Agency Doesn’t Know Why It Approved $26 Million in Federal Contracts
Policy + Politics

Agency Doesn’t Know Why It Approved $26 Million in Federal Contracts

The U.S. Patent and Trademark Office has been under scrutiny for widespread abuse of its telecommuting program. Over the last few years, federal auditors have said agency employees collected about $5 million in salaries and bonuses despite not working while they were on the clock.

Now the agency again faces criticism for lax oversight issues, this time at a far higher cost.

Related: Federal Workers Goof Off, Get Paid When They Don’t Have Enough to Do

A new report from the inspector general has found that the Patent and Trademark Office “insufficiently monitored” federal contracts that are already at risk of high cost overruns because of the way they’re designed.

Federal agencies have long known they need to be more fiscally responsible in order to cut waste and eliminate abuse of valuable taxpayer money – yet the Patent and Trademark Office, which employs over 12,000 workers and is run by former Google executive Michelle K. Lee, still has a long way to go.

The IG reviewed $35 million worth of so-called time-and-material contracts for information technology service providers in fiscal year 2012. It found that contracts totaling $26 million not only lacked adequate oversight, they lacked a clear justification for why they were even awarded in the first place.

While this represents just a sampling, the agency approves about $130 million worth of these types of contracts each year.

The new findings are particularly troubling because the time-and-material contracts are vulnerable to cost overruns. The contractors’ profit is also tied to the number of hours worked, so “the government assumes the risk for cost overruns,” the IG explained.

Related: Federal Government Pays Workers $5 Million to Not Work

Given that risk, federal policies require agencies to provide close oversight of contractor performance to ensure they’re using their time efficiently. Yet the new audit makes clear the agency isn’t doing that – leaving tens of millions of dollars vulnerable to waste and abuse.

Among other things, the IG found that the agency never made sure employees tasked with providing oversight of the contracts were properly trained or certified to do their jobs.

The auditors recommended that the Patent and Trademark Office come up with a new action plan within 60 days to improve the training and oversight of contracts – and the agency concurred with the IG’s recommendations.

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