Interagency Contracting:

Problems with DOD's and Interior's Orders to Support Military Operations

GAO-05-201: Published: Apr 29, 2005. Publicly Released: Apr 29, 2005.

Additional Materials:

Contact:

Michele Mackin
(202) 512-4587
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

In recent years, federal agencies have increasingly turned to interagency contracts--where one agency, for example, places an order under an existing contract for another agency--as a way to streamline the procurement process. Interagency contracting can offer benefits of improved efficiency, but this approach needs to be effectively managed. To learn more about some of the challenges of interagency contracting, we reviewed the process that the Department of Defense (DOD) used to acquire interrogation and certain other services through the Department of the Interior to support military operations in Iraq. On behalf of DOD, Interior issued 11 task orders, valued at over $66 million, on an existing contract. This report identifies breakdowns in the procurement process, contributing factors that led to the breakdowns, and the extent to which recent actions by Interior and DOD address these contributing factors.

DOD, faced with an urgent need for interrogation and other services in support of military operations in Iraq, turned to the Department of the Interior for contracting assistance. Numerous breakdowns occurred in the issuance and administration of the orders for these services. The breakdowns included issuing orders that were beyond the scope of the underlying contract, in violation of competition rules; not complying with additional DOD competition requirements when issuing task orders for services on existing contracts; not properly justifying the decision to use interagency contracting; not complying with ordering procedures meant to ensure best value for the government; and inadequate monitoring of contractor performance. Because the officials at Interior and the Army responsible for the orders did not fully carry out their roles and responsibilities, the contractor was allowed to play a role in the procurement process normally performed by the government. A lack of effective management controls--in particular insufficient management oversight and a lack of adequate training--led to the breakdowns. When these management controls are not in place, particularly in an interagency fee-for-service contracting environment, more emphasis can be placed on customer satisfaction and revenue generation than on compliance with sound contracting policy and required procedures. Significant problems in the way Interior's contracting office carried out its responsibilities in issuing the orders for interrogation and other services on behalf of DOD were not detected or addressed by management. Further, the Army officials responsible for overseeing the contractor, for the most part, lacked knowledge of contracting issues and were not aware of their basic duties and responsibilities. In response to the above concerns, Interior and DOD have taken actions to strengthen management controls. For example, Interior has re-issued or clarified several policies for its contracting personnel and has required them to take training on the proper use of General Service Administration contracts. DOD has issued a new policy requiring that military departments and defense agencies establish procedures for reviewing and approving the use of other agencies' contracts. These actions are a positive step toward addressing some of the contributing causes to the breakdowns GAO found, but it is too soon to tell how effective they will be.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: To address part (1) of this recommendation, in October 2006, the National Business Center released a "Policy for Review and Approval of Contract Actions", which establishes a policy for peer reviews. The policy requires that the peer reviews be conducted by a qualified acquisition professional that has not participated in the preparation of the contract action. To address part (3) of the recommendation--ensuring that contracting officials are trained adequately and that training is tracked--has been addressed in the Department of Interior's Acquisition and Financial assistance management review template. For example, the template for review of Interior's acquisition bureaus and regional offices includes an assessment of whether the bureau or region has inventoried its acquisition workforce and identified current and future weaknesses and needs in acquisition skills, and whether training is tracked and money is allotted for training needs, among other things. Although the template is for all of Interior, since the National Business Center at Fort Huachuca is subject to these reviews, this is a mechanism to ensure that contracting staff are properly trained and training is tracked. As of August, 2011, the agency was not able to provide evidence to demonstrate that BPAs are reviewed annually. As a result we are closing this recommendation as not implemented, even though part of the recommendation was addressed.

    Recommendation: The Secretary of the Interior should direct the National Business Center at Fort Huachuca to (1) establish a consistent methodology for conducting peer reviews of contracting actions and ensure that experienced and trained contracting officials perform the reviews; (2) ensure that reviews of BPAs are done annually, as required by the Federal Acquisition Regulation, to determine whether they still represent best value; and (3) ensure that the contracting staff are properly trained and effective mechanisms are in place to track the training.

