OIG faults State Dept. noncompliance with noncompetitive contracting rules in Iraq, Afghanistan

This week's Golden Horseshoe goes to the State Department, which "did not fully follow acquisition policy when awarding noncompetitive contracts in support of contingency operations in Afghanistan and Iraq," according to an audit by the department's Office of Inspector General.

"Contracting Officers failed to document award decisions in accordance with acquisition policy for 2 of 22 (9 percent) of the noncompetitive contracts reviewed for this audit," according to the report. "In addition, OIG found no evidence that the Department publicly posted justifications for any of the 11 noncompetitive contracts requiring public notice, which collectively totaled $552 million."

Contracting personnel did not follow internal control procedures when they documented and posted award decisions publicly, and the watchdog found compliance procedures lacking in the State Department's controls.

"Until these deficiencies are addressed, the Department will lack assurance that all noncompetitive award decisions have been properly documented to demonstrate the need for exceptions from full and open competition and that interested parties are notified when such decisions are made," the auditors determined.

The Office of Inspector General also found the department did not ensure that reasonable prices were obtained in the noncompetitive contract awards.

"OIG also found that the Department did not fully adhere to required steps intended to ensure that fair and reasonable prices were paid on noncompetitive contract awards," the inspector general reported. "Specifically, 2 of 22 contract files (9 percent) did not contain required fair and reasonable price determination statements to demonstrate that contracting personnel sufficiently considered price factors before making the award."

In  10 out of 11, or 91%, of the awards above $250,000, contracting officers did not document price negotiations as required by the Federal Acquisition Regulation (FAR).

"Without sufficiently documenting all elements of the negotiation, contracting officers failed to both comply with FAR requirements and preserve key information about the award decision that could be of future value to the department," the OIG found.

In one example of a noncompetitive contract, the contracting officer claimed the information was "accidentally omitted from the justification" despite a standardized template used by the department that instructs those officers to include the estimated dollar amount. 

"Although this information was omitted from the justification, higher-level officials still approved" the contract, according to the audit.