FDA said to choose speed when buying IT

Officials at the Food and Drug Administration's Center for Drug Evaluation and Research stressed speed and flexibility when buying technology, but lacked clearly defined requirements, according to a report released today.

Officials entered risky contracts, known as time-and-materials contracts, which pay a company based on labor hours and reimburses them for materials, the Health and Human Services Department’s inspector general wrote in the report. That type of contract doesn’t give a company incentive to control costs, the report added.

In streamlining its purchases, the center used the General Services Administration’s Federal Supply Service contracts or governmentwide acquisition contracts for 27 of 28 information technology purchases from fiscal 2004 to 2007. These types of contract vehicles limited competition for the center’s work, the report stated.

The center “acquired IT services primarily through flexible acquisition methods and time-and-material contract actions that reduce the agency’s administrative burden but increase the risk for the government,” the report stated.

As for its planning, officials at the center used broad language in their work statements to describe IT and services they intended to buy.

The IG wrote that agencies must lay out acquisition plans and clearly define what they are buying in a statement of work. They also must choose an appropriate type of contract, which doesn't heap the risk on the agency. The Food and Drug Administration intends to begin identifying and defining IT requirements early in the process of developing a new system, wrote Susan Winckler, FDA chief of staff, in a letter to the IG.

The IG also recommended that the center convert its time-and-material contracts to contracts with fixed prices. Fixed-price contracts “would reduce the financial risk borne by the government and may allow FDA to obtain the same services at a reduced cost,” the report states. Winckler agreed to change contract types when appropriate.

The center also should use quality assurance plans to check a contractor’s work and give contractors performance incentives, which would tie the company’s profits to specific performance standards, the report recommended.