U.S. Army and Marine Corps

This report expands on a July 1993 testimony (GAO/T-OSI-93-2) that concluded that the Army had abused the contract "offloading" process and had circumvented the Competition in Contracting Act of 1984 when it steered a three-year, $8-million contract to the Computer Services Corporation. Neither the Army nor the Marine Corps did an initial costs analysis, and the government had no guarantee that the price for the work was fair. In addition, appropriated funds were spent for purposes other than that for which they were intended, and both the Army and the Marine Corps violated federal regulations governing contracting officers and computer purchases--problems that GAO attributes to poor contract oversight. GAO also discovered conflicts of interest between U.S. Army civilian employees and the contractor. GAO discovered that on at least one independent government cost estimate, costs had been "padded" at the direction of an Army employee who was married to a Computer Services Corporation employee.

GAO found that: (1) the Army has placed orders for subtasks under an expired Marine Corps contract for engineering support services and failed to obtain prior approval for those subtasks; (2) the Army's acquisition and installation of a training system is outside the scope of the contract; (3) the Army has circumvented CICA by offloading the procurement onto the Marine Corps' contract; (4) the Army and the Marine Corps have failed to perform a cost analysis before offloading the tasks and follow regulations to determine the propriety of the order; (5) the Army has used appropriated funds for other than their intended purposes; (6) the Army and Marine Corps have failed to keep accurate records; (7) two government employees whose spouses are contractor employees have substantial involvement and financial responsibilities concerning the procurement; and (8) a former Army officer hired by the contractor has participated in contract negotiations.