Office of Inspector General

Audit Report

WEAKNESSES IN THE OFFICE OF 

THE SECRETARY'S ACQUISITION 

FUNCTION LIMIT ITS CAPACITY TO 

SUPPORT DOT'S MISSION 

Office of the Secretary 

Report Number: ZA-2011-119

Date Issued: May 25, 2011 
U.S. Department of

Memorandum

Transportation

Office of the Secretary

of Transportation

Office of Inspector General

Subject: ACTION: Report on Weaknesses in the Office of 

the Secretary's Acquisition Function Limit Its 

Capacity To Support DOT's Mission 

Report Number ZA-2011-119 

Date: May 25, 2011

From: Lou Dixon 

Principal Assistant Inspector General for Audit and 

Evaluation 

Reply to 

Attn. of: JA-1 

To: Deputy Secretary

Deputy Assistant Secretary for Administration 

The Office of Management and Budget has called upon Federal agencies to 

improve their acquisition practices and guard against inefficiency and waste in 

order to protect the billions of taxpayer dollars spent on acquisitions each year. In 

fiscal year 2010, the Department of Transportation (DOT) spent $5.8 billion on 

contracts for goods and services. The Office of the Secretary of Transportation 

(OST) is tasked with ensuring that all of DOT's Operating Administrations use 

these funds effectively and safeguard them against fraud and abuse. Strong 

leadership and acquisition practices within OST's Office of the Senior 

Procurement Executive (OSPE)—which establishes DOT's acquisition policies 

and procedures—are critical to meet these goals.

This report presents the results of our audit to assess the effectiveness of OST's 

acquisition function focusing on its (1) organizational structure and leadership 

(2) policies and processes and (3) management controls over acquisition data. We 

conducted our audit between October 2009 and March 2011 in accordance with 

government auditing standards prescribed by the Comptroller General of the 

United States. Exhibit A details the scope and methodology we used in conducting 

this review. 
2

RESULTS IN BRIEF

OST's current acquisition organizational structure does not effectively support the 

DOT's acquisition function. In contrast to the intent of the Service Acquisition 

Reform Act of 2003,1

OSPE's written policies and procedures do not promote effective acquisition 

management. Specifically, OSPE lacks a comprehensive set of standard operating 

procedures to facilitate consistent compliance with Federal and departmental 

acquisition requirements. While OST is responsible for maintaining the 

Transportation Acquisition Regulation (TAR) and Transportation Acquisition 

Manual (TAM), long-standing staff shortages at OSPE have resulted in TAR and 

TAM policies remaining out-of-date since 2005 and 2006, respectively, even 

though OSPE was aware of the required updates and changes. Weaknesses in 

OSPE's policies and procedures hinder OST's ability to promote consistent 

implementation of acquisitions Department-wide. 

 OST's acquisition structure creates an additional layer of 

management and review that restricts the flow of information and diminishes the 

Senior Procurement Executive's (SPE) ability to effectively perform acquisitions 

in support of DOT's missions. These structural problems are further complicated 

by long-standing vacancies in leadership and staff positions within OSPE that 

prevented the office from fulfilling key procurement duties. For example, OSPE 

operated for approximately 10 months without a permanent SPE, leaving OST 

without a principal to implement procurement policies, regulations, and standards 

for Department-wide use and to account for the DOT's procurement system. These 

weaknesses not only affect the success of OST's acquisition function but also 

impact acquisitions for all of DOT's Operating Administrations (OA). 

OST also lacks the management controls needed to ensure its acquisition data are 

accurate, complete, and timely. In fiscal years 2008 and 2009, roughly one-third of 

OST's data in the Federal Procurement Data System-Next Generation 

(FPDS-NG)—the Government-wide procurement information system—were 

inaccurate.2

 

1 Public Law 108-136, Section 1421(c).

OST acquisition data are also vulnerable to compromise. We found 

that 55 of 90 former OST employees (61 percent) had full access to PRISM—

DOT's system for managing and reporting procurement data. Similarly, 29 of 53 

former OST employees (55 percent) had full access to FPDS-NG. Without 

appropriate controls, OST risks compromising the integrity of its acquisition data 

and cannot be assured of this data's usefulness in making informed management 

decisions at either the strategic or transactional level. Moreover, it cannot 

sufficiently protect Department funds from fraud, waste, or abuse. In response to 

2 Data derived from U.S. DOT FPDS-NG Data Quality Reports for 2008 and 2009.
3

our audit, OST deactivated all of its former employees' access in both systems. 

However, OST still needs to establish and implement the appropriate controls to 

prevent future occurrences of unauthorized access to the acquisition systems. 

We are making a series of recommendations to address the weaknesses we 

identified in OST's acquisition function. 

BACKGROUND 

OSPE is part of OST's Office of the Assistant Secretary for Administration. 

OSPE's mission includes ensuring that acquisition and financial assistance efforts 

strategically contribute to the achievement of DOT's mission. Two of OSPE's five 

divisions focus specifically on procurement (see Figure 1): 

Figure 1. Office of the Senior Procurement Executive

Source: OSPE Organizational Chart. Bold type signifies key acquisition positions. Red indicates 

leadership position vacant or filled temporarily during the time of our review—October 2009 

through August 2010. 

• The Acquisition Policy and Oversight Division establishes and maintains 

Department-wide policies, procedures, and regulations for all phases of 

DOT's contracting, including guidance for implementing statutes, 

regulations, policies, and procedures. The division also develops, assesses, 

and facilitates contracting improvement programs and establishes and 

maintains Department-wide procurement data systems to ensure acquisition 

and financial assistance system integrity, data quality, accuracy, and 

timeliness of reporting. 

• The Acquisition Services Division provides a full range of acquisition 

services to OST, from acquisition planning to contract closeout. As a 

headquarters service organization, the division is also responsible for the 

Commercial 

Services 

Management

IT 

Management

and

Reporting

Acquisition 

Services

Acquisition 

Policy 

and

Oversight

Financial 

Assistance 

Policy and 

Oversight 

OSPE

(SPE)

(M-60)
4

award and administration of business arrangements, including contracts and 

grants. 

To encourage efficient use of taxpayer dollars in procurement, the Service 

Acquisition Reform Act of 2003 (SARA) required DOT and other Federal 

agencies to designate Chief Acquisition Officers (CAO) and Senior Procurement 

Executives (SPE) to manage their acquisitions and procurement systems.3

In May 2008, OMB issued guidelines to Federal agencies for conducting internal 

control reviews of acquisition functions.

 CAOs 

are required to monitor the performance of acquisition activities and acquisition 

programs, evaluate the performance of those programs based on applicable 

performance measurements, and advise the agency regarding the appropriate 

business strategy to achieve the mission of the agency. 

4 The guidelines provide a standard 

approach for conducting a top-down assessment of the strengths and weaknesses 

of a Federal agency's acquisition function. All agencies identified in the Chief 

Financial Officers (CFO) Act,5

OST'S PROCUREMENT FUNCTION IS NOT STRUCTURED TO 

PROMOTE ACHIEVEMENT OF DOT'S MISSIONS

including DOT, are required to use the framework, 

beginning in fiscal year 2009. The guidelines also require agencies to integrate 

these assessments with their existing internal control processes and practices for 

acquisitions. The guidelines consist of four interrelated cornerstones, representing 

broad areas that have the greatest impact on efficiency and effectiveness, and 

laying the foundation for assessing and evaluating an agency's acquisition 

function: organizational alignment and leadership, policies and processes, 

information management and stewardship, and human capital. See Exhibit C for 

details on the cornerstones' critical elements. 

