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U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF INSPECTOR GENERAL

The State of Colorado 

Did Not Fully Assure That 

Funds Intended to Treat 

Mining Wastes and Remove 

Contaminants from Water 

Were Effectively Spent 

Report No. 14-R-0032 November 19, 2013 

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Abbreviations 

A/E Architectural Engineer 

CA Cooperative Agreement 

CDPHE Colorado Department of Public Health and Environment 

CERCLA Comprehensive Environmental Response, Compensation and Liability Act 

CFR Code of Federal Regulations 

CMGC Construction Manager General Contractor 

EPA U.S. Environmental Protection Agency 

IPA Independent Public Accounting 

RFP Request for Proposal 

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write: EPA Inspector General Hotline 

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Mailcode 2431T 

Washington, DC 20460 Washington, DC 20460 
 

U.S. Environmental Protection Agency 14-R-0032 

November 19, 2013 Office of Inspector General 

At a Glance
 

Why We Did This Review 

The U.S. Environmental 

Protection Agency (EPA) 

awarded American Recovery 

and Reinvestment Act 

cooperative agreement (CA) 

2S-97842001 to the Colorado 

Department of Public Health 

and Environment (CDPHE). 

The Office of Inspector General 

(OIG) contracted with Ollie 

Green & Company, an 

independent public accounting 

(IPA) firm, to audit the 

agreement. The objectives of 

the audit were to determine 

whether CDPHE’s 

procurements and use of force 

account under the CA complied 

with the applicable federal 

requirements and whether the 

objectives of the CA were met. 

This report addresses the 

following EPA themes: 

 Making a visible difference 

in communities across the 

country. 

 Protecting water: A 

precious, limited resource. 

 Launching a new era of 

state, tribal and local 

partnerships. 

For further information, 

contact our public affairs office 

at (202) 566-2391. 

The full report is at: 

www.epa.gov/oig/reports/2014/ 

20131119-14-R-0032.pdf 

The State of Colorado Did Not Fully Assure That 

Funds Intended to Treat Mining Wastes and Remove 

Contaminants from Water Were Effectively Spent 

 What the IPA Auditor Found 

The IPA found that CDPHE generally complied with CDPHE did not fully 

Colorado’s state procurement policies and procedures	 comply with the CFR, 

resulting in $2,593,495 as required by Code of Federal Regulations (CFR) of questioned costs under 40 CFR §35.6550(a). The IPA also found that claimed under the CA. CDPHE substantially complied with 40 CFR Part 35, 

Subpart O. The IPA determined that CDPHE did not 

always comply with the cost or price analysis requirements and did not include 

language in bid proposals designating the date, time and place of bid openings,
 

as required by State of Colorado Procurement Rule R-24-103-202a-08(b). 

In addition, the IPA found CDPHE did not always ensure that 40 CFR Part 35, 

Subpart O, required language was included in bid proposals and contracts. 

The IPA is responsible for the content of the audit report. The OIG performed the 

procedures necessary to obtain reasonable assurance about the IPA’s 

independence, objectivity, qualifications, technical approach and audit results. 

Having done so, the OIG accepts the IPA’s conclusions and recommendations.

 Recommendations and Planned Corrective Actions 

The IPA’s report recommended that the Region 8 Regional Administrator recover 

the questioned costs of $2,593,495, unless CDPHE provides documentation to 

demonstrate that the prices for the contracts and subcontracts in question are fair 

and reasonable. The IPA’s report also recommended the region require CDPHE 

to implement written procedures and controls, to ensure compliance for all future 

request for proposals and contracts under 40 CFR, Subpart O, CAs, by requiring: 

 A cost or price analysis is conducted in accordance with Subpart O 

requirements. 

 The date, time and place of all bid openings are designated in accordance 

with state of Colorado procurement rules. 

 Subpart O contract language is included. 

In addition, the IPA’s report recommended that the region require CDPHE to 

modify the construction manager contractor contract and the architectural and 

engineering contracts awarded under the CA to include the 10-year records 

retention requirement under 40 CFR §35.6705(b) and the contract language 

requirement under 40 CFR §35.6550. 

CDPHE agreed with the finding regarding omission of required contract language, 

but has not proposed any corrective action. Region 8 did not provide a response 

to the draft report. 
 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

THE INSPECTOR GENERAL 

November 19, 2013 

MEMORANDUM 

SUBJECT: The State of Colorado Did Not Fully Assure That Funds Intended to Treat 

Mining Wastes and Remove Contaminants from Water Were Effectively Spent 

Report No. 14-R-0032 

FROM:	 Arthur A. Elkins Jr. 

TO:	 Shaun McGrath, Regional Administrator 

Region 8 

This memorandum transmits the final report for the audit of American Recovery and Reinvestment Act 

cooperative agreement 2S-97842001 awarded to the Colorado Department of Public Health and 

Environment. 

The independent public accounting (IPA) firm Ollie Green & Company conducted this audit on behalf 

of the Office of Inspector General (OIG) of the U.S. Environmental Protection Agency (EPA). The audit 

was required to be conducted in accordance with Government Auditing Standards, issued by the 

Comptroller General of the United States. The IPA is responsible for the audit report and the 

conclusions expressed in that report. The OIG performed the procedures necessary to obtain a 

reasonable assurance about the IPA’s independence, objectivity, qualifications, technical approach and 

audit results. Having done so, OIG accepts the IPA’s conclusions and recommendations. 

The IPA’s full report is attached. The OIG also prepared a status of recommendations and potential 

monetary benefits table that summarizes the findings the IPA has identified and the corrective actions it 

recommends. The recommendations represent the opinion of the IPA and the OIG, and do not 

necessarily represent the final position of the EPA. EPA managers, in accordance with established audit 

resolution procedures, will make a final determination on matters in this report. 

Action Required 

In accordance with EPA Manual 2750, you are required to provide us your proposed management 

decision on the findings and recommendations contained in this report before you formally complete 

resolution with the recipient. Your proposed management decision is due in 120 days, or on 

March 19, 2014. To expedite the resolution process, please also email an electronic version of your 

management decision to adachi.robert@epa.gov. 

Your response will be posted on the OIG’s public website, along with our memorandum commenting on 

your response. Your response should be provided as an Adobe PDF file that complies with the 

accessibility requirements of Section 508 of the Rehabilitation Act of 1973, as amended. The final 
 

 

response should not contain data that you do not want to be released to the public; if your response 

contains such data, you should identify the data for redaction or removal. We have no objection to the 

further release of this report to the public. This report will be available at http://www.epa.gov/oig. 

