U.S. RAILROAD RETIREMENT BOARD

OFFICE OF INSPECTOR GENERAL 

 

The Acquisition Management 

Function at the Railroad 

Retirement Board Was Not 

Fully Adequate or Effective

Report No. 19-14 September 27, 2019
OFFICE OF INSPECTOR GENERAL

U.S. RAILROAD RETIREMENT BOARD

The Acquisition Management Function at the Railroad Retirement 

Board Was Not Fully Adequate or Effective

Report Summary September 27, 2019 Report No. 19-14

What DP George & Company Found 

DP George & Company (DP George) determined that the 

acquisition management function at the Railroad Retirement 

Board (RRB) was not fully adequate or effective.

DP George found weaknesses in the areas of outdated policy 

and procedures, contract files with problems throughout the 

contract lifecycle, instances of non-compliance with the Federal 

Acquisitions Regulation, and instances of insufficient 

requisitions.

What DP George Recommends

To address the weaknesses identified in this audit, DP George

made 15 detailed recommendations. DP George recommended 

that policy and procedures be made current; contract files 

contain appropriate documentation for solicitation, award, 

administration, and closeout; sufficient amounts be 

requisitioned; improve reporting to Federal Procurement Data 

System; and best practices for Human Capital Management be 

followed.

Management concurred with 11 recommendations and did not 

concur with 4 recommendations.

What We Did 

The Office of Inspector General 

(OIG) for the Railroad Retirement 

Board (RRB) engaged DP George to 

conduct a performance audit of 

the RRB’s Acquisition Management 

Function. The audit objectives 

were: (1) assess the effectiveness 

of RRB’s Division of Acquisition 

Management’s policies, 

procedures, practices, and internal 

controls in contract management 

according to applicable laws and 

regulations; and (2) test the 

compliance with Federal 

Acquisition Regulation during 

contract lifecycle/phases: 

preaward, award, administration, 

and closeout. This audit was 

conducted in accordance with the 

performance audit standards 

established by Generally Accepted 

Government Auditing Standards. 

DP George is responsible for the 

audit report and the conclusions 

expressed therein. RRB OIG does 

not express any assurance on the 

conclusions presented in DP 

George’s audit report.

The scope of this audit is 

acquisition management at the 

RRB during fiscal years 2013 

through December 2018.
The Acquisition Management 

Function at the Railroad 

Retirement Board Was Not 

Fully Adequate or Effective

 

 
TABLE OF CONTENTS

Executive Summary ......................................................................................................................... 1

Objective(s), Scope, and Methodology ........................................................................................... 2

Background...................................................................................................................................... 3

Audit Results.................................................................................................................................... 5

Finding #1: RRB Policies and Procedures Are not Current............................................ 5

Finding #2: Contract Files do not Contain Relevant Documentation to Evidence the 

Solicitation Process.............................................................................................................. 6

Finding #3: Contract Files do not Contain Relevant Documentation to Evidence the 

Award and Administration Process ................................................................................... 7

Finding #4: Insufficient Requisition Amounts Identified in the Award and 

Administration Process........................................................................................................ 9

Finding #5: Contract Files do not Contain Relevant Documentation to Evidence the 

Closeout Process................................................................................................................. 10

Finding #6: Inaccurate Reporting to the Federal Procurement Data System .......... 12

Finding #7: Best Practices for Human Capital Management ...................................... 12

Appendix I Management Comments............................................................................................. 15

Appendix II Statistical Sampling – Solicitations sample................................................................. 23

Appendix III Statistical Sampling – High Risk Awards sample ....................................................... 25
1

EXECUTIVE SUMMARY

September 25, 2019

Mr. Martin Dickman, Inspector General

Railroad Retirement Board

Office of Inspector General

844 North Rush Street

Chicago, IL 60611-1275

Dear Mr. Dickman,

DP George & Company, LLC (DPG) audited the Railroad Retirement Board (RRB) acquisition management 

function, against federal acquisition regulations, RRB relevant policies and procedures, and other best practices 

guidance for the federal acquisition process. Performance against these criteria is the responsibility of RRB’s 

management. DPG’s responsibility is to make a determination regarding RRB’s performance against the criteria.

DPG conducted the audit in accordance with Generally Accepted Government Auditing Standards (GAGAS) 

issued by the Comptroller General of the United States (2011 Revision, as amended). Those standards require 

that DPG plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for 

its findings, conclusions, and recommendations based on the audit objectives. Stated objectives for our audit 

were to:

1. assess the effectiveness of RRB’s Division of Acquisition Management’s policies, procedures, 

practices, and internal controls in contract management according to applicable laws and 

regulations; and

2. test the compliance with the Federal Acquisition Regulation (FAR) during contract lifecycle/phases: 

preaward, award, administration, and closeout.

The evidence obtained provides a reasonable basis for DPG’s findings, conclusions, and recommendations based 

on the audit objectives. 

Based on the test work performed, our audit determined that the acquisition management function at the RRB 

was not fully adequate or effective for the period reviewed. The detailed findings for the audit are presented in 

the Audit Results section of this report. 

