IG faults DHS for breaking rules on some noncompetitive contracts

The Homeland Security Department did not comply with federal regulations in the awarding of 70 noncompetitive contracts in fiscal 2007, according to a new report from DHS Inspector General Richard Skinner.

Overall, DHS officials obligated $3.1 billion in procurements without full and open competition that year, and detailed review of 82 of those procurements -- worth a total of $417 million -- showed that DHS skirted the rules in awarding 70 of them, according to Skinner's report.

“Awards were missing or did not have adequate documentation showing compliance with departmental or federal acquisition regulations,” Skinner wrote. “Further, procurement files did not always contain proper written justifications, were not always approved by the appropriate official, did not always contain sufficient evidence of market research or adequate acquisition planning, and did not always reflect the amount of competition that actually took place.”

Skinner also noted that DHS appears to have structured some acquisitions specifically to avoid competition. For example, DHS officials estimated a budget for acquisition support services at $3,498,500, just under a $3.5 million threshold that requires competition under federal rules. “Documentation in the file indicated that efforts were intentionally made to keep the amount just under the competitive threshold. This suggests that there may have been an aversion to competition,” Skinner wrote.

The audit also found that 21 of 38 competitive procurements valued at $348 million did not comply with federal regulations.

Skinner blamed the problems on inadequate policies, procedures, controls and resources and said the result is a department that cannot assure best value in acquisition.

In addition, DHS officials are not effectively using the Federal Procurement Data System-Next Generation system to consolidate and analyze their procurement data, Skinner found, adding that without effective controls to make sure that employees are entering complete and reliable data, the department is unable to accurately report procurement statistics.

The IG made seven recommendations to DHS that included advice to strengthen policies and procedures and align human capital efforts.

DHS’ Acting Chief Procurement Officer Richard Gunderson agreed with Skinner's seven recommendations and said the department is already in the process of implementing them.

Competition in federal contracting has been a longstanding goal. However, efforts to reduce noncompetitive contracting have been resisted by members of Congress who defend awards made in their states and congressional districts.