DOD limits GovWorks buys to $100K

DOD-Interior agreement on contracting practices

The Defense Department will stop using the Interior Department’s GovWorks assisted acquisition services for all orders worth more than $100,000.

Shay Assad, DOD’s director of Defense procurement and acquisition policy, told Interior Chief Financial Officer Nina Hatfield in a May 31 letter that the department’s inspector general is not satisfied with GovWorks attempts to fix its contracting and funding processes.

“We direct that no interagency agreement in excess of $100,000, be accepted by GovWorks Federal Acquisition Center of the Department of Interior’s National Business Center from DOD unless a determination has been made in writing by the Under Secretary of Defense Acquisition, Logistics and Technology that it is necessary in the interest of the department to procure the particular property or services,” Assad wrote in the memo obtained by Federal Computer Week. “This restriction shall remain in effect until rescinded.”

Congress in the fiscal 2006 Defense Authorization Act required the Defense IG to review GovWorks, NASA and the Treasury Department to ensure the organizations were following federal procurement rules and laws. The most recent audit found problems with GovWorks and recommended DOD stop using the service.

The IG performed a similar review of the General Services Administration and found problems despite the agency’s ongoing effort to fix the concerns. GSA and DOD signed an agreement in December 2006 pledging to continue working together, defines roles and responsibilities and standard contract language for interagency agreements.

Assad’s letter comes two months after DOD and GovWorks signed a similar agreement. The March 13 memo details 22 areas on which the two agencies will work together and provides a list of milestones and dates.

In January, the IG examined Interior’s interagency contracting between Govworks and Ft. Huachuca, Ariz. where auditors found that DOD and Interior did not comply with laws and regulations based on a review of 2005 contracts. In 2005, Fort Huachuca, home of the Southwest Acquisition Branch, spent $1.66 billion with GovWorks.

The IG found among other things that:
  • DOD used Interior contracting officials who did not adequately document and support that the prices paid were fair and reasonable.
  • DOD customers permitted GovWorks to retain and use funds that had expired.
The IG recommended, and DOD officials agreed, that the Southwest Acquisition Branch should not do any more business with GovWorks “until DOI establishes acquisition controls to resolve those problems.”

In the latest letter to Interior, Assad said the IG recently completed another audit and found GovWorks did not fix the problems.

“While we are encouraged by the noted substantial improvement in compliance with Defense procurement requirements by the Southwest Acquisition Branch, we continue to be disappointed by the findings with regard to the support provided to DOD by GovWorks…” Assad said.

Assad also is requiring GovWorks to return any funds of more than $100,000 not already placed on a contract.

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