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Audit (A-04-08-01059)

01-12-2010
Review of the Centers for Disease Control and Prevention’s Compliance With Appropriations Laws and Acquisition Regulations—Contractor A

Executive Summary

Our audit, initiated in response to a congressional request, found that a CDC service contract and eight sampled task orders awarded to a small business referred to as “Contractor A” did not always comply with appropriations laws and acquisition regulations with respect to personal service contracts and contract funding. By using contractor personnel for personal services, CDC violated the Federal Acquisition Regulation, which states that obtaining personal services by contract circumvents civil service laws. CDC also violated the bona fide needs statute by extending periods of performance beyond 1 year and expending $1.1 million of annual appropriations outside their 1-year period of availability. CDC complied with appropriations laws and acquisition regulations with respect to competition, inherently governmental functions, and pricing.

We recommended that CDC (1) identify any active contracts or task orders currently being administered as personal service contracts and take action to correct their administration, (2) develop and implement policies and procedures to prevent CDC officials from administering task orders as personal service contracts, (3) determine whether the $1.1 million expended outside the 1-year period of availability violated the Anti-Deficiency Act and take action to correct any such violations, and (4) develop and implement policies and procedures to ensure compliance with appropriations statutes and acquisition regulations regarding obligating and expending funds.

In comments on our draft report, CDC disagreed that it administered the task orders awarded to Contractor A as personal service contracts and did not directly address our first recommendation. Nevertheless, CDC described actions that it had taken or planned to take in response to our second recommendation. CDC agreed with our last two recommendations. We maintain that CDC should identify any contracts or task orders currently being administered as personal service contracts and take corrective action.

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