Senior officials from the General Services Administration pressured subordinates to accept federal technology contracts with higher-than-necessary prices and unfavorable terms, according to a watchdog report released Tuesday.
GSA Inspector General Brian D. Miller found that directors for the agency’s technology -acquisition division improperly intervened when contracting staff members determined that certain proposals were not in taxpayers’ best interests.
Miller said the findings raise “serious issues affecting the integrity of our acquisition system,” adding that “contracting officers need an environment in which they are free to make judgments, conclusions and findings without undue interference.”
The GSA, which manages federal properties and facilities, placed one supervisor on administrative leave and promised to review the contracts to determine whether they should be canceled or renegotiated. It also said it would examine its contracting policies and controls.
The report cited the agency’s three largest contracts for 2011, worth $900 million, for Oracle, Carahsoft and Deloitte. It said company officials directly contacted agency management when concerns were raised about their offers, undermining the authority of the lower-level contracting personnel.
In one example, a whistleblower told the investigators, “The pressure is coming from my boss, who has told me he doesn’t want Carahsoft to call their congressman. They have already called their congressman before.”
Oracle declined to comment for this article. Carahsoft said it was a planning a response to the audit.
Deloitte on Tuesday defended its contract. “We believe our negotiations with GSA were at all times appropriate and conducted in good faith,” spokesman Jonathan Gandal said. “In fact, the final negotiated rate structure is significantly lower than in the previous contract and provides substantial savings to taxpayers.”
Contracting staff members said GSA supervisors and company officials failed to provide requested information to justify the financial agreements.
Staff members told investigators that they feared for their jobs because they were trying to do the right thing and protect the taxpayers’ interests, according to the report.
“This is one of those situations that can be career-altering,” one employee told auditors.
Sarah Breen, a spokeswoman for the inspector general’s office, said investigators did not determine how much additional money the government spent because of the mishandled contracts.
GSA spokeswoman Mafara Hobson noted that the contracts in question preceded the arrival of Acting Commissioner Daniel M. Tangherlini, who took the helm after a 2012 inspector general’s report revealed lavish conference spending by the agency.
“The integrity of the . . . procurement process is critical to the work GSA does every day,” Hobson said. “Under GSA’s new leadership, the agency has already taken action to address the OIG’s recommendations and will continue working to ensure the integrity of the procurement process.”
The office of Sen. Thomas R. Carper (D-Del.), who chairs the Senate subcommittee that oversees the GSA, said the report is “disturbing and raises many troubling questions.” Carper spokeswoman Jennie Westbrook said the senator will work with committee colleagues and the administration to prevent similar incidents from happening again.