We appreciate the cooperation and assistance extended by RRB and the OIG staff during the audit. 

Sincerely,

DP George & Company, LLC

Alexandria, Virginia
2

OBJECTIVE(S), SCOPE, AND METHODOLOGY

The objectives of this audit were to perform an evaluation of the Railroad Retirement Board (RRB) acquisition 

management function. The evaluation included: 1) assessing the effectiveness of RRB’s Division of Acquisition 

Management’s policies, procedures, practices, and internal controls in contract management according to 

applicable laws and regulations; and 2) testing the compliance with the FAR during contract lifecycle/phases:

preaward, award, administration, and closeout.

To accomplish our objectives, we:

• identified criteria provided in applicable laws, regulations, and best practices related to acquisition 

management;

• identified, reviewed, and evaluated RRB policies and procedures related to the acquisition management 

process;

• interviewed key management and staff, and conducted walkthroughs;

• obtained and reviewed RRB’s strategic plan and acquisition planning process;

• obtained and reviewed RRB and Acquisition Management’s human capital plan;

• obtained and reviewed data from the Federal Procurement Data System (FPDS) Next Generation;

• tested a sample of solicitations from Fiscal Year (FY) 2013 through Q1 FY 2019;

• tested a sample of awarded contracts from FY 2013 through FY 2018; and 

• tested all closed contracts from FY 2013 through FY 2018.

We assessed the reliability of the solicitations data received by: 1) reviewing the data to identify gaps in the 

sequential numbering, and 2) making inquiries of agency officials knowledgeable about the data regarding any 

gaps. We assessed the reliability of the awards data received by: 1) comparing it against award information 

contained in the Federal Procurement Data System (FPDS), and 2) making inquiries of agency officials 

knowledgeable about the data regarding any discrepancies with FPDS. We assessed the reliability of the 

closeout data received by: 1) discussing the process used to gather the data with agency officials, and 2) 

reviewing the data for reasonableness.

The scope of our audit covered policies and procedures effective for the period from FY 2013 through Q1 FY 

2019. We selected a sample of solicitations from the FY 2013 through Q1 FY 2019 period (See Appendix II), a 

sample of high risk awards1 from the FY 2013 through FY 2018 period (See Appendix III), and all contract 

closeouts from the FY 2013 through FY 2018 period.

 

1 DPG defined high risk contracts as follows: 1) Any award where the total award value exceeded $1 million over the course 

of the FY 2013 through FY 2018 audit period, or 2) Any award where the total award value exceeded $100,000 over the 

course of the FY 2013 through FY 2018 audit period and the contract did not meet the Level 4 exclusion criteria in BBO 5. 

DPG also excluded any awards where the total award value was over $100,000 but none of the individual Fiscal Year award 

amounts exceeded $100,000.
3

We conducted this performance audit in accordance with Generally Accepted Government Auditing Standards 

(GAGAS). Those standards require that we plan and perform the audit to obtain sufficient appropriate evidence 

to provide a reasonable basis for our findings, conclusions, and recommendations based on the audit objectives. 

We believe that the evidence obtained provides a reasonable basis for our findings, conclusions, and 

recommendations based on our audit objectives.

We conducted our fieldwork from October 2018 through August 2019. During our audit, we performed site visits 

to the RRB headquarters in Chicago, Illinois in October 2018, April 2019, June 2019, and July 2019.

BACKGROUND

Annually, the RRB acquires goods and services that the agency cannot perform, or that an outside vendor can 

perform more effectively and efficiently. These goods and services can include, but are not limited to those 

related to information technology, Medicare claims processing, medical services, maintenance, security, 

telecommunications, quality assurance, engineering and custodial services, utilities, and travel management. It 

is critical that RRB identify and mitigate its acquisition management risks. Without well-designed and 

implemented controls, RRB’s contracts could be vulnerable to such risks as project failures, poor contractor 

performance, cost overruns, schedule slippages, purchases that are inconsistent with management objectives, 

and noncompliance with legal requirements. These investments can suffer from a lack of disciplined and 

effective management, such as project planning, requirements definition, and program oversight and 

governance. The total amount listed in FPDS for RRB contract awards during the FY 2013 to FY 2018 period was

$230 million.

The Federal Acquisition Regulations System is established for the codification and publication of uniform policies 

and procedures for acquisition by all executive agencies. The Federal Acquisition Regulations System consists of 

the Federal Acquisition Regulation (FAR), which is the primary document, and agency acquisition regulations 

that implement or supplement the FAR. The FAR System does not include internal agency guidance. The basic 

procurement objective is to promote and provide for full and open competition in soliciting offers and awarding 

Government contracts. As an executive branch agency, RRB is required to follow the FAR. 

The U.S. Government Accountability Office (GAO) published Framework for Assessing the Acquisition Function at 

Federal Agencies. GAO developed this framework to provide senior acquisition executives, as well as GAO and 

other accountability organizations, an ability to assess at a high level the strengths and weaknesses of agencies’ 

acquisition functions. This framework comprises four interrelated cornerstones that GAO’s work has shown 

promote an efficient, effective, and accountable acquisition function: 1) organizational alignment and 

leadership, 2) policies and processes, 3) human capital, and 4) knowledge and information management. 

