Potential for Savings and Improvements Needed in DOE Contracting for Moving and Storage Services

PSAD-80-26: Published: Feb 20, 1980. Publicly Released: Feb 20, 1980.

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The Department of Energy's (DOE) use of contracts for office moving and storage services in the Washington, D.C., area was reviewed as part of a Government-wide review of contracting for these services to determine if pertinent regulations and procedures were being followed, reasonable prices were being paid, and adequate internal controls existed. Federal property management regulations provide that the General Services Administration (GSA) will award term moving contracts for use by Government agencies for moves estimated to cost $5,000 or less. The term moving contract permits agencies without definite moving requirements to obtain services on an as needed basis. At DOE's request GSA competitively awarded a term moving contract to meet the agency's normal daily moving service requirements in the Washington, D.C., area. This contract was an indefinite quantity-type contract for a period of 1 year, and the actual labor hours used were to be paid at the rates specified in the contract. At the time of the award, the estimated costs to be incurred over the life of the contract were $600,000. The contract was intended to cover small cost moves only, and the total value of any single order placed under this contract was not to exceed $5,000. For each move estimated to exceed $5,000, DOE was required to either competitively award a contract to meet its specific needs or to request GSA to award such a contract on its behalf.

In reviewing the contracts awarded by GSA on behalf of DOE, GAO found: that while the term-moving contract was to be used for moves costing $5,000 or less, DOE used it for moves costing more than $28,000; that DOE had improperly used moving contractor employees to work in DOE self-service supply stores and as office personnel; that DOE had inadequate control over its contract actions, and thus had little or no assurance that the moving services paid for were needed, effectively used, or obtained; that one contractor had been used to store DOE office furniture since 1976 without a written contract and this may effect DOE insurance claims against the contractor for the value of furniture lost in a fire; that DOE may have paid excessive prices on two contracts awarded for storage and transporting services as one contractor had used an alternative contractor whose less favorable pricing arrangement lacked incentives to be efficient or control costs, and the other contractor had been initiated on an oral agreement, awarded a noncompetitive contract 5 months after the storage service began, and entered into a rental agreement with DOE; and that DOE had relied on storage contractors to maintain inventory records. GAO believes that corrective actions are needed to eliminate the serious weaknesses in controls, to prevent further payment of premium prices, and to restore integrity to the procurement of these services. Further, that DOE actions pertaining to the use of contracted moving and storage services had not adequately protected the Government's interests.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: GAO recommended that DOE officials be required to: (1) establish controls to insure compliance with Federal regulations or establish procurement practices and procedures; (2) eliminate costly misuse or abuse of the GSA term moving contract and assure that any future moving contracts be used as intended for moving and transportation services of a small scale, not to circumvent personnel ceilings; (3) require all moves of large numbers of DOE personnel to be contracted for on an advertised, fixed-price basis; (4) make special efforts to group any small moves into large moves to take advantage of the price savings offered by the advertised, fixed-price contracts; (5) establish adequate internal controls over the present and any future moving service contracts by requiring documented justification for services required, independent sign-in and sign-out sheets for contractor employees, and separation of duties to ensure that different DOE officials are responsible for ordering, monitoring, and certifying services; (6) require discounts to be taken on the current and any future moving contracts offering discounts; (7) establish and maintain continuous inventory control and accountability for all warehoused office furniture; (8) reassess DOE storage space needs, considering such factors as the realistic furniture inventory level needed and the costs of carrying such inventory; and (9) actively pursue the reimbursement claim for the value of furniture lost in a contractor's fire.

    Agency Affected:

 

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