THE GENERAL Accounting Office, familiarly referred to as the watchdog of Congress, has been caught napping. The Senate Governmental Affairs Committee issued a report last week charging that the oversight agency had wasted several million dollars on a contract for a computer system that it finally had to abandon. The project failed, according to the report, because of "longstanding deficiencies in GAO's procurement activities." GAO says that the fault lies partly with its contractor, Boeing Computer Services. Whoever is to blame, the matter is an object lesson in how government procurement -- even in an agency that purports to be expert in such matters -- can go astray.
The GAO started off properly enough with a competitive bidding process, letting the prospective contractors know that it had only $15 million to spend. Most bidders stayed within the limit. But BCS, a division of the big aerospace corporation, originally estimated the job at $33 million and submitted an initial bid of $21.2 million, according to the report.
The GAO review team, however, judged the BCS proposal best on technical merits, and the firm was invited, along with two others, to submit a "best and final offer." BCS then dropped its bid to $13.9 million -- with no details about how the savings were to be achieved -- and won the contract in mid-1981. Not long thereafter, according to the committee report, a GAO internal audit report suggested that BCS's lower bid might simply be a "buy-in" -- a classic ploy in which a contractor submits an unrealistically low bid knowing that it can probably get contract add-ons to complete the work. An audit review also noted that the government work specifications were stated vaguely and that, since the contractor was to be reimbursed for its costs, GAO bore all the risk if the work was not completed on the agreed terms.
From there on, things ran predictably. Boeing fell further and further behind, GAO (tardily) increased its contract supervision and added more money, hoping to get a finished product. Last summer, with almost $13 million already spent and only one-fifth of the work completed, GAO made its best management decision: it cut its losses and terminated the Boeing contract.
One reason these mistakes are repeated, even in a watchdog agency, is that the federal government finds it difficult to recruit and hold the experts in data processing design and management. These people are needed to ensure that the government gets its money's worth. That's a problem both Congress and the GAO need to tend.