Basic Board Order 5 (BBO 5) designates the Board Members, Director of Administration (DA), the Contracting 

Officers, and ordering officials as the only officials who may commit the RRB to contractual obligations for goods 

and services. The Division of Acquisition Management (AM) is responsible for administering RRB’s acquisition 

management activities, including: establishing, communicating, and monitoring compliance with agency policy 

and procedures. 

Consistent with good internal controls, federal regulations require that documentation in contract files be 

sufficient to constitute a complete history for the purposes of: 1) informing decisions at each step in the 

acquisition process, 2) supporting actions taken, 3) providing information for reviews and investigations, and 4) 

furnishing essential facts in the event of litigation or congressional inquiry. RRB maintains its acquisition 
4

management documentation electronically in archived Federal Financial System (FFS) files, electronically in the 

Financial Management Integrated System (FMIS), and in centrally maintained hard copy contract files.

Staff in various RRB units work together to execute and monitor RRB contracts. 

• Contracting officers and contract specialists are acquisition management staff. Contracting Officer’s 

Representatives (CORs) work for the RRB unit that identified the need and initiated the acquisition 

request.

• Contracting officers ensure that all necessary actions for effective contracting are performed, oversee 

contractor compliance with the terms of the contract, and safeguard the interests of the government in 

RRB’s contractual relationships. The contracting officer is the only person authorized to enter into, 

modify, and terminate a contract.

• Contracting specialists represent and assist a contracting officer throughout the contract process; 

however, contracting specialists are not authorized to enter into, modify, or terminate a contract.

• CORs ensure that program requirements (buyer needs) are clearly defined, monitor the contractor’s 

performance, and provide technical direction to the contractor.

The RRB strives to maintain a first-class acquisition system that makes maximum use of competitive procedures, 

uses past performance as an evaluation factor in awarding contracts, and ensures that contractors meet all 

delivery requirements and schedules for goods and services. This is intended to help ensure that the RRB 

consistently pays the lowest price for products and services commensurate with quality, service, value, delivery, 

and reliability by promoting full and open competition to the maximum practical extent when procuring goods 

and services, awarding purchase orders only to responsible contractors, and closely managing solicitations and 

their resulting contracts. Related to human capital planning, the RRB will also continue to have knowledgeable 

acquisition specialists and CORs. The RRB has improved its competitive acquisition process by using a fully 

automated acquisition subsystem within the RRB’s Financial Management Integrated System (FMIS). 
5

AUDIT RESULTS

Our audit determined that the RRB acquisition management function was not fully adequate or effective. The 

RRB policies and procedures have not been updated in the past nine years and do not contain sections specific 

to the closeout process. Testing of the contract lifecycle/phases (preaward, award, administration, and closeout)

identified that contract files do not present an accurate history of the lifecycle because they are not effectively

documented. Testing also identified instances where FAR and/or RRB requirements were not followed.

We provide 15 recommendations aimed at addressing these weaknesses.

Finding #1: RRB Policies and Procedures Are not Current

The RRB establishes agency procurement policy in BBO 5 and agency procurement procedures in Administrative 

Circular OA-14 (OA-14). We determined that these documents are not current. The most recent update to OA14 was in October 2009. It is not indicated within BBO 5 when the most recent update occurred. Testing over 

the administration phase of the contract lifecycle identified that the current requirement within BBO 5 for 

project directors and contracting officer technical representatives (COTRs) to submit monthly reports to the 

contracting officer (CO) is not being adhered to and may no longer be warranted. We also determined that 

policies and procedures pertaining to the contract closeout process are not included in either document.

The outdated status of these documents resulted from the placement of limited resources within the Division of 

Acquisition Management on other priorities.

The GAO’s Standards for Internal Control in the Federal Government indicates that effective documentation 

assists in management’s design of internal control by establishing and communicating the who, what, when, 

where, and why of internal control execution to personnel. Documentation also provides a means to retain 

organizational knowledge and mitigate the risk of having that knowledge limited to a few personnel, as well as a 

means to communicate that knowledge as needed to external parties, such as external auditors. Management 

also documents internal control to meet operational needs. Documentation of controls, including changes to 

controls, is evidence that controls are identified, capable of being communicated to those responsible for their 

performance, and capable of being monitored and evaluated by the entity.

The existing policies and procedures guidance does not adequately communicate the current processes and 

control activities that employees must perform to effectively accomplish the procurement process.

RECOMMENDATIONS

We recommend that the RRB Board:

1. update Basic Board Order 5 to align procurement policies with current federal acquisition regulation and 

agency practice.

We recommend that the Office of Administration/Division of Acquisition Management:

2. update Administrative Circular OA-14 and implement the necessary updates to align procurement 

procedures with current federal acquisition regulation and agency practices.
6

MANAGEMENT’S COMMENTS 

The Office of Administration and Division of Acquisition Management concurred with 

Recommendations 1 and 2.

