Potential for Savings and Improvements Needed in DOE Contracting for Moving and Storage Services

PSAD-80-26: Published: Feb 20, 1980. Publicly Released: Feb 20, 1980.

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The Department of Energy's (DOE) use of contracts for office moving and storage services in the Washington, D.C., area was reviewed as part of a Government-wide review of contracting for these services to determine if pertinent regulations and procedures were being followed, reasonable prices were being paid, and adequate internal controls existed. Federal property management regulations provide that the General Services Administration (GSA) will award term moving contracts for use by Government agencies for moves estimated to cost $5,000 or less. The term moving contract permits agencies without definite moving requirements to obtain services on an as needed basis. At DOE's request GSA competitively awarded a term moving contract to meet the agency's normal daily moving service requirements in the Washington, D.C., area. This contract was an indefinite quantity-type contract for a period of 1 year, and the actual labor hours used were to be paid at the rates specified in the contract. At the time of the award, the estimated costs to be incurred over the life of the contract were $600,000. The contract was intended to cover small cost moves only, and the total value of any single order placed under this contract was not to exceed $5,000. For each move estimated to exceed $5,000, DOE was required to either competitively award a contract to meet its specific needs or to request GSA to award such a contract on its behalf.

In reviewing the contracts awarded by GSA on behalf of DOE, GAO found: that while the term-moving contract was to be used for moves costing $5,000 or less, DOE used it for moves costing more than $28,000; that DOE had improperly used moving contractor employees to work in DOE self-service supply stores and as office personnel; that DOE had inadequate control over its contract actions, and thus had little or no assurance that the moving services paid for were needed, effectively used, or obtained; that one contractor had been used to store DOE office furniture since 1976 without a written contract and this may effect DOE insurance claims against the contractor for the value of furniture lost in a fire; that DOE may have paid excessive prices on two contracts awarded for storage and transporting services as one contractor had used an alternative contractor whose less favorable pricing arrangement lacked incentives to be efficient or control costs, and the other contractor had been initiated on an oral agreement, awarded a noncompetitive contract 5 months after the storage service began, and entered into a rental agreement with DOE; and that DOE had relied on storage contractors to maintain inventory records. GAO believes that corrective actions are needed to eliminate the serious weaknesses in controls, to prevent further payment of premium prices, and to restore integrity to the procurement of these services. Further, that DOE actions pertaining to the use of contracted moving and storage services had not adequately protected the Government's interests.

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