[Federal Register Volume 59, Number 75 (Tuesday, April 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8871]
[[Page Unknown]]
[Federal Register: April 19, 1994]
_______________________________________________________________________
Part II
Environmental Protection Agency
_______________________________________________________________________
48 CFR Part 1501, et al.
Acquisition Regulation Concerning Conflicts of Interest; Final Rule
ENVIRONMENTAL PROTECTION AGENCY
48 CFR Parts 1501, 1509, 1510, 1512, 1527 and 1552
[FRL-4862-5]
Acquisition Regulation Concerning Conflicts of Interest
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: This final rule amends the EPA Acquisition Regulation (EPAAR)
coverage on organizational conflicts of interest for all EPA contracts.
In addition, it adds EPAAR coverage on conflicts of interest related to
contractor personnel working under EPA Superfund contracts and
conflicts of interest related to contractors' future work which may
jeopardize Superfund work. Under this rule, contracts funded through
EPA's Superfund program will contain clauses: requiring contractor
employees working on EPA Superfund contracts to sign confidentiality
agreements; requiring a contractor to notify the Agency immediately of
any conflicts of interest regarding contractor personnel working on the
EPA contract; and restricting a contractor's future contracts, outside
of those with EPA, when such contracts may conflict with the work
performed for EPA. These changes are necessary to avoid actual or
potential conflicts of interest in work performed under EPA Superfund
contracts.
EFFECTIVE DATE: This rule is effective May 19, 1994.
FOR FURTHER INFORMATION CONTACT: Environmental Protection Agency,
Office of Acquisition Management (3802F), 401 M Street SW., Washington,
DC 20460, attn: Calvin C. McWhirter (202) 260-9165.
SUPPLEMENTARY INFORMATION:
A. Background
Federal Acquisition Regulation (FAR) section 9.501 defines an
organizational conflict of interest as existing when ``because of other
activities or relationships with other persons, a person is unable or
potentially unable to render impartial assistance or advice to the
Government, or the person's objectivity in performing the contract work
is or might be otherwise impaired, or a person has an unfair
competitive advantage.'' Under EPA's Superfund program, contractors are
often asked to assist the Agency in designing remedial actions to clean
up hazardous waste sites, in identifying potentially responsible
parties (PRPs) at hazardous waste sites and in implementing actions to
effect the cleanup. After identification of PRPs for specific sites,
the Agency will attempt to secure private party conducted response
action or to expend Superfund Trust Funds to conduct response action
and to recover costs expended for cleanup either through consent
agreements or litigation.
Under the Superfund program it is essential that contractors not
enter into outside contracts or use personnel which might result in an
actual or potential conflict of interest. In addition, since litigation
may continue for several years after a contractor has completed work
and the contractor may be asked to testify on the work performed for
EPA, it is essential that actual or potential conflicts of interest be
avoided even after the contract work has been completed.
In addition to organizational conflicts of interest, EPA must
ensure that contractor personnel assigned to work on EPA contracts are
free from personal conflicts of interest that might impair their
ability to perform the required work in an impartial manner. EPAAR
clauses have been developed which will require EPA's Superfund
contractors to ensure that actual or potential personal conflicts of
interest regarding contractor personnel are identified and reported to
the EPA Contracting Officer.
These clauses shall be incorporated into new solicitations and new
contracts. Clauses for contracts existing as of the effective date of
this rule shall be negotiated by the EPA Contracting Officer, on a
case-by-case basis, and shall be substantially similar to the clauses
required by this rule.
The Agency has developed a Long Term Contracting Strategy to more
effectively manage the Superfund program over the next ten years. The
clauses in this rule reflect the changing nature of the Superfund
program. Although we intend to implement the Strategy with minimal
program disruption, there may be some changes to the form of some
existing Superfund contracts. Therefore, we anticipate the clauses in
this rule may require updating to reflect ongoing changes to the
Superfund program.
This rule was published as a proposed rule in the Federal Register
on April 26, 1990, at 55 FR 17724. Twenty-two public comments were
received. We express our appreciation to all the interested
organizations for the time they took in studying the proposed rule and
preparing comments. As a result of these comments, we have made a
number of revisions to the rule. In seriously considering all of the
comments, we implemented recommendations that would improve the quality
of the rule and minimize the burden to the contractor community, yet
ensure that EPA's programs are adequately protected. Part B of the
preamble summarizes the general issues raised and provides EPA's
response and Part C of the preamble addresses section-specific
comments.
In addition, the numbering in EPAAR subpart 1509.5 is being amended
to conform with numbering changes to FAR subpart 9.5. These changes are
made solely to conform to the FAR numbering scheme and do not otherwise
affect the existing EPAAR.
B. General Comments
1. Response to EPA Conflict of Interest Rule
Many commenters expressed support for an EPA rule on conflict of
interest although some recommended that EPA withdraw the proposed rule.
We welcome public support and are committed to implementing a conflict
of interest rule that protects the integrity of the Superfund and other
EPA programs.
2. Previously Issued Conflict of Interest Guidance
Many commenters expressed concern that the January 1990, memorandum
from the Director of the EPA's Procurement and Contracts Management
Division, which conveyed general guidance on conflict of interest to
Superfund contract staff and Superfund contractors, was not published
with the proposed rule and formally open for public comments. Some also
expressed concern with issues it raised and requested that it be
rescinded. Others mentioned that they were pleased that the proposed
rule was a considerable improvement over the January 1990, guidance. It
was EPA's intent that the proposed rule supersede the January 1990,
guidance. We would like to make it clear that this final rule and its
preamble discussion supersedes the January 1990, guidance and the
proposed rule.
3. Justification for Special Conflict of Interest Provisions
Some commenters questioned EPA's authority to implement a conflict
of interest rule and questioned the need for an EPA rule on conflicts
of interest stating that adequate safeguards exist. Others contended
that there is no balance between the benefits to be achieved compared
to the cost of compliance.
We disagree. FAR subpart 1.3 provides agencies with the authority
to implement supplemental acquisition regulations to satisfy specific
needs of the agency. We have developed the conflict of interest rule to
address the specific requirements of EPA's Superfund and other programs
since sufficient coverage is not provided by existing regulations.
In the past few years, the General Accounting Office (GAO) in
conducting reviews of EPA's programs, the EPA in performing management
studies of the Superfund program, and Congressional Committees have all
concluded that EPA's existing conflict of interest procedures are
inadequate to protect its programs. The GAO in its report ``Superfund
Contracts: EPA's Procedures for Preventing Conflicts of Interest Need
Strengthening'' (GAO/RCED-899-57), dated February 1989, and EPA, in the
Administrator's Management Review of the Superfund Program (1989),
pointed out the special vulnerability of the Superfund program and
strongly recommended that action be taken to strengthen EPA's existing
procedures.
EPA is responsible for leading the nation's efforts to protect and
clean up the environment. This includes the development of
environmental standards, control of toxic substances and the cleanup of
hazardous wastes, as well as enforcement of applicable laws and
regulations. Historically, the Agency has relied heavily upon
contractors to accomplish its mission, and much of this work is highly
sensitive, particularly in the Superfund program. The Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (CERCLA
or Superfund) 42 U.S.C. 9601-9675, consists of Public Law 96-510 (Dec.
11, 1980) and the amendments made by subsequent enactments. It provides
for liability, compensation, cleanup and emergency response for
hazardous substances released into the environment and the cleanup of
hazardous waste disposal sites. Because EPA has the dual responsibility
of cleanup and enforcement and because its contractors are often
involved in both activities, and may conduct work for EPA and the
private sector, it is imperative that EPA contractors are free of
conflicts so as not to jeopardize CERCLA response and enforcement/cost
recovery actions (hereinafter referred to as enforcement).
This rule focuses primarily on performance after contract award,
unlike FAR which focuses on conflict of interest issues related to
contractor eligibility for award. Under Superfund contracts, work is
performed at multiple sites and new and constantly changing cleanup
priorities make it impossible for EPA to identify, prior to contract
award, all site locations where work will be performed. In addition, it
is impossible for EPA to predict, prior to contract award, enforcement
actions against PRPs at specific sites. Moreover, such cases may take
years to resolve. Therefore, EPA must address conflicts of interest
during and after contract performance to effectively monitor conflicts
and safeguard Superfund enforcement.
U.S. Department of Justice and EPA attorneys, enforcing CERCLA,
stress the importance of avoiding conflicts of interest in the
Superfund program. Conflicts of interest discovered after work has
begun can create costly delays in cleanup of sites when EPA must
mitigate damage resulting from conflicts to safeguard cleanup work and
enforcement from further prejudice. Therefore, it is imperative that
EPA contractors do not perform work for PRPs that conflicts with work
performed for the Agency. Conflicts arise because of differing
interests of the EPA and PRPs. EPA's primary concern is to assure that
adequate environmental protection is provided, as opposed to the
primary interests of PRPs, who are usually motivated to keep costs
minimized. Because these conflicts often arise in the context of
adversarial enforcement proceedings, such conflicts and leaks of
sensitive enforcement information not only jeopardize cases at the
litigation stage, but also weaken the Government's position both in
obtaining PRP commitment to clean up sites and in cost recovery
negotiations with PRPs. To date, EPA has the potential to seek over
$4.5 billion in cost recovery; the stakes are high.
EPA must preserve the integrity of the Superfund Program from
conflicts of interest and cannot afford to jeopardize the success of
cost recovery actions and impede PRP cleanup of hazardous waste sites.
A contractor's conflict of interest can harm our Superfund litigation
(either cost recovery litigation under section 107 of CERCLA, or
litigation for injunctive relief under section 106) in several ways:
(1) By creating a conduit for confidential government information,
including potential litigation and negotiation strategies, which may be
leaked to the parties with opposing interests in the litigation, (2) by
subjecting the credibility of EPA witnesses and/or the work they
perform on behalf of EPA to attack, and (3) by causing the work
performed by that contractor to be redone, raising potential issues in
cost recovery litigation as to whether the cost of the extra work is
recoverable. This rule requires EPA contractors to disclose all
conflicts of interest so that EPA will have the opportunity to consider
the significance of the conflict and to take appropriate measures to
avoid, mitigate, or neutralize the conflict of interest.
EPA has indeed faced several actual conflict situations which
demonstrate the need for the Agency to strengthen its conflict of
interest procedures in order to protect the public interest: One such
conflict involved a contractor which had performed a removal action for
EPA on a hazardous waste-contaminated site and which was currently
doing research work for EPA pertaining to that site. Another office of
the contractor's company agreed to serve as an expert witness in the
EPA cost recovery litigation on behalf of one of the PRPs and, thus,
against EPA, without knowledge or approval of the Agency. The
contractor's work in performing the removal action and research for EPA
in anticipation of cost recovery litigation conflicted directly with
the contractor's serving as an expert witness on behalf of one of the
PRPs. Further, the contractor proceeded to convey confidential
information to the PRP in the context of trying to explain to the PRP
why there was no conflict. Although settlement negotiations proceeded
in this case, the strength of the Agency's position was significantly
weakened because the contractor was working for both parties and
confidential sensitive information had been divulged to the PRP.
Many of the issues in Superfund litigation ultimately are matters
of expert technical opinion for which EPA relies on contractor
personnel, e.g., support of remedy selection and findings that sites
present ``imminent and substantial endangerment'' to the public. In
that role, contractors may be privy to the government's litigation and
negotiation strategies and other privileged and confidential
information. The above case has taught us that contractor ``side
switching'' carries a strong potential for the passing of confidential
information to defendants, even if unintentionally.
In another actual case, a contractor was performing remedial
investigation/feasibility study work for both the EPA and a major PRP
on a contiguous site. Well over a quarter of a million dollars had been
expended by EPA prior to the discovery of the conflict. Work
subsequently had to be stopped and all work which had been completed by
the contractor had to be either redone and/or verified for accuracy and
completeness by another independent contractor. In addition to the
fiscal drain on the Superfund Program that this causes, we are also
likely to be faced in cost recovery litigation with a defense argument
that such ``double expense'' is unnecessary and unrecoverable. This may
also increase the time and expense that the litigation and negotiation
require, not including the potential millions of dollars at risk during
the cost recovery/enforcement action itself.
Still another conflict case in which cost recovery litigation was
adversely impacted involved a subcontractor who was performing PRP
searches, negotiation support, and oversight of PRP work on a site for
the EPA. The subcontractor not only had a significant financial
relationship with the PRPs of that site, but was also representing and
performing related work for the PRPs on the same site. The
repercussions of this conflict involved not only a significant delay in
the Agency's ability to cleanup the site, but also tens of thousands of
dollars in transition costs to remove and replace the subcontractor.
EPA's concerns regarding conflicts of interest are very real. As
EPA continues to clean up the environment and to try to recover the
costs of the cleanup from PRPs, EPA seeks, through this rule, to
protect the public from delays and increased costs. For example, EPA
contractors may perform remedial design work for EPA by developing
plans and specifications for a selected cleanup remedy at a site. If
that contractor also works for a PRP to assess the contamination at the
same site, EPA, PRPs, and the public may question the integrity and
objectivity of the work the contractor has performed for EPA. Moreover,
EPA could face difficulty in utilizing the contractor's expertise and
experience in supporting the merits of EPA's enforcement case. Judges
and juries may doubt the credibility of a factual or expert witness who
has performed conflicting work and may have inconsistent opinions.
Another example of how EPA's enforcement could be jeopardized in the
future would be if a contractor who performs technical enforcement
support for EPA, including searches for and case histories of PRPs,
subsequently or concurrently worked for the PRP on the same case.
Again, contractors performing this and other types of Superfund work
are often privy to sensitive EPA litigation information and case
management plans and could divulge such information to the PRP. If such
information was leaked or otherwise divulged intentionally or
unintentionally, the Government's case may be damaged by disclosure to
the PRP of litigation strategy. In addition, if documents deemed
confidential and privileged were released, such documents could then be
admitted into evidence in opposition to the Government's case.
We disagree with commenters that the Agency has not considered the
balance between the cost of the rule and the benefits to EPA of
avoiding conflicts. We believe there must be uniform regulatory
requirements to raise contractors' awareness and understanding of
conflict of interest problems and the procedures needed to prevent
them. Over the past few years, the development of this rule with its
strong conflict of interest provisions has created a heightened
sensitivity to conflict of interest matters throughout EPA's programs
and the contractor community. As a result, we are already seeing an
increase in contractors reporting of potential conflicts to the Agency.
Certainly, with the tremendous cost of cleaning up the environment, we
need to ensure the integrity of our procurement program and cannot
afford to jeopardize our enforcement actions and impede PRP cleanup of
hazardous waste sites. EPA has seriously considered the cost of the
rule and has worked to minimize the rule's burden to the contractor
community, yet ensure adequate protection of its programs.
4. Pending FAR Regulations and Consistency With OFPP Policy Letter 89-1
Some commenters expressed concern with the publication of EPA's
rule prior to the publication of the pending FAR regulations, and some
expressed concern that the proposed rule is inconsistent with and goes
beyond the existing regulations and OFPP Policy Letter 89-1. On October
22, 1990, the interim regulations were published as FAC 90-1, amending
the FAR subpart 9.5 on conflicts of interest. On October 25, 1991, the
interim rule was converted to a final rule. We have carefully reviewed
our rule to ensure its harmony with FAR subpart 9.5. The rule
specifically addresses the unique requirements of the Superfund program
which are not covered by other regulations. To safeguard our
enforcement actions and ensure the integrity of our cleanup program, it
is essential that we monitor not only conflicts of interest prior to
award, but also conflicts during and after performance. These special
provisions are not inconsistent with FAR subpart 9.5.
5. Definition of Conflicts of Interest
A number of comments concerned the definition of types of conflicts
of interest. The term ``conflict of interest'' in this rule has the
same definition as contained in FAR Subpart 9.5. EPA has not adopted
any unique or agency specific definitions for types of conflicts of
interest. EPA also has included the term ``personal conflicts of
interest'' which is not defined in the FAR. For clarity, we have
provided a definition of personal conflict of interest in EPAAR Clause
1552.209-73, Notification of Conflicts of Interest Regarding Personnel.
A personal conflict of interest is ``a relationship of an employee,
subcontractor employee, or consultant with an entity that may impair
the objectivity of the employee, subcontractor employee, or consultant
in performing the contract work.''
6. Apparent Conflict of Interest
A number of commenters objected to the expansion of conflict of
interest to include the term ``apparent'' and indicated that the term
was too vague and was not defined in the rule. To be consistent with
FAR Subpart 9.5, this term has been removed from the rule.
Nevertheless, EPA strongly supports the OFPP approach on this issue and
will fully comply with section 6(d) of OFPP Policy Letter 89-1, which
mandates, ``Federal procurement officials shall encourage contractors
to consider carefully the potential for conflicts of interest in all of
their activities associated with federal procurement, and shall be
sensitive to the appearance of conflicts of interest in any contracting
actions.'' A comment was also received which stressed that contractors
that work for both private and public parties should avoid and mitigate
both actual conflicts of interest and the appearance of conflicts in
order to protect the public interest. Accordingly, our contractors
should be sensitive to the appearance of conflicts of interest in all
contract actions.
7. Potential and Actual Conflicts of Interest
Several commenters took exception to EPA's inclusion of the term
``potential'' to describe a particular type of conflict as being too
vague and overly restrictive, and one commenter stated that the term
``actual conflict'' was undefined and contrary to the FAR. We disagree
and are retaining the terms in the rule. The concept of potential
conflicts is well established in acquisition regulations. FAR Subpart
9.5 provides examples of situations involving potential conflicts of
interest and also includes the term ``actual'' conflict of interest.
8. Significant Conflict of Interest
Some commenters recommended that EPA only be concerned with the
reporting of significant conflicts of interest. We disagree. It is
unacceptable for contractors to report only conflicts which they
consider significant. All actual and potential conflicts of interest
that are identified must be reported to the appropriate EPA Contracting
Officer. In accordance with the process set out in FAR Section 9.504,
the EPA Contracting Officer identifies and evaluates conflicts, makes a
determination of whether a conflict is significant and determines if
the conflict can be avoided, mitigated, or neutralized.
