Audit Reports

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Interim Report on Award-Fee Criteria for FAA's System Engineering and Technical Assistance II (SETA-II) Contract

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On October 7, 2008, we issued an interim report regarding FAA’s System Engineering and Technical Assistance II Contract as part of our ongoing audit of the Use of Cost–Plus–Award–Fee (CPAF) contracts within the Department. We found that the performance evaluation plan did not include measurable criteria needed to adequately evaluate contractor performance. Also, descriptions defining adjectival ratings were vague and did not clearly define the basis for rating performance, and performance evaluators were not required to document the rationale for the performance ratings. This allows for unsupported personal opinions for judging contractor performance. The effect of having evaluation criteria without clearly defined metrics, vague definitions of adjectival ratings, and no documentation to support performance ratings could result in inflated contractor performance evaluations and inappropriately approved award fees. Additionally, contracting officials did not justify the cost effectiveness of selecting a CPAF–type contract by evaluating administrative costs versus expected benefits to the Government. Without this evaluation, FAA had no assurance that a CPAF contract was appropriate. Senior FAA officials are implementing actions to meet the intent of our recommendations.