If you or your staff have any questions regarding this report, please contact Richard Eyermann, 

Acting Assistant Inspector General for Audit, at (202) 566-0565 or eyermann.richard@epa.gov; or 

Robert Adachi, Product Line Director, at (415) 947-4537 or adachi.robert@epa.gov. 
 

Audit of American Recovery and 


Reinvestment Act Funded Cooperative 


Agreement No. 2S-97842001 awarded to the Colorado 


Department of Public Health and Environment 

September 19, 2013 

Mr. Robert Adachi, Director of Forensic Audits 

U.S. Environmental Protection Agency 

Office of Inspector General 

San Francisco, CA 94105 

Mr. Adachi: 

Please find attached a copy of the final audit report of our Recovery Act audit of Cooperative 

Agreement No. 2S-97842001 awarded to Colorado Department of Public Health (CDPHE) on 

May 1, 2009. Our audit was conducted in accordance with the terms and conditions of 

Contract No. EP-G12H-00489 dated August 22, 2012 and Government Auditing Standards, 

Revised 2011. 

We appreciate the opportunity to have worked with the U.S Environmental Protection 

Agency, Office of Inspector General. Please contact me with any questions you may 

have. 

Sincerely, 

Ollie Green, MBA, CPA 

Managing Partner 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Audit of American Recovery and Reinvestment Act 14-R-0032 

Cooperative Agreement No. 2S-97842001 Awarded to the 

Colorado Department of Public Health and Environment 

Table of Contents 

Introduction ................................................................................................................. 1 

CDPHE Did Not Include Language in Bid Proposals Designating the Date, 

CDPHE Did Not Always Ensure That Required Language Was Included in 

Purpose................................................................................................................... 1 

Background ............................................................................................................. 1 

Scope and Methodology ......................................................................................... 1
 

Results of the Audit .................................................................................................... 3 

Procurement ............................................................................................................ 3 

CDPHE Did Not Always Comply With Cost or Price Analysis Requirements. .. 3
 

Time and Place of Bid Openings ..................................................................... 5
 

Bid Proposals and Contracts ............................................................................. 5
 

Force Account Activity ............................................................................................. 9 

Cooperative Agreement Objectives ........................................................................ 9 

Recommendations...................................................................................................... 9 

Agency and Recipient Comments............................................................................. 10 

Ollie Green & Company Response............................................................................ 11 

Appendix 

A CDPHE’s Response to the Draft Report ............................................................. 13 
 

 

Introduction 

Purpose 

The purpose of our audit was to determine whether the Colorado Department of 

Public Health and Environment (CDPHE) procurements and the use of force 

account under Cooperative Agreement (CA) 2S-97842001 complied with Title 40 

Code of Federal Regulations (CFR) Part 35, Subpart O, requirements. The 

purpose also included determining whether the objectives of the cooperative 

agreement (CA) were met. 

Background 

CDPHE was awarded CA No. 2S-97842001 for $17 million by the U.S. 

Environmental Protection Agency (EPA) on May 1, 2009, for remediation of the 

Summitville Mine Superfund site. The total amount of the CA is $18,888,888. 

The federal share is 90 percent or $17 million funded with American Recovery 

and Reinvestment Act (Recovery Act) monies and the state contribution is 

10 percent or $1,888,888. The period of performance was from July 31, 2009, 

through September 30, 2012. Funding for this CA was part of the $600 million 

Superfund hazardous site cleanup funded by the Recovery Act. 

Scope and Methodology 

Our Recovery Act performance audit covered the period from July 31, 2009, 

through September 30, 2012. We conducted our fieldwork at CDPHE in Denver, 

Colorado, from October 1 to October 5, 2012, and from December 10 to 

December 13, 2012. The scope of our audit was limited to determining whether: 

 CDPHE’s procurements under the CA were conducted in accordance with 

Title 40 CFR Part 35, Subpart O. 

 CDPHE’s force account complied with Title 40 CFR Part 35, Subpart O; 

 The objectives of the CA were met. 

Our scope included the review of CDPHE’s procurement processes and controls 

related to Recovery Act CA transactions. Our work included reviewing CDPHE’s 

solicitation, evaluation, tabulation and award processes related to CA 

2S-97842001 procurements. CDPHE used a Construction Manager General 

Contractor (CMGC) vehicle to administer and perform the work. CDPHE 

indicated that this contracting method was designed to increase the speed of 

project delivery and reduce inherent risk and increase flexibility for the recipient. 

When the CMGC method is used, the CMGC is allowed to bid on subcontract 

requirements. CDPHE staff said the CMGC is one of the Integrated Project 

Delivery methods approved by the Colorado State Legislature in 2007. 

14-R-0032 1 
 

 

 

Our audit methodology included conducting structured interviews and discussions 

with personnel at CDPHE and the CMGC to gain an understanding about the 

internal controls, processes, systems and procedures used to capture measure and 

report CDPHE’s procurements and force account activity and how CDPHE met 

the objectives of the CA. 

We requested, received and reviewed documentation from CDPHE to assess 

CDPHE’s procurement processes and force account activity. This documentation 

included the State’s procurement policies and procedures and a written 

description of the internal controls that were in place during the audit period 

designed to detect and/or prevent potential errors related to the procurement 

process. We reviewed procurement documentation for the two prime contracts 

under the CA and 14 judgmentally selected subcontracts to ensure compliance 

with federal procurement regulations and state policies and procedures. We also 

requested, received and reviewed the Notice of Final Completion, Notice of 

Approval of Occupancy, contractor invoices and other documentation required to 

verify that the program objectives were met. 

A performance audit includes gaining an understanding of internal controls 

considered significant to the audit objectives, testing controls, and testing 

compliance with significant laws, regulations and other requirements. For this 

engagement, we obtained an understanding of CDPHE’s procurement processes 

and internal controls. The testing of internal controls over this process was not 

determined to be significant to our audit objectives. 

We conducted this performance audit in accordance with generally accepted 

government auditing standards. Those standards require that we plan and perform 

the audit to obtain sufficient, appropriate evidence to provide a reasonable basis 

for our findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provided a reasonable basis for our findings and 

conclusions based on our audit objectives. 

14-R-0032 2 
 

 

Results of the Audit 

Procurement 

We found that CDPHE generally complied with Colorado’s state procurement 

policies and procedures, as required by 40 CFR § 35.6550(a), which referenced 

40 CFR § 31.36(a). We also found substantial compliance with 40 CFR Part 35, 

Subpart O. However, we found that: 

	 CDPHE did not always comply with cost or price analysis requirements. 

	 CDPHE did not include language in bid proposals designating the date, 

time and place of bid openings. 

	 CDPHE did not always ensure that required language was included in bid 

proposals and contracts. 