9. Restriction of Contracting Officer's Decision Making Authority
Two comments received expressed concern that the rule will infringe
upon or eliminate the Contracting Officer's decision making authority
on conflicts of interest. In particular, the comments stressed that it
is important that Contracting Officers make decisions on a case-by-case
basis and that EPA is abrogating its responsibilities by placing the
full burden on contractors to disclose conflicts of interest no matter
how insignificant or immaterial.
Nothing in this rule restricts the Contracting Officer from making
decisions on conflicts of interest on a case-by-case basis. In fact,
Contracting Officers are required to make decisions on a case-by-case
basis in accordance with FAR subpart 9.5. The existing EPAAR requires
contractor disclosure of conflicts and the rule does not change this
responsibility. This disclosure requirement does not mean that the
Contracting Officer will find that every reported conflict is
significant or that it cannot be avoided, neutralized, or effectively
mitigated, but rather allows the Contracting Officer the opportunity to
carefully evaluate the facts of each case and make an informed
determination that protects our programs and the public interest.
Clearly, both EPA and its contractors have a continuing responsibility
to identify and prevent conflicts of interest in federal procurement.
However, it is not feasible or practicable for EPA to routinely search
and review contractors' business records to unearth conflicts. Such
action would be inappropriate and intrusive. Therefore, as a practical
matter, we must require contractors to report conflicts.
10. Limitation of Disclosure
One commenter recommended that EPA revise the rule to address
disclosure of client information regarding the same subject matter as
the instant solicitation, or directly relating to such subject matter
as the instant solicitation. The commenter recommended either limiting
disclosure to information connected to the solicitation or to work
performed in the same state or region where the work for EPA will be
performed.
EPA requires disclosure of conflict of interest information related
to the work performed or that will be performed for EPA. We do not
require the submission of unrelated client or other information. All
that is required is sufficient information for the EPA Contracting
Officer to make an informed conflict of interest determination.
11. Disclosure of Client Information
One comment raised the concern that contractors may be unable to
divulge work performed for clients and the dollar value, since this
information as well as client lists are routinely claimed to be
confidential.
The rule does not require the release of client lists or the
reporting of the dollar value of work performed for clients. Rather, we
require that a contractor disclose sufficient information to the
Contracting Officer so that the Contracting Officer can make an
informed decision. In most cases, this would involve the name of a
client creating the potential conflict or the contractor, particularly
if the client is a PRP on the site, and information regarding the
nature of the work. Each case is different and there may be occasions
where a client routinely claims confidentiality for the release of its
name and other information concerning the conflict. If a disclosure
waiver cannot be obtained from the client, the contractor should
explore with the Contracting Officer suitable alternatives for
providing information sufficient to permit the Contracting Officer to
render an informed decision on the conflict. We urge contractors to
identify confidential business information and stress that EPA is
committed to protecting sensitive business and other information to the
full extent permitted by law.
12. Availability of PRP Listings
Commenters expressed the concern that contractors can not identify
all conflicts of interest unless EPA informs contractors of all of the
PRPs and of the possibility of future enforcement actions. They further
stated that contractors are unable to sign the certifications
accurately unless they know these facts. Several commenters also
suggested that to avoid delays in contractor disclosure and
certifications, EPA should furnish up-to-date listings of PRPs.
EPA acknowledges the fact that PRPs are continually being
identified and that contractors will not always have sufficient
knowledge of all PRPs at the time certification is submitted. We
require contractors to certify to the best of their knowledge and
belief at the time of the certification. It is not EPA's intention to
hold a contractor accountable for information which the contractor did
not know or have reason to know at the time the certification was
executed. We wish to stress, however, that disclosure of conflicts is a
continuing obligation, and certification is a statement that should
demonstrate a contractor has made a good faith effort to disclose all
potential conflicts of interest. In order to alleviate contractors'
concerns, the time period for the submission of the work assignment
certification has been extended to permit a more reasonable time period
for contractors to contact EPA and obtain the most current information
concerning PRPs and future enforcement actions pertaining to sites
identified in the work assignments or contract. The term ``work
assignment'' in this rule includes other similar tasking documents such
as a delivery order or a technical direction document. EPA is committed
to providing contractors with the list of known PRPs for sites at the
time of work assignment issuance. EPA is currently working to make
available to all Contracting Officers the Superfund Enforcement
Tracking System (SETS) report, which tracks PRPs by site. This report
is available to the public through the National Technical Information
Service (NTIS), Springfield, Virginia.
13. Period of Record for Conflict of Interest Checks
One commenter requested clarification of the period to be searched
for organizational and personal conflicts of interest. The commenter
suggested that the organizational check include all prior work
performed by the contractor but that the personal conflict of interest
check be limited to the period of time that the individual is employed
by the company or for a one year period, whichever is greater.
In accordance with FAR 9.5, EPA will require all contractors who
have at least three years of records to search back through the
immediately preceding three years of records. For contractors who do
not have three years of records to search, a transition period for
searches will be implemented requiring the contractor to search any
records that it has until, over time, three years of records are
accumulated. Contractors, however, are always required to report any
conflicts of which they are aware. We emphasize that a contractor is
not required to collect, maintain or search records on personal
conflicts of interest. The requirement on the contractor is to inform
its employees, performing work under or related to EPA contracts, of
their obligation to report conflicts of interest. It is the employees'
responsibility to review their current and past activities and to
report potential conflicts of interest to their employers.
14. Elimination of Conflicts by Full Disclosure of Contractor Roles
One commenter stated that EPA should focus on full disclosure of
roles, since where full and open disclosure of a contractor's role
exists no conflict of interest can occur. We disagree. Although we
certainly believe in openness regarding the role of contractors in
EPA's procurement program, we fail to see how full disclosure of the
role of contractors eliminates the existence of conflicts. Rather, it
is contractor disclosure of potential conflicts to EPA that provides
the opportunity to avoid, mitigate, or neutralize conflicts.
15. Centralized Decision Making
Many comments were received recommending the establishment of a
centralized decision making function with an administrative contracting
officer at EPA headquarters having the responsibility for decisions on
all conflict of interest requests. It was pointed out that this would
achieve consistency in conflict of interest determinations.
We have seriously considered this as an option and have rejected
it. A central administrative contracting officer would not have the
necessary background or knowledge of the individual contracts to make
well informed conflict of interest determinations. We believe that a
decentralized approach to conflict of interest decision making, where
determinations are made by the EPA Contracting Officer for the contract
on a case-by-case basis, is the more effective approach.
16. Objective Standards for Determining Conflicts of Interest
One commenter requested that meaningful objective standards be
adopted to evaluate significant personal and organizational conflicts
of interest.
FAR subpart 9.5 provides definitions and general rules pertaining
to conflict of interest, but do not include objective standards.
Conflict of interest is a subject for which objective standards are
difficult to formulate. However, this does not mean that conflicts
cannot be described through definitions and general rules. In addition
to the examples included in the FAR, EPA Contracting Officers receive
training and assistance on conflict of interest issues from the
conflict of interest staff within EPA's Office of Acquisition
Management. Therefore, Contracting Officers will have available
examples and precedents to assist them in their conflict of interest
determinations.
17. Limited EPA Resources To Administer Conflict of Interest
One commenter expressed concern that EPA would not have the
resources to efficiently administer the rule, and other commenters
recommended that EPA provide examples of conflicts of interest to help
Contracting Officers respond consistently and wisely and prevent delays
associated with these new regulations.
We believe the Agency has sufficient staff to administer these
regulations. In the past, response times were sometimes delayed not
because of a lack of resources but because of insufficient training and
experience. EPA is committed to a comprehensive conflict of interest
training program for its Contracting Officers and project personnel.
The training will include a collection of case studies and examples
upon which to base conflict of interest decisions.
18. Applicability of the Rule to Superfund Work Outside EPA
Another commenter, expressing support for the rule, suggested that
the EPA should consider and clarify how the provisions in the rule can
be enforced equally with respect to all Superfund contracts, whether
they are let by EPA or other Federal agencies, such as the U.S. Army
Corps of Engineers, or the States.
This rule applies only to contracts awarded by EPA. EPA can
encourage the use of similar provisions in contracts for Superfund work
awarded by other agencies or States. However, it cannot require
agencies or States to include similar provisions in those contracts.
EPA is currently exploring the possibility of including its clauses in
agreements that pertain to Superfund work in contracts awarded by other
agencies or States.
19. Applicability of the Rule to Contractor Work for the Public Sector
Some commenters suggested that the rule apply to EPA contracts only
and have no bearing on work performed for other Federal agencies. It
was pointed out that the rule lacks a discussion of how the
restrictions in this rule bear on the ability of contractors to seek
similar work from other Federal agencies and the States. Particular
concern was raised that EPA not restrict its contractors from working
simultaneously for other agencies such as the Department of Energy
(DOE) and the Department of Defense (DOD) since this would be contrary
to the public interest.
The EPA is committed to working closely with other agencies and
States to ensure the effective and expedited cleanup of hazardous waste
sites throughout the country and encourages the use of the best cleanup
technology available. It is not our intention to restrict EPA
contractors from working for the public sector. We strongly encourage
contractors to perform work for other Federal agencies and States when
such work does not create a conflict of interest problem which would
impair the contractor's objectivity in performing work for EPA or
damage the integrity of the EPA's cleanup and enforcement actions. We
have intentionally made no distinction between the public and private
sector in the rule's reporting requirements. To safeguard our programs,
we must require that all actual or potential conflicts of interest be
identified, avoided, mitigated, or neutralized.
The EPA has the responsibility to ensure compliance by Federal and
State agencies with the requirements of CERCLA and the amendments made
by subsequent enactments. Because of EPA's enforcement responsibility,
the interests of EPA and other public organizations will not always be
parallel and may at times be distinctly at odds. For example, the
interests of the EPA and DOD or DOE may be very different regarding the
terms of Federal Facility cleanup agreements. Therefore, it is
important that our contractors are not placed in conflict situations.
When an actual or potential conflict of interest exists with work that
a contractor may wish to perform with another organization, whether
public or private, the contractor shall report it to its EPA
Contracting Officer so that an informed determination can be made based
on a careful review of the facts, the legal and program considerations,
and the best interest of the United States.
20. Qualified Contractors
One commenter stated that EPA may not attract the most qualified
contractors or best expertise as a result of implementing the conflict
of interest regulations. We disagree. EPA promotes full and open
competition and attracts the most highly qualified contractors to its
procurement program. Securing qualified contractors and eliminating
conflicts of interest are not opposing goals. In fact, most of the
highly qualified firms which compete for EPA contracts have systems
established within their organizations to identify and eliminate
conflicts of interest.
21. Flow Down of the Clause to Subcontractors and Consultants
A number of commenters stated that the categories of subcontractors
and consultants exempted from the flow down of the conflict of interest
clauses are too limited. They specifically questioned why the ``non-
discretionary technical or engineering services, including treatability
studies,'' exempted in the proposed clause, EPAAR 1552.209-74,
Limitation of Future Contracting (LOFC), are not included in the flow
down exemptions of all of the rule's conflict of interest clauses.
In developing this rule, we carefully evaluated the types of work
performed by subcontractors and consultants under EPA's contracts, and
identified certain classes of work that pose a minimal risk of conflict
of interest. They include well drilling, fence erecting, plumbing,
utility hookups, security guard services, and electrical services. We
exempted these classes from the flow down provisions of all of the
rule's EPAAR conflict of interest clauses. In addition, for the LOFC
clause only, we also exempted subcontractors and consultants who
perform ``non-discretionary technical and engineering services,
including treatability studies.'' Although we believe that non-
discretionary technical and engineering services could pose some risk
to the Agency, particularly since this category is so broad, we were
able to exempt this work from the LOFC clause because sufficient
protection was provided through coverage by the basic conflict of
interest clauses, (EPAAR 1552.209-71 Organizational Conflicts of
Interest, EPAAR 1552.209-73 Notification of Conflicts of Interest
Regarding Personnel, and EPAAR 1552.227-76 Project Employee
Confidentiality Agreement.)
In the case of ``treatability studies'', we recognize that this
type of work may have a high risk of conflict of interest, yet we
believe it is in the public interest to promote innovative technology
and exempt such subcontract work from any limitations on future
contracting. However, because there may be a high risk of conflict for
this type of work, it is essential that protection is provided by flow
down of the basic conflict of interest clauses.
22. Expansion of the Class of Exemptions for Subcontractor Flow Down
Several commenters requested that we broaden the classes of work to
be exempt from the flow down requirements which apply to subcontractors
and consultants in all of the conflict of interest clauses. Some
provided specific suggestions of additional categories to be exempted
including: Laboratory services, industrial hygiene, selected
geotechnical consulting, medical surveillance, transportation services,
and graphics printing.
We have given serious consideration to the commenters'
recommendations and believe that categorically exempting these types of
work from flow down would pose an unacceptable risk of conflict of
interest to the Agency. For example, if a laboratory services
subcontractor were also providing environmental consulting services for
a specific site in support of a PRP's legal position, it would be a
conflict of interest for the same subcontractor to then take or analyze
samples for the EPA from the same site. In addition, if a
transportation subcontractor has a relationship with a disposal
facility that is a PRP on a site, it would be a conflict of interest
for that same transportation subcontractor to also perform work at or
relating to the site for EPA, or involving the disposal facility. Each
of the other recommended categories also poses such risks, and the
Agency cannot categorically exempt them. However, we recognize there
may be special cases in which these type of activities can be excluded
and each clause allows for Contracting Officers to authorize such
exemptions. Thus, we have added a provision permitting a contractor to
request in writing that the Contracting Officer exempt from the flow-
down requirements of the Limitation of Future Contracting clauses a
particular subcontract or consultant agreement for nondiscretionary
technical or engineering services not specifically exempted in the
clauses, including laboratory analysis. The Contracting Officer will
review and evaluate each request on a case-by-case basis, before
approving or disapproving the request.
23. Costs Associated With Flow Down of Clauses to Subcontractors
Commenters expressed concern about the costs associated with the
flow down requirements of the rule's clauses. One commenter asked if
EPA is willing to pay for the costs associated with the LOFC flow down
provision.
The allowable and allocable costs associated with this rule may be
chargeable to EPA contracts in accordance with the provisions of FAR
part 31. This would also apply to allowable and allocable costs
associated with this rule, which are incurred by non-exempt
subcontractors or consultants, except that such costs would be
submitted to EPA's prime contractor rather than to EPA. We anticipate
that costs associated with future contracting requests under an LOFC
clause will be minimal and would be performed as a part of the normal
bid and proposal effort.
24. Expansion of Subcontractor Flow Down Exemption To Apply To Prime
Contractors
Some commenters also requested that prime contractors be exempt
from the LOFC or other conflict of interest clauses when work to be
performed under the prime contract is one of the exemptions identified
in the flow down section of the clauses.
We disagree. EPA prime contracts include a wide variety of tasks,
many of which pose a high risk for conflict of interest. However, in
the unlikely event that an EPA prime contractor only performed the type
of work exempted in a specific subcontractor flow down provision, the
contractor could request from the Contracting Officer an exemption from
inclusion of that conflict of interest clause.
25. Small and Minority Business Concerns
Two commenters raised concern that the rule conflicts with the EPA
Administrator's initiative to provide more work to small and minority
owned businesses and with Congressional intent to promote contracting
with small business. The commenters asserted that small firms cannot
absorb the high costs of maintaining complex conflict of interest
systems. Other commenters expressed concern that the LOFC clause will
hurt small businesses that need local markets because small businesses
do not have the operational breadth that larger firms possess to avoid
regions where conflicts may exist.
It is essential that we avoid, mitigate, or neutralize conflicts of
interest in all EPA contracting. However, we recognize the importance
of small and minority owned businesses and strongly support their
active participation in our procurement programs. We are currently
implementing a Long Term Contracting Strategy for the Superfund program
that will enhance the competitive environment and provide greater
opportunities for small business participation by creating smaller,
regionally based contracts and subcontracting opportunities under these
contracts.
Small businesses currently participate in the Superfund and other
EPA programs primarily as subcontractors. As detailed in our discussion
of flow down exemptions, a number of categories of subcontracts are
specifically exempt from the requirements of the entire rule and ``non-
discretionary technical and engineering services'' subcontract work is
exempt from all LOFC clause provisions. This substantially minimizes
cost and associated burdens for many small businesses participating in
our programs at both the local and national level. Moreover, at any
time, a small business operating as either a prime contractor or a
subcontractor may request waiver of clause requirements for
nondiscretionary work which poses a minimal risk of conflict of
interest.
EPA does not require any special type of system to identify and
report conflicts. Each contractor determines its own procedures for
searching and identifying conflicts of interest, and in some cases, it
may already have a process in place to identify conflicts in its
commercial business. We anticipate that the scope of a company's
procedures would be commensurate with the company's size and
complexity, and for small businesses any system would be less complex
and detailed.
26. Applicability of Rule to Related Organizations
Several comments were received concerning the applicability of the
rule to affiliates and other related organizations. A few commenters
encouraged EPA to publish a uniform policy regarding the disclosure
burden of contractors for work performed by parent and affiliate
corporations as well as partnerships and other businesses. Most
commenters opposed the burden of extending disclosure to conflicts of
interest associated with related organizations, and stressed that it
may be difficult to obtain information from affiliates regardless of
common ownership.
The issues regarding applicability of the rule to related
organizations are complex. The rule does not specifically address
related organizations, and it is not our intent to extend search and
certification requirements to related organizations and create
unnecessary reporting burdens. However, we do require our contractors
to make a good faith effort to report conflicts as they are identified.
If an EPA contractor is aware of a potential conflict or has reason to
believe a related organization may create a conflict of interest for
the contractor, checking with that organization to verify whether a
conflict exists would certainly be warranted.
If a contractor reports a conflict of interest involving a related
organization and includes information which is designated as sensitive
or proprietary, the EPA will protect such information from unauthorized
disclosure. An opportunity to so mark such information shall be
afforded to the submitter of the information.
