Procurement Practices and Procedures for Obtaining Contractor Support at Defense Finance and Accounting Service-Denver

摘要

This report is the second in a series involving contracting at the Defense Finance and Accounting Service. The first report (98-099) covered the use of a single contractor to perform contract reconciliation services for over 8 years. We performed the audit in response to a complaint to the Defense Hotline concerning contracting practices and procedures for obtaining contractor support, and funding system development at Defense Finance and Accounting Service-Denver. The primary objective was to determine whether the hotline complaint had merit. We also evaluated the management control program as it applied to the objective. The allegations to the DoD Hotline had merit. Program officials responsible for projects involving acquisition and development of automated information systems under the cognizance of the Accounting Department engaged in questionable procurement practices when they directed the work to specific contractors without ensuring that the contractors offered the best value to the Government. Program officials also spent Government funds for a project that resulted in minimal benefits. In addition, the action of the Director, Defense Finance and Accounting Service-Denver to eliminate the appearance of a conflict of interest involving a high level official was not effective. As a result, program officials did not compete procurements, resulting in higher prices that could have been 22 to 51 percent less than the contracted costs, and unnecessarily spent $122,000 for the development of an unauthorized project. In addition, a potential conflict of interest continues to exist at Defense Finance and Accounting Service-Denver.