GAO to report on GSA
November 4th, 2009 | Congress General Services Administration Procurement | Posted by Elise Castelli
The Government Accountability Office will report on the General Services Administration’s management of its supply schedules in the spring,said John Needham, a director of acquisition and sourcing management for the watchdog agency.
The report will look at whether GSA’s reorganization improved management of the Multiple Award Schedules program and the effectiveness of the management tools GSA has in place, he said. Mismanagement of the schedules program led to a series of contracting scandals five years ago. The scandals prompted GAO to add interagency contracts to its High Risk List.
In addition, the report will address concerns raised by the congressionally charted Acquisition Advisory Panel in a 2007 report, Needham said. The panel found that agencies weren’t competing orders placed through established interagency, multiple awards contracts. In addition, the panel raised concerns that there were too many interagency contracts competing with each other and hampering the government’s abilities to get a good price.
Needham spoke at the Coalition for Government Procurement’s fall conference today.
GAO: Agency use of cost contracts is down?
October 30th, 2009 | Procurement Uncategorized | Posted by Elise Castelli
Agency use of risky cost-based contracts has dropped over the last six-years, but the number of contracts coded as “combination contracts” is on the rise, the Government Accountability Office found in a report released today.
Between 2003 and 2008, the value of cost-reimbursement contracts, which pay vendors for their actual costs to perform the work, grew from $120 billion to $136 billion. But as a percentage of overall dollars spent through the procurement process, use declined. In 2003, the $120 billion represented 34 percent of the $298 billion spent. In 2008, the $136 billion was just 26 percent of the $528 billion spent, GAO found.
The report comes in the same week as the Office of Management and Budget told how agencies they should reduce the use of these contracts by another 10 percent by Oct. 1, 2010.
“However, this overall downward trend is misleading,” GAO said in the report. “A significant increase has been reported for obligations using the ‘combination’ contract type, a category that based on GAO’s analysis of 2008 data, includes many contracts with cost-reimbursement obligations that are not recorded as such.”
In fiscal 2004, agencies spent less than 1 percent — or $1.3 billion — of government obligations on “combination” contracts. In 2008, use swelled to 8 percent or $39 billion of total contract spending. Defense was the largest user of the contracts in 2008, spending $34 billion of the $39 billion in “combination” contracts, GAO found. In addition, billions in contracts had no contract type designated for fiscal 2008, the report said.
Regardless of how much agencies spent through cost-reimbursement methods, as opposed to less risky fixed-price contracts, agencies were not monitoring the contracts carefully, GAO said.
Of 92 cost-based contacts GAO reviewed for the report, only half of the contractors had accounting systems government auditors found were accurate in tracking costs, GAO found. Twenty had no evidence that systems were adequate and 20 more had outdated determinations of accuracy, GAO said. Outdated accuracy determinations and inadequate systems put government at risk for making improper payments, the report said.
Tags: cost-based contracts, GAO
More concerns about DCAA audit opinions
September 22nd, 2009 | Agency Management Congress Defense Procurement | Posted by Elise Castelli
Earlier today I previewed reports the Government Accountability Office and the Defense Department Inspector General will release tomorrow highlighting the depth of auditing problems at the Defense Contract Audit Agency.
But these watchdogs are not the only ones with concerns about DCAA’s audit management. The Wartime Contracting Commission — a bipartisan, congressionally chartered panel tasked with making recommendations to improve contingency contracting — released this report today calling on DCAA to abandon the all-or-nothing approach it takes when rendering opinions on contractor business systems.
In December, DCAA scrapped its opinion that allowed business systems with minor deficiencies to be deemed “inadequate in part.” A prior GAO report that found the auditors in DCAA’s western region were pressured by supervisors to change the middle-ground opinions to “adequate” in order to please contractors. Contractors can only directly bill the government for work if their systems are deemed fully “adequate,” or reliable. If a contractor can directly bill the government, it doesn’t have to go through a lengthy invoice approval process.
But the commission, which has held a series of hearings about the adequacy of contractors’ cost estimating and accounting systems, found the new pass-fail policy increases the government’s risk of wasting money because it diminishes the importance of an inadequate audit finding.
Under the new rules, a system is deemed “inadequate,” or unreliable, if even one minor aspect of the accounting system is broken. Such a blanket finding is “not informative enough to help contracting officers make effective decisions” about how to hold the contractor accountable for fixing problems, according to the commission report.
The report went on to say:
Rather than giving system deficiencies more importance, it seems to have the opposite effect — undermining the significance of the audit findings and weakening their effectiveness…Without any reasonable provision for more accurately describing systems that are less than perfect, contractors and contracting officers find the ‘adequate/inadequate’ options too restrictive.”
