Published: Sep 25, 2026. Publicly Released: Sep 25, 2026.
Fast Facts
In 2021, GAO did not make modifications to its facility maintenance contract to reflect the contractorâs adjusted labor rates from a collective bargaining agreement, which cost about $94,000 more than the previous rates. The OIG also found GAO could clarify its procurement guidance regarding subcontracting and its procedures for GSA schedule procurements.
GAO agreed to strengthen its invoice approval and modification processes, took action to modify the contractâs labor rates, and developed guidance on subcontracting. GAOâs additional planned actions will support the accuracy of future payments and improve efficiencies for agency staff.
A pen on top of a contract document.
Highlights
What the OIG Found
Proper contract administration is critical to ensure GAO complies with contract terms and conditions. In FY 2019, GAO entered into a blanket purchase agreement for commercial facility maintenance (the BPA), which it awarded under the General Services Administration (GSA) Schedule program. After subsequent modification, the BPAâs maximum value was about $119 million.
Although the contractor submitted adjusted labor rates from a collective bargaining agreement, GAO did not modify the BPA and associated time-and-materials orders to reflect these higher rates before payment. As a result, the agency paid about $94,000 more than the previously negotiated rates during the second option year. GAO was unable to explain why the BPA and the associated orders were not modified prior to payment.
The OIG also observed that GAOâs standard operating procedures for procurements did not provide clear guidance on evaluating a contractorâs charges for indirect costs or profit on work performed by a subcontractor when the contractor adds no or only negligible value (excessive pass-through charges). The OIG also found that GAO could clarify its policies and procedures regarding the applicability of federal regulations for contracting by negotiation to GSA schedule procurements. The lack of clarity could result in procurement staff taking unnecessary steps. The agency indicated it had updated its procedures regarding subcontracting and was in the process of updating its policies for GSA schedule procurements.
By enhancing its oversight of contract modifications and invoice approvals, GAO could ensure that payments are consistent with negotiated rates. Further, GAOâs updated policies and procedures regarding excessive pass-through charges and future updates to the applicable procurement processes when using the GSA schedule could strengthen GAOâs acquisition program and improve efficiencies for procurement staff.
Why the OIG Did This Audit
Careful contract administration, especially concerning invoice review and approval, is critical to ensure GAO pays the correct labor rates for time-and-materials orders.
The OIG conducted this audit to assess time-and-materials orders issued under the BPA.
Recommendations
GAO concurred with the OIGâs recommendation to strengthen oversight for contract modifications and invoice processing. GAO created a standard operating procedure to address subcontracting and potential pass-through charges. The agency also provided evidence it modified the BPA to incorporate the adjusted labor rates. GAO is in the process of updating policies regarding procurements made using the GSA schedule and will take additional steps such as providing appropriate training and verifying all orders under the BPA include the appropriate labor rates.
Full Report
Topics
Source: Reports News from the GAO
