IG highlights GSA's missing pieces in contract files

General Services Administration officials are reiterating to agency employees the need for fully documented contract files, particularly on cost-reimbursement contracts, after an audit found numerous missing pieces.

GSA’s Federal Systems Integrations and Management Center (FEDSIM), which offers assisted acquisition services to agencies, had contract files that did not comply with stricter documentation rules that Congress has instituted in recent years, according to an audit the GSA Inspector General posted online May 1.

FEDSIM’s contracts didn’t have acquisition plans properly developed. For some contracts, officials did not designate the contracting officer’s representative (COR), who is the person that manages the contract on a technical level, before awarding the contract. Finally, several companies had accounting systems that didn’t adequately track costs. The IG wrote that an accounting system can affect the quality and validity of the data the company supplies to government for oversight.

“High-risk contracts, such as cost-reimbursement contracts, provide no direct incentive for contractors to control costs,” the auditors wrote. “They are often used without appropriate justification or sufficient management and oversight. As a result, the risk to the taxpayer escalates.”

In response to the audit, Steve Kempf, commissioner of GSA’s Federal Acquisition Service, wrote that GSA is updating its templates and instructions to focus on the new stricter requirements that go along with cost-reimbursement contracts. Also, the agency wants to use existing automated tools to designate CORs, instead of relying on individual contracting officers to assign the work.

Congress put the stricter rules in place in the fiscal 2009 National Defense Authorization Act to ensure the government was protecting itself when entering into risky types of contracts. In March, acquisition regulators, GSA, the Defense Department and NASA, revised the Federal Acquisition Regulation to include ways to manage and properly use cost-reimbursement contracts.

For the audit, officials reviewed cost-reimbursement contracts and task orders GSA awarded between March 17, 2011 and Sept. 30, 2011.