Office of the Inspector General

U.S. Department of Justice

OVERSIGHT ★ INTEGRITY ★ GUIDANCE

Management Advisory Memorandum 

Concerning the 

Department of Justice’s 

Administration and Oversight 

of Contracts

Audit Division 20-082 July 2020
U.S. Department of Justice 

Office of the Inspector General 

July 13, 2020 

MANAGEMENT ADVISORY MEMORANDUM FOR: 

MICHAEL H. ALLEN 

DEPUTY ASSISTANT ATTORNEY GENERAL AND 

SENIOR PROCUREMENT EXECUTIVE 

JUSTICE MANAGEMENT DIVISION 

FROM: MICHAEL E. HOROWITZ 

INSPECTOR GENERAL 

SUBJECT: Notification of Important Concerns Identified in 

the Department of Justice’s Administration 

and Oversight of Contracts 

The purpose of this memorandum is to advise you of potentially systemic 

issues that the Office of the Inspector General (OIG) has identified related to 

the Department of Justice’s (Department) contract management through the 

OIG’s audit work. In fiscal years (FY) 2013 through 2019, the Department 

awarded over $54 billion in contracts for products and services.1 Over those 

same 7 years, our audits of the Department’s contracts and related programs 

frequently identified significant issues linked to inadequate contract 

solicitation, award, administration, and oversight. Specifically, our completed 

audits have regularly identified the following contracting problems: 

(1) inadequate execution of contract oversight responsibilities, (2) insufficient 

quality assurance practices, and (3) non-compliance with contracting-related 

laws and regulations. For these reasons, the OIG has consistently identified 

contract administration and oversight in its annual Top Management and 

Performance Challenges Facing the Department of Justice. Nevertheless, the 

Department’s FY 2019 Enterprise Level Risk Profile does not mention contract 

management. 

While the Department, through actions taken to address recommendations 

in our audit reports, has made progress towards improving its contract 

administration and oversight, we are providing this memorandum to 

summarize the issues and concerns that we have identified in multiple OIG 

1 Federal Procurement Data System (accessed on October 9, 2019). 

1 
audits and that we believe should be addressed comprehensively. The contract 

audits that form the basis for this memorandum include reviews of contracts 

administered by the Federal Bureau of Prisons (BOP); Federal Bureau of 

Investigation (FBI); Drug Enforcement Administration (DEA); United States 

Marshals Service (USMS); Bureau of Alcohol, Tobacco, Firearms and Explosives 

(ATF); Civil Division; and Justice Management Division (JMD). We believe that 

the breadth and pervasiveness of our findings warrant the Department’s 

sustained attention, particularly in light of the important role that contract 

oversight plays in ensuring that taxpayer dollars are spent wisely. Further, we 

believe the Department should consider including contract management in its 

enterprise-level risk management prioritization. 

Contract Oversight Responsibilities 

Department components utilize Contracting Officers, who, pursuant to 

the Federal Acquisition Regulation (FAR), are responsible for ensuring 

performance of all necessary actions for effective contracting, ensuring 

compliance with the terms of the contract, and safeguarding the interests of 

the United States in its contractual relationships.2 Contracting Officers must 

be appointed in writing and receive clear instruction regarding the limitations 

of their authority.3 While Contracting Officers have the ultimate responsibility 

and authority for contract administration, they also have the authority to 

designate a Contracting Officer’s Representative (COR) to assist in 

administering and overseeing the contract.4 A COR’s responsibilities could 

include reviewing invoices, verifying the existence of adequate funding, and 

ensuring the proper goods or services have been received. The FAR specifies 

that a COR, whom a Contracting Officer must designate in writing, shall be 

qualified by training and experience commensurate with the responsibilities to 

be delegated.5 

In several of our contract audits, we found instances where the 

Contracting Officer or COR did not have the technical proficiency to perform 

the responsibilities they were assigned. For example, in an audit of a nearly 

$700 million USMS contract to operate a detention center, we learned that the 

COR had minimal training and experience.6 The COR was appointed to oversee 

the contract just 3 weeks after attaining COR certification and with no prior 

contracting experience. This COR also did not have experience in detention 

2 FAR Subpart 1.602-2, Responsibilities. 

3 FAR Subpart 1.602-1, Authority and 1.603-3, Appointment. 

4 FAR Subpart 1.602-2, Responsibilities. 

5 FAR Subpart 1.602-2, Responsibilities. 

6 U.S. Department of Justice (DOJ) Office of the Inspector General (OIG), Audit of the 

United States Marshals Service Contract No. DJJODT7C0002 with CoreCivic, Inc., to Operate the 

Leavenworth Detention Center Leavenworth, Kansas, Audit Report 17-22 (April 2017), 14-15. 

2 
 

 

 

services and relied significantly on the expertise of a Deputy U.S. Marshal to 

monitor contractor performance. Moreover, USMS did not provide the COR 

with additional training to bolster the individual’s knowledge of detention 

services and monitoring and oversight. During the 4-year period following the 

COR’s appointment, the only formalized detention-related training the COR 

received was a 60-minute lecture on roles and responsibilities during the 

pre-solicitation and post-award phases of a contract. As noted in our audit 

report, the COR maintained an infrequent onsite presence at the Leavenworth 

Detention Center (LDC), did not document the inspection activities performed, 

and did not develop an inspection program or monitoring procedures. These 

issues contributed to the overall insufficient oversight that resulted in the 

USMS becoming aware of incidents at the LDC only after they occurred, and 

that allowed several problems at the LDC to persist over a significant period of 

time. Furthermore, in our judgment, the USMS’s lack of effective continuous 

monitoring at the LDC presented risks that could extend throughout all its 

other contract detention facilities. 

