http://www.foxnews.com/politics/2014/07/23/15-million-at-center-internal-epa-battle-over-superfund-contractors-alleged/?intcmp=latestnews
(Note that CH2M Hill is performing the EIR/EIS for the 710 North Study.)
By George Russell, July 23, 2014
Fifteen months after a
report charged the Environmental Protection Agency with failing
adequately to oversee Superfund cleanup efforts at some of the country’s
most toxic waste dumps, the EPA’s internal watchdog and EPA management
are battling over $1.5 million that the inspectors said in the probe was
illegally overbilled between 2008 and 2012 by the clean-up contractor.
The EPA’s Inspector General Office wants EPA to get the money back.
EPA management is balking, despite at least two “dispute resolution”
meetings between the two sides in March and May.
Meantime, the contractor, a Colorado-based engineering and consulting
behemoth named CH2M Hill, continues to operate under the disputed
contract, which has a total potential value of more than $116 million
before its final expiry in June 2016.
CH2M Hill’s total ongoing business with EPA amounts to ten times that
amount: more than $1.16 billion through July 2014, according to EPA
records.
CLICK HERE FOR EPA CONTRACT RECORDS
Making the tug-of-war more piquant is the fact that CH2M Hill in
March last year—only a month before publication of the disputed report--
paid $18.5 million to the Department of Justice to settle an
overbilling fraud that allegedly between 1999 and 2008 at another
hyper-toxic cleanup site, the Department of Energy’s Hanford nuclear
site, home of the world’s first plutonium production reactor.
Under the agreement, CH2M Hill also had to consent to a corporate
monitor for three years at the Hanford site, pay $500,000 for
unspecified “accountability measures” to prevent further billing fraud,
and cooperate in continuing fraud investigations.
The two cases are otherwise unrelated. In the current EPA internal
dispute, the major sticking-point issue is not whether CH2M Hill engaged
in fraud—no such claims have been made-- but whether EPA itself
ignored federal contracting rules in favor of its own internal
regulations in allowing the alleged double-billing circumstances to
arise.
A number of questions sent by Fox News to CH2M Hill earlier this week
regarding contract EPS90804 had not been answered before this story was
published.
But there is also a broader issue involved: how EPA, an agency that has recently threatened to
impose crippling fines on a rancher for building a small cattle pond
on his property, actually carries out its job, including its financial
responsibilities, at some of the biggest and most expensive pollution
sites in the country, and how much it takes the word of contracting
firms like CH2M Hill for their efforts in the process.
In other words, “how do you know you are doing what you are supposed
to be doing?” said one EPA official familiar with the case. “It’s a
major issue.”
Just how major—not only in terms of money but of the potential
exposure of humans and wildlife to dangerous chemicals and their
byproducts as a result-- is underlined in carefully cloaked bureaucratic
prose in the Inspector General’s report of the disputed contract.
It said there “may be an EPA-wide problem” in how the agency handles
contracts like the one known as EPS90804, a three-year, renewable
document that was originally signed in 2008 by the chief administrator
of EPA’s region 9, a huge swath of territory that includes California,
Arizona, Nevada, Hawaii, as well as various Pacific island territories
and autonomous tribal areas in the south-west.
CLICK HERE FOR THE REPORT
In the case of EPS90804, the aim was to clean up a variety of
Superfund sites in the South-West and the Pacific through a cascade of
separate “task orders” under the umbrella agreement, known in EPA
parlance as a “remedial action contract,” or RAC. The contract was
expected to expand over time to allow different sites to be added.
In 2008 the administrator was Wayne Nastri, a Bush Administration
appointee. He was replaced in November 2009 by an Obama Administration
selection: Jared Blumenfeld, previously director of San Francisco’s
Department of the Environment under Demoractic then-Mayor Willie Brown,
once the longest-serving speaker of the California State Assembly.
Blumenfled is an attorney who, according to his official biography, “has
worked for the Natural Resources Defense Council (NRDC), the Sierra
Club Legal Defense Fund, and the International Fund for Animal Welfare.”
According to the EPA website, region 9 staff currently comprise “a
talented and diverse team of more than 800 scientists, engineers,
inspectors, environmental specialists, analysts, lawyers and
administrative staff working to protect human health and the environment
across eight time zones.”
