Audit Report 

OIG-04-043 (Interim Report) 

GENERAL MANAGEMENT: Treasury Building and Annex Repair 

and Restoration Program Procurement Practices Need to be 

Improved 

September 23, 2004 

Office of 

Inspector General 

Department of the Treasury 

Contents 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 1 

 (Interim Report) 

Audit Report................................................................................................. 3 

Results in Brief ................................................................................................ 4 

Background ................................................................................................... 6 

Findings and Recommendations......................................................................... 9 

 Contract Files Did Not Always Include Required Support for the 

 Type of Contract Selected............................................................................ 9 

 Recommendation .................................................................................... 10 

 

 Documentation Supporting Qualifications and Appointments of 

 Contracting Officer’s Technical Representatives (COTR) Was Inadequate ........... 11 

 Recommendations................................................................................... 14 

 Written Evaluations of Contractor Performance Were Not Prepared ................... 16 

 Recommendations................................................................................... 17 

 Completed TBARR Contracts Were Not Closed in a Timely Manner ................... 18 

 Recommendation .................................................................................... 19 

Appendices

 Appendix 1: Objectives, Scope, and Methodology ...................................... 21 

 Appendix 2: List of TBARR Contracts Awarded Since 1998......................... 23 

 Appendix 3: Management Response ......................................................... 25 

 Appendix 4: Major Contributors To This Report .......................................... 31 

 Appendix 5: Report Distribution................................................................ 32 

Tables 

 Table 1 Contracts Ready for Close-out................................................ 19 

 Table 2 List of TBARR Contracts Awarded Since 1998......................... 23 

Abbreviations

 ABA Architectural Barriers Act 

 CO Contracting Officer 

 COTR Contracting Officer’s Technical Representative 
Contents 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 2 

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 D&F Determination and Findings 

 DO Departmental Offices 

 DTAR Department of Treasury Acquisition Regulation 

 FAC Federal Acquisition Circular 

 FAR Federal Acquisition Regulation 

 FFP Firm-Fixed Price 

 H.R. House Report 

 IDIQ Indefinite Delivery, Indefinite Quantity 

 OFM Office of Financial Management 

 OIG Office of Inspector General 

 PSD Procurement Services Division 

 SOP Standard Operating Procedures 

 TBARR Treasury Building and Annex Repair and Restoration 

 TD P Treasury Department Publication 

 Treasury Department of the Treasury 
OIG Audit 

Report

The Department of the Treasury 

Office of Inspector General 

 TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 3 

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 September 23, 2004 

 Jesus H. Delgado-Jenkins 

 Acting Assistant Secretary for Management 

 

The Conference Report (H.R. 108-401) for the Consolidated 

Appropriations Act, 2004, directed our office to audit all Treasury 

Building and Annex Repair and Restoration (TBARR) Program 

contracts since Fiscal Year 1998. The audit is to include (1) a 

review of compliance with all applicable procurement laws, rules, 

and regulations, and the Architectural Barriers Act (ABA) of 1968, 

as amended; (2) a review of the scope, requirements, and cost 

reasonableness of the project, as well as the process for managing 

change orders to the original scope and design; and (3) a review of 

the effectiveness, efficiency, and economy of contractor 

operations. We are addressing these objectives in a series of audit 

reports. 

On August 9, 2004, we issued an Interim Audit Report that 

discussed: (1) inadequate planning of the TBARR Program at its 

inception; (2) delays and increased costs due to numerous 

amendments of the original TBARR scope; (3) ineffective 

management of employee moves during TBARR construction; and 

(4) deficient TBARR accounting records, reconciliations, and 

reports. Your office has planned or taken corrective actions that 

are responsive to our recommendations in that report.1

This second Interim Audit Report presents the results of our review 

of the TBARR Program contract files for compliance with applicable 

Federal and Department of the Treasury (Treasury) procurement 

requirements. Since December 1998, the TBARR Program Office 

has awarded 22 contracts for the renovation work and associated 

services totaling, with modifications, approximately $155.3 million 

 

1 GENERAL MANAGEMENT: Management of the Treasury Building and Annex Repair and Restoration 

Program Needs to Be Strengthened; OIG-04-039 (Interim Report). 
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as of March 12, 2004. Fourteen (14) of the contracts are currently 

open; work has been completed for the other 8 contracts. We 

selected a sample of 5 open contracts and 4 completed contracts 

to determine whether the contract files adequately supported 

(1) the contract award; (2) interim and final evaluations of 

contractor performance; and (3) for the completed contracts, 

contract close-out actions. We also examined documentation 

supporting the appointment and qualifications of Contracting 

Officer’s Technical Representatives (COTR) for all the TBARR 

contracts. A more detailed description of our objectives, scope, 

and methodology is provided in Appendix 1. A listing of the 22 

TBARR contracts and the contracts tested as part of our audit is 

provided in Appendix 2. 