OST's procurement structure inhibits its ability to play a strategic role in 

accomplishing departmental missions and provide clear and direct communication 

to DOT's leaders. Long-standing vacancies in critical leadership positions and 

OSPE staff have contributed to weaknesses in the acquisition function, including 

hindering OSPE's ability to adequately fulfill its role as DOT's procurement leader 

and provide contract oversight Department-wide. The Department's Strategic 

 

3 The SPE position was originally required by amendments to the Office of Federal Procurement Policy Act, Public 

Law 98-191, dated December 1, 1983. 4 OMB Memorandum Conducting Acquisition Assessments under OMB Circular A-123, May 21, 2008. 5 The Chief Financial Officers (CFO) Act of 1990. Public Law 101-576, lays a foundation for comprehensive reform of 

Federal financial management and charges OMB’s Deputy Director for Management with overseeing many of the 

Federal Government’s general management functions. These functions include information policy, procurement 

policy, property management, and productivity improvement. 
5

Acquisition Council (SAC) run by OST is underutilized, and OSPE's strategic plan 

fails to link its activities to DOT's goals and missions. These weaknesses not only 

limit OST's ability to fulfill its procurement objectives effectively but could also

negatively impact OAs. 

OST's Procurement Structure Does Not Operate Effectively 

OST's procurement structure creates an ineffective flow of information and 

authority in operations. Specifically, the procurement structure does not promote 

open communication, or position acquisitions to play a strategic role in the 

Department. Under SARA, each Federal agency with a CFO is required to appoint 

a non-career official as Chief Acquisition Officer (CAO), with acquisition 

management as the primary duty. CAOs are required to monitor the performance 

of acquisition activities and programs, evaluate the performance of those 

programs, and advise agency officials regarding the appropriate business strategy 

to achieve the agency's mission. The CAO was created as a separate position from 

the SPE, although the positions can be combined. If separate, SARA requires that 

the SPE report directly to the CAO without intervening authority. 

To implement SARA requirements, the Secretary designated the Deputy Secretary 

to serve as the Department's CAO, a position separate from the SPE. However, 

DOT's current procurement authority flows from the CAO through the Deputy 

CAO to the SPE (see Figure 2), creating an organizational stovepipe. According to 

the SARA's legislative history, designating a CAO was intended to eliminate such 

stovepipes and allow the CAO to serve as a focal point for acquisition in 

day-to-day operations, as well as in the agency-wide strategic planning and 

performance evaluation processes.6

 

6 House Report No. 108-117 (1); House Committee on Government Reform, May 19, 2003, page 23. 

To perform CAO functions, the SPE should be 

in an executive-level position, and empowered and positioned within the 

organization to fulfill the functions established by SARA, which OST's current 

structure does not promote. Although originally envisioned by OST as an interim 

solution in 2004 for SARA implementation, this structure is set to remain in effect 

until changed in writing by the Secretary. 
6

Figure 2. DOT's Procurement Authority

Source: OST

Because the SPE reports to the Deputy CAO instead of to the CAO, as required by 

SARA, the SPE is not included in top-level management discussions and 

meetings, limiting the SPE's ability to promote acquisitions as a strategic 

contributor to DOT's success. Additionally, this procurement management 

structure does not elevate the acquisition authority to a level that allows 

acquisitions to play a strategic role in supporting DOT's missions. OMB has 

identified this issue as a critical factor for an acquisition function's success. In the 

current OST structure, neither the CAO's nor the Deputy CAO's duties focus 

primarily on acquisitions. Unlike other Federal agencies, DOT's SPE does not 

report directly to the CAO, and does not have sufficient authority to promote

strategic acquisition decisions and policy across the Department. 

Furthermore, the placement of and duties assigned to the SPE in OST's structure 

prevents sufficient separation of duties because the SPE could be tasked with 

conducting direct contract work that the SPE is responsible for independently 

overseeing. For example, the previous SPE was tasked with closing out7

 

7 The contract administration office is responsible for initiating administrative closeout of a contract as soon as 

practical after receiving evidence of physical completion. The closeout process is to ensure that the contractor

performed in accordance with the terms, conditions, and specifications of the contract, and that all contractual 

actions have been completed, reviewing for excess funds that should be de-obligated, and preparing statements that 

authorize the closing of contract files.

OST 

contracts. However, the SPE is responsible for independently managing and 

overseeing the contract closeout process Department-wide and it is inappropriate 

for this individual to be closing out the contracts that he or she oversees. The 

Secretary 

Deputy Secretary (Chief 

Acquisition Officer (CAO))

Assistant Secretary for 

Administration (Deputy CAO)

Senior Procurement Executive 

(SPE)
7

possibility of insufficient separation of duties will remain as long as the current 

authority structure remains in place. 

Long-Standing Vacancies in Key Leadership and Staff Positions 

Contribute to Weaknesses in OSPE's Acquisition Function 

Vacant positions at OST created critical gaps in leadership and contributed to the 

acquisition function's weaknesses. We identified four important procurement 

leadership positions that OST had not permanently filled—the Assistant Secretary 

for Administration, the Head of Contracting Activity (HCA), the SPE, and the 

Chief of Contracting Office (COCO).8 According to OMB's guidelines on 

conducting acquisition assessments, leadership is critical for establishing direction 

and vision, and if necessary, changing the culture of an organization. Three prior 

external assessments of OSPE's acquisition function came to similar conclusions 

and found that a lack of leadership contributed significantly to other weaknesses in 

the acquisition function.9

Leadership and staff vacancies have hindered the effectiveness of OSPE's 

acquisition function. OST's failure to designate a permanent SPE, and other 

acquisition positions, has hindered the proper execution of critical procurement 

duties. For example, when the former SPE left DOT in December 2009, OST 

informally assigned the SPE's responsibilities to two non-procurement managers, 

who were not in a position to adequately manage these responsibilities. In one 

instance, we found that a non-procurement manager issued an unlimited contract 

warrant to an unqualified contracting officer (CO),

 Congress has recognized the critical role leaders play in 

providing direction and vision, and required certain agencies, including DOT, to 

designate SPEs to take responsibility for the management of their procurement 

systems. 

10

As a result of our review, OST took corrective actions in July and August 2010 by

designating staff in an acting capacity with authority to carry out certain duties 

 and thus incorrectly gave the 

individual authority to award contracts of unlimited dollar amounts. All 8 OAs 

whose SAC members responded to our May 2010 survey—sent to SAC members 

from the 10 OAs that signed the SAC charter—reported an absence of OST 

acquisition oversight, leadership, and guidance. They also reported that this 

problem had become more significant since the SPE position had been vacant. 

 

8 OST filled the HCA/SPE positions in October 2010. 9 OSPE had three contractors perform assessments of its acquisition function—Martin Contract Management (2005), 

Bearing Point (2008), and NetAmerica (2009). 10 Only a warranted CO can obligate the Government. The warrant sets the level of authority that the CO cannot

exceed. There are specific education, training, and experience requirements tied to the different levels of warrant 

authority.
8

associated with three of the vacant leadership positions. However, without 

permanent leadership, OSPE is missing an element of organizational support 

needed to effectively execute the acquisition function and promote acquisitions as 

a strategic business resource in accomplishing DOT's missions. 

Three other long-standing OSPE staff vacancies have also hindered OST's ability 

to efficiently carry out its procurement responsibilities. (OSPE has filled two of 

these vacancies.) For example: 

• A team lead position—with unlimited warrant authority—became vacant in 

December 2009. OST has not yet filled the position. 

• The Associate Director of Policy and Oversight position, responsible for 

making changes to the TAR and TAM, became vacant in May 2010. OST 

filled the vacancy in December 2010. 

• The Associate Director for Commercial Services Management, who is 

responsible for the OSPE strategic plan, left in May 2010. OST filled the 

vacancy in December 2010. 

