, you are required to provide your final management
decision to us within 180 days, or by September 24, 2013. To expedite the resolution process,
please also email an electronic version of your management decision to adachi.robert@epa.gov.
Your response will be posted on the OIG's public website, along with our memorandum
commenting on your response. Your response should be provided as an Adobe PDF file that
complies with the accessibility requirements of Section 508 of the Rehabilitation Act of 1973, as
amended. The final response should not contain data that you do not want to be released to the
public; if your response contains such data, you should identify the data for redaction or removal.
We have no objection to the further release of this report to the public. This report will be
available at http://www.epa.gov/oig.
If you or your staff have any questions regarding this report, please contact Melissa Heist,
assistant inspector general for audit, at (202) 566-0899 or heist.melissa@epa.gov; or
Robert Adachi, product line director, at (415) 947-4537 or adachi.robert@epa.gov.
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OLLIE GREEN&COMPANY
Certified Public Accountants
1300 South Fourth Street
Suite 100
Louisville, Kentucky 40208
Telephone; (502) 634-3003
Telefax: (502) 634-3179
Emil: OKreenepa@aol.com
www.ogreencpa.com
SM
CPA Nr*»r UndarnhnalB Vdu#
OIlic Green, MBA, CPA
Susan Savitch, CPA
Andrea Morris, CPA
Sharon Adams, CPA, CIA
Audit of American Recovery and
Reinvestment Act Funded Cooperative
Agreement No. 2S-96099601 Awarded to the Idaho
Department of Environmental Quality
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OLLIE GREEN jgCOM PA N Y
(CPA)S£.
CP* UndarMlimcrta rh« VoK»»
Certified Public Accountants
Ollie Green, MBA, CPA
Susan Savitch, CPA
1300 South Fourth Street
Suite 100
Louisville* Kentucky 40208
Telephone: (502) 634-3003
Andrea Morris, CPA
Sharon Adams, CPA, CIA
Telefax: (502) 634-3179
Emal: ogreencpa@aol.com
October 29,2012
Mr. Robert Adachi, Director of Forensic Audits
U.S. Environmental Protection Agency
Office of Inspector General
San Francisco, CA 94105
Mr. Adachi:
Please find attached a copy of the final audit report of our Recovery Act audit of
Cooperative Agreement No. 2S-9609960 awarded to Idaho Department of
Environmental Quality (IDEQ) on July 2, 2009. Our audit was conducted in
accordance with the terms and conditions of Contract No. EP-G12H-00376
dated April 2, 2012 and 2011 Revised Government Auditing Standards.
We appreciate the opportunity to have worked with the U.S Environmental
Protection Agency, Office of Inspector General. Please contact me with any
questions you may have.
Sincerely
Ollie Green, MBA, CPA
Managing Partner
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Audit of American Recovery and Reinvestment Act
Cooperative Agreement 2S-96099601 Awarded to the
Idaho Department of Environmental Quality
13-R-0206
Table of Contents
Introduction 1
Purpose 1
Background 1
Scope and Methodology 1
Results of the Audit 3
Procurement 3
IDEQ Did Not Require Contractors to Include Certification of Independent
Price Determination Language in Their Bid Proposals 4
IDEQ Contracts Did Not Require a 10 Year Records Retention Period 4
IDEQ Did Not Require Contractors to Have Accident and Catastrophic
Insurance Coverage 5
Force Account Activity 6
Cooperative Agreement Objectives 6
Recommendations 6
Agency and Recipient Comments 7
Ollie Green & Company Response 7
Appendices
A IDEQ's Response to the Draft Report 9
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Introduction
Purpose
The purpose of our audit was to determine whether the Idaho Department of
Environmental Quality (IDEQ) procurements and the use of force account under
Cooperative Agreement (CA) 2S-96099601 complied with Title 40 Code of
Federal Regulations (CFR) Part 35, Subpart O, requirements. The purpose also
included determining whether the objectives of the CA were met.
