oversight

Audit of the U.S. Office of Personnel Management's Office of Procurement Operations' Contract Management Process

Published by the Office of Personnel Management, Office of Inspector General on 2016-07-08.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

               U.S. OFFICE OF PERSONNEL
                     MANAGEMENT
           OFFICE OF THE INSPECTOR GENERAL
                    OFFICE OF AUDITS




                Final Audit Report
           AUDIT OF THE U.S. OFFICE OF PERSONNEL
          MANAGEMENT’S OFFICE OF PROCUREMENT
           OPERATIONS’ CONTRACT MANAGEMENT
                          PROCESS
                                           Report Number 4A-CA-00-15-041
                                                    July 8, 2016


                                                             -- CAUTION --
This audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit report may
contain proprietary data which is protected by Federal law (18 U.S.C. 1905). Therefore, while this audit report is available under the Freedom of
Information Act and made available to the public on the OIG webpage (http://www.opm.gov/our-inspector-general), caution needs to be exercised before
releasing the report to the general public as it may contain proprietary information that was redacted from the publicly distributed copy.
             EXECUTIVE SUMMARY
             Audit of the U.S. Office of Personnel Management’s Office of Procurement
                             Operations’ Contract Management Process 

Report No. 4A-CA-00-15-041                                                                                   July 8, 2016


Why Did We Conduct The Audit?                What Did We Find?

The objectives of our audit were to:         We determined that OPM needs to strengthen its controls over its
 Assess the internal controls over the      contract management process. Our audit identified three areas requiring
   Office of Procurement Operations’         improvement, as follows:
   (OPO) post-award management
   process and determine if Contracting          	 OPO Lacks Strong Internal Controls over Its Contract
   was deobligating contract funds,                 Management Operations
   according to the Federal Acquisition             OPO did not have strong internal controls over procurement
   Regulation (FAR).                                compliance, procurement oversight, workload and staffing, and
 Analyze the Calyptus Consulting                   acquisition certification and training operations.
   Group’s independent strategic
   assessment report and determine if            	 Inaccurate Contract Amounts Reported in OPM’s

   recommendations were valid for                   Information Systems

   procurement compliance,                          For 22 out of 60 contracts we reviewed, the contract amounts
   procurement oversight, and                       reported in the Consolidated Business Information System
   acquisition certification and training.          differed from the contract amounts reported in OPO’s contract
 Determine if the OPO was promptly                 files. In addition, OPO was unable to provide 17 out of 60
   reporting, investigating and referring           contract files for our review.
   suspension and debarment cases,
   according to the FAR and its internal         	 Weak Controls over the Contract Closeout Process
   policies and procedures.                         OPO could not provide a listing of contract closeouts for fiscal
                                                    years 2013 and 2014. In addition, for 60 contracts we reviewed,
What Did We Audit?                                  we identified 46 where OPO did not initiate the contract closeout
                                                    process.
The Office of the Inspector General has
completed a performance audit of the
U.S. Office of Personnel Management’s
(OPM) OPO contract management
process. Our audit fieldwork was
conducted from September 10 through
December 16, 2015, at OPM
headquarters, located in Washington,
D.C.




 _______________________
 Michael R. Esser
 Assistant Inspector General
 for Audits
                                                           i
           ABBREVIATIONS

Calyptus     Calyptus Consulting Group
CBIS         Consolidated Business Information System
CO           Contracting Officers
CS           Contracting Specialists
FAR          Federal Acquisition Regulation
FPDS         Federal Procurement Data System
FY           Fiscal Year
GAO          U.S. Government Accountability Office
OIG          Office of the Inspector General
OPM          U.S. Office of Personnel Management
OPO          Office of Procurement Operations

RFP          Request for Proposal
RFQ          Request for Quotation
SAM          System for Award Management




                       ii
IV. MAJOR CONTRIBUTORS TO THIS REPORT
          TABLE OF CONTENTS

                                                                                                                                  Page 

          EXECUTIVE SUMMARY ......................................................................................... i 


          ABBREVIATIONS ..................................................................................................... ii 


  I.	     BACKGROUND ..........................................................................................................1 


  II.	    OBJECTIVES, SCOPE, AND METHODOLOGY ..................................................7 


  III.	   AUDIT FINDINGS AND RECOMMENDATIONS...............................................10

          1.	 OPO Lacks Strong Internal Controls over Its Contract 

              Management Operations ........................................................................................10 

          2.	 Inaccurate Contract Amounts Reported in OPM’s Information 

              Systems ..................................................................................................................11 

          3.	 Weak Controls over the Contract Closeout Process ..............................................13 


  IV.	    MAJOR CONTRIBUTORS TO THIS REPORT ..................................................17 


          APPENDIX (Office of Procurement Operation’s response to our draft report, 

                    dated May 5, 2016) 


          REPORT FRAUD, WASTE, AND MISMANAGEMENT

                                   I. BACKGROUND

This final audit report details the findings, conclusions, and recommendations resulting from our
performance audit of the U.S. Office of Personnel Management’s (OPM) Office of Procurement
Operations’ (OPO) contract management process. The audit was performed by OPM’s Office of
the Inspector General (OIG), as authorized by the Inspector General Act of 1978, as amended.

This audit was conducted based on the results of the OPO risk assessment performed in fiscal
year (FY) 2015 by OIG’s Internal Audits Group. The purpose of the risk assessment was to
understand OPO’s processes and determine areas of high risk. We identified OPO’s contract
management process as a high-risk activity for the following reasons:

    1.	 OPM contracts1 may not be in compliance with the Federal Acquisition Regulation
        (FAR) and OPM policies. Specifically, in our risk assessment we identified three out of
        five contract files that did not contain the required documentation, such as the
        Independent Government Cost Estimate, market research (quotes), or acquisition plan to
        support the award of the contract.
    2.	 OPO may not have adequate supervision over contract actions due to the lack of 

        sufficient staffing. 

    3.	 Other Federal government agencies could hire fraudulent contractors if contractor
        performance is not entered into the Contractor Performance Assessment Rating System,
        which should be performed by OPO contract specialists on contracts nearing or at the end
        of their life cycle.

OPO’s Contracting Management Process

During our audit, the Office of Procurement Operations, formerly the Contracting office within
Facilities, Security and Contracting, was reorganized and now reports directly to OPM’s
Director. The Facilities, Security and Contracting office is now Facilities, Security and
Emergency Management.

OPO performs its contract management functions in the Theodore Roosevelt Building
(Headquarters) in Washington D.C., Boyers and Philadelphia, Pennsylvania. At the time of our
audit, OPO consisted of five teams2 that provided centralized contract management to OPM’s




1
  Contracts means contracts, orders, agreements, and calls. 

2
  Towards the end of the audit, there was a reorganization that has realigned the duties and function of the OPO and

the five teams have since changed as well as their roles and responsibilities. The updated roles and responsibilities 

were not part of our audit work and have not been validated.