CDPHE Did Not Always Comply With Cost or Price Analysis Requirements 

CDPHE did not always comply with the federal and state requirements for cost or 

price analysis when awarding contracts, contract modifications and subcontracts. 

Our audit found that CDPHE awarded a follow-on contract for architectural 

engineering (A/E) services without documented cost or price analysis. CDPHE 

also issued two contract modifications to the CMGC contractor without cost or 

price analysis. In addition, CDPHE’s CMGC contractor awarded a subcontract 

without cost or price analysis. These practices did not comply with the federal 

procurement requirements under 40 CFR Part 35, Subpart O and state regulations. 

These instances of noncompliance occurred because CDPHE did not have 

adequate controls to ensure compliance with both federal and state procurement 

requirements. In addition, CDPHE incorrectly determined that competition had 

been adequate for the contract modifications and subcontract. Due to the lack of 

cost or price analysis, CDPHE is unable to demonstrate that the prices for the 

contract, contract modifications and subcontract were fair and reasonable. As a 

result, we question $2,593,495 claimed under the CA. 

Architectural Engineer Contract 

CDPHE awarded an $806,250 follow-on contract for architectural engineering 

services in 2009 and did not maintain the required cost analysis documentation. 

CDPHE indicated that the contractor was originally awarded a competitive 

contract for A/E services for this project in 2002 and provided A/E services until 

funding ended in March 2004. CDPHE then awarded a follow-on contract to the 

same A/E firm for $806,250 in 2009 with Recovery Act funding to complete this 

project. CDPHE indicated that it performed a perfunctory cost analysis for the 

2009 A/E procurement to identify the benefits of the procurement but did not 

14-R-0032 3 
 

 

maintain the documentation. Title 40 CFR § 35.6705 requires the recipient to 

maintain all records for 10 years following submission of the final Financial 

Status Report. As a result, we question $806,250 claimed under the CA for A/E 

costs. 

Modifications to the CMGC Contract 

CDPHE issued two contract modifications with Recovery Act funding with a total 

amount of $1,542,000 to the CMGC contract without cost or price analysis. This 

work was bid out as subcontract work and the CMGC contractor was permitted to 

compete. As the CMGC contractor was the only responsive bidder, a contract 

modification was issued to the CMGC contractor for the work. Title 40 CFR § 

35.6585(a) and State of Colorado Procurement Manual Chapter III Sections 9 and 

10 require the recipient to conduct and document a cost or price analysis in 

connection with every procurement action, including contract modifications. 

According to CDPHE, since there were multiple bidders, the work was considered 

competitively bid and cost analysis would not be necessary. We disagree with 

CDPHE. Even though bids were received from multiple sources, the only 

responsive bidder was the CMGC contractor. All other bids were incomplete; 

therefore, CDPHE and the CMGC could not have used those incomplete bids to 

justify the fairness and reasonableness of the price for the contract modifications. 

Title 40 CFR § 35.6565(d) (1) (iv) allows for noncompetitive procurement if 

competition is determined to be inadequate after solicitation from a number of 

sources. However, 40 CFR § 35.6565(d) (2) requires a cost analysis to be 

conducted for such procurement. As a result, we question $1,542,000 claimed 

under the CA for modifications to the CMGC contract. 

Subcontract 

The CMGC contractor issued a subcontract with Recovery Act funding in the 

amount of $245,245 to the only responsive bidder without cost or price analysis. 

Title 40 CFR § 35.6565(d) (2) requires a cost analysis to be conducted when 

using noncompetitive procurement. State of Colorado Procurement Manual 

Chapter III Sections 9 and 10 require grantees and subgrantees must perform a 

cost or price analysis in connection with every procurement action. According to 

CDPHE, since there were multiple bidders, the work was considered 

competitively bid and cost analysis would not be necessary. We disagree with 

CDPHE. Even though bids were received from multiple sources, the only 

responsive bidder was the winning subcontractor. All other bids were incomplete; 

therefore, CMGC could not have used those incomplete bids to justify the fairness 

and reasonableness of the price of the subcontract. Title 40 CFR § 35.6565(d) (1) 

(iv) allows for noncompetitive procurement if competition is determined to be 

inadequate after solicitation from a number of sources. However, 40 CFR § 

35.6565(d) (2) requires a cost analysis to be conducted for such procurement. As 

a result, we question $245,245 claimed under the CA for the subcontract costs. 

14-R-0032 4 
 

 

 

 

 

CDPHE Did Not Include Language in Bid Proposals Designating the Date, 

Time and Place of Bid Openings 

Our audit could not determine that CDPHE had included language in its Request 

for Proposals (RFP) designating the date, time and place where the Bids would be 

publicly opened. State of Colorado Procurement Rule R-24-103-202a-08 (b) 

specifies that “all bid openings shall be open to the public...after the time, and at 

the place, designated in the Invitation for Bids”. Our audit identified the CMGC 

contract, six subcontracts and eight contract modifications for which the RFPs did 

not include date, time and place of bid opening. 

CDPHE indicated that advertisements and notifications included date and place to 

deliver the bid proposal but did not include the actual opening time. Our review of 

the RFP did not find the date, time or place of the bid opening. CDPHE provided 

no evidence that designated the date, time and place of the bid opening. These 

instances of noncompliance occurred because CDPHE did not have adequate 

controls in place to ensure that the date, time and place for bid opening are 

included in its bid proposals. As a result, bidders were uninformed as to the bid 

opening information and the required transparency in the procurement process 

was not achieved. 

CDPHE Did Not Always Ensure That Required Language Was 

Included in Bid Proposals and Contracts 

CDPHE did not ensure that language required by Title 40 CFR Part 35, Subpart 

O, was included in all bid proposals, prime and subcontracts. Our audit found five 

instances where required bid proposal and/or contract language were omitted. 

To conduct our work, we requested, received and reviewed a judgmental sample 

of bid proposals and contract awards to determine compliance with the language 

requirements of Title 40 CFR 35, Subpart O. Our audit found that language 

related to the following requirements was omitted from bid proposals and 

contracts: 

 Potentially Responsible Party Relationships (40 CFR § 

35.6550(b)(1)(i),(ii)&(iii)) 

 Contractor Data (40 CFR § 35.6550(b)(2)(ii)(A)) 

 Employment Language (40 CFR § 35.6550(b)(2)(ii)(B)) 

 Certification of Independent Price Determination (40 CFR § 35.6550(b)(3)) 

 Ten (10) Year Records Retention Requirement (40 CFR § 35.6705(b)) 

14-R-0032 5 
 

 

 

See detailed findings below: 

Potentially Responsible Party Relationships language required by 

Title 40 CFR § 35.6550. 

