DATE:	June 7, 2005
MEMORANDUM TO:	Stephen M. Beard
	Deputy Assistant Inspector General for Audits
	Office of Inspector General
FROM:	Michael E. Bartel, CIO and Director
	Dirvision of Information Technology
SUBJECT:	Response to the Draft Report Entitled , Status of Virginia Square Phase II Construction (Assignment Number 2005-021)

Thank you for the opportunity to review and comment on the Office of Inspector General’s (OIG) subject draft evaluation report dated May 24, 2005. The Division of Information Technology (DIT) recognizes that subsequent to this draft report, the FDIC Chief Operating Officer (COO) and Chief Financial Officer (CFO) approved the Division of Administration’s Option III plan to consolidate staff at the 1776 F Street and Virginia Square Phase (VASQ) I locations while housing DIT contractors in the VASQ Phase II location.

In reviewing the draft report, DIT appreciates the OIG’s recognition of the reasonableness of our assumed savings estimates and is pleased that the OIG agrees that there are security-related benefits to having contractor personnel on-site. DIT does, however, have one general concern that we believe should be addressed in the final report. On four occasions in the eleven-page draft, it is stated that the OIG, “could not determine with certainty the number of contractor personnel that DIT actually planned to move on-site or whether the number would fluctuate over time.” Recognizing that this evaluation report will be published and available to the public in final form, DIT is concerned that the draft report’s repetitive treatment of the estimates of future DIT contractor personnel may raise undue concern on the part of a casual reader if it is not placed in the proper context. As such, DIT requests that the OIG include additional language in the final report that recognizes the following key reasons why future DIT contractor personnel numbers cannot be definitively determined:

• Contracts being consolidated under ITAS are being phased in over time;
• Contractor workload can fluctuate significantly with changing IT requirements;
• Contractor personnel numbers fluctuate as new vendors take on tasks from former vendors, i.e., ramp up typically involves a larger number of contractor staff initially and then trails off to a smaller figure as the vendor becomes familiar with the task; and finally,
• Contractor personnel numbers fluctuate as the new vendors identify and implement best practices across the enterprise, thereby increasing contractor personnel efficiencies.

If you have any questions regarding this response, please contact Rack Campbell, DIT Audit Liaison on 516x1422.

cc:	Steven P. Anderson, DIT
	Gerard A. Russomano, DIT
	Rack D. Campbell, DIT
	James H. Angel Jr., OERM
	Arleas Upton Kea, DOA
	Andrew O. Nickle, DOA

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