Report Contents
What OIG Audited
The Department of State (Department) provides life support services, including food and water, to personnel working in Iraq through Baghdad Life Support Services (BLiSS) food services task order SAQMMA14F0721. The Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management (A/LM/AQM), awarded the BLiSS food services task order on March 1, 2014.
The Office of Inspector General (OIG) conducted this audit to determine whether (1) A/LM/AQM established, implemented, and held the contractor accountable for complying with cost controls during the life of task order SAQMMA14F0721 and (2) A/LM/AQM and the Bureau of Near Eastern Affairs (NEA) held the contractor accountable for complying with its cost control plan. In March 2018, OIG issued AUD-MERO-18-31, which addressed the first objective. This report communicates OIG’s findings regarding the second objective.
What OIG Recommends
OIG made four recommendations intended to improve the administration and oversight of current and future food services contracts. NEA concurred with one recommendation, which is resolved pending further action. The Bureau of Administration, Office of the Procurement Executive, Office of Acquisition Management (A/OPE/AQM), nonconcurred with three recommendations. On the basis of A/OPE/AQM’s responses and proposed actions, one is resolved pending further action and two are unresolved. A synopsis of management’s comments follows each recommendation in the Audit Results section of this report. A/OPE/AQM’s and NEA’s responses to a draft of this report are reprinted in Appendices C and D, respectively.
What OIG Found
In March 2018, OIG reported that the Department established, but did not effectively implement, four cost controls under BLiSS food services task order SAQMMA14F0721. The Contracting Officer partially implemented one of four contractually established cost controls but did not implement the other three. For example, plans to convert BLiSS food services from a costreimbursement to a fixed-price task order and to implement a point-of-sale cafeteria system were not implemented. Furthermore, a requirement to limit the number of Department-subsidized meals for individuals who do not live on Department posts in Iraq was not implemented. That report addressed objective 1 of the audit and offered 14 recommendations.
With respect to this report and the second audit objective, OIG found that A/LM/AQM and NEA did not hold PAE accountable for complying with its cost control plan. This occurred, in part, because the BLiSS food services inspection checklist used by contract oversight personnel in Iraq only included steps for monitoring one of seven elements contained in PAE’s cost control plan. OIG therefore concludes that contracting personnel did not fulfill their obligations to safeguard the interests of the Department and the public. Moreover, the annual assessments of PAE’s cost control efforts were ineffectual.
In addition, OIG found that the Contracting Officer assigned to the BLiSS contract did not comply with the Federal Acquisition Regulation when definitizing the BLiSS food services task order. Specifically, the Contracting Officer did not definitize the option years within the 180-day maximum definitization date, exceeding that requirement by 761 days for option year 1,368 days for option year 2, and 31 days for option year 3. In response to a July 2016 OIG report describing the Department’s challenges in definitizing contracts supporting operations in Iraq, A/LM/AQM issued a directive that established a tracking system to foster timely definitization. Because this problem nonetheless persists, OIG recommends that the Department revisit this issue to determine why the Contracting Officer did not comply with the definitization requirement and implement a corrective action plan.
Report Terms
Report Recommendations
OIG recommends that the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, (a) direct the Contracting Officer’s Representative for Baghdad Life Support Services (BLiSS) food services task order SAQMMA14F0721 to update, within 30 days, the BLiSS food services inspection checklist to include steps for monitoring and documenting the contractor’s compliance with all required elements of its cost control plan and (b) verify that the checklist has been updated and implemented.
OIG recommends that the Bureau of Near Eastern Affairs incorporate requirements for food services cost controls and a contractor cost control plan into the new worldwide support services contract and develop an acquisition plan that addresses their implementation and comprehensive oversight.
OIG recommends that the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, assess the cause(s) of Contracting Officer noncompliance with definitization requirements—established in Federal Acquisition Regulation 16.603 and Memorandum 17–01, “Definitization of Letter Contracts/Undefinitized Contract Actions (UCA)” —and develop and implement a corrective action plan to prevent and deter future noncompliance.
OIG recommends that the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, update Memorandum 17-01, “Definitization of Letter Contracts/Undefinitized Contract Actions (UCA),” to outline administrative actions to be taken against Contracting Officers if they do not comply with Federal regulations and Department policy for timely definitization of letter contracts.