GSA closes FTS office after audit finds misused IT Fund

The General Services Administration closed down its Federal Technology Service field office in Bremerton, Wash., after the agency's inspector general found the office's staff misused the IT Fund to buy construction, architecture and engineering services.

Congress created the fund to let FTS offices award contracts that federal agencies can then use to acquire systems services. But Bremerton tapped the funds for non-IT services, according to a preliminary report released last week by the IG. The audit team said it had "significant concerns that warrant immediate attention" because of inappropriate contracting practices in FTS's Region 10, which includes Alaska, Idaho, Oregon and Washington.

"We do about 40,000 task orders a year on average at FTS, and people make mistakes," said Bob Suda, assistant commissioner of FTS for IT solutions. "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."

An IG team reviewed 30 task orders issued by the Bremerton office over a two-year period and found staff used more than $36 million from the IT Fund to build a new office building and for renovations. The office also issued contracts for construction services to small technology businesses participating in the Small Business Administration's 8(a) program.

"As a result of the alert and before the alert was issued, we closed down the Bremerton office and reassigned personnel to the Auburn, Wash. office," Suda said. "We also initiated new training courses with a refresher in contracting and law, and we reorganized the staff to work more like a team."

Regional administrator John Kvistad also hired an acquisition chief and developed internal procedures to handle these types of issues in the future, Suda said. Suda credited Kvistad for identifying the problem through an internal audit and alerting the IG.

"There was some documentation work that did not accurately identify the work completely," Suda said. "John was new in his job and wanted to get the feeling of what was going on and through this process found the problems."

GSA officials on Thursday briefed the House Government Reform Committee staff. Suda said the agency's chief financial officer is looking at whether GSA will need to replenish the IT Fund. Other agency officials are deciding whether action against the companies involved is needed as well, he said.

A final report from the IG is expected this fall.