    Agency Affected: Department of the Interior

  2. Status: Closed - Implemented

    Comments: To address this recommendation, the National Business Center created a checklist policy in 2006 for different types of contract actions (negotiated contract, federal supply schedule order, task or delivery order, and simplified acquisitions) that includes two questions about COR appointments. One question, for example, is, "Has a FAC-COTR certified COTR been appointed in writing to monitor the contract and did the CO and COTR both sign the appointment letter?". The policy requires that the acquisition personnel initial and date each question to provide evidence in the file of who reviewed the item and on what date. A "FAC-COTR certified COTR" is a COTR that has received the proper training requirements, thus ensuring that the COTR has met training requirements.

    Recommendation: The Secretary of the Interior should ensure that contracting officers' representatives are properly designated when contracts are awarded or orders are issued for other agencies and that they have met appropriate training requirements.

    Agency Affected: Department of the Interior

  3. Status: Closed - Implemented

    Comments: National Business Center (NBC) officials provided copies of two performance standards for contracting officials (GS-1102-13/12 and GS-1102-12 series) that are used for the contracting staff at NBC. These standards were revised in September 2007, after our review. In the standards, under Acquisition and Contract Administration, the person is evaluated on, among other things, his or her ability to "demonstrate compliance with applicable policies, standards, and requirements and maintain corrective action plans" and "advise and educate clients and AQD staff on Federal acquisition and contracting matters. Communicate clearly and concisely in discussions and meetings."

    Recommendation: The Secretary of the Interior should ensure that performance measures for contracting officials provide incentives to exercise due diligence and comply with applicable contracting rules and regulations.

    Agency Affected: Department of the Interior

  4. Status: Closed - Not Implemented

    Comments: Part of this recommendation--pertaining to whether contracting officials are trained adequately--has been addressed in the Department of Interior's Acquisition and Financial assistance management review template. For example, the template for review of Interior's acquisition bureaus and regional offices includes an assessment of whether the bureau or region has inventoried its acquisition workforce and identified current and future weaknesses and needs in acquisition skills, and whether training is tracked and money is allotted for training needs, among other things. As of August, 2011, the agency was not able to provide evidence to demonstrate that management reviews of Interior contracting offices emphasize and assess whether BPAs are used appropriately. As a result we are closing this recommendation as not implemented, even though part of the recommendation was addressed.

    Recommendation: The Secretary of the Interior should ensure that management reviews of Interior contracting offices emphasize and assess whether contracting officials are trained adequately and blanket purchase agreements (BPA) are used appropriately.

    Agency Affected: Department of the Interior

  5. Status: Closed - Implemented

    Comments: DOD agreed with the recommendation and plans to establish a community of practice to facilitate information-sharing among the services. Update from DOD's DAMIS system on May 22, 2006, shows that DOD posted all implementation policies on the website http://www.acq.osd.mil/dpap/specificpolicy/index.htm. One policy from March 27, 2006, requires DOD components to review all interagency agreements and provide the office of the Under Secretary of Defense with a report by July 15, 2006, among other requirements. In addition, during April 2005, under the Defense Acquisition University and in collaboration with GSA, DOD established the "Proper Use of Non-DOD contracts" community of practice. The CoP, which is available to both public and private sectors, is available at https://acc.dau.mil/usingnondodcontracts.

    Recommendation: The Secretary of Defense should develop a mechanism to track implementation of the new policy that establishes procedures for reviewing and approving the use of non-DOD contracts and to ensure that the military services and defense agencies have the opportunity to share information on how they are implementing it.

    Agency Affected: Department of the Interior

 

Explore the full database of GAO's Open Recommendations »

Oct 24, 2014

Oct 20, 2014

Oct 9, 2014

Oct 8, 2014

Oct 2, 2014

Sep 30, 2014

Sep 26, 2014

Sep 25, 2014

Sep 19, 2014

Looking for more? Browse all our products here