At this time, we are continuing our audit of the TBARR Program 

Office to fully address the requirements of H.R. 108-401. Future 

planned work will include inspection of the renovation work, an 

assessment of contract and other costs charged to the TBARR 

appropriation accounts, and follow-up on the findings in this and 

our previous interim report. 

Pursuant to H.R. 108-401, we will be providing copies of this 

Interim Audit Report to the Senate and House Committees on 

Appropriations. 

Results in Brief 

Overall, we concluded that the sampled TBARR contract awards 

substantially complied with the Federal Acquisition Regulation 

(FAR) and Treasury policy. However, we noted the following 

deviations from procurement requirements and sound contract 

administration: 

• For 2 sampled contracts, Determination and Findings (D&F) 

memoranda supporting the type of the contract to be used did 

not include all required elements. For example, the findings in 

these memoranda lacked specificity and the applicable statutes 

justifying the type of contract to be awarded. 

• Documentation supporting the qualifications and designations of 

COTRs was not maintained in the contract files as required. We 
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also noted extensive problems with the COTR documentation 

that was eventually provided for our review. Documentation 

supporting COTR training was also incomplete. 

• Required interim and final evaluations of contractor performance 

were not documented in the contract files. 

• The TBARR Program Office did not take action in a timely 

manner to close out completed contracts. For one contract, a 

contract modification was not issued as required when excess 

funds were deobligated. 

We are making seven recommendations in this report to address 

the deficiencies in the contract files and to improve controls over 

TBARR procurement activities. Specifically, we recommend that 

(1) Determination and Findings memoranda for TBARR contracts be 

prepared in accordance with FAR, (2) properly executed 

documentation for current COTR designations are included in the 

contract files, (3) controls are implemented to ensure that future 

COTR designations are properly documented, (4) COTRs’ training 

be documented, (5) contractor performance on existing contracts 

be documented, (6) procedures are implemented to document 

contractor performance in the future, and (7) action is taken to 

close out completed TBARR contracts. 

In the Office of Management’s September 20, 2004, written 

response to this report, management agreed with the findings and 

recommendations and provided its corrective actions taken and 

planned to implement the recommendations. The full text of 

management’s response is provided as Appendix 3. 

Finally, as a general observation and concern, it should be noted 

that several key TBARR Program Officials and other personnel have 

recently left Federal service. For example, the TBARR Director of 

Project Management retired in May 2004. Additionally, the Deputy 

Assistant Secretary (Organization and Change Management) and 

the TBARR Director, both members of the senior executive service, 

and a TBARR Program Office management analyst retired on 

September 3, 2004. As noted in our prior Interim Audit Report, 

there has been significant turnover in the top leadership of the 

Department since the TBARR Program’s inception. The more 
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recent and direct loss of experienced personnel represents a 

significant risk to the successful completion of the TBARR Program 

activities within current anticipated timeframes and resources. 

Going forward, and considering that the President’s Budget for 

Fiscal Year 2005 requested an additional $20.3 million for the 

TBARR Program, the Office of Management will need to ensure 

qualified personnel are assigned to manage TBARR and continually 

monitor the program to mitigate that risk. 

Background 

After a June 1996 roof fire resulted in major damage to the Main 

Treasury building, Treasury decided to modernize the building. The 

TBARR Program was established in August 1998 for the purpose 

of (1) repairing and restoring the Main Treasury building to correct 

the damage caused by the roof fire, (2) restoring the historic fabric 

of the building, and (3) modernizing the building and its systems to 

comply with current codes and standards. At the same time, 

Treasury established the TBARR Program Office within the Office 

of Management to procure related services, oversee the design and 

construction activities, and coordinate employee moves during the 

construction. 

Starting with emergency funding received in Fiscal Year 1996 for 

the fire damage, Treasury has received funding each year since, in 

accordance with no-year and multi-year spending plans. Through 

Fiscal Year 2004, Congress appropriated a total of $225 million for 

the TBARR Program. From Fiscal Years 1996 through 2003, 

Treasury expended $159.3 million for the TBARR Program. 

Expenditures during Fiscal Year 2004 totaled $3.1 million as of 

May 18, 2004. TBARR interior renovation work is currently in the 

last phase and the TBARR project is expected to be completed in 

December 2005. 

When the TBARR Program Office was established, it consisted of a 

Program Director supported by a secretary and a management 

analyst. The TBARR Program Office also included a procurement 

group. The procurement group was responsible for the following: 

• Maintaining expert knowledge of procurement laws, regulations 

and Departmental policies to advise the TBARR Program 
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Director and staff of recommended courses of action in all 

procurement matters. 

• Determining appropriate types of contracts and approving 

specifications and scopes of work for procurement actions to 

meet TBARR program needs. 

• Preparing solicitation documents and determining evaluation 

factors. 

• Planning complex negotiation strategy, meeting with bidders/

offerors and negotiating terms and condition including price. 

• Scheduling and conducting pre-bid and pre-proposal 

conferences. 

• Awarding orders/contracts to the vendors whose bids or offers 

were most advantageous to the government. 