Our audit found that bid proposals submitted by the CMGC contractor and the 

A/E contractor omitted the required Potentially Responsible Party Relationships 

language required by Title 40 CFR § 35.6550. 

Title 40 CFR § 35.6550(b) (1) (i), (ii) and (iii) require the following disclosures in 

bid proposals: 

(i) Information on its financial and business relationship with all Potentially 

Responsible Parties at the site and with the contractor's parent companies, 

subsidiaries, affiliates, subcontractors, or current clients at the site. 

Prospective contractors under a Core Program Cooperative Agreement 

must provide comparable information for all sites within the recipient's 

jurisdiction. (This disclosure requirement encompasses past financial and 

business relationships, including services related to any proposed or 

pending litigation, with such parties); 

(ii) Certification that, to the best of its knowledge and belief, it has disclosed 

such information or no such information exists; and 

(iii)A statement that it shall disclose immediately any such information 

discovered after submission of its bid or proposal or after award. The 

recipient shall evaluate such information and if a member of the contract 

team has a conflict of interest which prevents the team from serving the 

best interests of the recipient, the prospective contractor may be declared 

non-responsible and the contract awarded to the next eligible bidder or 

offeror. 

The CDPHE audit coordinator indicated that CDPHE concurs with this finding 

and said that it appears that CDPHE failed to include this language as part of the 

procurement. He also indicated that typically, the EPA grant funded contracts 

issued by CDPHE contain an exhibit outlining all of the federal grant 

requirements, including language regarding potentially responsible party 

relationships. Our audit found that this instance of noncompliance occurred 

because CDPHE did not have adequate controls in place to ensure that PRP 

language is included in all bid proposals. As a result of these omissions, CDPHE 

has no assurance that the two contractors had no potentially responsible party 

relationships under this CA. 

14-R-0032 6 
 

 

 

Contractor Data Language Required by 40 CFR § 35.6550(b) (2) (ii) (A). 

Our audit found that the contracts awarded to the CMGC contractor and the A/E 

contractor did not include contractor data language required by 40 CFR § 

35.6550(b) (2) (ii) (A). Title 40 CFR § 35.6550(b) (2) (ii) (A) requires the 

following disclosure in contracts: 

The contractor shall not provide data generated or otherwise obtained in the 

performance of contractor responsibilities under a contract to any party other 

than the recipient, the EPA, or its authorized agents for the life of the contract 

and for a period of five years after completion of the contract. 

The CDPHE audit coordinator indicated that this language is typically included in 

the EPA grant funded contracts as an exhibit. However due to an oversight by 

CPDHE, the federal requirements exhibit was not included in the contract. He 

also indicated that CDPHE seems to have substituted an exhibit that outlines 

specific Recovery Act requirements rather than including both the federal 

requirements and Recovery Act requirements as separate exhibits. Finally, he 

indicated that this language has been included in past contracts and will be 

included in future contracts. Our audit found that this instance of noncompliance 

occurred because of a lack of internal controls to ensure that contractor data 

language is included in all contracts. As a result of this departure from the 

contractor data requirements of 40 CFR § 35.6550(b) (2) (ii) (A), CDPHE had 

no assurances that contractor data will not be provided to unauthorized parties. 

Employment Language Required by 40 CFR § 35.6550(b) (2) (ii) (B). 

Our audit found that contracts awarded to the CMGC contractor and the A/E 

contractor did not include the Employment Language required by 40 CFR § 

35.6550(b) (2) (ii) (B). Our audit also found that this language was omitted from 

six subcontracts and eight modifications to the CMGC contract where the CMGC 

was competitively awarded subcontract work. 

Title 40 CFR § 35.6550(b) (2) (ii) (B) requires the following contract disclosure: 

The contractor shall not accept employment from any party other than the 

recipient or federal agencies for work directly related to the site(s) covered 

under the contract for five years after the contract has terminated. The 

recipient agency may exempt the contractor from this requirement through a 

written release. This release must include the EPA’s concurrence. 

14-R-0032 7 
 

 

The CDPHE audit coordinator indicated that this language is usually included in 

the EPA grant funded contracts but was not in this case due to an oversight. Our 

audit found that this instance of noncompliance was due to a lack of internal 

controls related to contract disclosure requirements. As a result, CDPHE had no 

assurances that the employment requirements of Title 40 CFR § 35.6550(b) (2) 

(ii) (B), will be followed. 

Certification of Independent Price Determination Language Required by 

40 CFR § 35.6550(b) (3). 

Our audit found that the bid proposals for the CMGC contractor and the A/E 

contractor did not include the Certification of Independent Price Determination 

language as required by 40 CFR § 35.6550(b) (3). 

Title 40 CFR § 35.6550(b) (3) requires the following: 

The recipient must require that each contractor include in its bid or proposal a 

certification of independent price determination. This document certifies that 

no collusion, as defined by federal and state antitrust laws, occurred during 

bid preparation. 

The CDPHE audit coordinator indicated that this requirement is usually included 

in a contract exhibit outlining federal requirements as opposed to being part of the 

requirements for bid proposals. He also indicated that this language was not 

included in either contract due to an oversight by CDPHE. Our audit found that 

this instance of noncompliance occurred because CDPHE did not have controls in 

place to ensure that independent price determination language was always 

included in bid proposals. As a result, CDPHE had no assurance that bid prices 

were determined independently without collusion. 

Ten (10) Year Records Retention Requirement Language Required by 

40 CFR § 35.6705(b) 

Our audit found that CDPHE did not include the 10 year records retention 

requirement per 40 CFR § 35.6705(b) in the CMGC contract. Instead, the CMGC 

contract specified only a three (3) year records retention period. In addition, 

CDPHE did not include the records retention requirement in the A/E contract, 

contrary to 40 CFR § 35.6705(b). 

Title 40 CFR § 35.6705(b) requires the following: 

The recipient must maintain all records for 10 years following submission of 

the final Financial Status Report unless otherwise directed by the EPA award 

14-R-0032 8 
 

 

official, and must obtain written approval from the EPA award official before 

destroying any records. If any litigation, claim, negotiation, audit, cost 

recovery, or other action involving the records has been started before the 

expiration of the ten-year period, the records must be retained until 

completion of the action and resolution of all issues which arise from it, or 

until the end of the regular ten-year period, whichever is later. 

The CDPHE audit coordinator indicated that this language is usually included in 

the EPA grant funded contracts but was not in this case due to an oversight by 

CDPHE. Our audit found that these instances of noncompliance occurred because 

CDPHE did not have controls in place to ensure that the 10-year records retention 

language is included in all contracts. As a result, CDPHE has no assurances that 

the two contractors are retaining their CA records for the required 10-year period. 

