Oversight

IG raps Air Force for contracting lapses

magnifying numbers

An IG audit found inconsistent application of the rules pertaining to cost-reimbursement contracts in the Air Force. (stock image)

Air Force contracting officers have not consistently followed the rules before issuing solicitations for risky cost-reimbursement contracts, a type of contract that lawmakers and the Obama administration want the government to shy away from, according to an inspector general's audit.

The IG report shows that 48 percent of the cost-reimbursement contracts auditors reviewed did not comply with the interim Federal Acquisition Regulation rule for that type of contract. Those contracts -- 75 out of the 156 the IG reviewed -- were worth $8.8 billion.

The IG attributed the lapses largely to contracting officers’ failure to understand the entire rule. “They were unaware of the rule, assumed it did not apply to task or delivery orders when the basic contract was issued before the rule, or did not document actions taken to conform to the rule,” the IG wrote in the report, which was released March 21.

Contracting personnel might have increased the Air Force’s risk because cost-reimbursement contracts offer fewer incentives for companies to control their costs. They are reimbursed based on allowable costs instead of the delivery of a product or service.

In response, Maj. Gen. Wendy Masiello, the Air Force’s deputy assistant secretary for contracting, assured auditors she would issue a memo in May that emphasizes the importance of the interim FAR rule while encouraging contracting personnel to transition current contracts away from the cost-reimbursement arrangement.

“Effective communication between team members is crucial for sound acquisition planning and throughout the acquisition life cycle,” she wrote.

Furthermore, she intends to recommend that the Air Force opt for awarding hybrid multiple-award contracts to allow for more flexibility when soliciting agreements at the task- and delivery-order level.

Acquisition regulators released a governmentwide interim rule to the Federal Acquisition Regulation in 2011. It provides guidance on the handling of all contract types other than firm fixed price. It also highlights the circumstances in which cost-reimbursement contracts are appropriate, the need for planning documents to support the selection and the resources necessary to manage the high-risk contracts.

The interim rule was issued in response to the fiscal 2009 National Defense Authorization Act and was based on a memo sent by President Barack Obama in 2009 to minimize agencies’ use of high-risk contracts. They include cost-reimbursement and time-and-materials contracts. Lawmakers and administration officials have pushed for contract types that have a set fee, such as fixed-price contracts.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

The 2015 Federal 100

Meet 100 women and men who are doing great things in federal IT.

Featured

  • Shutterstock image (by venimo): e-learning concept image, digital content and online webinar icons.

    Can MOOCs make the grade for federal training?

    Massive open online courses can offer specialized IT instruction on a flexible schedule and on the cheap. That may not always mesh with government's preference for structure and certification, however.

  • Shutterstock image (by edel): graduation cap and diploma.

    Cybersecurity: 6 schools with the right stuff

    The federal government craves more cybersecurity professionals. These six schools are helping meet that demand.

  • Rick Holgate

    Holgate to depart ATF

    Former ACT president will take a job with Gartner, follow his spouse to Vienna, Austria.

  • Are VA techies slacking off on Yammer?

    A new IG report cites security and productivity concerns associated with employees' use of the popular online collaboration tool.

  • Shutterstock image: digital fingerprint, cyber crime.

    Exclusive: The OPM breach details you haven't seen

    An official timeline of the Office of Personnel Management breach obtained by FCW pinpoints the hackers’ calibrated extraction of data, and the government's step-by-step response.

  • Stephen Warren

    Deputy CIO Warren exits VA

    The onetime acting CIO at Veterans Affairs will be taking over CIO duties at the Office of the Comptroller of the Currency.

  • Shutterstock image: monitoring factors of healthcare.

    DOD awards massive health records contract

    Leidos, Accenture and Cerner pull off an unexpected win of the multi-billion-dollar Defense Healthcare Management System Modernization contract, beating out the presumptive health-records leader.

  • Sweating the OPM data breach -- Illustration by Dragutin Cvijanovic

    Sweating the stolen data

    Millions of background-check records were compromised, OPM now says. Here's the jaw-dropping range of personal data that was exposed.

  • FCW magazine

    Let's talk about Alliant 2

    The General Services Administration is going to great lengths to gather feedback on its IT services GWAC. Will it make for a better acquisition vehicle?

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above