Job Corps Should Stop Using Prohibited Contracting Practices and Recover Improper Fee Payments

HRD-82-93: Published: Jul 2, 1982. Publicly Released: Jul 2, 1982.

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GAO conducted a survey of the Department of Labor's Job Corps contract administration.

The Job Corps Regional Offices seemed to be administering contracts for center operations on the basis of cost-plus-percentage-of-cost rather than cost-plus-fixed-fee. However, Federal law prohibits the cost-plus-percentage-of-cost system of contracting. Out of 74 contracts administered, at least 39 were identified that seemed to have been treated as percentage-of-cost contracts or as having had the fee increased without corresponding changes in the scope of the work. Examples of the latter were found in all 10 Job Corps regions. Use of the percentage-of-cost system appeared to result from a misunderstanding of Federal regulations by regional contracting officials. These misunderstandings were attributed by some officials to a lack of properly trained contracting personnel. Although officials have been aware of the fee problem for over a year, they have not taken any corrective action.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Acting Director of the Office of the Job Corps should be directed to recover prohibited fee increases on all current contracts.

    Agency Affected: Department of Labor: Employment and Training Administration

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Job Corps should review all expired contracts which have not been closed out to identify the amount of prohibited fee increases, if any, and steps taken to recover these fees.

    Agency Affected: Department of Labor: Employment and Training Administration

 

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