a

GAO

United States Government Accountability Office

Report to Congressional Requesters

February 2006 FEDERAL BUREAU 

OF INVESTIGATION

Weak Controls over 

Trilogy Project Led to 

Payment of 

Questionable 

Contractor Costs and 

Missing Assets

GAO-06-306
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

February 2006

FEDERAL BUREAU OF INVESTIGATION

Weak Controls over Trilogy Project Led to 

Payment of Questionable Contractor 

Costs and Missing Assets 

Highlights of GAO-06-306, a report to 

congressional requesters 

The Trilogy project—initiated in 

2001—is the Federal Bureau of

Investigation’s (FBI) largest 

information technology (IT)

upgrade to date. While ultimately 

successful in providing updated IT 

infrastructure and systems, Trilogy

was not a success with regard to

upgrading FBI’s investigative 

applications. Further, the project 

was plagued with missed 

milestones and escalating costs, 

which eventually totaled nearly

$537 million. In light of these

events, Congress asked GAO to 

determine whether (1) internal

controls provided reasonable

assurance that improper payment

of unallowable contractor costs 

would not be made or would be

detected in the normal course of

business, (2) payments to 

contractors were properly 

supported as a valid use of

government funds, and (3) FBI 

maintained proper accountability 

for assets purchased with Trilogy

project funds. 

What GAO Recommends

GAO makes 27 recommendations 

to help improve (1) FBI’s and 

GSA’s controls over their invoice 

review and approval processes and

to address questionable billing

issues, and (2) FBI’s accountability

for assets. FBI concurred with our 

recommendations. While GSA 

accepted our recommendations, it 

did not believe that 1 of them was 

needed and expressed concern 

with some of our findings. GAO 

reaffirms its position on all of its

findings and recommendations.

FBI’s review and approval process for Trilogy contractor invoices, which 

included a review role for the General Services Administration (GSA) as 

contracting agency, did not provide an adequate basis to verify that goods 

and services billed were actually received and that the amounts billed were 

appropriate, leaving FBI highly vulnerable to payments of unallowable costs. 

This vulnerability is demonstrated by FBI’s payment of about $10.1 million in 

questionable contractor costs we identified using data mining, document 

analysis, and other forensic auditing techniques. These costs included firstclass travel and other excessive airfare costs, incorrect charges for overtime

hours, potentially overcharged labor rates, and charges for which the 

contractors could not provide adequate supporting documentation to 

substantiate the costs purportedly incurred. 

FBI also failed to establish controls to maintain accountability over 

equipment purchased for the Trilogy project. These control lapses resulted 

in more than 1,200 missing pieces of equipment valued at approximately 

$7.6 million that GAO identified as part of its review. In addition, in its own 

inventory counts, FBI identified 37 pieces of Trilogy equipment valued at 

approximately $167,000 that had been lost or stolen. The table below 

summarizes questionable contractor costs and missing assets that GAO 

identified. 

Questionable Costs and Missing Assets 

Issues identified

Amount

(in thousands)

First-class travel $20.0

Excessive air travel costs 49.8

Excess overtime charges 400.0

Potential overcharging of labor rates 2,100.0

Inadequately supported subcontractor labor costs 1,957.9

Inadequately supported other direct costs 5,508.3

Duplicate payment of subcontractor labor invoice 26.3

Total questionable costs $10,062.3

1,205 pieces of missing equipment $7,607.1

Source: GAO.

Given the poor control environment and the fact that GAO reviewed only 

selected FBI payments to Trilogy contractors, other questionable contractor 

costs may have been paid that have not been identified. If these control 

weaknesses go uncorrected, future contracts, including those related to 

Sentinel—FBI’s new electronic information management system initiative—

will be highly exposed to improper payments. In addition, the lack of 

accountability for Trilogy equipment calls into question FBI’s ability to 

adequately safeguard its existing assets as well as those it may acquire in the 

future. 

www.gao.gov/cgi-bin/getrpt?GAO-06-306.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Linda Calbom 

at (202) 512-9508 or calboml@gao.gov. 
Page i GAO-06-306 FBI Trilogy Payments

Contents

Letter 1

Results in Brief 4

Background 6

Insufficient Invoice Review and Approval Process Increased FBI’s 

Vulnerability to Payment of Unallowable Contractor Costs 10

Some Payments Made to Contractors Were for Questionable 

Costs 21

Major Lapses in Accountability Resulted in Millions of Dollars of 

Missing Trilogy Equipment 31

Conclusions 41

Recommendations for Executive Action 42

Agency Comments and Our Evaluation 46

Appendixes

Appendix I: Key Trilogy Milestones 52

Appendix II: Scope and Methodology 53

Validity of Payments 53

FBI’s Asset Accountability 56

Appendix III: Comments from the Federal Bureau of Investigation 59

Appendix IV: Comments from the General Services Administration 62

Appendix V: GAO Contacts and Staff Acknowledgments 82

Tables Table 1: Payments for Trilogy by Contractor and Category (in 

millions) 11

Table 2: Examples of CSC’s Potentially Unallowable First-Class 

Travel 22

Table 3: Examples of Questionable Excessive Airfare Travel 

Costs 24

Table 4: Other Questionable Costs Paid by FBI 29

Table 5: Analysis of Time Taken by FBI to Enter CSC-Purchased 

Assets into PMA 34

Table 6: Trilogy-Purchased Items Not Located by FBI 39

Figures Figure 1: Invoice Review and Approval Process 12

Figure 2: CSC E-mail Approval of Subcontractor ODC Charge 16

Figure 3: Example of CSC ODC Invoice 19

Figure 4: Key Trilogy Milestones 52
Contents

Page ii GAO-06-306 FBI Trilogy Payments

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately.

Abbreviations

BOM bill of material

CACI CACI Inc. - Federal

CSC Computer Sciences Corporation

DCAA Defense Contract Audit Agency

DOI Department of the Interior

DOJ Department of Justice

DynIS DynCorp Information Systems

EWW extended work week

FAR Federal Acquisition Regulation

FBI Federal Bureau of Investigation

FEDSIM Federal Systems Integration and Management Center

GFE government furnished equipment

GSA General Services Administration

IPC Information Presentation Component

IT information technology

JTR Joint Travel Regulations

ODC other direct costs

OIG Office of Inspector General

PMA Property Management Application

SAIC Science Applications International Corporation

SETA Systems Engineering and Technical Assistance

TNC Transportation Network Component

UAC User Application Component

VCF Virtual Case File
Page 1 GAO-06-306 FBI Trilogy Payments

United States Government Accountability Office

Washington, D.C. 20548

A

February 28, 2006 Letr

The Honorable Arlen Specter

Chairman

The Honorable Patrick J. Leahy

Ranking Minority Member

Committee on the Judiciary

United States Senate

The Honorable Richard J. Durbin

United States Senate

The Honorable Charles E. Grassley

United States Senate

The Honorable Orrin G. Hatch

United States Senate

For several years Congress recognized that the Federal Bureau of 

Investigation’s (FBI) information technology (IT) systems were archaic and 

inadequate for efficiently and effectively investigating criminal cases. FBI 

recognized the need to modernize its IT systems before the September 11, 

2001, terrorist attacks, but those events underscored FBI’s need to improve 

its ability to effectively retrieve, analyze, and share investigative 

information necessary to carry out its mission. Initiated in mid-2001, 

Trilogy—FBI’s largest IT upgrade to date—was intended to modernize 

FBI’s IT infrastructure and systems and provide needed applications to 

help FBI agents, analysts, and others do their jobs. 

The Trilogy project consisted of two primary efforts: an IT infrastructure 

update and an upgrade of FBI’s investigative applications. While ultimately 

successful in providing the infrastructure update, the project was not a 

success with regard to upgrading the investigative applications. Further, 

the project experienced numerous schedule delays and cost increases.1

Project costs, which were originally estimated at approximately $380 

million, eventually escalated to approximately $537 million. Although the 

scheduled completion date for the overall Trilogy project was June 2004, 

after September 11, 2001, FBI required an accelerated deployment plan and 

moved up the expected completion dates. The completion date for the 

1

 See appendix I for a timeline of significant milestones related to the Trilogy project.
Page 2 GAO-06-306 FBI Trilogy Payments

portion of Trilogy related to upgrading FBI’s IT infrastructure was 

accelerated from May 2004 to July 2002. After several delays, the upgrade 

was completed in April 2004, a month before the original due date. While 

the overall scheduled completion date for the investigative application 

upgrades, which became known as the Virtual Case File (VCF), was 

originally June 2004, the due date for the first VCF deliverable was 

accelerated to December 2003. However, in July 2004 the VCF portion of 

the Trilogy project was scaled back after the completion of the project was 

determined to be infeasible and cost prohibitive as originally envisioned. 

The Department of Justice (DOJ) Office of Inspector General (OIG) has 

reported numerous issues that contributed to the cost increases and 

delays, including poorly defined and slowly evolving design requirements, 

contracting weaknesses, unrealistic task scheduling, and lack of 

management continuity and oversight for tracking and overseeing costs 

effectively.2

 GAO also reported on weaknesses in FBI’s IT systems 

development and management capabilities, including contractor oversight.3 

Because of these issues, you asked us to audit the costs of the Trilogy 

project, the majority of which represented the purchase of goods and 

services from contractors. Our objectives were to determine whether 

(1) FBI’s internal controls provided reasonable assurance that payment of 

unallowable contractor costs would not be made or would be detected in 

the normal course of business,4

 (2) FBI’s payments to contractors were 

properly supported as a valid use of government funds, and (3) FBI 

maintained proper accountability for assets purchased with Trilogy project 

funds. 

2

 Department of Justice, Office of the Inspector General, The Federal Bureau of 

Investigation’s Management of the Trilogy Information Technology Modernization 

Project, Report No. 05-07 (Washington, D.C.: February 2005).

3

 GAO, Information Technology: FBI Is Building Management Capabilities Essential to 

Successful Systems Deployments, but Challenges Remain, GAO-05-1014T (Washington, 

D.C.: Sept. 14, 2005).

4

 For the purpose of this report, unallowable costs are contractor costs that are not allowed 

under a term or condition of the contract or pursuant to applicable regulations. 
Page 3 GAO-06-306 FBI Trilogy Payments

To address these objectives, we used various internal control standards and 

guidance5

 as a basis to assess FBI’s internal controls over the payments 

made with Trilogy funds. We also reviewed FBI policy and procedure 

manuals; applicable federal regulations, including the Federal Acquisition 

Regulation (FAR),6 Federal Travel Regulation,

7

 and Joint Travel 

Regulations (JTR);8 prior GAO and DOJ OIG reports on Trilogy issues; 

Trilogy contract documents and interagency agreements; contractor 

invoices; and other documentation supporting goods provided and services 

rendered. We performed data mining and forensic auditing techniques to 

select transactions to determine whether payments to contractors were 

properly supported as a valid use of government funds. We tested 

accountable property to determine whether assets were entered in FBI’s 

property system and conducted a physical observation of selected assets to 

validate their existence. In addition, we conducted interviews with officials 

from FBI, General Services Administration’s (GSA) Federal Systems 

Integration and Management Center (FEDSIM), Department of the Interior 

(DOI), and Trilogy contractors. We also performed walkthroughs to gain an 

understanding of the processes used to review and approve invoices and 

account for property. While we identified some payments for questionable 

contractor costs,9

 our work was not designed to identify all questionable 

payments or to estimate their extent.

We provided FBI a draft of this report and GSA a draft of applicable 

sections of this report for review and comment. FBI and GSA provided 

written comments, which are reprinted in appendixes III and IV, 

respectively. FBI and GSA also provided technical comments, which we 

5

 GAO, Internal Control: Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). GAO, Guide for Evaluating and 

Testing Controls Over Sensitive Payments, GAO/AFMD-8.1.2 (Washington, D.C.: May 1993). 

GAO, Strategies to Manage Improper Payments: Learning From Public and Private Sector 

Organizations, GAO-02-69G (Washington, D.C.: October 2001).

6

 48 C.F.R. chp.1.

7

 41 C.F.R. subtitle F.

8

 Department of Defense Civilian Personnel Joint Travel Regulations.

9

 Questionable costs include payments of amounts that we determined to be potentially 

unallowable; lack the support necessary to determine whether they are allowable under 

applicable laws, regulations, and the terms and conditions of the contract; or for which 

there is a disagreement between the parties as to whether the payment is allowable under 

applicable laws, regulations, and the terms and conditions of the contract.
Page 4 GAO-06-306 FBI Trilogy Payments

have incorporated as appropriate. We also discussed with Trilogy 

contractors any findings that related to them. We performed our work in 

accordance with generally accepted government auditing standards in 

Washington D.C. and at two FBI field sites and various other GSA and 

contractor locations in Virginia from May 2004 through December 2005. 

Our scope and methodology are discussed in greater detail in appendix II.

Results in Brief FBI’s internal controls did not provide reasonable assurance that payments 

to contractors for unallowable costs would not be made or would be 

detected in the normal course of business. Our review found that FBI’s 

review and approval process for Trilogy contractor invoices, which 

included GSA’s review in its role as contracting agency, did not provide an 

adequate basis to verify that goods and services billed were actually 

received by FBI or that the amounts billed were appropriate. This occurred 

in part because responsibility for the review and approval of invoices was 

not clearly defined in the contracts and interagency agreements related to 

Trilogy project oversight. In addition, certain contactor invoices lacked 

certain detailed information required by the Trilogy task orders and other 

additional information that would be needed to facilitate an adequate 

invoice review process. Despite this, invoices were paid without requests 

for additional supporting documentation necessary to validate the charges. 

These weaknesses made FBI highly vulnerable to payments of unallowable 

and questionable costs with Trilogy funds. Until significant improvements 

are made, these vulnerabilities will continue for future projects where FBI 

uses contractors for the delivery and deployment of goods and services.

We used forensic auditing techniques, including data mining and document 

analysis, to assess the validity of selected payments and identified $10.1 

million of questionable contractor costs paid by FBI. We found instances 

of first-class travel and other excessive airfare costs, incorrect billings for 

overtime hours worked, potential overcharging of labor rates, and other 

questionable costs. For example, one contractor could not provide 

adequate documentation to substantiate about $5.5 million of 

subcontractor charges for other direct costs billed to FBI. Given FBI’s poor 

control environment over invoice payments and the fact that we reviewed 

only selected FBI payments to Trilogy contractors, other questionable 

costs may have been paid for that have not been identified. Further, if these 

weaknesses go uncorrected, future contracts, including those related to 

FBI’s new electronic information management system initiative, referred to 

as Sentinel, will be highly exposed to improper payments.
Page 5 GAO-06-306 FBI Trilogy Payments

FBI did not maintain adequate accountability for all computer equipment 

purchased for the Trilogy project. FBI relied extensively on contractors to 

account for Trilogy assets while they were being purchased, warehoused, 

and installed. However, FBI did not have controls or data to verify the 

accuracy and completeness of the contractor records it ultimately relied on 

and to ensure that it received all the items purchased through its 

contractors. Moreover, once FBI took possession of the Trilogy equipment, 

it did not establish adequate physical control over the assets. FBI failed to 

record accountable assets—equipment with a value of $1,000 or more, or 

deemed by FBI to be susceptible to theft—into its property system in a 

timely manner, did not properly use its bar codes to individually track 

accountable assets, and did not effectively use its inventory process to 

identify all potentially missing assets. These breakdowns in control over 

Trilogy assets created an environment in which equipment could be lost or 

stolen without detection. 