From October 2009 through July 2010, OSPE's attrition was almost 30 percentage 

points higher than the average attrition rate of the other five offices making up the 

Office of the Assistant Secretary for Administration for the same period (see 

Figure 3). Specifically, due to attrition during this period, 7 out of 21 OSPE 

positions were vacant. 
9

Figure 3. Attrition Rates of Offices Within the Office of the Assistant 

Secretary for Administration - October 2009 through July 2010

0%

5%

10%

15%

20%

25%

30%

35%

M-10

Human Resources 

(8 out of 62)

M-20

Hearings

(0 out of 8)

M-40

Security

(1 out of 28)

M-60

OSPE

(7 out of 21)

M-70

Finance

(2 out of 61)

M-90

Property & Assets

(2 out of 65)

(Attrited out of Active Employees)

Source: OIG analysis

Seven of the eight OAs' SAC members that responded to our May 2010 survey (88 

percent) attributed the OSPE vacancies and staff turnovers to the decreases in 

acquisition leadership and communication from OST. They also stated that 

because of vacancies and turnover, which date back to 2005, they do not know 

whom in OSPE to contact regarding acquisition issues and concerns. The members 

also expressed concerns about the lack of OSPE staff with a working knowledge 

of each OA's acquisition situation. 

In response to our review, OST recognized the need to stabilize and rebuild its 

SPE function. On October 24, 2010, OST officially designated an SPE for the 

Department, who is also designated as the HCA.11

 

11 OST previously designated this official as the Acting SPE on August 13, 2010.

According to OST, the SPE is 

engaged in rebuilding OSPE's leadership role within the Department and has taken 

steps to improve staff morale and stabilize the workforce. Additionally, a recent 

review of OSPE's attrition from September 2010 through April 2011 shows its 

attrition rate has dropped to 10 percent. 
10

The Strategic Acquisition Council Has Not Provided Acquisition 

Leadership to the Department 

The SAC has not been used as the Department's intended forum for procurement 

leaders. Chartered in January 2009, the SAC's mission is to provide a forum for 

senior DOT acquisition leaders in each OA to address issues affecting DOT's

procurement community, facilitate a consistent focus on acquisition improvement 

throughout the Department, and ensure that acquisitions strategically contribute to 

DOT's mission. The SPE serves as SAC's chairperson and acts as liaison between 

the SAC, senior DOT officials, and other external Federal agencies on 

Department-wide acquisition issues. Without an SPE to chair it, the SAC became 

inactive for over a year leaving the Department's senior acquisition leaders without 

a way to address acquisition issues. 

SAC members from seven of the eight OAs that responded to our May 2010 

survey stated that they believe the SAC could be an effective tool for promoting a 

successful and united acquisition process for the Department. They also stated, 

however, that the SAC is underutilized and has not had an opportunity to fully 

develop. Further, members of all eight OAs who responded to the survey 

uniformly acknowledged that they do not receive the leadership and guidance on 

acquisition they need from OST. Specifically, the respondents noted that 

• OST does not provide adequate Department-wide acquisition leadership, 

such as actively supporting OAs in effectively carry out their acquisition 

missions; 

• the quality of OST's support and involvement in the OAs' acquisition 

functions has diminished; and 

• there is little focus on the acquisition function in general at the Department 

level. 

Since being appointed acting SPE in August 2010, the now permanent SPE has 

worked towards revitalizing the SAC by reestablishing its monthly meetings—the 

first of which occurred in August 2010. 

OSPE's Strategic Plan Does Not Link Its Goals to DOT's Strategic 

Plan or Address the Identified Acquisition Function Deficiencies 

OSPE's strategic plan is missing key elements necessary for an effective 

organizational vision. OSPE issued its first strategic plan in March 2010 covering 

fiscal years 2010 through 2013. In the plan, OSPE acknowledges its responsibility 

for the Department's acquisitions. However, the plan does not clearly align the 
11

organization's purpose or establish realistic goals and objectives consistent with 

DOT's overall mission. 

The plan commits to providing useful acquisition processes and products to OST 

and OAs, but the plan has deficiencies in several key areas. First, it does not tie 

OSPE's activities to the goals and mission outlined in the Department-wide 

strategic plan, and fails to place OSPE's work in a long-term strategic context.

Second, OSPE's strategic plan does not address deficiencies in the elements that, 

according to OMB, must be addressed for successful acquisition functions—

contract oversight, clearly defined roles and responsibilities, established policies 

and processes, and the prevention of gaps in leadership.

12

OSPE LACKS ADEQUATE POLICIES AND PROCEDURES TO 

EFFECTIVELY ADMINISTER ITS ACQUISITION FUNCTIONS AND 

WORKFORCE

 Finally, OSPE has not 

developed performance measures and metrics to track its progress in meeting the 

plan's goals. 

OSPE lacks comprehensive policies and procedures for managing and performing 

its acquisition tasks. Additionally, OSPE does not regularly update DOT's 

acquisition guidance to reflect changes in Federal policy, affecting the entire 

Department's ability to rely on this guidance. Furthermore, contract and oversight 

files do not include required documents or complete histories of the contracts. 

Finally, OST does not maintain accurate records on its acquisition workforce in

the Acquisition Career Management Information System (ACMIS), the 

Government-wide system for acquisition personnel, as required by both Federal 

and Department policies. 

OSPE Does Not Have Adequate Standard Operating Procedures for 

Many of Its Acquisition Tasks and Processes 

OSPE does not have a comprehensive set of standard operating procedures (SOP) 

for daily acquisition tasks and processes, a weakness previously identified in 

external assessments dating back to 2005.13

 

12 OMB Memorandum Conducting Acquisition Assessments under OMB Circular A-123, May 21, 2008.

In response to our audit, OSPE has 

begun to develop written procedures for various acquisition processes and has 

identified 35 needed SOPs. However, these SOPs do not address all aspects of an 

effective acquisition function. For example, OSPE has not identified the need for 

an SOP for developing acquisition plans—a critical step for ensuring DOT 

13 Martin Contract Management performed an assessment of OSPE's acquisition function in 2005 identifying a lack of 

written procedures, including a Standard Operations and Procedures manual, for the Acquisition Services Division.
12

efficiently and effectively meets its contracting needs. Furthermore, we reviewed

three completed SOPs—contract administration, closeout procedures, and CO 

warrants—and found two of the three lacked detailed steps, guidance, and 

delineation of roles and responsibilities. A more cursory review of seven other 

SOPs revealed that several were little more than existing Federal or Department 

policies with no guidance or clear roles and responsibilities. 

Additionally, OSPE staff we interviewed did not know which SOPs had been

finalized or how to locate them. OSPE had not established an effective method for 

communicating new SOPs to staff and had not posted any SOPs to its intranet site. 

After we requested copies of existing SOPs, OST began posting them to its 

intranet. Currently, however, OSPE has posted only ten. 

OSPE Does Not Adequately Maintain DOT's Acquisition Policy 

OSPE has not updated the TAR—which establishes uniform acquisition policies 

and procedures for DOT—since 2005, or the TAM—which establishes uniform 

internal operating acquisition procedures—since 2006. Both clearly state that they 

implement and supplement the Federal Acquisition Regulation (FAR)—the 

Federal Government's principal acquisition policy.

14 However, over 44 Federal 

Acquisition Circulars (FAC), which identify changes to the FAR, have been 

released since 2005. Each of these FACs could result in one or more changes to 

the TAR or TAM. For example, the TAM does not reflect a new FAR requirement 

that COs be responsible for the accuracy of contract award data prior to reporting 

it into FPDS-NG.15

In 2009, OSPE identified a backlog of changes for TAR and TAM. However, 

according to OSPE, staffing shortages prevented OSPE from implementing any 

changes during fiscal year 2010. OSPE staff also informed us that since a previous 

policy team lead left OST in fiscal year 2005, OSPE has focused little attention on 

keeping TAR and TAM updated. 