Another example of inadequate experience and training was presented in 

an audit of an FBI aircraft lease contract.7 In this instance, the FBI did not 

formally appoint a COR, and the Contracting Officer, who was responsible for 

contract performance and billing, did not have the requisite technical expertise 

to oversee the contract. In another instance, our review of a DEA aviation 

support contract found that an individual the DEA had designated as an 

alternate COR did not maintain appropriate COR certification in accordance 

with the FAR’s continuing learning requirements.8 As the findings of these 

audits demonstrate, adequate training and experience is crucial to a COR’s 

ability to perform the delegated contract oversight responsibilities. 

In multiple other instances, our audits revealed that CORs did not fully 

understand the responsibilities delegated to them in their designation letters or 

were simply not completing their designated responsibilities. For example, 

during our audit of a DEA regional linguist services contract, we found that the 

COR was not performing the majority of the responsibilities as identified in the 

COR’s designation letter, including the review and approval or disapproval of 

invoices. Instead, other individuals in the DEA Special Operations Division, 

who had not received COR-specific training, reviewed the invoices, and we 

found the improper payment of some invoices.9 Also, during our audit of 16 

ATF small business sole-source contracts, we noted that the CORs responsible 

7 DOJ OIG, Audit of the Federal Bureau of Investigation’s Aircraft Lease Contract 

Awarded to Midwest Jet Center, LLC, DBA Reynolds Jet Management, Audit Report 17-30 

(July 2017), 9. 

8 DOJ OIG, Audit of the Drug Enforcement Administration’s Aviation Support Services 

Contract with L3 Vertex Aerospace, Audit Report 18-19 (March 2018), 17. 

9 DOJ OIG, Audit of the Drug Enforcement Administration’s Regional Linguist Services 

Contract Awarded to Conduit Language Specialists, Inc., Audit 18-08 (January 2018), 17-18. 

3 
 

 

for daily administration and oversight of the contracts were unaware of 

subcontractors working on contracts. In addition, the CORs did not know the 

division of labor between the prime contractor and the known subcontractors, 

which increased the risk of non-compliance with regulatory limits on the 

amount of subcontractor pass-through costs and small business workload 

requirements.10 

In addition to those formally designated as CORs, the Office of 

Management and Budget (OMB) advises that other individuals, such as Task 

Monitors, can assist Contracting Officers with contract management 

functions.11 Although OMB specifies that Task Monitors should complete 

training based on their level of experience and the type of contract managed, 

we found that the DEA did not require individuals assigned to Task Monitor 

positions receive training prior to serving in the position, even though those 

individuals are delegated responsibilities related to contract administration and 

oversight.12 We highlighted this issue in a Management Advisory 

Memorandum to the DEA prior to the issuance of a 2018 report, and in 

response the DEA advised that all Task Monitors who oversee its regional 

linguist contracts would complete FAC-COR Level I training covering the basic 

knowledge and skills needed to perform duties, such as proper communication, 

documentation, contract monitoring, payments, and ethics.13 We believe this 

training requirement should be implemented Department-wide to ensure that 

all Task Monitors are required to complete at least FAC-COR Level I training 

prior to being designated a Task Monitor in accordance with OMB guidance. 

This minimal level of training only requires 8 hours of training every 2 years. 

We also note that, since September 8, 2016, the Department has required any 

employee seeking any level of FAC-COR certification to complete three specified 

free online Federal Acquisition Institute (FAI) courses in addition to the 

government-wide FAC-COR requirements, and we believe these courses should 

also be required for Department Task Monitors.14 

Given the repeated issues we have identified with contract administration 

and oversight in our work, we are concerned that these problems may be 

systemic across the Department. It is essential that each component 

maintains guidance and procedures to assist assigned personnel with their 

10 DOJ OIG, Audit of the Bureau of Alcohol, Tobacco, Firearms, and Explosives Small 

Business Sole-Source Contracting, Audit 19-15 (March 2019), 25-26. 

11 OMB Memorandum: Revisions to Federal Acquisition Certification for Contracting 

Officer’s Representatives (FAC-COR), September 6, 2011. 

12 DOJ OIG, Contract Awarded to Conduit Language Specialists, Inc., 21. 

13 DOJ OIG, Contract Awarded to Conduit Language Specialists, Inc., 64-73. 

14 The three FAI courses are: FAC 018 – Green Purchasing for Civilian Acquisition, 

FAC 031 – Small Business Programs, and FAC 043 – Ethics & Procurement Integrity for the 

Acquisition Work Force. 

4 
 

contracting responsibilities and identifies effective training to ensure that 

contracting personnel attain the knowledge and understanding they need to 

properly perform their roles in administering and overseeing Department 

contracts. Doing so will help the Department prevent deficiencies in contractor 

performance, contract administration, and financial management. 