Force Account Activity 

Title 40 CFR § 35.6500(a) defines force account work as “the use of the 

recipient’s own employees or equipment for construction, construction-related 

activities (including architecture and engineering services), or repair or 

improvement to a facility.” Our audit found that CDPHE had no force account 

activity related to the CA. 

Cooperative Agreement Objectives 

The objective of the CA was to construct the Summitville Water Treatment 

Facility. The period of performance was from July 31, 2009 to September 30, 

2012. Our audit found that CDPHE completed the construction of the Water 

Treatment Plant in accordance with requirements of the CA. 

Recommendations: 

We recommend that the Regional Administrator, Region 8: 

1.	 Require CDPHE to reimburse the EPA $2,593,495 ($806, 250 + 

$1,542,000 + $245,245) for the A/E contract, two CMGC contract 

modifications and one subcontract where cost analyses were not provided 

for all procurements as required by Title 40 CFR § 35.6585(a) and 40 CFR 

§ 35.6565(d) (2), unless CDPHE provides documentation to demonstrate 

that the prices for these contracts and subcontracts are fair and reasonable. 

2.	 Require CDPHE to implement written procedures and controls to ensure 

that a cost or price analysis is conducted for each future noncompetitive 

contract awarded in accordance with the requirements of Title 40 CFR § 

35.6585(a) and 40 CFR § 35.6565(d) (2) and to retain copies of all cost or 

14-R-0032 9 
 

 

price analyses conducted and other CA records in accordance with the 

requirements of Title 40 CFR § 35.6705(b). 

3. Require CDPHE to implement written controls and procedures to ensure 

that the date, time and place of all bid openings are designated in all future 

RFPs as required by of State of Colorado Procurement Rule R-24-103-

202a-08 (b). 

4. Require CDPHE to implement written controls and procedures to ensure 

that language is included in all future bid proposals and contracts as 

required by Title 40 CFR Part 35, Subpart O. 

5. Require CDPHE to modify the CMGC and A/E contracts awarded under 

the CA to include the 10-Year Records Retention language as required by 

Title 40 CFR § 35.6705(b) and the contract language requirement under 

Title 40 CFR § 35.6550. 

Agency and Recipient Comments 

OG&C issued a draft report on June 13, 2013 and provided copies to CDPHE, 

Region 8 and the OIG. We received comments on the draft report from CDPHE 

on July 29, 2013. Region 8 did not provide a written response. The exit 

conference was conducted with CDPHE, Region 8 and OIG on August 15, 2013 

via teleconference. 

CDPHE provided a general response to address multiple findings and also
 

provided specific responses to other findings as appropriate to respond to other 

issues or to provide additional information. Out of the four findings and six 

recommendations, CDPHE concurred with only one finding and the related 

recommendations regarding missing required language in the bid proposals and 

contracts. CDPHE did not concur with the remaining findings and 

recommendations.
 

In its general response, CDPHE stated that the 40 CFR Part 35 regulations apply 

only to the recipient and not to the recipient’s contractor. CDPHE stated that their 

procurement process ended when the CMGC contract was awarded. 

In its response to finding 1a regarding the lack of a cost or price analysis for the 

A/E contract, CDPHE disagreed that a noncompetitive contract was awarded. 

In its responses to findings 1b, 1c, and finding 2, CDPHE referenced to its general 

response, which states that the requirements do not apply. 

In its response to finding 3 regarding the lack of accident and catastrophic loss 

insurance by some subcontractors, CDPHE stated that CDPHE has no duty to 

require subcontractors to provide this insurance. CDPHE concurred with 

14-R-0032 10 
 

 

finding 4 related to the omission of specific required language in some bid 

proposals and contracts. 

The full text of CDPHE’s written response is attached in Appendix A. 

Ollie Green & Company Response 

We disagree with CDPHE’s position that 40 CFR Part 35 regulations cited in the 

report apply only to the recipient and not to the recipient’s contractor. Under the 

procurement system standards of 40 CFR § 35.6650(a)(1), the state is required to 

comply with some of the procurement requirements under Subpart O in addition 

to the basic procurement policies and procedures described in 40 CFR § 31.36(a), 

which allows the state to follow its own procurement policies. Some of these 

additional Subpart O requirements include 40 CFR § 35.6565(d) and 40 CFR § 

35.6550(b), which requires the state to ensure that its contractors comply with the 

cost or price analysis requirements under 40 CFR § 35.6585. We do not agree 

with CDPHE’s assertion that the procurement process ended upon award of the 

contact because CDPHE had the responsibility to ensure contractor compliance 

with applicable contracting and subcontracting requirements of 40 CFR Part 35, 

as detailed in Appendix A Notes 3 to 6. 

Regarding CDPHE’s response to finding 1a related to the lack of a cost or price 

analysis for the A/E contract, it is important to note that this finding does not take 

issue with the method of procurement for the contract. We acknowledge that the 

Federal and State regulations and statutes provide for use of the same engineer. 

The audit issue is the lack of a cost or price analysis. Title 40 CFR § 35.6585 (a) 

states that “the recipient must conduct and document a cost or price analysis in 

connection with every procurement action ...” Awarding a follow-on contract is a 

procurement action; therefore, cost or price analysis is required. During the audit 

CDPHE stated that it performed the cost analysis but did not retain it. The data 

provided in CDPHE’s response is a justification for the use of the same engineer 

but is not a cost analysis. These costs were questioned in the report because 

CDPHE could not provide a cost or price analysis for the A/E contract, as 

required. No change is made to this audit finding. 

We disagree with CDPHE on findings 1b and 1c that the cost or price analysis 

requirement does not apply to contract modifications and subcontract awards. 

Title 40 CFR § 35.6585 (a) states that “the recipient must conduct and document a 

cost or price analysis in connection with every procurement action including 

contract modification.” In addition, 40 CFR § 35.6550(b) (4) states that the 

recipient must require its contractor to comply with the requirements in 

40 CFR § 35.6610, which includes the cost or price analysis requirement under 

40 CFR § 35.6585. Therefore, the cost or price analysis requirement applied to 

contract modification and subcontract award. No change has been made to this 

audit finding. 

14-R-0032 11 
 

 

 

 

We disagree with CDPHE on finding 2 that the bid opening requirements do not 

apply. As stated in the draft report, State of Colorado Procurement Rule R-24-

103-202b-08 specifies that “bids and modifications shall be opened publicly, in 

the presence of one or more witnesses, at the time and place designated in the 

Invitation for Bids.” CDPHE’s response did not resolve this issue. 