Background
IDEQ was awarded CA No. 2S-96099601for $15 million by U.S. Environmental
Protection Agency (EPA) on July 2, 2009, to remediate 450-500 lead-
contaminated properties at the Bunker Hill Superfund site. The C A was later
amended (Amendment No. 3) on December 10, 2009, to increase the amount to
$16,800,000. This project was funded at 100 percent by the ARRA with no state
match requirement. The period of performance was from July 2, 2009, through
June 30, 2012. Funding for this CA was part of the $600 million Superfund
hazardous site cleanup funded by ARRA.
Scope and Methodology
Our ARRA performance audit covered the period from July 2, 2009, through June
30, 2012. We conducted our fieldwork at IDEQ in Boise, Idaho from May 14 to
May 18, 2012, and from June 18 to June 20, 2012. The scope of our audit was
limited to determining whether:
• IDEQ's procurements under the CA were conducted in accordance with
Title 40 CFR Part 35, Subpart O;
• IDEQ's force account complied with Title 40 CFR Part 35, Subpart O; and
• The objectives of the CA were met.
Our scope included the review of IDEQ's procurement processes and controls
related to ARRA CA transactions. Our work included reviewing IDEQ's
solicitation, evaluation, tabulation and award processes related to CA 2S-
96099601 procurements. Because IDEQ utilized two contractors already under
contract (awarded in July 2006) to conduct ARRA C A remediation work, we
extended our audit scope to include Year 2006 procurement of the two
contractors. IDEQ provided all Year 2006 procurement information requested
except detailed tabulation support documentation. IDEQ provided a summary
tabulation sheet and indicated that the detailed documentation supporting the
tabulations had been destroyed. Our scope for the extended period was limited
accordingly.
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Our audit methodology included conducting structured interviews and discussions
with officials at IDEQ and OIG to gain an understanding about the internal
controls, processes, systems and procedures used to capture measure and report
IDEQ's procurements and force account activity and how IDEQ met the
objectives of the CA.
We requested, received and reviewed documentation from IDEQ to assess
IDEQ's procurement processes, force account activity and internal controls over
procurements. This documentation included the State's procurement policies and
procedures and a written description of the internal controls that were in place
during the audit period designed to detect and/or prevent potential errors related to
the procurement process. We also requested, received and reviewed property files
and other documentation required to verify that the program objectives were met.
We used a judgmental sampling approach to select 10 properties to verify that all
remediation work was completed in accordance with the requirements of the CA.
A performance audit includes gaining an understanding of internal controls
considered significant to the audit objectives, testing controls, and testing
compliance with significant laws, regulations and other requirements. For this
engagement, we obtained an understanding of IDEQ's procurement processes and
internal controls. The testing of internal controls over this process was not
determined to be significant to our audit objectives.
We conducted this performance audit in accordance with generally accepted
government auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a reasonable basis
for our findings and conclusions based on our audit objectives. We believe that
the evidence obtained provided a reasonable basis for our findings and
conclusions based on our audit objectives.
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Results of the Audit
Procurement
Generally we found that IDEQ complied with Idaho's State procurement policies
and procedures as required by Title 40 CFR 31.36 (a). We also found substantial
compliance with 40 CFR Part 35 Subpart O. However, we found that IDEQ did
not require its contractors to include Certification of Independent Price
Determination (CPID) language in their bid proposals as required by Title 40 CFR
35.6550 (b) (3). Our audit also found that IDEQ did not require its contractors to
have accident and catastrophic loss insurance coverage as required by Title 40
CFR 35.6590 (b). Finally, we found that IDEQ did not require its contractors to
retain its records for 10 years after submitting its final Federal Financial Status
report as required by Title 40 CFR 35.6705. See Table 1 below.
