Pension Benefit Guaranty Corporation:

Contract Management Needs Improvement

T-HEHS-00-199: Published: Sep 21, 2000. Publicly Released: Sep 21, 2000.

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Pursuant to a congressional request, GAO discussed the Pension Benefit Guaranty Corporation's (PBGC) management of its contracting responsibilities, focusing on: (1) the basis for PBGC's decisions regarding the use of contractors versus government personnel to address its workloads; (2) PBGC's processes and procedures for selecting contractors; and (3) how effective PBGC has been in monitoring the performance of its contractors.

GAO noted that: (1) PBGC's contracting decisions and its organizational field structure have been heavily influenced by the need to service rapidly increasing workloads within existing federal staffing limitations; (2) because PBGC's focus was on obtaining needed staff quickly, it has not linked its contracting decisions to workload trends or strategic planning considerations and could be unprepared for future work environment changes; (3) GAO also identified weaknesses in PBGC's procurement planning and execution processes; (4) in particular, PBGC's consolidation of three formerly separate field office services procurements was not supported by a sound business rationale and may have limited competition; (5) for several other field office procurements, PBGC should have done more to stimulate competition by conducting market research to identify additional potential offerors; (6) in reviewing several other contracts, GAO identified additional weaknesses, including the need for PBGC to better document its basis for contractor awards and use more fixed-price rather than labor-hour contracts, which carry more cost and quality assurance risks; and (7) GAO also identified contractor oversight problems, including a lack of centralized data essential to monitoring contractor performance and deficiencies in PBGC's quality assurance review process.

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