Quality Assurance 

Quality assurance (QA) is an essential contract oversight activity and is 

the responsibility of both the contractor and the government. More specifically, 

the contractor is responsible for carrying out its obligations under the contract 

in terms of quality, timeliness, and cost, while the government is responsible 

for ensuring that the services and supplies received meet the quality and 

performance requirements of the contract. The FAR states that QA shall be 

performed at such times and places as may be necessary to determine that the 

supplies or services conform to contract requirements. To effectuate this 

mandate, the FAR advises that QA surveillance plans, specifying the work 

requiring surveillance and method of surveillance, should be prepared in 

conjunction with the preparation of the statement of work.15 The FAR further 

requires that contract QA be performed by or under the direction or 

supervision of government personnel.16 These QA requirements help to ensure 

that the government contracting entity is getting what it is paying for and that 

federal contracting dollars are being spent wisely and appropriately. However, 

we found that Department components are not always developing QA 

surveillance plans, as required by the FAR. For example, in our audit of a DEA 

regional linguist services contract, we found that the DEA placed full reliance 

for QA on the contractor and failed to review the contractor’s QA surveillance 

plan, as stipulated in the contract, to determine whether it was adequate and 

to ensure that the contractor was following the plan.17 

If a component does not have its own QA surveillance plan, it cannot 

ensure that the supplies and services it received and purchased adequately 

met all contract requirements. This lack of QA can be costly to the 

Department, resulting in overpayment when the contractor has not complied 

with the contractual terms. Additionally, such lack of oversight risks noncompliance with the primary FAR cost principles, which require that all costs 

billed to a contract be reasonable, allocated properly, and comply with the 

terms of the contract.18 In the aforementioned DEA contract, where we found 

that there was no government QA surveillance plan, we also found that the 

15 FAR Subpart 46.401(a), Quality Assurance, General. 

16 FAR Subpart 46.401(e), Quality Assurance, General. 

17 DOJ OIG, Contract Awarded to Conduit Language Specialists, Inc., 25-26. 

18 FAR Subpart 31.201-2, Contracts with Commercial Organizations, Determining 

Allowability. 

5 
 

contractor failed to enforce or follow its own QA surveillance plan. As a result, 

93 percent of the sampled linguists did not have the required language 

proficiency testing prior to working on the contract and a number of linguists 

worked under the contract without an approved background investigation, as 

required by the contract. This led to the OIG questioning nearly $3 million in 

costs as unallowable under the terms of the contract. 

We have also found multiple instances where the Department conducted 

QA activities, but its processes were inadequate and did not identify significant 

contractor deficiencies. For example, an audit of an FBI aircraft lease contract 

revealed that the contract had not specified performance metrics.19 As a 

result, the FBI could not take meaningful recourse when the aircraft 

experienced significant unexpected downtime and the contractor did not 

provide a backup aircraft. We estimated that this resulted in 44 days or 

$580,000 in unexpected downtime. In addition, in multiple audits of BOP 

residential reentry centers, we found that while the BOP had processes in place 

to address contract compliance, the BOP was not using those established 

procedures to monitor the contractors and the procedures did not adequately 

address the quality of programming provided by the contractors.20 

Further, in the audit of a DEA contract awarded for financial 

investigative services, we found that the Subject Matter Experts lacked 

educational requirements, as specified in the contract.21 The DEA, however, 

did not identify this deficiency, and it did not grant a written waiver of the 

contract requirements prior to approving these individuals’ experience as a 

substitute for education requirements, as specified in the contract. Therefore, 

without a waiver, the DEA effectively paid a premium of $485,356 over what it 

would have paid these individuals had they served in a lower tier labor 

category. The lack of a process to ensure that the DEA documented required 

waivers before hiring and subsequently paying these individuals as Subject 

Matter Experts placed the government at an unnecessary risk of overpaying for 

services. 

Another important component of monitoring contractor performance is 

entering performance information into the Contract Performance Assessment 

Reporting System (CPARS). This government-wide application is used to 

document contractor performance, including the contractor’s success or failure 

to meet contract requirements, control costs, and adhere to contract schedules. 

19 DOJ OIG, Contract Awarded to Midwest Jet Center, 5-7. 

20 DOJ OIG, Audit of the Federal Bureau of Prisons Residential Reentry Center Contract 

No. DJB200244 Awarded to Centre, Inc. Fargo, North Dakota, Audit 17-25 (June 2017); DOJ 

OIG, Audit of the Federal Bureau of Prisons’ Management of Inmate Placements in Residential 

Reentry Centers and Home Confinement, Audit 17-01 (November 2016). 

21 DOJ OIG, Audit of the Drug Administration’s Asset Forfeiture Program Task Orders 

Awarded to Maximus, Inc., for Financial Investigative Services, Audit 18-26 (April 2018), 19-20. 

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The Department and other government agencies rely on this information when 

making subsequent award decisions, making accurate and timely completion of 

the reports in CPARS critical to future procurement efforts. The FAR generally 

requires that contracting officials prepare performance evaluations and enter 

the information into CPARS at least annually during the contract, and also 

when the work under a contract or order is completed.22 

We have repeatedly found that components did not meet this 

requirement at all, or only met it months or years late. Most recently, at ATF 

and the DEA, we were told that CPARS reports were not being completed 

because the automated system had not generated email requests to submit the 

assessment reports to the appropriate personnel.23 CPARS is a crucial element 

of a comprehensive oversight framework and should be tracked and completed 

in a timely manner by the appropriate contracting officials. We are concerned 

that inconsistencies in CPARS reporting may lead to the Department and other 

government agencies relying on the services of suboptimal contractors, 

resulting in unnecessary delays or subpar products and services that waste 

taxpayer dollars. Therefore, we recommend that the Department develop policy 

or implement procedures to ensure that contractor performance evaluations 

are completed, accurate, and entered into CPARS in a timely manner. 

Compliance with Laws and Regulations 

The FAR is a vast and complex set of rules that govern the process by 

which agencies in the federal government acquire goods and services. In 

addition to the FAR provisions already identified related to contract oversight 

and QA, we have found that Department components are not consistently 

following several other provisions, including provisions related to maintaining 

appropriate documentation to support procurements, maximizing competition, 

avoiding personal services contracts, and purchasing from required sources. 

