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IG finds GSA interference in contract negotiations

Jun. 5, 2013 - 06:00AM   |  
By JIM McELHATTON   |   Comments
A report from the office of Brian Miller, inspector general of the General Services Administration, found agency interference in contract negotiations with three companies in 2011.
A report from the office of Brian Miller, inspector general of the General Services Administration, found agency interference in contract negotiations with three companies in 2011. (Thomas Brown/Staff)

General Services Administration managers strong-armed their own contracting officials during negotiations with three large technology contractors, ultimately forcing the agency to pay higher prices while demoralizing acquisition staff, according to a watchdog report.

The GSA Office of Inspector General found in a report released Tuesday that the companies — Oracle, Carahsoft and Deloitte — all complained to GSA management in 2011 about contracting officials raising concerns about their contracts.

But instead of backing their own contracting officers, GSA managers — whom the IG report did not identify — took the side of contractors, resulting in questionable pricing, terms and conditions, according to the report.

Overall, the three companies held contracts worth about $900 million.

“This kind of intervention undermines the integrity of the procurement process,” IG Brian Miller said in an interview. “Contracting officers should get the best prices for taxpayers, and they should be supported in doing so.”

In the case of Deloitte, the IG found company officials were dissatisfied with talks about its offer for a new contract in 2011 as well as with restrictions placed on an existing contract. Company officials met with unnamed managers at GSA’s Federal Acquisition Service asking that the contracting officer be removed.

Indeed, the contract was transferred to another office, the IG found. GSA directors, who are not named in the report, told the IG that the transfer was done because of workload issues, but the IG found no other contracts had been transferred and that no workload management study existed.

A new contracting officer later extended Deloitte’s contract.

“The OIG report raises serious concerns stemming from the management of three large contracts in 2011,” GSA spokeswoman Mafara Hobson said in a statement.

“Under GSA’s new leadership, the agency has already taken action to address the OIG’s recommendations and will continue working to ensure the integrity of the procurement process.”

In a written response, FAS Commissioner Tom Sharpe told Miller that he’s ordered a review of the Deloitte and Carahsoft contracts to see whether they should be renegotiated or canceled.

He also said one unnamed supervisor has been placed on leave.

Neither Carahsoft nor Oracle officials responded to emails by deadline, but Deloitte issued a statement saying the company is studying the report.

“We believe our negotiations with GSA were at all times appropriate and conducted in good faith,” the company said in a statement emailed to Federal Times.

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