Given the serious nature of these control weaknesses, we performed 

additional test work to determine whether all accountable assets 

purchased with Trilogy funds could be accounted for by FBI. FBI was 

unable to locate over 1,200 of these assets, which we estimate are valued at 

approximately $7.6 million, including items such as computer desktops, 

laptops, printers, and servers. In addition to the items we found missing, as 

a result of its physical inventory procedures, FBI reported 37 pieces of 

contractor-purchased Trilogy equipment valued at about $167,000 that had 

been lost or stolen. Due to the significant weaknesses we identified in 

FBI’s Trilogy property controls, the actual amount of missing or stolen 

equipment could be even higher. Until FBI strengthens its asset 

accountability controls it will remain highly vulnerable to continued loss of 

existing assets, as well as those it may acquire in the future.

We are making 27 recommendations to address the issues identified in this 

report. Regarding FBI’s and GSA’s processes for reviewing and approving 

contractor invoices, we are making 6 recommendations to FBI and 5 to 

GSA to develop or strengthen these types of internal control procedures. 

We are making 4 additional recommendations to GSA in coordination with 

FBI, to take actions to resolve certain of the questionable costs we 

identified. And we are making 12 other recommendations to help FBI 

improve its accountability over existing Trilogy assets and those that will 

be purchased in connection with future projects such as Sentinel. 

In written comments on a draft of this report, FBI stated that it concurred 

with our recommendations and that it has made and continues to make 
Page 6 GAO-06-306 FBI Trilogy Payments

significant structural and procedural changes to address our 

recommendations. FBI also provided additional information related to 

Trilogy assets we identified as missing. In written comments on a draft of 

applicable sections of this report, while GSA stated that it accepted our 

recommendations, it did not believe that 1 of them was needed, and 

described some of the improvements to its internal controls and other 

business process changes already implemented. GSA also expressed 

concern with some of our observations and conclusions related to the 

invoice review and approval process and our analysis of airfare costs. We 

continue to believe that our report is accurate and that all of the 

recommendations should be implemented. Our responses to these 

comments are provided in the Agency Comments and Our Evaluation 

section of this report and in appendix IV, immediately following the 

reprinted GSA comments.

Background Recognizing the need to modernize its IT systems, FBI proposed a major 

technology upgrade plan to Congress in September 2000. FBI’s Information 

Technology Upgrade Project, which FBI subsequently renamed Trilogy, 

was FBI’s largest automated information systems initiative to date. Trilogy 

consisted of three parts: (1) the Information Presentation Component 

(IPC) to upgrade FBI’s computer hardware and software, (2) the 

Transportation Network Component (TNC) to upgrade FBI’s 

communication network, and (3) the User Application Component (UAC) 

to upgrade and consolidate FBI’s five most important investigative 

applications. 

To expedite the contracting process, FBI entered into an interagency 

agreement with GSA to support FBI’s use of the FEDSIM Millennia 

governmentwide acquisition contract10 for the implementation of Trilogy’s 

three functional components, IPC, TNC, and UAC. FEDSIM, serving as 

contracting agency, was to provide all contract administrative services 

necessary to support the task orders. Because the Trilogy project was so 

large, DOJ required FBI to use two contractors for the three Trilogy 

components. FBI combined the IPC and TNC portions of Trilogy into one 

task order because both components involved physical infrastructure 

10 The Millennia Governmentwide Acquisition Contract provides for large system integration 

and development projects through task or delivery orders awarded to Millennia contractors, 

including Computer Sciences Corporation and Science Applications International 

Corporation.
Page 7 GAO-06-306 FBI Trilogy Payments

enhancements. IPC provided for new desktop computers, servers, and 

commercial-off-the-shelf automation software, including Web-browser and 

e-mail to enhance usability by the agents. TNC upgraded the complete 

communication infrastructure, including high-capacity wide-area and localarea networks, authorization security, and encryption of data transmission 

and storage. The IPC/TNC task order was awarded in May 2001 to DynCorp 

(now Computer Sciences Corporation (CSC)).11 The IPC/TNC upgrades 

would provide the physical infrastructure needed to run the applications 

developed under UAC, the third Trilogy component. 

The third component of Trilogy—the UAC task order—was awarded in 

June 2001 to Science Applications International Corporation (SAIC). The 

goal of UAC was to replace FBI’s paper case files with electronic files and 

improve efficiency. The heart of the UAC portion became the development 

of the VCF system to replace the obsolete Automated Case Support system, 

FBI’s primary investigative application that uploads and stores case files 

electronically. 

The above two Trilogy contracts12 were awarded on a cost-plus-award fee 

basis for labor charges, meaning that the contractor’s costs incurred are 

reimbursed and fees13 may be awarded to the contractor based on 

performance. The FAR states that cost-reimbursement type contracts may 

only be used if appropriate government surveillance during performance 

will provide reasonable assurance that efficient methods and effective cost 

controls are used. The aspects of these contracts related to the purchase of 

equipment were based on fixed-price arrangements, meaning that a set 

price for the equipment is agreed to up front. 

In addition to the two primary contracts discussed above, FBI awarded two 

additional contracts to assist with the technical oversight, monitoring, and 

integration of the two primary Trilogy contracts described above. The first 

of the two additional contracts was awarded in February 2001, also through 

GSA FEDSIM, to Mitretek for Systems Engineering and Technical 

11 In March 2003, DynCorp was acquired by CSC.

12 For purposes of this report, the task orders awarded under the Millennia contract will be 

referred to as “contracts.”

13 Award fees consist of money that is added to a contract and that a contractor may earn in 

whole or in part during performance and that is sufficient to provide motivation for 

excellence in the areas such as quality, schedule, technical performance, and cost 

management.
Page 8 GAO-06-306 FBI Trilogy Payments

Assistance (SETA) services.14 Under the SETA contract, Mitretek was 

required to assist FBI with a wide array of tasks, including program and 

contract management, fiscal and budgetary oversight, cost estimating, and 

several other technical aspects of the Trilogy project. The second of the 

two additional contracts was awarded to SAIC for the integration15 of the 

three Trilogy components.16 

In July 2004, the VCF was scaled back to the Initial Operating Capability 

and the remaining deliverables were cancelled after the (1) initial 

deliverable was rejected by FBI and (2) VCF was determined to be 

infeasible and cost prohibitive to implement as originally envisioned. After 

a 90-day limited pilot that ended in March 2005, VCF offline and the pilot 

results were then to be analyzed by FBI for requirements development of 

its new electronic information management system initiative. In August 

2005, FBI released a solicitation for proposals to develop FBI’s new 

electronic information management system, referred to as Sentinel. The 

solicitation was sent to more than 40 eligible companies under a National 

Institutes of Health governmentwide acquisition contract. Similar to VCF, 

the goal of Sentinel is to replace FBI’s legacy case management capabilities 

with an integrated, paperless file management and workflow system.

FBI’s Asset Accountability 

Procedures

According to FBI policy, assets valued at $1,000 or more, as well as certain 

sensitive items, such as firearms, laptop computers, and central processing 

units, are considered to be “accountable” assets, regardless of cost, and 

must be accounted for individually in FBI’s Property Management 

Application (PMA). PMA is an automated management system that allows 

FBI to track the cost, location, and history of its accountable assets. PMA 

includes a variety of data fields to identify each item, including the 

acquisition date, received date, acquisition cost, last inventory date, bar 

14 In July 2002, the FBI/GSA FEDSIM reimbursement agreement related to support for the 

Mitretek contract ended and the FBI entered into a similar agreement with DOI to support 

the Mitretek SETA contract.

15 A project integrator provides the overall planning and coordination during the 

implementation of a new system. The tasks an integrator performs include the defining of 

requirements for system implementation, scheduling, and ensuring that testing is 

performed. 

16 DOJ initially required the FBI to perform the project integration function; however, the 

FBI did not have sufficient project integration expertise. The FBI made a $20 million 

reprogramming request and SAIC was brought on as integrator in October 2003. 
Page 9 GAO-06-306 FBI Trilogy Payments

code number, serial number, cost center for the office where the item is 

located, description of the item, and other information.

Ongoing deficiencies in FBI’s management of property have been identified 

by DOJ’s OIG and FBI’s independent financial statement auditor. In August 

2002, the DOJ OIG issued a report that revealed significant problems with 

FBI’s management of laptop computers, including findings that FBI did not 

reconcile its property management data with purchase data from its 

accounting system, did not have an inventory record for accountable assets 

not in PMA that were lost or stolen, and could not verify whether the 

number of items purchased agreed with the number of items recorded in 

PMA.17 Additionally, in September 2004, the DOJ OIG reported on 

weaknesses in FBI’s controls over nonaccountable property at FBI’s 

Baltimore field office after an employee pleaded guilty to the theft and sale 

of FBI photography equipment.18 Annually, since fiscal year 1999, FBI’s 

independent financial statement auditors have identified internal control 

weaknesses in the area of property management. They specifically 

reported that FBI needed to improve its procedures related to the timely 

and accurate recording, reconciling, and reporting of property and 

equipment in PMA.

Internal Control Internal control is a major part of managing any organization. As required 

by 31 U.S.C. 3512(c),(d), commonly referred to as the Federal Managers’ 

Financial Integrity Act of 1982, the Comptroller General issues standards 

for internal control in the federal government.19 These standards provide 

the overall framework for establishing and maintaining internal control and 

for identifying and addressing major performance and management 

challenges and areas at greatest risk of fraud, waste, abuse, and 

mismanagement. According to these standards, internal control comprises 

17 Department of Justice Office of the Inspector General, The Federal Bureau of 

Investigation’s Control Over Weapons and Laptop Computers, Report No. 02-27 

(Washington, D.C.: August 2002).

18 Department of Justice Office of the Inspector General, Controls over Accountable 

Property at the Baltimore Field Division of the Federal Bureau of Investigation, Report 

No. 04-37 (Washington, D.C.: September 2004).

19 GAO, Internal Control: Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). See also, GAO, Policy and 

Procedure Manual For Guidance of Federal Agencies, Title 7, Fiscal Guidance, chps. 6&7 

(Washington, D.C.: May 1993).
Page 10 GAO-06-306 FBI Trilogy Payments

the plans, methods, and procedures used to meet missions, goals, and 

objectives. Internal control is the first line of defense in safeguarding assets 

and preventing and detecting fraud and errors. Internal control, which is 

synonymous with management control, helps government program 

managers achieve desired results through effective stewardship of public 

resources.

Control activities are the policies, procedures, techniques, and mechanisms 

that enforce management’s directives and help ensure that actions are 

taken to address risks. Control activities are an integral part of an entity’s 

planning, implementing, reviewing, and accountability for stewardship of 

government resources and achieving effective results. They include a wide 

range of diverse activities. Some examples of control activities include 

(1) establishing physical controls over vulnerable assets to reduce the risk 

of loss or unauthorized use and periodically counting and comparing such 

assets to control records; (2) ensuring that documentation and records are 

properly managed and maintained and that transactions are appropriately 

documented and readily available for examination; (3) assigning 

accountability for the custody and use of resources and records to help 

reduce the risk of errors, fraud, misuse, or unauthorized alteration; and 

(4) implementing management level reviews at the functional level to 

ensure that appropriate control activities are being employed, such as 

reconciliations of summary information to supporting detail.

Insufficient Invoice 

Review and Approval 

Process Increased 

FBI’s Vulnerability to 

Payment of 

Unallowable 

Contractor Costs

FBI’s review and approval process for Trilogy contractor invoices, which 

was carried out by a review team consisting of officials from FBI, GSA, and 

Mitretek, did not provide an adequate basis to verify that goods and 

services billed were actually received by FBI or that payments were for 

allowable costs. This occurred in part because responsibility for the review 

and approval of invoices was not clearly defined in the Mitretek contract 

and in the interagency agreements related to Trilogy project oversight. In 

addition, contactor invoices frequently lacked detailed information 

required by the contracts and other additional information that would be 

needed to facilitate an adequate invoice review process. Despite this, 

invoices were paid without requests for additional supporting 

documentation necessary to determine the validity of the charges. These 

weaknesses in FBI’s review and approval process made the agency highly 

vulnerable to payment of unallowable or questionable contractor costs. 
Page 11 GAO-06-306 FBI Trilogy Payments

Invoices Were Approved for 

Payment without Validation 

that Goods and Services 

Were Received

While the review and approval process differed for each contractor and 

type of invoice charge, in general the process carried out by the review 

team lacked key procedures to reasonably ensure that goods and services 

billed were actually received by FBI or that the amounts billed and paid 

were for allowable costs. Internal control guidance requires agencies to 

establish controls that reasonably ensure, among other things, that funds, 

property, and other assets are safeguarded against waste, loss, 

unauthorized use, or misappropriation.20

Contractor invoices included costs for labor, including related overhead 

costs; travel; other direct costs (ODC); subcontractor labor; and purchased 

equipment. Table 1 provides a summary of total payments made to Trilogy 

contractors for these categories, as well as total Trilogy costs in each 

category. 

Table 1: Payments for Trilogy by Contractor and Category (in millions)

Source: GAO analysis of contractor invoices, Mitretek Spend Plan, and FBI records. 

a

Subcontractor charges for travel were included in CSC and SAIC travel invoices and are included 

under the travel category. 

b

Subcontractor charges for ODC were included in CSC’s ODC invoices and are included under the 

ODC category. 

c

For CSC, the “other” category represents miscellaneous maintenance charges and $10 million in 

awards and fees. For SAIC, the “other” category represents $5 million in awards and fees. For Mitretek, 

the “other” category represents $1.1 million in fees. We did not assess the propriety of these 

payments.

d

Trilogy costs beyond those billed by contractors primarily related to direct purchases of equipment by 

FBI.

20 Office of Management and Budget, Circular A-123, Management’s Responsibility for 

Internal Control, defines internal control guidance for federal agencies.

Category DynCorp/CSC SAIC Mitretek Contractor total Trilogy totald

Contractor percentage

of Trilogy total

Labor $2.9 $67.7 $19.5 $90.1 $102.3 88

Subcontractor labor 116.2 46.9 163.1 163.1 100

Travela 9.5 0.3 0.1 9.9 13.4 74

Other direct costsb 8.9 0.5 1.9 11.3 11.3 100

Equipment 115.7 1.7 117.4 221.3 53

Otherc 18.5 5.0 1.1 24.6 25.5 96

Totals $271.7 $122.1 $22.6 $416.4 $536.9 78
Page 12 GAO-06-306 FBI Trilogy Payments

Each member of the review team—which included personnel from FBI; 

GSA, the contracting agency; and Mitretek—was to perform some level of 

review of the invoices submitted by the contractors for payment. During 

the project, each of the review team members, at times, worked on-site 

with the contractors. As is discussed later, the specific roles of each party 

were not clearly defined, which limited the effectiveness of the invoice 

review and approval process. Figure 1 illustrates this invoice review and 

approval process. 

Figure 1: Invoice Review and Approval Process 

a

GSA facilitated the payment of contractor invoices and was subsequently reimbursed by FBI with 

funds appropriated for the Trilogy project.

Our review disclosed serious gaps in the review process for each of the 

major categories of contractor costs, as follows.

