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Shortcuts by U.S. Mission in Iraq lead to $663 million in non-competitive contracts: watchdog

Planning failures "diminished" the "ability to assess whether costs" associated with the awards were "valid and reasonable," DOS Office of Inspector General found.

Updated: September 25, 2021 - 11:38pm

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This week's Golden Horseshoe is awarded to the State Department for $663 million in non-competitive contracts it awarded due to ineffective acquisition planning in its mission in Iraq, according to an audit report by the agency's Office of Inspector General.

The internal watchdog performed the audit to determine if the State Department was complying with federal and department requirements in planning and cost control for its transitional mission in Iraq. The department was to transition contracts from the Operations and Maintenance Support Services and the Baghdad Life Support Services to the Diplomatic Platform Support Services contract.

"The Department did not fully comply with Federal and Department requirements for acquisition planning while preparing for the transition of services to the DiPSS contract," the audit found. "Specifically, OIG found that ineffective acquisition planning resulted in forgoing requirements and caused delays in awarding the DiPSS contract."

The OIG found the State Department's lack of both internal controls and planning led to $663 million in 65 non-competitive contracts being awarded. Those contracts continued the OMSS and BLiSS services for years despite the Diplomatic Platform Support Services contract being awarded in 2019. 

As of May 2021, the department did not issue any "Iraq-specific competitive task orders" under DiPSS, the audit found.

The watchdog blasted the State Department's justification for continuation of the contracts, which cited "unusual and compelling urgency" to claim a regulatory exemption.

The State Department "non-competitively continued OMSS and BLiSS contracts excessively, based on quantity, duration, and dollar value, and unjustifiably used a Federal Acquisition Regulation (FAR) exception for other than full and open competition," according to the audit. 

Finding that "poor planning, poor coordination, and a lack of internal controls necessitated the contract actions," the OIG is questioning "the full value of the OMSS and BLiSS non-competitive contract actions, approximately $663 million, because Federal law does not permit poor planning as justification for the use of non-competitive contracts."

The watchdog reviewed all 65 OMSS and BLISS contracts and analyzed 14 for cost-control actions. It found the State Department did not obtain required cost estimates from the contractors or independent government cost estimates before granting the awards. 

State Department officials told the OIG it "occurred because of time and resource constraints associated with awarding numerous contract actions." 

However, the watchdog report found "the Department's failure to complete independent government cost estimates or obtain relevant cost or pricing data from the contractor significantly diminished the Department's ability to assess whether costs associated with the non-competitive contract awards were valid and reasonable."

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