text: b" U.S. ENVIRONMENTAL PROTECTION AGENCY\n OFFICE OF INSPECTOR GENERAL\n\n\n\n Catalyst for Improving the Environment\n\n\nAttestation Report\n\n\n\n\n Examination of Costs Claimed Under\n EPA Cooperative Agreement X83275501\n Awarded to The Montana Physical\n Sciences Foundation\n\n Report No. 11-4-0013\n\n November 8, 2010\n\n\n\n\n REDACTED VERSION FOR PUBLIC RELEASE\n The full version of this report contained sensitive information. This is a\n redacted version of that report, which means the sensitive information\n has been removed. The redactions are clearly identified in the report.\n\x0cReport Contributors: Jessica Knight\n Lela Wong\n Michael Owen\n\n\n\n\nAbbreviations\n\nCFR Code of Federal Regulations\nEPA U.S. Environmental Protection Agency\nFY Fiscal Year\nGrant Cooperative Agreement Number X83275501\nGrantee The Montana Physical Sciences Foundation\nOIG Office of Inspector General\n\x0c U.S. Environmental Protection Agency \t 11-4-0013\n November 8, 2010\n Office of Inspector General\n\n\n At a Glance\n Catalyst for Improving the Environment\n\n\nWhy We Did This Review Examination of Costs Claimed Under EPA Cooperative\n Agreement X83275501 Awarded to The Montana\nThe U.S. Environmental Physical Sciences Foundation\nProtection Agency (EPA)\nOffice of Inspector General is\n What We Found\nexamining assistance\nagreements to non-profit\n The grantee did not meet Title 40 Code of Federal Regulations (CFR) Part 30\norganizations. We selected\n requirements for procurement. In particular, the grantee:\nThe Montana Physical\nSciences Foundation (grantee)\nfor one of these examinations. \xef\x82\xb7 Has an apparent, if not real, conflict of interest with its subcontractor.\n \xef\x82\xb7 Awarded a sole source subcontract without a documented justification\nBackground and a cost or price analysis.\n \xef\x82\xb7 Did not amend the sole source subcontract to cover a major change in\nEPA awarded Cooperative project scope and extension of the project period.\nAgreement number \xef\x82\xb7 Did not include terms in the sole source subcontract that provide EPA\nX83275501 (grant) on rights to use work funded by the grant.\nSeptember 23, 2005. The\npurpose of the grant was to As a result, EPA will need to recover $707,320 in questioned contract costs. EPA\nprovide federal assistance of should consider suspension and debarment proceedings against the grantee and its\n$770,500 for research into subcontractor.\nproducing biodegradable\nlubricants and solvents from What We Recommend\nwaste. There was no match\nrequirement for this grant. We recommend that the Assistant Administrator for Administration and\nEPA\xe2\x80\x99s contribution to the Resources Management disallow and recover $707,320 in costs claimed for the\nproject was 100 percent of grantee\xe2\x80\x99s subcontract. We also recommend that the Assistant Administrator\napproved costs not to exceed consider suspension and debarment proceedings against the grantee and its\n$770,500. subcontractor.\n\n We recommend that the Assistant Administrator: (1) require the grantee to\nFor further information, improve its procurement process to ensure compliance with Title 40 CFR Part 30;\ncontact our Office of\nCongressional, Public Affairs and (2) establish special conditions for future EPA awards to the grantee that\nand Management at require payment on a reimbursement basis, review and approval by the EPA\n(202) 566-2391. project officer of reimbursement requests prior to payment, and review and\n approval by the EPA project officer of contracts prior to award.\nTo view the full report,\nclick on the following link:\nwww.epa.gov/oig/reports/2011/ The Agency generally agreed with the findings, but did not comment on the\n20101108-11-4-0013.pdf recommendations. The grantee generally disagreed with the findings and\n recommendations.\n\x0c UNITED STATES ENVIRONMENTAL PROTECTION AGENCY\n WASHINGTON, D.C. 20460\n\n\n THE INSPECTOR GENERAL\n\n\n\n\n November 8, 2010\n\nMEMORANDUM\n\nSUBJECT:\t Examination of Costs Claimed Under EPA Cooperative Agreement X83275501\n Awarded to The Montana Physical Sciences Foundation\n Report No. 11-4-0013\n\n\nFROM:\t Arthur A. Elkins, Jr. Mark Bialek for\n Inspector General\n\nTO:\t Craig E. Hooks\n Assistant Administrator\n Office of Administration and Resources Management\n\n David Gates \n\n Chairman of the Board of Directors \n\n The Montana Physical Sciences Foundation \n\n\n\nThis report contains a time-critical issue the Office of Inspector General (OIG) identified. This\nreport represents the opinion of the OIG and does not necessarily represent the final position of\nthe U.S. Environmental Protection Agency (EPA). EPA managers will make final determinations\non matters in this report.\n\nThe estimated cost of this report \xe2\x80\x93 calculated by multiplying the project\xe2\x80\x99s staff days by the\napplicable daily full cost billing rates in effect at the time \xe2\x80\x93 is $135,583.\n\nAction Required\n\nIn accordance with EPA Manual 2750, Chapter 3, Section 6(f), you are required to provide us\nyour proposed management decision for resolution of the findings contained in this report before\nyou formally complete resolution with the recipient. Your proposed decision is due in 120 days,\nor on March 8, 2011. To expedite the resolution process, please e-mail an electronic version of\nyour proposed management decision to adachi.robert@epa.gov. Your response will be posted on\nthe OIG\xe2\x80\x99s public website, along with our memorandum commenting on your response. Your\nresponse should be provided as an Adobe PDF file that complies with the accessibility\nrequirements of section 508 of the Rehabilitation Act of 1973, as amended. The final response\n\x0cshould not contain data that you do not want to be released to the public; if your response\ncontains such data, you should identify the data for redaction or removal.\n\nWe have no objections to the further release of this report to the public. This report will be\navailable at http://www.epa.gov/oig. If you or your staff has any questions regarding this report,\nplease contact Robert Adachi, Director of Forensic Audits at (415) 947-4537 or at the above\ne-mail address; or Michael Owen, Project Manager, at (206) 553-2542 or\nowen.michael@epa.gov.\n\nNote: We have redacted information on pages 15-19 of this report. Exemption (b)(6) of the\nFreedom of Information Act permits the government to withhold names of individuals when\ndisclosure of such information \xe2\x80\x9cwould constitute a clearly unwarranted invasion of personal\nprivacy.\xe2\x80\x9d [5 U.S.C. \xc2\xa7 552 (b)(6)]\n\x0cExamination of Costs Claimed Under EPA Cooperative Agreement 11-4-0013\nX83275501 Awarded to The Montana Physical Sciences Foundation\n\n\n\n\n Table of Contents \n\n Introduction ................................................................................................................. 1 \n\n\n Purpose ................................................................................................................ 1 \n\n Background .......................................................................................................... 1 \n\n\n Independent Attestation Report ................................................................................ 2 \n\n\n Results of Examination .............................................................................................. 4 \n\n\n Apparent Conflict of Interest Between Grantee and Subcontractor ..................... 4\n\n Subcontract Not Supported by Justification and Analysis .................................... 6\n\n Subcontract Not Amended to Reflect Revised Project Scope.............................. 6\n\n Subcontract Terms Do Not Include EPA\xe2\x80\x99s Rights to Use Work ........................... 7\n\n Conclusion ........................................................................................................... 7 \n\n Recommendations ............................................................................................... 8 \n\n Agency and Grantee Comments .......................................................................... 8\n\n OIG Response ..................................................................................................... 9\n\n\n Status of Recommendations and Potential Monetary Benefits.............................. 10 \n\n\n\n\nAppendices \n\n A Agency\xe2\x80\x99s Comments on the Draft Report ....................................................... 11 \n\n\n B Grantee\xe2\x80\x99s Comments on the Draft Report and the OIG\xe2\x80\x99s Evaluation............ 13\n\n\n C Distribution ......................................................................................................... 22\n\n\x0c Introduction \n\n\nPurpose\nThe purpose of the examination was to determine whether The Montana Physical Sciences\nFoundation (grantee) complied with assistance agreement requirements and applicable Federal\nlaws and regulations. During our examination, we determined that the grantee did not comply\nwith federal procurement requirements, including codes of conduct requirements. We believe\nthese issues require immediate attention to ensure expeditious recovery of federal funds and\nimplementation of additional controls to protect the government\xe2\x80\x99s interest.\n\nBackground\nThe U.S. Environmental Protection Agency (EPA) awarded Cooperative Agreement number\nX83275501 (grant) on September 23, 2005. The purpose of the grant was to provide federal\nassistance of $770,500 for research into producing biodegradable lubricants and solvents from\nwaste. There was no match requirement for this grant. EPA\xe2\x80\x99s contribution to the project was 100\npercent of approved costs not to exceed $770,500. The grant\xe2\x80\x99s budget and project period was\nfrom October 1, 2005, to November 30, 2009.\n\n\n\n\n11-4-0013 1\n\x0c Independent Attestation Report \n\nAs part of our continued oversight of the assistance agreements awarded to nonprofit\norganizations by EPA, we have examined the costs claimed by the grantee covering the period\nOctober 1, 2005, to November 30, 2009. By receiving the award, the grantee has accepted\nresponsibility for preparing its cost claim to comply with the requirements of Title 2 Code of\nFederal Regulations (CFR) Part 230, Title 40 CFR Part 30, and the terms and conditions of the\ngrant. Our responsibility is to express an opinion on the grantee\xe2\x80\x99s compliance and costs claimed\nbased on our examination.\n\nOur examination was conducted in accordance with the Government Auditing Standards issued\nby the Comptroller General of the United States and the attestation standards established by the\nAmerican Institute of Certified Public Accountants. We examined evidence supporting the\namount claimed under the grant and performed other procedures we considered necessary under\nthe circumstances. We believe that our examination provides a reasonable basis for our opinion.\n\nWe conducted our fieldwork from February 2009 to July 2010. We performed the following\nsteps during fieldwork:\n \xef\x80\xa0\n\xef\x82\xb7 Reviewed EPA project and grant files\n\xef\x82\xb7 Interviewed the EPA project officer and grant specialist to obtain an understanding of the\n project\n\xef\x82\xb7 Reconciled and verified the deposits of EPA payments (drawdowns) to the grantee\xe2\x80\x99s bank\n statements for the period of February 2007 to December 2008.