RELEASE: REP. HILL AWARDS GOLDEN FLEECE TO ENVIRONMENTAL PROTECTION AGENCY FOR THEIR FAILURE TO IDENTIFY AND PREVENT FRAUD
WASHINGTON, D.C.,
May 15, 2024
WASHINGTON, D.C. - Rep. French Hill (AR-02) named the Environmental Protection Agency (EPA) as the latest recipient of his Golden Fleece Award for their inability to identify and prevent collusion and other anticompetitive behaviors despite requirements to implement internal controls that manage the risk of fraud.
Rep. Hill said, “The Environmental Protection Agency (EPA) has clear instructions to implement internal controls that manage the risk of fraud and other anticompetitive behaviors, yet the agency has not taken the steps necessary to meet this requirement. Not only has the EPA failed to have searchable records and a basic system that attempts to proactively prevent improper payments before it makes and delivers awards, but the agency has also recently received two record windfall appropriations under President Biden whereby EPA will make more awards than ever. Without these basic control systems in place, EPA is unfit to dole out these taxpayer dollars. That is why I am naming EPA as the most recent recipient of my Golden Fleece Award for gearing up to deliver billions of dollars without meeting minimum risk management requirements on the front end."
Dear Administrator Regan:
---- I write you today to inform you that the U.S. Environmental Protection Agency (EPA) is the most recent recipient of my Golden Fleece Award. I am awarding this to EPA for your agency’s inability to identify and prevent collusion and other anticompetitive behaviors despite requirements to implement internal controls that manage the risk of fraud.
---- In March 2024, the EPA’s Office of Inspector General (OIG) released a Management Implication Report (Report No. 24-N-0027) which identified that the Office of Acquisition Solutions (OAS) “does not does not store and organize all of its procurement data in a manner that allows for proactive oversight and program management that could detect and prevent fraudulent, collusive behavior, such as bid rigging, price fixing, or other anticompetitive practices”. OAS not organizing contract solicitation data in a way that enables proactive oversight and fraud detection exposes EPA to unnecessary risk and harm. Without detection methods in place, EPA is particularly vulnerable to overpaying for essential goods and services and succumbing to collusive behavior, such as bid rigging, price fixing, or other anticompetitive practices.
---- EPA stores its procurement data within the EPA Acquisition System (EAS), an automated contract writing and management system that incorporates EPA policies, guidelines, and business processes under OAS. However, despite requirements to establish internal controls that would mitigate the risk of illegal fraud and ensure proper oversight of agency solicitations, EAS does not utilize its ability to extract data fields from PDFs making data stored unsearchable. Further, OAS staff were unaware of system features to compare vendor pricing without opening multiple proposal documents that could be expanded to create a structured data form for prices and other data. By not implementing simple and straightforward approaches to build a stronger data system, EPA is being wasteful, negligent, and causing the costs of goods and services to rise.
---- EPA’s incompetence regarding detection of anticompetitive and collusive bidding amongst their potential vendors is harmful to the American taxpayer. Instead of implementing straightforward and simple approaches that will position EPA to address these concerns, OAS “have generally relied on whistleblowers, such as contractor employees, to provide [sic] information of possible vendor collusion”. Since fiscal year 2017, EPA has awarded over 3,500 competitively bid, negotiated contracts worth more than $2 billion for goods and services, without any referral or tips related to procurement fraud. (citation, page 1 and 6) Unsurprisingly, this approach has not worked.
---- EPA’s lackluster methods to manage the risk of fraud is especially concerning in the wake of recent appropriations allocated to EPA. As a part of the Infrastructure Investment and Jobs Act, EPA received $60 billion; then, EPA received an additional $41.5 billion from the Inflation Reduction Act. EPA has already begun to award these funds and to establish the processes to provide even more in the future.
----This issue concerns my colleagues in Congress as well. In April 2023, Representative Cathy McMorris Rodgers (R-WA), Chairwoman of the House Energy and Commerce Committee, along with former Rep. Bill Johnson (R-OH) requested from EPA “an explanation of the controls, monitoring, and other oversight in place for EPA to manage awards and prevent waste, fraud, and abuse” among other items. (letter) With inexperienced participants, the massive increase in funding, and EPA’s plans to distribute funding quickly, the risks are imminent.
---- I urge EPA to immediately make the changes necessary to address these concerns and to begin implementing these simple and effective solutions. Rather than responding reactively and trying to re-collect funds that have already been awarded, it would be a better and more efficient use of taxpayer dollars to develop automated and proactive fraud detection practices that could potentially detect and prevent illegal and fraudulent behavior before a contract is awarded and money is dispersed.
---- I am committed to ensuring effective fiscal practices at our Nation’s federal agencies. Should you require any additional authority from Congress to address these concerns, I urge you to notify us as soon as possible. I would also welcome any technical assistance you could provide to Congress to correct statutory issues that may have contributed to this problem. Thank you for your consideration and I look forward to working with you to address this important issue.
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