U.S. DEPARTMENT OF COMMERCE 

Office of Inspector General   

National 

Telecommunications 

and 

Information Administration 

NTIA Must Continue to Improve its 

Program Management and 

Pre-Award Process 

for its Broadband Grants Program 

Final Report No. ARR-19842-1 

April 2010 

Office of Audit and Evaluation 
UNITED STATES DEPARTMENT OF COMMERCE

The Inspector General

Washington, D.C. 20230

APRIL 8, 2010

MEMORANDUM FOR: Lawrence E. Strickling

Assistant Secretary for

Communications and Information

'('~1·~~-- FROM: Todd 1. Zinser

SUBJECT: NTIA Must Continue to Improve its Proaram Ivlanagement and

Pre-Award Processesfor the Broadband Technology

Opportunities Program

Final Report No. ARR-19842

We are providing you with our final report on our review of the National Telecommunications

and Information Administration's (NTIA) efforts to implement an effective program office and a

fair and effective pre-award process for the Broadband Technology Opportunities Program

(BTOP).

We discussed our find ings wi th you on January 6, 2010 and provided you wi th a draft report on

March 12. We found that NTIA needs to take prompt actions to improve the management and

pre-award processes to assure that grant awards are made by the statutory deadline of September

30,2010. While NTIA has taken a number ofsteps to address these issues, including obtaining

additional personnel to support the BTOP team, strengthening the documentation supporting its

decision making, and implementing system enhancements to facilitate application processing

additional effol1s are needed.

Your ApriI 1, 2010, response to our draft report notes that NTIA is taki ng appropriate action and

has already begun to address recommendations in the report. We summarize the response in our

report and have included it in its entirety as appendix B.

Please provide us with an action plan that responds to all of the report recommendations within

60 days from the date of this memorandum. Please also accept our thanks to the BTOP team for

the courtesies shown to us during our fieldwork. If you have any questions, please contact Ann

Eilers at (202) 482-4328 or Clu'is Rose at (202) 482-5558.
Report In Brie

U.S. Department of Commerce Office of Inspector General 

f 

April 2010 

American Recovery and Reinvestment Act 

NTIA Must Continue to Improve its Program Management 

and Pre-Award Processes for BTOP (ARR-19842) 

Why We Did this Review 

Background 

On February 17, 2009, the President

signed the American Recovery and 

Reinvestment Act of 2009 into law. 

The Recovery Act gives $7.2 billion, which must be awarded before

-

-

d 

y 

e

te

as

September 30, 2010, to NTIA and

the Department of Agriculture’s 

Rural Utilities Service to expand 

broadband services in the United 

States. 

Of the $7.2 billion to be awarded, 

$4.7 billion was provided to NTIA

to establish BTOP, which is a com

petitive grant program intended to

provide funds for deploying broad

band infrastructure in unserved an

underserved areas of the United 

States, enhance broadband capacit

at public computer centers, improv

access to broadband services for 

public safety agencies, and promo

sustainable broadband adoption 

projects. The first round of grant 

awards is to be completed in April

2010; the second and final round h

already begun. 

The Broadband Technology Opportunities Program (BTOP) is 

the largest grant program that the 

National Telecommunications and 

Information Administration (NTIA

P, 

be

)

r

has managed to date. With BTO

NTIA has had to confront a num

of challenges, including staffing a 

program office, developing rules 

and regulations, coordinating development activities with other departments and agencies, awarding 

grants, and performing effective 

oversight of activities – all while 

limiting expenditures to 3 percent 

of the program appropriation. 

We have been proactive in our 

oversight of BTOP, including 

providing guidance to NTIA on 

the importance of establishing 

appropriate internal controls. As 

part of our oversight, we initiated 

this review of BTOP in September 

2009. 

What We Found 

NTIA is entering its second round of funding broadband grant awards. While NTIA has made 

significant strides in implementing BTOP (developing a program office, issuing its first Notice 

of Funds Availability, reviewing more than 1,800 submitted applications, and announcing its 

initial awards) it is essential that NTIA apply the lessons it learned from the first funding round 

to promptly address any problems that may arise. We found that 

1. BTOP’s size and complexity have presented NTIA with significant challenges. NTIA’s program staffing levels appear to be insufficient to simultaneously perform the necessary firstand second-round award activities. The office must rely heavily on a few key individuals 

and personnel from other agencies to carry out the program’s operations. 

2. NTIA’s inconsistent documentation of important information such as policies, procedures, 

staff roles, and key management decisions could lead to inefficiency and miscommunication. 

3. The first round of BTOP grant application processing exposed several problems with the 

online grant intake system, which affected efficiency and users’ experiences. 

4. A shortage of volunteer peer reviewers meant that application review for the first round was 

delayed. As NTIA manages the second-round process and handles post-award activities for 

first-round grant recipients, it must be careful to obtain enough reviewers for the workload. 

5. NTIA will need to closely monitor grantees during the post-award phase to ensure they are 

in compliance with the National Environmental Policy Act (NEPA). 

What We Recommended 

We made several recommendations to NTIA with the intention of improving internal controls, 

promoting transparency, and increasing efficiency. We presented our observations and suggestions to NTIA in January, and they have begun to put many of our recommendations in place. 

We recommended that NTIA 

• create a staffing plan that outlines the necessary resources to manage BTOP, and that makes 

provisions to adjust to the loss of key positions; 

• develop and implement policies and procedures that articulate key roles, responsibilities, 

and requirements for documentation; 

• have its in-house counsel document any program issues that arise and receive documented 

opinions from the Department of Commerce’s Office of General Counsel; 

• supplement the existing pool of reviewers to address unforeseen delays or other impacts 

that could affect the application review timeline; and 

• continue to develop monitoring procedures to identify, track, and assist recipients at risk of 

experiencing delays in completing post-award NEPA requirements. 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

Contents 

Introduction..................................................................................................................................... 1

Findings and Recommendations ..................................................................................................... 4

I.	 BTOP’s Size and Complexity Present NTIA with Significant Challenges ........................4 

II.	 NTIA Does Not Consistently Document Policies, Procedures, Staff Roles, and Key 

Management Decisions .....................................................................................................6 

III.	 NTIA Must Overcome the System Challenges It Faced in the First Round of Application 

Intake to Effectively Manage the Second Round...............................................................9 

IV.	 NTIA is Taking Steps to Avoid the Same Application Review Problems from the First 

Round; However, Challenges Could Continue ................................................................11 

V.	 Pre-award National Environmental Policy Act Analysis Facilitates Timely BTOP Project 

Completion; However, Close Post-Award Monitoring by NTIA Will Be Needed ..........12 

Summary of Agency Comments and OIG Response .................................................................... 13 

Glossary ........................................................................................................................................ 14 

Appendix A: Objectives, Scope, and Methodology...................................................................... 16 

Appendix B: Full Text of Agency’s Response ............................................................................. 17 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

Introduction 

On February 17, 2009, the President signed the American Recovery and Reinvestment Act of 

2009 into law. The Recovery Act gives the Department of Commerce’s National 

Telecommunications and Information Administration (NTIA) and the Department of 

Agriculture's Rural Utilities Service (RUS) $7.2 billion, which must be awarded before 

September 30, 2010, to expand broadband services in the United States. 