27. Application of the Rule to Other Units of a contractor's
Organization Which Do Not Perform Environmental Work
One commenter wanted to know the extent to which the rule applies
to other units of a contractor's organization which do not perform
environmental work. The commenter further stated that it is unfair to
restrict service areas of a firm that are unrelated to environmental
consulting work or to the contractor unit working on an EPA contract.
This rule applies to the corporation or other legal entity that has
entered into a contract with EPA, and makes no distinction between
separate divisions or units of the EPA contractor's organization. The
fact that a part of the organization does not perform environmental
work does not necessarily mean it would not have a conflict of
interest. EPA only restricts its contractors from work which poses a
significant conflict of interest to the Agency. We require our
contractors to identify all potential conflicts of interest and notify
the EPA prior to entering into a contract for types of work identified
in the LOFC clause as posing a significant risk of conflict. This
provides the EPA an opportunity to evaluate such work and prevent
conflicts that may jeopardize work performed for EPA or ongoing
enforcement actions.
28. Establishment of New Organizational Units To Avoid Conflicts of
Interest
A comment was received that expressed concern about a contractor
establishing new ``units'' with the purpose of allowing the contractor
to perform in different program areas where it might otherwise be
precluded due to a conflict of interest. The comment included a
suggestion that there should be a deterrent to allowing this type of
loophole.
EPA requires that contractors report to the EPA Contracting Officer
all potential conflicts of interest with work performed for EPA. While
there may be instances where an organizational conflict of interest may
be mitigated effectively, all such potential conflict situations must
be reported to the EPA so that the Contracting Officer can make an
informed determination based on a careful evaluation of the facts and
program and enforcement concerns.
29. Contractor Authority To Decline EPA Work
One comment stated that an EPA contractor should be allowed to
decline specific work assignments because of a conflict with other work
that the contractor may have accepted after the EPA contract was
awarded. We disagree. The contractor does not have the discretion to
reject a work assignment. The contractor must report all conflicts of
interest to the EPA Contracting Officer who evaluates conflicts, makes
a determination of whether a conflict is significant and determines if
the conflict can be avoided, mitigated, or neutralized. Under the terms
of an EPA contract, a contractor is required to accept and perform work
issued under work assignments. Where there is an overriding public
interest to perform the work when a conflict of interest exists, the
Contracting Officer may decide that the work should be performed
despite the inability to avoid, mitigate, or neutralize the conflict.
For example, if an emergency situation exists and immediate action is
needed to stabilize a site to prevent injury to nearby residents, the
Contracting Officer may determine that performance on the work
assignment is necessary regardless of the contractor's inability to
avoid, mitigate, or neutralize a conflict at the site.
30. Contractor's Right To Stop Work
Commenters stated that a contractor should have the right to stop
performance if it reasonably believes that there would not be a
significant impact upon the Agency as a result of the work stoppage. We
disagree. The contract requires performance, and work may be stopped
only by the Contracting Officer. The Government's right to control
costs incurred as a result of stopping work must be protected.
31. Time Limit for Responding to Conflict of Interest Requests
Several commenters stated there should be a time limit, such as
three or ten days, established for Contracting Officers to respond to
any conflict of interest notification or LOFC request. Commenters
further suggested that contractors should be able to assume that
approval, if required, has been given if a response has not been
received from EPA within ten days. The commenters stated that
contractors may not only be placed in a position which may cause them
to lose business due to slow responses by EPA, but also may be subject
to bid bond forfeitures or other penalties for failure to accept a
contract if time limits are not included in the rule. Also, for Federal
contracts, contractors may risk having their bids found non-responsive
if the bid is conditioned upon EPA granting approval to enter into the
contract.
Since each conflict of interest situation is unique and has varying
degrees of complexity and because contractors often do not initially
provide sufficient information for a Contracting Officer to make a
timely decision, the establishment of an arbitrary time limit is not
appropriate. We do not agree with the suggestion that failure to
respond within ten days should automatically be interpreted as
approval. Arbitrary time limits can result in procedural questions over
submission and receipt dates and create delays. Although set response
times are not included in the rule, EPA is committed to providing
timely responses. We have clarified our LOFC clauses to indicate that
contractors may seek an expedited response regarding their initial LOFC
requests by submitting their requests to the Contracting Officer and
the next level within the Contracting Officer's organization.
32. Review Process
Several comments recommended that EPA institute an appeal process
for contractors that want a review of an adverse conflict of interest
decision made by a Contracting Officer. The decision on any conflict of
interest determination is the responsibility of the EPA Contracting
Officer. We have clarified the review process available for LOFC
requests if a contractor disagrees with the decision of a Contracting
Officer. The contractor may file a request with the Contracting Officer
for reconsideration or the contractor may request that a Contracting
Officer determination be reviewed at a higher administrative level.
Filing a request for reconsideration however, does not preclude a
contractor from seeking review at the next administrative level. The
LOFC clause has been modified to include the review process.
33. Modification of Existing Contracts
Comments were received which took exception to a unilateral
placement of conflict of interest clauses into existing contracts. EPA
does not intend to unilaterally place the new EPAAR clauses into
existing contracts. Clauses substantially similar to these clauses
shall be negotiated by the Contracting Officer for existing contracts,
on a case-by-case basis, as stated in the general prescription to the
clauses. The general prescription to the clauses, cited in the proposed
rule as paragraph (c), EPAAR 1509.508, Solicitation provision and
contract clauses, is redesignated, under the final rule, as EPAAR
1509.507-2, Contract clause, to conform with recent numbering changes
to FAR Subpart 9.5.
34. General Comments Concerning Improper Restriction of Competition and
Its Effects
Commenters expressed concern about a restriction of competition on
Superfund work resulting from this rule. Commenters also stated that
EPA has improperly restricted competition by placing overly broad
future contracting limitations affecting sites, types of contracts, and
parties with whom the contractor may contract. Commenters questioned
the authority to impose ``post contract'' restrictions and stated that
such activity should be governed by internal guidelines and market
forces. Others stated that these clauses prevent EPA from having access
to the most qualified sources in its contracting program. Other
comments reflected an interpretation that the restrictions apply to
affiliates and to contractor clients.
We disagree with these comments. The LOFC clause and its alternates
are not overly broad nor do they improperly restrict competition. The
LOFC clause and each alternate are focused narrowly upon areas which
have a high potential for conflict. The authority for ``post contract''
restriction is recognized in FAR Section 9.507.
Many EPA Superfund solicitations and contracts currently include
clauses similar to those contained in this rule. EPA has attracted
qualified contractors and competition has not diminished. The comment
concerning the limitation of competition based upon the flow down of
restrictions to affiliates or to clients reflects an assumption based
upon a misreading of the proposed rule. There is no flow down of
restrictions to affiliates or to clients.
35. Negotiation of Specific LOFC Clauses
One comment suggested that the LOFC clause be negotiated separately
for each contract. This will occur for existing contracts. However, the
rule's EPAAR clauses are required for all solicitations and new
contracts. The Contracting Officer may, however, consider a deviation
to the inclusion or for the modification of the clause.
36. Assessment of the Cost and Economic Impacts of Limiting Work on
Existing Contracts
Commenters were concerned about the limitation on business as a
result of the inclusion of the LOFC clauses in existing contracts. One
commenter stated that an assessment of the economic impacts of the rule
has not been performed for existing contracts. The commenter further
stated that the limitations contained in the LOFC clause, which will be
included by modification into existing contracts, will adversely affect
its future activities. The commenter's concern is that these effects
were not envisioned by the contractor at the time it submitted its
offer to the EPA.
The rule states that the EPAAR clauses are to be placed in all
solicitations and new contracts unless a deviation is obtained. For
contracts existing as of the effective date of the rule, clauses
substantially similar to those in the rule are to be negotiated and
incorporated into those contracts, on a case-by-case basis. EPA will
not unilaterally incorporate these new clauses into existing contracts.
Concerning the cost and economic impacts of the rule, EPA has
performed a cost burden analysis of the rule and recognizes that there
will be some economic impact as a result of implementing these clauses.
During the formulation of the LOFC clause for each existing contract,
the negotiation process will assure that any specific economic
attributes associated with the contract are taken into consideration.
37. Unduly Burdensome and Redundant Certifications
Several commenters stated that the certifications required by the
rule are unduly burdensome and redundant, and should be deleted from
the rule. Specifically, the commenters took exception to requirements
for an annual certification and to the work assignment and work plan
certifications.
To respond to these concerns, we have made significant reductions
in the proposed rule's certification requirements. Under the final
rule, all Superfund contractors are required to submit certifications,
but they are no longer required to submit both annual and work
assignment certifications. In addition, the requirement for work plan
certifications has been eliminated, and the number of work assignment
certifications has been reduced. Under the final rule, a work
assignment certification is required within 20 days from the time the
contractor receives a work assignment. If a subsequent work assignment
is issued to the contractor under the same contract for additional work
at the same site(s) covered by the initial work assignment, an
additional certification for the new work assignment is not required.
This is not intended to relieve the contractor from reporting any
future conflicts of interest relating to the site(s). The contractor
will still be expected to search and report any conflicts of interest
based upon new information which has been identified. These
certification changes will significantly reduce the burden on
contractors.
38. Multiple Sites Under Work Assignments, Addition of Sites to a Work
Assignment and the Allocation of Costs
One commenter expressed concern that since sites and PRPs may be
added to the work assignments during performance, contractors cannot
certify at the work assignment acceptance phase that all conflicts have
been disclosed. This concern also applies to a multi-site work
assignment where sites are identified as the work arises. The commenter
also expressed concern about the recovery of costs incurred for records
retention pertaining to sites under multi-site contracts.
The work assignment clause requires that the contractor certify to
the best of its knowledge and belief that all conflicts of interest
have been reported or that no conflicts of interest exist. We recognize
that all site and PRP information may not be available at the time of
the certification, which under the final rule is 20 days after the
contractor receives the work assignment. If a site is added to the work
assignment after the certification is submitted, a subsequent
certification is not required for the additional site. The
certification includes a statement that the contractor recognizes its
continuing obligation to identify and report any conflicts arising
during performance of the work assignment pertaining to all sites.
Allowable costs associated with work performed under the contract,
including records retention pertaining to sites, shall be allocated
consistent with the contractor's cost accounting system. Since work
assignments are so diverse, questions concerning the proper
allocability of costs on a specific work assignment should be directed
to the Contracting Officer.
39. Cost to Contractors Associated With Requesting Approval for Future
Work After Contract Performance
Several comments were received concerning the reimbursement of
costs associated with the submission of LOFC requests, filed after the
expiration of the EPA contract. Another commenter expressed concern
about costs contractors may incur as a result of involvement in future
litigation matters.
The LOFC clause identifies work that is high risk to the Agency.
The purpose of this clause is to avoid conflicts that jeopardize the
Superfund program and EPA's enforcement efforts. After expiration of
the contract or work assignment, contractors only have to request
approval for future contracting identified in the LOFC clause. Costs
associated with this approval process should be minimal and would be
performed as a part of the normal bid and proposal effort.
The issue of costs associated with future involvement in litigation
matters is not within the scope of this rule. However, generally if EPA
requires expert witness or special litigation support for a Superfund
case, it would enter into a contract for such services. For costs
associated with other witness testimony, the Federal Rules of Criminal
Procedure or the Federal Rules of Civil Procedure would apply.
40. FAR Coverage of Paperwork
One commenter stated that the FAR requires detailed paperwork only
when necessary to examine ``significant potential conflicts'' and to
determine appropriate mitigation measures. We agree. In accordance with
FAR section 9.505, EPA's Contracting Officers examine each situation on
the basis of its particular facts and exercise common sense, good
judgment and sound discretion in order to minimize the paperwork
burden. Only information which is sufficient to permit the Contracting
Officer to identify and evaluate conflicts of interest shall be
requested.
41. Paperwork Requirement and EPA Objectives
One commenter stated that the paperwork required violates the
Paperwork Reduction Act and is unnecessary to achieve EPA's program
objectives. We do not agree. EPA has not violated the Paperwork
Reduction Act and has made every effort to minimize the paperwork
burden associated with this rule consistent with achieving its
objectives in the area of conflict of interest. The final rule reflects
a substantial reduction in the paperwork burden to contractors
participating in EPA's procurement program.
42. Paperwork Burden Concerns
Many commenters expressed concerns about the burden the rule would
impose upon contractors. Several commenters stated that EPA's burden
estimate was too low. One commenter stated that its conflict of
interest review effort required much less time than that which was
estimated by EPA. Others offered suggestions on how EPA could reduce
the paperwork burden and still accomplish its objectives. These
suggestions included elimination of duplicative certifications.
EPA has considered these suggestions and has made significant
reductions to the paperwork burden associated with this rule. Under the
final rule, contractors will not be required to submit certifications
on both an annual and a work assignment basis. In addition, the work
plan certification requirement has been eliminated from the proposed
rule's amendment to the work assignment clause. Under the final rule, a
single certification will be submitted within twenty days from the time
the contractor receives the work assignment, and it will cover
conflicts of interest for all effort to be performed or related to
sites under the work assignment. Furthermore, if a subsequent work
assignment is issued to the contractor under the same contract for
additional work at the same site, an additional certification for the
new work assignment is not required. The initial certification is
sufficient because it requires a continuing obligation by the
contractor to report any conflicts associated with the site(s). The
paperwork burden associated with the LOFC clause and its alternates has
been reduced because the time frames for requesting approval commence
at the conclusion of the work assignment instead of the expiration date
of the contract. In many cases, this will reduce the LOFC request
period by several years. In the final rule, EPA has also eliminated the
requirement for an annual update of the conflict of interest plan in
order to reduce reporting requirements.
43. Data Base Searches and Cost Reimbursement for Paperwork Burden
Commenters stated that contractor data bases do not contain the
type of information that EPA is requesting and, therefore, contractors
would not be able to provide complete certifications on conflicts of
interest. Other commenters expressed concerns that the development of
data bases and the other administrative costs associated with the rule
will not be recovered by the contractors and have not been included in
the total cost for conflict of interest systems. They recommended that
EPA provide a mechanism for contractors to recoup these costs.
EPA does not require that contractors establish any particular kind
of information retrieval system. EPA recognizes that contractors often
do not have all of the information readily accessible upon which to
base their certifications. Therefore, the certifications contain the
statement that the contractor is certifying to the best of its
knowledge and belief as of the date of the certification.
Concerning the costs associated with the rule and a conflict of
interest system, the rule states that costs associated with conflicts
of interest may be chargeable to Government contracts under the
provisions of FAR Part 31. Following the expiration of the contract, no
certifications are required. For expired contracts, which involved
efforts at sites, the costs associated with search effort associated
with the LOFC clause should be minimal. These post contract costs would
normally be allocated to the contractor's bid and proposal pool.
C. Section by Section Analysis
The following is a description of the final rule's EPAAR clauses
and our response to comments on the specific clauses and their
prescriptions which are not addressed in the preceding general comments
section.
EPAAR 1552.209-71, Organizational Conflicts of Interest, is
modified to specify that notification of actual or potential
organizational conflicts of interest should be made prior to
commencement of work. However, in emergency situations, work may begin
with notification being made within five work days. The clause also
identifies specific subcontracts and consultant agreements for which
this clause is not required.
As a result of public comment, the following changes have been made
to the proposed modification of this clause and its prescription:
--The term ``apparent'' has been removed from this clause and all other
clauses in the rule in response to comments that the term is vague and
difficult to define.
--The prescription to this clause, paragraph (c)(1) of EPAAR 1509.508,
Solicitation provision and contract clauses, has been redesignated as
paragraph (a), EPAAR 1509.507-2, Contract clause. In addition, the
reference to FAR 9.508-2 has been removed from this paragraph since FAC
90-1 removed this section from the FAR. These minor changes have been
made to conform with the numbering changes to FAR subpart 9.5 based on
FAC 90-1, and are in accord with public comments urging that the final
rule be consistent with any changes to the FAR.
Other comments and EPA's response include:
1. Clarification of ``any work''. One commenter requested that the
term ``any work'' in paragraph (b) of the clause be clarified. ``Any
work'' would generally refer to any billable hours to the issued work
assignment. The term ``work assignment'' in this rule includes other
similar tasking documents such as a delivery order or a technical
direction document. Our intent is for contractors to report potential
conflicts prior to beginning work on a contract or a work assignment
issued under a contract.
2. Immediate reporting of whether a conflict of interest exists.
Some commenters objected to EPA's requiring the immediate reporting of
whether or not a conflict of interest exists and recommended that such
reporting not be required until ten days after a work assignment is
issued. Some also pointed out the difficulty in responding without
knowledge of future assignments and access to reliable data on PRPs.
We disagree. Conflicts of interest must be identified immediately
so we can avoid issuing work when a conflict exists. We recognize that
contractors may not always have sufficient information to identify all
conflicts when work assignments are issued since PRPs are continually
being identified, but this should not delay a good faith disclosure of
any conflicts that can be identified prior to beginning work. Moreover,
in response to comments, the final rule does not require contractors to
certify regarding conflicts of interest related to work assignments
until 20 days after receipt of the work assignment. (See EPAAR
1552.212-71, Work Assignments, Alternate I.) Additionally, it should be
noted that in emergency situations contractors may begin work
immediately with notification to follow within five days.
3. Removal of Alternate I to paragraph (e). One commenter
recommended that Alternate I of paragraph (e) of the clause, which
applies to non-Superfund contracts, be removed. We disagree. Since the
types of work exempted from flow down in paragraph (e) are unlikely to
be performed in non-Superfund contracts, it would be confusing to
include this language in such contracts. In the event these types of
work are included in the contract, the Contracting Officer may
authorize exemption.
EPAAR 1552.209-73, Notification of Conflicts of Interest Regarding
Personnel, is added for Superfund contracts to ensure that contractors
notify the Contracting Officer of actual or potential personal
conflicts of interest prior to incurring costs for an employee where
the contractor is aware that the employee has a personal conflict of
interest. The clause also identifies specific subcontracts and
consultant agreements for which this clause is not required.
As a result of public comment, the following changes have been
made:
--The term ``apparent'' has been removed in response to comments that
the term is vague and difficult to define.
--Paragraph (a) has been modified slightly to make the language clearer
that the provisions with regard to employee personnel performing under
this contract shall apply until the earlier ``of the following two
dates: the termination date of the affected employee(s) or the
expiration date of this contract.''
