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U.S. Environmental Protection Agency
Office of Inspector General

At a Glance

16-P-0078
December 14, 2015

Why We Did This Audit

The purpose of this audit was
to determine whether: (1) the
U.S. Environmental Protection
Agency (EPA) is adequately
monitoring its Personnel
Security Branch (PSB) support
contracts to ensure compliance
with terms and conditions; and
(2) the EPA PSB is complying
with agency policies and
procedures for interagency
acquisitions.

Each year the EPA spends
millions of dollars on
background investigations.
An Office of Personnel
Management (OPM) contractor
conducts the background
investigations, and the PSB
uses two support contracts to
assist with the processing.
Contract EP09W001968 had a
maximum potential value of
approximately $13.4 million,
and contract EPG11H00279
(still ongoing) has a maximum
potential value of approximately
$13.5 million.

This report addresses the
following EPA goal or
cross-agency strategy:

• Embracing EPA as a high-
performing organization.

Send all inquiries to our public
affairs office at (202) 566-2391
or visit www.epa.gov/oiq.

Listing of OIG reports.

EPA's Background Investigation Support Contracts and
OPM Billings Need Better Oversight and Internal Controls

What We Found

The EPA did not monitor PSB support contracts for compliance with the terms
and conditions of the contracts. Specifically, we found that:

The Contracting Officer's
Representative (COR) certification
expired.

Technical Direction Letters are not
being issued as required.

The Contracting Officers are not
performing invoice reviews.

There is no evidence of progress
reports received prior to January
2013 as required, and progress
reports submitted do not comply
with contract terms.

The COR did not maintain proper contract documentation.

Contractor incentive fees were paid without adequate evidence that the
contractor met Quality Assurance Surveillance Plan standards.

Quality Assurance Surveillance Plan standards were inadequate in the
original contract, but improved in the follow-on contract.

By not maintaining contract
documentation, the EPA does not
have reasonable assurance that
work is progressing according to
the contract, or that OPM billings
are correct. The agency overpaid
approximately $6,000 over the last
21/2 years, and awarded over
$545,000 in incentive fees without
adequate support.

The EPA does not have an interagency agreement in place with OPM for
background investigation services. Therefore, the EPA cannot ensure proper
management and oversight of OPM background investigation services and
related billings. In addition, the EPA does not reconcile or review OPM billings for
correctness and reasonableness.

Recommendations and Planned Agency Corrective Actions

We recommend that the Assistant Administrator for Administration and
Resources Management improve contract management, oversight and internal
controls for PSB support contracts. In addition, we recommend that the EPA
develop and enter into an interagency agreement with OPM for background
investigation services, start to reconcile and review OPM billings for correctness
and reasonableness, and reprogram the PSB's background investigation
ordering system to prevent overbillings.

The EPA agreed with all 14 recommendations and provided expected completion
dates for all corrective actions. All of the agency's proposed corrective actions
and planned completion dates meet the intent of the 14 recommendations.
No final response from the agency is required because all recommendations are
resolved.


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