• Entering into and executing purchase orders, delivery orders, 

contracts and other fiscal and legal obligating documents. 

• Performing post-award contract administration responsibilities to 

execute contract and purchase/delivery order modifications, 

which alter the contracts’ terms, conditions, and/or pricing 

agreements. 

• Assessing contractor delays or failure to perform, issuing 

notices, showing cause letters and notices of termination, and 

negotiating and executing termination settlement agreements. 

• Determining and terminating purchase/delivery orders and 

contracts when appropriate. 

At the time of our audit, the TBARR Program Office had a 

dedicated procurement group staffed by a supervisory contracting 

officer (CO) and two other COs. These three individuals were 

detailed to the TBARR Program Office from the Procurement 

Services Division (PSD) of Treasury’s Departmental Offices (DO). 

The supervisory CO and another CO had unlimited acquisition 

authority under the FAR. 
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The third CO’s authority was limited to acquisitions of less than 

$1 million.2

The guidance for federal acquisitions is maintained and updated 

through a series of regulations and policy issuances. The FAR is 

the primary regulation used by federal agencies in their acquisition 

of supplies and services with appropriated funds. The FAR is 

issued under the joint authorities of the Administrator of the 

General Services Administration, the Secretary of Defense, and the 

Administrator of the National Aeronautics and Space 

Administration, through the Administrator, Office of Federal 

Procurement Policy, Office of Management and Budget. In 

addition, the Federal Acquisition Regulatory Council periodically 

issues Federal Acquisition Circulars (FAC) to address amendments 

to the FAR. FACs supersede previously issued FAR provisions. 

The Department of Treasury Acquisition Regulation (DTAR) 

implements and supplements the FAR within the Department. The 

DTAR is issued by Treasury’s Senior Procurement Executive under 

the authority of the FAR and Treasury Directive 76-01, Department 

of the Treasury Acquisition Regulation. Treasury Directive 

Publication (TD P) 76.01 D, Contracting Officer’s Technical 

Representatives Handbook (COTR Handbook), is issued by the 

Office of Procurement to provide Treasury personnel who are 

designated as COTRs with a source of basic guidance for 

monitoring contractor performance and for performing other 

contract administration duties. 

 

2

 According to FAR, contracting officers can bind the government only to the extent of the authority 

delegated to them. A contracting officer’s appointment certificate states any limitations on the scope 

of authority to be exercised that are in addition to limitations contained in applicable law or regulation. 

In determining a contracting officer’s authority, the appointing official considers the complexity and 

dollar value of the acquisitions to be assigned and the candidate’s experience, training, education, 

business acumen, judgment, character, and reputation. 
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Findings and Recommendations 

Finding 1 Contract Files Did Not Always Include Required Support 

for the Type of Contract Selected 

The FAR requires that each contract file, except for certain fixedprice acquisitions, include documentation to show why a particular 

contract type was selected. When required for the acquisition, the 

documentation, known as a “determination and findings” is to be 

prepared before the contract is awarded. The D&F must include 

enough facts and circumstances to clearly and convincingly 

support the contract type selected. 

Based on the 9 TBARR contracts we sampled, we found that the 

D&Fs for the contract type for 2 contracts did not include all FARrequired elements. The D&Fs did not, for example, cite: (1) the 

particular circumstances, facts, or reasoning in support of the 

contract type selected; and (2) the statute and/or regulation upon 

which the D&F was based. Additionally, the 2 D&Fs were not 

signed by an authorized official and 1 D&F was not dated. The 

2 contracts were: 

• TOS-00-TBAR-01, which was an indefinite delivery, indefinite 

quantity (IDIQ) contract not to exceed $863,634 for industrial 

hygienist services; and 

• TOS-99-TBAR-08, an IDIQ contract not to exceed $227,375 for 

facilities construction support services. 

An example of the inadequate D&Fs, for TOS-99-TBAR-08, is 

provided as follows: 
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Source: TBARR contract file for TOS-99-TBAR-08. 

We discussed the condition described above with the TBARR 

supervisory CO, who disagreed with our conclusion that the D&Fs 

did not meet minimum FAR requirements. Nevertheless, we 

believe the D&Fs in question lacked sufficient details of the 

determination and findings, and applicable FAR requirements to 

support that the best business decision had been made and the 

contract type was in the best interest of the government. That 

being said, while the documentation was not sufficient, we 

concluded based on our review of other information in the files that 

the type of contract used was appropriate. 

Recommendation

1. The Assistant Secretary for Management and Chief Financial 

Officer should ensure that Determination and Findings 

supporting the contract type for TBARR contracts are prepared 

in accordance with FAR requirements. 

Management Response. Management agrees that sufficient 

detailed information should be included in the D&F 

memorandum to clearly support the type of contract that is 

being awarded. As such, all information required by the FAR 

and DTAR shall be included in the D&F memoranda as 

appropriate for the contract type. Prior to issuance of any 

solicitation, the contract file including the D&F shall be 
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reviewed internally by the TBARR procurement staff. As an 

additional measure, the TBARR procurement staff has the 

option to utilize the services of the Procurement Services 

Division (PSD) Review Board for review and concurrence on 

D&Fs. 