Copies of invoice

are sent to GSA,

FBI, and Mitretek

FBI performs

limited review

of invoice

Mitretek performs

limited review

of invoice

GSA performs

limited review

of invoice

FBI receives

Mitretek e-mail and

sends approval

to pay to GSA

Mitretek sends

e-mail to FBI that

invoice appears

reasonable

GSA receives

approval to pay

from FBI and

initiates payment

process

GSA sends payment to

contractora

Invoice

receipt

Invoice

review

Invoice

approval

Invoice

payment

Mitretek

FBI

GSA

Source: GAO analysis of information obtained from the FBI review team.

Invoice

Invoice

Invoice

Invoice

Invoice

Invoice

Invoice
Page 13 GAO-06-306 FBI Trilogy Payments

Labor—According to GSA, it typically reviewed labor charges by looking 

for unusual or excessive hours worked or rates charged and recalculating 

some amounts to ensure mathematical accuracy. GSA also stated that its 

personnel generally compared average fully burdened labor rates (labor, 

overhead, fringe benefits, and general and administration costs) charged to 

ceiling rates (maximums) established in the Trilogy contracts. However, 

GSA was not able to provide us with an explanation for or evidence of how 

they resolved clearly questionable labor charges we identified, including 

hours billed far in excess of a normal pay period. For example, we 

identified one individual who charged 371 hours for one 4-week period (an 

average of 93 hours per week) and 359 in the following 5-week period (an 

average of 70 hours per week). There was no evidence that GSA had 

questioned whether these seemingly excessive hours were valid. GSA 

stated that these types of issues were usually resolved on the telephone and 

therefore they usually did not maintain any documentation of their 

inquiries. 

On-site members of the review team indicated that they generally knew the 

contractor employees working on the project and reviewed the hours billed 

for reasonableness. However, the review team did not have a systematic 

process in place to help ensure that individuals listed on invoices had 

actually worked on Trilogy the number of hours being billed or that the job 

classifications and related billing rates were appropriate. In addition, there 

was no documented assessment of whether the overall hours being billed 

for a particular activity were in line with expectations. 

Subcontractor Labor—The review team paid contractor invoices for 

subcontractor labor without any attempt to assess the validity of the 

charges. The GSA official responsible for paying the invoices stated that 

the review team relied on the contractors to properly bill for the costs 

related to their subcontractors and to validate the subcontractor invoices. 

However, the review team had no process in place to assess whether or not 

the contractors were properly validating their subcontractor labor charges 

or to assess the allowability of those charges. In addition, we found that 

CSC, which billed the bulk (i.e., about $116 million) of the subcontractor 

labor costs,21 did not always have sufficient documentation of 

subcontractor charges to enable CSC, or anyone else, to perform any 

assessment of the allowability of those costs. For example, the only 

21 About $41 million of this amount represents labor charged by a subsidiary company, 

which was treated as a subcontractor. 
Page 14 GAO-06-306 FBI Trilogy Payments

supporting documentation CSC could provide us for about $2 million in 

subcontractor labor charges we selected for review were subcontractor 

invoices that lacked some of the basic information needed to assess the 

labor costs, such as the names of the subcontractor employees, hours 

billed, or individual labor rates. 

Travel—These charges were reviewed differently by the review team for 

SAIC and CSC invoices. For SAIC travel, GSA told us they compared 

invoiced amounts to travel authorizations and verified the per diem and 

lodging rates in the authorizations to those prescribed under the Federal 

Travel Regulation. However, travel authorizations were not always 

submitted and approved before travel occurred and in some cases were 

based on actual amounts. The review team told us that they reviewed SAIC 

travel vouchers or receipts in a few instances over 4 years when amounts 

billed were higher than expected to verify the amounts charged on the 

travel invoices. However, there was no systematic process to review travel 

costs billed to the Trilogy project. For CSC travel, because CSC’s travel 

authorizations did not include details by employee or the estimated cost for 

each trip and frequently covered several trips, the GSA official who paid 

the invoices told us she relied on members of the review team that worked 

on-site to review the travel invoices. These on-site review team officials 

indicated that their review process was based on their general 

understanding of who was traveling. However, we determined that no one 

on the review team obtained travel vouchers or receipts to verify that 

amounts billed by CSC were a necessary and proper charge to the Trilogy 

project and were reasonable based on the location and length of travel 

required.

Other Direct Costs (ODC)—These charges were paid without validation 

of the actual amounts included in the invoices. The review team relied on 

contractors to obtain purchase orders for ODC charges. For SAIC ODC 

invoices, the review team generally tracked actual charges billed on 

invoices compared to purchase order amounts. However, there was no 

review of receipts or other documentation to validate the actual charges on 

invoices. CSC ODC invoices were paid without matching the charges to a 

purchase order or documentation of the actual cost incurred. Therefore, 

the review team had no basis for confidence that CSC ODC charges were 

approved ahead of time or appropriately billed. CSC ODC charges also 

included subcontractor ODC. We asked CSC for supporting documentation 

for selected subcontractor ODC and found that CSC’s only support was 

subcontractor invoices that included only a brief description of the nature 

of the charge and the amount. No supporting receipts or other 
Page 15 GAO-06-306 FBI Trilogy Payments

documentation necessary to verify the charges was provided. For example, 

CSC billed FBI for ODC of $456,211 on an invoice submitted in November 

2003. The only description on the invoice for these charges was “other 

direct costs.” We requested from CSC any documentation they had in their 

files to support this charge from its subcontractor, CACI Inc. - Federal 

(CACI). CSC was able to provide an invoice with one line entitled 

“facilities/materials” and a spreadsheet with a general summary of the 

charges. Further, the e-mail exchange presented in figure 2 shows that CSC 

recognized that they did not have enough detail to review the ODC charge, 

but approved the invoice anyway. As noted below, the final entry in the 

exchange is, “It’s not what we asked for but at this point it doesn’t really 

matter. Approve it.”
Page 16 GAO-06-306 FBI Trilogy Payments

Figure 2: CSC E-mail Approval of Subcontractor ODC Charge

Equipment—Charges for equipment purchased by contractors and billed 

to FBI were reviewed merely by tracking the total cost of equipment 

invoices to ensure that the total amount did not exceed the approved 

amount on purchase orders. However, neither GSA, FBI, nor Mitretek 

performed procedures to ensure that individual equipment items billed by 

the contractors were actually received before payment. Discussions with 

the contractors revealed that this was a high-risk area because some of the 
Page 17 GAO-06-306 FBI Trilogy Payments

invoices they submitted were for equipment that had not yet been delivered 

to FBI. The review team approved and paid these invoices without 

question. In addition, FBI purchased some IPC/TNC equipment directly 

from vendors and delivered the equipment to contractor locations, but did 

not have a mechanism in place to physically verify receipt of that 

equipment at FBI sites before paying the related invoices. There was also 

no subsequent verification by the review team that all equipment 

purchased through contractors and vendors was ultimately received by 

FBI.

Invoice Review 

Responsibilities Were Not 

Clearly Defined

The insufficient invoice review and approval process was at least in part 

the result of a lack of clarity in the interagency agreement between FBI and 

GSA FEDSIM, as well as in FBI’s oversight contract with Mitretek. We have 

identified the management of interagency contracting as a high-risk area, in 

part because it is not always clear with whom the responsibility lies for 

critical management functions in the interagency contracting process, 

including contract oversight.22 

The lack of clarity in roles and responsibilities was evident in our 

interviews with the review team, where each party indicated that they 

believed another party was responsible for a more detailed review. While 

contract management and oversight teams were identified in the 

interagency agreements, key roles and responsibilities for the review and 

approval of invoices were not clearly defined. For example, the terms and 

conditions of the interagency agreement with GSA only vaguely described 

GSA’s role in contract administration. However, the agreement did not 

specify the invoice review and approval steps to be performed. Likewise, 

the Mitretek contract provided a general description of its oversight duties, 

but did not specifically mention its responsibilities related to the invoice 

review and approval process. We did note, however, that FBI did not 

approve an invoice for payment until after it was notified by Mitretek that it 

had reviewed the invoice. Based on our discussions with the review team, 

Mitretek would review its own invoices before sending them forward to 

FBI for payment approval.

22 GAO, High Risk Series: An Update, GAO-05-207 (Washington, D.C.: January 2005).
Page 18 GAO-06-306 FBI Trilogy Payments

Invoices Did Not Provide 

Adequate Support for All 

Charges

The failure to establish an effective review process was compounded by 

the fact that not all invoices provided detailed information required by the 

contracts and other information that would be needed to perform adequate 

reviews. Trilogy contractors were required to comply with various 

invoicing provisions of the FAR and the Trilogy contracts, including 

requirements to provide labor and various overhead rates, travel costs by 

trip, transaction detail for ODC, and purchase orders for equipment 

purchases. However, we found that the contractors, particularly CSC, often 

did not meet these requirements. For example:

• CSC labor invoices did not include information related to individual 

labor rates or indicate which overhead rates were applicable to each 

employee—information needed to verify mathematical accuracy and to 

determine that the components of the labor charges were valid. 

• CSC invoices provided a summary of travel charges by category (airfare, 

lodging, etc.), but did not provide required information related to an 

individual traveler’s trip costs. The travel invoices also did not provide 

cost detail by travel authorization number. Therefore, there was no way 

to determine that the trips billed were approved in advance or that costs 

incurred were proper and reasonable based on the location and length 

of travel. 

• CSC and SAIC invoices for ODC provided a summary of charges by 

category (shipping, office supplies, etc.); however, CSC did not provide 

required cost detail by transaction. In some cases, the category of 

charges was not even identified. For example, as shown in figure 3, 

within the ODC invoice, a subcategory entitled “other direct costs” made 

up $1.907 million of the $1.951 million invoice current billing total. No 

additional information was provided in the invoice to explain what 

made up these “other direct costs.” 
Page 19 GAO-06-306 FBI Trilogy Payments

Figure 3: Example of CSC ODC Invoice
Page 20 GAO-06-306 FBI Trilogy Payments

• For purchased equipment, CSC invoices included a summary sheet—

indicating the total price billed, a brief description of items purchased, 

and the quantity of each item purchased—and a copy of the related “Bill 

of Material” (BOM).23 However, they did not individually identify each 

asset being billed by bar code, serial number, or some other method that 

would allow verification of assets billed to assets received. SAIC 

invoices also lacked the detailed information necessary to individually 

identify assets. This severely impeded FBI’s ability to determine 

whether it had actually received the assets included on invoices and to 

subsequently track individual accountable assets on an item-by-item 

basis. 

We also found that Mitretek, a member of FBI’s review team, submitted 

invoices that did not include detailed information needed to perform 

adequate reviews. For example, Mitretek’s invoices did not include 

individual labor rates needed to verify rates charged with salary 

information or overhead rates needed to recalculate labor costs.24 As 

previously noted, Mitretek reviewed its own invoices before sending them 

forward to FBI for payment approval.

Even though contractor invoices, particularly those from CSC, frequently 

lacked key information needed to review charges, we found through 

inquiries with the review team and the contractors that invoices were 

generally paid without requesting additional supporting documentation.25 

23 Prior to purchasing equipment during the Trilogy project, CSC and SAIC would submit a 

request to purchase called a Bill of Material (BOM) for CSC and a consent to purchase for 

SAIC to the FBI for approval. The BOM listed the descriptions of the equipment to be 

purchased, the quantity, and the price per item.

24 Although Mitretek’s invoices did not include this information, during our review of 

selected charges we were able to obtain additional information from Mitretek to verify the 

labor rates charged and to recalculate the labor costs.

25 GSA provided us a list of 16 SAIC invoices that were rejected during the Trilogy project for 

various reasons, such as the review team needed further detail and clarification for invoiced 

charges and issues related to labor charges. GSA did not provide any documentation that 

additional support was obtained or that these issues were resolved. 
Page 21 GAO-06-306 FBI Trilogy Payments

Some Payments Made 

to Contractors Were 

for Questionable Costs

Because of the lack of fundamental internal controls over the process used 

to pay Trilogy invoices, FBI was highly vulnerable to payment of 

unallowable contractor charges. In an attempt to determine the validity of 

FBI’s payments, we used forensic auditing techniques, including data 

mining and document analysis, to select certain contractor costs and 

requested supporting documentation from the contractors. We identified 

about $10.1 million of questionable contractor costs paid by FBI. These 

included payments for first-class travel and other excessive airfare costs, 

incorrect billings for overtime hours, potentially excessive labor rates, and 

other questionable subcontractor costs. 

The following sections provide additional information on the payments for 

questionable costs we found. Given FBI’s poor control environment and the 

fact that we only reviewed selected FBI payments to Trilogy contractors 

that we identified with data mining and other forensic auditing techniques, 

other payments for questionable costs may have been made that have not 

been identified.

First-Class Travel and Other 

Excessive Airfare Costs

During our review of CSC’s supporting documentation for selected travel 

charges we found 19 first-class airline tickets purchased26 costing a total of 

$20,025, many of which exceeded the basic coach-class fares by significant 

margins.27 For example, in one case a traveler flew first class round trip 

between Providence, Rhode Island and San Francisco, California for 

$2,159. We estimated that a coach-class ticket for this same trip would have 

cost $1,119. In addition, 1 day after returning to Providence, this traveler 

flew back to San Francisco. The documentation provided by CSC did not 

explain or justify this first-class travel or unusual travel itinerary. The CSC 

contract called for airfare to be reimbursed to the extent allowable 

pursuant to the Joint Travel Regulations (JTR), which state that travelers 

must use basic economy or coach class unless the use of first-class travel is 

properly authorized and justified.28 Because the documentation provided 

26 The 19 first-class airfares include trips with at least one leg of first-class travel and exclude 

any first-class tickets where the itinerary identifies the fare as a “free first class upgrade.”

27 We were not able to estimate the cost of coach-class fares for some of the first-class trips 

because of unusual routing of certain one-way trips. Table 2 provides examples of the fare 

differences we were able to determine.

28 First-class travel may be allowed under certain circumstances, such as when lower class 

accommodations are not reasonably available or for medical reasons. 
Page 22 GAO-06-306 FBI Trilogy Payments

by CSC for the 19 first-class tickets costing $20,025 that we identified did 

not contain authorizations or justifications, the cost of this travel in excess 

of a coach-class ticket is potentially unallowable. Table 2 provides specific 

examples of these potentially unallowable first-class travel costs. 

Table 2: Examples of CSC’s Potentially Unallowable First-Class Travel

Source: GAO analysis of supporting documentation provided by CSC.

a

Because historical costs for coach-class tickets were not available, we estimated the costs of coachclass tickets based on an average of current prices for a similar itinerary purchased 3 days in advance 

(which was CSC’s average based on the trips we reviewed) and adjusted for inflation applicable to 

airfare. 

