Forest Service:

Weak Contracting Practices Increase Vulnerability to Fraud, Waste, and Abuse

RCED-98-88: Published: May 6, 1998. Publicly Released: Jun 5, 1998.

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Pursuant to a congressional request, GAO reviewed whether: (1) the Forest Service maintains an appropriate system of internal control over contracting activities to minimize the agency's vulnerability to fraud, waste, and abuse; (2) the Forest Service manages contracting effectively by preparing adequate acquisition plans and by incorporating performance factors into the contracting process; and (3) there are any obstacles to improving the contracting system.

GAO noted that: (1) the Forest Service is highly vulnerable to fraud, waste, and abuse because it does not have an effective system of internal control for its contracting activities; (2) the agency's internal control system is lacking in two key respects; (3) the Forest Service is not complying with many critical internal control standards; (4) namely, the agency: (a) has no written plan defining control objectives and techniques; (b) lacks complete documentation in the contract files of critical contract award and administration actions; (c) does not routinely supervise contracting staff; (d) inconsistently monitors contractors' progress; and (e) has significant errors and omissions in its management information system for contract actions; (5) the Forest Service's primary internal control techniques are not effectively implemented; (6) the Forest Service is not preparing adequate acquisition plans or incorporating performance factors into its contracting process; (7) the Federal Acquisition Regulation requires agencies to prepare acquisition plans to enhance contracting's effectiveness and lower costs; (8) the six Forest Service offices that GAO visited either had no acquisition plans for fiscal year 1996 or could not make effective use of the ones that they had because the plans were incomplete or not completed on time; (9) also, the Forest Service's contracts for services seldom require contractors to meet preestablished performance goals, a technique that other federal agencies have used to save costs; (10) furthermore, the Forest Service does not routinely evaluate contractors' performance or effectively store past performance information so it can be used in negotiating future contracts; (11) finally, the Forest Service has not implemented procurement performance measures to evaluate and improve the procurement system; (12) three primary obstacles stand in the way of improving the Forest Service's procurement system; (13) Forest Service officials have not been aggressive in establishing an effective internal control system or implementing information management initiatives that could improve their contracting's effectiveness; (14) when the Forest Service tries to improve its contracting practices, the organizational structure of the contracting function impedes these efforts by limiting direct accountability; and (15) the Forest Service's long-standing culture of local independence and autonomy appears to make contracting managers hesitant to provide the close oversight of contracting activities needed to hold staff accountable for performance improvement.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Forest Service has completed its response for this recommendation.

    Recommendation: To improve the effectiveness and reduce the cost of contracting, the Secretary of Agriculture should direct the Chief of the Forest Service to develop a format for capturing data on contractors' past performance for service contracts and a strategy for effectively maintaining these data.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: The Forest Service has completed its response for this recommendation.

    Recommendation: To improve the effectiveness and reduce the cost of contracting, the Secretary of Agriculture should direct the Chief of the Forest Service to increase the use of performance-based service contracts by providing all contracting staff with training and direction on the mechanics of developing and awarding performance-based contracts, establishing annual goals for their use, and periodically monitoring actual usage.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: The Forest Service has completed its response for this recommendation.

    Recommendation: To improve the effectiveness and reduce the cost of contracting, the Secretary of Agriculture should direct the Chief of the Forest Service to hold regional contracting managers responsible for ensuring that regional and national forest offices prepare advance acquisition plans that are on time and contain complete information on contracting needs.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Not Implemented

    Comments: USDA is still planning to develop an agency wide automated procurement system which would include advance acquisition planning capability. However, after some basic system testing, USDA found the system did not meet security requirements. As a result, USDA has started over on system design. USDA plans to solicit bids for system development and pilot test the new system in 2002 with initial implementation in 2003.

    Recommendation: To improve acquisition planning, the Secretary of Agriculture should continue the Department's efforts to develop and implement a more effective departmentwide automated advance acquisition planning process.

    Agency Affected: Department of Agriculture

  5. Status: Closed - Implemented

    Comments: The Forest Service has completed its response for this recommendation.

    Recommendation: Effective internal control is essential to safeguarding government assets and to conducting government business with full accountability. To improve compliance with the Federal Managers Financial Integrity Act (FMFIA) and GAO's standards for internal control, the Secretary of Agriculture should direct the Chief of the Forest Service to ensure that the Forest Service's internal control system for contracting is identified as a material weakness in the Department's FMFIA report.

    Agency Affected: Department of Agriculture

  6. Status: Closed - Implemented

    Comments: The Forest Service has completed its response for this recommendation.

    Recommendation: Effective internal control is essential to safeguarding government assets and to conducting government business with full accountability. To improve compliance with the Federal Managers Financial Integrity Act and GAO's standards for internal control, the Secretary of Agriculture should direct the Chief of the Forest Service to establish a system to periodically monitor and assess compliance with internal control standards.

    Agency Affected: Department of Agriculture

  7. Status: Closed - Implemented

    Comments: The Forest Service has completed its response for this recommendation.

    Recommendation: Effective internal control is essential to safeguarding government assets and to conducting government business with full accountability. To improve compliance with the Federal Managers Financial Integrity Act and GAO's standards for internal control, the Secretary of Agriculture should direct the Chief of the Forest Service to prepare and implement a written internal control plan for contracting that includes methods for ensuring: (1) the complete documentation of critical actions in contract files; (2) the routine supervisory review of contracting activities; (3) more consistent monitoring of contractors' progress on service contracts through the implementation of a training and certification program for contracting officers' representatives; (4) improved summary management information; and (5) clarification of how to determine adequate warrant authority for various types of contracts.

    Agency Affected: Department of Agriculture

  8. Status: Closed - Implemented

    Comments: The Forest Service has completed its response for this recommendation.

    Recommendation: To improve the effectiveness and reduce the cost of contracting, the Secretary of Agriculture should direct the Chief of the Forest Service to implement the performance measures for the procurement system established by USDA by, at a minimum, collecting baseline data on current performance and defining annual, measurable goals for improvement for each measure.

    Agency Affected: Department of Agriculture

 

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