Attachment_4_EPA_order-1900-1a.pdf

Classification No.: 1900.1A CHG 3 Approval Date: December 13, 2005 Review Date: 07/17/2015

Interacting With Contractors

1. PURPOSE. Contractors are an integral part of EPA fulfilling its mission. In many cases, contractor personnel must interact on a daily basis and exchange knowledge with government employees to perform their tasks effectively. This Order provides general guidance to federal employees on maintaining proper relationships with contractors, and highlights issues to assist in an environment where federal employees and contractors work closely together. This Order is not a substitute for contracts, ethics or legal advice.

Many issues require an extensive review of the facts and circumstances, as well as a detailed knowledge of the terms of the contracts and the applicable regulations. Federal employees should obtain advice on specific interaction issues from the cognizant Contracting Officer (CO), ethics official or legal counsel.

2. APPLICABILTY. The Order applies to all contracts funded with Agency appropriations, including contracts awarded by Agency Contracting Officers and Government-Wide Acquisition (GWAC) contracts and multiple Agency contracts, which may be accessed through an interagency agreement.

3. BACKGROUND.

a. EPA spends over a billion dollars a year for contractor services. A large number of contractor employees perform a variety of tasks in support of the Agency mission.

Many of these contractor employees work on-site at Agency facilities. As a result, all employees must understand the acquisition, appropriation, ethics, and other regulations that apply to interacting with contractors to avoid any problems or improper relationships.

b. This Order was originally issued in April 1994, during the period in which the Agency experienced substantial contract management weaknesses. These weaknesses included improper interaction between EPA and contractor employees. Agency contract management practices, especially as related to the technical direction of, and social interactions with, on-site contractors have improved significantly since then. This revised Order reinforces the continuing need for diligent contract management, especially over contractors performing work on-site. It also clarifies the degree to which federal employees and contractor employees may interact, and includes timely and relevant examples of appropriate interaction with contractor employees.

4. DEFINITIONS.

a. Contracting Officer (CO) - The Federal Acquisition Regulation (FAR)

Subpart 2.1 defines “Contracting Officer” (CO) as “a person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings”. FAR Subpart 1.603, entitled “Selection, appointment, and termination of appointment for Contracting Officers”, and the EPA Acquisition Guide (EPAAG)

Subsection 1.6.4 cover the appointment and authorities of COs.

b. Contracting Officer’s Representative (COR) – FAR Subpart 2.1 defines

“Contracting Officer’s Representative” (COR) as an individual designated and authorized in writing by the CO to perform specific technical or administrative functions. The requirements to be a COR and corresponding responsibilities are listed in the EPAAG Subsection 1.6.5. The COR is an authorized representative of a CO. A COR may be an employee of either EPA or another federal agency. CORs are nominated by the program office and appointed to the contract by the CO. At EPA, the term “COR” is used as a generic title covering project officer, work assignment manager, delivery order project officer, task order project officer, task monitor, and so forth.

c. Inherently Governmental Function (IGF) - FAR Subpart 2.1 defines inherently governmental function, as “a matter of policy, a function that is so intimately related to the public interest as to mandate performance by Government employees”.

Contracts shall not be used for the performance of inherently governmental functions.

The following functions are either considered to be inherently governmental functions or shall be treated as such; the determination of agency policy, the determination of federal program priorities for budget requests, directing and controlling federal employees. The not all inclusive examples list of inherently governmental functions is in the FAR at

Subpart 7.503(c) under Policy.

d. Personal Services Contract - FAR 37.104 provides guidance on personal services contracts. A personal services contract is a contract which, by its terms or as administered, results in contractor employees being subject to relatively continuous supervision and direct control by a government official or employee. A personal services contract is characterized by the employer-employee relationship it creates between the government and the contractor employees. When not specifically authorized, personal services contracts inappropriately augment Agency staff without proper legislative review. Inappropriate personal services circumvent the civil service laws which require the government to obtain its employees through direct hire in accordance with ceilings established by the Office of Management and Budget (OMB).

e. Technical Communication - The informal exchange of information between federal employees and contractors. Such communication includes information exchanged on a broad range of topics such as, but not limited to: scientific information, research information, or information technology. Technical communication is more general in nature than technical direction. Technical communication does not direct the contractor, and is not binding on the contractor.

f. Technical Direction - The Environmental Protection Agency Acquisition

Regulation (EPAAR) contract clause 1552.237-71, Technical Direction, defines technical direction, as well as the authority, procedures and limitations of such direction. Technical direction is instruction to the contractor that approves approaches, solutions, designs, or refinements; fills in details; completes the general description of work or documentation items; shifts emphasis among work areas or tasks; or provides similar guidance. It includes evaluation of contractor performance and comments on deliverables. Technical direction is binding on the contractor. Only the CO or the COR is authorized to give technical direction.

