ADP Procurements:

Food and Drug Administration Circumvented Procurement Regulations

IMTEC-87-48: Published: Sep 11, 1987. Publicly Released: Oct 9, 1987.

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In response to a congressional request, GAO reviewed allegations of improper computer procurements by the Food and Drug Administration (FDA).

GAO found that: (1) FDA split one procurement into 11 smaller procurement requests to circumvent both the maximum order and dollar limitations for General Services Administration (GSA) schedule contracts; (2) the Department of Health and Human Services (HHS) did not detect the error; (3) FDA circumvented procurement regulations requiring it to advertise for competitive bids; and (4) FDA failed to obtain HHS approval for the procurements, since they exceeded $150,000.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Although HHS did not withdraw the delegation of procurement authority, it did instruct FDA not to procure the equipment until FDA brought the acquisition strategy into compliance with GSA procurement regulations. FDA cancelled the procurement requisitions. As of June 1988, no further procurements in support of the project had been approved.

    Recommendation: The Secretary of Health and Human Services should withdraw the FDA delegation of procurement authority for the Import Data System project until FDA brings its acquisition strategy into compliance with GSA procurement regulations and guidelines.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: HHS conducts periodic acquisition management reviews to monitor contract offices' adherence to procurement regulations and procedures, including confirmation that procurements have not been fragmented. The next HHS review will pay particular attention to FDA acquisitions and review the controls initiated by FDA to prevent future fragmentation.

    Recommendation: The Secretary of Health and Human Services should review any other automatic data processing (ADP) procurements planned by FDA to ensure that they are in compliance with the applicable regulations and guidelines.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: HHS directed FDA to: (1) alter any internal guidance that might encourage a fragmentation, or discourage consolidation; (2) issue a memorandum warning components to fragment procurements or informally transmit requisitions; (3) circulate the GAO report; and (4) certify compliance with the requirements.

    Recommendation: The Secretary of Health and Human Services should direct FDA to establish ADP procurement guidelines that are consistent with applicable regulations and guidelines.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed - Implemented

    Comments: The HHS IRM program is under review and reformulation. One aspect of this effort is the establishment of a program of review and controls to ensure adherence to GSA and HHS regulations and guidelines.

    Recommendation: The Secretary of Health and Human Services should review HHS procedures for approving agency procurement requests for computer equipment to ensure that such procedures are in compliance with GSA regulations and HHS guidelines.

    Agency Affected: Department of Health and Human Services

 

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