IG knocks State's handling of $3.5B contract

A State Department office charged with overseeing a $3.5 billion enterprise IT contract failed to validate certain performance metrics while the department paid incentive fees to contractors on the project, according to a new inspector general report.

The IG's inspection concerned State's Vendor Management Office, a shop set up by the CIO to support the Vanguard Acquisition Strategy to consolidate enterprise IT contracts at the Bureau of Information Resource Management under one contract with multiple task orders. The consolidated contract is worth $3.5 billion over 10 years, according to the IG, and constitutes 90 percent to 95 percent of the bureau's contract spending.

The inspection found that VMO performs some of its duties "without formal delegation from the contracting officer," as required by the Federal Acquisition Regulation.

Further, VMO was operating without authority to enforce its work, based on the fact that there were no guidelines for VMO in the Foreign Affairs Manual. (At the time of the inspection, there was draft language describing VMO's role that could be added to the manual.)

From April 2014 to March 2015, those charged with monitoring the Vanguard contract failed to validate, on average, 25 of 268 contractor performance metrics per month, the inspection found.

In January and February, the department paid $376,595 in incentive fees to contractors for "superior performance without a review or verification of 20 performance metrics, which could lead to the department paying for services that it did not receive," the report states.

The IG's inspection of the bureau also concluded that IRM directorates do not consistently use a project management tool known as iSchedule because the bureau has not made its use mandatory.

"The inconsistent use of iSchedule has resulted in inadequate bureau coordination and incomplete project data and limits visibility on projects, activities and risk," the inspection states.

Among the IG's recommendations was making iSchedule use mandatory and conducting a cost/benefit analysis to determine if the bureau needs a new performance metrics database system.

The State Department CIO did not immediately respond to a request for comment. The published version of the IG's inspection did not include responses from agency officials to the substance of the report or the recommendations for action.