Finding #2: Contract Files do not Contain Relevant Documentation to Evidence the 

Solicitation Process

DPG selected a sample of 62 solicitations performed between FY 2013 and Q1 FY 2019 (See Appendix II). We 

reviewed the corresponding contract files and requested documentation to evidence the process followed and 

support the decisions made for each solicitation. We found that the contract files reviewed were not fully 

supported in the following areas:

• 39 contract files where a Determination and Findings (D&F) or other summary was not present in the file 

to indicate the basis for the final decision; 

• 16 contract files where goods or services greater than $25,000 were procured and we could not find 

evidence in the file that the procurement was posted on FedBizOpps or another acceptable contract 

vehicle such as GSA eBuy or NASA SEWP; 

• 12 contract files that were not micropurchases or sole-source procurements where we could not find 

evidence in the file that bids/offers were sought from at least 3 sources; 

• 12 contract files where we could not find evidence in the file of the market research performed for the 

solicitation; and

• one (1) contract file where a sole-source procurement was performed but the justification for the solesource procurement was not evidenced in the file. 

We also noted that contract files were not organized in a consistent manner from contract to contract. 

Existing RRB policies and procedures do not contain sufficient guidance to ensure the consistency and 

completeness of the solicitation documentation maintained within the contract files.

The GAO’s Standards for Internal Control in the Federal Government indicates that management should clearly 

document internal control and all transactions and other significant events in a manner that allows the 

documentation to be readily available for examination. The documentation may appear in management 

directives, administrative policies, or operating manuals, in either paper or electronic form. Documentation and 

records should be properly managed and maintained.

As a result of the missing documentation, the RRB hardcopy contract files do not effectively present a history of 

the actions taken and decisions made to support of the solicitations process.

RECOMMENDATION

We recommend that the Office of Administration/Division of Acquisition Management:

3. update standard policies and procedures to clearly convey the documentation required to be

maintained in the contract file in order to support the solicitation phase; and
7

4. develop and implement standard checklist guidance to be included in the contract file that lists the

required solicitation documentation, identifies if the documentation was applicable to the solicitation,

and indicates the section in which the supporting documents are located.

MANAGEMENT COMMENTS

The Division of Acquisition Management concurred with Recommendations 3 and 4. Acquisitions Management 

disagreed with the assertion that a D&F or other summaries are required for solicitation files. Acquisition 

management also provided additional information regarding the one sole-source procurement noted in the 

finding.

DPG RESPONSE

The FAR Subpart 4.802 (a)(1) indicates that the contract office file should document the basis for the 

acquisition and the award. The FAR Subpart 4.803 provides examples of records normally contained in the 

contract file, and FAR Subpart 4.803(2) lists justifications and approvals, D&Fs, and associated documents as 

examples. For the 39 files noted, a D&F or other summary was not provided and DPG was not able to 

determine the basis for the decision from other documentation contained in the file. We view the use of a D&F 

or other summary as an effective means of communicating the decision basis. However, if RRB is able to 

establish the basis for award without the use of a D&F or other summary when implementing 

recommendations 3 and 4, then we would consider that acceptable in the context of the FAR requirements 

established in Subpart 4.8. 

Finding #3: Contract Files do not Contain Relevant Documentation to Evidence the Award and 

Administration Process

DPG selected a sample of 53 high risk contracts awarded between FY 2013 and FY 2018 (See Appendix III). We 

reviewed the corresponding contract files and requested documentation supporting the award and 

administration process performed for each contract. We found that the contract files reviewed were not fully 

supported in the following areas:

• 11 contract files where the award document (SF 1449) and/or modifications (SF 30) in the file were not 

signed by the contractor; 

• six (6) awards where the required Conflict Of Interest (COI) statement was not presented to the vendor;

• four (4) contract files that did not contain all of the SF 30s issued for the contract; and

• two (2) contract files where the SF 1449 and/or SF 30 in the file were not signed by the contracting 

officer.

Also contained within the sample were 38 contracts where a COR was appointed by the contracting officer. DPG 

requested the signed copies of the COR designation letters for these 38 contracts. The RRB was unable to 

provide designation letters for 27 of the contracts and a signed designation letter for five of the contracts.

Lastly, we noted that contract files were not organized in a consistent manner from contract to contract. 

Existing RRB policies and procedures do not contain sufficient guidance to ensure the consistency and 

completeness of the award and administration documentation maintained within the contract files. RRB also did 
8

not have controls in place to confirm that the conflict of interest statement was included in the contract or 

solicitation.

The GAO’s Standards for Internal Control in the Federal Government indicates that management should clearly 

document internal control and all transactions and other significant events in a manner that allows the 

documentation to be readily available for examination. The documentation may appear in management 

directives, administrative policies, or operating manuals, in either paper or electronic form. Documentation and 

records should be properly managed and maintained.