Table 1: IDEQ's Compliance With Title 40 CFR Part 35, Subpart O
CFR Number
CFR Title
Number
of
Findings
40 CFR 31.36 (a)
State Procurement Policies
40 CFR 31.36 (j)
Payments to Consultants
40 CFR 35.6500
Use of Force Account
40 CFR 35.6550 (a)(5)
Selection Procedures
40 CFR 35.6550 (a) (9
Intergovernmental Agreements
40 CFR 35.6550 (b)
Contractor Standards
1
40 CFR 35.6555 (c)
Written Specifications
40 CFR 35.6565 (b)-(d)
Procurement Methods
40 CFR 35.6570
Use of Same Engineer
40 CFR 35.6575
Restrictions on Contract Types
40 CFR 35.6590(b)
Accident/Catastrophic Insurance
1
40 CFR 35.6600
Contractor Claims
40 CFR 35.6705
Records Retention
1
Total
3
As illustrated in Table 1 above, we found three findings related to IDEQ's
compliance with 40 CFR Part 35 Subpart O. Our findings are summarized below.
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IDEQ Did Not Require Contractors to Include Certification of
Independent Price Determination Language in Their Bid Proposals
IDEQ did not require its contractors to include CIPD language in their bid
proposals. Our audit found that IDEQ's two prime contractors utilized to conduct
ARRA remediation work did not have CIPD language in their bid proposals as
required by 40 CFR 35.6550(b) (3). Title 40 CFR 35.6550(b) (3) states that the
recipient must require that each contractor include in its bid or proposal a
certification of independent price determination. This document certifies that no
collusion, as defined by Federal and State antitrust laws, occurred during bid
preparation.
In conducting our work, we found that IDEQ contracted with United Mine
Services, Inc and Ferguson Contracting, Inc. to conduct the ARRA CA
remediation work. We found that these two contractors had held contracts with
IDEQ since June 2006 and July 2006 respectively and their contracts were due to
expire in November 2009 and December 2009 respectively. The initial ARRA CA
remediation work was conducted by these two contractors from July 2, 2009 (CA
award date) through December 31, 2009.
On February 1, 2010, IDEQ solicited bid proposals from qualified contractors to
continue the ARRA remediation work required by CA 2S-96099601. Six bid
proposals were received and the two incumbent contractors were awarded new
contracts to continue the ARRA remediation work. The effective date of their
new contracts was April 19, 2010. Our review of the six bid proposals found that
none included the CIPD language required by 40 CFR 35.6550(b) (3).
Our review of IDEQ's Purchasing Policies and Procedures Manual issued July 1,
2000, and revised on January 18, 2012 found no requirement for IDEQ to comply
with Title 40 CFR 35.6550(b) (3). The IDEQ financial officer indicated that
IDEQ erred in not requiring CIPD language in the bid proposals. He also
indicated that IDEQ has developed approved CIPD language and will add this
language to all future bid proposal requirements.
As a result of this departure from 40 CFR 35.6550(b) (3), IDEQ had no
assurances that bid prices submitted by the contractors were independently
determined.
IDEQ Contracts Did Not Require A 10 Year Records Retention Period
IDEQ did not specify a 10-year records retention period in its contracts as
required by Title 40 CFR 35.6705. Our audit found that IDEQ's contracts
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specified a 3 year records retention period. Title 40 CFR 35.6705 requires
contractors to retain records for 10 years after submitting its final Federal
Financial Status report unless otherwise directed by the EPA award official.
Our work included requesting copies of the two contracts awarded to the
contractors conducting the ARRA lead contamination remediation work required
by CANo. 2S-96099601 at the Bunker Hill Superfund site. Upon conducting our
review of these contracts, we found that both contracts specified only a 3 year
records retention period.
Our review of IDEQ's Purchasing Policies and Procedures Manual issued July 1,
2000, and revised on January 18, 2012 found no requirement for IDEQ to comply
with Title 40 CFR 35.6705. IDEQ indicated that the Department's records
retention period is 33 years. However, due to an oversight, this information was
not conveyed to the contractors. IDEQ indicated that it will establish language in
future contracts stating these retention periods and will require contractors to
retain records for the prescribed periods.
As a result of the 3 year records retention period specified in IDEQ's contracts,
IDEQ's contractors are currently required to retain records related to the CA for
only 3 years.
