Price Inconsistencies on Schedule 70? Nah…

GSA’s IG audit of GSA schedules in 2016 found large price discrepancies between identical items. For instance, the cost of one of Sharp’s 70-inch LED Smart TVs showed prices ranging from $1,597 to $3,000. The audit also turned up prices much lower on commercial products. In addition, from August 2014 to July 2015, most IT schedule purchases were for top-selling items priced higher than the lowest IT schedule price, completely defeating the purpose of the Schedules program. (Nextgov, May 21, 2019)

Recommendations to correct the disparities include:

  • Verify prices for identical IT schedule items by price analysis
  • Improve price protection for IT schedule reseller contracts by setting controls
  • Ensure contracting officers receive accurate and complete information around manufacturers’ commercial sales practices (ibid)

Per the review by the IG, the Federal Acquisition Service has taken “appropriate corrective actions” to address these price inconsistencies.

Questions about IT Schedule or other GSA Schedule pricing? Give us a call at 301-913-5000.

DoE Bureaucracy Hard at Work

In fiscal year 2016, the General Accounting Office (GAO) conducted an audit of 28 entities to address issues with Department of Energy (DoE) contractor oversight. DoE, including it’s National Nuclear Security Administration, is the largest federal civilian contracting agency, spending about 90 percent of its appropriations on contracts with companies, universities, and others for federal research and development,  production, and engineering. (GAO, March 12, 2019)

After reviewing contracting and subcontracting data and documents, analyzing regulations, and interviewing federal officials and contractor representatives, GAO found: DoE awards about $23.6 billion in prime contracts with about 30 percent ($6.9 billion) of that total going to subcontractors in the form of universities, different companies, or entities; almost all 28 primes were also subs; subcontractors totaled nearly 3,000; and subcontractor complexity makes it difficult to figure out the relationship between the various parties. (ibid)

More than $3.4 billion in subcontract costs (over a ten year period) were never audited. Because the statute of limitations is six years (according to the Contract Disputes Act), many unallowable costs may not be recovered. (ibid)

GAO made six recommendations, including that DoE develop procedures requiring local offices to verify completion of subcontract audits and that DoE independently review subcontractor ownership information to identify potential conflicts of interest. DoE agreed with all recommendations except to independently review subcontractor ownership information. (ibid) Huh. Wonder why.

GSA Chief’s Wrath for Whistleblower

Denise Turner Roth Retaliated Against Whistleblower

The Inspector General found that Ms. Roth she retaliated against a whistleblower, threatening him with transfer to another position and limiting his job responsibilities.

Sources reveal that this whistleblower is outgoing FAS commissioner Tom Sharpe.

Sharpe apparently alerted several executives about the Technology Transformation Service’s use of the Acquisition Services Fund, which the IG calls “violations of the law, gross mismanagement, a gross waste of funds, and abuse of authority.”

Sharpe’s complaint detailed TTS’s use of the ASF money. The fund consists of fees agencies pay, governmentwide acquisition contract revenue, and sale of surplus properties. The TTS’s use of the money has met controversy, as many believe the service competes with work already provided to other agencies, and distracts from the mission of FAS. As such, some executives harbor concerns that these actions are counterproductive to FAS’s mission.

Roth denies any wrongdoing and calls the Inspector General’s findings “wrong and disappointing.” She maintains that “all actions I took were necessary and driven to modernize the federal government.”

The Inspector General has referred the case to the Office of Special Counsel.

For more information, visit Federal News Radio.

The IG’s Eye’s on you

The Inspector General’s biannual report to Congress was especially telling this year. The report covered October 2016 to March 2017.

In that period, the office audited 31 contractors. They found that 21 partners did not submit honest information, 13 overcharged GSA customers, eight did not adequately report schedule sales, and five did not comply with price reduction provisions.

All of that adds up to $224 million in savings through smarter or less spending. The IG also noted that GSA’s digital services wing, intended to cover its own costs, had guzzled $32 million government dollars.

The IG recommended no fewer than 168 cases for legal action, of which 49 faced prosecution and 41 indictment. More than 100 companies were suspended and debarred.

The moral of the story is to keep a tight ship; you don’t want to answer to the inspector general.