Report | Oct. 7, 2020

Audit of the Solicitation, Award, and Administration of Washington Headquarters Services Contract and Task Orders for Office of Small Business Programs (DODIG-2021-001)

Audit

Publicly Released: October 9, 2020

Objective

We determined whether the Washington Headquarters Services Acquisition Directorate (WHS AD) solicited, awarded, and administered task orders issued under a program development and support contract for the DoD Office of Small Business Programs (OSBP) in accordance with the Federal Acquisition Regulation (FAR), the Defense Federal Acquisition Regulation Supplement (DFARS), and WHS policies. In addition, we determined whether the OSBP justified the requirement for the development of a Mentor Protégé Program (MPP) web portal and whether the WHS AD and the OSBP adequately administered the contract to ensure that the web portal met contract requirements.

Background

We conducted this audit in response to an allegation to the DoD Hotline regarding a contract awarded by the WHS AD in support of the OSBP. The hotline allegation stated that for contract HQ0034‑14‑D‑0026, task orders 1 and 3, which were for market research tools and the Small Business Innovation Research and Small Business Technology Transfer program support, WHS AD contracting officials and OSBP officials did not:

  • adequately solicit task orders;
     
  • establish clear performance requirements;
     
  • ensure that two task orders did not have duplicative requirements;
     
  • adequately address Government data rights and cybersecurity requirements;
     
  • establish clear security clearance requirements for the contractor; or
     
  • adequately monitor contractor performance.

In addition, the former OSBP Director raised concerns that a potential duplication of efforts for the development of a web portal occurred between contract HQ0034‑14‑D‑0026, task order 1, and contract GS‑35F‑115GA, task order HQ0034‑18‑F‑0574, which was for OSBP Mentor Protégé Program support services.

The WHS AD provides acquisition services, such as award and administration of supplies and services contracting, to all OSD components. The OSBP provides advice and oversight of DoD component small business programs and proposes Defense‑wide small business program initiatives to the DoD.

The FAR states that contract performance work statements must establish contract requirements in clear, specific, and objective terms with measurable outcomes. In addition, the performance work statement must include measureable performance standards and the methodology for assessing contractor performance against these performance standards. A quality assurance surveillance plan (QASP) should be prepared in coordination with the performance work statement and should identify all work requiring surveillance and the type of surveillance to be performed. The FAR also requires contracting officers to appoint a properly trained contracting officer’s representative (COR) in writing for all contracts and orders other than firm‑fixed price contracts, and that the COR must maintain a contract file for each assigned contract.

The DFARS states that CORs must maintain an electronic file with all documentation related to their duties and responsibilities, including documentation of actions performed during the performance of their duties. Contracting officers and the program office must annually review the COR file for accuracy and completeness.

Finding

We found that the WHS AD adequately solicited and awarded contract HQ0034‑14‑D‑0026, task orders 1 and 3. However, WHS AD contracting officials and OSBP officials did not establish clear and complete performance requirements and measurable performance standards or clearly establish security requirements for information technology and contractor personnel before awarding the task orders. In addition, WHS AD contracting officials and OSBP officials did not properly administer the task orders. Specifically, WHS AD contracting officials did not adequately monitor the COR; ensure that the COR appointment letter and QASPs were specific and tailored to the task orders; properly exercise contract option periods; or ensure that contractor performance assessments were entered into the Contractor Performance Assessment Reporting System. In addition, the OSBP COR did not adequately monitor or document contractor performance. For task order HQ0034‑F‑18‑0574, OSBP officials did not justify the duplication of efforts to develop an MPP web portal, and WHS AD contracting officials did not appoint a COR.

This occurred because WHS AD contracting officers did not execute their responsibilities when awarding and administering contracts and task orders in accordance with Federal, Defense, and WHS internal regulations and policies. In addition, the OSBP did not have established policies or procedures for the development of requirements and the administration of contracts to ensure that its officials complied with Federal and DoD guidance, and they operated without an appointed director and with limited Government staff. As a result, the DoD may not have received all services in accordance with requirements for contract HQ0034‑14‑D‑0026, task orders 1 and 3, and task order HQ0034‑18‑F‑0574, valued at $60 million. In addition, the DoD had increased security risks associated with uncleared contractor personnel and unsecured web portals, and Government contracting officials will not have complete past performance histories of contractor performance before awarding future contracts or exercising options periods.

Management Comments and Our Response

The WHS Director did not agree with the finding that the DoD may not have received all services in accordance with requirements for which it paid $60 million. The Director stated that the WHS AD provided the audit team evidence that it received the deliverables supporting $59,375,094. We acknowledge in the report that the contractor provided most of the deliverables required by the task orders. However, we disagree that the receipt of contract deliverables alone, such as monthly progress reports, support and validate that the DoD received the services in accordance with the requirements.

The COR did not document the review and analysis of the monthly progress reports received from the contractor supporting that the services and tasks described in those reports were validated as received and adequate. In addition, WHS AD contracting officials did not appoint a COR for task order HQ0034‑18‑F‑0574 when awarded and did not ensure that the appointed COR for task orders 1 and 3 adequately performed the contract administration duties assigned to ensure and support the contractor’s performance. Therefore, we maintain that the DoD may not have received all services in accordance with requirements for contract HQ0034‑14‑D‑0026, task orders 1 and 3, and task order HQ0034‑18‑F‑0574, valued at $60 million.

This report is a result of Project No. D2019-D000AH-0195.000.