IG: 'Significant deficiencies' at FTS

Officials at some Federal Technology Service regional centers have done a poor job of adhering to federal procurement regulations, according to a compendium of inspector general reports that FTS officials released late today.

Officials at FTS, a unit of the General Services Administration, asked the inspector general to survey Client Support Centers in all 11 GSA regions after abuses were uncovered at a center in the state of Washington. The lapses in that case included the use of money earmarked for information technology to pay for construction work.

In an introduction to the 423-page compendium of reports, Assistant Inspector General Eugene Waszily wrote that "significant deficiencies and departures from procurement regulations occurred frequently at many of the CSCs."

The frequency, significance, and the nature of the problems found varied widely, Waszily added, making it impossible to develop an overall characterization, except that "the existing procurement program controls were not working and were in need of a substantial overhaul."

Problems that the inspectors found included:

Misuse of contract vehicles

Inadequate competition

Nonexistent or ineffective contract management

Inadequate support for pricing determinations

Misleading statements of work

Heavy use of time-and-materials contracts, which make costs hard to predict, without justification

Awarding contracts outside the scope of the IT Fund that FTS uses

Using vendors to pass work through to preferred contractors

Adding open market items to contracts with evaluating prices

FTS officials have said they are taking the problem seriously ever since abuses at the Washington state facility came to light in the fall of 2003. Last summer, FTS and Defense Department officials launched "Get It Right," a campaign to both raise awareness and institute a system of spot-checking contracts for compliance.

The Inspector General offices for GSA and DOD are working together now to test new controls at the support centers that were not in place when the original audits were conducted. That report is expected next spring.

The Client Support Centers accounted for $5.4 billion of FTS's business in fiscal 2004, with DOD accounting for more than 85 percent of it.