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EPA spent $52 million in violation of law Congress passed to curb wasteful spending

The Federal Information Technology Acquisition Reform Act was designed to limit wasteful government spending on IT programs. EPA didn't get the memo.

Updated: March 27, 2021 - 11:24pm

The Facts Inside Our Reporter’s Notebook

The Golden Horseshoe is a weekly designation from Just the News intended to highlight egregious examples of wasteful taxpayer spending by the government. The award is named for the horseshoe-shaped toilet seats for military airplanes that cost the Pentagon a whopping $640 each back in the 1980s. 

This week, our award is going to the Environmental Protection Agency (EPA) for spending more than $52 million in taxpayer funds without approval from the chief information officer of the agency — a direct breach of a requirement under the Federal Information Technology Acquisition Reform Act.

The EPA had a 10-year, $83 million contract with a consulting firm called CGI Federal to provide the web-based application the agency used as its financial system, i.e., the program that dealt with the outfit's accounting functions, budget report, transaction tables, and the like. In 2015, the agency had started the bidding process for a subsequent contract, meaning the agency was supposedly assessing the open market in search of a new firm that might offer a better product, better rate, or just might be a better fit for the job that the American taxpayers were paying for. But, two years later, EPA had come up with zilch, prompting the agency to extend its contract with CGI Federal for one year.

The EPA paid CGI Federal an additional $17 million for the extra year of work, and then awarded them the new contracts worth a combined $52.5 million. According to a recently released report from the EPA Office of the Inspector General, one of these contracts was an open-competition contract, meaning, at least theoretically, other companies were allowed to pitch the agency for the contract award, and the other contract was a sole-source award, meaning the agency opted to go with the company that was right in front of them without necessarily surveying the open market. In both cases, however, the EPA settled on the same company they had used before and had already paid an additional $17 million. 

The 2013 Federal Information Technology Acquisition Reform Act (FITARA) was enacted for the specific purpose of mitigating wasteful government spending related to information technology (IT). Under that law, the EPA's chief information officer was required to review and approve the multimillion dollar contract transaction. Even the initial one-year contract extension with CGI Federal should have been reviewed and approved by the agency's CIO.

At the time of FITARA's passage, the U.S. government was spending upwards of $80 billion a year on IT costs, more than half of which went to maintaining systems that were slow and out-of-date. The goal of the legislation was to efficiently update the IT systems at federal agencies while simultaneously reducing wasteful technology spending. To do that, the bill handed increased responsibility to government CIOs, who became singularly responsible for the successes and failures of all IT projects and updates within the agencies.

Under FITARA, agencies are not allowed to enter into contracts or agreements for IT services worth more than $1 million, unless the CIO has approved the deal. But, according to the OIG , "The EPA awarded $52.5 million for these three contracts without federally required approval from the CIO." 

"As a result of not obtaining FITARA approval, the CIO was not informed of the $52 million purchase and was unable to review price competitions and cost reductions," the watchdog report found.

One recommendation made by the IG report is that the agency should determine whether or not to terminate the contracts that were awarded in breach of the law. Unsurprisingly, the agency opted not to end the contracts, saying that they would get it right next time around.

This EPA violation may not be especially egregious as wasteful government spending goes, but it is a dismaying sign that even when the feds set up spending parameters for themselves — as with FITARA — they neglect to follow them to the tune of millions in taxpayer dollars wasted.