EPA drops plan for background checks

The Environmental Protection Agency (EPA) has scrapped a plan to conduct background checks on all of the agency’s contract workers after almost unanimous opposition from the business community.

Almost two years ago, in January 2003, the agency proposed to require contractors and subcontractors to perform background checks on and “make suitability determinations” for all of their employees working on federal sites.

But this week, the EPA withdrew the proposed rule, saying that the public comments “objected not only to the proposed clause’s broad application, but also to its key substantive provisions.”
Environmental Protection Agency Administrator Mike Leavitt

The EPA will, however, require background checks on certain contracts and may expand that list in the future to include all contractors. Instead of amending the EPA’s “acquisition regulation” through the rulemaking process, though, the background-check requirement will be part of the contracts’ statement of work.

The Office of Management and Budget “decided it would streamline the process,” an EPA spokeswoman said.

When the EPA proposed the rule, the agency cited the terrorist attacks of Sept. 11 and the ensuing heightened interest in protecting infrastructure and personnel. The EPA uses a large number of contract employees on federally owned sites.

“Although such access is often necessary for contract performance,” the initial
proposal said, “it nevertheless creates significant potential risks for EPA.”

But businesses said the proposal placed too high a burden on the contractors and, especially, the subcontractors, some of whom are small businesses that cannot afford to conduct full background checks on their employees. There was also a question of liability and whether the government, contractor or subcontractor would be responsible if a mistake was made.

The original proposal called for checking federal, state and local law-enforcement records, financial reports, education, residence and employment verifications and more. The company receiving the contract would be required to maintain records on each employee and make them available to the government for at least four years.

While greater security procedures have gone into effect throughout the government since Sept. 11, one lobbyist said when the EPA proposal was introduced that it could lead to further scrutiny of contract employees at other agencies as well.

The proposed rule did allow contracting officers to waive the requirement on a case-by-case basis should they determine that background checks are unnecessary for workers at a specific site.

Other opposition to the rule came from within the public sector.

In the spring of 2003, soon after the proposal was released for comment, the chief counsel for advocacy at the Small Business Administration questioned the new regulation’s possible impact on small businesses, arguing that the EPA had not provided enough information showing that the rule “would not have significant impact on a substantial number of small entities.”

“The proposed regulation provides for the cost of compliance to be incorporated as part of the contractor’s bid price,” the chief counsel said. “If a cost dispute should materialize between the prime contractor and the small-business subcontractor on this mandatory requirement, and since the government does not recognize a legal relationship with the subcontractor, how is the dispute to be resolved?”

Because of the opposition, the EPA has taken a different approach. While withdrawing the proposal, the agency will instead institute a “narrowly tailored background check requirement in the [EPA’s] emergency response contracts’ statement of work,” according to this week’s Federal Register notice.

This means a check will be required for contractors on certain projects, including some Superfund, emergency and rapid-response workers and employees on certain hazardous remediation projects.