                                                       1	                         Report No. 4A-CA-00-15-041
program offices to support the operations and Government-wide mission of OPM, in accordance
with the FAR. These teams included the:

    Service Team: Handles service related purchase requests, service contract awards and post-
    award administration for all of OPM’s program offices.

    Information Technology Team: Handles information technology procurement services and
    product needs for OPM’s program offices.

    Vendor Management Team: Directly funded by Human Resources Solutions to support the
    Training and Management Assistance program when awarding contracts for Human Resources
    Solutions.

    Boyers Contracting Team: Directly funded by Federal Investigative Services to handle their
    contracts over $150,000. Federal Investigative Services established an internal contracting
    team to handle contracts of $150,000 and under.

    Procurement Policy and Innovation: Streamlines and updates OPO’s contracting policies
    and procedures, manages the suspension and debarment program, and assists other teams in
    performing contract specialist and administrative responsibilities, such as inputting the
    contractor’s performance into the Contractor Performance Assessment Rating System.

Contracting officers (CO) and contract specialists (CS) are responsible for awarding and
managing the life of a contract through the periods before, during and after award, including
contract closeout.

A. Prior to Award – The requesting program office inputs the financial information for contract
   funding obligations into the Consolidated Business Information System (CBIS)3. The CO
   receives an approved requisition, statement of work, government estimate, market research,
   and acquisition plan as required from the requesting program office in the Acquisition
   Tracking System4 and assigns the requisition to a CS5 to determine the best contract type and
   award action in use.



3
  CBIS is OPM’s financial, budgetary and performance information data system and is used for funding of the

contracts. Contract specialists have access to the system.

4
  The Contracting Office’s acquisition tracking system stores contract action information that is used, in part, to 

report information to Contracting Office personnel.

5
  Contracts can also be assigned to a CO depending upon the nature of the contract requested. For example, this

may happen if a CO has worked on a similar contract, or due to limited resources and time restrictions. 



                                                       2                           Report No. 4A-CA-00-15-041
         Contract Types:
            	 Indefinite Delivery Indefinite Quantity – Contracts that provide for an indefinite
                quantity of services for a fixed amount of time. The government places task
                orders against a basic contract for individual requirements.
            	 Firm-Fixed-Price – Contract amount is not subject to any adjustments based on
                the basis of the contractor’s cost experience in performing the contract. FAR
                16.202-1 states that “This contract type places upon the contractor maximum risk
                and full responsibility for all costs and resulting profit or loss.”
             Incentive Contracts – Linking the amount of profit payable under the contract to
                the contractor’s performance.
             Cost Reimbursement Contracts – Establish an estimate of total cost and
                establishes a ceiling that the contractor may not exceed.
            	 Time and Materials – Contract specifies the hourly rate that includes wages,
                overhead, and profit plus the direct materials used or consumed directly with
                furnishing the end product or service.
            	 Labor Hours - Contract specifies the hourly reimbursement rates that include
                wages, overhead, and profit.

    The CS utilizes a commercial off-the-shelf software application known as the
                                          (         )6 to obtain a unique solicitation number, after
    which a Request for Quotation (RFQ) or Request for Proposal (RFP) is issued. The RFQ and
    RFP are used in negotiated acquisitions7 to communicate Government requirements to
    prospective vendors and to solicit proposals and/or quotations. Upon receipt of the proposals
    and/or quotations the CO selects a contractor and verifies that the prospective contractor is
    registered and not on the excluded parties listing in the System for Award Management
    (SAM). Finally, the CS prepares the contract in            , which includes contract clauses
    outlining OPM’s and the contractor’s role and responsibilities.

B. Award – The CS or CO reviews the contract to ensure the award is in compliance with the
   FAR requirements. An internal checklist is used for the reviews and filed in the contract
   folder. The contract specialist or officer will ensure the contractor and program office agree
   to the terms and conditions of the contract with a signature. Once all signatures are present,
   the CS or CO awards the contract.

    After Award – After the contract is awarded, OPO is responsible for completing post award
    administrative contract actions, including contract closeouts. OPO utilizes the Federal

6
          is a commercial off-the-shelf software used to record and track requisitions, purchase orders and contracts
issued by offices and councils within the Executive Office of the President.
7
  An agency can obtain best value in negotiated acquisitions by using any one or a combination of source selection
approaches. For example, in acquisitions where the requirement is clearly definable and the risk of unsuccessful
contract performance is minimal, cost or price play a dominant role in source selection.


                                                      3	                         Report No. 4A-CA-00-15-041
   Procurement Data System (FPDS) in the contracting process after award to collect and report
   procurement data for contract actions using appropriated funds.

C. OPO’s contract specialists work with OPM’s program offices’ contract officer
   representatives to ensure all contracted products and services are received. Upon receiving
   evidence of physical completion (i.e., final invoice or a deliverable receipt form) the contract
   specialist is responsible for administering closeouts, which includes determining if excess
   funds, or available obligations, must be deobligated and returned to the program office from
   which they originated. FAR 4.804-1(c) includes requirements describing when a contract file
   shall not be closed, including if (1) the contract is in litigation or under appeal; or (2) in the
   case of a termination, all termination actions have not been completed.

   OPO receives quarterly notification of open contract funding obligations through the Chief
   Financial Officer’s Open Obligation Report, which identifies the date of the contract’s last
   invoice. FAR 4.804-5 includes 15 tasks associated with closeout, all of which are critical
   steps in the process. The CFO’s Open Obligation Report may be used as a tool for Program
   Offices and OPO members alike to consider and potentially initiate the closeout process.

   The contract method is used to determine when unused contract funds should be deobligated,
   based on FAR timeliness standards as described below:

                   Contract Method:                           FAR Timeliness Standards

             SIMPLIFIED ACQUISITION                        Closed when the contracting officer
                                                         receives evidence of receipt of property
          Used for purchase orders and blanket             and final payment, unless otherwise
          purchase agreements. The simplified                specified by agency regulations.
           acquisition threshold is $150,000.

                  FIRM-FIXED-PRICE                      Closed within 6 months after the date on
                                                         which the contracting officer receives
      The contractor assumes the greatest cost risk        evidence of physical completion.
      by agreeing to perform at a predetermined or
                       fixed price.




                                              4                      Report No. 4A-CA-00-15-041
               INDIRECT COST RATE                     Closed within 36 months of the month in
                                                       which the contracting officer receives
           The percentage or dollar factor that          evidence of physical completion.
         expresses the ratio of indirect expense
        incurred in a given period to direct labor
                          cost.



                                                      Closed within 20 months of the month in
                     ALL OTHERS                        which the contracting officer receives
                                                         evidence of physical completion.



