IGs fault Interior for handling of DOD business

Department of Interior contracting centers that do business on behalf of the Department of Defense routinely violated a number of government rules and regulations, putting Interior at risk of legal penalties and a loss of public confidence and trust, according to a recent joint audit by the DOI and DOD inspectors general.

The audit examined Fiscal 2005 procurements made by GovWorks and the Acquisition Services Division, Southwest Branch (SWB) of the National Business Center. Together, they completed a total of $1.7 billion worth of deals for the DOD during that year.

Of the 49 contracting actions examined by the IGs, they found 19 potential violations of a law that prohibits using expired funds, and 34 that had other types of deficiencies and or questionable practices such as improper contracts, unapproved contracting mechanisms, and failings of contracts administration procedures.

In all, the IGs said in their report, these problems meant that “DOI left DOD vulnerable to fraud, waste and abuse. DOI also made itself vulnerable to potential sanctions, loss of acquisition center business, and a loss of public trust.”

The DOD IG recently released a series of reports showing how DOD uses interagency contracts to circumvent a number of basic procurement practices.

One issue highlighted in the joint DOD/DOI report was the use of appropriated funds that had run beyond their term, which the IGs pointed out potentially violated the Antideficiency Act.

DOD components often send funds to GovWorks  at or near their end of their period of availability, the IGs said, and sometimes the components provided only vague descriptions of the products or services being requested. Those descriptions are not sufficient to demonstrate that a “bona fide” need existed in the period for which the funds were appropriated, they added.

“It appears GovWorks accepts vague and nonspecific requests for acquisition services to allow DOD components to park or bank funds at GovWorks and inappropriately extend their period of availability,” the IGs’ report said.

“Although GovWorks claims it does not believe that Congress intended for a franchise fund to perform financial alchemy and turn huge amounts of one-year funds into no-year funds, it appears that is what is happening,” the document added.

More than 40 percent of the funds received by GovWorks in Fiscal Year 2005 came during the last quarter of the year, and about $270 million was received in September alone.

As of Oct. 27, 2005, the IGs said, DOI had $577 million of potentially expired funds on its books as unfilled customer orders.

In August last year, the IGs examined an additional 12 purchase requests from the transactions making up the $577 million, and found that five did not have a bona fide need. Unfortunately, they said, DOI expended expired funds in three of those, in violation of the Antideficiency Act.

In other findings, the IGs said that both GovWorks and SWB failed in their responsibilities to act as “good stewards” of federal resources, and that DOI had not provided sufficient oversight to the contracting centers in their conduct of business on behalf of other agencies.

The IGs recommended various remedies to correct the problems they fund with the contracting centers, most of which the DOI concurred with. However, it rejected several, and those will be passed on to the Government Accountability Office for further action, the report said.

About the Author

Brian Robinson is a freelance writer based in Portland, Ore.


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