The embattled General Services Administration, which became embroiled in a controversy last year over an $800,000 Las Vegas conference featuring clowns and a mind reader, continues to show "malfeasance and disregard for taxpayer dollars" in its award of contracts, a report says.
The Office of Audits at the GSA's Office of the Inspector General revealed in a report this week that senior managers within the agency's Federal Acquisition Service (FAS) improperly intervened in the award of contracts for information technology services and equipment. In the process, GSA management "undermined the integrity of the procurement process."
The report identified numerous instances in which FAS management, based on complaints from contractors, overrode contracting officer determinations without proper justification, pressured contracting officers to extend or award contracts, and reassigned contracts to different contracting officers.
These instances of FAS management intervention, according to the report, included direct communications between contractors and FAS management, often without the knowledge and participation of the responsible contracting officers.
In at least one case, the report said, FAS management interference resulted in a contract with higher prices and less favorable terms than those recommended by the original contracting officers. In other cases, it said, interference resulted in questionable contract extensions.
The audit focused on three 2011 contracts worth more than $900 million to Oracle America, Carahsoft Technology and Deloitte Consulting. The report said intervention resulted in contracts with "inflated pricing and/or unfavorable contract terms and extensions where contracting staff had determined such a decision was not in the best interests of the United States."
In addition, the report said, FAS management intervention undermined the authority and morale of GSA contracting officers. It said FAS management allowed contractors to circumvent contracting officers when the contractors disagreed with contracting staff determinations, and supported the contractors' positions, including reassigning contracts to different contracting officers.
In each reassignment case, the report said, the new contracting officer awarded or extended contracts without properly addressing significant issues identified by previous contracting officers.
The report, first reported by Federal Times, said the audit found an environment at GSA "that appears rife with cronyism, mismanagement and intimidation." It said GSA contracting officers told the Inspector General's Office they "feared for their jobs because they were trying to do the right thing and protect the taxpayers' interests."
"It is becoming clear that the inmates are running the asylum at GSA," said Tom Schatz, president of the Washington-based watchdog group Citizens Against Government Waste. "On procurement, it is wasteful; on property management, it is ignorant.
"Heads have already rolled at GSA for its regrettable judgment on conference spending, and they should certainly roll again now," he said. "The federal government's foundation for procurement is under the stewardship of the GSA, and Congress should dig as deep as necessary to see if it is rotten at its core."
Thomas A. Sharpe Jr., FAS commissioner, said in a written response to the report that the Inspector General's Office had raised "serious concerns" and that the agency has "already begun taking action to address your recommendations."
Mr. Sharpe said he had required a management review of the Deloitte and Carahsoft contracts to determine whether they should be renegotiated or canceled, and that he had placed on administrative leave a supervisor named in the report as having acted improperly pending further review.
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