--Paragraph (b) has been rewritten to clarify that a contractor is
responsible for reporting personal conflicts of interest regarding its
subcontractor employees and consultants when such conflicts have been
reported to the contractor. This clarification is made in response to
public concern that a contractor is unlikely to have knowledge of the
personal conflicts of interest of its subcontractors' employees and
should not be held responsible for identifying such personal conflicts
of interest unless they have been brought to its attention.
--The prescription to this clause, paragraph (c)(2) of EPAAR 1509.508,
Solicitation provision and contract clauses, has been redesignated as
paragraph (b), EPAAR 1509.507-2, Contract clause, to conform with
recent numbering changes to FAR Subpart 9.5.
--The prescription language to this clause has also been changed to be
consistent with the prescription to the Organizational Conflict of
Interest Clause. The final prescription, paragraph (b), EPAAR 1509.507-
2 Contract clause, includes a small purchase limitation threshold.
Other comments and EPA's response include:
1. Personal conflict of interest certification and disclosure. A
number of commenters expressed concern that it is unfair and too
burdensome to require contractors to certify that all personal
conflicts had been reported. They stressed that since contractors have
to rely on their employees to report such conflicts that all that
should be required is a good faith effort to obtain such information.
Some requested that disclosure be limited to those personal conflicts
of which the contractor has knowledge. A concern was also raised that
prime contractors should not be put in a position to certify that there
are no personal conflicts of interest regarding subcontractor
employees.
We agree and have eliminated the personal conflict of interest
certification that was included as part of the annual certification and
the work plan/work assignment certification in the proposed rule. Under
the final rule, all that contractors must certify, as part of either a
work assignment or annual conflict of interest certification, is that
they have informed their employees, working under the requirements of
the work assignment or EPA contract, of their obligation to report
organizational and personal conflicts of interest. (See EPAAR 1552.212-
71, Work Assignments. Alternate I, and EPAAR 1552.210-80, Annual
Certification.) When a contractor has been informed of a personal
conflict, either by an employee or a subcontractor, or has knowledge of
such a conflict, it should then report this to the EPA Contracting
Officer.
2. Applicability of Privacy Act of 1974 and collection of records.
One commenter raised concern that this clause could have the effect of
requiring contractors to develop and maintain ``systems of records [as
defined in the Privacy Act of 1974 (5 U.S.C. 552a)] on individuals on
behalf of the agency to accomplish an agency function.'' Commenters
also stated that the systems of records needed would be excessively
burdensome. Some also expressed concern about the flow down provisions
of the clause to subcontractors in terms of records and the use of this
material at the prime contractor level.
It is not EPA's intention to require contractors or their
subcontractors to keep records tracking the personal conflicts
individual employees may have, nor is it our intention that prime
contractors keep personal conflict of interest records of their
subcontractors. Such records are not necessary to comply with our
reporting requirements. EPA's intent is to minimize any paperwork and
administrative burden by having both prime contractors and
subcontractors make their employees aware of the sensitivity and
importance of conflict of interest when working on EPA projects and to
place with their employees the responsibility for identifying
conflicts. When the contractor is informed of a personal conflict, it
should then report the conflict to EPA. When a personal conflict would
arise at the subcontractor level, the subcontractor would notify the
prime contractor of the conflict of interest, along with a description
of actions taken to avoid, mitigate, or neutralize the conflict. The
prime contractor would in turn notify EPA. If subcontractor information
is sensitive, the prime contractor will consult with the Contracting
Officer to determine a procedure that will allow the prime contractor
to fulfill the conditions of the contract and simultaneously providing
protection for the information.
3. Ownership of stock and objectivity of individuals. One commenter
suggested that without criteria about ownership of stock or the
knowledge about the psychology of individuals, the concept of personal
conflict of interest is impossible to define in practice. We recognize
that analysis of conflict situations may be difficult, and there are no
objective criteria that can address every situation that might arise.
The critical test that a contractor must use regarding any potential
conflict is whether a conflict exists which would impair the person's
objectivity in performing the work under an EPA contract.
4. Limiting disclosure requirements to key project personnel. Some
commenters stated that the proposed clause was too broad and should
apply to key personnel and not to personnel, such as clerical or
accounting employees, who have no influence over work on a project.
Some commenters connected this requirement to the system of records
issue previously addressed, to demonstrate the prohibitive expense
associated with the notification requirement by all personnel.
EPA has carefully considered exempting certain personnel working
under an EPA contract from the requirements of the clause and has
decided not to change the clause which extends the notification
requirements to all personnel performing work under an EPA contract. We
do not agree that employees below the level of ``key personnel'' do not
contribute to and influence work on EPA projects. One cannot assume
that personnel will always perform tasks which are limited to their
generic job categories, and that such employees never have access to
sensitive information and never exercise discretion that may impact
work performed for EPA. The final rule simply requires that a
contractor inform its employees about their responsibility to report
conflicts of interest. This process is a significantly less burdensome
approach to managing personal conflicts of interest. The development or
maintenance of a system of records about a contractor's employees is
not necessary to comply with the requirements of the Notification of
Conflicts of Interest Regarding Personnel clause. Therefore, the
concern about the expense associated with a system of records is not
central to the issue of which personnel would be subject to the
provisions of the clause.
5. Conflict of interest applied to employee level. One commenter
stated that it is not clear why EPA is applying conflict of interest
rules at the individual employee level and that the regulation should
clarify how the ``objectivity/bias'' rule could be compromised at this
level.
Throughout this rule, we have emphasized the special nature of
Superfund work and the importance of ensuring integrity of work at
sites so that the enforcement actions are not jeopardized. We believe
that a contractor employee with a personal conflict of interest that
impaired his objectivity in performing work for EPA could impact
Superfund work. Persons working on our contracts must be able to render
impartial assistance so that the integrity of the work product is not
questioned. For example, if a contractor employee performed work for
EPA at a site on which the employee had performed work for a PRP, and
the individual was called upon to testify in court to support prior
actions taken by the PRP, as well as to testify to support actions by
the EPA, the credibility of the employee's testimony may be questioned.
Moreover, a contractor employee with a conflict of interest stemming
from a relationship with a PRP at a site could pose an unacceptable
risk of disclosure of sensitive information that could impact cost
recovery strategy or other enforcement action regarding the site. All
we require is that personal conflicts of interest be reported so that
we have the opportunity to avoid, mitigate, or neutralize conflicts
that may jeopardize our programs.
6. Relationships covered by personal conflict of interest clause.
One commenter requested a definition concerning the types of
``relationships'' that might be covered by the personal conflict of
interest clause. ``Relationships'' may include personal, financial or
business affiliations/connections which would impair a person's
objectivity in performing the contract work.
7. Individual ownership of stock and mutual funds. One commenter
pointed out that the term ``relationship'' in this clause can be
interpreted either narrowly or broadly, and asked how EPA views the
ownership of stock in an entity or the owning of shares in a mutual
fund which owns stock in the entity.
Since each situation is different and should be examined on a case-
by-case basis, it is not appropriate to establish a position on whether
certain ownership of stock in an entity would or would not create a
conflict. We would generally view substantial ownership of stock in an
entity as having a higher conflict of interest risk than the more
passive investment in a mutual fund which normally conducts
transactions without the active participation of the shareholders.
However, specialized mutual funds may exist which invest in a very
narrow group of stocks. Therefore, each situation should be considered
on its own merits.
8. Notification to the Project Officer and to the Contracting
Officer. One commenter stated that notification to the EPA Project
Officer and to the Contracting Officer is redundant and unnecessary and
that notification to the Contracting Officer should suffice. We have
reviewed this recommendation and have decided to retain notification to
the Project Officer. Personal conflicts can have an immediate impact
upon work that is performed. Notification directly to the Project
Officer will expedite the EPA response time in avoiding mitigating, or
neutralizing such conflicts which would be beneficial to both the
Agency and the contractor.
9. Remedies for non-disclosure. One commenter stated that the rule
does not identify what remedies, if any, would be available to the
Government in the event that EPA concludes that a personal conflict of
interest was not disclosed by a contractor. The commenter further
stated that appropriate action referenced in the clause could only be
termination for convenience. We disagree. Remedies may include
avoidance, mitigation, and neutralization of the conflict as well as
any other remedies which would be permitted under the terms and
conditions of the contract.
EPAAR 1552.209-74, Limitation of Future Contracting, is added for
Superfund contracts to ensure that contractors do not perform work that
may conflict with work performed for EPA and jeopardize Superfund
enforcement actions. The clause identifies work which poses a high risk
of conflict of interest and requires contractors to request approval
from EPA prior to entering into such contracts. Alternates are provided
that are tailored to specific types of Superfund contracts. The basic
Limitation of Future Contracting (LOFC) clause is for Alternative
Remedial Contracting Strategy (ARCS) contracts, and alternates are for
Time Critical Rapid Response (TCRR), Technical Assistance Team (TAT),
Environmental Services Assistant Team (ESAT), Technical Enforcement
Support (TES), Headquarters Support, and Site Specific contracts.
Depending on the type of EPA work performed, this limitation may extend
for the period of the contract or from three to seven years after
completion of a work assignment. The clause does not prevent
contractors from submitting bids/proposals for outside work prior to
receiving Contracting Officer approval. However, the clause provides
that any bids/proposals are submitted at the contractor's own risk and
expense. This clause must also be placed in subcontract and consultant
agreements except for specific types of services listed in the clause
unless otherwise authorized by the Contracting Officer.
As a result of public comment, including recommendations that the
applicability of the LOFC clause and its alternates be clarified, the
following changes have been made:
--The prescription to this clause, paragraph (c)(3) of EPAAR 1509.508,
Solicitation provision and contract clauses, has been redesignated as
paragraph (c), EPAAR 1509.507-2, Contract clause, to conform with
recent numbering changes to FAR Subpart 9.5.
--The prescription to this clause has also been changed to be
consistent with the prescription for the Organizational Conflict of
Interest Clause. The final prescription, paragraph (c), EPAAR 1509.507-
2, Contract clause, includes a small purchase limitation threshold.
--In the basic LOFC clause (ARCS) and all alternates except Alternative
VI, two additional paragraphs have been added to set forth procedures
for an expedited response to an initial LOFC request and for review of
an adverse determination. For Alternative VI, three additional
paragraphs have been added to set forth procedures for a request for
waiver or modification of the clause, for an expedited response to an
initial future contracting request, and for review of an LOFC adverse
determination. This responds to recommendations that we identify a
review process available for contractors who may question an EPA
Contracting Officer's decision on an LOFC request.
--In the basic LOFC clause (ARCS) and all alternates, all references to
``zone'' have been changed to ``assigned geographical area.'' This adds
clarity by reflecting the new terminology in the Superfund program.
--In the basic LOFC Clause (ARCS) and all alternates, the type of
Superfund contract covered by each clause is now added at the top of
each clause. This reduces confusion in reading the text.
--Alternate I has been renamed ``Time Critical Rapid Response'' (TCRR),
and we have noted in the clause prescription that this term includes
TCRR, Emergency Response Cleanup Services (ERCS) and other emergency
type solicitations and contracts. This change has been made to clarify
the clause's applicability.
--In Alternate I (TCRR), Alternate II (TAT) and Alternate V
(Headquarters Support), all references to ERCS have been changed to
TCRR.
--The Field Investigative Team (FIT) Alternate LOFC clause has been
removed since such work is to be included in the ARCS Superfund
contracts.
--All alternates to this clause have been renumbered to reflect the
removal of the FIT Alternate. All further references will be to the new
numbers of the rule.
--Basic LOFC clause (ARCS) has been changed to reflect the inclusion of
FIT work in ARCS contracts. Since the proposed rule's FIT LOFC clause
is less restrictive than the basic LOFC clause (ARCS), language
specifically tailored to FIT work in ARCS contracts is added to
minimize contractor burden.
--Basic LOFC clause (ARCS) paragraph (a) has been changed in accordance
with comments recommending it be consistent with paragraph (a) of its
alternates, which include ``free to compete for contracts on an equal
basis'' language. All further references will be to the new paragraph
(a).
--Basic LOFC clause (ARCS) paragraphs have been relettered to reflect
the change in paragraph (a) and the inclusion of a paragraph addressing
FIT work. Paragraphs (a)(1) and (a)(2) are redesignated as paragraphs
(b) and (c). The new FIT paragraph is designated as paragraph (d).
Paragraphs previously designated as (b), (c) and (d) have been
redesignated as paragraphs (e), (f), and (g). All further references
will be to the new lettering of the final clause.
--In the basic LOFC clause (ARCS) and all alternates, paragraph (a)
language has been changed from ``It is agreed by the parties to this
contract* * *'' to ``The parties to this contract agree* * *'' This
minor change was made so the LOFC clause language conforms with the use
of the active voice in other EPAAR clauses.
--Basic LOFC clause (ARCS) paragraphs (c) and (d), parallel paragraphs
(c) of Alternates I (TCRR) and II (TAT) and (d) of Alternate IV (TES),
and similar paragraph (c) of Alternate VI (Site Specific) have been
changed as follows:
(1) These paragraphs have been rewritten to emphasize that all that
is required is that contractors obtain approval prior to entering into
a contract with respect to the type of work identified. This gives EPA
the opportunity to evaluate such requests on a case-by-case basis and
limit its contractors from performing work which would jeopardize work
performed for EPA or ongoing enforcement actions. This change was made
in response to public concern that this paragraph absolutely prohibited
the nature of work described.
(2) In further response to public comment on these paragraphs,
``other than EPA'' has been added after ``any party'' to clarify that
this clause does not cover future work a contractor may enter into for
EPA.
--Basic LOFC clause (ARCS) paragraphs (c) and (d), and parallel
paragraphs (c) of Alternates I (TCRR) and II (TAT) and (d) of Alternate
IV (TES) have also been modified in response to comments questioning
the scope of the limitation. We have clarified that all that is
required is reporting of: ``(1) Any work relating to CERCLA activities
which pertain to a site where the Contractor previously performed work
for EPA under this contract; or (2) any work that may jeopardize CERCLA
enforcement actions which pertain to a site where the Contractor
previously performed work for the EPA under this contract.'' We are
concerned with evaluating future contractor work related to Superfund
work performed for EPA on a site to ensure it does not jeopardize
ongoing EPA Superfund work or enforcement action.
--Alternate VI (Site Specific) paragraph (c), which contains similar
language addressing Site Specific contracts, has also been modified in
response to comments questioning its scope. We have clarified that all
that is required is reporting of: ``(1) Any work relating to CERCLA
activities which pertain to the site where the Contractor previously
performed work for EPA under this contract; or (2) any work that may
jeopardize CERCLA enforcement actions which pertain to the site where
the Contractor previously performed work for the EPA under this
contract.'' We are concerned with evaluating future contractor work
related to Superfund work performed for EPA on the site covered by its
contract to ensure it does not jeopardize ongoing EPA Superfund work or
enforcement action.
--Alternate I (TCRR) paragraph (c) and parallel paragraphs (c) of
Alternate II (TAT) and (d) of Alternate IV (TES) have further been
revised. The language ``during the life of the contract'' and ``after
completion of the contract'' has been changed to be consistent with the
basic LOFC clause (ARCS), which tracks by tasking document, not by
contract. This change is made in response to commenters'
recommendations. It substantially minimizes the burden to contractors
by reducing the time period for which the contractor must request
approval for future work.
The new language in paragraph (c) of Alternate I (TCRR) is ``during
the life of the delivery order or tasking document'' and ``after the
completion of the delivery order or tasking document''. The new
language in paragraph (c) of Alternate II (TAT) is ``during the life of
the technical direction document'' and ``after the completion of the
technical direction document''. The language in paragraph (d) of
Alternate IV (TES) is now ``during the life of the work assignment''
and ``after completion of the work assignment''.
--Basic LOFC clause (ARCS) paragraph (f) and identical paragraphs (f)
of Alternates I (TCRR), II (TAT), IV (TES), VI (Site Specific), (c) of
Alternate III (ESAT) and (e) of Alternate V (Headquarters Support) have
been modified. The language ``agrees not to use it to compete with such
companies'' is removed. This change was made to clarify that it is not
EPA's intent to restrict its contractors from using their experience
gained in working on EPA contracts from competing with other companies.
--Alternate I (TCRR) paragraph (d)(3), Alternate II (TAT) paragraph
(d)(3), and Alternate VI (Site Specific) paragraph (d)(2) have been
revised to include ``CERCLA administrative order''. This modification
is made in response to public comment that we cover contracts let prior
to final issuance of a CERCLA or Resource Conservation and Recovery Act
(RCRA) consent decree or court order.
--Alternate I (TCRR) paragraphs (d)(1) and (d)(2) language describing
TAT work is changed from ``Technical Assistance Team activities (TAT
contracts)'' to ``Technical Assistance Team (TAT) type activities
(e.g., TAT contracts)''. This change clarifies that this provision
applies to TAT type activities and that ``TAT contracts'' is an example
of such work.
--Alternate VI (Site Specific) paragraph (d)(1) language is also
changed from ``Technical Assistance Team activities (TAT contracts)''
to ``Technical Assistance Team (TAT) type activities (e.g., TAT
contracts)''. This change clarifies that this provision applies to TAT
type activities and that ``TAT contracts'' is an example of such work.
--In Alternate I (TCRR), paragraph (g), ``treatability studies'' has
been added to the flow down exemptions to make this Alternate clause
consistent with all other LOFC clauses in the rule. In addition,
because the term ``treatability studies'' is not routinely used in TCRR
contracts, we have noted in the prescription that this term includes
``TCRR pilot scale studies.''
--In Alternate IV (TES), we have retained the clause's paragraph (b)
language instead of choosing the proposed rule's option to paragraph
(b). This responds to public comment that the initial paragraph (b) is
more cost effective and that implementing the other proposed option
would be extremely cumbersome and expensive. In addition, we have added
``during the performance period of this contract'' at the beginning of
the paragraph in response to comments requesting we clarify the period
of applicability.