Maintaining of current requirements in TAR and TAM is critical to OST and OA 

acquisition functions. All eight OAs that responded to our May 2010 survey of the 

SAC members expressed concerns regarding a lack of acquisition guidance 

coming from OST. Specifically, six OAs mentioned that TAR and TAM were outof-date and therefore unreliable. They also stated that OST does not provide new 

or updated acquisition guidance or policy in a timely manner, and that policy lacks 

 

14 The FAR establishes policies and procedures to ensure that agencies conduct acquisitions with fairness and integrity, 

minimize administrative operating costs, receive best quality products and services, and fulfill policy objectives. 15 FAR Part 4.604(b).
13

implementation guidelines. As a result, OAs must rely on external resources for 

regulations, and interpret changes on their own, thus exposing DOT to the risk of 

error and inconsistent acquisition practices. 

Since being appointed, the current SPE has been working to ensure that 

acquisition guidance is up-to-date throughout the Department, and that effective 

communication mechanisms for DOT's procurement community are in place. 

Additionally, the SPE has directed a review of outstanding updates to the TAR and 

TAM. 

OST Does Not Maintain Complete Contract Files or Complete Records 

of Contract Oversight 

OST does not sufficiently maintain contract files, as required by FAR,

16 to make 

informed decisions at each step of the acquisition process and to support actions 

taken. We reviewed a random sample of seven contract files from fiscal years 

2007, 2008, and 2009. These files lacked documents required by both Federal and 

Department policy, including acquisition plans, independent government cost 

estimates, and legal reviews. Furthermore, none of the six contract files from 2008 

and 2009 included the contract file document checklist required since 2008 by

OST policy.17

We also found the corresponding seven Contracting Officer Technical 

Representative's (COTR) files to be incomplete. Specifically, they did not contain 

documents recommended by DOT policy on the COTR program,

The previous Associate Director of Acquisitions Services did not 

use the checklist, and the former acting Associate Director was unaware of it. 

OSPE operates without an SOP on contract file maintenance, indicating a lack of 

standards that ensure consistency and compliance with regulations. For example, 

COs use their discretion on when to obtain legal reviews or develop acquisition 

plans since no existing SOP addresses either of these issues. In March 2010, OSPE 

finalized a contract administration SOP. However, it merely copies verbatim FAR 

policy; provides no explanation for implementing the policy; and sets no

processes, procedures, or guidance. 

18

 

16 FAR 4.801(b) requires the head of each office performing contracting to establish files containing the records of all 

contractual actions sufficient enough to constitute a complete history of the transactions.

 including 

copies of correspondence with the contractor and contractor performance results. 

Furthermore, the COTR files provided little or no evidence of contract monitoring 

or oversight such as monitoring plans and documentation of surveillance results. 

17 DOT Acquisition Policy Letter APL-2008-2, March 5, 2008. 18 DOT COTR Program, September 2008.
14

Documenting of contract monitoring and surveillance is key to effective contract 

administration.19

OSPE Does Not Maintain Required Information on Its Acquisition 

Workforce 

OSPE staff do not maintain ACMIS records as required by OMB and DOT 

policies, 20 and OST management controls do not exist to ensure compliance with 

these policies. Specifically, OSPE's ACMIS records are not current, contain 

inaccurate information, and do not support the level of Federal Acquisition 

Certification in Contracting (FAC-C) certification and/or warrant authority of 

several staff.

21

• One CO with an unlimited warrant issued in 2004 has never entered 

information into ACMIS. OMB Policy Letter 05-01

 Furthermore, supervisors do not review staff ACMIS information 

to ensure its accuracy. For example: 

22 requires all COs with 

authority above the micro-purchase threshold23

• The ACMIS report for one supervisory CO, who previously was Acting 

Associate Director of Acquisition Services, shows qualifications for a FACC level II certification and a limited level II warrant authority. However, 

the CO earned a level III certification in June 2008, and was issued an 

unlimited warrant in June 2009. ACMIS records, last updated June 2008, 

do not reflect these changes in warrant and certification levels, and do not 

document the additional training completed to support the level III 

certification. 

to enter current and 

complete information in the system by October 1, 2006. 

• The ACMIS report for an Integrated Systems Management and Reporting 

Division employee with an unlimited warrant did not support completion of 

education or training requirements. The report indicated that the employee 

never completed mandatory FAC-C level II and III training. ACMIS 

records also indicated the termination of a previous administrative warrant 

the day before the issuance of the unlimited warrant in January 2010, when 

 

19 Office of Federal Procurement Policy, A Guide to Best Practices for Contract Administration, October 1994. 20 OMB Policy Letter 05-01, Developing and Managing the Acquisition Workforce, April 15, 2005; DOT's Acquisition 

Career Development Guide, November 2006. 21 To receive a CO warrant, COs must obtain Federal Acquisition Certification (FAC) at a level that supports the level 

of the CO warrant. There are three FAC-C certifications/CO warrant levels, each of which has specific training, 

education, and experience requirements that must be met to receive the FAC certification. Level I 

certification/warrant authority is up to $100,000; level II certification/warrant authority is up to the $6.5 million; and 

level III certification/warrant authority is unlimited dollar amount. Requirements are cumulative, meaning one must 

achieve the previous level of FAC certification requirements before applying for the next level. 22 OMB Policy Letter 05-01, Developing and Managing the Acquisition Workforce, April 15, 2005. 23 The current micro-purchase threshold is $3,000.
15

in fact, OSPE management did not terminate the administrative warrant, as 

required by Department policy,24

OST does not have policies and procedures that ensure proper use of ACMIS. 

OSPE management does not emphasize compliance with requirements for keeping 

information in ACMIS current and complete. Because both the Acquisition Career 

Manager (ACM) position

 until August 13, 2010. 

25

A lack of current and accurate information in ACMIS inhibits OST from making 

informed budgeting, staffing, training, and employment development decisions. It 

also prevents DOT from complying with the Federal requirement for maintaining 

training records on the acquisition workforce, and tracking Federal certification 

requirements and achievement levels.

 and the Associate Director of Acquisition Services

positions are vacant, no staff person fulfills the duty of reviewing ACMIS 

information. 

26

OST LACKS BASIC MANAGEMENT CONTROLS TO ENSURE 

ACCURATE, COMPLETE, AND TIMELY PROCUREMENT DATA

 Furthermore, because the acquisition 

workforce information in ACMIS will roll directly into the new system planned to 

replace ACMIS in 2011, any inaccuracies will compromise the integrity of the 

new system's data even before it is deployed. 

OST does not have sufficient management controls to report accurate, complete, 

and timely procurement data as required by OMB regulations. Weaknesses include 

high rates of inaccuracy in its procurement database, insufficient procedures for 

promptly removing former employees' access to databases, an inaccurate inventory 

of its active contracts, and inadequate contingency plan for DOT's internal 

procurement database, PRISM, in the event of a systemwide emergency. These 

weaknesses affect the integrity of the data used for decision making by the 

Department as well as Congress and other Federal agencies. 

Data that OST Reports to the FPDS-NG Has a High Inaccuracy Rate

OST's FPDS-NG27

 

24 DOT's Acquisition Career Development Guide, November 2006.

data has a high rate of inaccuracy, even though OMB requires 

agencies to certify annually the accuracy and completeness of their data 

25 ACM is an appointed position responsible for managing DOT's acquisition workforce and ensuring accurate and 

consistent Department-wide data in ACMIS. The position has been vacant since May 2010. 26 OMB Policy Letter 05-01, Developing and Managing the Acquisition Workforce, April 15, 2005. 27 The Federal Procurement Data System-Next Generation (FPDS-NG) is the database that stores procurement data 

from all Federal Departments. 
16

transmissions to FPDS-NG. 28 OST had accuracy rates of 27 percent and 34 

percent for fiscal years 2008 and 2009, respectively.29 In April 2010, OMB 

emphasized the importance of agencies' reporting accurate data to FPDS-NG to 

improve the timeliness, completeness, and accuracy of Federal spending 

information. It set a goal that 100 percent of USASpending.gov's data—which 

comes from FPDS-NG—be reported on time, completely, and accurately by the 

end of fiscal year 2011.30

The high rate of inaccuracy in OST's procurement data is due primarily to a lack 

of internal controls over the data's entry into PRISM. According to the 

Department’s OMB A-123 Acquisition Assessment Report, approximately 80 

percent of OST's procurement data feeds directly into FPDS-NG. OST's contract 

staff must enter the additional 20 percent into PRISM manually, and have no 

process for reviews of the entries for errors, thus increasing the risk of 

inaccuracies. According to OST, it should reconcile its PRISM and FPDS-NG data 

on a quarterly basis and correct any identified discrepancies; however, it lacks a

process to ensure that corrections are made.