5. RESPONSIBILITIES.

a. There are differences in rules and regulations for contractor and civilian government employees. All federal employees interacting with contractors are responsible for ensuring their interactions are fair, impartial, and in compliance with federal and Agency acquisition laws, policies, and ethics rules. Maintaining proper business relationships with contractor employees is a cooperative effort involving the CO and the program personnel involved in contract management.

b. The CO is responsible for determining, prior to award, that a contract does not include inherently governmental functions or unauthorized personal services and that controls are in place to protect against contract management vulnerabilities. COs are responsible for investigating any claims of inappropriate interaction with contractors and for taking appropriate action to ensure that contracts are managed to maintain proper contractual relationships.

c. CORs are responsible for providing technical direction and ensuring the contractor does not perform inherently governmental functions or unauthorized personal services, and that contract management controls are enforced.

d. Other federal and EPA Office of Acquisition Management (OAM) quality initiatives fulfill the evaluation and oversight objectives set forth in EPAAG Sections 3.1 and 42.3.2 regarding maintaining proper relationships with contractor employees.

6. AUTHORITY TO INTERACT WITH CONTRACTOR PERSONNEL.

a. The contract always governs contract performance. For this reason, a well-structured contract that clearly sets forth the responsibilities of the government and the contractor is critical to ensure acceptable contract performance. To the maximum extent possible, contracts shall be performance-based, describing the desired results (outcomes) and allowing the contractor to innovate in meeting the requirements. Because performance-based acquisition is results rather than process oriented, this type of contract lessens the Government’s involvement in the contractor’s daily operations, thus protecting against inappropriate interactions in contractor personnel issues.

b. Technical direction shall be issued only by the CO or the COR. Technical direction must be within the scope of the contractual vehicle (i.e., contract, delivery/task order, or work assignment), must be in compliance with the technical direction clause in the contract, and must be issued in a manner that avoids unauthorized personal services.

c. Contractor employees working on-site, frequently side-by-side with federal employees, creates a unique situation where interaction is unavoidable. Federal employees must recognize the limitations on interaction with contractor employees and guard against improper relationships. Federal employees may engage in technical communication with contractor employees, where appropriate. Although it is permissible for federal employees to engage in technical communication, they must use discretion to ensure their communication does not interfere with contractor performance.

d. The following table summarizes the responsibilities of federal employees and the extent of their authority to interact with contractors.

Position

Authority to

Initiate or Modify

Contracts

Authority to issue

Technical

Direction

May engage in

Technical

Communication

CO YES YES YES

COR NO YES YES

Other Federal

Employees

NO NO YES

Please see Appendices A and B for examples of permissible interactions with contractors, with an emphasis on distinguishing technical communication from technical direction.

Appendix C gives examples of prohibited interactions between federal employees and contractors.

7. GENERAL RULES GOVERNING INTERACTIONS WITH CONTRACTORS

a. Mixed Teams of Contractor and Federal Employees are Permissible.

Agency offices may utilize mixed teams, comprised of contractors and federal employees, which are formed when they are the most efficient way to implement a required project or task. Mixed teams facilitate the exchange of technical information within the scope of work for a specific task or project. The COR may authorize the formation of the team, in collaboration with the contractor’s point of contact. But, because the COR is not required to be a member of the team, other federal employee team members must guard against engaging in technical direction to contractor members.

Both the CO and COR may provide federal employees with the contractor’s work plan when needed to implement a required task. In these instances, the cost proposal and any applicable contract rate information should be excluded. Due to the complexities of some mixed teams, it may be necessary for the team to develop internal control procedures that ensure proper exchange between team members.

b. Government Business Must Be Conducted in a Manner Above Reproach with Complete Impartiality and Without Preferential Treatment. All federal employees are governed by the Standards of Ethical Conduct for Employees of the

Executive Branch. This document is available at the United States Office of Government Ethics Internet site, http://www.usoge.gov. The Standards of Ethical Conduct include rules related to personal and business relationships, accepting gifts, conflicting financial interests, and other areas employees who interact with contractors must follow.

(1) Care must be exercised to avoid conflicts of interest, especially for employees managing an organization or a contract. Agency employees should limit social interactions with contractor employees performing work for their office.