--In Alternate V (Headquarters Support), paragraph (c), we have added
``unless otherwise authorized by the Contracting Officer.'' This change
is made in response to public comments expressing concern that there
may be circumstances where the nature of the work under such contracts
would not pose a significant conflict for the EPA, and this clause
should not categorically exempt contractors from performing work
without examining requests on a case-by-case basis. We agree that the
Contracting Officer shall make conflict of interest determinations on a
case-by-case basis and this change reflects our intent. The objective
of this and all of the LOFC clauses is to identify work which we
believe may pose significant risk of conflict of interest and provide
EPA the opportunity to avoid conflicts that would damage the integrity
of the Superfund program.
In Alternate V (Headquarters Support) paragraph (c), FIT and
Remedial Engineering Management (REM) contracts are removed from the
list of examples of contracts which include response action work.
Although FIT and REM contracts included response action work, it is no
longer appropriate to include them as examples since these contracts
are being phased out of the Superfund program.
Other public comments and EPA's response include:
1. Applicability of LOFC clauses to types of work. One commenter
requested that the LOFC clauses should be unambiguously keyed to types
of work since the nature of work in different contract types overlap.
We disagree. The basic LOFC clause and each alternate are identified by
the Superfund program contract type, i.e., ARCS, TCRR, TAT, ESAT, TES,
Headquarters Support, and Site Specific. These are the standard terms
used in the Superfund program to describe types of contracts by nature
of Superfund work. To key the LOFC clauses to other types of work would
be confusing, ambiguous and difficult to track both for contractors and
the EPA.
2. Different time periods for LOFC clause and alternates. Several
commenters expressed concern that there was no justification provided
for the different time periods and suggested that EPA make the
reporting time frames in the LOFC clauses consistent. Additionally,
commenters stated the reporting requirements should either be
applicable after completion of the work assignment or reporting should
be limited to the duration of the contract. Still other commenters
suggested the reporting period should be no longer than three years
after work assignment completion. And other commenters stated the
reporting requirement after contract completion was overly restrictive
if it is to be applied to any new contracting activity but would be
less objectionable if site references were restricted to only National
Priorities List (NPL) sites.
We agree reporting requirements for work performed at a site should
be limited to a period of time after completion of the work assignment
rather than after contract completion and have made the changes in the
appropriate LOFC clauses. Each LOFC clause has been carefully studied
and specifically tailored to fit each program with appropriate time
periods based on the nature of work performed under the contract and
the risk of conflict. Because each of the different programs requiring
an LOFC clause has a different role in Superfund cleanup and
enforcement, it is necessary for some programs to have different
reporting requirements. The establishment of each time period was made
after extensive discussion of program and enforcement issues. Every
attempt was made, however, to be as consistent as possible without
jeopardizing the Superfund program.
We disagree that reporting requirements should be limited to the
duration of the contract or for only three years. These time limits
would not adequately protect the interests of the Superfund program.
Because environmental enforcement cases are averaging seven years from
start to completion, it would be very damaging to EPA's enforcement
cases if an EPA contractor could at will perform related work for a PRP
at or relating to the same site after it had performed work for EPA.
For example, the TES reporting requirement of seven years is necessary
to avoid the potential for compromising highly sensitive enforcement
support information. To reduce this time frame would significantly
jeopardize our ability to enforce CERCLA. Therefore, to prevent such
occurrences, it is absolutely necessary for EPA to have procedures in
place which require contractors to request approval before entering
into future work with PRPs that could negatively impact the work
performed for EPA.
3. Limit LOFC clause to NPL sites. Several commenters recommended
that the LOFC clause and its alternates apply only to NPL sites. Some
expressed concern whether ``sites'' includes Federal Facilities and
requested clarification.
We disagree that the clause should be limited to NPL sites and
stress that the rule makes no distinction between private party sites
and Federal Facilities. Restricting the clause's applicability to work
on NPL sites would provide insufficient protection to the Superfund
program. The NPL is a priority listing of hazardous waste sites which
have been identified for possible long-term remedial cleanup action
under Superfund. Most sites are not placed on the NPL until they have
been formally evaluated and meet a Hazard Ranking System threshold.
Contractors perform emergency Superfund work and pre-remedial work for
EPA on many hazardous waste sites that may or may not later be placed
on the NPL and also provide support for enforcement activities at non-
NPL sites. It is important to protect such work from conflicts of
interest particularly since we may initiate cost recovery action
against PRPs for cleanup work at sites that are not yet on the NPL and
may never be placed on the NPL. Moreover, work an EPA contractor may
wish to perform for a private party on a non-NPL site may directly
conflict with work performed for EPA and jeopardize CERCLA enforcement
activities. Therefore, the LOFC clause intentionally makes no
distinction between NPL and non-NPL site work in its reporting
requirements.
4. ``Any party''. Some commenters expressed concern that the term
``any party'' used in the LOFC clause was too broad, and stated that
the term could be interpreted to include another Federal agency. We
disagree that the term is too broad and it is our intent that it
include Federal agencies. The rule makes no distinction between private
and public sector work in its reporting requirements. Contractors must
report work which is identified as having a high risk of conflict
whether it is for a private party or a Federal agency.
5. ``Jeopardize CERCLA enforcement actions''. One commenter
recommended that the language in paragraph (c) and (d) of the basic
LOFC clause (ARCS) and the parallel language in the Alternates be
removed since it is difficult for contractors to determine whether
proposed actions will jeopardize CERCLA enforcement actions. We
disagree with this recommendation. The language is included to require
contractors to request approval from the EPA Contracting Officer before
entering into a contract for work which may damage our Superfund
enforcement actions so that EPA has the opportunity to protect its
enforcement actions from prejudice. When a contractor believes that
there is a risk that work may jeopardize CERCLA enforcement actions,
the contractor shall submit a request to the EPA Contracting Officer
who will make the determination.
6. Define ``CERCLA activities''. Several commenters requested that
we define ``CERCLA activities'' and one commenter specifically
requested that we exempt from the definition activities under Sections
312 and 313 of the Superfund Amendments and Reauthorization Act of 1986
(SARA).
The scope of CERCLA activities is set out in Section 101 of CERCLA.
``CERCLA activities'' includes the terms ``remove or removal'' the
terms ``remedy or remedial action'' and the terms ``respond or
response'' as defined in Sections 101 (23), (24) and (25). Activities
under Sections 312 and 313 of SARA are by definition excluded from the
term ``CERCLA activities''. Sections 312 and 313 are reporting
requirements in SARA Title III, ``Emergency Planning and Community
Right-To-Know Act of 1986'', which is not part of CERCLA.
7. LOFC and unrelated sites. Commenters stated that the LOFC
clauses should not be broadened but should only cover a site where a
contractor previously worked for EPA. One commenter stated that EPA had
no authority to deny private contracting on an unrelated site. Another
commenter stated that it would be almost impossible to administer or
enforce the abstract concept of doing CERCLA work for a private client
at a given site where work had not been performed before.
The first comment refers to the LOFC clause for ARCS and its
alternates for TCRR, TAT, TES, and Site Specific contracts. Each of
these clauses contains restrictions pertaining to sites where the
contractor previously worked for EPA and on any work that may
jeopardize CERCLA enforcement actions which pertain to a site where the
contractor previously performed work for the EPA under the contract.
This limitation is required because work on related sites could
adversely affect EPA's CERCLA enforcement action at a site where the
contractor previously performed work for EPA. The LOFC alternates for
TCRR, TAT and TES contain limitations for geographic areas. These
limitations apply only during the period of performance of the
contract. They are included in the TCRR and TAT clauses because these
two types of work cannot be performed by the same contractor in the
same geographic area because the risk of a conflict occurring is too
great. In the TES contracts, the geographic limitation on remedial and
implementation work is necessary because of the risk associated with
extremely sensitive litigation information, the unauthorized disclosure
of which would jeopardize EPA's enforcement actions.
The second commenter uses the term ``unrelated sites'' in the
comment concerning restrictions on private contracting. We are unclear
as to the commenter's definition of this term. EPA's LOFC clause and
alternates limit CERCLA work which pertains to a site, or limit work
that may jeopardize enforcement actions which pertain to a site, where
the contractor previously performed work for EPA under the contract.
The only other site limitations are those in the TCRR, TAT and TES
Alternates which pertain to sites within the geographic area of the
contract. There are no restrictions to sites outside these limitations.
We agree with the commenter that stated that it would be difficult
to administer or enforce the limitations that pertain to the
performance of CERCLA work or work which jeopardizes enforcement
actions at sites where a contractor has not performed previous work for
EPA. However, EPA's intent in the LOFC clause is not to require
excessive administration but rather to have contractors rely on
information of which they are aware at the time they consider entering
into a contract for work at other sites. No extensive searches,
certifications, or control systems associated with administration are
required.
8. Basic LOFC clause (ARCS) paragraphs (a) and (b)--Contractors
right to compete. One commenter suggested that the clause include the
same ``free to compete on an equal basis'' language in the alternate
LOFC clauses. The commenter further stated that the clauses require
clarification that, when a contractor has prepared the statement of
work or other solicitation package for a private party, the restriction
of the clause does not apply. Another commenter requested that the
clause be expanded to provide that any contractor that contributes to
the development of the statement of work or the solicitation package
should be ineligible to participate in follow-on Superfund remedial
action projects.
We agree with the recommendation that the clause be changed to be
consistent with its alternates, which include ``free to compete on an
equal basis'' language, and have made this change in the final clause
language. We also agree with the commenter's conclusion that the
restriction when a contractor has prepared a statement of work or
solicitation package under the terms and conditions of a Government
contract, as either a prime contractor or subcontractor, would not
apply to work performed for private contractors. EPA does not generate
statements of work or solicitations for the use and benefit of a
private party. Therefore, no clarification to the clause is necessary.
The ARCS contracts provide for a contractor's involvement with the
complete cleanup of a site from the beginning to the end, including
follow-on remedial action projects. The LOFC clause for the ARCS
contracts has been specifically written to accommodate the special
nature of the ARCS program to take advantage of a contractor's
expertise and keep the competitive base as open as possible, especially
when EPA has purchased the technology. Therefore, we disagree with the
comment that the clause should be expanded to make any contractors,
which participate in the development of the statement of work or
solicitation package, ineligible from participating in such activities.
To make ARCS contractors ineligible would be overly restrictive and
disruptive to the Superfund program.
9. Basic LOFC clause (ARCS) paragraph (c)--Broaden limitation. One
commenter recommended that we broaden this paragraph to exclude a
contractor from working for any party on any contract for the types of
work specified. We disagree. Such a change would be too restrictive to
ARCS contractors.
10. Alternate I (TCRR) paragraph (d)(3)--Applicability of TAT
restriction. One commenter recommended that the clause be clarified to
indicate the TAT restriction in the TCRR clause only applies to TAT
type contracts offered by the Federal Government because if it applied
to both Government and the private sector it would be overly broad and
restrictive.
We disagree. The clause as written clearly requires TCRR
contractors to request approval prior to performing TAT type
activities, regardless of whether another Federal agency or a private
party issues the contract. A TCRR contractor is required to provide
cleanup services on numerous sites within its respective geographic
area and this work often involves work performed in ``emergency''
situations. It is vital that TCRR contractors be free of conflicts to
perform work for the Agency. Therefore, it is necessary to require TCRR
contractors to request approval before performing any TAT type
activities for any other party within its respective geographic area
that result from a CERCLA administrative order, a CERCLA or RCRA
consent decree or a court order.
11. Alternate II (TAT) paragraph (d)(2)--Expand competition
restriction. One commenter requested we delete the language ``Unless an
individual design for the site has been prepared by a third party''.
The commenter contended that any knowledge of a site is critical and a
contractor having access to a site over a long period of time would be
in a better position to plan and price for unforeseen contingencies.
Therefore, this would be patently unfair to other contractors.
We disagree. If the clause were to be modified as suggested, it
would have the opposite effect by making the clause overly restrictive
for contractors performing TAT work. Although such a contractor may
have gained some knowledge about a site while working there, it would
not necessarily be an unfair competitive advantage when a third party
has prepared the design.
12. Alternate II (TAT) paragraph (d)(2)--Inability to plan future
TAT work. One commenter suggested that this paragraph not include TAT
work that a contractor plans to perform because contractors have no
role in determining future TAT work and TAT work dealing with
emergencies cannot be planned.
We disagree. In many cases, TAT work is planned and advance site
information is provided to contractors by EPA. Therefore, the final
clause includes the requirement that a contractor shall not perform
remedial construction work on a site where it has knowledge that it
will be performing TAT work for EPA, unless otherwise authorized by the
EPA Contracting Officer.
13. Alternate II (TAT) paragraph (d)(3)--Site specific limitations.
One commenter suggested the restriction on TAT contractors be site
specific rather than a restriction covering the entire zone. The
commenter further stated that alternate zone contractors should be used
if conflicts arise.
We disagree. TAT contracts are established to provide TAT type
activities, including TCRR oversight, on potentially all sites within
the geographic area. If contractors perform work for PRPs on sites
within the geographic area, and if EPA were to require oversight on
these sites, EPA's ability to plan and promptly commence oversight work
would be significantly impaired. Geographic crossovers are possible in
a few unusual circumstances. However, the administrative cost and
additional time associated with this process for a number of sites pose
too large a risk to the effective operation of the TAT program.
14. Alternate III (ESAT)--LOFC applicability to ESAT. One commenter
recommended we delete this Alternate since an LOFC clause is not
appropriate for ESAT work. We disagree. This clause contains the
limitation on future performance where the contractor develops the
specifications or statement of work under a Superfund contract. This
limitation is common to all Superfund contracts including ESAT.
15. Alternate IV (TES) paragraph (b)--Remove or limit restriction.
One commenter suggested that the TES LOFC clause be limited to CERCLA
activities by a private party at the NPL sites where work was performed
under TES contracts. The commenter stated that requiring future
contracting requests for any work of a remedial nature within the
regions covered by a TES contract is arbitrary and inconsistent with
the requirements of actual site work required under other EPA
contracts.
It is our intent for paragraph (b) to cover the entire geographic
area covered by the contract. The TES clause coverage is different than
the other clauses because of the special sensitivity of TES work which
includes support for enforcement cases. We have seriously considered
the recommendation to change this language. However, because of the
high sensitivity of enforcement work, we believe this provision is
necessary to best protect the Agency's enforcement and cost recovery
cases. Moreover, because of the sensitivity of all Superfund
enforcement work, the clause cannot just be limited to CERCLA
activities at NPL sites.
16. Alternate IV (TES) paragraph (d)--Broaden TES LOFC restriction.
One commenter recommended TES contractors should be absolutely
prohibited from working for private sector PRPs in order to avoid the
potential for compromising enforcement related data. Although we agree
that TES work is highly sensitive, we believe the rule provides
adequate measures to protect EPA's interests. To broaden the LOFC
clause would be too restrictive to competition.
17. Alternate V (Headquarters Support) paragraph (c)--Response
action work. Several commenters expressed concern about the vagueness
of the term ``response action work'' and asked if it had the same
meaning as the SARA definition of ``response action contract''. To
clarify the term ``response action work'', we included a number of
examples in the proposed and the final clause. The examples in the
final clause include ARCS, TCRR, TAT, and TES contracts. It is our
intention that ``response action work'' have the same definition as
``response action contract'' provided in CERCLA Section 119, as amended
by SARA. However, we have included, in the prescription to this clause,
authorization for the Contracting Officer to modify this paragraph to
reflect any unique limitations applicable to the program requirements.
18. Alternate VI (Site Specific)--Site specific contracts for
construction or other non-discretionary work. Some commenters assumed
that this clause would primarily affect construction contractors and
recommended that EPA not apply this clause to site specific contracts
which are for construction. Another commenter suggested that work which
a contractor believes is non-discretionary should also be exempted.
We disagree. When a solicitation, prime contract or work assignment
is issued solely for construction work or for work that the contractor
believes is non-discretionary, the offeror or contractor can request
that the LOFC clause be modified or waived. The Contracting Officer has
the authority to approve the request if the work does not pose a high
risk of conflict to the Superfund program. Under Alternate VI, to
ensure that prime contractors clearly understand they have the option
of requesting a waiver from or modification of this clause when non-
discretionary work is performed, language has been added to Alternate
VI, describing how to obtain a waiver or modification from the
Contracting Officer.
19. Alternate VI (Site Specific) paragraph (b)--Site
specifications. One commenter suggested that the words ``for the site''
be inserted in paragraph (b) of the clause so that the clause would
only apply to EPA solicitations for the site. We disagree.
Specifications could be developed under a site specific contract which
may be included in other EPA solicitations.
EPAAR 1552.210-80, Annual Certification, is added to require all
Superfund contractors that do not provide other EPA conflict of
interest certifications during contract performance to certify annually
that all organizational conflicts of interest have been reported to
EPA, and contractor employees have been informed of their obligation to
report conflicts.
As a result of public comment, the following changes are made to
the clause and its prescription:
--The proposed annual certification requirement is changed from
applying to all Superfund contracts to only contracts where the
contract does not include the submission of other conflict of interest
certifications during contract performance. Superfund contracts
requiring annual certification include: Site Specific contracts and the
Contract Laboratory Program (CLP) and the Sample Management Office
(SMO) contracts. This change is made in response to comments that
multiple certification requirements are duplicative and overburdensome.
--To reduce reporting requirements, the update of conflict of interest
plan requirement, which was included in the proposed rule's clause,
EPAAR 1552.210-78, Annual Certification and Update of Conflict of
Interest Plan, has been deleted. Its prescription has also been removed
from the proposed rule's prescription, EPAAR 1510.011-78, Annual
Certification and Update of Conflict of Interest Plan.
--The annual certification requirement in the proposed rule's EPAAR
1552.210-78 and the prescription EPAAR 1510.011-78 is designated, under
the final rule, as EPAAR 1552.210-80, Annual Certification, and its
prescription is EPAAR 1510.011-80, Annual Certification.
--The requirement that contractors certify annually that all personal
conflicts of interest have been reported is changed to ``the Contractor
shall certify that it has informed its personnel who perform work under
EPA contracts or relating to EPA contracts of their obligation to
report personal and organizational conflicts of interest to the
contractors.'' This change was made in response to public comments that
it is unfair and overburdensome to require contractors to certify that
personal conflicts have been reported since contractors have to rely on
their personnel to report such conflicts.