\n\xef\x82\xb7 Reviewed the grantee\xe2\x80\x99s supporting documents for drawdowns under the grant including the\n grantee\xe2\x80\x99s electronic accounting records and the supporting invoices\n\xef\x82\xb7 Conducted interviews of grantee and subcontractor personnel to obtain an understanding of\n the project as well as the grantee\xe2\x80\x99s process for procurement, drawdown, and invoice payment\n\xef\x82\xb7 Reviewed the subcontractor procurement and the terms and conditions of the subcontract\n\xef\x82\xb7 Performed fraud detection procedures including interviewing EPA and grantee personnel,\n reviewing transaction patterns, performing duplicate payment analysis, and reviewing Board\n of Director meeting minutes\n\nAs part of obtaining reasonable assurance that the grantee\xe2\x80\x99s costs claimed under the grant are\nfree of material misstatement, we performed tests of its compliance with the requirements of\nTitle 2 CFR Part 230, Title 40 CFR Part 30, and the terms and conditions of the grant. We also\nconsidered the grantee\xe2\x80\x99s internal controls over cost reporting to determine our audit procedures\nand to express our opinion on the costs claimed. Our consideration of internal control would not\nnecessarily disclose all internal control matters that might be material weaknesses. A material\nweakness is a significant deficiency or combination of significant deficiencies, in internal control\nthat provide a reasonable possibility that a material misstatement of the entity\xe2\x80\x99s financial\nstatements will not be prevented, or detected and corrected on a timely basis. A significant\ndeficiency is a deficiency, or combination of deficiencies, in internal control that is less severe\n\n\n\n11-4-0013 2\n\x0cthan a material weakness, but important enough to warrant attention by those charged with\ngovernance.\n\nOur examination disclosed the following material weaknesses concerning procurement\nrequirements specified by Title 40 CFR Part 30:\n\n\xef\x82\xb7 The grantee has an apparent, if not real, conflict of interest with its subcontractor.\n\xef\x82\xb7 The grantee awarded a sole source subcontract without a documented justification and a cost\n or price analysis.\n\xef\x82\xb7 The grantee did not amend the sole source subcontract to cover a major change in project\n scope and extension of the project period.\n\xef\x82\xb7 The grantee did not include terms in the sole source subcontract that provide EPA rights to\n use work funded by the grant.\n\nAs a result, we questioned $707,320 of the $748,432 claimed under the grant.\n\nIn our opinion, because of the effect of the issues described above, the costs claimed do not meet,\nin all material respects, the requirements of Title 40 CFR Part 30 and the terms and conditions of\nthe grant for the period ended November 30, 2009.\n\n\n\n\nRobert K. Adachi\nDirector for Forensic Audits\nJuly 22, 2010\n\n\n\n\n11-4-0013 3\n\x0c Results of Examination \n\nThe grantee did not meet Title 40 CFR Part 30 requirements for procurement. In particular, the\ngrantee:\n\n\xef\x82\xb7 Has an apparent, if not real, conflict of interest with its subcontractor.\n\xef\x82\xb7 Awarded a sole source subcontract without a documented justification and a cost or price\n analysis.\n\xef\x82\xb7 Did not amend the sole source subcontract to cover a major change in project scope and\n extension of the project period.\n\xef\x82\xb7 Did not include terms in the sole source subcontract that provide EPA rights to use work\n funded by the grant.\n\nAs a result, EPA will need to recover $707,320 in questioned contract costs. EPA should also\nconsider suspension and debarment proceedings against the grantee and its subcontractor. The\ncosts claimed and questioned are summarized in Table 1.\n\n Table 1: Summary of costs claimed and questioned\n Amount Amount\n Cost Category\n Claimed Questioned\n Contract Costs1 $707,320 $707,320\n Other Direct Costs $41,112 $0\n Totals $748,432 $707,320\n Sources: Amounts claimed were from supporting invoices provided by the\n\n grantee. Costs questioned were based on the OIG\xe2\x80\x99s analysis of the data. \n\n\n 1\n See discussion under Apparent Conflict of Interest between Grantee and \n\n Subcontractor. \n\n\n\nApparent Conflict of Interest Between Grantee and Subcontractor\nThe grantee has an apparent, if not real, conflict of interest with its subcontractor, Resodyn, in\nviolation of Title 40 CFR Part 30.42 which states in part:\n\n \xe2\x80\x9cNo employee, officer, or agent shall participate in the selection, award, or administration\n of a contract supported by Federal funds if a real or apparent conflict of interest would be\n involved. Such a conflict would arise when the employee, officer, or agent, any member\n of his or her immediate family, his or her partner, or an organization which employs or is\n about to employ any of the parties indicated herein, has a financial or other interest in the\n firm selected for an award.\xe2\x80\x9d\n\nWe found that the president of the grantee\xe2\x80\x99s subcontractor not only established the nonprofit\ngrantee, but the evidence indicates that he assisted with the preparation of an important\n\n\n\n\n11-4-0013 4\n\x0cdocument associated with the procurement of the sole source subcontract and attended the\ngrantee\xe2\x80\x99s Board of Directors meetings where operation and management decisions were made.\n\nThe grantee\xe2\x80\x99s Articles of Incorporation identify that the president of Resodyn, the grantee\xe2\x80\x99s\nsubcontractor, founded the nonprofit grantee in September 2004. In our interview of the\npresident of Resodyn, the president stated that he established the nonprofit organization in order\nto obtain the grant funding for Resodyn. Congressional appropriation records showed that the\nconference report for the Fiscal Year (FY) 2004 Appropriation Act directed that EPA award\n$800,000 to Montec Research in Butte Montana for research of pilot scale enzyme catalyzed\nprocesses. In 2003, Montec Research officially changed its name to Resodyn. According to an\nEPA project officer and grant specialist who were responsible for the grant, the company was\nineligible for the award because it was a \xe2\x80\x9cfor profit\xe2\x80\x9d corporation rather than a nonprofit\norganization. Because EPA was not able to award the funding to the company, the funding was\nredirected to the nonprofit grantee through the conference report for the FY 2005 Appropriation\nAct.\n\nOur review of EPA documentation associated with the grant award disclosed that in September\n2005, EPA Office of General Counsel expressed concern about the award when an EPA pre-\naward compliance review found that the president of Resodyn was also a member of the\ngrantee's Board of Directors. The Office of General Counsel was concerned about a potential\nconflict of interest because the grantee planned to subcontract most of the work under the grant\nto Resodyn through a sole source contract. To address EPA\xe2\x80\x99s concerns, the grantee provided\nEPA with a letter from the president of Resodyn, dated September 12, 2005, announcing his\nimmediate resignation from the Board of Directors. The Office of General Counsel determined\non September 20, 2005, that the conflict of interest was eliminated based on the resignation\nletter, and EPA proceeded to award the grant to the nonprofit.\n\nAlthough the grantee informed EPA that Resodyn\xe2\x80\x99s president had resigned from the Board of\nDirectors, our review of procurement documents the grantee submitted to EPA disclosed that\nResodyn\xe2\x80\x99s president assisted with the preparation of an important document. Specifically, the\nelectronic properties of a report summarizing the Board of Directors\xe2\x80\x99 review comments and\napproval of Resodyn's project proposal disclosed that Resodyn\xe2\x80\x99s president was the author of the\ndocument. According to the grantee, Resodyn\xe2\x80\x99s president did not author the content of the\ndocument. The grantee said that its Executive Director inquired and obtained from the\nsubcontractor\xe2\x80\x99s president a template for evaluating project proposals. The grantee explained that\nthe template was subsequently used by the Board of Directors to evaluate Resodyn\xe2\x80\x99s contract\nproposal.\n\nIn addition, a review of the minutes for the grantee\xe2\x80\x99s Board of Directors meetings held from\nOctober 2005 to May 2008 disclosed that the president of Resodyn attended the meetings even\nafter his resignation from the Board. According to the minutes, the president of Resodyn was\npresent at meetings where the Board made major decisions about the operation and management\nof the nonprofit as well as work under the EPA grant. Specifically, during these meetings, the\nBoard elected the grantee\xe2\x80\x99s officers, made the employment selection for the grantee\xe2\x80\x99s Executive\nDirector, established the roles and responsibilities for the Executive Director, and established the\nrequest for proposal process for Resodyn\xe2\x80\x99s sole source subcontract.\n\n\n\n11-4-0013 5\n\x0cIn total, the facts suggest a failure of an arm\xe2\x80\x99s length relationship between the grantee and\nResodyn, and an apparent, if not actual, conflict of interest under Title 40 CFR Part 30.42, with\nregard to the award and administration of the sole source subcontract with Resodyn.\n\nSubcontract Not Supported by Justification and Analysis\nThe grantee\xe2\x80\x99s sole source subcontract to Resodyn was awarded without a documented\njustification and a cost or price analysis as required by Title 40 CFR Part 30.45, Part 30.46, and\nthe grant. Title 40 CFR Part 30.45 requires the grantee to complete a cost or price analysis and\ndocument the analysis in the procurement files for every procurement action. Title 40 CFR Part\n30.46 specifies that procurement records and files for purchases that exceed the $100,000 small\npurchase threshold shall include a justification for lack of competition when competitive bids or\noffers are not obtained. The grant also required the nonprofit recipient, as a condition of the\naward, to submit for EPA\xe2\x80\x99s review the justification for the sole source award and the cost or\nprice analysis for the subcontract. However, neither the grantee nor the EPA grant specialist or\nproject manager responsible for managing the grant were able to provide copies of these\ndocuments. The grantee and EPA staff were also unable to confirm whether the justification and\ncost or price analysis were ever completed or submitted to EPA. Without a proper justification\nand cost or price analysis, the grantee was unable to show that the sole source subcontract was\nnecessary and the costs claimed under the grant are fair and reasonable.\n\nSubcontract Not Amended to Reflect Revised Project Scope\nThe grantee did not amend the sole source subcontract with Resodyn to cover a major change in\nproject scope and extension of the project period as required by Title 40 CFR Part 30.48. Title 40\nCFR Part 30.48 requires that recipients of federal awards include provisions that define a sound\nand complete contract. Title 40 CFR Part 30.48 also specifies that contracts exceeding the\n$100,000 small purchase threshold include provisions or conditions that allow and provide for\nadministrative, contractual, or legal remedies in instances where a contractor violates or breaches\nthe contract terms. Because the subcontract was not amended, the grantee was not in compliance\nwith these federal contract requirements.