State Department Inspector General criticizes agency's contract management

by Ben Vernia | April 7th, 2014

On March 31, the Inspector General for the State Department issued a management report identifying numerous deficiencies in the Department’s contract management. Among his findings:

  • 20% of audited contract files for Iraq projects could not be located; another 42% lacked required documentation (each of these deficient categories were values at $2.1 billion in contracts);
  • Contracting officer’s representatives for the Bureau of African Affairs were unable to provide complete files for any of the eight audited contracts (valued at nearly $35 million);
  • Joint audits with other agencies revealed similar problems in Afghanistan and security contracts;
  • In a contract valued at $52 million, its file lacked documentation that modifications and change orders had been awarded to a company owned by the spouse of the contract specialist (also a contractor) managing the contract for the Department;
  • A $100 million contract’s file was concealed by its contracting officer, who had falsified government technical review information and provided the contractor with pricing data;
  • A contractor received nearly $800,000 even though the file lacked documents needed to support the payment.

The Inspector General recommended that the State Department take action to tighten its compliance with the Federal Acquisition Regulations’ requirements, writing:

The failure to enforce those requirements exposes the Department to significant financial risk and makes OIG oversight more difficult. It creates conditions conducive to fraud, as corrupt individuals may attempt to conceal evidence of illicit behavior by omitting key documents from the contract file. It impairs the ability of the Department to take effective and timely action to protect its interests, and, in tum, those oftaxpayers. Finally, it limits the ability ofthe Government to punish and deter criminal behavior.

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