--The term ``apparent'' has been removed in response to comments that
the term is vague and difficult to define.
--The prescription to this clause has been changed to be consistent
with the prescription to the Organizational Conflict of Interest
Clause. The final prescription, EPAAR 1510.011-80, Annual
Certification, includes a small purchase limitation threshold.
Other comments and our response include:
1. Timing of submittal of annual certification. One comment
expressed concern that the timing of the annual certification should be
changed to a date certain or tied to a company's fiscal year calendar.
We retain the requirement that the annual certification cover a one
year period from time of award, and all subsequent certifications shall
cover successive annual periods thereafter. Such certification must be
received by the Contracting Officer no later than 45 days after the
close of the certification period covered. However, if a contractor has
sufficient justification to change the filing date, the contractor may
submit a request to the Contracting Officer who can consider the
request for an adjustment and has the authority to modify the contract
accordingly.
Other comments and our response include:
1. Clarification of conflict of interest plan, evaluation process
and confidential data. Some commenters recommended that we clarify what
should be in a conflict of interest plan and the evaluation process and
exclude confidential data. Conflict of interest plans are only required
for solicitations in which the Contracting Officer makes a
determination that a significant potential for conflict of interest
exists. Any requirements for conflict of interest plans and information
regarding their evaluation will be included in individual
solicitations. If any confidential information is provided, e.g.,
sensitive corporate structure information, the contractor should mark
it accordingly and it will be safeguarded to the full extent of the
law.
EPAAR 1552.212-71, Work Assignments, is amended to add two
alternate clauses to be used for all Superfund contracts which do not
require annual certifications. The alternate clauses require
contractors to certify within 20 days of receipt of a work assignment
that all actual or potential organizational conflicts of interest have
been reported to the Contracting Officer, or that no actual, or
potential organizational conflicts of interest exist. Where work
assignments are issued under a contract for work related to a site, a
contractor is only required to provide a certification for the first
work assignment issued for that site under the contract. In addition,
the clauses require a contractor to certify that its personnel who
perform work under this work assignment or relating to this work
assignment have been informed of their obligation to report personal
and organizational conflicts of interest.
In response to public comments the following changes have been
made:
--The work assignment certification requirement under the proposed rule
has been reduced from applying to all Superfund contracts to only
Superfund contracts that are not required to submit annual
certifications in accordance with EPAAR 1552.210-80. This change was
made in response to comments that the certification requirements were
overly burdensome and duplicative.
--The final rule's prescription to the work assignment clause,
paragraph (b) of EPAAR 1512.104, Contract clauses, reflects the
reduction in certification requirement by stating that the work
assignment certification provision is not used for contracts which
require annual conflict of interest certifications (e.g., Site Specific
contracts and the Contract Laboratory Program (CLP) and the Sample
Management Office (SMO) contracts).
--The number of work assignment certifications required has also been
reduced to minimize contractor burden. Where contracts include site
work, the final clause only requires contractors to provide a conflict
of interest certification for the first work assignment under the
contract issued for that site. For all subsequent work for that site,
under the contract, the contractor has a continuing obligation to
search and report any actual or potential conflicts but no additional
conflict of interest certifications are required. To reflect this
obligation, the certification includes a statement that the contractor
recognizes its continuing obligation to identify and report any actual
or potential conflict of interest arising during performance of this
work assignment or other work related to this site.
--The time of work assignment certification has been extended to 20
days after receipt of work assignment. This change was made in response
to comments that five days is insufficient time to search and certify.
--Alternate I affirmatively provides that a contractor must, as a
minimum requirement, search through its immediate past three years of
records prior to submitting its certification. Language has been added
to the clause to minimize any misunderstandings about how far back
contractors must search. Although contractors are only required to
affirmatively search back through the past three years of records,
contractors are always required to report any conflicts of which they
are aware.
--The requirement that a contractor certify that all personal conflicts
of interest have been reported has been removed. The final clause
requires a contractor to certify only that it has informed its
personnel who perform work under this work assignment or relating to
this work assignment of their obligation to report personal and
organizational conflicts of interest to the contractor. This change was
made in response to public comments that it is unfair and too
burdensome to require contractors to certify that personal conflicts
have been reported since contractors have to rely on their personnel to
report such conflicts and all that should be required is a good faith
effort to obtain such information.
--The term ``apparent'' has been removed from this clause in response
to comments that the term is vague and difficult to define.
--Alternate II to the Work Assignment clause provides for a transition
period for contractors who do not have three years of records to
search. The contractor will be required to search any records that it
has, until over time, three years of records are accumulated. The
contractor is still always required to report any conflicts of which it
is aware.
EPAAR 1552.227-76, Project Employee Confidentiality Agreement, is
added to ensure that EPA enforcement efforts under the Superfund
program are not damaged by contractor employees' release of information
which has either been provided to the contractor by the Government or
first generated under contract. Employees of contractors will be
prohibited from release of such information to any parties external to
EPA, the Department of Justice or the contractor without permission of
the EPA Contracting Officer. Superfund contractors will be required to
obtain confidentiality agreements from all employees working on
requirements under the contract. The contractor must also include the
clause in all subcontracts and consultant agreements unless
specifically excluded under this clause.
As a result of public comment, the following changes have been
made:
--``Including subcontractors and consultants'' is removed from
paragraph (a) in response to: (1) Comments that it is redundant because
of the mandatory flow down provision; and (2) commenters' mistaken
interpretation that the proposed clause required contractors to
maintain files for their subcontractors.
--The language in the prescription to this clause, EPAAR 1527.409
Solicitation provisions and contract clauses, has been changed to be
consistent with prescription for the Organizational Conflict of
Interest Clause. The final prescription includes a small purchase
limitation threshold.
Other comments and EPA's response include:
1. Exemption of lower level employees. Some commenters stated that
contractors' lower level employees should be exempted from the
requirement that contractors obtain confidentiality agreements from all
employees working under requirements of the EPA contract. We disagree.
Because of the sensitivity of Superfund work and the potential for
serious damage to enforcement efforts as a result of unauthorized
release of information at any level, we cannot exempt any employees
working under the requirements of the EPA contract. However, it is not
our intention to impose an undue hardship on our contractors. To comply
with this clause, it would suffice for contractors to obtain one non-
disclosure agreement from its employees who work on multiple EPA
contracts.
2. Scope of information. One commenter stated that it is
unrealistic to limit discussion of information already in the public
domain and one commenter stated that this clause should not preclude
disclosure of information routinely disclosed in the normal course of
business. We disagree. This clause's limitation is on data of a
sensitive nature provided by the Government or first generated during
contract performance. Such information should not be categorically
authorized for release. However, if a contractor believes such
information may be releasable, the contractor may, on a case-by-case
basis, request written permission from the EPA Contracting Officer to
disclose such information. Such requests will be carefully evaluated to
ensure adequate protection of sensitive information.
3. Liability for post-employment release of information. One
commenter expressed concern that contractors have no control over
employees after their employment and that EPA should make it clear that
contractors are not liable for employees who have left their
employment. We agree that contractors should not be held liable for
employees breaching confidentiality agreements after they have left the
firm. The intent of this clause is to have contractors obtain
confidentiality agreements from employees to ensure that employees are
aware of their obligation not to disclose sensitive information.
D. Executive Order 12866
Under Executive Order 12866, [58 FR 51735 (October 4, 1993)] the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines ``significant regulatory action'' as
one that is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
It has been determined that this rule is not a ``significant
regulatory action'' under the terms of Executive Order 12866 and is
therefore not subject to OMB review.
E. Paperwork Reduction Act
The information collection requirements in this rule have been
approved by OMB under the Paperwork Reduction Act, 44 U.S.C. 3501 et
seq. and have been assigned OMB control number 2030-0023.
Public reporting burden for this collection of information is
estimated to average 16 hours per response, including time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
Send comments regarding the burden estimate or any other aspect of
this collection of information, including suggestions for reducing this
burden to Chief, Information Policy Branch; EPA; 401 M Street SW.
(2136); Washington, DC 20460; and to the Office of Information and
Regulatory Affairs, Office of Management and Budget, Washington, DC
20530, marked ``Attention: Desk Officer for EPA.''
F. Regulatory Flexibility Act
The rule may have moderate economic impact upon a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq. The following regulatory
flexibility analysis has been prepared.
Regulatory Flexibility Analysis
Conflict of Interest
1. Purpose. The EPA is strengthening its existing Organizational
Conflict of Interest EPAAR Clause and adding additional coverage in the
EPAAR to guard against conflicts of interest in work performed under
Superfund contracts. Prime contractors, non-exempted subcontractors and
consultants working under EPA Superfund contracts will be required to
have employees working on requirements under contract sign
confidentiality agreements. Prime contractors will be required to:
notify EPA immediately of any conflicts of interest regarding
contractor or subcontractor personnel working on the EPA contract;
submit to EPA either a one time per site certification for work issued
under a work assignment or an annual certification concerning
disclosure of conflicts of interest; and seek Contracting Officer
approval of other work when such work might conflict with work
performed under an EPA contract.
2. Affected small entities. Small entities awarded EPA Superfund
contracts or small entities serving as subcontractors or consultants
under EPA Superfund contracts will be affected. Presently,
approximately 75 small entities are performing such contracts and
subcontracts. It is impossible to estimate the number of small
businesses that ultimately will receive EPA Superfund contracts or
serve as subcontractors or consultants under these contracts and,
thereby, be affected by this rule.
3. Description of projected reporting and recordkeeping
requirements. We estimate that businesses generally maintain data on
the work previously performed by the company in their normal business
practices which may also be used to prevent conflicts of interest. For
entities that maintain this data, there will be limited additional
costs associated with reviewing, evaluating, and reporting work
previously performed and future work being considered that may pose a
conflict of interest. EPA does not require any special type of system
to identify and report conflicts. Each contractor determines its own
procedures for searching and identifying conflicts of interest, and in
some cases, it may already have a process in place to identify
conflicts in its commercial business. An automated system to store and
retrieve information is not required in order to perform the functions
associated with a conflict of interest system. We anticipate that the
scope of a company's procedures would be commensurate with the
company's size and complexity, and for small businesses any system
should be less complex and detailed.
Since a significant portion of small business participation in EPA
programs occurs under subcontracts for classes of work which are exempt
under EPA's conflict of interest clauses, many small businesses will
not be affected by the provisions of this rule. Moreover, at any time,
a small business operating as either a prime contractor or a
subcontractor may request waiver of clause requirements for non-
discretionary work which poses a minimal risk of conflict of interest.
The total impact upon small business should be significantly less than
the impact upon large business.
Depending on the specific contract, contractors will either be
required to certify annually that all actual or potential conflicts of
interest have been reported to EPA during the preceding year of the
contract or certify on a work assignment basis for work first performed
at a site. The significant change to the final rule, in which
certifications have been reduced from three to one, results in a
substantial reduction in the total effort required to comply with the
requirements of this rule. Because small businesses generally have less
complex organizational structures and less data to maintain and search,
the burden associated with search and certification requirements for
small business should be substantially less than the burden applicable
to a large business.
EPA anticipates that any cost increases experienced by these
entities may be chargeable to Government contracts under the provisions
of FAR Part 31.
In addition to concerns about data and certification burden which
have been addressed above, a comment was submitted expressing concern
that responding to the questionnaire, which EPA included in a January
1990, memorandum regarding conflicts of interest, would add
significantly to the contractor burden. As stated in Part B of the
preamble to this rule, General Comments, this memorandum has been
superseded, and the questionnaire is not required. Another commenter
expressed concern that the burden associated with requests for future
contracting had not been considered in the calculation of burden. In
fact, the burden associated with requests for future contracting was
considered in this analysis and is reflected in the calculations
contained in the initial and final Information Collection Request.
4. Federal rules which may duplicate, overlap, or conflict with the
rule. The EPA reviewed the FAR coverage on organizational conflicts of
interest and rights in data, which this rule supplements.
The FAR requires Contracting Officers to identify and evaluate
potential organizational conflicts of interest before contract award
and to avoid, neutralize or mitigate significant potential conflicts.
This rule fulfills and is consistent with these requirements. In
addition, this rule will address limitations on a firm's other
contracting efforts during contract performance, and in some cases
after completion of the work assignment or other similar tasking
document, or after performance of the EPA work contract. The FAR also
recognizes that Federal agencies may restrict a contractor's right to
distribute or use data first produced in performance of a contract when
necessary in the furtherance of the agency mission objectives. The
rule's requirement for contractor employees working under Superfund
contracts to sign confidentiality agreements restricting release of
contract data and other information generally conforms to these FAR
requirements.
The EPA also reviewed FAR subpart 9.5 Organizational and Consultant
Conflicts of Interest which deals with conflict of interest standards
for advisory and assistance service contracts and marketing consultants
to contractors. The EPA rule specifically addresses EPA contracts and
subcontracts under the Superfund program. Although the FAR guidance and
the EPA rule have the same general objectives of identifying, avoiding
mitigating, and neutralizing conflicts of interest, the EPA provisions
include reporting requirements to ensure that conflicts of interest are
reviewed not only prior to contract award, but also during the period
of contract performance and after contract performance to ensure
enforcement actions are not jeopardized. It is only in this way that
EPA can examine whether a contractor's work efforts, which may be
initiated during the EPA contract performance period or in some cases
thereafter, may present an unacceptable risk to the Agency. This rule
does not duplicate, overlap, or conflict with other Federal rules.
5. Alternatives to the rule. EPA considered alternatives to the
final rule, such as establishing different compliance or reporting
requirements or simplifying the requirements for small entities. EPA
also considered exempting small entities from all or part of the rule.
EPA concluded that the stated objectives cannot be met under such
alternatives. An undisclosed conflict of interest poses the same risk
to EPA whether it is a conflict involving a large or small business
contractor. EPA believes the final rule, along with other established
internal controls within the Agency, will avoid actual or potential
conflicts of interest that may jeopardize future actions by the Agency.
List of Subjects in 48 CFR Parts 1501, 1509, 1510, 1512, 1527 and 1552
General contract clauses, Contract delivery or performance,
Contractor qualifications, Copyrights, Data, Government procurement,
Patents, Purchase descriptions, Solicitation provisions,
Specifications, Standards.
Dated: April 7, 1994.
Betty L. Bailey,
Director, Office of Acquisition Management.
For the reasons set out in the preamble, Chapter 15 of Title 48
Code of Federal Regulations is amended as set forth below:
1. The authority citation for parts 1501, 1509, 1510, 1512, 1527,
and 1552 continues to read as follows:
Authority: Sec. 205(c), 63 Stat. 390, as amended, 40 U.S.C.
486(c).
(a) Section 1501.370 is revised to read as follows:
Sec. 1501.370 OMB control numbers.
The information collection activities contained in the EPAAR
sections listed below have been approved by the Office of Management
and Budget (OMB) and have been issued OMB numbers in accordance with
section 3504(h) of the Paperwork Reduction Act of 1980, 44 U.S.C. 3501,
et seq.
------------------------------------------------------------------------
OMB control
48 CFR citation No.
------------------------------------------------------------------------
Specification, Standards and other Purchase Descriptions
1510.011-70 through 1510.011-74............................ 2030-0005
1510.011-80 through 1510.011-81............................ 2030-0023
Contract delivery or performance 1512.104.................. 2030-0023
Small Purchase and Other Simplified Purchase Procedures
1513.505 through 1513.570.................................. 2030-0007
Solicitation Provisions and Contract Clauses
1552.209-71................................................ 2030-0023
1552.209-73 through 1552.209-74............................ 2030-0023
1552.210-71 through 1552.210-73............................ 2030-0005
1552.210-80................................................ 2030-0023
1552.212-71................................................ 2030-0023
1552.215-72 through 1552.215-76............................ 2030-0006
1552.227-76................................................ 2030-0023
------------------------------------------------------------------------
PART 1509--CONTRACTOR QUALIFICATIONS
1509.506 [Redesignated as 1509.505-70] 1509.507 [Redesignated as
1509.506] 1509.508 [Redesignated as 1509.507-
1] 1509.509 [Redesignated as 1509.508]
2. Subpart 1509.5 is amended by: Redesignating section 1509.506 as
1509.505-70; redesignating section 1509.507 as 1509.506 and amending
paragraph (b) by placing a period after ``Contracting Officer's
decision'' and removing the remainder of the paragraph; redesignating
section 1509.508 as 1509.507-1, revising the section heading to read
``Solicitation provisions'' and removing paragraph (c); revising ``FAR
9.508-1'' in newly designated 1509.507-1(a)(1) to read ``(FAR) 48 CFR
9.507-1''; revising ``1509.508(a)'' in newly designated 1509.507-1(b)
to read ``1509.507-1(a)(1)''; and redesignating section 1509.509 as
1509.508.
3. Section 1509.507-2 is added to read as follows:
1509.507-2 Contract clause.
(a) The Contracting Officer shall include the clause at 1552.209-71
in all contracts in excess of the small purchase limitation and, as
appropriate, in small purchases. Contracts for other than Superfund
work shall include Alternate I in this clause in lieu of paragraph (e).
(b) The Contracting Officer shall include the clause at 1552.209-73
in all solicitations and contracts for Superfund work in excess of the
small purchase limitation and, as appropriate, in small purchases for
Superfund work.
(c) The Contracting Officer shall include the clause at 1552.209-74
or its alternates in the following solicitations and contracts for
Superfund work in excess of the small purchase limitation and, as
appropriate, in small purchases for Superfund work. The Contracting
Officer shall include the clause at 1552.209-74 in all Alternative
Remedial Contracting Strategy (ARCS) solicitations and contracts,
except Site Specific solicitations and contracts. Alternate I shall be
used in all Time Critical Rapid Response (TCRR) solicitations and
contracts, except site specific solicitations and contracts. The term
``TCRR'' in the Limitation of Future Contracting clauses includes not
only TCRR solicitations and contracts but Emergency Response Cleanup
Services (ERCS) and other emergency type solicitations and contracts.
