Report: GSA misused tech funds

An arm of the General Services Administration misdirected $37 million in information technology funds to construct an office building and pay for renovation work, according to a report from the GSA Inspector General's office.

Activities included IT work that was beyond the scope of the contracts that vendors worked under, the report states.

The Federal Technology Service's Client Support Center (CSC) in Bremerton, Wash. bought construction and architectural services through companies originally contracted under the Small Business Administration's 8(a) program to provide noncomplex computer systems integration, the GSA Inspector General found.

In some instances, the center issued sole-source task orders when it should have opened them to competition, the report stated, and issued work that "did not include a single contract line item that was directly traceable to" Federal Acquisition Services for Technology (FAST) contracts that supposedly governed them.

FTS has pledged to take the necessary corrective action, the report states. Officials could not be immediately reached for further comment.

According to the IG report, completed in March but just now being released publicly, the technology service used contracts with Information Systems Support Inc. and ACS Systems and Engineering Inc. to buy architectural, engineering and construction services for the renovation work. ACS and Information Systems have FAST contracts to integrate off-the-shelf software and perform other "noncomplex" work. However, the renovation contracts called for professional IT services, including computer systems analysts, programmers and network technicians, placing it beyond the scope of the two companies' contracts.

The support center also spent $950,000 to build a one-story office building for about 30 employees of the Washington Army National Guard, according to the report. The building was completed in November 2001.

Task orders reviewed by the Inspector General did not include construction clauses required by the Federal Acquisition Regulation, and did not follow that rule's provisions for architectural and engineering services. The support center has already paid an undisclosed amount for violations of the Davis-Bacon Act, which requires that contracts for building renovation include a clause specifying the minimum wages to be paid to various classes of laborers working on the project.

Renovations were for various sites of the Army's Total Army Distance Learning Program, from 1998 through 2002. Work included building classrooms for distance-learning programs.

The support center's revenue increased almost tenfold, to $522 million from $53 million, between 1998 and 2002, according to the Inspector General. "Key employees were rewarded for this increase," the GSA report states. "We believe that the emphasis on revenue enhancement may have contributed to the CSC's willingness to provide the client with any product to obtain a two percent fee."