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DOT Hit on Contractor Suspension Data

Friday, October 24, 2014

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The U.S. Department of Transportation is doing a poor job of managing its system for banned contractors, putting the entire government at risk of contracting with dishonest parties, a new audit reports.

With billions of taxpayer dollars in play, the DOT is responsible for adhering to federal suspension and debarment (S&D) regulations, which "exclude parties found to be unethical, dishonest, or otherwise irresponsible from receiving contracts and grants involving federal funds."

However, the department's method of dealing with bad actors is untimely and frequently inaccurate, according to "DOT's Suspension and Debarment Program Continues to Have Insufficient Controls," an Office of Inspector General Audit Report issued Oct. 15.

4 Year Follow-Up

The agency's shoddy performance is not new. The OIG reported in January 2010 that DOT's S&D program lacked the controls necessary to prevent awarding federal contracts to excluded parties.

suspension and debarrment reporting
© / damircudic

A new audit report says the Department of Transportation's suspension and debarrment system is riddled with errors and late entries.

The OIG conducted a follow-up review between March 2013 and September 2014 to assess:

  • The timeliness of DOT's decisions to suspend, debar or take other actions; and
  • The timeliness and accuracy of the agency's reports to the government-wide S&D System for Award Management (SAM).

The audit involved reviews of federal and DOT S&D policies, interviews with DOT procurement representatives, and analysis of DOT and SAM data.

The conclusion: Although DOT has acted to strengthen its program, "problems with delayed S&D decisions and untimely and inaccurate reporting persist."

4-Year Delays, 92% Errors

For example, DOT is required to decide within 45 days whether to enter an individual or company into the Suspension & Debarment System.

However, the agency missed that deadline in 87 of 218 cases between April 2010 and April 2013, auditors said. Delays averaged 205 days and ranged from two to 1,373 days.

DOT's S&D system was also found to be riddled with significant data errors. For example, Federal Highway Administration officials reported inaccurate data for 92 percent of its S&D parties, including blank entries and incorrect dates in critical fields, auditors said.

Many errors related to the initial decision date, which is used to calculate compliance. In one case, the FHWA's initial decision date was almost 16 months earlier than the date DOT entered.

"These data errors undermine the system's effectiveness as a management tool," the report stated.

'Untimely and Inaccurate'

DOT also frequently missed its deadline for entering exclusion actions into SAM, auditors said.

Exclusion actions are supposed to be reported into SAM within three days for procurement transactions and five days for other transactions.

DOT ultimately reported exclusion actions for 144 of the 218 parties reviewed, but missed the reporting deadline on a significant number of them, the audit found. Delays averaged 175 days and ranged from three to 679 days.

"The Department continues to provide untimely and inaccurate reporting of its S&D actions to SAM," the report stated. For example, auditors identified seven parties listed as suspended or debarred in DOT's S&D system but not included in SAM.

DOT audit
© / levkr

Federal Highway Administration officials said the DOT system had inaccurate data for 92 percent of its S&D parties. The errors included blank entries and incorrect dates in critical fields.

The SAM entries also contain numerous spelling errors and incorrect or incomplete data, the report stated.

"By failing to report these data, the Department puts the Federal Government at risk of doing business with prohibited parties found to be unethical, dishonest, or irresponsible," auditors said.

Errors & Ambiguities

The auditors laid some of the problems to ambiguities in DOT's S&D reporting requirements. The process outlined uses vague language and does not accurately reflect federal timeframes or the transition to SAM.

DOT's Office of the Senior Procurement Executive (OSPE) attributes weaknesses in S&D program oversight "to its lack of staffing resources and expertise," auditors said.

The senior OSPE official charged with overseeing the program said the office's focus was grant management, with S&D oversight a "collateral duty."

Therefore, the audit said, OSPE has not fulfilled the oversight mandates outlined in the DOT S&D order. For example, OSPE is required to regularly hold S&D meetings with DOT stakeholders but did not convene a meeting until March 2014.

7 Recommendations

The OIG recommended that DOT:

1. Implement a process for OSPE staff to regularly evaluate compliance with timeframes for initiating an S&D action and reporting to SAM;

2. Require Operating Administrations to establish or update their S&D procedures and implement federal requirements and the DOT Order, including requirements to report exclusions and check SAM before awarding contracts;

3. Implement procedures for regularly verifying data reported to the DOT S&D system;

4. Develop a data dictionary that defines each DOT S&D data field and identifies which to populate;

5. Revise the DOT S&D Order to reflect the transition to SAM;

6. Implement a process for OSPE to regularly reconcile data in the DOT S&D system and SAM; and

7. Conduct and document quarterly internal S&D meetings.

OSPE's Response

In its response to the draft report Sept. 25, OSPE concurred with Recommendations 1 and 3-7, and partially concurred with Recommendation 2.

Office of Inspector General
OIG Audit Report

"By failing to report these data, the Department puts the Federal Government at risk of doing business with prohibited parties found to be unethical, dishonest, or irresponsible," the report stated.

For Recommendation 2, OSPE said it would strongly encourage recipients to review SAM but could not require them to report exclusions unrelated to the grant award without regulatory guidance. OSPE did not say if it would require recipients to report exclusions related to the grant award, and the OIG has requested clarification.

The OIG said it also still considered Recommendations 1 and 7 unresolved. In the first case, OIG said proposed revisions included "vague S&D policy language" like that which contributed to the past and current problems.

OSPE asked that Recommendation 7 be closed based on the meetings that started in March. However, auditors said the office had provided only agendas and sign-in sheets, which it was told earlier was insufficient to document the substance of the meetings.

OSPE has 30 days to provide additional information for Recommendations 1, 2, and 7.


Tagged categories: Contractors; Contracts; Department of Transportation (DOT); Ethics; Federal Highway Administration (FHWA); Government contracts; North America; Program/Project Management

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