An Immigration and Naturalization Service (INS) contract with J. A. Reyes Associates, Inc., for a residential survey of illegal aliens was reviewed. The Reyes contract initially amounted to $751,000, and it was later modified to include about $80,000 for research on the impact of illegal aliens on social service programs. Reyes Associates' price proposal was neither the highest nor the lowest of the seven firms responding to the solicitation. The contracting officer awarded the contract to Reyes Associates without making a detailed preaward, line-item cost analysis of Reyes' estimated costs. Extensive mathematical errors were later found in Reyes' cost estimates, but the contracting officer could find no documentation showing that these discrepancies had been detected and resolved before or after awarding the contract. A number of causes for the extensive delays involved in the contract were noted, but delays may have been inherent in the brief timeframe set forth in the contract. Additional costs have been incurred by revisions to the contract and by work done outside the scope of the contract. To date, Reyes' has been paid about $59,000 for work it claims was outside the contract's scope; INS is contesting about $14,000 of those costs. In view of the contract's complexity, large dollar amount, and problems encountered, an interim audit of the contractor's costs is desirable.
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