Contract File Documentation 

To begin, the FAR prescribes requirements for the government to 

establish and maintain files that contain records of all contractual actions.24 

The contract documentation must be sufficient to constitute a complete history 

of the transaction for the purposes of: (1) providing a complete background as 

a basis for making informed decisions at each step of the acquisition process; 

(2) supporting actions taken; (3) providing information for reviews and 

investigations; and (4) furnishing essential facts in the event of litigation or 

22 FAR Subpart 42.1502, Contractor Performance Information, Policy. 

23 DOJ OIG, Audit of the Bureau of Alcohol, Tobacco, Firearms and Explosives SoleSource Small Business Contracting; Audit 19-15 (March 2019), 23 and DOJ OIG, Contract 

Awarded to Conduit Language Specialists, Inc., 22. 

24 FAR Subpart 4.801, Government Contract Files, General. 

7 
congressional inquiries.25 Our audit work has revealed multiple occasions 

where contracting personnel were not maintaining adequate contract files. For 

example, in our audit of an FBI aircraft lease contract, inconsistent with the 

FAR and FBI policy, the contract file did not include the market research to 

support a determination that the contract price was fair and reasonable, 

contractor performance assessments, or copies of invoices and invoice tracking 

documentation.26 Similarly, an audit of a BOP dental services contract 

revealed that the contract file did not contain the documentation used to 

support the decision to grant the contract to the awarded contractor.27 Given 

the breadth and substantial monetary value of the Department’s contracts, it is 

essential that contracting personnel retain all documentation used to support 

the decision to award current and future contracts. Maintaining such 

documentation ensures that there is a complete record of the justifications, 

decisions, and rationale for awarding contracts. This in turn ensures that the 

Department has information contemporaneous to the contract award decision 

to address any future contract disputes, including bid protests. 

The Department has the flexibility to purchase a variety of goods and 

services using a wide selection of contract types. Contract types vary according 

to the degree and timing of the responsibility assumed by the contractor as well 

as the amount and nature of the profit incentive offered to the contractor for 

achieving specific goals. Generally, a firm-fixed-price (FFP) contract is 

preferred because it places the responsibility for cost control and performance 

on the contractor. However, when the amount of goods or services is 

uncertain, the government may use additional contract types, including timeand-materials contracts, because it is not possible to accurately estimate the 

extent or duration of the work or anticipate costs with any reasonable degree of 

confidence. While time-and-material type contracts may provide the most 

appropriate cost structure in many cases, these contracts provide no profit 

incentive for contractors to control costs or maximize performance. 

Consequently, appropriate government oversight of time-and-material type 

contracts is especially important to ensure that contractors use effective cost 

controls and efficient performance methods. When other contract types are 

used, the FAR encourages agencies to continually reevaluate whether contracts 

can be transitioned to FFP or lower-risk contract types.28 In addition, when a 

contract type other than FFP is used, the FAR requires Contracting Officers to 

include documentation to adequately justify that decision.29 Despite these 

25 FAR Subpart 4.801(b), Government Contract Files, General. 

26 DOJ OIG, Contract Awarded to Midwest Jet Center, 10. 

27 DOJ OIG, Audit of the Federal Bureau of Prisons’ Contract No. DJBP0616BPA12004 

Awarded to Spectrum Services Group, Inc. Victorville, California, Audit 17-20 (March 2017), 

9-10. 

28 FAR Subpart 16.103(c), Negotiating Contract Type. 

29 FAR Subpart 16.103(d), Negotiating Contract Type. 

8 
requirements, we often have found that contract files did not sufficiently 

document price analysis to demonstrate that the Department was paying a fair 

and reasonable price for services or include plans regarding the viability to 

transition to a lower-risk contract in the future.30 As we noted in our audit 

report of USMS’s Court Security Officers procurement process, not ensuring 

compliance with these requirements creates a risk that the Department may 

continue to award riskier types of contracts in future acquisitions even if the 

circumstances justifying the initial use of those types of contracts has 

changed.31 

Maximizing Competition 

Further, while the FAR generally prescribes policies and procedures to 

promote full and open competition in the acquisition process, the regulation 

acknowledges that there are circumstances when such competition is not 

appropriate and provides authority for contracting without full and open 

competition, including awarding sole-source contracts.32 The FAR states that 

Contracting Officers shall not commence negotiations for a sole-source contract 

without justifying such an action in writing, certifying the accuracy and 

completeness of the justification, and obtaining agency approval of the 

justification.33 Again, we have found that these requirements are not 

consistently followed by Department components. For example, USMS did not 

obtain competition to the maximum extent practicable in connection with a 

sole-source contract for detention services.34 In addition, the narrative for the 

justification of the sole-source contract did not support its conclusion and was 

missing the Contracting Officer’s certification that its contents were accurate 

and complete to the best of the Contracting Officer’s knowledge. Similarly, at 

FBI, we found that the appropriate contracting personnel did not sign and 

approve a sole-source justification for an aircraft lease until approximately 

3 months after the contract was executed and 4.5 months after the period of 

performance had begun.35 Further, in connection with the audit of the 

Department’s administration of the September 11th Victim Compensation 

Fund, we found that the Civil Division did not provide a justification that 

sufficiently detailed why the selected contractor was uniquely qualified to 

30 For example, DOJ OIG, Aviation Support Services Contract with L3 Vertex Aerospace, 

13-15; DOJ OIG, Audit of the United States Marshals Service Judicial Security Division’s Court 

Security Officers Procurement Process, Audit 18-20 (March 2018), 8-9. 

31 DOJ OIG, Court Security Officers Procurement Process, 9. 

32 FAR Subpart 6.1, Full and Open Competition; FAR Subpart 6.3, Other Than Full and 

Open Competition. 

