Job Corps Should Stop Using Prohibited Contracting Practices and Recover Improper Fee Payments

Gao ID: HRD-82-93 July 2, 1982

GAO conducted a survey of the Department of Labor's Job Corps contract administration.

The Job Corps Regional Offices seemed to be administering contracts for center operations on the basis of cost-plus-percentage-of-cost rather than cost-plus-fixed-fee. However, Federal law prohibits the cost-plus-percentage-of-cost system of contracting. Out of 74 contracts administered, at least 39 were identified that seemed to have been treated as percentage-of-cost contracts or as having had the fee increased without corresponding changes in the scope of the work. Examples of the latter were found in all 10 Job Corps regions. Use of the percentage-of-cost system appeared to result from a misunderstanding of Federal regulations by regional contracting officials. These misunderstandings were attributed by some officials to a lack of properly trained contracting personnel. Although officials have been aware of the fee problem for over a year, they have not taken any corrective action.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Morton E. Henig Team: General Accounting Office: Human Resources Division Phone: (202) 275-5365


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