During our review of FBI’s payments for travel costs, we also identified 75 

unusually expensive coach-class tickets that were purchased by the 

contractors for $100,847, which exceeded basic coach-class fares by 

approximately $49,848. Upon further inquiry with several airlines, we 

determined that most of these tickets were for “full fare” coach-class 

tickets. We noted that the airlines used most often by the contractors 

indicated that it is possible to obtain a free upgrade to first class with the 

purchase of the more expensive full-fare coach ticket. We found that in 

some instances, the current price of a full-fare coach ticket was higher than 

the current price of a first-class ticket. As discussed above, the JTR 

Itinerary

Actual cost of 

first-class ticket

Estimated cost 

of coach-class 

ticketa

Percentage that 

first-class 

exceeded coachclass cost

Chicago, IL to Pittsburgh, PA 

and back

$926 $197 370

One-way from Buffalo, NY to 

San Diego, CA

1,020 295 246

Wichita, KS to Washington, 

DC and back

1,984 732 171

One-way from Dallas/Fort 

Worth, TX to St. Louis, MO

518 200 159

One-way from Washington, 

DC to St. Louis, MO

723 350 107

Providence, RI to San 

Francisco, CA and back

2,159 1,119 93

One-way from Richmond, VA 

to Denver, CO

1,064 566 88

Tampa, FL to Washington, DC 

and back

836 490 71
Page 23 GAO-06-306 FBI Trilogy Payments

requires travelers to use basic economy or coach class unless the use of 

first-class travel is properly authorized and justified. The JTR defines 

economy class as basic accommodations that include a service level 

available to all passengers regardless of fare paid. Since full-fare coach 

tickets allow a traveler to upgrade to first class at no additional cost, fullfare coach class does not appear to be basic accommodations available to 

all passengers regardless of fare paid. As such, the purchase of full-fare 

coach-class tickets is a questionable cost. While the contracts incorporated 

the JTR, we determined that the JTR applies to civilian employees of the 

Department of Defense and is not considered appropriate “travel 

regulations” for contractors. The FAR, which would be appropriate for 

contractors, requires the use of the lowest customary standard, coach, or 

equivalent airfare29 and indicates that costs in excess of the lowest 

standard, coach, or equivalent airfare are unallowable. Had these 

provisions of the FAR been applied, the excessive cost of these tickets 

would have been potentially unallowable. 

We noted 62 full-fare coach tickets billed by CSC for $85,336, compared to 

an estimated cost of $41,978 for the basic fully refundable coach-class 

fares. We also identified 6 full-fare coach tickets billed by SAIC. In addition, 

we noted 5 trips billed by SAIC for subcontractor travel with excessive 

airfare costs for which the airfare class was not included in the supporting 

documentation provided by SAIC. Therefore, we could not determine 

whether these 5 trips were first class, full-fare coach, or some other class of 

travel that exceeded basic coach-class fares. These 11 tickets cost $11,610, 

compared to an estimated cost of $7,897 for the basic fully refundable 

coach-class fare. We further found 2 excessive airfare coach tickets billed 

by Mitretek that were upgraded to first class. These 2 tickets cost $3,901, 

compared to an estimated cost of $1,123 for the basic restricted coachclass fares.30 In total, the additional cost of $49,848 for the full-fare coach 

tickets and other excessive airfare are considered questionable. Table 3 

29 The FAR states that airfare costs in excess of the lowest customary standard, coach, or 

equivalent airfare offered during normal business hours are unallowable except when such 

accommodations require circuitous routing, require travel during unreasonable hours, 

excessively prolong travel, result in increased cost that would offset transportation savings, 

are not reasonably adequate for the physical or medical needs of the traveler, or are not 

reasonably available to meet mission requirements. However, in order for airfare costs in 

excess of the above standard airfare to be allowable, the applicable condition(s) must be 

documented and justified.

30 Both tickets purchased by Mitretek were restricted tickets.
Page 24 GAO-06-306 FBI Trilogy Payments

provides examples of the excessive airfare travel costs of CSC, SAIC, and 

Mitretek. 

Table 3: Examples of Questionable Excessive Airfare Travel Costs

Source: GAO analysis of supporting documentation provided by contractors.

a

Because historical costs for coach-class tickets were not available, we estimated the costs of coachclass tickets based on an average of current prices for a similar itinerary purchased 3 days in advance 

(which was the average based on the trips we reviewed) and adjusted for inflation applicable to airfare. 

b

The fare basis code for this ticket indicated that a first-class upgrade was obtained. We could not 

verify whether this ticket was purchased as a full-fare coach or some other class of travel that 

exceeded the basic coach-class fares. 

c

We could not determine the airfare class of the ticket purchased because the supporting 

documentation provided did not include the fare basis code. 

Contractor Itinerary Ticket class

Actual cost 

of ticket

Estimated cost 

of basic coachclass ticketa

Percentage that 

full-fare coach 

exceeded basic 

coach cost

Mitretek Washington, DC to Phoenix, AZ and back First-class 

upgradeb

$2,051 $480 327

CSC One-way from Los Angeles, CA to 

Philadelphia, PA

Full fare 1,253 307 308

CSC One-way from Las Vegas, NV to Washington, 

DC

Full fare 1,171 304 285

CSC One-way from San Francisco, CA to 

Cleveland, OH

Full fare 1,049 290 262

Mitretek Washington, DC to Portland, OR and back First-class 

upgradeb

1,850 643 188

CSC One-way from San Diego, CA to Baltimore, 

MD

Full fare 1,128 413 173

CSC Atlanta, GA to Los Angeles, CA and back Full fare 2,121 851 149

CSC Minneapolis/St. Paul, MN to Los Angeles, CA 

and back

Full fare 2,107 927 127

CSC One-way from Seattle, WA to Milwaukee, WI Full fare 1,038 468 122

CSC Boston, MA to Los Angeles, CA and back Full fare 2,053 1,141 80

SAIC Syracuse, NY to Washington, DC and back Not determinablec 862 484 78

CSC Washington, DC to Los Angeles, CA and back Full fare 1,874 1,090 72

CSC Washington, DC to San Francisco, CA and 

back

Full fare 2,444 1,490 64

SAIC Washington, DC to Chicago, IL

and back

Full fare 942 619 52

SAIC Denver, CO to Washington, DC

and back

Not determinablec 1,570 1,037 51
Page 25 GAO-06-306 FBI Trilogy Payments

Excess Overtime Charges During our review of labor charged by SAIC, we found that SAIC billed the 

Trilogy project for overtime hours worked by employees that exceeded the 

hours that would have been charged if SAIC followed the overtime policy 

informally agreed to by SAIC and FBI.31 Our calculations indicate that FBI 

may have overpaid an estimated $400,000 for these excess overtime 

charges.

SAIC’s task order, awarded in June 2001, stated that if work beyond the 

standard 40-hour work week was necessary to support the requirements of 

the task order, the government would not object to SAIC employees 

working an extended work week (EWW) (hours in excess of 40 per week). 

For designated EWW periods, exempt staff (professional staff normally not 

eligible for overtime compensation) would be paid a pro rata share 

(straight time) of their weekly salary based on the extended hours worked. 

EWW periods required SAIC management approval and were used when 

exempt staff were required to work extended hours for short periods of 

time due to special circumstances, such as accelerated project schedules 

or circumstances where employees could not dictate their work schedule. 

The first EWW period started August 31, 2002, and throughout the Trilogy 

project SAIC management approved 11 EWW periods for employees 

working on various Trilogy tasks. In March 2003, after the fourth EWW 

period started, SAIC implemented an EWW policy, agreed to with FBI, 

which decreased the amount of hours that would be billed to FBI. This 

policy stated that exempt staff would be compensated for hours worked 

that were greater than 90 hours in a 2-week pay period on an hour-for-hour 

basis. That meant that the first 10 hours of overtime would be 

uncompensated. In addition, a ceiling of 120 hours was established, 

meaning that employees would not be compensated for hours worked in 

excess of 120 in a pay period. SAIC agreed that it would not bill FBI for this 

uncompensated overtime. 

During our review of employee labor billings for the Trilogy project, we 

found that SAIC employees who charged EWW time after the March 2003 

policy frequently charged for all hours worked beyond 80 in a pay period 

and that the cost of these hours was billed to and paid by FBI. We also 

noted some instances where employees charged EWW beyond the 120-hour 

ceiling per pay period, which were also billed. We discussed this issue with 

31 GSA officials also indicated that they were aware of this informal agreement.
Page 26 GAO-06-306 FBI Trilogy Payments

SAIC management and they agreed that their billing of EWW costs was not 

consistent with the policy that was established in March 2003 and indicated 

that they would research the issue further to determine whether 

corrections are necessary.32

Based on our review of the labor charges, it appears that FBI may have 

overpaid for more than 4,000 hours of EWW labor charges.33 Using average 

fully burdened labor rates for employees incorrectly billing EWW, we 

estimated that FBI may have overpaid EWW costs by approximately 

$400,000.34 

Questionable Labor Rates During our review of labor charged by CSC/DynCorp, we found that 

DynCorp Information Systems (DynIS), a subsidiary of DynCorp that billed 

about $42 million or 94 percent of DynCorp’s direct labor, charged actual 

labor rates that may have exceeded rates that GSA asserts were established 

ceiling rates pursuant to the task order. CSC asserts that ceiling rates were 

never established. If ceiling rates were established, we estimated that FBI 

overpaid CSC by approximately $2.1 million. 

When DynCorp entered into the GSA FEDSIM Millennia contract, it agreed 

to ceiling rates that would be charged for its various labor categories, such 

as clerical and senior technician. The Millennia contract also stated that 

ceiling rates applicable to subcontractors would be negotiated separately 

for each task order awarded under the Millennia contract. After entering 

into the Millennia contract, DynCorp acquired a company that was 

renamed DynIS. Because DynIS’ labor rates were not considered when 

32 SAIC officials indicated that in June 2003 a waiver of the 10 hours of uncompensated time 

associated with the EWW policy was implemented for select teams. However, SAIC could 

not provide us information on which teams, tasks, or employees the waiver applied to or the 

length of time the waiver covered. Therefore, we were not able to consider this waiver in 

our analysis.

33 This estimate of the incorrect EWW hours charged is based on SAIC’s summary of labor 

hours charged. The actual incorrect hours could be affected by time sheet corrections or 

other factors.

34 This estimate was calculated based on average fully burdened labor rates using 

cumulative hours and costs billed for employees that appeared to incorrectly charge EWW 

hours and the amount of hours that appeared to be incorrectly billed to FBI. The actual 

amount of the overpayment would be influenced by the actual labor rates of employees 

working EWW, as well as SAIC indirect billing rates that are charged on labor costs for 

overhead, fringe benefits, and general and administrative costs.
Page 27 GAO-06-306 FBI Trilogy Payments

DynCorp’s ceiling rates were established under Millennia, DynCorp’s 

proposal for the Trilogy task order listed DynIS as a subcontractor. 

In May 2001, GSA issued a Trilogy task order award document to DynCorp 

that had a section entitled “Ceiling Rates Applicable to DynIS” that 

included the following statement: “Ceilings are placed on all labor category 

and indirect rates used to establish the total cost for this task order...These 

ceiling rates are subject to negotiation pending the results of [Defense 

Contract Audit Agency] DCAA’s35 audit.” 

GSA officials told us they believed that DynIS labor category hourly rates in 

DynCorp’s Trilogy proposal represented established labor category ceiling 

rates. GSA officials stated that they negotiated DynIS labor category ceiling 

rates with DynCorp.36 However, CSC stated that labor category ceiling rates 

were never established because they were never negotiated with GSA.37

In March 2003, CSC/DynCorp submitted and GSA approved a modification 

to the task order that, according to GSA, increased labor rates for several 

categories.38 However, CSC claims that this modification did not affect the 

ceiling rates because the ceilings were never established.

Based on our review of DynCorp’s labor invoices, we noted that several of 

DynIS’ rates charged exceeded the labor rates that GSA contended were 

ceiling rates. For example, DynIS billed over 14,000 hours for work 

performed during 2001 for senior IT analysts working on the Trilogy project 

based on an average hourly rate of $106.14. However, if ceiling rates were 

established, the DynCorp proposal indicated that the Trilogy project would 

be charged a maximum of $68.73 per hour for a senior IT analyst working in 

35 The Defense Contract Audit Agency, or DCAA, is responsible for performing all contract 

audits for the Department of Defense. They also provide contract audit services to other 

government agencies when hired to do so.

36 GSA officials said they believed that since proposed labor category rates for DynIS varied 

in each revised proposal, this supports their assertion that the rates were negotiated.

37 CSC contends that the labor category hourly rates presented in DynCorp’s proposals 

merely represented a detailed cost breakdown of DynIS’ estimated costs. To further support 

their contention, CSC referred us to DynCorp’s labor invoices, which consistently listed 

DynIS ceiling rates as “TBD” (to be determined).

38 The modification contained actual labor rates for year 1 of the contract and then 

presented projected labor rates for years 2 and 3 of the contract. We could not verify CSC’s 

explanation for how they calculated the year 1 totals.
Page 28 GAO-06-306 FBI Trilogy Payments

the field or $96.24 per hour for a senior IT analyst working at headquarters. 

If ceiling rates were established, we estimated that FBI overpaid 

CSC/DynCorp by approximately $2.1 million for DynIS labor costs.39

Other Questionable Costs We identified certain other payments to contractors that were for 

questionable costs. These costs were not supported by sufficient 

documentation to enable an objective third party to determine if each 

payment was a valid use of government funds.40 We further identified costs 

that were questionable as to whether they were necessary. Table 4 

summarizes these questionable costs, which totaled about $7.5 million.

39 We estimated the potential overcharge based on the total hours charged and the difference 

between the possible ceiling rates and the actual average labor rates charged by DynIS on an 

annual basis. For work performed in 2001, because the proposal had different rates for 

work performed in the field or at headquarters and CSC’s labor invoices did not indicate 

where employees worked, we calculated average ceiling rates based on an assumption that 

50 percent of employees worked in the field and 50 percent worked at headquarters. For 

2002 and 2003, we used rates from the previously discussed modification that included the 

same rates for the field or headquarters. 

40 Our Standards for Internal Control in the Federal Government indicates that the proper 

execution of transactions should include determining that only valid transactions are 

authorized. Further, all transactions must be properly documented and documentation must 

be readily available for review.
Page 29 GAO-06-306 FBI Trilogy Payments

Table 4: Other Questionable Costs Paid by FBI

Source: GAO analysis of contractor and subcontractor invoices and supporting documentation.

Note: Examples 2 and 3, combined, represent $5.5 million of inadequately supported CSC ODC.

A discussion of each of these questionable costs is provided below.

Example 1—Subcontractor Labor Costs

CSC did not provide us adequate supporting documentation for almost $2 

million of about $3.3 million of subcontractor labor charges we selected to 

review. The only documentation CSC could provide us for these charges 

were subcontractor invoices that lacked some of the basic information 

needed to assess the labor charges, such as the names of the subcontractor 

employees, hours billed, or individual labor rates. Therefore, CSC could not 

fully substantiate that the costs for services provided by the subcontractors 

that were charged to FBI’s Trilogy project were appropriate. 

Example 2—Other Direct Costs/Training

CSC hired a subcontractor, CACI, to schedule and conduct training related 

to the Trilogy project. CACI billed more than $17 million ($13 million for 

labor and $4 million for facilities, equipment rentals, and other direct costs) 

to provide FBI agents and employees basic, intermediate, and advanced 

training in Microsoft Office applications, including Word, Excel, 

PowerPoint, and Outlook. FBI officials stated that FBI decided to conduct 

off-site, hands-on training for employees (instead of internal or CD-based 

training) because of the number of employees who had limited experience 

using computers and because FBI had insufficient space to set up training 

labs at their existing facilities. 