To a limited degree, CBIS,          , and FPDS are used by OPO to identify when a contract
requires closeout. In order to closeout a contract, OPO must determine the amount of available
funds to return to the appropriate program office by subtracting the total amount expended for
contract products and/or services received from the total contract amount awarded.

Suspension and Debarment Program

OPM’s suspension and debarment program was implemented on January 1, 2013, to impose
suspension and debarment actions to protect the Government’s interest. OPM’s suspension and
debarment activities begin with OPO receiving an investigative referral from the OIG. The
investigative referral could be a violation and/or conviction that was suspected or discovered
during the course of a Government contract’s period of performance. The investigative referral
must consist of the following:
     summary and rationale for consideration;
     statement of facts;
     copies of any documentary evidence;
     list of parties, including the contractor, principals, and affiliates (including known
        identifying information such as addressee(s), zip codes, and Dun & Bradstreet’s Number
        or other identifying number for an individual);
     list of any known investigations, proceedings or claims; may include comments and
        recommendations of the referring official and any higher level review authority regarding
        whether to suspend or debar, the period of any recommended debarment, and whether to
        continue any current engagements; and
     any other appropriate exhibits or documents.




                                             5                     Report No. 4A-CA-00-15-041
Upon receipt of the investigative referral, Facilities, Security and Emergency Management’s
management analyst will update their intake log with pertinent information (e.g., subject’s name,
OIG referral date, OIG’s proposal (suspension or debarment)). OPM’s Suspension and
Debarment Official, who is also the Director of Facilities, Security and Emergency Management,
sends a certified letter of proposed suspension or debarment to the subject, which states the
action that has or will be taken. The subject has 30 days to respond to the proposed suspension
or debarment letter. In SAM, the management analyst will suspend the subject, write a summary
for the exclusion, and input the active and termination dates of suspension. In addition, the
Director of OPO’s Policy and Procurement Innovations notifies the Interagency Suspension and
Debarment Committee8 that OPM will be the lead agency coordinator for the subject(s).

If the subject does not provide a response, the taken or proposed action remains unchanged. If
the subject provides a response, the Suspension and Debarment Committee, which consists of the
Director of Policy and Procurement Innovations, the Senior Procurement Executive, the Director
of the Office of Procurement Operations, and the management analyst, meet to discuss whether a
suspension or debarment should be imposed. The management analyst completes a summary
evaluation form and provides it to the suspension and debarment official. The suspension and
debarment official reviews the subject’s response, the OIG’s referral, and any other supporting
documentation including the case details and the Committee’s recommendations. Based upon
the review, the suspension and debarment official makes a final determination for debarment or
suspension and responds to the Suspension and Debarment Committee. Finally, the management
analyst will update SAM to reflect the final decision.




8
 The Interagency Suspension and Debarment Committee monitors implementation of Executive Order 12549 and
mandates executive departments and agencies to participate in a government-wide system for debarment and
suspension, issue regulations, and enter debarred and suspended participants’ identifying information on the U.S.
General Services Administration list of excluded persons, now known as the System for Award Management.


                                                     6                         Report No. 4A-CA-00-15-041
IV. OBJECTIVES,
II.  MAJOR CONTRIBUTORS
                SCOPE, ANDTO THIS REPORT
                          METHODOLOGY
 Objectives
 The objectives of our audit were to:
    	 Assess the internal controls over OPO’s post-award management process, in accordance
        with the FAR. Specifically, we determined if OPO was deobligating contract funds,
        according to the FAR.
    	 Analyze the Calyptus Consulting Group’s (Calyptus) independent strategic assessment
        report and determine if recommendations were valid for procurement compliance,
        procurement oversight, and acquisition certification and training.
    	 Determine if OPO was promptly reporting, investigating, and referring suspension and
        debarment cases, according to the FAR and its internal policies and procedures.

 The recommendations included in this final report address these objectives.

 Scope and Methodology
 We conducted this performance audit in accordance with generally accepted government
 auditing standards as established by the Comptroller General of the United States. These
 standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to
 provide a reasonable basis for our findings and conclusions based on our audit objectives.

 The scope of our audit covered the following areas:


       Audit Area              Total Universe                 Scope                   Source


                                                                               Facilities, Security
                                                          October 1, 2013       and Emergency
     Suspensions and                                   through September 30,   Management Intake
       Debarments                    19                        2014               tracking log
                                                          October 30, 2009
                                                       through September 30,
    Open Obligations               12,940                      2014                    CBIS
                                                          October 1, 2013
   Contracts Reviewed                                  through September 30,
      by Calyptus                    217                       2014                   FPDS

 Due to OPO’s inability to provide a universe of closed contracts, we were unable to test the
 contract closeout process during this audit and excluded the closed contract universe and related
 fieldwork testing from our audit work.


                                              7	                      Report No. 4A-CA-00-15-041
We performed our audit fieldwork from September 10 through December 16, 2015, at the OPM
Headquarters, located in Washington, D.C.

To accomplish the audit objectives noted above, we:
    interviewed OPO personnel, as necessary;
    sampled and tested open obligations;
    verified Calyptus’ strategic assessment results; and
    sampled and tested suspensions and debarments.

In planning our work and gaining an understanding of OPM’s contract management process, we
considered, but did not rely on, OPO’s internal control structure to the extent necessary to
develop our audit procedures. These procedures were mainly substantive in nature, although we
did gain an understanding of management procedures and controls to the extent necessary to
achieve our audit objectives. The purpose of our audit was not to provide an opinion on internal
controls, but merely to evaluate controls over the processes that were included in the scope of
our audit.

Our audit included such tests and analysis of OPO’s contract management operations for open
obligations, and suspension and debarment, including documented policies and procedures,
contract files, suspension and debarment support, and other applicable information, as we
considered necessary under the circumstances. The results of our review and tests indicate that
with respect to the items tested, OPO needs to strengthen its controls over its contract
management operations.

In conducting the audit, we relied to varying degrees on computer-generated data. Due to the
nature of the audit, we did not verify the reliability of the data generated by the systems
involved. However, while utilizing the computer-generated data during our audit, nothing came
to our attention to cause us to doubt its reliability. We believe that the data was sufficient to
achieve our audit objectives.

In performing our audit work, we used IDEA Data Analysis software to select samples for
testing in order to accomplish our audit objectives. Our sampling methodology consisted of
judgmentally selecting the following from the CBIS FYs 2010 to 2014 Open Obligation Report,
as of June 8, 2015:
     30 out of 8,595 open obligations with last invoice dates and
     30 out of 4,345 open obligations without last invoice dates.

The samples selected during our review were not statistically based. Consequently, the results
from our samples were not projected to the populations.