BBO 5 establishes that all contracts with private sector vendors for goods and services will include the following 

provision:

The contractor agrees not to have any direct or indirect financial or familial interest, or engage in any 

activity, which conflicts substantially, or appears to conflict substantially, with the contractor’s duties 

under this contract. The contractor further agrees that the RRB shall have the exclusive right to 

determine whether such a conflict of interest exists, and whether it is substantial. Failure of the 

contractor to adhere to this provision will, at the discretion of the RRB result in the immediate 

termination of the contract without any further liability of the RRB.

FAR guidance states that the contracting officer shall designate and authorize in writing and in accordance with 

agency procedures, a COR on all contracts and orders other than those that are firm-fixed price, and for firmfixed-price contracts and orders as appropriate, unless the contracting officer retains and executes the COR 

duties. The COR shall be designated in writing, with copies furnished to the contractor and the contract 

administration office. FAR provides further that the contract administration office file should contain any 

document modifying the normal assignment of contract administration functions and responsibility.

As a result of the missing documentation, the RRB hard copy contract files do not effectively present a history of 

the actions taken and decisions made to support of the award and administration process. The ability of the RRB 

to resolve a conflict, should it arise, is also diminished by not presenting the COI statement to the vendor in 

either the award or solicitation document.

RECOMMENDATION

We recommend that the Office of Administration/Division of Acquisition Management:

5. update standard policies and procedures to clearly convey the documentation required to be

maintained in the contract file in order to support the award and administration phase;

6. develop and implement standard checklist guidance to be included in the contract file that lists the

required award and administration documentation, identifies if the documentation was applicable to

the award, and indicates the section in which the supporting documents are located;

7. obtain the signed copies of the contracting officer’s representative designation letter for the identified

contracts and include them in the contract files;

8. include obtaining the signed contracting officer’s representative designation letter as part of standard

checklist guidance to be included in the contract file listing required award and administration
9

documentation, identifying if the documentation was applicable to the award, and indicating the section

in which supporting documents are located; and

9. establish a checklist or other control process to ensure that the required conflict of interest statement is

presented to vendors.

MANAGEMENT COMMENTS

The Division of Acquisition Management concurred with Recommendations 5, 6, and 9. The Division of 

Acquisition Management did not concur with Recommendations 7 and 8 on the basis that FAR Subpart 1.602-

2(d), BBO-5, and OA-14 are silent on any requirement to obtain a countersignature from the designated COR 

and maintain such in the contract file.

DPG RESPONSE

The FAR Subpart 4.803(b)(2) lists any document modifying the normal assignment of contract administration 

functions and responsibility as an example of documentation that should be included in the contract 

administration office contract file. We note that the COR designation letter contains a signature line and that 

inclusion of the signed designation letter in the contract file serves as an effective control to confirm that the 

COR received the letter and is aware of their responsibilities. We maintain our recommendations that signed 

copies of the COR designation letter be included in the contract files and incorporated as part of standard 

checklist guidance.

Finding #4: Insufficient Requisition Amounts Identified in the Award and Administration 

Process

DPG selected a sample of 53 high risk award contracts awarded between FY 2013 and FY 2018 (See Appendix III). 

We reviewed the requisition history from the applicable FFS or FMIS system to determine if sufficient funding 

was in place prior to award. We found that requisition amounts were not sufficient in the following nine 

instances: 

• five (5) instances where the awarded amount was greater than the total funds available per the 

requisition document; 

• two (2) instances where the contract award date was prior to the date on the requisition 

documentation; and

• two (2) instances where requisition documentation was not provided.

The total amount associated with the nine awards was $2.6 million.

We determined that controls were not effectively executed to establish sufficient funding within the financial 

system prior to obligating contractual amounts.

Administrative Circular OA-14 requires that employees involved in any procurement process know the 

budgetary control, data entry, and transaction approval procedures. These controls include entering a 

requisition with sufficient funding before incurring an actual obligation through a procurement or contract. Also, 

if a purchase will exceed the funding available under the obligating document, the obligating document should 

be modified before the additional obligation is incurred and a request for payment is received.
10

Obligating funds before sufficient funding is established introduces the risk that funds may need to be drawn 

from other projects in order to fund the shortfall or in the worst case, that the agency incurs a violation of the 

anti-deficiency act.

RECOMMENDATION

DPG recommends that the Office of Administration/Division of Acquisition Management:

10. review established obligation controls and assess the need to implement stronger systems or

supervisory review controls to prevent the situation from recurring.

MANAGEMENT COMMENTS

The Office of Administration and Division of Acquisition Management did not concur with Recommendation 10. 

In their response, they took exception to the inclusion of the potential for an anti-deficiency violation as part of 

the effect for the finding. The Office of Administration and Division of Acquisition Management also provided 

explanations for each of the nine (9) instances identified in the finding.

DPG RESPONSE

Our recommendation is based on the information provided to us by RRB through the end of our audit fieldwork 

which indicated that adequate funding was not in place. During the course of our audit, DPG requested 

explanations for the items noted. The explanations included in RRB’s response were not provided in response 

to our requests. We note that one of the documentation examples listed under FAR Subpart 4.803(a)(3), as 

normally contained in contract files, is evidence of availability of funds. We maintain our recommendation that 

the Office of Administration and Division of Acquisition Management review established obligation controls 

and assess the need to implement stronger systems or supervisory review controls to prevent the situation 

from recurring. We suggest that the guidance in FAR Subpart 4.803(a)(3) be considered in the review process.