During our review of CSC ODC, we selected $4.7 million of these training 

charges from CACI and found that CSC was unable to provide us with 

adequate support for these charges. Subsequently, we requested supporting 

Example Description of invoice charge Amount

1 Subcontractor labor costs $1,957,920

2 Other direct costs – training 4,746,045

3 Other direct costs – equipment disposal 762,262

4 Subcontractor labor invoice – duplicate payment 26,335

Total $7,492,562
Page 30 GAO-06-306 FBI Trilogy Payments

documentation from CACI for selected charges totaling about $3.5 million 

of these training costs. Our examination identified the following issues:

• CACI could not adequately support almost $3 million that it paid to one 

event planning company. Since FBI decided to conduct their training offsite, CACI hired an event planner, which it paid almost $3.2 million to 

reserve hotel conference rooms, rent computer equipment for training 

sessions, and set up the conference rooms for the training. The bulk of 

the $3.2 million related to one purchase order for training at 72 sites 

over 3 months, which stated that costs could not exceed $2,992,526. This 

purchase order provided for payment of 50 percent of this amount to the 

event planner at the time the purchase order was issued (to cover costs 

that include prepayments for obtaining training facilities) and four equal 

monthly payments for the remaining balance. CACI provided us with the 

purchase order, which included a description of the services to be 

performed by the event planner. They also provided us copies of 

invoices from the event planner that included general descriptions of 

the services billed. CACI could not provide any further evidence of the 

actual costs of goods or services that were provided by the event 

planner, such as hotel invoices for the rental of conference rooms.41 

CACI stated that documentation supporting actual costs of the event 

planner was not applicable because its agreement with the event 

planner was “fixed priced.” CACI stated that the payment terms in the 

purchase order required only that CACI pay the event planner a series of 

payments in fixed amounts. However, CACI’s assertion that supporting 

documentation of actual costs was not applicable was not supported by 

the terms of the purchase order, which included a related statement of 

work that specifically required documentation to support costs claimed 

by the event planner. According to the statement of work, the event 

planner was required to (1) provide data on actual costs incurred twice 

a month, (2) make every attempt to obtain the best pricing with respect 

to all costs, and (3) charge CACI only for services rendered, allowing for

41 CACI provided us a “training log” for the courses coordinated by the event planner. This 

training log was a spreadsheet that summarized training courses scheduled in 23 cities and 

included the dates of the courses, and the number of attendees. We requested but did not 

receive a copy of FBI’s training logs to verify its participation at this training. 
Page 31 GAO-06-306 FBI Trilogy Payments

any cost savings from advance payments to be returned to CACI upon 

request.42

• CACI purchased about 30,000 ink pens and 30,000 highlighters for 

training sessions, at a cost of $19,705 and $32,314, respectively. The pens 

were custom made for the Trilogy training program. While there was 

supporting documentation for these costs and FBI officials stated that 

they preapproved the purchases as part of their acceptance of the 

Trilogy Pre-Training Education Plan, we question whether these 

purchases were necessary. 

Example 3—Other Direct Costs/Equipment Disposal

CSC was unable to provide us adequate supporting documentation for 

$762,262 in equipment disposal costs billed by two subcontractors. The 

documentation provided consisted of a spreadsheet that summarized costs 

of the subcontractors, but did not include receipts or other support to 

prove that these costs were actually incurred. 

Example 4—Subcontractor Labor Invoice–Duplicate Payment

Our review of SAIC’s subcontractor labor charges found that FBI was billed 

twice for the same subcontractor invoice totaling $26,335. SAIC officials 

agreed that they double billed and stated that they would make a 

correction.

Major Lapses in 

Accountability 

Resulted in Millions of 

Dollars of Missing 

Trilogy Equipment

FBI did not adequately maintain accountability for computer equipment 

purchased for the Trilogy project. FBI relied extensively on contractors to 

account for Trilogy assets while they were being purchased, warehoused, 

and installed. However, FBI did not establish controls to verify the 

accuracy and completeness of contractor records it was relying on, to 

ensure that only the items approved for purchase were acquired by the 

contractors, and to ensure that it received all those items acquired through 

42 In May 2003, CACI entered into an agreement with the event planner to terminate the 

contract after training was conducted at only 23 of the 72 sites. CACI eventually paid the full 

amount of the purchase order (about $2.993 million) plus an additional net amount of $5,776 

(a settlement amount of $62,214 for less than full performance reduced by $56,438 for 

unsupported event planner prepayments to reserve training facilities). Subsequently, CACI 

entered into a contract with a second event planner to procure facilities for FBI training. 
Page 32 GAO-06-306 FBI Trilogy Payments

its contractors. Moreover, once FBI took possession of the Trilogy 

equipment, it did not establish adequate physical control over the assets. 

Consequently, we found that FBI could not locate over 1,200 assets 

purchased with Trilogy funds, which we valued at approximately $7.6 

million. In addition, during its physical inventory counts for fiscal years 

2003 through 2005, FBI identified over 30 pieces of Trilogy equipment 

valued at about $167,000 that it reported as having been lost or stolen. Due 

to the significant weaknesses we identified in FBI’s property controls, the 

actual amount of lost or stolen equipment could be even higher.

FBI’s Overreliance on 

Contractors Diminished Its 

Ability to Properly Account 

for Trilogy Assets

FBI relied on contractors to maintain records related to the purchasing, 

warehousing, and installation of about 62 percent of the equipment 

purchased for the Trilogy project.43 FBI’s primary contractor responsible 

for delivering computer equipment to FBI sites was CSC. FBI officials told 

us they met regularly with CSC and its subcontractors to discuss FBI’s 

equipment needs and a deployment strategy for the delivery of equipment. 

Based on these meetings, CSC instructed its subcontractors to purchase 

equipment, which was subsequently shipped to and put under the control 

of the subcontractors. Once equipment arrived at the subcontractors’ 

warehouses, they were responsible for affixing bar codes on accountable 

items—all items valued above $1,000 and certain others considered 

sensitive that are required by FBI policy to be tracked individually. In 

addition, FBI directly purchased about $19.1 million of equipment for the 

Trilogy project that was shipped directly to CSC or its subcontractors.

When equipment was shipped from subcontractor warehouses to FBI sites, 

the shipment included two CSC subcontractor-prepared reports. The first 

report, similar to a bill of lading, included all items shipped, including 

nonaccountable items such as cables. However, there was no requirement 

for FBI officials receiving the items to verify that the items included on this 

report were actually received. The second report listed accountable assets 

that were delivered such as desktop computers, scanners, printers, and 

network equipment that were available for installation at that location. 

This report was then used by the subcontractor during the installation of 

equipment at each FBI location to prepare the “Site Acceptance Listing” 

documenting equipment that had been accepted and installed at the site. At 

the completion of the site installation, both FBI and subcontractor officials 

43 Represents Trilogy equipment purchased by CSC, SAIC, and directly by FBI that was 

delivered to CSC for the IPC/TNC portion of the project. 
Page 33 GAO-06-306 FBI Trilogy Payments

were required to sign this Site Acceptance Listing. According to FBI 

headquarters officials, verification of the subcontractor-prepared Site 

Acceptance Listings represented a key control over Trilogy equipment, 

providing assurance that FBI received what it should have. However, based 

on our inquiries at two field offices we visited, we found that FBI officials 

who received equipment and signed the Site Acceptance Listing, may not 

have always verified the accuracy and completeness of these lists.

An official from the Baltimore field office acknowledged that he signed 

these lists without verifying that the items included had actually been 

delivered and installed at his site. In addition, officials from the Newark 

field office said they felt comfortable that they had received all the items 

they were supposed to because of their close working relationship with the 

subcontractor who performed the installation; however, they 

acknowledged that they did not independently verify equipment included 

on the contractor lists that they had signed. FBI did not prepare its own 

independent lists of ordered, purchased, or paid-for assets, and therefore, it 

had no choice but to rely solely on the contractor lists to account for its 

Trilogy assets.

Furthermore, when FBI received shipments from contractors, it did not 

compare purchasing and billing documentation to receiving documentation 

to verify that all items purchased were received as required by FBI’s 

accountable asset manual. According to FBI policy, when shipments are 

received, a designated property custodian is responsible for ensuring that 

the items received are the same as those that were ordered and for 

determining whether a complete or partial shipment was received. 

However, FBI did not require that these procedures be followed for the 

Trilogy project because purchasing and billing documentation for the 

project was not site specific; instead, the program office instructed FBI 

staff to only verify the number of boxes received and not to open the boxes 

to verify the assets received until the deployment team arrived. In addition, 

FBI did not perform an overall reconciliation of total assets ordered and 

paid for to those received. Such a reconciliation would have been made 

difficult by the fact that invoices FBI received from CSC did not include 

item-specific information—such as bar codes, serial numbers, or shipping 

location. However, failure to perform such a reconciliation left FBI with no 

assurance that it had received all of the assets it paid for. 
Page 34 GAO-06-306 FBI Trilogy Payments

FBI Lacked Adequate 

Physical Control over 

Trilogy Assets

Assets that were delivered to FBI sites by contractors were not entered into 

FBI’s Property Management Application (PMA) in a timely manner, 

increasing the risk that assets could be lost or stolen without detection. FBI 

policy requires property management personnel to identify accountable 

items and enter them into PMA within 30 days of receipt. However, FBI 

officials acknowledged that Trilogy equipment had not been entered into 

PMA within 30 days, as required. We compared installation dates recorded 

in CSC’s database44 of assets deployed to dates assets were recorded in 

PMA. As shown in table 5, we found that 71.6 percent of the CSC items that 

were recorded in PMA, representing 84 percent of the dollar value, were 

entered more than 30 days after receipt, contrary to FBI policy. In addition, 

16.9 percent of the assets, representing 37 percent of the dollar value, were 

entered more than a year after receipt. When an asset is not recorded in 

the property system, there is no systematic means of identifying where it is 

located or when it is moved, transferred, or disposed of and no record of its 

existence when physical inventories are performed. This severely limits 

the effectiveness of the physical inventory in detecting missing assets. 

Table 5: Analysis of Time Taken by FBI to Enter CSC-Purchased Assets into PMA

Source: GAO analysis of PMA records and FBI’s deployment schedule.

44 We limited this comparison to CSC-purchased assets, which represented about 52 percent 

of Trilogy assets. We could not perform this test for assets purchased directly by FBI 

because it did not track these assets by bar code and therefore did not have the data 

necessary for this analysis.

Amount of time taken to enter 

records into PMA

Percent of 

items tested

Percent of dollar

value tested

0-30 days 28.4 16.3

31-90 days 27.5 19.2

91-180 days 10.1 9.1

181-365 days 17.1 18.5

1-2 years 9.3 12.9

2-3 years 6.9 22.3

3-4 years 0.7 1.7

Total 100.0 100.0
Page 35 GAO-06-306 FBI Trilogy Payments

In an effort to identify the assets that should have been entered into PMA, 

FBI attempted to create, in 2005, an after-the-fact inventory listing of 

accountable and nonaccountable assets deployed. Because FBI had not 

prepared its own independent inventory listing of Trilogy assets ordered 

and paid for, it used the CSC-prepared list of equipment deployed as its 

basis to determine accountable assets.45 According to FBI, this list was 

supposed to include all CSC-deployed equipment that had been affixed 

with a bar code. However, FBI’s ability to accurately identify accountable 

assets was hampered by its loss of control over bar codes. FBI policy 

identifies the use of bar codes as “the key control”46 for maintaining 

individual asset accountability and requires that bar codes be affixed to all 

accountable assets. Despite the importance of maintaining a reliable bar 

code system, FBI relied on contractors to affix the bar codes, but then did 

not track the bar code numbers given to contractors, the bar code numbers 

they used, or the bar code numbers returned. Moreover, FBI provided 

incorrect instructions to contractors, initially directing them to bar code 

certain types of nonaccountable computer pieces.47

An FBI official stated that when creating its after-the-fact listing of 

accountable and nonaccountable assets from the CSC listing, FBI tried to 

identify and list as nonaccountable those items that had been mistakenly 

bar coded. However, we found that FBI’s accountable asset listing still 

included some nonaccountable assets that had been bar coded in error. 

Further, we noted that FBI’s listing of nonaccountable assets incorrectly 

included some accountable items such as uninterruptible power supplies 

and network switches.48 As a result, FBI could not reliably determine the 

complete universe of Trilogy assets that should have been bar coded and 

designated as accountable property to be tracked separately by PMA. 

45 The CSC-prepared listing of equipment included equipment purchased directly by CSC, as 

well as all equipment purchased directly by FBI that was delivered to CSC or its 

subcontractors.

46 The use of bar codes involves affixing a machine-readable bar code to a controlled item, 

which can then be scanned and compared to an equipment inventory listing as part of a 

periodic physical inventory.

47 FBI subsequently revised its instructions to contractors; however, the contractors never 

removed the affixed bar codes from equipment items that had already been erroneously 

tagged.

48 FBI’s records showed that nonaccountable assets purchased by CSC totaled about $37.4 

million or approximately 32 percent of the dollar value of the CSC-purchased assets and 22 

percent of the reported total hardware purchased on the Trilogy project.
Page 36 GAO-06-306 FBI Trilogy Payments

We also compared FBI’s after-the-fact listing of accountable assets 

identified from the CSC-prepared listing to the asset records in FBI’s PMA. 

We found that FBI’s listing and or PMA included several errors and 

omissions in the listings, including:

• accountable assets for which there was no listed bar code or serial 

number;

• incorrect bar codes (for example, text bar codes or bar codes with too 

many digits);

• items for which locations were listed as “unknown”;

• assets with the same bar code with different serial numbers and/or 

locations;

• incomplete and inaccurate asset descriptions;

• items that matched to PMA by bar code but not by serial number; and

• items that matched to PMA by serial number but not by bar code.

The FBI official who prepared the accountable asset listing said he gave 

this listing to each site with instructions to ensure that all of the assets had 

been entered into PMA in preparation for a 2005 physical inventory count. 

However, FBI did not follow up to determine whether all of the records in 

the inventory listing were actually entered into PMA. For site officials 

using the listing, the lack of complete and accurate information included in 

the inventory listing may have limited their ability to track some of the 

assets and ensure they were accounted for in PMA. 

FBI policy requires complete physical inventories of all accountable assets 

at least once every 2 years. Annually, a complete physical inventory of all 

accountable assets that are also capitalized assets (i.e., those with an 

acquisition cost of $25,000 or more) and “sensitive” property (e.g., laptop 

computers and weapons which are susceptible to theft) is performed. 

FBI’s most recent biennial inventory of accountable assets occurred in the 

spring of 2005. To complete its inventory, FBI used scanner technology, 

directing employees responsible for performing the inventory to scan all 

items found at FBI locations that contained a bar code. PMA was updated 

to reflect the items that were located and scanned during the inventory and 

generated reports to identify new accountable assets that were not 
Page 37 GAO-06-306 FBI Trilogy Payments

previously entered in the system.49 However, FBI did not compare the 

results of its inventory to its listing of accountable assets purchased under 

Trilogy to ensure that all of these assets were actually located during the 

inventory. Failing to perform this elemental step undermines the 

fundamental purpose of conducting physical inventories.

FBI Is Unable to Locate 

Millions of Dollars of Trilogy 

Assets

Given that FBI did not ensure that all accountable Trilogy assets that 

should have been in its possession (i.e., those it paid for) were located 

during the physical inventory, we undertook several procedures in an 

attempt to do so. To perform this test work, we used FBI’s inventory listing 

of CSC-purchased accountable equipment as well as similar FBI listings of 

assets FBI purchased directly (government furnished equipment or GFE) 

and that were purchased by SAIC. Although FBI’s inventory listing of CSCpurchased accountable equipment included inaccurate and incomplete 

information, as previously discussed, we were able to reconcile the total 

number of items for selected types of equipment from its listing of 

accountable CSC-purchased equipment to the number of these assets 

invoiced by CSC. This provided some assurance that the listing of 

accountable CSC-deployed equipment purchased by both CSC and FBI for 

those asset types includes all accountable assets FBI paid for and that 

should be in FBI’s possession. This was done for selected CSC-purchased 

accountable assets,50 which represented approximately 76 percent of the 

total number of CSC-purchased equipment, and all SAIC-purchased assets. 

