Need To Improve Administration of a Carcinogen Testing and Carcinogenesis Research Contract

HRD-78-44: Published: Feb 10, 1978. Publicly Released: Feb 10, 1978.

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In May 1973 the National Cancer Institute (NCI) renewed, for 18 months, a sole-source contract with the Eppley Institute for cancer research. Since the $3.4 million renewal, the contract has been modified several times so that, as of November 1977, 36 months and $9.4 million have been added to the contract period and cost. NCI awarded a 1-year, $3.6 million extension to the contract in November 1977.

In renewing the contract, NCI used an ad hoc group to make technical reviews of the proposal rather than the standing committees chartered for this purpose. Recommendations were apparently disregarded in negotiating the scope and amount of the contract, and justification for noncompetitive procurement was not based totally on facts. Problems identified in contract administration and performance were: contract monitoring was ineffective; the contractor did not fulfill reporting obligations; Eppley officials carried out and financed 11 projects with contract funds without obtaining initial formal approval; Eppley made charges to contract funds for personnel, laboratory animals, supplies and equipment which were not used for contract work or were not adequately controlled; and Eppley received approval to refurbish its breeding facility which was breeding more animals than were needed for research. Eppley has taken some action to reimburse the contract for noncontract costs. A review of the contract by the Department of Health, Education, and Welfare (HEW) Audit Agency is under way.

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