The requisition and obligation controls are independent control processes designed to ensure that sufficient 

funding is available at the point of obligation. DPG maintains that if the requisition process is not executed as 

designed, the risk of an anti-deficiency act violation occurring increases because another control must identify 

and correct the shortfall. 

Finding #5: Contract Files do not Contain Relevant Documentation to Evidence the Closeout 

Process

FAR provides a process and timeframes for closing contract files once evidence of physical completion has been 

accomplished. To ensure compliance with the FAR closeout process, RRB developed a contract closeout checklist 

to be completed for each applicable contract. DPG selected all 29 contract closeouts identified by RRB between 

FY 2013 and FY 2018. We reviewed the corresponding closeout checklists and related documentation to 

evidence the closeout process. We found that the contract closeouts were not fully completed in the following 

areas:

• 27 checklists where only a portion of the checklist information was completed to accomplish closeout;

• two (2) checklists not received; and 

• six (6) instances where obligated funds remained in FMIS beyond the closeout date. 
11

DPG also noted that while the closeouts represented the period from FY 2013 to FY 2018, final completion of the 

checklists reviewed was not accomplished until April and May of 2019.

The delayed and partial completion of the closeout checklists resulted from the placement of limited resources 

within the Division of Acquisition Management on other priorities.

FAR provides that; the administrative closeout procedures must ensure that contract funds review is completed, 

and excess funds are de-obligated. Further, FAR requires the contracting officer administering the contract to 

ensure that a contract completion statement containing the following information is prepared:

1) Contract administration office name and address (if different from the contracting office).

2) Contracting office name and address.

3) Contract number.

4) Last modification number.

5) Last call or order number.

6) Contractor name and address.

7) Dollar amount of excess funds, if any.

8) Voucher number and date, if final payment has been made.

9) Invoice number and date, if the final approved invoice has been forwarded to a disbursing office of 

another agency or activity and the status of the payment is unknown.

10) A statement that all required contract administration actions have been fully and satisfactorily 

accomplished.

11) Name and signature of the contracting officer.

12) Date.

Additional FAR guidance identifies the following with respect to time standards for closing out contract files:

• files for firm-fixed-price contracts, other than those using simplified acquisition procedures, should be 

closed within 6 months after the date on which the contracting officer receives evidence of physical 

completion;

• files for contracts requiring settlement of indirect cost rates should be closed within 36 months of the 

month in which the contracting officer receives evidence of physical completion; and 

• files for all other contracts should be closed within 20 months of the month in which the contracting 

officer receives evidence of physical completion.

Delaying the completion of the closeout process reduces the effectiveness of contractor evaluations and 

overstates the obligated funds balance in FMIS.

RECOMMENDATION

DPG recommends that the Office of Administration/Division of Acquisition Management:

11. establish standard procedures for identifying and tracking contracts that have been physically

completed; and

12. take steps to ensure the remaining balances are de-obligated in FMIS in a timely manner.

MANAGEMENT COMMENTS
12

The Office of Administration and Division of Acquisition Management concurred with Recommendations 11 

and 12.

Finding #6: Inaccurate Reporting to the Federal Procurement Data System

The FPDS provides a comprehensive web-based tool for agencies to report contract actions. The resulting data 

provides a basis for recurring and special reports to the President, the Congress, GAO, Federal executive 

agencies, and the general public. DPG identified 12 instances where the contract number reported in FPDS was 

incorrect. In two of these instances, DPG noted that amounts were reported to FPDS for both the incorrect and 

correct contract numbers. 

The process used by RRB to review reported amounts prior to submitting them in FPDS was not effective.

FAR guidance provides that the Senior Procurement Executive in coordination with the head of the contracting 

activity are responsible for developing and monitoring a process to ensure timely and accurate reporting of 

contractual actions to FPDS.

Contract information made available to the public is not accurately reflected.

RECOMMENDATION

DPG recommends that the Office of Administration/Division of Acquisition Management:

13. review the established control process used to transmit information to the Federal Procurement Data

System and update the process in order to report information more accurately; and

14. revise the information previously reported in the Federal Procurement Data System to reflect the 

correct contract numbers and amounts.

MANAGEMENT COMMENTS

The Office of Administration and Division of Acquisition Management concurred with Recommendations 13 

and 14.

Finding #7: Best Practices for Human Capital Management

Several of the findings identified by our audit were influenced by limited resources within the Division of 

Acquisition Management. DPG determined that an overall human capital plan was drafted by the RRB in 

2015 but never finalized because it was not required by the Office of Management and Budget (OMB). 