Therefore, we used these asset listings to determine whether accountable 

assets were located during FBI’s most recent physical inventory. 

We obtained several iterations of PMA listings and inventory reports from 

FBI and attempted to trace the assets to these reports. Collectively, these 

listings and reports should have included all accountable Trilogy assets in 

FBI’s possession at the time of its 2005 inventory. Based on this 

comparison, we identified 1,205 accountable Trilogy assets, with an 

estimated value of approximately $7.6 million that FBI has been unable to 

49 As part of its spring 2005 inventory, FBI identified over 310 accountable-Trilogy assets 

valued at about $1.2 million that had not been recorded in PMA, over 61 percent of which 

had been installed prior to FBI’s fiscal year 2003 inventory, including several assets that 

were installed in 2001.

50 The selected items were desktop computers, Dell PowerEdge 2550 servers, Cisco 4006 

switches, and Cisco 6509 switches. We chose these items because they represented major 

items purchased for the Trilogy project.
Page 38 GAO-06-306 FBI Trilogy Payments

locate or otherwise account for. We estimated this value using the lowest 

per-unit-cost based on the Trilogy equipment-pricing sheets that were 

prepared by FBI and used in recording the cost of the same types of assets 

in PMA. If we could not identify a price for a certain type of accountable 

asset in FBI’s equipment-pricing sheets, we identified the lowest price on 

the accountable and capitalized assets spreadsheet prepared by FBI’s 

finance division. When the cost was not available on either of these 

documents, or when the item was unknown, we did not attempt to estimate 

the asset’s value. As a result, our estimated value of lost or stolen 

equipment does not include 103 of the 926 CSC-purchased items we 

identified, such as Paradyne frame savers and Optical HBA drivers, and 

therefore is understated. Table 6 provides a description and estimated 

value for the assets for which we could identify unit cost.
Page 39 GAO-06-306 FBI Trilogy Payments

Table 6: Trilogy-Purchased Items Not Located by FBI 

Source: GAO analysis of FBI listings of accountable assets and PMA reports.

a

This equipment includes electronic testing tools used to ensure proper installation of network 

equipment.

b

An uninterrupted power source is a constantly charging battery pack which powers the computer.

Item description

Number of 

items

Total estimated 

value

CSC-purchased items

Data storage equipment 35 $2,404,853

Network equipment:

 Switches 269 1,504,624

 Routers 147 367,151

 Servers 21 192,245

Network analysis equipmenta 33 228,325

Uninterrupted power sourceb 120 176,812

CPUs/Computer desktops 113 129,350

Printers 58 99,231

Miscellaneous equipment (e.g., laptops, flat panel 

monitors, etc.)

130 170,795

CSC total 926 $5,273,386

SAIC and FBI-purchased UAC items

Network equipment:

 Servers 2 $90,597

 Routers 2 28,000

 Switches 3 160,355

Data storage equipment 5 1,012,666

Load balancers 3 281,601

Printers and scanners 224 398,885

Miscellaneous equipment (encryption equipment 

and CPUs)

3 30,869

SAIC and FBI total 242 $2,002,973

FBI-purchased IPC/TNC GFE

Network equipment:

 Servers 28 314,668

CPUs/Computer desktops 1 2,850

Laptops 7 12,190

Monitor 1 1,075

FBI total 37 $330,783

Total 1,205 $7,607,142
Page 40 GAO-06-306 FBI Trilogy Payments

As of November 30, 2005, FBI was unable to sufficiently explain why these 

items were not accounted for in PMA and/or could not provide adequate 

documentation that the assets had been located. An FBI official stated that 

some of the assets included in the listing of CSC-purchased equipment 

would not be expected to be in PMA because some were replaced. For 

example, according to the official, some of the CSC-purchased switches 

were replaced due to a heating malfunction. However, FBI did not provide 

us with documentation related to replaced items, and therefore we could 

not determine which units if any were replaced and/or which units should 

still be on hand. 

The FBI official also told us that, even though he attempted to remove all 

nonaccountable items from the listing of CSC-purchased equipment, some 

nonaccountable items may still have been included. For example, FBI told 

us some purchased components that were a part of an accountable asset 

unit may have been bar coded even though the item by itself was not an 

accountable item. Using FBI guidance on accountable property,51 we 

determined that 103, or about 11.1 percent, of the missing 926 CSCpurchased assets may represent nonaccountable units. Because FBI was 

unable to provide us with location information for these items, we could 

not definitively determine whether they represent nonaccountable 

components or are separate accountable assets that were not in PMA and 

could not be located. FBI had no further explanation for why it could not 

locate the missing assets we identified or whether the missing assets we 

identified may expose confidential and sensitive information and data to 

unauthorized users.

In addition to the missing items discussed above, FBI could not initially 

locate another 25 purchased assets—highly-sensitive encryption 

equipment—in its PMA system. Subsequently, FBI officials were able to 

provide the bar codes, locate the encryption equipment,52 and provide 

evidence that all of the items were now in its PMA system.53 The officials 

stated the equipment was not originally required to be bar coded or tracked 

51 This guidance included the final corrected description provided to contractors of 

accountable units to be affixed with bar codes.

52 As of January 2006, we have physically observed nine taclanes, of which five were not 

being used by the FBI offices in Baltimore, Md. and Chantilly, Va. The FBI staff person 

responsible for monitoring the taclanes could not explain why five of the taclanes were not 

being used at the FBI sites.

53 FBI input the last of these missing items into PMA on December 8, 2005.
Page 41 GAO-06-306 FBI Trilogy Payments

in PMA, but that it was tracked several different ways by serial number. 

The officials also explained that the problem resulted mostly from FBI 

modifications to the equipment that required revisions to the serial 

numbers listed in the invoices. Regardless of the fact that the equipment 

was subsequently located after research and inquiries, such highly sensitive 

equipment needs to be properly and timely accounted for to ensure the 

precise location of the equipment can be immediately determined at all 

times. 

In addition to the items we found missing, FBI’s property management 

division reported 37 CSC-purchased Trilogy assets, totaling approximately 

$167,000, that were determined to be lost or stolen during its physical 

inventory counts for fiscal years 2003 through 2005.54 The assets reported 

as lost or stolen included computers and servers, which may have 

contained sensitive and confidential information. According to FBI policy, 

for items in PMA that cannot be located during the inventory, a “Report of 

Lost or Stolen Property” must be submitted to FBI headquarters. Due to 

security concerns, FBI did not provide us copies of these reports for the 

property items that were not located during the 2003, 2004, and 2005 

inventories. Therefore, it is unclear what type of security risk if any these 

lost/stolen assets represent. 

Conclusions FBI’s Trilogy IT project spanned 4 years and the reported costs exceeded 

$500 million. Our review disclosed that there were serious internal control 

weaknesses over the process used by FBI and GSA to approve contractor 

charges related to Trilogy, which made up the vast majority of the total 

reported project cost. While our review focused specifically on the Trilogy 

program, the significance of the issues identified during our review may be 

indicative of more systemic contract and financial management problems 

at FBI and GSA, in particular when using cost-reimbursable type contracts 

and interagency contracting vehicles. These weaknesses resulted in the 

payment of millions of dollars of questionable contractor costs, which may 

have unnecessarily increased the overall cost of the project. Unless FBI 

strengthens its controls over contractor payments, its ability to properly 

54 We identified these as Trilogy assets by comparing the FBI bar codes for CSC- and SAICpurchased Trilogy assets against its complete listing of lost and stolen assets for the 3 years, 

which totaled 2,331 assets valued at $6.7 million. We could not perform this test for assets 

purchased directly by FBI because vendor invoices did not include serial or bar code 

numbers and therefore did not have the data necessary for this analysis.
Page 42 GAO-06-306 FBI Trilogy Payments

control the costs of future projects involving contractors, including its new 

Sentinel project, will be seriously compromised. Additionally, to the extent 

that GSA enters into similar interagency agreements, it will continue to be 

exposed to oversight lapses until it reassesses its procedures. Further, 

weaknesses in FBI’s controls over the equipment acquired for Trilogy 

resulted in millions of dollars in missing equipment, and call into question 

FBI’s ability to adequately safeguard its equipment, as well as confidential 

and sensitive information that could be accessed through that equipment 

from unauthorized use.

Recommendations for 

Executive Action 

We are making the following 27 recommendations to the Director of FBI 

and the Administrator of General Services to (1) facilitate the effective 

management of interagency contracting, (2) mitigate the risks of paying 

unallowable costs in connection with cost-reimbursement type contracts, 

and (3) improve FBI’s accountability for and safeguarding of its computer 

equipment. 

To improve FBI’s controls over its review and approval process for costreimbursement type contract invoices, we recommend that the Director of 

FBI instruct the Chief Financial Officer to establish policies and 

procedures so that:

• Future interagency agreements establish clear and well-defined roles 

and responsibilities for all parties included in the contract 

administration process, including those involved in the invoice review 

process, such as contracting officers, technical point of contacts, 

contracting officer’s technical representatives, and contractor personnel 

with oversight and administrative roles. 

• Appropriate steps are taken during the invoice review and approval 

process for every invoice cost category (i.e., labor, travel, other direct 

costs, equipment, etc.) to verify that the (1) invoices provide the 

information required in the contract to support the charges, (2) goods 

and services billed on invoices have been received, and (3) amounts are 

appropriate and in accordance with contract terms.

• The resolution of any questionable or unsupported charges on 

contractor invoices identified during the review process is properly 

documented.
Page 43 GAO-06-306 FBI Trilogy Payments

• Labor rates, ceiling limits, treatment of overtime hours, and other key 

terms for cost determination are clearly specified and documented for 

all contracts, task orders, and related agreements.

• Future contracts clearly reflect the appropriate Federal Acquisition 

Regulation travel cost requirements, including the purchase of the 

lowest standard, coach, or equivalent airfare.

• An appropriate process is in place to assess the adequacy of contractor’s 

review and documentation of submitted subcontractor charges before 

such charges are paid by FBI. 

In light of the findings in this report, we recommend that the Administrator 

of General Services instruct the director of FEDSIM to reassess its 

procedures in connection with (1) interagency contracts and (2) delegated 

contract administration responsibilities, including the following:

• Clearly defining the roles and responsibilities of each party in 

interagency agreements, and particularly those related to reviewing and 

approving invoices. 

• Assessing the adequacy of its invoice review and approval polices, 

including specific steps to be performed by each party so that 

(1) invoices provide the information required in the contract to support 

the charges, (2) goods and services billed on invoices have been 

received, (3) amounts are appropriate and in accordance with contract 

terms, and (4) the resolution of any questionable or unsupported 

charges on contractor invoices identified during the review process is 

clearly documented. 

• Clearly documenting labor rates, ceiling limits, treatment of overtime 

hours, and other key terms for cost determination for all contracts, task 

orders, and related agreements.

• Clearly reflecting in future contracts the appropriate Federal 

Acquisition Regulation travel cost requirements, including the purchase 

of the lowest standard, coach, or equivalent airfare.

• Confirming that contractors properly review and support submitted 

subcontractor charges. 
Page 44 GAO-06-306 FBI Trilogy Payments

To address issues on the Trilogy project that could represent opportunities 

for recovery of costs, we recommend that the Administrator of General 

Services, in coordination with the Director of FBI:

• Confirm SAIC’s informal Extended Work Week policy and work with 

SAIC to determine and resolve any overpaid amounts.

• Further investigate whether DynIS’ labor rates exceeded ceiling rates 

and pursue recovery of any amounts determined to have been overpaid.

• Determine whether other contractor costs identified as questionable in 

this report should be reimbursed to FBI by contractors. 

• Consider engaging an independent third party to conduct follow-up 

audit work on contractor billings, particularly areas of vulnerability 

identified in this report. 

To improve FBI’s accountability for purchased assets, we recommend that 

the Director of FBI instruct the Chief Financial Officer to:

• Establish policies and procedures so that (1) purchase orders are 

sufficiently detailed so that they can be used to verify receipt of 

equipment at FBI sites, and (2) contractor invoices are formatted to tie 

directly to purchase orders and facilitate easy identification of 

equipment received at each FBI site.

• Reinforce existing policies and procedures so that when assets are 

delivered to FBI sites, they are verified against purchase orders and 

receiving reports. Copies of these documents should be forwarded to 

FBI officials responsible for reviewing invoices as support for payment.

• Establish policies and procedures so that invoices are paid only after all 

verified purchase order and receipt documentation has been received by 

FBI payment officials and reconciled to the invoice package.

• Establish a policy to require that, upon receipt of property at FBI sites, 

FBI personnel immediately identify all accountable assets and affix bar 

codes to them.

• Revise FBI’s policies and procedures to require that all bar codes are 

centrally issued and tracked through periodic reconciliation of bar 

codes issued to those used and remaining available. Assigned bar codes 
Page 45 GAO-06-306 FBI Trilogy Payments

should also be noted on a copy of the receiving report and forwarded to 

FBI’s Property Management Unit.

• Revise FBI policies and procedures to require that accountable assets 

be entered into PMA immediately upon receipt rather than within the 

current 30-day time frame. 

• Require officials inputting data into PMA to enter (1) the actual 

purchase order number related to each accountable equipment item 

bought, (2) asset descriptions that are consistent with the purchase 

order description, and (3) the physical location of the property.

• Establish policies and procedures related to the documentation of 

rejected or returned equipment so that the (1) equipment that is rejected 

immediately upon delivery is notated on the receiving report that is 

forwarded to FBI officials responsible for invoice payment; and (2) 

equipment that is returned after being accepted at an FBI site (e.g., 

items returned due to defect), is annotated in PMA, including the serial 

number and location of any replacement equipment, under the 

appropriate purchase order number.

• Reassess overall physical inventory procedures so that all accountable 

assets are properly inventoried and captured in the PMA system and 

that all unlocated assets are promptly investigated.

• Expand the next planned physical inventory to include steps to verify 

the accuracy of asset identification information included in PMA.

• Establish an internal review mechanism to periodically spot check 

whether the steps listed above—including verifications of purchase 

orders and receiving reports against received equipment, immediate 

identification and bar coding of accountable assets, maintenance of 

accurate asset listings, prompt entry of assets into PMA, documentation 

of rejected and returned equipment, and improved bar coding and 

inventory procedures—are being carried out.

• Investigate all missing, lost, and stolen assets identified in this report to 

(1) determine whether any confidential or sensitive information and 

data may be exposed to unauthorized users; and (2) identify any 

patterns related to the equipment (e.g., by location, property custodian, 

etc.) that necessitates a change in FBI policies and procedures, such as 

assignment of new property custodians or additional training.
Page 46 GAO-06-306 FBI Trilogy Payments

Agency Comments and 

Our Evaluation

In written comments reprinted in appendix III, FBI stated that it concurred 

with our recommendations and that it has made and continues to make 

significant structural and procedural changes to address our 

recommendations, taking critical steps to strengthen internal controls. FBI 

also provided additional information related to Trilogy assets we identified 

as missing. In written comments reprinted in appendix IV, GSA stated that 

it accepted our recommendations, did not believe that 1 of them was 

needed, and described some of the improvements to its internal controls 

and other business process changes already implemented. GSA also 

expressed concern with some of our observations and conclusions related 

to the invoice review and approval process and our analysis of airfare 

costs. FBI and GSA also provided technical comments, which we have 

incorporated as appropriate.