\n\nDuring 2007 and 2008, EPA amended the grant to revise the scope of work and extend the\nbudget and project periods at the grantee\xe2\x80\x99s request. The grantee requested the scope change\nbecause there was an increase in market demand for the original project\xe2\x80\x99s source material. EPA\namended the scope of work to change the source material, which was designated a major scope\nchange in the grant amendment and extended the budget and project periods through November\n2009. Despite the major change in the project scope and extension of the project period, the sole\nsource subcontract was not revised.\n\nOur review of progress reports on the research project and interviews of the Executive Director\nfor the grantee and managers and staff from Resodyn disclosed that the company did not conduct\nthe research specified by the subcontract. Rather, Resodyn conducted research on the new scope\nof work approved by the grant amendment. The progress reports and interviews also revealed\nthat the research was ongoing as of February 2009 and had exceeded the March 20, 2007,\n\n\n11-4-0013 6\n\x0ccompletion date specified by the subcontract. Although Resodyn\xe2\x80\x99s research work appeared to be\nconsistent with the amended grant, the work was not within the scope of the subcontract and had\nnot been completed within the period specified by the subcontract. Therefore, the grantee was\nnot able to ensure through the contract provisions that Resodyn satisfactorily completed the\nresearch work specified and funded by the grant as required under Title 40 CFR Part 30.48.\n\nSubcontract Terms Do Not Include EPA\xe2\x80\x99s Rights to Use Work\nThe grantee\xe2\x80\x99s subcontract with Resodyn did not include terms that provide EPA rights to use the\nwork funded by the grant as required by Title 40 CFR Part 30. Title 40 CFR Part 30.36 states\nthat EPA reserves a royalty-free, nonexclusive, and irrevocable right to reproduce, publish, or\notherwise use for federal purposes work that was developed under an award. The appendix to\nTitle 40 CFR Part 30 further specifies that contracts for the research work under an award shall\ninclude a provision that provides EPA with these rights. However, the grantee\xe2\x80\x99s subcontract with\nResodyn did not include this provision and provided complete ownership of all work conducted\nunder the subcontract to the company.\n\nConclusion\nWe question the $707,320 in contract costs claimed under the grant as unallowable, because the\ngrantee did not meet Title 40 CFR Part 30 requirements for procurement. The apparent, if not\nreal, conflict of interest between the grantee and its subcontractor is a material issue, and EPA\nshould consider suspension and debarment of both entities from future federal awards under Title\n2 CFR Part 180. Title 2 CFR Part 180 specifies that an Agency may pursue a suspension and\ndebarment action for the willful violation of a statutory or regulatory provision or requirement\napplicable to a public agreement or transaction.\n\nBased on the findings above, the grantee also does not meet the federal management standards\nfor grants and may not have the capability to manage future EPA awards. Office of Management\nand Budget Circular A-110 establishes the federal standards for the administration of grant\nawards for nonprofit organizations. These standards include procurement codes of conduct,\ncontract justification and analysis, and contract provision requirements that are equivalent to\nthose specified by Title 40 CFR Part 30. EPA should impose special conditions on all future\nawards of EPA funds as outlined in Title 40 CFR Part 30. Title 40 CFR Part 30.14,\nSpecial Award Conditions, states:\n\n \xe2\x80\x9cIf an applicant or recipient has a history of poor performance, is not financially\n stable; has a management system that does not meet the standards prescribed in\n Circular A\xe2\x80\x93110; has not conformed to the terms and conditions of a previous\n award; or is not otherwise responsible, EPA may impose additional requirements\n as needed, provided that such applicant or recipient is notified in writing as to: the\n nature of the additional requirements, the reason why the additional requirements\n are being imposed, the nature of the corrective action needed, the time allowed for\n completing the corrective actions, and the method for requesting reconsideration\n of the additional requirements imposed.\xe2\x80\x9d\n\n\n\n11-4-0013 7\n\x0cThe special conditions should include (1) payment on a reimbursement basis, (2) EPA review\nand approval of reimbursement requests prior to payment, and (3) EPA review and approval of\ncontracts prior to award.\n\nRecommendations\nWe recommend that Assistant Administrator for Administration and Resources Management:\n\n 1.\t Disallow and recover $707,320 in the costs claimed for the Resodyn subcontract.\n\n 2.\t Consider suspension and debarment of the grantee and Resodyn from future federal\n awards under Title 2 CFR Part 180.\n\n 3.\t Require the grantee to improve its procurement process to ensure compliance with Title\n 40 CFR Part 30, including codes of conduct and contract cost or price analysis\n requirements.\n\n 4.\t Require that the following special conditions be included for future EPA awards to the\n grantee until EPA determines that the grantee has met all applicable federal financial and\n procurement requirements:\n a.\t Payment on a reimbursement basis.\n b.\t Review and approval by the EPA project officer of reimbursement requests.\n including all supporting documentation for the claims prior to payment.\n c.\t Review and approval by the EPA project officer of contracts prior to award.\n\nAgency and Grantee Comments\nThe OIG received comments on the draft report from the Office of Administration and Resources\nManagement and the grantee on August 23, 2010. The grantee also provided supplemental\ndocumentation as support for its comments.\n\nThe Office of Administration and Resources Management generally agreed with the findings and\noffered clarifying information on the FY 2004 and 2005 appropriation acts with regard to the\naward to the grantee. The Office of Administration and Resources Management did not comment\non the Recommendations. The Agency\xe2\x80\x99s complete written response is in Appendix A.\n\nThe grantee generally disagreed with the findings and recommendations and said that they were\nbased on incomplete or misinterpreted factual information. The grantee\xe2\x80\x99s complete written\nresponse is in Appendix B. The supplemental documentation provided by the grantee is not\nincluded in the report. The supplemental documentation is available on request, except for\ndocumentation the grantee has determined to be confidential and requested that it be withheld\nfrom distribution outside of EPA.\n\n\n\n\n11-4-0013 8\n\x0cOIG Response\nWe agreed with the clarifying information on the FY 2004 and 2005 appropriation acts provided\nby the Office of Administration and Resources Management and revised the report as\nappropriate. The Agency will need to provide a proposed management decision for resolution of\nthe findings in response to this report.\n\nThe grantee's comments did not resolve the procurement issues; including the apparent, if not\nreal, conflict of interest with its subcontractor. Therefore, our position on the findings and\nrecommendations in the attestation report remains generally unchanged. However, we accepted\nthe grantee's explanation about its use of letterhead templates and the quality assurance plan\nobtained from the sole source subcontractor. We also accepted the grantee's explanation about\nthe attendance of the subcontractor\xe2\x80\x99s president at Board of Directors meetings where project\nupdates and progress reports were presented. We revised the report as appropriate based on these\nexplanations. The full text of our response is embedded as text boxes in the grantee\xe2\x80\x99s complete\nwritten response.\n\n\n\n\n11-4-0013 9\n\x0c Status of Recommendations and\n Potential Monetary Benefits\n\n POTENTIAL MONETARY\n RECOMMENDATIONS BENEFITS (in $000s)\n\n Planned\n Rec. Page Completion Claimed Agreed To\n No. No. Subject Status1 Action Official Date Amount Amount\n\n 1 8 Disallow and recover $707,320 in the costs claimed U Assistant Administrator for $707.3\n for the Resodyn subcontract. Administration and\n Resources Management\n\n 2 8 Consider suspension and debarment of the grantee U Assistant Administrator for\n and Resodyn from future federal awards under Administration and\n Title 2 CFR Part 180 Resources Management\n\n 3 8 Require the grantee to improve its procurement U Assistant Administrator for,\n process to ensure compliance with Title 40 CFR Administration and\n Part 30, including codes of conduct and contract Resources Management\n cost or price analysis requirements.\n\n 4 8 Require that the following special conditions be U Assistant Administrator for\n included for future EPA awards to the grantee until Administration and\n EPA determines that the grantee has met all Resources Management\n applicable federal financial and procurement\n requirements:\n (a) Payment on a reimbursement basis.\n (b) Review and approval by the EPA project\n officer of reimbursement requests\n including all supporting documentation for\n the claims prior to payment.\n (c) Review and approval by the EPA project\n officer of contracts prior to award.\n\n\n\n\n1 O = recommendation is open with agreed-to corrective actions pending\n C = recommendation is closed with all agreed-to actions completed\n U = recommendation is undecided with resolution efforts in progress\n\n\n\n\n11-4-0013 10\n\x0c Appendix A\n\n Agency\xe2\x80\x99s Comments on the Draft Report\n\n\n United States Environmental Protection Agency\n Washington, DC 20460\n\n\n Office of\n Administration\n and Resources\n Management\n\n August 23, 2010\n\n\n\nMEMORANDUM\n\n\nSUBJECT: Draft Attestation Report\n Examination of Costs Claimed Under EPA Cooperative Agreement X83275501\n Awarded to The Montana Physical Sciences Foundation Project No. 2009-0840\n\nFROM: Denise Sirmons, Director /s/\n Grants and Interagency Agreement Management Division\n\nTO: Robert K. Adachi\n Director of Forensic Audits\n\n\nThank you for the opportunity to review and comment on the factual accuracy of the subject\nOffice of Inspector General (OIG) Draft Attestation Report (Report), dated July 22, 2010. Based\non our review of the Report and information available at this time, we generally agree with the\nReport findings, but offer the following two clarifications:\n\n1.\t The \xe2\x80\x9cearmarks\xe2\x80\x9d that prompted EPA to award funding to The Montana Physical Sciences\n Foundation (Foundation) were not contained in EPA\xe2\x80\x99s Fiscal Year 2004 or Fiscal Year 2005\n appropriation acts. Rather, the Agency honored the direction provided by EPA\xe2\x80\x99s\n appropriations committees in the conference reports to fund the Foundation. Although such\n directions in conference committee reports are not legally binding unless the text of the\n report is incorporated by reference into the appropriations act, Agency policy at the time was\n\n\n\n\n11-4-0013 11\n\x0c to follow the direction. Executive Branch policy now prohibits EPA from honoring earmarks\n that are not included in statutory text.\n\n2.\t The conference committee report for EPA\xe2\x80\x99s Fiscal Year 2004 Appropriation Act, Report\n 108-401 (November 25, 2003) directed that EPA award $800,000 to \xe2\x80\x9cMontec Research in\n Butte Montana.