Resolution Trust Corporation:

Additional Monitoring of Basic Ordering Agreements Needed

GGD-93-107: Published: Sep 13, 1993. Publicly Released: Oct 14, 1993.

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Pursuant to a congressional request, GAO reviewed whether the Resolution Trust Corporation (RTC) has established and implemented internal controls to detect abuses of basic ordering agreements (BOA) and other types of contracts, focusing on RTC efforts to: (1) conduct fair competition for task order contracts awarded under BOA; and (2) monitor its contracting process.

GAO found that: (1) RTC contracting procedures contain little guidance on what constitutes adequate competition for task order contracts; (2) in May 1992, RTC revised its contracting manual to increase contracting staff flexibility in determining the extent of competition for task order contracts, but it failed to provide requirements that staff determine whether contractor selection methods are fair and consistent; (3) many task order contracts do not receive management reviews and approvals as required; (4) task order contracts are issued without provisions to protect the government's interests; and (5) the Contract Activity Reporting System (CARS) lacks essential information that RTC needs to monitor compliance with contracting policies and procedures.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: RTC, in its August 25, 1994 response, stated that it had implemented this recommendation by establishing the Competition Advocacy Program. GAO disagrees. The conclusions of the GAO report recognized the establishment of this program. Accordingly, the recommendation was written to require RTC to demonstrate that this program has been effective in correcting the problems noted in the report's findings. RTC has not demonstrated the program's effectiveness. Because of the late date in RTC's operations and the decrease in contracting activities, GAO believes that it is unlikely that RTC will take further action to implement the recommendation. GAO therefore believes that the recommendation should be closed.

    Recommendation: The President and Chief Executive Officer, RTC, should monitor the contracting program changes, including the implementation of the 10-point program, to ensure that they provide effective controls for: (1) obtaining management reviews and approvals; (2) monitoring the extent of competition for task order contracts; (3) preventing deficiencies in the contractor selection process; and (4) protecting the government's financial interests.

    Agency Affected: Resolution Trust Corporation

  2. Status: Closed - Implemented

    Comments: In a letter dated August 23, 1994, RTC stated that it implemented this recommendation. GAO disagrees. RTC has taken action to ensure data entered into CARS are complete and accurate. However, RTC has not fully implemented the part of the recommendation that requires the system to provide additional data to oversee and manage the issuance of task orders. The system does not identify: (1) noncompetitive awards; (2) number of bidders; and (3) the frequency and impact of contract modifications. Because RTC will be terminating operations by December 31, 1995, GAO believes that it is unlikely that RTC will take further action to implement this recommendation because it would require a significant systems modification effort. Accordingly, GAO believes this recommendation should be closed.

    Recommendation: The President and Chief Executive Officer, RTC, should improve the RTC contracting information system, CARS, by: (1) ensuring that the data entered are complete and accurate; and (2) including additional information to help managers monitor field office contracting practices. Specifically, the system should identify noncompetitive awards, numbers of bidders, and the frequency and impact of contract modifications.

    Agency Affected: Resolution Trust Corporation

 

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