Report Contents
What OIG Audited
The Department of State (Department) relies on contracts to provide essential support services to Mission Iraq including the Operations and Maintenance Support Services (OMSS) contract and the Baghdad Life Support Services (BLiSS) contract. The Department awarded the OMSS contract in 2012 and the BLiSS contract in 2013, both with a maximum period of performance of 5 years. In 2019, the Department awarded the Diplomatic Platform Support Services (DiPSS) contract that was intended to consolidate and replace the OMSS and BLiSS contracts. The Office of Inspector General (OIG) conducted this audit to determine whether the Department complied with Federal and Department requirements in performing acquisition planning and controlling costs associated with contract actions for the OMSS and BLiSS contracts while preparing for the transition to the DiPSS contract. OIG assessed documentation of the DiPSS contract milestones, forecasting, requirements, and cost controls. OIG also reviewed all 65 OMSS and BLiSS noncompetitive continuation of service contract actions, valued at approximately $663 million, and selected 14 of those actions, valued at more than $339 million, to review cost-control measures undertaken.
What OIG Recommends
OIG made eight recommendations to the Bureau of Administration to improve acquisition planning for high-dollar complex contracts and strengthen cost control measures when using noncompetitive contract actions to continue services. On the basis of the Office of Procurement Executive’s response to the recommendations offered, OIG considers all eight recommendations resolved, pending further action. A synopsis of management comments on the recommendations offered and OIG’s reply follow each recommendation in the Audit Results section of this report. Management’s response to a draft of this report is reprinted in Appendix D.
What OIG Found
The Department did not fully comply with Federal and Department requirements for acquisition planning while preparing for the transition of services to the DiPSS contract. Specifically, OIG found that ineffective acquisition planning resulted in forgoing requirements and caused delays in awarding the DiPSS contract. In addition, incomplete acquisition planning led to 65 noncompetitive contract actions to continue OMSS and BLiSS essential services. These shortfalls occurred, in part, because of poor coordination and the absence of internal controls within the acquisition planning process. As of May 2021, more than 2 years after the DiPSS contract was awarded, the Department has not issued any Iraq-specific competitive task orders under DiPSS and continued to noncompetitively extend the OMSS and BLiSS contracts. As a result, anticipated cost savings of competing task orders under the DiPSS contract have not been realized.
OIG also found that the Department noncompetitively continued OMSS and BLiSS contracts excessively, based on quantity, duration, and dollar value, and unjustifiably used a Federal Acquisition Regulation (FAR) exception for other than full and open competition. Specifically, the Department executed 65 noncompetitive contract actions that spanned approximately 3 years valued at approximately $663 million to continue OMSS and BLiSS services, citing “unusual and compelling urgency” under the FAR as justification. Instead, OIG found that poor planning, poor coordination, and a lack of internal controls necessitated the contract actions. OIG is therefore questioning the full value of the OMSS and BLiSS noncompetitive contract actions, approximately $663 million, because Federal law does not permit poor planning as justification for the use of noncompetitive contracts.
Furthermore, the Department did not fully control costs for the noncompetitive OMSS and BLiSS contract awards in accordance with Federal and Department requirements. Specifically, the Department did not complete independent government cost estimates or obtain required cost data from the contractor for any of the 14 contract actions reviewed for this audit. According to Department officials, this occurred because of time and resource constraints associated with awarding numerous contract actions. Nevertheless, the Department’s failure to complete independent government cost estimates or obtain relevant cost or pricing data from the contractor significantly diminished the Department’s ability to assess whether costs associated with the noncompetitive contract awards were valid and reasonable.
Report Terms
Report Recommendations
OIG recommends that the Bureau of Administration, in coordination with the Bureau of Near Eastern Affairs, discontinue its practice of awarding noncompetitive contracts for Operations Maintenance Support Services and Baghdad Life Support Services. The bureau should award Mission Iraq-specific task orders under the Diplomatic Platform Support Services contract or use an alternative mechanism to competitively replace the Operations and Maintenance Support Services and Bagdad Life Support Services contracts.
