Transportation Dept. awards noncompetitive contracts 'counter to federal procurement rules': IG

"DOT's contracting officers awarded multiple noncompetitive actions to ITSS [IT shared services] contract vehicles without proper justifications, beyond contract term limits, and despite prolonged contractor performance issues," inspector general found.

Updated: October 8, 2022 - 11:02pm

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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's Golden Horseshoe is awarded to the Department of Transportation for  awarding hundreds of millions of dollars in IT contracts that lacked adequate documentation or proper justification and were extended without oversight, according to a new DOT Inspector General audit.

"Counter to Federal procurement requirements, DOT's contracting officers (CO) awarded multiple noncompetitive actions to ITSS [IT shared services] contract vehicles without proper justifications, beyond contract term limits, and despite prolonged contractor performance issues," the audit summary read.

The IG cited a lengthy contract as an example of missing documentation. "Officials could not locate most of the award documentation for an over 11-year, $525 million ITSS contract, raising questions about whether DOT obtained the best pricing," according to the report.

The contract, initially valued at $500 million, was extended, and the contract value increased by $25 million despite performance issues with the contractor.

"Specifically, the contractor did not provide key personnel to carry out the required services, assigned staff who were unable to pass security checks and made errors that resulted in mis-charges for IT equipment," the IG found.  

Highlighting contract extensions that resulted in ballooning costs, the inspector general cited a modest, 1-year contract for $950,000 that the DOT extended 16 times, resulting in taxpayers footing the bill for what became, effectively, a 7-year contract for $15.2 million.

DOT practices to verify contractor charges were not always reliable, "in part because it lacks adequate controls," the inspector general determined. "Thus, the Department cannot give reasonable assurance that ITSS payments are proper, leaving them at risk for waste, fraud, and abuse."

The inspector general made nine recommendations, and the DOT agreed with five of them (including one that has been implemented) and either partially concurred or disagreed with the others.   

In response to the report, Andrew Orndorff, DOT's associate chief information officer for Strategic Portfolio Management and chief information security officer, noted that in 2019 DOT "selected the Federal Highway Administration (FHWA) to serve as the contracting office for all centralized and commodity IT purchases," and DOT IT's "centralized and commodity IT acquisition activities began transitioning to FHWA's IT Acquisition Center of Excellence (IT ACE)."

The Office of the Chief Information Officer and IT ACE now have "actions underway to implement new standard operating procedures for requesting a new ITSS award or an extension of an award," wrote Orndorff. "Training on the new procedures," he added, "will be added to IT Contracting Officer's Representative (COR) training in FY23."