OIG Comment. Management’s commitment to ensure that 

D&F memoranda conform with FAR and DTAR requirements is 

responsive to the intent of our recommendation. The 

response refers to the PSD Review Board. According to PSD 

standard operating procedures, the purpose of this review 

board, comprised of at least three members selected from a 

pool of GS-15 and GS-14 contracting officers and 

procurement analysts, is to review certain proposed 

procurement actions to ensure that the actions comply with 

procurement requirements, reflect sound business judgment, 

and are in the best interest of the Government. Among 

matters to be reviewed by the PSD are all competitive 

solicitations exceeding $500,000 and sole source awards 

exceeding $100,000. We encourage management to subject 

TBARR Program procurement actions to this same internal 

control. 

Finding 2 Documentation Supporting Qualifications and 

Appointments of Contracting Officer’s Technical 

Representatives (COTR) Was Inadequate 

The COTR is critical to ensure contracted goods and services are 

delivered on schedule and acceptable to the government. In this 

regard, the COTR furnishes technical direction, monitors the 

contractor, and advises the CO of the progress and any issues that 

impact the performance of the contract. The Department has 

established requirements in the DTAR to ensure that the COTR is 

technically qualified and properly designated to serve in this 

capacity. Specifically, the program office must nominate, in 

writing, the person to serve as a COTR for a contract. The 

program office’s nomination form identifies, among other things, 

the individual’s training and technical qualifications/experience. 

The CO must designate, in writing, the individual for the COTR 

assignment. The CO’s designation letter includes any special 

COTR duties relative to the contract. The letter must be 
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acknowledged (signed and dated) by the COTR. For each 

designation, the bureau or office’s chief procurement officer is to 

issue a Certificate of Appointment evidencing that the designated 

COTR has completed acquisition training. A Certificate of 

Appointment is valid for 3-years. The nomination form, designation 

letter, and Certificate of Appointment are to be maintained in the 

contract files. 

We determined that, to date, there have been 35 COTR 

designations during the terms of the 22 TBARR contracts for the 

period covered by this report.3

 In total, 12 employees served as 

COTRs, with most performing this function on more that one 

TBARR contract. We examined the contract files for the required 

COTR documentation. Very few of the documents were available 

in the files. We brought this to management’s attention in April 

2004 and requested the documentation. After numerous follow-up 

inquiries on the status of our request, the supervisory CO provided 

us a notebook in July 2004 which was represented to be all the 

COTR information we requested. We found extensive problems 

with the completeness of the information provided, and some of 

the documentation was questionable. Specifically: 

• Nomination forms were not provided for 7 of the 35 COTR 

designations. For 18 nominations, the nomination forms were 

missing either the signature of a TBARR official and/or the date 

signed. 

• Designation letters were not provided for 3 of the 35 COTR 

designations. For 23 designations, the designation letters were 

missing either the CO or COTR signature and/or the date(s) 

signed. 

• Certificates of Appointment were not provided for 4 of the 35 

COTR designations. For 19 certificates we were provided, the 

documentation was questionable for a variety of reasons. For 

example, we were provided a Certificate of Appointment dated 

December 16, 1998, for a COTR designation on contract no. 

TOS-00-TBAR-03. When we asked TBARR personnel for 

 

3

 The COTR is designated in the contract schedule at the time of the contract award. A notification is 

issued to the contractor if the COTR responsibilities are subsequently assigned to another individual 

during the contract term. 
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additional training documentation to support the Certificate, we 

were given a copy of another Certificate of Appointment for the 

same COTR that was dated April 1, 2000. This date was typed 

over another date that had been whited-out on the document 

copy. We later obtained an original Certificate of Appointment 

directly from the COTR. This Certificate was dated April 7, 

2000. There were other differences between the original 

Certificate of Appointment and the copies provided to our 

auditors earlier. 

We also noted that documentation was incomplete to support that 

designated COTRs received all required training in accordance with 

the DTAR. During the period covered by our audit, the minimum 

training requirement was 24 hours of basic acquisition training and 

4 hours of procurement ethics training. Additionally, COTRs are to 

complete 8 hours of refresher training every 3 years.4

 For 2 of the 

12 individuals assigned TBARR COTR duties, the contract files and 

evidence provided by the TBARR Program Office contained no 

documentation that they completed basic acquisition training or 

refresher training. The documentation for the other 10 individuals 

did show they completed basic acquisition training. However, 7 of 

these individual should have completed refresher training during the 

period of their COTR appointments; the documentation provided 

showed that only 2 of them had completed this training. It should 

be noted that for 1 of these 2 individuals, the refresher training 

was not completed until a year after it was due. For the other 

individual, the documentation provided showed that the COTR 

completed refresher training in 1995 but completed the basic 

acquisition training in 2003. 