33 FAR Subpart 6.303-1, Other Than Full and Open Competition, Requirements. 

34 DOJ OIG, United States Marshals Service’s Contract with CoreCivic, Inc., 10-11. 

35 DOJ OIG, Contract Awarded to Midwest Jet Center, 4. 

9 
 

receive a series of non-competitive contracts.36 As we noted in that audit 

report, when such non-competitive contracts are awarded without sufficient 

justification, it risks creating the perception that the contractor received 

inappropriate or otherwise unfair preferential treatment. Moreover, contracts 

awarded non-competitively present a greater risk that the Department is not 

receiving the contracted services at the lowest cost. Therefore, it is imperative 

that justifications for non-competitive contracts are sound and properly 

documented, both as a matter of compliance and to ensure that noncompetitive contracts are properly awarded. 

Avoiding Personal Services Contracts 

In addition, the FAR states that contracts shall not be used for the 

performance of inherently governmental functions and prohibits agencies from 

awarding personal services contracts without statutory authority.37 These 

provisions are designed to protect the integrity of certain governmental 

activities that require either the exercise of discretion in applying government 

authority or making decisions for the government. A personal services contract 

is defined as a contract that, by its express terms or as administered, makes 

the contractor personnel appear to be, in effect, government employees.38 

Unless specifically authorized by Congress, obtaining personal services by 

contract circumvents the civil service laws, which normally require that the 

government obtain its employees by direct hire under competitive appointment 

or other authorized procedures.39 A key inquiry to assess whether a contract is 

personal in nature is whether the government is exercising relatively 

continuous supervision and control over the contractor personnel.40 

Our audits have revealed that current practices in the Department are 

potentially placing some contractor employees in a personal services role. For 

example, at the DEA, we found that some contract personnel were embedded 

on drug investigation teams and performed duties that were deeply integrated 

into the DEA’s mission essential functions.41 We were concerned that those 

workers were at risk of inappropriately performing inherently governmental 

functions that should be performed by DEA personnel and that their work 

demonstrated several characteristics of a personal services contract. At the 

DEA, we recommended that employees receive regular training regarding how 

36 DOJ OIG, Audit of the Department of Justice's Administration of the September 11th 

Victim Compensation Fund, Audit Report 17-32 (August 2017), 25. 

37 FAR Subpart 7.503(a), Inherently Governmental Functions, Policy; FAR 

Subpart 37.104(b), Service Contracting, Personal services contracts. 

38 FAR Subpart 2.1, Definitions. 

39 FAR Subpart 37.104(a), Service Contracting, Personal services contracts. 

40 FAR Subpart 37.104(c)(2), Service Contracting, Personal services contracts. 

41 DOJ OIG, Task Orders Awarded to Maximus, Inc., 13-14. 

10 
 

to best manage contract personnel to avoid personal services.42 The concerns 

we raised also have potential implication outside of the DEA, as the contracts 

the DEA used, and is using, for these services are available for use by all Asset 

Forfeiture Program participants and are Government-wide Acquisition 

Contracts. 

Similarly, in an audit of JMD’s task orders awarded to CACI, Inc. (CACI), 

we found that CACI’s legal support staff received assignments directly from 

government employees, such as Assistant U.S. Attorneys, rather than from the 

CACI Project Manager. This arrangement risked the appearance that CACI 

employees were placed in a personal services role, which is contrary to the 

terms of the contract and exceeds the Department’s statutory authority for that 

contract.43 We recommended that JMD develop consistent procedures for 

monitoring contractor’s activities and develop and implement policies that 

define which activities should be completed by the various levels of government 

personnel to ensure that the limits of authority are understood by government 

and contractor personnel. 

The concerns motivating these OIG recommendations about personal 

services apply Department-wide. We therefore recommend that the 

Department ensure that all components update their contractor-related 

monitoring policies and provide regular training to government contracting 

employees on how to maintain appropriate, FAR-compliant relationships with 

contractor personnel. 

Purchasing from Required Sources 

The FAR also includes a specific provision that identifies required 

sources to be used for the procurement of certain supplies and services.44 For 

example, coal, natural gas, petroleum fuels, and certain petroleum products 

must be procured using a Defense Logistics Agency (DLA) contract.45 

Nevertheless, in an audit of FBI fuel procurement contracts, we found that 

while the FBI was aware of this requirement, it chose not to use a DLA contract 

to procure bulk fuel to meet its needs.46 In addition to being required by the 

FAR, using a DLA contract for fuel provides numerous benefits to the 

42 DOJ OIG, Task Orders Awarded to Maximus, Inc., 17. 

43 DOJ OIG, Audit of the Justice Management Division Task Orders Awarded to CACI, 

Inc., Commercial, Audit Report 19-01 (October 2018). 

44 FAR Part 8, Required Sources of Supplies and Services. 

45 See FAR Subpart 8.002(a)(1)(v), Required Sources of Supplies and Services, Priorities 

for use of mandatory Government sources (citing 41 C.F.R. § 101-26.6). 

46 DOJ OIG, Audit of the Federal Bureau of Investigation’s Fuel Procurement Contracts 

Awarded to the Petroleum Traders Corporation, Audit Report 16-25 (September 2016). 

11 
 

 

 

 

 

government because it combines federal agencies’ needs that, in turn, generate 

more vendor interest, greater competition, and better prices. 