\xe2\x80\x9d In 2003, Montec Research officially changed its name to Resodyn\n Corporation. The earmark is item 57 in the portion of the report on EPA's Science and\n Technology appropriation.\n\n\nOur thanks again for the opportunity to comment on the Report. If you have any questions\nconcerning this matter, please contact me at 202-564-6771. You may also contact Joe Lucia, the\nOffice of Grants and Debarment Audit Follow-up Coordinator, at 202-564-5378.\n\ncc: Michael Owen\n Jessica Knight\n Cynthia Johnson\n Kysha Holliday\n Joe Lucia\n\n\n\n\n11-4-0013 12\n\x0c Appendix B\n\n Grantee\xe2\x80\x99s Comments on the Draft Report\n and the OIG\xe2\x80\x99s Evaluation\nThe response from The Montana Physical Sciences Foundation is provided verbatim. OIG\nresponses to those comments have been inserted in text boxes.\n\n\n Montana\xc2\xa0Physical\xc2\xa0Science\xc2\xa0Foundation\n\xc2\xa0\n Audit\xc2\xa0Comments\n\xc2\xa0\n Agreement\xc2\xa0X83275501\n\xc2\xa0\n between\n\xc2\xa0\n The\xc2\xa0Montana\xc2\xa0Physical\xc2\xa0Sciences\xc2\xa0Foundation\n\xc2\xa0\n and\n\xc2\xa0\n the\xc2\xa0United\xc2\xa0States\xc2\xa0Environmental\xc2\xa0Protection\xc2\xa0Agency\n\xc2\xa0\n\xc2\xa0\n\xc2\xa0\nThe\xc2\xa0following\xc2\xa0is\xc2\xa0the\xc2\xa0Montana\xc2\xa0Physical\xc2\xa0Science\xc2\xa0Foundation\xc2\xa0(the\xc2\xa0\xe2\x80\x9cFoundation\xe2\x80\x9d)'s\xc2\xa0response\xc2\xa0to\xc2\xa0the\xc2\xa0draft\xc2\xa0\nattestation\xc2\xa0report\xc2\xa0titled:\xc2\xa0Examination\xc2\xa0of\xc2\xa0Costs\xc2\xa0Claimed\xc2\xa0Under\xc2\xa0EPA\xc2\xa0Cooperative\xc2\xa0Agreement\xc2\xa0X83275501\xc2\xa0\nAwarded\xc2\xa0to\xc2\xa0The\xc2\xa0Montana\xc2\xa0Physical\xc2\xa0Sciences\xc2\xa0Foundation,\xc2\xa0Project\xc2\xa0No.\xc2\xa02009\xe2\x80\x90840,\xc2\xa0issued\xc2\xa0July\xc2\xa022,\xc2\xa02010\xc2\xa0(the\xc2\xa0\n\xe2\x80\x9cReport\xe2\x80\x9d).\xc2\xa0\xc2\xa0\xc2\xa0\n\xc2\xa0\nIntroduction\xc2\xa0\n\xc2\xa0\nIn\xc2\xa0several\xc2\xa0key\xc2\xa0respects,\xc2\xa0the\xc2\xa0Report\xe2\x80\x99s\xc2\xa0conclusion\xc2\xa0that\xc2\xa0the\xc2\xa0Foundation\xc2\xa0failed\xc2\xa0to\xc2\xa0comply\xc2\xa0with\xc2\xa0applicable\xc2\xa0\nprocurement\xc2\xa0regulations\xc2\xa0is\xc2\xa0based\xc2\xa0on\xc2\xa0incomplete\xc2\xa0or\xc2\xa0misinterpreted\xc2\xa0factual\xc2\xa0information.\xc2\xa0\xc2\xa0In\xc2\xa0particular:\xc2\xa0\n\xc2\xa0\n \xef\x82\xb7\t Congress\xc2\xa0intended\xc2\xa0Resodyn\xc2\xa0to\xc2\xa0be\xc2\xa0the\xc2\xa0sole\xc2\xa0source\xc2\xa0subcontractor\xc2\xa0for\xc2\xa0Project\xc2\xa0No.\xc2\xa02009\xe2\x80\x90840\xc2\xa0(the\xc2\xa0\n \xe2\x80\x9cProject\xe2\x80\x9d)\xc2\xa0\n \xc2\xa0\n \xef\x82\xb7\t The\xc2\xa0president\xc2\xa0of\xc2\xa0Resodyn\xc2\xa0promptly\xc2\xa0resigned\xc2\xa0from\xc2\xa0the\xc2\xa0Foundation\xe2\x80\x99s\xc2\xa0Board\xc2\xa0when\xc2\xa0his\xc2\xa0service\xc2\xa0was\xc2\xa0\n identified\xc2\xa0as\xc2\xa0a\xc2\xa0problem\xc2\xa0by\xc2\xa0EPA\xc2\xa0\n \xc2\xa0\n \xef\x82\xb7\t The\xc2\xa0president\xc2\xa0of\xc2\xa0Resodyn\xc2\xa0did\xc2\xa0not\xc2\xa0author\xc2\xa0any\xc2\xa0of\xc2\xa0the\xc2\xa0\xe2\x80\x9cimportant\xc2\xa0documents\xe2\x80\x9d\xc2\xa0identified\xc2\xa0in\xc2\xa0the\xc2\xa0\n Report\xc2\xa0\n \xc2\xa0\n \xef\x82\xb7\t The\xc2\xa0president\xc2\xa0of\xc2\xa0Resodyn\xc2\xa0did\xc2\xa0not\xc2\xa0participate\xc2\xa0in\xc2\xa0decisions\xc2\xa0made\xc2\xa0by\xc2\xa0the\xc2\xa0Board\xc2\xa0after\xc2\xa0his\n\xc2\xa0\n resignation,\xc2\xa0and\xc2\xa0was\xc2\xa0not\xc2\xa0present\xc2\xa0when\xc2\xa0the\xc2\xa0Board\xc2\xa0met\xc2\xa0in\xc2\xa0executive\xc2\xa0session\n\xc2\xa0\n \xc2\xa0\n \xef\x82\xb7\t Resodyn\xc2\xa0abided\xc2\xa0by\xc2\xa0the\xc2\xa0project\xe2\x80\x99s\xc2\xa0amended\xc2\xa0scope\xc2\xa0of\xc2\xa0work,\xc2\xa0even\xc2\xa0though\xc2\xa0the\xc2\xa0subcontract\xc2\xa0was\xc2\xa0not\xc2\xa0\n amended\xc2\xa0\n \xc2\xa0\n \xef\x82\xb7\t Resodyn\xc2\xa0is\xc2\xa0willing\xc2\xa0to\xc2\xa0transfer\xc2\xa0intellectual\xc2\xa0property\xc2\xa0rights\xc2\xa0to\xc2\xa0EPA\xc2\xa0as\xc2\xa0appropriate\xc2\xa0under\xc2\xa0law\xc2\xa0\n \xc2\xa0\n\n\n11-4-0013 13\n\x0cFurthermore,\xc2\xa0the\xc2\xa0Foundation\xc2\xa0acted\xc2\xa0in\xc2\xa0good\xc2\xa0faith\xc2\xa0and\xc2\xa0in\xc2\xa0consultation\xc2\xa0with\xc2\xa0EPA\xc2\xa0throughout\xc2\xa0the\xc2\xa0Project.\xc2\xa0\xc2\xa0\nThe\xc2\xa0Project\xc2\xa0work\xc2\xa0was\xc2\xa0completed\xc2\xa0by\xc2\xa0the\xc2\xa0subcontractor\xc2\xa0on\xc2\xa0time\xc2\xa0and\xc2\xa0within\xc2\xa0budget.\xc2\xa0\xc2\xa0Under\xc2\xa0these\xc2\xa0\ncircumstances,\xc2\xa0there\xc2\xa0is\xc2\xa0no\xc2\xa0justification\xc2\xa0for\xc2\xa0seeking\xc2\xa0to\xc2\xa0recover\xc2\xa0any\xc2\xa0of\xc2\xa0the\xc2\xa0grant\xc2\xa0money,\xc2\xa0or\xc2\xa0imposing\xc2\xa0any\xc2\xa0\nother\xc2\xa0penalties\xc2\xa0on\xc2\xa0the\xc2\xa0Foundation.\xc2\xa0\n\xc2\xa0\nBackground\xc2\xa0\n\xc2\xa0\nThe\xc2\xa0background\xc2\xa0section\xc2\xa0of\xc2\xa0the\xc2\xa0Report\xc2\xa0omits\xc2\xa0several\xc2\xa0key\xc2\xa0facts\xc2\xa0related\xc2\xa0to\xc2\xa0the\xc2\xa0Project.\xc2\xa0\xc2\xa0As\xc2\xa0an\xc2\xa0initial\xc2\xa0matter,\xc2\xa0\nthe\xc2\xa0Report\xc2\xa0fails\xc2\xa0to\xc2\xa0acknowledge\xc2\xa0that\xc2\xa0the\xc2\xa0Congressionally\xc2\xa0appropriated\xc2\xa0grant\xc2\xa0here\xc2\xa0at\xc2\xa0issue\xc2\xa0was\xc2\xa0originally\xc2\xa0\nmade\xc2\xa0in\xc2\xa0response\xc2\xa0to\xc2\xa0a\xc2\xa02004\xc2\xa0request\xc2\xa0by\xc2\xa0Montec\xc2\xa0Research\xc2\xa0Corporation\xe2\x80\x94the\xc2\xa0predecessor\xc2\xa0to\xc2\xa0Resodyn\xc2\xa0\nCorporation\xe2\x80\x94for\xc2\xa0an\xc2\xa0EPA\xc2\xa0appropriation.\xc2\xa0\xc2\xa0This\xc2\xa0request\xc2\xa0was\xc2\xa0for\xc2\xa0additional\xc2\xa0funding\xc2\xa0to\xc2\xa0continue\xc2\xa0work\xc2\xa0\nstarted\xc2\xa0under\xc2\xa0EPA\xc2\xa0Phase\xc2\xa01\xc2\xa0SBIR\xc2\xa0Solicitations\xc2\xa0No.\xc2\xa0PR\xe2\x80\x90NC\xe2\x80\x9004\xe2\x80\x9010308.1\xc2\xa0\xc2\xa0In\xc2\xa02005,\xc2\xa0Congress\xc2\xa0specifically\xc2\xa0\ndesignated\xc2\xa0$800,000\xc2\xa0to\xc2\xa0Montec\xc2\xa0for\xc2\xa0this\xc2\xa0work.2\xc2\xa0\xc2\xa0This\xc2\xa0line\xc2\xa0item\xc2\xa0clearly\xc2\xa0evidences\xc2\xa0Congress'\xc2\xa0intent\xc2\xa0that\xc2\xa0\nMontec/Resodyn\xc2\xa0be\xc2\xa0the\xc2\xa0sole\xc2\xa0source\xc2\xa0subcontractor\xc2\xa0for\xc2\xa0the\xc2\xa0work\xc2\xa0performed\xc2\xa0in\xc2\xa0the\xc2\xa0Project.\xc2\xa0\xc2\xa0In\xc2\xa0addition,\xc2\xa0\nthe\xc2\xa0sole\xc2\xa0source\xc2\xa0contract\xc2\xa0is\xc2\xa0justified\xc2\xa0by\xc2\xa0the\xc2\xa0follow\xe2\x80\x90on\xc2\xa0nature\xc2\xa0of\xc2\xa0the\xc2\xa0Project\xe2\x80\x99s\xc2\xa0work,\xc2\xa0which\xc2\xa0is\xc2\xa0outlined\xc2\xa0in\xc2\xa0\nthe\xc2\xa0SBIR\xc2\xa0Solicitation\xc2\xa0cited\xc2\xa0above.\n\n\n OIG RESPONSE 1 The project funded under the cooperative agreement is not\n related to nor a continuation of work conducted under EPA SBIR Phase 1\n solicitation #PR-NC-04-10308. The cooperative agreement, which provided the\n funding for this project, was not awarded under the SBIR program. Rather, the\n cooperative agreement specifies that the award was made under the statutory\n authorities of the Clean Air, Clean Water, Solid Waste Disposal, and Toxic\n Substances Control Acts. In addition, the scope of work included in the grantee's\n application for the cooperative agreement made no reference to the SBIR program.\n The Congressional conference report for EPA's Fiscal Year (FY) 2004\n appropriation designated the $800,000 in funding for Montec's pilot scale enzyme\n catalyzed processes research project. However, the conference report for the FY 2005\n Congressional appropriation, which redirected the funding to The Montana Physical\n Sciences Foundation, did not require the grantee to award an uncompetitive, sole\n source subcontract to Resodyn. As a recipient of the EPA cooperative agreement\n award, The Montana Physical Sciences Foundation was required to comply with\n Title 40 Code of Federal Regulation (CFR) Part 30. Title 40 CFR Part 30.46\n specifies that procurement records and files for purchases that exceed the small\n purchase threshold shall include a justification for lack of competition when\n competitive bids or offers are not obtained. The grantee was not able to provide the\n required justification during our examination, and its comments above do not\n justify the sole source contract award to Resodyn.\n\n\nOnce\xc2\xa0the\xc2\xa0appropriation\xc2\xa0was\xc2\xa0made\xc2\xa0Resodyn\xc2\xa0was\xc2\xa0informed\xc2\xa0that\xc2\xa0the\xc2\xa0EPA\xc2\xa0would\xc2\xa0not\xc2\xa0award\xc2\xa0the\xc2\xa0funds\xc2\xa0to\xc2\xa0a\xc2\xa0\nfor\xe2\x80\x90profit\xc2\xa0company.\xc2\xa0\xc2\xa0To\xc2\xa0resolve\xc2\xa0this\xc2\xa0problem\xc2\xa0and\xc2\xa0fulfill\xc2\xa0the\xc2\xa0intent\xc2\xa0of\xc2\xa0Congress,\xc2\xa0Resodyn,\xc2\xa0working\xc2\xa0jointly\xc2\xa0\n\n1\n \xc2\xa0See\xc2\xa0Resodyn\xc2\xa0Corp.,\xc2\xa0Proposal\xc2\xa0to\xc2\xa0the\xc2\xa0Foundation\xc2\xa0for\xc2\xa0Biodegradable\xc2\xa0Lubricant\xc2\xa0and\xc2\xa0Solvent\xc2\xa0Production\xc2\xa0from\xc2\xa0Waste\n\xc2\xa0\nGreases\xc2\xa0(Dec.\xc2\xa015,\xc2\xa02005)\xc2\xa0at\xc2\xa05\xc2\xa0(attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0A)\n\xc2\xa0\n2\n \xc2\xa0H.R.\xc2\xa0Rep.\xc2\xa0108\xe2\x80\x90401,\xc2\xa0at\xc2\xa01118,\xc2\xa0Line\xc2\xa0item\xc2\xa057\xc2\xa0(2003)\xc2\xa0($800,000\xc2\xa0for\xc2\xa0Montec\xc2\xa0Research);\xc2\xa0H.R.\xc2\xa0Rep.\xc2\xa0108\xe2\x80\x90792,\xc2\xa0at\xc2\xa01555\n\xc2\xa0\n(2004)\xc2\xa0(transferring\xc2\xa0funding\xc2\xa0from\xc2\xa0Montec\xc2\xa0to\xc2\xa0Resodyn).\xc2\xa0\xc2\xa0The\xc2\xa0relevant\xc2\xa0excerpts\xc2\xa0of\xc2\xa0both\xc2\xa0reports\xc2\xa0are\xc2\xa0attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0B.\n\xc2\xa0\n\n\n11-4-0013 14\n\x0cand\xc2\xa0cooperatively\xc2\xa0with\xc2\xa0the\xc2\xa0EPA,\xc2\xa0set\xc2\xa0up\xc2\xa0The\xc2\xa0Montana\xc2\xa0Physical\xc2\xa0Sciences\xc2\xa0Foundation.\xc2\xa0\xc2\xa0The\xc2\xa0Foundation\xc2\xa0\napplied\xc2\xa0for\xc2\xa0and\xc2\xa0received\xc2\xa0its\xc2\xa0tax\xc2\xa0exempt\xc2\xa0501(c)3\xc2\xa0status\xc2\xa0and\xc2\xa0a\xc2\xa0Board\xc2\xa0of\xc2\xa0Directors\xc2\xa0was\xc2\xa0established.\xc2\xa0\xc2\xa0The\xc2\xa0\nFoundation\xc2\xa0then\xc2\xa0subcontracted\xc2\xa0with\xc2\xa0Resodyn\xc2\xa0to\xc2\xa0perform\xc2\xa0the\xc2\xa0Project\xc2\xa0work.\xc2\xa0\n\n\n OIG RESPONSE 2 We acknowledge that Resodyn established The Montana\n Physical Sciences Foundation because EPA determined that the for-profit\n company was not eligible for the funding provided by the Fiscal Year 2004\n appropriation. Our review of EPA's grant and correspondence files and interviews\n with EPA grant and project officer personnel involved with awarding and\n managing the cooperative agreement did not disclose or suggest that EPA\n participated in creating The Montana Physical Sciences Foundation. The Articles of\n Incorporation for The Montana Physical Sciences Foundation show that the\n president of Resodyn created the non-profit organization in 2004 as discussed in\n the attestation report.\n\n\nWhen\xc2\xa0EPA\xc2\xa0raised\xc2\xa0concerns\xc2\xa0about\xc2\xa0the\xc2\xa0Foundation\xe2\x80\x99s\xc2\xa0capability\xc2\xa0to\xc2\xa0fulfill\xc2\xa0its\xc2\xa0role\xc2\xa0as\xc2\xa0contract\xc2\xa0administrator,\xc2\xa0\nthe\xc2\xa0Foundation\xc2\xa0completed\xc2\xa0an\xc2\xa0Administrative\xc2\xa0Capability\xc2\xa0Questionnaire.3\xc2\xa0\xc2\xa0After\xc2\xa0reviewing\xc2\xa0this\xc2\xa0\ndocumentation,\xc2\xa0EPA\xc2\xa0informed\xc2\xa0the\xc2\xa0Foundation\xc2\xa0that\xc2\xa0XXXXXXX,\xc2\xa0as\xc2\xa0a\xc2\xa0principal\xc2\xa0of\xc2\xa0Resodyn,\xc2\xa0could\xc2\xa0not\xc2\xa0be\xc2\xa0on\xc2\xa0\nthe\xc2\xa0Board\xc2\xa0of\xc2\xa0the\xc2\xa0Foundation.