Of the $7.2 billion to be awarded, $4.7 billion was provided to NTIA to establish the Broadband 

Technology Opportunities Program (BTOP), which is a competitive grant program intended to 

provide funds for deploying broadband infrastructure in unserved and underserved areas of the 

United States, enhance broadband capacity at public computer centers, improve access to 

broadband services for public safety agencies, and promote sustainable broadband adoption 

projects. The remaining $2.5 billion was provided to the RUS’ Broadband Initiatives Program 

(BIP) to issue loans, grants, and loan/grant combinations to facilitate broadband deployment in 

rural areas. Figure 1 provides the breakdown of the allocated BTOP Recovery Act funds. 

Figure 1. Breakdown of BTOP appropriations 

PublicComputl,.. centers

No less .... SZOO M

Sllslalnable Broadband Adopllon

No lessthan $250 M

0I60vers1cht

$1OM

MnlnlsntlveExpenses

$141M

PublicComputl,.. centers

No less.... SZOO M

Saslalnable Broadband Adopdon

No lessthan $250

0I60vers1cht

$1OM

Funding for public computing centers (PCCs), sustainable broadband adoption (SBA) programs, OIG 

oversight, and broadband mapping are required by statute. Funding for infrastructure programs is flexible, 

with some of the $3.75 billion potentially going towards PCC and SBA programs. Also, broadband 

mapping funds are flexible, with some of the $350 million going to infrastructure, PCC, or SBA projects. 

1 
     

               

   

‐    

   

‐  

   

‐  

U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

BTOP Program Implementation Process 

BTOP is the largest grant program that NTIA has managed. With BTOP, NTIA has had to 

confront a number of challenges, including staffing a program office, developing grant program 

rules and regulations, coordinating development activities with other departments and agencies 

(such as the Department of Agriculture and the Federal Communications Commission), awarding 

grants, and performing effective oversight of activities – while limiting expenditures to 3 percent 

of the program appropriation ($141 million). NTIA is taking the following steps to implement 

BTOP: 

1. Creating the

BTOP program

office

2. Releasing the

first NOFA

3. Signing the

management

support contract

4. Completing

first round awards

and issuing

second round

NOFA

5. Completing

second round

award process

1.	 Creating the BTOP Program Office and Initial Planning (Spring 2009) – NTIA formed a 

program office with over 40 staff members to support BTOP and provided them with 

grants training. Before establishing program rules, the agency held seven joint public 

meetings with RUS and issued a request for information that resulted in more than 1,600 

comments from the public. The comments were considered in the development of the 

first Notice of Funds Availability (NOFA), which established program rules and 

availability of grant funds. NTIA also entered into several memorandums of 

understanding with various federal agencies to provide program support. 

2.	 Releasing the First NOFA (July 2009) and Continuing Program Planning – RUS and 

NTIA issued a joint NOFA to describe the availability of BIP and BTOP funds and set 

forth the application requirements for those entities wishing to participate in one or more 

of the Recovery Act programs. Up to $1.6 billion in BTOP funds were available in the 

first grant round: $1.4 billion set aside for infrastructure, public computer centers, and 

sustainable broadband adoption projects and $200 million to augment these funds or to be 

used in subsequent NOFAs. In support of the NOFA, RUS and NTIA held 10 workshops 

around the country to explain the program rules and application process for the first 

round of applicants. Approximately 1,800 applications were received by NTIA for the 

first round of funding. Also, NTIA developed and documented pre-award processes and 

procedures for vetting, training, and assigning peer reviewers and performing duediligence reviews of applications receiving sufficient peer review scores. 

3.	 Signing the Management Support Contract (August 2009) – NTIA entered into an 

approximately $99 million contract with Booz Allen Hamilton (BAH) to provide 

program administration, application review, communications and outreach, grants 

administration, post-award technical assistance, and management support. The first-year 

contract of approximately $30 million was modified in November 2009 through the 

exercise of a $5 million option to include application review support by adjusting the mix 

of labor hours provided under the contract. During peak times, the contract provides 

approximately 200 additional staff to supplement NTIA’s existing program office. 

2 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

4.	 Completing First-round Award Process and Issuing Second-round NOFA (November 

2009 – February 2010) – After volunteers and BAH personnel completed a peer review 

of the first-round applications, NTIA performed due diligence of those with scores that 

met determined thresholds. NTIA then announced the first wave of 10 awards in 

December 2009. NTIA has continued to award grants, and plans to complete announcing 

all first-round grants by the middle of April 2010. Concurrent with the first-round award 

process, NTIA issued its second-round NOFA in January 2010. The NOFA makes 

available approximately $2.6 billion of program-level funding, with approximately $2.35 

billion for Comprehensive Community Infrastructure projects, $150 million for PCC 

projects, and $100 million for SBA projects. 

There were several significant changes to the second-round NOFA, including redefined 

selection criteria and revised application processes. Many of these changes were made to 

assure timely grant awards because NTIA had anticipated receiving two to three times the 

number of applications in the second round. Since NTIA will simultaneously be 

performing post-award activities for first-round recipients while reviewing second-round 

applications, there will continue to be significant pressure on the process. For its second 

round of awards, NTIA and RUS conducted another series of workshops to assist 

applicants with the process. 

5.	 Completing Second-round Award Process (March–September 2010) – All second-round 

applications for PCC and SBA projects had to have been submitted electronically for 

consideration by March 15, 2010. NTIA extended the application window for 

Comprehensive Community Infrastructure projects until March 26, 2010. All awards 

must be made by September 30, 2010, as required by statute in Division B, Title VI, of 

the Recovery Act. As such, NTIA will have fewer than 7 months to review applications 

and make awards. 

We have been proactive in our oversight of BTOP, including providing guidance to NTIA on the 

importance of establishing appropriate internal controls. Also, we participated in the workshops 

supporting the first and second NOFAs by briefing potential applicants about the Recovery Act’s 

accountability and transparency requirements. As part of our oversight, we initiated this review 

of BTOP in September 2009. Appendix A of this report outlines the objectives, scope, and 

methodology we followed for the review. 

Throughout our review we worked with NTIA program staff and shared our concerns to enable 

them to correct issues as they emerged. NTIA staff were responsive to these communications and 

made numerous modifications to program operations throughout our review, thus improving 

operational controls and efficiency. The findings included in this report were discussed with 

NTIA’s Assistant Secretary for communications and information on January 6, 2010. NTIA has 

begun to address these findings by obtaining additional personnel to support the BTOP team, 

strengthening the documentation supporting its decision making, and implementing system 

enhancements to facilitate application processing. 

3 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

Findings and Recommendations 

With the issuance of its January 15, 2010, NOFA, NTIA is entering its second round of funding 

broadband grant awards. While NTIA has made significant strides in implementing BTOP 

(developing a program office; issuing its first NOFA; developing and documenting processes for 

vetting, training, and assigning peer reviewers and performing due-diligence reviews of 

applications receiving sufficient peer review scores; performing outreach activities with 

stakeholders; reviewing approximately 1,800 submitted applications; and announcing its first set 

of awards) it is essential that NTIA continue its efforts to promptly address the problems it 

encountered in the first BTOP funding round. Given the delays to date and the relatively low 

dollar volume of grants awarded thus far, NTIA is at risk of not meeting the Recovery Act’s 

statutory deadline of September 30, 2010, for the issuance of all BTOP awards. 