Adequate human capital planning should specifically address the approaches in place to ensure that the 

acquisition workforce is properly positioned to support the agency needs. It is not clear from the

documentation provided during our audit, how RRB coordinates the various elements of human capital 

management in a manner that supports and benefits the acquisition workforce without a documented 

plan. 
13

GAO’s Framework for Assessing the Acquisition Function at Federal Agencies provides four cornerstones 

for establishing an efficient, effective, and accountable acquisition process. The third cornerstone of the 

guidance focuses on the role of human capital and stresses that effective human capital management 

ensures that an agency has the right staff in the right numbers applying skills where needed to 

accomplish the mission effectively. Creating an acquisition workforce with the right skills and capabilities 

can be a challenge given changes to acquisition processes, the introduction or expansion of alternative 

contracting approaches, and increased reliance on services provided by the private sector. In addition, 

agencies are facing a growing number of employees who are eligible for retirement, which could create 

an imbalance with regard to acquisition experience and skill sets.

Without adequate numbers of properly trained resources, the Division of Acquisition Management is not 

positioned properly to support agency requirements.

RECOMMENDATION

DPG recommends that the Office of Administration/Division of Acquisition Management:

15. implement a human capital plan or alternative strategy document that contains specific strategies to

support the acquisitions workforce in the longer term and add additional resources in the shorter term.

MANAGEMENT COMMENTS

The Office of Administration and Division of Acquisition Management did not concur with Recommendation 15.

In their response, they indicated that components of the original human capital plan have been implemented 

through the strategic management of human capital. Their response identified measures being taken to 

address human capital at an RRB-wide level such as completion of a workforce analysis, use of the Learning 

Management System (LMS), rehire of annuitants, re-establishment of the Training and Development Section 

within the Bureau of Human Resources, and the agency Executive Candidate Development Program. 

The response also noted that the scope of the audit on this finding centered solely on review of the agency’s 

human capital and that the finding asserts that Acquisition Management lacks “adequate numbers of properly 

trained resources.” RRB management indicates that audit staff did not ask or query the acquisition staff as to 

Acquisition Management specific or acquisition workforce training and certification requirements and records. 

Finally, the response indicates that the RRB Procurement section of the Acquisition Management Division is at 

full staff, as of the date of our draft report.

DPG RESPONSE

DPG requested a copy of RRB’s human capital plan from both Acquisitions Management and Human Resources 

during our audit and as indicated in the finding, was informed that the plan was drafted but was not finalized. 

The information provided in RRB’s response regarding strategic management of human capital was not 

provided during our audit in response to our requests. The additional information does provide details on the 

elements of RRB’s overall human capital strategy but does not detail how RRB has specifically addressed the 

needs of the acquisition workforce. Our recommendation is based on best practices guidance established by 

GAO that identifies elements of human capital planning to be considered specifically for the acquisition 

workforce. We maintain that RRB should implement a human capital plan or alternative strategy document 

that contains specific strategies to support the acquisitions workforce in the longer term.
14

DPG did request and received the Acquisition Management training plan. We also gained an understanding of 

the process used to certify CORs through our interviews with Acquisition Management staff. The effect 

presented in our finding is not an assertion that current staff is not properly trained. It is an assertion that if 

proper attention is not placed on the acquisition workforce within the human capital planning process, that 

adequate numbers of resources who are properly trained will not be in position to support agency needs going 

forward. 

The timely closeout of contract files and the quality of support maintained within the contract files are 

conditions identified in our audit that stemmed from a lack of resources during the period for our audit. While 

RRB indicates in its response that it is fully staffed, we maintain our recommendation to consider adding 

resources in the shorter term that can help implement recommended changes and remain current with existing 

requirements.
15

APPENDIX I MANAGEMENT COMMENTS
16
17
18
19
20
21
22
23

APPENDIX II STATISTICAL SAMPLING – SOLICITATIONS SAMPLE

Appendix II: Statistical Sampling

Statistical Sampling Methodology and Results

Solicitations

Fiscal Year (FY) 2013 through December 2018

This appendix presents the methodology and results for the sample testing of solicitations from FY 2013 through 

December 2018 to assess compliance with FAR and agency requirements in the pre-award process. We selected 

a statically valid random sample of solicitations. 

Sampling Objective

Our sampling objective was to assess adherence to specific elements of Federal Acquisition Regulation (FAR), 

Basic Board Order 5, Administrative Circular OA-14, and the GAO Framework for Assessing the Acquisition 

Function at Federal Agencies in the pre-award process. 

Scope

Our sample was selected from all solicitations performed during FY 2013 through December 2018.

Universe/Sampling Unit

The sampling universe consisted of 168 solicitations identified in FFS or FMIS during FY 2013 through December 

2018. The sampling unit was one solicitation. 

Sample Selection Methodology

We used attribute estimation sampling using a presumed universe error rate of 10 percent, desired maximum 

precision of 5 percent, and desired confidence level of 90 percent, which directed a sample size of 62 

solicitations. 