\xc2\xa0\xc2\xa0As\xc2\xa0the\xc2\xa0Report\xc2\xa0acknowledges,\xc2\xa0XXXXXXX\xc2\xa0immediately\xc2\xa0resigned\xc2\xa0from\xc2\xa0the\xc2\xa0\nFoundation\xe2\x80\x99s\xc2\xa0Board.\xc2\xa0\xc2\xa0The\xc2\xa0EPA\xc2\xa0ultimately\xc2\xa0issued\xc2\xa0a\xc2\xa0Cooperative\xc2\xa0Agreement\xc2\xa0for\xc2\xa0the\xc2\xa0project.\xc2\xa0\xc2\xa0Again,\xc2\xa0the\xc2\xa0\nFoundation\xc2\xa0took\xc2\xa0these\xc2\xa0steps\xc2\xa0in\xc2\xa0consultation\xc2\xa0with\xc2\xa0EPA,\xc2\xa0and\xc2\xa0made\xc2\xa0every\xc2\xa0effort\xc2\xa0to\xc2\xa0ensure\xc2\xa0that\xc2\xa0it\xc2\xa0was\xc2\xa0in\xc2\xa0\ncompliance\xc2\xa0with\xc2\xa0all\xc2\xa0rules\xc2\xa0and\xc2\xa0regulation\xc2\xa0regarding\xc2\xa0the\xc2\xa0award\xc2\xa0and\xc2\xa0administration\xc2\xa0of\xc2\xa0the\xc2\xa0Project\xc2\xa0funding.\xc2\xa0\n\xc2\xa0\nUltimately,\xc2\xa0the\xc2\xa0Project\xc2\xa0work\xc2\xa0for\xc2\xa0which\xc2\xa0EPA\xc2\xa0contracted\xc2\xa0was\xc2\xa0completed\xc2\xa0on\xc2\xa0time\xc2\xa0and\xc2\xa0within\xc2\xa0budget.\xc2\xa0\xc2\xa0The\xc2\xa0\nfinal\xc2\xa0Project\xc2\xa0report\xc2\xa0was\xc2\xa0accepted\xc2\xa0by\xc2\xa0the\xc2\xa0Agency.4\xc2\xa0\xc2\xa0\n\n\n OIG RESPONSE 3 We acknowledge that the final project report was accepted\n by EPA. However, EPA's acceptance of the final project report does not resolve\n the procurement issues and questioned costs discussed in the attestation report.\n\n\n\nApparent\xc2\xa0Conflict\xc2\xa0of\xc2\xa0Interest\xc2\xa0between\xc2\xa0Grantee\xc2\xa0and\xc2\xa0Subcontractor\xc2\xa0\n\xc2\xa0\nAs\xc2\xa0discussed\xc2\xa0above,\xc2\xa0the\xc2\xa0basis\xc2\xa0for\xc2\xa0the\xc2\xa0award\xc2\xa0of\xc2\xa0the\xc2\xa0Project\xc2\xa0work\xc2\xa0as\xc2\xa0a\xc2\xa0sole\xc2\xa0source\xc2\xa0contract\xc2\xa0to\xc2\xa0Resodyn\xc2\xa0was\xc2\xa0\na\xc2\xa0Congressional\xc2\xa0appropriation.\xc2\xa0\xc2\xa0The\xc2\xa0Foundation\xc2\xa0was\xc2\xa0created\xc2\xa0to\xc2\xa0satisfy\xc2\xa0EPA\xe2\x80\x99s\xc2\xa0rules\xc2\xa0and\xc2\xa0regulations,\xc2\xa0which\xc2\xa0\ndictated\xc2\xa0that\xc2\xa0the\xc2\xa0Congressional\xc2\xa0funding\xc2\xa0must\xc2\xa0be\xc2\xa0managed\xc2\xa0by\xc2\xa0a\xc2\xa0non\xe2\x80\x90profit\xc2\xa0entity.\xc2\xa0The\xc2\xa0Foundation\xc2\xa0\naccordingly\xc2\xa0was\xc2\xa0set\xc2\xa0up\xc2\xa0with\xc2\xa0the\xc2\xa0full\xc2\xa0knowledge\xc2\xa0and\xc2\xa0consent\xc2\xa0of\xc2\xa0the\xc2\xa0EPA.5\xc2\xa0\xc2\xa0\xc2\xa0\n\n\n\n3\n \xc2\xa0See\xc2\xa0Administrative\xc2\xa0Capability\xc2\xa0Questionnaire\xc2\xa0(attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0C).\n\xc2\xa0\n4\n \xc2\xa0See\xc2\xa0Federal\xc2\xa0Financial\xc2\xa0Report\xc2\xa0(attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0D);\xc2\xa0Email\xc2\xa0from\xc2\xa0XXXXXXX,\xc2\xa0EPA\xc2\xa0to\xc2\xa0XXXXXXX\xc2\xa0(Sept.\xc2\xa024,\xc2\xa02009)\xc2\xa0(attached\n\xc2\xa0\nas\xc2\xa0Ex.\xc2\xa0E).\n\xc2\xa0\n5\n \xc2\xa0See\xc2\xa0Email\xc2\xa0from\xc2\xa0XXXXXX\xc2\xa0(EPA)\xc2\xa0to\xc2\xa0XXXXXX\xc2\xa0(Sept.\xc2\xa019,\xc2\xa02005)\xc2\xa0(attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0F).\n\xc2\xa0\n\n\n11-4-0013 15\n\x0c OIG RESPONSE 4 As discussed in OIG RESPONSE 1, the conference report\n for the Fiscal Year 2005 Congressional appropriation, which designated the\n funding to the grantee, did not require the sole source subcontract to Resodyn.\n Our review of EPA's grant and correspondence files and interviews with EPA\n grant and project officer personnel involved with awarding and managing the\n cooperative agreement did not disclose or suggest that EPA participated in\n creating The Montana Physical Sciences Foundation as discussed in OIG\n RESPONSE 2. We also note that the email cited in the comment above discusses\n EPA's concerns with a conflict of interest between the grantee and the president of\n Resodyn rather than providing the Agency's consent on the creation of the non-\n profit organization.\n\nThe\xc2\xa0Draft\xc2\xa0Report\xc2\xa0accurately\xc2\xa0states\xc2\xa0the\xc2\xa0facts\xc2\xa0regarding\xc2\xa0the\xc2\xa0president\xc2\xa0of\xc2\xa0Resodyn's\xc2\xa0participation\xc2\xa0in\xc2\xa0the\xc2\xa0\ncreation\xc2\xa0of\xc2\xa0the\xc2\xa0Foundation\xc2\xa0and\xc2\xa0his\xc2\xa0initial\xc2\xa0position\xc2\xa0on\xc2\xa0the\xc2\xa0Foundation\xe2\x80\x99s\xc2\xa0Board\xc2\xa0of\xc2\xa0Directors.\xc2\xa0\xc2\xa0It\xc2\xa0also\xc2\xa0\naccurately\xc2\xa0reflects\xc2\xa0that\xc2\xa0the\xc2\xa0president\xc2\xa0resigned\xc2\xa0immediately\xc2\xa0after\xc2\xa0the\xc2\xa0EPA\xc2\xa0General\xc2\xa0Counsel\xc2\xa0determined\xc2\xa0\nthere\xc2\xa0could\xc2\xa0be\xc2\xa0an\xc2\xa0actual\xc2\xa0or\xc2\xa0apparent\xc2\xa0conflict\xc2\xa0of\xc2\xa0interest.\xc2\xa0\xc2\xa0EPA\xc2\xa0and\xc2\xa0the\xc2\xa0Foundation\xc2\xa0concluded\xc2\xa0that\xc2\xa0the\xc2\xa0\nactual\xc2\xa0or\xc2\xa0apparent\xc2\xa0conflict\xc2\xa0was\xc2\xa0eliminated\xc2\xa0when\xc2\xa0the\xc2\xa0president\xe2\x80\x99s\xc2\xa0resignation\xc2\xa0from\xc2\xa0the\xc2\xa0Foundation\xc2\xa0\noccurred.\xc2\xa0\xc2\xa0The\xc2\xa0Report\xc2\xa0does\xc2\xa0not\xc2\xa0seem\xc2\xa0to\xc2\xa0challenge\xc2\xa0that\xc2\xa0conclusion.\xc2\xa0\xc2\xa0Instead,\xc2\xa0the\xc2\xa0Report\xc2\xa0identifies\xc2\xa0two\xc2\xa0\ncircumstances\xc2\xa0that\xc2\xa0allegedly\xc2\xa0\xe2\x80\x9csuggest\xc2\xa0a\xc2\xa0failure\xc2\xa0of\xc2\xa0an\xc2\xa0arm\xe2\x80\x99s\xc2\xa0length\xc2\xa0relationship\xc2\xa0between\xc2\xa0the\xc2\xa0grantee\xc2\xa0and\xc2\xa0\nResodyn,\xc2\xa0and\xc2\xa0an\xc2\xa0apparent,\xc2\xa0if\xc2\xa0not\xc2\xa0actual\xc2\xa0conflict\xc2\xa0of\xc2\xa0interest\xc2\xa0.\xc2\xa0.\xc2\xa0.\xc2\xa0.\xe2\x80\x9d\xc2\xa0\xc2\xa0The\xc2\xa0Report\xe2\x80\x99s\xc2\xa0conclusion,\xc2\xa0however,\xc2\xa0is\xc2\xa0\nbased\xc2\xa0on\xc2\xa0a\xc2\xa0misinterpretation\xc2\xa0of\xc2\xa0the\xc2\xa0facts.\xc2\xa0\n\xc2\xa0\nImportant\xc2\xa0Documents\xc2\xa0\n\xc2\xa0\nRelying\xc2\xa0on\xc2\xa0\xe2\x80\x9celectronic\xc2\xa0properties,\xe2\x80\x9d\xc2\xa0the\xc2\xa0Report\xc2\xa0identifies\xc2\xa0Resodyn\xe2\x80\x99s\xc2\xa0president,\xc2\xa0XXXXXXX,\xc2\xa0as\xc2\xa0the\xc2\xa0creator\xc2\xa0of\xc2\xa0\n\xe2\x80\x9cfour\xc2\xa0important\xc2\xa0documents.\xe2\x80\x9d\xc2\xa0\xc2\xa0The\xc2\xa0Report\xc2\xa0reasons\xc2\xa0that\xc2\xa0XXXXXXX\xc2\xa0must\xc2\xa0have\xc2\xa0either\xc2\xa0\xe2\x80\x9ccreated\xc2\xa0or\xc2\xa0\nparticipated\xc2\xa0in\xc2\xa0the\xc2\xa0preparation\xc2\xa0of\xe2\x80\x9d\xc2\xa0those\xc2\xa0document.\xc2\xa0\xc2\xa0In\xc2\xa0fact,\xc2\xa0there\xc2\xa0is\xc2\xa0another\xc2\xa0explanation\xc2\xa0for\xc2\xa0the\xc2\xa0\n\xe2\x80\x9celectronic\xc2\xa0properties\xe2\x80\x9d\xc2\xa0of\xc2\xa0these\xc2\xa0documents.\xc2\xa0\n\xc2\xa0\nBecause\xc2\xa0XXXXXXX\xc2\xa0was\xc2\xa0originally\xc2\xa0a\xc2\xa0part\xc2\xa0of\xc2\xa0the\xc2\xa0Foundation\xe2\x80\x99s\xc2\xa0Board,\xc2\xa0he\xc2\xa0created\xc2\xa0several\xc2\xa0electronic\xc2\xa0\nletterhead\xc2\xa0templates\xc2\xa0that\xc2\xa0the\xc2\xa0Foundation\xe2\x80\x99s\xc2\xa0Executive\xc2\xa0Director\xc2\xa0and\xc2\xa0Chairman\xc2\xa0used\xc2\xa0when\xc2\xa0they\xc2\xa0authored\xc2\xa0\ncertain\xc2\xa0correspondence.6\xc2\xa0\xc2\xa0But\xc2\xa0XXXXXXX\xc2\xa0did\xc2\xa0not\xc2\xa0author\xc2\xa0or\xc2\xa0otherwise\xc2\xa0have\xc2\xa0any\xc2\xa0hand\xc2\xa0in\xc2\xa0creating\xc2\xa0the\xc2\xa0three\xc2\xa0\nletters\xc2\xa0mentioned\xc2\xa0in\xc2\xa0the\xc2\xa0Report.7\xc2\xa0\xc2\xa0The\xc2\xa0fact\xc2\xa0that\xc2\xa0the\xc2\xa0Foundation\xc2\xa0continued\xc2\xa0to\xc2\xa0use\xc2\xa0a\xc2\xa0letterhead\xc2\xa0template\xc2\xa0\nfor\xc2\xa0correspondence\xc2\xa0originally\xc2\xa0created\xc2\xa0by\xc2\xa0XXXXXXX\xc2\xa0does\xc2\xa0not\xc2\xa0suggest\xc2\xa0the\xc2\xa0failure\xc2\xa0of\xc2\xa0an\xc2\xa0arm\xe2\x80\x99s\xc2\xa0length\xc2\xa0\nrelationship,\xc2\xa0much\xc2\xa0less\xc2\xa0a\xc2\xa0conflict\xc2\xa0of\xc2\xa0interest,\xc2\xa0between\xc2\xa0the\xc2\xa0Foundation\xc2\xa0and\xc2\xa0Resodyn.\n\nThe\xc2\xa0Quality\xc2\xa0Assurance\xc2\xa0Plan\xc2\xa0mentioned\xc2\xa0in\xc2\xa0the\xc2\xa0Report\xc2\xa0has\xc2\xa0a\xc2\xa0similarly\xc2\xa0innocent\xc2\xa0explanation.8\xc2\xa0\xc2\xa0When\xc2\xa0the\xc2\xa0\nneed\xc2\xa0arose,\xc2\xa0the\xc2\xa0Foundation\xe2\x80\x99s\xc2\xa0Executive\xc2\xa0Director\xc2\xa0inquired\xc2\xa0of\xc2\xa0XXXXXX\xc2\xa0whether\xc2\xa0Resodyn\xc2\xa0had\xc2\xa0a\xc2\xa0template\xc2\xa0\nthat\xc2\xa0The\xc2\xa0Foundation\xc2\xa0could\xc2\xa0use\xc2\xa0in\xc2\xa0evaluating\xc2\xa0proposals\xc2\xa0it\xc2\xa0would\xc2\xa0be\xc2\xa0receiving.9\xc2\xa0\xc2\xa0XXXXXX\xc2\xa0sent\xc2\xa0such\xc2\xa0a\xc2\xa0\n\n6\n \xc2\xa0Affidavit\xc2\xa0of\xc2\xa0XXXXXX\xc2\xa0(\xe2\x80\x9cXXXXXX\xc2\xa0Aff.\xe2\x80\x9d)\xc2\xa0\xc2\xb6\xc2\xa05\xc2\xa0(attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0G).\n\xc2\xa0\n7\n \xc2\xa0XXXXXX\xc2\xa0Aff.\xc2\xa0\xc2\xb6\xc2\xa06.\n\xc2\xa0\n8\n \xc2\xa0The\xc2\xa0Quality\xc2\xa0Assurance\xc2\xa0Plan\xc2\xa0was\xc2\xa0part\xc2\xa0of\xc2\xa0the\xc2\xa0contract\xc2\xa0work\xc2\xa0to\xc2\xa0be\xc2\xa0performed\xc2\xa0by\xc2\xa0Resodyn\xc2\xa0and\xc2\xa0was\xc2\xa0appropriately\n\xc2\xa0\ndone\xc2\xa0by\xc2\xa0them.\n\xc2\xa0\n9\n \xc2\xa0XXXXXX\xc2\xa0Aff.\xc2\xa0\xc2\xb6\xc2\xa07.\n\xc2\xa0\n\n\n11-4-0013 16\n\x0ctemplate,\xc2\xa0and\xc2\xa0the\xc2\xa0Foundation\xe2\x80\x99s\xc2\xa0Executive\xc2\xa0Director\xc2\xa0deemed\xc2\xa0it\xc2\xa0sufficient\xc2\xa0for\xc2\xa0The\xc2\xa0Foundation\xe2\x80\x99s\xc2\xa0purposes.10\xc2\xa0\xc2\xa0\nThere\xc2\xa0is\xc2\xa0no\xc2\xa0evidence\xc2\xa0to\xc2\xa0supports\xc2\xa0the\xc2\xa0claim\xc2\xa0in\xc2\xa0the\xc2\xa0Report\xc2\xa0that\xc2\xa0Resodyn\xc2\xa0had\xc2\xa0any\xc2\xa0influence\xc2\xa0in\xc2\xa0the\xc2\xa0content\xc2\xa0\nof\xc2\xa0the\xc2\xa0report\xc2\xa0summarizing\xc2\xa0the\xc2\xa0Board\xe2\x80\x99s\xc2\xa0comments\xc2\xa0on\xc2\xa0Resodyn\xe2\x80\x99s\xc2\xa0proposal.\xc2\xa0\xc2\xa0In\xc2\xa0fact,\xc2\xa0as\xc2\xa0explained\xc2\xa0in\xc2\xa0the\xc2\xa0\nExecutive\xc2\xa0Director\xe2\x80\x99s\xc2\xa0declaration,\xc2\xa0the\xc2\xa0evaluation\xc2\xa0of\xc2\xa0Resodyn\xe2\x80\x99s\xc2\xa0proposal\xc2\xa0was\xc2\xa0completed\xc2\xa0by\xc2\xa0the\xc2\xa0Board\xc2\xa0\nmembers\xc2\xa0alone,\xc2\xa0without\xc2\xa0any\xc2\xa0input\xc2\xa0whatsoever\xc2\xa0from\xc2\xa0Resodyn.11\xc2\xa0\xc2\xa0Again,\xc2\xa0the\xc2\xa0fact\xc2\xa0that\xc2\xa0the\xc2\xa0Board\xc2\xa0decided\xc2\xa0\nto\xc2\xa0use\xc2\xa0a\xc2\xa0template\xc2\xa0from\xc2\xa0Resodyn\xe2\x80\x99s\xc2\xa0president\xc2\xa0does\xc2\xa0not\xc2\xa0suggest\xc2\xa0any\xc2\xa0apparent\xc2\xa0or\xc2\xa0actual\xc2\xa0conflict\xc2\xa0of\xc2\xa0interest.\xc2\xa0\n\n\n OIG RESPONSE 5 We accept the grantees explanation about the letterhead\n templates and quality assurance plan and have revised the report as appropriate.\n However, the grantee's explanation about the template for evaluating proposals\n provides additional support for our position on the conflict of interest. The\n Executive Director's inquiry to Resodyn for a template to evaluate contract\n proposals and the Board's subsequent use of the contractor's template to evaluate\n the sole source contract proposal suggest a failure of an arm's length relationship\n between the two entities.