Federal agencies spend over $50 billion a year through interagency contracts intended to leverage the government’s buying power and benefit from the expertise of other agencies, but improvements are needed in how the fee rates are set, GAO has said.
While agencies do follow key elements of the fee-setting process, weaknesses exist in some programs, such as inadequate cost identification, inadequate attention to growing reserve balances, and not following internal approval processes, according to GAO-11-784.
It said for example, that GSA does not track Networx costs at the contract level, and does not monitor the growth of reserve balances at the program level, and that the Department of Interior does not assign its overhead costs proportionately between its offices.
As a result these agencies cannot ensure that all their fee rates are set appropriately and may be missing opportunities to identify program inefficiencies, the report said.
GSA agreed to improve its tracking of costs and management of reserves and Interior said it would improve its assignment of overhead costs.
