The Environmental Protection Agency Should Better Manage Its Use of Contractors

RCED-85-12: Published: Jan 4, 1985. Publicly Released: Jan 22, 1985.

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Pursuant to a congressional request, GAO discussed the Environmental Protection Agency's (EPA) use of contractors to support its programs.

GAO found that EPA has not: (1) monitored contractor activities to ensure that performance remains cost-effective; or (2) performed reviews to ensure that contractor employees are not establishing policy or performing other types of work traditionally reserved for federal employees. About 88 percent of EPA contracts are cost-reimbursable, which provides EPA maximum flexibility in accomplishing program objectives, but offers limited incentive for the contractor to control costs. GAO believes that EPA is missing opportunities to control costs through the increased use of fixed-price contracts. GAO also noted that EPA, contrary to its regulations, has directed contractors to perform work outside of the scope of their contracts and to award sole-source subcontracts to firms selected by EPA.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: EPA has initiated a contracts management improvement program which will in effect address many of the concerns raised in this report.

    Recommendation: The Administrator, EPA, should, to increase the agency's efficiency in using contractors and federal employees to comply with Office of Management and Budget (OMB) Circular A-76, establish procedures for monitoring contracts for cost-effectiveness. If contracts are determined not to be cost-effective, EPA should follow OMB Circular A-76 guidelines and look for more efficient contracting opportunities and/or prepare a cost analysis to determine if it would be more appropriate to do the work in-house with government employees.

    Agency Affected: Environmental Protection Agency

  2. Status: Closed - Not Implemented

    Comments: EPA has initiated a contracts management improvement program which will in effect address many of the concerns raised in the report.

    Recommendation: The Administrator, EPA, should take the necessary actions to increase the priority given to procurement operations. Among other things, this would include issuing directives which reinforce: (1) EPA and federal procurement regulations which require adequate procurement planning; (2) the need and rationale for soliciting competition and using opportunities for fixed-price contracts wherever possible; (3) the inappropriateness of directing contractors to perform work outside of their contracts' scope of work; and (4) the need to immediately stop any further directed sole-source subcontracts.

    Agency Affected: Environmental Protection Agency

  3. Status: Closed - Not Implemented

    Comments: EPA has initiated a contracts management improvement program which will in effect address many of the concerns raised in the report.

    Recommendation: The Administrator, EPA, should, to improve controls over the agency's contract management, require the Procurement and Contract Management Division to carry out its contract management responsibilities by having the contract officers become more involved with monitoring work assignments, as required by EPA and federal regulations. The Administrator should require contract officers not to approve individual work assignments unless the assignments are accompanied by: (1) a detailed statement of work showing specifics to be included in the final work product; and (2) a detailed cost estimate. If necessary, a compliance program should be established to ensure that contract officers meet this requirement. If resources are not available to carry out these responsibilities, the Administrator should determine the additional staff needs and provide this information to the appropriate congressional committees for their consideration.

    Agency Affected: Environmental Protection Agency

 

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