We performed this audit to review PBGC's contract administration of a contractor. Overall, PBGC needs to improve its administration of contracts by holding the contractor accountable for complying with the contract terms and better monitoring the performance and payment.
We identified two root causes for the $167,459 costs we questioned in the incurred cost audit report (2007-8/CA-0033-1):
- The contractor did not always verify qualifications and/or experience of their employees assigned to the PBGC contract. We found the COTRs relied on erroneous information provided by the contractor and did not evaluate the contractor's process for assigning personnel on the contract. This resulted in improper payments of $147,681 for five (5) of its employees who were not qualified under the terms of the contract; and
- The COTRs did not adequately monitor the contractor's performance and payment resulting in unallowable costs of $19,778.
We made seven (7) recommendations to strengthen the contract administration function. PBGC's Contracting Officer agreed with our recommendations and has started taking corrective actions.
Because
this report contains proprietary information, it is not publicly
available.
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