U.S. Synthetic Fuels Corporation's Contracting Policies and Practices for Consulting Services

RCED-85-162: Published: Aug 15, 1985. Publicly Released: Sep 16, 1985.

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In response to a congressional request, GAO provided information on the U.S. Synthetic Fuels Corporation's (SFC) contracting policies and practices for consulting services.

After a GAO report, SFC revised its procurement policy and determined that: (1) contracting for individual consultant contracts does not require competition; and (2) cost analyses are necessary only when a contract involves significant costs, and they do not override other considerations. From October 1, 1983, to April 30, 1985, SFC awarded 43 contracts to individual consultants on a sole-source basis and 36 contracts with consulting firms on either a competitively negotiated basis or a noncompetitive basis. GAO found that federal procurement regulations which require a written justification for sole-source procurements costing $25,000 or more do not apply to SFC. In addition, SFC does not require written documentation that a cost comparison has been completed prior to awarding contracts and does not provide guidance on how a comparison should be performed. GAO found no evidence that a cost comparison had been done on any of the contracts awarded. Although contract monitors interact with consultants on a frequent basis monitoring contract performance, contractor payments, and quality control, SFC does not require contract monitors to file written status reports. However, consultant contracts contain reporting requirements. SFC pays consultants on the basis of either negotiated daily or hourly fees or a negotiated fixed total contract fee. Finally, GAO found that SFC reimburses consultants for reasonable and necessary travel expenses.

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