Stronger Controls Needed Over Federal Agency Contracting for Moving and Labor Services

PSAD-80-76: Published: Sep 29, 1980. Publicly Released: Sep 29, 1980.

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GAO reviewed General Services Administration (GSA) and other agency moving and labor service contracts in the Washington, D.C., area. Although GSA can award moving contracts to meet agencies' needs, many agencies choose to contract their own, often resulting in higher prices. Agencies predominantly use indefinite quantity, labor-hour contracts to meet moving and labor service requirements. Payments under these contracts are made based on contractor labor hours furnished at fixed rates, which include the contractor's labor costs, overhead, and profit. When this type of contract is used, it is essential that agencies provide for adequate control over the contract to assure that services are performed efficiently.

GAO found that agency control over contract actions under the labor-hour contracts was very weak. GAO estimated that almost $150,000 in possible discounts were lost at three agencies. GAO found that fixed-price contracts showed the greatest savings potential for specific office relocations. The manner in which agencies used moving and labor service contracts suggested the existence of improper personal service contracts. Contractors furnished laborers daily to agencies, and government personnel provided direction and supervision of the laborers. The consistent and extensive use of contract laborers by some agencies indicates that these agencies may have used the moving and labor service contracts to circumvent personnel ceilings. Improvements in control and management over labor-hour contracts are needed to ensure that only needed services are procured; contract provisions are enforced; and the potential for misuse, fraud, and abuse is eliminated.

Recommendations for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator of GSA should expedite implementation of the proposed change to the federal property management regulations, requiring mandatory use of GSA contracts for office relocation services. He should award all office relocation contracts for large numbers of agency personnel and, where feasible, any smaller office relocations on a fixed-price basis. He should establish procedures to monitor agency use of office relocation contracts, emphasizing the need for spot checks to assure that agencies are using the labor-hour contracts as intended, providing for adequate control and management over contract actions, and adhering to contract provisions.

    Agency Affected:

  2. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretaries of the Departments of Treasury, Labor, Interior, Energy, and Agriculture, the Attorney General, the Administrator of the Environmental Protection Agency, and the Director of the National Science Foundation should, where appropriate, place greater emphasis of defining requirements for moving labor services so that fixed-priced contracts can be awarded. The should establish procedures to prevent or eliminate the misuse of GSA moving service contracts. They should establish adequate internal controls and contract management over present and future labor-hour moving service requirements to provide for, as a minimum: (1) documented justification for services required, such as daily workload requirements with estimates of the number of people needed to satisfy the requirement; (2) independent records of daily contractor-furnished hours to be maintained by agency personnel; and (3) separation of duties to ensure that different agency personnel are responsible for ordering, monitoring, and certifying services. They should require discounts to be taken on current and future moving contracts offering discounts.

    Agency Affected:


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