                                             8                     Report No. 4A-CA-00-15-041
The preliminary results of our audit were discussed with OPO officials at an exit conference held
on December 16, 2015, and were presented in a draft audit report dated March 31, 2016. OPO’s
comments in response to the draft report were considered in preparing our final report and are
included as an Appendix.




                                            9                      Report No. 4A-CA-00-15-041
III. AUDIT FINDINGS AND RECOMMENDATIONS

For the areas described below, we determined that OPO needs to strengthen its controls over the contract
management process.

1. OPO Lacks Strong Internal Controls over Its Contract Management Operations

   OPO contracted with Calyptus to perform an independent strategic assessment from October
   2014 through March 2015 of OPO’s procurement compliance; procurement oversight; workload
   and staffing; and acquisition certification and training. On April 23, 2015, Calyptus issued their
   Strategic Assessment Report to OPO, which identified 16 recommendations for OPO.

   We reviewed Calyptus’ Strategic Assessment Report of OPO and supporting documentation, and
   determined that the findings and recommendations reported by Calyptus are valid and logical.
   However, OPM is not ensuring that OPO takes appropriate corrective action to address the
   internal control deficiencies identified.

   The U.S. Government Accountability Office’s (GAO) Standards for Internal Control in the
   Federal Government states that management “designs appropriate types of control activities for
   the entity’s internal control system. Control activities help management fulfill responsibilities
   and address identified risk responses in the internal control system. … [m]anagement should
   establish and operate monitoring activities to monitor the internal control system and evaluate
   the results.” Common categories of control activities include top-level performance reviews,
   functional or activity level reviews by management, controls over information processing,
   physical controls over assets, establishment and review of performance measures and indicators,
   segregation of duties, proper execution of transactions, accurate and timely recording of
   transactions, access restrictions to and accountability for resources and records and appropriate
   documentation of transactions and internal controls.

   GAO’s Standards for Internal Control in the Federal Government also states that 

   “[m]anagement clearly documents internal control and all transactions and other significant 

   events in a manner that allows the documentation to be readily available for examination. … 

   Documentation and records are properly managed and maintained.” 


   OPO’s weak internal controls and outdated policies led to the reportable deficiencies in
   Calyptus’ Strategic Assessment Report and by not addressing Calyptus’ recommendations,
   OPO’s processes could deteriorate to a point in which the reliability of its procurement activities
   could be jeopardized.




                                                 10                    Report No. 4A-CA-00-15-041
   Recommendation 1

   We recommend that OPO strengthen its internal controls by 

   working with OPM’s Internal Oversight and Compliance office to 

                                                                              OPO Lacks Strong
   implement corrective actions to address the findings and
                                                                            Internal Controls over
   recommendations reported in the Strategic Assessment Report
                                                                                 Its Contract
   issued by Calyptus Consulting Group, Inc., on April 23, 2015.
                                                                                 Management
                                                                                  Operations
   OPO’s Response:

   OPO concurs with this recommendation.

   “OPO will work with OPM’s Internal Oversight and Compliance (IOC) on the development and
   maintenance of a corrective action plan to address the findings and recommendations reported in
   the independent Strategic Assessment Report issued on April 23, 2015. Additionally, OPO will
   work with IOC to track and monitor the implementation of corrective actions already underway
   and those yet to be completed.”

2. Inaccurate Contract Amounts Reported in OPM’s Information Systems

   OPO is not ensuring that the contract data input in CBIS by its staff is accurate and complete.

   We requested access to 60 contract files with open obligations reported in the Office of the Chief
   Financial Officer’s CBIS Fiscal Years 2010 to 2014 Open Obligation Report, and determined
   that the contract amounts reported in the CBIS for 22 of the 60 contracts sampled differed from
   the contract amounts reported in OPO’s contract files. In addition, OPO was unable to provide
   17 of the 60 contract files, so we cannot determine if the amounts reported in CBIS were
   accurate. Details regarding the 39 questioned contracts were provided to OPO separate from this
   report.

   GAO’s Standards for Internal Control in the Federal Government states that “[m]anagement
   processes relevant data from reliable sources into quality information within the entity’s
   information system. An information system is the people, processes, data and technology that
   management organizes to obtain, communicate, or to dispose of information.”

   GAO’s Standards for Internal Control in the Federal Government also states that
   “[m]anagement designs appropriate types of control activities for the entity’s internal control
   system. Control activities help management fulfill responsibilities and address identified risk
   responses in the internal control system. … [m]anagement should establish and operate
   monitoring activities to monitor the internal control system and evaluate the results.”



                                                11                     Report No. 4A-CA-00-15-041
                        Common categories of control activities include top-level performance
                        reviews, functional or activity level reviews by management, controls
 Contract Data Not 
 over information processing, physical controls over assets,
     Accurately 
       establishment and review of performance measures and indicators,
  Reported in CBIS 
 segregation of duties, proper execution of transactions, accurate and
                        timely recording of transactions, access restrictions to and
                        accountability for resources and records, and appropriate
documentation of transactions and internal controls.

GAO’s Standards for Internal Control in the Federal Government further asserts that
“[m]anagement clearly documents internal control and all transactions and other significant
events in a manner that allows the documentation to be readily available for examination. …
Documentation and records are properly managed and maintained.”

By not verifying that staff inputs accurate contract data into CBIS, OPO is unable to determine
the correct amount of funds available to return to OPM’s program offices upon contract closeout.

Recommendation 2

We recommend that OPO implement internal controls to ensure that contract data, including
contract award amounts, is accurately recorded in OPM’s information systems, such as CBIS,
and the appropriate supporting documentation is maintained.

OPO’s Response:

OPO concurs with this recommendation and has begun taking steps to address the
recommendation, including:
    	 “actively engag[ing] the Office of the Chief Financial Officer … to ensure greater data
       accuracy across the          and Consolidated Business Information System (CBIS)
       systems”;
    	 “work[ing] with [Office of the Chief Financial Officer] to review and revalidate past
       guidance, to train new staff, and to address these contracts” not converted successfully to
                and CBIS and that require additional corrective measures;
      “reviewing [the Office of the Chief Financial Officer’s weekly mismatch9] reports on a
        regular basis”;
      “develop[ing] new, previously unestablished guidance for the file review and compliance
        process. The action plan … includes the refreshed/new file review and compliance

9
 The Office of the Chief Financial Officer completes a weekly mismatch report which is posted to OPM’s intranet,
THEO. Reports provide top level reasons for mismatches between CBIS and           , but do not include differences
found between the systems and established contract files.


                                                    12 	                      Report No. 4A-CA-00-15-041
          process policy to be finalized in late fiscal year 2016, early fiscal year 2017. This
          process will support contract file compliance while validating content against CBIS and
                   data. In addition, OPO is currently updating the Contract File Table of Contents
          policy to be finalized and implemented in late fiscal year 2016”; and
       	 receiving “funding … in September 2015 for contractor support which includes contract
          file support and contract closeout. The contract was awarded in September 2015.”