Finally, the FAR identifies policies and procedures implementing the 

provisions of other laws and statues that must be followed depending on the 

specific type of contract used or type of supplies or services procured. One of 

these laws is the Service Contract Labor Standards (SCLS), which, among other 

requirements, provides that service contracts over $2,500 contain mandatory 

provisions regarding minimum wages and fringe benefits.47 Contracts where 

the SCLS is applicable must include a Department of Labor (DOL) Wage 

Determination, which identifies specific wage and fringe benefit rates for 

workers under the contract. We have completed audits in which we found that 

contractors were not meeting their obligations under the SCLS, or may have 

been improperly classifying employees as independent contractors and thus 

avoiding their obligations under the SCLS. Department contracting officials 

had not previously identified these instances of noncompliance.48 

Further, the DOL periodically makes updates to reflect changes in the 

wage and fringe benefit rates and contractors can subsequently receive price 

adjustments from the Department to account for these changes.49 The FAR 

requires that the price adjustment must be the result of increased costs caused 

by a contractor’s compliance with a revised DOL Wage Determination and not 

due to other factors.50 Our audits have revealed multiple instances where 

contractors received price adjustments that were not warranted or exceeded 

the allowable increases for wages or fringe benefits based on DOL revisions.51 

For example, a USMS detention center contract included operating a 

commissary, but the commissary workers’ salaries and benefits were not priced 

into the contract’s monthly operating price and the contractor was not eligible 

to request price adjustments for those positions pursuant to the SCLS.52 

47 FAR Subpart 22.1002-1, Service Contract Labor Standards, Statutory and Executive 

order requirements, General. 

48 DOJ OIG, Contract Awarded to Conduit Language Specialists, Inc., 36; DOJ OIG, 

Task Orders Awarded to Maximus, Inc., 25. 

49 FAR Part 52.222-43, Fair Labor Standards Act and Service Contract Labor Standards 

– Price Adjustment. 

50 FAR Part 52.222-43, Fair Labor Standards Act and Service Contract Labor Standards 

– Price Adjustment. 

51 DOJ OIG, Audit of the Federal Bureau of Prisons Contract No. DJB1PC007 Awarded to 

Reeves County, Texas to Operate the Reeves County Detention Center I/II Pecos, Texas, Audit 

Report 15-15 (April 2015); DOJ OIG, Audit of the Federal Bureau of Prison’s Contract with 

CoreCivic, Inc., to Operate the Adams County Correctional Center in Natchez, Mississippi, Audit 

Report 17-08 (December 2016); DOJ OIG, Contract Awarded to Spectrum Services Group; DOJ 

OIG, United States Marshals Service’s Contract with CoreCivic, Inc.; DOJ OIG, Contract Awarded 

to Conduit Language Specialists, Inc. 

52 DOJ OIG, United States Marshals Service’s Contract with CoreCivic, Inc., 65-66. 

12 
 

However, we found the contractor had been incorrectly requesting price 

adjustments for the commissary worker positions and USMS approved these 

unallowable price adjustments and increased the contract’s monthly operating 

price.53 

In another contract audit report, we noted that the Department did not 

have guidance for components with responsibility for SCLS contracting 

activities.54 Although in 2018 JMD issued Acquisition Policy Notice 2018-03 to 

address this issue, we believe that further efforts should be made to ensure 

Department-wide compliance. 

As noted above, our contract audit work continues to identify many 

concerns with compliance with FAR requirements, contract administration, 

and contractor performance. We believe it is critical that Department 

personnel understand the FAR’s requirements and follow them in order to 

ensure supplies and services are procured properly, and that federal 

contracting dollars are allocated in a cost-efficient manner. 

Conclusion and Recommendations 

We are providing this information so that the Department can assess the 

sustained, repeated, and systemic nature of our contract audit-related findings 

and devise approaches to address the root causes that have led to them. To 

this end, we specifically recommend that the Department: 

(1) implement a Department-wide policy to ensure that all Task Monitors 

are required to complete at least FAC-COR Level I training prior to 

being designated a Task Monitor in accordance with OMB guidance; 

(2) develop policy or implement procedures to ensure that contractor 

performance evaluations are completed, accurate, and entered into 

CPARS in a timely manner; 

(3) ensure all components update their contractor-related monitoring 

policies and provide regular training to government contracting 

employees on how to maintain appropriate, FAR-compliant 

relationships with contractor personnel; and 

(4) consider including contract management in its enterprise-level risk 

management prioritization. 

53 We brought this finding to the USMS’s attention during the audit and the USMS 

issued a contract modification to the contractor to recover unallowable price adjustments and 

modified the monthly operating price to reflect the proper monthly price. 

54 DOJ OIG, Contract Awarded to Conduit Language Specialists, Inc., 47. 

13 
JMD provided a response to the draft advisory memorandum, which can 

be found in Attachment 1. Our analysis of that response is included in 

Attachment 2. 

If you have any questions regarding the information in this 

memorandum, please contact me at (202) 514-3435 or Jason R. Malmstrom, 

Assistant Inspector General for Audit, at (202) 616-4633. 

cc: Louise Duhamel 

Acting Assistant Director 

Audit Liaison Group 

Internal Review and Evaluation Office 

Justice Management Division 

Bradley Weinsheimer 

Associate Deputy Attorney General 

Jarad Hodes 

Senior Counsel to the 

Deputy Attorney General 

14 
ATTACHMENT 1 

JUSTICE MANAGEMENT DIVISION’S RESPONSE TO THE DRAFT 

MANAGEMENT ADVISORY MEMORANDUM 

15 

Department of Justice 

Justice Management Division 

Wa.s/,ing.1011, D.C. ZOSJQ 

June 15, 2020 

MEMORANDUM TO: Michael E. Horowitz 

Inspector General 

United States Department of Justice 

FROM Michael H. Allen MICHAEL 0 191telly $9)ed by 

MICHAEL Al.LEN 

Deputy Assistant Attorney General ,md ALLEN 081• 2020 oe 1s 

1$2944 -oA'OO' 

