Special Report on Investigation of NFCS Contract

Pursuant to a congressional request, GAO investigated potential wrongdoing revealed during its audit of the Department of Agriculture's (USDA) 1987-88 Nationwide Food Consumption Survey (NFCS), focusing on whether: (1) any conflicts of interest existed between USDA and the survey contractor; and (2) the contractor submitted proper contract charges to USDA for payment under the NFCS contract.

GAO found that: (1) although no evidence existed to suggest that any conflicts of interest occurred between USDA personnel and the contractor, the contractor's headquarters concluded that it had never conducted the nonresponsive follow-up survey and that its personnel misapplied charges for NFCS work to the billings for another USDA contract; (2) the contractor informed USDA and GAO that the nonresponse follow-up survey had been completed, but that it lost the documentation to support the survey during a relocation; (3) the contractor's project director said that although she was responsible for NFCS data, she had not been involved in a nonresponse followup, was unaware the contract called for a followup, and did not know if a followup had been done; (4) the officer in charge of NFCS did not provide any information regarding the conflicting information; (5) the contractor's attorneys concluded that the contractor had not conducted the follow-up survey and lied about the lost documentation to avoid embarrassment regarding its failure to perform the contractually required task; (6) the contractor's attorneys acknowledged that the officer in charge of NFCS told contract management, USDA, and GAO that the data had been lost; (7) the contractor's attorneys stated that, during May and June 1990, the contractor ordered several of its employees to charge NFCS work to another USDA contract; (8) the contractor's attorneys said that the contractor also provided misinformation regarding the NFCS nonresponse follow-up survey and mischarged time; and (9) the attorneys indicated that the contractor was willfully cooperating with ongoing investigations.