Difficulties encountered in the first round delayed NTIA’s grant award announcements. As of 

March 15, 2010, NTIA had announced approximately $961million of $1.6 billion in grant 

awards—about 60 percent of the available first-round funding. NTIA plans to conclude the first 

round of funding in April 2010, almost 4 months later than its original estimate. NTIA now has 

about 6 months to complete the issuance of about 40 percent of its $1.6 billion in available funds 

from the first round and to receive, evaluate, and award approximately $2.6 billion more from 

the second round. 

I. BTOP’s Size and Complexity Present NTIA with Significant Challenges 

To meets its deadline, NTIA must ensure that it has sufficient staffing resources to complete the 

first round of broadband awards, begin post-award monitoring of first-round recipients, and 

conduct the second-round review of broadband grants. 

A. BTOP Is the First Grant Program of This Size NTIA Has Managed 

NTIA has not previously managed a grant program of BTOP’s size and complexity. Prior 

programs conducted under NTIA vary significantly from BTOP, which—primarily due to its size 

and resource requirements—requires greater operational coordination. BTOP also involves 

awards to for-profit companies in addition to states, local governments, federal tribal entities, and 

non-profits. NTIA has entered into several memorandums of understanding with two Commerce 

agencies and the Federal Communications Commission for grant processing, management 

support, and technical assistance, as well as contracting with BAH for administrative and 

management support in the grant award process. 

While the additional resources procured under these agreements help NTIA manage pre-award 

operations, to date the program office has not completed a comprehensive analysis to ascertain 

whether its structure and staffing are the most effective for managing BTOP. An analysis has 

been delayed, partly because of the program office’s need to quickly establish policy and 

operations. 

4 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

B. BTOP’s Program Office Is Small and Relies Heavily on Other Agency Personnel 

Because BTOP is a new and unique program, NTIA has had to hire most of its personnel from 

outside the agency. The program office has approximately 40 positions, yet as of November 

2009 it was only 80 percent staffed. By January 2010 most open positions had been filled, but 

they appear to be insufficient to simultaneously perform the necessary first- and second-round 

award activities. In addition, NTIA must oversee the work of approximately 200 BAH 

professionals performing important tasks related to the program. 

NTIA must also provide effective oversight and close coordination of other government 

organizations that support BTOP. These include: 

•	 the National Technical Information Service (NTIS), which provides information 

technology support for processing applications; 

•	 the National Oceanic and Atmospheric Administration and National Institute of 

Standards and Technology, which provide grants management; and 

•	 the Federal Communications Commission, which provides technical assistance to 

develop a national broadband map. 

NTIA also coordinates with BIP, which is operated by RUS. During our review, NTIA continued 

to augment BTOP’s program office with new staff and is working on obtaining staff temporarily 

detailed from other Commerce units. It has also strengthened its internal controls through regular 

meetings with the National Oceanic and Atmospheric Administration and National Institute of 

Standards and Technology grant offices to better coordinate operations, delegate select 

operations, and improve the pre-award process. 

C. BTOP’s Program Office Places Significant Responsibility on a Few Key Individuals 

The Government Accountability Office’s Standards for Internal Control in the Federal 

Government states that key duties and responsibilities need to be divided or segregated to reduce 

the risk of error and that as part of its human capital planning, management should also consider 

how best to retain valuable employees, plan for eventual succession, and ensure continuity of 

needed skills and abilities.1 

NTIA, however, currently relies heavily on a few key individuals, putting a strain on key staff 

members. BTOP will be at risk if these staff members leave the program or are temporarily 

unable to perform their duties. For example: 

•	 the Contracting Officer’s Technical Representative for the contract with BAH also serves 

as a team leader of five staff members and maintains responsibilities for another NTIA 

grants program; 

•	 the head of the Infrastructure Division is also the principal manager of BTOP and is 

accountable for programmatic, personnel, and policy decisions; and 

•	 the head of the Compliance and Reporting Division, who manages administrative 

functions and compliance issues for the program, is also responsible for approving the 

BTOP director’s grant award recommendations. 

                                                            

1

 GAO, November 1999. Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1, pp. 13-14. 

5 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

Recommendations 

We recommend NTIA develop a staffing plan that outlines the resources it will need to 

implement the program and that makes provisions to adjust to the loss of key positions. This will 

include identifying key positions, necessary staffing and allocation of responsibilities, a 

succession plan, and resources to support the staff. 

II.	 NTIA Does Not Consistently Document Policies, Procedures, Staff Roles, and Key 

Management Decisions 

The Government Accountability Office’s Standards for Internal Control in the Federal 

Government states that a good internal control environment requires an organizational structure 

with clearly defined key areas of authority and responsibility and appropriate lines of reporting. 2 

Furthermore, internal controls should be documented and “appear in management directives, 

administrative policies, or operating manuals.” 3 

A. Policies and Procedures Are Not Adequately Documented 

NTIA developed and documented pre-award processes and procedures for vetting, training, and 

assigning peer reviewers and performing due-diligence reviews of applications receiving 

sufficient peer review scores. However, NTIA has not documented its policies and procedures 

establishing clear areas of authority and responsibility or detailing appropriate lines of reporting 

and resolving issues that arise during the due-diligence process. The burden placed on the 

program’s limited staff is even heavier when roles, responsibilities, policies, or procedures are 

not adequately documented. Inefficiencies arise when program personnel have questions relating 

to steps in the due-diligence process and do not have clear direction on whom to consult in order 

to receive accurate and timely responses. 

Maintaining adequate documentation is essential not only for guiding staff in the completion of 

their tasks, but in establishing accountability and transparency within the program. Also, 

adequately documented policies and procedures on roles, responsibilities, and lines of reporting 

facilitate a smoother transition of work in the event key staff members depart the program or are 

unable to fulfill their responsibilities. 

During our evaluation, we asked NTIA employees whether policies and procedures had been 

documented in directives and manuals; we were told no such directives were available. In 

October and December 2009 we expressed concern about the lack of clear procedures, but it was 

January 2010 before NTIA announced to BTOP staff that documented procedures and policies 

were being developed. As such, NTIA has gone more than a year into the program without fully 

documented procedures. 

We also found that NTIA did not document delegations of authority upon the recusal of a 

member of senior staff. At our request, the documentation was completed after the change in 

staff took place. Promptly recording procedures and lines of authority will improve efficiency in 

processing applications, since all employees would have a clear understanding of authority in 

any circumstance, as well as accountability and transparency. 

                                                            

2

 GAO, November 1999. Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1, p. 9. 3

GAO, Standards for Internal Control in the Federal Government, p. 15. 

6 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

B. NTIA Has Established a Rigorous Review Process but Needs to Improve Maintenance 

of Award Documentation 

GAO’s Standards for Internal Control in the Federal Government states, “...internal control and 

all transactions and other significant events need to be clearly documented, and the 

documentation should be readily available for examination.” 4 Our review of NTIA’s 

documentation to support award recommendations found that documentation was not readily 

compiled and available for review. We originally requested 10 documentation packages 

supporting the first of seven waves of applications that were recommended for award in midNovember 2009. However, we changed our request to one grant file after being told it would be 

too difficult for BTOP to provide us with packages supporting all first-round award 

recommendations. We received the award documentation for the file in early December but 

found that not all supporting documentation was included. Additional documentation to address 

our questions was provided in mid-December 2009. Similarly, when we asked to see three 

additional files from the first wave and three from the second wave of award recommendations, 

we received them over 3 weeks after our request. 

