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s 	U.S. Environmental Protection Agency	2007-P-00011
March 27, 2007
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At a Glance
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Why We Did This Review
The U.S. Government
Accountability Office has
designated management of
interagency contracting a
Government-wide high-risk
area since 2005. We sought to
determine whether the U.S.
Environmental Protection
Agency (EPA) effectively
follows interagency
contracting requirements by
ensuring products and services
meet quality, cost, and
timeliness requirements.
We also looked into whether
opportunities exist to improve
EPA's processes for managing
interagency contracts.
Background
EPA defines an interagency
agreement as a written
agreement between Federal
agencies under which goods or
services are provided.
Interagency contracts are
contracts awarded by one
Federal agency but available
to others for use, generally for
a fee.
For further information,
contact our Office of
Congressional and Public
Liaison at (202) 566-2391.
To view the full report,
click on the following link:
www.epa.aov/oia/reports/2007/
20070327-2007-P-00011 .pdf
Catalyst for Improving the Environment
Interagency Agreements to Use Other
Agencies' Contracts Need Additional Oversight
What We Found
While EPA has improved some interagency contracting processes, we found that
the Agency entered into some interagency contracts without meeting all
requirements. EPA often entered into interagency contracts without conducting
cost reasonableness assessments, or identifying alternatives, such as determining
whether EPA's in-house acquisition staff should acquire the services or products
for them. As a result, we found interagency contracts where EPA could have
saved money if it had awarded the contracts directly through its in-house
contracting staff. This occurred because (1) project officers preferred the speed
and convenience of interagency contracts, received inadequate training, and lacked
sufficient guidance; and (2) EPA provided limited oversight.
We found other opportunities for EPA to improve its processes for managing
interagency contracts. EPA needs to ensure that newly assigned project officers to
existing interagency contracts receive a complete file for effective contract
management. Also, EPA did not collect data on the fees paid to other agencies for
interagency contracts, so costs and benefits could not be determined.
In addition, we noted positive aspects of the interagency contracting process.
These involved ordering work within the scope of the existing agreement; project
officers being satisfied with the quality and timeliness of services; and, in most
cases, contractor invoices having sufficient information for approval.
What We Recommend
We recommend that the Assistant Administrator for the Office of Administration
and Resources Management:
•	Provide guidance to project officers on conducting cost reasonableness
assessments and identifying alternatives before using IAG contracts.
•	Strengthen training to include how to develop independent government
cost estimates or other appropriate cost information, conduct cost
reasonableness assessments, and identify alternatives.
•	Ensure that the Grants Administration Division requires that the IAG
decision memorandum better explains why an IAG is more cost effective,
and include an evaluation of cost reasonableness assessments in reviews.
EPA generally agreed with our recommendations, but deferred action pending the
issuance of Government-wide guidance by the Office of Federal Procurement
Policy. EPA has been informed that a guidance document will be issued in the
next several months on roles and responsibilities on interagency contracting.

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