Senior Procurement Executive 

Justice lvlanagement Division 

SUBJECT: Response to the Office of the Inspector General's Draft 

Management Advisory Memorandum, Notification of Concerns 

Identified in the Department o.f Justice's Administration and 

Oversight o[Contracts 

This memorandum provides a response to the Office of the Inspector General's (OIG) May 11, 

2020, draft Manag,m1ent Advisory Memorandum (MAM) entitled, a Notification o.f Concerns 

Identified in the Depart111ent of Justice's Ad111inistration and Oversight of Contracts. 1l1e Justice 

Management Division appreciates the opportunity to review and comment on the draft 

Management Advisory Memorandum. 

ll1e OIG's MAi'vl identified the following contracting matters: ( I) inadequate execution of 

contract oversight responsibilities, (2) insufficient quality assurance practices, and (3) noncompliance with contracting-re lated laws and regulations. Tl1e specific recommendations and our 

response follows. 

(1) hnplement a Depa11ment-wide policy to ensure that all Task Monitol's are 

r·eqaired to complete at least FAC-COR Level I trainb1g priol' to being 

designated a Task Monitor in acconlance with 0MB guidance; 

On January 16, 2018, the Department issued DOJ Policy Instruction 1301.03.01, 

Federal Acquisition Certification for Conh·acting Officer's Representatives. 111is 

policy guidance was established after the c ited audits were perfonued and fonnally 

repo11ed. Technical or Task Monitors are specifically addressed as part of the 

polic ies and procedures under the Department's Federal Acquisition Certification for 

Contracting Officer's Representatives (FAC-COR) Program. The requirement for 

active FAC-COR certifications for Teclmical or Task Monitors is detailed in Section 

VIII entitled, "1 omination and Appointment" as follows: 
e Honorable Michael E Horowitz 2 

"Contracting officers may appoiJ1t an individual to act as an 

authorized representative in monitoring and administering a contract if 

the iJ1dividual holds an active FAC-COR Certification at a level 

appropriate for the contract ... This Delegation of Authorit y also 

applies to Teclu1ical or Task 1\fonitors, and others who ensure proper 

development of requirements and assist the CO and/or CORs in 

managing assigned contracts." 

(2) Develop policy or implement procedures to cnsm·c that contractor pet·fonnance 

evaluations iu·e completed, accumte, and ente,·ed into CPARS in a timely 

manner; 

DOJ is developiJ1g a comprehensive Policy Instruction related to acquisition 

reporting and admiJ1istration, which iJ1cludes discussion of timely and accurate past 

perfonnance evaluations. 1l1e Policy lnstrnction will also provide infonnation and 

resources to ensure acquisition workforce members understand the methods and 

responsibilities for proper and prompt reporting of contractor perfonnance 

infonnation. DOJ also keeps current with developments regarding improved 

reporting procedures, capabilities and iJmovations through participation on the Chief 

Acquisition Officers (CAO) Council. 

(3) Ensure all components update their cont.mcto,·-related monitoring policies and 

p1-o,•ide regular tmining to government contracting employees on how to 

maintain app1·opriate, FAR-compliant 1'CL-ltionships with contractor pe,-sonnel; 

and 

DOJ Policy lnstmction 1301.03.01 mandates that appointment memorandums for 

component Contracting Officer's Representatives (CORs) include detailed duties, 

responsibilities, and obligations for managing the assigned contract and contractor 

staff based on the contract's tenns and conditions. In particular, the Policy 

lnstrnction requires that each COR appointment memorandum issued by the 

component include monitoring and surveillance, inspection and acceptance, invoices 

and payments, and evaluating perfonnance. Once published, components were 

expected to update all component-level policy to adhere to the DOJ Policy 

Instruction. 

In addition to the requirements detailed in DOJ Policy Instruction 1301.03.01 , 

components are required to report on their ongoing training efforts as part of tl1e 

Department's Acquisition Human Capital Plan (AHCP), which is submitted to the 

Office of Management and Budget mmually. For the FY 2019 AHCP, many 

components reported developing and admiJ1istering FAR-based component-specific 

training to manage and strengthen the acquisition workforce's contract management 

and oversight practices. 

16 
11 1e Honorable Michael E Horowitz 3 

(4) Consider includmg contmct m:magement in its enterprise-level risk 

management p1·io1i tization. 

1l1e JMD lntemal Review and Evaluation Office submitted "Contract Oversight and 

Management" as an item for consideration in the Department's Risk Profile. 1l1is 

risk will be reviewed as part of the Enterprise Risk Management (ER!vl) Program 

managed by the Strategic Planning and Perfonnance Staff, working with the 

Department's ERM Working Group. As part of the process, all proposed risks will 

be considered for inclusion in the Department's Risk Profile using the Department's 

methodology: I) Articulate Strategies; 2) Identify and Prioritize; 3) Assess and 

Mitigate; and 4) Monitor and Report. 