IDEQ Did Not Require Its Contractors to Have Accident and
Catastrophic Loss Insurance Coverage
Our audit found that IDEQ did not require it contractors to have accident and
catastrophic loss insurance coverage as required by Title 40 CFR 35.6590 (b). To
conduct our work, we requested and received the insurance requirements and
coverage amounts for IDEQ contractors conducting the lead contamination
remediation work at the Bunker Hill Superfund site.
Our review of IDEQ's Purchasing Policies and Procedures Manual issued July 1,
2000, and revised on January 18, 2012 found no requirement for IDEQ to comply
with Title 40 CFR 35.6590 (b). We found that IDEQ required its contractors to
have the following insurance coverage:
• Idaho Worker's Compensation Insurance (minimum $100,000);
• Comprehensive General Liability (minimum $1,000,000 per occurrence);
• Automobile Liability Insurance (no less than $1,000,000).
IDEQ's financial officer indicated that the Department feels that it has met the
requirements of Title 40 CFR 35.6590 (b). He indicated that if the Department
has not met the requirement, it would have been an oversight and
misinterpretation of the regulation. Finally, he indicated that all future contracts
will have that requirement added if determined necessary. Title 40 CFR 35.6590
(b) states that the recipient must require the contractor to provide insurance
13-R-0206
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against accidents and catastrophic loss to manage any risk inherent in completing
the project.
This departure from Title 40 CFR 35.6590 (b) put IDEQ at risk that the contract
work may not be completed by the contractor due to accident or catastrophic loss.
Force Account Activity
Title 40 CFR 35.6500 (a) defines Force Account work as the use of the recipient's
own employees or equipment for construction, construction-related activities
(including architecture and engineering services), or repair or improvement to a
facility. Our audit found that IDEQ had no Force Account activity related to the
CA.
Cooperative Agreement Objectives
The EPA awarded CA No. 2S-96099601 to IDEQ on 2 July 2009. The purpose of
the CA was to provide federal assistance in the amount of $16,800,000 for
remediation of 450-500 lead-contaminated properties at the Bunker Hill
Superfund site. Our audit found that IDEQ completed the remediation of 480 lead
contaminated properties in accordance with requirements of the CA.
Recommendations:
We recommend that the Regional Administrator, Region 10:
1. Require IDEQ to review and gain an understanding of the requirements of
40 CFR 35.6550(b) (3) and ensure that all current and future bid proposals
contain CIPD language.
2. Require IDEQ to ensure that all contracts issued under this CA include the
10 year record retention period as required by Title 40 CFR 35.6705.
3. Require IDEQ to ensure that current and future contractors are covered by
accident and catastrophic loss insurance as required by Title 40 CFR
35.6590 (b).
4. Require IDEQ to update its policies and procedures to ensure that they
address:
a. Bid proposal certification of independent price determination
language as required by 40 CFR 35.6550(b) (3).
b. 10 year record retention period as required by Title 40 CFR
35.6705.
c. Accident and catastrophic loss insurance as required by Title 40
CFR 35.6590 (b).
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Agency and Recipient Comments
Ollie Green & Company issued a draft report on August 23, 2012 and provided copies to IDEQ,
Region 10 and OIG. In response to the draft report, we received written comments from IDEQ
on September 17, 2012. IDEQ agreed with 3 of the 4 findings cited but did not address the
recommendations in its response. Region 10 provided its written response to the draft report on
September 11, 2012 stating that it had no objections to the findings, and agrees that IDEQ needs
to address the recommendations presented in the draft report. We conducted the final exit
conference on September 19, 2012 via teleconference with IDEQ, Region 10 and OIG to obtain
verbal comments to the draft report.