Based on the above, we concluded that the TBARR Program Office 

did not maintain proper documentation of COTR designations in 

accordance with Treasury requirements. We also referred this 

matter to our Office of Investigations. 

 

4

 As of April 2004, this refresher training is an annual requirement. 
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Recommendations

The Assistant Secretary for Management and Chief Financial 

Officer should: 

1. For all currently designated COTRs, ensure that the contract 

files include properly executed, original nomination forms, 

designation letters, and Certificates of Appointment. 

Appropriate action should be taken for contracts missing this 

documentation, such as re-designating the assigned COTRs 

and modifying the contracts accordingly. 

Management Response. Management agrees that contract 

files should include the appropriate documentation. All 

memos, letters, and certifications found to be inadequate have 

been corrected and copies provided to the auditors. Effective 

April 28, 2004, COTR Certificates of Appointment are no 

longer required. Corrected documentation that pre-dated 

April 28, 2004, will be placed in the appropriate contract file. 

Additionally, contracts will be modified as appropriate to 

designate current COTRs. 

OIG Comment. The corrected documentation referenced in 

the management response was still incomplete and in certain 

instances, questionable. For example, copies of 13 COTR 

designation letters were provided to our auditors after we first 

brought this matter to management’s attention. None of the 

letters were signed by the COTR. One of the designation 

letters provided was for a COTR designation that we initially 

concluded was adequately supported—in this instance, the 

designation letter first provided was signed and dated by both 

the TBARR CO and the COTR. The second designation letter 

provided, however, was signed by a different TBARR CO but 

not signed by the COTR. Additionally, the typeset in this 

second letter was in a different font. Management’s 

commitment to correct deficiencies with existing contracts as 

necessary to reflect current COTR designations is responsive 

to the intent of our recommendation. We believe that at this 

point, management should focus on ensuring that current 

designations are supported with appropriate documentation 
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rather than attempt to correct past problems with COTR 

designations if original documentation is no longer available. 

 

2. Implement controls to ensure that going forward, required 

documentation of COTR designations is maintained in the 

TBARR contract files. 

Management Response. Management accepts the 

recommendation to implement controls to ensure that going 

forward, required documentation of COTR designations is 

maintained in the TBARR contract files. Prior to contract 

award, the contract file including all required COTR 

documentation shall be reviewed for regulatory compliance. In 

addition, the TBARR procurement staff will comply with PSD’s 

Standard Operating Procedures for COTRs which specifically 

require that a Nomination Memorandum including all training 

certificates, and the Designation Memorandum be included in 

the contract files. 

OIG Comment. Management’s commitment to ensure required 

documentation of COTR designations is included in the 

contract files is responsive to the intent of our 

recommendation. 

3. Ensure that all COTRs complete required basic acquisition 

training, procurement ethics training, and as applicable, 

refresher training, and that it is properly maintained in the 

contract files. 

Management Response. Management agrees that all COTRs 

must complete appropriate basic training and refresher 

training, and that training documentation will be properly 

maintained in the contract files. Current procedures for 

designating and approving COTRs include the requirement for 

successful completion of 40 hours of COTR training prior to 

designation. Additionally, COTRs are required to complete 

24 hours of refresher training every 3 years. Finally, a 

centralized file system containing COTR information is 

maintained by PSD and is available in a shared drive. The 

TBARR procurement staff will routinely monitor the centralized 

file system to identify COTRs that require refresher training. 
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OIG Comment. According to the DTAR, COTRs are required 

to complete at least 8 hours of maintenance training each 

year, not 24 hours over a 3-year period. With this caveat, 

management’s commitment to ensure COTR training is 

completed and documented in the contract file is responsive 

to the intent of the recommendation. 

Finding 3 Written Evaluations of Contractor Performance Were Not 

Prepared 

 

Information about past performance by contractors is relevant for 

future source selection purposes. Such information includes, for 

example, the contractor’s record of: (1) conforming to contract 

requirements and to standards of good workmanship; 

(2) forecasting and controlling costs; (3) adhering to contract 

schedules, including the administrative aspects of performance; 

(4) reasonable and cooperative behavior and commitment to 

customer satisfaction; and (5) generally, business-like concern for 

the interest of the customer. 

FACs 2001-10 and 2001-14 require agencies to prepare an 

evaluation of contractor performance for each construction 

contract of $500,000 or more and all other contracts exceeding 

$100,000 at the time the contracted work is completed. In 

addition, interim evaluations should be prepared as specified by the 

agency to provide current information for source selection 

purposes, for contracts with performance periods exceeding 1 

year. Typically, contracts with multiple option years should have 

annual performance evaluations prior to exercising each option. 

Ordinarily, the evaluating official who prepares the report should be 

the person responsible for monitoring contract performance. 

The TBARR contract records lacked evidence that interim (annual) 

or final evaluations of the contractor’s performance were prepared 

for the nine completed and open contracts we reviewed. The 

supervisory CO told us that the TBARR COs discussed the 

contractors’ performance with COTRs throughout the contract 

terms and before any option periods are exercised; however, these 

discussions were not documented. Without such written records, 

past performance information is not available to be considered in 
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future source selections involving the contractors. Additionally, 

decisions to exercise option periods were not adequately justified 

to be in the best interest of the government. 