Our meetings with BTOP officials revealed that while a rigorous process had been established 

for applications that moved from peer review to due diligence, the supporting compilation and 

documentation processes were not initially in place; they evolved as steps were completed and 

“lessons learned” were incorporated. This process is diagramed below: 

               1. Eligibility

Review

2. Peer

Review

3. Due

Diligence

4.

Negotiation

5. Grant

Officer

Award

Our review of seven first-round files supporting NTIA awards encompassed the documentation 

areas included in the table below. 

Application Documentation Reviewed 

Peer reviewer scoring documentation 

Sufficient evidence of matching funds availability 

Applicants’ financial condition and ability to complete project (credit risk/supplier risk) 

Ability to meet environmental requirements (National Environmental Policy Act (NEPA) / 

National Historic Preservation Act (NHPA) 

Accounting system verification 

Evaluation of challenges from existing providers 

                                                           

4

 GAO, November 1999. Standards for Internal Control l in the Federal Government, GAO/AIMD-00-21.3.1, p. 15. 

7 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

Application Documentation Reviewed 

Documenting supporting claim that project could not be completed without federal funds 

Adequate overbuild analysis 

Special award conditions included in the recommendation memo 

We had a number of working meetings with NTIA to locate additional documentation and obtain 

more clarity on the documentation presented. Through subsequent meetings with NTIA, NIST, 

and NOAA, as well as the additional documentation and verbal clarification from NTIA 

management on its due diligence process, we concluded that for these files NTIA worked to 

establish a consistent process that meets NOFA requirements. However, NTIA management 

must continue its efforts to ensure complete documentation is compiled to support awards. 

C. NTIA Did Not Consistently Obtain Legal Opinion Documentation Before Making 

Select Changes to the Program 

NTIA made several programmatic decisions prior to receiving a formal legal review and 

documenting the review’s results. Our office and an independent audit performed by KPMG 

highlighted NTIA’s use of volunteer application reviewers as an area of concern. KPMG 

identified the use of unpaid volunteers as a possible Anti-Deficiency Act issue, and NTIA had 

not obtained a documented legal opinion on the use of unpaid volunteers before the first round 

began. NTIA’s in-house counsel is currently working with Commerce’s Office of General 

Counsel (OGC) and the Chief Financial Officer to address this issue. 

Also, NTIA obtained a legal opinion from OGC after a contract modification had already been 

executed. Therefore, NTIA used reviewers provided by BAH before documenting the contract 

modification terms for OGC and obtaining OGC-documented concurrence that this practice was 

within the terms and conditions of the contract. However, to support its decision, NTIA obtained 

a legal review that had been performed by the Department of Interior (the contracting office) 

prior to executing the contract modification. 

Obtaining a documented independent legal opinion before taking action on important issues is a 

prudent way of doing business, especially with a program as large, complex, and important as 

BTOP. 

Recommendations 

We recommend that NTIA take the following actions: 

1.	 Develop and implement policies and procedures that articulate key roles and 

responsibilities for NTIA program office personnel. As NTIA continues with its 

application due diligence, it needs to ensure that documentation compiled to support 

awards is complete. 

2.	 NTIA’s in-house counsel should document program issues that arise and receive 

documented opinions from OGC on program decisions involving laws and departmental 

policies. Such opinions provide an additional check on program operations and ensure 

8 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

that sound decision making was followed. It also supports program accountability and 

transparency. 

III.	 NTIA Must Overcome the System Challenges It Faced in the First Round of 

Application Intake to Effectively Manage the Second Round 

Intake of grant applications was initially planned through Grants.gov, the federal government’s 

system for identifying and applying for grants. However, with the surge of applications for 

Recovery Act grants, Grants.gov had begun to experience capacity problems. Therefore, NTIA 

filed for a waiver to use a different grant application intake system and upon approval selected a 

commercial off-the-shelf system. This decision was made primarily because NTIS, the agency 

responsible for hosting and supporting BTOP’s information technology environment, had 

worked with the system’s vendor in the past and had some familiarity with its products and 

operations. However, NTIA had little time to complete detailed functional specifications and 

evaluations to ensure that the proposed system would adequately fit its program needs. 

A. The Application Intake System Could Not Handle the Volume of Applications 

Submitted During the First Round 

The first-round application period opened on July 31, 2009, and was scheduled to end 

approximately 2 weeks later, on August 14, 2009. However, as the grant application intake 

system began experiencing problems the deadline was extended to August 20, 2009, for 

electronic applications still pending at close of business on August 14, 2009. A final extension to 

August 24, 2009, was granted for submission of supporting documents. 

As several hundred users completed applications and attempted to upload supporting documents, 

they began to experience significant processing delays due to degradation in server capacity. 

Several attempts were made at correcting the capacity problems—for example, making software 

changes to the application, adding servers to increase capacity, and increasing the efficiency of 

the servers to improve processing time. While these efforts improved the system performance, 

they did not completely resolve the issues. 

The technical issues were exacerbated by help desk support problems. Help desk staff either did 

not have sufficient familiarity with the system to adequately assist users in navigating screens 

and inputting application requirements, or did not have the right level of system access to 

perform basic help desk functions such as unlocking records. 

The capacity issues could not be completely resolved; therefore, NTIA instructed applicants not 

to continue attempting to upload documents online. They instead accepted supporting 

documentation by hand delivery, overnight shipment, or regular mail if postmarked by August 

24, 2009. The problems with the system also led to delays in submission of eligible applications 

for peer/expert reviewer evaluation. This was due in part to the NTIA staff having to match 

supporting paper documentation to electronic applications that had actually been successfully 

submitted online. The first-round application intake phase ended with approximately 2,200 

applications being submitted, with 1,800 being for the BTOP program and approximately 400 

specifically for BIP. 

 

9 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

B. NTIA Must Ensure Adequate Time is Allocated for Coding (Where Applicable) and 

Testing of All Changes to the System and Its Supporting Infrastructure 

After the close of the of the first round of applications, NTIA, NTIS, and the vendor identified 

potential enhancements to the application intake system and its supporting infrastructure that 

would ensure better processing for the second round. In November 2009, NTIS and the vendor 

developed a 60-day timeline that included the dates by which system enhancements would be 

accepted, coded, and tested. The timeline provided that no additional requests for system 

enhancements would be accepted after December 4, which afforded ample time for coding and 

testing. Tests of the system enhancements were slated to occur during the first week in January 

2010. While a number of changes were requested by NTIA by the December 4 due date, 

additional enhancements were still being requested throughout January 2010. Some of the 

enhancements were designed to manage user behavior, such as enforcing file size restrictions on 

uploaded documents and reducing the amount of required documentation. Other changes to the 

server infrastructure were designed to more efficiently convert and process documentation and 

increase server capacity by doubling the number of servers. Together these changes constituted a 

major system enhancement effort. 

