FAA's Contracting Practices are Insufficient to Effectively Manage its Systems Engineering 2020 Contracts
On March 28, 2012, we issued our final report on the Federal Aviation Administration's (FAA) Systems Engineering 2020 (SE-2020) contracts. SE-2020 is a portfolio of contracts that FAA is using to obtain professional and technical services to support its development and implementation of NextGen. FAA awarded seven SE-2020 base contracts between April and October 2010, which have a cumulative maximum value of $7.3 billion—the largest award in FAA's history. We assessed whether FAA: (1) manages its SE-2020 contract costs effectively; and (2) uses sound contracting practices to select contractors and oversee their performance.
We found that unclear FAA Acquisition Management System requirements resulted in unreliable cost baselines and overstated contract values, which impedes FAA's ability to manage total contract costs. In addition, FAA's practices to select contractors and oversee their performance are not sufficient. We made 12 recommendations to improve FAA's cost management and contracting practices--the agency concurred or partially concurred with 10 recommendations. FAA has completed actions to address one recommendation and proposed actions to address the other six recommendations. The FAA initiated actions to address many of the issues we identified during our audit, and we requested that the agency provide further documentation and target completion dates to meet the intent of four of the five remaining recommendations. We also requested FAA to reconsider its position on the one recommendation to which it did not concur.