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Audit Reports

Date

FAA’s Information Technology and Telecommunications Contracting Practices Limit Best Value Outcomes

Requested By
Self-initiated
Project ID
ZA2024019
File Attachment
What We Looked At    
Each year, the Federal Aviation Administration (FAA) procures billions of dollars in information technologies (IT) and telecommunications (telecom) products and services in support of its mission to provide the safest and most efficient aerospace system in the world. For fiscal year 2024, the Agency requested approximately $3.9 billion for its IT and telecom needs. Our prior audit of the Department of Transportation’s (DOT) IT shared services contract vehicles identified issues with DOT’s award and modification practices. Given our previous findings, and the high dollar amounts FAA expends for IT and telecom services, we initiated this audit. Our objective was to evaluate FAA’s practices for awarding and modifying its IT and telecom contracts. We focused our review on the award and modification practices associated with (1) determining sound pricing and (2) promoting competition.
 
What We Found
FAA’s noncompliant IT and telecom contracting practices inhibit establishment of sound pricing. Per the Agency’s Acquisition Management System (AMS), procurement teams are required to conduct price and, at times, cost analyses, and program offices must develop sound independent Government cost estimates (IGCEs) prior to contract awards. However, FAA officials could not provide the required price and cost analyses for 3 of 26 sample contracts or the required IGCE for 1 of these 3 contracts. Additionally, FAA developed inadequate IGCEs for 16 sample contracts. Without adequate IGCEs, FAA lacks a critical pricing tool to help conduct price analysis, detect unreasonable offerors, and establish sound pricing. FAA’s IT and telecom contract award and modification actions also restrict competition. Specifically, FAA extended contracts noncompetitively, expanded the scope of a contract noncompetitively, and made questionable noncompetitive award decisions. These actions were largely due to the Agency’s lack of sufficient procurement planning and unclear guidance in AMS. As a result, FAA denies other firms the opportunity to deliver IT and telecom products and services.
 
Our Recommendations
We made seven recommendations to strengthen FAA’s IT and telecom contract award and modification practices. FAA concurred with all seven recommendations. We consider all recommendations resolved but open pending completion of planned actions.  

Recommendations

No. 1 to FAA
Implement a written process for verifying compliance with Agency requirements for maintaining electronic, centralized files that include all documented contractual actions and determinations.
$311,611,640
No. 2 to FAA
Implement a written process for verifying compliance with Agency requirements for developing independent Government cost estimates (IGCEs) for contract modifications. Implementing this recommendation could put up to $311.6 million in Federal funds to better use by improving FAA’s ability to establish contract pricing that is fair, reasonable, and realistic.
No. 3 to FAA
Implement a written process for verifying that any extension of a contract’s performance period—including exercising an option period—is awarded prior to the contract expiring.
No. 4 to FAA
Update the Acquisition Management System (AMS) to specify what program offices are required to provide as part of an IT and telecom procurement request package. This documentation should include standard lead times for obtaining the Chief Financial Officer’s approval, submitting complete procurement packages, and references to guidance on how to develop sound IGCEs and complete requirements.
No. 5 to FAA
Update AMS to include limitations on how long contracts can be extended.
No. 6 to FAA
Implement written guidance to explain what authorities are appropriate to use to extend contracts beyond their initial performance periods, including any limitations associated with using each authority.
No. 7 to FAA
Update AMS to include when it is allowable and what is required to add work outside of a contract’s scope after the award is made.