As with any major system enhancement project, a significant amount of testing of the changes 

was required. In NTIA’s case the actual volume of applications could only be projected, not 

definitively determined. Therefore, several full-scale iterations of testing were needed. The 

testing required mock application and attachment submissions by multiple simultaneous users; 

for each grant type; under various scenarios; and after any major enhancements to the software 

or infrastructure. Ample lead time had to be allotted to identify problems, determine the correct 

solutions, and conduct retesting. With the second-round application intake date of February 16, 

2010, the testing window was greatly reduced, potentially compromising a successful outcome. 

We advised NTIA that before the system was made available for application submission, an 

implementation readiness assessment needed to be conducted to document the criteria to be met 

in order to successfully implement the system. 

Because of the short timeframe, we discussed our recommendations with NTIA during our field 

work. Our recommendations centered on actions NTIA needed to take to ensure the application 

intake system was able to sufficiently handle the expected increase in applications, and to create 

a better user experience. Some of the necessary actions we discussed included: 

•	 allowing for sufficient time for testing; 

•	 conducting rigorous stress and load testing using multiple simultaneous logins; 

•	 developing milestones and criteria for success and actively monitoring achievement of 

both; 

•	 ensuring help desk staff were sufficiently trained to appropriately triage and escalate 

problems in a timely and efficient manner; and 

•	 monitoring network devices, appliances, and servers to identify problems before they 

affected the users’ experience. 

NTIA was responsive to our feedback and implemented a number of our recommendations. As 

of the first week of processing, the system was functioning properly with no reports of capacity 

10
 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

or document conversion problems. However, at the close of our field work, the application 

process had not yet reached expected peak volumes.5 

 

IV. NTIA is Taking Steps to Avoid the Same Application Review Problems from the First 

Round; However, Challenges Could Continue 

For the first round of BTOP awards, NTIA recruited, selected, and trained volunteer reviewers to 

assess and score applications to determine which applications should receive due-diligence 

examination and potential award. However, NTIA could not adequately forecast peer review 

staffing needs for the application review process, primarily due to uncertainty about the projected 

number of applications. The personnel shortage was compounded by a lack of qualified 

individuals applying to become reviewers, reviewers who dropped out of the process, and the 

time it took to successfully review the often very lengthy applications (at times over 1,000 

pages). Initially the peer review process was scheduled for completion by mid- to late September 

2009, but due to the insufficient number of peer reviewers and short timeframe for them to 

complete their assignments, reviews were not finished until December 8, 2009. The situation was 

resolved only after NTIA modified its contract with BAH in November 2009 to provide peer 

reviewers to score applications, thus allowing them to move to due diligence. In a January 2010 

memo, the assistant secretary for communications and information described the delays in the 

review process as the primary reason for postponing NTIA’s announcement of its first package 

of BTOP awards. 

In order to expedite the application process for the second round of BTOP grants, NTIA 

requested waivers from the Department that would enable it to adopt a general policy requiring 

electronic filing of new BTOP applications and to allow two reviewers, rather than three, to 

evaluate each application for the second round. When requesting these waivers, NTIA stated that 

it anticipated receiving two to three times more applications for the second round of funding, 

which would represent a substantial increase in workload.6

 Also, NTIA will be handling postaward activities for recipients of grant funds from the first round. The Department’s Director of 

the Office of Acquisition Management granted both waivers (with conditions), and the second 

NOFA reflects these changes. 

NTIA has taken steps to address the processing issues that affected the first round, but it will 

have to closely monitor peer reviewer operations for the second round to ensure that reviews 

progress in a timely manner. 

Recommendations 

We recommend that NTIA build capacity to increase the reviewers available to supplement the 

existing pool, addressing unforeseen delays or other impacts that could affect the application 

review timeline. 

                                                            

5

 The second-round ended on March 26, 2010, and NTIA received fewer applications than it had estimated. 6

 See footnote 6. 

11
 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

V.	 Pre-award National Environmental Policy Act Analysis Facilitates Timely BTOP 

Project Completion; However, Close Post-Award Monitoring by NTIA Will Be Needed 

We issued a flash report in March 2009 on lessons learned for BTOP from the Public Safety 

Interoperable Communications program; we referred to the report in our Top Management 

Challenges Facing the Department of Commerce. One of the lessons that we highlighted was 

that NTIA should promptly complete a programmatic environmental assessment to address 

compliance issues for any projects for which necessary environmental activities and permits had 

not been completed, so as not to hinder grantees from completing their projects within mandated 

time frames.7 

Since our flash report was issued, BTOP’s requirements have changed such that an 

environmental assessment for the entire program is not needed. Instead, applicants are now 

required to submit an environmental questionnaire as part of the original application8 to assess 

their NEPA compliance. Additionally, to streamline the process NTIA developed a series of 

categorical exclusions that addressed specific BTOP requirements. Finally, NTIA has 

implemented a special post-award grant condition on many broadband infrastructure projects that 

requires NEPA compliance before construction can begin. 

Although the BTOP grantee would have the responsibility for preparing the post-award projectspecific environmental assessment, NTIA is responsible for reviewing the assessment and either 

making a finding of No Significant Impact, determining that more information is needed, or 

concluding that the information in the project-specific environmental assessment requires an 

environmental impact statement. 

The NOFAs for both rounds of BTOP applications stipulate that projects be 67 percent complete 

within 2 years of grant award and fully complete within 3 years.9 The grantees’ timely 

completion of the environmental assessment is required before most broadband infrastructure 

projects can proceed to construction and be on schedule for completion within the 3-year grant 

period. 

Recommendations 

We recommend that NTIA continue to develop monitoring procedures to be used in the postaward operations that will help to identify recipients who are at risk of experiencing delays in 

completing the post-award NEPA requirements. The procedures should include tracking actions 

required by the recipient and NTIA, as well as steps to be taken if NEPA compliance is not 

obtained in a timely manner. 

 

                                                           

7

 U.S. Department of Commerce Office of Inspector General, March 2009. NTIA Should Apply Lessons Learned from Public 

Safety interoperable Communications Program to Ensure Sound Management and Timely Execution of $4.7 Billion Technology 

Opportunities Program, ARR-19583, p.3. 8

74 Fed. Reg. 33116 (July 9, 2009), and 75 Fed. Reg. 3805 (January 22, 2010). 9

 74 Fed. Reg. 33109-33110 (July 9, 2009). 

12
 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

Summary of Agency Comments and OIG Response 

In responding to our draft report, the Assistant Secretary for Communications and Information 

summarized the steps NTIA is taking to address the recommendations in the report. Where 

appropriate, we modified this final report to incorporate NTIA’s comments on the draft report. 

While we recognize and appreciate the inherent challenges that NTIA faced in the development 

of BTOP, the agency still must address several matters in order to administer the program 

successfully throughout the remainder of its life cycle. We are encouraged that NTIA has already 

begun to focus on our recommendations, and we look forward to NTIA’s action plan that will 

provide specific details on the corrective actions the bureau has taken and planned. NTIA 

management should continue to focus its attention on the issues in the report. 

13
 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

Glossary 

Included below are definitions for some key terms included within the report. The terms are 

defined in various BTOP program documents, including its July 2009 Notice of Funds 

Availability and its January 2010 Notice of Funds Availability. 

Broadband. Two-way data transmission with advertised speeds of at least 768 kilobits per 

second (kbps) downstream and at least 200 kbps upstream to end users, or providing sufficient 

capacity in a middle-mile project to support the provision of broadband service to end users. 

