Stronger Controls Needed Over Federal Agency Contracting for Moving and Labor Services

Gao ID: PSAD-80-76 September 29, 1980

GAO reviewed General Services Administration (GSA) and other agency moving and labor service contracts in the Washington, D.C., area. Although GSA can award moving contracts to meet agencies' needs, many agencies choose to contract their own, often resulting in higher prices. Agencies predominantly use indefinite quantity, labor-hour contracts to meet moving and labor service requirements. Payments under these contracts are made based on contractor labor hours furnished at fixed rates, which include the contractor's labor costs, overhead, and profit. When this type of contract is used, it is essential that agencies provide for adequate control over the contract to assure that services are performed efficiently.

GAO found that agency control over contract actions under the labor-hour contracts was very weak. GAO estimated that almost $150,000 in possible discounts were lost at three agencies. GAO found that fixed-price contracts showed the greatest savings potential for specific office relocations. The manner in which agencies used moving and labor service contracts suggested the existence of improper personal service contracts. Contractors furnished laborers daily to agencies, and government personnel provided direction and supervision of the laborers. The consistent and extensive use of contract laborers by some agencies indicates that these agencies may have used the moving and labor service contracts to circumvent personnel ceilings. Improvements in control and management over labor-hour contracts are needed to ensure that only needed services are procured; contract provisions are enforced; and the potential for misuse, fraud, and abuse is eliminated.


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