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Interior, Pentagon Faulted In Audits

Unnamed contracting officials were quoted in the Defense audit as saying that they went to Interior to save time.

"We used DOI because they are able to expedite the contracting process," one Defense official said.

Another said that the Defense office "did not have enough contracting people to handle the requirements."

The Interior procurement operations were allowed to charge fees for managing contracts on behalf of other government agencies. One of the operations, GovWorks, is located in Herndon. The other is the Southwest Acquisition Branch of the National Business Center at Fort Huachuca, Ariz., an Army base.

Defense paid Interior management fees of up to 4 percent for everything from pistol holsters to intelligence consultants to office leases. The Defense inspector general said the Pentagon could have saved $22.8 million by using the U.S. General Services Administration (GSA).

The Interior inspector general said Defense "could have used these monies to purchase as many as 50,000 sets of body armor to protect our soldiers."

At the Southwest Acquisition Branch office in Arizona, the auditors concluded, $411 million worth of deals were struck without a fundamental step in government contracting: review and approval by properly trained and certified contracting officers.

The Defense auditors found that nearly half of the 49 contract files they reviewed failed to document that the prices "were fair and reasonable." Contracting officials relied upon e-mailed statements and cursory reviews from the Pentagon, rather than "documenting a detailed analysis of the contractor's proposal."

At Interior, there was little supervision of the work. The Defense inspector general "questioned the adequacy of government surveillance for 23 of the 24 contracts" -- or 96 percent of the total reviewed in one analysis.

Key documents were missing from contract files. "Lack of good documentation can create serious problems," the auditors noted. "If it is not documented, it never happened."

The findings prompted the inspector general's office to demand that the Pentagon stop using Interior's contracting shops.

The auditors singled out two contracting arrangements for particularly sharp criticism. In 2002, the Pentagon opened a new office called Counterintelligence Field Activity, known as CIFA, which supervises protection at Defense facilities against terror attacks.

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