Treasury cancels request for help offloading contracting shop

This week, the Treasury Department quietly rescinded a request issued less than a month ago for help from a contractor in finding a new home for the FedSource governmentwide contracting center.

The request for proposals sought a contractor to assist Treasury in identifying another federal agency that could serve as a host for FedSource, a largely fee-based organization that operates as a business-style government entity to offer contracting services to other agencies. The contractor would negotiate a different agency's acceptance of the franchise fund and help with the transition to the new host, according to the RFP. All work would have been completed within four months.

Treasury spokeswoman Eileen Gilligan said the RFP was canceled Wednesday without public announcement. She said the request was issued on Dec. 20, 2006, and again on Jan. 4, 2007, but she would not say how it was distributed or publicized. The solicitation was not available on the normal portal for government business opportunities, FedBizOpps.gov.

"The department no longer has a requirement to secure a consultant to plan the future of FedSource," Gilligan said of the cancellation.

According to the solicitation, Treasury wanted to move fast on divesting itself of FedSource but was potentially interested in preserving a business relationship between FedSource and the Administrative Resource Center, another Treasury franchise fund organization that provides it with contracting support.

Under the current arrangement, FedSource, which is officially hosted by Treasury's Bureau of Public Debt, places individual task orders against overarching contracts set up by ARC. The solicitation called for a contractor to assess whether ARC, which has a staff of about 500 people and serves 63 small agencies, should continue to work with FedSource and, if appropriate, how that business relationship should be configured.

The spokeswoman did not respond to questions about the reasons behind Treasury's attempt to rid itself of the purchasing group, and would not say if the effort had been called off altogether. An assistant to the FedSource chief executive officer, Iris Greenburg, said the CEO was not authorized to speak to the press.

A recent Defense Department inspector general study of contracts secured through FedSource was critical of the organization's work. But the IG did not recommend that Defense, a major client, stop purchasing through the group.

After reviewing a sample of 61 task orders worth about $37.8 million, the IG found every purchase was significantly flawed. There were problems with the levels of competition, the market research conducted and contract monitoring, among other things. The investigation also turned up 21 potential violations of the Anti-Deficiency Act, which bars spending in excess of appropriations.

Interagency contracting appears on the Government Accountability Office's list of high-risk government activities, due in part to concerns about contract oversight responsibilities.

A spokeswoman for the Office of Management and Budget declined to say whether the administration had been consulted in Treasury's move to offload FedSource. "We understand that Treasury's management is in the process of conducting a review of FedSource's activities," she said. "We will be following up with Treasury to discuss their findings."