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Summary

On August 14, 2008, we issued an interim report regarding the Volpe National Transportation Systems Center’s Transportation Information Project Support (TRIPS) contract as a part of our ongoing audit of the Use of Cost–Plus–Award–Fee (CPAF) contracts within the Department. We found that the performance evaluation plan did not include measurable criteria needed to adequately evaluate contractor performance. Further, the descriptions defining adjectival ratings were vague and inconsistent and did not clearly define the basis for rating performance. This resulted in performance monitors arbitrarily determining which ratings they believed best reflected how well the contractor performed. The effect of having evaluation criteria without clearly defined metrics, and vague and conflicting adjectival ratings, could result in inflated contractor performance evaluations and inappropriately approved award fees. Additionally, contracting officials did not justify the cost–effectiveness of selecting a CPAF–type contract by evaluating administrative costs versus expected benefits to the government. Without this evaluation, Volpe had no assurance that a CPAF–type contract was appropriate. Senior Volpe officials are implementing actions to meet the intent of our recommendations by clearly identifying measurable award–fee criteria for assessing contractor performance. We also recommend Volpe acquisition officials reevaluate the use of award–fee contracts for future TRIPS procurements.