Comprehensive Community Infrastructure. An infrastructure project that focuses primarily 

on providing new or substantially upgraded connections to community anchor institutions. 

Infrastructure projects. Includes last-mile and middle-mile projects that will fund projects to 

deliver broadband access to unserved and underserved areas. 

Last-mile project. Infrastructure project that has the predominant purpose of providing 

broadband service to end users or end-user devices (including households, businesses, 

community anchor institutions, public safety entities, and critical community facilities). 

Middle-mile project. Broadband infrastructure project that does not predominantly provide 

broadband service to end users or to end-user devices, and may include interoffice transport, 

backhaul, Internet connectivity, or special access. 

Public computer center. A place, including but not limited to community colleges, libraries, 

schools, youth centers, employment service centers, Native American chapter houses, 

community centers, senior centers, assistive technology centers for people with disabilities, 

community health centers, and Neighborhood Network Centers in public housing developments, 

that provides broadband access to the general public or a specific vulnerable population, such as 

low-income, unemployed, aged, children, minorities, and people with disabilities. 

Sustainable broadband adoption. Innovative projects that promote broadband demand, 

including projects focused on providing broadband education, awareness, training, access, 

equipment or support, particularly among vulnerable population groups where broadband 

technology has traditionally been underutilized. 

Unserved Area. A proposed funded service area, composed of one or more contiguous census 

blocks, where at least 90 percent of households in the proposed funded service area lack access 

to facilities-based, terrestrial broadband service, either fixed or mobile, at the minimum 

14
 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

broadband transmission speed cited above. A household has access to broadband service if the 

household can readily subscribe to the service upon request. 

Underserved Area. A proposed funded service area composed of one or more contiguous 

census blocks meeting certain criteria that measure the availability of broadband service, the rate 

of broadband subscribership, or the level of advertised broadband speed. Separate criteria were 

established for middle-mile and last-mile broadband infrastructure projects. For last-mile 

projects to qualify, one of the following factors must be met: (1) no more than 50 percent of the 

households in the proposed service area have access to facilities-based, terrestrial broadband 

service at greater than the minimum broadband speed cited above; or (2) no fixed or mobile 

broadband service provider advertises broadband transmissions speeds of at least 3 megabits per 

second downstream in the proposed funded service area; or (3) the rate of broadband 

subscription for the proposed service area is 40 percent of households or less. For middle-mile 

projects to qualify, at least one interconnection point terminates in the proposed funded service 

area that qualifies as unserved or underserved. 

 

15
 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

Appendix A: Objectives, Scope, and Methodology 

The American Recovery and Reinvestment Act of 2009 provided $16 million for Office of 

Inspector General audits and oversight of Commerce’s Recovery Act activities. Under the 

Recovery Act, inspectors general are expected to be proactive and focus on prevention. 

Our work was performed in accordance with the Quality Standards for Inspections (rev. January 

2005) issued by the President’s Council on Integrity and Efficiency and under authority of the IG 

Act of 1978, as amended, and Department Organization Order 10-13 (dated August 31, 2006). 

The objectives of our evaluation were to (1) assess how effectively NTIA is implementing 

BTOP, including management controls, contractor oversight, and program office staffing; (2) 

evaluate the proposal pre-award review measures that NTIA is taking to ensure an effective and 

fair application and award process; and (3) evaluate the integrity and reliability of the on-line 

application system. We performed our evaluation from September 2009 through March 2010 at 

NTIA headquarters in Washington, D.C. The evaluation covered the pre-award process for 

BTOP’s first round of grant awards initiated with NTIA’s July 2009 NOFA. 

To assess how effectively NTIA is implementing BTOP, we 

•	 interviewed NTIA senior officials to obtain an understanding of the organizational 

structure of the program, the make-up of the program office, and the program office’s 

policies and procedures; 

•	 collected and reviewed organization charts, position descriptions, performance plans, and 

selected resumes of personnel assigned to BTOP; 

•	 met with the contracting officer at the Department of Interior’s National Business Center 

to understand the contracting process and review key contract documents between NTIA 

and BAH; 

•	 reviewed memorandums of understanding between NTIA and other federal organizations 

within and outside Commerce that were providing program and administrative support; 

•	 attended weekly NTIA all-hands BTOP meetings and a quarterly status meeting held with 

BAH; 

•	 reviewed the process for recruiting and training independent peer reviewers; 

•	 assessed the thoroughness of the due diligence process and the audit trail supporting 

NTIA’s decisions to make certain grant awards; and 

•	 conducted interviews and obtained documentation and evidence of key system 

development, information security, and other supporting information technology controls 

from NTIA, NTIS, and the vendor. 

16
 
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

Appendix B: Full Text of Agency’s Response 

17
 

UUNrTED ITED STATES DEPARTMENT OFDF COMMERCE

The TlIe As&istan~ AMi&taont Seerecary Secretary for fOl" Communications Communications

and and Information InformHion

WiIshlngton. wastW1gcotl. D.CD.C. 20230

APR AI'II 11 201J 10D

Mr. Mr. Todd Todd J.J.l.inscr Zinser

Inspector Inspector General

UU.S. .. Department Department of ofCommercc Commerce

1401 Constitution Avenue. Avenue. N.W. .W.

Washinglon Washington, DC 20230

Dear Mr. Mr. Zinser:

Thank you for lhe the opportunity oppol1unity 10to commenl comment on lhe the Office of lnspe~tor Inspector General General'ss Draft

Repon Report No. o. ARR-19842-1 titled tilled lVTIA Ifl'IA Must Continu ConJinue 10to Improve Improw itsiu Program Management Mo~"'~nJ and

Pre-AlVord Pre·Award Process/or Proassfor its Broadband Broadbond Grants ProgrOlfl. Program. I app~iale appreciate our ongoing collaboration, collaboration,

your praise ofour program and ilSits evolution, evolution, and your recommendations ~ommendaJ.ionson Sleps steps the me National ational

Telecommunications and Information Administration (NTlA) should shoukllake take to further enhance its ilS

internal intema1 controls conlrols to10 ensure lhat that broadband funds from the American Recovery and Reinvestment

Act ACI of2009 (Reco (Recovery ery Act) are arc made available as efficienlly efficiently and fairly as possible. I assure you

that lhat we are laking taking every appropriate action to address the recommendations ~mmendations described in the lhe

Repon. Report.

As lhe the Repon Report notes, notes. NTIA has confronted confi'onled a number nwnber of challcoges challenges in effectively effct:tively

implementing the Broadband Technology Tct:hnology Opponunilies Opportunities Program (STOP) consistcnt consistent wilh with lhe the

Rct:overy Recovery Ac!. Act. From our initial startup activities, including staffing a11 program office office, developin developingg

grant program rules and regulations, regulations, procuring program support suppon services. service." and coordinating gnm grantsts

processing activities with other olher Department Depanment of ofCommerc:e Commerce (DOC) agencies. agencies in little Iinle more than man aa

year we have processed a large volume of applications and have have awarded over SI $1 billion in

grants. We have achieved all ofthis despite being limited limited in our our administtativc administrative expenses cxpenses to thre threee

pereent percent ofthe thc program's appropriation. appropriation. This This is half halfof what is typically allowed for thc lhe startup of of

aa major program such asas STOP. BTOP.