3.	 Weak Controls over the Contract Closeout Process

   OPO needs to strengthen its internal controls over the contract closeout process. Specifically,
   OPO could not provide a listing of contract closeouts for FY 2013 and FY 2014. In addition, of
   the 60 contracts we sampled, we identified 46 in which OPO did not initiate the contract closeout
   process in compliance with the FAR.

   The control deficiencies in the contract closeout process exist, in part, due to the following:
       CBIS,            , and FPDS not being fully utilized to track and manage contracts that need
         to or have been closed out.
       The identification of contracts to be closed is a manual, time intensive, process.
       Other OPO responsibilities, such as approving contracts, take precedence over contract
         closeouts.
       Incomplete or no contract closeout documentation exits in OPO’s contract files.

   Details regarding the 46 contracts that we questioned were provided to OPO separate from this
   report.

   FAR Subpart 4.804-5(a), Procedures for closing out contract files, states, “[t]he contract
   administration office is responsible for initiating (automated or manual) administrative closeout
   of the contract after receiving evidence of its physical completion. At the outset of this process,
   the contract administration office must review the contract funds status and notify the contracting
   office of any excess funds the contract administration office might deobligate.”

   FAR Subpart 4.804-1(a), Closeout by the office administering the contract, states that:

      “(1) Files for contracts using simplified acquisition procedures should be considered closed
      when the contracting officer receives evidence of receipt of property and final payment,
      unless otherwise specified by agency regulations.

     (2) Files for firm-fixed-price contracts, other than those using simplified acquisition
     procedures, should be closed within 6 months after the date on which the contracting officer
     receives evidence of physical completion.


                                                13 	                   Report No. 4A-CA-00-15-041
  (3) Files for contracts requiring settlement of indirect cost rates should be closed within 36
  months of the month in which the contracting officer receives evidence of physical
  completion.

  (4) Files for all other contracts should be closed within 20 months of the month in which the
  contracting officer receives evidence of physical completion.”

GAO’s Standards for Internal Control in the Federal Government states that “[m]anagement
clearly documents internal control and all transactions and other significant events in a manner
that allows the documentation to be readily available for examination. … Documentation and
records are properly managed and maintained.”

As a result of the control deficiencies identified for the contract closeout process, as well as the
issues identified under Finding 2 of this report, we cannot determine if $108,880,417 in
remaining open obligations, associated with the 46 questioned contracts, are still available for
use by OPM’s program offices.

Recommendation 3
                                                                                  OPO Did Not
We recommend that OPO develop an accurate inventory of FYs 2013                    Initiate the
and 2014 contracts ready for closeout.                                          Closeout Process
                                                                                 for More Than
OPO’s Response:                                                                  $108 Million in
                                                                                 Open Contract
OPO concurs with this recommendation and two immediate actions                     Obligations
were taken to address this recommendation:

(1) “Adjustment of the total number of federal contracting staff to better align with workload; as
      well [as] provide policy development and compliance/oversight functions.”

(2) 	“A significant list of contracts potentially ready for closeout action was developed in
    conjunction with the [Office of the Chief Financial Officer] and various program offices,
    which was provided to the contractor … .” It is important to note that numerous
    deobligations earmarked for action are not ready for closeout for various reasons, and the list
    provided does not merely isolate 2013 and 2014 contracts but presents a list of contracting
    actions ranging back to 2004. OPO is working towards closing out not only actions from
    2013 and 2014, but actions across the full list.”




                                               14 	                   Report No. 4A-CA-00-15-041
Recommendation 4

We recommend that OPO establish and implement management controls to ensure that contracts
are tracked and managed through the closeout process and adequate documentation is maintained
in the contract files, including evidence of contract completion and closeout.

OPO’s Response:

OPO concurs with this recommendation.

“OPO is currently in the process of developing file review checklists and updating guidance on
the file review process.” See OPO’s response to recommendation 2.

Recommendation 5

We recommend that OPO provide documentation to verify that the closeout process has been
administered on the open obligations for the 46 contracts questioned.

OPO’s Response:

OPO concurs with this recommendation.

“Resource limitations continue to be an impeding factor in OPO’s ability to adequately support
contract closeout … As OPO is able to gain critical additional resources necessary in
successfully supporting the closeout process, contracting actions ready for closeout shall be
appropriately addressed, to include those on the OIG contracts questioned list, and the supporting
tracking, management, oversight, and compliance efforts associated with the closeout process are
thoroughly and completely conducted.”

Recommendation 6

We recommend that OPO deobligate the $108,880,417 in open obligations, for the 46 contracts
questioned, if support cannot be provided to show that the contract should remain open and the
funds are still being utilized.

OPO’s Response:

OPO concurs with this recommendation.




                                             15                    Report No. 4A-CA-00-15-041
“Through OPO and [O]CFO collaboration, a review of the deobligation and closeout processes is
underway. It is expected that these efforts will produce an agency strategy for addressing and
prioritizing those critical actions. As OPO is able to gain additional resources necessary in
successfully supporting both the deobligation and closeout processes, contracting actions ready
for closeout and funds available for deobligation shall be appropriately addressed.”




                                           16                    Report No. 4A-CA-00-15-041
IV. MAJOR CONTRIBUTORS TO THIS REPORT
INTERNAL AUDITS GROUP

         , Auditor

          , Auditor

           , Lead Auditor

          , Auditor

         , Auditor-in-Charge




        , Senior Team Leader


                , Group Chief 





                                  17   Report No. 4A-CA-00-15-041
                                                    APPENDIX
 




                                             600 Arch St., Suite 3400, Philadelphia, PA 19106


           Office of
    Procurement Operations

                                                                                                May 5, 2016

               MEMORANDUM FOR:
                                             Chief
                                             Internal Audits Group

               FROM:          	              NINA M. FERRARO
                                             Senior Procurement Executive
                                             Office of Procurement Operations

               SUBJECT: 	                    Draft Report on the Audit of the U.S. Office of Personnel
                                             Management’s Office of Procurement Operations’ Contract
                                             Management Process (Report No. 4A-CA-00-15-041)

               Thank you for providing us the opportunity to respond to the Office of the Inspector General
               (OIG) Draft Report on the Audit of the U.S. Office of Personnel Management’s Office of
               Procurement Operations’ Contract Management Process, dated March 31, 2016.

               We recognize that even the most well run programs benefit from external evaluations and we
               appreciate your input as we continue to enhance our program. Our responses to your draft
               recommendations are provided immediately below.