We agree with CDPHE’s position on Finding 3 that they are not responsible for 

ensuring subcontractor insurance for accident and catastrophic insurance 

coverage. This finding and the related recommendation will be deleted from the 

report. 

No change has been made to audit finding 4 regarding omission of specific 

required language in some bid proposals and contracts because CDPHE concurred 

with this finding. 

Details of our responses to CDPHE’s comments are embedded as text boxes in 

Appendix A. 

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Appendix A 

CDPHE’s Response to the Draft Report 

July 23, 2013 

Mr. Ollie Green 

Ollie Green & Company 

1300 S. Fourth Street, Suite 100 

Louisville, Kentucky 40208 

RE: Audit of American Recovery and Reinvestment Act Cooperative Agreement No. 

2S-97842001 Awarded to the Colorado Department of Public Health and 

Environment - CDPHE Response to Draft Audit Report. 

Dear Mr. Green: 

Attached please find Colorado Department of Public Health and Environment’s (“CDPHE”) 

response to your June 13, 2013 Draft Report regarding the Audit of American Recovery and 

Reinvestment Act, Cooperative Agreement No. 2SS-97842001, Awarded to the Colorado 

Department of Public Health and Environment”, EPA Recovery Act audit of Cooperative 

Agreement No 2S-97842001, for the Summitville Mine Superfund Site.
 

CDPHE appreciates the opportunity to respond and provide additional information and 

clarification before you finalize the audit report. CDPHE reserves the right to supplement this 

response as CDPHE further reviews the material or if additional information becomes available. 

If you have any questions regarding this response, please contact me at 303-692-3404.
 

Sincerely, 

Douglas C. Jamison
 

Superfund/Brownfields Unit Leader 

Hazardous Material and Waste Management Division
 

14-R-0032 13 
 

 

 

Summitville Recovery Act Procurement Audit 

Cooperative Agreement No. 2S-97842001 

CDPHE Response to Draft Audit Report 

July 23, 2013 

In the draft report for the “Audit of American Recovery and Reinvestment Act, Cooperative 

Agreement No. 2SS-97842001, Awarded to the Colorado Department of Public Health and 

Environment”, the auditor acknowledges CDPHE generally complied with Colorado’s state 

procurement policies and procedures and substantially complied with 40 CFR Part 35 Subpart O. 

However, the draft audit report also identifies areas where the auditor concluded that CDPHE 

failed to comply with either State procedures and/or the Subpart O, requirements. The issues for 

which the auditor has determined non-compliance are listed below. 

Audit Findings 

Finding 1: CDPHE Did Not Always Comply With Cost or Price Analysis Requirements 

1a) Architectural Engineer Contract 

1b) Modifications to the CMGC Contract 

1c) Subcontract 

Finding 2: CDPHE Did Not Include Language in Bid Proposals Designating the Date, 

Time and Place of Bid Openings 

Finding 3: CDPHE Did Not Ensure That the CMGC Required All Subcontractors to Have 

Accident and Catastrophic Loss Insurance Coverage 

Finding 4: CDPHE Did Not Always Ensure That Required Language Was Included in Bid 

Proposals and Contracts 

Although CPDHE agrees that certain specific audit findings are correct, CDPHE also 

maintains that many of the audit findings are based on the auditors interpretation that the 

State’s procurement policies, as well as the 40 CFR Part 35 Subpart O, requirements 

(hereinafter referred to as Subpart O, requirements), are applicable not only to CDPHE as 

the grant recipient, but also to contractor’s that CPDHE has hired as the result of a valid 

procurement process. In our long experience of administering Federal CERCLA grants, 

CDPHE has not encountered this interpretation of the federal procurement requirements. 

Since many audit findings seem based upon this incorrect interpretation, CDPHE has prepared a 

general response to address multiple audit findings, and specific responses as appropriate to 

respond to other issues or to provide additional information. 

14-R-0032 14 
 

 

CDPHE General Response 

It is CDPHE’s position that the auditor has an incomplete and incorrect understanding of the 

contract vehicle used by CDPHE to deliver the goods and services necessary to construct the 

Summitville Water Treatment Facility. As a result, the auditor has incorrectly concluded that 

certain regulations are not only applicable to CDPHE as the grant recipient, but are also 

applicable to procurement activities conducted by the recipient’s contractor. The specific 

regulations cited in the audit report, without exception, refer to requirements for the grant 

recipient only, and make no mention of these requirements applying to contractors. Because 

many of the audit findings refer to activities conducted by the contractor, CDPHE disagrees with 

these findings. 

On page two of the draft report in the second paragraph under the section titled “Scope and 

Methodology”. In this paragraph the auditor states, “Because CDPHE used a Construction 

Manager/General Contractor (CMGC) vehicle to administer and perform the work required by 

the CA, most contract management responsibilities required by the CA were delegated to the 

CMGC.” This statement incorrectly implies that CDPHE has delegated all of it authorities to the 

CMGC when it has not, and that the CGMC is, in effect, acting as the State’s agent in 

performance of the work. This is also incorrect because the CMGC contract is simply another 

contract delivery mechanism, which CDPHE has maintained its contract management and 

oversight responsibilities and not delegated those responsibilities to the CMGC. 

IPA Response 1. As there is no audit issue related to this information, we omitted the sections 

of this sentence in the report which were of concern to CDPHE. 

Procurement of the CMGC followed the requirements of 40 C.F.R. §35.6565. CDPHE awarded 

a contract with guaranteed maximum price (essentially a fixed priced contract) as required by 

both 40 C.F.R. §35.6565(1) (iv) and §24-103-202(7) of the Colorado Procurement Code. Under 

the CMGC contract, the contractor was solely responsible for performing the required work. As 

with any contract, CDPHE maintained responsibility for overseeing the contractor and ensuring 

that the work was performed in compliance with the contract. CDPHE delegated none of its 

authority of responsibility by procuring the CMGC. 

Once the contract was awarded, the contractor selected sub-contractors and purveyors best suited 

to assist with project delivery. The fact that the sub-contractors and purveyors were selected 

using a series of requests for proposal and competitive bids is a function of the contract vehicle, 

not of CDPHE conducting additional procurement actions. CDPHE’s procurement process 

ended when Moltz Construction was awarded the CMGC contract. For the purposes of project 

construction, CDPHE’s only contractual relationship was with Moltz. CDPHE did not have a 

contractual relationship with any of the sub-contractors identified in the audit report. 