Considering these challenges.. challenges. NTIA's NTlA's achievements thus far have havc been significant. significant.

When Whcn the first funding round is complctc, complete. the agency Cltpcets expects to have made approximatcly approximately $1.2

billion in gnmts grants toto cxpand expand broadband infrastructure, infrastructure. invest in public public computcr computer centers, centers, and lind

promote promote sustainable broadband adoption. adoption. These investments will help bridge the tct:hnological technological

divide, divide, boost economic economic growth, growth. create jobs. jobs, and improve improve cducation education and health care across across thc lhe

country. country. For the second grant round, round,lhe the agcncy agency released released its second Notice of off'unds fuocls Availability

(NOFA) onon time, time, reccived received over gOO 800 applications, applications, and and remains remains on track track to award award all aU STOP BTOP grants

byby itsits statutory deadline of ofSeptember 30, 30,2010. 2010.

Given the the significant constraints constraints and challenges presented byby the Recovery Recovery Act. Act, NTIA

has balanced balanced its obligations obligations to protect protect taxpayer taxpayer funds and make grunts grants liSas eltpeditiously expeditiously as

prac:ticable. practicable. I have testified repeatedly rcpeatedly toto thc lhe fact fact that that I will will nol not make bad bad investments. investments. and we we

have Ia riltorous rigorous due diligcnce diligence proc:ess process inin place toto eliminate eliminate exccs.~ive exces.<;ive c:olIt., COl;!S and and verify the the lon&- longtenn tcnn sustainllbility sustainability ofprojct:lS. of projects. II am gratified gratified thai lhat your your office has has recogni7.cd recognized the rigor rigor of ofour our

U fT'ED STATES DEPARTMENT OF COMMERCE

The Assisunt Secretary tor Communications

and InformllCion

Washtngton. D.C 20230

APR 1 2ll1l

Mr. Todd J. Zinser

Inspector General

U.. Department ofCommen:e

1401 Constitution A enue.

Washington, DC 20230

Dear Mr. Zinser:

Thank you for the opportunity to comment on the Office ofInspector General's Draft

Report o. ARR-19842-1 tilled /tffIA Must ConJinue to Improve its Program Management and

Pre-A' ard Processfor its Broadband Grants Program. I appn:c:iate our ongoing collaboration,

your praise ofour program and irs evolution, and your recommendations on tep$ the National

Telecommunications and Information Administration (NTlA) hould takc to funhc:r enhance its

internal controls to ensure that broadband funds from the American Recovery and Reinvestment

Act of2009 (Recovery Act) are made available as effLciently and fairly as possible. I assure you

that we are taking every appropriate action to address the recommendations described in the

Repol1.

As the Report notes, Nl1A has confronted a number of challenges in effectively

implementing the Broadband Technology Oppo"uniti Program (STOP) consistent with the

Recovery Act. From our initial startup activities, including staffing a program office, developing

grant program rules and regulations, procuring program suppo" services, and coordinating grants

processing activities with other Department ofCommerce (DOC) agencies, in lillie more than a

year we have processed a large volume of applications and have awarded over S I billion in

grants. We have achieved all ofthis despite being limited in our administrative expenses to three

percent ofthc program's appropriation. This is halfof what is typically allowed for the stanup of

a major program such as STOP.

Considering these challenges, NTlA's achievements thus far have been significant.

When the first funding round is complete, the agency expects to have made approximately $1.2

billion in grants to expand broadband infrastructure, invest in public computer centers, and

promote sustainable broadband adoption. These investments will help bridge the technological

divide, boost economic growth. create jobs. and improve education and health care across the

country. For the second grant round, the agency released its second Notice of Funds Availability

(NOFA) on time, received over 800 applications. and remains on track to award all BTOP grants

by its statutory deadline of September 30, 2010.

Given the significant constraints and challcnges presented by the Recovery Act, NTIA

has balanced its obligations to protect taxpayer funds and make grunts us expeditiously as

practicable. 1have testified repeatedly to the fact that I will not make bad investments. and we

have 8 rigorous due diligence process in place 10 eliminate excessive C01;I1; and verify the longterm sustainability OfprojeclS. 1am gratified that your office has recognized the rigor of our
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

18
 

review process and has acknowledged that we have worked to establish a consistent and fair

process that meets statutory and regulatory requirements.

As a small bureau managing this one-time stimulus program, NTIA organized the

program office with a core staffto hllndle govemment functions and to manage our contractors,

and leveraged these staffresources with services from contracts and interagency agreements.

This approach allowed the program to deploy sufficient resources to meet its critical and timesensitive needs. NTIA succcssfully followed a similar model for the TV Converter Box Coupon

Program and the Public Safety Interoperable Communications Program. We recognize your

concerns about succession planning and redundant oversight ofthese contracts and agreements,

and we are taking steps to address your concerns. Specifically:

1. In response to concerns regarding adequate stamng: NTiA has hired an wellqualified Slafl'to handle core government functions and to manage our contractors.

We have also taken steps to eliminate the potential risk of key staffing bottlenecks by

bolstering internal and external resources. Additionally, our primary contract with

Booz Allen Hamilton provides about 200 contractor FTEs to assist the core

government team. As yOIl know, the U.S. Department of the Interior providcs

comprehensive acquisition support to STOP, serving as NTIA's contracts office for

the Booz Allen Hamilton contract. Under this agreement. Interior has appropriately

executed contract modifications to ensure that the contract best meets the program's

evolving needs and complies with Federal Acquisition Regulations. Prior to the

issuance oftile Booz Allen centrac! and all modifications, Interior engaged in a

rigorous clearance process, including review by Interior management, legal offices

and by the Recovery Act Board. The additional check of Department of Commerce

Office ofGeneral Counsel legal review ofthe contract modification you nute in your

Report was perfonned upon your request outside of a standard acquisition

management clearance process.

2. In response to com:eros regarding documentation of program policies and roles:

NTIA has assembled a series offocused documents and directives to guide staffand

contractors with the review and award of grants, rather than laking a more fonnal and

structured approach to minutely documenting pre-award procedures and

responsibilities. Because ofthe temporary nature ofthe program and the nee<lto

move expeditiously with the award of grants, NTIA believes this more focused

approach is the best course of action for the pre.award phase ofthe program.

However, I appreciate the concerns expressed in the Repon and can assure you that

the agency has been working toward comprehensive documentation to appropriately

define roles, responsibilities, and procedures for the post-award phase ofthe program,

during which we plan to oversee over $4.5 billion in grant funds for several years.

3. In response 10 concerns regarding documentalion of legal issues and guidance:

The Commerce Department's Office ofOeneral Counsel has worked closely with

NTIA and provided timely legal review and advice. NTIA regularly consults with

legal counsel on impor1ant issues and, depending on need and urgcncy, Ihis guidance

is received in a variety of fonns iocluding verbal, e-mail, and fonnal wrillen opinions.

2

review process and has acknowledged !hat we have worked to establish a consistent and fair

process that meets statutory and regulatOf}' requirements.

As a small bureau managing this one-time stimulus program. NTIA organized the

program offiee with a core staffto handle government functions and to manage our contractors.

and Ievenr.ged these staff resources with services from contnlcts and interagency agreements.