(2) Federal employees participating personally and substantially in a federal procurement (see FAR 3.104-1 for a definition of this phrase), shall use discretion in their interactions with potential offerors and shall not disclose procurement information unless specifically authorized to do so.

(3) If you are unsure of how to interpret an ethics rule or how it applies in your situation, ask your ethics official for help.

c. Respect the Employer-Employee Relationship Between Contractors and

Their Employees . Federal employees are not permitted to intervene in a contractor’s personnel activities, including hiring, firing, supervising, or promoting of contractor employees, assigning particular employees to specific tasks, or rewarding individual contractor employees.

(1) Note, in some cases, such as under the Key Personnel clause or other contract terms, the contractor is required to submit resumes for individuals the firm proposes to use on the contract. In these cases, the resume is reviewed against the qualifications listed in the contract. This is not the same as directing the contractor to hire a specific individual which constitutes personal services.

(2) Federal employees are prohibited from asking contractors to hire or place in a hold status, individuals who may be candidates for Agency positions, pending completion of competitive civil service procedures.

(3) Federal employees must not participate in resolving personnel matters for contractors. Contractor employees must contact their appropriate points of contact within their corporation for resolution of these issues in accordance with the contractor’s policies.

(4) Evaluation of contractor performance, whether positive or negative, must be provided through the contract past performance process, or the incentive fee process, if applicable.

d. Safeguard Procurement, Privacy Act, Confidential Business, and Other

Nonpublic Information. Federal employees are responsible for protecting sensitive information. Sensitive information includes:

- Confidential Business Information (CBI)

- Confidential Agency Information (CAI)

- Privacy Act and other personal information

- Enforcement-confidential information

- Budgetary information prior to Office of Management and Budget release

- Other information that is exempt from disclosure under the Freedom of

Information Act (FOIA)

- National security information

For a definition of these types of information and more detailed guidance, see the Office of Environmental Information’s Information Sensitivity Compendium available at http://intranet.epa.gov/oei/pdf/compendium-final.pdf. Sensitive information shall not be released to contractors unless it is allowed under the contract and all contract management controls and applicable statutory procedures are followed. Consult with the

Office of General Counsel on issues related to CBI, the Trade Secrets Act, or the Privacy Act. Your organization’s Information Security Officer can also assist with questions on safeguarding sensitive information.

(1) Contractors should not be provided with copies of EPA internal correspondence, except by the CO or the COR and only when providing this information is within the scope of the contract or when it affects the conditions of the facility in which the contractor’s employees are working (e.g., scheduled repair work to be performed or building closings).

(2) To protect sensitive information from being inadvertently seen or overheard by contractors, appropriate management controls must be in place and enforced. These controls may include limiting contractors’ access to EPA office areas, fax machines, copiers, computers, or file rooms where the Agency receives, copies, or stores sensitive or confidential information. Contracts which allow contractors access to sensitive information shall include appropriate safeguards to ensure adequate protection of this information, such as security clearances and signed confidentiality statements.

e. Distinguish Contractor Employees from Federal Employees. There are fundamental legal and ethical distinctions between contractor employees and federal employees. Controls must be in place to identify contractor employees.

(1) When in EPA facilities, contractor employees must display badges that identify them as contractors. In meetings, on the phone, and in systems such as voice-mail and e-mail, contractor employees must identify themselves as such and provide the name of their firm. Contractor employees listed in EPA telephone and building directories must be differentiated from federal employees.

(2) Contractor work areas must be specifically identified with the name of the firm.

(3) Contractors shall not attend meetings as the official representative of an EPA organization.

(4) Contractor employees shall not attend EPA meetings unless the contractor’s participation is required for performance of the contract and this requirement is documented in the Statement of Work (SOW), Performance Work Statement (PWS), or technical direction.

8. ADDITIONAL GUIDANCE AND ASSISTANCE. For guidance and assistance in the following areas, contact the official(s) as listed below.

a. Questions concerning a specific contract, such as the scope of the contract, contract clauses, contractor conflicts of interest, technical direction versus technical communication, should be referred to the CO and COR. Always keep the CO advised of issues relating to interactions with the contractor.

b. The Office of General Counsel (OGC) can provide legal advice pertaining to procurement, appropriations, the release of sensitive information, ethics and other legal issues.

c. Report any information or allegations of criminal wrongdoing to the Office of

Inspector General’s (OIG) Hotline or the Office of Investigations directly. The OIG can assist with questions concerning criminal activity, on the part of a contractor or federal employee, including fraud, waste or abuse.

d. Your organization’s ethics official can assist with ethics issues such as social interactions with contractors, financial conflicts of interest, and accepting gifts.

e. Your organization’s Information Security Officer can assist with issues related to safeguarding sensitive information.