\n\n\n\nBoard\xc2\xa0Meetings\xc2\xa0\n\xc2\xa0\nThe\xc2\xa0Report\xc2\xa0also\xc2\xa0points\xc2\xa0to\xc2\xa0Resodyn's\xc2\xa0attendance\xc2\xa0at\xc2\xa0Foundation\xc2\xa0Board\xc2\xa0meetings\xc2\xa0as\xc2\xa0evidence\xc2\xa0of\xc2\xa0a\xc2\xa0less\xc2\xa0than\xc2\xa0\nan\xc2\xa0arm\xe2\x80\x99s\xc2\xa0length\xc2\xa0relationship\xc2\xa0between\xc2\xa0the\xc2\xa0parties.\xc2\xa0\xc2\xa0While\xc2\xa0it\xc2\xa0is\xc2\xa0true\xc2\xa0that\xc2\xa0Resodyn\xc2\xa0employees\xc2\xa0regularly\xc2\xa0\nattended\xc2\xa0Foundation\xc2\xa0Board\xc2\xa0meetings,\xc2\xa0their\xc2\xa0attendance\xc2\xa0was\xc2\xa0at\xc2\xa0the\xc2\xa0request\xc2\xa0of\xc2\xa0the\xc2\xa0Board,\xc2\xa0for\xc2\xa0the\xc2\xa0purpose\xc2\xa0\nof\xc2\xa0providing\xc2\xa0the\xc2\xa0Board\xc2\xa0with\xc2\xa0contractually\xe2\x80\x90required\xc2\xa0project\xc2\xa0updates\xc2\xa0and\xc2\xa0progress\xc2\xa0reports.12\xc2\xa0\xc2\xa0When\xc2\xa0\nResodyn\xe2\x80\x99s\xc2\xa0employees\xc2\xa0were\xc2\xa0present\xc2\xa0at\xc2\xa0Board\xc2\xa0meetings,\xc2\xa0they\xc2\xa0did\xc2\xa0not\xc2\xa0participate\xc2\xa0in\xc2\xa0votes\xc2\xa0by\xc2\xa0the\xc2\xa0Board,\xc2\xa0or\xc2\xa0\nin\xc2\xa0the\xc2\xa0discussions\xc2\xa0leading\xc2\xa0up\xc2\xa0to\xc2\xa0those\xc2\xa0votes.13\xc2\xa0\xc2\xa0When\xc2\xa0the\xc2\xa0President\xc2\xa0of\xc2\xa0the\xc2\xa0Foundation\xe2\x80\x99s\xc2\xa0Board\xc2\xa0called\xc2\xa0for\xc2\xa0\nan\xc2\xa0executive\xc2\xa0session\xc2\xa0of\xc2\xa0the\xc2\xa0Board,\xc2\xa0all\xc2\xa0Resodyn\xc2\xa0employees\xc2\xa0were\xc2\xa0excluded\xc2\xa0from\xc2\xa0the\xc2\xa0session.14\xc2\xa0\n\xc2\xa0\nThe\xc2\xa0Report\xc2\xa0infers\xc2\xa0based\xc2\xa0on\xc2\xa0the\xc2\xa0mere\xc2\xa0presence\xc2\xa0of\xc2\xa0Resodyn\xc2\xa0employees\xc2\xa0that\xc2\xa0Resodyn\xc2\xa0participated\xc2\xa0in\xc2\xa0the\xc2\xa0\nBoard's\xc2\xa0decision\xc2\xa0making\xc2\xa0processes.\xc2\xa0That\xc2\xa0is\xc2\xa0simply\xc2\xa0not\xc2\xa0the\xc2\xa0case.\xc2\xa0\xc2\xa0The\xc2\xa0Foundation\xe2\x80\x99s\xc2\xa0Board\xc2\xa0was\xc2\xa0merely\xc2\xa0\nfulfilling\xc2\xa0its\xc2\xa0responsibilities\xc2\xa0under\xc2\xa0the\xc2\xa0agreement\xc2\xa0with\xc2\xa0EPA\xc2\xa0by\xc2\xa0ensuring\xc2\xa0that\xc2\xa0Resodyn\xc2\xa0was\xc2\xa0properly\xc2\xa0\ncarrying\xc2\xa0out\xc2\xa0work\xc2\xa0on\xc2\xa0the\xc2\xa0Project.\xc2\xa0\xc2\xa0No\xc2\xa0conflict\xc2\xa0of\xc2\xa0interest,\xc2\xa0actual\xc2\xa0or\xc2\xa0apparent,\xc2\xa0existed.\xc2\xa0\n\xc2\xa0\n\xc2\xa0\n\n\n\n\n10\n \xc2\xa0XXXXXX\xc2\xa0Aff.\xc2\xa0\xc2\xb6\xc2\xa07.\n\xc2\xa0\n11\n \xc2\xa0XXXXXX\xc2\xa0Aff.\xc2\xa0\xc2\xb6\xc2\xa08.\n\xc2\xa0\n12\n \xc2\xa0Affidavit\xc2\xa0XXXXXXXXXX\xc2\xa0Aff.\xe2\x80\x9d)\xc2\xa0\xc2\xb6\xc2\xa07\xc2\xa0(attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0H);\xc2\xa0Affidavit\xc2\xa0of\xc2\xa0XXXXXXXXX\xc2\xa0Aff.\xe2\x80\x9d)\xc2\xa0\xc2\xb6\xc2\xa04\xc2\xa0(attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0I).\n\xc2\xa0\n13\n \xc2\xa0XXXXXX\xc2\xa0Aff.\xc2\xa0\xc2\xb6\xc2\xa08;\xc2\xa0XXXXXX\xc2\xa0Aff.\xc2\xa0\xc2\xb6\xc2\xb6\xc2\xa04,\xc2\xa05.\n\xc2\xa0\n14\n \xc2\xa0XXXXXX\xc2\xa0Aff.\xc2\xa0\xc2\xb6\xc2\xa08;\xc2\xa0XXXXXX\xc2\xa0Aff.\xc2\xa0\xc2\xb6\xc2\xa05.\n\xc2\xa0\n\n\n11-4-0013 17\n\x0c OIG RESPONSE 6 We accept the grantees explanation for the presence of\n Resodyn's president and employees at Board of Directors meetings where project\n updates and progress reports were presented and revised the report as appropriate.\n However, our review of the Board meeting minutes disclosed that the president of\n Resodyn attended Board meetings when Resodyn was not providing project\n updates and progress reports. According to the minutes, the president of Resodyn\n attended Board meetings where Resodyn did not present their work and major\n decisions were made about the operation and management of the nonprofit. For\n example, the meeting minutes for the November 3, 2005 meeting disclosed that the\n President of Resodyn was present at the meeting when the Board discussed\n revising the non-profit organization's by-laws, roles and responsibilities of the\n executive director, and the request for proposal process for the sole source\n contract. The presence of the president of Resodyn at this and the other Board\n meetings where the contractor did not present work results and major decisions\n were made about the operation and management of the nonprofit suggests an\n apparent, if not actual, conflict of interest under Title 40 CFR Part 30.42 as\n discussed in the attestation report.\n\n\n\nSubcontract\xc2\xa0Not\xc2\xa0Supported\xc2\xa0by\xc2\xa0Justification\xc2\xa0and\xc2\xa0Analysis\xc2\xa0\n\xc2\xa0\nAs\xc2\xa0discussed\xc2\xa0above,\xc2\xa0the\xc2\xa0Project\xc2\xa0was\xc2\xa0originally\xc2\xa0conceived\xc2\xa0as\xc2\xa0a\xc2\xa0Congressional\xc2\xa0appropriation\xc2\xa0to\xc2\xa0\nMontec/Resodyn,\xc2\xa0and\xc2\xa0was\xc2\xa0follow\xe2\x80\x90on\xc2\xa0work\xc2\xa0to\xc2\xa0a\xc2\xa0prior\xc2\xa0SBIR\xc2\xa0Solicitation.\xc2\xa0\xc2\xa0These\xc2\xa0facts\xc2\xa0alone\xc2\xa0warranted\xc2\xa0the\xc2\xa0\nsole\xc2\xa0sourcing\xc2\xa0of\xc2\xa0the\xc2\xa0subcontract\xc2\xa0to\xc2\xa0Resodyn.\xc2\xa0\xc2\xa0Moreover,\xc2\xa0appropriate\xc2\xa0cost\xc2\xa0justification\xc2\xa0and\xc2\xa0analysis\xc2\xa0was\xc2\xa0\ncompleted\xc2\xa0for\xc2\xa0this\xc2\xa0project.\xc2\xa0\xc2\xa0The\xc2\xa0rates\xc2\xa0that\xc2\xa0Resodyn\xc2\xa0charged\xc2\xa0the\xc2\xa0Foundation\xc2\xa0for\xc2\xa0the\xc2\xa0project\xc2\xa0were\xc2\xa0audited\xc2\xa0\nby\xc2\xa0the\xc2\xa0Defense\xc2\xa0Contract\xc2\xa0Audit\xc2\xa0Agency\xc2\xa0(DCAA)\xc2\xa0which\xc2\xa0established\xc2\xa0Resodyn's\xc2\xa0rates\xc2\xa0for\xc2\xa0all\xc2\xa0government\xc2\xa0\nprojects.\xc2\xa0\xc2\xa0The\xc2\xa0Board\xc2\xa0reviewed\xc2\xa0Resodyn's\xc2\xa0Proposal15\xc2\xa0for\xc2\xa0the\xc2\xa0work\xc2\xa0and\xc2\xa0found\xc2\xa0it\xc2\xa0acceptable.\xc2\xa0The\xc2\xa0Board\xc2\xa0\nfound\xc2\xa0that\xc2\xa0Resodyn\xc2\xa0was\xc2\xa0uniquely\xc2\xa0qualified\xc2\xa0to\xc2\xa0carry\xc2\xa0out\xc2\xa0the\xc2\xa0work\xc2\xa0proposed\xc2\xa0and\xc2\xa0determined\xc2\xa0that\xc2\xa0the\xc2\xa0\nscope\xc2\xa0of\xc2\xa0work\xc2\xa0and\xc2\xa0schedule\xc2\xa0were\xc2\xa0consistent\xc2\xa0with\xc2\xa0the\xc2\xa0level\xc2\xa0of\xc2\xa0effort\xc2\xa0(budget)\xc2\xa0proposed\xc2\xa0by\xc2\xa0Resodyn.\xc2\xa0This\xc2\xa0\ninformation\xc2\xa0was\xc2\xa0provided\xc2\xa0to\xc2\xa0the\xc2\xa0EPA\xc2\xa0and\xc2\xa0no\xc2\xa0further\xc2\xa0analysis\xc2\xa0or\xc2\xa0justification\xc2\xa0was\xc2\xa0requested\xc2\xa0by\xc2\xa0the\xc2\xa0\nAgency.\xc2\xa0\xc2\xa0Further\xc2\xa0indication\xc2\xa0of\xc2\xa0the\xc2\xa0acceptability\xc2\xa0of\xc2\xa0the\xc2\xa0analysis\xc2\xa0to\xc2\xa0the\xc2\xa0EPA\xc2\xa0is\xc2\xa0evidenced\xc2\xa0by\xc2\xa0the\xc2\xa0Agency\xe2\x80\x99s\xc2\xa0\nissuance\xc2\xa0of\xc2\xa0the\xc2\xa0contract\xc2\xa0to\xc2\xa0the\xc2\xa0Foundation\xc2\xa0for\xc2\xa0the\xc2\xa0work.16\xc2\xa0\xc2\xa0At\xc2\xa0all\xc2\xa0times,\xc2\xa0the\xc2\xa0Foundation\xc2\xa0acted\xc2\xa0in\xc2\xa0good\xc2\xa0\nfaith\xc2\xa0and\xc2\xa0consistent\xc2\xa0with\xc2\xa0Congressional\xc2\xa0intent.\xc2\xa0\n\n\n\n\n15\n \xc2\xa0See\xc2\xa0Letter\xc2\xa0from\xc2\xa0XXXXX\xc2\xa0XXXXXXX\xc2\xa0to\xc2\xa0XXXXX\xc2\xa0XXXXXXX\xc2\xa0(Dec.\xc2\xa020,\xc2\xa02005)\xc2\xa0(attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0J).\xc2\xa0\n16\n \xc2\xa0See\xc2\xa0U.S.\xc2\xa0Environmental\xc2\xa0Protection\xc2\xa0Agency\xc2\xa0Cooperative\xc2\xa0Agreement\xc2\xa0(Sept.\xc2\xa025,\xc2\xa02005)\xc2\xa0(attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0K).\xc2\xa0\n\n\n11-4-0013 18\n\x0c OIG RESPONSE 7 As discussed in OIG RESPONSE 1, the conference report\n for the Fiscal Year 2005 Congressional appropriation, which designated the\n funding to the grantee, did not require an uncompetitive, sole source subcontract to\n Resodyn. As also discussed in OIG RESPONSE 1, the project funded under this\n cooperative agreement is not related to nor a continuation of work conducted\n under EPA SBIR Phase 1 solicitation #PR-NC-04-10308. Regardless of the grant's\n history, the grantee was required by Title 40 CFR Part 30.45, Part 30.46, and the\n grant award to complete a cost or price analysis and document a sole source\n justification. With regard to Resodyn's rates charged to the project, the grantee has\n not provided documentation showing the rates were audited by and established by\n DCAA. However, a review of Resodyn's rates by DCAA does not satisfactorily\n meet the analysis and justification requirements of Title 40 CFR Part 30. Title 40\n CFR Part 30 and the grant award required that the grantee conduct a cost or price\n analysis and justification to determine and support cost reasonableness,\n allocability, and allowability before awarding the sole source subcontract.\n\n\n\nSubcontract\xc2\xa0Not\xc2\xa0Amended\xc2\xa0to\xc2\xa0Reflect\xc2\xa0Revised\xc2\xa0Project\xc2\xa0Scope\xc2\xa0\n\xc2\xa0\nAs\xc2\xa0the\xc2\xa0Report\xc2\xa0acknowledges,\xc2\xa0the\xc2\xa0Foundation\xc2\xa0sought\xc2\xa0and\xc2\xa0received\xc2\xa0EPA\xc2\xa0approval\xc2\xa0for\xc2\xa0the\xc2\xa0change\xc2\xa0in\xc2\xa0scope\xc2\xa0\nand\xc2\xa0extension\xc2\xa0of\xc2\xa0time\xc2\xa0to\xc2\xa0complete\xc2\xa0the\xc2\xa0Project\xc2\xa0work.\xc2\xa0\xc2\xa0The\xc2\xa0Foundation\xc2\xa0discussed\xc2\xa0this\xc2\xa0change\xc2\xa0in\xc2\xa0scope\xc2\xa0\nwith\xc2\xa0Resodyn\xc2\xa0and\xc2\xa0obtained\xc2\xa0their\xc2\xa0verbal\xc2\xa0acceptance.\xc2\xa0\xc2\xa0But\xc2\xa0the\xc2\xa0Foundation\xc2\xa0acknowledges\xc2\xa0that\xc2\xa0it\xc2\xa0did\xc2\xa0not\xc2\xa0\nformally\xc2\xa0amend\xc2\xa0the\xc2\xa0subcontract\xc2\xa0with\xc2\xa0Resodyn.\xc2\xa0\xc2\xa0The\xc2\xa0Foundation,\xc2\xa0as\xc2\xa0indicated\xc2\xa0by\xc2\xa0Board\xc2\xa0minutes,\xc2\xa0project\xc2\xa0\nreviews,\xc2\xa0and\xc2\xa0ultimately\xc2\xa0final\xc2\xa0acceptance\xc2\xa0by\xc2\xa0the\xc2\xa0EPA\xc2\xa0of\xc2\xa0the\xc2\xa0work,\xc2\xa0still\xc2\xa0administered\xc2\xa0the\xc2\xa0contract\xc2\xa0with\xc2\xa0\nResodyn\xc2\xa0in\xc2\xa0accordance\xc2\xa0with\xc2\xa0the\xc2\xa0approved\xc2\xa0project\xc2\xa0scope\xc2\xa0change.17\xc2\xa0\xc2\xa0Under\xc2\xa0these\xc2\xa0circumstances,\xc2\xa0the\xc2\xa0\nfailure\xc2\xa0to\xc2\xa0amend\xc2\xa0the\xc2\xa0subcontract\xc2\xa0should\xc2\xa0be\xc2\xa0considered\xc2\xa0a\xc2\xa0minor\xc2\xa0failure.\xc2\xa0\n\n\n\n OIG RESPONSE 8 Our position remains unchanged. Title 40 CFR Part 30.48\n requires that recipients of federal awards include provisions that define a sound\n and complete contract. Title 40 CFR Part 30.48 also specifies that contracts\n exceeding the $100,000 small purchase threshold include provisions or conditions\n that allow and provide for administrative, contractual, or legal remedies in\n instances where a contractor violates or breaches the contract terms. Because the\n subcontract was not amended, the grantee was not in compliance with these\n federal contract requirements.\n\n\n\n\n17\n \xc2\xa0See\xc2\xa0Email\xc2\xa0from\xc2\xa0XXXX\xc2\xa0XXXXXXX\xc2\xa0to\xc2\xa0XXXXX\xc2\xa0XXXXXXX\xc2\xa0(EPA)\xc2\xa0(May\xc2\xa028,\xc2\xa02007)\xc2\xa0(attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0L);\xc2\xa0Email\xc2\xa0from\xc2\xa0XXXXX\xc2\xa0\nXXXXXXX\xc2\xa0(EPA)\xc2\xa0to\xc2\xa0XXXXX\xc2\xa0XXXXXXX\xc2\xa0(July\xc2\xa020,\xc2\xa02007)\xc2\xa0(attached\xc2\xa0as\xc2\xa0Ex.\xc2\xa0M).\xc2\xa0\n\n\n11-4-0013 19\n\x0cSubcontract\xc2\xa0Terms\xc2\xa0Do\xc2\xa0Not\xc2\xa0Include\xc2\xa0EPA's\xc2\xa0Rights\xc2\xa0to\xc2\xa0Use\xc2\xa0Work\xc2\xa0\n\xc2\xa0\nIt\xc2\xa0was\xc2\xa0the\xc2\xa0Foundation's\xc2\xa0belief\xc2\xa0that\xc2\xa0the\xc2\xa0work\xc2\xa0conducted\xc2\xa0under\xc2\xa0this\xc2\xa0agreement\xc2\xa0was\xc2\xa0follow\xe2\x80\x90on\xc2\xa0Phase\xc2\xa0II\xc2\xa0or\xc2\xa0\nPhase\xc2\xa0III\xc2\xa0work\xc2\xa0originating\xc2\xa0from\xc2\xa0the\xc2\xa0EPA\xc2\xa0Phase\xc2\xa01\xc2\xa0SBIR\xc2\xa0Solicitations\xc2\xa0No.