f	U.S. Environmental Protection Agency	2005-P-00001

S»*	r.	rtffirc nf Incnartnr ^anaral	December 6, 2004

I	o Office of Inspector General

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At a Glance

Catalyst for Improving the Environment

Why We Did This Audit

We conducted this audit to
determine how effectively and
efficiently EPA is administering
Response Action Contracts
(RACs). We looked at the
following areas:

•	Acquisition Planning: How are

RACs structured and funded?

•	Source Selection: How does
EPA decide with whom to
contract? Is past performance
considered?

•	Contract Administration: Are
there good measures for assessing
contractor performance?

•	Contract Information Systems:
Do contract managers have the
information needed to evaluate
results and make decisions?

Background

RACs are used to obtain
professional Architect-Engineer,
technical, and management services
in support of EPA" s Superfund
cleanup responsibilities. Current
RACs, which expire between 2005
through 2009, have a maximum
potential value of more than
$4 billion.

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.qov/oiq/reports/2005/20041
206-2005-P-00001.pdf

Response Action Contracts: Structure and Administration Need Improvement

What We Found

EPA can improve the structure of RACs to better protect the Government's
interests. Current RACs, which are Cost Plus Award Fee Level of Effort
contracts, assign to EPA a disproportionate share of the risk of cost overruns;
expose EPA to the risk of loss of funds through litigation; limit competition; and
forego potential cost savings associated with other approaches to contracting, such
as Performance-Based Service Acquisition.

EPA regions do not consistently document the rationale used to decide what
procurement option to utilize for Superfund cleanup activities as required by
established policy. Further, EPA does not have a process to measure and
disseminate information on the U.S. Army Corps of Engineers" past performance
in support of EPA.

The Agency has measures in place to assess contractor performance at the work
assignment level. However, evaluations at the contract level were not being
documented timely and consistently, as required, because they were not given the
necessary priority. Not consistently documenting evaluations in a timely manner
does not permit EPA and other Federal agencies to consider contractors" past
performance and could be detrimental to contractors who have performed well.

Contract managers have, or can obtain, the information needed to evaluate results
and make decisions, but the information in the national automated database is not
always readily available. The Remedial Action Contract Management
Information System is underutilized by regional staff, and the system does not
collect national data as originally intended. As a result, EPA is expending
approximately $1.5 million a year on a system that is not being fully utilized.

What We Recommend

We recommend that the Office of Solid Waste and Emergency Response, in
coordination with the Office of Administration and Resources Management,
develop and implement a plan with milestones that will increase the use of
different contract types, require regional staff to document the rationale for all
source selection decisions, develop a method for holding Contracting Officers
accountable for conducting past performance evaluations timely and accurately,
and conduct a cost benefit analysis to determine whether the Remedial Action
Contract Management Information System should be retained.

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