IDEQ agreed with finding 1 {IDEQ Did Not Require Contractors to Include Certification of
Independent Price Determination Language in Their Bid Proposals) in its written response and
specified the language proposed for its Request for Proposals (RFP), Contracts and Contracts
Manual. IDEQ agreed with finding 2 {IDEQ Contracts Did Not Require A 10 Year Records
Retention Period) and said that it had incorporated the required 10 year retention language in its
standard RFQ, Contracts and Contracts Manual. IDEQ also agreed with finding 3 {IDEQ Did
Not Require Its Contractors to Have Accident and Catastrophic Loss Insurance Coverage) and
said that it would require contractors to have the Accident and Catastrophic Insurance Coverage
required by Title 40 CFR 35.6590b. IDEQ said that its insurance carrier was not able to identify
the type of insurance required by Title 40 CFR 35.6590b and requested additional clarification
about the type of insurance required. Region 10 officials indicated that the required coverage
may be contained within the contractor's General Liability Package but would research further
and provide an answer as soon as possible. IDEQ, Region 10 and OIG agreed with the
recommendations made for findings 1, 2, and 3.
IDEQ disagreed with finding number 4 (IDEQ Did Not Sign-Off on Three Pavement Projects
Invoiced by Contractors). IDEQ agreed that the asphalt work was not included on the internal
checklist used during the audit, but said that there were other checks and balances in place to
ensure that the asphalt work had been done and properly inspected before payment was made.
IDEQ also indicated that the checklist used to ensure work had been inspected and signed off on
had been revised to include asphalt work. Based on IDEQ's written and verbal response, OIG
recommended that finding 4 be taken out of the report. Ollie Green and Company concurred
with this recommendation and removed finding 4 from the draft report.
Ollie Green & Company Response
IDEQ's written and verbal responses to findings 1, 3, 4, show that IDEQ has taken the
appropriate actions to address the recommendations. The response provided for finding 1 show
that IDEQ's proposed language for RFPs, Contracts and Contract Manual satisfies the
Independent Price Determination Language requirement. Therefore recommendation 1 is closed.
The response provided for finding 2 shows that IDEQ has revised its RFQs, Contracts and
Contracts Manual to incorporate the 10 year retention requirement. However, this
recommendation remains open as IDEQ did not modify the current contracts to include the
required 10 year retention period. The response provided for finding 3 shows that IDEQ is
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making an effort to identify the Accident and Catastrophic Insurance Coverage required by Title
40 CFR 35.6590b. Region 10 has agreed to research this matter further and to provide guidance
to IDEQ. Therefore, recommendation 3 remains open. IDEQ disagreed with finding 4 and
provided other evidence that indicated that the work had been done properly and that other
checks and balances were in place to ensure that asphalt work had been inspected and signed off
on. Based on this information and OIG's recommendation, finding 4 was taken out of the report.
Therefore recommendation 4 is closed. IDEQ has agreed to update its RFQs, Contracts and
Contracts Manual to include language to ensure that the requirements of recommendations 5a
and 5b were included. However, IDEQ did not address the requirements of recommendation 5c
in its response. Therefore recommendations 5a and 5b are closed and 5c remains open. We
agree with IDEQ's initial corrective actions to address the requirements of recommendations 1,
3, 4,5a and 5b cited in the draft report. IDEQ will need to include its proposed corrective action
plan in its response to the final report.
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Appendix - A - IDEQ Response to Draft Report
September 17, 2012
Ollie Green, MBA CPA, Managing Partner
Ollie Green & Company, CPA's
1300 South Fourth St, STE 100
Louisville, KY 40208
Re: Recovery Act audit of EPA Cooperative Agreement No. 26-96099601
Dear Mr. Green:
The Idaho Department of Environmental Quality (DEQ) accepts the "Draft" audit report sent to us on
August 23, 2012, and offers the following responses to the findings identified within the report.
Finding-IDEQ Did Not Require Contractors to Include Certification of Independent Price
Determination Language in Their Bid Proposals
DEQ agrees with the finding and has incorporated the following language into its standard RFP, Contracts
and Contracts Manual:
The offeror certifies that:
1. The prices in this offer have been arrived at independently, without, for the purpose of restricting
competition, any consultation, communication, or agreement with any other offeror or competitor
relating to:
i. Those prices,
ii. The intention to submit an offer, and
Hi. The methods or factors used to calculate the prices offered.
