Senator calls for “housecleaning” at Federal Technology Service
The chairman of the Senate Finance Committee is seeking a "thorough housecleaning" of the Federal Technology Service in the wake of a federal audit that said the agency may have violated numerous procurement laws and regulations, affecting hundreds of millions of dollars in government spending.
In a letter sent Tuesday to General Services Administration chief Stephen Perry, Sen. Chuck Grassley, R-Iowa, reacted to the audit released last week by the GSA's inspector general, saying FTS apparently had "violated existing laws and regulations" by limiting competition on contracts, awarding contracts improperly and misusing federal funds.
FTS is a subsidiary of GSA and buys information technology on behalf of other federal agencies for a fee. The inspector general's review found that three FTS regional offices have been in breach of laws and regulations for at least the past three years.
Despite the fact that FTS' regional offices are supposed to buy only technology goods and services, Grassley said the audit's findings "give every appearance of [the offices] having run virtually unchecked and amok, and have committed almost every conceivable contracting irregularity."
Among other improper actions, the audit found that FTS offices in Bremerton, Wash., Kansas City, Mo., and Atlanta used technology funds to buy construction services, marine equipment and biological materials on behalf of their agency clients. The Kansas City office was using small business contracts as conduits to make awards to subcontractors that were selected by FTS' clients, the audit said.
In one case, an FTS contractor passed through 100 percent of the orders it received to a subcontractor, and the company collected referral fees that totaled more than $2 million, the audit revealed. Employees in Bremerton also used those small business contracts to disguise their nontechnology purchases, listing them as miscellaneous labor costs, the audit showed.
Grassley said an admission of responsibility by GSA and FTS officials wasn't adequate, given the severity of the audit's findings. "Simply appearing contrite and saying 'mea culpa' will not be sufficient in this case," he wrote to Perry. "As I see it, a thorough housecleaning of FTS is in order -- from top to bottom."
On Tuesday, FTS officials said they were "in the process of reviewing the concerns Senator Grassley has raised" and would respond in a timely fashion.
"We take this matter very seriously and fully agree that adherence to proper contracting laws and regulations is extremely important," said GSA spokeswoman Mary Alice Johnson. "We have been and will continue to take aggressive actions to remedy the problems that have been found and prevent future recurrences."
Agency commissioner Sandra Bates has said her staff is implementing an "action plan" to address procurement violations. The agency has instructed its staff about the proper use of contracts and funds, she said.
Officials have declined to say whether they are pursuing disciplinary action against any employees or whether officials have referred any matters to criminal investigators.
Grassley told Perry that he wants to know "what steps GSA has taken or is taking to identify those who have engaged in these practices, and whether GSA will take appropriate actions against all those who were involved." The senator asked for Perry's response by Feb. 3, 2004.