tfED STA/.
U.S. Environmental Protection Agency	21-P-0094
March 10, 2021
•	UiOi 11 I V 11 Ul 11 I ICr I I Id I I I UICUII
AA \ Office of Inspector General
At a Glance
Why We Did This Audit
The U.S. Environmental
Protection Agency's Office of
Inspector General conducted
this audit in response to a
hotline complaint regarding
contract and bidding
irregularities with three major
information technology
contracts. The purpose of this
audit was to determine
whether (1) equipment
purchased under EPA contract
EP-W-07-024 was properly
purchased under the contract
and transferred to current
contracts in accordance with
Federal Acquisition Regulation
requirements and (2) EPA
contracts EP-W-18-007 and
EP-W-18-008 were properly
awarded in accordance with
Federal Acquisition Regulation
competition requirements.
The Office of the Chief
Financial Officer plans, sets
standards, and develops and
deploys financial and
resources management
systems. The Office of Mission
Support plans, awards, and
administers contracts.
This audit addresses the
following:
•	Operating efficiently and
effectively.
•	Compliance with the law.
This audit addresses a top
EPA management challenge:
•	Complying with key internal
control requirements (policies
and procedures).
Address inquiries to our public
affairs office at (202) 566-2391 or
OIG WEBCOMMENTS@epa.gov.
EPA Improperly Awarded and Managed Information
Technology Contracts
What We Found
In violation of Federal Acquisition Regulation
requirements and contract clauses, the EPA
purchased 23 pieces of hardware and software
equipment under an expiring information
technology contract awarded to CGI Federal. This
purchase was outside the scope of the contract
and was ultimately never used for that contract.
The EPA then improperly solicited bids for one of
two subsequent contracts and transferred the equipment to use on the new
contract. By approving the purchase, the EPA improperly spent $641,680 in
federal funds.
We also found that the EPA issued task orders under all three contracts
without approval from the chief information officer, which is required under the
Federal Information Technology Acquisition Reform Act. This resulted in the
EPA spending $52.5 million in taxpayer funds without proper approvals.
The Agency also mismanaged these contracts with respect to monitoring
property and licenses. For example, the EPA underreported and incorrectly
identified purchased equipment in the Agency's property reporting system
and did not record $1.18 million in software licenses in the Agency's asset
management system.
Recommendations and Planned Agency Corrective Actions
We make ten recommendations in this report, including that the chief financial
officer recover the $641,680 of unallowable equipment purchased under the
expired contract and document split-funding approvals. We also recommend
that the assistant administrator for Mission Support determine whether to
terminate the improperly awarded subsequent contract and rebid a new
contract, institute controls to prevent improper spending, and verify all
information technology contracts are approved by the chief information officer.
Further, we recommend that the assistant administrator for Mission Support
tighten control regarding compliance with the Federal Information Technology
Acquisition Reform Act.
The EPA agreed with all ten recommendations and provided acceptable
corrective action plans or completed corrective actions. The Agency
completed eight of our recommendations, and two recommendations are
resolved with corrective actions pending. We also revised our report where
appropriate based on technical comments provided by the Agency.
The Agency needs to
improve its oversight
of long-standing
contractors, like CGI
Federal, to improve
operations and be a
better steward of
taxpayer dollars.
List of OIG reports.

-------