OSPE management acknowledged that the staff member temporarily assigned to 

oversee FPDS-NG administration—DOT's FPDS-NG Administrator left OST in 

August 2010—does not have the knowledge required to review and analyze data 

reported throughout the Department for accuracy and to ensure regular reporting. 

This deficiency further compromises the quality of DOT's verification of its 

FPDS-NG data. 

 

28 OMB Memorandum Federal Procurement Data Verification and Validation, March 9, 2007. 29 U.S. DOT Memorandum from Cassandra Wells, Director of Acquisition Oversight, to Carmencita Jones, Chief of 

Contracting Office, "FPDS-NG Data Quality Audit Summary Report", August 28, 2008; U.S. DOT Memorandum 

from Cassandra Wells, Associate Director of OSPE, to Carmencita Jones, Director of Acquisition Services, "FPDSNG Data Quality Verification and Validation Report", June 29, 2009. 30 USAspending.gov will enable compliance with the Transparency Act of 2006 and allow for future growth of 

reporting on Federal spending. Launched in January 2008, it currently contains information on grants and contracts 

at the prime award level.
17

Untimely Removal of Former Employees' Access to Procurement 

Databases Creates Risks for Data Integrity 

Many OST employees retained access to DOT's procurement databases after their 

employment with OST ended. Specifically, in March 2010, 55 out of 90 former 

employees, or 61 percent, retained access to PRISM, while 29 out of 53 former 

employees, or 55 percent, retained access to FPDS-NG. OMB requires agencies to 

apply internal controls over data entry, transactions processing, and reporting to 

protect resources from waste, loss, and misuse. Internal control standards also state 

that access to resources and records should be limited to authorized individuals, 

and that management should assign and maintain accountability for their custody.

In response to our audit, OST deactivated all former employees' access in both 

systems. However, OST does not have a standard process in place to ensure that 

each employee's access to DOT's procurement systems is deactivated upon 

termination of employment. The absence of such a procedure also potentially 

jeopardizes the integrity of the Department's acquisition data.

OST Cannot Accurately Account for Its Active Contracts 

OSPE cannot accurately account for all of OST's active contracts. Government 

internal control standards state that a good internal control includes periodic 

inventories of assets.31

 

31 GAO Standards for Internal Control in the Federal Government, November 1999.

Without a complete and accurate record of active contracts, 

OSPE cannot ensure proper contract management and oversight. Government 

control standards also call for periodic reconciliation of data records with contract 

files to help reduce the risk of error, fraud, misuse, or unauthorized alterations. 

OSPE officials acknowledged the need to inventory its contract files, but stated 

that it has no staff available to complete the inventory. OSPE's lack of a complete 

and accurate record prevents reconciliations of the data reported to the 

procurement systems with its contract files. 
18

OST's Contingency Plan for PRISM Does Not Adequately Mitigate 

Risk to the System

OST's contingency plan32 for PRISM lacks important elements required by

Federal contingency planning guidelines,

33 including resource requirements, 

training requirements and exercises, testing schedules, and a maintenance 

schedule. All Federal organizations must develop contingency plans for each 

information system that meets critical operations needs in the event of a system 

disruption.34

Furthermore, OST cannot provide evidence to demonstrate that it annually reviews 

and tests its contingency plan for PRISM, as required,

By not including key elements in its contingency plan for PRISM, 

OST reduces the plan's effectiveness, and cannot ensure that all personnel will 

fully understand planning requirements. 

35

CONCLUSION

 to maintain the plan's 

effectiveness and operability. Annual testing is critical to a contingency plan's

viability because it identifies and addresses possible deficiencies through the 

validity testing of at least one component and plan operability. Because 

information systems undergo frequent changes and system risks may vary over 

time, contingency plan testing and review must be ongoing. OST's 2010 PRISM 

Contingency Plan shows that since the plan's inception in 2004, updates only 

occurred in 2006 and 2010. 

DOT is responsible for billions of dollars of acquisitions each year. OST

represents the core of the Department's acquisition functions. Significant 

weaknesses in its acquisition function, however, limit OST's ability to carry out its 

responsibilities to support DOT's mission. OST has recognized that it needs to 

make changes—in both its organization and culture—and has begun to take action. 

However, until OST fully commits to reforming its own acquisitions, it will be 

challenged to provide clear direction and vision to acquisitions Department-wide, 

putting nearly $6 billion worth of annual contracted goods and services at risk of 

fraud, waste, and abuse. 

 

32 An information system contingency planning represents a broad scope of activities designed to sustain and recover 

critical information technology services following an emergency. 33 National Institute of Standards and Technology (NIST) Special Publication 800-34: Contingency Planning Guide for 

Federal Information Systems, June 2002, revised May 2010. 34 The Federal Information Security Management Act (FISMA) of 2002 mandates federal organizations Contingency 

plans. The NIST develops and issues standards, guidelines, and other publications to assist federal agencies in 

implementing the FISMA. 35 NIST Special Publication 800-34: Contingency Planning Guide for Federal Information Systems, June 2002, revised 

May 2010.
19

RECOMMENDATIONS

We recommend that the Deputy Secretary take the following action: 

1. Develop a permanent procurement structure and corresponding organizational 

roles and responsibilities for the Chief Acquisition Officer and the Senior 

Procurement Executive that positions and empowers them to effectively carry 

out their procurement duties. 

We recommend that the Senior Procurement Executive take the following action: 

2. Permanently fill the Chief of Contracting Office position and the Federal 

Procurement Data System-Next Generation Administrator position. 

3. Create and implement a staffing plan that addresses OSPE's current and 

anticipated future workload needs. 

4. Develop measures to track achievement of OSPE's strategic plan goals. 

5. Finalize and set individual employee performance standards that align with 

OSPE's strategic plan. 

6. Develop comprehensive SOPs for its acquisition processes and tasks that 

include specific steps, expected timeframes, and clearly assigned roles and 

responsibilities. 

7. Implement a process delineating staff roles and responsibilities to ensure TAR 

and TAM remain up-to-date. 

8. Issue guidance that re-emphasizes the requirement that COs and contract 

specialists use DOT's standard contract checklist to maintain accurate and 

complete contract records. 

9. Require the Acquisition Career Manager and supervisors to review and 

approve ACMIS information for all employees to ensure its accuracy. 

10.Ensure that FPDS-NG data quality reviews are conducted and documented. 

11.Create and implement a procedure to ensure that employees leaving the 

Agency have their access to procurement systems terminated as part of the 

checkout process. 

12.Establish and implement regular reviews of the procurement database user 

access lists to ensure that current employees' access rights are properly 

maintained and modified, as needed. 

13.Develop and maintain a comprehensive list of OSPE's contracts. 
20

14.Create and implement a process for periodically reconciling a comprehensive 

list of OSPE's contracts to its contract files and procurement databases. 

15.Update and maintain the PRISM Contingency Plan to comply with Federal 

regulations. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

We discussed the results of our review with officials from OST on December 15, 

2010, and provided a draft of this report to OST on March 31, 2011. We received 

OST's response on May 2, 2011, which is included in its entirety in the Appendix 

of this report. OST concurred with recommendations 10 and 11, has already 

completed actions to address those recommendations, and we consider them 

closed. 

