Broadcasting to Cuba:

Weaknesses in Contracting Practices Reduced Visibility into Selected Award Decisions

GAO-08-764: Published: Jul 11, 2008. Publicly Released: Jul 15, 2008.

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The United States has long provided the Cuban people with alternative sources of news and information. As part of this effort, in December 2006 the International Broadcasting Bureau (IBB) awarded sole-source contracts to two Miami radio and television stations--Radio Mambi and TV Azteca--to provide additional broadcasting options. Additionally, the Office of Cuba Broadcasting (OCB) annually awards millions of dollars in contracts for talent services--writers, reporters, and technical support--needed to produce and broadcast news and entertainment programming. GAO evaluated the processes used to award (1) the Radio Mambi and TV Azteca broadcasting contracts, and (2) talent services contracts. We reviewed contract files and other documentation and interviewed program managers and contracting officers to determine the process used to award the two broadcasting contracts and a nongeneralizable selection of 37 talent services contracts.

IBB's approach for awarding the Radio Mambi and TV Azteca contracts did not reflect sound business practices. According to officials from IBB and the Broadcasting Board of Governors--IBB's and OCB's parent organization--the confluence of several interrelated events--ongoing interagency deliberations, the issuance of a July 2006 report by a Cabinet-level commission, and concerns about the health of Fidel Castro--required them to quickly obtain additional broadcasting services to Cuba. Competition laws and regulations provide agencies considerable flexibility to use noncompetitive procedures, if adequately justified, to meet their needs. In certain respects, however, IBB did not fully document in its contract files key information or assumptions underlying its decisions to not seek competitive offers, limit the number of potential providers it considered, or the basis used to negotiate the final prices for the services provided. Additionally, IBB did not actively involve its contracting office until just prior to contract award, though agency regulations and our prior work identify that timely involvement by stakeholders helps promote successful acquisition outcomes. Finally, though it partly justified its awards based on urgency, IBB exercised multiple options on the two contracts to extend their period of performance into 2008. Only recently has it taken steps to identify additional providers. OCB's practices for soliciting, evaluating, and selecting its talent contractors provide limited visibility at key steps. OCB issues quarterly announcements in Federal Business Opportunities, advertises annually in a local newspaper, and posts announcements at OCB's headquarters. OCB does not require, however, that managers document instances in which resumes were received from sources outside these processes, such as when a contractor is recommended by an OCB employee. Further, OCB does not document why other potential providers were not selected as required by IBB's guidance, in part due to questions about how to meet this requirement. Lastly, OCB managers use an IBB handbook to justify how much it pays for talent services, but the usefulness of the handbook's pricing guidance may be limited as the recommended rates are not current or based on the local market.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: BBG's Office of Cuba Broadcasting revised procurement procedures and documentation requirements to require that all potential service providers' resumes be centrally submitted to the Office of Administration, which will review the resumes and make them available to all managers for award consideration. These revised procedures also require that managers document that at least three service providers were considered before making an award, and the rationale for selecting the provider.

    Recommendation: With respect to improving IBB's guidance governing contracts for talent services, the Broadcasting Board of Governors should direct IBB to clarify requirements in IBB's Contracting for Talent and Other Professional Services Handbook on the receipt and evaluation of resumes and ensure that OCB's practices are consistent with IBB's guidance.

    Agency Affected: Broadcasting Board of Governors

  2. Status: Closed - Implemented

    Comments: In July 2012, Broadcasting Board of Governors identified three of five TV broadcasting contracts that International Broadcasting Bureau (IBB) awarded competitively between July 2010 and July 2012. Based on this, IBB is competitively awarding TV broadcasting contracts.

    Recommendation: To better inform acquisition decisions, improve transparency, and ensure that competition is effectively utilized, the Broadcasting Board of Governors should direct IBB to plan for full and open competition on any future contracts for radio and television broadcasting services that exceed the simplified acquisition threshold.

    Agency Affected: Broadcasting Board of Governors

  3. Status: Closed - Implemented

    Comments: BBG issued guidance to reinforce the requirement to notify the contracting officer of office requirements prior to soliciting sources or initiating contract negotiations, to ensure that the advanced acquisition planning, market research, and competition required by law are conducted.

    Recommendation: To better inform acquisition decisions, improve transparency, and ensure that competition is effectively utilized, the Broadcasting Board of Governors should direct IBB to reinforce existing policy for its programming staff to involve contracting personnel at the earliest possible time during the acquisition planning stage.

    Agency Affected: Broadcasting Board of Governors

  4. Status: Closed - Implemented

    Comments: BBG issued guidance to reinforce critical acquisition requirements, including the need to ensure acquisition files are documented with all information and assumptions supporting key decision factors. The guidance also noted that acquisition files must show evidence of competition or appropriate written justification for other than full and open competition.

    Recommendation: To better inform acquisition decisions, improve transparency, and ensure that competition is effectively utilized, the Broadcasting Board of Governors should direct IBB to reinforce existing requirements to fully document information and assumptions supporting key decisions, such as when awarding contracts using other than full and open competition.

    Agency Affected: Broadcasting Board of Governors

  5. Status: Closed - Implemented

    Comments: IBB revised its handbook to direct managers to not use the pricing guidance to determine fair and reasonable rates for talent services and that it should be only be used for budgetary and planning purposes. The handbook now advises that payments for contractor services should be based on the nature of the assignment, the expertise of the contractor, and budgetary constraints. Finally, to help determine a fair rate, the handbook suggests that the internet may be used to obtain information on recent salaries paid within the geographic locations the contractor will be operating.

    Recommendation: With respect to improving IBB's guidance governing contracts for talent services, the Broadcasting Board of Governors should direct IBB to determine how the pricing guidance in IBB's handbook could better meet users' needs as part of its planned revision to the handbook.

    Agency Affected: Broadcasting Board of Governors

 

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