September 20, 2022
Weaknesses in DOT’s ITSS Award and Invoice Processes Increase the Risk of Inefficiencies During Acquisitions of Critical IT Products and Services
What We Looked At
The Department of Transportation (DOT) leverages information technology (IT) to achieve its mission of a safe, efficient, accessible, and convenient transportation system. Historically, IT systems were decentralized DOT-wide, but that resulted in high costs and other inefficiencies and risks. Thus, in May 2017, the Office of the Chief Information Officer (OCIO) launched an IT shared services (ITSS) initiative to centralize IT decision making and transition to DOT-wide acquisition vehicles where possible. Given the high-dollar amounts associated with DOT’s IT acquisition spending—$3.5 billion in fiscal year 2021—and the ongoing ITSS transition, our objectives for this audit were to assess the Department’s processes for (1) awarding its IT shared services contracts and (2) reviewing contractor charges.
What We Found
Counter to Federal procurement requirements, DOT’s contracting officers (CO) awarded multiple noncompetitive actions to ITSS contract vehicles without proper justifications, beyond contract term limits, and despite prolonged contractor performance issues. For example, DOT awarded a 1-year, no options, $950,000 ITSS vehicle noncompetitively, then extended it 16 times, increasing its period of performance to over 7 years and its value to $15.2 million. In addition, COs did not always award such actions in a timely manner due partially to a lack of guidance. As a result, we found 10 lapses in 5 ITSS contract vehicles with a total value of $582.1 million during which DOT continued to receive and pay for IT services. Further, while DOT’s ITSS award documentation complied with most key procurement requirements, there were a few notable exceptions. For example, officials could not locate most of the award documentation for an over 11-year, $525 million ITSS contract, raising questions about whether DOT obtained the best pricing. Finally, the OCIO’s practices for verifying ITSS contractor charges are not always reliable in part because it lacks adequate controls. Thus, the Department cannot give reasonable assurance that ITSS payments are proper, leaving them at risk for waste, fraud, and abuse.
DOT concurred or partially concurred with six of our nine recommendations to improve its ITSS contract vehicles award and invoice review processes. DOT did not concur with the remaining three recommendations, which remain open and unresolved.