After we informed the supervisory CO about this deficiency, the 

CO developed a standard operation procedure (SOP) for evaluating 

contractor performance. The SOP, issued by the Departmental 

Office’s Procurement Services Division in August 2004, addresses 

responsibilities, timeframes, and dollar thresholds for conducting 

and documenting these evaluations. The SOP, if implemented as 

described, should address this finding. 

Recommendations

The Assistant Secretary for Management and Chief Financial Office 

should ensure that: 

1. The recently issued SOP by the Procurement Services Division 

for preparing and documenting contractor performance 

evaluations is implemented by the TBARR Program Office, and 

that TBARR contracting officers and COTRs have been trained 

in the procedures. 

Management Response. Management agrees that the TBARR 

Program Office shall implement the recently issued SOP. The 

TBARR COs and COTRs have reviewed and implemented the 

SOP. As new COTRs are designated, TBARR procurement 

staff will provide the SOP and offer guidance as appropriate. 

OIG Comment. Management’s corrective action is responsive 

to the intent of our recommendation 

2. Contractor performance evaluations are prepared for all 

completed TBARR contracts and, as appropriate, for open 

TBARR contracts. The contract records should document the 

basis for the evaluations. 

Management Response. Management agrees that contractor 

performance evaluations shall be prepared for all completed 

TBARR contracts and, as appropriate, for open contracts. The 

COTRs assigned to the TBARR contracts will follow the 
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requirements for completing contractor performance 

evaluations as documented in the SOP. TBARR COTRs will 

use inspection reports, summary reports, and other contract 

records as the basis for evaluating contractor performance. 

OIG Comment. Management’s planned actions, if 

implemented as described, are responsive to the intent of our 

recommendation. However, its response did not state a target 

date for preparing overdue performance evaluations on 

completed and open TBARR contracts. This action should be 

taken expeditiously. 

Finding 4 Completed TBARR Contracts Were Not Closed in a Timely 

Manner 

Contract close-out is a process through which a CO ensures: (1) all 

contracted services have been rendered or supplies delivered and 

accepted; (2) required evaluations of contractor performance have 

been completed and documented; (3) all payments and collections 

have been made; (4) releases from liabilities, obligations, and 

claims have been obtained from the contractor; (5) assignments of 

refunds and credits to the government have been executed by the 

contractor; (6) all administrative actions have been accomplished, 

including the settlement of disputes, protests, and litigation; 

determination of final overhead rates; release (deobligation) of 

excess funds; and disposal of property; and (7) the contract file is 

properly documented. As prescribed in the FAR, unless litigation is 

involved, completed firm-fixed price (FFP) contracts should 

generally be closed within 6 months. Other contract types, such 

as IDIQ contracts, should generally be closed within 20 months. 

Certain contract actions related to close-out, including the 

deobligation of excess funds, should be documented by a contract 

modification. 

As of August 2004, the TBARR procurement group had not closed 

out any of the completed contracts we tested. As shown in the 

following table, these contracts were completed in 1999 and 

2000. 
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Table 1: Contracts Ready for Close-out 

Dates 

Contract Number/Type Contract 

Amount Completed Close-Out 

Due 

TOS-99-TBAR-06 (IDIQ) $268,560 11/29/1999 7/2001 

TOS-99-TBAR-08 (IDIQ) 227,375 2/15/2000 10/2001 

TOS-99-TBAR-05 (FFP) 200,955 3/31/2000 9/2000 

 GS-35F-4461G (FFP) 38,490 4/14/2000 10/2000 

Source: TBARR contract files.

Although not formally closed out, excess funds of $1,180 for 

contract no. GS-35F-4461G were deobligated in July 2002 and 

September 2002, even though a formal contract modification was 

not executed for the deobligation. There were no excess funds 

requiring deobligation for the other 3 completed contracts. 

The TBARR supervisory CO told us that the TBARR staff has not 

had an opportunity to close out the above contracts. The CO also 

stated that DO uses a contractor to assist with contract close-outs 

for contracts administered through the PSD. However, according 

to the CO, the TBARR Program Office did not use the PSD 

contractor because the TBARR Program did not have funds 

available to pay for these services. 

Recommendation

1. The Assistant Secretary for Management and Chief Financial 

Officer should ensure that the TBARR procurement group 

performs the necessary actions to close out completed TBARR 

contracts. Additionally, controls should be established to 

ensure open TBARR contracts are closed out in a timely manner 

after the contracted goods or services have been provided, and 

contract modifications are properly executed to deobligate any 

excess funds. 

Management Response. Management acknowledges and 

agrees that contract close-outs are required and should be 

performed in a timely manner. Resources have been allocated 

to begin close-out procedures in early October 2004 for the 

eight inactive TBARR contracts. The close-out process for 

these contracts should be completed by December 30, 2005. 