\xc2\xa0PR\xe2\x80\x90NC\xe2\x80\x9004\xe2\x80\x9010308.18\xc2\xa0\xc2\xa0Under\xc2\xa0the\xc2\xa0\nBayh\xe2\x80\x90Dole\xc2\xa0Act,\xc2\xa0intellectual\xc2\xa0property\xc2\xa0(IP)\xc2\xa0created\xc2\xa0through\xc2\xa0this\xc2\xa0process\xc2\xa0belongs\xc2\xa0to\xc2\xa0the\xc2\xa0contractor\xc2\xa0not\xc2\xa0the\xc2\xa0\nEPA.\xc2\xa0Thus\xc2\xa0the\xc2\xa0contract\xc2\xa0was\xc2\xa0written\xc2\xa0with\xc2\xa0the\xc2\xa0IP\xc2\xa0belonging\xc2\xa0to\xc2\xa0the\xc2\xa0contractor.\xc2\xa0That\xc2\xa0being\xc2\xa0said,\xc2\xa0the\xc2\xa0\nFoundation\xc2\xa0also\xc2\xa0recognizes\xc2\xa0that,\xc2\xa0outside\xc2\xa0of\xc2\xa0the\xc2\xa0SBIR\xc2\xa0process,\xc2\xa0IP\xc2\xa0generally\xc2\xa0belongs\xc2\xa0to\xc2\xa0the\xc2\xa0EPA,\xc2\xa0but\xc2\xa0as\xc2\xa0per\xc2\xa0\nthe\xc2\xa0provisions\xc2\xa0of\xc2\xa0the\xc2\xa0Bayh\xc2\xa0Dole\xc2\xa0act,\xc2\xa0subcontractors\xc2\xa0to\xc2\xa0the\xc2\xa0government\xc2\xa0can\xc2\xa0elect\xc2\xa0title\xc2\xa0to\xc2\xa0their\xc2\xa0inventions.\xc2\xa0\nThe\xc2\xa0Foundation\xc2\xa0is\xc2\xa0willing\xc2\xa0to\xc2\xa0negotiate\xc2\xa0with\xc2\xa0Resodyn\xc2\xa0to\xc2\xa0make\xc2\xa0this\xc2\xa0change\xc2\xa0if\xc2\xa0it\xc2\xa0is\xc2\xa0determined\xc2\xa0that\xc2\xa0the\xc2\xa0IP\xc2\xa0\nhas\xc2\xa0been\xc2\xa0generated\xc2\xa0under\xc2\xa0this\xc2\xa0contract.\xc2\xa0\xc2\xa0Practically\xc2\xa0speaking,\xc2\xa0there\xc2\xa0was\xc2\xa0no\xc2\xa0IP\xc2\xa0of\xc2\xa0value\xc2\xa0created\xc2\xa0under\xc2\xa0\nthis\xc2\xa0project.\xc2\xa0\n\n\n OIG RESPONSE 9 As discussed in OIG RESPONSE 1, the project funded under\n this cooperative agreement is not related to nor is a continuation of work\n conducted under EPA SBIR Phase 1 solicitation #PR-NC-04-10308. However, we\n acknowledge that the grantee is also subject to Title 37 CFR Part 401, which\n implements the Bayh-Dole Act. Title 37 CFR Part 401.14, as well as Title 40 CFR\n Part 30.36, specify that the Federal government reserves a royalty-free,\n nonexclusive and irrevocable right to use for federal purposes work that was\n developed under an award. Therefore, the grantee is obligated under both Title 40\n CFR Part 30 and Title 37 CFR Part 401 to provide EPA with the right to use the\n research work funded by the cooperative agreement through an appropriate\n contract revision or other corrective action.\n\n\n\n\nConclusion\xc2\xa0\n\xc2\xa0\nA\xc2\xa0full\xc2\xa0understanding\xc2\xa0of\xc2\xa0the\xc2\xa0facts\xc2\xa0demonstrates\xc2\xa0that\xc2\xa0there\xc2\xa0was\xc2\xa0no\xc2\xa0actual\xc2\xa0or\xc2\xa0apparent\xc2\xa0conflict\xc2\xa0of\xc2\xa0interest\xc2\xa0\nbetween\xc2\xa0the\xc2\xa0Foundation\xc2\xa0and\xc2\xa0Resodyn.\xc2\xa0\xc2\xa0Accordingly,\xc2\xa0any\xc2\xa0effort\xc2\xa0to\xc2\xa0recover\xc2\xa0the\xc2\xa0$707,320\xc2\xa0paid\xc2\xa0to\xc2\xa0Resodyn\xc2\xa0\nfor\xc2\xa0work\xc2\xa0it\xc2\xa0successfully\xc2\xa0completed\xc2\xa0is\xc2\xa0inappropriate.\xc2\xa0\xc2\xa0\xc2\xa0\n\xc2\xa0\nThe\xc2\xa0sole\xc2\xa0sourcing\xc2\xa0of\xc2\xa0the\xc2\xa0contract\xc2\xa0to\xc2\xa0Resodyn\xc2\xa0was\xc2\xa0consistent\xc2\xa0with\xc2\xa0Congressional\xc2\xa0intent\xc2\xa0and\xc2\xa0the\xc2\xa0prior\xc2\xa0SBIR\xc2\xa0\nprocesses.\xc2\xa0\xc2\xa0The\xc2\xa0Foundation\xc2\xa0also\xc2\xa0performed\xc2\xa0thorough\xc2\xa0and\xc2\xa0unchallenged\xc2\xa0cost\xc2\xa0justification\xc2\xa0for\xc2\xa0the\xc2\xa0Project.\xc2\xa0\n\xc2\xa0\nThe\xc2\xa0other\xc2\xa0issues\xc2\xa0raised\xc2\xa0in\xc2\xa0the\xc2\xa0Report\xc2\xa0are\xc2\xa0either\xc2\xa0minor\xc2\xa0issues,\xc2\xa0such\xc2\xa0as\xc2\xa0the\xc2\xa0failure\xc2\xa0to\xc2\xa0formally\xc2\xa0amend\xc2\xa0the\xc2\xa0\nsubcontract,\xc2\xa0or\xc2\xa0can\xc2\xa0be\xc2\xa0resolved\xc2\xa0through\xc2\xa0negotiation,\xc2\xa0such\xc2\xa0as\xc2\xa0the\xc2\xa0ownership\xc2\xa0of\xc2\xa0any\xc2\xa0IP\xc2\xa0created\xc2\xa0during\xc2\xa0the\xc2\xa0\nProject.\xc2\xa0\n\xc2\xa0\nThe\xc2\xa0Foundation\xc2\xa0is\xc2\xa0pleased\xc2\xa0to\xc2\xa0answer\xc2\xa0any\xc2\xa0questions\xc2\xa0that\xc2\xa0OIG\xc2\xa0has\xc2\xa0about\xc2\xa0this\xc2\xa0response,\xc2\xa0and\xc2\xa0looks\xc2\xa0forward\xc2\xa0\nto\xc2\xa0the\xc2\xa0opportunity\xc2\xa0to\xc2\xa0discuss\xc2\xa0these\xc2\xa0matters\xc2\xa0in\xc2\xa0more\xc2\xa0detail\xc2\xa0as\xc2\xa0appropriate.\xc2\xa0\n\n\n\n18\n \xc2\xa0Ex.\xc2\xa0A\xc2\xa0at\xc2\xa05.\xc2\xa0\n\n\n11-4-0013 20\n\x0c OIG RESPONSE 10 The grantee's comments have not resolved the procurement\n issues; including the apparent, if not real, conflict of interest with its subcontractor.\n Therefore, our position on the findings and recommendations in the attestation\n report remains generally unchanged. However, we have accepted the grantee's\n explanation about the letterhead templates and quality assurance plan and revised\n the report as appropriate.\n\n\n\n\n11-4-0013 21\n\x0c Appendix C\n\n Distribution\n\nAssistant Administrator for Administration and Resources Management\nAssistant Administrator for Research and Development\nDirector, Office of Grants and Debarment, Office of Administration and Resources Management\nDirector, Grants and Interagency Agreements Management Division, Office of Administration\n and Resources Management\nAgency Followup Official (the CFO)\nAgency Followup Coordinator\nAudit Followup Coordinator, Office of Administration and Resources Management\nAudit Followup Coordinator, Office of Research and Development\nAssociate Administrator for Congressional and Intergovernmental Relations\nAssociate Administrator for External Affairs and Environmental Education\nInspector General\nChairman of the Board of Directors, The Montana Physical Sciences Foundation\n\n\n\n\n11-4-0013 22\n\x0c"


type: wikipedia

text:
Hviezdoslavova ulica je ulica:
 v Bánovciach nad Bebravou, pozri Hviezdoslavova ulica (Bánovce nad Bebravou)
 v Banskej Bystrici, pozri Hviezdoslavova ulica (Banská Bystrica)
 v Bardejove, pozri Hviezdoslavova ulica (Bardejov)
 v Bratislave, pozri Hviezdoslavova ulica (Bratislava)
 v Brezne, pozri Hviezdoslavova ulica (Brezno)
 v Bytči, pozri Hviezdoslavova ulica (Bytča)
 v Čadci, pozri Hviezdoslavova ulica (Čadca)
 v Detve, pozri Hviezdoslavova ulica (Detva)
 v Dolnom Kubíne, pozri Hviezdoslavova ulica (Dolný Kubín)
 v Dubnici nad Váhom, pozri Hviezdoslavova ulica (Dubnica nad Váhom)
 v Dunajskej Strede, pozri Hviezdoslavova ulica (Dunajská Streda)
 vo Fiľakove, pozri Hviezdoslavova ulica (Fiľakovo)
 v Galante, pozri Hviezdoslavova ulica (Galanta)
 v Gbeloch, pozri Hviezdoslavova ulica (Gbely)
 v Gelnici, pozri Hviezdoslavova ulica (Gelnica)
 v Handlovej, pozri Hviezdoslavova ulica (Handlová)
 v Hlohovci, pozri Hviezdoslavova ulica (Hlohovec)
 v Holíči, pozri Hviezdoslavova ulica (Holíč)
 v Humennom, pozri Hviezdoslavova ulica (Humenné)
 v Hurbanove, pozri Hviezdoslavova ulica (Hurbanovo)
 v Ilave, pozri Hviezdoslavova ulica (Ilava)
 v Kežmarku, pozri Hviezdoslavova ulica (Kežmarok)
 v Kolárove, pozri Hviezdoslavova ulica (Kolárovo)
 v Komárne, pozri Hviezdoslavova ulica (Komárno)
 v Košiciach, pozri Hviezdoslavova ulica (Košice)
 v Krupine, pozri Hviezdoslavova ulica (Krupina)
 v Kysuckom Novom Meste, pozri Hviezdoslavova ulica (Kysucké Nové Mesto)
 v Leopoldove, pozri Hviezdoslavova ulica (Leopoldov)
 v Liptovskom Hrádku, pozri Hviezdoslavova ulica (Liptovský Hrádok)
 v Liptovskom Mikuláši, pozri Hviezdoslavova ulica (Liptovský Mikuláš)
 v Lučenci, pozri Hviezdoslavova ulica (Lučenec)
 v Malackách, pozri Hviezdoslavova ulica (Malacky)
 v Modre, pozri Hviezdoslavova ulica (Modra)
 v Moldave nad Bodvou, pozri Hviezdoslavova ulica (Moldava nad Bodvou)
 v Myjave, pozri Hviezdoslavova ulica (Myjava)
 v Námestove, pozri Hviezdoslavova ulica (Námestovo)
 v Nitre, pozri Hviezdoslavova ulica (Nitra)
 v Novej Bani, pozri Hviezdoslavova ulica (Nová Baňa)
 v Novákoch, pozri Hviezdoslavova ulica (Nováky)
 v Novom Meste nad Váhom, pozri Hviezdoslavova ulica (Nové Mesto nad Váhom)
 v Nových Zámkoch, pozri Hviezdoslavova ulica (Nové Zámky)
 v Partizánskom, pozri Hviezdoslavova ulica (Partizánske)
 v Pezinku, pozri Hviezdoslavova ulica (Pezinok)
 v Piešťanoch, pozri Hviezdoslavova ulica (Piešťany)
 v Poprade, pozri Hviezdoslavova ulica (Poprad)
 v Považskej Bystrici, pozri Hviezdoslavova ulica (Považská Bystrica)
 v Prešove, pozri Hviezdoslavova ulica (Prešov)
 v Prievidzi, pozri Hviezdoslavova ulica (Prievidza)
 v Rajci, pozri Hviezdoslavova ulica (Rajec)
 v Revúcej, pozri Hviezdoslavova ulica (Revúca)
 v Rimavskej Sobote, pozri Hviezdoslavova ulica (Rimavská Sobota)
 v Rožňave, pozri Hviezdoslavova ulica (Rožňava)
 v Ružomberku, pozri Hviezdoslavova ulica (Ružomberok)
 v Sabinove, pozri Hviezdoslavova ulica (Sabinov)
 v Sečovciach, pozri Hviezdoslavova ulica (Sečovce)
 v Senci, pozri Hviezdoslavova ulica (Senec)
 v Senici, pozri Hviezdoslavova ulica (Senica)
 v Seredi, pozri Hviezdoslavova ulica (Sereď)
 v Skalici, pozri Hviezdoslavova ulica (Skalica)
 v Sládkovičove, pozri Hviezdoslavova ulica (Sládkovičovo)
 v Snine, pozri Hviezdoslavova ulica (Snina)
 v Sobranciach, pozri Hviezdoslavova ulica (Sobrance)
 v Spišskej Novej Vsi, pozri Hviezdoslavova ulica (Spišská Nová Ves)
 v Starej Ľubovni, pozri Hviezdoslavova ulica (Stará Ľubovňa)
 v Starej Turej, pozri Hviezdoslavova ulica (Stará Turá)
 v Stropkove, pozri Hviezdoslavova ulica (Stropkov)
 v Stupave, pozri Hviezdoslavova ulica (Stupava)
 vo Svite, pozri Hviezdoslavova ulica (Svit)
 v Šahách, pozri Hviezdoslavova ulica (Šahy)
 v Šali, pozri Hviezdoslavova ulica (Šaľa)
 v Šaštíne-Strážoch, pozri Hviezdoslavova ulica (Šaštín-Stráže)
 v Šuranoch, pozri Hviezdoslavova ulica (Šurany)
 v Tisovci, pozri Hviezdoslavova ulica (Tisovec)
 v Tornali, pozri Hviezdoslavova ulica (Tornaľa)
 v Trenčianskych Tepliciach, pozri Hviezdoslavova ulica (Trenčianske Teplice)
 v Trenčíne, pozri Hviezdoslavova ulica (Trenčín)
 v Trnave, pozri Hviezdoslavova ulica (Trnava)
 v Trstenej, pozri Hviezdoslavova ulica (Trstená)
 v Tvrdošíne, pozri Hviezdoslavova ulica (Tvrdošín)
 vo Vrábľoch, pozri Hviezdoslavova ulica (Vráble)
 vo Veľkom Krtíši, pozri Hviezdoslavova ulica (Veľký Krtíš)
 vo Vranove nad Topľou, pozri Hviezdoslavova ulica (Vranov Nad Topľou)
 vo Vrbovom, pozri Hviezdoslavova ulica (Vrbové)
 v Zlatých Moravciach, pozri Hviezdoslavova ulica (Zlaté Moravce)
 v Žarnovici, pozri Hviezdoslavova ulica (Žarnovica)
 v Želiezovciach, pozri Hviezdoslavova ulica (Želiezovce)
 v Žiari nad Hronom, pozri Hviezdoslavova ulica (Žiar nad Hronom)
 Pozri aj
 Hviezdoslavovo námestie
 Námestie P. O. Hviezdoslava
 Ulica P. O. Hviezdoslava
 Rozlišovacie stránky – Ulice


type: caselaw

jurisdiction: EU

text:
27.3.2010
 DA
 Den Europæiske Unions Tidende
 C 80/35
 Sag anlagt den 18. januar 2010 — CheckMobile mod KHIM (carcheck)
 (Sag T-14/10)
 2010/C 80/59
 Processprog: tysk
 Parter
 Sagsøger: CheckMobile GmbH — The Process Solution Company (Hamburg, Tyskland) (ved Rechtsanwalt K. Lodigkeit)
 Sagsøgt: Kontoret for Harmonisering i det Indre Marked (Varemærker og Design)
 Sagsøgerens påstande
 —
 Afgørelse truffet den 18. november 2009 af Fjerde Appelkammer ved Kontoret for Harmonisering i det Indre Marked (Varemærker og Design) (sag R 595/2009-4) annulleres, i det omfang ansøgningen om varemærket »carcheck« derved blev afslået i henhold til artikel 7, stk. 1, litra c), i forordning nr. 40/94.
 —
 Harmoniseringskontoret tilpligtes at betale sagens omkostninger.