TCRR pilot scale studies are included in the term ``treatability
studies''. Alternate II shall be used in all Technical Assistance Team
(TAT) solicitations and contracts. Alternate III shall be used in all
Environmental Services Assistance Team (ESAT) solicitations and
contracts. Alternate IV shall be used in all Technical Enforcement
Support (TES) solicitations and contracts. Alternate V shall be used in
all Superfund Headquarters Support solicitations and contracts. The
Contracting Officer is authorized to modify paragraph (c) of Alternate
V to reflect any unique limitations applicable to the program
requirements. Alternate VI shall be used in all Site Specific
solicitations and contracts.
(d) Clauses for incorporation into contracts existing as of May 19,
1994 shall be negotiated by the EPA Contracting Officer, on a case-by-
case basis, and shall be substantially similar to those prescribed in
this section.
PART 1510--SPECIFICATIONS, STANDARDS, AND OTHER DESCRIPTIONS
4. Part 1510 is amended by adding section 1510.011-80 to read as
follows:
1510.011-80 Annual Certification.
The Contracting Officer shall insert the clause at 1552.210-80 in
Superfund solicitations and contracts in excess of the small purchase
limitation, where the solicitation or contract does not include EPAAR
1552.212-71, Work Assignments, Alternate I, or a similar clause
requiring conflict of interest certifications during contract
performance.
This clause requires an annual conflict of interest certification
from contractors when the contract does not require the submission of
other conflict of interest certifications during contract performance.
Contracts requiring annual certifications include: Site Specific
contracts and the Contract Laboratory Program (CLP) and the Sample
Management Office (SMO) contracts.
The annual certification requires a contractor to certify that all
organizational conflicts of interest have been reported, and that its
personnel performing work under EPA contracts or relating to EPA
contracts have been informed of their obligation to report personal and
organizational conflicts of interest to the Contractor. The annual
certification shall cover the one-year period from the date of contract
award for the initial certification, and a one-year period since the
previous certification for subsequent certifications. The certification
must be received by the Contracting Officer no later than 45 days after
the close of the certification period covered.
PART 1512--CONTRACT DELIVERY OR PERFORMANCE
5. Section 1512.104 is amended by adding three sentences at the end
of paragraph (b) to read as follows:
1512.104 Contract clauses.
* * * * *
(b) * * * For Superfund contracts, except for contracts which
require annual conflict of interest certifications (e.g., Site Specific
contracts and the Contract Laboratory Program (CLP) and Sample
Management Office (SMO) contracts), the Contracting Officer shall use
the clause with either Alternate I or Alternate II. Alternate I shall
be used for contractors who have at least 3 years of records that may
be searched for certification purposes. Alternate II shall be used for
contractors who do not have at least three years of records that may be
searched.
PART 1527--PATENTS, DATA, AND COPYRIGHTS
6. Part 1527 is amended by adding section 1527.409, to read as
follows:
1527.409 Solicitation provisions and contract clauses.
The Contracting Officer shall insert the clause in 1552.227-76 in
all Superfund solicitations and contracts in excess of the small
purchase limitation and, as appropriate, in small purchases. The clause
may be used in other contracts if considered necessary by the
Contracting Officer.
PART 1552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
7. Sections 1552.209-70 and 1552.209-72 are amended by revising the
reference ``1509.508(b)'' in the introductory text to read ``1509.507-
1(b)''.
8. Section 1552.209-71 is amended by revising the reference
``1509.508(c)'' in the introductory text to read ``1509.507-2'';
revising the clause heading; removing paragraph (d) of the clause;
redesignating paragraph (c) of the clause as paragraph (d); in newly
redesignated paragraph (d) inserting the word ``it'' after the word
``disclose''; revising paragraph (b) of the clause; and adding new
paragraphs (c) and (e) and Alternate I to the clause to read as
follows:
1552.209-71 Organizational conflicts of interest.
* * * * *
Organizational Conflicts of Interest (May 1994)
* * * * *
(b) Prior to commencement of any work, the Contractor agrees to
notify the Contracting Officer immediately that, to the best of its
knowledge and belief, no actual or potential conflict of interest
exists or to identify to the Contracting Officer any actual or
potential conflict of interest the firm may have. In emergency
situations, however, work may begin but notification shall be made
within five (5) working days.
(c) The Contractor agrees that if an actual or potential
organizational conflict of interest is identified during
performance, the Contractor will immediately make a full disclosure
in writing to the Contracting Officer. This disclosure shall include
a description of actions which the Contractor has taken or proposes
to take, after consultation with the Contracting Officer, to avoid,
mitigate, or neutralize the actual or potential conflict of
interest. The Contractor shall continue performance until notified
by the Contracting Officer of any contrary action to be taken.
* * * * *
(e) The Contractor agrees to insert in each subcontract or
consultant agreement placed hereunder, except for subcontracts or
consultant agreements for well drilling, fence erecting, plumbing,
utility hookups, security guard services, or electrical services,
provisions which shall conform substantially to the language of this
clause, including this paragraph (e), unless otherwise authorized by
the Contracting Officer.
(End of clause)
Alternate I to Paragraph (e)
(e) The Contractor agrees to insert in each subcontract or
consultant agreement placed hereunder provisions which shall conform
substantially to the language of this clause, including this
paragraph (e), unless otherwise authorized by the Contracting
Officer.
9. Section 1552.209-73 is added to read as follows:
1552.209-73 Notification of conflicts of interest regarding personnel.
As prescribed in 1509.507-2(b) insert the following clause:
Notification of Conflicts of Interest Regarding Personnel (May 1994)
(a) In addition to the requirements of the contract clause
entitled ``Organizational Conflicts of Interest,'' the following
provisions with regard to employee personnel performing under this
contract shall apply until the earlier of the following two dates:
the termination date of the affected employee(s) or the expiration
date of the contract.
(b) The Contractor agrees to notify immediately the EPA Project
Officer and the Contracting Officer of (1) any actual or potential
personal conflict of interest with regard to any of its employees
working on or having access to information regarding this contract,
or (2) any such conflicts concerning subcontractor employees or
consultants working on or having access to information regarding
this contract, when such conflicts have been reported to the
Contractor. A personal conflict of interest is defined as a
relationship of an employee, subcontractor employee, or consultant
with an entity that may impair the objectivity of the employee,
subcontractor employee, or consultant in performing the contract
work.
(c) The Contractor agrees to notify each Project Officer and
Contracting Officer prior to incurring costs for that employee's
work when an employee may have a personal conflict of interest. In
the event that the personal conflict of interest does not become
known until after performance on the contract begins, the Contractor
shall immediately notify the Contracting Officer of the personal
conflict of interest. The Contractor shall continue performance of
this contract until notified by the Contracting Officer of the
appropriate action to be taken.
(d) The Contractor agrees to insert in any subcontract or
consultant agreement placed hereunder, except for subcontracts or
consultant agreements for well drilling, fence erecting, plumbing,
utility hookups, security guard services, or electrical services,
provisions which shall conform substantially to the language of this
clause, including this paragraph (d), unless otherwise authorized by
the Contracting Officer.
(End of clause)
10. Section 1552.209-74 is added to read as follows:
1552.209-74 Limitation of future contracting.
As prescribed in 1509.507-2(c), insert the following clause or
alternate:
Limitation of Future Contracting (ARCS) (May 1994)
(a) The parties to this contract agree that the Contractor will
be restricted in its future contracting in the manner described
below. Except as specifically provided in this clause, the
Contractor shall be free to compete for contracts on an equal basis
with other companies.
(b) The Contractor will be ineligible to enter into a contract
for remedial action projects for which the Contractor has developed
the statement of work or the solicitation package.
(c) The following applies when ARCS work is performed under this
contract and when both ARCS work and Field Investigative Team (FIT)
work are performed on the same site under this contract: Unless
prior written approval is obtained from the cognizant EPA
Contracting Officer, the Contractor, during the life of the work
assignment and for a period of five (5) years after the completion
of the work assignment, agrees not to enter into a contract with or
to represent any party, other than EPA, with respect to: (1) any
work relating to CERCLA activities which pertain to a site where the
Contractor previously performed work for EPA under this contract; or
(2) any work that may jeopardize CERCLA enforcement actions which
pertain to a site where the Contractor previously performed work for
the EPA under this contract.
(d) The following applies to FIT work at sites under this
contract where only FIT work is performed, except for those sites
where EPA has made a determination of ``no further remedial action
planned'' (NFRAP): Unless prior written approval is obtained from
the cognizant EPA Contracting Officer, the Contractor, during the
life of the work assignment and for a period of three (3) years
after the completion of the work assignment, agrees not to enter
into a contract with or to represent any party, other than EPA, with
respect to: (1) Any work relating to CERCLA activities which pertain
to a site where the Contractor previously performed work for EPA
under this contract; or (2) any work that may jeopardize CERCLA
enforcement actions which pertain to a site where the Contractor
previously performed work for the EPA under this contract.
(e) The Contractor agrees in advance that if any bids/proposals
are submitted for any work that would require written approval of
the Contracting Officer prior to entering into a contract subject to
the restrictions of this clause, then the bids/proposals are
submitted at the Contractor's own risk. Therefore, no claim shall be
made against the Government to recover bid/proposal costs as a
direct cost whether the request for authorization to enter into the
contract is denied or approved.
(f) To the extent that the work under this contract requires
access to proprietary or confidential business or financial data of
other companies, and as long as such data remains proprietary or
confidential, the Contractor shall protect such data from
unauthorized use and disclosure.
(g) The Contractor agrees to insert in each subcontract or
consultant agreement placed hereunder, except for subcontracts or
consultant agreements for nondiscretionary technical or engineering
services, including treatability studies, well drilling, fence
erecting, plumbing, utility hookups, security guard services, or
electrical services, provisions which shall conform substantially to
the language of this clause, including this paragraph (g) unless
otherwise authorized by the Contracting Officer. The Contractor may
request in writing that the Contracting Officer exempt from this
clause a particular subcontract or consultant agreement for
nondiscretionary technical or engineering services not specifically
listed above, including laboratory analysis. The Contracting Officer
will review and evaluate each request on a case-by-case basis before
approving or disapproving the request.
(h) If the Contractor seeks an expedited decision regarding its
initial future contracting request, the Contractor may submit its
request to both the Contracting Officer and the next administrative
level within the Contracting Officer's organization.
(i) A review process available to the Contractor when an adverse
determination is received shall consist of a request for
reconsideration to the Contracting Officer or a request for review
submitted to the next administrative level within the Contracting
Officer's organization. An adverse determination resulting from a
request for reconsideration by the Contracting Officer will not
preclude the contractor from requesting a review by the next
administrative level. Either a request for review or a request for
reconsideration must be submitted to the appropriate level within 30
calendar days after receipt of the initial adverse determination.
(End of clause)
Limitation of Future Contracting Alternate I (TCRR) (May 1994)
(a) The parties to this contract agree that the Contractor will
be restricted in its future contracting in the manner described
below. Except as specifically provided in this clause, the
Contractor shall be free to compete for contracts on an equal basis
with other companies.
(b) If the Contractor, under the terms of this contract, or
through the performance of work pursuant to this contract, is
required to develop specifications or statements of work and such
specifications or statements of work are incorporated into an EPA
solicitation, the Contractor shall be ineligible to perform the work
described in that solicitation as a prime Contractor or
subcontractor under an ensuing EPA contract.
(c) Unless prior written approval is obtained from the cognizant
EPA Contracting Officer, the Contractor, during the life of the
delivery order or tasking document and for a period of five (5)
years after the completion of the delivery order or tasking
document, agrees not to enter into a contract with or to represent
any party, other than EPA, with respect to: (1) any work relating to
CERCLA activities which pertain to a site where the Contractor
previously performed work for EPA under this contract; or (2) any
work that may jeopardize CERCLA enforcement actions which pertain to
a site where the Contractor previously performed work for the EPA
under this contract.
(d) During the life of this contract, including any options, the
Contractor agrees that unless otherwise authorized by the
Contracting Officer:
(1) It will not provide any Technical Assistance Team (TAT) type
activities (e.g., TAT contracts) to EPA within the Contractor's Time
Critical Rapid Response (TCRR) assigned geographical area(s), either
as a prime contractor, subcontractor, or consultant.
(2) It will not provide any Technical Assistance Team (TAT) type
activities (e.g., TAT contracts) to EPA as a prime contractor,
subcontractor or consultant at a site where it has performed or
plans to perform TCRR work.
(3) It will be ineligible for award of TAT type activities
contracts for sites within its respective TCRR assigned geographical
area(s) which result from a CERCLA administrative order, a CERCLA or
RCRA consent decree or a court order.
(e) The Contractor agrees in advance that if any bids/proposals
are submitted for any work that would require written approval of
the Contracting Officer prior to entering into a contract subject to
the restrictions of this clause, then the bids/proposals are
submitted at the Contractor's own risk. Therefore, no claim shall be
made against the Government to recover bid/proposal costs as a
direct cost whether the request for authorization to enter into the
contract is denied or approved.
(f) To the extent that the work under this contract requires
access to proprietary or confidential business or financial data of
other companies, and as long as such data remains proprietary or
confidential, the Contractor shall protect such data from
unauthorized use and disclosure.
(g) The Contractor agrees to insert in each subcontract or
consultant agreement placed hereunder, except for subcontracts or
consultant agreements for nondiscretionary technical or engineering
services, including treatability studies, well drilling, fence
erecting, plumbing, utility hookups, security guard services, or
electrical services, provisions which shall conform substantially to
the language of this clause, including this paragraph (g) unless
otherwise authorized by the Contracting Officer. The Contractor may
request in writing that the Contracting Officer exempt from this
clause a particular subcontract or consultant agreement for
nondiscretionary technical or engineering services not specifically
listed above, including laboratory analysis. The Contracting Officer
will review and evaluate each request on a case-by-case basis before
approving or disapproving the request.
(h) If the Contractor seeks an expedited decision regarding its
initial future contracting request, the Contractor may submit its
request to both the Contracting Officer and the next administrative
level within the Contracting Officer's organization.
(i) A review process available to the Contractor when an adverse
determination is received shall consist of a request for
reconsideration to the Contracting Officer or a request for review
submitted to the next administrative level within the Contracting
Officer's organization. An adverse determination resulting from a
request for reconsideration by the Contracting Officer will not
preclude the Contractor from requesting a review by the next
administrative level. Either a request for review or a request for
reconsideration must be submitted to the appropriate level within 30
calendar days after receipt of the initial adverse determination.
(End of clause)
Limitation of Future Contracting, Alternate II (TAT) (May 1994)
(a) The parties to this contract agree that the Contractor will
be restricted in its future contracting in the manner described
below. Except as specifically provided in this clause, the
Contractor shall be free to compete for contracts on an equal basis
with other companies.
(b) If the Contractor, under the terms of this contract, or
through the performance of work pursuant to this contract, is
required to develop specifications or statements of work and such
specifications or statements of work are incorporated into an EPA
solicitation, the Contractor shall be ineligible to perform the work
described in that solicitation as a prime Contractor or
subcontractor under an ensuing EPA contract.
(c) Unless prior written approval is obtained from the cognizant
EPA Contracting Officer, the Contractor, during the life of the
technical direction document and for a period of five (5) years
after the completion of the technical direction document, agrees not
to enter into a contract with or to represent any party, other than
EPA, with respect to: (1) Any work relating to CERCLA activities
which pertain to a site where the Contractor previously performed
work for EPA under this contract; or (2) any work that may
jeopardize CERCLA enforcement actions which pertain to a site where
the Contractor previously performed work for the EPA under this
contract.
(d) During the life of this contract, including any options, the
Contractor agrees that unless otherwise authorized by the
Contracting Officer:
(1) It will not provide to EPA cleanup services (e.g., Time
Critical Rapid Response (TCRR) contracts) within the Contractor's
Technical Assistance Team (TAT) assigned geographical area(s),
either as a prime Contractor, subcontractor, or consultant.
(2) Unless an individual design for the site has been prepared
by a third party, it will not provide to EPA as a prime contractor,
subcontractor or consultant any remedial construction services at a
site where it has performed or plans to perform TAT work. This
clause will not preclude TAT contractors from performing
construction management services under other EPA contracts.
(3) It will be ineligible for award of TCRR type activities
contracts for sites within its respective TAT assigned geographical
area(s) which result from a CERCLA administrative order, a CERCLA or
RCRA consent decree or a court order.
(e) The Contractor agrees in advance that if any bids/proposals
are submitted for any work that would require written approval of
the Contracting Officer prior to entering into a contract subject to
the restrictions of this clause, then the bids/proposals are
submitted at the Contractor's own risk. Therefore, no claim shall be
made against the Government to recover bid/proposal costs as a
direct cost whether the request for authorization to enter into the
contract is denied or approved.
(f) To the extent that the work under this contract requires
access to proprietary or confidential business or financial data of
other companies, and as long as such data remains proprietary or
confidential, the Contractor shall protect such data from
unauthorized use and disclosure.
(g) The Contractor agrees to insert in each subcontract or
consultant agreement placed hereunder, except for subcontracts or
consultant agreements for nondiscretionary technical or engineering
services, including treatability studies, well drilling, fence
erecting, plumbing, utility hookups, security guard services, or
electrical services, provisions which shall conform substantially to
the language of this clause, including this paragraph (g) unless
otherwise authorized by the Contracting Officer. The Contractor may
request in writing that the Contracting Officer exempt from this
clause a particular subcontract or consultant agreement for
nondiscretionary technical or engineering services not specifically
listed above, including laboratory analysis. The Contracting Officer
will review and evaluate each request on a case-by-case basis before
approving or disapproving the request.
(h) If the Contractor seeks an expedited decision regarding its
initial future contracting request, the Contractor may submit its
request to both the Contracting Officer and the next administrative
level within the Contracting Officer's organization.
(i) A review process available to the Contractor when an adverse
determination is received shall consist of a request for
reconsideration to the Contracting Officer or a request for review
submitted to the next administrative level within the Contracting
Officer's organization. An adverse determination resulting from a
request for reconsideration by the Contracting Officer will not
preclude the Contractor from requesting a review by the next
administrative level. Either a request for review or a request for
reconsideration must be submitted to the appropriate level within 30
calendar days after receipt of the initial adverse determination.
