The Division of Administration (DOA) has completed its review of the subject Office of
Inspector General (OIG) report. DOA appreciates the OIG for its acknowledgement that the
DOA Acquisition Services Branch (ASB) generally complied with the Acquisition Policy
Manual’s (APM) solicitation and evaluation requirements and achieved adequate price
competition for the purpose of obtaining fair and reasonable prices. Although the OIG found
general compliance, the OIG did report one recommendation that pertained to orders placed
against the General Services Administration’s (GSA) Multiple Award Schedule (MAS)
contracts. We have evaluated the finding and have provided a detailed response to the
recommendation made.
MANAGEMENT DECISION
Finding: Requesting Price Reductions on GSA MAS Contracts
Condition: The FDIC requested price reductions on only one of the seven contracts in our
sample that had been awarded through the GSA’s MAS program and that exceeded the MAS
maximum order threshold. APM guidance does not require that price reductions be routinely
requested from a MAS contractor on orders exceeding the maximum order threshold.
Consequently, the FDIC may not be taking full advantage of additional discounts that may be
offered as a result of competition, technological changes, and other factors in the commercial
market place.
Recommendation: OIG recommends that the Director, DOA, revise the APM to require the
CO to seek price reductions on contracts awarded through GSA’s MAS program unless there are
extenuating circumstances, or based on price analysis or other assessment, the CO determines
that the MAS contract price represents the best value at the lowest possible price. In such cases,
the CO should be required to document the reason for not seeking a price reduction.
Management Response: DOA agrees with the OIG’s assertion that prices established on GSA
Federal Supply Schedules or Multiple Award Schedules should be carefully evaluated. FDIC
cannot merely assume these GSA prices offer the best value for FDIC requirements. However,
in each of the contracts reviewed by the OIG, the prices paid by FDIC were determined to be fair
and reasonable and to represent the best value for the FDIC based on adequate competition. In
none of these examples did the FDIC Contracting Officer rely on the GSA prices alone.
DOA does not believe it is necessary or appropriate to establish a requirement for Contracting
Officers to request discounts from the GSA schedule prices in all situations. Each procurement
action must be evaluated based on the unique circumstances surrounding the immediate
procurement. To require discounts be requested in every instance is not consistent with the need
to have each action stand on its own. However, we do agree that the Contracting Officer must
adequately document the basis for determining the price to be fair and reasonable and the best
value for the FDIC. The Associate Director for Acquisition Services has formally reminded all
ASH personnel of their responsibility to carefully evaluate all prices being offered and to provide
adequate documentation that the price is fair and reasonable.
ASB has recently established a training program for contracting personnel. This program
requires that all personnel take a formal class in the area of price evaluation. Exposure to this
type of training should help improve the ability of ASB personnel to make sound evaluations of
price reasonableness based on the unique circumstances of each negotiation.
If you have any questions regarding the response, our point of contact for this matter is Andrew
Nickle, Audit Liaison for the Division of Administration. Mr. Nickle can be reached at (202)
942-3190.