In its comments, FBI stated that executive management at FBI has directed 

a sustained effort to address and correct weaknesses identified in our 

report and other Trilogy reviews. FBI further stated that attention is being 

focused on four areas: (1) audit capability, (2) property management, 

(3) contracting services, and (4) IT investments. If properly implemented, 

the activities outlined in FBI’s letter should help improve FBI 

accountability for future IT acquisitions and other contract services. In this 

regard, vigilant oversight will be needed to ensure controls are correctly 

designed and operating effectively to protect assets and prevent improper 

payments. 

Further, in its comments, FBI stated that more than 44,000 pieces of 

accountable property were successfully deployed and tracked in the FBI’s 

PMA during the Trilogy project. FBI also stated that the 1,404 items we 

initially reported as missing or improperly documented represented 

approximately 3 percent of the accountable assets. We question both of 

these statements. Because of the control weaknesses discussed in our 

report, FBI does not have a reliable basis to know the number of Trilogy 

assets it purchased or how many should have been tracked as accountable 

assets. Further, since we did not test all the assets purchased, more may be 

missing.

FBI also stated that as of January 2006, it had accounted for more than 

1,000 of the 1,404 items we reported as missing or improperly documented. 

During our agency comment period, FBI indicated that it found 237 items 

we previously identified as missing and provided evidence, not made 

available during our audit, to sufficiently account for 199 of these items. 
Page 47 GAO-06-306 FBI Trilogy Payments

We adjusted the missing assets listing in our report to reflect 1,205 (1,404 – 

199) assets as still missing. In February 2006, FBI informed us that the 

approximately 800 remaining items noted in its official agency response 

included (1) accountable assets not in PMA because they were either 

incorrectly identified as nonaccountable assets or mistakenly omitted, 

(2) defective accountable assets that were never recorded in PMA and 

subsequently replaced, and (3) nonaccountable assets or components of 

accountable assets that were incorrectly bar coded. 

We considered these same issues during our audit and attempted to 

determine their impact. For example, as stated in our report, FBI told us 

that components of some nonaccountable assets that were part of a larger 

accountable item may have been mistakenly bar coded. Using FBI 

guidance on accountable property, we determined that 103 or about 11 

percent of the 926 missing assets purchased by CSC may have represented 

nonaccountable components. Because FBI could not provide us with the 

location information, we could not definitively determine whether the 

items were accountable assets or not. During the course of our audit, FBI 

was not able to provide us with any evidence to support their other 

statements regarding the reasons the assets could not be located. While we 

are encouraged by FBI’s current efforts to account for these assets, its 

ability to definitively determine their existence has been compromised by 

the numerous control weaknesses identified in our report. Further, the fact 

that assets have not been properly accounted for to date means that they 

have been at risk of loss or misappropriation without detection since being 

delivered to FBI—in some cases for several years.

While GSA said it accepted all of our recommendations, it expressed 

reservations regarding our recommendation that GSA should clearly reflect 

appropriate FAR travel cost requirements in future contracts. GSA stated in 

its comment letter that it believed that the requirements outlined in the 

applicable FAR section 31.205-46 and stipulated in the task orders were 

more than adequate. In a subsequent conversation, we asked the GSA 

contracting officer why the language in the CSC and SAIC task orders and 

the Mitretek contract, which stated that long-distance travel would be 

reimbursed to the extent allowable pursuant to the JTR, was considered 

appropriate by GSA. The GSA contracting officer stated that, while not 

specified in the contract language, the reference to the JTR related only to 

per diem rates and allowances when determining the reasonableness of the 

travel costs, such as lodging and mileage reimbursements. She further 

stated that the FAR would apply to all other travel reimbursement 

determinations.
Page 48 GAO-06-306 FBI Trilogy Payments

We do not agree that our recommendation is unnecessary. In our view, the 

references to the JTR create ambiguity. The FAR cost allowability clause 

52.216-7 states that when determining allowability, in addition to FAR cost 

principles, the terms of the contract also apply. Therefore, the reference to 

the allowability under the JTR could have caused confusion with the 

contractors regarding what long-distance travel costs were allowed, 

including airfare costs. We continue to believe that the task orders should 

have more clearly described the applicable travel requirements.

Regarding the invoice review and approval process, GSA stated that each 

member of the review team—FBI, GSA, and Mitretek—played a unique and 

mutually understood role. In particular, GSA stated that Mitretek’s role in 

the invoice review and approval process was significant and that it was 

reasonable for GSA to have relied on input from FBI, via Mitretek, in 

approving invoices for payment. GSA also referred to procedures to 

preapprove ODC and equipment purchases. Further, GSA stated that it 

believed that the procedures to process invoices were generally sound and 

that contractors are required to maintain records to adequately 

demonstrate that costs claimed have been incurred, and are reasonable, 

allowable, and allocable. GSA also stated that it will have DCAA audit the 

contract costs to determine if any costs are unallowable, unreasonable, or 

unallocable and will use the audit results as a basis to pursue remedies to 

recoup funds and assess penalties as may be applicable.

We disagree with GSA regarding review team roles and the review process. 

Based on discussions with members of the review team, our review of 

supporting documentation, and our assessment of the outcomes of the 

review process, it is clear that the invoice review and approval process was 

inadequate. The roles and responsibilities of the review team members 

were not clearly defined or documented and this led to confusion among 

the review team members about each member’s role. Regarding Mitretek’s 

role, Mitretek officials stated that they performed a limited review of only 

labor invoices. Before relying on others, GSA should have verified its 

understanding of each member’s roles and responsibilities and confirmed 

that the appropriate functions were being performed. In addition, while 

there were procedures to preapprove ODC and equipment purchases, the 

review team did not effectively link the preapproval and the invoice review 

and approval processes, especially in relation to CSC, in part because CSC 

invoices lacked detailed information needed to verify that charges billed 

were in fact preapproved.
Page 49 GAO-06-306 FBI Trilogy Payments

Further, while contractors are required to maintain records to adequately 

support costs, we found that the review team generally did not request 

additional documentation such as travel vouchers or subcontractor 

invoices to support amounts billed. If the review team had a systematic 

process in place to review costs, it may have questioned some of the 

excessive airfare we identified and found, as we did, that CSC lacked 

documentation to adequately support subcontractor charges. It is a 

management function and sound business practice to have a process in 

place to ensure that contractors have such documentation. Having such 

processes and questioning amounts billed would also allow for corrective 

measures to be implemented as, and if, problems were found. In addition, 

while we agree that a DCAA audit of contract costs can provide a detective 

control to help determine whether contractor costs were proper, reliance 

on an after-the-fact audit is not an acceptable replacement for the type of 

real-time monitoring and oversight of contractor costs—preventative 

controls—we recommend in this report. Further, a DCAA audit of civilian 

contractor costs is not automatic and would require an additional cost to 

the government to procure. The review team largely operated in an 

environment of trust without an adequate basis for knowing whether the 

contractor billings were reasonable and costs claimed were allowable. 

Effective internal control calls for a sound, on-going invoice review and 

approval process as the first line of defense in preventing unallowable 

costs.

Regarding our analysis of travel costs, GSA stated that our conclusions did 

not account for the ever-changing travel schedules and itineraries 

necessitated by changes in FBI requirements. GSA also stated that a 

hypothetical standard coach-class ticket does not provide a benchmark to 

make a valid price comparison, even if adjusted for inflation, because the 

airline travel industry has had significant changes with respect to pricing of 

airline tickets. GSA also stated that they believe it is impossible at this date 

to look back over 5 years and estimate what may have been a reasonable 

airfare price. 

We disagree. Our analysis and conclusions related to travel did take into 

account the possible conditions that could justify airfare costs in excess of 

the lowest customary coach-class fare. The FAR requires supporting 

documentation for first-class and other excessive airfare costs of the 

nature we identified to justify the higher airfare costs. No such 

documentation was provided to us to justify the excessive costs we 

identified. To estimate the cost of the coach-class tickets, we assumed that 

tickets were purchased 3 days in advance (which was the average based on 
Page 50 GAO-06-306 FBI Trilogy Payments

the trips we reviewed) and did not include a Saturday night stay over. 

Specifically, we (1) used the Web sites of the airlines used by each traveler, 

(2) searched for standard fully-refundable55 coach-class tickets with the 

same destinations, (3) calculated an average cost based on the lowest and 

highest ticket prices available at the time of our search, and (4) adjusted 

the average cost for inflation applicable to airfare. We believe that this 

approach, which closely approximated what travelers were doing at that 

time, resulted in reasonable estimates as to how much the travel should 

have cost. We also believe that adjusting current fares for inflation 

applicable to airfare results in a reasonable benchmark to compare to 

historical prices, since it does take into account price changes as a result of 

changes in the airline industry, including the effects of competition. Lastly, 

we fully agree with GSA that the passage of time makes it difficult to 

determine historical airfare costs, which is another reason that costs 

should be reviewed real time instead of as part of an after-the-fact audit. An 

after-the-fact analysis is no substitute for the contemporaneous monitoring 

and oversight that we recommend in this report. 

More specific discussions are provided following GSA’s comments, which 

are reprinted in appendix IV. 

As agreed with your offices, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days from its 

date. At that time, we will send copies of this report to the Director of the 

FBI, the Acting Administrator of GSA, and interested congressional 

committees. Copies will also be made available to others upon request. In 

addition, the report will be available at no charge on the GAO Web site at 

http://www.gao.gov.

If you or your staffs have any questions about this report, please contact 

me at (202) 512-9508 or calboml@gao.gov. Contact points for our offices of 

Congressional Relations and Public Affairs may be found on the last page 

55 In two instances, we searched for restricted tickets, because the original tickets billed by 

Mitretek were nonrefundable.
Page 51 GAO-06-306 FBI Trilogy Payments

of this report. Major contributors to this report are acknowledged in 

appendix V.

Linda M. Calbom

Director, Financial Management 

and Assurance
Page 52 GAO-06-306 FBI Trilogy Payments

Appendix I

Key Trilogy Milestones AAppenednxidexiIs

The Federal Bureau of Investigation’s (FBI) Trilogy project experienced 

several delays, as shown in figure 4. 

Figure 4: Key Trilogy Milestones 

IPC/TNC events UAC/VCF events

Source: GAO analysis of various Trilogy reports and discussions with FBI and GSA officials.

2001

2002

2003

2004

2005

Task order awarded to DynCorp 5/01 6/01 Task order awarded to SAIC

1/02 VCF concept initiated

12/03 Initial VCF delivered

1/04 FBI rejects VCF based on 17 deficiencies

UAC task order modified to obtain only the initial operating 

capabilities of the VCF by December 2004

7/04

6/04 Original target completion date

12/04 SAIC delivers VCF initial operating capabilities

DOJ/OIG reports that VCF is not yet fully functional and does not 

provide the case management capability to replace the old system

2/05

1/05 FBI begins 90-day pilot of VCF initial operating capabilities

VCF pilot ends and FBI announces plans to develop a

new electronic information management system initiative, 

referred to as Sentinel

3/05

8/05 FBI releases solicitation for Sentinel proposals

Completion date accelerated from May 2004 to June 2003 10/01

Completion date moved from June 2003 to July 2002 1/02

Completion date slips from July to October 2002 and then 

to March 2003

10/02

DynCorp acquired by CSC 3/03

TNC completed 3/03

IPC completion date moved from March to November 2003 4/03

IPC November deadline missed; new completion date 

moved to April 2004

1/04

 TNC/IPC deployment completed 4/04

Original target completion date 5/04

Target completion date for the first VCF deliverable moved 

to December 2003; the due date for subsequent 

deliverables continued to be June 2004

7/02
Page 53 GAO-06-306 FBI Trilogy Payments

Appendix II

Scope and Methodology ApendxiI

To determine whether the Federal Bureau of Investigation’s (FBI) internal 

controls provided reasonable assurance that improper payments to 

contractors would not be made or would be detected in the normal course 

of business, we used the Standards for Internal Control in the Federal 

Government, Guide for Evaluating and Testing Controls Over Sensitive 

Payments, and The Executive Guide on Strategies to Manage Improper 

Payments: Learning from Public and Private Sector Organizations as a 

basis for assessing FBI’s internal control structure over its Trilogy program. 

We also reviewed our prior reports, as well as those by the Department of 

Justice’s Office of Inspector General on Trilogy issues; Trilogy contracts 

and interagency agreements; and contractor invoices and other 

documentation supporting goods provided and services rendered. In 

addition, we conducted interviews with officials from FBI, the General 

Services Administration, the Department of the Interior, and the 

contractors, and performed walkthroughs to gain an understanding of the 

processes used to review and approve invoices.

Validity of Payments To determine whether FBI’s payments to contractors were properly 

supported as a valid use of government funds, we performed data mining, 

document analysis, and other forensic auditing techniques to select 

transactions to test. We reviewed documentation maintained by the review 

team, contractors, or subcontractors to assess the allowability of costs 

based on Trilogy contract documents and applicable federal regulations, 

such as the Federal Acquisition Regulation, Federal Travel Regulation, 

and Joint Travel Regulations. While we identified some payments for 

questionable costs, our work was not designed to identify all questionable 

payments or to estimate their extent. The following provides more details 

on our testing of payments to FBI’s contractors—Science Applications 

International Corporation (SAIC), Computer Sciences Corporation (CSC), 

and Mitretek—for labor, subcontractor labor, travel, and other direct costs 

(ODC).

Payments to SAIC • To test payments for labor costs, we obtained from SAIC a database of 

hours charged to the Trilogy project by employee and pay period. Using 

this database and labor invoice detail, we selected 21 employees based 

on either (1) a high number of hours worked, (2) a high dollar amount 

billed, or (3) billing in more than one labor category. For these 21 

employees, to test the labor rates billed, we compared rates billed to 

salary information. In addition, for subsets of these 21 employees, we 
Appendix II

Scope and Methodology

Page 54 GAO-06-306 FBI Trilogy Payments

compared the hours billed to hours reported in SAIC’s labor database 

and tested the mathematical accuracy of the labor costs billed. To 

determine the reasonableness of extended work week (EWW) hours 

charged to the Trilogy project, using the database we analyzed the total, 

EWW, and uncompensated hours charged by employee. We also 

compared the average fully burdened labor rates charged to ceiling rates 

to determine whether the rates were below the ceilings. 

• To test payments for subcontractor labor costs, we obtained from SAIC 

a database of all subcontractor labor charges. In order to determine 

whether the database was complete, we verified that the database 

reconciled with SAIC’s subcontractor billings. We then selected 

subcontractor invoices to review based on a high dollar amount billed or 

unusual billing patterns. We analyzed supporting documentation such as 

subcontractor invoices and time sheets from SAIC for about $17.2 

million, or 37 percent, of payments for SAIC subcontractor labor.

• To test payments for travel costs, using detail included in SAIC’s travel 

invoices and copies of travel authorizations provided by SAIC, we 

selected transactions to review based on (1) high airfare costs, (2) 

actual costs that exceeded authorized amounts, and (3) unusual billing 

patterns. We analyzed supporting documentation, such as travel 

vouchers, receipts, and subcontractor invoices, from SAIC for about 

$154,000, or 45 percent, of payments for SAIC travel costs.