(End of clause)
Limitation of Future Contracting; Alternate III (ESAT) (May 1994)
(a) The parties to this contract agree that the Contractor will
be restricted in its future contracting in the manner described
below. Except as specifically provided in this clause, the
Contractor shall be free to compete for contracts on an equal basis
with other companies.
(b) If the Contractor, under the terms of this contract, or
through the performance of work pursuant to this contract, is
required to develop specifications or statements of work and such
specifications or statements of work are incorporated into an EPA
solicitation, the Contractor shall be ineligible to perform the work
described in that solicitation as a prime Contractor or
subcontractor under an ensuing EPA contract.
(c) To the extent that the work under this contract requires
access to proprietary or confidential business or financial data of
other companies, and as long as such data remains proprietary or
confidential, the Contractor shall protect such data from
unauthorized use and disclosure.
(d) The Contractor agrees to insert in each subcontract or
consultant agreement placed hereunder, except for subcontracts or
consultant agreements for nondiscretionary technical or engineering
services, including treatability studies, well drilling, fence
erecting, plumbing, utility hookups, security guard services, or
electrical services, provisions which shall conform substantially to
the language of this clause, including this paragraph (d) unless
otherwise authorized by the Contracting Officer. The Contractor may
request in writing that the Contracting Officer exempt from this
clause a particular subcontract or consultant agreement for
nondiscretionary technical or engineering services not specifically
listed above, including laboratory analysis. The Contracting Officer
will review and evaluate each request on a case-by-case basis before
approving or disapproving the request.
(e) If the Contractor seeks an expedited decision regarding its
initial future contracting request, the contractor may submit its
request to both the Contracting Officer and the next administrative
level within the Contracting Officer's organization.
(f) A review process available to the Contractor when an adverse
determination is received shall consist of a request for
reconsideration to the Contracting Officer or a request for review
submitted to the next administrative level within the Contracting
Officer's organization. An adverse determination resulting from a
request for reconsideration by the Contracting Officer will not
preclude the Contractor from requesting a review by the next
administrative level. Either a request for review or a request for
reconsideration must be submitted to the appropriate level within 30
calendar days after receipt of the initial adverse determination.
(End of clause)
Limitation of Future Contracting, Alternate IV (TES) (May 1994)
(a) The parties to this contract agree that the Contractor will
be restricted in its future contracting in the manner described
below. Except as specifically provided in this clause, the
Contractor shall be free to compete for contracts on an equal basis
with other companies.
(b) During the performance period of this contract, the
Contractor will be ineligible to enter into any contract for
remedial planning and/or implementation projects for sites within
the assigned geographical area(s) covered by this contract without
the prior written approval of the EPA Contracting Officer.
(c) If the Contractor, under the terms of this contract, or
through the performance of work pursuant to this contract, is
required to develop specifications or statements of work and such
specifications or statements of work are incorporated into an EPA
solicitation, the Contractor shall be ineligible to perform the work
described in that solicitation as a prime Contractor or
subcontractor under an ensuing EPA contract.
(d) Unless prior written approval is obtained from the cognizant
EPA Contracting Officer, the Contractor, during the life of the work
assignment and for a period of seven (7) years after the completion
of the work assignment, agrees not to enter into a contract with or
to represent any party, other than EPA, with respect to: (1) Any
work relating to CERCLA activities which pertain to a site where the
Contractor previously performed work for EPA under this contract; or
(2) any work that may jeopardize CERCLA enforcement actions which
pertain to a site where the Contractor previously performed work for
the EPA under this contract.
(e) The Contractor agrees in advance that if any bids/proposals
are submitted for any work that would require written approval of
the Contracting Officer prior to entering into a contract subject to
the restrictions of this clause, then the bids/proposals are
submitted at the Contractor's own risk. Therefore, no claim shall be
made against the Government to recover bid/proposal costs as a
direct cost whether the request for authorization to enter into the
contract is denied or approved.
(f) To the extent that the work under this contract requires
access to proprietary or confidential business or financial data of
other companies, and as long as such data remains proprietary or
confidential, the Contractor shall protect such data from
unauthorized use and disclosure.
(g) The Contractor agrees to insert in each subcontract or
consultant agreement placed hereunder, except for subcontracts or
consultant agreements for nondiscretionary technical or engineering
services, including treatability studies, well drilling, fence
erecting, plumbing, utility hookups, security guard services, or
electrical services, provisions which shall conform substantially to
the language of this clause, including this paragraph (g) unless
otherwise authorized by the Contracting Officer. The Contractor may
request in writing that the Contracting Officer exempt from this
clause a particular subcontract or consultant agreement for
nondiscretionary technical or engineering services not specifically
listed above, including laboratory analysis. The Contracting Officer
will review and evaluate each request on a case-by-case basis before
approving or disapproving the request.
(h) If the Contractor seeks an expedited decision regarding its
initial future contracting request, the Contractor may submit its
request to both the Contracting Officer and the next administrative
level within the Contracting Officer's organization.
(i) A review process available to the Contractor when an adverse
determination is received shall consist of a request for
reconsideration to the Contracting Officer or a request for review
submitted to the next administrative level within the Contracting
Officer's organization. An adverse determination resulting from a
request for reconsideration by the Contracting Officer will not
preclude the Contractor from requesting a review by the next
administrative level. Either a request for review or a request for
reconsideration must be submitted to the appropriate level within 30
calendar days after receipt of the initial adverse determination.
(End of clause)
Limitation of Future Contracting, Alternate V (Headquarters Support)
(May 1994)
(a) The parties to this contract agree that the Contractor will
be restricted in its future contracting in the manner described
below. Except as specifically provided in this clause, the
Contractor shall be free to compete for contracts on an equal basis
with other companies.
(b) If the Contractor, under the terms of this contract, or
through the performance of work pursuant to this contract, is
required to develop specifications or statements of work and such
specifications or statements of work are incorporated into an EPA
solicitation, the Contractor shall be ineligible to perform the work
described in that solicitation as a prime Contractor or
subcontractor under an ensuing EPA contract.
(c) The Contractor, during the life of this contract, will be
ineligible to enter into a contract with EPA to perform response
action work (e.g., Alternative Remedial Contracting Strategy (ARCS),
Time Critical Rapid Response (TCRR), Technical Assistance Team
(TAT), and Technical Enforcement Support (TES) contracts), unless
otherwise authorized by the Contracting Officer.
(d) The Contractor agrees in advance that if any bids/proposals
are submitted for any work that would require written approval of
the Contracting Officer prior to entering into a contract subject to
the restrictions of this clause, then the bids/proposals are
submitted at the Contractor's own risk. Therefore, no claim shall be
made against the Government to recover bid/proposal costs as a
direct cost whether the request for authorization to enter into the
contract is denied or approved.
(e) To the extent that the work under this contract requires
access to proprietary or confidential business or financial data of
other companies, and as long as such data remains proprietary or
confidential, the Contractor shall protect such data from
unauthorized use and disclosure.
(f) The Contractor agrees to insert in each subcontract or
consultant agreement placed hereunder, except for subcontracts or
consultant agreements for nondiscretionary technical or engineering
services, including treatability studies, well drilling, fence
erecting, plumbing, utility hookups, security guard services, or
electrical services, provisions which shall conform substantially to
the language of this clause, including this paragraph (f) unless
otherwise authorized by the Contracting Officer. The Contractor may
request in writing that the Contracting Officer exempt from this
clause a particular subcontract or consultant agreement for
nondiscretionary technical or engineering services not specifically
listed above, including laboratory analysis. The Contracting Officer
will review and evaluate each request on a case-by-case basis before
approving or disapproving the request.
(g) If the Contractor seeks an expedited decision regarding its
initial future contracting request, the Contractor may submit its
request to both the Contracting Officer and the next administrative
level within the Contracting Officer's organization.
(h) A review process available to the Contractor when an adverse
determination is received shall consist of a request for
reconsideration to the Contracting Officer or a request for review
submitted to the next administrative level within the Contracting
Officer's organization. An adverse determination resulting from a
request for reconsideration by the Contracting Officer will not
preclude the Contractor from requesting a review by the next
administrative level. Either a request for review or a request for
reconsideration must be submitted to the appropriate level within 30
calendar days after receipt of the initial adverse determination.
(End of clause)
Limitation of Future Contracting; Alternate VI (Site Specific) (May
1994)
The parties to this contract agree that the Contractor will be
restricted in its future contracting in the manner described below.
Except as specifically provided in this clause, the Contractor shall
be free to compete for contracts on an equal basis with other
companies.
(b) If the Contractor, under the terms of this contract, or
through the performance of work pursuant to this contract, is
required to develop specifications or statements of work and such
specifications or statements of work are incorporated into an EPA
solicitation, the Contractor shall be ineligible to perform the work
described in that solicitation as a prime contractor or
subcontractor under an ensuing EPA contract.
(c) Unless prior written approval is obtained from the cognizant
EPA Contracting Officer, the Contractor, during the life of the
contract and for a period of five (5) years after the expiration of
the contract agrees not to enter into a contract with or to
represent any party, other than EPA, with respect to: (1) any work
relating to CERCLA activities which pertain to the site where the
Contractor previously performed work for EPA under this contract; or
(2) any work that may jeopardize CERCLA enforcement actions which
pertain to the site where the Contractor previously performed work
for the EPA under this contract.
(d) During the life of this contract, including any options, the
Contractor agrees that unless otherwise authorized by the
Contracting Officer:
(1) It will not provide any Technical Assistance Team (TAT) type
activities (e.g., TAT contracts) to EPA on the site either as a
prime contractor, subcontractor, or consultant.
(2) It will be ineligible for award of contracts pertaining to
this site which result from a CERCLA administrative order, a CERCLA
or RCRA consent decree or a court order.
(e) The Contractor agrees in advance that if any bids/proposals
are submitted for any work that would require written approval of
the Contracting Officer prior to entering into a contract subject to
the restrictions of this clause, then the bids/proposals are
submitted at the Contractor's own risk. Therefore, no claim shall be
made against the Government to recover bid/proposal costs as a
direct cost whether the request for authorization to enter into the
contract is denied or approved.
(f) To the extent that the work under this contract requires
access to proprietary or confidential business or financial data of
other companies, and as long as such data remains proprietary or
confidential, the Contractor shall protect such data from
unauthorized use and disclosure.
(g) Contractors who are performing nondiscretionary technical or
engineering services, including construction work, may request a
waiver from or modification to this clause by submitting a written
request to the Contracting Officer. The Contracting Officer shall
make the determination regarding whether to waive or modify the
clause on a case-by-case basis.
(h) The Contractor agrees to insert in each subcontract or
consultant agreement placed hereunder, except for subcontracts or
consultant agreements for nondiscretionary technical or engineering
services, including treatability studies, well drilling, fence
erecting, plumbing, utility hookups, security guard services, or
electrical services, provisions which shall conform substantially to
the language of this clause, including this paragraph (h) unless
otherwise authorized by the Contracting Officer. The Contractor may
request in writing that the Contracting Officer exempt from this
clause a particular subcontract or consultant agreement for
nondiscretionary technical or engineering services not specifically
listed above, including laboratory analysis. The Contracting Officer
will review and evaluate each request on a case-by-case basis before
approving or disapproving the request.
(i) If the Contractor seeks an expedited decision regarding its
initial future contracting request, the Contractor may submit its
request to both the Contracting Officer and the next administrative
level within the Contracting Officer's organization.
(j) A review process available to the Contractor when an adverse
determination is received shall consist of a request for
reconsideration to the Contracting Officer or a request for review
submitted to the next administrative level within the Contracting
Officer's organization. An adverse determination resulting from a
request for reconsideration by the Contracting Officer will not
preclude the Contractor from requesting a review by the next
administrative level. Either a request for review or a request for
reconsideration must be submitted to the appropriate level within 30
calendar days after receipt of the initial adverse determination.
(End of clause)
11. Section 1552.210-80 is added to read as follows:
Sec. 1552.210-80 Annual certification.
As prescribed in 1510.011-80, insert the following clause:
Annual Certification (May 1994)
The Contractor shall submit an annual conflict of interest
certification to the Contracting Officer. In this certification, the
Contractor shall certify annually that, to the best of the
Contractor's knowledge and belief, all actual or potential
organizational conflicts of interest have been reported to EPA. In
addition, in this annual certification, the Contractor shall certify
that it has informed its personnel who perform work under EPA
contracts or relating to EPA contracts of their obligation to report
personal and organizational conflicts of interest to the Contractor.
Such certification must be signed by a senior executive of the
company and submitted in accordance with instructions provided by
the Contracting Officer. The initial certification shall cover the
one-year period from the date of contract award, and all subsequent
certifications shall cover successive annual periods thereafter,
until expiration or termination of the contract. The certification
must be received by the Contracting Officer no later than 45 days
after the close of the certification period covered.
(End of clause)
12. Section 1552.212-71 is amended by adding Alternate I and II, to
be used alternatively and not together, at the end of the section:
1552.212-71 Work assignments.
* * * * *
Alternate I. As prescribed in 1512.104(b), modify the existing
clause by adding the following paragraph (f) to the basic clause:
(f) Within 20 days of receipt of the work assignment or similar
tasking document, the Contractor shall provide a conflict of
interest certification. Where work assignments or similar tasking
documents are issued under this contract for work on or directly
related to a site, the Contractor is only required to provide a
conflict of interest certification for the first work assignment
issued for that site. For all subsequent work on that site under
this contract, the Contractor has a continuing obligation to search
and report any actual or potential conflicts of interest, but no
additional conflict of interest certifications are required.
Before submitting the conflict of interest certification, the
contractor shall search its records accumulated, at a minimum, over
the past three years immediately prior to the receipt of the work
assignment or similar tasking document. In the COI certification,
the Contractor must certify to the best of the Contractor's
knowledge and belief, that all actual or potential organizational
conflicts of interest have been reported to the Contracting Officer
or that to the best of the Contractor's knowledge and belief, no
actual or potential organizational conflicts of interest exist. In
addition, the Contractor must certify that its personnel who perform
work under this work assignment or relating to this work assignment
have been informed of their obligation to report personal and
organizational conflicts of interest to the Contractor. The
certification shall also include a statement that the Contractor
recognizes its continuing obligation to identify and report any
actual or potential conflicts of interest arising during performance
of this work assignment or other work related to this site.
Alternate II. As prescribed in 1512.104(b), modify the existing
clause by adding the following paragraph (f) to the basic clause:
(f) Within 20 days of receipt of the work assignment or similar
tasking document, the Contractor shall provide a conflict of
interest certification. Where work assignments or similar tasking
documents are issued under this contract for work on or directly
related to a site, the Contractor is only required to provide a
conflict of interest certification for the first work assignment
issued for that site. For all subsequent work on that site under
this contract, the Contractor has a continuing obligation to search
and report any actual or potential conflicts of interest, but no
additional conflict of interest certifications are required.
Before submitting the conflict of interest certification, the
contractor shall initially search through all of its available
records to identify any actual or potential conflicts of interest.
During the first three years of this contract, the contractor shall
search through all records created since the beginning of the
contract plus the records of the contractor prior to the award of
the contract until a minimum of three years of records are
accumulated. Once three years of records have accumulated, prior to
certifying, the contractor shall search its records accumulated, at
a minimum, over the past three years immediately prior to the
receipt of the work assignment or similar tasking document. In the
certification, the Contractor must certify to the best of the
Contractor's knowledge and belief, that all actual or potential
organizational conflicts of interest have been reported to the
Contracting Officer or that to the best of the Contractor's
knowledge and belief, no actual or potential organizational
conflicts of interest exist. In addition, the Contractor must
certify that its personnel who perform work under this work
assignment or relating to this work assignment have been informed of
their obligation to report personal and organizational conflicts of
interest to the Contractor. The certification shall also include a
statement that the Contractor recognizes its continuing obligation
to identify and report any actual or potential conflicts of interest
arising during performance of this work assignment or other work
related to this site.
(End of clause)
13. Section 1552.227-76 is added to read as follows:
1552.227-76 Project employee confidentiality agreement.
As prescribed in 1527.409, insert the following clause:
Project Employee Confidentiality Agreement (May 1994)
(a) The Contractor recognizes that Contractor employees in
performing this contract may have access to data, either provided by
the Government or first generated during contract performance, of a
sensitive nature which should not be released to the public without
Environmental Protection Agency (EPA) approval. Therefore, the
Contractor agrees to obtain confidentiality agreements from all of
its employees working on requirements under this contract.
(b) Such agreements shall contain provisions which stipulate
that each employee agrees that the employee will not disclose,
either in whole or in part, to any entity external to EPA, the
Department of Justice, or the Contractor, any information or data
(as defined in FAR Section 27.401) provided by the Government or
first generated by the Contractor under this contract, any site-
specific cost information, or any enforcement strategy without first
obtaining the written permission of the EPA Contracting Officer. If
a contractor, through an employee or otherwise, is subpoenaed to
testify or produce documents, which could result in such disclosure,
the Contractor must provide immediate advance notification to the
EPA so that the EPA can authorize such disclosure or have the
opportunity to take action to prevent such disclosure. Such
agreements shall be effective for the life of the contract and for a
period of five (5) years after completion of the contract.
(c) The EPA may terminate this contract for convenience, in
whole or in part, if it deems such termination necessary to prevent
the unauthorized disclosure of information to outside entities. If
such a disclosure occurs without the written permission of the EPA
Contracting Officer, the Government may terminate the contract, for
default or convenience, or pursue other remedies as may be permitted
by law or this contract.
(d) The Contractor further agrees to insert in any subcontract
or consultant agreement placed hereunder, except for subcontracts or
consultant agreements for well drilling, fence erecting, plumbing,
utility hookups, security guard services, or electrical services,
provisions which shall conform substantially to the language of this
clause, including this paragraph, unless otherwise authorized by the
Contracting Officer.
(End of clause)
[FR Doc. 94-8871 Filed 4-18-94; 8:45 am]
BILLING CODE 6560-50-P