A graduated grading system is needed to give contracting officers clear information about the monetary losses that could result from a system deficiency and the level of risk that deficiency poses, so contracting officers can decide how to hold contractors accountable, the report said.
Tags: DCAA, DCMA, DoD IG, GAO, Wartime Contracting Commission
Postal Service to review 1,000 post offices for closure
July 30th, 2009 | Agencies Postal Service | Posted by Gregg Carlstrom
The U.S. Postal Service wants to study roughly 1,000 post offices for possible closure – the latest cost-cutting step from an agency that is scrambling to deal with a projected $7 billion deficit this year and larger losses in 2010.
The agency started its review earlier this year with approximately 3,200 post offices, and decided about 1,000 of them are “candidates for further review.” Postal managers say they will consider several factors in deciding whether to close those facilities: mail volume, proximity to other post offices, and the potential savings in labor and utility costs.
Post offices only generate about 71 percent of the Postal Service’s revenues each year; the rest comes through alternative channels, particularly the Postal Service’s Web site.
“Each year more and more postal transactions are now accomplished online,” said Jordan Small, the Postal Service’s acting vice president for network operations. “We consider this a success… [but we need] to determine if there is, indeed, excess capacity in the network.”
The post office review is one recommendation from the Government Accountability Office, which added the Postal Service to its high-risk list last week. GAO analysts say they are deeply concerned about the agency’s finances. Postal officials say they will probably post another $7 billion deficit next year – even after slashing $8 billion in costs.
“The Postal Service urgently needs to restructure,” said Phillip Herr, the GAO’s director of physical infrastructure issues. “With regards to delivery operations, the Postal Service has more than 350,000 carriers, and delivery services represent the largest cost segment.”
Tags: GAO, high-risk list, post offices
USPS joins GAO high-risk list
July 28th, 2009 | Agencies Postal Service | Posted by Gregg Carlstrom
Update, 11:43 a.m.: Here’s a slightly eye-popping statistic from the GAO report: The Postal Service is projecting a $7 billion loss in FY2010 (next year) — even after reducing its expenses by $8 billion. Put another way, there is a $15 billion gap between the Postal Service’s projected FY2010 revenues and its current expenses.
Update, 11:37 a.m.: That was quick. Here’s GAO’s report (pdf) about why the Postal Service is on the list.
Update, 11:25 a.m.: Here’s a link to GAO’s current 2009 high-risk list (pdf). The list was started in 1990 and is updated biennially; it documents agencies that are especially prone to “fraud, waste, abuse and mismanagement,” or those that need “broad-based transformation.”
Original post: The Government Accountability Office will officially add the U.S. Postal Service to its high-risk list today. GAO says it will release more details this afternoon; we’ll let you know when they come in.
Tags: GAO
GAO jumps on the Twitter, YouTube bandwagon
July 7th, 2009 | Uncategorized | Posted by Rebecca Neal
The Government Accountability Office wants you to interact with the agency online through its Twitter feed and YouTube page.
The GAO joins more than 50 federal agencies plus dozens of members of Congress in reaching out to the public through Twitter, though the GAO has a way to go to adopt the casual, abbreviated style of writing prominent on Twitter. Its most recent Twitter post may not be scintillating enough to draw many new users into GAO reports:
GAO-09-567, Tax Administration: IRS Should Evaluate Penalties and Develop a Plan to Focus Its Effort”
The GAO maintains two Twitter accounts, one for reports and testimony, the other for legal products.
The YouTube page offers recruitment videos, as well as short productions explaining the Recovery Act. It can be viewed here.
In a press release issued Tuesday, Acting Comptroller General Gene Dodaro said Twitter and YouTube provide new ways to reach Americans.
While we’ve made extensive use of the Internet for some time, posting material on YouTube and Twitter offers new possibilities to inform people about our efforts to promote accountability and transparency in federal programs and operations.”
House Appropriations approves two bills
June 15th, 2009 | 2010 Budget Agencies Congress | Posted by Rebecca Neal
The House Appropriations Committee approved the Homeland Security and Legislative Branch fiscal year 2010 appropriations draft bills at a markup Friday.
The Homeland Security bill provides $42.63 billion for the agency, compared to President Barack Obama’s $42.83 billion request for fiscal year 2010. In 2009, the agency received $39.98 billion.
The bill cuts $135 million requested for agency operations due to “staffing vacancies, redundant policy initiatives and poorly justified request to consolidate DHS headquarters for those agencies not moving to St. Elizabeths,” according to a committee news release.
The bill includes:
- $10 billion for Customs and Border Protection, $82 million less than Obama requested, due to slight cuts in funding requests for multiple programs. This is $147 million more than the 2009 funding.
