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PSAD-80-11 1 (1979-11-16)

handle is hein.gao/gaobaazxv0001 and id is 1 raw text is: /Io7,-)q Z-,T, S? UNITED STAT ' GENERAL ACCOUNTING OFFICE WASHINGTON. D.C. Z0548 PROCUREM NT AND SYSTEMS ACOUISITION DIVISION B-166506 NOVEMBER 16, 1979 The Honorable Douglas M. Costle II III Administrator, Environmental Protection Agency 110874 P P 110874 Dear Mr. Costle: Subject: Leed for Mo e Effective Management of Warranties (PSAD-80-11) EPA is awarding billions of dollars in grants each year to municipalities and other public entities to help finance construction of wastewater treatment systems. In adminis- tering its construction grants program, EPA does not evaluate the adeauacy of the warranty provisions of contracts awarded by grantees for equipment and supplies used in constructing treatment facilities or how well grantees exercise their warranty rights. Grantees do not always realize the full benefits of their warranties. Therefore, EPA grant funds, which par- tially paid for these warranties, may not be fully achieving their intended purpose, and grantees may be unnecessarily bearing costs that should be borne by construction contrac- tors or equipment manufacturers under terms of the warranty. We performed our review at 13 grantee projects (see enc. I) and identified a number of issues for your atten- tion. For instance, grantees could benefit from better EPA guidance and more specific wording of contract warranty pro- visions. Grantees should also act to fully exercise warranty rights, seek reimbursement for warranty repair costs beinq absorbed by grantees, and explore methods to expedite con- tractor response in making repairs. WARRANTY PROCESS Contracts between the grantees and general contractors usually contain 1-year guarantees. In effect, the contrac- tors are responsible for correcting all defects in material and workmanship discovered during the 1-year oeriod after grantee acceptance. (951472)

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