OST also concurred with all except 4 of our recommendations and provided 

acceptable planned corrective actions and implementation dates. OST partially 

concurred with recommendations 1, 4, 5, and 9 but provided alternate actions that 

meet the intent of those recommendations. OST also provided implementation 

dates. We consider all of these recommendations resolved pending completion of 

the planned actions.

For the remaining recommendation, however, OST needs to provide further 

information. Specifically, OST concurred with recommendation 7 (assigning 

responsibility for TAR/TAM updates) but since the final milestone for these 

actions is not until December 2013, we are requesting that OST provide us with 

periodic updates on its progress. 

ACTIONS REQUIRED 

In accordance with the Department of Transportation 8000.1C, we are closing 

recommendations 10 and 11. We are also requesting that OST inform us when it 

has completed its remaining planned actions for the remaining recommendations 

for which acceptable actions were proposed. We request that OST provide us with 

additional information for recommendation 7. 

We appreciate the courtesies and cooperation of the Office of the Senior 

Procurement Executive's representatives during this audit. If you have any 

questions concerning this report, please call me at (202) 366-1427 or Tony 

Wysocki, Program Director, at (202) 493-0223. 
21

# 

cc: Willie Smith, Senior Procurement Executive, M-60 

Martin Gertel, M-1 
22

Exhibit A. Scope & Methodology

EXHIBIT A. SCOPE & METHODOLOGY

We conducted this audit in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

We conducted this audit between October 2009 and March 2011. Our audit

objective was to assess OST’s acquisition function and identify vulnerabilities that 

could impact DOT’s ability to implement an effective and efficient approach 

consistent with best practices, including the Office of Management and Budget 

(OMB) Guidelines on conducting acquisition assessments under Circular A-123. 

This effort is part of our risk-based oversight strategy to help DOT address 

management challenges in its acquisition function. We focused our audit on an 

assessment of OST's acquisition function to identify vulnerabilities that could 

impact OST's ability to manage its own acquisitions and implement and promote 

effective and efficient acquisition processes Department-wide. 

To address our audit objective, we conducted a high-level review of OST's 

acquisition function, focusing on three of the four cornerstones identified in OMB 

guidelines on conducting acquisition assessments under OMB Circular A-123. 

These four cornerstones are: (1) Organizational Alignment and Leadership; (2) 

Policies and Procedures; (3) Acquisition Workforce; and (4) Information 

Management Stewardship. We did not focus on the third cornerstone—Acquisition 

Workforce—because we determined that the scope for this cornerstone was 

extensive and should be covered in a separate audit to ensure that adequate time 

and attention are devoted to the area.

We reviewed the Federal Acquisition Regulation (FAR); Transportation 

Acquisition Manual (TAM); DOT's Acquisition Career Development Program; 

OMB's Policy Letter 05-01: Developing and Managing the Acquisition 

Workforce; the Service Acquisition Reform Act (SARA) of 2003; and other 

applicable departmental and Federal regulations and guidance. We also consulted 

with OIG's Office of Legal, Legislative, and External Affairs throughout the audit 

to ensure proper interpretation of SARA and other policies. 

We interviewed various Office of the Senior Procurement Executive (OSPE) 

managers and staff to obtain an accurate understanding of the acquisition-related 
23

Exhibit A. Scope & Methodology

processes and practices, culture, and atmosphere. To assess the organizational 

alignment and leadership we reviewed OST's organizational charts and authority 

structures, obtained position descriptions for acquisition staff and management, 

analyzed the OSPE's strategic plan, worked with our statistician to determine 

OST's attrition rates, and interviewed members of the Strategic Acquisition 

Council (SAC). To assess OST's policies and processes, we reviewed standard 

operating procedures, reviewed employee certifications and qualifications—

including the Acquisition Career Management Information System records for all 

OSPE employees in the system as of March 2010—and verified that all OSPE 

Contracting Officer's qualifications met their warrant authority. To evaluate OST's 

information management stewardship and data quality, we analyzed required 

information system processes such as the Certification & Accreditation and 

Verification & Validation, determined whether a contingency plan with annual 

testing was in place, and whether OST had an accurate account of their active 

contracts, and compared OST's roster of current employees to the list of active 

users for OST's procurement databases as of March 2010. 

We reviewed a random sample of 7 OST contracts totaling more than $271 million 

from a universe of 3,068 unique contracts totaling $7.5 billion reported in PRISM 

for fiscal years 2007 through 2009. We selected contracts with probability 

proportional to size—in which size was equal to the award amount—thereby 

giving contracts with larger award amounts a greater chance of being selected 

while giving every dollar in the universe an equal chance. We used this sample to 

perform a high-level review of the associated contract and Contracting Officer 

Technical Representative files to determine whether those files contained 

complete contract documentation in compliance with Federal and departmental 

laws and regulations, and whether they demonstrated that OST was providing 

adequate contract management and oversight. We also used this sample to 

compare each contract file's information to the contract information contained in 

PRISM and FPDS to check for consistency and accuracy.
24

Exhibit B. Glossary of Acronyms

EXHIBIT B. GLOSSARY OF ACRONYMS 

ACM Acquisition Career Manager 

ACMIS Acquisition Career Management Information System 

CAO Chief Acquisition Officer 

CFO Chief Financial Officer 

CO Contracting Officer 

COCO Chief of Contracting Office 

COTR Contracting Officer Technical Representative 

FAC Federal Acquisition Circular 

FAC-C Federal Acquisition Certification in Contracting 

FAR Federal Acquisition Regulation 

FISMA Federal Information Security Management Act 

FPDS-NG Federal Procurement Data System-Next Generation 

GAO Government Accountability Office 

HCA Head of Contracting Activity 

NIST National Institute of Standards & Technology 

OMB Office of Management and Budget 

OSPE Office of the Senior Procurement Executive 

OST Office of the Secretary 

SAC Strategic Acquisition Council 

SARA Service Acquisition Reform Act 

SOP Standard Operating Procedure 

SPE Senior Procurement Executive 

TAM Transportation Acquisition Manual 

TAR Transportation Acquisition Regulation 
25

Exhibit C. Summary of the Acquisition Cornerstones in OMB Circular 

A-123 and Their Critical Elements

EXHIBIT C. SUMMARY OF THE ACQUISITION CORNERSTONES 

IN OMB CIRCULAR A-123 AND THEIR CRITICAL ELEMENTS

Cornerstone Critical Elements Defining Each Cornerstone

Organizational 

Alignment & 

Leadership

• Assuring appropriate placement of the acquisition function;

• Organizing the acquisition function to operate strategically, 

aligning it with agency mission and needs;

• Clearly defining and integrating roles and responsibilities;

• Having commitment from a clear, strong, and ethical executive 

leadership;

• Effective communication of missions, values, and expectations, 

providing a foundation for continuous improvement.

Policies & Processes • Partnering with internal organizations—acquisition function 

engages all stakeholders from various disciplines when planning;

• Assessing internal requirements and the impact in external 

events when planning acquisition strategies;

• Empowering cross-functional teams;

• Managing and engaging suppliers to encourage competition and 

enhancing price analysis and contractor quality and performance;

• Monitoring and providing oversight in order to achieve desired 

outcomes;

• Enabling financial accountability by tracking and communicating 

financial information throughout the acquisition process for 

effective evaluation and assessment of the acquisition activity; 

• Promoting successful outcomes of major projects, using sound 

capital investment strategies, and employing knowledge-based 

acquisition approaches.

Information 

Management & 

Stewardship

• Tracking acquisition data accurately;

• Translating data into meaningful formats and analyzing that data;

• Ensuring effective general and application controls over all 

information systems;

• Ensuring effective data stewardship to ensure data accurate,

accessible, timely, and usable for acquisition decision-making and 

activity monitoring.

