Superfund:

EPA's Contract Cost-Estimating Initiatives Show Promise and Should Be Monitored

GAO-01-302: Published: Mar 2, 2001. Publicly Released: Mar 2, 2001.

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The Environmental Protection Agency (EPA), which manages the cleanup of the nation's most hazardous abandoned sites through the Superfund program, relies heavily on contractors to conduct its cleanup activities. Currently, EPA spends about 50 percent of its approximately $1.5 billion annual Superfund budget on contractors. With so much at stake, it is critical that the government get the best contract price for this cleanup work. EPA's and GAO's reviews have shown that the agency has made significant progress during the past decade in addressing the weakness of its cost-estimating processes. EPA regional work assignment managers are currently developing independent estimates, which contracting officers are using to negotiate the prices for cleanup work. The agency's current initiatives should help the agency successfully address the Army Corps of Engineers' and GAO's remaining concerns by providing the managers with the training and tools they need to develop better estimates. By incorporating some relatively simple additional steps to more fully implement and better scrutinize the effectiveness of the initiatives, the agency can better ensure that its efforts improve cost estimates agencywide.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: In order to more fully implement and better evaluate the improvements currently being made to EPA's cost-estimating processes, the Administrator, EPA, should direct the Assistant Administrator, Office of Solid Waste and Emergency Response, to complete plans on how to most effectively deliver improved, timely, and effective training work assignment managers nationwide.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: EPA conducted training, which incorporated the agency's new cost-estimating guidance and database, for work assignment managers during the annual National Association of Remedial Project Managers conferences in 1999, 2000, and 2001. In addition, the agency provided cost-estimating training to project officers (PO) and contract officers (CO) at the annual PO/CO conference in 2002. The agency plans to continue to offer training on cost-estimating at both conferences in upcoming years. Not all work assignment managers attend these conferences, however, the agency's intent is that those who attend will, in effect, become trainers who take the information back to their regions and train those who did not attend. Additional formal training sessions are not practical, according to the cognizant EPA program manager, because of resource and staff constraints.

    Recommendation: In order to more fully implement and better evaluate the improvements currently being made to EPA's cost-estimating processes, the Administrator, EPA, should direct the Assistant Administrator, Office of Solid Waste and Emergency Response, to complete plans on how to work with the Corps to keep the data on actual costs of the contracted work in its Web-based tool updated and current.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: EPA continued to work with the U.S. Army Corps of Engineers to maintain and update the cost-estimating database. In September 2002, EPA reported that the database was incorporated into the Web-based cost-estimating tool, which had become fully operational and available to work assignment managers via EPA's intranet. The Web-based tool was being developed at the time of GAO's review. The tool solicits input on actual costs from the work assignment managers who use it, and EPA plans to use that input, as well as continuing to rely on the Corps' expertise, to keep the cost database current. The agency informed work assignment managers about the tool's availability via the intranet and provided training on its use during the annual project officer/contracting officer conference in 2002. According to the cognizant EPA project manager, work assignment managers are beginning to use the tool, and he has received positive feedback on the experience. EPA plans to monitor the tool's use and revise and update it as necessary.

    Recommendation: In order to more fully implement and better evaluate the improvements currently being made to EPA's cost-estimating processes, the Administrator, EPA, should direct the Assistant Administrator, Office of Solid Waste and Emergency Response, to complete plans on how to consolidate and routinely analyze regional data (which compare estimates, awarded prices, and final prices paid to contractors) and the feedback from work assignment managers on the Web-based tool to determine whether systemic estimating problems exist that EPA needs to address or whether best-estimating practices are available that it could adopt.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: At EPA Headquarters direction, in 2001, all regions submitted data on estimates and actual costs for completed work assignments. HQ staff analyzed the data, and, in May 2002, outlined the process that regions are to follow in annually submitting data on estimates and costs. Specifically, according to the cognizant HQ program manager, after consultation with the regions, HQ agreed that the regions would submit estimated and actual cost data, as well as data on level-of-effort hours to indicate the type of work involved. In addition, data are required only for those work assignments greater than or equal to $100,000, and only for those completed; although those data would be older and not as up-to-date as data for ongoing work assignments, they believe that those data are the most accurate because they are derived from assignments in which all of the actual costs have been assessed. As part of this, headquarters gave the regions a template detailing the types of information they are to provide. Furthermore, headqurters solicited feedback on the Web-based cost-estimating tool during the project officer/contracting officer conference in 2002, and the tool itself asks for feedback from its users in the regions. According to the cognization program official, headquarters plans to analyze the information provided via both avenues to identify any systemic cost estimating problems or best practices.

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