Civilian Agency Procurement:

Improvements Needed in Contracting and Contract Administration

GGD-89-109: Published: Sep 5, 1989. Publicly Released: Oct 27, 1989.

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Pursuant to a congressional request, GAO examined 87 contracts worth a total of about $1.4 billion at the Departments of Education, Energy, Health and Human Services, and Housing and Urban Development, focusing on how well the agencies administered large contracts.

GAO found that: (1) 16 of the contracts had planning or specifications deficiencies, which delayed delivery, increased costs, or resulted in incomplete deliveries; (2) the agencies' use of cost-plus-fixed-fee contracts for 33 repetitive requirements was questionable, since that type of contract provided minimal performance and cost control incentives; (3) the agencies awarded nine contracts before they were ready to have the contractors commence performance; (4) eight contracts had defective work statements, specifications, or clauses; (5) contract administration deficiencies in 50 contracts increased contract costs, delayed contract completion, or circumvented internal control procedures in the contracting process; and (6) program offices hindered contractor performance on 27 contracts and exceeded their authority on 12 contracts by directing work beyond the original requirements, while contracting officers extended 10 service contracts and modified 21 contracts after their completion dates, resulting in improper sole-source procurements.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: On March 15, 1991, OFPP issued a policy letter to civilian agency procurement executives reemphasizing the need for contract planning; clearing defining requirements in specifications and statements of work; complying and adhering to contract terms; and proper use of contract modifications. The letter also provided contract administration guidelines for civilian agencies.

    Recommendation: The Administrator, Office of Federal Procurement Policy (OFPP), should encourage civilian agencies to strengthen their contracting practices. Specifically, OFPP should work together with the heads of civilian agencies and initiate a concerted effort to improve civilian agency contracting and contract administration. Weaknesses that should be addressed by this effort include: (1) planning contracts; (2) writing specifications and statements of work; (3) using cost-plus-fixed-fee contracts for repetitive requirements; (4) hindering contractor performance by failing to comply with contract terms; (5) exceeding authority when program officers direct contractors to do work not covered by the contract; (6) extending contract completion dates because of poor planning for replacement contracts; (7) modifying contracts that have expired; and (8) monitoring contracts and communication between program and contracting officers.

    Agency Affected: Executive Office of the President: Office of Management and Budget: Office of Federal Procurement Policy


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