• To test payments for ODC, using detail included in SAIC’s ODC invoices, 

we selected transactions with unusually large amounts within a 

category or with an unusual category description. We analyzed 

supporting documentation, such as invoices or other documentation, 

from SAIC for about $307,000, or 61 percent, of payments for SAIC ODC. 

Payments to CSC Because CSC was unable to readily provide us transaction-level detail for 

all labor, travel, and ODC charges, we selected 11 invoices based on the 

amounts billed and the time periods covered. CSC was able to provide us 

transaction-level detail for these 11 invoices, which represented $14.7 

million or about 33 percent of labor costs;1

 $3.1 million or about 33 percent 

of travel costs; and $2.4 million or about 27 percent of ODC charges. Using 

1

 For purposes of our payment testing, CSC labor costs included DynIS labor.
Appendix II

Scope and Methodology

Page 55 GAO-06-306 FBI Trilogy Payments

these 11 invoices as our data source we performed the following tests of 

CSC labor, travel, and ODC.

• We recalculated the total labor charged for three labor categories in 7 of 

the 11 invoices to verify that the invoice amounts were calculated 

correctly.2

 We also selected 11 employees based on either (1) high 

number of hours worked, (2) a high dollar amount billed, or (3) billing in 

more than one labor category. For these 11 employees, we compared the 

hours billed to time sheets and verified hourly rates by reviewing each 

employee’s salary history. In total, the 11 selected employees billed 

around $850,000 on the 11 invoices we reviewed. We tested the 

reliability of the detail provided by comparing the hours and amounts to 

labor invoices. We compared the average fully burdened rates charged 

to ceiling rates. 

• We selected travel charges that were high in amount or exhibited 

unusual billing patterns. We reviewed travel vouchers for these selected 

charges. Because we identified possible first-class and unusual coachclass travel in these selections, we obtained and reviewed additional 

supporting documentation for CSC-purchased airline tickets beyond the 

initial 11 invoices selected for review. 

• We selected ODC transactions with unusually large amounts within a 

category or in an unusual category (such as computer hardware). 

Because of anomalies we identified in our initial review, we selected 

additional transactions to review beyond the initial 11 invoices. In total, 

we analyzed supporting documentation for about $7.0 million, or about 

80 percent, of payments for CSC ODC during the Trilogy project.

• To test payments for subcontractor labor costs, we obtained from CSC 

transaction-level detail for 12 of its subcontractors during the Trilogy 

project. From the transaction-level detail, we selected charges to review 

based on (1) high number of hours worked, (2) a high amount billed, and 

(3) other unusual billing patterns. We obtained and analyzed supporting 

documentation, such as subcontractor invoices, from CSC for about $3.3 

2

 Because CSC was slow in providing the transaction-level detail for the labor invoices, we 

recalculated invoice amounts for 7 of the 11 invoices. Because we found no significant 

issues, we did not test the remaining 4 invoices.
Appendix II

Scope and Methodology

Page 56 GAO-06-306 FBI Trilogy Payments

million, or 4 percent, of the $75 million charged by CSC as subcontractor 

labor costs during the Trilogy project.3

Payments to Mitretek • To test payments for labor costs, we obtained transaction detail for 

three labor invoices, which represented $1.5 million or 8 percent of the 

payments for Mitretek labor. We tested the mechanical accuracy of the 

invoice calculation and selected one of the invoices and verified hours 

billed compared to time cards and hourly rates charged compared to 

salary histories.

• To test payments for travel costs, we obtained and analyzed the 

supporting documentation, such as travel vouchers, for all travel costs 

on two invoices. These invoices represented $11,211 or about 13 percent 

of payments to Mitretek for travel costs.

• To test payments for ODC,4 we obtained and analyzed the supporting 

documentation, such as invoices and receipts, for all ODC costs on two 

invoices. These invoices represented $139,083 or about 8 percent of 

payments to Mitretek for ODC.

FBI’s Asset 

Accountability

To determine whether FBI maintained proper accountability for assets 

purchased with Trilogy project funds, we used our Standards for Internal 

Control as a basis to assess FBI’s control structure over its Trilogy assets. 

We interviewed FBI, contractor, and subcontractor staff to identify and 

assess the controls in place over the ordering, purchasing, and receipt of 

Trilogy equipment. The following provides more details on our testing of 

Trilogy equipment purchased for FBI by CSC and SAIC, or directly by FBI: 

• To determine whether FBI approved for purchase all assets acquired for 

the Trilogy project, we obtained FBI consents to purchase, Bills of 

Material, and invoices and compared the total assets approved to be 

purchased to assets actually purchased.

3

 For purposes of our payment testing, DynIS labor costs were not included in our review of 

subcontractor labor costs.

4

 Mitretek’s ODC included consultant costs.
Appendix II

Scope and Methodology

Page 57 GAO-06-306 FBI Trilogy Payments

• To determine whether FBI Trilogy accountable assets listed in PMA 

were recorded in a timely manner, we obtained documentation from FBI 

and contractors for accountable assets purchased by CSC that identified 

the bar codes assigned to accountable assets and the date the equipment 

was received by FBI. We did not perform this test for SAIC-purchased 

assets because the assets represented only .8 percent of the total assets 

purchased with Trilogy funds. We also did not perform this test for FBI 

direct purchases since the supporting documentation did not provide 

bar codes or serial numbers for individual assets. We compared the bar 

codes on the listings to FBI’s Property Management Application (PMA) 

which included the date the asset was entered into PMA. 

• To assess the accuracy and completeness of the FBI-prepared listings of 

CSC- and SAIC-purchased assets, we (1) analyzed the listings to identify 

any irregularities such as duplicate bar codes or missing information; (2) 

obtained the CSC equipment invoices and compared the total number of 

pieces billed on the CSC invoices for four selected accountable asset 

types that represented about 76 percent of the total CSC assets 

purchased to FBI’s listing; and (3) obtained the SAIC listings of Trilogy 

equipment returned to FBI, SAIC’s equipment invoices, and FBI’s listing 

of VCF assets and compared for each item the amount of equipment per 

the invoices to the SAIC listing and then to FBI’s VCF listing. 

• To determine whether FBI had in its possession all accountable assets 

purchased for it by CSC and SAIC, we compared the complete listing of 

bar codes from FBI’s VCF and CSC listings to PMA to identify any bar 

codes not recorded in PMA.

• To test the accuracy of the data included in the PMA accountable asset 

records, we compared the data for each accountable asset, such as bar 

code number, serial number, asset description, and asset location, to 

FBI’s listing and followed up on any discrepancies.

• To identify Trilogy assets that had been reported as lost or stolen by FBI, 

we obtained a listing of all assets identified as lost or stolen by FBI 

during its annual inventories for years 2003, 2004, and 2005. We then 

compared this listing, by bar code, to FBI’s CSC and VCF equipment 

listings to determine which of these assets had been acquired for the 

Trilogy project.

The scope of our review covered all assets purchased from the inception of 

the Trilogy contracts (May 2001) through December 2004 and included 
Appendix II

Scope and Methodology

Page 58 GAO-06-306 FBI Trilogy Payments

Trilogy assets that were either purchased directly by FBI or by one of the 

two primary Trilogy contractors, CSC and SAIC.

We provided FBI a draft of this report and GSA a draft of applicable 

sections of this report for review and comment. The FBI Finance Division 

Acting Assistant Director and General Services Acting Administrator 

provided written comments, which are reprinted in appendixes III and IV, 

respectively. FBI and GSA also provided technical comments, which we 

have incorporated as appropriate. We also discussed with Trilogy 

contractors any findings that related to them. We performed our work in 

accordance with generally accepted government auditing standards in 

Washington, D.C. and at two FBI field sites and various other GSA and 

contractor locations in Virginia from May 2004 through December 2005. 
Page 59 GAO-06-306 FBI Trilogy Payments

Appendix III

Comments from the Federal Bureau of 

Investigation ApendxiI
Appendix III

Comments from the Federal Bureau of 

Investigation

Page 60 GAO-06-306 FBI Trilogy Payments
Appendix III

Comments from the Federal Bureau of 

Investigation

Page 61 GAO-06-306 FBI Trilogy Payments
Page 62 GAO-06-306 FBI Trilogy Payments

Appendix IV

Comments from the General Services 

Administration ApendxiIV

Note: GAO comments 

supplementing those in 

the report text appear 

at the end of this 

appendix.

Note: GAO comments 

supplementing those in 

the report text appear 

at the end of this 

appendix.
Appendix IV

Comments from the General Services 

Administration

Page 63 GAO-06-306 FBI Trilogy Payments
Appendix IV

Comments from the General Services 

Administration

Page 64 GAO-06-306 FBI Trilogy Payments

See comment 1.
Appendix IV

Comments from the General Services 

Administration

Page 65 GAO-06-306 FBI Trilogy Payments

See comment 2.

See comment 2.
Appendix IV

Comments from the General Services 

Administration

Page 66 GAO-06-306 FBI Trilogy Payments
Appendix IV

Comments from the General Services 

Administration

Page 67 GAO-06-306 FBI Trilogy Payments

See comment 2.

See comment 2.

See comment 3.

See comment 2.
Appendix IV

Comments from the General Services 

Administration

Page 68 GAO-06-306 FBI Trilogy Payments

See comment 3.

See comment 4.
Appendix IV

Comments from the General Services 

Administration

Page 69 GAO-06-306 FBI Trilogy Payments

See comment 2.

See comment 5.

See comment 2.
Appendix IV

Comments from the General Services 

Administration

Page 70 GAO-06-306 FBI Trilogy Payments

See comment 6.

See comments 2 and 7.

See comment 4.

See comment 2.

See comments 2 and 8.

See comment 9.
Appendix IV

Comments from the General Services 

Administration

Page 71 GAO-06-306 FBI Trilogy Payments

See comment 10.

See comments 2 and 11.

See comment 2.

See comment 2.
Appendix IV

Comments from the General Services 

Administration

Page 72 GAO-06-306 FBI Trilogy Payments

See comments 12 and 13.
Appendix IV

Comments from the General Services 

Administration

Page 73 GAO-06-306 FBI Trilogy Payments

See comment 14.

See comment 15.

See comment 16.
Appendix IV

Comments from the General Services 

Administration

Page 74 GAO-06-306 FBI Trilogy Payments
Appendix IV

Comments from the General Services 

Administration

Page 75 GAO-06-306 FBI Trilogy Payments
Appendix IV

Comments from the General Services 

Administration

Page 76 GAO-06-306 FBI Trilogy Payments

See comment 2.
Appendix IV

Comments from the General Services 

Administration

Page 77 GAO-06-306 FBI Trilogy Payments

See comment 2.
Appendix IV

Comments from the General Services 

Administration

Page 78 GAO-06-306 FBI Trilogy Payments
Appendix IV

Comments from the General Services 

Administration

Page 79 GAO-06-306 FBI Trilogy Payments

GAO Comments 1. We referred to the Department of Justice Office of Inspector General 

report only to provide background information related to previously 

reported issues with the Trilogy project.

2. See “Agency Comments and Our Evaluation” section.

3. Processing invoices timely as envisioned by the Prompt Payment Act 

does not lessen the government’s responsibility to verify costs billed by 

contractors. It is conceivable that the essential validation work could 

have been performed immediately after payment and any adjustments 

to correct prior billing errors could have been made to future invoices. 

4. No documentation of any such inquiries was provided to support the 

General Services Administration’s (GSA) comment. Documenting such 

inquiries allows a subsequent reviewer to draw similar conclusions and 

would be beneficial to any subsequent audit, including by the Defense 

Contract Audit Agency (DCAA).

5. Contrary to GSA’s comment, the review team—Federal Bureau of 

Investigation (FBI), GSA, and Mitretek—approved CSC’s invoices that 

lacked information required by its task order, including employee 

billing rates and detail for subcontractor labor. We were not provided 

documentation indicating that any Computer Sciences Corporation 

(CSC) invoice had been rejected.

6. While the review team compared billed labor rates against Millennia 

ceiling rates for certain labor costs, it did not evaluate labor rates 

compared to ceiling rates for subcontractor labor, which represented 

about $163 million of Trilogy costs. Had the review team reviewed labor 

charges more thoroughly, it may have identified the potential 

overcharging of labor rates discussed in this report related to DynCorp 

Information Systems (DynIS). 

7. According to the Federal Acquisition Regulation (FAR), it is the 

contractor’s responsibility to maintain supporting documentation for 

costs billed, including subcontractor labor costs. 

8. Based on our discussion with on-site members of the review team, CSC 

travel vouchers were not obtained to review amounts billed on travel 

invoices. Had the vouchers been reviewed, the review team would have 
Appendix IV

Comments from the General Services 

Administration

Page 80 GAO-06-306 FBI Trilogy Payments

had a basis for questioning the first-class and excessive airfare costs we 

identified.

9. The travel administrator’s obligation to obtain the best fare does not 

relieve the government of its responsibility to review travel costs. In 

addition, we noted instances where the itinerary from the travel 

administrator indicated that a full-fare ticket was obtained at the 

traveler’s request, even though the ticket cost more than twice as much 

as the lowest logical fare that was also noted on the itinerary. 

10. The approval process discussed by GSA relates to the travel 

authorization, which was the request to travel. We found that the 

review team lacked an adequate process to review travel vouchers that 

include the traveler’s receipts to confirm that the authorized trips were 

taken and that the costs were in accordance with applicable travel 

regulations. Also see comments 8 and 9.

11. The next sentence of the relevant section of the FAR cited by GSA 

states, “However, in order for airfare costs in excess of the above 

standard airfare to be allowable, the applicable condition(s) set forth 

above must be documented and justified.” No such documentation was 

provided to us for any of the first class or other excessive airfares we 

identified.

12. Our report stated that other direct costs (ODC) were paid without 

validation of the actual amounts included in the invoices and that the 

review team relied on the contractors to obtain purchase orders for 

ODC charges. It further stated that neither GSA, FBI, nor Mitretek 

performed procedures to ensure that equipment billed by the 

contractors was actually received before payment.

13. CSC ODC invoices lacked sufficient detail to validate amounts billed 

compared to what was approved and we were not provided 

documentation indicating that such information was requested by the 

review team. Further, the CSC invoices did not include the detail 

necessary for the review team to specifically identify the items 

purchased. We also found that some assets were paid for before they 

were received and that the FBI did not perform an overall 

reconciliation of total assets ordered and paid for to those received. 
Appendix IV

Comments from the General Services 

Administration

Page 81 GAO-06-306 FBI Trilogy Payments

14. A GSA contracting officer representative told us that he was aware of 

the informal extended work week policy agreement, but could not 

provide documentation of the policy. 

15. Our report stated that DynIS charged labor rates that may have 

exceeded rates that GSA asserts were established ceiling rates 

pursuant to the task order. 

16. Based on GSA’s acceptance of our recommendations on page 1 of its 

comments, we assume that the intent was to state that “GSA accepts 

each of GAO’s recommendations.”
Page 82 GAO-06-306 FBI Trilogy Payments

Appendix V

GAO Contacts and Staff Acknowledgments ApendxiV

GAO Contacts Linda Calbom, (202) 512-9508, or calboml@gao.gov

Acknowledgments Staff members who made key contributions to this report include Steven 

Haughton (Assistant Director), Marie Ahearn, Brooks Bare, Ed Brown, 

Marcia Carlsen, Richard Cambosos, Lisa Crye, Tyshawn Davis, Bonnie 

Derby, Abe Dymond, Lori Ryza, Kara Scott, Brooke Whittaker, and Matt 

Wood.

(190140) 
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