OIG recommends that the Bureau of Administration, Office of the Procurement Executive (OPE), in accordance with the Federal Acquisition Regulation 7.104 “General procedures,” disseminate procedures that are described in Office of Acquisition Management Memorandum 15-10 to review acquisition plans with key stakeholders annually or whenever significant changes occur. OPE should also establish additional internal controls to ensure the procedures are followed, such as training personnel on the requirements and minimum documentation requirements for acquisition plan reviews.
OIG recommends that the Bureau of Administration, Office of the Procurement Executive, in accordance with Government Accountability Office Standards for Internal Control in the Federal Government, establish procedures to conduct regular monitoring of internal controls, respond to schedule risks, and engage in effective communication with the program office to identify and address noncompliance with Federal and Department of State criteria, timeliness, and external coordination.
OIG recommends that the Bureau of Administration, Office of the Procurement Executive, implement controls to (a) achieve critical acquisition deadlines on time, including checking the acquisition’s progress and assessing changes in the operating environment and (b) identify contracts that have missed critical deadlines, including Diplomatic Platform Support Services, for Department of State (Department) leadership to review and take action as necessary. Controls should ensure that the Department prioritizes timely acquisitions to achieve cost savings, economies of scale, and efficiencies.
OIG recommends that the Bureau of Administration, in coordination with the Office of the Legal Adviser, review the $296,530,056 in questioned costs related to 29 noncompetitive contract actions to extend services on the Operations and Maintenance Support Services Contract, SAQMMA13D0120, between December 2018 and May 2021 to determine whether these costs were allowable. Specifically, the Office of the Legal Adviser should determine whether the justification to use the “unusual and compelling urgency” exception complies with the Competition in Contracting Act (41 U.S.C. §§ 3301, 3304) and the Federal Acquisition Regulation Subpart 6.1, “Full and Open Competition,” and 6.3, “Other than Full and Open Competition.” See Appendix B for an itemization of the costs.
OIG recommends that the Bureau of Administration, in coordination with the Office of the Legal Adviser, review the $366,663,728 in questioned costs related to 36 noncompetitive contract actions to extend services on the Baghdad Life Support Services contract, SAQMMA12D0165, between October 2018 and May 2021 to determine whether these costs were allowable. Specifically, the Office of the Legal Adviser should determine whether the justification to use the “unusual and compelling urgency” exception complies with the Competition in Contracting Act (41 U.S.C. §§ 3301, 3304) and the Federal Acquisition Subpart 6.1, “Full and Open Competition” and 6.3, “Other than Full and Open Competition.” See Appendix C for an itemization of the costs.
OIG recommends that the Bureau of Administration, Office of the Procurement Executive (OPE), strengthen its review and approval process and oversight of noncompetitive contract actions awarded, based on Federal Acquisition Regulation 6.302-2, “Unusual and compelling urgency,” related to circumstances permitting other than full and open competition. OPE should put in place controls to ensure those actions are not excessive, such as enforcement of time limitations on the duration of the use of these actions, and use appropriate rationales, which exclude lack of advanced planning. In addition, OPE should provide training, as appropriate, to officials in the review process to ensure controls are followed.
OIG recommends that the Bureau of Administration, Office of the Procurement Executive, Office of Acquisitions Management (AQM), in accordance with Government Accountability Office Standards for Internal Control in the Federal Government, strengthen internal controls related to improving cost-control measures for noncompetitive contract actions to extend services. The strengthened internal controls could include establishing and implementing procedures for a cost control monitoring system in which AQM performs ongoing monitoring and evaluation of price reasonableness determinations. Such strengthened internal controls should include, at a minimum, accountability for complying with Federal and Department of State requirements such as verifying that independent government cost estimates and certified cost or pricing data (or waivers) have been completed before contract award.