IG report has good news for small firms

Industry expects little negative effect from IG’s review of GSA purchases

The Defense Department inspector general’s examination of purchases DOD made through the General Services Administration found procurement errors. But the recently released report stopped short of recommending that DOD quit purchasing through GSA and its 11 regional Customer Service Centers.

The report might have had more drastic consequences if the documented problems were serious enough for the IG to recommend excluding GSA as an approved DOD purchasing agency, said Courtney Fairchild, president of Global Services, a government contracting consulting firm.

“That would have had a huge effect on the industry,” she said.

Guy Timberlake, president of the American Small Business Coalition, said “One of the effects would have been the immediate loss of opportunity for small businesses.”

DOD purchases through GSA schedules totaled about $6.01 billion between October 2005 and June 2006, according to M3 Federal Contract Group, a government consulting company.

“A company in Georgia that is doing work with GSA Atlanta [would] lose out on potentially hundreds of thousands of dollars of opportunity” if the purchasing authority were shifted to a buying command within DOD, Timberlake said.

The IG’s review found that the 11 GSA centers lacked adequate interagency agreements, and it spotted 12 potential violations of the Antideficiency Act. That law prohibits agencies from spending more money than they have available in an appropriation, unless authorized by Congress.

“We acknowledge that we made a mistake,” said David Bibb, GSA’s deputy administrator, referring to the possible Antideficiency Act violations.
The IG report said the undersecretary of Defense for acquisition, technology and logistics should require that whenever DOD agencies use a non-DOD contract, a qualified DOD contracting official should manage it.

The report also recommended that the undersecretary establish DOD policies on acceptable contract administration roles and responsibilities that would apply when DOD buys goods or services through other agencies.

GSA and its inspector general do not agree with the DOD report, Bibb said. “Both GSA leadership and the GSA IG submitted formal comments to the DOD IG outlining our differences,” he said in an e-mail message.

Bibb said the problems raised in the report were ones GSA identified in 2003 and subsequently addressed. “This is largely a rehash of old news,” he said.
The audit findings “support GSA’s view that the Get It Right plan — specifically, comprehensive internal controls, revamped accounting processes and improved training — worked as intended,” he added.
IG final report faults DOD-GSA purchasing practicesA report by the Defense Department’s inspector general found problems in nearly every DOD purchase it reviewed. Specifically, the report found that:

  • For 55 of 56 purchases, DOD failed to perform adequate acquisition planning.
  • For 54 of 56 purchases, DOD organizations did not have proper interagency agreements with GSA.
  •  For six of 14 sole-source purchases reviewed, GSA Client Support Centers did not provide adequate justification for sole-source procurements.
  •  For 42 of 51 purchases, DOD did not develop and implement adequate quality assurance surveillance plans.
  • For 11 of 54 purchases, GSA and the DOD requesting activity used government funds that did not meet the bona fide needs rule, and for one of 54 purchases the DOD requesting activity used the incorrect appropriation.
  •  For 11 of 56 purchases, DOD did not maintain an audit trail of the funds used to make the purchase.
Source: Defense Department

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

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