IG finds compliance issues at GSA small-business center

GSA IG report

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Though the General Services Administration tried to watch its compliance, it allowed for too much subcontracting and failed to detect out-of-scope orders, according to a new inspector general's report.

The GSA Inspector General reviewed awards for the Streamlined Technology Acquisition Resources for Services (STARS) governmentwide acquisition contract. The GWAC is a small business set-aside contract with total order value of nearly $273.2 million from contract awards on June 1, 2004, through Nov. 17, 2005, the Dec. 27 report states.

It recommends that GSA’s Small Business GWAC Center, which is responsible for the STARS program, clarify contract language, standardize and do more reviews, and focus on high-risk procurements to comply with regulations.

The IG found, upon in-depth investigations, that the center has very high levels of work subcontracted by small-business owners. They are required to do half the work. If an 8(a)-certified small business does less than 50 percent of the work, it would have violated laws by disproportionately subcontracting the work. The IG’s audit found that a vendor subcontracted as much as 95 percent of the work. The IG’s other checks indicated a strong probability that heavy subcontracting of tasks continues, according to the report.

Asking contractors directly about their subcontracting on the semiannual reports would curb the abuse, the IG suggested.

The IG report states that program officials would not use contract option years if a vendor did not comply.

“Because of the STARS program goal of developing small and disadvantaged business information technology abilities, the program could face significant risks if subcontracting is not adequately monitored and controlled,” the IG report concludes.

The IG also found task orders that were out of scope with the contract. The report recommends clearly explaining regulations’ allowances for variation from the contract’s limits. Audits also found orders classified incorrectly and purchases not allowed on the contract.

“Use of the STARS contract for other than its intended purpose also jeopardizes the program,” the report states.

To avoid such problems, the IG told officials to review high-risk orders, which account for more than $3 million. They should also check orders for the largest vendors and clients as well as new stakeholders. The report also recommended a standard review process for consistency.

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