IG says GSA office misused $36m from IT Fund

'This is an isolated instance; we have not found problems in other regions.'

'GSA's Bob Suda

Sales competition among General Services Administration regions might have led to the misuse of funds intended for IT buys, the agency's inspector general has concluded.

In a preliminary report, the IG said this month that employees at GSA's Federal Technology Service field office in Bremerton, Wash., inappropriately used $36 million from the agency's IT Fund to pay for construction, architecture and engineering services.

Congress created the IT Fund to let FTS offices award systems services contracts on behalf of other federal agencies.

The contracts were part of a tenfold increase in revenue, to $522 million, between 1998 and 2002 for GSA's Region 10, which includes Alaska, Idaho, Oregon and Washington.

Employees were rewarded for the increase, the IG said in the report made public by Government Executive magazine. 'We believe that the emphasis on revenue enhancement may have contributed to the willingness' among Bremerton officials to broaden the types of contracts awarded under the fund, the audit team said.

Larry Allen, executive director for the Coalition for Government Procurement, a Washington trade association, said FTS regions need better oversight to make sure they don't make mistakes like this one.

'FTS is aggressive because regions compete with each other, and they see direct benefits in terms of bonuses,' Allen said.

In a statement, GSA said it must be able to recognize high-performing employees but won't accept questionable practices: 'We expect our associates, managers and senior executives to follow a bottom-line principle: ethics and integrity in everything we do.'

The IG findings resulted from a broad review of FTS, said Eugene Waszily, GSA's assistant IG for auditing.

'We will not sample every region, but look at enough documents to get a general profile of the program,' Waszily said. 'We hope to finish the work by December and issue a final report by October 2004.'

The IG issued the preliminary report because the offenses were so blatant, Waszily said.

In response, GSA closed down the Bremerton office and reassigned personnel to the Auburn, Wash., headquarters, said Bob Suda, assistant commissioner of FTS for IT solutions.

'We also initiated new training courses with a refresher in contracting and law, and we reorganized the staff to work more like a team,' Suda said.

The IG staff reviewed 30 task orders issued by the Bremerton office over a two-year period and found several mistakes:
  • Contracting with IT companies to build a distance-learning facility for the Army National Guard
  • Hiring a small technology business for construction services
  • Using contracts under the Small Business Administration's 8(a) program to obtain products and services from large businesses
  • Splitting buys to place sole-source orders
  • Issuing orders through Federal Acquisition Services for Technology contracts that did not include items that were directly traceable to the contracts.

    Mistakes happen

    'We do about 40,000 task orders a year on average at FTS, and people make mistakes,' Suda said. 'You will always have something show up where you have a field office by themselves. But this is an isolated instance; we have not found problems in other regions.'

    Waszily countered: 'We haven't seen enough of the other work around the country to know if this is an aberration or if similar problems exist. But this is a fairly flagrant case of misusing the funds.'

    Suda said the agency's chief financial officer is looking at whether GSA will need to replenish the IT Fund.

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