At the time of the Inspector General’s report, EPA had issued 64 task
orders worth $97.8 million under the contract. The Inspector General’s
staff looked at only 18 percent of them —but they covered nearly
two-thirds of the total spending.
The results of that year-long examination in 2013 were sobering.
Among the mostly California venues that the Inspector General’s staff
examined were nearly $40 million worth of work at the Iron Mountain Mine
near Redding, a noxious gold and silver mining locale since the Civil
War and a designated Superfund site since 1983; the Frontier Fertilizer
site near Davis, CA, where many pesticides were dumped; and a site
formerly known as the B.F. Goodrich site near Rialto, where rocket-fuel
propellants, among other things, were tested.
All of those highly dangerous sites are close to important
groundwater and drinking water sources for local residents and beyond.
When it came to supervising the “remediation” work under EPS90804,
however, the report charged, among other things, that EPA employees who
were supposed to monitor the contract:
--ignored federal rules that they verify that personnel for the
contractor have the qualifications necessary to execute the contract,
thus increasing the “risk of the contractor substituting
lesser-qualified staff while EPA pays the rate for fully qualified
individuals;”
--in some cases relied on the contractor’s work plans rather than the
official scope of work of the various projects to determine what was
supposed to be done;
-- ended up not being billed for 46 of 229 individuals originally
identified as “key staff” in work plans, but got bills for 846
people—82 percent of the total—who were not identified in the plans;
--often didn’t take notes or otherwise keep track of changes in
“deliverables” in meeting with the contractor, thus relying on the
contractor’s records;
--also failed frequently to document the quality of any of the
“deliverables” received, and in two cases offered no documentation at
all;
--in some cases, weren’t familiar with the overall contract, or hadn’t read it.
EPS90804 is what the federal government calls a “time and materials”
contract, also known as a “fixed rate indefinite delivery/indefinite
quantity award term contract,” meaning that contractors bill for hours
worked—with no specified ceiling-- at specified rates along with the
cost of materials (which can include subcontracts, according to rules
cited by the Inspector General).
(On the EPA’s website, it is now listed more vaguely as an “indefinite quantity” arrangement.)
According to one knowledgeable official, such time and materials
contracts are “pervasive” at EPA—where the full extent of required
pollution clean-ups may not be known for years, as various layers of
contamination are uncovered. The contracts are also highly expensive,
open-ended, and provide “no incentive to the contractor for cost control
or labor efficiency,” according to the Inspector General’s original
report.
They are a device that President Barack Obama himself has been trying
to discourage since 2009, when he issued a memo ordering agencies to
minimize the risk and maximize the value of government contracts. They
were further restricted by Congress the same year. EPA itself has been
trying to discourage time and materials contracts as a cost-saving
measure.
But EPA still wasn’t trying all that hard, according to yet another
Inspector General’s report, issued just a month before the examination
of EPS90804. Despite the headquarters order to cut back on high-cost
contracts, “flexibility” allowed EPA’s ten regions to use them virtually
at their discretion. “The regions’ resistance to change is well
documented through the years,” the Inspector General sardonically noted
in March, 2013.
CLICK HERE FOR THE REPORT
The resistance is apparently still operative.
While agreeing with many changes suggested in the report on EPS90804
for ensuring that employees take notes and use verification procedures,
both region 9 administrator Blumenfeld and senior EPA managers declared
that they didn’t think that verification of the credentials of a
contractor’s employees, as one example, was necessary or required.
One top manager went further. If EPA has a policy direct that the
agency review credentials of all those working on tasks, the report
relates that he said, “the requirement needs to be changed.”
And on the issue of alleged overbilling—involving a federal rule that
forbids giving contractors a “profit” on materials included in the
contract, which the Inspector General’s office declared that EPS90804
specifically and inexplicably violated--the administrators were equally
adamant in refusing to ask for the money back.
How that issue, at least, is decided will ultimately depend on one of
EPA’s topmost management—whoever that may turn out to be. Under dispute
resolution procedures, after a “final” fruitless meeting held on May
29, the issue went to EPA’s Deputy Administrator, Robert Perciasepe, for
a final decision.
Perciasepe was supposed to make the decision by July 15. This week,
however, he ha announced that he will step down from his job next month.
According to an official in the Inspector General’s office, EPA has
now asked for a delay in the final decision on EPS90804’s costly
overbilling issue until August 15.