               GENERAL COMMENTS ASSOCIATED WITH THE DRAFT REPORT

               Overall the Office of Procurement Operations (OPO) is in agreement with the recommendations
               presented in this draft report. In an attempt to strengthen the final document we recognized
               several areas where suggested revisions would more accurately reflect the data and
               circumstances presented, thereby ensuring a complete report suitable for public release. Those
               areas are provided below for further consideration.

               Page 1, within the “OPO Contracting Management Process” it is noted that a reorganization
               occurred during the audit. We recommend that an additional line be added here that clearly
               states the reorganization realigned duties and functions and that the five teams listed have since
               changed as well as their roles and responsibilities. OPO would be pleased to provide the
               breakdown of the reorganized team with new team functions for inclusion in the report, to ensure
               it represents the most current information available.

               Page 2, A. “Prior to Award”, we suggest that other critical Program Office responsibilities be
represented in this section. Acquisition planning and requirements development which are
critical steps in the pre-award phase are not mentioned. For example, we suggest that the second
sentence be revised to include the following “….an approved requisition, statement of work,
government estimate, market research, and acquisition plan as required from the requesting
program office……”

Page 2, “Contract Type, Firm Fixed Price”, we suggest referencing the Federal Acquisition
Regulation (FAR) 16 definition and associated language here as the FAR 42 references seem
somewhat out of place for the particular section. Additionally, we suggest “firm-fixed-price” be
used throughout, where applicable.

Page 3, similarly, top level representation of the process may omit critical steps and/or over-
generalize certain terms.
   	 First paragraph on the page (after the bullets) use caution with the blanket use of “CS”.
       For example, the third sentence should read, “….CO selects a contractor……” the CS
       does not have the authority to make such a decision.
   	 Following paragraph, the terms “RFQ” and “RFP” as well as “proposals” are referenced
       in association with each other. Please note a proposal and a quotation are different
       solicitation instruments under the FAR, and represent different processes and procedures
       in terms of authorities and manner in which awards are made. We suggest that, at a
       minimum, the term “proposals” be replaced with “proposals and/or quotations.” We also
       suggest that the report include a note explaining that the term “contract” as used
       throughout the report, means “contracts, orders, agreements, and calls”, all of which are
       different and represent varying processes and procedures under the FAR.

Page 4, second paragraph, the process by which OPO and the applicable Program Office
administer a contract is more extensive than represented. For example, those contracting officer’s
representative (COR) duties and functions are outlined in established OPM Contracting Policy
1.602-2, which is being refreshed by OPO at this time. Those efforts are extensive and include
monitoring performance, reviewing routine deliverables and addressing invoices. Additionally,
the closeout process which is outlined in established OPM Contracting Policy 4.804 is extensive
and represents shared responsibility between both OPO and the applicable Program Office. For
example, physical completion of the effort is not the only requirement for closeout. FAR 4.804-5
includes 15 represented tasks associated with closeout, all of which are critical steps in the
process.

Page 4, the Open Obligation Report itself, does not permit the ability to administer contract
closeouts. The closeout process is extensive and requires Program Office initiation, among other
requirements. This does not appear to be fully depicted in the report. Additionally, the Open
Obligation Report includes active contract actions that are not in a position to be closed out

                                                  
                                                                   Report No. 4A-CA-00-15-041
because performance is still ongoing. Suggest stating that “CFO’s Open Obligation Report” may
be used as a tool for Program Offices and Contracting members alike to consider and potentially
initiate the closeout process.”

Page 5, we recommend all references to the “Realty Specialist” be removed and replaced with
“Management Analyst” to accurately reflect the current title of the position held by the OPO
team member supporting the Suspension and Debarment program.

Page 21, upon further discussion with the OIG team member                 on April 20, 2016,
the quantity of contract actions referenced within recommendations 5 and 6 should be adjusted to
46.

RESPONSES TO THE DRAFT REPORT RECOMMENDATIONS

Recommendation 1
We recommend that the Office of Procurement Operations strengthen its internal controls by
working with OPM’s Internal Oversight and Compliance (IOC) office to implement corrective
actions to address the findings and recommendations reported in the Strategic Assessment Report
issued by Calyptus Consulting Group, Inc., on April 23, 2015.

Management Response: CONCUR
As offered in our response to the Notice of Findings and Recommendations (NFR) # 4, dated
January 22, 2016, OPO will work with OPM’s Internal Oversight and Compliance (IOC) on the
development and maintenance of a corrective action plan to address the findings and
recommendations reported in the independent Strategic Assessment Report issued on April 23,
2015. Additionally, OPO will work with IOC to track and monitor the implementation of
corrective actions already underway and those yet to be completed. Many of the efforts
represented in the action plan, discussed with the OIG team on November 20, 2015, have already
been successfully executed and numerous others are underway.

Recommendation 2
We recommend that the Office of Procurement Operations implement internal controls to ensure
that contract data, including contract award amounts, is accurately recorded in OPM’s
information systems, such as CBIS, and the appropriate supporting documentation is maintained.

Management Response: CONCUR
As offered in our response to Notice of Findings and Recommendations (NFR) #5, dated January
26, 2016, OPO has actively engaged the Office of the Chief Financial Officer (OCFO) to ensure
greater data accuracy across the         and Consolidated Business Information System (CBIS)
systems. At this time CFO maintains ownership over the          and CBIS systems and the


                                                 
                                                                  Report No. 4A-CA-00-15-041
interface between the two. It is important to note that when           and CBIS were introduced at
OPM in 2009, a large scale transition was required to upload those contracts awarded before the
introduction of the new systems. Since this time, OPO has incurred significant turnover of
personnel and leadership. OCFO has advised the current OPO leadership team that those
contracts converted successfully in the past were done so through OCFO and OPO (formerly
FSC) collaborative efforts based on previously issued guidance. Other contracts, however,
continue to require additional corrective measures and OPO plans to work with OCFO to review
and revalidate past guidance, to train new staff, and to address these contracts. In addition,
OCFO completes a weekly mismatch report which is posted to THEO. Those reports provide top
level reasons for mismatches between CBIS and              , but do not include differences found
between the systems and established contract files. OPO, exercising greater control, is reviewing
these reports on a regular basis to further understand if a mismatch is represented in the
and CBIS data, whether the inconsistency is also represented in the contract file, and if so the
approach taken to address the variances. A mismatch that is completely validated by the
corresponding OPO Contracting Officer (CO) in coordination with OCFO shall be corrected,
through a modification or update to the respective system. Additionally, through the contract
closeout process which OPO will continue as resourcing permits, those dated inconsistencies
from the past shall be addressed.

OPO recognizes the need to ensure complete and accurate contract files are available and
accessible. Numerous requested files were not available and subsequently did not allow for a
complete review. The process of developing, maintaining, and routinely reviewing contract
actions and the supporting contract files is critical to the success of not only the contracting
office but of OPM. The importance of those efforts required to maintain complete and accurate
files was further emphasized through a Senior Procurement Execute (SPE) broadcast bulletin
dated October 1, 2015.