Human Capital • Valuing and investing in the acquisition workforce;

• Performing strategic human capital planning;

• Acquiring, developing, and retaining talent;

• Creating a results-oriented organizational culture that empowers 

employees and links performance to organizational goals.

Source: OMB Circular A-123 
26

Exhibit D. Major Contributors to This Report

EXHIBIT D. MAJOR CONTRIBUTORS TO THIS REPORT 

THE FOLLOWING INDIVIDUALS CONTRIBUTED TO THIS REPORT.

Tony Wysocki Program Director 

Name Title 

Ann Wright Project Manager 

Jill Cottonaro Senior Analyst 

Meghann Noon Auditor 

Karen Sloan Communication Officer 

Susan Neill Writer/Editor 

Petra Swartzlander Senior Statistician 

William Savage Computer Specialist

Sandra DeLost IT Specialist 

Amy J. Berks Senior Counsel 

Sandra DePaulis Senior Analyst 

Jacqueline Feldman Analyst 
27

Appendix. AGENCY COMMENTS

APPENDIX. AGENCY COMMENTS

MEMORANDUM 

U.S. Department of 

Transportation 

Office of the Secretary

of Transportation

SUBJECT:

ACTION: Management Response to OIG Draft Report, 

“Weaknesses in the Office of the Secretary’s 

Acquisition Function Limit Its Capacity to Support 

DOT’s Mission” DATE:

FROM:

Brodi L. Fontenot 

Deputy Assistant Secretary 

 for Administration 

REPLY

TO

Attn. of:

TO: CALVIN L. SCOVEL

Inspector General 

The Office of the Senior Procurement Executive (OSPE) has weathered a difficult 

period and is emerging as a stronger organization. During a period of unusual 

leadership instability and staff attrition, the office struggled to maintain essential 

functionality. During that period the office was understaffed making it vulnerable 

to lapses in certain functional areas. 

Significant Actions Completed and Underway 

Upon becoming Deputy Assistant Secretary for Administration, one of my first 

actions was to provide new perspective to fully assess the OSPE function. Based 

on this assessment and information provided by the Office of Inspector General 

relating to its ongoing review, we recognized the need for, and implemented sound 
28

Appendix. AGENCY COMMENTS

and effective actions to stabilize and rebuild the OSPE function. We are now well 

along that pathway. 

First, we brought in strong new leadership at the top, hiring a Senior Procurement 

Executive (SPE) with proven leadership skills and knowledge of both procurement 

and the Department. Though on board for less than a year, the new SPE has 

assessed the overall structure and staffing of OSPE and is well on the way to 

revitalizing the Office. Key leadership positions in the organization are now filled 

and we will continue filling staff positions to the full extent of resource 

availability. Office policies and procedures have been reviewed with plans put in 

place, and responsibilities assigned, to ensure these vital elements are up to date 

and effective. The SPE revitalized the Strategic Acquisition Council, recognized 

the importance of this organization, and is convening regular meetings to effect 

strategic dialogue with the Department’s acquisition community. 

OSPE took immediate action to remediate issues identified by OIG with regard to 

system access and continues its work to better verify data input to PRISM and 

FPDS-NG. The Associate Director of Integrated Systems Management and 

Reporting position is among those recently filled, and that Division will be leading 

efforts to improve systems integration and data quality. 

The Department will reassess its structural compliance with the Service 

Acquisition Reform Act of 2003 with regard to reporting relationships. While we 

understand the issues relating to compliance with all aspects of the statute, it is 

also important to recognize the unique challenges the Department faces in 

fulfilling the organizational, political, and workload expectations of the law. As 

we evaluate alternatives that will most clearly demonstrate fulfillment of the intent 

of the Act, we want to be clear that that the SPE has currently and will continue to 

have direct, timely access to the Chief Acquisition Officer for matters relating to 

strategic acquisition issues or otherwise relevant to department wide procurement. 

Leadership in Place and Communication Enhanced 

The Senior Procurement Executive has achieved significant progress in the limited 

time since coming on board. The following highlight some of the specific 

accomplishments to date: 

• OSPE Leadership is in Place and Staff has Stabilized – Each of OSPE’s 

leadership positions have now been filled with permanent selections that 

will afford the office with the management and expertise it needs to move 

forward. Staffing overall is also improving and attrition has been reduced. 

During the period covered by the OIG review, 6 people left the office, 
29

Appendix. AGENCY COMMENTS

accounting for the office experiencing an attrition rate in excess of thirty 

percent. During the time period from July of 2010 to present, only 2 people 

have left, slashing the attrition rate for the office to less than 10 percent. 

• Strategic Acquisition Counsel Revitalized – One of the SPE’s first 

actions on August 26, 2010 was to revitalize the SAC as a vital link to the 

procurement community. The organization once again meets monthly and 

is considered a vital link for conducting meaningful and effective dialogue 

on procurement matters with the OAs. It is relied upon as a forum for 

resolving departmental procurement issues. SAC has facilitated a 

consistent focus and discussion on acquisition improvement and strategies, 

in areas including developing a Departmental Procurement Platform, 

achieving Contract Savings, increasing the Use of Strategic Sourcing, 

reducing High Risk Contracting, strengthening the Acquisition Workforce, 

and expanding opportunities for small businesses. 

SAC helps to ensure that acquisitions strategically contribute to DOT’s 

mission by improving communications throughout the Department. It also 

serves as an important forum for information exchange thanks to the 

participation of high-level internal and external officials in the meetings. 

Based on these and other efforts to revitalize OSPE’s working relationships 

with the DOT procurement community, we are convinced that were the 

OIG to conduct an update to its May 2010 survey, its results would be far 

more positive. 

Overall, in a relatively short period of time, significant progress has been achieved 

in strengthening OSPE. Thanks to the OIG review team’s openness to conducting 

meaningful dialogue with management, it made a valued contribution to these 

efforts. There is now a firm basis for moving forward to building a high 

performance organization offering best in class services to the Department, 

operating administrations, and the American taxpayer. 

RECOMMENDATIONS AND RESPONSE 

Recommendation 1: Develop a permanent procurement structure and 

corresponding organizational roles and responsibilities for the Chief Acquisition 

Officer and the Senior Procurement Executive that positions and empowers them 

to effectively carry out their procurement duties. 

Response: Concur in Part. In consultation with the Secretary and the Office of 

General Counsel, OSPE will examine the organizational alignment and the 

functions/roles of the Chief Acquisition Officer (CAO) and the Office of the 
30

Appendix. AGENCY COMMENTS

Senior Procurement Executive, in the context of the Service Acquisition Reform 

Act (SARA). The outcome of this examination will be the identification of an 

organizational structure that aligns activities and functions described in SARA, to 

the fullest extent possible, consistent with organizational needs. Necessary 

organizational analysis is ongoing, and we plan to consult with all necessary 

offices in the coming months. We anticipate completing this action by December 

30, 2011. 

Recommendation 2: Permanently fill the Chief of Contracting Office position 

and the Federal Procurement Data System-Next Generation Administrator 

position. 

Response: Concur. As identified in the OIG report, ensuring that leadership is in 

place is a critical element of providing effective procurement leadership for the 

Department. We are pleased to note that all leadership positions in OSPE have 

now been filled. This includes completing the selection of an Associate Director 

of Acquisition Operations. The incumbent in this position has been delegated 

Chief of Contracting Officer responsibilities. Further, the position of Associate 

Director for Integrated Systems Management and Reporting has also been filled. 

The responsibilities under this official include staffing, and ultimately managing 

the FPDS-NG Administrator position. We anticipate that the FPDS-NG 

Administrator position will be filled, resources permitting, before March 30, 2012. 

Recommendation 3: Create and implement a staffing plan that addresses OSPE's 

current and anticipated future workload needs. 

