Federal Manager's Daily Report

The GSA is failing to capture millions of dollars in potential savings recommended in pre-award audits that the inspector general’s office there does on contracts under the multiple award schedule program, the IG has said.

Under that program, designed to leverage the government’s buying power to produce savings, the GSA establishes long‐term government‐wide contracts from which commercial products and services are made available to customer agencies. The IG conducts pre-award audits to help contracting officers evaluate contractors’ pricing information, using information that would not otherwise be available to them.

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Over 2016-2019, the IG issued 130 such audits on contracts with estimated sales of over $27 billion for their pending contract periods, of which 84 included recommended price and discount adjustments totaling $1.1 billion. However, the GSA has achieved only about 10 percent of the recommended amount, about half the rate achieved in the prior three-year period, a memo to management said.

“We identified numerous instances where contracting officers relied on faulty pricing tools or unverified information, rather than pre-award audit results, to make pricing determinations,” auditors wrote. In one case, an audit concluded that rates were overstated by an average 31 percent but the contracting officer negotiated only a 1 percent reduction; GSA accepted the contractor’s full pricing on 15 contracts, forfeiting potential savings of $262 million, they wrote.

“While we recognize that negotiations may not always yield the full amount of cost savings identified in our pre-award audit reports, general disregard of pre-award audit results wasted our audit resources and forfeited opportunities to save over $900 million in taxpayer dollars,” it said.

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