One of the recommendations provided in the April 2015 independent review was the
implementation of periodic file review compliance checks. OPO is currently in the process of
developing file review checklists and updating guidance on the file review process, as an internal
control mechanism. OPO is also involved in ongoing efforts to refresh established policies and to
develop new, previously unestablished guidance for the file review and compliance process. The
action plan developed by OPO based on the recommendations and findings offered through the
independent assessment of OPM’s contracting operation completed in April 2015, presented to
the OIG in November 2015, includes the refreshed/new file review and compliance process
policy to be finalized in late fiscal year 2016, early fiscal year 2017. This process will support
contract file compliance while validating content against CBIS and              data. In addition,
OPO is currently updating the Contract File Table of Contents policy to be finalized and
implemented in late fiscal year 2016. This policy will help promote the completeness and
accuracy of files in accordance with the FAR.


                                                  
                                                                   Report No. 4A-CA-00-15-041
OPO has taken steps to immediately address those contract files which are incomplete.
Additional contractor support to address contract closeout and the proper documentation
associated with those efforts has been initiated. Specifically, funding was received by OPO in
September 2015 for contractor support which includes contract file support and contract
closeout. The contract was awarded in September 2015. The contractor began work on preparing
contract files, coordinating with program offices to confirm physical completion of the contract,
and notifying vendors of the closeout process, in accordance with OPM’s Closeout of Contract
Files Policy. In early January 2016 the Contractor finished the first part of the contract close-out
requirement and OPO is assessing the results to determine the path forward in completing
contract close-out efforts. The above referenced contractor support assisting with contract
closeouts has provided critical, additional resources that have during the process of preparing the
closeout files been able to locate and consolidate documentation allowing for a complete contract
file of record to be assembled. Resource limitations continue to be an impeding factor in our
ability to adequately address contract closeout requirements and associated file maintenance. 
Based on those findings represented within the independent assessment and the OIG audit
detailed in the subject draft report, OPO has included resourcing support requests on its
unfunded listing. Additionally, we intend to include additional resourcing requests in the FY18
budget formulation process.

OPO is also actively working with OCFO to address the Digital Accountability and
Transparency Act of 2014 (DATA Act) requirements which deeply impact the accessibility and
accuracy of agency data. Additional steps have also been taken by OPO to engage the Small
Agency Council (SAC) which it is an active member of, to further explore how other like-
agencies have begun implementing DATA Act requirements. It is anticipated that OPO’s efforts
associated with addressing the DATA Act, both internal and external, will sure up the
accessibility and accuracy of procurement data across our established systems.

Recommendation 3
We recommend that OPM’s Office of Procurement Operations identify and provide a listing of
FYs 2013 and 2014 contracts ready for closeout to support that OPO has a documented inventory
of closed contracts.

Management Response: CONCUR
An independent assessment of OPM’s contracting operation, initiated by OPO, was completed in
April 2015. One of the recommendations provided by this assessment was to increase the
contracting resources to better align with the workload. OIG, in its draft report, further identifies
resourcing shortfalls as a primary risk that has contributed to the report findings. Shortfalls in
contracting resources is directly associated with this recommendation as well as several more
offered below, specifically where critical closeout efforts could not be conducted at the necessary


                                                   
                                                                     Report No. 4A-CA-00-15-041
level because the resources to do so were not available.

Two immediate actions were taken by OPO to begin addressing this recommendation:

(1)	     Adjustment of the total number of federal contracting staff to better align with workload;
        as well provide policy development and compliance/oversight functions. This action
        included the following:
                a. 	   Requested and received approval for 11 additional hires over previously
                       approved staffing levels
                b. 	   Reviewed OMB Benchmarking results for similarly situated contracting
                       offices to assess performance and staffing
                c. 	   Created and filled new senior positions to support procurement policy
                       development and compliance/oversight functions

Additional contracting staff, including the addition of policy development and
compliance/oversight functions, will help to ensure in the future that contracts are closed out
timely and in accordance with the FAR and OPM policy and procedures.

(2) 	   Provided contractor support to address contract closeout. Specifically, a limited amount
        of funding was received by OPO in September 2015 for contractor support which
        includes contract file support and contract closeout. The contract was awarded in
        September 2015. A significant list of contracts potentially ready for closeout action was
        developed in conjunction with OCFO and various program offices, which was provided
        to the contractor supporting the above-mentioned contract award.

In response to this recommendation, the above referenced list is being offered. The list was
developed in coordination with the OCFO and the deobligation actions they are tracking. It is of
critical importance here to note that numerous deobligations earmarked for action are not ready
for closeout for various reasons, for example, performance is still active on many of those
awards. The list provided does not merely isolate 2013 and 2014 contracts but in effect presents
a list of contracting actions ranging back to 2004. In an effort to maintain the momentum
generated through recent recommendations received and additional resources recognized, OPO is
working towards closing out not only actions from 2013 and 2014, but actions across the full list.
Additionally, through a collaborative approach with OCFO, OPO will play a critical role in an
agency-wide, comprehensive “war room” event. This event, scheduled for May 11-12, 2016, will
cover several topics including end of fiscal year planning and preparation as well as
identification of priority deobligation and closeout actions. Furthermore, OPO will continue to
actively seek additional funding and resources in order to successfully address critical contract
closeout efforts.



                                                   
                                                                    Report No. 4A-CA-00-15-041
Recommendation 4
We recommend that OPM’s Office of Procurement Operations establish and implement
management controls to ensure that contracts are tracked and managed through the closeout
process and adequate documentation is maintained in the contract files, including evidence of
contract completion and closeout.

Management Response: CONCUR
Resource limitations continue to be an impeding factor in OPO’s ability to adequately support
contract closeout, which includes critical tracking and management functions. Inadequate
resourcing leading up to this audit has created a significant backlog of actions that need to be
addressed. Absent available resources at this time OPO is not able to immediately and
successfully address the referenced closeout backlog, while also addressing more current
closeout actions and satisfying critical operational efforts that directly impact the day to day
mission of OPM.

Through OPO and CFO collaboration, a review of the deobligation and closeout processes is
underway. It is expected that these efforts will produce an agency strategy for addressing and
prioritizing those critical actions. As OPO is able to gain additional resources necessary in
successfully supporting both the deobligation and closeout processes, controls shall be set to
ensure those efforts are properly tracked and managed. Additional policy development and
compliance/oversight functions will help to ensure in the future that contracts are closed out and
excess funds deobligated in a more timely manner and in accordance with the FAR and OPM
policy and procedures.