Sample Evaluation Methodology

For each solicitation, we obtained and reviewed the following documents in order to accomplish our sampling 

objectives:

• Requisition document,

• Market Research Performed (If Any),

• Acquisition Plan,

• Request for Proposal (RFP) or Request for Quotation (RFQ) Document,

• RFP or RFQ Amendments,

• Winning Bid Response,

• Determination & Finding Summary, and

• Other Contract File Documentation as Necessary.
24

Results of Review

Our review resulted in the following errors, as identified by attribute.

Table 1. Solicitation Sample Results

Attribute Test

Number 

of 

Samples

Tested

Exceptions 

Observed 

in Sample

The requisition contains the appropriate approvals based on the amount and 

type of requisition.

62 2

The CO or the IT Steering Committee reviewed and approved the requisition. 62 4

Notice of intent to procure for items/services greater than $25,000 was 

placed on FedBizOpps unless another Federal Agency contract was used.

62 16

Three or more bids were solicited unless the purchase was identified as a 

Micropurchase or Sole-source procurement.

62 12

For requisitions between $3,000 and $100,000 seeking to purchase services 

priced at hourly rates and for all requisitions over $100,000 a SOW or SOO 

was prepared.

62 1

Market research was performed to identify the best approach to procuring 

the goods or services

62 12

RRB developed an acquisition strategy and/or plan to ensure the goods were 

procured in the timeframe needed.

62 0

If questions were submitted, responses were made available to all offerors 62 0

Evaluations from the Technical Evaluation Panel were maintained in the 

Contract file.

62 0

Evaluation of the Pricing Submission was performed independent of the 

Technical Evaluation.

62 0

A Determination and Finding Summary of the decision was prepared and 

signed, by the CO and Contract Specialist, and included in the contract file.

62 39

Additional concurrence for the award was obtained from another party such 

as OGC.

62 0

Copies of any debriefings held with non-winning bidders are maintained in 

the contract file.

62 0
25

APPENDIX III STATISTICAL SAMPLING – HIGH RISK AWARDS SAMPLE

Appendix III: Statistical Sampling

Statistical Sampling Methodology and Results

High Risk Awards

Fiscal Year (FY) 2013 through FY 2018

This appendix presents the methodology and results for the sample testing of high risk awards from FY 2013 

through FY 2018 to assess compliance with FAR and agency requirements in the award and administration 

phase. We selected a statically valid random sample of high risk awards. 

Sampling Objective

Our sampling objective was to assess adherence to specific elements of Federal Acquisition Regulation (FAR), 

Anti-deficiency Act., Prompt Payment Act, Basic Board Order 5, Administrative Circular OA-14, and the GAO 

Framework for Assessing the Acquisition Function at Federal Agencies in the awards and administration phase. 

Scope

Our sample was selected from all high risk awards during FY 2013 through FY 2018. A high risk award is defined 

as follows:

• Any award where the total award value exceeded $1 million over the course of the FY 2013 through FY 

2018 audit period, or 

• Any award where the total award value exceeded $100,000 over the course of the FY 2013 through FY 

2018 audit period and the contract did not meet the Level 4 exclusion criteria in BBO 5.

• Any awards where the total award value was over $100,000 but none of the individual Fiscal Year award 

amounts exceeded $100,000 were excluded.

Universe/Sampling Unit

The sampling universe consisted of 112 high risk awards from FY 2013 through FY 2018. The sampling unit was 

one high risk award. 

Sample Selection Methodology

We used attribute estimation sampling using a presumed universe error rate of 10 percent, desired maximum 

precision of 5 percent, and desired confidence level of 90 percent, which directed a sample size of 53 high risk 

awards. 

Sample Evaluation Methodology

For each high risk award, we obtained and reviewed the following documents in order to accomplish our 

sampling objectives:
26

• Winning Bid Response,

• Signed Contract and Modifications,

• Evidence of Available Funds,

• COR Assignment Letter,

• Deliverable Schedule,

• Project Plan (If Applicable),

• Evidence of Deliverable Acceptance, and

• Evidence of Invoice Approval.

Results of Review

Our review resulted in the following errors, as identified by attribute.

Table 2. High Risk Award Sample Results

Attribute Test

Number

of 

Samples

Tested

Exceptions 

Observed 

in Sample

RRB included the required conflict of interest statement in the contract 53 6

The Form 1449 or modification document contractually obligating the RRB 

was signed by the CO

53 16

The awarded amount of the initial award or modification does not exceed 

available funding.

53 9

Was a COR assigned to the contract and if not was it reasonable that no COR 

was assigned?

53 0

Was the assigned COR letter in the file? 38 32

Is there a stated deliverable(s) in the contract? 53 0

Did the CO or COR evidence acceptance of deliverables and monitor 

contractor performance, including end of contract performance reports.

53 0

Did the CO or COR evidence approval of invoices. 53 3

Did the COR submit written reports (at least monthly) to the CO. 38 38

The invoice was date stamped by the bureau/office personnel opening the 

invoice, the invoice was forwarded to BFO, and information indicating the 

obligation against which the invoice should be paid is included with the 

invoice.

53 2

Invoices for more than $100,000 contain two signatures by authorized 

individuals.

53 3

A Project plan was established by the contract to manage and control project 

implementation.

38 0