EPA Officials Tipping Their Hand on Costs: IG EPA’s inspector general says the agency has been giving contractors too much information about labor hour contracts, potentially increasing costs. In many instances, the IG found that EPA officials were telling contractors how many total labor hours they expected a job to take. Armed with that information, the contractor could tailor its proposal to match EPA’s estimate. As a result, the IG said, “the contractor does not have an incentive to seek a more efficient or innovative approach to meet the government’s requirement.” Agency officials routinely prepare an independent government cost estimate to help them determine whether a contractor is proposing a fair and reasonable price. “However, by providing estimated labor hours [to contractors], EPA diminished its ability to use the [estimate] to assess the reasonableness of labor hours in the proposal,” the IG said. The IG examined 27 work assignments or task orders. In 21 of them the contractor’s proposal was within 5% of EPA’s estimated labor hours. In 13 cases the proposal was identical to the government estimate Although contracting and program officials said it was a common practice to share the estimate with contractors, EPA plans to revise its regulations so that the information is not shared in all circumstances. .In response to the IG report, EPA Assistant Administrator Craig Hooks said the contracting officer needs to provide the estimated level of services to the contractor in certain circumstances, such as “contracts where the nature of the work is non-specific, with changing circumstances.” He cited cleanup at new hazardous waste sites and R&D contracts as examples. “In such cases, unless the CO provides the contractor with the estimated level of effort in terms of hours, the contractor will be left guessing at this level, which might needlessly delay” the work, he said.