Response: Concur. As indicated above, all leadership positions in OSPE have 

been filled. These include the Senior Procurement Executive, the Associate 

Director of Policy Oversight, and Business Strategies, the Associate Director of 

Integrated Systems Management and Reporting, the Associate Director of 

Acquisition Operations, and the Associate Director of Commercial Services. Now 

that these leadership positions have been filled, OSPE is working to complete a 

more detailed staffing plan by December 30, 2011. 

Recommendation 4: Develop measures to track achievement of OSPE's strategic 

plan goals. 

Response: Concur in part. We recognize the importance of utilizing the OSPE 

strategic plan to guide overall management of the acquisition function. As we 

continue to work through the issues in the OSPE, we anticipate reaching a better 

position in the months ahead to establish new strategic goals, performance 

measures, and improve tracking of our accomplishments. The first step, however 

is to reexamine the existing strategic plan to ensure that it aligns with the new 
31

Appendix. AGENCY COMMENTS

leadership’s goals. We anticipate completing a revised strategic plan before 

September 30, 2012, and will implement measures to track achievement of the 

plan at that time. 

Recommendation 5: Finalize and set individual employee performance standards 

that align with OSPE's strategic plan. 

Response: Concur in Part. All employees have performance standards that are 

rationally based and aligned with the Office’s objectives and have been updated to 

align with ongoing strategic goals. For example, performance standards now 

include measures relating to improving acquisition workforce management, 

improving financial oversight, improving Contracting Officer Technical 

Representative and project management performance; implementing 

eProcurement, and implementing process improvements 

We concur in part as we fully intend to revisit the OSPE strategic plan in the 

future, based on broad guidance and requirements from (1) OMB, (2) 

Departmental strategies defined in the SAC, and (3) internal discussions. As a 

result, we anticipate that employee performance standards will continue to evolve 

in alignment with these changes. We intend to have revised standards aligned 

with a new OSPE strategic plan by June 30, 2013. 

Recommendation 6: Develop comprehensive SOPs for its acquisition processes 

and tasks that include specific steps, expected timeframes, and clearly assigned 

roles and responsibilities. 

Response: Concur. After reviewing the organization’s operations and previous 

efforts to construct Standard Operating Procedures (SOP) the SPE concluded that 

SOPs will be useful and beneficial. Overall, we intend to implement a full set of 

28 specific SOPs to help guide and standardize operations. The SPE has 

prioritized the completion and implementation of these procedures into two 

groups. Phase 1 includes 15 separate SOPs that are most critical to overall 

operations and have been prioritized for completion by December 30, 2011. The 

remaining 13 SOPS are in Phase 2, which are to be completed by June 30, 2012. 

The SPE has assigned responsibility for completing these procedures throughout 

the organization. Once completed, they will be posted on SharePoint site, and 

staff will be trained in their use to facilitate consistent implementation. 

Recommendation 7: Implement a process delineating staff roles and 

responsibilities to ensure TAR and TAM remain up-to-date. 

Response: Concur. OSPE is in the process of developing a comprehensive 

approach to updating and maintaining the TAR and TAM. First, the office 
32

Appendix. AGENCY COMMENTS

replaced the TAR/TAM updating software with a more efficient and less costly 

method for records upkeep and retention. The office is now developing and 

prioritizing a specific update plan to bring the TAR/TAM fully up to date with 

FAR, OMB Memos, departmental orders, OSPE interim guidance, and other best 

business practices. While interim guidance will continue to be available to the 

OAs as the TAR/TAM is updated, due to the volume of materials involved, 

management anticipates that it will publish the final products by December 1, 

2013. 

Subsequently, OSPE intends to deploy a systematic approach to maintaining the 

TAR/TAM that will be enumerated in a maintenance plan that describes staffing 

assignments and supporting policies and procedures for document revision and 

version management.

Recommendation 8: Issue guidance that re-emphasizes the requirement that COs 

and contract specialists use DOT's standard contract checklist to maintain accurate 

and complete contract records. 

Response: Concur. Guidance to re-emphasize the requirement that contract 

specialists use DOT’s standard contract checklist to maintain accurate and 

complete contract records was provided to M-63 staff in January 2011. Since 

then, the DOT standard contract checklist is being utilized. Further, all new award 

contract files since that date are reviewed prior to signature to ensure the checklist 

is utilized and to provide other quality assurance checks. As a result, action 

pursuant to this recommendation is considered complete and management will 

provide supporting documentation by May 31, 2011. 

OSPE is also implementing other actions with regard to contract files, which is 

one of the areas identified as a priority in revising the OSPE SOPs. While there 

are existing requirements, we intend to both identify required documentation and 

explain processes and procedures in more detail. In addition, to provide another 

level of controls in this important area, OSPE is planning to establish a Quality 

Review Board. The Quality Review Board will meet quarterly and randomly 

select contract files for review and provide findings/feedback to the Acquisitions 

Director and contracting staff members. 

Recommendation 9: Require the Acquisition Career Manager and supervisors to 

review and approve ACMIS information for all employees to ensure its accuracy. 

Response: Concur in part. OSPE has established checks and balances to support 

an overall process which ensures that training records for the acquisition 

workforce are accurate. OSPE management will review each of its employees 

ACMIS entries and verify their accuracy by June 30, 2011. 
33

Appendix. AGENCY COMMENTS

Recommendation 10: Ensure that FPDS-NG data quality reviews are conducted 

and documented. 

Response: Concur. OSPE will continue conducting required data quality review 

and validation activities to ensure that tracking system information is as accurate 

as possible. In January 2011, the Department completed its Independent 

Validation & Verification Report of 2010 FPDS-NG data. A copy of this report 

has been provided to the OIG. While we will continue this reporting in the future, 

action pursuant to this recommendation is considered complete. 

Recommendation 11: Create and implement a procedure to ensure that 

employees leaving the Agency have their access to procurement systems 

terminated as part of the checkout process. 

Response: Concur. As of August 2010, OSPE receives “Clearance and 

Document Removal” forms and provides a copy to the system administrator for 

acquisition systems. The system administrator then logs the request in a 

spreadsheet, checks all systems, removes the employee from all applicable 

systems and updates the spreadsheet. OA’s have system administrators 

responsible for maintaining their own active user lists. Action pursuant to this 

recommendation is considered complete. 

Recommendation 12: Establish and implement regular reviews of the 

procurement database user access lists to ensure that current employees' access 

rights are properly maintained and modified, as needed. 

Response: Concur. Beginning October 2010, a list of all active users is sent biannually to the respective OST managers seeking validation and verification of the 

need for continued user access at the access level stated. This information is used 

to adjust or eliminate access as appropriate. Action pursuant to this 

recommendation is considered complete and documentation will be provided by 

May 31, 2011. 

Recommendation 13: Develop and maintain a comprehensive list of OSPE's 

contracts. 

Response: Concur. In January 2011, OST Acquisition Services established a 

Process Action Team, in part, to reconcile an active contract list with FPDS-NG 

and PRISM to ensure accuracy. We anticipate having a final, reconciled list by 

December 30, 2011. 
34

Appendix. AGENCY COMMENTS

Recommendation 14: Create and implement a process for periodically 

reconciling a comprehensive list of OSPE's contracts to its contract files and 

procurement databases. 

Response: Concur. In January 2011, OSPE implemented revised systems for 

contract file and procurement database management. The Process Action Team is 

also developing a process to complete periodic reconciliations of the active 

contract list with FPDS-NG and PRISM. We anticipate formalizing this process 

by December 30, 2011. 

Recommendation 15: Update and maintain the PRISM Contingency Plan to 

comply with Federal regulations. 

Response: Concur. The Prism Contingency Plan has been updated and was 

approved by the DOT Security Officer on August 4, 2010. OSPE is in the process 

of testing and reviewing the plan and will complete any modifications necessary 

before December 30, 2011. Subsequently, the plan will be tested and maintained 

in accordance with Federal requirements.