OIG Audit Exposes Contract Oversight and Payment Flaws Within GAO Acquisition
A recent Inspector General audit revealed contract administration flaws within the Government Accountability Office, including an unapproved $94,000 overpayment on a $119 million facilities blanket purchase agreement. The findings highlight broader federal vulnerabilities in invoice processing, pass-through charge evaluation, and GSA Schedule management.
The Government Accountability Office's Office of the Inspector General (OIG) identified notable administrative gaps in the agency's internal contract management practices, centered on a Blanket Purchase Agreement (BPA) for commercial facility maintenance valued at approximately $119 million. During the second option year of the General Services Administration (GSA) Schedule agreement, GAO processed contractor invoices reflecting increased labor rates stemming from a collective bargaining agreement without formally modifying the underlying BPA or its associated time-and-materials (T&M) orders. This oversight resulted in roughly $94,000 in unauthorized overpayments beyond negotiated rates, with agency personnel unable to explain why modifications were omitted prior to invoice disbursement.
Beyond the direct financial error, the audit uncovered structural vulnerabilities in GAO's procurement standard operating procedures. Specifically, the OIG highlighted a lack of explicit guidance for evaluating contractor charges for indirect costs or profit when subcontractors perform the primary work with negligible prime contractor value-add—a scenario known as excessive pass-through charges. Furthermore, ambiguous internal instructions regarding the application of federal rules for contracting by negotiation to GSA Schedule procurements created administrative inefficiencies, prompting procurement staff to execute redundant, unnecessary procedural steps.
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