To ensure that appropriate controls are in place for timely close-
TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 20 

 (Interim Report) 

out of active contracts, a contract close-out schedule has been 

developed in accordance with FAR time frames. Management 

will periodically update the close-out schedule to accurately 

reflect contract completion dates and adjust the close-out 

period accordingly. 

OIG Comment. Management’s planned actions are responsive 

to the intent of our recommendation. 

 * * * * * 

We appreciate the courtesies and cooperation provided to our staff 

during the audit. If you wish to discuss this report, you may 

contact me at (202) 927-5400 or Thomas Byrnes, Director, 

Procurement Audits, at (202) 927-5904. Major contributors to this 

report are listed in Appendix 4. 

Marla A. Freedman 

Assistant Inspector General for Audit 
Appendix 1 

Objectives, Scope, and Methodology 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 21 

 (Interim Report) 

We performed this audit of the TBARR Program pursuant to H.R. 

108-401. In that report, we were directed to audit all Treasury 

Building renovation and restoration contracts since Fiscal Year 

1998. The audit objectives include: (1) a review of compliance 

with all applicable procurement laws, rules, and regulations, and 

the ABA of 1968, as amended; (2) a review of the scope, 

requirements, and cost reasonableness of the project, as well as 

the process for managing change orders to the original scope and 

design; and (3) a review of the effectiveness, efficiency, and 

economy of contractor operations. These objectives will be 

addressed through a series of audit reports. 

This report presents the results of our review of TBARR Program 

contract files for compliance with applicable FAR and Treasury 

procurement requirements. Specifically, we tested whether the 

contract files contained adequate and appropriate documentation 

for (1) contract awards; (2) appointments and qualifications of 

COTRs; (3) evaluation of contractor performance; and (4) for 

completed contracts, close-out actions. 

We reviewed applicable requirements in the FAR and related 

issuances, the DTAR, the COTR Handbook, and TBARR Program 

standard operating procedures. We also interviewed Treasury 

officials and personnel involved in the TBARR Program, including 

the contracting officers detailed to TBARR from the Departmental 

Offices’ Procurement Services Division, COTRs, and staff with the 

Office of Financial Management. 

As of March 12, 2004, the TBARR Program Office had awarded 22 

contracts in connection with the TBARR Program. The total 

amount of these contracts as modified through that date was 

approximately $155.3 million.5,6 Fourteen (14) of these contracts 

totaling $153.0 million were “open,” or still in progress; 8 

contracts totaling $2.3 million were completed. 

For our compliance tests of contact awards, contractor 

performance evaluations, and close out actions on completed 

contracts, we selected a sample of 5 open contracts and 4 

 

5

 Of this amount, $144.6 million had been obligated against TBARR Program appropriations and $10.7 

million had been obligated against other funding sources. 6

 A total of 537 modifications have been issued for the 22 contracts as of March 12, 2004. 
Appendix 1 

Objectives, Scope, and Methodology 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 22 

 (Interim Report) 

completed contracts, or 9 contracts in total, and examined the 

related TBARR Program Office contract files. In selecting this 

sample, we focused on dollar coverage, as well as a cross-section 

of contract types. The contract amounts obligated against the 

TBARR Program appropriations, as modified, for the 5 open 

contracts totaled $121 million, or 78 percent of the universe of 

open contracts. Included in our sample was the prime construction 

contract for the interior renovation of Main Treasury in the amount 

of $103.3 million, as modified. The total contract amounts 

obligated against the TBARR Program appropriations, as modified, 

for the 4 completed contracts was $0.7 million, or 30 percent of 

the universe of completed contracts. 

With respect to the appointment and qualifications of COTRs, we 

first examined the contract files for all the TBARR contracts to 

determine if DTAR-required documentation was present. After 

noting that little of the documentation was available in the contract 

files, we brought this to management’s attention. As discussed in 

Finding 2 of this report, we found extensive problems with the 

COTR documentation. 

A Procurement Analyst with the Internal Revenue Service’s Office 

of Procurement Policy, Quality Assurance Division, assisted us in 

reviewing the contract documentation. This assistance was 

arranged through the Department’s Office of the Procurement 

Executive. The results of the Procurement Analyst’s review were 

considered in forming our findings and conclusions in this interim 

report. 