This approach allowed the program to deploy sufficient rcsourccs to meet its critical and timesensitive needs. NTIA successfully followed a similar model for the TV Converter Box Coupon

Program and the: Publie Safety Interopttable Communications Program. We recognize your

concerns about succession planning and redundant oversight ofthese contracts and agreements,

and we are taking steps to address your concerns. Specifically:

I. In rape.se to ".~nu reprdingadequatc stamnl: NTIA has hired an wellqualified stafflO haDdle core government functioas and 10 manage our contnlClOrs.

We have also taken steps to eliminate the potential risk of key staffing bottlenecks by

bolslering internal and external resowces.. Additionally. our primary contract with

Booz Allen Hamilton provides about 200 conlnK:IOf FTEs to assiSlthe core

government team. As you know, the U.S. Department ofthe Interior provides

comprehensive acquisition suppon to STOP. serving as NTIA's COf'lIBCts <lffice for

the: Booz Allen Hamilton contract. Under this agreement. Interior has appropriately

executed contntct modifications to ensure that the: oontraet best meets the program's

evolving needs and complies with Federal Acquisition Regulations. Prior to the

issuan<:e of!he Booz Allen contract and all modificstions.lnteri<lf engaged in a

rigorous elean.nce process. including review by Interior management. legal offices

and by the Reoovery Act Board. The additional check ofDepanment ofCommerce

Office ofGeneral Counsel legal review ofthe contract modification you note in your

Repon was performed upon your request outside of a slalldard acquisition

management c1Cll11lnCe process.

2. In response to concerns regardiDg documCbtalioo of program policies and roles:

NTIA has assembled a series of focused documents and directives to guide staffand

contractors with the review and award of grants. rather thaJ1 laking a more fonnal and

structured approach to minutely documenting pre-award procedures and

responsibilities. Because ofthe temporary nature ofthe program and the need to

move expeditiously with the award of grants. NTiA believes this more focused

approach is the best course of action for the pre-awBfd phase ofthe program.

However. I appreciate the concerns expressed in the Report and can assure you that

the agency has been working toward comprehensive documentPlion to approprialely

define roles, responsibilities, and procedures for the post·award phase of the program,

during which we plan to oversee over S45 billion in grant funds for several yeaf'S.

3, In respoDse to concerns regardiDg documcntalion of legal issues aod guid.nce:

The Commerce Department's Office ofGeneral Counsel has worked closely with

NTIA and provided timely legal review and advice. NTIA reaularly eonsults with

lesal counsel on important issues and, depending on need and urgency, this guidance

is received in a variety of fonns including verbal, e-mail. and formal written opinions.

2
U.S. Department of Commerce Final Report ARR-19842-1 

Office of Inspector General April 2010 

19
 

With respect to the Report's discussion of NTIA's analysis of potential Anti·

Deficiency Act implications of our expert reviewer process, NTIA sought and

obtained legal counsel from the Office ofGeneral Counsel, Federal Assistance Law

Division prior to the use of volunteer application reviewers. Separately, after

examining the events that raised concerns by tne OIG. the NTiA Chief Financial

Officer concluded that NTIA acted properly in following Department Administrative

Order 202-311 guidance on volunteer service with respcctto its responsibilities for

authorizing the volunteer work and for ensuring that potential volunteers agreed to a

waiver of compensation, and that no violation ofthe Anti-Deficiency Act occurred.

NTIA will continue to coordinate with the Office ofGeneral Counsel and seek advice

as necessary in the implementation and management ofthe program.

4. 10 resJl&Dse to recommendations to implemenllessons learned from tbe tirst

funding round :IIppllc:IItion review pro«ss: NTIA has taken action to ameliorate

the Round One delays identified in your Report by making process improvements that

will lead to a more expeditious merit review in Round Two. Fim, we have reduced

the number of expert reviewers required to evaluate an application from at least three

to at least two to make the process as efficient as possible. We have also switched

from a volunteer model to a paid-reviewer model in order to manage the schedule

more effectively and minimize the possibility of a delay due to the initial review of

applications.

S. To addreu concerns regArding the llpplication intakc system: NTIA has

implemented a number of important enhancements to ensure that the Round Two

online application system would be ready to accept and process applications. We

streamlined the application, reduced the number of required attachments, eliminated

the joint NTIA-RUS application, and increased system capacity. The online

application portal underwent substantial testing and verification to mitigate problems

associated with congestion on the system. As a result, the online system performed as

planned over the last few weeks and successfully allowed Round Two applicants to

submit their proposals without any significant performance issues.

1 look forward to continuing to work with you as NTlA implements this important

program to expand broadband capabilities in the United States, create jobs, and lay a new

foundation for economic growth in America. IfNTIA may be of further assistance, please

contact Milton Brown, NTIA's Liaison to the Office of Inspector General, at (202) 482-1853.

Sincerely,

3

With respect to the Report's discussion ofNTIA's analysis of polential AntiDeficiency Act implications ofour expert reviewer process, NTIA sought and

obtained legal counsel from the Office ofGeneral Counsel, Federal AssiSWlCe Law

Division prior to the use of volunteer applicalion reviewers. Separalcly, after

examining the eventsthaI raised concerns by the 010. the NTIA ChiefFinancial

Officer concluded that NllA acted properly in following Department Administrative

Order 202-311 guidance on volunleer service with respcc::llo its responsibilities for

authorizing the volunteer wortr. and for ensuring thaI potential volunleers agreed to a

waiver of compensation.. and lhal no violalion oflhe Anti-Deficiency Act occurred..

NTlA will continue to coordinate with the Office ofGeneml Counsel and seek advice

as nooessary in the implementation and management oflhe progrvn_

4. fa raJHlDK to I'ftOmmtadatioa.s to a..pltmtatltsSODJ lnnatd from tbt fint

(uDdi.D.& ro••d application ~iew prwa.s: NllA has taken action 10 amelionllte

the Round One delays idenlified in your Report by malting process improvements that

will lead 10 a more expeditious merit review in Round Two. First, we have reduced

the number ofexpert reviewers required to evaluale an application from at lcass: three

to at lcass: two to make the process as efficient as possible. We have also swilched

from a volunteer model 10 a paid-reviewer model in order to manage the schedule

more effeclively and minimize the possibility of a delay d~ 10 the initial review of

applications.

S. To addnss coacenu regardiag tbe applicaUoD iDtake system: NTJA has

implemented a number ofimportant enhancements 10 ensure lhallhe Round Two

online applicalion system would be ready 10 accepl and process applications. We

streamlined the application. reduced the number ofrequired attachments, eliminated

the joint NTlA-RUS application, and increased system capacity. The online

application ponal underwent substantial lesling and verification 10 mitigate problems

associated with congestion on the system. As a result, Ihe online system perfonned as

planned over the last few weeks and successfully allowed Round Two applicants 10

submit their proposals without any significant performance issues.

I look forward to continuing 10 woric: wilh you lIS NTIA implements Ihis importanl

program to expand broadband capabililies in the United States, creale jobs, and lay a new

foundalion for economic growth in America. IfNTIA may be of further IISsistance. please

contact Milton Brown, NTIA's Liaison 10 the Office of Inspector General, at (202) 482-1853.

Sincerely.

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