During the past 25 years that CDPHE has administered federal CERCLA grants and associated 

contracts, our experience has been that the 40 C.F.R. § 35 requirements apply only to the grant 

recipients. The auditor’s interpretation that these federal requirements also apply to a 

contractor’s procurement activities is inconsistent with our experience or any guidance or 

14-R-0032 15 
 

 

 

instruction provided by EPA Region VIII. Furthermore, the State’s procurement code, which is 

structured to comply with federal requirements, does not to require State Agencies to direct the 

procurement activities that general contractors use to procure subcontractors and purveyors. 

While we expect that our general contractors will use sound procurement procedures in the 

selection of sub-contractors, this is not area in which CDPHE dictates procurement procedures. 

IPA Response 2. We disagree with CDPHE’s position that the regulations cited in the report 

apply only to the recipient and not to the recipient’s contractor. Under the procurement system 

standards of 40 CFR § 35.6650(a)(1), the state is required to comply with some of the 

procurement requirements under Subpart O in addition to the basic procurement policies and 

procedures described in 40 CFR § 31.36(a), which allows the state to follow its own 

procurement policies. Some of these additional Subpart O requirements include 40 CFR § 

35.6565(d) and 40 CFR § 35.6550(b), which requires the state to ensure that its contractors 

comply with the cost or price analysis requirements under 40 CFR § 35.6585. These 

requirements will be further explained in the detailed sections in Note 3 through 6 below. 

CDPHE Response to Finding 1a 

Architectural Engineer Contract 

CDPHE’s general response is not applicable to this finding. However, for the reasons described 

below, CDPHE disagrees with the auditor’s conclusion that a non-competitive contract in the 

amount of $806,250 was awarded. 

The auditor correctly notes that, in 2002, CDPHE conducted a qualification based selection 

process, which resulted in the selection of Resource Technologies Group (RTG) to design a 

water treatment plant to remove metals from mine water at the Summitville Mine Superfund 

Site. While under contract to CDPHE, RTG was purchased by Golder Associates Inc, causing 

Golder to become RTG’s legal and contractual successor. Design was completed in 2004. Due 

to the lack of federal funds, project construction was delayed. 

In 2009, in anticipation of potential future availability of construction funding, CDPHE began 

evaluating the need to procure engineering and design services to update the 2004 design and 

provide construction oversight. CDPHE performed cost analyses as part of our consideration of 

an appropriate process to procure the necessary services. The results of these analyses are 

documented in two internal memos previously provided to the auditor. However, during our 

evaluation of the procurement process for the 2009 A/E Contract, we discovered specific 

provisions within Colorado Statues which state that there is no need for a competitive procurement 

process when using prior existing plans. Colorado Revised Statues § 24-30-1407 states: 

“24-30-1407 Prior existing design plans. Notwithstanding any other provision of this 

part 14 or of part 13 of this article, there shall be no public notice requirement or 

utilization of the selection process as provided for in this part 14 or in part 13 of this 

article for projects in which the state agency is able to reuse existing drawings, 

specifications, designs, or other documents for a prior project.” 

14-R-0032 16 
 

 

 

Consistent with this statute, CDPHE program staff recommended contracting with Golder to 

revise the existing design and provide construction oversight. This recommendation was vetted 

and approved through a system of internal and external reviews. The specific memo outlining 

CPDHE’s use of this provision of state statute and justifying our decision is included as 

Attachment A. 

CDPHE’s action comports with the plain language of the statute, that a valid competitive 

procurement process used to develop design plans remains applicable to subsequent contracts 

with the architect/engineer that produced the plans. In essence, subsequent contracts 

implementing the design produced under the original and valid selection process are allowable as 

a continuation of the original procurement process. Since CDPHE completed a valid selection 

for the original design contract, CDPHE has complied with applicable Colorado Procurement 

Code provisions and the federal regulations. 

IPA Response 3. In response to CDPHE’s position that this is not a noncompetitive contract, 

we have removed the noncompetitive contract language from the body of the report. This 

finding does not take issue with the method of procurement for this contract. We 

acknowledge that the Federal regulations and State statutes provide for use of the same 

engineer. The audit issue is the lack of a cost or price analysis for the A/E contract. Title 40 

CFR § 35.6585 (a) states that “the recipient must conduct and document a cost or price 

analysis in connection with every procurement action ...” During the audit CDPHE stated 

that it performed the cost analysis but did not retain it. The data provided in CDPHE’s 

response is a justification for the use of the same engineer, not a cost analysis. These costs 

were questioned in the report because CDPHE could not provide a cost or price analysis for 

the A/E contract, as required. No change is made to this audit finding. 

CDPHE Response to Finding 1b 

Modifications to the CMGC Contract
 

CDPHE disagrees with this finding for reasons outlined in our “General Response” 

IPA Response 4. CDPHE’s general response does not adequately address this finding which 

relates to requirements of the recipient when modifications are made to a contract. Title 40 

CFR § 35.6585 (a) states that “the recipient must conduct and document a cost or price 

analysis in connection with every procurement action including contract modification.” 

Because CDPHE could not provide a cost or price analysis for the Moltz contract 

modifications, no change is made to this audit finding. 

14-R-0032 17 
 

 

CDPHE Response to Finding 1c 

Subcontract
 

CDPHE disagrees with this finding for reasons outlined in our “General Response” 

IPA Response 5. We disagree with CDPHE’s general response that the cost or price analysis 

requirement cited in the draft report does not apply to these subcontracts. Under the procurement 

system standards of 40 CFR § 35.6650(a)(1), the state is required to comply with some of the 

procurement requirements under Subpart O in addition to the basic procurement policies and 

procedures described in 40 CFR § 31.36(a), which allows the state to follow its own 

procurement policies. One of these additional Subpart O requirements the state needs to follow 

is 40 CFR § 35.6550(b). Title 40 CFR § 35.6550(b) (4) states that the recipient must require its 

contractor to comply with the requirements in 40 CFR § 35.6610, which includes the cost or 

price analysis requirement under 40 CFR § 35.6585.The audit finding addressed the lack of a 

cost or price analysis for only those subcontracts which were non-competitive. As cost or price 

analysis was not done, no change is made to this finding. 

CDPHE Response to Finding 2 

CDPHE disagrees with this finding for reasons outlined in our “General Response” 

IPA Response 6. Our position remains unchanged. Although CDPHE indicated that it used its 

general response to support its position on this finding, the general response is not applicable for 

this finding. As discussed in the draft report, we could not verify that CDPHE had included 

language in its Request for Proposals designating the date, time and, place where the Bids would 

be publicly opened. However, the criteria we used to support this finding in our draft report was 

not based on Subpart O provisions. We cited this finding based on State of Colorado 

Procurement Rule R-24-103-202b-08 that specifies that “bids and modifications shall be opened 

publicly, in the presence of one or more witnesses, at the time and place designated in the 

Invitation for Bids.” Our audit identified the CMGC contract, six subcontracts and, eight 

contract modifications where the RFPs did not include date, time and place of bid opening. 

