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GSA IG calls for more funding, authority for contract audits

Jul. 11, 2010 - 06:00AM   |  
By TOM SPOTH   |   Comments
Brian Miller, the General Services Administration's inspector general, wants more money and more authority to conduct audits of the agency's contracts.
Brian Miller, the General Services Administration's inspector general, wants more money and more authority to conduct audits of the agency's contracts. (Tom Brown / Staff)

Brian Miller, the General Services Administration's inspector general, wants more money and more authority to conduct audits of the agency's contracts.

"By doing that, we assure that the federal government is getting the best deal and the best prices that it can get," Miller said in a recent interview with Federal Times. "Obviously, if we had more resources, we could do more."

Miller's office gets about $5 million annually from Congress for pre-award audits, conducted at the request of GSA contracting officers before deals are signed. The audits led to the identification of nearly $4 billion in potential savings from 2004 to 2008, according to the Government Accountability Office.

That means taxpayers received up to a $160 return for every dollar spent on the audits.

GAO reported in May that the inspector general audits only "a small sample" of contracts due to limited resources. In 2009 and 2010, the IG planned to audit 145 five-year contracts worth a potential $4.7 billion only about 2 percent of the total value of all contracts on the GSA schedules.

Miller said he has lobbied Congress for more money to no avail.

Of the GAO's findings, he said, "I've shown those to everyone I can find" on the Hill.

When running a pre-award audit, the IG's office takes a closer look at the best deals vendors offer to their customers in the public and private sectors, and tries to ensure that GSA gets the same treatment.

"I think the value we bring is we can actually go in and get the work papers from the companies," Miller said. "That's a lot of work that a contracting officer simply doesn't have the time or the tools to do."

Miller thinks his office should be able to conduct audits without being asked.

"One of the things we've thought about in the future is perhaps getting more authority to go and just do the audits," he said. "I'd like to think we'd give it some meaningful thought, so it wouldn't be purely random."

John Needham, GAO's director of acquisition and sourcing management issues, said such authority would "give them the independence they need to do what they think are the appropriate audits."

Any action to increase the IG's authority would have to come from Congress, Needham said. GAO recommended in its recent report that GSA work with the IG's office to "target the use of pre-award audits to cover more contracts."

Needham said that, in the past, GSA reimbursed the IG's office for its spending on pre-award audits, which were "treated as an audit service" for the agency. Now that funding comes directly from Congress, it would make sense for the IG to have more authority, he said.

Right now, pre-award audits uncover incorrect information about companies' pricing policies more than half the time, Miller estimated.

The IG's office also should have the authority to interview contractor employees, Miller said, as it does with Recovery Act contracts. Companies don't have to give employee names to the IG's office so it can conduct interviews, although they often do. "In those rare instances when they're not cooperative, we'd like to be able to require them to give us that information," Miller said.

Post-award audits, conducted after contracts are signed and work has begun, could also be expanded, Miller said. Those reviews sometimes result in large settlements. In April 2009, following one post-award audit by the IG's office, the computer storage and data management company NetApp paid a $128 million fine for providing faulty pricing information to GSA.

Still, Miller prefers pre-award audits. "It's more cost-effective if we can save the government money up front," he said.

Miller said he understands money is tight right now for the federal government, but thinks more dollars for audits would be a good investment.

"That's one of the many policy questions: How many resources do you devote to this?" he said. "As you can see from these numbers, I think that the benefit to every dollar invested in this is great."

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