IG: DOD, NIH need to clean up GWAC deals

Contracting officials at the Defense Department and the National Institutes of Health, which assists DOD with purchasing, continue to take shortcuts when buying products and services through NIH's governmentwide contracts, according to a recent report from DOD's inspector general.

Defense program officials and NIH contracting officers didn’t comply with the Federal Acquisition Regulation or DOD’s additional rules when making purchases through the Chief Information Officer Solutions and Partners 2 Innovations governmentwide acquisition contract (GWAC), a March 24 report states.

"The officials made numerous contracting mistakes and, in one case, wasted taxpayer money,” auditors wrote.

For example, program and procurement officials often favored incumbent contractors rather than looking for the best price from competing companies, auditors found. Those problems happened primarily for two reasons: DOD officials were biased toward the incumbent, and the officials responsible for evaluating contractors had excessive workloads.

The auditors reviewed 34 acquisitions worth $221 million that DOD awarded on its own and six acquisitions worth $280 million that were awarded with NIH’s assistance. All the awards were made in fiscal 2007.

When assisting DOD, NIH officials improperly administered three task orders worth $258.7 million and awarded three orders worth $68 million without adequately ensuring that the price was good, the report states. Finally, auditors reviewed five task orders that NIH awarded without providing the rationale for its choices.

However, auditors said DOD and NIH have taken steps to address the problems. In April 2008, the agencies signed a memorandum of agreement on how to better use NIH's GWACs. The agreement clarifies the responsibilities of NIH and DOD officials when awarding orders and states that DOD and NIH officials intend to do a better job of analyzing prices and finding the best value.

“The memorandum of agreement should help improve price analysis for task-order awards,” the IG report states.

DOD has run into similar problems when using services and contracts offered through other civilian agencies, including the General Services Administration's Acquisition Services Directorate and the Interior Department's Acquisition Services Directorate (formerly called GovWorks).

The Government Accountability Office issued reports on those problems and kept interagency contracting on its most recent list of high-risk programs.

In the DOD IG’s report, auditors recommended that DOD officials discipline contracting officers who repeatedly ignored contracting rules and train others in how to properly use GWACs and other multiple-award contracts.