GSA IG report blasts FAS managers for altering contracts

Tuesday - 6/11/2013, 12:35pm EDT

Joe Petrillo, procurement attorney, Petrillo and Powell

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The General Services Administration's inspector general has blasted Federal Acquisition Service managers in a new report, accusing them of circumventing their staff and altering contracts upon the contractors' requests.

The penalty could be huge. The IG recommended FAS cancel or re-do two contracts worth a total of half-a-billion dollars.

According to the report, FAS managers handled contracts with Carahsoft, Deloitte and Oracle in 2011.

"In all three cases, there was a disagreement between the contractor and the contracting staff, and the IG had weighed in on this," Joe Petrillo, a procurement attorney with Petrillo and Powell, told the Federal Drive with Tom Temin and Emily Kopp. "The IG had done audits in all three cases or gotten involved in one way or another, and the contracting staff basically supported the IG's position."

In response, all three contractors went over the heads of the contracting officers and appealed to management directly, which ended up relaxing the strictures the IG had put in place.

Joe Petrillo, procurement attorney, Petrillo and Powell

"But at the end of the day, the IG got pretty much everything it wanted in these three instances or at least they got significant modifications to what the contractor was asking for, not withstanding that the IG was unsatisfied with the way this had been handled and they issued this report," Petrillo said.

This situation may appear atypical because, in most cases, an IG does not dictate contractual terms in the first place.

"It's a little different at GSA, because the GSA IG does audit renewals and new contracts under the multiple-awards schedule system," Petrillo said. "So, the IG, in a big contract like the ones we have here, it wouldn't be uncommon for the IG to have done that audit and then to be advising the contracting officer. Here, they seem to be going a little farther and actually advocating specific positions."

The report is light on details but does suggest the IG thought management was being too lax in dealing with the contractors.

"On the one hand, you want contracting officers to be independent and exercise business judgment and you want to empower them to do that," Petrillo said. "On the other hand, what do you do when someone is acting in an inappropriate fashion? There are a lot of contracting officers over at GSA and I'm sure many of them are quite excellent, but there are probably some who are maybe new and inexperienced or maybe aren't making good decisions. Do the managers have the ability to override those decisions or influence them? And the IG seems to be saying, 'No, they shouldn't,' which is kind of an unusual position to take in this government."