DOD continues with FedSource, despite errors

The Treasury Department's acquisition service, FedSource, made mistakes as it helped the Defense Department make purchases in fiscal 2006, but none of the errors were significant enough for DOD to end the relationship, a recent report from DOD's inspector general has found.

The larger problem was that FedSource is taking on too many complex task orders, according to the Feb. 11 report.

In the report, the IG found problems with interagency agreements, market research and proper contract oversight when that office audited 29 task orders valued at $11.2 million. All the orders had inadequate or no interagency agreements, had no proof that officials conducted any market research and had poor surveillance plans, the IG found.

The IG said DOD is primarily responsible for laying out the interagency agreement and conducting market research. Both DOD and FedSource should watch contractors to ensure they meet a contract's requirements, the report stated.

The IG also found that four orders totaling $2.3 million were awarded with no competition and one $324,000 order was improperly funded, which could result in an Antideficiency Act violation.

FedSource, which awards and administers task orders for customer agencies, should improve how it operates and update its business systems to manage the size and complexity of the business it is handling, the IG said. FedSource processed 26,344 task orders and contract modifications in fiscal 2006, which totaled $404.1 million. The service also received 4,533 purchase requests from DOD valued at $207.3 million, the report states.

The problems occurred because DOD and FedSource didn't coordinate planning and oversight responsibilities, the IG said.

Although FedSource has improved, problems with interagency agreements, market research and surveillance need attention, the IG said.

Matthew Weigelt writes for Federal Computer Week, an 1105 Government Information Group publication.