·niank you for the opportunity to respond to this draft Management Advisory Memorandum, and 

for your continued collaboration lo improve the administration of Departmental programs. If 

you have any questions regarding this response, please contact Louise Duhmnel, Acting 

Assistant Director, Audit Liaison Group, lntemal Review and Evaluation Office, Justice 

Management Division, al (202) 514-4006 or me al 202-514-3101. 

cc: Louise M. Duhmnel 

Aeling Assistant Director 

Audit Liaison Group 

Internal Review and Evaluation Office 

Justice Mm1agement Division 

Neil Ryder 

Director 

Internal Review and Evaluation Office 

Justice Mmiagemenl Division 

Tara Jamison 

Assistant Director 

Office of Acquisition Management 

Internal Review and Evaluation Office 

Justice Mmiagement Division 

Robin Funston 

Director 

Strategic Planning and Perfonnance Staff 

Justice Mm1agemenl Division 

Jason R. Malmstrom 

Assistm1t Inspector General for Audit 

Office of the Inspector General 

United States Department of Justice 

17 
ll 1e Honorable Michael E Horowitz 4 

Ashley Hines 

Audit Liaison Group 

Internal Review and Evaluation Office 

Justice Management Division 

18 
ATTACHMENT 2 

OFFICE OF THE INSPECTOR GENERAL 

ANALYSIS AND SUMMARY OF ACTIONS 

NECESSARY TO CLOSE THE RECOMMENDATIONS 

The OIG provided a draft of this advisory memorandum to JMD. JMD’s 

response is incorporated in Attachment 1 of this final memorandum. JMD 

agreed with our recommendations and stated the actions it has taken in 

response to previous OIG recommendations, or that it will implement in 

response to our concerns. As a result, the recommendations are resolved. The 

following discussion provides the OIG analysis of the response and summary of 

actions necessary to close the recommendations. 

Recommendation for JMD: 

1. Implement a Department-wide policy to ensure that all Task 

Monitors are required to complete at least FAC-COR Level I training 

prior to being designated a Task Monitor in accordance with OMB 

guidance. 

Resolved. JMD agreed with our recommendation. JMD stated in its 

response that it issued DOJ Policy Instruction 1301.03.01, Federal 

Acquisition Certification for Contracting Officer’s Representatives, on 

January 16, 2018. The policy establishes the requirement that Technical 

or Task Monitors hold an active FAC-COR certification at a level 

appropriate for the contract. The Delegation of Authority also applies to 

“others who ensure proper development of requirements and assist the 

Contracting Officer and/or Contracting Officer’s Representatives (COR) in 

managing assigned contracts.” 

This recommendation can be closed when JMD provides evidence that it 

has distributed DOJ Policy Instruction 1301.03.01 to DOJ components. 

2. Develop policy or implement procedures to ensure that contractor 

performance evaluations are completed, accurate, and entered into 

CPARS in a timely manner. 

Resolved. JMD agreed with our recommendation. JMD stated in its 

response that it is developing a comprehensive Policy Instruction related 

to acquisition reporting and administration, which includes discussion of 

timely and accurate past performance evaluations. JMD also stated the 

Policy Instruction will provide information and resources to ensure 

acquisition workforce members understand the methods and 

responsibilities for proper and prompt reporting of contractor 

performance information. 

19 
This recommendation can be closed when we receive a copy of the final 

Policy Instruction and evidence that it has been distributed to DOJ 

components. 

3. Ensure all components update their contractor-related monitoring 

policies and provide regular training to government contracting 

employees on how to maintain appropriate, FAR-compliant 

relationships with contractor personnel. 

Resolved. JMD agreed with our recommendation. JMD stated in its 

response that DOJ Policy Instruction 1301.03.01 mandates that 

appointment memorandums for component CORs include detailed 

duties, responsibilities, and obligations for managing the assigned 

contract and contractor staff based on the contract’s terms and 

conditions. The DOJ Policy Instruction specifically requires that each 

memorandum include monitoring and surveillance, inspection and 

acceptance, invoices and payments, and evaluating performance. After 

publication, DOJ components were expected to update all componentlevel policy to adhere to the DOJ Policy Instruction. 

According to JMD, components are also required to report on their 

ongoing training efforts as part of the Department’s Acquisition Human 

Capital Plan (AHCP), which is submitted to the Office of Management and 

Budget annually. For the Department’s fiscal year 2019 AHCP 

submission, many components reported developing and administering 

FAR-based component-specific training to manage and strengthen the 

acquisition workforce’s contract management and oversight practices. 

This recommendation can be closed when we receive evidence that all 

DOJ components have updated contractor-related monitoring policies 

and are providing regular training to government contracting employees 

on how to maintain appropriate, FAR-compliant relationships with 

contractor personnel. 

4. Consider including contract management in its enterprise-level risk 

management prioritization. 

Resolved. JMD agreed with our recommendation. JMD stated in its 

response that the JMD Internal Review and Evaluation Office submitted 

“Contract Oversight and Management” as an item for consideration in 

the Department’s Risk Profile. This risk will be reviewed as part of the 

Enterprise Risk Management (ERM) Program managed by the Strategic 

Planning and Performance Staff, working with the Department’s ERM 

Working Group. As part of the process, all proposed risks will be 

considered for inclusion in the Department’s Risk Profile using the 

20 
Department’s methodology: 1) Articulate Strategies; 2) Identify and 

Prioritize; 3) Assess and Mitigate; and 4) Monitor and Report. 

This recommendation can be closed when we receive evidence 

documenting that during the Department’s Risk Profile reviews, risks 

associated with contract oversight and management are considered for 

inclusion in the ERM Program. 

21 
 

The Department of Justice Office of the Inspector General (DOJ OIG) is a 

statutorily created independent entity whose mission is to detect and deter 

waste, fraud, abuse, and misconduct in the Department of Justice, and to 

promote economy and efficiency in the Department’s operations. 

To report allegations of waste, fraud, abuse, or misconduct regarding DOJ 

programs, employees, contractors, grants, or contracts please visit or call the 

DOJ OIG Hotline at oig.justice.gov/hotline or (800) 869-4499. 

U.S. DEPARTMENT OF JUSTICE OFFICE OF THE INSPECTOR GENERAL 

950 Pennsylvania Avenue, NW 

Washington, DC 20530-0001 

Website Twitter YouTube

oig.justice.gov @JusticeOIG JusticeOIG 

Also at Oversight.gov