Contract Management

Contract Management

Minimal Compliance With New Safeguards for Time-and-materials Contracts for Commercial Services and Safeguards Have Not Been Applied to GSA Schedules Program : Report to Congressional Committees

Website or Online Data - 2009
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Federal agencies have used time-and-materials (T&M) contracts to purchase billions of dollars in services. These contracts are risky because the government bears the risk of cost overruns. Effective February 2007, the Federal Acquisition Regulation (FAR) was revised, pursuant to a statutory change, to allow T&M contracts to be used to acquire commercial services under FAR Part 12, which uses a streamlined procurement process. Certain safeguards were included in FAR Part 12, including a requirement that contracting officers prepare a detailed determination and findings (D&F) that no other contract type is suitable. Based on a mandate to review the use of T&M contracts for commercial services, we assessed (1) agencies' reported use of such contracts and what they acquired, (2) the degree to which agencies complied with the new safeguards, and (3) the applicability of the safeguards to General Services Administration (GSA) schedule contracts. GAO reviewed contracts and orders at DOD and civilian agencies and spoke with contracting officials. GAO recommends that OFPP take steps to clarify the FAR regarding labor-hour contracts and to explicitly apply the Part 12 safeguards to the GSA schedules program, and that it provide guidance to contracting officials on the Part 12 D&F. In oral comments, OFPP agreed with our recommendations. The other six agencies in our review also concurred or had no comment.


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