Audit of VA's Technology Acquisition Center Contract Operations

The Technology Acquisition Center (TAC) awarded approximately 1,200 Information Technology (IT) services contracts valued at approximately $5.2 billion, from October 2010 through June 2012. We conducted this audit to determine whether the TAC awards and administers IT services contracts in accordance with the Federal Acquisition Regulations (FAR) and VA policy. We found no significant issues with 61 of 79 statistically selected IT services contracts. However, the TAC awarded 18 contracts that did not meet the FAR competition requirements. This occurred because the TAC did not adequately justify using an exception to the FAR competition requirements to award four of six task orders under two Indefinite Delivery/Indefinite Quantity (IDIQ) contracts valued at approximately $143.1 million. We extended our review procedures to include an additional 72 task orders processed under these contracts. The TAC used the same FAR exception for 16 of the 72 task orders valued at approximately $146.6 million. In addition, the TAC did not follow FAR requirements before awarding 14 Interagency Acquisitions valued at approximately $254 million, by not demonstrating IT services could not be obtained as conveniently or economically by contracting directly with a commercial source. This occurred because VA’s Integrated Oversight Process (IOP) reviews did not identify or prevent the TAC’s noncompliance with the FAR requirements concerning competing task orders and using Interagency Acquisitions. We project the TAC missed an opportunity to save approximately $57.9 million in acquisition costs by not competing IDIQ task orders. We also project the TAC could have saved approximately $50.8 million by competing contracts among commercial sources instead of awarding Interagency Acquisitions. We made three recommendations to the Principal Executive Director for the Office of Acquisition, Logistics, and Construction to ensure that IDIQ task order awards and Interagency Acquisitions comply with FAR competition requirements. The Principal Executive Director for the Office of Acquisition, Logistics, and Construction concurred with the recommendations and provided an acceptable action plan.