- $5.4 billion for Immigration and Customs Enforcement, $30 million less than the president’s request but $439 million more than 2009.
- $382 million for cybersecurity, $19 million less than the president requested and $68 million more than 2009.
The committee also approved the $3.7 billion draft bill to fund the Legislative Branch, $300 million than requested but $600 million more than 2009.
The bill includes:
- $559 million for the Government Accountability Office, $9 million less than the president’s request and $28 million more than 2009.
- $45 million for the Congressional Budget Office, $1.2 million less than Obama requested and $1 million more than 2009.
The House plans to take up the Homeland Security bill Friday and the Legislative Branch bill June 24.
Tags: CBO, CBP, Congress, cybersecurity, GAO, Homeland Security, ICE
GAO: Protests Not a Problem
April 14th, 2009 | Procurement | Posted by Elise Castelli
A lot has been made about the 17 percent up-tick in protests handled by the Government Accountability Office last year, but today GAO released a long-awaited trend report that shows, historically speaking, protest levels are relatively low.
GAO first got the protest authorities we know today in 1984. Since then the number of protests it handles have dropped significantly from 2,240 in 1989 to 1,027 last year. But protests have been inching up since 2001, mirroring the rise in procurement spending, according to the report.
Last year’s rise is primarily due to GAO’s expanded authority to handle protests of task orders worth more than $10 million and protests of competitive sourcing decisions, according to the report.
GAO said that these additional protests haven’t meant delays if they’re without merit. That’s because GAO closes nearly 50 percent of Defense-related protests within 30 days. In addition, while a procurement is under protest, Defense and other agencies can move forward with the buy if the good or service is urgently needed or in the best interests of the country.
Why all the misconceptions about bid protests being out of control? Simple, GAO says:
Last year, a single protested procurement–the Boeing Company’s challenge of the award of a contract by the Air Force to Northrop Grumman for a new fleet of tanker planes–generated unprecedented interest in, and questions about, GAO’s role in deciding these disputes. While we welcome this interest, many of the questions we received, as well as the media accounts of the dispute, reflected a limited understanding of the protest process.
Tags: bid protests, GAO
1-800-FRAUD
March 30th, 2009 | Economic Stimulus | Posted by Gregg Carlstrom
Well, not exactly. But the Government Accountability Office has set up a hotline to track stimulus fraud, and the agency is asking everyone — feds, contractors and private citizens — to report waste and abuse.
GAO is one of the agencies tasked with overseeing billions of dollars in stimulus spending, which would be a difficult task even if the agency had no other responsibilities.
“The public can help to identify improper activities or weaknesses in programs that warrant scrutiny,” said Gene Dodaro, the acting comptroller general.
Here’s the contact information for FraudNet, GAO’s new hotline:
By phone: 1-800-424-5454
By fax: 202-512-3086
By e-mail: fraudnet@gao.gov
GAO: SBA HUBZone Program Plagued by Fraud
March 25th, 2009 | Procurement | Posted by Elise Castelli
There is widespread fraud in the Small Business Administration’s Historically Underutilized Business Zone (HUBZone) Program, the Government Accountability Office has found.
In a review of 36 contracts awarded in four cities, GAO found that 19 firms claiming to be HUBZone eligible didn’t meet the qualifications for the program that is meant to benefit small businesses in severely economically depressed areas. The firms didn’t have their principal offices in HUBZones or didn’t meet the requirement mandating a certain percentage of employees live in the HUBZone.
The result: the firms fraudulently obtained more than $30 million in HUBZone contracts in fiscal 2006 and 2007.
These firms were located in Texas, Alabama and California, showing abuse of the program is beyond the Washington, D.C area, GAO said. GAO reviewed contracts awarded in Washington last July and found similar cases of abuse.
The latest GAO report was released at a House Small Business Committee hearing today. GAO also found the SBA did not remove 10 contractors identified in the July report from the HUBZone program. The continued participation of those firms in HUBZone meant an additional $25 million in HUBZone contracts went to the unqualified companies, GAO said. .
Committee chairwoman Rep. Nydia M. Velázquez, D-N.Y. called GAO’s findings “disturbing.” She criticized SBA’s management saying:
In July, the SBA told us they had these problems under control. But, now, GAO finds dishonest companies deceiving SBA with techniques that an ambitious college intern could detect using Google Earth. No wonder so many contractors view the HUBZone program as a ‘contract cash cow’ and see SBA’s enforcement efforts as laughable.
She also expressed concern about the agency’s ability to oversee small business contracts awarded with stimulus money and worried continued oversight failures would result in a “historic amount of waste and abuse.”
In a written response to the report, SBA told GAO it is re-engineering the entire HUBZone certification process to minimize fraud and abuse of the program.