IG Cites Irregularities on Sole-Source 8(a) Contracts Homeland Security Department contracting officers skated around the rules in awarding two sole-source contracts to 8(a) firms, according to the department’s inspector general. The IG said both contracts appeared to be manipulated to evade the $3.5 million limit on sole-source 8(a) awards. One was an indefinite delivery procurement of recruitment advertising services with an estimated value of $12 million. The contract was awarded on May 31, 2007, at a value of one cent. Just five days later a delivery order for $4 million was issued under this procurement, exceeding the $3.5 million threshold where competition is required on 8(a) contracts. The IG said the acquisition plan and other documentation in the procurement file indicated that the project costs were expected to exceed the threshold. Contract staff said they met with several 8(a) firms to receive presentations about their ability to provide the services, but the DHS staff could not provide supporting documentation on how the 8(a) firms’ proposals were evaluated. The second 8(a) contract also involved a 2007 IDIQ procurement that appeared designed to skirt the competition requirement. This procurement for acquisition support services was estimated at $3,498,500, barely less than the $3.5 million competitive threshold. “Documentation in the file indicated that efforts were intentionally made to keep the amount just under the competitive threshold,” the IG said. “This suggests that there may have been an aversion to competition.” The file also indicated that the need for administrative and acquisition contract support was an ongoing requirement. DHS awarded another contract for the same services to the same vendor in fiscal year 2008 and planned to do likewise in 2009, the IG said. The contractors involved were not named. The IG examined 82 noncompetitive procurements from 2007 with a reported value of more than $417 million. Auditors found that 70 of them were not awarded according to regulations, usually because documentation and justifications were missing from the files. The IG blamed the problems on personnel shortages and inadequate controls. DHS officials said they are working to address the concerns. DHS awarded $3.1 billion on a noncompetitive basis in 2007, one-fourth of its total contract dollars. The report is OIG-09-04, available at www.dhs.gov/xoig.