Inspectors General:

Contracting Actions By Treasury Office of Inspector General

OSI-98-1: Published: Oct 31, 1997. Publicly Released: Oct 31, 1997.

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Pursuant to a congressional request, GAO reviewed the award of a sole-source contract to Sato & Associates for a management study of the Department of the Treasury's Office of Inspector General (OIG) and of a consulting services contract to Kathie M. Libby, doing business as KLS, using other than full and open competition. GAO also reviewed the nature and purpose of trips to California made by Treasury Inspector General (IG) Valerie Lau since her appointment.

GAO noted that: (1) shortly after her confirmation as Inspector General, Ms. Lau notified the Treasury Procurement Services Division (PSD) that she wanted Sato to perform a management review; (2) PSD awarded a sole-source management study contract to Sato on the basis of unusual and compelling urgency; (3) although Ms. Lau stated that the need to limit competition was urgent because of the need to make reassignments in the senior executive ranks and to marshal the resources needed to conduct audits, there was insufficient urgency to limit competition; (4) the price of Sato's contract for the Treasury OIG effort appears to be artificially high, in light of the fact that the firm performed a similar review of the Department of the Interior OIG for approximately $62,000 less; (5) in September 1995 PSD awarded a time-and-materials, consulting services contract to Libby to review and analyze an Office of Personnel Management (OPM) report on morale and diversity problems in the OIG office and assist OIG managers and staff concerning goals identified in the OPM study; (6) the contract was awarded on the basis of unusual and compelling urgency following limited competition; (7) the justification for limiting competition was not reasonable, since Ms. Lau could still have conveyed to her managers that the problems identified in the OPM study would be addressed and corrected those problems, had the consultant selection been delayed a few months to obtain full and open competition; (8) the largest modification made to the KLS contract was outside the scope of the contract and should have been obtained through a separate, competitive procurement; (9) GAO identified a pattern of careless management in the procurement process and in oversight of performance under the KLS contract; (10) OIG failed to fully understand and articulate its needs, resulting in a fourfold increase in the contract's total price and a 1-year extension to the period of performance; (11) OIG paid for work that was not authorized, and payments were made without verification that work had been done and without determining that travel and transportation costs documents had been received; and (12) all five of Ms. Lau's trips to California made between September 1994 and February 1997 were scheduled for work-related reasons.

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