2. The prices in this offer have not been and will not be knowingly disclosed by the offeror, directly
or indirectly, to any other offeror or competitor before bid opening (in the case of a sealed bid
solicitation) or contract award (in the case of a negotiated solicitation) unless otherwise required
by law; and,
3. No attempt has been made or will be made by the offeror to induce any other concern to submit
or not to submit an offer for the purpose of restricting competition.
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Finding—IDEQ Contracts Did Not Require A 10 Year Records Retention Period
DEQ agrees with the finding and has incorporated the following language into its standard RFP, Contracts
and Contracts Manual:
The CONTRACTOR shall maintain books, records, documents and other evidence directly
pertinent to performance of EPA funded work under this CONTRACT in accordance with
generally accepted accounting principles and practices consistently applied, and in accordance
with 40 CFR 31.36(i)(10) and (11), in effect on the date this CONTRACT is signed by both
parties. Records shall be retained for a period of ten (10) years after final payment is made and
all other pending matters are closed. If any litigation, claim, negotiation, audit or other action
involving the records has been started before the expiration of the ten-year period, the records
must be retained until completion of the actions and resolution of all issues which arise from it,
or until the end of the regular ten-year period, whichever is later.
Finding - IDEQ Did Not Require Its Contractors to Have Accident and Catastrophic Loss Insurance
Coverage
DEQ agrees with the finding and will require Accident and Catastrophic Insurance Coverage, as and when
required by Title 40 CFR 35.6590 (b).
Finding-IDEQ Did Not Sign-Off On Three Pavement (Asphalt) Projects Invoiced by Contractors
DEQ disagrees with the finding. While initially the asphalt work was not included on the DEQ's internal
checklist, the work was reviewed and approved prior to payment. In addition, DEQ does confirm
completion of all asphalt work in the final record drawing that is completed for each property. While Title
40 CFR Part 31.36 (a) (2) requires grantees and sub-grantees to maintain a contract administration system
which ensures that contractors perform in accordance with terms, conditions and specifications of their
contracts or purchase orders, it does not define specifically how that is to be done. DEQ feels that in this
situation, the level of oversight and approval process more than adequately meets the requirement.
Finally, DEQ has revised the property file check list to include a line item for asphalt which is the form of
pavement used at the site.
If you or your staff has any further questions, please contact Dave Sande, CPA, Financial Officer.
Sincerely,
Curt A. Fransen
Director
c: Dave Sande, DEQ-Fiscal Office
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
Page
No.
Subject
Status1
Planned
Completion
Action Official Date
Claimed
Amount
Agreed To
Amount
Require IDEQ to review and gain an understanding
of the requirements of 40 CFR 35.6550(b) (3) and
ensure that all current and future bid proposals
contain CIPD language.
Require IDEQ to ensure that all contracts issued
under this CA include the 10 year record retention
period as required by Title 40 CFR 35.6705.
Require IDEQ to ensure that current and future
contractors are covered by accident and
catastrophic loss insurance as required by Title 40
CFR 35.6590 (b).
Require IDEQ to update its policies and procedures
to ensure that they address:
a. Bid proposal certification of independent price
determination language as required by
40 CFR 35.6550(b) (3).
b. 10 year record retention period as required
by Title 40 CFR 35.6705.
c. Accident and catastrophic loss insurance as
required by Title 40 CFR 35.6590 (b).
Regional Administrator,
Region 10
Regional Administrator,
Region 10
Regional Administrator,
Region 10
Regional Administrator,
Region 10
1 O = recommendation is open with agreed-to corrective actions pending
C = recommendation is closed with all agreed-to actions completed
U = recommendation is unresolved with resolution efforts in progress
13-R-0206
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Distribution
Regional Administrator, Region 10
Agency Follow-Up Official (the CFO)
Agency Follow-Up Coordinator
Director, Grants and Interagency Agreements Management Division
Audit Follow-Up Coordinator, Region 10
Audit Follow-Up Coordinator, Office of Grants and Debarment
Director, Idaho Department of Environmental Quality
13-R-0206
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