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Audit (A-04-09-01066)

11-12-2010
Review of the Centers for Disease Control and Prevention's Compliance With Appropriations Laws and Acquisition Regulations-Contractor D

Executive Summary

In this congressionally requested review, we found that a 2003 CDC information technology service contract and six sampled task orders awarded to a company referred to as "Contractor D" did not fully comply with appropriations laws and acquisition regulations with respect to contract funding and pricing. Specifically, for three of the six task orders, CDC used annual appropriations to pay for expenses incurred after the appropriations' 1-year period of availability had expired. Additionally, CDC did not sufficiently document price or cost analyses under all six task orders. As a result, CDC violated the bona fide needs statute by expending $1.6 million of annual appropriations beyond their period of availability and did not ensure that the pricing of task orders and modifications totaling $73 million was fair and reasonable.

The contract and sampled task orders complied with acquisition regulations with respect to competition, inherently governmental functions, and personal services.

We recommended that CDC (1) determine whether the $1.6 million expended outside the 1-year period of availability violated the Antideficiency Act and, if so, report the violation as required; (2) develop and implement policies and procedures to address compliance with appropriations statutes and acquisition regulations regarding obligating and expending funds; and (3) implement and monitor the effectiveness of policies and procedures for documenting determinations of fair and reasonable pricing. In response, CDC described its corrective actions to address each of our recommendations.

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