Contract audits may save millions for GSA, IG says

The General Services Administration could save up to $266 million in the first half of fiscal 2012 through pre-award audits that its Office of the Inspector General has conducted, according to an IG report.

Auditors went through 26 GSA contracts worth nearly $7 billion to provide contracting officers with vital and current information that helps them at the negotiation table, according to the OIG’s Semiannual Report to Congress. The report was released May 31.

GSA officials approved nearly all the savings.

Five of the more significant audits were of Multiple Award Schedule contracts with projected governmentwide sales totaling more than $5.1 billion. These audits resulted in recommendations of $222 million in funds to be put to better use.

Auditors found in the five cases that the Price Reductions Clause was ineffective. They found either too few sales by other companies that sell the same product or service, a contractor proposed exclusions to the clause that were too broad, or sales were all to the government, not the private sector.

In the report, the OIG listed as its chief achievement in the first half of the year the $199.5 million settlement with Oracle Corp. The case dealt with allegations that the company intentionally didn't tell federal officials about discounts it offered to commercial customers.

The semiannual report covered Oct. 1, 2011, to March 31, 2012.

Since October, the OIG issued 45 audit reports and recommended over $316 million in funds be put to better use and also questioned costs. It also made 486 referrals for criminal prosecution, civil litigation, and administrative action.

About the Author

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

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