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Summary: USAID policy requires that contracts exceeding $10 million be reviewed at various stages of the procurement process. However, the contract for the [...] program was not reviewed in accordance with this policy. This occurred because mission officials initially believed that the threshold for review was higher than $10 million. As a result, the contract was not adequately reviewed, exposing the Agency to possible legal action and contributing to contract ambiguities.
Reviewing the legal aspects of contracts before their execution is a common business practice. Similarly, USAID’s Automated Directives System (ADS) 302.3.1.2 requires that acquisition actions, such as contracts, that exceed $10 million be reviewed by USAID’s Contract Review Board (CRB).
The CRB reviews these actions to minimize USAID’s vulnerability to potential legal action, provide senior-level advice on contracting actions, and to support contracting officers. As part of this effort, the CRB includes attorneys from the Office of General Counsel experienced in Government contracting.
ADS 302.3.1.2 also requires that contracting officers submit actions to the CRB at the presolicitation, competitive range determination, and preaward stages of the procurement process. In submitting actions, the Contract Review Board Guidelines (a mandatory reference to ADS 302) recommends that contracting officers allow ample lead time to accommodate CRB review and to respond to mandatory findings.
General Recommendations
- Notify acquisition staff of USAID requirements related to the Contract Review Board and establish a management control to help ensure that all prospective awards that meet the requirements for review by the Contract Review Board are submitted in a timely manner to the Board.
Source: AUDIT REPORT NO. 4-674-11-004-P JANUARY 4, 2011
The recommendations are derived from audit reports of the Office of the Inspector General. The source refers to the audit report, which is available on this site as part of the Audit Database Project: an educational tool for compliance with USAID regulations. Please see the disclaimer of this site before using recommendations.
- Assistance Awards and Requirements - ADS 303 - ADS 621.3.4
- Certification Regarding Responsibility Matters - FAR 9.104-6 - FAR 9.105-2(b) - FAR 9.4
- Excluded Parties List System Reviews During the Bidding and Awarding Process - FAR 9.404 - 22 CFR 208 - ADS 502.5.1b - FAR 9.405(d) - FAR 9.105-2(b)
- Strengthen Program Oversight - ADS 302
- Implementer Performed Unauthorized Program Activities - ADS 202.3.6.1
- Ensure That Funding Requests Are Appropriate - ADS 602.3.2
- Strengthen Oversight of Renovation Activities - FAR Part 36, “Construction and Architect-Engineer Contracts” - GAO/AIMD-00-21.3.1 (11/99), page 20
- Mission Did Not Complete Contractor Performance Review - USAID Acquisition Regulation 742.15 (also known as 48 CFR 742.1502) - FAR 42.1502
- Contracting Officials Did Not Document Contract Files or Communicate Adequately - 22 CFR 226 - FAR 4.801 (b)
- Fixed-Amount Reimbursement Agreements Reduce Risk - ADS Supplemental 317
- Questionable Spending Occurred - Federal Acquisition Regulations 52.216-7 and 52.216-8 USAID Acquisition Regulation 752.7003 FAR Subpart 31.2-Contracts with Commercial Organizations
- Contracting Mechanism Used for Program is not Appropriate - Federal Acquisition Regulation 16.505(a)(2) - supplemental policy to ADS 302, Indefinite Quantity Contract (IQC): Task Order Work Statement Development Checklist - Competition in Contracting Act
- Lack of Effective Program Oversight - ADS 302-Procedures for Designating the COTR for Contracts and Task Orders - ADS 303- Agreement Officer’s Technical Representative (AOTR) Designation – Cooperative Agreement Administration.
- Subcontracts Lacked Supporting Documentation and Were Susceptible to Fraud - (FAR) 31.201-2(d)
- Voluntary Population Planning Language Was Not Included in Subcontracts - USAID Acquisition Regulation (AIDAR) 752.7101, Voluntary Population Planning Activities
- Appropriate Records Were Not Retained - Federal Acquisition Regulation (FAR) 52.215-2, Audit and Records – Negotiation
- Source Origin Requirements Were Not Met - ADS 310, Source, Origin, and Nationality of Commodities - the Foreign Assistance Act Section 604 - ADS 310.5.5
- Approval for Subawards Was Not Obtained - 22 CFR Part 226, Administration of Assistance Awards to U.S. Non-Governmental Organizations, Section 226.25(c)(8)
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