 Søgsmålsgrunde og væsentligste argumenter
 Det omhandlede EF-varemærke: Ordmærket »carcheck« for varer og tjenesteydelser i klasse 9, 16, 35, 36, 38, 41, 42 og 45 (ansøgning nr. 7 368 681)
 Undersøgerens afgørelse: Delvis afslag på ansøgningen
 Appelkammerets afgørelse: Delvis annullation af undersøgerens afgørelse
 Søgsmålsgrunde: Tilsidesættelse af artikel 7, stk. 1, litra c), i forordning nr. 40/94 (1), idet appelkammeret anlagde en for vidtgående fortolkning af den absolutte registreringshindring i forhold til et varemærke, der udelukkende består af tegn af beskrivende karakter.
 (1) Rådets forordning (EF) nr. 40/94 af 20.12.1993 om EF-varemærker (EFT 1994 L 11, s. 1).


type: other

text:
Blog Ústavu práva a technologií Právnické fakulty MU: ledna 2015
 COFOLA a výzkumná data
 Bylo otevřeno přihlašování na konferenci COFOLA, která se letos poprvé uskuteční na zámku v Lednici. V oboru práva a technologií resp. práva duševního vlastnictví je letos vypsáno téma týkající se ochrany dat ve vědě a výzkumu. Konference má otevřenou možnost aktivní účasti a všechny příspěvky jsou recenzovány.
 Přehled odborných sekcí a další informace viz zde.
 Ústavní soud k povinnosti platit odměny kolektivnímu správci autorských práv
 Ústavní soud se vyjádřil k povinnosti platit odměny kolektivnímu správci autorských práv INTERGRAM za zpřístupňování záznamů a na nich zaznamenaných uměleckých výkonů výkonných umělců veřejnosti prostřednictvím televizoru.
 ÚS se v nálezu věnuje zejména presumpci užívání autorských děl a tedy doktríně "potenciální recepce" a kritickému § 18 odst. 3 AutZ.
 Z nálezu pak vybíráme:
 "29. Zároveň je však třeba zdůraznit (i s ohledem na výše vyřčené), že musí být prokázáno, že toto zařízení umožňující televizní přenos je provozuschopné, respektive že skutečně jeho prostřednictvím vůbec může docházet k zásahům do autorských práv (viz též důraz na ‚poskytování signálu‘ ve výše citovaném rozsudku Soudního dvora č. C-306/05). Tak tomu zajisté bude, pokud kolektivní správce při prováděné kontrole zjistí, že televizor je zapnutý, obzvláště pokud zároveň zprostředkovává konečnému uživateli díla chráněná autorským zákonem, která jsou kolektivním správcem spravována. Opačná situace však nastane, pokud kolektivní správce najisto tuto skutečnost nepostaví. Za tohoto stavu totiž nemůže ze samotné faktické existence a pouhého umístění televizoru v restauračním zařízení dovozovat, že skutečně slouží k výše uvedenému účelu, poněvadž přesvědčivě nezjistí, zda je provozuschopný, zda umožňuje zachycení vysílacího signálu apod. Pokud totiž dotčený televizor fakticky k veřejnému přenosu děl ani nemůže sloužit, nemůže být jeho prostřednictvím ani zasaženo do chráněných autorských práv, a nebylo by tak důvodné požadovat po provozovateli, v jehož restauračním zařízení je umístěn, uzavření licenční smlouvy na užití autorských předmětů ochrany. Jak totiž přímo plyne z ustanovení § 18 odst.3 autorského zákona, „[s]dělováním díla veřejnosti není pouhé provozování zařízení umožňujícího nebo zajišťujícího takové sdělování.“
 30. Takto je tedy nezbytné, aby kolektivní správce, respektive jím pověřená osoba, v průběhu prováděné kontroly bez důvodných pochybností nejprve zjistil, zda prostřednictvím inkriminovaného zařízení (televizoru, rozhlasu apod.) vůbec může docházet k přenosu chráněných děl ke konečnému uživateli jakožto veřejnosti, jíž jsou předměty ochrany ‚sdělovány‘. Postačí přitom, pokud k tomuto přenosu může docházet, neboť takto již v případě restauračních zařízení vyvstává vysoká pravděpodobnost, že v určitých chvílích k přenosu skutečně dochází (podobně jako např. ve dříve zmiňovaných hotelových pokojích, kde v zásadě nelze ověřit, zda-li si hoteloví hosté skutečně televizor umístěný v pokoji zapnou – resp. ověřit lze, nicméně za cenu nežádoucího zásahu do práva na soukromí těchto hostů). Zde totiž míra pravděpodobnosti zásahu do autorských práv dosahuje natolik vysoké úrovně, že ji je možno v zásadě presumovat. Výjimkou by byla situace (která však v projednávaném případě nenastala), kdy by zmíněné „sdělování“ bylo bez dalšího dovozováno z pouhého umístění televizního přístroje v restauraci bez prokázání toho, zda tento přístroj vůbec je schopen efektivního přenosu (ad absurdum by například bylo nemyslitelné, aby podléhaly licenční smlouvě nefunkční televizory plnící pouze dekorativní funkci). Podobně dochází také k presumpci skutečnosti, že ke sdělování chráněných děl veřejnosti dochází po celou dobu, kdy mohlo být dotčené zařízení v provozu, neboť by bylo neakceptovatelným požadavkem na kolektivní správce, aby prokazatelně doložili, že skutečně docházelo k produkci chráněných děl po celou dobu, po kterou vymáhají dlužné licenční poplatky. Zde totiž vyvstává zřetelný veřejný zájem na ochraně autorských předmětů ochrany, v rámci něhož lze akceptovat určitou míru presumpce spočívající ve faktu, že funkční a provozuschopné zařízení je schopné zpřístupnit užití chráněných děl, a proto jeho provozovatel musí mít (za splněných dalších podmínek) uzavřenou platnou licenční smlouvu pro veřejnou produkci těchto předmětů ochrany, ve smyslu jejich „sdělování veřejnosti“."
 Plně znění nálezu.
 Děkujeme alumni ÚPT Filipu Horákovi za upozornění.
 Vystavil Matěj Myška v 5:24 odp. Žádné komentáře:
 SDEU k vyčerpání práv při změně média
 SDEU vydal dnes rozhodnutí ve věci Allposters, které se týká vyčerpání práv u obrazových autorských děl. Soud konstatoval, že se vyčerpání práv vztahuje pouze na původní hmotný nosič (nikoli na případ, kdy je obraz přenesen na jiný nosič - v tomto případě šlo o převod z papíru na plátno). V reakci na toto rozhodnutí očekáváme vzrušenou diskusi ohledně vztahu k rozhodnutí ve věci UsedSoft - odkazy budeme průběžně doplňovat níže.
 Vystavil Radim Polčák v 11:12 dop. Žádné komentáře:
 Americké autorské právo - smysl a účel
 V zajímavém rozhodnutí týkajícím se zneužití autorského práva proti pravidlům hospodářské soutěže a veřejnému zájmu se Court of Appeals for the Ninth Circuit vyslovil k otázce smyslu a účelu autorskoprávní ochrany jako prostředku obrany před šedým dovozem luxusních hodinek. Soud zde citoval dřívější rozhodnutí ve věci Twentieth Century Music Corp v. Aiken, 422 U.S. 151 (1975), v němž je smysl autorského práva shrnut následovně: "Kreativní práce má být podporována a odměňována, ale soukromá motivace musí v konečném důsledku sloužit široké veřejné dostupnosti literatury, hudby a ostatních forem umění."
 Zbývá doplnit, že pokud by naše soudy takto jednoznačně formulovaly své názory na podstatu autorského práva, mohla by Česká republika konečně přestat být jedním z posledních civilizovaných států, kde se lze setkat s vlastnickým chápáním kreativní produkce v duchu feudalistické ideologie z osmdesátých let minulého století.
 The Copyright Manifesto: Four Pillars to Modernize Copyright in the EU
 Iniciativa Copyright for Creativity představila dokument The Copyright Manifesto: Four Pillars to Modernize Copyright in the EU v němž načrtává možné směřování, kterým by se měla ubírat reforma autorského práva v EU. Vychází též z návrhu zprávy k InfoSoc směrnici poslankyně EP Julie Redové.
 Samotný manifest pak poměrně obecně identifikuje čtyři základní problematické oblasti (celková zastaralost právního rámce, absence harmonizace v oblasti výjimek a omezení autorského práva, příliš dlouhá doba ochrany a nefunkční implementace) a nabízí adekvátní ideová řešení.
 Aktuální příkladem, který ilustruje trefnost těchto připomínek ke stavu autorského práva, je aktuální návrh slovenského autorského zákona, jehož kritickou analýzu provedla nedávno organizace EISi.
 Plný text dokumentu je pak dostupný na stránkách iniciativy.
 Vystavil Matěj Myška v 4:20 dop. Žádné komentáře:
 Podpůrné dokumenty k ZoKB
 V souvislosti s počátkem účinnosti zákona č. 181/2014 Sb., o kybernetické bezpečnosti, připravilo NBÚ několik podpůrných dokumentů, které mají pomoci při identifikování povinných subjektů.
 K dispozici je blokové schéma k ZoKB, dále pomůcka k určování kritické infrastruktury, významných informačních systémů a výklad pojmu nepřiměřených nákladů. Všechny odkazy vedou na stránky NBÚ, rozcestník je k dispozici zde.
 Vystavil Jakub Harašta v 11:22 odp. Žádné komentáře:
 Právní ochrana databází a případ Ryanair
 SDEU rozhodl ostře sledovaný případ týkající se právní ochrany databází resp. otázky, zda se evropské databázové právo vztahuje i na případy databází nechráněných právem sui generis. Případ tzv. screen-scrapingu je důležitý především pro populární služby nabízející cenová srovnání a využívající bez licencí resp. v rozporu s adhézními podmínkami dat získaných z webových stránek podnikatelů.
 Soud však v tomto případě nevyřešil otázku samotných práv k užití dat, ale pouze obecně konstatoval, že právo běžného užití oprávněným uživatelem se nevztahuje na databáze nechráněné právy sui generis. Nabízí se tedy v tomto případě hned dvě krajní možnosti řešení, a to že pořizovatel databáze spadající mimo ochranu práv sui generis i autorského práva může libovolně omezovat uživatele prostřednictvím smluvních podmínek nebo že absence ochrany právy sui generis i autorským právem vylučuje při současné absenci jiných ochranných institutů (např. obchodního tajemství) možnost taková data chránit. Právní i ekonomické argumenty pro obě varianty jsou srovnatelně relevantní a bude záležet na jejich uplatnění v národních právních řádech.
 Revue pro právo a technologie 10/2014
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 Děkujeme všem čtenářům, autorům a spolupracovníkům za podporu a přejeme Vám příjemné zimní čtení!
 Vydání časopisu Revue pro právo a technologie bylo financováno z projektu „Právo a technologie II“, MUNI/A/0918/2013.
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text:
 12.10.2015
 FI
 Euroopan unionin virallinen lehti
 C 337/16
 Valitus, jonka Viara Todorova Androva on tehnyt 9.7.2015 virkamiestuomioistuimen asiassa F-78/12, Todorova Androva v. neuvosto, 29.4.2015 antamasta tuomiosta
 (Asia T-366/15 P)
 (2015/C 337/19)
 Oikeudenkäyntikieli: ranska
 Asianosaiset
 Valittaja: Viara Todorova Androva (Rhode-Saint-Genèse, Belgia) (edustaja: asianajaja M. Velardo)
 Muut osapuolet: Euroopan unionin neuvosto, Euroopan komissio ja Euroopan unionin tilintarkastustuomioistuin
 Vaatimukset
 Valittaja vaatii unionin yleistä tuomioistuinta
 —
 kumoamaan 29.4.2015 annetun tuomion F-78/12 ja ratkaisemaan itse asian
 —
 vaihtoehtoisesti palauttamaan asian virkamiestuomioistuimen ratkaistavaksi
 —
 velvoittamaan neuvoston korvaamaan oikeudenkäyntikulut.
 Oikeudelliset perusteet ja pääasialliset perustelut
 Valituksensa tueksi valittaja vetoaa neljään valitusperusteeseen.
 1)
 Ensimmäinen valitusperuste, joka perustuu oikeudelliseen virheeseen, koska virkamiestuomioistuin on katsonut, että Euroopan unionin henkilöstösääntöjen 45 artiklan perusteella ei ole mahdollista ottaa huomioon ylennyskelpoisten virkamiesten luetteloon kirjaamista varten väliaikaisena toimihenkilönä hankittua virkaikää.
 2)
 Toinen valitusperuste, joka perustuu virkamiestuomioistuimen tekemään oikeudelliseen virheeseen, koska se on katsonut, ettei nyt käsiteltävään asiaan sovelleta unionin tuomioistuimen oikeuskäytäntöä, sellaisena kuin se johtuu 8.9.2011 annetusta tuomiosta Rosado Santana (C-177/10, Kok., EU:C:2011:557), vaan oikeuskäytäntöä, joka johtuu 7.3.2013 annetusta määräyksestä Rivas Montes (C-178/12, EU:C:2013:150).
 3)
 Kolmas valitusperuste, joka perustuu oikeudelliseen virheeseen, koska virkamiestuomioistuin on katsonut, että yhdenvertaisen kohtelun periaatteen loukkaamista koskeva kanneperuste oli jätettävä tutkimatta, koska kantajan sijasta ylennettyjen henkilöiden täsmällisiä nimiä ei ollut mainittu.
 4)
 Neljäs valitusperuste, joka perustuu virkamiestuomioistuimen tekemään oikeudelliseen virheeseen, koska se on katsonut, että huolenpitovelvollisuuden laiminlyöntiä koskeva kanneperuste oli jätettävä tutkimatta, koska valitus ja kannekirjelmä eivät olleet keskenään yhtäpitäviä.


text:
30.1.2010
 IT
 Gazzetta ufficiale dell'Unione europea
 C 24/29
 Domanda di pronuncia pregiudiziale proposta dallo College van Beroep voor het Bedrijfsleven il 16 novembre 2009 — 1. IMC Securities BV, 2. Stichting Autoriteit Financiële Markten
 (Causa C-445/09)
 2010/C 24/53
 Lingua processuale: l’olandese
 Giudice del rinvio
 College van Beroep voor het bedrijfsleven
 Parti
 Ricorrenti
 :
 1)
 IMC Securities BV
 2)
 Stichting Autoriteit Financiële Markten
 Questione pregiudiziale
 Se l’art. 1, n. 2, lett. a), secondo trattino, della direttiva sugli abusi di mercato (1) debba essere interpretato nel senso che la determinazione di variazioni di prezzo in un periodo come quello qui considerato, mediante l’effettuazione di un insieme di atti con uno strumento finanziario, segnatamente operazioni e ordini di compravendita (...), vada considerata come il “mantenimento” di siffatto strumento ad un livello anormale o artificiale.
 (1) Direttiva 2003/6/CE del Parlamento europeo e del Consiglio, del 28 gennaio 2003, relativa all'abuso di informazioni privilegiate e alla manipolazione del mercato (abusi di mercato) (GU L 96, pag. 16).