We conducted our audit of the TBARR Program, and prepared this 

report, in accordance with generally accepted government auditing 

standards. 
Appendix 2 

List of TBARR Contracts Awarded Since 1998 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 23 

 (Interim Report) 

Table 2: List of TBARR Contracts Awarded Since 1998

Contract Amount, as modified 

through March 12, 2004 Contract Number/

Description Status Award Date 

Total 

Obligated to a 

TBARR Program 

Appropriation 

GS-11P98MYDO014l (a),(d) 

Inspectors, Escorts, etc. Open 10/6/98 $7,474,408 $7,474,408 

TOS-99-TBAR-02 (a) 

Cleaning, repointing, 

repairing weatherproofing 

the exterior building

Open 12/14/98 9,741,706 9,741,706 

TOS-99-TBAR-01 (a),(d) 

Architect and Engineering 

Services 

Open 12/17/98 9,097,014 8,934,414 

TOS-99-TBAR-04 (a),(d) 

Interior Renovation Open 02/18/99 103,303,646 103,303,646 

TOS-99-TBAR-05 (b),(d) 

Statue Restoration Completed 03/19/99 200,955 200,955 

TOS-99-TBAR-06 (b),(d) 

Facilities Construction 

Support Services 

Completed 04/12/99 268,560 268,560 

TOS-99-TBAR-07(b) 

Architect and Engineering 

Design Services 

Completed 06/21/99 335,303 328,746 

TOS-99-TBAR-08(b),(d) 

Facilities Support Completed 08/24/99 227,375 149,375 

TOS-00-TBAR-01 (b),(d) 

Industrial Hygienist 

Services 

Open 11/23/99 863,634 269,474 

TOS-00-TBAR-02(b) 

Construction Support Completed 02/16/00 515,739 466,549 

GS-35F-4461G (c),(d) 

LAN cabling support for 

relocations 

Completed 02/18/00 38,490 38,490 

GS-23F-0168K (c) 

Professional Construction 

Support 

Open 03/29/00 4,231,686 3,626,141 

TOS-00-TBAR-03 (a) 

Custodial Services Open 04/07/00 4,355,872 58,907 

TOS-00-TBAR-04(b) 

Relocation Services Completed 09/22/00 684,025 467,308 

TOS-01-TBAR-02(b) 

Facilities Support Completed 11/27/00 44,860 14,586 

GS-29F-0177G (c) 

Furniture Open 6/15/01 5,822,257 5,736,742 

TOS-02-TBAR-02 (c) 

Telecommunication 

Services 

Open 09/27/01 1,004,311 1,004,311 
Appendix 2 

List of TBARR Contracts Awarded Since 1998 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 24 

 (Interim Report) 

Table 2: List of TBARR Contracts Awarded Since 1998

Contract Amount, as modified 

through March 12, 2004 Contract Number/

Description Status Award Date 

Total 

Obligated to a 

TBARR Program 

Appropriation 

TOS-02-TBAR-03 (c) 

Facilities Support Open 10/30/01 3,117,588 194,899 

GS-10F-0061L (c),(d) 

Relocation Services Open 1/31/02 1,086,518 952,658 

GS-35F-4581G (c) 

Telecommunication 

Support

Open 5/03/02 2,564,751 1,096,913 

GS-10F-05-14N (c) 

Consulting Services for 

installation and 

implementation of 

Computer Aided Facility 

Management software 

Open 8/20/03 69,577 69,577 

GS-35F-5100H (c) 

CAFM Software Open 8/22/03 195,000 195,000 

Totals $155,243,275 $144,593,365

Source: TBARR contract files. 

(a) - Competitively Awarded Contract 

(b) - Small Business Administration Section 8a Contract 

(c) - General Service Administration Schedule Contract 

(d) - Contract tested by OIG for compliance with FAR and/or Treasury requirements for 

contract award, evaluation of contractor performance, and contract close-out actions (for 

completed contracts). 
Appendix 3 

Management Response 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 25 

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Appendix 3 

Management Response 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 26 

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Appendix 3 

Management Response 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 27 

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Appendix 3 

Management Response 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 28 

 (Interim Report) 
Appendix 3 

Management Response Appendix A 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 29 

 (Interim Report) 
Appendix 3 

Management Response Appendix B 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 30 

 (Interim Report) 
Appendix 4 

Major Contributors To This Report 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 31 

 (Interim Report) 

Office of Inspector General

Thomas E. Byrnes, Director, Procurement Audits 

Delores V. Dabney, Audit Manager 

Leslye K. Burgess, Auditor-in-Charge 

Dwight L. Glenn, Auditor 

Gerald H. Kelly, Auditor 

Shaneasha Edwards, Program Analyst 

Andrew J. Kirkpatrick, Program Analyst 

Michael C. Sinko, Referencer 

Maria V. Carmona, Referencer 

Internal Revenue Service 

Bonnie Hanger, Procurement Analyst, Office of Procurement Policy 
Appendix 5 

Report Distribution 

TBARR Procurement Practices Need to be Improved (OIG-04-043) Page 32 

 (Interim Report) 

The Department of the Treasury

Acting Assistant Secretary for Management 

Acting Chief Financial Officer 

Assistant Secretary for Legislative Affairs 

Acting Deputy Assistant Secretary, Organization and Change 

 Management 

Director, Office of Financial Management 

Director, Office of Accounting and Internal Control 

Office of Management and Budget

OIG Budget Examiner 

United States Congress

House Committee on Appropriations 

House Committee on Appropriations, Subcommittee on 

Transportation, Treasury, and Independent Agencies 

Senate Committee on Appropriations 

Senate Committee on Appropriations, Subcommittee on 

Transportation, Treasury and General Government