EPA wants controls on sole-source contracts

Environmental Protection Agency officials are adding a “second set of eyes” to ensure noncompetitive contracts have all the necessary signatures before they are awarded, according to a recent letter.

By July 31, EPA will put new internal controls over sole-source procurements valued at more than $550,000, which require several officials' signatures before award. The agency will revise its acquisition handbook to require contracting staff members one level above the contracting officer to review and approve justifications for sole-source procurements.

The agency's competition advocate is also developing post-award automated reports to identify contracts that required the advocate’s signature, Luis Luna, assistant administrator at EPA’s Office of Administration and Resources Management, wrote in a response to a inspector general’s report released June 30.

“Based on the [advocate’s] review of these new reports, we will be able to validate if our proposed pre-award control is working effectively,” Luna wrote.

An audit conducted this year found that the appropriate officials did not approve four of 15 applicable sole-source procurements, which the agency awarded between 2005 and 2007.

According to the report, two of the four procurements were for less than $550,000 and needed the contracting officers’ signatures. The other two were valued at more than $550,000 and required reviews by both the service center manager and the agency's general counsel. EPA’s competition advocate needed to approve them as well. Also, one of those contracts had a total project cost of $12 million, which the Office of Acquisition Management's director should have approved, the report states.

The IG audited a sample of 20 sole-source procurements, and several of the contracts required no such approval, the report states.

In the report, Melissa Heist, assistant inspector general for audit at EPA, wrote that agency officials didn’t always adhere to the Federal Acquisition Regulation because of poor internal controls or they didn’t follow existing rules.

The auditors also found that EPA acquisition officials didn’t research the market to find other possible vendors. Officials told the IG they didn’t believe the research was required, and in at least one instance they thought only one vendor existed. By further examining a sole-source procurement for expert financial analysts, auditors found at least one other source that likely could have provided the same services, Heist wrote.

“Competition is the cornerstone of the federal government’s acquisition system, and its benefits are well-documented,” she wrote.

Heist recommended requiring contracting officers to include evidence of market research in files and conduct reviews of the research in quality assessment plans to determine whether a sole-source procurement was appropriate. EPA agreed with the recommendations, according to the report.