APPENDIX A

Examples of Technical Direction

Limited to Contracting Officers (CO) and Contracting Officer Representatives

(COR)

Governing Principle: Technical direction shall be issued by the CO or by the COR in accordance with EPAAR Clause 1552.237-71, Technical Direction. Technical direction is the clarification of important technical requirements within the scope of a contractual vehicle (i.e., contract, delivery/task order, or work assignment). It does not create new work or change the contract.

1. A CO/COR provides specific direction on a work assignment to a contractor such as anticipated delivery date(s) of samples, composition of samples or their matrix, and resolution of problems with samples such as interferences. (Conversely, the contractor asks these questions of the CO/COR)

2. While conducting fieldwork, a CO/COR provides specific direction to the contractor, such as locations for well installation, sampling locations, and technical corrective actions; all requirements are within the scope of the work in the Statement of Work (SOW)/Performance Work Statement (PWS).

3. After reviewing a draft report, which is a contract deliverable, the CO/COR requests the contractor to change the title on the report cover and to resubmit/correct two sections presented on two pages of a 50-page report.

4. A CO/COR meets with a contractor and provides specific contents of a briefing package which was identified as a task in the work assignment. No change in the task is made.

5. A CO/COR meets with a contractor to provide direction on a contract deliverable.

6. A CO/COR provides the contractor with new or updated information (with no cost impact) related to drawings which are referenced in the SOW/PWS.

APPENDIX B

Examples of Technical Communication and

Permissible Interactions with Contractors

Governing Principle: Technical communication is the informal exchange of information between federal employees and contractors. It does not provide contract direction to a contractor. These activities do not require the presence of a CO or COR.

1. A federal employee meets with a contractor and discusses capabilities and limitations of the organic analysis techniques used by the contractor.

2. A Federal employee discovers a contractor performing a task which the federal employee knows is not being done according to protocol; the federal employee identifies the discrepancy and suggests the contractor contact contract management or the COR. The federal employee immediately contacts the COR to alert him to the incident.

3. A federal employee requests and receives information and literature from various contractor-operated Agency hot lines and help lines.

4. A federal employee requests computer support from a contractor-operated help desk. Examples of computer support services are personal computer or Local

Area Network troubleshooting support, software support, personal computer training, data recovery assistance, and disk archiving and other similar information technology (IT) support as defined in a specific contract.

5. A federal employee requests technical assistance, graphic and website design, or IT user support services where the technical assistance is mandated and monitored under an existing contract.

6. A contractor participates in discussions at professional meetings attended by both federal employees and contractor employees (peer-to-peer exchanges).

7. A federal employee and a contractor ride together in a government-owned vehicle or the federal employee’s privately owned vehicle to a field site on official business. (Also see Appendix C, number 8, for a related, prohibited activity and OGC’s Frequently Asked Questions About Rides http://intranet.epa.gov/ogc/ethics/UpdatedFAQsOnRides061114.pdf for more information.)

8. Contractor employees attend an Agency office’s holiday party. The contractor’s time is not being billed to the government. The event may be on-site or off-site.

The party is not paid for with appropriated funds.

http://intranet.epa.gov/ogc/ethics/UpdatedFAQsOnRides061114.pdf

APPENDIX C

Examples of Prohibited Interactions with Contractors

1. A federal employee requests to have specific contractor employees assigned to work on a delivery order or work assignment.

2. A federal employee suggests a promotion or other performance award for certain contractor employees.

3. A federal employee sits in on an interview for potential contractor employees and offers suggestions on whom to hire, or is otherwise involved in the hiring of such employees.

4. A federal employee invites contractor employees to attend an EPA meeting or other work session not related to his or her contract performance.

5. A federal employee invites contractor employees to attend a holiday party or recreational activity while the contractor is on official time that is being billed to the government.

6. A contractor employee participates as a decision-making member of the EPA committee planning an EPA award ceremony.

7. A federal employee negotiates price or contract terms and conditions with contractor employees during the course of market research.

8. A federal employee asks for a ride with a contractor to a field site for a work-related purpose in a contractor-owned vehicle or a vehicle owned by a contractor employee. (See Appendix B, example 7, for a related, permissible activity and OGC’s Frequently Asked Questions About Rides http://intranet.epa.gov/ogc/ethics/UpdatedFAQsOnRides061114.pdf for more information.)

http://intranet.epa.gov/ogc/ethics/UpdatedFAQsOnRides061114.pdf