CDPHE’s response did not resolve this issue. 

CDPHE Response to Finding 3 

The auditor references 40 C.F.R. § 35.6590(b) yet his comments seem to refer to 40 C.F.R. 

§35.6590(c), which reads as follows: 

(c) Accidents and Catastrophic Loss. The recipient must require the contractor 

(emphasis added) to provide insurance against accidents and catastrophic loss to manage 

any risk inherent in completing the project. 

14-R-0032 18 
 

 

CDPHE submitted information to the auditor demonstrating the contractor provided the required 

insurance. Based on the clear reading of the regulation, CDPHE has no duty to require 

subcontractors to provide insurance against accidents or catastrophic loss. Rather, consistent 

with regulatory requirements, that relationship is between the contractor and its subcontractors, 

so long as the contractor fully insures the project, as has been demonstrated. 

IPA Response 7. We concur that the requirement per 40 CFR § 35.6590 (b) is for the 

contractor and not the subcontractor. This finding and related recommendation have been 

deleted from the audit report. 

CDPHE Response to Finding 4 

CDPHE agrees with the finding that certain specific required language was omitted from some 

bid proposals and contracts. As CDPHE has previously informed the auditor, CDPHE’s typical 

process is to include, as part of proposals and contracts, an exhibit that outlines the Subpart O 

requirements. This exhibit is included with this response as “Attachment B”. It appears as 

though the standard Exhibit was replaced by an Exhibit that outlined the American 

Redevelopment and Recovery Act” (Recovery Act) requirements for the contract. The Recovery 

Act exhibit contained many, but not all of the Subpart O 

requirements. 

IPA Response 8. CDPHE concurred with the finding. No change has been made to this audit 

finding. 

CDPHE Response to Recommendations 

Due to the disagreement with many of the audit findings, CDPHE also disagree with most of the 

auditor’s recommendations. Specifically, we disagree with recommendations 1 – 4. 

Furthermore, regarding recommendation number one, it is important to point out that EPA’s 

investment of funds for this project directly resulted in successful completion of the Summitville 

Water Treatment Facility, and related improvements to the long term operational efficiency of 

the Summitville Site. This project is also expected to result in long term improvements in water 

quality for the Alamosa River drainage basin. The cooperative agreement objectives have been 

met and the projects costs were consistent with the Engineer’s estimate. Therefore, requiring 

CDPHE to reimburse EPA $2.6 million would be inappropriate and improper since CDPHE met 

the project objectives and followed applicable requirements. Even if the auditor maintains the 

disputed findings, requiring reimbursement would be inappropriate considering Region VIII’s 

full knowledge and agreement with CDPHE’s actions. 

As noted throughout this response, the extension of Subpart O requirements to include 

procurement activities conducted by the State’s contractor is inconsistent with CDPHE’s 

experience and standard practices over the last 25 years. However, because the auditor has 

14-R-0032 19 
 

 

 

identified several issues where changes in grants administration and contract management could 

avoid potential ambiguities and uncertainties in the future, CDPHE welcomes the opportunity to 

meet with Region VIII to discuss potential methods for improving our overall grant 

administration. 

IPA Response 9. Our position for five of the six recommendations remained unchanged. 

We agreed to delete the finding and related recommendation related to the catastrophic 

insurance issue. As discussed in Notes 2 through 6 above, CDPHE did not follow all 

applicable procurement requirements; therefore, we have continued to question the costs and 

recommend for cost recovery. 

14-R-0032 20 
 

 

 

 

 

 

 

 

 

 

 

Status of Recommendations and 

Potential Monetary Benefits 

POTENTIAL MONETARY 

RECOMMENDATIONS BENEFITS (in $000s) 

Planned 

Rec. 

No. 

Page 

No. Subject Status1 Action Official 

Completion 

Date 

Claimed 

Amount 

Agreed-To 

Amount 

1 9 Require CDPHE to reimburse the EPA $2,593,495 

($806, 250 + $1,542,000 + $245,245) for the A/E 

contract, two CMGC contract modifications and 

U Region 8 

Regional Administrator 

$2,593 

one subcontract where cost analyses were not 

provided for all procurements as required by Title 

40 CFR § 35.6585(a) and 40 CFR § 35.6565(d) (2), 

unless CDPHE provides documentation to 

demonstrate that the prices for these contracts and 

subcontracts are fair and reasonable. 

2 9 Require CDPHE to implement written procedures 

and controls to ensure that a cost or price analysis 

is conducted for each future noncompetitive 

contract awarded in accordance with the 

U Region 8 

Regional Administrator 

requirements of Title 40 CFR § 35.6585(a) and 

40 CFR § 35.6565(d) (2) and to retain copies of all 

cost or price analyses conducted and other CA 

records in accordance with the requirements of 

Title 40 CFR § 35.6705(b). 

3 10 Require CDPHE to implement written controls and 

procedures to ensure that the date, time and place 

of all bid openings are designated in all future 

RFPs as required by of State of Colorado 

Procurement Rule R-24-103-202a-08 (b). 

U Region 8 

Regional Administrator 

4 10 Require CDPHE to implement written controls and 

procedures to ensure that language is included in 

all future bid proposals and contracts as required 

by Title 40 CFR Part 35, Subpart O. 

U Region 8 

Regional Administrator 

5 10 Require CDPHE to modify the CMGC and A/E 

contracts awarded under the CA to include the 

10-Year Records Retention language as required 

by Title 40 CFR § 35.6705(b) and the contract 

language requirement under Title 40 CFR § 

35.6550. 

U Region 8 

Regional Administrator 

O = Recommendation is open with agreed-to corrective actions pending.
 

C = Recommendation is closed with all agreed-to actions completed.
 

U = Recommendation is unresolved with resolution efforts in progress.
 

14-R-0032 21 

1 
 

 

Distribution 

Regional Administrator, Region 8 

Deputy Regional Administrator, Region 8 

Director, Grants and Interagency Agreements Management Division, 

Office of Administration and Resources Management 

Agency Follow-Up Official (the CFO) 

Agency Follow-Up Coordinator 

Audit Follow-Up Coordinator, Office of Grants and Debarment, 

Office of Administration and Resources Management 

Audit Follow-Up Coordinator, Region 8 

Grants Management Officer, Region 8 

Executive Director, Colorado Department of Public Health and Environment 

14-R-0032 22