Federal Manager's Daily Report

The Energy Department paid some $9.7 billion to other agencies on 1,585 interagency agreements for goods and services over 2012-2017 but cannot document that using such agreements cost less than making outside procurements, an IG audit has found.

Said a report: “During our audit, department officials told us that they perceived interagency agreements as having very little risk since other federal agencies have no profit motive. Despite the lack of profit motive, the consideration of alternative sources for interagency transactions or market research for interagency acquisitions confirms the cost effectiveness of using the other agencies’ contracts or procurement functions. Additionally, by not reviewing supporting documentation of costs incurred, such as itemized statements of costs or detailed invoices, the department cannot verify that the interagency agreement costs were allowable.”

Auditors found issues with the documented justification for the use of the interagency agreements and/or the support of the costs incurred by the other agency in 58 of the 60 interagency agreements sampled involving $249 million.

“These issues occurred because procurement officials that we spoke to did not believe that they were required to document acquisition planning in the file or obtain support for costs incurred. Consequently, the department had no assurance that it took the best procurement approach to meet its mission needs. Additionally, there was no assurance that the interagency agreement costs represented appropriate project efforts or that costs were appropriately charged to the department,” the report said.

It added that the sampled agreements files did contain requisitions and statements of work to be performed as required, and generally did reference the statutory authority for the work and contain estimated costs and schedules. However, it found that in about half the cases, the department did not comply with a requirement that it “document that the ordered goods and services cannot be provided as conveniently or economically by a commercial enterprise.”