The process of routinely reviewing contract actions and the supporting contract files is critical to
the success of not only the contracting office but of OPM and are not being isolated to the
closeout process in review. The importance of those efforts required to maintain complete and
accurate files was further emphasized through a SPE broadcast bulletin dated October 1, 2015.
One of the recommendations provided in the April 2015 independent review was the
implementation of periodic file review compliance checks. OPO is currently in the process of
developing file review checklists and updating guidance on the file review process.
Subsequently, OPO is currently involved in ongoing efforts to refresh established policies and to
develop new, previously unestablished guidance for the file review and compliance process. The
action plan developed by OPO based on the recommendations and findings offered through the
independent assessment of OPM’s contracting operation completed in April 2015, presented to
the OIG in November 2015, includes the refreshed/new file review and compliance process
policy to be finalized and implemented in late fiscal year 2016, early fiscal year 2017. In
addition, OPO is currently updating the Contract File Table of Contents policy to be finalized in
late fiscal year 2016. This policy will ensure that files are complete, accurate and in accordance
with the FAR.


                                                   
                                                                     Report No. 4A-CA-00-15-041
Additionally, OPO has taken steps to immediately address those contract files which are
incomplete. The above referenced contractor support assisting with contract closeouts has
provided critical, additional resources that have during the process of preparing the closeout files
been able to locate and consolidate documentation allowing for a complete contract file of record
to be assembled. As funding is made available, OPO anticipates the continuation of these efforts.

Recommendation 5
We recommend that OPM’s Office of Procurement Operations provide documentation to verify
that the closeout process has been administered on the open obligations for the 48 contracts
questioned.

Management Response:
Upon further discussion with the OIG team member                  on April 20, 2016, the
quantity of contract actions referenced within recommendations 5 and 6 should be adjusted to 46.

In response to this recommendation, OPO has updated and is providing the list of 46 OIG
contracts in question which was updated to include a status of closeout column. Resource
limitations continue to be an impeding factor in OPO’s ability to adequately support contract
closeout, which includes critical tracking and management functions. Inadequate resourcing
leading up to this audit has created a significant backlog of actions that need to be addressed, this
includes the closeout process. Absent available resources at this time OPO is not able to
immediately and successfully address the referenced closeout backlog, while addressing more
current closeout actions and satisfying critical operational efforts that directly impact the day to
day mission of OPM. As OPO is able to gain critical additional resources necessary in
successfully supporting the closeout process, contracting actions ready for closeout shall be
appropriately addressed, to include those on the OIG contracts questioned list, and the supporting
tracking, management, oversight, and compliance efforts associated with the closeout process are
thoroughly and completely conducted.

Recommendation 6
We recommend that OPM’s Office of Procurement Operations return $108,880,417 in open
obligations, for the 48 contracts questioned, to the program offices if support cannot be provided
to show that the contract should remain open and the funds are still being utilized.

Management Response:
Upon further discussion with the OIG team member                  on April 20, 2016, the
quantity of contract actions referenced within recommendations 5 and 6 should be adjusted to 46.

In response to this recommendation, OPO has updated and is providing the list of 46 OIG
contracts in question which was updated to include a status of closeout column. Resource
limitations continue to be an impeding factor in OPO’s ability to adequately support contract
closeout, which includes critical tracking and management functions. Inadequate resourcing

                                                   
                                                                     Report No. 4A-CA-00-15-041
leading up to this audit has created a significant backlog of actions that need to be addressed, this
includes the closeout process. Absent available resources at this time OPO is not able to
immediately and successfully address the referenced closeout backlog, while addressing more
current closeout actions and satisfying critical operational efforts that directly impact the day to
day mission of OPM.

Through OPO and CFO collaboration, a review of the deobligation and closeout processes is
underway. It is expected that these efforts will produce an agency strategy for addressing and
prioritizing those critical actions. As OPO is able to gain additional resources necessary in
successfully supporting both the deobligation and closeout processes, contracting actions ready
for closeout and funds available for deobligation shall be appropriately addressed. This includes
critical tracking, management, oversight, and compliance efforts associated with the successful
execution of the closeout process.

SUMMARY/CONCLUSION

OPO believes that several of the OIG’s audit findings and recommendations pertaining to
availability and accuracy of agency data are directly associated with the age and present
capabilities of OPM’s financial/procurement system. The OCFO has requested funding to
address interim improvements to CBIS, including but not limited to supporting an upgrade to
OPM’s contract writing system,          . The current version is no longer supported by
               , and upgrading to            , along with other software upgrades, is expected to
provide needed functionality and interfacing with critical systems such as the Federal
Procurement Data System, Next Generation (FPDS-NG). If OCFO funding requests are satisfied,
OPO expects to begin satisfying recommendations and findings and in turn reducing the level of
risk the agency faces. However, such improvements will take time to be implemented/realized
and recent increases, some of which only temporary in nature, have not yet been enough to
address longstanding gaps that have resulted in a variety of risks in the acquisition lifecycle.

Finally, as a result of OPO’s proactive efforts, we were able to self-identify several risks in the
acquisition process through our independent contracting assessment completed one year ago.
Given those findings and recommendations have now been validated by OIG through this draft
audit report, OPO expects to utilize the information to help better support and defend the
organization’s needs in upcoming budgetary cycles. We note that immediate and interim needs to
address Calyptus and OIG findings are subject to additional approval of unfunded needs across
the agency.

OPO appreciates the opportunity to respond to the draft findings and recommendations. If you
have any questions regarding our response, please contact                 at                 or
                @opm.gov.




                                                   
                                                                     Report No. 4A-CA-00-15-041
                                                                                                                         



                                       Report Fraud, Waste, and 

                                           Mismanagement 


                                                  Fraud, waste, and mismanagement in
                                               Government concerns everyone: Office of
                                                   the Inspector General staff, agency
                                                employees, and the general public. We
                                              actively solicit allegations of any inefficient
                                                    and wasteful practices, fraud, and
                                               mismanagement related to OPM programs
                                              and operations. You can report allegations
                                                          to us in several ways:


                        By Internet: 	             http://www.opm.gov/our-inspector-general/hotline-to-
                                                   report-fraud-waste-or-abuse


                          By Phone: 	              Toll Free Number:                              (877) 499-7295
                                                   Washington Metro Area:                         (202) 606-2423


                           By Mail:                Office of the Inspector General
                                                   U.S. Office of Personnel Management
                                                   1900 E Street, NW
                                                   Room 6400
                                                   Washington, DC 20415-1100
                     
                                                                                                                         
                                                                                                                         
                                                             -- CAUTION --
This audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit report may
contain proprietary data which is protected by Federal law (18 U.S.C. 1905). Therefore, while this audit report is available under the Freedom of
Information Act and made available to the public on the OIG webpage (http://www.opm.gov/our-inspector-general), caution needs to be exercised before
releasing the report to the general public as it may contain proprietary information that was redacted from the publicly distributed copy.